City of North Lauderdale, Florida

Transcription

1 Comprehensive Annual Financial Report Fiscal Year Ended September 30, 2012 PREPARED BY THE FINANCE DEPARTMENT STEVEN CHAPMAN II, FINANCE DIRECTOR SENDIE RYMER, CONTROLLER

2

3 Comprehensive Annual Financial Report Fiscal Year Ended September 30, 2012 Table of Contents INTRODUCTORY SECTION Letter of transmittal Certificate of achievement Organizational chart List of principal officials PAGE i iii iv v vi FINANCIAL SECTION Independent Auditor s Report 1 2 Management s discussion and analysis 3 13 Basic financial statements: Government-wide financial statements: Statement of net assets 14 Statement of activities Fund financial statements: Governmental funds: Balance sheet Reconciliation of governmental funds balance sheet to the statement of net assets 19 Statement of revenues, expenditures, and changes in fund balances Reconciliation of the statement of revenues, expenditures, and changes in fund balances of of governmental funds to the statement of activities 22 Statement of revenues, expenditures, and changes in fund balances budget to actual general fund Statement of revenues, expenditures, and changes in fund balance budget to actual special revenue funds fire/rescue fund 25 Statement of revenues, expenditures, and changes in fund balance budget to actual special revenue funds - North Lauderdale Water Control District Fund 26 Proprietary funds: Statement of net assets 27 Reconciliation of the statement of net assets proprietary funds to the statement of net assets 28 Statement of revenues, expenses, and changes in net assets 29 Reconciliation of the statement of revenues, expenses, and changes in net assets to the statement of activities 30 Statement of cash flows Fiduciary fund: Statement of assets and liabilities 33 Notes to financial statements Required Supplementary Information (unaudited): Schedule of funding progress 56 Schedule of employer contributions 57

4 Comprehensive Annual Financial Report Fiscal Year Ended September 30, 2012 Table of Contents FINANCIAL SECTION PAGE Supplementary Information: Combining and individual fund statements and schedules: Nonmajor governmental funds: Combining balance sheet 58 Combining statement of revenues, expenditures and changes in fund balances 59 Internal service funds: Combining statement of net assets 60 Combining statement of revenues, expenses, and changes in net assets 61 Combining statement of cash flows Statement of changes in assets and liabilities agency fund 64 Schedule of revenues, expenditures and changes in fund balance budget to actual special revenue funds parks and recreation fund 65 Schedule of revenues, expenditures and changes in fund balance budget to actual debt service fund 66 STATISTICAL SECTION Schedule 1 Net assets by components 67 Schedule 2 Change in net assets Schedule 3 Governmental activities tax revenues by source 70 Schedule 4 Fund balance of governmental funds 71 Schedule 5 Changes in fund balance of governmental funds Schedule 6 Assessed value and estimated actual value of taxable property 74 Schedule 7 Property tax rates direct and overlapping governments 75 Schedule 8 Principal property taxpayers 76 Schedule 9 Property tax levies and collections 77 Schedule 10 Ratio of outstanding debt by type 78 Schedule 11 Ratio of general bonded debt outstanding 79 Schedule 12 Direct and overlapping governmental activity debt 80 Schedule 13 Legal debt margin information 81 Schedule 14 Pledged revenue coverage 82 Schedule 15 Demographic and economic statistics 83 Schedule 16 Principal employers 84 Schedule 17 Full-time equivalent city government employees by function 85 Schedule 18 Operating indicators by function Schedule 19 Capital assets by function 88 COMPLIANCE SECTION Report on internal control over financial reporting and on compliance and other matters based on an audit of financial statements performed in accordance with Government Auditing Standards 89 Management letter in accordance with the rules of the Auditor General of the State of Florida 90-92

5

6

7

8 iv

9 CITY OF NORTH LAUDERDALE, FLORIDA Organizational Chart As of September 30, 2012 v

10 CITY OF NORTH LAUDERDALE, FLORIDA List of Principal Officials As of September 30, 2012 Title Mayor (At Large) Vice Mayor (District D) Commissioner (District A) Commissioner (District B) Commissioner (District C) City Manager City Attorney City Clerk Assistant City Manager Community Development Director Finance Director Human Resource Manager Fire Chief Parks and Recreation Director Police Chief/Public Safety Director Public Works Director Name Jack Brady David G. Hilton Gary Frankel Jerry Graziose Rich Moyle Ambreen Bhatty Samuel S. Goren Patricia Vancheri Vacant Tammy Reed-Holguin Steven Chapman II Jennifer Yarmitzky Rudy Neumann Michael Sargis David Holmes Mike Shields vi

