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04-08-08 Agenda WSCITY COMMISSION CITY OF DELRAY BEACH, FLORIDA WORKSHOP MEETING -TUESDAY, APRIL 8, 2008 6:00 P.M. DELRAY BEACH CITY HALL FIRST FLOOR CONFERENCE ROOM The City will furnish appropriate auxiliary aids and services where necessary to afford an individual with a disability an equal opportunity to participate in and enjoy the benefits of a service, program, or activity conducted by the City. Contact Doug Smith at 243- 7010, 24 hours prior to the program or activity in order for the City to reasonably accommodate your request. Adaptive listening devices are available for meetings in the Commission Chambers. WORKSHOP AGENDA 1. Presentation regarding Worthing Place Project Construction Impacts 2. Presentation of Comprehensive Annual Financial Report 3. Recommendations from Creative City Collaborative Organizational Committee 4. Highpoint Sections 5 & 6 Request to Turn Over Roads and Drainage to the City 5. Discussion of Audio/Visual System Upgrade for City Hall 6. Commission Comments Please be advised that if a person decides to appeal any decision made by the City Commission with respect to any matter considered at this meeting, such person will need to ensure that a verbatim record includes the testimony and evidence upon which the appeal is based. The City neither provides nor prepares such record. MEMORANDUM TO: Mayor and City Commissioners FROM: Paul Dorling, AICP, Director of Planning and Zoning THROUGH: City Manager DATE: Apri13, 2008 SUBJECT: AGENDA ITEM WS.1 -WORKSHOP MEETING OF APRIL 8, 2008 PRESENTATION REGARDING WORTHING PLACE PROJECT CONSTRUCTION IMPACTS ITEM BEFORE COMMISSION A project representative wishes to discuss infrastructure improvements and inform the Commission concerning potential partial and/or full street closures necessary to safely construct Worthing Place. Specific discussion will include impacts and safety measures and effects on the surrounding area. This will include a ten to fifteen minute PowerPoint presentation. MEMORANDUM TO: Mayor and City Commissioners FROM: Joseph M. Safford, Finance Director THROUGH: David T. Harden, City Manager DATE: Apri12, 2008 SUBJECT: AGENDA ITEM WS.2 -WORKSHOP MEETING OF APRIL 8, 2008 PRESENTATION OF COMPREHENSIVE ANNUAL FINANCIAL REPORT ITEM BEFORE COMMISSION Presentation to the City Commission of the Comprehensive Annual Financial Report for the Year Ended September 30, 2007 by our Independent Certified Public Accountants, Caler, Donten, Levine, Druker, Porter & Veil. 1 t f ~ - - .~ ^ • . . • . • . .~ ~ . . ~ : ; . ~~ .~ . ~• r,~ ~. i• . _. r r . . . ~ • 1 1 f r .- • . .~ • r . ^ ^ ti ~ ~ COMPREHENSIVE ANNUAL FINANCIAL REPORT City of Delray Beach, Florida Year Ended September 30, 2007 with Report of Independent Certified Public Accountants Comprehensive Annual Financial Report City of Delray Beach, Florida Year Ended September 30, 2007 with Report of Independent Certified Public Accountants Prepared by the Finance Department Joseph Safford, Director Milena Walinski, Assistant Director Rebecca O'Connor Mary Ann Young Dolores Egan Maureen Owens Lisa Hartman City of Delray Beach, Florida Comprehensive Annual Financial Report Year Ended September 30, 2007 Contents I. INTRODUCTORY SECTION Transmittal Letter ........................................................................................................................................................... i Certificate of Achievement ...........................................................................................................................................ix List of Principal Officials ............................................................................................................................................. xi City of Delray Beach Organizational Chart .................................................................................................................xii II. FINANCIAL SECTION Independent Auditor's Report .......................................................................................................................................1 Management's Discussion and Analysis ...................................................................................................................... ..3 Basic Financial Statements Government-Wide Financial Statements Statement of Net Assets ........................................................................................................................................... 16 Statement of Activities ............................................................................................................................................. 17 Fund Financial Statements Balance Sheet -Governmental Funds ..................................................................................................................... 18 Reconciliation of the Governmental Funds Balance Sheet to the Statement of Net Assets ............................................................................................................................................................. 19 Statement of Revenues, Expenditures, and Changes in Fund Balances - Governmental Funds ............................................................................................................................................ 20 Reconciliation of the Governmental Funds Statement of Revenues, Expenditures, and Changes in Fund Balances to the Statement of Activities ............................................................................. 21 Statement of Net Assets - Froprietary Funds ........................................................................................................... 22 Statement of Revenues, Expenses, and Changes in Net Assets - Froprietary Funds .................................................................................................................................................................... 23 Statement of Cash Flows -Proprietary Funds ......................................................................................................... 24 Statement of Fiduciary Net Assets -Fiduciary Funds ............................................................................................. 25 Statement of Changes in Fiduciary Net Assets -Fiduciary Funds .......................................................................... 26 Notes to Financial Statements ................................................................................................................................... 27 Required Suuulementary Information Budgetary Comparison Schedule -General Fund ................................................................................................... 60 Notes to Budgetary Comparison Schedule ............................................................................................................... 61 Schedule of Pension Funding Progress .................................................................................................................... 62 Schedules of Employer and State Pension Contributions ........................................................................................ 63 Combining And Individual Fund Statements And Schedules Non-Major Governmental Funds Descriptions ............................................................................................................................................................. 64 Combining Balance Sheet ........................................................................................................................................ 65 Combining Statement of Revenues, Expenditures, and Changes in Fund Balances ................................................ 66 City of Delray Beach, Florida Comprehensive Annual Financial Report Year Ended September 30, 2007 Contents II. FINANCIAL SECTION (continued) Non-Major Enterprise Funds Descriptions .............................................................................................................................................................67 Combining Statement of Net Assets ........................................................................................................................68 Combining Statement of Revenues, Expenses, and Changes in Net Assets ............................................................69 Combining Statement of Cash Flows .......................................................................................................................70 Internal Service Funds Descriptions .............................................................................................................................................................71 Combining Statement of Net Assets ........................................................................................................................72 Combining Statement of Revenues, Expenses, and Changes in Net Assets ............................................................73 Combining Statement of Cash Flows .......................................................................................................................74 Fiduciary Funds Descriptions .............................................................................................................................................................75 Combining Statement of Plan Net Assets -Pension Trust Funds ............................................................................76 Combining Statement of Changes in Plan Net Assets -Pension Trust Funds .........................................................77 Other Supplementary Information General Fund Schedules of Revenue and Other Financing Sources -Budget and Actual .............................................................78 Schedules of Expenditures, Encumbrances, and Other Financing Uses -Compared with Appropriations ...................................................................................................................................................... 80 Debt Service Requirements Summary Schedule of Debt Service Requirements (Frincipal and Interest) to Maturity .........................................82 Combined Schedule of General Obligation Bond Debt Service Requirements ..................................................... ..83 Schedule of General Obligation Bonds (Series 2002) ............................................................................................ ..84 Schedule of General Obligation Bonds (Series 2004) ............................................................................................ ..85 Schedule of General Obligation Bonds (Series 2005) ............................................................................................ ..86 Combined Schedule of Revenue Bond Debt Service Requirements (Principal and Interest) ....................................................................................................................................... ..87 Schedule of Revenue Bonds (Series 2000) ............................................................................................................ ..88 Schedule of Utility Tax Revenue Bonds (Series 2002) .......................................................................................... ..89 Schedule of Revenue and Refunding Bonds (Series 2003) .................................................................................... ..90 Schedule of Revenue Bonds (Series 2005) (Tax Exempt Line of Credit) .............................................................. ..91 Schedule of Utility Tax Revenue Bonds (Series 2007) .......................................................................................... ..92 Combined Schedule of Water and Sewer Revenue Bonds ..................................................................................... ..93 Schedule of Water and Sewer Revenue Bonds (Series 1993) ................................................................................ ..94 Schedule of Water and Sewer Revenue Bonds (Series 1997) ................................................................................ ..95 Schedule of Water and Sewer Revenue Bonds (Series 2003) ................................................................................ ..96 Schedule of Water and Sewer Revenue Bonds (Series 2006A) ............................................................................. ..97 Schedule of Water and Sewer Revenue Bonds (Series 2006B) ............................................................................. ..98 Schedule of Water and Sewer Revenue Bonds (Series 2007) ................................................................................ ..99 Schedule of Installment Agreements (Capital Leases) ........................................................................................... 100 Combined Schedule of Community Redevelopment Agency Tax Increment Redevelopment Revenue Bonds (Series 2004 and Series 1999) ........................................................................ 101 City of Delray Beach, Florida Comprehensive Annual Financial Report Year Ended September 30, 2007 Contents III. STATISTICAL SECTION Descriptions ..............................................................................................................................................................102 Financial Trends Net Assets by Component ......................................................................................................................................103 Changes in Net Assets ............................................................................................................................................104 Governmental Activities Tax Revenues by Source ................................................................................................106 Fund Balances of Governmental Funds .................................................................................................................107 Changes in Fund Balances of Governmental Funds ..............................................................................................108 General Governmental Tax Revenues by Source ...................................................................................................109 Assessed Value and Estimated Actual Value of Taxable Froperty ........................................................................110 Revenue Capacity Froperty Tax Rates -Direct and Overlapping Governments .................................................................................111 Principal Property Taxpayers .................................................................................................................................112 Property Tax Levies and Collections .....................................................................................................................113 Debt Capacity Ratios of Outstanding Debt by Type ......................................................................................................................114 Ratios of General Bonded Debt Outstanding .........................................................................................................115 Direct and Overlapping Governmental Activities Debt .........................................................................................116 Water and Sewer Pledged Revenue Coverage .......................................................................................................117 Demographic and Economic Information Principal Employers ...............................................................................................................................................118 Demographic and Economic Statistics ...................................................................................................................119 Operating Information Full-time Equivalent Government Employees by Function ...................................................................................120 Capital Asset Statistics by Function .......................................................................................................................121 Operating Indicators by Function ...........................................................................................................................122 Schedule of Insurance in Force ..............................................................................................................................123 IV. COMPLIANCE SECTION Compliance With the Single Audit Act and the Rules of the Auditor General for the State of Florida Independent Auditor's Report on Internal Control Over Financial Reporting and on Compliance and Other Matters Based on an Audit of Financial Statements Performed in Accordance with Covern~nent Auditing Standards ......................................................................124 Schedule of Expenditures of Federal Awards and State Financial Assistance .......................................................126 Notes to Schedule of Expenditures of Federal Awards and State Financial Assistance ...........................................................................................................................................................128 Independent Auditor's Report on Compliance With Requirements Applicable to Each Major Federal Frogram and State Froject and on Internal Control Over Compliance in Accordance With OMB Circular A-133 ............................................................................129 Schedule of Findings and Questioned Costs ..........................................................................................................131 City Corrective Action Plan ...................................................................................................................................135 City of Delray Beach, Florida Comprehensive Annual Financial Report Year Ended September 30, 2007 Contents Management Letter Management Letter ................................................................................................................................................138 City Response to Management Letter ....................................................................................................................141 Introductory Section S ~ .- ~ 4 I• ' - I 1 - rte. ~,~ _ -t 1 - I - _ i ..- ~~ 1 ; ti. _ ~ 1 - '~ I I i ~S 1 '^O 4 ^ y , - ^ ~, ,1~xr r~~ - 5 _ r' IK~ r1 =7-11 _ •I.'~ ~- ~ ~ I ! 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JI -fT~ i - 7 1, l ^ y 7 ,~ • ~, ~ ... ~, ' ~_ ~~~y~ is ~~~ _ •d ~~b ~y_ ~~d ILIA ~lie~ - s_df'ea e3~. ~_ ~ ' ~ 1~~~ ~ ~^y ~ ? 1 C %~~~ ~~ 11 ~ ~ I ~ ^ , K , ^I '~~ ~•~~ ~ ~. I l~r • ~ I ti 11 ~ I 11•^~.~ p r ' 1 ~e~evelo ~ CIA tl'~~P~P~t~~l&,~o~~,~i n~,~h#•f ' 1 t r~.all . • sue- Q ~ a oft -c 'te - °sc ~wl ~ ~ ~ ~ I - '~t'atemen s. cr t~ ~ se fat on r~lyd~ t14-a e 1 ncl~ ~inforniation w~~sen~t~ m q umns '=_ - - ,5,~ raterfxpl~ that of Ithe ;City; s bas financial st'~tati~ents. ~ ''fie C,~A i~ ~ depe}l~l~nt spe ' di 'Gt.-. 1 ,~ , 1 11 1 I I C 1 1 1 1 Lr ~{ 1 "-}tea' •~~ ^ p. rJ. 'Iti~~ . 1~3'r. ~' _ 1 ° - ~ y w- Yl r'~~-~ ~R xl rl u e 9•' r ~ ~~ _, ' ^- _ L 1 - ~~ N • Downtown Develoument Authority (DDA) -this entity is also a component unit of the City of Delray Beach and is also required to be discretely presented within the financial statements. The DDA was created after the City petitioned the State of Florida. An Act allowing the DDA became law on March 22, 1971. The original boundary of the DDA was established by Section 3, Chapter 71-604 Laws of Florida 1971. The expanded boundary was established by Chapter 94-476 Laws of Florida effective May 13, 1994. THE CITY OF DELRAY BEACH The City of Delray Beach is a political subdivision of the State of Florida and is located in the southeastern part of the state in Palm Beach County. Delray Beach was first settled as an agricultural community in 1895 and first incorporated in 191 L It was later incorporated as the City of Delray Beach on May 11, 1927. The City has a current estimated permanent population of 64,360 (2000 census permanent population was 60,020) with another estimated 12,600 seasonal residents. The current total land area of the City is 16.5 square miles. Delray Beach is primarily residential (58%) with a balance of commercial (10%), light industrial (4%), vacant and agricultural (ll%), recreation and open space (13%) and education and government facilities (4%). It is a mature community with 97.8% build-out (based upon land area) and, therefore, its focus is not upon growth, but upon quality development of remaining vacant areas and redevelopment of areas in a state of decline or deterioration. This would include the redevelopment of commercial and industrial areas which are no longer functionally competitive in the regional marketplace. The City of Delray Beach is aCommission-Manager form of local government. The citizens elect a Mayor every two (2) years who presides over four (4) Commissioners who are elected for two (2) year terms in alternating years. The City Commission appoints the City Manager, who is the Chief Operational Officer of the City, and the City Attorney, who acts on all legal matters pertaining to the City. The City Manager is charged with overseeing the business of the City and is responsible for the supervision of the City departments and employees. The City of Delray Beach is considered a full service municipality providing citizens with police, fire, emergency medical services including transport, parks and recreation, beach lifeguards, public works, water, sewer, garbage and trash, community improvement and inspection services along with planning, personnel, management and financial support services. The City also provides services to unincorporated areas and adjacent municipalities. Water, fire protection, emergency medical services, emergency police dispatch services, and limited sewer services are provided to the Town of Gulfstream. Sewer services, fire protection and emergency medical services and limited water services are provided to the Town of Highland Beach. Both areas are serviced on a contractual basis. The City encourages the participation of residents and business owners in educational forums, discussing problems within our community, and in contributing their input into resolving these problems. One venue for this is the Annual Town Hall Meeting (including an Annual Citizen's Roundtable and Infrastructure Hearing) held each year prior to the annual budget process which includes a comprehensive report on the prior year accomplishments of the Planning and Zoning Board, the Community Redevelopment Board and the City of Delray Beach including the distribution of the City's Annual Report. Other venues include area-wide meetings with neighborhood associations, established committees, charettes, a Resident's Academy, a Student's Academy, a Speaker's Bureau and special meetings along with neighborhood newsletters and information provided monthly on customer utility bills. This coming year will include a new Budget Task Force Committee and a Green Task Force Committee. Delray Beach is known locally, regionally and nationally for its special events and vibrant downtown activities. Over the past year, there were over 50 special events including the Green Market in the Park, Art and Jazz on the Avenue, Garlic Fest, Roots Cultural Festival, U.S.T.A. Boy's and Girl's National Tennis Championship, The U.S.T.A. Boy's 18 and 16 Clay Court National Championships, women's Federation Cup tennis quarter finals with Lindsay Davenport and the William's sisters, the ATP International Tennis Championships (ITC) has been in Delray for the past eight years, and the Chris Evert Fro-Celebrity Tennis Classic charity tournament. The 45r" Annual Delray Affair attracted over 150,000 visitors over athree-day period. The 4r" of July fireworks display attracted over 40,000 observers. The City displayed its 100-foot Christmas tree and had over 25,000 attend its First Night event at Old School Square. There are numerous musicals, parades, shows, art and craft festivals, movies, lectures, exhibits, performances and other special activities. The Delray Beach Golf Club, designed by Donald Ross in 1923, is one of Palm Beach County's finest public golf courses, clubhouse, restaurant, and pro shop facilities. The Lakeview Golf Course is another public golf course which is an executive course favored by many senior citizens and casual golfers. The City of Delray Beach has received the prestigious honor of being recognized as an All-America City in both 1993 and 2001. The City was also a finalist in the 1998 All-America City award competition. The City of Delray Beach is the only city in Florida to have received this prestigious honor twice. The City of Delray Beach celebrated its 30`" year in Sister's Cities Frogram relationship with Miyazu, Japan and a more current relationship with Moshi, Tanzania, Africa. The Public Information Office is responsible for producing and publishing all general City public communications to include monthly newsletters, bi-lingual pamphlets, radio communications, website information, the Hometown Connection (bi-monthly newsletter), information to utility bill customers, community television, emergency radio and the coordination of the City's Speaker Bureau where elected officials, the City Manager, Department Heads and other key employees present information to neighborhood organizations. The Finance Denartment has received the prestigious "Certificate of Achievement for Excellence in Financial Reporting" award for twenty three (23) consecutive years and also received the "Distinguished Budget Fresentation" award for twenty one (21) consecutive years from the Government Finance Officers Association of the United States and Canada. The Fire Department currently maintains an Insurance Services Office (ISO) Class 2 rating for the Public Frotection Classification Frogram (PPC). Only 23 cities out of 809 fire departments in the State of Florida have the distinction of being awarded this superior rating. The Fire Department has a main fire station and four (4) other stations throughout the City and one (1) station in Highland Beach, a neighboring community. This department trained over 8,000 citizens in specialized life saving procedures including cardiopulmonary resuscitation (CPR), drowning prevention, automatic external defibrillation (AED), fire safety, injury prevention and hurricane preparation. Fire Station No. 4 at the corner of Barwick and Lake Ida Road was recently demolished and a new station will be built in 2008. This station was Beverly damaged in Hurricane Wilma. We had over 12,100 fire/rescue calls this year with over 6,000 patients transported to hospitals. The Police Department received official accredited status by the Commission for Florida Law Enforcement Accreditation (CFA) in October, 2004. The CFA reviews all aspects of an agency's policies and procedures, management, operations, and support services to determine compliance with recognized standards of excellence. This on-site assessment is conducted jointly with assessors from the Commission on Accreditation for Law Enforcement Agencies (CALEA), the national accrediting body for law enforcement accreditation. There are approximately 276 national standards for state accreditation. This accreditation is held in the highest esteem by the criminal justice community. This department is primarily responsible for the Delray Youth Vocational Charter School which teaches at-risk students job and life skills. The Police Department received the 2006 Thomas H. Muehlenbeck Award for Excellence in Local Government for this project. The City has over 500 volunteers involved in various enforcement activities accounting for over 43,600 hours of service. We had over 39,000 calls for police service this year. The Parks & Recreation Denartment is one of only 26 agencies that have received national accreditation from the Commission for Accreditation of Park and Recreation Agencies (CAPRA). This award was announced in Washington, D.C. at the 2000 National Recreation and Parks Association (NRPA) Mid-Year Forum and Legislative Conference. National accreditation requires park and recreation agencies to respond to 153 different standards which represent elements of effective and efficient park and recreation operations. The department received re- accreditation in 2005. The Parks & Recreation Department is responsible for the maintenance and improvement of 18 parks, municipal beach, municipal marina., multiple community activity centers, the 505 Teen Center and the municipal cemetery. This department, with partial funding from the Children's Services Council and the Center Based Child Care Grant, has developed an active outreach program for after school activities for children that are unsupervised following their completion of the school day. There are presently over 300 children in this program. This department has an active program to assist at-risk students. We had over 301,000 visitors to our parks and recreation centers this year. The Community Improvement Department, in conjunction with the Community Redevelopment Agency (CRA), has been funding programs from State and Federal grants and City funds to provide affordable housing and rehabilitation assistance with low interest loans. The City, in its effort to promote redevelopment, has implemented or assisted in the development of various programs to assist property owners in the rehabilitation of their property. The Bootstrap Frogram is financed through General Fund revenues. Federal HOPE 3 and Housing and Urban Development (HUD) CDBG grants and State of Florida State Housing Initiative Partnership (SHIP) grants and County HOME grants or matching funds, assist those qualified persons wanting homeownership or existing homeowners who want to improve their property. CURRENT MA.TOR INITIATIVES Hurricane Impact The City of Delray Beach was impacted by three (3) hurricanes three years ago. Hurricane Charlie on the west coast did not impact Delray Beach directly but required us to send Police, Fire, Parks & Recreation and Utility crews to the devastated areas to assist other communities in their recovery efforts. Hurricane Frances and Jeanne did impact the City of Delray Beach with primarily debris removal costs, minor building damage and power outages. The City experienced over $5 million in costs. The Federal Emergency Management Agency, Florida Department of Transportation and the State of Florida reimbursed approximately 95% of these costs. The City is appealing one issue with FEMA in the amount of $494,000 for debris removal If FEMA does not accept this appeal, we will recover these funds from the debris contractor. The City was impacted by Hurricane Wilma two years ago with debris removal costs, building and equipment damage, damage to facilities (building roof, street lights, signage, towers and antennas, pump stations, lift stations, and parks) and incurred power outages for several weeks. As with residential homeowners and businesses, the City has had difficulty with roof, fence, awning, and window repairs due to the widespread damage across the State of Florida and the Gulf Coast communities from previous years. We have experienced over $12 million in costs from debris removal and damage to municipal properties. The Federal Emergency Management Agency, Florida Department of Transportation and insurance recoveries are expected to reimburse 100% of these costs. The City of Delray Beach passed a $24 million parks, recreation and culture general obligation bond issue at a referendum on January 20, 2004. This bond issue is currently being used for the costs of land acquisition and construction, reconstruction and equipping of new and existing parks, new and existing recreation centers, a parking garage, downtown park and other capital improvements as part of the expansion of Old School Square, and the furnishings and fixtures for the new public library as well as the costs of issuing the bonds. • Old School Square 575-space parking garage has recently opened. The adjacent downtown park design work should be initiated in FY2008. Land and a facility were purchased at the corner of Lake Ida Road and Congress Avenue for the new western senior center. Expansion of this center has been deferred due to the State tax reform impacts on the City this past year. Construction has been completed for the new Catherine Strong water park, Mike Machek Boy Scout Hut Park on Lake Ida Road, Cornell Park and Lake Ida Park. Construction is anticipated starting in FY2008 on Pompey Park, Miller Park and Bexley Park. Educational Facilities In 2005, the new Atlantic High School with its state of the art technology and two career academies opened. On the old Atlantic Community High School site, we are working with the Palm Beach County School Board to build a new middle school and provide for additional soccer fields. The new, vastly improved, $12.7 million Delray Beach Public Library opened on West Atlantic Avenue and will serve as the intellectual center of our city with more materials, space, computer terminals, and new technology to improve means of locating and checking out materials. The Beacon Center at the Village Academy was initiated which is a partnership between the City of Delray Beach, the Children's Services Council and the Community Child Care Center. More than 700 of our neediest families are receiving services ranging from parenting classes and academic enrichment to recreation and cultural opportunities. In coordination with Atlantic High School, the City continues to support the Eagle's Nest Froject where high school students learn the various construction trades and actually build a home on land donated by the City. Froceeds from the sale of this home will go toward continuation of this valuable program. Neighborhood Improvements The City has developed a Neighborhood Strategic Task Team consisting of City personnel from various departments and neighborhood representatives with the purpose of identifying neighborhood problems and working together to develop a plan to identify recommended resources needed to resolve those problems. The Team coordinates the use of public and private resources in resolving such issues as crime, disorder, infrastructure deficiencies, code violations and other areas. In 2004, the Neighborhood Advisory Council was formed to improve communications with neighborhoods throughout the City. Representatives from six (6) major districts meet and introduce the opinions and needs of their respective area neighborhoods to the Council and recommendations are forwarded to the City Commission. The City recently completed a $21 million infrastructure improvement project for the Seacrest Neighborhood Plan which provided beautification, road and sidewalk improvements, and water and sewer improvements. Several neighborhoods including Rainberry Woods, Chatelaine and Osceola Park will soon see improvements. The Southwest Neighborhood will soon see major improvements to include new sidewalks, water main upgrades, better housing options and landscaping. Plans are under way to improve our inventory of public housing and additional affordable and workforce housing. The City installed over 40 new bus shelters at various locations throughout the Ciry. The City has been awarded a grant for an additional 12 bus shelters in FY2008. We instituted a free shuttle bus service (Downtown Roundabout service) consisting of two shuttle buses that have routes from the Tri-Rail train terminal to the beach through the downtown central business district and from Swinton Avenue to the beach. This shuttle service served over 33,600 customers in its first year of operation. The City received the use of another 220 parking spaces with the completion of the Robert Federspiel Parking Garage located on Southeast First Avenue. This will be in addition to the 550 space Old School Square Parking Garage recently completed by the City. Workforce Housing The City has developed a workforce housing initiative and has a workforce housing ordinance. We started a Community Land Trust whereby land is banked for the development of special workforce housing units. The recent renovation by the CRA of the La France Hotel into housing for low-income seniors and the reconstruction of Carver Estates (325 units), Village at Delray (264 units), and Village at the Lakes (360 units) into a model mixed- income community are examples of recent projects. Many of these units will be either low income or workforce housing units. Technolo~v In response to the City of Delray Beach Strategic Plan 2001-2006, the City established a consolidated departmental website which was activated in June, 2002. This site was updated this year to include key "gateway" links to the Chamber of Commerce, the Community Redevelopment Agency, the Delray Beach Library and the Downtown Marketing Cooperative. The site is called MvDelrayBeach.com and provides citizens and other viewers with important information about the operations of the City, facilities, services, special events, calendar schedules, budgetary and financial information, and utility rates and includes links to major city and private organizations. The site allows for citizen comments, inquiries, complaints, and utility bill payments, as well as responses from City officials. The site contains minutes of City Commission meetings, ordinances, and important information from all City departments. Major improvements to this site include a live video-cam of our beach area, a mail list subscription service which allows residents to receive copies of newsletters, agendas, minutes, and other City documents on a regular basis, and additional information such as full copies of the Comprehensive Annual Financial Report, Annual Budget, Financial Trends Monitoring Report and the MIS Enterprise Technology Plan. The Information Technology Division recently completed implementation of an interactive voice response system allowing for utility customers to view their account information and make payments over the phone and through the website. The system also allows for contractors with building permits to schedule inspections and for inspectors to record inspection results either by telephone or through the website. The City has a new 10-year cable franchise agreement and an institutional network agreement (I-Net Agreement) which provides fiber optic services to our remote City sites and the capability of the City to produce television coverage of municipal activities. The completion of this fiber optic infrastructure allows the City to transmit at 1 Gbps (1 billion bits per second). The Finance Department has issued an Information Technology Division -Enterprise Technology Plan for Fiscal Years 2007-2011. This plan actually includes four (4) different plans to include the MIS Strategic Plan, MIS Tactical Plan, MIS Business Interruption/Continuity Plan, and the MIS Annual Froject Work Plan. This plan received the honor of being published on the International City Manager's Association (ICMA) technology website thereby receiving national recognition. The Finance Department-Information Technology Division recently received national recognition for its 3rd place award in the Digital Cities Survey from the Center for Digital Government for cities under 75,000 in population. This award recognizes our efforts and successes to provide information and services to the public through our website technology, recognizes our technology infrastructure improvements, and our long-range planning as seen in our 5-year Enterprise Technology Plan. Freviously, the IT Division received two consecutive l~r place awards. These awards have been presented to the City at the National League of Cities conferences. The City Commission approved a project to provide city-wide wireless technology with free wi-fi services for the downtown corrider on Atlantic Avenue from I-95 to the beach. We are presently in negotiations with ePath to provide these services. This project had been delayed due to receiving pole attachment agreements with Florida Power & Light for the wireless devices throughout the City. This project is anticipated to be completed in FY2008. The Finance Department Utility Customer Service Division is completing the installation of radio-read water meters east of the Intracoastal Waterway. The Finance Department is implementing pension administration software which will also include a wel~based interactive site for employees and retirees to receive information, calculate future retirement amounts, and provide information for our annual actuarial reports. GENERAL FINANCIAL INFORMATION Internal Accounting Controls In the development and evaluation of the City's accounting and financial reporting systems, consideration is given to the adequacy and accuracy of the internal accounting controls. These controls are designed to provide reasonable, but not absolute, assurance that the assets of the City are safeguarded against loss from unauthorized use or disposition and that there are reliable financial records for the preparation of financial statements and for the accountability of those assets. All internal control evaluations utilize these criteria. We believe that the City's system of internal accounting controls adequately safeguards the assets of this City and provides reasonable assurance of the proper recording of financial transactions. Single Audit As a recipient of Federal, State and County financial assistance, the City is also responsible for ensuring that an adequate system of internal controls is in place to maintain compliance with applicable laws, regulations and guidelines related to those programs. This internal control system is subject to periodic evaluation by management. As a part of the single audit process, tests are made to determine the adequacy of the internal control structure, including the portion related to federal financial assistance programs, and to determine compliance with applicable laws and regulations. The results of the City's single audit for the fiscal year ended September 30, 2007 disclosed no instances of material weaknesses in the internal control structure and disclosed no significant violation of applicable laws and regulations. Bud~etary Control The City maintains a system of budgetary controls within its accounting and financial management systems. The objective of these budgetary controls is to monitor compliance with legal provisions embodied in the annual appropriated budget approved by the City Commission. Appropriated budgets are legally required to be adopted for the General Fund. Nonappropriated budgets, which are not legally required to be adopted, are prepared for Special Revenue Funds, Enterprise Funds and Internal Service Funds. The level of budgetary control is at the division and departmental level. As part of the budgetary control system, an encumbrance system is utilized. An encumbrance is a commitment to acquire goods or services (purchase order) which have not been paid for at a particular point in time. For operating purposes, outstanding encumbrances lapse at year-end and are then reappropriated as part of the new year budget. Blanket purchase orders are closed at year-end and are not reappropriated. Cash Management The City has a Banking Services Agreement with a local banking institution based upon competitive bidding of its banking services. The City uses apooled-cash concept for all operating funds with the exception of the pension trust plans which are administered by professional money managers and performance monitors. The deposits and investments of the City are safeguarded by utilizing State approved public depositories and by investing in fully collateralized instruments as required by the State of Florida. OTHER INFORMATION Indenendent Audit Florida Statutes Chapter 166 requires that the City be audited on an annual basis by independent certified public accountants. The certified public accounting firm of Caler, Donten, Levine, Druker, Porter & Veil, P.A. was selected to perform the audit of the City's financial statements. In addition to meeting the requirements set forth in the Florida Statutes, the audit was also designed to meet the requirements of the Federal and Florida Single Audit Act and the related OMB Circular A-133. The auditors' reports related to the single audit are included in the Compliance Section. Financial Statement Awards The Government Finance Officers Association of the United States and Canada awarded a Certificate of Achievement for Excellence in Financial Reporting to the City of Delray Beach, Florida, for its CAFR for the fiscal year ended September 30, 2006. This was the 23rd consecutive year the City received this prestigious award. This award is the highest form of recognition in governmental accounting and financial reporting. Its attainment represents a significant accomplishment for the City and indicates that the contents of the CAFR conformed to strict program standards and satisfied U.S. Generally Accepted Accounting Frinciples (GAAP) and applicable legal requirements. A certificate is valid for a period of one year only. We believe our current report continues to conform to the requirements of the certificate program, and we will submit it to the GFOA to determine its eligibility for the Certificate of Achievement. ACKNOWLEDGMENTS A Comprehensive Annual Financial Report of this type and depth, illustrating the results of operations of the entire City and its various diversified funds and activities, could not have been prepared so completely and professionally without the dedication and efficiency of the entire Finance Department. The efforts of Milena Walinski, Assistant Finance Director, and her entire Financial Services Division and Rebecca O'Connor, Treasurer, deserve special individual recognition. We believe this report clearly illustrates that the City of Delray Beach has developed and continues to maintain a strong financial condition and we wish to thank the City Commission, City Manager and the citizens of the City of Delray Beach for their continued support for fiscal responsibility. It is with great pride that we present this Comprehensive Annual Financial Report at this time. Respectfully submitted, ~~ Joseph M, o Finance Director Milena Walinski, CGFO Assistant Finance Director The Government Finance Officers Association (G.F.O.A.) of the United States and Canada awarded a Certificate of Achievement for Excellence in Financial Reporting to the City of Delray Beach, Florida, for its Comprehensive Annual Financial Report (C.A.F.R.) for the fiscal year ended September 30, 2006. In order to be awarded a certificate, a governmental unit must publish an easily readable and efficiently organized Comprehensive Annual Financial Report, whose contents conform to program standards. Such reports must satisfy both Generally Accepted Accounting Frinciples and applicable legal requirements. A certificate is valid for a period of one year only. We believe our current report continues to conform to certificate program requirement, and we are submitting it to G.F.O.A. to determine its eligibility for another certificate. Certificate of Achievement for Excellence in Financial Reporting Presented to City of Delray Beach Florida For its Comprehensive Annual Financial Report for the Fiscal Year Ended September 30, 2006 A Certificate of Achievement for Excellence in Financial Reporting is presented by the Government Finance Officers Association of the United States and Canada to government units and public employee retirement systems whose comprehensive annual financial reports (CAFRs) achieve the highest standards in government accounting and fmancial reporting. a ~-~ ~ s ~ ~ ~, ~~, $~ President ~~~~' Executive Director Cl'1'Y Ol+' UELKAY BEACH, I+'LOKIUA L1S'1' Ol+' PKINCIPAL Ol+'l+'1ClALS September 30, ?007 Cl'1'Y CO~~I~~IlSS10N ~lavor ............................................................