2013 CAFR.pdf
The Village of
North Palm Beach, Florida
COMPREHENSIVE ANNUAL FINANCIAL REPORT
Fiscal Year Ended September 30, 2013
Prepared by:
Finance Department
Samia Janjua
Director of Finance
THE VILLAGE OF NORTH PALM BEACH, FLORIDA
FINANCIAL STATEMENTS
SEPTEMBER 30, 2013
TABLE OF CONTENTS
INTRODUCTORY SECTION
Letter of Transmittal ..................................................................................................................................... i
Principal Village Officials ....................................................................................................................... viii
Organizational Structure .............................................................................................................................. ix
GFOA Certificate of Achievement for Excellence in Financial Reporting ................................................. x
FINANCIAL SECTION
Independent Auditors' Report ....................................................................................................................... 1
Management's Discussion and Analysis ....................................................................................................... 4
BASIC FINANCIAL STATEMENTS:
Government-wide Financial Statements:
Statement of Net Position ..................................................................................................................... 14
Statement of Activities ......................................................................................................................... 15
Fund Financial Statements:
Balance Sheet - Governmental Funds .................................................................................................. 17
Reconciliation of the Balance Sheet – Governmental Funds
to the Statement of Net Position ..................................................................................................... 18
Statement of Revenues, Expenditures and Changes in
Fund Balances - Governmental Funds ........................................................................................... 19
Reconciliation of the Statement of Revenues, Expenditures, and Changes in
Fund Balances of the Governmental Funds to the Statement of Activities .................................... 20
Statement of Net Position - Proprietary Fund ...................................................................................... 21
Statement of Revenues, Expenses, and Changes in Net
Assets - Proprietary Fund ............................................................................................................... 22
Statement of Cash Flows - Proprietary Fund ....................................................................................... 23
Statement of Fiduciary Net Position - Fiduciary Funds ....................................................................... 24
Statement of Changes in Fiduciary Net Position – Fiduciary Funds .................................................... 25
Notes to the Basic Financial Statements ..................................................................................................... 26
REQUIRED SUPPLEMENTARY INFORMATION:
Schedule of Funding Progress- Other Post Employment Benefits ........................................................ 64
Schedule of Funding Progress – Retirement Funds .............................................................................. 65
Schedule of Employer and State Contributions ................................................................................... 66
Notes to the Trend Data ....................................................................................................................... 67
Schedule of Revenues, Expenditures, and Changes in Fund Balance -
Budget and Actual - General Fund ................................................................................................. 68
Notes to the Budgetary Required Supplementary Information ............................................................ 69
THE VILLAGE OF NORTH PALM BEACH, FLORIDA
FINANCIAL STATEMENTS
SEPTEMBER 30, 2013
TABLE OF CONTENTS
(Continued)
OTHER SUPPLEMENTARY INFORMATION:
Schedule of Departmental Expenditures– Budget and Actual – General Fund .................................... 70
Combining Balance Sheet – Nonmajor Governmental Funds .............................................................. 73
Combining Statement of Revenues, Expenditures, and Changes in Fund Balances -
Nonmajor Governmental Funds ........................................................................................................ 74
Combining Statement of Net Position - Fiduciary Funds .................................................................... 75
Combining Statement of Changes in Fiduciary Net Position - Employee Retirement Funds .............. 76
Combining Statement of Agency Net Assets ....................................................................................... 77
Combining Schedule of Changes in Agency Net Assets and Liabilities ............................................... 78
Schedule of Revenues and Departmental Expenses –
Budget and Actual – Country Club Fund – Budgetary Basis ............................................................ 79
STATISTICAL SECTION
Net Position by Component ................................................................................................................. 80
Changes in Net Position ....................................................................................................................... 81
Fund Balances, Governmental Funds ................................................................................................... 83
Changes in Fund Balances, Governmental Funds ................................................................................ 84
Net Assessed Value and Estimated Actual Value of Taxable Property ............................................... 86
Property Tax Rates - Direct and Overlapping Governments................................................................. 87
Principal Property Taxpayers ............................................................................................................... 88
Property Tax Levies and Collections ................................................................................................... 89
Ratios of Outstanding Debt by Type ..................................................................................................... 90
Direct and Overlapping Governmental Activities Debt ........................................................................ 91
Pledged-Revenue Coverage .................................................................................................................. 92
Demographic and Economic Statistics .................................................................................................. 93
Principal Employers ............................................................................................................................. 94
Full-Time Equivalent Village Government Employees by Function .................................................... 95
Operating Indicators by Function/Program .......................................................................................... 99
Capital Asset Statistics by Function/Program ....................................................................................... 97
REQUIRED REPORTS
Report on Internal Control Over Financial Reporting and on
Compliance and Other Matters Based on an Audit of Financial
Statements Performed in Accordance with Government Auditing Standards .................................. 98
Management Letter in Accordance with the Rules of the Auditor General of the
State of Florida ............................................................................................................................... 100
INTRODUCTORY SECTION
THE VILLAGE OF
NORTH PALM BEACH
“THE BEST PLACE TO LIVE UNDER THE SUN”
501 U.S. Highway 1, North Palm Beach, FL 33408-4902 * (561) 841-3380 * Fax (561) 848-3344
March 27, 2014
The Honorable Mayor and Members of the Village Council
Village of North Palm Beach North Palm Beach, Florida
The Finance Department and Village Manager's Office are pleased to submit the Comprehensive Annual Financial Report for the Village of North Palm Beach, Florida for the fiscal year ended September 30, 2013.
This report is published to provide the Village Council, Village staff, our citizens, our lenders, and other
interested parties with detailed information concerning the financial condition and activities of the
Village government. Responsibility for both the accuracy of the presented data and the completeness and fairness of the presentation, including all disclosures, rests with the Village.
To the best of our knowledge and belief, the enclosed data are accurate in all material respects, and are organized in a manner designed to fairly present the financial position and results of operations of
the Village as measured by the financial activity of its various funds. We also believe that all disclosures
necessary to enable the reader to gain the maximum understanding of the Village's financial affairs have been included.
THE REPORT
Nowlen, Holt & Miner, P.A., Certified Public Accountants, have issued an unqualified (“clean”) opinion
on the Village of North Palm Beach’s financial statements for the year ended September 30, 2013. The independent auditor’s report is located at the front of the financial section of this report.
Management’s Discussion and Analysis (MD&A) immediately follows the independent auditor’s report and provides a narrative, overview, and analysis of the basic financial statements. MD&A complements
this letter of transmittal and should be read in conjunction with it.
The CAFR’s role is to assist in making economic, social, and political decisions and to assist in
assessing accountability to the citizenry by:
· comparing actual financial results with the legally adopted budget, where appropriate;
· assessing financial condition and results of operations;
· assisting in determining compliance with finance related laws, rules and regulations;
· assisting in evaluating the efficiency and effectiveness of Village operations.
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VILLAGE PROFILE
The Village
The Village of North Palm Beach is primarily a residential community, having been incorporated as a
political subdivision of the State of Florida in 1956. The registered population of the Village is approximately 12,177, which increases to approximately 18,000 during the winter months by residents who list their northern homes as their official place of residence. Residents are generally in the middle
to upper income brackets. Located in the northeastern quadrant of Palm Beach County, Florida, the Village has an abundant
amount of waterfront property created by a number of lakes, canals, and the Atlantic Ocean. The governing body of the Village consists of a five-member Village Council, each of whom is elected
to two-year overlapping terms. The Mayor is selected by majority vote of the Council and serves for a term of one year. Day to day affairs of the Village are under the leadership of the Village Manager who
is appointed by the Council.
FINANCIAL DATA
Financial Reporting System and Budgetary Controls
The Village's financial records for its general governmental operations are maintained on the modified accrual basis, which means that revenues are recorded when available and measurable, and expenditures are reported when goods and services are received and the related liabilities are incurred.
Financial reporting for its Enterprise Fund (i.e., the Country Club operation) is presented using the full accrual basis of accounting required by GAAP for its annual financial report. The Country Club annual
budget is adopted using a modified accrual basis of accounting (identical to the general government operations mentioned above) which is consistent with how general ledger financial records are maintained throughout the year by the Village administration.
In developing and evaluating the Village's financial and accounting system, consideration is given to the
adequacy of internal accounting controls. Internal accounting controls are designed to provide
reasonable, but not absolute, assurance regarding: (a) the safeguarding of assets against loss from unauthorized use or disposition; and (b) the reliability of financial records for preparing financial
statements and maintaining accountability for assets. The concept of reasonable assurance recognizes
that: (a) the cost of a control should not exceed the benefits likely to be derived; and (b) the evaluation of costs and benefits requires estimates and judgments by management.
All internal control evaluations occur within the above framework. We believe that the Village's internal accounting controls adequately safeguard assets and provide reasonable assurance of proper
recording of financial transactions.
The Village of North Palm Beach maintains budgetary controls through the annual budget public
hearing and approval process for GAAP-based budgets. The formal budget approval for each fiscal year is accomplished in a manner compliant with Florida State Statute 200.065, commonly referred to as Truth-in-Millage (TRIM).
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Budget amendments require Village Council approval at public meetings. Budgetary control is maintained at the department level within the fund (changed to fund level in 2013) by the encumbrance
of estimated purchase amounts prior to the release of purchase orders to vendors. Purchase orders,
which result in an overrun of approved departmental appropriations within the fund, are not released until additional appropriations are made available. Encumbered amounts lapse at year-end; however,
they are re-appropriated as part of the following year’s budget.
ECONOMIC OUTLOOK
Property Values
The Village obtains a major portion of its annual General Fund financial resources (55%) from ad valorem property taxes. Gross assessed property values increased substantially between the years 2002 through 2006, but slowed significantly in 2007. In years 2008 through 2012, area property values
declined in value, in many instances significantly, as a result of the economic downturn. This unprecedented decline in property values was exacerbated by the number of properties in various
stages of foreclosure. Both of these real-estate issues have had an adverse impact upon the financial
resources of the Village. However, based on market trends in 2013 as well as in early 2014, it appears that there is new growth in our community. We have processed a large number of building permits
throughout the Village for both new homes and for remodels of existing homes. The Water Club
development was approved in 2013 with plans to begin construction in 2014 and completion in late 2015. In addition, improvement is being made to both our commercial and business properties on both
the US 1 corridor and the Northlake corridor. The increased activity in our commercial properties has had a positive effect on Village revenues.
The most promising area of improvement continues to be the significant increase in Village homes’
value. We have already realized an increase in ad valorem taxes reflecting increases in revenues in 2013. Increases are projected to continue in 2014. Both the State and South Florida, in particular, are
enjoying resurgence in real estate activity, which has translated into annual double digit gains in market prices for area homes.
The Village continues to pursue annexation of surrounding unincorporated areas that complement and enhance the services and values of our existing community. The focus of Village annexation efforts will
be providing exemplary municipal services that are revenue “neutral” to both the annexed areas and to
the Village.
Investment Revenues
The economic downturn and softening of the money market has had a significant impact on Village
investment revenues over the past few years. In the short-term, the Village made a conscious decision
to modify its investment strategies towards the Treasury market to better protect and ensure the availability of the Village’s investment balances. This move proved successful in safeguarding Village
investments during this market free fall but impacted the interest/dividend revenues to the Village. Four
years ago, with the assistance of the Village’s Audit Committee, the Village adopted a “revised” Investment Policy designed to provide safety and liquidity while maximizing investment return(s). The
newly adopted policy provided numerous investment strategies, parameters, and safeguards. The policy additionally provided for 1/12 of the annual operating budget to be deposited in a liquid interest bearing account so as not to impede operations should other funds be temporarily unavailable. The
Audit Committee and staff are currently exploring other investment opportunities that we believe will improve yields in future years while still ensuring the safety of our investments.
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Personnel Costs
The Village will continue to face increased financial challenges in the areas of personnel costs for both
salaries and benefits. In past years, several retirement plan amendments were implemented by the Village and then followed by significant salary adjustments that magnified the impact and cost of the
retirement changes. The impact of these changes as well as the continuous improvement in the financial markets have had a very positive financial impact on both plans. Due to legislative changes and catastrophic claims losses, the Village has encountered significant increases in annual health
insurance costs during the past few years. In an attempt to fight the continual rising cost of healthcare, the Village transitioned to a semi self-insured health program in 2012, which offers the potential for possible savings if claims are minimized. For 2014, the Village will continue its focus on Employee
Wellness as a measure to help control health care costs and improve our opportunity for additional savings from our health care provider. Changes mandated by the Patient Protection and Affordable
Care Act (PPACA) will continue to have a significant financial impact on the cost of healthcare for the
Village.
We have been in negotiations with our three unions since the summer of 2013. We have negotiated a
one year extension with the FPE union, however, discussions continue with both the police and fire unions.
The impacts of personnel salaries and benefits in the coming years will have a large and continuing effect on future Village financing and service priorities in the areas of staffing, public services, and
public projects. Approximately 3/4ths of the annual budget is for wages and fringe benefits. For budget year 2013/2014, the Village conducted a compensation study to determine if salary ranges and employee pay were both comparable and competitive. That study concluded that our pay ranges
needed to move 8.3%, and that the range spreads needed to increase to 60%. In addition, the study
recommended one time increases for employees equaling 8.3%. The Village adopted the new salary ranges but opted to provide increases based on the employee’s percent penetration in the new range.
The average pay increase for employees using this approach was approximately 4.25% and was funded through the establishment of a special revenue fund for tax relief.
INITIATIVES AND FUTURE PROJECTS
The FY2013/2014 budget reflects a renewed commitment and predictable funding for community
infrastructure in areas such as roadways, neighborhood sidewalks, and lighting, public buildings, and park facilities.
The Community Development Department continues to meet the demands of our Village’s business and neighborhood redevelopment. Community Development will continue to concentrate staff
resources in areas of construction, permitting, licensing, and community planning while reinforcing
improvements in customer service. The continuing analysis and pursuit of annexation opportunities, zoning and redevelopment enhancements, and improvement of our business and development
regulations are also a functions of the Community Development Department. This Department will
better align our Village with statutory development guidelines and help to meet steadily growing expectations of homeowners and developers. In addition, Community Development will work closely
with our newly formed Business Advisory Board to assist in the growth of our current businesses and to encourage new businesses to come to our community. This year, Community Development will also begin the task of updating our land use code.
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The Parks and Recreation Department continues to enhance programs for all age groups at each of its
six facilities. The newly redeveloped Anchorage Park will host a variety of events in the upcoming year,
to include: movies in the park; organized volleyball leagues; the Village’s annual fishing tournament;
and Heritage Day. The parks continue to be maintained by an outside service which has been funded
under the “contractual services” line.
The Village completed construction of its new Veterans Memorial Park located just north of the Library.
A ribbon cutting and Veterans Day celebration was held on November 11, 2013 with over 300 people in
attendance. The memorial was also used later in December for the tree lighting ceremony to kick-off
the holidays. That event was also well attended. This year, the Village purchased a 20 foot holiday
tree and associated decorations which will be used as the permanent Village tree for future holiday
celebrations.
The Public Works Department is planning to continue oversight and maintenance of Village sanitation,
infrastructure, streets, facilities, equipment, and roadways. This Department will play a major role in
maintaining and expanding our focus on community appearance during the coming year. Public Works
will continue to emphasize identification and remediation of safety concerns throughout our facilities.
We are also conducting extensive analyses of critical infrastructure in our facilities to determine future
project priorities and best maintenance practices. Public Works will also continue to accomplish
currently identified infrastructure projects such as drainage improvements, swale maintenance, and
automation of irrigation systems. Finally, Public Works has been involved in a year-long evaluation of
all work processes and systems. The completion of the projects emanating from this assessment will
be a prime focus of the organization.
The Police Department has continued improvements in neighborhood outreach, crime suppression, and
crime clearances. In 2008, and again in 2011, the Village’s Police Department was awarded the
coveted CALEA National Accreditation for law enforcement agencies. The Police budget includes
funding for the purchase/replacement of needed marked patrol vehicles and unmarked detective vehicles.
In 2013, the Police Department achieved a significant decrease in all areas of crime as well as an
increase in clearance rates. We expect to build on that success in 2014.
The Human Resources Department was instrumental in accomplishing the compensation study and in
implementing needed changes to the pay plan. This year, the department is focused on implementing
a new web-based appraisal system that will include supervisory peer reviews to eliminate the prospect
of supervisory bias or a skewed result. Human Resources will also focus on the completion of union
negotiations and implementation of agreed-upon salary and benefit provisions.
The Administration continues its ongoing implementation of an optical records storage system for use
by all Village operating departments. Optical record storage systems are now widely used by
governments and meet all State record storage requirements. This allows the Village to transition –
over time – from “paper” records to optically stored records. Optical storage permits digital “look up” of
any optical record “at will” through the convenience of a simple computer search. Optical storage
systems have become commonly used by many local governments, and the cost is relatively modest
when considering the time savings and customer service improvements they offer.
Another important initiative started in 2013 is the re-engineering of our procurement, property
management, and project management systems. This work is being closely coordinated between the
Finance Department and Public Works with assistance from our legal resources. The goal is to
streamline our work and reduce financial risk. One key improvement has been to create a Procurement
and Project Management position housed in Public Works but reporting directly to the Finance Director.
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Our Country Club Enterprise Fund continued to show improvement in its bottom line. In 2013, the Country Club experienced a $110,480 increase in its unrestricted fund balance, from $557,954 to
$668,434. During the year, we experienced a serious degradation of course condition as a result of
poor maintenance practices by our contract maintenance firm. That situation was corrected and controls have been put in place both with the maintenance contractor and the Village to prevent a
recurrence. The Enterprise Fund is on solid financial footing; however, there are serious infrastructure issues related to the country club that must be addressed in 2014. One of those issues is the razing of the diving tower which has become an uninsurable risk. Plans are to accomplish this demolition project
in the spring of 2014. The other significant project involves complete evaluation and remediation of the HVAC and electrical building systems. The facility is currently undergoing a complete engineering analysis and plans are to address these infrastructure needs in 2014. The financial impact on the fund
balance could be as much as $100,000.
At the request of the Village Council, the leadership team developed a strategic plan for the Village.
The plan developed focuses on identification of critical objectives and the accomplishment of key improvement projects which help the Village attain those objectives.
Staff developed a total of 19 strategic initiatives which are broken into high, medium, and lower priority projects. These projects range from infrastructure improvements to the development of new programs.
Some of the near term initiatives we are focusing on for 2014 include:
· Continued development of our safety program and accomplishment of both facility and
process improvements.
· Implementation of a comprehensive web-based employee appraisal system.
· Refinement of our employee wellness program in concert with our insurance carrier.
· Refinement of our strategy to improve business opportunities in the Village.
· Update of our ordinances dealing with land use.
· Evaluation of the results of the market analysis conducted in 2013 with an overall objective of refining the strategic plan by reprioritizing existing and developing new
improvement projects. As a part of our strategic focus, we recognize that our planning must be fluid and that we must be able
to adapt to changes as they occur in our community. Because of this, we will regularly calibrate our
strategic initiatives with input from both Council and our residents. The ultimate goal is to sustain the Village as the “Best Place to Live Under the Sun” by providing superior services, embracing and
supporting timeless traditions of the community, and by ensuring that we continue to integrate modern amenities throughout the Village to make it a safe, comfortable, and very pleasant place to live.
OTHER INFORMATION
Independent Audit
Article 11, Section 2.18 of the Village Charter requires an annual audit of the books of account, financial
records and transactions of all administrative departments of the Village by independent certified public
accountants selected by the Village Council. This requirement has been complied with and the independent auditor's report has been included in this report.
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Certificate of Achievement
The Government Finance Officers Association of the United States and Canada (GFOA) awarded a
Certificate of Achievement of Excellence in Financial Reporting to the Village of North Palm Beach for its Comprehensive Annual Financial Report for the fiscal year ended September 30, 2012. The
Certificate of Achievement is a prestigious national award, recognizing conformance with the highest standards for preparation of state and local government financial reports.
Respectfully submitted,
Samia Janjua Ed Green Director of Finance Village Manager
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THE VILLAGE OF NORTH PALM BEACH, FLORIDA
PRINCIPAL VILLAGE OFFICIALS
SEPTEMBER 30, 2013
Title Name
Mayor William L. Manuel
Vice Mayor Darryl C. Aubrey
President Pro Tem Robert A. Gebbia
Council Member David B. Norris
Council Member Doug Bush
Village Manager Ed Green
Director of Finance Samia Janjua
Village Clerk Melissa Teal
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FINANCIAL SECTION
INDEPENDENT AUDITORS’ REPORT
The Honorable Mayor and Members of the Village Council
The Village of North Palm Beach, Florida
Report on the Financial Statements
We have audited the accompanying financial statements of the governmental activities, the
business-type activities, each major fund, and the aggregate remaining fund information of the
Village of North Palm Beach, Florida as of and for the year ended September 30, 2013, and the
related notes to the financial statements, which collectively comprise the Village of North Palm
Beach, Florida’s basic financial statements as listed in the table of contents.
Management’s Responsibility for the Financial Statements
Management is responsible for the preparation and fair presentation of these financial statements
in accordance with accounting principles generally accepted in the United States of America; this
includes the design, implementation, and maintenance of internal control relevant to the
preparation and fair presentation of financial statements that are free from material misstatement,
whether due to fraud or error.
Auditor’s Responsibility
Our responsibility is to express opinions on these financial statements based on our audit. We
conducted our audit in accordance with auditing standards generally accepted in the United
States of America and the standards applicable to financial audits contained in Government
Auditing Standards, issued by the Comptroller General of the United States. Those standards
require that we plan and perform the audit to obtain reasonable assurance about whether the
financial statements are free of material misstatement.
An audit involves performing procedures to obtain audit evidence about the amounts and
disclosures in the financial statements. The procedures selected depend on the auditor’s
judgment, including the assessment of the risks of material misstatement of the financial
statements, whether due to fraud or error. In making those risk assessments, the auditor considers
internal control relevant to the entity’s preparation and fair presentation of the financial
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statements in order to design audit procedures that are appropriate in the circumstances, but not
for the purpose of expressing an opinion on the effectiveness of the entity’s internal control.
Accordingly, we express no such opinion. An audit also includes evaluating the appropriateness
of accounting policies used and the reasonableness of significant accounting estimates made by
management, as well as evaluating the overall presentation of the financial statements.
We believe that the audit evidence we have obtained is sufficient and appropriate to provide a
basis for our audit opinions.
Opinions
In our opinion, the financial statements referred to above present fairly, in all material respects,
the respective financial position of the governmental activities, the business-type activities, each
major fund, and the aggregate remaining fund information of the Village of North Palm Beach,
Florida as of September 30, 2013, and the respective changes in financial position and, where
applicable, cash flows thereof for the year then ended in accordance with accounting principles
generally accepted in the United States of America.
Other Matters
Required Supplementary Information
Accounting principles generally accepted in the United States of America require that the
Management’s Discussion and Analysis on pages 4 through 13, Pension and Other Post
Employment Benefit trend information on pages 64 through 67, and budgetary comparison
information on pages 68 through 69 be presented to supplement the basic financial statements.
Such information, although not a part of the basic financial statements, is required by the
Governmental Accounting Standards Board, who considers it to be an essential part of financial
reporting for placing the basic financial statements in an appropriate operational, economic, or
historical context. We have applied certain limited procedures to the required supplementary
information in accordance with auditing standards generally accepted in the United States of
America, which consisted of inquiries of management about the methods of preparing the
information and comparing the information for consistency with management’s responses to our
inquiries, the basic financial statements, and other knowledge we obtained during our audit of the
basic financial statements. We do not express an opinion or provide any assurance on the
information because the limited procedures do not provide us with sufficient evidence to express
an opinion or provide any assurance.
Other Information
Our audit was conducted for the purpose of forming opinions on the financial statements that
collectively comprise the Village of North Palm Beach, Florida’s basic financial statements. The
introductory section, other supplementary information, and statistical section are presented for
purposes of additional analysis and are not a required part of the basic financial statements.
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The other supplementary information are the responsibility of management and were derived
from and relate directly to the underlying accounting and other records used to prepare the
financial statements. Such information has been subjected to the auditing procedures applied in
the audit of the basic financial statements and certain additional procedures, including comparing
and reconciling such information directly to the underlying accounting and other records used to
prepare the basic financial statements or to the financial statements themselves, and other
additional procedures in accordance with auditing standards generally accepted in the United
States of America. In our opinion, the other supplemental information are fairly stated in all
material respects in relation to the basic financial statements 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 do not
express an opinion or provide any assurance on them.