11

12

13 Management s Discussion and Analysis The purpose of financial reporting is to provide financial statements readers with information that will help them make decisions about the entity. The following narrative overview and analysis of the City of North Lauderdale s (the City ) financial activities for the fiscal year ended September 30, 2012 has been prepared by City management for the readers benefit. We encourage readers to consider the information presented herein in conjunction with the Letter of Transmittal, which can be found on pages i through iv of this report. Financial Highlights The assets of the City exceeded its liabilities at the close of the most recent fiscal year by $100,849,194 (net assets). Of this amount, $53,822,762 (unrestricted net assets) may be utilized to meet the City s ongoing obligations to citizens and creditors. The City s total net assets increased by $6,041,444. The increase is primarily attributable to various operational savings resulting from cost containment measures that the City s Administration has been implementing over the last five years. At the close of the most recent fiscal year, the City s governmental funds reported combined ending fund balances of $36,912,682. Approximately $24,686,743 is unassigned General fund balance and is available for spending at the City s discretion. The City Commission has assigned $2,450,000 for emergencies, $750,000 for future capital projects, and $7,311 for scholarships. During the current fiscal year, the City s total governmental activity debt (excluding compensated absences) had a net decrease from the prior fiscal year of $4,180,538 or approximately 48%. This decrease was due to the payment of scheduled debt service for the 2003 Capital Improvement Revenue Bonds and the defeasance of the 2004 General Obligation Bonds. Overview of the Financial Statements This discussion and analysis are intended to serve as an introduction to the City s basic financial statements. These financial statements are comprised of three components; 1) government-wide financial statements, 2) fund financial statements and 3) notes to the financial statements. This report also contains other supplementary information in addition to the basic financial statements themselves. Government-wide Financial Statements The government-wide financial statements are designed to provide readers with a broad overview of the City s finances in a manner similar to a private-sector business. The statement of net assets presents information on all of the City s assets and liabilities, with the difference between the two reported as net assets. Over time, increases or decreases in net assets may serve as a useful indicator of whether the City s financial position is improving or deteriorating. The statement of activities presents information showing how the City s net assets changed during the most recent fiscal year. All changes in net assets are reported as soon as the underlying event giving rise to the change occurs, regardless of the timing of related cash flows. Thus, revenues and expenses are reported in this statement from some items that will only result in cash flows in future fiscal periods (e.g., uncollected taxes and earned but unused vacation leave). 3

14 Overview of the Financial Statements (Continued) Government-wide Financial Statements (Continued) Both government-wide financial statements distinguish functions of the City that are principally supported by taxes and intergovernmental revenues (governmental activities) from other functions that are intended to recover all or a significant portion of their costs through user fees and charges (business-type activities). The governmental activities of the City include general government, public safety, community development, physical environment, streets, parks and recreation, and interest. The business-type activities of the City include water and sewer utilities and storm-water management operations. The government-wide financial statements include not only the City itself (the primary government), but also the legally separate North Lauderdale Water Control District. Financial information for this component unit is blended with the financial information presented for the primary government itself, since the governing body of the District and that of the City s are one in the same the City Commission. The Housing Authority of the City of North Lauderdale, Inc. (the Authority ), a discretely presented component unit, had no balances or activity during the most recent fiscal year. Fund Financial Statements A fund is a grouping of related accounts that is used to maintain control over resources that have been segregated for specific activities or objectives. The City, like other state and local governments, uses fund accounting to ensure and demonstrate compliance with finance-related legal requirements. These financial statements report the City s operations in greater detail than the government-wide financial statements. All of the City s funds can be divided into three categories: governmental funds, proprietary funds and fiduciary funds. Governmental funds are used to account for essentially the same functions reported as governmental activities in the government-wide financial statements. However, unlike the government-wide financial statements, governmental fund financial statements focus on near-term inflows and outflows of spendable resources, as well as on balances of spendable resources available at the end of the fiscal year. Such information may be useful in evaluating a government s near-term financing requirement. Because the focus of governmental funds is narrower than the government-wide financial statements, it is useful to compare the information presented for governmental funds with similar information presented for governmental activities in the government-wide financial statements. By doing so, readers may better understand the long-term impact of the City s near-term financing decisions. The governmental fund balance sheet and the governmental fund statement of revenues, expenditures and changes in fund balances provide a reconciliation to facilitate this comparison between governmental funds and governmental activities. The City maintains several individual governmental funds. Information is presented separately in the governmental fund balance sheet and in the governmental fund statement of revenues, expenditures and changes in fund balances for the major funds which include the General Fund, the Fire/Rescue Special Revenue Fund, the North Lauderdale Water Control District Special Revenue Fund, the Debt Service Fund and the Capital Projects Fund. Data from the other governmental funds are combined into a single, aggregated presentation. Individual fund data for each of these non-major governmental funds is provided in the form of combining statements presented immediately following the notes to the financial statements. The City prepares and adopts appropriated budgets for all of its governmental and proprietary fund types, except the Police Education Special Revenue Fund, the Law Enforcement Special Revenue Fund, and the Capital Projects Funds. 4

15 Overview of the Financial Statements (Continued) Fund Financial Statements - Governmental funds (Continued) A budgetary comparison statement has been provided for the General Fund, the Fire/Rescue Special Revenue Fund and the North Lauderdale Water Control District Special Revenue Fund in the Fund Financial Statements section of this report. Additionally, a budgetary comparison schedule has been provided for the Recreation Special Projects Special Revenue Fund and the Debt Service Fund in the Combining and Individual Fund Statements and Schedules section of this report. These are presented to demonstrate compliance with the budget. They compare the actual amount to the budgeted amount as well as the original adopted budget to the final budget. Proprietary funds provide the same type of information as the government-wide financial statements, only in more detail. The City maintains the following different types of proprietary funds: The Enterprise Funds are used to report the same functions presented as business-type activities in the government-wide financial statements. The City uses Enterprise Funds to account for its water and sewer utilities and storm-water management operations. The City s proprietary fund financial statements provide separate information for the water and sewer utilities operation because it is considered to be a major fund. Internal Service Funds are an accounting device used to accumulate and allocate costs internally among the City s various functions. The City uses internal service funds to account for its vehicle maintenance, information technology and insurance operations. Because these services benefit both the governmental and business-type functions, they have been included within governmental activities and business-type activities in the government-wide financial statements based on the applicable usage. The three internal services funds are aggregated and combined into a single column for presentation in the proprietary fund financial statements. Individual fund data for the internal service funds is provided in the form of combining statements are presented immediately following the notes to the financial statements. Fiduciary funds are used to account for resources held in a trust or as an agent by the City for others. Fiduciary funds are not reflected in the government-wide financial statements because the resources of those funds are not available to support the City s own programs. The accounting used for fiduciary funds is much like that used for proprietary funds. The City only has one agency fund, the Police Explorer Agency Fund. The Notes to the Financial Statements provide additional information that is essential to a full understanding of the data provided in the government-wide and fund financial statements. In addition to the basic financial statements and accompanying notes, this report also contains Other Information. The information includes certain required supplementary information. In addition, the combining statements referred to above are presented immediately following the required supplementary information. Government-wide Financial Analysis Net Assets As noted earlier, over time, net assets may serve as a useful indicator of a government s financial position. At the close of the most recent fiscal year the City s assets exceeded its liabilities by $100,849,194. The following table summarizes the City s net assets at September 30, 2012 and 2011 and is followed by a comparative analysis between the two years. 5