_.................................................................................Kiln h;llis ~'ice-~lavor ..........................................................................................................................................1+'red l+'elcer Uepul~ ~'ice-~la~or .............................................................................................................. .Brenda l~lonla~~ue Commissioner ..............................................._........................................................................... ...Gard l~;liopoulos Commissioner ............................................................................................................................ fit oodie ~IcUufl'ie Cl'1'Y S'1'Al+'l+ City ~lana~er ..............................................................................................................................David '1'. Harden Cily ,alLornev ......................................................................... ......_.................................................Susan A. Kubv Assistant City ~~lana~er ........................................................ .................................................Koberl A. Barcinski Assistant City ~~lanager .............................................................................................................Douglas E. Smith City Clerk ............................................................................._ ...................................................Chevelle U. Nubia ~~OI)11)llll)IlV 11)1prOVe1)lel)1 DlreClol' ................................................................................................I,lllil ~~. Bllllel' Environmental Services Uireclor ......................................... .....................................................Kichard C. Hasko l+'inance Uireclor .......................................................................................................................Joseph ~I. Salford Hire Chiel' ..................................................................._...................................................................I~errv B. Moen Human Kesow•ces Uireclor ......................................................................................................Blvice Koeser Parks and Kecrealion Uireclor .................................................................................................Joseph H. ~~Veldon Planning and %ouing Uireclor .................................................................................................Paul Uorling Police Chiel' ..........................................................................._........................................Joseph L. Schroeder 111 City Organizational Chart CITIZENS Mayor Advisory City Boards Commission City Manager City Attorney Assistant Assistant City Manager City Manager Delray GoN Courses Beach Stadium City Finance Police Clerk Commission Accounting Administration Secretariat Records Treasury Support Management Budget Investigation Purchasing District 1 MIS District 2 Utilities Customer District 3 Service Tennis Public Facilities Information Fire Community Planning and Parks and Improvement Zoning Recreation Administration Administration Current Administration Planning Operations Building Long Range Parks Inspection Planning Maintenance Emergency Code Recreation Management Enforcement Fire Community Cemetery Safety Development Highland Recycling Marina Beach Environmental Services Public Utilities Engineering Stormwater Administration And Capital Human Resources Personnel Grants and Training Z Risk Management Public Works Adminisiratior Fleet Maintenance Z Stormwater Systems Maintenance X11 Financial Section ~~ ~I _ ~' Independent Auditor's Report The Honorable Mayor and City Commission City of Delray Beach, Florida We have audited the accompanying financial statements of the governmental activities, the business-type activities, the aggregate discretely presented component units, each major fund and the aggregate remaining fund information of the City of Delray Beach, Florida, as of and for the year ended September 30, 2007, which collectively comprise the City's basic financial statements as listed in the table of contents. These financial statements are the responsibility of the management of the City of Delray Beach, Florida. Our responsibility is to express opinions on these financial statements based on our audit. We did not audit the financial statements of the Police and Firefighters Retirement System Fund, a fiduciary fund of the City, which represents 60% and 66%, respectively, of the total assets and total additions of the Fiduciary Funds of the City, and the Delray Beach Downtown Development Authority, a discretely presented component unit of the City, which represents .5% of the net assets and .8% of the change in net assets of the City's discretely presented component units. Those financial statements were audited by other auditors whose reports thereon have been furnished to us, and our opinion, insofar as it relates to the amounts included for the Police and Firefighters Retirement System Fund and Delray Beach Downtown Development Authority, is based solely on the reports of the other auditors. We conducted our audit in accordance with U.S. generally accepted auditing standards and the standards applicable to financial audits contained in Government Auditing Standards, issued by the Comptroller General of the United States. Those standards require that we plan and perform the audit to obtain reasonable assurance about whether the financial statements are free of material misstatement. An audit includes consideration of internal control over financial reporting as a basis for designing audit procedures that are appropriate in the circumstances, but not for the purpose of expressing an opinion on the effectiveness of the City's internal control over financial reporting. Accordingly, we express no such opinion. An audit also includes 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, as well as evaluating the overall financial statement presentation. We believe that our audit provides a reasonable basis for our opinions. In our opinion, based on our audit and the report of other auditors, the financial statements referred to above present fairly, in all material respects, the respective financial position of the governmental activities, the business-type activities, the aggregate discretely presented component units, each major fund and the aggregate remaining fund information of the City of Delray Beach, Florida, as of September 30, 2007, and the respective changes in financial position and cash flows, where applicable, thereof for the year then ended in conformity with U.S. generally accepted accounting principles. In accordance with Government Auditing Standards, we have also issued our report dated March 20, 2008 on our consideration of the internal control over financial reporting of the City of Delray Beach, Florida, and on our tests of its compliance with certain provisions of laws, regulations, contracts and grant agreements and other matters. The purpose of that report is to describe the scope of our testing of internal control over financial reporting and compliance and the results of that testing, and not to provide an opinion on 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 assessing the results of our audit. The management's discussion and analysis and the required supplementary infornuation on pages 3 through 15 and pages 60 through 63, respectively, are not a required part of the basic financial statements, but are supplementary information required by U.S. generally accepted accounting principles. We have applied certain limited procedures, which consisted principally of inquiries of management regarding the methods of measurement and presentation of the required supplementary 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 comprise the basic financial statements of the City of Delray Beach, Florida. The introductory section, the combining and individual fund financial statements and schedules and the statistical section listed in the table of contents are presented for purposes of additional analysis and are not a required part of the basic financial statements of the City of Delray Beach, Florida. The accompanying Schedule of Expenditures of Federal Awards and State Financial Assistance is presented for purposes of additional analysis as required by U.S. Office of Management and Budget Circular A-133, Audits of States, Local Governments, and Non-Prot Organizations, and Chapter 10.550, Rules of the Auditor General, and is also not a required part of the basic financial statements of the City of Delray Beach, Florida. The combining and individual fund financial statements and schedules and the Schedule of Expenditures of Federal Awards and State Financial Assistance have been subjected to the auditing procedures applied in the audit of the basic financial statements and, in our opinion, are fairly stated in all material respects in relation to the basic financial statements taken as a whole. The introductory section and 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. cam, ~~, ~., bum, I-~..-~ ~ (/.~ P.A, March 20, 2008 Management's Discussion and Analysis Representing the City of Delray Beach (City) management team, the Finance Department offers readers of the City's financial statements this Management's Discussion and Analysis (MD8~A) which is a narrative overview and analysis of the overall financial activities of the City for the fiscal year ended September 30, 2007. We encourage readers to consider the information presented herein in conjunction with additional information that we have furnished in our Transmittal Letter, which can be found on pages i through viii of this report and the actual detailed financial statements beginning on page 16. The City has implemented Governmental Accounting Standards Board (GASB) Statement No. 34 entitled "Basic Financial Statements-and Management's Discussion and Analysis-for State and Local Governments". Statement No. 34, which significantly changes the way in which local governments report their finances, emphasizes the government as a whole rather than just a set of individual fund types with separate fund information and requires the presentation of certain comparative information for the current and prior years on a full accrual basis. ^ The overall financial condition of the City's General Fund operations is now being impacted by the real estate market and tax reform legislation as indicated by a current 4.21~o increase in taxable assessed property values, from $8,362,590,396 to $8,714,375,264 or an increase of $351,784,868. Prior to this year the City had six consecutive years of double digit increases in taxable assessed property values. City of Delray Beach- Taxable Assessed Values Fiscal Year Taxable Assessed Value % Increase Tax Revenue** 1998 2,758,936,396 4.840 21,017,595 1999 2,963,826,969 7.430 22,032,615 2000 3,169,823,854 6.950 23,429,259 2001 3,393,573,636 7.Ob~o 26,042,931 2002 $3,759,600,909 10.790 $29,011,246 2003 4,151,462,658 10.420 32,069,035 2004 4,705,803,129 13.350 36,355,993 2005 5,377,691,728 14.280 41,584,718 2006 $6,451,499,363 19.970 $49,825,341 2007 8,362,590,396 29.620 59,091,001 2008* 8,714,375,264 4.210 54,525,950 * Projected ** Tax Revenue includes the collection of delinquent taxes The State of Florida has been increasingly concerned over the rapid rise in property values over a relatively short period of time. The State policy of assessing properties at 1000 of market value means that these property costs are also reflected in property assessed values. The electorate of the State passed a "Save our Homes" amendment effective January, 1994 which placed a 3% annual cap on homesteaded residential taxable assessed values (taxable assessed value cannot increase more than 3~0 or the consumer price index, whichever is less). However, there is no cap on the taxable assessed values onnon-homestead residential, commercial and industrial properties. This rapid rise in property valuations has also presented several problems to the City. First, the City is experiencing problems in hiring of potential employees that do not presently live in the area. Those prospective employees are finding it difficult to afford housing in this area since they would be required to purchase housing at the current market rates and pay ad valorem taxes and property insurance based upon those values. Secondly, non-homestead residential properties, businesses and commercial establishments are being charged inordinately high property taxes due to the rapid escalation of property values with no cap (only on homestead properties) and this could ultimately affect the profitability of current businesses and impact new business and commercial firms from locating in this area. The increased values of property are also causing City costs to escalate for land acquisitions, building purchases and construction costs. The City has had to increase borrowing on the 2004 General Obligation Bond projects due to these increased costs. The City is aggressively trying to implement programs to create affordable housing units within the City. ^ The State of Florida imposed a millage rollback rate less 9~o cap on the City of Delray Beach operating millage rate this current year. The millage tax rate was reduced from 7.3000 to 6.5783. When combined with the relatively low increase in taxable assessed value for the year, the property tax collections dropped $4,565,051 from $59,091,002 to $54,525,950. City of Delray Beach- Millage Rates Fiscal Year O eratin Milla a Debt Service Milla a Total Milla e 1998 6.9500 .8500 7.8000 1999 6.9100 .7900 7.7000 2000 6.9100 .7400 7.6500 2001 7.2600 .6900 7.9500 2002 7.3700 .6300 8.0000 2003 7.4400 .5600 8.0000 2004 7.5200 .4800 8.0000 2005 7.4500 .5500 8.0000 2006 7.4500 .5500 8.0000 2007 6.8600 .4400 7.3000 2008 6.1449 .4334 6.5 783 The City established a community redevelopment district in 1985 which is managed by the Community Redevelopment Agency (CRA). The CRA receives tax increment financing (TIF) from the City and Palm Beach County. The City initially receives all tax revenues in this district. The City must then transfer to the CRA all tax revenues above the 1985 taxable assessed values ($245,631,067) times the current operating millage. The taxable assessed valuation of property located in the Community Redevelopment Agency (CRA) district increased by $93,378,111 or 5.63~o in the current valuation, from $1,657,718,740 to $1,751,096,851. When this value, less the 1985 value of $245,631,067, is applied to the operating millage of 6.1449 the tax revenue to the CRA is actually reduced from $9,202,575 for 2007 to $8,788,390 for 2008. CRA- Taxable Assessed Value Fiscal Year Taxable Assessed Value ~o Increase Tax Revenue 1998 338,086,824 3.730 610,439 1999 $375,964,132 1 1.200 $855,571 2000 407,135,136 8.290 1,060,193 2001 439, 765,167 8.01 ~0 1,338,943 2002 530,525,688 20.640 1,994,690 2003 $578,492,583 9.040 $2,351,170 2004 $714,736,811 23.550 $3,351,291 2005 886,274,285 24.OO~o 4,534,152 2006 1,205,957.704 36.070 6,796,712 2007 1, 6 57, 718, 740 35.030 9,202,575 2008* 1, 751,096,851 5.630 8,788,390 *Projected 4 The assets of the City (Primary Government) exceeded its liabilities at September 30, 2007 by $197,622,427 (Total Net Assets) compared to $180,120,422 at September 30, 2006. Of this amount, $63,901,410 (Unrestricted Net Assets) may be used to meet the government's ongoing obligations to citizens and creditors compared to $56,278,312 last year. Of this amount, $23,371,450 is from governmental activities and $40,529,960 is from business-type activities. These balances are shown on the table entitled "Statement of Net Assets". The total net assets of the City (Primary Government) increased by $17,502,005 of which $9,546,639 of this increase is attributable to governmental activities and the remaining $7,955,366 to business-type activities. This change in net assets is shown on the table entitled "Statement of Activities". At September 30, 2007, the City's governmental funds reported combined ending fund balances of $47,780,625 compared to $32,207,851 at September 30, 2006, an increase of $15,572,774. This was largely due to the sale of the 2007 Utility Tax Revenue Bonds in the amount of $23,635,000 and original issue premium of $760,787 for total proceeds of $24,395,787. In addition, the City had draws on the Line of Credit Revenue Note in the amount of $6,375,000. Approximately 890 of the $47,780,625 combined ending fund balances or a total amount of $42,534,504 is available for spending at the government's discretion (Unreserved Fund Balancel. Of this amount, $18,828,235 is in the General Fund, $20,216,204 is in Capital Projects Funds and $3,490,065 is in Special Revenue Funds. These balances are shown on the table entitled "Balance Sheet- Governmental Funds". At September 30, 2007, Unreserved Fund Balance for the General Fund was $18,828,235 or 19.860 of total 2007 General Fund expenditures of $94,819,115. This compares to $15,897,365 in Unreserved Fund Balance last year which represented 18.510 of total expenditures of $85,892,679. The City financial policy is to strive to maintain between 15~~25~0 of Unreserved Fund Balance compared to the expenditure budget as an acceptable reserve for first quarter cash flow (there are no tax remittances during the first several months of a fiscal year) and for unanticipated expenses such as storm damage costs, uninsured legal claims and other unforeseen expenses. Overview of the Financial Statements This management discussion and analysis report is intended to serve as an introduction to the City's basic financial statements. The City's basic financial statements consist of three parts: 1) government-wide financial statements, 2) fund financial statements, and 3) notes to the financial statements. This report also contains other supplementary information that explains in more detail some of the information in the financial statements. Government-Wide Financial Statements The government-wide financial statements are designed to provide readers with a broad overview of the City's finances and to report information about the City in a manner similar to those reports issued and used by private sector companies. The Statement of Net Assets includes all of the City's assets and liabilities and provides information about the nature and amounts of investments in resources (assets) and the obligations to creditors (liabilities). These assets and liabilities are presented in a classified format, which distinguishes between current and long-term assets and liabilities. The difference between assets and liabilities (net assets) provides the basis for computing rate of return, evaluating the capital structure of the City, and assessing the liquidity and financial flexibility of the City. Over time, increases or decreases in net assets may help to serve as a useful indicator of whether the overall financial position of the City is improving or deteriorating. The Statement of Activities presents information showing how the City'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). Both of the government-wide financial statements distinguish functions of the City 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 include such areas as General Government, Public Safety, Physical Environment and Parks and Recreation. The business-type activities of the City that rely on user fees and charges include areas such as Water and Sewer, Municipal Golf Course, Lakeview Golf Course, City Marina, Sanitation and Stormwater Utility operations. Both of the government-wide financial statements include not only the City itself (known as the Primary Government), but also a legally separate Community Redevelopment Agency (CRA) and a Downtown Development Authority (DDA) for which the City is financially accountable (known as component units). Financial information for these component units are reported separately from the financial information presented for the primary government itself. The government-wide financial statements can be found on pages 16 through 17 of this report. 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. As a result of this difference in focus, a reconciliation is provided between the fund financial statements and the government-wide financial statements in order to better understand the long-term impact of short-term financing decisions. The City maintains thirteen individual governmental funds. Information is presented separately for the General Fund, the Capital Improvement Fund, and the 2004 General Obligation Bond Fund as they are considered major funds. Data for the other governmental funds are aggregated into a single presentation. Individual fund data for each of these non-major governmental funds is provided in the form of combining statements elsewhere in this report. The basic governmental fund financial statements can be found on pages 18 through 21 of this report. Proprietary Funds The City maintains two different types of proprietary funds, enterprise and internal service funds. Enterprise funds are used to report business-type activities that charge fees to customers for the use of specific goods or services. These statements are prepared on an accounting basis that is similar to the basis used to prepare the government-wide financial statements. The City uses enterprise funds to account for its water and sewer utility, the municipal golf course, the Lakeview golf course, the marina, the sanitation operations and the stormwater utility. 6 Internal service funds are used to account for the financing of insurance services and central garage services provided to other departments of the City on a cost- reimbursement basis. Because these services predominantly support governmental rather than business-type functions, they have been included within the governmental activities in the government-wide financial statements. Proprietary fund financial statements provide the same type of information as the government- wide financial statements, only in more detail. The proprietary fund financial statements provide separate information for the water and sewer utility system which is considered to be a major fund of the City. Conversely, the remaining enterprise funds are considered non-major funds and the internal service funds are combined into a single, aggregated presentation in the proprietary fund financial statements. Individual fund data for the non-major enterprise funds and the individual internal service funds are provided in the form of combining statements elsewhere in this report. The City's proprietary fund financial statements can be found on pages 22 to 24 of this report. Fiduciary Funds Fiduciary funds are used to account for resources held in trust 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's operations. The accounting methods used for fiduciary funds are similar to that used for proprietary funds. The City's fiduciary fund financial statements can be found on pages 25 to 26 of this report. Notes to the Financial Statements The notes to the financial statements provide additional information and clarification that are essential to a full understanding of the data presented in the government-wide and fund financial statements. The notes to the financial statements can be found beginning on page 27 of this report. In addition to the basic financial statements and accompanying notes, this report also presents certain required supplementary information including budgetary comparison schedules to demonstrate compliance with the annual appropriated budget adopted for the General Fund and information concerning the City's progress in funding its obligation to provide pension benefits to its employees. Required supplementary information can be found on pages 60 through 63 of this report. The combining statements referred to earlier in connection with non-major governmental, proprietary and fiduciary funds are presented immediately following the required supplementary information. Combining and individual fund statements and schedules can be found beginning on page 64 of this report. Government-Wide Financial Analysis Our analysis of the government-wide financial statements of the City begins below. One of the most important questions asked about the City's finances is "Is the City of Delray Beach, as a whole, better off or worse off as a result of this year's activities?" The Condensed Statement of Net Assets and the Condensed Statement of Activities will report information about the City's activities in a way that will help answer this question. These two statements report the net assets of the City and the changes in them. You can think of the City's net assets -the difference between assets and liabilities - as one way to measure the financial health or financial condition. Over time, increases of decreases in the City's net assets are one indicator of whether its financial health is improving or deteriorating. However, you will also need to consider other non- financial factors such as changes in economic conditions, regulations, and new or changed government legislation. To begin our analysis, a summary of the City's government-wide statement of net assets is presented in Table A-1. Table A-1 Condensed Statement of Net Assets (S in millions). Governmental Business-type Activities Activities Totals 2007 2006 2007 2006 2007 2006 Current and other assets $67.0 $54.6 $50.9 $39.2 $117.9 $93.8 Capital assets 124.8 109.4 103.0 98.1 227.8 207.5 Total Assets 191.8 164.0 153.9 137.3 345.7 301.3 Current liabilities 9.9 13.0 8.3 7.6 18.2 20.6 Non-current liabilities 86.6 65.3 43.2 35.4 129.8 100.7 Total Liabilities 96.5 78.3 51.5 43.0 148.0 121.3 Net Assets: Invested in capital assets, net of related debt 51.0 55.5 54.8 59.0 105.8 114.5 Restricted 20.9 8.0 7.1 1.3 28.0 9.3 Unrestricted 23.4 22.2 40.5 34.0 63.9 56.2 Total Net Assets 95.3 85.7 102.4 94.3 197.7 180.0 The overall financial condition of the City improved slightly from the previous fiscal year as evidenced by this Table A-1. As shown in Table A-1 net assets amounted to $197.7 million in FY 2007 compared to $180.0 million in FY2006. A significant portion of the City's net assets ($105.8 million or 53.50 of the Total Net Assets) reflects its investment in capital assets (e.g., land, buildings, machinery, and equipment) net of any related debt 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's investment in its capital assets is reported net of related debt, it should be noted that the resources needed to repay this debt must be provided from other sources, since the capital assets themselves cannot be used to liquidate these liabilities. An additional portion of the City's net assets ($28.0 million or 14.20 of the Total Net Assets) represents resources that are subject to restrictions on how they may be used. These restrictions are usually for debt service or capital project commitments. The remaining balance of $63.9 million (32.30 of the Total Net Assets) is unrestricted net assets and may be used to meet the City's ongoing obligations to citizens and creditors. While the statement of net assets shows the change in financial position of net assets, the Condensed Statement of Activities provides answers as to the nature and the source of these changes. This is shown below in Table A-2. Table A-2 Changes in Net Assets Condensed Statement of Activities (S in millions) Governmental Business-type Activities Activities Totals 2007 2006 2007 2006 2007 2006 Revenues Program Revenues: Char es for services 12.4 12.1 38.9 34.4 51.3 46.5 O eratin rants, contributions 7.1 9.5 1.6 7.8 8.7 17.3 Ca ital rants, contributions 1.4 .3 1.4 l .l 2.8 1.4 General Revenues: Pro ert Taxes 59.1 49.8 - - 59.1 49.8 Other taxes 14.9 15.0 - - 14.9 15.0 Inter overnmental 6.9 7.4 - - 6.9 7.4 Other 8.5 13.2 .7 .5 9.2 13.7 Total Revenues 110.3 107.3 42.6 43.8 152.9 151.1 Ex enses General overnment 25.3 20.9 - - 25.3 20.9 Public safe 55.9 49.4 - - 55.9 49.4 Physical environment 7.2 5.9 - - 7.2 5.9 Parks and recreation 14.7 12.4 - - 14.7 12.4 Interest on Ion -term debt 1.3 2.8 - - 1.3 2.8 Water and sewer - - 22.4 20.4 22.4 20.4 Munici al olf course - - 3.4 3.5 3.4 3.5 Lakeview olf course - - .7 .7 .7 .7 Cit marina - - .l .l .l .l Sanitation - - 2.9 9.1 2.9 9.1 Stormwater utili - - 1.3 1.0 1.3 1.0 Total Expenses 104.4 91.4 30.8 34.8 135.2 126.2 Change in Net Assets Before Transfers 5.9 15.9 11.8 9.0 17.7 24.9 Transfers 3.7 2.0 (3.7) (2.0) - - Increase in Net Assets 9.6 1 7.9 8.1 7.0 1 7.7 24.9 Be innin Net Assets 85.7 67.8 94.3 87.3 180.0 155.1 Endin Net Assets 95.3 85.7 102.4 94.3 197.7 180.0 Governmental activities increased the City's net assets by $9.6 million. This net increase in net assets is a result of the following: • Increase of $9.3 million in property taxes due to increased valuations and new construction activity even though the millage rate was reduced from 8.0 mils to 7.3 mils. Taxable valuation increased 30.360. • Expenses for General Government increased $4.4 million due to the increase in transfer to component units of $2.4 million primarily for the transfer of tax increment property tax funds to the CRA. Business-type activities increased the City's net assets by $8.1 million. This net increase in assets is a result of the following: 9 Increase of $4.5 million in charges for services due to an 18~o increase in water and sewer rates. These rate increases were for additional capital requirements for the water reuse expansion. Additional revenues were collected due to the surcharge imposed on rates due to water restrictions from the South Florida Water Management District. For example, the Phase II water restrictions called fora 30~o surcharge on water consumption rates. • Decrease of $6.2 million in Sanitation revenue and expenses since FY2006 included significant hurricane debris-related revenues and expenses that did not reoccur in FY2007. Governmental Funds Maior Fund Information (S in millions) General Fund Capital Im rovement Fund 2004 G.O. Bond Fund Fiscal Year 2007 Revenues 101.3 1.7 1.4 Ex enditures 94.8 5.3 22.2 Other financin sources uses 3.7 17.5 19.9 Chan a in Fund Balances $2.8 $13.9 $.9 Fiscal Year 2006 Revenues 91.9 2.1 8.9 Ex enditures 85.9 6.2 23.6 Other financin sources uses 3.1 2.4 1.4 Chan a in Fund Balances $2.9 $1.7 $13.3 General Fund The General Fund, which is the primary operating fund of the City not supported by user fees, recognized $101,338,503 in total revenues offset with $94,819,115 in expenditures and $3,709,624 in other financing uses. This resulted in an excess of revenues over expenditures and other financing uses of $2,809,764. Fund Balance at the beginning of the year was $20,576,411 and, when combined with the current year resulted in an end of year Fund Balance of $23,386,175. Of this amount, $18,828,235 is Unreserved Fund Balance which represents 19.860 of our present expenditure levels. This compares to an Unreserved Fund Balance last year of $15,897,365 which represented 18.510 of last year's expenditures. Our internal financial policy is to maintain 15-25~ of our expenditures in Unreserved Fund Balance for first quarter cash flow, uninsured legal claims and emergency purposes. Capital Improvement Fund The Capital Improvement Fund recognized $1,713,055 in total revenues and $17,508,574 in other financing sources offset with $5,293,168 in expenditures. This resulted in an excess of revenues and other financing resources over expenditures of $13,928,461. Fund Balance at the beginning of the year was $3,870,617 and, when combined with the current year, resulted in an end of year Fund Balance of $17,799,078. 2004 General Obligation Bond Fund The City sold $14 million in Parks and Recreation and Cultural Projects General Obligation Bonds on September 30, 2004 and the final $10 million August 26, 2005. This is the total of the $24 million in bonds that were approved by the electorate on January 20, 2004. These bonds are being used to finance all or a portion of the costs of acquisition and construction, reconstruction and 10 equipping of new and certain existing parks (not to exceed $9,000,000), new and existing recreation centers (not to exceed $7,000,000), a parking garage and capital improvements as part of the Old School Square (not to exceed $7,000,000), the furnishings and fixtures for the new library (not to exceed $1,000,000), and to pay the costs of issuance of the bonds including the premium fee for the bond insurance policy. The City sold an additional $24,635,000 in the 2007 Utilities Tax Revenue Bonds, Series 2007, of which $18, 316,640 was to supplement the 2004 General Obligation Bond construction projects. This fund had revenues and other financing sources of $21,273,887 and expenditures of $22,232,793 for the year resulting in an excess of expenditures over revenues and other financing sources of $958,906 and a corresponding ending Fund Balance of $1,639,752 compared to a beginning Fund Balance of $2,598,658. Proprietary Funds Operatina Income Chanae in Net Assets $ in Millions 2007 2006 2007 2006 Enter rise Funds Water/Sewer 6.2 5.0 7.6 5.8 Municipal Golf Course .3 .2 .2 .1 Lakeview Golf Course .2 .2 .1 .2 Cit Marina .0 .0 .0 .0 Sanitation .2 .9 .2 .2 Stormwater Utilit 1.2 .7 .2 .8 Internal Service Funds Insurance 1.5 2.3 3.4 2.5 Central Gara e .1 .6 .8 1.0 Water and Sewer Fund Water/sewer service fee revenues increased from $25.7 million to $29.2 million reflecting the fact that the City increased its water rates and sewer rates by 18~o effective October 1, 2006 primarily due to the planned improvements for expanded reclaimed water use. Billed water consumption decreased by 608 million gallons for the year ended September 30, 2007 or 12.55 under the previous year. Consumption decreases can be attributed to water restrictions imposed by the South Florida Water Management District due to a low water table in Lake Okeechobee resulting from local drought conditions. In addition, these restrictions caused a surcharge to be imposed on our water rates (30~o surcharge for Phase II restrictions). Other Enterprise Funds The City has five (5) other non-major enterprise funds consisting of the Municipal Golf Course, Lakeview Golf Course, City Marina, Sanitation and the Stormwater Utility. The Sanitation Fund generated an operating income of $.2 million versus a loss of $.9 million last fiscal year primarily due to absorbing the unreimbursed operating costs associated with debris removal. The General Fund subsequently reimbursed the Sanitation Fund $.7 million. The recent FEMA announcement that its 90~o funding formula is changing to 100~o should produce further revenues for this fund. The Municipal Golf Course has an operating income this year of $346,179 compared to $203,056 last year. The Lakeview Golf Course has an operating income of $155,118 versus $150,220 last fiscal year. 11 The Marina has an operating income this year of $40,882 compared to $35,265 last year. The Stormwater Utility has an operating income this year of $1,200,265 compared to $695,212 last fiscal year. FY2007 rates were increased 1 1.50 or $4.50 per equivalent residential unit (ERU). Internal Service Funds The Insurance Fund is used to account for all personnel insurances (health, life, disability) and property and casualty insurance. All property claims from Hurricane Frances, Jeanne and Wilma are processed through this fund. Claims costs have been essentially paid for either from FEMA, the State of Florida, or from our property insurance carrier. FEMA recently announced that Hurricane Wilma claims not covered by insurance will be reimbursed 1000. Hurricane Wilma claims amounted to $11.9 million of which $6.1 million was debris related and $2.3 million was covered by the Federal Highway Administration or insurance proceeds with the remainder covered by FEMA. The Insurance Fund also recorded an increase in our required self-insured incurred but not reported (IBNR) claims liability from $3,942,628 to $5,218,709 for property, health and worker's compensation claims. All required reserves are established by outside actuaries. The City transferred $1,988,086 of accumulated reserves from the Insurance Fund (excess general liability and worker's compensation reserves) to the General Construction Fund for a North Wing Expansion project, a new Information Technology building and for two (2) storage area network (SAN) units in the Information Technology Division. After these transfers and after the required reserves, the Insurance Fund has $2.6 million in Unrestricted Net Assets. There were no significant changes in the Central Garage Fund this year compared to last year. General Fund Budgetary Highlights The City budgeted revenues increased from $98,055,710 to $99,763,756 from the original to the final budget. The City actually recorded $99,616,343 in revenues compared to the final budget. Revenues were therefore $147,413 under the final budget. Electric franchise fees were $314,411 under budget, electric utility tax was $135,737 under budget, communications services tax was $73,608 over budget and fire emergency transport fees were over budget by $465,950. The City's budgeted expenditures and other net financing uses increased from $98,055,710 to $100,118,025 from the original to the final budget. The City actually recorded $96,835,422 in expenditures to include encumbrances and other financing uses. Expenditures were therefore $3,282,603 under the final budget. General Government -The departments in this category were $733,812 under budget for the year. The City did not staff the Creative City Collaborative in the City Commission budget resulting in a savings of $202,006. In addition, a federal lobbyist contract was not awarded saving $63,423. Human Resources Department did not order a budgeted HR Administration software package for $75,000. The Information Technology Division was $182,229 under budget primarily from lower maintenance costs, lower membership fees, and lower Internet access fees. Public Safety -The departments in this category were $1,524,417 under budget for the year. The bulk of this difference is due to unfilled positions throughout the year and related costs such as benefits, uniforms, vehicles and other operational expenses. The average unfilled positions for the year were: Police Department - 14; Fire Department - 5; and, Community Improvement Department - 2. The net effect of the excess of revenues over expenditures and other financing sources was a $2,780,921 addition to Fund Balance for the year ended September 30, 2007. 