Other Reporting Required by Government Auditing Standards
In accordance with Government Auditing Standards, we have also issued our report dated March
19, 2014, on our consideration of the Village of North Palm Beach, Florida’s internal control
over financial reporting and on our tests of its compliance with certain provisions of laws,
regulations, contracts, grant agreements and other matters. The purpose of that report is to
describe the scope of our testing of internal control over financial reporting and compliance and
the results of that testing and not to provide an opinion on internal control over financial
reporting or on compliance. That report is an integral part of an audit performed in accordance
with Government Auditing Standards in considering the Village of North Palm Beach, Florida’s
internal control over financial reporting and compliance.
West Palm Beach, Florida
March 19, 2014
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MANAGEMENT'S DISCUSSION AND ANALYSIS
The Village of North Palm Beach, Florida’s (Village) Administration offers readers of the Village's
financial statements this narrative overview and analysis of the financial activities of the Village for the
fiscal year ended September 30, 2013. Please read it in conjunction with the accompanying transmittal
letter beginning on page i, and the accompanying basic financial statements.
TABLE 1
FINANCIAL HIGHLIGHTS
(in millions)
September 30,Increase/Statement
2013 2012 (Decrease)Page #
Total net assets $30.39$31.25 ($0.86)14
Unrestricted net assets available for future use $12.64$12.40$0.2414
Governmental net assets $27.72$28.61 ($0.89)14
Total revenues from all sources $21.96$21.46$0.5015
Governmental revenues $18.30$17.88$0.4215
Total cost of all Village programs $22.82$22.36$0.4615
Governmental revenues over (under) expenses($0.89)($0.95)$0.0616
General fund revenues over (under) expenses$0.77 $1.00 ($0.23)19
General fund unassigned fund balance $11.34$11.24$0.1017
As a percent of general fund expenditures 65.10%66.01%($0.01)
Country Club revenues over (under) expenses$0.03 $0.05 ($0.02)22
Change in total long-term debt for the Village $0.04 ($0.30)$0.34
USING THIS ANNUAL REPORT
This annual report consists of a series of financial statements. The three components of the financial
statements are: (1) Government-wide financial statements that include the Statement of Net Position and
the Statement of Activities. These statements provide information about the activities of the Village as a
whole. (2) Fund financial statements tell how these services were financed in the short term, as well as
what remains for future spending. Fund financial statements also report the Village's operations in more
detail than the government-wide statements by providing information about the Village's most significant
funds. (3) Notes to the basic financial statements expand upon information reported in the government-
wide and governmental fund statements.
REPORTING ON THE VILLAGE AS A WHOLE
Statement of Net Position and the Statement of Activities (Government-wide)
A frequently asked question regarding the Village's financial health is whether the year's activities
contributed positively to the overall financial well being. The Statement of Net Position and the Statement
of Activities report information about the Village as a whole and about its activities in a way that helps
answer this question. These statements include all assets and liabilities using the accrual basis of
accounting, which is similar to the accounting used by most private-sector companies. All of the current
year's revenues and expenses are taken into account, regardless of when cash is received or paid.
5
These two statements report the Village's net position and changes therein. Net position, the difference
between position and liabilities, are one way to measure the Village's financial health, or financial
position. Over time, increases or decreases in net position are an indicator of whether the financial health
is improving or deteriorating.
The Statement of Net Position and the Statement of Activities present information about the following:
· Governmental activities - All of the Village's basic services are considered to be governmental
activities, including general government, community development, public safety, public services,
library, and recreation. Property taxes, sales taxes, utility taxes, and franchise fees finance most of
these activities.
· Proprietary activities/Business-type activities - The Village charges a fee to customers to cover all
or most of the cost of the services provided. The Village's Country Club is reported in this
category.
REPORTING THE VILLAGE'S MOST SIGNIFICANT FUNDS
Fund Financial Statements
The fund financial statements provide detailed information about the most significant funds - not the
Village as a whole. Some funds are required to be established by State law. However, management
establishes other funds, which aid in the management of money for particular purposes or meet legal
responsibilities associated with the usage of certain taxes, grants, and other money. The Village's three
types of funds - governmental, proprietary, and fiduciary - use different accounting approaches as
explained below.
· Governmental Funds
Most of the Village's basic services are reported in governmental funds. Governmental funds
focus on how resources flow in and out, with balances available for spending remaining at year-
end. These funds are reported using an accounting method called the modified accrual accounting
method, which measures cash and all other financial assets that can be converted to cash readily.
The governmental fund statements provide a detailed short-term view of the Village's general
government operations and the basic services it provides. Governmental fund information shows
whether there are more or fewer financial resources that can be spent in the near future to finance
the Village's programs.
The Village maintains six individual governmental funds: the General Fund, one Capital Projects
Fund, and four Special Revenue Funds. Information is presented separately in the governmental
fund balance sheet and in the governmental fund statement of revenues, expenditures, and
changes in fund balance for the General Fund and the Capital Projects Fund, both of which are
considered major funds (generally accepted accounting principles define a fund as major based on
that fund’s size relative to the other funds of the government; a fund may also be reported as
major if the government's officials believe that fund is particularly important to financial
statement users). The remaining funds are considered non-major funds, and data from these
governmental funds is combined into a single column for an aggregated presentation. The basic
governmental fund financial statements can be found on pages 17-20 of this report.
· Proprietary Funds
The Village's only proprietary fund is the Country Club Fund, which charges customers for the
services it provides. These services are generally reported in proprietary funds. Proprietary funds
are reported in the same way that all activities are reported in the Statement of Net Position and
the Statement of Activities. The basic proprietary fund financial statements can be found on pages
21-23 of this report.
6
· Fiduciary Funds
Fiduciary funds are used to account for resources held for the benefit of parties outside the
government. The funds in this category are the Village’s Pension Trust Funds and Agency Funds.
Fiduciary funds are not reflected in the government-wide financial statement because the
resources of those funds are not available to support the Village's own programs. The accounting
used for fiduciary funds is much like that used for proprietary funds. The basic fiduciary fund
financial statements can be found on pages 24-25 of this report.
GOVERNMENT-WIDE FINANCIAL ANALYSIS
As noted earlier, net position may serve over time as a useful indicator of a government's financial
position. In the case of the Village, assets exceeded liabilities by $30.39 million at the close of the most
recent fiscal year.
A significant portion of the Village's net position (57.36%) reflects its investment in capital assets (e.g.,
land, buildings, machinery, and equipment), less any related debt still outstanding, which was used to
acquire those assets. The Village uses these capital assets to provide services to citizens; consequently,
these assets are not available for future spending. Although the Village's investment in its capital assets is
reported net of related debt, it should be noted that the resources needed to repay this debt must be
provided from other sources, since the capital assets themselves cannot be used to liquidate these
liabilities.
Table 2
Village of North Palm Beach
Net Position
(In Thousands)
GovernmentalBusiness-type
Activities Activities Total
201320122013 201220132012
Assets:
Current and other assets16,333$ 16,227$ 1,069$ 1,001$ 17,402$ 17,228$
Capital assets 15,432 16,109 5,723 5,764 21,155 21,873
Total assets 31,765 32,336 6,792 6,765 38,557 39,101
Liabilities:
Current liabilities 1,249 1,289 281 346 1,530 1,635
Long-term liabilities 2,793 2,433 3,844 3,778 6,637 6,211
Total liabilities 4,042 3,722 4,125 4,124 8,167 7,846
Net position:
Invested in capital assets,
net of debt 15,432 16,109 1,999 2,083 17,431 18,192
Restricted 317 659 317 659
Unrestricted 11,974 11,846 668 558 12,642 12,404
Total net position27,723$ 28,614$ 2,667$ 2,641$ 30,390$ 31,255$
7
Governmental Activities
The cost of all governmental activities this year was $19.20 million. As shown on Table 3, Changes in
Net Position, those who directly benefited from the programs paid for $3.11 million of this cost and
$15.19 million was financed through general revenues. Governmental activities decreased the Village's
net position by $0.89 million, thereby accounting for 103% of the total decrease in the net position of the
Village. Key elements of this decrease are as follows:
· Increase in program revenues
· Increase in personnel related costs
· Discontinuing and expensing two construction work in progress projects
Additional detail is shown in Table 3, which follows on the subsequent page.
8
Table 3
Village of North Palm Beach
Changes in Net Position
(In Thousands)
Activities Total
2013 2012 2013 2012 2013 2012
Revenues:
Program revenues:
Charges for services 3,114$ 2,798$ 3,577$ 3,583$ 6,691$ 6,381$
Operating grants and contributions 92 150 92 150
Capital grants and contributions 234 6 234 6
General revenues:
Property taxes 9,981 10,012 9,981 10,012
Local option gas taxes 262 263 262 263
Utility service taxes 2,198 2,165 2,198 2,165
Sales and use taxes 1,187 1,138 1,187 1,138
Franchise taxes 1,161 1,179 1,161 1,179
Investment earnings 37 91 9 7 46 98
Miscellaneous 38 75 38 75
Gain on asset disposals 70 70 -
Total revenues 18,304 17,877 3,656 3,590 21,960 21,467
Expenses:
Program expenses:
General Government 2,490 2,521 2,490 2,521
Public Safety 8,282 7,892 8,282 7,892
Public Works 4,483 4,653 4,483 4,653
Community Development & Planning 966 885 966 885
Leisure Services 2,974 2,873 2,974 2,873
Interest on long-term debt -
Country Club 3,629 3,536 3,629 3,536
Total expenses 19,195 18,824 3,629 3,536 22,824 22,360
Increase (decrease) in net position (891) (947) 27 54 (864) (893)
Net position - beginning of year 28,614 29,561 2,640 2,587 31,254 32,148
Net position - end of year 27,723$ 28,614$ 2,667$ 2,641$ 30,390$ 31,255$
Governmental Business-type
Activities
9
The Village's programs include General Government, Public Safety, Public Works, Community
Development & Planning, and Leisure Services. Each program's net cost (total cost, less revenues
generated by the activities) is presented below. The net cost shows the extent to which the Village's
general taxes support each of the Village's programs.
Table 4
Village of North Palm Beach
Cost of services
(In Thousands)
Total Cost Net Cost Total Cost Net Cost
of Servicesof Services of Servicesof Services
General government 2,490$ (2,380)$ 2,521$ (2,370)$
Public safety 8,282 (7,726)7,892 (7,381)
Public works 4,483 (4,046)4,653 (4,219)
Community development
and planning 966 26885 (68)
Leisure services 2,974 (1,629)2,873 (1,832)
Interest on long-term debt
19,195$ (15,755)$ 18,824$ (15,870)$
2013 2012
At the end of the current year, as compared to the prior year, many of the departments realized an increase
in their overall costs (for example Public Safety increased by $0.39 million, Community Development
and Planning increased by $0.08 million, and Leisure Services increased by $0.10 million). The increase
is a result of the increases in personnel-related costs and discontinuing and expensing two construction
work in progress projects.
Business-Type Activities
Charges for Services (revenues) in the Business-type activities experienced an overall decrease ($0.01
million) from that of the previous year. Also, during this same time period, expenses increased by $0.09
million. Net position of the Proprietary Fund (Country Club) at September 30, 2013, were $2.66 million.
Net position increased by $26,786.
Golf operations were responsible for this improved financial picture, with the driving range showing a
dramatic improvement in overall revenues. An increase in revenues, while holding the line on operating
costs, resulted in a positive impact in the Village’s Business-type activities.
The Enterprise Fund is on solid financial footing. We believe there will be steady growth in fund balance
in future years based on improved performance in restaurant operations and based on the continued steady
performance of golf operations.
10
FINANCIAL ANALYSIS OF THE VILLAGE'S FUNDS
As noted earlier, the Village uses fund accounting to ensure and demonstrate compliance with finance-
related legal requirements.
Governmental Funds
The focus of the Village's governmental funds is to provide information on near-term inflows, outflows,
and balances of spendable resources. Such information is useful in assessing the Village's financing
requirements. In particular, unrestricted (unassigned/assigned) 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 end of the current fiscal year, the combined fund balance for all Governmental Funds was $14.55
million, a $0.17 increase over the 2012 fund balance of $14.38 million. Approximately 92% of the
combined ending fund balance ($13.39 million) constitutes unrestricted (unassigned/assigned) fund
balance, which is available for spending at the government's discretion. The remainder of fund balance
($1.16 million) is restricted (non-spendable/restricted) to indicate that it is not available for new spending
because it has already been committed for a variety of other restricted purposes.
General Fund
The General Fund is the chief operating fund of the Village. At the end of the current fiscal year,
unassigned fund balance of the General Fund was $11.34 million while the General Fund total fund
balance was $12.71 million. 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. Unassigned fund balance
is 65% of total general fund expenditures, while total fund balance represents 73% of that same amount.
The general fund unassigned fund balance ($11.34 million) represents an increase of $0.10 million over
the 2012 unassigned general fund balance of $11.24 million. Key elements of this increase are listed
below:
· Revenues for Franchise Fees and Utility Service Taxes were budgeted based on prior year trends
($3.21 million). For the current year, the Village received $3.36 million.
· Due to discounts for prompt payments, State law requires that only 95% of the gross ad-valorem
taxes be budgeted as revenue ($9.84 million). For the current year, the Village received $9.98
million.
The increase in the above-mentioned revenues, while holding the line on operating costs, resulted in a
positive impact in the Village’s General Fund.
General Fund Budgetary Highlights
Differences between the original budget and the final amended budget were $587,220 and can be briefly
summarized as follows:
· Small Business Grant Carryover ($84,580)
· Prior Year Open Purchase Order Carryover ($42,994)
· Use of Reserves – Veteran’s Memorial ($400,000)
· Use of Reserves - Storm Drains ($59,646)
11
General Fund Budget Analysis
As shown on pages70-72 of this report, in the Schedule of Departmental Expenditures – Budget and
Actual, there was a favorable budget to actual cost variance of $396,400 in General Fund Departmental
Expenditures. The areas of significant budget to actual variances for the General Fund expenditures are
summarized below:
· To counter the decrease in revenue brought about by property tax reform and the economic
downturn, the Village Manager directed Department Directors to reduce spending in a manner
that would minimize the impact on our residents. This required seeking new ways to serve our
customers. The Directors did an admirable job identifying areas to cut costs resulting in
favorable budget variances. The Village saw overall budgetary savings in operating costs of
$260,986. The areas of significant budget to actual variances for the General Fund operating
costs are summarized below:
o The Village saw overall budgetary savings in its repair and maintenance costs ($128,432):
during the budgeting process, various assumptions, along with previous year costs, are used
in the development of the current year budget. The actual costs came in well under the
projected budgeted amount.
o The Village’s “Small Business Grant Program” is administered through the Community
Development Department and is structured to provide matching grants of up to $7,500 for
improvements to small business properties. Businesses would be required to match each
dollar of grant funds with one dollar from their own funds. Businesses must complete an
application and will have to meet certain criteria to qualify. In 2013, there were only three
(3) applications approved for the Grant which resulted in a budgetary savings ($73,935) in the
Community Development Department.
Capital Projects Fund
The Village’s Capital Projects Fund is project specific and involves multi-year projects. Appropriations in
this fund remain open and carry over to succeeding years until planned expenditures are made, or until
they are amended or cancelled. At the end of the current fiscal year, the total fund balance was $1.80
million, a $0.33 million decrease over the 2012 fund balance of $2.13 million. This is primarily due to
capital activity.
CAPITAL ASSET AND DEBT ADMINISTRATION
Capital Assets
The capital assets of the Village are those assets that are used in the performance of Village functions.
Capital assets include equipment, buildings, land, and park facilities etc. The Village has elected to
retroactively apply the capitalization requirements of GASB Statement No 34 to major general
infrastructure assets acquired in fiscal years ending after June 30, 1980, or that were significantly
reconstructed or improved during that multiyear period.
The Village's investment in capital assets for its governmental and business-type activities as of
September 30, 2013 and 2012 amounts to $21.16 million and $21.87 million, respectively (net of
accumulated depreciation).
12
Table 5
Village of North Palm Beach
Capital Assets
(In Thousands)
GovernmentalBusiness-type
Activities Activities Total
2013 201220132012 20132012
Land 2,056$ 2,151$ 1,051$ 1,051$ 3,107$ 3,202$
Construction in progress 740 268 740 268
Buildings and improvements22,246 22,367 1,4051,40523,651 23,772
Improvements other than buildings 272 272 272 272
Improvements - golf course 5,8245,824 5,824 5,824
Furniture, fixtures and equipment6,542 6,944 773 665 7,315 7,609
Total assets 31,584 31,730 9,325 9,217 40,909 40,947
Less accumulated depreciation(16,152) (15,621) (3,601)(3,453)(19,753) (19,074)
Net assets 15,432$ 16,109$ 5,724$ 5,764$ 21,156$ 21,873$
Additional information on the Village's capital assets can be found in Note 5 on pages 43-45 of this
report.
Debt
Currently, the Village uses debt financing on an as-needed basis each year. At the end of the current fiscal
year, the Village had total long-term debt of $3.75 million, all of which is in business-type activities.
The last outstanding debt instrument in the General Fund was satisfied in 2010; therefore, there is no
long-term debt outstanding in the Village’s governmental activities. None of the Village’s long-term debt
comprises debt backed by the full faith and credit of the government.
Table 6
Village of North Palm Beach
Outstanding Debt
(In Thousands)
Governmental Business-type
Activities Activities Total
201320122013 2012 20132012
Loans payable 3,358$ 3,608$ 3,358$ 3,608$
Capital leases 396 107 396 107
Total$$3,754$ 3,715$ 3,754$ 3,715$
Additional information on the Village's debt can be found in Note 6 on pages 45-47 of this report.
13
NEXT YEAR'S BUDGET AND ECONOMIC FACTORS
The Village’s Unassigned Fund Balance is viewed by the Administration as a measurement of Village
financial stability. Unassigned general fund balance increased to $11.34 million during the current 2013
fiscal year. The Village is now ready to address the economic challenges anticipated in the next few
years.
The economic outlook for the primary revenue source for Florida municipalities will be challenging, as
cities are facing state mandated reductions of property taxes. In an effort to provide tax relief and spur the
slumping housing market, the State legislature focused on property tax reform in the 2007 session. House
Bill 1B was enacted to limit the authority of local governments to levy ad valorem taxes for the FY 2008
budget year and beyond.
The economic downturn and decline in property values have significantly impacted Village revenues. To
address the impact of the legislation, continuing increases in the cost of employee compensation and
benefits, and the reduction of revenues, the Village will need to continue to prioritize essential services
and desired levels of service to allocate sufficient funding in future budget years.
CONTACTING THE VILLAGE'S FINANCIAL MANAGEMENT
This financial report is designed to provide our citizens, taxpayers, customers, investors, and creditors
with a general overview of the Village's finances and to show the Village's accountability for the money it
receives. If you have questions about this report or need additional financial information, contact the
Village's Finance Department, at the Village of North Palm Beach, 501 U.S. Highway 1, North Palm
Beach, Florida 33408.
BASIC FINANCIAL STATEMENTS
Statement of Net Position
September 30, 2013
GovernmentalBusiness-type
ActivitiesActivities Total
Assets
Cash and cash equivalents 5,945,279$ 875,867$ 6,821,146$
Investments 8,449,149 8,449,149
Accounts receivable 382,225 11,779 394,004
Inventories 32,968 96,922 129,890
Prepaids 260,706 55,017 315,723
Due from other governments 414,293 414,293
Restricted assets:
Cash and cash equivalents 317,190 317,190
Net pension assets 531,546 531,546
Intangible assets, net of amortization 28,967 28,967
Capital assets:
Nondepreciable 2,795,778 1,051,311 3,847,089
Depreciable (net of depreciation)12,636,188 4,672,626 17,308,814
Total assets 31,765,322 6,792,489 38,557,811
Liabilities
Accounts payable 365,948 59,269 425,217
Accrued liabilities 641,508 641,508
Deposits 3,800 3,800
Unearned revenue 241,704 217,682 459,386
Noncurrent liabilities:
Due within one year 999,590 395,296 1,394,886
Due in more than one year 1,793,701 3,449,034 5,242,735
Total liabilities 4,042,451 4,125,081 8,167,532
Net Position
Net investment in capital assets 15,431,966 1,998,974 17,430,940
Restricted for:
Recreation 237,174 237,174
Streets and roads 10,368 10,368
Public safety 21,052 21,052
Library 45,883 45,883
Other purposes 2,713 2,713
Unrestricted 11,973,715 668,434 12,642,149
Total net position 27,722,871$ 2,667,408$ 30,390,279$
See notes to the financial statements.
THE VILLAGE OF NORTH PALM BEACH, FLORIDA
14
THE VILLAGE OF NORTH PALM BEACH, FLORIDA
Statement of Activities
For the Year Ended September 30, 2013
Charges for
Functions/Programs ExpensesActivities
Government:
Governmental activities
General government 2,489,488$ 107,976$
Public safety 8,282,062 522,121
Public works 4,482,973 403,447
Community development and planning 966,245 993,059
Leisure services 2,974,290 1,087,182
Total governmental activities 19,195,0583,113,785
Business-type activities - country club 3,629,1203,577,446
Total business-type activities 3,629,1203,577,446
Total government 22,824,178$ 6,691,231$
15
Program Revenues Net Expense (Revenue) and
OperatingCapital Changes in Net Assets
Grants andGrants and Governmental Business-type
ContributionsContributions ActivitiesActivitiesTotal
1,050$ (2,380,462)$ $ (2,380,462)$
33,910 (7,726,031) (7,726,031)
32,719 (4,046,807) (4,046,807)
26,814 26,814
24,222 233,949(1,628,937) (1,628,937)
91,901 233,949(15,755,423)(15,755,423)
(51,674)(51,674)
(51,674)(51,674)
91,901$ 233,949$ (15,755,423) (51,674) (15,807,097)
General Revenues:
Taxes:
Property taxes 9,981,391 9,981,391
Local option gas taxes 261,852 261,852
Utility service taxes 2,197,760 2,197,760
Franchise taxes 1,160,780 1,160,780
Sales and use taxes 1,187,221 1,187,221
Investment income 37,029 8,555 45,584
Miscellaneous 38,219 38,219
Gain on disposal of equipment 69,905 69,905
Total general revenues 14,864,252 78,460 14,942,712
Change in net position (891,171) 26,786 (864,385)
Net position, beginning of year 28,614,042 2,640,622 31,254,664
Net position, end of year 27,722,871$ 2,667,408$ 30,390,279$
See notes to the financial statements.
16
THE VILLAGE OF NORTH PALM BEACH, FLORIDA
Balance Sheet
Governmental Funds
September 30, 2013
Capital Nonmajor Total
Projects Governmental Governmental
General Fund Funds Funds
Assets
Cash and cash equivalents 4,168,943$ 1,772,830$ 3,506$ 5,945,279$
Investments 8,449,149 8,449,149
Accounts receivable 382,225 382,225
Inventories 32,968 32,968
Prepaids 260,706 260,706
Due from other funds 129,830 44,028 173,858
Due from other governments 149,756 264,537 414,293
Restricted cash and cash equivalents 317,190 317,190
Total assets 13,890,767$ 1,816,858$ 268,043$ 15,975,668$
Liabilities and fund balances
Liabilities
Accounts payable 302,174$ 17,241$ 46,533$ 365,948$
Accrued liabilities 641,508 641,508
Due to other funds 173,858 173,858
Deferred revenue 241,704 241,704
Total liabilities 1,185,386 17,241 220,391 1,423,018
Fund balances
Nonspendable:
Inventories and prepaids 293,674 293,674
SBA Fund B 108,449 108,449
Restricted for:
Recreation 237,174 237,174
Streets and roads 10,368 10,368
Public safety 21,052 21,052
Library 45,883 45,883
Other purposes 2,713 2,713
Committed for:
Future tax relief 442,833 442,833
Assigned for:
Small business grants 73,935 73,935
Subsquent year's expenditures 126,081 126,081
Special revenue funds 47,652 47,652
Capital project funds 1,799,617 1,799,617
Unassigned 11,343,219 11,343,219
Total fund balances 12,705,381 1,799,617 47,652 14,552,650
Total liabilities and fund balances 13,890,767$ 1,816,858$ 268,043$ 15,975,668$
See notes to the financial statements.
