FY 2006 CAFR
City of Edgewater, Florida
COMPREHENSIVE ANNUAL FINANCIAL REPORT
For The Year Ended September 30, 2006
Prepared by: Finance Department
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INTRODUCTOR'( SECTION
CITY OF EDGEWA TER
COMPREHENSIVE ANNUAL FINANCIAL REPORT
TABLE OF CONTENTS
Year Ended September 30, 2006
Paae
I.
Introductory Section:
Table of Contents
Letter of Transmittal
GFOA Certificate of Achievement
List of Principal Officials
Organizational Chart
i-ii
iii-vi
vii
viii
ix
II.
Financial Section:
Independent Auditor's Report
Managemenfs Discussion and Analysis
1-2
3-13
Basic Financial Statements:
Government-Wide Financial Statements:
Statement of Net Assets 14
Statement of Activities 15
Fund Financial Statements:
Balance Sheet - Governmental Funds 16
Statement of Revenues, Expenditures and Changes in
Fund Balances - Governmental Funds 17
Reconciliation of the Statement of Revenues, Expenditures and
Changes in Fund Balances of Governmental Funds to the Statement of
Activities 18
Statement of Revenues, Expenditures and Changes in Fund
Balances - Budget and Actual - General Fund 19
Statement of Net Assets - Proprjetary Funds 20-21
Statement of Revenues, Expenses and Changes in
Fund Net Assets - Proprietary Funds 22
Statement of Cash Flows - Proprietary Funds 23-24
Statement of Fiduciary Net Assets - Fiduciary Funds 25
Statement of Changes in Fiduciary Net Assets - Fiduciary Funds 26
Notes to Financial Statements 27 -59
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 60
Nonmajor Governmental Funds:
Combining Balance Sheet - Nonmajor Governmental Funds 61-62
Combining Statement of Revenues, Expenditures and Changes
In Fund Balances - Nonmajor Governmental Funds 63-64
CITY OF EDGEWA TER
C9MPREH~~SIVE ANNUAL FINANCIAL REPORT
TABLE OF CONTENTS - Continued
Year Ended September 3D, 2006
II.
Financial Section - Continued:
Schedule of Revenues, Expenditures and Changes in Fund
Balances - Budget and Actual:
Special Revenue Funds
Capital Project Fund
Nonmajor Proprietary Funds:
Combining Statement of Net Assets -
Nonmajor Proprietary Funds
Combining Statement of Revenues. Expenses and Changes
In Fund Net Assets - Nonmajor Proprietary Funds
Combining Statement of Cash Flows -
Nonmajor Proprietary Funds
Fiduciary Funds:
Combining Statement of Fiduciary Net Assets
Combining Statement of Changes in Fiduciary Net Assets
Capital Assets Used in the Operation of Governmental Funds:
Schedule by Function and Activity
III.
Statistical Section:
Table of Contents
Financial Trends:
Net Assets by Component
Changes in Net Assets
Governmental Activities Tax Revenues by Source
Fund Balances of Governmental Funds
Changes in Fund Balances of Governmental Funds
Revenue Capacity:
Assessed Value and Estimated Actual Value of Taxable Property
Property Tax Rates - Direct and Overlapping Governments
Principal Property Taxpayers
Property Tax Levies and Collections
Debt Capacity:
Ratios of Outstanding Debt by Type
Ratios of General Obligation Bonded Debt Outstanding
Direct and Overlapping Governmental Activities Debt
Legal Debt margin Information
Pledged-Revenue Coverage
Demographic and Economic Information:
Demographic and Economic Statistics
Population Statistics
Principal Employers
Operating Information
Full-time Equivalent City Government Employees by Function
Operating Indicator by Function
Capital Asset Statistics by Function
IV.
Other Reports:
Report on Internal Control over Financial Reporting and on Compliance
And Other Matters Based on an Audit of Financial Statements Performed
in Accordance with Government Aud;t;ng Standards
Management Letter
Affidavit of Impact Fee Compliance
II
Paae
65-71
72
73
74
75-76
77
78
79
80
81
82
83
84
85
86
87
88
89
90
91
92
93
94
95
96
97
98
99
100
101-102
103-106
107
THE CITY OF EDGEWATER
POST OFFICE BOX 100, EDGEWATER, FLORIDA 32132-0100
Honorable Mayor and Members
Of the City Council
City of Edgewater, Florida
State law requires that all general-purpose local governments publish a complete set of financial statements
presented in conformity with the generally accepted accounting principles in the United States of America (GAAP)
and that they be audited in accordance with generally accepted auditing standards in the United States of America by
a firm of licensed certified public accountants. Pursuant to the requirement, it is with great pleasure that we present
to the City of Edgewater, the Comprehensive Annual Financial Report (CAFR) for the fiscal year ended September
30th, 2006.
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 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 misuse and to compile sufficient reliable information for the preparation of
the City of Edgewater's fmancial 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
misstatements. As management, we assert that, to the best of our knowledge and belief, this financial report is
complete and reliable in all material respects.
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, 2006, are free of material
misstatements. The independent audit involved the following: 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 fmancial 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, 2006, are fairly presented in
conformity with generally accepted accounting principles in the Untied States of America. The independent
auditor's report is presented as the fust component of the financial section of this report.
GAAP requires 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
designated to complement the rvID&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.
III
CITY SUMMARY
The City of Edgewater is located in southeast Volusia County, primarily east of 1-95 south of New Smyrna Beach,
two miles west of the Atlantic Ocean and runs along 10.5 miles of the Indian River coastline. The City is within the
economic zone of Central Florida, which roughly follows Interstate 4 from Tampa through Orlando to Daytona
Beach and the communities along the Atlantic Coast in Vo]usia County. There are 7,040 acres of land within the
City with an estimated population of 2 ] ,572.
The City of Edgewater was incorporated in 1952 and has operated under the Council-Manager form of government
since' 198 I. Primary responsibilities of the City Manager are to implement the policies of the elected officials. The
City Manager assumes responsibilities of the day-to-day operations of the City, annual budget preparation,
appointing/removing officers and employees. In addition to supervising the daily operations, the City Manager
works with elected officials, conunittees and citizens to plan for the future of the community.
The City of Edgewater offers a full range of services to its citizens through multiple funds. The City uses funds to
separate resources and assure that the City adheres to restrictions placed upon it by legislators, grantors, donors, and
other outside parties (e.g. GASB, GAAP). The following is a list of services provided by each fund:
. General Fund - provides planning and zoning, economic development, building (e.g. permits,
inspections, etc), police, fire, parks, recreation, streets (new and maintained), code enforcement, animal,
and general administrative services.
. Water and Sewer Fund - provides water and sewer services.
· Refuse Fund - uses a combination of City personnel and assets along with private contracted companies
to provide solid waste collection.
· Stormwater Fund - provides and ensures proper water drainage from all properties.
Whenever possible the City seeks alternative sources of revenue to provide services, enhance services, and
supplement the existing expenses in the budget. The most prominent example of alternative revenue is grants
through the federal, state, and localleve]s.
LOCAL ECONOMY
Long established businesses such as Coronado Paint, Boston Whaler, Edgewater Power Boats, RJ. Dougherty
Associates, Inc, Porta Products, Tropical Blossom Honey, as well as new businesses provide employment
opportunities within the City. NASA and related supporting enterprises at Cape Canaveral as well as the cruise
industry located at Port Canaveral provide further employment opportunities.
The City of Edgewater currently has a 3.1 percent unemployment rate (below the state average of 4.01). During the
last year~ taxable assessnlent values of property in Edgewater increased 3] .05 percent. 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-
oriented initiatives. The city continues to develop many partnerships between various economic development
agencies and,local businesses.
IV
FINANCIAL INFORMATION
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.
Budgeting Controls. The annual budget serves as the foundation 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 City Council for review. The City Council 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 (i.e., general fund), department
(i.e., fire department) and division (i.e., 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 funds must be
approved by City Council. Original and final amended budget-to-actual comparisons are provided in this report for
each indi vidual 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 stars on pages 61-72.
Long-term financial planning. 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 financing 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 ditTerent financing approaches.
Casb management polices and practices. The city administers a cash management and investment program that
seeks to maximize, in order of priotity, the preservation of funds, liquidity and interest earnings over its cash and
investments. Cash resources of the individual funds are combined to fonn a pool of cash and investments. The
City's cash and investment pool balance at September 30, 2006 (not including pension funds) was $8,786,315.
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, 2006 were
$23,690,068.
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 City9s management and legal counsel, legal claims and litigation are not
anticipated to have a material impact on the financial position of the City.
Pension and other postretirement benefits. The City of Edgewater sponsors two defined benefit and on defined
contribution pension plans for its employees. Each year an independent actuary 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 addition9
police and firefighters are required to contribute 60/0 of their salary to the plan. General employees must contribute
2.50/0 of their salary to the plan.
v
AWARDS AND ACKNOWLEDGEMENTS
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, 2005. The City
of Edgewater has received a Certificate of Achievement for the last twenty-two 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 G AAP and app licable 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 of another certificate.
The preparation to 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
Council for their unfailing support for maintaining the highest standards of professionalism in the management of
the City of Edgewater's fmances.
lly submitted,
~L~
Brett L. Tanner
Finance Director
VI
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Certificate of
Achievement
for Excellence
in Financial
Reporting
Presented to
City of Edgewater
Florida
For its Comprehensive Annual
Financial Report
for the -Fiscal Year Ended
September 30, 2005
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 fmancial
reports (CAFRs) achieve the highest
standards in government accounting
and fmancial reporting.
President
~/~
Executive Director
vii
CITY OF EDGEWA TER, FLORIDA
LIST OF PRINCIPAL OFFICIALS
Year Ended September 30, 2006
MAYOR
Michael L. Thomas
CITY COUNCIL
Debra J. Rogers - District 1
Dennis A. Vincenzi - District 2
Harriet E. Rhodes - District 3
Judith R. Lichter - District 4
CITY MANAGER
Jon C. Williams
CITY CLERK
Susan J. Wadsworth
CITY A TIORNEY
Carolyn S. Ansay
FINANCE DIRECTOR
Brett Tanner
viii
CITY OF EDGEWATER
ORGANIZATIONAL CHART
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IX
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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 act;vities, each major fund, and the aggregate remaining fund information of the
City of Edge water. Florida, as of and for the year ended September 3D, 2006, 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 Governn1ent
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
basisJ evidence supporting the amounts and d,sclosures 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 Edge wa ter, Florida, as of
September 30, 2006, 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.
MCDIRMI1' DAVIS & COMPANY, LLC
605 E. ROBINSON STREET~ SUlTE 635 · ORLANDO~ FLORlDA 32801
TELEPHONE 407 -843-5406 · FAX 407 -649-9339 · EMAIL: INFO@MCDIRMITDAVIS.COM
MEMBERS: PRIVATE COMPANIES PRACTlCE SECTION · AMERICAN INSTITUTE OF CERTIFlED PUBLIC ACCOUNTANTS. FLORIDA INSTlTUTE OF CERTIFIED PUBLIC ACCOUNTANTS
1
In accordance with Government Auditing Standards, we have also issued a report dated
December 5, 2006 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 grant agreements and other matters. The purpose of that report is to describe
the scope of our testing and internal control over financial reporting and compliance and the
result of that testing r and not to provide an opinion on the internal control over financial
reporting or on compliance. That report is an integral part of an audit performed in accordance
with Government Auditing Standards and should be considered in 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 accounting principles
generally accepted in the United States of America. We have applied certain limited
procedures, which consisted principally of inquiries of management regcrrding 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 opinions on the financial statements that
collectively com prise 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 combining and individual nonmajor fund financial. statements and schedules
have been subjected to the auditing procedures applied in the audit of the basic financial
statements and, in our opinionl are fairly stated in a'l 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.
1J!,c1J.iunj,t !XJui4 & ~t:UWf LLt
McDIRMIT DAVIS & COMPANY, LLC
December 5, 2006
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, 2006. 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 $50,712,320 (net assets). Of this amount, $8,841,529 (unrestricted net
assets) may be used to meet the government's ongoing obligations to citizens and
creditors.
. The government's total net assets increased by $4,960,818.
. As of the close of the current fiscal year, the City of EdgewaterJs governmental funds
reported combined ending fund balances of $4,917,904, an increase of $1,181,297 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
$2,257,987, or 18% 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).
3
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 ten 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 eight 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 - 71.
The basic governmental fund financial statements can be found on pages 16 - 19 of this report.
4
MANAGEMENT'S DISCUSSION AND ANALYSIS - CONTINUED
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 and refuse collection, which are all considered to be major funds. Data for the other 3
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 $50,712,320 at the close
of the most recent fiscar 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.
5
MANAGEMENT'S DISCUSSION AND ANALYSIS - CONTINUED
City of Edgewater
Statement of Net Assets
Assets:
Current and other assets
Capital Assets
Total Assets
Governmental Activities
2006 2005
$ 71392,072 $ 7,201,690
19.674,000 19.141.076
27,066,072 26342,766
Business-Type Activities
2006 2005
$13,132,794 $16,066,309
57.726.606 55.642.504
70859.400 71 708.813
Total Primary Government
2006 2005
$20,524,866 $23,267,999
77.400.606 74.783.580
97,925472 98 051 579
Liabilities:
Long term liabilities
Other liabilities
Total Liabilities
10,066,277
552.853
10,619.130
111014,254
1 118.176
12.132.430
34,982,241
1.611.781
36,594.022
37,297,954
2.869.693
40,167.647
45,048,518
2.164.634
47.213152
48,312,208
3.987.869
52.300,077
Net Assets:
Invested in capital assets, net of
related debt
Restricted
Unrestricted
Total Net Assets
10,790.015 9,283,844 23,188,819 18,641,079 33,978,834 27,924,923
3,547,595 3.760,701 4,344.362 3,567,108 7.891,957 7,327,809
2.109332 1.165.791 6.732.197 9.332.979 8.841.529 10.498.770
$16 446 942 $14210336 $34 265 378 $31,541,166 $50712,320 $45 751 50(
Sixty-seven percent (670;0) 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 Hquidate these liabHities.
An additional portion of the City of EdgewaterJs net assets (160;0) represents resources that are
subject to external restrictions on how they may be used. The remaining balance of unrestricted net
assets ($8,841,529) 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 increased by $4,960,818 during the current fiscal year. The reasons for this
increase 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
City of Edgewater
Chances in Net Assets
Governmental Activities Busi ness-Type Activities Total Primary Government
2006 2005 2006 2005 2006 2005
Revenues :
Program revenues.
Charges for services $ 1, n9.825 $ 1,750,505 $ 9,757,783 $ 9,335,210 $11.537,608 $11,085,715
Operating grants and
contributions 505,161 574,193 272,580 1,224,518 777,741 1,798,711
Capital grants and
co ntributions 845,639 326,163 2,438,556 1,218,691 3,284.195 1,5441854
General revenues -
Property taxes 5,045,677 4.125,604 5,045,677 4,125,604
Franchise and utility
taxes 3,098,230 2,721,040 3,098,230 2,721,040
Intergovernmental 1,952,077 1,901.135 1,952,077 1,901,135
Investment income
and miscellaneous 1.734.431 468.314 714.244 537.757 2448.675 1.006.071
Total revenues 14.961.040 11.866.954 13.183.163 12.316 176 28.144.203 24 183.130
Expenses:
General government 3.338.289 2,801,030 3.338,289 2,801.030
Public safety 6,259,632 6.235,432 6,259,632 6,235,432
Transportation/public works 643,943 725,242 643,943 725,242
Leisure services 1 ,5'11.621 1,727,507 1,511,621 1,727,507
Interest on long-term debt 291,830 310,433 291,830 310,433
Water and sewer 7,997,538 7,2861475 7,997,538 7.286,475
Refuse collection 2,067,329 2,951,045 2,067,329 2,951,045
Stonnwater management 1,017,118 935, no 1,0171118 935,nO
Development fees 43.695 100.331 43,695 100,331
Renewal and replacement 12.390 248.506 12.390 248.506
T ota.1 expenses 12.045.315 11.799.644 11.138 070 11.522.127 23.183.385 23.321.771
Increase (Decrease) in Net
Assets Before Transfers 2,915,725 67,31 0 21045,093 794,049 4.960,818 861.359
Tra nsfers (679.119) 1.370.073 679.119 (1.370.073)
Increase (Decrease) in
Net Assets 2,236,606 1,437,383 2,724,212 (576,024 ) 4,960,818 861.359
Net Assets .. Beginning 14.210.336 12.772.953 31.541.166 32.117.190 45.751.502 44.890.143
Net Assets - Ending $16446 Q4? $14210336 $34 265 378 9;31 541 166 5;50 712 320 $45751 502
7
MANAGEMENT'S DISCUSSION AND ANALYSIS - CONTINUED
Governmental Activities - Governmental activities increased the City of Edgewater's net assets
by $2,236,606. Key elements of this increase are as follows:
. Property taxes increased by $920,073 (220/0) during the year.