12 Capital Asset and Debt Administration Capital Assets As of September 30, 2007, the City had $227.7 million invested in a variety of capital assets, as reflected in Table A-3 below, which represents a net increase of $20.2 million or 9.78~o from the end of the previous fiscal year. Additional information and details on capital assets are described more fully in the notes to the financial statements. Table A-3 Capital Assets (S In Millions) Beginning Balance 10/01/2006 Increases Decreases Ending Balance 9/30/2007 Government Activities: Land 33.6 3.4 .2 36.8 Construction in Pro ress 11.3 14.7 5.3 20.7 Non-De reciable Assets 44.9 18.1 5.5 57.5 Buildin s 29.8 1.4 - 31.2 Im rovements Other 68.6 5.3 - 73.9 Equipment 31.8 4.3 (2.9) 33.2 Less: Accumulated De reciation 65.7 7.4 2.1 71.0 De reciable Assets- Net 64.5 3.6 .8 67.3 Capital Assets- Governmental 109.4 21.7 6.3 124.8 Business-T a Activities: Land 5.6 - - 5.6 Construction in Pro ress 2.1 4.5 1.6 5.0 Non-Depreciable Assets 7.7 4.5 (1.6) 10.6 Buildin s 10.6 - - 10.6 Im rovements Other 144.3 4.8 - 149.1 E ui ment 11.8 1.5 .4 12.9 Less: Accumulated De reciation 76.3 4.3 .3 80.3 De reciable Assets- Net 90.4 2.0 .1 92.3 Capital Assets- Business-Type $98.1 $6.5 $1.7 $102.9 Infrastructure assets have been included in the category "Improvements Other". Debt Administration As of September 30, 2007, the City had total debt outstanding of $134.6 million compared to $105.0 million as of September 30, 2006. Of this $134.6 million amount, and gross of any related unamortized premium, discounts or losses on refunding, $34.0 million is general obligation bond debt which is debt backed by the full faith and credit of the City, $38.5 million is special obligation bond debt which is secured by other specified revenue sources or the promise to budget and appropriate sufficient revenues to pay for the debt service, $47.5 million is revenue bonds that are backed by a pledge of water and sewer system and golf course net revenues, $8.4 million is for compensated absences, $5.2 million is insurance claims reserves and $.7 million is for installment agreements that are secured by the promise to budget and appropriate sufficient revenues to pay the debt. 13 Table A-4 Long-Term Liabilities (S in Millions Beginning Balance 10/01/2006 Increases Decreases Ending Balance 9/30/2007 Government Activities: Revenue Bonds 17.5 30.0 9.0 38.5 General Obli ation Bonds 36.0 - 2.0 34.0 Unamortized Premium .7 .8 .1 1.4 Unamortized Loss on Refinancin .7 - .1 .6 Total Bonds Pa able 53.5 30.8 11.0 73.3 Installment A reements .8 - .3 .5 Com ensated Absences 7.0 1.2 .5 7.7 Insurance Claims Pa able 3.9 10.5 9.2 5.2 Governmental Activities 65.2 42.5 21.0 86.7 Business-Type Activities: Revenue Bonds 39.7 12.3 4.5 47.5 Unamortized Premium .5 - .2 .3 Unamortized Loss on Refinancin 1.1 - .3 .8 Total Bonds Pa able 39.1 12.3 4.4 47.0 Installment A reements .1 .2 .1 .2 Com ensated Absences .6 .1 - .7 Business T e Activities 39.8 12.6 47.9 Total Debt Outstandin $105.0 $55.1 $25.5 $134.6 The general obligation bonds of the City maintain an underlying rating of AA- from Standard 8~ Poor's and Al from Moody's Investors Services, Inc. For more detailed information regarding the City's debt and debt financing activity, refer to the notes to the financial statements. Economic Factors and FY 2007-08 Budget and Rates • The City millage rate was reduced from 7.3 mils to 6.5783 mils for the FY 2008 budget for property tax purposes. This was in accordance with the State-imposed rollback less 9~0 tax reform legislation. • A referendum was held January 29, 2008 on certain tax reform initiatives. The electorate passed an additional $25,000 homestead exemption on taxable values from $50,000 to $75,000, portability of Save Our Homes savings (3~o cap on tax increases), a 10~o cap on non-homestead property tax increases, and a $25,000 exemption on non-homestead tangible personal property taxes. The impact of this is estimated to exceed $2.5 million to the FY2009 tax revenues. • The City increased its water and sewer commodity rates by 5~o effective October 1, 2007 to cover anticipated costs of plant expansion and increased treatment for the water reuse program. 14 • The sanitation collection rates increased by 2.b~o effective October 1, 2007. FEMA recently announced that they will change their participation rate from Hurricane Wilma to 1000. This will include all debris costs and uninsured project costs. The City has appealed a $494,000 FEMA audit adjustment for Hurricane Frances. If this appeal is not reversed, the City will have to recover this amount from the debris contractor. • Stormwater utility rates were increased from $4.50 per month per equivalent residential unit to $5.02 per month or 1 1.50. This is the first rate increase since the stormwater rate was initiated. • Health insurance rates were increased by 12~o effective March 1, 2007 and the plan year was extended until May 31, 2008. Requests for Information This financial report is designed to provide a general overview of the City's finances for all those with an interest in the government's finances. Questions concerning any of the information provided in this report or requests for additional information should be addressed to the: Office of the Director of Finance 100 N. W. l 5t Avenue Delray Beach, FL 33444 Phone: (561) 243-7117 15 Basic Financial Statements CITY OF DELRAY BEACH, FLORIDA STATEMENT OF NET ASSETS September 30, 2007 Primary Government Component Units Downtown Community Development Governmental Business-Type Redevelopment Authority Activities Activities Total Agency (C13A) (DDA) ASSETS Cash and cash equivalents $ 53,471,387 $ 2,635,309 $ 56,106,696 $ 2,418,921 $ 66,133 Investments - - - 4,482,146 - Receivables: Accounts, net 3,209,098 2,444,228 5,653,326 1,292,598 - Unbilled accounts - 1,002,173 1,002,173 - - Notesreceivable 5,187,674 - 5,187,674 110,000 - Interestreceivable 891,488 - 891,488 - - Due from primuy government - - - 150,000 - Duefrom other governments 1,903,150 1,903,150 - - Internal balances (407,888) 407,888 - - - Inventoiy 84,022 320,956 404,978 - - Prepaid items 1,512,598 103,923 1,616,521 - 6,999 Net Pension Asset 65,861 - 65,861 - - Deposits - - - 4,085 - Due from component units 270,794 - 270,794 - - Bond issuance costs, net 748,362 221,533 969,895 26,033 - Restricted assets - 20,833,930 20,833,930 212,541 - Capital assets: - Non-depreciable capital assets 57,492,561 10,635,458 68,128,019 22,851,572 - Depreciable capital assets, net 67,321,130 92,334,425 159,655,555 317,450 - Other asset: Investment in regional plant (joint venture) - 22,948,552 22,948,552 - - TotalAssets 191,750,237 153,888,375 345,638,612 31,865,346 73,132 LIABILITIES Accounts payable and accrued expenses 5,864,928 1,233,045 7,097,973 270,723 1,893 Deposits 326,714 1,104,959 1,431,673 184,747 - Uneunedrevenue 3,507,827 48,471 3,556,298 6,153 - Due to component units 150,000 - 150,000 - - Due to primuy government - 270,794 - Payablefromrestrictedassets - 5,995,409 5,995,409 51,116 - Long-term debt: Due within one year 7,105,294 180,046 7,285,340 1,300,000 - Due in more than one year 79,523,978 42,975,514 122,499,492 15,415,000 - Total Liabilities 96,478,741 51,537,444 148,016,185 17,498,533 1,893 NET ASSETS Invested in capital assets, net of related debt 51,049,876 54,782,750 105,832,626 6,423,997 - Restricted for: Debt service 688,181 5,656,710 6,344,891 27,794 - Capital Projects 20,161,989 1,381,511 21,543,500 - - Unrestricted 23,371,450 40,529,960 63,901,410 7,915,022 71,239 Total Net Assets $ 95,271,496 $ 102,350,931 $ 197,622,427 $ 14,366,813 $ 71,239 The notes to the financial statements ue an integral put of this statement 16 C Q r N C N ~ M U H ~ W ~ cn w b ~ O -o H w a ~ /~ ~ ~ ~ U w O ~ w" ~ ~ ~. ~ o U w °o ~~y~/ ~ W ti G ~ per,, C DC = W j ~ C z~ 3 °' .r ' o E'i.~ y G o s A ~ ° ~ ~ ~ A ~ A v~ o .r ~ o p o. 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C7 P:1 U C7 H Z Z CITY OF DELRAY BEACH, FLORIDA BALANCE SHEET GOVERNMENTAL FUNDS September 30, 2007 Major Funds Non-Major Total General Capital 2004 Governmental Governmental Fund Improvement GO Bond Funds Funds ASSETS Cash and cash equivalents $ 34,404,072 $ 12,464,378 $ 1,181,168 $ 202,081 $ 48,251,699 Accounts receivable, net 2,966,805 - 7,000 9,759 2,983,564 Notes receivable 3,976,674 - - 1,211,000 5,187,674 Interestreceivable 891,488 - - - 891,488 Due from other governments 125,792 455,305 851,557 470,496 1,903,150 Due from other funds - 5,188,832 825,351 5,857,476 11,871,659 Inventory 30,486 - - - 30,486 Prepaid items 353,525 54,215 - 1,700 409,440 Due from component units 58,076 208,983 - 3,735 270,794 Total Assets $ 42,806,918 $ 18,371,713 $ 2,865,076 $ 7,756,247 $ 71,799,954 LIABILITIES AND FUND BALANCES LIABILITIES Accounts payable and accrued items $ 2,854,501 $ 128,427 $ 1,225,324 $ 147,748 $ 4,356,000 Deposits 326,714 - - - 326,714 Due to other funds 14,358,238 - - - 14,358,238 Deferred revenue 1,881,290 444,208 - 2,502,879 4,828,377 Due to component units - - - 150,000 150,000 Total Liabilities 19,420,743 572,635 1,225,324 2,800,627 24,019,329 FUND BALANCES Reserved for: Inventory 30,486 - - - 30,486 Prepaid items 353,525 54,215 - 1,700 409,440 Long-term notes receivables 3,701,674 - - - 3,701,674 Encumbrances 408,194 - - - 408,194 Debt Service - - - 688,181 688,181 Advances to component units 58,076 - - - 58,076 Capital projects 5,985 - - - 5,985 Unreserved, undesignated reported in: General Fund 18,828,235 - - - 18,828,235 Capital Projects Funds - 17,744,863 1,639,752 777,374 20,161,989 Special Revenue Funds - - - 3,488,365 3,488,365 Total Fund Balances 23,386,175 17,799,078 1,639,752 4,955,620 47,780,625 Total Liabilities and Fund Balances $ 42,806,918 $ 18,371,713 $ 2,865,076 $ 7,756,247 $ 71,799,954 The notes to the financial statements are an integral part of this statement. 18 CITY OF DELRAY BEACH, FLORIDA RECONCILIATION OF THE GOVERNMENTAL FUNDS BALANCE SHEET TO THE STATEMENT OF NET ASSETS September 30, 2007 Total Fund Balances -Governmental Funds $ 47,780,625 Amounts reported for governmental activities in the statement of net assets are different because: Capital assets used in governmental activities are not financial resources and therefore, are not reported in the funds. Capital assets $ 179,486,188 Less accumulated depreciation (61,949,943) 117,536,245 Other long-term assets are not available to pay for current period expenditures and, therefore, are deferred in the funds. Interestreceivable 891,488 Long-term receivables 429,062 1,320,550 Net pension assets of defined benefit pension plans are reported in the statement of net assets. Because the net pension asset does not represent available, spendable resources, it is not reported in governmental funds. 65,861 Premiums, discounts, gains and losses on refundings are reported as "Other Financing Sources and Uses" and bond issuance costs are charged to expenditures when debt is issued in the governmental funds. These items, however, are deferred and amortized over the life of the bonds in the government-wide statements. Bond issuance costs 748,362 Loss on refunding 613,422 Bond premium (1,400,888) (39,104) Long-term liabilities, including bonds payable, are not due and payable in the current period and therefore, are not reported in the funds. Accrued interest payable (505,472) Bonds and installment agreements payable (72,976,349) Compensated absences (7,569,407) (81,051,228) Internal service funds are used by management to charge the costs of fleet management and insurance to individual funds. The net assets of the internal service funds are included in governmental activities in the statement of net assets. Net assets 10,496,270 Less amount allocated to business-type activities (837,723) 9,658,547 Total Net Assets -Governmental Activities $ 95,271,496 The notes to the financial statements are an integral part of this statement. 19 CITY OF DELRAY BEACH, FLORIDA STATEMENT OF REVENUES, EXPENDITURES AND CHANGES IN FUND BALANCES GOVERNMENTAL FUNDS For the Fiscal Year Ended September 30, 2007 REVENUES Taxes Licenses and permits Intergovernmental Charges for services Fines and forfeitures Miscellaneous Total Revenues EXPENDITURES Current: General government Public safety Physical environment Parks and recreation Capital outlay Debt service: Principal retirement Interest and fiscal charges Bond issuance costs Total Expenditures Excess of revenues over (under) expenditures OTHER FINANCING SOURCES (USES) Revenue bonds issued Proceeds from sale of capital assets Transfers in Transfers out Total Other Financing Sources (Uses) Net change in fund balances Fund balances -October 1, 2006 Fund balances -September 30, 2007 Major Funds Non-Major Total General Capital 2004 Governmental Governmental Fund Improvement GO Bond Funds Funds $ 74,010,119 $ - $ - $ - $ 74,010,119 4,325,079 - - - 4,325,079 9,887,712 598,141 851,557 2,682,716 14,020,126 6,605,953 - - 414,629 7,020,582 790,074 - - 282,385 1,072,459 5,719,566 1,114,914 569,495 728,333 8,132,308 101,338,503 1,713,055 1,421,052 4,108,063 108,580,673 19,572,415 248,756 - 3,131,509 22,952,680 53,301,496 120,320 - 241,145 53,662,961 3,634,914 601,376 - 1,118,802 5,355,092 12,103,062 31,749 48,667 276,764 12,460,242 1,123,033 4,290,967 14,831,022 797,879 21,042,901 2,934,548 - 7,000,000 1,410,808 11,345,356 2,149,647 - - 223,980 2,373,627 - - 353,104 - 353,104 94,819,115 5,293,168 22,232,793 7,200,887 129,545,963 6,519,388 (3,580,113) (20,811,741) (3,092,824) (20,965,290) - 12,454,147 18,316,640 - 30,770,787 62,471 - - - 62,471 3,153,386 5,258,527 1,536,195 3,138,025 13,086,133 (6,925,481) (204,100) - (251,746) (7,381,327) (3,709,624) 17,508,574 19,852,835 2,886,279 36,538,064 2,809,764 13,928,461 (958,906) (206,545) 15,572,774 20,576,411 3,870,617 2,598,658 5,162,165 32,207,851 $ 23,386,175 $ 17,799,078 $ 1,639,752 $ 4,955,620 $ 47,780,625 The notes to the financial statements are an integral part of this statement. 20 CITY OF DELRAY BEACH, FLORIDA RECONCILIATION OF THE GOVERNMENTAL FUNDS STATEMENT OF REVENUES, EXPENDITURES, AND CHANGES IN FUND BALANCES TO THE STATEMENT OF ACTIVITIES For the Fiscal Year Ended September 30, 2007 Net Change in Fund Balances -Total Governmental Funds Amounts reported for governmental activities in the statement of activities are different because: 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 as depreciation expense. Depreciation expense and capital oulays in the current period were as follows. Capital outlays Depreciation expense In the statement of activities, only the gain or loss on the sale of capital assets is reported, whereas in the governmental funds the proceeds from the sale increases financial resources. The change in net assets differs from the change in fund balance by the net book value of the assets retired. Some revenues reported in the statement of activities do not generate current financial resources and are therefore not reported as revenue by the funds. Donations of capital assets Change in long-term receivables Some expenses reported in the statement of activities are not reported in the funds because they have no effect on current financial resources Change in net pension asset Compensated absences Change in accrued interest payable Debt issued provides current financial resources to governmental funds, but issuing debt increases long-term liabilities in the statement of net assets. Governmental funds report the effect of issue costs, premium, discount and similar items when debt is issued, whereas these amounts are deferred and amortized in the statement of activities. Debt Issuance Revenue bonds Debt Retirement and Issue Costs Principal paid Debt issue costs paid Amortization of issue costs, premium and discount Internal service funds are used by management to charge the costs of fleet maintenance and insurance to individual funds. The net revenue of internal service funds is reported with governmental activities. Fund statement net income Less allocation to business type activities Change in Net Assets of Governmental Activities The notes to the financial statements are an integral part of this statement. $ 15,572,774 $ 21,042,901 (5,963,351) 15,079,550 (826,481) 848,392 (6,886) 841,506 (4,074) (645,967) 974,764 324,723 (30,770,787) 11,345,356 353,104 9,077 11,707,537 (2,603,069) 220,886 (2,382,183) $ 9,546,639 21 CITY OF DELRAY BEACH, FLORIDA STATEMENT OF NET ASSETS PROPRIETARY FUNDS September 30, 2006 Total Governmental Major Fund Business-Type Activities - Water Non-Major Activifies- Internal and Enterprise Enterprise Service Sewer Funds Funds Funds ASSETS Current Assets: Cash and cash equivalents $ 1,587,602 $ 1,047,707 $ 2,635,309 $ 5,219,688 Accounts receivable, net 2,100,009 344,219 2,444,228 225,534 Unbilled accounts receivable 1,002,173 - 1,002,173 Due from other funds - 1,287,286 1,287,286 2,916,414 Inventory 233,633 87,323 320,956 53,536 Prepaid expenses 217 103,706 103,923 1,103,158 Restricted assets: Cash and cash equivalents 19,226,262 1,607,668 20,833,930 - Total Current Assets 24,149,896 4,477,909 28,627,805 9,518,330 Noncurrent Assets: Property, land and equipment: Land 882,792 4,694,070 5,576,862 - Buildings 6,233,984 4,370,104 10,604,088 909 Improvements other than buildings 135,407,730 13,757,461 149,165,191 - Equipment 10,251,234 2,615,749 12,866,983 16,281,683 Construction in progress 4,525,890 532,706 5,058,596 - Accumulated depreciation (72,876,278) (7,425,559) (80,301,837) (9,005,146) Other assets: Bond issue costs, net 145,212 76,321 221,533 - Investment in regional plant joint venture 22,948,552 - 22,948,552 - TotalNoncurrentAssets ]07,519,116 18,620,852 126,139968 7,277,446 Total Assets 131,669,012 23,098,761 154,767,773 16,795,776 LIABILITIES Current Liabilities: Accounts payable and accrued expenses 932,533 300,512 1,233,045 1,003,456 Unearned revenue 36,953 11,518 48,471 - Current maturities of installment agreements - 61,643 61,643 - Compensated absences payable 118,248 155 118,403 15,365 Insurance claims payable - - - 1,821,493 Due to other funds 544,134 1,172,987 1,717,121 - Refundabledeposits 1,016,127 88,832 1,104959 - 2,647,995 1,635,647 4,283,642 2,840,314 Current Liabilities Payable from Restricted Assets: Contracts payable and retainages 381,095 84,613 465,708 - Accrued interest on long-term debt 613,897 36,876 650,773 - Currentmaturitiesofrevenuebonds 4,271,746 607,182 4,878,928 5,266,738 728,671 5,995,409 Total Current Liabilities 7,914,733 2,364,318 10,279,051 2,840,314 Noncurrent Liabilities: Long-term portion of compensated absences payable 592,607 40,081 632,688 61,976 Long term portion of insurance claims payable - - - 3,397,216 Revenue bonds payable, net 36,754,042 5,476,584 42,230,626 - Installment agreements - 112,200 112,200 - TotalNoncurrentLiabilties 37,346,649 5,628,865 42,975,514 3,459,192 Total Liabilities 45,261,382 7,993,183 53,254,565 6,299,506 NET ASSETS Invested in capital assets, net of related debt 43,399,564 11,383,186 54,782,750 7,277,446 Restricted for: Debt service 4,777,713 878,997 5,656,710 - Renewal and replacement 1,381,511 - 1,381,511 - Unrestricted 36,848,842 2,843,395 39,692,237 3,218,824 Total Net Assets $ 86,407,630 $ 15,105,578 101,513,208 $ 10,496,270 Adjustments to reflect the consolidation of internal service fund activities related to enterprise funds Cummulative prior year adjustments 1,058,609 Current year adjustment (220,886) Net Assets of Business-Type Activities, Statement of Net Assets $ 102,350,931 The notes to the financial statements are an integral part of this statement. 22 CITY OF DELRAY BEACH, FLORIDA STATEMENT OF REVENUES, EXPENSES AND CHANGES IN NET ASSETS PROPRIETARY FUNDS For the Fiscal Year Ended September 30, 2007 Total Governmental Major Fund Business-Type Activities - Water Non-Major Activities- Internal and Enterprise Enterprise Service Sewer Funds Funds Funds OPERATING REVENUES Charges for services Other operating revenue Total Operating Revenues OPERATING EXPENSES Personal services Other operating expenses Depreciation Total Operating Expenses Operating Income (Loss) NONOPERATING REVENUES (EXPENSES) Interestrevenue Rent revenue Share of regional plant joint venture net income Insurance recoveries Interest expense Loss on disposal of equipment Total Nonoperating Revenues (Expenses) Income (Loss) Before Capital Contributions and Transfers Capital contributions Transfers in Transfers out Change In Net Assets 7,574,531 601,721 8,176,252 (2,603,069) Net Assets -October 1, 2006 78,833,099 14,503,857 93,336,956 13,099,339 Net Assets -September 30, 2007 $ 86,407,630 $ 15,105,578 101,513,208 $ 10,496,270 Adjustments to reflect the consolidation of internal service fund activities related to enterprise funds Cummulative prior year adjustments 1,058,609 Current year adjustment (220,886) Net Assets of Business-Type Activities, Statement of Net Assets $ 102,350,931 Reconciliation of Change in Net Assets to the Statement of Activities Change In Net Assets as reported above $ 8,176,252 Adjustment to reflect the consolidation of internal service fund activities related to enterprise funds Current year adjustment (220,886) Change In Net Assets as reported on the Statement of Activities for Business-type Activities $ 7,955,366 The notes to the financial statements are an integral part of this statement. $ 29,162,001 $ 9,674,222 $ 38,836,223 $ 15,383,387 946,331 536,515 1,482,846 1,861,911 30,108,332 10,210,737 40,319,069 17,245,298 6,811,807 554,387 7,366,194 1,050,690 13,620,965 6,938,181 20,559,146 16,165,974 3,487,127 765,030 4,252,157 1,409,179 23,919,899 8,257,598 32,177,497 18,625,843 6,188,433 1,953,139 8,141,572 (1,380,545) 634,223 103,729 737,952 347,451 5,156 130,308 135,464 - 3,070,924 - 3,070,924 - - - - 67,784 (1,364,943) (195,274) (1,560,217) - - (57,601) (57,601) (184,721) 2,345,360 (18,838) 2,326,522 230,514 8,533,793 1,934,301 10,468,094 (1,150,031) 1,424,878 - 1,424,878 535,048 91,000 45,000 136,000 208,340 (2,475,140) (1,377,580) (3,852,720) (2,196,426) 23 CITY OF DELRAY BEACH, FLORIDA STATEMENT OF CASH FLOWS PROPRIETARY FUNDS For the Fiscal Year Ended September 30, 2007 CASH FLOWS FROM OPERATING ACTIVITIES Receipts from customers and users Receipts from others Payments to suppliers Payments to employees Net cash provided by operating activities CASH FLOWS FROM NONCAPITAL FINANCING ACTIVITIES Transfers from other funds Transfers to other funds Net cash used in noncapital financing activities CASH FLOWS FROM CAPITAL AND RELATED FINANCING ACTIVITIES Acquisition and construction of capital assets Proceeds from the sale of capital assets Capital contributions Bond proceeds Principal paid on capital debt Interest paid on capital debt Net cash provided by (used in) capital and related financing activities CASH FLOWS FROM INVESTING ACTIVITY Interest received Net cash provided by investing activity Net change in cash and cash equivalents Cash and cash equivalents -October 1, 2006 Cash and cash equivalents -September 30, 2007 Reconciliafion of cash and cash equivalents to balance sheet: Unrestricted cash and cash equivalents Restricted cash and cash equivalents Cash and cash equivalents -September 30, 2007 Reconciliafion of operafing income (loss) to net cash provided by operafing acfivifies: Operating income (loss) Adjustments to reconcile operating income (loss) to net cash provided by operating activities: Depreciation expense Miscellaneous revenue Change in assets and liabilities: Accounts receivable Due from other funds Inventory Prepaid expenses Accounts payable and accrued expenses Unearned revenue Compensated absences payable Due to other funds Insurance claims payable Refundable deposits Total adjustments Net cash provided by operating activities Non-cash capital and related financing activities Amortization of bond premiums Amortization of debt issue costs Amortization of deferred loss on refundings Installment agreement debt issued Capital contributions The notes to the financial statements are an integral part of this statement. Total Governmental Major Fund Business-Type Activities - Water Non-Major Activities- Internal and Enterprise Enterprise Service Sewer Funds Funds Funds $ 29,012,775 $ 11,439,918 $ 40,452,693 $ 20,275,018 95],487 ]30,308 ],08],795 67,784 (]5,596,267) (6,973,360) (22,569,627) (]6,039,962) (6,725,736) (55],084) (7,276,820) (],042,345) 7,642,259 4,045,782 11,688,041 3,260,495 91,000 45,000 136,000 208,340 (2,475,]40) (],377,580) (3,852,720) (2,]96,426) (2,384,]40) (],332,580) (3,7]6,720) (],988,086) (6,338,840) (],9]7,238) (8,256,078) (],898,938) - - - 10,000 690,097 - 690,097 535,048 ]],350,000 ],000,000 ]2,350,000 - (3,877,248) (644,]22) (4,52],370) - (],223,070) (]69,296) (],392,366) - 600,939 (1,730,656) (1,129,717) (1,353,890) 634,223 103,729 737,952 347,451 634,223 ]03,729 737,952 347,45] 6,493,28] ],086,275 7,579,556 265,970 ]4,320,583 ],569,]00 ]5,889,683 4,953,7]8 $ 20,813,864 $ 2,655,375 $ 23,469,239 $ 5,219,688 $ 1,587,602 $ 1,047,707 $ 2,635,309 $ 5,219,688 ]9,226,262 ],607,668 20,833,930 $ 20,813,864 $ 2,655,375 $ 23,469,239 $ 5,219,688 $ 6,188,433 1,953,139 $ 8,141,572 $ (1,380,545) 3,487,]27 765,030 4,252,]57 ],409,]79 5,]56 ]30,308 ]35,464 67,784 (]34,955) (8],640) (2]6,595) ]3],550 - (275,223) (275,223) - (49,080) (2,206) (51,286) (23,909) (55) ],086 ],03] (],099,969) 239,962 ]45,420 385,382 (26,]9]) 3,2]4 (],559) ],655 - 86,071 3,303 89,374 8,345 (2,]66,]29) ],400,959 (765,]70) 2,898,]70 - - - 1,276,081 (]7,485) 7,]65 (]0,320) - 1,453,826 2,092,643 3,546,469 4,641,040 $ 7,642,259 $ 4,045,782 $ 11,688,041 $ 3,260,495 $ (201,182) $ (9,834) $ (211,016) $ $ 64,078 $ 8,723 $ 72,801 $ $ 289,168 $ 33,849 $ 323,017 $ $ $ 131,420 $ 131,420 $ $ 734,781 $ - $ - $ - 24 CITY OF DELRAY BEACH, FLORIDA STATEMENT OF FIDUCIARY NET ASSETS FIDUCIARY FUNDS September 30, 2007 Pension Trust Funds ASSETS Cash and cash equivalents $ 500 Investments: Bonds and other interest bearing investments 48,516,644 Equity securities 90,665,316 Mutual funds 65,999,674 Other 2,162,791 Due from broker for securities sold 612,931 Employee contributions receivable 41,634 Due from other governments 432,524 Prepaid expenses 163,076 Interest and dividends receivable 486,356 Total Assets 209,081,446 LIABILITIES Accounts payable 95,296 Due to broker for securities purchased 736,558 State monies held in reserve 1,066,447 Deferred retirement option plan payable 7,188,343 Total Liabilities 9,086,644 NET ASSETS Held in trust for pension benefits $ 199,994,802 The notes to the financial statements are an integral part of this statement. 25 CITY OF DELRAY BEACH, FLORIDA STATEMENT OF CHANGES IN FIDUCIARY NET ASSETS FIDUCIARY FUNDS For the Fiscal Year Ended September 30, 2007 ADDITIONS Contributions Employer State Plan members Total contributions Investment earnings Net appreciation in fair value of investments Interest and dividends Less investment expenses -custodian fees Net investment gain Other income Total additions DEDUCTIONS Benefits Refunds of contributions Other operating expenses Total deductions Change In Net Assets Net Assets -October 1, 2006 as originally reported Prior period adjustment Net Assets -October 1, 2006 as restated Net Assets -September 30, 2007 The notes to the financial statements are an integral part of this statement. Pension Trust F.,nrlc $ 7,182,589 1,560,549 1,776,929 10,520,067 17,789,546 5,055,498 22,845,044 837,719 22,007,325 49,475 32,576,867 8,872,299 81,646 197,451 9,151,396 23,425,471 177,411,696 (842,365) 176.569_ i i 1 ~ 1yy,yy4,2SVG 26 City of Delray Beach, Florida Notes to Financial Statements September 30, 2007 1. Financial Reporting Entity In conformance with the pronouncements of the Governmental Accounting Standards Board (GASB), the financial reporting entity of the City of Delray Beach, Florida, (the "City"), includes the primary government and all organizations for which the primary government is financially accountable. The City was established pursuant to Section 12677, laws of Florida, 1927. Financial accountability was determined based on the City's ability to impose its will on an organization or the potential of the organization to provide specific financial benefits to or impose specific financial burdens on the City. Discretely Presented Component Units As defined by U.S. generally accepted accounting principles, the financial reporting entity consists of (a) the primary government, (b) organizations for which the primary government is financially accountable, and (c) other organizations for which the primary government is not accountable, but for which the nature and significance of their relationship with the primary government are such that exclusion would cause the reporting entity's financial statements to be misleading or incomplete. Two dependent special districts of the City, created by Florida Statutes, have been included in the reporting entity as discretely presented component units. The districts are the Delray Beach Community Redevelopment Agency (CRA) and the Delray Beach Downtown Development Authority (DDA). Both of these entities are considered component units, as the City appoints the governing board of each, and has the ability to remove members of the board at will In addition, the City approves DDA's budget. The CRA is a dependent special district established by the City under authority granted by Florida Statute 163, Section III. The purpose of the CRA is to promote and guide the physical and economic redevelopment of approximately 1,900 acres in the center of the City. The CRA is a legally separate entity established by Ordinance number 4fr85 of the Delray Beach City Commission on June 18, 1985. The CRA is governed by a seven member Board of Commissioners appointed by the Delray Beach City Commission. The DDA was created after the City petitioned the State of Florida. An Act allowing the DDA became law on March 22, 1971. The original boundary of the DDA was established by Section 3, Chapter 71-604 Laws of Florida 1971. The expanded boundary was established by Chapter 94-476 Laws of Florida effective May 13, 1994. The purpose of the DDA is to promote and guide the economic development and improvement of the downtown area of the City. The governing body of the DDA is appointed by the Delray Beach City Commission. Except as otherwise indicated, the notes to the financial statements pertain only to the primary government of the City. The separate financial statements of the CRA and the DDA can be obtained directly from the respective entities. Joint Venture The South Central Regional Wastewater Treatment and Disposal Board (the `Board") has been reported as a joint venture accounted for using the equity method as discussed in Note 10. The Board is an independent special district created by the Cities of Delray Beach and Boynton Beach, whose city commissions comprise the Board's governing body. Control and oversight are exercised equally by both cities represented on the Board. The separate financial statements of the Board can be obtained directly from the finance department of the Board. 27 City of Delray Beach, Florida Notes to Financial Statements (continued) September 30, 2007 2. Significant Accounting Policies The City maintains its accounting records in accordance with the principles and policies applicable to governmental units set forth by the GASB as well as U.S. generally accepted accounting principles (GAAP) as promulgated by the American Institute of Certified Public Accountants and the Financial Accounting Standards Board (FASB). The City does not apply FASB statements and interpretations issued after November 30, 1989 to its enterprise funds. The following is a summary of the significant accounting policies. The Government Wide and Fund Financial Statements The government wide financial statements (i.e., the statement of net assets and the statement of activities) report information on all of the non-fiduciary activities of the City. For the most part, the effect of interfund activity has been removed from these statements. Covern~nental 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 are offset by program revenues. Direct expenses are those that are clearly identifiable with a specific function. Progra~rc revenues include (1) charges to customers or applicants who purchase, use, or directly benefit from goods, services, or privileges provided by a given function and (2) grants and contributions that are restricted to meeting the operational or capital requirements of a particular function. Taxes and other items not properly included among program revenues are reported instead as general revenues. The City does not allocate indirect costs, however, an administrative service fee is charged by the General Fund to other operating funds that is eliminated like a reimbursement (reducing revenue and expense in the General Fund) to recover the direct costs of General Fund services provided (such as finance, legal, human resources, information systems, etc.). 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 and enterprise funds are reported as separate columns in the fund financial statements. Measurement Focus, Basis of Accounting and Financial Statement Presentation The government wide financial statements are reported using the econo~rcic resources rrceasure~nent focus and the accrual basis of accounting, as are the proprietary and fiduciary fund financial statements. Revenues are recognized when earned and expenses are recognized when incurred, regardless of the timing of cash flows. Froperty 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. The proprietary fund financial statements distinguish operating revenues and expenses from nonoperating items. Operating revenue and expenses generally result from providing services and producing and delivering services. The principal operating revenues are charges to customers for sales and services. Operating expenses include the cost of sales and services, administration, and depreciation. Other revenues and expenses are considered nonoperating revenues and expenses. Governmental fund financial statements are reported using the current financial resources ~neasure~nent 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. Ad valorem taxes and charges for services are susceptible to accrual when collected in the current year or within 60 days subsequent to year end, provided that amounts received pertain to billings through the fiscal year just ended. Intergovernmental revenue and utility service taxes are recorded in accordance with their legal or contractual requirements if collected in the current period or within 30 days after year end, except for grant revenue, which is recorded when the related expenditure/expenses are incurred. Interest is recorded when earned. Licenses and permits, fines and forfeitures, and miscellaneous revenue are recorded as revenue when received in cash, because they are generally not measurable until actually received. 28 City of Delray Beach, Florida Notes to Financial Statements (continued) September 30, 2007 2. Significant Accounting Policies (continued) Occupational license revenue collected in advance of periods to which they relate is recorded as unearned revenue. Expenditures are recognized in the accounting period in which the fund liability is incurred, if measurable, except that principal and interest on long-term obligations are reported only when due in conformity with GAAP. The City reports the following major governmental funds: General Fund -The General Fund is the general operating fund of the City. All general tax revenue and other receipts that are not allocated by law or contractual agreement to another fund are accounted for in this fund. The general operating expenditures, fixed charges and capital improvement costs that are not paid through other funds are paid from the General Fund. Capital Irrcprove~nent Fund -This fund is used to account for the construction of major capital facilities. 2004 CO Bond Fund -This fund is used to account for the construction of major capital facilities financed by the City's 2004 general obligation bond issue. The City reports the following major proprietary funds: Water and Sewer Fund -This fund is used to account for water and sewer services provided by the City to residents and other users. Additionally, the City reports the following fund types: Internal Service Funds -These funds are used to account for the financing of goods or services provided by one department or agency to other departments or agencies of the City, or to other governmental units, on a cost reimbursement basis, including insurance services and the operation of the central garage. Pension Trust Funds -The Pension Trust funds account for the accumulation of resources to be used for the retirement annuities of employees, police officers and firemen. Cash, Cash Equivalents and Investments Cash and cash equivalents consist of restricted and unrestricted cash deposits, and funds invested in the Local Government Surplus Funds Trust Fund managed by the State Board of Administration, Department of the State Treasurer of Florida. Investments in the Local Government Surplus Funds Trust Fund, a 2a7-like pool, are carried at amortized cost, which approximates fair value. A 2a7-like pool is not registered with the Untied States Securities and Exchange Commission (the SEC) as an investment company, but nevertheless has a policy that it will, and does, operate in a manner consistent with the SEC's Rule 2a7 of the Investment Company Act of 1940, which comprises the rules governing money market funds. The Local Government Surplus Funds Trust Fund operates under the regulatory oversight of the State of Florida, Chapter 19-7 of the Florida Administrative Code, and the reported value of the pool is the same as the fair value of the pool shares. Cash balances from all funds are combined, and the requirements of all funds are considered in determining the amount to be invested. Earnings are allocated to each fund based on respective month-end balances. Investments are stated at fair value, based on quoted market prices. For purposes of the statement of cash flows, the City considers all highly liquid investments (including restricted assets) with a maturity of three months or less when purchased to be cash equivalents. 29 City of Delray Beach, Florida Notes to Financial Statements (continued) September 30, 2007 2. Significant Accounting Policies (continued) Accounts Receivable Accounts receivable represent amounts due for various City services and utilities, provided primarily to local businesses and residents. Accounts receivable are reported net of an allowance for doubtful accounts determined based on the age of the individual receivable and historical collection trends. Accounts receivable are written off on an individual basis in the year the City deems them uncollectible. An allowance for doubtful accounts has been provided for those accounts where collectibility appears to be doubtful. The City does not require collateral from its customers, except for the Water and Sewer Fund, which requires deposits for services. The City maintains an allowance for doubtful accounts at a level which management believes is sufficient to cover potential credit losses. Unbilled Service Receivables Within the enterprise funds, the Water and Sewer Fund recognizes revenue on the basis of monthly cycle billings to customers for services provided. As a result of this cycle billing method, there are unbilled receivables at the end of each fiscal year with respect to services provided, but not billed at such date. It is the policy of the City to accrue these amounts at year-end. The other enterprise funds do not have unbilled receivables at year-end. Inventory Inventory consists of materials, supplies and goods held for sale and are carried at cost on the average costing basis. The General Fund inventory is accounted for using the consumption method whereby inventories are recorded as expenditures in the period when used. Prepaid Items/Expenses Payments for insurance premiums and other administrative expenditures/expenses extending over more than one accounting period are accounted for as prepaid items/expenses and allocated between accounting periods. Intra-Entity Transactions An Intra-entity transaction consists of transactions and balances between the primary government and it's discretely presented component units and are separately reported from interfund balances. Current maturities of long-term intra-entity transactions are reported separately as due to and due from respective entities. Interfund Transactions Transactions among funds during the year are described as follows: Interfund services provided and used -Transactions which are revenue to the recipient fund and expenditures to the disbursing fund. These are transactions which would otherwise be recorded as revenue or expenditures if they were conducted with organizations external to the City. Rei~nburse~nents -These transactions are reimbursements of a fund for the disbursement of monies initially made from it, which are properly applicable to another fund. Such reimbursements are recorded as an expenditure or expense in the reimbursing fund and as reductions of the interfund receivable in the fund that is reimbursed. 