17
THE VILLAGE OF NORTH PALM BEACH, FLORIDA
Reconciliation of the Balance Sheet – Governmental Funds
to the Statement of Net Position
Governmental Funds
September 30, 2013
Fund balances - total governmental funds 14,552,650$
Amounts reported for governmental activities in the statement of net
position are different because:
Capital assets used in governmental activities are not financial
resources and therefore are not reported in the governmental funds:
Governmental capital assets 31,584,342$
Less: accumulated depreciation (16,152,376)
15,431,966
Net pension assets related to defined benefit pension plans are not
available to pay for current-period expenditures and, therefore, are not
reported as assets in the governmental funds:531,546
Claims and settlements (50,000)
Other postemployement benefits (1,552,830)
Accrued compensated absences (1,190,461)
(2,793,291)
Net position of governmental activities 27,722,871$
See notes to the financial statements.
Long-term liabilities, including notes and bonds payable, are not due and
payable in the current period and therefore are not reported in the
governmental funds. Long term liabilities at year-end consist of:
18
THE VILLAGE OF NORTH PALM BEACH, FLORIDA
Statement of Revenues, Expenditures, and Changes in Fund Balances
Governmental Funds
For the Year Ended September 30, 2013
CapitalNonmajorTotal
ProjectsGovernmental Governmental
General Fund Funds Funds
Revenues
Taxes 13,601,783$ $ $ 13,601,783$
Licenses and permits 803,337 803,337
Intergovernmental 1,276,155 541,448 1,817,603
Charges for services 2,141,437 2,141,437
Fines and forfeitures 131,524 131,524
Investment 37,029 37,029
Miscellaneous 207,076 207,076
Total revenues 18,198,341 541,448 18,739,789
Expenditures
Current
General government 2,346,281 2,346,281
Public safety 7,623,777 323,444 7,947,221
Public works 3,733,977 3,733,977
Community development and planning933,117 933,117
Leisure services - recreation 2,491,559 2,491,559
Capital outlay 296,833 595,214 218,004 1,110,051
Total expenditures 17,425,544 595,214 541,448 18,562,206
Excess (deficiency) of revenues
over (under) expenditures 772,797 (595,214) 177,583
Other financing sources (uses)
Transfers in 265,000 265,000
Transfers out (265,000) (265,000)
Total other financing sources (uses)(265,000) 265,000
Net change in fund balances 507,797 (330,214) 177,583
Fund balances
Beginning of year 12,197,584 2,129,831 47,652 14,375,067
End of year 12,705,381$ 1,799,617$ 47,652$ 14,552,650$
See notes to the financial statements.
19
THE VILLAGE OF NORTH PALM BEACH, FLORIDA
Reconciliation of the Statement of Revenues, Expenditures, and Changes in Fund
Balances of the Governmental Funds to the Statement of Activities
For the Year Ended September 30, 2013
Net change in fund balances - total governmental funds 177,583$
Amounts reported for governmental activities in the statement of
activities are different because:
Governmental funds report capital outlays as expenditures.
However, in the statement of activities, the cost of capital
assets is allocated over their estimated useful lives and reported
as depreciation expense:
Expenditures for capital assets 1,119,801$
Less: current year depreciation (1,564,265)
(444,464)
Gains and losses on disposal of capital assets are reported in the statement
of activities, whereas in the governmental funds the proceeds from the sale
increases financial resources. The difference is the net book value of the
assets retired:
Net book value for retired assets (233,277)
Expenses that do not use current financial resources are not
reported on the governmental funds but are included in the
statement of activities:
Change in long-term compensated absences 32,138
Change in net pension asset of defined benefit pension plans (31,266)
Change in other postemployement benefits (391,885)
(391,013)
Change in net position (891,171)$
See notes to the financial statements.
20
THE VILLAGE OF NORTH PALM BEACH, FLORIDA
Statement of Net Position
Proprietary Fund
September 30, 2013
Enterprise
Assets
Current assets
Cash and cash equivalents 875,867$
Accounts receivable 11,779
Inventories 96,922
Prepaids 55,017
Total current assets 1,039,585
Non-current assets
Intangible asset, net 28,967
Land, buildings, and equipment, net 5,723,937
Total non-current assets 5,752,904
Total assets 6,792,489
Liabilities
Current liabilities
Accounts payable 59,269
Deposits 3,800
Deferred revenue 217,682
Compensated absences - current portion 12,778
Capital leases - current portion 121,584
Loans payable - current portion 260,934
Total current liabilities 676,047
Non-current liabilities
Other postemployement benefits 64,322
Compensated absences 13,300
Capital leases 274,471
Loans payable 3,096,941
Total non-current liabilities 3,449,034
Total liabilities 4,125,081
Net position
Net investment in capital assets 1,998,974
Unrestricted 668,434
Total net position 2,667,408$
See notes to the financial statements.
21
THE VILLAGE OF NORTH PALM BEACH, FLORIDA
Statement of Revenues, Expenses, and Changes in Net Position
Proprietary Fund
For the Year Ended September 30, 2013
Enterprise
Operating revenue
Greens fee/cart rentals/membership fees 2,302,240$
Golf shop revenues 373,902
Driving range revenues 281,518
Restaurant revenues 610,715
Miscellaneous 9,071
Total operating revenues 3,577,446
Operating expenses
Golf course maintenance expenses 1,124,920
Clubhouse grounds expenses 93,778
Golf shop expenses 876,384
Food and beverage expenses 735,705
Administrative and general 108,348
Insurance 43,680
Other 3,265
Depreciation and amortization 481,489
Total operating expenses 3,467,569
Operating income 109,877
Nonoperating revenues (expenses)
Interest revenue 8,555
Gain on disposal of equipment 69,905
Interest expense (161,551)
Total nonoperating revenues (expenses)(83,091)
Change in net position 26,786
Net position - beginning 2,640,622
Net position - ending 2,667,408$
See notes to the financial statements.22
THE VILLAGE OF NORTH PALM BEACH, FLORIDA
Statement of Cash Flows
Proprietary Fund
For the Year Ended September 30, 2013
Enterprise
Cash flows from operating activities:
Receipts from customers 3,525,541$
Payments to suppliers for goods or services (2,169,292)
Payments to employees for services (846,523)
Net cash provided by operating activities 509,726
Cash flows from capital and related financing activities:
Proceeds from capital leases 485,847
Proceeds from the sale of capital assets 133,800
Principal paid on long term debt (447,144)
Interest paid on debt (161,551)
Acquisition of capital assets (500,393)
Net cash provided (used) by capital and related financing activities (489,441)
Cash flows from investing activities:
Interest and dividends on investments 8,555
Net increase (decrease) in cash and cash equivalents 28,840
Cash and cash equivalents at beginning of year 847,027
Cash and cash equivalents at end of year 875,867$
Reconciliation of operating income
to net cash provided by operating activities:
Operating income 109,877$
Adjustments to reconcile operating income
to net cash provided by operating activities:
Depreciation 481,489
Change in assets and liabilities
Decrease in accounts receivable 4,235
(Increase) in inventory (20,116)
(Increase) in prepaids (27,558)
(Decrease) in accounts payable (9,603)
Increase in deposits 1,700
Increase in compensated absences payable 19,154
(Decrease) in deferred revenue (57,840)
Increase in other postemployment benefits 8,388
Total adjustments 399,849
Net cash provided by operating activities 509,726$
See notes to the financial statements.
23
THE VILLAGE OF NORTH PALM BEACH, FLORIDA
Statement of Fiduciary Net Position
Fiduciary Funds
September 30, 2013
Employee
RetirementAgency
Funds Funds
Assets
Cash and cash equivalents 1,954,096$ 352,440$
Investments:
Common equity securities 7,394,004
International common equity securities 1,005,284
U.S. Government agencies 875,410
Municipal bonds 132,686
Corporate bonds 2,672,316
Equity mutual funds 7,480,394
Fixed income mutual funds 2,629,508
Real estate investment fund 743,950
Accrued interest and dividends 39,108
Accounts receivable 122,166
Prepaids 1,498
Total assets 25,050,420 352,440
Liabilities
Accounts payable 27,586
Accounts payable, broker-dealers 89,760
Due to others 352,440
Total liabilities 117,346 352,440
Net Position
Held in trust for pension benefits
and other purposes 24,933,074$ $
See notes to the financial statements.
24
THE VILLAGE OF NORTH PALM BEACH, FLORIDA
Statement of Changes in Fiduciary Net Position
Fiduciary Funds
For the Year Ended September 30, 2013
Employee
Retirement
Funds
Additions
Contributions
Employer 1,387,593$
Plan members 233,952
State on-behalf payments 307,380
Total contributions 1,928,925
Investment earnings
Dividends and interest 565,466
Net increase in fair value
of investments 2,254,516
Total investment earnings 2,819,982
Less: investment expenses 122,981
Total net investment earnings 2,697,001
Total additions 4,625,926
Deductions
Administrative expense 82,731
Benefits 699,670
Refund of contributions 0
Total deductions 782,401
Change in net position 3,843,525
Net position - beginning 21,089,549
Net position - ending 24,933,074$
See notes to the financial statements.
25
THE VILLAGE OF NORTH PALM BEACH, FLORIDA
Notes to the Basic Financial Statements
September 30, 2013
26
NOTE 1 – SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES
A. Reporting Entity
The Village of North Palm Beach, Florida (“the Village”) was incorporated in 1956 pursuant to
Chapter 31481, Laws of Florida, Extraordinary Session 1956. The Village is located in the
northeast portion of Palm Beach County, Florida. Its municipal area comprises approximately
1,900 acres of land and 1,200 acres of lakes, canals and lagoons. The Village’s nonseasonal
population consists of approximately 13,000 residents, which increases during the winter months
to approximately 18,000 people. The Village operates under the Council-Manager form of
government and provides the following services to its residents: public safety, planning and
zoning, sanitation, library, parks, marinas, and a country club. The Village Council (the
“Council”) is responsible for legislative and fiscal control of the Village.
As required by generally accepted accounting principles, these financial statements include the
Village (the primary government) and its component units. Component units are legally separate
entities for which the Village is financially accountable. The Village is financially accountable if:
· it appoints a voting majority of the organization’s governing board and (1) it is able to
impose its will on the organization, or (2) there is a potential for the organization to
provide specific financial benefits to or impose specific financial burdens on the Village,
or
· the organization is fiscally dependent on the Village and (1) there is a potential for the
organization to provide specific financial benefits to the Village or (2) impose specific
financial burdens on the Village.
Organizations for which the Village is not financially accountable are also included when doing
so is necessary in order to prevent the Town’s financial statements from being misleading.
Based upon application of the above criteria, the Village of North Palm Beach has determined
that there are two legally separate entities to consider as potential component units. The Village
of North Palm Beach General Employees’ Retirement Fund and the Village of North Palm Beach
Fire and Police Retirement Fund are component units as they are fiscally dependent on and
impose a specific financial burden on the Village. They are reported in the Village’s financial
statements as fiduciary funds.
B. Government-wide and Fund Financial Statements
The government-wide financial statements (i.e., the statement of net position and the statement
of activities) report information on all non-fiduciary activities of the Village. For the most part,
the effect of interfund activities has been removed from these statements. Governmental
activities, which are normally supported by taxes and intergovernmental revenues, are reported
separately from business-type activities, which rely, to a significant extent, on fees and charges
for support.
THE VILLAGE OF NORTH PALM BEACH, FLORIDA
Notes to the Basic Financial Statements
September 30, 2013
27
NOTE 1 – SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES (Continued)
B. Government-wide and Fund Financial Statements (Continued)
The statement of activities demonstrates the degree to which the direct expenses of a given
function or segment are offset by program revenues. Direct expenses are those that are clearly
identifiable with a specific function or segment. Program revenues include 1) charges to
customers or applicants who purchase, use, or directly benefit from goods, services, or privileges
provided by a given function or segment, and 2) grants and contributions that are restricted to
meeting the operational or capital requirements of a particular function or segment. Taxes and
other items not properly included among program revenues are reported instead as general
revenues.
Separate financial statements are provided for governmental funds, proprietary funds, and
fiduciary funds, even though the latter are excluded from the government-wide financial
statements. Major individual governmental funds and the major individual enterprise fund are
reported as separate columns in the fund financial statements.
C. Measurement Focus, Basis of Accounting and Financial Statement Presentation
The government-wide financial statements and proprietary fund financial statements are reported
using the accrual basis of accounting and the economic resources measurement focus. Fiduciary
funds use the accrual basis of accounting and, except for agency funds, the economic resources
measurement focus. Agency funds do not have a measurement focus. Revenues are recorded
when earned and expenses are recorded when a liability is incurred, regardless of the timing of
related cash flows. Property taxes are recognized as revenues in the year for which they are
levied. Grants and similar items are recognized as revenue as soon as all eligibility requirements
imposed by the provider have been met.
Governmental fund financial statements are reported using the current financial resources
measurement focus and the modified accrual basis of accounting. Revenues are recognized as
soon as they are both measurable and available. Revenues are considered to be available when
they are collectible within the current period or soon enough thereafter to pay liabilities of the
current period. For this purpose, the Village considers revenues to be available if they are
collected within 60 days of the end of the current fiscal period. Expenditures generally are
recorded when a liability is incurred, as under accrual accounting. However, debt service
expenditures, as well as expenditures related to compensated absences and claims and
judgments, are recorded only when payment is due.
Property taxes, sales taxes, franchise taxes, licenses, intergovernmental revenue, investment
income, and charges for services are all considered to be susceptible to accrual and so have been
recognized as revenue of the current fiscal period. All other revenues are considered to be
measurable and available only when received in cash by the Village.
THE VILLAGE OF NORTH PALM BEACH, FLORIDA
Notes to the Basic Financial Statements
September 30, 2013
28
NOTE 1 – SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES (Continued)
C. Measurement Focus, Basis of Accounting and Financial Statement Presentation (Continued)
The Village reports the following major governmental funds:
General Fund
The general fund is the primary operating fund and is used to account for all financial resources
applicable to the general operations of the Village except those required to be accounted for in
another fund.
Capital Projects Fund
The capital projects fund is used to account for the cost of acquiring, constructing, and placing
into service those capital improvements which are associated with activities in the General Fund.
The Village reports the following major (and only) proprietary fund:
Country Club Enterprise Fund
The fund accounts for the activities related to the Country Club.
Additionally, the Village reports the following fund types:
Special Revenue Funds
The Village has four special revenue funds to account for the proceeds of specific revenue
sources that are legally restricted to expenditures for specific sources. The funds are the Public
Safety Fund, Northlake Boulevard Fund, Recreation, and On-Behalf Pension Contributions.
Employee Retirement Funds
The pension trust funds account for the activities of the General Employees Retirement Fund and
the Fire and Police Officers Retirement Fund which accumulate resources for pension benefits to
qualified employees.
THE VILLAGE OF NORTH PALM BEACH, FLORIDA
Notes to the Basic Financial Statements
September 30, 2013
29
NOTE 1 – SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES (Continued)
C. Measurement Focus, Basis of Accounting and Financial Statement Presentation (Continued)
Agency Funds
The Agency Funds account for assets that are held for other parties and cannot be used to finance
the Village’s own programs. The two agency funds are the Northlake Boulevard Task Force,
which is for the streetscape improvement of Northlake Boulevard, and the Manatee Protection
Fund, in which the assets are held in trust for the protection of manatees through the enforcement
of boat speed zones on the intracoastal and inland waterways.
As a general rule, the effect of interfund activity has been eliminated from the government-wide
financial statements. Exceptions to this general rule are charges between the government’s
country club and various other functions of the Village. Elimination of these charges would
distort the direct costs and program revenues reported for the various functions concerned.
Proprietary funds distinguish operating revenues and expenses from non-operating items.
Operating revenues and expenses generally result from providing services and producing and
delivering goods in connection with a proprietary fund’s principal ongoing operations. The
principal operating revenues of the Village’s Country Club Enterprise Fund are charges to
customers for sales and services. Operating expenses for the Enterprise Fund include the cost of
sales and services, administrative expenses, and depreciation on capital assets. All revenues and
expenses not meeting this definition are reported as non-operating revenues and expenses.
When both restricted and unrestricted resources are available for use, it is the Village’s policy to
use restricted resources first, then unrestricted resources as needed.
D. Assets, Liabilities, and Net Position or Equity
Cash and Cash Equivalents
All short-term investments that are highly liquid are considered to be cash equivalents. Cash
equivalents are readily convertible to a known amount of cash, and, at the day of purchase, have
a maturity date no longer than three months.
THE VILLAGE OF NORTH PALM BEACH, FLORIDA
Notes to the Basic Financial Statements
September 30, 2013
30
NOTE 1 – SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES (Continued)
D. Assets, Liabilities, and Net Position or Equity (Continued)
Accounts Receivable
Accounts receivable of the General Fund consists of billed and unbilled receivables.
Concentration of Credit Risk
The Village performs ongoing credit evaluations of its customers and does not require collateral.
The Village maintains an allowance for uncollectible accounts at a level which management
believes is sufficient to cover potential credit losses.
Investments
Investments are reported at fair value, which is determined by using various third-party pricing
sources. The Local Government Surplus Funds Trust Fund, administered by the Florida State
Board of Administration, is a “2a-7 like” pool and these investments are valued using the pooled
share price.
Interfund Transactions
Activity between funds that is representative of lending/borrowing arrangements outstanding at
the end of the fiscal year are referred to as either “due to” or “due from other funds”. Any
residual balance outstanding between the governmental activities and business-type activities are
reported in the government-wide financial statements as internal balances.
Transfers and interfund balances totally within governmental activities and those that are totally
within business-type activities are eliminated and not presented in the government-wide financial
statements. Transfers and balances between governmental and business-type activities are
presented in the government-wide financial statements.
Inventories and Prepaid Items
Inventories are valued at cost determined on a last-in, first-out basis (LIFO). The costs of
governmental fund type inventory are recorded as expenditures when consumed rather than when
purchased. Inventories in the Enterprise Fund consist of goods for sale to the public. The initial
cost is recorded as an asset at the time the individual inventory items are purchased and are
charged against operations in the period when used.
Certain payments to vendors reflect costs applicable to future accounting periods and are
recorded as prepaid items in both government-wide and fund financial statements.
THE VILLAGE OF NORTH PALM BEACH, FLORIDA
Notes to the Basic Financial Statements
September 30, 2013
31
NOTE 1 – SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES (Continued)
D. Assets, Liabilities, and Net Position or Equity (Continued)
Capital Assets and Depreciation
Capital assets, which include property, plant, infrastructure, and equipment, are reported in the
applicable governmental or business-type activities column in the government-wide financial
statements. The Village capitalizes all land purchases. The capitalization policy for other assets
are items with an estimated life in excess of one year and an initial individual cost of $250,000
for infrastructure, $25,000 for land improvements, $50,000 for buildings and building
improvements, and $5,000 for equipment and vehicles. The Village has elected to retroactively
apply the capitalization requirements of GASB Statement No. 34 to major general infrastructure
assets acquired in fiscal years ending after June 30, 1980, or that were significantly reconstructed
or improved during that multi-year period. Infrastructure is reported in buildings and
improvements.
The accounting and reporting treatment applied to the capital assets associated with a fund is
determined by the fund’s measurement focus. General capital assets are assets of the Village as
a whole. When purchased, such assets are recorded as expenditures in the governmental funds
and capitalized as assets in the government-wide statement of net position. General capital
assets are carried at historical cost. Where cost cannot be determined from the available records,
estimated historical cost has been used to record the estimated value of the assets. Assets
acquired by gifts or bequests are recorded at their fair value at the date of acquisition.
Capital assets of the Enterprise Fund are capitalized in the fund. The valuation basis for
Enterprise Fund capital assets is the same as those used for General capital assets. Additionally,
net interest cost is capitalized on Enterprise Fund projects during the construction period.
Additions, improvements, and other capital outlay that significantly extend the useful life of an
asset are capitalized. Other costs incurred for repairs and maintenance are expensed as incurred.
Depreciation has been provided over the estimated useful lives using the straight-line method of
depreciation. The estimated lives for each major class of depreciable capital assets are as
follows:
Buildings, improvements and infrastructure 5-30 years
Golf course improvements 5-30 years
Machinery and Equipment 3-15 years
Vehicles 3-20 years
THE VILLAGE OF NORTH PALM BEACH, FLORIDA
Notes to the Basic Financial Statements
September 30, 2013
32
NOTE 1 – SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES (Continued)
D. Assets, Liabilities, and Net Position or Equity (Continued)
Deferred Revenue
The government reports deferred revenue on its government wide statement of net position,
proprietary statement of net position, and governmental funds balance sheet. Deferred revenues
arise when potential revenue does not meet both the "measurable" and "available" criteria for
recognition in the current period. Deferred revenues also arise when the government receives
resources before it has a legal claim to them, as when grant monies are received prior to
incurring qualifying expenditures. In subsequent periods, when both revenue recognition criteria
are met, or when the government has a legal claim to the resources, the liability for deferred
revenue is removed and revenue is recognized.
Compensated Absences
The Village’s employees are granted compensated absence pay for vacation and sick leave in
varying amounts based on length of service. Unused compensated absences are payable upon
separation from service. Vacation is accrued as a liability when the employee earns benefits.
This means that the employee has rendered services that give rise to a vacation liability and it is
probable that the Village will compensate the employee in some manner, e.g., in cash or paid
time-off, now or upon termination or retirement. The Village uses the vesting method in
accruing sick leave liability. Under the vesting method, the liability for sick leave is accrued for
employees who are eligible to receive termination payments upon separation.
Compensated absences are accrued when incurred in the government-wide and proprietary
financial statements. A liability for these amounts is reported in the governmental funds only if
the amounts have matured, for example, as a result of employee resignations or retirements. For
the governmental funds, compensated absences are liquidated by the General Fund.
Long-Term Obligations
In the government-wide financial statements, and proprietary fund types in the fund financial
statements, long-term debt and other long-term obligations are reported as liabilities in the
applicable governmental activities, business-type activities, or proprietary fund type statement of
net position. Bond premiums and discounts, as well as issuance costs, are deferred and
amortized over the life of the bonds using the effective interest method. Bonds payable are
reported net of the applicable bond premium or discount. Bond issuance costs are reported as
deferred charges and amortized over the term of the related debt.
THE VILLAGE OF NORTH PALM BEACH, FLORIDA
Notes to the Basic Financial Statements
September 30, 2013
33
NOTE 1 – SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES (Continued)
D. Assets, Liabilities, and Net Position or Equity (Continued)
Long-Term Obligations (Continued)
In the fund financial statements, governmental fund types recognize bond premiums and
discounts, as well as bond issuance costs, during the current period. The face amount of debt
issued is reported as other financing sources. Premiums received on debt issuances are reported
as other financing sources, while discounts on debt issuances are reported as other financing
uses. Issuance costs, whether or not withheld from the actual debt proceeds received, are
reported as debt service expenditures.
Net Position
Equity in the government-wide statement of net position and the proprietary fund is displayed in
three categories: 1) net investment in capital assets, 2) restricted, and 3) unrestricted. Invested in
capital assets, net of related debt consists of capital assets reduced by accumulated depreciation
and by any outstanding debt incurred to acquire, construct, or improve those assets. Restricted
net position is reported when there are legal limitations imposed on their use by Village
legislation or external restrictions by other governments, creditors, or grantors. Unrestricted net
position consists of all net position that does not meet the definition of either of the other three
components.
Fund Equity
Fund balance is the difference between assets and liabilities reported in governmental funds. There
are five possible components of fund balance:
Nonspendable fund balance represents amounts that are not in spendable form or are
legally or contractually required to be maintained intact.
Restricted fund balance represents amounts that can be spent only for specific purposes
stipulated by external providers (e.g. creditors, grantors, contributor, or laws or regulations
of other governments) or imposed by law through constitutional provisions or enabling
legislation.
Committed fund balance represents amounts that can be used only for the specific purposes
pursuant to constraints imposed by Village Commission by the adoption of an ordinance,
the Village’s highest level of decision making authority. Those committed amounts cannot
be used for any other purpose unless the Village removes or changes the specified use by
the adoption of an ordinance.
Assigned fund balance includes spendable fund balance amounts that are intended to be
used for specific purposes, as expressed by the Village Commission or Village Manager, in
accordance with the Villages fund balance policy, that are neither considered restricted nor
committed. The Small Business Grants is a program the Village Council approved in the
prior fiscal year to provide matching grants of up to $5,000 for improvements to small
business properties.
THE VILLAGE OF NORTH PALM BEACH, FLORIDA
Notes to the Basic Financial Statements
September 30, 2013
34
NOTE 1 – SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES (Continued)
D. Assets, Liabilities, and Net Position or Equity (Continued)
Fund Equity (Continued)
· Unassigned fund balance is the residual fund balance classification for the general fund.
