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05-18-10 Workshop Meeting~~~l.RAY BEACH CITY COMMISSION ~~-M~ericacity CITY OF DELRAY BEACH FLORIDA ~ f WORKSHOP -TUESDAY MAY 18 2010 6:00 P.M. FIRST FLOOR CONFERENCE ROOM 1993 2001 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, ox activity conducted by the City. Contact Doug Smith at 243.7010, 24 hours prior to the progratn or activity in order for the City to reasonably accommodate your request. Adaptive listening devices are available for meetings iri the Commission Chambers. WORKSHOPAGENI7A 1. Police Vehicle and Seized Weaponry Presentation 2. Presentation of Comprehensive Annual Financial Report Fiscal Year ending September 30, 2009 3. Presentation by the Beach Property Owners Association {BPOA} of a Beach Master Plan 4. Presentation of the Community Redevelopment Agency's Economic Development Yncentives S. Presentation of the Joint Participation Project at Lithe Fenway Park 6. Status Report on Waste Management Review 7. Commission Comments a^ a ^E~~~e~rra~e~~~~~~~r~~s~~~~R~~~rr~~~~~~~~s~rr~~~~~~~E~~~~~~a~rr~~~~~~~~R~~~ 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. Page 1 of l MEMORANDUM TO: Mayor and City Commissioners FROM: Thomas J. Mitchell, Community Response Division Commander THROUGH: David T. Harden, City Manager DATE: May 11, 2010 SUBJECT: AGENDA ITEM WS.1 -WORKSHOP MEETING OF MAY 18, 2010 POLICE VEHICLE AND SEIZED WEAPONRY PRESENTATION ITEM BEFORE COMMISSION The Delray Beach Police Department would like to display the two new styles of police vehicles being used for patrol, highlighting the modifications that must be made to the car and the equipment the officers must carry. Additionally, the Chief of Police would like to display an array of firearms that the officers have seized during their toux of duty. BACKGROCTND In order for the officers on patrol to stay current with technology and prevent the equipment installed from being vandalized or stolen, the standard Ford Crown Victoria and Chevrolet Impala must be modified. Custom made door locks, center consoles and reinforced tail lights must be installed prior to a police car being issued fox patrol. The modern day police tax is now equipped with a laptop computer, radar gun, in-car video cameras, recharging devices for Tasers, flashlights, and other computer equipment. These vehicles also contain patrol rifles, field force gear and Haz-mat protection gear, malting the modern day police car a target for theft. Additionally, officers on the street are once again facing well armed criminal enterprises. Offenders are arming themselves with assault rifles, armor piercing bullets and firepower that will penetrate vehicles -some of which has been seized by our officers. Page 1 of 1 MEMORANDUM TO: Mayor and City Commissioners FROM: Milena L. Walinski, Assistant Finance Director Joseph M. Safford, Finance Director THROUGH: David T. Harden, City Manager DATE: May I1, 2010 SUBJECT: AGENDA ITEM W5.2 -WORKSHOP MEETING OF MAY I$, 2010 PRESENTATION OF COMPREHENSIVE ANNUAL FINANCIAL REPORT FISCAL YEAR ENDING SEPTEMBER 30 2009 ITEM BEFORE COMMISSION Presentation by Caler, Donten, Levine, Forter & Veil, P.A. of the City of Delray Beach Comprehensive Annual Financial Report (CAFR) for the Year Ending September 30, 2009. http://miweb001/A~endas/Bluesheet.aspx?ItemID=3320&Meetin~ID=294 5/14/2010 . ,;:~ .., COMYREHENSNE ANNC]'AL FINANCIAL REPORT City of Delray Bead, Florida Year Ended September 30, 2009 with Report of Independent Certified Fubfic Accountants Comprehensive Annual Financial Report City of Delray ~3each, Florida Year Ended September 3d, 2009 with. Report of Independent Certified Public Accountants Prepared by the Finance Department Joseph Safford, Director Milena Waxinsl~i, Assistant Director Rebecca O'Connor Mary Ann Young Dolores Egan Maureen Owens Lisa Hartman City of Delray Beacl~t, Florida Camprebensive Annual Financial Report Year Ended September 30, 2009 Contents I. INTRODUCTORY SECTION Transmit#al Letter .......................................... Certificate ofAchievemsnt ............................................................................................................................................i ... _ List of PrincipalOffi .........................................................................................................................................vtn vials . City of Delray Beach Organizational Chart ....................................................................................~...---..................._...ix •--• ........................... x II. FINANCIAL SECTI©N Independent Auditor's Report Management's 1'liscussion and Analysis .....1 ..... ... ................................................................................. ........ ............. 3 Basle l:{'inanciai Statements Government-R'ide Financial Statements Statement of Net Assets ..............................................................................................:............:...:.:.........:............... l7 Statement of Activafies ............................................................................................................................................. ] 8 Ind )H~na~tcial Statements Balance Sheet - Governmental Funds ......................................................................................................... .l9 Reconciliation of the Governmental Funds Balance Sheet to the Statement of ......__... Net Assets ................................................................................................................................................ .2© Statement of Revenues, Expenditures, and Changes in p'und Balances Governmental Funds .............................................................................•--......................._.....,..............................21 Reconciliation of the Govexental Funds Statement of Revenues, Expenditures, and Changes in Fund Balances to the Statement of Activities .............................................................................22 Statement ofNet Assets-Proprietary Funds ...........................................................................................................23 Statement of Revenues, Expenses, and Changes in Net Assets --)'zoprietary l unds .............................................................................................................................................................. ..24 Statement of Cash Flaws -Proprietary Funds ............................................................................... .25 Statetxient of Fiduciary Net Assets -Fiduciary Funds .............................................................................................26 Statement of Changes in Fiduciary Net Assets •-- Fiduciary Funds ..........................................................................27 Notes to T+inancial Statements .................................................................................................................................28 Re aired Sn lementa Information Budgetary Comparison Schedule -General p'uz~d ...................................:...............:...........:................:..................67 Notes to Budgetary Comparison Schedule ...............................................................................................................68 Schedule of Pension Funding Progress ....................................................................................................................69 Schedules of Employer and State Pension ContrCbutians ........................................................................................70 Combinin And Individual Fund Statements And Schedules Non-Major Governmental Fends I3escriptions ........................................................................................................ ..............::...................:................7I Combining Balance Sheet ........................................................................................................................................72 Combining Statement of Revenues, Expenditures, and Changes i^ Fund Balances ................................................73 Gity of Delray Beach, Florida Con2prehensive Annual Financial Report Year Ended September 30, 2009 Contents 3;I. I+'INANCIAL SIs CTIQN (Cantinned) Non-lYiajar'Enterprise Funds Descriptions .............................................................................................................................................................74 Combining Statement of Net Assets ........._.._........ ............................,............_..._............_.._.._..__..............................75 Combining Statement of Revemses, Expenses, and Changes in Net Assets ............................ ................................76 Combining Statement of Cash Plows .......................................................................................................................77 Internal Service Inds Descriptions .............................................................................................................................................................78 Combining Statement of Net Assets ........................................................................................................................79 Combining Statement of Revenues, Expenses, and Changes in Net Assets ............................................................80 Combining Statement of Cash Plows ....................................................................................................................... 83 Fiduciary Funds Descriptions .... ............................_.._..._..........._..._...................................._..........._......._...._..._....._..._......_....-•--•--.......82 Combining Statenrkez~t of Plan Net Assets _ Pension Trust Funds........... .................................................................83 Combining Statement of Changes in Plan Net Assets -Pension Trust Funds ......................................................... 84 Other Sunnlenaeutarv Information General end Schedules of Revenue and Other Financing Sources --Budget and Actual ...................................................:..:...... 85 Schedules of Expenditures, Encumbrances and Other Financing Uses -Compared with Appropriatians ...................................................................................................................................................... 87 Debt Service Requirements Summary Schedule of Debt Service Requirements (Principal and Interest) to Maturity .........................................89 Combined Schedule of General Obligation Bond Debt Service Requirements ..................................................... ..90 Schedule of General Obligation Bonds (Series 2042)....... ..................................................................................... ..91 Schedule of General Obliga~ou Bands {Series 2004}.... ................................................._....._..._............._.....__.._.... ..92 Schedule of General Obligation Bonds (Series 2005)...... ..................................._........_.._.._.._...__........................... ..93 Combined Schedule ofRevenue Bond Debt Service Requirements {Principal and Interest} ....................................................................................................................................... ..94 Schedule ofRevenue Bonds (Series 2404} ............................................................................................................ ..95 Schedule of Utility Tax Revenue Bonds {Series 2002) .......................................................................................... ..96 Schedule ofRevenue Refunding and Improvement l3nnds (Series 2003) ............................................................. ..97 Schedule of Utility Tax Revenue Bonds {Series 2007} ...................._......._..._. .....,................................ ..98 Schedule ofRevenue Sonds (Series 2008 Taxable} ....._..... ............._..._..._......._..._................_................................ ..99 Combined Schedule of Water and Sewer Revenue Bonds ..................................................................................... 100 Schedule of Water and Sewer Revenue Bonds (Series 1493} ................................................................................ 101 Schedule of Water and Sewer Revenue Bonds (Series 1997) ................................................................................ 102 Schedule of Water and Sewer Revenue Bonds (Series 2006A} ............................................................................. 103 Schedule of Water aid Sewer Revenue Bonds (Series 20068) ............................................................................. 104 Schedule of Water and Sewer Revenue Bands (Series 2007) ................................................................................ l05 Schedule of Installment A cements Ca ital Leases ..................................................................... gr p .................... 106 Combined Schedule of Commynity Redevelopment Agency Tax increment Redevelopment Revenue Brands (Series 2004 and Series 3,999) ........................................................................ l07 City of Delray Beach, Florida Comprehensive Annual Finaxcial Report Year Emded September 34, 20Q9 Contents III. STATISTICAL SECTION Deserip#Sons .................................................................................................................................. ............................ 108 Financial Trends Net Assets by Camponent ...................................................................................................................................... 1.09 Changes in Net Assets ..................................................................................................................................... . ...._. 110 Governmental Activities Tax Revenues by Source..............._.... ............................................................................ 112 Fund Balances of Governmental Funds ......................................................... . 113 Changes rn Fund Balances of Governmental Funds .............................................................................................. 114 General Governmental q'ax Revenues by Source ................................................................................................... 115 Assessed Value and Estimated Actual Value of Taxable Pxoperty ........................................................................ 116 Revenue Capacity Property Tax Rates -Direct and Overlapping Cmverntnents ...............................................•--............................... 117 Pxineipal Property Taxpayers ...................................................................................................... ........................... 118 Property Tax Levies axed CoIlections .... ......................................_......._......................................_.....__................._.. 119 Debt Capacity Ratios of Outstanding Debt by Type ...................................................................................................................... 120 Ratios of General Bonded Debt Outstanding ......................................................................................................... 121 Direct and Overlapping Governmental Activities Debt ......................................................................................... 122 Water and Sewer Pledged Revenue Coverage ....................................................................................................... 123 Demo~-aphic and Eeonantic Information Principal Employers ............................................................................................................................................... 124 Demographic and Economic Statistics ................................................................................................................... 125 Operating Information Full-time ~uivalent Government Employees by Function ................... ......... ....................................................126 Capital Asset Statistics by Function ...................................._..............................................._._......_........................_ 127 Operating Indicators by Function........... ...................................---..........................................................................128 Schedule of Insurance in Force ............................................................................................... .........129 ...................... IV. COMPLIANCE SECTION CamAlian_ee 1'Vit4r the Single Audit Aet and the Rules of tlde Auditor General fur the State of FI©rlda ~ ~ _ Independent Auditor's Report on Internal Control Over Financial Reporting and on Compliance and Other Matters Based nn an Audit of Financial Statements Performed in Accordance with GavernmentAuditzng Stanclar-ds .......................................................................130 Schedule of Expenditures of Federal Awards and State Financial Assistance .......................................................132 Notes to Schedule of l;xpenditures of Federal Awards and State Financial Assistanoe ...........................................................................................................................................................134 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 Chapter l 0.550, Mules of the Auditor General .................................................................................................................135 City o~Delray Beacb;, Floz7ida Comprehensive Annual Financial Report Year Ended September 30, 2009 Contents i IV. COM.PLIANC~ 8EC'1'ION (Continued) i I Schedule of x'indings and Questioned Cosis - ~'edea°a3 Award Pxogxams anal ~ Siate Financial Assistance Projects ....................................................................................................................137 ~ City Corrective Action Plan ...................................................................................................................................145 Maua~emeni Letter Management Letter .............................................................................................:..................................................15Q City Response t© Managezneni Letter ....................................................................................................................154 ~~ ~ . ~ ..- .. . .~. ~. CEi4 flF ~ElR~~ BEACH Ladies and Gen#lemen: We are pleased to present to you the Comprehensive Annual h'inancial Report (CAFR} of the City of Delray Beach for the fiscal year ended September 3p, 2pp9. This report was prepared by the Finance Deparhnent and responsibility for the acc~uacy, completeness and the fairness of the data as presented rests with the City. We believe the data, as presented, is accurate in all material respects; that i# is presented in a mauuex designed to fairly set forth the respective financial position of the governmental activities, the business-type activities, the aggregate discretely presented component units, each major fund, the aggregate remaining fund information, and the respective changes in financial position and cash flows where applicable thereof of the City. All disclosures necessary to enable the reader to gain the maximum understanding of the City's financial affairs and condition have been included. The City of Delray Beach offers the readers of their financial statements the Managemenf's Discussion and Analysis (MD&A} which is an overview and analysis of financial activities for the fiscal year ended September 3p, 2pp9_ This analysis is considered "required supplementary inCarxnation" for the annual audit and we encourage readers to review and consider this when resented with additional information rnvided in the financial statements. PRIMARY GOVEltN1M1JN I' AND CQMPQN1uNT UNITS 't'his report includes ail funds of the primary government (the City of Delray Beach} and all organizations and component units for which the City is f-i,naxtcially accountable including the following_ South Central ltegianal 'Wastewater Treatmcnf_und llisnosal Beard (SCRWTDS~ -This entity was established as a join# venture with equity interests between the cities of Delray Beach and Boynton Beach on December 26, 1974, and is accounted for using the equity method in the frnaz~cial staternen#s. This agreement created a legal entity which provides wastewater treatment and disposal services as vrell as a water reuse transmission plant to the south centre[ region of Palm Beach County without regard to political or governmental boundaries. The entity is governed by a Board composed of the Commission members of each city. Community Redevelopment Agency (CRAB -The CRA is a dependent special district established by the Gity of Delray Beach under authority granted by b`larida Statute Chapter 163, Part III. It is a legally separate entity established by Ordinance 46-85 passed by the City of Delray Beach Cit}r Commission on 3une 18, 19$5. The CRA is governed by a seven member beard appointed by the City Commission of the City of Delray Beach. The CI2A receives tax increment fiends (T1F) from the City of Dekay Beach and Paim Beach County based upon tho operating millage of those entities for the taxable assessed values of properties in the CRA district in excess of the 14$5 taxable assessed valrsations_ The CRA is a component unit of the City of Delray Beach and, based upon acco~mting and reporting criteria, is required to be discretely presented within the financial staterents. Discrete presentation requires that the financial informaton be presented in columns separate from that of the City's basic financial statements. ~~~~~~ ~~lCl"~gtss~N~`E ~~~G~l~~T1 t=Si'C3+*!5~'t3€~t" 4 ;~PI~Y~TLtfl< ~~~t;~~t~f2~ Downtown Develo meat Authori DA -The DDA was created after the City petitioned the State of Florida. An Act allawin$ the DDA became Iaw 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 T.,aws of Florida effective May 13, i 994. The DDA is allowed to charge an ad valorem. rnillage rate on the commercial businesses within its boundaries not to exceed one {1}mil, The resolutions regarding millage rates and budgetary submissions must be approved is a public hearing process by the City of Delray Beach. The DDA is also a cornpanent unlit of the City of Delray Beach and is also required to be discretely presented within the #"inancial statements. TH11 CITX ©)~' DELRAY BEACH The City of Delray Beach is a political subdivision of the State of b`larida grad is located in the southeastern part of the state in Palm Beach County on the Atlantic shoreline. Delray Beach was first settled as an agricultural community in 1895 and first incorporated in 19I i. It was later incorporated as the City of Delray Beach an May 11, 1927. The City has a current estimated permanent population of 63,789 (2000 census permanent population was 60,02©} with aaather estimated 12,600 seasonal residents. The current total land area of the City is ]6.5 square miles. Delray Beach is primarily residential (67%) with a balance of commercial {ID%), light iadustrial (4°1~}, vacant atad agricultural (1°/a), recreation end vpea space (l3°1u) and education and governxrternt facilities (5°/a). It is a mature community with 99.]% build-out (based upon land area} aad, 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 ate t1a longer functionally competitive in the regional marketplace. The City of Delray Beach is a fuI! service city with a Commission-Matzager fortx~ of local government. The citizens elect a Mayor at large an a nan partisan basis every two {2} years who presides aver four (4) Commissioners who are elected at large on a nan partisan basis for two {2) year terms in alternating years. The City Commission sets policy, approves legislation:, adopts the Annual Budget, and sets rates and fees. The City Commission appoints the City Manager, who is the Chief Operational Officer of the City, and the City Attorney, who acts an all legal matters pertaining to the City. The City Manager is charged with overseeing th:e daily business of the City and is responsible for the supervision of the City departments and employees. Department Heads serve at the pleasure of the City Manager and other employees are covered with either Civil Service regulations ox union agreements. The City of Delray Beach is considered a full service municipality providing citizens with police, fire, emergency znedicai 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 futaacial support services. The City also provides services to nniacorporated areas and adjacent municipalities. Water, fire pxotectiott, emergency medical services, emergency police dispatch services, building inspection and permitting and limited sewer services ate provided to the 'T'own of Gulfstreazn. Sewar services, fire protection and emergency medical services and Iiraited water services are provided to the Town of Flighland Beach. Both areas are serviced on a contractual basis. The City encourages the participation of residents and business owners in educational forurxis, discussing problems within our cornnaunity, anal izt contributing their input into resolving thew problems. One venue for this is the Annual Town IIaII Meeting (including an Antaual Citizen's Roundtable and Infrastructure Hearing} held each yeax prior to the annual budget process which includes a comprehensive report an the prior year accamplishmenis of the Planning and Zoning Board, the Community Redevelopment Board and the City of Delray Beach including the disfribution of the City's Annual Report. Other venues include area-wide meetings with neighborhood associations, established boards and committees, chatettes, a Residen:t's Academy, a Student's Academy, a Police Acadexny, a Speaker's Bataan and special meetings. In the prior fiscal year the City Conuirission initiated a Budget Task Force (a 9-member citizen task force) to evaluate and make recommendations on the budget as well as other financial documents} that later became the full-tune Financial Review Board and a Green Task 1?oree {a 7-member citizen task force) to make recommendations on improving environmental sustainability of City programs, service, equipment and facilities, conservation, and best practices regarding efficient use of resources that also was extended into a full-time board Delray Beach is kaowa locally, regionally and nationally for its special events and vibrant downtown activities. Over the past year, there were aver SO special events including the Green Market in the Park, Art and Jazz on the Avenue, Garlic Fast, Rooks Cult~rral Festival, U,S.T.A. ]2 year old Bay's and Girl's National Tennis Championship, the U.S.T.A. Boy's 18 and 16 CIay Court National Championships, the U.S.T.A. Summer Smash Regional Cbaznpianships, the 10th Annual ATP International Tennis Championships (ITC} featuring tames 131a1ce (USA) and Tommy Haas (Germany}, and the 1$'s Annual Chris EvertJl2aymond James Pro-Celebrity Tennis Classic charity tournament including comedians Chevy Chase and Tan Lovitx. The 47~' Annual Delray Affair atlraatcd over 15D,DDD visitors over a three-day period. The ~s' of Juiy fireworks display attracted over 4D,D00 observers. The City displayed its 1D0-foot Christmas tree and had over 25,DDD attend its First Night event at Old School Square. There are nunteraus musicals, parades, shows, art and craft festivals, movies, lectures, exhibits, perforimances and other special activities. The Delray 13each Tennis Center is afull-service tennis facility with 14 clay courts, 7 hard. courts, and an 8,20D seat tennis stadium. The facility includes 19 lit courts, a pavilion and conference room, prv shop and locker room offering a wide range of adult and junior programs as well as prafessianai events. The Delray Beach Galf Club, designed by Donald Rass in 1923, is one of Palm Beach County's finest public golf courses which includes a par 72-6,907 yard golf course, driving ranges, 2 putting areas, banquet facilities, restaurant, bar and lounge area and pro shop facilities. The Lakeview Golf Course is a pax 6D-3,OD6 yard executive course favored by many beginners, 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 20D1. The .City was also a finalist in the 1998 AIl-America City award con€~petition. The City of betray Beach is the only city in k'lorida to have received this prestigious honor twice. The City of Delray Beach. celebrated its 31st year in Sister's Cities Program relationship with Miyazu, Japan and a later relationship with Moshi, Tanzania, Africa. CURRENT MAJOR INITIATIVES Bus Shelters The City installed 43 new hue shelters at various locations throughout the City, The City has bees awarded three grants to install an additional 50 bus shelters over the next tiro years. In 2DD6, a shuttle was initiated with three buses providing shuttle service from TriRaii to downtown Delray Beach (the downtown roundabout service} and an additional part-time shuttle an Friday's and Saturday's. In FY 2D49 the shuttle served 132,564 custoznexs. Dor~vntown Par1Qn~ ' With the addition of 770 parking spaces provided from the Qld School Square parking garage and the Robert Federspiel parking garage, the City has embarked on a downtown parking study to develop a comprehensive parking xnanagsment program that will not only Look at existing inventory but also how the current parking is utilized Qther outcomes of this study include a review of the current payment in-lieu parking system, benefits and barriers to imposing parking fees, a review of the current shuttle service and policies and programs to improve and enco~age wallcability within the downtown area. Workforce Housin The City has developed a workforce housing initiative and has a workforce housing ordinance. A Community Land Trust was started whereby land is banked for the development of special warlcforce housing units. TechnaloQy In response to tk~e City of Delray Beach Strategic Plan 2D01-2D06, the City established a consolidated departmental website which was activated ix- June, 2402. This site was updated last year to include key "gateway" links to the Chamber of Commerce, the Cox~ununity Redevelopment Agency, the Delray Beach Library and the Downtown Marketing Cooperative, The site is called MvDelxayBeach, cam 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, utility rates and includes links to major city and private organizations. The site allows for citizen comments, inquiries and complaints, 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 deparmments. Major i~xzpravements to this site include a live video-cam of our beach area, a mail list subscription service which allows residents to receive copies of newslettexs, agendas, minutes, and other City documents on a regular basis, and additional information such as full copies of the Comprehensive Annual Financial Report, Annual $udget, Financial Trends Monitoring Report and the TT Enterprise Technology Plan. The Information Technology Division recently completed implementation of an interactive voice response system allowing fox utility customers to view their account inforration and make payments over the phone and through the website. The system also allows for contractoxs with building permits to schedule inspections and far inspectors to record inspection results either by telephone ox through the website. The Finance Department has issued an Information Technolo Division - Ente rise Technola Plan for Fiscal Years 2009-2013. This plan actually includes four (4} different pions to include the Strategic Plan, Tactical flan, Business Intem~ption/ConCinuity Plan, and the Annual project Work Plan. This plan received the honor of being published on the Intexnational City Manager's Association {ICMA) technology website thereby receiving national recognition. The Finance Department Information Technology Division recently received national recognition for its 8th place award in the Digital Cities Survey from the Center for Digital Government far 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 nut 5 year Enterprise Teelanalogy Plan. Previously, the IT Division received two consecutive lsf place awards and a 3'~ place award. These awards have been presented to the City at the National League of Cities conferences. The City recently completed a new Information Technology building just north of City Ha1L This building is a hurricane-hardened facility with modem computer tacks with built in nix conditioning, separate backup generator, and updated CATb cabling. The l;finance Department Utility Glrstomer 5erviee Division has completed the installation of radio-read water meters east of the Intracoastal Waterway and has installed these meters izR sanne areas west of the Intracoastal east of Swinton. The Finance Department recently completed implementation of pension administration software which also includes a web-based interaclve site for employees and retirees to receive information, calculate future retirement amounts, and provide information for oux annual actuarial reports, This department recently became the pension administrator fox the Police and Fire Retirement System which was previously provided by outside services, Reclaimed Water Proiect The Environmental Services Department expanded its reclaimed water project which is serving our municipal golf courses. In FY2009, this department cnrnpleted the first phase of the harrier island reclaimed water system that will provide irrigation water to the barrier island at significantly lower costs than using potable drinking water and will also relieve the potable drinlcizag water system of those irrigation demands. GENERAL, ~'i1VANCIAL INRQR1VirtiTTON internal Accountiun~ 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 froze unauthorized use or disposition and that there are reliable #"3nancial records far 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 figancial transactions. Sin~Ie Audit As a recipient of Federal, State and Caunhy fxnaneial assistance, the City is also responsible for ensuring that an adequate system of internal controls is in place to maintain coxxrppliance with applicable laws, regulations anal guidelines related to these programs. Tciis internal control system is subjeek #o periodic evacuation 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 fox tl-e fiscal year ended Septenibex 34, 2049 disclosed no instances of material weaknesses in the internal control structure and disclosed no significant violation of applicable laws and regulations. Bn~I~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 far the General Fund. Nonappropriated budgets, which are not legally required to be adopted, are also prepared for Special Revenue Funds, Capital Projects Funds, Debt Service Fund, Enterprise Funds and Internal Service Funds. The level of budgetary control is at the division and departmental level. As part of fine budgetary control system, an encumbrance system is utilized. An encumbrance is a commitment to acquire goods ar services (purchase order) which has not been paid for at a particular point in time. For operating purposes, outstanding encumbrances lapse at year-end and arc then reappropriated as part of the new year budget. $laiiket purchase orders are closed at year-end and are not reapprapriated. Cash Management The City has a Banking Services Agreement with a Iocal banking institution based upon competitive bidding of its banking services. The City uses apooled-cash concept for all opexatisrg funds with the exception of the pension. txust 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 collatexalixed instruments as required by the State of Florida. O"1`HL~R INFaRMATIQN Independent Audit • Florida Statutes Chapter 166 requires that the City be audited on an annual basis by independea:t certified public accountants. The certified public accounting firm of Caler, Donten, Levine, Porter & Veil, I'.A, was selected to perform the audit of tlae City's financial stateiaie;nts. In addition to meeting the requirements set forth in the Florida Statutes, the audit was also designed to meat the requirements of the Federal and Florida Single Audit Act and the xelated OMB Circillar A-133. The auditors' reports related t9 the single audit are included in the Compliance Section. l+~nancial Statement Awards The Cxovernnient Finance Officers Association of the United States and Canada awarded a Certificate of Achievement far Excellence in Financial Reporting to the City of Delray $each, Florida, for its CAF12 far the fiscal year ended September 34, 240$. This was the 25th consecutive year the City received this prestigious award. This award is the highest foam 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 s#andards and satisfied Generally Accepted Accounting Principles {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 sabzr~it it to the GFOA to determine its eligibility for the Certificate of Achievement. v ACKNO WL1k DGMENTS 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 Dave been prepared so completely and professionally without the dedication and efficiency of the entire Finance Department. The efforts of Milano Walinski, Assistant Finance Direc#or, and the entire Financial Services Division and Rebecca O'Connor, Treasurer, deserve special individual recogaitivu. 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 Gity 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, f ~ ~ ~h IYf. Milena Walinslii, CGFO Finance L}irec#ar Asssistani Finances Di~etor VI The Governanen# Finance Oll~cers Association (G.F.D.A.) of the United States aad Canada awarded a Certificate of Achievement for Excellence in Financial Reporting to the City of I3elray Beach, Florida, far its Cor~nprehensive Aunual Financial Report (C.A,)?.R,) fox tlae fiscal year ended Septerz~ber 3E}, 2{10&. in order to be awarded a certificate, a govern~neotal unit must publish an easily readable and efficiently organized Comprehensive Annual Financial Report, whose enntsnts conforzu to program standards. Such xepozts zrnist satisfy both Generally Accepted Accounting Principles and applicable legal requirexueuts. A certificate is valid far a period of one year only. We believe our current report continues #o conform to certificate program requirements, and we ors submitting it tp G.F.O.A, to determine its eligibility for another certificate. ~~ii Certificate of Acl2ievexnent for Exce~~ence in Financial :. Red orting . Presented to City of Dera~ Beach Florida For its Comprehensive Annum . P'i~nancial depart for the Fiscal Year Ended - : . Septembez 30, 208 . A Certd`teate of Acltievenneat for Excellence in F~anciat Reporting is presented by the Government finance Officers ASS4clatlpn ofthe United Stakes and Canada to government units and public employee rethrement - systems whose ComprelaensiVe annual financial ~.. reports (CAFRs) achieve the highest standards in gavcrmx-ent accounting and financial reporting. are, .x~ usa~ ~ ~ ~ w ~~~~° President Executive Director ix City Qrganizational Chart CIT12EtJ5 :, Advisory Mayor City - Boards Cpy Commission Ailgnay Gay Manages Assistant Asslntent Gily Manager Cky Manager GoITCarses Beai cn Fehnis i le Statlium FaalHies Intorma pon G ik riernn'iidelOn ' seaetariaf Records Management Finance Potlcg Fire Community Planning and Parks end Environmemel ftnman - Imprnvemant Zoning Recreation Services Resauraes SuppoTl A«wrtNine Bureau Adminisaatktn Adminishatron Cn[ient Adminiskagon Publlo ' pemonnal Planning [ia Rtlas Operaltmc Treasury Bureau Op®ratians BuFtdng tong Range Parks Risk Inspec§(ola Planning Marnlenence Engineering Management Budget Emergenq Code Puhpc Works lanagement Enlomemenl Rec~eapon Purctrasirre NeighbargoUd 3enices eel Matntenart Setery Cemetery IT tiigliland Saniia&on SEormwafet Beach Marina Adminisfsafion and Capital tJtildles Slormwater Customer Systems 3ervece Maintenance x : : ~ . Financial Section L/z [~~~'"[[~~tR~~ ~7V,Ql.~~ .L'I~.t V ~ J~'~l''')cr Y 1.RV1'~y ~V1L~1 ~ [X+~~..I~ .C ~. CEit'T[F€&D PURL{C ACCO[7NI'hNfS tYlf a.iAMK. (-AtEtL114 CPA i.D~ILS M CO€3EN,CPA JOHtd G W DATIVEY, CPA,1D DAV1B S. DONIYN, CPA €AA?FS II. t1U1'CFIISDN, Q'A 70ELFI.I~YI.F+Ai', CPA lAML-S A MU1d.F~1, Iv, GI'A '€HOHSAS A PEtJCII, Jlt, CPA SIX7I7'L POR31ift, CPA MNiKD. VEIL, CPA SOS SDC71H1•LACiL$KDRIVE~ SU31£ 900 WE51'PALM73E4CH, FL 33dOI-59A8 rs~.€~iDlasesef) i~2-9792 FAX (56€)532-9~SS5 u~fi r(JccP~n.wfn Independent Auditor's Ret3ort To the Honorable Mayor and City Commission City of Delray Beach, F7orida~ MLA[CiHRS ARAER€C1UV E~ISII'IT3l"€"i DP CE]t'I"fY~ PUBLiC ACCOL3N7ATd'€'S Ff.Dtc1DA 7NSTIT€IrE OF CERT€F1ED PUBLiC ACCQUSirANrS We have audited the accompanying fiinancial statements of the govemmental~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, 2009, 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 DelrayBeach, Florida. Our responsibility is to express opinions on these financial statements based on our audit. We did not audit tine financial statements of the Police and firefighters' Retirernerit System Fund, a fiduciary fund of the City, which represents S1%, 3% and 21%, respectively, of the assets, net assets/fund balances and revenues/additions of the aggregate remaining food information of the City, and the Delray Beach Downtown Development Authority, a discretely presented component unit of the City, which represents -3%, .4% and A°/a, respectively, of t3ae assets, t~et assets and revenues of the City's discretely presented component units. Those financial statements were audited by other auditors whose reports thereon have bean 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 Dawutawn Development Authority, is based safely 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 Govermnent Auda~ing Standards, issued by the Comptroller Createral of the United States. Whose 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 tl~e circuinsiances, but not for ttie pwrpose of expressing an opinion on the effectiveness of the City's internal cozitrol over financial reporting. Accordingly, we express zro such opinion- An audit includes exarninirxg, on a test basis, evidence supporting the amounts and disclosures in the financial statements. An audit also includes assessing the accounting principles used and signiz5cant 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 or3 our audit and the report of other auditors, the financial statements refe~ed 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, 2009, and the respective changes iii financial position and, where applicable, cash flaws 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 Match. 24, 2010 ozr our consideration of the internal control over financial reporting of the City of Delray Beach, Florida, and on our tests of its compliance with certaizr pravisiozrs of laws, regnlations, contracts and grant agreements and other matters, The purpose of that report is to describe the scope of our testing of internal eozrtrol over financial reporting and compliance and the results of that testing, and riot to provide an opinion on the internal control over frnancial reporking or on compliance. That report is an integral part of an audit performed in accordance with Gover~zrnent Auditing Standards and should be considered in assessing the results of our audit The management's discussion and analysis and the required supplementary information on pages 3 through 16 and pages 67 through. 74, respectively, are not a required part of the basic fizaanicial statements, but are supplementary information required by U.3. generally accepted accounting principles. 'bite have applied certain limited procedures, which consisted principally of inquiries of management regarding tl~e methods of measurement anal presentation of the required supplementary information. However, we did not audit the information and express no opinion on it dur audit Bras conducted for the purpose of forming opinions on the financial statements drat collectively comprise the basic financial statements of the City of Delray Seach, Florida. Tire 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 Deh-ay Beaclr, Florida. The accompanying Schedule of Expenditures of Federal Awards and State Financial Assistance is presentted for purposes of additional analysis as required by U.S. Office of Management and Budget Circular A-133, audits of States, Local Governments, and Non Profit Organizations, and Chapter 10.55£1, Rules of tare Auditor General, and is also not a required part of the basic financial statements of the City of Delray Beach, Florida. The combinnrg 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 apinioar, based on our audit and the reports of other auditors, are fairly stated in all material respec#s 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 an them. .~, ~~, lvlarch 24, 2010 Nlanagemenf'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 (1vtD&A) which is a narrative overview and analysis of the overall t'inancial activities of the City tar the fiscal year ended September 30, 2009. We encourag$ readers to consider the 'snformation presented herein in conjunction with additional information that we have furnished in our Transmitter! Lefler, which can be found on pages i #hrough vii of this report anti the actual detailed financial statements beginning on page 17. The City has implemented Governmental Accounting Standards Board (GASH) Statement loo. 34 entitled "Basic k=inancial Statements -and Management's Discussion and Analysis for State and Local Governments". Statement Edo. 34 was intended to enhance the understandability and usefulness of external financial reporting of state and local governments to the citizenry, legislative and oversight bodies, and investors and creditors. FingnCial lilghliahts • The City's single largest source of revenue is from property taxes derived from the taxable assessed value of properties within the City, as summarized below (in billions: . F.i~cal Y~e.dr.:.. . . _._ . Taxable"Assesseds;Value:... .~...Increase~p~cr~as~_.: .Tc~c Reveriu`e*~` 2000 3,159,823,854 595% $23,429,259 2001 $3,393,573,636 7.06% $25,042,931 2002 3,759,600,909 10.79 $29,011,246 2D03 $4,151,452,658 10.42 $32,069A35 2004 $4,705,803,124 13.35% 36,355,993 2005 5,377,591,728 14.28 41,584,718 2006 $6,451,499,363 19.97% $49,825,341 2007 8,362,590,396 29.62% $59,091,001 2008 $8,592,058,50D 3.94 55,302,837 2009 $8,14-9,606,528 b.24% $53,984,307 2010* $7,098,165,923 12.90% 52,069,568 * Projected ** Tax Revenue includes the collection of delinquent taxes The overall financial condition of the City's General Fund operations is now influenced by the real estate market, the current state of the economy and State tax reform legislation. 3 The impact of all three factors has led to the current b24% decrease in taxable assessed property values, from $8,692,058,b00 to $8,149,606,528 ar a decrease of $542,452,072. This is only the second decrease in the City's taxable assessed value since 1994. Prior #o fiscal year 2008, the City had six consecutive years of double digit increases in taxable assessed property values. Problems with property taxes started in 1994 when the State passed the "save Our i-comes" amendment which capped homesteaded residential properties to the lower of 3% or the Consumer Price Index. By capping one segment of the tax faase, the ether segments (non-homestear~ed property and commercial property} were inordinafeiy Impacted with subsequent increases in property values and millage increases. in 2DD6 the State of Florida established the Property Tax Reform Comrr3ittee. The committee was charged with making recommendations on haw to Improve property taxation in Florida, lViany new residents to the State wishing to purchase their own hams were finding the taxes on many properties to be unaffordable. NEany residents were "locked in" their own homes, unable to relocate within the State because a change in homeownership would result in a loss of substantial tax benefits. ]n addition, commercial properties were paying high taxes since they were not homestead properties. Even though the State had experienced several years of double-digit increases in prgperty values, there were minimal offsets or reductions in tax millage rates levied annually by local governments. Therefore, as part of the FY 2006 property tax reform, the State of Florida imposed a millage rollback Fate in FY 2008 to FY 2007 millage rates less a 9% additional reduction on the City of Delray Beach operating millage rate, thereby reducing the total millage tax rate from 7.3000 mils in FY 2007 to 5.5783 mils for 2008. In FY 2DD8, the State drafted Amendment One and this tax reform initiative was approved by a State-wide referendum an January 29, 2008. This amendment provided for an additional homestead exemption of up to $25,000 off the taxable assessed value of homestead property valued above $50,000, {school districts excluded}; allows for portability wheeein homesteaded property owners are allowed to transfer all or a portion qt their "Save Qur Homes" lax benefit {up to $500,000) to a new homestead within the State of Florida; and establishes a 10% lax increase limit on non-homesteaded properties (school die#ricts excluded}. The change also placed a cap on future property taxes by tying any changes in the tax rate v~+ith personal income growth and made provisions that allow local governments to override the cap by super majority vote. • The City millage rate approved by the Gty Commission determines the overall property tax levy (one mill equals $1 per $1,000 of assessed value] and is summarized below: .; :. ~IsGal,~e~sr.... .::~ gratin :Mina e. ; _,beb~'~erva~e151~i11a~_~.~~. ._ .: -.:~atal:[lililia -~ .4 ..:.- -` 200D 6.9100 .7400 7.6500 2001 72600 .69DD 7.95D0 2002 7.370D .6300 13.DODD 2003 7.4400 .560D 8.OD00 2D04 7.52D0 .4800 8.D000 2DO5 7.45DD .55DO B.DDOD 2006 7.4500 .55DD 8.0000 2007 b.86D0 .4400 7.3000 2008 6.1449 .4334 6.5783 2D09 6.39D0 .4604 6.8504 The millage tax rate for FY 2009 increased from b.5783 to 6.8504 ar 4.1 %. Combined with the decrease in taxable assessed value for the year, the property tax collections actually dropped $],318,530. from $55,302,837 to $53,984.307. 4 The City established a community redevelopment district in 1985 which is managed by the Delray Beach Community Redevelopment Agency (CRA}. The CRA receives tax increment #inancing (TIF) from the Cify of Delray Beach and Palm Beach County. The City initially receives all municipal tax revenues in this district. The City must then transfer to the CRA all tax revenues above the 1985 taxal3le assessed values ($245,631,0&7) times the current operating millage_ The taxable assessed valuation of property located in the Community Redevelopment Agency (CRA) district decreased from $1.7 billion in FY 2008 to $l.b billion in FY 2009 but the actual revenues decreased by $492,735 due to decreases in assessed valuation. CRA- Taxable Assessed Value and Revenue :.:. :::: F.is~d[~Ye~r -:- = Tax±atile Assessed.Value::. ..; .~Ti~cY~ds~/b,~ci'ease ._..... _. ......'C~I~C'Reuenu~e~-:..,,,_ . 20D0 $407,135,136 8.29% $1,Db0,193 2001 $439,765,167 8.01 % $1,338,943 2002 530,525,688 20.64% 1,994,690 2003 $578,492,563 9.04% 2,351,170 2004 714,73&,811 23.55% $3,351,291 2005 886,274,285 24.00% $4,534,152 200& $1,2D5,957.704 36.07% $6,796,712 2007 1,&53,248,923 37.09% $9,173,445 2008 1,741,335,128 5.33% $8,731,4D4 2DD9 $1,602,795,951 7.9b% $8,238,6&9 2010& 1,343,881,291 16.15% 7,497,890 F'r01ec7ea ^ The assets of the Cify (Primary Government} exceeded its liabilities at September 30, 2DD9 by $221,508,534 (Total Nef Assets)_ ©f this amount, $6&,442,741 (Unrestricted Net Assets may be used to meet the government`s ongoing obligations to citizens and creditors. The City's total net assets increased by $12,699,872 for 2{109. Net assets of the governmental activities increased to $111,237,283 and ne# assets of the business-type activities increased to $110,271,251 at September 3D, 2009. These balances are shown in the "Statement of Activities". ^ The total net assets of the Gity (Primary Government) increased by $12,&94,872 in which the governmental activities increased $4,375,961 and business-type activities increased $8,323,911. This change in net assets is shown in the "statement of Activities". ^ Af September 30, 2009, the City's govornmer~tal funds reported combined ending fund balances of $37,970,944 which decreased $2,489,790 tram the prior year. The decrease is due primarily to the General Construction Fund using fund balance to complete projects. Of the combined ending fund balance, $33,210,791 or 87,46% is available for spending at the government's discretion {Unreserved Fund Balance). Of this amount, $19,747,589 is in the General Fund, $9,9&2,213 is in Capital Projects Funds and $3,500,989 'ss in Special Revenue Funds. Af 5eptember 30, 2009, Unreserved Fund Balance for the General Fund was $19,747,589 or 21.11% of total 2009 General Fund expenditures of $93,56D,917. This compares to $18,593,915 in Unreserved Fund Balance last year which represented 19.54% of total expenditures of $95,180,578. The City's financial policy is to strive to maintain betwoen 15%-25% 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 casts, 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) Hates to the financial statements. This report also contains other supplementary information that explains in more de#ail some of She information in the financial statements. Government-Wide Financial Statements The govemmer~t 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 {risetsJ and the olaligations to credi#ors (liabilities}. These assets and liabilities are presented in a classified format, which distinguishes between current and long-term assets and Iiabiiities_ The difference between assets and liabilities {net assets) provides the basis for computing rate of return, evaluating the capital structure of the Cify, 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 infarmatian showing how the City's net assets changed during the mast recent fiscal year. Alf changes in net assets are reported as soon as the underfymg event giving rise to the change occurs, regardless of the timing of related cash flows. Thus, revenues and expenses ors reported in this statement for some items that will only result in cash itows in future fiscal periods {e.g., uncollected revenues and earned, but unused leave). Both of the govemmen#-wide financial statements distinguish funs#ions of the City that are principally supported by taxes and intergovernmental revenues {governmental activities from other functions fhat~are infended to recover ail or a significant portion of their costs through user fees and charges {business-type activities). The governmental activities of #hs City include such areas as General Government, Public Safety, Physical i=nvironment 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 Goff Course, Lakeview Goff Course, City Marina, Sanitation and Stormwater Utility operations. Both of the government-wide financial statements include riot only the City itself (known as the Primary Government}, but afro a legally separate Community Redevelopment Agency (CRA} and a Downtown Development Authority {pDA} for which the City is ftnancialiy accountable (known as component units). f=financial information for these component units are reported separately from the financial information presented for fhe primary government itself. The government-wide financial statements can be found on pages 17 and l i3 of this report. The CRA and DDA issue separate audited financial statements which are available directly from the CRA at 2D N. Swinton Avenue, Delray Beach, FL 33444 and from the DDA at b4 5_E. Soh Avenue, Delray Beach, FL 33483. Fund Firsanciaf Statements Governmental Funds Governmental funds are used to account far essentially the same functions reported as governmental activities. in the government-wide financial statements. 1-fawever, unlike the government-wide financial statements, govemmenta! fund financial statements focus on near- term inflows and outflows of spendable resources, as weft as an balances of spendable resources available at the end of the fiscal year. As a result of this dif#erence in focus, a reconciliation is provided laetween the fund financial statements and government-wide financial statements to understand the longterm impact of short-term financing decisions. The City maintains twelve individual governmental funds. Infarmafion is presented separately for the General Fund and Capifal Improvement 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 19 through 22 of this report_ Proarietarv 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 an 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, sanitation operations and stormwater utility. Internal service funds are used to account for the financing of insurance 5eriices and central garage services provided to other departments of the City on acost-reimbursement basis. Because these services support both governmental and business-type functions, they have been allocated between the governmental and business-type activities in the governmenf- wide financial statements. Proprietary fund financial statements provide the same type of information as the govemment- wide financial statements, only in more detail. The proprietary #und financial sfalements 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 #unds 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 individua! 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 23 to 25 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 #unds are not available to supporf the City's operations. The accounting methods used for fiduciary funds are similar to that used for proprietary funds. Individual fund data for each of the fiduciary funds is provided in the form of combining statements elsewhere in Phis report. The City's fiduciary fund financial statements can be found an pages 26 to 27 of this report. Notes to the Financial S#aternents The notes to the financial statements provide additional information and clarification that are essential to a full understanding at the data presented in the government--wide and fund financial statements. The notes to the financial statements can be found beginning on page 2$ of this report. Other Information In addition to the basic financial statements and accompanying notes, this report also presents certain required supplementary information concerning the City's progress in funding its obligation to provide pension benefiits to its employees. Additionally, the City adapts an annual appropriated budget for its Genera[ Fund. A budgetary comparison schedule has been provided as required supplementary information for the General Fund to demonstrate compliance with these budgets. Required supplementary information can be found on pages 67 through 70 of this report. fie combining statements for non-major governmental, non~rnajar proprietary and the fiduciary funds are presented immediately following the required supplementary information. Combining and individual fund statements and schedules can be found beginning on page 71 of this report. Government-Wide Financial Anaiysis Our analysis at the government wide fnancial 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 Ca~densed State,m~n# of Activities 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 net assets during the year. You can think of the City`s net assets the difference between assets and liabilities - as one way to measure the financiai health or financial condition. Over time, Increases ar decreases in the Gity's net assets are one indicator of whether Its financiai health is improving ar deteriorating. However, you will also need to consider other non-financial factors such as changos 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 Statem nt at Net Assets in millions ~:.:i.:u~ ~:?::[:Gt',.-'ca:5 ~~~:;t'!nr~~':'~1::~.'".-L^~::~_..:i'C: ~..........n-:'::~. ....~. ___.......~.«.._.•~^::.--'-~_.~`..--a .................. sy .:::w^..'ir. n.r.n-.;t:...~..~::i~lTi'z::~•x:~'V...~-:5.::~I..~l^.^.:]:J.~^).::«^:. ::. ~. 1..-~.._ ~._.~.::'eSS ......~....•.!~~-='~=^-':~:~Yt.1:Y-:asic.<-,a.k1 .:: ^.ct:.•s~ .~ ..................._.. ::.-.~:.~y: ~.'~ <1 .'"~-:~:...-..' ...............:----•-...__._......~.-_..~ ».....~~.r.... ~~._...,_. .... ~::W e_ _ '-7i: - ..,._...tt.:i.:•.:?]:.:..;.;_::a.i°.i..:: .»Ti;::Hfj:~.t:. _•:: •:: ~:i:::si'~::i,,.....::~_~_.:....... _-.~,: ~f.:.::'-.: :.S:,YSi'^.t.:-:~•-_i•...~".=~ ~: ..: ~.' ._-if'a~- .-'Af-l3i YC~~?II~:.__..; .'1S Y..S~a' r.........i ..,....~.~.._....._ _ _ _--.... .... __.. .ids a:• ~_............ --:.~. -- e::v _ _ ::- ~ `~i' = _ ..~,.z~frC~ ..:........:.:~f~~, ~ .» . _. =~W: ~ ~~~~s1ci4: __..__....._._:.._ ___.-_..~_~ .. ... r era =:if'S~tI _ _~".-..::;~ ~~~~e~'{•~.ii~ ~~~ ~ _ V7t1~S` ::Y'r~r~~.~~~:;.`:~..:y .~~~2t: _ ~.s..r~.....~ Z~"V __ ~-.~i~ ~::a'"<"-e"::1~1,. ..;:f....._~~ ~Y4G'~~~:...::.-.nv ~:'1 _ __ _ ~~ -.~~-..-..i:s~:tx' T~ G _ `^ 15::"„-,•',- ~~.~.~~ M ...5;.~., w~«~ zoa9 2aoa 2aa9 2ooa zao9 Zoos Current and other assets $57.2 $58.8 57.9 5.3 115.1 114.1 Ca ital assets 143.8 142.7 103.5 103.4 247.3 245.7 Total Assets 201.0 201.3 1b1.4 158.3 3b2.4 359.8 Current liabilities 9.8 9.2 9,0 1 a.l 18.8 19.3 f~[on-current liabilities 80.0 85.4 42.1 46.3 122.1 131 J Tota[ liabilities 89.8 94.6 51.1 5b.4 140.9 151.0 Net Assets Invested in capital assets, net of related debt 76.5 70.5 66.2 57.1 142.7 127.6 Restricted 14.7 12.7 1.6 6.6 12.3 19.3 Unrestricted 24A 23.7 42.5 38.2 66.5 61.9 Total Net Assets $111.2 $i0b.9 $11Q.3 $101.9 $221.5 $208.8 The overall financial condition of the City improved slightly from the previous fiscal year as evidenced by Table A-l . S As shown in Table A-1 net assets amounted to $221.5 million in FY 2009 compared to $?_17.2 millon in FY 2008. A significant portion of the City's net assets ($142.7 million or 64.4% of the Total Net Assets} reflects its Investment in capital assets (e.g., land, buildings, machinery, and equipment} net of any related debt that is still outstanding. The City uses these capital assets to provide services to citizens; consequently, these assets are not available far future spending. Although the Guy's investment in its capital assets is reported net at related debt, it should be noted that the resources needed to repay this debt must be provided from other sources, since the capital assets themselves cannot be used to liquidate these liabilities. While the statemenfi of net assets shows the change in financial pasitlon of net assets, the Condensed 5fatement of Activities provides answers as to the nature and the source of these changes. 'this is spawn below 9n Table A 2_ Table A-2 Condensed 5fatement of Activities {$ in millions] :,.~•x~~.,:,..-w.r,~ ~_.~--:,,;~~:.-~..~:~_ _...~.., -_~....~'r-~.::i'i'C`~~._...~»...__..~.._~._.. ;.. ,....__. ___..~ ».:~: ~~ ~_;~--m::~•~:•.W :~ rr .. _......_. rn :1..,,..Ra__:,•.. ~_ v ~~~Cc~v ment~ =`- .3s: aa~.=;_. ~fres ~:~ ~_B. ,s~n~s .... _,.~e:n::: ~.., , _ ..~-?~itv .- ~;f r Ww .......~_.. it~e~ _. .:,~ __:~;~.~.W~ ~r_ ~.-.T~~l~ _ ~.