FY 1978 Financial Statements
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CITY OF EDGEWATER, FLORIDA
FINANCIAL STATEMENTS
SEPTEMBER 30, 1978
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MAY. Z I M A & CO.
CERTIFIED PUBLIC ACCOUNTANTS
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CITY CLERK
Sue Blackwell
CITY OF EDGEWATER, FLORIDA
FINANCIAL STATEMENTS
SEPTEMBER 30, 1978
COUNCIL MEMBERS
Robert H. Christy, Mayor
Louis Rotundo
Carl Shell
Walter B. Sikes
Calvin R. Dietz
CITY ATTORNEY
Judson I. Woods, Jr.
CONSULTING ENGINEERS
Briley-Wild & Associates
CITY AUDITORS
May, Zima & Co.
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CITY OF EDGEWATER, FLORIDA
TABLE OF CONTENTS
COMBINED BALANCE SHEET - ALL FUNDS
GENERAL FUND
Balance Sheet. . . . . . . . . . . . . . . . .
Statement of Changes in Fund Balance . . . . .
Statement of Revenue and Transfers - Estimated
Statement of Actual and Estimated Expenditures
1
2
AUDITORS' REPORT. . .
and Actual.
3
4
5 - 6
7 - 10
SPECIAL REVENUE FUNDS
Combined Balance Sheet
. . . . . . . . . . . . . . . . . . . . 11
Federal Revenue Sharing Fund:
Balance Sheet. . . . . . . . . . . . . . . . .
Statement of Changes in Fund Balance . . . . .
Statement of Revenue - Estimated and Actual. .
Statement of Actual and Estimated Expenditures .
12
12
13
13
Anti-Recession Fund:
Balance Sheet. . . . . . . . . . . . . . . . .
Statement of Changes in Fund Balance . . . . .
Statement of Revenue - Estimated and Actual. . .
Statement of Actual and Estimated Expenditures
14
14
15
15
ENTERPRISE FUNDS
Combined Balance Sheet . . . . . . . . . . . . . . . . . . . . . . . . 16
Water and Sewer Fund:
Balance Sheet. . . . . . . . . . . . . . .
Statement of Revenue and Expense . . . . .
Statement of Changes in Retained Earnings.
Statement of Changes in Financial Position
Schedule of Fixed Assets and Depreciation.
Statement of Revenue - Estimated and Actual - Water and
Sewer System Revenue Fund. . . . . . . . . . . .
Statement of Actual and Estimated Expenditures and
Transfers - Water and Sewer System Revenue Fund.
Statement of Revenue and Transfers - Estimated and
Actual - Water and Sewer System Operating Fund
Statement of Actual and Estimated Expenditures -
Water and Sewer System Operating Fund. . . . . .
17
18 - 19
20
21
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23
24
25
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ENTERPRISE FUNDS - (continued)
Refuse Collection Fund:
Balance Sheet. . . . . . . . . . . . . . .
Statement of Revenue and Expense . . . . .
Statement of Changes in Retained Earnings.
Statement of Changes in Financial Position
Statement of Revenue - Estimated and Actual. .
Statement of Actual and Estimated Expenditures
27
28
29
30
31
31
GENERAL FIXED ASSETS GROUP OF ACCOUNTS
Statement of General Fixed Assets. . . . . . . . . . . . .
Statement of Changes in Investment in General Fixed Assets
Statement of Changes in General Fixed Assets .
NOTES TO FINANCIAL STATEMENTS. . . . .
32
33
34
35 - 41
SUPPLEMENTAL INFORMATION
Summary of Debt Service Requirements . . . .
Schedule of Insurance in Force . . . . . . .
Number of Customers Served by the Water and
Sewer Utility System. . . . . . . . . . .
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44
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AUDITORS. REPORT
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flag, zima & Co.
CERTIFIED PUBLIC ACCOUNTANTS
To the Honorable Mayor and
City Counci 1
City of Edgewater, Florida
AUDITORS. REPORT
We have examined the financial statements of the various funds and account
group of the City of Edgewater, Florida for the year ended September 30,
1978. Our examination was made in accordance with generally accepted
auditing standards and, accordingly, included such tests of the accounting
records and such other auditing procedures as we considered necessary in the
circumstances.
In our opinion, the above mentioned financial statements present fairly the
financial position of the various funds and account group of the City of
Edgewater, Florida at September 30, 1978, and the results of operations of
such funds and the changes in financial position of the Water and Sewer Fund
for the year then ended, in conformity with generally accepted accounting
principles, except for the change, with which we concur, in the reporting
entity of the Refuse Collection Fund, as explained in Note 3 to the financial
statements, have been applied on a basis consistent with that of the preceding
year.
Also, in our oplnlon, except as explained in Note 5 to the financial state-
ments, the requirements and covenants set forth by the ordinances covering
the issuance of bonds and amendments thereto have been fulfilled.
The accompanying supplemental information presented on Pages 42 to 44 is not
necessary for a fair presentation of the financial statements, but is presented
as additional analytical data. This information has been subjected to the
tests and other auditing procedures applied in the examination of the financial
statements mentioned above and, in our opinion, is fairly stated in all
material respects in relation to the financial statements taken as a whole.
~a;; Irev qt a.
Daytona Beach, Florida
December 18, 1978
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COMBINED BALANCE SHEET - ALL FUNDS
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GENERAL FUND
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Cash
Taxes receivable
Paving assessments receivable
Due from State of Florida
Due from County of Volusia
Inventory
Meter deposits
TOTAL ASSETS
CITY OF EDGEWATER, FLORIDA
GENERAL FUND
BALANCE SHEET
SEPTEMBER 30, 1978
ASSETS
$
88,734.91
2,352.59
621.51
9,016.29
2,130.28
2,870.51
20.00
LIABILITIES, RESERVES AND FUND BALANCE
LIAB I LIT! ES
Accounts payable
Accrued liabilities
Due to Water and Sewer Fund
TOTAL LIABILITIES
CONTINGENCIES AND COMMITMENTS (Note 10)
RESERVES
Reserve for taxes receivable
Reserve for uncollected paving
assessments
FUND BALANCE
Reserved for police training (Note 2)
Unreserved
TOTAL LIABILITIES, RESERVES
AND FUND BALANCE
$
9,114.20
6,247.90
5,568.89
$ 105.746.09
$ 20,930.99
$ 2,352.59
621.51 2,974.10
$ 169.79
81,671.21 81,841. 00
$ 105.746.09
See accompanying notes to financial statements.
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CITY OF EDGEWATER, FLORIDA
GENERAL FUND
STATEMENT OF CHANGES IN FUND BALANCE
FOR THE YEAR ENDED SEPTEMBER 30, 1978
FUND BALANCE - October 1, 1977 $ 69,920.72
ADD
--rxcess revenue over expenditures:
Revenue $ 682,222.77
Expenditures 654,273.37 27,949.40
$ 97,870.12
DEDUCT
Contribution to Refuse Collection
Fund (Note 3) 16,029.12
FUND BALANCE - September 30, 1978 $ 81.841.00
See accompanying notes to financial statements.
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CITY OF EDGEWATER, FLORIDA PAGE 1 OF 2
~ GENERAL FUND
~ STATEMENT OF REVENUE AND TRANSFERS - ESTIMATED AND ACTUAL
FOR THE YEAR ENDED SEPTEMBER 30, 1978
ACTUAL
~ ESTIMATED ACTUAL OVER (UNDER)
REVENUE REVENUE ESTIMATED
~ PROPERTY TAXES $ 222,204.00 $ 252,972.92 $ 30,768.92
LICENSES AND PERMITS
a Building permits $ 20,000.00 $ 26,512.12 $ 6,512.12
Electric permits 8,000.00 12,763.10 4,763.10
Plumbing permits 4,000.00 7,820.00 3,820.00
~ Mechanical permits 4,000.00 4,660.50 660.50
Business and occupational
1 i cens es . 7,500.00 13,973.60 6,473.60
D Mobile home tags 7,000.00 4,095.52 (2,904.48)
Zoning variances - 0 - 1,060.00 1,060.00
$ 50,500.00 $ 70,884.84 $ 20,384.84
0 FINES AND FORFEITURES
Fines and forfeitures $ 10,000.00 $ 6,706.00 $ (3,294.00)
Local police education - 0 - 327.00 327.00
a $ 10,000.00 $ 7,033.00 $ (2,967.00)
FRANCHISE TAXES $ 55,000.00 $ 60,704.92 $ 5,704.92
Q RENTAL INCOME
Community Center $ 850.00 $ 1,576.00 $ 726.00
Office rent 1,800.00 1,800.00 - 0 -
D Equipment rental - 0 - 720.00 720.00
$ 2,650.00 $ 4,096.00 $ 1,446.00
~ INTERGOVERNMENTAL REVENUE
Additional 2~ cigarette tax $ 17,000.00 $ 18,427.27 $ 1,427.27
County occupational license
rebate 4,000.00 - 0 - (4,000.00)
~ State revenue sharing 131,200.00 128,838.00 (2,362.00)
Municipal fuel tax rebate - 0 - 2,437.30 2,437.30
Federal Comprehensive Employment
D Training Act (CETA) 29,490.00 37,871. 26 8,381. 26
County road and bridge tax - 0 - 1,871.00 1,871.00
State funded exemptions 13 ,000.00 13,817.47 817.47
~ Beverage licenses 3,000.00 2,416.80 (583.20)
State Division of Library
Services Grant - 0 - 4,297.01 4,297.01
$ 197,690.00 $ 209,976.11 $ 12,286.11
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CITY OF EDGEWATER, FLORIDA PAGE 2 OF 2
GENERAL FUND
STATEMENT OF REVENUE AND TRANSFERS - ESTIMATED AND ACTUAL
FOR THE YEAR ENDED SEPTEMBER 30, 1978
ACTUAL
ESTIMATED ACTUAL OVER (UNDER)
REVENUE REVENUE ESTIMATED
OTHER REVENUE
Culverts $ - 0 - $ 24,300.36 $ 24,300.36
Interest income - 0 - 2,711.43 2,711.43
Paving - 0 - 18,386.00 18,386.00
Mi sce 11 aneous 15,651. 00 12,757.19 (2,893.81)
$ 15,651. 00 $ 58,154.98 $ 42,503.98
TOTAL REVENUE $ 553,695.00 $ 663,822.77 $ 110,127.77
TRANSFERS
Transfers from Water and
Sewer Fund 18,400.00 18,400.00 - 0 -
TOTAL REVENUE AND
TRANSFERS $ 572,095.00 $ 682,222.77 $ 110,127.77
APPROPRIATED FUND BALANCE 45,964.00 - 0 - (45,964.00)
TOTALS $ 618.059.00 -$ 682.222.77 -$ 64 .163 . 77
See accompanying notes to financial statements.