16 Government-wide Financial Analysis (Continued) Net Assets (Continued) Governmental Activities Business-type Activities Total Current and other assets $ 44,423,893 $ 46,215,513 $ 18,798,645 $ 17,858,569 $ 63,222,538 $ 64,074,082 Capital assets 33,804,457 33,366,066 14,083,183 13,717,225 47,887,640 47,083,291 Total assets 78,228,350 79,581,579 32,881,828 31,575, ,110, ,157,373 Noncurrent liabilities 6,193,687 9,626, ,469 68,011 6,304,156 9,694,689 Other liabilities 1,928,741 2,533,044 2,028,087 4,121,890 3,956,828 6,654,934 Total liabilities 8,122,428 12,159,722 2,138,556 4,189,901 10,260,984 16,349,623 Net assets: Invested in capital assets, net 29,336,243 24,717,314 14,083,183 13,717,225 43,419,426 38,434,539 Restricted 3,607, ,607,006 - Unrestricted 37,162,673 42,704,543 16,660,089 13,668,668 53,822,762 56,373,211 Total net assets $ 70,105,922 $ 67,421,857 $ 30,743,272 $ 27,385,893 $ 100,849,194 $ 94,807,750 Of the City s net assets, $43,419,426 or approximately 43% reflects its investment in capital assets (e.g., land, buildings, equipment and infrastructure), net of accumulated depreciation and less any outstanding debt used to construct or acquire those assets. These capital assets are used to provide citizen services and are therefore not available for future spending. Although the City s investment in its capital assets is reported net of related debt, 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. The restricted portion of the City s net assets, $3,607,006 or approximately 4% represents resources that are subject to external restrictions on how they may be used. The remaining balance of unrestricted net assets, $53,822,762 or approximately 53% may be used to meet the City s ongoing obligations to citizens and creditors. As of the end the prior fiscal year, the City reported an increase in its unrestricted net assets, both for the government as a whole, as well as for its separate governmental and business-type activities. For the most recent fiscal year, the City reported a decrease in the unrestricted net assets of its governmental activities and the government as a whole, but reported an increase for its separate business-type activities. For governmental activities, there was a decrease in unrestricted net assets of approximately 13% resulting primarily from the use of resources for the defeasance of the 2004 General Obligation Bonds. The defeasance was considered to have a positive long-term financial impact on the City. For business-type activities, there was an increase in unrestricted net assets of $2,991,421 or approximately 22% of total unrestricted net assets due to various operational savings resulting from cost containment measures that the City s Administration has been implementing over the last five years. 6

17 Government-wide Financial Analysis (Continued) Net Assets (Continued) Changes in Net Assets The following table summarizes the City s changes in net assets for the years ended September 30, 2012 and 2011 and is followed by a comparative analysis between the two years. Governmental Business-type Activities Activities Total Revenues: Program revenues: Charges for services $ 11,405,275 $ 11,463,500 $ 12,395,192 $ 11,309,758 $ 23,800,467 $ 22,773,258 Operating grants and contributions 686,303 1,569, ,303 1,569,651 Capital grants and contributions 116, ,124 - General revenues: Property taxes 7,154,480 7,196, ,154,480 7,196,498 Utility taxes 3,546,402 3,538, ,546,402 3,538,827 Franchise taxes 2,509,174 2,512, ,509,174 2,512,409 Grants and contributions - not restricted to specific programs 4,174,950 4,058, ,174,950 4,058,165 Interest income 205, , ,816 46, , ,208 Total revenues 29,798,525 30,451,696 12,511,008 11,356,320 42,309,533 41,808,016 Expenses: General government 3,242,231 4,144, ,242,231 4,144,034 Public safety 13,442,631 13,974, ,442,631 13,974,052 Community development 1,918,200 1,766, ,918,200 1,766,528 Physical environment 2,220,793 1,965, ,220,793 1,965,421 Streets 1,711,434 1,691, ,711,434 1,691,199 Parks and recreation 3,955,195 3,762, ,955,195 3,762,106 Interest on debt 623, , , ,784 Water and sewer - - 8,522,861 8,284,589 8,522,861 8,284,589 Stormwater , , , ,847 Total expenses 27,114,460 27,720,124 9,153,629 8,839,436 36,268,089 36,559,560 Increase in net assets 2,684,065 2,731,572 3,357,379 2,516,884 6,041,444 5,248,456 Net assets beginning of year 67,421,857 64,690,285 27,385,893 24,869,009 94,807,750 89,559,294 Net assets end of year $ 70,105,922 $ 67,421,857 $ 30,743,272 $ 27,385,893 $ 100,849,194 $ 94,807,750 Governmental Activities Governmental activities increased the City s net assets by $2,684,065 of total net assets resulting from various factors. General revenues of the City exceeded program costs as the City continues to experience operational savings resulting from cost containment measures that the City s Administration has been implementing over the last five years. 7