When both restricted and unrestricted resources are available for use, it is the Village’s policy to
use restricted resources first, then unrestricted resources as they are needed.. The Village will
first use committed fund balance, then assigned fund balance, and then unassigned fund balance
when expenditures are incurred for purposes for which any of the unrestricted fund balance
classifications could be used.
Use of Estimates
The financial statements and related disclosures are prepared in conformity with accounting
principles generally accepted in the United States. Management is required to make estimates
and assumptions that affect the reported amounts of assets and liabilities, the disclosure of
contingent assets and liabilities at the date of the financial statements, and revenue and expenses
during the period reported. These estimates include the collectability of accounts receivable, the
use and recoverability of inventory, the useful lives and impairment of tangible assets, and the
realization of net pension assets, among others. Estimates and assumptions are reviewed
periodically and the effects of revisions are reflected in the financial statements in the period
they are determined to be necessary. Actual results could differ from those estimates.
Statement of Cash Flows
For purposes of the statement of cash flows, the Village considers all short-term investments that
are highly liquid to be cash equivalents. Cash equivalents are readily convertible to a known
amount of cash, and at the day of purchase, have a maturity date no longer than three months.
NOTE 2 – STEWARDSHIP, COMPLIANCE, AND ACCOUNTABILITY
A. Budgetary Data
Formal budgetary integration is employed as a management control device during the year for
the General Fund and the Enterprise Fund. The only governmental fund with a legally adopted
annual budget is the General Fund. This budget is adopted on a basis consistent with generally
accepted accounting principles. Except for budgeting capital expenditures and not budgeting for
depreciation, the annual appropriated budgets for the Enterprise Funds are adopted on a basis
consistent with generally accepted accounting principles. For budgeting purposes, current year
encumbrances are not treated as expenditures.
THE VILLAGE OF NORTH PALM BEACH, FLORIDA
Notes to the Basic Financial Statements
September 30, 2013
35
NOTE 2 – STEWARDSHIP, COMPLIANCE, AND ACCOUNTABILITY (Continued)
A. Budgetary Data (Continued)
The procedures for establishing budgetary data are as follows:
· In July of each year, the Village Manager submits a proposed operating budget to the
Council for the next fiscal year commencing the following October 1st. The proposed
budget includes expenditures and the means of financing them.
· During the third week of July, the Council holds public meetings to obtain taxpayer
comments.
· Upon completion of the public hearings and prior to October 1, a final operating budget
is legally enacted through the passage of an ordinance. Estimated beginning fund
balances are considered in the budgetary process.
· The Village Manager is authorized to transfer budgeted amounts up to $10,000. Any
change to the total fund expenses must be approved by the Village Council.
· Appropriations along with encumbrances lapse on September 30th.
Budgeted amounts are as originally adopted, or as amended by appropriate action. During the
year, several supplementary appropriations were necessary.
Encumbrance accounting is employed in governmental funds. Encumbrances (e.g. purchase
orders or contracts) outstanding at year end are reported as reservations of fund balances and do
not constitute expenditures or liabilities because the commitments will be reappropriated and
honored during the subsequent year. The General Fund had $266,715 in outstanding
encumbrances at year-end.
B. Property Taxes
Under Florida law, the assessment of all properties and the collection of all county, municipal,
and school board property taxes are consolidated in the offices of the County Property Appraiser
and the County Tax Collector. All property is reassessed according to its fair market value on
January 1 of each year and each assessment roll is submitted to the State Department of Revenue
for review to determine if the assessment rolls meet all of the appropriate requirements of State
law. The laws of the State regulating tax assessment are also designed to assure a consistent
property valuation method statewide. State Statutes permit municipalities to levy property taxes
at a rate of up to 10 mills.
The tax levy of the Village is established by the Council prior to October 1 of each year during
the budget process. The Palm Beach County Property Appraiser incorporates the Village’s
millage into the total tax levy, which includes the County, County School Board, and special
district tax requirements. The millage rate assessed by the Village for the year ended September
30, 2013, was 6.9723 ($6.9723 for each $1,000 of assessed valuation).
THE VILLAGE OF NORTH PALM BEACH, FLORIDA
Notes to the Basic Financial Statements
September 30, 2013
36
NOTE 2– STEWARDSHIP, COMPLIANCE, AND ACCOUNTABILITY (Continued)
B. Property Taxes (Continued)
Taxes may be paid less a 4% discount in November or at declining discounts each month through
the month of February. All unpaid taxes become delinquent on April 1 following the year in
which they are assessed. Delinquent taxes on real property bear interest at 18% per year. On or
prior to June 1 following the tax year, certificates are offered for sale for all delinquent taxes on
real property.
After sale, tax certificates bear interest at 18% per year or at any lower rate bid by the buyer.
The certificate holder may make application for a tax deed on any unredeemed tax certificate
after a period of two years. The County holds unsold certificates. Delinquent taxes on personal
property bear interest at 18% per year until the tax is satisfied either by seizure and sale of the
property or by the five-year statute of limitations. At September 30, 2013, unpaid delinquent
taxes are not material and have not been recorded by the Village.
NOTE 3 – DEPOSITS AND INVESTMENTS
Deposits
As of September 30, 2013, the carrying amount of the Village’s deposits (including fiduciary
funds) was $7,086,264, and the bank balances totaled $6,995,282. In addition to insurance
provided by the Federal Depository Insurance Corporation, deposits are held in banking
institutions approved by the State Treasurer of the State of Florida to hold public funds. Under
Florida Statutes Chapter 280, Florida Security for Public Deposits Act, the State Treasurer
requires all Florida qualified public depositories to deposit with the Treasurer or other banking
institution eligible collateral. In the event of failure of a qualified public depository, the
remaining public depositories would be responsible for covering any resulting losses. The
Village’s deposits at year end are considered insured for custodial credit risk purposes.
The Village pools idle cash from all funds for the purpose of increasing income through
investment activities. Investment income from the pool is allocated back to the respective funds
based on each fund’s equity in the pool with the exception of the Capital Projects Fund and the
special revenue funds.
Investments
The State Board of Administration is part of the Local Governments Surplus Funds Trust Fund
and is governed by Chapter 19-7 of the Florida Administrative Code. These rules provide
guidance and establish the general operating procedures for the administration of the Local
Governments Surplus Funds Trust Fund. Additionally, the Office of the Auditor General
performs the operational audit of the activities and investments of the State Board of
Administration. The Local Government Surplus Funds Trust Fund is not a registrant with the
Securities and Exchange Commission (SEC); however, the Board has adopted operating
procedures consistent with the requirements for a 2a-7 fund.
THE VILLAGE OF NORTH PALM BEACH, FLORIDA
Notes to the Basic Financial Statements
September 30, 2013
37
NOTE 3 – DEPOSITS AND INVESTMENTS (Continued)
Investments (Continued)
On December 4, 2007, based on recommendations from an outside financial advisor, the State
Board of Administration restructured the Pool into two separate pools. Pool A, (Local
Government Surplus Funds Trust Fund Investment Pool) consisted of all money market
appropriate assets. Pool B, (Surplus Funds Trust Fund) consisted of assets that either defaulted
on a payment, paid more slowly than expected, and/or had any significant credit and liquidity
risk. At the time of the restructuring, all current pool participants had their existing balances
proportionately allocated into Pool A and Pool B. On August 3, 2009, the SBA announced
“Florida PRIME” as the highly enhanced version of the SBA’s prior Local Government
Investment Pool.
The State Board of Administration is divided between two separate pools. Florida PRIME,
(Local Government Surplus Funds Trust Fund Investment Pool) consists of all money market
appropriate assets and Pool B (Surplus Funds Trust Fund) consists of assets that either defaulted
on a payment, paid more slowly than expected, and/or had significant credit and liquidity risk.
At September 30, 2013, Florida PRIME was assigned a "AAA(m)" principal stability fund rating
by the Standard and Poor's Ratings. Florida PRIME is considered a SEC 2a7-like fund, thus, the
account balance should also be considered its fair value. Fund B is not considered a SEC 2a7-
like fund and is not rated by any nationally recognized rating agency.
The weighted average days to maturity (WAM) of Florida PRIME at September 30, 2013, was
44 days. A portfolio’s WAM reflects the average maturity in days based on final maturity or
reset date, in the case of floating rate instruments. WAM measures the sensitivity of Florida
PRIME to interest rate changes.
The weighted average life (WAL) of Fund B at September 30, 2013, was 4.04 years. A
portfolio’s WAL is the dollar weighted average length of time until securities held reach
maturity. WAL is based on legal final maturity dates for Fund B as of September 30, 2013.
As of September 30, 2013, the Village had $394,000 invested in Florida PRIME. The cost basis
of Fund B as of September 30, 2013, was $95,750 and the fair value was $108,449. Additional
information regarding the Local Government Surplus Funds Trust Fund may be obtained from
the State Board of Administration.
THE VILLAGE OF NORTH PALM BEACH, FLORIDA
Notes to the Basic Financial Statements
September 30, 2013
38
NOTE 3 – DEPOSITS AND INVESTMENTS (Continued)
Investments (Continued)
As of September 30, 2013, the Village held the following investments:
Moody’s
Credit
Rating
Fair
Value
Weighted
Average
Maturity
Governmental Funds:
Wells Fargo municipal money
market fund N/R $ 150,905 N/A
State Board of Administration
Investment Fund B N/R 108,449 4.04 yrs. (WAL)
Florida PRIME (1) AAA(m) 394,000 44 days
Money Market Funds N/R 29,337 N/A
U.S. Government and Agency
Obligations Aaa 1,999,217 1.61 yrs.
U.S. Treasury Notes Aaa 5,911,155 1.74 yrs.
Corporate Bonds Aa3 to A2 400,991 0.83 yrs.
Fiduciary Funds:
Money Market Funds N/R 1,807,853 N/A
GNMA, FNMA, FHLMC
Pools N/R 399,757 16.66 yrs.
U.S. Government Agencies Aaa 475,653 2.8 yrs.
Corporate Bonds Aaa to Baa1 2,672,316 6.35 yrs.
Municipal Bonds Aaa to Aa2 132,686 20.7 yrs.
Domestic Common Equity
Securities N/R 7,394,004 N/A
International Common Equity
Securities N/R 1,005,284 N/A
Equity Mutual Funds N/R 4,115,915 N/A
Fixed Income Mutual Funds N/R 5,993,987 N/A
Real Estate Investment Fund N/R 743.950 N/A
Total investments $33,735,459
(1) Credit rating by Standard & Poor’s
Investments are held in the governmental and fiduciary funds.
Interest rate risk – Interest rate risk is the risk that changes in interest rates will adversely affect
the fair value of an investment. Generally, the longer the time to maturity, the greater the
exposure to interest rate risks.
THE VILLAGE OF NORTH PALM BEACH, FLORIDA
Notes to the Basic Financial Statements
September 30, 2013
39
NOTE 3 – DEPOSITS AND INVESTMENTS (Continued)
Investments (Continued)
Interest rate risk (Continued)
The Village limits its exposure to fair value losses resulting from rising interest rates by
structuring the investment portfolio so that the securities mature to meet cash requirements for
ongoing operations, thereby avoiding the need to sell securities on the open market prior to
maturity; and investing operating funds primarily in short-term securities, money market mutual
funds, or similar investment pools unless it is anticipated that long-term securities can be held to
maturity without jeopardizing the liquidity requirements. The Retirement Funds do not have a
formal investment policy that limits investment maturities as a means of managing exposure to
fair value losses arising from increasing interest rates.
The Village’s investment in asset backed securities consist of mortgage pass-through securities
based on pools of residential home mortgage loans which are subject to prepayments and
therefore highly sensitive to changes in interest rates.
Custodial credit risk – For an investment, custodial credit risk is the risk that, in the event of the
failure of the counterparty, the Village will not be able to recover the value of its investments
that are in the possession of an outside party. At September 30, 2013, all investments were
insured or collateralized, except the Village’s three pension funds, in which the underlying
securities are held by counterparty, or by its trust department or agent but not in the Village’s
name and is uninsured and unregistered. However, all securities are registered in the funds’
names. The investment in mutual funds and investment partnerships are considered unclassified
pursuant to the custodial credit risk categories of GASB Statement No. 3, because they are not
evidenced by securities that exist in physical or book-entry form.
Concentrations of credit risk – Concentration of credit risk is defined as the risk of loss attributed
to the magnitude of an investment in a single user. The Village places no limit on the amount it
may invest in any one issuer, except those in the Fire and Police Retirement Fund. Not more
than five (5) percent of the Fund’s assets shall be invested in the common stock or capital stock
of any one issuing company.
Investing in Foreign Markets – Investing in foreign markets may involve special risks and
considerations not typically associated with investing in companies in the United States of
America. These risks include revaluation of currencies, high rates of inflation, repatriation
restrictions on income and capital, and future adverse political, social, and economic
developments. Moreover, securities of foreign governments may be less liquid, subject to
delayed settlements, taxation on realized or unrealized gains, and their prices are more volatile
than those of comparable securities in U.S. companies.
Authorized Investments –The Village has adopted an investment policy that applies to all the
investment activity except the Employees’ Pension Funds, which are organized and administered
separately, as listed below, or for funds related to the issuance of debt where there are other
existing policies or indentures in effect for such funds.
THE VILLAGE OF NORTH PALM BEACH, FLORIDA
Notes to the Basic Financial Statements
September 30, 2013
40
NOTE 3 – DEPOSITS AND INVESTMENTS (Continued)
Investments (Continued)
Authorized Investments (Continued)
The Village is authorized to invest its funds as follows:
1. Interest-bearing checking, savings, and time deposits in banks from the most current top
ten listed “qualified public depositories”, as defined in Chapter 280, Florida Statutes;
with a collateral pledge level of 25% or 50% as established by the State Chief Financial
Officer;
2. Securities and Exchange Commission registered money/market mutual funds with a
minimum credit quality rating of AAAm from S&P or of Aaa-mf from Moody’s;
3. Insurance companies with a A.M. Best minimum rating of aaa;
4. orporate interest notes with a minimum credit quality rating of A- from S&P or of A3
from Moody’;
5. Commercial paper with a a minimum credit quality rating of A-1 from S&P or of P-1
from Moody’s;
6. State and/or Local Government Taxable and/or Tax-Exempt Debt with a minimum credit
quality rating of A- from S&P or of A3 from Moody’s for long term debt and a minimum
credit quality rating of A-2 from S&P or of AVMIG2 from Moody’s for short term debt;
7. The Local Government Surplus Funds Trust Fund or any intergovernmental investment
pool authorized pursuant to the Florida Interlocal Cooperation Act, as provided in
Chapter 163, Florida Statutes; provided all components in each pool must satisfy the
appropriate pre-qualification parameters noted for that institution;
8. Direct obligations of the United States Treasury;
9. Federal agencies and instrumentalities.
The Village General Employees’ Retirement Fund is authorized to invest its funds as follows:
1. Interest-bearing checking or savings accounts in qualified public depositories, as defined
in Chapter 280, Florida Statutes;
2. Interest-bearing time deposits in qualified public depositories, as defined in Chapter 280,
Florida Statutes;
3. The Local Government Surplus Funds Trust Fund or any intergovernmental investment
pool authorized pursuant to the Florida Interlocal Cooperation Act, as provided in
Chapter 163, Florida Statutes;
4. Securities and Exchange Commission registered money market funds with the highest
credit quality rating from a nationally recognized rating agency;
5. Direct obligations of the United States Treasury;
6. Federal agencies and instrumentalities;
THE VILLAGE OF NORTH PALM BEACH, FLORIDA
Notes to the Basic Financial Statements
September 30, 2013
41
NOTE 3 – DEPOSITS AND INVESTMENTS (Continued)
Investments (Continued)
Authorized Investments (Continued)
7. Securities of, or interest in, any open-end or closed-end management-type investment
company or investment trust registered under the Investment Company Act of 1940, 15
U.S.C. sections 80a-1 et seq., as amended from time to time, provided that the portfolio
of such investment company or investment trust is limited to obligations of the United
States Government or any agency or instrumentality thereof and to repurchase
agreements fully collateralized by such United States Government obligations, and
provided that such investment company or investment trust takes delivery of such
collateral either directly or through an authorized custodian;
8. Other investments authorized by law or by ordinance by the Village.
Investments of the Fire and Police Retirement Fund can consist of the following:
1. Time or savings accounts of a national bank, a state bank insured by the Federal Deposit
Insurance Corporation, or a savings, building and loan association insured by the Federal
Deposit Insurance Corporation;
2. Obligations issued by the U.S. Government, or an agency or instrumentality of the U.S.
Government, as well as obligations guaranteed by agencies or instrumentalities of the
U.S. Government, including mortgage-related or asset-backed securities;
3. Bonds, stocks, or any other evidence of indebtedness issued or guaranteed by a
corporation organized under the laws of the United States, any state or organized territory
of the United States, or the District of Columbia, provided:
a. The corporation is listed on any one (1) or more of the recognized national stock
exchanges and holds a rating in one of the three (3) highest classifications by a
major rating service; and
b. The Board shall not invest more than five (5) percent of its assets in the common
stock, capital stock, bonds or indebtedness of any one (1) issuing company, nor
shall the aggregate investment of in any one (1) issuing company exceed five (5)
percent of the outstanding capital stock of that company, nor shall the aggregate
of its investments in equities at cost exceed sixty (60) percent of the pension
funds’ assets;
4. Not withstanding any provision of this section to the contrary, the Board is specifically
authorized to invest in foreign securities to the extent authorized by Sections 175.071(1)
and 185.06(1)(b), Florida Statutes.;
5. Money market funds, defined as fixed income securities having a maturity of less than
one year provided all issues shall meet or exceed S&P’s A1 or Moody’s P1 credit rating;
THE VILLAGE OF NORTH PALM BEACH, FLORIDA
Notes to the Basic Financial Statements
September 30, 2013
42
NOTE 3 – DEPOSITS AND INVESTMENTS (Continued)
Investments (Continued)
Authorized Investments (Continued)
6. Bonds issued by the State of Israel;
7. Purchase in commingled real estate funds.
A reconciliation of deposit and investments as shown on the statement of net position and
statement of fiduciary net position for the Village is as follows:
By Category:
Deposits $ 7,086,264
Petty cash 5,850
Investments 33,735,459
Total deposits and investments $40,827,573
Presented in the statement of net position
Governmental activities
Cash and cash equivalents $ 6,085,910
Restricted cash and cash equivalents 176,559
Investments 8,449,149
Business-type activities
Cash and cash equivalents 875,867
Total statements of net position 15,587,485
Presented in the statement of fiduciary net
position
Pension trust funds
Cash and cash equivalents 1,954,096
Investments 22,933,552
Agency funds
Cash and cash equivalents 352,440
Total fiduciary funds 25,240,088
Total deposits and investments $40,827,573
THE VILLAGE OF NORTH PALM BEACH, FLORIDA
Notes to the Basic Financial Statements
September 30, 2013
43
NOTE 4 – RECEIVABLES
Receivables at September 30, 2013, were as follows:
General
Fund
Country
Club Total
Utility franchise fees & taxes $ 350,320 $ $ 350,320
Conroy Drive assessment 22,662 22,662
Other accounts receivable 9,243 11,779 21,022
Total accounts receivable $ 382,225 $ 11,779 $ 394,004
NOTE 5 – CAPITAL ASSETS
Capital Assets activity for the year ended September 30, 2013, was as follows:
Primary Government
Governmental Activities:
Beginning
Balance Additions Deletions
Transfers
Ending
Balance
Capital assets not being depreciated:
Land $ 2,151,089 $ $ (95,200)
$
$ 2,055,889
Construction in progress 267,493 610,473 (138,077) 739,889
Capital assets being depreciated:
Buildings 9,397,120 (94,000) 9,303,120
Improvements 12,970,475 (26,958) 12,943,517
Machinery and equipment 3,256,977 306,819 (911,776) 2,652,020
Vehicles 3,687,398 202,509 3,889,907
Total at historical cost: 31,730,552 1,119,801 (1,266,011) 31,584,342
Less accumulated depreciation for:
Buildings (4,796,901) (298,384) 94,000 (5,001,285)
Improvements (5,259,860) (876,031) 26,958 (6,108,933)
Machinery and equipment (2,651,500) (174,240) 911,776 (3,128,194)
Vehicles (2,912,584) (215,610) (3,128,194)
Total accumulated depreciation (15,620,845) (1,564,265) 1,032,734 (16,152,376)
Governmental activities capital
assets, net $ 16,109,707 $ (444,464) $ (233,277)
$
$ 15,431,966
THE VILLAGE OF NORTH PALM BEACH, FLORIDA
Notes to the Basic Financial Statements
September 30, 2013
44
NOTE 5 – CAPITAL ASSETS (Continued)
Depreciation expense was charged to functions/programs of the primary government as follows:
Governmental activities:
General government $ 106,037
Public safety 346,501
Public works 660,053
Community development 8,730
Leisure services 442,944
Total depreciation expense, governmental activities $1,564,265
Business-type activities:
Beginning
Balance Additions Deletions
Transfers
Ending
Balance
Capital assets not being depreciated:
Land $ 1,051,311 $ $ $ $ 1,051,311
Construction in progress
Capital assets being depreciated:
Buildings 1,405,035 1,405,035
Improvements 6,095,930 6,095,930
Machinery and equipment 394,780 135,920 (157,768) 372,932
Vehicles 270,235 364,473 (234,306) 400,402
Total at historical cost: 9,217,291 500,393 (392,074) 9,325,610
Less accumulated depreciation for:
Buildings (984,073) (26,730) (1,010,803)
Improvements (1,944,637) (307,684) (2,252,321)
Machinery and equipment (334,210) (46,659) 153,041 (227,828)
Vehicles (190,481) (95,378) 175,138 (110,721)
Total accumulated depreciation (3,453,401) (476,451) 328,179 (3,601,673)
Business-type activities capital
assets, net $ 5,763,890 $ 23,942 $ (63,895)
$
$ 5,723,937
Intangible Assets
The intangible asset consists of the right to the availability and use of reclaimed water resulting
from an agreement with Seacoast Utility Authority. The asset had an original value of $50,377
and is being amortized on a straight line basis over the period of the expected benefit of ten
years.
THE VILLAGE OF NORTH PALM BEACH, FLORIDA
Notes to the Basic Financial Statements
September 30, 2013
45
NOTE 5 – CAPITAL ASSETS (Continued)
Construction Commitments
Contracts awarded but not yet completed were as follows:
Project Description
Estimated
Cost
Governmental activities:
SW Neighborhoods Sidewalks and Streetlights $ 74,550
Veteran’s Park 136,809
NOTE 6 – LONG TERM LIABILITIES
Change in Long-Term Liabilities
Long-term liability activity for the year ended September 30, 2013, was as follows:
Beginning
Balance Additions Reductions
Ending
Balance
Amount
Due
Within
One Year
Governmental activities
Claims and settlements $ 50,000 $ $ $ 50,000 $
OPEB (see Note 13) 1,160,945 391,885 1,552,830
Compensated absences
payable 1,222,599 997,477 (1,029,615) 1,190,461 999,590
Total $ 2,433,544 1,389,362 $ (1,029,615) $ 2,793,291 $ 999,590
Business-type activities:
Loans payable $ 3,608,294 $ $ (250,419) $ 3,357,875 $ 260,934
Capital leases 106,933 485,847 (196,725) 396,055 121,584
OPEB (see Note 13) 45,168 19,154 64,322
Compensated absences
payable 17,690 20,638 (12,250) 26,078 12,778
Total $ 3,778,085 $ 525,639 $ (459,394) $ 3,844,330 $ 395,296
Governmental activities other post employment benefit obligations and compensated absences
are expected to be paid out of the general fund.
THE VILLAGE OF NORTH PALM BEACH, FLORIDA
Notes to the Basic Financial Statements
September 30, 2013
46
NOTE 6 – LONG TERM LIABILITIES (Continued)
Loans Payable
$4,893,673 Promissory Notes
The Village Council adopted Resolution No. 23-2006 authorizing the issuance of a note in the
amount of $4,893,673 to finance certain capital expenditures relating to the municipal golf
course and country club. The revenues of the Country Club are pledged to secure the loan.
Principal and interest payments are due semi-annually in the amount of $199,079, with a final
maturity date of April 1, 2024. The interest rate on the loan is 4.11% and is subject to
adjustment in the event of taxability of the interest on this note. As of September 30, 2013, the
principal amount outstanding was $3,357,875 and was for the purpose of business-type activities.