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CITY OF EDGEWATER, FLORIDA PAGE 1 OF 4
~ GENERAL FUND
~ STATEMENT OF ACTUAL AND ESTIMATED EXPENDITURES
FOR THE YEAR ENDED SEPTEMBER 30, 1978
ACTUAL
Q APPROPRIATIONS ACTUAL (OVER) UNDER
FUNCTION, ACTIVITY AND OBJECT (REVISED) EXPENDITURES ESTIMATED
~ GENERAL GOVERNMENT (Note 11)
Mayor and Council:
Personal services $ 18,101.00 $ 21,294.51 $ (3,193.51)
D Supplies and materials 1,650.00 1,948.83 (298.83)
Other services and charges 5,402.00 9,434. 13 ( 4,032.13)
Capita 1 outl ay 2.00 - 0 - 2.00
~ TOTAL MAYOR AND
COUNCIL $ 25,155.00 $ 32,677.47 $ (7,522.47)
D Legal and Court:
Personal services $ 3,025.00 $ 3,000.00 $ 25.00
Supplies and materials 60.00 - 0 - 60.00
Other services and charges 4,775.00 6,870.49 (2,095.49)
~ TOTAL LEGAL AND
COURT $ 7,860.00 $ 9,870.49 $ (2,010.49)
~ Building Inspector:
Personal services $ 18,000.00 $ 20,292.26 $ (2,292.26)
Q Supplies and materials 250.00 499.40 (249.40)
Other services and charges 150.00 87.00 63.00
TOTAL BUILDING INSPECTOR $ 18,400.00 $ 20,878.66 $ (2,478.66)
Q City Ha 11 :
Personal services $ 2,400.00 $ 3,127.63 $ (727.63)
~ Supplies and materials 450.00 566.77 (116.77)
Other services and charges 6,750.00 8,330.65 (1,580.65 )
Capital outlay 2.00 - 0 - 2.00
~ TOTAL CITY HALL $ 9,602.00 $ 12,025.05 $ (2,423.05)
Community Center:
~ Personal services $ 2,400.00 $ 2,300.00 $ 100.00
Supplies and materials 700.00 381.94 318.06
Other services and charges 1,550.00 2,076.66 (526.66)
~ Capital outlay 2.00 - 0 - 2.00
TOTAL COMMUNITY CENTER $ 4,652.00 $ 4,758.60 $ (106.60)
~
~ See accompanying notes to financial statements.
0 7.
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CITY OF EDGEWATER, FLORIDA PAGE 2 OF 4
i GENERAL FUND
STATEMENT OF ACTUAL AND ESTIMATED EXPENDITURES
FOR THE YEAR ENDED SEPTEMBER 30, 1978
ACTUAL
~ APPROPRIATIONS ACTUAL (OVER) UNDER
FUNCTION, ACTIVITY AND OBJECT (REVISED) EXPENDITURES ESTIMATED
~ GENERAL GOVERNMENT - (continued)
Library:
Supplies and materials $ 1,500.00 $ 77 .58 $ 1,422.42
i Other services and charges 600.00 574.62 25.38
Capital outlay 2.00 - 0 - 2.00
TOTAL LIBRARY $ 2,102.00 $ 652.20 $ 1,449.80
D Property Management $ 1.00 $ - 0 - $ 1.00
~ TOTAL PROPERTY MANAGEMENT $ 1.00 $ - 0 - $ 1.00
TOTAL GENERAL GOVERNMENT $ 67,772.00 $ 80,862.47 $ (13,090.47)
~ FINANCIAL ADMINISTRATION (Note 11)
City Clerk:
Personal services $ 33,670.00 $ 29,815.09 $ 3,854.91
D Supplies and materials 4,150.00 2,729.54 1,420.46
Other services and charges 8,601.00 11 ,331. 63 (2,730.63)
Capital outlay 2.00 263.75 (261.75)
0 TOTAL CITY CLERK $ 46,423.00 $ 44,140.01 $ 2,282.99
~ TOTAL FINANCIAL
ADMINISTRATION $ 46,423.00 $ 44,140.01 $ 2,282.99
PUBLIC SAFETY (Note 11)
~ Police:
Personal services $ 120,975.00 $ 132,275.02 $ (11,300.02)
Supplies and materials 2,150.00 13,553.74 (11,403.74)
D Other services and charges 18,125.00 11 ,085.94 7,039.06
Capital outlay 1.00 2,285.85 (2,284.85)
TOT AL POLI CE $ 141,251.00 $ 159,200.55 $ (17,949.55)
~ Fire:
Personal services $ 8,025.00 $ 7,189.84 $ 835.16
Q Supplies and materials 700.00 1,265.46 (565.46)
Other services and charges 12,050.00 12,918.66 (868.66)
Capital outlay 3.00 5,283.14 (5,280.14)
~ TOTAL FIRE $ 20,778.00 $ 26,657.10 $ (5,879.10)
Civil Defense:
~ Other services and charges $ 900.00 $ 698.96 $ 201. 04
Capital outlay 1.00 - 0 - 1.00
~ TOTAL CIVIL DEFENSE $ 901.00 $ 698.96 $ 202.04
~ See accompanying notes to fi nanci a 1 statements. 8.
iJ CITY OF EDGEWATER, FLORIDA
PAGE 3 OF 4
D GENERAL FUND
STATEMENT OF ACTUAL AND ESTIMATED EXPENDITURES
FOR THE YEAR ENDED SEPTEMBER 30, 1978
ACTUAL
~ APPROPRIATIONS ACTUAL (OVER) UNDER
FUNCTION, ACTIVITY AND OBJECT (REV ISED) EXPENDITURES ESTIMATED
~ PUBLIC SAFETY - (continued)
Emergency Rescue:
Personal services $ 350.00 $ 98.04 $ 251. 96
Ii Supplies and materials 500.00 431.30 68.70
Other services and charges 1,800.00 1,973.63 (173.63)
Capital outlay 1.00 840.00 (839.00)
~ TOTAL EMERGENCY RESCUE $ 2,651.00 $ 3,342.97 $ (691. 97)
TOTAL PUBLIC SAFETY $ 165,581.00 $ 189,899.58 $ (24,318.58)
i PUBLIC WORKS (Note 11)
Streets:
~ Personal services $ 110,555.00 $ 116,754.17 $ ( 6 , 199 . 17)
Supplies and materials 16,025.00 8,681.04 7,343.96
Other services and charges 9,100.00 14,396.42 (5,296.42)
Capita 1 outl ay 4.00 22,357.40 (22,353.40)
D TOTAL STREETS $ 135,684.00 $ 162,189.03 $ (26,505.03)
~ Street Lights:
Other services and charges $ 30,500.00 $ 31,724.34 $ (1 ,224.34 )
TOTAL STREET LIGHTS $ 30,500.00 $ 31,724.34 $ (1,224.34)
~ Sanitary Landfill:
Personal services $ 3,000.00 $ 2,370.82 $ 629.18
D Supplies and materials 501. 00 1,219.65 (718.65)
Other services and charges 10,600'.00 120.00 10,480.00
Capita 1 outl ay 2.00 - 0 - 2.00
~ TOTAL SANITARY LANDFILL $ 14,103.00 $ 3,710.47 $ 10,392.53
TOTAL PUBLIC WORKS $ 180,287.00 $ 197,623.84 $ (17,336.84)
~ PARKS AND RECREATION (Note 11)
Park Maintenance and Recreation:
~ Personal services $ 2,650.00 $ 3,794.68 $ (1,144.68)
Supplies and materials 550.00 313.92 236.08
Other services and charges 1,800.00 1,160.25 639.75
Q Capital outlay 2.00 - 0 - 2.00
TOTAL PARK MAINTENANCE
AND RECREATION $ 5,002.00 $ 5,268.85 $ (266.85)
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D See accompanying notes to financial statements.
D 9.
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CITY OF EDGEWATER, FLORIDA PAGE 4 OF 4
I GENERAL FUND
STATEMENT OF ACTUAL AND ESTIMATED EXPENDITURES
FOR THE YEAR ENDED SEPTEMBER 30, 1978
ACTUAL
i APPROPRIATIONS ACTUAL (OVER) UNDER
FUNCTION, ACTIVITY AND OBJECT (REVISED ) EXPENDITURES ESTIMATED
~ PARKS AND RECREATION - (continued)
Shuffleboard Club House:
Supplies and materials $ 170.00 $ 214.34 $ (44.34)
I Other services and charges 530.00 301.18 228.82
TOTAL SHUFFLEBOARD CLUB
HOUSE $ 700.00 $ 515.52 $ 184.48
~ Multigames Courts:
Other services and charges $ - 0 - $ 73.96 $ (73.96)
~ TOTAL MULTIGAMES COURTS $ - 0 - $ 73.96 $ (73.96)
~ TOTAL PARKS AND
RECREATION $ 5,702.00 $ 5,858.33 $ (156.33)
NONDEPARTMENTAL (Note 11)
i Social Security $ 19,000.00 $ 20,982.25 $ (1,982.25)
Health insurance 11 ,000.00 16,719.22 (5,719.22)
Workers I Compensation 16,000.00 11,248.91 4,751.09
I Humane Soci ety 3,600.00 3,600.00 - 0 -
Unemployment compensation 5,000.00 1,131.00 3,869.00
Collective Bargaining 500.00 - 0 - 500.00
~ Insurance 15,000.00 27,822.20 (12,822.20)
Retirement 29,145.00 20,298.56 8,846.44
Emergency - contingency 46,049.00 4,883.60 41,165.40
Mi sce 11 aneous 7,000.00 11 ,201. 46 (4,201. 46)
i TOTAL NONDEPARTMENTAL $ 152,294.00 $ 117,887.20 $ 34,406.80
~ SPECIAL ACCOUNT FOR CAPITAL
IMPROVEMENTS (Note 11)
City Ha 11 $ - 0 - $ 224.71 $ (224.71)
Library - 0 - 3,088.29 (3,088.29)
~ Culverts - 0 - 14,688.94 (14,688.94)
TOTAL SPECIAL ACCOUNT FOR
~ CAPITAL IMPROVEMENTS $ - 0 - $ 18,001. 94 $ (18,001.94)
$ j $ (36.214.37)
TOTALS 618.059.00 654.273.37
~
~ See accompanying notes to financial statements.
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See accompanying notes to financial statements.
