THE CITY OF PENSACOLA, FLORIDA
COMPREHENSIVE ANNUAL FINANCIAL REPORT
FOR THE YEAR ENDED SEPTEMBER 30, 2009
Prepared by: Financial Services Department
Richard Barker, Jr. Director of Finance
ACCOUNTING STAFF Pamela Childers, CPA, CGFO Amber McClure, CPA Laura Picklap, CPA
CITY OF PENSACOLA, FLORIDA COMPREHENSIVE ANNUAL FINANCIAL REPORT YEAR ENDED SEPTEMBER 30, 2009
TABLE OF CONTENTS
I. INTRODUCTORY SECTION Letter of Transmittal 1-12 Government Finance Officer’s Association Certificate of Achievement 13 Organizational Chart 14 List of Elected and Appointed Officials 15-16
II. FINANCIAL SECTION Independent Auditors’ Report 17-18
A. MANAGEMENT’S DISCUSSION AND ANALYSIS (REQUIRED SUPPLEMENTARY INFORMATION) 19-37
B. BASIC FINANCIAL STATEMENTS
Government-wide Financial Statements Statement of Net Assets 38-39 Statement of Activities 40-41
Fund Financial Statements Governmental Funds Financial Statements Balance Sheet 42-43 Statement of Revenues, Expenditures, and Changes in Fund Balances 44 Reconciliation of the Statement of Revenues, Expenditures, and Changes in Fund Balances of Governmental Funds to the Statement of Activities 45 Statement of Revenues, Expenditures, and Changes in Fund Balances – Budget and Actual – General Fund 46 Statement of Revenues, Expenditures, and Changes in Fund Balances – Budget and Actual – Housing Assistance Payments Fund 47
Proprietary Funds Financial Statements Statement of Net Assets 48-49 Statement of Revenues, Expenses, and Changes in Fund Net Assets 50 Statement of Cash Flows 51-52
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CITY OF PENSACOLA, FLORIDA
TABLE OF CONTENTS (CONTINUED)
Fiduciary Funds Financial Statements Statement of Net Assets 53 Statement of Changes in Net Assets 54
Notes to Financial Statements Note I – Summary of Significant Accounting Policies 55-64 Note II – Stewardship, Compliance, and Accountability 64 Note III – Detail Notes on All Funds 65-81 Note IV – Other Information 81-94 Note V – Subsequent Events 95-96
C. REQUIRED SUPPLEMENTARY INFORMATION (OTHER THAN MD&A)
Pension Funds – Schedule of Employer Contributions and Analysis of Funding Progress 97-100
D. COMBINING FINANCIAL STATEMENTS Nonmajor Governmental Funds Balance Sheet 101-104 Statement of Revenues, Expenditures, and Changes in Fund Balances 105-108 Schedule of Revenues, Expenditures, and Changes in Fund Balances – Budget and Actual – Local Option Sales Tax Fund 109 Schedule of Revenues, Expenditures, and Changes in Fund Balances – Budget and Actual – Nonmajor Governmental Funds 110-122
Internal Service Funds Statement of Net Assets 123 Statement of Revenues, Expenses, and Changes in Fund Net Assets 124 Statement of Cash Flows 125-126
Fiduciary Funds Statement of Net Assets 127 Statement of Changes in Net Assets 128
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CITY OF PENSACOLA, FLORIDA
TABLE OF CONTENTS (CONTINUED)
III. STATISTICAL SECTION Financial Trends Changes in Net Assets 129-130 Net Assets by Component 131 Program Revenues by Function/Program 132 Fund Balances, Governmental Funds 133 Changes in Fund Balances, Governmental Funds 134 Revenue Capacity Assessed Value and Estimated Value of Taxable Property 135 Direct and Overlapping Property Tax Rates 136 Principal Property Tax Payers 137 Property Tax Levies and Collections 138 Taxable Sales by Category 139 Direct and Overlapping Sales Tax Rates 140 Sales Tax Revenue Payers by Industry 141 Gas Sold in Mcfs by Type of Customer 142 Gas Rates 143 Debt Capacity Ratios of Outstanding Debt by Type 144 Direct and Overlapping Governmental Activities Debt 145 Pledged-Revenue Coverage 146-147 Demographic and Economic Information Demographic and Economic Statistics 148 Principal Employers 149 Operating Information Operating Indicators by Function/Program 150-151 Capital Asset Statistics by Function/Program 152-153 Full-time-Equivalent City Government Employees by Function/Program 154
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CITY OF PENSACOLA, FLORIDA
TABLE OF CONTENTS (CONTINUED)
IV. OTHER AUDIT REPORTS SECTION Independent Auditor’s Report on Internal Control Over Financial Reporting and on Compliance and Other Matters Based on an Audit of Financial Statements Performed in Accordance with Government Auditing Standards 155-156 Independent Auditor’s Report on Compliance with Requirements Applicable to Each Major Federal Program, State Project and Passenger Facility Charge Program and on Internal Control Over Compliance in Accordance with OMB Circular A-133 157-158 Schedule of Findings and Questioned Costs-Federal Programs and State Projects 159-160 Summary Schedule of Prior Year Audit Findings 161 Schedule of Expenditures of Federal Awards, Passenger Facility Charge 162-163 And State Financial Assistance Management Letter 164-166 Financial Data Schedule 167-168
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INTRODUCTORY SECTION
LETTER OF TRANSMITTAL
CERTIFICATE OF ACHIEVEMENT FOR EXCELLENCE IN FINANCIAL REPORTING
CITY OF PENSACOLA ORGANIZATIONAL CHART
LIST OF ELECTED AND APPOINTED OFFICIALS
February 15, 2010
The Honorable Michael C. Wiggins, Mayor And Members of the City Council City of Pensacola Pensacola, Florida
Pursuant to applicable Florida Statutes and sound financial management practices, the Comprehensive Annual Financial Report (CAFR) of the City of Pensacola, Florida, for the fiscal year ended September 30, 2009, has been prepared and is submitted herewith.
The City of Pensacola's CAFR was prepared by the Financial Services Department. Responsibility for both the accuracy of the presented data and completeness and fairness of the presentation, including all disclosures, rests with the City. City management believes that the report is a fair presentation of the City's financial position and results of operations as measured by the financial activity of its various funds, that presented data is accurate in all material aspects and that all disclosures necessary to enable the reader to gain maximum understanding of the City's financial affairs have been included.
This report has been presented in accordance with Generally Accepted Accounting Principles (GAAP). These principles require that management provide a narrative introduction, overview, and analysis to accompany the basic financial statements in the form of Management’s Discussion and Analysis (MD&A). The Letter of Transmittal is designed to complement MD&A and should be read in conjunction with it. The City of Pensacola’s MD&A can be found immediately following the report of the independent auditors.
The Reporting Entity
The financial reporting entity includes all funds of the primary government, as well as all of its component units. Component units are legally separate organizations for which the City is financially accountable and, for financial statement purposes, are either blended with the activities of the City or discretely presented. The criteria used to determine whether an organization should be a part of the City’s reporting entity were those outlined by Governmental Accounting Standards Board Statement No. 14, The Financial Reporting Entity.
1 The Downtown Improvement Board has been classified as a component unit and is discretely presented in the City’s annual financial report as a separate column in the government-wide financial statements. The Community Redevelopment Agency, an independent agency of the City, also meets the definition of a component unit; however its financial reporting is blended with the City’s financial activity.
Form of Government
The City operates under a Council-Manager form of government. The City Council consists of ten members. Members of the City Council serve for two-year terms. Seven members of the City Council are elected from single-member districts and the other three members, including the Mayor, are elected at-large. The City Council is the legislative and governing body of the City. The City Manager is appointed by the City Council and is responsible for implementing the policies and legislative actions of the City Council.
The City of Pensacola provides a full range of municipal services including public works, public safety, health and social services, recreation and cultural activities. In addition, the City’s enterprise activities include a gas utility, sanitation collection system, seaport, and regional airport.
On November 24, 2009 a referendum to change the City’s charter received fifty-five percent voter approval. The Council-Manager structure changed to a Mayor-Council form of government effective January 11, 2010. The Mayor and Council will be seated with the November 2010 election. With the new structure, the Mayor will not be a member of Council, will not have voting power and has a four year term of office as opposed to a two year term. Members of Council are limited to three consecutive four year terms. Every ten years the Charter Review Commission will be established to review the City’s charter. City Council adopted the new charter on November 25, 2009.
In November 2008 the County Commission and City Council passed a resolution to support the establishment of a Consolidated Study Commission of which they appointed 25 members tasked to study, debate and generate a consolidated plan for referendum. The plan proposes the consolidation of the City of Pensacola, Escambia County and Town of Century. The Town of Century voted a year ago to pull its support. The Escambia County Commissioners voted at their January 2010 meeting to send a letter to the Northwest Florida Legislative Delegation saying Commissioners do not support the current draft thereby delaying the referendum to the November 2012 ballot. The Mayor of the City of Pensacola sent notification to the Delegation that at the January 25, 2010 Pensacola City Council Committee of the Whole meeting the motion to approve the Proposed Charter for Consolidated Government failed. On January 15, 2010 the Escambia County Consolidated Study Commission forwarded its proposed consolidation plan to the Delegation for consideration. If approved by the Delegation, the proposal will be sent to the State of Florida House of Representatives for consideration.
Accounting and Internal Controls
Management of the City is responsible for establishing and maintaining internal controls. Internal accounting controls are designed to provide reasonable, but not absolute, assurance regarding the safeguarding of assets against loss through unauthorized use or disposition; the reliability of financial records for preparing financial statements and maintaining accountability 2 for assets. The concept of reasonable assurance recognizes that the cost of a control should not exceed the benefits likely to be derived and the evaluation of costs and benefits requires estimates and judgments by management.
Budget Process
The budget process for the City of Pensacola does not have an easily identifiable beginning or end. During the course of each fiscal year, new initiatives for services, regulations, funding sources, better methods of providing existing services, and citizen comments are brought forward for discussion, study and implementation. Although the budget document is developed at a fixed point in time, and identifies a work plan for a specific period of time, the budget process is fluid.
There are a number of tools used throughout the course of the fiscal year to report on the status of the budget. City Council is briefed quarterly on comparisons of revenues and expenditures to budgeted numbers. Monthly reports are generated for staff review to provide a more frequent overview of the financial status as compared to budget. At fiscal year end the City’s CAFR, which provides end of year results, is compared to the respective budget to assist in revenue forecasting and expenditure analysis for the next budget cycle. Budget transfers (transfers of amounts from one line item to another) and Supplemental Budget Resolutions are the only means to amend an adopted budget. Two public hearings are held before the adoption of the final budget and final millage rates.
Debt Administration
Debt administration is the responsibility of the City’s Director of Finance. Additional assistance is employed through the services of RBC Capital Markets, the City’s Financial Advisors.
On December 31, 2008 the City borrowed $4.2 million in a bank financing to fund energy conservation projects through a Basic Operating Agreement (BOA) for the United States Navy. The City entered into a contract with a subcontractor to perform the services to be rendered and is thereby acting only as a conduit for financing. On October 7, 2009 the Navy accepted the project and the note receivable was sold to Bank of America on October 29, 2009 and the debt was removed from the City’s proprietary type Utility Fund.
On December 21, 2009 the City issued $45.6 million of Redevelopment Revenue Bonds, Series 2009 A and B to fund a $40 million construction fund for the construction of public structures related to the Community Maritime Park. Tax Increment Financing (TIF) revenues were pledged to the payment of debt service along with Federal Direct Payments relating to the Series B Bonds. In addition the City has a covenant to budget and appropriate from non-ad valorem revenues sufficient funds to pay debt service after application of pledged revenues. The issue is a mix of serial and Build America Bonds (BABs). The final maturity of the bond is in 2040.
Pledged revenues for business-type debt are typically the sole pledge of net revenues from operations, however, from time to time there are pledges of specific revenue streams. In fiscal year 2009, business-type activities paid a total of $3.1 million and $4.5 million respectively for principal and interest on bonds. The Utility Fund paid in full the 2007 Gas Utility Revenue Note in the amount of $792,705. Revenues traditionally pledged for general government type debt include public service taxes, franchise fees, sales taxes and tax increment revenues. The City paid a total of $3.4 million and $1.3 million, respectively for principal and interest, for
3 governmental activities debt during fiscal year 2008. The City typically issues debt with a levelized structure thereby eliminating large increases and decreases in principal payments from year to year. The City has no general obligation debt.
In January 2009, Standard & Poor’s affirmed the Airport’s BBB+/Stable rating on approximately $30.6 million of outstanding Airport Revenue Bonds, Series 2008A based on the stable origination and destination nature of the airport’s air trade service area along with the airport’s moderate cost structure. The Gas System Revenue Bonds, Series 2008 received an A2 rating on August 10, 2009 from Moody’s. Standard & Poor’s and Fitch Ratings-New York assigned the AA- rating to the City’s Redevelopment Revenue Bonds, Series 2009A and 2009B. Concurrently, Fitch also assigns an AA- to the City’s Capital Improvement Revenue Bonds, 2000A and 2000B and an AA implied general obligation rating.
Prior to July 2008 insurance was purchased for all bonded debt issued by the City of Pensacola. The insured rating for the City’s debt will fluctuate because it is dependent on the rating of the insurance provider. The 2008 Airport Revenue Bonds were issued without insurance using only its underlying credit rating. Underlying ratings obtained at issuance typically remain constant and are at times affirmed. The City also has multiple borrowings from the Gulf Breeze Loan Pool Program (GBLP) however these bonds are issued under the GBLP name and not the City of Pensacola. The City’s obligation is evidenced by a promissory note
The impact of the fluctuations in the financial market and any downgrade or potential of bond insurers’ ratings have not impacted the City’s ability to remit debt service payments. The City continues to remit payment timely and in full. The City is aware that the market conditions may impact future debt issuances.
The City of Pensacola issues an annual Report to Bondholders published on or before March 31 of each year. In addition, the City is in compliance with all continuing disclosure requirements. Both the Comprehensive Annual Financial Report and the Report to Bondholders should be read in conjunction to get a clear and complete understanding of the market effect on the City of Pensacola.