. Capital grants and contributions increased by $519,476 (1340/0) page 7primarily due to
various capital grants the City has received.
. Investment and miscellaneous income increased by $1,266,117 (2700/0) primarily due to
the sale of land the City was holding for resale.
Business- Type Activities - Business-type activities increased the City of Edgewater's net assets
by $2,724,212. Key elements of this decrease are as follows:
. Charges for services increased by 50/0, however there was a net decrease of 770/0 in
operating grants since more FEMA revenue was earned in 2005.
· Expenses decreased around $400,000 from 2005. This net decrease was due to a
decrease in refuse collection, development fees and renewal and replacement expenses,
as well as increase in water and sewer operating expenses.
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 f;nance-related requirements.
Governmental Funds - The focus of the City's governmental funds is to provide information on
near-term inf~ows, 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 $4,917,904, an increase of $1,181,297 in comparison with
the prior year. Approximately 940/0 of this amount ($4,616,405) 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 ;s not available for new spending because it has already been
committed to (1) pay debt service ($259,967) or (2) for other purposes ($41.532).
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 $2,257,987, while total fund
balance was $2,299,519. 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 18 percent of total general fund expenditures, while total fund balance
represents 19 percent of that same amount.
The fund balance of the general fund increased by $1,067,581 during the current fiscal year.
This increase was due primarily to sale of land held for resale of $1 ,188,785 received in 2006.
Also, general fund expenditures were less than budget in all departments except public safety
and interest on debt service.
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 $6,732, 197. The
total increase in net assets for these funds was $2,724,212. 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
During the year, actual revenues were $272,711 more than budgeted revenue primarily due to
conservatism. Actual expenditures were $855, 190 less than budgeted expenditures primarily
due to projects in the Leisure Services Department not starting when anticipated. Additional
expenditure variances are associated with debt service entries on the water meter capital lease
project. Actual expenditures did exceed budgeted expenditures in the following functions: public
safety and interest on debt service.
11
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, 2006, amounts to $77,400,606 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 30tb. Major capital asset events during the current
fiscal year included the following:
. The State Road 442 beautification project costing $228,994 was completed.
. Construction in progress increased for business-type activities primarily because of work
on the Alan R. Thomas Water Treatment Plant.
. Business-type improvements increased primarily because of the completion of
Parktowne drainage improvements.
City of Edgewater
Capital Assets
As of September 30,
Governmental Activities Business-Type Activities Total Primary Govemment
2006 2005 2006 2005 2006 2005
Land $ 3,779,436 $ 3,779,436 $ 1.188,798 $ 676,827 $ 4,968,234 $ 4,456,263
Buildings 2.513,591 2,631,446 12,824,499 13.572,356 15,338,090 16,203,802
Improvements 8,512,225 8,738,731 40,760,333 39,256,216 49.272,558 47,994,947
Machinery and
equipment 1,429,772 1,138,996 1,782,415 1,264,432 3,2121187 2,403.428
Infrastructure 1,076,610 787,182 1,076,610 787,182
Construction in
progress 2.362.366 2.065.285 1.170.561 872.673 3.532.927 2.937 .958
Total $19674000 $19 141 076 $57 726 60B $55 642 504 $77 400 606 $74 783580
Additional information on the City of Edgewaterts capital assets can be found in Note 6 of this
report.
12
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 $43,509,822. 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 of this report.
City of Edgewater
Lona- Term Debt
As of September 30,
Governmental Activities
2006 2005
Business-Type Activities
2006 2005
Total Primary Government
2006 2005
331.122
$9 8S7 232
$10,660,000
5,2391457
11,975,560
6.750.820
$34 625 837
$11,110,000
6,147,017
$10,660,000
13,765,898
$111110,000
15,673,127
Bonds payable
Notes payable
State revolving
loan
Capital leases
$
8,526,441
$
9,526,110
357.544
$8 883 985
13,298,345
6.544.290
$37 099 652
11,975,560
7.108.364
$43 509 822
13,298,345
6.875.412
$46 956 884
The City of Edgewater's total debt decreased by $3,447,062 (7 percent) during the current fiscal
year.
Next Year's Budget and Rates
During the current fiscal year, the unreserved fund balance in the general fund increased to
$2,257,987. The City has not appropriated any of this amount for spending in the 2006 fiscal
year budget since the plan is to increase the unreserved fund balance so that it is at least 10-
2001& 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.
13
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BASIC FINANCIAL STATEMENTS
This page intentionally left blank.
CITY OF EDGEWATER, FLORIDA
STATEMENT OF NET ASSETS
September 30, 2006
Primary Government
Governmental Business-type
Activities Activites Total
Assets:
Cash and cash equivalents $ 2,974.679 $ 2031617 $ 3,178,296
Investments 508,550 5081550
Receivables, net 389,516 2,8121191 3,201,707
Inventories and prepaid costs 41.532 1,285 42,817
Due from other governments 113,319 158,570 271,889
Internal balances 1,325,725 (1.325.725)
Restricted assets:
Cash and cash equivalents 3,898,788 3,898,788
Investments 1,202,431 1,202,431
Special assessments receivable 1 ,880,570 5.9821058 7,862,628
Bond issuance costs 199,579 199,579
Land held for resale 117,436 117,436
Investment in joint venture 40,745 40,745
Capital assets not being depreciated 6,141,802 21359,359 8,501,161
Capital assets being depreciated, net of
accumulated depreciation 13,532,198 55,367,247 68,899,445
Total Assets 27,066,072 70,859,400 97.925,472
Liabilities:
Accounts payable and other current liabilities 369,093 1,300,460 1,669,553
Due to other governments 3,109 3,109
Unearned revenue 180,651 180,651
Accrued interest payable 311,321 311,321
Noncurrent liabilities:
Due within one year 1,776,927 3,210,265 41987,192
Due in more than one year 8,289,350 31,771,976 40,061,326
Total Liabiljties 10,619,130 36,594,022 47,2131152
Net Assets:
Invested in capital assets, net of related debt 10,790,015 23,1881819 331978,834
Restricted for:
Capital projects 978,087 3,141,931 4, 1201018
Debt service 2,569,508 1,202,431 3,771,939
Unrestricted 2,1091332 6,732,197 8,841,529
Total Net Assets $ 16,446,942 $ 34,265,378 $ 50,712,320
The accompanying Notes to Financial Statements are an integral part of these statements~
14
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CITY OF EDGEWATER, FLORIDA
BALANCE SHEET
GOVERNMENTAL FUNDS
September 30, 2006
Other Total
Debt Governmental Governmental
General Service Funds Funds
Assets:
Cash and cash equivalents $ 950, 182 $ 259,967 $ 1,764,530 $ 2,974,679
Investments 508,550 508,550
Receivables, net 1961872 192,644 389,516
Inventories, at cost 41,532 41,532
Due from other governments 113,319 113,319
Due from other funds 21746,705 2,746,705
Special assessments receivable 1,880,570 1,880.570
Land held for resale 117,436 117,436
Total Assets $ 4,166,046 $2,140,537 $ 2,465,724 $ 8,772,307
Liabilities and Fund Balances:
Accounts payable $ 227,074 $ $ 7,037 $ 234, 111
Accrued liabilities 134,982 134,982
Due to other governments 3,109 3,109
Due to other funds 1,320,711 100,269 11420,980
Deferred revenue 1,880,570 1 ,880,570
Unearned revenue 180,651 180,651
Total Liabilities 1,866,527 1,8801570 1071306 3,854,403
Fund balances:
Reserved:
I nventories and prepaid costs 41.532 41,532
Debt service 259,967 259,967
Unreservedl reported in:
General fund 2,257,987 2,2571987
Special revenue funds 1,380,331 1,380,331
Capital projects funds 978,087 978,087
Total fund balances 2,299,519 259,967 2,3581418 4,9171904
Total Liabilities and Fund
Balances $ 4,166,046 $2,140,537 $ 2,465,724
Amounts reported for governmental activities in the statement of net
assets are different because:
Capital assets used in governmental activities are not financial resource:
andl therefore are not reported in the funds 191674,000
Investment in joint venture is not a financial asset and therefore is not
reported in the funds 40,745
Other long-term assets are not available to pay for current period
expenditures and, therefore, are deferred in the funds 1 ,880,570
Long-term liabilities are not due and payable in the current
period and therefore are not reported in the funds ( 10,066,277)
Net assets of governmental activities $ 16,446,942
The accompanying Notes to Financial Statements are an integral part of these statements.
16
CITY OF EDGEWATER, FLORIDA
STATEMENT OF REVENUES. EXPENDITURES AND CHANGES
IN FUND BALANCES - GOVERNMENTAL FUNDS
For The Year Ended September 30, 2006
Other Total
Debt Governmental Governmental
General Service Funds Funds
Revenues:
Taxes $ 8,1431907 $ $ $ 8,143,907
Licenses and permits 500,588 500,588
Intergovernmental revenues 2,500,627 802,250 3,302,877
Charges for services 547,221 547,221
Fines and forfeitures 132,378 10,502 142,880
Impact fees/special assessments 541564 433,349 534,572 1,022,485
Investment income 78,812 1311727 34,433 244,972
Miscellaneous 239,750 262 240,012
Total revenues 12,197,847 565,076 1,382,019 14,1441942
Expenditures:
Current:
General government 3,026,976 33,885 3,060,861
Public safety 6,225,480 286,715 6,512,195
Transportation/public works 546,555 546,555
Leisure services 1,458,749 386,004 1,844,753
Debt selVice:
Principal retirement 960,133 710,013 1,670,146
Interest and fiscal charges 87,716 204,114 291,830
Capital outlay:
Public safety 217,139 217,139
Transportation/public works 87,393 87,393
Total expenditures 12,305,609 914,127 1 ,011 ,136 14,230,872
Excess (Deficiency) of
Revenues Over Expenditures (107,762) (349,051 ) 370,883 (85,930)
Other Financing Sources (Uses)
General obligation note 500,000 500,000
Capital lease 1961899 196,899
Transfers in 663,991 353,429 80,293 1,097,713
Transfers out (738,095) (1,038,737) (1,776,832)
Sale of land held for resale 1,249,447 1,249,447
Net other financing sources
(uses) 1,175,343 353,429 (261,545) 1,267,227
Net Change in Fund Balances 1,06.7,581 4,378 109,338 1, 181 ,297
Fund Balances - Beginning 1,231,938 255,589 21249,080 3,736,607
Fund Balances... Ending $ 2,299,519 $ 259,967 $ 2,358,418 $ 4,917,904
The accompanying Notes to Financial Statements are an integral part of these statements.
17
CITY OF EDGEWA TERJ 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, 2006
Amounts reported for the governmental activities in the statement of
activities (page 15) are different because:
Net change in fund ba\ances - total governmental funds (page 17)
$ 1,181,297
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 outtays exceeded depreciation
in the current period.
532,924
The issuance of long-term debt provides current financial resources to
governmental funds, white 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.
973,247
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.
(433,349)
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.
(17,513)
$ 2,236,606
Change in net assets of governmental activities (page 15)
The accompanying Notes to Financial Statements are an integral part of these statements.
18
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CITY OF EDGEWA TER, FLORIDA
GENERAL FUND
STATEMENT OF REVENUES. EXPENDITURES AND CHANGES IN
FUND BALANCE - BUDGET AND ACTUAL
For The Year Ended September 30, 2006
Variance With
Final Budget
Budgeted Amounts Actua' Positive
Original Final Amounts (Negative)
Revenues:
Taxes $ 7,810,963 $ 7,810,963 $ 8.143.907 $ 332,944
Licenses and permits 644,000 644,000 500,588 (143,412)
I ntergovern mental revenues 2,611,955 2,611,955 2,500,627 (111,328)
Charges for services 250.768 250,768 547J221 296,453
Fines and forfeitures 155,600 155,600 132,378 (23,222)
Impact fees/special assessments 41,500 41,500 54,564 13,064
Investment income 33,400 33,400 78,812 45,412
Miscellaneous 399,950 376,950 239,750 (137,200)
Total revenues 11,948, 1 36 11,925, 1 36 12,197,847 272,711
Expenditures:
Current:
General government 3,665,583 3,221,919 3,026,976 194,943
Public safety 5,878,027 5,899,834 6,225,480 (325,646)
Transportation/public works 587,238 587,238 546,555 40,683
Leisure services 2,017,394 2,017,394 1,458,749 558,645
Debt service:
Principal retirement 892,305 1,355,425 960,133 395,292
I nterest and fiscal charges 112,345 78,989 87,716 (8,727)
Total expenditures 13,152,892 13,160,799 12,305,609 855, 190
Excess (Deficiency) of Revenues
Over Expenditures (1,204,756) (1,235,663) (107,762) 1,127,901
Other Financing Sources (Uses)
Transfers in 1,000,000 1,012,000 663,991 (348,009)
Transfers out (685,797) (6851797) (738,095) (52,298)
Sale of land held for resale 1,188,785 1 , 188,785 1 ,249,447 60,662
Net other financing sources (uses) 1,502,988 1,514,988 1,175,343 (339,645)
Net Change in Fund Balance 298,232 279,325 1,067,581 788,256
Fund Balances - Beginning 1,231,938 1,231,938 1,231,938
Fund Balances - Ending $ 1,530,170 $ 1,511,263 $ 2,299,519 $ 788,256
The accompanying Notes to Financial Statements are an integral part of these statements.
19
CITY OF EDGEWATER, FLORrDA
STATEMENT OF NET ASSETS - PROPRIETARY FUNDS
September 30 t 2006
Other
Water and Refuse Business.. Type
Sewer Collection Funds Total
Assets
Current assets:
Cash and cash equivalents $ $ 203,617 $ $ 203,617
Receivables, net 832,218 272,054 131,108 1 ,235,380
Special assessments receivable 1,576,811 1,576,811
Due from other governments 158,570 158,570
Due from other funds 1,320,711 1,320,711
Prepaid costs 1,285 1,285
Restricted cash and cash equivalents 1,758,350 1,758,350
Total current assets 4,168,664 475,671 1,610,389 6,254,724
Noncurrent assets:
Restricted cash and cash equivalents 2,140,438 2,140,438
Restricted investments 1,202,431 1,202,431
Special assessments receivable 5,982,058 5,982,058
Bond issuance costs 196,307 3,272 199,579
Capital assets:
Land, buildings and equipment 69,244,404 1,703,859 8,457,693 79,405,956
Construction in progress 1,156,369 14,193 1,170,562
Less .accumulated depreciation (20,104,708) (912,520) (1,832,684 ) (22,849,912)
Total capital assets (net of
accumulated depreciation) 50,296,065 791,339 6,639,202 57,726,606
Total noncurrent assets 57,676,861 791,339 8,782,912 67,251,112
Total assets 61,845,525 1,267,010 10,393,301 73,505,836
The accompanying Notes to Financial Statements are an integral part of these statements.