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CITY OF EDGEWATER, FLORIDA
FEDERAL REVENUE SHARING FUND
BALANCE SHEET
SEPTEMBER 30, 1978
ASSETS
Cash
Investments
Due from Water and Sewer Fund
Due from federal government
$
4,737.05
76,200.00
19,849.64
13,380.00
TOTAL ASSETS
LIABILITIES AND FUND BALANCE
LIABILITIES
Accounts payable
FUND BALANCE
Unreserved:
Designated for specific
capital projects
Undesignated
$
76,124.96
11,110.70
TOTAL LIABILITIES AND FUND BALANCE
STATEMENT OF CHANGES IN FUND BALANCE
FOR THE YEAR ENDED SEPTEMBER 30, 1978
FUND BALANCE - October 1, 1977
ADD
DEDUCT
Excess expenditures over revenue:
Expenditures
Revenue
$ 108,839.14
68,606.32
FUND BALANCE - September 30, 1978
See accompanying notes to financial statements.
i'
,.
-$
114.166.69
$
26,931. 03
$
87,235.66
114 .166.69
$
127,468.48
- 0 -
127,468.48
$
$
40,232.82
87.235.66
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CITY OF EDGEWATER, FLORIDA
FEDERAL REVENUE SHARING FUND
STATEMENT OF REVENUE - ESTIMATED AND ACTUAL
FOR THE YEAR ENDED SEPTEMBER 30, 1978
ESTIMATED ACTUAL
REVENUE REVENUE
ACTUAL
OVER (UNDER)
ESTIMATED
Entitlement Period IV $ 74,355.04 $ 66,953.00 $ (7 ,402 . 04 )
Interest income - 0 - 1,653.32 1,653.32
TOTAL REVENUE $ 74,355.04 $ 68,606.32 $ (5,748.72)
Appropriated fund balance 29,420.51 - 0 - (29,420.51)
TOTALS $ 103 .775.55 j 68.606.32 $ (35.169.23)
See accompanying notes to financial statements.
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CITY OF EDGEWATER, FLORIDA
ANTI-RECESSION FUND
BALANCE SHEET
SEPTEMBER 30, 1978
ASSETS
Cash
TOTAL ASSETS
LIABILITIES AND FUND BALANCE
LIABILITIES
Accrued liabilities
FUND BALANCE
TOTAL LIABILITIES AND FUND BALANCE
STATEMENT OF CHANGES IN FUND BALANCE
FOR THE YEAR ENDED SEPTEMBER 30, 1978
FUND BALANCE - October 1, 1977
ADD
DEDUCT
Excess expenditures over revenue:
Expenditures
Revenue
$
14,008.28
9,208.00
FUND BALANCE - September 30, 1978
See accompanying notes to financial statements.
$
$
6,598.90
6.598.90
$
220.18
6,378.72
6.598.90
-$
$
11 , 179 . 00
- 0 -
$
11,179.00
$
4,800.28
6.378.72
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CITY OF EDGEWATER, FLORIDA
ANTI-RECESSION FUND
STATEMENT OF REVENUE - ESTIMATED AND ACTUAL
FOR THE YEAR ENDED SEPTEMBER 30, 1978
ESTIMATED ACTUAL
REVENUE REVENUE
ACTUAL
OVER (UNDER)
ESTIMATED
Payments received from
federal government $ 9,208.00 $ 9,208.00 $ - 0 -
Appropriated fund balance 5,217.00 - 0 - (5,217.00)
TOTALS $ 14,425.00 $ 9,208.00 -$ (5,217.00)
STATEMENT OF ACTUAL AND ESTIMATED EXPENDITURES
FOR THE YEAR ENDED SEPTEMBER 30, 1978
ACTUAL
ACTUAL (OVER) UNDER
APPROPRIATIONS EXPENDITURES ESTIMATED
MAYOR AND COUNCIL
Other services and charges $ 6,669.00 $ 4,000.00 $ 2,669.00
FINANCIAL ADMINISTRATION
Capital outlay 1,000.00 336.25 663.75
PLANNING DEPARTMENT (Note 11)
Personal services 3,431.00 6,547.53 ( 3 , 116 . 53 )
PUBLIC SAFETY
Capita 1 outl ay 3,325.00 3,124.50 200.50
TOTALS $ 14,425.00 -$ 14,008.28 $ 416.72
See accompanying notes to financial statements.
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ENTERPRISE FUNDS
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CITY OF EDGEWATER, FLORIDA
ENTERPRISE FUNDS
COMBINED BALANCE SHEET
SEPTEMBER 30, 1978
ASS E T S
WATER REFUSE
TOTAL AND SEWER COLLECTION
ALL FUNDS FUND FUND
Cash $ 83,422.00 $ 41,946.37 $ 41,475.63
Investments 130,000.00 125,000.00 5,000.00
Accounts receivable 27,020.79 27,020.79
Due from General Fund 5,568.89 5,568.89
Inventory 16,622.08 16,622.08
Sinking and Reserve Fund cash and
investments (Notes 5 & 6) 188,056.98 188,056.98
Construction Fund cash and
investments 99,175.18 99,175.18
Capital Improvement Fund cash 5,192.32 5,192.32
Renewal and Replacement Fund
cash and investments 53,904.53 53,904.53
Fixed assets:
Land 27,892.29 27,892.29
Water plant and distribution system 786,245.42 786,245.42
Sewer plant and collection system 2,239,185.08 2,239,185.08
Equipment 112 , 280 . 90 112 , 280 . 90
1 ess: accumulated depreciation ( 577 ,723.09) ( 577 ,723.09)
Construction in progress (Note 9) 314,045.99 314,045.99
TOTAL ASSETS
$ 3,510,889.36 $ 3,464,413.73 $
46,475.63
See accompanying notes to financial statements.
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LIABILITIES, CONTRIBUTIONS AND RETAINED EARNINGS
WATER REFUSE
TOTAL AND SEWER COLLECTION
ALL FUNDS FUND FUND
LIABILITIES
Accounts payable $ 23,368.06 $ 23,368.06 $
Accrued liabilities 2,160.75 2,160.75
Accrued interest payable 11,691. 46 11 ,691.46
Contracts payable 154,015.66 154,015.66
Due to Federal Revenue Sharing
Fund 19,849.64 19,849.64
Revenue bonds payable (Notes 5 & 6) 2,011,000.00 2,011,000.00
Customers' meter deposits 45,632.39 45,632.39
Refundable line extension deposits 12,282.35 12,282.35
Other deposits 6,000.00 6,000.00
TOTAL LIABILITIES $ 2,286,000.31 $ 2,280,000.31 $ 6,000.00
CONTRIBUTIONS
Contributions from federal
government - net 407,140.39 407,140.39
Contributions from county
government - net 3,000.00 3,000.00
Contributions from General
Fund (Note 3) 16,029.12 16,029.12
Contributions from individuals - net 282,899,40 282,899.40
RETAINED EARNINGS
Reserved for revenue bond
retirement (Note 5) 132,739.32 132,739.32
Reserved for renewal and
replacements 50,000.00 50,000.00
Reserved for capital improvements 37,175.62 37,175.62
Unreserved 295,905.20 271,458.69 24,446.51
TOTAL LIABILITIES, CONTRIBUTIONS AND
RETAINED EARNINGS $ 3,510,889.36 $ 3,464,413.73 $
46,475.63
16.
CITY OF EDGEWATER, FLORIDA
WATER AND SEWER FUND
BALANCE SHEET
SEPTEMBER 30, 1978
ASS E T S
$ 216,158.13
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CURRENT ASSETS
Cash
Investments
Accounts receivable
Due from General Fund
Inventory
TOTAL CURRENT ASSETS
RESTRICTED ASSETS (Note 6)
Sinking and Reserve Fund cash
and investments (Note 5)
Construction Fund cash and investments
Capital Improvement Fund cash
Renewal and Replacement Fund cash
and investments
TOTAL RESTRICTED ASSETS
UTILITY PLANT IN SERVICE
Land
Water plant and distribution system
Sewer plant and collection system
Equipment
less: accumulated depreciation
Construction in progress
$ 41,946.37
125,000.00
27,020.79
5,568.89
16,622.08
$ 188,056.98
99,175.18
5,192.32
53,904.53
$ 27,892.29
786,245.42
2,239,185.08
112 ,280 . 90
$ 3,165,603.69
(577 ,723.09)
$ 2,587,880.60
314,045.99
346,329.01
2,901,926.59
TOTAL ASSETS
$ 3,464,413.73
See accompanying notes to financial statements.
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LIABILITIES, CONTRIBUTIONS AND RETAINED EARNINGS
CURRENT LIABILITIES (PAYABLE FROM CURRENT ASSETS)
Accounts payable
Accrued liabilities
Due to Federal Revenue Sharing Fund
TOTAL CURRENT LIABILITIES
(PAYABLE FROM CURRENT ASSETS)
CURRENT LIABILITIES (PAYABLE FROM RESTRICTED ASSETS)
Accounts payable
Current maturity of revenue bonds payable
Accrued interest payable
Contracts payable
TOTAL CURRENT LIABILITIES
(PAYABLE FROM RESTRICTED ASSETS)
LONG-TERM LIABILITIES
Revenue bonds payable (Notes 5 & 6)
less: current maturities
OTHER LIABILITIES
Customers I meter deposits
Water line extension deposits
Sewer line extension deposits
CONTRIBUTIONS
Contributions from federal government
less: accumulated depreciation of federal
government contributions
Contributions from county government
less: accumulated depreciation of county
government contributions
Contributions from individuals
less: accumulated depreciation of
individuals' contributions
TOTAL CONTRIBUTIONS
RETAINED EARNINGS
Reserved for revenue bond
retirement (Note 5)
Reserved for renewal and replacements
Reserved for capital improvements
Unreserved
$ 8,887.05
2,160.75
19,849.64
$ 30,897.44
$ 14,481.01
49,000.00
11,691.46
154,015.66
229,188. 13
$ 2,011,000.00
49,000.00
1,962,000.00
$ 45,632.39
10,447.19
1,835.16 57,914.74
$ 459,010.83
51,870.44
$ 407,140.39
$ 3,000.00
- 0 -
$ 3,000.00
$ 299,306.25
16,406.85
$ 282,899.40
693,039.79
$ 132,739.32
50,000.00
37,175.62
271,458.69 491,373.63
TOTAL LIABILITIES, CONTRIBUTIONS AND
RETAINED EARNINGS
$ 3,464,413.73
17.