Energy Services of Pensacola
Energy Services of Pensacola (ESP) became a City-owned utility on April 27, 1948, upon its purchase from the Gulf Power Company. ESP supplies natural gas to approximately 59,000 customer services and is the largest municipal gas distribution system in Florida.
During fiscal year 2009, ESP’s net operating income decreased $1,639,667 from last year to $8,191,805. ESP billed $47,925,799 in revenues, a decrease over the previous year of $9.9 million (17%). The revenue decrease is attributable to the decreased cost of natural gas which is passed through to the customer coupled with a slumping economy. Operating expenses decreased $8.2 million (17%) over fiscal year 2009 mainly from the decreased cost of natural gas. The revenue classification for billed gas service is 49.5 percent residential, 30.6 percent commercial and 19.9 percent industrial.
Fiscal year 2010 estimated revenues of $53.2 million are budgeted below previous year actuals of $55.4 million. The reduction comes as rates and fees are reduced slightly to the Consumer Price Index (CPI) and in anticipation of a consumption reduction as consumers are cost 4 conscious during these economic times. During fiscal year 2009 City Council elected to discontinue the gas piping services after an outcry from local plumbers who felt that ESP was competing against them for those services. Appropriations are decreased primarily due to personal service savings from the discontinuation of the meter reading activity with the implementation of the Automated Meter Reading system, personal service and contractual service savings from the discontinuation of the gas piping line of business. ESP’s transfer to the General Fund is budgeted to remain at $8.0 million. The transfer is within the City Council adopted financial planning policy that permits a transfer of up to 15 percent of budget revenues.
Sanitation Services
The City has operated a solid waste collection system for over fifty years. Sanitation service is mandatory within the City limits and the city provides residential garbage, recycling and trash collection to approximately 19,000 customers. Commercial dumpster services are provided by private hauling companies that are franchised by the City and regulated by the department.
During fiscal year 2009, Sanitation’s net operating loss increased $717,382 from last year’s loss to $1,147,321. Sanitation billed $6,386,409 in revenue; a decrease of $333,357 (5%) over fiscal year 2008 total revenues. Revenues decreased as a result of the economic downturn. Operating expenses increased seven percent over last year from $7.2 million to $7.5 million due to the purchase of garbage receptacles for the implementation of the recycling program.
Fiscal year 2010 estimated revenues of $6.7 million are budgeted higher than prior year actuals of $6.5 million. Appropriations decreased $198,400 (3%) mainly due to the deletion of one position and the anticipated decline in general pension and longevity costs.
Port of Pensacola
The Port of Pensacola is a department of the City providing marine terminal services connecting water and land transportation. Revenues are generated through fees for wharfage, handling, dockage, rent, storage, security, and harbor services. Rates are established in a published, publicly available tariff. The two basic categories of freight are general cargo and bulk cargo.
During fiscal year 2009, the Port billed $1,278,751 in revenues, a decrease of $536,752 (29.6%) over fiscal year 2008. The net operating loss increased $468,410 from last year’s loss to $1,517,794. The decline in ship calls and cargo volumes due to the national economic downturn and its impact on worldwide trade are the reason for the slump in revenues and increased operating loss.
For many years the Port of Pensacola has been the recipient of Florida Seaport Transportation and Economic Development Trust Fund (FSTED) monies to fund capital projects. During fiscal year 2009, the City received $300,000 for the freezer warehouse expansion and $250,000 for maintenance dredging for a total of $4,454,251 in FSTED grants since inception of the program.
Fiscal year 2010 estimated revenues of $2.1 million are budgeted is $184,100 (7.9%) lower than the prior year in response to the economic condition. Appropriations are budgeted in line with last year’s operating expenses.
5 Pensacola Gulf Coast Regional Airport
The City of Pensacola owns and operates the Pensacola Gulf Coast Regional Airport which plays an important role in the national, state, and local air transportation systems. It is the primary commercial service airport serving northwestern Florida and southern Alabama with its primary service area encompassing Escambia, Santa Rosa, Walton and Okaloosa Counties in Florida and part of Baldwin and Mobile Counties in Alabama. During fiscal year 2009, 1.4 million total passengers utilized the Airport and were serviced by two major/national passenger airlines and up to ten regional/commuter airlines.
The Airport had a net operating loss of $3,955,750; a $4,622,972 difference from last year’s profit of $667,222. The Airport had operating revenues for fiscal year 2009 of $14,974,240, a $2.7 million (15%) decrease over fiscal year 2008. The decrease in operating revenues is primarily due to the decline in the Airline industry nationwide thereby reducing flights to Pensacola and the number of enplaned passengers. Operating expenses increased over 2008 by $1.9 million (11%) which is mainly attributable to operating needs associated with the new Rental Car Service Facilities, Air Commerce Park property acquisitions and the terminal renovation and expansion project.
The 2010 estimated revenue budget of $28,781,800 is $557,100, a 1.9 percent increase over last year’s. An additional fund balance drawdown of $1.4 million contributed to the increase. The Airport’s agreement with the airlines provides for the airlines to fund any revenue shortfall. Landing fees are adjusted each year to accommodate the agreement. Appropriations for operating expenses increased $967,100 over the prior year budget primarily for the debt service associated with the purchase of a piece of property on 12th Avenue.
Current Year Events and Future Year Plans
The Pensacola City Council approved the fiscal year 2009 budget of $213.7 million, an increase of $1.9 million over the 2008 budget. The increase, though minimal City-wide, was significant to the General Fund and Capital Projects Funds. The General Fund anticipated a loss of revenues of $3.7 million (7%) from a slowing economy and Amendment One which lowered the millage rate to 4.5395 mills and taxable values by $178 million. The Capital Projects Funds anticipated an increase of $3.4 million (41%) in expenditures mainly from the Saenger Theatre renovation and Roger Scott Tennis Center improvements.
In response to the revenue shortfalls and the approval of Amendment One, the City of Pensacola took action on a Thirty-Month Balanced Budget Plan. All departments identified programs within their responsibility with the focus on General Fund departments. The review resulted in reductions in budgeted positions, consolidation within departments as well as interdepartmental functional consolidation. The Thirty-Month Balanced Budget Plan will be continually reviewed and adjusted to maintain a balanced budget through September 2010.
Additional reductions to the City’s property tax revenues may be necessitated as, in the 2009 session, the Florida Legislature passed several additional property tax reduction initiatives that will appear on the November 2010 ballot as possible amendments to the State Constitution. In addition, there is likely to be more discussion in upcoming legislative sessions regarding cutting or restricting other revenue sources.
6 Departmental events and plans
The Planning Services Division of the Community Development Department has made progress in working towards realizing City Council's strategic goal, "responsive, customer-oriented City services" through its online development database allowing citizens to track projects and keep informed about planning related development in the City. The Department also provides a one- stop process to assist the public in obtaining input from administrators on Planning Services, Inspections Services, Public Works and Engineering. Planning Services has also completed the Evaluation and Appraisal Report (EAR) of the City's Comprehensive Plan, revised the City's Tree and Landscape ordinance and continues to maintain a current land development code.
The Neighborhood and Economic Development Division has continued to work toward achieving Council’s goal of “strong and more livable neighborhoods” through neighborhood economic development and revitalization efforts. These efforts include administration of the economic incentives available under the Enterprise Zone designation that continues to provide state and local economic development incentives to businesses starting-up, relocating or expanding within the Enterprise Zone, support of existing neighborhood associations and enhancement of the physical environment through administration of the Eastside and Westside Tax Increment Financing District funds. One of the neighborhood beautification projects managed by the staff is the installation of sidewalks through the Local Option Sales Tax funded sidewalk program. Since inception of the program, over 20 miles of sidewalks have been constructed in the City.
The Parks and Recreation Department was successful in improving the level of community participation with its new campaign “Play Pensacola” being launched in fiscal year 2009. The Osceola Golf Course saw an increase of 5,300 rounds of golf (17%) over fiscal year 2008. This increase in rounds resulted in higher revenues for the golf course which allowed the City to reduce the annual operating subsidy from the General Fund by $40,000 (22%). The Roger Scott Tennis Center also experienced increased revenues allowing for a $5,800 (9.5%) reduction in the annual operating subsidy from the General Fund.
During fiscal year 2009, the department established new corporate sponsorships and partnerships with the Young Men’s Christian Association (YMCA), Home Depot, Sam’s Club and several Navy groups from Pensacola Naval Air Station (NAS). The recreation division established 28 new programs and activities for youth and adults and the parks division maintained the City’s 92 parks. Major park facility improvements were completed at twelve parks, new playground structures were added to five parks, and trees were planted in eight parks and five medians. The department also opened the new Sander’s Beach-Corinne Jones Community Center in September 2009 to the public and has been a popular venue for meetings, wedding receptions, exercise programs and other special events.
The Public Works Department continues to meet its mission statement of providing courteous and quality service, while maintaining the City’s infrastructure. In addition, normal levels of service have been maintained in light of reductions in staffing. The department maintains 326 miles of roadway, forty-seven stormwater ponds, sixty-three various treatment units, eighteen ditches, 2,120 inlets and 130 major outfalls. Two new stormwater projects were completed in 2009. Street sweeper activities swept 27,015 miles of curbing removing 3,969 tons of debris. The department completed evaluations and enhancements for school zone areas and worked closely with neighborhood associations to initiate and provide support for traffic calming 7 committees. In addition, the department completed, through coordinated efforts with the Community Redevelopment Agency, the Palafox Two-Way Conversion Project from Main to Government Streets and the Baylen Street two-way conversion from Garden to Government streets.
The Community Redevelopment Agency (CRA), a 256-block area, was established in 1980. The past twenty-nine years has brought a variety of public and private sector redevelopment improvements. Several significant projects were completed or were nearing completion at the close of fiscal year 2009. A concession operator was secured and opened the concession and restroom facility for business at the Plaza de Luna waterfront park. The last phase of the Alcaniz streetscape construction project within the Old East Hill Historic District was significantly completed. Conversion of Palafox and Baylen Streets within the downtown core from one-way to two-way traffic was completed with coordinated efforts of the Public Works Department.
During fiscal year 2009, the CRA has undertaken the first comprehensive update to the CRA Plan since 1989. Upon adoption by the Pensacola City Council in January 2010, the Urban Core Community Redevelopment Area Plan 2010 will serve as the CRA's guiding document for annual budgeting and focus of activity. The new plan incorporates previous site specific plans and includes critical areas for future development including nine acres currently occupied by the Emerald Coast Utilities Authority (ECUA) Wastewater Treatment Plant, which is scheduled for demolition and disposal in 2012 and the City owned Bruce Beach area.
The series of special events introduced in 2008 to enliven public spaces and help stimulate additional economic activity in downtown retail shops and hospitality venues continued with greater success in 2009. The events included First Friday Live after Five (a monthly live band and street party), Friday Family Flicks (a monthly free outdoor movie), Sunsets at Plaza de Luna (weekly music and kid friendly performances) and Palafox Market (a weekly Saturday produce, food and artists' market). The events were well attended and many downtown venues reported an increase in retail activity attributable to the events. The most significant new event was launched in December 2008 for New Year's: Pensacola Pelican Drop™ New Year's Celebration. The first year event drew over 35,000 people to downtown Pensacola from throughout the Gulf Coast. The December 2009 event was even more successful drawing 15,000 (43%) more people for an estimated total of 50,000. Because of the unique nature of the event and its iconic Pelican, the CRA applied for and received a United States (U.S.) Copyright (VA 1-678-050) and has U.S. Trademark pending approval.
The Housing Department focused their efforts on supporting the increasing needs for assistance resulting from the slowing economy. Under the State Housing Initiatives Partnership (SHIP) Proviso First Time Homebuyers Programs, fifty-five families purchased existing or new homes. Under SHIP Housing Repair Assistance, twenty-five families received assistance with emergency repairs, such as roof, plumbing, electrical systems, and heating. The HOME Reconstruction Program provided three families with newly reconstructed homes and their own lot after demolition of their existing home.
8 The Community Development Block Grant (CDBG) Program provided rehabilitated homes for fourteen families. Funding was provided for 1,251 code enforcement inspections within the CDBG target area in an effort to continue the neighborhood revitalization process. Public services were provided for elderly City residents which included a total of 20,868 Meals on Wheels and Congregate Meals being served. The Homebuyers Club and Foreclosure Prevention Program provided counseling, guidance and educational materials to forty-six families, sixteen of which purchased homes within the corporate city limits.
The Section 8 Housing Choice Voucher Program reached a ninety-nine percent lease-up rate and provided rental assistance to an average of 2,269 tenants monthly. Goals for 2010 focus on providing a variety of affordable housing opportunities, including housing rehabilitation, repair, and reconstruction activities, first time homebuyer’s homeownership assistance, foreclosure prevention educational opportunities, rental assistance for an average of 2,200 families monthly, and public services for the elderly.
Energy Services of Pensacola (ESP) experienced steady growth in its gas piping division through fiscal year 2008. As economic conditions deteriorated, sales declined but the overall results were positive. Because of slowing construction activity and after an outcry from local plumbers who felt that ESP was competing for those services the gas piping program was suspended in the first quarter of fiscal year 2009.
Work with the United States Navy continues as ESP completed its second Basic Ordering Agreement (BOA) project for energy upgrades at Naval Air Station (NAS) Pensacola. The work was subcontracted to Siemens Building Technology and ESP received a gross profit of $329,000 as the primary contractor from the $4.3 million total project cost. ESP is negotiating with the Navy on future BOA projects.
The natural gas rate ordinance provides for an annual adjustment in rates based on the Consumer Price Index (CPI). The CPI adjustment is submitted to the City Council during the budgeting process for approval. The fiscal year 2010 CPI adjustment, effective October 1, 2009, decreased residential and commercial base rates by 0.4 percent.
