Fort Walton Beach Council agenda — 03-19-12--special--audit — reading text

redevelopment fund is the operating fund of the Fort Walton Beach Community Redevelopment Agency ( the Agency "). It is used to account for the activities of the Agency. Proprietary Proprietary funds focus on the determination of net income, changes in net assets, financial position, and cash flows. All of the City's proprietary funds are enterprise funds, as fees are charged to external users for services. The following is a description of the major proprietary funds of the City : Uldnies Fund - Used to account for the operations of the City, which provides distribution of potable water, sales and service and sanitary wastewater collection, treatment and disposal. Sanitation Fund - Accounts for the operation of the City that provides for solid waste collection and disposal. 33 Packet Pg., Sg:k  31. City of Fort Walton Beach, Florida NOTES TO FINANCIAL STATEMENTS September 30, 2012 NOTE 1 - SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES ( CONTINUED) D. Basis of Presentation (Continued) Proprietary ( Continued) Golf Fund - Accounts for the operations and maintenance of the City -owned golf courses. Fiduciary Fiduciary funds are used to account for the assets held on behalf of outside parties, including other governments. or on behalf of other funds within the City. The City has the following type of Fiduciary funds: Pension Trust Funds - Used to report the resources that are required to be held in trust for the members and beneficiaries of the three defined benefit pension plans administered by the City: General Employees' Retirement Fund, Police Officers' Retirement Fund, and Firefighters' Retirement Fund. E. Assets, Liabilities, and Net Assets or Equity Cash and Cash Equivalents The City considers all highly liquid investments ( including restricted assets) with a maturity of 90 days or less when purchased, and investments with the State Board of Administration ( SBA), to be cash equivalents. Additionally, each fund' s equity in the City's investment pool ( see Note 3) is considered to be cash equivalent since the funds can deposit or effectively withdraw cash at any time without prior notice or penalty. 34 Packet Pg, 6g;.  3. 1. a City of Fort Walton Beach, Florida NOTES TO FINANCIAL STATEMENTS September 30, 2012 NOTE I - SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES ( CONTINUED) E. Assets, Liabilities, and Net Assets or Equity (Continued) Deposits and Investments Section 218. 415, Florida Statutes, requires the investment of surplus public funds and prescribes the instruments in which those investments are authorized, specifically the State of Florida Local Government Surplus Funds Trust Fund, direct obligations of the United States Government or other obligations unconditionally guaranteed by the United States Government, collateralized interest-bearing time deposits or savings accounts in state or federal banks or savings and loan associations, debt securities of the Federal Farm Credit Banks, the Federal Home Loan Mortgage Corporation, the Federal Home Loan Bank, the Government National Mortgage Association, the Federal National Mortgage Association, and securities of or other interest in certain investment companies or investment trusts, the portfolio of which is limited to United States Government obligations or repurchase agreements fully collateralized by such obligations. The City adheres strictly to the provisions of those cited Statutes. as well as with Chapter 280. Florida Statutes, which requires the City to maintain deposits only with " Qualified Public Depositories." The City maintains a cash and investment pool available for use by all funds and the Community Redevelopment Agency. Earnings from such investments are allocated to the respective funds based on applicable cash participation by each fund. In addition. restricted cash accounts, certificates of deposit, and other investments are separately maintained by a few City funds in accordance with bond ordinances, retirement fund plan documents and other contractual agreements. Investments are stated at fair value, based on quoted market prices. 