~::.~~u~.Y; ~~_."?'%~~..^~a ~, . 2009 2008 2009 2008 2009 2008 Revenues Pro ram Revenues: Char es for services $12.4 13.1 44.8 39.1 $57.2 $52.2 Q eratin rants, contributions 6.8 7.3 1.3 3.0 8.1 10.3 Ca ital rants, contributions 1.1 9.6 1.1 1.0 2.2 10.6 General Revenues: Pro ert Taxes 54.0 55.3 A .0 54.0 55.3 Other taxes 16.4 15.D .D .0 16.4 15.0 Inter overnmental 5.9 6.5 .0 .0 5.9 5.5 Other 8J 9.4 .0 .5 8.7 9.9 Total Revenues 105.3 116.2 47'.2 45.6 752.5 159.8 E enses General overnment 22.3 25.1 .0 .0 22.3 25.1 Public safe 54.2 56.8 .D .D 54.2 56.8 Ph sical environment 9.9 8.1 .0 .0 9.9 8.1 Parks and recreation 14.8 14.5 .D .0 14.8 14.5 Interest on Ion -farm debt 3.3 2.$ .0 .0 3.3 2.8 Water and sewer .0 .0 25.6 23.9 25.6 23.9 Munici a1 olf course .0 .0 3.D 3.3 3.0 3.3 Lakeview olf course .0 .0 .7 .7 .7 .7 Ci marina .0 .0 .1 .1 .1 .1 Sanitation A .0 4.5 3.5 4.5 3.5 Stormwater utill .D .D 1.4 1.5 1.4 1.5 Total Ex enses 104.5 107.3 35.3 33.0 139.8 140.3 Change In Net Assets Before Transfers .8 8.9 11.9 1D.6 12.7 19.5 Transfers 3.5 2.7 3.5 2.7 .0 A Increase in Net Assets 4.3 11.6 8.4 7.9 72.7 79.5 i3e innin Net Assets 106.9 95.3 101.9 94.0 208.8 789.3 lwndin Net Assets $111.2 $10b.9 170.3 707.9 $227.5 $208.8 Governmental activities increased the City's net assets by $4.3 millon. 1'hIs net increase in net assets is a result of the following: • The primary increase is $3.S million in transfers which includes aone-time payment of $.9 from the General Construction Fund, with all other Transfers remaining fairly consistent from The previous year. • Revenues decreased $10.9 million from 2008 due to a one-time capital gran# of $8.2 million. When adusfing fnr that transaction, the net decrease in revenues was $2.7 million. All revenue categories decreased except for other faxes. The decrease in revenues was offset by the decrease in expenses which resulted in an increase in net assets of $4.3 million. • i'he functions reflecting the largest decreases were Genera[ Government and Public Safety. General Government expenses decreased $2.8 million from the prior year with the largest amounts reflected in Han-departmental expenses and CRA transfer which was a decrease of $1.2 million from the prior year. Public Safety decreased $2.6 million due to a variety of cost cutting efforts such as "frozen positions" [18j, fuel expenses and general liability insurance. Business-Type activities did not impact the City`s ne# assets due to a negative prior period adjustment of $8.4 million. This adjustment was for the accretion of interest on 1993 Capital Appreciation Bonds in the Water and Sewer Fund. Further clarification is in Hate 12. • The Cify conducted a water and sewer rate study to ensure water revenues supported water-related expenses and for sewer expenses fo support sewer-related expenses. The rate structure was evaluated to provide a more equitable means of promoting water use conservation. • Sanitation rates increased approximately 53% for residential and approximately 95% for corr~mercial. These rate increases reflect the fact that the contractor was held to a CPI adjustment cap for five years and the increased cost of ai! and associated materials during this time. The contractor rates were found to be comparable to surrounding corrjmunities, so the contract was extended fo fiscal year 2013. The City revised the roll- off construction and demolition debris franchise to allow multiple contractors fisfead of an exclusive franchise with The contractor. 10 Financial Analysis of the Cif~of f3efray Beach Moor Funds Governmental funds The City had two major governmental funds far 2009, the Genera! Fund and the Capital Improvement Fund. Comparative information for the two major funds for 2009 and 2008 is as fopows: Major Fund lnformatiost ($ in Millions) . F, Y > ~ =f Gein~iral _..: ... Fund,. = Gapifaf ~~, :: .lrrs ov..ement Fu~ri .__° Fiscal Year 2409 Revenues $95.0 $5.3 Ex enditures 93.6 9.5 Other financ'tn sources uses .6 1.4 Increase (Decrease) in Fund Balance .f3 (2.9) Fiscal Year X008 Revenues 97.0 3.5 Ex enditures 95.2 10.0 Other financin sources uses 2.3 .0 Decrease in Fund Balance .5 6,5 General Fund The Genera[ Fund, which is the primary operating fund of the City and is not supported by user fees, recognised $94,965,834 in total revenues offset with $93,556,917 in expenditures and $587,244 in net other financing uses. This resulted in an increase in fund balance of $817,673. The Fund Balance increased from $22,922,575 in 2008 to $23,740,349 in 2009. Of this amount, $19,747,589 is in inreserved Fund Balance which represents 21.11% of our present expenditure levels. This represents an increase of b.2%from the prior year. Our internal financial policy is to maintain 1525% of our expenditures in Unreserved Fund Baiance for first quar#er cash flaw, uninsured legal claims and other emergency purposes. Capital lm~ravement Fund The Capital Improvement Fund recognized $5,300,307 in total revenues and $9,633,673 in expenditures and a ne# of other Financing sources of $1,445,615. This resulted in a decrease in fund balance at $2,887,751. Fund Balance at the beginning of the year was $11,267,668 and, when combined with the current year, resulted in an end of year Fund Balance of $8,379,917. Proprietary Funcfs The Cify had one major proprietary fund for 2009, the Water and Sewer Fund, and five Nonmajor enterprise funds and two internal service funds. Comparative information for all proprietary funds for 2D09 and 2008 is as follows: 11 .= ._..__._..___.____ _..~ Operafina inaame C~dnc~~in Net Assefs __.~`~~?.Mrlkroirta~ .r~....~-~..~-~, _ :~_~~ ~~ ._:. ~........~0.D4 __~-:_ .~OT1S~_:-=;;:~~_._2~A?_.~~ __.::.._3iila~_:._:~...: Ente rise Funds Water]Sewer $9.1 2.3 $6.7 $6.9 Munici al Gol# Course .4 .3 .4 .2 Lakeview Golf Course .0 .0 .0 .2 Ci Marina .1 .1 A .0 Sanitation .S .2 .4 .2 Sformwater Utili .7 .7 .4 .6 internat Service Funds insurance 2.1 $.9 1.8 .8 Central Gara e .1 .l .7 .2 Waiier and Sewer Fund Water sewer service fee revenues increased from $29.2 million to $33.4 million. The Cify increased ifs water rates 5% and sewer rates by is% e#fective October ], 2008 to cover anticipated costs of a sewer plant expansion for increased treatment for the water reuse pragra m. 4ti~er ~nterr~dse Funds The Cify has five (5} other non-major enterprise funds consisting of the Municipal Galf Course, Lakeview Gol# Course, City Marina, Sanitation and the Stormwater Utility, The Municipal Golf Course has an operating income this year of $369,002 compared to $305,342 last year. fie Lakeview Golf Course has an operafing income of $53,929 versus $45,660 last year. The City Marina Fund has an operating income this year of $108,885 compared to $88,400 last year. There was a backlash to the rate increase in the prior year which Jeff many vacanfi slips. This potential revenue loss was offset by the higher rates paid by transients boaters who filled the vacant dips. The c[ot]tage rates were reduced for fiscal year 2030 which has resulted in a fully rented marina. The Sanitafion Fund generated an operafing income of $504,311 this year compared to $205,578 las# year. Revenue from service charges included an average of 53% increase in the residential collection portion of current rates. The Stormwater UtiEity Fund -has an operating income this year of $747,274 compared to $695,730 last fiscal year. Sfiormwater fees are billed and received on the property tax bills. The increase in operating income is due primarily to a decrease of $46,000 in . operating expenses. internal service Funds The insurance Fund is used to account far all personnel insurances health, fife, disability} and property anti casually insurance. Also in years 2004-2007, all property claims from Hurricane Frances, ,Jeanne and Wilma were processed through this fund, with claims casts essentially paid for either trorr- FEMA, the State of Floridp, or from our property "snsurance carrier. 12 The insurance Fund recorded a decrease in the "Incurred but Not Reported" {IBNR) claims Hability firom $5,815,988 to $4,714,863 for property, health and worker's compensation claims. The decrease retiects slower claim development for all lines at insurance and a reduction in very large claims. Ai{ required reserves are determined by outside actuaries. The health insurance total plan costs, renewable in .tune 2009-10 policy year increased 7~ over the prior year. The Insurance l~und has $3,638,113 in Unrestricted Net Assets. The Central Garage Fund has an operating income of $139,996 compared to a lass of $86,791 last year. Fuel costs decreased substantially resulting in a positive operating Ir1COme. General Fund Budgetary hliahii~hts The City budgeted revenues and Other financing Sources decreased from $99,148,110 to $98,370,559 from the original to the fnal budget. The City actually recorded $97,471,208 in revenues and other #inancing sources compared to fhe final budget. Current year revenues were greatly impacted by the slowing economy, and decline in private and commercial construction. I?evenues and other financing sources were therefore $899,351 under the final budget. All revenue categories except charges for Services were under budget. Charges for Services exceeded budget by $717,207, with emergency transport fees providing $565,000 of the average. The City's budgeted expenditures and other financing uses increased from $98,917,110 to $99,513,527 from the original to the final budget. The City actually recorded $96,740,396 in expenditures, including encumbrances and other financing uses. Expenditures were therefore $2,773,137 under budget. General Government -The departments in this category were $1,081,119 under budget for the year with the primary decrease being in non-departmental expense of $91fl,355. Public Safety -The departments in this category were $7 ,471,831 under budget for the year. The decrease was primarily due to frozen positions, and cost savings in insurance and other operating expenses. Ca itai Asset and Debt Administration Capital Asses As of September 3fl, 2009, fhe Cify had $247,386,974 invested in capital assets, as -reflected in Table A-3 below, which represents a net increase of $1,773,937 or .7% from the end of the previous fiscal year. Additional infarma#ion can be found in Note 9 Capital Assets. Tai,le A-3 Capital Assets In Millions ;, ~`.% _...,.,. _.:....,,.._.._. :•.;:a ::....:...... ' ;. liegmrting Balan~ie :10~b1.T2~D8... .lri;creases`: , .:. Dect~eases°- Ending SQlanCe . ~ .~gf2009> Govemmenfal Activities: Land 37.8 $0.4 $ .3 37.5 Construction in Pro ress 9.7 5.0 7.2 7.5 Non-De reelable Assets 47.5 S.0 7'.5 45.0 Buildin s 33.7 5.0 .2 37.8 Im rovements Other 103.7 4.4 1.5 146.7 13 l= ui ment 35.4 3.6 2b 3b.4 Less: Accumulated De reciation 77.0 8.7 3.6 82.1 De reciable Assets- Net 45.2 4.3 98.8 Ca ital Assets- Governmental $742.7 $9.3 $ 8.2 $743.8 ~U51ne55-T a Activities: Land $5.6 $Q.0 OA $5.6 Construcfion in Pro ress 3.1 .b .3 3.4 Non-De reciable Assets 8.7 .b .3 9.0 Suildin s 13.b .0 .0 13.b lm rovements Cther 151.8 3.9 2.3 153.4 L- ul ment 13.3 1.2 .$ 13.7 Less; Accumulated de reciation 84.5 4.3 2.7 8d.1 De reciable Assets- Net 94.2 .8 .4 94.b Ca ita( Assets- Business-T a $702.9 $7.4 $ . $103.b Total Ca itai Assets $245.b $70.7 $ 8.9 $247.4 fn#rastructure assets have been included in the category "improvements Other" under Governmental Activities. Major capital assets changes during fiscal year 2009 were: • Fre Station #4 was completed early in the fiscal year for $2.5 million. The fire station was damaged during the hurricanes of 2005 and needed to be demolished and rebuilt to new standards. There were also street improvements to Atlantic Avenue, the main thoroughfare in the City. The improvements inciuded repaving, signage, lighting and beautification. • A large amount of the decrease relates to the demolition of ]v[i]ler Piefd, a Buclcy Dent baseball complex. The complex is in the process of being rebuilt. + Total capital assets in the business-type activifiies have remained relatively constant from the prior year. pebf Adrninisfrafion As of September 30, 2009, the Cify had total debt outstanding of $118,2 million compared to $128.6 million as of September 30, 2008. The $118.2 million debt at September 30, 2009 includes fhe following: • $29.5 million is genera[ obligation bond debt which is debt backed by the full faith and credit of the City, • $37.4 million is revenue 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, • $37.4 million is revenue bonds that are backed by a pledge of water and sewer system revenues, • $8.3 million is for compensated absences, • $4.7 million is fnr insurance claims reserves and, i4 • $.4 million is for instalment agreements that are secured by the promise to budget and appropriate sufficient revenues to pay the debt. The Changes in long-term liabilities for the fiscal year ended September 34, 20D9 are summarized as follows: Table A-4 Long-Term liabilities f$ in Millions) u~ ' ~ - Begr~nrng Brsiance .._ _ ~ ,- lrrcreases ~ Decreases hntlri~g .: Balance .... Governmental Activities: Revenue Bonds $39.5 $D.0 2.1 $37.4 General Qbli ation Bonds 31.8 O.D 2.3 29.5 Unamortized Premium 1.2 D.0 .1 1.1 Unamartized Loss on Retinancin ,5 O.D .1 0.4 1•otai Bonds Pa able 72.0 0.0 4.4 67.5 Installment A reements .2 .2 .1 •3 Cam ensated Absences 7.4 .9 .9 7.4 insurance Claims Pa able 5.8 6.8 7.9 4.7 Governmental Actmties $85.4 7.9 13.3 Sfl.~ Business- a Activities: Revenue Bonds $42.6 0.0 5.2 37.4 Unamortized Premium .1 D.0 0.D .1 ltnamortized Loss on Retinancin .4 D.0 .1 .3 Total Bonds Pa able 42.3 0.0 5,1 37.2 Accrued interest on CABS 8.4 .7 O.D 9.1 installment A reements .1 .] .7 .1 Com ensated Absences .8 .1 0.0 .9 BrtsinessT a Activities $51_b .9 5.2 47.3 Total Debt Outs#andin $137.[3 8.8 '18. 127.3 During fiscal year 2009, the Cify had the following debt activity: • Entered into a 48 month insfallment purchase of $260,()0() far parking meters in the governmental funds and a 48 month installment purchase of $131,420 for golf carts in the business type funds. • All other decreases in bonds and installment agreements were due to principal payments on the debt. The general obligatiar~ bonds of the City maintain an underlying rating of AA- tram Standard & Papas and Al from Moody's investors Services, Inc_ For more detailed information regarding the City's debt and debt financing activity, refer to Note 12 Lang Term Debt. ~conamic Factors and FY 20U9-10 Bud~ef_and_ttates :~ The City recently received the FEMA response to a second and final appeal by the City for $494,990. Since this appeal was denied, the City has a legal action in place against the debris contractor and is presently negotiating a settlement. These funds had already bean recorded in a prior year as a payable in the Sanitation Fund. The recovery of These funds from the Contractor will represent revenues in the year collected. 15 •;• The City Commission, in light of the recent economic environmen#, established a budget Task Farce consisting of citizens with tinanciai, insurance and real estate backgrounds to analyze the financial records of the City and provide observations and recommendations to increase revenues, decrease expenses or improve business processes. This task farce served for eighteen months and produced a reporf with over $4 minion in recorr~mendations. In response to this, the City Commission established a permanent Financial Review Hoard, consisting at seven voting rrsembers and two alternates. The members of the Board have financial, real estate and related management backgrounds, •;• The City has taken several steps to maintain balanced laudgets for the past year such as the efrnination of fifty-one positions,. freezing salaries, reducing grants to other entities, line item reductions in operating budgets, deferred capita[ projects and other budgetary controls. These budgetary impacts are expected to continue into the near future. The Gity is currently conducting a review of pension plan alternatives, the possible development of a City health clinic, revised health pion benefits, outside engineering analysis of water Toss containment anti other management analysis of business processes #o either increase revenues or decrease costs. Requests far lnformatlon This financial report is designed to provide a general overview of the C'ity's fiinances tar 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 1 DC} N. W. i Sr Avenue Delray Beach, FL 33444 Phone: (~6t j 243-71 i 7 . 1~ basic ~~nanc~a~. statements . Crr~t o~ n~L~~ ~~ACx, FLQI2IDA STA'1`Elvli~NT OF AlET ASSETS Seg#ember 30, 2009 Primary Government Cotrt~anent Uoits Caimnrrlllty Downtown ltedeveloptnerrt Aevelopment Governmental Business-Type Agency AaHtarity Activities Activities Total (CT2A) (DDA) ASSETS Cash and cash equivalents $ 7,696,846 $ 27,274 $ 7,724,120 $ 13,14$,512 $ 700,762 Invcstments 46,282,480 592,729 46,875,209 - - Receivables; Accounts, net 2,968,247 3,731,080 6,099,327 1,021,864 1,500 i3nbilled accounts - 1,269,278 1,264,278 - - Notes receivable 5,518,875 - 5,51 S,87S - - lnterestreceivablc 1,063,955 - 1,063,956 - - Duefrom other govemrnents 1,765,762 $66,207 2,631,969 - - lntemalbalances (11,654,132) 11,654,132 - - - lnventary 70,$93 327,610 398,503 - - 1'repaiditems 581,455 74,1}4 655,569 - 6,969 Net pension assee 52,025 - 62,D25 - - 1]epasits - - - 4,011 - lh3efram eomponen#uuifs 2,323,987 - 2,323,987 - - 13ondissuancecosts,nat 5fi0,496 770,759 670,665 27,64U - 1Festricted assets - 7,548,b60 7,548,660 7,150 - Otherasset; - Investm~t in regional plant joint ventgre - 32,209,642 32,209,642 - - Capital assets: - _ 1~}on-depreciable capital assets 45,428,054 8,94$,798 53,977,852 23,465,339 - Depreciab7e capita[ assets, net 98,805,093 94,604,029 193,409,122 2,522,935 - Tatal Assets 201,074,037 15],364,722 362,438,759 40,191,451 109,231 L7ABILTTTINS Accounts payable and accrued expenses 4,'737,244 1,617,839 6,355,083 409,275 7,214 Contracts payable and retaix€ages - 55,140 55,140 - - Ileposits 228,803 1,078,799 1,307,602 7,150 - lhrearned ruti+enue 3,79],194 74,696 3,S6S,890 6,154 - Acenxedinterest on fang-term debt 361,OSO 49,155 470,205 - - Aue to primary government - - - 2,323,987 Payable from restricted assets - 5,956,6D0 S,95G,600 - Net other pastemplayment benefits obligation 715,917 14fl,609 856,526 - - Nancurrentliabilities: Due within one year 5,730,453 158,$S8 5,889,311 1,652,914 - Duein more than anegear 74,272,093 47,961,775 116,233 868 E 921,873 - Total Liabilities 89,836,754 51,093,471 140 930,225 17,321,353 7,214 IVE1' ASSE'T'S Invested in capital assets, net of related debt 76,546,948 66,19$,545 142,748,993 11,473,487 - Reshictedfor: Debt service 509,333 509,333 7,150 - Cagita] Projects 9,962,213 1,592,060 7 ],554,273 - - Specificpurposes 257,194 - 257,194 - - L7nrestrieted 21,962,095 42,4$0,646 66,442,741 11,449,461 102,017 TatalNetAssets $ 111,237,281 $ 170,271,251 $ 221,508,534 $ 22,874,D9$ $ 102,017 ?he notes to the financial statements arc sn integral pari of this statement, 77 ^ 4 N fpjq(( o ~ o ~ Q ~ '~ W O A ~ W1 m t~ ~ d 4~ ~ ~ ~ ~~yy-- /--1 m ~ d A. ~ F4 C ~. U ~ b m d A N Q`t w ~ o ,~ R w m A aRi o ~ ~ ~ a~i d . '~ d ~ 'D ~ [O 'cT as Vt N ~ hl .u m 0o N oo -Wr ~ M ~ ev ~ m v u~ m ffi ~ i ~ i s m N © ~ ~ ~ P4 ~ ~ ~ nt m a~ N P~ .-n .a oo co m v~ rv a 0o n '+ }~. ti W rh 60 N ~N} d ~M-. v ~ .M.. ~ 00 .-. v m ~D O l~ m ~ a ~ rn rn <n ~ W C ao 0 0 0" p w .G m N~ o ~ ~ G !S O U 6s " m ~ ~ rn v .~pbp ~ 4 N Q O~ O ~ ~ .p ~D 6. h d ~ ~ b 7 ... 19 v~o n w oo 'n .-~ oo vi d- N m o w v-. a. o w nNOOOONa,o~v ~ oD C ao U N d~ tiO o rm, ° ~ r m m o ,-. ~ n ~o ao ve ca in ~n N m © oD V] O+ 4 4 h N 00 00 [~ O~ U C~ V m O m O~ H d~ V O W O N N ~D V^ o m .-+ ~a r- o~ as 0 ~ ti rn < < ~ ~ m v ~ o, O+ vi N oa a oo [~ N N ~ ~ b ~ V i V j m ~ ' ' ~ ' O i sl' O ui vj ~ v" ~ ~n vi 'n ~ +T ~ o ~ ~ ~ ~ cry ~ .-, : ~. ~ ,~-,' ~. ~ ~ ~ ~~' ~ Nd. ~ o ~o to" cn o ~ m 0 4 ° ~° v rn oo c; ca ~ m [~i rn N v 4/ •--~ ,--~ N ~ CA i~ ,-. Ml cn ve oo N h W N N V O 'V 7~ ,--~ © ~o ry en ~n -+ N 1 ~ 00 4 v~ ~ Yl m " n ~D as +o " M v~ v m oa" oo rn n a vi .o ~; oo c6 wm~n ooo -<N N Q~ M O~ m M1~ M 'd„ 7 d 0+0 b m 0 h vi no" .-, n ~ ~ N o N ~ N N rn n a +-. a ~ oo ~ eo tT O~ M N ~ ^M1d' a N V n Y~ h M G~ Cx m ri oo" .--~ a o a+ai .n .n. N ~ on ~ ,."; o°jo M of m N m m vi o w N N~ m n ~D M O~ r!i Oe m [~ Qi m V Y~ ~n M ~ N .w ,-~ C' ip ~ v i ~ ~p T ~ ~ d d r-' ~ N ~ esa see ~oov~enow o -.~ o a N~ 00 ul M Y.. P1 P 01 lp P~ O Q ~' ~ O O O O 4l T h 0 ~ OQ ~ b ~ t ~ . o ...~ ~l -~ m ~ •--~ rw N © N '+ n n N ~P wl V1 4 4 i.. ~ 4 00 N ~B h ""~ ~C ~D N m h W o0 ~O Vl O m [+ ~D ~D N m V' rn ~9 h N ~O ~D ~ V \p pj N N VI m Qi el' N N '7 C l~ y .~ m N W U d O V O Ci' O+ ~ My (V N pq hi [~ 4, V m S" ~ 1~ N 4~ 4 ~ N N ~ m ~o .-. N m m ~ N ~ ~ _ V ra ~v ~ ~ m o0 O n N m N .~. 7 .n ~ ~ .N-~ a a+ V N o~ 4 ~ er m C~ d m e N~ i ~ W 'n «. N V M vl N i~ O N E oo vl m ,~ V QY o co eN V] N` el•" .-+ r.i G ai hi T v~ ve _ . ~ M M ~A OA P 6i M Yl ~ M V Oi O~ G. 4l n pr m [~ CO t ~ N <F ~D O~ t~ .-+ ~ t+~ [~ C- ~t vl 6. . N V a 7 m ~ vi [V Y .--~ vi tli O _6 ~ .. . 5q ~ ~ i/] !N 59 0 s. ~ m` U ~ a ~ ,~ ~= ~ ~ ~ ~ ~ ~ ~ ~ ~,~ ~ a ~Q ~ & ~ ~o °' ~ v ~ ~ t~N. W m ~ N ~ A ~ ~ ~ ~ ~.' C9 ~ ° ~ w °' o ~ ~ r°~ r4~ S ~' ~ ~ ~ ~ 5 .. ~ C3 ;~ ~ ~g ~ b y n F E+ ~ ~ m °' '. ~ O~ q>q.~`> ~'a o d cnC7~j ~ ~ a'~ ~R o ~s~~~ ^~ ca m 7 y.s? u ~~ C7 mti ~ ~ tl1v ~ ~ ~:3A7lz, ~''~U ~Hazri~~S~~ ~ q ~ ~ WOva ?" a .~ cn ~ ~ ~ r ~ ~ .~' d ~ .° ~ ~ ~ ~ a° a ~ ~ ~.~FW ~ o ~p :" ~ .mac .5 d ~ ~q a .~ ~ ,~, E~ ~ ~ ~~ ~ ~ 'a ~ F [°, .per., ~ [-~ ~ O ~ ~ ffi ~ v ~ ~ ~ E-~ ~ ~ 6 oCSd"aw.~ ~3~~u~~ dU~l ~ww"~v3a° ,~~ CITY flF DELRAY BEACH, FLORIDA BALANCE SHEET GOVERNMEbfTAL F[lIdI35 SeptGnther 34, 2UD9 ASS'G'I'S Cash and cash equivalents lavestrnent5 - AGGOUnfs rereivs~ble, net ~ Nates receivable - lnterestreceivable Due from other governments Due from other funds . inventory Prepaid items I]ue fmm component units Tote] Assets L[A.BIUITIITS A]VD F[li\TD 13ALANCE3 Accounts payable and accrued items Deposits Due to other funds Deferred revenue Total Liabilities FC1ND I3AI.ANCE'S Reserved for: ]nventory Prepaid items Long-term notes receivables Encumbrances Debt service Capital projects SpF.Git-iG pArpO.5B5 Unaserved, undesigoatcdrepor#ed in: General Puad Capital Projects Funds Special Revenue Funds Total Fund Balances Total Liabilities and Fund Bafanees Major Funds Capital 1~Fe~u-Major 'l'otrti General Improvement Goverumeutal Govcrnmaxital Fund Farad Funds Fends $ 7,297,466 $ - $ 247,452 $ 7,545,418 44,952,952 3,796,028 - 44,748,980 2,783,856 - 139,161 2,923,Q]7 3,771,484 - 1,747,39] 5,518,875 1,463,956 - - 1,063,456 355,216 796,932 613,6]4 1,765,762 - 2,774,886 6,764,664 8,939,554 23,824 - - 23,824 59,891 - 871 6[1,762 92,025 2,213,96fi 17,996 2,323,987 $ 56,440,67D $ 9,581,812 $ 8,431,649 $ 74,914,131 $ 2,453,374 $ 1,076,895 $ 194,169 $ 3,724,43$ 228,803 - - 228,843 27,849,f196 - - 27,844,096 2,129,f148 125,00D 2,886,797 5,14Q,845 32,660,321 1,201,895 3,1780,966 36,943,182 23,824 - - 23,824 59,891 - 871 ~ 60,762 3,563,484 - - 3,563,484 339,576 - - 339,576 - - 509,333 509,333 5,985 - - 5,985 - - 257,194 257,194 19,747,589 ~ - - ]9,747,589 - 8,379,917 ],582,296 9,962,213 - - 3,50D,989 3,SOD,989 23,740,349 8,379,917 5,850,683 37,970,949 $ 56,4D0,67U $ 9,58],8]2 $ 8,931,649 $ 74,914,131 The notes to the financial statements are an integral part of this statement. 19 CT`1`Y OF DRLRAY BEACH, FLORIDA ItECOAICILIATION OF THE tiOVEIiNNIENTALF0NDS BALANCE SHEET T~ 7TIE STATEIviE]gT OFNET A55ETS September 30, 2009 Tata! Fond Balances - Governmental Funds Amounts reported far gover~rm¢nfn! acrivi#fes in the statement of net assets are different because: Capital assets used in governmental activities are not finareial resources and Iherefaxe, are not reparled in the funds. Capita] assets Less accumulated depreciation Ot3rer long-term assets are not available to pay for earreat period expenditures and, therefore, are deferred in the funds. Interestrecesvable Lang-#erm receivables Net pension assets a# defined benefit pension plates are reported in the sr&tament of net assets_ Because the net pension asset does not represent available, spendable resanrees, it is not reported in governmental funds. Premiums, discounts, gains snd losses on refundings are reported as "Dtlrer k'inancing Sources and Tlses" and bond issuance casts are clsarged to expenditures when debt is issued in the governmental funds. 'These items, however, are deferred and amortized over the life of the bands in the govemoment wide statements. Bond issuance casts Loss on refunding Bond premimn Long-term liabilities, iacluding bonds payable, are not due and payable in the current period and therefore, are not reported in the funds. Accrued interest payable Bands and installment agreements payable Compensated absences Net other postemployment benefiLc obligation Internal service funds err; used by management to charge the casts of fleet management and insurance to individual funds. The net assets of the internal service funds are included in governmental activities irr the statement of net assets, Net assets Less amormt allocated to business-type activities Total Net Assets - Governmental Activities 7 he notes to the financial statements are an integral part of this statement. $ 37,970,949 $ 208,236,23(? (7z,o44,14s~ - 136,192,082 995,780 403,871 1,349,651 62,025 560,496 420,978 {1,128,60 p47,13a~ (36l,OSO) (67,139,569) (7,352,723} (697,324} 12,412,999 (1,052,627) (75,SS0,668) 11,360,372 $ 111,237,283 20 CITY OF DELRAY BEACIT, FI.QRIDA STAT)N1k:NT OF RF.VE'N [7ES, EXFENi3f1'GitES AND GHAIVGE5 IN 11C7ND BAT,ANCES CiO VE1L7~EI~IIEhtTAT, FU7317S For the FisealYexr Ended September 3 0, 2fl09 Major finds Capital Non-Major Total General lxnprovement Governmental Governmental Fund pYtnd finds finds 1ZFYENU]ES Taxes $ 65,040,400 $ - $ - $ 65,04D,40D Fees and permits 8,393,452 - - 8,393,462 t Intergovernmental 7,898,284 2,530,278 2,289,D97 12,717,659 } Charges for services 7,982,407 - 596,879 $,579,285 Fines and forfeitures 574,409 - 179,D54 753,473 lvliscellaneaus 5,076,872 2,770,fl29 835,520 $,683,421 Tat$1 Revenues 99,965,834 5,3Dfl,307 3,901,56D 104,167,701 T~'1CND~ITT]~RES Carrctst General government 17,899,747 308,475 2,792,792 21,041,014 Public safety 53,570,453 171,192 292,376 54,034,021 Physicalcaviranznent 4,353,670 1,771,751 1,326,450 7,253,871 Parks and recreation 11,86D,062 234,313 396,906 12,491,281 Capital outlay 370,610 7,147,942 502,834 8,021,386 }debt service: Principal retirement 3,658,474 - 895,361 4,553,835 Interest and i'tscalaharges 1,847,401 - 1,2$6,173 3,134,074 TotalExpeuditnres 93,560,937 9,633,673 7,Z94,S92 11D,489,482 Excess at reVCnIIeS 4Ver (~IIlder} expenditures 1,404,917 (4,333,366} (3,393,332) {5,321,78]] dTH6R k~T.AlVC1NG S©lE2C)ES (#1515) lnstalhncnt agrecsaxentissned - 250,G0D - 260,60D Proceeds from sale of capital assets 3,SD2 - 46,ODD 49,502 Trans€ers in 4,101,919 2,136,SS2 2,475,728 9,234,199 Transfers out {4,692,965} (951,537) (48,108) (5,692,610 Total Outer Financing SorFrces (Uses] (587,244 1,445 615 2,973,620 3,831,991 Net change in fund balauees 817,573 (2,887,751) {419,712) (2,489,790) - F~md balances -October 1, 20D8 22,922,676 11,267,66$ 6,27fl,395 40,460,739 - Fwad balances -September 3D, 20D9 $ 23,740,349 $ 8,379,917' $ 5,85D,683 $ 37,970,949 The notes to the fmancial statements are an integral part of this statement. 21 CITY OF DELItAY BEACH, FLORIDA RECONCILIATION OF T1IE CxDVEIZNNIF~NTAL RINDS STATEIvI)vNT OF REVENl1E5,);XPENI)1'1'I]RES, AND GIIANGES IN FUND BALANCi35 TO THE STATEMENT OF ACTIVITIES For the Ftscal Year Ended September 311, 20p9 ' let Change in Fund Balances - Tnha1 Governmental Finds $ (2,489,790) Amounts repotted fvrgovernmenral activities in the statement of activities are diiferent because: Governmental fitrtds report capital outlays as expenditures. Ilawever, in the statement of activities, the cast of those assets is allvcatsd aver their estimated useful lives as depreciation expense. Depreciation expense and capital outlays in the current period were as follows. Gapi#al outlays $ 8,02F,386 Depteeiativn expense {7,166,20[1) 855,186 In the skatetnent of activities, only the gain ar loss vn the sale of capital assets is reported, whereas in the governmental funds the proceeds frotn the sale increases financial resources. The change in net assets differs from the change in fund balance by the net book valae of the assets retired. (49&,380) Snore revenues repotted in the statement of activities do not generate current fnancia3 resoruces and are therefore not reported as revenue by the funds. Donations of capital assets 98&,840 Change inlong-term receivables 21,369 1,008,209 Some expenses reported itt the statement of activities azc not reported in the funds because they have no effect on current financial resources. Change in net pension asset {3,83 Net outer postemployment benefits obligation (697,324) Compensated absences (7,748) Change in accrued interest payable 29,243 - (&79,665) Debt issaed provides current financial resources to governmental fiords, bul issuing debt increases long term liabilities in the statement of net assets. Governmental funds report the effect o£issue costs, premium, discount and similar items when debt is issued, whereas these amounts are deferred and amortised in the statement of activities. Aebt lssttartee InstalEtnent agreement (2ti0,500) DebtRetir-ement and Issue Casts Ytiztcipal paid 4,553,835 Amortization afbond issuance casts (2]3,231) Amortization of debt costs 39,92© 4,380,524 Internal service funds are used by management tv vharge the costs of fleetmaintenance and insurance to individual funds. 'Fite net revenue of internal service funds is reported tiviHr governmental activities. Fund statement net income Less alloca#lnn to business type avtivities Change in Net Assets of Governmental AcHvitles The notes tv the financial statements are an integral part of this statement 2,431,8&8 (373,391 2,058,477 $ 4,375,961 22 ' C7'I`Y O~ DELdtAY SEACiI, FLORSDA STATEIsfF.NT OF NET ASSETS PROPRiRTARY ):UNDS Septvmber30,2009 - 7VfajarRund ~ Tofal Caverpmeatal Water $uslaess-'T'ype Aedvldes- and Plan-~ar ACkiYillied- Inierna] ' Setrer Enterprise Enterprise Service bbod -..,. 1Tnnds Pupds _ ----- __~nds_ ASSETS Curreat Assetr: Cash and cash equivalunts $ 2,000 S 25,274 $ 27,274 $ 151,428 j Inveshaents 592,729 - 592,729 1,533,500 ~ Accouatstecrsivable,rrot 2,49$,465 632,515 3,13E,080 45,230 4nbilled accounts sr~civablc - 1,259,278 - I,2G4,27fl - Dpcfmmothcrgnvcmmcais fl32,400 33,307 855,207 - Duefmmvlherftmds 6,772,574 5,108,551 11,881,125 8,308,[)41 TavcnWry 213,298 11A,3I2 327,510 47,059 Prepaid expanses - 74,114 74,1 i4 520,693 Reatricled assets: Cacti and cash equivalents 5,288,092 594,flG3 5,$$2,155 - lrrvcstments 1,G6fi,505 .__. 1,556,595 TatalGnmentAasets 19,133,$41 6,582,236 25,X$,077 10,605,961 Nvpcurrenk.Assets: _ 7'mperly, land and equipmrrf: Land 882,792 4,694,070 5,576,862 - Burldisrgs 9,244,3$7 4,37D,I04 13,614,491 909 bnpmvementsa[herthm~bnildings 136,479,812 I4,905,54b !53,385,358 - Equlpmeat 70,714,$15 2,995,708 13,X0,523 17,715,D3} Conshuclian iaprogress 3,048,495 324,441 3,372,935 - Accnmalataildepruviation - (77,[89,732) (8,916,6}1) (86,106,393) (10,074,875) -, Olher assets: Bond issue costs, net 51,292 5$,$77 } 113,169 - Invesfinent iv re8ivesal plan[ jvintyeatum 32,204,642 32,209,592 TvtalNvncstrreotAsaels E17,441,5D3 }8,432,135 !35,873,538 7,641,065 TvmlAsscts E36,577,344 25,D14,371 15L,591,715___ .__18,2A7,D2b LiA71II,1TIE5 Current Liabilities: Aecvuntspayableandacauedczpc.uses 598,044 914,790 L,GI7,834 1,012,8D6 Cvnttactspayableandretamages 55,140 - 55,190 - Unrarncdrevcnuc 63,113 11,183 74,696 - Acerued interest on long-trrm debt 49,155 - 49,155 - Ga.tuntmaturities of inslalSmeot agroemeohs - 39,435 39,435 - Cumsnt maturities of revepue bv~s 7A,837 - 74,$37 - '_ Compensated absences payable 44,5$6 - 44,586 5,175 Insuraacecluimspayable - - - 1,735,416 ' Duc to otharfunds - 1,279,620 L,279,G20 - Refimdable deposits 454,388 124,417 1,078,799 ' 1,939,558 2,374,439 4,3}4,]07 2754,397 Current 1.labllEfles Payable from Restricted Asse4: Aermed interest an 3nng-term deb[ 742,09 [ 76,472 812,Sb3 - Cwrrnl tnaturitit5 of revenue bonds 4,520,446 523,591 S,]AA,D37 ~__ 5,352,537 59A,OG3 5,95G,GIN3 Tvlal CumeetlrabiGtiws 7,302,205 2,958,502 10,270,7D7 2,754,397 Naocnrr~tLixhilides; Net otherpvsteraplm~mem hcacfi4e abligativn 128,989 11,520 lA0,GD9 1693 Long-fc w portion of comperrsalcd absc:nccs payable 754,8A0 A7.791 602,63 [ 82,590 fAag-tans portion of insusunce claims payable - - 2,9?8,447 Accrued interest an eapita€ appreciation lurnds 9,052,171 - 9,952,17 E - Itcverme bonds payable, net 27,503,962 4,395,765 31,999,727 - }nstallment agreemeats 97,246 97,245 ToIalTlouavrcntLiabstties 37,549,962 4,552,422 42,102,3$4 3,079,63Q TvtalLiabilities 44,852,157 ____ 7,526,924 52.373,091 5,$34,027 NET ASSETS - Invested in capital assets, net ofrelated debt 52,8$1,324 13,317,221 56,19$,545 7,541,065 ltieshicled for. . Renewal sad replacement 1,592,069 - 1,592,060 - llorestricted 37,251,733 4,176,226 41,428,019 4,771,434 'fvtalNetAssets $ 91,725,177 $ 1T,493,447 109,218,624 $ 12,412,999 Adjastmraa tv reflect the cvnsolidativa of iateraal a,:rvicE fbnd activities relatcil 1v cntcaprise funds Cumrnvlative prior year adjpshnants 679,236 Cnnmu year adjustment 373,391 NctAssctsvfBusiaass•TypaAcliviiias,SlalmarntnfNetAssets $ 119,27E,25[ The notes to fhe financial StatexriG dS are ea intcgrsE part of !iris statemerd_ 23 CITY OF DELRAY BEACH, FLDRiDA STATEIVIENT OF REVENUES, EXPENSES AND CHANGES IN NET ASSETS PROPIiJETARY FUNDS p'or the Fiscal Xear Ended September 30, 20D9 OPERATING REVENLIG5 Gharges for services Qther operating revenue Total operating Revenues QPi;ItATING E7Cl'ENSES Personal services tither operating expenses 1]epreciatian Tntal Operating Expenses Operating Income NQNOPEItATING I2E'S~NCTES (I~XPl!?.~ISES} Interest revenue ltentrevenue Share of regional plant joint venture net income lnsuranee TCCOVCrieS Interest expense Clain {lass) an disposal of equipment Other nnnnperating expenses 'I`ntel Nonoperating Reveatues (Expenses} Tarcrnme Befoze Capital Contributions and Transfers Capital contributicns Transfers in Transfers ant Ghange In ]~€et Assets 6,735,589 1,214,931 7,950,520 2,431,868 Net Assets -October 1, 2008, as restated 84,989,588 16,278 516 101,268,144 9,981 131 NetAssetS -September 30, 2009 $ 91,725,177 $ 17,443,447 109,218,624 $ 12,412,999 Adjnstts to rellect the consolidation of internal service fund activities related to ~terprise funds Gummulative prior year adjustments 679,236 Current year adjustment 373,391 l~1et Assets of Business-Type Activities, Statement ofNetAssels $ 110,271,251 F,econciliatian of Change in Met Assets to the Statement of Activities Change In Net Assets as reported abave $ 7,950,520 Adjustment to reflect the consolidation of infernal service fund aclivities related to enterprise funds Current year adjustment 373,391 Ghange In Net Assets as reported on the Statement of Activities for Business-type Activities $ 8,323,911 The natal to the tinancsaI statements are an integral part of this statement. Major Fnnd Total Governmental Water Business-'T'ype Activities - and iVnn-Nlajvr Ac#lviities- Internal Sewer Enterprise Fnterprise Service Fund Funds Ft[nds Funds $ 33,445,652 $ 11,295,9D3 $ 44,741,555 $ 15,086, 167 1,092,926 78,927 1,171,853 2,624,39D 34,538,578 ! 1,374,830 45,913,4D8 17,71D,557 7,693,704 604,447 8,298,151 1,209,048 14,155,997 8,194,787 22,350,784 12,785,241 3,544,926 792,195 4,337,121 1,519,844 25,394,627 9,591,429 34,985,056 15,514,133 9,143,951 1,783,4#11 1D,927,352 2,196,424 - 6,897 5,893 33,975 - 147,I47 147,147 - 1,846,822 - 1,846,822 - - - - 8,9I5 (2,20x,748) (211,454} (2,412,202) - {215,294) 97,b68 (117,626) 62,779 (2,078) 512} {2,590) - 571,298 39,746 {531,552} 105 669 8,572,653 1,823,147 ID,395,8D0 2,302,D93 1,048,791 53,82D 1,102,611 103,473 98,705 - 98,7D5 356,006 (2,984,560) {662,036) (3,645,596) (329,7{14) 24 CITY Oi: DII,i{AY BEACH, i•T Oit1DA STAT;;ivlEta'1' OP CASH FLOWS PROPRIETARY1jUt~S Far thtFiscal Year IIuded September 30, 20(19 Major Fund Total Covernmeatal Water Business-'type Act3vifks- sued Nola-Major Activi#'se9- lnternai Sewer iinfcrpt9se Enterprise Service Fend Flrads Funds Funds GASH FLOWS FRONT OPE1lAT3NC AC3"[13'171;5 Reacc€pis from customers amd useea $ 35,417,737 $ 10,772,867 $ 45,790,684 $ 11,604,327 Receipts form othrr.5 257,948 146,673 404,823 8,975 PaymenEStosuppliers (20,614,117) (8,395,166) {29,089,743} (13,101,926) Peymcntstaemployaes `__(7,501,t28) {567,859} .(8,888,987) (1,190,797} Ncl cashprovidcd by (used zn) operaliag acGvjGea 7,164,400 ],936,$91 9,496,695 (2,479,475} CASH FLOWS PRDM NONCAPCI'A14 F3NANCiN6 ACT11ti'1'iE5 Transfers from other fiords Transfs:rs to atherfunds Net eashprnvidcd b]' (used in) aoncapilal fmancing activities CASH PLOWS FRONT CAPP3'AL ANTI RI81LA'F1~uA FINANCING ACT3VITHsS Acquisitiau and cons[taction of wpihd assets Proceeds Imm the sale of capital assets Capiwl contdbutians hndallmcnf aseccatmtF issntd Principal paid on capital acM Intetest pa€d as capital debt Nel cash used in capital and related 3'mancitty activities CASH PLDY€'S RROM INVES'fTNGACTI1iT1FS iolucstraceivcd Sale of imesimm3s Purchases of invcsfinenk NeE cash provided b3' invrsfing activities Net chaage in crib and caafi equivalents Cash and cash equivalents- Octaher 1, 30D8 Cash and caslt cquivalenls-September 3D, 2009 98,305 - 98,701 3iG,OD6 (2,984,566) (652,D3G) {1,645,546) (329,704) (2,$85,855) {662,035) {1,547,893) 26,3D2 (5,1A$,867) {915,212} {6,D54,079) (1,747,137} 14,164 284,041 294,205 50780 853,516 47,945 895,561 - - 131,420 131,420 (4,550,789) (712,205) (5,362,994) - ~19,591) ~ (14iF,G23) 7,480,214) - iU,2Sl,4G7j (1,334,634) 17586101 1139557 - 5,897 6,897 33,973 1,023,052 - ],023,062 3,495,473 (78,020) 78028 945,042 6,897 953,939 3,529,448 (5,032,280) {53,078) (5,085,358) (53,282) 10,322,372 672,411 10,994,787 214,710 $ 5,290,D92 $ 619,337 $ 5,904,429 $ 151,428 Recaecilfatiea o! cash aced cash egeSvalents fo statement of net aacc~; Tlnreslricted cash and cash egtuvalmts ResirinW crib and rash equivalents Cash and cash equivaleada - ScpECmbcr 3R, 24D9 Receneiliation of operating income ip net cash provided by (seed €n) operating activitia: Operating income Adjtutmenis to recnncilc opcraiutg income Ea net crib prov€dad by (used in) operating activities: ]Teprec'satiaa cxpcnst Provisiott for daubtfitl atcaunts MisceUanemts and aEhtr tevtmta {oxpenaa) Ghattgc in assets and Gubilitics: Accouals receivalt3e Doe Irom othu govemmcat$ -uc from outer funds inventory Pn:paid expenses Atcaunts payabJtand accrued cxpcascs Uatamrd rnvcnuc Camptnsalcd absences ]tayabla NeE OPEB ohligalion Insurance claims payable IJue to atleerfimds Retitodable deposiEs Total adjustmeWs Net cosh provided by (used in) operating a~vitiea NON CASH GAP1TAi, ANA 11E1.AT7;U F1NA1vC1NC AC7i7:VI'[TES Amortization of bond preatittms Amortization of debt Tessa costs Amorti~lion of defcmed loss on:Gfwrdings Capitd cantnbatinns Tfie naffs to Ebe fi~ncial staECnecnts axe an integral part of this stattentn4 $ 2,400 $ 25,274 $ 27,274 $ 351,426 5,28fl,492 594,053 1,862,155 ~. -. ~$ 5,29Q492 $ 5]9,337 $ 5,909,429 S €51,428 $ 9,143,95€ 1,783,441 $ 10,927,352 $ 2,[96,424 3,544,926 792,195 4,337,121 1,519,844 163,882 - 163,862 - (2,078) 146,635 144,557 8,915 1,402,016 {176,080} 1,225,936 66,716 {832,90D) {33,307} (866,207) - (5,$9D,383) (7,D50,615) (6,94D,998) {894,542) (2,814) (36,660) (19,534) 26,424 470 316,772 117,292 844,484 (565,793} 3411,088 (225,705) (85,46 48,078 (6,409) 41,659 - 63,567 4,968 68,555 (336) 128,989 11,620 140,609 7893 - - - (1,301,125} - 3,624 3,624 (5,078,404) {41,89]) 20.483 {21,408) __ (1,983,957) 153,294 {1,830,657) {4,671,$99} $ 7,16D,400 $ 1,935,695 T 9,D96,695 $ (2,479,475) $ £32,615} $ (3,834) S (42,450} $ _ $ 29,84D $ 8,722 $ 38,562 $ $ 14D,626 $ 33,841 S 774,475 E $ 195,175 $ 11,875 S 207,450 $ 103,473 21 CITY OF BELRAY BZ/ACH, ~'I.O1tII?A STATEMENT OF Fll]1JCIA12Y NET ASSETS Fil}UCIA1tY L C71+I1)S September 30, 2009 Pension Trust ASSETS Cash and crib cgaivalents Investments: Bonds and other interest bearing investmeuts Etluity securities Nlutasl foods Alternative investments Due from broker for securities said Ewployee contributions receivable Prepaid expenses Interest and dividends receivable Total Assets P.IABILiTIES Accounts payable Due to broker far securities purchased Stale monies held in reserve 17eferred retirement option plan payable Total Liabilities NET ASSETS kTeld in trust far pension benetlts The notes to the financial statements are an inlegal part of Hais statement. ~ 4,215,443 25,825,265 65,U59,477 72,365,422 10,565,690 1,330,860 84,343 254,573 370,061 • 180,086,134 127,703 823,188 1,490,124 9,742,718 12,183,733 $ 167,902,401 26 CITY OF DELRAY BEACH, FI.OI{IDA STATL~]±rIENT OF CHANGES IN PIDCTCIA1tY NET A5SET5 FEDiTCIARY FTI1~S Far the Fiscal Year Ended September 30, 2009 ADllI't'IONS Coniribations Employer Slate Plan members Total contributions Investment earnings (loss) Net depreciafio€s in fa€r value of investments interest and dividends Less investment expenses -custodian fees Net investment loss Other meanie Total additions A~bUCTIQNS $enefrts Refunds of contn'bntions Other aperating expenses Total dedactians Change m Net Assets Net AsseLS -October 1, 2Q08 Net Assets -September 30, 2009 The notes to tha 1-tnancial statements are an integral part of Phis statewent. Penslan Trust ~ 8,003,395 1,400,752 1,751,922 11,155,069 (3,644,789) 2,724,511 (92U,278) 7]4,23] (1,634,5x9) 273,380 9,794940 10,898,297 102,140 213,851 11,214,2$8 (1,419,348) 169,321,749 ~ 167,902,401 27 City of Delray Beach, Eiarida Notes to Financial Statexnants September 30, 2009 1.1Flnancial Reporting entity In conformance with the pronouncements of the Governmental Accounting Standards Board {CxASl3j, 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 I2677, Laws of Florida, I927. l"inancial accountability was determined based on the City's ability to iYnpase its will on an organization or the potential of the organization #o 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 {aj the primary government, {bj organizations for which the primary government is financially accountable, and (c) other axganizatians for which the prunary govemment is not accountable, but for which the nature and significance of their relationship with the primary governzx~ent are such that exclusion would cause the reporting entity's financial statements to be misleadirxg or incomplete. Two dependent special districts of the City, created puxsuant to Florida Statutes, have been included in the reporting entity as discretely presented component ur-its. The districts are the Delray Beach Community Redevelopment Agency {CRA) and the Delray Beach Downtown Development Authority {DDA). k3at1- 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. The CRA is a dependent special district established by the City under authority granted by Florida Statute 163, Section lII. The purpose of the CKA is to promote and guide the physical and economic redevelopment of approximately 1,900 acres in the center of the City. Tlae C1Z.A is a legally separate entity established by Ordinance number 46-85 of the Delray Beach City Conirnission on 7uae 18, 1985. The CRA is governed by a'seven member Board of Commissioners appointed by the Delxay Beach City Canamission. The DDA was created after the City petitioned the State of Florida. An Act allowing the DDA became Iaw on March 22, I97I. The original boundary of the DDA was established by Section 3, Chapter 71-b04 Laws of Florida 197I, The expanded boundary was established by Chapter 94-476 Laws of Florida effective May I3, 1994. The purpose of the DDA is to promote and guide the economic development andvnprovement of the downtown area of the City. The governing body of the DDA is appointed by the Delray Beach City Caintnissian. In addition, the City approves the DDA's budget. 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 apd the DDA can he obtained directly from the respective entities. Joint Venture The South Central Reginnai Wastewater Treatment and Disposal Board (the `BoarcP'j has been reported as a joint venture accounted for using the equity method as .discussed in Note I0. The Board is an independent special district created by the Cities of Delxay $each and Boynton Beach, whose City Commissions comprise the' Board's governing body. Control and oversight are exercised equally by both cities represented an the Board. The separate financial statements ofthe'Board can be obtained directly liran7 the finance department of the Board. 28 City of Delray Eieach, Florida Notes to Finaacial Statements (Continued) September 30, 2009 2. Significant Accounting Policies The City trtaintains 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 l?ASB statements and interpretations issued after November 30, 1489 to its business~type activities and enterprise funds. The following is a summary of the significant accounting policies. The Gvverpment-Wide and Rind I+~nancial 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, t3ie effect of interfnnd activity has been removed from these statements. Governmental activities, which normally are supported by taxes and intergoverurueutal 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 er~pemses of a given function are offset by program revenues. direct expenses are those that are clearly identifiable with a specific function. Program revenues include (1) charges to customers or applicants who purchase, use, or directly benefit frown 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 doss not allocate indirect casts, 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 ur the General Fund) to recover the direct costs of Genexai Fund services provided (such as finance, Iegai= human resources, information systems, etc.). Separate financial statements are provided far $overnmental 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 fend financial statements. Measwrement Faeus, )3asis of Accounting and Financial Statement Presentation The government-wide financial statements are reported ustr:g the economic resources measurerraent focus and the accrual basis of accounting, as are the proprietary and fiduciary filed financial statements. Revenues are recognized when earned and expenses are recognized when incurred, regardless of the timing of cash flows. Property taxes are zecognized 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. Qperating revenue and expenses generally result from providing services and producing and delivering services. The principal operating revenues are charges to customers far sales and services. Qpexatiug expenses include the cost of sales and services, administration, and depreciation Qther revenues and expenses are considered nonaperating revenues and expenses. Wafer and sewer and other proprietary fund revenues are recognized as earned when the services are provided. Govenuental fund financial statements are reported using the current fznanciai resources measurement focus and the modifed accrual basis of accounting. Revues 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 sown enough tlnereafler to pay liabilities of the current period. Ad valorem taxes and charges for services are susceptible to accrual when collected in the current year oz vritl-ira 60 days subsequent to year end, provided that amounts received pertain #o billings through the fiscal year just ended. Intergovernmental reverAUe and utility service taxes are recorded in accordance with their legal or contractual requiremen#s if collected in the curren# period or within 30 days alter year end, except for grant revenue, which is retarded when the zalated expenditarelexpenses are incurred and the eligibility requirements leave been met. Interest is recorded when earned, Licenses anal permits, fines and z~ City of Delray Beach, Florida Notes to Financial Statements (Continued] September 34, 20Q9 2. Signil5cant Accounting )Policies (Continued} forfeitures, and miscellaneous avenue are recorded as revenue when received in cash, because they are generally not measurable until actually received. Other Revenue -Emergency medical tratrspart services provided by the Ci#y axe billed and recorded a# the time services are rendered. t)ther 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 suscept~-ble #o accrual includes utilities taxes, permits and occupational. licenses. Business taxes collected in advance of periods to which they relate are recorded as unearned revenue. Expenditures are recognized in the accounting period is vrl~ich the fund liability is incurred, if measurable, except that principal andinterest oolong-term obligations axe reported only when due inconformity with GAAP. The City reports the following maj or governmental funds: General Fund - The General h'und 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 furrd_ The general operating expenditures, fixed charges and capital improvement casts that are not paid through other funds are paid from the General Fund. Capital Improvement Fund -This fund is used to account for the construction of znajax capital facilities. The City reports the fallowing tzrajor proprietary fund: Water and Sewer Fund -This fund is used to account fox water and sewer services provided by the City to residents azrd otbexusers. Additionally, the City reports the following fund types: Internal Service Funds -These funds are used to accarnrt for the financing of goods or services provided by one department or agency to other departments or agencies of the City, nr to other governmental uni#s, an a cost reimbursement basis, including insurance services and the operation of the central garage. Pension Trust Funds -The Pension Trus# funds account for filre accumulation of resnurt:es #o be used for the retirement annuities of employees, police officers and firemen.. Cash, Cash 1N qulvalertts and lnvestutents Cash, cash equivalents and investments consist of restricted and unrestricted cash deposits, institutional money market rnuYual funds, time deposits and the Florida PRIl1~fE fund (formally known as the Local Government Investment Pool or LGIl'}. Investments are stated at fair value. For purposes of the statement of cash flows, the Ciky considers all highly liquid investments (including restricted assets) with a maturity of three months or less when purchased to be cash equivalents. Accounts Receivable Accounts receivable xepresent 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 ara individual basis in the year the City deems them uncollectible. An allowance for doubtful accounts has been provided for those accounts where coliectabiliry appears to be doubtful. 30 City of Delray Beaeh, Florida Notes to rinancial Statemextts (Continued) September 30, 2004 2. Sign':t"icant A.ceoantin:g Policies (Continued) The City does not xequixe collateral from its customers, except for the Water and Sewer Fund, Rich 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. Unl-illed Service Receivables - ' Within the enterprise funds, the 'V~ater and Sewer Fund recognizes revenue ou the basis of monthly cycle billings to customers for services provided. As a result of this cycle billing method, there are unbiiled 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-encl. The other enterprise funds do not have unbilled xeceivables at year-end. Inventory Inventory consists of materials, supplies and goods held for sale and are carried at cost on the average cost 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/laxpenses Payments far insurance prenuums and other administrative expenditures/expenses extending over mare than one accounting period are accounted for as prepaid iternsfexpenses and allocated between accounting periods. Intro-Entity Transactions An infra-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. Curxent maturities of long-term infra-entity transactions are reported separaiely as due to and due from the respective entities. Interfund Transactions Transactions among fiords during the year ors described as follows: . _ tnterfund services provided end used -Transactions which are revenue to tlxe recipient fund and expenditures to the disbursing fund. These are transactions which would otherwise be recorded as xeveuue or expenditures if they were conducted with organizations external to the City. Reimbursements -These transactions are reimbursements of a fund far ttie disbursement of monies initially made from it, which are properly applicable to another fund. Such reixnbursexx-ents are recorded as an expenditure ax expense in the reimbursing fund and as reductions of the interfirnd receivable in the fund that is reimbursed. Transfers -Transfers which, because of budgetary or legal restrictions, must be expended by funds other than the rand initially receiving the revenue. These transfers are recorded as transfers in {out). Capital Assets Capital asset acrluisitiorts az'e xecoxded as expenditures in the gavem~nental fund financial statements. Such assets are capitalized at historical cost in the government-wide financial statements for bath governmental activities and business-type activities. In the case of gifts or contributions, such assets are recoxded at fair value at the date of receipt. Capital costs which materially extend the useful life of existing pxoperties are capitalized. Capital assets are defined as assets with an initial, individual cast of more khan $750 and an estimated useful life in excess of one year. 31 City of Delray Beach, Florida Notes to Financial Statemertts (Cotati~aued) September 3Q, 20Q9 2. Signl~cant Accounting Policies (Continued) Interest is capitalized on projects during the construction period based upon average accumulated project expenditures. Infrastructure assets (such as roads, bridges, curbs and gertters, 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 capi#al assets is provided on the straight-line basis aver the assets' estimated useful lives. Amortization of assets recorded undez capital ]eases 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 -- I S years Automotive equipment ~ q - ~ years Office equipment S years Waterxnetezs 30 years Damping egaipment 15 - 2D years Wells and springs 10 years Sewer system 50 years Water distribution system 50 years .. Band Issue Costs, Premiums, Dzscaunts, and Deferred Amounts an Refunding ~ . - In the government-wide financial statements and the entexprise fiu~ds, expenses incarred in connection with the issuance of long-term debt, as well as band discounts, premiums and deferred amounts on refunding, are deferred and amortized over the texm of the related financing using a znethad 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 accaxdance with GASB Statement No. 16, ticcourzting far Compensated .4hsences, and has elected the termination payment method of accounting for sick leave. Compensated absences are accrued when incurred in the government wide and proprietary fund financial statements. A liability for these amounts is xepoxted th the governmental fund financial statements only if they have matured, for example, as a result of eznplayee resignations and retirements. The City's policy regarding the accumulation of compensated absences is cnmmarized as follows: Vacation Leave -Employees beconoe eligible to use accrued vacation after one year of contimious service and may then use vacation as it is earned. The maxiznum vacation days allowed to be accumulated is 1 S, 2~4 your days far fire department personnel anal 3b days £ox all other full-time personnel. Vacation hours are earned at the fallowing monody rates: ire dtlter Years of Conti~n€ons Ser~~ice De artmant Personnel D - 3 years l2.OD/month S,DO/month 3 - 7 years 14.OD/month 9.331month 7 -11 years 16.00/month 10.66Imonth Thereafter - - IB.OO/tnouth 12.00/month . . Upon tPr~ination in goad standing, employees are compensated for all accrued vacation leave at their pay xate on the date of termination. 32 City of Delray Beach, Florida Notes to Financial ~tateinents (Continued) September 30, 2049 2. Signiffcant Accounting Policies (Continued) S;ek Leave - F.~nployees eater hours of slck leave per month based on their scheduled work hours; $ hours per month for 40-hour work week employees and 9.6 hours per month far 48 hour workweek employees. If an employee retires with 20 years or more of service, sick leave is paid up to a maximum of 1,120 hours far general employees and police or 1,344 hours for 48-hour work week firefighter 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} for general employees and police and 672 hours (84 days) for firefighters according to the following vesting schedule: Rears of Service Percent Vested a - s years _ o~ro 5 - l0 years 25 l0 - l5 years 50 l5 - 20 years 75 end BalancelNet Assets Frsnd Balance In the fund financial staternents, governmental funds report reservations of fund balance to indicate the portion of fund balance tlia# is not appropriable for expenditure or is legally segregated by outside parties for a specific purpose. Designations indicate tentative tnanageriai plans or iziterxt to use firaazacial resources in a future period Undesignated fund balance indicates the portion of fund balance which is available for future use. Net .4.ssets 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 bean 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 paRies (creditors, grantors, contributors, or laws or regulations of other governments) or imposed by law through constitutional provisions or legislation. The entity-wide statement of net assets reports governmental activities net assets of $10,728,740 restricted for debt service, capital projects and specific purposes and business-type activities :net assets of $1,592,064 restricted for capital projects. Net assets are not restricted by enabling legislation. Unrestricted net assets consist of net assets not included in invested in capital assets, net of related debt or restricted. Property Taxes Ad valorem property taxes are assessed on property valuations as of January 1 and levied the following October. Property taxes are due March 31 and become delinquent April 1. These taxes are collected by Palen Beach County and xeixiitted to the City. Revenue is recognized at-the time monies axe received from Palm. Beach County. At September 30, unpaid delinquent taxes are reflected as a receivable an the balance sheet and are offset in foil by an allowance for estimated uncollectible accounts. Delinquent property taxes must be advertised within 45 days ai3er delinquency, and after May 1 the propeztyis subject to levy, seiz[1re and sale. Delinquent tax certificates are sold on dune 1 and become a lien on the property. I3uting 2007, the Florida Legislature passed property tax reform legislation limiting the property tax levies of local governments in the State of 1«lorida. Local governments that adapt a property tax levy in excess of the limit under 33 City of Delray Beach, Florida Notes to Financial Statements (Continued) September 30, 2049 2. Significant Acc©w-ting Palicles {Continncd) State law will lose their Half Cent Sales Tax distn€bution from the State fax t}ae succeeding twelve months. For the fiscal year ending September 30, 2009, 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 (200712008) property tax revenue. The percentage reduction is calculated based on the compound annual growth rate in the per capita property #axes levied for fiscal years ended September 30, 2003 through 200$. The State law allows local govem3nents to adopt a higher miliage rate based on the following appxovai of the gvvertaing body: ]) a majority vats to adapt a rate equal to the adjusted current year rolled-back millage rate plus an adjustment for growth in par capita Florida personal income; 2} atwo-thirds vote to adopt a rate equal to the adjusted currant year m11 back millage rate plus 10%; or, 3} any millage rate approved by unanimous vote ar referendum, for the fiscal year ending September 30, 2009 the City adapted the maximum millage rate permitted by a maj ority vote of the City Commission under this formula, which was 6.$504. This millage rate resulted in a total tax levy of $56,242,544 far 2009, representing a reduction of 9.55% from the property tax levy for 2008, Beginning in 2009, future property tax growth is limited to the annual growth rate of pee capita personal income plus the value of new construction. Encumbrances Encumbrance accounting, under which purchase orders, contracts and other commitment for tkie expenditure of moaies are recorded in order to reserve that portion of the applicable appropriation, is employed as an extension of fozrzsa] budgetary control in the General Fund. Encumbrances outstanding at year-end are reported as reservations of fund balances for subsequent year expenditures. Fox budgetary purposes, current year encumbrances are treated as expenditures and any unencumbered balances lapse at year-end. On-1-el~alf Payments The City receives on-behalf payments from the State of Florida to be used for Police and lairefighters pension benefits. Such payments are recorded as intergovernmental revenue and public safety expenditures in the GAAP basis govetntxtent-wide anal General Fend financial statements, but are not budgeted and therefore are not included' in the General Fund budgetary basis financial statements. 4n behalf payments to the City totaled $1,600,347 for the fiscal year ended September 30, 2009. Recent Accounting Pranoet~cements. The GASB has issued Statement No. 51, Accounting and Financial ,ieporting for' Intangible ~Isseis, which establishes accounting and financial reporting requirements for intangible assets including easements, contractual rights and computer software. 'i'he requirements of this statement will be effective for the City for the fiscal year ending September 30, 2010. The GASB has issued Statement No. 53, accounting and Financial Repar-fing far Derivative.Instrumerzts, ve+hich establishes accounting and financial reporting requirements for derivative instruments entered into by state and local governtuents. The requirements of this statement will be effective for the City fvr the fiscal year ending September 30, 2010. The GASB has issued Statement No. 54, Fund .balance Reporting acrd Governmental Fund Tj pe Definitions, which establishes criteria for classifying fund balances into specifically defined classifications and clarifies definitions for governmental fund types. "1`he requirements of this statement will be ef'f'ective for the City for the fiscal year ending September 30, 2011, Management has not completed its analysis of the effects of these statements, if any, on the financial statements of the City. 34 _ _ __ City ofDelray Beach, Florida Notes to Financial Statements (Coxltinued) September 30, 2009 2. Significant Accounting Policies {Continued) 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 expenseslexpenditures. 