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CITY OF EDGEWATER, FLORIDA PAGE 1 OF 2
D WATER AND SEWER FUND
STATEMENT OF REVENUE AND EXPENSE
a FOR THE YEAR ENDED SEPTEMBER 30, 1978
~ OPERATING REVENUES
Water sales $ 153,262.70
~ Water service charges 2,450.00
Hydrant rentals 5,500.00
Sewer charges 119,875.45
Miscellaneous income 6,702.43
D TOTAL OPERATING REVENUES $ 287,790.58
II LESS: OPERATING REVENUE DEDUCTIONS
BEFORE DEPRECIATION
Operating expenses:
D Water Department $ 123,567.65
Sewer Department 109,216.77
TOTAL OPERATING DEDUCTIONS
~ BEFORE DEPRECIATON 232,784.42
NET OPERATING INCOME BEFORE
0 DEPRECIATION $ 55,006.16
LESS: DEPRECIATION
D On assets acquired with own funds $ 41,247.55
On assets acquired from contributions 14,864.25 56,111.80
NET OPERATING LOSS $ (1,105.64 )
~ ADD: NONOPERATING INCOME
Util ity taxes $ 114,406.49
Q Environmental Protection Agency Grant 3,964.00
Interest income 14,337.38
Other 300.00
~ TOTAL NONOPERATING INCOME 133,007.87
TOTAL INCOME $ 131,902.23
D LESS: NONOPERATING EXPENSES
Transfer to General Fund $ 18,400.00
~ Interest expense - revenue bonds 88,247.82
Loss on disposal of fixed assets 17,430.00 124,077.82
NET INCOME $ 7.824.41
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CITY OF EDGEWATER, FLORIDA
WATER AND SEWER FUND
STATEMENT OF REVENUE AND EXPENSE
FOR THE YEAR ENDED SEPTEMBER 30, 1978
PAGE 2 OF 2
DISPOSITION OF NET INCOME
Net income
Add credit arising from transfer of
depreciation to contributions
account
$ 7,824.41
14,864.25
NET INCOME TRANSFERRED TO
RETAINED EARNINGS
$ 22.688.66
See accompanying notes to financial statements.
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CITY OF EDGEWATER, FLORIDA
WATER AND SEWER FUND
STATEMENT OF CHANGES IN RETAINED EARNINGS
FOR THE YEAR ENDED SEPTEMBER 30, 1978
RETAINED EARNINGS AT BEGINNING OF YEAR, AS
PREVIOUSLY REPORTED $ 630,353.72
Less: Prior period adjustment to record
water and sewer connection and development
charges as contributions (Note 8) 161,668.75
RETAINED EARNINGS AT BEGINNING OF YEAR, AS RESTATED $ 468,684.97
Add: Net income 22,688.66
RETAINED EARNINGS AT END OF YEAR -$ 491.373.63
See accompanying notes to financial statements.
20.
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CITY OF EDGEWATER, FLORIDA
~ WATER AND SEWER FUND
STATEMENT OF CHANGES IN FINANCIAL POSITION
~ FOR THE YEAR ENDED SEPTEMBER 30, 1978
~ SOURCE OF UNRESTRICTED WORKING CAPITAL
From operations:
a Net income $ 7,824.41
Add: Expenses not creating current
liabilities or using current assets -
depreciation 56,111.80
Q $ 63,936.21
Decrease in restricted assets 65,224.15
Increase in customer meter deposits 8,578.72
~ Increase in contributions 256,302.65
Disposal of property and equipment net
of accumulated depreciation 17,430.00
~ Increase in current liabilities payable
from restricted assets 145,028.88 $ 556,500.61
APPLICATION OF UNRESTRICTED WORKING CAPITAL
0 Additions to utility plant in service $ 498,645.74
Redemption of revenue bonds 46,000.00
Decrease in water line extension deposits 788.75
I Decrease in sewer line extension deposits 226.48 545,660.97
INCREASE IN UNRESTRICTED
a WORKING CAPITAL $ 10.839.64
~ CHANGES IN UNRESTRICTED WORKING
CAPITAL COMPONENTS
D Increase (decrease) in current assets:
Cash $ (58,065.45)
Investments 40,000.00
Accounts receivable 16,576.23
I Due from other funds 5,568.89
Inventory 10,320.94 $ 14,400.61
~ Increase (decrease) in current liabilities:
Accounts payable $ 7,846.02
Due to other funds (5,420.29)
D Accrued liabilities 1,135.24 3,560.97
INCREASE IN UNRESTRICTED
WORKING CAPITAL 5 10.839.64
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~ See accompanying notes to financial statements.
0 21.
CITY OF EDGEWATERs FLORIDA
WATER AND SEWER FUND
SCHEDULE OF FIXED ASSETS AND DEPRECIATION
FOR THE YEAR ENDED SEPTEMBER 30s 1978
ASS E T S
BALANCES
10/1/77
ADDITIONS DEDUCTIONS
Land $ 27s892.29 $ - 0 - $ - 0 -
Water plant and distribution system 707 s 171. 73 106s073.69 27,000.00
Sewer plant and collection system ls592s277.63 646s907.45 - 0 -
Equipment 71 s 575 . 88 45 s021. 38 4,316.36
GRAND TOTALS $ 2.398.917.53 j 798.002.52 j 31.316.36
See accompanying notes to financial statements.
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A C CUM U L ATE D D E PRE C I A T ION
NET
BALANCES BALANCES DEPRECIATION BALANCES ASSET VALUE
9/30/78 10/1/77 TAKEN DEDUCTIONS 9/30/78 9/30/78
$ 27,892.29 $ - 0 - $ - 0 - $ - 0 - $ - 0 - $ 27,892.29
786,24,5.42 186,133.16 13,644.58 9,720.00 190,057.74 596,187.68
2,239,185.08 319,781.36 32,072.89 - 0 - 351,854.25 1,887,330.83
112,280.90 29,583.13 10,394.33 4,166.36 35,811.10 76,469.80
$ 3.165.603.69 $ 535.497.65 $ 56.111.80 $ 13.886.36 $ 577.723.09 $ 2.587.880.60
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CITY OF EDGEWATER, FLORIDA
WATER AND SEWER SYSTEM REVENUE FUND
STATEMENT OF REVENUE - ESTIMATED AND ACTUAL
FOR THE YEAR ENDED SEPTEMBER 30, 1978
ACTUAL
ESTIMATED ACTUAL OVER (UNDER)
REVENUE REVENUE ESTIMATED
WATER DEPARTMENT
Water sales $ 142,350.00 $ 153,262.70 $ 10,912.70
Connection charges 22,500.00 46,925.00 24,425.00
Service charges - 0 - 2,450.00 2,450.00
Hydrant rentals 6,300.00 5,500.00 (800.00)
Mi sce 11 aneous 460.00 6,126.80 5,666.80
$ 171,610.00 $ 214,264.50 $ 42,654.50
SEWER DEPARTMENT
Sewer service charges $ 112,788.00 $ 119,875.45 $ 7,087.45
Connection charges 3,000.00 4,950.00 1,950.00
Mi sce 11 aneous - 0 - 575.63 575.63
$ 115,788.00 $ 125,401.08 $ 9,613.08
NONOPERATING REVENUE
Utility taxes $ 97,000.00 $ 114,406.49 $ 17,406.49
Interest on investments 10,000.00 5,378.77 (4,621.23)
201 Plan reimbursement - 0 - 3,964.00 3,964.00
Nonrefundable line extension - 0 - 300.00 300.00
$ 107,000.00 $ 124,049.26 $ 17,049.26
TOTAL REVENUE $ 394,398.00 $ 463,714.84 $ 69,316.84
APPROPRIATED RETAINED EARNINGS 145,000.00 - 0 - (145,000.00 )
TOTALS $ 539.398.00 -$ 463.714.84 -$ (75 .683 .16)
See accompanying notes to financial statements.
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CITY OF EDGEWATER, FLORIDA
WATER AND SEWER SYSTEM REVENUE FUND
See accompanying notes to financial statements.
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CITY OF EDGEWATER, FLORIDA
WATER AND SEWER SYSTEM OPERATING FUND
STATEMENT OF REVENUE AND TRANSFERS - ESTIMATED AND ACTUAL
See accompanying notes to financial statements.
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CITY OF EDGEWATER, FLORIDA
i WATER AND SEWER SYSTEM OPERATING FUND
~ STATEMENT OF ACTUAL AND ESTIMATED EXPENDITURES
FOR THE YEAR ENDED SEPTEMBER 30, 1978
ACTUAL
~ ACTUAL (OVER) UNDER
APPROPRIATIONS EXPENDITURES ESTIMATED
I OPERATING EXPENDITURES (Note 11)
Water Department:
Salaries $ 60,619.30 $ 59,917.30 $ 702.00
~ Payro 11 taxes 3,668.00 3,709.34 (41.34)
Electrical power 11 ,000.00 11,271. 08 (271.08)
Water 285.00 267.00 18.00
Chemicals 5,700.00 5,157.65 542.35
D Supplies and small tools 2,800.00 3,614.84 (814.84)
Vehicle expense 3,271.60 2,625.22 646.38
Repairs and replacements 4,900.00 4,820.08 79.92
~ Telephone 1,010.00 970.54 39.46
Printing and postage 3,720.00 3,642.27 77 .73
Professional services 7,600.00 9,025.88 (1,425.88)
Insurance 5,575.00 5,574.43 .57
a Tank maintenance 5,742.00 5,742.00 - 0 -
Equipment rental 500.00 383.87 116.13
Office space rental 900.00 900.00 - 0 -
~ Miscellaneous and employee
insurance 6,836.81 5,946.15 890.66
~ TOTAL $ 124,127.71 $ 123,567.65 $ 560.06
Sewer Department:
Salaries $ 41,249.30 $ 39,489.26 $ 1,760.04
~ Payroll taxes 2,450.00 2,660.66 (210.66)
Electrical power 28,000.00 29,251. 43 (1,251.43)
Water 600.00 533.25 66.75
~ Chemicals 6,200.00 6,117.79 82.21
Supplies and small tools 2,550.00 2,703.60 (153.60)
Vehicle expense 1,620.00 1,441.36 178.64
~ Repairs and replacements 4,400.00 5,123.32 (723.32 )
Telephone 850.00 665.47 184.53
Printing and office supplies 2,817.29 2,700.71 116.58
Professional services 12,500.00 7,741.40 4,758.60
D Insurance 8,000.00 3,500.66 4,499.34
Equipment rental 1,600.00 1,547.03 52.97
Office space rental 900.00 900.00 - 0 -
~ Miscellaneous and employee
insurance 7,177 . 70 4,840.83 2,336.87
TOTAL $ 120,914.29 $ 109,216.77 $ 11,697.52
D TOTAL OPERATING
EXPENDITURES $ 245.042.00 $ 232.784.42 $ 12.257.58
~
See accompanying notes to financial statements.