Implementation of ESP’s Automated Meter Reading (AMR) project began in the summer of fiscal year 2008 with substantial completion achieved by the end of fiscal year 2009. The project is anticipated to be completed by mid 2010. The expansion and hardening of ESP’s Operations Center began in fiscal year 2009. Approximately 5,000 square feet of office space will be added that can be safely occupied by emergency response personnel during extreme weather events such as hurricanes. The expansion is anticipated to be complete in mid 2010.
The Sanitation Services and Fleet Management Department collected 31,034 tons of solid waste and 1,189 tons of recyclables in fiscal year 2009. The department also organized ten Sanitation Trash Elimination Project (STEP) cleanups and three neighborhood initiated cleanups during the year.
In January 2009, the department completed a two-year conversion of its yard trash collection system from three-person shuttle/collection crews to a system utilizing one-man collection trucks. This collection system change allowed for a reduction of seven employees over the two- year transition period and provided for a substantial savings in personnel cost. The funding needed to purchase the new equipment necessary to make this conversion possible was secured with an eight-year loan from the Local Option Sales Tax Fund.
9 In June 2009, the department began a city-wide curbside recycling program with collections made on a once-a-week schedule in conjunction with a change in garbage collection to a once-a- week schedule. To implement the recycling program it was necessary for the City to purchase recycling carts for 19,000 sanitation customers. A loan from the City’s Insurance Retention Fund secured the funding needed to purchase the carts and will repaid over a ten-year period from departmental revenues.
The Port of Pensacola experienced a decrease in revenues in fiscal year 2009 from a declining economy nationwide. Despite the challenging economic times, the Port attracted one new tenant to the Port in September 2009. Offshore Inland Marine & Oilfield Services began conducting offshore oil and gas exploration vessel and rig repair, sub-sea project mobilization and demobilization and light fabrication at the Port. This new customer is expected to generate an additional 12-18 vessel calls annually accounting for $228,550 of the Port’s fiscal year 2010 budgeted revenues. The company currently operates under a short-term operating agreement but has expressed its interest to formalize a long-term presence at the Port.
The Pensacola Gulf Coast Regional Airport continues its extensive expansion project in efforts to accommodate the demand of the traveling public. The project to construct four service facility centers and one quick-turn-around facility to be used by on-airport rental cars companies was substantially completed in May 2009. The Airport’s rental car agreements were also amended in July to allow for the rental of the four full-service facilities along with providing for all eight major rental car companies to operate as on-Airport concessionaires.
As part of the terminal expansion and improvement project, eight passenger loading bridges, two gas-powered emergency generators, and three modified baggage claim devices were purchased and installed in fiscal year 2009. Thirty-five percent completion of the construction of the ticketing area, screening area, in-line baggage screening system, concession bump-out and administration area of the terminal expansion project was achieved in fiscal year 2009. A new 500-space temporary shuttle parking lot was also constructed.
In November 2008, Council approved a ground lease and development agreement with Sandspur Development LLC for the development of a hotel and related facility on 11.44 acres of Airport property. A lawsuit was filed in the Escambia County Circuit Court by PNS Hotel Group Ltd. opposing the hotel agreement. Staff has communicated the City’s intent to stay all obligations under the Agreement pending the final decision on the lawsuit.
Further economic development efforts for the Airport include the construction of an Air Commerce Park. The Airport’s 2000 Master Plan identified sixty-five acres of property adjacent to the northwest quadrant of the airport for future land acquisition and the development of the park. The Airport started the commerce park land acquisition project in 2004 when the services of a relocation firm were secured. As of September 30, 2009, City Council approved the purchase of fifty parcels. A multi-year Florida Department of Transportation (FDOT) grant is in place that will fund seventy-five percent of the cost of acquisitions. This FDOT grant contains a provision that requires the Airport to repay FDOT twenty-five percent of the amount drawn within ten years. This repayment will ultimately make it a fifty percent matching grant. The remaining funding of this project is provided by a combination of the Airport’s capital budget, Passenger Facility Charge (PFC) revenues and the $2 million of City funds which were transferred to the Airport for the Roger Scott property purchase.
10 City-wide topics
In 2009, the Assistant City Manager retired; his position remains vacant in light of a reduced budget. The City experienced a 5.3 percent turnover rate in fiscal year 2009, which improved from the 2008 rate of 7.6 percent. Three mandatory retirements and one voluntary retirement in a key position are anticipated in fiscal year 2010.
The City of Pensacola purchased a 27.5 acre of waterfront land for approximately $3.5 million in the spring of 2000. The vision for the property was to build a community friendly park encouraging citizen involvement and economic growth. In 2005, a group of local business men responded to the City’s Request for Proposal with a plan to build a festival park complete with a 50,000 square foot maritime museum and research center, a 3,500 seat multi-use stadium to primarily house the Pensacola Pelicans baseball team, education facilities for the University of West Florida, public green space and waterfront access, residential, restaurant, office, and retail space. Public improvements are estimated at $40 million with an overall project cost estimated at $70 million. A separate non-profit entity called Community Maritime Park Associates (CMPA) was established to promote and oversee the development as well as manage the long term operation and maintenance of the park. Maritime Park Development Partners, LLC serve as the private master developer. The City Council voted on November 8, 2009 to preserve $10 million in State New Market Tax Credits (NMTC) to produce additional funding for the project. On December 21, 2009, the City issued $45.6 million of Redevelopment Revenue Bonds, Series 2009 A and B to fund the construction of the public improvements. The Community Maritime Park Associates and the University of West Florida are in the process of preparing a lease agreement and determining the availability of NMTC credits for the museum project. Construction is anticipated to begin in 2010.
During fiscal year 2007, the State discovered that a remittance error was made on behalf of Cox Communications. The error negatively impacted the City causing an immediate one time reduction of fund balance of $3.3 million in the General Fund and a reduction of fiscal year 2007 and future on-going revenues of $1.8 million. The $3.3 million reduction of prior year fund balance was placed into deferred revenue; however, the amount was reduced to $2.8 million in fiscal year 2008 when the state sent a letter confirming the overpayment. In March 2009, the City began recognizing the $2.8 million in deferred revenue and will continue to do so over a period of 36 months.
Independent Auditors
The Florida Statutes and the City’s Bond Resolutions require an annual audit of the City’s financial records by an independent certified public accountant. The City’s fiscal year 2009 financial statements have been audited by the certified public accounting firm of Saltmarsh, Cleaveland and Gund. The goal of the independent audit was to provide reasonable assurance that the financial statements are free of material misstatement.
The City is also required to undergo an annual audit to obtain reasonable assurance about compliance with the requirements of laws, regulations, contracts and grants applicable to each of its major federal programs and state projects.
11 Reporting Achievements
The Government Finance Officers Association (GFOA) of the United States and Canada awarded a Certificate of Achievement for Excellence in Financial Reporting to the City of Pensacola for its comprehensive annual financial report for the fiscal year ended September 30, 2008. 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, a government unit must publish an easily readable and efficiently organized comprehensive annual financial report, whose contents conform to program standards. Such comprehensive annual financial reports must satisfy both accounting principles generally accepted in the United States and applicable legal requirements. The City of Pensacola has been awarded a Certificate of Achievement for twenty-eight of its last twenty-nine fiscal years.
Acknowledgements
The City’s accounting staff, as always, is dedicated in preparing a timely and accurate comprehensive annual financial report. Appreciation is expressed to all those who assisted and contributed to its preparation and to the Mayor and City Council for the continued interest and support of a fiscally sound City government.
Respectfully submitted,
Alvin G. Coby City Manager
Richard Barker, Jr. Director of Finance
12
13 CITY OF PENSACOLA ORGANIZATIONAL CHART
CITY MANAGER
DIRECTOR OF FINANCE COMMUNITY DEVELOPMENT CITY CLERK DIRECTOR
ENGINEERING ENERGY SERVICES OF COMMUNITY DEVELOPMENT PENSACOLA FIRE FINANCIAL SERVICES HOUSING
HUMAN RESOURCES MANAGEMENT INFORMATION PARKS AND RECREATION SERVICES PENSACOLA GULF COAST REGIONAL AIRPORT WEST FLORIDA SAENGER THEATRE PUBLIC LIBRARY POLICE
PORT OF PENSACOLA
PUBLIC WORKS
SANITATION SERVICES AND FLEET MANAGEMENT
14 CITY OF PENSACOLA, FLORIDA LISTING OF ELECTED AND APPOINTED OFFICIALS
ELECTED OFFICIALS FY 2009 CITY COUNCIL
Michael C. Wiggins Jewel Cannada-Wynn Mayor Deputy Mayor, District 6
Maren DeWeese Sam Hall John Jerralds Larry B. Johnson District 3 District 2 District 5 District 4
Dianne Mack Megan B. Pratt Ronald P. Townsend P. C. Wu, Ph.D. At Large, District 8 At Large, District 9 District 7 District 1
15 APPOINTED OFFICIALS
ALVIN G. COBY WILLIAM D. WELLS City Manager City Attorney
DEPARTMENT DIRECTORS
RICHARD BARKER, JR. RUSSELL BEATY Financial Services Fire (interim)
ERICKA BURNETT THADDEUS COHEN GENE FISCHER City Clerk Community Development West Florida Regional Library
DAVID FLAHERTY AL GARZA, JR. PAT HUBBARD Parks and Recreation Public Works Housing
SUZANNE HUMPHREY CLYDE E. MATHIS JOHN W. MATHIS Civil Service Port of Pensacola Police
MELINDA CRAWFORD JERRY MOORE WILLIAM S. NORRISH Airport (interim) Sanitation Services and Management Information Fleet Management Services
DERRIK OWENS MARY ANN STALCUP DON J. SUAREZ Engineering Employee Services Energy Services of Pensacola
16 FINANCIAL SECTION
This section contains the following subsections:
INDEPENDENT AUDITORS’ REPORT
MANAGEMENT DISCUSSION AND ANALYSIS
BASIC FINANCIAL STATEMENTS
REQUIRED SUPPLEMENTARY INFORMATION
COMBINING AND INDIVIDUAL FUND STATEMENTS AND SCHEDULES
INDEPENDENT AUDITORS REPORT
Honorable Mayor, City Council, and City Manager City of Pensacola, Florida
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 City of Pensacola, Florida as of and for the year ended September 30, 2009, which collectively comprise the City of Pensacola’s basic financial statements as listed in the table of contents. These financial statements are the responsibility of the City of Pensacola’s management. Our responsibility is to express opinions on these financial statements based on our audit. We did not audit the financial statements of the discretely presented component unit, the Downtown Improvement Board. Those financial statements were audited by other auditors whose report thereon has been furnished to us, and our opinion, insofar as it relates to the amounts included for the Downtown Improvement Board, is based on the report of the other auditors.
We conducted our audit in accordance with auditing standards generally accepted in the United States of America and the standards applicable to financial audits contained in Government Auditing Standards, issued by the Comptroller General of the United States. Those standards require that we plan and perform the audit to obtain reasonable assurance about whether the financial statements are free of material misstatement. An audit includes examining, on a test basis, evidence supporting the amounts and disclosures in the financial statements. An audit also includes assessing the accounting principles used and significant estimates made by management, as well as evaluating the overall financial statement presentation. We believe our audit and the report of the other auditors provides a reasonable basis for our opinions.
In our opinion, based on our audit and the report of other auditors, the financial statements referred to in the first paragraph 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 City of Pensacola, as of September 30, 2009, and the respective changes in financial position and cash flows, where applicable, for the year then ended in conformity with accounting principles generally accepted in the United States of America.
In accordance with Government Auditing Standards, we have also issued our report, dated February 15, 2009, on our consideration of the City of Pensacola, Florida’s internal control over financial reporting and on our tests of its compliance with certain provisions of laws, regulations, contracts and 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 internal control over financial reporting or on compliance. That report is an integral part of an audit performed in accordance with Government Auditing Standards and should be considered in assessing the results of our audit.
The management’s discussion and analysis on pages 19 through 37 and schedules of employer contributions and analysis of funding progress for pension funds on pages 97 through 99 and for other postemployment benefits on page 100 are not a required part of the basic financial statements but are supplementary information required by accounting principles generally accepted in the United States of America. We have applied certain limited procedures, which consisted principally of inquiries of management regarding the methods of measurement and presentation of the required supplementary information. However, we did not audit the information and express no opinion on it.
Our audit was conducted for the purpose of forming opinions on the financial statements that collectively comprise the City of Pensacola, Florida’s, basic financial statements. The introductory section, combining and individual nonmajor fund financial statements and schedules, and statistical section are presented for purposes of additional analysis and are not a required part of the basic financial statements. The accompanying schedule of expenditures of federal awards, passenger facility charges, and state financial assistance is presented for purposes of additional analysis as required by U.S. Office of Management and Budget Circular A-133, Audits of States, Local Governments, and Non-Profit Organizations, as specified in the Passenger Facility Charges Audit Guide for Public Agencies, issued by the Federal Aviation Administration, and by Section 215.97, Florida Statutes, and is also not a required part of the basic financial statements of the City of Pensacola, Florida. The combining and individual nonmajor fund financial statements and schedules, the financial data schedule – Section 8 Housing Choice Vouchers Program, and the schedule of expenditures of federal awards, passenger facility charges, and state financial assistance, have been subjected to the auditing procedures applied in the audit of the basic financial statements and, in our opinion, are fairly stated in all material respects in relation to the basic financial statements taken as a whole. The introductory section and statistical section have not been subjected to the auditing procedures applied in the audit of the basic financial statements and, accordingly, we express no opinion on them.
Pensacola, Florida February 15, 2010
Management’s Discussion and Analysis
This section will provide a comparative analysis between fiscal year 2009 and 2008. The comparison amounts are shown at a summary level with additional detail provided for explanation. The format is designed to provide the reader a narrative overview of the City’s financial activity for the fiscal year ended September 30, 2009. This discussion should be read in conjunction with the Letter of Transmittal located in the Introductory Section.
Financial Highlights
• The City’s assets exceeded its liabilities (net assets) as of September 30, 2009 by $333,943,520. Of this amount, $29,930,554 (unrestricted net assets) may be used to meet the government’s ongoing obligations to citizens, customers, and creditors. The remainder of net assets is unavailable and restricted. Unrestricted net assets decreased $9,816,971 (25%) from the previous year’s corrected unrestricted net assets balance of $39,747,525. The decrease stems from the use of bond proceeds from a prior year for the construction of capital assets.