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 deposit 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 'T'reasurer of Florida Qualified public depositories are required to pledge collateral !.a 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 inc~,rance. In the event of a default by a qualified public depository, all claims for government deposits would be satisfied by the State Treasurer ifom the proceeds of federall deposit insurance, pledged collateral of the public depositary in default and, if necessary, a pro rata assessment to the other qualified public depositories participating in the coIateral pool_ Cash, cash equivalents and investments include unxestricted and restricted assets for the primary government which are summarized as follows: Deposits with financial institutions and cash on hand $ 13,646,275 Investments in m~aney market mutual fund, tizn;e deposits and Florida PRIME 48,541,714 Total cash, cash equivalents and invesments -primary government $ 62,147,489 Cash and Dash equivalents $ 7,724,120 Investments - 46,575,209 Cash and investments -restricted - 7,548,660 Total primaxy government 62,147,989 Cash, cash equivalents anal investments - pension trust fiends 178,041,257 Total cash, cash equivalents and investments $ 240,1$9,286 Florida Statutes and City policy authorize the City and its pension trust funds to izzvest in the Local Government Investment Pool administered by the State Board of Administration (the name of the local Government investment Pool has since been changed to "Florida PRIME"); negotiable direct obligations of ar obligations vncond-itionally guaranteed by the U.B, Government; interest-bearing time deposits ar savings accounts in futancial institutions located in Florida and organized under federal or Florida laws; money market mutual funds limited to U_S. Government securities; obligations of the Federal Farm Credit Banks, Freddie Mac, the Federa[ Home Loan Bank or its district backs; ar obligations guaranteed by the Government National Mortgage Association, obligations of Fannie Mae; 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 car~nnon stocks of certain U.S, corporations, debt securities of certain U.S. corporations, mutual funds, anal alternarlve investments that are not publicly traded. _ The deposits in the Florida PRIME fund consist of equity in an exterria12a7-like investment pool administered by the State of Florida pursuant to statutory requirements. Regulation 2a7 of the U.S, Securities and Exchange Commission (SEC) allows registered mutual funds to use amortized cast 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 35 City of Delray Beach, Florida Notes to Financial Statements (Continued} September 30, 209 3. Cash, Cash Equivalents and Investments (Contanued) investments held, the term-to-maturity of individual investments, the dollar-weighted average of the portfolio, portfolio diversification, divestiture considerations in the event of security downgades and defaults, and required actions if the fair value of the portfolio deviates from amortized cost by a specified amount. Cash balances from all funds are combined, and the requirements of all funds aro considered in determining the amount to be invested. Earnings are allocated to each fund based on respective month-end balances. The City's investments at September 30, 2009 consist of the following: Investments: Florida PRIMR .. . Money market mutual funds Time deposits with financial institutions U.S. Government and Agency securities Corporate bonds Common stocks Mutual funds Alternative investments Total investments Carrying Amount (Fair Value) Primary 1+'iducis~ry Funds Government Pension Trust Total $ 279 $ - $ 279 38,541,435 ~. 4,Z15,443 42,756,878 14,404,440 - 14,044,000 - 11,014,380 11,014,380 - 14,810,885 14,810,885 - 65,069,477. 65,069,477 - 72,365,422 72,365,422 - 10,565,690 10,565,G90 $ 48,541,714 $178,041,297 $ 226,583,011 At September 30, 2009, approximately 10% of the investments of the Police and Firefighters' Retirement System Fund, a fiderciary fund, were invested in alternative investments. These alternative investments consist of pooled funds that are not publicly traded that invest in timberlands and real estate. These alternative investments are generally valued at fair value as determined by the management of the fired by reference to the value of the underlying fund's assets, if available, or by the valuations of a fund's underlying assets as provided by the general partner ar investment manager, since the assets are not publicly traded. The fiends may also hold certain investments which may be valued by a single market maker. While the fiu~d managers use their best judgment in estimating the fair values of underlying funds, there aro inherent limitations err any estimation technique. A,acordingly, the fair values of alternative investment funds have been estimated by the management of the Police and Firefighters' Retirement System and their investment advisors in the absence of readily ascextainable market values. Therefore, the values of such funds may not necessarily he indicative of the amount that could be realized irz a current transaction. The fair values may differ significantly from the values that would have been used had a ready market for the underlying funds existed, and the differences could be material. in addition, the alternative investments may have restrictions foe liquidating positions in these funds and future funding commihnents. Future confirming events will affect the estimates of fair value, and the effect of such events on the estimates of faix value could be material. The alternative investment funds expose the Police and Fixefightexs' Retirement System Fund to certain additional investment risks, including liquidity risks, caunterparty risks, foreign political, economic, and governmental risks, and market risk. Interest Rate Risk: Interest rate risk is the risk that changes in interest rates will adversely affect the fair value of as investment in debt secuxities. CYenerally, the longer the time to maturity, the greater the exposure to interest ra#e risks. 'The City and its pension funds do not have a formal policy that limits the maturities of its investments. The Florida 1'R1ME and money market mutual funds have a weighted average maturity of less than 90 days, xesultizxg in n,tr,;rrtal interest rate risk. Tune deposits include two $5,000,000 certificates of deposit, each maturing exactly one year from the date of purchase. Mutual fund invesments of the fiduciary funds include $37,694,223 in a bond market index mutual fund with a weighted average maturity at September 30, 2409 of 6.4 years. The table below summarizes the scheduled maturities of the remaining investments at September 34, 2449, 36 City of Delray Bead, Florida Notes to Financial Statements (Continued} September 30, 209 3. Cash, Cash Equivalents and Investments {Continued) Fair Value of Investment Maturities Tess Than One to Six to Moxe Than One Year Five Years Ten Years Ten Years U.S. Government and Agency securities $ 1,358,507 $ 2,832,085 $ 3,555,055 $ 3,158,722 Corporate bonds 2,949,753 7,240,801 4,315,562 304,759 Total $ 4,308,260 $ 10,072,886 $ 7,970,528 $ 3,473,491 Credit Risk: Credit risk is the risk that a debt issuer will not fulfill its obligations. The City's izivestnaettt policy requires that pension investments in debt securities must be xated in one of the tap three investment grades by a Nationally Recognized Statistical Rating Organization ~RSRO). The City utilizes ra#ings from Standard and Poor's and Moody's Investor Services for its investments. The bond market index mutual fund and pension money market mutual fiends are not rated. The NRSRO rating for the City's pension debt investments at September 30, 2009 axe summari?ed as follows. All other securities are not rated. NRSRO . Rating Fair Value Pritnaxy Gavexnrnent Money market mutual fund and Florida PRIME AAAm $ 38,541,714 Pension Trust Funds Money market mutual funds Umated 4,215,443 U.S. Gavext~xnent axtd Agency securities AAA 10,234,438 U.S. Govemment Agency securities Unrated 799,942 Corporate bonds AAA 714,287 Corporate bonds AA 3,978,394 Corporate bonds A 9,630,157 Corporate bonds Baa 488,097 G~stodial Credit Risk: Custodial credit risk is defined as the risk that the City may not recover cash and investments held by anathex party ~ the event of financial failure. The City's investment policy requires cash and investments to be fully insured or collateralized, ar held in independent custodial safekeeping accounts in the name of the City. At September 30, 2009 all investments were held in independent custodial safekeeping accounts, except rr~oney market mutual funds, mutual funds and altexnative investments, which are unclcrss~ed pursuant to GASl3 Statement No. 3. Concentration of Credit Risk: Concenttation of credit risk is defined as the risk of loss attributed to the magnitude of an investment in a single issuer. For investments otl-er than the City pension funds, there is no specific policy for concentration of credit rislt. In the City pension funds, securities of a single issuex are limited to no mare than 5 °/a of the Plan's net assets invested in common stocks and debt securities. Investments in mutual funds or pools are excluded from the concentration ofcredit risk disclosure requirement. Foreign Currency Risk: There was no exposure to foreign currency risk in the City's investments. Market Risk: The value, liquidity, and related iucame of certain securities with contractual cash flows, such as asset backed securities, collateralized mortgage obligations, corzunexcial mortgage bacdced securities and alternative investments or mutual funds investing in these securities or entities, are particularly sensitive to changes in financial markets and economic conditions, including real estate values, delinquencies or defaults, or both, and may be adversely affected by shits in the market's perception of the issuers and changes in interest rates. Due to the various risks associated with certain investments, it is at least reasonably possible that changes in the values of investments will occur in the near term and that such changes could materially affect the amounts reported in the accompanying financial statements. 37 City of Delray Beach, Fiarida Notes to Final~cial Statements Continued) September 3Q, 20Q9 3, Cash, Cash Equivalents and Investments {Continued) Discretely Presented Camnpanent Units Cash: The CRA's cash at September 30, 2009, inchldes deposits with fiinarleial institutions with a bank balance of $13,215,000 and a book balance of $13,]48,212 and $300 of petty cash Tlae CRA's deposits with financial institutions were entirely covered by federal depositary itsurance and a collateral pool pledged to the State 'Treasurer of Florida by financial insti#Irtions tha# comply with the requirements of Florida Statutes and have bean designated as a qualified public depository by the State Treasurer. The DDA's cash at September 30, 2009, ~cludes deposits with financial institutions that were fatly covered by federal depository insurance. Investments: The CRA fotlows the provisions of Florida Statutes far its investment policy. Florida Statutes authorize the CRA to invest in the lilorida PRIlViE fund. Interest Rate Risk: The CRA's investment policy does nat specifilcally limit the maturity of investmennts. The Florida .PRIME fiord has a weighted average tnatuxiry of less than ninety days, resulting in mi nimat interest rate risk. Credit Risk: The CRA's investment policy addresses credit risk by limiting investments to the Florida PRIIVIE fond, deposits with a financial institution meeting the I~cltlirements of a l~Iarida qualified public depository, securities guaranteed by the iJ.S. Gavenzment, or securities that are fully collateralized or seclued. The secauity rating by a Nationally Recognized Statistical Rating Qrganization {NltSltO) is also an indication of credit risk. The Florida Prime Fund had a credit rating of A~ Am at September 34, 2049. Custodial Credit Risk: The CRA requires any investments in securities to be held in the CRA's name by a third party safekeepixlg institution. The investment in the Florida Prime Fund is considered unclassified pursuant to the custodial credit risk categories of GASB Statement No. 3. Concentration of Credit Risk:. The CRA. investments are limited to the Florida Prime Fund and deposits wish financial institutions meeting the requirements of a Fiarida qualified public depository. Restricted Cash and Cash Equivalents: At September 34, 2009, cash and cash equivalents of $7,150 were restricted by provisions of bond resolutions to certain allowable expenditures. 4. Receiva#ales Current receivables and the allowance for doubtful accouo,ts a# Septelnbex 34, 2009 canslst of the fallowing: Governmental Business-Type Activities Activities Property Taxes Receivable: General Fund Stormwater Utility Fund Accounts Receivable: General Fund Water and Sewer Fund Non-Major Funds luterual Service Funds Allowance for doubtful accounts $ 1,266,ta91 $ - 23,3 47.. - 6,945,745 - 4,920,370 139,161 632,6I5...: ° 45,230 - _ (5,428,544) (675,934) $ 2,968,247 $ 4,404,358 38 City o~Be}ray Beaah, Fior~da 1rIotes to Financial Statements (Continued} September 30, 2009 S. Notes Receivable Notes receivable at September 30, 2D09 consist of the following: General Fund: Non-interest-bearing note receivable from a developer for the sale of land - - . payable in annual installz-aents of $21,264 through Tune 2022 (see below).. $~ 255,168 Note receivable from a deveIaper for the construction of an urban development project. Principal and interest payments are due In equal annual Installments of $149,244 based on a 50~year amortization schedule. A balloon payment far the remaining principal and interest, including the deferred interest, is duo in 2022 (see below), $ 3,308,316 Non-interest-bearing note receivable frozzt, EPOCH to assist in fuoding of a museum project. Payments of $3,500 are due on December 31 of each year, to be paid in full by December 31, 2017. 28,000 Non-interest-bearizzg riate zeceivable from CRC for the sale of land, payable. - in annual installments of $30,000 through 2015. 18D,000 'Total General Fund 3,771,484 Non-Major Fund: Conununity Development Fiord - Non-interest-bearing notes receivable from property owners for rehabilitation, . enhancement and preservation of real estate. Principal payments are ~ - ~ . amortized over 5-20 years. Repayment of loans are contingent upon the sale of real estate prior to the required time frame or release date. ~ 1,797,391 Total Governmental Aetiv:ities $ 5,518,875 The City's application for a grant of approximately $4 million through the Urban Development Action Grant Program {UDAG} was approved far the purpose of canstxuating a low-income pausing project tivithin 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 Bald 36 acres of property to the developer for $730,000 which included a non intexest bearing, five-year pxomissory note to the City fox $720,000. The remaining balance owed to tlae City on this note vas $255,168 at September 30, 2009 vrhich Is recorded in the General Fund. Additionally, the City loaned the developer $4,608,000 consisting of $3,840,000 of UDAG monies and City funds of $768,000. The remaining ba€az-ce owed to the City on the $3,840,000 loan amount at September 30, 2009 was $3,308,316. The loan fax $768,000 was paid in fu€1. At September 30, 2009, interest o£ $945,780 has been accrued and deferred on the City's books incompliance with the repayment provisions of the Ul?AG loan. On Naveznbax 20, 1992, the City amended the original agxeeznent with the developer. The amendment revised the repayment schedules of the outstanding notes receivable by primarily extending the repayment terms of the $72D,ODD note from 15 to 25 years and extending the amortization schedule on the $3,840,D00 note from 25 to SD yeaxs. 39 City of Delray Beach, Florida Notes to Financial, Statements (Continued) September 30, 2009 6. Due from Other Governments The fatal amount due fronn other governments of $2,$31,969 at September 30, 2009, repzesents the amount due from federal and state sources for intergovernmenta-1 revues and grant reir<zbursernents within vaz~ous funds. 7. Dtte from Component Units The amounts due from. coinpanent units at September 30, 2009 include the follovring amounts due from the Delray Beach Community Redevelopment Agency: General F'uud: Reimbursement for Plan Reviewer II $ 18,156 Reimbursement far Parkxug Study 73,875.. - General Construction, Fund: Reimbursement forNFlSI? ls`One~VayPaid I,4?1,161 Reimbursement for SW I2`h & 14`~ Avs_ Beautif cation 715,837 Reimbursement for Gateway to City 25,968 Community I3eveloprnent Fund; . Reiznbuzsernent for Planner - Neighborhood Resource Center 17,532 Reimbursement for West Settler's Program Income. ~ ~ 464 . Total Due from Conxpoz~ent Units $ 2,323,987 S. Restricted Assets Restricted assets of the Enterprise Funds at September 30, 2009 are surrnriarized as follows: Restricted for . . Renewal Oebt and Restricted Assets Service I;e lacement 'T'otal Water and Sewer Fend: Cash and cash equivalents $ 5,288,092 $ .. $ 5,288,092 Investments 74,445 1,592,060 1,fi66,505 Non-Major Enterprise IAunds Crib and rash equivalents 594,063 - 594,fl63 Total restricted assets $ 5,956,600 $ 1,592,050 $ 7,548,660 Restricted assets in the Enterprise Funds result from revenue bond requirements to fund the current portions of principal and interest, fund a renewal and replacement reserve and establish a reserve equal to the ma7dmum principal and interest requirements in any fiscal year. In lieu of a reserve for the maximum principal and interest requirement, the City has ptu'chased surety bonds to meet fhis reserve requirement (see Note 18. Camrnitments and Contingencies Debt Se-~saice Reserve Surety Soncl). Restricted resources are used fu~st for expenses incurred for restricted purposes. Restricted assets are got reported on the balance sheets of the governmental funds; however, cash and cash equivalents and other assets of the debt service fund (a non-major food) axe restricted for debt service in accordance with revenue bond xequirements. 40 City ofDelray Beach, Floz~da 9. Capital Assets September 30, 2009 The major coznpanenls of capital assets for the City at September 30, 2009 are summarized as follows: Governmental Acf-lvities: Nan-depxeciable Assets: Land Construction iriProgress Total Non-depreciable Assets Depreciable Assets; Buildings lmprovemezzts Other Than Buildings Egnipment Total Depreciable Assets Less Accumulated Depreciation for: Begianittg Ending Balance l<ncreases Decreases Balance $ 37,751,138 $ 21,648 $ (212,642) $ 37,560,144 9,710,992 4,982,645 (7,225,727) 7,467,910 47,462,130 5,004,293 (7,438,369] 45,028,054 33,095,105 4,961,013 ~ (219,665) 37,836,453 1fl3,735,410 4,431,180• {1,490,132) 106,676,458 35,416,844 3,577,559 (2,583,198) __._35,411,205_ 172,247,359 12,969,752 (4,292,995) 180,924,116 Buildings (11,727,955) (1,1113,274) 171,446 {12,659,783) lmprove~xnentsOtherThanSuildings (43,846,309) (4,168,636) 1,420,591 (46,594,354) Equiprt~ent {21,433,689) (3,414,134) 1,982,937 (22,864,886) Total Accumulated Depreciation (77,007,953) (8,586,044 3,574,974 (82,119,023) Total Depreciable Assets, net 95,239,406 4,283,708 (? 18,021) 98,805,093 Govexnmentai Activities Capital Assets, net $ 142,701,536 $ 9,288,001 $ (8,156,390) $ 143,833,147 Business-Type Activities: Non-depxeciable Assets:~ Land $ 5,576,862 $ ~ $ ~ - $ 5,576,862 ConstnrctioninProgress 3,165,811 594,664 388,539 3,372,936 TotalNon-depreciable Assets ~ 8,743,673 594,664 (38$,539) 8,949,798 Depreciable Assets: Buildings 13,591,OS4 23,437 _ 13,514,491 Improvements Other Than Buildings 151,758,097 3,946,761 ~ {2,319,500) 153,385,358 Equipment 13,351,429 ____1,207,548 (848,454) 13,710,523 Total Depreciable Assets 178,700,580 5,177,746 {3,l 67,954) 180,710,372 Less AccurnuEated Depreciation for: Buildings (6,597,829) (416,997) - {7,114,826) Improvements OthexThanBuildings (67,871,756} (3,010,756) 2,171,287 {68,711,225) Equipment (9,963,167) ..... (909,36$) 592,243 (10,280,292) TotalAccurnulatedbeprecia#iort 84,532,752 4,337,12]) 2,763,530 86,106,343 Total Depreciable Assets, net 94,167,828 840,625 (404,424) 94,604,029 BusirAess--Type Activities Capital Assets, net $ 102,911,501 $ 1,435,289 $ (792,963) $ 103,553,827 Depreciation expense for the Oscal year ended September 30, 2009 was ck~arged to functions/programs of the primary government as failows: Notes to Financial Statements (Continued) 41 City of Delray Beach, ~orida Notes to Finatacial Statements {Continued) September 30, 2009 9. Capital Assets {Continued) Governmental Activities: General Governmen# - ~ $ I,073,417 Public Safety 1,135,972 Physical Ernvira~ent 2,646,682 Parks and Recreation - ~ 2,310,129 Internal Service Fends ~ ~ 1,519,844 Total depreciation expense -Governmental Activities $ 8,685,444 Business-Type Activities: Water and Sewer $ 3,544,926 Municipa] Golf Course 178,406 Lakeview Golf Course - 104,011 City Marina ~ 70,846 Sanitation 2,308 Stormwater Utilitiy - ~ ~ ~ ~ - ~ ~ 436,624 Tatal depreciation expense -Business-Type Activities $ 4,337,121 Discretely Presented Component Unit _ Delray Beach Community Redevelopment Agency Changes in capital assets of the Delray Beach Community Redevelopment Agency for the fiscal year ended September 30, 2009 are s?x~n+a~~ed as follaws: Beginning Bntling Balance Increases Decreases Balance N'on-depreciable Assets: Land and Land lmpravements $ 22,107,880 ~ $ 1,357,459 $ - $ 23,465,339 Total Non-depreciable Assets 22,107,880 1,357,459 - 23,465,339 Depreciable Assets: ' Buildings 2,809,204 8,036 - 2,817,240 Bquipmept, Furniture, and Fixtures 94,972 19,390 - 114,362 Total Depreciable Assets 2,904,176 27,426 - 2,931,602 Less Accumulated Depreciation for: Buildings {209,909) {101,847) - (311,756) Equipment, lrtumiture, and Fixtures (94,166) {2,745) - (96,911) Total Accumulated Depreciation . (304,075} (104,5_92} - {408,65 Tatal Depreciable Assets, net 2,600,101 {77,166 - 2,522,935 Total Capital Assets, net $ 24,707,981 $ 1,280,293 $ - $ 25,988,274 X0. Investment in Reg'~onal Plant Joint Venture In 1974, the City of Delray Beach joined with the City of Boynton Beach (Boynton Beach) to form a separate legal entity, the South Central Regional Wastewater Treatment and Disposal Board, {the `Board"). The Board, which is gavetx-ed by a body composed of the commissiar! nnembers from each city, oversees flee operation of the regional wastewater treatment and disposal plant which services both cities and surrounding areas. The interiocal 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 far budgeted items. In addition, the Board has the authority, subject to approval by a majority vote of each city convnission before becoming effective, to adopt an annual budget, establish rates and 42 f City of Delray Beach, Florida Notes to Financial Statements (Continued} September 30, 2x09 10. Investment in Regl©nal Plant doint'Venture {Continued) charges for operations, maintenance, expansions and construction, enter iota contracts far non-budgeted items and authorize the return of any surplus funds or levy additional charges for deficits afthe 13oard to the respective pities. Ownership of the regional wastewater treatment and disposal plant is vested proportionately with the cities in accordance with the papital 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 an the percentage of flow of wastewater from each city. At September 30, 2009, the City had a receivable of $931,621 from the Board and a payable to the Board of $523,146. For the year ended September 30, 2009, the City paid approximately $8,000,0©© to the 13aard 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. The Board issues separate financial statements audited by other appountants whc issued an unqualified opinion on tbose fmaueial statements for t]~e year ended September 3fl, 2009. Those financial statements may he obtained from the Board at 1801 N. Congress Avenue, Delray Beach, Fl 33445. Financial information summarized from the audited financial statements of the Board as of and for the year ended September 30, 2009 is as follows: Net Assets Current and otlaex assets $ 6,607,000 Capital assets, net 60,974,792 Total assets 67,581,792 Current liabilities 3,029,375 Noncurrent liabilities 1.33,x33 Total liabilities 3,162,508 Net assets $ 69,419,284 Clian~e in Net Assets Charges for services _ $ 7,009,217 Capital grants and cantrilintiolls 7,401,773 Total program avenues 14,410,990 Program expenses 9,843,87© Net program revenues 4,567,120 investment losses ~ {6,788} Transfers to joint venture participants {$66,687) Change in net assets $ 3,693,645 The City accounts for its investment in the Board as a joint venture recorded an the equity method of accounting. At September 30, 2fl09, the City's 50% equity in#eresE :ut the net assets of the Board totaled $32,209,642 and has been reported in the City's financial statements as Investment in Regional Plant (point venture). II. Interfut-d Transgctions Total interfund receivableslpayables and transfers as of and for the year ended September 30; 2{109 were as follovrs: Due From Due Ta Other l+unds Other Funds Transfers In Transfers Out Major Governmental Funds General Fund $ - $ 27,849,fl96 $ 4,101,919 $ 4,692,965 Capitallmprovement 2,774,886 - 2,136,552 951,537 43 City of Dekay Beach, Florida Notes to Financial Statements (Continued) September 30, 2009 11. Interfirnd Trausaetions (Continued) Due E+Yom Due To Other k~unds (1tl-er Funds Transfers in Transfers Uut Other Governmental lends Special lt.evenue Ponds: LawEnforceznentTrust $ 257,289 $ - $ - $ - Develogers Land Contribution 303,491 - - 2,400 Community Development 96,291 ~ . - 153,545. - SFIIP ~ 711,788 - - ~ - Beantification 585,064 - 900,463. - 8pecialPrnjects ~ 1,715,473 - 49,320-. 37,348 Cemetery Perpetual Care 670,827 - - - Debt Service Fund: - - - Utilities Tax 262,357 - 1,856,900_ . 8,360 Capital Projects Funds: 2004 GQ Bond ~. 481,643 - - _ - Beach l3estoratian ~ 580,441 ~ - 15,0(10 - Tota1 Gaverpmentai I'`unds 8,939,55© 27,849,096 9,214,199 5,642,610 Major Proprietary Fund Water and Sewer Fund 6,772,574 - .98,705 2,984,560 Other Proprietary I'nnds ~ Municipal Golf Course - - 33,004 726,111 ~ Lakeview Galf Course ~ 553,509 19,000 City Marina 723,210 48,604 Sanitation ~ 1,597,445 - - 180,930 Stormwater Utility ~ 2,787,896 - ~ - 380,506 Internal Service Funds: Insurance 7,057,761 - ~ - 329,704 Central Garage. 1,250,280 - 356,006 - Tota1 PraprietaryFunds 20,189,166 ~ 1,274,620 ~ 454,711 3,976,300 Total Primary Government $ 29,128,716 $ 29,128,716 $ 9,668,910 $ 9,668,910 The outstanding balances between funds resnl# mainly from the ti me lag between tlra dates that {1) interfund goods and SeNleeS are provided ox reimbursable expenditures occur, (2) transactions axe recorded in the accounting system, and (3) payments between funds are made. These balaz~aes also include the amount of warlcing capital loans made to various funds that the General lid expects to coileet in the subsequent year. Transfers are used to {1) move revenues from the fund with collection authorization to the debt service fond as debt E 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 pragraras that the City must account for in another fund in accordance with. budgetary authorizations, including amounts for capital projects and amounts provided as contributions ar matching funds for beautification, community development and other grant programs, For the year ended September 30, 2009, the Central Garage received vehicle transfers from Stormwater Utility of $287,506 and from the Insurance Fund in the amount of $28,500 or $355,006 in Total. 44 City of Delray Beacb., Florida Notes to Financial Statexneots {Continued) September 30, 2009 I2."Lang-Tertxt Debt The following is a summary of changes in long-term liabilities of the City far the fiscal year ended Septetttber 30, 2009: . Begibt~ing 1Cnding Dne'Wlthin Balance Additions Reductions Balance i7ne Year Governmental Activities: Revenue bands $ 39,524,722 $ - $ (2,118,948} $ 37,405,774 $ 906,572 General abligationbonds 31,760,000 - (2,295,000) 29,465,4D0 2,375,000 Unannortized bond premium 1,264,746 - {136,142) 1,128,604 - Unamortized loss on bond refinancing _ (517,200) - 96,222 (420,978) - Totalbonds payable, net 72,032,268 - (4,453,868) 67,578,400 3,281,572 Installment agreements 148,082 260,600 {139,$87) 268,795 75,961 Compensated absences 7,433,076 917,616 (910,204) 7,440,488 ~ 636,504 Insurance claims payable 5,815,988 6,783,317 {7,884,442) 4,714,863 1,736,416 Total Governmental Activities Debt $ 85,429,414 $ 7,961,533 $ (13,388,401) $ 80,002,545 $ 5,730,453 Business-Type Activities: Revenue bands $ 42,654,753 $ - $ (5,256,052) $ 37,398,701 $ 5,218,874 Unamottized bond premium 114,262 - (42,450) 71,812 - Unamortized loss on bond refinancing {426,387 - 174,475 (251,912) - - Totalbonds payable, net 92,342,628 - (5,124,027) 37,218,601 5,218,874 Accrued interest on capital appreciation bonds 8,377,883 684,288 - 9,062,171 - Installment agreements 112,203 131,420 (106,942) 136,681 39,435 Compensated absences 778,662 68,555 - 847,217 44,586 Total Business-Type Activities Debt $ 51,611,376 $ 884,263 $ {5,230,969) $ 47,264,670 $ 5,302,895 Governmental Activities Debt service on revenue bonds and installment agreements is payable from available non-ad valorem revenues. Debt service on utility tax obligations is payable from utilities tax revenues. General obligation bands are payable frnm ad valorem taxes. Compensated absences are generally liquidated by the General fund. Governmental activities long- term debt, including current maturities, at September 30, 2049 consisted of the following: Revenue Bonds: 5.245%, $10,000,0001~eveniie Bands issued February 25, 2000 (Series 204D) ~ ~ ~ ~" due in principal amounts of $327,791 to $426,148 tbrough 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, a<nd a pnrtion of the costs of a tri party radio system. (*} ~ $ 3,88(1,774 3.66%, $9,685,000 Revenue Refunding and Improvement Bonds issued December 2, 2403 {Series 2003) due in principal amounts of $550,000 to $920,000 through Jury 1, 2019, with semi-annual interest payments due each June 1 anal December 1 through June i, 2019. The bands were issued to current refund. Series 1999 and Series 2002 Tax Exempt Bands, in whole, and Series 2002 Taxable Bonds in part. (*) 6,894,440 45 City of betray Beach, Florida Notes to Financial Statements (Continued) Septexpber 30, 20x9 I2. Long-Term Debt {C©ntlnned) 4% - 5%, $24,635,000 Utility Tax Revenue Bonds issued September 26, 2007. (Series 20D7) due in principal amounts of $19,188 to $2,364,939 through Tune 1, 2032 with semi-annual interest payments due each Tune 1 and December 1 through Tune 1, 2032. The bonds were issued to finance various parks and recreation projects, Fire Station #4, Environmental Services T3uiiding {in part), and to refund the City's 2005 Line of Credit (which was . used to fiord the Old School Square Parlang Garage Project). (~) $ 23,635,000 Variable, $3,000,000 Revenue Bonds issued September 26, 200$ {Series 200$) with semi-annual interest payments due each ]une 1 and December 1 t}u'ough 3~une 2013. The variable rate (.88375°!° at September 30, 2009) is based on . the 30 day LIBOR pies suety-two and one half basis paints {.625). The bonds were issued to provide interim financing, in part, for the Old Sehooi Square . Parking Garage Project. 3,000,000 't'otal Revenue Bonds 37,405,774 Urzamartized bond premium ~ ~ 772,665 Unamortized foss on bond xefunding {186,754) 'T'otal Revenue Bonds, Net 37,991,685 Getueral Obligation Bonds: ~ . 5.00%, $15,685,000 General Obligation Bands issued December 19, 2002 {Series 2002), due in annual principal installments of $1,775,000 to . $2,055,000 through February 1, 2013, with semi-annual interest payments. due each February 1 and August 1 through February 1, 2013, The bonds were issued to partially refund, on a current basis, General Obligation Bonds, Series 1993A and Series 14938. 7,655,000 3.0%-4.30°/q, $14,000,000 General Obligation Bonds issued September 30; . 2004 (Series 20D4}, due in annual principal installments of $600,000 to $1,025,000 through February 1, 2024, with semi-annual interest payments due each February 1 and August ] through Febxuary 1, 2024. The bands were issued for the acquisition of land, equipping of new parks, recreation centers, parking garage and library Mures. 11,810,OOD 4.15%, $10,000,400 General Obligation Bonds issued August 26, 20D5 (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, 10,000,OflD Total Crenera! Obligation i3onds 29,465,400 Unamortized bond premium 355,939 Unamorti~ed toss an bond refunding {234,224 Total General Obligation Bonds, Net 29,586,715 46 City of I3etxay Beach, Florida. Notes to Financial Statements (Cnntistued} September 30, 2009 ]Z. Long-Term Debt (Continued) tither General obligation Liabiiit'ses: Long-term installrrteztt agxeeener~ts for equipment: 2.76°/v to 3.6112°10, installment purchase agreements maturing in 2013 Gampensated absences payable Insurance claims payable (See Note 15) Total Governmental Activities T ong-Term Debt, ixtcluditxg current portion $ 268,795 7,440,488 4,714,863 $ 80,002,546 * Amounts outstanding for the portion ofthis bond issue related to business-type activities ane reported under Business-Type Activities_ The provisions ofthe various bond resolu#ions differ in soma respects, but generallyprovide for: 7. Establishment and maintenance of certain cash reserves for the 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 the revenue bonds. 3. Early redemption of autstanding 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 reservesrn tinge deposits or direct obligations of the LI.S. Government_ Long-term installment agreements consist of several agreements with vendors far the purchase of equipment used ire governmental activities. At September 30, 2409, the gross amount of the equipzx-en;t held under these agreements was $460,173 and the accurrtulated depreciation totaled $83,572. Mast agreements call for termination of the agreement and forfeiture of tare 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, 2009 are as follows: Fiscal year ending September 30: 2014 $ 82,343 201I ~ 68,887 2012 ~ 68,8$8 2013 ~ ~ 63,147 Total minimumpayments ~ 283,225 Less amount representing interest {14,430) Outstanding balance at September 30, 2009 $ 268,795 Pledged Governmental Revenues: The City has pledged the future utlities service tax revenues of the City to repay the outstanding Utility 'l'ax Revenue Bonds Series 2002 and 2007 issued to finance various capital improvements. The utility tax bonds are payable solely from the utilities service tax revenues received by the City anal era payable through 2032. Annual principal and interest payments on the bonds are expected to require Iess than 40 percent of utilities service tax revenues. Total principal and interest remaining to be paid an the utility tax revenue bonds is $49,943,196 at September 30, 2009. Principal and interest paid and utility tax revenues received for the current year were $2,863,760 axed $8,958,175, respectively. The City has also pledged the future non ad-valorem revenues of the City to repay the outstanding Series 2000 and 2008 Revenue Bonds and the Series 2003 lZevenue Refunding and Improvement Bonds issued from 2000 through 2008 to finance various capital improvements. The revenue bonds are payable solely from. the nen ad-valorem revenues received by the City and are payable through 2019. Annual principal and interest payments an the bands 47 City o~Delray Beaclz, ~larida Notes to Financial Statements (Continued) September 30, 2D09 12. Long-Term Debt {Continued) are expected to recpzire less than 5 percent of non ad-valorem revenues. Total principal and interest remaining to be paid on the revenue bands is $18,861,440 at September 30, 2009. Principal and interest paid and non-ad valorem revenues received for the current year were $2,040,176 and $50,1$3,394, respectively. Legal Debt Margin: The City has not established a Legal debt margin limit but has established policy guidelines for the management o€ debt. The City strives to maintain gross, banded general nbligatian principal debt at a level not to exceed 2% of tlae assessed value of taxable property within the City. The City also strives to ensure that its net bonded debt par capita does -not exceed $700 and that the combined total of its direct net bnnded debt and its share of overlapping debt issued by Palm Beach County does not exceed $2,000 per capita. business-Type Activities Business-type activities long term debt, including current portion, as of September 3fl, 2009 consisted of the following: Revenue bonds: 5.750% to 5.85%, $28,104,475 Water and Sewer Revemre Bonds issued nn June 1, 1993 (Series 1993}. Capital appreciation bonds are due in amounts of $265,000 to $4,475,000 due October i, 2009 through 2014. $ 5,974,475 5.25% to 5.50%, $15,030,000 Water and Sewer Revenue Bonds issued on December 4, 1997 (Series 1.997), with principal amounts of $3,750,000 to $3,945,000 due through Oetaber 1, 2010, with semi-annual interest payments due each October 1 and April 1 through October 1, 2010. The bonds were issued to refund a portion of the Series 1991 bonds. 7,695,000 5.245%, $10,000,000 Revenue Bonds issued February 25, 2000 (Series 2000) doe in principal amounts of $I07,209 to $173,852 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 o€ the costs of certain roadway itxzpxovements including water, sewer and drainage work, attd a portion of the costs of a tri-party radio system. (*} 1,379,226 3.40°/u to 4.2%, $15,020,000 Utility ~'ax Revenue Bonds issued December 19, 2002 (Series 2002) due in principal amounts o€ $450,000 to $510,000 through June 1, 2016, with semi-annual interest payments due each June 1 and December 1 through Tune 1, 2016. The bonds were issued to current refund the Utilities Tax Revenue Refunding and Imprnvement Bonds, Series 1992, advance refund the Utilities Tax Revenue Refunding and 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. 3,235,000 3.66%, $9,685,000 Revenue Refunding and Improvement Bonds issued December 2, 2003 (Series 2003) due in principal amounts of $40,000 to $90,04{1 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 I999, in whole and Series 2002 Taxable Bonds in park, (*) 430,400 48 City of Delray Beach, Florida. Notes to Financial Statements (Cowtinned) September 3Q, 20Q9 12, Yong-Term Debt {Contittued} 4.12%, $7,000,000 Water and Sewer Revu~nue Bonds issued May 6, 2006 (Series 2005A} with principal amounts of $440,000 to $650,000 due threugh Oe#ober 1, 2021, with semi-annual in#eres# paymen#s due each Detober ]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 prajec#s a# the South Central Regional Wastewater Treatxnezat Plain $ fi,770,fl04 3,98%, $2,350,000 'Water and Sewer Revenue Bonds issued November 17, 2006 (Series 2006E}, with principal amounts of $125,000 to $265,000 due. through October 1, 2021, with semi-annual in#erest payments due each October 1 and April 1 through October 1, 2021. The bonds were issued to finance the City's share of the l2eclaimad Water Treatment Project at the - . South Central Regional Wastewater Treatment Plan 2,]OS,000 4.41%, $9,000,000 Water and Sewer Revenue Bands issued September 18, 2407 (Series 2007), with principal amounts of $200,000 to $],220,000 due through October 1, 2427, with semi-annual interest payrents due each - - October 1 and April ]through October 1, 202], The bonds were issued tQ finance the City's share of the Reclaimed Water and Deep Well Project at the South Central Regional Wastewater Treatment Phut. 8,810,004 4% - 5°/fl, $24,535,000 Utility Tax Revenue Bands issued September 26, 2007 . (Series 2007}, with principal amounts of $812 to $100,06] due thxaugh October 1, 2421, with semi-annual interest payments due each December i - and Tune 1 through June i, 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 (*) 1,000,000 Total Revenue Bands. 37,39$,701 Unatxxortized band premium 71,$]2 Unamortized lass an bond refunding ~ {251,912} Total Revenue Bands, Net 37,218,607 Accrued in#erest on capital appreciation bonds ~ 9,052,171 Long-term installment agreements far equipment: 2.76% to 3.6112%, maturing in 20] 3 135,58 ] Comper~,sated absences payable 847,217 Total Business-Type Activities Long-'T'erm Dept, including current portion $ 47,264,670 * Amounts outstanding for the portion of this band issue related to governmental activities were reported under Governmental fletivities. The provisions of the bond resolutions for the debt of the Water and Sewer Fund, Municipal Galf Course Fund, Laf~eview Galf Course Fund and the Stormwater Utility 1?und differ in same respects, but generally pro~nde foz: 1, Annual debt serViCe funding by monthly transfers of cash tp a reserve account. 49 City of Delray Beach, i~'1Qrida Notes to Financial Statements (Continued) September 3©, 20Q9 12. Long-Term Debt (Continued) 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 requirements. 3. Maintenance of a renewal and replacement cash reserve set at 5% of the previous year's grass revenue. 4. Early redemption of outstanding bonds at'eall rates ranging from 101% to 102% of the instnement's face valve depending on the bonds and call date. Primarily bonds are subject to a penalty for early redemption. S. Investing of cash reserves in tune deposits, direct obligations of the l;I_S. Government and other authorized investments with varying maturity restrictions. 6. The use of cash is generally restricted to the fallowing priority: operation and maintenance, debt service, reserves, renewal attd replacezrrent, and any atlrer lawful purpose. Tang-term installment agreements consist of several agreements with vendors for the purchase of equipment used in business-type activities. At September 30, 2009, the gross amount of the equipment held under these agreements was $248,954 and the accumulated depreciation totaled $187,457. Most agreements coil for termination of the agreement and forfeiture of the equipment in the event the payments are not budgeted ox made. Minimum fufure lease payments through maturity under business-type activities long-term installment agreements (capital leases} as of September 30, 2009 are as follows: Fiscal year ending September 30: 2010 $ 42,640 2011 34,739 2412 34,740 2013 31,845 Total mizzimuzu payments 143,964 Less amount representing interest {'7,283} Outstanding balance at September 34, 2009 $ l3 b,b$1 Prior Period ~4djustment: At October 1, 2008 the City accrued iurterest of $8,377,883 on capital appreciation bonds issued in 1993 which was not previously accrued in error. The net assets at Qctober 1, 2008 as originally reported for Qre business-type activities and Water and Sewer Fund of $110,325,223 of $93,367,471, respectively, were restated to $101,947,340 and $84,984,588, respectively. Had flee error not been made, the change in net assets of the business-type activities and Water and Sewer k~rnd in the prior year would have been $796,982 Iess than the arrzarants reported_ Pledged utility Revenues: The City has pledged the future net revenues {generally customer revenues, net of specified operating expenses} of the water and sewer utility to repay the outstanding water and sewer utility revenue bonds issued from 1993 through 2007 to frnance improvements to the syst~;rn. 'The water and sewer utility revenue bonds are payable solely from the utility net revenues and are payable through 2022. Annual principal and interest payments an the bonds are expected to require less than 40 percent of utility net revenues. Total pritcipal and interest remaining to be paid on the wa#er and sewer utility revenue bands is $50,146,953. Principal and interest paid and utility net revenues for the current year were $5,970,384 arad $12,6$8,877, respectively. .Interest Expense: Total interest costs incurred on all City debt for the year ended September 30, 2009 were $5,690,344 all of which was expensed. i7efeased Bonds; At September 30, 2409 there were no defeased bonds outstanding. 50 City of Delray Beach, Florida riTotes i:o Financial Statements (Continued) September 34, 2409 12. bong-Term Debt (Continued) Segment Information: A portion of #hc City's Series 2002 and Series 2007 Utility Tax Etevenue Bonds, Series 2000 Revenue Bonds and Series 2003 Revenue Refunding and Improvement Bonds, were used to finance improvements to the City's two golf courses and stormvrater utility. The City's golf courses and the stonnwater utility are accounted for In #hree separate nomnajor enterprise funds, however the specific revenue streams of those funds are not specifically pledged for the repayment of those bonds which are secured by the City's utility tax revenues and non-ad valorem revenues. Accordingly, segment information is not required fflr the golf course and stormwa#er utility operations. Debt Maturities: Tie annual requirements to pay principal and interest to maturity on the bands outstanding as of Sep#ember 30, 2009 are as follows: Governmental Activities Fiscal Year Revenue Bonds Genera[ Obligation i3onds i'Jnding September 3Q I'rincigal interest Principal Interest Total 2010 $ 906,572 $ 1,661,355 $ 2,37S,D00 $ 1,201,615 $ 6,144,542 2011 940,482 1,622,888 2,485,000 1,091,540 6,140,410 2012 985,390 1,582,867 2,600,000 973,840 6,142,097 2013 4,02$,145 3,54D,709 2,720,000 849,827 9,138,681 2014 ],065,322 1,469,892 1,410,ODD 758,937 4,704,151 2015-2019 6,136,987 6,627,788 7,985,000 2,884,259 23,634,034. 2020-2024 7,281,902 5,142,962 9,890,000 1,072,387 23,387,191 2025-2029 9,296,658 3,13D,S46 - - ]2,427,204 2030-2032 6,763,816 687,415 - - 7,451,231 Total $ 37,405,374 $23,466,362 $ 29,465,000 $ $,832,405 $ 99,169,541 Business-'ape Activities Fiscal Year _ Revenue Bonds - T Ending September 30 Principal interest Total 2010 $ 5,218,874 $ 1,472,]39 $ 6,691,013 2011 5,458,653 1,216,155 6,674,808 2012 3,0]0,347 3,784,239 6,794,586 2013 3,000,061 3,812,141 6,8] 2,202 2014 2,916,403 3,845,022 6,761,425 2015-2019 10,836,739 5,780,360 16,617,099 2D2fl-2024 6,278,098 609,157 6,887,255 2025-2029 393,342 132,454 525,796 2030-2032 286,] 84 29,085 315,269 Total $ 37,398,703. $ 20,680,752 $ 58,079,453 Discretely Presented Component Unit--Delray Beach Community Redevelopment Agency Component Unit -Changes in component unit long-term liabilities of the Delray Beach ComFnunity Redevelopment Agency (CRA} for the year ended Sep#ember 30, 2009 were as follows: S1 City of Delray Beach, Florida Notes to Financial Statements (Continued} September 30, 2009 ll. >i.ong-Tenn Debt {Continued] Beginning lending Due Within Balance Additions Redactions Balance One Yesr Governmental Activities: Revenue bonds $ 15,415,000 $ - $ (1,365,000) $ 14,050,000 $ 1,425,000 Notes payable - 494,787 - 494,787 197,914 Pollution remediation obligation 475,971 30,000 (475,971} 30,000 . 30,000 'f'atal long-term debt $ 15,890,971 $ 524,787 $ (1,840,971} $ 14,574,787 $ 1,652,914 The CRA outstanding Revenue Bonds at September 30, 2009 consist of the following: 4.80% Delray Beach Community Redevelopment Agency Tax Increment RedevelapmentRevenue Bond (Series 1999A}, maturity daze Septernber 1, 2014. $ 5,495,000 4.2982°f° Delray Beach Comu;~unity Redevelopment Agency Tax Increment Redevelopment Revenue 13nnd (Series 2004A Tax Bxexr~pt}, maturity date September 1, 2019. 7,335,000 5.9095% Delray Beach Community Redevelopment Agency Tax increment Redevelopment Bonds (Series 2004E Taxable), maturity date September 1, 2016. 1,220,000 Total Revenue Bonds $ 14,050,000 Taz Increment Redevelopment Revenue Improvement Note, Series 200$ Taxable; On September 21, 2006, the CRA authorized the issuance of a revolving note agreement with a financial institution fox an amount not to exceed $7 million to finance the development of affoordable housing and other redevelopment projects pursuant to the CJtA's redevelopment plan. Interest on the outstanding principal balance of the note accrues at a rate equivalent to the one month LIBOR rate plus 28 basis points and is payable semi-annually on June 15` and December 1~, until maturity of the note on December 1, 2009, at which time all outstanding principal is due. The note is secured by a pledge of tax increment revenues on parity with the CRA.'s nutstar-ding revenue bonds. During the year ended September 30, 2009 the CRA had no borrowings on this npte and there was no outstanding liability at September 30, 2009. Nate PcryaBle: Tl~e note payable is to the South Florida Regional Planning Cauncil (the "Cauncil") based on an interlocal agreement between the CIZA, and the Cauncil to provide funding to the CfZA for the brownfield remcdiation and redevelopment of 20 platted lots in the Carver Square subdivision within the City. Interest at 3.0% on the outstanding principal balance is payable semiannually on June 2°a and December 2"d, commencing June 2, 2009. Principal payments are due in equal annual installments of $98,957 on June 2°d and December 2~, commencing December 2, 2009 and through maturity an December 2, 2011. .Pollution Rcmediatfon Obligation: In 2005 and 2fl06, the CRA purchased 20 platted lots in the Carver Square subdivision of the City for brownfield xemediatian and redevelopment of the.iots for construction of affordable single family homes. Based on the level of pollution present, State law required the CRA #a perform pollution rexnediation after the property was acquired. 'I'he CRA estimated the liability to be $475,971 based on the contracted costs to perform the required work. In 2009, additional monitoring work was requured increasirAg the total estimated cast by $30,000. The liability could change over time due to changes in the costs of goads and services or changes in the remediativn effort required by regulatory authorities. GASB Statement Na. 44, Accounting and Financial Reporting far Pollution Remediation Obligations, was effective for the CRA far the year ended September 30, 2009 and establishes accounting and 1inanciai reporting requirements for all governments io account for pollution remediation abligatinns that were previously not reported. The adoption of GASB Statement No. 49 resulted in a restatement to reduce the CRA's goverrunentaf activities net assets at October 1, 200$ by $475,971. 52 City of Delray Beacli, talorida Notes to ~'z~aucial Statements (Contiunecl) September 30, 2009 12. Long..Terrn Debt (CorEtinued) Pledged Revenues: The CRA has pledged a portion of future tax increment revenues to repay its outstanding revenue bonds issued in 1999 and 2004 to fznar~ce various redevelopment projects within the redevelopment district. The revenue bands are payable solely fronn the tax increment revenues generated by increased property values in the redevelopment district, Tax increment revenues were projected to produce mnre than 200 percent of the debt service requirements over the life of the revenue bonds. Total principal and interest remaining an the bonds at September 30, 2009 was $17,387,328, payable through September 1, 2019. For the current year, principal and interest paid and the tats! tax increment revenues were $2,080,292 and $ ] 3,103,722, respectively. Interest Expense: Total interest casts incurred and interest paid on alI CRA debt for the year ended September 30, 2009, were $709,945 and $715,292, respectively. All interest costs were expensed as a direct expense of redevelopment projects. ~rrnual Debt Service: The annual debt service requirements at September 30, 20D9 for all C1tA debt are as follows: Fiscal Year Ending September 30, Principal luterest Total . 2010 $ 1,652,914 $ 657,1165 $ 2,309,979 2011 1,717,914 591,4-98 2,309,412 2012 1,693,959 514,D4D 2,2D7,999 2013 1,670,000 437,454 2,1D7,4S4 2014 1,75D,DDD 358,764 2,108,764 2015-2019 6,090 000 793,348 6,883,348 $ 14,574,787 $ 3,352,169 $ 17,926,956 13. Pension Plans Aescrirption of the ]'Inns The City aoniributes to two single-employer defined benefi# pension plans covering snlistantially all full-time City employees. The General Employees' Pension Fund is for erraployees who have completed one year of credited service excluding the City Commission, City manager, assistant City manager, City attorney and associates, departznemt heads upon their written election not to participate, 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 lire employees. Each plan is administered by an independent Board of Trustees and is accounted for by the City as a separate fund. An actuarial report is prepared annually for each plan. General ,L~mploy¢es' 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: Tl~e funding metlrods and deternainatian of benefits payable are provided in the various sections of the City's Code of Qrdinances, including subsequent arraendments 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 operations of the food are administered and managed by the General Employees' Pension Fond 13nard of Trustees. The retirement committee (the Board of Trustees) consists of a chairperson and four additional rneznbers; all are appointed by the City Commission. (jesting Benefits vest 50% after five years of service plus 10% each additional year. 53 City of Delray Beach, Florida Notes to Financial Statements (Continued} September 30, 2009 13. Pension Plans (Continned) 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 Benefzt-2.5°1° of the average monthly compensation times years of service with a max; ~~~m benefit of 7S%. Monthly income is payable for the life of the participant, the same income to the surviving spouse #'ar one year, then 60% of the monthly income to the surviving spouse unh-1 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°1°. );mployees selecting this option will contribute an additiena13.4S% of eamv~gs. There was also an option of purchasing all at 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 Cption 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 a sei~ administered 401(a) Plan. After a maximum of 60 months, the employee must terminate employment with the City. Emplo~~ee Contribxrtions-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 contribvtioiZ af° 3.45% (making a total of 5.95%). if an eitaplayee leaves covered employment ar dies before five years of credited service, accumulated employee contributions are refunded to tlxe enaplayee or the designated beneficiary. City Cvntrilrutivns~ity conln-butions axe based upon actuarially determined amounts, which together with earnings and employee contributions, axs sofficient to fitttd the plan. Police and k'ire~g>:ters' Retlreraent astern Frond -The benefit provisions and all other recltiirements 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 fixnds 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 a# any time be insufficient to meet anal pay the beziefits due, the City shall suppleixiezil the futrd by an appropriation from current funds, or from any revenues which may lawfully be used for said purposes in an amount sufficient to tnalce up the deficiency. The operations of the fund are administered and managed by the Police and Firefighters' Retirement System Board of Trustees, consisting of two outside cattunissioit appointees, two designees from the chief(s), one member of each department elected by the naezxibership and the Mayor of the City. Vesting-Benefits fully vest aSer 10 years of service, Eligibility for 14~ormal Retirement Upon completion of 20 years of service regardless of age. 14nnual Retirement 13ertefzt Normal retirement benefits are based upon 2.5°fo of average monthly earnings times years of service with a maatitnutn 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 using a 3.5% multiplier for each year of service once 20 years of service is attained with a maximum of 87.5°/a. Employees selecting this option will contribute an additional 54 City of Delray Beach, F1Qrida Notes to financial. Statements {Continued} - September 30, 2009 13. Pension Plans (Continued) 3% of earnings. The normal retirement benefit is payable far the lifd 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 Benefits--The plan also provides for disability retirement and death benefits. ~ Deferred RetirernPatt Option Plan (DROP) Employee's wi#h 20 years of credited service have the option of entering the DROP plan. When entering the DROP plan, the employee will net terminate employment with the City, but will cease accruing a benefit undex the plaq and the monthly benefit as of the election date will be directed to aself-administered ~€UI(a) plau..A.ltex a maximum of 6Q months, the employee must ter~rsinate employment with the Gity. Employee Contributions--l;ffective March 15, 2004, if the employee selected the 3.S% multiplier, the contribution is 6°10. If not selected, the employee contribution rate remains at 3% of an employee's annual compensation, if an employee leaves covered eznplayment prior to vesting, contributions are refunded to the employee with intexest. State of Florida Contributions'-Pursuant to Chapters 175 and 1$5 of the Florida Statutes, a premium tax on certain casualty inseirance contracts written on properties within the City is collected by fihe State and rezz3.itted to the City annually for the Police and Firefighters' Retirement System Fund. City Contributions~ity contributions are based upon actuarially determined amounts which, together with eazxtings, employee and state contributions, are sufficient to fund the plan. Metnibership Membership data afthe City's pension plans as of October 1, 2008, the date of the most recent actuarial valuations, is summarized as follows: Police and General Firefighters' Employees' Retirement Pension I+und System Fund Retirees and beneficiaries receiving benefits 213 177 Temunated employees entitled to benefits but nat _ 48 7 receiving them ~ _ Vested cutrent employees 279 ~ ~ 115 Nan_vested current employees . 136 143 Related Party Transactions There were no City securities included in the assets of the General l~mployees' Pension Fund or the Police and Firefighters' Retirement System Fund. Actuarial Methods aad Signilitant Assumpiiores General Employees' Pension Fund Valuation date October 1, 2UUS Actuarial cost method Aggregate Cos# Police and Firefighters' Retirement System Find October 1, 2008 Revised June 29; 20(19 Entry Age Normal 55 City of Delray ~3each, Florida Notes to Financial Statex~xcnts (Continued) 13.1'ensian Plans {Continued] Post retirement benefit increases Azrtoxtization method Remaining amortization period Asset valuation method Actuarial assumptions: Investment rate of return Projected salaryinareases* Cast of living increases * Includes inflation rate September 30, 21109 General Employees' Persian Funcl None NIAt`} NIA{~t Recognition of 20% of difference between. market value of assets and expected actuarial asset value 7.25°!° 4.4% -7.2% based an service - N/A 3.00% Police and 18lreiightcrs' Retlrement System Fund Annual increase of I% plus that Gvlrich can be funded by State revenue bevel Percent of Payroll Closed 30 years 5 year Smooth Market {as of October 1, 2005) 8.30% 5.25% 1.00% 4.40% {1) Use of the Aggrega#e Cost method does not identify and separately amortize unfs~nded liabilities. AccvrdingIy, information about funded status and funding p~rvgress presented below and as required supplementary informs-tiara following the zaotes to the financial statements was prepared using the lsntry Age Actuarial Cost method and is intended to serve as a surrogate far Elie funded status and funding progress of the plan, The asset valuation method used in determining the annual required contribution for the General Employees' Pension Fund was changed from the 5-year smoothed market method to a method that recognizes 20% of the difference between the market valve of assets and the expected actuarial asset value, effective with the October 1, 2048 valuation. Other actuarial assumptions that changed efi'ective with the October 1, 2008 valuation include a decrease in the investment rate of return to 7.25% from 7.75%, projected salary increases of 4.4% - 7.2% versus a fixed 5% used in the prior valuation, and a decrease in the inflation rate to 3% from 4%. Centril~ution Requirements and Contributions lYlade The Florida Legislature, City Commission and each Pension Board govern the City and employee contribution requirements for bath plans. The City's contribution to the plans is an actuarially determined periodic amount to ensure that sufliicient assets will be available to pay benefits when due. Attnual pension assts and contribution infor~natian for the last three fiscal years are as follows: Annual Net Pension Persian Percentage Obligation Year l~.nded September 34 __ ._ Cost Contributed asset} _ . Genera! )Employees' Persian Fund 2449 $ 2,542,936 100°/v $ 0 2008 2,3}8,379 104 ~ 0 2007 2,008,Q58 l00 4 . Police and liirefigliters' Retirement System Fund 2408 $ 5,608,475 100% $ (62,425) 2007 5,174,531 100 {65,861) 2006 4,789,159 100 {69,935) 56 City of Delx-ay Seach, Florida Notes to Financial ~taterrteitts (continued) September 30, 209 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: 1~nn~iat required contribution (ARC) $ 5,608,475 Merest on net pension obligation (NPO) {5,598) Adjustment to ARC 9,434 Annual pension cost 5,612,311 Contributions made 5,6D8,475 -.... Increase in NPO 3,836 NPO (asset) at October ], 240? _ (65,86 ~ NPO {asset} at September 30, 2008 $ (62,025) Tended Status and finding Progress 'The funded status of the plans as of October 1, 2008, the most recent actuarial valuation date, is as follows (dollar amounts in thousands): Actuarial Accrued _ . . UAAL as a Liability .. Percentage Actuarial Value of (AAI,) Unfunded Funded. Covered of Covered Valuation Assets Entry Aga {UAAL} Ratio Payroll Payroll Plan Date (a} {b} (b-a} (alb) {c) -_[(b-a}/cj General Employees 10/l/2008 $ 80,988 $ 84,914 $ 3,926. 95.40% $ 18,990 20.7°l0 Paliae & P'ireftghters 10111200$ 119,479 169,435 49,056 70.48°/a 17,564 279.3% The schedules of funding progress presented as required supplementary information (151} fallowing the notes to the financial statements, present zmultiyear tread information about whether the actuarial values of plan assets are increasing or decreasing over time relative to the actuarial accrued lialaility for benefZts. Significant Accounting Policies . Basis of}lccounting-The City's fnrancial statements for the two pension funds'are prepared using the accrual basis of accounting. Employer and plan member contn-butions are recognized in the period that contrilrutians are due. Method Usea''to Yalue Investments -Investments in the two pension funds are reported at fair value determined by the independent custodian for each plan using various third-party pricing sources. Pension Plan Financial Statements The General Employees' Pension Fund does not issue a publicly available £-nancial report. The financial statements for the General Employees' Pension Fund as of and far the year exded September 30, 20(19 are as follows: 57 City of Delray Beach, Floxida Notes to Financial Statezlaents (Coxztinued) . September 30, 2D09 13. Pei~slon Plans (Continne~ Statement of Plan Net Assets ASSETS Cash and cash equivalents Investments: Equity securities Mutual funds . Employee contnbutions receivable Prepaid expenses Interest and dividends receivable ~~ Total asset LIABILITIES Accounts payable Total liabilities NET ASSETS held in trust for pension benefits $ 1,009,965 7,474,067 62,671,137 30, 068 44,031 11,905 X,246,173 34,324 34,324 $ 71,211,849 Statement of Changes in Plan Net Assets ADDTTIONS - Contributians_ Employer $ 2,621,586 Planmembers~ ~ 606,902 TOtal CC?1tT1b1ItiDI15 3,228,488 IriV05tIT1entInCCYme Net appreciation in fair value of investments 1,016,023 Interest 3,378 Dividends _ 361,220 1,380,621 Tess investment expenses -custodian fees 241,025 Net investment income 1,139,596 Other income 171,160 Total additions 4,539,244 DEDIFCTIONS Benefits .3,247,825 Refunds of contributions 13,629 Other operating expenses. 