Annual debt service requirements to maturity are as follows:
Business-type activities:
Year Ending Principal Interest Total
2014 $ 260,934 $ 137,225 $ 398,159
2015 271,920 126,239 398,159
2016 283,040 115,119 398,159
2017 295,287 102,872 398,159
2018 307,719 90,440 398,159
2019 - 2023 1,743,997 246,798 1,990,795
2024 194,978 4,074 199,052
$ 3,357,875 $ 822,767 $ 4,180,642
$485,847 Capital Lease
The Village entered into a three year capital lease agreement for the purpose of financing the
lease-purchase of $485,847 of equipment for the Country Club in November 2013. Principal and
interest payments are due monthly, with a final maturity date in January 2016. The final
payment includes a balloon payment of $115,900. As of September 30, 2013, the principal
amount outstanding was $396,055 and the net book value of the equipment was $383,800. The
rate used to impute interest was 4%.
Annual debt service requirements to maturity are as follows:
Year Ending Principal Interest Total
2014 $ 121,584 $ 14,078 $ 135,662
2015 126,705 8,957 135,662
2016 147,766 1,799 149,565
$ 396,055 $ 24,834 $ 420,889
THE VILLAGE OF NORTH PALM BEACH, FLORIDA
Notes to the Basic Financial Statements
September 30, 2013
47
NOTE 6 – LONG TERM LIABILITIES (Continued)
Claims and Settlements
Effective October 1, 2006, the Village discontinued its participation in the Southeast Risk
Management Association (SERMA) and joined the Florida Municipal Insurance Trust (FMIT).
However, as a former participant in SERMA, the Village is liable for claims incurred through
September 30, 2006. At September 30, 2013, there is a long-term governmental liability of
$50,000 for pending claims activity for SERMA (see related Note 7.) The liability is included in
governmental noncurrent liabilities in the Statement of Net Position. SERMA is in the process
of terminating, once terminated the Village will be responsible for managing any outstanding
claims.
SERMA, a quasi-governmental agency, was created by an interlocal agreement, as authorized by
Chapter 163, Florida Statutes. Participating members pool their resources so as to provide a
comprehensive risk management program, including insurance coverage, whose cost is less than
the cost of each municipality obtaining insurance separately. The members are subject to
supplemental assessments in the event of deficiencies, except to the extent that deficiencies result
from a specific claim against a member in excess of the reinsurance available, such deficiency is
solely the responsibility of that member. SERMA reinsures for workers compensation and
property claims in excess of $250,000. Activity in the pool is allocated to participating members
based upon the cumulative contributions to the pool. The amount of settlements in SERMA
exceeded insurance coverage in the current fiscal year.
NOTE 7 – RISK MANAGEMENT
The Village is exposed to various risks of loss related to torts: theft of, damage to, and
destruction of assets; errors and omissions; and natural disasters.
The Village currently reports all of its risk management activities in the General Fund. Claims
expenditures and liabilities are reported when it is probable that a loss has occurred and the
amount of the loss can be reasonably estimated. These losses include an estimate of claims that
have been incurred but not reported.
Property and Casualty Group
Effective October 1, 2006, the Village discontinued its participation in the Southeast Risk
Management Association (SERMA) and joined the Florida Municipal Insurance Trust (FMIT).
However, as a former participant in SERMA, the Village is liable for claims incurred through
September 30, 2006. The governmental liability of $50,000 is for pending claims activity for
SERMA (See related Note 6).
The Village is also covered by Florida Statutes under the Doctrine of Sovereign Immunity which
effectively limits the amount of liability of municipalities to individual claims of
$200,000/$300,000 for all claims relating to the same incident. There have been no significant
reductions in insurance coverage in the prior year. No settlements exceeded insurance coverage
for the past three years.
THE VILLAGE OF NORTH PALM BEACH, FLORIDA
Notes to the Basic Financial Statements
September 30, 2013
48
NOTE 8 – EMPLOYEE RETIREMENT PLANS
The Village maintains the following two separate single employer defined benefit plans: Village
of North Palm Beach Fire and Police Retirement Fund, covering firefighters and police officers,
and Village of North Palm Beach General Employees Retirement Fund, covering substantially
all other full-time Village employees. Both plans are reported as pension trust funds and
included as part of the Village’s reporting entity. The Police and Fire Fund will issue separate
financial statements for the year ended September 30, 2013, the report may be obtained from the
Village Clerk. The General Employees Plan will not issue separate financial statements.
Additional information on these plans can be found beginning on page 65.
Each plan has its own board that acts as plan administrator and trustee: Board of Trustees (for
the Fire and Police Retirement Fund) and General Employees Retirement Board. Each plan’s
assets may only be used for the payment of benefits to the members and beneficiaries of the plan
in accordance with the terms of each plan document. The costs of administering each plan are
financed in the appropriate pension trust fund.
SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES
All Retirement Plans
Basis of Accounting. The retirement plans are reported on the accrual basis of accounting. Plan
member and state contributions are recognized as revenues in the period that the contributions
are due. Employer contributions to each plan are recognized when due and the employer has
made a formal commitment to provide the contributions. Benefits and refunds are recognized
when due and payable in accordance with the terms of each plan.
Method Used to Value Investments. Investments are reported at fair value and are managed by
third party money managers. The Village’s independent custodians and individual money
managers price each instrument using various third party pricing sources.
Investments Concentrations. The following investments represent concentrations of 5% or more
of net plan assets in investments that are not issued or guaranteed by the U.S. government.
General Employees Retirement Fund
No nongovernmental investments exceed 5% of net plan assets.
Fire and Police Retirement Fund
No nongovernmental investments exceed 5% of net plan assets.
THE VILLAGE OF NORTH PALM BEACH, FLORIDA
Notes to the Basic Financial Statements
September 30, 2013
49
NOTE 8 – EMPLOYEE RETIREMENT PLANS (Continued)
PLAN DESCRIPTION AND CONTRIBUTION INFORMATION
The following schedule is provided for general information purposes only and is derived from
the respective actual reports and Village information for the two retirement plans as of
October 1, 2011, the date of the latest actuarial valuation. Plan participants should refer to the
appropriate source documents for more complete information on the plans.
General Employees’ Fire and Police
Plan Description:
Authority Village Ordinance Village Ordinance/State
Asset Valuation:
Reporting Fair Value Fair Value
Legal Reserves None None
Long-Term Receivable None None
Internal/Participant Loans None None
Membership of each plan consisted of the following at October 1, 2011, the date of the latest
actuarial valuation:
GERF F&P
Active Participants:
Vested 52 16
Non-vested 6 36
Retirees and Beneficiaries receiving benefits 10 16
Terminated vested members 43 12
Total 111 80
General Employees' Retirement System
Plan Description. The plan is established under Code of Ordinances for the Village of North
Palm Beach, Florida, Part II, Chapter 2, and was most recently amended under Ordinance No.
2010-07 passed and adopted on May 27, 2010. The Plan is also governed by certain provisions
of Part VII, Chapter 112, Florida Statutes and the Internal Revenue Code. The Plan provides
retirement benefits as well as death benefits. All full time general employees who are not sworn
police officers or firefighters shall become members of the system on October 1st following
completion of 12 months of employment as a condition of employment. For those employees
retired before February 1, 1982, those employees hired after September 30, 2000, or those
employees hired before October 1, 2000, who elect to contribute an extra 2%, a 3% Cost of
Living increase is paid annually from the Plan. Authority to establish and amend the benefit
provisions of the plan rests with the Village Council.
THE VILLAGE OF NORTH PALM BEACH, FLORIDA
Notes to the Basic Financial Statements
September 30, 2013
50
NOTE 8 – EMPLOYEE RETIREMENT PLANS (Continued)
General Employees' Retirement System (Continued)
All benefits vest based on the following years of credited service.
Years of
Credited Service Vested %
Under 5 0%
5 or 6 50%
7 or 8 75%
9 or more 100%
Employees become eligible for normal retirement benefits after attaining the age of 60 and
completing nine years of credited service, or attaining the age of 65 (depending on employee
contribution rate). The normal retirement benefit consists of a life annuity, options available,
(subject to cost of living increases not to exceed 3% a year), of either 2%, 2.25%, or 2.5%
(depending on employee contribution rate) of Average Monthly Earnings (AME) times credited
service up to 20 years plus 1% of AME times credited service over 20 years. Early retirement
benefits can be received at age 55. The benefit is determined as for normal retirement and
payable at normal retirement date or payable immediately after reduction by 5% for each year by
which the benefit commencement date precedes the normal retirement date. If an active member
dies, his beneficiary receives a refund of member contributions without interest. For a member
who is age 55 and has at least five years of service but who dies before commencement of
retirement benefits, a monthly benefit is payable to the designated beneficiary; the benefit is
calculated as though the member had retired on his date of death and payable according to option
elected by the employee. For an active member who has at least five years of credited service
and dies prior to reaching normal retirement date, a benefit equal to his vested accrued benefit
will be paid to his beneficiary for ten years. If an employee terminates his employment, he is
entitled to the following:
- With less than five years of credited service, a refund of member contributions
without interest and no other benefit.
- With five or more years of credited service, a refund of member contributions, the
vested accrued benefit payable at normal retirement date or at any time after age 55
is attained, with the benefit being subject to the same reduction as for early
retirement benefits. The vesting schedule is listed above.
"Average Monthly Earnings" is the average during the 5 years within the last 10 years of
employment which produces the highest average.
THE VILLAGE OF NORTH PALM BEACH, FLORIDA
Notes to the Basic Financial Statements
September 30, 2013
51
NOTE 8 – EMPLOYEE RETIREMENT PLANS (Continued)
General Employees' Retirement System (Continued)
"Credited Service" consists of the total number of years and fractional parts of years of actual
service with the Village and shall apply to an employee whose employment is terminated with
the Village and who recommences fulltime employment within two years from the date of
termination.
Contributions. General employees may contribute 6%, 4%, 2% or 0% of earnings as elected by
the employee, with the retirement benefit received being based on the amount contributed. The
Village is required to contribute the amount necessary to fund the Plan properly according to the
Plan’s actuary. Contribution requirements of plan members and the Village are established and
may be amended by the Village Council.
Fire and Police Retirement System
Plan Description. The plan is established under Code of Ordinances for the Village of North
Palm Beach, Florida, Part II, Chapter 2, and was most recently amended under Ordinance No.
2010-01 passed and adopted on January 14, 2010. The Plan is also governed by certain
provisions of Part VII, Chapter 112, Florida Statutes and the Internal Revenue Code. The plan
provides retirement benefits as well as death and disability benefits. All benefits vest after ten
years of credited service. All fulltime police officers or firefighters are eligible for membership
immediately upon hire. Previously, members were not eligible until October 1st following
completion of 12 months of employment. Cost of living adjustments (COLA) are provided
annually each October 1, to reflect changes in CPI (subject to maximum increases or decreases
of 3% per year). Authority to establish and amend the benefit provisions of the plan rests with
the Village Council. Employees become eligible for normal retirement benefits after attaining
the age of 55, or the date on which the member attains age 52 and 25 credited years of service.
Previously, employees became eligible for normal retirement benefits after attaining the age of
55, only. The normal retirement benefit consists of ten years certain and life thereafter, with
other options available, (subject to cost of living adjustments not to exceed 3% a year), of 2.5%
of AME times the years of credited services, with a maximum benefit of 60% of AME.
Members are eligible for non-service connected disability, after ten years of credited service and
a total and permanent disability. For service connected disability, a total and permanent
disability with no service requirement, the disability benefit consists of a ten year certain and life
annuity that can be provided by the single-sum value of the member’s accrued pension benefit,
THE VILLAGE OF NORTH PALM BEACH, FLORIDA
Notes to the Basic Financial Statements
September 30, 2013
52
NOTE 8 – EMPLOYEE RETIREMENT PLANS (Continued)
Fire and Police Retirement System (Continued)
Plan Description (Continued)
but is at least 42% of AME for service connected disability and at least 25% of AME for non-
service connected disability. See the description of the General Employees’ Retirement System
for the remainder of the benefits, except that early retirement and termination benefits for vested
members can be received at age 50.
Contributions. Members are required to contribute 2% of their basic compensation to the plan.
The Village is required to contribute the remaining amount to fund the plan using the Entry Age
Actuarial Cost Method. Contribution requirements of plan members and the Village are
established and may be amended by the Village Council.
The Florida Constitution requires local governments to make the actuarially determined
contribution. The Florida Division of Retirement reviews and approves each local government’s
actuarial report prior to its being appropriated for use for funding purposes. Additionally, the
State collects locally authorized insurance premium surcharges which can only be distributed
after the State has ascertained that the local government has met its actuarial funding requirement
for the then most recently completed fiscal year. Contributions to the Plan from the State of
Florida totaled $264,570 during the fiscal year ended September 30, 2013.
All Retirement Plans
Annual Pension Cost and Net Pension Obligation. The Village's 2013 annual pension cost and
actual contributions for each plan are shown on the next page. The required contributions were
determined as part of the actuarial valuation for each plan. State law allows the Village to use a
portion of the State contribution to offset the Village’s pension cost.
Components of Annual Pension Cost and Net Pension Obligation
Annual Required Eligible
Pension Village State
Cost Contribution Contribution
General Employees’ Retirement Fund $592,589 $578,962 N/A
Fire and Police Retirement Fund $1,047,307 $808,474 $230,696
THE VILLAGE OF NORTH PALM BEACH, FLORIDA
Notes to the Basic Financial Statements
September 30, 2013
53
NOTE 8 – EMPLOYEE RETIREMENT PLANS (Continued)
The following schedule was determined as part of the October 1, 2012, actuarial valuation for the
General Employees’ and the October 1, 2013, actuarial valuation for the Fire and Police
Retirement Plans.
General
Employees’ Fire and Police
Annual required contribution (ARC) $ 578,962 $ 1,039,170
Interest on net pension obligation (NPO) (23,341) (19,355)
Adjustment to ARC 36,968 27,492
Annual pension cost 592,589 1,047,307
Actual contributions 579,118 1,039,170
Decrease in NPO 13,471 8,137
NPO at beginning of year (311,218) (241,936)
NPO at end of year $(297,747) $ (233,799)
Three-Year Trend Information
Annual Percentage Net Pension
Year Pension Annual of APC Obligation
Ended Cost (APC) Contribution Contributed (Asset)
General
Employees’ 9/30/11 $ 506,398 $ 646,537 127.7% $ (325,469)
9/30/12 639,460 625,209 97.8% (311,218)
9/30/13 592,589 579,118 97.7% (313,352)
Fire and
Police 9/30/11 $ 878,197 $ 872,066 99.3 % $ (249,203)
9/30/12 976,471 969,204 99.3 % (241,936)
9/30/13 1,047,307 1,039,170 99.2% (233,799)
THE VILLAGE OF NORTH PALM BEACH, FLORIDA
Notes to the Basic Financial Statements
September 30, 2013
54
NOTE 8 – EMPLOYEE RETIREMENT PLANS (Continued)
The following are the actuarial methods and significant actuarial assumptions:
General Employees’ Fire and Police
Valuation date 10/1/2012 10/1/2013
Actuarial Cost Method Frozen Entry Age Aggregate
Amortized Method Level percent closed N/A (1)
Remaining Amortization
Period 28 years N/A (1)
Asset Valuation Method
Difference between actual
and expected return
recognized over five years.
Five year smooth market.
Actuarial assumptions:
Investment rate of return*
7.5% up to retirement,
5.25% thereafter.
8%
Projected salary increase* 5.5% 6%
*Includes inflation at 4% 4%
Cost of living adjustments
3% for those retired before
2/1/82 or who contribute
an extra 2%.
3%
(1) The aggregate actuarial cost method does not identify or separately amortize unfunded
actuarial liabilities.
Schedule of Funding Progress
As noted above, the Fire and Police Retirement System utilizes the aggregate actuarial cost
method to determine contributions to the Plan. This method does not identify or separately
amortize unfunded actuarial liabilities. The required schedule of funding progress immediately
following the notes to the financial statements presents multiyear trend information about
whether the actuarial value of plan assets is increasing or decreasing over time relative to the
actuarial accrued liability for benefits. The schedule of funding progress was prepared using the
entry age actuarial cost method to provide information that serves as a surrogate for the funding
progress of the Plan.
THE VILLAGE OF NORTH PALM BEACH, FLORIDA
Notes to the Basic Financial Statements
September 30, 2013
55
NOTE 8 – EMPLOYEE RETIREMENT PLANS (Continued)
Fire and Police:
Actuarial
Valuation
Date
Actuarial
Value of
Assets
Actuarial
Accrued
Liability
(AAL)
Unfunded
AAL
Funded
Ratio
Covered
Payroll
Unfunded
AAL
as % of
Covered
Payroll
10/01/13 $14,030,480 $17,682,895 $3,652,415 79.3% $4,094,752 89.2%
General Employees’:
Actuarial
Valuation
Date
Actuarial
Value of
Assets
Actuarial
Accrued
Liability
(AAL)
Unfunded
AAL
Funded
Ratio
Covered
Payroll
Unfunded
AAL
as % of
Covered
Payroll
10/01/12 $8,758,198 $12,231,978 $3,473,780 71.6% $3,203,302 108.4%
NOTE 9 – PENSION PLAN FINANCIAL INFORMATION
Generally accepted accounting principles (GAAP) requires that financial statements for
individual pension plans be presented in the notes to the financial statements of the primary
government if separate GAAP financial reports have not been issued. The General Employees’
pension fund does not have a separate GAAP report issued, and the financial information
September 30, 2013, is presented below.
STATEMENT OF FIDUCIARY NET POSITION
General
Employees’
Pension
Assets
Cash and cash equivalents $ 326,112
Investments:
Equity mutual funds 7,457,979
Fixed income mutual funds 2,629,508
Accounts receivable/accrued interest
and dividends
27,826
Total assets 10,441,425
Liabilities
Accounts payable 8,272
Net position
Held in trust for pension benefits and
other purposes
$10,433,153
THE VILLAGE OF NORTH PALM BEACH, FLORIDA
Notes to the Basic Financial Statements
September 30, 2013
56
NOTE 9 – PENSION PLAN FINANCIAL INFORMATION (Continued)
STATEMENT OF CHANGES IN FIDUCIARY NET POSITION
General
Employees’
Pension
Additions
Contributions
Employer $ 579,118
Plan members 154,680
Total contributions 733,798
Investment earnings
Dividends and interest 266,327
Net increase in the fair value
of investments 808,324
Less investment expense (31,068)
Total investment earnings 1,043,583
Total additions 1,777,381
Deductions
Administration 12,902
Benefit 128,931
Total deductions 141,833
Change in net position 1,635,548
Net position - beginning 8,797,605
Net position - ending $ 10,433,153
NOTE 10 – ON-BEHALF PAYMENTS
The state makes a contribution to the Fire and Police Officers’ Retirement System from the
firefighters’ and police officers’ Insurance Premium Tax. For the fiscal year ended September
30, 2013, $307,380 was recorded as revenues and expenditures in the On-Behalf Pension
Contribution Special Revenue Fund relating to on-behalf payments received from the state.
THE VILLAGE OF NORTH PALM BEACH, FLORIDA
Notes to the Basic Financial Statements
September 30, 2013
57
NOTE 11 – DEFINED CONTRIBUTION PLAN
Effective October 1, 2006, all employees of the Village may participate in one of three Money
Purchase Plans that are qualified Defined Contribution Plans adopted under the provisions of
Internal Revenue Code Section 401(a). The three pension plans include Directors, General
Employees, and Municipal Employees. The defined contribution plans are administered by
International City/County Management Association and Retirement Corporation (ICMA-RC).
The ICMA-RC is a nonprofit corporation organized and existing under the laws of the State of
Delaware. Contribution requirements of employees’ and the Village are established and may be
amended by the Village Council.
The vesting period for each defined contribution plan is five years, with a vesting of zero percent
in the first year, and a vesting of twenty-five percent for each year thereafter. While the plans
will not provide for retroactive funding, the vesting period shall run from each employee’s
original date of hire. No loans are permitted by the plan. The normal retirement age for the plan
shall be age sixty. There is no waiting period for participation in the plan. The minimum age for
participation is eighteen.
The Village contributes 15% of participant earnings for the plan year. Earnings include regular
and bonus compensation, but do not include overtime or commissions. Employee contributions
are voluntary, after-tax contributions that are not matched by the Village. Employees may
contribute 3%, 5%, 10%, or 15% of earnings to the plan. Contributions are remitted to the trusts
every payroll period.
Because the Village has little administrative involvement and does not perform the investing
function for funds in the plans, the Village’s activities do not meet the criteria for inclusion in the
fiduciary funds of a government. Consequently, the plans are not included in the Village’s financial
statements.
Plan detail for participating employees at September 30, 2013, is listed below:
Directors General
Employees
Municipal
Employees
Total
Village contributions $87,200 $69,733 $87,393 $244,326
Employee contributions $37,032 $16,225 $32,597 $85,854
THE VILLAGE OF NORTH PALM BEACH, FLORIDA
Notes to the Basic Financial Statements
September 30, 2013
58
NOTE 12 – DEFERRED COMPENSATION PLAN ASSETS
Employees of the Village may participate in a deferred compensation plan adopted under the
provisions of Internal Revenue Code Section 457 (Deferred Compensation Plans with Respect to
Service for State and Local Governments).
The deferred compensation plan is available to all employees of the Village. Under the plan,
employees may elect to defer a portion of their salaries and avoid paying taxes on the deferred
portion until the withdrawal date. The deferred compensation amount is not available for
withdrawal by employees until termination, retirement, death, or unforeseeable emergency. A third
party administers the deferred compensation plan.
In 1998, the Village Adopted GASB-32, Accounting and Financial Reporting for Internal
Revenue Code Section 457 Deferred Compensation Plans. The Village modified its Deferred
Compensation Plan to conform with the changes in the Internal Revenue Code brought about by the
Small Business Job Protection Act of 1996 (the “Act”). The Act requires that eligible deferred
compensation plans established and maintained by governmental employers be amended to provide
that all assets of the plan be held in trust, or under one or more appropriate annuity contracts or
custodial accounts, for the exclusive benefit of plan participants and their beneficiaries. As a result
of this change, these plan assets are not property of the Village and are not subject to the claims of
the Village’s general creditors.
Because the Village has little administrative involvement and does not perform the investing
function for funds in the Plan, the Village’s activities do not meet the criteria for inclusion in the
fiduciary funds of a government.
NOTE 13 – OTHER POST EMPLOYMENT BENEFITS
The Village implemented Governmental Accounting Standards Board Statement 45 (GASB 45),
Accounting and Financial Reporting by Employers for Postemployment Benefits Other Than
Pensions, effective October 1, 2008. The Village elected to implement prospectively, and the
change in accounting principle had no effect on changes in net position/fund equity for prior
periods. Retirees of the Village pay an amount equal to the actual premium for health insurance
charged by the carrier, but there is an implied subsidy in the healthcare insurance premium for
retirees because the premium charged for these retirees is the same as the premium charged for
active employees, who are younger than retirees on average. This implied subsidy constitutes
other postemployment benefits (OPEB) under GASB 45.
Plan Description
The Village provides a single employer defined benefit health care plan to all of its employees.
The plan allows its employees and their beneficiaries, to continue to obtain health and dental
benefits upon retirement. The normal retirement age for police and firefighters is 55; the normal
retirement age for all other Village employees is either age 60 or 65, depending on the option
selected by the employee.
THE VILLAGE OF NORTH PALM BEACH, FLORIDA
Notes to the Basic Financial Statements
September 30, 2013
59
NOTE 13 – OTHER POST EMPLOYMENT BENEFITS (Continued)
Plan Description (Continued)
The benefits of the plan are in accordance with Florida Statutes, which are the legal authority for
the plan. The plan has no assets and does not issue a separate financial report.
Funding Policy
The Village does not directly make a contribution to the plan on behalf of retirees. Retirees and
their beneficiaries pay the same group rates as are charged to the Village for active employees by
its healthcare provider. However, the Village’s actuaries, in their actuarial valuation, calculate
an offset to the cost of these benefits as an Employer Contribution, based upon an implicit rate
subsidy. This offset equals the total age-adjusted costs paid by the Village or its active
employees for coverage of the retirees and their dependents for the year net of the retiree’s own
payments for the year.
Annual OPEB Cost and Net OPEB Obligation
The annual other post employment benefit (OPEB) cost is calculated based on the annual
required contribution of the employer, an amount actuarially determined in accordance with
GASB Statement No. 45. The annual required contribution represents a level of funding that, if
paid on an ongoing basis, is projected to cover normal cost each year and to amortize any
unfunded actuarial liabilities over a period not to exceed 30 years.