30 City of Delray Beach, Florida Notes to Financial Statements (continued) September 30, 2007 2. Significant Accounting Policies (continued) Transfers -Transfers which, because of budgetary or legal restrictions, must be expended by funds other than the fund initially receiving the revenue. These transfers are recorded as transfers in (out). Capital Assets Capital asset acquisitions are recorded as expenditures in the governmental fund financial statements. Such assets are capitalized at historical cost in the government-wide financial statements for both governmental activities and business-type activities. In the case of gifts or contributions, such assets are recorded at fair value at the date of receipt. Capital costs which materially extend the useful life of existing properties are capitalized. Capital assets are defined as assets with an initial, individual cost of more than $750 and an estimated useful life in excess of one year. Interest is capitalized on projects during the construction period based upon average accumulated project expenditures. Infrastructure assets (such as roads, bridges, curbs and gutters, streets and sidewalks, lighting and drainage systems and similar assets that are immovable and of value only to the City) are capitalized and reported in the Improvements Other Than Buildings category. Depreciation of capital assets is provided on the straight-line basis over the assets' estimated useful lives. Amortization of assets recorded under capital leases is recorded with depreciation expense. Estimated useful lives assigned to various categories of assets are as follows: Buildings 20 - 40 years Improvements Other than Buildings 10 - 30 years Machinery and equipment 4 - 15 years Automotive equipment 4 - 8 years Office equipment 5 years Water meters 30 years Pumping equipment 15 - 20 years Wells and springs 10 years Sewer system 60 years Water distribution system 50 years Bond Issue Costs, Premiums, Discounts, and Deferred Amounts on Refunding In the government-wide financial statements and the enterprise funds, expenses incurred in connection with the issuance of long-term debt, as well as bond discounts, premiums and deferred amounts on refunding, are deferred and amortized over the term of the related financing using a method that approximates the effective interest method. For governmental funds, these costs are considered to be period costs. Compensated Absences The City accrues compensated absences in accordance with GASB Statement No. 16, Accounting for Compensated Absences, and has elected the termination payment method of accounting for sick leave. The amount of reimbursable sick or vacation leave is accrued when incurred in the government-wide and proprietary fund financial statements. A liability for these amounts is reported in the governmental fund financial statements only if they have matured, for example, as a result of employee resignations and retirements. The City's policy regarding the accumulation of compensated absences is as follows: Vacation Leave -Employees become eligible to use accrued vacation after one year of continuous service and may then use vacation as it is earned. The maximum vacation days allowed to be accumulated is 18, 24-hour days for fire department personnel and 36 days for all other full-time personnel. 31 City of Delray Beach, Florida Notes to Financial Statements (continued) September 30, 2007 2. Significant Accounting Policies (continued) Vacation hours are earned at the following monthly rates: Years of Continuous Service Fire Other Department Full-Time Personnel Personnel 0 - 3 years 3 - 7 years 7 -11 years Thereafter 12.00/month 8.00/month 14.00/month 9.33/month 16.00/month 10.66/month 18.00/month 12.00/month Upon termination in good standing, employees are compensated for all accrued vacation leave at their pay rate on the date of termination. Sick Leave -Employees earn hours of sick leave per month based on their scheduled work hours; 8 hours per month for 40-hour work week employees and 9.6 hours per month for 48-hour work week employees. If an employee retires with 20 years or more of service, sick leave is paid up to a maximum of 1120 hours or 1344 for 48-hour work week employees. Upon retirement with less than 20 years of service or resignation, employees are compensated for unused sick leave up to 560 hours (70 days) according to the following vesting schedule: Years of Service Percent Vested 0 - 5 years 0°Io 5 -10 years 25 10 -15 years 50 15 - 20 years 75 Fund Balance/Net Assets Fund Balance In the fund financial statements, governmental funds report reservations of fund balance to indicate the portion of fund balance that is not appropriable for expenditure or is legally segregated by outside parties for a specific purpose. Designations indicate tentative managerial plans or intent to use financial resources in a future period. Undesignated fund balance indicates the portion of fund balance which is available for future use. Net Assets Net assets of the government wide and proprietary funds are categorized as invested in capital assets, net of related debt, restricted or unrestricted. Invested in capital assets, net of related debt, is that portion of net assets that relates to the City's capital assets reduced by the portion of the assets that has been acquired through the use of long-term debt. This amount is offset by any unspent proceeds that are outstanding at fiscal year-end. Restricted net assets are that portion of net assets that has been restricted for general use by external parties (creditors, grantors, contributors, or laws or regulations of other governments) or imposed by law through constitutional provisions or legislation. Unrestricted net assets consist of net assets not included in invested in capital assets, net of related debt or restricted. 32 City of Delray Beach, Florida Notes to Financial Statements (continued) September 30, 2007 2. Significant Accounting Policies (continued) Revenue Recognition Property Taxes - Ad valorem property taxes are assessed on property valuations as of January 1 and levied the following October. They are due March 31 and become delinquent April 1. Delinquent tax certificates are sold on June 1 and become a lien on the property. These taxes are collected by Palm Beach County and remitted to the City. Revenue is recognized at the time monies are received from Palm Beach County. At September 30, unpaid delinquent taxes are reflected as a receivable on the balance sheet and are offset in full by an allowance for estimated uncollectible accounts. Delinquent property taxes must be advertised within 45 days after delinquency, and after May 1 the property is subject to levy, seizure and sale. During 2007 the Florida Legislature passed property tax reform legislation limiting the property tax levies of local governments in the State of Florida. Local governments that adopt a property tax levy in excess of the limit under State law will lose their Half-Cent Sales Tax distribution from the State for the succeeding twelve months. For the fiscal year ending September 30, 2008, the maximum tax levy allowed by a majority vote of the governing body is generally based on a percentage reduction applied to the prior year (2006/2007) property tax revenue. The percentage reduction is calculated based on the compound annual growth rate in the per capita property taxes levied for fiscal years ended September 30, 2002 through 2007. The State law allows local governments to adopt a higher millage rate based on the following approval of the governing body: 1) atwo-thirds vote to adopt a rate equal to the prior year rolled-back millage rate; 2) a unanimous vote to adopt a rate equal to the prior year millage rate; or, 3) any millage rate approved by referendum. For the fiscal year ending September 30, 2008 the City adopted the maximum millage rate permitted by a majority vote of the City Commission under this formula, which was 6.5783. This millage rate results in a total tax levy of $54,459,940 for 2008, representing a reduction of 916% from the property tax levy for 2007. Beginning in 2009, future property tax growth is generally limited to the annual growth rate of per capita personal income, which is currently 4% to 5%, plus the value of new construction. On January 29, 2008, Florida voters approved a constitutional amendment that changes how property is assessed for ad valorem taxes, by increasing the homestead exemption from $25,000 to $50,000, allowing portability of up to $500,000 of the existing savings under the 3% assessment cap for homestead properties created by the Save Our Homes constitutional amendment, providing a $25,000 exemption for tangible personal property taxes paid by businesses and creating a 10% annual assessment cap for non-homestead real properties. The ultimate effect of these changes on the City's property tax base cannot be determined at this time. Crants -Federal, State and Local reimbursement-type grants are recorded as intergovernmental receivables and revenue when the related expenditures/expenses are incurred. Other Revenue -Emergency medical transport services provided by the City are billed and recorded at the time services are rendered. Other material revenue which is susceptible to accrual includes interest income, franchise taxes, state revenue sharing and other state shared revenue. Revenue which is not both available and measurable and is thus not susceptible to accrual includes utilities taxes, permits and occupational licenses. Encumbrances Encumbrance accounting, under which purchase orders, contracts and other commitments for the expenditure of monies are recorded in order to reserve that portion of the applicable appropriation, is employed as an extension of formal budgetary control in the General Fund. Encumbrances outstanding at year-end are reported as reservations of fund balances for subsequent year expenditures. For budgetary purposes, current year encumbrances are treated as expenditures and any unencumbered balances lapse at year-end. 33 City of Delray Beach, Florida Notes to Financial Statements (continued) September 30, 2007 2. Significant Accounting Policies (continued) On-behalf Payments The City receives on-behalf payments from the State of Florida to be used for Police and Firefighters pension benefits. Such payments are recorded as intergovernmental revenue and public safety expenditures in the GAAP basis government wide and General Fund financial statements, but are not budgeted and therefore are not included in the General Fund budgetary basis financial statements. On-behalf payments to the City totaled $1,784,631 for the fiscal year ended September 30, 2007. Recent Accounting Pronouncements The GASB has issued Statement No. 45, "Accounting and Financial Reporting by Employers for Postemployment Benefits Other Than Pensions," which provides guidance on all aspects of reporting by employers for other postemployment benefits (OPEB). The requirements of this statement will be effective for the City for the fiscal year ending September 30, 2008. Management has not completed its analysis of the effects of this statement, if any, on the financial statements of the City. Estimates Management uses estimates and assumptions in preparing financial statements in accordance with U.S. generally accepted accounting principles. Those estimates and assumptions affect the reported amounts of assets and liabilities, the disclosure of contingent assets and liabilities, and the reported revenues and expenditures. Actual results could vary from the estimates that were used. 3. Cash, Cash Equivalents and Investments At year-end, the City's bank balances of deposits with financial institutions were entirely covered by federal depository insurance and by a collateral pool pledged to the State Treasurer of Florida by financial institutions which comply with the requirements of Florida Statutes and have been designated as a qualified public depository by the State Treasurer of Florida. Qualified public depositories are required to pledge collateral to the State Treasurer with a market value equal to a percentage of the average daily balance of all government deposits in excess of any federal deposit insurance. In the event of a default by a qualified public depository, all claims for government deposits would be satisfied by the State Treasurer from the proceeds of federal deposit insurance, pledged collateral of the public depository in default and, if necessary, a pro rata assessment to the other qualified public depositories participating in the collateral pool. Cash, cash equivalents and investments include unrestricted and restricted assets for the primary government which are summarized as follows: Deposits with financial institutions and cash on hand $ 2,023,983 Carrying amount of investments 74,916,643 Total cash, cash equivalents and investments $ 76,940,626 Cash and cash equivalents $ 56,106,696 Cash and cash equivalents -restricted 20,833,930 Total primary government 76,940,626 Cash and investments -pension trust funds 207,344,925 Total cash, cash equivalents and investments $ 284,285,551 34 City of Delray Beach, Florida Notes to Financial Statements (continued) September 30, 2007 3. Cash, Cash Equivalents and Investments (continued) Florida Statutes authorize the City and its pension trust funds to invest in the Local Government Surplus Funds Trust Fund administered by the State Board of Administration; negotiable direct obligations of or obligations unconditionally guaranteed by the U.S. Government; interest bearing time deposits or savings accounts in financial institutions located in Florida and organized under federal or Florida laws; obligations of the Federal Farm Credit Banks, the Federal Home Loan Mortgage Corporation, the Federal Home Loan Bank or its district banks; or obligations guaranteed by the Government National Mortgage Association, obligations of the Federal National Mortgage Association; certain authorized pool investment programs and any additional investments specifically authorized by City Ordinance. Pension trust funds may also invest in tax sale certificates of the State of Florida or any of its political subdivisions, preferred and common stocks of certain U.S. corporations, mutual funds and debt securities of certain U.S. corporations. The City's investments at September 30, 2007 consist of the following: Carrying Amount (Fair Value) Primary Fiduciary Funds Government Pension Trust Total Investments: Local Government Surplus Funds Trust Fund (SBA) Money market mutual funds U.S. Government and Agency securities Corporate bonds Common stocks Mutual funds Other Total investments $ 74,916,643 $ - $ 74,916,643 - 13,930,734 13,930,734 - 22,623,204 22,623,204 - 11,962,706 11,962,706 - 90,665,316 90,665,316 - 65,999,674 65,999,674 - 2,162,791 2,162,791 $ 74,916,643 $ 207,344,425 $ 282,261,068 The deposits in the Local Government Surplus Funds Trust Fund consist of equity in an external investment pool administered by the State of Florida pursuant to statutory requirements and operated in a manner consistent with Securities and Exchange Commission (SEC) Rule 2a7 of the Investment Company Act of 1940. Rule 2a7 allows SEC registered mutual funds to use amortized cost rather than fair value to report net assets used to compute share prices if certain conditions are met. Those conditions include restrictions on the types of investments held, restrictions on the term-to-maturity of individual investments and the dollar-weighted average of the portfolio, requirements for portfolio diversification, and requirements for divestiture considerations in the event of security downgrades and defaults, and required actions if the fair value of the portfolio deviates from amortized cost by a specified amount. The fair value of the position in the pool is considered to be the same as the City's account balance (amortized cost) in the pool. On November 28, 2007 the City withdrew substantially all funds from the Local Government Surplus Funds Trust Fund and invested in a money market mutual fund with a local financial institution. Interest Rate Risk: Interest rate risk is the risk that changes in interest rates will adversely affect the fair value of an investment in debt securities. Generally, the longer the time to maturity, the greater the exposures to interest rate risk The City and its pension funds do not have a formal policy that limits the maturities of its investments. The table below summarizes the scheduled maturities of the remaining investments at September 30, 2007. 35 City of Delray Beach, Florida Notes to Financial Statements (continued) September 30, 2007 3. Cash, Cash Equivalents and Investments (continued) Fair Value of Investment Maturities Less Than One to Six to More Than One Year Five Years Ten Years Ten Years U.S. Government and Agency securities $ 2,731,875 $ 8,775,663 $ 5,349,239 $ 5,766,427 Corporate bonds 1,461,758 7,562,357 2,938,591 - Total $ 4,193,633 $ 16,338,020 $ 8,287,830 $ 5,766,427 The Local Government Surplus Funds Trust Fund and money market mutual funds have a weighted average maturity of less than one year. Mutual fund investments include a bond market index mutual fund with a weighted average maturity of more than ten years. Credit Risl~ Credit risk is the risk that a debt issuer will not fulfill its obligations. The City's investment policy requires that pension investments in debt securities must be rated in one of the top three investment grades by a Nationally Recognized Statistical Rating Organization (NRSRO). The City utilizes ratings from Standard and Poor's and Moody's Investor Services for its investments. The Local Government Surplus Funds Trust Fund and the bond market index mutual fund are not rated. The NRSRO rating for the City's pension debt investments at September 30, 2007 are summarized as follows: NRSRO Rating Fair Value Money market mutual funds U.S. Government and Agency securities Corporate bonds Corporate bonds Corporate bonds Corporate bonds Total investments AAA $ 13,930,734 AAA 22,623,204 AAA 1,535,028 AA 3,868,563 A 6,415,822 Not Rated 143,293 $ 48,516,644 Custodial Credit Risk: Custodial credit risk is defined as the risk that the City may not recover cash and investments held by another party in the event of a financial failure. The City's investment policy requires cash and investments to be fully insured or collateralized, or held in independent custodial safekeeping accounts in the name of the City. At September 30, 2007 all investments were held in independent custodial safekeeping accounts, except the Local Government Surplus Funds Trust Fund and money market mutual funds which are considered unclassified pursuant to GASB Statement No. 3. Concentration of Credit Risk: Concentration of credit risk is defined as the risk of loss attributed to the magnitude of an investment in a single issuer. For investments other than the City pension funds, there is no specific policy for concentration of credit risk. In the City pension funds, securities of a single issuer are limited to no more than 5% of the Plan's net assets invested in common stocks and debt securities. Investments in mutual funds or pools are excluded from the concentration of credit risk disclosure requirement. Foreign Currenc,~ Foreign currency risk is the risk that changes in exchange rates will adversely affect the fair value of an investment. There was no exposure to foreign currency risk in the City's investments at September 30, 2007. 36 City of Delray Beach, Florida Notes to Financial Statements (continued) September 30, 2007 4. Receivables Accounts receivable and allowance for doubtful accounts at September 30, 2007 consist of the following: Governmental Business-Type Activities Activities Froperty Taxes Receivable: General Fund $ 919,532 $ - Stormwater Utility Fund 2,528 Accounts Receivable: General Fund 6,467,326 - Capital Improvement 7,000 - Water and Sewer - 3,526,214 Non-Major Funds 9,759 344,219 Internal Service 225,534 - Allowance for doubtful accounts (4,420,053) (426,560) $ 3,209,098 $ 3,446,401 5. Notes Receivable Notes receivable at September 30, 2007 consist of the following: General Fund: Non-interest-bearing note receivable from a developer for the sale of land $ 297,696 payable in annual installments of $21,264 through June 2021 (see below). Note receivable from a developer for the construction of an urban 3,403,978 development project. Frincipal and interest payments are due in equal annual installments of $149,244 based on a 50-year amortization schedule. A balloon payment for the remaining principal and interest, including the deferred interest, is due in 2022 (see below). Non-interest bearing note receivable from EPOCH to assist in funding of a 35,000 museum project. Payments of $3,500 are due on December 31 of each year, to be paid in full by December 31, 2017. Non-interest bearing note receivable from CRC for the sale of land, payable in annual installments of $30,000 through 2015. 240,000 Total General Fund 3,976,674 Non-Major Fund: Community Development Fund Non-interest bearing notes receivable from property owners for rehabilitation, enhancement and preservation of real estate. Frincipal payments are amortized over 5-10 years. Repayment of loans contingent upon proceeds from the sale of real estate. 1,211,000 Total Governmental Activities $ 5,187,674 37 City of Delray Beach, Florida Notes to Financial Statements (continued) September 30, 2007 5. Notes Receivable (continued) The City's application for a grant of approximately $4 million through the Urban Development Action Grant Frogram (UDAG) was approved for the purpose of constructing glow-income housing project within the City. In connection with this grant, the City approved an agreement on January 15, 1989 with a developer. As part of this agreement, the City sold 36 acres of property to the developer for $730,000 which included anon-interest-bearing, five-year promissory note to the City for $720,000. The remaining balance owed the City on this note was $297,696 at September 30, 2007 which is recorded in the General Fund. Additionally, the City has loaned the developer $4,608,000 consisting of $3,840,000 of UDAG monies and City funds of $768,000. The remaining balance owed the City on the $3,840,000 loan amount at September 30, 2007 was $3,403,978. The loan for $768,000 was paid in full. At September 30, 2007, interest of $ 891,488 has been accrued and deferred on the City's books in compliance with the repayment provisions of the UDAG loan. On November 20, 1992, the City amended the original agreement with the developer. The amendment revised the repayment schedules of the outstanding notes receivable by primarily extending the repayment terms of the $720,000 and $768,000 notes from 15 to 25 years and extending the amortization schedule on the $3,840,000 note from 25 to 50 years. 6. Due from Other Governments The total amount due from other governments of $1,903,150 at September 30, 2007, represents the amount due from federal and state sources under grant reimbursement agreements within various funds. 7. Due from Component Units The amounts due from component units at September 30, 2007 are summarized as follows: General Fund: Non-interest bearing note receivable from CRA which resulted from CRA's assumption of a certain 1992 note payable by Old School Square, Inc. to the City. Annual principal repayments of $30,027 are due through maturity on January 15, 2008. Interlocal agreement dated August 18, 2006 to pay share of Plan Reviewer II. Interlocal agreement dated June 9, 2005 to reimburse City for In-House Froject Management Services. Total General Fund Community Development Fund: Interlocal agreement dated June 9, 2005 to reimburse City for In-House Froject Management Services. Reimbursement for West Settler's Frogram Income. Total Community Development Fund S,~necial Frojects Fund: Reimbursement for cell phone usage. $ 30,025 15,499 12,552 58,076 2,286 1,184 3,470 265 38 City of Delray Beach, Florida Notes to Financial Statements (continued) September 30, 2007 7. Due from Component Units (continued) Capital Improvement Fund: Interlocal agreement dated September 27, 2005 to reimburse the City for $ 2'76 the Gateway Feature project. Interlocal agreement dated January 11, 2007 to reimburse the City for 23,530 street and alley improvements. Interlocal agreement dated January 11, 2007 to reimburse the City for 12,552 beautification, street and alley improvements. Interlocal agreement dated September 30, 2007 (bid date) to reimburse 160,000 the City for park improvements. Interlocal agreement dated September 27, 2005 to reimburse the City for 12,625 street reconstruction and beautification. Total Capital Improvement Fund 208,983 Total Due from Component Units $ 270,794 8. Restricted Assets Restricted assets of the Enterprise funds at September 30, 2007 are summarized as follows: Restricted for Renewal Revenue and Construction Bonds Replacement Total Cash and cash equivalents: Water and Sewer Fund $13,067,038 $ 4,777,713 $ 1,381,511 $ 19,226,262 Non-Major Enterprise Funds 1,000,801 606,867 - 1,607,668 Total restricted assets $14,067,839 $ 5,384,580 $ 1,381,511 $ 20,833,930 Restricted assets in the enterprise funds result from revenue bond requirements. The provisions of the water and sewer and utility tax bonds require the City to establish a reserve equal to the current portions of principal and interest due. In lieu of a reserve equal to the maximum principal and interest requirements in any fiscal year, the City has purchased surety bonds to meet this reserve requirement The required cash balances and reserve requirements as of September 30, 2007 have been met. Restricted resources are used first to fund expenses incurred for restricted purposes. Restricted assets are not reported on the balance sheets of the governmental funds; however, cash and cash equivalents, investments, and interest receivable of the debt service fund are restricted for debt service in accordance with revenue bond requirements. 39 City of Delray Beach, Florida Notes to Financial Statements (continued) September 30, 2007 9. Capital Assets The major components of capital assets for the City at September 30, 2007 are summarized as follows: Governmental Activities: Non-depreciable Assets: Land Construction in Frogress Total Non-depreciable Assets Depreciable Assets: Buildings Improvements Other Than Buildings Equipment Total Depreciable Assets Less Accumulated Depreciation for: Buildings Improvements Other Than Buildings Equipment Beginning Ending Balance Increases Decreases Balance $ 33,590,711 $ 3,379,289 $ (177,951) $ 36,792,049 11,322,370 14,715,729 (5,337,587) 20,700,512 44,913,081 18,095,018 (5,515,538) 57,492,561 29,774,416 1,417,570 (6,762) 31,185,224 68,615,260 5,298,126 (7,460) 73,905,926 31,784,878 4,300,334 (2,900,143) 33,185,069 130,174,554 11,016,030 (2,914,365) 138,276,219 (9,801,231) (995,042) 2,373 (10,793,900) (37,280,819) (3,200,611) 6,403 (40,475,027) (18,588,393) (3,176,877) 2,079,108 (19,686,162) Total Accumulated Depreciation (65,670,443) (7,372,530) 2,087,884 (70,955,089) Total Depreciable Assets, net 64,504,111 3,643,500 (826,481) 67,321,130 Governmental Activities Capital Assets, net $ 109,417,192 $ 21,738,518 $ (6,342,019) $ 124,813,691 Business-Type Activities: Non-depreciable Assets: Land Construction in Frogress Total Non-depreciable Assets Depreciable Assets: Buildings Improvements Other Than Buildings Equipment Total Depreciable Assets Less Accumulated Depreciation for: Buildings Improvements Other Than Buildings Equipment Total Accumulated Depreciation Total Depreciable Assets, net $ 5,576,862 $ - $ - $ 5,576,862 2,113,715 4,497,861 (1,552,980) 5,058,596 7,690,577 4,497,861 (1,552,980) 10,635,458 10,604,088 - - 10,604,088 144,342,432 4,822,759 - 149,165,191 11,765,980 1,461,567 (360,564) 12,866,983 166,712,500 6,284,326 (360,564) 172,636,262 (5,969,894) (317,520) - (6,287,414) (61,862,758) (2,965,716) - (64,828,474) (8,487,182) (968,921) 270,154 (9,185,949) (76,319,834) (4,252,157) 270,154 (80,301,837) 90,392,666 2,032,169 (90,410) 92,334,425 Business-Type Activities Capital Assets, net $ 98,083,243 $ 6,530,030 $ (1,643,390) $ 102,969,883 40 City of Delray Beach, Florida Notes to Financial Statements (continued) September 30, 2007 9. Capital Assets (continued) Depreciation expense for the fiscal year ended September 30, 2007 was charged to functions/programs of the primary government as follows: Governmental Activities: General Government $ 1,153,783 Public Safety 949,549 Physical Environment 1,748,139 Parks and Recreation 2,111,880 Internal Service Funds 1,409,179 Total depreciation expense -Governmental Activities $ 7,372,530 Business-Type Activities: Water and Sewer $ 3,487,127 Municipal Golf Course 210,079 Lakeview Golf Course 102,249 City Marina 71,765 Sanitation 2,015 Stormwater Utility 378,922 Total depreciation expense -Business-Type Activities $ 4,252,157 Discretely Presented Component Unit Changes in capital assets of the Delray Beach Community Redevelopment Agency are summarized as follows: Beginning Ending Balance Increases Decreases Balance Non-depreciable Assets: Land and Land Improvements $ 21,929,506 $ 750,073 $ (2,216,545) $ 20,463,034 Construction in Frogress 241,235 2,147,303 - 2,388,538 Depreciable Assets: Equipment, Furniture, and Fixtures Less Accumulated Depreciation for: Equipment, Furniture, and Fixtures Total Depreciable Assets, net Total Capital Assets, net 22,170,741 2,897,376 (2,216,545) 22,851,572 527,199 - (11,562) 515,637 (172,612) (31,355) 5,780 (198,187) 354,587 (31,355) (5,782) 317,450 $ 22,525,328 $ 2,866,021 $ (2,222,327) $ 23,169,022 10. Investment in Regional Plant Joint Venture In 1974, the City of Delray Beach joined with the City of Boynton Beach (Boynton Beach) to form the Board, a separate legal entity (see Note 1). The Board, which is governed by a body composed of the commission members from each city, oversees the operation of the regional wastewater treatment and disposal plant which services both cities and surrounding areas. The inter-local agreement between the City and Boynton Beach specifies that the Board has the authority to accept and disburse funds, transact business and enter into contracts for budgeted items. 41 City of Delray Beach, Florida Notes to Financial Statements (continued) September 30, 2007 10. Investment in Regional Plant Joint Venture (continued) In addition, the Board has the authority, subject to approval by a majority vote of each city commission before becoming effective, to adopt an annual budget, establish rates and charges for operations, maintenance, expansions and construction, enter into contracts for non-budgeted items and authorize the return of any surplus funds or levy additional charges for deficits of the Board to the respective cities. Ownership of the regional wastewater treatment and disposal plant is vested proportionately with the cities in accordance with the capital investments of each city, which to date are approximately 50% each. The Board charges each city for its share of the Board's operating expenses based on the percentage of flow of wastewater from each city. At September 30, 2007 the City had a receivable of $1,028,819 from the Board and a payable to the Board of $667,757. For the year ended September 30, 2007 the City paid approximately $5,665,000 to the Board for operating expenses, repair and replacement and capital charges. Each individual city is responsible for setting the rates and collecting charges for wastewater disposal from customers within its jurisdiction. Financial information relating to the Board as of and for the year ended September 30, 2007 is as follows: Net Assets Current and other assets Capital assets, net Total assets $ 6,977,739 42,428,510 $ 49,406,249 Current liabilities Noncurrent liabilities Net assets Total liabilities $ 3,308,291 200, 860 $ 3,509,151 $ 45,897,098 Change in Net Assets Charges for services $ 6,714,150 Capital grants and contributions 7,092,084 Total program revenues 13,806,234 Frogram expenses 7,331,628 Net program revenues 6,474,606 General revenues Transfers to joint venture participants 198,293 (531,051) Change in net assets $ 6,141,848 The City accounts for its investment in the Board as a joint venture recorded on the equity method of accounting. At September 30, 2007, the City's 50% equity interest in the net assets of the Board totaled $22,948,552 and has been reported in the City's financial statements as Investment in Regional Plant (joint venture). 42 City of Delray Beach, Florida Notes to Financial Statements (continued) September 30, 2007 11. Interfund Transactions Total interfund receivables/payables and transfers as of and for the year ended September 30, 2007 were as follows: Due From Due To Other Funds Other Funds Transfers In Transfers Out Major Governmental Funds General Fund $ - $ 14,358,238 $ 3,153,386 $ 6,925,481 Capital Improvement 5,188,832 - 5,258,527 204,100 2004 GO Bond 825,351 - 1,536,195 - Other Governmental Funds Special Revenue Funds: Law Enforcement Trust 92,459 - - - Developer Land Contribution 327,366 - - - Community Development - - 230,090 - SHIP 972,740 - - - HHR 226,644 - - - Beautification 1,065,412 - 1,145,708 212,410 Special Frojects 1,552,552 - 111,167 8,385 Cemetery Perpetual Care 493,675 - - - Debt Service Fund: Utilities Tax 486,100 - 1,636,060 30,951 Capital Frojects Fund: Beach Restoration 640,528 - 15,000 - Total Governmental Funds 11,871,659 14,358,238 13,086,133 7,381,327 Major Proprietary Fund Water and Sewer Fund - 544,134 91,000 2,475,140 Other Proprietary Funds Municipal Golf Course - 879,607 - 34,500 Lakeview Golf Course - 293,380 - 22,500 City Marina 558,078 - - 48,400 Sanitation Fund 702,292 - - 176,180 Stormwater Utility 26,916 - 45,000 1,096,000 Internal Service Funds Insurance 2,296,970 - - 2,196,426 Central Garage 619,444 - 208,340 - Total Froprietary Funds 4,203,700 1,717,121 344,340 6,049,146 Total Frimary Government $ 16,075,359 $ 16,075,359 $ 13,430,473 $ 13,430,473 The outstanding balances between funds result mainly from the time lag between the dates that (1) interfund goods and services are provided or reimbursable expenditures occur, (2) transactions are recorded in the accounting system, and (3) payments between funds are made. These balances also include the amount of working capital loans made to various funds that the General Fund expects to collect in the subsequent year. 43 City of Delray Beach, Florida Notes to Financial Statements (continued) September 30, 2007 11. Interfund Transactions (continued) Transfers are used to (1) move revenues from the fund with collection authorization to the debt service fund as debt service principal and interest payments become due, (2) move restricted amounts from borrowings to the debt service fund to establish mandatory reserve accounts, (3) move unrestricted General Fund revenues to finance various programs that the City must account for in another fund in accordance with budgetary authorizations, including amounts for capital projects and amounts provided as contributions or matching funds for beautification, community development and other grant programs. For the year ended September 30, 2007, the City also made one- time transfers (1) from the Insurance Fund to the General Construction Fund of $1,988,086 to purchase SAN Data Storage, construct an Information Technology (IT) building and renovate the north wing of City Hall. 12. Long-Term Debt The following is a summary of changes in long-term liabilities of the City for the fiscal year ended September 30, 2007: Governmental Activities: Revenue bonds General obligation bonds Unamortized bond premium Unamortized loss on bond refinancing Total bonds payable Installment agreements Compensated absences Insurance claims payable Total Governmental Activities Debt Business-Type Activities: Revenue bonds Unamortized bond premium Unamortized loss on bond refinancing Total bonds payable Installment agreements Compensated absences Beginning Ending Due Within Balance Additions Reductions Balance One Year $17,491,783 $30,010,000 $ (8,950,985) $38,550,798 $2,026,076 36,045,000 - (2,065,000) 33,980,000 2,220,000 745,400 760,787 (105,299) 1,400,888 136,142 (709,644) - 96,222 (613,422) 96,222 53,572,539 30,770,787 (11,025,062) 73,318,264 4,478,440 774,922 - (329,371) 445,551 297,469 6,992,436 1,170,935 (516,623) 7,646,748 507,892 3,942,628 10,459,886 (9,183,805) 5,218,709 1,821,493 $ 65,282,525 $42,401,608 $(21,054,861) $86,629,272 $ 7,105,294 $ 39,647,694 $12,350,000 $ (4,464,019) $47,533,675 $ 4,878,928 536,295 - (211,016) 325,279 211,015 (1,072,417) - 323,017 (749,400) 323,017 39,111,572 12,350,000 (4,352,018) 47,109,554 5,412,960 99,774 131,420 (57,351) 173,843 61,643 661,717 122,210 (32,836) 751,091 118,403 Total Business-Type Activities Debt $ 39,873,063 $12,603,630 $ (4,442,205) $48,034,488 $ 5,593,006 Governmental Activities The principal and interest on revenue bonds are payable from available non-ad valorem revenues. The debt service for utility tax obligations are payable from utilities tax revenues. General obligation bonds are payable from ad valorem taxes. Compensated absences are generally liquidated by the General Fund. 44 City of Delray Beach, Florida Notes to Financial Statements (continued) September 30, 2007 12. Long-Term Debt (continued) Governmental activities long-term debt, including current maturities, at September 30, 2007 consisted of the following: Revenue Bonds: 5.245%, $10,000,000 Revenue Bonds issued February 25, 2000 (Series $ 4,488,743 2000) due in principal amounts of $259,523 to $426,148 through June 1, 2019, with semi-annual interest payments due each June 1 and December 1 through June 1, 2019. The bonds were issued to finance all or a portion of the costs of certain roadway improvements including water, sewer and drainage work, and a portion of the costs of a tri-party radio system. (*) 3.50% to 4.2%, $15,020,000 Utility Tax Revenue Bonds issued December 2,357,055 19, 2002 (Series 2002) due in principal amounts of $895,362 to $1,461,694 through June 1, 2016, with semi-annual interest payments due each June 1 and December 1 through June 1, 2016. The bonds were issued to current refund the Utilities Tax Revenue Refunding and Improvement Bonds, Series 1992, advance refund the Utilities Tax Revenue Refunding Improvement Bonds, Series 1994, advance refund the Utilities Tax Revenue Bonds, Series 1995, current refund the Utilities Tax Revenue Bonds, Subordinate Series 1996, and current refund the Utilities Tax Revenue Bonds, Subordinate Series 1998. (*) 3.66%, $9,685,000 Revenue Refunding and Improvement Bonds issued 8,070,000 December 2, 2003 (Series 2003) due in principal amounts of $260,000 to $920,000 through June 1, 2019, with semi-annual interest payments due each June 1 and December 1 through June 1, 2019. The bonds were issued to current refund Series 1999 and Series 2002 Tax Exempt Bonds, in whole, and Series 2002 Taxable Bonds in part. (*) 4% - 5%, $24,635,000 Utility Tax Revenue Bonds issued September 26, 23,635,000 2007 (Series 2007) due in principal amounts of $19,188 to $2,364,939 through June 1, 2032 with semi-annual interest payments due each June 1 and December 1 through June 1, 2032. The bonds were issued to finance various parks and recreation projects, Fire Station #4, Environmental Services Building (in part), and to refund the City's 2005 Line of Credit (which was used to fund the Old School Square Parking Garage Froject). ~*) Total Revenue Bonds 38,550,798 General Obligation Bonds: 3.00%-5.00%, $15,685,000 General Obligation Bonds issued December 19, 11,025,000 2002 (Series 2002), due in annual principal installments of $1,020,000 to $2,055,000 through February 1, 2013, with semi-annual interest payments at 3.00% to 5.00% interest per annum due each February 1 and August 1 through February 1, 2013. The bonds were issued to partially refund, on a current basis, the General Obligation Bonds, Series 1993A and Series 1993B. 45 City of Delray Beach, Florida Notes to Financial Statements (continued) September 30, 2007 12. Long-Term Debt (continued) 2.50%-4.30%, $14,000,000 General Obligation Bonds issued September 30, $ 12,955,000 2004 (Series 2004), due in annual principal installments of $225,000 to $1,025,000 through February 1, 2024, with semi-annual interest payments due each February 1 and August 1 through February 1, 2024. The bonds were issued for the acquisition of land, equipping of new parks, recreation centers, parking garage and library fixtures. 415%, $10,000,000 General Obligation Bonds issued August 26, 2005 10,000,000 (Series 2005), due in annual principal installments of $720,000 to $1,135,000 starting February 1, 2014 through February 1, 2024, with semi- annual interest payments due each February 1 and August 1 through February 1, 2024. The bonds were issued for the acquisition of land, equipping of new parks, recreation centers, parking garage and library. Total General Obligation Bonds 33,980,000 Unamortized bond premium 1,400,888 Unamortized loss on bond refunding (613,422) Total General Obligation Bonds, Net 34,767,466 Long-term installment agreements: 2.97% to 3.61%, installment purchase agreements maturing in 2010 445,551 Compensated absences payable 7,646,748 Insurance claims payable (See note 14) 5,218,709 Total Governmental Activities Long-Term Debt, including current portion $ 86,629,272 * Amounts outstanding for the portion of this bond issue related to business-type activities are reported below. The provisions of the various bond resolutions differ in some respects, but generally provide for: 1. Establishment and maintenance of certain cash reserves for the utility tax revenue bonds. The maximum deposit requirement is usually set at the highest future annual principal and interest payment. In lieu of establishing the reserve, the City has purchased surety bonds for this amount. 2. Annual debt service funding by monthly transfers to a cash reserve account for utility tax revenue bonds. 3. Early redemption of outstanding bonds at call rates varying between 101% and 103% of the instrument's face value, depending on the bonds and call date. 4. Investing of cash reserves in time deposits or direct obligations of the U.S. Government. 5. Revenue pledged to meet obligations varies by the bond issue, but generally includes utility taxes, ad valorem taxes or other available funds. The City has not established a legal debt margin limit but has established policy guidelines for the management of debt. The City will strive to maintain a gross bonded general obligation principal debt at a level not to exceed 2% of the assessed value of taxable property within the City. The City will strive to ensure that its net bonded debt per capita does not exceed $700 and that the combined total of its direct net bonded debt and its share of overlapping debt issued by Palm Beach County does not exceed $2,000 per capita. 46 City of Delray Beach, Florida Notes to Financial Statements (continued) September 30, 2007 12. Long-Term Debt (continued) Long-term installment agreements consist of several agreements with vendors for the purchase of equipment used in govemmental activities. At September 30, 2007 the gross amount of the equipment held under these agreements was $1,510,307 and the accumulated depreciation totaled $690,025. Most agreements call for termination of the agreement and forfeiture of the equipment in the event the payments are not budgeted or made. Future payments through final maturity under governmental activities long-term installment agreements as of September 30, 2007 are as follows: Fiscal year ending September 30: 2008 2009 2010 Total minimum payments Less amount representing interest $ 307,009 136,791 13,416 457,216 (11,665) Outstanding balance at September 30, 2007 $ 445,551 Business-Type Activities Business-type long-term debt, including current portion, as of September 30, 2007 consisted of the following: Revenue bonds: 5.20% to 5.85%, $28,104,475 Water and Sewer Revenue Bonds issued on $ 5,974,475 June 1, 1993 (Series 1993). Capital appreciation bonds are due in amounts of $265,000 to $4,475,000 due October 1, 2010 through 2014. 4.40% to 5.50%, $15,030,000 Water and Sewer Revenue Bonds issued on 14,705,000 December 4, 1998 (Series 1997), with principal amounts of $85,000 to $3,945,000 due through October 1, 2010, with semi-annual interest payments due each October 1 and April 1 through October 1, 2010. 