20
Other
Water and Refuse Business- Type
Sewer Collection Funds Total
Liabilities
Current liabilities:
Accounts payable 40,108 32,825 273,287 346,220
Accrued liabilities 36,319 28,450 8,487 73,256
Retainage payable 98,604 98,604
Compensated absences 305,730 100,585 38, 1 38 444,453
Due to other funds 1,013J070 1,633,366 2,646,436
Customer deposits payable 782,381 782,381
Capital leases payable-current 225,421 147,676 27,344 400,441
Notes payable-cu rrent 614,000 309,407 923,407
Revenue bonds payable-current 470,000 470,000
State revolving loan-current 1,371,417 1,371,417
Accrued interest payable 311,321 311,321
Total current liabilities 5,169,767 309,536 2,388,633 7,867,936
Noncurrent Jiabilities:
Revenue bonds payable 1 0, 1 0 1 ,951 10,101,951
State revolving loan 10,604,143 10,604,143
Capital lease 5,939,547 344,774 66,057 6,350,378
Notes payable 3,284,000 1,032,050 4,316,050
Total noncu rrent liabilities 29.929,641 344,774 1,098,107 31,372,522
T otalliabilities 35,099,408 654,310 3,486,740 39,240,458
Net Assets
I nvested in capital assets, net of
related debt 17,685,586 298,889 5,204,344 23,188,819
Restricted:
Capital projects 3,141,931 3,141,931
Debt service 1,202,431 1,202,431
Unrestricted 7,858,100 313,811 (1,439,714) 6,732, 197
TotaJ net assets $26,746,117 $ 612.700 $ 6,906,561 $ 34,265,378
21
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CITY OF EDGEWA TER, FLORIDA
STATEMENT OF REVENUES. EXPENSES AND CHANGES
IN FUND NET ASSETS - PROPRIETARY FUNDS
For The Year Ended September 30, 2006
Other
Water and Refuse Business-type
Sewer Collection Funds Total
Operating Revenues
User charges $ 6,597,883 $ 2,242,197 $ 917,703 $ 9,757,783
Operating Expenses
Salaries and benefits 2,541,142 964,424 393,217 3,898,783
Materials and supplies 1,695,664 176,344 122,037 1,994,045
Depreciation and amortization 2,190,498 141,844 256,415 2,588,757
Contractual Services 170,759 763,473 214,449 1,148,681
Total operating expenses 6,598,063 2,046,085 986,118 9,630,266
Operating income (loss) (180) 196,112 (68,415) 127,517
Nonoperating Revenue (Expenses)
Grant revenue 114,010 158,570 272,580
Investment income 485,555 1,771 147,667 634,993
Interest expense (1,399,475) (21,244) (87,085) (1,507,804 )
Miscellaneous revenue 10,675 68,576 79,251
Total nonoperating revenue (expense) (903,245) 94,537 287,728 (520,980)
Income (loss) before contributions
and transfers (903,425) 290,649 219,313 (393,463)
Capital contributions:
Fees and assessments 134,581 2,303,975 2,438,556
Transfers in 2,072,964 1,639,942 3,712,906
Transfers out (942,633) (2,091,154) (3,033,787)
Change in net assets 361 ,487 290,649 2,072,076 2,724,212
Total Net Assets - Beginning 2613841630 322,051 4,834,485 31,541, 166
Total Net Assets - Ending $26,746,117 $ 612,700 $ 6,906,561 $ 34,265,378
The accompanying Notes to Financial Statements are an integral part of these statements.
22
CITY OF EDGEWA TER, FLORIDA
STATEMENT OF CASH FLOWS
PROPRIETARY FUNDS
For The Year Ended September 30, 2006
Other
Water and Refuse Business-type
Sewer Collection Funds Total
Cash Flows from Operating Activities:
Receipts from customers $ 6.600,224 $ 2,201,948 $ 907,785 $ 9,709,957
Payments to suppliers (1,910,546) (2,411,728) (37,612) (4,359,886)
Payments to employees (2,499,365) (932.408) (387,724) (3,819,497)
Net cash provided (used) by operating
activities 2,190,313 (11142,188) 482,449 1,5301574
Cash Flows from Non..Capital
Financing Activities:
Decrease (Increase) in due from other funds 392.695 (158,570) 234, 125
Increase (decrease) due to other funds 1,013,070 (397,051 ) 447,370 1,063,389
Decrease in due from other governments 1,836.651 1,836,651
Grant revenue 114,010 158,570 272.580
Miscellaneous Income 10,675 68,576 79,251
Transfers in 2,072,964 1.639,942 3,712,906
Transfers out (942,633) (2.091,154) (3,033,787)
Net cash provided (used) by non-
capital financing activities 2,546,771 1,553,610 64,734 4,165,115
Cash Flows from Capital and Related
Financing Activities:
Proceeds from sale of capital assets 727 87 814
Acquisition of capital assets (2,129,657) (468.951 ) (2,042,664 ) (4.641,272)
Principal paid on long-term debt (2.598.391 ) (184.598) (329,767) (3,112,756)
Capital lease proceeds 90, 107 465,217 83,617 638,941
Interest paid on long-term debt ( 1,416,352) (21.244) (87,085) (1,524,681 )
Fees and assessments received 1,231,367 2,303.975 3,535,342
Net cash provided (used) by capital
and related financing activities (4,822,199) (209,576) (71,837) (5,103,612)
Cash Flows from Investing Activities:
Purchase of investments (46,385) (46,385)
Investment income 485,555 1,771 147,667 634,993
Net cash provided by investing activities 439,170 1,771 147,667 588,608
Net Increase (Decrease) in Cash and
Cash Equivalents 354,055 203,617 623,013 1,180,685
Cash and Cash Equivalents ... Beginning 1.404,295 1,517,425 2.921,720
Cash and Cash Equivalents ... End $ 1,758,350 $ 203,617 $ 2,140,438 $ 4,102,405
Classified As:
Cash and cash equivalents $ 203,617 $ $ 203,617
Restricted cash and cash equivalents 1,758,350 2,140,438 3,898,788
Total $ 1,758,350 $ 203,617 $ 2,140,438 $ 4.102,405
The accompanying Notes to Financial Statements are an integral part of these statements.
23
Other
Water and Refuse Business-type
Sewer Collection Funds Total
Reconciliation of Operating Income
(Loss) to Net Cash Provided (Used)
By Operating Activities
Operating income (loss) $ ( 1 80) $ 196, 112 $ (68,415) $ 127,517
Adjustments Not Affecting Cash:
Depreciation and amortization 2,190,498 141.844 256,415 2,588,757
Change in Assets and Liabilities:
(Increase) in accounts receivable (51,315) (40,249) (9,917) (1011481)
(Increase) in prepaid costs (1,285) (1.285)
Increase (decrease) in accounts payable (42,838) (1,471.911 ) 257,262 ( 1.257,487)
Increase in retainage payable 41.612 41,612
Increase in accrued liabilities 31,731 22,890 61725 61,346
Increase in customer deposits 53,656 53,656
Increase (decrease) in accrued
compensated absences 10,046 9.126 (1,233) 17,939
Total adjustments 2,190,493 (1,338.300) 550,864 11403,057
Net Cash Provided(Used) by Operating
Activities $ 21190.313 $ ( 1. 142, 188) $ 482,449 $ 1.530.574
24
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CITY OF EDGEWATER, FLORIDA
STATEMENT OF FIDUCIARY NET ASSETS
FIDUCIARY FUNDS
September 30, 2006
Total Employee
Pension Funds
Assets:
I nvestments, at fair value:
Debt mutual funds
Equity mutual funds
Total investments
13,012, 184
10,677,884
23,690,068
Total assets
23.690,068
Liabilities:
Accounts payable
1 ,034
Net Assets:
Held in trust for pension benefits
$
23,689,034
The accompanying Notes to Financial Statements are an integral part of these statements.
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CITY OF EDGEWATER1 FLORIDA
STATEMENT OF CHANGES IN FIDUCIARY NET ASSETS
FIDUCIARY FUNDS
For The Year Ended September 30, 2006
Total Employee
Pension Funds
Additions:
Contributions:
Employer $ 11098,017
Plan members 2421051
State 202,712
Total contributions 11542,780
Investment income:
Net increase in fair value of investments 1,634,551
Net investment income 1,634.551
Total additions 3,177,331
Deductions:
Ben efitsl distributio ns 925,952
Administrative expenses 86,070
Total deductions 1,012,022
Change in Net Assets 2, 165,309
Net Assets - Beginning 21,523,725
Net Assets - End $ 23,689,034
The accompanying Notes to Financial Statements are an integral part of these statements.
26
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NOTES TO FINANCIAL STATEMENTS
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CITY OF EDGEWATER, FLORIDA
NOTES TO FINANCIAL STATEMENTS
September 30, 2006
Note 1 - Summary of Significant Accounting Policies:
A. Reponing 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
bYt 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.
27
CITY OF EDGEWA TER, FLORIDA
NOTES TO FINANCIAL STATEMENTS - Continued'
September 30, 2006
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.
28
CITY OF EDGEWATER, FLORIDA
NOTES TO FINANCIAL STATEMENTS - Continued
September 30, 2006
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 aU
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.
29
CITY OF EDGEWATER, FLORIDA
NOTES TO FINANCIAL STATEMENTS - Continued
September 30, 2006
Note 1 - Summary of Significant Accounting Policies (Continued):
c. Measurement Focus, Basis of Accounting, and Financial Statement Presentation -
(Continued)
Non-Maior Governmental Fund Tvpes
Special Revenue Funds account for specific revenue sources that are restricted by
law or administrative action to expenditures for specific purposes.
Cap/cal Projects Fund account for financial resources segregated for the acquisition
or construction of major capital facilities.
Maior ProDrietarv 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 Funds
Stormwater 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.
30
CITY OF EDGEWA TER, FLORIDA
NOTES TO FINANCIAL 8T A TEMENTS - Continued
September 30, 2006
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. The City implemented Governmental
Accounting Standards Board (GASB) Statement No. 40, Deposit and Investment
Risk Disclosures,. for fiscal year 2005. The effect of this statement is the
inclusion of new disclosures for deposit and investment risks.
31
CITY OF EDGEWATER, FLORIDA
NOTES TO FINANCIAL STATEMENTS - Continued
September 30, 2006
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" (Le., 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 IIdue 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 40A, in the month of November, 30A, in the
month of December, 20A, in the month of January, and 10A, 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.
32
CITY OF EDGEWATER, FLORIDA
NOTES TO FINANCIAL STATEMENTS - Continued
September 30, 2006
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, individua( 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 Jives 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.
33
CITY OF EDGEWATER, FLORIDA
NOTES TO FINANCIAL STATEMENTS - Continued
September 30, 2006
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.
34
CITY OF EDGEWATER, FLORIDA
NOTES TO FINANC-IAL STATEMENTS · Continued
September 30, 2006
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 uGovernmental 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 $5321924 difference are as
follo'vvs:
Capital outlay
Depreciation expense
Net adjustment to decrease net changes in fund balances-
total governmental funds to arrive at changes in net
assets of governmental activities
$ 1,572,309
(1,039,385)
$ 532 924
35
CITY OF EDGEWATER, FLORIDA
NOTES TO FINANCIAL STATEMENTS - Continued
September 30, 2006
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 transactionl however, has any effect on net assets." The
details of this $973,247 difference are as follows:
Capital lease
General obligation note issued
Principal repayment
$ 196,899
500,000
(1.670.146)
Net adjustment to increase net changes in fund balances - total
governmental funds to arrive at changes in net assets of
governmental activities
$ (973247)
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. II The details of this difference are
as follows:
Compensated absences
Increase in investment in joint venture
Net adjustment to decrease net changes in fund balances -
total governmental funds to arrive at changes in net assets of
governmental activities
$ (251270)
7.757
$ (17.513)
Note 3 - Stewardship, Compliance, and Accountability:
A.. Expenditures in Excess of Appropriations - Expenditures exceed appropriations for the
special law enforcement trust special revenue fund and the LLEBG special revenue fund.
36
CITY OF EDGEWA TER, FLORIDA
NOTES TO FINANCIAL STATEMENTS - Continued
September 30, 2006
Note 3 - Stewardship, Compliance, and Accountability (Continued):
B. 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 , which 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 an
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 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.
37
CITY OF EDGEWA TER, FLORIDA
NOTES TO FINANCIAL STATEMENTS - Continued
September 30, 2006
Note 4 - Cash and Investments:
Deposits - At year-end, the carrying amount of the City's deposits was $1,270,802 and the
bank balance was $2,879,369. Petty cash fund of $1,750 are not on deposit with a financial
institution. All bank deposits were fully covered by federal depository insurance or by
collateral held in banks that are members of the State of Florida's Collateral Pool as specified
under Florida law. Florida Statutes provide for collateral pooling by banks and savings and
loans. This limits local government deposits to "authorized depositories".
Investments - The City's investment policies are governed by State Statutes and City
ordinances and do not apply to pension funds. City ordinance allows investments in any'
financial institution that is a qualified public depository of the State of Florida as identified by
the State Treasurer, in accordance with Chapter 280 of the Florida Statutes. Authorized
investments are:
1. The Local Government Surplus Funds Trusts (SBA)
2. SEC registered money market funds with the highest credit quality rating from a
nationally recognized rating agency
3. Interest-bearing time deposits or savings accounts in qualified public depositories
as defined in Section 280.02
4. Direct obligations of the U.S. Treasury
5. Federal agencies and instrumentalities
6. 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 1940
7. Other investments authorized by ordinance.
The SBA is not a registrant with the Securities and Exchange Commission (SEC),
however, the Board has adopted operating procedures consistent with the
requirements for a 2a-7 fund. Therefore, the pool account balance can be used as
fair value for financial reporting.
Investments of the defined benefit pension plans consist principally of debt and
equity mutual funds, all of which are authorized by the plans.
38
CITY OF EDGEWATER, FLORIDA
NOTES TO FINANCIAL STATEMENTS - Continued
Year Ended September 30, 2006
Note 4 - Cash and Investments (Continued):
Investments made by the City of Edgewater at September 30, 2006 are summarized
below. Defined benefit pension plan investments, other than $10,677,884 in mutual
funds investing in equity securities, are included below. In accordance with GASB 31,
investments are reported at fair value.
Weighted
Average Maturity
Investment Tvpe Fair Value Credit Ratina (Years)
US Government Securities $ 1 ,202,431 N/A < 90 days
State Board of Administration 6,313,082 Unrated < 90 days
Pension Plan Investments:
SunTrust Retirement High
Grade Bond Fund 1,353,132 MA 7.20
SunTrust Retirement Fixed 1 ,354,670
Principal Global Investors (PGI)
Bond & Mortgage Fund 9,113,593 AA 6.90
PGllnflation Protection Fund 393,497 MA 10.66
Spectrum Preferred
Securities Fund 398,181 A <90 days
Post Advisory Group
High Yield Fund 3991111 B 6.51
$20.527 69~
Credit Risk:
The City's investment policy limits credit risk by restricting authorized investments to those
described above. Also the policy requires that investments held are to be diversified to the extent
practicable to control the risk of loss resulting from over concentration of assets in a specific
maturity, issued, instrument, dealer or bank through which financial instruments are bought and
sold.
Custodial Credit Risk:
In the case of deposits, this is the risk that in the event of a bank failure, the City's deposits may
not be returned to it. The CityJs investment policy requires that bank deposits be secured as
provided by Chapter 280, Florida Statutes. This law requires local governments to deposit funds
only in financial institutions designated as qualified public depositories by the Chief Financial
Officer of the State of Florida, and creates the Public Deposits Trust Fund, a multiple financial
institution pool with the ability to assess its member financial institutions for collateral shortfalls if a
default or insolvency has occurred. At September 30, 2006, all of the city's bank deposits were in
qualified public depositories.
39
CITY OF EDGEWA TER, FLORIDA
NOTES TO FINANCIAL STATEMENTS - Continued
Year Ended September 30, 2006
Note 4 - Cash and Investments (Continued):
Custodial Credit Risk (Continued):
For an investment, this is the risk that, in the event of the failure of the counterparty, the
government will not be able to recover the value of its investments or collateral securities that
are in the possession of an outside party. At September 30, 2006, none of the investments
listed are exposed to custodial credit risk because their existence is not evidenced by
securities that exist in physical or book entry form.
Concentration of Credit Risk:
The City's investment policy requires diversification, but does not specify limits on types of
investments.
Interest Rate Risk:
The City's investment policy does not specifically address interest rate risk, however the
general investment policy is to apply the prudent-person rule: Investments are made as a
prudent person would be expected to act, with discretion and intelligence, to seek reasonable
income, preserve capital, and in general, avoid speculative investments. The City manages its
exposure to declines in fair values by investing primarily in pooled investments that have a
weighted average maturity one year or less, with a special provision allowing up to 20oA, of the
investment portfolio to have a maturity of not more than five years.