• The City’s total net assets of $333,943,520 increased $16,735,665 (5%) over fiscal year 2008 corrected net assets of $317,207,855. Governmental activities increased $11,764,973 (7%); most of the increase is attributable to the completion of the Saenger Theatre renovation and expansion and other capital projects. Business-type activities increased $4,970,692 (3%) though revenues declined in all funds. This increase is primarily due to an increase in capital assets from progressing construction and the use of previously invested bond proceeds for the Airport’s terminal expansion project.
• At September 30, 2009 the City’s governmental funds reported combined ending fund balances of $41,543,330, a decrease of $7,487,348 (15%) in comparison to the prior year. The combined unreserved-undesignated fund balance for governmental funds is $12,945,159 of which seventy-eight percent is reported in the Local Option Sales Tax Fund ($6,100,047) and the Housing Assistance Payments Fund ($3,935,174). A nominal balance is reported in the General Fund ($56,339) and the remainder is associated with the various nonmajor funds ($2,853,599).
• Governmental funds’ revenues increased $1,413,267 (1.8%) from fiscal year 2008. The increase in governmental funds’ revenues was impacted by several significant components. The two most significant changes occurred in the Housing Assistance Payments Fund with an increase in revenues of $3.3 million (44%) and in the Hurricane Damages Fund with an increase in revenues of $3 million (100%). The increase in the Housing Assistance Payments Fund is a result of the United States Department of Housing and Urban Development’s recalculation of program disbursements which occurs annually based on prior year activity and reserve balances. The Hurricane Damages Fund was reimbursed $3 million by the Federal Emergency Management Agency (FEMA) from the completion of major projects including the reconstruction of the Sander’s Beach-Corinne Jones Community Center and the Garage Body Shop. Offsetting the increase in revenues is a decline in ad valorem tax revenues in the General Fund of
19 approximately $1 million (6.5%) from the changes enacted by Amendment One and declining property values. A decline in interest income from the economic downturn which impacted all funds by a total of $1.2 million (46%). Amendment One was passed by voter referendum in January 2008 which required the millage rate to be lowered to 4.5395 mills and taxable property values to reduce by $178 million. The taxable property values were further reduced as a result of the slumping housing economy. The remaining declines in revenue stem from a decrease in intergovernmental revenues in the Special Grants Fund of $1.4 million from the closing of various grants in the previous fiscal year and slight reductions in various other revenue sources.
Governmental funds’ expenditures increased minimally by $90,777 over the prior year’s total of $96,676,929. Though the total of expenditures did not fluctuate materially, the General Fund had a decrease of $2.2 million (5%) in expenditures primarily from the reclassification of approximately $1.25 million of personal service expenditures for eighteen employees to the Utility Fund for the customer service and meter reading functions. The special revenue funds expenditures decreased $3.5 million due to slight fluctuations including a $1.8 million decrease in the Hurricane Damage Fund from the completion of several hurricane projects in fiscal year 2008 and a $1.4 million decrease in the Special Grants Fund from the closing of various grants in the previous fiscal year. Offsetting these decreases is an increase in expenditures for the Local Option Sales Tax Fund of $4.4 million (43%) primarily from the completion of the Saenger Theatre renovation in fiscal year 2009 and in the Housing Assistance Payments Fund of $1.4 million (11.5%) because the Housing department was able to provide assistance at or near capacity for the entire year.
• The City’s General Fund unreserved fund balance increased by $102,977 from $9,803,661 to $9,906,638 in fiscal year 2009 primarily due to interest earned on the designation for contingency. Unreserved-designated fund balance of $9,850,299 is designated for carryforward appropriations ($2,138,547), assessments ($95,473) and contingencies ($7,616,279). The contingency balance represents 15.7 percent of fiscal year 2010 budgeted General Fund revenues which exceeds the 15 percent minimum reserve goal stated in the City Council’s Financial Planning and Administration Policy. The General Fund had an increase in reserved fund balance of $406,228 and in unreserved fund balance of $102,977 for a total increase of $509,205 (5%) over fiscal year 2008. This increase is primarily due to reduced operating expenditures in response to the thirty-month balanced budget plan implemented in April 2008.
General Fund revenues decreased from fiscal year 2008 by $1,284,118 (3%). Ad valorem tax revenues decreased $1 million as a result of Amendment One. The citizens of the State of Florida approved Amendment One on January 29, 2008 which required a reduction in the City’s millage rate from 4.598 to 4.5395 and a reduction in taxable property values of $178 million. Franchise fee revenues increased approximately $600,000 mainly related to a rate increase by Gulf Power while other revenue sources had minimal fluctuations.
20 Expenditures in the General Fund decreased by $2,192,939 (5%). The decrease resulted from the reclassification of $1.25 million in personal services expenditures to the Utility Fund for eighteen customer service and meter reading employees. The remaining reductions in expenditures stem from a reduction in fuel and communications cost for the Pensacola Police Department of approximately $337,000, a vacant position in the City Manager’s office and two vacant positions in the City Attorney’s office totaling approximately $400,000.
• The City’s Enterprise Funds ended the year with net assets in the amount of $151,576,480, an increase of $4,970,692 (3.4%) over last year’s corrected balance. Of the total net asset amount, $125,156,505 represents capital assets net of related debt which increased $12,286,126 (11%) over last year’s corrected balance. The increase resulted primarily from the completion of the Airport’s Rental Car Service Facility coupled with the use of previously invested bond proceeds on the Airport terminal expansion project. Operating revenues decreased $13,459,491 (16%) over last year while operating expenses decreased by $6,011,060 (8%).
Though all four Enterprise Funds experienced a decrease in revenues, the Utility and Airport Funds had substantial declines in revenues. The Utility Fund’s operating revenues decreased by $9,863,785 (17%) during fiscal year 2009 as natural gas per unit declined globally. The cost of gas is passed on to gas customers and therefore the revenue reported declined in tandem with its cost. The Airport Fund’s operating revenues decreased $2,725,597 (15%) in fiscal year 2009 as a result of the national downturn in the airline industry. As a result, the airlines reduced the number of seats available in Pensacola also contributing to the decline in Airport revenues. The Sanitation Fund’s revenues decreased slightly by $333,357 (5%) and the Port Fund revenues decreased $536,752 (29.6%). The decline in Port revenues is mainly from a decline in ship calls and cargo volumes due to the national economic downturn and its impact on worldwide trade.
Enterprise Funds operating expenses decreased by $6 million in fiscal year 2009. The Utility and Port Funds experienced a decrease in expenses while the Sanitation and Airport Funds experienced an increase. The Utility Fund’s operating expenses decreased $8.2 million of which $5.9 million is attributable to the decline in the unit cost of natural gas. Contractual service expenses also decreased by $843,143 as less labor was outsourced. The termination of the piping business allowed employees to be reassigned to projects that typically required contract laborers. In addition, the overhead allocation was reduced by $1.3 million to offset the salaries and employee benefits increase of $1.25 million related to the eighteen employees reclassed from the General Fund. Bad debt expense was another cause for the change in both the Utility and Sanitation Funds expenses. Bad debt expense was reclassified from an operating expense as reported in prior years to a reduction of charges for services. The Sanitation Fund’s operating expenses increased slightly by $384,025 (5%) to purchase trash receptacles for the recycling program. The Port Fund’s operating expenses decreased slightly by $68,342 (2%). The Airport Fund’s operating expenses increased $1.9 million (11%) primarily as a result of operating needs associated with the new Rental Car Service Facilities, Air Commerce Park property acquisitions and the terminal renovation and expansion project.
21 Overview of the Financial Statements
This discussion and analysis is intended to serve as an introduction to the City’s basic financial statements. These statements have three components: 1) government-wide financial statements, 2) fund financial statements, and 3) notes to the financial statements. This report also contains other supplementary information in addition to the basic financial statements. Following is a chart that illustrates the components of the CAFR.
COMPONENTS OF THE FINANCIAL REPORT
Management’s Basic Required Discussion Financial Supplementary and Statements Information Analysis (RSI)
Government Fund Notes -wide Financial to the Financial Statements Financial Statements Statements
Summary Detail
22 Government-Wide Financial Statements
The government-wide financial statements are designed to provide readers with a broad overview of the City of Pensacola’s finances, in a manner similar to a private-sector business.
The focus of the Statement of Net Assets is designed to be similar to bottom line results for the City and its governmental and business-type activities. This statement combines and consolidates governmental funds current financial resources (short-term spendable resources) with capital assets and long term obligations. The Statement of Activities distinguishes functions of the City of Pensacola that are principally supported by taxes and intergovernmental revenues (governmental activities such as police, fire, public works, recreation and general administration) from other functions that are intended to recover all or a significant portion of their costs through user fees and charges (business-type activities include the airport, seaport, gas utility services and sanitation).
Component Units, which are other governmental units over which the City can exercise influence and/or may be obligated to provide financial subsidy, are presented as a separate column in the government-wide statements. The Downtown Improvement Board is the only component unit of the City. The focus of the financial statements is the Primary Government, which are the operations of the City.
Fund Financial Statements
A fund is a grouping of related accounts used to maintain control over resources that have been segregated for specific activities or objectives. Traditional users of the CAFR will find the Fund Financial Statements presentation more familiar. The focus is on “major” funds, rather than fund types, as reported in the traditional financial statement presentation. All of the City’s funds can be divided into three categories: governmental funds, proprietary funds, and fiduciary funds.
Governmental Funds. Governmental funds are used to account for essentially the same functions reported as governmental activities in the government-wide financial statements. However, unlike the government-wide financial statements, governmental fund financial statements focus on near-term inflows and outflows of spendable resources, as well as on balances of spendable resources available at the end of the fiscal year. Such information may be useful in evaluating a government’s near-term financing requirements.
Since the focus of governmental funds is narrower than that of the government-wide financial statements, it is useful to compare the information presented for governmental funds with similar information presented for governmental activities in the government-wide financial statements. This allows readers to better understand the long-term impact of the government’s near-term financing decisions.
Both the governmental fund balance sheet and the governmental fund statement of revenues, expenditures, and changes in fund balances provide a reconciliation to facilitate this comparison between governmental funds and governmental activities.
23 Governmental fund information is presented separately in the governmental fund balance sheet and in the governmental fund statement of revenues, expenditures and changes in fund balances for the General Fund, Local Option Sales Tax Fund and the Housing Assistance Payments Fund, all of which are considered to be major funds. All other governmental type funds are considered “nonmajor” and are reported in a single, aggregated column.
Proprietary Funds. Proprietary funds provide the same type of information as the business- type activities in the government-wide financial statements, only in more detail. The proprietary fund financial statements can be found in the Basic Financial Statements section of this report.
The City of Pensacola maintains two types of proprietary funds: enterprise funds and internal service funds. The City uses enterprise funds to account for the assets, operation and maintenance of the City-owned natural gas service, garbage and trash service, port facility, and airport. Internal service funds are used to account for activities that provide goods and services to other City departments such as computers, telecommunications, fleet maintenance, engineering and printing. Since internal service funds predominately benefit governmental rather than business-type functions, they have been included within governmental activities in the government-wide financial statements.
Fiduciary Funds. The City of Pensacola is the plan sponsor for the General Pension, Firefighters’ and Police Officers’ retirement fund. The City is responsible for ensuring that the assets reported in these funds are used for their intended purposes. All of the City’s fiduciary activities are reported in a separate statement of fiduciary net assets and a statement of changes in net assets. These activities are excluded from the government-wide financial statements because the assets cannot be used to support or finance the City’s programs or operations. During fiscal year 2007, the City closed the General Pension requiring new general employees to participate in the Florida Retirement System (FRS) though the General Pension will remain open for existing participants who chose not to participate in the FRS.
Notes to the Financial Statements
The notes to the financial statements provide additional information that is essential to gain a full understanding of the data provided in the government-wide and fund financial statements. The notes can be found as part of the Basic Financial Statements section of this report.
Other information
This report additionally includes Required Supplementary Information (RSI) containing schedules of the City’s pension contributions and an analysis of pension funding. Combining statements for nonmajor governmental funds and internal service funds are included as well as budgetary comparisons for all debt service, capital projects, and nonmajor governmental funds. Additional information about the City can be found in the Statistical Section.
24 Government-Wide Financial Analysis
The City of Pensacola adopted the government-wide financial statement presentation. This reporting structure and measurement focus using accrual accounting for all of the government’s activities was mandated by the Government Accounting Standards Board (GASB) in Statement No. 34, Basic Financial Statements - and Management’s Discussion and Analysis - for State and Local Governments. Comparative data for fiscal years ending September 30, 2009 and 2008 is presented.
At year end, the City is reporting positive balances in all three categories of net assets, both for the government as a whole, as well as for its separate governmental and business-type activities.
Summary Statement of Net Assets As of September 30, 2009
Governmental Business-Type Total Primary Activities Activities Government 200920082009200820092008
Current and other assets $ 55,769,925 $ 66,853,901 $ 33,981,411 $ 24,530,035 $ 89,751,336 $ 91,383,936 Internal balances 3,221,461 2,026,631 (3,221,461) (2,026,631) 00 Noncurrent assets 3,536,148 2,529,528 20,261,044 44,995,929 23,797,192 47,525,457 Capital assets 171,012,575 152,687,998 210,906,276 174,963,307 381,918,851 327,651,305 Total assets 233,540,109 224,098,058 261,927,270 242,462,640 495,467,379 466,560,698
Current and other liabilities 11,206,202 12,702,962 10,396,491 9,064,507 21,602,693 21,767,469 Noncurrent liabilities 39,966,867 40,793,029 99,954,299 86,731,208 139,921,166 127,524,237 Total liabilities 51,173,069 53,495,991 110,350,790 95,795,715 161,523,859 149,291,706
Net assets: Invested in capital assets, net of related debt 139,118,040 117,973,303 125,156,505 112,870,379 264,274,545 230,843,682 Restricted 30,099,551 37,093,415 9,638,870 9,584,370 39,738,421 46,677,785 Unrestricted 13,149,449 15,535,349 16,781,105 24,212,176 29,930,554 39,747,525 Total net assets $ 182,367,040 $ 170,602,067 $ 151,576,480 $ 146,666,925 $ 333,943,520 $ 317,268,992
The City’s investment in capital assets, such as land, roads, parks, buildings, machinery and equipment, amounts to seventy-nine percent of net assets. This amount is presented less any outstanding debt related to the acquisition and accumulated depreciation of those assets. The City uses these capital assets to provide services to the citizens and consequently these assets are not available for future spending. Although our investment in capital assets is reported net of related debt, it should be noted that the resources needed to repay this debt must be provided from other sources, since the capital assets themselves cannot be used to liquidate these liabilities.