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CITY OF EDGEWATER, FLORIDA
REFUSE COLLECTION FUND
BALANCE SHEET
SEPTEMBER 30, 1978
ASSETS
CURRENT ASSETS
Cash
Investments
TOTAL ASSETS
$
41,475.63
5,000.00
LIABILITIES, CONTRIBUTIONS AND RETAINED EARNINGS
CURRENT LIABILITIES
OTHER LIABILITIES
Deposits
CONTR IB UTI ONS
Contributions from General Fund (Note 3)
RETAINED EARNINGS
TOTAL LIABILITIES, CONTRIBUTIONS
AND RETAINED EARNINGS
See accompanying notes to financial statements.
$
46.475.63
$ - 0 -
6,000.00
16,029.12
24,446.51
$ 46.475.63
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CITY OF EDGEWATER, FLORIDA
REFUSE COLLECTION FUND
STATEMENT OF REVENUE AND EXPENSE
FOR THE YEAR ENDED SEPTEMBER 30, 1978
OPERATING REVENUES
Refuse collection fees $ 101,853.85
LESS: OPERATING EXPENSES
Contractual services (Note 3) $ 77,396.27
Mi sce 11 aneous 11. 07 77,407.34
NET INCOME -$ 24.446.51
See accompanying notes to financial statements.
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CITY OF EDGEWATER, FLORIDA
REFUSE COLLECTION FUND
STATEMENT OF CHANGES IN RETAINED EARNINGS
FOR THE YEAR ENDED SEPTEMBER 30, 1978
RETAINED EARNINGS - October 1, 1977 (Note 3)
ADD
Net income
$
- 0 -
$
24,446.51
24,446.51
- 0 -
24.446.51
DEDUCT
RETAINED EARNINGS - September 30, 1978
$
See accompanying notes to financial statements.
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CITY OF EDGEWATER, FLORIDA
REFUSE COLLECTION FUND
STATEMENT OF CHANGES IN FINANCIAL POSITION
FOR THE YEAR ENDED SEPTEMBER 30, 1978
SOURCE OF WORKING CAPITAL
From operations:
Net income
Increase in deposits
Contributions (Note 3)
$ 24,446.51
6,000.00
16,029.12 $ 46,475.63
- 0 -
~$ 46.475.63
APPLICATION OF WORKING CAPITAL
INCREASE IN WORKING CAPITAL
CHANGES INWORKING CAPITAL COMPONENTS
Increase (decrease) in current assets:
Cash
Investments
$
41,475.63
5,000.00
$
46,475.63
- 0 -
46.475.63
Increase (decrease) in current liabilities
INCREASE IN WORKING CAPITAL
-$
See accompanying notes to financial statements.
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CITY OF EDGEWATER, FLORIDA
REFUSE COLLECTION FUND
STATEMENT OF REVENUE - ESTIMATED AND ACTUAL
FOR THE YEAR ENDED SEPTEMBER 30, 1978
ACTUAL
ESTIMATED ACTUAL OVER (UNDER)
REVENUE REVENUE ESTIMATED
Refuse collection fees $ 97,000.00 $ 101,853.85 $ 4,853.85
TOTALS $ 97.000.00 -$ 101.853.85 -$ 4.853.85
STATEMENT OF ACTUAL AND ESTIMATED EXPENDITURES
FOR THE YEAR ENDED SEPTEMBER 30, 1978
ACTUAL
APPROPRIATIONS ACTUAL (OVER) UNDER
(REVISED) EXPENDITURES ESTIMATED
Personal services $ 80 , 001 . 00 $ - 0 - $ 80,001. 00
Supplies and materials 527.00 - 0 - 527.00
Other services and charges (Note 11) 506.00 77,407.34 (76,901.34)
Capital outlay 2.00 - 0 - 2.00
TOTAL EXPENDITURES $ 81,036.00 $ 77,407.34 $ 3,628.66
Unappropriated budgeted surplus 15,964.00 - 0 - 15,964.00
TOTALS $ 97.000.00 $ 77.407.34 $ 19.592.66
See accompanying notes to financial statements.
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CITY OF EDGEWATER, FLORIDA
GENERAL FIXED ASSETS GROUP OF ACCOUNTS
STATEMENT OF GENERAL FIXED ASSETS
FOR THE YEAR ENDED SEPTEMBER 30, 1978
GENERAL FIXED ASSETS
Land
Buil di ngs
Improvements other than buildings
Equipment
$ 52,155.95
264,093.31
780,906.32
382,818.31
TOTAL GENERAL FIXED ASSETS
INVESTMENT IN GENERAL FIXED ASSETS FROM
General Fund revenues
Contributions from federal government
Contributions from state government
Contributions from county government
Contributions from individuals
$ 1,217,874.00
153,008.50
13,619.28
8,247.50
87,224.61
TOTAL INVESTMENT IN GENERAL
FIXED ASSETS
See accompanying notes to financial statements.
_$ 1.479.973.89
j 1.479.973.89
32.
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NOTES TO FINANCIAL STATEMENTS
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CITY OF EDGEWATER, FLORIDA
NOTES TO FINANCIAL STATEMENTS
SEPTEMBER 30, 1978
1. SIGNIFICANT ACCOUNTING POLICIES
The accounting policies of the City of Edgewater, Florida conform to generally
accepted accounting principles as applicable to governmental units. The
following is a summary of the significant policies.
Bases of Accounting:
The accrual basis of accounting is followed by all funds other than budgetary
funds (General and Special Revenue Funds), which use the modified accrual
basis of accounting. Under the modified accrual basis of accounting, expendi-
tures are recorded at the time liabilities are incurred and revenues are
recorded when received in cash, except for material and/or available revenues
which should be accrued to reflect revenues earned.
Investments:
Investments are stated at cost. The investments include Certificates of
Deposits maturing within 1 to 123 days.
Inventories:
Inventories of the General Fund and the Water and Sewer Fund are stated at
cost on the basis of the "first-in, first-out" method of accounting. The
effect of this method is to flow costs through the statement of revenue and
expense in the order in which they are purchased and to assign a balance sheet
valuation more nearly at current replacement values.
Delinquent Taxes:
Property taxes are collected by the Vol usia County Tax Collector and remitted
to the City pursuant to Florida State Statutes, Chapter 192. At year-end,
uncollected taxes are recorded as taxes receivable in the General Fund and
offset by a reserve for uncollected taxes.
General Fixed Assets:
General fixed assets purchased are recorded as expenditures in the General
Fund and Special Revenue Funds at time of purchase. Such assets are capitalized
at cost in the General Fixed Assets Group of Accounts. No depreciation has
been provided for these general fixed assets.
Utility Plant in Service:
The fixed assets of the Water and Sewer Fund are recorded at cost when purchased.
Depreciation is provided using the straight-line method.
Contributions:
The contributions accounted for in the Water and Sewer Fund represent outside
contributions from other funds, governmental agencies or individuals. Deprecia-
tion expense on contributed fixed assets is transferred to a related contra-
contribution account instead of retained earnings.
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CITY OF EDGEWATER, FLORIDA
NOTES TO FINANCIAL STATEMENTS
SEPTEMBER 30, 1978
Combined Financial Statements:
The Water and Sewer Fund statements represent the combination of the Water and
Sewer System Revenue Fund, Operating and Maintenance Fund, Sinking Funds,
Construction Funds and Reserve Funds. Interfund transactions have been
eliminated in the combination for all the financial statements of the Water
and Sewer Fund.
Water and Sewer Fund Accounts Receivable:
Water and sewer customer accounts receivable also include refuse customer
accounts receivable. The Water and Sewer Fund purchases the Refuse Collection
Fund receivables when billed.
2. The General Fund reserved fund balance represents an amount to be used for
future police training expenses as provided by Florida Statutes.
3. At October 1, 1977, the City established the refuse collection function as an
Enterprise Fund. In prior years, the refuse collection operation was accounted
for in the General Fund. As a result of the change in reporting entity, from
a General Fund activity to an Enterprise Fund activity, $101,853.85 in revenues
and $77,407.34 in expenditures have been currently removed from the General
Fund and reported in the Refuse Collection Fund.
Refuse collection services are contracted to Tomoka Refuse, Inc. for a five-
year period. The fund was established with a $16,029.12 contribution from the
General Fund.
4. The City established the general employee retirement plan and the police
employee retirement plan on February 1, 1978. The retirement plans cover all
present and future full-time employees who have completed three months of
continuous service and attained the age of twenty-one, but not attained an age
within five years of retirement.
The form of the plans are life annuities, certain and life annuities or sur-
vivorship annuities, depending on the option selected by the employees. The
group annuity contracts are purchased from the Bankers Life Insurance Company.
The plans are noncontributory. Annual funding for these plans are based on
actuarial valuation reports for the plan year ending September 30.
A summary of the results of the valuations of the two plans follows:
1. Employer normal cost
Employer normal cost as a percentage
of compensation
GENERAL
EMPLOYEE
RETIREMENT
PLAN
$ 11,378
POLICE
EMPLOYEE
RETIREMENT
PLAN
$ 6,365
9%
8.4%
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NOTES TO FINANCIAL STATEMENTS
SEPTEMBER 30, 1978
GENERAL POLICE
EMPLOYEE EMPLOYEE
RETIREMENT RETIREMENT
PLAN PLAN
2. Minimum employer deposit to avoid
funding deficiency $ 15,588 $ 9,072
3. Normal cost, plus amount to fund
the unfunded frozen initial
liability over 30 years $ 15,217 $ 9,112
4. Payments made to Bankers Life
for the plan year ending
September 30, 1978 $ 15,988 $ 9,390
5. Frozen initial liability $ 80,531 $ 57,629
The actuarial cost method used for valuation of annual fundings for both plans
is known as the entry age normal - frozen initial liability method. This
method spreads the total cost of the projected pension benefits for each
employee from the date he is first eligible for the plan to his normal retire-
ment age. If benefits are related to compensation, the cost is spread as a
level percentage of compensation. If benefits are not related to compensation,
the cost is spread as a level dollar amount each year. The total of annual
amounts for all employees combined is called the Normal Cost. Normal costs
are funded by the employer in accordance with plan provisions.
The date the employee is first eligible for the plan is determined as if the
plan had always been in existence. Thus, as of the plan effective date, there
are some accumulated Normal Costs for past years that have not been paid. The
value of these past Normal Costs is called the Frozen Initial Liability.