5.245%, $10,000,000 Revenue Bonds issued February 25, 2000 (Series 2000) 1,576,255 due in principal amounts of $85,477 to $173,852 thru June 1, 2019, with semi-annual interest payments due each June 1 and December 1 through June 1, 2019. The bonds were issued to finance all or a portion of the costs of certain roadway improvements including water, sewer and drainage work, and a portion of the costs of a tri-party radio system. (*) 3.50% to 4.2%, $15,020,000 Utility Tax Revenue Bonds issued December 19, 4,372,945 2002 (Series 2002) due in principal amounts of $420,000 to $573,306 through June 1, 2016, with semi-annual interest payments due each June 1 and December 1 through June 1, 2016. The bonds were issued to current refund the Utilities Tax Revenue Refunding and Improvement Bonds, Series 1992, advance refund the Utilities Tax Revenue Refunding Improvement Bonds, Series 1994, advance refund the Utilities Tax Revenue Bonds, Series 1995, current refund the Utilities Tax Revenue Bonds, Subordinate Series 1996 and current refund the Utilities Tax Revenue Bonds, Subordinate Series 1998. (*) 47 City of Delray Beach, Florida Notes to Financial Statements (continued) September 30, 2007 12. Long-Term Debt (continued) 2.25 to 5.00%, $11,670,000 Water and Sewer Revenue Bonds issued July 9, $ 1,110,000 2003 (Series 2003), with principal amounts of $550,000 to $3,705,000 due through October 1, 2008, with semi-annual interest payments due each October 1 and April 1 through October 1, 2008. The bonds were issued to finance the cost of refunding a portion of the 1993 Water and Sewer Bonds (Series 1993) and the 1999 Water and Sewer Bonds (Series 1999). 3.66%, $9,685,000 Revenue Refunding and Improvement Bonds issued 445,000 December 2, 2003 (Series 2003) due in principal amounts of $5,000 to $90,000 through June 1, 2019, with semi-annual interest payments due each June 1 and December 1 through June 1, 2019. The bonds were issued to refund the Revenue Tax Exempt Bonds, Series 2002, and Series 1999, in whole and Series 2002 Taxable Bonds in part. (*) 412%, $7,000,000 Water and Sewer Revenue Bonds issued May 6, 2006 7,000,000 (Series 2006A) with principal amounts of $110,000 to $650,000 due through October 1, 2021, with semi-annual interest payments due each October 1 and April 1 through October 1, 2021. The bonds were issued to finance the cost of a new Environmental Services building and for funding of various capital projects at the South Central Regional Wastewater Treatment Plant. 3.98%, $2,350,000 Water and Sewer Revenue Bonds issued November 17, 2,350,000 2006 (Series 2006B), with principal amounts of $120,000 to $205,000 due through October 1, 2021, with semi-annual interest payments due each October 1 and April 1 through October 1, 2021. The bonds were issued to finance the City's share of the Reclaimed Water Treatment Froject at the South Central Regional Wastewater Treatment Plant. 4.41%, $9,000,000 Water and Sewer Revenue Bonds issued September 18, 9,000,000 2007 (Series 2007), with principal amounts of $190,000 to $1,240,000 due through October 1, 2021, with semi-annual interest payments due each October 1 and April 1 through October 1, 2021. The bonds were issued to finance the City's share of the Reclaimed Water and Deep Well Froject at the South Central Regional Wastewater Treatment Plant. 4% - 5%, $24,635,000 Utility Tax Revenue Bonds issued September 26, 2007 1,000,000 (Series 2007), with principal amounts of $812 to $100,061 due through October 1, 2021, with semi-annual interest payments due each December 1 and June 1 through June 1, 2032. The bonds were issued to finance various parks and recreation projects, Fire Station #4, Environmental Services Building (in part), and to refund the City's 2005 Line of Credit (*) Unamortized bond premium Unamortized loss on bond refunding Total Revenue Bonds 47,533,675 325,279 (749,400) Total revenue bonds payable 47,109,554 Compensated absences payable 751,091 Long-term installment purchase agreements: 3.61% to 3.77%, maturing in 2010 173,843 Total Business-Type Activities Long-Term Debt, including current portion $ 48,034,488 48 City of Delray Beach, Florida Notes to Financial Statements (continued) September 30, 2007 12. Long-Term Debt (continued) * Amounts outstanding for the portion of this bond issue related to governmental activities were reported above. The Utility Tax Revenue Bonds and the Water and Sewer Revenue Bonds mature on a term and serial basis through the maturity dates indicated and are secured by a pledge of the City's utility service taxes and the net revenue of the City's water and sewer system, respectively. The Series 2003 revenue bond matures on a serial basis through the maturity date and is secured by non ad-valorem revenues. The provisions of the bond resolutions for the debt of the Water and Sewer Fund, Municipal Golf Course Fund, Lakeview Golf Course Fund and the Stormwater Utility Fund differ in some respects, but generally provide for: 1. Annual debt service funding by monthly transfers of cash to a reserve account. 2. Establishment of certain cash reserves for the Water and Sewer and Utility Tax Revenue Bonds. The maximum deposit required is usually set at the highest future annual principal and interest payment. The City purchased sureties equal to the requirement. 3. Maintenance of a renewal and replacement cash reserve set at 5% of the previous year's gross revenue. 4. Early redemption of outstanding bonds at call rates ranging from 101% to 102% of the instrument's face value depending on the bonds and call date. 5. Investing of cash reserves in time deposits, direct obligations of the U.S. Government and other authorized investments with varying maturity restrictions. 6. The use of cash is generally restricted to the following priority: operation and maintenance, debt service, reserves, renewal and replacement, and any other lawful purpose. Long-term installment agreements consist of several agreements with vendors for the purchase of equipment used in business-type activities. At September 30, 2007 the gross amount of the equipment held under these agreements was $248,960 and the accumulated depreciation totaled $108,918. Most agreements call for termination of the agreement and forfeiture of the equipment in the event the payments are not budgeted or made. Minimum future lease payments through maturity under business-type activities long-term installment agreements (capital leases) as of September 30, 2007 are as follows: Fiscal year ending September 30: 2008 2009 2010 2011 Total minimum payments Less amount representing interest ~ 67,049 67,049 43,346 5,905 183,349 (9,506) Outstanding balance at September 30, 2007 $ 173,843 Interest Expense: Total interest costs incurred on all City debt for the year ended September 30, 2007 were $2,891,220 all of which was expensed. Defeased Bonds: At September 30, 2007 there were no defeased bonds outstanding. 49 City of Delray Beach, Florida Notes to Financial Statements (continued) September 30, 2007 12. Long-Term Debt (continued) The annual requirements to pay principal and interest to maturity on the bonds outstanding as of September 30, 2007 are as follows: Governmental Activities Fiscal Year Ending September 30 2008 2009 2010 2011 2012 2013-2017 2018-2022 2023-2027 2028-2032 Total Revenue Bonds General Obligation Bonds Principal Interest Principal Interest Total $ 2,026,076 $ 1,604,133 $ 2,220,000 $ 1,368,403 $ 7,218,612 2,118,949 1,791,578 2,295,000 1,292,978 7,498,505 906,572 1,634,474 2,375,000 1,201,615 6,117,661 940,982 1,596,007 2,485,000 1,091,540 6,113,529 985,390 1,555,913 2,600,000 973,840 6,115,143 5,599,465 7,111,812 8,720,000 3,531,991 24,963,268 6,785,223 5,800,057 9,065,000 1,853,417 23,503,697 8,433,191 3,994,971 4,220,000 180,002 16,828,164 10,754,950 1,665,537 - - 12,420,487 $ 38,550,798 $ 26,754,482 $ 33,980,000 $ 11,493,786 $110,779,066 Business-Type Activities Fiscal Year Revenue Bonds Ending September 30 Principal Interest Total 2008 $4,878,928 $1,471,880 $ 6,350,808 2009 5,256,047 1,476,109 6,732,156 2010 5,218,874 1,472,139 6,691,013 2011 5,458,653 1,216,155 6,674,808 2012 3,010,347 3,784,239 6,794,586 2013-2017 12,879,192 12,648,107 25,527,299 2018-2022 10,019,777 1,320,614 11,340,391 2023-2027 356,809 169,029 525,838 2028-2032 455,048 70,469 525,517 Total $ 47,533,675 $ 23,628,741 $ 71,162,416 Component Unit -Changes in component unit long-term liabilities of the Delray Beach Community Redevelopment Agency (CRA) for the year ended September 30, 2007 were as follows: Beginning Ending Due Within Balance Additions Reductions Balance One Year Governmental Activities: Revenue Bonds $ 17,955,000 $ - $ (1,240,000) $ 16,715,000 $ 1,300,000 50 City of Delray Beach, Florida Notes to Financial Statements (continued) September 30, 2007 12. Long-Term Debt (continued) The CRA outstanding Revenue Bonds at September 30, 2007 consist of the following: 4.80% Delray Beach Community Redevelopment Agency Tax Increment Redevelopment Revenue Bond (Series 1999A), maturity date September 1, 2019. 4.2982% Delray Beach Community Redevelopment Agency Tax Increment Redevelopment Revenue Bond (Series 2004A Tax Exempt), maturity date September 1, 2019. 5.9095% Delray Beach Community Redevelopment Agency Tax Increment Redevelopment Bonds (Series 2004B Taxable), maturity date September 1, 2016. Total Revenue Bonds $ 6,755,000 8,470,000 1,490,000 $ 16,715,000 The Delray Beach CRA's revenue bonds are secured by tax increment revenues and all investment earnings thereon received by the Delray Beach CRA. The annual requirements to pay principal and interest to maturity of the CRA revenue bonds outstanding as of September 30, 2007 are as follows: Principal Interest Total 2008 2009 2010 2011 2012 2013-2017 2018-2019 Total 13. Pension Plans Description of the Plans 1,300,000 $ 776,350 $ 2,076,350 1,365,000 715,292 2,080,292 1,425,000 651,128 2,076,128 1,520,000 584,076 2,104,076 1,595,000 512,558 2,107,558 7,180,000 1,433,678 8,613,678 2,330,000 155,888 2,485,888 $ 16,715,000 $ 4,828,970 $ 21,543,970 The City contributes to two single-employer defined benefit pension plans covering substantially all full-time City employees. The General Employees' Pension Fund is for employees who have completed one year of credited service excluding the City Commission, City manager, assistant City manager, City attorney and associates, department heads upon their written election not to participate in the plan and firefighters and police officers covered under the Police and Firefighters' Retirement System Fund. The Police and Firefighters' Retirement System Fund covers all non-civilian police and fire employees. Each plan is administered by an independent Board of Trustees and accounted for by the City as a separate fund. An actuarial report is prepared annually. General Employees' Pension Fund -The benefit provisions and all other requirements of the General Employees' Pension Fund are established by City Ordinance and are summarized as follows: The funding methods and determination of benefits payable are provided in the various sections of the City's Code of Ordinances, including subsequent amendments thereto. The code provides, in general, that funds are to be accumulated from employee contributions, city contributions and income from investment of accumulated funds. The investments of the fund are administered, managed and operated by its 51 City of Delray Beach, Florida Notes to Financial Statements (continued) September 30, 2007 13. Pension Plans (continued) respective Boards of Trustees. The retirement committee (the Board of Trustees) consists of a chairperson and four additional members; all are appointed by the City Commission. Vesting Benefits vest 50% after five years of service plus 10% each additional year. Eligibility for Retirement-For normal retirement, completion of 30 years credited service regardless of age, or 10 years of service and attainment of age 60. Annual Retirement Benefit-2.5% of the average monthly compensation times years of service with a maximum benefit of 75%. Monthly income is payable for the life of the participant, the same income to the surviving spouse for one year, then 60% of the monthly income to the surviving spouse until the earlier of the spouse's death or remarriage. Effective July 2005 participants have the option of a 3% multiplier with a maximum benefit of 90%. Employees selecting this option will contribute an additional 3.45% of earnings. There was also an option of purchasing all or a portion of prior service at the increased multiplier. Other Benefits-The system also provides for optional retirement benefits, early retirement, extended retirement, disability retirement and death benefits. Deferred Retirement Option Plan (DROP)-Employee's with 10 years of credited service and eligible for normal retirement have the option of entering the DROP plan. When entering the DROP plan, the employee will not terminate employment with the City but will cease accruing a benefit and the monthly benefit under the applicable plan, as of the election date will be directed to aself-administered 401(a) Plan. After a maximum of 60 months, the employee must terminate employment with the City. Employee Contributions-Effective October 1, 2003, the plan became contributory after 3 years being noncontributory. The employee contribution rate is 2.50% of an employee's basic annual compensation. If the employee chooses the 3% multiplier, there is an additional contribution of 3.45% (making a total of 5.95%). If an employee leaves covered employment or dies before five years of credited service, accumulated employee contributions are refunded to the employee or the designated beneficiary. City Contributions-City contributions are based upon actuarially determined amounts, which together with earnings and employee contributions, are sufficient to fund the plan. Police and Firefighters' Retirement System Fund -The benefit provisions and all other requirements of the Police and Firefighters' Retirement System Fund are established by City Ordinance and are summarized as follows: The funding methods and determination of benefits payable are provided in the various acts of the Florida Legislature, which created the fund. 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. The act also provides that, should the accumulated funds at any time be insufficient to meet and pay the benefits due, the City shall supplement the fund by an appropriation from current funds, or from any revenues which may lawfully be used for said purposes in an amount sufficient to make up the deficiency. The investments of the fund are administered, managed and operated by the Fund's Board of Trustees, consisting of two outside commission appointees, two designees from the chief(s), one member of each department elected by the membership and the mayor of the City. Vesting Benefits fully vest after 10 years of service. 52 City of Delray Beach, Florida Notes to Financial Statements (continued) September 30, 2007 13. Pension Plans (continued) Eligibility for Normal Retirement--Upon completion of 20 years of service regardless of age. Annual Retirement Benefit-Normal retirement benefits are based upon 2.5% of average monthly earnings times years of service with a maximum benefit of 75% up to 20 years. After 20 years of service, a 3% multiplier is used for each year of service. Employees who were actively employed as of March 15, 2004 may elect a normal retirement benefit of 3.5% multiplier for each year of service once 20 years of service has been attained with a maximum of 87.5%. Employees selecting this option will contribute an additional 3% of earnings. The normal retirement benefit is payable for the life of the member, and upon death 100% of the benefit is payable to the spouse for one year and 60% thereafter until death or remarriage. Other Benefit.~The plan also provides for disability retirement and death benefits. Deferred Retirement Option Plan (DROP)~mployee's with 20 years of credited service have the option of entering the DROP plan. When entering the DROP plan, the employee will not terminate employment with the City, but will cease accruing a benefit under the plan, and the monthly benefit as of the election date will be directed to aself-administered 401(a) plan. After a maximum of 60 months, the employee must terminate employment with the City. Employee Contributions-Effective March 15, 2004, if the employee selected the 3.5% multiplier, the contribution is 6%. If not selected, the employee contribution rate remained at 3% of an employee's annual compensation. If an employee leaves covered employment prior to vesting, contributions are refunded to the employee with interest. State of Florida Contributions-Pursuant to Chapters 175 and 185 of the Florida Statutes, a premium tax on certain casualty insurance contracts written on the City's properties is collected by the state and remitted to the City for the Police and Firefighters' Retirement System Fund. City Contributions-City contributions are based upon actuarially determined amounts which, together with earnings, employee and state contributions, are sufficient to fund the plan. Membership Membership data of the pension plans as of October 1, 2006, the date of the most recent actuarial valuations are summarized as follows: Police and General Firefighters' Employees' Retirement Pension Fund System Fund Retirees and beneficiaries receiving benefits 160 163 Terminated employees entitled to benefits but not receiving them 53 4 Vested current employees 180 122 Non-vested current employees 213 125 Related Party Transactions There were no City securities included in the assets of the General Employees' Pension Fund or the Police and Firefighters' Retirement System Fund. 53 City of Delray Beach, Florida Notes to Financial Statements (continued) September 30, 2007 13. Pension Plans (continued) Actuarial Methods and Significant Assumptions General Employees' Police and Firefighters' Pension Fund Retirement System Fund Valuation date October 1, 2006 October 1, 2006 Actuarial cost method Aggregate Cost Entry Age Normal Post retirement benefit increases None Annual increase of 1% for retirees after October 1, 1993 Amortization method N/A~i~ Level Percent of Payroll -Closed Remaining amortization period N/A~i~ 30 years Asset valuation method 5-year smoothed market 5 -year smoothed market Actuarial assumptions: Investment rate of return 7.75% 8.5% Projected salary increases* 5.0% 6.0% Cost of living increases N/A 1.0% * Includes inflation rate 4.0% 4.0% ~i~ Use of the Aggregate Cost method does not identify or separately amortize unfunded liabilities. Contribution Requirements and Contributions Made The Florida Legislature, City Commission and each Pension Board govern the City and employee contribution requirements for both plans. The City's contribution to the plans is an actuarially determined periodic amount to ensure that sufficient assets will be available to pay benefits when due. Annual pension costs and contribution information for the last three fiscal years are as follows: Annual Net Pension Pension Percentage Obligation Year Ended September 30 Cost Contributed (Asset) General Employees' Pension Fund 2007 $ 2,008,058 100% $ 0 2006 2,011,383 100 0 2005 1,441,861 100 0 Police and Firefighters' Retirement System Fund 2007 5,683,527 99.9 (65,861) 2006 5,298,352 99.9 (69,935) 2005 4,682,768 99.9 (74,206) 54 City of Delray Beach, Florida Notes to Financial Statements (continued) September 30, 2007 13. Pension Plans (continued) The annual pension cost and net pension asset of the Police and Firefighters' Retirement System Fund for the most recent actuarial valuation are as follows: Annual required contribution (ARC) $ 5,679,453 Interest on net pension obligation (NPO) (5,944) Adjustment to ARC (10,018) Annual pension cost 5,683,527 Contributions made 5,679,453 Increase in NPO 4,074 NPO (asset) at October 1, 2006 (69,935) NPO (asset) at September 30, 2007 $ (65,861) Significant Accounting Policies Basis of Accounting-The City's financial statements for the two pension funds are prepared using the accrual basis of accounting. Employer and plan member contributions are recognized in the period that contributions are due. Method Used to Value Invest~nent.~Investments in the two pension funds are reported at fair value according to the independent custodian for each plan using various third-party pricing sources. Pension Plan Financial Statements The Police and Firefighters' Retirement System Fund issues a publicly available financial report that includes financial statements and required supplementary information. That report may be obtained by writing to the City of Delray Beach, 100 NW l~r Avenue, Delray Beach, FL, 33444 or by calling (561) 243-7012. The General Employees' Pension Fund does not issue a publicly available financial report, and the separate financial statements for the General Employees' Pension Fund as of and for the year ended September 30, 2007 are as follows: Statement of Plan Net Assets ASSETS Investments: Interest bearing investments Equity securities Mutual funds Frepaid expenses Interest and dividends receivable LIABILITIES Accounts payable Total assets Total liabilities NET ASSETS held in trust for pension benefits $ 688,741 20,553,127 59,125,77 3 400 54,943 80,422,984 20,483 20,483 $ 80,402,501 55 City of Delray Beach, Florida Notes to Financial Statements (continued) September 30, 2007 13. Pension Plans (continued) Statement of Changes in Plan Net Assets ADDITIONS Contributions: Employer Plan members Total contributions Investment earnings: Net appreciation in fair value of investments Interest Dividends Less investment expenses -custodian fees Net investment gain DEDUCTIONS Benefits Refunds of contributions Other operating expenses Net Assets at October 1, 2006 Total additions Total deductions Change in net assets Net Assets at September 30, 2007 Other Employee Benefit Plans $ 2,008,058 728, 325 2,736,383 6,729,155 24,508 1,852,111 8,605,774 252,219 8,353,555 11,089,938 2,411,389 51,081 13,606 2,476,076 8,613,862 71,788,639 $ 80,402,501 For employees not covered by one of the City's pension plans, the City contributed 9.5% of the base salary to the ICMA 457 Deferred Compensation Plan up to allowable limits. In 1996 the City instituted a 401(a) plan for department heads with a 3% match (Resolution 17-97). In 2000, this program was opened to certain eligible management and key employees to contribute up to 3% of their base salary to the ICMA Deferred Compensation Plan or 3% of their base salary to the ICMA 401(a) Plan with the City matching the contribution (Administrative Policy EB-15). Employees who were eligible to participate in the 401(a) Plan could exceed the 3% contribution with after tax dollars. All contributions are in accordance with Internal Revenue Service regulations. Activity in the 401(a) Plan for the year ended September 30, 2007 is summarized as follows: Balance at October 1, 2006 Employer contributions Employee contributions Investment earnings Distributions Balance at September 30, 2007 $ 386,854 38,947 71,081 54,740 (86,000) $ 465,622 The City has implemented a VantageCare Retirement Health Savings Plan which allows employees in the calendar year prior to termination (retirement), an election to deposit tax free part or all of their accumulated sick and vacation pay into the Plan. The Plan would then allow tax free withdrawals if the funds are used for qualified 56 City of Delray Beach, Florida Notes to Financial Statements (continued) September 30, 2007 13. Pension Plans (continued) medical expenses. The effective date of the Plan was August 2002. In March, 2007, the City was notified by ICMA, the administrator of VantageCare Retirement Health Savings Plan, that all voluntary contributions must cease immediately. Therefore, contributions were allowed until December 31, 2007 if the employee made the election prior to December 31, 2006. Balance as of October 1, 2006 $ 513,708 Contributions 29,485 Earnings 52,906 Service Fees (2,165) Distributions (33,902) Balance as of September 30, 2007 $ 560,032 14. Self-Insurance Program The City has a Managed Retention, Frotected Self-Insurance Frogram whereby the City is mainly self-insured for liability coverage. Workers' compensation, fidelity and property coverage are insured with sizeable deductible self- insured retentions. There were no significant changes in insurance coverage from the prior year and the amounts of settlements did not exceed insurance coverage for any of the past three years. A loss fund of $1,950,000 maximum applies per year over which an aggregate coverage of $1,000,000 would apply should the loss fund be exhausted in a given year. The City implemented aself-insured health plan with Cigna as the third party administrator in February 2002. The City is self-insured up to a stop loss of $100,000 per claim and has purchased excess insurance for claims exceeding the stop loss for individual and aggregate claims. Contributions from other funds are made as needed to meet the estimated payments resulting from purchased and self-insurance programs, and operating expenses based on the City's historical experience and acase-by-case evaluation of claims. For the year ended September 30, 2007, contributions of $12,708,749 were made to the Insurance Fund by other funds and are reflected as interfund services provided and used in the accompanying financial statements. The City has recorded a claims liability of $5,218,709 ($1,821,493 current and $3,397,216 long-term) which is an increase of $1,276,081 from the prior year. The increase was due to a workers compensation claim that has exceeded the loss threshold, which means the City is directly paying all claims. The liability falls within the actuarially determined range, from an actuarial valuation for all claims based upon the date the loss was incurred and includes a provision for claims incurred but not yet reported. The following surnrnarizes the claims liability activity for the current and prior year: Balance at September 30, 2005 Claims expense Claims paid Balance at September 30, 2006 Claims expense Claims paid Balance at September 30, 2007 $ 4,406,900 7,786,927 (8,251,199) 3,942,628 10,459, 886 (9,183,805) $ 5,218,709 57 City of Delray Beach, Florida Notes to Financial Statements (continued) September 30, 2007 14. Self-Insurance Program (continued) The claims liability at September 30, 2007 and 2006 is summarized as follows: Current Non-current 2007 2006 $ 1,821,493 $ 1,295,651 3,397,216 2,646,977 $ 5,218,709 $ 3,942,628 15. Related Party Transactions The CRA is a component unit of the City of Delray Beach, Florida. For the year ended September 30, 2007 the CRA's tax increment revenues include $9,202,575 received from the City. The CRA paid the City approximately $700,000 for contractual services provided by the City in connection with various administrative and redevelopment activities of the CRA for the year ended September 30, 2007. In October 2005 the CRA sold a parcel of land to the City for $6,460,000 in connection with the Old School Square project. As a condition of this sale the CRA was to make a contribution of $6,500,000 to the City for the Old School Square project. In June 2006 the CRA transferred property with a fair market value of $6,000,000 to the City for the Old School Square project The remaining $500,000 contribution was made through a land sale to the City in November 2006. For the year ended September 30, 2007 the CRA also sold seven properties with an estimated fair value of $975,727 to the City for $10 each. 16. Commitments and Contingencies Contract Commitments The City has various long-term contractual obligations for construction projects on which work has not been completed. The remaining commitments on these obligations at September 30, 2007 are as follows: Capital project funds Water and Sewer Fund $ 8,598,265 3,538,355 $ 12,136,620 Payments from the Water and Sewer Fund for work in progress have been capitalized as construction in progress in the Water and Sewer Fund. The projects financed by the capital projects fund have been capitalized in the government wide financial statements as construction in progress. Litigation, Claims and Assessments The City is a defendant in certain lawsuits and is involved in other legal matters occurring in the normal course of operations. While the ultimate outcome of these matters cannot be determined at this time, in the opinion of the City and its management, no material losses in excess of estimated liabilities or insured limits are expected to result from the settlement of these claims. 58 City of Delray Beach, Florida Notes to Financial Statements (continued) September 30, 2007 16. Commitments and Contingencies (continued) Grants The grant revenues received by the City are subject to audit and adjustment by the grantor agencies, principally the Federal government and the State of Florida. If expenditures are disallowed by the grantor agencies as a result of such an audit, any claim for reimbursement would be a liability of the City. In the opinion of management, all grant expenditures are in compliance with the terms of the grant agreements and applicable federal and state laws and regulations. 17. Prior Period Adjustment The Police and Firefighters Retirement System Fund (the "Fund"), a fiduciary fund of the City, which represents 60% of the total assets and 66% of the total additions of the Fiduciary Funds of the City, issued a separate, publicly available financial report for the year ended September 30, 2007 which was audited by another auditor. That financial report included a prior period adjustment and stated that "the net assets at September 30, 2006 incorrectly presented the entire State Chapter 185 annual contributions as available to pay benefits. However, in accordance with Chapter 185.35, a portion of those annual contributions could not be used for benefits until the Fund provided for the minimum benefits described in Chapter 185. The amount of Chapter 185 monies that could only be used for possible future benefits that was held by the Fund at September 30, 2006 was $842,365. The effect of the misstatement was to overstate the net assets held for pension benefits by $842,365." The State Chapter 185 monies that are not available for benefits at September 30, 2007 are reported on the Statement of Plan Net Assets as a liability for "State monies held in reserve". 59 Required Supplementary Information CITY OF DELRAY BEACH, FLORIDA BUDGETARY COMPARISON SCHEDULE GENERAL FUND For the Fiscal Year Ended September 30, 2007 REVENUES Taxes Licenses and permits Intergovernmental Charges for services Fines and forfeitures Miscellaneous Total Revenues EXPENDITURES Current: General government Public safety Physical environment Parks and recreation Debt service: Principal retirement Interest and fiscal charges Total Expenditures Excess of Revenues Over Expenditures Variance with Final Budget - Budgeted Amounts Actual Positive Original Final Amounts (Negative) $ 73,490,910 $ 74,497,910 $ 74,010,119 $ (487,791) 4,109,060 4,152,060 4,325,079 173,019 7,876,740 8,413,621 8,103,081 (310,540) 6,327,120 6,102,760 6,605,953 503,193 1,022,900 953,900 790,074 (163,826) 5,228,980 5,643,505 5,782,037 138,532 98,055,710 99,763,756 99,616,343 (147,413) 21,019,950 20,459,950 19,726,138 733,812 52,800,090 53,761,572 52,237,155 1,524,417 3,646,060 3,772,049 3,615,489 156,560 11,951,770 12,915,546 12,400,350 515,196 2,934,550 2,934,550 2,934,548 2 2,428,820 2,173,820 2,149,647 24,173 94,781,240 96,017,487 93,063,327 2,954,160 3,274,470 3,746,269 6,553,016 2,806,747 OTHER FINANCING SOURCES (USES) Transfers in 2,989,050 2,997,435 3,153,386 155,951 Transfers out (6,263,520) (7,097,973) (6,925,481) 172,492 Total Other Financing Sources (Uses) (3,274,470) (4,100,538) (3,772,095) 328,443 Net change in fund balance $ - $ (354,269) 2,780,921 $ 3,135,190 Fund balance -October 1, 2006 20,576,411 Difference between GAAP and budgetary basis 28,843 Fund balance -September 30, 2007 $ 23,386,175 The notes to budgetary comparison schedule are an integral part of this schedule. 60 City of Delray Beach, Florida Notes to Budgetary Comparison Schedule September 30, 2007 1. Budgetary Accounting Appropriated budgets have been legally adopted for the General Fund on the same modified-accrual basis used to reflect revenue and expenditures, except that for budgetary purposes, current year encumbrances are treated as expenditures, on-behalf payments from the State for Police and Firefighters pension benefits are not budgeted and capital outlays are reflected as current expenditures within each governmental function. Changes or amendments to the total budgeted expenditures of tl~ City or a department must be approved by the City Commission; however, changes within departments which do not affect the total department expenditures may be approved at the administrative level. Accordingly, the legal level of control is at the department level. All unencumbered appropriations lapse at year end. The City Commission approved budget amendments totaling $2,070,700 during the year ended September 30, 2007, which increased the original General Fund appropriations (expenditures and transfers out) from $101,044,760 to a revised total of $103,115,460. 2. Budget and Actual Comparisons The budgetary comparison schedule for the General Fund is prepared under the basis of accounting used in preparing the appropriated budget. As indicated in Note 1, current year encumbrances are treated as expenditures for budgetary purposes and on-behalf payments are not budgeted In addition, for budgetary purposes the proceeds from the sale of capital assets are included in miscellaneous revenues, but are considered an other financing source for GAAP. As a result, the General Fund revenue and expenditures reported in the budget and actual statement differ from the expenditures reported on the basis of GAAP. These differences can be reconciled as follows: Revenues Expenditures Current year encumbrances outstanding at year end Frior year encumbrances paid in the current year Net encumbered expenditures On-behalf payments for pension benefits Froceeds from sale of capital assets Net differences -GAAP and budgetary basis GAAP basis Budgetary basis - $ 408,194 - (379.351 - 28,843 (1,784,631) (1,784,631) 62,471 - (1,722,160) (1,755,788) 101,338,503 94,819,115 $ 99,616,343 $ 93,063,327 61 City of Delray Beach, Florida Required Supplementary Information- Schedule of Pension Funding Progress September 30, 2007 Police and Firefighters' Retirement System Fund Unfunded (Assets in Excess of) Actuarial AAL as a Accrued Liability Unfunded (Assets Percentage of Actuarial Actuarial Value (AAL)- Entry in Excess of) Funded Ratio Covered Payroll Covered Payroll Valuation Date of Assets (a) Age (b) AAL (b-a) (a/b) (c) [(b-a)/c] 10/1/1997 $ 49,260,808 $ 49,181,336 $ (79,472) 100.2% $ 10,760,239 (0.7)% 10/1/1998 55,648,688 53,317,548 (2,331,140) 104.4 10,763,306 (21.7) 10/1/1999 68,346,786 65,029,144 (3,317,642) 105.1 11,634,080 (28.5) 10/1/2000 72,943,063 71,254,488 (1,688,575) 102.4 11,896,571 (14.2) 10/1/2001 75,998,084 79,462,714 3,464,630 95.6 12,405,820 27.9 10/1/2002 76,285,414 85,909,259 9,623,845 88.0 13,312,406 72.3 10/1/2003 79,037,463 102,962,143 23,924,680 76.8 14,624,793 163.6 10/1/2004 82,914,153 112,927,236 30,013,083 73.4 15,512,087 193.5 10/1/2005 87,160,398 123,307,335 36,146,937 70.7 15,005,297 240.9 10/1/2006 93,291,628 134,029,918 40,738,290 69.6 15,143,925 269.0 Note: A schedule of funding progress is not presented for the General Employees' Pension Fund because the aggregate actuarial cost method does not separately identify unfunded actuarial accrued liabilities. 62 City of Delray Beach, Florida Required Supplementary Information- Schedules of Employer and State Pension Contributions For the Fiscal Year Ended September 30, 2007 General Employees' Pension Fund Annual Required Fiscal Year Ended Employer Percentage September 30, Contribution Contribution 1998 $ 770,101 100.0% 1999 - 100.0 2000 - 100.0 2001 - 100.0 2002 84,122 100.0 2003 328,603 100.0 2004 701,388 100.0 2005 1,441,861 100.0 2006 2,011,383 100.0 2007 2,008,058 100.0 Police and Firefighters' Retirement System Fund Annual Required Total Annual Fiscal Year Ended Annual State Employer Required Percentage September 30, Contribution Contribution Contribution Contribution 1998 $ 504,922 $ 1,323,366 $ 1,828,288 100.0% 1999 504,922 1,327,517 1,832,439 100.0 2000 504,922 1,246,653 1,751,575 100.0 2001 504,922 965,604 1,470,526 100.0 2002 504,922 1,493,263 1,998,185 100.0 2003 504,922 1,818,548 2,323,470 100.0 2004 504,922 2,919,101 3,424,023 100.0 2005 504,922 4,177,846 4,682,768 100.0 2006 504,922 4,789,159 5,294,081 100.0 2007 504,922 5,174,531 5,679,453 100.0 63 Combining and Individual Fund Statements and Schedules Non-Major Governmental Funds Special Revenue Funds Special Revenue Funds are used to account for the proceeds of specific revenue sources (other than major capital projects) requiring separate accounting because of legal or regulatory provisions or administrative action. Law Enforcement Trust Fund -This fund accounts for revenue received from confiscated and forfeited properties from cases involving the City's police department. Expenditures from this fund are generally for police education and training programs and equipment. Developers Land Contribution Fund -This fund accounts for revenue received from developers operating within the City for projects other than those financed by proprietary funds. The City uses the developer contributions to purchase land or capital improvements for recreation facilities. Conurcuniry Development Fund -This fund accounts for revenue received from federal, state and local governments under numerous grant programs which are used for various community development and improvement projects within the City. SHIP Fund -This fund accounts for revenue received from the Florida Housing Finance Agency for the State Housing Initiatives Partnership (SHIP) Frogram to provide for renovation of buildings to be used for affordable multi-family housing within the City. HHR Fund -This fund accounts for revenue received from the Florida Housing Finance Agency for the State Hurricane Housing Recovery (HHR) Frogram to expand and preserve affordable housing within the City. Beautification Fund -This fund accounts for revenue received from public service taxes, which is used for capital improvements to beautify the City. Special Projects Fund - This fund is used to account for assets held in trust by the City for a variety of earmarked purposes. Cemetery Perpetual Care Fund -This fund is used to account for assets held by the City to provide maintenance for the cemetery grounds. City Ordinance allows for the use of principal in achieving this purpose. Debt Service Fund Utilities Tax Fund -This fund is used to account for assets held for the repayment of principal and interest on debt reported in the government-wide financial statements. The Debt Service Fund of the City is the Utilities Tax Fund. Capital Projects Fund Capital Frojects Funds are used to account for financial resources for the acquisition or construction of major capital facilities (other than those financed by proprietary funds and similar trust funds). The capital projects fund used by the City is as follows: Beach Restoration Fund -This fund is used to account for improvements to the municipal beach area of the City. 64 Q Q Ca x z o~~ w x Q v W °" W ~ ~ c ~ x ~~ ~~~ W~o~' Q U ~" o z U ~ CC .--i O~ C ~C ~C C V1 h O G oC Vl C ~ h C M ~ O • O h o ~~ l l~ N ~ ~' ~ N O~ --i C h --i M ~C w z o e4 e4 L+ Vi OC ~ i u i ~ = i i i ~ N ~ ~ i .ry ~ •~ ~ ~ i-i O ~ ~ ~ O U Pte Gl ~ .~ ~ r . ~ v3 v3 -~ c -~ oc o oc ~ ~e ~i ~ ~ ~ y F c N oc ~ oc ~c ~ `'~ A v3 v3 c ~n ~n ~ ~ r r ~ ~ p ~ ~O ~ ~ ~O ~ `~ ~ ~ ~ ~'Cj U P~.~ v3 v3 ~ '" N ~ m ~ u ~ ~ o ~ "' `~ ~ i ~ N N .~ y oc r ~ oc ~ M ma ~ P. . y e4 e4 ~ O N ~ N u ~ ~ ~' c c x x N N x N N x ~c c ~c H M N V: x ~_ =a G ~ O C E O G U~ s sue'. ~ O G 1 i a •~ 6l = A L L+ 3 ~ ~ ~ i a ~ F W ~ o~ c c -- M C c ~ ~ C V1 ~ h r ~ ~ r r ~ V1 N v3 M i i i i i r M e4 i i i i ~ i ~ v3 oC ~ C r ~ h C N h oC C ~ h N C C ~ C ~ C ~ ~ ~ N I N e4 r Irl v3 v3 v3 ~ ~n c ~n N c ~n ~c c ~ ~i c V e4 C N N ° N c N ~N ~ M ~ N ~N ~ ~ ~ ~ ~ ~ C -- ~ V1 C h C oC r ~ N ~ ~ M M ~o c~ ~ ~ r ~ ~ ~ ~ r ~ ~ ~ ~ r ~ ~ r M ~ h e4 r r r ~ ~ M M r r ~ r r r '~' ~ I~ ~ ~ ~~~~~~ v3 c r r ~ ~ O .~ n v3 e4 C N v3 W ~ ~ ~ a ~ ~ b w ~ ~ .ti ~ -c ° -o ~ s: ~^ ~~ o°u w o U Z ~~ ~ a W °o. ~~ b A ~ ~ ? ~ ~ ~ ~ ~ ~ ~ cu a Z o ~ ~ .d ~ ~ [~ ~l ~ ~ 0 0 v ~ ~ W W cu ~ ~ ~ ~ "~ ,d ~ ~' r j ~e u o ~ ~ ~ ~ ~ ~ u ~ ~ q ~ G'". 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Delray Beach Municipal Colf Course Fund -This fund is used to account for the services and activities of the City's municipal golf course. Lakeview Colf Course Fund -This fund is used to account for the services and activities of the City's executive municipal golf course. City Marina Fund -This fund is used to account for the services and activities of the City's municipal marina. Sanitation Fund -This fund is used to account for solid waste removal services for the City's residents and commercial customers. Storrrcwater Utility Fund -This fund is used to account for the levy of drainage assessments and construction of drainage projects. 