Restricted net assets are resources subject to external restriction on how they may be used while unrestricted assets may be used to meet the City’s ongoing obligations to citizens and creditors. Unrestricted net assets represent 7.2 percent and 11.1 percent of total net assets for governmental and business-type activities, respectively.
25 Changes in Net Assets Year Ended September 30, 2009
Governmental Business-type Activities Activities Total 2009 2008 (a) 2009 2008 2009 2008 Revenues Program revenues: Charges for services $ 6,052,449 $ 6,327,437 $ 70,255,623 $ 83,754,856 $ 76,308,072 $ 90,082,293 Operating grants and contributions 19,475,151 17,310,191 19,475,151 17,310,191 Capital grants and contributions 8,169,629 7,867,589 15,055,919 6,196,139 23,225,548 14,063,728
General revenues: Property taxes 13,990,633 14,963,002 13,990,633 14,963,002 Other taxes 26,215,477 26,398,433 26,215,477 26,398,433 Intergovernmental 5,807,740 6,190,954 5,807,740 6,190,954 Investment earnings 1,349,471 2,177,667 1,235,552 999,959 2,585,023 3,177,626 Insurance recoveries 651,416 0 651,416 Other 34,364 27,872 309,576 269,834 343,940 297,706 Total revenues 81,094,914 81,263,145 86,856,670 91,872,204 167,951,584 173,135,349
Expenses General government 10,607,815 13,028,271 10,607,815 13,028,271 Public safety 31,494,450 31,837,050 31,494,450 31,837,050 Transportation 2,837,201 4,515,948 2,837,201 4,515,948 Culture and recreation 14,140,256 13,463,182 14,140,256 13,463,182 Economic environment 14,502,662 13,772,416 14,502,662 13,772,416 Physical environment 3,151,470 3,037,313 3,151,470 3,037,313 Human services 94,200 115,000 94,200 115,000 Unallocated deprecation 2,162,409 1,700,181 2,162,409 1,700,181 Interest on long-term debt 769,278 1,272,372 769,278 1,272,372 Utility 39,206,068 46,166,828 39,206,068 46,166,828 Sanitation 6,873,786 6,463,890 6,873,786 6,463,890 Port 2,667,098 2,828,158 2,667,098 2,828,158 Airport 22,709,226 18,964,646 22,709,226 18,964,646 Total expenses 79,759,741 82,741,733 71,456,178 74,423,522 151,215,919 157,165,255
Increase (decrease) in net assets before transfers and other items 1,335,173 (1,478,588) 15,400,492 17,448,682 16,735,665 15,970,094 Transfers in (out) 10,429,800 15,027,853 (10,429,800) (15,027,853) 0 0 Increase (decrease) in net assets 11,764,973 13,549,265 4,970,692 2,420,829 16,735,665 15,970,094
Net assets at beginning of year, as previously reported 170,602,067 156,837,110 146,666,925 143,760,075 317,268,992 300,597,185 Prior period adjustment 215,692 (61,137) 486,021 (61,137) 701,713 Net assets at beginning of year, as corrected 170,602,067 157,052,802 146,605,788 144,246,096 317,207,855 301,298,898
Net assets at end of year $ 182,367,040 $ 170,602,067 $ 151,576,480 $ 146,666,925 $ 333,943,520 $ 317,268,992
(a) Corrections made to reclassify insurance recoveries to program revenues.
26 Governmental Activities Fiscal Year 2009
Program expenses matched with program revenues
35,000,000 30,000,000 25,000,000 20,000,000 Expenses 15,000,000 Revenues 10,000,000 5,000,000 - t t t en tion en es a c afety e vi nm S onm ir ic ecr Ser over l R nv G E an Pub l Environmen Transportationand um e H tur General Physica Cul Economic
Revenues by source
Investment Other 0.04% Earnings Charges for 1.66% Services Intergovernmental 7.46% 7.16% Operating Grants and Contributions Other Taxes 24.02% 32.33%
Capital Grants and Contributions Property Taxes 10.07% 17.25%
GASB Statement No. 34 reporting requires that functional expenses are matched with revenues that directly support the function. The net assets of the Governmental Activities increased $11.8 million mostly as a result of the transfers in for operating subsidies and capital assets. The bar chart above gives a clear indication of which functions are dependant on general revenues to support their operations. Public Safety, consisting of police and fire services, has the largest differences as these functions are traditionally supported by taxes. Taxes, investment earnings and other revenues are classified as general revenues of the government. Taxes continue to be the largest revenue source for our city government.
27 Business-type Activities Fiscal Year 2009
Expenses compared to charges for services revenues (Including depreciation and bad debt expense)
60,000,000
50,000,000
40,000,000 Expenses 30,000,000 Revenues 20,000,000
10,000,000
- Utility Fund Sanitation Port Fund Airport Fund Fund
Revenues by Source
Investment Earnings, $1,235,552 Other, $309,576 Capital Grants and Contributions, $15,055,919 Charges for Services, $70,255,623
Net assets of Business-type Activities experienced a $5 million growth primarily due to progressing construction and the use of previously invested bond proceeds on the Airport’s terminal expansion project. As reflected in the chart above, the Utility and Airport Funds charged fees sufficient to cover operations when excluding depreciation, bad debt expense, and other post employment benefits (OPEB). The Sanitation and Port Funds did not have sufficient revenues to cover operations (net of depreciation, bad debt expense, and OPEB). The Sanitation Fund had a significant increase in expenses due to the implementation of the recycling program and would have had sufficient revenues to cover operations otherwise. The Port Fund experienced a significant decline in vessel activity due to the lagging economy.
28 Financial Analysis of the Government’s Funds
The City of Pensacola uses fund accounting to ensure and demonstrate compliance with finance related legal requirements.
Governmental funds. The focus of governmental funds is to provide information on near-term inflows, outflows and balances of spendable resources. Such information is useful in assessing the City’s financing requirements. In particular, unreserved fund balance may serve as a useful measure of a government’s net resources available for spending at the end of the fiscal year.
As of September 30, 2009, the City’s governmental funds reported combined fund balances of $41,543,330, a decrease of $7,487,348 (15.3%) over the prior year. The decrease is mainly attributable to the Local Option Sales Tax Fund and the Housing Assistance Payments Fund. Governmental funds reserved $14,966,803 of fund balance to meet current commitments in the next fiscal year: $8,239 for inventories, $8,907,026 for encumbrances, $2,975,520 for debt service requirements, $922,864 for the tree landscape program, $207,100 for the park related purchases program and $1,946,054 for housing assistance payments. The unreserved-designated fund balance is $13,631,368 with a remaining unreserved-undesignated fund balance of $12,945,159.
Below is a comparative chart for the City’s “major” funds; General Fund, Local Option Sales Tax Fund and Housing Assistance Payments Fund. Major Fund Information Housing Local Option Assistance General Sales Tax Payments Fund Fund Fund Fiscal Year 2009 Revenues and other sources $ 48,952,056 $ 9,134,737 $ 11,041,022 Expenditures and other outlays (48,442,851) (14,572,557) (13,821,324) Increase (decrease) in fund balance $ 509,205 $ (5,437,820) $ (2,780,302)
Fiscal Year 2008 Revenues and other sources $ 51,344,574 $ 10,322,222 $ 7,900,781 Expenditures and other outlays (50,735,702) (10,208,738) (12,394,390) Increase (decrease) in fund balance $ 608,872 $ 113,484 $ (4,493,609)
The General Fund is the chief operating fund of the City. At September 30, 2009, total fund balance in the general fund was $11,238,961, a five percent increase over the beginning fund balance. The unreserved portion is $9,906,638, however $7,616,279 is designated for contingencies as per a City Council adopted policy regarding fund balance reserves, $2,138,547 is designated for carryforward appropriations and $95,473 is designated for assessments and capital projects leaving a small amount of spendable fund balance of $56,339.
As a measure of the general fund’s liquidity, a comparison of both total and unreserved fund balances compared with total fund operating expenditures shows percentages of 28% and 24.7%, respectively. The fund balance increased by $509,205 during the current fiscal year mainly due to the reclassification of personal services expenditures to the Utility Fund.
29 The Local Option Sales Tax Fund had a total fund balance at year end of $12,896,161, a decrease of $5,437,820 (30%). The decrease is mostly from the completion of the Saenger Theatre expansion and renovation project. Reserved fund balance of $6,796,114 represents reserves for encumbrances most of which is for the Pensacola Police Department expansion and renovation project ($3.2 million), Fire Station No. 6 expansion and renovation project ($807,640), Roger Scott Tennis clay court project ($458,461), and two new fire trucks ($1.2 million). The monthly sales tax revenues are accumulated in this fund for purposes of repayment of the related debt issue; therefore, fund balance is unusually large. With a slowing economy and a tightening of consumer spending, the local option sales tax collections have dropped below the 2003 levels and are anticipated to continue to decrease through fiscal year 2010. However, sufficient funds are projected to cover currently identified Penny for Progress projects and debt service obligations through the end of the current extension which expires December 31, 2017.
The Housing Assistance Payments Fund had a total fund balance at year end of $5,881,228, a decrease of $2,780,302 (32%). Fund balance is reserved in the amount of $1,946,054 for housing assistance payments as required by the Department of Housing and Urban Development (HUD). Changes to fund balance are a function of federal funding by the HUD and the operating efficiency employed by the City’s Housing department. Fluctuations can be large or small depending on the goals of the federal government programs; however, the significant decrease in current year fund balance is a result of HUD reducing revenue distributions to public housing authorities nationwide in efforts to exhaust fund balance available for housing assistance payments.
Proprietary Funds. Proprietary fund statements provide the same information as in the business-type activities column of the government-wide statements, but in greater detail, and on a fund basis for enterprise funds and the internal service funds. All of the City’s enterprise funds are classified as major funds.
Enterprise Funds.
The City of Pensacola does not budget for depreciation, bad debt expense, or other post employment benefits. However, personnel services, operating expenses, capital outlay, and principal and interest payments are budgeted.
The Utility Fund had total net assets of $23,872,885 at fiscal year end, a decrease of $141,735 over the prior year. Operating income exceeded operating expenses by $8,191,805 prior to the $8 million budget annual operating transfer to the General Fund. Revenue decreased by $9.9 million (17%) during fiscal year 2009 while expenses decreased by $8.2 million (17%). The primary reason for the decrease in operating revenue and operating expense is a result of the reduced cost of natural gas; the savings of which is passed to the customer in turn reducing charges for services.
30 The Sanitation Fund had total net assets of $944,877 at fiscal year end, a decrease of $1,085,386. Operating expenses exceeded revenues for an operating loss of $1,147,321. The 2009 operating loss grew from the 2008 level, which is primarily attributable to the purchase of trash receptacles for the implementation of the recycling program. The fund would have experienced a profit otherwise.
The Port Fund had total net assets of $13,689,414 at fiscal year end, a decrease of $521,368 from the prior year’s corrected balance. Operating expenses exceeded revenues by $1,517,794. Net assets decreased as vessel activity became stagnant from the economic downturn causing operating revenues to decline.
The Airport Fund had total net assets of $113,069,304 at fiscal year end, an increase of $6,719,181 over the prior year. Operating expenses exceeded revenues for a net loss of $3,955,750, a substantial decrease from last year’s net income of $667,222. Decreased passenger traffic coupled with increased expenses relating to the planning and post-construction phases of capital projects accounts for the majority of the net loss. The airport has an operating agreement with the airlines which provides for revenues sufficient to meet operating expenses, debt service payments and capital expenditures, however it does not provide for depreciation or bad debt expense which is reported on the City’s financial statements as an operating expense.
Operating Income (Loss) 2009 2008 Utility Fund $ 8,191,805 $ 9,831,472 Sanitation Fund (1,147,321) (429,939) Port Fund (1,517,794) (1,049,384) Airport Fund (3,955,750) 667,222 Total $ 1,570,940 $ 9,019,371
Internal Service Funds
The internal service funds are designed to recover the internal costs of general services provided to other city departments. The increase in total net assets for all internal service funds was $420,353 which is mostly attributable to the contributed capital from the Hurricane Fund for the reconstruction of the garage body shop which was destroyed by Hurricane Ivan in 2004.
31 General Fund Budgetary Highlights
Budgetary control is established within each department at the line item. Budget transfers are approved throughout the year by the City Manager or his designee; however, amounts appropriated for capital expenditures can only be transferred from capital expenditure accounts with the City Council’s approval. The budgetary changes as described below were a necessary part for overall operations of the City’s activities reported in the General Fund.
The final budget as compared with the original budget for the General Fund estimated revenues decreased by $620,224 during fiscal year 2009. Adjustments were made as revenue trends reflected declines in collection amounts.
Appropriations in the General Fund as compared with the original budget decreased by $183,488. The following components accounted for a majority of the change:
• Decrease in general government (administrative functions) of $295,084, public safety (police and fire) of $161,451 and transportation of $108,954; the decreases were in response to the downturn in the economy. • Increase in culture and recreation (parks and recreation) of $156,415 was from the reclassification of personnel from the Youth Center Fund. • Increase in physical environment of $252,060, which includes the FDOT right-of-way maintenance, public works, and lien amnesty for demolition accounts. The increase is a result of expenditures incurred for demolition and special assessment projects which are not budgeted until expended.