Note 5 - Receivables:
Receivables as of year end for the City's individual major funds, and nonmajor funds in the
aggregate including the applicable allowances for uncollectible accounts, are as follows:
Water and Refuse Nonmajor Nonmajor
General Sewer Collection Governmental Proprietary
Fund Fund Fund Funds Funds Tota
Receivables:
Accou nts $2441857 $926,931 $294,803 $192,644 $142,667 $1,801,
Less allowance
for uncollectible
accounts (47.985) (94.713) (22.749) (11.559) (177 ,I
$196.872 $832.218 $272 054 $192.644 $131.108 $1.624.:
40
CITY OF EDGEWATER, FLORIDA
NOTES TO FINANCIAL STATEMENTS - Continued
September 30, 2006
Note 6 - Capital Assets:
Capital asset activity for the year ended September 30, 2006 was as follows:
Beginning Ending
Balance Increases Decreases Balance
Governmental activities:
Capital assets, not being
depreciated:
Land $ 3,779,436 $ $ $ 3,779,436
Construction in progress 2,065,285 633,914 (336,833) 2,362,366
Total capital assets, not being
depreciated 5,844,721 633,914 (336.833) 6,141 ,802
Capital assets, being depreciated:
Buildings 4,357,612 4,357,612
Improvements 14,961,851 359,428 15,321,279
Machinery and equipment 3,488,932 597,257 (76,741) 4,009,448
I nfra structure 851.432 318,543 1 , 169,975
Total capital assets, being
depreciated 23,659,827 1 ,275,228 (76,741) 24.858,314
Less accumulated depreciation for:
Buildings (1,726,166) (117,855) (1,844,021 )
Improvements (6,223,120) (585,934) (6,809,054)
Machinery and equipment (2,349,936) (306,481 ) 76,741 (2,579,676)
Infrastructu re (64,250) (29,115) (93.3651
Total accumulated depreciation
(10,363,472) 1 ,039,385 76,741 (11.326.116)
Total capital assets, being
depreciated, net 13,296,355 235.843 13.532.198
Governmental activities capital
assets, net $ 19.141.076 $ 869.757 $(336,833) $19.674.000
41
CITY OF EDGEWATER, FLORIDA
NOTES TO FINANCIAL STATEMENTS - Continued
September 30, 2006
Note 6 - Capital Assets (Continued):
Beginning Ending
Balance Increases Decreases Balance
Business-type activities:
Capital assets, not being
depreciated:
Land $ 676,827 $ 511,971 $ $ 1 , 188,798
Construction in progress 872,673 2.8351957 (2.538,069) 1 . 170.561
Total capital assets, not being
depreciated 1.549.500 3.347 .928 (2.5381069) 2,359.359
Capital assets, being depreciated:
Buildings 22,332,727 22,332,727
Improvements 48,921,041 2,934,208 51,855,249
Machinery and equipment 3.156.946 897 .205 (24,968) 4.029.183
Total capital assets, being
depreciated 74.410.714 3,831.413 (24.968) 78,217.159
Less accumulated depreciation for:
Buildings (8,760,371 ) (747,857) (9,508,228
Improvements (9,664,825) (1,430,091 ) (11,094,916
Machinery and equipment (1 .892.514) (378 ,409) 24.155 (2.246.768
Total accumulated depreciation (20.317.710) (2.556.357) 24.155 (22.849.912
Total capital assets, being
depreciated, net 54,093.004 1 .275 056 (813) 55.367.247
Business-type activities capital
assets, net $55 642 504 $4 622 984 $(2.538.882) $57.726.606
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
$ 58,043
225,086
533, 124
223. 132
$1.039.385
Business-type activities:
Water and sewer
Refuse collection
Stormwater management
Total depreciation expense - business-type activities
$2,158,098
141,844
256.415
$2.556.357
42
CITY OF EDGEWATER, FLORIDA
NOTES TO FINANCIAL STATEMENTS - Continued
September 30, 2006
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 weU as computer equipment. Also, in March of 2005 the City entered into
a lease agreement as lessee with Johnson Controls, Inc. for financing the upgrade and
replacement of 12,872 water meters. 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
Business-type
Activities
Assets -
Machinery and equipment
Less: accumulated depreciation
Total
$752,858
(192;586)
$560 272
$7,221,887
(632,202)
$6 589.685
The future minimum lease obligations and the net present value of these minimum lease
payments as of September 30, 2006 were as follows:
Year Ending
SeDtember 30
Governmental
Activities
Business-type
Activities
2007
2008
2009
2010
2011
2012-2016
2017-2021
Total minimum lease payments
Less: amount representing interest
$152,438
152,438
44,665
44,665
$ 688,349
6891004
617,952
642,317
526,510
3,065,400
2.837.120
9,066,652
(2.315.832)
$ 6.750.820
394,206
(36,662)
$357&544
Operating Leases - The City has entered into an operating lease for an integrated mailing
system which contains cancellation provision and is subject to annual appropriations. For fiscal
year 2006, rentals approximated $13,200. This lease supports governmental activities.
43
CITY OF EDGEWA TER, FLORIDA
NOTES TO FINANCIAL STATEMENTS - Continued
September 30, 2006
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:
Interest Balance
Rates Original September 30,
Business-TVDe Activities and Dates Maturity Amount 2006
Water and Sewer 2.75 - 5.50/0
Revenue Bonds - Series 1993 (4/1 & 1 0/1 ) 10/1/21 $12.460 000 $1 0,050,000
Water and Sewer 5.4 - 7.00k
Revenue Bonds - Series 1991 (4/1 & 1 0/1 ) 10/1/21 $13.580.000 610.000
Total $10 660.000
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;
44
CITY OF EDGEWATER, FLORIDA
NOTES TO FINANCIAL STATEMENTS - Continued
September 30, 2006
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 (5010)
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
(50/0) 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 1000/0 to 1020;0 of the instruments' face value, dependent upon the call
date.
A,nnual requirements to amortize water and sewer revenue bonds outstanding as of
September 30, 2006 are as follows:
Year Ending
September 30
Business -Type Activities
Principal Interest
2007
2008
2009
2010
2011
2012-2016
2017-2021
$ 470,000
500,000
530,000
555,000
590,000
3,475,000
4.540,000
$ 594,480
568,763
540,950
511,425
480,525
1,872,413
789.700
T btal
$10.660.000 $5 358.526
45
CITY OF EDGEWA TER, FLORIDA
NOTES TO FINANCIAL STATEMENTS - Continued
September 30, 2006
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 6.0070k until December 1, 1994 and of 5.350/0
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
Collections Loan
Interest rates:
Payment frequency:
Payment amount:
Maturity date:
3.160k to 3.780k
20 annual payments
$516,458
September 30, 2013
3.570k to 3.780k
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 Ending
September 30
Business -Type Activities
Principal Interest
2007
2008
2009
2010
2011
2012-2014
T ctal
$ 1,371,417
1,421,839
1,474,117
1,528,320
1,584,517
4.595.350
$11 975 560
$ 440,021
389,599
337,321
283,119
226,920
322.506
$1 999.486
46
CITY OF EDGEWATER, FLORIDA
NOTES TO FINANCIAL STATEMENTS - Continued
September 30, 2006
Note 8 - Long-Term Debt (Continued):
Notes Payable
The City issued the following revenue notes in a prior year:
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 4.2950/0 at
September 30, 2006 are:
Year Ending Governmental Activities Business Tvpe Activities
SeDtember 30 Principal Interest Principal Interest
2007 $ 254,000 $ 65,456 514,000 132,458
2008 254,000 54,547 514,000 110,382
2009 254,000 43,637 514,000 88,305
2010 254,000 32,728 514.000 66,229
2011 254,000 21,819 514,000 44,153
2012-2013 508,000 10.909 1 ,028,000 22,076
Total $1.778 000 $229.096 U598.000 $463.603
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
year 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, 2006
Note 8 - Long-Term Debt (Continued):
Notes Payable - (Continued)
Debt service requirements for the FIND note payable are as follows:
Year Ending
SeDtember 30
Governmental Activities
Principal Interest
2007
2008
2009
2010
2011
2012
$ 505,657
505,657
505,657
505,656
505,656
505.656
$3.033.939
$
95,822
76,657
57,493
38,329
19. 164
$287 465
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:
5.220/0
April 1, October 1
October 1, 2010
$9,234,660
5.580/0
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-Ad Valorem Revenues
(except Franchise Taxes).
48
CITY OF EDGEWA TER, FLORIDA
NOTES TO FINANCIAL STATEMENTS - Continued
September 30, 2006
Note 8 - Long-Term Debt (Continued):
Notes Payable - (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 I 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-Ad Valorem 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 100/0 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 EDGEWA TER, FLORIDA
NOTES TO FINANCIAL STATEMENTS - Continued
September 30., 20.0.6
Note 8 - Long-Tenn Debt (Continued):
Notes Payable - (Continued)
Annual requirements to amortize the special assessment and stormwater notes are as follows:
Year Ending Governmental Activities Business Tvpe Activities
SeDtember 30 Principal Interest Principal Interest
20.0.7 $ 748,340. $163,0.30. $ 3Q9,4Q7 $ 67,40.6
20.0.8 788,738 122,632 326,110. 5QJ7Q3
20.0.9 831 ,320. 80.,0.50. 343,715 33,0.97
20.10. 876.10.4 35.168 362.225 14,540.
Total $3 244.502 $400.880 $1 341 457 $165.746
During 20.0.3 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.,0.0.0.. A down payment of $150.,0.0.0. was.made in July 20.0.3 and the balance of $60.0.,0.0.0.
is to be paid annually in six payments of $10.0.,0.0.0.. All annual payments are interest free.
Annual debt service requirements are as follows:
Year Ending
Seotember 30
Business- Tvpe Activities
Princioal Interest
20.0.7
20.0.8
20.0.9
Total
$10.0.,0.0.0.
10.0.,0.0.0.
10.0.,0.0.0.
$300. 000
$
$
During 20.0.6 the City signed a limited general obligation note payable for $50.0.,0.0.0. to fund the
construction of a new animal shelter. The note is secured by a limited pledge of ad valorem
taxes. While the note is outstanding, the City will levy ad valorem taxes, not to exceed ~Q6
mills to pay principal and interest on the note. Annual debt service requirements are as
follows:
Year Ending
September 30
Governmental Activities
Principal Interest
20.0.7
20.0.8
20.0.9
20.10.
20.11
20.12-20.16
20.17-20.21
20.22-20.26
Total
$ 15,0.0.0.
15,00.0.
15,0.0.0.
15,0.0.0.
15,0.0.0.
10.0.,0.0.0.
130.,0.0.0.
165.0.0.0.
$470.000
50.
$ 18,0.72
17,495
16,918
16,341
15,765
68,249
47,10.1
19,610.
$219 551
CITY OF EDGEWATER, FLORIDA
NOTES TO FINANCIAL STATEMENTS - Continued
September 30, 2006
Note 8 - Long-Term Debt (Continued):
Changes in Long-Tenn Liabilities
Long-term liability activity for the year ended September 30, 2006 was as follows:
Beginning Ending Due Within
Balance Additions Reductions Balance One Year
Governmental Activities:
Capital lease $ 331 . 122 $196.899 $ (170.477) $ 357.544 $ 135.930
Notes payable -
Revenue note,
Series 2002A 2,032,000 (254,OOO) 1,778,000 254,000
FIND Note 3,539,596 (505,657) 3,0331939 505,657
Generar obligation note 500,000 (30,000) 470,000 15,000
Special assessment
note with government
commitment 3.954.514 (710.012) 3.244.502 748.340
Total notes payable 9.526.110 500.000 ( 1.499.669) 8.526.441 1.522.997
Compensated absences 1.157.022 36.949 (11.679) 1.182.292 118.000
Governmental activity
long-term liabilities $11 014 254 $733 848 $(1 681 825) $10 066 277 $1 776 927
Business-type Activities:
Bonds payable -
Revenue bonds $11,110.000 $ $ (450,000) $10,660,000 $ 470,000
Less deferred amount:
Issuance discount (98.227) 10.178 (88.049)
Total bonds payable 11.011.773 (439.822) 10.571.951 470.000
State revolving loan 13,298,345 (1,322,785) 11,975,560 1,372,417
Capital lease 6,544,290 638,941 (432.411 ) 6,750,820 400,441
Notes payable -
Revenue note,
Series 2002 4,112,000 (514,000) 3,598,000 514,000
Stormwater note 1,635,017 (293,560) 1,341,457 309,407
Terra Mar Note 400.000 (100.000) 300.000 100.000
Total notes payable 6.147.017 (907.560) 5.239.457 923.407
Compensated absences 426.514 19.172 (1.233) 444.453 44.000
Business-type activity
long-term liabilities $37 427 939 $658 113 $(3 103 811 ) $34 982 241 $3 210265
51
CITY OF EDGEWATER, FLORIDA
NOTES TO FINANCIAL STATEMENTS - Continued
September 301 2006
Note 9 - Interfund Receivables, Payables and Transfers:
The composition of due to/from other funds at September 30, 2006 is as follows:
Receivable Fund Pavable Fund Amount
General Grants $ 100,269
Stormwater 1 ,633,366
Water and Sewer 1,013,070
Water and Sewer
Development General 1,012,357
Renewal and
Replacement General 308,354
The outstanding balances between the General Fund and Grants, Water and Sewer, and
Stormwater Funds resulted from working capital loans made by the General Fund which the
General Fund expects to collect in the subsequent year. The outstanding balances between
Water and Sewer Development and Renewal and Replacement Funds and the General Fund
resulted from deposits being put in the wrong bank account and fund during 2005.
Interfund transfers for the year ended September 30, 2006 consisted of the following:
Transfer In
Water
General Debt Nonmajor and Nonmajor
Service Sewer
Fund Fund Governmental Fund Business Total
Transfer Out:
General Fund $ $353,429 $48,712 $ 2,050 $ 333,904 $ 738,095
Nonmajor
Governmental 39,651 11,341 987,745 1,038,737
Water and
Sewer 624,340 318,293 942,633
Nonmajor
Business 20.240 2.070.914 2.091.154
Total $663 991 $353 429 $80 293 $2 072.964 $1 639 942 $4 810619
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.
52
CITY OF EDGEWATER, FLORIDA
NOTES TO FINANCIAL STATEMENTS - Continued
September 30, 2006
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 60/0 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 20k of that average multiplied by years of actual
service up to October 1, 1987, and 30/0 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, 2006
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 2010 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 3010 of that average
multiplied by years of accrual service.
54
CITY OF EDGEWATER, FLORIDA
NOTES TO FINANCIAL STATEMENTS - Continued
September 30, 2006
Note 10 - Defined Benefit Retirement Plans (Continued):
Plan Descriptions - (Continued)
Membership data of the Pension Plans are summarized as follows:
Police General
Officers EmDlovees Firefiahters
Retirees and beneficiaries currently
receiving benefits and vested
terminated employees 21 105 1
Active employees:
Fully vested 21 63 14
Nonvested 12 16
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 50k 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 50/0 of plan net assets. None of the plans held
securiti.es 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 2.50k 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 60/0 of their salary. Contributions provided by the State of Florida are in
accordance with State statutes.
55
CITY OF EDGEWA TER, FLORIDA
NOTES TO FINANCIAL STATEMENTS - Continued
September 30, 2006
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, 2006.
