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04-09-2020 VC REG-A with attachments VILLAGE OF NORTH PALM BEACH REGULAR SESSION AGENDA VILLAGE HALL COUNCIL CHAMBERS THURSDAY, APRIL 09, 2020 501 U.S. HIGHWAY 1 7:30 PM Darryl C. Aubrey Mark Mullinix David B. Norris Susan Bickel Deborah Searcy Mayor Vice Mayor President Pro Tem Councilmember Councilmember Andrew D. Lukasik Leonard G. Rubin Jessica Green Village Manager Village Attorney Village Clerk In accordance with Executive Order No. 20-91 issued by Governor Ron DeSantis on April 1, 2020, all senior citizens and individuals with a significant underlying medical condition are ordered to stay at home and limit the risk of exposure to COVID-19. The Order further indicates that all persons in Florida shall limit their personal interactions outside of their homes to only those necessary to obtain or provide essential services or conduct essential activities. Similarly, the Centers for Disease Control and Prevention guidance advises that all individuals adopt far-reaching social distancing measures, including avoiding gatherings of more than 10 people. Therefore, in accordance with Executive Order No. 20 -69 issued by the Governor on March 20, 2020, the Village of North Palm Beach shall utilize communications media technology to facilitate public participation in this meeting electronically, via internet access or telephone. INSTRUCTIONS TO JOIN MEETING ELECTRONICALLY To join meeting by computer (video & audio) click or type the following link in address bar: https://zoom.us/j/638784037?pwd=S3haeUtqV1VUSm5TMWlVN09RVDBLUT09 Meeting ID: 638 784 037 Password: 421595 To join meeting by phone (voice only): 888 475 4499 US Toll-free 877 853 5257 US Toll-free Meeting ID: 638 784 037 Public Comments: Public comments can be submitted by filling out the public comment form that can be accessed by clicking the following link Public Comment Card. Public comments can also be made by leaving a voice message at 561-904-2126. All public comments will be read into the record at the Public Comment portion of the meeting. Regular Session Agenda, April 09, 2020 Page 2 of 201 For full detailed instructions on how to the join the meeting by either telephone or by computer please see the Village of North Palm Beach Village Council webpage or click on the following links: Instructions for attending Village Council Meeting by phone Instructions for attending Village Council Meeting by computer AGENDA ROLL CALL INVOCATION – VICE MAYOR PLEDGE OF ALLEGIANCE – PRESIDENT PRO TEM AWARDS AND RECOGNITION APPROVAL OF MINUTES 1. Minutes of the Regular Session held 3/12/20 2. Minutes of the Emergency Special Session held 3/17/20 COUNCIL BUSINESS MATTERS 3. RESOLUTION ACCEPTING ELECTION RESULTS 4. ADMINISTRATION OF COUNCILMEMBER OATHS 5. NOMINATION OF OFFICERS - MAYOR, VICE MAYOR, PRESIDENT PRO TEM 6. RESOLUTION APPOINTING COUNCIL OFFICERS 7. ADMINISTRATION OF OFFICER OATHS - MAYOR, VICE MAYOR, PRESIDENT PRO TEM STATEMENTS FROM THE PUBLIC, PETITIONS AND COMMUNICATIONS Members of the public may address the Council concerning items on the Consent Agenda or any non agenda item under Statements from the Public. Time Limit: 3 minutes Members of the public who wish to speak on any item listed on the Regular Session or Workshop Session Agenda will be called on when the issue comes up for discussion. Time Limit: 3 minutes Anyone wishing to speak should complete a Public Comment Card (on the table at back of Council Chambers) and submit it to the Village Clerk prior to the beginning of the meeting. DECLARATION OF EX PARTE COMMUNICATIONS Regular Session Agenda, April 09, 2020 Page 3 of 201 PUBLIC HEARINGS AND QUASI-JUDICIAL MATTERS 8. 1ST READING OF ORDINANCE 2020-01 - GENERAL FUND BUDGET AMENDMENT Amending the Adopted General Fund Budget for Fiscal Year 2020 to classify the total amount financed for Village vehicles as Capital Outlay. CONSENT AGENDA The Consent Agenda is for the purpose of expediting issues of a routine or pro -forma nature. Councilmembers may remove any item from the Consent Agenda, which would automatically convey that item to the Regular Agenda for separate discussion and vote. 9. RESOLUTION – Amending Resolution No. 2020-14 to modify the payment schedule for the Lease Agreement with REV Financial Services for the AEV Type I Rescue Vehicle (Ambulance) and authorizing execution of the amended exhibit to the Lease Agreement. 10. RESOLUTION – Removal of the Village Manager’s Pay Grade from the Compensation Plan. 11. RESOLUTION – Approving A Third Amendment to an Agreement with M.T. Causley, LLC for Building Official, plan review and inspection services through the end of the current Fiscal Year; and authorizing execution of the Amendment. 12. Receive for file Minutes of the Golf Advisory Board meeting held 2/10/20. OTHER VILLAGE BUSINESS MATTERS 13. RESOLUTION – Approval of a Payment to Peacock and Lewis in the amount of $81,650 for Additional Construction Administration Services associated with the Country Club Clubhouse Project. 14. RESOLUTION – FISCAL YEAR 2019 AUDIT REPORT Accepting the Comprehensive Annual Financial Report prepared by the Village Auditor for the Fiscal Year ending September 30, 2019; and authorizing its filing with the state. COUNCIL AND ADMINISTRATION MATTERS MAYOR AND COUNCIL MATTERS/REPORTS VILLAGE MANAGER MATTERS/REPORTS REPORTS (SPECIAL COMMITTEES AND ADVISORY BOARDS) ADJOURNMENT If a person decides to appeal any decision by the Village Council with respect to any matter considered at th e Village Council meeting, he will need a record of the proceedings, and for such purpose he may need to ensure that a verbatim record of the proceeding s is made, which record includes the testimony and evidence upon which the appeal is to be based (F.S. 286.0105). In accordance with the Americans with Disabilities Act, any person who may require special accommodation to participate in th is meeting should contact the Village Clerk’s office at 841-3355 at least 72 hours prior to the meeting date. This agenda represents the tentative agenda for the scheduled meeting of the Village Council. Due to the nature of governmental duties and responsibilities, the Village Council reserves the right to make additions to, or deletions from, the items contained in this agenda. DRAFT MINUTES OF THE REGULAR SESSION VILLAGE COUNCIL OF NORTH PALM BEACH, FLORIDA MARCH 12, 2020 Present: Darryl C. Aubrey, Sc.D., Mayor Mark Mullinix, Vice Mayor David B. Norris, President Pro Tem Susan Bickel, Councilmember Deborah Searcy, Councilmember Andrew D. Lukasik, Village Manager Len Rubin, Village Attorney Jessica Green, Village Clerk ROLL CALL Mayor Aubrey called the meeting to order at 7:30 p.m. All members of Council were present. All members of staff were present. INVOCATION AND PLEDGE OF ALLEGIANCE Mayor Aubrey gave the invocation and Vice Mayor Mullinix led the public in the Pledge. AWARDS AND RECOGNITION On behalf of Village Council, Mayor Aubrey presented a commendation to Coach Sam Budnyk. Coach Budnyk thanked Council and expressed his appreciation to the Village of North Palm Beach. APPROVAL OF MINUTES The Minutes of the Regular Session held February 27, 2020 were approved as written. STATEMENTS FROM THE PUBLIC, PETITIONS AND COMMUNICATIONS Judy Pierman, 560 Greenway Drive thanked Council for giving her a proclamation and gift on February 13th and encouraged everyone to attend the memorial service taking place on March 13th for former Village Clerk Delores Walker. These residents expressed their appreciation to Council for hearing their concerns regarding the Village’s recreation vehicle ordinance: Howard Gorman, 708 Lighthouse Drive Catherine Garcia, 753 Anchorage Drive Evans Volmy, 2649 Honey Road John Frerking, 130 Cruiser Road South CONSENT AGENDA President Pro Tem Norris moved to approve the Consent Agenda. Councilmember Searcy seconded the motion which passed unanimously. The following items were approved: Resolution amending Resolution 2019-128 to provide for an alternate vendor for the installation of pool equipment at the Country Club and modify the cost. Draft Minutes of Village Council Meeting held March 12, 2020 Page 2 of 3 CONSENT AGENDA continued Receive for file Minutes of the Environmental Committee meeting held 1/27/20. Receive for file Minutes of the Planning Commission meeting held 2/4/20. RESOLUTION 2020-23 – COUNTRY CLUB POOL CHILLER, FENCING AND CEMENT PAD CONTRACT A motion was made by Councilmember Searcy and seconded by Councilmember Bickel to adopt Resolution 2020-23 entitled: A RESOLUTION OF THE VILLAGE COUNCIL OF THE VILLAGE OF NORTH PALM BEACH, FLORIDA APPROVING A CONTRACT AWARD TO SPADO CONSTRUCT ION, LLC D/B/A SPADO POOL CONSTRUCTION FOR THE PURCHASE AND INSTALLATION OF A SWIMMING POOL CHILLER, FENCING AND CEMENT PAD AND AUTHORIZING THE MAYOR AND VILLAGE CLERK TO EXECUTE THE CONTRACT; APPROVING A BUDGET AMENDMENT TO TRANSFER $50,000 FROM THE CAPITAL PROJECTS FUND ACCOUNT AND $21,000 FROM THE PUBLIC SAFETY BUILDING CAPITAL ACCOUNT TO THE POOL – MACHINERY AND EQUIPMENT CAPITAL ACCOUNT TO PROVIDE FUNDING FOR THE PROJECT; AND PROVIDING FOR AN EFFECTIVE DATE. Special Projects Director Chuck Huff explained the location and scope of the project. Mr. Huff stated that two quotes were received for the project and that staff was recommending approving a contract with Spado Construction LLC. Councilmember Searcy asked what the time frame of the project would be. Mr. Huff stated that the projected time frame for completion would be May 1st. Councilmember Searcy asked where the equipment was manufactured. Mr. Huff stated that the equipment was manufactured in the United States. Thereafter, the motion to adopt Resolution 2020-23 passed unanimously. VILLAGE COUNCIL MATTERS/REPORTS Councilmember Bickel recommended making a $500 donation to the Blue H.E.L.P. Walk to Honor event in Palm Beach Gardens. A motion was made by Councilmember Bickel and seconded by President Pro Tem Norris to make a $500 donation to the Blue H.E.L.P. Walk to Honor event in Palm Beach Gardens. Thereafter, the motion passed unanimously. Councilmember Bickel expressed concern over Council not giving responses to public comments immediately after comments are given since it may give the commenter the impression that they are not being heard. Councilmember Bickel asked if there could be a portion under public comment where a response from Council can be given instead of addressing it toward the end of the meeting. Mayor Aubrey stated that Council may ask staff to address or look into any matters or comments given by the public at the end of the public comment portion of the agenda. Draft Minutes of Village Council Meeting held March 12, 2020 Page 3 of 3 VILLAGE COUNCIL MATTERS/REPORTS continued Vice Mayor Mullinix stated that there was a derelict boat at Munyon Island that needed to be addressed. Chief Richard Jenkins stated that the Florida Fish and Wildlife Commission (FWC) was unsuccessful in their attempt to retrieve the boat and that a letter from Council to the FWC may expedite the removal of the boat. Councilmember Searcy announced that the Fire Department had received their new Fire Rescue Truck and that the wash down ceremony of the truck took place earlier that day. VILLAGE MANAGER MATTERS/REPORTS Acting Recreation Director Stephen Poh gave an update on the upcoming Heritage Day Festival scheduled for April 4th. Discussion ensued between Council and staff on the possible cancellation of the Heritage Day Festival due to the COVID-19 pandemic. Mr. Lukasik gave an update on the COVID-19 pandemic and the measures staff was taking with regards to informing the public and ensuring the safety of the Village’s residents and employees. Mr. Lukasik discussed what programs, events and meetings may be cancelled due to the COVID- 19 pandemic. Discussion ensued between Council and staff regarding what events and programs could potentially be cancelled and rescheduled. ADJOURNMENT There being no further business to come before the Council, the meeting was adjourned at 8:22 p.m. DRAFT MINUTES OF THE SPECIAL EMERGENCY SESSION VILLAGE COUNCIL OF NORTH PALM BEACH, FLORIDA MARCH 17, 2020 Present: Darryl C. Aubrey, Sc.D., Mayor Mark Mullinix, Vice Mayor David B. Norris President Pro Tem Susan Bickel, Councilmember Deborah Searcy, Councilmember Andrew D. Lukasik, Village Manager Jessica Green, MMC, Village Clerk ROLL CALL Mayor Aubrey called the meeting to order at 10:30 a.m. All members of Council were present. All members of staff were present. Mr. Lukasik gave an update on the COVID-19 response and the emergency preparation measures undertaken by Village employees. Mr. Lukasik explained the proposed Resolution to establish an Employee Administrative Leave Bank. The leave bank would provide 10 days or 80 hours of sick leave for any exempt or non- exempt full time employee who may become sick or if the employee’s family member becomes sick as a result of COVID-19. Part-time employees shall receive the average number of hours he or she works over a two-week period. RESOLUTION 2020-24 – DECLARING A LOCAL STATE OF EMERGENCY A RESOLUTION OF THE VILLAGE COUNCIL OF THE VILLAGE OF NORTH PALM BEACH, FLORIDA, DECLARING A LOCAL STATE OF EMERGENCY WITHIN THE VILLAGE DUE TO THE COVID-19 PANDEMIC; PROVIDING FOR CONFLICTS; AND PROVIDING FOR AN EFFECTIVE DATE. Discussion ensued between Council and Mr. Rubin regarding the language in the Resolution regarding the length of time the declaration would remain in effect. Mr. Rubin stated that the language in the Resolution could be changed to state that the declaration would correspond and remain in effect the same length of time as Governor DeSantis’ declaration. A motion was made by Councilmember Bickel and seconded by Councilmember Searcy to adopt Resolution 2020-24 with its language changed to state that the declaration would correspond and remain in effect the same length of time as the Governor DeSantis’ declaration. Thereafter, the motion to adopt Resolution 2020-24 as amended passed unanimously. Draft Minutes of Village Council Special Emergency Session held March 17, 2020 Page 2 of 2 RESOLUTION 2020-25 – EMPLOYEE ADMINISTRATIVE LEAVE BANK A RESOLUTION OF THE VILLAGE COUNCIL OF THE VILLAGE OF NORTH PALM BEACH, FLORIDA, APPROVING THE CREATION OF A LEAVE BANK FOR ALL EMPLOYEES AS A RESULT OF A DECLARED STATE OF EMERGENCY WITHIN THE VILLAGE; PROVIDING FOR CONFLICTS; AND PROVIDING FOR AN EFFECTIVE DATE. A motion was made by Vice Mayor Mullinix and seconded by President Pro Tem Norris to adopt Resolution 2020-25. Thereafter, the motion to adopt Resolution 2020-25 passed unanimously. ADJOURNMENT With no further business to come before the Council, the meeting adjourned at 11:19 a.m. VILLAGE OF NORTH PALM BEACH OFFICE OF THE VILLAGE CLERK TO: Honorable Mayor and Council THRU: Andrew D. Lukasik, Village Manager FROM: Jessica Green, Village Clerk DATE: April 9, 2020 SUBJECT: RESOLUTION – Accepting and declaring the results of the March 17, 2020 general election Article III (“Legislative), Section 2 (“Election and terms”) of the Village Charter provides that “[o]n the second Tuesday in March of each year, a general election shall be held to elect members of the village council.” Furthermore, Article V (“Qualifications and Elections”) of the Village Charter provides as follows: Section 4. General and runoff election. “Whenever a general or special election is held to fill any elective office in the Village of North Palm Beach, the candidate receiving a majority of the votes cast at such election to fill such office shall be declared to be duly elected …” Section 5. Unopposed candidates. “In the event not more than one (1) person qualified as a candidate for a designated seat on the village council to be filled at an election, that seat shall not be listed on the regular village election ballot. Each unopposed candidate shall be deemed to have voted for himself.” The official results of the general election held March 17, 2020 are attached. The attached resolution has been prepared and/or reviewed for legal sufficiency by the Village Attorney. Recommendation: Village Staff recommends Council consideration and approval of the attached Resolution officially accepting and declaring the results of the March 17, 2020 general election. Page 1 of 2 RESOLUTION 2020-____ A RESOLUTION OF THE VILLAGE COUNCIL OF THE VILLAGE OF NORTH PALM BEACH, FLORIDA, ACCEPTING AND DECLARING THE RESULTS OF THE MARCH 17, 2020 GENERAL ELECTION; AND PROVIDING FOR AN EFFECTIVE DATE. WHEREAS, on March 17, 2020, the Village of North Palm Beach held a general election in accordance with all applicable Village and state law requirements for the purpose of electing Councilmembers to the Village Council for Groups 1, 3, and 5; and WHEREAS, because only one candidate each qualified for Group 1 and Group 5, these offices were not placed on the ballot and in accordance with the provisions of the Village Charter an d the Florida Election Code, these candidates were presumed to have voted for themselves; and WHEREAS, two candidates qualified for Group 3 during the time required for the filing of a Notice of Candidacy, and the names of these candidates were placed on the ballot and submitted to the electorate; and WHEREAS, the Village Council wishes to officially accept and declare the results of the March 17, 2020 general election. NOW, THEREFORE, BE IT RESOLVED BY THE VILLAGE COUNCIL OF THE VILLAGE OF NORTH PALM BEACH, FLORIDA, as follows: Section 1. The foregoing “whereas” clauses are hereby ratified and incorporated herein. Section 2. The Village Council accepts that the following are the results of the general election held on March 17, 2020: For Village Councilmember, Group 1: Deborah Searcy unopposed For Village Councilmember, Group 3: Darryl C. Aubrey 1,381 Kathleen Wallenhorst 988 For Village Councilmember, Group 5: Mark Mullinix unopposed Page 2 of 2 Section 3. Based on the foregoing results, the Village Council hereby declares that the following candidates are elected as Councilmembers for Groups 1, 3, and 5: For Village Councilmember, Group 1: Deborah Searcy For Village Councilmember, Group 3: Darryl C. Aubrey For Village Councilmember, Group 5: Mark Mullinix Section 4. This Resolution shall take effect immediately upon adoption. PASSED AND ADOPTED THIS ______ DAY OF _______, 2020. (Village Seal) MAYOR ATTEST: VILLAGE CLERK RESOLUTION 2020-___ A RESOLUTION OF THE VILLAGE COUNCIL OF THE VILLAGE OF NORTH PALM BEACH, FLORIDA, APPOINTING THE MAYOR, VICE MAYOR AND PRESIDENT PRO TEM FOR THE UPCOMING YEAR; AND PROVIDING FOR AN EFFECTIVE DATE. WHEREAS, Article III, Section 3 of the Village Charter provides that the Council shall elect from among its members a Mayor, a Vice Mayor, and a President Pro Tem to serve at the pleasure of the Council; and WHEREAS, the election of the Mayor, Vice Mayor and President Pro Tem shall be conducted annually at the first regular Council meeting after the Village election. NOW, THEREFORE, BE IT RESOLVED BY THE VILLAGE COUNCIL OF THE VILLAGE OF NORTH PALM BEACH, FLORIDA, as follows: Section 1. The Village Council hereby elects from among its membership the following persons to serve as Mayor, Vice Mayor, and President Pro Tem of the Village Council of the Village of North Palm Beach: _____________________ Mayor ____________________ Vice Mayor _____________________ President Pro Tem Section 2. The above-named Mayor, Vice Mayor, and President Pro Tem shall hold office until their respective successors shall be elected in accordance with the provisions of the Village Charter. Section 3. This Resolution shall take effect immediately upon adoption. PASSED AND ADOPTED THIS 26TH DAY OF MARCH, 2020. (Village Seal) MAYOR ATTEST: VILLAGE CLERK VILLAGE OF NORTH PALM BEACH FINANCE DEPARTMENT TO: Honorable Mayor and Council THRU: Andrew D. Lukasik, Village Manager FROM: Samia Janjua, Finance Director DATE: April 9, 2020 SUBJECT: ORDINANCE - 1st Reading – General Fund Budget Amendment for FY 2020 Capital Leases During the Fiscal Year 2020 budget process, Village Staff evaluated the option of leasing its vehicles versus directly purchasing them. Village Council has approved the following capital lease programs: Description Lease Term Annual Payment Total Payments ① Total Financed ② Village-wide Vehicle Lease 5 Years $60,505 $302,523 $282,068 Ambulance Lease 7 years $49,055 $358,385 $327,203 Total $109,560 $660,908 $609,271 ① Principal + Interest + Balloon payment; ②Principal + Balloon payment The annual debt service for these capital leases is budgeted in the General Fund; however, the Village’s Auditor has advised that the total amount financed for capital leases should be shown in the Fiscal Year 2020 budget as “other financing sources/uses” and capital outlay for financial reporting purposes. (Note: this requirement is for the first year of the lease only): GASB “When a capital lease represents the acquisition or construction of a general capital asset, the acquisition or construction of that asset should be reflected as an expenditure and other financing source, consistent with the accounting and financial reporting for general obligation bonded debt.” While this change will not result in a net income effect in 2020, because the change increases the total FY 2020 General Fund budget, a budget amendment ordinance is required. Budget Amendment: Fund Account Description Use Source General Fund A4200-09901 Capital Lease $609,271 General Fund A5540-66000 Capital Lease $609,271 Total $609,271 $609,271 The attached Ordinance has been prepared and/or reviewed for legal sufficiency by the Village Attorney. Recommendation: Village Staff recommends Council consideration and approval on first reading of the attached Ordinance authorizing the Mayor and Village Clerk to execute the required budget amendment for the Capital Lease Program in accordance with Village policies and procedures. Page 1 of 2 ORDINANCE NO. 2020-____ 1 2 AN ORDINANCE OF THE VILLAGE COUNCIL OF THE VILLAGE OF NORTH 3 PALM BEACH, FLORIDA, AMENDING THE ADOPTED GENERAL FUND 4 BUDGET FOR FISCAL YEAR 2020 TO CLASSIFY THE TOTAL AMOUNT 5 FINANCED FOR VILLAGE VEHICLES AS CAPITAL OUTLAY; PROVIDING 6 FOR CONFLICTS; PROVIDING FOR SEVERABILITY; AND PROVIDING FOR 7 AN EFFECTIVE DATE. 8 9 WHEREAS, during Fiscal Year 2020, the Village Council approved two capital lease programs, one 10 Village-wide and the other for a fire rescue vehicle (ambulance); and 11 12 WHEREAS, while the Village has budgeted the annual debt services for these leases in the General 13 Fund, the Village Auditor has advised the Village that the total amount financed for capital leases 14 should be shown in the Fiscal Year 2020 budget as “other financing uses/sources” and capital outlay 15 for financial reporting purposes; and 16 17 WHEREAS, notwithstanding the lack of any net income effect, because this amendment increases 18 the total amount of the budget, this transfer must be accomplished by ordinance as required by Section 19 166.241, Florida Statutes; and 20 21 WHEREAS, the Village Council determines that the adoption of this budget amendment is in the best 22 interests of the residents and citizens of the Village of North Palm Beach. 23 24 NOW, THEREFORE, BE IT ORDAINED BY THE VILLAGE COUNCIL OF NORTH PALM 25 BEACH, FLORIDA as follows: 26 27 Section 1. The foregoing recitals are hereby ratified as true and correct and incorporated herein. 28 29 Section 2. The Village Council hereby amends the adopted Village of North Palm Beach General 30 Fund budget for Fiscal Year 2020 as follows: 31 32 Budget Amendment: 33 34 Fund Account Description Use Source General Fund A4200-09901 Capital Lease $609,271 General Fund A5540-66000 Capital Lease $609,271 Total $609,271 $609,271 35 Section 3. The Mayor and Village Clerk are hereby authorized and directed to execute the budget 36 amendment for and on behalf of the Village of North Palm Beach. 37 38 Section 4. If any section, paragraph, sentence, clause, phrase or word of this Ordinance is for any 39 reason held by a court of competent jurisdiction to be unconstitutional, inoperative or void, such 40 holding shall not affect the remainder of this Ordinance. 41 42 Section 5. All ordinances and resolutions, or parts of ordinances and resolutions, in conflict 43 herewith are hereby repealed to the extent of such conflict. 44 Page 2 of 2 Section 6. This Ordinance shall be effective immediately upon adoption. 1 2 PLACED ON FIRST READING THIS _____ DAY OF ________________, 2020. 3 4 PLACED ON SECOND, FINAL READING AND PASSED THIS ________ DAY OF 5 ___________, 2020. 6 7 8 (Village Seal) ______________________________ 9 MAYOR 10 11 12 ATTEST: 13 14 15 VILLAGE CLERK 16 17 APPROVED AS TO FORM AND 18 LEGAL SUFFICIENCY: 19 20 21 VILLAGE ATTORNEY 22 VILLAGE OF NORTH PALM BEACH FINANCE DEPARTMENT TO: Honorable Mayor and Council THRU: Andrew D. Lukasik, Village Manager FROM: Samia Janjua, Finance Director DATE: April 9, 2020 SUBJECT: RESOLUTION – Amending Resolution No. 2020-14 to modify the payment schedule for the Lease Agreement with REV Financial Services, LLC (Ambulance) and authorizing the Village Manager to execute an amended exhibit to the Lease Agreement Through the adoption of Resolution No. 2020-14 on February 13, 2020, the Village Council approved a proposal from REV Financial Services, LLC for the lease of one 2020 Freightliner custom AEV Type I module rescue vehicle (ambulance) equipped to Village specifications. In accordance with the proposal, the Council approved an annual lease payment of $48,546.12 for a term of seven years, with a balloon payment of $15,000 for the purchase of the ambulance at the conclusion of the lease. The first payment was due in March 5, 2020; however, the Village will not receive delivery of the ambulance until next fiscal year. Consequently, REV financial services gave the Village the option of deferring the first payment to March 5, 2021 so that the first payment will be due after we receive delivery of the ambulance. However, due to the additional accrued interest, the annual payment will increase by $508.84, increasing the total amount of the annual payment to $49,054.96. Because this increase exceeds the amount approved in Resolution No. 2020-14, Village Staff is seeking Council approval of the attached Resolution amending Resolution 2020- 14 to approve the increased annual payment and authorize the Village Manager to execute the amended payment schedule. The attached Resolution has been prepared and/or reviewed by the Village Attorney for legal sufficiency. Account Information: Fund Department Account Number Account Description Additional Annual Amount General Fund Debt Service A8535-49158 Vehicle Lease $508.84 Recommendation: Village Staff requests Council consideration and approval of the attached Resolution amending Resolution No. 2020-14 to increase the annual payment to REV Financial Services for the rescue vehicle (ambulance) by $508.84, with funds expended from Account No. A8535-49158 (Debt Service – Vehicle Lease), and authorizing the Village Manager to execute an amendment payment schedule in accordance with Village policies and procedures. RESOLUTION 2020-____ A RESOLUTION OF THE VILLAGE COUNCIL OF THE VILLAGE OF NORTH PALM BEACH, FLORIDA AMENDING RESOLUTION NO. 2020-14 TO MODIFY THE PAYMENT SCHEDULE FOR THE LEASING AGREEMENT WITH REV FINANCIAL SERVICES, LLC FOR THE AEV TYPE I RESCUE VEHICLE (AMBULANCE) AND AUTHORIZING THE VILLAGE MANAGER TO EXECUTE AN AMENDED EXHIBIT TO THE AGREEMENT; PROVIDING FOR CONFLICTS; AND PROVIDING FOR AN EFFECTIVE DATE. WHEREAS, through the adoption of Resolution No. 2020-14 on February 13, 2020, the Village Council approved a proposal from REV Financial Services, LLC for the lease of one AEV Type I rescue vehicle (ambulance); and WHEREAS, in accordance with the proposal, the Council approved an annual lease payment of $48,546.12 for a term of seven years; and WHEREAS, because the Village will not receive the vehicle until the next fiscal year, REV Financial Services gave the Village the option of delaying the first payment from March 5, 2020 until March 5, 2021, thereby increasing the annual payment due to accrued interest; and WHEREAS, the increase in annual payment requires an amendment to Resolution No. 2020-14, and the Village Council determines that the adoption of this Resolution is in the best interests of the residents and citizens of the Village of North Palm Beach. NOW, THEREFORE, BE IT RESOLVED BY THE VILLAGE COUNCIL OF THE VILLAGE OF NORTH PALM BEACH, FLORIDA as follows: Section 1. The foregoing recitals are ratified as true and incorporated herein. Section 2. The Village Council hereby amends Resolution No. 2020-14 by increasing the annual payment due under the Lease Agreement with REV Financial Services, LLC by $508.84 to $49,054.96, with funds expended from Account No. A8535-49158 (Debt Service – Vehicle Lease). The Village Council further authorizes the Village Manager to execute an Amended Payment Schedule (Exhibit A-1 to the Lease Agreement), a copy of which is attached hereto and incorporated herein. Section 3. All other provisions of Resolution No. 2020-14, to the extent not expressly modified herein, shall remain in full force and effect. Section 4. This Resolution shall be effective immediately upon adoption. PASSED AND ADOPTED THIS _____ DAY OF ________________, 2020. (Village Seal) MAYOR ATTEST: VILLAGE CLERK EXHIBIT A-1 RENTAL PAYMENT SCHEDULE RE: Schedule of Property No. 1 dated March 5, 2020 to Master Equipment Lease Purchase Agreement dated as of March 5, 2020 between REV Financial Services LLC, as Lessor, and Village of North Palm Beach, as Lessee. Payment Payment Purchase Outstanding Pmt # Date Amount Interest Principal Price Balance 3/5/2020 $312,203.00 1 3/5/2021 $24,527.48 $10,052.94 $14,474.54 $306,660.31 $297,728.46 2 9/5/2021 $24,527.48 $4,793.43 $19,734.05 $286,334.24 $277,994.41 3 3/5/2022 $24,527.48 $4,475.71 $20,051.77 $265,680.92 $257,942.64 4 9/5/2022 $24,527.48 $4,152.88 $20,374.60 $244,695.08 $237,568.04 5 3/5/2023 $24,527.48 $3,824.85 $20,702.63 $223,371.37 $216,865.41 6 9/5/2023 $24,527.48 $3,491.53 $21,035.94 $201,704.35 $195,829.47 7 3/5/2024 $24,527.48 $3,152.85 $21,374.62 $179,688.49 $174,454.85 8 9/5/2024 $24,527.48 $2,808.72 $21,718.75 $157,318.17 $152,736.09 9 3/5/2025 $24,527.48 $2,459.05 $22,068.43 $134,587.70 $130,667.67 10 9/5/2025 $24,527.48 $2,103.75 $22,423.73 $111,491.26 $108,243.94 11 3/5/2026 $24,527.48 $1,742.73 $22,784.75 $88,022.96 $85,459.19 12 9/5/2026 $24,527.48 $1,375.89 $23,151.58 $64,176.83 $62,307.60 13 3/5/2027 $24,527.48 $1,003.15 $23,524.32 $39,946.78 $38,783.28 14 9/5/2027 $24,527.48 $624.41 $23,903.07 $15,326.62 $14,880.21 15 12/5/2027 $15,000.00 $119.79 $14,880.21 $0.00 $0.00 Totals: $358,384.68 $46,181.68 $312,203.00 Rate 3.2200% COMMENCEMENT DATE: March 5, 2020 Village of North Palm Beach Signature: Name/Title: Date: VILLAGE OF NORTH PALM BEACH HUMAN RESOURCES DEPARTMENT TO: Honorable Mayor and Council THRU: Andrew D. Lukasik, Village Manager FROM: Renee Govig, Director of Human Resources Samia Janjua, Director of Finance DATE: April 9, 2020 SUBJECT: RESOLUTION – Removal of the Village Manager’s Pay Grade from the Compensation Plan On February 13, 2020, the Council approved a retroactive 5% salary increase for the Village Manager for both the second and third years of his employment (March 27, 2018 through March 27, 2020). The Council also approved an additional 5% increase effective March 27, 2020. With this latest increase, the Village Manager’s salary will exceed the pay range set fort h in the Village’s Comprehensive Pay Plan adopted as part of the Fiscal Year 2020 budget (Pay Grade 126 – $110,000 to $176,000). In most municipalities, the Manager position is not included within the pay ranges because the governing body establishes the Manager’s salary and other compensation by contract. Article IV, Section 1 of the Village Charter specifically provides that “the compensation of the Manager shall be fixed by the Council.” In keeping with this common practice and the Village Charter mandate that the Council determine the Village Manager’s compensation, Staff recommends that the salary range for the Village Manager (Pay Grade 126) be removed from the Comprehensive Pay Plan. The attached Resolution has been prepared and reviewed for legal sufficiency by the Village Attorney. Recommendation: Village Staff requests Council consideration and approval of the attached Resolution amending the Comprehensive Pay Plan to remove the Village Manager’s Pay Grade (Pay Grad 126) in accordance with Village policies and procedures. RESOLUTION 2020- A RESOLUTION OF THE VILLAGE COUNCIL OF THE VILLAGE OF NORTH PALM BEACH, FLORIDA AMENDING THE COMPREHENSIVE PAY PLAN ADOPTED AS PART OF THE FISCAL YEAR 2020 BUDGET TO REMOVE THE VILLAGE MANAGER’S PAY GRADE; PROVIDING FOR CONFLICTS; AND PROVIDING FOR AN EFFECTIVE DATE. WHEREAS, through the adoption of Ordinance No. 2019-10 (“Budget Ordinance”) on September 26, 2019, the Village Council adopted the Comprehensive Pay Plan as part of the annual budget for Fiscal Year 2020; and WHEREAS, Section 5 of the Budget Ordinance authorizes the Village Council to revise the Comprehensive Pay Plan by Resolution during the course of the Fiscal Year; and WHEREAS, pursuant to Article IV, Section 2 of the Village Charter, the Village Council establishes the Village Manager’s compensation, and due to increases approved by the Village Council based on the Manager’s performance evaluation, the Village Manager’s salary will exceed the current Pay Grade (Pay Grade 126) set forth in the Comprehensive Pay Plan; and WHEREAS, the Village Council wishes to amend the Comprehensive Pay Play to remove the Village Manager’s pay grade and determines that the adoption of this Resolution is in the best interests of the residents and citizens of the Village of North Palm Beach. NOW, THEREFORE, BE IT RESOLVED BY THE VILLAGE COUNCIL OF THE VILLAGE OF NORTH PALM BEACH, FLORIDA as follows: Section 1. The foregoing recitals are ratified as true and incorporated herein. Section 2. The Village Council hereby amends the Comprehensive Pay Plan for Fiscal Year 2020 to remove Pay Grade 126 for the Village Manager from the Plan with the notation that the Village Manager’s compensation is established by Contract. Section 3. All other provisions of the Comprehensive Pay Plan, as previously amended, shall remain in full force and effect as originally adopted. Section 4. This Resolution shall take effect immediately upon its adoption. PASSED AND ADOPTED THIS ____ DAY OF ____________, 2020. (Village Seal) MAYOR ATTEST: VILLAGE CLERK PT FT Class Title Union Pay Grade FLSA Hrly Min Hrly Mid Hrly Max Annual Min An Mid Annual Max *INSTRUCTOR NU *N 35.00$ 48.75$ 62.50$ 45,500.00$ 63,375.00$ 81,250.00$ 10 CAMP COUNSELOR NU 100 N 10.96$ 14.24$ 17.53$ 22,796.80$ 29,619.20$ 36,462.40$ 13 1 RECREATION ASSISTANT NU 101 N 11.61$ 15.10$ 18.58$ 24,148.80$ 31,408.00$ 38,646.40$ 26 COUNTRY CLUB ATTENDANT NU 101 N 11.61$ 15.10$ 18.58$ 24,148.80$ 31,408.00$ 38,646.40$ 1 CLERICAL SPECIALIST NU 102 N 12.31$ 16.00$ 19.70$ 25,604.80$ 33,280.00$ 40,976.00$ 14 POOL LIFEGUARD NU 102 N 12.31$ 16.00$ 19.70$ 25,604.80$ 33,280.00$ 40,976.00$ 9 LIBRARY CLERK NU 103 N 13.05$ 16.96$ 20.88$ 27,144.00$ 35,276.80$ 43,430.40$ 1 GROUNDS MAINTENANCE WORKER FPE 103 N 13.05$ 16.96$ 20.88$ 27,144.00$ 35,276.80$ 43,430.40$ 2 STREET MAINTENANCE WORKER FPE 103 N 13.05$ 16.96$ 20.88$ 27,144.00$ 35,276.80$ 43,430.40$ 1 IRRIGATION TECHNICIAN FPE 104 N 13.83$ 17.98$ 22.13$ 28,766.40$ 37,398.40$ 46,030.40$ 3 LIBRARY ASSISTANT FPE 104 N 13.83$ 17.98$ 22.13$ 28,766.40$ 37,398.40$ 46,030.40$ 2 SANITATION COLLECTOR PT NU 104 N 13.83$ 17.98$ 22.13$ 28,766.40$ 37,398.40$ 46,030.40$ 1 GOLF MERCHANDISING ASSISTANT NU 104 N 13.83$ 17.98$ 22.13$ 28,766.40$ 37,398.40$ 46,030.40$ 2 EQUIPMENT OPERATOR FPE 107 N 16.47$ 21.42$ 26.36$ 34,257.60$ 44,553.60$ 54,828.80$ 1 SR. IRRIGATION TECHNICIAN FPE 107 N 16.47$ 21.42$ 26.36$ 34,257.60$ 44,553.60$ 54,828.80$ 1 POLICE SERVICE AIDE NU 107 N 16.47$ 21.42$ 26.36$ 34,257.60$ 44,553.60$ 54,828.80$ 18 SANITATION DRIVER/OPERATOR FPE 107 N 16.47$ 21.42$ 26.36$ 34,257.60$ 44,553.60$ 54,828.80$ 1 GOLF MEMBER RELATIONS COORDINATOR NU 107 N 16.47$ 21.42$ 26.36$ 34,257.60$ 44,553.60$ 54,828.80$ 3 ACCOUNTING CLERK NU 108 N 17.46$ 22.70$ 27.94$ 36,316.80$ 47,216.00$ 58,115.20$ 2 1 ADMINISTRATIVE ASSISTANT NU 108 N 17.46$ 22.70$ 27.94$ 36,316.80$ 47,216.00$ 58,115.20$ 2 VEHICLE MECHANIC FPE 108 N 17.46$ 22.70$ 27.94$ 36,316.80$ 47,216.00$ 58,115.20$ 4 TRADES MECHANIC FPE 108 N 17.46$ 22.70$ 27.94$ 36,316.80$ 47,216.00$ 58,115.20$ 2 ASSISTANT GOLF PROFESSIONAL NU 109 N 18.51$ 24.06$ 29.62$ 38,500.80$ 50,044.80$ 61,609.60$ 3 PERMIT & LICENSE TECHNICIAN FPE 109 N 18.51$ 24.06$ 29.62$ 38,500.80$ 50,044.80$ 61,609.60$ 1 5 ADMINISTRATIVE COORDINATOR NU 109 N 18.51$ 24.06$ 29.62$ 38,500.80$ 50,044.80$ 61,609.60$ 2 CODE COMPLIANCE OFFICER FPE 109 N 18.51$ 24.06$ 29.62$ 38,500.80$ 50,044.80$ 61,609.60$ 1 ZONING COMPLIANCE OFFICER FPE 109 N 18.51$ 24.06$ 29.62$ 38,500.80$ 50,044.80$ 61,609.60$ 1 SR. LIBRARY ASSISTANT FPE 109 N 18.51$ 24.06$ 29.62$ 38,500.80$ 50,044.80$ 61,609.60$ 14 SCHOOL CROSSING GUARD NU 109 N 1 TECHNICAL SUPPORT SPECIALIST NU 110 N 19.62$ 25.51$ 31.39$ 40,809.60$ 53,060.80$ 65,291.20$ 1 HUMAN RESOURCES ANALYST NU 110 N 19.62$ 25.51$ 31.39$ 40,809.60$ 53,060.80$ 65,291.20$ 1 MECHANICAL SYSTEMS COORDINATOR FPE 111 N 20.80$ 27.04$ 33.28$ 43,264.00$ 56,243.20$ 69,222.40$ 2 BUILDING CONSTRUCTION INSPECTOR FPE 111 N 20.80$ 27.04$ 33.28$ 43,264.00$ 56,243.20$ 69,222.40$ 1 EXECUTIVE ASSISTANT NU 111 N 20.80$ 27.04$ 33.28$ 43,264.00$ 56,243.20$ 69,222.40$ 3 RECREATION SUPERVISOR FPE 112 N 22.05$ 28.66$ 35.28$ 45,864.00$ 59,612.80$ 73,382.40$ 1 TENNIS SUPERVISOR FPE 112 N 22.05$ 28.66$ 35.28$ 45,864.00$ 59,612.80$ 73,382.40$ 1 POOL SUPERVISOR FPE 112 N 22.05$ 28.66$ 35.28$ 45,864.00$ 59,612.80$ 73,382.40$ 1 CRIMINAL INTELLIGENCE ANALYST NU 112 N 22.05$ 28.66$ 35.28$ 45,864.00$ 59,612.80$ 73,382.40$ 1 LIBRARIAN FPE 112 N 22.05$ 28.66$ 35.28$ 45,864.00$ 59,612.80$ 73,382.40$ 2 ACCOUNTANT NU 113 E 23.37$ 30.38$ 37.39$ 48,609.60$ 63,190.40$ 77,771.20$ 1 LICENSE & PERMIT SUPERVISOR NU 113 E 23.37$ 30.38$ 37.39$ 48,609.60$ 63,190.40$ 77,771.20$ 3 PUBLIC WORKS SUPERVISOR NU 113 E 23.37$ 30.38$ 37.39$ 48,609.60$ 63,190.40$ 77,771.20$ 1 COMMUNICATIONS MANAGER NU 114 E 24.77$ 32.20$ 39.64$ 51,521.60$ 66,976.00$ 82,451.20$ 1 PLANNER NU 114 E 24.77$ 32.20$ 39.64$ 51,521.60$ 66,976.00$ 82,451.20$ 1 DEPUTY VILLAGE CLERK NU 114 E 24.77$ 32.20$ 39.64$ 51,521.60$ 66,976.00$ 82,451.20$ 1 SR. BUILDING CONSTRUCTION INSPECTOR FPE 115 N 26.26$ 34.14$ 42.01$ 54,620.80$ 71,011.20$ 87,380.80$ 1 SR. FIRE INSPECTOR NU 115 N 26.26$ 34.14$ 42.01$ 54,620.80$ 71,011.20$ 87,380.80$ 1 HUMAN RESOURCES SPECIALIST NU 115 E 26.26$ 34.14$ 42.01$ 54,620.80$ 71,011.20$ 87,380.80$ 1 PURCHASING MANAGER NU 115 E 26.26$ 34.14$ 42.01$ 54,620.80$ 71,011.20$ 87,380.80$ 1 PUBLIC WORKS MANAGER NU 115 E 26.26$ 34.14$ 42.01$ 54,620.80$ 71,011.20$ 87,380.80$ 1 NETWORK SUPPORT SPECIALIST NU 115 N 26.26$ 34.14$ 42.01$ 54,620.80$ 71,011.20$ 87,380.80$ 1 PRINCIPAL PLANNER NU 117 E 29.55$ 38.42$ 47.29$ 61,464.00$ 79,913.60$ 98,363.20$ 1 FINANCE MANAGER NU 118 E 31.27$ 40.66$ 50.04$ 65,041.60$ 84,572.80$ 104,083.20$ 1 DIRECTOR OF LIBRARY NU 118 E 31.27$ 40.66$ 50.04$ 65,041.60$ 84,572.80$ 104,083.20$ 1 HEAD GOLF PROFESSIONAL NU 119 E 33.15$ 43.10$ 53.04$ 68,952.00$ 89,648.00$ 110,323.20$ 1 BUILDING OFFICIAL NU 121 E 37.87$ 49.23$ 60.59$ 78,769.60$ 102,398.40$ 126,027.20$ 1 VILLAGE CLERK NU 121 E 37.87$ 49.23$ 60.59$ 78,769.60$ 102,398.40$ 126,027.20$ 1 DIRECTOR OF HUMAN RESOURCES NU 122 E 40.23$ 52.30$ 64.37$ 83,678.40$ 108,784.00$ 133,889.60$ 1 DIRECTOR OF SPECIAL PROJECTS NU 122 E 40.23$ 52.30$ 64.37$ 83,678.40$ 108,784.00$ 133,889.60$ 1 DIRECTOR OF COMMUNITY DEVELOPMENT NU 122 E 40.23$ 52.30$ 64.37$ 83,678.40$ 108,784.00$ 133,889.60$ 1 DIRECTOR OF INFORMATION TECHNOLOGY NU 122 E 40.23$ 52.30$ 64.37$ 83,678.40$ 108,784.00$ 133,889.60$ 1 DIRECTOR OF PARKS & RECREATION NU 122 E 40.23$ 52.30$ 64.37$ 83,678.40$ 108,784.00$ 133,889.60$ 1 DIRECTOR OF PUBLIC WORKS NU 122 E 40.23$ 52.30$ 64.37$ 83,678.40$ 108,784.00$ 133,889.60$ 1 CALEA MGR/CAPTAIN OF PROFESSIONAL STANDARDS NU 122 E 40.23$ 52.30$ 64.37$ 83,678.40$ 108,784.00$ 133,889.60$ 1 POLICE CAPTAIN NU 122 E 40.23$ 52.30$ 64.37$ 83,678.40$ 108,784.00$ 133,889.60$ 1 DISTRICT CHIEF NU 122 E 40.23$ 52.30$ 64.37$ 83,678.40$ 108,784.00$ 133,889.60$ 1 GENERAL MANAGER NU 123 E 43.05$ 55.96$ 68.88$ 89,544.00$ 116,396.80$ 143,270.40$ 1 DEPUTY POLICE CHIEF NU 123 E 43.05$ 55.96$ 68.88$ 89,544.00$ 116,396.80$ 143,270.40$ 1 FIRE CHIEF NU 124 E 46.17$ 60.02$ 73.87$ 96,033.60$ 124,841.60$ 153,649.60$ 1 DIRECTOR OF FINANCE NU 124 E 46.17$ 60.02$ 73.87$ 96,033.60$ 124,841.60$ 153,649.60$ 1 POLICE CHIEF NU 125 E 49.29$ 64.07$ 78.86$ 102,523.20$ 133,265.60$ 164,028.80$ 1 VILLAGE MANAGER NU 15 FIREFIGHTER/MEDIC IAFF 202 N 22.06$ 28.68$ 35.30$ 55,068.50$ 71,589.05$ 88,109.60$ (P/T positions shown with F/T annual rate for categorization purposes only) All union pay / positions are shown for categorization purposes only and are subject to ratification of Collective Bargaining Agreements Daily Rate $27.68 Compensation Established by Contract Pay Plan Ranges FY 2020 PT FT Class Title Union Pay Grade FLSA Hrly Min Hrly Mid Hrly Max Annual Min An Mid Annual Max (P/T positions shown with F/T annual rate for categorization purposes only) All union pay / positions are shown for categorization purposes only and are subject to ratification of Collective Bargaining Agreements Pay Plan Ranges FY 2020 1 DRIVER ENGINEER/EMT IAFF 203 N 22.45$ 29.18$ 35.92$ 56,031.65$ 72,841.14$ 89,650.64$ 2 DRIVER ENGINEER/MEDIC IAFF 204 N 23.92$ 31.10$ 38.28$ 59,709.16$ 77,621.90$ 95,534.65$ 3 FIRE RESCUE CAPTAIN IAFF 206 N 28.19$ 36.65$ 45.10$ 70,358.77$ 91,466.40$ 112,574.03$ 1 RECORDS CLERK PBA 300 N 23.50$ 30.55$ 37.60$ 48,876.60$ 63,539.58$ 78,202.56$ 24 POLICE OFFICER PBA 302 N 26.40$ 34.32$ 42.24$ 54,917.75$ 71,393.07$ 87,868.40$ 6 POLICE SERGEANT PBA 306 N 33.33$ 43.33$ 53.33$ 69,332.39$ 90,132.11$ 110,931.83$ 96 153 * The number of instructors will vary based on program development. The annual rates are based on 25 hours per week VILLAGE OF NORTH PALM BEACH COMMUNITY DEVELOPMENT DEPARTMENT TO: Honorable Mayor and Council THRU: Andrew D. Lukasik, Village Manager FROM: Jeremy Hubsch, Community Development Director DATE: April 9, 2020 SUBJECT: RESOLUTION – Approving a Third Amendment to an Agreement with M.T. Causley, LLC for Building Official, Plan Review, and Inspection Services The Community Development Department’s Building Division has been without a full-time Building Official since April, 2018. While the Department has used the services of M.T. Causley historically for plan review and building inspection services, the Village has expanded the use of the contract for Building Official services while the position has remained vacant. On October 1, 2018, the Village executed an Agreement for Building Official, Plan Review and Inspection Services in Fiscal Year 2019 in the amount of $10,000 in accordance with the terms, conditions and pricing established in an existing, competitively bid contract between M.T. Causley, LLC and the City of Fort Lauderdale. The Fort Lauderdale Contract is in effect through March 15, 2021. Through the adoption of Resolution 2018-86 on October 18, 2019, the Village Council approved an Amendment to the Agreement to increase the maximum total compensation from $10,000 to $50,000. Through the adoption of Resolution 2019-15 on March 14, 2019, the Village Council approved a Second Amendment to the Agreement to increase the amount of compensation to $300,000. Village Staff is in need of continued building related services until the open positions within the Building Division are filled. Recent efforts to hire in-house building inspectors have been unsuccessful due to the labor market. As such, Staff is requesting Council approval of a Third Amendment to the Agreement with M.T. Causley to increase the maximum amount of compensation for the Agreement to $600,000 to cover the use of a full-time Building Official (40 hours/week) and a Building Inspector/Plans Examiner (34 hours/week) for the remainder of the fiscal year. This will allow necessary funding for Building Division services, in the event that efforts to hire in house employees continue to be unsuccessful. Account Information: Fund Department Account Number Account Description Amount General Fund Building A6019-33190 Professional Services $600,000 Recommendation: Village Staff recommends Council consideration and approval of the attached Resolution approving a Third Amendment to the Agreement with M.T. Causley, LLC to extend the Agreement through the end of Fiscal Year 2020 and to increase the amount of compensation to $600,000, with funds expended from Account No. A6019-33190 (Building – Professional Services), and authorizing the Mayor and Village Clerk to execute the Third Amendment in accordance with Village policies and procedures. Page 1 of 2 RESOLUTION 2020-___ A RESOLUTION OF THE VILLAGE COUNCIL OF THE VILLAGE OF NORTH PALM BEACH, FLORIDA APPROVING A THIRD AMENDMENT TO AN AGREEMENT WITH M.T. CAUSLEY, LLC FOR BUILDING OFFICIAL, PLAN REVIEW AND INSPECTION SERVICES THROUGH THE END OF THE CURRENT FISCAL YEAR PURSUANT TO PRICING ESTABLISHED IN AN EXISTING AGREEMENT BETWEEN M.T. CAUSLEY AND THE CITY OF FORT LAUDERDALE AND AUTHORIZING THE MAYOR AND VILLAGE CLERK TO EXECUTE THE THIRD AMENDMENT; PROVIDING FOR CONFLICTS; AND PROVIDING FOR AN EFFECTIVE DATE. WHEREAS, on October 1, 2018, the Village Manager executed an Agreement for Building Official, Plan Review and Inspection Services with M.T. Causley, Inc. (“Agreement”) on a periodic basis in accordance with (or by “piggybacking”) the terms, conditions and pricing established in an existing competitively bid contract between M.T. Causley and the City of Fort Lauderdale dated May 16, 2017; and WHEREAS, through the adoption of Resolution No. 2018-86 on October 18, 2018, the Village Council approved an Amendment to the Agreement to increase the compensation from $10,000 to $50,000; and WHEREAS, through adoption of Resolution No. 2019-25 on March 14, 2019, the Village Council approved a Second Amendment to the Agreement to increase the compensation to $300,000 through the end of Fiscal Year 2019; and WHEREAS, Village Staff is still in need of additional building official, plan review and inspection services through the end of the current fiscal year and until open positions within the Building Division are filled, and is recommending the execution of an Amendment to the Agreement to increase the compensation to $600,000 retroactive to January 31, 2020 and extend the term of the Agreement through the end of the current fiscal year; and WHEREAS, the Village Council determines that the approval of the Third Amendment to the Contract is in the best interests of the residents and citizens of the Village of North Palm Beach. NOW, THEREFORE, BE IT RESOLVED BY THE VILLAGE COUNCIL OF THE VILLAGE OF NORTH PALM BEACH, FLORIDA as follows: Section 1. The foregoing recitals are ratified as true and incorporated herein. Section 2. The Village Council hereby approves a Third Amendment to the Agreement for Building Official, Plan Review and Inspection Services, a copy of which is attached hereto and incorporated herein, and authorizes the Mayor and Village Clerk to execute the Third Amendment on behalf of the Village. The total compensation paid pursuant to the Agreement, as amended, shall not exceed $600,000, with funds expended from Account No. A6019-33190 (Community Development/Building Division – Professional Services). Section 3. All resolutions or parts of resolutions in conflict with this Resolution are hereby repealed to the extent of such conflict. Page 2 of 2 Section 4. This Resolution shall be effective immediately upon adoption. PASSED AND ADOPTED THIS ____ DAY OF MARCH, 2020. (Village Seal) MAYOR ATTEST: VILLAGE CLERK Page 1 of 2 THIRD AMENDMENT TO AGREEMENT FOR BUILDING OFFICIAL, PLAN REVIEW AND INSPECTION SERVICES THIS THIRD AMENDMENT is made and entered into this _____ day of ___________, 2020, by and between the VILLAGE OF NORTH PALM BEACH, a Florida municipal corporation (“VILLAGE”) and M.T. CAUSLEY, LLC, a Florida limited liability company (“CONTRACTOR”), whose Federal I.D. No. is 65-0782808. W I T N E S S E T H: WHEREAS, the VILLAGE and CONTRACTOR entered into an Agreement for Building Official, Plan Review and Inspection Services dated October 1, 2018 (“Agreement”) whereby CONTRACTOR agreed to provide periodic building official, plan review and inspection services in accordance with (or by “piggybacking”) the terms, conditions and pricing established by an existing competitively bid Contract for Services between CONTRACTOR and the City of Fort Lauderdale; and WHEREAS, on October 8, 2018, the VILLAGE and CONTRACTOR executed an Amendment to the Agreement to increase the maximum compensation to $50,000; and WHEREAS, on March 19, 2019, the VILLAGE and CONTRACTOR executed a Second Amendment to the Agreement to increase the maximum compensation to $300,000; and WHEREAS, due to vacancies within the Building Division, the VILLAGE is in need of additional services beyond the initial estimated contract amount, as amended, for the current fiscal year, and CONTRACTOR has agreed to provide these additional services at the terms, conditions and pricing previously established. NOW, THEREFORE, in consideration of the mutual representations and obligations set forth herein and in the Agreement, as amended, and other good and valuable consideration, the receipt and sufficiency of which is hereby acknowledged, the parties agree as follows: 1. Section 5 of the Agreement is hereby amended to increase the total compensation paid by VILLAGE to CONTRACTOR from not to exceed $300,000 to not to exceed $600,000. 2. Section 9 of the Agreement is hereby amended to extend the term of the Agreement through September 30, 2020. 3. All other provisions of the Agreement, as amended, shall remain in full force and effect to the extent not expressly modified herein. 4. This Third Amendment shall be effective retroactive to January 31, 2020. Page 2 of 2 IN WITNESS WHEREOF, the parties have executed this Third Amendment to the Agreement for Building Official, Plan Review and Inspection Services on the date first written above. VILLAGE OF NORTH PALM BEACH (VILLAGE SEAL) By:_______________________________ Mayor ATTEST: By:_______________________________ Jessica Green, Village Clerk APPROVED AS TO FORM AND LEGAL SUFFICIENCY: By: _______________________________ Leonard G. Rubin, Village Attorney M.T. CAUSLEY, LLC By:______________________________ Name: Title: City of Fort Lauderdale • Procurement Services Division 100 N. Andrews Avenue. 619 • Fort Lauderdale, Florida 33301 954-828-5933 Fax 954-828-5576 www.fortlauderdale.gov Febmary 1,2019 MT Causley LLC. Attn; Michael Causley 1335 Shotgun Road Sunrise, PL 33326 SUBJECT: Renewal of Term Contract for Solicitation Inspection and Plan Review Services, RFP 575-11849-3, Amendment 1 Dear Michael Causley: The subject Contract will expire on May 15, 2019. In accordance with the terms and conditions of the subject Contract, the Contract may, by mutual consent of the parties, be renewed for an additional twenty four (24) month period. The City would like to exercise the right to renew this Contract for two (2) additional years effectiveC^- May16, 2019, at the existing pricing, terms and conditions. Please indicate your approval of this offer by having an officer of your firm execute the acceptance portion below and return this letter by email to Teresa Wright at twriqht@.fortlauderdale.gov by February 9, 2019. Upon execution below by your firm's authorized representative, this Amendment will be your official notice that the Contract has been extended for two (2) years and no additional documentation will be required. Please be sure any required Insurance Certificates are up to date and attached to your response. Thank you for your immediate attention to this matter. Sincerely, ACCEPTANCE CPPO, CPPB, MBA jf Procurement Officer By jgmlSialSyQatuFe— Michael T. Causlev. President Name Title Febniafv 1. 2019 Date VILLAGE OF NORTH PALM BEACH GOLF ADVISORY BOARD MINUTES of February 10, 2020 I. CALL TO ORDER A. The meeting was called to order by Chairman Steve Mathison at 6:00 p.m. II. ROLL CALL A. Present: Absent: Stephen Mathison – Chairman Rich Pizzolato – Vice Chairman Curtis Witters – Secretary David Talley – Member x Jeff Irish – Member Jeff Egizio – Member x Landon Wells - Member B. Staff Members Present: Allan Bowman, Director of Golf C. Council Members Present: D. Public Present: Jerry Pierman Lorraine Rocamboli III. APPROVAL OF MEETING MINUTES Minutes of the January 13, 2020 were approved 5-0. IV. ADMINISTRATIVE REPORTS Golf Report. Allan Bowman, Director of Golf, delivered his report. NPB Golf Advisory Board Minutes of February 10, 2020 Allan Bowman discussed a plan for remediation of the failing pond banks and bunker faces on the golf course. The Latitude 36 grass has proven to be unable to hold the slope in these locations and need to be replaced. The estimated cost is $250,000 for the pond banks and $250,000 for the bunker faces. Allan met with Brightview concerning the problem. Brightview proposes to re-grade, stabilize, and re-grass the pond banks and bunker faces for a cost of $500,000. Allan is going to propose the following terms to the Village Council: 1. $125,000 will be paid to Brightview to begin the work. 2. Brightview will then schedule and begin the work 3. The contract of Brightview with the Village with then be extended for one additional year. 4. The balance of the cost of the project, $375,000 will be paid to Brightview in 40 monthly payments, without interest. The monthly payment will be slightly more than $9,000. The Golf Advisory Board voted 4-1 to recommend the proposed plan. Until the repairs are made the golf course will continue to have a local rule that bunker faces are played as ground under repair. Allan reported that the Golf Advisor has rated North Palm Beach Country Club as the most improved course in Palm Beach County. Through the assistance of Paul Pignato, the golf course obtained as-built plans from the 2006 renovation. With these plans, we were able to locate 21 couplers for use in watering the course. NPB Golf Advisory Board Minutes of February 10, 2020 V. DISCUSSION TOPICS Membership The Club is full with 210 members. We are sending out letters to the people on the wait list requiring a deposit of $250 in order to remain on the list. That deposit would be applied to the cost of membership when the individual’s name is reached. If they were to decline the membership, they would receive a merchandise credit in the golf shop. Lenore Dingle is sending out letters to the first fifty Village residents on the wait list, offering them a Village Restricted Resident Golf Membership. That membership will stcost $1,600 and will allow unlimited golf from May 1 until the end of daylight savings time (member needs to pay walking or cart fees). In Peak Season – memberships would pay Resident Fee Rates. Lorraine Rocamboli asked a question regarding what would constitute a Village Resident. That matter will be referred to the Village Attorney for an answer. Suspension of Member Allan reported that he is requesting that the Village Council to approve a 45-day suspension for a member of the Club. That person has had two previous warnings concerning his conduct. He has called members of the staff names. He has confronted a cart girl and he has been put out of the Farmer’s Table on several occasions for inappropriate conduct towards female staff of the restaurant. The Golf Advisory Board approved the recommendation 5-0. Allan also reported that for the next annual budget of the course, he will include a new position for an additional assistant golf professional. NPB Golf Advisory Board Minutes of February 10, 2020 VI. ADJOURNMENT The meeting was adjourned at 7:05 p.m. The next meeting will be March 16, 2020. Minutes by Curtis L. Witters, Secretary. VILLAGE OF NORTH PALM BEACH VILLAGE MANAGER’S OFFICE TO: Honorable Mayor and Council FROM: Andrew D. Lukasik, Village Manager DATE: April 9, 2020 SUBJECT: RESOLUTION – Approval of a Payment to Peacock and Lewis in the amount of $81,650.00 for Additional Construction Administration Services associated with the Country Club Clubhouse Project. Village Staff is recommending Village Council consideration and adoption of a Resolution approving the payment of $81,650 to Peacock and Lewis for additional Construction Administration services associated with the completion of the North Palm Beach Country Club Clubhouse. Through the adoption of Resolution No. 2016-83 on November 10, 2016, the Village Council approved an Agreement with Peacock and Lewis for Final Schematic Design through Construction Administration Services in the amount of $962,068.00. Through the adoption of Resolution No. 2017-99 on October 26, 2017, the Village Council approved an Agreement for additional Architectural and Design Services in the amount of $316,260.00 following the Council’s decision to accommodate a different, smaller restaurant design. The Council also approved and additional payment to Peacock and Lewis in the amount of $25,525.000 for conceptual design plan services. Based on the Village’s Contract with The Weitz Co. for construction of the new Clubhouse, Peacock and Lewis anticipated that Construction Administration Services would be completed by the end of July, 2019. However, with the delays associated with the construction of the Clubhouse, predominately related to problems with the concrete pours, Peacock and Lewis has spent considerably more time working with Village Staff and the Contractor to inspect work and resolve construction issues. The cost of these additional Construction Administration Services from August 1, 2019 to March 1, 2020 is $81,650. It should be noted that Peacock and Lewis has submitted invoices for other additional services in the amount of $324,376.25 that are in dispute. Village Staff will work to resolve this dispute for Council’s consideration at a future date. The attached Resolution has been prepared/reviewed by the Village Attorney for legal sufficiency. Account Information: Fund Department Account Number Account Description Amount Capital Projects Country Club Clubhouse Project K7600-66210 Construction and Major Renovation $81,650.00 Recommendation: Village Staff requests Council adoption of the attached Resolution approving a payment to Peacock and Lewis for additional Construction Administration Services in the amount of $81,650.00, with funds expended from Account No. K7600-66210 (Clubhouse – Construction and Major Renovation), in accordance with Village policies and procedures. RESOLUTION 2020-___ A RESOLUTION OF THE VILLAGE COUNCIL OF THE VILLAGE OF NORTH PALM BEACH, FLORIDA, APPROVING PAYMENT TO PEACOCK + LEWIS ARCHITECTS AND PLANNERS, LLC FOR ADDITIONAL CONSTRUCTION ADMINISTRATION SERVICES RELATING TO THE COUNTRY CLUB CLUBHOUSE; PROVIDING FOR CONFLICTS; AND PROVIDING FOR AN EFFECTIVE DATE. WHEREAS, through the adoption of Resolution 2016-83 on November 10, 2016, the Village Council approved an Agreement for Final Schematic Design through Construction Administration Services (“Agreement”) with Peacock + Lewis Architects and Planners, LLC (“Peacock + Lewis”) for the new North Palm Beach Country Club facility; and WHEREAS, through the adoption of Resolution 2017-99 on October 26, 2019, the Village Council approved an Agreement for Additional Architectural and Design Services based on changes to the design concept initiated by the Village, as well as an additional payment for conceptual design services; and WHEREAS, due to construction delays primarily related to issues with the concrete pours, Peacock + Lewis performed additional Construction Administration Services beyond those that were originally contemplated in the Agreement, and the Village Council wishes to compensate Peacock + Lewis for these services; and WHEREAS, the Village Council determines that the adoption of this Resolution is in the best interests of the residents and citizens of the Village of North Palm Beach. NOW, THEREFORE, BE IT RESOLVED BY THE VILLAGE COUNCIL OF NORTH PALM BEACH, FLORIDA as follows: Section 1. The foregoing recitals are ratified as true and are incorporated herein. Section 2. The Village Council hereby approves payment to Peacock + Lewis Architects and Planners, LLC in the amount of $81,650.00 for additional Construction Administration services for the new Clubhouse, with funds expended from Account No. K7600-66210 (Country Club Project – Construction/Major Renovation – Contractual Services). Section 3. All resolutions or parts of resolution in conflict with this Resolution are hereby repealed to the extent of such conflict. Section 4. This Resolution shall take effect immediately upon adoption. PASSED AND ADOPTED THIS _____ DAY OF ________________, 2020. (Village Seal) MAYOR ATTEST: VILLAGE CLERK VILLAGE OF NORTH PALM BEACH FINANCE DEPARTMENT TO: Honorable Mayor and Council THRU: Andrew D. Lukasik, Village Manager FROM: Samia Janjua, Finance Director DATE: April 9, 2020 SUBJECT: RESOLUTION – Acceptance of Fiscal Year 2019 Audit Report The September 30, 2019 year-end CAFR (Comprehensive Annual Financial Report) will be distributed by our auditors at this coming week’s Council meeting. 