At September 30, 1978, the actuarially computed value of vested benefits is
zero for both retirement plans. No vested benefits exist until a participant
has been on the plan for 10 years. After 10 years of service, the participant
is fully vested.
Actuarial gains and losses are not separately calculated, but are implicitly
spread into current and future normal costs.
Payments made to the Bankers Life Insurance Company are part of the general
funds of the Bankers Life, over 91% of which are invested in fixed income
securities. The general fund appreciation and depreciation are recognized in
the interest and dividend credited to the group retirement contracts annually.
5. BOND ORDINANCE VIOLATIONS
A. Bond Ordinance No. 400 and Resolution No. 627 includes restrictions and
requirements regarding monthly sinking fund and reserve transfers and
investment of bond related funds. Monthly sinking fund and reserve
transfers are currently made at the end of each month, while the bond
ordinance and resolution requires such transfers to be made on or before
the 15th of each month.
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NOTES TO FINANCIAL STATEMENTS
SEPTEMBER 30, 1978
B. During the year, the City invested excess Revenue Fund cash in Certificates
of Deposit. Resolution No. 627 prohibits investments of Revenue Fund
cash.
C. At September 30, 1978, the 1977 Water and Sewer Revenue Bond Interest and
Sinking Fund was deficient by $3,378.12. Excess funds were available in
the Water and Sewer Fund to adequately fund the Sinking Fund reserve.
6. The revenue bond ordinances provide for 1964 Series "A" and "B."
A. Establishment and maintenance of various funds:
1. The Revenue Fund records all the operating revenues of the
system and proceeds of the utility tax;
2. The Operation and Maintenance Fund receives transfers from
the Revenue Fund and records the operating and maintenance
expenses of the system;
3. The Bond and Interest Sinking Fund records the debt service
requirements of the system;
4. The Renewal and Replacement Fund records the cost of unusual
and extraordinary maintenance, repairs, renewals and
replacements and the costs of constructing additions,
extensions and improvements to the system; and,
5. The Construction Fund records the cost of major additions
to the water and sewer system.
B. Restrictions on the use of cash from operations:
1. Deposits are made to the Revenue Fund to meet current
operations according to the existing bond ordinance;
2. Deposits to the Sinking Fund are required on or before the
15th day of each month equal to 1/6 or 1/12 of the next
interest payment due, plus 1/12 of the next principal pay-
ment due; and,
3. Deposits to the Sinking Fund reserve account are to be made
monthly on or before the 15th of each month until it equals
$141,500.
C. Early redemption:
1964 Series "A" & "B" Bonds maturing on or after February 1, 1970
are redeemable in whole or in part at par, plus accrued interest
and premiums which range from 3% to -0-%.
1977 Water and Sewer Bonds maturing on or after September 1,
1986 are redeemable in whole or in part at par, plus accrued
interest and premiums which range from 5% to -0-%.
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NOTES TO FINANCIAL STATEMENTS
SEPTEMBER 30, 1978
D. Investment restrictions:
1. All monies deposited shall be continuously secured in the
same manner as municipal deposits are required by the Laws
of the State of Florida; and,
2. Monies on deposit with the Revenue Fund and the Operation
and Maintenance Fund shall not be invested at any time.
E. The revenue bonds consist of the following serial bonds -
DESCRIPTION
Water and Sewer
1964 "A"
1964 "B"
1977
INTEREST
RATES AND DATES
ANNUAL
SERIAL
PAYMENTS
(In Thousands)
FI NAL
MATURITY
4.75 (2/1 ;8/1)
3.875 (2/1;8/1)
5.0 (9/1)
2/1/99
2/1/99
9/1/2015
$16-$24
$26-$86
$7 - $39
AMOUNT
OUTSTANDING AT
SEPTEMBER 30, 1978
(In Thousands)
DESCRIPTION
Water and Sewer
1964 "A"
1964 "B"
1977
ORIGINAL AMOUNT
(In Thousands)
$ 369
$ 1,323
$ 700
$ 203
$ 1,114
$ 694
7. DEVELOPMENT FEE RESTRICTION
In accordance with the requirements of Ordinance No. 904, the Water and Sewer
Development Fee Capital Improvement Funds were established. All development
fees paid to the City shall be deposited in the appropriate fund and are to be
used solely for the expansion of the City's primary water and sewer system.
Such fees are accounted for as contributions from individuals when received in
the Water and Sewer Fund.
8. CONNECTION CHARGES
Connection charges from customers represent payments to the City for water and
sewer connection costs. The connections remain City property and the connection
charges are now recorded as contributions from individuals when the fixed
asset is recorded. In prior years, connection charges were reported as revenues
which were closed to retained earnings while connection costs were capitalized
in the Water and Sewer Fund and depreciated over their estimated useful lives.
This resulted in an overstatement of retained earnings of $112,618.75. During
the current year, this accounting error was corrected by a prior period adjust-
ment to increase contributions from individuals by $125,534.51 along with
recording prior year depreciation on contributed assets of $12,915.76.
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NOTES TO FINANCIAL STATEMENTS
SEPTEMBER 30, 1978
In addition, water and sewer development fees, accounted for in the applicable
water development and sewer development funds, also represent contributions
from individuals which have not been reflected in the applicable contribution
accounts in the past. As a result, a prior period adjustment was made to
increase contributions from individuals by $49,050.00. There has been no
prior year depreciation on these contributions.
Summary of prior period adjustment to record water and sewer connection and
development charges as c9ntributions:
Prior years' water and sewer connection
charges net of accumulated depreciation $ 112,618.75
Prior yearsl water and sewer development
charges 49,050.00
DECREASE IN RETAINED EARNINGS AS A RESULT
OF RECORDING PRIOR YEARS I WATER AND SEWER
CONNECTION AND DEVELOPMENT CHARGES AS
CONTRIBUTIONS FROM INDIVIDUALS $ 161.668.75
9. CONSTRUCTION IN PROGRESS
Construction in progress in the Water and Sewer Fund represents water system
improvements, which are being financed with an Economic Development Act Grant,
water development fees and a proposed water and sewer revenue bond issue. The
original amount of the grant was for $144,000.00. During the year, the City
received $71,835.86 on its letter of credit, leaving an unrequisitioned balance
of $72,164.14 at September 30, 1978. This construction should be completed
during fiscal year 1978/79.
10. CONTINGENCIES AND COMMITMENTS
Vacation and Sick Leave:
It is the City's policy to grant employees vacation leave, based upon the
number of years of employement with the City. Vacation leave can be used as
time off and/or accrued. An employee must use at least 50 percent of his
vacation each year. The employee shall also receive a cash benefit equal to
the number of days accrued for his termination from the City, based on the
employee's current wage rate. Sick leave is accumulated at the rate of 1 day
per month per employee and can be accrued up to a maximum of 30 days. Employees
will receive 1 day's pay per month for sick leave accrued over and above the
30 day maximum. Accrued estimated liabilities, not recorded in the accounts
of the City or presented in the financial statements, for vacation and sick
leave benefits to which the employees are entitled are as follows:
Vacation leave
Sick leave
$ . 7,598.88
23,396.21
$ 30.995.09
TOTAL
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CITY OF EDGEWATER, FLORIDA
NOTES TO FINANCIAL STATEMENTS
SEPTEMBER 30, 1978
Last year, the City passed Resolution No. 728, dated July 25, 1977, authorizing
for acquisition, construction and erection of extensions and improvements to
the water and sewer system. The City has a commitment from the United States
Department of Agriculture, Farmers Home Administration, to purchase $300,000.00
in Water and Sewer Revenue Bonds upon completion of the project.
During the year, the City passed Resolution No. 769 authorizing the issuance
by the City of $300,000.00 in Water and Sewer Revenue Bonds. These bonds have
been validated and will be sold to the Farmers Home Administration when the
project is substantially complete.
11. Article VIII, Section 88 of the City Charter, states that no money shall be
drawn from the depository of the City, nor shall any obligation for the expendi-
ture of money be incurred, except pursuant to the appropriations made and
amended by City Council. During the year ended September 30, 1978, various
appropriation accounts were overspent.