18 Government-wide Financial Analysis (Continued) Changes in Net Assets - Governmental Activities (Continued) Grants and contributions not restricted to specific programs 14% Revenues by Source Governmental Activities Interest income and other revenues 1% Charges for services Operating grants and contributions Franchise taxes 8% Utility taxes 12% Charges for services 38% Capital grants and contributions Property taxes Utility taxes Franchise taxes Property taxes 24% Operating grants and contributions 2% Capital grants and contributions 1% Grants and contributions not restricted to specific programs Interest income and other revenues Expenses and Program Revenues Governmental Activities 14,000,000 12,000,000 10,000,000 8,000,000 6,000,000 4,000,000 2,000,000 - General government Public safety Community development Physical environment Streets Parks and recreation Interest Expenses Program Revenues 8

19 Government-wide Financial Analysis (Continued) Changes in Net Assets - (Continued) Business-type Activities Business-type activities increased the City s net assets by $3,357,379 representing approximately 56% of the total increase in the City s net assets. The increase resulted from a combination of continuing cost containment measures and an increase in utility service charges. Revenues by Source Business-type Activities Interest income and other revenues 1% Charges for services Interest income and other revenues Charges for services 99% Expenses and Program Revenues Business-type Activities 12,000,000 10,000,000 8,000,000 6,000,000 4,000,000 2,000,000 - Water and sewer Expenses Program Revenues Stormwater 9

20 Financial Analysis of the Individual Major Funds As noted earlier, the City uses fund accounting to ensure and demonstrate compliance with finance-related legal requirements. Governmental Funds The focus of the City s governmental funds is to provide information on near-term inflows, outflows and balances of spendable resources. Such information is useful in assessing the City s financing requirements. In particular, unreserved fund balance may serve as a useful measure of a government s net resources available for spending at the end of the fiscal year. At the close of the most recent fiscal year, the City s governmental funds reported combined ending fund balances of $36,912,682, a decrease of ($2,305,486) or approximately (6%) from the prior fiscal year. Approximately $24,686,743 of this total amount constitutes unassigned fund balance, which is available for spending at the City s discretion. The remainder of fund balance is either nonspendable, restricted, committed, or assigned to indicate that it is 1) not in spendable form, 2) legally required to be maintained intact, 3) restricted for particular purposes, 4) committed for particular purposes, or 5) assigned for particulate purposes. The General Fund is the City s main operating fund. At the end of the current fiscal year, the General Fund s unassigned fund balance was $24,686,743 while the total fund balance reached $27,894,054. As a measure of the General Fund s liquidity, it may be useful to compare both unassigned fund balance and total fund balance to total fund expenditures. The fund balance of the City s General Fund decreased by ($2,100,917) from the prior the fiscal year resulting primarily from the use of resources for the defeasance of the 2004 General Obligation Bonds. The defeasance was considered to have a positive long-term financial impact on the City. The fund balance of the City s Fire/Rescue Special Revenue Fund, a major fund, increased by $51,859 due to an excess of charges for services revenues offset by public safety expenditures. The fund balance of the North Lauderdale Water Control District Special Revenue Fund, a major fund, increased by $119,499 due to an excess in special assessment revenues for exempt properties, which is funded by the General Fund, and the containment of costs. The fund balance of the Debt Service Fund, a major fund, increased by $69,229 primarily from the transfer of resources from the General Fund which was used for the defeasance of the 2004 General Obligation Bonds. The fund balance of the Capital Projects Fund, a major fund, decreased by ($441,448) as a result of the spending of resources for ongoing capital projects. Proprietary Funds The City s proprietary funds provide the same type of information found in the government-wide financial statements, but in more detail. At the close of the most recent fiscal year, unrestricted net assets for the Utilities Fund and the Stormwater Fund totaled $14,379,847 (an increase of $2,756,542) and $1,879,598 (an increase of $172,214) respectively. Other factors concerning the finances of both of these funds have already been addressed in the discussion of the City s business-type activities. 10

21 General Fund Budgetary Highlights For the fiscal year 2012 general fund budget, the difference between the original expenditure budget and the final expenditure budget totaled $250,000, excluding transfers. The budget was amended to increase appropriations in public works for renovations needed to City facilities. Additionally, transfers in from the utility fund were increased by $2,000,000 to clear an interfund balance and transfers out to the debt service fund were increased by $3,935,000 for the defeasance of the City s 2004 General Obligation Bonds. The general fund 2012 budget was also amended for interdepartmental re-allocations to decrease community development $90,000 and increase parks and recreation $90,000. Actual results were greater than the final amended budget, excluding transfers. These results can be attributed to the following: Unanticipated revenue streams including higher than anticipated building permit and code enforcement fines. Various operational savings resulting from cost containment measures that the City s Administration has been implementing over the last five years. These cost containment measures range from freezing vacant positions, consolidating positions, reducing operational hours in various programs, agreeing to lease the school facility, utilizing conservative methods for utilities expenditures, repairs and maintenance, etc. Capital Assets and Debt Administration Capital Assets The City s investment in capital assets, net of accumulated depreciation, for its governmental and businesstype activities as of September 30, 2012 and 2011 amounts to $47,887,640 and $47,083,291, respectively. The following schedule summarizes the City s capital assets by category as of September 30, 2012 and as of September 30, Governmental Activities Business-type Activities Total Land $ 6,396,615 $ 6,396,615 $ 86,365 $ 86,365 $ 6,482,980 $ 6,482,980 Construction in process 1,037, ,413 5,052,018 4,150,870 6,089,446 4,866,283 Residual interest in assets held by Broward County Sheriff's Office 489, , , ,626 Buildings 12,316,991 12,747, ,316,991 12,747,392 Improvements other than buildings 6,178,196 6,265, , ,095 6,565,816 6,695,727 Machinery and equipment 2,272,225 1,290,340 75, ,444 2,347,461 1,399,784 Infrastructure 5,113,376 5,461,048 8,481,944 8,940,451 13,595,320 14,401,499 Total $ 33,804,457 $ 33,366,066 $ 14,083,183 $ 13,717,225 $ 47,887,640 $ 47,083,291 The major capital asset activity that occurred during the fiscal year was comprised of vehicles additions of $925,340, furnishing and equipment additions of $365,250, and water plant renovations of $901,148. Additional information can be found in footnote 5 in the notes to the financial statements. 11