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 Village government. This annual financial report reflects continuing improvement in the Village’s financial operations and overall financial condition. On March 11th, the Independent Auditors from Nowlen, Holt & Miner P.A. presented the FY2019 “Annual Financial Report” to the Village’s Audit Committee. The “bound” Comprehensive Annual Financial Report will be provided for review prior to the meeting and an electronic version will be made available to the public on the Village’s Webpage upon formal acceptance by Village Council. There is no fiscal impact. The attached Resolution has been prepared/reviewed for legal sufficiency by the Village Attorney. Recommendation: Village Staff recommends Council consideration and approval of the attached Resolution authorizing the Mayor and Village Clerk to accept the Comprehensive Annual Financial Report prepared by the Auditor for the fiscal year ending September 30, 2019 and to file the report with the state as required by law. RESOLUTION 2020- A RESOLUTION OF THE VILLAGE COUNCIL OF THE VILLAGE OF NORTH PALM BEACH, FLORIDA, ACCEPTING THE COMPREHENSIVE ANNUAL FINANCIAL REPORT PREPARED BY THE VILLAGE AUDITOR FOR THE FISCAL YEAR ENDING SEPTEMBER 30, 2019 AND AUTHORIZING ITS FILING WITH THE STATE; AND PROVIDING FOR AN EFFECTIVE DATE. WHEREAS, as required by Chapter 218, Florida Statutes, the Village Council selected the firm of Nowlen, Holt & Miner, P.A. (“Auditor”) to prepare a Comprehensive Annual Financial Report, including an audit report, for the fiscal year ending September 30, 2019; and WHEREAS, the Village Council wishes to accept the annual financial report and authorize its filing with the State as required by law. NOW, THEREFORE, BE IT RESOLVED BY THE VILLAGE COUNCIL OF NORTH PALM BEACH, FLORIDA as follows: Section 1. The foregoing recitals are ratified as true and correct and are incorporated herein. Section 2. The Village Council hereby authorizes the Mayor and Village Clerk to accept the Comprehensive Annual Financial Report prepared by the Auditor for the fiscal year ending September 30, 2019 and to file said report with the state as required by law. Section 3. This Resolution shall take effect retroactive to March 31, 2020. PASSED AND ADOPTED THIS ______ DAY OF , 2020. (Village Seal) MAYOR ATTEST: VILLAGE CLERK Village of North Palm Beach, FL Comprehensive Annual Financial Report Fiscal year ended September 30, 2019 The Village of North Palm Beach, Florida COMPREHENSIVE ANNUAL FINANCIAL REPORT Fiscal Year Ended September 30, 2019 Prepared by: Finance Department Samia Janjua Director of Finance THE VILLAGE OF NORTH PALM BEACH, FLORIDA FINANCIAL STATEMENTS SEPTEMBER 30, 2019 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 Auditor’s 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 Position - 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 Changes in Total OPEB liability ....................................................................................... 78 Schedule of Changes in Net Pension Liability – General Employees Retirement Fund ....................... 79 Schedule of Changes in Net Pension Liability – Fire and Police Retirement Fund .............................. 81 Schedules Contributions and Investment Returns – Retirement Funds ............................................... 83 Notes to the Schedule of Contributions ................................................................................................ 84 Schedule of Revenues, Expenditures, and Changes in Fund Balance - Budget and Actual - General Fund ................................................................................................. 85 Notes to the Budgetary Required Supplementary Information ............................................................ 86 THE VILLAGE OF NORTH PALM BEACH, FLORIDA FINANCIAL STATEMENTS SEPTEMBER 30, 2019 TABLE OF CONTENTS (Continued) OTHER SUPPLEMENTARY INFORMATION: Schedule of Departmental Expenditures– Budget and Actual – General Fund .................................... 87 Combining Balance Sheet – Nonmajor Governmental Funds .............................................................. 90 Combining Statement of Revenues, Expenditures, and Changes in Fund Balances - Nonmajor Governmental Funds ........................................................................................................ 91 Combining Statement of Net Position – Pension Trust Funds .............................................................. 92 Combining Statement of Changes in Fiduciary Net Position – Pension Trust Funds ........................... 93 Combining Statement of Agency Net Position .................................................................................... 94 Combining Schedule of Changes in Agency Net Position .................................................................... 95 Schedule of Revenues and Departmental Expenses – Budget and Actual – Country Club Fund – Budgetary Basis ............................................................ 96 STATISTICAL SECTION Net Position by Component ................................................................................................................. 97 Changes in Net Position ....................................................................................................................... 98 Fund Balances, Governmental Funds ................................................................................................. 100 Changes in Fund Balances, Governmental Funds .............................................................................. 101 Net Assessed Value and Estimated Actual Value of Taxable Property ............................................. 103 Property Tax Rates - Direct and Overlapping Governments............................................................... 104 Principal Property Taxpayers ............................................................................................................. 105 Property Tax Levies and Collections ................................................................................................. 106 Ratios of Outstanding Debt by Type ................................................................................................... 107 Direct and Overlapping Governmental Activities Debt ...................................................................... 108 Pledged-Revenue Coverage ................................................................................................................ 109 Demographic and Economic Statistics ................................................................................................ 110 Principal Employers ........................................................................................................................... 111 Full-Time Equivalent Village Government Employees by Function .................................................. 112 Operating Indicators by Function/Program ........................................................................................ 113 Capital Asset Statistics by Function/Program ..................................................................................... 114 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 ................................ 115 Management Letter in Accordance with the Rules of the Auditor General of the State of Florida ............................................................................................................................... 117 Independent Accountant’s Report on Compliance with Section 218.415, Florida Statutes .................................................................................................... 120 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 26, 2020 The Honorable Mayor, Members of the Village Council and Residents Village of North Palm Beach, Florida The Finance Department and Village Manager's Office are pleased to submit the Comprehensive Annual Financial Report (CAFR) for the Village of North Palm Beach, Florida for the fiscal year ended September 30, 2019. 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 unmodified (“clean”) opinion on the Village of North Palm Beach’s financial statements for the year ended September 30, 2019. 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. The 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 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; • determining compliance with finance-related laws, rules and regulations; and • evaluating the efficiency and effectiveness of Village operations. ii 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 is known for its abundance of waterfront property (lakes, canals, and the Atlantic Ocean) as well as other assets: Country Club with a golf course, driving range, pool, tennis courts and restaurant; four parks; marina; library; police and fire rescue stations; and a public elementary school. 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 Generally Accepted Accounting Principles (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 which 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). iii The level of budgetary control (that is, the level at which expenditures cannot legally exceed the appropriated amount) is established at the fund level. The Village maintains an encumbrance accounting system as one technique of accomplishing budgetary control. All expenditures, other than personal services, are controlled by a procurement system which encumbers purchase orders against the budget prior to issuance to vendors. All appropriations lapse at year end; however, encumbrances specifically designated to be carried over to the subsequent year are re-appropriated in the following year. ECONOMIC OUTLOOK Property Values The Village obtains a major portion of its annual General Fund financial resources (63%) 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, there has been significant residential property investment in the community over the past few years. Both the State and South Florida, in particular, are enjoying resurgence in real estate activity, which has translated into annual 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 to provide 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 have 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. The Village, with the assistance of the Village’s Audit Committee, 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, along with the Village’s Investment Advisor, continue to explore other investment opportunities that will improve yields in future years while still ensuring the safety of our investments. 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 2018, the Village introduced a high deductible insurance plan along with funding health saving accounts, is exploring the use of contractual health clinic services for its employees and 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 providers. iv The impact of personnel salaries and benefits in the coming years will have a broad and continuing effect on future Village financing and service priorities in the areas of staffing, public services, and public projects. Approximately 64% of the annual budget is allotted for wages and fringe benefits. INITIATIVES AND FUTURE PROJECTS The FY 2020 budget reflects a renewed commitment and predictable funding for community infrastructure in areas such as roadways, neighborhood sidewalks, lighting, public buildings, and park facilities. Following a period of deferred maintenance activities during the recession, the use of revenue from a County-wide sales surtax is facilitating the Village’s ability to develop a financially feasible capital program. The Community Development Department provides Planning and Zoning, Code Compliance and Building services. The Department continues to strive to improve its level of services for plan reviews, building inspections, code enforcement and zoning compliance. The Department will move ahead with the conversion of paper records to electronic records storage, resulting in a significant savings of staff’s time and effort in records retrieval. In 2016, following the completion of a design charrette process in which North Palm Beach residents described their vision for the community’s future, the Village adopted the Citizens’ Master Plan. It is anticipated that a viable Master Plan that identifies the highest and best use of properties on U.S. 1 and Northlake Boulevard will encourage investment in the community that will create an enhanced sense of place, active uses and an increase in Village revenues. The Village is actively implementing the Master Plan strategies as well as undertaking additional planning initiatives to include the Evaluation and Appraisal Report for the Comprehensive Plan. Significant initiatives include the creation of a form-based code to encourage redevelopment in the Village’s commercial corridors, which will be completed in 2020, the study of the US1 Corridor to determine if two of the roadway’s six lanes should be repurposed for landscaping and/or bicycle and pedestrian traffic and the redesign of the US1 and Prosperity Farms Road Bridges to serve as architectural features signaling the entry into the community. The Parks and Recreation Department continues to offer programs for all age groups at each of its six (6) facilities. Anchorage Park will host diverse events in the upcoming year to include: movies in the park, food truck nights, organized volleyball leagues, the Village’s annual fishing tournament, and Heritage Day. The North Palm Beach Country Club Pool and Tennis facilities plan to offer a wide variety of leagues, training opportunities and tournaments as well as the July 4th fireworks program and a 5k race. In addition, the Department will provide youth sports training and leagues in baseball, soccer, flag football, volleyball, lacrosse and basketball. The Department will continue to sponsor bus trips throughout the year, ranging from local day activities to weekend excursions to Key West. The Department will review all of its programming and facilities as part of a Parks and Recreation Needs Assessment, which is scheduled to be completed during the fiscal year. The Public Works Department is tasked with the oversight and management of Village sanitation services and maintenance of the Village’s infrastructure, parks, buildings, equipment, and the roadways. The Department’s current focus is on enhancing infrastructure maintenance standards and meeting the community’s expectation regarding the appearance of public spaces during the coming year. Department staff will also be analyzing all critical infrastructure needs in our facilities and throughout the community to determine future project priorities and identify opportunities to improve performance through the use of best maintenance practices. Public Works will address currently identified infrastructure projects such as drainage improvements, road maintenance, and parks improvements in the five (5) year Capital Improvement Plan (CIP). v The Police Department has focused on improvements in community policing/neighborhood outreach by conducting community meetings and high visibility directed patrols that incorporate a high rate of officer interaction with Village residents. The Department continues to emphasize the importance of reducing crime in the Village through the use of advanced technology to analyze crime trends and deter future crime using predictive policing concepts. Additional crime suppression and community engagement efforts through the use of Transitional Neighborhood Teams and the interdepartmental Neighborhood Enhancement Team (NET). Two full-time officers were funded in the FY 2018 budget in order to create this program, which allows officers and other members of the NET team to concentrate their efforts in neighborhoods requiring assistance in achieving their quality of life goals. The Department continues to benchmark itself against the best policing practices by participating in the CALEA (Commission on Accreditation for Law Enforcement Agencies) accreditation process. The Department was re-accredited in July, 2017. Fire Rescue has experienced an annual increase in calls for service since 2011 with the majority (77%) being medical in nature. The Department continues to support the annual Hands-Only CPR initiative as a charter provider. The fire inspector provides existing business inspections, fire code enforcement, and plans review and site inspections of new projects. This proactive approach to fire prevention has resulted in decreased incidents of commercial responses. Through the CIP, the Department anticipates replacing older apparatus on a rolling schedule that will allow it to maintain high quality service to the Village’s residents and guests. The Human Resources Department is committed to fostering a work environment that attracts quality applicants and encourages employees to perform at the highest level in support of the Village's goals and objectives. In accordance with the Council's direction to "continuously improve the way the Village operates", the Department establishes policies and procedures that are consistent across all administrative functions while remaining current, relevant and compliant with local, state and federal labor and personnel laws. Having implemented a new performance evaluation system for personnel in the Fire Rescue Department in 2016, Human Resources expanded the pay for performance initiative to encompass other employee groups in 2017, specifically to include Police Department personnel. The Department will enhance the initiative’s effectiveness by focusing evaluation criteria on those that best measure employees’ adherence to the organization’s values, their ability to perform their key functions and, in some cases, their display of extraordinary effort or innovation to achieve the Village Council’s goals for the organization or the community. In addition, Human Resources will focus on offering diverse training programs and related opportunities to staff members in the areas of Business Etiquette and Professionalism, Cultural Diversity, Conflict Resolution, Office Safety, Progressive Discipline, Drug- Free/Alcohol-Free Workplace, and Leadership skills.. Lastly, the Department, in its role of managing Workers' Compensation (W/C) cases in conjunction with the W/C insurance carrier, is working with the Gehring Group's risk management team, as well as the newly established Employee Safety Committee, to seek solutions to reduce instances of injury, lower W/C costs and provide a more positive claims experience for all stakeholders. The Library is currently streamlining processes and procedures, upgrading outdated equipment, and reorganizing various departments. Additionally, renovations within the Library to create a better experience for children and teens were recently completed. The Information Technology Department has been involved in numerous projects over the last year: preparing the Village for Phase Two of the LPR (License Plate Recognition) systems, Police laptop encryption, Country Club renovation and installations for temporary facilities, Library computer lab automation, and upgrading the Village’s phone system. The IT Department also implemented ArchiveSocial to retrieve and archive all of the Village’s social media outlets. vi The North Palm Beach Country Club recently completed a $19 million dollar reconstruction that includes a new clubhouse and ancillary facilities for members, residents, guests and the general public. The new facility introduces a successful independent restaurant, Farmer’s Table, as its new caterer and food and beverage provider, a splash park for juniors, updated administrative offices, a new pool deck with updated shade structures, multipurpose rooms, locker rooms and an updated golf shop sizable to the demand of a golf course that supports approximately 42,000+ annual rounds. The goal of the Golf Operations Department is to provide first class service at the Jack Nicklaus Signature municipal facility and expand upon its broad range of programming to juniors, women, seniors, beginners, families as well as avid golfers. The Clubhouse opened in December, 2019. The Golf Operations Department also worked with Nicklaus Design Group to implement a project to renovate the golf course and upgrade the driving range turf and lighting at a cost of $1.7 million. The driving range opened in February, 2019. The course opened to members and guests in mid-March and opened to the public in April, 2019. For Fiscal Year 2019-2020, the Village Council reiterated its primary objective to sustain the Village as the “Best Place to Live Under the Sun.” As part of that objective, the Council developed the following goals to guide the budget process: 1. Financial Sustainability 2. Beautification and Quality of Life 3. All Neighborhoods as Desirable Places to Live 4. Waterways and Recreation 5. Strong Local Economy 6. Improve Mobility 7. Organizational Excellence 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. To substantiate that this requirement has been met, the independent auditor's report is included in this report. Awards 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, 2018, the 31st consecutive year the Village has received this award. The Certificate of Achievement is a prestigious national award, recognizing conformance with the highest standards for preparation of state and local government financial reports. In order to be awarded a Certificate of Achievement, the governmental unit must publish an easily readable and efficiently organized CAFR. This report satisfied both GAAP and applicable legal requirements. A Certificate of Achievement is valid for a period of one year only. We expect our current CAFR will meet the Certificate of Achievement Program’s requirements and we are submitting it to the GFOA to determine its eligibility for another certificate. vii The GFOA also presented a Distinguished Budget Presentation Award to the Village for its annual budget for the fiscal year beginning October 1, 2018, the 11th consecutive year the Village has received this award (previously this award had not been received since 1995). The Distinguished Budget Presentation Award is a prestigious national award that recognizes conformance with the highest principles of governmental budgeting. In order to qualify for the Distinguished Budget Presentation Award, a governmental unit must publish a budget document that meets program criteria as a policy document, as an operations guide, as a financial plan, and as a communication device. Acknowledgements The preparation of this report would not have been possible without the efficient and dedicated services from the entire staff of the Finance Department. We would like to thank the Mayor and Council for their unfailing support for maintaining the highest standards of professionalism in the management of the Village of North Palm Beach’s finances. Respectfully submitted, Andrew D. Lukasik Village Manager viii THE VILLAGE OF NORTH PALM BEACH, FLORIDA PRINCIPAL VILLAGE OFFICIALS SEPTEMBER 30, 2019 Title Name Mayor Darryl C. Aubrey Vice Mayor Mark Mullinix President Pro Tem David B. Norris Council Member Susan Bickel Council Member Deborah Searcy Village Manager Andrew D. Lukasik Director of Finance Samia Janjua Village Clerk Jessica Green ix x Government Finance Officers Association Certificate of Achievement for Excellence in Financial Reporting Presented to Village of North Palm Beach Florida For its Comprehensive Annual Financial Report for the Fiscal Year Ended September 30, 2018 Executive Director/CEO FINANCIAL SECTION 1 INDEPENDENT AUDITOR'S 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, 2019, 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 from 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 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. 2 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, 2019, 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 Postemployment Benefit trend information on pages 78 through 84, and budgetary comparison information on pages 85 through 86 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. 3 The other supplementary information is the responsibility of management and was derived from and relate directly to the underlying accounting and other records used to prepare the basic 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 basic 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 is 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 11, 2020, 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 the effectiveness of the Village of North Palm Beach, Florida’s 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 11, 2020 4 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, 2019. 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 2019 2018 (Decrease)Page # Total net position $27.10 $24.30 $2.80 14 Unrestricted net position available for future use $4.34 $6.71 ($2.37)14 Governmental net position $26.84 $22.57 $4.27 14 Total revenues from all sources $30.31 $28.40 $1.91 15 Governmental revenues $28.90 $26.13 $2.77 15 Total cost of all Village programs $27.51 $27.10 $0.41 15 Governmental revenues over (under) expenses $4.27 $1.94 $2.33 16 General fund revenues over (under) expenditures $2.43 $1.11 $1.32 19 General fund unassigned fund balance $8.18 $7.28 $0.90 17 As a percent of general fund expenditures 33.21% 30.92% 2.29% Country Club revenues over (under) expenses ($1.47)($0.64)($0.83)22 Change in total long-term debt for the Village ($0.86)($0.99) $0.13 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, deferred outflows of resources, liabilities and deferred inflows of resources 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 assets plus deferred outflows of resources and liabilities plus deferred inflows of resources, is 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 seven individual governmental funds: the General Fund, one Capital Projects Fund, and five 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, the Infrastructure Surtax Fund, and the Capital Projects Fund all 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. 6 • 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. • 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 positon may serve over time as a useful indicator of a government's financial position. In the case of the Village, the net position was $27.10 million at the close of the most recent fiscal year. A significant portion of the Village's net position (82.04%) reflects its investment in capital assets (e.g., land, buildings, machinery, and equipment), less any related debt still outstanding, which was used to acquire those assets. The Village uses these capital assets to provide services to citizens; consequently, these assets are not available for future spending. 7 Table 2 Village of North Palm Beach Net Position (In Thousands) Governmental Business-type Activities Activities Total 2019 2018 2019 2018 2019 2018 Assets: Current and other assets 21,156$ 28,457$ (2,661)$ (1,053)$ 18,495$ 27,404$ Capital assets 32,329 18,361 5,040 4,996 37,369 23,357 Total assets 53,485 46,818 2,379 3,943 55,864 50,761 Deferred outflows of resources:2,572 2,782 1 - 2,573 2,782 Liabilities: Current liabilities 5,415 2,030 415 161 5,830 2,191 Long-term liabilities 20,306 20,973 1,672 1,996 21,978 22,969 Total liabilities 25,721 23,003 2,087 2,157 27,808 25,160 Deferred inflows of resources:3,492 4,025 34 54 3,526 4,079 Net positon: Net investement in capital assets 18,814 15,429 3,422 3,056 22,236 18,485 Restricted 526 485 526 485 Unrestricted 7,504 6,659 (3,162) (1,325) 4,342 5,334 Total net position 26,844$ 22,573$ 260$ 1,731$ 27,104$ 24,304$ Governmental Activities The cost of all governmental activities this year was $24.64 million. As shown on Table 3, Changes in Net Position, those who directly benefited from the programs paid for $4.07 million of this cost and $24.83 million was financed through general revenues. Governmental activities increased the Village's net position by $4.27 million, thereby accounting for 100% of the total increase in the net position of the Village. Additional detail is shown in Table 3, which follows on the subsequent page. 8 Table 3 Village of North Palm Beach Changes in Net Position (In Thousands) Activities Total 2019 2018 2019 2018 2019 2018 Revenues: Program revenues: Charges for services 4,073$ 3,571$ 1,407$ 2,255$ 5,480$ 5,826$ Operating grants and contributions 395 422 395 422 Capital grants and contributions 808 10 808 10 General revenues: Property taxes 16,185 15,003 16,185 15,003 Local option gas taxes 307 302 307 302 Local option infrastructure surtax 923 880 923 880 Utility service taxes 2,522 2,512 2,522 2,512 Sales and use taxes 1,449 1,413 1,449 1,413 Franchise taxes 1,353 1,294 1,353 1,294 Investment earnings 812 376 14 812 390 Miscellaneous 80 269 80 269 Gain on asset disposals 75 75 Total revenues 28,907 26,127 1,407 2,269 30,314 28,396 Expenses: Program expenses: General Government 3,313 3,214 3,313 3,214 Public Safety 10,505 10,046 10,505 10,046 Public Works 5,604 5,911 5,604 5,911 Community Development 1,686 1,459 1,686 1,459 Leisure Services 3,038 3,058 3,038 3,058 Interest on long-term debt 490 500 490 500 Country Club 2,879 2,913 2,879 2,913 Total expenses 24,636 24,188 2,879 2,913 27,515 27,101 Increase (decrease) in net position 4,271 1,939 (1,472) (644) 2,799 1,295 Net position - beginning of year 22,573 20,634 1,732 2,376 24,305 23,010 Net position - end of year 26,844$ 22,573$ 260$ 1,732$ 27,104$ 24,305$ 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 Services of Services of Services of Services General government 3,313$ (3,129)$ 3,214$ (2,997)$ Public safety 10,505 (9,133) 10,046 (9,179) Public works 5,604 (5,053) 5,911 (5,385) Community development 1,686 114 1,459 37 Leisure services 3,038 (1,668) 3,058 (2,160) Interest on long-term debt 490 (490) 500 (500) 24,636$ (19,359)$ 24,188$ (20,184)$ 2019 2018 At the end of the current year, as compared to the prior year, the total cost of services increased by $0.45 million. This increase is primarily due to increased personnel related costs. Business-Type Activities At the end of the current year, as compared to the prior year, Charges for Services (revenues) for the Business-type activities decreased by $0.85 million and expenses decreased by $0.03 million. Net positon of the Proprietary Fund (Country Club) at September 30, 2019, were $0.26 million. Net position decreased by $1.47 million. The negative impact in the Village’s Business-type activities was largely due to the Country Club clubhouse construction and golf course renovation projects. The closure of both facilities disrupted the Country Club’s ability to deliver services and resulted in significant revenue loss in the Country Club. 