67 CITY OF DELRAY BEACH, FLORIDA COMBINING STATEMENT OF NET ASSETS NON-MAJOR ENTERPRISE FUNDS September 30, 2007 Total Municipal Lakeview Non-Major Golf Golf City Stormwater Enterprise Course Conrse Marina Sanitation Utility Funds ASSETS Cnrrent Assets: Cash and cash equivalents $ 41,889 $ 5,564 $ - $ - $ 1,000,254 $ 1,047,707 Accounts receivable, net 3,657 62 - 280,500 60,000 344,219 Due fiom other funds - - 558,078 702,292 26,916 1,287,286 Inventory 79,918 7,405 - - - 87,323 Prepaid expenses 80,686 23,020 - - - 103,706 Restricted assets Cash and cash equivalents 374,838 232,029 - - 1,000,801 1,607,668 Total Current Assets 580,988 268,080 558,078 982,792 2,087,971 4,477,909 Noncnrrent Assets: Property, land and equipment Land 1,415,483 1,963,894 42,840 - 1,271,853 4,694,070 Buildings 2,324,664 140,718 - - 1,904,722 4,370,104 Improvements other than buildings 1,271,620 730,895 1,137,419 11,958 10,605,569 13,757,461 Equipment 1,523,873 391,606 32,746 24,711 642,813 2,615,749 Construction in progress - - 7,500 - 525,206 532,706 Accumulated depreciation (2,371,377) (498,705) (766,405) (31,710) (3,757,362) (7,425,559) Other asset Bond issue costs, net 47,335 28,986 76,321 Total Noncurrent Assets 4,211,598 2,757,394 454,100 4,959 11,192,801 18,620,852 Total Assets 4,792,586 3,025,474 1,012,178 987,751 13,280,772 23,098,761 LIABILITIES Cnrrent Liabilities: Accounts payable and accrued expenses 78,644 8,074 7,446 194,221 12,127 300,512 Unearned revenue - - 11,518 - - 11,518 Current mahuities of installment agreements 32,016 29,627 - - - 61,643 Compensated absences payable - - - 155 155 Due to other funds 879,607 293,380 - - - 1,172,987 Refundable deposits 78,510 - 10,322 - - 88,832 1,068,777 331,081 29,286 194,221 12,282 1,635,647 Cnrrent Liabilities Payable from Restricted Assets: Contract payable and retainages - - - - 84,613 84,613 Accrued interest on long-team debt 19,558 8,997 - - 8,321 36,876 Current mahuities of revenue bonds 355,280 223,032 - - 28,870 607,182 374,838 232,029 - - 121,804 728,671 Total Current Liabilities 1,443,615 563,110 29,286 194,221 134,086 2,364,318 Noncnrrent Liabilities: Long-term portion of compensated absences payable - - - 16,825 23,256 40,081 Revenue bonds payable, net 2,664,444 1,365,057 - - 1,447,083 5,476,584 Installment agreements 73,632 38,568 - - - 112,200 Total Noncurrent Liabilities 2,738,076 1,403,625 16,825 1,470,339 5,628,865 Total Liabilities 4,181,691 1,966,735 29,286 211,046 1,604,425 7,993,183 NET ASSETS Invested in capital assets, net of related debt 1,038,891 1,140,319 454,100 4,959 8,744,917 11,383,186 Restricted for: Debt service - - - - 878,997 878,997 Unrestricted (427,996) (81,580) 528,792 771,746 2,052,433 2,843,395 Total Net Assets $ 610,895 $ 1,058,739 $ 982,892 $ 776,705 $ 11,676,347 $ 15,105,578 68 CITY OF DELRAY BEACH, FLORIDA COMBINING STATEMENT OF REVENUES, EXPENSES AND CHANGES IN NET ASSETS NON-MAJOR ENTERPRISE FUNDS For the Fiscal Year Ended September 30, 2007 OPERATING REVENUES Charges for services Other operating revenue Total Operating Revenues Total Municipal Lakeview Non-Major Golf Golf City Stormwater Enterprise Course Conrse Marina Sanitation Utility Funds $ 3,467,778 $ 853,654 $ 160,605 $ 3,094,658 $ 2,097,527 $ 9,674,222 167,596 6,171 423 - 362,325 536,515 3,635,374 859,825 161,028 3,094,658 2,459,852 10,210,737 OPERATING EXPENSES Personal services - - - 211,267 343,120 554,387 Other operating expenses 3,079,116 602,458 48,381 2,670,681 537,545 6,938,181 Depreciation 210,079 102,249 71,765 2,015 378,922 765,030 Total Operating Expenses 3,289,195 704,707 120,146 2,883,963 1,259,587 8,257,598 Operating Income 346,179 155,118 40,882 210,695 1,200,265 1,953,139 NONOPERATING REVENUES (EXPENSES) Interest revenue - 2,402 8,924 10,222 82,181 103,729 Rent revenue 15,200 - 68 115,040 - 130,308 Interest expense (94,241) (43,422) - - (57,611) (195,274) Loss on disposal of equipment (57,181) (420) - - - (57,601) Total Nonoperating Revenues (Expenses) (136,222) (41,440) 8,992 125,262 24,570 (18,838) Income Before Transfers 209,957 113,678 49,874 335,957 1,224,835 1,934,301 Transfers in - - - - 45,000 45,000 Transfers out (34,500) (22,500) (48,400) (176,180) (1,096,000) (1,377,580) Change In Net Assets 175,457 91,178 1,474 159,777 173,835 601,721 Net Assets -October 1, 2006 435,438 967,561 981,418 616,928 11,502,512 14,503,857 Net Assets -September 30, 2007 $ 610,895 $ 1,058,739 $ 982,892 $ 776,705 $ 11,676,347 $ 15,105,578 69 CITY OF DELRAY BEACH, FLORIDA COMBINING STATEMENT OF CASH FLOWS NON-MAJOR ENTERPRISE FUNDS For the Fiscal Year Ended September 30, 2007 Total Municipal Lakeview Non-Major Golf Golf City Stormwater Enterprise Course Course Marina Sanitation Utility Funds CASH FLOWS FROM OPERATING ACTIVITIES Receipts from customers and users $ 3,658,069 $ 858,948 $ 159,750 $ 3,035,039 $ 3,728,112 $ 11,439,918 Receipts from others 15,200 - 68 115,040 - 130,308 Payments to suppliers (2,932,358) (551,823) (120,342) (2,773,882) (594,955) (6,973,360) Payments to employees - - - (209,047) (342,037) (551,084) Net cash provided by operating activities 740,911 307,125 39,476 167,150 2,791,120 4,045,782 CASH FLOWS FROM NONCAPITAL FINANCING ACTIVITY Transfers from other funds - - - - 45,000 45,000 Transfers to other funds (34,500) (22,500) (48,400) (176,180) (1,096,000) (1,377,580) Net cash used in noncapital financing activity (34,500) (22,500) (48,400) (176,180) (1,051,000) (1,332,580) CASH FLOWS FROM CAPITAL AND RELATED FINANCING ACTIVITIES Acquisition and construction of capital assets (234,501) - - (1,192) (1,681,545) (1,917,238) Bond proceeds - - - - 1,000,000 1,000,000 Principal paid on capital debt (372,790) (244,210) - - (27,122) (644,122) Interest paid on capital debt (73,953) (37,258) - - (58,085) (169,296) Net cash used in capital and related financing activities (681,244) (281,468) - (1,192) (766,752) (1,730,656) CASH FLOWS FROM INVESTING ACTIVITY Interest and dividends received Net cash provided by investing activity Net change in cash and cash equivalents Cash and cash equivalents -October 1, 2006 Cash and cash equivalents -September 30, 2007 Reconciliation of operating income to net cash provided by operating activities: Operating income Adjustments to reconcile operating income to net cash provided by operating activities: Depreciation expense Miscellaneous revenue Change in assets and liabilities: Accounts receivable Due from other funds Inventory Prepaid expenses Accounts payable and accrued expenses Unearned revenue Compensated absences payable Due to other funds Refundable deposits Total adjustments Net cash provided by operating activities Non-cash capital and related financing activities Amortization of bond premiums Amortization of debt issue costs Amortization of deferred loss on refundings Installment agreement debt issued - 2,402 8,924 10,222 82,181 103,729 - 2,402 8,924 10,222 82,181 103,729 25,167 5,559 - - 1,055,549 1,086,275 391,560 232,034 - - 945,506 1,569,100 $ 416,727 $ 237,593 $ - $ - $ 2,001,055 $ 2,655,375 $ 346,179 $ 155,118 $ 40,882 $ 210,695 $ 1,200,265 $ 1,953,139 210,079 102,249 71,765 2,015 378,922 765,030 15,200 - 68 115,040 - 130,308 14,996 (62) - (59,619) (36,955) (81,640) - - - (275,223) - (275,223) (657) (1,549) - - - (2,206) 112 974 - - - 1,086 23,337 218 7,253 172,022 (57,410) 145,420 - - (1,559) - - (1,559) - - - 2,220 1,083 3,303 123,966 50,992 (79,214) - 1,305,215 1,400,959 7,699 (815) 281 7,165 394,732 152,007 (1,406) (43,545) 1,590,855 2,092,643 $ 740,911 $ 307,125 $ 39,476 $ 167,150 $ 2,791,120 $ 4,045,782 $ (6,099) $ (3,735) $ $ $ $ (9,834) $ 5,410 $ 3,313 $ - $ - $ - $ 8,723 $ 24,849 $ 9,000 $ - $ - $ - $ 33,849 $ 131,420 $ - $ - $ - $ - $ 131,420 70 Internal Service Funds Internal Service Funds are used to account for the financing of goods or services provided by one department or agency to other departments or agencies of the City, or to other governmental units, on a cost reimbursement basis. Insurance Fund -This fund is used to account for the payment of insurance claims against the City for certain self-insured coverages and for the payment of health insurance premiums. In addition, expenses related to reinsurance and claims administration are paid from this fund. Central Carage Fund- This fund is used to account for the central garage operation of the City. 71 CITY OF DELRAY BEACH, FLORIDA COMBINING STATEMENT OF NET ASSETS INTERNAL SERVICE FUNDS September 30, 2007 ASSETS Current Assets: Cash and cash equivalents Accounts receivable, net Due from other funds Inventory Prepaid expenses Total Current Assets Noncurrent Assets: Property, land and equipment Buildings Equipment Accumulated depreciation Total Noncurrent Assets Total Assets LIABILITIES Current Liabilities: Accounts payable and accrued expenses Compensated absences payable Insurance claims payable Total Current Liabilities Noncurrent Liabilities: Long-term portion of compensated absences payable Long-term portion of insurance claims payable Total Noncurrent Liabilities Total Liabilities NET ASSETS Invested in capital assets, net of related debt Unrestricted Total Net Assets Total Central Internal Insurance Garage Service Funds $ 5,219,588 $ 100 $ 5,219,688 225,534 - 225,534 2,296,970 619,444 2,916,414 - 53,536 53,536 1,103,158 - 1,103,158 8,845,250 673,080 9,518,330 - 909 909 23,898 16,257,785 16,281,683 (17,270) (8,987,876) (9,005,146) 6,628 7,270,818 7,277,446 8,851,878 7,943,898 16,795,776 957,169 46,287 1,003,456 1,737 13,628 15,365 1,821,493 - 1,821,493 2,780,399 59,915 2,840,314 31,049 30,927 61,976 3,397,216 - 3,397,216 3,428,265 30,927 3,459,192 6,208,664 90,842 6,299,506 6,628 7,270,818 7,277,446 2,636,586 582,238 3,218,824 $ 2,643,214 $ 7,853,056 $ 10,496,270 72 CITY OF DELRAY BEACH, FLORIDA COMBINING STATEMENT OF REVENUES, EXPENSES AND CHANGES IN NET ASSETS INTERNAL SERVICE FUNDS For the Fiscal Year Ended September 30, 2007 OPERATING REVENUES Charges for services Other operating revenue Total Operating Revenues OPERATING EXPENSES Personal services Other operating expenses Depreciation Total Operating Expenses Operating Income (Loss) NONOPERATING REVENUES (EXPENSES) Interestrevenue Insurance recoveries Loss on disposal of equipment Total Nonoperating Revenues (Expenses) Income (Loss) Before Capital Contributions and Transfers Capital contributions Transfers in Transfers out Change In Net Assets Net Assets -October 1, 2006 Net Assets -September 30, 2007 Total Central Internal Insurance Garage Service Funds $ 12,708,749 $ 2,674,638 $ 15,383,387 231,825 1,630,086 1,861,911 12,940,574 4,304,724 17,245,298 298,102 752,588 1,050,690 14,168,290 1,997,684 16,165,974 1,512 1,407,667 1,409,179 14,467,904 4,157,939 18,625,843 (1,527,330) 146,785 (1,380,545) 341,034 6,417 347,451 - 67,784 67,784 - (184,721) (184,721) 341,034 (110,520) 230,514 (1,186,296) 36,265 (1,150,031) - 535,048 535,048 - 208,340 208,340 (2,196,426) - (2,196,426) (3,382,722) 779,653 (2,603,069) 6,025,936 7,073,403 13,099,339 $ 2,643,214 $ 7,853,056 $ 10,496,270 73 CITY OF DELRAY BEACH, FLORIDA COMBINING STATEMENT OF CASH FLOWS INTERNAL SERVICE FUNDS For the Fiscal Year Ended September 30, 2007 CASH FLOWS FROM OPERATING ACTIVITIES Receipts from customers and users Receipts from others Payments to suppliers Payments to employees Net cash provided by operating activities CASH FLOWS FROM NONCAPITAL FINANCING ACTIVITIES Transfers from other funds Transfers to other funds Net cash provided by (used in) noncapital financing activities CASH FLOWS FROM CAPITAL AND RELATED FINANCING ACTIVITIES Acquisition and construction of capital assets Proceeds from the sale of capital assets Capital contributions Net cash used by capital and related financing activities CASH FLOWS FROM INVESTING ACTIVITY Interestreceived Net cash provided by investing activity Net change in cash and cash equivalents Cash and cash equivalents -October 1, 2006 Cash and cash equivalents -September 30, 2007 Reconciliation of operating income (loss) to net cash provided by operating activities: Operating income (loss) Adjustments to reconcile operating income (loss) to net cash provided by operating activities: Depreciation expense Miscellaneous revenue Change in assets and liabilities: Accounts receivable Inventory Prepaid expenses Accounts payable and accrued expenses Due to other funds Compensated absences payable Insurance claims payable Total adjustments Net cash provided by operating activities Total Central Internal Insurance Garage Service Funds $ 16,444,328 $ 3,830,690 $ 20,275,018 - 67,784 67,784 (14,021,769) (2,018,193) (16,039,962) (297,483) (744,862) (1,042,345) 2,125,076 1,135,419 3,260,495 - 208,340 208,340 (2,196,426) - (2,196,426) (2,196,426) 208,340 (1,988,086) (3,714) (1,895,224) (1,898,938) - 10,000 10,000 - 535,048 535,048 (3,714) (1,350,176) (1,353,890) 341,034 6,417 347,451 341,034 6,417 347,451 265,970 - 265,970 4,953,618 100 4,953,718 $ 5,219,588 $ 100 $ 5,219,688 $ (1,527,330) $ 146,785 $ (1,380,545) 1,512 1,407,667 1,409,179 - 67,784 67,784 131,550 - 131,550 - (23,909) (23,909) (1,100,229) 260 (1,099,969) (29,331) 3,140 (26,191) 3,372,204 (474,034) 2,898,170 619 7,726 8,345 1,276,081 - 1,276,081 3,652,406 988,634 4,641,040 $ 2,125,076 $ 1,135,419 $ 3,260,495 74 Fiduciary Funds Fiduciary Funds are used to account for assets held in trust or as an agent by the City for others and includes pension trust funds. General Employees' Pension Fund -This fund is used to account for assets held in a trustee capacity for the retirement pensions of all permanent, full-time City employees except those covered by the Police and Firefighters' Retirement System Fund. Police and Firefighters' Retirement System Fund -This fund is used to account for assets held in a trustee capacity for the retirement pensions of all noncivilian police and fire department employees. 75 CITY OF DELRAY BEACH, FLORIDA COMBINING STATEMENT OF PLAN NET ASSETS PENSION TRUST FUNDS September 30, 2007 ASSETS Cash and cash equivalents Investments: Bonds and other interest bearing investments Equity securities Mutual funds Other Due from broker for securities sold Employee contributions receivable Due from other governments Prepaid expenses Interest and dividends receivable Total Assets LIABILITIES Accounts payable Due to broker for securities purchased State monies held in reserve Deferred retirement option plan payable Total Liabilities NET ASSETS Held in trust for pension benefits Police and General Firefighters' Total Employees' Retirement Pension Trust Pension System Funds $ - $ 500 $ 500 688,741 47,827,903 48,516,644 20,553,127 70,112,189 90,665,316 59,125,773 6,873,901 65,999,674 2,162,791 2,162,791 - 612,931 612,931 - 41,634 41,634 - 432,524 432,524 400 162,676 163,076 54,943 431,413 486,356 80,422,984 128,658,462 209,081,446 20,483 74,813 95,296 - 736,558 736,558 - 1,066,447 1,066,447 - 7,188,343 7,188,343 20,483 9,066,161 9,086,644 $ 80,402,501 $ 119,592,301 $ 199,994,802 76 CITY OF DELRAY BEACH, FLORIDA COMBINING STATEMENT OF CHANGES IN PLAN NET ASSETS PENSION TRUST FUNDS For the Fiscal Year Ended September 30, 2007 ADDITIONS Contributions Employer State Plan members Total contributions Investment earnings Net appreciation in fair value of investments Interest and dividends Less investment expenses -custodian fees Net investment gain Other income Total additions DEDUCTIONS Benefits Refunds of contributions Other operating expenses Total deductions Change In Net Assets Net Assets -October 1, 2006 as originally reported Prior period adjustment Net Assets -October 1, 2006 as restated Net Assets -September 30, 2007 Police and General Firefighters' Total Employees' Retirement Pension Trust Pension System Funds $ 2,008,058 $ 5,174,531 $ 7,182,589 - 1,560,549 1,560,549 728,325 1,048,604 1,776,929 2,736,383 7,783,684 10,520,067 6,729,155 11,060,391 17,789,546 1,876,619 3,178,879 5,055,498 8,605,774 14,239,270 22,845,044 252,219 585,500 837,719 8,353,555 13,653,770 22,007,325 - 49,475 49,475 11,089,938 21,486,929 32,576,867 2,411,389 6,460,910 8,872,299 51,081 30,565 81,646 13,606 183,845 197,451 2,476,076 6,675,320 9,151,396 8,613,862 14,811,609 23,425,471 71,788,639 105,623,057 177,411,696 - (842,365) (842,365) 71,788,639 104,780,692 176,569,331 $ 80,402,501 $ 119,592,301 $ 199,994,802 77 Other Supplementary Information City of Delray Beach, Florida Schedules of Revenue and Other Financing Sources- Budget and Actual-General Fund Fiscal Year Ended September 30, 2007 Fiscal Year Ended September 30, 200fi Variance Positive Variance Positive Final Budget Actual (Negative) Final Budget Actual (Negative) Revenue: TaXeS: Ad valorem $ 59,164,660 $ 59,091,002 $ (73,658) $ 49,868,000 $ 49,825,341 $ (42,659) Sales and use 1,500,000 1,438,613 (61,387) 1,500,000 1,488,936 (11,064) Franchise 5,558,250 5,257,560 (3pp,69p) 4,435,250 4,879,168 443,918 Utility 4,475,000 4,349,336 (125,6(y}) 4,370,000 4,372,775 2,775 Communications Services Tax 3,800,000 3,873,608 73,6pg 4,350,000 4,305,935 (g4,p65) Total taxes 74,497,910 74,010,119 (487,791) 64,523,250 64,872,155 348,905 Licenses and permits: Professional and occupational licenses 757,000 746,133 (]p,g67) 716,000 788,288 72,2gg Building permits 2,543,000 2,724,654 ]g1,654 2,583,000 2,620,140 37,140 Miscellaneous 849,900 852,137 2,237 972,400 1,305,560 333,160 License fee 2,160 2,155 (5) 2,050 2,052 2 Total licenses and permits 4,152,060 4,325,079 173,019 4,273,450 4,716,040 442,590 Intergovernmental: Federal shared revenue: State Homeland Security Crant 2,114 2,628 514 94,186 96,405 2,219 FEMA Mutual Aid 448,000 547,284 99,284 852,000 821,377 (30,623) Forestry Crant 127,003 105,532 (21,471) 172,209 45,206 (127,003) Hazmat Sustainment - 22,486 22,486 - - - Emergency Relief Program 3,763 - (3,763) 46,062 46,062 - Highway Safety Fund Crant - - _ 42,771 42,771 Total federal shared revenue 580,880 677,930 97,050 1,207,228 1,051,821 (155,407) State shared revenue: State revenue sharing 2,125,000 1,979,086 (145,914) 2,075,000 2,033,716 (41,284) Local government sales tax 5,000,000 4,735,171 (264,829) 4,950,000 5,076,180 126,180 Alcoholic beverage licenses tax 65,000 75,817 10,817 70,000 67,024 (2,976) Municipal fuel tax refund 44,000 46,278 2,278 35,000 48,151 13,151 Mobile home licenses tax 1,000 872 (12g) 1,000 946 (54) Fire incentive 41,040 42,144 1,104 41,520 40,718 (802) State grants 64,001 48,166 (15,835) 124,797 126,917 2,12 Total state shared revenue 7,340,041 6,927,534 (412,507) 7,297,317 7,393,652 96,335 Shared revenue from local units: Childreds Services Council grant 315,700 303,030 (12,670) 294,224 284,308 (9,916) Payments in lieu of taxes - - - 10,500 7,726 (2,774) County occupational licenses 128,000 139,633 11,633 128,000 141,355 13,355 MacArthur Foundation - - - 23,499 23,499 - Local Crants 14,000 19,954 5,954 9,000 7,500 (l,5pp) PBC Crants 35,000 35,000 - 135,430 55,430 (80,000) Total shared revenue from local units 492,700 497,617 4,917 600,653 519,818 (80,835) Total intergovernmental 8,413,621 8,103,081 (310,540) 9,105,198 8,965,291 (139,907) Continued on next page. 78 City of Delray Beach, Florida Schedules of Revenue and Other Financing Sources- Budget and Actual-General Fund (continued) Fiscal Year Ended September 30, 2007 Fiscal Year Ended September 30, 200fi Variance Positive Variance Positive Final Budget Actual (Negative) Final Budget Actual (Negative) Revenue (continued): Charges for services: General government $ 178,580 $ 196,206 $ 17,626 $ 267,790 $ 270,297 $ 2,507 Public safety 4,412,380 4,960,742 548,362 4,506,980 4,522,663 15,683 Physical environment 137,000 144,881 7,881 147,000 175,440 28,440 Parking 482,000 476,220 (5,780) 488,500 463,216 (25,284) Human services 200 - (200) 200 - (200) Culture and recreation 892,600 827,904 (64,696) 720,710 808,551 87,841 Total charges for services 6,102,760 6,605,953 503,193 6,131,180 6,240,167 108,987 Fines and forfeitures: Court 739,400 645,207 (94,193) 746,300 496,260 (250,040) Penalties on licenses and permits 155,500 100,411 (55,089) 59,000 40,228 (18,772) Violations of local ordinances 59,000 44,456 (14,544) 150,500 158,352 7,852 Total fines and forfeitures 953,900 790,074 (163,826) 955,800 694,840 (260,960) Miscellaneous: Interest 2,146,000 2,196,575 50,575 1,466,000 1,839,975 373,975 Rents and special assessments 76,590 139,982 63,392 76,590 323,782 247,192 Sale of capital assets 63,100 62,471 (629) 93,780 96,835 3,055 Contributions and donations 1,022,025 1,038,913 16,888 882,350 637,883 (244,467) Recovery of administrative costs 2,191,370 2,189,753 (1,617) 2,050,000 2,039,120 (10,880) Other 144,420 154,343 9,923 131,323 76,083 (55,240) Total miscellaneous 5,643,505 5,782,037 138,532 4,700,043 5,013,678 313,635 Total revenue 99,763,756 99,616,343 (147,413) 89,688,921 90,502,171 813,250 Other financing sources: Transfers in: Water and Sewer Fund 1,322,910 1,322,910 - 1,374,030 1,374,030 - Delray Beach Municipal Colf Course Fund 57,000 57,000 - 57,000 57,000 - City Marina Fund 48,400 48,400 - 44,000 44,000 - Utilities Tax Fund 1,167,150 1,173,101 5,951 1,079,000 1,089,109 10,109 Beautification Fund 212,410 212,410 - 212,410 212,410 - SanitationFund 85,180 85,180 - 72,250 72,250 - Stormwater Utility Fund 96,000 96,000 - 90,000 90,000 - Special Projects Fund 8,385 8,385 - - - - Ceneral Constmction Fund - 150,000 150,000 - - - Other transfers - - - 700,000 500,000 (200,000) Total other financing sources 2,997,435 3,153,386 155,951 3,628,690 3,438,799 (189,891) Total revenue and other financing sources $ 102,761,191 102,769,729 $ 8,538 $ 93,317,61] 93,940,970 $ 623,359 Reconciliation to CARP basis statements: On-behalf payments 1,784,631 1,463,228 Revenue and other financing sources - CAAP basis $ 104,554,360 $ 95,404,198 79 'O C.' w N ~ 'O C7 C•'i U ~ ~ .~ U ~ •~ ~ •~ o A •~ ~' ~ o ~. 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O ~ F~ w a~ F~ a ~ N [ N U a x a (~ O cG W Schedules of Debt Service Requirements City of Delray Beach, Florida Summary Schedule of Debt Service Requirements (Principal and Interest) to Maturity Fiscal Year Ending General Water and Sewer Installment Total September 30 Obligation Bonds Revenue Bonds Revenue Bonds Agreements Requirements 2008 $ 3,588,403 $ 4,506,417 $ 5,474,596 $ 374,058 $ 13,943,474 2009 3,587,978 4,797,916 5,844,771 203,840 14,434,505 2010 3,576,615 3,401,384 5,830,675 56,762 12,865,436 2011 3,576,540 3,400,482 5,811,315 5,905 12,794,242 2012 3,573,840 3,401,036 5,934,853 - 12,909,729 2013 3,569,827 3,408,277 5,945,898 - 12,924,002 2014 2,168,937 3,341,602 5,955,037 - 11,465,576 2015 2,167,092 3,343,718 5,952,490 - 11,463,300 2016 2,171,935 3,342,026 2,074,922 - 7,588,883 2017 2,174,200 2,793,154 2,081,452 - 7,048,806 2018 2,179,513 2,793,728 2,089,653 - 7,062,894 2019 2,176,519 2,801,632 2,109,099 - 7,087,250 2020 2,184,761 2,591,500 2,109,793 - 6,886,054 2021 2,188,864 2,587,750 2,111,954 - 6,888,568 2022 2,188,760 2,590,750 2,139,812 - 6,919,322 2023 2,194,413 2,590,000 - - 4,784,413 2024 2,205,589 2,590,500 - - 4,796,089 2025 - 2,592,000 - - 2,592,000 2026 - 2,589,250 - - 2,589,250 2027 - 2,592,250 - - 2,592,250 2028 - 2,590,500 - - 2,590,500 2029 - 2,589,000 - - 2,589,000 2030 - 2,587,500 - - 2,587,500 2031 - 2,590,750 - - 2,590,750 2032 - 2,588,250 - - 2,588,250 $ 45,473,786 $ 75,001,372 $ 61,466,320 $ 640,565 $ 182,582,043 82 City of Delray Beach, Florida Combined Schedule of General Obligation Bond Debt Service Requirements Balance Fiscal Year Ending Outstanding at September 30 Principal Interest Total End of Fiscal Year 2008 $ 2,220,000 $ 1,368,403 $ 3,588,403 $ 41,885,383 2009 2,295,000 1,292,978 3,587,978 38,297,405 2010 2,375,000 1,201,615 3,576,615 34,720,790 2011 2,485,000 1,091,540 3,576,540 31,144,250 2012 2,600,000 973,840 3,573,840 27,570,410 2013 2,720,000 849,827 3,569,827 24,000,583 2014 1,410,000 758,937 2,168,937 21,831,646 2015 1,465,000 702,092 2,167,092 19,664,554 2016 1,530,000 641,935 2,171,935 17,492,619 2017 1,595,000 579,200 2,174,200 15,318,419 2018 1,665,000 514,513 2,179,513 13,138,906 2019 1,730,000 446,519 2,176,519 10,962,387 2020 1,810,000 374,761 2,184,761 8,777,626 2021 1,890,000 298,864 2,188,864 6,588,762 2022 1,970,000 218,760 2,188,760 4,400,002 2023 2,060,000 134,413 2,194,413 2,205,589 2024 2,160,000 45,589 2,205,589 - $ 33,980,000 $ 11,493,786 $ 45,473,786 83 City of Delray Beach, Florida Schedule of General Obligation Bonds (Series 2002) Balance Outstanding at Fiscal Year Ending Principal Interest End of Fiscal Interest September 30 February 1 February 1 August 1 Total Year Rate 2008 $ 1,655,000 $ 250,350 $ 221,388 $ 2,126,738 $ 2009 1,715,000 221,388 191,375 2,127,763 2010 1,775,000 191,375 147,000 2,113,375 2011 1,865,000 147,000 100,375 2,112,375 2012 1,960,000 100,375 51,375 2,111,750 2013 2,055,000 51,375 - 2,106,375 $ 11,025,000 $ 961,863 $ 711,513 $ 12,698,376 Original Authorization - $18,000,000 Issued - $15,685,000 Date of Issue -December 13, 2002 Maturity Range -Serially February 1, 2004 through February 1, 2013 Principal Payment Date -February 1 of each year Interest Payment Dates -February 1 and August 1 Denomination - $5,000 Call Features - No optional or mandatory redemption Paying Agent/Registrar -Wells Fargo Coral Springs, Florida Ratings - Moody's Aaa (FSA insured) Standard & Poor's AAA (FSA insured) 10,571,638 3.50% 8,443,875 3.50 6,330,500 5.00 4,218,125 5.00 2,106,375 5.00 - 5.00 Projects: The bonds were issued for financing the cost of partially refunding the General Obligation Bonds (Series 1993A & 1993B). 84 City of Delray Beach, Florida Schedule of General Obligation Bonds (Series 2004) Balance Outstanding at Fiscal Year Ending Principal Interest End of Fiscal Interest September 30 February 1 February 1 August 1 Total Year Rate 2008 $ 565,000 $ 245,070 $ 236,595 $ 1,046,665 $ 16,767,831 3.00% 2009 580,000 236,595 228,620 1,045,215 15,722,616 2.75 2010 600,000 228,620 219,620 1,048,240 14,674,376 3.00 2011 620,000 219,620 209,545 1,049,165 13,625,211 3.25 2012 640,000 209,545 197,545 1,047,090 12,578,121 3.75 2013 665,000 197,545 185,907 1,048,452 11,529,669 3.50 2014 690,000 185,907 172,970 1,048,877 10,480,792 3.75 2015 715,000 172,970 159,564 1,047,534 9,433,258 3.75 2016 745,000 159,564 144,664 1,049,228 8,384,030 4.00 2017 775,000 144,664 130,133 1,049,797 7,334,233 3.75 2018 805,000 130,133 114,837 1,049,970 6,284,263 3.80 2019 835,000 114,837 98,555 1,048,392 5,235,871 3.90 2020 870,000 98,555 81,155 1,049,710 4,186,161 4.00 2021 905,000 81,155 62,602 1,048,757 3,137,404 4.10 2022 940,000 62,602 42,863 1,045,465 2,091,939 4.20 2023 980,000 42,863 22,038 1,044,901 1,047,038 4.25 2024 1,025,000 22,038 - 1,047,038 - 4.30 $ 12,955,000 $ 2,552,283 $ 2,307,213 $ 17,814,496 Original Authorization - $24,000,000 Issued - $14,000,000 Date of Issue -September 30, 2004 Maturity Range -Serially February 1, 2005 through February 1, 2024 Principal Payment Date -February 1 of each year Interest Payment Dates -February 1 and August 1 Denomination - $5,000 Call Features - No optional or mandatory redemption Paying Agent/Registrar -Wells Fargo Coral Springs, Florida Ratings - Moody's Aaa (FSA insured) Standard & Poor's AAA (FSA insured) Projects: The bonds were issued for the purpose of acquiring land and constructing and developing parks and recreation facilities in the City. 85 City of Delray Beach, Florida Schedule of General Obligation Bonds (Series 2005) Balance Outstanding at Fiscal Year Ending Principal Interest End of Fiscal Interest September 30 February 1 February 1 August 1 Total Year Rate 2008 $ - $ 207,500 $ 207,500 $ 415,000 $ 14,545,914 4.15% 2009 - 207,500 207,500 415,000 14,130,914 4.15 2010 - 207,500 207,500 415,000 13,715,914 4.15 2011 - 207,500 207,500 415,000 13,300,914 4.15 2012 - 207,500 207,500 415,000 12,885,914 4.15 2013 - 207,500 207,500 415,000 12,470,914 4.15 2014 720,000 207,500 192,560 1,120,060 11,350,854 4.15 2015 750,000 192,560 176,998 1,119,558 10,231,296 4.15 2016 785,000 176,998 160,709 1,122,707 9,108,589 4.15 2017 820,000 160,709 143,694 1,124,403 7,984,186 4.15 2018 860,000 143,694 125,849 1,129,543 6,854,643 4.15 2019 895,000 125,849 107,278 1,128,127 5,726,516 4.15 2020 940,000 107,278 87,773 1,135,051 4,591,465 4.15 2021 985,000 87,773 67,334 1,140,107 3,451,358 4.15 2022 1,030,000 67,334 45,961 1,143,295 2,308,063 4.15 2023 1,080,000 45,961 23,551 1,149,512 1,158,551 4.15 2024 1,135,000 23,551 - 1,158,551 - 4.15 $ 10,000,000 $ 2,584,207 $ 2,376,707 $ 14,960,914 Original Authorization - $24,000,000 Issued - $10,000,000 Date of Issue -August 26, 2005 Maturity Range -Serially February 1, 2014 through February 1, 2024 Principal Payment Date -February 1 of each year Interest Payment Dates -February 1 and August 1 Denomination - $5,000 Call Features -Penalty with early prepayment Paying Agent - SunTrust Bank, NA Ratings - N/A Projects: The bonds were issued for the purpose of acquiring land and constructing and developing parks and recreation facilities in the City. 86 City of Delray Beach, Florida Combined Schedule of Revenue Bond Debt Service Requirements (Principal and Interest) Balance Outstanding at Fiscal Year Ending September 30 Principal Interest Total End of Fiscal Year 2008 $ 2,700,000 $ 1,806,417 $ 4,506,417 $ 70,494,955 2009 2,795,000 2,002,916 4,797,916 65,697,039 2010 1,505,000 1,896,384 3,401,384 62,295,655 2011 1,565,000 1,835,482 3,400,482 58,895,173 2012 1,630,000 1,771,036 3,401,036 55,494,137 2013 1,705,000 1,703,277 3,408,277 52,085,860 2014 1,710,000 1,631,602 3,341,602 48,744,258 2015 1,785,000 1,558,718 3,343,718 45,400,540 2016 1,860,000 1,482,026 3,342,026 42,058,514 2017 1,390,000 1,403,154 2,793,154 39,265,360 2018 1,450,000 1,343,728 2,793,728 36,471,632 2019 1,520,000 1,281,632 2,801,632 33,670,000 2020 1,375,000 1,216,500 2,591,500 31,078,500 2021 1,440,000 1,147,750 2,587,750 28,490,750 2022 1,515,000 1,075,750 2,590,750 25,900,000 2023 1,590,000 1,000,000 2,590,000 23,310,000 2024 1,670,000 920,500 2,590,500 20,719,500 2025 1,755,000 837,000 2,592,000 18,127,500 2026 1,840,000 749,250 2,589,250 15,538,250 2027 1,935,000 657,250 2,592,250 12,946,000 2028 2,030,000 560,500 2,590,500 10,355,500 2029 2,130,000 459,000 2,589,000 7,766,500 2030 2,235,000 352,500 2,587,500 5,179,000 2031 2,350,000 240,750 2,590,750 2,588,250 2032 2,465,000 123,250 2,588,250 - $ 45,945,000 $ 29,056,372 $ 75,001,372 87 City of Delray Beach, Florida Schedule of Revenue Bonds (Series 2000) Balance Serial Bond Outstanding at Fiscal Year Ending Principal Interest End of Fiscal Interest September 30 June 1 December 1 June 1 Total Year Rate 2008 $ 390,000 $ 159,055 $ 159,054 $ 708,109 $ 7,554,283 5.245% 2009 415,000 148,827 148,827 712,654 6,841,629 5.245 2010 435,000 137,943 137,943 710,886 6,130,743 5.245 2011 465,000 126,536 126,536 718,072 5,412,671 5.245 2012 495,000 114,341 114,341 723,682 4,688,989 5.245 2013 520,000 101,360 101,359 722,719 3,966,270 5.245 2014 545,000 87,723 87,723 720,446 3,245,824 5.245 2015 580,000 73,430 73,430 726,860 2,518,964 5.245 2016 510,000 58,219 58,219 626,438 1,892,526 5.245 2017 540,000 44,845 44,845 629,690 1,262,836 5.245 2018 570,000 30,683 30,683 631,366 631,470 5.245 2019 600,000 15,735 15,735 631,470 - 5.245 $ 6,065,000 $ 1,098,697 $ 1,098,695 $ 8,262,392 Original Authorization - $10,000,000 Issued - $10,000,000 Date of Issue -February 25, 2000 Maturity Range -Serial Bonds: June 1, 1999 through June 1, 2019 Principal Payment Date -June 1 of each year Interest Payment Dates -June 1 and December 1 of each year Denomination - N/A Call Features -Penalty for early payment Paying Agent -Bank of America Ratings - N/A Projects: The bonds were issued to finance all or a portion of the costs of certain roadway improvements including water, sewer and drainage work, and a portion of the costs of a tri-party radio system. Approximately 74% of the bonds are governmental activities debt and 26% is business-type activities debt. 88 City of Delray Beach, Florida Schedule of Utility Tax Revenue Bonds (Series 2002) Fiscal Year Ending September 30 Serial Bond Principal Interest June 1 December 1 June 1 otal Balance Outstanding at End of Fiscal Year Interest Rate 2008 $ 2,035,000 $ 123,143 $ 123,143 $ 2,281,286 $ 5,379,056 3.50% 2009 1,460,000 87,530 87,530 1,635,060 3,743,996 3.50 2010 450,000 61,980 61,980 573,960 3,170,036 3.40 2011 470,000 54,330 54,330 578,660 2,591,376 3.60 2012 485,000 45,870 45,870 576,740 2,014,636 3.70 2013 510,000 36,898 36,898 583,796 1,430,840 3.85 2014 420,000 27,080 27,080 474,160 956,680 4.00 2015 440,000 18,680 18,680 477,360 479,320 4.10 2016 460,000 9,660 9,660 479,320 - 4.20 $ 6,730,000 $ 465,171 $ 465,171 $ 7,660,342 Original Authorization - $16,500,000 Issued - $15,020,000 Serial Bonds Date of Issue -December 19, 2002 Maturity Range -Serial Bonds: June 1, 2003 through June 1, 2016 Principal Payment Date -June 1 of each year Interest Payment Dates -June 1 and December 1 of each year for both serial and ter m bonds Denomination - $5,000 Call Features -Serial Bonds: June 1, 2003 through May 31, 2014 -- No redemption June 1, 2014 through May 31, 2016 at 100% Paying Agent/Registrar -Wells Fargo, Coral Springs, Florida Ratings - Moody's Aaa (FSA insured) Standard & Poor's AAA (FSA insured) Projects: The bonds were issued to refund the City's outstanding Utility Tax Revenue Bonds, Series 1992, Series 1994, Seri es 1995, Series 1996, and Series 1998. Approximately 35% of the bonds are governmental activities debt and approximately 65% of the bonds are business-type act ivities debt. 89 City of Delray Beach, Florida Schedule of Revenue and Refunding Bonds (Series 2003) Balance Serial Bond Outstanding at Fiscal Year Ending Principal Interest End of Fiscal Interest September 30 June 1 December 1 June 1 Total Year Rate 2008 $ 275,000 $ 155,782 $ 155,782 $ 586,564 $ 10,133,716 3.66% 2009 920,000 150,751 150,751 1,221,502 8,912,214 3.66 2010 590,000 133,919 133,919 857,838 8,054,376 3.66 2011 605,000 123,125 123,125 851,250 7,203,126 3.66 2012 630,000 112,057 112,057 854,114 6,349,012 3.66 2013 655,000 100,531 100,531 856,062 5,492,950 3.66 2014 675,000 88,548 88,548 852,096 4,640,854 3.66 2015 695,000 76,199 76,199 847,398 3,793,456 3.66 2016 820,000 63,484 63,484 946,968 2,846,488 3.66 2017 850,000 48,482 48,482 946,964 1,899,524 3.66 2018 880,000 32,931 32,931 945,862 953,662 3.66 2019 920,000 16,831 16,831 953,662 - 3.66 $ 8,515,000 $ 1,102,640 $ 1,102,640 $ 10,720,280 Original Authorization - $9,685,000 Issued - $9,685,000 Serial Bonds Date of Issue -December 2, 2003 Maturity Range -Serial Bonds: June 1, 2003 through June 1, 2019 Principal Payment Date -June 1 of each year Interest Payment Dates -June 1 and December 1 of each year for both serial and term bonds Denomination - N/A Call Features -Penalty for early payment Paying Agent - SunTrust Bank Ratings - N/A Projects: The bonds were issued to current refund Series 1999 and Series 2002 Tax Exempt Bonds, in whole, and Series 2002 Taxable Bonds in part. Approximately 95% of the bonds are governmental activities debt and approximately 5% of the bonds are business-type activities debt. 90 City of Delray Beach, Florida Schedule of Revenue Bonds (Series 2005) (Tax Exempt Line of Credit) Balance Outstanding at Fiscal Year Ending Principal Interest End of Fiscal September 30 June 1 December 1 June 1 Total Year 2008 $ - $ 94,259 $ - $ 94,259 $ - Original Authorization - $8,000,000 Issued - $50,000 Date of Issue -August 26, 2005 Maturity -June 1, 2008 Principal Payment Date -Required upon maturity Interest Payment Dates -June 1 and December 1 of each year Denomination - N/A Call Features - No prepayment penalty Paying Agent - SunTrust Bank Ratings - N/A Interest -Variable rate based on 77% of 30-day LIBOR plus twenty-eight point five basis points (.285) (London Inter Bank Offered Rate) Projects: The bonds were issued to provide interim financing for all or a portion of the City's Old School Square Parking Garage Project, including land acquisition and construction costs as well as upfront the cost of the Mangrove (Intracoastal) Project, in part. (1) Estimated rate for the period. Interest Rate (1) 4.44% 91 City of Delray Beach, Florida Schedule of Utility Tax Revenue Bonds (Series 2007) Balance Serial Bond Outstanding at Fiscal Year Ending Principal Interest End of Fiscal Interest September 30 June 1 December 1 June 1 Total Year Rate 2008 $ - $ 221,849 $ 614,350 $ 836,199 $ 47,427,900 0.00% 2009 - 614,350 614,350 1,228,700 46,199,200 0.00 2010 30,000 614,350 614,350 1,258,700 44,940,500 4.00 2011 25,000 613,750 613,750 1,252,500 43,688,000 4.00 2012 20,000 613,250 613,250 1,246,500 42,441,500 4.00 2013 20,000 612,850 612,850 1,245,700 41,195,800 4.00 2014 70,000 612,450 612,450 1,294,900 39,900,900 4.00 2015 70,000 611,050 611,050 1,292,100 38,608,800 4.00 2016 70,000 609,650 609,650 1,289,300 37,319,500 4.00 2017 - 608,250 608,250 1,216,500 36,103,000 0.00 2018 - 608,250 608,250 1,216,500 34,886,500 0.00 2019 - 608,250 608,250 1,216,500 33,670,000 0.00 2020 1,375,000 608,250 608,250 2,591,500 31,078,500 5.00 2021 1,440,000 573,875 573,875 2,587,750 28,490,750 5.00 2022 1,515,000 537,875 537,875 2,590,750 25,900,000 5.00 2023 1,590,000 500,000 500,000 2,590,000 23,310,000 5.00 2024 1,670,000 460,250 460,250 2,590,500 20,719,500 5.00 2025 1,755,000 418,500 418,500 2,592,000 18,127,500 5.00 2026 1,840,000 374,625 374,625 2,589,250 15,538,250 5.00 2027 1,935,000 328,625 328,625 2,592,250 12,946,000 5.00 2028 2,030,000 280,250 280,250 2,590,500 10,355,500 5.00 2029 2,130,000 229,500 229,500 2,589,000 7,766,500 5.00 2030 2,235,000 176,250 176,250 2,587,500 5,179,000 5.00 2031 2,350,000 120,375 120,375 2,590,750 2,588,250 5.00 2032 2,465,000 61,625 61,625 2,588,250 - 5.00 $ 24,635,000 $ 11,618,299 $ 12,010,800 $ 48,264,099 Original Authorization - $27,000,000 Issued - $24,635,000 Serial Bonds Date of Issue -September 26, 2007 Maturity Range -Serial Bonds: June 1, 2010 through June 1, 2027; Term Bond: June 1, 2032 Principal Payment Date -June 1 of each year Interest Payment Dates -June 1 and December 1 of each year for both serial and term bonds Denomination - N/A Call Features -Penalty for early payment Paying Agent -Commerce Bank Ratings - S&P: AAA, Moody's Aaa Underlying Ratings - S&P: A, Moody's A2 Projects: The bonds were issued to finance various parks and recreation projects, Fire Station #4, Environmental Services Building (in part), and to refund the City's 2005 Line of Credit (which was used to fund the Old School Square Parking Garage Project). Approximately 96% of the bonds are governmental activities debt and approximately 4% of the bonds are business-type activities debt. 92 City of Delray Beach, Florida Combined Schedule of Water and Sewer Revenue Bonds Balance Fiscal Year Ending September Outstanding at 30 Principal Interest Total End of Fiscal Year 2008 $ 4,205,000 $ 1,269,596 $ 5,474,596 $ 55,991,724 2009 4,580,000 1,264,771 5,844,771 50,146,953 2010 4,620,446 1,210,229 5,830,675 44,316,278 2011 4,834,635 976,680 5,811,315 38,504,963 2012 2,365,737 3,569,116 5,934,853 32,570,110 2013 2,323,206 3,622,692 5,945,898 26,624,212 2014 2,271,725 3,683,312 5,955,037 20,669,175 2015 2,228,726 3,723,764 5,952,490 14,716,685 2016 1,565,000 509,922 2,074,922 12,641,763 2017 1,640,000 441,452 2,081,452 10,560,311 2018 1,720,000 369,653 2,089,653 8,470,658 2019 1,815,000 294,099 2,109,099 6,361,559 2020 1,895,000 214,793 2,109,793 4,251,766 2021 1,980,000 131,954 2,111,954 2,139,812 2022 2,095,000 44,812 2,139,812 - $ 40,139,475 $ 21,326,845 $ 61,466,320 93 City of Delray Beach, Florida Schedule of Water and Sewer Revenue Bonds (Series 1993) Balance Serial Bond Outstanding at Fiscal Year Ending Principal Interest End of Fiscal Interest September 30 October 1 October 1 April l Total Year Rate 2008 $ - $ - $ - $ - $ 18,430,000 5.40% 2009 - - - - 18,430,000 5.40 2010 105,446 159,554 - 265,000 18,165,000 5.75 2011 99,635 165,365 - 265,000 17,900,000 5.75 2012 1,575,737 2,899,263 - 4,475,000 13,425,000 5.80 2013 1,488,206 2,986,794 - 4,475,000 8,950,000 5.80 2014 1,391,725 3,083,275 - 4,475,000 4,475,000 5.85 2015 1,313,726 3,161,274 - 4,475,000 - 5.85 $ 5,974,475 $ 12,455,525 $ $ 18,430,000 Original Authorization - $28,104,475 Issued - $28,104,475 Date of Issue -June 1, 1993 Maturity Range -Capital Appreciation Bonds, Serially October 1, 1999 through October 1, 2014 Principal Payment Date -October 1 of each year Interest Payment Dates -October 1 and April 1 Denomination - $5,000 Call Features - No optional or mandatory redemption. Paying Agent/Registrar - Wachovia National Bank Jacksonville, Florida Ratings - Moody's Aaa (AMBAC insured) Standard and Poor's AAA (AMBAC insured) Projects: The bonds were issued for financing the cost of refunding a portion of the Water and Sewer Revenue Bonds (Series 1988) and (Series 1991), and to provide funds for the acquisition and construction of certain additions, extensions and improvements to the City's combined utility. 94 City of Delray Beach, Florida Schedule of Water and Sewer Revenue Bonds (Series 1997) Balance Serial Bond Outstanding at Fiscal Year Ending Principal Interest End of Fiscal Interest September 30 October 1 October 1 April l Total Year Rate 2008 $ 3,425,000 $ 369,948 $ 291,173 $ 4,086,121 $ 12,201,999 4.60% 2009 3,585,000 291,173 206,925 4,083,098 8,118,901 4.70 2010 3,750,000 206,925 108,488 4,065,413 4,053,488 5.25 2011 3,945,000 108,488 - 4,053,488 - 5.50 $ 14,705,000 $ 976,534 $ 606,586 $ 16,288,120 Original Authorization - $15,030,000 Issued - $15,030,000 Date of Issue -December 4, 1998 Maturity Range -Serially October 1, 2003 through October 1, 2010 Principal Payment Date -October 1 of each year beginning October 1, 2003 Interest Payment Dates -October 1 and April 1 Denomination - $5,000 Paying Agent/Registrar -The Bank of New York Jacksonville, Florida Call Features -Bonds are not subject to optional or mandatory redemption prior to their stated dates of maturity. Ratings - Moody's Aaa (AMBAC insured) Standard and Poor's AAA (AMBAC insured) Projects: The bonds were issued for financing the cost of refunding a portion of the Water and Sewer Revenue Bonds, Series 1991. 95 City of Delray Beach, Florida Schedule of Water and Sewer Revenue Bonds (Series 2003) Balance Serial Bond Outstanding at Fiscal Year Ending Principal Interest End of Fiscal Interest September 30 October 1 October 1 April l Total Year Rate 2008 $ 550,000 $ 11,800 $ 6,300 $ 568,100 $ 566,300 2.25% 2009 560,000 6,300 566,300 - $ 1,110,000 $ 18,100 $ 6,300 $ 1,134,400 Original Authorization - $13,500,000 Issued - $11,670,000 Date of Issue -July 9, 2003 Maturity Range -Serial Bonds: October 1, 2004 through October 1, 2008 Principal Payment Date -October 1 of each year Interest Payment Dates -October 1 and April 1 of each year Denomination - N/A Call Features -Not subject to redemption Paying Agent/Registrar -Wells Fargo Ratings - Moody's Aaa (Ambac insured) Standard & Poor's AAA (Ambac insured) Projects: The bonds were issued to finance the cost of refunding a portion of the 1993 Water and Sewer Bonds (Series 1993) and the 1999 Water and Sewer Bonds (Series 1999). 96 City of Delray Beach, Florida Schedule of Water and Sewer Revenue Bonds (Series 2006A) Balance Serial Bond Outstanding at Fiscal Year Ending Principal Interest End of Fiscal Interest September 30 October 1 October 1 April l Total Year Rate 2008 $ 110,000 $ 144,200 $ 141,934 $ 396,134 $ 9,113,358 4.12% 2009 120,000 141,934 139,462 401,396 8,711,962 4.12 2010 440,000 139,462 130,398 709,860 8,002,102 4.12 2011 460,000 130,398 120,922 711,320 7,290,782 4.12 2012 440,000 120,922 111,858 672,780 6,618,002 4.12 2013 460,000 111,858 102,382 674,240 5,943,762 4.12 2014 480,000 102,382 92,494 674,876 5,268,886 4.12 2015 500,000 92,494 82,194 674,688 4,594,198 4.12 2016 500,000 82,194 71,894 654,088 3,940,110 4.12 2017 520,000 71,894 61,182 653,076 3,287,034 4.12 2018 540,000 61,182 50,058 651,240 2,635,794 4.12 2019 570,000 50,058 38,316 658,374 1,977,420 4.12 2020 590,000 38,316 26,162 654,478 1,322,942 4.12 2021 620,000 26,162 13,390 659,552 663,390 4.12 2022 650,000 13,390 - 663,390 - 4.12 $ 7,000,000 $ 1,326,846 $ 1,182,646 $ 9,509,492 Original Authorization - $7,000,000 Issued - $7,000,000 Date of Issue -May 6, 2006 Maturity Range -Serial Bonds: October 1, 2007 through October 1, 2021 Principal Payment Date -October 1 of each year Interest Payment Dates -October 1 and April 1 of each year Denomination - N/A Call Features -Penalty for early payment Paying Agent -Branch Banking and Trust Company Ratings - N/A Projects: The bonds were issued to finance the total cost of a new Environmental Services Building and for funding the City's share of the back-up redundant Centrifuge Project, Sludge Pelletization Facility Project and the Reclaimed Water Treatment Project at the South Central Regional Wastewater Treatment Facility. 