Required supplementary information is as follows:
Schedule of Contributions from the Emplover and Other Contributina Entities
General Emplovees Police Officers Firefiahters
Annual Percentage Annual Percentage Annual Percentage
Year Ended Required of ARC Required of ARC Required of ARC
SeDtember 30 Contribution Contributed Contribution Contributed Contribution Contributed
2001 $360,769 1 000/0 $351,770 1000/0 $140,163 1000A>>
2002 439,160 1 000/0 329,225 1 000/0 140,163 1000A>>
2003 436,006 1 000/0 410,431 1 000/0 146,735 1000A>>
2004 564,582 1 000/0 461, 163 1 000/0 187,083 1000A>>
2005 844,227 1 000/0 448, 179 1 000/0 1811391 1 000~
2006 580,701 1 000/0 378, 127 1 000/0 254,640 1000A>>
Schedule of Fundina Proaress - Police Officers' Retirement Trust Fund
Unfunded
Actuarial (Assets in
Accrued Excess of) AAL
Actuarial Liability (AAL) - Unfunded as a Percentage
Actuarial Value of Frozen Entry (Assets in Funded Covered of Covered
Valuation Assets Age Excess of) AAL Ratio Payroll Payroll
Date {j} fill (b-a) (ab) ~ ((b-al/c)
10/01/00 $3,307,503 $4,861,764 $1,554,261 68.0 $1,041,134 149.2
10/01/01 3,8681547 5,334,718 1,466,171 72.5 980,382 149.5
10/01/02 4,514,711 6,339,886 1,825,175 71.0 1,074,297 170.0
10/01/03 4,995,272 6,954,686 1,959,414 71.9 1,042,103 188.1
10/01/04 5,515,077 7.418,656 11903,579 74.3 1,174,250 162.1
10/01/05 6,400,608 7,849,225 1,448,617 81.5 1, 1331 186 127.8
56
CITY OF EDGEWATER, FLORIDA
NOTES TO FINANCIAL STATEMENTS - Continued
September 30, 2006
Note 10 - Defined Benefit Retirement Plans (Continued):
Schedule of Fundina Proaress -Firefiahters' Retirement Trust Fund
Unfunded
Actuarial (Assets in
Accrued Excess of) AAL
Actuarial Liability (AAL) - Unfunded as a Percentage
Actuarial Value of Frozen Entry (Assets in Funded Covered of Covered
Valuation Assets Age Excess of) AAL Ratio Payroll Payroll
Date !!l ll!l (b-a ) im) ~ ((b-al/c)
10/01/00 $9591259 $959,259 $ 100 632,390 $
10/01/01 1,2871780 1,287,780 100 725,845
10/01/02 1 ,546,480 1,546,480 100 838,351
10/01/03 1,811,751 1,811,751 100 9801792
10/01/04 2, 193,554 2,811,174 6171620 78.03 1,105,165 55.88
10/01/05 2,627,395 3,251 ,236 623,841 80.81 1,419,308 43.95
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, 2005. Additional information applies as follows:
Valuation date
Actuarial cost method
Amortization method
Remaining amortization period
Asset valuation method
Actuarial assumptions:
Investment rate of return
Projected salary increases
(including inflation of 3.00/0)
Retirement age
General Police
EmDlovees Officers Firefiahters
10/01/05 10/01/05 10/01/05
Aggregate Cost Frozen Entry Age Entry Age
N/A Level Percentage Level Precentage
N/A 27 open 30 open
4 Year Smoothed 4 Year Smoothed
Market Value Market Market
7.5OA. 7.25OA. 7.50/0
7.5% 7.50/0 7.5OJ'c.
55 and 5 years of 55 with 5 years of 55 with 5 years of
plan participation or accrued service accrued service or
25 years of plan or after 20 years after 20 years of
participation, of accrued accrued service
whichever is service
earliest
57
CITY OF EDGEWA TER, FLORIDA
NOTES TO FINANCIAL STATEMENTS - Continued
September 30, 2006
Note 10 - Defined Benefit Retirement Plans (Continued):
Notes to the Required Supplementary Information - (Continued)
As noted above, the General Employees plan uses 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
and Firefighters Plan use the frozen entry age actuarial cost method, a schedule of funding
progress has been presented above. The Firefighter Plan changed from the aggregate
actuarial cost method to the entry age actuarial method, therefore the schedule of funding
progress on the previous page does not report unfunded actuarial accrued liability for
actuarial valuation dates prior to October 1, 2004.
Note 11 - Defined Contribution Pension Plans:
General Employees - The City adopted a defined contribution plan effective October 11
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 120/0 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
0/0 Contributed for
Earnings Prior to
October 1 J 1996
0/0 Contributed for
Earnings After
October 1, 1996
3 months - 2 years
2 years - 4 years
4 years - 5 years
100/0
11
12
120/0
12
12
Employees are 1000/0 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 $222,062. The City Council has the authority to amend the
Plan's provisions including amending contribution requirements.
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, 2006. 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.
58
CITY OF EDGEWA TER, FLORIDA
NOTES TO FINANCIAL STATEMENTS - Continued
September 30, 2006
Note 12 - Commitments and Contingencies (Continued):
Risk Management - The City is exposed to various risks of .Ioss 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 900/0 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.
Note 13 - Joint Venture:
On January 111 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 r 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 50010, 250/0 and 250/0. 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 $40,745 at September 30, 2006. The net investment in
the joint venture increased $7,757 from September 30, 2005. Complete financial
statements for the CI Agency are available upon request.
59
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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, 2006
Variance With
Final Budget
Budgeted Amounts Actual Positive
Original Final Amounts (Negative)
Revenues:
Impact fees! special assessments $ 890,000 $ 890,000 $ 433,349 $ (456,651 )
Investment income 197,000 197,000 131,727 (65,273)
Total revenues 1,087,000 1,087,000 565,076 (521,924)
Expenditures:
Debt service:
Principal retirement 1,797,122 1.797,122 710,013 1,087,109
Interest and fiscal charges 201.358 201,358 204,114 (2.756)
Total expenditures 1,998,480 1,998.480 914,127 1,084,353
Excess (Deficiency) of
Revenues Over Expenditures (911,480) (911,480) (349,051 ) 562,429
Other Financing Sources (Uses)
Transfers in 940,539 940,539 3531429 (587,110)
Net other financing sources (uses) 940,539 940,539 353,429 (587,110)
Net Change in Fund Balance 29.059 29,059 4,378 (24,681 )
Fund Balances - Beginning 255,589 255,589 255,589
Fund Balances - Ending $ 284,648 $ 284,648 $ 259,967 $ (24,681 )
60
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Special Law Enforcement
Trust Fund
Police Impact Fees Fund
Fire Impact Fees Fund
Recreation Impact Fees
Fund
LLEBG Fund
Grants Fund
Road 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.
- This fund was established to account for LLEBG grant
funds.
- This fund was established to account for restricted grant
funds.
- This fund was established to account for road 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, 2006
Special Revenue
Special Law Police Fire Recreation
Enforcement Impact Impact Impact
Trust Fees Fees Fees
Assets:
Cash and cash equivalents $ 13,076 $ 161,392 $ 393,987 $ 228,480
Investments
Accounts receivable 12,790
Total Assets $ 13,076 $ 161.392 $ 3931987 $ 241,270
Liabilities and Fund Balances:
Liabilities:
Accounts payable $ $ 1,286 $ 1,286 $
Deferred reven ue
Due to other funds
Total Liabilities 1,286 1,286
Fund Batances:
Unreserved 13,076 160,106 392,701 241,270
Total Fund Balances 13,076 160,106 392,701 241,270
Total Liabilities and Fund Balances $ 1 3,076 $ 161,392 $ 393,987 $ 241,270
61
Special Revenue Total
Road Nonmajor
Impact Capital Governmental
LLEBG Grants Fees Total Projects Funds
$ 66 $ $ 494,211 $ 1,291.212 $ 473,318 $ 1,764,530
508,550 508.550
179,854 192,644 192,644
$ 66 $ 179,854 $ 494,211 $ 1 ,483,856 $ 981,868 $ 2,465,724
$ $ 684 $ $ 3,256 $ 3,781 $ 7,037
100,269 100,269 100,269
100,953 103,525 3,781 107,306
66 78,901 494,211 1,380,331 978,087 2,358,418
66 78.901 494,211 1,380,331 978,087 2,358,418
$ 66 $ 179,854 $ 494,211 $ 1,483,856 $ 981,868 $ 2,465,724
62
CITY OF EDGEWATER, FLORIDA
COMBINING STATEMENT OF REVENUES.
EXPENDITURES AND CHANGES IN FUND BALANCES
NONMAJOR GOVERNMENTAL FUNDS
For The Year Ended September 30, 2006
Special Revenue
Special Law Police Fire Recreation
Enforcement Impact 1m pact Impact
Trust Fees Fees Fees
Revenues:
Intergovernmental revenues $ $ $ $
Fines and forfeitures 1 0,502
Impact fees/special assessments 50,992 55,138 98,361
Investment income 1
Miscellaneous 163 99
Total revenues 10,666 50,992 551138 98,460
Expenditures:
Cu rrent:
General government
Public safety 40.367
leisure services 159,859
Capital outlay:
Public safety
Transportaion/public works
Total expenditures 40,367 159,859
Excess(Deficiency) of Revenues
Over Expenditures (29,701) 501992 55, 138 (61.399)
Other Financing Sources(Uses):
General obligation note
Capital lease
Transfers in
Transfers out ( 1 ,581 ) (4,000) (4,000) (9,760)
Net other financing sources(uses) ( 1,581 ) (4,000) (4,000) (9,760)
Net Change in Fund Balances (31,282) 46,992 51, 138 (71, 159)
Fund Balances.. Beginning 441358 113, 114 341.563 312,429
Fund Balances - Ending $ 13,076 $ 160,106 $ 392,701 $ 241.270
63
Special Revenue Total
Road Nonmajor
Impact Capital Governmental
LLEBG Grants Fees Total Projects Funds
$ 81419 $ 793,831 $ $ 802,250 $ $ 802,250
1 0,502 10,502
330,081 534,572 534,572
1 34.432 34,433
262 262
8.419 793,831 330.081 1,347,587 34.432 1,382,019
33,885 33,885 33,885
91934 236,414 286,715 286,715
226, 145 386,004 386,004
217,139 217, 139
87,393 87,393
9.934 496,444 706,604 304,532 1 ,0 11, 1 36
(11515) 297,387 330,081 640,983 (270.100) 370.883
500,000 500,000
196,899 196,899
1,581 58,472 60,053 20,240 80,293
(355.251 ) (4,000) (378,592) (660,145) (1,038,737)
1.581 (296,779) (4,000) (318,539) 56.994 (261.545)
66 608 326,081 322,444 (213,106) 109,338
78,293 168,130 1,057,887 1 , 191, 193 2,249,080
$ 66 $ 78,901 $ 494,211 $ 1,380,331 $ 978,087 $ 2,358,418
64
CITY OF EDGEWATER, FLORIDA
SPECIAL LAW ENFORCEMENT TRUST SPECIAL REVENUE FUND
SCHEDULE OF REVENUES. EXPENDITURES AND
CHANGES IN FUND BALANCES - BUDGET AND ACTUAL
For The Year Ended September 30, 2006
Variance with
Budgeted Amounts Final Budget-
Actual Positive
Original Final Amounts (Negative)
Revenues:
I ntergovern mental reven ues $ $ $ $
Fines and forfeitures 12,000 12,000 10,502 (1.498)
Impact fees/special assessments
Investment income 500 500 1 (499)
Miscellaneous 163 163
Total revenues 12,500 121500 10.666 (1,834)
Expe n d itures :
Current:
General government
Public safety 12,500 10,919 40,367 (29,448 )
Leisure services
Transportation/public works
Capital outlay:
Public safety
Transportation/public works
Total expenditures 12,500 10.919 40,367 (29,448)
Excess(Deficiency) of Revenues
Over Expenditures 1.581 (29,701 ) (31,282)
Other Financing Sources(Uses):
General obligation note
Capital lease
Transfers in
Transfers out ( 1. 581 ) (1,581)
Net other financing sources(uses) ( 1.581 ) (1 ,581 )
Net Change in Fund Balance (31.282) (31,282)
Fund Balances - Beginning 44,358 44.358 441358
Fund Balances - Ending $ 44,358 $ 44,358 $ 13,076 $ (31,282)
65
CITY OF EDGEWATER, FLORIDA
POLICE IMPACT FEES SPECIAL REVENUE FUND
SCHEDULE OF R"EVENUES, EXPENDITURES AND
CHANGES IN FUND BALANCES -- BUDGET AND ACTUAL
For The Year Ended September 301 2006
Variance with
Budgeted Amounts Final Budget-
Actu a I Positive
Original Final Amounts (Negative )
Revenues:
Intergovernmental revenues $ $ $ $
Fines and forfeitures
Impact fees/special assessments 36,250 36,250 50,992 14,742
Investment income
Miscellaneous
Total revenues 36,250 36,250 50.992 14,742
Expenditures:
Current:
General government
Public safety 14,877 14,877
lejsure services
Transportation/public works
Capital outlay:
Public safety
Transportation/public ___yorks
Total expenditures 14,877 14,877
Excess(Deficiency) of Revenues
Over Expenditures 36,250 21,373 50,992 29.619
Other Financing Sources(Uses):
Generar obligation note
Capital lease
Transfers in
Transfers out (4,000) (4,000) (4,000)
Net other financing sources(uses) (41000) (4,000) (4,000)
Net Change in Fund Balance 32,250 17,373 46,992 29,619
Fund Balances.. Beginning 113,114 113,114 113,114
Fund Balances.. Ending $ 145,364 $ 130,487 $ 160,106 $ 29,619
66
CITY OF EDGEWATER, FLORIDA
FIRE IMPACT FEES SPECIAL REVENUE FUND
SCHEDULE OF REVENUES. EXPENDITURES AND
CHANGES IN FUND BALANCES - BUDGET AND ACTUAL
For The Year Ended September 30, 2006
Variance with
Budgeted Amounts Final Budget-
Actual P os itive
Original Final Amounts (Negative)
Revenues:
Intergovernmental revenues $ $ $ $
Fines and forfeitures
Impact fees/special assessments 80.250 80,250 55,138 (25,112)
Investment income
Miscellaneous
Total revenues 80,250 80.250 55. 138 (25,112)
Expenditures:
Current:
General government
Public safety
Leisure services
Transportation/public works
Capital outlay:
Public safety
Transporta tio n/pub I i c works
Total expenditures
Excess(Deficiency) of Revenues
Over Expenditures 80,250 801250 55,138 (25,112)
Other Financing Sources(Uses):
General obligation note
Capital lease
Transfers in
Transfers out (4,000) (4,000) (4.000)
Net other financing sources(uses) (4.000) (4.000) (4,000)
Net Change in Fund Balances 761250 76,250 51, 138 (25,112)
Fund Balances - Beginning 341,563 341,563 341.563
Fund Balances - Ending $ 417,813 $ 417,813 $ 392,701 $ (25,112)
67
CITY OF EDGEWATER, FLORIDA
RECREATION IMPACT FEES SPECIAL REVENUE FUND
SCHEDULE OF REVENUES, EXPENDITURES AND
CHANGES IN FUND BALANCES - BUDGET AND ACTUAL
For The Year Ended September 30, 2006
Variance with
Budgeted Amounts Final Budget-
Actual Positive
Original F in a I Amounts (Negative)
Revenues:
Intergovernmental revenues $ $ $ $
Fines and forfeitures
Impact fees/special assessments 1471000 147,000 98,361 ( 48,639)
Investment income
Miscellaneous 99 99
Total revenues 147,000 147,000 98,460 (48,540)
Expenditures:
Current:
General government
Public safety
Leisure services 263,475 263,475 159,859 103,616
Transportation/public works
Capital outlay:
Public safety
Transportation/public works
Total expenditures 263,475 263,475 159,859 103,616
Excess(Deficiency) of Revenues
Over Expenditures (116,475) (116,475) (61,399) 55,076
Other Financing Sources(Uses):
General obligation note
Capital lease
Transfers in
Transfers out (9,760) (9,760)
Net other financing sources(uses) (9,760) (9,760)
Net Change in Fund Balances (116,475) (116,475) (71,159) 45.316
Fund Balances.. Beginning 312,429 312,429 312,429
Fund Balances. Ending $ 195,954 $ 195,954 $ 2411270 $ 45,316
68
CITY OF EDGEWA TER, FLORI DA
LLEBG SPECIAL REVENUE FUND
SCHEDULE OF REVENUES, EXPENDITURES AND
CHANGES IN FUND BALANCES - BUDGET AND ACTUAL
For The Year Ended September 30, 2006
Variance with
Budgeted Amounts Final Budget-
Actual Positive
Original Final Amounts (Negative)
Reven ues:
I nte rgove rnme ntal reve nues $ $ $ 8,419 $ 8,419
Fines and forfeitures
Impact fees/special assessments
Investment income
Miscellaneous
Total revenues 8,419 8,419
Expenditures:
Current:
General government
Public safety 91934 (9,934)
Leisure services
T ransportation/publ ic works
Capital outlay:
Public safety
T ra nsportation/pub I i c works
Total expenditures 9,934 (9,934)
Excess(Deficiency) of Revenues
Over Expenditures (1,515) (1,515)
Other Financing Sources(Uses):
General obligation note
Capital lease
Transfers in 1,581 ( 1, 581 )
Transfers out
Net other financing sources(uses) 1,581 (1,581)
Net Change in Fund Balances 66 (3,096)
Fund Balances - Beginning
Fund Balances - Ending $ $ $ 66 $ (3,096)
69
CITY OF EDGEWA TER, FLORIDA
GRANTS SPECIAL REVENUE FUND
SCHEDULE OF REVENUES, EXPENDITURES AND
CHANGES IN FUND BALANCES - BUDGET AND ACTUAL
For The Year Ended September 30, 2006
70
CITY OF EDGEWA TER, FLORIDA
ROAD IMPACT FEES SPECIAL REVENUE FUND
SCHEDULE OF REVENUES. EXPENDITURES AND
CHANGES IN FUND BALANCES - BUDGET AND ACTUAL
For The Year Ended September 30, 2006
Variance with
Budgeted Amounts Final Budget-
Actual Positive
Original Final Amounts (Negative)
Revenues:
Intergovernmental revenues $ $ $ $
Fines and forfeitures
Impact fees/special assessments 400,000 400,000 330,081 (69,919)
Investment income
Miscella neous
Total revenues 400,000 400,000 330,081 (69.919)
Expenditures:
Current:
General government
Public safety
Leisure services
Transportation/public works 396,000 3961000 3961000
Capital outlay:
Public safety
T ra nsportatio n/pub I ic works
Total expenditures 396,000 396,000 396,000
Excess(Deficiency) of Revenues
Over Expenditures 4,000 4,000 330,081 326,081
Other Financing Sources(Uses):
General obligation note
Capital lease
Transfers in
Transfers out (4,000) (4,000) (4,000)
Net other financing sources(uses) (4,000) (4,000) (4,000)
Net Change in Fund Balances 326,081 326,081
Fund Balances - Beginning 168,130 168,130 168,130
Fund Balances - Ending $ 168,130 $ 168,130 $ 494,211 $ 326,081
71
CITY OF EDGEWATER, FLORIDA
CAPITAL PROJECTS FUND
SCHEDULE OF REVENUES, EXPENDITURES AND
CHANGES IN FUND BALANCES - BUDGET AND ACTUAL
For The Year Ended September 30, 2006
Variance with
Budgeted Amounts Final Budget..