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 $15.38 million, a $10.98 million decrease from the 2018 fund balance of $26.36 million. Approximately 78% of the combined ending fund balance ($12.07 million) constitutes unrestricted (unassigned/assigned) fund balance, which is available for spending at the government's discretion. The remainder of fund balance ($3.32 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 $8.18 million while the General Fund total fund balance was $11.61 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 33% of total general fund expenditures, while total fund balance represents 47% of that same amount. The general fund unassigned fund balance ($8.18 million) represents an increase of $0.90 million from the 2018 unassigned general fund balance of $7.28 million. Key elements of this increase are listed below: • Revenues for Franchise Fees and Utility Service Taxes were budgeted on prior year trends ($3.71 million). For the current year, the Village received $3.87 million; • Due to discounts from prompt payments, State law requires that only 95% of the gross ad- valorem taxes be budgeted as revenue ($15.94 million). For the current year, the Village received $16.18 million); and • Revenues for Licenses and Permits were budgeted on prior year trends ($0.98) million. For the current year, the Village received $1.52 million. This is primarily a result of an increase in Building Permits. 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. 11 General Fund Budgetary Highlights Differences between the original budget and the final amended budget were $1,218,375 and can be briefly summarized as follows: • Vehicle Leases ($826,943) • Prior Year Open Purchase Order Carryover ($391,432) General Fund Budget Analysis As shown on pages 85-86 of this report, in the Schedule of Departmental Expenditures – Budget and Actual, there was an overall favorable budget to actual cost variance of $1,164,884 in General Fund Departmental Expenditures. This is primarily a result of several unfinished projects at fiscal year-end that were carried over into the following fiscal year ($565,578); savings in personnel costs ($287,056) as a result of several position vacancies; and savings in operating costs ($115,673) as a result of departments holding the line on operating costs. 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 $3.73 million, a $13.33 million decrease over the 2018 fund balance of $17.07 million. This is primarily due to the Country Club Clubhouse project activity. Infrastructure Surtax Fund The Village’s Infrastructure Surtax Fund is used to account for surtax proceeds. On November 8, 2016 PBC voters approved a one-cent sales surtax, raising the sales tax from 6% to 7% effective January 1, 2017. The surtax will sunset on December 31, 2026. The use of surtax proceeds is restricted to, among other things, the financing, planning and construction of infrastructure. 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 $0.46 million. 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, 2019 and 2018 amounts to $37.37 million and $23.36 million, respectively (net of accumulated depreciation). 12 Table 5 Village of North Palm Beach Capital Assets (In Thousands) Governmental Business-type Activities Activities Total 2019 2018 2019 2018 2019 2018 Land 2,056$ 2,056$ 1,051$ 1,051$ 3,107$ 3,107$ Construction in progress 17,716 5,334 228 1,591 17,944 6,925 Buildings and improvements 26,045 23,973 8,072 6,538 34,117 30,511 Furniture, fixtures and equipment 7,520 8,253 49 212 7,569 8,465 Total assets 53,337 39,616 9,400 9,392 62,737 49,008 Less accumulated depreciation (21,008) (21,255) (4,359)(4,396)(25,367) (25,651) Net position 32,329$ 18,361$ 5,041$ 4,996$ 37,370$ 23,357$ Additional information on the Village's capital assets can be found in Note 5 on pages 46 through 47 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 $15.40 million; $13.78 million in the governmental activities and $1.62 million in business-type activities. None of the Village’s long-term debt comprises debt backed by the full faith and credit of the government. Table 6 Village of North Palm Beach Outstanding Debt (In Thousands) Governmental Business-type Activities Activities Total 2019 2018 2019 2018 2019 2018 Loans payable 13,515$ 14,320$ 1,619$ 1,939$ 15,134$ 16,259$ Capital leases 266 266 - Total 13,781$ 14,320$ 1,619$ 1,939$ 15,400$ 16,259$ Additional information on the Village's debt can be found in Note 6 on pages 48 through 51 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 $8.18 million during the current 2019 fiscal year. The increase is primarily due to the increase in several revenue categories. The FY 2019/20 Budget reflects continued improvement to citizen services, public safety, and public facility maintenance while emphasizing improved community appearance and financial stability. Most importantly, the budget provides necessary resources for the Village of North Palm Beach to maintain and further improve services to our residents without increasing the millage rate and without having to use the General Fund Unassigned Fund Balance. The Village’s operating millage rate was not increased; it remained flat at 7.5000 mils. The Village’s financial plan represents an aggressive approach to adequately maintain infrastructure and address gaps in the organization in order to deliver services to the community while completing the North Palm Beach Country Club clubhouse construction and golf course renovation projects. Continued work to build a new clubhouse and renovate the golf course will result in reduced Country Club revenues due to the closure of both facilities at different times and the need for the General Fund to support debt service associated with the projects until the Country Club returns to full operation. Increasing property valuations and continued state and national economic growth, however, will blunt the impact of these short-term facility closures to the annual financial plan. 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, 2019 Governmental Business-type Activities Activities Total Assets Cash and cash equivalents 5,253,207$ 1,326$ 5,254,533$ Investments 11,576,187 11,576,187 Accounts receivable 331,231 15,820 347,051 Accrued interest 39,380 39,380 Inventories 147,568 30,869 178,437 Prepaids 4,612 - 4,612 Due from other governments 1,093,970 1,093,970 Internal balances 2,709,735 (2,709,735) Capital assets: Nondepreciable 19,772,446 1,279,129 21,051,575 Depreciable (net of depreciation)12,556,670 3,761,646 16,318,316 Total assets 53,485,006 2,379,055 55,864,061 Deferred outflows of resources Other postemployement benefits related items 66,754 1,502 68,256 Pension related items 2,505,289 2,505,289 Total deferred outflows of resources 2,572,043 1,502 2,573,545 Liabilities Accounts payable 4,382,255 366,041 4,748,296 Retainage payable 453,673 453,673 Accrued liabilities 227,690 227,690 Unearned revenue 196,539 48,695 245,234 Accrued interest payable 154,922 154,922 Noncurrent liabilities: Due within one year 1,957,044 347,348 2,304,392 Due in more than one year 18,348,800 1,325,219 19,674,019 Total liabilities 25,720,923 2,087,303 27,808,226 Deferred inflows of resources Deferred revenue 231,152 231,152 Other postemployement benefits related items 1,490,386 33,526 1,523,912 Pension related items 1,770,874 1,770,874 Total deferred inflows of resources 3,492,412 33,526 3,525,938 Net position Net investment in capital assets 18,814,116 3,422,142 22,236,258 Restricted for: Recreation 4,274 4,274 Infrastructure 460,230 460,230 Library 20,175 20,175 Other purposes 40,857 40,857 Unrestricted 7,504,062 (3,162,414) 4,341,648 Total net position 26,843,714$ 259,728$ 27,103,442$ 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, 2019 Charges for Functions/Programs Expenses Services Government: Governmental activities General government 3,312,770$ 147,104$ Public safety 10,505,278 687,905 Public works 5,603,991 538,459 Community development and planning 1,685,525 1,799,878 Leisure services 3,037,981 899,164 Interest expense 489,988 Total governmental activities 24,635,533 4,072,510 Business-type activities - country club 2,879,376 1,406,563 Total business-type activities 2,879,376 1,406,563 Total government 27,514,909$ 5,479,073$ 15 Program Revenues Net (Expense) Revenue and Operating Capital Changes in Net Position Grants and Grants and Governmental Business-type Contributions Contributions Activities Activities Total 36,553$ $ (3,129,113)$ $ (3,129,113)$ 329,213 354,951 (9,133,209) (9,133,209) 11,751 (5,053,781) (5,053,781) 114,353 114,353 17,859 453,242 (1,667,716) (1,667,716) (489,988) (489,988) 395,376 808,193 (19,359,454) (19,359,454) (1,472,813)(1,472,813) (1,472,813)(1,472,813) 395,376$ 808,193$ (19,359,454) (1,472,813) (20,832,267) General Revenues: Taxes: Property taxes 16,185,283 16,185,283 Local option gas taxes 307,130 307,130 Local option infrastruture surtax 922,937 922,937 Utility service taxes 2,521,954 2,521,954 Franchise taxes 1,352,464 1,352,464 Sales and use taxes 1,448,423 1,448,423 Investment income - unrestricted 811,915 804 812,719 Miscellaneous 80,266 80,266 Total general revenues 23,630,372 804 23,631,176 Change in net position 4,270,918 (1,472,009) 2,798,909 Net position, beginning of year 22,572,796 1,731,737 24,304,533 Net position, end of year 26,843,714$ 259,728$ 27,103,442$ See notes to the financial statements. 16 THE VILLAGE OF NORTH PALM BEACH, FLORIDA Balance Sheet Governmental Funds September 30, 2019 Infrastructure Capital Nonmajor Total Surtax Projects Governmental Governmental General Fund Fund Funds Funds Assets Cash and cash equivalents $ 429,542$ 4,814,323$ 9,342$ 5,253,207$ Investments 11,576,187 11,576,187 Accounts receivable 331,231 331,231 Accrued interest 39,380 39,380 Inventories 147,568 147,568 Prepaids 4,612 4,612 Due from other funds 432,257 2,799,958 3,232,215 Advances to other funds 2,637,644 2,637,644 Due from other governments 561,660 83,459 448,851 1,093,970 Total assets 15,730,539$ 513,001$ 7,614,281$ 458,193$ 24,316,014$ Liabilities, deferred inflows of resources, and fund balances Liabilities Accounts payable 446,764$ 52,771$ 3,882,720$ $ 4,382,255$ Accrued liabilities 227,690 227,690 Due to other funds 2,683,839 476,285 3,160,124 Unearned revenue 196,539 196,539 Total liabilities 3,554,832 52,771 3,882,720 476,285 7,966,608 Deferred inflows of resources Deferred revenue 231,152 231,152 Unavailable revenue 333,738 400,000 733,738 Total deferred inflows of resources 564,890 400,000 964,890 Fund balances Nonspendable: Inventories and prepaids 152,180 152,180 Advances to other funds 2,637,644 2,637,644 Restricted for: Country club project Recreation 195 4,079 4,274 Infrastructure 460,230 460,230 Streets and roads 37,773 37,773 Police 311 311 Library 20,175 20,175 Other purposes 2,773 2,773 Assigned for: Small business grants 16,435 16,435 Subsequent year's expenditures 565,573 565,573 Special revenue funds 3,507 3,507 Capital project funds 3,727,482 3,727,482 Unassigned 8,177,758 (421,599)7,756,159 Total fund balances 11,610,817 460,230 3,731,561 (418,092)15,384,516 Total liabilities, deferred inflows of resources, and fund balances 15,730,539$ 513,001$ 7,614,281$ 458,193$ 24,316,014$ 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 September 30, 2019 Fund balances - total governmental funds 15,384,516$ 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 53,336,746$ Less: accumulated depreciation (21,007,630) 32,329,116 Governmental funds report revenues when earned and available. However, in the Statement of Activities, revenues are recongnized when earned, regardlesss of availability. Current year unavailable grant revenue 733,738 Accrued interest payable (154,922) Retainage payable (453,673) Revenue notes (13,515,000) Capital leases (265,522) Net pension liability (3,568,305) Other postemployement benefits (1,605,572) Accrued compensated absences (1,351,445) (20,914,439) Other postemployement benefits deferred outflows 66,754 Other postemployement benefits deferred inflows (1,490,386) Pension related deferred outflows 2,505,289 Pension related deferred inflows (1,770,874) (689,217) Net position of governmental activities 26,843,714$ 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: Deferred outflows and inflows of resources related to pensions are applicable to future periods and, therefore, are not reported in the govenmental funds: 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, 2019 Infrastructure Capital Nonmajor Total Surtax Projects Governmental Governmental General Fund Fund Funds Funds Revenues Taxes 20,366,831$ $ $ $ 20,366,831$ Licenses and permits 1,522,913 1,522,913 Intergovernmental 1,582,513 922,937 404,945 2,910,395 Charges for services 2,399,174 2,399,174 Fines and forfeitures 100,188 100,188 Investment 573,096 8,722 230,097 811,915 Miscellaneous 510,688 510,688 Total revenues 27,055,403 931,659 230,097 404,945 28,622,104 Expenditures Current General government 3,275,570 3,275,570 Public safety 10,021,772 328,826 10,350,598 Public works 5,255,606 5,255,606 Community development and planning 1,532,428 1,532,428 Leisure services 2,664,689 2,664,689 Capital outlay 504,665 629,552 13,967,674 385,438 15,487,329 Debt service Principal 882,777 882,777 Interest 488,786 488,786 Total expenditures 24,626,293 629,552 13,967,674 714,264 39,937,783 Excess (deficiency) of revenues over (under) expenditures 2,429,110 302,107 (13,737,577) (309,319) (11,315,679) Other financing sources (uses) Capital lease proceeds 343,299 343,299 Transfers in 405,000 2,000 407,000 Transfers out (405,000) (2,000) (407,000) Total other financing sources (uses)(61,701) 403,000 2,000 343,299 Net change in fund balances 2,367,409 302,107 (13,334,577) (307,319) (10,972,380) Fund balances Beginning of year 9,243,408 158,123 17,066,138 (110,773) 26,356,896 End of year 11,610,817$ 460,230$ 3,731,561$ (418,092)$ 15,384,516$ 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, 2019 Net change in fund balances - total governmental funds (10,972,380)$ 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 15,888,345$ Less: current year depreciation (1,404,507) Net book value for retired assets (515,420) 13,968,418 The issuance of long-term debt provides current financial resources to governmental funds, while the repayment of long-term debt consumes the current financial resources of governmental funds. Neither transaction, however, has any affect on net assets of governmental activities: Capital lease proceeds (343,299) Principal payments on debt 882,777 539,478 Governmental funds report revenues when earned and available. However, in the Statement of Activities, revenues are recognized when earned, regardless of availability: Current year unavailable grant revenue 733,738 Prior year unavailable grant revenue (52,657) 681,081 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 accrued interest payable (1,202) Change in accrued retainage payable (453,673) Change in long-term compensated absences 58,735 Change in net pension liability and related deferred amounts 328,046 Change in other postemployment benefits and deferred amounts 122,415 54,321 Change in net position 4,270,918$ See notes to the financial statements. 20 THE VILLAGE OF NORTH PALM BEACH, FLORIDA Statement of Net Position Proprietary Fund September 30, 2019 Enterprise Assets Current assets Cash and cash equivalents 1,326$ Accounts receivable 15,820 Inventories 30,869 Total current assets 48,015 Non-current assets Capital assets, net 5,040,775 Total non-current assets 5,040,775 Total assets 5,088,790 Deferred outflows of resources Other postemployement benefits related items 1,502 Liabilities Current liabilities Accounts payable 366,041 Deposits Unearned revenue 48,695 Due to other funds 72,091 Compensated absences - current portion 13,358 Loans payable - current portion 333,990 Total current liabilities 834,175 Non-current liabilities Other postemployement benefits 36,117 Compensated absences 4,459 Advances from other funds 2,637,644 Loans payable 1,284,643 Total non-current liabilities 3,962,863 Total liabilities 4,797,038 Deferred inflows of resources Deferred revenueOther postemployement benefits related items 33,526 Net position Net investment in capital assets 3,422,142 Unrestricted (3,162,414) Total net position 259,728$ 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, 2019 Enterprise Operating revenue Greens fee/cart rentals/membership fees 1,011,369$ Golf shop revenues 109,563 Driving range revenues 164,020 Restaurant revenues 4,611 Miscellaneous 117,000 Total operating revenues 1,406,563 Operating expenses Golf course maintenance expenses 1,340,159 Clubhouse grounds expenses 75,854 Golf shop expenses 913,851 Food and beverage expenses 23,945 Administrative and general 62,858 Insurance 27,034 Depreciation and amortization 325,559 Total operating expenses 2,769,260 Operating income (loss)(1,362,697) Nonoperating revenues (expenses) Interest revenue 804 Interest expense (110,116) Total nonoperating revenues (expenses)(109,312) Change in net position (1,472,009) Net position - beginning 1,731,737 Net position - ending 259,728$ 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, 2019 Enterprise Cash flows from operating activities: Receipts from customers 1,347,351$ Payments to suppliers for goods or services (1,595,318) Payments to employees for services (518,533) Net cash used by operating activities (766,500) Cash flows from non-capital financing activities: Receipts from other funds 937,644 Net cash provided by non-capital financing activities:937,644 Cash flows from capital and related financing activities: Advance from the general fund 328,553 Principal paid on long term debt (320,733) Interest paid on debt (110,116) Acquisition of capital assets (370,253) Net cash provided (used) by capital and related financing activities (472,549) Cash flows from investing activities: Interest and dividends on investments 804 Net increase (decrease) in cash and cash equivalents (300,601) Cash and cash equivalents at beginning of year 301,927 Cash and cash equivalents at end of year 1,326$ Reconciliation of operating income to net cash provided by operating activities: Operating income (loss)(1,362,697)$ Adjustments to reconcile operating income to net cash provided by operating activities: Depreciation and amortization 325,559 Change in OPEB liability and related deferred amounts (29,333) Change in assets and liabilities Increase in accounts receivable (15,457) Decrease in inventory 49,067 Decrease in prepaids 8,345 Increase in accounts payable 297,030 Increase in compensated absences payable 4,741 Decrease in deferred revenue (43,755) Total adjustments 596,197 Net cash provided by operating activities (766,500)$ See notes to the financial statements. 23 THE VILLAGE OF NORTH PALM BEACH, FLORIDA Statement of Fiduciary Net Position Fiduciary Funds September 30, 2019 Employee Retirement Agency Funds Funds Assets Cash and cash equivalents 565,449$ 381,508$ Investments: Domestic common equity securities 13,009,522 International common equity securities 2,708,368 U.S. Government and agencies 3,322,069 Municipal bonds 272,814 Corporate bonds 3,024,595 Fixed income exchange traded funds 3,352,878 Equity exchange traded funds 1,006,351 Fixed income mutual funds 2,606,625 Equity mutual funds 9,757,199 Real estate investment fund 2,705,074 Money market mutual funds 1,122,114 Accrued interest and dividends 60,103 Accounts receivable 74,977 Accounts receivable, broker-dealers 459,175 Prepaids 1,737 Total assets 44,049,050 381,508 Liabilities Accounts payable 71,098 Accounts payable, broker-dealers 579,312 Due to others 381,508 Total liabilities 650,410 381,508 Net position restricted for pensions 43,398,640$ $ 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, 2019 Employee Retirement Funds Additions Contributions Employer 1,276,263$ Plan members 343,643 State on-behalf payments 328,826 Total contributions 1,948,732 Investment earnings Dividends and interest 1,297,605 Net increase in fair value of investments 441,822 Total investment earnings 1,739,427 Less: investment expenses 230,595 Total net investment earnings 1,508,832 Total additions 3,457,564 Deductions Administrative expense 122,103 Benefits 1,360,750 Total deductions 1,482,853 Change in net position 1,974,711 Net position - beginning 41,423,929 Net position - ending 43,398,640$ See notes to the financial statements. 25 THE VILLAGE OF NORTH PALM BEACH, FLORIDA Notes to the Basic Financial Statements September 30, 2019 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 pension trust funds in the fiduciary funds financial statements. 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, 2019 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 90 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. 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, 2019 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. Infrastructure Surtax Fund The Infrastructure Surtax Fund is special revenue fund used to account for the surtax proceeds which are restricted to, among other things, the financing, planning and construction of infrastructure. 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, 2019 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 Cash and cash equivalents consist of petty cash, deposits in checking accounts, money market mutual funds, investments with Florida Prime managed by the State of Florida, State Board of Administration and Florida Education Trust Fund (FEITF) sponsored by Florida School Boards Association and the Florida Association of District School Superintendents For purposes of determining cash equivalents, the Village has defined its policy concerning the treatment of short-term investments to include investments with a maturity of three months or less when purchased, as cash equivalents if management does not plan to reinvest the proceeds. Short-term investments that management intends to rollover into similar investments are considered part of the investment portfolio and are classified as investments. THE VILLAGE OF NORTH PALM BEACH, FLORIDA Notes to the Basic Financial Statements September 30, 2019 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 as required by generally accepted accounting principles. The fair value of an investment is the amount that the Village could reasonably expect to receive for it in a current sale between a willing buyer and a willing seller, other than in a forced or liquidation sale. Purchases and sales of investments are recorded on a trade date basis. 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 first-in, first-out basis (FIFO). 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. Payments made to vendors for services that will benefit future periods are reported as prepaid items using the consumption method by recording an asset for the prepaid amount and reflecting an expenditure in the year in which the services are consumed. THE VILLAGE OF NORTH PALM BEACH, FLORIDA Notes to the Basic Financial Statements September 30, 2019 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. Donated capital assets, donated works of art and similar items, and capital assets received in a service concession arrangement are recorded at acquisition value. 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. 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, 2019 32 NOTE 1 – SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES (Continued) D. Assets, Liabilities, and Net Position or Equity (Continued) Deferred Outflows and Inflows of Resources The statement of net position includes a separate section for deferred outflows of resources. This represents the usage of net position applicable to future periods and will not be recognized as expenditures until the future period to which it applies. The Village reports deferred pension items in connection with its two Retirement Systems. These deferred pension charges are either (a) recognized in the subsequent period as a reduction of the net pension liability (which includes pension contributions made after the measurement date) or (b) amortized in a systematic and rational method as pension expense in future periods. The statement of net position also includes a separate section, listed below total liabilities, for deferred inflows of resources. This represents the acquisition of net position applicable to future periods and will not be recognized as revenue until the future period to which it applies. The Village currently has three types of deferred inflows. The first is local business tax revenues received prior to the period for which the taxes are levied, these are recognized as income in the period for which they are levied. The second is deferred pension items in connection with its two Retirement Systems. The third is deferred OPEB items in connection to Other Post- Employment Benefits. These items are amortized in a systemic and rational method and recognized as a reduction of expense in future periods. Unearned Revenue The Village reports unearned revenue on its statements of net position and governmental funds balance sheet. Unearned revenue arises when resources are obtained prior to revenue recognition. In subsequent periods, when revenue recognition criteria are met the unearned 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. THE VILLAGE OF NORTH PALM BEACH, FLORIDA Notes to the Basic Financial Statements September 30, 2019 33 NOTE 1 – SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES (Continued) D. Assets, Liabilities, and Net Position or Equity (Continued) 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 are deferred and amortized over the life of the bonds using the effective interest method. 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 In the fund financial statements, governmental funds report fund balance classifications that comprise a hierarchy based primarily on the extent to which the Village is bound to honor constraints on the specific purposes for which amounts in those funds can be spent. Fund balance is reported under the following categories: • 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. THE VILLAGE OF NORTH PALM BEACH, FLORIDA Notes to the Basic Financial Statements September 30, 2019 34 NOTE 1 – SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES (Continued) D. Assets, Liabilities, and Net Position or Equity (Continued) Fund Equity (Continued) • 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 $7,500 for improvements to small business properties. • Unassigned fund balance is the residual fund balance classification for the general fund. It is also used to report negative fund balances in other governmental funds. 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, deferred inflows and outflows, 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. 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. THE VILLAGE OF NORTH PALM BEACH, FLORIDA Notes to the Basic Financial Statements September 30, 2019 35 NOTE 2 – STEWARDSHIP, COMPLIANCE, AND ACCOUNTABILITY A. Budgetary Data 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 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 months of July, August and September, the Council holds public meetings to obtain taxpayer comments. • Upon completion of the public hearings and prior to October 1st, a final operating budget is legally enacted through the passage of an ordinance. Estimated beginning fund balances are considered in the budgetary process. • 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 assigned fund balance and do not constitute expenditures or liabilities because the commitments will be reappropriated and honored during the subsequent year. The General Fund had $565,573 and the Capital Projects Fund had $2,345,005 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 1st of each year during the budget process. THE VILLAGE OF NORTH PALM BEACH, FLORIDA Notes to the Basic Financial Statements September 30, 2019 36 NOTE 2 – STEWARDSHIP, COMPLIANCE, AND ACCOUNTABILITY (Continued) B. Property Taxes (Continued) 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, 2019, was 7.5000 ($7.5000 for each $1,000 of assessed valuation). 