97 City of Delray Beach, Florida Schedule of Water and Sewer Revenue Bonds (Series 2006B) Fiscal Year Ending September 30 Serial Bond Principal Interest October 1 October 1 pril l otal Balance Outstanding at End of Fiscal Year Interest Rate 2008 $ 120,000 $ 46,765 $ 44,377 $ 211,142 $ 2,914,369 3.98% 2009 125,000 44,377 41,890 211,267 2,703,102 3.98 2010 125,000 41,890 39,402 206,292 2,496,810 3.98 2011 130,000 39,402 36,815 206,217 2,290,593 3.98 2012 130,000 36,815 34,228 201,043 2,089,550 3.98 2013 135,000 34,228 31,542 200,770 1,888,780 3.98 2014 140,000 31,542 28,756 200,298 1,688,482 3.98 2015 145,000 28,756 25,870 199,626 1,488,856 3.98 2016 165,000 25,870 22,587 213,457 1,275,399 3.98 2017 170,000 22,587 19,204 211,791 1,063,608 3.98 2018 180,000 19,204 15,622 214,826 848,782 3.98 2019 185,000 15,622 11,940 212,562 636,220 3.98 2020 195,000 11,940 8,060 215,000 421,220 3.98 2021 200,000 8,060 4,080 212,140 209,080 3.98 2022 205,000 4,080 - 209,080 - 3.98 $ 2,350,000 $ 411,138 $ 364,373 $ 3,125,511 Original Authorization - $2,350,000 Issued - $2,350,000 Date of Issue -November 17, 2006 Maturity Range -Serial Bonds: October 1, 2007 through October 1, 2021 Principal Payment Date -October 1 of each year Interest Payment Dates -October 1 and April 1 of each year Denomination - N/A Call Features -Penalty for early payment Paying Agent - SunTrust Bank Ratings - N/A Projects: The bonds were issued to finance the City's share of the Reclaimed Water Treatment Project at the South Central Regional Wastewater Treatment Faciltiy. 98 City of Delray Beach, Florida Schedule of Water and Sewer Revenue Bonds (Series 2007) Balance Serial Bond Outstanding at Fiscal Year Ending Principal Interest End of Fiscal Interest September 30 October 1 October 1 April l Total Year Rate 2008 $ - $ - $ 213,099 $ 213,099 $ 12,765,698 4.41% 2009 190,000 198,450 194,260 582,710 12,182,988 4.41 2010 200,000 194,260 189,850 584,110 11,598,878 4.41 2011 200,000 189,850 185,440 575,290 11,023,588 4.41 2012 220,000 185,440 180,590 586,030 10,437,558 4.41 2013 240,000 180,590 175,298 595,888 9,841,670 4.41 2014 260,000 175,298 169,565 604,863 9,236,807 4.41 2015 270,000 169,565 163,611 603,176 8,633,631 4.41 2016 900,000 163,611 143,766 1,207,377 7,426,254 4.41 2017 950,000 143,766 122,819 1,216,585 6,209,669 4.41 2018 1,000,000 122,819 100,768 1,223,587 4,986,082 4.41 2019 1,060,000 100,768 77,395 1,238,163 3,747,919 4.41 2020 1,110,000 77,395 52,920 1,240,315 2,507,604 4.41 2021 1,160,000 52,920 27,342 1,240,262 1,267,342 4.41 2022 1,240,000 27,342 - 1,267,342 - 4.41 $ 9,000,000 $ 1,982,074 $ 1,996,723 $ 12,978,797 Original Authorization - $9,000,000 Issued - $9,000,000 Date of Issue -September 18, 2007 Maturity Range -Serial Bonds: October 1, 2008 through October 1, 2021 Principal Payment Date -October 1 of each year Interest Payment Dates -October 1 and April 1 of each year Denomination - N/A Call Features -Penalty for early payment Paying Agent -Branch Banking and Trust Company Ratings - N/A Projects: The bonds were issued to finance the City's share of the Reclaim and Deepwell Project at the South Central Regional Wastewater Treatment Facility. 99 City of Delray Beach, Florida Schedule of Installment Agreements (Capital Leases) Balance Fiscal Year Ending Outstanding at September 30 Principal Interest Total End of Fiscal Year 2008 $ 359,112 $ 14,946 $ 374,058 $ 266,507 2009 198,700 5,140 203,840 62,667 2010 55,704 1,058 56,762 5,905 2011 5,877 28 5,905 - $ 619,393 $ 21,172 $ 640,565 Schedule of installment agreements consists of the following: SunTrust Leasing - Original amount of principal-$581,420, 60-month term, 2.97% interest, dates June 20, 2004 through May 20, 2009-IBM I Series computer upgrade. Fifth Third Leasing - Original amount of principal-$487,077, 36-month term, 3.37% interest, dates August 10, 2005 through July 10, 2008-Laptops. Bank of America Leasing - Original amount of principal-$117,540, 48-month term, 3.6ll2% interest, dates January 10, 2006 through December 10, 2009-golf carts at Lakeview Golf Course. Bank of America Leasing - Original amount of principal-$199,573, 48-month term, 3.6ll2% interest, dates January 10, 2006 through December 10, 2009-Telephone system at Police Department. Regions Financial Corporation - Original amount of principal-$131,420, 48-month term, 3.7696% interest, dates December 21, 2007 through December 21, 2011-golf carts at Delray Beach Golf Course 100 City of Delray Beach, Florida Combined Schedule of Community Redevelopment Agency Tax Increment Redevelopment Revenue Bonds (Series 2004 and Series 1999) Balance Fiscal Year Ending Principal Interest Outstanding at Interest September 30 September 1 Sent. 1/Mar. 1 Total End of Fiscal Year Rate 2008 $ 1,300,000 $ 776,350 $ 2,076,350 $ 19,467,620 2009 1,365,000 715,292 2,080,292 17,387,328 2010 1,425,000 651,128 2,076,128 15,311,200 2011 1,520,000 584,076 2,104,076 13,207,124 2012 1,595,000 512,558 2,107,558 11,099,566 2013 1,670,000 437,454 2,107,454 8,992,112 2014 1,750,000 358,764 2,108,764 6,883,348 2015 1,420,000 276,274 1,696,274 5,187,074 2016 1,250,000 209,746 1,459,746 3,727,328 2017 1,090,000 151,440 1,241,440 2,485,888 2018 1,140,000 103,184 1,243,184 1,242,704 2019 1,190,000 52,704 1,242,704 - $ 16,715,000 $ 4,828,970 $ 21,543,970 Original Authorization - $10,000,000 (Series 2004A -Tax-exempt) - $1,925,000 (Series 2004B -Taxable) - $9,715,000 (Series 1999A -Tax-exempt) Issued - $10,000,000 ($5,000,000 issued before September 30, 2004 and $5,000,000 issued from October 1, 2004 to December 31, 2004 -Series 2004A -Tax-exempt) - $1,925,000 (Series 2004B -Taxable) - $9,715,000 (Series 1999A -Tax-exempt) Date of Issue -May 19, 2004 (2004 Series), and June 25, 1999 (1999 Series) Maturity Range -Serially September 1, 2001 through September 1, 2019 (Series 2004A&B, & 1999) Principal Payment Date -Series 2004A: September 1 of each year, commencing September 1, 2005 - Series 2004B: September 1 of each year, commencing September 1, 2005 - Series 1999A: September 1 of each year, commencing September 1, 2001 Interest Rate -Series 2004A: 4.2982% until September 1, 2019 - Series 2004B: 5.9095% until September 1, 2016 - Series 1999A: 4.80% until September 1, 2019 Denomination - N/A Call Features - No penalty for early payment for taxable debt only Paying Agent/Registrar -Bank of America (Series 2004A &B, & 1999) Ratings -Not rated 4.2982% - 5.9095% 4.2982 - 5.9095 4.2982 - 5.9095 4.2982 - 5.9095 4.2982 - 5.9095 4.2982 - 5.9095 4.2982 - 5.9095 4.2982 - 5.9095 4.2982 - 5.9095 4.2982 - 4.8000 4.2982 - 4.8000 4.2982 - 4.8000 Project: The Series 2004A and 1999A proceeds were issued for the purpose of financing the costs of acquisition and construction of certain redevelopment projects. Proceeds of the Series 2004B Bonds were used to refund the 1999B Series Bonds. The CRA issued a $7,000,000 variable rate taxable line of credit with Regions Bank on October 5, 2006 for the purpose of financing the costs of acquistion and construction of certain redevelopment projects. The line of credit matures October 6, 2009 and has a current rate of 5.86%. There was no outstanding liability on the line of credit at September 30, 2007. 101 Statistical Section STATISTICAL SECTION This part of the City of Delray Beach 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 City's overall financial health. Contents Page Financial Trends .........................................................................................................................................103 These schedules contain trend information to help the reader understand how the City's financial performance and well-being have changed over time. Revenue Capacity .......................................................................................................................................111 These schedules contain information to help the reader assess the City's most significant local revenue source, the property tax. Debt Capacity .............................................................................................................................................114 These schedules present information to help the reader assess the affordability of the City's current levels of outstanding debt and the City's ability to issue additional debt in the future. Demographic and Economic Information ..................................................................................................118 These schedules offer demographic and economic indicators to help the reader understand the enviromnentwithin which the City's financial activities take place. Operating Information ................................................................................................................................120 These schedules contain service and infrastructure data to help the reader understand how the information in the City's financial report relates to the services the City of Delray Beach provides and the activities it performs. Sources: Unless otherwise noted, the information in these schedules is derived from the comprehensive annual financial reports for the relevant year. 102 CITY OF DELRAY BEACH, FLORIDA Net A,rretr by Component Lart Five Fiscal Yearr Accrual Barir of Accounting Fiscal Year 2003 2004 2005 2006 2007 Governmental activities Invested in capital assets, net of related debt $ 25,996,353 $ 15,130,555 $ 24,817,964 $ 55,464,989 $ 51,049,876 Restricted 5,992,593 24,530,625 22,855,797 8,014,482 20,850,170 Unrestricted 8,359,365 13,393,763 20,185,194 22,245,386 23,371,450 Total governmental activities net assets $ 40,348,311 $ 53,054,943 $ 67,858,955 $ 85,724,857 $ 95,271,496 Business-type activities Invested in capital assets, net of related debt $ 53,818,297 $ 54,347,706 $ 59,315,335 $ 59,024,376 $ 54,782,750 Restricted 5,387,916 4,859,275 4,469,621 1,338,263 7,038,221 Unrestricted 20,023,794 23,182,592 23,565,069 34,032,926 40,529,960 Total business-type activities net assets $ 79,230,007 $ 82,389,573 $ 87,350,025 $ 94,395,565 $102,350,931 Primary government Invested in capital assets, net of related debt $ 79,814,650 $ 69,478,261 $ 84,133,299 $114,489,365 $105,832,626 Restricted 11,380,509 29,389,900 27,325,418 9,352,745 27,888,391 Unrestricted 28,383,159 36,576,355 43,750,263 56,278,312 63,901,410 Total primary government net assets $119,578,318 $135,444,516 $155,208,980 $180,120,422 $197,622,427 103 CITY OF DELRAY BEACH, FY.ORIDA Changer in NetA,rretr La,rt Five Fiscal Yearr Accrual Ba,rir ofAccountine Fiscal Year 2003 2004 2005 2006 2007 Expenses Govemmental activities: General govemment Public safety Physical environment Culture/recreation Interest on long-term debt Total governmental activities expenses Business-type activities: Water/Sewer Utility Municipal Golf Course Lakeview Golf Course City M~uina Sanitation Stormwater Utility Total business-type activities expenses Total primary government expenses Program Revenues Govemmental activities: Ch~uges for services: General govemment Public safety Physical environment P~uks and recreation Operating grants and contributions: General govemment Public safety Physical environment P~uks and recreation Capital grants and contributions: General govemment Physical environment P~uks and recreation Total governmental activities program revenues Business-type activities: Ch~uges for services: Water/Sewer Municipal Golf Course Lakeview Golf Course City M~uina Sanitation Stormwater Utility Operating Capital grants and contributions: Water/Sewer Municipal Golf Course Lakeview Golf Course City M~uina Sanitation Stormwater Utility Capital grants and contributions: Water/Sewer Municipal Golf Course Stormwater Utility Total business-type activities program revenues Total primary government program revenues Net (expense)/revenue Govemmental activities Business-type activities Total primary government net expense Note: Pg 1 of 2 $ 12,615,732 $ 13,504,963 $ 16,634,186 $ 20,944,239 $ 25,304,576 41,494,100 42,413,760 44,818,400 49,389,129 55,930,194 4,129,748 4,154,255 4,569,904 5,931,521 7,194,134 10,804,249 10,608,918 11,164,817 12,428,343 14,723,853 1,715,063 2,476,264 2,078,244 2,755,249 1,389,786 70,758,892 73,158,160 79,265,551 91,448,481 104,542,543 18,865,811 22,835,889 19,975,077 20,432,143 22,407,194 2,942,377 3,381,336 3,382,942 3,467,334 3,440,617 700,932 696,573 709,142 653,116 748,549 103,101 104,143 109,026 114,222 120,146 2,354,354 4,338,426 3,788,232 9,053,052 2,897,768 1,429,557 1,078,343 1,111,291 1,050,275 1,331,003 26,396,132 32,434,710 29,075,710 34,770,142 30,945,277 $ 97,155,024 $ 105,592,870 $ 108,341,261 $ 126,218,623 $ 135,487,820 $ 3,826,407 $ 3,623,697 $ 4,367,332 $ 4,986,337 $ 4,521,285 6,041,301 5,481,990 5,823,023 5,310,373 6,033,201 615,657 633,729 598,019 641,251 626,974 1,264,769 1,092,586 1,157,013 1,143,867 1,236,660 1,326,703 1,975,397 1,829,154 3,260,394 3,165,420 784,980 1,868,212 2,006,827 1,825,883 2,033,988 238,877 360,352 427,188 1,226,975 547,284 97,473 57,955 398,307 3,137,386 1,345,900 - 1,611,519 1,184,058 342,025 1,383,440 202,031 152,477 470,063 - - 150,000 1,641,635 479,116 14,548,198 18,499,549 18,740,100 21,874,491 20,894,152 22,716,982 23,635,054 24,426,939 25,748,645 29,162,001 2,475,728 3,294,989 3,300,439 3,437,934 3,467,778 828,116 827,397 823,777 768,299 853,654 109,352 150,644 155,200 149,294 160,605 2,521,938 2,602,241 2,538,402 2,615,981 3,094,658 1,629,589 1,661,505 1,672,635 1,702,322 2,097,527 323,978 2,038,967 786,217 1,913,869 951,487 92,298 113,720 130,408 131,171 182,796 4,336 17,165 35,502 55,415 6,171 205 56,912 2,177 273 491 103,703 1,790,775 1,237,680 5,663,671 115,040 260,465 30,435 20,552 45,157 362,325 1,909,473 1,968,840 1,290,786 967,462 1,424,878 10,508 - - - - - - - 146,026 - 32,986,671 38,188,644 36,420,714 43,345,519 41,879,411 $ 47,534,869 $ 56,688,193 $ 55,160,814 $ 65,220,010 $ 62,773,563 $ (56,210,694) $ (54,658,611) $ (60,525,451) $ (69,573,990) $ (83,648,391) 6,590,539 5,753,934 7,345,004 8,575,377 10,934,134 $ (49,620,155) $ (48,904,677) $ (53,180,447) $ (60,998,613) $ (72,714,257) 104 CITY OF DELRAY BEACH, FY.ORIDA Changer in NetA,rretr La,rt Five Fiscal Yearr Accrual Ba,rir of Accounting General Revenues and Other Changes in Net Assets Govemmental activities: Taxes: Property taxes Franchise fees Utility service taxes Sales taxes Intergovernmental, unrestricted Investment earnings Gain on disposal of capital assets Miscellaneous Transfers Total governmental activities Business-type activities Investment earnings Transfers Total business-type activities Total primary government Changes in Net Assets Govemmental activities Business-type activities Total primary government Note: Pg 2 of 2 Fiscal Year 2003 2004 2005 2006 2007 $ 32,069,034 $ 36,055,993 $ 41,581,718 $ 49,825,341 $ 59,091,002 3,467,379 3,817,080 3,989,989 4,879,168 5,257,560 8,093,064 7,704,692 8,088,142 8,678,710 8,222,944 1,715,268 1,806,689 1,895,507 1,488,936 1,438,613 5,827,651 6,443,433 6,928,194 7,393,652 6,927,534 460,913 462,340 1,543,167 2,561,044 2,816,429 (4,872,674) 36,514 1,112,107 19,532 - 3,490,308 7,273,876 7,612,229 10,616,990 5,724,228 2,586,058 2,672,550 2,575,410 1,976,519 3,716,720 52,837,001 66,273,167 75,326,463 87,439,892 93,195,030 128,491 78,182 190,858 446,682 737,952 (2,586,058) (2,672,550) (2,575,410) (1,976,519) (3,716,720) (2,457,567) (2,594,368) (2,384,552) (1,529,837) (2,978,768) $ 50,379,434 $ 63,678,799 $ 72,941,911 $ 85,910,055 $ 90,216,262 $ (3,373,694) $ 11,914,556 $ 14,804,012 $ 17,865,902 $ 9,546,639 4,132,972 3,159,566 4,960,452 7,045,540 7,955,366 $ 759,278 $ 15,074,122 $ 19,764,464 $ 24,911,442 $ 17,502,005 105 CITY OF DELRAY BEACH, FLORIDA Covern~nental Activities Tax Revenues by Source Last Five Fiscal Years Accrual Basis ofAccountinQ Fiscal Year Property Taxes Franchise Fees Utility Service Tax Sales and Use Tax 2003 $ 32,069,034 $ 3,467,379 $ 8,093,064 $ 1,715,268 2004 36,355,993 3,817,080 7,704,692 1,806,689 2005 41,584,718 3,989,989 8,088,142 1,895,507 2006 49,825,341 4,879,168 8,678,710 1,488,936 2007 59,091,002 5,257,560 8,222,944 1,438,613 Total $ 45,344,745 49,684,454 55,558,356 64, 872,155 74,010,119 106 d~ Q ~i W U ~ ~ ~ A ~ ~ . 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L' o ~ a ~ ~ 0 U °~ v Q ~ o ~' Chi C4 ~ u ~~ C CITY OF D ELRAY B EACH, FLORIDA Property Tax Rates -Direct and Overlapping Covern~nents Last Ten Fiscal Years Fiscal Year Ending September 30, General Fund Debt Service Total City of Delray Beach School District Palm Beach County Special Taxing Districts Total All 1998 6.9500 0.8500 7.8000 9.5570 4.6000 1.8570 23.8140 1999 6.9100 0.7900 7.7000 9.6820 4.6000 1.7470 23.7290 2000 6.9100 0.7400 7.6500 9.0430 4.6000 1.6720 22.9650 2001 7.2600 0.6900 7.9500 8.9180 4.6000 1.7170 23.1850 2002 7.3700 0.6300 8.0000 8.9480 4.5500 1.8470 23.3450 2003 7.4400 0.5600 8.0000 8.7790 4.5000 1.8230 23.1020 2004 7.5200 0.4800 8.0000 8.5710 4.7910 1.8270 23.1890 2005 7.4500 0.5500 8.0000 8.4320 4.7677 1.7970 22.9967 2006 7.4500 0.5500 8.0000 8.1060 5.4464 1.7770 23.3294 2007 6.8600 0.4400 7.3000 7.8720 4.2800 1.6670 21.1190 Tax rate limits -Ten mills per Florida Statute 200.81 (one mill equals $1 per $1,000 of assessed valuation). Scope of tax rate limit - No municipality shall levy ad valorem taxes for real and tangible personal property in excess of ten mills of the assessed value, except for special benefits and debt service on obligations issued with the approval of those taxpayers subject to ad valorem taxes. Taxes assessed -January 1 Taxes due -March 31 Taxes delinquent -April 1 Discount allowed - 4% November; 3% December; 2% January; 1% February Penalties for delinquent - 2.5% after April 1, increase .5% each ten days; maximum 5% Tax collector -Palm Beach County Tax collector's commission -None 111 Q x ~ U ¢' w y C4 ~ ~, ~ ~ ~ ~ ~_ 2 W ~ ~ A O0.' a' ~ ~ y ~ .~ ~ U ~ U w o ~ ~ ~ ~ ~1 ~ ~~ i+ O a ~ ~ a "~ H ~ "'~ ~ ~ ~ ~~ F~ 7~'i ~ Y i~C ~ ~ `~ ~ cC W O ~ c~C `~ ~ ~1 ~ ~~ iU+ O a ~ Fy a "~ O O N ~ .~ ~ ~ ~ ~~ F~ ~ Y l~ ~ 00 ~ ~ '~ ~ 00 O O 00 \p ~ ~ ~ ~ M M M M 0 0 0 0 0 0 0 0 0 0 ~--i N M ~ ~ \O ~ 00 01 ~ O 00 l~ N 01 l~ N 01 M l~ O l~ ~ ~ ~ O\ ~ ~ ~ ~ ~O ~--i N 00 00 M 00 ~ \O 01 ~ 00 ~ l~ 00 M ~--i ~ 01 ~ ~--i ~ 00 ~ ~ ~ M N ~ ~ ~ M N N N N N N ~--i ~ ff3 l~ 01 N 00 l~ ~ 00 ~ ~--i N ~ ~ oN0 ~ ~ O O ~ v ~ ~ ~O ~ ~O ~O ~ ~n oo O ~O ~O O O O ~ M ~ oo ~O O\ O 01 01 00 ~ M ~--i O ~ M l~ ~ M M M M M M N N ff3 a U a ~ ~ s s ~ O b~q ~ 'O U ~~ ~ x a ~ ~ a~ o ~ 0 ;~ .,; -o a ,~ ~ '.~ ~ ~ •,~ o ~ ~ ¢' ~ :~ U `~ o ~ ~ ~ Q UQ~ ~xa Q, ~~ v1 ~ y .'~ ~ ~ ~ ~ w ~ N ~~lF-~ UraOa ~l~l~ 0 0 0 0 0 0 0 0 0 0 0 00 ~--i 01 ~ M ~--i l~ ~ M ~--i O N O\ l~ ~O ~O ~O ~ ~ ~ ~ ~O X 0 0 0 0 0 0 0 0 0 ~O ~--i N M ~ ~ \O ~ 00 01 ~ 01 O M ~--i ~ ~ ~ 00 ~ 01 ~--i 00 \p 00 N ~ M ~ ~ ~ M ~--i ~ l~ ~O ~O ~ O ^~ ~ ~ 01 ~ ~ 00 M M ~--i Ap ~ N 01 ~ ~ ~O 00 \p M M N ~ ~ ~ ~ l~ ff3 Iff3 N O O ~ ~ M OA ~ r, ~ op l~ O O 01 ~ M~ 01 M G M 00 O O 00 l~ M 01 00 N ~O ~ 01 O ~ O ~ 00 l~ ~ ~ 01I ~p ~ O 00 M ~--i ~ 00 O\ O\ 00 p O N 01 ~--i 00 ~--i ~ 00 ~ 00 N ~ ~ O l~ ~O ~O N ~ ~ O I ~ f~ III O N ff3 N_ M ff3 ~. ~' ~ ~ ~ ~ ;~ ;~ y ~ a a ~° ci 'x -o .~ o -o ~ ,~ ~, ' o ~ U ¢, Q O Gq ra ~ y ~ ~ ~ ~ o ~ ~ ~ :~ QriiO ~~a~ Qn~F ~ '~ O O ~--~ M M 00 QJ ~ ti () ti ~ ,~ O\ O O ~ N s 'y, ff3 ff3 N ~ ~ ~ ~ O O\ O O\ ~" O O\ O O\ ~ Q i . Q" U U U U ~ ' -~ a ~ s s 'w" 'w" }y s s 'w" 'w" ~ ' S ~ , ~ "' °' o U ~ .~ 'a~i y .~' ~F U a v 0 N CITY OF DELRAY BEACH, FY,ORIDA Property Tax Levies and Collections Last Ten Fiscal Years Total Collections Fiscal Year Current Percent Delinquent Property as a Percent Ending Net Tax Tax of Levy Tax Tax of Current September 30, Levy* Collections Collected Collections Collections Levy 1998 $20,821,315 $20,731,763 99.57% $ 35,853 $20,767,616 99.74% 1999 22,099,064 21,996,762 99.54% 84,164 22,080,926 99.92% 2000 23,465,518 23,345,095 99.49% 74,076 23,419,171 99.80% 2001 26,105,220 25,968,855 99.48% 73,040 26,041,895 99.76% 2002 29,084,111 28,938,206 99.50% 115,526 29,053,732 99.90% 2003 32,099,240 31,953,508 99.55% 46,171 31,999,679 99.69% 2004 36,399,203 36,309,822 99.75% 70,069 36,379,891 99.95% 2005 41,606,999 41,514,649 99.78% 66,409 41,581,058 99.94% 2006 49,828,444 49,758,932 99.86% 68,388 49,827,320 100.00% 2007 59,150,165 59,021,614 99.78% - 59,021,614 99.78% Note: All property taxes are assessed and collected by Palm Beach County without charge to the City. Collections are distributed in full as collected. * Tax levy, net of allowance for discounts. 113 Q r0 F~ U W ~Q I~ W A w 0 N U .a .a q ~ ~ ~ ~ .; ~ ~ L~ .~^,' ~ O ~_ ~i CC it 'ma'r a U O CC O a C"i ~ ~ it ~". ~ `~ C.' O ~ ~ Na+O ~ ~ i." ~" y ~ it ~ ~ .~ ~ ~ ~ ~ U O ~ ~ bbl Q ~ Qi .~ ~ ~" ~ i." ~Q ~ O ~ C~'C ~ _ ~ ~ .. _ CC ~ ~ C"i 0 Hy .~ V i." ~r i." x. 0 C.' 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C"" O ~ U .-. ~ O ~ O ~ '-' O N +~ U ~ ~ ~ b cad ~ ti ,~ O N ~ ~ ~ O 'O ~ ~ N ~ ~ .~ o .~ o 'O ~• N ~-+ ~ P" ~ ~ O ~ r, b ~~ ~~ O z CITY OF DELRAY BEACH, FLORIDA Direct and Overlapping Covern~nental Activities Debt September 30, 2007 Percentage Amount Applicable to Applicable to Total City of City of Outstanding Delray Beach~l~ Delray Beach Direct City of Delray Beach $ 34,425,551 100.00% $ 34,425,551 Overlapping: Palm Beach County 313,515,000 5.00% 15,675,750 Palm Beach County School District 38,580,000 5.00% 1,929,000 Total overlapping debt 352,095,000 17,604,750 Total direct and overlapping debt payable from ad valorem taxes $ 386,520,551 $ 52,030,301 Population 64,360 Total direct and overlapping debt per capita $ 808.43 ~'~ Estimates based on 2000 ratio of assessed taxable values. Note: The City of Delray Beach has no legal debt margin. Source: Finance Department, City of Delray Beach, Florida Palm Beach County Froperty Appraiser School Board of Palm Beach County 116 CITY OF DELRAY BEACH, I+Y,ORIDA Water and Sewer Pledged Revenue Coverage Last Ten Fiscal Years Revenue Available for Fiscal Gross Operating Debt Current Debt Current Year Revenue (1) Expenses(2) Coverage Service Coverage 1998 $ 20,310,334 $ 10,796,061 $ 9,514,273 $ 3,891,048 2.45 1999 20,682,069 10,902,452 9,779,617 3,730,710 2.62 2000 21,070,554 12,683,495 8,387,059 3,907,642 2.15 2001 20,698,190 10,254,472 10,443,718 4,153,440 2.51 2002 21,432,405 12,244,207 9,188,198 4,823,090 1.91 2003 (3) 23,105,173 12,812,339 10,292,834 1,430,379 7.20 2004 25,726,277 15,443,253 10,283,024 4,745,800 2.17 2005 25,365,483 15,553,998 9,811,485 4,742,560 2.07 2006 28,040,630 19,288,632 8,751,998 4,845,913 1.81 2007 30,747,711 20,432,772 10,314,939 5,338,475 1.93 (1) Includes interest revenue and rents (does not include capital contributions) (2) Excludes depreciation expense, interest expense and amortization expense. (3) The reduction of debt service is due to the partial refunding of the 1993 Water and Sewer Revenue Bonds. 117 CITY OF D ELRAY B EACH, FLORIDA Principal Errcployers September 30, 2007 Fiscal Year 2007 Employer Office Depot Delray Medical Center Publix Supermarkets Addison Reserve Main Gate JET Flite Inc. Levenger Hardrives of Delray Inc. Home Depot Delray Lincoln Mercury Kia Alcohol Treatment Center Totals Percentage of Total City Employees Rank Employment 2,620 1 N/A 1,500 2 N/A 754 3 N/A 500 4 N/A 425 5 N/A 401 6 N/A 365 7 N/A 357 8 N/A 350 9 N/A 301 10 N/A 7,573 Source: Florida Agency for Workforce Innovation (AWI) Note: Data is not available for 1998 Note: Total City Employees - 822 118 CITY OF DELRAY BEACH, FLORIDA Demographic and Economic Statistics Last Ten Fiscal Years Fiscal Year City Population~i~ County Population~i~ County Per Capita Personal Income~~~ Median A~e~~~ School Enrollment~3~ Unemploy- ment Rate~4~ 1998 53,471 1,020,521 $ 36,057 N/A 9,175 81% 1999 53,589 1,042,196 36,057 N/A 9,634 7.4% 2000 60,020 1,131,184 40,044 N/A 10,141 5.3% 2001 60,645 1,154,464 41,907 N/A 8,950 6.3% 2002 61,527 1,183,197 42,430 N/A 8,321 7.6% 2003 62,578 1,211,448 43,626 41.8 8,186 71% 2004 63,439 1,242,270 43,830 41.8 7,852 6.3% 2005 63,888 1,265,900 44,050 41.8 8,652 3.8% 2006 64,095 1,287,967 44,518 41.7 8,100 31% 2007 64,360 1,295,033 46,630 38.1 7,839 3.6% Data Sources: (1) The Population data is from the U. S. Bureau of Census as of April for the year 2000 & the University of Florida, Bureau of Economic Business for all other years. (2) Business Development Board of Palm Beach County. Data is for Palm Beach County, Florida. Information is not available for the City. (3) The School Enrollment is from the Palm Beach County School Board. (4) The Unemployment Rate data is from the U.S. Department of Labor, Bureau of Labor Statistics. N/A: Information is not available for these years. 119 CITY OF DELRAY BEACH, FLORIDA Full-time Equivalent Covern~nent Ertcployees by Function Last Ten Fiscal Years Fiscal Year 1998 1999 2000 2001 2002 2003 2004 2005 2006 2007 General Government 64 64 64 66 66 65 68 66 69 71 Public Safety Community Improvement 3 3 3 3 4 4 4 4 5 5 Planning & Zoning 13 13 13 15 15 15 15 15 15 17 Building Inspection 20 20 20 20 20 20 20 21 21 23 Code Compliance 16 16 16 16 16 16 17 17 17 17 Law Enforcement 227 228 229 234 234 237 233 234 236 238 Fire Control 138 138 138 139 144 144 148 149 154 154 Community Development Block Grant 6 7 8 9 9 6 6 6 5 7 Insurance 3 3 3 4 4 4 4 4 4 4 City Garage 11 10 10 10 10 11 12 12 12 12 Physical Environment Public Works 22 22 22 22 22 24 24 25 25 25 Engineering 6 7 7 7 7 7 7 7 8 8 Sanitation 3 3 3 4 4 4 4 4 4 4 Stormwater Utility 6 6 6 6 6 6 6 6 6 6 Parks and Recreation 89 88 89 93 94 98 98 108 108 114 Water & Sewer Utility 104 102 103 107 107 108 110 114 115 117 Total 731 730 734 755 762 769 776 792 804 822 120 Q ~I ~ ~O W FBI ~ U V ti ~ A y O ~ ~ ~~ U UN N N O O N 0 0 N M O O iw N uN ~'' N 0 0 N O O O N rl O G~ N C'n ~ ~ ~ ~ .may ~ ~ ~ .may ~ ~ ~ ~ e--1 N C'n '~ ~ ~ ~ N ~ O ~ ~ ~ ~ e--1 N ~ e--1 ~ e--1 N m~ ~o~noo N~O~~ a~ ~--~ N m ~p ~O ~n oo m N O oo l 01 ' m ~ N N ~ ~ ~ --~ N ~ ~ U N '~ ~ ~ m ~p '~ oo m N O oo l 01 ~ w ~ ~ N O ~ ~ e C ~ N ~ ~ ~p ~ oo N N O N ~ ~ ~ w ~ ~ -'= ~ ~ °' ~ '~, -° ° o a ~ ~ ~. o o• ~ ~ ~ ~O N oo m N O oo m ~ ~ '~ 0.~ ~ ~ ~ ~ 0 ~ ~ ~ ~ [~ ~+ ~ ~o ~ oo ~ ~ O ~ ~ o ~ ~ ~ ~ ~ a+ U ~ i ~ ~ O i i ~ ~ ~ ~ 'O bA y y y ~ W w ~ ~ ~O N oo O m O ~O m ~ ~' ~ ~ ~ ~' ~ r" N r" N r" ~ ~ ~ ' it ; ~ ~ ~ U 4 H ~ ~ ~ ~ ~ ~ ~ ~ ^ ~ ~ ~ ~ ~ ~p ~ 00 O ~ O ~ ~ it cn . ~ it •~ ~ • U ~ ~-~ CA ~ ~ ~ ~ ~ ~ ~ ~ ~ it ~ ~ 6> ~ ~ aC ~ ~ VI ~ G~ f~ ~ O O ~ ~ V1 a+ y I~ ~ N U ~ ~ ~" ~~ ~ ~ ,~ ~ CC vz iw ~ q v: ~ ~ ~ ~ ~ ~ ~ ~ ~ ~ ~ s -~ y ~bA R ~ ~ ~ CC C VI ~i ~ ~ N ,~ ~ ~ '~ ~ ~ p ~ m ~ ~ it ~ 'O ~ ~ ~, ,-, ~ o vi a ~ .'~ '~ 1 ~ w ii., d ~ ' c~ c~ o a~ c~ •;, oa oa vi H a ~ ~ ~ ~ ~ ~, w° s w a ~ ~ a ~4 ~ H N CITY OF DELRAY BEACH, FLORIDA Operating Indicators by Function Last Six Fiscal Years Function Public Safety Police Physical arrests Traffic violations Fire Number of calls Parks and Recreation Library Circulation Frograms offered Frogram attendance Leisure Services Youth athletic participants Camp program participants Class participants Water/Sewer Utility Water customers Water main breaks Sewer customers Avg daily water consumption (millions of gallons) Fiscal Year 2002 2003 2004 2005 2006 2007 2,171 2,486 2,476 2,444 2,875 3,108 231 12,880 14,471 12,040 13,928 10,962 11,074 10,744 11,960 11,591 12,024 11,772 N/A 253,835 233,106 227,820 228,871 257,656 N/A 625 642 650 910 1,112 N/A 20,818 22,742 20,056 32,873 32,852 744 927 1,904 2,343 2,655 10,597 660 670 365 358 322 625 15,224 14,376 14,007 11,090 10,634 15,093 19,013 19,436 19,760 20,135 20,437 20,963 None None None None None None 18,900 19,300 19,600 20,000 20,400 20,900 8,456 11,930 10,963 12,746 12,348 11,602 Sources: City departments/Delray Beach Public Library N/A The following data is not available: Public Safety -Parking violations Sanitation -Refuse & Recyclables collected (tons) Roads & Streets -Street Resurfacing (miles)/Pot holes Repairs 122 err O U N N U ~ U ~ ~-+ ,'~ ~ bq ~ N N ~+ bq N ~+ bq ~ ~ N N O ~ U '~ " pp ~` " U v~ v~ ~ b-0 d ~ bq d ,~ O b A ~d U O O U O c U O c ~ \ \ ~ \ \ \ \ \ \ ~ G' O G' O G' G' G' O ~ ~ 0 0 0 ~ G' G' G' ~ 0 0 0 G' 0 G' 0 G' 0 ~ O ~ N 01 ~ ~ ~ ~ ~ ~ ~ ~ ,--i ,--i ,--i N N ~ ,~ ~ ~ ~ O ~ ~, bA ,b U ~ ~ U ° ~ ~ N N L ~ L ~ N v~ ,~ °~ G, p O v~ v' ~ ~ _ bq ~ ~ ~ ~ ~ ~ ~ ~ "^' m ~' ~ ~ ~ ~ DC ~ ~ ~ ,-~ '~' ~ Ga m L ~ ~ p ~ v, ~" ~" ~ 'b '~ D, ~ O a W ~ m .~ ~ °~ >,~~ 0 0 0 023 ~-o W~ b1~ ~~ O W G, W W W W Pa !~ fs, C7 G, U M N ,--i A O a w x U d W ~Q w A w 0 U .. '"'r ~ '"' ~ r ,-ti ~ i-. O a O ~ ° ~ ~, ;.a ~ O N Q ~ ~ p G ~ 0 N ° a ~ ~ a s ~" ,~ .~ o'~ cd cd ~ cad U~ a ~ ~ N v' b U Q ~~ a a `~ ~ ~ ~ U U U ~ ~ ~ ~ ~ ~ ,x ~ ~ ~ ~ W W ~ b ~ ~ U v ~ o 3a a w = N~a°a as ww c7 a ~ ~ ~ ~ b ~ ~ ° ° ~ ~ ~ ~ ~~~o ° °~ ~ o ~ ~~ ~ ~ ~x , ,~~~ ~b~~ ~ 0 0 ~ ~ ~b ~ ~ ~ ~.~ ~ ¢b :~ o ~ ~~ 0 0~~ a a a ¢ z x x x ~¢ w Compliance Section .e~+1 ~ ~ ~ Independent Auditor's 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 Commission City of Delray Beach, Florida We have audited the accompanying financial statements of the governmental activities, the business-type activities, the aggregate discretely presented component units, each major fund and the aggregate remaining fund information of the City of Delray Beach, Florida, as of and for the year ended September 30, 2007, which collectively comprise the basic financial statements of the City of Delray Beach, Florida, and have issued our report thereon dated March 20, 2008. Our report was modified to include a reference to other auditors. We conducted our audit in accordance with U.S. generally accepted auditing standards and the standards applicable to financial audits contained in Government Auditing Standards, issued by the Comptroller General of the United States. Other auditors audited the financial statements of the Police and Firefighters Retirement System Fund, a fiduciary fund of the City, and the Delray Beach Downtown Development Authority, a discretely presented component unit of the City, as described in our report on the financial statements of the City of Delray Beach, Florida. This report does not include the results of the other auditors' testing of internal control over financial reporting or compliance and other matters that are reported on separately by those auditors. Internal Control Over Financial Reporting In planning and performing our audit, we considered the internal control over financial reporting of the City of Delray Beach, Florida, as a basis for designing our auditing procedures for the purpose of expressing our opinion on the financial statements, but not for the purpose of expressing an opinion on the effectiveness of internal control over financial reporting of the City of Delray Beach, Florida. Accordingly, we do not express an opinion on the effectiveness of the internal control over financial reporting of the City of Delray Beach, Florida. A control deficiency exists when the design or operation of a control does not allow management or employees, in the normal course of performing their assigned functions, to prevent or detect misstatements on a timely basis. A significant deficiency is a control deficiency, or combination of control deficiencies, that adversely affects the entity's ability to initiate, authorize, record, process or report financial data reliably in accordance with U.S. generally accepted accounting principles such that there is more than a remote likelihood that a misstatement of the entity's financial statements that is more than inconsequential will not be prevented or detected by the entity's internal control. We consider the deficiencies described in the accompanying Schedule of Findings and Questioned Costs to be significant deficiencies in internal control over financial reporting. Amaterial weakness is a significant deficiency, or combination of significant deficiencies, thatresults in more than a remote likelihood that a material misstatement of the financial statements will notbeprevented or detectedbythe entity's internal control. 124 Our consideration of the internal control over financial reporting was for the limited purpose described in the first paragraph of this section and would not necessarily identify all deficiencies in internal control that might be significant deficiencies or material weaknesses. However, we believe that none of the significant deficiencies described in the accompanying Schedule of Findings and Questioned Costs are a material weakness. Compliance and Other Matters As part of obtaining reasonable assurance about whether the financial statements of the City of Delray Beach, Florida, 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 accordingly, we do not express such an opinion. The results of our tests disclosed no instances of noncompliance or other matters that are required to be reported under Government Auditing Standards. We also noted certain additional matters that we reported to management in a separate management letter dated March 20, 2008. This report is intended solely for the information and use of the City Commission and management of the City of Delray Beach, Florida, federal and state awarding and pass-through agencies, 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. cam, ~~, ~:., b~, I,.~ ~ (/.~,C, PA, March 20, 2008 125 CITY OF DELRAY BEACH, FLORIDA SCHEDULE OF EXPENDITURES OF FEDERAL AWARDS AND STATE FINANCIAL ASSISTANCE For the Fiscal Year Ended September 30, 2007 Grantor/ Program Title CFDA Number Federal Awards U.S. Department of Agriculture Pass-through Award from the State of Florida Department of Agriculture Cooperative Forestry Assistance 10.664 U.S. Department of Defense Pass-through Award from Palm Beach County Department of the Army Beach Erosion Control Projects 12.101 U.S. Department of Housing and Urban Development Direct Awards Community Development Block Grants/Entitlement Grants 14.218 Community Development Block Grants/Entitlement Grants 14.218 Community Development Block Grants/Entitlement Grants 14.218 Total U.S. Department of Housing and Urban Development Contract/ Grantor Number 10324 R92-1283D B-04-MC-12-0033 B-05-MC-12-0033 B-06-MC-12-0033 U.S. Department of Justice Direct Awards Bulletproof Vest Partnership Grant 16.607 2006-BOBX06132740 Edward Byrne Memorial Justice Assistance Grant Program 16.738 2005-DJ-BX-1067 Total U.S. Department of Justice U.S. Department of Homeland Security Direct Award Assistance to Firefighters Grant Pass-through Awards from the State of Florida Department of Financial Services Homeland Security Grant Program Homeland Security Grant Program Homeland Security Grant Program Total U.S. Department of Homeland Security Total Federal Awards 97.044 EMW-2005-F6-02621 2007 Program Transfers to Expenditures Subrecipients $ 105,532 $ 0 22,079 0 78,167 21,155 663,871 155,057 53,566 18,103 795,604 194,315 27,741 0 7,262 0 35,003 0 1,029 97.067 05D5-2N-13-00-16-317 514 0 97.067 06D5-3W-05-52-16-318 2,115 0 97.067 07D5-5N-13-00-16-217 22,486 0 26,144 0 $ 984,362 $ 194,315 126 CITY OF DELRAY BEACH, FLORIDA SCHEDULE OF EXPENDITURES OF FEDERAL AWARDS AND STATE FINANCIAL ASSISTANCE (Continued) For the Fiscal Year Ended September 30, 2007 Grantor/ CSFA Contract/Grantor 2007 Program Transfers to State Project Title Number Number Expenditures Subrecipients State Financial Assistance Florida Department of Environmental Protection Direct Awards Florida Recreation Development Assistance Program Statewide Surface Water Restoration and Wastewater Projects Total Florida Department of Environmental Protection Florida Housing Finance Corporation Direct Awards State Housing Initiatives Partnership Program Hurricane Housing Recovery Program Total Florida Housing Finance Corporation Florida Department of Transportation Direct Awards State Highway Project Reimbursement State Highway Project Reimbursement Total Florida Department of Transportation Florida Department of Health Pass-through Award from Palm Beach County County Grant Awards Total State Financial Assistance 37.017 37.039 52.901 52.902 55.023 55.023 64.005 A8063 $ 200,000 $ 0 LP6019 266,000 0 466,000 0 JF-093 754,969 17,924 N/ A 296,480 0 1,051,449 17,924 AOQ54 275 0 AN014 238,145 0 238,420 0 C6050 42,001 0 $ 1,797,870 $ 17,924 See notes to schedule of expenditures of federal awards and state financial assistance. 127 City of Delray Beach, Florida Notes to Schedule of Expenditures of Federal Awards and State Financial Assistance September 30, 2007 Note 1-Significant Accounting Policies The accompanying Schedule of Expenditures of Federal Awards and State Financial Assistance includes the federal awards and state financial assistance of the City of Delray Beach, Florida, for the year ended September 30, 2007 and is presented in accordance with the requirements of the provisions of OMB Circular A-133 and the requirements of the Florida Single Audit Act and Chapter 10.550, Rules of the Auditor General. The Schedule of Expenditures of Federal Awards and State Financial Assistance has been prepared on the modified accrual basis of accounting. Note 2 -Scope of Single Audit The federal programs and state financial assistance projects have been audited in accordance with the provisions of OMB Circular A-133, the Florida Single Audit Act and Chapter 10.550, Rules of the Auditor General, for program transactions occurring during the year ended September 30, 2007. The City had one federal program meeting the definition of a Type A program under the provisions of OMB Circular A-133. The following Type A program was audited as a major federal program: CFDA Number U.S. Department of Housing and Urban Development Community Development Block Grants/ Entitlement Grants 14.218 The following were audited as major state projects: CSFA Number Florida Housing Finance Corporation State Housing Initiatives Partnership Program 52.901 Hurricane Housing Recovery Program 52.902 The State Housing Initiatives Partnership Program met the definition of a Type A project under the provisions of the Florida Single Audit Act. The Hurricane Housing Recovery Program was ahigh-risk Type B project audited as a major state project to achieve audit coverage of at least 50% of the City's total expenditures of State financial assistance. Note 3 -Contingency Amounts received or receivable from grantor agencies are subject to audit and adjustment by those agencies. Any disallowed claims, including amounts already received, might constitute a liability of the City for the return of those funds. In the opinion of management, all grant expenditures were in compliance with the terms of the grant agreements and applicable federal and state laws and regulations. 128 Independent Auditor's Report on Compliance With Requirements Applicable to Each Major Federal Program and State Project and on Internal Control Over Compliance in Accordance with OMB Circular A-133 The Honorable Mayor and City Commission City of Delray Beach, Florida Compliance We have audited the compliance of the City of Delray Beach, Florida, with the types of compliance requirements described in the U. S. Office of Management and Budget (OMB) Circular A-133 Compliance Supplement, and the requirements described in the Executive Office of the Governor's State Projects Compliance Supplement, that are applicable to each of its major federal programs and state projects for the year ended September 30, 2007. The major federal programs and state projects of the City of Delray Beach, Florida, are identified in the summary of auditor's results section of the accompanying Schedule of Findings and Questioned Costs. Compliance with the requirements of laws, regulations, contracts and grants applicable to each of its major federal programs and state projects is the responsibility of the management of the City of Delray Beach, Florida. Our responsibility is to express an opinion on compliance by the City of Delray Beach, Florida, based on our audit. We conducted our audit of compliance in accordance with U.S. generally accepted auditing standards; the standards applicable to financial audits contained in Government Auditing Standards, issued by the Comptroller General of the United States; OMB Circular A-133, Audits of States, Local Governments, and Non-Prot Organizations; and, Chapter 10.550, Rules of the Auditor General. Those standards, OMB Circular A-133 and Chapter 10.550, Rules of the Auditor General require that we plan and perform the audit to obtain reasonable assurance about whether noncompliance with the types of compliance requirements referred to above that could have a direct and material effect on a major federal program or state project occurred. An audit includes examining, on a test basis, evidence about compliance by the City of Delray Beach, Florida, with those requirements and performing such other procedures as we considered necessary in the circumstances. We believe that our audit provides a reasonable basis for our opinion. Our audit does not provide a legal determination on compliance by the City of Delray Beach, Florida, with those requirements. In our opinion, the City of Delray Beach, Florida, complied, in all material respects, with the requirements referred to above that are applicable to each of its major federal programs and state projects for the year ended September 30, 2007. However, the results of our auditing procedures disclosed one instance of noncompliance with the requirements described in the Executive Office of the Governor's State Projects Compliance Supplement that are applicable to its major state projects, which is required to be reported in accordance with the Rules of the Auditor General and which is described in the accompanying schedule of findings and questioned costs as finding number 2007-3. 129 Internal Control Over Compliance The management of the City of Delray Beach, Florida, is responsible for establishing and maintaining effective internal control over compliance with requirements of laws, regulations, contracts, and grants applicable to federal programs and state projects. In planning and performing our audit, we considered the City's internal control over compliance with requirements that could have a direct and material effect on a major federal program or state project in order to determine our auditing procedures for the purpose of expressing our opinion on compliance and to test and report on the internal control over compliance in accordance with OMB Circular A-133 and Chapter 10.550, Rules of the Auditor General. A control deficiency in an entity's internal control over compliance exists when the design or operation of a control does not allow management or employees, in the normal course of performing their assigned functions, to prevent or detect noncompliance with a type of compliance requirement of a federal program or state project on a timely basis. A significant deficiency is a control deficiency, or combination of control deficiencies, that adversely affects the entity's ability to administer a federal program or state project such that there is more than a remote likelihood that noncompliance with a type of compliance requirement of a federal program or state project that is more than inconsequential will not be prevented or detected by the entity's internal control. A material weakness is a significant deficiency, or combination of significant deficiencies, that results in more than a remote likelihood that material noncompliance with a type of compliance requirement of a federal program or state project will not be prevented or detected by the entity's internal control. Our consideration of the internal control over compliance was for the limited purpose described in the first paragraph of this section and would not necessarily identify all deficiencies in internal control that might be significant deficiencies or material weaknesses. We did not identify any deficiencies in internal control over compliance that we consider to be material weaknesses, as defined above. This report is intended solely for the information and use of the City Commission and management of the City of Delray Beach, Florida, federal and state awarding and pass-through agencies, 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. cam, ~~, ~., bum, I-~..