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SUPPLEMENTAL INFORMATION
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CITY OF EDGEWATER, FLORIDA
WATER AND SEWER SYSTEM REFUNDING AND IMPROVEMENT REVENUE BONDS I
SUMMARY OF DEBT SERVICE REQUIREMENTS
SEPTEMBER 30, 1978 I
1964 1964
YEAR OF SERIES "A" SERIES "B"
MATURITY PRINCIPAL INTEREST PRINCIPAL INTEREST I
1979 $ 16,000.00 $ 9,262.50 $ 26,000.00 $
42,663.88
1980 17,000.00 8,478.75 27,000.00 41,637.01 I
1981 18,000.00 7,647.50 28,000.00 40,571. 39
1982 19,000.00 6,768.75 29,000.00 39,467.02
1983 20,000.00 5,842.50 30,000.00 38,323.90
1984 21,000.00 4,868.75 31,000.00 37,142.03 iI
1985 22,000.00 3,847.50 32,000.00 35,921.41
1986 23,000.00 2,778.75 33,000.00 34,662.04
1987 23,000.00 1,686.25 36,000.00 33,325.18 I
1988 24,000.00 570.00 37,000.00 31,910.81
1989 60,000.00 30,031. 55
1990 62,000.00 27,667.81 I
1991 65,000.00 25,207.20
1992 67,000.00 22,649.71
1993 70,000.00 19,995.35
1994 73,000.00 17,224.74 I
1995 76,000.00 14,337.88
1996 79,000.00 11 ,334.77
1997 82,000.00 8,215.41 I
1998 86,000.00 4,960 .43
1999 85,000.00 1,647.30
2000 I
2001
2002
2003
2004 I
2005
2006
2007 I
2008
2009
2010
2011 I
2012
2013
2014 I
2015
TOTALS $ 203.000.00 $ 51. 751. 25 _$ 1, 114 .000 . 00 -$ 558.896.82
INTEREST FINAL I
REVENUE BONDS RATES AND DATES ISSUE DATE MATURITY DATE
1964 Series "A" 4.75 (2/1; 8/1) 2/1/64 2/1/99 I
1964 Series "B" 3.875 (2/1 ;8/1) 2/1/64 2/1/99
1977 Water and Sewer
Revenue Bonds 5.0 (9/1 ) 8/27/77 9/1/2015 I
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WATER AND SEWER REVENUE BONDS INTEREST AND CERTIFICATES
PRINCIPAL INTEREST PRINCIPAL DUE
~ $ 2,011,000.00
$ 7,000.00 $ 34,700.00 $ 135,626.38 1,962,000.00
i 7,000.00 34,350.00 135,465.76 1,911,000.00
7,000.00 34,000.00 135,218.89 1,858,000.00
8,000.00 33,650.00 135,885.77 1,802,000.00
8,000.00 33,250.00 13 5 ,416 . 40 1,744,000.00
~ 9,000.00 32,850.00 135,860.78 1,683,000.00
9,000.00 32,400.00 135,168.91 1,620,000.00
10,000.00 31,950.00 135,390.79 1,554,000.00
~ 10,000.00 31,450.00 135,461.43 1,485,000.00
11 ,000 . 00 30,950.00 135,430.81 1,413,000.00
11 ,000.00 30,400.00 131,431. 55 1,342,000.00
~ 12,000.00 29,850.00 131,517.81 1,268,000.00
12,000.00 29,250.00 131,457.20 1,191,000.00
13,000.00 28,650.00 131,299.71 1 ,111 ,000 . 00
14,000.00 28,000.00 131,995.35 1,027,000.00
~ 14,000.00 27,300.00 131,524.74 940,000.00
15,000.00 26,600.00 131,937.88 849,000.00
16,000.00 25,850.00 132,184.77 754,000.00
~ 17,000.00 25,050.00 132,265.41 655,000.00
17,000.00 24,200.00 132,160.43 552,000.00
18,000.00 23,350.00 127,997.30 449,000.00
~ 19,000.00 22,450.00 41,450.00 430,000.00
20,000.00 21,500.00 41,500.00 410,000.00
21,000.00 20,500.00 41,500.00 389,000.00
22,000.00 19,450.00 41,450.00 367,000.00
~ 23,000.00 18,350.00 41,350.00 344,000.00
25,000.00 17,200.00 42,200.00 319,000.00
25,000.00 15,950.00 40,950.00 294,000.00
~ 27,000.00 14,700.00 41,700.00 267,000.00
28,000.00 13,350.00 41,350.00 239,000.00
29,000.00 11,950.00 40,950.00 210,000.00
31,000.00 10,500.00 41,500.00 179,000.00
~ 32,000.00 8,950.00 40,950.00 147,000.00
34,000.00 7,350.00 41,350.00 113,000.00
36,000.00 5,650.00 41,650.00 77 ,000.00
~ 38,000.00 3,850.00 41,850.00 39,000.00
39,000.00 1,950.00 40,950.00 - 0 -
-$ 694,000.00 j 841. 700.00 j 3.463.348.07
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AUTHORIZED ISSUED RETIRED
~ $ 369,000.00 $ 369,000.00 $ 166,000.00
1,323,000.00 1,323,000.00 209,000.00
D 700,000.00 700,000.00 6,000.00
$ 2.392,000.00 $ 2.392.000.00 $ 381. 000.00
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CITY OF EDGEWATER, FLORIDA
NUMBER OF CUSTOMERS SERVED BY THE WATER AND SEWER UTILITY SYSTEM
SEPTEMBER 30, 1978
Water customers
Sewer customers
TOTAL
2,010
1,506
3.516
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CITY OF EDGEWATER, FLORIDA
REPORT ON INTERNAL CONTROL
AND
MANAGEMENT COMMENTS
SEPTEMBER 30, 1978
.....
MAY. Z I M A & CO.
CERTIFIED PUBLIC ACCOUNTANTS
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CITY OF EDGEWATER, FLORIDA
REPORT ON INTERNAL CONTROL
AND
MANAGEMENT CO~~ENTS
SEPTEMBER 30, 1978
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CERTIFIED PUBLIC ACCOUNTANTS
To the Honorable Mayor, City Council
and City Cl erk
City of Edgewater, Florida
REPORT ON INTERNAL CONTROL AND MANAGEMENT COMMENTS
It is the policy of our firm, and in accordance with the rules of the State
Auditor General and the rules of the Department of Banking and Finance, to
submit our Report on Internal Control and Management Comments on the operations
of the City upon completion of our audit of your financial statements.
It should be noted that this report, by its nature, contains only our comments
and recommendations on deficiencies observed in the system of internal control.
It does not include our observations of the many strong features of the City's
system of internal control, also observed.
This report is subdivided into the following:
Report on Internal Control
Management Comments
The Report on Internal Control is required by generally accepted auditing
standards (SAS #20) to report what we believe to be material weaknesses in the
system of internal control. These contain items which require management's
immediate attention. The Management Comments section of this report contains
matters which we believe will be helpful and of interest to management.-
The chief executive officer's written statement of explanation or rebuttal
concerning our comments in both sections of this report, including corrective
action to be taken, must be filed with the governing body of the City and with
the State Auditor General within 20 days of the delivery of this report.
REPORT ON INTERNAL CONTROL
We have examined the financial statements of the City of Edgewater, Florida
for the year ended September 30, 1978, and have issued our report thereon
dated December 18, 1978. As part of our examination, we made a study and
evaluation of the City's system of internal accounting control to the extent
we considered necessary to evaluate the system as required by generally
accepted auditing standards. Under these standards, the purposes of such
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evaluation are to establish a basis for reliance on the system of internal
accounting control in determining the nature, timing and extent of other
auditing procedures that are necessary for expressing an opinion on the
financial statements, and to assist the auditor in planning and performing
his examination of the financial statements.
The objective of internal accounting control is to provide reasonable, but
not absolute, assurance as to the safeguarding of assets against loss from
unauthorized use or disposition, and the reliability of financial records
for preparing financial statements and maintaining accountability for assets.
The concept of reasonable assurance recognizes that the cost of a system of
internal accounting control should not exceed the benefits derived, and also
recognizes that the evaluation of these factors necessarily requires estimates
and judgments by management.
There are inherent limitations that should be recognized in considering the
potential effectiveness of any system of internal accounting control. In
the performance of most control procedures, errors can result from misunder-
standing of instructions, mistakes of judgment, carelessness or other personal
factors. Control procedures, whose effectiveness depends upon segregation
of duties, can be circumvented by collusion. Similarly, control procedures
can be circumvented intentionally by management either with respect to the
execution or judgments required in the preparation of financial statements.
Further, projection of any evaluation of internal accounting control to
future periods is subject to the risk that the procedures may become inadequate
because of changes in conditions, and that the degree of compliance with the
procedures may deteriorate.
Our examination of the financial statements made in accordance with generally
accepted auditing standards, including the study and evaluation of the
City's system of internal accounting control for the year ended, that was
made for the purposes set forth in the first paragraph of this report, would
not necessarily disclose all weaknesses in the system because it was based
on selective tests of accounting records and related data. However, such
study and evaluation disclosed the following conditions that we believe to
be material weaknesses:
1. PURCHASING
During our review of the City's purchase order system, we noted that
some purchases under the $2,000 bid limit were not properly completed.
Incomplete information consisted of improper or poor descriptions of
the items to be purchased, quantity and/or price information was
omitted, and mathematical errors were made. We also noted that occasion-
ally purchases were made without an authorization signature on the
purchase order.
Well established purchasing procedures insure that the City is buying what
is needed at the best rates and that purchases are authorized by responsible
individuals within the City's organization. We recommend that the City
prepare, as part of City.s accounting and procedural manual, a purchasing
manual which will formally establish purchase policies for purchases under
$2,000 or more as established by Ordinance No. 981. The purchasing
manual should include, but not be limited to, the following items:
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A. l~inimum dollar amounts after which a purchase order
must be used;
B. Budget certification before authorization of a
purchase order;
C. Personnel reponsible for drafting~ signing and
approving purchase orders;
D. Disposition of the various copies of purchase orders;
E. Information required on the purchase order;
F. Information required when the merchandise is
received~ i.e.~ date of receipt~ who received
the article~ condition of shipment;
G. Verification of vendor's invoice and comparison to
the purchase order; and~
H. Emergency purchasing procedures.
2.
CASH DISBURSEMENTS
During our review of cash disbursement transactions~ the following condi-
tions were noted:
A. Occasionally~ transactions were not supported by invoices or other
supporting documentation. All disbursements should be supported by
documentation to provide evidence to management that the payments are
valid and properly authorized. While we are aware that some disburse-
ments do not lend themselves to adequate supporting documentation~ we
recommend that~ in these cases, special authorization be included in the
vendor's file from the City Clerk or other authorized member of the
City staff. This authorization should include the following:
Date authorized;
Purpose of check;
Person or company check is payable to;
Account number to be charged; and~
Authorization signature.
B. Vendor invoices and related data were not properly cancelled after
payment. We recommend that all supporting documentation be cancelled
to prevent duplicate payments by indicating on the face of the docu-
ments that the commitment has been paid. This can be done with a
"PAID" stamp or manually. Additional information could be included,
such as date paid~ check number~ account number, or any other infor-
mation considered necessary by management to tie individual supporting
documentation of transactions to the accounting records.
3.
PAYROLL AND PERSONNEL
During our review of payroll and personnel transactions, the following
conditions were noted:
A. - Presently~ one employee is responsible for both payroll accounting
responsibilities and controlling and maintaining personnel files.
This does not provide adequate separation of duties for these two
important functions. We recommend that the responsibility for
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control and maintaining of employee personnel files be given to an
employee that has no responsibilities for payroll preparation,
accounting or distribution. This will improve the internal control
over the payroll-personnel functions and also provide a mechanism
which will provide independent cross-checks on the two functions.
B. Personnel records for all employees should be reviewed to determine
that the information contained within them is current. Our review
indicated that personnel files in some cases did not include
current W-41s and/or proper authorization of current pay rates.
In the case of terminated employees, no termination memos were
included in the files reviewed. Personnel records must be kept in
a current and complete status to prevent employee disputes and act
as source documentation and authorization for payroll transactions.
C. Payroll preparation procedures presently include a verification of
the accuracy and authorization of only a judgmental sample of time
records which support the gross pay computation. While only minor
errors were noted in the payroll computations reviewed, we recommend
that the mathematical accuracy and authorization of all time records
be checked in the normal course of the payroll preparation procedures.
Presently, this procedure would be difficult to implement because
the payroll clerk does not have time to check all the time records
and still meet the weekly payroll deadlines. When the City's payroll
becomes automated in the next fiscal year, it will be important that
the payroll clerk checks all time records before they are inputted
to the computer. Management should evaluate the feasibility of
changing the payroll pay period from weekly to biweekly to eliminate
the present time requirements for preparation and processing of
payroll. .
4.