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 1st 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, 2019, unpaid delinquent taxes are not material and have not been recorded by the Village. NOTE 3 – DEPOSITS AND INVESTMENTS Deposits As of September 30, 2019, the carrying amount of the Village’s deposits (including fiduciary funds) was $2,712,907 and the bank balances totaled $2,995,113. 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 OF NORTH PALM BEACH, FLORIDA Notes to the Basic Financial Statements September 30, 2019 37 NOTE 3 – DEPOSITS AND INVESTMENTS (Continued) 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 $ 2,712,907 Petty cash 3,483 Investments 57,948,896 Total deposits and investments $60,665,286 Presented in the statement of net position Governmental activities Cash and cash equivalents $ 5,253,207 Investments 11,576,187 Business-type activities Cash and cash equivalents 1,326 Total statements of net position 16,830,720 Presented in the statement of fiduciary net position Pension trust funds Cash and cash equivalents 565,449 Investments 42,887,609 Agency funds Cash and cash equivalents 381,508 Total fiduciary funds 43,834,566 Total deposits and investments $60,665,286 Investments The Village categorizes its investments according to the fair value hierarchy established GASB Statement No. 72, Fair Value Measurement and Application. The hierarchy is based on valuation inputs used to measure the fair value of the asset as follows: Level 1 inputs are quoted prices in active markets for identical assets; Level 2 inputs are significant other observable inputs to include quoted prices for similar assets in active and non-active markets; Level 3 inputs are significant unobservable inputs. THE VILLAGE OF NORTH PALM BEACH, FLORIDA Notes to the Basic Financial Statements September 30, 2019 38 NOTE 3 – DEPOSITS AND INVESTMENTS (Continued) Investments (Continued) The money market mutual funds consist of investments with financial institutions in open end, institutional, money market funds complying with Securities and Exchange Commission (SEC) Rule 2a7. Rule 2a7 allows SEC registered mutual funds to use amortized cost rather than fair value to report net assets used to compute share prices if certain conditions are met. Those conditions include restrictions on the types of investments held, restrictions on the term-to- maturity of individual investments and the dollar-weighted average of the portfolio, requirements for portfolio diversification, and requirements for divestiture considerations in the event of security downgrades and defaults, and required actions if the fair value of the portfolio deviates from amortized cost by a specified amount. The Florida Public Assets for Liquidity Management (FL Palm) and Florida PRIME are external investment pools which meet the requirements with GASB Statement No. 79, Certain External Investment Pools and Pool Participants, which allows reporting the investments at amortized cost. For both funds as of September 30, 2019, there were no redemption fees or maximum transaction amounts, or any other requirements that serve to limit a participant’s daily access to 100 percent of their account value. However, the Trustees of the funds can suspend the right of withdrawal or postpone the date of payment if the Trustees determine that there is an emergency that makes the sale of a Portfolio’s securities or determination of its net asset value not reasonably practical. Money market mutual funds, FL Palm and Florida Prime are exempt from the GASB 72 fair value hierarchy disclosures. Equity securities, exchange traded funds, and mutual funds classified in Level 1 of the fair value hierarchy are valued based on prices quoted in active markets for those securities. Debt securities classified in level 2 of the fair value hierarchy are valued using a matrix pricing technique. Matrix pricing values securities based on the securities relationship to benchmark quoted prices. The American Core Realty Fund, LLC is a diversified open-end commingled fund that invests primarily in high quality core income-producing office, industrial, retail, and multi-family properties. This fund is an alternative investment vehicle valued using the net asset value (NAV) provided by the investment manager of this fund. The NAV is based on the value of the underlying assets owned by the fund minus its liabilities and then divided by the number of shares or percentage of ownership outstanding. The NAV’s unit price is quoted on a private market that is not active. Investments valued at NAV are excluded from the fair value hierarchy because the valuation is not based on actual market inputs but rather is quantified using the fund’s reported NAV. THE VILLAGE OF NORTH PALM BEACH, FLORIDA Notes to the Basic Financial Statements September 30, 2019 39 NOTE 3 – DEPOSITS AND INVESTMENTS (Continued) Investments (Continued) Redemptions from the fund may be made quarterly upon ten days’ notice. The units that are subject to a redemption notice may be redeemed in full or in installments on a pro-rata basis as funds become available for such redemptions and are subject to the availability of cash flow arising from investment transactions, sales and other fund operations occurring in the normal course of business. The fund is not required to liquidate or encumber assets or defer investments in order to satisfy redemption requests. The value of this alternative investment is not necessarily indicative of the amount that could be realized in a current transaction. The fair value may differ significantly from the value that would have been used had a ready market for the underlying fund existed, and the differences could be material. Future confirming events will also affect the estimates of fair value and the effect of such events on the estimated fair value could be material. The Florida Public Assets for Liquidity Management FL Palm – Term Series invests in highly rated securities including U.S. Treasury securities, U.S. government agency securities, deposits including certificates of deposit and commercial paper Securities are rated at least ‘A/F1’ by Fitch Ratings or equivalent. The term portfolio is a fixed-rate, fixed-term portfolio with a maximum term of one year. The maturity profile of the term portfolio is managed to meet preset redemptions of the portfolio’s participants. Upon investing in the program, a participant selects a planned maturity date on which the portfolio seeks to produce a share price of at least $1.00 for the participant that redeems on said date. Participants may request premature redemption, but the portfolio may charge significant penalties for any redemption prior to the agreed-upon redemption date and net asset value may be more or less than $1.00 per share. Redemptions will be made seven days after the request is received. The Village’s investments in FEITF Term Series are as follows: Maturity Interest Rate Amount 12/13/19 2.62% $ 2,000,000 This fund is an alternative investment vehicle valued using the net asset value (NAV) provided by the investment manager of this fund. The NAV is based on the value of the underlying assets owned by the fund minus its liabilities and then divided by the number of shares or percentage of ownership outstanding. The NAV’s unit price is quoted on a private market that is not active. Investments valued at NAV are excluded from the fair value hierarchy because the valuation is not based on actual market inputs but rather is quantified using the fund’s reported NAV. THE VILLAGE OF NORTH PALM BEACH, FLORIDA Notes to the Basic Financial Statements September 30, 2019 40 NOTE 3 – DEPOSITS AND INVESTMENTS (Continued) Investments (Continued) As of September 30, 2019, the Village held the following investments: Weighted Fair Value Measurement Average Maturity Fair Value Level 1 Level 2 Governmental Funds U.S. Government and Agency 2.12 Years $ 3,446,195 $ $ 3,446,195 Asset Backed Securities 4.11 Years 2,495,567 2,495,567 Municipal Bonds 1.50 Years 101,455 101,455 Domestic Corporate Bonds 1.85 Years 2,102,498 2,102,498 International Corporate Bonds 1.62 Years 1,377,852 1,377,852 Fiduciary Funds U.S. Government and Agency 15.15 Years 532,628 532,628 Asset Backed Securities 19.21 Years 2,789,441 2,789,441 Municipal Bonds 10.15 Years 272,813 272,813 Domestic Corporate Bonds 7.36 Years 2,488,412 2,488,412 International Corporate Bonds 4.73 Years 536,183 536,183 Domestic Common Equity Securities N/A 13,009,522 13,009,522 International Common Equity Securities N/A 2,708,368 2,708,368 Fixed Income ETF N/A 3,352,878 3,352,878 Equity ETF N/A 1,006,351 1,006,351 Fixed Income Mutual Funds N/A 2,606,625 2,606,625 Equity Mutual Funds N/A 9,757,199 9,757,199 48,583,987 $ 32,440,943 $ 16,143,044 Investments Reported at NAV Governmental Funds FL Palm Term Series N/A 2,000,000 Fiduciary Funds American Core Realty Fund N/A 2,705,074 Investments Reported at Amortized Cost: Governmental Funds Money Market Mutual Funds N/A 52,620 Florida Prime 33 Days 1,382,042 FL Palm 39 Days 1,914,147 Fiduciary Funds Money Market Mutual Funds N/A 1,311,026 Total Investments $ 57,948,896 THE VILLAGE OF NORTH PALM BEACH, FLORIDA Notes to the Basic Financial Statements September 30, 2019 41 NOTE 3 – DEPOSITS AND INVESTMENTS (Continued) Investments (Continued) Credit risk – Credit risk is the risk that an issuer or other counter party to an investment will not fulfill its obligations. The Village’s investment policies limit its investments to high quality investments to control credit risk. The table below outlines the Village’s credit ratings for investments with certain investments not specifically rated by both S&P and Moody’s. S&P Moody’s Fair Investments: Rating Rating Value Governmental Funds U.S. Government and Agency AA+ Aaa $ 3,446,195 Asset Backed Securities AAA & NR Aaa & NR 2,495,567 Municipal Bonds AA- Aa2 101,455 Domestic Corporate Bonds AAA to BBB+ Aaa to BAA1 2,102,498 International Corporate Bonds AAA to A- Aaa to A2 1,377,852 Money Market Mutual Funds NR NR 52,620 Florida Prime AAAm NR 1,382,042 FL Palm AAAm NR 1,914,147 FL Palm Term Series NR* NR 2,000,000 Fiduciary Funds U.S. Government and Agency AA+, NR Aaa 532,628 Asset Backed Securities AAA, NR Aaa, NR 2,789,441 Municipal Bonds AAA to AA- Aaa to Aa3 272,813 Domestic Corporate Bonds AAA to BBB- Aaa to Baa3 2,488,412 International Corporate Bonds AAA to A- Aaa to A1 536,183 Common Equity Securities NR NR 15,717,890 Exchange Traded Funds NR NR 4,359,229 Mutual Funds NR NR 12,363,824 American Core Realty Fund NR NR 2,705,074 Money Market Mutual Funds NR NR 1,311,026 Total Investments $ 57,948,896 * Rated AAAf by Fitch. 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 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 THE VILLAGE OF NORTH PALM BEACH, FLORIDA Notes to the Basic Financial Statements September 30, 2019 42 NOTE 3 – DEPOSITS AND INVESTMENTS (Continued) Investments (Continued) 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. Custodial credit risk – 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 or collateral securities that are in the possession of an outside party. The Village’s investments are held by a third-party custodian, not in the name of the Village. Investments are held in book entry form at the Federal Reserve by Depository Trust Company (DTC) via the custodian. The custodian further segregates the Village’s investments in their trust accounting system. The investments 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. Investing in Real Estate. – The Village is subject to the risks inherent in the ownership and operation of real estate. These risks include, among others, those normally associated with changes in the general economic climate, trends in the industry including creditworthiness of tenants, competition for tenants, changes in tax laws, interest rate levels, the availability of financing and potential liability under environmental and other laws. 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, 2019 43 NOTE 3 – DEPOSITS AND INVESTMENTS (Continued) Investments (Continued) Authorized Investments (Continued) The Village is authorized to invest its funds as follows: 1. Banks, Qualified Public Depositories with a collateral pledge level of twenty-five percent or fifty percent; 2. U.S Treasury obligations and obligations the principal and interest of which are backed or guaranteed by the full faith and credit of the U.S Government; 3. Debt obligations, participations or other instruments issued or fully guaranteed by any U.S. Federal agency, instrumentality or government sponsored enterprise, 4. Supra-Nationals, U.S. dollar denominated debt obligations of a multilateral organization of governments where the U.S. is a shareholder and voting member with a minimum credit quality rating of A-1/P-1, AA-/Aa3 or equivalent, 5. U.S. dollar denominated corporate notes, bonds or other debt obligations issued or guaranteed by a domestic or foreign corporation, financial institution, non-profit or other entity with a minimum credit quality rating of A-1/P-1, A-/A3 or equivalent, 6. Obligations, including both taxable and tax - exempt, issued or guaranteed by any State, territory or possession of the United States, political subdivision, public corporation, authority, agency board, instrumentality or other unit of local government of any State or territory with a minimum credit quality rating of SP-1/MIG 1, A-/A3 or equivalent, 7. Mortgage- backed securities (MBS), backed by residential, multi-family or commercial mortgages, that are issued or fully guaranteed as to principal and interest by a U.S. Federal agency or government sponsored enterprise, including but not limited to pass- throughs, collateralized mortgage obligations (CMOs) and REMICs, 8. Asset-backed securities (ABS) whose underlying collateral consists of loans, leases or receivables, including but not limited to auto loans /leases, credit card receivables, student loans, equipment loans /leases, or home-equity loans with a minimum credit quality rating of A-1/P-1, AAA/Aaa or equivalent, 9. U.S. dollar denominated commercial paper issued or guaranteed by a domestic or foreign corporation, company, financial institution, trust or other entity, including both unsecured debt and asset-backed programs with a minimum credit quality rating of A-1/P-1 or equivalent, 10. Shares in open-end and no-load money market mutual funds, provided such funds are registered under the Investment Company Act of 1940 and operate in accordance with Rule 2a-7 with a minimum credit quality rating of AAAm/Aaa-mf or equivalent, 11. State, local government or privately- sponsored investment pools that are authorized pursuant to state law with a minimum credit quality rating of AAAm/Aaa-mf or equivalent. THE VILLAGE OF NORTH PALM BEACH, FLORIDA Notes to the Basic Financial Statements September 30, 2019 44 NOTE 3 – DEPOSITS AND INVESTMENTS (Continued) Investments (Continued) Authorized Investments (Continued) The Village General Employees’ Retirement Fund is authorized to invest its funds as follows: 1. Interest-bearing time deposits in qualified public depositories, as defined in Chapter 280, Florida Statutes; 2. 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; 3. Securities and Exchange Commission registered money market funds with the highest credit quality rating from a nationally recognized rating agency minimum credit quality rating of A-1 from S&P or P-1 from Moody’s; 4. Obligations issued by the U.S. Government or obligations guaranteed by agencies or instrumentalities of the U.S. Government; 5. Foreign Securities, including convertible bonds, convertible preferred issues and preferred stock; 6. Equities, including publicly traded REITS, commodities, convertible bonds, convertible preferred issues and preferred stock. Foreign security convertibles are limited to those that settle in U.S. dollars and are traded on one or more of the nationally recognized national exchanges. 7. Bonds 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 the issues are traded on any one (1) or more of the recognized national stock exchanges or over the counter and holds a minimum credit rating of BBB from S&P or Baa from Moody’s, except that up to 20% of the fixed income portfolio may be held in securities that do not meet this criteria. The weighted average quality rating of the portfolio will be A or better and the effective duration of the portfolio shall be kept within 20% of Barclays Aggregate Index; 8. Comingled stock, bond or money market funds. 9. 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; 10. Other investments authorized by law or by ordinance by the Village. THE VILLAGE OF NORTH PALM BEACH, FLORIDA Notes to the Basic Financial Statements September 30, 2019 45 NOTE 3 – DEPOSITS AND INVESTMENTS (Continued) Investments (Continued) Authorized Investments (Continued) 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. Notwithstanding 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. Fixed income investments defined as preferred issues and fixed income securities provided all issues shall meet or exceed S&P’s A or Moody’s A credit rating; 6. 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; 7. Bonds issued by the State of Israel; 8. Purchases in commingled real estate funds. THE VILLAGE OF NORTH PALM BEACH, FLORIDA Notes to the Basic Financial Statements September 30, 2019 46 NOTE 4 – RECEIVABLES Receivables at September 30, 2019, were as follows: General Fund Country Club Utility franchise fees & taxes $ 301,427 $ Conroy Drive assessment 1,270 Other accounts receivable 28,534 15,820 Total accounts receivable $ 331,231 $ 15,820 NOTE 5 – CAPITAL ASSETS Capital Assets activity for the year ended September 30, 2019, was as follows: Primary Government Governmental Activities: Beginning Balance Additions Deletions Ending Balance Capital assets not being depreciated: Land $ 2,055,889 $ $ $ 2,055,889 Construction in progress 5,334,234 15,124,647 (2,742,324) 17,716,557 Capital assets being depreciated: Buildings 9,367,764 640,443 (77,285) 9,930,922 Improvements 14,604,652 2,488,474 (979,491) 16,113,635 Machinery and equipment 2,867,072 (447,913) 2,419,159 Vehicles 5,386,308 377,105 (662,829) 5,100,584 Total at historical cost: 39,615,919 18,630,669 (4,909,842) 53,336,746 Less accumulated depreciation: Buildings (6,194,964) (271,416) 77,285 (6,389,095) Improvements (10,055,950) (536,504) 801,703 (9,790,751) Machinery and equipment (1,923,806) (181,519) 440,043 (1,665,282) Vehicles (3,080,501) (415,068) 333,067 (3,162,502) Total accumulated depreciation (21,255,221) (1,404,507) 1,652,098 (21,007,630) Governmental activities capital assets, net $ 18,360,698 $ 17,226,162 $ (3,257,744) $ 32,329,116 THE VILLAGE OF NORTH PALM BEACH, FLORIDA Notes to the Basic Financial Statements September 30, 2019 47 NOTE 5 – CAPITAL ASSETS (Continued) Depreciation expense was charged to functions/programs of the primary government as follows: Governmental activities: General government $ 89,020 Public safety 476,750 Public works 393,494 Community development 32,741 Leisure services 412,502 Total depreciation expense, governmental activities $ 1,404,507 Business-type activities: Beginning Balance Additions Deletions Ending Balance Capital assets not being depreciated: Land $ 1,051,311 $ $ $ 1,051,311 Construction in progress 1,591,482 360,296 (1,723,960) 227,818 Capital assets being depreciated: Buildings 465,122 465,122 Improvements 6,073,079 1,723,960 (190,355) 7,606,684 Machinery and equipment 162,420 9,957 (123,577) 48,800 Vehicles 49,154 (49,154) Total at historical cost: 9,392,568 2,094,213 (2,087,046) 9,399,735 Less accumulated depreciation: Buildings (465,122) (465,122) Improvements (3,733,303) (319,180) 190,355 (3,862,128) Machinery and equipment (150,097) (5,190) 123,577 (31,710) Vehicles (47,965) (1,189) 49,154 Total accumulated depreciation (4,396,487) (325,559) 363,086 (4,358,960) Business-type activities capital assets, net $ 4,996,081 $ 1,768,654 $ 1,723,960 $ 5,040,775 THE VILLAGE OF NORTH PALM BEACH, FLORIDA Notes to the Basic Financial Statements September 30, 2019 48 NOTE 6 – LONG TERM LIABILITIES Change in Long-Term Liabilities Long-term liability activity for the year ended September 30, 2019, was as follows: Beginning Balance Additions Reductions Ending Balance Amount Due Within One Year Governmental activities: Direct borrowings and direct placements Loans payable $ 14,320,000 $ $ (805,000) $ 13,515,000 $ 835,000 Capital leases 343,299 (77,777) 265,522 60,296 Total 14,320,000 343,299 (882,777) 13,780,522 895,296 OPEB (see Note 13) 1,399,684 205,888 1,605,572 Net pension liability (see Note 8) 3,843,124 (274,819) 3,568,305 Compensated absences payable 1,410,180 1,281,999 (1,340,734) 1,351,445 1,061,748 Total $ 20,972,988 $ 1,831,186 $(2,498,330) $ 20,305,844 $ 1,957,044 Business-type activities: Direct borrowings and direct placements Loans payable $ 1,939,366 $ $ (320,733) $ 1,618,633 $ 333,990 OPEB (see Note 13) 43,290 (7,173) 36,117 Compensated absences payable 13,076 9,679 (4,938) 17,817 13,358 Total $ 1,995,732 $ 9,679 $ (332,844) $ 1,672,567 $ 347,348 Governmental activities other postemployment benefit obligations, compensated absences and net pension liabilities are expected to be paid out of the general fund. Loans Payable from Direct Borrowings and Direct Placements $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 VILLAGE OF NORTH PALM BEACH, FLORIDA Notes to the Basic Financial Statements September 30, 2019 49 NOTE 6 – LONG TERM LIABILITIES (Continued) $4,893,673 Promissory Notes (Continued) 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, 2019, the principal amount outstanding was $1,618,689 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 2020 $ 333,990 $ 64,169 $ 398,159 2021 348,241 49,918 398,159 2022 362,904 35,255 398,159 2023 378,185 19,974 398,159 2024 195,369 4,074 199,443 $ 1,618,689 $ 173,390 $ 1,792,079 The loan agreement requires that pledged revenues cover 100% of the debt service due plus the expenses, other than non-cash expenses, of owning and operating the Country Club. Due to the Golf Course and Country Club being closed for part of the year for renovations this requirement was not met. The loan agreement includes a provision that upon the occurrence of any event of default, the bank may declare all obligations of the Village under the Loan Agreement and the Note to be immediately due and payable without further action of any kind and upon such declaration the Note and the interest accrued thereon shall become immediately due and payable. The Bank has not made any such claim. Non-Ad Valorem Revenue Notes, Series 2017 The Village Council adopted Resolution No. 2017-22 authorizing the issuance of Non-Ad Valorem Revenue Notes, Series 2017, in one or more Series in the aggregate Principal amount not to exceed $15,000,000 to finance the cost of constructing and equipping a new country club clubhouse. The Notes are secured by a covenant to budget and appropriate legally available non- ad valorem revenues of the Village. Series 2017A The Series 2017A is a tax-exempt issuance for $8,900,000 with an interest rate of 3.19%, which is subject to adjustment in the event of taxability of the interest on this note. Interest is payable on June 1 and December 1 of each year beginning December 1, 2017. Principal payments start June 1, 2025 with the final payment on June 1, 2032. THE VILLAGE OF NORTH PALM BEACH, FLORIDA Notes to the Basic Financial Statements September 30, 2019 50 NOTE 6 – LONG TERM LIABILITIES (Continued) Non-Ad Valorem Revenue Note, Series 2017 (Continued) This note may be prepaid in whole but not in part at any time after June 1, 2025, at a redemption price equal to 100% of the principal amount outstanding plus accrued interest through the redemption date. As of September 30, 2019, the principal amount outstanding was $8,900,000 and was for the purpose of governmental-type activities. Series 2017B The Series 2017B is a taxable issuance for $6,100,000 with an interest rate of 3.78%. Interest is payable on June 1 and December 1 of each year beginning December 1, 2017. Principal payments start June 1, 2018 with the final payment on June 1, 2025. This note may not be prepaid. As of September 30, 2019, the principal amount outstanding was $5,420,000 and was for the purpose of governmental-type activities. Annual debt service requirements to maturity for the Series 2017A and 2017B are as follows: Year Ending Principal Interest Total 2020 $ 835,000 $ 458,357 $ 1,293,357 2021 865,000 426,794 1,291,794 2022 900,000 394,097 1,294,097 2023 935,000 359,981 1,294,981 2024 970,000 324,734 1,294,734 2025 - 2029 5,360,000 1,106,464 6,466,464 2030 - 2032 3,650,000 235,263 3,885,263 $ 13,515,000 $ 3,305,690 $ 16,820,690 The loan agreements include a provision that upon the occurrence of any event of default, the notes shall bear interest at the Default Rate so long as the event of default shall be continuing. The Default rate for the Series 2017A is 6% and the rate for the Series 2017B is 7%. Governmental Activities Capital Leases The Village entered into capital lease agreements for the purpose of financing the purchase of vehicles. Principal and interest payments are due annually. As of September 30, 2019, the principal amounts outstanding were $265,522 and the net book value of the equipment was $319,207. Amortization of leased equipment under capital assets is included with depreciation expense. The interest rates on the leases range from 6.45% to 7.25% The lease agreements include a provision that upon the occurrence of any event of default, the lessor may retake possession of the equipment under lease. THE VILLAGE OF NORTH PALM BEACH, FLORIDA Notes to the Basic Financial Statements September 30, 2019 51 NOTE 6 – LONG TERM LIABILITIES (Continued) Governmental Activities Capital Leases (Continued) Annual debt service requirements to maturity are as follows: Year Ending Principal Interest Total 2020 $ 60,296 $ 17,913 $ 78,209 2021 63,833 14,376 78,209 2022 68,304 9,905 78,209 2023 73,089 5,120 78,209 $ 265,522 $ 47,314 $ 312,836 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. In the fiscal year ending September 30, 2014, SERMA was dissolved and the outstanding claims were transferred to the Village’s current workman’s compensation administrator. As part of the dissolution, the Village received $61,100 from SERMA as its portion of the claims reserve balance, this was recorded as an accrued liability in the General Fund. At this time, the Village believes that the $18,790 currently recorded in the General Fund is adequate to cover the outstanding claims. 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. The Village is 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. However, under certain circumstances, a plaintiff can seek to recover damages in excess of statutory limits by introducing a claims bill to the Florida Legislature. The limits addressed in Florida Statutes do not apply to claims filed in federal courts. 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, 2019 52 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 (F&P), covering firefighters and police officers, and Village of North Palm Beach General Employees Retirement Fund (GERF), 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 issued separate stand-alone financial statements for the year ended September 30, 2019, the report may be obtained from the Village Clerk, at the Village of North Palm Beach, 501 U.S. Highway 1, North Palm Beach, Florida 33408. The General Employees Plan does not issue separate financial statements. Each plan has its own board that acts as plan administrator and trustee: The Fire and Police Retirement Fund Board of Trustees consists of five members (5); four (4) of whom were elected by a majority of the members of the plan. Two (2) of the elected members are certified firefighters of the Village and two (2) are certified police officers of the Village. The fifth member of the board is a legal resident of the Village and is appointed by the Village council. The General Employees Retirement Board consists of five members (5); two (2) of whom were employees elected by a majority of the members of the plan, two (2) of the members is a legal resident of the Village and appointed by the Village council, the two (2) council appointed members of the Board shall appoint a member of the general public who has never been employed by the Village to serve as the fifth member of the 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. The plans’ fiduciary net position have been determined on the same basis used by the pension plans. 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. Investments Concentrations. There were no investments representing concentrations of 5% or more of net plan assets in investments that are not issued or guaranteed by the U.S. government. THE VILLAGE OF NORTH PALM BEACH, FLORIDA Notes to the Basic Financial Statements September 30, 2019 53 NOTE 8 – EMPLOYEE RETIREMENT PLANS (Continued) PLAN DESCRIPTION, INVESTMENT AND CONTRIBUTION INFORMATION The following schedule is provided for general information purposes only and is derived from the respective actuarial reports and Village information for the two retirement plans. 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, 2018: GERF F&P Inactive Plan Members or Beneficiaries currently receiving benefits 33 27 Inactive Plan Members entitled to but not yet receiving benefits 38 13 Active Plan Members 32 55 Total 103 95 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. 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, 2019 54 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 the 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, 2019 55 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. Asset Allocation. The plan’s adopted asset allocation policy as of September 30, 2019, is as follows: Asset Class Target Allocation Domestic equity 45% International equity 15 Domestic bonds 40 Total 100% Rate of Return. For the year ended September 30, 2019, the annual money-weighted rate of return on Pension Plan investments, net of pension plan investment expense, was 4.63 percent. The money-weighted rate of return expresses investment performance, net of investment expense, adjusted for the changing amounts actually invested. 