22 Capital Assets and Debt Administration (Continued) Long-term Debt At September 30, 2012, the City had $4,468,214 in debt related to Revenue Bonds secured by specified revenue sources. Governmental Activities Business-type Activities Total General obligation bonds $ - $ 3,695,000 $ - $ - $ - $ 3,695,000 Revenue bonds 4,468,214 4,953, ,468,214 4,953,752 Total $ 4,468,214 $ 8,648,752 $ - $ - $ 4,468,214 $ 8,648,752 The City s debt decreased from the prior year by $4,180,538 or approximately 48%. This decrease was due to the payment of scheduled debt service for the 2003 Capital Improvement Revenue Bonds and the defeasance of the 2004 General Obligation Bonds. The defeasance was considered to have a positive long-term financial impact on the City. Additional information can be found in footnote 8 in the notes to the financial statements. Economic Factors and Next Year s Budget A large part of the City s strategic planning and annual budget process involves Commission and staff workshops. During these workshops, the City s past and current operations are reviewed in detail and discussions are held regarding the City s future vision for operations including staffing, facilities and public services. In addition to the City s operations, initiatives for major capital expenditures are discussed at length. Long range goals, economic factors, staffing implications and available financial resources assist the Commission in prioritizing their goals and objectives for the coming fiscal year. In developing the fiscal year 2013 Budget and Capital Improvement Program, the following economic factors were considered: For fiscal year 2011, the City realized a 25% decrease in its taxable base. For fiscal year 2012, another reduction in assessed valuation occurred, although the amount was not as large as the prior year. The assessed valuation of the City has fallen again for fiscal year 2013 but appears to be at the bottom. Additionally, due to the unstable financial market and the reduction in consumer spending, intergovernmental revenue (including sales tax allocations and shared revenue) and interest rates on investments have not increased. Even with these financial obstacles, in 2012 the City was able to defease its 2004 General Obligation Bonds. The City s operating millage rate will be mils and the debt millage rate was reduced to mils. The City s Fire/Rescue special assessment rates for single and multi-family units decreased. 12

23 Economic Factors and Next Year s Budget (Continued) The City would continue to pay cash (rather than finance) vehicles and certain capital projects whenever feasible. A utility rate study was completed in fiscal year 2007 to ensure that the utility revenue keeps pace with the continually changing needs and costs of essential service. After performing a thorough analysis of the Utility Fund s operational and capital requirements, the engineers recommended a 5% annual increase. Water and sewer utility rates were revised in March 2011 and have not been increased. Requests for Information These financial statements are designed to provide citizens, taxpayers, customers, investors and creditors with a general overview of the City s finances and to demonstrate the City s accountability. If you should have any questions pertaining to the information presented in this report or would like additional information, please contact the Finance Department located at 701 SW 71 st Avenue, North Lauderdale, Florida

24 This page intentionally left blank.

25 Statement of Net Assets September 30, 2012 Primary Government Governmental Business-type Activities Activities Total Assets Cash and equity in pooled cash $ 12,740,635 $ 4,565,525 $ 17,306,160 Investments 28,304,501 11,725,048 40,029,549 Accounts receivable, net of allowances 3,243,327 1,310,097 4,553,424 Prepaid costs 135, ,430 Restricted assets: Cash - 1,197,975 1,197,975 Capital assets not being depreciated: Land 6,396,615 86,365 6,482,980 Construction in progress 1,037,428 5,052,018 6,089,446 Residual interest in equipment 489, ,626 Capital assets, net of accumulated depreciation: Buildings 12,316,991-12,316,991 Improvements other than buildings 6,178, ,620 6,565,816 Machinery and equipment 2,272,225 75,236 2,347,461 Infrastructure 5,113,376 8,481,944 13,595,320 Total assets 78,228,350 32,881, ,110,178 Liabilities and Net Assets Liabilities: Accounts payable and other liabilities 1,719, ,196 2,504,113 Retainage payable - 45,916 45,916 Accrued interest 97,277-97,277 Unearned revenues 111, ,547 Payable from restricted assets - 1,197,975 1,197,975 Noncurrent liabilities: Due within one year: Bonds payable 508, ,875 Due in more than one year: Compensated absences 1,138, ,469 1,248,942 Net Other Post Employment Benefit obligation 587, ,000 Bonds payable 3,959,339-3,959,339 Total liabilities 8,122,428 2,138,556 10,260,984 Net assets: Invested in capital assets, net of related debt 29,336,243 14,083,183 43,419,426 Restricted for: Fire rescue 2,446,545-2,446,545 Water Control District 770, ,082 Police education 11,937-11,937 Law enforcement 278, ,855 Grants 99,587-99,587 Unrestricted 37,162,673 16,660,089 53,822,762 Total net assets $ 70,105,922 $ 30,743,272 $ 100,849,194 See Notes to Financial Statements 14