13,369 Total deductions 3,274,523 Change In net assets 1,264,621.. Net Assets at October 1, 2008 69,947,228 Net Assets at September 30, 2009 $ 71,211,849 The Police and Firefighters' Retixement System Fund issues a publicly available financial report that includes financial statements and required supplementary information. That report znay be obtained by writing to the City of Delray Seac3s, 104 NW 1~ Avenue, Delray Beach, FL 33444 ox by calling {561) 243-7012. 58 Ci#y a~Delray Beach, Florida Notes tg Financial Statemezxts (Conti~.ued) September 30, 2009 13. ]Pension Plans (Contlnuecl) Uttter ~cnployee Sene~t flans P'or employees not covered by one of the City's pension plans, the City contn~uted 9.5% of the base salary to the ICMA 457 Deferred Compensation Plan up to allowable limits. In 1995 the City instituted a 401{a) plan for department Yseads with a 3% match (Resolution 17-97}. In 2000, this program was opened to certain eligible znanagemexat and key employees to contribute up tv 3°fo of their base salary to the lC1vIA Deferred Compensation Plan ar 3% of their base salary to the IGMA 401(a} Plan with the City matching the contn~butian (Administrative 1?olicy EB-15). Employees who were eligible to participate in the 401{a) Plan could exceed the 3% contribution with a8er tax dollars. All contributions are in accordance with lrxternal Revenue Service xegulations. Activity in the 401(a) Plan for the year ended Septeznbar 30, 20(}4 is summarized as follows: Balance at Oetaber 1, 2008 $ 440,765 Employer contributions 36,934 l7trzployee conixt'butions 36,934 lnvesttnentLASS {85) Distributions (35,252 Balance at September 30, 2009 $ 479,295 The City lzas implemented a VantageCare Retirement Health Savings Plan which allows employees im the calendar year prior to termination (retirement), to make an election to deposit tax free part or ail of their accnmulated sick and vacation pay into the Plan. The Plan would #hen allow tax free withdrawals if the funds are used for qualified medical expenses. The effective date of the Plan was August 2002. In Maxch 2007, the City was notified by 1f;IvIA, the administrator of VantageCare Retirement Health Savings Plan, that all voluntary contributions must cease iznanediately. Titet~efare, oantributions were allowed until December 31, 2007 if the employee made the election prior to December 31, 2006. Balance as of October 1, 2008 $ 599,831 Investment loss (11,029} Service fees (2,088) Distributions (57,459) Balance as of September 30, 2009 $ 529,245 14.Othsr Pastsinplvyment Benefits (OPEB) The Gity adopted GASB Statement Na. 45, Accounting and Fnnanciul Reparfing by Employers for Postemplnymerat Benefits ether Than Pensions, for the fiscal year ended September 30, 2009. Statement 45 establishes the financial reporting and disclosure xquirements by employers for other pasternployment benefits {OPEI3}. In aeaardance with Statement 45, the City set their net OPEB obligation at zero as of the beginning of the transition year ended September 30, 2009 and will apply the measurement and recognition requirements of Statement 45 on a prospective basis. OPEB Plan The City administers asingle-employer defined benefit plan (kbe "OPEB Plan"} that provides medical and life insnrance benefits to eligible retired employees and their beneficiaries. The City Commission has the authority to establish and amend premiums for and the benefit provisions of the OPEB Plan. The OP1;B Plan is financed on a `day-as-you-go" basis and is not administered as a formal qualifying trust. The OPEB Plan does not issue a publicly available financial report. 59 City of Betray Beach, Florida Notes to Financial Statements (Continued) September 30, 2009 14, Other Postemployment Benefits {OPEB) (Continued) Florida Statute 112.0801 requires the City to allow retirees to buy healthcare coverage at the same group insurance rates that current employees are charged resulting in an implicit healthcare benefzt, The State of Florida prohibits the OPEB Plan from separately rating retirees and active employees. Therefore, both groups {active attd retirees} are charged an equal, blended rate premium. Although both groups are charged the same blended rate premium, GAAP requires the actuarial figures to be calculated using age adjusted prermums approximating claim costs for retirees separate from active etnpioyees, The use of age adjusted prenaiurns results is the addition of an implicit rate subsidy into the actuarial accrued liability. OPEB Plan members receiving benefits contribute 100% of the monthly premiums ranging from a minimum of $556 to a maximum of $1,488 for medicaUprescription coverage and at a rate of $.33 per $1,000 of the face value for life instance coverage. Delray Beach Police, Firefighters & Paramiedics Retiree 13ene£rt Fund The Delray Beach Police, Firefighters & Paramedic Retiree Benefit Find (the "Retiree Benefit Fund"} is a single- employer defined benefit plan established for the purpose of providing full or partial reimbursement for health insurance premiums or other qualified benefits permitted under Section 501 {c}(9) of the Tntemal Revenue Code. The Retiree Benefit Fund was established pursuant to collective bargaining agreements between the City and the Professional l±irefighters & Paramedics of Delray Beach, Local 1842, IAFF and the Police Benevolent Association (PBA}. A grrust was created on May l4, 2U02 and is administered by a separate Board o€ Trustees consisting of seven individuals, including the President of the Local 1842, IAFF', five union representatives (three PBA, two Local 1842, IAFF) and anon--bargaining unit active freftghter elected by eon bargaining unit participants. The City is neither the trustee nor the administrator of the Retiree Benefit Fund Accordingly, since the City does not control, have access to or hold any assets of lire 'T'rust and has no reversionary rights in the assets of the, Trust, the Retiree Benefit Fund is not reported as a fiduciary fund of the City. The Retiree Benefit Fund does not issue a publicly available Financial repork Participants in the Retiree Benefit Fund include persons employed by the City of Delray Beach Fire Rescue Department as certified firefighters or paramedics on or after October 1, 2001; persons employed the City of Delray Beach Police Department as certified law enforcement officers on or after October 1, 2004; and, certain Police and Fire Rescue department employees for whom contributions were made for each year since October 1, 2001, regardless of the ernplayee's certification as a firefighter, paramedic ox law enforcement ofFcer. Participants are eligible for benefits on or after the fast day of the month following the date of their retirement from the City. The Retiree Benefit Fund curtetitly does oat require contributions from participants. The obligation of the City to fund the Retiree Benefit Fund is established by the applicable collective bargaining agreements in effect between the City and the unions. The Retiree Benefit Fund provides for a minimum annual benefit of $3,900 fox covered employees that are not certified as firefighters, paramedics or law enforcement officers. For certified firefighters, paramedics and law enforcement officers, the Retiree Benefit Fund provides for an annual benefit of $5,200 reduced 3% per year for service less than 25 years, and increased 3% per year for service greater than 25 years. Actuarial Methods and Signitficant Assumptions 'Valuation date Actuarial cost method Post retirement benefit increases health care cost tread rates OP11B Plan Retiree Benefit Find October 1, 2007 Entry Age Noxrriai None 10% per year initially, reduced anxtually N1A -Benefits are for fixed amounts by .5% to an ultimate rate of 5% itt and do not adjust for changes in health 201 S care costs October 1, 2fl08 Entry Age Nortxtai Done 60 City of -elray Beach, Florida Notes to Financial Statements (Continued) September 30, 20U9 19. Otber Postemployntent Benefits (Ol°PB} (Continued) OPEB Plan Retiree Benei'tt mind Amortization method Level Percent of Payroll -Closed Level Izercent of Payroll-Closed Remaining amortization period 30 years 24 - 30 years Asset valuation method NIAt~~ Market Value of Assets Actuarial assumptions: Investment rate of return 4.5%~~ 8.0°!° net of investment related expenses Projected salary inareases* 4.0°/a 6,25% * Includes inflation rate N/A 4.00°/a {I} The plan is funded on apay-as-you-gn basis and is not administered as a formal cpaalifying trust There wore na plan assets as of October 1, 2007, the date of the most recant valuation.. {2) Since there are currently no invested plan assets held in trust to finance the OPEB obligations, the investment rate of return is the long-term expectation of investment return nn assets held in City funds pursuant to its Investment Paliuy. Actuarial valuations involve estimates of the value of reported amounts and assumptions about the probability of events far into the future. Actuarially determined amounts are subject to continual revision as actual results are compared to past expectations and new estimates are made about the future. Projections of benefits are based on the types of benefits provided under tlMe substantive plan at the time of each valuation and on the pattern of sharing of benefit casts between the employer and plan members to that paint. In addition, projections of benefits for financial reporting purposes do not explicitly incorporate the potential effects of Legal or contractual funding limitations on the pattern of cast sharing between the employer and plan members in the fugue. Actuarial calculations reflect a long-term perspective and accordingly, actuarial methods and assumptions used include techniques that are designed to reduce short-term volatility in actuarial accrued liabilities and the actuarial value of assets. Annual OPEB Cost and Net OPEB Obligation The annual OPEB cast is calculated based nn the annual required contnl~ution of the employer (ARC), an amount ~- actuarially determined in accordance with the parameters of Statement 45. The ARC represents a level of funding that, if paid on an ongoing basis, is projected to cover the uorxnal cost each year and the amnrtiza#ian on any unfunded actuarial liabilities {ar funding excess) over a period not to exceed thirty years, Statement 45 allows for implementation during file transition year to set the net OPEB obligation to zera as of the beginning of the year and to apply #lie measurement and recognition requirements an a prospective basis. The City's annual OPFsB cost and the net OPEB obligation for the year ended September 30, 2009 (transition year) was based on an antuarial valuation done as of October 1, 2007 for the OP1;I3 Plan and October 1, 2008 for the Retiree Beneftt end and is summarized as follows: Retiree Benefit j ~PEB Plan itunrl Total Annual required contribution $ 949,409 $ 575,5$4 $ 1,525,993 Interest an net OPEB obligation - - - Adjustment to annual required contn`bution - _ _ Annual OPEB cost 949,409 576,584 1,525,993 Contributions made _ _ _ (669,467) {669,467) 61 City of Delray Beach, Floxida Notes to Financial Statements (Continued} September 34, 2049 14.4ther Postemployment BeneIIts {C)PE)3) (Continued) Retiree Benefit ©PEB Plan Pand Increase in net OPEB obligation {asset) Net OPFiB obligation at October 1, 2408 Net ©PEB obligation {asset) at September 34, 2009 Total 949,409 $ [92,883) $ 856,525 $ 949,449 $ (92,883) $ 8S6,S26 During the year ended. September 30; 2009, the City contributed 0% and l t 6% afthe annual required contrbution #a the OPB13 Plan and lZetiree Benefit Fund, respectively. Since the year ended September 30, 2009 was the year of implementation of Statement 45 and the City has elected to implement prospectively, prior year comparative data is not available. ~tnded States and lending Progress The OPEB Plan is financed on a pay-as-you ga basis. The City is regirired to contribute to the Retiree BeaeIIt Fund an amount equal to the annual required contribution (ARC),an amount actuarially determined is accordance with the parameters of GASB Statement 4S. The ARC represents a level of funding that, if paid on an ongoing basis, is projected to cover the normal cost each year and amortize any unfunded liabilities for funding excess) over a period not to exceed 3D years. The current ARC rate is 2.85% of annual covered payroll. The funded status of each plan as of the most recent actuarial valuation date is as follows (dollar amounts in thousands); Actuarial Accrued UAAL as a Liability Percentage Actuarial Value of {AAL) Unfunded k~xnded Covered of Covered Valuation Assets $atry Age {LlA_AT,) Ratio Payroll Payroll Plan Date {a) (b) {b-a) {a!b) {c) [{b-a)/e] OP7cB Plan 1D/1/2007 $ - $ 11,436 $ 11,436 0% $ 42,431 27.0% Retiree Benefit Fund 1D1112Dt18 2,457 7,97D 5,913 25.8% 20,257 29.2% The schedule of funding progress is intended to present multiyear trend information about whether the actuarial values of plan assets are increasing or decreasing aver time relative to the actuarial accrued liability for benefits. Since fiscal year 2009 is the year of implementation of Statement 4S, funded status information for prior years is not available. l5. Self ln~surance Program The City laas a Managed Retention, Protected Self-lnsurance Program whereby the City is mainly self insured fox liability coverage. Workers' eompensatian, fidelity and property coverage are insured rvitli laxge deductible self- insured retentions. There were no significant changes in insurance coverage from the prior year and the amounts of settlements did not exceed ;nc,rrance coverage for any of the past three years. A lass fund of $1,95D,DDD maxiznttrn applies per year over which an aggregate coverage of $1,D00,DD4 of commercial insurance would apply should the foss fund be exhausted in a gives year. The City also maintains a selfinsured health plan with Cigna as the third party administrator. The City is self insured up to a stop loss of $100,DD0 per claim and has purchased excess instu'anee for claims exceeding the stop loss for individual and aggregate claims. s2 City ref I3elray Beach, Florida Notes to Financial Statements (Continued) Septetx~,ber 30, 2009 15. Self ;J-surance Program {Cantintled) Contributions from other fiords are made as needed to' meet the estimated payments resulting from purchased and self insurance programs, and operating expenses based nn the City's historical experience and acase-by-case evaluation of claims. Far the year ended September 30, 2009, contributions of $12,478,324 were made to the lnsurance Fund by other funds and aze reflected as interfund services provided and used in floe accompanying ~nanGaal Staten2entS. The City has recorded a claims liability of $4,714,863 {$1,736,4] 6 current and $2,978,447 Tang-term) at September 34, 2409, which is a decrease of $1,101,X25 fxorn the prior year. The decrease reflects slower claims development for all lines of insurance and a reduction in vary large claims. Tire Iiability falls wi#hin the actuarially determined xange, from an actuarial valuation for all claims based upon the date the lass was iaGUn-ed and includes a provision far claims incuxxed but not yet reported {ISNR). The following summarizes the claims liability activity for ~e current and prior year: Balance at September 30, 2047 $ 5,218,709 Claims incurred 9,077,917 Claims paid {8,480,53&) . Balance at September 34, 2008 5,815,988 Claims incurred .. 6,811,396 Claims paid - (7,412,521) Balance at September 34, 2049.. . . $ 4,714,863 The claims liability at September 34, 2009 and 2008 is summarized as follows: zao~ zoos Current Nan current 16. Related Party 1Yansactlans $ 1,736,41b $ 1,83D,149 2,978,447 3,985,839 $ 4,714,863 $ 5,815,988 The CR.A. is a component unit of the City of Delray Beach, Florida. For the year ended September 30, 2009 the C1lA's tax increment revenues include $8,238,659 received froth the City. CRA expenditures for the year ended September 30, 2009, include charges of approximately $1,243,000 for contractual services provided by the City to the CRA in connection with various administrative and development activities and a $500,000 sponsorship of City tennis tournaments, A# September 30, 2049, the City had a receivable from the CRA of approximately $2,324,000 for reimbursements of certain administrative and redevelopment expenditures. l7. Expenditures in Excess of Appropriations Fox the year ended September 30, 2009 expenditures exceeded the budgeted appxapriations far the failovving General 17und departments. General Government City Manager $ 4,864 City Clerk 5,156 Finance 1&,564 Cemetery 7,636 53 Cify of Da]_ray Beacb, Florida Notes to Financial Statements {~or~tinued} September 30, 2009 17. )Cxpenditares in Excess oL Appropriations (Continued) ~FIl3i1C Safety Snilding Inspection $ 34,645 Physical Environment Building Maintenance' 7,206 - l'arlcs and Recreation . Teen Center . " . .. 97 _ Beach Operations 12,221 Community Center 3,472 Parks Maintenance 184,651 The excess expenditures were offset by savings in other City deparhnents. ~" Discretely Presented Component 1Tnit-Delray Beacb, Caxmm~nlty ~t.edevelopmeni Agency. ~ . For the yeax ended September 30, 2009 expenditures exceeded the final budgeted appropriations for the follawitzg General Fund functions: General Government $ 52,491 - Property Managemetrt 356 Economic Development . Axeawide and Neighborhood Plans ~ ~ ~ 223,946 RedevelogmentProjects .. ~ ~ 515,814 Comitzauttity Improvement and Economic Development 31,$07 1$. Cammitments and Contingencies Contract Connmitments -- - - . . The City has various long-term contractual obligations for construction projects on wlticlt work has not been completed. The remaining cornzx~ittnents on these obligations at September 30, 2flfl9 are as follows: Capital Projects funds $ 5,942,142 Water and Sewer Fund 1,272,759 . $ 7,214,901 1'aynnents froth the Water afid Sewer Fund for work in progress have been capitalized as construction iti progress in the Water and Sewer Fund The projects fznanced by the capital pxojec4s funds 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 iu ether legal matters occurrsng iri the notxnal course cif operations. While the ultimate outcome of these matters cannot be determined at this time, iu tb a opinion of the City and its management, no material losses in excess of estimated liabilities or insured limits axe expected to result frorxi the settlement of these claims. - 64 City of Delray Beach, Florida Notes to Firtancial Statements (Continued) September 30, 2009 18. Commitments and Contingencies {Continued) Waste Management The City has a contract with 'Waste Management, lnc. for garbage collection. I}~ing 2009 a resident complaint prompted an investigation by the City to determine whether customers may have been ovexbilled by "Waste Management. The investigation is ongoing and the ultizxtate outcome cannot be determined at this time, although City management does not believc that any resulting receivable or payable would be material to the financial position of the City. Gran#s The grant xevenues received by the City are subject to audit and adjus#ment by the grantor agencies, princirpally the Federal govermnent and the State of Flarida. If expenditures are disallowed by the grautvr 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 ~ritli the terms of the grant and applicable federal and s#ate laws and regulations. bebt Service Reserve Surety Bond The Gity's Utility Tax Revenue Brands (Series 2002 and 2007} and Water and Sewer Revenue Sands (Series 1993 and 199'7), collectively the 'Bonds", require the Gity to maintain a debt service reserve equivalent to the maximum principal and interest due on the Bonds in any year through maturity. The Bonds' resolutions provide that the City may purchase a credit facility for the debt service reserve requirement from eta institution with the highest credit rating for municipal bonds insured ar guaranteed by that institution. T'he City purchased surety bonds from Ambac Assurance Corporation (AMB~.C), MBIA Assurance Cozp, (MB1A) and Financial Security Assuxance Holdings Ltd. (FBA) to satisfy the debt service reserve requirement for the Bonds at the date of issue. At Septaruber 30, 2009 AMBAC, MBIA and FSA had credit ratings less than the highest rating from Moody's Investor Service, Inc. {Moody's) and Standard and Poox's (S&la). City management, in consultation with bond counsel, has determined that the City is not required to obtain surety bonds or provide cash and investments to replace the sureties on hand at September 30, 2009. The Bonds outstanding at September 30, 2009 have a credit rating no lower than the City's underlying rating of A2 from Moody's and A from SBc.P. Discretely Presented Conrxpanent 1_Init -Delray Beach Cam€nunity ltedevelapment Agency. Delray Beach Public Library: The CItA entered into au agreement dated Suly 1, 2003, with the City and the Delray Beach Public Library Association, Tnc. (the "X.ibrary") for relocation of the Deb°ay Beach Public Library to West Atlantic Avenue, In 2005, under the terms of the agreement, the CRA exchanged a parcel of property owned by the C1tA on West Atlantic Avenue wi#h a carrying value of approximately $SD9,ODD for the current library site owned by the City. The C1tA also agreed that in the event it disposes of the current library site, any proceeds in excess of $1.7 million, plus all related selling expenses incurred by the GRA, will be paid to the City. . Operatinu Grants: The CItA entered into agreements with the following organizations #o provide funding for their operations during the year ending September 30, 2D10: City of Delray Beach -Clean and Safe Program $ 1,048,D05 Delray Beach Community Land Trust, Ina. 350,000 Delray Beach Public Libxary Association, Inc. 308,OOD Downtown Marketing Cooperative 210,D00 OId 5chaol Square, Inc. 28S,D00 1"1'OCH, Inc. _ _ 250,OOt} Total Grant Commitments 2,451.D05 (5 Ciiy a~Delray Beach, Florida Motes to Financial Statezraents (Continued) September 30, 2009 18. Com~rr-itments anal Contingencies {Continued) Discretely Presented Component Unit-Dnweatown Development Autfevrify Cooperative Agreement: The DDA entered into an agreement with the City and C)2A and the Greater Delxay Beach Chamber of Commerce {the name of the group is the Downtown Marketing Cooperative (the "Cooperative")). The Cooperative is governed by a six member appointee board each composed of two appointees from the Chamber, two appointees from the CRA and one appointee each f2om the DDA and the City. The agreement was originally for a term of three years between Ianuary 1, 2006 and December 31, 2fl08, and was extended through December 31, 2011. Each party is obligated by the agreemment to eontrxbute funds annually to support the activities of the Cooperative. The agreement requires the following coa#ibutions: CiZA $160,000, DDA $121,891, City $40,000 and the Cl-aznber $22,Q00 in cash plus iu kind services including telephone, secretarial and af~ce facilities for the DDA. xhe Cooperative is required to reimburse the City 35°10 of its overtime costs avex $1,000 per even. Tile Cooperative also agreed to pay the fu11 costs of any equipment the City is required to rent from a contract supplier to support the event as wail as ren#al cost of a hydraulic stage, All required contributions to flee Cooperative were made for flee year ended September 30, 2009. 66 Required Supplementary Information CITY OF DELRAY BEACT~, FLORIDA BUDCxETARY COIvIPARISON SCHEDULE GENERAL FUND For the Fiscal Year Ended September 30, 2009 REVENUES Taxes ~ - ~ . . Fees 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 - - Interestand fiscal ch"arges Total Expenditures Excess ofRevenues Over {C7ndex) Expenditures Variance with Final Budget - Sudgeted Amounts -- Aetaal Positive Original Final Amounts Negative) .. $ 63,462,620 $ 65,165,62D $ 65,040,400 $ {125,220} 11,301,180 9,312,590 8,393,462 (919,128} 7,022,460 6,460,780 6,297,937 (162,843} 7,379,500 7,265,20D 7,982,407 717,207 860,600 836,600 574,409 (262,191) 5,938,650 5,222,819 5,080,674 (142,145) 95,965,010 94,263,609 93,369,289 894,320) - I'7,734,360 18,995,813 ~ ~ 1'1,314,694 1,081,119 53,962,550 53,756,072 52,284,241 1,471,831 4,731,670 4,662,488 4,460,217 202,277. 11,969,440 11,882,902 11,881,904 998 3,741,330 3,741,330 3,658,474 82,856 1,921,430 1,842,7311- 1,847,901 (5,171) 94,060,780 94,881,335 92,047,431 2,833,904 ].,904,230 (617,726) ~ 1,321,858 1,939,584 OTHER FINANCING SOC7RC1uS (USES) Transfers in 3,183,]00 4,106,950 4,101,919 (5,031} Transfers out (4,856,330) (4,632,192) (4,692,965) (60,773} Total Other Financing Sources [[]see) 1,673,230 (525,242 (591,046 65,804) Net change in fund balance $ 231,000 $ (1,142,968) 730,812 $ 7.,873,780 Fund balance -October 1, 2008 22,922,676 Difference between GAAP acrd budgetary basis 86, 861 Fund balance ~ Septembex 30, 2009 $ 23,740,349 The notes to budgetary comparison scbedule are an integral part of this schedule. 67 City of Delray Beach, Florida Notes to Budgetary Comparison Schedule September 30, 2009 I. Bndgetary Accannting An appropriated budget has been legally adopted far the General Fund on the same modified-accrual basis used to reflect revenues and expenditures, except that for budgetary purposes, current year encumbrances are treated as expenditures, on-behalf payments from the State far Police and Firefighters' pension benefits are not budgeted and capital outlays are reflected as current expenditures within each governmental function. T`he City Commission approved budget amendments totaling $595,417 during the year ended September 30, 2009, which increased the - original General Fund appropriations {expenditures and transfers out) from $98,917,110 to a revised #otal of $99,513,527. 2. Budget and Aetna[ 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 froth the revenues and expenditures reported an the basis of GAAP. These differences can be reconciled as follows: Revenues Expenditures Current year encumbrances outstanding at year end $ - $ 339,575 Prior year encumbrances paid in the aurxent year - (252,715) Net encumbered expenditures - 86,861. Qn-behalf payments for pension benefits {1,600,347). {1,500,347) Proceeds from sate of capital assets 3,$02 - Net differences - GAAI' and budgetary basis {1,595,545) {1,513,4$5) GAAP basis 94,965,834 93,560,917 Sudgetarybasis $ 93,369,289 $ 92,047,431 68 City ol"Delray Bead, Florida ~. Required Supplementary ~iaformation- Schedules of Pension l~'unding Progress September 30, 2~0~ General Lm to ees' Pension Plan Unfunded (Assets Actuarial In Excess of) AAL Accrued X,lability Unfunded (Assets as a Percentage of Actnarsa3 Actuarial Value (AAL)- l;ntry in Excess of) AAL Ftinded Ratio Covered Payroll Covered Payroll Valuation Date of Assets (a) a (b) (b-a) (alb) c) ~(b-a)!c] 1011/2©(13 $ 56,61(1,019 $ 53,583,424 $ (3,425,599) 145.6 % $ 14,847,342 (24.4} 10/1/2004 58,552,571 59,247,630 695,054 38.8 35,844,035 4.4 1011!2005 61,455,670 52,126,597 67D,927 98.9 36,203,552 4.1 ]01112046 70,326,850 71,373,310 1,046,464 98.5 16,839,133 6.2 10/3/2007 77,435,230 78,839,518 1,403,288 98.2 17,817,350 7.9 10/1f2008 80,987,834 84,913,592 3,925,758 95.4 78,990,451 20.7 Note: The annual required contribution for the General Employees' Persian Plan is determined using the Aggregate Cost method, which does not identify and separately amortize unfiznded liabilities. Avcvrdingly, infarmatian about funded status and funding progress presented in the notes tv the financial statements and above as required supplementary infonnatiar was prepared using the Entry Age Actuarial Cost method for that purpose and is intended to serve as a surrogate far the funded status and funding pxagress of the plan. Pollee a©d PYrefighters' Retirement System Unfunded (Assets Actuarial in Excess at) AAL • Accrued Liability Unfunded (Assets as a Percentage of Actuarial Actuarial Yalue (AAL;~ Entry in Excess of) AAL banded Ratio Covered Payroll Covered Payroll Valuation bats of Assets (a) A e (b) (b-a) alb (c) 1(b~a)Icl 14/1/2003 $ 79,fl37,463 $ 102,962,143 $ 23,924,&80 76.8 % $ 14,624,793 163.6 1011!2004 82,914,153 112,92?,236 30,413,483 73.4 15,512,487 193.5 _ 10/1/2005 87,160,39$ 123,307,335 36,146,937 70.7 15,005,297 240.4 10/1/2406 93,291,628 134,429,918 40,738,290 69.6 15,343,925 269.0 10/1/2fl47 124,659,049 154,278,044 33,618,945 78.2 16,893,879 199.0 1©!1/2448 139,979,020 169,434,580 49,055,550 71.0 17,564,445 279.3 69 Required Supplemantaty Informa-F.ion Schedules of Employer and State Pension Contributions For the Fiscal Year Ended September 34, 2409 General Ana to ees' Pension Plan ' Fiscal Year Ended i Annual Required Percentage September 30, Contribution Contribution ~ 2004 ~ $ 70],388 140.4 2005 1,441,861 100.0 2006 2,011,383 100.0 2007 ~ 2,008,058 140.0 2008 2,398,379 100.0. 2009 2,502,935 100.0 Pollee and Firefighters' Retirement System Annual iequired Total Arinusl iYscal Year ended Annual State l;mployer Required Percentage $e tember 30, Conia-Ibutian Contribution Contribution Contribution 2404 $ 544,922 $ 2,923,147 $ 3,424,023 100.0 2045 504,922 h,177,846 4,682,768 144.0 2006 544,922 4,7$9,159 5,294,081 140.0 2007 504,922 5,174,531 5,679,453 140.0 2008 544,922 5,508,475 G,1 t3,397 100.0 2409 544,922 5,395,4-42 6,940,354 100.0 Note: I3uring the prior fiscal year, the asset valuation method was changed to Actua rial Value of .Assets (AVA) from a five year smoothed market far the Police and Firefighters' Retirement System Plan. With this change, the development o:f the 1Vlarlfet'Value of Assets (MVA) also changed resulting in the receivable for the City contribution for the tisca] year fallowing the valuation date, to na longer he included in the 1V1VA_ 70 Combining and Individual Fund - Statements and Schedules Non-Major governmental Funds Special Revenue Ruuds Special Revenue Funds are used to account for the proceeds of specific reveaue sources (other than major capital projects}requiring separate accounting because of legal or regulatory provisions or administrative action. .Lave Enforcement Trust Furid -This fund accounts for revenue received front confiscated and forfeited prapcrties from cases involving the City's police department. Lxpenditums from this fiord are generally for police education and training programs and equipment. Developers Land Contribution Fund -- This fund accounts far revenue received front developers operating within the City for projects other than those financed by proprietary funds. The City uses the developer contnbutions to purchase land or capital improvements for recreation facilities. Community Development Fund -This fund accounts for revenue received from federal, state and local governments under numerous great programs which are used fax various community development and improvement projects within the Gity. SHIP Fund - This fund accounts far revenue received fronn the Florida Housing finance Agency for the State Housing Initiatives Partnership (SHIP} Program to provide for renovation of buildings to be used for affordable multi-family housing within the City. beautification Fund -This fund accounts for revenue received $orq. public service taxes, which is used for capital improvements to beautify the City. Special .T'rojecis Fund -This fund is used to account for assets held in trust by the City for a variety of earmarked purposes. Cerrzetery Perpetual Care Fund -'T'his fund is used to account for assets held by the City to provide maintenance far the cemetery grounds. City ©rdinauce allows far the use of principal in achieving this purpose. Debt Service Ind Utilities ?"ax Fund -This fund is used to account for assets held far the repayment of principal and interest an debt reported in the government-wide financial statements. Capital Projects Fund Gapital Projects Funds are used to account for financial resources for the acquisifioa or construction of major capital facilities (other than those financed by proprietary funds arnd similar trust funds). The capital projects funds used by the City are as follows: .~©O~l GO Band Fund -This fund is used to account for the construction of major capital facilities financed by the City's 200 general obligation bond issue and subsequent financing. Beach Restoration Furid -'this fund is used to account for improvements to the municipal beach area of the City. 71 C > ' fy ... .r ~ ~ ^' W Va Vl cD O~ ~D N Vi ~ Of n ffl b Ot fD ~. M b' b IIf M U [+ M O~ ~ 00 e0 s} ~D ' ~ w Q~ .-+ M V'~ b w ~ r+ t _ O~ CO Hl N ~ O ti' r~ ~i ~n .., M 0 ~ ~ w oa o 'n o0 o In M ' o ~ L' ~ as N .-a 1`~ a m C h N rn h w rn zl ~ v3 ~ r.9 jv ~ ~ ' ~ tl 0 ~ M f I b , . . !`~ 1~ ~ r~ h V f M 1 1 r b .~~ ~ ~ o ~ h b ~' In ~ ° ° d ~ ~ n l '~ i w c4 of ~ ,A ~ '~ M .o rn ip rn a. m '~ 1 1 h ~ z°j ~ p°q m oo m oy o0 N a of O~ ~ of O~ iR [r9 k9 6Fi ~o n m M •'l .~ ' gy qk ~ ~ 1 k I M a r~ r 1~ e s ' m V k ~4 N of of bf a: A ~ ~[~ rv ~ 1°n ~ ~° vi ss eh rv ; ~" ~ . .~-a . e pNp a r ~ . r a . a vOO. rn a L ~ ~ N ~ ~ 'V b ~9 .. uw w a, m v~ m m +n w +n o 1n M $ O ' ~ ~ ~ ~ ~ ~ N r ~ 1 a ~ m m ~ y~ y ~ n oo w ao 00 W ~ ~ w A. ~ Ps ~ .. ~ ~ ~ ~, V, ~, ~ ~,.j' ~ ~~1 p O ' ~ ~ N N 1 ~ a ~ 1 1 1 t4 (,T~ ~ {~ c ~ Y~ 771~~~,~ 1 r 1 p 1 1 a ~ W VI ah M Ky o+ o. a n n O ~ ~ o~'o 1!a Yt IYa LT2 M F La _ .. 1~ . .A 1^ `Q ly 6~i ~ 64 69 ~ 0 ~ 7` ~ W a W ~' > W r f I r H N N hG ~ ~ ~ °n° n v ~~ ~ ~ '-` r, O p U ~ z ~, ~ ~ ~, ~ ~~ii H H ~ ~ fD Q n kO cif fD Y' O~ [~1 ' ' M M ib \p l~ CS ~' p~ Of O~ O P1 W Oc Oi N ' a O pi d ~ 00 •O Y} Q b 1 a . 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OO OF l N M ./i ttl (V ~`F (~ 6~ O. ~ N OO o r}Y~~ ~ N M N ~-+ .+ n ~ c`C N ~O y v da G9 ~ N N O O 00 O O 00 ~-I M ~ ~ ~ • r n • ~ ~ °m • ~ • m .vri ~ o ' O ~ N m 'L tV6 ~ oNa W ~0 ~ ~ W ~ O .~ r w ~ ~ v v RS +~ cs '~ v v .n a, ~} o o m rn ~° v v ~ ~ ~ a °a ~ r a ~ ~ ~ ~ rn ~ a ~~ e p ~ . L] Q PA v r°.t ~ b, u vqi ~ N ~ O O. 6'9 KR 0 0 M i'Y ~ 0 0 0 y~ r m ~O +D \p rri M .mss q W V C~1 .D icy y a ~ ' ~ ~ • ~ f .fit ~ rn M v. 30 of M U m ~ ~~ , ~~ rn wva ~ ~~'~ ~ mo Ca ~ ~ oo ~ ri v w oo ~n oo .n ..1 sv v //W _ YI ~~p ~ , ' ' ' ' M 00 , , 00 V' N 0i ~ ~ 7' R w ~ ~ ~ N N U ~ ~ ~ .. n trN. "' "' oi'o oro o a ~' +D U W ~ cg rr~ r v o v. w en o. o o m m c C? ~ N .n o .n a0 ~~ O «. W O O O U h (r. O N 'Q r O ~~ il5 P +~ ~ O ~ [ _ to Do c~ M O N ~D ~ N O M r~ 6~ [~ -~ m o ~v.oov~r cvnieoNin; ~ N ea,nn o ~w a" aak -"~'~~'o ~ N .r,rn m n wt awn ~ ~~ b ~ ~ ~ .-.~ W ~ e+ ~ ... .., w c vri ~ ~ N ~ ~ b b h Off, ~ ~~~~ ~ . ~ ~ i i . 00 oD ~ ~ V' ~ M 1' 4. ~ Qi E Oi P± W i '} b cl ~"' ~ V ^ N ~ NV O 4 7 O~ `p~,,i ~ ~ O~ 6~ ~y 09 Vl v;, ~ ~ ~o w ~ ~o u ~~1 ~ ~ N N Q ~ O ~ w t¢ ~ '~'1 h bT ~Ix ' .7. ~ •~ dq - is ~ O ~ y [~ O ~" w y~, p en .o P~ ~ m n .n v~ oo ~ ~n sz ~ ~ ~ ~ by M ~O . . ~ ~ . ~ ~ ~ ~ ~ ~ h ~ W ~ '~ ~, ~O ^~ 'S ~ O M t+~ m O rl' r W .r ~ ~ ~ N .f R-. ~ ~ Vl r 9v Lq GO ~ ~ nF V ~ 49 FI3 y d ~ ~~ o q v o a v ~n ' oo m ~ ~ m v ~ ~ a ~ w ~ d C~ ~ . ~~ . . i i~ ~ m v N N v M M > y~~ u Ga V vi sg O ¢R Q o m ~ n v yy:: v o ~ a'3 a . . ~ N +n . q ~ . ~ . ~ p ~ . ~ ~ ~ ~ 0 0 0 o q o ~ r y~ GT Q. ~O b M M N N ° ~ &9 bq U] r. Lx1 ~ ~ Vi ~ ~ rn V O " `° ~, O ro eq n N m z °an ~o i6 ~ a ~ ° ° ~ a ~ ~ " .C ~" o '~ ~ v ~ wr' o en m ~ ~7 ~ .r~J ~ f+ ~ ~ ~ ~ a t3, ~ ~ w..~ y ~c~55t W o ~ m E" ,~ p p fT$i]1i.~~ [sj~ CJq ~W ~P~. F+H ~ ~'C iii rrWss w O ~ w u~.~ n Non-Major ~nterpr~.se Funds Enterprise funds are used to account for operations that provide a service to citizens, financed primarily by a user charge, and where the periodic measurement of net income is deemed appropriate for capital maintenance, public policy, management control, accountability ox other purposes. Delray Beach Municipal Golf Course Fund --This fund is used to account fox the services and activities of the City's municipal golf course. Lakeview Go~Coxnse Fund -This fiord is used to account for tlae services and activities of the City's exeeufive municipal golf course. City Marina Fund -This fund is used to account for the services and activities of the C"sty`s municipal marina_ ,Sanitation Fund -This fund is used to account fox solid waste removal services far the City's residents and commercial custamers. Stonmvater Utility ~'urtd -This fund is used to account fox the levy of drainage assessments and construction of drainage projects. 74 CITY OF I?ELRAY BEACH, FLOItIE]A C(?MBINlNG STATE3v[]?.NT OF NET ASSETS NON-MA10R ENTERPRISE FUNDS September 3fl, 2009 = To#al - - Municipal Lakeview Non-l-7ajar Golf Galf ~ City Starmwater LRnterprise Coarse Course Marina Sanifation Utility Funds ASSETS Current Assets. Cash and crash equivalents $ 14,940 $ 10,334 $ - S - S - $ 25,274 ~ Accounts receivable, net 260 - 532,355 632,615 Due from other governments = 33,307 = 33,307 Doe lEOm other fiords - - 723,210 1,597,445 2,787,896 5,108,551 E ]nven#ory 97,621 16,691 - - - 114,312 Prepaid expenses 55,365 17,2$6 571 - 892 74,114 Restrleted assets Cash and cash egcivafeuts 348,117 188,449 - - 57,497 594,063 Total Current Assets 516,303 232,750 757,088 2,229,800 2,846,285 6,582,236 Noncurrent Assets: Property, karsd and equipment Land 1,415,483 1,963,894 ~ ' 42,840 - 1,271,853 4,694,070 Buildings 2,324,664 190,718 - - 1,904,722 470,104 Improvements othertbanbuildings ~ 1,271,620 899,663 1,137,419 11,958 11,584,886 14,905,546 Equipment 1,700,0$1 387,793 fi9,652 . 26,245 811,937 2,945,708 Construction in progress - - 13,5410 - 310,941 324,441 Accumulated depreciation (2,688,356) (691,410) (906,433} (33,072) (4,597,340) (8,916,611) Other asset i=landissnecasls,net 36,515 22,362 - - - 58,877 TatallVoncurrentAssets 4,Ob0,007 2,723,020 356,978 5,131 ]t 286,999 18,432,E3S Total Assets 4,576,310 2,955,780 1 114 066 2 234 931 7 4133,284 25 014 371 T •iAR1Z1TTES Current Liabtli#les: Accounts payable and accrued expenses 76,582 ] 0,953 - 610,229 21,92fi 919,790 Unramedrevenue - - 11,183 - - 11,183 Current maturities of installment agreements 31,562 7,853 - - - 39,435 Due to other funds 726,111 553,509 - - - 1,279,620 Reftmdable deposits 97,861 - 11 550 7 5,000 - 124;111 932,236 57215 22,733 625,229 21,926 2,374,439 Current Liabilitles Payable from Restricted Assets: Accrued interest on long-term debt 30,717 15,849 - - 23,906 70,472 4~rrent maturities ofrevenue bonds 317,400 172,500 - - 33,591 573,591 ' 348,117 1$8149 - 57,497 594,063 Tahal Cnrreat Liabilities 1,280,353 760,754 22,733 625,229 79,423 2,968,502 Nanenrrent I,iabllitles: Net oNser postamployment benefits obligatiou - - - 4,648 6,972 11,520 Long-term portion of compensated absences payable - - - 22,843 24,948 47,791 Ravenna bonds payable, net 2,028,200 984,697 - - 1,3$2,868 4,395,755 lnstallenent agreements 97,246 - - - - 97,246 _~ Total Noncurrent liabilities 2,125,44b 9$4,697 - 27,491 1,414,788 4,882 422 ' Total Liabilities 3,405,799 1,745,461 22,733 $52720 _ _ _ 1,494,211. _ .7,520,924 Ni17' ASSETS Invested'inoapitalassets,netoPrelateddebt 1,549,064 1,535,508 356,978 5,131 9,87Q,540 13,317,221 Unrestricted (3?8,553) (325,189 ~ 734,355 1,377,080 2,768,533 4,17G~226 Tatal2letAssets S 1,170,511 $ 1,210,319 $ 1,091,333 $ 1,382,211 $ 12,639,073 $ 77,493,447 75 'CITY OF bZT.RA~ B;uA,CH, ~L(3RIDA COM131t41NG STATEM7iNT OF REVEN UBS, EXPENSES AND CIIANCsES IN NET ASSETS NON-MAJOR EN7'ERPRIS1s FUNDS For the Fiscal Year Ended September 34, 2409 Total Municipal Lakeview lVau-Major ' Golf Golf City Stormweter l;nterprlse Course Course Marina Sanitatiau 11ti1ity funds OP)ltA.7PlNG 321~'9)EN~[TIES Charges for services $ 3,303,Si1 $ 749,367 $ 244,467 $ 4,942,922 $ 2,095,636 $ 11,295,903 Other operating revenue 14,833 5,985 35,653 5,094 17,366 76,927 TotalOparatingRevenues 3,318,344 755,352 240,124 4,948,012 2,113 002 31,374,830 OPL+7tAT7N G I;RPENSES Personal services - - - 229,341 375,106 504,447 .other operating expenses 2,770,936 597,412 SD,389 4,212,052 553,998 8,194,787 i]epreciation 178,406 _ 104,011 74,846_ _ 2,308 436,624 792,€95 ~'otalOperatingL~xpenses 2,949,342 741,423 137 235 4,443,701 1,365,728 9,591,429 Operating Income 369,042 53,929 106,885 51}4,311 747,274 1,783,441 NONbPI:IiAT'IlVG REVENf1ES (E7~PZ;NSFS) Tnterestrevenae - - 837 1,028 5,438 6,897 Rent revenue 22,247 - - 724,940 - ]47,147 Interest expense (95,892) (42,766} - - (72,794) (217,454) ['lain (lass) on disposal ofequipmant 93,193 (178} - - 4,594 97,668 Other nonoperating expenses (274) (238) - - - 512) 'F'ofalNonoperatingltevenucs(F~pensc~) 19,234 (43,121) 631 :125,968 _~63,166~ 39,746 Income Before Capital Cnptrjbutions and Transfers 388,236 10,808 109,716 634,279 684,148 1,823,147 Capital Contributions - - - - 53,820 53,$20 Transfers out (33,000) (19,400) (48,600) (160,930) (380,546) (662,036) ChangelnNetAssets 355,236 (8,192) 51,116 449,349 357,422 1,214,931 Net Assets-October ], 2408 815,275 1,276,511 1,030,217 932,862 12,283,651 16,276,516 Net Assets-5eptember3D,2009~ $ 1,170,511 $ 1,2]0,319 $ 1,091,333 $ 782,211 $ 12,fi39,073 $ 17,493,447 76 aF D7;1.xAX B~ACx, ~.a1zmA GOMBTt4ING STATEM1iNT OF CASH FLOWS NON-7r[A70R }?NTEIiP12ISE FUNDS For the Fiscal Year Ended September 30, 2009 CAS#I PLOWS FROM OI'EIIAT'ING AC'!'IVl'I'YLS Receipts from cus#vmers and users Receipts from others Payments to suppliers Payments to employees Net cask provided byapecatisg activities j CASH FLOWS RROM NONCAP7TAL 81NA1VC[iVG ACTIVITY Transfers to other fiords Net cash used in nonrapital financing activity CASH BLOW S FROM CAPITAL AND RELATED FINANCING ACTfVCT1E5 Acquisilinu and caers€ruction of capital assets Proceeds from the sale of caphal assets Capital cpatribntipn5 instal lmeni agreement issued Principal paid on capital debt ' 7uterestpaid on capital debt Nel cash used in capital and aelaled fmancinl; activites CASH RLOW6 FROM X1VW);S'I'WG ACTIVITY Interestrecen~ed 7Qet cash provided by itevesting activity let change in vas13 aad Dash equivalcats Cash and cash equivalcuts - Octaher 1, 2fl08 Cash and cash equivalents -September 3D, 2009 RecanrIIiattvn of operating inoome to net cash provided by operating actirifies: Operating income Adjustments tv reconcile operating ineame to net cash provided try opernting activities; DepreelatlOn 67[pC:0.xe Miscellaneous revenue (expense) Ghauge 3n assets and liabr7ities: Accounts receivable Due from other gpvernlttenEs Due (roue other funds InVentpty Prepaid expenses Accounts payable and accneed expenses 1Jneaenedrevenue Ccrmpansated absences payable ptherpostemployimeuthenefita obligation Due to other fiords Refundable depos'sts Total adjustments Net cash provided by operating activities Nau~cash capital and related financing acHviries Amarlizatiau of baud premiums Amortization of debt issue costs Amortization of deferred loss on xefund':ngs Capital cvntribalions Tofal Mmdcipal Lakeview Non-Nlajor Golf Golf City Stormwater }:ntcrprise Course Gvarse Marina Sanitafiva DtiFlty Fnnds $ 3,343,931 $ 755,360 $ 796,006 $ 4,771,218 $ ],706,352 $ 10,772,867 21,933 - - 724,940 - ]46,873 (2,66I,229) (487,395) (103,827) (4,495,394) (447,341) (6,395,78b) - - - 279,791 (368,068) 587,859} 504,635 267,965 92.,179 ]80,973 890 943 1y36,695 (33,000) (19,000 (48,6D0 (]80,430) 80,506 562,03fi (33,000) __ (]9,000} (48,640) (780,930) ___ {380,506)_ (662,036} (411,765) (2,]43) {44,410) (1,471) {455,873) {915,212) 275,251 ~ - - 4,790 280,041 - - - - 41,945 41,945 131,420 - - - - 73L,420 (432,578) {249,005} - - {30,622) {712,205) _ (6D,224) (27,069) - (73,330) {160,623) (497,896) ,,,{27$,217) (44,410) (E,077) (573,040) „, ,,,,,,(1,,334,634) - 831 1,428 5,038 6,897 - 831 7,028 5,038 6 897 (26,261) {29,252) - - ?,435 (53,078) 389,3]8 228,035 55,052 6 415 $ 363,057 $ 798,783 $ $ $ 57,497 $ 519,337 $ 369,002 $ 53,929 $ k08,885 $ 504,311 S 747,274 $ 1,783,40E ]76,446 104,011 ?0,646 2,308 436,5?4 792,195 21,933 (238) - 124,940 - 146,635 706 8 - (176,794) - {176,fl80) - - (33,307) - - (33,307) - - (42,795) (601,170) (406,650} {1,D5p,615) (2,920) (I3,764) - - - (]6,660) 16,184 4,309 (571} - 96,BSD 11b,772 5,208 7,317 (72) 317,828 9,847 340,088 - - (6,449) - - (6,444) - - - 4,902 66 4,968 - - - 4,648 6,972 11,620 (14$,765) 112,389 - - - 3,624 24,881 - [4,398} - 20,463 135,633 274,436 (16,706} (323,338) 143,669 153,294 $ 504,535 $ 267,965 $ 92,179 $ 180,973 $ 890,943 $ 1,936,695 $ 06,049} $ {3,735) $ $ - $ - $ (3,834) $ 5,410 $ 3,372 $ $ $ $ 8,7?2 $ 24,849 $ 9,4DD $ - $ - $ - $ 33,849 ~ - $ - $ $ - $ 11,875 $ 1 L,875 77 In~err~a Serv~ee Funds Internal Service Funds are used to account far the financing of goods or services provided by one department or agency to atYier deparhnents or agencies of the City, or to other governmental amts, on a cost reimbursement basis. Itasuranee Fund --~ 'T'his fund is used to account for the payment of insurance claims against the City far certain self insured coverages and for the payment of heal#h insurance premiums. In addition, expenses related to reinsurance and olaims administratian era paid from #his fund. Central Garage Fund -'This fund is used #o account far the central garage operation of the City. 78 GITX OF DELRAY BEAGII, FLORIDA COIVFBAQING STATEMENT OF NET A55ET5 IRTE1tNAL SERVICE FiJ"NDS September 30, 2009 ASSETS Current Assets: - Gash and cash equivalents . Iuvesttn~ats . ~ Accozsnts receivable, net ~ . Due from other funds - ~ ~ ~ . - IIlVentOCy Prepaid expenses - Total Cnttent Assets Noncurrent Assets: Property, land and equipment Buildings Equipment Accimmu7a#ed depreciation Total Noncurrent Assets TWa7 Assets T1TA73TLITIES Current Liabilities: Accounts payable and accrued expenses Compensated abs~ces payable Insurance claims payable 't'otal Current Lia7ilities Noncurrent Liabr7ifies: Net other posiemployment heaefits obligation - Long-term portion of ecanpensated absences payable - Long-tarrn portion of insuinnrc claims payable Total Nancu~ren# Liabilities Total Liabilities l~1LT ASSETS Invested in oapital assets - TJurestricted 'T'otal Ner Assets Total -.. Central Internal . Insurance Garage Service kY~xtds $ 15],328 $ 100 $ 151,428 1,533,50D - 1,533,500 45,23D - 45,230 7,057,761 1,250,2811 8,348,041 - 47,069 47,Ob9 520,693 - -- --- - 520,693 9, 308,512 1,297,449 10,605,961 - 909 909 19,596 17,695,43 5 I 7,715,031 (16,320) (10,458,555).. (10,D74,875) 3,275 7,637,789 7,641,065 9 3I 1 788 8 935 238 18,247,026 9iA,361 98,945 1,012,806 1,737 3,438 5,775 1,736,416 - 1,736,416 2,652,514 101,883 2,754,397 4,648 13,945 18,593 34,790 47,800 82,590 2,978,447 - 2,978,447 3,OI7,885 61,745 3,079,630 5,670,399 163,628 5,834,027 3,276 7,637,784 7,641,O6S 3,63 8,113 1,13 3, 821 4,771,934 $ 3,647,389 $ 8,771,610 $ 12,412,999 79 CITY ©k' S])aLkAY BEACH, FLQRII~A Cd7viSINIAIf s STATI;MF31V'1' OF 1t1;VFTi ITES, F7~I'ENSES ,AND CHANGES TN N1;T ASS1aTS A~ITRAAIAL SI.1tV1GE IzUNIBS Far tl~e k'~scal Xear k?ztded September 30, 2009 DI'E13ATING REVENilE3 Charges far services Other operating revenue Total Operating lteveanes DPERATIl\G EXPENSES Persona] services d#ber operating expenses Depreciation Total Operating Expenses Operating lneame NONDI'ERATING REVENUES Interest revenue lnstrrance recoveries Gain an disposal of equipment `]'alai Nonaperating Revenues Income Before Capital Contn'butions and Transfers Capital contributions Trans€ers in Transfers out Change In Net Assets Net Assets -October 1, Zp08 Ne#,Assets -September 30, 2009 Tutal Central Internal Insurance Garage Service Funds $ ]2,478,324 $ 2,607,843 $ 15,086,167 B79,411 1,744,979 2,624,390 13,357,735 4,352,822 17,710,557 331,781 877,867 1,209,048 1 D,968,624 1,816,617 12,785,241 1,502 1,518,342 7,519,844 11,301,307 4,2]2,826 15,514,133 2,056,426 139,996 2,196,424 31,244- 2,731 33,975 - 8,915 8,915 - - 62,779 62,779 31,244 74,425 105,569 2,087,672 214,421 2,302,093 103,473 103,473 - 356,006 35b,006 (329,704} - (329,704} 1,757,968 673,90D 2,431,868 1,883,421 8,097,710 9,981,131 $ 3,64],389 $ 8,771,fi10 $ I2,4I2,999 80 C~`Y DF DEI.RA.Y BEACfi, FLORIDA COMT311~lINC, STA'EMENT OF GASFT FLOVirS INTERNAL SERVICE FI3NB$ Far the Fiscal Year Ended September 30, 2009 CASH FLAWS FROM OPERATING ACTIYITIFB _~ Receipts cram customers and usors Receipts from others E Paymenls fo suppliers Payments fn employees Net cash provided by {used in) operating activities CASHFI.©WS FRO11I NONCAPITAL IINANCING ACTIYT'I'IFsS Transfers from other funds Transfers to other funds Net cash provided by {used in) noncapitaL fniaacing activites CASIEI FLOWS FROM CAYTTAL Ah'Il RELATE FINANCING ACTI1rITIES Acquisition and constnrction of capital assets Proceeds from the sale of capital assess Net cash used in capital and related financing activities CASK FLOWS FROM TNYESTING ACTIVITIi~S luterestreceived Sa]e of investments Net sash provided by investing activities Net change in cash and cash equivalents Cash and vashequivalents -October 1, 2008 = Cash and cash equivalents - September 30, 2009 Recanciliafion of operating income to net cash provided by (used in) operafing actlvitlesz Operating income Adjustments to reconcile operating income to net cash provided by (used in) operating activities: Depreciation expense Miscellaneous revemte Change in assets and liabilities; Accounts receivable l7ue from other funds Inventory Prepaid expenses Accounts payable and accrued expenses Compensated absences payable Otherpostemploymentbeneyifs obligation Insurance claims payab]e Due to other funds Torn] adjustments Net cash provided by (used in) operating activities NO]\? CASH CAPI'T'AL AND RELATED FINANCING ACTIVITY Equipment contn~buted from gaverznnental capita[ assets Total Central Internal Insurance Garage Strvice Fnnds $ 6,346,047 $ 3,458,28© $ 1I,804,327 - 8,915 8,915 (1I,277,067) {1,824,859) (13,IOI,926} (329,275) (861,516) (1,190,791} (3,z6a,z9s} 780,820 (2,479,475} - 356,006 356,006 329,704) (329,704) {329,704} 356,006 26,302 - {I,747,I37) (1,747,137) - 607,580 607,580 - (1,134,557} (1,139,557] 31,244 2,731 33,975 3,495,473 - 3,495,473 3,526,717 2,731 3,529,448 (63,282) - (63,282) 214,610 100 214,710 $ 151,328 $ 100 $ 151,42$ $ 2,fl56,428 $ 139,996 $ 2,196,424 1,502 I,518,342 1,519,644 - 8,915 6,915 66,716 - 65,716 - (844,542) (894,542) - 26,424 25,424 843,308 1,176 844,484 (50,626) (35,842} (86,468} (2,742) 2,406 (336} 4,648 13,945 18,593 (1,10I,125) _ (1,101,125} (5,078,404) - (5,078,404} (5,316,723) 540,824 (4,675,899} $ (3,260,295) $ 780,820 $ (2,479,475) $ - $ 103,473 $ 103,473 81 Fiduciary Funds Fiduciary Funds are used to account for assets held intrust or as an agent by the City for others and include pension trust fiwds. General Employees' Persian Fund -This fond is used to account for assets held in a trustee capacity far the retirement pensions of all. permanent, full-time City employees except those covered by the Police and Firefighters' Retirement Systexu loud. Police andFirefrghters' .~elirement System F~rnd - This fund is used to aacouttt for assets held in a trustee capacity far the retirement pensions of all nonciviliau gnlice and fire department employees, 82 CITY OIa' DIaI.ItAY BEACH, FLORIDA CO114B1NlNG STATEMENT OF PLAN NET ASSETS PEN3FQI+T TRT.TST FUNDS September 3D, 2DD9 ASSET'S Cash and cash equivalents invastmeuts: Bonds apd oUaer interest bearing investments Equity securities 11$utual Fnnds Alternative investmen[a Due from brake far securities sold Employee cautt~butions receivable Prepaid expenses lnterestaad dividends receivable Total Assets I,IAB~.i'T1E5 Aeoounts payable Due to broker far securities pwcbased State monies held in reserve Deferred retirement option plan payable Total Liabilities NET ASSETS held iu trust for pension benefits Ptrlice and Ge>deral I1ret-xghters' Total Employees' Retirement Pension Trust pension System Fnnds $ 1,DD9,965 $ 3,2DS,478 $ 4,215,443 - 25,825,265 25,825,265 7,479,067 57,590,41D 65,069,477 62,673,137 9,694,285 72,365,422 - 10,565,69D ]D,565,69D - i,330,#i6D 1,330,860 30,068 54,275 84,343 44,031 215,542 259,573 1],905 358,156 370,061 71,246,173 l 08,839,961 180,086,134 34,324 93,379 127,703 - 823,188 823,] 88 - 1,496,124 1,490,124 - 9,742,7 i 8 9,792,718 34,324 12,149,404 12,183,733 $ 71,211,849 $ 96,690,552 $ 167,902,401 83 CITY OF DEI,RAY BEACH, FLQRIbA COMBINING STA'TEMENT' OF CFIANGi?S IN PLAN NET ASS1;T5 PENSIbN TRUST FUNDS For the Fiscal Year Ended September 30, 2009 Police and Ab111T;i(3NS Contributions . Employer State Plan members Total contributions lnvesiment income Net appreciation (depreciation} in fair value of investmealts Interest and dividends Less invessiment expeuses - cus#odian tees Net investment income (loss) ©ther income Total additions 1)EDCJCT7ONS Be~ei-€ts Refunds of contributions Ot1~cz operating expenses Total deductions Change lu Net Assets Net Assets - Qcto6er 1, 200$ Net Assets -September 30, 2009 General Firefighters' Total Rmpiayers' Retirement Pension Trust Pension System 1i+unds S 2,621,586 $ 5,381,809 $ 8,003,395 - I,400,752 1,404,752 606,902 I,] 45,020 1,751,922 3,228,488 7,927,581 11,I56,069 1,016,023 (4,650,812) (3,644,789) 364,598 2,359,413 2,724,511 1,380,G2i {2,300,899) (920,278) 241,025 473,206 714,231 1,139,596 (2,774,105) (1,634,509) 171,1ti0 102,220 273,380 4,539,244 5,255,696 9,794,94{1 3,247,825 7,650,472 10,898,297 13,629 88,511 102,144 13,169 200,682 2I3,85I 3,274,623 7,939,665 11,214,288 1,264,621 (2,683,969} (1,419,348) 69,947,228 99,374,521 169,321,749 $ _ 71,211,849 ~ 96,690,552 $ ]67,902,401 84 Qt~.er Supplementary Information City o£ Delray Beach, F1orlda 8ehedules of Kevenue and Otl3er Finatlcing Sources-- Budget and Actual--~Creneral Fartd kiseal'Ycar Eaded September 3©, 2404 Fiscal Year Coded tember 34, 2046 Variance Pasrftve Variance Poaittve Rids! Budget Actnal (Negative} Ritual Hedger Actual (Negative} Revenue. Takes: Ad vniorem S 54,235,620 S 53,484,347 $ {257,37.3) 5 55,281,OOD S 55,342,837 $ 21,837 i Salcs and nsc _ 1,300,000 1,308,213 8,213 1,452,OOD 7,365,552 ($6,448} 'i Utility 4;458,004 4,880,116 122,118 4,557,250 4,374,797 (182,453} C.orrmnutiartions Services Tax 4,400,DD0 4,378,057 (21,943) 3,404,OD0 3,963,485 63,985 Local business tau 772,OD0 789,705 17,705 767,004 752,238 (14,762) Tatallaxes 68,768,620 65,D40,400 (125,220) 65,957,25D 65,756,9D9 (196,341) Fees and permiss: iius7dingperrtrits 2,674,000 2,443,402 (630,998) 2,867,004 ~ 2,631,683 (33537} Fxanclrise fees 5,587,790 5,333,561 (?54,229} 5,451,274 5,247,442 (3D3,828) 7vIiscellaneous 1,450,800 1,016,699 {33,901) 1.023,904 1,462,6]0,,,,,,, ,,,,,,,,, 38,710 Total fees andpenmts 9,312,590 8,393,462 (919,128) 942,170 8,941,735 (440,435) lntex8avarnmwtaC 17edaral shntrd revenue: E'EMAMuIualAid - - _ 48,050 9fl,445 {5} ~er~ay meant _ _ _ 2D,ss1 z0,s52 1 1{azmatS~taivmwi ]1$,411 87,159 (31,252) ]5,926 2,169 (13,757) EmergencyRcHcfProgra[n ~ - - _ 3,763 3;763 - Highway5afetyPund6rant 30,(100 24,979 (5,027} 58,000 55,312 (2,688) Totalfedernlsharedreverme 146,411 1L2,138 (36,273) 146,290 129,641 {16,449) Sta3e shared revenue: State revenueshariag 1,625,000 1,656,967 31,907 1,830,OOD 1,836,248 6,298 Local govcno[tcnt sates tax 4,074,404 3,972,443 (106,947} 9,62S,DOD 4,453,598 (171,402} Alcoholic heveragc licenses tax 67,4DD 70,691 3,691 67,004 72,653 5,653 Municipal fuel tax refund 50,004 54,003 4,OD3 45,000 43,656 (1,343) Mahilehome I'scenses tax I,DDD 643 (387) 1,000 869 (131) Fire'snccutivc 51,&90 54,960 3,12D 41,640 S1,T18 10,078 Statcgraats 2DI,D9D 108,SZ1 (92,569) 74,060 74,060 - Totalstafeslraredrevenne 6,074,930 5,917,818 (157,[12) 6,663,74D fi,532,854 (150,846) Sltarcd rcveavc from Local units: Clvldrea's Services Council Grznt 59,998 59,977 (21) 314,825 303,121 (I 1,7D4} Cornrty occupational licenses 128A00 124,891 (3,109] 126,000 134,567 6,567 Local gents 19,A41 23,113 3,672 23,860 32,000 8,144 P13Cgrants 30,OOD 60,D00 3D,OOD - 13,120 13,120 Total share6 tevenue firm local units 237,439 267,981 34,542 466,685 482,808 15,123 Total intergovernmental 6,460,780 6,297,937 {462,643} 7,296,675 7,145,SD3 (151,172) CarRinacd on nazi pale. 85 City of Delray Beach, FEorida Schedules of Revennc and Other F"tnancing Sourre.~ Budget and Actual-General Fund (contenued) Ttevannc (contiaucd)_ Charges for services: Fiscal Year Ended September 34, 2809 fiscal Year Lrnded September 34, 2908 ' Varfauce Pasltlva Variance Positive FinalEndget Actual (Ptagative) Ftna173ndget Acttral (Negative) General government S IS7,294 $ 156,654 S {535) $ 184,220 $ 175,636 S (13~8d) Public safety 5,420,260 5,985,279 555,419 5,415,300 5,878,758 463,458 Physical environment 152,0DD 103,004 (46,99]) 732,400 132,099 99 Paskiag 7QO,OQO 850,957 t54,957 449,DQ0 498,246 49,246 ilumsn services 200 250 ~ 54 2Q4 10 (19D) G~lture andrect+eativn 835,450 886,258 SO,8D8 824,050 $54,485 34,435 Totn] cEsarges for services 7,265,206 7,982,407 717,2Q7 7,004,770 7,539,234 529,464 Fines and forfeitams: Cosat 653,140 424,855 {242,245) 568,400 366,544 (3Q1,656} Penalties oa literates and permits b0,000 47,713 (12,287} 63,ODQ 42,753 {20,247} Violations aflocalordittances 113,SD0 105,841 (7,659) 113,DDD 1,92D (111,084) Tata[bnesaadforfisitunas 836,6D0 574,4D9 (262,141) 844,404 411,217 (433,183) ]viiscellaaeous: Interest 3b2,784 234,316 (127,867.) 1,404,5D0 7,312,143 (42,357} Rents aad special assessments 90,424 130,787 4D,367 78,540 111,354 32,829 Sale of capital assets 2,000 3,802 I,StYl 2,74Q 2,590 (110) Contr[btgivasanddonations 2,SI1,OS4 2,445,561 (b5,393) 14,697,715 1,575,317 (9,122,398) Rccavcry ofadmittishativc casts 2,706,876 2,107,448 S38 2,139,[21 2,185,832 6,711 Other 750,295 158,658 8,363 15D,630 136,562 (14,128) Totalnriscellaaeous 5,222,819 S,D84,674 (142,145) 14,513,206 5,323,753 (9,189,453} '1'oW revenue 94,263,649 93,369,289 (894,320} ]04,963,471 9S,12Q,3S1 (9,843,120) Other Pinancingsora'cas: Transfers in. WnrerandSevaerFrmd 1,363,120 1,363,124 - 1,179,36Q 1,179,360 ~ - Mtmicipal Golf Corase Fnnd 52,OQ0 52,000 - 57,OOD 57,000 - Ci[y Marina Fund 98,6D4 d8,b40 - 49,400 49,004 - Ilti€ities Tax Fnad 1,528,450 1,521,810 {5,640) 1,436,454 1,949,224 12,774 lnsurauce Fund - 1,644 7,649 - - - SanitatianFtmd 83,930 83,43D - 84,734 84,134 - StorxtTwatari7tilityl?uad 93,000 93,ODD - 84,000 B4,ODQ - Spcclal Projects Fend 33,233 33,233 - - - - Ceplm]Improvemen3Fund 904,b17 904,617 - 50,040 54,000 - Total other financing sources 4,106,950 4,101,914 (5,031) 2,934,940 2,952,714 12,774 Total rcvemsc and other finaacing souaecs S 98,37D,S89 97,431,248 S (899,35]) $ 147,903,411 98,073,065 S (9,830,346) Reconcilialian tv GAAP basis stnlemcnls: On-behalf payments 1,640,347 1.920,394 Ravenueandot8erfanntingsources-CrAAPhasis £ 99,07155 5 99,993,459 86 t b ~[ 1g=~E 'p C? ~ E . m ~ m ~ ~' a .L:$ a ~ [~ Q /~~1 'd o ~ ~_ ~ o ~ ~ n°S m ~ ~ N U ~ p° ![S {_+ ~ o P p L d e x`~ R tl ~ u ~ }}~~ a "~' ~+r ~ n ~ ~ E i ~ ~~ c. ~ m R L ~ d ~ [ ~ } ~ S e ~ ~ A W ~ rt ~ s. ~ i*i .+~ }°: F d i 7 U~ ,~i k e N [ti ' Al , 0. q ~ ~ 4 C r F {~ ~ ~U~ @I U w i naooNV. atm.-too r .vN m m ~o ~r+~i mNr=cr oe`d,~o:°o°xa~m t ~~~ r°yv o~NVri~ wvMi hm'rl. ~`S. a;~v'i~`~v;Pwvi tp r ~mn N ~ J-rnnrn my etnro O u] •-• [ri N m N lm+ W r T f'1 N v v OG CO N ~ ! 1 I ~- ~ rn ~ 'n v w o rn o 0 o rn n i n b ro h at M Ot m P Q M Vi ~ W .-+ n y: M N o 0 N t0 N [~ O 1~ n ~ t0 tO VI O xr] N O th M 4M1 ~~ 01 M tO n M d d M xn ~ s a. to caM NrRN ~ooo _ °: d'1 ~ °o~ r°i <v ~ r a h .r M r r x r x x x r N ~ .N-. ~ va r ~ ~ 'tl M ~ N N ~ h N M 00 OP O N '~Q aMi w N a a O CS F I+ n o0 v] .Mi ~ N at .-s tf N ~ V) Yx N Ot Q ~ a~ ul N '~ N N a: 1Ap ~ ~ ~ oo n N N H N N ~ 7 t{ b Ot x~ r r ~D i~ r x a x ~ 7 ~ N N N m~ 7 m at i'1 O r/i O° P r/1 m ~ D• N M I M b M y tO 90 h at .--. ~ N ~D ao (n a. t0 O p Vv~~ t~ V N Ot h M oO h m N O ~ tV tlN' N N T t-3 -+ y d? tD 4 M 'tM ~ N P g N N ~-+ r I A N e? 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Schedules of T~ebt S~erviee Requirements City ofr Delray Beach, Florida S~z~nary Schedule of Debt Service Requirements {Principal azid Interest) to Maturity Fiscal Ye$X Ending General Water and Sewer I3ustallment Total September 30 Obligation Bonds Revenue Bonds Revenue Bands Agree~€nents Requirements 2010 $ 3,576,615 $ 3,428,265 $ 5,830,675 $ 124,943 $ 12,950,498 2011 3,576,540 3,427,363 5,821,315 103,626 12,928,844 2012 3,573,840 3,427,990 5,924,853 103,528 13,030,311 2013 3,569,827 6,435,158 5,925,898 94,992 16,025,875 2014 2,168,937 3,341,642 5,925,037 - 11,435,576 2015 2,167,092 3,343,718 5,922,490 - 11,433,300 2015 2,171,935 3,342,026 2,114,922 - 7,62$,883 2017 2,174,200 2,793,154 2,111,452 - 7,478,806 2018 2,179,513 2,793,728 2,109,653 - 7,082,8}4 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 2,121,954 - 6,898,568 2022 2,188,760 2,590,750 2,119,812 - 6,899,322 2423 2,194,413 2,590,000 - - 4,784,413 2024 2,245,589 2,590,500 - - 4,796,089 2025 - 2,592,000 - - 2,592,400 2025 - 2,589,250 - - 2,589,250 2027 - 2,592,250 - - 2,592,250 2028 - 2,590,50(} - - 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 $ 38,297,405 $ 68,844,636 $ 50,146,953 $ 427,189 $ 157,676,183 89 i City of Delray Beacll, Florida Combined Schedule of General Obligation Bond Debt Service Requirements 13a1a[tce Fiscal Year landing Outstanding at September 30 Principal Interest Total Fnd of Fiscal Year 20]0 $ 2,375,004 $ 1,201,615 $ 3,576,615 $ 34,720,790 2011 2,485,D(J0 1,091,540 3,576,54D 31,144,250 2012 2,60D,000 973,840 3,573,840 27,570,414 2013 2,720,000 849,827 3,569,827 24,000,583 2014 7,410,000 758,937 2,168,937 21,831,646 2015 1,465,OOD 702,092 2,167,092 19,664,554 2016 1,530,000 641,935 2,177,935 17,492,619 2017 1,595,OOD 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 3'74,761 2,184,761 8,777,626 2021 1,$9x,000 298,864 2,188,864 6,588,762 2022 1,970,D00 218,760 2,188,760 4,400,002 2023 2,060,000 134,413 2,194,413 2,208,889 2024 2,160,000 45,589 2,205,589 - $ 29,465,OOD $ 8,832,405 $ 38,297,405 94 City ofDelray 1~3each, Florida Schedule of General Obligation Bands (Selries 202} Balance ©utstanding at Fiscal Year Ending _ Principal Interest End of Fiscal Interest Se tember 30 February 1 Februa I Au st 1 Total Year Rate 2010 $ 1,775,000 $ 193,375 $ 147,400 $ 2,113,375 $ G,330,SD0 5.00% 201I 1,865,000 147,000 100,375 2,112,375 4,218,125 5.00 2012 1,9b0,D00 10D,375 SI,375 2,111,750 2,106,375 5.00 2013 2 05S (100 SI 375 - 2,106,375 - 5.001 $ 7,655,000 $ 49D,125 $ 298,750 $ 8,443,875 Original Authorization - $18,000,000 Issued - $15,685,060 Date ofIssue -December 19, 2002 Ivlaturity Range -Serially February 1, 2004 through February 1, 2D13 Principal Payment Date -February 1 of each year Interest Payment Dates - February l and August l Denomination - $5,000 CaIE Features - No optioaai or mandatory redemption Paying AgentlRegislrar -- Wells Fargo Coral Springs, Florida Ratings at Date of Issue - Ivloady's Aaa {F3A insured) Standard & Poor's AAA {F'SA insured) Projects; The bonds were issued for finanniug fhe cost ofpartial[y refunding the General Obligation Bonds (Series I993A & 14938). 