-~ ~ (/.~ P.A, March 20, 2008 130 CITY OF DELRAY BEACH, FLORIDA SCHEDULE OF FINDINGS AND QUESTIONED COSTS - FEDERAL AWARD PROGRAMS AND STATE PROJECTS Year Ended September 30, 2007 SECTION I -SUMMARY OF AUDITOR'S RESULTS Financial Statement Type of auditor's report issued: Llnquali~ed Opinion Internal control over financial reporting: Material weakness(es) identified? Yes X No Significant deficiency (ies) identified that are not considered to be material weakness? X Yes None reported Noncompliance material to financial statements noted? Yes X No Federal Award Programs and State Financial Assistance Projects Internal control over major Federal Award Programs and State Financial Assistance Projects: Material weakness(es) identified? Yes X No Significant deficiency (ies) identified that are not considered to be material weakness? Yes X None reported Type of auditor's report issued on compliance for major Federal Award Program and major State Financial Assistance Project: Llnquali~ed Opinion Any audit findings disclosed that are required to be reported in accordance with Section 510(a) of OMB Circular A-133? Yes X No Any audit findings disclosed that are required to be reported in accordance with Rule 10.557, Rules of the Auditor General? Yes X No Identification of Maior Federal Award Programs: Federal Award Program CFDA No. U.S. Department of Housing and Urban Development Community Development Block Grant/Entitlement Grants 14.218 Dollar threshold used to distinguish between Type A and Type B Federal award programs: $ 3O(l,000 Auditee qualified as low-risk auditee? Yes X No 131 CITY OF DELRAY BEACH, FLORIDA SCHEDULE OF FINDINGS AND QUESTIONED COSTS - FEDERAL AWARD PROGRAMS AND STATE PROJECTS (Continued) Year Ended September 30, 2007 Identification of Maior State Financial Assistance Proiects State Project State CSFA No. Florida Housing Finance Corporation State Housing Initiatives Partnership Program 52.901 Hurricane Housing Recovery Program 52.902 Dollar threshold used to distinguish between Type A and Type B State financial assistance projects: ~ 4O(l,000 SECTION II -FINANCIAL STATEMENT FINDINGS SIGNIFICANT DEFICIENCIES Finding Number Finding 2007-1 Segregation of Duties Criteria: Internal controls should provide for segregation of duties in the accounts payable process such that one individual is not responsible for the entire process. Condition: The senior accounting clerks are responsible for processing vendor invoices, entering those invoices into the general ledger, printing the checks for those invoices and delivering the checks for signature. The signed checks are then returned to the same senior accounting clerks to place the checks into envelopes for mailing. Effect: Because the signed checks are returned to the same individuals that are responsible for processing vendor invoices and entering the invoices into the general ledger, it is possible for the signed checks to be modified without the knowledge of management. Recommendation: Procedures should be implemented that require the signed checks to be returned to another individual, unrelated to the accounts payable process, for mailing. Management Response: Management concurs with the audit finding and will implement the recommended action. 2007-2 Capital Assets Criteria: Internal controls should provide for the proper recording of capital asset disposals and the safeguarding of the capital assets until disposed of. Condition: Each City department performs an annual physical inventory of capital assets and the Department Heads sign off on the inventory sheets, including notations of disposals. The capital asset records of the City's Central Garage indicated that vehicles and other 132 CITY OF DELRAY BEACH, FLORIDA SCHEDULE OF FINDINGS AND QUESTIONED COSTS - FEDERAL AWARD PROGRAMS AND STATE PROJECTS (Continued) Year Ended September 30, 2007 SECTION II -FINANCIAL STATEMENT FINDINGS (Continued) Finding m r Finding 2007-2 Capital Assets (Continued) garage equipment with an original cost of approximately $722,000 were auctioned or otherwise disposed of in the year ended September 30, 2007. However, these disposals did not match the auction proceeds, Palm B each County thrift shop proceeds, or title changes on record with the City Clerk. After further investigation, it was noted that the disposals reported for 2007 actually included a substantial amount of disposals related to prior years that were not properly reported or recorded in those years. Effect: Because the disposals of capital assets were not properly reported to the City's Finance Department, the capital assets of the Central Garage were overstated in prior years and proper accountability for capital assets of the Central Garage was not maintained for several years. Cause: This occurred because inadequate procedures were in place at the Central Garage to ensure that disposals of capital assets were reported in a timely and accurate manner to the Finance Department. In addition, there was no reconciliation of the capital asset disposals with the auction proceeds, Palm Beach County thrift shop proceeds, or title changes on record with the City Clerk. Population and Items Tested: The original cost and accumulated depreciation of capital asset disposals for 2007 in the Central Garage Fund were $722,194 and $656,202, respectively, and the net book value of the disposals was $65,992. Recommendation: Procedures should be implemented that require a capital asset disposal form to be completed for each asset disposal by the Central Garage and other City departments. The disposal form should be prepared for any capital assets that are removed from service, including capital assets that are junked, cannibalized, sold or otherwise disposed of. The disposal form should be signed by the preparer and reviewed and signed as approved by the Department head. In addition, all capital asset records should be computerized on a standard reporting system and all capital asset disposals should be reconciled to the auction proceeds, Palm Beach County thrift shop proceeds, or title changes on record with the City Clerk, as well as the annual physical inventory of capital assets. Capital assets with titles should require an approved disposal form before the title is transferred out of the City's name. Management Response: Management concurs with the audit finding and will implement the recommended actions. 133 CITY OF DELRAY BEACH, FLORIDA SCHEDULE OF FINDINGS AND QUESTIONED COSTS - FEDERAL AWARD PROGRAMS AND STATE PROJECTS (Continued) Year Ended September 30, 2007 SECTION III - FEDERAL AWARD PROGRAMS AND STATE FINANCIAL ASSISTANCE PROJECTS FINDINGS AND QUESTIONED COSTS None SECTION IV -OTHER MATTERS 1. 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I ~~ - + X11 - I F _~ - 1 Jr ^ _ ~ __ 71 ~ ~ ~ ~1 r ~ _ 1~^ i ' ~' { _ r I JT~~ z r .1 ', ~ ~ CCC_ ~ ~ ~~co l~yyJ1^~~y^ _ ~u1~~s~ti ~ , ~ enter t i~e,~~ ~idf.~1 . ^^. ,~IL I - _ f ~ r,~lre"t~ ',_ , ham' n ~ ~ u~l>ru~ ~ _ P~k~ I I~ ®es~ - I :~ ~ - • 1 f_}L,~(}'_-_I 3 ~ -'~ ~ r - - ~ - I _ ~1 .1 _ i 1 _ A 'x'~ III r~~s F ~ 1 . •~ ti 1 ^//~~ ~I l] 1 ~^ 1'. '3f10 I I J ~ ~ ~ ~ 1 ~_ 1J p`. p = I . fy.~y ~~r Yr ~ . 1~ _ 11 ~ ~Ll~ til'r i ` i • 1 1 ^ .C~ 1 +1 ^ ti ~ __~ ~ ~ R rl "I I+,~ 1 I~n~ ^ ~ r ~ '~II i'~ ~.,^ s lei 5 r(,1Gess va~~aT~ 1 _ 1 f1~1 iC`a' _ ~ '}; = 4_~ ?' • ~ ~~ .7 '~ 11- ~75~ Try ~~eC~'~J ~ ~O ~OVa~ll~ - rY - a~ . ~.~ r ' I r - ~ * - _, ~ ~d:T~i~- --J1-y.~~~~.*p~..r.~~,(d~3~~ti~hl~,t~(~}-J~~~-'-r1~~t~all~l~a 1~v1.•~ ~I ~, f `~ _ ,' ~~'.~~{. ~ ^ 1 M ^~^~ - ^_ 'i :~ I I ' - ~7 - I 1 ~ - a Y c - -=~~;•^ 1 F~ 1~~ 1^I - I •1 4 ~ - I = d ~`' = d~rxl l~~ ~ fin, ~ mi~Iistrayt~ ~ist~n1 ~E. T~e`~e ~cl~c la, t, tip ~~ - ' ~ b - bacl~ ~p - um~ I~a~id ~~~~-- ~?~~' ~ r "?~1~ d~ :~o Y ^ 1 -1 - 1 r S • 1 •1 ' 1 -'^,~ 1 I - 1 11 1 I I I, 1 ~~ • 1+ •~ti .- 1 1 1 I E 1 r- .1 tl= ^ 'r.. R 11 r A. FINANCIAL STATEMENT FINDINGS -SIGNIFICANT DEFICIENCIES (Continued) Finding Number Finding 2007-2 Capital Assets Criteria: Internal controls should provide for the proper recording of capital asset disposals and the safeguarding of the capital assets until disposed of. Condition: Each City department performs an annual physical inventory of capital assets and the Department Heads sign off on the inventory sheets, including notations of disposals. The capital asset records of the City's Central Garage indicated that vehicles and other garage equipment with an original cost of approximately $722,000 were auctioned or otherwise disposed of in the year ended September 30, 2007. However, these disposals did not match the auction proceeds, Palm Beach County thrift shop proceeds, or title changes on record with the City Clerk. After further investigation, it was noted that the disposals reported for 2007 actually included a substantial amount of disposals related to prior years that were not properly reported or recorded in those years. Effect: Because the disposals of capital assets were not properly reported to the City's Finance Department, the capital assets of the Central Garage were overstated in prior years and proper accountability for capital assets of the Central Garage was not maintained for several years. Cause: This occurred because inadequate procedures were in place at the Central Garage to ensure that disposals of capital assets were reported in a timely and accurate manner to the Finance Department. In addition, there was no reconciliation of the capital asset disposals with the auction proceeds, Palm Beach County thrift shop proceeds, or title changes on record with the City Clerk. Population and Items Tested: The original cost and accumulated depreciation of capital asset disposals for 2007 in the Central Garage Fund were $722,194 and $656,202, respectively, and the net book value of the disposals was $65,992. Recommendation: Procedures should be implemented that require a capital asset disposal form to be completed for each asset disposal by the Central Garage and other City departments. The disposal form should be prepared for any capital assets that are removed from service, including capital assets that are junked, cannibalized, sold or otherwise disposed of. The disposal form should be signed by the preparer and reviewed and signed as approved by the Department head. In addition, all capital asset records should be computerized on a standard reporting system and all capital asset disposals should be reconciled to the auction proceeds, Palm Beach County thrift shop proceeds, or title changes on record with the City Clerk, as well as the annual physical inventory of capital assets. Capital assets with titles should require an approved disposal form before the title is transferred out of the City's name. Action Taken: The City's Fixed Asset policy requires completion of a disposal form whenever an asset is sold, donated or removed from service. When departments are asked to verify the assets on the capital asset listing, Finance assumes due diligence was performed. This was not the case with the Garage. Most of the disposals in question were in the 1990's and researching the data was difficult. Finance intends to test a random sample of capital assets throughout the year. Management is reviewing options to determine the best method to coordinate efforts between the Garage, City Clerk and Finance departments to record and reconcile disposals. 136 If you have any additional questions concerning this corrective action plan adopted by the City, please call me at (561) 243-7000 Sincerely, ~~ Joseph M, o Finance Director 137 Management Letter Management Letter The Honorable Mayor and City Commission City of Delray Beach, Florida We have audited the financial statements of the City of Delray Beach, Florida, as of and for the year ended September 30, 2007, and have issued our report thereon dated March 20, 2008. We conducted our audit in accordance with U.S. generally accepted auditing standards and Government Auditing Standards, issued by the Comptroller General of the United States and OMB Circular A-133, Audits of States, Local Governments, and Non-Prot Organizations. We have issued our Independent Auditor's 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; Independent Auditor's Report on Compliance With Requirements Applicable to Each Major Federal Program and State Project and on Internal Control Over Compliance in Accordance With OMB Circular A-133; and Schedule of Findings and Questioned Costs. Disclosures in those reports, which are dated March 20, 2008 should be considered in assessing the results of our audit. Additionally, our audit was conducted in accordance with 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 the management letter. CURRENT YEAR FINDINGS AND RECOMMENDATIONS The Rules of the Auditor General require disclosure in the management letter of the following matters if not already addressed in the Independent Auditor's 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; Independent Auditor's Report on Compliance With Requirements Applicable to Each Major Federal Program and State Project and on Internal Control Over Compliance in Accordance With OMB Circular A-133; and Schedule of Findings and Questioned Costs, unless clearly inconsequential: (1) violations of laws, rules, regulations, and contractual provisions or abuse that have occurred, or are likely to have occurred; (2) improper or illegal expenditures; (3) improper or inadequate accounting procedures; (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. The Rules of the Auditor General also require that we address in the management letter any other findings or recommendations noted during our audit. In addition to findings 2007-1 Segregation of Duties and 2007-2 Capital Assets described in the accompanying Schedule of Findings and Questioned Costs, our audit for the year ended September 30, 2007 disclosed the following additional matters that are required to be disclosed. 138 2007-3 Cash Receipts Criteria: Internal controls should provide for the timely deposit of all funds received by the City in order to safeguard the funds and minimize the potential for loss or theft. Condition: Cash of $203 and checks of $1,080 were received and recorded by the Police Department on December 27, 2006 but not deposited into the City's bank account until January 18, 2007, or approximately 15 business days after receipt. Effect: Receipts were not reported to the City's Finance Department and recorded as revenue until deposited into the bank account, thereby increasing the risk of loss to the City. Cause: No apparent reason for the delay. Population and Items Tested: One cash receipt for the Police Department was selected in our random sample of 25 cash receipts for the year ended September 30, 2007. A similar finding was reported in the prior fiscal year as Cash Receipts (2006-2). Recommendation: All City funds should be deposited into the bank within five business days after receipt. 2007-4 Fund Equity Journal Entries Criteria: Generally accepted accounting principles provide that direct entries to fund equity are usually made only for the purpose of correcting errors made in prior fiscal years. Condition: We noted several journal entries to fund equity accounts during the year for current period transactions. While several entries were identified and reversed as part of the year end closing, one was not corrected until after closing. Effect: Beginning fund equity did not reconcile to the audited balance from the prior fiscal year. Cause: Journal entries to fund equity were prepared incorrectly. Population and Items Tested: We noted one entry to fund equity that was not subsequently corrected during the year. Recommendation: Journal entries made to fund equity should require specific approval of the assistant finance director before being posted, to minimize the risk of incorrect journal entries to fund equity. PRIOR YEAR FINDINGS AND RECOMMENDATIONS The Rules of the Auditor General require that we address in the management letter, if not already addressed in the auditor's report on internal control over financial reporting and on compliance and other matters, whether or not inaccuracies, shortages, defalcations, fraud, and/or violations of laws, rules, regulations and contractual provisions reported in the preceding annual financial audit report have been corrected. Additionally, the Rules of the Auditor General require that we address in the management letter, if not already addressed in the auditor's report on internal control over financial reporting and on compliance and other matters, whether or not recommendations made in the preceding management letter have been followed or otherwise no longer apply. We noted that the findings in our prior year management letter relating to Held Checks (2006-1) and Grant Funding (2006-3) were adequately addressed by the City or no longer apply. However, our prior year findings relating to Cash Receipts (2006-2) and Disposal of Surplus Assets (2006-4) require further consideration as discussed in finding 2007-4 Cash Receipts reported above and finding 2007-2 Capital Assets reported in the accompanying Schedule of Findings and Questioned Costs. 139 OTHER MATTERS Consideration of Financial Emergency Criteria As required by the Rules of the Auditor General, the scope of our audit included a review of the provisions of Section 218.503(1), Florida Statutes, regarding financial emergencies. In connection with our audit, we determined that the City of Delray Beach, Florida, did not meet any of the conditions described in Section 218.503(1), Florida Statutes, for the fiscal year ended September 30, 2007. Financial Condition Assessment Procedures In connection with our audit of the City of Delray Beach, Florida, we applied financial condition assessment procedures, pursuant to Rule 10.556(7), Rules of the Auditor General, for the year ended September 30, 2007. The results of our procedures disclosed no matters that are required to be reported. Annual Financial Report In connection with our audit, we reviewed the Annual Financial Report of Units of Local Government filed by the City of Delray Beach, Florida, with the Florida Department of Financial Services pursuant to Section 218.32, Florida Statutes, for the year ended September 30, 2007. We noted that the amounts reported in the Annual Financial Report were in substantial agreement with the audited financial statements for the year ended September 30, 2007. Investment of Public Funds As required by the Rules of the Auditor General, 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 Delray Beach, Florida, complied with Section 218.415, Florida Statutes for the year ended September 30, 2007. This report is intended solely for the information and use of the City Commission and management of the City of Delray Beach, Florida, federal and state awarding and pass-through agencies, 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. ~ , nom,,, ~.~, March 20, 2008 ~ (/.u,~ P. A, 140 ~I ^ii' - ~'tlf4~ - ; "lo---~ J T l l r I~7R ^^ ' ^ y! 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I ~, ~~~4X-s a ~ ~ .~ -1 y~.J1 J~^I.I~_Y •1 ry -~:~I JL1 I„1 ;-a ••~~" -_~~~ti'~.1•' -F~--- ~~ ^^~~'~~^^^ccc"1LL~~~'444~~ ^ ~ Y ~ ~ ~z_ ,~,~-/yL-l• ~^ ^ I _ 1' ~ ~~ ~ 1 --~ r€ ^^^^^^^^^^^^^^ 7777777777777777777777_7 _ _ ~ -~•~ I ' ' 4'•'; I 7I -. ~ •~~L- • doh: audgen07" ; - „ _ ' ~ w 1 _ ~ ^~ i~ i ^} ~/ ~~ , ~.^ ~~ r ~ ~"~'~~ ~ 1~~ A~ +~ E's ~ r i r `~4 ^ 1 ~_ ~L. p -Y I LJJ.~' ~~5+ ~>X. ~F ~I -~ ~i' 1 ^ 1 i] I~~ ~. ^~11 II~ It ~- ~ 1~~~ t'-_ I'4 • ~ ^ IiF: ^~ ~ • _ "~4 ~ ~ 1 -~~~~ ' '•~ ~ III ^ ~~~s L^^ = rY. •.^ I ~'7~ ~ :~ I ^ s "' ' -'' = MEMORANDUM TO: Mayor and City Commissioners FROM: Robert A. Barcinski, Assistant City Manager THROUGH: David T. Harden, City Manager DATE: April 1, 2008 SUBJECT: AGENDA ITEM WS. 3 -WORKSHOP MEETING OF APRIL 8, 2008 RECOMMENDATIONS FROM CREATIVE CITY COLLABORATIVE ITEM BEFORE COMMISSION City Commission is requested to review recommendations made by the Creative City Collaborative Organizational Committee concerning the Cultural Plan and to provide direction. BACKGROUND When Commission met last October with the Creative City Collaborative Organizational Committee, you requested that they review recommendations in the Cultural Plan and provide their input and recommendations. The CCC completed their review of the Cultural Plan at their meeting held on February 20, 2008. Attached is a summary of the CCC's recommendations, which all members present at the February 20~' meeting confirmed in March. Creative City Collaborative Committee members will be present to answer any questions you may have. RECOMMENDATION Staff requests that the Commission provide direction after review of the CCC Organizational Committee recommendations. Summary (based on 2/20/08 meeting) Creative City Collaborative recommendations on the Cultural Plan recommendations: 1. Cultural Plan Recommendation: Incorporate CCC with it's own by-laws as an independent non-profit organization. CCC -The committee agreed with this recommendation. Members felt there may be an opportunity in the future to fund raise and then be able to distribute grants to cultural groups. 2. Cultural Plan Recommendation: CCC to serve as the cultural umbrella organization for directing City's cultural vision. CCC -The organization committee agreed with this recommendation. 3. Cultural Plan Recommendation: CCC to review and make recommendations to the City on annual budget funding/requests received from cultural organizations and event producers. CCC -The committee does not agree with this recommendation. They feel in light of tax cuts and lack of staff support, that this is more appropriately handled by the City Manager and his designees. 4. Cultural Plan Recommendation: Plan recommended that the CCC raise funds from the private sector or through grants and then if funds are raised make grant awards to cultural groups. CCC- The committee agreed with this recommendation feeling they could assist in grant writing if needed, using the E-Civis resource. 5. Cultural Plan Recommendation: Marketing and Communication: The plan recommended that the CCC be responsible for creating a cultural brand in website redesign and serve as a marketing resource center for cultural facilities and event producers. CCC -The Committee does not agree with this recommendation. As far as the website recommendations were concerned the group felt that individual cultural facilities already had their own websites and that the Chamber of Commerce, City, Downtown Marketing Cooperative and CRA had integrated their websites. At the most they might recommend areas to improve the cultural feel of the websites through links with the City's website and provide possible ideas. Concerning the recommendation that the CCC serves as a marketing resource center, the committee indicated that each major cultural facility already had their own marketing staff or contract staff that did a good j ob and as far as downtown C:\Program Files\Neevia.Com\Document Converter\temp\PDFConvert.1600.1.Summary 2.20.08 Meeting.doc cultural events the DMC was fulfilling this role and was available to assist if asked. The committee felt their role should just be one of facilitator getting the various groups together to talk to see if there were some shared marketing opportunities among groups. The Committee felt that without a staff it would be very difficult to carry out these tasks as recommended in the cultural plan. 6. Cultural Plan Recommendation: Mayor's Awards for CreativitX. Recommended a Mayor's Award program be established and administered by the CCC. CCC -The committee did not agree with this recommendation feeling they would need staff to carry this task out and it would be too much effort for minimal impact. 7. Cultural Plan Recommendation: Recommended that the CCC evaluate and explore the feasibility of strategies for establishing Delray Beach as an artist friendly city. CCC -The committee agreed with this recommendation. 8. Cultural Plan Recommendation: Recommended that the City establish an artist co-op. CCC -The committee agreed with this recommendation citing the Cannery Row agreement as the first step taken. They did feel that the CCC could and should explore other options and strategies for this recommendation. 9. Cultural Plan Recommendation: Create a bank of business resources serving as advisors to cultural groups. CCC -The committee felt without full time staff this was not feasible and perhaps these groups could tap into SCORE. 10. Cultural Plan Recommendation: Animate Old School Square site making it more vibrant, animated and aesthetically more attractive and expand its programming. CCC -The committee feels this recommendation is not part of their tasks and is being handled through the Old School Square Park Master plan and the Old School Square Board strategic planning process. 11. Cultural Plan Recommendation: Develop a nationally or regionally renowned African American Festival with more impact and national significance. C:\Program Files\Neevia.Com\Document Converter\temp\PDFConvert.1600.1.Summary 2.20.08 Meeting.doc CCC -The committee felt they could be a resource if requested, but that this recommendation was best left to the Roots Cultural Festival Inc. to carry out. 12. Cultural Plan Recommendation: Provide a start up budget of at least $150,000 for the CCC and hire permanent staff. CCC -The committee felt under current fiscal constraints, this was not feasible. 13. Cultural Plan Recommendation: Have the CCC screen and make recommendations for cultural grant funding requests. CCC -The committee did not agree with this recommendation and felt that this task would require full time staffing. 14. Cultural Plan Recommendation: The City should create a program to allow utility customers voluntarily donate $1 or more a month to local cultural development. CCC -The committee agrees with this recommendation. 15. Cultural Plan Recommendation: With funding availability through the Art in Public Places program more attention should be given to art that has greater impact and presence. CCC -Although the committee did not necessarily disagree, they felt this was the responsibility of the Art in Public Places committee and not the CCC. 16. Cultural Plan Recommendation: Consider purchase or loan of professional art for display in City Hall. CCC -The committee did not feel this was a high priority, there were no funds to purchase art but thought loan programs could be a possibility. 17. Cultural Plan Recommendation: Expand City wide (Parks and Recreation) concert series to other locations in particular the grounds at Old School Square. CCC -The committee did not disagree but felt finances were limited. 18. Cultural Plan Recommendation: The plan did not recommend a major capital investment in a performing arts center. CCC -The committee agreed with this recommendation. 19. Cultural Plan Recommendation: The plan recommended the development of a narration project focusing on art, culture, and various ethnic groups in the City. C:\Program Files\Neevia.Com\Document Converter\temp\PDFConvert.1600.1.Summary 2.20.08 Meeting.doc This would involve the development of a narration video or CD which could be broadcast on the web or other means. CCC -The committee supports this recommendation. C:\Program Files\Neevia.Com\Document Converter\temp\PDFConvert.1600.1.Summary 2.20.08 Meeting.doc MEMORANDUM TO: Mayor and City Commissioners FROM: Randal L. Krejcarek, P.E., LEED AP, City Engineer Richard C. Hasko, P.E., Environmental Services Director THROUGH: David T. Harden, City Manager DATE: Apri13, 2008 SUBJECT: AGENDA ITEM WS. 4 -WORKSHOP MEETING OF APRIL 8, 2008 POLICY FOR TURNING PRIVATE STREETS AND DRAINAGE OVER TO CITY ITEM BEFORE COMMISSION Requesting direction regarding whether to consider accepting the private roads and drainage in Highpoint Sections 5 & 6 per the current policy. BACKGROUND The attached policy, written in 1993, provides a procedure for turning private streets and drainage over to the city for perpetual maintenance. Over the past 10 years, several communities have inquired about turning street and drainage maintenance over to the City but none have followed through. The last community to turn streets and drainage over to the City was Rabbit Hollow in the mid 1990's. Recently Highpoint Sections 5 & 6 have begun the process of turning their roads and drainage over to the City. Highpoint Sections 5 & 6 are condominium communities and neither was ever platted. Therefore, unlike a traditional platted subdivision, no tracts were ever identified for street purposes nor were drainage easements ever dedicated. Attempting to carve out public right-of-way and drainage easements within a condominium community may cause other issues such as non-conforming setbacks. Before we invest a lot of staff time and Highpoint invests in creating rights-of-way and easements, staff would like to know whether the Commission is willing to seriously consider requests such as the current one from Highpoint Sections 5 & 6. '~ gi pca~ie~r gov~arn.ng pracs~dures and requir~mants gar City aptance of ~air~tenanaa r~aponsibilit~ ~cr private gaadt~asy~/c~rai~xags ~s}~t~ams. Aupar~4 b, 9943 cRwtaad a.c.++~r~ a9, 9993s r Ceot~on ~. Tr~itia~tiat~ a~ Requ~eat .. ~act~.om ~~. prelimir~axy st~a~~ [teviaw . ~ectiox~ III. danaral Submittal ;~ac~uireme~nt~ ' Bactiofl TV'. ~'3.nal St~tf~ Re~riewr Smcticx~ v, pity Ccmmi~aicn ~ppra~a~. i~igu~~ 1 Requis~ed I~ceu~ntatior~ Checkl~.st ~•d ooze l~r~s~~ dH wdss=s ~an~ ~~ ~.~w s. =m~.tiatias~ of ~ea~usst ~. Any Ha~aecrwners' ~~oo~.at~.on ha~ain~~ ownership anti prisaary aresposle~ibility for saaintes~anae saf ;a ~°om~dwayjstore ds"a~,nage system and desisotas of tsansfe,rring that s~a~.sstenano+a rec~pransibil~.ty to the City, shall ~stabs~it in writing to the City tanager a request for the Cit?~ to assume maintenance cf the ra+~dwayjstorrn drainage sy~stesa. Requests sway be submitted fc~r roadrraya gnly, d€r~sinsge systems only as- combined roadway and ds~ainage systems. ~. The request shall be signed by an ®fficex of the Association and shall be a.coa~apazsied by a s'esolution by the Association suthori~ing the s-west. C. ~'he s°equest shall apecifiy the naz~~, address and day time t~le~ rusmber of the individual{e} that city staff wild contact for inf~r:rmation and notific:a.tion. D« The request shall identify tE~e limits of s'.`oad~ray/drainage syste~ts for which transfer of taaintenanee responsibility is beine~ caught (subdivi~sian name, plE~t name, street nasnes~ . ~. open. water bcsdy elements of su~°facs water management systems (Q~FiAIB` 181Ce8, @tC,°. ~ will not be cansidered fOr City sna~.ntes~as~ce or awnership. ~~® Prelimiaa Staff R~a~riex ~!. City° staff wi31 conduct field irsspectians and rQvisw available city records regas^din+g the roadway/drainage system isx questi~an. within thirty (3oy days of receipt ®f a written xecguest, ffitaff gill notify the A~sooiatfart, in writing, of the documentation astd u~aterials s:equired ~.o be ' su~aitt+ed to th$ Ci.ty by the As~~sociation for detailed review ®f th+a re est. lx- general, necessary docust~er~ta~tioss will consist of ~temg listed in Seoti€~n 111 hereafter. The checklist on Figure ~. will b+~ us+~d by staff to identify documexxtatior- "era tileei in City s:escords, 9trequired _ cf applicant" for submittal, ass "not requiredt' for evaluatian of the r®quest. Submittal date r®qu~.d from the Associr~ti~as°~ will be determined frc~sn figure 1. Page 1 ~•~ ~a~s l~ca~s~~ dH wd~=s ~aa~ ~~ hew R. t+tateriala and dacu~tantatian raquir+~d far tirtal. evaluation ag the rcadwayjdrainagre systems b~ staff` wi~.~. gettera~.ly ec~nsi.st of ~.he fta~.lcrwiag: . .. ... .... -~• A i1V~. 6. M~ ~fiV~~Mt~V#F W~ t~~ ~rVad~a~~dra ~iiW~G-~..,.~.- _ .s systeat prepare~9 and certified by a prc~fessic~nal +~ngineer x`egistered in tae ~t~~ate of Flarida. Thin report shah. carttainp as a ~fi~imut~: a. 14 de$cription cf the ~°aac~wayfc3rainage s~rstem. stat3.ng thse age of the ;faciliti~ee, ~aint+~nan~ that has beem perfsar~ed ~r~.nc+~ the construction of the facility and an c~yinfon of the ava~rali c+~nditian cif the ~scil~,t~ ane~ its ~.evel cs~ cantormanc+s with cit;~ of De~,ray Beach Canstructinn ~tandarc~s ~'c~x similar facilities. b. Results of material thicl~ess and density testi~-g o~ ~caadway surface and betee courses ae detex~ined frame care samples and density tests takes at ma~ci.mu~t ~Op feet interva.~la alternating across the roadway typical section. Z. ~apyat the - ~reccard plat t~~ the ~su,bdivits,~.c~r~ or aal7da~MI~I1ti~ul~l~~.CL1]S~eYBt~p~~ t~pplic~sle~ ~bt~~,iaF~b1B ~~.`~~ l~alffi Beach Caunty Offic~.al Rec.ards, Pa~.m Beach Gs~urtty Gaurthouse. 3. ' t3Tie set of ~as•~bu~.~.t~r dxa.winc~s cf the facilit~,es to inCl~a~: a. Lacations, di~censinns ,a~td materials of starm draimac~e pipes and stx~uctur+es, including sixes of pipes. b. Typical section of r®ad~ray including dimensions artd crass elopes of pffi~veffient ~ lez~es f a~r~tlaa, sidewalks, orbs ~ c~+u~tters a~xd atabilixed shocal,d~-rs as a~+pl~.cable. C. R+~rixc~ntal q8®~RBtry of lCaa$tio-sy G3'T'~eY°~.~P1C?, el, 11.1 utility easements ~nd~acent to nor crossine~ roadways. e. ~I.1 pavement markings and traffic sic~nage. Page 2 fr•d [10~E i3C2~3S~J~ dH l~dL~=6 9C1G1~ IE r4~iW ~. ~, oogy ®f all s~railable constr~,ct~.an permits !or construction of the roadwayjd,~e~ainagt system, ~..+~. Palm $eaClt Ct?unty, l~ka Worth D$°airlakgA ~3ist;rict, South Florida Water l~aa~agemsnt District, Florida t'7~partanertt at' r~v,ironnner~ta~l gProteotion~q ~~gflca A~~pa:r~tga~ent esf Environmental Regulation) y V a i~ • Yu„Wy iro!"p~ o~ Engitl@~3Z"~, etc • ~'C2r Yit~'ifiGation, of permit requirements pertaining to systems operation artd ma.inte~nce . ~. general res~uire~aent items listed- ~.~~ Section A may be waived or additional items required by City staff open preli~tinary revitw of th+~ written regtaest. ~Ctems ~"equired ta~om the. Association will bra identified on the checklist ort Figure 1. C. The paokaga €~f required drscum+~,tati.ora shall 1~e ~subt~itted to the City by the Assoc~,ation wit2ain n~.nety (~a) days of issuance of the written staff ~r+aspcnse detailing the specific content of the package as determixted by preliminary staff rtview« ~~. ~iii~S 8~".af~ ~q~~~R ~. Upon receipt €~~ required ctocument.atian as listed for the agplica~tion on Pigott 1, City staff will reaeiew all. submitted materirals fnr compl3.ano~s with City construction standards for ~"o~-dr~ayjdrainage systescs . 8. ~ithStn thirty (3f~ j days of receipt: of a submittal package, staff will prc~vicis a ~rritttn state~~tent of findings to the Assc~ciatior,. This statemeatt shah. identify arty requirements necessary fnr re~n~edial constx~xctior8 or ma~.ntenaace andl shall list all final ]legal documentation fi.e., easements, right-of-way deeds, etc.3 required of tht ~issaciation to accom~aodate City ar..ceptance of th® roadwayjdrainage system. C. Any remedial work required to upgrade the randy/drainage system to a sacti.sf`actory candition as d+~terrmi,ne~3. key st~sff aea2uation shall be perfox~ted by the Assnciati.oxt at its +~xpense. ~. A1l legal documentation necessary to aacommadate City acCe~ptance of the roadwayjdrainage system shall be prepariad by the Associ.+atian at its txptnaa and shall. be raviewsi~ by the City Atto~°ney prier to glacemt+~nt an an agenda fear City Cos~aaission appro~rtal.. Page 3 ~ "~ [~[7~E 13f'?~3SF~1 dH 4~~3LS ~ 6 9C10~ T ~ },f~W ~'~ ~i~y ,. ~ rrian ~gpx°~°~'at ~. UpOri iesuaa~~e E>~ ~ ~~al~ etate~te~~tt ~~ ~ircd~.ng'~ ~ sta~~ w'i~.~. place the are~t can tha raxf~ av~~~.lah3e City ~ci~sicsr~ AQeIidB fix ccat~eide~atian. $~&iC~' Amy Y°t~CO~t9d tt18['~ Cc~nission acc~a~t mai~a'~anance ~i~ ttae road~+ayjdxei~.n~c~a s~rstaffi, wept aainter~ce r~onieingent upc~ the ~~ Asaocia~icrt' ~ ciacumer~ted ~ca~tple'~ican ~ any- ne~e~ts~~y s~eyaed ~ .a~. w®r1t to x~p~ra cl a ~i! st~ ject ayste~ tc at+~~~-ta~ia ay , ,~ y y ~°®n~S4~~~~r QZ' re~~~t W~7~~ ~B~~bn $. $ta1`f , ~~C@~ttd~l'~~.CiH'1lpl ~h~~.~. ~® sp~~aiti~d fn ths~ ~t~te]~s~rit ~~ t~,ndings grcav3.ded to th+~ ReasacjL~.tican. ['. • Thy e~-ciatian, Qt ite di.ecret f can P a~~ay Abut Gr s~~k ~e~.iet ~xcm any r~a~i~'e~~nt~ c:car~ined in, the ~tat~ etz~~+~teaxt, eel tindi~iq~ ifl trie ~o~~ ®~ the pity Ci.~aiarn ~~~t i~ 6 D. The City' ~ reapor~~ihi3ity tc~~ mairatenas:ce cs~ any ~t~~,dwal-/d~aiaa~e~e ~sy~t+am ~ac,~ir~ ~atnr~er this pa~,i,~y shall heaome eE~~ct~.ve upon n~~iCiai x~aptan~e by the ~3ty Ca~amia~irar~. ._~ ~.._ F~ge ~ s•d ao~e ~~r~~sd~ d~ ~adc~s~s soQ~ t~ ~~w p~~ t REQU'I9 ~C~2~NT~iT~®I~T Ci~(`I~I.IS~° ~e~cj' d of I+1ot ~~ ~ ~®rtiti~ed sragineering resort ` Cll C] t] containing: ,~ dmscriptian ®~ the C'I t] t] ro~ad~ray~drainage a~~t~s~t. Rge of the facilities, [;~ [] [] Mairateaaance paerfcrmed einae [ ;II C ] [ ] ctsnetrtiction, . op~.nit~rt ~~ overall e~estena C :S [ ] L 1 condition, Levu, ®f can ~ormaartoe with City C..I [ l L ] ~ ~~~~t~c{.i©~ ~tandarde ^ ~esulte cf material ti~ickness and dereit~r testing of ~ . _ road~ra~y C] [] CI surface grad base courses asp dete~iraed a~a"°o~a core samples end density teata~ taken at meximu~a god feet intervals alterra~a~irag acrr~~ae 'tka,e road~re;~r typical section. Copy of the raCex'd plat cat the [; ] [ ] ~ t ] subdivfaiaa~ aa~ c~ondamia~ait~za dacumeaxts, as applicable, set of sae-~lbuilt" drawings eaf the c~ane !:'1 t 3 L 7 gy tt! ~.naludea: gacblit i ee ~~ {~ ry~®yy py~gpJ g~p~q~ g ~Mll~' LoVf~ ~M ~ ~ikk~i i~ ~~i /A i fi L7 i~{A yy Is J ~ ~ ~ ] •yy• yy ~~-- y y y ~p { q ®® y ~1 2Y~t'~r $Y6~~ o~ Vti/ ~i ~~Rif3~4 ~i~~ ?d~tLt~'~t~~ ~.ttC3.t3d~n~ ~~.~~ ~ 3 7d Str ~$ ~ ~y V L ~ ~ ~ ~PP y ~ y q}~ /~ qg 4.' p y i~p~bf~~L ~~~t~VfrA V~ rVWdR~~ ~L ~ p ~ C t~ inc3udirag dimensi®nss and, crass. - _ . slopes of pa~re~ent, lames, s~rales, eidewal~, rl~a ~ gutters axad stabil i~ad shcauldsrs as app~,~,cable. lol ~, ~ d none l~ea~s~~ a~ wt~~.s . s ~o~~ ~ ~ ~,~w ~'I~ ~. ~QUIR~~1 DQCUM~AI"P1'A'~7Ct~t~ ~HEC~S`l' Reed o~ ~Iot ~~ ~p~.icant ~e~+d ~ 4 ,, gg~} yy yy ~g y a d r $ ~ ~ ~I F s Q ..I. ~~~~~t~ ~~ ~oad~ay y [ 1 [ ~ [ Jg /g ® g q g ,~ o ~ q VB~fiti k Jfe ~ d~/ f~ P j~ y ~ gp Q q p~{ y~ q py ~~~ Mt~~~{ry ifiQ~~~bit~ ad~~V~ilt tV Wi [~ [~ [~ crossing road~arays. Ali ~pavema~-t ~aarkings and tra.~~ic [ ]E [ ~ [ ] s ic~nac~~a.. A coy o~ all availab~.s construction []I [~ [I ~~ to far constrtaction a~ 'ttte raadway/drainage: system. ~ddition~al dcmentatian: [7i [7 [] [~f [~ [] [~I [~ [] C7 [3 [] []I t~ C] Ths pac}cage eat rec,~uired dcacumaattation ida~ntifietd above moat be s~xbx~i,ttadl to th+e pity by the 14~ssociation ~ri{khir~ ninety (90) days ct issuance o~ the vrritten ata~t response. 1.~ g •d t~©2E lC~{St~~ dH Wt~GS ~8 9~Q~ i~ l.d ~~ - ~ a a _ ~ ?r $ ~~ J v o s ~ Sry ~ i ~~ ~ ~: N_ N~ h'S k F '^ a e vm a as 0 ~m ~~ ~ - ' M ~ , ~ - 8 V~~. ' a xix % ~ ~ o i~ 00 ~ n __ o~ __ ~ _~ _ ~ m ~m ~ _ -- M; ~ ' <a I .~ ~I~ <~ ~_ ~~ - ~~ „ ' e - - ~ po no ~ o ool , e l o^ mo co ~o o~ ~~ e~ ~e ao °m x< ~o ^c tia -- -- ~ ° M oM n - Y ~~ `~8 i Z ~ p ~ =~z~ ~ _~ o~ cnu- ~~~a~=waw ~z Zo ~~wg w~~~ o °- O ~- ~=~03 ~O w~ a~~o ion ~N ~ ~_ gym' l Is % o. = xo I^ t ~yd ~.a-+ g j j_ 0 ~y*~.~~~~ F ~~ ~ ~ ' +1 [~ r. 'g~ 6 ~ w ~~ L.~~ d ~ oFd ~. O~ t' W F ~ ~ -L) .. F+ n N ffI F^ m~ (N a~8 ~°,, ,~ ~L"_'~I u~ m _-~ssQ ,. ~ ¢ z Qua ~ ~-,..-.fig _: o ~ ' i 4 ,.. >and,~a :os'v -.~ :: ~ N~'f®- ~ $ . _'^ _ 5~a .yam, .. gg I ~I I~ R S °m 1 ~ ' ~i ~~ n ro ss 90 f 4 N,o ~ ~ a ' rn ~N n ~o w '~ n 'O - ~ 3 ~ ~. A ..~ ;~ 0 ~~a Z o n ~ .h ~_ . _ ... - - ._ _--- - t ~ I~j w. t N ~ firt M~ n ~ ~~- ~-a6¢: _ w O J dS ~ ~ ~L_~ 1~BI~dy1 . i. ~ ~ ~ -- ..~ ~ ~ ~ ~ S~ ~ 1 ~ 'y`ew. ~aey 5. n.c V9Mb'a32 7 c~1 L g t ~ ~ r 1 ~ ~~.,.,Q aaY LLL~~~'''~~~LLL1 r O ~ ~ x <' rTi /) _ r Q ~ ~ a L d . J N - -. ~ i.- .~ ~_ _ rtl a 3i a~ _ 9'w _ i , ~ - ~~~, `; em i '.1 ~ 111!1_ ! _ . n .,.. `as. v < Y ~~ YtroOab+.af ~ ~ rr~ ~ E ~ ~. o x~' ~~ - le7~ R~ xl.~J"` n~~~ h -- ~. c o ~ ~ ~ rt„T-,. n~ ~ ~- a o ~ ~ ~ < w F __ _ '- _ _ ___~S _~ -ems- ~ ~ D F 4 c~w~~ z f _ __ ;-_ et` _ T 8 ¢o4~O¢w ~~ttyy rn zw o¢c • r Cfl V, ~~ U Cn ~O Qo ~_ ~ M c- ~ V ~~ ~o _ ~-~~ •~ oLL - a ~ ~ m 0 0 N ~~~..~ MEMORANDUM TO: Mayor and City Commissioners FROM: Robert A. Barcinski, Assistant City Manager THROUGH: David T. Harden, City Manager DATE: April 1, 2008 SUBJECT: AGENDA ITEM WS. 5 -WORKSHOP MEETING OF APRIL 8, 2008 PROPOSAL - AUDIOVISUAL EQUIPMENT CITY HALL ITEM BEFORE COMMISSION Attached is a proposal to replace audio/visual equipment in the Commission Chambers, Chamber Ante Room, Lobby and First Floor Conference Room. This proposal was prepared by Charles Furment, our Office Automation Analyst, who has been working with various A/V consultants and equipment vendors. The proposal also includes a PC for use in the audio broadcast of City Commission meetings. Staff is seeking feedback from Commission on this proposal. Charles will make a brief presentation and answer any questions you may have. Proposed A/V Upgrade in City Ha11 This proposal consists of upgrading the A/V equipment in the Chambers, Green Room, aver-flow area outside of the chambers, 1St floor Conference Room & the Emergency Radio Station. Itemized List for the Chambers: • Audio Mixer • Audio Amplifier • Projector • Projector Mount • I2' x 12' Projector Screen • Rack • Rack UPS • 3Live-Stream Camera UPS • A/V Sputter • LCD Closed Caption Monitor • 4 Ceiling Speakers • Public/Presenter Podium • A/V Feed for the publiclpresentations • Hearing-Impaired Wireless system • Cabling Itemized List for Green Room: • 37" LCD TV • TV Mount • Anti-Vandalism Protector far LCD TV • 1 Ceiling Speaker • Cabling Itemized List for Over-Flow Area: • 3 Ceiling Speakers • Cabling Itemized List for I st Conference Raom: • Projector • Projector Mount • Projector Screen 8' x 8' • Conference Table Cat6 Drops • 1 Ceiling Speaker • Cabling Radio Station (Fire Station i ) • Web Broadcast PC The total amount required for hazdwaze/install is $48,997.14 After much deliberation, IT has come to the consensus that hardware must be purchased in-house. After numerous quotes and my personal dealings with A/V consultants I can attest to signiftcant mark-ups on hardware, anywhere from 15% to as high as 30%. We may even get the install numbers down if we collaborate with Public Works on the install of the Screens and TV Mounts. Public Works proved essential to getting the new ESD building up & running on those last days and did an excellent job. I truly believe the more that is done in-house the more the city can save from this project. ~f the fore-mentioned total approximately $38,200 is for hazdwaze the rest is install.