26 Statement of Activities Fiscal Year Ended September 30, 2012 Program Revenues Charges Operating Capital for Grants and Grants and Function/Program Expenses Services Contributions Contributions Primary government: Governmental activities: General government $ 3,242,231 $ 5,514,121 $ - $ - Public safety 13,442,631 4,616,682 18,870 - Community development 1,918, , ,879 - Physical environment 2,220, ,554 - Streets 1,711, Parks and recreation 3,955, , ,124 Interest 623, Total government activities 27,114,460 11,405, , ,124 Business-type activities: Water and sewer 8,522,861 11,664, Stormwater 630, , Total business-type activities 9,153,629 12,395, Total primary government $ 36,268,089 $ 23,800,467 $ 686,303 $ 116,124 General revenues: Property taxes Utility taxes Franchise taxes Grants and contributions not restricted to specific programs Interest income Total general revenues Change in net assets Net assets, beginning Net assets, ending See Notes to Financial Statements 15

27 Statement of Activities Fiscal Year Ended September 30, 2012 Net (Expense) Revenue and Changes in Net Assets Primary Government Governmental Business-type Activities Activities Total $ 2,271,890 $ - $ 2,271,890 (8,807,079) - (8,807,079) (519,282) - (519,282) (2,098,239) - (2,098,239) (1,711,434) - (1,711,434) (3,418,638) - (3,418,638) (623,976) - (623,976) (14,906,758) - (14,906,758) - 3,141,564 3,141,564-99,999 99,999-3,241,563 3,241,563 (14,906,758) 3,241,563 (11,665,195) 7,154,480-7,154,480 3,546,402-3,546,402 2,509,174-2,509,174 4,174,950-4,174, , , ,633 17,590, ,816 17,706,639 2,684,065 3,357,379 6,041,444 67,421,857 27,385,893 94,807,750 $ 70,105,922 $ 30,743,272 $ 100,849,194 See Notes to Financial Statements 16

28 Balance Sheet Governmental Funds September 30, 2012 Major Funds North Lauderdale Water Control General Fire/Rescue District Fund Fund Fund Assets Cash and equity in pooled cash $ 8,370,305 $ 279,804 $ 694,850 Investments 19,225, ,557 75,232 Accounts receivable, net of allowances for uncollectible accounts 1,208,153 1,672,571 - Total assets $ 28,804,100 $ 2,569,932 $ 770,082 Liabilities and Fund Balances Liabilities: Accounts payable and other liabilities $ 832,444 $ 123,387 $ - Unearned revenue 77, Total liabilities 910, ,387 - Fund balances: Restricted for: Fire rescue - 2,446,545 - Water Control District ,082 Police education Law enforcement Grants Committed for: Debt service Parks and recreation Assigned to: Future capital projects 750, Capital projects Contingencies 2,450, Scholarships 7, Unassigned 24,686, Total fund balances 27,894,054 2,446, ,082 Total liabilities and fund balances $ 28,804,100 $ 2,569,932 $ 770,082 See Notes to Financial Statements 17

29 Balance Sheet Governmental Funds September 30, 2012 Major Funds Debt Capital Other Total Service Projects Nonmajor Governmental Fund Fund Funds Funds $ 29,173 $ 1,693,664 $ 128,826 $ 11,196,622 64,446 3,741, ,256 24,008, ,603 3,243,327 $ 93,619 $ 5,435,109 $ 775,685 $ 38,448,527 $ - $ 186,353 $ 282,114 $ 1,424, , , , ,059 1,535, ,446, , ,937 11, , , ,587 99,587 93, , ,247 69, ,000-5,248,756-5,248, ,450, , ,686,743 93,619 5,248, ,626 36,912,682 $ 93,619 $ 5,435,109 $ 775,685 $ 38,448,527 See Notes to Financial Statements 18

30 Reconciliation of Governmental Funds Balance Sheet to the Statement of Net Assets September 30, 2012 Total fund balance - governmental fund $ 36,912,682 Amounts reported for governmental activities in the statement of net assets are different because: The cost of capital assets acquired is reported as an expenditure in the governmental funds. The statement of net assets includes those capital assets, net of accumulated depreciation among the assets of the government as a whole. Cost of capital assets 65,490,196 Accumulated depreciation (31,685,739) 33,804,457 Liabilities not payable from current available resources are not reported as fund liabilities in governmental fund statements. All liabilities, both current and long-term, are reported in the government-wide financial statements. Accrued interest (97,277) Long-term liabilities (4,468,214) Compensated absences (1,112,391) (5,677,882) Net Other Post Employment Benefit assets/obligations resulting from overfunding/underfunding are not reported in the funds as they are not payable from current available resources. (587,000) Internal service funds are used by management to charge the cost of vehicle maintenance, information technology, and insurance to individual funds. The assets and liabilities of the Internal Service Fund are included in governmental activities in the statement of net assets. 5,653,665 Net assets of governmental activities $ 70,105,922 See Notes to Financial Statements 19