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. 2015-05. 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 VILLAGE OF NORTH PALM BEACH, FLORIDA Notes to the Basic Financial Statements September 30, 2019 56 NOTE 8 – EMPLOYEE RETIREMENT PLANS (Continued) Fire and Police Retirement System (Continued) 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 2.75% of AME times the years of credited services starting 10/1/18; for years prior to 10/1/18 the percentage is 2.5% for the first 24 years, 0.0% for years 24 to 30, and 2.00% for years after 30; with a maximum benefit of 75% 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, 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. Asset Allocation. The plan’s adopted asset allocation policy as of September 30, 2019, is as follows: Asset Class Target Allocation Domestic equity 50% International equity 10 Domestic bonds 30 Real estate 10 Total 100% Rate of Return. For the year ended September 30, 2019, the annual money-weighted rate of return on Pension Plan investments, net of pension plan investment expense, was 3.13 percent. The money-weighted rate of return expresses investment performance, net of investment expense, adjusted for the changing amounts actually invested. Contributions. Firefighter members are required to contribute 5.00% of their basic compensation to the plan. Non-collectively bargained Police Officer are required to contribute 2% their basic compensation. Collectively bargained Police Officer members are required to contribute 4.00% 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 approved 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 $310,200 during the fiscal year ended September 30, 2019. THE VILLAGE OF NORTH PALM BEACH, FLORIDA Notes to the Basic Financial Statements September 30, 2019 57 NOTE 8 – EMPLOYEE RETIREMENT PLANS (Continued) All Retirement Plans Net Pension Liability. The components of net pension liability of the Village on September 30, 2019 were as follows: General Employees Fire and Police Total pension liability $ 18,093,051 $ 30,766,565 Plan fiduciary net position (16,970,487) (26,428,153) Village's net pension liability $ 1,122,564 $ 4,338,412 Plan fiduciary net position as a percentage of total pension liability 93.80% 85.90% The pension liability of the Fire and Police plan increased by $205,896 due to the discount rate going from 7.75% to 7.70% and $1,660,762 due to changes in the benefit terms, the most significant of which was a prospective increase of the benefit accrual rate to 2.75% from 2.50% for Credited Service earned after September 30, 2018 and an increase in the maximum accrued benefit to 75% AME from 60%. Actuarial Assumptions. The total pension liability was determined by an actuarial valuation as of October 1, 2018 updated to September 30, 2019 using the following actuarial assumptions applied to the September 30, 2019 measurement period. General Employees Fire and Police Inflation 2.75% 2.50% Salary increases Service based Service based Investment rate of return 6.75% 7.70% Mortality RP2000 Combined Healthy Participant, Scale BB. Female: 100% Annuitant White Collar, Male Annuitant White Collar/50% Annuitant Blue Collar Female: RP2000 Generational, 100% Combined Healthy White Collar, Scale BB Male: RP2000 Generational, 10% Combined Healthy White Collar/90% Combined Healthy Blue Collar, Scale BB THE VILLAGE OF NORTH PALM BEACH, FLORIDA Notes to the Basic Financial Statements September 30, 2019 58 NOTE 8 – EMPLOYEE RETIREMENT PLANS (Continued) All Retirement Plans (Continued) The long-term expected rate of return on pension plan investments was determined using a building-block method in which best-estimate ranges of expected future real rates of return (expected returns, net of pension plan investment expenses and inflation) are developed for each major asset class. These ranges are combined to produce the long-term expected rate of return by weighting the expected future real rates of return by the target asset allocation percentage and by adding expected inflation. Best estimates of arithmetic real rates of return for each major asset class included the pension plan’s target asset allocation as of September 30, 2019, are summarized in the following table: Asset Class Long-Term Expected Real Rate of Return General Employees Fire and Police Domestic equity 6.75% 7.50% International equity 6.50% 8.50% Domestic bonds 2.50% 2.50% Real estate N/A 4.50% Discount Rate. The discount rate used to measure the total pension liability was 6.75 percent for the General Employees Retirement Fund and 7.70 percent for the Fire and Police Retirement Fund. The projection of cash flows used to determine the discount rates assumed that plan member contributions will be made at the current contribution rate and that sponsor contributions will be made at rates equal to the difference between actuarially determined contribution rates and the member rate. Based on those assumptions, the pension plans’ fiduciary net position was projected to be available to make all projected future benefit payments of current plan members. Therefore, the long-term expected rate of return on pension plan investments was applied to all periods of projected benefit payments to determine the total pension liability. Sensitivity of the Net Pension Liability to Changes in the Discount Rate. The following presents the net pension liabilities of the Village, calculated using the discount rates above, as well as what the Village’s net pension liabilities would be if it were calculated using a discount rate that is one percentage-point lower or one percentage-point higher than the current rate. THE VILLAGE OF NORTH PALM BEACH, FLORIDA Notes to the Basic Financial Statements September 30, 2019 59 NOTE 8 – EMPLOYEE RETIREMENT PLANS (Continued) General Employees' Retirement System Current Discount 1% Decrease Rate 1% Increase 5.75% 6.75% 7.75% Village's net pension liability $ 3,636,396 $ 1,122,564 $ (949,841) Fire and Police Retirement System Current Discount 1% Decrease Rate 1% Increase 6.70% 7.70% 8.70% Village's net pension liability $ 8,931,297 $ 4,338,412 $ 577,783 All Retirement Plans The Village’s total pension liability, plan fiduciary net position, net pension liability, pension related deferred outflows and inflows, and pension expense for the fiscal year ended September 30, 2019, are reported using a measurement date of September 30, 2018. Actuarial Assumptions. The total pension liability was determined by an actuarial valuation as of October 1, 2017 updated to September 30, 2018 using the following actuarial assumptions applied to the September 30, 2018, measurement period. General Employees Fire and Police Inflation 2.75% 2.50% Salary increases Service based Service based Investment rate of return 6.75% 7.75% Mortality Female: RP2000, 100%Annuitant White Collar, Scale BB Male: RP2000, 50%Annuitant White Collar/50% Annuitant Blue Collar, Scale BB Female: RP2000 Generational, 100%Annuitant White Collar, Scale BB Male: RP2000 Generational, 10%Annuitant White Collar/90% Annuitant Blue Collar, Scale BB THE VILLAGE OF NORTH PALM BEACH, FLORIDA Notes to the Basic Financial Statements September 30, 2019 60 NOTE 8 – EMPLOYEE RETIREMENT PLANS (Continued) All Retirement Plans (Continued) The long-term expected rate of return on pension plan investments was determined using a building-block method in which best-estimate ranges of expected future real rates of return (expected returns, net of pension plan investment expenses and inflation) are developed for each major asset class. These ranges are combined to produce the long-term expected rate of return by weighting the expected future real rates of return by the target asset allocation percentage and by adding expected inflation. Best estimates of arithmetic real rates of return for each major asset class included the pension plan’s target asset allocation as of September 30, 2018, are summarized in the following table: Asset Class Target Allocation Long-Term Expected Real Rate of Return General Employees Fire and Police General Employees Fire and Police Domestic equity 45% 50% 6.75% 7.50% International equity 15 10 6.50% 8.50% Domestic bonds 40 30 2.25% 2.50% Real estate N/A 10 N/A 4.50% Total 100% 100% Discount Rate. The discount rate used to measure the total pension liability was 6.75 percent for the General Employees Retirement Fund and 7.75 percent for the Fire and Police Retirement Fund. The projection of cash flows used to determine the discount rates assumed that plan member contributions will be made at the current contribution rate and that sponsor contributions will be made at rates equal to the difference between actuarially determined contribution rates and the member rate. Based on those assumptions, the pension plans’ fiduciary net position was projected to be available to make all projected future benefit payments of current plan members. Therefore, the long-term expected rate of return on pension plan investments was applied to all periods of projected benefit payments to determine the total pension liability. THE VILLAGE OF NORTH PALM BEACH, FLORIDA Notes to the Basic Financial Statements September 30, 2019 61 NOTE 8 – EMPLOYEE RETIREMENT PLANS (Continued) General Employees' Retirement System Changes in Net Pension Liability Using a measurement date of September 30, 2018, the components of the net pension liability reported by the Village at September 30, 2019, were as follows: Total Fiduciary Net Pension Net Pension Description Liability (a) Position (b) Liability (a)-(b) Balances at September 30, 2017 $ 17,201,122 $ 15,148,684 $ 2,052,438 Changes due to: Service cost 250,072 250,072 Interest 1,162,025 1,162,025 Difference between expected and actual experience (307,977) (307,977) Changes of Assumptions Employer contributions 451,560 (451,560) Employee contributions 101,858 (101,858) Benefit payments and refunds (472,027) (472,027) Net investment income 1,190,603 (1,190,603) Administrative expenses (21,489) 21,489 Total changes 632,093 1,250,505 (618,412) Balances at September 30, 2018 $ 17,833,215 $ 16,399,189 $ 1,434,026 THE VILLAGE OF NORTH PALM BEACH, FLORIDA Notes to the Basic Financial Statements September 30, 2019 62 NOTE 8 – EMPLOYEE RETIREMENT PLANS (Continued) General Employees' Retirement System (Continued) Sensitivity of the Net Pension Liability to Changes in the Discount Rate Current Discount 1% Decrease Rate 1% Increase 5.75% 6.75% 7.75% Village's net pension liability $ 3,951,019 $ 1,434,026 $ (639,648) Pension expense and deferred outflows and inflows of resources For the fiscal year ended September 30, 2019, the Village recognized pension expense of $210,906. In addition, the Village reported deferred outflows of resources and deferred inflows of resources related to the Plan from the following sources: Deferred Deferred Outflows Inflows Description of Resources of Resources Net difference between projected and actual earnings on plan investments $ 200,236 $ 609,765 Differences between expected and actual experience 176,372 Assumption changes 2,095 Village plan contributions subsequent to the measurement date 358,152 Total $ 560,483 $ 786,137 THE VILLAGE OF NORTH PALM BEACH, FLORIDA Notes to the Basic Financial Statements September 30, 2019 63 NOTE 8 – EMPLOYEE RETIREMENT PLANS (Continued) General Employees' Retirement System (Continued) Pension expense and deferred outflows and inflows of resources (Continued) The deferred outflows of resources totaling $358,152 resulting from Village contributions to the plan subsequent to the measurement date, will be recognized as a reduction of the net pension liability in the fiscal year ended September 30, 2020. Other amounts reported as deferred outflows of resources and deferred inflows of resources related to the plan will be recognized in pension expense as follows: Year ended September 30: Amount 2020 $ (188,655) 2021 (214,613) 2022 (147,329) 2023 (33,209) 2024 Thereafter $ (583,806) Fire and Police Retirement System Sensitivity of the Net Pension Liability to Changes in the Discount Rate Current Discount 1% Decrease Rate 1% Increase 6.75% 7.75% 8.75% Village's net pension liability $ 6,026,816 $ 2,134,279 $ (1,055,685) THE VILLAGE OF NORTH PALM BEACH, FLORIDA Notes to the Basic Financial Statements September 30, 2019 64 NOTE 8 – EMPLOYEE RETIREMENT PLANS (Continued) Fire and Police Retirement System (Continued) Changes in Net Pension Liability Using a measurement date of September 30, 2018, the components of the net pension liability reported by the Village at September 30, 2019, were as follows: Total Fiduciary Net Pension Net Pension Description Liability (a) Position (b) Liability (a)-(b) Balances at September 30, 2017 $ 24,646,485 $ 22,855,799 $ 1,790,686 Changes due to: Service cost 897,280 897,280 Interest 1,922,314 1,922,314 Change in excess state money 77,905 77,905 Differences between expected and actual experience 187,041 187,041 Change of Assumptions 174,565 174,565 Employer contributions 822,951 (822,951) Employer contributions-state 308,600 (308,600) Employee contributions 224,469 (224,469) Employee contributions buy back 4,746 4,746 Benefit payments and refunds (751,317) (751,317) Net investment income 1,636,936 (1,636,936) Administrative expenses (77,444) 77,444 Total changes 2,512,534 2,168,941 343,593 Balances at September 30, 2018 $ 27,159,019 $ 25,024,740 $ 2,134,279 The pension liability of the Fire and Police plan increased by a net of $174,565 due to an assumption change in the investment rate of return from 7.80% to 7.75%. THE VILLAGE OF NORTH PALM BEACH, FLORIDA Notes to the Basic Financial Statements September 30, 2019 65 NOTE 8 – EMPLOYEE RETIREMENT PLANS (Continued) Fire and Police Retirement System (Continued) Pension expense and deferred outflows and inflows of resources For the fiscal year ended September 30, 2019, the Village recognized pension expense of $1,066,137. In addition, the Village reported deferred outflows of resources and deferred inflows of resources related to the Plan from the following sources: Deferred Deferred Outflows Inflows Description of Resources of Resources Net difference between projected and actual earnings on plan investments $ 1,060 $ Differences between expected and actual experience 324,724 168,882 Change of assumptions 372,085 815,855 Village plan contributions subsequent to the measurement date 1,246,937 Total $ 1,944,806 $ 984,737 The deferred outflows of resources totaling $1,246,937 resulting from Village contributions to the plan subsequent to the measurement date, will be recognized as a reduction of the net pension liability in the fiscal year ended September 30, 2020. Other amounts reported as deferred outflows of resources and deferred inflows of resources related to the plan will be recognized in pension expense as follows: Year ended September 30: Amount 2020 $ 173,986 2021 (75,364) 2022 (181,743) 2023 (60,774) 2024 (94,087) Thereafter (48,886) $ (286,868) THE VILLAGE OF NORTH PALM BEACH, FLORIDA Notes to the Basic Financial Statements September 30, 2019 66 NOTE 8 – EMPLOYEE RETIREMENT PLANS (Continued) All Retirement Plans Summarized information The Village’s total pension liability, plan fiduciary net position, net pension liability, pension related deferred outflows and inflows, and pension expense for the fiscal year ended September 30, 2019, using a measurement date of September 30, 2018, are as follows: General Employees Fire and Police Total Total pension liability $ 17,833,215 $ 27,159,019 $ 44,992,234 Plan fiduciary net position 16,399,189 25,024,740 41,423,929 Net pension liability 1,434,026 2,134,279 3,568,305 Deferred outflows of resources 560,483 1,944,806 2,505,289 Deferred inflows of resources 786,137 984,737 1,770,874 Pension expense 210,906 1,066,137 1,277,043 Accounts Payable 31,375 - 31,375 NOTE 9 – 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, 2019, $328,826 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, 2019 67 NOTE 10 – 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 as of September 30, 2019, is presented below. STATEMENT OF FIDUCIARY NET POSITION General Employees’ Pension Assets Cash and cash equivalents $ 193,254 Investments: Fixed income exchange traded funds 3,352,878 Equity exchange traded funds 1,006,351 Fixed income mutual funds 2,606,625 Equity mutual funds 9,757,199 Accrued dividends and interest 8,231 Accounts receivable 74,977 Total assets 16,999,515 Liabilities Accounts payable 29,028 Net position Held in trust for pension benefits and other purposes $ 16,970,487 THE VILLAGE OF NORTH PALM BEACH, FLORIDA Notes to the Basic Financial Statements September 30, 2019 68 NOTE 10 – PENSION PLAN FINANCIAL INFORMATION (Continued) STATEMENT OF CHANGES IN FIDUCIARY NET POSITION General Employees’ Pension Additions Contributions Employer $ 358,152 Plan members 97,522 Total contributions 455,674 Investment earnings Dividends and interest 558,935 Net (decrease) in the fair value of investments 211,863 Less investment expense (49,012) Total investment earnings 721,786 Total additions 1,177,460 Deductions Administration 38,690 Benefits 567,472 Total deductions 606,162 Change in net position 571,298 Net position - beginning 16,399,189 Net position - ending $ 16,970,487 NOTE 11 – DEFINED CONTRIBUTION PLAN Effective October 1, 2006, all employees of the Village may participate in one of four Money Purchase Plans that are qualified Defined Contribution Plans adopted under the provisions of Internal Revenue Code Section 401(a). The four pension plans include Village Manger, 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. If an employee terminates before becoming fully vested, forfeited amounts will be used to reduce future Village contributions. No loans are permitted by the plan. THE VILLAGE OF NORTH PALM BEACH, FLORIDA Notes to the Basic Financial Statements September 30, 2019 69 NOTE 11 – DEFINED CONTRIBUTION PLAN (Continued) 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, 2019, is listed below: Village Manager Directors General Employees Municipal Employees Employee contributions $ 4,770 $ 67,508 $ 53,306 $ 74,351 Village pension expense 23,850 121,678 166,349 82,829 Forfeitures - - 5,963 6,620 Payable as of fiscal year end - - - - 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. THE VILLAGE OF NORTH PALM BEACH, FLORIDA Notes to the Basic Financial Statements September 30, 2019 70 NOTE 12 – DEFERRED COMPENSATION PLAN ASSETS (Continued) 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 POSTEMPLOYMENT BENEFITS General Information about the OPEB Plan Effective October 1, 2016, the Village implemented Governmental Accounting Standards Board Statement 75 (GASB 75), Accounting and Financial Reporting for Postemployment Benefits Other Than Pensions, see Note 19. Retirees of the Village pay an amount equal to the actual premium for health insurance charged by the carrier. The premium charged includes an implied subsidy, as the amount charged for all participants (active employee or retiree) is the same, regardless of age. Under GASB 75, an implied subsidy is considered other post-employment benefits (OPEB). The following describes the Village’s OPEB Provisions: Plan Description The Village provides a single employer defined benefit health care plan to all of its employees and the plan is administered by the Village. The plan has no assets and does not issue a separate financial report. Benefits Provided 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 or 52; , depending on the option selected by the employee and the normal retirement age for all other Village employees is either age 60 or 65, depending on the option selected by the employee. 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. Employees Covered by Benefit Terms At September 30, 2018, the following employees were covered by benefit terms: Participants Active employees 144 Inactive employees currently receiving benefits 4 Inactive employees entitled to but not receiving benefits - Total 148 THE VILLAGE OF NORTH PALM BEACH, FLORIDA Notes to the Basic Financial Statements September 30, 2019 71 NOTE 13 – OTHER POSTEMPLOYMENT BENEFITS (Continued) Contribution Requirements: The Village does not make direct contributions to the plan on behalf of retirees. Retirees and their beneficiaries pay the same group health rates as active employees. 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 annual age-adjusted costs paid by the Village, or its active employees, for coverage of the retirees and their dependents net of the retiree’s own payments for the year. Total OPEB Liability The Village’s total OPEB liability of $1,641,689 was measured as of September 30, 2019 and was determined by the actuarial valuation as September 30, 2018 with results actuarially projected on a “no gain/no loss” basis. Actuarial Assumptions and Methods The total OPEB liability was determined using the following actuarial assumptions and other methods: Valuation Date: September 30, 2018 Measurement Date: September 30, 2019 Discount Rate: 3.58% per annum Source Bond Buyer GO 20-Bond Municipal Index Salary Increase Rate: Service based between 4% to 12.5% per annum Health Care Trend Rate: An initial rate of 8.5% decreasing by 0.5% annually to an ultimate rate of 5.0%. Inflation Rate: General 2.75% per annum Fire and Police 2.5% per annum Marriage Rate/Participation: The assumed number of eligible dependents is based on the current portions of single and family contracts in the census provided. The spousal participation assumed at retirement is 75%. Actuarial Cost Method: Entry Age Normal based on level percentage of projected salary. Amortization Method: Experience/Assumptions gains and losses are amortized over the closed period of 9 years starting on October 1, 2017, equal to the average remaining service of active and inactive plan members (who have no future service). THE VILLAGE OF NORTH PALM BEACH, FLORIDA Notes to the Basic Financial Statements September 30, 2019 72 NOTE 13 – OTHER POSTEMPLOYMENT BENEFITS (Continued) Actuarial Assumptions and Methods (Continued) Plan Participation Percentage: The participation percentage is the assumed rate of future eligible retirees who elect to continue health coverage at retirement. It is assumed that 40% of employees in the General and the Fire and Police Pension Plans and 35% in the Defined Contribution Plan elect coverage. This assumes that a one-time irrevocable election to participate is made at retirement. Mortality Rates: General and Defined Contribution Plans: RPH- 2018 Total Dataset Mortality Table fully generational using Scale MP-2018. Police and Fire Plan: RPH-2018 Blue Collar Mortality Table fully generational using Scale MP-2018 Discount Rate The Village does not have a dedicated Trust to pay retiree healthcare benefits. Per GASB 75, the discount rate is a yield or index rate for 20-year, tax-exempt municipal bonds. As a result, the calculation used a rate of 3.58%. Changes in the Total OPEB Liability Total OPEB Liability Balance at September 30, 2018 $ 1,442,974 Changes for the Year: Service Cost 113,906 Interest Cost 63,447 Changes of Assumptions and Other Inputs 78,007 Benefit Payments (56,645) Net Change in Total OPEB Liability 198,715 Balance at September 30, 2019 $ 1,641,689 THE VILLAGE OF NORTH PALM BEACH, FLORIDA Notes to the Basic Financial Statements September 30, 2019 73 NOTE 13 – OTHER POSTEMPLOYMENT BENEFITS (Continued) Changes in Assumptions The discount rate was 4.15% at 10/1/18 and 3.58% at 9/30/19, the actuarial cost method changed from Projected Unit Credit to Entry Age Normal, the mortality table was updated, and the health care trend rates were increased. Sensitivity of the Total OPEB Liability to Changes in the Discount Rate The following presents the total OPEB liability of the Village, as well as what the Village’s total OPEB liability would be if it were calculated using a discount rate that is 1-percentage-point lower or 1-percentage-point higher then the current discount rate: 1.0% Decrease Discount Rate 1.0% Increase (2.58%) (3.58%) (4.58%) Total OPEB Liability $ 1,789,450 $ 1,641,689 $ 1,507,688 Sensitivity of the Total OPEB Liability to Changes in the Healthcare Trend Rates The following presents the total OPEB liability of the Village, as well as what the Village’s total OPEB liability would be if it were calculated using healthcare cost trends that are 1-percentage- point lower or 1-percentage-point higher (then the current healthcare cost trend rates: Healthcare cost 1.0% Decrease Trend Rates 1.0% Increase (7.5% decreasing (8.5% decreasing (9.5% decreasing to 4%) to 5%) to 6%) Total OPEB Liability $ 1,451,310 $ 1,641,689 $ 1,866,853 OPEB Expense and Deferred Outflows and Inflows of Resources Related to OPEB For the year ended September 30, 2019, the Village recognized OPEB expense of $(66,882). At September 30, 2019, the Village reported deferred outflows of resources and deferred inflows of resources related to OPEB from the following sources: Deferred Outflows Deferred Inflows of Resources of Resources Changes of Assumptions/Inputs $ 68,256 $ 508,120 Differences Between Expected and Actual Experience 1,015,792 Total $ 68,256 $ 1,523,912 THE VILLAGE OF NORTH PALM BEACH, FLORIDA Notes to the Basic Financial Statements September 30, 2019 74 NOTE 13 – OTHER POSTEMPLOYMENT BENEFITS (Continued) OPEB Expense and Deferred Outflows and Inflows of Resources Related to OPEB (Continued) Amounts reported as deferred outflows of resources and deferred inflows of resources will be recognized in OPEB expense as follows: Fiscal Year Ending: September 30, 2020 $ (244,235) September 30, 2021 (244,235) September 30, 2022 (244,235) September 30, 2023 (244,235) September 30, 2024 (244,235) Thereafter (234,481) $ (1,455,656) 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 $230,013 to Seacoast during the fiscal year for water and sewer service. NOTE 15 –INTERFUND ACTIVITY Due from/to other funds The $2,683,839 due to the Capital Projects Fund from the General Fund is due to funds transferred for capital projects that have not been fully expended. The $44,028 due from the Recreation Special Revenue Fund (a Non-Major Fund) to the Capital Projects fund and $432,257 from the General Fund are from grant funds that have been spent but are not yet reimbursed. The due to Capital Projects Fund of $72,091 from the Country Club Fund are for capital projects that have not been fully expended. Advances to/from other funds The $2,637,644 advanced from the General Fund to the Country Club Fund was to provide $1,700,000 for the renovation of the Golf Course and an additional $937,644 for cash flow purposes. The Country Club Fund will start paying back the advance $1,700,000 in the fiscal year ending September 30, 2025, which is after the Bank of America loan is paid off. THE VILLAGE OF NORTH PALM BEACH, FLORIDA Notes to the Basic Financial Statements September 30, 2019 75 NOTE 15 –INTERFUND ACTIVITY (Continued) Transfers Interfund transfers during the year ended September 30, 2019, are as follows: The $405,000 from the General Fund to the Capital Projects Fund and the $2,000 from the Capital Projects Fund to the Recreation Special Revenue Fund (a Non-Major Fund) were to fund capital projects according to the original budget and subsequent budget amendments. NOTE 16 – DEFICIT FUND BALANCE Recreation Special Revenue Fund (a Non-Major Fund) has a deficit unassigned fund balance of $421,599 which is due to incurring grant related expenditures before all the conditions of reimbursement have been met. These expenditures are expected to be reimbursed in the subsequent fiscal year. NOTE 17 – CONTRACTS, COMMITMENTS AND CONTINGENCIES Operating Lease The Village entered into a three-year operating agreement for 80 golf carts, including GPS systems and software, for the Country Club in December 2019, at a monthly cost of $13,391. For the fiscal year ended September 30, 2019 expenses under the lease were $141,980. Future minimum rental commitments are as follows: Year ended September 30: Amount 2020 $ 160,692 2021 160,692 2022 26,782 $ 348,166 Contract Commitments On September 17, 2014, the Village entered into an agreement with the City of Palm Beach Gardens whereby the City of Palm Beach Gardens will provide the Village public safety dispatch services. The term of the agreement was for two years beginning on October 1, 2014, and extending through September 30, 2016. In 2016 the agreement was renewed for an additional five years extending through September 30, 2021. The fee for each year under the contract will be based upon the budget of the North County Dispatch (NCDC) center prorated to each contracting municipality based on that municipalities cost share. If at the end any contract year a budget shortfall exists, each contracting municipality shall pay its share of the shortfall. Conversely, if at the end of any contract year a budget surplus exists, such surplus shall represent a committed fund balance to be utilized specifically for NCDC budgetary purposes. The Village’s estimated cost for fiscal year ending September 30, 2020 is $432,028. THE VILLAGE OF NORTH PALM BEACH, FLORIDA Notes to the Basic Financial Statements September 30, 2019 76 NOTE 17 – CONTRACTS, COMMITMENTS AND CONTINGENCIES (Continued) Contract Commitments (Continued) Commitments outstanding at September 30, 2019 are the new country club clubhouse for $2,345,013, $216,693 for a new sanitation truck, and $518,000 for the capital lease of a new fire truck over seven years. Subsequent to September 30, 2019, the Village approved a capital lease for five vehicles for $282,068 over five years and $312,203 for the capital lease of a new fire rescue vehicle over seven years. 