9I Ciry of Defray Beach, Florida Schedule of Ger~ezal Obligation Bvnds (Sezies 20Q4) 73a7aace Outstanding at Fascat'YearEnding Prlnci~pal I~sterest EndoPFiscal Interest September 30 __._ February 1 F`el~ruary 1 August 3 Total Year 12ate 2010 $ 600,000 $ 228,520 $ 219,620 $ 1,048,240 $ 14,574,376 3.00% 2411 524,000 219,620 209,545 1,049,165 13,fi25,211 3.25 2012 640,000 7.09,545 197,545 1,047,090 I2,578,727 3.75 2013 565,004 197,545 185,907 1,048,452 11,529,669 3.50 2D14 590,000 185,907 172,970 I,048,877 10,480,792 3.75 2D15 715,000 172,970 159,554 1,D47,534 9,433,258 3.75 2015 745,040 159,554 144,564 1,D49,228 8,384,030 4.00 2017 775,OOD 144,664 130,733 1,049,797 7,334,233 3.75 2018 805,000 130,133 119,837 7,049,970 b,284,263 3.80 2019 835,OD0 114,837 98,555 7,048,392 5,235,871 3.90 2024 870,000 98,555 81,155 7,049,710 4,166,161 4.OD 2021 945,000 81,155 52,602 1,048,757 3,137,404 4.10 2022 940,000 62,602 42,863 1,D45,465 2,091,939 4.20 2023 980,000 42,863 22,038 1,D44,9D1 1,047,038 4.25 2024 1,025,000 22,038 - ___1y047,03$ - 4.30 ~ $ 11,810,D00 $ 2,070,518 ~ 3.,841,998 $--_ __15i722,b16 Original Authorization - $24,00O,OOD Issned - $14,000,000 Date of Issue -September 34, 2004 Maturity Mange --- Serially February 1, 2405 through February 7, 2424 Principal payment Dale -February 1 of each year Interest 7'aymen# -ates _ February 1 and August 1 - Denominalion _ $5,000 ~ " Ca31 Features - IQo optional or mandatary redemption Paying Agent/Regisirar - Welis Fargo Coral Springs, Florida Ratings at 33ate of Issue - Ivlaady's Aaa (FSA insured} Standard & 1'oar's AAA (FSA insured} Projects: The bonds were issued far the purpose of acquiring land and constructing aaad developing parks and recreation facilities in the City. 92 City of Delray Beach, Florida Schedule of General Obligtttion Ba>Ixds (Series 24Q5) Balance Ontstanding at Fiscal Year Endsng Principal Interest End of Fiscal Ynterest September 30 February 1 February 1 August 1 Tg#al Year Rate 2010 $ - $ 207,500 $ 207,500 $ 415,0(10 $ 13,715,914 4.75% 2011 - 207,500 207,500 475,000 13,300,914 4,75 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 T20,OD0 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 201b 785,000 1T6,998 160,709 1,I22,707 9,108,589 4.15 2017 820,000 160,709 143,694 1,124,403 7,984,186 4,15 2gi8 860,000 143,694 125,849 1,129,543 6,854,643 4.35 2019 895,000 125,849 70T,2T8 1,128,127 5,72b,516 4.15 2020 940,OD0 307,278 87,773 1,135,051 4,591,465 4.15 2021 985,004 87,773 67,334 1,140,1OT 3,451,358 4.15 2022 1,030,OD0 67,334 45,961 1,143,295 2,308,063 4.15 2023 1,080,000 45,961 23,551 1,149,512 1,I58,551 4.15 2024 1,135,000 23,551 - ~~ 1,158,551 - 4.15 $ 7D,ODD,ODO $ 2,169,2DT $ 1,961,707 $ 14,130,914 Original Authorization - $24,000,000 Issued - $10,000,000 7?ate of Issue -August 26, 2005 Maturity I2artge - 5eria1ly laebtvary 1, 2014 through February 1, 2024 Principal Payment Irate -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 $ank, NA Ratings - NCA Projects: The bonds were issued fvr the pUrpgse of acquiring land and constructing and developing parks and recreatign facilities in the City. 93 City of Delray Beach, Florida Caiazbined Schedule of Revenue Sond Debt Service Requirements (Principal and Interest) I?iscaI'Year Ending Septcmbcr 30 2D1 D 2011 2D12 2013 2014 2015 2071 2017 . 2018 2019 2020 2021 2022 2023 2024 2025 2026 2027 2028 2029 2030 2031 2032 Balance Qutstanding at Priueipai Tuterest Total 7;nd afFiscal'Year $ 1,505,000 $ 1,923,265 $ 3,428,265 $ 65,764,197 1,565,000 1,862,363 3,427,363 62,336,834 1,630,Op0 1,797,990 3,427,940 5$,908,844 4,705,OOp 1,730,158 6,435,158 52,473,686 ],710,000 1,631,602 3,341,602 49,132,084 1,785,000 1,558,718 3,343,738 45,788,316 1,860,000 1,482,426 3,342,026 42,446,340 1,390,000 1,403,154 2,793,154 39,653,186 1,450,000 1,343,728 2,793,728 36,859,458 1;520,000 3,281,632 ~ 2,$01,632 34,057,826 1,375,000 1,216,500 2,59I,S00 31,416,326 1,440,000 1,147,750 2,587,750 28,878,576 1,515,00(1 1,075,750 2,590,750 26,287,826 1,590,000 1,0OO,ODO 2,590,000 23,697,826 1,670,000 920,SDD 2,59D,500 21,107,326 1,7SS,D00 837,000 2,592,000 18,515,326 I,840,000 749,250 2,589,250 15,926,076 1,935,000 657,250 2,592,250 13,333,826 2,039,000 560,5D0 2,590,50D 30,743,326 2,130,000 459,000 2,589,000 8,154,326 2,23S,D00 352,500 2,587,500 5,566,826 2,350,400 240,750 2,590,750 2,976,076 2,465,000 123,250 2,588,250 387,826 $ 43,45D,OD0 $ 25,354,fi36 $ 18,804,636 94 City of Delray $eack, Florida Schedule of Revefrue Bonds (Series 2000) Balance Serial Bond Uutstanding at Fiscal Year T~.nding ~ Principal Interest , ,,,_ End of F~sca1 Interest Se tember 30 June 1 Aecero6er X June 1 Total Year hate 2010 $ 435,000 $ 137,993 $ 137,943 $ 77D,88b $ 6,730,743 5.245% 2(111 455,000 12b,536 12b,536 718,072 5,412,671 5.245 2012 495,D00 114,341 114,341 723,682 4,688,989 5.245 -. 2013 520,000 301,360 101,359 722,719 3,966,270 5.245 2D14 545,000 87,723 87,723 720,446 3,245,824 5.245 2015 5$0,000 73,430 73,430 726,860 2,51$,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 $ S,26D,000 $ 79Q,815 $ 790,814 $ 6,841,629 Origina] Au#hoxizafian -- $10,000,000 lssoed - $10,OD0,000 Date of Issue - liehruary 25, 2000 Ma#urity Range -Serial Bonds: 3une 1, 1999 through 3une 1, 2019 Principal Payment Date - 3une 1 of each year Interest Payment Dates - Tune 1 and December 1 of each year Pledged Revenue _ 3QOn-ad valorem. fax revenues Denomination -- N!A Call l{eatures -Penalty for early payment Paying Agent - Bank of America Ratings - ICI/A Projects; The bends were issued to linauce all or a portion aftbe Hosts of certain roadway improvements including water, sewer and drainage work, and a portion of #l~e costs of a tri party radio system, fipproxiinately 74% of the bands are governmental activities deb# and 26% is business-tylre activities debt. 95 Ci#y afDelxayBeacl-, ~lozida Schedule of Utility Tax Revenue Bonds (Series 202} 1R'iccal Yesr Ending September 3Q Serial Bond Principal Interest June 1 ;December 1 Jnne 1 Total Balance Outstanding at End of FSscal Rear Interest Rate 2014 $ 450,000 S 61,980 $ 61,984 $ 573,9b0 $ 3,170,036 3.40°l° 2011 470,000 54,33D 54,330 578,660 2,591,375 3.60 2012 485,000 45,874 45,870 576,740 2,014,b36 3.70 2013 570,000 36,898 35,598 583,796 1,430,840 3.85 2014 420,000 27,080 27,080 474,160 95G,680 4.00 2015 440,000 18,684 18,684 477,360 479,320 4.10 2416 460,000 9,664 9,650 _ 479,320 - 4.20 $ 3,235,040 $ 254,498 $ 254,498 $ 3,743,996 DriginalAntl~orizatiou - $16,500,Ofl0 Issued - $15,020,Ofl0 Serial Bonds bate of issue - becember 7 9, 2002 Maturity Range -Serial Bonds: Tune 1, 2003 through Jura 1, 2016 Principal Payment bate - 3une 1 o£each year ~ - lntarest Payment Dates - 3une 1 and December 1 of each year far both serial and term bonds Pledged Revenue -Utilities service fax revenues Denomination - $5,000 Call Features - Serial 13onds:.Tune 1, 20D3 through May 3 ], 2D 14 -1Qo redemptiozt - ' Tune 1, 2014 through May 31, 2016 at 100% - Paying AgentlRegistrar - We11s Farga, Coral Springs, Florida Ra{logs at Date ofissue - ]Vfoody's Aaa (FSA insured} - Standard & Poor's AAA {FSAinsured) - - Projects: The bonds were issued to refund the City's outstanding Utility ~`ax Revenue Bonds, Series 1992, Series 1994, Series 1995, Series 7996, and Series 1998. A.pproxirnately 19% of the original bonds issued were governmental activities debt and approximately 81% of the bonds wetrebusiness-type activities debt. 96 City of Delray Bead, Florida Schedule of Revenue Refunding and ~lprovetnent Bonds (Series 2U03) Balance Serial Bond pntstandfng at I~iscaE Year Ending I'rinciipal ~ Interest End of Fiscal Interest Se tcmber 30 .Tune 1 December l ~, .Tune i Total Year hate 2010 $ 590,000 $ ] 33,919 $ 133,919 $ $57,838 $ 8,054,37b 3.66% 2011 605,000 123,125 123,725 851,250 7,203,]26 3,66 2€112 630,000 112,057 112,057 854,114 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 75,199 75,199 847,398 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 88R,000 32,931 32,931 945,$62 953,662 3.66 2019 920,000 16,831 16,831 953,662 - 3.G6 $ 7,3211,000 $ 796,107 $ 796,107 $ 8,912,214 Original Authprization - $9,685,000 Issued - $9,685,400 Serial Bonds ~ ~ ~. Date p1 Issue - December 2, 2003 ~ . Nfaturity hangs -Serial Bonds: June 1, 2003 tl~mugh Tune 1, 2019 1'xincipal Payment Dale -dune 1 of each year Interest Payment Dates -- Tune 1 and December l of each year for both serial and Perm bonds ~ ~ ~_ Pledged Revenue - Non-ad valorem tax revenues - Denomination - N1A ~ ~ - Call Features - P®alty for early payment Paying Ageof - SunTrust Bank Ratings -NIA Projects: The bonds were issued to current refund Series 1499 and Series 2002 Tax lrxetnptBonds, in whole, and aeries 2042 Taxable Bonds in part. Approximately 45°1° of the bonds are governmental activities debt and approximately S% of the bonds are business-type activities debt. 97 City of Delray Beach, Florida Schedule of Utility Tax Revenue Bands (Series 2007) Balance Serial Band Outstanding gt ~scalYear>zndiag Priuct al Interest Z;nd alkYscal Interest June 1 Total Ycar Rate September 30 Jane 1 December„1, . ,_.. 201D $ 30,D4D $ 614,350 $ 614,350 $ 1,258,70D $ 44,94D,500 4.40% 2011 25,000 613,750 613,754 1,252,5D0 43,688,000 4.00 2012 20,000 613,25D 613,254 1,246,540 42,441,500 4.D0 2013 20,000 612,850 612,85^ 1,245,700 41,195,800 4.00 2014 7D,OD0 612,450 612,454 1,294,900 39,40D,900 4.OD 2015 7D,OD0 611,050 611,050 1,292,100 38,508,800 4.OD 2D16 70,D40 609,650 609,650 1,289,300 37,319,500 4.OD 2017 - 6D8,2S4 608,2SD 1,216,540 36,103,000 O.OD 2018 - 608,250 648,250 1,216,500 34,8$6,500 D.OD 2019 - 6D8,25D 6D8,250 1,216,500 33,67D,DOD 4.DD 2020 1,375,000 608,250 6D8,254 2,591,500 31,078,500 5.00 2021 1,440,4D4 573,875 573,875 2,587,75D 28,490,750 S.DD 2D22 1,515,000 537,875 537,875 2,59fl,7S0 25,900,004 S.OD 2423 1,590,ODD 500,000 504,000 2,S9D,004 23,310,OOD 5.00 2424 1,670,44iT 46D,25D 46D,250 2,540,500 2D,719,SD0 5.00 2425 i,75S,D04 418,54D 41$,500 2,592,D00 18,127,544 S.DO 2026 1,844,D00 374,625 374,625 2,589,250 15,538,254 5_DD 2027 1,935,fl00 328,625 328,625 2,592,250 12,946,000 5.00 2028 2,030,000 280,254 280,250 2,590,500 10,355,500 5.4D 2029 2,130,000 229,504 229,504 2,589,DDD 7,766,500 5.t10 2030 2,235,D00 176,254 176,254 2,5$7,500 5,179,000 5.00 2D31 2,350,OOD 120,375 120,375 2,590,750 2,588,250 S.OD 2032 2,465,D00 51,625 61,625 2,588,250 - 5.f1D $ 24,635,D00 $ 10,782,144 $ 14,782,10D $ 46,199,200 Origina] Authorization - $27,OOD,D40 lssued - $24,b3S,DDD Serial Bonds Date of Issne -September 26, 2047 Maturity Range -Serial Bonds: June 1, 201 D through June 1, 2027; Term Bond: June 1, 2032 Principal payment Date -Tune 1 of eacE2 year Interest PaymentDates -June 1 and December 1 of each year for bath serial and term bonds Pledged Revenue ~- Utilities service tax revenues Denaminataan - BIIA Call Features -Penalty for ear]y payment Paying Agent -Commerce Bank Ratings at Date of lssue -- 5&P: AAA, Maody's Aaa Underlying Ratings - S8cP: A, Moody's A2 Projects: The bands were issued to Onanee various parks and recreation projects, litre Station #4, Environmental Services l3vilding {in part), and tb refund the City's 2005 Line of Credit {which was used to fund the Old School Square Parking Garage Project). Approximately 96°1o of the bonds are governmental aetivifies debt and approximately 4% of the bonds are hnsiness-type activities debt 9B City of Delray Beaeh, Florida Schedule of Revenue Bonds (Series 2448) {T'axable) Balance . Outstanding at Tryscal Yeah )G3aditag Principal Interest . lid of )fiscal 3ntcrest Se #emher 30 .lone 1 December ] ~ dune 1 Total Year hate ]) 2010 $ - $ 13,477 $ 13,404 $ 26,881 $ 3,468,342 0,88375% 2011 - 73,477 13,404 26,881 3,447,661 0.$8375% 2012 - ]3,477 I3,477 26,954 3,4I4,707 0.88375°/a 2033 3,0007000 33,477 13,404 3,026,5$1 3$7,826 0.88375°10 $_ 3,000,000 $ 53,908 $ 53,689 $ 3,107,597 Original Authorization - $3,OOO,OOD Issued - $3,ooa,~oo Da#e of Issue -September 26, 2008 lt~7aturity -Tune I, 2033 Principal Paymen# Date -Required upon maturity Interest Payment Dates -lone 1 and 3~eeember 1 of each year Pledged Revenue -Non-ad valorem tax revenues Denomination -NIA Call Features - No prepaymerst penalty Paying Agent - TA Flank, 3~f.A. Ratings -NIA Interest - Variable rate based on the 30-day LIBOR plus sixiy-ix+o andone-half basis paints {,625} (llondon later Bank Offered Rafe} Projects: The bonds were issued to provide interim financing far a portion of the Cites O3d Sehool Square Parking Cmrage Project including land acCluisition. {1) Estimated rate for fhe period. 99 City of Delxay Beach, Flozida Combined Schedule of Wa#.er and Sewer Revenue Bonds Balance Fiscal Year Ending September putstapding a# 30 f'~`iincipal In#eres# 'fatal End of Fiscal 7tear 201(1 $ 4,620,446 $ 1,210,229 $ 5,830,675 $ 44,316,278 2011 4,844,635 976,684 5,821,315 38,494,963 2012 2,355,737 3,569,115 5,924,853 32,570,110 2013 2,303,20b 3,622,692 5,925,898 26,644,212 2014 2,241,725 3,6$3,312 5,925,037 24,719,175 2015 2,198,726 3,723,764 5,922,490 14,796,685 2076 ~ 1,645,440 509,922 2,114,922 12,681,753 2D17 1,670,000 441,452 2,1I1,4S2 10,570,311 2018 1,740,000 368,553 2,149,653 8,460,658 2019 1,815,004 294,049 2,109,499 6,351,554 2020 1,895,000 214,793 2,109,793 4,241,7b6 2427 1,994,OD0 131,954 2,121,954 2,119,812 2022 2,075,000 44,812 2 119 812 $ 31,354,475 $ 18,792,478 $ 50,146,953 100 City of Delray Beach, Florida Schedule of Water and Sewer Revenue B©nds {Series 15'93) Balance Serial Band Outstanding at . l~5scalYearEnding Principal ~. Interest ~ , „ ,. , 1Endoi'Fiseal Interest September 3D October 1 October 1 April 1 Tofal Year Rate 20-1D $ 105,446 $ lS9,SS4 $ - $ 265,000 $ ]8,165,00© 5.75°/a 2031 99,635 165,365 - 265,00© 17,900,000 5.75 2012 1,575,737 2,899,263 - 4,475,000 ]3,425,000 5,80 2013 1,488,206 2,986,794 - 4,475,000 8,950,000 5,80 2014 1,391,725 3,083,2'75 - 4,475,000 4,475,000 5.85 2015 1,313 726 3,lbl 274 - 4,475 000 - 5.85 $ 5,974,475 $ 12,455,525 $ $ 38430,000 Original Authorization - $28,104,475 Issued - $28,104,475 Date afIssue -Tune 1, 1993 1Vlatarity Range -- Capital Appreciation Brands, Serially October 1, 1999 through October I, 2014 Principal Payment Date - C3etaber I of each year Interest Payment bates - Qetober I of each year Pledged Revenue -Utility system not revenues Denamina#ion --- $5,000 Call Features - No optional ar mandatory redemption. Paying Agent/Registrar ~-- Waehavia National Bank Jacksonville, Florida Ratings at Date of issue -- 1Vloody's Aaa {AIvIBAC insured) Standard and Poor's AAA (AiyIBAC insw-ed} Praj ects: The bands were issaed far financing the cast of refunding a portion of the water and Sewer Revenue Bonds {Series 1988} and {Series 1993}, and to pmvide funds for the acquisition and construction of certain additions, extensions and improvements to the City's combined utility. 101 Ci#y of Delray Beach, Florida Schedule of'4Jater and Sewer Revenue Bands {Series l 94'7} $alailCC Serial $ond [3utstanding at fiscal Year Ending Principal Ir~ferest )Gnd of bkscal Interest Se tember 30 October 1 October 7 A. ril X Total Year Bate 2070 $ 3,75fl,00D $ 2D5,925 $ 1D6,488 $ 4,055,413 $ 4,D53,4B8 5.Z5% 2071 3,445,©OD.... .. _. ...708,4$8 - 4,053,486 - 5,50 ~$ 7,695,000 $ 315,413 $ 108,485 $ 8,116,947 OriginalAuthorizatiau - $I5,030,OOD Issued - $15,030,004 Date of Issue -December 4, I997 Maturity Range - Serially October 1, 2003 through October I, 2010 l}rincipai Payment Date -October 1 of each year begiruLUig October 1, 2fl03 Interest Payment Dates -October 7 and April 1 Pledged Revenue -Utility system net revenues Denomination _ $$,000 Paying AgentlRegistrar - T'he Bank of Idew York 3acksonville, k'[orida Cai] Features -Bonds are not subject to optional ormandatary rederrsption prior to their stated dates of maturity. Ratings at Date of Issue - Ivloody's Aaa (AMBAC insured) Standard and Poor's AAA (AMBAC insured) Projects: The bands were issued for financing the cost of refunding aporcion of the Water and Sewer Revenue Bonds, Series 1991, 102 Ciiy of Delray Beach, Florida Schedule of Water and Sewer Revenue Bonds (series 200bA} Fiscal Year Jrnding September 3ti Ser7al Bond Principal October 1 In#erest October 7 ~ ~~ ~~~~ pril 1 otal Balance Outstanding at End of Fiscal Year IuteresY hate 2010 $ 440,004 S 139,462 $ 130,39$ $ 709,860 $ $,002,102 4.12% 2411 464,000 130,398 120,922 771,320 7,290,782 4.12 2012 440,000 120,922 111,858 672,780 6,618,002 4.12 2013 A60,000 111,SS8 142,382 b74,244 5,943,762 4.72 2014 480,000 7 02,382 92,494 674,875 5,268,8&b 4.72 2015 500,000 92,494 82,194 674,688 4,594,138 4.12 2016 500,000 82,194 71,894 654,088 3,940,110 4.12 2017 520,004 71,894 61,182 653,076 3,287,034 4.12 2018 540,404 61,182 SO,OS$ 651,244 2,635,794 4.12 2019 570,004 50,058 38,316 658,374 1,977,420 4.12 2020 590,404 38,315 26,162 654,478 1,322,912 4.12 2021 620,000 26,162 73,390 659,552 663,39D 4.12 2022 650,004 13,390 - 663,390 -. 4.12 $ 6,770,000 $ 1040,712 $ 901,250 $ 8,711,9fi2 f}rigina] Authorization - $7,000,000 Issued - $7,000,000 Da#e of Issue -May 6, 2006 Maturity Range - Seria113onds: October 1, 2007 through October 1, 2021 Principal Payment Date - ~ctaber 1 of each year Interest Payment Dates _ October 1 and Apri] 1 of each year Pledged Revenue - T3tility system net revenues Denaminatian -NIA Ca11 Features -Penalty for early payment Paying Agent - ]3raneh 73anlang and Trost Company Ratings -NIA Projects: The bonds were issued to finance the cast of a new Environmental Services Building and far funding the City's share of the bac]€-up redundant Centrifuge Project, Sludge Pelletizatlon Facility Project and the Reclaimed Water Treatment Project at the South Central lZcgional Wastewater Treatment 1?aaility. 103 City afDelray Beach, Florida Schedule of V4~ater and Sewez- Revenue Bonds (Series 20(l6B} Balance Serial Bnnd lZutstauding at Fiscal Year Ending Principal Interest Fnd of Fiscal Interest September 3D actober ~ October t A,prll 1 Tofial ____ Year Rate 20I0 $ 125,D00 $ 41,89D $ 39,442 $ 205,292 $ 2,496,S1D 3.98°/a 2011 130,000 39,402 36,815 206,217 2,240,593 3.98 2412 130,000 36,815 34,228 201,043 2,D89,S50 3.98 2013 135,OflD 34,228 31,542, 200,770 1,888,7$0 3.98 = 2014 140,DOD 31,542 28,756 2D0,298 1,688,482 3.98 2Di5 145,000 28,756 25,$70 199,626 1,488,856 3.98 2016 1fi5,00D 25,$70 22,587 213,457 1,275,399 3.98 2017 170,000 22,587 19,204 211,791 1,063,608 3.98 2018 ] 80,000 19,204 15,522 214,826 848,782 3.98 2019 1$5,000 15,622 11,940 212,562 636,220 3.98 2020 19S,D00 11,940 8,060 215,QOD 421,220 3,98 2021 20D,ODD 8,060 4,080 212,140 2D9,OSD 3.98 2022 205,000 4,D80 - 209,080 - 3.98 $ 2,145,000 $ 319 946 $ 278 106 $ 2,7D3,i02 Original Authorization - $2,350,000 Issued - $2,350,000 Date of Issue -November 17, 2006 Maturity Range -Serial Bonds: October T, 2007 thrgagh October 1, 2021 Princigal Payment Date -October 1 of each year Interest Paynnen! Dates -October 1 and April 1 of each year Pledged Revenue -Utility system net revenues Aenonrination -NIA Call Features -Penalty for early payment Paying Agent - SunTrust Bank Ratings -~ NIA Projects: 'Ike bonds were issued to Onance the City's shaz~ of the Reclaimed'GSTater Treatment Project a! the South Central Regional Wastewater Treatment Faciltiy. 104 City of Delray Beach., Florida Schedule of Water and Sewer REV~ue Bonds (Series 2407) Balance Serial Bond Outstanding of Fiscal Year Ending principal Interest ~~ ~ ~ ~-~ End of 1?iscal Interest September 30 Ocfobcr I October 7 April 1 'I'ofal Year Rate 2810 $ 200,DOD $ 194,260 $ 189,850 $ 5$4,110 $ 11,598,878 4.41% 2011 21D,000 189,850 185,440 585,29D 11,013,568 4.41 2012 210,D00 185,440 180,590 576,030 10,437,SS8 4.41 2ff13 22D,OOD 180,590 175,298 575,888 9,$61,670 4.41 2074 23D,ff00 175,298 169,565 574,863 9,286,807 4.41 2015 240,ODD 169,565 163,611 573,176 8,713,631 4.41 2016 44D,D00 163,611 143,766 1,247,377 7,466,254 4.41 2017 980,000 143,766 122,819 1,246,585 6,219,669 4.41 2018 I,020,DOD 122,819 100,768 1,243,587 4,976,D82 4.41 2ff19 1,060,ff00 100,768 77,345 1,238,163 3,737,9I9 4.4i 2020 i,11D,ff00 77,395 52,920 1,240,315 2,497,bD4 4.47 2D2i 1,170,000 52,920 27,342 1,250,262 1,247,342 4.4I 2022 1,22D,OffD 27,342 - 1,247,342 - 4.41 $ 8,810,OOff $ 1,783,624 $ 1,589,364 $ 12182,988 Oril;i.nal AuFJforization - $9,DOO,D00 Issued - $9,ffOD,D00 Date oflssue -- September 18, 20D7 Maturity Range -- Serial ]3onds: October 1, 2008 through October I, 2021 Principal Payment Date _ Octnber 1 of each year Interest Payrztent Dates --- October 1 and April l of each year fledged Revenue - Utility system net revenues Denomination - H/A Gall Features -Penally for early payment 'Paying Agent -- Branch. Banking and `Trust Company Ratings -NIA Projects: The bonds were issued to finance the City's share of the Reclaimed Water and Deepwell Project at the South Central Regional Wastewater Treatment Facilsty_ lOS City of Dehay Beach, Florida ~chedute of Installment Agreements Capital ~.eases)'~ Balance >F~scal Year T;nding Outstanding at September 30 Princlpal Interest 'T`otal End o~ p'iscal Year 2010 $ 115,39& $ 9,547 $ 124,943 $ 302,246 2011 96,839 5,787 1Q3,62b 198,620 2012 99,547 4,081 1€}3,628 94,992 2013 _93,694 1,298_ 94,992 - _ 405,476 $ 21,713 $ 427,189 $ Schedule of installment agreements consists of the fallowing: Bank of America Leasirsg -.. Original amount of principal-$117,540, 48-month tenor, 3.61 I24/° interest, dates 7anvary 10, 2006 through December 10, 2009----golf carts at Lakevie~r Golf Course. BankofAmericaLeasing _ Original amount of principal~199,573, 4$-at~onih tern, 3.61].2% interest, dates 7anuary I0, 2005 through December 10, 2009 telephone system at Police Department. Sun Trust Leasing -Original amount of principal-$260,6fl0, 48-mantle term, 2.7b00°!n interest, dates September I8, 2009 through August 18, 2013--parking ;tneters_ Sun Trust Leasing -Original amount of principal--$ I3 I,420, 48-month terfn, 2.7600°/fl interest, dates September 18, 2009 through August I8, 2013-golf carts at Delray Beach Golf Course. I06 City afDe]xay Beach, Florida Combined Schedule of Community Redeveloptnertt Agency Tax Increment Redevelopment Revenue Bonds (Series 2004 and Series 1999) Balance k~scal Year Ending Principal Interest _ Outstanding at Interest September 30 September 1 Sept.l/Mar. 1 Total End of Fiscal Year Rate 20]0 $ 1,425,000 $ 651,128 $ 2,076,128 $ 15,311,200 2011 1,520,000 584,075 2,704,b76 13,207,724 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 I,696,274 5,187,074 2015 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 I,243,184 1,242,704 2019 1,190,ODR 52,704 1,242,704 - $ 14,050,000 $ 3,337,328 $ 17,387,328 Original Authorization - $10,000,000 (series 2004A -Tux-exempt) - $1,925,000 (Series 20048 ~ Taxable) - $9,715,000 (Series 1999A -Tax-exempt) Issued _ $10,000,000 ($5,000,000 issued before September 30, 2004 and $S,OOD,~00 issued from October 1, 2004 to December 31, 2004 -Series 2004A -Tax-exempt) - $1,925,000 (Series 20048 -Taxable) - $9,715,000 (Series 1949A -Tax-exerrtpt) Date oflssue -May 19, 2004 (2004 Series), andJune 25, 1999 (1999 Series) Maturity Range _ Serially September 1, 2001 through September 1, 2019 (Series 2004A&B, & 1999) Principal Paytteent pate -Series 20D4A: September 1 ofeach year, commencing September 1, 2005 - Series 20048: September 1 ofeachyear, commencing September 1, 2005 - Series 1999A: September 1 of eacts year, commencing Septembee 1, 200I Interest Rate -Series 2004A: 4.2982% until September 1, 2019 Series 20048: 5.9095°/a until September 1, 20 i 6 - Series 1999A: 4.80°/a until September 1, 2019 Pledged Revenue ~- Tax increment revenues Denominafion -NIA Call 1<ea#ures - No penalty for earlypay~nent for taxable deb# only Paying Agent/ltegistrar - Bank of America (Series 2004A 8c B, 8c 1999} Ratings - Alot rated 429B2°/a - 5.9095% 4.2982 - 5.9095 4.2982 - 5.4095 4.2982 - 5.9095 4.2982 - 5.9095 4.2982 - 5.9095 4.29$2 - S.9D9S 4.2982 - 4.8000 4.2982 - 4.8000 4.2982 - 4.800D Project: The Series 2004A and 1999A proceeds were issued for the purpose of financing the posts of acquisition and construction ofcertain redevelopment projects. Proceeds of the Series 2004E I3vnds were used to refund the 19998 Series Bonds. The CRA issued a $7,000,000 variable rate taxable line of credit with Regions Bank an October 5, 2006 far the purpose of financing the costs of acquistion and construction of certain redevelopment projects. The line of credit matures Ociober 6, 2009 and has a current rate of 5.86°/a. There was nv outstanding liability on the line of credit at September 30, 2009. i07 Statistical Section STATISTI.CA~ S~CT~C~N '1 his part of tine Cit~+ o£ Delray Beach camprehensyve annual financial reporE preser~ks detailed information as a context for nnderskaading whale the information in the financial stakemenks, Hoke disclosures, and req~rired supplementary information says abouk the City's overall Financial health. Contents Page ~inaneial Trends .................•----•-•----•.................................................................,...,.....................................109 These schedules contain trend information to help the reader understand how the City's financial performance and weld-being have changed over tune, Revenue Capacity ........................................................................... ......117 These schedules contain inforrpatian to help ~ the reader asse<rs the City s most significant local revenue source; the property tax. Debt Capacity ................................................».........._...._.._................_..........._.._..._....._......._..._..................120 These schedulers present information to help the reader assess the afjrordability of the City's current levels of outstanding debt and the City's ability to issue additional debt in the future. Demographic and Economic Tnformation ..................................................................................................124 These schedules offer demographic and economic indicators to help the reader understand the enviranmeni wtthin lvhich the City's financial activities take place. Operating lnformakion....................... ........................._..._...........................................................................125 These schedules captain service and infrastructure data to help the reader understand haw the information in the City's financial report relates to the services the City of Delray Beach provides apd the activities it performs. sources: Unless otherwise noted, the information in these schedules is derived from the comprchcnsive annual financial reports for the relevant year. ias 0 x w ~ ~ ~ '~ ~d ~~ ~ ~ y R ~~ w -• s ~ ,~ ~ a O o, °}~ ,~ y N S ~ `'~ € U ~ ` ~~~ '~ m 0o q ul rn Y7 O ~D M O .-t cl' '[h 'Ch 01 00 ~ tiD V' ~h O~ O d' M ~Y L ~ Q fV ~ O ~d t ~ O~ 00 t~ u'~ SP 00 N [~ ~ N G? ..tee ~ O N Od eh N ~D M ~ ~ ~ V"f i`- U f~ u7 cp N i'~- cal h ~ N ~ ~p ~- ~--' `--~ ~ ~ ~ . -x b9 b9 fR 64 64 64 ~ ~ ~ 00 cV ~ O N ~' oD N d' .--~ [~ sS' M On N ~ N q G~ ~h VZ .--i ~F- a3' O V"7 00 .--i Ef'1 h N Y'7 trj N ~? d, xD O ~ ~ N N O ~ o0 O N cn Ica vi ~6 ao O 46 O~ ~-+ 1~ t ~--~ N O ,D M .-+ cn ~ ~ ~ .-~ ~ N {{} fA 69 69 64 64 i~ h ~n cT ~n N ~D ri N O~ ,--~ N o~ C~ -~ ,-~ N a~ o, o N as ,•-~ N C}' i/'1 L~ l~ DD M N L1 M OD O N O 00 M N l ~ Q V7 fR W Ob CT tp O r*l V'1 ~' t~ O iV V-p i~ r"s l~ ~1 N N 01 Vl d' O ~ O N ~O ,--~ d1 .-~ C~3 69 69 f,9 69 69 G31 N ~D [ ~C r+'~ b V-e Y7 ~ N N 00 00 W 4'1 [~ \D N 1CJ ~O ~ ~"~ N 61 '~ M Oa C~3 LV 61 Vl M L1 M '~ 'U' Cl" ~ ~ cI' d0 N Ir'= L'T N 00 O ~n ,-~ d- tV N cn m rn m ~n h N ~ C? N i~ o rn o cn '~' rrt N vi vo N u`i 4i ,-~ ~ ~ ~ of to O v7 N ~ u's cn O, ,--~ v~ oo . 69 69 bq f9 69 CfJ ti7 h ~ +n v~ ~-+ a v> rn oa m o ~D CT O~ u7 c+'f N ~O N O~ •w ~ o0 Ui h +--~ Q~ M ~D 0 0 N~ f~ Q~ n v~ vi oo vi vi v, o t+~i ~n C> o0 ~ V'f OQ ~f7 ~--~ ~ ~ V1 M N 4'1 Q DD 00 ..-c CD M `CY ~fl M --~ M !~ N N N ~ ~ h ~ c -1 nl ~ N o o o ca N V yl bR [s4 64 Y3 69 69 ~t ~1 t+'z cn ~D V1 N rn .-+ O vz b V"i Cam{ LP `d' O I~ Lh h lD O V7 .-y Vl ~ f~ O~ C ~ N ~r'i ~f} N 6~ trl vl O O c+3 'Cr ice- 6i N T o0 C3~ ~D M ~ M 'i'1 '~ Vt 00 06 ~ a0 I^- . -~ ~ M O M op ,-~e M ~ M V2 '~S vi 'ch M M 'tY eh M N Q+ 6~ \D h .--~ N .--~ ~n ~n cam! o~ `,O N M sn 64 EH 64 59 69 6A m M V~ .--y [~ tiG ~ h O 01 CT 00 ~n rn a .--~ rn .--~ ~ a ~ o kn cn ~n m m N cn h d ~~ ~--~ m ~ N of av oo i~ cri O ~ o N'r o0 O~ 01 cn m 00 Crl Q N ~ m Cl V1 ~nvioo o mvio ~ rn,-:ao o. N ~ v1 N h L .--i N ~ 69 69 ER V3 64 b9 *~'~ +~+ •~ - te N 'Lf m } a b a iw "~ ~ i ~ . ~ N t~C d ~ c~C y to ~ ~ CK K: ~ ~ ~ ~ y w p O ~ O ~ Q y s of e ~ ~ ~ L u ~ ~ ~ ~ w ~ .~ i~ ~ v ~ ~ .b a p ~ ~ '~ ~ o . o ~ ~ ~ a . , ~ v .G a~ o ~ ~ ~ ~ ~ ~ w ' ~ ~ ~ ~ w ~ w ~ N .LJ tG :~ O t+1 O O N i~ tr! .~ '~ M s+ L1 N N iG a 0 0 ~. a a a O L'IT'Y 034' DEI.72AY ~EAQH, ~,QIt110h. , Changes in 14ei Assets Lasi Seven Fisca! Yams - - Accwal I[ae7s of~~oun ' Fiscal Year 2003 2004 2005 2[106 7.00'1 2008 2009 Expenses - fiiavetvtnental aetFYItIPS: _ General government $ 12,615,732 $ 13,504,963 $ 16,634,186 $ 20,944,239 $ 25,304,576 S 25,137,520 $ 22331,793 Publiasafety 41,494,100 42,413,760 44,818,400 49,389,129 55,930,]94 56,742,719 54,234,648 - Physic¢lanvirannren7 4,129,748 4,159,255 469,904 5,931,521 7,194,134 8,130,445 4,859,520 Parks and recreation 10,804,249 1 D,fi08,918 17,164,817 12,428,343 ]4,723,853 74,457,33fi 14,790,100 Interest on long-tcrm debt 1,715,063 2,476,264 2,078,24A 2,755,249 E,389,786 2,$32,011 3,27$,142 Total governmcn3al activities etpet~ses 70,75$,892 73,158,160 79,265,551 91,448,481 104,542,543_. 1D7,3D0,031 104,494,2tl3 - Buslncss-type activiics: WaterlSewerUtr'lity 18,865,871 22,835,589 19,975,077 20,432,193 22,4D7,199 23,932,410 25,636,462 Municipal Golf Course 2,942,377 3,381,336 3,382,942 3,467,334 3,A40,677 3,265,478 2,952,315 I,akoviaw©olfCourse 706,932 696,573 709,142 653,116 748,549 764,782 794,544 Cilglvlarina 103,101 104,143 1tl9,02b 114,222 120,146 - 121,004 131,235 Sanitation 2,354,354 4,338,42fi 3,788,232 9,053,052 2,$97,766 3,476,663 4,443,701 Stortnwater 1751iry 1,429,557 1,D78,343 1,111,291 1,050,275 1,331,003 1,506,764 1,390,004 Tatal bnsinass #ype acHvifics etcpensea _ 26,396,132 ^ 32,434,71D 29,075,710 34,770,142 30,945,277 33,007,101 35~29R,261 ^ Tatalprimarygovarnnwntexpenses $ , 97 155,024 $ 105,592,870 S 108,341,261 $ 125,218,623 _$ 135,487,820 $ 140,307,132 $ 739,792,459 1`rogram Revenncs Governmontal aclivitias: Charges for s~vlces: General government $ 3,826,4D? $ 3,623,697 $ 4,367,332 $ 4,986,337 S 4,521,285 $ 4,622,167 $ 3,2]6,555 1'ublicsal'ety 6,1141,301 5,48L,990 5,823,023 5,310,373 6,033,2D1 6,543,112 6,739,002 Plrysical eudunnment 615,657 533,729 59$,019 641,251 626,974 649,216 971,381 Pmlcs and recreation ],264,769 1,092,586 1,157,013 1,143,867 1,236,560 1,282,353 1,465,722 Operating grams and co¢hrbntions: GeneralgovemmenE 1,326,703 I,975,397 1,829,754 3,260,344 3,165,420 3,945,992 A,645,288 Public safety 784,980 1,858,212 2,006,827 1,825,883 2,033,98$ 2,242,523 1,986,484 Physical envim~se¢t 238,877 360,352 427,188 1,226,975 547,284 103,357 24,979 Parks and recreation 97,473 57,955 398,3fl7 3,137,386 1,345,900 997,425 143,094 Capital giants and contnbu3irms: ' GenereEgavernment - 1,611,5[9 I,1R4,058 342,025 1,383,440 622,993 848,436 PubGcsafety - - - - - 749,250 200,900 Physicale¢vironment 202,03] 152,477 470,063 - - R,250,OD0 4D,977 Parlcsaadrecreation 150,000 1,641,635 479,]16 TotaE governmental ac[ivities program revennes 14,548,198 18499_ 5~ 49-,- 18,740,100 21,874,491 20,894,152 30,DSR,388 2D,282,814 Dusiaess-type aclivibrs: Charges for services: Water/Sewer 22,71&,982 23,635,054 24,426,939 25,T48,645 29,162,001 29,245,949 33,445,652 Municipal Golf Course 2,975,728 3,294,989 3,30D,439 3,437,934 3,467,778 3,459,04E 3,303,511 I.akeviewGollCourse 828,116 827,397 823,777 768,294 853,654 681,563 749,367 Citylvlarina 709,352 150,644 155,200 149,294 16D,6DS 208,598 204,467 Sanitatian 2,521,938 2,602,241 2,538,402 2,GL5,9$1 3,094,658 3,383,499 4,942,922 StattnrovaEerUtiGty 1,629,589 1,661,505 1,672,635 1,702,322 2,D97,527 2,090,146 2,095,636 Operating Capital grants and contributions: ` Water/Sewer 373,978 2,038,967 786,277 1,913,869 95[,487 2,595,258 1,092,926 Muuicipal Golf Courae 92,298 113,720 139,408 131, l71 182,796 43,969 37,040 IaloevicwCmlfCourss 4,336 17,165 35,502 55,415 6,171 5,410 5,485 CityMariaa 205 56,912 2,]77 273 491 884 35,653 Sanlin6on 103,7D3 1,790,775 1,237,6$0 5,663,671 115,040 417,250 130,030 StormwaterUlility 260,465 3D,435 20,553 45,157 362,325 17,509 17,366 Capital grants and actatrrlrtrtions: Waterl5ewer 1,9D9,473 1,968,R4D 1,290,7$6 9G7,A62 1,424,878 996,447 1,102,611 Municipal Golf Course 10,508 - - - - - - Stormwater 1)ttlity - 146,1)26 - - Total business-type actiriSes program revenues 32,986,671 38,188,644 _ 36,420,714 43,345,519 43,879,411 43,145,524 47,[63,166 Total prirnary govet~tent program revennues $ 47,534,869 $ 56,688,793 $ 55~___ 1 .___.._.60,R1d $ 65,220,016 $ 62,773,563 $ 73,203,912 $ 67,445,980 l~1et (expense)lreveuue Govemmentalaclivities $ (56,210,694) $ (54,658,611) $ (60,525,451) $ (64,573,99D) $ (83,648,391) $ (77,241,643) $ (84,211,384) Busuress"typeacFivities 6,590,539 5,753,934 7,345,D09 8~575s377 1D,934,134 [0,138,423 E1,864,905 Totalprvnatygovernmentr~ctcapcnac $ (49,624,155) $ (48,904,677) $ (53,180,447) $ 6~__0_,_9._9R~,G13~ $ (72,714,257} $ {67,]03,220) $ (72.346,484} Nate: Pg 1 0£2 l10 Cl•r~t OF ~ELI2AY BF1ACi1, ~Lfl121nA Changes in Net Assets Lars Seven Fiscal Years Aecnea! Basis ofAceauntinQ General Tlevenues and Utlcer Changes in Met Assets Gnverrunental activities: Taxes: Property taxes Franchise fees ITtility service taxes Sales taxes Luca] lnrsiness tax InterBnvenunental; unrestricted Investmentesnrings Crain on disposal of eapitol assets Miscellaneous Transfers Tats! governmental actlylties Business-type activities Investment earnings Transfers Total business-type ac&rilies Total primary gavernmenE Changes in Net Assets Governmental activities Business-type activities 'T'otal primary govermnenf Ttote: Pg 2 of 2 Fiscal Year 2443 2044 2445 2446 2447 2448 2449 $ 32,069,434 $ 36,055,993 $ 91,581,718 $ 49,825,341 $ 59,091,002 $ 55,302,837 $ 53,984,307 3,467,374 3,817,080 3,989,989 4,879,168 5,257,560 5,247,412 5,333,561 8,093,fl64 7,704,692 8,088,142 8,678,7€0 8,222,944 8,338,262 8,958,175 1,715,268 1,806, 689 1,835,507 1,486,436 1,438,613 1,365,552 1,308,213 _ _ _ _ - 789,705 5,827,651 6,493,433 6,918,199 7,393,652 6,927,534 6,532,854 5,917,818 460,913 462,340 1,543,167 2,561,044 2,8]6,429 2,064,705 322,165 (4,872,674] 36,514 1,1]2,107 19,532 - - - 3,990,308 7,273,876 7,b 12,229 €0,616,990 5,724,228 7,320,429 8,425,515 2,586,058 2,672,550 2,575,410 1,976,519 3,716,720 2,659,368 3,547,891 52,837,001 66,273,167 75,326,4b3 87,439,892 93,195,030 88,831,469 88,587,350 128,491 78,182 190,858 446,682 737,952 495,237 6,897 (2,566,058) (2,672,550} (2,575,410) (],976,519} (3,716,720) {2,659,368} (3,547,697) (2,457,367] (2,594,368) (2,384,554] (1,529,837) ~ (2,978,768) {2,164,131} (3,544,994 $ 50,374,434 $ 63,678,799 $ 72,941,911 S 85,910,055 $ 9fl 276,262 S 86,667,338 S 85,04656 ~ $ (3,373,694} $ 11,9]4,556 $ 14,804,012 $ 17,865,902 ~ 9,546,639 $ 17,589,82fi $ 4,375,961 4,132,972 3,159,566 4,460,452 7,045,540 7,955,366 7,974,792 8,323,911 $ 759,278 S 15,074,12'L $ 19,764,464 $ 24,911,442 $ 77,502,405 $ 19,564,118 $ 12,659,872 Information prior to the adeption cif C+AS13 SiatemenF 34 in fiscal year 2003 is not available. 111 C~TST OF DELRAY BEACH, Fi`LORmA Governmental ~4ctiuities Tax Revenues by Source Last Seven Pascal dears Accrual lianas o~'Accountang Utility Sales Fiscal Property F~-a~nchRse X,Qeal Service anrlIIse Year Taxes pees Business Tax Tax Tax Total 2€1113 $ 32,069,034 $ 3,467,379 $ - $ 8,093,064 ~ 1,715,268 $ 45,344,745 2D04 36,355,993 3,817,080 - 7,704,592 1,806,689 49,684,454 ' 2005 41,584,7]8 3,989,989 - 8,088,142 1,895,507 55,558,356 20D6 49,825,341 4,879,168 - 8,678,710 1,488,936 64,$72,1.55 2007 59,091,042 5,257,560 - 8,222,944 1,438,613 74,010,119 2008 55,302,837 - - 8,338,282 1,365,552 65,006,671 2DD9 53,984,307 - 789,705 8,958,175 1,308,213 65,040,400 h~armatlon prior to the adoption of GASB Statement 34 in fiscal year 20fl3 is not available. F.ffec#ivc with the 2008 fiscal year, franchise fees are categorized as revenue from Pees and Permits. Effective with the 2009 fiscal year, local busiaess flax receipts (formerly occupational licenses) are are no longer categorized as revenue from Fees and Perini#s. 1I2 O Ol 4~ Saco tl' M i'~1 O~ O ~ mO O~ N ~ b O fi . O O + V d' [ n . N m a~ M ~ M ~ ~-+ N _ j vj ~ cn ss I u w m ~ ~n ~ i~ O~ ~U N o o V' ' 00 M ' 00 0 n m N D. N '1 b ~ ~ h ' G r t " 1~ T ~n vi M ~n b' m N N M I~ N .-a .-. 69 69 69 di - . O V] VT 1p CT Y1 fJ ~ . - ~ cn .~-s Oi N 4+ m b ~n ' O a~ ~ M tt O ~ ' ~ T ~ O v1 ro ' +D [~ -+ ~ U1 T ~ ~ m N ~ . ~ M N M N I 69 Vf 69 V9 . M m ---~ 6+ M V ~D _ W VM'1 ~ a ~ ~ M ~ b - P ~D oa v~ ~D r~ l~ h ~ ~ - N d' h 4 ~ Ai ..< ~-'~ n7 aA S9 64 ~3 - ~nMrn h N ~N ~P 01 ~ 'V oD ~ ~' b P . m ~ .. C \' 7 N [~ o0 h N O D - . l O 90 . ~O N p~ [~ ~ N [~ r N h ~- . .--i N (~i bq W 69 fA - " n M N 'U ~ 'V' v i d ' ' ° A ~ h 4 ~ - a e N V Oi V o0 M 7 00 ~ . N N - 49 64 6' 6A i -- ~~ s ~ ~ . ~ O. i~ ' ~ v~'i ~ ~n n rn" -j ~ ~ m` N a tr, m~ o o rn rn _ d' of V' --~ .-~ m 3rs tsi rA c i w i~rv ~ rn.-.~ - ' - ~ .~-~ vrTi oNO ~ m eMi ~ N ~ ~ o n ° - o p c a ~ ~-+o o ~c m ornm ' N V3 O~ d' ~ .--. CO N N ~ ~ ~ ~ - <t o v b ~n o0 rn ~ , N VPi n ' l7 ~ ~ ~~+ P ~ - ' .~ oo r v3 rri ui N .. . - o o fi Nn v Q~ ~_ m-mn o0 7 ~ N tri q h h OO . ~ M M - ' v3 69 69 if1 } C o -. M " b ~ N M O\ M . O i ~ ~ [`~ 00 W ' ° N N m m ~ r ~ e O +r i ' N ~n a, 'n _ N a++ ,--. ~ h ad' aq 69 69 64 !p W CJ .ti ~° ' ~ ~ x ~ ~ ~ O V ~ ~ ~ W~ ~ W ~ } I+S ~ h ~ a ~ b A ~ ~ ~ C7 a tLry Va ~ o +~ ^~ a 63 p ~ at ^ ~ F*~ y ~ y t . o W ~ _ ~ / U p g '[7 R+ '~ p fit 3"'{ ~ U ~~ N ~ ~ ~ i ~ ~~ .~ a W ~ a }} v Sf o ~ m ~ ~ ~ o ~" ~ ~ m ~ 'd ~' ~" ',~ .ti ~ `e~ N ~ o '~ F , © a`3 `d V W m h ~] F4~ V fL~l~" ~ ~ .~ .~ ~_ ~ ~ w a i 4 3 C_1 i 'Q D ~ M ~ ti 1'IW u ~ ~ ~ A ~ ~ ~ s ~ ~ A ~ y fTi ~ ~ ~ Z ~, ztig U uW~ o O V7 ~ ao t- N v h ~? N Y 'q~ © t ; .-~ N r a ao v c~ oo cam[ r*a o`~'~Ta o 7 ice- ~ 000 , ~ v 01 O m ~ R m „i 1~ .-~ ~ M '+' .-i c(, d' U .--~ 4 O. '7 c © C v~ w r ,n a0 t~ o rn +n rn N ~n ~ ' oo N ~ v a N O M h VY n l? vj ao` N ao 00 ~+ ~cN O O N H a ,R .-+ Y t- f•[ oo ~ e+i '~ a !y N N V ~n a v VJ ~-~+ O N Va .--~ " ~ V3 m--,m~hrn n " ran 1- r urovl a n m o0 h w h v3 t- v o 3o rn ... v~ .., ,-, N In o n N v -. v3 00 a .. v ' va v, ,-. r~ 'n w M o a, ~ ' o +n ' , ' N n °~ ° .~ m ~i vi b` .-: ~ ~ a .-~ ni ~ ri ~ v1 r s•i o ri r orn roomn O V? DD ~P --' rn N v, rwo v vmN W N a r o0 o a C N T ~ ~ M n fT ] O ry m ~ V~ O~ N '~A ~ rN+ ~ V N 1~ O, Q^ O 7~ N M P` a. a, l'J N 6i oo r'3 P ~-, [~ N .-+ b n 7 M G r M i` - '+ n~ oo h a .-, a +n tt m n ~ o0 ,o a, tl' o K N O V? O' a N ' rn m b .. W c1, v. en [ ~ ~ N ' rn V , ' , a ~` O Vl O O N N O N N 41 O N 3/3 m M h V7 C) N ~ ~' C' ~ N N N t~ ~ G i l a 4 4 oo 'n vi O vi m 7 <Y r In b l ~ f ~ V Cn (~ c~ to V 4~ b r ~D m a a n O n n V' ~ n ,-+ 00 e Ny v ~` N N t ~ a i . + N .-. ry N N M + -, v ~ ~n a a o0 4 b rn ~ v, e~ t C? oo d, o O 3n m . ~ ~ + ~ m r ~ ~ o t; m N b m ~o M a. ~ n ao r- b o o m o [- oo ' rn t`1 n ~ c m r ~ ~- v ~n o 00 In + M a `fl N N W t- W V V) R O W C> N ti , 00 to sn ,O O+ != C C r T'~ W V' ~ d' (,l Vl O tl' O VJ ~ O h Oi O, M V N as f ~ 40 Vl n 2~ a f1 l~ ~!1 N oO r-i m .-~ Vl ,-+ [n c1 V' ~O 1ti to a a ~ ~ l ~ N rn +~ O a N N .. v3 b h al P .-~ .-' M M t- Q, .--' O~ 0 0 0 n O 0 t+ !~ c ~ I ti O O ~ r c ' G P ' I W C M (~ DO R N a] di W aO r W l O [~ b O ~ fh tl i~ W ~ a0 l~ m Oi ,--i N ~ , -~ M ~ V P i~1 11 O V ~ W ~+l 00 W o '/ o ~n t+ o V1 ~ b O~ tl' ~ T N N - ~ N co ~C+ in cn ao as C I + ~ ^ N~aw .. . . . . W O i i i o o t +n ~ n ao d .- ~ G ~n~ G, ,n a, a? v v ,+ N w-, '~' .--' N O -+ 0+1 ~ ,,,~ ..~ m F d' h Oa O m 6 ~ M 01 C h1 ~ O O O M ~ ~ Yl M 7 M N 7 A 'n ,D Nl 6i " V ' a] R t +) o ~ o h ' h ~ ,n YNi M t`1, _ . -~ ~ ` pl. ~. V O V~ ~ c ~ ° oo r N O, N W 00 W O N b ~ O .-. tr, tt P M c+i N . Q a0 ' a M M o0 N r ' O P C b r„ O M ,-+ V7 N ._.. ~ ~ a0 00 r Pt a cn cn [ '~h N O I~ -. ~ J O 00 N 41 O r ,P R v oa l O V'1 M ! f+ N R M ...i titl •^+ h• G ~ ~ . ~ N N R ~ O ,-+ ~ ~ ~ ~ v m r v a s t ~ h 'cr w N 49 v, 'U ~' d' ~ fi rn v, ~ n .. oo a' N 7 io n' o0 0 n N '~ , r V M l~ N N h <Y [~ N YY t- ~--~ m [~ M N 00 a V) b~ w ID [~ V] ' Qi r VJ N V~ O N O H O c N I L O ' ' V c ~' ° ~ N r M b~ Yl `T N N t'H''n V^ n O~ N' N h CO r .b-^i rn ~.. v~ 00~ f~} O r ~ N V1 M O N O+V7 7 u,a ° N cn In ~ cn o v', M 00 V7 N m N ~ o, N m er 'n t ~ M P M N R ul V1 ,--i +n N ~ ~t N 1 ~ a DO ~ r ~ " '~ ~ ,, y N ~ N + ~ v -. N a N ~ a +C ~ O b O ~3 m m 7 N V'1 m R m Vl r T ~ ~ w N V ~! , a ~ M R V' W h n 0 v] 00 V7 Oa 00 M O oo t+l ~ K a [ ~ U oa [+ O W [ N • O~ ' ' ' ' a C NO 'n tb G u'1 .-i M r a ~D b ~ V M R Vl ~ d~ R O h a0 ~ b U b W VJ a O N c t n 00 Vl ~ hl Vl O O m W O N +-+ m 7 n 'cr W V] 7 W W O ,/1 R o7 s Cf• O ~ S N .M-~ vi ,--~ ~ ~ a] ~ N h ~ ~ N N ~ N ~ r ~ ~ v ~ ~ ~p ~ w ., O m o0 ~ O d' ar [~ ~ ~ ~ r v P ~' a7 V' ul r b V? ~~ b r P N Yl bl O a0 V3 h [n 6 U t~ b b ~ '~ ' b oo VJ d W I I 1 1 1 '~ t ~ ~ G ~~ M rfl DD a a b M ~ .--i N .--~ V] W O V O O W R a, ~ .-+ b h ' l^ - N d n Ill W h Do V O N ~ N m O d " ~ g t ~ . i N W wl vi n ~ l , M~ W ~ ~ N h .-. W N ry d- i l oo C ~ t n tib . i 6/ o N~ <t ao .-~ o e- a s v3 V> ao rn ~ va G m a n a V, N 'V •--~ ~ .-+1 AD [ ~ ~ ~ r b ~ Ov Y'1 00 m DO Ot ~ R b M V] Vl C[' OO 1 cR O b 00 O C [^ 1 y~ 1 1 1 ~ V] t ~ C R W [~ ~ r~ 06 ~t N N h N ~ 41 VJ ~ CR '~ '-i d~ a I as N a - Vl N n M F N ~ ,n m [~ R as m 'O N N t ~+'~ -+ ~ , n m v , rn N~ _ O M W N O~ ,n © N r .-: oo N r+ ~+ N G+, o_ N h e ~ ~~ ri ~ V m ~ m va u9 ~ ~ ~ w ~ O ~ ~ N rl~. p ~ v y ••, ~ O d V 4.c b4 A V v ~ ~ W ~ o 5C•' rter~. u ~ ~ ~ ~ ci i3 ~ ~ a .~ o ~ ~~'Q ~ ~ ~ a ~ va ° ~O ,q v ~ b s G W ~ ,a ~ °~ a~ a 1~ O "~" m ay! a m ~ ~ ~ ~ G ~ U N~ d ~ d j a~'i •A C~ 7 ~ o tl o •~ O a'~. u~ q NN i~ a n o m In '~ 'a N EJS 013 ~ ' ~F 57 '~, v' p '¢ ~ ~ .L] 'Yi 6 ~ ' ~ P? ~C p eC a'S f." 0 w ~ O ~ ~ -. •rs ~ o. ~ ui a"3 ~ irr ~ N 4y) ~'' W 4.. ~ ~ ~ m ~' ~ v fisa ~...H ~ ax C7a.rha.C 7 ma v ~ ~ ~ a a u m w E c1 a V' CrrY of DiJ>E.xa~r BEACH F~vlunA General Crovernmental Tax Revenues By ~aurce Last Ten Fiscal Years Modifce~'.4ccrual Basis of,4ccounting iJfility T~'iscal Property Frauchise Local Service Sales Year Taxes Fees Bauslness Tag Tag Tax Total 2000 $ 23,429,259 $ 3,207,320 $ - $ 6,442,358 $ 1,450,563 $ 34,529,500 200E 26,042,931 3,663,331 - 6,671,200 1,524,142 37,901,504 2{102 29,011,246 3,426,725 - 7,875,835 1,562,176 41,875,982 2003 32,069,034 3,467,379 - B,©93,064 1,715,268 45,344,745 2004 36,355,993 3,817,080 - 7,'104,692 1,806,689 49,684,454 2005 41,584,718 3,989,989 - 8,088,142 1,895,507 55,558,356 2006 49,825,341 4,879,168 - 8,678,710 1,488,936 64,872,1SS 2007 59,091,002 5,257,560 - 8,222,944 1,438,613 74,010,119 2008 SS,302,&37 - - 8,338,282 1,365,552 65,006,671 2009 53,984,307 - 789,705 8,958,175 1,308,213 65,040,400 Effective with the 2€108 fiscal year, franchise fees are categorized as revenue from Fees and Permits. Effective with the 2{109 fiscal year, local business tax receipts (formerly occupational licenses} are are no longer categorized as revenue from fees and Permits. 115 A a gg H a~ o ti ..U n ~~ //y~5 h"'1 ~+ y b A ~ L7 L V h k1 y ~ ~ s ~ H 5 ~ p~ ~ O a a ~ P y a ~/_ Q` e W et ~ yNy~ ~ ~ r{ d F" ~ n H ~ '[F d a ~ ~ W a~i a A R c E ~ w ~ e H o y a o g H e d m ~ x ~ ~ ~ i P E d ~ Y yy 4 R Qi C a '~ s`. i ~ ~ ~i ` P F ~ V C n ~y C '~ ~ E W i o o a e o a a e e M1~ m U •O .~-~ b V V~ +: i ~n O~ O U Po ~O r+i V7 'V oo uo u, ao h nnr n n ~ ~ ~ M ~ m N f rl p N Nl m~~ w h eo ~ G p~ N " cn Oi ai ,--: o '+i P a~ do 00 g~ yy G N O V N V a ~rroi ~ U o~-ibb~~o~o~oborm ~nrnn moovmmm " " " " vi vi ~ oo .-. .~ o m m m p O o p O p p O o~ ° ~ °n °o o° Op° 440' ~~ °o o °o r°, ~D rn o b O b a M t+l eo ri c- oo co 00 0o co ~ r m e}+a d,m tr oo m+cy b~ao ~nm o~n~N~rnoN ao •o o' t? r ^l, r~ ~a rr ' ni m o N M~ m C oo ~ N {~ p i p C~ G+ P vl O oo v~m7 m•o V ~n 4~ ~a~~n~onv,ios~ m t~ t a m a m p " " e*i cri cn ~" ~ vi m oo o0 00 va r.-.4O~aa~v nO~v V's w q W P~ p~ W d1 w h C? M 1~ V) N ~D m 2_ b m .~ N M ~/l M 4l ^~ '^~ Qt n mvi tam rn.--~ao oa oo ~mrn ~ moony oo.n " O Oi ~ ~ O o m ~ ni V ommwmnc~nztn 00 07 o H h oa m vi c~ o . . ~ o n n r rn ° ' N n i ~ c y o o m O1 O ~D W L ~ O P l y R1 ~--~ `~ ~ M h h l -- O b !1 V V OD . . O o h .~-e C h t`1 9 T~ o" ri v oo" m oo rri r vi v '3 ~ rnmw~m~wrndm,~N m n ~ ,a m ,--~ , . ch ~ V yr ~ m ~° ~ ~ ~.. ? , ~ W ~~ r*~rx +n rnNOnnv~ ' ~ m Q ~ N N ~ of ~ p [~ W .M-~ V ~n oo ~n o t _ oo v tv ~n '~ ss o _ L~~1 SN`i 9~0 N .M-i h N M h h ' ~ ~ N m m Ys ~D o .-r O~ rw n Qt ,--~ .--~ .-r .--i N N ~ N rl N ~ '~ ~ D -' ~ ~ ~ i r' n FL' b m p~ ~ r h~ N~ b 0 ~ . . G i W m 90 i~ tl O ~ v .~ ~ ~ a ~ ~, w }, mrn avr otri o:i +n oo' ~ ~ vi N tl' m n N oo m a~ ' y 0 0' h o w 'W ~ h Q M w ~ d m +~ ntht7G~4iGi~eriM N N + G4~y ~ o c l cn rn N N M M N w ~ Pi py ~ ~ ~ p .F' P V ti ~ ~N~pp Opi n rV M apo ~ ~U r T 4z V;, G i ~ m oP " C~ w V r a fy d' N N d' n V' N ~ ~ ~ Vl N d' ~P 4'i h ti ~ V m m ~ V +n vy i ;, oo im' µ; m ~ m U rn m~~r,r}im~ rnw ~ 6~ ~rl Oi of ~n ~D in Go _ ~°~ L~'' . °~W ~ C m m ~ Sri +ri to a> .-" .: o ~ ~j J- , v, '_' '" o ~ d ~' w N ~ ~ V •a N rnoaooooo 00 '2-~ ~ a ~ ~~ O v N N N N N N N N N ~ q~q~~ ~ A W VA 4 O ~ ~ A ro m v ~ c ~ O O G b O O b C b 0 x" F ~ I ooooooa o00 ~ ~ a~ h N N N N N N N N N N _ i ~ ~# ~ ~n CITY OE DEJ.ILAY BEACH,BF.OIUDA Property Tax .Rates -Direct and Overlapping Governments Last Ten Fascal Years T©tal pYseal 'Y'ear City of - Palm Special Ending General Debt llelray School Beach Taxing Total September 3E1, kind Service Beach District County Districts All 2000 6.9100 D.744fl 7.6500 9.0434 ~F.6000 1.5720 22.965fl 2001 7.26D4 0.6900 79500 8.9180 4.60x0 1.7170 23.1850 2002 7.3700 0.5300 8.0000 8.9480 4.5500 1.8470 23.3450 2003 7.440fl D.S640 8.0000 8,7790 4.5000 1.8230 23.1020 20[14 7.5200 0.4800 5.0000 8.S71D 4.3910 1.8270 23,1890 2005 7.4500 O.S500 8.0000 8.4320 4.7677 1.7970 229967 20D6 7.4500 4.5500 8.0000 8.1460 5.4464 1.7770 23.3294 2007 6.8600 0.44(10 7.3404 7.8720 4.28D0 i.667fl 21.1190 2D08 6.1449 0.4334 6.5783 7.3560 3.9813 1.5140 19.4296 2009 6.3900 0.4604 6.8504 7.2510 3.9656 1.6215 19.6885 Tax rate limits -Tan mills per Florida Statute 200.081 (one mill equals $1 per $1,000 of assessed valuation). Scape of tax rate limit - Na municipality shall levy ad valorem mixes far real and tangible personal praperty 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"/o Nevember; 3°l"December, 2% January; 1 % Febr¢ary Penalties for delinquent - 2.5% after April 1, increase .5% each ten days; max7mum 5"/° Tax collector -Palm Beach Gaunty Tax collector's eommissian -None 117 ~. ~ pp a U 'a ~ ~ b ~~ ~ ~ ~ Q `/ ry ~I N ~` ~ O ~ h ~ N A a~ o o ~~,~ ~ E v" ~~ C O f+1 w w U ~ ~ y O ~ ~.~ tV '~ N m b ~ FK ,~ ~ O m v p ~_ y 4~ ~~d ~" '~ d Yui P ~ ~ ~ C N v~ O N y 'd m a ~ •4 F ~ w 'tt ~ ~ ~ ~ ?~ ai C ~ ~ A/ 0 0 0 0 0 o e o a N~ U M~ Obi T~ h~ ~C O ON~p N r.--~[~ 00 ~ A+ M r-s ~p r D tp op N M ~ VY M UD b O~ ~ ~ N Y1 ~ N b 41 00' C7 M C7 rN~n a~rt~~n vtna, ranv n+nav tc~o ss G7 O Q ['/1 C`[ M tyl' N V1 QO .-r Ta 01 6~ O l'~ O~ Ch [~ n^~ 00 ,ry ~ ~D O~ M 1p © ~/1 ~--~ N et v~ ao e}' ~ 00 H ~ ni ~i7 r N ~ M ~~ 'd' ~ N O~ iD M ~ M O~ 00 01 OD d- O OO 6 M h Oa Oi Oq DO V1 ICI! a~oooooooa o d- r ~o ++-~ ao 00 00 o e. rn . . orrn~~n+~-~~v M c*s ~ d~ O 4 O 4© O 4~~ - - ~O .w N M ~eY ~ ~C 1~ oo O+ Q _ - op W M O r ~~O}}~ ~+ 'd d- l~ a0 oM0 ~ ~n O ~ a0 co Vl C? ul C¢J M oo .ti tp .-. tiD ~ N ~b N ~O ,-y .--~ 00 h .--e .--i ~p ww rn r~7 ~h ~Y 'cr M M M M N N ~--~ ~ rvi ~ as ~~omov~nirnNw~o~o© r vm.~ fl°o M G~ M ~ a0 ~ N o0 op l1 tp ~O h O l~ vl r-I Vl N N M +--i Kl y m 14 M O O M M N V1 M V~ +-~ 00 U N ~t m ~ 1~p h Yl ~ dam- [~+1 ['mil [~V O Q ~ N 64 V3 `F~s ~ ~# U .~ 6t O O~ C? ~+ O d b o P. N N N N _ ~. t. U ~ ~ ~ ~ ~ ~ :q ~ -may. W m ~ W ~ Fir F~ ci ~ ~ m ~~ ~ ~ ~~ ~ ~ ~, ~ o ci '~ ~ -d ~ U x ~b o ~ " b ,~ ~ b i ~ ~ '~ O ~ CJ ~ ~ N 1+~ N ~ ~ L~ 0 N +~ ,~ r O ~ ~ s. *' f-..~ ~ '~ W a cd ~ ~ ~ ~ ~' # it [% `(J ~ ~ '--~ ~ ~ ~ ~ lye. ~ ~ VJ r~ q ~ „~„ m ~"` id U] w `~ ~ ~ p 0 D ~~w~~~a~io~a~r~~r~~~~` .~ m CrTY bP TlLLRAY Bli'ACH, [' (,ORIDA Propet7y Tax Levies and Collections Last Ten F'iscaT Pears 'i'ota! Collections l~scal Year C~irreot Percent Aelinquent Property as a Percent Pnding Net Tax Tax of Levy Tax 'Tai ©1' Current September 3{!, Le * Collections Collected Collections Collections Levy 2000 $23,465,518 $23,345,095 99.49% $ 74,076 $23,419,171 99.80% 2001 26,105,220 25,968,855 99.48% 73,040 26,041,895 99.76% 2002 29,084,111 28,938,206 99.50% l1S,S26 29,053,732 99.90% 2003 32,099,240 31,953,508 99.55% 46,171 31,999,679 98.69% 2004 36,399,203 36,309,822 99.75% 70,069 36,379,891 99.95% 2Q05 41,606,999 41,514,649 99.78% 56,409 41,581,058 99.94°/a 2006 49,828,444 49,'758,932 99.86% 58,388 49,827,320 100A0% 2007 59,150,165 59,021,614 99.78% - 59,021,614 99.78°la 240$ 55,452,218 55,213,846 99.57% 88,991 55,302,$37 99.73°l° 2009 54,234,643 53,745,390 99.10% 238,917 53,484,307 99.54% Note: All propexty taxes are assessed and collected by Palm Seach County without charge #o the City. Collections are distributed in full as collected. * Tax levy, net of allowance for diseattnts. 119 0 a ~1 ~ ~~ W ,~ Q ~ C '~ A N w o~ Q `~ ~ y a ~, ~ c~ ti ~ ~ ov ~ O ~n ~ ~n oo .-a d~ m rn to on tp t~ r d '~"' ~ ~nvnc~v~~raonv~ A ~ ~ A O A O O O O O O O uz +n [3~ c3, N~ O N N ~ vF ~ ~ ~ LT ~t O ~--~ M M M O N l~ W ~[ ~ ~ rn M~ m m m cn d~ M N ~ d v k ~ ~ a ~ a '~ +~~+d~t°onm~~~ n y, m M © .-~ oo ~ ,~ oo t- a. Ft ~D c~7 m ct N ~ Q~ M O~ ~ ~* d~ 4~ O t~ oq o0 u1 op ~ [~ b F7 i~.e OD l~ E~ O~ N Vl O l0 1D ~"~ Ali y '~ ~ b ~C N ~ ~# O ]' V~ L4 b ~ oo O oo rn rn o, N *-~ q .--i .--e 54 ~ .--~ O OO O r+ +-~ 'V' M M +--E d' ~h N ~ Os !~ l 'cY O o0 ~ G ~ ~ ~ Y1 ~!'1 N Ory ~D O i ~ 00 N ~ d N N M M o3 0~ M N~ W ,~ ~ ~ ^ ~ ~ O ~ M ch ~ ~--~ .M-~ !-+ .n ~ O fir. ~ m c~ a~ d ~ 3 t7 t~ N ao Ci vi ~ rn ~ 00 ,--~ N .-~ \O V1 O ~' M ~ LT ~~ y G a>~nN vnrnrn~ v-`tinM q4 ~ ~ a~~~~mm~~rni cfl ++ +~,, ~ ~ ,~-c OHO c*~y N N ~r1 eNO ~ t7 0o rn N [ M1 co c~7 0~ +n a n ~ ~" ~ ~ w-i }p N V~ o0 6 tl~ ~ 00 00 p~.q ~ ~ ~ ~ M ~ ~ ~ O~ ~ ~ ~ N ^ ~ i c,R .~ O T+ OO O ~l'~ LO M 00 N ~ u ~ ~ M t~ ~t O~ on n, N C^- Q' y ~ O N i^ N ~o [ ~ t~ [~ ~ ~ ~ DSO 4~D ~ ~ KNi O O~ d N O M oo ~n ra C? ov ~ v~ ~n ~h y ~ ~ N o0 M o0 ~ 00 (~ 00 O~ E~ ~'.. FM N --+ ct N N w w M m M '~. F~. 69 7 ~ A O Q O O 0 0 0 C?. C7 C7 C7 0 0 0 0 0 0 0 0 w © O O A 0 0 0 0 O C? C7 ~ 'p .~ vi O v'i Y1 O Vi vi © © vi Q 0-0 ~ ~--~ ~ O O ~ ~ O 01 n e~T' 0 N ~-+ ~-+ ~ N m M m m N 64 ~ °coaooc~©040 ~ ~ o©©c>ccooga ~~ N N N N N N N N N N O N .--~ ~ ,.~ ~ ~ ~ .-~ N •..• N n n v~ ,--~ V~ 6 N O. ~ M CT VZ 01 . ~ y„ m ~ +, cal oo d ~i ~ m N n ~t ,--~ _ M M M N •r1' V7 if7 IC! V ~' R'. ~ ~ Q 64 ~ ~ a Int~ooo,oo~naoa, N O N i~ M 00 O~ t0 N Od O LP ~ >rT d~ OG O M N l~ ~ ~~~ lp ~QiO ~D ~O~D ~( ~ . i cl.~ y bA a ^N ~ ~ rL+ ~"~ ~ ~ e ~ ~ a ~ 0 0 0 C+ ~y ~ L4 ~ ~ 01 O w+ M .-w ~ .--1 n ~D d w YS ~ ~ In ~ ~ n In tt m m ~~ E h PC.,1 o o a o 0 0 0 0 0 0 ~ ~ U >~ d' ~ 01 d0 tl1 W m lLJ C7 OO N . - ~. - O ~ v7 M q en N N ~D ~ Q N 9? ,G rh M Q N M ~--s ~ O OO ~ y ~ ~ ~ ~ ~ o ~~Fa ~ of rz O~ vi ~ .- hi t~1 Ch lnonl ~rnl ~ a i ? . ~ e..r~l n n rntr ,-+zn~~rm~M~a~ ~ .. ° ~; Mm~~ In~ooooo00 ~ ~ . ~ ~ 4-1 o c~ ~ - o ° o ° ~aoQ° ° _ . r. ~ o ~` o o oc a o ca 000000000 0~ ray Iri O Iti vi O ~i vi G U >ri ir7 v7 O M [V (\ ~O ~O LO ~ ~ rp ~+ 5 ~ ~ t~ 4 tiD ~ ~ O [ ~h 0 C + , ~ ~ ~ ~ ~ 6i OO l Oi t~ ~O m '-1 6i U ~- - - 64 ~ ~ 'G as . ~-1 O ~ ~ ' u 1 1 1 1 1 1 ! 3 1 1 ~ C~ ~ v ~ + ~ ~~• .~.~ o ~' ~ ~~ ~ ~~ 1~.~ ~ Q 0 0 0 0 0 0 0 0 0 0 O O O O O p O O O O •~ N p ~+ !i y„ C4 O O O O O CJ O O O O d M V ~ ~ ~ b M v'1 a m N N ~ op ~D ~D .~ ~ ~ ~ .~rnr Q.o o. c~o.~cr ~ }~1yy~~ i~""1 N ~ ~ N~~ +^~ N M M M M N ~ ~ ~ ~ `~ o ~ ~. O ~ ~ 6!9 ~ 1~ ~ ~ O ~ m ''~ A y ~ ~ U ~ y ~ ~ .~ ~ O ~ o 'y"~ k ~ O r-I N [t} tY' V7 SO n oo IT . Ln" ~ ~-, ~ o ~ m~ ' cscara©c~aooa C7 C C O C+ 6 0 0 CI F., ~ ~ ,~'~ N N N N N N N N N N y ~ N Z CYTY OF DELRAY BEACH, FLORIDA Direct ancl' tverlapping tiovemmerztal Activities Debt September 30, 2009 Percentage Amaunf Applicable to Applicable to Tatal Czty a€ City o€ ©utstandi~ng Delray Beach" Defray Beach Direct: Ci of De1ra Beach $ 23,465,000 100.00% $ 29,645,000 Overlapping: Palm. Beach County 270,150,000 5.00% 13,507,500 Palm Beach County School District . _32,835,000 5,00% 1,641,750 Total overlapping debt 302,985,000 15,149,250 Total direct and overlapping debt payable from ad valorem taxes $ 332,450,400 $ 44,794,250 Population 63,789 Total direct azMtl overlapping debt per capita ~ ~ ~ . ~ - $ 702.23 u~ Estimates based on 2000 ratio of assessed taxable values. Nate; The City of Delray Beach has no legal debt margin. Source: Fina~zce Department, City of Delray Deach, Florida Palen Beach County Praperty Appraiser School Board of Palm Beach County 122 CITY o1~ D~zunX BEACH, FLORIDA Wafer and Sewer Pledged Revenue Coverage .Last 7`en Fiscal Years Fiscal ~ Year Gross Revenue (1) Operating Expenses {2) Revenue Available fax Dept Cnverage Current Uetst Service Current Cnverage 2000 $ 21,070,554 $ 12,683,495 $ 8,387,059 $ 3,947,642 2.15 2001 20,S98,I90 10,254,472 10,443,718 4,153,440 2.Si~ 2002 21,432,405 12,244,207 9,188,198 4,823,x90 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 (4) 28,04p,630 19,288,632 8,751,998 4,845,913 1.$1 2007 (4) 30,747,7] 1 20,432,772 10,314,939 5,338,475 1.93 2008 (4) 30,315,366 17,953,965 12,361,401 5,584,]14 221 2009 (4) 34,538,57$ 1$,981,078 15,557,500 5,945,474 2.62 (1) Includes interest revenue and rents (does not include capital contributioxts). (2) Excludes depreciation expense, interest expense and amortization expense. (3) The reductitm of debt service is dux to the partial refunding of the 1993 Water and Sewer Revenue Bonds. {4j Excludes expenses totaling $3,316,740, $3,437,756, $8,053,985 and $3,085,995 in Fiscal'Y'ears 2006 through 2009 respectively. These amounts reflect expenses far the Soutb Central Regional Wastewater Treatment Plant (SCRWTBD) which is a jait~t venture in the City:s financial statement, which relate to projects funded by bond proceeds. 1.23 CITY OF ~ELRAY BEACH, FLC}RIDA Principal Employers September 30, 2009 fiscal Year 2(1119 Employer Tenet Healthcare Corp/dba Delray Medical Publix Supermarkets JFT Flue Inc. Amnoco Services Ed Morse Ael~ray Tayata ICia Home Depot Delray Motors Lincoln Mercury Mitsubishi Pinecrest Rehabilitation Hospital South County Medical Health Center Totals Percentage aC `C©tal City Employees Rank Employment 1,5I S 1 N1A 432 2 NIA 42~ 3 NIA 400 4 NIA 35fl 5 NJA 334 fi NIA 301 7 NIA 30fl 8 NIA 300 8 NIA 30fl 8 NIA 4, 654 Source: Florida Agency for Worl~'orce Innovation (AWl} Nate: Data is not available for 1999 Note: Total City Employees - 814 NIA: Information is not available. 124 CiT~ o>t DRT~RAY $11ACH, ~.ou~aA DemogrApitic and Economic ,Statistics Zast Ten Fiscal Years County Estimated Yar Capita Total Unemplay- Fiscxl City County Persona[ Personal Median School meat Year Populafion~f Popnlationtf} lncome~ lnevmet3i Agee Enrollmentt~~ Ratet~ 2Up0 60,020 1,131,184 $ 40,044 $2,403,440,880 NIA 10,141 5.3% 2401 6t1,64S 1,154,464 41,90? 2,541,450,015 N!A 8,550 6.3% 2442 61,527 1,183,197 42,430 2,610,590,610 N!A 8,321 7.6°/a 2043 62,578 1,211,44$ 43,626 2,730,b27,828 41.8 8,186 7.1% 2004 63,439 1,242,270 43,830 2,780,531,370 41.8 7,852 6.3"/a 20115 63,888 1,265,900 44,050 2,814,266,400 41.8 8,652 3.S°/a 2006 64,095 1,287,967 44,518 2,553,3$1,210 41.7 8,100 3,1°/a 2007 64,360 1,295,033 46,630 3,001,106,800 38.1 7,539 3.5% 2408 64,220 1,294,654 55,311 3,552,()72,420 42.5 7,807 5,5% 2004 63,759 1,2$7,344 59,147 3,772,927,983 43.2 7,945 11.5% Data Sources: (1) The Papulativn data is from the U'. S. Bureau of Census as ofApril for the year 2000 & fine University of Flarida, Bureau of Economic Business far all other years. (2) Business Development Board of Paim Beach County. Data is for Palm Beach County, Florida. Information is not available for the City. (3) Estimated based on County per capita personal income and City population. (4) The School Enrallment is from the Palm Beaal~ Cattnty Schaal Baard. (5) The Unemployment hate data is from the U.S. Department of Labor, $ureau of Labor Statistics. NlA; Information is no# available for these years. 12S CITY OF DELRAY B11ACH, +~OIi.1D1# . Full-time Equivalent Crovernment Employees by Function Last Ten Fiscal Years Fiscal Year 2000 2401 2002 2003 2004 2005 2006 2007 200$ 2009 General Govez~zx~ent 64 ~ 66 66 65 6$ 56 69 7I 71 69 = Public Safety j Comzx~unity Improvement ~ 3 3 4 4 4 4 5 S 4.5 5 1?lannib.g & Zoning 13 1 S 15 15 15 15 15 17 16 16 Building Inspection 2d 20 20 20 20 21 21 23 21 24 Cade Compliance 16 16 16 15 17 I7 17 I7 I7 1$ Law Enforaezz~.ent 229 234 234 237 233 234 235 238 238 236 1?ire Cnntcal 138 139 144 144 148 149 154 154 154 1S4 Community Development Black Grant 8 9 9 5 6 6 5 7 7.S 7 Insurance 3 4 4 4 4 4 4 4 4 4 City Garage 1Q 14 10 11 12 12 12 12 12 12 Physical Environment I'ubl~c Wanks 22 22 22 24 24 25 2S 25 25.5 25.5 Engineering 7 7 7 7 7 7 8 8 7 7 Sanitation 3 4 4 4 4 4 4 4 4 4 Stormwater Utility 6 6 6 6 6 5 6 6 6 6 Parks and Recreation 89 93 94 98 98 108 108 114 115 113 Water & Sewer Utility 103 107 1D7 108 110 114 115 117 117.5 117.5 Total 734 755 752 769 776 792 804 822 820 814 126 r•t T ~ ~D Q~ ^ vl ~ ~ .may Q ~+[ M O w 1}~~~ s V O ryry~~ -~r, .i7 ti i t .~ ~ ~~ A ~ r ~ i G4 `' [~ ~ ~ F .r U Uti ~ 1 47 ~ . m ~~~ C 0 U C3 N M ~fi ~D ~ ~ vl ~ ~ ,[+t ~ O .--i M M Ol ~ ~ O~ H Vt [~ n ~ ~ - N ~' w _~ .--~ N ,~ Gj i3 .v.~ O 41 m M ~ u7 ~ co N d" O ~ ~ ~ T/] p ~ N ,'~ ~ W m .b A a~i A ~ ~ cn ~ vp ~ Oo ~ N o ~ .n. ~ W q ~ ..w N ~ ~ ~ ~ ~ O T ~' a eta ~~ao NNON~ a ,o ~' ~a ~ o ~ .~~A~~ V O ~O ~ oo M N 4 0o n ~ {!~ •~ ~ bA q ,N°f O~ N N .-. .F~+3 ~ ~. z ~ ~~ ~ ~'~~~~ ~~~~ 'd- y~ 4p .~N-a oo N N 4 N ~ ~~~-yy `n ~ ~~ ~ ~ H H U ~ ~ O ~} tG ~ ~ ~ ~ 44fl rte-,', ~ ~ U c~~ ~ Ord ~~ao tiosra~~ ~ ~ ~~"~ opv °k' ;... •~ ~ z z ~~~ ~~ ~~ o ~ ~ ~ ~ ~ ~ C7v3~~ w a~ ~-d f ~ ~ ~ U y ~ ~ ~ ~ ~ ~ ~ $, ^tl 3 ~ ~ ~ ~ ° y g~ 0 ,b `~ ~ ~ H "per V N v! ~ E'~ }QR]ic ~ ~FN~ ~ ' d '~ a W -•-l ~ 'C~7 LC ~ Vl p L+ a ~ ~a3 ~~~ ~~~ ~ ~ ~ ~~~ wV ~ ~ ~ yy,, cr ~ O .~ .^~ N ~„~ . ~ o ~ rn ,fir' ~ ~ ~ .k t°~i ~ ~e ~ ~ ,a c> .Pi. ~ ~ m ~ ~ ~ ~ ~ °a as ~ m ~ ~ o ~~ O VS (~ L L~-i ~I ~ ~W ~Q Q~ VJ ~"~ S~ 'C V Wa ~ Qd ~ ~ ~ a ~ a ~ ~ CrrY o~ DELRAY EEACH, +~ORIDA Operating Indacafors by Function Lasf Seven Fiscal Years Fiscal Year T~tnCsan 2003 2UO~ Zoos xoo~ 2QO7 coos Zoos Public Safety Police Physical arrests Traffic violations Fdre Number of calls Parks and Recreation 3~ibrary Circulation Programs offered Program attendance 1(,CiSgrC .~er'V1CCS Yautlr athletic participants Canxp program participants Class participants WaterlSewex' Utility Wafer custa~ners Water main breaks Sewer customers Sewer main breaks Avg daily water cQnsumptian (thousands of gallons) 2,486 2,476 2,444 2,875 3,108 3,161 2,534 12,8$0 14,471 12,040 13,928 14,962 10,8 82 11,249 10,744 11,960 11,591 12,024 11,772 12,410 11,905 253,835 233,106 227,820 228,871 257,656 270,590 274,611 625 642 650 910 1,112 1,287 1,224 20,818 22,742 20,056 32,873 32,852 35,116 33,770 927 1,904 2,343 2,655 10,597 19,537 20,965 670 365 358 322 625 561 699 14,376 14,007 11,090 IO,b34 15,093 19,662 24,700 19,436 19,750 20,135 20,437 2D,963 21,056 21,156 NIA NIA NIA NIA NIA 434 442 19,300 19,600 20,000 20,400 20,900 21,006 21,088 N!A NIA NIA NIA NIA 4 3 11,930 10,963 12,746 12,348 11,602 10,040 10,944 Sources: City depamnenfslDelray Beach Public Library N/A -Tine following data is not available: Public Safety - Parlcibg violations Sanitation -Refuse & Recyclables collected (tans) Roads & Streets -Street Resurfacing {miles)IPot holes Repairs Information prior to fiscal year 2003 is not available. 128 ~: ~n ~n ~ ~n ~ ~ ~ ~ ~ p 0 0 . ~ ~ ~ ~ .~ ~ y O ~ N' U U O ~ N ~ ~ {o~.F,} ~ v N N N Iii A iii m N ~ W ~ ~„i` `~' p sue. O ~ ~ ~ ~ a~i ~ p 0 W~ ° ~ •~ v U + ~ ~ [ i v O q w ~.~ a ~ 69 U .17 ~ a V U ~a " U ~ ~ a t 1 ~~ O O ~ O O ~ O O A t7 U~ ~ 0 0 4 p VJ S~9 W tes`7 ~ ~ 6~9 6~9 69 6~9 & } b4 ~ ~ ~ 6N9 r+3 V3 N ~ ^ O ~ 0 ~ ~ ~ ~ a '~ ~ 0 n3 ~ ~ ~ ~ ~ ~ ~ ~ ~ ~ ~ ~ ~ ,~'' ~ ~ ff' ~ ~ ' ~: 'd m a i a cn p, ~ -~ .~ .~j` S7 °~ ~ N ( l ~ b 'L'~ ~ ~ y °~ ~~ A A G - O . q ~ ,~ -~ ° ~ N Ci N 3 ~ t~ y ..-~ b~tl6 'Cj ~ 'per O ~ .p wa ~S ~ ~~~Q~~ C7 ,,,y ° . ~ W ° i O b w ~ ~ ~ ~ A a , a -, a . v . r .-. ~ H ~ d ~ °~ ~ o ~ ~ ~ ,a w p, ~ S-' ~ ~ P3 Wye "a W ~ ~' y~ ^: +~ ~ ~ ~ ld ~ ~ ~ ~ ~ ~ ~.yJi ~~ 1 ~ v .}Yy. .Yi I--t -c i ~~+1 VJ ~ ~}y ~„i ~ Q ~1 ~Y ~i 1~ ~ FBI w ~ N 7 ~ ~ ° '~ w ° ~ ~ w ~ w w ~ 7 ~ C ~ w C u l O W ~ ~ W o ~'Q ~ ~ ~ i a va u ~ ~ ~ ~ o g s°~ ~.], ~ O ~ y N ~ ~ A+ ~' ~ id ~ ~ A ~ C ~ ~' ~ V O ~ ~ ~ o ~ ~ ° ~ ~ a ~ ,~ ~ -4 ~ ~ ~ ~n ~ a? ~, ~ `~ S ~ ~ ~ A C ~ i r~ rq i=. 4 f [~ 1 <C t ! ~ CT N w ~om~~~ance Section Cam., I}0~~'I`Ei'~T, I~VIl~iE, PQR~ER & VEZ~, P,A, CFItTfF7EH PT.7$I,TC ACCOUN3'AN7'S W[LL[AMK.CAi-FA, ~-,CPA 5gS 50lTIH Fi,AG7.Eit-3t7VE, SS7PF"E 900 ~ I~SRS 7AL![S M CO7T>~i, CPA N'ES'!'7'ALM $TACIT, FL 33903-5948 A7v~R7CAN ThIS'777V3'EOF JUHI•I G C6UR7NEY, CPA, ]P CElri7~.D P[JSC3CAC[;OS33~lY'A79'7'S -AVTD S. ^O]J7EN, CPA 7'FJ.A,f ]701+TR(Kl) R3~9292 7AA4E5 B. HITIC.'fgSCH. CPA FAX(55l) 832-9455 F7ARIDAIAIS7T7'l7!'