35 Packet Pg. Bte  3. t. a City of Fort Walton Beach, Florida NOTES TO FINANCIAL STATEMENTS September 30, 2012 NOTE 1 - SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES (CONTINUED) E. Assets, Liabilities, and Net Assets or Equity ( Continued) Deposits and Investments ( Continued) The City' s cash and investment pool and certain individual funds participate in the Local Government Surplus Trust Fund - Florida PRIME and Fund B, operated by Florida' s State Board of Administration ( SBA). The SBA is governed by Chapter 19 -1 of the Florida Administrative Code ( FAQ. The FAC provides guidance and establishes the general operating procedures for the administration of the Local Government Surplus Trust Funds. Additionally. the Florida Auditor General performs an operational audit of activities and investments of the SBA. GASB Statement No. 31, titled Accounting and Financial Reporting for Certain Irmestmenls and for External Inveshnent Pools, applies to the Florida PRIME and Fund B. GASB 31 outlines the two options for accounting and reporting for money market investment pools as either " 2a -7 like" or fluctuating net asset value ( NAV). GASB 31 describes a 2a -7 like" pool as an external investment pool that is not registered with the Securities and Exchange Commission ( SEC) as an investment company, but nevertheless has a policy that it will, and does, operate in a manner consistent with Rule 2a -7 under the Investment Company Act of 1940 ( the 1940 Act). Rule 2a -7 is the rule that permits money market funds to use amortized cost to maintain a constant NAV of $ 1. 00 per share, provided that such funds meet certain conditions. City investments with the SBA may be made or liquidated by wire on a same day basis, subject to limitations described in Note 3. The Florida PRIME is considered a SEC " 2a -7 like" fund, thus the account balance is also considered the fair value of the City's investment. The Fund B is accounted for as a fluctuating NAV pool. The Fair Value factor for September 30, 2012, was . 94896811 percent. The account balance was multiplied by the factor in order to report the fair value of the City' s investment in Fund B. Pension Trust Funds may invest in direct obligations of the United States Government or other obligations unconditionally guaranteed by the United States Government, collateralized interest- bearing time deposits or savings accounts in state or federal banks or savings and loan associations, bonds or indebtedness of United States corporations rated BAA or better, stocks of U. S. corporations which are listed on the national stock exchanges ( limited to 50% of the assets of the fund) and investment accounts maintained by major national banks and insurance companies given the top rating by Best. In addition to the above investment options, the Firefighters' Retirement Pension Trust Fund may invest up to 20% of its assets at cost in real estate. 36 5acketAV.$62  3. t. a City of Fort Walton Beach, Florida NOTES TO FINANCIAL STATEMENTS September 30, 2012 NOTE 1 - SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES ( CONTINUED) E. Assets, Liabilities, and Net Assets or Equity ( Continued) Deposits and Investments ( Continued) Bond Sinking Fund Investments are limited by bond ordinances to investments in direct obligations of the United States govermnent or other marketable securities eligible as security of trust funds under regulations of the Board of Governors of the Federal Reserve System. The maturity date on Sinking Fund Investments is limited by the individual bond ordinances to correspond to the related debt service payments. Receivables and Parables Interfund transactions are reflected as loans. services provided, reimbursements, or transfers. Loans between funds outstanding at the end of the fiscal year are referred to as either " due to other funds" or " due from other funds" ( i. e., the current portion of interfund loans) or " advances" ( i. e.. the non -current portion of interfund loans). Any residual balances outstanding between governmental activities and business -type activities are reported in the government -wide financial statements as " internal balances." Advances between funds, as reported in the fund financial statements, are offset by a fund balance nonspendable account in applicable governmental funds to indicate that they are not available for appropriation and are not expendable available financial resources. Services provided, deemed to be at market, or near market rates. are treated as revenues and expenditures /expenses. Reimbursements occur when one fund incurs a cost, charges the appropriate benefiting fund, and reduces its related cost as a reimbursement. All other interfund transactions are treated as transfers. Transfers between governmental or proprietary funds are netted as part of the reconciliation to the government -wide columnar presentation. All proprietary fund receivables are shown net of an allowance for uncollectibles. The allowance is computed by considering 100% of receivables in excess of 90 days. past trends on collections of accounts, and current year account write -offs. Inventory Inventory is valued at cost ( first -in, first -out). The consumption method is used to