The annual OPEB cost and the net OPEB obligation for the Village for the current year and the
related information is as follows:
Required contribution rates:
Employer Pay-as-you-go
Plan members N/A
Normal cost $ 310,020
Interest on normal cost 12,401
Amortization 211,324
Interest on amortization 8,453
Annual required contribution (ARC) 542,198
Interest on net unfunded OPEB obligation 48,245
Adjustment to ARC (69,750)
Annual OPEB cost 520,693
Contributions made (109,654)
Increase in net OPEB obligation 411,039
Net OPEB obligation October 1, 2012 1,206,113
Net OPEB obligation September 30, 2013 $ 1,617,152
THE VILLAGE OF NORTH PALM BEACH, FLORIDA
Notes to the Basic Financial Statements
September 30, 2013
60
NOTE 13 – OTHER POST EMPLOYMENT BENEFITS (Continued)
Trend Information
Three-Year Trend Information
Percentage of
Fiscal Annual Annual Net
Year OPEB OPEB Cost OPEB
End Cost Contributed Obligation
09/30/11 $435,205 42.0% $789,852
09/30/12 $494,457 15.8% $1,206,113
09/30/13 $520,693 21.1% $1,617,152
Funded Status
The funded status of the plan as of most recent actuarial valuation date was as follows:
Actuarial valuation date 10/01/2012
Actuarial accrued liability $3,800,387
Actuarial value of plan assets $
Unfunded actuarial accrued liability (UAAL) $3,800,387
Funded ratio 0.0%
Covered payroll $7,089,797
UAAL as a percentage of covered payroll 53.6%
Actuarial valuations of an ongoing plan involve estimates of the value of reported amounts and
assumptions about the probability of occurrence of events far into the future. Amounts
determined regarding the funded status of the plan and the annual required contributions of the
employer are subject to continual revision as actual results are comparable with past expectations
and new estimates are made about the future. The schedule of funding progress presented as
required supplementary information following the notes to the financial statements, will present
multi-year trend information that shows whether the actuarial value of plan assets is increasing or
decreasing over time relative to the actuarial accrued liability for benefits. The Village has not
contributed assets to the plan at this time.
Actuarial Methods and Assumptions
Projections of benefits are based on the substantive plan (the plan as understood by the employer
and plan members) and includes the types of benefits in force at the valuation date and the
pattern of sharing benefit costs between the Village and the plan members to that point.
Actuarial calculations reflect a long-term perspective and employ methods and assumptions that
THE VILLAGE OF NORTH PALM BEACH, FLORIDA
Notes to the Basic Financial Statements
September 30, 2013
61
NOTE 13 – OTHER POST EMPLOYMENT BENEFITS (Continued)
Actuarial Methods and Assumptions (Continued)
are designed to reduce short-term volatility in actuarial accrued liabilities and the actuarial value
of assets. Significant methods and assumptions were as follows:
Actuarial valuation date 10/01/2012
Actuarial cost method Projected Unit Credit
Amortization method Level dollar, 30 Years, open
Remaining amortization period 30 years
Asset valuation method Unfunded
Actual assumptions:
Investment rate of return 4%
Inflation rate 2.75%
Healthcare cost trend 6.5% for 2012 decreasing to 4.7% in 2082
NOTE 14 – JOINTLY GOVERNED ORGANIZATION
The Village, through an interlocal agreement with certain other municipalities and Palm Beach
County, created the Seacoast Utility Authority (“Seacoast”) which provides water and sewer
service to the citizens of each of the participating municipalities and a portion of Palm Beach
County. Seacoast’s governing board consists of one member from each participating entity.
Seacoast is an Independent Authority organized under the laws of the State of Florida, and the
Village has no participating equity ownership in Seacoast. The Village paid $134,976 to
Seacoast during the fiscal year for water and sewer service.
NOTE 15 –TRANSFERS
Interfund transfers during the year ended September 30, 2013, are as follows:
Transfer Out:
General Fund
Transfer in:
Capital Projects Fund $265,000
The transfers from the General Fund to the other governmental fund were to move restricted and
unrestricted General Fund revenues to finance various programs that the government must
account for in other funds in accordance with budgetary authorizations, including amounts
provided as subsidies or matching funds for various grant programs.
THE VILLAGE OF NORTH PALM BEACH, FLORIDA
Notes to the Basic Financial Statements
September 30, 2013
62
NOTE 16 – CONTRACTS, COMMITMENTS AND CONTINGENCIES
Contingencies
The Village is involved in various litigations and claims arising in the course of operations. It is
the opinion of legal counsel that the likelihood of unfavorable outcome and the amounts of
potential losses cannot be reasonably determined for all claims at this time.
NOTE 17 – ACCOUNTING CHANGE
Below is a brief description and effective date of new accounting standards that could have a
significant impact on the Village’s financial statements.
In November 2010, the Governmental Accounting Standards Board (GASB) issued Statement
No. 61, The Financial Reporting Entity: Omnibus an amendment of GASB Statements No. 14
and No. 34. GASB 61 provides additional criteria for classifying entities as component units to
better assess the accountability of elected officials by ensuring that the financial reporting entity
includes organizations for which the elected officials are financially accountable or that are
determined by the government to be misleading to exclude.
In December 2010, the Governmental Accounting Standards Board (GASB) issued Statement
No. 62, Codification of Accounting and Financial Reporting Guidance Contained in Pre-
November 30, 1989 FASB and AICPA Pronouncements. GASB 62 directly incorporates the
applicable guidance from FASB and AICPA pronouncements into the state and local government
accounting and financial reporting standards, with provisions modified, as appropriate, to
recognize the effects of the governmental environment and the needs of governmental financial
statement users without affecting the substance of the applicable guidance.
In June 2011, the Governmental Accounting Standards Board (GASB) issued Statement No. 63,
Financial Reporting of Deferred Outflows of Resources, Deferred Inflows of Resources, and Net
Position. GASB 63 improves financial reporting by standardizing the presentation of deferred
outflows of resources and deferred inflows of resources and their effects on a government’s net
position. It alleviates uncertainty about reporting those financial statement elements by providing
guidance where none previously existed
NOTE 18 – NEW ACCOUNTING STANDARDS
Below is a brief description and effective date of new accounting standards that could have a
significant impact on the Village.
In March 2012, the GASB issued Statement No. 65, Items Previously Reported as Assets and
Liabilities. GASB 65 establishes accounting and financial reporting standards that reclassify, as
deferred outflows of resources or deferred inflows of resources, certain items that were
previously reported as assets and liabilities. This statement is effective for the fiscal year ending
September 30, 2014. Management is currently evaluating the impact of the adoption of this
statement on the Village’s financial statements.
THE VILLAGE OF NORTH PALM BEACH, FLORIDA
Notes to the Basic Financial Statements
September 30, 2013
63
NOTE 18 – NEW ACCOUNTING STANDARDS (Continued)
In March 2012, the GASB issued Statement No. 66, Technical Corrections – 2012 – an
amendment of GASB Statements No. 10 and No. 62. GASB 66 improves accounting and
financial reporting for a governmental reporting entity by resolving conflicting guidance that
resulted from the issuance of two pronouncements, Statement No. 54, Fund Balance Reporting
and Governmental Fund Type Definitions and Statement No. 62, Codification of Accounting and
Financial Reporting Guidance Contained in Pre-November 30, 1989 FASB and AICPA
Pronouncements. This statement is effective for the fiscal year ending September 30, 2014.
Management is currently evaluating the impact of the adoption of this statement on the Village’s
financial statements.
In June 2012, the GASB issued Statement No. 67, Financial Reporting for Pension Plans – an
amendment of GASB Statement 25. GASB 67 improves financial reporting by state and local
governmental pension plans primarily through enhanced note disclosures and schedules of
required supplementary information. This statement is effective for the fiscal year ending
September 30, 2014. Management is currently evaluating the impact of the adoption of this
statement on the Village’s financial statements.
In June 2012, the GASB issued Statement No. 68, Accounting and Financial Reporting for
Pensions – an amendment of GASB Statement 27. GASB 68 improves financial reporting by
state and local governments for pensions. It also improves information provided by state and
local governmental employers about financial support for pensions that is provided by other
entities. This Statement results from a comprehensive review of the effectiveness of existing
standards of accounting and financial reporting for pensions with regard to providing decision-
useful information, supporting assessments of accountability and inter-period equity, and
creating additional transparency. This statement is effective for the fiscal year ending September
30, 2015. Management is currently evaluating the impact of the adoption of this statement on the
Village’s financial statements.
In November 2013, the GASB issued Statement No. 71, Pension Transition for Contributions
Made Subsequent to the Measurement Date – an amendment of GASB Statement No. 68. This
Statement amends paragraph 137 of GASB 68 to require that, at transition, a government
recognize a beginning deferred outflow of resources for its pension contributions, if any, made
subsequent to the measurement date of the beginning net pension liability. The provisions of this
Statement are required to be applied simultaneously with the provisions of GASB 68.
Management is currently evaluating the impact of the adoption of this statement on the Village’s
financial statements.
REQUIRED SUPPLEMENTARY INFORMATION OTHER THAN MD&A
Actuarial UAAL as a
Actuarial Accrued Unfunded Percentage
Actuarial Value of Liability AAL Funded Covered of Covered
Valuation Assets (AAL) (1)(UAAL)Ratio Payroll Payroll
Date (a)(b)(b-a)(a/b)(c)((b-a)/c)
Other Post Employment Benefits (OPEB)
10/01/08 $ 2,741,387$ 2,741,387$ 0.0%6,231,104$ 44.0%
10/01/11 $ 3,432,815$ 3,432,815$ 0.0%7,103,304$ 48.3%
10/01/12 $ 3,800,387$ 3,800,387$ 0.0%7,089,797$ 53.6%
(1) Projected unit credit
The schedule of funding progress presented above will present multi-year trend information that
shows whether the actuarial value of plan assets is increasing or decreasing over time relative
to the actuarial accrued liability for benefits. The Village has not contributed assets to the plan at this time.
THE VILLAGE OF NORTH PALM BEACH, FLORIDA
Required Supplemental Information
September 30, 2013
Schedule of Funding Progress
64
FIDUCIARY FUNDS
Pension Trust Funds
General Employees Pension Trust Fund
Fire and Police Officers Pension Trust Fund
Actuarial
Accrued UAAL as a
ActuarialLiability Unfunded Percentage
ActuarialValue of(AAL)-AALFunded Covered of Covered
ValuationAssetsEntry Age(1)(UAAL)RatioPayroll Payroll
Date (a)(b)(b-a)(a/b)(c)((b-a)/c)
General Employees Retirement Fund (1)
10/1/20076,481,382$ 10,997,783$ 4,516,401$ 58.93%3,238,894$ 139.44%
10/1/20085,824,447 10,138,981 4,314,534 57.45%2,977,995 144.88%
10/1/20096,048,808 8,328,331 2,279,523 72.63%3,046,421 74.83%
10/1/20106,863,057 10,516,549 3,653,492 65.26%3,424,324 106.69%
10/1/20117,771,444 11,103,522 3,332,078 69.99%3,251,285 102.48%
10/1/20128,758,198 12,231,978 3,473,780 71.60%3,203,303 108.44%
Fire and Police Retirement Fund (2)
10/1/200810,376,733$ 11,719,336$ 1,342,603$ 88.54%3,253,109$ 41.27%
10/1/200910,650,648 12,656,293 2,005,645 84.15%3,488,338 57.50%
10/1/201011,240,540 14,121,958 2,881,418 79.60%3,922,596 73.46%
10/1/201111,656,106 14,634,876 2,978,770 79.65%3,852,019 77.33%
10/1/201212,605,506 16,081,371 3,475,865 78.39%3,886,494 89.43%
10/1/201314,030,480 17,682,895 3,652,415 79.34%4,094,752 89.20%
General Employees Retirement Fund (1)
The General Employees Retirement Fund uses the frozen entry age actuarial cost method.
Fire and Police Retirement Fund (2)
The Fire and Police Retirement Fund uses the aggregate actuarial cost method to
determine contributions to the Plan. This method does not identify or separately amortize unfunded
actuarial liabilities. The schedule of funding progress presented above was prepared using the entry age
actuarial cost method to provide information that serves as a surrogate for the funding progress of the Plan.
THE VILLAGE OF NORTH PALM BEACH, FLORIDA
Required Supplemental Information
September 30, 2013
Schedule of Funding Progress
65
THE VILLAGE OF NORTH PALM BEACH, FLORIDA
Required Supplemental Information
Schedule of Employer and State Contributions
Fiscal YearAnnual
Ended RequiredActual StatePercentage
September 30ContributionContributionContributionContributed
General Employees Retirement Fund
2008 875,126$ 876,712$ N/A 100.2%
2009 761,943 765,381 N/A 100.5%
2010 734,626 759,529 N/A 103.4%
2011 499,954 646,537 N/A 129.3%
2012 625,209 625,209 N/A 100.0%
2013 578,962 579,118 N/A 100.0%
Fire and Police Retirement Fund
2008 715,784$ 577,584$ 138,200$ 100.0%
2009 728,729 599,505 221,372 112.6%
2010 884,067 653,372 230,696 100.0%
2011 869,407 641,371 230,696 100.3%
2012 968,933 738,509 230,696 100.0%
2013 1,039,170 808,474 230,696 100.0%
September 30, 2013
66
General Employees Police and Fire
Retirement Fund Retirement Fund
Contribution rates as of 9/30/13:
Village 19.86%26.53%
Plan Members 6.00% (1)2.00%
Actuarially Determined Contribution 578,962 1,039,170
Contributions Made 579,118 1,039,170
Valuation date 10/1/2012 10/1/2013
Actuarial Cost Method Frozen Entry Age Aggregate
Amortized Method Level percent N/A (2)
closed
Remaining Amortization Period 28 N/A (2)
Asset Valuation Method Difference between Five year
actual and expected smooth
return recognized market
over five years.
Administrative Costs Expenses paid out of the Expenses paid out of the
fund other than investment fund other than investment
related expenses are related expenses are
assumed to be equal to the assumed to be equal to the
average of actual expenses average of actual expenses
over the previous two years.over the previous two years.
Actuarial Assumption:
Investment rate of return *7.5% up to retirement 8%
5.25% thereafter.
Projected salary increase *5.5%6%
*Includes inflation at 4%4%
Cost of living adjustments 3% for those retired 3%
before 2/1/82 or
who contribute an
extra 2%.
(1) Except for certain members who have elected not to contribute and for other members who have elected
to contribute only 2% or 4%.
(2) The aggregate actuarial cost method does not identify or separately amortize unfunded actuarial liabilities.
THE VILLAGE OF NORTH PALM BEACH, FLORIDA
Notes to the Trend Data
September 30, 2013
67
GENERAL FUND
THE VILLAGE OF NORTH PALM BEACH, FLORIDA
Schedule of Revenues, Expenditures, and Changes
in Fund Balance - Budget and Actual
General Fund
For the Year Ended September 30, 2013
Variance with
Final Budget
Budgeted Amounts Actual Positive
OriginalFinalAmounts(Negative)
Revenues
Taxes 13,315,763$ 13,315,763$ 13,601,783$ 286,020$
Licenses and permits 670,124 670,124 803,337 133,213
Intergovernmental 1,224,939 1,224,939 1,276,155 51,216
Charges for services 2,040,785 2,040,785 2,141,437 100,652
Fines and forfeitures 78,115 78,115 131,524 53,409
Investment 61,758 61,758 37,029 (24,729)
Miscellaneous 13,240 13,240 207,076 193,836
Total revenues 17,404,724 17,404,724 18,198,341 793,617
Expenditures
Current
General government 2,466,131 2,460,867 2,335,424 125,443
Public safety 7,457,619 7,457,619 7,623,777 (166,158)
Public works 4,133,850 3,932,455 3,733,977 198,478
Community development and planning880,740 965,320 933,117 32,203
Leisure services - recreation 2,466,384 2,479,555 2,491,559 (12,004)
Other government 23,500 10,857 12,643
Capital outlay 95,000 502,628 296,833 205,795
Total expenditures 17,499,724 17,821,944 17,425,544 396,400
Excess of revenues over
expenditures (95,000) (417,220) 772,797 1,190,017
Other financing sources (uses)
Appropriated fund balance 95,000 682,220 (682,220)
Transfer out (265,000) (265,000)
Total other financing uses 95,000 417,220 (265,000) (682,220)
Net change in fund balances $ $ 507,797 507,797$
Fund Balances
Beginning of year 12,197,584
End of year 12,705,381$
68
THE VILLAGE OF NORTH PALM BEACH, FLORIDA
Notes to the Budgetary
Required Supplementary Information (RSI)
General Fund
Note 1 - Basis of Accounting
Generally accepted accounting principles (GAAP) serve as the budgetary basis of accounting.
September 30, 2013
69
OTHER SUPPLEMENTARY INFORMATION
GENERAL FUND
THE VILLAGE OF NORTH PALM BEACH, FLORIDA
Schedule of Departmental Expenditures - Budget and Actual
General Fund
For the Year Ended September 30, 2013
Variance with
Final Budget
Original Final PositivePercent
Budget BudgetActual(Negative)Variance
Village Council
Personnel services 50,462$ 50,462$ 50,474$ (12)$ -0.02
Operating expenses 93,708 105,744 73,797 31,947 30.21
Total Village Council 144,170 156,206 124,271 31,935 20.44
Village Manager
Personnel services 256,277 256,277 243,777 12,500 4.88
Operating expenses 14,270 14,270 22,680 (8,410) -58.93
Total Village Manager 270,547 270,547 266,457 4,090 1.51
Village Finance
Personnel services 496,739 496,739 494,389 2,350 0.47
Operating expenses 51,850 51,850 51,530 320 0.62
Total Village Finance 548,589 548,589 545,919 2,670 0.49
Village Attorney
Operating expenses 164,437 164,437 128,381 36,056 21.93
Village Clerk
Personnel services 271,647 271,647 277,016 (5,369) -1.98
Operating expenses 26,730 9,430 8,235 1,195 12.67
Total Village Clerk 298,377 281,077 285,251 (4,174) -1.49
Information Technology
Personnel services 298,113 298,113 303,827 (5,714) -1.92
Operating expenses 36,900 36,900 34,993 1,907 5.17
Total Information Technology 335,013 335,013 338,820 (3,807) -1.14
Human Resources
Personnel services 215,828 215,828 205,471 10,357 4.80
Operating expenses 62,961 62,961 63,074 (113) -0.18
Total Human Resources 278,789 278,789 268,545 10,244 3.67
Police
Personnel services 4,332,777 4,332,777 4,409,856 (77,079) -1.78
Operating expenses 258,392 258,392 311,024 (52,632) -20.37
Total Police 4,591,169 4,591,169 4,720,880 (129,711) -2.83
Fire Rescue
Personnel services 2,585,530 2,585,530 2,639,029 (53,499) -2.07
Operating expenses 178,521 178,521 164,007 14,514 8.13
Total Fire Rescue 2,764,051 2,764,051 2,803,036 (38,985) -1.41
Public Works/Streets and Grounds
Personnel services 328,374 308,374 293,951 14,423 4.68
Operating expenses 33,215 33,215 43,648 (10,433) -31.41
Total Public Works 361,589 341,589 337,599 3,990 1.17
(Continued)
70
THE VILLAGE OF NORTH PALM BEACH, FLORIDA
Schedule of Departmental Expenditures - Budget and Actual
General Fund
For the Year Ended September 30, 2013
Variance with
Final Budget
Original Final PositivePercent
Budget BudgetActual(Negative)Variance
(Continued)
Sanitation
Personnel services 1,309,561$ 1,279,561$ 1,260,614$ 18,947$ 1.48
Operating expenses 160,500 160,500 147,270 13,230 8.24
Total Sanitation 1,470,061 1,440,061 1,407,884 32,177 2.23
Facility Services
Personnel services 302,902 277,902 256,388 21,514 7.74
Operating expenses 314,224 240,183 219,733 20,450 8.51
Total Facility Services 617,126 518,085 476,121 41,964 8.10
Street Maintenance
Personnel services 507,084 471,084 453,452 17,632 3.74
Operating expenses 741,606 775,252 680,569 94,683 12.21
Total Street Maintenance 1,248,690 1,246,336 1,134,021 112,315 9.01
Vehicle Maintenance
Personnel services 200,104 200,104 198,830 1,274 0.64
Operating expenses 236,280 186,280 179,522 6,758 3.63
Total Vehicle Maintenance 436,384 386,384 378,352 8,032 2.08
Planning and Engineering
Personnel services 221,405 221,405 234,691 (13,286) -6.00
Operating expenses 24,370 108,950 44,327 64,623 59.31
Total Planning and Engineering 245,775 330,355 279,018 51,337 15.54
Building
Personnel services 479,851 479,851 487,150 (7,299) -1.52
Operating expenses 23,497 23,497 31,956 (8,459) -36.00
Total Building 503,348 503,348 519,106 (15,758) -3.13
Code Enforcement
Personnel services 121,792 121,792 129,722 (7,930) -6.51
Operating expenses 9,825 9,825 5,271 4,554 46.35
Total Code Enforcement 131,617 131,617 134,993 (3,376) -2.57
Leisure Services-Recreation
Personnel services 585,685 585,685 584,569 1,116 0.19
Operating expenses 330,155 342,326 382,282 (39,956) -11.67
Total Leisure Services-Recreation 915,840 928,011 966,851 (38,840) -4.19
Library
Personnel services 516,931 516,931 512,388 4,543 0.88
Operating expenses 158,063 158,063 150,394 7,669 4.85
Total Library 674,994 674,994 662,782 12,212 1.81
(Continued)
71
THE VILLAGE OF NORTH PALM BEACH, FLORIDA
Schedule of Departmental Expenditures - Budget and Actual
General Fund
For the Year Ended September 30, 2013
Variance with
Final Budget
Original Final PositivePercent
Budget BudgetActual(Negative)Variance
(Continued)
Tennis
Personnel services 118,835$ 118,835$ 116,321$ 2,514$ 2.12
Operating expenses 356,301 356,301 345,880 10,421 2.92
Total Tennis 475,136 475,136 462,201 12,935 2.72
Pool
Personnel services 90,360 90,360 97,726 (7,366) -8.15
Operating expenses 223,054 223,054 218,680 4,374 1.96
Total Pool 313,414 313,414 316,406 (2,992) -0.95
Special Events
Operating expenses 87,000 88,000 83,319 4,681 5.32
Total Special Events 87,000 88,000 83,319 4,681 5.32
Other
Operating expenses 23,500 10,857 12,643 53.80
23,500 10,857 12,643 53.80
Non-Departmental
Operating expenses 528,608 528,608 477,641 50,967 9.64
528,608 528,608 477,641 50,967 9.64
Capital Outlay
Planning and Engineering 7,628 1,500 6,128 80.34
Leisure Services-Recreation 45,000 445,000 283,983 161,017 36.18
Pool 50,000 50,000 11,350 38,650
Total Capital Outlay 95,000 502,628 296,833 205,795 40.94
Total expenditures 17,499,724$ 17,821,944$ 17,425,544$ 396,400$ 2.22%
72
COMBINING FINANCIAL STATEMENTS
NONMAJOR GOVERNMENTAL FUNDS
Special Revenue Funds
Public Safety Fund
Northlake Boulevard Fund
Recreation Fund
On-Behalf Pension Contributions
THE VILLAGE OF NORTH PALM BEACH, FLORIDA
Combining Balance Sheet
Nonmajor Governmental Funds
Special Revenue Funds
PublicNorthlake On-BehalfTotal Nonmajor
Safety Boulevard Pension Governmental
Fund Fund Recreation Contributions Funds
Assets
Cash and cash equivalents 1,520$ 1,986$ $ $ 3,506$
Due from other governments 218,004 46,533 264,537
Total assets 1,520$ 1,986$ 218,004$ 46,533$ 268,043$
Liabilities
Accounts payable $ $ $ 46,533$ 46,533$
Due to other funds 173,858 173,858
Total liabilities 173,858 46,533 220,391
Fund balances
Assigned 1,520 1,986 44,146 47,652
Total fund balances 1,520 1,986 44,146 47,652
Total liabilities and fund balances 1,520$ 1,986$ 218,004$ 46,533$ 268,043$
September 30, 2013
73
THE VILLAGE OF NORTH PALM BEACH, FLORIDA
Combining Statement of Revenues, Expenditures, and Changes in Fund Balances
Nonmajor Governmental Funds
For the Year Ended September 30, 2013
Special Revenue Funds
Public Northlake On-Behalf Total Nonmajor
Safety Boulevard Pension Governmental
Fund Fund Recreation Contributions Funds
Revenues
Intergovernmental 16,064$ $ 218,004$ 307,380$ 541,448$
Total revenues 16,064 218,004 307,380 541,448
Expenditures
Current
Public safety 16,064 307,380 323,444
Capital outlay 218,004 218,004
Total expenditures 16,064 218,004 307,380 541,448
Net changes in fund balances
Fund balances - Beginning of year 1,520 1,986 44,146 47,652
Fund balances - End of year 1,520$ 1,986$ 44,146$ $ 47,652$
74
FIDUCIARY FUNDS
Pension Trust Funds
General Employees Pension Trust Fund
Fire and Police Officers Pension Trust Fund
THE VILLAGE OF NORTH PALM BEACH, FLORIDA
Combining Statement of Net Position - Fiduciary Funds
Fire andTotal
GeneralPoliceEmployee
EmployeesOfficersRetirement
PensionPensionFunds
ASSETS
Cash and cash equivalents 326,112$ 1,627,984$ 1,954,096$
Investments:
Domestic common equity securities 7,394,004 7,394,004
International common equity securities 1,005,284 1,005,284
U.S. Government agencies 875,410 875,410
Municipal bonds 132,686 132,686
Corporate bonds 2,672,316 2,672,316
Equity mutual funds 7,457,979 22,415 7,480,394
Fixed income mutual funds 2,629,508 2,629,508
Real estate investment fund 743,950 743,950
Accrued interest and dividends 2,040 37,068 39,108
Accounts Receivable 25,786 96,380 122,166
Prepaids 1,498 1,498
Total assets 10,441,425 14,608,995 25,050,420
LIABILITIES
Accounts payable 27,586 27,586
Accounts payable, broker-dealers 8,272 81,488 89,760
Total liabilities 8,272 109,074 117,346
Net Position
Held in trust for pension benefits
and other purposes 10,433,153$ 14,499,921$ 24,933,074$
(1) A schedule of funding progress for the General Employees and Fire and Police Officers plans
is presented on page 65.