Actual Positive
Original Final Amounts (Negative)
Revenues:
Intergovernmental revenues $ $ $ $
Fines and forfeitures
Impact fees/special assessments
Investment income 34,432 34,432
Miscellaneous
Total revenues 34,432 34,432
Expenditures:
Current:
General government
Public safety
Leisure services
Transportation/public works
Capital outlay:
Public safety 217,139 (217,139)
Transportation/public works 600,000 600,000 87,393 5121607
Total expenditures 600,000 600,000 304,532 295,468
Excess(Deficiency) of Revenues
Over Expenditures (600 t 000) (600,000) (270,100) 329,900
Other Financing Sources(Uses):
Gene ra lobi igation note 500.000 500,000
Capita/lease 196,899 196,899
Transfers in 150,000 150,000 20,240 (129,760)
Transfers out (600,000) (600,000) (660,145) (60,145)
Net other financing sources(uses) (450,000) (450,000) 56.994 506,994
Net Change in Fund Balances (1,050,000) (1,050,000) (213,106) 836,894
Fund Balances.. Beginning 1 , 191, 193 1, 191. 193 1 J 191.193
Fund Balances.. Ending $ 1411 193 $ 141 , 193 $ 978,087 $ 836,894
72
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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
CityJs 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
September 30, 2006
Stormwater Water and Sewer Renewal and Total Nonmajor
Management Development Replacement Proprietary
Fund Fee Fund Fund Funds
Assets
Current assets:
Receivables, net $ 102,912 $ 28, 196 $ $ 1311108
Due from other governments 158,570 158,570
Due from other funds 1,012,357 308,354 1,320,711
Total current assets 261,482 1,040,553 308,354 1,610,389
Noncurrent assets:
Restricted cash and cash
equivalents 2,075,280 65, 158 2,140,438
Bond issuance costs 3,272 3,272
Capital assets:
Land, buildings and equipment 8,457,693 8,457,693
Construction in progress 14,193 14,193
Less accumulated depreciation ( 1,832,684) (1,832,684 )
Total capital assets (net of
accumulated depreciation) 6,639,202 61639,202
Total noncurrent assets 6,642,474 2,075,280 65. 158 8,782,912
Total assets 6,903,956 3, 115,833 373,512 10,393,301
Liabilities
Current liablities:
Accounts payable 24,477 130,999 117,811 273,287
Accrued liabilities 8,487 8,487
Retainage payable 981604 98,604
Compensated absences 38, 138 38, 138
Due to other funds 1,633,366 1 ,633,366
Capital leases payable-cu rrent 27,344 27,344
Notes paya ble-cu rrent 309,407 3091407
Total current liabilities 2,041,219 229,603 117,811 2,388,633
Noncurrent liabilities:
Capital leases payable 66,057 66.057
Notes payabJe 1,032,050 11032,050
Total noncurrent liabilities 1,098,107 1,098.107
Total liabilities 3,139,326 229,603 117,811 3,486,740
Net Assets
Invested in capital assets, net
of related debt 5,204,344 5,204,344
Restricted for capital projects 2,886,230 255,701 31141,931
Unrestricted {1,439,714} (1,439,714)
T atal net assets $ 3,764,630 $ 2,886.230 $ 255,701 $ 6,906,561
73
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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 September 30, 2006
Stormwater Water and Sewer Renewal and Total Nonmajor
Management Development Replacement Proprietary
Fund Fee Fund Fund Funds
Operating Revenues
User Charges $ 917,703 $ $ $ 917,703
Operating Expenses
Salaries and benefits 393,217 393,217
Materials and supplies 122,037 122,037
Depreciation and amortization 256,415 256,415
Contractual services 158,364 43,695 12,390 214,449
Total operating expenses 930,033 43,695 12,390 986,118
Operating income(loss) (12,330) (43,695) (12,390) (68,415)
Nonoperating Revenue
Grant revenue 158,570 158,570
Miscellaneous income 11 ,584 56,992 68,576
Investment income 144,242 3,425 147,667
Interest expense (871085) (87,085)
Total nonoperating revenue 83,069 201,234 3,425 287,728
Income before contributions
and transfers 701739 157,539 (8,965) 219,313
Capital contibutions:
Development fees 2,303,975 2,303,975
Transfers in 1,270,468 369,474 1,639,942
Transfers out (1,694,868) (396,286) (2,091 t 154)
Change in net assets 1,341,207 766,646 (35,777) 2,072,076
Total Net Assets.. Beginning 2,423,423 2,119,584 291 ,478 4,834,485
Total Net Assets - Ending $ 3,764,630 $ 2,886,230 $ 255,701 $ 6,906,561
74
CITY OF EDGEWATER, FLORIDA
COMBINING S1 A 1EMEN1 OF CASH FLOWS
NONMAJOR PROPRIETARY FUNDS
For The Year Ended September 30, 2006
Stormwater Water and Sewer Renewal and Total Nonmajor
Management Development Replacement Proprietary
Fund Fee Fund Fund Funds
Cash Flows from Operating Activities:
Receipts from customers $ 907,785 $ $ $ 907,785
Payments to suppliers (266,366) 123,963 104,791 (37,612)
Payments to employees (387,724 ) (387,724)
Net cash provided (used) by operating
activities 253,695 123,963 104,791 482,449
Cash Flows from Non-Capital
Financing Activities:
(Increase) in due from other funds (158,570) (158,570)
Increase (decrease) in due to other funds 840,065 (376,449) (16,246) 447,370
Grant revenue 158,570 1581570
Miscellaneous income 11,584 56,992 68,576
T ra nsfers in 1,270,468 369,474 1,639,942
Transfers out (1 ,694,868) (396,286) (2,091,154)
Net cash provided (used) by non-capital
financing activities 2,122,117 (2,014,325) (43,058) 64,734
Cash Flows from Capital and Related
Financing Activities:
Proceeds from sale of capital assets 87 87
Acquisition of capital assets (21042.664) (2,042,664)
Principal paid on long-term debt (329,767) (329,767)
Capital lease proceeds 83,617 83,617
Interest paid on long-term debt (87,085) (87,085)
Development fees received 2,303,975 2,303.975
Net cash provide (used) by capital and
related financing activities (2,375,812) 2j303,975 (71,837)
Cash Flows from Investing Activities:
Investment income 144,242 3,425 147,667
Net cash provided by investing activities 144,242 3,425 147,667
Net Increase (Decrease) in Cash and
Cash Equivalents 557,855 65,158 623,013
Cash and Cash Equivalents - Beginning 1,517,425 1.517,425
Cash and Cash Equivalents - End $ $ 2,075,280 $ 65,158 $ 2,140,438
Classified As:
Cash and cash equivalents $ $ $ $
Restricted cash a nd cash equivalents 2,075,280 65, 158 2,140,438
$ $ 2,075,280 $ 65,158 $ 2.140,438
75
Storm water Water and Sewer Renewal and Total Nonmajor
Management Development Replacement Proprietary
Fund Fee Fund Fund Funds
Reconciliation of Operating Income
(Loss) to Net Cash Provided By
Operati ng Activities
Operating income (loss) $ (12,330) $ (43,695) $ (12,390) $ (68,415)
Adjustments Not Affecting Cash:
Depreciation and amortization 256,415 256,415
Change in Assets and Liabilities:
(Increase) decrease in accounts receivable (9,917) (9,917)
(Decrease) in accounts payable 14,035 126,046 117,181 257,262
Increase (decrease) in retainage payable 41,612 41,612
Increase in accrued liabilities 6,725 6,725
(Decrease) in accrued compensated absences (1 ,233) ( 1,233)
Total adjustments 266,025 167,658 117,181 550,864
Net Cash Provided by Operating
Acti vities $ 253,695 $ 123,963 $ 104,791 $ 4821449
76
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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 EDGEWA TER, FLORIDA
COMBINING STATEMENT OF FIDUCIARY NET ASSETS
FIDUCIARY FUNDS
September 30, 2006
General Police Totals
Employees Officers Firefighters Employee
Pension Trust Pension Trust Pension Trust Pension Funds
Assets:
Investments, at fair value:
Debt mutual funds $ 6,538,192 $ 3,766,190 $ 2,7071802 $ 1 3 t 012, 184
Equity mutual funds 6,744,615 3,263,743 669,526 10,677,884
Total investments 13,282,807 7,029,933 3,377,328 23,690,068
Total assets 13,282,807 7,029,933 3,377,328 23,690,068
Liabilities:
Accounts payable 1,034 1,034
Net Assets Held in Trust for
Pension Benefits $ 13,281,773 $ 7,029,933 $ 3,377,328 $ 23,689,034
77
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CITY OF EDGEWATER, FLORIDA
COMBINING STATEMENT OF CHANGES IN FIDUCIARY NET ASSETS
FIDUCIARY FUNDS
For The Year Ended September 30, 2006
General Police Total
Employees Office rs F i refi g hte rs Employee
Pension Trust Pension Trust Pension Trust Pension Funds
Additions:
Contributions:
Employer $ 580,638 $ 262,668 $ 254,711 $ 1,098,017
Plan members 67,289 86,413 88,349 242,051
State 119,225 83,487 202,712
Total contributions 647,927 468,306 426,547 1,542,780
Investments income:
Net increase in fair value 974.790 427,450 232,311 1,634,551
Net investment income 974,790 427,450 232,311 1,634,551
Total additions 1,622,717 895,756 658,858 3,177,331
Deductions:
Be nefit sl distri but ion s 626,285 299.667 925,952
Administrative expenses 20.709 32,440 32,921 86,070
Total deductions 646,994 332,107 32,921 1,012,022
Change in Net Assets 975,723 563,649 625,937 2,165,309
Net Assets Held in Trust for
Pension Benefits:
Beginning of Year 12,306,050 6,466,284 2,751,391 21,523,725
End of Year $ 13,281,773 $ 7,029,933 $ 3,377,328 $ 23,689,034
78
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CAPITAL ASSETS USED IN THE
OPERATION OF GOVERNMENTAL FUNDS
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CITY OF EDGEWA TER, FLORIDA
CAPITAL ASSETS USED IN THE OPERATION OF
GOVERNMENTAL FUNDS
SCHEDULE BY FUNCTION AND ACTIVITY
For the Year Ended September 30,2006
General
Government
Public
Safety
Public
Works
Leisure
Services
Total
Land $ 1,934,540 $ 105,591 $ 6,906 $ 1,732,399 $ 3,779,436
Buildin,gs 178,538 1,225,060 58,268 2,895,746 4,3571612
Improvements 108,827 25,905 13,039,503 2,147,044 15,321,279
Machinery & equipment 451,041 21700,846 254,671 602,890 4,0091448
Infra stru ct u re 1,169,975 1 ,169,975
Construction in
progress 118,103 1.398,660 845,603 2,362,366
Total $ 2,672,946 $ 4,175,505 $15,927,983 $ 8,223,682 $ 31,000,116
Deletions
Balance and Balance
09-30-05 Additions Transfers 09-30-06
General Government $ 2,588,692 $ 104,139 $ 19,885 $ 2,672,946
Public Safety 31660,696 571,665 56,856 4,175,505
Public Works 15,499,673 681,330 253,020 15,927,983
Leisure Services 7,755,487 552,010 83,815 8,223,682
Total $ 29,504,548 $ 1,909,144 $ 413,576 $ 31,000,116
79
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STATISTICAL SECTION
This part of the City of Edgewater's comprehensive annual financial report presents detailed
information as a context for understanding what the information in the financial statements, note
disclosures, and required supplementary information says about the government's overall
health.
Contents
Paae
Financial Trends
81
These schedules contain trend information to help the reader
understand how the government's financial performance and
well-being have changed over time.
Revenue Capacity
86
These schedules contain information to help the reader assess
the government's most significant local revenue source, the
property tax.
Debt Capacity
90
These schedules present information to help the reader assess
the afford ability of the government's current levels of
outstanding debt and the government's ability to issue additional
debt in the future.
Demographic and Economic Information
95
These schedules offer demographic and economic indicators to
help the reader understand the environment within which the
government's financial activities take place.
Operating Information
98
These schedules contain service and infrastructure data to help
the-. reader understand how the information in the government's
financial report relates to the services the government provides
and the activities it performs.
80
City of Edgewater, Florida
Net Assets by Component
Last Four Fiscal Years
(Accruat Basis of Accounting)
2003
Fiscal Year
2004 2005
2006
Governmental Activities
Invested in Capital Assets, Net of Re\ated Debt $ 6,010,568 $ 8,207,197 $ 9,283,844 $ 10,790,015
Restricted 5,309,445 4,168,822 3,760,701 3,547,595
Unrestricted 169,883 396,934 1,165,791 2,109,332
Total Governmental Activities Net Assets 11,489,896 12,772,953 14,210,336 16,446,942
Business - Type Activities
Invested in Capita' Assets, Net of Related Debt 13,185,840 16,796,965 18,641,079 23,188,819
Restricted 4,627,937 3,158,533 3,567,108 4,344,362
Unrestricted 15,688,777 12,161,692 9,332,979 6,732,197
Total Business-Type Activities Net Assets 33,502,554 32,117,190 31,541,166 34,265,378
Primary Government
Invested in Capital Assets, Net of Related Debt 19,196,408 25,004,162 27,924,923 33,978.833
Restricted 9,937,382 7,327,355 7,327,809 7,891,957
Un res tricted 15,858,660 12,558,626 10,498,770 8,841,530
Total Primary Government Net Assets $44,992,450 $44,890,143 $ 45,751,502 $ 50,712,320
Note: Information not available for years prior to implementation of GASB 34 in 2003.