31 This page intentionally left blank.

32 Statement of Revenues, Expenditures, and Changes in Fund Balances Governmental Funds Fiscal Year Ended September 30, 2012 Major Funds North Lauderdale Water Control General Fire/Rescue District Fund Fund Fund Revenues: Taxes $ 10,577,137 $ - $ - Franchise taxes 2,509, Licenses and permits 572, Intergovernmental 4,243,828 17,320 - Charges for services 3,253, ,044 - Special assessments - 3,787, ,704 Fines and forfeitures 948, Interest income 137,545 6,029 2,461 Other revenues 694,369 9,748 8,384 Total revenues 22,937,666 4,579, ,549 Expenditures: Current: General government 2,848, Public safety 8,478,925 5,407,506 - Community development 1,538, Physical environment 1,645, ,050 Streets 1,089, Parks and recreation 3,412, Capital outlay - 10,607 - Debt service: Principal Interest Total expenditures 19,013,969 5,418, ,050 Excess (deficiency) of revenues over expenditures 3,923,697 (838,903) 119,499 Other financing sources (uses): Transfers in 55, ,762 - Transfers out (6,079,614) - - Total other financing sources (uses) (6,024,614) 890,762 - Net change in fund balances (2,100,917) 51, ,499 Fund balances, beginning 29,994,971 2,394, ,583 Fund balances, ending $ 27,894,054 $ 2,446,545 $ 770,082 See Notes to Financial Statements 20

33 Statement of Revenues, Expenditures, and Changes in Fund Balances Governmental Funds Fiscal Year Ended September 30, 2012 Major Funds Debt Capital Other Total Service Projects Nonmajor Governmental Fund Fund Funds Funds $ 317,265 $ - $ - $ 10,894, ,509, , ,312 4,926, ,996 4,359, ,447, ,820 1,009, ,647 1, , , ,355 33,647 1,073,970 29,613,397 21, ,870, ,886, ,749 1,930, ,197, ,089, ,202 3,850,456-1,075, ,727 1,278,429 4,180, ,180, , ,547 4,836,978 1,075,095 1,022,678 31,918,883 (4,519,623) (1,041,448) 51,292 (2,305,486) 4,588, ,000-6,134, (55,000) (6,134,614) 4,588, ,000 (55,000) - 69,229 (441,448) (3,708) (2,305,486) 24,390 5,690, ,334 39,218,168 $ 93,619 $ 5,248,756 $ 459,626 $ 36,912,682 See Notes to Financial Statement 21

34 Reconciliation of the Statement of Revenues, Expenditures, and Changes in Fund Balances (Deficit) of Governmental Funds to the Statement of Activities Fiscal Year Ended September 30, 2012 Net change in fund balances - total governmental funds $ (2,305,486) Amounts reported for governmental activities in the statement of activities are different because: Capital assets are reported in the governmental fund as expenditures. However, in the statement of activities, the cost of certain of those assets is eliminated and capitalized as capital assets. 1,819,158 Repayment of long-term liabilities are reported as expenditures in the governmental funds, but such repayments reduce liabilities in the statement of net assets and are eliminated from the statement of activities. 4,180,538 Internal Service Funds are used by management to charge the costs of Vehicle Maintenance, Information Technology, and Insurance to individual funds. The net revenue of certain activities of Internal Service Funds is reported with governmental activities. 341,383 Any net increase or decrease in Internal Service Fund position associated with non-operating items should not be eliminated in the process of consolidation. These amounts would be added to the statement of activities. 69,003 The statement of activities reports noncash contributions as revenues but these revenues are not reported in the fund financial statements. 116,124 Expenses reported in the statement of activities that do not require the use of current financial resources are not reported as expenditures in the governmental funds. The details of the differences are as follows: Change in accrued interest 10,571 Change in compensated absences 93,223 Change in Other Post Employment Benefit obligation (195,000) Depreciation of capital assets (1,445,449) Change in net assets of governmental activities $ 2,684,065 See Notes to Financial Statements 22

35 This page intentionally left blank.

36 Statement of Revenues, Expenditures, and Changes in Fund Balances Budget to Actual General Fund Fiscal Year Ended September 30, 2012 Variance with Final Budget- Budgeted Amounts Actual Positive Original Final Amounts (Negative) Revenues: Property taxes $ 6,764,716 $ 6,764,716 $ 6,837,215 $ 72,499 Utility taxes 3,539,521 3,539,521 3,546,402 6,881 Franchise taxes 2,688,478 2,688,478 2,509,174 (179,304) Business tax 200, , ,520 (6,480) Licenses and permits 334, , , ,786 Intergovernmental 4,184,440 4,184,440 4,243,828 59,388 Charges for services 3,142,978 3,142,978 3,253, ,988 Fines and forfeitures 355, , , ,880 Interest income 225, , ,545 (87,455) Other revenues 556, , , ,169 Total revenues 21,991,314 21,991,314 22,937, ,352 Expenditures: General Government: City commission 362, , ,043 2,452 City manager 419, , ,141 34,311 City attorney 270, , ,743 28,671 City clerk 347, , ,399 78,600 Human resources 449, , , ,494 Finance 881, , ,035 92,317 Other 622, , ,653 86,465 Contingency 29,510 29,510-29,510 Total general government 3,382,812 3,382,812 2,848, ,820 Public safety: BSO police contract 8,181,331 8,181,331 8,146,000 35,331 Crossing guard contract 325, , ,925 (7,925) Total public safety 8,506,331 8,506,331 8,478,925 27,406 Community development: Operating 1,305,226 1,215,226 1,053, ,989 Code compliance 693, , , ,146 Total community development 1,998,586 1,908,586 1,538, ,135 Public works: Physical environment: Building maintenance 973,164 1,223,164 1,262,830 (39,666) Facility maintenance 10,000 10, ,575 Canal maintenance 478, , ,575 96,145 Total physical environment 1,461,884 1,711,884 1,645,830 66,054 See Notes to Financial Statements 23