>; OF JO]~.H. T~V774E, CPA C70t'II1733~ P[7$CiCAf'COS RTl'ATT1S 7AA1@S F. AtC7LiPN, 7V, CPA iafoa.mm T7{oMAS A PENCP., IR., CPA ~ SCOT'P7:.7'017TTiR, CPA n~A7z7tn-~, C,PA . Tiadependent Auditor's Report nn Internal Central Over Financial Reporting and on Compliance and Other Matters Based on an Audit of Financial Statements Performed tax Accordance With GoyernmentAuditing Standards To the FIonorable Mayer and City Commission City of Delray ~eaclk, Florida We have audited the aecozFipanying financial statements of the governmental activities, the business-type activities, the aggregate discretelypresented componen# uni#s, each major fund andthe aggregate remaining fund ikzforation of the City of Delray Beach, Florida, as of and for the year ended September 30, 2009, which collectively comprise the basic financial statements ofthe City afDelrayl3each, Florida, and have issued otu'report thereon dated March 24, 2010.Our repartwas modified to include a reference to other auditors. We conducted our audit in accordance wink U.S. generally accepted auditing standards and the standards applicable to financial audits contained in Govemrraent Auditing Standards, issued by the Comptroller General of the United Sta#es. Other auditors auditx:d the financial statements of the 1?olice and Firefighters' Retirement System Fund, a fiduciary fund of the City, and the Delray Heath Dawntawn Development Authority, a discretely presented component unit of the Ci#y, as described in our report on the financial statements of the City of Delray Beach, Florida. This report does not include the results ofthe atlzer auditors' testing of internal control aver financial reporting or eornpliance and other matters that are reported an separately by those auditors. Internal' Control Over Financrai Reporting Ia planning and performing our audit, we considered the internal control over financial reporting of the City of Delray Beaclk, Florida, as a basis for designing our auditing procedures far the purpose of expressing our opinions on the financial statements, but not for floe purpose of expressing an opinion ontlie effectiveness of internal control aver financial reporting of take City of Delray Beach, Florida. Accordingly, we do not express an opinion on the effectiveness of the internal control over fsnaneial reporting of the City of Delray Beach, Florida. A deficiency in internal control exists when the design or operation of a control. does not allow management or employees, in the normal course of performing their assigned functions, to prevent, ar detect and correct imisstatements on a timely basis. A material weakness is a deficiency, or combination of deficiencies, in internal cozktrol, such that there is a reasonable possibility that's materialmisstatement ofthe entity's financial statements will oat be prevented, ar detected and corrected on a timely basis. Our cozksideration of the internal control aver financial reporting was for the limited purpose described in the first paragraph of this sec#ion and was oat designed to identify all deficiencies in internal control over financial reporting that might be deficiencies, significant deficiencies or material weaknesses. We dad ikot identify any deficiencies in internal control over ftnanciaJ repork'ang tlkat we consider to be >.naterial weaknesses, as defined above. Compliance aa~d Other 11latters As part of obtaining reasonable assurance about whether the financial statements of the City of Delray Beach, Finrida, era free of material misstatement, we performed tests of its compliance with certain provisiosis of laws, 130 regulations, contracts, and grant agreements, noncompliance with which could have a direct andmaterial e$'ect on the determination of financial statement amounts. However, providing an opinion on compliance with those provisions ryas not an objective of our audit, and accordingly, we do not express such an opinion_ T'he results of our tests disclosed no instances of noncompliance or other matters that are required to be reported under Government lfuditarrg Standards. We noted certain additional matters that we reported to management iz~ a separate management letter dated March 24, 2010. This report is intended solely for the information and use of the City Commission and zxsattagement of the City of Delray Beach, Blorida, federal and state awarding and pass-through agencies, and the Auditor General of the Mate of Florida and is not intended to be and should not be used by anyone other than these speci#ied parties. ~t ~~ t~rYlaL ~~ ~ ; ~~, March 24, 2010 I31 CITY OF DIsT_.RA.Y BEACH, FLORIDA SCHEDULE OF EXPENDIT1J3tES OF FEDERAT• AWARDS ANA STA'T'E FINANCIAL ASSI5TAbICE Far the Fiscal Year Ended September 30, 2009 Grantor/ CFDA. Program Title Number Federal Awards U.S. Departmen# of Housing and Urban Development Direct Awards Couununity Development Block Grants/Eniifleruent Grants 14.21$ Communrity Development Block Grants/Erttitlement Grants 14.218 Pass-through Award from Palen Beac14 County Community Development Black Grants - State's Program 1~k228 Total tJ.S. Departmerst ofHousi~tg and Urban Development 1I.5. Department of Interior' Direct Award Clean Vessel Act 15.516 U.S. Department of Justice Bureau of Justice Assistance Direct Awazds Bulletproof Vest PartnQrship Program 26.607 Edward Byrne 1Viemoriai Justice Assistance Grant Program 26.738 Edward 73yrne Memorial Justice Assistance Grant Program 16.738 Total U.S. Department of Justice U.5. DeparlmentofTranspurtatian Pass-through Award from the State of Florida Florida Department of Transportation Highway Plarming and Construction Homewood Blvd. Bicycle Lane Project 20.205 National Highway Traffic Safety Administration Pass-through Award Irom the State of Florida _ Florida Depaxtrnent of Transportation Occupant T'ratection - Childl'assenger Safety Program 20.602 Total U.S. Degarbment of TzAnspartatian U.S. Department of Hamelan~d Security Direct Award l~blic Assistance Grant 97.[}36 Pass-through Award from the State of Florida Department of Pinanrial Services l-Tomeland Security Grant PragA~m 97.Q67 Total U.S. Department a£ Tdameland Security Total Federal Awards Contract/Gxantar Number B-O6-7VIC-12-0033 8-07-1V1C 12 01733 2009 Program Transfers to Expenditures 5ubrecipienEs $ 39,274 $ 0 428,150 90,836 07DB-3V-1€I-60-O1-Z€Yl 837,873 0 805,302 90,836 110458 33,308 0 2006-BQ8X06132740 ~ - - 3,559 2007-DJ-BX-Q509 60,576 2008-DJ BX-D118 11;534 75,669 AP806 IC2-09-17-22 06-WIr-&K~10-60-02-654 08DS-60-13-00-16-373 500,000 25,037 525,037 1,916 0 0 0 0 a 0 0 87,259 0 89,075 0 $ 1,528,391 $ 90,836 (Continued) 732 CITY OF I1EI;RAY BEACH, Fl.Oltll)A SCHEDtTt "F OBES~'ENDITURES pF itEBE[tAL A'~A1LDS AND STATE FINANCIAL ASSIS3`ANCD {Continued) For the Fiscal Year Ended Sepkember 30, 2©09 j Grantor/ CSFA Contract/Granter 2009Pmgram Tran~fersie State Project Title Nx~xnbex Number T~xpenditures Subrecipients State Financial Assistance Plaricla Aepartmenf of L'nvironmental £'xotectian Pass-through Award from Soutlc Florida i Water 1vlanagenvieiiE Districk VYater Protection and 5ustair~aba7ity Program 37,666 4600001677 $ 832,900 $ 0 Florida Department o£ State Direct Award - I~istorical Preservation Grant 45.031 50906 4,750 0 Florida Flousing Finance Carparatiun Bisect Award State Plqusing initiatives Partnership Program 52.901 28.07 ~ 570,b07 - 0 Florida Department of Transpnrtatian Direct Awazds Florida Highway P,eautificat3or~ Councd Grant 55.x03 AOQ54 4&,087 0 Public Transit Service Development Program 55.07.2 AI'367 59,892 0 Public Transit Service Development Program 55.012 APD52 4,470 0 Iritertxtadal pevelopment Program 55.014 AOi755 ~i7,491 0 Total Florida Department of Transportation 157,940 0 Florida bepartinent of Health Pass-through Award ixom Palm Seach County County GxantAwards b4.005 C80 X13,880 0 TataE State Pinancial Assistance $ 1,610,077 $ 0 . See notes to schedule of expenditures of federal awards and state financial assistance. t33 City of Delray Beach, Florida i Notes to Schedule of Expenditures of Federal Awards and State Financial Assistance . September 30, 2009 Y. Sigt-ificant Accounting Policies The accompanying Schedule of lxpenditures of Federal Awards and State Financial Assistance is presented in accordance with the provisions of the U.S. Oboe of Management az~d Budget (©MB} Circuklr A-133, the 1 h'lorida Si~zgle Audit Act and Chapter 10.550, Rules of the Auditor General. The Schedule of Expenditures of ~ Federal Awards and State Financial Assistance presents the federal awards and state financial assistance expendedby the City of Delray Beach, Florida, for the year ended September 30, 2004 on the modihed accrual basis of accounting. Because the schedule presents only a selected portion of the operations of the City of Delray Beach, Florida, it is not intended to and does not present the financial position or changes in net assets of the City of Delray Beach, Florida. 2. 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 substantial compliance with the terms of the grant agreements and applicable federal and state laws and regulations, 134 PORTII~ c~ VLLG, P..~,,. GER"I7FiID rIJEILEC ACCOUNTANrS WILLTAM IL CALEB, IR., CPA SRS SOlJ1'E{FLAiiFF1tDRIV$ SUITE9~0 I,OEBSIuE.COIIF~J,L~A ~ 1vE5I'PALMHE4CFL,F7,3340159ae JOI~AL C. CRiIR'ET9EY, t~A, ID PAVED S. WN'1'SI7, CPA T'F.iFl710TTH (SGl) x34242 ]AMES B.13[3'FLT-ILSON, CPA FNC (56L) 632-4955 tOHE,Ii.I.EVINE,CPA 3AMt5 F. MULLEIv',N, CPA iufu@cdkpa.cvm T[30MAS A. r1NC1; IR., LTA 5COIT L PORTE94 CE'A MARK L3.YEII-, LPA Independent Auditor's Report on Compliance With. Requirements Applicable to Each Major Federal Program and State Project and on Interrlal Control Over Compliance in Accordance with OMB Circular A-133 and Chester 10.550, Rules gt,the Auditor General 'I'o the Honorable Mayor and City CamnllSSiOn City ofDehayBeach, Florida Compliance 1r~iv1L9E1L5 AM[SLICAN INSI'LTEI7EflF f PR it FZRt] PUBLIC ALLYII,R~77'ANf'S FT,OF76A ]I~sITI'LII'E OF CERT>P"3k`[) PUBLIC ALY.~UNfAMS We have audited the compliance of t11a City of Delray Beach, Florida, with the types of cazrzpliance requirements described in the 11.,5: Office of .Management and Ruclget (OMB) r~ireular a-133 Compliance Supplement, and the requirements descnibed in the Department of Financial Services' State Projects Compliance Supplement, that are applicable to each of its majox Federal programs and State projects for the year ended September 34, 2009. The major federal programs and state projects of the City of Aelray Beach, Florida, are identified in the summary of auciitar's results section- of the acwmpanying Schedule of Findings and Questioned Costs. Compliance with the requirements of la~x+s, reguiatioz~s, contracts and grants applicable to each of its major Federal programs ar-d State projects is the responsbility of the management of the City of De$ay 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 corr~pliance in accordance with U.S. generally accepted auditing standards; the standards applicable to financial audits contained in Goverrrrrzent Auditing Standards, issued by the Comptroller General of the United States; OMl3 Circular A-133, Audits of States Local Governments, and Non Profit Organizations; and, Chapter 10.550, Rules of the Auditor General. Those standards, OMB Circular A-133 and Chapter 10.550, Rules o, f the Auditor General require drat 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 ox 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 detemunation 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 far the year ended September 30, 2444. However, the results of our auditing procedures disclosed instances of noncompliance with those requirements, which are required to be reported in accordance with. OMB Circular A-133 and Chapter 10.550, Rules of the auditor General, and which are described in the accompanying schedule of fizrdings and questioned costs as items 2009-1, 2449-2, 2009-3, 2009-4, 2009-5 and 2049-6. .135 Ireterrzal Cantroi (3ner Compliance The management of the City of Delray Beach, Florida, is responsrble far establishing and maintaining effective internal control aver compliance with requirements of laws, regulataans, contracts, and grants applicable to Federal programs and State projects. In planning and performing our audit, we considered the City's internal control aver compliance with requirements that could have a direct and material effect on a major Federal prograu~ or State project in oxder to determine our auditing procedures far the purpose of expressing our opinion on compliance, but not for the purpose of expressing an opinion on the effectiveness of internal control over compliance. Accordingly, we da not express an opinion on the effectiveness of internal control over compliance of the City of-eh-ay Beach, Florida. A carttrol deficiency in an entity's internal control ovex cozx~pliance exis#s when the design or operation of a control does not allow management or employees,vr the normal coarse 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 sign~ccrnt deficiency is a control deficiency, or combination of control deficiencies, that adversely affects the entity's ability to administer a Federal program or State prnject such that there is more than a remote likelihood that noncompliance with a type of compliance requirement of a Federal program or State prnject that is more than inconsequential will not be prevented or detected by the entity's internal control. A mate~riai weakness is a significant deficiency, ar combination of significant deficiencies, that results in more than a remote likelihood that material noncompliance with a type of caxx~pliance requirement of a Federal program or State project will not be prerented or detected by the entity's internal control. Chu 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 t7~at 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 defused above. The City's responses to the findings identified in our audit are described in the accompanying Schedule of bindings and Questioned Costs. We did not audit the City's responses and, accordingly, vie express na opinion on them. This report is intended solely for floe information and use of the City Commission and management of the City of Delray Beacll, 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 oat be used by anyone other than these specified parties. March 24, 2010 136 C'fl'Y OF DELRAY BEACH, FLORIDA i scz~vul.E of FINDINGS AND ~~srIONED casTS - - ~ ~ - ~DRAL AWARD PROGRAMS AND STATIC FINANCIAL ASSISTANCE PRQJECTS i ~ ~ For the Fiscal Year ceded September S0, 2009 _ 3 SECTION I- SDMI-7ARY QF AUDTI`OR'S RESULTS . Fi`riarrcial Sfafemenfs - Type of auditor's xepart issued: ~ ~ ~ Unqualified Opinion I_ Internal COIItrOI OVeI flnaneial Fepart~ng: ~ Material weaknesses} identified? Yes X No - Signifcant deficiency {ies) identified that are not considered to be material weakness? Yes X None reported Noacompliauce material to financial s#atements noted? Yes X No Federalttw~rd Programs and State F`inanciaiAssistance Proiecfs Internal control aver major Federal Award Programs and State k'inancial Assistance Frojects: Material weaknesses} identified? Yes X No Significant deficiency (ies) identified tk~at are not E considered to be material weakness? Yes X None reported - Type of auditor's report issued an compliance far majox Federal Award Programs and major State Financial Assistance Projects: Unqualified Opiratan Any audit findings disclosed that are required to be reported in accordance with Section 5I0(a} of DMB Circular A-133? X Yes T No Any audit findings disclosed that are required to be reported iu accordance witlx Rule 1,0,557, Rules of the Auditor General? X Yes ~ No Identipxcatiari nfMaior Programs: Major Federal Award Programs CF'DA N©. U.S. Department of Hansing and Urban Development Direct Award Community Development Black Grants/Entitlement Grants 14.218 U.S. Department of Transportation Pass-through Award from State of Florida l~ loxida Departz~aent of Txansport~.tion Highway P1anIIing and Construction Homewood Blvd. Bicycle Lane Project 20.205 Dollar tlixesl~ald used to distinguislx between 't'ype A and Type B federal award programs: 300 000 Auditee qualified as Iow-risk auditee? Yes X No 137 CITY OF DEI.RAY l3EAC1i, FLQRIDA SCHEDULE OF FINDINGS AN D QUESTIONED COSTS - FEDERAL AYJARD 1~IZOGRAMS AND STATE IiINANCIAL ASSISTANCE FROj1JCTS (Continued) Fox the Fiscal Xeax lJnded Septembex ~D, 2DD? SIsCTION I ~- SUIIRVIAR'S'' OF AUDITOR'S RESULTS {Continued) Maior State Financial Assistance Proiects State CSP'A No. Florida Department of Environmental Protection Pass-through Award from South Florida Water 1Vlauagez~aent District Water Protection and Sustainability Program 37.066 P`lorida Housing Finance Corporation Direct Award State Housing Initiatives Partnership Program - ~ 52901 Dollar threshold used to distinguish between Type A and Type l3 State financial assistance projects: 300 ODfl SECTION II -FINANCIAL STATEMENT FINDINGS None SECTION III -FEDERAL AWARD PROGRAMS AND STATE FINANCIAL ASSISTANCE PIt03ECT5 FINDINGS AND QUESTIONED COSTS Frnding Questioned Number F'rndin~ _ Costs U.S. DF~'ARTM1aNT OF HOUSING AND URBAN DEVI?LOPIVIEN T 213U4-X Community Development Block Grant CFDA # 14.218 {Allowable Activities) Grant No. 8-137-MC-12-UQ33 C3nlanown Criteria: The City develops an annual Action Plan which is approved by the graartar and prescribes haw the grant funds will be spent and allocated to the various types of programs. Condition: The City's expenditures far housing rehabilitation totaled $264,621 for the year ended September 30, 2009. Of this amount $182,805 was expended for salaries and benefits for two City buiidirtg inspectors and a secretary and $4,274 was expended for overhead casts. The remaiz>htg balance o£ $77,542 was expended for contractor costs far housing rehabilitation. Ef,~eet: The grant funds expended for contxact cad direct costs to rehabilitate housing were 29% of the total housing rehabilitation expenditures while salary, benefits and overhead costs reimbursed to . tl~e City were 71 °~o of the total housing rehabilitation expenditures. 138 CITY OF l3ELAAY BEACH, FLORIDA SCHEDULE OF FINDIi~1GS A1~ID QUPS'I SONED COSTS - FEI}EP.AL AWARD PROGRAMS AND STA`T'E FINANCIAL ASSISTAI~ICE PROJECTS (Contir-ued) For the Fiscal Year Ended September 30, 20[39 SECTIQN III -FEDERAL AWARD PROGRAMS AND STATE Fu-IANCI.AI. ASSISTANCE PROJECTS FINDINGS AND QLTESTIC3Nl1D COSTS (Coutiuuued) Finding Questioned Number Findin Costs Cause: The City as allocating 100% of the time for two inspectors and a secretary to the housing rehabilitation program expenditures. .Population and 1#ems Tested: Auditor received azt e~enditure listing for this grant anal summarized the total administrative cxpenses and compared to what was budgeted by the City. ktecommendation: We recommend that tl~e City assess the aruourtt of each employees' tune charged to the housing rehabilitation program in relation tQ the actual rehabilitation contract work performed on client homes. Grantee Response: As referenced in CF 570.202(6)(9) rehabilitation services is art eligible cost which includes staff salaries and related expenses to market rehabilitation funds; process applications and counsel owners, tenants, contractors and other entities; underwrite and service loans; perform work write-ups and cost estimates; and manage construction, 2009-2 Cajoa~nn~x~nrity Development Black Grant CFDA # 14.218 (Allowable Costs) Grant l~lo. &-07-MC-7 2~-0033 Cr~fej•ia: The City develops an annual Action Plan which is approved by the grantor and prescn'bes how the grant funds will be spent and allocated to the various types of programs. Condition: The City's Program Year 4 Action Flan for 2008-2009 expendafizres for CD Objective S states that the City will "Utilize CD13G funds io install sidcwakk irnpraveznents vrithin the northwest/southwest neighborhoods.. "' Bxpenditares for the year ended September 30, 2{109 charged to CD Objective S totaled $65,223. Of this amount, $60,911 was paid to a contractor for road impravemez~ts. Tl~e expenditures charged to CD Dbjective S for sidewalks also included $1,265 for maintenance expenditures for a vehicle that was used by the City's Building Inspector. The City dad not provide any supporting documentation for the vehicle maintenance expenditures. Effect. Road improvements were not approved in the Action PIan and were therefore not allowable. Vehicle maintenance expenditures were unsubstantiated. Total questioned costs for these items were $62,177. 62,177 139 CITY OI? DRAY I3EACH, FZ01ZTl~A SCHEDULE OF FINDINGS AND QUESTIONED COSTS - FEDERALAWARD PROGRAMS AND 5`l'ATB FINANCIAL A.SSISI'ANCE PttOJEC3'S (Continued) Far the Fiscal. Xear Ended Septelx~.ber 30, 2009 SECTION III - FEDERAE A'VVARD PR©GRAMS AND STATE I'INANCIAL ASSISTANCE 1=RO,IECTS FINDINGS AND QUESTIONED COSTS (Continued} Finding Questioned Number Findin CQSts Ccnrse: Unlalown. Population acid Items Tesietl: Artditor randomly selected 18 traIlSactians from the City's expenditure listing for this grant and at least one _ transaction from each department. There were less thou 30 transactions. in total, excluding payroll and administrative related transactions. Recommendation: We recommend that the City request approval from the grantor far the expenditures related to road improvements and vehicle maintenance. If not approved, the City should reizx-burse the program for the unallowable costs. Grantee Response: The City amended the FY07~-OS Action Plan: pursuant to federal regula#iozzs, reallocatixag $100,000 of unused funds. from that fiscal year for infrastructure improvements which includes streets, curbs, water/sewer lines and/or sidewalks. This action was approved by the City CaIllmisslQIl an March 17, 2004. Again the activity of infrastructure improvements ineludes but is not limited to streets, curbs, waterlsewer lines and/or sidewalks. Staff cannot locate the expenditure listed as a disallowable expense for vehicle maintenance associated with a building inspector position within the account activity listing. 2009 3 Community Development Bloclr Grant CFDA # 14.21$ (EarmarldnglAllowable Costs) Grant No. B-07 MC-12-0033 Unk~town Criteria= The grant agreement and Action Plan requires that no more than 20% of the overall grant funds can be used far adtninistrataon. The City's Program Year 4 Action Plan fox 2008-2fl09 expenditures for CD . Objective 1 has $104,980 budgeted far adrIlinisfratian. Condition: Tile City's Program Year 4 Action Plar€ for 2008-2D09 expenditures budgeted $104,980 for CD Objective 1 for administration. Effect: Tl~e City's expenditures for adninistration for the year ended. . September 30, 20D9 included $97,61D in Division 1961 for salaries, benefts and overhead for the Department Coordinator and $49,448 m . Division 1963 for salaries, benetxts and overhead far a secretary. Tile total administrative expenditures were $147,058 which exceeded the _ 20% limitation on adrinistration expenditures. 140 - CTIY OF DELRAY BEACH, FLORIDA f - SCHEbULE OF FINbII~TGS AN D QTJ'RSTIONED C05'I5 - -_ FEDERAL AWARD PROGRAMS AND STATE FINANC[AI.. ASSISTANCE PROJTCTS (Continued) For the Fiscal Year Ended SEptember 30, 2009 SECTION III -FEDERAL AWARD PR©GRAMS AND STATE k'JNANCIAL ASSISTANCE FRC3ECTS FINDINGS ANTI QIIESTICNEI) COSTS (Continued} Finding Quesiinned Number Fiadin Costs Cause: The City was unaware that secretarial casts for housing - rehalailitatian shanld be considered administrative expenses. Population arrd Items Tested; Auditor xeceived an expenditure listing. for this grant and surnmarixed the amount of administrative expenses.. Recommendation; We recommend that the City limit administrative expenses to no more than 20% of the #otal grant expenditares. Grantee Response: The City's annual allocation of CDBG funds for FY ll8l09 was $581,160, the 20% allowable administrative expense would have been $116,232. As indicated by the CAPER Report, generated through the IDIS system which monitors the expenditures and reimbursements of CDBG activities; the City expended X90,895.63 an . Flauning and Administration. This amount represents a percentage of 15,72. Salaries associated with housing rehabilitation activities are project costs not a ministration, U.S. DEPARTMENT OF TRANSPORTATION 2009-4 Highway Planning and Construction - IInmewnod $Ivd. $icycle Lane Project - CFDA # 20.ZOS {Davis Bacon} Grant No. AP80G ~ Cl'nlznown Ca•iterirr: Entities shall include in their construction cantiacts pursuant to the Davis-Bacon Act, a requirement that the contractor comply with the requi.reznents of the Davis-Bacon Act and the Department of Labor (DOL) regulations. The contractor is requixed to submit to the City, for each week irr which any contract work is performed, a copy of the certified payroll and statement of corrrpliance. Condttton: Auditor requested a copy of the contractor's certified payrolls. The City could not initially produce the certified payrolls. The City was able to provide copies of the payroll certifications from the contractor, but the certifications were sentldated December 2009, during audit field wank rather than dated in April through June 2009 when the contractor work was pezfoxoaed. Effect: Unla-own. 141 C;I'l'Y O.F DEI,RAY BEACH, FI..C)RIDA scH~DU;.E ol~ F1NDZNCS AND c~U~sTlolvED cows - ~DERAL AWARD PROGRAMS AND Si'ATE FINANCIAL ASSISTANCE PROJECTS (Continued) For the Fiscal Year Ended September 30, 2009 SECTION III -FEDERAL AWARD PR©GRAMS AND STATE FINANCIAL ASSISTANCE PROJECTS FINDINGS AMID ~iTESTIQNED COSTS (Continued) Finding Questioned Number Finding Costs Cause: The City did not have the contractor submit payroll certifications when the contractor submitted reimbursement requests. Popu7ntian and Items Tested: Auditor randomly selected three transactions from the Gity's expenditure listing for this grant totaling $395,292 which represented 77% of the total grant expenditures. Recommendation: We recommend that the City requests a copy of the certified payrolls when the contractor submits for reimbursement and . _ review the certified payrolls for compliance with the applicable Davis Bacon and DOL requirements_ Grantee Response: The City eoneuFS with the audit finding and will obtain the certified payrolls timely in the future. lik,ORIDA l-IOUSING FINA,NG>s GdS~ORATION ZO€19-5 State housing Initiative Partnership (SHIP) Program CSFA # 52.901 (Alla`vable Aeti~vities) ... - $ 2,604 Criteria: The cost of adrninisterixxg the SIB program xnay not exceed 10% of the overall program distribution (total tsudget} plus 5% of the program incorrze deposited into the trust fund. Cflndition: The Gity budgeted and was allowed $57,601 for administrative expenses of the program, but spent $60,205 for administrative expenses, or $2,604 over the allowed amount. Effect. The City is not in compliance with the amount of administrative expenses allowed for this prograxz~. Cause: Unknown. Popr~7ation and Items Tested: Auditor received an expenditure listing for this grant and suzxunarized the total administrative expenses_ Reeommendalzon: Vile recommend that the City litxtit administrative expenses to no morn than IO% of the total grant expenditures. 1 ~t2 CITY OE DELRAY BEACH, FLORIDA SC:IIb:DULE OE FINDINGS AND QUI?STIONED COSTS - FEDERAL AWARD PROGRAMS AND S'T'ATE l?INANQAL ASSiS'I'ANCE PROJECTS (Continued) Far the Fiscal Year Ended September 30, 2009 S~CTIQN ~ - FEDERAT, AWARD PROGRAMS AND STATE FINANCIAL ASSISTANCE PROJECTS FINDINGS AND QITESTIONED COS'T'S (Continued) Winding Qnestaoned Number Fiudin~ Costs Grantee Response: In fiscal year 0&-09 the City received $621,636 plus $733.43 program income. The allawable administrative maxir~im amount was $62,163. There eras au unused balance of $1,95 8 remaining in the fund account FLORIDA DEPARTMENT OF' ENVIRONMENTAL PROTECTIaN 2009-6 LVater Protection and Sustainabiliity Program CSF'A Na. 37,066 (Reporting) Grant No. ~60000I677 Nome Criteria: The grant agreement requires that on or before December 31, 2008; March 31, 2009; and Tune 30, 2004; the City shall provide a Prajeet Status Report as prescribed by the grant agreement (Article 4 - Funding Payments and Reporting). ConditiQn_ The City did nut timely submit the report for the quarter ended December 31, 2008, which was doe December 31, 2fl48, but was not submitted until February 9, 2fl09. Effect: The funding agency would riot be informed of the project status_ Cause: The City did not timely submit the report. Population and Items Tested: There are four reports that were required to be submitted (three progress reports and a fusal close out report). The City timely filed three of the reports and one report was not timely filedlsabmitted. .Recommendation: We reconunend that the City timely file the progress reports as prescribed by the grant agreemen#. Grantee lesponse: The City concurs with the audit finding and will submit progess reports timely in the future. 143 CTIY Ole DELIZAY )i1ACH, FLORIDA SCHEDULE OF FIN DINGS AND QUESTIONED CDSTS - FEDERALAWARD PIZQGIZAMS AND STATE FINANCIAL A5SI5TA]VCE PROTECTS (Caantinuedj For the Fiscal Year Er-ded September 30, 2009 SECTION IV -PRIOR YEAR FINDINGS k~nding (questioned Number Fi[x~diu~ Costs U.S. DEPARTMENT OF HOUSING AND URBAN DEYELOI'MF,I~TT 2008-1 Community Develo~rinent Block GrantsfEntiflement Grants CFDA No. 14.218 Grant No. B-Q6-MC-12-0033 Grant Year 200b Canditivn: The City did not obtain periodic certifications for employees whose salaries and wages were fully charged to the CDBG program stating tl3at the employee worked solely on that program fDr the period covered by the certification. The City also did not have iaxne allacations or activity reports to support the salaries and wages charged to the CDBG program and other programs for employees who worked an r~Itiple programs during the year. Recomrr:endation. we recommend that the City establish a tizx~.e reporting system to support the salaries and wages chargeable to each Federal program anal obtain certifications for employees working solely pn OIle prDgram. Current Status: The recamxnendation, was adopted and na simitar dings were noted during the 2009 audit. 144 C~i4 aF DELAR4 ~EERAY B~,4C.H ,~ fl AEl-l~rt4erica l<il~ ~, 'I 3p3 Z~nI CORRECTIVE ACTYON PLAN The City of Delray Beach, Florida, respectfully submits the following corrective action plan for the fiscal year ended September 30, 2009. The finding from tine schedule of f~dings and questioned costs for the year ended September 30, 20D9 is discussed below. The finding is numbered consistently with the number assigned i~ the schedule of findings and questioned costs. A. FINDINGS AND QUESTIONED C05T5 -FEDERAL PROGRAMS Findi~ug Niusduer Finding U.S. DEPARTMENT OF HOUSING AND URBAN DEVELOPMENT ZOU9-l Commodity Development Slag Gx-ant C>RDA ~ 14.218 (Allorval~le ActiWities) Grant No. B-07-MC-12-0©33 Criteria: The City develops an annual Action Plan which is approved by the grantor and prescribes how the grant funds will be spent anal allocated to the various types of pragrarns. Condition: The City's expenditures for housing rehabilitation totaled $264,621 for the year ended September 3D, 2DD9. Of this amount $182,805 was expended for salaries and benefrLs far two City building inspectors and a secretary and $4,274 was expended for overhead costs. The remaining balance of $77,542 was expended for contractor costs for housing rehabilitation. effect: Tl~e grant funds expended for contract and direct costs to rehabilitate housing were 29% of the total b.ausing rehabilitation expenditures while salary, benefi#s and overhead costs reimbursed to the City were 7I % of the total housing rehabilitation expenditures. Cause: The City is allocating l00% of the time for two inspectors and a secretary to the housing reHabilitatiar~ program expenditures. Popuiatian and Items Tested: Auditor received an expenditure listing for this grant and summarized the total administrative expenses and compared to what was budgeted by the City. Recommendation: We recozzauend that the City assess the amount of each employees' tuxxe charged to the Housing rehabilita.#ion program in relation to the actual rehabilitation contract work performed on client homes. ,~, r~~ l-, 115 tr~i~~~L~~ a ~~~~~~~li~ei= ~ i~7 zi5KT~} ~ ~.r3~~~~~~i~ : ~1 ~V i~V fS~i~~ ~ ~'~l f=': ~Y ~«~-~[~ A. FIl1rDINGS AND QDFSTIONBD COSTS - ~DBRAD 1'1R.GGR.AM~ (Continued) 1~ding Number ---- _ -- Finding 2009-1 Action Taken: The Neighborhood Services Division believes they are in compliance witlx no {Continued) furthex action needed. 2009-2 Conun.unlty Development Block Grant CFDA # 14.Z1S (Allowable Costs) Grant No. B-07-MC-X2-0033 Criteria: The City develops an annual Actiozi Plan which is approved by the grautox and prescribes how the grant funds will be spent and allocated to the various types of progra.rns. Condition: The City's Program fear 4 Action Plan far 2008-2009 expenditures for CD Dbjective S states that the City will "Utilize CDBG funds to install sidewalk irnpmvernents within the x~orthwestlsouthwest neighborhoods..." F~cpenditures for the year ended September 30, 2009 charged to CD Objective S totaled $56,223. Qf this amount, $50,911 was paid to a contractor for road improvements. The expenditures charged to CD Objective S for sidewalks also included $1,266 fox maintenance expenditures for a vehicle that was used by the City's Building Inspector. The City did not provide any supporting documentation for the vehicle maintenance expenditures. Effect: Road irztprovements were not approved in the Aetion Plan and were therefore not allowable. Vehicle maintenance expenditures were unsubstantiated. 'Total questioned costs for these items were $52,x77. Cause. Unlmown, Population and Items Tested Auditor randomly selected 18 transactions from the City's expenditure listing for this grant and at least ane transaction from each deparlrnent. There were less than 30 transactions in total, excluding payroll and administrative related trausactioz~s. Recommendation: We recommend that the City request approval from the grantor for the expenditures related to road improvements and vehicle maintenance. if not approved, t#Le City should reimburse the program for the unallowable costs. fiction Taken: The Neighborhood Services Division believes they are in compliance with no $nfiher action needed. Conmm~nity Development Bloch Grant 2009-3 Ck`DA # 14.218 (J;armarlanglAllorvable Costs) Grant No. B-07-MC-12-0033 Criteria: The grant agreement and Action Plan requires that no more than 20% of the overall grant funds can be used for administration. '1'b.e City's Program Year 4 Action Plan for 2008- 2009 expenditures for CD Objective 1 has $101,980 budgeted fox adzninistratiorL Condition: The City's Programm Year 4 Action Plan for 2008-2009 expenditures budgeted $104,9$0 for CD Objective I for administration. l46 A. FINDINGS AND QUESTIQNED CDSTS -~ FEllE12,A,L PROGRAMS (Continued} Finding - Nurnber Flndin 2009-3 .Effect The City's expenditures fox admuustratian for the year ended September 30, 2009 (Cnntiuued} included $97,510 in Divisinn 1961 far salaries, benefits and overhead for the Department Coordinator and $49,448 in Divisioo. 1963 for salaries, benefits and overhead for a secretary. The total admuzistrative expenditures were $147,OS8 which exceeded the 20% limitation an administraiinn expenditures. Cause: The City was unaware that secretarial casts fnr housing rehabilitation should be considered administrative expenses. Population and Items Tested: Auditor received an expenditure listing for this grant and summarized the amount of admic~istrative expenses. Recommendation: We recommend that the City limit administrative expenses to na more than 20% of the to#al giant expenditures. Action Taken; The Neighborhood Services Division believes they are in. compliance with no furtr-er action. needed. U.S. D1;PARTl1~ll/NT Olt TRANSPORTATION 2£109-4 Highway Planniiag and Consfiruction- l~omewood Blvd. Bicycle Lane Project CFDA # 20.205 (llavis Bacon) Grant No. AP80G Criteria: Entities shall izaclude in their construction contracts pursuant to the Aavis-Eacon Act a requirement that the contractor caxnply with the requirements of the Davis-Bacon Aet and the Department of L,abox (DOl-,) regulations. The contractor is required to submit to the City, for each week in which any contract work is performed, a copy of the cexti.~ed payroll and statement of compliance. . Condition: Auditor requested a copy of the contaactar's certified payrolls. The City could act initially produce the certified payrolls. The City was able to provide copies of the payroll certifications from. the contractor, but the certifications were sent/dated December 2009, during audzt fzeld work rather than dated in April thxaugh June 2009 when the contractor work was performed. Eject: Unknown. Cause: The City did not have the contractor subzxiit payroll certifications when the contractor submitted reimbursement requests. Population and Items Tested: Auditor randomly selected three transactions from the City's expenditure listing far this graazt tota.lin;g $395,292 which represented 77% of the fatal grant ea-pez~ditures. l47 A. FINDINGS AND QIIESTIONED COSTS - kLDPRAL PROGRAMS (Continued) Finning N amber Findin 2{I©9-4 Recommendation: We recommend that the City requests a copy of the certified payrolls when (Continued) the contractor submi#s for reimbursement and review the certified payrolls far compliance with tl-e applicable Davis-Bacon and DOL requirements. Action Taken: 'The F,nvironmenta! Services Department is aware of the Davis-Bacon and DOL requirements aztd will ensure that a certified payroll will be received and reviewed prior to any reimbursements. ' B. FIl~DINGS AND Qi`IESTIONED COSTS -STATE FINANCIAL ASSISTANCE PROJECTS FLORIDA HOUSING FINANCE CORPORATION 2flfl9-5 State l3ousing Ynitiatzve Partnership {SIITP} Prvgraln CSFA # 52.90. {Allowable Activities) Criteria: The cost of administering the Sklll' program may not exceed 10% of the averall program distribution {total budget} plus 5% of the program income deposited into the crust fund~ Condition: The City budgeted and was allowed $57,601 for administrative expenses of the program, but spent $50,205 for administrative expenses, or $2,604 over the allowed amount. Effect: The City is not in compliance with the amount of administrative expenses allowed for this program. Cause: Unknown- Population and 1'tems Tested: Auditor received an expenditure listing for this grant and summarized the Iota! administrative expenses. .T~ecorramendatian: We recommend that the City limit administrative expenses to no more than 10°fo of the total grant expenditures. Action TaTsen: The Neighborhood Services Division believes they are in compliance with no further action needed. 148 B. ~`iNDINGS AND QUESTIONED CASTS -STATE FINANCIAL ASSISTANCE PROJECTS . (Continued) Fxndiz-g Number _-_ _ ___I+Sndin~ l?LQRIDA DEPARTMEriT Ol? I;NVIRONIVf>/N'TAL PROTECTIQN 20096 Water Proteeti©n and Sustainability Program CSFA No. 37.066 {Reporting) Grant No. 4600001677 Criteria: The grant agreement requires that on or before December 31, 2008; March 31, 2(1Q9; and June 30, 2004; the City shall provide a Project Status Report as prescribed by the grant ageement (Article 4 -Funding Payments and Reporting). . Condition: The City dad not timely submit the report for the quarter. ended December 31, 2008, which was due December 31, 2008, but was not submitted until February 9, 2009. E, f~"ect: The funding agency wou3d not be informed of the project status- Cause: The City did not timely submit the report, Population arrd Items Tested: There are four reports that were required to be submitted (three progress reports and a final close out report}. The City timely filed three of the reports and one report was not timely filedlsubmitted. Recommendation: We recommend that the City timely file the progress reports as prescribed by the grant agreement. Action Taken: The Environmental Services Department will ensure that grant requirements are met by filing all required reports in a timely manner. if you have any additional questions cancerc.ing this eorrectave action plan adopted by the City, please call me at (561) 243-7D00 Sincerely, - f''~~ 3osegh M. Finance Director 349 L.~R? DQNTEN, Imo, PQRT~R c~ VEAL, P.A. CERTIf1ED PUBLIC ACCOiiME'ANI'S 7VBIJAMK CAIFR,IR., CPA IACi1S M ~fi6M, GSA JOFIN G C6UR'INE7', CPA, 1D DAVID S J)ONCEN, CPA JAtr9s5 8. FIUYYli15D34, CPA J08LFLLEYIIdE, CPA JAMES F. +~sE n.r ter, IV, CPA 9HOMA5 A. PE{4C8, JR., CPA SW7TL POR7'SR, CPA MARKD. VFJI, CPA SR5 SDUIFF FL4GLERDRIVE, Sf11TE 9AP AiPS'['PALMBEACH, FJ, 334fl1-5948 T'EI i~Pf30NE (567) 83Z•9292 FAX (56i) 632A455 iu6@cdkpa.coan Managemen# Letter NsBMBF.ItS AIViGRICAN IN577TiT1'E OF C6Rr1FFE0 PUBLICACCOUNCANCS FLpAIDAIN$77TU[£ pF CE RT`li°SEb P l3$LIC ACCOUNFAIdt'S To the Honorable Mayor and City Corxu~nission City of Delray Reach, Florida We have audited the financial statements of the City of Delray Beach, Florida, as of and for the year ended Septengber 30, 2009, and have issued our report thereon dated March. 24, 2010. 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 Gevel~ament ~luditirtg,Standnr'ds, issued by tk-e Coznptxoller General of the United States and OMB Circular A-133, Audits of States, Local Governments, and Non-Prof€t Organizations. ~Te have issued our lndependent Auditor's Report on Internal Control Over Financial Reporting and on Compliance and Other Matters, Independent Auditor's Report on Compliance With Requirements Applicable to Each Major Federal Program and State kroject and an Internal Control Over Compliance in Accordance with OMB Circular A-133 and Chapter 10.550, Rules of the Auditor General, and Schedule of Findings and Questioned Costs. Disclosures in those reports; which are dated March 24, 2010, should be considered in conjunction with this xanagement letter. Additionally, our audit was conducted in accordance with Chapter 10.550, Rules of the Auditar General, which governs the conduct of local goveznmental entity audits performed in the State of Florida, and unless otherwise required to be reported in the report on compliance and internal controls or schedule of findings and questioned costs, this letter is required to include the following information. 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 Developnaeut Authority, a discretely presented component ulrit of the City, as described ix~ our report on the financial statements of the City of Delray Beach, Florida, This report does na# include the results of the other auditors' testing of internal conixol over financial reporting or compliance and other rn~atters that are reported on separately by those auditors. 1. Section 10.551(1}(i)1., Rules of the Auditor General, requires that we determine whether ar not corrective actions have been taken to address findings and recommendations made in the preceding annual financial audit report. We noted that our recommendations related to comzxxent (20081) Community Development Block Grants/Entitlement Grants, (2008-2) Utility Billing, (2008-3} Purchasing, (2008-4) Capital Asset Disposals, and (2008-6) Payroll included in oar management dated April 2, 2009, were implemented by the City in the current year or no longer apply. 150 2. Section 10.554(1}(i}2., Rules of the Auditor General, requires our audit to include a review of the provisions of Section 218.415, Florida Statutes, regarding the investment of public funds. In tannectian with our audit, we determined that the City complied with Section 21.8.415, Florida Statutes for the year ended September 30, 2409. 3. Section 10.554(l}(i)3., Rules of the Auditor General, requires tb.at we address in the management letter any recommendations to improve financial management. In connection with our audit, we have the foIlowing recommendations: 2009-7 Bank ReconcilaatRans Criteria: Back reconciliations should agree to amounts recordedan the general ledger. Condition: We noted that the balance per the September 20(19 bank reconciliation for the pooled cash account did not agree to the axnaunt retarded in the general ledger. Effect: The reconciled general ledger balance per the bank reconciliation did not agree to the general ledger by approximately $2,60fi. Cause:.A journal entry was recorded to adjust pooled cash in the general ledger after the bank reconciliation had been prepared and approved. Recommendation: Bank reconciliations sbnuld reflect adjustments posted to the related account(s) and agree to the general ledger balance. Once adjustments to the reconciliations have been made, any revisions should be properly documented and approved by management 2008-5 Information Systems Criteria: lnterna3 contxols should provide for access security, protection and recovery of computer data. Condition: Qur review of the City's information systems identified several areas where the existing practices could be improved, as #'ollaws: Access and Security: . Vendor passwords should be changed regularly (every three to six months} or kept disabled until access is needed and then deactivated again. • Failed logons should be thoroughly reviewed on a scheduled basis tQ look for repeated attezz~pts to gain access to an account. Additionally, logons after hours should be reviewed for suspicious activity. The person reviev~ing the report or activity logs should sign and date it #o docuxnettt their approval and retain it for verifieatiou as part of the audit • Periodically, an a routine schedule at least annually, reports should be prepared of all users with access to payroll, accounts payable, utility billing and other key systerus for review by the Finance Director or Assistant Finance Director, who should verify that the people with access to the critical systems are appropriate. The person reviewing the report should sign. az~d date it to document their approval and retain it for vcrifitation as part of the audit Data Protection and Recovery: • Changes rolled out to the i5eries production environment should be documented in a simple but formal manner. The person preparing the report or logs of any changes should sign anal date it to document their approval and retain it for vtrif~cation as part of the audit. 151 • Offsite backups should be encrypted to prevent inapprapxiate use of the data ixi the event fibs backup is lost ar unauthorized access to the backup is obtained. l~ecommendatiara: ~Je recommend that the City consider the above changes to fin-ther enhance the access security, protection and recovery of computer data. 4. Section 10.554(1)(1)4., Rules of the Auditor General, requires that we address violations of provisions of contracts or grant agreements, or abuse, that have an effect on the financial statements that is less titan material but more than incnnsequentiaL See Schedule of Findings and Questioned Costs for cam;vents related to contracts or grant agreements. 5. Secdan 1fl.554(1)(i)5., Rules of tits Auditor General, provides that the auditor may, based on professional judgment, report the foIlowing matters that have an inconsequential effect on financial statements, considering both quantitative and qualitative factors: (1) violations of provisions of contracts or grant agreements, fraud, illegal acts, ar abuse, and (2) control deficiencies that are not significant deficiencies. 2.009-$ Expenditurees Over Ayprapriatinns We Hated that the City's expenditures exceeded the final~budgeted appropriations far the year ended September 30, 2009 for the several General Fund functions as indicated in Note 17 t4 the financial statements. We recommend that the City review expenditures in relation #o budgeted amounts during floe year and amend the budget as necessary to prevent over-expenditure of budgeted categories. 6. Section 10.554(1){i)6., Rules of the Auditor General, requires that the nanne ox of#xcial title and legal authority far the primary governitrent and each component unit of the reporting entity be disclosed in this management letter, unless disclosed in the notes #o the financial statements. This information is disclosed in Note 1 to the financial statements. 7. Section 70.554(1)(i)7.a., Rules of the Auditor General, requires a statement be included as to whether or not fire local governrr-ental entity has met one or more of the conditions described in Section 218.503(7.), Florida Statutes, and identiftcatiott of the specific condition(s) rrtet. Tn connection with oux audit, we determined that the City did not meet any of the conditions described in Section 218.503{l), Florida Statutes, as of and for the year ended September 30, 2009. 8. Section 10.554{l)(i)7.b., Rules of the Auditor General, requires that we determine whether fibs Aztztual Financial Report for the City for the fiscal year ended September 30, 2009, filed with the Florida Department of Financial Services guxsuant to Section 21$.32(i)(aj, Florida Statutes, is in agreement with the annual financial audit report for the fiscal year ended September 30, 2009. We noted that the amounts reported in the Annual Financial Report were ixi substantial agreement with the audited financial s#atements for the year ended September 30, 2009. 9. Pursuant to Sections 10.554(1)(i)7.c. and 10.55b(7), Rules of the Auditor General, we applied financial condition assessment procedures as of September 30, 2009. rt is management's responsibility to monitor the City's financial condition, and our f naucial condition assessment was based in Bart on fire representations made by management and the review of financial information provided by managemen#. The results of our procedures disclosed no matters that are required to be reported. Tine responses by the City's management to matters identified in our management letter are described in the accompanying Response to Management fetter. We did not audit the responses of the City and, accordingly, we express no opinion on them. 152 Pursuant to Chapter 119, Florida Statutes, this management letter is a public record and its distribution is not lix~aited U.S. generally accepted auditing standards require us to indicate that this report is intended solely far the infarmatian and use of the City Coz~amission az~d rnaxaagement of the City of Delray Beach, Florida, and the Auditor General of the Mate of Florida and is nat intended to be and should nat be used by anyone other than these specified parties. ~~ f~A. March 24, 2010 153 E6FP OF ~~tflR4 I~ECRAY BtJ4tr1-l r u ii n l~tl ~ri8f[C~~1ijf ~~ ~! ~~3 2~~~:uditar General's Office Local Goverrunent Auditsi342 Claude Pepper Building, Roam 401 111 'West Madison Street Tallahassee, FL 32399-1450 March 31, 2010 Subject: Response to the Management Let#er Gomments Comprehensive Annual Financial Report- September 30.2009 Our response to current year comments and xeconnxnendations are listed below: 2049-1 Cgmmuri Develo meat Sloclc Grant -The Neighborhood Services Division believes that, as referenced in CF 570.202(b)(9}, rehabilitation services is an eligible cost which includes staff salaries azad related expanses to market rehabilitation foods; process applications and counsel owners, tenants, contractors and other entities; uzzderavxite and service loans; perform work write-ups and cost estimates; and manage construction. 20(19-Z Community Develonxnent Block Grant -The Neighborhood Services Division believes the City amended the FY07-08 Action Plop pursuant to federal regulations, zeallacating $100,(]00 of unused funds from that fiscal year for infrastructure improvements which includes streets, curbs, water/sewer lines and/or sidewalks. This action was appxaved by the City Cornmissian on March l7, 2049_ Again the activity of infrastructure improvements includes but is not limited to streets, curbs, water/sewer lines and/or sidewalks, Staff cannot locate the expenditure listed as a disallowable expeztse for ve}~icle maintenance associated with a building inspector position within the account activity listing. 2009-3 Community Develovment Block Grant -The Neighborhood Services Division believes the City's annual allocation of CDBG funds for F`IT 08/0©9 was $581,160, and the 20% allowable administrative expense would have been $116,232, As indicated by the CAPER Report, generated through the IRIS system which monitors the expenditures and reimbursements of CDBG activities; the City expended $90,895,63 on Planning and Administration. This amount represents a percentage of 15.72. Salaries associated with housing rehabilitation activities are project casts not administration. 2009-4 Iii~hway Planniua~ and Construetinn Grant -The City concurs with the audit finding and will obtain the certified payrolls timely in the future. 2009-5 State Ilonsin~ Initiative Partt~ctshi~- (SHIP) Program - In fiscal year 08-09 the City received $621,636 plus $733.43 program income. The allowable administrative maximum amount teas $62,163. There was an unused balance of $1,958 rezaaiping lathe fund account. „2,4149-6 VL'ater Protection and Sustainability Proeraxn -The City concurs with the audit finding and will submit progress reports timely in the future. II^^ 154 tt~~ Cl. ,~. t~_i C ~ '1=4~~~#~~~44fi~E~l: ~ .~I~TC~Ir~T} ~ C4.~'v~l'-~~:7~[_''. ~.'~ f ~~~-~rt ~~Y~ ; C~4 a<ii~~l~~ 2009-7 Banlr Reconciliations -1Voznxally at year end, there are 2 reconciliations. The first bank reconciliation has t all the adjustments and reconciling items listed. Journal entries are made for tlae adjustments, #hen a second reconciliation is prepared which should be "clean" with only bank adjustments such as deposits in transit. At this year end, there was staff turnover and the new accountant made an error in the journal entry. Normally a new accountant's work is scrutinized but due to tha workload and deadlines, only a cursory review was made when the journal entry was approved. As soon as the error was found, mare stringent reviews were implemented. 2009-8 lxpenditures Over Appropriations -- T'he City caueurs with the audit finding and wil] attempt to identify and make budget adjustments to prevent over expenditures in the future. 2005-5 -~ Infortnatlon SYSteuas -"There were several areas in Access and Security that could be improved upot~ All items have been addressed. except far ]ackiag dawn removable storage -not feasible in the work environment. Data Protection and I~ecavery; roost of the changes to the I Series production environment are vendor applied updates, off site back ups are not encrypted due to time constraints. Sincerely, 3osegl~ M. Finance Director misljxns doc; audgen09 l55 Page 1 of 1 ~v m~Mrox~NnUM TO: Mayor and City Commissioners FROM: Linda Karch, Director of Parks and Recreation THROUGH: David T. Harden, City Manager DATE: May 10, 2010 SUBJECT: AGENDA ITEM WS.3 -WORKSHOP MEETING OF MAY 18, 2010 PRESENTATION BY THE BEACH PROPERTY OWNERS ASSOCIATION BPOA OF A BEACH MASTER PLAN ITEM BEFORE COMMISSION The item before City Commission is presentation of a Beach Area Master Plan developed by the Beach Properties Owners' Association. BACKGROUND On November 7, 2009, the City of Delray Beach, the Community Redevelopment Agency, and the Beach Property Owners' Association sponsored a charrette to help develop a Beach Area Master Plan. The charette provided attendees with an opportunity to examine, discuss and make recommendations regarding various aspects of the Beach area, including, but not limited to sidewalks, lighting, landscaping, public parks, public amenities and other streetscape issues along Ocean Boulevard/A1A . The overall goal of the charette was to create a Master Plan to improve and enhance the look of Delray Beach. On March 24, 2010, the City of Delray Beach, the Community Redevelopment Agency, and the Beach Property Owners' Association sponsored a second charrette to review all suggestions and recommendations. httpa/miweb001/AgendasBluesheet.aspx?ItemID~3315&MeetingID-294 5/14/2010 z Q J d W N Qc G a W a z U a w m 2 p~ Q O W N m ~ 0 r-I ~ ~ L.L O t/1 Z W O~ ~ w Q ~ D ~ Q Z = w ~ U ~ Z O~ w w ~ ~ ..ter. 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I I • 5/12/Z01a 'Economic Development Incentives for ~fficeBuildings ® RA '-€LRAY R€dLH- ~ __ Ii ~ Current CRA Grant Programs for Busrresses ~, ~ fiU . 1 u' ' fit. is ~ ~~r .`.'I"~:' S i ;- 1.::. T;. . I~ t ~~}' ~' 1 1'+ d _ I ri_ Fiistonc Fa4ade Easement Grant Program • Burin...,s Lra~~._Ieplnnt A.>_ISt>nce Pr-oglani „u ~pr i i .i Ernnoli~ic Dcvelopn~ent lncentiv~; r ~~l:~.iu~l~it ~~ ~k ~ l 0 ~i, 1 S ~ • ~`4` •~ ~ + ~~ r !~ I.G ~~ra What'Does'the CRA Do? : Tn fnst.^.farid:diri.rtry:nssittmt5c rrdrvrnPnlq Pt of the ,-~rr,mi,~nry F~drvrloprne?rt Area in order tr, e4minatr hl~hL i a~-. i it `Ie'1 r„ r.i - -: ~-- .~afi7.: ', then imprrwng the attr cove rie>s and quality' of Irte 3orth~ h=_nerit of zhe CFA District ohd the:gry „f Delray beach as:a v~hol?. ": F.ii n~q i It t.ip,'il it ~,n ~1tl lr.ir r'rii*F.13~.d ~i~li~{~ce the ~,c l~-s~ ~r~exc a°~ „ccri ~m~._~il,i P~ ~ q si<iil tryr~arn 1 ':i±~~t"a'r " F'~'riu....I(,~.~n(,IPlrnkiug * Lwzra~e ~i`z~nt a w~~ti t't:rnt i=conorni~ Devel~prner~t lrrcerrti~~es rr_tN,_r .,~ r,a lls-- t F ~ 1 ~. W , r,~ f~ d I ~f _9 [+ r.93 t~.=4~r~~l.mlYr fn.r.> ;:. y;_ Item WS.4 ~ ~/~z/zo~.a Economic Development Incentives „(i+~Cfl31t quality ~11S3f1P5S„ "Cflt#Cal t0 CiT[rc~Ct k]USIr~e55e5 that prUVlde: ~J}1S i'~eyU'ith ~,~ fl tl~h S,'r'i'It~Si'f.t~,. i. • .... °kietter paying / k~i~her spilled jahs ...evill lielil slrerr~ilier~ cil~ ~i rJn:,ntii: b~~,~ of tI~P City„ Economic Development Incentives ~~.i•E f.urlcl ~ICISter'$tLlEjy.. [fly ~ t,~{ t t 4LIT a rY 11 (a ~'~Y. r ~ r 41 !_r ), t ~ I1~ ~r rj~Vaiir'7 r l`f I~[~ i'i} tl ice';! ilL ~. r ~7~'; Y. ~.[. r7'c [~,dr1~~ i7 err, ~N~'[''~~t.+Cr l't, ., Econbrr~ic Uevel~prrlent Incentives _ , ~F~~ S , Sturh~rt~~r:~n j ~,{y rrSer~ic p' ~}~ ~ 1 ~ *~ ~"5`{•• n 'ii'i i ~rt.i", ~,~; .y 2`..t:'~~(r~ ~. ~~ ,.-:~ '.1---------' ... _. ... - u4 -q tr.:. ~ ^ a 4:11 j''}Lt1 ~: V y ^ q T rj t _' .. LL .. r ~ t, a~`,_ ~ ~~r~~ ti~;i Economic Development Incen#iyes Li~~4;~, ~,la ci- ~ST~.I DID _ ?~i f, sd~~Ylr. I' C~~ L2F~~{:r3 iRi~ ~ ..li.«l' L11,~;; ,~, r5 ~_ r . I ~~; f.~r :~t 1~' rltk~t ~.Y;ir; a ~_I is}, r,?r:_. tl.'j~ ,i 'Jd r_ I ~ (~, '~Uh.. i-~I.i 'f' it -t':I k~'IF Y.i~ C~. ~~ f. it rf';.Il.l.~ ~ I~~.=..i 'LIt-: rl I!s: :: rlt(i•itr= i}._r ~"yl C"d, kl Dgs!~ntown h4^ster 1'fan; AdarY,et+rq Report;-1'aae F•ti Ccononiic Development Incentives ~,dc~ItF,'~Ll iC~' g~ ~- ~r I r ti. pY ~. ~ ~ ~ r• ~ e. -. ,h...-~ ~...r.17 Item WS.4 ~ 5/12/2010 .:Economic DeveloF~ment Incentives E . !. ~ :-l u ~ „l C_r ;' cif L~rtsi Il Cairl{i' • Challnn~ec in the financial Cnvrrorirrr~nt Ecorloniic Uevelaprnent ln~enti~es 6 r -:~u ;]- j, • LJse Incentives Li3 mane CRA Dlstri[t more desirable - to Office user • Promote occupancyintiieexistingofficebiiildings • Promote construction of netti Class-A office space Nttain a t7elray Be=ch P~-~ ~ li-,~ of a City where Companies tivnnt to be Economic Development Incentives ~ i:~lr .:n:. -t re ~ i •¢inu 11 1 ipa I !HI~I TrIi.E tips' r ur,h ;.~ eflorrdaxnm ~Ilib!!r -it CI ~I I l+~i'r t' It Ir,~,, ~ r r =r r~nFrlr~;,,; 1: 1~~.~r: i~r~rh,=-,iit .~n~rnl-~fr -rl .,i~-i -~ .I„-r ~v~.r-« f11S;inn ~r~~'1_ ld ~ ' rim lal TY hr T. i hu nr.s ' '' J _:iy 1 i! F I lr f f+ In. S r~rh I },~`~'~a"-~'[:5~t )r r]d?1.a' ~.nuulr',ewwrYtlir rgh lk ernl.,.a[nn ~- L]L~i -~~t° uV;.!ui~rl dt~t~nLcr ~F ~c-ii~ya .lu uur ~ E 0LY5EIIff1M Ni0. r ~~~ r-~'~~f !~ r- ' ~ I ~ r i 3 - .~ ~~ i/ .I ~^. s '^ 1; t + I r _ YI ~e V 5 µ~~~ ~"~~~~~^ l l I I F:edeveSa >ment ~Q I I 7 y~~.~ Subarea 5 ~. i , I _~ I ~'a:~~i-- f 4 Jio~ :~ -~ CI ~ 7 i. d rl ~^ ~ FI r . h~IT € '~' wa. s I ~~~ ~, ~ 1~3 Item WS.4 ~ Economic Development Incentives T"r.f~ inrmnr•t:~e I^l f[1. .;'[~ i 1. r? Ii:611 a {k I°! ~-tl . elf i+ E' h_+I t_ Cx ^ 1 I.r71 ~~,'.1 t,. 7:t~'"Sfik,~;lil.Lr F$' .C~+,r.dr~~ t_ R..€,dr. tt. ~. L:q;, L tit, r•p>'.ii! kFT:~•Id~?t l tt:,=• r~r:R1iT:'. ~: 1 Ilt:! e`Ft l ` 4,1v•S:• ~u tr ;i=;,i;F 1 yrn.^.i - a~+I =:I Ir I, , r~:rn~' t I-i'~2Itt,I ^ i; i:a l! r ,r~ir 1'• •.:1 ~1'IE77t fl .I r~l!1f I t~„ I.trY? .At...f ~~ l . Si..Li; R~ E iT~. f.l, ,1"i kl: Economic beve[opment Incentives ~ .--[MIT F :iT. ~. aF,'E"i-f r [E3 .vlkr i tP~:•P . } • create a ntinimum of #i~~e qualifying (5}:jobs • Qualr#yingJobs -wage..7.15%of Ct~unty Average • Preferred Targeted Inefustties: 1 r.il-t f i'n 1 G t, i. rc=.' ,,' ~~. .,r, ,_ -Economic Development Incentives Et ?rE.[~rt,. • 5% of all certifiable annual wages 1D%Ilin roa,.i+ i~?r Lrt~.!.i~» i ci`,`irr ~~:'~ • ZD"~o It ti'v tlltl a.l+''t'It I,y R^',i 1. ..1:[SU t Ott+~- ,s5 n-irf ['.E' F ri ': w..o;?rn -r~ ;~ h...n ~ ~+a:I i.lart.ic.; .. 11~ , . is t t -r i , f+ncnli ~Il.: tILT Jnc entive .ct 1~e aw~f. lleG .~'vf'r a S yt;ar prrioci Economic Development incentives Average County Salary. is publishedlby thc' Workforce Alliance PI3CAverage Salary - 54~,51Q Cfualifying Job Salary: `-$51,186 Economic Development Incentives L.. t ~ :t~:tielt u~_ r_16'hr_I~rarll Lirr,ia5: • Maxfundit;g pcr Contpany = $25DDU0 ::(fur a 5 year Period - $SD,(~00 Per year) • Max Program Fundirig [3er Year $25D,DDD • IV9ax perJok} grant $1D,DOD 1r~cer~trve wild be awarded nn n=- first tome, frrstsen~e basis Item WS.4 ~ 5/12/2010 Economic. Deve#opment Incentives it !•UiaC a'c~:'i F{~n1,L r'?tvl '•IIj Nr-w f f,rnpany hi irzgs 6 qualifying emplbreestiv{th the inRuwlrigsaianes G,C10U U0 :i 4 = 714,000 ?S,DCin UO x 2 = :isn [100,[)(? 7nt, I rjaaUfyrng~~L saltines - $,74,000 F 1Lrt $37,400.U0 $37;400 j ~ .57.460.(10 nor yc~r Economic Development Incentives • Copies of W-2's tc! be silhrnitted eachyear Financial Statements #or l.~re~ious 3 years • Mustci~vn }~rt7pr rty ok~ have multi ynai- lr_ase ['~ii;RA Economic bevelopment Incentives E~. Le.~ t.Ftr, 'tlr ;'artri~r~l~'~r Pr +F;fa'I ~ :~ESk~ LiElrt l,..~`.1 .. ':r t. ,.k.l , i~l k._ ~ ;:a ~CL' :: ~c~f~?t l;f6JPi t5: -Mttlli st~,ry ProEicts'that incliide Class-A Office 5jiare -. 15,000 i~ef SF irl:;, r , I :: a f :~:~ ~~. ~, e:. Economic Development Incentives e~.. ~~.~X ,rit1,: 11 ~.1'11.1'-If 1'~„I'' l: ~l r?rfi .~. Nwi rnn:jriiny hr inos3p qualrfyi~ig emp'soyres wlrle ritalifyr~b,ninual salarlesa•aer'~girrg $60,UCU per employee Cf0,00:T,c 20 $.1.;700,@[`0 $1;~UC,000 x'~ $24fl,Ofl0.00 . +~ am r:~.. ,~I.r ,,., jure~ totaE incentive = $20~,U40 al $40,400.00 uer year Economic Development Incentives C~', I .~'~'+'='rtl~'.1 f'rr N cl-lih Pitrf;?~ti~ !. is-nil`: ~~ CRA to 6cc,urnt: an ~ .rur'!i r ~ ~. ~' ~~,r, an[1 IJruvicEe apj?roxfn~atcly 105 of project finQin~accordinR to the fnlltiving formula: Portion ofCRA Tax-increment x lfi years Item WS.4 s 5/12/2010 r=conomic Development Incentives t=3 C•et~elt~j~ ent C'artnc,•>Ii k~ C' _ i-ci a'r • t7evelnperto r..ontnbute 20%of pro3ect funcrinp • Upon solo of property, prrorrtyof paytticnfwoukd be; 1 ^A~irtg,~ga Ilen Jer' : CRk egwTj rJeve.uper's ertginaE cq mty. : 4 ::dcvc opcrs profit • CRA to receive audited FinancialStatemenis annually One pro)ect Lecornes Iirofitable; repayment of equity to CRA would commence, Economic Development Incentives E, .)w. ~! i)II~-nt P; t ~« I,.l;t: Fm_r:~rl{ Class A {7ffire Building Protect Financeng nv.~ie~r ~ B,nh, 2 C,/, i'"IR~ rs.~,~y. ~~+•d•r, ~~r,. )E 2. ,-r 4u ~k , ~ r r~ ~~s Economic Development Incentives ,,. P.~_r ~ , i _i;~ J I •clci ~~~rr- Irr I r ~ i.l ~ As51st ptnpei~y owners uv~ho need to attract an important tenant to the 6urlding a r ~ Help attract companies that are receivin~StatP and/or County rncentive~ to Delray Beach _. 'Economic Development Incentives ~i..~~ _.ii;,:ITi!'_tI- I~'Ci':~~lih~I:i~'~;rl k^...~s ,ii;t~ .i I • Property taxabke value ~ $1,UGU;000 • Costof improverTEerli = $4,ODU,000 • $4,000,UOQ x U.U1153 mrllage r' 95ib • $43,814.00. • $43,814 x 16 years x0.75 4,._~,. ~.. 't{} • CRA Equityinfusion =approx. 10.5% of project cost t ~:aj~'•°i Economic Development Incentives C ;_i [__:.~rE ill i ., I~ hi 11 ~~I tl~~= F' ~;,r ~~ F'ayfor 20'~ ofthe company's eligible relocaticn cots ~ ., _. Item WS.4 6 5/12/Z010 Economic Development:Incentives I ~~c~ ~ i :`~ , L: ~'I~ci ~ ~, irt: n~i~~ PrG:w ~ r 74 dcil ,.iii! kd. ~E.I t.^:3 i t ('I a ~ .I'~~,": • create a minirnurn cf tvdenty true galifyin~ (~S) jc:7s • Qualifying Jufrs = war 115% nt County AvPragP • Prelerred Targeted ihdu~tries: fr _ _ ~ N'r ~,12ra+ - r - r ~'Pi~ iii S;RA' Economic Development Incentives r} rl'i': .~ .. i :~_.,~ is a;.~~ ~ 7> ,.-~ _. -~ ,,.} r k L V ~_, S k r r , - °, Economic Development lncenti~es i t - i i. 1.1',ip tl'la i° fl t ~fii~E'.l ki tat ti Alow-cost-land Icasc rnechanrsim 4p year period landlease w/ add. 20 year option Q O Land may he purchased at V O anytin7e ~t marketyalue Econom€c Development Incentives • lvlultk Story (lass ,4 Offkce area > 5L'%6 of ~,foject's net fluor akea • Non-residentkat space : 7Ss6, of protect s net floor area • developer/hwldinp ownerequity > ~0'SS of project cost • Tvlust meet Csowntoavn 1wloster Plan Objectives Economic Development Incentives i i 3 W~ E .. .. 7 L r r i. -- r^ ----t ._ W i ,.J ..., _._ .:redo rear n,.,rio m,r.., r~~~u. i Item WS.4 ~ ~/~z/zaa.a Economic. Development. Incentives .rti.23a[wf~ CRA to day off i ~_ i on a bank loan that f nances the imEi~nvements for the business: • 1409 of loan interest would he paid by f_RA for first fivt~ years • Fees & Ioan clo~in~ cost ivould be'paid for equally by barrawer and the CRA Economic Development Incentives ~ t =, to Im^~n,. rrF r.' -~i Tr: „ r~ t rti: 6'T1~iE!.: $SO;OOD Loan at a 10 yearterm & 7 G n `r~r-.t r-,.r - Tota! Loan Interest m $21,755 Total loan interest darrng first five years = $14,E95 Economic Development Incentives C+vlt,_ct;~,~_ 1o assist ne~v ~ existing hnsinesses who wish ta: • improve their existrng space; at • e>;pand into additional space; ^~ • liuildo~rtriewspace€nanewnrexistrngbuildirig Economic Development Incentives ~ ..: ;: to In :):- ... n =:`tf. f ~~1-:m ~.. ~.,t~3 C.fia_il:~ - InterestPayment Limits $SOK for husina;s in: ,I_ ' is .r ~k. Cisr~~r E ~,~.;;.I ~t.,:. r $25Kelscwlrcrc in the=ChA - lobs rttust be erected FF I ~:. r;r a „k~ 4. +i I.: tl ~~,. f.k, E ~, rx.5 }'{z k y~l l'w tF i'y~° Item WS.4 ~ s/i~/2oso Economic:Development.:Incentives t I:`. (~ i I~ ~'• alibi ~ R at ~ I l r= l i i't=: r~]:rjPCtF1iE Assrst commercial buiidingowners to improve their = pro~ierty or corisfruct a new building ::Improve the overall physical appearanr.P of tbP district Economic Development Incentives l- ~~nrrn=r 1 I . 