81
City of Edgewater1 Florida
Changes in Net Assets
Last Four Fiscal Years
(Accrual Basis of Accounting)
Fiscal Year
2003 2004 2005 2006
Expenses
Governmenta I Activities:
General Government $ 2,4781672 $ 2,227,242 $2,801,030 $ 3,338,289
Public Safety 5,670,853 6,212,610 6,235.432 6,259,632
Transportation I Public Works 2,765,177 1,257.545 725,242 643,943
Leisure Services 1,573.582 1,572,699 1,727,507 1,511,621
Interest on Long-Term Debt 356,159 324,137 310,433 291 ,830
Total Governmental Activities Expenses 12,844.443 11.594,233 11.799,644 12,045,315
Business - Type Activities:
Water and Sewer 6,253,322 6,681,657 7.286.4 75 7,997,538
Refuse Conection 1,565,664 4,288,882 2,951,045 2,067,329
Stormwater Management 882.456 929,433 935,770 1,017,118
Development Fees 31 ,180 68.515 100,331 43,695
Renewal and Replacement 650 171,999 248.506 12,390
Total Business ~ Type Activities 8,733,272 12,140,486 11,522,127 11,138,070
Total Primary Government 21,577,715 23,734,719 23,321,771 23,183,385
Program Revenues
Governmental Activities:
General Government 176,881 188,791 294,176 327,113
Public Safety 335.753 296,947 476,050 583,840
Transportation I Public Works 616,394 783,766 750,284 731,819
Leisure Services 130,192 150,256 229,995 137.053
Interest on Long-Term Debt
Operating Grants and Contributions 401,116 951.863 574,193 505,161
Capital Grants and Contributions 192,861 487,060 326.163 8451639
Total Governmental Activities Program Revenues 1,853.197 2,858.683 2,650,861 3,130,625
Business - Type Activities:
Water and Sewer 4,808,221 5,403,409 6,112,326 61597,883
Refuse Collection 1,737,454 1,946,298 2,085,965 2,242.197
Stormwater Management 824,559 886,848 953,752 917,703
Development Fees
Renewal and Replacement 1,300 183,167
Operating Grants and Contributions 2,303,189 1.224,518 272,580
Capital Grants and Contributions 3,047,057 989,665 1.218,691 2,438,556
Total Business - Type Activities Program Revenues 10,417,291 11,530.709 11 ,778.4 19 12,468,919
Total Primary Government Program Revenues 12,270,488 14,389,392 14,429,280 15,599.544
Net (Expense) Revenue
Governmental Activities (10,991,246) (8,735,550) (9,148,783) (8,914,690)
Business - Type Activities 1,684,019 (609,777) 256,292 1,330,849
Total Primary Government Net Expense (9,307,227) (9,345,327) (8,892.491 ) (71583,841)
General.Revenues.and Other Changes in Net Assets
Governmental Activities:
Taxes
Property Taxes 3.403,304 3,884,932 4.125,604 5,045,677
Franchise fees and Utility taxes 2,555,819 2.615,188 2,721,040 3,098,230
I ntergovernmenta I 1,627,439 1,746.746 1,901,135 1,952,077
Investment Income and Miscellaneous 298,967 359,091 468.314 1,734,431
Transfers 751,758 1,412,650 1,370,073 (679,119)
Total Govemmental Activities 8,637,287 10,018,607 10,586,166 11,1 51 ,296
Business - Type Activities
Investment Income and miscellaneous 661,124 637,063 537,757 714,244
T ra nsfers {751 ,758) (1,412,650) (1,370,073) 679,119
Total Business - Type Activities (90,634) (775,587) (832,316) 1,393,363
Total Primary Government 8,546.653 9,243,020 9,753,850 12,544,659
Change in Net Assets
Govermenta I Activities (2,353,959) 1 .283,057 1.437,383 2,236,606
Business - Type Activities 1,593,385 (1,385.364) (576,024) 2,724,212
Total Primary Government $ (760.574) $ (102,307) $ 861,359 $ 4,960,818
Note: Information not available for years prior to implementation of GASB 34 in 2003.
82
City of Edgewater
Governmental Activities Tax Revenues by Source
Last Ten Fiscal Years
(accrual basis of accounting)
Franchise Fees
Year Property Taxes and Utility Tax Total
1997 * * $ 5,484,239
1998 * * 5,516,973
1999 * * 5,516,973
2000 * * 5,648,694
2001 * * 6,189,561
2002 2,704,707 21425,766 5,130,473
2003 3,403,304 2,555,819 5,959, 123
2004 3,884,932 2,615,188 6,500,120
2005 4,125,604 2,721,040 6,846,644
2006 5,045,677 3,098,230 8,143,907
· Detail information is not available.
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CITY OF EDGEWA TER, FLORIDA
ASSESSED VALUE AND ESTIMATED ACTUAL VALUE OF TAXABLE PROPERTY (1)
LAST TEN FISCAL YEARS
(In Thousands)
Ratio of Total
(3) (2) Assessed to
(2) (3) (3) Centrally (3) Total Estimated Taxable Value
Fisca I Real Personal Assessed Assessed Direct Tax Actual To Estimated
Year Property Property Property Taxable Value Rate Taxable Value Actual Value
1997 353,593 28,892 1,276 383,761 6.5900 542,399 70.750/0
1998 368,611 29,824 1,626 400,061 6.4400 561,103 71.300/0
1999 372,715 29,227 1,577 403,519 6.2900 572,804 70.450/0
2000 381,848 30,422 1,681 413,951 5.9500 589,101 70.270/0
2001 408,483 34,759 1,772 445,014 5.9500 632,205 70.390/0
2002 434.231 33,568 1,788 469,587 5.9500 694,658 67.600/0
2003 470,551 33,585 1,900 506,036 6.9500 842,981 60.030/0
2004 539,239 36,263 2,076 577,578 6.4500 974,165 59.290/0
2005 624,264 37,713 2,160 664,137 6.4500 1,009,447 65.79OA,
2006 770,564 40,133 2,247 812,944 6.5100 1,264,484 64.29OA,
(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.
86
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Principal Property Tax Payers
September 30, 2006
2006 1997
Percentage of Percentage of
Taxable Total Taxable Taxable Total Taxable
Taxpayer Assessed Value Rank Assessed Value Assessed Value Rank Assessed Value
Florida Power & Light Company $ 12,106,829 1 1.110/0 $ 7,149,250 1 1.320/0
Worthington Creek Invest, LLC. 8,815,520 2 0.810/0
Edgewater Harbor, LLC. 5,372,617 3 0.490/0
Adams Homes of NW FL, Inc. 5,304,000 4 0.490/0
3050 Holdings, LLC. 4,580,852 5 0.420/0 5,5581723 2 1.020/0
Bright House Networks, LLC. 4,489,634 6 0.410/0
Spishores, LLC. 4,466,897 7 0.410/0
308 Realty, LLC. 4,453,986 8 0.410/0
Carder James C & Rosemary TR 4,362,111 9 0.400/0
GDP Development, Inc. 4,079,866 10 0.37OIb
Coronado Paint Company, Inc. 4,432,715 3 0.820/0
Aid Association for Lutherans 3,246,387 4 0.6001b
Michael P. Conner Trustee 3,216,300 5 0.590/0
Tannac Florida, Inc. 1,903,500 6 0.350/0
First Federal Savings and Loan Assoc. 1,875,035 7 0.350/0
Cablevision Industries of Central FL 11700,378 8 0.310/0
Bel Aire Investements, Inc. 1,4821860 9 0.270/0
Publix Supermarkets, Inc. 1, 123,402 10 0.210/0
$ 581032,312 5.330/0 $ 31,688,550 5.840/0
Source: 2006 ad valorem tax rolls of the City of Edgewater, Florida. DR-403AM
FY - 2006 total assessed valuation
FY .. 1997 total assessed valuation
$ 1,089.419,000
$ 542,399,246
88
CITY OF EDGEWATER, FLORIDA
PROPERTY TAX LEVIES AND COLLECTIONS
LAST TEN FISCAL YEARS
Collected within the
(1 ) Fiscal Year of the Levy Total Collections to Date
Total tax Collections in
Fiscal Levy for Percentage Subsequent Percentage
Year Fiscal Year Amount of Levv Years Amount of Levv
1997 $ 2,528,985 $ 2,440,210 96.490/0 $ - $ 2,440,210 96.490/0
1998 2,576,393 2,491 ,303 96.700/0 8,365 2,499.668 97.020/0
1999 2,538,138 2,443,445 96.270/0 8,635 2,452,080 96.610/0
2000 2,463,013 21376,413 96.480/0 51,275 2,427,688 98.570/0
2001 2,647,837 2,599,328 98.170/0 11 ,357 2,610,685 98.600/0
2002 2,794,043 2,704,707 96.800/0 12,326 2,717,033 97.240/0
2003 3,516,953 3.388,208 96.340/0 21,654 3,409,862 96.960/0
2004 4,014,168 3.863,278 96.240/0 10,563 3,873,841 96.500/0
2005 4,283,690 4, 115,041 96.060/0 5,140 4,120,181 96.180/0
2006 5,243,485 5,040,537 96.130/0 . . .
(1) Each fiscal year contains data from the ad valorem assessment roll of the preceding year
(e.g.. fiscal year 2002 contains the 2001 assessment roll tax collections)
· Information unavailable until next fiscal year
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CITY OF EDGEWA TER, FLORIDA
Direct and Overlaping Debt
September 30, 2006
Net General Percentage City of
(1) Obligation Applicable to Edgewater
Governmental Debt the City of Share of
Unit Outstanding Edaewater Debt
Vol usia County $ 38,190,000 2.68010 $ 1,023,492
Vol usia County School District $ 9.780,000 2.76010 269,928
Subtotal Overlapping Debt 1,293,420
City Direct Debt $ 4701000 100.000/0 470,000
Total Direct and Overlaping Debt $ 1,763,420
(1) Data provided by above agencies.
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City of Edgewater
Pledged-Revenue Coverage
Last Ten Fiscal Years
1991 and 1993 Water & Sewer Revenue Bonds
Utlity Less: Allowable Net
Fiscal Services Operating 1m pa ct Available Debt Service
Year CharCles Expenses Fees Revenue Principal Interest Coveraae
1997 $ 5,053,500 $ 2,344,814 $ 504,807 $ 3,213,493 $ 280,000 $ 791,778 3.00
1998 5,2211320 2,325,604 502,273 3,397,989 290,000 776,398 3.19
1999 5,3591379 2,468,742 503,978 3,394,615 310,000 760,018 3.17
2000 5,5751607 2,593,721 502,569 3,484,455 325,000 742,025 3.27
2001 4,9491424 2,901,684 502,881 2,550,621 365,000 701,812 2.39
2002 4,898,298 3,047,196 502,468 2,353,570 385,000 683,263 2.20
2003 5,108,991 3,300,405 503,182 2,311,768 385,000 683,262 2.16
2004 5,657,904 3,747,041 503,182 2,414,045 405,000 663,327 2.26
2005 6,013,236 3,159, 111 502,542 3,356,667 425,000 641,967 3.15
2006 7,218,019 3,118,621 503,566 4,602,964 450,000 619,142 4.31
SRF Debt
Available Net Total Revenues
Fisca I Revenues & impact Special Available for Debt Service
Year Fees SRF Debt Assessments SRF Debt Princioal Interest Coveraae
1997 $ 2,141,715 $ 2,591,850 $ 4,733,565 $ 1,087,012 $ 858,140 2.43
1998 2,331,591 2,014,536 4,346,127 991,434 820,004 2.40
1999 2,324,597 1,569,950 3,894,547 1,027,413 784,025 2.15
2000 21417,430 684,687 3,102,117 1,065,175 746,263 1.71
2001 1,483,809 762,235 2,246,044 1,104,326 707,112 1.24
2002 1,285,307 823,170 2,108,477 1,144,918 666,520 1.16
2003 1,243,506 834,005 2,077,511 1,187,004 624,433 1.15
2004 1,3451718 845,063 2,190,781 1,230,638 580,799 1.21
2005 2,289,700 889,393 3,179,093 1,275,879 535,558 1.76
2006 3,5331822 909,890 4,4431712 1,322,785 488,652 2.45
Water & Sewer Revenue Note, Series 2002
Fiscal Net Debt Service
Year Revenue Princioal Interest Coveraae
1997
1998
1999
2000
2001
2002 $ 297,039 $ 514,000 $ 54,478 0.52
2003 266,074 514,000 92,076 0.44
2004 379,344 514,000 78,471 0.64
2005 1,367,656 514,000 1121879 2.18
2006 2,632,275 514,000 141,124 4.02
Note: Details regarding the City's outstanding debt can be found in the notes to the financial statements. Operating expenses
do not include interest, depreciation, or amortization expenses.
* Bank of America Loan was incurred in FY2002.
94
City of Edgewater
Demographic and Economic Statistics
Last Ten Fiscal Years
(4)
(1) (2) (3) County (5) (5) (6)
Estimated Personal Per Capita Unemployment School Percent Median
Year Population Income Income Rate Enrollment Attendance Age
1997 18,077 $ 8,692,190,000 $ 19,455 4.001b 1,546 95
1998 18,761 9,206,431,000 19,787 3.20/0 1,495 95
1999 18,865 9,638,706,000 20,309 3.001b 1,484 95 47
2000 19,343 10,380,740,000 21,920 2.90/0 1,491 95
2001 19,390 10,949,705,000 22,520 4.00/0 1,457 95
2002 19,515 111393,849,000 23,195 5.30/0 1,603 93
2003 20,088 11,879,895,000 23,832 5.20/0 1,412 95 42
2004 20,637 12.473,889,750 19,460 4.50/0 1,349 95
2005 21, 1 56 13,097,584,238 22,582 3.40/0 1,359 96 43
2006 21 ,572 13,335,000,000 22,609 3.10/0 1,382 95 43
(1) Obtained from University of Florida, Bureau of Economics and Business Research.
Census Bureau estime for April 2000 and City of Edgewater Planning Dept.
(2) Obtained from U.S. Department of Commerce, Bureau of Economic Analysis.
Personal Income information above is for Volusia County as a whole.
Separate information for the City of Edgewater is not available.
(3) Obtained from U.S. Department of Commerce, Bureau of Economic Analysis.
(4) Obtained from State of Florida, Department of Labor and Employment Security
(5) Obtained from County Schoof Board - includes grades K-5, Edgewater Elementary School and
Indian River Elementary School.
(6) Obtained from Volusia County - Census Bureau (2000).
95
City of Edgewater
Population Statistics
Last Ten Fiscal Years
OJb Change (2) 0/0 Change
(1 ) During Volusia During
Edgewater the County the
Year Population Period Population Period
1997 18,077 413,668
1998 18,761 3.780/0 4201431 1.630/0
1999 18,865 0.55010 426,815 1.52010
2000 19,343 2.530/0 435,836 2.110/0
2001 19,390 0.24010 443,343 1.720/0
2002 19,515 0.64010 454,581 2.530/0
2003 20,088 2.94Ok 470,770 3.560/0
2004 20,637 2.730/0 484,261 2.870/0
2005 21 , 156 2.51% 492,984 1.800/0
2006 21,572 1.97010 503,844 2.200/0
(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 Volusia County. Department of Economic Development.
96
City of Edgewater
Principal Employers
Current Year and Nine Years Ago
2006 1997
Percentage Percentage
(1 ) Number of of Total City Number of of Total City
Emolover Emo\ovees Rank Emolovment Emplovees Rank Emolovment
Boston Whaler 455 1 5.690/0 . . .
City of Edgewater 201 2 2.51 0/0 . . .
Publix Supermarkets 150 3 1.880/0 . . .
Coronado Paint 120 4 1.500/0 . . .
Winn Dixie Supermarkets 114 5 1.430/0 . . .
Indian River Elementary 112 6 1.400/0 . . .
Edgewater Elementary 110 7 1.3801'0 . . .
Edgewater Power Boats 97 8 1 .21 0/0 . . .
Tarmac 18 9 0.230/0 . . .
Best Western 6 10 0.080/0 . . .
1383 17.290/0
People employed in the City of Edgewater (2) 7,997
(1 ) Information provided by above organizations.
(2) U.S. Census Bureau, 2000 Census
· Information is not available.