The budget for transfers-in remained unchanged while the budget for transfers-out decreased $73,733 primarily from a reduced operating subsidy for the Urban Core Redevelopment Trust Fund and Stormwater Capital Projects Fund. Budget for sale of capital assets increased $7,000 as a result of actual sales being more than anticipated.
32 Capital Asset and Debt Administration
Capital Assets. As of year end, the City had $264,274,545 invested in capital assets, net of depreciation and related debt. Governmental activities accounted for $139,118,040 and business-type activities accounted for $125,156,505. This investment in capital assets includes land, buildings, improvements, machinery and equipment and infrastructure. Per GASB Statement No. 34, the City was required to record all purchased or constructed infrastructure assets from 1980 forward. Those assets were recorded in fiscal year 2003, the year of implementation.
Major capital asset additions during the current fiscal year include the following:
Governmental Activities
• Saenger Theatre Expansion and Renovation project $14,972,962
• Sanders Beach-Corinne Jones Community Center $5,278,822
• Tryon Branch Library $3,085,297
• Stormwater and public works capital projects $1,919,464
• Alcaniz Street Phase 1B streetscape $1,115,790
• Athletic facility and park refurbishments $766,262
• Plaza de Luna monument and improvements donation $312,977
Business-type Activities
• Airport Rental Car Service Facility $17,386,910
• Automated Meter Reading System $3,986,399
• Utility improvements $1,696,401
• Eleven parcels of land and ten buildings for Airport expansion $1,490,391
• Port Warehouse #5 Freezer Expansion $966,114
• Five garbage trucks $518,965
33 Governmental Activities Capital Assets net of depreciation
Equipment Land 8% 13%
Infrastructure 36% Buildings 34% Improvements 9%
Business-type Activities Capital Assets net of depreciation
Equipment Land 3% 10%
Buildings Improvements 34% 53%
Additional details about the City’s capital assets can be found in Section III, C, of the Notes to Financial Statements. The City has two capital plans. The first is required by Florida’s growth management legislation and is an element of the City’s comprehensive plan. The second is a broader plan and covers all infrastructure needs of the City. This plan is two-part; the first is transportation and stormwater funded by the Local Option Gasoline Tax (LOGT) and a transfer from the General Fund in the same amount as the Stormwater Fee collections. The second is referred to as the Penny for Progress Plan and is funded by Local Option Sales Tax (LOST) collections. Additional details of the capital plans are available in the City’s annual budget which is available on the City’s website.
34 Long-term Debt. At the end of fiscal year 2009, the City had total bonded debt of $111,464,825. Governmental activities have bonds payable in the amount of $32,505,555 (direct debt); business-type activities have bonds payable and notes payable in the amounts of $78,959,270 and $21,969,955, respectively (self-supporting debt). The City has no general obligation debt.
The City does not borrow for operating needs. All of its outstanding long-term indebtedness is for capital needs only. The direct debt per capita (population 55,637) as of September 30, 2009 is as follows:
Tax and Franchise Fee Debt $ 10,936,114 Per capita $ 197 Community Redevelopment Agency 1,569,441 Per capita 28 Local Option Sales Tax Debt 20,000,000 Per capita 359 Total 32,505,555 $ $ 584
The Tax and Franchise Fee Debt Service Fund is supported by revenues pledged to specific bond issues. The pledged revenues include franchise fees on electricity, public service taxes on gas, water and electricity, and the Half Cent Sales Tax. The cash reserves at fiscal year end were $2.9 million.
The Community Redevelopment Agency Fund is supported by tax increment financing (TIF) revenues which secure the principal and interest payments of the note. TIF revenues are recorded in the Urban Core Redevelopment Trust Fund and transfers are made as needed to the CRA Fund for debt service obligations.
The Local Option Sales Tax Debt is supported by sales tax collections. The fund’s $14.1 million cash balance will be spent in future fiscal years to complete capital projects. The remaining cash in addition to cash from current sales tax collections can be used to pay principal and interest obligations for the Capital Revenue Bonds, Series 2000A and 2000B which mature December 31, 2017.
All required principal and interest payments on outstanding debt were remitted timely and in full. The reserve requirements and deposits into the debt service funds mandated by the bond covenant remain funded at or above the prescribed levels at year end.
Prior to July 2008 insurance was purchased for all bonded debt issued by the City of Pensacola. The insured rating for the City’s debt will fluctuate because it is dependent on the rating of the insurance provider. The 2008 Airport Revenue Bonds were issued without insurance using only its underlying credit rating. Underlying ratings obtained at issuance typically remain constant and are at times affirmed.
Standard & Poor’s and Fitch Ratings-New York assigned the AA- to the City’s Redevelopment Revenue Bonds, Series 2009 A and B. Concurrently, Fitch also assigns an AA- to the City’s Capital Improvement Revenue Bonds, 2000A and 2000B and an AA implied general obligation rating. The Gas System Revenue Bonds, Series 2008 received an A2 rating on August 10, 2009 from Moody’s. On May 2, 2006 Standard & Poor’s affirmed the AA issuer credit rating (ICR)
35 for the City of Pensacola, Florida. The City’s Sales Tax Revenue Bonds (SPUR) has an affirmed underlying rating of A+ by Standard & Poor’s on April 12, 2005. The City’s Pensacola Regional Airport has an underlying rating of BBB+ received May 1997 by Standard and Poor’s and was affirmed with the issuance of the 2008 Airport Revenue Bonds. The City’s Gas System Revenue Bonds dated August 1, 1999 received an A2 underlying rating from Moody’s.
The fluctuations of the financial market and downgrades or potential downgrades of bond insurers’ ratings have had no material effect on the City’s outstanding bonds or bond ratings. All required principal and interest payments have been remitted timely and in full.
Additional detail about long-term debt can be found in the Notes to the Financial Statements; Note III, F. Long-term debt.
Economic Factors and Next Year’s Budgets and Rates
The City’s appropriations budget for fiscal year 2010 totals $206,732,200. Of this $48.5 million is for the General Fund, $91 million for Enterprise Funds, and the remaining $67.2 million to the miscellaneous special revenue, debt service, capital projects, and internal services funds. The General Fund original budget for the third consecutive year is less than the prior year. The 2010 beginning budget is $883,900 (1.8%) less than the prior year’s beginning budget. The reduction in the 2010 Budget is a result of the downturn in the economy which has affected property tax revenues as well as intergovernmental revenues. The General Fund consists of governmental services such as general administration, public safety, parks and recreation, and public works. Enterprise Funds are expected to be self-supporting, on a cash-flow basis, from user fees for services.
In April 2008, the City of Pensacola took action on a thirty-month balanced budget plan in light of revenue shortfalls and the approval of Amendment One by the citizens of Florida. To accomplish the plan, all programs within the General Fund were identified and reviewed resulting in reductions in budgeted positions, consolidation within departments and interdepartmental functional consolidation. The plan has enabled the City to establish a base budget without anticipated draw down of fund balance. The end of fiscal year 2010 will mark the completion of the thirty-month balanced budget plan.
Personnel expenditures account for $64,470,800 of the City’s budget. The City had 911 total authorized positions at the beginning of fiscal year 2009, decreasing to 875 in the fiscal year 2010 beginning budget. Total funded positions have reduced by 126 positions (13%) since the 2007 budget year level. The reductions are a result of the downturn in the economy and State of Florida property tax reform.
Beginning fiscal year 2007, General Fund capital items were programmed for funding through fiscal year 2017 from the Penny for Progress Local Option Sales Tax Fund. The Fiscal Year 2010 Budget provides funding of $1,503,000 in capital equipment for General Fund departments, including police and fire capital equipment replacements. Though local option sales tax revenues have declined, the budget for capital items remains on target.
36 The Fiscal Year 2010 General Fund ad valorem revenues are estimated to decrease by $324,000 (2.3%) from fiscal year 2009 as a result of a decline in taxable value of real property as a result of the collapse in the real estate market. The 2009 revenues experienced a $1 million (6.5%) decrease from the fiscal year 2008 levels as a result of Amendment One. Also, in the 2009 session, the Florida legislature passed several additional property tax reduction initiatives that will appear on the November 2010 ballot as possible amendments to the State Constitution.
The City has been faced with many other challenges in preparation for fiscal year 2010. Fiscal year 2010 half-cent sales tax revenue, which is the largest source of revenue for local governments among state-shared revenue sources, is projected to decrease $482,600 (12.8%) due to the slowing economy. In response to the various declines in revenue sources, the City was forced to make several changes. In fiscal year 2010, a total of 36 full-time positions will be eliminated and four positions will be unfunded providing a savings of $1.5 million for fiscal year 2010.
The City has formally adopted a Financial Planning and Administration Policy which states that a minimum reserve of 15 percent of budgeted annual revenues should be maintained in the General Fund. The existing General Fund reserve balance (shown on the face of the financial statements as “designated for contingencies”) increased from $7.413 million to $7.616 in fiscal year 2009. The sale of surplus property and interest earnings were identified as additional sources to help meet the policy goal. The $7.6 million balance represents 15.7 percent of the 2010 budgeted General Fund revenues. This marks the second consecutive year the minimum reserve has been accomplished since the adoption of the Financial Planning and Administration Policy on July 23, 1998.
The City’s financial policy states that non-recurring revenues are to be used only to finance non- recurring expenditures. Fiscal year 2010 marks the second consecutive year that the City has balanced on-going revenues with on-going expenditures. Council revised the Financial Planning and Administration Policy in fiscal year 2007 to stipulate that the General Fund’s maximum amount of appropriated beginning fund balance should not be more than three percent of budgeted revenues. As a result of the actions taken in the thirty-month balanced budget plan, the General Fund 2010 budget does not use any fund balance to support on-going expenditures. If actual revenues collected are insufficient to cover expenditures, a draw down of fund balance can be made at fiscal year end.
Request for Information
This financial report is designed to provide a general overview of the City of Pensacola’s finances for all those with an interest in the government’s finances. Questions concerning any of the information provided in this report or requests for additional financial information should be addressed to the Office of the Director of Finance, PO Box 12910, Pensacola, Florida 32521. The City of Pensacola’s website address is www.cityofpensacola.com.
37
BASIC FINANCIAL STATEMENTS
CITY OF PENSACOLA, FLORIDA STATEMENT OF NET ASSETS SEPTEMBER 30, 2009
Primary Government Component Unit
Governmental Business-type Downtown Activities Activities Total Improvement Board
ASSETS
Current assets Cash and cash equivalents $ 12,766,958 $ 3,652,086 $ 16,419,044 $ 42,807 Investments 20,663,384 5,407,484 26,070,868 Accrued interest 846,266 560,397 1,406,663 Receivables (net of allowances) Accounts 2,722,291 6,414,146 9,136,437 46,929 Special assessments 336,156 336,156 Internal balances 598,406 (598,406) 0 Due from other governments 1,503,719 12,567,844 14,071,563 Inventory 581,898 45,650 627,548 Prepaids and deposits 292,637 123,456 416,093 19,153 Restricted assets Restricted cash and cash equivalents 5,823,779 2,100,392 7,924,171 Other cash 1,285,333 1,285,333 Investments 6,263,170 3,109,956 9,373,126 Accounts Receivable 1,607,425 1,607,425 Due from other governments 1,076,909 1,076,909 Total current assets 56,368,331 33,383,005 89,751,336 108,889
Noncurrent assets Intangible asset 76,520 76,520 Unamortized bond issue costs 138,222 1,488,774 1,626,996 Internal balances 2,623,055 (2,623,055) 0 Restricted assets Cash and cash equivalents 1,438,846 2,503,672 3,942,518 Investments 16,192,078 16,192,078 Notes receivable 1,959,080 1,959,080 Capital assets Non-depreciable 28,520,907 59,858,426 88,379,333 Depreciable (net) 142,491,668 151,047,850 293,539,518 42,184 Total noncurrent assets 177,171,778 228,544,265 405,716,043 42,184
Total assets $ 233,540,109 $ 261,927,270 $ 495,467,379 $ 151,073
(continued)
The accompanying notes are an integral part of these financial statements.
38
CITY OF PENSACOLA, FLORIDA STATEMENT OF NET ASSETS SEPTEMBER 30, 2009
Primary Government Component Unit
Governmental Business-type Downtown Activities Activities Total Improvement Board
LIABILITIES AND NET ASSETS
Liabilities
Current liabilities Accounts payable $ 814,931 $ 1,970,450 $ 2,785,381 $ 43,662 Contracts payable 800,487 1,382,523 2,183,010 Contracts payable - retainage 911,225 2,123,121 3,034,346 Wages and benefits payable 1,497,353 1,497,353 Compensated absences payable 88,312 32,725 121,037 8,327 Deposits 257,953 374,755 632,708 Unearned revenue 3,663,602 14,428 3,678,030 Revenue bonds payable 2,916,588 87,500 3,004,088 Payable from restricted assets Revenue bonds payable 2,457,100 2,457,100 Accrued interest payable 255,751 1,953,889 2,209,640 Total current liabilities 11,206,202 10,396,491 21,602,693 51,989
Noncurrent liabilities Compensated absences payable 5,944,737 1,865,085 7,809,822 Claims and judgments payable 2,362,833 2,362,833 Notes payable 21,969,955 21,969,955 Revenue bonds payable 29,588,967 76,414,670 106,003,637 Deferred loss on early retirement (482,925) (1,283,433) (1,766,358) Net OPEB liability 2,553,255 988,022 3,541,277 Total noncurrent liabilities 39,966,867 99,954,299 139,921,166 0
Total liabilities 51,173,069 110,350,790 161,523,859 51,989
Net assets Invested in capital assets, net of related debt 139,118,040 125,156,505 264,274,545 42,184 Restricted for Capital projects 12,896,161 12,896,161 Debt service 2,938,018 5,955,870 8,893,888 Community redevelopment 4,493,099 4,493,099 Federal housing program 5,881,228 5,881,228 Other purposes 2,944,204 2,944,204 Hurricane damage 946,841 946,841 Renewal and replacement 1,750,000 1,750,000 Operations and maintenance 1,933,000 1,933,000 Unrestricted 13,149,449 16,781,105 29,930,554 56,900
Total net assets $ 182,367,040 $ 151,576,480 $ 333,943,520 $ 99,084
The accompanying notes are an integral part of these financial statements.