'Iib_1 ~ 1 " __~ I rt r ..i ,t:_~ ~ i^ rrr~, ~'V't'ir r+ Grant may nbt excectl SU% oFihc pro~cctcd IIF iri~rernr:nt receipt for a pcl lad of up to I~ years CRA coos borrow moray or issue bonds rf necessary to CCVer COSYS -: Economic Development Incentives r sir,= ~ Eu; i 1 ira: I~.r try%„~1 tin?F r'~r=rn !'rn)ert must include jab creation' If hurldinl; sold within R-years after the funifiril;, would: be subjer:t tri rcfun~ing to the CEiA based upon amortizing imprU~ementsover S years Economic Development Incentives E Iri>r, 1 I ~ i~ 1 ~_'n~r:'i ,ru= .1 ~ ,I ;-~ I~r•.i,?'i Er~tCt? [±i;~ f'irnd up to SDSS of site u~nrk cost for a project irnpruyenunls nitat he c'rt'ier m the i5uh11c right-of way c~i in p~t,iic ~:paccsul he pruf~c.t r Eligible-cost-to indude:..road irr;provement, side walks; street IrRhts; ~i~naq~, laridsuaFlrig irngaticrn; Gewafie ,ysL~rris; utlhtu•s, xrafflc slgiicrll[dtlon, ~~tt. Parking stru.tures coos Lc i[rr lulled vahcn p<I?kii,g ;pages are available to the. public Economic Development Incentives F ~ r.~n; r EiC).: 1~. IrI a ~ru~:u r ~ ,i I ~r~ {t <irr "faxes roust be current f+Ausl tic perrnittcd iase acrd not o norr-canforrning rise City liens must not exrst If tiuilc~€ng a rnixcd use, nt Ienst ES% efthc building mist he non-residential space Economic Development Incentives lxr i 11{ :-G 111 --a l i :Li f.. .t, .site ~ 1:3 ~. Corsrraller~~ro,iects ~.inderaS,bilp,rL'L`prolectccsts Gl an, n1Dy car cell 5f r.£ of the ;~rotecYed flHncremerit receipt for a tima period at up tai 1, years Grant v.or.ld not exceed >250,006 but 50 -t match. req.;ired Project irnlsrhe c:3tal•ytir expected to have lung-term effect attrar..tin};dcvclr,prncntn~.iriry: ~ HPi map borrow mangy or issue bends rt nr'ressary to cower r r;1 t. Item WS.4 ~ s/12/2oso Ecanornic' De'velopr~ient ]ncer~tives for Office Buildings ... } j ~ _ , _l ~ -~ ~~~~i 3-~~~F1,~r ~ E~ l_°' ~. '~ i ~ ~~ ,1- 3 -I ~ l t~. f ~ 4 1 `r~ 1 ',ua'~RA I'~l lllY fll~ll Item WS.4 ~~ Page 1 of 1 MEMORANDUM TO: Mayor and City Commissioners FROM: Richard C. Hasko, P.E., Environmental Services Director THROUGH: David T. Harden, City Manager DATE: May 10, 2010 SUBJECT: AGENDA ITEM WS.5 -WORKSHOP MEETING OF MAY_ IS, 2x10 PRESENTATION OF THE JOINT PARTICIPATION PROJECT AT LITTLE FENWAY PARK ITEM BEFORE COMMISSION Representatives of the Bucky Dent Baseball School will present a proposal to Commission for a jointly funded project to replace the concession building at Little Fenway Field with an expanded facility that will accommodate the programming needs of both the City and the Baseball School. http://miweb001/AgendasBluesheet.aspx?ItemID=3314&MeetingID=294 5/14/2010 -- _ ----~ I ., u.9 , _ .~, ~ ~., .~ ,.w .9~9„ .. ~9 g ~ -,- ~ , .,, ~ ~,... <9 n ~ .. ~ hav3a ,~valao ~o ula XX . _....._ ". °'"° Nb"id JNIKIVLi~ lll+t33R0 t30j as " . 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Q ~~ pY(MCJUmgI>suns~y5 grymo%1u[{:95.191W![N'OW[]59iN4 B.'tl41SJW1-naTl.9~AVAN3lBWI~[9[[Ax r~ ~~ V t 5 a 3 .. ~. ~~ (.~,~~ `~ M fI ~ Y) d _ ' i(J CURRIE e SOWARDS A6UILA ARCHITECTS u ~~C.~I~C~S~t~ CITY CC~IV~~S51Q~ ~T~r'ti[C~ B/-~SEB/~LL SCF-ICJQL f'A-~K Q~~~Y e~t~cr--r, ~~tar~rc~„n SCALE: 7 "=40'-p° N > ~~ a°`y ~ ' ~~ v ~ g a ~ ~` g ~ Y~ ~ Q a a ~ t} ~} K( C.7 x ~^ ~ ~ ~ F p~ @gS g¢ $@ ~ y5 W 3~aL~Mi U m ~ c] a ~'~ Oi' ZZ'T 9tMdS ~~ ~t ~~ .. a miewne a -x sviimarc .n.w can*ox ~m o iwnn~ xs~uw su uvur •,~mo s.u .o an mwo w w.ism~.v .~ ... ~m.,ovn si. u~am ,,, ~m r~ww.wx ~+ aaw.o~ aamro to xm~,uwu w a ,.m.cw sw rsa.man,m amarwm~acso~wnrn srrarer~m~m arrw e~zasyx mwa'~~.~awn~o~~cmx J ~~Cy ~~~ {~~^.'y. ~w. ..*;4. ~F,G . ~~ ~, L! t. ~~ ~~ .,~ ::~~. ~. 4 / ~~ ~ '+ ~~. ~,, f, _ ~ ~_ LL Ni S U G 4i 'r~1.~ ~ : ~°" . ~, ~4. ~ • , ~ f ~ ti ,~~ . ~ rl ,, ~ ~•~ `' I, ;~ 'Y. _~ ~ ° '~~~, 'yr Ca ~+ a~ ~ ;~ ~• .,~ - -~_ i t -,, ~ _ ~. ~ ~ ,~ ~-t ``~.,,, ~' ~ .., ~ ,~ ~r , ~a r ~"'. ~~ f ~ 3 t ~~ t`l '! ( ww~~,~ wV "„L '! 7~" V`~ryp ~i~~ *iw hv. '~i5 '.~ .~ ~ '~ r~'i} ! ~ ;.~~,Q~~,_ 4~r. ,,}~1¢ ~ ~~~.~`ww .•;4.` gyn. r 41 i L r'j ~ ! l~' ~ J Y fi~ ~ .3 ,y t~ a ^"~,. y:i F'° a f {-~, ~,pL f~{~fyft"~~^~'(gy a { ~ t r~ 'i's]yr'r^I~ 1. ~ _ '~ ~ ~ ~ ~ ~ ~ ~~.. i~ } 1 ~ . , ~~- ~ ;r - 1 j ~ _ yy ~ ~ ~ ~ ~~~ ~ ~. ' s I~ _ - ~, ~~ ~ 7 ~ ~ 4 _ t ~~ f4 ~~~ r _ f ` ,,,,,.._____. M1 3~ ~ •X P,~,j.:~ t'~ .,,4-`' ~.h-.A .J7~: ~~Nf • `~~~{ ~t ~Srr ~y`'~ ~ ~ ~, "1eR ,~ ~~~~ ~ ~ r~ ,f ~//~ : f { --w~ .. r k ~, _._. ;- -t ~i-~l-. `.n. - ~ ,;8t v_._ ait~+ir~~ ,v, ~'i ,,;~ y~,,~ ~, .,{«../.~~:,7 ~~Y/~~ r ~ I a; n1^ 'V > r~ St sa '~~, F,,t, s ti' ~ l p ~ ,¢.~ ~' ter.........-,~. }y:~t~yy~~ f~~'''~ M e~. FwI~~ 3 _ _ ~ l~t_~~ -tip }"]11111{µ -'! •~~,...~ ~;~t.~'.. L,.. . .~ ~ ,~ ~~~~J O i~~~. `y ~• C•'~ ~ v M ~ `~`,~r~i*~ • ~~ r., r„rYt~,? ~+A1l~i~': `';'~'y.. ~r -~ i~i~ lC~~ : ~ ~" 0 Q , F d ti ~ h ~ ~~ o ~ ~~ ,----~ SINGE STORY FUTURE X4,800 SQ,FI`. EXPANSION `~ (2,300 SQ.FT. =J _ °o _ 1 CURRIE ~ S4WAROS AGUiLA ~j ~-^~ ~j{-~ ~j ARCHITECTS t- ~L,~!! ~._JS E~ ~~ R A Lam' ~ + ~~ Bt....ICKY [~EItilT SCHC~~,~ ~ ~~~~t~l\1CES51~ eRSEB I\IS SILL S~HC~QL f'~T'K C7ELRAY SEACN, FLC5t2tC?A SCALE: 1 "-40'-O'. L7ATE: MAY t sz ~n , r, Page 1 of 4 TO: FROM ~~ MEMORANDUM Mayor and City Commissioners Richard J. Reade, City Designee for the Solid Waste Management Analyses THROUGH: David T. Harden, City Manager DATE: May 12, 2010 SUB3ECT: AGENDA ITEM WS.6 -WORKSHOP MEETING OF-MAY 18 201U STATUS REPORT ON WASTE MANAGEMENT REVIEW ITEM BEFORE COMMISSION Staff will provide the City Commission with an update on the Solid Waste Management Commercial and Residential Analyses. BACKGROUND Commercial Analysis During the past year, a City resident, Ken MacNamee, has been investigating various aspects of the City's Solid Waste and Recycling collections, including management and adnninistration of our Franchise Agreement, with Waste Management (WM). In the course of Mr. MacNamee's investigation, which was aided by City Staff, a question regarding the City's Commercial Solid Waste Program surfaced, "Has the City received all the Franchise Fees we should be paid by WM for Commercial and construction and demolition solid waste collection services?" In an effort to resolve this question, Mayor McDuffie, on behalf of the City Commission, on February 10, 2010, formally requested the Financial Review Board {FRB) to assist the City with determining "Is the City receiving all necessary information frorz~ WM and does the City have in place processes to regularly review such information and provide reasonable assurance that the City is receiving all Franchise Fees due?" This task was then taken on by City Staff with the intent to receive confirmation by the FRB and Mr. MacNamee that all questions had been answered. Following receipt of the Mayor's letter, Staff developed a plan to perform an analysis {a Financial or Forensic Audit was not completed) of the City's Commercial Solid Waste program -historically and currently. The Commercial Franchise Fee Analysis provides an analysis of the City's Commercial Solid Waste program. The Analysis included a summary of the program's history (since 2001), outlined the major services that are required to be provided by the Contractor, noted the duties of the Contract Administrator and provided the provisions for the various Commercial Rates, billing and remittance of httpa/miweb001/AgendasBluesheet.aspx?ItemID=3321 &MeetingID=294 5/14/2010 Page 2 of 4 the Franchise Fee and other charges, including Plan items were developed in an attempt to Fees. The comprehensive analysis is attached. Administrative Fees. In addition, fourteen (14} Work confrrn the proper receipt of Commercial Franchise Observations Completion of each Work Plan item provided the following observations regarding the City's Commercial Solid Waste program: A. Our analysis showed that from FY 2002 to FY 2008 (excluding the years impacted by the hurricanes and the C&D law suit}, increases in Commercial Franchise Fee revenues appear to compare favorably with the corresponding year's rate increase (as a percentage). B. In FY 2009, the City removed the "exclusive" C&D franchise option, which resulted in the "non- exclusive" haulers charging "market rates." Because of this, along with the fact that monthly Franchise Fee information prior to the change in C&D services to anon-exclusive option is not available, means the change in the volume for C&D services cannot be determined. C. It was determined that minor deviations from the rate Ordinance for FY 2006, FY 2007, FY 2008, FY 2009 and FY 2010 were due to a "rounding" issue, which does not appear to have any material concerns to warrant a further detailed analysis. D. 339 of 1,039 Commercial Customers (32.6%} in FY 2009 were sample tested; the sampling indicated that the rates were correct and properly implemented during this time period. E. When the "non-exclusive" Open Top (temporary) C&D Monthly Franchise Fees were added to the Total Monthly Franchise Fees Earned for a five (5) month period, the monthly general average aggregate rate decreased. F. During a five (5) month time period, three (3} Franchise Fee omissions were identified totaling $51,025.37. In addition, it was found that WM had failed to submit requisite Administrative Fees totaling $1,$73.95 over a separate five (5) month period. All omitted funds have been received by the City. G. WM claimed it was "over" paying an Administrative Fee and excluded 95 Permanent Roll-Off containers from all future Administrative Fee payments as of March 2009 H. Beginning in February 2010, Staff created a Solid Waste Employee Working Group that has met regularly and has been instrumental in resolving various requests for information and evaluating and documenting (e.g., transparency and accountability) the City's various solid waste management business processes. Recommendations The following recommendations were developed regarding the City's Commercial Solid Waste program: 1. Coordinate with the Contractor to ensure that the rates that are prescribed within the approved Rate Ordinances (Chapter 51 "Garbage And Trash -City Code of Ordinances} are utilized for all billings to eliminate potential errors. This practice began in 2009 (October 1, 2008). httpa/miweb0011AgendasBluesheet.aspx?ItemID=3321&MeetinglD=294 5/14/2010 Page 3 of 4 2. Develop a monthly rate structure fox all Commercial Services and for all pickWup options available and include this within the annual Rate Ordinance. Written, electronic confirmation that both the City and the Contractor have reviewed and confirmed the proposed rates should be provided. 3. All Franchise Fee remittances should be provided one (1) month in arrears to facilitate a monthly analysis of all Commercial Franchise Fee revenue earned. 4. A monthly Customer Detail Billing Registex should be provided by all Contractors electronically {i.e., E-Mail), in Excel format, to the City with all remittances to allow for electronic comparisons and analysis. This document should include customer name, service address (number and street name should be provided in separate cells), container type, frequency of pick-up, Special Service fees (if applicable), Administrative Fee {if applicable}, total monthly Franchise Fee earned from the service provided and total monthly billed amount earned from the service provided. 5. To ensure the accuracy of the monthly C&D Franchise Fees, Detailed Billing Registers should be reviewed by the Contract Administrator and/or their designee and the Utility Customer Service Division Manager and/or their designee, on a monthly basis. 6. Reference the Contractor's ability to charge Special Service Fees within the annual Rate Ordinance. 7. The Contractor should provide written, electronic notice of any administrative issues and/or changes that may affect total revenues received and/or expenditures to be paid to the City to the City's Contract Administrator within 72 hours. 8. As provided within the approved Franchise Agreement, Section 4.C.3.b -Disclosure -the Contractor should continue to provide all Commercial Customers with an annual disclosure statement. 9. Detailed internal controls {i.e., business process policies and procedures) will be developed at a later date. Conclusion It was found that numerous barriers (i.e., "live system," lack of detailed customer data, communication, etc.) prevented a complete and detailed determination from being completed to determine whether appropriate Commercial Franchise Fees have been received since the inception of the current Franchise Agreement (FY 2002). It should also be noted that this determination includes the payment of $51,025.37 in Commercial Franchise Fees as well as $1,873.95 in Administrative Fees for two separate five (5) month periods. In addition, various business process impxovements have been identified and recommended to be implemented (some already have begun} to ensure the accuracy of the City's Commercial Solid Waste program and Franchise Fees payments. Instead of pursuing the option of continuing the Analysis to further investigate particular areas of this program, which could be proven to be cast prohibitive (i.e., financial and personnel capital) and may not be productive, Staff is recommending that the City close the review of historical Franchise Fee Analysis and proceed forward in implementing the various policies and procedures that will be prepared by Staff at a later date. These proposed changes, which were recommended by the Financial Review Board and, if adopted by http a/miweb001 /AgendasBluesheet.aspx?ItemID=3321 &MeetingID=294 5/14/2010 Page 4 of 4 the City Commission, will ensuxe better communications within the City as well as with the Contractor. In addition, these recommendations will enhance accountability and documentation as well as assist in ensuring that future Commercial Franchise Fees will be closely monitored for accuracy on a monthly basis. Please Note: On April 30th, the Financial Review Board provided unanimous approval to support the Solid Waste Management Commercial Analysis as prepared by City Staff. Residential Analysis: Currently, Waste Management is completing a verification Field Inventory of the D-Gar Residential Service Category and comparing their findings to the City's recently completed Field Inventory. This process is the foundation far determining possible billing issues that may have occured. Once this verification process is completed, WM and City Staff will work together to resolve any exceptions to the City's Inventory. Once this process is completed (anticipated to be completed within 2 weeks}, Staff will be prepared to complete a schedule determining possible billing issues and provide a final reportlanalysis to the Financial Review Board for review and consideration. httpa/miweb001/Agendas/Bluesheet.aspx?ItemID=3321 &MeetingID=294 5/14/2010 COMMERCIAL SOLID WASTE PROGRAM ANALYSIS AND PROPOSED BUSINESS PROCESS RECOMMENDATIONS April 28, 2010 Table of Contents Executive Summary ............................................................................................................ Pages I -IV Memorandum to the City of Delray Beach Financial Reuierrv Board: I. Goal - [dentification of Issue{s) ..................................................................................... Page 1 [I. 8ackground ...................................................................................................................... Page 2 Commercial Services Provided .............................................................................................. Page 2 Commercial Franchise Agreement {i.e., Contract) Administration ............................... Page 3 Commercial Rates, Bi{ling and Remittance of Franchise Fee and other Charges..... Page 3 III. Commercial Franchise Fee Analysis Work P[an ...................................................... Page 5 IV. Analysis of Commercial Franchise Fees and Administrative Fees .......................... Page 6 Work Plan Item #1. Review Rate Ordinances since FY 2002 (the first year of the BFl Agreement} to calculate and determine the average percentage change in the Commercial Franchise Fee rates .......................................................................................... Page 6 Work Pian Item #2. Review the City's Genera! Ledger accounts to compare actual FY 2008 and FY 2009 Commercial Franchise Fee revenues received to determine the actual percentage increase in Franchise Fees over this time period ....................................................................................................................................... Page 12 Work Plan Item #3. Obtain various WM Commercial Customer Summary Billing Registers {before and after FY 2008 rate increase} and develop a worksheet combining Customer Summary Billing Registers and sort by customer to ensure comparable customer data ........................................................................................... Page 13 Work Plan Item #4. Analyze FY 2007, FY 2008 and FY 2009 Commercial Container counts to determine changes in the monthly Commercial Franchise Fee received before and after the rate increase -Ordinance #44-08 -effective October 1, 2008... Page14 Work Plan Item #S. Review a large sample of Commercial Customer rates {monthly billings} and compare with rates provided in Ordinance #44-08 to determine if rates are accurate and properly implemented ........................................................................... Page14 Work Plan ]tem #6. Obtain "Non-Exclusive" C&© Monthly Franchise Activity Reports from October 2008 through September 2009 ..................................................... Page 16 Work Plan [tem #7. Review and analyze Commercial Open lop {temporary} C&D activity prior to and after the rate became unregulated {i.e., market rates} in October 1, 2008 {September 2008 was the last month that WM held the exclusive franchise for C&© collections ............................................................................................... Page 17 Work Plan Item #8. Review and analyze the effectsJimpacts of the monthly Commercial Container Customer rate increases {Ordinance #44-08 -Effective October 1, 20[38} on the services provided {i.e., # of containers, size of containers, frequency of pickup, combining waste services and business closure) .......................... Page 19 Work Plan Item #9. Review and analyze the February 2409 detailed Commercial Customer Billing Register and reconcile the administrative fees received from WM ........................................................................................................................................... Page 19 Work Plan. Item #10. Coordinate and bring together all areas of the City that participate in the City's Solid Waste program to encourage communication across departments, resolve public requests for information, evaluate and document (e.g., transparency) the City's various solid waste management business processes and develop administrative and operational recommendations that will be provided in loath the Commercial and Residential Analyses ................................................................ Page 21 Work Plan Item #11. Review, analyze and provide recommendations regarding the Community Improvement Department's (CI) Commercial Solid Waste Collection business processes to ensure proper monitoring and notification, receipt of detailed monthly Commercial activity and collection of revenue ................................... Page 22 Wark Plan Item #12. Review, analyze and provide recommendations regarding the Finance Department -Utility Customer Service Division's business .processes to ensure proper monitoring and notification, receipt of detailed monthly Commercial activity and collection of revenues ...................................................................................... Page 23 Work Plan Item #13. Review, analyze and implement WM recommendations regarding business processes to ensure implementation of rate adjustments, proper monitoring and notification, delivery of detailed monthly Commercial activity and collection of revenues ....................................................................................... Page 24 Work Plan Item #14. Identify important observations and provide recommendations ................................................................................................................... Page 25 V. Conclusion ........................................................................................................................ Page 30 EXECUTIVE SUMMARY COMMERCIAL SOLID WASTE PROGRAM ANALYSIS AND PROPOSED BUSINESS PROCESS RECOMMENDATIONS I, Goal - Identif=ication of Issue4sl During the past year, a City resident, Ken MacNamee, has been investigating various aspects of the City's Solid Waste and Recycling collections, including management and administration of our Franchise Agreement, with Waste Management (WM]. In the course of Mr. MaeNamee's investigation, which was aided by City Staff, a question regarding the City's Commercial Solid Waste Program surfaced, "Has the City received all the Franchise Fees we should be paid by WM for Commercial and construction and demolition solid waste collection services?" In an effort to resolve this question, Mayor McDuffie, an behalf of the City Commission, on February 10, 2010, formally requested the Financial Review Board (FRB] to assist the City with determining "ls the City receiving all necessary information from WM and does the City have in place processes to regularly review such information and provide reasonable assurance that the City is receiving all Franchise Fees due?" This task was then taken on by City Staff with the intent to receive confirmation by the FRB and Mr. MacNamee that all questions had been answered. II. Analysis of Commercial Franchise Fees and Administrative Fees Following receipt of the Mayor's letter, Staff developed a plan to perform an analysis (a Financial or Forensic Audit was not completed] of the City's Commercial Solid Waste program historically and currently. The Commercial Franchise Fee Analysis provides an analysis of the City's Commercial Solid Waste program. The Analysis included a summary of the program's history (since 2001}, outlined the major services that are required to be provided by the Contractor, noted the duties of the Contract Administrator and provided the provisions for the various Commercial Rates, billing and remittance of the Franchise Fee and other charges, including Administrative Fees. In addition, fourteen (14] Wark Plan items were developed in an attempt to confirm the proper receipt of Commercial Franchise Fees. The comprehensive analysis is attached. III. Observations Completion of each Work Plan item provided the following observations regarding the City's Commercial Solid Waste program: A , Our analysis showed that from FY 2002 to FY 2008 (excluding the years impacted by the hurricanes and the C&D law suit), increases in Commercial Franchise Fee revenues appear to compare favorably with the corresponding year's rate increase (as a percentage). B. En FY 2009, the City removed the "exclusive" C&D franchise option, which resulted in the "non-exclusive" haulers charging "market rates." Because of this, along with the fact that monthly Franchise Fee information prior to the change in C&D services to a non- exclusive option is not available, means the change in the volume for C&D services cannot be determined. C. It was determined that minor deviations from the rate Ordinance for FY 2DD6, FY 2DD7, FY 20D8, FY 2009 and FY 2D10 were due to a "rounding" issue, which does not appear to have any material concerns to warrant a further detailed analysis. D. 339 of 1,039 Commercial Customers (32.6%} in FY 2009 were sample tested; the sampling indicated that the rates were correct and properly implemented during this time period. E. When the "non-exclusive" Open Tap (temporary} C&D Monthly Franchise Fees were added to the Total Monthly Franchise Fees Earned for a five (5} month period, the monthly general average aggregate rate decreased. F. During a five (5) month time period, three (3) Franchise Fee omissions were identified totaling $51,025.37. In addition, it was found that WM had failed to submit requisite Administrative Fees totaling $1,873.95 aver a separate five (5} month period. AEI omitted funds have been received by the City. G. WM claimed it was "over" paying an Administrative Fee and excluded 95 Permanent Roll-Off containers from alE future Administrative Fee payments as of March 2009 E~. Beginning in February 2010, Staff created a Solid Waste Employee Working Group that has met regularly and has been instrumental in resolving various requests for information and evaluating and documenting (e.g., transparency and accountability} the City's various solid waste management business processes. IV. Recommendations The following recommendations were developed regarding the City's Commercial Solid Waste program: 1. Coordinate with the Contractor to ensure that the rates that are prescribed within the approved Rate Ordinances (Chapter 51 "Garbage And Trash -City Code of Ordinances) are utilized for all billings to eliminate potential errors. This practice began in 2009 October 1, 2008}. Page II 2. Develop a monthly rate structure for all Commercial Services and for all pick-up options available and include this within the annual Rate Ordinance. Written, electronic confirmation that both the City and the Contractor have reviewed and confirmed the proposed rates should be provided. 3. All Franchise Fee remittances should be provided one (1) month in arrears to facilitate a monthly analysis of all Commercial Franchise Fee revenue earned. 4. A monthly Customer Detail Billing Register should be provided by all Contractors electronically ~i.e., E-Mail), in Excel format, to the City with all remittances to allow for electronic comparisons and analysis. This document should include customer name, service address (number and street name should be provided in separate cells), container type, frequency of pick-up, Special Service fees (if applicable), Administrative Fee (if applicable), total monthly Franchise Fee earned from the service provided and total monthly billed amount earned from the service provided. 5. Ta ensure the accuracy of the monthly C&D Franchise Fees, Detailed Billing Registers should be reviewed by the Contract Administrator and/or their designee and the Utility Customer Service Division Manager and/or their designee, on a monthly basis. 6. Reference the Contractor's ability to charge Special Service Fees within the annual Rate Ordinance. 7. The Contractor should provide written, electronic notice of any administrative issues and/or changes that may affect total revenues received and/or expenditures to be paid to the City to the City's Contract Administrator within 72 hours. 8. As provided within the approved Franchise Agreement, Section 4.C.3.b -- Disclosure the Contractor should continue to provide all Commercial Customers with an annual disclosure statement. 9. Detailed internal controls (i.e., business process policies and procedures) will be developed at a later date. V. Conclusion As shown within this analysis, numerous barriers (i.e., "live system," lack of detailed customer data, communication, etc.} prevented a complete and detailed determination from being completed to determine whether appropriate Commercial Franchise Fees have been received since the inception of the current Franchise Agreement ~FY 2002}. It should be noted that this determination includes the payment of $51,©25.37 in Commercial Franchise Fees as well as $1,873.95 in Administrative Fees for two separate five (5j month periods. In addition, various business process improvements have been identified and recommended to be implemented (some already have begun) to ensure the accuracy of the City's Commercial Solid Waste program and Franchise Fees payments. Page ill Instead of pursuing the option of continuing the Analysis to further investigate particular areas of this program, which could be proven to be cost prohibitive {i.e., financial and personnel capital) and may not be productive, Staff is recommending that the City close the review of historical Franchise Fee Analysis and proceed forward in implementing the various policies and procedures that will be prepared by Staff at a later date. These proposed changes, if recommended by the Financial Review Board and adopted by the City Commission, will ensure better communications within the City as well as with the Contractor. In addition, these recommendations will enhance accountability and documentation as well as assist in ensuring that future Commercial Franchise Fees will be closely manitared for accuracy on a monthly basis. Page iV MEMORAN©UM Apri! 2s, 2p10 To: City ofi Defray Beach Financial Review Board From: Richard J. Reade, City Designee for the Solid Waste Management Analysis Subject: Analysis of the City of Delray Beach's Commercial Solid Waste Program Analysis and Proposed Business Process Recommendations 0n behalf of the City Staff associated with this project, I want to present our financial analysis and final report on the City's Commercial Solid Waste Program Analysis. In addition, we are providing our observations and recommendations to improve the internal andJor external business processes to ensure that the City of Defray Beach is receiving an accurate amount of Commercial Franchise Fees [Commercial and Construction and Demolition {C&D} services] and Administrative Fees. I. Staff Goal -Identification of Issuets} During the past year, a City resident, Ken MacNamee, has been investigating various aspects of the City's Solid Waste and Recycling collections, including management and administration of our Franchise Agreement, with Waste Management Inc. of Florida {WMJ. !n the course of Mr. MacNamee`s investigation, which was aided by City Staff, two {2) primary financial questions surfaced: "1. Has the City received all the Franchise Fees we should be paid by Waste Management for Commercial and construction and demolition solid waste collection services?" and "2. Has the City overpaid for residential solid waste collection services due to errors in the number of residential units in each of the four categories of service provided within the City?" As a result, on February 10, 201q, Mayor Nelson S. "Waodie" McDuffie, on behalf of the City Commission, formally requested the Financial Review Board {FRB) to assist the City with answering the following (See Attached -Exhibit #1}: 1. "ls the City receiving all necessary information from Waste Management and does the City have in place processes to regularly review such information and provide reasonable assurance that the City is receiving all Franchise Fees due?" 2. "Do the City's business processes ensure that the number of units in each of the four categories is regularly and accurately updated, that Waste Management is billing the City for the appropriate number of units, and that the unit counts are periodically reconciled with the Property Appraiser's records?" Nate: The first request for assistance refers to City's Commercial Solid Waste Franchise Fees, which are analyzed within this report. Request #2 refers to the City's Residential Solid Waste and Recycling Program. At a later date, Staff will provide the FRB with an analysis of the City's solid waste and recycling program, which will include a detailed comparison of actual unit counts with WM billing statements and a reconciliation of the monthly amounts that 1. were paid and should have been paid to WM (Expense side] and 2. that Residential customers were billed and should have been billed since WM took over the Solid Waste contract from BFI: If. Sackgra~and In 2001, the City formally Bid the opportunity to provide Commercial and residential solid waste and recycling services within the City of Delray Beach. This Bid process resulted in the selection BFI Waste Systems of North America, Inc. (BFfj by the City Commission and led to the approval of a five (5j year contract (ar Franchise Agreement) that commenced an October 1, 2001 (Expiration Date - September 30, 2006] (See Attached -- exhibit #zj. Although, BFI was awarded this service opportunity, in 2003, Waste Management Inc. of Florida purchased BFI and took over (through assignment from BFI) the City's solid waste co[lection services beginning on October 1, 2003. At this time, the City and WM agreed to a new 5-year term beginning with the assignment an October 1, 2003 (Expiration Date -September 20, 2008). In 2008, per the City's Franchise Agreement, the City and WM negotiated a new five {5} year Agreement extension with revised terms and conditions {i.e., removed exclusive franchise for C&D, In-Kind Services increased from $10,000 to $20,000, etc.}. This new Agreement is effective until September 30, 2013. Nate: All of the documents described within this analysis will be provided as electronic Exhibits to save on financial and environmental costs„ They will only be provided as a "hard copy" ~~pon request. Commercial Services Provided: Within Section #3 of the Franchise Agreement {as amended] between the City-and WM, all solid waste collection services and residential recycling collection services are outlined and described. To summarize the Commercial services provided: WM shall provide mandatory Commercial solid waste collection services {i.e., Commercial container, Roll-Out Carts, Compactor and Permanent Ro[l-Off Container), excluding temporary Construction and Demolition Debris (C&D} collection services WM shall be eligible to provide temporary C&D collection services as a "non-exclusive" franchise provider WM -shall be responsible for the billing and collection of Commercial Solid Waste Collection Services and disposal costs not being billed and collected by the Solid Waste Authority (SWAj and/ar its designee or another "non-exclusive" franchise provider WM shall provide "non-exclusive" Commercial Recycling Collection Services in the City upon request by the Customer or the City Page 2 Commercia! Franchise Agreement (i.e., Contract} Administration: The Franchise Agreement defines the City's Contract Administrator as "the person designated by the City who shall act as the City's representative during the term of the Franchise Agreement." This person will be responsible for administering the Agreement and monitoring collection services provided by WM (including including collection and disposal). Please note that the Franchise Agreement indicates that the City's Community Improvement Department - Cvde Enforcement Division will hold these responsibilities. Wawever, due to budget and personnel resources constraints, these duties have been assigned to the City's Assistant Community Improvement Director and are shared with various Community Improvement Department Staff. Commercial Rates, Billing and Remittance of Franchise Fee and other Charles: Commercial Rates: Initially, in 2001, when the "Solid Waste, Vegetative and Recycling Collection Services" {i.e., Franchise Agreement) formal bid was awarded to BFI, the contractor rates for residential, multi- family and commercial units were established within BFI's Bid documents. Monthly Commercial collection and disposal rates were identified in Exhibit I as a "per cubic yard" rate. This provided for all basic charges associated with collection and disposal of Commercial waste. It should be noted that disposal Costs are defined by the Palm Beach County Solid Waste Authority {SWA) and any adjustments are not within the control of the City and/or the contractor. Further, the Franchise Agreement, "Section 6. Charges, Rates and Level of Services", provided for the charging of various costs associated with this service including: an annual rate adjustment based solely on the Consumer Price Index {CPI) -not to exceed 3% in any one year, Extraordinary Rate Adjustment for unforeseen operational costs {requires City Commission approval), an Administrative Fee ($0.35 per residential customer or per Commercial Container customer) that is remitted back to the City, a Franchise Fee of 5% to support the exclusive right to provide residential and commercial services within the City and aRoll-Out Cart Replacement Fee of $0.90 for all residentia! and commercial Curbside Cart customers to compensate for the City's costs to purchase and replace these carts. In addition, "Section 4. Solid Waste and Vegetative Waste Collection Service: C. Commercial Solid Waste Collection Service:" provides that the contractor shall only charge rates as set out in Exhibit f or as otherwise allowed by this Agreement {i.e., "special Services"). These additional "special Services" charges, which are outlined in Exhibit #2, include but are not limited to "special services far collection of solid waste such as rolling containers out of storage areas, opening doors and gates for access or other such special services." Following the determination of Commercial rates, charges and fees within the approved Bid Award, City Staff, on an annual basis, applies the permitted CPI to determine the new monthly Commercial callection rates. At this time, City Staff also identifies and incorporates any necessary adjustments to the disposal rate as defined by the SWA. This new annual rate information is then submitted to the contractor {BFI and WM) for review and approval. Upon Page 3 receipt of the contractor's approval, the new rates are included in an annual "Rate Ordinance" that is considered by the City Commission. The annual Rate Drdinance also maintains language that updates/amends the existing City Code and the existing Franchise Agreement. If approved by the Commission, all new rates are then codified {Chapter 51 "Garbage And Trash -City Code of Ordinances] and applied to respective Commercial customers beginning on the first day of the fiscal year (October 1St) It should be Hated that since the Franchise Agreement was approved in 2001, the City Commission has approved three {3j separate Amendments to the Agreement. Only the most recent, Amendment No. 3, in July 2008, (see Attached -Exhibit #3C}, provided for a revision to the previously established monthly collection rates. This Amendment authorized: An extension of the existing Franchise Agreement to provide an additional one, five (5} year period as permitted by Amendment Rlo. 1 {approved by the City Commission in September 2003} A modification to the permitted CPI rate adjustment threshold Provided for a Fuel Surcharge Provided for a revised Approved Rate Schedule -Exhibit #2 -Franchise Agreement The approved changes to determine the monthly collection costs were requested by WM due to various reasons {i.e., historically low CPI rate adjustments, high fuel and operational costs, etc.]. Billing: The Franchise Agreement provides that "Commercial Customers" includes all customers other than residential .and multi-family (5 or more units) customers. Further, all Commercial billing and collection services are completed by the contractor (i.e., BFI and WM}, thus the City does not participate in daily, operational billing activities for Commercial Solid Waste Collection Services. Commercial Billing is determined as follows: Total Monthly Disposal Charge =Monthly Container Yards x Disposal Rate Total Monthly Collection Charge =Monthly Container Yards x Collection Rate per Yard Total Monthly Collection & Disposal Charge = Total Disposal Charge + Total Collection Charge Total Mon. Charge =Total Monthly Collection & Disposal + 10% Franchise Fee + $0.35 Admin Fee As mentioned earlier, all eligible collection rates, fees and charges are listed within either the prevailing Rate Ordinance and/or Franchise Agreement (e.g., Natural Disasters, Extraordinary Rate Adjustment, Special Services -moving containers, opening and closing doors and/or gates for access, adding and opening locks, etc.). The current collection rates, fees and charges can be found in Ordinance #44-08 and the corresponding Franchise Agreement (See Attached - Exhibit #4}. **Please note, as defined in Question #1 -Part 7 of WM's February 2010 responses to Ken MacNamee's 12 Commercial Questions {See Attached - Exhibit #5}, that Commercial Containers/Dumpsters, Curbside Carts and Commercial Compactors with monthly service Page 4 charges are },filled in advance (at the beginning of a period). Permanent Roll-Dffs, Rol!-Dff Compactors and Open Tap (temporary) C&D Roll-Off Containers are billed in arrears {at-the end of a period}. This information is utilized throughout this Commercial analysis. In addition, it should be noted that there are some fees charged by WM that are "otherwise allowed" and are not subject to being charged a Franchise Fee (i.e., Commercial Recycling, Commercial Recycling compactor leases, repairs to customer owned compactors and/or containers, etc.). Franchise Fees: Per the City's Code of Ordinances, a monthly Franchise Fee is collected and remitted to the City by WM for all Commercial containers [Commercial ContainersJDumpsters, Permanent Roll-Off containers, Roll-0ff compactors and Open Top {temporary) C&D Roll-Off containersj. In 2DD1., the 5% monthly Franchise Fee on all contractor fees [i.e., collection, disposal and container maintenance), was established as a requirement within the City`s Request for Proposal (RFP) documentation. The Franchise Fee remained at 5% until FY 2DD7 when it was increased to 1D% (Ordinance #50-D6 -September 2006). As a result, WM is authorized to charge a 10% Franchise Fee (Total Collection & Disposal Charge x 10%} As noted earlier, one of the main provisions of the revised Franchise Agreement (Amendment Na. 3) was the removal of WM as an "exclusive" C&D Franchise provider, which had been part of the original 2001 Agreement. At this time, due to concerns with providing "exclusive" rights to the City's C&D services, the City removed the "exclusive" option within the 2008 Franchise Agreement extension and permitted "non-exclusive" franchises to be offered to various C&D haulers, beginning October 1, 2008. Thus, multiple, permitted "non-exclusive" now provide this service within the City's boundaries and remit the monthly Franchise Fee separately. Administrative Fees: Per the City's Franchise Agreement, a monthly Administrative Fee ($D.35 per container per month) for all Commercial Cart, Commercial Container/Dumpster and Commercial Compactor accounts is collected and remitted to the City. Permanent Roll-Off, Roll-Off Compactors and Open Top [temporary) C&D containers are not charged this fee. 111. Commercial Franchise Fee Analysis Work Plan 1. Review Rate Ordinances since FY 2D02 (the first year of the BFI Agreement) to calculate and determine the average percentage change in the Commercial Franchise Fee rates 2. Review the City's General [.edger accounts to compare actual FY 2008 and FY 2D09 Commercial Franchise Fee revenues received to determine the actual percentage increase in Franchise Fees over this time period 3. Obtain various WM Commercial Customer Summary Billing Registers (before and after FY 2D08 rate increase) and develop a worksheet combining Customer Summary Billing Registers and sort by customer to ensure comparable customer data Page 5 4. Analyze FY 2007, FY 2008 and FY 2009 Commercial Container counts to determine changes in the monthly Commercial Franchise Fee received before and after the rate increase -Ordinance #44-OS -effective October 1, 2008 5. Review a large sample of Commercial Customer rates (monthly billings} and compare with rates provided in Ordinance #44-08 to determine if rates are accurate and properly implemented 6. Obtain "Non-Exclusive" C&D Monthly Franchise Activity Reports from Dctober 2008 through September 2009 7. Review and analyze Commercial Open Top (temporary} C&D activity prior to and after the rate became unregulated =i.e., market rates) in Dctober 1, 2008 =September 2008 was the last month that WM held the exclusive franchise for C&D collections 8. Review and analyze the effects/impacts of the monthly Commercial Container Customer rate increases (Drdinance #44-OS -Effective October 1, 2008) on the services provided {i.e., # of containers, size of containers, frequency of pickup, combining waste services and business closure} 9. Review and analyze the February 2009 detailed Commercial Customer Billing Register and reconcile the administrative fees received from WM 10. Coordinate and bring together all areas of the City that participate in the City's Solid Waste program to encourage communication across departments, resolve public requests for information, evaluate and document the City's various solid waste management business processes and develop administrative and operational recommendations that will be provided in both the Commercial and Residential Analyses 11. Review, analyze and provide recommendations regarding the Community Improvement Department's (CI} Commercial Solid Waste Collection business processes to ensure proper monitoring and notification, receipt of detailed monthly Commercial activity and collection of revenues 12. Review, analyze and provide recommendations regarding the Finance Department - Utility Customer Service Division's business processes to ensure proper monitoring and notification, receipt of detailed monthly Commercial activity and collection of revenues 13. Review, analyze and implement WM recommendations regarding business processes to ensure implementation of rate adjustments, proper monitoring and notification, delivery of detailed monthly Commercial activity and collection of revenues 14. Identify important observations and provide recommendations IV. Analysis of Commercial Franchise Fees and Administrative Fees Work Plan Item #1. Review Rate C-rdinances since FY 2002 {the first year of the BFI Agreement) to calculate and determine the average percentage change in the Commercial Franchise Fee rates In an effort to determine the average percentage change in Commercial Franchise Fee rates, all Commercial Franchise rate increases were reviewed dating back to FY 2002, the time when the initial 8FI contract became of#ective. During this period of time, the following was identified: Page 6 From FY 2002 through FY 2005, Annual Commercial rate increases were minimal (on average -less than 1.2% per year) and tied to the Consumer Price index (CPI) per the approved Franchise Agreement -Max. 3% per year Annual Cammercial rate increases were amended in FY 2008 (See Attached -Exhibit #3C} to permit a new CPI of a rolling cap of up to 5% per year as well as a "fuel surcharge" that would be determined in a Rate Ordinance prior to each fiscal year . City Franchise Fees were 5% of commercial billings from FY 2002 to FY 2006 Franchise Fee collections for FY 2005 and FY 2006 were negatively impacted due to two (2) large scale and unexpected natural events (Hurricane Frances in 2004 and Hurricane Wilma in 2005) that resulted in continued power outages and debris issues In addition to the related hurricane effects, the City was also in the midst of a law suit with Southern Waste Systems, LLC (SWS), which began in 2001. SW5 challenged the City's Ordinance and Franchise Agreement between the City and BFI that provided exclusive C&D services collection rights within the City of Delray Beach. A significant loss of revenues occurred when the District Court entered a determination of "enjoined enforcement" (declared an injunctions against the City. This prohibited the City from collecting C&D Franchise Fees under its "Exclusive Franchise Agreement." The suit was then heard an appeal and eventually "reversed, vacated and remanded" by the 11~" District Court of Appeals in August 2005; allowing the City to enforce its exclusive C&D Franchise and collecting Franchise Fees from WM. These events (i.e., hurricanes and law suit) negatively impacted the City's total Franchise Fee for each of the affected years considerably -from $213,158 in FY 2004 TD $94,517 in FY 2005 & $92,058 in FY 2006. As a result, Franchise Fees collected during this period did not meet budgeted amounts (FY 2005 - $159,300 and FY 2006 - $100,000}, which do not prove well within this analysis to determine appropriate Franchise Fees collected. Beginning an October 1, 2006 (FY 2007, Cammercial Franchise Fees were increased from 5% to 10%, which includes collection, disposal and container maintenance. En addition, due to the annual CPI adjustment and the 14% Franchise Fee increase, a 118% average rate increase was experienced for a Commercial Container service - 3 cu.yd. container collected 2 times per week. From FY 2002 to FY 2005 (excluding the year's impacted by the hurricanes and the C&D law suit), Commercial Franchise Fee revenues appear to compare favorably with the corresponding year's rate increase (as a percentage). In an effort to further investigate Commercial Franchise Fees received from FY 2007 to present, Staff then reviewed the requisite annual Rate Ordinances to determine the average percentage change in the Commercial Franchise Fee rates (See Chart Below. Page 7 Franchise Annual Annual Actual Fee Franchise Franchise Franchise (%) Rate Fee Rate Fee Increase Received Earned FY2007 10% 10.71 118.3% $339,543. 15~ Year of 10% Franchise Fee FY2008 90% 10.80 0.84% $354,095 FY2009 90% 21.24 96.7% $490,5'15 95' Year of 5% CPI + Fuel Surcharge FY2010 10% 20.94 (9.41%~ N!A Annual Franchise Rate =Franchise fee on 3 cu,yd. container collected 2 limes per week We began this analysis by looking at haw the FY 2008 rate increases affected Commercial Franchise Fee revenues when compared to FY 2007. This enabled Staff to compare two (2} years - FY 2007 & FY 2008 -that maintained the same Franchise Fee percentage [10%} and determine if the Commercial Franchise Fee received was generally accurate: In FY 2007, the Commercial Franchise Fee was increased from 5% to 10% and resulted in a significant increase in revenues collected by the City ($339,543). Unfortunately, due to the skewed data from the hurricane and C&~ !aw suit years, we are unable to make any significant comparisons to ensure accuracy of remitted Fees. However, when the FY 2007 revenues are compared with the revenues received in FY 2008 (with a very small rate increase}, the remitted Franchise Fee appears to be in line. In FY 2008, a .84% Commercial Franchise Fee rate adjustment [based on the CPI fora 3 yard container collected 2 times per week} was implemented to accommodate increasing collection casts. Also, at Fiscal Year End 2007- there were a total of 1,113 Commercial Containers and at Fiscal Year End 2008 there were a total of 1,129 Commercial Containers. As a result of this slight increase in Containers [17 additional Containers}, the small CPI increase and when FY 2007 & FY 2008 Franchise Fees are compared, revenues collected increased by 4.29% (FY 2007 - $339,543 and FY 2008 - $354,096}. Thus, suggesting appropriate Franchise Fees were remitted back to the City for FY 2008. Prior to FY 2009, WM was restricted to an annual rate increase of up to 3% per year based upon the CPI. However, beginning in FY 2009 (October 1, 2008 to September 30, 2009}, the City Commission, wifihin Ordinance #44-08, approved a "general rate increase average" (in collection and disposal rates} in the City's Commercial Franchise Fee of 96.7% far Commercial Container/Dumpster service (the most common type of Commercial service offered}. In addition, the Contractor is entitled to increase in the collection rate threshold from 3% to a maximum annual rolling rate of 5% based on the CPI as well as to implement an annual fuel surcharge (based an nationally published rates}. In an effort to ensure consistency throughout this Analysis (due to the numerous combinations of container sizes and frequency of pick-ups along with the various types of collection options}, Staff determined that it would be best to determine a "general rate increase average" for each Page 8 Commercial Service category to provide an understanding of the Franchise Fee rate increase in FY 2009 ~5ee Chart Below). The general rate increase average is defined as the most common pickup option utilized within the category. As an example, Staff utilized a 3 yard container collected 2 times per week ~i.e., Median) as the general rate increase average for the Commercial Container/Dumpster category. Thus, the Commercial Franchise Fee rate increase for this category increased from $10.80 per month to $21.24 per month and represents a 96.7% increase in the Commercial Container Franchise Fee rate when corr-pared to FY 2(;MOS. Note: Commercial Franchise Fees, when compared from one year to another, does not necessarily compare "apples to apples." This is due to various business and economic conditions (i.e., number of containers change, businesses open and close, container size and/or frequency of collection is altered, businesses partnering to share containers). Thus, the actual Franchise Fee revenue collected generally never equals the exact increase in the Franchise Fee rate. However, this is a useful tool and provides an understanding of whether the Fee received is reasonable. "General Rate Increase Average" of Commercial Services Categories Total Monthly Franchise Fee Increases from FY 2008 to FY 2009 Size of Container Type of Container Pick fJp Frequency Total Monthly Franchise Fee Increase from FY 2DD8 to FY 2009 3 Yard Container/Dumpster 2 times/week 96.7% 3 Yard Front-Load Compactor 2 times/week 61.8% 40 Yard Permanent Roll-Off Compactor 1 time/week 24.1% 30 Yard Open Top (Permanent) Roll-Off 1 time/week 114.7% 9S Gallon Roll-Out Cart 2 times/week 196.7% N/A Commercial Container Maintenance IuJA D% N/A Special Services N/A 0% Total Monthly Franchise Fee =Disposal Costs ~+ Galleetian Costs ~ Container Maintenance -~ Special Service Fees When determining the City's Commercial Franchise Fee, additional fees are included in the calculation, as defined by the City's Franchise Agreement. Listed below, permitted additional fees include: Container Maintenance Fee: This Fee has remained constant and did not have an impact on the City's Franchise Fee collected when compared to FY 2008 & FY 2009. S ecial Services Fee: Additional charges that include but are not limited to "special services for collection of solid waste such as rolling containers out of storage areas, opening doors and gates for access or other such special services." These fees have remained constant (assuming the customer maintains the same service), thus, this Fee did not have an impact on the City's Franchise Fee collected when compared to FY 20DS & FY 2009. Page 9 Administrative Fee: Collected to assist with the City's cost of administering the Solid Waste program. This Fee has been fixed at X0.35 per Commercial container (at least since the inception of the FY 2002 award to BFI). This Fee is not incorporated into the determination of the Commercial customers Franchise Fee, but is included in the Total Monthly Charges and remitted to the City. Further, this monthly amount, due to it being a nominal amount (approximately $350 per month), is recorded within the City's Franchise Fee revenue account. This fee is based on the number of Commercial Cart, Commercial Container/Dumpster and Commercial Compactor accounts within the City. Permanent Rall-Off, Roll-Off Compactors and Open Top (temporary) C&D containers are not charged this fee. Since there has not been an increase in these Fees and no significant increase in customers, there is na impact to the City's total monthly revenues when compared to FY 2008 & FY 2009. In an effort to accurately determine the general average aggregate rate increase far the all of the above types of containers except C&D during this time period, Staff has reviewed and compared the Total Commercial Monthly Franchise Fee received under the old rates - FY 2008 - and the new rates _ FY 2009 - {See Chart t3elowJ. This general average aggregate rate increase was determined by comparing the Tota! Commercial Franchise Fee in August 2008 (FY 2008's last billing period) with the Fee received in October 2008 (FY 2009's first billing period that includes the new rates for all eligible services). Total Monthly Franchise Fees {Excltadin~ C&D) Earned Sample Months - FY 2008 to FY 2009 Aug 2008 Sept 2008 Oct 2DD8 Feb2D09 Mar 2009 (Lash Billing at Billing at Billing at Billing at New Billing at New New New Rates Old Rates Rates Rates Rates FY 2409 FY 2008 FY 2009 FY 2009 FY 20D9 WM Original Monthly Franchise Fee -All Services $27,348 $31,750 $29,4D8 $32,758 $33,9D1 Add: WM Permanent Roll-Off Containers Omitted $0 $4,333 $5,761 $0 $0 Total WM Monthly Franchise Fee $27,348 $35,083 $35,169 $32,758 $33,902 General Average Aggregate Rate Increase (%} - 0.009'° 75.79°~ 77.76% 83.48% 80.67% New Rate Compared with Old Rate {August 200&j Notes: WM Original Monthly Franchise Fee -All Services received Includes Administrative Fees remitted by WM. Permanent Rol[-Off Containers were omitted from WM's Franchise Fee payment for the 4t" Quarter of 2008 (may also be identified as the 1~` Quarter of FY 2409} due to a WM clerical error. WM remitted this Fee in January 2449 and is shown in the above chart. Further, a lengthy explanation regarding this payment is provided below and within Question #1 of WM's written response to Ken MaclVamee's 12 Questions. Since FY 2002, the City's Solid Waste Franchise Agreement provided the selected contractor with an "exclusive" right to provide Open Top {temporary) C&D container services. This resulted in WM coding all Open Top Rall-Off containers #i.e., permanent and temporary C&D} as the same service type (same price) within their computer system. WM is unable to differentiate between the two types of services offered without manually going through each of these customers. As a result, to ensure a comparison of Franchise Fees received under the old rates - FY 200& -and the new rates - FY 2DD9, Staff chose to compare the Fees received in August 2008 with the Fees received in October 2008. This provides the "general aggregate rate increase average" for all container types chat will be utilized throughout this report. Open Top (temporary) C&D container service has been excluded €rom this chart due to the fact that following the implementation of the "non-exclusive' C&^ option, all haulers are eligible to determine and utilize "market rates." Thus, Franchise Fees paid are not determined by Ordinance and a percentage increase. Page 1Q Note: Staff chose to compare the Fees received in August 2008 (old rates) with the Fees in October 2008 (new rates) to ensure a comparison of the Franchise Fee received for all Commercial Services jexcluding open Top (temporary) C&D service. This provides a better comparison of Franchise Fees received. It was determined that September 2008 would not be utilized due to the fact that this month's remittance included Franchised Fees based a combination of services that were billed under "new" rates as well as services billed under the "old" rates. WM implements a monthly billing cycle that does not correspond (or terminate) on the same day for all services. Instead, they provide a billing system that is collected in "arrears" or based on monthly services provided [Permanent Ron-off containers and Open Top (temporary) C&D Roll-Off containers] and those services that are billed in advance of the monthly services to be provided (all other Commercial Containers and Multi-Family Container Maintenance service). Upon review of the general average aggregate rate increase for each of the months listed (See Chart Above), it becomes evident that the percentage amount of Commercial Franchise Fees received (excluding C&D) appears to be consistent. Further, these rates appear to fiall within the mid-point of the Commercial Services Categories that are nsted above. Note: When Open Top (temporary) C&D Franchise Fees remitted by all "non-exclusive" haulers are incorporated into Chart below, it was observed that the general average aggregate rate decreases. This suggests that the amount of C&D Fees remitted have been affected by the sluggish building sector economy. Further, the use of "market rates" may also be driving the cost down, which maintains a direct correlation to the amount of Franchise Fees remitted for C&D services. Total Monthly Franchise Fees Earned Sam le Months - FY 2008 to FY 2009 WM Original Monthly Franchise Fee -All Services Add: WM Permanent Rall-Of€ Containers Omitted Add: WM Open Top {temporary) Rol{-Off Containers Omitted Total WM Monthky Franchise Fee Add: "Non_Exclusive" Open Tap (temp.) Rall-Off Franchise Fee Total Monthly Franchise Fee General Average Aggregate Rate Increase (%) -New Rate Compared with Old Rate [August 2008; & includes C$+D Aug 2D08 Sept 2DDS Oct 2D08 Feb2DD9 Mar 2009 (Last) Billing at Billing at Billing at Billing at Billing at New New New New Old Rates Rates Rates Rates Rates FY 2DD8 FY 2D49 FY 2DD9 FY 2DDS FY 24D9 $27,348 $31,750 $29,408 $32,758 $33,9D1 $0 $4,333 $5,761 $D $0 $0 $10,842 $0 $0 $0 $27,348 $46,925 $35,169 $32,758 $33,9D1 $D $0 $9,951 $8,D63 $8,253 $27,348 $46,925 $45,120 $4D,821 $42,154 D.OU% 71.66% 64.99% 49.26% 54.14% Notes: WM Original Monthly Franchise Fee -All Services received Includes Administrative Fees remitted by WM. Page 11 Work Plan ltem #2. Review the City`s General Ledger accounts to compare actual FY 20Q8 and FY 2llt)9 Commercial Franchise Fee revenues received to determine the actual percentage increase in Franchise Fees over this time period In FY 2008, WM held the "exclusive" Franchise for Open Top {temporary) C&D services and remitted $364,938 in total Franchise Fees to the City. These Fees were calculated as 10% of the billings for Commercial Container/Dumpsters, Front-Load Compactor, Permanent Rall-Off Compactor, Open Tap {permanent} Roll-OfF Containers, Open Tap (temporary) C&D Roll-Off Containers and Commercia! Roll-Out Carts contractor services. In FY 2009, the City removed the "exclusive" C&D franchise option and qualified "non- exclusive" haulers to provide C&D services within the City. This resulted in the "non-exclusive" haulers charging market rates, which are not determined by City Ordinance and does not provide for consistent C&D Franchise Fee revenue budget projections. Thus, there were multiple vendors providing this service and remitting the appropriate 10% Franchise Fee to the City. Although this resulted in a significantly smaller monthly C&D Franchise Fee from WM after October 2008 {even though there was a significant rate increase), this change did not appear to degrade the City's total monthly C&D Franchise Fee revenues (See Chart Be[owy. It reduced the amount remitted by WM since they were no longer the "exclusive" hauler, Multiple vendors are now remitting their Fee back to the City along with a monthly C&D customer list, which was not provided previously. As a result, the City's 2009 FY Franchise Fee received from multiple vendors, including WM, increased 34.4%from FY 2008. Month All Franchise Fees Recorded WM Exclusive Contract FY 20D8 All Franchise Fees Recorded Various Companies Exclusive and Non-Exclusive Contract FY 20D9 October $28,698 $31,750 November 29,006 32,091 December 29,928 29,280 January 28,595 53,920 February 28,633 46,420 March 30,186 40,820 April 29,394 62,580 