September 30, 2013
75
Fire andTotal
General PoliceEmployee
EmployeesOfficersRetirement
Pension Pension Funds
Additions
Contributions
Employer 579,118$ 808,475$ 1,387,593$
Plan members 154,680 79,272 233,952
State on-behalf payments 307,380 307,380
Total contributions 733,798 1,195,127 1,928,925
Investment earnings
Dividends and interest 266,327 299,139 565,466
Net increase in fair value of investments 808,324 1,446,192 2,254,516
Total investment earnings 1,074,651 1,745,331 2,819,982
Less: investment expenses 31,068 91,913 122,981
Total investment earnings 1,043,583 1,653,418 2,697,001
Total additions 1,777,381 2,848,545 4,625,926
Deductions
Administration 12,902 69,829 82,731
Benefits 128,931 570,739 699,670
Total deductions 141,833 640,568 782,401
Change in net position 1,635,548 2,207,977 3,843,525
Net position - beginning 8,797,605 12,291,944 21,089,549
Net position - ending 10,433,153$ 14,499,921$ 24,933,074$
THE VILLAGE OF NORTH PALM BEACH, FLORIDA
Employee Retirement Funds
Combining Statement of Changes in Fiduciary Net Position
For the Year Ended September 30, 2013
76
AGENCY FUNDS
Manatee Protection Agency
Northlake Boulevard Task Force
THE VILLAGE OF NORTH PALM BEACH, FLORIDA
Combining Statement of Agency Net Assets
Manatee NorthlakeTotal
ProtectionBoulevardAgency
AgencyTask Force Funds
Assets
Cash and cash equivalents 290,647$ 61,793$ 352,440$
Liabilities
Due to others 290,647$ 61,793$ 352,440$
Agency Funds
September 30, 2013
77
Combining Schedule of Changes in Agency Net Assets and Liabilities
September 30, 2012 Additions Deductions September 30, 2013
Manatee Protection Agency
Assets
Cash and cash equivalents 288,150$ 2,497$ $ 290,647$
Liabilities
Due to others 288,150$ 2,497$ $ 290,647$
Northlake Boulevard Task Force
Assets
Cash and cash equivalents 61,262$ 531$ $ 61,793$
Liabilities
Due to others 61,262$ 531$ $ 61,793$
Total All Agency Funds
Assets
Cash and cash equivalents 349,412$ 3,028$ $ 352,440$
Liabilities
Due to others 349,412$ 3,028$ $ 352,440$
THE VILLAGE OF NORTH PALM BEACH, FLORIDA
For the Year Ended September 30, 2012
78
PROPRIETARY FUND
(ENTERPRISE FUND)
Country Club Fund
THE VILLAGE OF NORTH PALM BEACH, FLORIDA
Schedule of Revenues and Departmental Expenses - Budget and Actual
Country Club Fund - Budgetary Basis
For the Year Ended September 30, 2013
Variance with
Final Budget
OriginalFinal Positive Percent
Budget BudgetActual(Negative)Variance
Revenue
Greens fee/cart rentals/membership fees2,518,616$ 2,518,616$ 2,302,240$ (216,376)$ -8.59
Golf shop revenues 296,664 296,664 373,902 77,238 26.04
Driving range revenues 209,026 209,026 281,518 72,492 34.68
Restaurant revenues 821,300 821,300 610,715 (210,585) -25.64
Interest revenues 7,327 7,327 8,555 1,228 16.76
Proceeds from sale of assets 96,000 96,000 133,800 37,800 39.38
Miscellaneous 9,071 9,071
Total revenues 3,948,9333,948,9333,719,801(229,132)-5.80
Golf Maintenance
Operating expenses 1,242,550 1,214,705 1,124,920 89,785 7.39
Total Golf Maintenance 1,242,550 1,214,705 1,124,920 89,785 7.39
Golf Pro Shop and Range
Personnel services 518,648 518,648 575,398 (56,750) -10.94
Operating expenses 331,423 319,543 304,251 15,292 4.79
Total Golf Pro Shop and Range 850,071 838,191 879,649 (41,458) -4.95
Food and Beverage
Personnel services 363,814 363,814 348,684 15,130 4.16
Operating expenses 520,036 505,489 387,021 118,468 23.44
Capital outlay 14,547 14,546 1
Total Food and Beverage 883,850 883,850 750,251 133,599 15.12
Administration
Personnel services 56,286 56,286 66,319 (10,033) -17.83
Operating expenses 61,247 61,247 28,512 32,735 53.45
Capital outlay
Total Administration 117,533 117,533 94,831 22,702 19.32
Clubhouse and Grounds
Operating expenses 108,030 135,875 93,778 42,097 30.98
Total Clubhouse and Grounds 108,030 135,875 93,778 42,097 30.98
Insurance and General Liability
Operating expenses 43,881 43,881 43,680 201 0.46
Reserves
Operating 7,500 7,500 13,517 (6,017) (80.23)
Contingency 126,067 75,064 75,064 100.00
Total Reserves 133,567 82,564 13,517 69,047 83.63
Debt service
Debt service 569,451 632,334 608,695 23,639 3.74
Total expenses on the budgetary basis 3,948,933 3,948,933 3,609,321 339,612 8.60
Revenues over expenses $ $ 110,480$ 110,480$
Adjustments to reconcile to the GAAP Basis
Total expenses on the budgetary basis 3,609,321
Less: capital outlay costs capitalized (14,546)
Less: debt service (608,695)
Add: depreciation expense 481,489
Total operating expenses 3,467,569$
79
STATISTICAL SECTION
This part of the Village of North Palm Beach's comprehensive annual financial report presents detailed unaudited information as
a context for understanding what the information in the financial statement, note disclosures, and required supplementary
information says about the Village's overall financial health.
Contents Page
Financial Trends
These schedules contain trend information to help the reader understand how the Village's financial
performance and well-being have changed over time. These schedules include:
Net Position by Component 80
Changes in Net Position 81
Fund Balances, Governmental Funds 83
Changes in Fund Balances, Governmental Fund 84
Revenue Capacity
These schedules contain information to help the reader assess the Village's most significant local
revenue source, the property tax.
Net Assessed Value and Estimated Actual Value of Taxable Property 86Property Tax Rates - Direct and Overlapping Governments 87
Principal Property Taxpayers 88
Property Tax Levies and Collections 89
Debt Capacity
These schedules present information to help the reader assess the affordability of the Village's
current levels of outstanding debt and the Village's ability to issue additional debt in the future.
Ratios of Outstanding Debt by Type 90
Direct and Overlapping Governmental Activities Debt 81Pledged-Revenue Coverage 82
Demographic and Economic Information
These schedules offer demographic and economic indicators to help the reader understand the
environment within which the Village's financial activities take place.
Demographic and Economic Statistics 83
Principal Employers 94
Operating Information
These schedules contain service and infrastructure data to help understand how the information
in the Village's financial report relates to the services the Village provides and the activities it performs.
Full-Time Equivalent Village Government Employees by Function 95
Operating Indicators by Function/Program 96Capital Asset Statistics by Function/Program 97
Sources: Unless otherwise noted, the information in these schedules is derived from the comprehensive annual
financial reports for the relevant year.
STATISTICAL SECTION
2004 2005 2006 2007 2008
Governmental Activities:
Net investment in capital assets 3,762,961$ 3,535,596$ 8,118,773$ 10,543,788$ 12,845,093$
Restricted 470,155 19,828154,073113,269 979,182
Unrestricted 3,527,8656,654,9897,143,4529,281,170 9,836,912
Total governmental activities net position 7,760,98110,210,41315,416,29819,938,227 23,661,187
Business-Type Activities:
Net investment in capital assets 2,131,3671,919,1941,999,1232,195,630 2,492,524
Unrestricted (5,195)270,374415,865151,005 202,802
Total business-type activities net position 2,126,1722,189,5682,414,9882,346,635 2,695,326
Primary government:
Net investment in capital assets 5,894,3285,454,79010,117,89612,739,418 15,337,617
Restricted 470,155 19,828154,073113,269979,182
Unrestricted 3,522,6706,925,3637,559,3179,432,175 10,039,714
Total primary government net position 9,887,153$ 12,399,981$ 17,831,286$ 22,284,862$ 26,356,513$
2009 2010 2011 2012 2013
Governmental Activities:
Net investment in capital assets 16,643,241$ 18,184,508$ 17,237,355$ 16,109,707$ 15,431,966$
Restricted 251,088 390,081 548,489 658,194 317,190
Unrestricted 11,016,626 10,568,594 11,775,621 11,846,141 11,973,715
Total governmental activities net position 27,910,955 29,143,183 29,561,465 28,614,042 27,722,871
Business-Type Activities:
Net investment in capital assets 2,364,814 2,295,125 2,200,927 2,082,668 1,998,974
Unrestricted 434,212 403,261 385,623 557,954 668,434
Total business-type activities net position 2,799,026 2,698,386 2,586,550 2,640,622 2,667,408
Primary government:
Net investment in capital assets 19,008,055 20,479,633 19,438,282 18,192,375 17,430,940
Restricted 251,088 390,081 548,489 658,194 317,190
Unrestricted 11,450,838 10,971,855 12,161,244 12,404,095 12,642,149
Total primary government net position 30,709,981$ 31,841,569$ 32,148,015$ 31,254,664$ 30,390,279$
Basic Financial Statements and Management's Discussion and Analysis for State and Local Governments.
Fiscal Year
VILLAGE OF NORTH PALM BEACH
NET POSITION BY COMPONENT
LAST TEN FISCAL YEARS
(ACCRUAL BASIS OF ACCOUNTING) Unaudited
80
VILLAGE OF NORTH PALM BEACH
CHANGES IN NET POSITION
LAST TEN FISCAL YEARS
(ACCRUAL BASIS OF ACCOUNTING) Unaudited
Fiscal Year
2004 2005 2006 2007 2008
Expenses
Governmental activities:
General government 3,174,460$ 2,127,009$ 1,784,528$ 2,698,187$ 1,839,228$
Public safety 5,294,399 6,038,846 7,036,117 6,671,490 7,154,578
Public works 3,549,178 5,091,305 4,131,500 3,733,815 3,996,711
Community development and planning - - 657,112 737,165 860,448
Leisure services 1,280,483 1,635,784 2,562,627 2,781,658 3,244,045
Other government - 842,561 2,049 - -
Interest on long-term debt 40,580 151,233 241,995 204,666 120,549
Total governmental activities expenses 13,339,100 15,886,738 16,415,928 16,826,981 17,215,559
Business-type activities:
Country club 2,567,690 2,607,712 2,124,927 3,570,683 3,268,562
Total business-type activities 2,567,690 2,607,712 2,124,927 3,570,683 3,268,562
Total primary government expenses 15,906,790$ 18,494,450$ 18,540,855$ 20,397,664$ 20,484,121$
Program Revenues
Governmental activities:
Charges for services:
General government 355,118$ 285,386$ 158,160$ 122,455$ 123,334$
Public safety 273,391 329,081 388,671 345,731 383,325
Public works 895,291 1,326,820 140,923 217,975 288,994
Community development and planning - - 1,175,252 938,188 888,015
Leisure services 147,773 78,475 528,983 496,679 595,558
Other government - - - - -
Operating grants and contributions 89,362 1,392,729 998,573 170,389 88,224
Capital grants and contributions - - 462,394 1,454,526 1,602,465
Total governmental activities program revenues 1,760,935 3,412,491 3,852,956 3,745,943 3,969,915
Business-type activities:
Charges for services:
Country club 2,548,259 2,658,468 2,167,089 3,463,524 3,616,509
Operating grants and contributions - - 68,883 - 13,609
Capital grants and contributions - - - - -
Total business-type activities program revenues 2,548,259 2,658,468 2,235,972 3,463,524 3,630,118
Total primary government program revenues 4,309,194$ 6,070,959$ 6,088,928$ 7,209,467$ 7,600,033$
Net (Expense)/Revenue
Governmental activities (11,578,165)$ (12,474,247)$ (12,562,972)$ (13,081,041)$ (13,245,644)$
Business-type activities (19,431) 50,756 111,045 (107,159) 361,556
Total primary government net expense (11,597,596)$ (12,423,491)$ (12,451,927)$ (13,188,200)$ (12,884,088)$
General revenues and other changes in net position:
Governmental activities:
Taxes:
Property taxes 8,451,783$ 10,070,977$ 10,881,501$ 12,076,184$ 11,915,355$
Local option gas taxes - - 307,043 292,332 278,649
Utility service taxes 1,830,339 1,955,403 2,001,164 2,001,443 2,018,071
Franchise taxes 861,708 890,297 1,150,974 1,207,552 1,212,562
Sales and use taxes 1,230,803 1,277,124 1,415,917 1,339,893 1,227,341
Unrestricted grants and contributions 291,710 421,254 - - -
Investment earnings 53,600 196,699 477,420 650,022 194,652
Miscellaneous 92,260 111,927 53,264 8,836 55,719
Contributions for Support Our Troops - - - 15,502 16,959
Transfers - - 36,445 5,111 49,296
Total governmental activities 12,812,203 14,923,681 16,323,728 17,596,875 16,968,604
Business-type activities:
Investment income 3,450 12,640 112,841 43,917 36,431
Miscellaneous 42,560 - - - -
Transfers - - (36,445) (5,111) (49,296)
Total business-type activities 46,010 12,640 76,396 38,806 (12,865)
Total primary government 12,858,213$ 14,936,321$ 16,400,124$ 17,635,681$ 16,955,739$
Change in net position
Governmental activities 1,234,038$ 2,449,434$ 3,760,756$ 4,515,834$ 3,722,960$
Business-type activities 26,579 63,396 187,441 (68,353) 348,691
Total primary government 1,260,617$ 2,512,830$ 3,948,197$ 4,447,481$ 4,071,651$
Basic Financial Statements and Management's Discussion and Analysis for State and Local Governments.
81
2009 2010 2011 2012 2013
2,239,511$ 2,679,192$ 2,403,681$ 2,520,815$ 2,489,488$
7,095,043 7,304,233 7,232,748 7,892,561 8,282,062
4,083,441 4,594,738 4,733,913 4,652,620 4,482,973
826,149 806,536 811,177 884,773 966,245
3,174,623 2,830,292 2,749,065 2,873,496 2,974,290
- - - - -
26,702 4,384 - - -
17,445,469 18,219,375 17,930,584 18,824,265 19,195,058
3,308,535 3,398,206 3,691,528 3,536,139 3,629,120
3,308,535 3,398,206 3,691,528 3,536,139 3,629,120
20,754,004$ 21,617,581$ 21,622,112$ 22,360,404$ 22,824,178$
122,569$ 126,968$ 130,886$ 135,372$ 107,976$
378,591 465,263 420,653 440,568 522,121
394,082 411,722 400,662 386,974 403,447
699,130 734,718 861,394 816,673 993,059
912,862 1,063,748 1,043,459 1,018,883 1,087,182
- - - - -
105,080 96,670 126,568 149,573 91,901
2,017,158 75,845 5,169 5,686 233,949
4,629,472 2,974,934 2,988,791 2,953,729 3,439,635
3,404,859 3,227,580 3,571,199 3,582,760 3,577,446
- - - - -
- - - - -
3,404,859 3,227,580 3,571,199 3,582,760 3,577,446
8,034,331$ 6,202,514$ 6,559,990$ 6,536,489$ 7,017,081$
(12,815,997)$ (15,244,441)$ (14,941,793)$ (15,870,536)$ (15,755,423)$
96,324 (170,626) (120,329) 46,621 (51,674)
(12,719,673)$ (15,415,067)$ (15,062,122)$ (15,823,915)$ (15,807,097)$
11,917,359$ 11,053,128$ 10,441,869$ 10,011,748$ 9,981,391$
267,557 266,077 259,794 263,369 261,852
2,239,002 2,261,375 2,198,148 2,164,920 2,197,760
1,256,831 1,204,328 1,191,155 1,178,598 1,160,780
1,116,107 1,114,945 1,140,744 1,138,097 1,187,221
-
(1,346) 280,217 97,743 90,968 37,029
263,459 213,425 30,622 75,413 38,219
6,796
17,065,765 16,393,495 15,360,075 14,923,113 14,864,252
7,376 14,686 8,493 7,451 8,555
- 55,300 69,905
7,376 69,986 8,493 7,451 78,460
17,073,141$ 16,463,481$ 15,368,568$ 14,930,564$ 14,942,712$
4,249,768$ 1,149,054$ 418,282$ (947,423)$ (891,171)$
103,700 (100,640) (111,836) 54,072 26,786
4,353,468$ 1,048,414$ 306,446$ (893,351)$ (864,385)$
82
2004 2005 2006 2007
General Fund
Reserved 218,882$ 197,163$ 308,836$ 945,891$
Unreserved 2,883,855 5,771,684 7,022,606 8,179,659
Total general fund 3,102,737$ 5,968,847$ 7,331,442$ 9,125,550$
All other Governmental Funds
Reserved 470,155$ 19,828$ -$ -$
Unreserved, reported in:
Special revenue funds - - 400,000 224,937
Capital projects funds - - 397,233 673,232
Total all other governmental funds 470,155$ 19,828$ 797,233$ 898,169$
2008 2009
General Fund
Reserved 775,339$ 563,115$
Unreserved 8,265,513 10,058,216
Total general fund 9,040,852$ 10,621,331$
All other Governmental Funds
Reserved 239,979$ -$
Unreserved, reported in:
Special revenue funds 594,399 (152,861)
Capital projects funds 713,373 825,778
Total all other governmental funds 1,547,751$ 672,917$
2010 2011 2012 2013
General Fund
Nonspendable 167,108$ 276,924$ 166,839$ 293,674$
Restricted 338,457 548,489 658,194 317,190
Committed 442,833
Assigned 104,245 186,594 127,574 200,016
Unassigned 10,443,099 10,688,660 11,244,977 11,451,668
Total general fund 11,052,909$ 11,700,667$ 12,197,584$ 12,705,381$
All other Governmental Funds
Restricted $ $ $ $
Assigned
Special revenue funds 47,379 47,107 47,652 47,652
Capital projects funds 844,742 1,491,574 2,129,831 1,799,617
Total all other governmental funds 892,121$ 1,538,681$ 2,177,483$ 1,847,269$
Basic Financial Statements and Management's Discussion and Analysis for State and Local Governments.
The Village implemented GASB 54, Fund Balance Reporting and Government Fund Definitions, in 2011 and restated the 2010 amounts.
VILLAGE OF NORTH PALM BEACH
FUND BALANCES, GOVERNMENTAL FUNDS
LAST TEN FISCAL YEARS
(MODIFIED ACCRUAL BASIS OF ACCOUNTING) Unaudited
83
VILLAGE OF NORTH PALM BEACH
CHANGES IN FUND BALANCES, GOVERNMENTAL FUNDS
LAST TEN FISCAL YEARS
(MODIFIED ACCRUAL BASIS OF ACCOUNTING) Unaudited
Fiscal Year
2004 2005 2006 2007 2008
Revenues:
Taxes 11,439,823$ 13,236,952$ 14,340,682$ 15,577,511$ 15,424,638$
Licenses and Permits 712,184 1,131,903 1,128,658 880,266 1,047,144
Intergovernmental 1,350,104 2,804,985 2,914,057 2,750,021 2,459,211
Charges for services 719,589 647,915 1,003,660 1,082,569 1,268,774
Fines and forfeitures 122,407 234,513 165,496 132,158 235,965
Investment earnings 53,600 196,699 477,421 650,022 194,652
Miscellaneous 175,431 83,205 130,515 194,716 137,447
Total revenues 14,573,138 18,336,172 20,160,489 21,267,263 20,767,831
Expenditures:
General government 1,532,561 2,061,545 1,648,131 2,304,654 2,246,461
Public safety 5,019,361 5,713,904 6,494,578 6,609,801 7,056,833
Public works 3,280,274 5,019,739 4,708,196 3,558,264 3,725,450
Community development and planning 651,331 735,155 840,366
Leisure services - recreation 1,256,066 1,376,950 1,682,030 2,430,403 2,876,840
Other government 1,186,730 817,293 2,049
Capital outlay 581,938 - 1,917,377 2,737,805 2,597,065
Debt service
Principal payments 955,184 903,225 879,527 789,048 716,206
Interest paid on debt 40,580 151,233 199,373 207,088 143,726
Total expenditures 13,852,694 16,043,889 18,182,592 19,372,218 20,202,947
Excess of revenues over (under) expenditures 720,444 2,292,283 1,977,897 1,895,045 564,884
Other financing sources (uses)
Transfers in 1,471,529 593,884 1,254,952
Transfers out (1,471,529) (593,884) (1,254,952)
Capital lease
Proceeds from debt issuance 230,000 123,500
Miscellaneous
Total other financing sources (uses)230,000 123,500 - - -
Net change in fund balances 950,444$ 2,415,783$ 1,977,897$ 1,895,045$ 564,884$
Debt service as a percentage of noncapital
expenditures 8.11%7.03%7.29%6.41%4.91%
84
2009 2010 2011 2012 2013
15,680,749$ 14,784,906$ 14,090,966$ 13,618,635$ 13,601,783$
880,016 910,997 959,098 810,390 803,337
3,315,908 1,768,388 1,557,377 1,591,678 1,817,603
1,684,718 1,944,245 1,934,424 1,966,179 2,141,437
145,340 142,048 164,366 140,610 131,524
(1,345) 280,218 97,743 90,968 37,029
300,455 278,062 59,462 130,293 207,076
22,005,841 20,108,864 18,863,436 18,348,753 18,739,789
1,970,257 2,496,342 2,402,241 2,328,568 2,346,281
6,835,730 7,021,231 7,053,282 7,583,018 7,947,221
3,432,556 3,887,034 4,044,642 3,886,698 3,733,977
784,486 774,121 790,937 844,748 933,117
2,898,252 2,361,388 2,295,959 2,374,748 2,491,559
3,939,455 663,582 682,057 495,254 1,110,051
1,395,735 2,250,000
43,725 4,384
21,300,196 19,458,082 17,269,118 17,513,034 18,562,206
705,645 650,782 1,594,318 835,719 177,583
454,111 163,490 1,334,934 500,000 265,000
(454,111) (163,490) (1,334,934) (500,000) (265,000)
- - - - -
705,645$ 650,782$ 1,594,318$ 835,719$ 177,583$
8.07%11.99%
85
Unaudited
Fiscal Year
Ended
Sept 30,
Tax Roll
Year
Residential
Property
Commercial
Property
Personal
Property
Total Net Market -
Assessed Value
Total Direct
Tax Rate
200420031,092,433,722147,927,93344,914,1241,285,275,7796.8000
200520041,180,028,585208,240,33849,767,2861,438,036,2097.2700
200620051,441,249,707179,827,66544,422,8171,665,500,1896.8000
200720061,700,678,282235,776,76845,084,3351,981,539,3856.3000
200820071,744,202,888229,300,59243,735,8612,017,239,3416.1000
200920081,575,367,916230,599,95141,471,2821,847,439,1496.6977
201020091,394,954,867221,443,12140,552,2761,656,950,2646.9000
201120101,295,097,223210,844,22038,261,6071,544,203,0506.9723
201220111,265,549,795189,284,60133,303,5121,488,137,9086.9723
201320121,254,302,880195,770,81630,033,1511,480,106,8476.9723
Note: Assessed values are established by the Palm Beach Property Appraiser's office as of January 1, each year.