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 18 – CHANGE IN ACCOUNTING PRINCIPLES Implementation of GASB Statements: The Village implemented the following GASB Statements during the fiscal year ended September 30, 2019: GASB Statement No. 88, Certain Disclosures Related to Debt, Including Direct Borrowings and Direct Placements. The primary objective of this Statement is to improve the information that is disclosed in notes to government financial statements related to debt, including direct borrowings and direct placements. It also clarifies which liabilities governments should include when disclosing information related to debt NOTE 19 – NEW ACCOUNTING STANDARDS Below is a brief description and effective date of new accounting standards that could have a significant impact on the Village. • GASB Statement No. 87, Leases. This Statement will increase the usefulness of governments’ financial statements by requiring recognition of certain lease assets and liabilities for leases that previously were classified as operating leases and recognized as inflows of resources or outflows of resources based on the payment provisions of the contract. It establishes a single model for lease accounting that is based on the foundational principle that leases are financings of the right to use an underlying asset. This Statement is effective for the fiscal year ending September 30, 2021. THE VILLAGE OF NORTH PALM BEACH, FLORIDA Notes to the Basic Financial Statements September 30, 2019 77 NOTE 19 – NEW ACCOUNTING STANDARDS (Continued) • GASB Statement No. 84, Fiduciary Activities. This Statement will improve guidance regarding the identification of fiduciary activities for accounting and financial reporting purposes and how those activities should be reported. This Statement is effective for the fiscal year ending September 30, 2020. Management is currently evaluating the impact of the adoption of these statements on the Village’s financial statements. REQUIRED SUPPLEMENTARY INFORMATION OTHER THAN MD&A PENSION AND OTHER POSTEMPLOYMENT BENEFIT TREND INFORMATION 2018 2019 Total OPEB liability Service cost 274,702$ 113,906$ Interest cost 124,097 63,447 Difference between expected and actual experience (1,354,390) - Changes of assuptions and other imputs (677,494)78,007 Benefit payments (134,593)(56,645) Other changes - - Net change in total OPEB liability (1,767,678) 198,715 Total OPEB liability, beginning of year 3,210,652 1,442,974 Total OPEB liability, end of year 1,442,974$ 1,641,689$ Covered employee payroll 10,148,392$ 10,566,520$ Net OBEB liability as a percentage of covered employee payroll 14.22%15.54% Changes of Assumptions Discount rate (3.36% at 10/1/17)4.15%3.58% NOTE: The Village implemented GASB Statement 75 in 2018; information is presented for those years in which information is available. THE VILLAGE OF NORTH PALM BEACH, FLORIDA Required Supplemental Information September 30, 2019 Schedule of Changes in Total OPEB Liability Last Ten Fiscal Years 78 Measurement Year (1)2014 2015 2016 2017 2018 Total pension liability: Service cost 374,926$ 317,676$ 357,344$ 275,504$ 250,072$ Interest 972,865 1,048,746 1,106,085 1,116,142 1,162,025 Differences between Expected and Actual Experience (329,040) (129,381) (246,222) (307,977) Assumption changes 928,295 23,053 Benefit payments, including refunds of employee contributions (263,674) (293,890) (331,174) (454,571) (472,027) Net change in total pension liability 1,084,117 743,492 1,931,169 713,906 632,093 Total pension liability - beginning 12,728,438 13,812,555 14,556,047 16,487,216 17,201,122 Total pension liability - ending (a)13,812,555$ 14,556,047$ 16,487,216$ 17,201,122$ 17,833,215$ Plan fiduciary net position Contributions - employer 562,953$ 464,189$ 458,615$ 527,617$ 451,560$ Contributions - Employees 142,609 125,738 126,947 110,417 101,858 Net investment income 1,072,009 (96,116) 1,161,530 1,487,313 1,190,603 Benefit payments, including refunds of employee contributions (263,674) (293,890) (331,174) (454,571) (472,027) Administrative expenses (17,171) (20,655) (24,794) (22,361) (21,489) Net change in plan fiduciary net position 1,496,726 179,266 1,391,124 1,648,415 1,250,505 Plan fiduciary net position - beginning 10,433,153 11,929,879 12,109,145 13,500,269 15,148,684 Plan fiduciary net position - ending (b)11,929,879$ 12,109,145$ 13,500,269$ 15,148,684$ 16,399,189$ Net pension liability (a) - (b)1,882,676$ 2,446,902$ 2,986,947$ 2,052,438$ 1,434,026$ Plan fiduciary net position as a percentage of the total pension liability 86.37%83.19%81.88%88.07%91.96% Covered payroll 2,701,771$ 2,375,585$ 2,376,069$ 2,072,121$ 1,966,566$ Net pension liability as a percentage of covered payroll 69.68%103.00%125.71%99.05%72.92% (1) For GASB 68 purposes, the reporting year is one year before the measuremnt year. Changes of Assumptions For the 2016 fiscal year the discount rate, investment rate of return, inflation rate, salary scale, and the withdrawal and mortality rates changed. For the 2017 fiscal year the mortality rate changed. NOTE: The Village implemented GASB Statement 67 in 2014; information is presented for those years in which information is available. Schedule of Changes in Net Pension Liability and Related Ratios Last Ten Fiscal Years THE VILLAGE OF NORTH PALM BEACH, FLORIDA Required Supplemental Information September 30, 2019 General Employees Retirement Fund 79 2019 251,678$ 1,201,578 (625,948) (567,472) 259,836 17,833,215 18,093,051$ 358,152$ 97,522 721,786 (567,472) (38,690) 571,298 16,399,189 16,970,487$ 1,122,564$ 93.80% 1,834,767$ 61.18% 80 Measurement Year (1)2014 2015 2016 2017 2018 Total pension liability: Service cost 699,244$ 810,654$ 833,909$ 851,932$ 897,280$ Interest 1,419,425 1,555,518 1,738,069 1,779,947 1,922,314 Changes in excess state money 90,535 67,645 79,505 83,231 77,905 Changes of benefit terms 1,682 Differences between Expected and Actual Experience 483,189 (31,422) (197,249) 187,041 Changes of assumptions 246,146 (1,223,780) 198,680 174,565 Contributions - Buy Back 65,446 7,609 7,902 4,746 Benefit payments, including refunds of employee contributions (451,574) (611,678) (653,993) (680,673) (751,317) Net change in total pension liability 2,003,776 2,372,456 749,897 2,043,770 2,512,534 Total pension liability - beginning 17,476,586 19,480,362 21,852,818 22,602,715 24,646,485 Total pension liability - ending (a)19,480,362$ 21,852,818$ 22,602,715$ 24,646,485$ 27,159,019$ Plan fiduciary net position Contributions - employer 943,634$ 975,733$ 969,836$ 945,880$ 822,951$ Contributions - State 321,230 298,340 310,200 309,138 308,600 Contributions - Employees 87,010 151,450 190,989 211,474 224,469 Contributions - Buy Back 65,446 7,609 7,902 4,746 Net investment income 1,468,473 111,884 1,475,735 2,198,298 1,637,891 Benefit payments, including refunds of employee contributions (451,574) (611,678) (653,993) (680,673) (751,317) Administrative expenses (66,748) (76,457) (76,967) (76,293) (78,399) Net change in plan fiduciary net position 2,302,025 914,718 2,223,409 2,915,726 2,168,941 Plan fiduciary net position - beginning 14,499,921 16,801,946 17,716,664 19,940,073 22,855,799 Plan fiduciary net position - ending (b)16,801,946$ 17,716,664$ 19,940,073$ 22,855,799$ 25,024,740$ Net pension liability (a) - (b)2,678,416$ 4,136,154$ 2,662,642$ 1,790,686$ 2,134,279$ Plan fiduciary net position as a percentage of the total pension liability 86.25%81.07%88.22%92.73%92.14% Covered employee payroll 4,312,746$ 4,518,020$ 4,601,075$ 4,772,092$ 5,088,564$ Net pension liability as a percentage of covered payroll 62.10%91.55%57.87%37.52%41.94% (1) For GASB 68 purposes, the reporting year is one year before the measuremnt year. Changes of Assumptions/Benefits For the 2014 fiscal year the investment rate of return changed. For the 2016 fiscal year the salary scale, normal retirement rates, the investment rate of return, discount rate, withdrawal and mortality rates, and the actuarial cost method all changed. For the 2017 fiscal year the mortality rate and the investment rate of return changed. For the 2018 fiscal year the the investment rate of return changed. NOTE: The Village implemented GASB Statement 67 in 2014; information is presented for those years in which information is available. Schedule of Changes in Net Pension Liability and Related Ratios Last Ten Fiscal Years THE VILLAGE OF NORTH PALM BEACH, FLORIDA Required Supplemental Information September 30, 2019 Fire and Police Retirement Fund 81 2019 1,031,048$ 2,236,125 (600,965) 1,660,762 (138,741) 205,896 6,698 (793,277) 3,607,546 27,159,019 30,766,565$ 918,263$ 328,826 239,271 6,698 787,045 (793,277) (83,413) 1,403,413 25,024,740 26,428,153$ 4,338,412$ 85.90% 5,451,987$ 79.57% Changes of Assumptions/Benefits For the 2019 fiscal year the benefit accrual rated changed prospectively from 2.5% to 2.75%. For the 2019 fiscal year the investment rate of return changed from 7.75% to 7.70%. 82 Schedule of Contributions Fiscal Year Actuarially Contribution Actual Contribution Ending Determined Actual Deficiency Covered as a Percentage of September 30 Contribution Contribution (Excess)Payroll Covered Payroll General Employees Retirement Fund 2014 562,509$ 562,953$ (444)$ 2,701,771$ 20.84% 2015 464,189 464,189 2,375,585 19.54% 2016 449,552 458,615 (9,063) 2,376,069 19.30% 2017 519,821 527,617 (7,796) 2,072,121 25.46% 2018 449,477 451,560 (2,083) 1,966,566 22.96% 2019 355,507 358,152 (2,645) 1,834,767 19.52% Fire and Police Retirement Fund 2014 1,173,930$ 1,174,329$ (399)$ 4,312,746$ 27.23% 2015 1,205,408 1,206,428 (1,020) 4,518,020 26.70% 2016 1,193,059 1,200,531 (7,472) 4,601,075 26.09% 2017 1,175,844 1,171,787 4,057 4,772,092 24.55% 2018 1,038,576 1,053,646 (15,070) 5,088,564 20.71% 2019 1,135,649 1,144,018 (8,369) 5,451,987 20.98% Schedule of Investment Returns Fiscal Year Ending General Fire and Police September 30 Employees Employees 2014 10.50%10.00% 2015 -0.39%0.66% 2016 9.72%8.25% 2017 11.32%10.92% 2018 8.26%7.14% 2019 4.63%3.13% NOTE: The Village implemented GASB Statement 67 in 2014; information is presented for those years in which information is available. Annual money weighted rate of return net of investment expense THE VILLAGE OF NORTH PALM BEACH, FLORIDA Required Supplemental Information September 30, 2019 Last Ten Fiscal Years 83 Methods and assumptions used in calculations of determined contributions. The actuarially determined contribution rates are calculated as of October 1, two years prior to the end of the fiscal year in which contributions are reported. General Employees Police and Fire Retirement Fund Retirement Fund Actuarial Cost Method Frozen Entry-Age Entry Age Normal Amortization Method Level Dollar, closed Level Percentage of Compensation Remaining Amortization Period 30 years 20 years Asset Valuation Method Five year smoothed market Five year smoothed market Inflation 2.75%2.50% Salary increases Service based Service based Between 4% and 10%Between 4.5% and 10% Cost of living adjustments 2.5% for those retired before 2.50% 2/1/82 or who contribute an extra 2%. Investment Rate of Return 6.75%7.80% Mortality Female: RP2000, 100% Annuitant White Collar, Scale BB Male: RP2000, 50% Annuitant White Collar/50% Annuitant Blue Collar, Scale BB Female: RP2000, 100% Annuitant White Collar, Scale BB Male: RP2000, 10% Annuitant White Collar/90% Annuitant Blue Collar, Scale BB THE VILLAGE OF NORTH PALM BEACH, FLORIDA Notes to the Schedule of Contributions September 30, 2019 84 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, 2019 Variance with Final Budget Budgeted Amounts Actual Positive Original Final Amounts (Negative) Revenues Taxes 19,958,630$ 19,958,630$ 20,366,831$ 408,201$ Licenses and permits 980,100 980,100 1,522,913 542,813 Intergovernmental 1,500,382 1,500,382 1,582,513 82,131 Charges for services 2,340,560 2,340,560 2,399,174 58,614 Fines and forfeitures 77,800 77,800 100,188 22,388 Investment 95,530 95,530 573,096 477,566 Miscellaneous 24,800 24,800 510,688 485,888 Total revenues 24,977,802 24,977,802 27,055,403 2,077,601 Expenditures Current General government 3,356,808 3,368,970 3,275,570 93,400 Public safety 9,671,875 9,681,770 10,021,772 (340,002) Public works 5,283,828 5,394,257 5,255,606 138,651 Community development and planning 1,649,923 1,764,305 1,532,428 231,877 Leisure services 2,817,701 2,840,682 2,664,689 175,993 Other government 361,331 361,331 361,331 Capital outlay 948,526 504,665 443,861 Debt service Principal payments 882,777 882,777 882,777 Interest paid on debt 548,559 548,559 488,786 59,773 Total expenditures 24,572,802 25,791,177 24,626,293 1,164,884 Excess of revenues over expenditures 405,000 (813,375) 2,429,110 3,242,485 Other financing sources (uses) Appropriated fund balance 391,432 (391,432) Capital lease proceeds 826,943 343,299 (483,644) Transfer out (405,000) (405,000) (405,000) Total other financing uses (405,000) 813,375 (61,701) (875,076) Net change in fund balances $ $ 2,367,409 2,367,409$ Fund Balances Beginning of year 9,243,408 End of year 11,610,817$ 85 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. Note 2 - Legal Level of Control The legel level of budgetary control is at the fund level. September 30, 2019 86 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, 2019 Variance with Final Budget Original Final Positive Percent Budget Budget Actual (Negative)Variance Village Council Personnel services 50,470$ 50,470$ 50,435$ 35$ 0.07 Operating expenses 91,340 93,590 72,811 20,779 22.20 Total Village Council 141,810 144,060 123,246 20,814 14.45 Village Manager Personnel services 609,632 609,632 596,060 13,572 2.23 Operating expenses 65,900 65,900 61,831 4,069 6.17 Total Village Manager 675,532 675,532 657,891 17,641 2.61 Procurement and Purchasing Personnel services 75,717 75,717 58,675 17,042 22.51 Operating expenses 2,500 2,500 2,500 100.00 Total Procurement and Purchasing 78,217 78,217 58,675 19,542 24.98 Village Finance Personnel services 618,043 618,043 596,362 21,681 3.51 Operating expenses 52,720 52,720 69,096 (16,376) -31.06 Total Village Finance 670,763 670,763 665,458 5,305 0.79 Village Attorney Operating expenses 160,000 160,000 216,455 (56,455) -35.28 Village Clerk Personnel services 375,284 375,284 354,670 20,614 5.49 Operating expenses 60,435 60,435 17,274 43,161 71.42 Total Village Clerk 435,719 435,719 371,944 63,775 14.64 Information Technology Personnel services 339,117 339,117 347,543 (8,426) -2.48 Operating expenses 77,325 80,396 79,126 1,270 1.58 Total Information Technology 416,442 419,513 426,669 (7,156) -1.71 Human Resources Personnel services 296,428 296,428 310,663 (14,235) -4.80 Operating expenses 100,600 107,441 82,550 24,891 23.17 Total Human Resources 397,028 403,869 393,213 10,656 2.64 Police Personnel services 4,939,348 4,939,348 5,424,068 (484,720) -9.81 Operating expenses 1,077,635 1,077,635 938,905 138,730 12.87 Total Police 6,016,983 6,016,983 6,362,973 (345,990) -5.75 Fire Rescue Personnel services 3,256,637 3,256,637 3,265,681 (9,044) -0.28 Operating expenses 282,605 292,500 278,475 14,025 4.79 Total Fire Rescue 3,539,242 3,549,137 3,544,156 4,981 0.14 (Continued) 87 THE VILLAGE OF NORTH PALM BEACH, FLORIDA Schedule of Departmental Expenditures - Budget and Actual General Fund For the Year Ended September 30, 2019 Variance with Final Budget Original Final Positive Percent Budget Budget Actual (Negative)Variance (Continued) Public Works Administration Personnel services 341,012$ 341,012$ 351,359$ (10,347)$ -3.03 Operating expenses 75,815 111,088 77,035 34,053 30.65 Total Public Works 416,827 452,100 428,394 23,706 5.24 Sanitation Personnel services 1,508,363 1,508,363 1,360,116 148,247 9.83 Operating expenses 238,900 238,900 203,089 35,811 14.99 Total Sanitation 1,747,263 1,747,263 1,563,205 184,058 10.53 Facility Services Personnel services 350,568 350,568 335,757 14,811 4.22 Operating expenses 492,050 508,471 595,070 (86,599) -17.03 Total Facility Services 842,618 859,039 930,827 (71,788) -8.36 Street Maintenance Personnel services 525,288 525,288 500,444 24,844 4.73 Operating expenses 1,225,490 1,279,839 1,116,558 163,281 12.76 Total Street Maintenance 1,750,778 1,805,127 1,617,002 188,125 10.42 Vehicle Maintenance Personnel services 289,572 289,572 281,511 8,061 2.78 Operating expenses 236,770 236,770 220,681 16,089 6.80 Total Vehicle Maintenance 526,342 526,342 502,192 24,150 4.59 Planning and Engineering Personnel services 341,487 341,487 195,526 145,961 42.74 Operating expenses 147,175 255,973 246,045 9,928 3.88 Total Planning and Engineering 488,662 597,460 441,571 155,889 26.09 Building Personnel services 781,940 781,940 505,239 276,701 35.39 Operating expenses 142,937 148,521 395,412 (246,891) -166.23 Total Building 924,877 930,461 900,651 29,810 3.20 Code Enforcement Personnel services 211,944 211,944 178,759 33,185 15.66 Operating expenses 33,440 33,440 21,447 11,993 35.86 Total Code Enforcement 245,384 245,384 200,206 45,178 18.41 Recreation Personnel services 706,240 706,240 625,140 81,100 11.48 Operating expenses 432,378 432,378 414,504 17,874 4.13 Total Leisure Services-Recreation 1,138,618 1,138,618 1,039,644 98,974 8.69 (Continued) 88 THE VILLAGE OF NORTH PALM BEACH, FLORIDA Schedule of Departmental Expenditures - Budget and Actual General Fund For the Year Ended September 30, 2019 Variance with Final Budget Original Final Positive Percent Budget Budget Actual (Negative)Variance (Continued) Library Personnel services 675,094$ 675,094$ 638,336$ 36,758$ 5.44 Operating expenses 179,886 179,886 177,615 2,271 1.26 Total Library 854,980 854,980 815,951 39,029 4.56 Tennis Personnel services 421,214 421,214 447,122 (25,908) -6.15 Operating expenses 136,960 159,941 131,167 28,774 17.99 Total Tennis 558,174 581,155 578,289 2,866 0.49 Pool Personnel services 69,354 69,354 72,244 (2,890) -4.17 Operating expenses 95,575 95,575 71,940 23,635 24.73 Total Pool 164,929 164,929 144,184 20,745 12.58 Special Events Operating expenses 101,000 101,000 86,621 14,379 14.24 Total Special Events 101,000 101,000 86,621 14,379 14.24 Debt Service 1,431,336 1,431,336 1,371,563 59,773 4.18 Reserves and contingencies Operating expenses 125,969 341,547 (215,578) -171.14 Contingencies 361,331 361,331 361,331 100.00 361,331 487,300 341,547 145,753 29.91 Non-Departmental Operating expenses 487,947 487,947 466,662 21,285 4.36 487,947 487,947 466,662 21,285 4.36 Capital Outlay Police 33,805 (33,805) Capital leases 826,943 343,299 483,644 58.49 Total Capital Outlay 826,943 377,104 449,839 54.40 Total expenditures 24,572,802$ 25,791,177$ 24,626,293$ 1,164,884$ 4.52% 89 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 Public Northlake On-Behalf Total Nonmajor Safety Boulevard Pension Governmental Fund Fund Recreation Contributions Funds Assets Cash and cash equivalents 1,520$ 1,987$ 5,835$ $ 9,342$ Due from other governments 448,851 448,851 Total assets 1,520$ 1,987$ 454,686$ $ 458,193$ Liabilities Due to other funds $ $ 476,285$ $ 476,285$ Deferred inflows of resources Unavailable revenue 400,000 400,000 Fund balances Assigned 1,520 1,987 3,507 Unassigned (421,599)(421,599) Total fund balances 1,520 1,987 (421,599) (418,092) Total liabilities, deferred inflows of resources, and fund balances 1,520$ 1,987$ 454,686$ $ 458,193$ September 30, 2019 90 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, 2019 Special Revenue Funds Public Northlake On-Behalf Total Nonmajor Safety Boulevard Pension Governmental Fund Fund Recreation Contributions Funds Revenues Intergovernmental 27,268$ $ 48,851$ 328,826$ 404,945$ Total revenues 27,268 48,851 328,826 404,945 Expenditures Current Public safety 328,826 328,826 Capital outlay 27,268 358,170 385,438 Total expenditures 27,268 358,170 328,826 714,264 Excess (deficiency) of revenues over (under) expenditures (309,319) (309,319) Other financing sources (uses) Transfers in 2,000 2,000 Total other financing sources (uses) 2,000 2,000 Net changes in fund balances (307,319) (307,319) Fund balances - Beginning of year 1,520 1,987 (114,280) (110,773) Fund balances - End of year 1,520$ 1,987$ (421,599)$ $ (418,092)$ 91 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 - Pension Trust Funds Fire and Total General Police Employee Employees Officers Retirement Pension Pension Funds Assets Cash and cash equivalents 193,254$ 372,195$ 565,449$ Investments: Domestic common equity securities 13,009,522 13,009,522 International common equity securities 2,708,368 2,708,368 U.S. Government and agencies 3,322,069 3,322,069 Municipal bonds 272,814 272,814 Corporate bonds 3,024,595 3,024,595 Fixed income exchange traded funds 3,352,878 3,352,878 Equity exchange traded funds 1,006,351 1,006,351 Fixed income mutual funds 2,606,625 2,606,625 Equity mutual funds 9,757,199 9,757,199 Real estate investment fund 2,705,074 2,705,074 Money market mutual funds 1,122,114 1,122,114 Accrued interest and dividends 8,231 51,872 60,103 Accounts receivable 74,977 74,977 Accounts receivable, broker-dealers 459,175 459,175 Prepaids 1,737 1,737 Total assets 16,999,515 27,049,535 44,049,050 Liabilities Accounts payable 29,028 42,070 71,098 Accounts payable, broker-dealers 579,312 579,312 Total liabilities 29,028 621,382 650,410 Net Position restricted for pensions 16,970,487$ 26,428,153$ 43,398,640$ September 30, 2019 92 Fire and Total General Police Employee Employees Officers Retirement Pension Pension Funds Additions Contributions Employer 358,152$ 918,111$ 1,276,263$ Plan members 97,522 246,121 343,643 State on-behalf payments 328,826 328,826 Total contributions 455,674 1,493,058 1,948,732 Investment earnings Dividends and interest 558,935 738,670 1,297,605 Net increase in fair value of investments 211,863 229,959 441,822 Total investment earnings 770,798 968,629 1,739,427 Less: investment expenses 49,012 181,583 230,595 Total investment earnings 721,786 787,046 1,508,832 Total additions 1,177,460 2,280,104 3,457,564 Deductions Administration 38,690 83,413 122,103 Benefits 567,472 793,278 1,360,750 Total deductions 606,162 876,691 1,482,853 Change in net position 571,298 1,403,413 1,974,711 Net position - beginning 16,399,189 25,024,740 41,423,929 Net position - ending 16,970,487$ 26,428,153$ 43,398,640$ THE VILLAGE OF NORTH PALM BEACH, FLORIDA Pension Trust Funds Combining Statement of Changes in Fiduciary Net Position For the Year Ended September 30, 2019 93 AGENCY FUNDS Manatee Protection Agency Northlake Boulevard Task Force THE VILLAGE OF NORTH PALM BEACH, FLORIDA Combining Statement of Agency Net Position Manatee Northlake Total Protection Boulevard Agency Agency Task Force Funds Assets Cash and cash equivalents 314,619$ 66,889$ 381,508$ Liabilities Due to others 314,619$ 66,889$ 381,508$ September 30, 2019 94 Combining Schedule of Changes in Agency Net Position September 30, 2018 Additions Deductions September 30, 2019 Manatee Protection Agency Assets Cash and cash equivalents 308,111$ 6,508$ $ 314,619$ Liabilities Due to others 308,111$ 6,508$ $ 314,619$ Northlake Boulevard Task Force Assets Cash and cash equivalents 65,506$ 1,383$ $ 66,889$ Liabilities Due to others 65,506$ 1,383$ $ 66,889$ Total All Agency Funds Assets Cash and cash equivalents 373,617$ 7,891$ $ 381,508$ Liabilities Due to others 373,617$ 7,891$ $ 381,508$ THE VILLAGE OF NORTH PALM BEACH, FLORIDA For the Year Ended September 30, 2019 95 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, 2019 Variance with Final Budget Original Final Positive Percent Budget Budget Actual (Negative) Variance Revenue Greens fee/cart rentals/membership fees 2,129,209$ 2,129,209$ 1,011,369$ (1,117,840)$ -52.50 Golf shop revenues 159,400 159,400 109,563 (49,837) -31.27 Driving range revenues 300,000 300,000 164,020 (135,980) -45.33 Restaurant revenues 4,611 4,611 Interest revenues 10,000 10,000 804 (9,196) -91.96 Miscellaneous 6,000 6,000 117,000 111,000 1850.00 Appropriated net position 275,647 611,983 (611,983) -100.00 Total revenues 2,880,256 3,216,592 1,407,367 (1,809,225)-56.25 Golf Maintenance Operating expenses 1,163,500 1,163,500 1,340,159 (176,659) -15.18 Capital outlay 336,336 360,296 (23,960) -7.12 Total Golf Maintenance 1,163,500 1,499,836 1,700,455 (200,619) -13.38 Golf Pro Shop and Range Personnel services 596,460 596,460 474,923 121,537 20.38 Operating expenses 343,200 343,200 438,928 (95,728) -27.89 Capital outlay 9,707 (9,707) Total Golf Pro Shop and Range 939,660 939,660 923,558 16,102 1.71 Food and Beverage Personnel services Operating expenses 12,314 12,314 23,945 (11,631) -94.45 Total Food and Beverage 12,314 12,314 23,945 (11,631) (94.45) Administration Personnel services 231,838 231,838 41,835 190,003 81.96 Operating expenses 13,700 13,700 15,621 (1,921) -14.02 Total Administration 245,538 245,538 57,456 188,082 76.60 Clubhouse and Grounds Operating expenses 29,000 29,000 75,854 (46,854) (161.57) Total Clubhouse and Grounds 29,000 29,000 75,854 (46,854) (161.57) Insurance and General Liability Operating expenses 46,555 46,555 27,034 19,521 41.93 Reserves Operating 10,000 10,000 5,402 4,598 45.98 Total Reserves 10,000 10,000 5,402 4,598 45.98 Debt service Debt service 433,689 433,689 430,849 2,840 0.65 Total expenses on the budgetary basis 2,880,256 3,216,592 3,244,553 (27,961) (0.87) Revenues under expenses $ $ (1,837,186)$ (1,837,186)$ Adjustments to reconcile to the GAAP Basis Total expenses on the budgetary basis 3,244,553$ Less: capital outlay costs capitalized (370,003) Less: debt service (430,849) Add: depreciation expense 325,559 Total operating expenses 2,769,260$ The revenue under expenses was less than the $425,770 budgeted along with the loan. 96 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 97 Changes in Net Position 98 Fund Balances, Governmental Funds 100 Changes in Fund Balances, Governmental Fund 101 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 103 Property Tax Rates - Direct and Overlapping Governments 104 Principal Property Taxpayers 105 Property Tax Levies and Collections 106 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 107 Direct and Overlapping Governmental Activities Debt 108 Pledged-Revenue Coverage 109 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 110 Principal Employers 111 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 112 Operating Indicators by Function/Program 113 Capital Asset Statistics by Function/Program 114 Sources: Unless otherwise noted, the information in these schedules is derived from the comprehensive annual financial reports for the relevant year. STATISTICAL SECTION THIS PAGE INTENTIONALLY LEFT BLANK 2010 2011 2012 2013 2014 Governmental Activities: Net investment in capital assets 18,184,508$ 17,237,355$ 16,109,707$ 15,431,966$ 14,966,927$ Restricted 390,081 548,489 658,194 317,190 180,755 Unrestricted 10,568,594 11,775,621 11,846,141 11,973,715 11,314,096 Total governmental activities net position 29,143,183 29,561,465 28,614,042 27,722,871 26,461,778 Business-Type Activities: Net investment in capital assets 2,295,125 2,200,927 2,082,668 1,998,974 1,907,746 Unrestricted 403,261 385,623 557,954 668,434 514,167 Total business-type activities net position 2,698,386 2,586,550 2,640,622 2,667,408 2,421,913 Primary government: Net investment in capital assets 20,479,633 19,438,282 18,192,375 17,430,940 16,874,673 Restricted 390,081 548,489 658,194 317,190 180,755 Unrestricted 10,971,855 12,161,244 12,404,095 12,642,149 11,828,263 Total primary government net position 31,841,569$ 32,148,015$ 31,254,664$ 30,390,279$ 28,883,691$ 2015 (1)2016 2017 2018 2019 Governmental Activities: Net investment in capital assets 14,711,016$ 14,102,547$ 13,484,731$ 15,429,484$ 18,814,116$ Restricted 177,431 398,519 992,538 484,568 525,536 Unrestricted 6,168,366 6,677,850 6,536,225 6,658,744 7,504,062 Total governmental activities net position 21,056,813 21,178,916 21,013,494 22,572,796 26,843,714 Business-Type Activities: Net investment in capital assets 1,833,975 1,880,421 1,991,168 3,056,715 3,422,142 Unrestricted 544,523 418,726 361,461 (1,324,978) (3,162,414) Total business-type activities net position 2,378,498 2,299,147 2,352,629 1,731,737 259,728 Primary government: Net investment in capital assets 16,544,991 15,982,968 15,475,899 18,486,199 22,236,258 Restricted 177,431 398,519 992,538 484,568 525,536 Unrestricted 6,712,889 7,096,576 6,897,686 5,333,766 4,341,648 Total primary government net position 23,435,311$ 23,478,063$ 23,366,123$ 24,304,533$ 27,103,442$ (1)The Village implemented GASB 68 in 2015 related to pension accounting which significantly reduced unrestricted net position. 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 97 VILLAGE OF NORTH PALM BEACH CHANGES IN NET POSITION LAST TEN FISCAL YEARS (ACCRUAL BASIS OF ACCOUNTING) Unaudited Fiscal Year 2010 2011 2012 2013 2014 Expenses Governmental activities: General government 2,679,192$ 2,403,681$ 2,520,815$ 2,489,488$ 2,696,298$ Public safety 7,304,233 7,232,748 7,892,561 8,282,062 9,259,442 Public works 4,594,738 4,733,913 4,652,620 4,482,973 4,485,246 Community development and planning 806,536 811,177 884,773 966,245 1,046,299 Leisure services 2,830,292 2,749,065 2,873,496 2,974,290 3,114,213 Interest on long-term debt 4,384 Total governmental activities expenses 18,219,375 17,930,584 18,824,265 19,195,058 20,601,498 Business-type activities: Country club 3,398,206 3,691,528 3,536,139 3,629,120 3,902,131 Total business-type activities 3,398,206 3,691,528 3,536,139 3,629,120 3,902,131 Total primary government expenses 21,617,581$ 21,622,112$ 22,360,404$ 22,824,178$ 24,503,629$ Program Revenues Governmental activities: Charges for services: General government 126,968$ 130,886$ 135,372$ 107,976$ 110,694$ Public safety 465,263 420,653 440,568 522,121 592,644 Public works 411,722 400,662 386,974 403,447 402,814 Community development and planning 734,718 861,394 816,673 993,059 1,621,471 Leisure services 1,063,748 1,043,459 1,018,883 1,087,182 1,096,021 Other government Operating grants and contributions 96,670 126,568 149,573 91,901 90,520 Capital grants and contributions 75,845 5,169 5,686 233,949 16,098 Total governmental activities program revenues 2,974,934 2,988,791 2,953,729 3,439,635 3,930,262 Business-type activities: Charges for services: Country club 3,227,580 3,571,199 3,582,760 3,577,446 3,645,706 Operating grants and contributions Capital grants and contributions Total business-type activities program revenues 3,227,580 3,571,199 3,582,760 3,577,446 3,645,706 Total primary government program revenues 6,202,514$ 6,559,990$ 6,536,489$ 7,017,081$ 7,575,968$ Net (Expense)/Revenue Governmental activities (15,244,441)$ (14,941,793)$ (15,870,536)$ (15,755,423)$ (16,671,236)$ Business-type activities (170,626) (120,329) 46,621 (51,674) (256,425) Total primary government net expense (15,415,067)$ (15,062,122)$ (15,823,915)$ (15,807,097)$ (16,927,661)$ General revenues and other changes in net position: Governmental activities: Taxes: Property taxes 11,053,128$ 10,441,869$ 10,011,748$ 9,981,391$ 10,154,695$ Local option gas taxes 266,077 259,794 263,369 261,852 266,147 Local option infrastruture surtax Utility service taxes 2,261,375 2,198,148 2,164,920 2,197,760 2,277,366 Franchise taxes 1,204,328 1,191,155 1,178,598 1,160,780 1,232,669 Sales and use taxes 1,114,945 1,140,744 1,138,097 1,187,221 1,260,617 Unrestricted grants and contributions Investment earnings 280,217 97,743 90,968 37,029 16,653 Miscellaneous 213,425 30,622 75,413 38,219 146,360 Contributions for Support Our Troops Gain on disposl of equipment 55,636 Transfers Total governmental activities 16,393,495 15,360,075 14,923,113 14,864,252 15,410,143 Business-type activities: Investment income 14,686 8,493 7,451 8,555 10,930 Miscellaneous 55,300 69,905 Transfers Total business-type activities 69,986 8,493 7,451 78,460 10,930 Total primary government 16,463,481$ 15,368,568$ 14,930,564$ 14,942,712$ 15,421,073$ Change in net position Governmental activities 1,149,054$ 418,282$ (947,423)$ (891,171)$ (1,261,093)$ Business-type activities (100,640) (111,836) 54,072 26,786 (245,495) Total primary government 1,048,414$ 306,446$ (893,351)$ (864,385)$ (1,506,588)$ Basic Financial Statements and Management's Discussion and Analysis for State and Local Governments. 