UTILITY BILLING SYSTEM
During the year, the City converted from essentially a manual utility
billing system (billing machines) to a highly sophisticated on-line
real time utility billing system. A characteristic of the new utility
billing system is that all the information concerning utility customer
transactions is stored only on the storage devices of the new computer
system, hard copy of such information was routinely provided by the old
system, but not by the new system. The disappearance of accounting
information from the standpoint of being able to see it or hold it can
create internal control problems if procedures are not implemented to
insure that the information stored by the computer system is properly
safeguarded. During our review of the new utility billing system, the
following conditions were noted:
A. The utility billing system is presently dependent on two employees
who are responsible for the complete utility billing system. One
of these employees also has responsibility for the Water and Sewer
Revenue Fund journals and general ledgers~ Occasionally, water
and sewer billing clerks also handle utility payments and receive
meter deposit refund checks to mail to terminated customers.
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Separation of duties, in the utility billing function, is especially
important to provide adequate internal control as explained in the
first paragraph of the Utility Billing System Comments. We are aware
of the difficulties of proper separation of duties in an accounting
department the size of the City's, but we feel that certain changes
could be made and procedures added which can improve the system of
internal control. It should be pointed out that as the City's
accounting system becomes completely automated, management must again
look at the system of internal control created as a result of the on-
line real time accounting system and adjust job responsibilities or
add additional procedures which will provide management with a reason-
able and reliable system. Based on our review of the utility billing
system, we would recommend the following responsibility and procedural
changes:
(1) Utility accounts receivable/billing clerks should not have
responsibility for the review and maintenance of the Water
and Sewer Fund journals and general ledger. The Water and
Sewer Fund journals and general ledger should be the responsi-
bility of a staff member disassociated with the utility
billing system. This basic separation of duties will provide
independent cross-checks on the utility billing system and the
utility accounting system. In addition, we recommend that
utility billing clerks not be authorized to handle cash
receipt transactions. These transactions, although infrequent,
should run through the general cashiering stations already
established by the City. Finally, at no time should any type
of refund check be returned to the utility accounts
receivable/billing clerks. These types of refund transactions
should follow normal accounts payable procedures.
(2) Currently, customer account change forms do not require
independent review or authorization of account adjustments.
This does not provide adequate control over account adjustments
because there is no independent review of customer accounts
receivable and billing transactions. We recommend that all
adjustments required to be made to an account be reviewed and
authorized by a designated member of the accounting staff
prior to adjustments being made. This person should not have
responsibility for utility billings, except for the authori-
zation of adjustments." This person should also review the
type and number of customer complaints relating to utility
billings and periodically review customer account histories
for unusual transactions.
5.
CASH RECEIPTS
During our review and observation of the general cashiering duties, we
noted that occasionally several City accounting department employees
will handle cashiering duties out of one cash drawer. This does not
properly fix responsibility for cash collections to specific employees.
We recommend that only one cashier work out of a cash drawer.- This
procedure will improve the control over cash collections by limiting
the access to daily cash receipts and assigning responsibility to a
single employee.
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It was also noted that unused cash drawers, with various amounts of
cash within, are left in the open vault each day. Even though the cash
drawer is in the vault, there is a lot of traffic in and out of the
vault by both accounting and nonaccounting City employees. We recommend
that cash from unused cash drawers be kept in zipper pouches and kept
in a locked file cabinet within the vault or another equally secure
location.
6. BUILDING PERMITS
City Ordinance No. 958 provides standard fees for building, electrical,
plumbing and mechanical permits, issued by the City inspectors. Our
test sample of permits issued revealed that the inspectors were not
adhering to the fee schedules set forth in Ordinance No. 958, but were,
in fact, using a different fee schedule. Additionally, it was noted
that the fees calculated on the permits were not calculated in a con-
sistent manner in some cases and, in many cases, there existed clerical
errors or there was- insufficient information on the face of the permit
to recompute the permit fee. We recommend that management consult with
the building inspector to determine the reason for such errors and also
review the need to modify Ordinance No. 958 to put it in a more workable
condition.
The foregoing conditions were considered in determining the nature, timing and
extent of audit tests to be applied in our examination of the financial state-
ments, and this report of such conditions does not modify our report dated
December 18, 1978 on such financial statements.
It is possible that, unless the City adopts procedures towards correcting the
various deficiencies noted, further problems could develop and become significant
enough that our opinion of subsequent financial statements could be affected.
MANAGEMENT COMMENTS
During the course of our examination of the records of the City of Edgewater,
Florida, certain matters came to our attention which we believe will be of
help to the City.
1. PROCEDURAL MANUAL
We continue to recommend that the City establish a comprehensive written
accounting procedural manual for all accounting systems. Since the City
is in the process of automating its accounting system, it becomes
essential for the City to have this procedural manual to maintain adequate
accounting control and establish sound procedures to conduct the daily
business of the City.
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2. SAFE DEPOSIT BOX
The City opened a safe deposit box on February 25, 1976. Only one
signature is required for access to this safe deposit box and the only
authorized signature on file is the City Clerk. The City passed Resolution
No. 615, dated November 13, 1975, authorizing the Mayor to have access
to the City's safe deposit box. In order to strengthen internal control
and comply with the resolution mentioned, ",Ie continue to recommend that
two signatures be required for access to the safe deposit box.
3. CONTRACTS
During our review of contracts, we noted that the City does not maintain
a master list of all the contractual obligations of the City. We
recommend that such a control list be maintained. This list should
contain the following information for each contractual obligation:
Party(ies) contracted with and purpose (services to receive);
Period of contract;
Amount of contractual obligation;
Fund(s) to account for contractual obligation; and,
Source of funds to pay contractual obligation.
4. SINKING FUND RESERVES
During our review of the City's Sinking Fund Reserves, it was determined
that the 1977 Water and Sewer Revenue Bond Interest and Sinking Fund
was deficient by $3,378.12, while some of the other reserve funds were
over funded. The following schedule lists all the required reserves
and reserve balances at September 30, 1978.
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C. Debt Service
Fund Reserve $ 100,000.00 $ 137,080.97 37,080.97
D. 1977 Water and
Sewer Reserve $ 4,149.96 j 4,155.96 6.00
E. Renewal and
Replacement
Reserve $ 50,000.00 $ 5L]54.53 1,154.53
EXCESS RESERVES
AT 9/30/78 $ 44,786.73
We recommend that management review reserve transactions to make sure the
City is in compliance with applicable Bond Ordinances and Resolutions
throughout the year. This will prevent violations of Bond Ordinances and
Resolutions and also prevent the unnecessary restriction of cash which can
be used for any lawful purpose within the City government operations.
5. INVESTMENT OF EXCESS WATER AND SEWER REVENUE FUND CASH
During the year, the City invested excess Water and Sewer Revenue Fund cash
in Certificates of Deposit. Resolution No. 627 (1977 Water and Sewer
Revenue Bond Issue) prohibits investments of Revenue Fund cash. We recom-
mend that the City contact appropriate officials at the Farmers Home
Administration and attempt to get this restriction eliminated so that
excess funds can be invested without violating Resolution No. 627.
6. During our subsequent review of the City's financial reports, it was
determined that Sinking Fund reserves are included in pooled cash. Bond
Ordinance No. 400 and Resolution No. 627 require that these funds not be
included in the general operating funds of the City. As a result of this
practice, the City is violating Bond Ordinance No. 400 and Resolution No.
627. We recommend that the City set up a savings passbook account to
record the accumulation of Sinking Fund reserves. This procedure will
sati sfy the_ requi rements of Ordi nance No. 400 and Reso 1 uti on No. 627, and
also provide interest earnings and quick access when the funds are needed
to make principal and interest payments.
7. POLICE RETIREMENT
The City approved Ordinance No. 968, in accordance with Florida Statutes,
Chapter 185, providing that the 1% gross receipts tax imposed on insurance
carriers within the City be used for funding the City's Police Pension
Fund. Since the City has established the retirement plan, the City should
receive the benefit of the taxes assessed by the state. It is our recom-
mendation that the City notify the appropriate state authorities so the
City can begin receiving these revenues as a contribution to the Police
Retirement Plan.
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8. EMPLOYEE PAY PLANS
During our review of the City's personnel records, it was noted that the
City does not utilize a unified pay rate and position grade system. Such
a system offers the following advantages:
A. Establishes job classifications and pay rates for promotion
levels within a job classification;
B. Provides a mechanism to promote employees within job classifi-
cations which increases employee moral;
C. Provides for an easy method to review the adequacy of pay
rates for all City employees without having to analyze
employees individually; and,
D. Reduces the possibility of pay rate errors and employee
disputes relative to pay rates.
We recommend the City consider the establishment of a uniform grade system
throughout the various City departments.
9. BUDGETING
Formal adoption of the operating budget by the City Council provides the
authority for the execution of the budget by management of the City. The
appropriation or expenditure side of the annual operating budqet constitutes
maximum authorizations to spend during the fiscal year and should not be
exceeded, except by subsequent amendment by the City Council.
Article VIII, Section 88, states that no money shall be drawn from the
depository of the City, nor shall any obligation for the expenditure of
money be incurred, except pursuant to the appropriations made by the City
Council. Violations of this section of the City Charter occurred through--
out the General Fund, Federal Revenue Sharing Fund, Anti-Recession Fund
and Water and Sewer Fund. To prevent these occurrances in the future,
we recommend that the City review their budgetary contr~l process and
consider the following:
A. No purchase orders should be authorized until it has been determined
that funds are available in the applicable appropriation account
the expenditure will eventually be charged to; and,
B. Management should review the City.s operating budgets monthly.
In addition to the above, management should consider a change to the City
Charter in regards to the required level of budgetary control. The line
item of expenditure control procedure now provided in the City.s Charter
can become burdensome to management due to the need to modify the City's
budget every time a line item within a department becomes insufficient.
We recommend line item of expenditure control be continued within the
departmental level, but that the Charter be amended to allow overexpendi-
ture of line items as long as the total department or function is not
overspent.
This procedure will provide management with the same degree of budgetary
control as presently exists and also provide workable and flexible
conditions to comply with the City.s Charter.
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ANNUAL FINANCIAL REPORT OF UNITS OF LOCAL GOVERNMENT 1978
We reviewed the annual report filed with the Department of Banking and Finance
pursuant to Section 218.32, Florida Statutes, and found it to be in agreement
with the annual audit report.
GENERAL COMMENTS
We believe that implementation of the above recommendations will improve the
efficiency and effectiveness of your accounting system and operations.
We wish to thank the City Clerk, department heads and their staff for their
assistance and cooperation during our examination. If we can be of any
further service regarding these matters, please do not hesitate to call us.
J1f?, ?m"-' (y {h
Daytona Beach, Florida
December 18, 1978