Assessments were increased to 100% of market value as of 1980.
Property in the Village is reassessed each year. Property is assessed at actual value, therefore the assessed
values are equal to actual value. Tax rates are per $1,000 of assessed value.
Source:Palm Beach County Property Appraiser
Real Property
VILLAGE OF NORTH PALM BEACH
NET ASSESSED VALUE AND ESTIMATED ACTUAL VALUE OF TAXABLE PROPERTY
LAST TEN FISCAL YEARS
86
Unaudited
Palm Beach Total
CountyPalm Direct and
Fiscal Tax RollVillage ofSchoolBeachSpecial Overlapping
Year Year N. Palm Beach District County Districts Rates
200420036.80008.57004.79002.556022.7160
200520047.27008.43004.76802.526022.9940
200620056.80008.10604.71922.504222.1294
200720066.30007.87004.48002.325020.9750
200820076.10007.35603.98132.130819.5681
200920086.69777.25003.96602.257020.1707
201020096.90007.98304.56142.493421.9378
201120106.97238.15404.99602.554922.6772
201220116.97238.18004.99252.343322.4881
201320126.97237.77804.99022.315422.0559
Note:All millage rates are based on $1 for every $1,000 of assessed value.
Source:North Palm Beach: Notice of Ad Valorem Taxes and Non-Ad Valorem Assessments
(1)Overlapping rates are those of local and county governments that apply to property owners within the Village
of North Palm Beach. Not all overlapping rates apply to all Village of North Palm Beach property owners
(i.e. The rates for special districts apply only to the proportion of the government's property owners whose
property is located within the geographic boundaries of the special district.)
VILLAGE OF NORTH PALM BEACH
PROPERTY TAX RATES - DIRECT AND OVERLAPPING GOVERNMENTS
LAST TEN FISCAL YEARS
Overlapping Rates (1)
87
Unaudited
Percentage Percentage
of Total of Total
Village Net Village Net
Taxable Taxable Taxable Taxable
Assessed Assessed Assessed Assessed
Taxpayers Value Rank Value Value Rank Value
Olen Residential Realty 19,464,791 1 1.27%17,830,332 1 1.39%
Old Port Cove Equities, Inc 17,956,563 2 1.18%
Florida Power & Light 16,063,163 3 1.05%
Sanctuary Bay Trust Corporation 15,461,523 4 1.01%13,491,211 2 1.05%
New Country Motor Cars 10,702,476 5 0.70%
Crystal Tree NPB 9,939,914 30.77%
Wolfchase Associates, LLC 8,600,000 40.67%
Crystal Tree Property Owners 7,000,000 6/7 0.46%
CFO2 Palm Beach III LP 7,000,000 6/7 0.46%
Old Port Cove Holdings, Inc 6,663,383 8 0.44%
Bozzuto, Michael A 6,047,908 9 0.40%
Greater Fla Inv CO 5,840,000 50.45%
Village Shoppes at US 1, LLC 4,770,298 10 0.31%
Transcontinental Atrium, Inc 4,590,000 60.36%
701 US One, Inc 3,600,000 70.28%
Pavilion Office Center 3,240,000 80.25%
Old Port Cove Dev.3,162,597 90.25%
Developers of Northlake, Inc 3,143,442 100.24%
Total 111,130,105$ 7.28%73,437,496$ 5.71%
Source: Palm Beach Country Appraiser
Note: Assessed values are established by the Palm Beach Property Appraiser's offices as of January 1, each year.
VILLAGE OF NORTH PALM BEACH
PRINCIPAL PROPERTY TAXPAYERS
CURRENT YEAR AND 2004
2013 2004
88
Unaudited
Fiscal Year Total Taxes Collections in
Ending Tax Roll Levied for Percent Subsequent Percent
Sept 30,YearFiscal Year Amount of Levy Years Amount of Levy
200420038,825,061 8,441,383 95.65%10,401 8,451,784 95.77%
2005200410,463,873 10,059,478 96.14%9,476 10,068,954 96.23%
2006200511,329,648 10,690,869 94.36%172,744 10,863,613 95.89%
2007200612,624,307 11,802,457 93.49%228,352 12,030,809 95.30%
2008200712,360,135 11,546,732 93.42%333,756 11,880,488 96.12%
2009200812,401,519 11,530,384 92.98%349,642 11,880,026 95.79%
2010200911,564,281 10,683,829 92.39%284,004 10,967,833 94.84%
2011201010,793,319 10,097,289 93.55%298,514 10,395,803 96.32%
2012201110,424,715 9,992,145 95.85%15,616 10,007,761 96.00%
2013201210,358,172 9,948,550 96.05%36,366 9,984,916 96.40%
Source:Palm Beach Country Property Appraiser
of the Levy to Date
Total Collections
Collected within
VILLAGE OF NORTH PALM BEACH
PROPERTY TAX LEVIES AND COLLECTIONS
LAST TEN CALENDAR YEARS
the Fiscal Year
89
VILLAGE OF NORTH PALM BEACH
RATIOS OF OUTSTANDING DEBT BY TYPE
LAST TEN FISCAL YEARS
Unaudited
Business-type
Activities
Fiscal Year Percent of
Ended Loans CapitalLoans Capital Median Personal Per
Sept 30,Payable Leases Payable Leases Total Income (1)Capita (1)
20046,376,387 433,855 411,573 7,221,815 N/A 592.05
20055,754,677 275,840 454,131 6,484,648 N/A 513.31
20064,941,765 209,224 5,185,978 10,336,967 17.20%786.20
20074,280,842 81,100 5,026,895 9,388,837 14.67%715.61
20083,605,639 40,097 4,662,833 192,892 8,501,461 12.92%692.64
20092,250,000 4,383,033 97,049 6,730,082 10.14%583.15
2010 4,090,284 235,176 4,325,460 6.74%371.64
2011 3,844,928 173,084 4,018,012 *6.26%**345.22
2012 3,608,294 106,933 3,715,227 5.98%303.51
2013 3,357,875 396,055 3,753,930 6.28%305.37
Note:Details regarding the Village's outstanding debt may be found in the notes to the
financial statements.
*2010 Median Household Income was used for calculation - 2011 Income was not available due to agency software upgrades
**2010 Population was used for calculation - 2011's Population was not available due to agency software upgrades
(1)See the Schedule of Demographic and Economic Statistics on page 93 for personal income and population data.
N/AData not available.
Governmental Activities
90
Percentage Amount
Net Applicable to Applicable to
Debt the Village of the Village of
Outstanding North Palm Beach (1) North Palm Beach
Debt repaid with property taxes:
Palm Beach County 187,210,000$ 1.19%2,227,799$
Palm Beach County School Board 1.12%
Other debt:
Palm Beach County 761,946,000 1.19%9,067,157
Palm Beach County School Board 26,370,000 1.12%295,344
Subtotal, overlapping debt 11,590,300
Village of North Palm Beach Direct Debt 100%-
Total direct and overlapping debt 11,590,300$
Sources:Palm Beach County Tax Appraiser's Office
Palm Beach County School Board
Palm Beach County Clerk & Comptroller
Note: Overlapping governments are those that coincide, at least in part, with the geographic boundaries
of the Village. This schedule estimates the portion of the outstanding debt of those overlapping
governments that is borne by the residents and businesses of the Village of North Palm Beach. This
process recognizes that, when considering the Village's ability to issue and repay long-term debt, the
entire debt burden borne by the residents and businesses should be taken into account. However,
this does not imply that every taxpayer is a resident, and therefore responsible for repaying the debt,
of each overlapping government.
(1)For debt repaid with property taxes, the percentage of overlapping debt applicable is estimated using
taxable assessed property values. Value that is within the Village's boundaries and dividing it by the
County's and School Board's total taxable assessed value. This approach was also used for the other
debt.
Government Unit
VILLAGE OF NORTH PALM BEACH
DIRECT AND OVERLAPPING GOVERNMENTAL ACTIVITIES DEBT
SEPTEMBER 30, 2013
Unaudited
91
VILLAGE OF NORTH PALM BEACH
Pledged - Revenue Coverage
Country Club Bonds
Last Ten Fiscal Years
Unaudited
Required
Fiscal GrossOperating Debt
Year Revenues (1) Expenses (2)Net RevenueService Coverage (3)
(4)
20062,348,813$ 1,910,640$ 438,173$ 106,936$ 4.10(4)
20073,507,441 2,991,621 515,820 392,505 1.31
20083,652,940 2,558,591 1,094,349 394,900 2.77
20093,412,235 2,587,171 825,064 394,900 2.09
20103,242,266 2,728,470 513,796 394,900 1.30
20113,579,692 3,049,301 530,391 394,900 1.34
20123,590,211 2,932,743 657,468 394,900 1.66
20123,586,001 2,986,080 599,921 394,900 1.52
(1)Gross revenue includes interest revenue.
(2)Operating expenses excludes depreciation.
(3)Coverage should be not less than 1.00.
(4)2006 was the first year the debt was outstanding, and was not a complete year.
92
Per Palm Beach
Median Capita County
Calendar Personal PersonalUnemployment
Year Population (1)Income (1)Income (1)Rate (2)
2004 12,198 - - 5.0
2005 12,633 - - 4.0
2006 (estimate)13,148 60,101 46,726 3.3
2007 (estimate)13,120 63,984 42,224 4.1
2008 (estimate)12,274 65,815 45,563 6.3
2009 (estimate)11,541 66,401 49,350 10.8
2010 (estimate)11,639 64,156 49,130 12.0
2011 (estimate)***10.7
2012 (estimate)12,241 62,121 49,117 **5.29
2013 (estimate)12,293 59,778 42,830 **4.66
Sources:Business Development Board
US Census Bureau
*2011 Demographic data is not available due to Agency Software upgrade
that is not complete
**Village of North Palm Beach Unemployment Rate for 2012 and 2013 presented
Note: (1)All information available at the current time is presented.
(2)North Palm Beach is not large enough to track unemployment rates.
Palm Beach County rates are presented.
VILLAGE OF NORTH PALM BEACH
DEMOGRAPHIC AND ECONOMIC STATISTICS
LAST TEN CALENDAR YEARS
Unaudited
93
Percentage Percentage
of Total of Total
Employer Employees Employment Employees Employment
Palm Beach Country School Board 20,810 3.36%18,677 3.19%
Tenet Health Care Corp (2)6,100 0.98%3,040 0.52%
Palm Beach County Government 5,383 0.87%9,000 1.54%
State Government 8,216 1.40%
Federal Government 5,819 0.99%
NextEra Energy (Florida Power & Light) 3,804 0.61%2,800 0.48%
G4S (Wachenhut Corp)3,000 0.48%
Florida Alantic University 2,980 0.48%1,400 0.24%
Hospital Corporation of America (HCA) (1)2,714 0.44%4,000 0.68%
Veterans Health Administration 2,700 0.44%
Boca Raton Resort & Club 1,292 0.21%2,380 0.41%
Bethesda Memorial Hospital 2,643 0.43%1,800 0.31%
Boca Raton Regional Hospital 2,250 0.36%1,700 0.29%
The Breakers Hotel 1,800 0.29%1,800 0.31%
Total 55,476 8.95%60,632 10.36%
Source:Business Development Board of Palm Beach County
*Employer: Palm Beach County
Information is not available for the Village of North Palm Beach.
**Percentage of total employment is calculated using Palm Beach County's
available labor force in each of the respective years presented.
***FY 2013 data was not available - FY 2003 & 2012 data presented
Notes:
(1)Formerly Columbia Palm Beach Health Care Systems, Inc
(2)Intracoastal Health Systems, Inc - now part of Tenet Healthcare Corp
Unaudited
VILLAGE OF NORTH PALM BEACH
PRINCIPAL EMPLOYERS***
2012**2003
94
2004 2005 2006 2007 2008 2009 2010 2011 2012 2013
Number of Employees:
General Government
Village Manager - Full-Time 1111111111
Assistant Village Manager - Full-Time1100000000
Systems Specialist
Full-Time 1122222233
Part-Time 0000011100
Executive Secretary - Full-Time 1111111111
Human Resources 22222222
Village Clerk - Full-Time 3333333333
Finance
Full-time 5555555555
Part-Time 0000111111
Public Works
Full-time 61625447483837373737
Part-Time 8630000000
Public Safety
Full-time 666166686867676700
Part-Time 141514131211121200
Law Enforcement
Full-time 000000004343
Part-Time 000000001213
Fire Rescue
Full-time 000000002424
Part-Time 0000000000
Community Development and Planning
Full-time 00091099988
Part-Time 0001122222
Leisure Services
Library
Full-time 9877766666
Part-Time 778881010101010
Recreation
Full-time 6515151797666
Part-Time 14153139424242434343
Other Government - Country Club
Full-time 252418191855756
Part-Time 27272425222121645654
Total Number of Employees Budgeted FY Ending 249 242 254 265 268 236 234 279 268 268
* Variance exists due to the employment of seasonal and part-time employees.
Source:Village of North Palm Beach Budget Report
VILLAGE OF NORTH PALM BEACH
Unaudited
LAST TEN FISCAL YEARS (*)
Full-Time Equivalent Village Government Employees by Function
95
2004 2005 2006 2007 2008 2009 2010 2011 2012 2013
FUNCTION/PROGRAM
GENERAL GOVERNMENT
Number of Parcels - - - 7,411 7,422 7,472 7,466 7,466 7,473 7,470
PUBLIC WORKS
Street Maintenance (No. of lane miles maintained)31.15531.15531.15531 31 31 31 31 31 31
Sanitation (Tons of Refuse Collected)18,84214,03713,20312,085 11,974 10,667 10,1659,96210,06510,720
No. of collection units for solid waste (residential) 7,4707,5197,5587,152 7,163 7,214 7,070 7,071 7,076 7,471
Number of vehicles maintained 959595104 104 110 110 98 98 111
Number of repair overlays completed (miles)5.5872.4622.9352 3 2.5 2.71 - - -
PUBLIC SAFETY
Number of arrests by police officers 315331410545 549 448 402 260 211 216
Number of traffic citations issued 3,1105,7434,2724,269 5,520 6,305 4,951 2,564 2,566 1,254
EMS average response times (minutes)4.423.984.694.735.175.015.125.195.265.11
Number of EMS calls 1,0669651,0561,034 1,114 1,214 1,146 1,179 1,326 1,296
COMMUNITY DEVELOPMENT & PLANNING
Building Department - Number of Permits 201201(1)1,875 1,619 1,548 1,744 1,616 1,835 2,480
Number of code enforcement violations - - 1,7671,617 729 613 391 575 817 790
Number of code violations brought to board/magistrate
(Calendar Yr End)145165144126 115 73 38 72 100 62
RECREATION
Number of community events presented 15222124 23 28 28 38 49 37
Number of registrants in athletic programs 1,5751,4001,5201,600 1,400 1,125 1,005 1,260 1,311 2,074
LIBRARY
Library - Number of Volumes 47,531 54,074 47,371 42,372 33,122 35,681 39,277 40,658 43,340 44,966
OTHER GOVERNMENT
Country Club
Number of Golf Members - - 365579 389297354298283262
Number of Tennis Members - - 136171 171180184173162190
(1)An accurate number of building permits issued for 2006 is not available - computer systems crash.
Source: Village of North Palm Beach
U.S. Census Bureau
VILLAGE OF NORTH PALM BEACH
OPERATING INDICATORS BY FUNCTION/PROGRAM
LAST TEN FISCAL YEARS
Unaudited
96
2004 2005 2006 2007 2008 2009 2010 2011 2012 2013
Function/Program:
General Government
No. of General Government Buildings11111111112323232323
Public Works
Square Miles 5.185.185.185.185.185.185.185.185.185.80
Miles of Streets 36.0036.0036.0036.0036.0036.0036.0036.0036.0031.10
Number of Street Lights 425425425425513513513513513 *752
Public Safety
Fire:
Number of Stations 1111111111
Number of Fireman & Officers 8800000000
Number of Firemen/Paramedics/EMTs00 2323232323232222
Police/EMS Protection:0000000011
Number of Stations
Number of Policemen & Officers 1111111111
EMS Protection 35353332323131312828
0000000022
Leisure Services 131300000000
Recreation
Number of Parks 4444444444
Public Tennis Courts 4422222222
Swimming Pool 1111111111
Number of Marinas 1111111111
Library
Number of Libraries 1111111111
Number of Volumes 47,531 54,074 47,371 42,372 33,122 35,681 39,277 40,658 43,340 44,966
Other Government
Country Club 1111111111
Golf Course 1111111111
Driving Range 10101010101010101010
Tennis Courts 0000001111
Restaurant/Snack Bar 0000001111
Source: Village of North Palm Beach
VILLAGE OF NORTH PALM BEACH
LAST TEN FISCAL YEARS
Unaudited
CAPITAL ASSET STATISTICS BY FUNCTION/PROGRAM
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OTHER REPORTS
REPORT ON INTERNAL CONTROL OVER
FINANCIAL REPORTING AND ON COMPLIANCE
AND OTHER MATTERS BASED ON AN
AUDIT OF FINANCIAL STATEMENTS
PERFORMED IN ACCORDANCE WITH
GOVERNMENT AUDITING STANDARDS
The Honorable Mayor and Members of the Village Council
North Palm Beach, Florida
We have audited, in accordance with the auditing standards generally accepted in the United
States of America and the standards applicable to financial audits contained in Government
Auditing Standards, issued by the Comptroller General of the United States, the financial
statements of the governmental activities, the business-type activities, each major fund, and the
aggregate remaining fund information of the Village of North Palm Beach, Florida, as of and for
the year ended September 30, 2013, and the related notes to the financial statements, which
collectively comprise the Village of North Palm Beach, Florida’s basic financial statements and
have issued our report thereon dated March 19, 2014.
Internal Control Over Financial Reporting
In planning and performing our audit of the financial statements, we considered the Village of
North Palm Beach, Florida’s internal control over financial reporting (internal control) to
determine the audit procedures that are appropriate in the circumstances for the purpose of
expressing our opinions on the financial statements, but not for the purpose of expressing an
opinion on the effectiveness of the Village of North Palm Beach, Florida’s internal control.
Accordingly, we do not express an opinion on the effectiveness of the Village of North Palm
Beach, Florida’s internal control.
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, or detect and correct misstatements on a timely basis. A material weakness is a
deficiency, or a combination of deficiencies, in internal control, such that there is a reasonable
possibility that a material misstatement of the entity’s financial statements will not be prevented,
or detected and corrected on a timely basis. A significant deficiency is a deficiency, or a
combination of deficiencies, in internal control that is less severe than a material weakness, yet
important enough to merit attention by those charged with governance.
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99
Our consideration of internal control was for the limited purpose described in the first paragraph
of this section and was not designed to identify all deficiencies in internal control that might be
material weaknesses or significant deficiencies. Given these limitations, during our audit we did
not identify any deficiencies in internal control that we consider to be material weaknesses.
However, material weaknesses may exist that have not been identified.
Compliance and Other Matters
As part of obtaining reasonable assurance about whether the Village of North Palm Beach,
Florida’s financial statements are free from material misstatement, we performed tests of its
compliance with certain provisions of laws, regulations, contracts, and grant agreements,
noncompliance with which could have a direct and material effect on the determination of
financial statement amounts. However, providing an opinion on compliance with those
provisions was not an objective of our audit, and accordingly, we do not express such an opinion.
The results of our tests disclosed no instances of noncompliance or other matters that are
required to be reported under Government Auditing Standards.
Purpose of this Report
The purpose of this report is solely to describe the scope of our testing of internal control and
compliance and the results of that testing, and not to provide an opinion on the effectiveness of
the entity’s internal control or on compliance. This report is an integral part of an audit
performed in accordance with Government Auditing Standards in considering the entity’s
internal control and compliance. Accordingly, this communication is not suitable for any other
purpose.
West Palm Beach, Florida
March 19, 2014
MANAGEMENT LETTER IN ACCORDANCE WITH
THE RULES OF THE AUDITOR GENERAL
OF THE STATE OF FLORIDA
The Honorable Mayor and Members of the Village Council
Village of North Palm Beach, Florida
We have audited the financial statements of the Village of North Palm Beach, Florida, as of and for
the fiscal year ended September 30, 2013, and have issued our report thereon dated March 19,
2014.
We conducted our audit in accordance with U.S. generally accepted auditing standards, the
standards applicable to financial audits contained in Government Auditing Standards issued by the
Comptroller General of the United States, and Chapter 10.550, Rules of the Florida Auditor
General. We have issued our Independent Auditor’s Report on Internal Control over Financial
Reporting and on Compliance and Other Matters Based on an Audit of Financial Statements
Performed in Accordance with Government Auditing Standards. Disclosures in that report, which
is dated March 19, 2014, should be considered in conjunction with this management letter.
Additionally, our audit was conducted in accordance with Chapter 10.550, Rules of the Auditor
General, which governs the conduct of local governmental entity audits performed in the State of
Florida. This letter includes the following information, which is not included in the aforementioned
auditor’s reports.
PRIOR YEAR COMMENTS
The Rules of the Auditor General require that we address in the management letter whether
or not recommendations made in the preceding annual financial audit report have been
followed. All prior year recommendations have been implemented.
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101
CURRENT YEAR COMMENTS
The Rules of the Auditor General require that we address in the management letter any
recommendations to improve financial management. In connection with our audit for the
fiscal year ended September 30, 2013, we did not have any such recommendations.
Investment of Public Funds
Rules of the Auditor General require our audit to include a review of the Village’s
compliance with Section 218.415, Florida Statutes, regarding the investment of public
funds. In connection with our audit for the fiscal year ended September 30, 2013, the
results of our procedures did not disclose any instances of noncompliance with Section
218.415, Florida Statutes.
Violations of Contracts and Grant Provisions or Abuse
Rules of the Auditor General require that we address violations of provisions of contracts
or grant agreements, or abuse that have occurred, or are likely to have occurred, that have
an effect on the financial statements that is less than material but which warrant the
attention of those charged with governance. In connection with our audit for the fiscal year
ended September 30, 2013, we did not have any such findings.
Oversight Unit and Component Units
The Village of North Palm Beach, Florida, is a municipal corporation incorporated in 1956
pursuant to Chapter 31481, Laws of Florida, Extraordinary Session 1956. Based upon the
application of criteria defined in publications cited in Chapter 10.553, Rules of the Auditor
General, the Village has determined that there are no component units related to the Village.
Consideration of Financial Emergency Criteria
Rules of the Auditor General require a statement be included as to whether or not the local
government entity has met one or more of the conditions described in Section 218.503(1),
Florida Statutes, and identification of the specific condition(s) met. In connection with our
audit, the results of our procedures did not disclose that the Village of North Palm Beach,
Florida has met any of the conditions described in Section 218.503(1) during the fiscal year
ended September 30, 2013.
Annual Financial Report
Rules of the Auditor General require that we determine whether the annual financial report
for the Village of North Palm Beach, Florida for the fiscal year ended September 30, 2013,
filed with the Florida Department of Financial Services pursuant to Section 218.32(1)(a),
Florida Statutes, is in agreement with the annual financial audit report for the fiscal year
ended September 30, 2013. In connection with our audit, we noted that the two reports
were in substantial agreement.
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Financial Condition Assessment Procedures
Pursuant to Rules of the Auditor General, we applied financial condition assessment
procedures. It is management’s responsibility to monitor the Village’s financial condition,
and our financial condition assessment was based in part on representations made by
management and the review of financial information provide by management. The results
of our procedures did not disclose any matters that are required to be reported. Our
assessment was made as of the fiscal year end.
Our management letter is intended solely for the information and use of the Legislative Auditing
Committee, members of the Florida Senate and the Florida House of Representatives, the Florida
Auditor General, management, the audit committee, Village Council, and federal and state
awarding agencies and pass-through entities, and is not intended to be and should not be used by
anyone other than these specified parties.
March 19, 2014
West Palm Beach, Florida