98 2015 2016 2017 2018 2019 3,028,716$ 2,985,185$ 3,205,903$ 3,213,886$ 3,312,770$ 9,311,441 9,308,778 9,905,815 10,045,757 10,505,278 4,963,704 5,106,651 5,707,570 5,911,225 5,603,991 1,308,924 1,382,121 1,255,115 1,458,523 1,685,525 2,973,687 2,904,715 3,114,720 3,058,410 3,037,981 266,892 499,929 489,988 21,586,472 21,687,450 23,456,015 24,187,730 24,635,533 3,842,660 3,845,547 2,903,224 2,912,523 2,879,376 3,842,660 3,845,547 2,903,224 2,912,523 2,879,376 25,429,132$ 25,532,997$ 26,359,239$ 27,100,253$ 27,514,909$ 131,445$ 128,459$ 134,249$ 140,998$ 147,104$ 537,064 628,529 557,265 548,019 687,905 514,354 565,011 547,596 510,732 538,459 1,163,875 1,213,032 1,222,464 1,495,298 1,799,878 1,006,382 994,918 1,022,175 876,174 899,164 380,567 365,823 377,339 422,255 395,376 26,548 229,161 102,187 9,591 808,193 3,760,235 4,124,933 3,963,275 4,003,067 5,276,079 3,788,852 3,720,573 2,946,432 2,946,432 1,406,563 3,788,852 3,720,573 2,946,432 2,254,638 1,406,563 7,549,087$ 7,845,506$ 6,909,707$ 6,257,705$ 6,682,642$ (17,826,237)$ (17,562,517)$ (19,492,740)$ (20,184,663)$ (19,359,454)$ (53,808) (124,974) 43,208 (657,885) (1,472,813) (17,880,045)$ (17,687,491)$ (19,449,532)$ (20,842,548)$ (20,832,267)$ 11,364,888$ 12,253,917$ 13,091,985$ 15,003,141$ 16,185,283$ 282,549 288,150 305,700 302,208 307,130 552,600 879,565 922,937 2,267,118 2,303,294 2,413,679 2,511,877 2,521,954 1,253,139 1,263,812 1,306,997 1,294,280 1,352,464 1,332,209 1,363,954 1,371,890 1,413,335 1,448,423 108,794 103,353 126,926 376,227 811,915 57,137 60,026 150,698 268,471 80,266 30,457 48,114 6,843 74,449 16,696,291 17,684,620 19,327,318 22,123,553 23,630,372 10,393 9,230 10,274 13,874 804 36,393 10,393 45,623 10,274 13,874 804 16,706,684$ 17,730,243$ 19,337,592$ 22,137,427$ 23,631,176$ (1,129,946)$ 122,103$ (165,422)$ 1,938,890$ 4,270,918$ (43,415) (79,351) 53,482 (644,011) (1,472,009) (1,173,361)$ 42,752$ (111,940)$ 1,294,879$ 2,798,909$ 99 THIS PAGE INTENTIONALLY LEFT BLANK 2010 2011 2012 2013 2014 General Fund Nonspendable 167,108$ 276,924$ 166,839$ 293,674$ 244,438$ Restricted 338,457 548,489 658,194 317,190 135,255 Committed 442,833 Assigned 104,245 186,594 127,574 200,016 216,808 Unassigned 10,443,099 10,688,660 11,244,977 11,451,668 12,391,362 Total general fund 11,052,909$ 11,700,667$ 12,197,584$ 12,705,381$ 12,987,863$ All other Governmental Funds Restricted 45,500$ Assigned Special revenue funds 47,379$ 47,107$ 47,652$ 47,652$ 325,152 Capital projects funds 844,742 1,491,574 2,129,831 1,799,617 841,850 Unassigned Total all other governmental funds 892,121$ 1,538,681$ 2,177,483$ 1,847,269$ 1,212,502$ 2015 2016 2017 2018 2019 General Fund Nonspendable 155,594$ 358,606$ 183,220$ 1,240,793$ 2,789,824$ Restricted 131,931 353,019 781,756 47,338 61,227 Committed Assigned 319,888 208,204 316,266 407,862 582,008 Unassigned 10,802,623 10,724,049 11,811,468 7,547,415 8,177,758 Total general fund 11,410,036$ 11,643,878$ 13,092,710$ 9,243,408$ 11,610,817$ All other Governmental Funds Restricted 45,500$ 45,500$ 13,988,744$ 11,826,016$ 464,309$ Assigned Special revenue funds 318,526 508,481 388,981 3,506 3,507 Capital projects funds 1,448,620 1,604,073 1,670,196 5,398,245 3,727,482 Unassigned (114,279) (421,599) Total all other governmental funds 1,812,646$ 2,158,054$ 16,047,921$ 17,113,488$ 3,773,699$ Basic Financial Statements and Management's Discussion and Analysis for State and Local Governments. VILLAGE OF NORTH PALM BEACH FUND BALANCES, GOVERNMENTAL FUNDS LAST TEN FISCAL YEARS (MODIFIED ACCRUAL BASIS OF ACCOUNTING) Unaudited 100 VILLAGE OF NORTH PALM BEACH CHANGES IN FUND BALANCES, GOVERNMENTAL FUNDS LAST TEN FISCAL YEARS (MODIFIED ACCRUAL BASIS OF ACCOUNTING) Unaudited Fiscal Year 2010 2011 2012 2013 2014 Revenues: Taxes 14,784,906$ 14,090,966$ 13,618,635$ 13,601,783$ 13,930,877$ Licenses and Permits 910,997 959,098 810,390 803,337 1,344,653 Intergovernmental 1,768,388 1,557,377 1,591,678 1,817,603 1,688,608 Charges for services 1,944,245 1,934,424 1,966,179 2,141,437 2,320,305 Fines and forfeitures 142,048 164,366 140,610 131,524 117,869 Investment earnings 280,218 97,743 90,968 37,029 16,653 Miscellaneous 278,062 59,462 130,293 207,076 258,086 Total revenues 20,108,864 18,863,436 18,348,753 18,739,789 19,677,051 Expenditures: General government 2,496,342 2,402,241 2,328,568 2,346,281 2,541,546 Public safety 7,021,231 7,053,282 7,583,018 7,947,221 8,947,627 Public works 3,887,034 4,044,642 3,886,698 3,733,977 3,773,689 Community development 774,121 790,937 844,748 933,117 1,004,642 Leisure services 2,361,388 2,295,959 2,374,748 2,491,559 2,644,598 Other government Capital outlay 663,582 682,057 495,254 1,110,051 1,117,234 Debt service Principal payments 2,250,000 Interest paid on debt 4,384 Total expenditures 19,458,082 17,269,118 17,513,034 18,562,206 20,029,336 Excess of revenues over (under) expenditures 650,782 1,594,318 835,719 177,583 (352,285) Other financing sources (uses) Transfers in 163,490 1,334,934 500,000 265,000 323,000 Transfers out (163,490) (1,334,934) (500,000) (265,000) (323,000) Capital lease Proceeds from debt issuance Miscellaneous Total other financing sources (uses) Net change in fund balances 650,782$ 1,594,318$ 835,719$ 177,583$ (352,285)$ Debt service as a percentage of noncapital expenditures 11.99%---- 101 2015 2016 2017 2018 2019 15,167,694$ 16,109,173$ 17,118,361$ 19,111,506$ 20,366,831$ 947,158 1,235,782 997,656 1,222,594 1,522,913 1,758,246 1,765,836 2,417,809 2,679,389 2,910,395 2,231,673 2,364,013 2,321,298 2,200,860 2,399,174 128,235 91,534 124,395 100,140 100,188 108,794 103,353 126,926 376,227 811,915 122,107 191,250 157,063 412,513 510,688 20,463,907 21,860,941 23,263,508 26,103,229 28,622,104 2,904,553 2,876,521 2,970,223 3,059,623 3,275,570 8,966,077 9,129,947 9,166,060 9,669,361 10,350,598 4,255,636 4,266,749 4,882,159 5,313,834 5,255,606 1,270,399 1,351,061 1,190,759 1,429,764 1,532,428 2,514,495 2,448,164 2,591,866 2,613,664 2,664,689 1,530,430 1,209,249 2,123,742 5,507,617 15,487,329 680,000 882,777 613,101 488,786 21,441,590 21,281,691 22,924,809 28,886,964 39,937,783 (977,683) 579,250 338,699 (2,783,735) (11,315,679) 2,091,246 1,503,750 1,503,750 4,963,307 407,000 (2,091,246) (1,503,750) (1,503,750) (4,963,307) (407,000) 15,000,000 343,299 15,000,000 343,299 (977,683)$ 579,250$ 15,338,699$ (2,783,735)$ (10,972,380)$ ---5.53%5.61% 102 Fiscal Year Ended Sept 30, Tax Roll Year Residential Property Commercial Property Personal Property Total Net Market - Assessed Value Total Direct Tax Rate 2010 2009 1,394,954,867 221,443,121 40,552,276 1,656,950,264 6.9000 2011 2010 1,295,097,223 210,844,220 38,261,607 1,544,203,050 6.9723 2012 2011 1,265,549,795 189,284,601 33,303,512 1,488,137,908 6.9723 2013 2012 1,254,302,880 195,770,816 30,033,151 1,480,106,847 6.9723 2014 2013 1,287,481,785 203,512,929 33,792,851 1,524,787,565 6.8731 2015 2014 1,355,969,888 214,484,701 34,077,944 1,604,532,533 7.3300 2016 2015 1,453,735,176 232,020,936 36,939,006 1,722,695,118 7.3300 2017 2016 1,545,192,840 259,097,141 40,181,846 1,844,471,827 7.3300 2018 2017 1,804,338,668 279,488,569 35,855,827 2,119,683,064 7.3300 2019 2018 1,897,471,175 297,293,001 38,440,924 2,233,205,100 7.5000 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 103 Palm Beach Total County Palm Direct and Fiscal Tax Roll Village of School Beach Special Overlapping Year Year N. Palm Beach District County Districts Rates 2010 2009 6.9000 7.9830 4.5614 2.4934 21.9378 2011 2010 6.9723 8.1540 4.9960 2.5549 22.6772 2012 2011 6.9723 8.1800 4.9925 2.3433 22.4881 2013 2012 6.9723 7.7780 4.9902 2.3154 22.0559 2014 2013 6.8731 7.5860 4.9852 2.2280 21.6723 2015 2014 7.3300 7.5940 4.9729 2.1732 22.0701 2016 2015 7.3300 7.5120 4.9277 2.0974 21.8671 2017 2016 7.3300 7.0700 4.9142 1.9453 21.2595 2018 2017 7.3300 6.7690 4.9023 1.7818 20.7831 2019 2018 7.5000 4.8980 6.5720 1.6920 20.6620 Note:All millage rates are based on $1 for every $1,000 of assessed value. Source:North Palm Beach: Notice of Ad Valorem Taxes and Non-Ad Valorem Assessments (1)Overlapping rates are those of local and county governments that apply to property owners within the Village of North Palm Beach. Not all overlapping rates apply to all Village of North Palm Beach property owners (i.e. The rates for special districts apply only to the proportion of the government's property owners whose property is located within the geographic boundaries of the special district.) VILLAGE OF NORTH PALM BEACH PROPERTY TAX RATES - DIRECT AND OVERLAPPING GOVERNMENTS LAST TEN FISCAL YEARS Overlapping Rates (1) 104 Percentage Percentage of Total of Total Village Net Village Net Taxable Taxable Taxable Taxable Assessed Assessed Assessed Assessed Taxpayers Value Rank Value Value Rank Value Olen Residential Realty 33,250,109 1 1.49%18,000,000 1 0.97% SHM Old Port Cove LLC 30,065,264 2 1.35% Sanctuary Bay Trust Corporation 26,144,325 3 1.17%14,000,300 3 0.76% Florida Power & Light 19,919,679 4 0.89% JB Shoppes LLLP 16,854,702 5 0.75% Pearland RJR LLC 15,630,043 6 0.70% New Country Motor Cars 14,966,903 7 0.67% SHM North Palm Beach LLC 12,565,504 8 0.56% Palm Beach Autoplex LLC 9,697,192 9 0.43% Chouest Gary 10,025,549 10 0.45% Domani Development 9,213,927 6 0.50% Crystal Tree NPB 17,030,531 2 0.92% Greater Fla Inv Co& 12,911,802 4 0.70% CF02 Palm Beach III LP 11,000,000 5 0.60% Village Shoppers at US 1LLC 7,896,575 7 0.43% Old Port Cove Holding, INC 7,706,522 8 0.42% Riverside National Bank 6,044,474 9 0.33% 701 us One Inc 5,839,803 10 0.32% Total 189,119,270$ 8.46%109,643,934$ 5.95% Source: Palm Beach Country Appraiser VILLAGE OF NORTH PALM BEACH PRINCIPAL PROPERTY TAXPAYERS 2019 & 2009 Presented 2019 2009 Note: Assessed values are established by the Palm Beach Property Appraiser's offices as of January 1, each year. 105 Fiscal Year Total Taxes Collections in Ending Tax Roll Levied for Percent Subsequent Percent Sept 30,Year Fiscal Year Amount of Levy Years Amount of Levy 2010 2009 11,564,281 10,683,829 92.39% 284,004 10,967,833 94.84% 2011 2010 10,793,319 10,097,289 93.55% 298,514 10,395,803 96.32% 2012 2011 10,424,715 9,992,145 95.85% 15,616 10,007,761 96.00% 2013 2012 10,358,172 9,948,550 96.05% 36,366 9,984,916 96.40% 2014 2013 10,503,598 10,097,763 96.14% 57,493 10,155,256 96.68% 2015 2014 11,761,226 11,350,738 96.51% 14,777 11,365,515 96.64% 2016 2015 12,627,355 12,197,736 96.60% 57,133 12,254,869 97.05% 2017 2016 13,519,978 13,051,272 96.53% 41,267 13,092,539 96.84% 2018 2017 15,537,277 14,999,572 96.54% 3,390 15,002,962 96.56% 2019 2018 16,749,038 16,176,654 96.58% 6,223 16,182,877 96.62% 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 106 VILLAGE OF NORTH PALM BEACH RATIOS OF OUTSTANDING DEBT BY TYPE Business-type Activities Fiscal Year Percent of Ended Loans Capital Loans Capital Median Personal Per Sept 30,Payable Leases Payable Leases Total Income (1)Capita 2010 - - 4,090,284 235,176 4,325,460 0.56%371.64 2011 - - 3,844,928 173,084 4,018,012 * 0.54% * 345.22 2012 - - 3,608,294 106,933 3,715,227 0.50%303.51 2013 - - 3,357,875 396,055 3,753,930 0.49%305.37 2014 - - 3,096,925 274,471 3,371,396 0.46%266.62 2015 - - 2,824,987 147,767 2,972,754 0.37%234.94 2016 - - 2,684,913 - 2,684,913 0.35%212.20 2017 15,000,000 - 2,247,088 - 17,247,088 1.85% 1,292.69 2018 14,320,000 - 1,939,366 - 16,259,366 1.79% 1,229.26 2019 13,515,000 265,522 1,618,633 - 15,399,155 1.74% 1,161.32 Note:Details regarding the Village's outstanding debt may be found in the notes to the financial statements. *Information was not available, the prior year info was used. (1)See the Schedule of Demographic and Economic Statistics on page 103 for personal income and population data. Governmental Activities LAST TEN FISCAL YEARS 107 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 66,868$ 1.19%796$ Palm Beach County School Board 8,542 1.12%96$ Other debt: Palm Beach County 731,607 1.19%8,706 Palm Beach County School Board 1.12% Subtotal, overlapping debt 9,598 Village of North Palm Beach Direct Debt - Total direct and overlapping debt 9,598$ 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. VILLAGE OF NORTH PALM BEACH DIRECT AND OVERLAPPING GOVERNMENTAL ACTIVITIES DEBT SEPTEMBER 30, 2019 Unaudited Government Unit 108 VILLAGE OF NORTH PALM BEACH Pledged - Revenue Coverage Country Club Bonds Last Ten Fiscal Years Unaudited Required Fiscal Gross Operating Debt Year Revenues (1) Expenses (2)Net Revenue Service Coverage (3) 2010 3,242,266 2,728,470 513,796 394,900 1.30 2011 3,579,692 3,049,301 530,391 394,900 1.34 2012 3,590,211 2,932,743 657,468 394,900 1.66 2013 3,586,001 2,986,080 599,921 394,900 1.52 2014 3,656,636 3,248,284 408,352 394,900 1.03 2015 3,799,245 3,226,907 572,338 394,900 1.45 2016 3,766,196 3,333,395 432,801 394,900 1.10 2017 2,956,706 2,472,812 483,894 394,900 1.23 2018 2,268,512 2,227,913 40,599 394,900 0.10 2019 1,407,367 2,443,701 (1,036,334) 394,900 -2.62 Note:The Non-Ad Valorem Revenue Notes, Series 2017 do not have any pledged revenues. (1)Gross revenue includes all revenues derived by the Village from the ownership and operation of the Country Club. (2)Operating expenses excludes non-cash expenses (3)Coverage should be not less than 1.00. 109 Per Palm Beach Median Capita County Calendar Personal Personal Unemployment Year Population (1) Income (1) Income (1)Rate (2) 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 2014 (estimate)12,645 ***63,349 ****43,120 **3.92 2015 (estimate)12,653 ***61,057 ****43,120 **3.15 2016 (estimate)12,817 ***61,653 ****45,110 **2.10 2017 (estimate)13,342 ***69,718 ****46,160 **2.70 2018 (estimate)13,227 ***68,833 ****46,160 **1.79 2019 (estimate)13,260 ***66,898 ****48,240 **1.24 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 2019 presented ***North Palm Beach Median Personal Income for 2019 presented ****West Palm Beach/Ft Lauderdale/Miami Mean Income data presented Note: (1)All information available at the current time is presented. VILLAGE OF NORTH PALM BEACH DEMOGRAPHIC AND ECONOMIC STATISTICS LAST TEN CALENDAR YEARS Unaudited 110 739892 Percentage Percentage of Total of Total Employer Employees Employment Employees Employment Palm Beach Country School Board 22,049 2.98%21,718 3.53% State Government 9,924 1.34%7,433 1.21% Federal Government 6,915 0.93%6,423 1.04% Tenet Health Care Corp 6,505 0.88%5,127 0.83% Palm Beach County Government 5,438 0.73%11,381 1.85% NextEra Energy (Florida Power & Light) 4,807 0.65%3,658 0.59% Hospital Corporation of America (HCA) (1)2,806 0.38%4,150 0.67% Boca Raton Regional Hospital (2)2,800 0.38%2,100 0.34% Florida Alantic University 2,898 0.39%2,776 0.45% Veterans Health Administration 2,700 0.36%2,205 0.36% The Breakers Hotel 2,300 0.31%1,800 0.29% Bethesda Memorial Hospital 2,282 0.31%2,300 0.37% Office Depot 2,000 0.27%2,100 0.34% Florida Crystal Corp.2,000 0.27%1,900 0.31% Jupiter Medical Center 1,780 0.24%1,500 0.24% City of West Palm Beach 1,679 0.23%1,671 0.27% City of Boca Raton 1,513 0.20%1,638 0.27% 80,396 10.85%79,880 12.96% *** FY 2017 data is not available - FY 2007 & 2016 data presented * 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. Notes: (1) Formerly Columbia Palm Beach Health Care Systems, Inc (2) Formerly Boca Raton Community Hospital Source: Business Development Board of Palm Beach County, floridajobs.org VILLAGE OF NORTH PALM BEACH PRINCIPAL EMPLOYERS 2019 2009 111 2010 2011 2012 2013 2014 2015 2016 2017 2018 2019 Number of Employees: General Government Village Manager Full-Time 2 2 2 2 2 2 2 4 4 4 Part-Time 0 0 0 0 0 0 0 1 1 1 Information Technology Full-Time 2 2 3 3 3 3 3 3 3 3 Part-Time 1 1 0 0 0 0 0 0 0 0 Human Resources Full-Time 2 2 2 2 2 2 2 2 2 2 Part-Time 0 0 0 0 0 1 2 2 2 2 Village Clerk - Full-Time 3 3 3 3 3 3 3 3 3 3 Finance Full-time 5 5 5 5 5 7 7 5 6 6 Part-Time 1 1 1 1 1 0 0 1 0 0 Public Works Full-time 37 37 37 37 37 35 34 36 37 37 Part-Time 0 0 0 0 0 0 0 0 0 2 Police & Fire Full-time 67 67 0 0 0 0 0 0 0 0 Part-Time 12 12 0 0 0 0 0 0 0 0 Police Full-time 0 0 43 43 43 36 36 36 38 38 Part-Time 0 0 12 13 13 13 13 13 15 15 Fire Rescue Full-time 0 0 24 24 24 24 24 24 24 24 Part-Time 0 0 0 0 0 0 0 0 0 0 Community Development and Planning Full-time 9 9 8 8 10 11 12 13 14 15 Part-Time 2 2 2 2 1 0 0 1 1 1 Leisure Services Library Full-time 6 6 6 6 6 7 7 7 7 7 Part-Time 10 10 10 10 10 9 9 9 7 7 Recreation Full-time 7 6 6 6 6 6 6 6 6 6 Part-Time 42 43 43 43 43 43 43 43 42 42 Other Government - Country Club Full-time 5 7 5 6 8 8 8 5 5 6 Part-Time 21 64 56 54 65 65 65 27 27 27 234 279 268 268 282 275 276 241 244 248 * 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 LAST TEN FISCAL YEARS (*) Full-Time Equivalent Village Government Employees by Function Total Number of Employees Budgeted FY Ending 112 2010 2011 2012 2013 2014 2015 2016 2017 2018 2019 FUNCTION/PROGRAM PUBLIC WORKS Sanitation (Tons of Refuse Collected)10,165 9,962 10,065 10,720 10,720 11,167 12,556 12,980 12,624 12,330 No. of collection units for solid waste (residential) 7,070 7,071 7,076 7,471 7,616 7,618 7,614 7,614 7,632 7,632 Number of vehicles maintained 110 98 98 111 98 98 92 85 89 88 Number of repair overlays completed (miles)2.71 - - - - - - - - - POLICE Number of arrests by police officers 402 260 211 216 238 293 247 233 192 134 Number of traffic citations issued 4,951 2,564 2,566 1,254 2,799 3,407 2,494 1,974 2,014 1,184 FIRE RESCUE EMS average response times (minutes)5.12 5.19 5.26 5.11 5.10 5.05 5.26 5.21 5.37 4.50 Number of EMS calls 1,146 1,179 1,326 1,296 1,110 1,499 1,601 1,746 1,550 1,577 COMMUNITY DEVELOPMENT & PLANNING Bldg Dept - Number of Permits,Subpermits and certificates 1,744 1,616 1,835 2,480 2,103 3,920 4,242 4,665 2,173 2,737 Number of code enforcement violations/cases 391 575 817 790 887 769 680 **516/357**726/317 885 Number of code violations brought to board/magistrate (Calendar Yr End)38 72 100 62 28 56 42 98 246 263 RECREATION Number of community events presented 28 38 49 37 53 57 48 40 38 24 Number of registrants in athletic programs 1,005 1,260 1,311 2,074 1,439 1,389 1,174 1,109 1,174 1,077 LIBRARY Library - Number of Volumes 39,277 40,658 43,340 44,966 46,546 47,339 *57,935 41,161 43,992 45,446 OTHER GOVERNMENT Country Club Number of Golf Members 354 298 283 262 250 255 265 271 178 198 Number of Tennis Members 184 173 162 190 194 193 183 183 159 182 Source: Village of North Palm Beach *In FY 2016 Number of Volumes included not only printed items, but media items as well. **Includes only the number of violations/cases opened and not a reflection of the total number of open violations as was reported for years prior to 2017 VILLAGE OF NORTH PALM BEACH OPERATING INDICATORS BY FUNCTION/PROGRAM LAST TEN FISCAL YEARS 113 2010 2011 2012 2013 2014 2015 2016*2017 2018 2019 Function/Program: General Government No. of General Government Buildings 23 23 23 23 23 23 23 23 23 23 Public Works Square Miles 5.18 5.18 5.18 5.18 5.18 5.18 5.18 5.18 5.18 5.18 Miles of Streets 36.00 36.00 36.00 36.00 36.00 36.00 32.30**32.30 32.30 32.30 Number of Street Lights (within corp surroundings)513 513 513 513 513 513 513 628****628 628 Public Safety Fire: Number of Stations 1 1 1 1 1 1 1 1 1 1 Number of Firemen& Officers 0 0 0 0 0 0 0 0 0 0 Number of Firemen/Paramedics/EMTs 23 23 22 22 22 22 23 24 21 23 Number of Fire Captains 0 0 0 0 0 0 0 0 0 0 Police/EMS Protection: Number of Stations 1 1 1 1 1 1 1 1 1 1 Number of Policemen & Officers 31 31 28 28 28 28 28 28 30 28 Number of Police Captains 0 0 2 2 2 2.5 2.5 2.5 2.5 2.5 Leisure Services Recreation/Tennis/Pool Number of Parks 4 4 4 4 4 4 4 4 4 4 Public Tennis Courts 2 2 2 2 2 2 2 2 2 2 Swimming Pool 1 1 1 1 1 1 1 1 1 1 Number of Marinas 1 1 1 1 1 1 1 1 1 1 Library Number of Libraries 1 1 1 1 1 1 1 1 1 1 Number of Volumes (Printed items only)39,277 40,658 43,340 44,966 46,546 47,339 48,913 33,502 36,009 37,429 Other Government Country Club Golf Course 1 1 1 1 1 1 1 1 1 1 Driving Range 1 1 1 1 1 1 1 1 1 1 Tennis Courts 10 10 10 10 10 10 10 10 10 10 Restaurant 1 1 1 1 1 1 1 1***1***1 Snack Bar 1 1 1 1 1 1 1 1***1***1 Source: Village of North Palm Beach *Preliminary 2016 information is presented **A Centerline Miles Study was completed during FY 2016 and the number of NPB Village centerline miles from the report is presented going forward ***Restaurant services closed on 10/01/2016- Reopened in 2019 ****173 Village owned/455 FPL owned VILLAGE OF NORTH PALM BEACH LAST TEN FISCAL YEARS CAPITAL ASSET STATISTICS BY FUNCTION/PROGRAM 114 OTHER REPORTS 115 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 The Village of 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, 2019, 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 11, 2020. 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. 116 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 11, 2020 117 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 The Village of North Palm Beach, Florida Report on the Financial Statements We have audited the financial statements of the Village of North Palm Beach, Florida, as of and for the fiscal year ended September 30, 2019, and have issued our report thereon dated March 11, 2020. Auditor’s Responsibility We conducted our audit in accordance with auditing standards generally accepted in the United States of America; 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 Auditor General. Other Reporting Requirements 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 the Financial Statements Performed in Accordance with Government Auditing Standards and Independent Accountant’s Report on an examination conducted in accordance with AICPA Professional Standards, AT-C Section 315, regarding compliance requirements in accordance with Chapter 10.550, Rules of the Auditor General. Disclosures in those reports, which are dated March 11, 2019, should be considered in conjunction with this management letter. Prior Audit Findings Section 10.554(1)(i)1., Rules of the Auditor General, requires that we determine whether or not corrective actions have been taken to address findings and recommendations made in the preceding financial audit report. Finding 2018-1 is a comment from the prior year that still applies. 118 Official Title and Legal Authority Section 10.554(1)(i)4., Rules of the Auditor General, requires that the name or official title and legal authority for the primary government and each component unit of the reporting entity be disclosed in this Management Letter, unless disclosed in the notes to the financial statements. This information is disclosed in Note 1 to the financial statements. Financial Condition and Management Sections 10.554(1)(i)5.a. and 10.556(7), Rules of the Auditor General, require us to apply appropriate procedures and communicate the results of our determination as to whether or not the Village of North Palm Beach, Florida has met one or more of the conditions described in Section 218.503(1), Florida Statutes, and to identify the specific condition(s) met. In connection with our audit, we determined that the Village of North Palm Beach, Florida did not meet any of the conditions described in Section 218.503(1), Florida Statutes, during the fiscal year ended September 30, 2019. Pursuant to Sections 10.554(1)(i)5.b. and 10.556(8), Rules of the Auditor General, we applied financial condition assessment procedures. It is management’s responsibility to monitor the Village of North Palm Beach, Florida’s financial condition, and our financial condition assessment was based in part on representations made by management and the review of financial information provided by same. Our assessment was done as of the fiscal year end. The results of our procedures did not disclose any matters that are required to be reported. Section 10.554(1)(i)2., Rules of the Auditor General, requires that we communicate any recommendations to improve financial management. In connection with our audit, we did not have any such recommendations. Special District Component Units Section 10.554(1)(i)5.c, Rules of the Auditor General, requires, if appropriate, that we communicate the failure of a special district that is a component unit of a county, municipality, or special district, to provide the financial information necessary for proper reporting of the component unit, within the audited financial statements of the county, municipality, or special district in accordance with Section 218.39(3)(b), Florida Statutes. Based on the application of criteria in publications cited in Section 10.553, Rules of the Auditor General, there are no special district component units of the Village of North Palm Beach, Florida. Additional Matters Section 10.554(1)(i)3., Rules of the Auditor General, requires us to communicate noncompliance with 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 warrants the attention of those charged with governance. In connection with our audit, we had one finding. 119 Finding 2018-1 The 2006 loan agreement with Bank of America requires that pledged revenues cover 100% of the debt service due plus the expenses, other than non-cash expenses, of owning and operating the Country Club. Due to the Golf Course and Country Club being closed for part of the year for renovations this requirement was not met. Management Response Continued work on the North Palm Beach Country Club clubhouse construction and golf course renovation projects disrupted the Country Club’s ability to deliver services and resulted in significant revenue loss in the Country Club. Without the revenues from the operation of the Country Club, the General Fund is supporting the debt service associated with the projects until the Country Club returns to full operation. All required debt service payments have been paid on time for the loan. Single Audits The Village expended less than $750,000 of federal awards and less than $750,000 of state financial assistance for the fiscal year ended September 30, 2019, and was not required to have a federal single audit or a state single audit. Response to Management Letter The Village of North Palm Beach, Florida’s response to the finding identified in our audit is described above. The Village of North Palm Beach, Florida’s response was not subjected to the auditing procedures applied in the audit of the financial statements and, accordingly, we express no opinion on it. Purpose of this Letter 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, Federal and other granting agencies, the audit committee, the Village Council, and applicable management, and is not intended to be and should not be used by anyone other than these specified parties. March 11, 2020 West Palm Beach, Florida 120 INDEPENDENT ACCOUNTANT’S REPORT ON COMPLIANCE WITH SECTION 218.415, FLORIDA STATUTES The Honorable Mayor and Members of the Village Council The Village of North Palm Beach, Florida We have examined the Village of North Palm Beach, Florida’s compliance with Section 218.415, Florida Statutes during the year ended September 30, 2019. Management of the Village of North Palm Beach, Florida is responsible for the Village of North Palm Beach, Florida’s compliance with the specified requirements. Our responsibility is to express an opinion on the Village of North Palm Beach, Florida’s compliance with the specified requirements based on our examination. Our examination was conducted in accordance with attestation standards established by the American Institute of Certified Public Accountants. Those standards require that we plan and perform the examination to obtain reasonable assurance about whether the Village of North Palm Beach, Florida complied, in all material respects, with the specified requirements referenced above. An examination involves performing procedures to obtain evidence about whether the Village of North Palm Beach, Florida complied with the specified requirements. The nature, timing, and extent of the procedures selected depend on our judgement, including an assessment of the risk of material noncompliance, whether due to fraud or error. We believe that the evidence we obtained is sufficient and appropriate to provide a reasonable basis for our opinion. Our examination does not provide a legal determination on the Village of North Palm Beach, Florida’s compliance with the specified requirements. In our opinion, the Village of North Palm Beach, Florida complied, in all material respects, with Section 218.415, Florida Statutes for the year ended September 30, 2019. This report is intended solely for the information and use of the Legislative Auditing Committee, members of the Florida Senate and Florida House of Representatives, the Florida Auditor General, applicable management, and the Village Council, and is not intended to be and should not be used by anyone other than these specified parties. West Palm Beach, Florida March 11, 2020