97
City of Edgewater
Full-Time Equivalent City Government Employees by Function/ Program (1)
Last Ten Fiscal Years
1997 1998 1999 2000 2001 2002 2003 2004 2005 2006
Function/Program
General Government
Mayor and Commission 5 5 5 5 5 5 5 5 5 5
City Manager 4 4 2 1 3 3 3 3 3 3
City Clerk 2 2 2 2 2 2 2 2 2 2
Finance 8 8 7 9 9 7 10 7 10 10
Human Resources 2 2 2 3 3 2 3 2 2 3
Community Development:
Planning and Zoning 9 9 3 3 4 3 3 3 3 3
Building 0 0 4 4 4 4 4 4 5 6
Public Safety:
Fire - Administration 0 0 1 2 2 0 0 1 1 5
Fire - Support 12 12 18 18 18 19 22 22 27 33
Police - Administration 0 0 15 15 15 6 4 4 3 5
Police - Support 44 46 33 33 33 35 35 34 34 35
Animal Control .0 0 2 2 2 2 2 2 2 3
Code Enforcement 0 0 0 3 3 2 3 3 4 3
Water & Sewer
Water Utility 9 9 9 9 9 10 10 10 10 10
Wastewater Util ity 15 15 15 15 15 11 11 11 11 11
Fietd Operations 12 12 12 13 13 13 12 13 13 5
Stormwater 9 9 9 9 9 4 4 5 5 10
Refuse 19 19 19 19 19 19 18 22 22 28
Par1<s and Recreation: 10 10 14 15 18 5 13 15 14 20
Public Works 8 8 7 7 7 8 5 5 7 0
Maintenance 3 3 0 0 0 0 0 0 0 0
City Engineer 3 3 0 0 0 0 0 0 0 0
Total 174 176 179 187 193 160 169 173 183 200
(1) City of Edgewater Budget Book
98
CIty of Edgewater
Operating Indicators by Function (1)
Last Ten Fiscal Years
Fiscal Year
1997 1998 1999 2000 2001 ~ 2003 2004 2005 2006
Function
Police
Accidents 323 341 254
Physical Arrests 945 1,113 1,141
Criminal Investigations Conducted 510 415 395
Traffic Citations 6,764 6,319 6,000
Totals Calls for Service 36,321 32,706 33,115
911 Calls Received 4,618 4,440 4,811
Evidence Processed (pieces) 2,191 2,153 2,203
Fire
Burn Permits Issued 1 1 2 1 0 11 1 8 8 4
Contruction Inspections 235 232 164 172 160 156 172 180 168 171
Public Education Programs 26 36 66 45 49 24 9 12 10 19
Emergency Responses 1,683 1,776 1,920 1,131 1,199 2,180 2,197 2,701 2,922 3,069
Average Response Time (minutes) 4.7 4.6 4.1 3.8 4.1 3.9 4.4 4.7 4.1 4.4
Field Operations
Streets paved (miles) 0.10 4.08 6.39 0.90
Streets Resurfaced (miles) 0.53 2.20 2.67 7.01 7.31 3.12
Sidewalks/Bike Paths built (miles) 13.6
Liesu re Services
Ball games & field rentals 2,003
Events/Program s 11
Water
New Connections 96 124 207 223 297 383 380 265 278 175
Number of customers 8,340 8,586 8,983 9,746 10,191 10,164 10,387
Water main breaks 337 233 253 297 153 83 87 72 64 60
Average Daily Consumption 1.33 1.55 1.47 1.75 1.81 1.77 1.71 1.71 1.77 1.85
(Millions of Gallons)
Sewer
New Connections 85 122 202 195 267 230 339 214 261 162
Number of customers 7,966 8,167 8,441 8,986 9,214 9,394 9,626
Average Daily Consumption 1.32 1.64 1.66 1.69 1.45 1.55 1.12 1.09 1.18 1.07
(Millions of Gallons)
Refuse
Number of Customers 7,807 7,618 7,859 7,945 8,809 8,977 9,205
General Government
Employment Applications Received 367 334 298 275
Personnel Actions processed 69 138 171 184 146 264 162 156 152 157
Accidents & Injuries Reviewed 19 13 27 26 20 18
Occupational licenses issued 1,336 1,445 1 ,456 1,435 1,650 1,681 1,720
(1) Information obtained from City of Edgewater's department directors.
Note:
Information not available
99
City of Edgewater, Florida
Capital Assets Statistics by Function
Last Ten Fiscal Years
Fiscal Year
1997 1998 1999 2000 2001 2002 2003 2004 2005 2006
Function
Public Safety
Fire Stations 2 2 2 2 2 2 2 2 2 2
Fire Vehicles 2 3 5 6 7 9 9 11 11 15
Police Stations 1 1 1 1 1 1 1 1 1 1
Police Vehicles 4 7 9 14 16 18 21 24 24 30
Code Enforcement Vehicles 1 1 1 1 2 2 2 3 3 3
Public Works
Vehicles 2 2 2 2 2 3 3 4 4 5
Streets Paved (miles) 106.7 106.7 106.7 106.8 106.8 106.8 110.88 117.27 117.27 118.17
Streets Unpaved (miles) 5.3 5.3 5.3 5.4 5.4 5.4 5.4 5.4 5.4 5.4
Street Lights 1,068
Traffic Signals 5
Leisure Services
Vehicles 4 6 7 9 9 9 9 9 10 10
Park Acreage 137 137 137 137 137 142.5 151 151 150 142.5
Pa rks 28 28 28 28 28 28 28 28 28 28
Baseball Fields 6 6 6 6 6 6 6 7 7 7
Tennis Courts 5 5 5 5 5 5 5 5 4 4
Basketball Courts 2 2 2 2 2 2 2 2 2 2
Racquetball Courts 6 6 6 6 6 6 6 6 4 4
Community Centers 1 1 1 1 1 1 1 1 1 1
Gym nasiums** 0 0 0 1 1 1 1 1 1 1
Water & Sewer
Vehicles 7 7 7 9 9 10 11 13 13 14
Fire Hydrants 482 518 550 572 577 624 642 670 686 691
Water Mains (miles) 154 160 178 180 184 184 186 186 186 194
Sewer Mains (nliles) 133 140 140 156 160 165 170 180 180 189
Reclaim Water (miles) 65 65 65 65 65 69 69 69 71 71
Stormwater
Vehicles 3 3 4 4 4 4 6 7 7 10
Storm Sewers (miles) 34.85
Refuse
Ga rbage Trucks 3 3 3 5 5 5 5 5 7 10
Other Vehicles 5 5 5 7 8 9 10 10 12 15
Note:
*Information not available
**Gymnasium is leased to YMCA
100
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OTHER REPORTS
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MCDIRMIT III DAVIS
CERTIFIED PUBLIC ACCOUNTANTS AND ADVISORS
REPORT ON INTERNAL CONTROL OVER FINANCIAL REPORTING AND ON
COMPLIANCE AND OTHER MATTERS BASED ON AN AUDIT OF
FINANCIAL STATEMENTS PERFORMED IN ACCORDANCE
WITH GOVERNMENT AUDITING STANDARDS
The Honorable Mayor and City Commissioners
City of Edgewater, Florida
Edgewater, Florida
We have audited the basic financial statements of the City of Edgewater, Florida, as of and for the
year ended September 30, 2006, and have issued our report thereon dated December 5, 2006.
We conducted our audit in accordance with auditing standards generally accepted in the United
States of America and the standards applicable to financial audits contained in Government
Auditing Standards, issued by the Comptroller General of the United States.
Internal Control Over Financial Reporting - In planning and performing our audit, we
considered the City of Edge water, FloridaJs 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
materia! 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 December 5, 2006.
Compliance and Other Matters - As part of obtaining reasonable assurance about whether the
City of Edge water, Florida's basic financial statements are free of material misstatement, we
performed tests of its compliance with certain provisions of laws, regulations, contracts and grant
agreements, noncompliance with which could have a direct and material effect on the
determination of financial statement amounts. However, providing an opinion on compliance with
those provisions was not an objective of our audit and, accordinglYJ we do not express such an
opinion. The results of our tests disclosed no instances of noncompliance or other matters that
are required to be reported under Government AlJditing 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 December 5, 2006.
MCDIRMIT DAVIS & COMPANY, LLC
605 E. ROBINSON STREET, SUITE 635 · ORLANDO, FLORIDA 32801
TELEPHONE 407-843-5406. FAX 407-649-9339. EMAIL: INFO@MCDIRMITDAVIS.COM
MEMBERS: PRIVATE COMPANIES PRACTICE SECTION · AMERICAN INSTITUTE OF CERTlFIED PUBLIC ACCOUNTANTS. FLORIDA INSTlTUTE OF CERTIFIED PUBLIC ACCOUNTANTS
101
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
by anyone other than these specified parties.
fJtc/lUmit lJaui4 & fMnp&VlAf ue
December 5, 2006
102
MCDIRMIT III DAVIS
CERTIFIED PUBLIC ACCOUNTANTS AND ADVISORS
MANAGEMENT LETTER
Honorable Mayor, City Council and City Manager
Edgewater, Florida
'Ne have audited the financial statements of the City of Edgewater, Florida, as of and for the fiscal
year ended September 30, 2006, and have issued our report thereon dated December 5, 2006,
We conducted our audit in accordance with United States generally accepted auditing standards,
and Government Auditing Standards issued by the comptroller General of the United States. We
have issued our Report on Internal Control over Financial Reporting and on Compliance and
Other Matters. Disclosures in that report, which is dated December 5, 2006, should be
considered in conjunction with this management letter.
Additionally, our audit was conducted in accordance with the provisions of Chapter 10.550, Rules
of the Auditor General, which govern the conduct of local governmental entity audits performed in
the State of Florida and require that certain items be addressed in this letter.
The Rules of the Auditor General (Section 10.554(1 )(h)1.) require that we address in the
management letter, if not already addressed in the auditor's report on compliance and internal
controls whether or not recommendations made in the preceding annual financial audit report
have been followed. One of the recommendations made in the preceding annual financial audit
report has been corrected, as detailed in the accompanying pages. The comment made referring
to the deficit fund equity in the Stormwater Management Fund has not been implemented and will
be repeated as a current year management comment.
As required by the Rules of the Auditor General (Section 10.554(1 )(h)2.), the scope of our audit
included a review of the provisions of Section 218.415., Florida Statutes, regarding the investment
of public funds. In connection with our audit, we determined that the City of Edgewater, Florida
complied with Section 218.415, Florida Statutes.
The Rules of the Auditor General (Section 10.554(1)(h)3.) require that we address in the
management letter any findings and recommendations to improve financial management,
accounting procedures, and internal controls. In connection with our audit, we had four comments
as discussed in the accompanying pages.
MCDIRMIT DAVIS & COMPANY, LLC
605 E. ROBINSON STREET, SUITE 635 · ORLANDO, FLORIDA 32801
TELEPHONE 407 -843-5406 · FAX 407 -649-9339 · EMAIL: INFO@MCDIRMITDAVlS.COM
MEMBERS: PRIVATE COMPANIES PRACTICE SECTION. AMERICAN INSTI11..ITE OF CERTIFIED PUBLIC ACCOUNTANTS. FLOR1DA lNSTITUTE OF CERTifiED PUBLIC ACCOUNTANTS
103
The Rules of the Auditor General (Section 10.554(1)(h)4.) require disclosure in the management
letter of the following matters if not already addressed in the auditor's reports on compliance and
internal controls and are not clearly in consequential: (1) violations of laws, rules, regulations, and
contractual provisions that have occurred, or are likely to have occurred; (2) improper or illegal
expenditures; (3) improper or inadequate accounting procedures (e.g., the omission of required
disclosures from the financial statements); (4) failures to properly record financial transactions;
and (5) other inaccuracies, shortages, defalcations, and instances of fraud discovered by, or that
come to the attention of, the auditor. Our audit disclosed no matters required to be disclosed by
Rules of Auditor General (Section 10. 554(1 )(h)4.
The Rules of the Auditor General (Section 10.554(1)(h)5.) also require that the name or official
title and legal authority for the primary government and each component unit of the reporting
entity be disclosed in the management letter, unless disclosed in the notes to the financial
statements. This information has been disclosed in the notes to the financial statements.
As required by the Rules of the Auditor General (Section 10.554(1)(h)6.a.), a statement must be
included as to whether or not the local government entity has met one or more of the conditions
described in Section 218.503(1), Florida Statutes. In connection with our audit, we determined
that the City of Edgewater, Florida did not meet any of the conditions described in Section
218.503(1), Florida Statutes.
As required by the Rules of the Auditor General (Section 10.554(1 )(h)6.b.), we determined that
the annual financial report for the City of Edgewater, Florida for the fiscal year ended September
301 2006, filed with the Florida Department of Financial Services pursuant to Section 218.32(1 )(a),
Florida Statutes, is in agreement with the annual financial audit report for the fiscal year ended
September 30, 2006.
As required by the Rules of the Auditor General (Sections 10.554(h)6.c. and 10.556(7), we
applied financial condition assessment procedures. It is management's responsibility to monitor
the entity's financial condition, and our financial condition assessment was based in part on
representations made by management and the review of financial information provided by same.
This management letter is intended solely for the information of the City of Edgewater, Florida and
managementl and the State of Florida Office of the Auditor General, and is not intended to be and
should not be used by anyone other than these specified parties.
tJIf/J.iunit ~ 3, ~~LLt
December 5,2006
104
A. Status of Prior Year Recommendations
1. Deficit Fund Equity
The Stormwater Management Fund has a deficit unrestricted net asset balance of
$748,608 at September 30, 2005. Current assets at September 30, 2005 are only
$92,995 compared to current liabilities of $1,156,024.
Recommendation
We strongly recommend a rate increase and cost savings measures be done to
reverse this deteriorating financial condition in the Stormwater Management Fund.
Corrective Action Taken
At September 30, 2006, the unrestricted net asset balance of the Stormwater
Management Fund is a deficit of $1,439,714. The financial condition of this fund
continues to deteriorate and the city needs to take action and determine what to do
to reverse this deteriorating financial condition.
2. Budaet Amendmen.t~
During 2005 the Grants Special Revenue Fund was set up by moving budget
amounts for revenue and expenditures from the General Fund and the Recreation
Impact Fees Special Revenue Fund to the Grants Special Revenue Fund. Total
appropriations for the General Fund decreased and Grant Fund appropriations
increased b-y the same amount. In addition, transfers out of the Recreation Impact
Fees Special Revenue Fund were changed by the same amount as transfers in to
the Grants Fund. The net amount of these transactions did not increase total
appropriations of the City's governmental funds for fiscal year 2005, however, they
should have been authorized by the City Council.
Recommendation
We recommend that any budget revision that alters the total appropriations of any
fund be approved by City Council within 60 days of year end as allowed by Florida
Statutes.
Corrective Action Taken
There were no budget revisions that altered the total appropriations of any funds
for the year ended September 30, 2006.
105
B. Current Year Recommendations
1. Excess Exoenditures Over Aopropriations
Actual expenditures exceeded appropriations in the following funds: Special law
enforcement trust special revenue fund, $29,701; and the LLEBG special revenue
fund $1,515
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.
2. Deficit Fund Eauitv
The Stormwater Management Fund has a deficit unrestricted net asset balance of
$1,439,714 at September 30, 2006, compared to a deficit unrestricted net asset
balance of $748,608 at September 30, 2005. Current assets at September 30,
2006 are only $261,482 compared to current liabilities of $2,041,219. The
increase in the deficit fund balance was caused by the stormwater management
fund spending almost two million dollars on capital assets, primarily Parktowne
Center Phase I drainage improvements. Transfers in from other funds to help with
this capital outlay were only $1,270,468. At September 30, 2006, the stomrwater
management fund has a due to other funds of $1,633,366.
Recommendation
We strongly recommend the City take immediate action to reverse this
deteriorating financial condition in the Stonnwater Management Fund.
3. Auditor General Financial Condition Assessment Procedures
For the year ended September 30, 2006, we applied financial condition
assessment procedures as required by the Auditor General of the State of Florida.
Based upon our review, the City had 5 favorable I 7 unfavorable and 6 inconclusive
financial indicators. Some of the unfavorable ratios are due in part to comparison
to benchmark cities. However, several of the unfavorable ratios are due to
significant decreases in cash and unrestricted net assets in the proprietary funds.
The decrease is caused by the capital outlay being several million higher than
increase in total-net assets for the year.
Recommendation
We recommend the City Council analyze capital outlay for the next 5 years and
determine how it will be funded. This includes governmental funds since the only
reason the general fund had an increase in unreserved fund balance in 2006 is
because of $1.2 million sale of land in Parktowne. Without this sale, there would
have been a decrease and the City would not have met the City Charter
requirement to maintain reserves of at 1east 150/0.
106
THE CITY OF EDGEW ATER
POST OFFICE BOX 100, EDGEWATER, FLORIDA 32132-0100
AFFIDA VIT OF IMPACT FEE COMPLIANCE
The City of Edgewater, Florida has complied with Section 163.31801 of Florida Statues regarding accounting and
reporting of impact fee collections and expenditures.
7
~----. ..'
. ..- ~ ~..
Brett L. Tanner
Finance Director
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/ (~ ...""\
107
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