39 CITY OF PENSACOLA, FLORIDA STATEMENT OF ACTIVITIES FOR THE YEAR ENDED SEPTEMBER 30, 2009
Program Revenues
Operating Capital Charges for Grants and Grants and Expenses Services Contributions Contributions Function/Programs Primary government Governmental activities: General government $ 10,607,815 $ 335,438 $ 3,075,935 $ 322,880 Public safety 31,494,450 1,728,932 124,037 50,721 Transportation 2,837,201 697,453 48,801 Culture and recreation 14,140,256 1,391,241 3,681,810 6,523,590 Economic environment 14,502,662 12,593,369 245,642 Physical environment 3,151,470 1,899,385 977,995 Human services 94,200 Unallocated depreciation 2,162,409 Interest on long-term debt 769,278 Total governmental activities 79,759,741 6,052,449 19,475,151 8,169,629
Business-type activities: Utility 39,206,068 47,673,400 Sanitation 6,873,786 6,366,664 Port 2,667,098 1,242,839 979,441 Airport 22,709,226 14,972,720 14,076,478 Total business-type activities 71,456,178 70,255,623 0 15,055,919
Total primary government $ 151,215,919 $ 76,308,072 $ 19,475,151 $ 23,225,548
Component unit: Downtown Improvement Board $ 1,179,469 $ 743,916
(continued)
The accompanying notes are an integral part of these financial statements.
40 CITY OF PENSACOLA, FLORIDA STATEMENT OF ACTIVITIES FOR THE YEAR ENDED SEPTEMBER 30, 2009
Net (Expenses) Revenue and Changes in Net Assets Component Primary Government Unit Governmental Business-type Activities Activities Total DIB Function/Programs Primary government Governmental activities: General government $ (6,873,562) $ (6,873,562) Public safety (29,590,760) (29,590,760) Transportation (2,090,947) (2,090,947) Culture and recreation (2,543,615) (2,543,615) Economic environment (1,663,651) (1,663,651) Physical environment (274,090) (274,090) Human services (94,200) (94,200) Unallocated depreciation (2,162,409) (2,162,409) Interest on long-term debt (769,278) (769,278) Total governmental activities (46,062,512) (46,062,512)
Business-type activities: Utility $ 8,467,332 8,467,332 Sanitation (507,122) (507,122) Port (444,818) (444,818) Airport 6,339,972 6,339,972 Total business-type activities 13,855,364 13,855,364
Total primary government (46,062,512) 13,855,364 (32,207,148)
Component unit: Downtown Improvement Board $ (435,553)
General revenues: Property taxes 13,990,633 13,990,633 413,047 Public service taxes and franchise fees 13,999,030 13,999,030 Communication service tax 3,738,973 3,738,973 Local business tax 895,570 895,570 Local option gasoline tax 1,605,605 1,605,605 Local option sales tax 5,976,299 5,976,299 Unrestricted intergovernmental revenues 5,807,740 5,807,740 Unrestricted investment earnings 1,349,471 1,235,552 2,585,023 1,099 Miscellaneous 34,364 309,576 343,940 Transfers 8,000,000 (8,000,000) 0 Overhead transfers 2,429,800 (2,429,800) 0
Total general revenues, transfers, and other items 57,827,485 (8,884,672) 48,942,813 414,146
Change in net assets 11,764,973 4,970,692 16,735,665 (21,407) Net assets, October 1, 2008 as previously reported 170,602,067 146,666,925 317,268,992 120,491 Prior period adjustments - (61,137) (61,137) Net assets, October 1, 2008 as corrected 170,602,067 146,605,788 317,207,855 120,491 Net assets September 30, 2009 182,367,040 $ 151,576,480 $ 333,943,520 $ 99,084
The accompanying notes are an integral part of these financial statements.
41 CITY OF PENSACOLA, FLORIDA BALANCE SHEET GOVERNMENTAL FUNDS SEPTEMBER 30, 2009
Housing Other Total General Local Option Assistance Governmental Governmental Fund Sales Tax Payments Funds Funds ASSETS
Cash and cash equivalents $ 3,581,418 $ 5,701,765 $ 1,086,576 $ 1,792,548 $ 12,162,307 Other cash 1,271,259 1,271,259 Investments 5,302,848 8,442,352 1,608,846 2,654,147 18,008,193 Accrued interest 846,266 846,266 Accounts receivable 1,043,844 230,745 58,670 97,707 1,430,966 Special assessments receivable 336,156 336,156 Due from other funds 3,904,371 1,069,467 4,973,838 Due from other governments 1,013,803 446,370 1,460,173 Prepaids and deposits 43,072 424 43,496 Restricted assets: Cash and cash equivalents 455,510 1,946,054 2,791,149 5,192,713 Other cash 14,074 14,074 Investments 674,454 4,132,733 4,807,187 Accounts receivable 1,607,425 1,607,425 Inventories 8,239 8,239 Due from other funds 4,202,898 4,202,898 Due from other governments 1,076,909 1,076,909 Prepaids and desposits 10,128 10,128 Notes receivable 1,959,080 1,959,080
Total assets $ 17,201,742 $ 15,890,699 $ 5,971,829 $ 20,347,037 $ 59,411,307
LIABILITIES AND FUND BALANCE
Liabilities Accounts payable $ 474,592 $ 1,553 $ 10,188 $ 288,597 $ 774,930 Contracts payable 36,308 234,980 509,648 780,936 Contracts payable - retainage 544,204 367,021 911,225 Due to other funds 2,213,801 21,743 4,637,059 6,872,603 Compensated absences payable 88,312 88,312 Wages and benefits payable 1,497,353 1,497,353 Deferred revenue 3,730,035 58,670 2,920,092 6,708,797 Deposits 136,181 97,640 233,821 Total liabilities 5,962,781 2,994,538 90,601 8,820,057 17,867,977 (continued) The accompanying notes are an integral part of these financial statements.
42 CITY OF PENSACOLA, FLORIDA BALANCE SHEET GOVERNMENTAL FUNDS SEPTEMBER 30, 2009
Housing Other Total General Local Option Assistance Governmental Governmental Fund Sales Tax Payments Funds Funds
Fund balances Reserved Inventories 8,239 8,239 Encumbrances 202,359 6,796,114 1,908,553 8,907,026 Debt service 2,975,520 2,975,520 Tree landscape 922,864 922,864 Park purchases 207,100 207,100 Housing assistance payments 1,946,054 1,946,054 Unreserved Designated for carryforward appropriations, reported in: General fund 2,138,547 2,138,547 Special revenue funds 477,216 477,216 Designated for contingencies 7,616,279 7,616,279 Designated for capital projects, reported in: Special revenue funds 3,085,604 3,085,604 Designated for debt service 218,249 218,249 Designated for assessments 95,473 95,473 Unreserved - undesignated, reported in: General fund 56,339 56,339 Special revenue funds 3,935,174 1,593,861 5,529,035 Capital project funds 6,100,047 1,259,738 7,359,785 Total fund balances 11,238,961 12,896,161 5,881,228 11,526,980 41,543,330
Total liabilities and fund balances $ 17,201,742 $ 15,890,699 $ 5,971,829 $ 20,347,037
Capital assets used in governmental activities are not financial resources and therefore are not reported in the funds. The cost of the assets is $221,582,573 and the accumulated depreciation is $52,715,488. 168,867,085
Other long-term assets are not available to pay for current period expenditures and therefore are deferred in the funds. 3,045,195
Internal service funds are used by management to charge the costs of certain activities such as central garage, risk management and MIS, to individual funds. The assets and liabilities of the internal service funds are included in governmental activities in the statement of net assets. 8,850,485
Net other post employment benefits (OPEB) liability, as required by Governmental Accounting Standards Statement No. 45, are not due and payable in the current period and therefore are not reported in the governmental funds. (2,341,299)
Long-term liabilities, including bonds payable, are not due and payable in the current period and therefore are not reported in the governmental funds. Bonds payable (32,405,191) Unamortized bond premium (100,364) Unamortized bond issue costs 128,094 Deferred loss on early retirement 482,926 Compensated absences (5,447,470) Accrued interest payable (255,751) (37,597,756) Net assets of governmental activities $ 182,367,040
The accompanying notes are an integral part of these financial statements.
43 CITY OF PENSACOLA, FLORIDA STATEMENT OF REVENUES, EXPENDITURES, AND CHANGES IN FUND BALANCE GOVERNMENTAL FUNDS FOR THE YEAR ENDED SEPTEMBER 30, 2009
Housing Other Total General Local Option Assistance Governmental Governmental Revenues: Fund Sales Tax Payments Funds Funds Taxes $ 24,514,041 $ 5,976,299 $ $ 1,605,605 $ 32,095,945 Licenses and permits 61,986 802,858 864,844 Franchise fees 8,110,165 8,110,165 Intergovernmental 5,807,740 10,653,194 12,261,430 28,722,364 Charges for services 1,216,525 3,122,955 4,339,480 Fines and forfeits 190,133 251,118 441,251 Assessments 89,577 89,577 Interest income 455,647 532,867 103,531 378,099 1,470,144 Donations 613 2,625,571 63,481 2,689,665 Other 448,688 283,487 874 733,049 Total revenues 40,895,115 9,134,737 11,040,212 18,486,420 79,556,484 Expenditures: Current - General government 3,623,623 16,556 3,386,639 7,026,818 Public safety 27,921,255 119,117 1,244,985 29,285,357 Transportation 2,474,759 35,416 2,510,175 Culture and recreation 5,526,248 6,302,472 11,828,720 Economic environment 205,000 13,821,324 372,294 14,398,618 Physical environment 218,582 2,698,033 2,916,615 Human services 94,200 94,200 Capital outlay 4,325 14,136,709 10,857,518 24,998,552 Debt service - Principal retirement 2,850,209 2,850,209 Interest 300,175 558,267 858,442 Total expenditures 40,067,992 14,572,557 13,821,324 28,305,833 96,767,706 Excess (deficiency) of revenues over (under) expenditures 827,123 (5,437,820) (2,781,112) (9,819,413) (17,211,222) Other financing sources (uses): Transfers in 8,000,000 11,375,754 19,375,754 Transfers (out) (8,374,859) (3,000,895) (11,375,754) Sale of capital assets 56,941 810 666,342 724,093 Insurance recoveries 999,781 999,781 Total other financing sources (uses) (317,918) 0 810 10,040,982 9,723,874
Net Change in fund balances 509,205 (5,437,820) (2,780,302) 221,569 (7,487,348) Fund balances at beginning of year 10,729,756 18,333,981 8,661,530 11,305,411 49,030,678 Fund balances at end of year $ 11,238,961 $ 12,896,161 $ 5,881,228 $ 11,526,980 $ 41,543,330 The accompanying notes are an integral part of these financial statements.
44 CITY OF PENSACOLA, FLORIDA RECONCILIATION OF THE STATEMENT OF REVENUES, EXPENDITURES, AND CHANGES IN FUND BALANCE OF GOVERNMENTAL FUNDS TO THE STATEMENT OF ACTIVITIES FOR THE YEAR ENDED SEPTEMBER 30, 2009
Net change in fund balances - total governmental funds $ (7,487,348)
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 those assets is depreciated over their estimated useful lives. Expenditures for capital assets 24,438,224 Less current year depreciation (6,023,060) 18,415,164
Certain other capital asset activity does not require the use of current financial resources, therefore, it is not reported in the governmental funds, but is reported in the statement of activities. Asset transfers (901,766)
Repayment of bond principal is an expenditure in the governmental funds, but the repayment reduces long-term liabilities in the statement of net assets. 2,850,209
Some revenues reported in the statement of activities do not provide current financial resources, therefore, those revenues are not reported as revenues in governmental funds. Change in General Fund land/ROW accounts receivable 16,416 Change in Community Development Fund accounts receivable (662,304) Change in housing rehabilitation loans accounts receivable 65,410 Change in Section 8 fraud recovery accounts receivable 15,622 Change in Parks & Recreation accounts receivable (8,170) Change in special assessment accounts receivable (64,314) (637,340)
Compensated absences, reported in the statement of activities, does not require the use of current financial resources, therefore, it is not reported as an expenditure in governmental funds. 92,612
Accrued interest expense, reported in the statement of activities, does not require the use of current financial resources, therefore, it is not reported as an expenditure in governmental funds. Included is the amortization of bond issuance costs, discounts, and premiums of $30,049. 89,164
Annual other post employment benefits (OPEB) cost, as required by Governmental Accounting Standards Statement No. 45, does not require the use of current financial resources, therefore, it is not reported as an expenditure in governmental funds. (1,198,227)
Internal service funds are used by management to charge the costs of certain activities to individual funds. The net revenue of certain activities of internal service funds is reported with governmental activities. 420,353
The proceeds from the sale of capital assets are reported as revenue in the governmental funds. However, the cost of capital assets disposed must be removed from the capital assets account in the statement of activities and offset against the sale proceeds resulting in a gain on sale of capital assets in the statement of activities. Thus, more revenue is reported in the governmental funds than in the statement of activities. Donations of capital assets increase net assets in the statement of activities, but do not appear in the governmental funds because they are not financial resources. Donations of capital assets 318,330 Receipts from the sale of capital assets (724,092) Gain on disposal of capital assets 527,914 122,152 Change in net assets of governmental activities $ 11,764,973
The accompanying notes are an integral part of these financial statements.