May 30,812 39,500 June 30,295 32,688 July 28,953 46,177 August 27,348 40,032 September 32,246 35,257 Other 10,842 0 Totals $364,938 $490,515 Annual Commercial Franchise Increase % 34.4% Page 12 Note: The amount ($10,841.51) shown under the row titled "other" in FY 2DD8 represents the September 2008 Qpen Top (temporary) C&D Franchise Fee that was not paid previously by WM. In December 2009, Mr. MacNamee identified that there was an unknown amount of Franchise Fees omitted for September 2008. As a result, the Finance Director promptly contacted WM about this issue. WM then verified this omission and provided the City with the amount earned in September 2D08. A detailed explanation confirming these events are provided in wM's Question #1 of their wr€tten response to Ken MacNamee`s 12 Commercial Questions. Although revenues increased by $125,577, the annual percentage increase in Franchise Fees collected for FY 2008 and FY 2Q09 does not appear to reflect the general average aggregate monthly rate increase for al! container types - 77.76%. Work Plan Item #3. Obtain various WM Commercial Customer Summary Billing Registers (before and after FY 2U08 rate increase) and develop a worksheet combining Customer Summary Billing Registers and sort by customer to ensure comparable customer data !t was found that for many years the City only received a one. (1} page explanation of that month's Franchise Fee remittance along with the corresponding Franchise Fee check. This limited information did not permit for proper review of Franchise Fees received in FY 2009. Further, this did not allow for a detailed comparison of the rate increase that was approved for FY 2009. Thus, the City requested that WM provide a Detailed Billing Register with all future Commercial Franchise payments (business process change implemented). When requested, it was learned that historical customer data was not available due to WM's "live billing system," which is noted in WM's written response to Mr. MacNamee's 12 Questions (See Question #3}. As a result, and in an effort to provide this information, WM committed more than 17 hours manually preparing/developing a comprehensive Customer Detailed Billing Register for February 2009 (See Attached -Exhibit #6y far our further analysis. This report, which attempted to combine multiple reports, was provided on a "one time basis" as a hard copy and could not be received as an electronic file, thus, limiting our analysis. Aware of this issue and understanding the constraints that resulted due to WM's "live system," the City then began to request electronic monthly billing registers prior to the Commercial rate increase (Ordinance #44-08 -October 2008} and the months following in an effort to determine the difference between the monthly Franchise Fees received in FY 2008 with the Fees in FY2009. Further, the provision of this information in an electronic format enabled the City to put this data into useful formats for analysis. As a result, the City received Customer Summary Blllin~ Registers (as opposed to Customer Detailed Billing Registers) for August 2008, September 2008, October 2008, February 2009 and March 2009. These five (5} months of Registers included limited customer data (i.e., type of account, customer, account number, company name, WM service code, total monthly billed amount per customer -includes Franchise Fee and Administrative Fee, total monthly billed amount less the Franchise Fee per customer account and the total monthly Franchise Fee paid per account). A Customer Detaifec~,,Billing,.Register, which was developed manually for February 2009 included significantly more customer data (i.e., ,customer account number, customer name, customer address, container type and size, frequency of pick-up, rate per can, total Page 13 monthly Billing amount, total monthly Franchise Fee charged}. The limited, available information received was then incorporated into a worksheet (see Attached - Fxhibit #7} and compared each customer's total Franchise Fees on a monthly basis. Other relevant information, including container taunts, service characteristics and/or monthly rates, could not be evaluated. When compared with the City's General ted,ger (i.e., revenues received], the,,tatal Franchise Fee from each monthly Customer Billine Reeister matched/equaled the amount of the Franchise Fees remitted to the City. This provides assurance that what WM billed and collected matched the remittance to the City. Work Plan Item #4. Analyze FY 2007, FY 2008 and FY 2Q09 Commercial Container counts to determine changes in the monthly Commercial Franchise Fee received before and after the rate increase -Ordinance #44-08 -effective October 1, 2008 As mentioned earlier, a Customer Detailed Billing Register was unavailable for this time period(except for February 2009), thus, preventing an analysis for this Work Plan Item. Work Plan Item #5. Review a large sample of Commercial Customer rates [monthly billings) and compare with rates provided in Ordinance #44-08 to determine if rates are accurate and properly implemented Since the Assignment of the City's Franchise Agreement in October 2003 (WM took over all "exclusive" Commercial and Residential Solid Waste Collection Services from BFI), it was determined that WM (from December 2003 through September 2008} utilized a Commercial rate structure based upon a "cost per cubic yard" for collection and disposal in accordance with Exhibit 1 of the Franchise Agreement. The initial Commercial Collection rates were determined by the original Franchise Agreement. This Agreement also provided that these rates ("cost per cubic yard"} could be increased in accordance with the annual Consumer Price Index (CPI}, but not to exceed 3%. These "cost per cubic yard" rates were developed annually by the City's Utility Customer Service Division and reviewed and implemented by WM. in addition, to confirm the new annual rates, the Utility Customer Service Division developed and presented a Rate Ordinance to the City Commission annually. This Ordinance defined most new Commercial rates (affected by the annual CPI} to be charged to commercial customers. It did not include those fees and rates that would remain constant as outlined in the Franchise Agreement. In addition to the Commercial collection rates charged by WM, the Solid Waste Authority (SWA} implemented a "per cubic yard" disposal rate. Combined, these fees (collection and disposal} represent the "Contractor Fees." in addition, a Franchise Fee (originally 5% -currently 10% of monthly Contractor Fees}, Administrative Fee {currently $.35 per container) and other related fixed fees (i.e., locking, Container Maintenance Fee, etc} are charged on a monthly basis. Page 14 When determining the total monthly Commercial rate during this time period, it was determined that there was a deviation in the rates provided by the City's Rate Ordinance and the actual rates that were charged. During this Commercial analysis, which was also confirmed within WM's response to Ken MaciVamee's 12 Questions -Question #5 as well WM'S April 6, 2010 Letter (see attached -Exhibit #8), it was determined that these rate deviations were due to a "rounding" issue. This "rounding" issue was made during the application of the "per yard collection rate." To illustrate this issue, please see below the calculations required to determine the "Contractor Fee": Total Manthly_Co_(lection Rate Determination: Monthly Container Yards =Container Size (cu.yd.) * # of Pick-ups per Week * 4.33 weeks Nate: The average number of weeks in a month is determined by dividing 52 weeks by 12 months. This determination could also be viewed as an unending decimal 4.333333...; however, it is common to this round this number to the hundredth position or two places after the decimal, which could lead to a very small change in the number/rate. Thus, creating a "rounding„ issue. Total Monthly Collection Rate =Monthly Container Yards * Collection Rate per cu.yd. x CPI Total Dis osal Rate Determination: Disposal rates are provided by the Solid Waste Authority and are expressed in terms of a cost per ton. The Solid Waste Authority also states there are 134 lbs. per cubic yard. Thus, to calculate the Total Disposal Rate, the following must be completed: Disposal Rate per Cubic Yard = .067 cu.yd. (Disposal Factor) * Disposal Rate per ton Nate: Disposal Factor on a cu.yd. basis =134 lbs. per cu.yd. ; 2,000 lbs. (one ton) Total Monthly Disposal Rate =Disposal Rate per cu.yd. * Total cu.yd. per month Within each of these calculations, various factors and percentages are utilized. Depending upon the number of decimal spaces that these factors and percentages are truncated down to, a rounding issue could result and affect the final Commercial rate that is charged. This rounding factor, as provided in WM's April 6, 2010 letter, could result in the rates deviating from the Rate Ordinance by a few cents -either in WM's favor or the Commercial Customer's favor. In addition to the deviation within the Contractor Fees, a franchise fee of 10% (prior to 2007 - 5%) is applied on these differing rates, which could also lead to an additional difference in the final Commercial rate charged when compared with the approved Rate Ordinance. Although actual Commercial Rates charged (per customer) could not be evaluated due to the unavailability of the requisite data, Staff was able to compare the actual rate structure that was utilized by WM with the corresponding Rate Ordinances for FY 2006, FY 2007, FY 2008, FY 2009 and FY 2010. As a result, it appears, from the limited data and resources available, that this Page 15 deviation in rates, on a monthly basis, was due to the above mentioned rounding issue. Further, it appears that this deviation should not have amounted to a significant level {either gain and/or loss of Franchise Fees) to warrant {i.e., total personnel/staff casts) a further detailed analysis. Beginning in FY 2009 (October 1, 2008), at the direction of the City, WM began utilizing the exact rates that were specifically prescribed within the approved Rate Ordinance {Ordinance #44-08) to ensure consistency. Thus, eliminating the potential for rounding errors as Weil as confusion between the approved Commercial Rates with the Commercial Rates charged. In an effort to confirm that this practice has been implemented, Staff utilized the February Detailed Billing Register that was manually prepared by WM and compared 339 of 1,039 Commercial Customers {32.6%) to determine if the Commercial Rates within the approved Ordinance matched the amount that was being billed. Please note that all rates matched to the approved Rate Ordinance. Note: The City's Rate Ordinance did not provide for all Commercial Compactor service rates. As a result, WM was required to "interpolate" [per www.Dictionary,cnrri - "to insert, estimate, or find an intermediate term in (a sequence)"] the monthly rate fora 4 cu.yd. Commercial Compacted Container. This resulted in a clerical rate error for three {3) Compactors that was the result of a "rounding" error. The City was notified of this error and each of the Commercial Compactor customers affected were notified that their accounts would be credited to ensure the billing amount equaled the approved Commercial Rate. As a result, WM provided a credit to three {3) customers totaling $1,154.81 to correct this issue. A mare detailed explanation of this issue and resolution is provided by WM in their written response to Ken MacNamee's 12 C~uestions {See Attached -Exhibit #5). Since the sample testing found that the rates were correct and properly implemented during this time period, Commercial Rates were also determined not to be a reconciling factor when attempting to identify the reasons for the resulting "percentage gap" when comparing the percentage of Franchise Fees {revenues) received - 34.4% -with the general average aggregate Franchise Fee rate increase of 77.76% for FY 2009. In summary, the exact Commercial Rate amounts did not match the amounts as set forth in prior year Ordinances; however, they do appear to match the current rates. VIlork Plan Item #6. Obtain "Non-Exclusive" C&D Monthly Franchise Activity Reports from October 20€38 through September 2Q09 "Non-Exclusive" Open Top {temporary) C&D Monthly Franchise Activity Reports were obtained from October 2008 through September 2009. These Reports, which are similar to the Customer Summary Billing Registers, are prepared, by each "non-exclusive" C&D hauler, including WM, and provide limited Customer infiormation {i.e., Name, Address, Account Number, Billing Amount and Franchise Fee paid amount). In addition, by obtaining these C&D Monthly Franchise Activity Reports, it confirmed to the City that each "non-exclusive" C&D hauler, Page 16 including WM, maintain this information, which can be provided to support their monthly Open Top (temporary) C&D services Franchise Fee remittances. Work Plan item #7. Review and analyze Commercial Open Top (temporary) C&D activity prior to and after the rate became unregulated (i.e., market rates) in October 1, 20Q$ (September 2Q08 was the last month that WM held the exclusive franchise for G&D collections To complete this Wark Plan Item, Staff reviewed the "non-exclusive" Open Top (temporary) C&D Monthly Franchise Activity Reports along with Total Monthly Franchise Fees Received (See Chart below) for a five (S) month period -August 2008, September 2008, October 2008, February 2009 and March 2009. Total Monthly Franchise Fees Received Sample Months - FY 2008 to FY 2009 WM Or„~,ieinal Monthly Franchise Fee -All Services Add: WM Permanent Roll-Off Containers Omitted Add: WM Open Top (temporary) Rall-Off Containers Omitted Total WM Monthly Franchise Fee Aug 2008 Sept 2008 Oct 2008 Feb2009 Mar 2009 (Last} Billing at Billing at Billing at Billing at Billing at New New New New Old Rates Rates Rates Rates Rates FY 2008 FY 2009 FY 2009 FY 2009 FY 2009 $27,348 $31,750 $24,408 $32,758 $33,901 $0 $4,333 $5,761 $0 $0 $0 $10,842 $0 $0 $0 $27,348 $46,925 $35,169 $32,758 $33,901 Add: "Non-Exclusive" Open Top (temp.} Roll-Off Franchise Fee $0 $0 $9,951 $8,063 $8,253 Total Monthly Franchise Fee $27,348 $46,925 $45,120 $40,821 $42,154 "General Average" Rate Increase (%} -New Rate O.flO% 71.60% 64.99% 49.26% 54.14% Compared with Old Rate (August 2008} Notes: WM Original Monthly Franchise Fee-All Serv"aces received includes Administrative Fees remitted by WM. During the analysis, it was observed that the general average aggregate rate decreased when C&D Franchise Fee revenues were incorporated into this percentage calculation. !n addition, this chart includes Open Top (temporary) C&D Franchise Fees that were omitted for various reasons: In January 2009, the City received $19.750.17, which represented WM's first payment under the City's "non-exclusive" C&D services option far the 4t~' Quarter of 2005 (October, tVovember and December). Following implementation of the "non-exclusive" C&D services option from an "exclusive" contract, the City's Code Enforcement Division -Community Improvement Department remained in contact with WM to ensure that they were aware of the omitted Franchise Fee payments for this time period. It was at this time (December 2008) that WM was in the process of downsizing due to the shrinking economy. As a result, WM acknowledged that they did not have Staff assigned to track and pay the new Franchise fee during this process and, as a result, omitted this payment until the new "non-exclusive" Page 17 approval process was completed. Throughout this time period, WM remained in contact with the City and continued collecting the requisite Franchise Fee from their customers. On Aprii 1S, 2009, WM issued a check in the amount of $20.433.69, which represented the Franchise Fee for Permanent Roll-Off Container services far September 2008, Octaber 2008, November 2008 and December 2008 that were omitted. Due to a change from an "exclusive" hauler for Open Tap {temporary) C&b services to a "non-exclusive" option, WM changed their accounting system. However, prior to implementing the "non-exclusive" option, WM maintained the same billing code far each of the two {2} types of Roll-Off services [i.e., Permanent Roll-Dff and Open Tap {temporary} C&D Roll-Off], which were included within the "exclusive" system and required a Franchise Fee paymenfi to be remitted on a monthly basis. As a result of these changes, WM claimed that a clerical mistake led to the removal of all Roll-Off services from being included in the City's manthly Franchise Fee. Further, they noted that upon the hiring of new Staff, WM identified this $20,433.59 error and provided payment {April 2009} for the full amount -September 2008 - $4,333.36, October 2008 - $5,760.73, November 2D08 - $5,085.49 and December 2008 - $5,254.11 Note: The issues that resulted in the above two payments {$19,750.17 and $2©,433.69) were identified by Waste Management and/or the City's Code Enforcement Division -Community Improvement Department and were resolved in January 2009 and April 2009, respectively. In January 2010, the City received 10 841.51 for the September 20D8 Open Top {temporary) C&D Franchise Fee that was not paid previously by WM. In December 2DD9, Mr. MacNamee identified that there was an unknown amount of Franchise Fees omitted for September 20D8. As a result, the Finance Director promptly contacted WM about this issue. WM then verified this omission and provided the City with the amount earned in September 2008. Note: A detailed explanation confirming each of the three {3} amounts and events that led to the identified Franchise Fee omissions totaling 51025.37 is provided in Question #1 WM's of written response to Ken MacNamee's 12 Commercial Questions. Following the identification of these omitted Fees {including receipt of revenues}, WM provided a Customer Billing Register for all C&D Container accounts to reconcile all Franchise Fees due and payable during this time period. To ensure a more "true" comparison of this five {5} month period, a!I identified and omitted funds were credited back to the appropriate individual accounts and total manthly revenues earned. When comparing Franchise Fee data during this five {5} month time period {See Chart Above], which is adjusted for the omitted Permanent and C&D Franchise Fees, it was noted that the monthly percentage increase from August 2008 to September 2008 increased to 71.60% following WM's advanced implementation of the rate increase {month in advance}, I-lowever, after September, total Franchise Fee revenues began to steadily decrease {on a percentage basis} when compared with the August 2008 fatal -- 64.99% in October 2008, 49.26% in Page 18 February 2009 and 54.14% March 2008. These decreases in revenues provides for a more logical understanding why FY 2009 Franchise Fee revenue shows an increase of only 34.4% from FY 2008 and does not match and/or is not closer to the general average aggregate rate increase of 77.76% in October 2009. Work Plan Item #8. Review and analyze the effects/impacts of the monthly Commercial Container Customer rate increases [Ordinance #44-08 - Effective October 1, 2008) on the services provided [i.e., # of containers, size of containers, frequency of pickup, combining waste services and business closure) As Hated previously, the general average aggregate Commercial rate increase for all Commercial services after October 15t, 2008 {following approval of Ordinance #44-08) was estimated to be 77.76%. Yet, when Total Franchise Fee revenues are compared for FY 2009 with FY 2008, there appears to be much smaller total increase - 34.4%. As a result, this decrease in revenues leads to the following question: Although annual Franchise Fee revenues increased by $125,577 {$364,938 in FY 2008 and $490,515 in FY 2009) for all Commercial services combined, what prevented Franchise Fee revenues from bein more com arable to the eneral avera e a re ate rate increase of 77.76% for October 2009? Early on in the analysis, WM stated that their business services had declined since the October 1, 2008 rate increase. The main concerns were affiliated with the general economic conditions, including the downturn in the construction and the real estate industries. As a result, Commercial Customers were looking ways to save and cut costs {i.e., reduce container sizes, change pick-up frequency, sharing Containers/Compactors/Ball-Off services and businesses closing). While reviewing the five {5) months of customer data provided by WM, Staff identified that that many Customers were now paying less after the rate increase had been implemented {October 15`) than what they were paying prior to the rate increase. In fact there were 2~.4 Commercial accounts that were billed at a reduced rate, between September 2008 and February 2009. Thus, confirming that the Commercial customers were either reducing the total number of containers, downsizing container sizes, reducing pick-up frequency and/or the business{es) closed. These changes in Commercial services negatively affected almost 21% of the City's fatal Commercial Customer base services since September 2008. This helps to explain__whv the City did not experience an increase Franchise Fee revenues comparable to the eneral avera e. Work Plan Item #9. Review and analyze the February 2009 detailed Commercial Customer Billing Register and reconcile the administrative fees received from WM A monthly Administrative Fee 00.35 per container per months is collected and remitted for all Commercial Cart, Commercial Container/Dumpster and Commercial Compactor accounts. Page 19 Permanent Roll-Off, Roll-Off Compactors and Qpen Top (temporary] C&D containers are not charged this fee. In an effort to complete this Wark Plan Item, Staff reviewed the monthly WM Franchise Fee remittance, which included Administrative Fees, from FY 2008 through FY 2009. To complete this Work Plan Item, Staff utilized the February 2009 Detailed Billing Register, which was prepared by WM and is the only Detailed Register that has been received and provides sufficient data to complete a detailed analysis of Commercial customer services and charges. Following receipt and review of this information, the City prepared an Excel spreadsheet listing all Commercial customers and the number of containers that they maintained (i.e., billed]. Following this analysis, Staff found the following: When reviewed, the City found that WM was billing/charging an Administrative Fee of $0.35 per container. WM remitted a higher amount - $396.90 (based on 1,134 containers] to the City in March 2009 for February 2009 service. The City, with the assistance of Mr. MacNamee, became aware of this issue in the Fall of 2009 when reviewing Administrative Fee graphs prepared by the Finance Director. As a result, it was determined that WM was remitting a higher amount of Administrative Fees than required. The total number of containers should have been 1,044 (a reduction of 94 units Customers] for February 2009 service with a total Fee to be paid of $363.65. In addition, WM found that they were not billing/collecting these customers for this Fee. Thus, the customers were not affected. WM became aware of this issue in March 2009 and removed the inclusion of Roll-Off Containers into the calculation of the monthly Administrative Fee remittances. The City was not notified of this change until one year later. An explanation of this issue is provided by WM within their written response to Mr. MacNamee's 12 Questions. Administrative Fees are billed in advance (paid one month in arrears -similar to Commercial Rolf-4ffj. In November 20x9, the City became aware that WM had failed to submit requisite Administrative Fees far five (5j months -July 2007, August 2007, September 2007, October 2007 and December 2007. The City has received two WM checks representing the full-payment of the total amount due ($1.,873.95]. Note: The City has requested WM to provide written notice of any administrative issues and/ar changes that may affect total revenues received and/or expenditures to be paid to the City. As a result, WM has committed to resolving any future issues by immediately notifying the City, in writing, regarding any additions/deletions to accounts due to administrative circumstances, including the determination of an error. it is the City's recommendation that this information, along with proposed remedies, is reported directly to the City's Contract Administrator by E- mail within 72 hours of identifying the concern. Page 20 Work Plan Etem #1~. Coordinate and bring together all areas of the City that participate in the City's Solid Waste program to encourage communication across departments, resolve public requests for information, evaluate and document (e.g., transparency] the City's various solid waste management business processes and develop administrative and operational recommendations that will be provided in both the Gammercial and Residential Analyses In February 2010, Staff created a Solid Waste Employee Working Group that has met regularly and has a significant impact on the development of the final Commercial Analysis. The Working Group includes the City Manager's Office {myself), the City Attorney, the Community Improvement Director, the Assistant Community Improvement Director/Solid Waste Contract Administrator, the Code Enforcement Executive Assistant, the Finance Director and the IT Division's Senior Programmer. In addition, this Group has been instrumental in developing recommendations that will be provided in both the Commercial and Residential Analyses. In fact, the Group has meet on numerous occasions to resolve various requests for information and to evaluate and document the City's various solid waste management business processes. Specifically, this Working Group has addressed the following: 1. Collecting and organizing all requisite information that will be provided to the City's Financial Review Board far a determination on: a. Whether the City has received all Franchise Fees from WM for Commercial and Construction and Demolition Solid Waste Collection services b. Whether the City overpaid far Residential Solid Waste Collection services due to errors in the number of residential units in each of the four (4) service categories provided within the City 2. Developed policies and procedures that outlines the City's business processes related to Residential and Commercial solid waste. This also includes the identification and implementation of new procedures and recommendations that have already been undertaken by Staff and WM. 3. Completed the Residential Field Inventory to ensure unit counts are correct for the four (4) service categories offered: AGAR -Single Family Curbside Roll-Out Carts BGAR -Rear door/Side door Pick-Up CGAR -Curbside Bag Pick-Up DGAR -Multi-Family Containerized Page 21 Note: This process began an February lst and has been completed. This information will be a key component in the final Residential Analysis that is expected to be presented to the Financial Review Board at a later date. 4. Reclassifying our existing monthly Permitting (Certificate of Occupancy's (CO'sj] reports for all residential and commercial properties, since 2001, into one of the four (4) Service Categories in order to identify new and deleted properties. This will assist in better defining our historical unit counts, which will then be compared with previous WM billings as well as the Solid Waste Authority (SWA) data that is derived from the Palm Beach County Property Appraiser's Office. As information, since Monday, February S, 2010 through Wednesday, March 31, 2010 S37 calendar days), City Staff (including the Working Group and other Staff) has dedicated more than 1,200 total straight hours working specifically on the Residential and Commercial questions along with other solid waste related items that have been requested/required by the City's and Mr. MacNamee's findings. Please Hate that this does not include overtime hours (additional % hours) far Staff that is working through the weekend to complete the Residential Field inventory. Work Plan Item #11. Review, analyze and provide recommendations regarding the Community Improvement Department's (Cf) Commercial Solid Waste Collection business processes to ensure proper monitoring and notification, receipt of detailed monthly Commercial activity and collection of revenues The current Franchise Agreement provides for the City to identify and designate a member of Staff to serve as the Solid Waste, Vegetative and Recycling Collection Services "Contract Administrator." The Contract Administrator is directly responsible for monitoring the performance and field operations of each Solid Waste hauler/contractor doing business with the City. Specifcally, this person is designated to act as the City's Representative during the term of the Franchise Agreement. Thus, all correspondence, changes in services and/or routes, payments, information, fines, etc., should generally be directed to the Contract Administrator far action and/or information. In the past these duties were held by the City's Cade E=nfarcement Administrator, however, since the recent retirement of our long time Administrator, all duties have been shifted to the City's Assistant Community Improvement Director. In an effort to assist with the City's "Clean City" initiative, the City's Community improvement (CI) Department provides the following: Manages and oversees the daily clam-shell truck workload. The clam-shell truck is provided to the City by the contractor (WM) per the Franchise Agreement (Special Terms And Conditions -Solid Waste, Vegetative Waste and Recycling Collection Services - Bid No. 2001-21) to collect debris that is set out early/late with respect to the normal pick-up day Page 22 Monitors the contractor's (WM) performance in collecting garbage, vegetative debris, recycling and special pickups for bath Residential and Commercial customers Responsible for oversight of the "non-exclusive" Open Top temporary) C&D container services provided to City properties- . Receive and review monthly "non-exclusive" C&D Monthly Franchise Activity Reports from all C&D haulers to ensure the appropriate Franchise Fee is remitted on a monthly basis. This check is then transmitted to the Finance Department for deposit. . Levies (financial] fines/penalties against the contractor (WM) for insufficient service levels Distributes Residential and Commercial Roll-Out carts for new units and replaces Roll- out carts that are defaced and/or damaged within the City Monitors all "non-exclusive" C&D containers in the field During this analysis, Staff has evaluated and documented the City's various Solid Waste Management Business Processes related to the Community Improvement Department. The draft business process information is located within "City of Delray Beach -Policies and Procedures -Solid Waste Franchise Agreement Administration -Code Enforcement Division - Community Improvement Department" (See Attached -Exhibit #9]. A final version will be completed at a later date. In addition, the Community Improvement Department, along with the Employee Working Group and WM, developed various administrative and operational recommendations to improve the daily operations and management of the City's Commercial Solid Waste program and ensure accurate Franchise Fees and Administrative Fees are received and may be reconciled. These recommendations are provided below in Work Pian Item #14. Identify important observations and provide recommendations. Work Plan Item #12. Review, analyze and provide recommendations regarding the Finance Department -Utility Customer Service Division's business processes to ensure proper monitoring and notification, receipt of detailed monthly Commercial activity and collection of revenues The Utility Customer Service {UCS) Division is responsible for maintaining the City's master utility billing files (i.e., water, sewer, garbage), meter reading, monthly billing for al! residential and multi-family garbage and water and sewer customers (approx. 2,000 accounts), collecting monthly payments, reviewing Waste Management invoices to ensure accuracy of residential invoices/fees and preparing the monthly request for Residential Solid Waste payment. This Division also receives and deposits all monthly Commercial Franchise Fees, including C&D, and Administrative Fees remitted by WM and other "non-exclusive" haulers. This Utility Customer Service Division also prepares the UCS Division and the City's Sanitation Fund budgets as well as the various (annual] Rate Ordinances (i.e., garbage, water and sewer). Utility Rate Ordinances are prepared, in draft form, and forwarded to WM for their review and approval prior to being presented to the City Commission for consideration during the Public Hearing process. Page 23 Currently, WM submits a Customer Billing Register with their monthly Franchise Fee and Administrative Fee remittance. This is a hard copy report that provided limited data, including total Fees paid that provide for the reconciliation with the check/remittance being submitted. In addition, WM provides a Commercial Container listing, by container size and frequency of pick-up. During this analysis, Staff has evaluated and documented the City's various Solid Waste Management Business Processes related to the Utility Customer Service Division -Finance Department. The draft business process information is located within "City of Delray Beach - Policies and Procedures -Solid Waste Franchise Agreement Administration -Utility Customer Service Division -Finance Department" (See Attached -Exhibit #10}. A final version will be completed at a later date. ]n addition, the Finance Department, along with the Employee Working Group and WM, developed various administrative and operational recommendations to improve the daily operations and management of the City's Commercial Solid Waste program and ensure accurate Franchise Fees and Administrative Fees are received and may be reconciled. These recommendations are provided below in Work Plan Item #14. Identify important observations and provide recommendations. Work Plan Item #13. Rer-iew, analyze and implement WM recommendations regarding bu51nes5 processes to ensure implementation of rate adjustments, proper monitoring and notification, delivery of detailed monthly Commercial activity and collection of revenues Waste Management Inc. of Florida, in accordance with the Franchise Agreement, is responsible for the collection and disposal of Solid Waste and Recycling services for both Residential and Commercial units within the City. Commercial Recycling is not an exclusive franchise per State Statutes, but all other Commercial and Residential services are provided within the City under an "exclusive" Franchise Agreement, which is held by WM. Multiple "non-exclusive" hauling companies have been authorized to collect C&D containers within the City. WM, in accordance with the Franchise Agreement, is responsible for the Commercial Customer Master File, determining (based on billings} and remitting Commercial Franchise Fees and Administrative Fees to the City. In addition to directly billing all Commercial Customers, Waste Management bills Multi-Family Container Rental costs. Within their monthly submission, WM submitted a one (1} page statement explaining how the monthly Commercial Franchise Fee was derived in addition to the check for bath the monthly Franchise Fee and Administrative Fee. As provided by the City Commission Ordinance 50-06 - Amending Chapter 51 "Garbage And Trash -City Cade of Ordinances}, all Franchise Fees are charged as a fixed percentage (10%} of the contractor's billings and all Administrative Fees are calculated as a fixed amount ($4.35} per Commercial Cart, Commercial Container/Dumpster and Commercial Compactor accounts. Permanent Roll-Off, Roll-Off Compactors and Open Top (temporary) C&D containers are not charged this fee. Page 24 According to WM, far each Commercial Account, they assign a customer code and a location code to each customer. In addition, they document containers} size(s) and frequency of Pick- ups} as well as the appropriate rates as well as other pertinent customer information. This information is transmitted monthly to WM's home office, in Texas, where the monthly customer invoices are prepared and mailed to the City's Commercial Customers. Commercial Customers are billed in advance of the service being rendered, while Open Top (temporary} C&D, Permanent Roll-Off Container and Roll-Off compactor customers are billed in arrears (following the service being rendered}. All Roll-Off customers are billed following their service since the disposal costs are based upon the actual weight of the container for each Pick-up whereas the Commercial Containers/Dumpsters maintain a fixed rate for disposal that is built into their rate structure. Since the City bills all Residential customers, Waste Management invoices the City for their monthly collection casts for these services. Collection costs include: garbage, trash (vegetative} and recycling. Disposal fees for Residential units are charged to all homeowners by the Solid Waste Authority (SWA} through anon-Ad Valorem assessment program, which is included on each property owner's annual tax bill. The monthly collection costs are broken down by type of service. The unit count that is utilized to calculate monthly costs paid by the City is updated using information received from the City's Community improvement Department - "C0 Report" that provides information on new and demolished units within the City. Work Plan Item #14. Identify important observations and provide recommendations DBSERVATION: The Commercial Franchise Fee Analysis provides an analysis of the Gity's Commercia! Solid Waste program. The Analysis included a summary of the program's history (since 2001), outlined the major services that are required to be provided by the Contractor, noted the duties of the Contract Administrator and provided the provisions far the various Commercial Rates, billing and remittance of the Franchise Fee and other charges, including Administrative Fees. In addition, fourteen (14] Work Plan items were developed in an attempt to confirm the proper receipt of Commercial Franchise Fees. It should be noted that neither a financial audit nor a forensic audit was undertaken during this process. OBSERVATION: All Commercial Franchise rate increases and revenues received were reviewed dating back to FY 2002, the time when the initial BFI contract became effective. Our analysis showed that from FY 2002 to FY 2006 (excluding the years impacted by the hurricanes and the C&D law suit}, increases in Commercial Franchise Fee revenues appear to compare favorably with the corresponding year's rate increase (as a percentage}. DBSERVATION: In FY 2007, the Commercial Franchise Fee was increased from 5% to 10% and resulted in a significant increase in revenues collected by the City ($339,543]. Unfortunately, due to the skewed data from the hurricane and C&D law suit years, we are unable to make any significant comparisons to ensure accuracy of remitted Fees. However, when the FY 2007 revenues are compared with the revenues received in FY 2008 (with a very small rate increase], the remitted Franchise Fee appears to be in line. gage zs DBSERVATION: In FY 2008, a .84% Commercial Franchise Fee rate adjustment (based on the CPI fora 3 yard container collected 2 times per week) was implemented to accommodate increasing collection costs. As a result of the identified increase in Commercial Containers (17 additional Containers), the small CPI increase and when FY 2007 & fY 2008 Franchise Fees are compared, revenues collected increased by 4.29% (FY 2007 - $339,543 and FY 2008 - $354,D96). Thus, suggesting appropriate Franchise Fees were remitted back to the City for FY 2008. OBSERVATION: In FY 20D9, Staff determined a general rate increase average for each Commercial Services category [i.e., Commercial Container/Dumpsters, Front-Load Compactor, Permanent Roll-Off Compactor, Open Top (permanent) Roll-Off Containers, Commercial Roll- Out Carts, Commercial Container Maintenance and Special Services] and the amount of the rate increase for each service category, pursuant to the Commission's approval of Ordinance #44-08, ranged from a low of 0% to a high of 193.6%. However, in an effort to accurately determine the general average aggregate rate increase for the all of the above types of containers during this time period, Staff reviewed and compared the Total Commercial Monthly )=ranchise Fee received under the old rates - FY 2008 -and the new rates - FY 2009 - 77.76%. Upon review of the general average aggregate rate increase far each of the listed months, it was observed that the amount of Commercial Franchise Fees received (excluding C&D) appears to be consistent. Further, these rates appear to fall within the mid-paint of the Commercia! Services Categories. OBSERVATION: Additional fees are included in the Franchise Fee calculation, as defined by the City's Franchise Agreement, and include: Container Maintenance Fees and Special Services Fees . In addition, Administrative Fees are charged on a monthly basis. RECOMMENDATION: To facilitate a monthly analysis of ail Commercial Franchise Fee revenue earned, all Franchise Fee remittances should be provided one (1) month in arrears. The receipt of and the City's acceptance of WM's reply to the September 2009 Receivable Confirmation should clarify this issue. OBSERVATION: Currently, the Franchise Agreement (Section 4. Solid Waste and Vegetative Waste Collection Service: C, Commercial Solid Waste Collection Service - 8. Special Services) provides that the "Rate charged for Special Services may not exceed the special service rates as listed in Exhibit I. In the event the requested specia! service is not included within Exhibit I, the Contractor may negotiate with the customer for the rate. Upon failure of the parties to reach an agreement on the rate, the Contract Administrator shall establish the rate. The Contractor shall be responsible for billing and collection of payment for ail Special Services. This indicates that there is no requirement to establish Fees for non-rate specified services through a formal Amendment andJor Ordinance. They are permitted as a result of the approved Franchise Agreement. However, earlier in the Franchise Agreement (under the same section -Section 4. Solid Waste and Vegetative Waste Collection Service: C. Commercial Solid Waste Collection Service - "special Services"), it states "If the Contractor provides special services, such charge must be separately stated under the "RATES FOR SERVICES" disclosure statement. The maximum for these Special Service rates are fixed by the City." As a result, it appears that there are multiple types of Special Services permitted under the Franchise Agreement -some that are a fixed cost and some that are negotiable. The City, at least since the inception of this Page 26 Franchise Agreement in October 2001, has not provided reference for these Fees within a formal City Ordinance. The Fees within the original Franchise Agreement provided WM's maximum billing amounts. RECOMMENDATION: in an effort to ensure that all Special Service Fees are fully documented and there is a Strang level of consistency, Staff recommends exploring the option of developing a more clear reference to the Contractor's (WM's) ability to charge a Special Service Fee through a forma( Amendment to the Franchise Agreement and/or within the annual Rate Ordinance. O65ERVATION: In FY 2009, the City removed the "exclusive" C&D franchise option, which resulted in the "non-exclusive" haulers charging market rates that are not determined by City Ordinance and does not provide for consistent C&D Franchise Fee revenue budget projections. This resulted in a smaller monthly C&D Franchise Fee from WM after October 2008. Because of this, along with the fact that monthly Franchise Fee information prior to the change in C&D services to a "non-exclusive option" din October 2008) is not available, means the change in the volume for C&D services cannot be determined. RECOMMENDATION: It is the City's recommendation that a monthly Customer Billing Register be provided by all Contractors ~"exclusive" and "non-exclusive") electronically (i.e., E-Mail), in Excel format, to the City with all remittances to allow for electronic comparisons and analysis. This document should include customer name, service address (number and street name should be provided in separate cells), container type, frequency of pick-u p, Special Service fees (if applicable), Administrative Fee (if applicable), tots{ monthly Franchise Fee earned from the service provided and total monthly billed amount earned from the service provided. RECOMMENDATION: To ensure the accuracy of the monthly C&© Franchise Fee remitted, this document should be reviewed by the Contract Administrator and/or their designee, on a monthly basis. RECOMMENDATION: Detailed internal controls (i.e., business process policies and proceduresy will be developed at a later date. OBSERVATION: Since the Assignment of the City's Franchise Agreement in October 2003, it was determined that there was a deviation in the total monthly Commercial rates outlined within the City's Rate Ordinance and the actual rates that were charged. During this Commercial analysis, it was determined that these rate deviations for FY 2006, FY 2007, FY Z00$, FY 2009 and FY 2010 were due to a "rounding" issue, which is evident during the application of the "per yard collection rate." Further, it appears that this deviation should not have amounted to a significant level neither gain and/or lass of Franchise Fees) to warrant (i.e., total personnel/Staff costs) a further detailed analysis. RECOMMENDATION: Beginning in FY 2009 (October 1, 2008), at the direction of the City, WM began utilizing the rates that were specifically prescribed within the approved Rate Ordinances (Chapter 51 "Garbage And Trash -City Code of Drdinances) to eliminate the potential for Page 27 rounding errors and confusion between the approved Commercial Rates with the Commercial Rates charged. RECOMMENDATION: Staff recommends the development of a monthly rate structure for all Commercial Services and for all pick-up options available and include this within the annual Rate Ordinance. These new rates may be prepared by either the City and/or the Contractor, provided that there is written, electronic (i.e., E-Mail} confirmation that both the City and the Contractor have reviewed and confirmed the proposed rates. These rates, following Commission approval, should be the final rates utilized by the Contractor for all Commercial Customers. This will remove the need for "interpolation" and ensure that both the City and the Contractor (WM} agree on "rounding rules" and prevent any future inconsistent billing issues. OBSERVATION: Staff utilized the February 2DD9 Detailed Billing Register to sample test/compare 339 of 1,039 Commercia! Customers (32.6%} in FY 2009 and it was found that the rates were correct and properly implemented during this time period. In addition, these Rates were determined not to be a reconciling factor when attempting to identify the reasons for the resulting "percentage gap" when comparing the percentage of Franchise Fees (revenues} received - 34.4% -with the general Franchise Fee rate increase average of 77.76% for October 2009. OBSERVATION: Staff reviewed the "non-exclusive" Open Tvp (temporary) C&D Monthly Franchise Activity Reports added to the Total Monthly Franchise Fees Earned for a five (5} month period -August 2008, September 2008, October 2008, February 2009 and March 2009. The general average aggregate rate decreased when C&D Franchise Fee revenues were incorporated into these monthly totals, which suggested that the struggling construction and development economy really affected the City's overall Franchise Fee revenues. When comparing Franchise Fee data during this five (5} month time period, which is adjusted for the omitted Permanent and C&D Franchise Fees, it was noted that the monthly percentage increase from August 2008 to September 2008 increased to 71.50% following the rate increase. However, after September, total Franchise Fee revenues began to steadily decrease (on a percentage basis} when compared with the August 2008 totals -and provides for a more logical understanding why FY 2009 Franchise Fee revenue shows an increase of only 34.4% from FY 2008 and does not match and/or is not closer to the general average aggregate rate increase of 77.76% far October 2009. OBSERVATION: During this five (5} month time period, three (3} Franchise Fee omissions were identified totaling $51,025.37: In January 2009, the City received $19,750.17, which represented WM's first payment under the City's "non-exclusive" C&D services option far the 4th Quarter of 2008 (October, November and December}. In April 2009, the City received $20,433.69, which represented the Franchise Fee for Permanent Rall-Off Container services for September 2008, October 2008, November 2008 and December 2008. In January 2010, the City received $10,841,51 for the September 2008 Open Tap (temporary} C&D Franchise Fee that was not paid previously by WM. Page 28 OBSERVATION: Although annual Franchise Fee revenues increased by $125,577 {$364,938 in FY 2008 and $490,515 in FY 2009) for all Commercial services combined, Staff attempted to find out what prevented Franchise Fee revenues from being more comparable to the general average aggregate rate of 77.76%? WM had previously claimed that their business services had "dropped off' since the October 1, 2008 rate increase due to the general economic conditions and Commercial Customers were looking ways to save and cut costs. While reviewing the five {5} months of customer data provided by WM, it was determined that that many Customers were now paying less after the rate increase had been implemented {October 1~} than what they were paying prior to the rate increase. In fact, there were 214 Commercial accounts that were billed at a reduced rate, between September 2008 and February 2009. Thus, confirming that the Commercial customers were either reducing the total number of containers, downsizing container sizes, reducing Pick-Up frequency and/or the business{es} closed. These changes in Commercial services negatively affected almost 21% of the City`s total Commercial Customer base/services since September 2008. This helps to explain why the City did not experience an increase Franchise Fee revenues comparable to the general average. OBSERVATION: The City found, in November 2009, that WM had failed to submit requisite Administrative Fees for five {5} months -July 2007, August 2007, September 2007, October 2007 and December 2007. The City has received two WM checks representing the full-payment of the total amount due {$1,873.95}. OBSERVATION: In an attempt to reconcile the Administrative Fees received from WM, Staff found that WM was paying an Administrative Fee {$0.35 per container} on Roll-0ff Containers in addition to Commercial Containers {Note: Roll-Off Containers are not subject to this Fee). In addition, it was found that WM was not collecting these customers for this Fee. Thus, the customers were not affected. As a result, WM immediately excluded these containers from all future Administrative Fee payments - beginning in March 2009 -and reduced the total number of Commercial Customers with Commercial Cart, Commercial Container/Dumpster and/or Commercial Compactor services from 1,134 to 1,040 {a reduction of 94 Customers}. This reduction in Customers resulted in a lower Administrative Fee remittance of approximately $33 per month or $400 per year. RECOMMENDATION: The City has requested WM to provide written notice of any administrative issues and/or changes that may affect total revenues received and/or expenditures to be paid to the City. WM has committed to resolving any future issues by immediately notifying the City, in writing, regarding any additions/deletions to accounts due to administrative circumstances, including the determination of an error. It is the City's recommendation that this information, along with proposed remedies/resolutions identified, are reported directly to the City's Contract Administrator by E-mail within 72 hours of identifying the concern. RECOMMENDATION: As provided within the approved Franchise Agreement, Section 4.C.3.b -- Disclosure -the Contractor should continue to provide all Commercial Customers with an annual disclosure statement that provides all required language and a disclosure of rates and/or changes for all Commercial services. Page 29 OBSERVATION: Beginning in February 2010, Staff created a Solid Waste Employee Working Group that has met regularly and has been instrumental in resolving various requests for information and evaluating and documenting i;e.g., transparency) the City's various solid waste management business processes. OBSERVATION: The City's Community Improvement -Code Enforcement Division charges a Special Collection Fee to both Residential and Commercial properties that place their vegetative debris, bulk trash and other debris out far collection either before or after their regular collection day(s). This is done so that neighborhoods, business communities, etc. do not have to endure piles of debris either in visible, private areas and/or within City Rights-of-Way for extended periods of time. This Fee is currently $11.50 per cubic yard and is charged directly to the customer on their monthly Utility Bill. Currently, the City collects this waste with afull-time clamshell truck with driver (provided by WM) and assigned to the Code Enforcement Division. This truck and driver is provided as part of the original Bid Documents - 81D NO. 2001-21 - SpecialTerms and Conditions -Solid Waste, Vegetative Waste and Recycling Collection Services and is incorporated into the Franchise Agreement as provided by the General Terms and Conditions of this Document. Amore detailed discussion on this issue, along with a RECOMMENDATION, will be provided within the Residential Analysis. RECOMMENDATION: A recommendation will be provided in the upcoming Residential Analysis. Note: The recommendations outlined with this analysis were developed by the Solid Waste Employee Working Group as well as through discussions with WM on how to improve the daily management and operations of the City's Commercial Solid Waste program. Many of the recommendations require City Commission approval, however, many others can/have been implemented. V. Conclusion As shown within this analysis, numerous barriers (i.e., "live system," lack of detailed customer data, communication, etc.) prevented a complete and detailed determination from being completed as to whether appropriate Commercial Franchise Fees have been received since the inception of the current Franchise Agreement (FY 2002). It should be noted that this determination includes the payment of $51,025.37 in Commercial Franchise Fees as well as $1,873.95 in Administrative Fees for two separate five (S) month periods. As defined within this analysis, as well as WM's written responses to Ken MaclVamee's 12 Questions, a majority of this funding (almost $44,000) was being tracked by City Staff ($19,750.17) to fund the "non-exclusive" C&D Franchise Fee for the 4t~' Quarter of 2008 and the Franchise Fee revenue ($20,433.59) that was identified by WM due to a clerical error that removed Permanent Roll-Off from the Franchise Fee and was a direct result of the transition from an "exclusive" C&D hauler contract to a "non-exclusive" C&D hauler option, which took place in FY 2009 September 2005) and provided for multiple vendors to provide C&D services at market rates. The remaining $10,841.51 of the $51,025.37 can be directly traced to the determination of a local citizen, Mr. MacNamee. Finally, it was found, in November 2009, that Page 30 WM had failed to submit requisite Administrative Fees totaling $1,873.95 for five [5j months - July 2007, August 2007, September 2007, October 2007 and December 2007. Further, there may be some level (very small amounts) of Franchise Fees that may still be recoverable due to the inconsistency between the Franchise Agreement and the with the City's Rate Ordinances that have led to the identified and reported "rounding" issue. This inconsistency clearly does not provide a level of certainty to City Staff and/or our customers that the correct rate was being charged. However, upon further review [See detailed explanation above), it appears that this rate inconsistency resulted in very small monthly Commercial charges that were in the favor of either the Contractor [WM) and/or in the favor of the customer. Essentially this difference could be a "wash." To complete this analysis, which probably cannot be completed due to WM's "live system," an untold and undefined amount of Staff and WM hours must be utilized to potentially identify, what Staff believes, may result in a very small amount of Franchise Fees that could be recovered. Further, additional analysis would be extremely expensive -additional City Staff/personnel costs -and may be proven to cost prohibitive for the small amount of Fees that may be recovered. Instead of pursuing this option, which could be proven to be cost prohibitive [i.e., financial and personnel capital] and may not be productive, Staff is recommending that the City close the review of historical Franchise Fee Analysis and proceed forward in implementing the various policies and procedures that have been recommended by Staff and WM [outlined earlier within this report). These proposed changes, if recommended by the Financial Review Board and adopted by the City Commission, will ensure better communications within the City as well as with the Contractor. In addition, these recommendations will enhance accountability and documentation as well as assist in ensuring that future Commercial Franchise Fees will be closely monitored for accuracy on a monthly basis. l would like to thank all of the members of City Staff that have assisted with this complex and detailed analysis, including Joe 5affard, Finance Director, Lola Butler, Community Improvement Director, Brian Shutt, City Attorney, AI Berg, Assistant Community Improvement Director/Contract Administrator, Danise Cleckley, Administrative Assistant -Community Improvement - Code Enforcement and Pau! Fleetwood, Senior Programmer - Finance Department - IT Division. In addition, I would like to thank Ken MacNamee and Butch Carter for all of their assistance with this effort. Both have proven to be valuable resources. Attachments c: Mayor and City Commission David T. Harden, City Manager Brian Shutt, City Attorney Joseph Safford, Finance Director Lula Butler, Community Improvement Director Harold "Butch" Carter, Waste Management Inc. of Florida Ken MacNamee, Delray Beach Citizen Page 31 City ©fDelray Beach Financial Review Board May 4, 2010 G-~~~~~~ ~~~4~ ~ ~ ~~~Q Mr. Nelson S. "VVoodie" McDuffies Mayor: ~ ~~ 100 N.W. First Avenue Delray Beach, FL 33444 Subject: Review of City staffs Contn~ercial Solid Waste Progrart2 Analysis artd Proposed Business Proeess Recornr~tentlatiatts Dear Mayox McDuffie: On February 10, 2010 the City Commission aslGed the Financial Review Board to review several issues regarding the City's commercial franchise agreement with W ante Management {Mayor's letter), Concurrently, the City initia#ed a comprehensive multi-departzuental staff investigation of the same. topics. The Board determined that to avoid duplication of effort and interference with this work being perfal~ned by staff, the Board would trot conduct asepal-ate audit ar analysis which of necessity ~svauld require participation by the same personnel involved in the staff project. Rather, the Board would wait until staff had finished their analysis and use that inforrxzation to make a recommendation. Mr. Ellingsworth so informed the Mayor. On April 19, 2010 the Beard received electronically 25 megabytes of information developed by staff and a 31 page report from Mr. Richard Reade summarizing staffs findings and preliminary conclusions. (Connexcial analysis.). At its regularly scheduled meeting on Apri120, 2010 Mx. Reade presented this summary report to the Board. Mr, Ken Mael+lamee was present and participated in the discussion. Based on this discussion Mr. Reade xrxade several format and presentation changes to the repox, which the Board discussed in a special purpose session on Apri130 with Mr. Reade and Mr.lVlacNarnee again participating. Although the Board did not participate directly in the staff analysis, the final version, of the report incorporates the Board's suggestions, and input from these tFVO discussions. uestion 1: Has the City received all the franchise fees ive should be paid by Vdaste Management for commercial and construction and demolition solid waste collection seiviees? The Board agrees with staffs primary conclusion: As shown within this analysis, numerous barriers (i.e., "live system," lack of detailed customer data, communication, etc.) prevented a complete and detailed dcterminatian from being completed as to whether appropriate Commercial Franchise Fees have been received since the inception of the cun•ent Franchise Agreement (FY 2002). (p. 30) Page t of 2 City of Delray Beach Financial Review Board. Corollary Ouestion 1: is tl~e City receiving all necessary information from. Waste Management and does the City have in place processes to regctlarly review such infoi~nation and provide reasonable assurance that the City is receiving all franchise fees due'? With respect to the first paid of this question, the Board believes that staffs primary conclusion, cited above, clearly shows that the City is not currently receiving all necessary information. With respect to the second part of this question, the Board agrees wi#h staffs concluding recaxnmendation: Staff is recommending that the City close the review of historical Franchise Fee Analysis and proceed forward in implementing the various policies and procedures that Dave been recommended by staff and W ~. (p,31) In agreeing with this recommendation, the Board noted that significant business process vvork has been done by staff and reported under Work Pian Items 14 - 14 (pp. 21 - 34}. The Board supports the specific recornnxendations in these sections and recognizes and supports staffs intention to build detailed business processes based on these recommendations. The Board emphasizes that the success of man of these racers irri ravemen#s will rest lar el oz~ the ahiii of Waste Marra ement to rovide detailed data in su ort of their franchise fee calculations. As suggested by staff, the Board will review these policy and procedural changes when they are available, and will then provide Mx. Reade with our comments. References 1. {Mayor's letter}. Februazy 14, 20 i0 letter from 1Vlayor McDuffze to Howard Ellingsworth. 2. (Commercial Analysisj. Comrnerciat Solid Waste Progrartf Analysis artd Proposed Business Process Recommendatfotts. April 28, 2410 The Board wishes to corrrmend and thank Mx. Reade and his staff colleagues for their efforts an tlris project. Sincerely, f ~/ ~._... . Howard Ellingsworth, Cha' e; Joseph Safford Richard Reade Page 2 of 2