37 Statement of Revenues, Expenditures, and Changes in Fund Balances Budget to Actual General Fund Fiscal Year Ended September 30, 2012 (Continued) Variance with Final Budget- Budgeted Amounts Actual Positive Original Final Amounts (Negative) Streets: Personnel services 478, , ,584 67,136 Other current expenditures 634, , ,933 (43,809) Total street maintenance 1,112,844 1,112,844 1,089,517 23,327 Total public works 2,574,728 2,824,728 2,735,347 89,381 Parks and recreation: Parks 2,122,952 2,177,952 2,220,645 (42,693) Recreation 732, , ,736 69,394 Aquatics 389, , ,115 (19,972) Transportation 78,727 78,727 84,758 (6,031) Total parks and recreation 3,322,952 3,412,952 3,412, Total expenditures 19,785,409 20,035,409 19,013,969 1,021,440 Excess of revenues over expenditures 2,205,905 1,955,905 3,923,697 1,967,792 Other financing sources (uses): Transfers in - 2,000,000 55,000 (1,945,000) Transfers out (2,205,905) (6,140,905) (6,079,614) 61,291 Use of fund balance - 2,185,000 - (2,185,000) Total other financing sources (uses) (2,205,905) (1,955,905) (6,024,614) (4,068,709) Net change in fund balance $ - $ - (2,100,917) $ (2,100,917) Fund balance, beginning 29,994,971 Fund balance, ending $ 27,894,054 See Notes to Financial Statements 24

38 Statement of Revenues, Expenditures and Changes in Fund Balance Budget to Actual Special Revenue Funds Fire/Rescue Fund Fiscal Year Ended September 30, 2012 Variance With Final Budget- Budgeted Amounts Actual Positive Original Final Amounts (Negative) Revenues: Intergovernmental $ 15,000 $ 15,000 $ 17,320 $ 2,320 Charges for services 625, , , ,044 Special assessments 3,698,091 3,698,091 3,787,069 88,978 Interest income 6,296 6,296 6,029 (267) Other revenues - - 9,748 9,748 Total revenues 4,344,387 4,344,387 4,579, ,823 Expenditures: Public safety: Operating division 4,305,593 4,305,593 4,818,384 (512,791) Administration 761, , , ,950 Capital outlay 620, ,000 10, ,393 Total expenditures 5,686,665 5,686,665 5,418, ,552 Excess (deficiency) of revenues over (under) expenditures (1,342,278) (1,342,278) (838,903) 503,375 Other financing sources (uses): Transfers in 890, , ,762 - Transfers out Use of fund balance 451, ,516 - (451,516) Total other financing sources (uses) 1,342,278 1,342, ,762 (451,516) Net change in fund balance $ - $ - 51,859 $ 51,859 Fund balance, beginning 2,394,686 Fund balance, ending $ 2,446,545 See Notes to Financial Statements 25

39 Statement of Revenues, Expenditures and Changes in Fund Balance Budget to Actual Special Revenue Funds - North Lauderdale Water Control District Fund Fiscal Year Ended September 30, 2012 Variance with Final Budget- Budgeted Amounts Actual Positive Original Final Amounts (Negative) Revenues: Special assessments $ 644,285 $ 644,285 $ 660,704 $ 16,419 Interest income 3,000 3,000 2,461 (539) Miscellaneous - - 8,384 8,384 Total revenues 647, , ,549 24,264 Expenditures: Physical Environment: Contractual services 539, , ,728 - Administration fee ,322 (12,322) Contingency 107, , ,557 Capital outlay 230, , ,000 Total expenditures 877, , , ,235 Excess (deficiency) of revenues over (under) expenditures (230,000) (230,000) 119, ,499 Other financing sources (uses): Use of fund balance 230, ,000 - (230,000) Total other financing sources (uses) 230, ,000 - (230,000) Net change in fund balance $ - $ - 119,499 $ 119,499 Fund balance, beginning 650,583 Fund balance, ending $ 770,082 See Notes to Financial Statements 26

40 Statement of Net Assets Proprietary Fund September 30, 2012 Business-type Activities - Enterprise Funds Major Fund Internal Utilities Nonmajor Service Fund Fund Total Funds Assets Current Assets Cash and equity in pooled cash $ 3,580,385 $ 584,490 $ 4,164,875 $ 1,944,664 Investments 10,433,861 1,291,187 11,725,048 4,295,923 Restricted cash, cash equivalents and investments Customer deposits 1,197,975-1,197,975 - Accounts receivable, net of allowances for uncollectible accounts 1,261,864 48,233 1,310,097 - Prepaid costs ,430 Total current assets 16,474,085 1,923,910 18,397,995 6,376,017 Capital Assets Land 86,365-86,365 - Buildings 296, ,910 - Improvements 694, ,899 25,358 Machinery, equipment, furnishings and other 595,987 31, , ,961 Infrastructure 18,921,327 2,986,744 21,908,071 - Construction in progress 5,052,018-5,052,018 27,602 Total capital assets 25,647,506 3,018,241 28,665, ,921 Less accumulated depreciation (12,391,106) (2,191,458) (14,582,564) (722,478) Net capital assets 13,256, ,783 14,083, ,443 Total assets 29,730,485 2,750,693 32,481,178 6,580,460 Liabilities Current Liabilities Accounts payable and other liabilities 775,701 8, , ,619 Retainage payable 45,916-45,916 - Payable from restricted assets 1,197,975-1,197,975 - Total current liabilities 2,019,592 8,489 2,028, ,619 Long-Term Liabilities Accrued compensated absences 74,646 35, ,469 26,082 Total long-term liabilities 74,646 35, ,469 26,082 Total Liabilities 2,094,238 44,312 2,138, ,701 Net Assets Invested in capital assets, net of related debt 13,256, ,783 14,083, ,443 Unrestricted 14,379,847 1,879,598 16,259,445 6,054,316 Total net assets $ 27,636,247 $ 2,706,381 $ 30,342,628 $ 6,258,759 See Notes to Financial Statements 27