45 CITY OF PENSACOLA, FLORIDA STATEMENT OF REVENUES, EXPENDITURES, AND CHANGES IN FUND BALANCE – BUDGET AND ACTUAL GENERAL FUND FOR THE YEAR ENDED SEPTEMBER 30, 2009
Budgeted Amounts Variance with Final Budget - Original Final Actual Amounts Positive/(Negative)
Revenues: Taxes $ 25,102,100 $ 24,693,300 $ 24,514,041 $ (179,259) Licenses and permits 56,400 74,300 61,986 (12,314) Franchise fees 7,992,500 8,066,000 8,110,165 44,165 Intergovernmental 6,115,800 5,719,400 5,807,740 88,340 Charges for services 1,213,600 1,224,100 1,216,525 (7,575) Fines and forfeits 229,900 189,600 190,133 533 Assessments 100,000 89,577 (10,423) Interest income 260,000 315,000 455,647 140,647 Donations 613 613 Other 400,000 368,376 448,688 80,312
Total revenues 41,370,300 40,750,076 40,895,115 145,039
Expenditures: Current - General government 4,222,800 3,927,716 3,623,623 304,093 Public safety 28,419,300 28,257,849 27,921,255 336,594 Transportation 2,583,800 2,474,846 2,474,759 87 Culture and recreation 5,416,500 5,572,915 5,526,248 46,667 Economic environment 205,000 205,000 205,000 0 Physical environment 20,300 272,360 218,582 53,778 Human services 115,000 94,200 94,200 0 Capital outlay 10,000 4,326 4,325 1 Total expenditures 40,992,700 40,809,212 40,067,992 741,220
Excess (deficiency) of revenues over (under) expenditures 377,600 (59,136) 827,123 886,259
Other financing sources (uses): Transfers in 8,000,000 8,000,000 8,000,000 0 Transfers (out) (8,427,600) (8,353,867) (8,374,859) (20,992) Sale of capital assets 50,000 57,000 56,941 (59) Total other financing sources (uses) (377,600) (296,867) (317,918) (21,051)
Net change in fund balances 0 (356,003) 509,205 865,208
Fund balances at beginning of year 0 356,003 10,729,756 10,373,753 Fund balances at end of year $ 0 $ 0 $ 11,238,961 $ 11,238,961
The accompanying notes are an integral part of these financial statements.
46 CITY OF PENSACOLA, FLORIDA STATEMENT OF REVENUES, EXPENDITURES, AND CHANGES IN FUND BALANCE – BUDGET AND ACTUAL HOUSING ASSISTANCE PAYMENTS FUND FOR THE YEAR ENDED SEPTEMBER 30, 2009
Budgeted Amounts Variance with Final Budget - Original Final Actual Amounts Positive/(Negative)
Revenues: Intergovernmental $ 11,612,600 $ 12,178,536 $ 10,653,194 $ (1,525,342) Interest income 60,000 60,000 103,531 43,531 Other 283,487 283,487
Total revenues 11,672,600 12,238,536 11,040,212 (1,198,324)
Expenditures: Current - Economic environment 12,426,400 14,110,336 13,821,324 289,012 Total expenditures 12,426,400 14,110,336 13,821,324 289,012
Other financing sources (uses): Sale of capital asset 810 810 Total other financing sources (uses) 0 0 810 810
Net change in fund balances (753,800) (1,871,800) (2,780,302) (908,502)
Fund balances at beginning of year 753,800 1,871,800 8,661,530 6,789,730
Fund balances at end of year $ 0 $ 0 $ 5,881,228 $ 5,881,228
The accompanying notes are an integral part of these financial statements.
47
CITY OF PENSACOLA, FLORIDA STATEMENT OF NET ASSETS PROPRIETARY FUNDS SEPTEMBER 30, 2009
Business-type Activities - Enterprise Funds Governmental Activities- Total Internal Utility Sanitation Port Airport Enterprise Service Fund Fund Fund Fund Funds Funds ASSETS
Current assets Cash and cash equivalents $ 2,205,551 $ 149,836 $ 52,029 $ 1,244,670 $ 3,652,086 $ 1,581,873 Investments 3,265,663 221,856 77,037 1,842,928 5,407,484 2,493,276 Interest receivable 560,397 560,397 Accounts receivable (net) 4,072,498 558,925 150,798 1,631,925 6,414,146 1,291,325 Due from other funds 246,913 246,913 543,090 Due from other governments 4,179,108 201,096 8,187,640 12,567,844 43,546 Prepaid expenses 36,712 738 9,821 76,185 123,456 46,191 Inventory 45,650 45,650 573,659 Restricted assets Cash and cash equivalents 205,748 255,756 204,035 1,434,853 2,100,392 Investments 304,641 378,686 302,105 2,124,524 3,109,956 Total current assets 14,562,484 1,565,797 996,921 17,103,122 34,228,324 6,572,960
Noncurrent assets Intangible asset 76,520 76,520 Unamortized bond issue costs 165,816 12,221 1,310,737 1,488,774 Prepaid expenses 202,950 Advances to other funds 1,740,287 Restricted assets Cash and cash equivalents 94,531 2,409,141 2,503,672 1,092,690 Investments 139,969 16,052,109 16,192,078 1,617,898 Capital assets Non-depreciable 1,052,771 41,093 1,922,386 56,842,176 59,858,426 Depreciable (net) 28,292,051 1,958,919 13,511,432 107,285,448 151,047,850 2,145,490 Total noncurrent assets 29,821,658 2,000,012 15,446,039 183,899,611 231,167,320 6,799,315
Total assets $ 44,384,142 $ 3,565,809 $ 16,442,960 $ 201,002,733 $ 265,395,644 $ 13,372,275
(continued)
The accompanying notes are an integral part of these financial statements.
48 CITY OF PENSACOLA, FLORIDA STATEMENT OF NET ASSETS PROPRIETARY FUNDS SEPTEMBER 30, 2009
Business-type Activities - Enterprise Funds Governmental Activities- Total Internal Utility Sanitation Port Airport Enterprise Service Fund Fund Fund Fund Funds Funds
LIABILITIES AND NET ASSETS
Liabilities
Current liabilities Accounts payable $ 1,595,165 $ 96,848 $ 40,030 $ 238,407 $ 1,970,450 $ 40,001 Contracts payable 1,157 167,252 1,214,114 1,382,523 19,551 Contracts payable - retainage 316,602 1,806,519 2,123,121 Due to other funds 326,146 337,838 18,576 162,759 845,319 1,346,784 Compensated absences payable 20,951 11,774 32,725 Deposits 25 102 359,756 14,872 374,755 24,132 Deferred revenue 14,428 14,428 Revenue bonds payable 87,500 87,500 Payable from restricted assets Revenue bonds payable 437,500 314,600 1,705,000 2,457,100 Accrued interest payable 72,888 26,624 1,854,377 1,953,889 Total current liabilities 2,836,983 434,788 947,789 7,022,250 11,241,810 1,430,468
Noncurrent liabilities Compensated absences payable 979,409 355,933 44,468 485,275 1,865,085 497,267 Advances from other funds 257,797 1,631,758 733,500 2,623,055 19,266 Claims and judgments payable 2,362,833 Notes payable 4,122,778 17,847,177 21,969,955 Revenue bonds payable 11,804,887 1,036,557 63,573,226 76,414,670 Deferred loss on early retirement (47,680) (1,235,753) (1,283,433) Net OPEB liability 509,403 198,453 38,912 241,254 988,022 211,956 Total noncurrent liabilities 17,674,274 2,186,144 1,805,757 80,911,179 102,577,354 3,091,322
Total liabilities 20,511,257 2,620,932 2,753,546 87,933,429 113,819,164 4,521,790
Net Assets
Investment in capital assets, net of related debt 17,257,271 2,000,012 14,142,562 91,756,660 125,156,505 2,145,490 Restricted Debt service 234,500 5,721,370 5,955,870 Renewal and replacement 1,750,000 1,750,000 Operations and maintenance 1,933,000 1,933,000 Unrestricted (deficit) 6,381,114 (1,055,135) (453,148) 11,908,274 16,781,105 6,704,995 Total net assets $ 23,872,885 $ 944,877 $ 13,689,414 $ 113,069,304 $ 151,576,480 $ 8,850,485 The accompanying notes are an integral part of these financial statements.
49 CITY OF PENSACOLA, FLORIDA STATEMENT OF REVENUES, EXPENSES, AND CHANGES IN FUND NET ASSETS PROPRIETARY FUNDS FOR THE YEAR ENDED SEPTEMBER 30, 2009
Business-type Activities - Enterprise Funds Governmental Activities- Utility Sanitation Port Airport Internal Fund Fund Fund Fund Total Service Funds Operating revenues: Charges for services $ 47,673,400 $ 6,366,664 $ 1,242,839 $ 14,972,720 $ 70,255,623 $ 4,129,829 Insurance 13,204,062 Other 252,399 19,745 35,912 1,520 309,576 129,738 Total operating revenues 47,925,799 6,386,409 1,278,751 14,974,240 70,565,199 17,463,629 Operating expenses: Gas purchases 25,991,243 25,991,243 Salaries and employee benefits 7,944,020 3,257,754 993,346 4,737,860 16,932,980 4,021,261 Materials and supplies 574,461 1,080,855 18,716 301,691 1,975,723 61,147 Repairs and maintenance 291,769 609,617 23,647 1,101,114 2,026,147 53,836 Contractual services 1,396,611 269,712 103,130 2,984,503 4,753,956 255,129 Office and utilities 1,440,963 486,630 419,827 2,150,683 4,498,103 271,269 Land fill fees 936,589 7,470 944,059 Overhead allocation 962,400 601,200 121,500 744,700 2,429,800 Premiums and claims expense 13,071,513 Total operating expenses before depreciation 38,601,467 7,242,357 1,687,636 12,020,551 59,552,011 17,734,155 Operating income (loss) before depreciation 9,324,332 (855,948) (408,885) 2,953,689 11,013,188 (270,526) Depreciation 1,132,527 291,373 1,108,909 6,909,439 9,442,248 359,735 Operating income (loss) 8,191,805 (1,147,321) (1,517,794) (3,955,750) 1,570,940 (630,261) Nonoperating revenues (expenses): Investment interest 100,934 3,191 9,038 1,122,389 1,235,552 193,792 Interest expense (426,559) (4,042) (63,176) (4,003,587) (4,497,364) Amortization of bond expense (34,007) (84) (469,245) (503,336) Donations of capital assets 9,365 9,365 Gain (loss) on disposal of capital assets 8,618 58,500 720 (51,104) 16,734 (65,349) Total nonoperating revenues (expenses) (351,014) 57,649 (53,502) (3,392,182) (3,739,049) 128,443 Income (loss) before contributions and transfers 7,840,791 (1,089,672) (1,571,296) (7,347,932) (2,168,109) (501,818) Contributions and transfers: Contributions Federal and state grants 979,441 11,223,503 12,202,944 Passenger facility charge 2,731,133 2,731,133 Passenger facility charge - Interest 112,477 112,477 Contributed capital from other funds 17,474 4,286 70,487 92,247 922,171 Transfers (out) (8,000,000) (8,000,000) Total contributions and transfers (7,982,526) 4,286 1,049,928 14,067,113 7,138,801 922,171 Change in net assets (141,735) (1,085,386) (521,368) 6,719,181 4,970,692 420,353 Net assets at beginning of year as previously reported 24,014,620 2,030,263 14,271,919 106,350,123 146,666,925 8,430,132 Prior period adjustment (61,137) (61,137) Net assets at beginning of year as corrected 24,014,620 2,030,263 14,210,782 106,350,123 146,605,788 8,430,132
Net assets at end of year $ 23,872,885 $ 944,877 $ 13,689,414 $ 113,069,304 $ 151,576,480 $ 8,850,485 The accompanying notes are an integral part of these financial statements.
50 CITY OF PENSACOLA, FLORIDA STATEMENT OF CASH FLOWS PROPRIETARY FUNDS FOR THE YEAR ENDED SEPTEMBER 30, 2009
Business-type Activities - Enterprise Funds Governmental Activities Utility Sanitation Port Airport Internal Fund Fund Fund Fund Total Service Funds
Cash flows from operating activities: Cash received from customers $ 50,277,906 $ 6,413,407 $ 1,448,914 $ 14,864,754 $ 73,004,981 $ 14,161,061 Cash payments to suppliers for goods and services (31,609,912) (3,999,290) (613,482) (7,232,418) (43,455,102) (9,384,279) Cash payments to employees for services (11,904,142) (3,076,646) (970,184) (4,622,231) (20,573,203) (3,794,578) Net cash provided by (used for) operating activities 6,763,852 (662,529) (134,752) 3,010,105 8,976,676 982,204
Cash flows from noncapital financing activities: Advance from other funds 243,722 1,044,914 (59,410) (5,725) 1,223,501 18,684 Advance to other funds (878,602) Transfers (out) (8,000,000) (8,000,000) Net cash provided by (used for) noncapital financing activities (7,756,278) 1,044,914 (59,410) (5,725) (6,776,499) (859,918)
Cash flows from capital and related financing activities: Acquisition of capital assets (5,307,080) (547,215) (14,701,146) (20,555,441) (175,385) Acquisition of capital assets with grant monies (973,328) (10,635,495) (11,608,823) Proceeds from sale of assets 12,485 58,500 720 119,148 190,853 2,996 Capital contributed 981,854 4,479,692 5,461,546 Contributions from customers 2,858,038 2,858,038 Acquisition of capital assets with contributions (12,139,842) (12,139,842) Principal paid on capital debt (1,204,599) (117,700) (1,440,000) (2,762,299) Interest paid on capital debt (451,129) (4,042) (55,306) (3,174,673) (3,685,150) Proceeds from capital debt 8,002,972 7,791,927 15,794,899 Payment for issuance cost (12,000) (12,000) Net cash provided by (used for) capital and related financing activities 1,040,649 (492,757) (163,760) (26,842,351) (26,458,219) (172,389)
Cash flows from investing activities: (Purchase)/sale of investments 1,465,861 349,305 460,454 24,035,026 26,310,646 1,581,948 Interest on investments 100,934 3,191 9,038 653,721 766,884 193,792 Net cash provided by (used for) investing activities 1,566,795 352,496 469,492 24,688,747 27,077,530 1,775,740 Net increase (decrease) in cash and cash equivalents 1,615,018 242,124 111,570 850,776 2,819,488 1,725,637
Cash and cash equivalents at beginning of year 890,812 163,468 144,494 4,237,888 5,436,662 948,926
Cash and cash equivalents at end of year $ 2,505,830 $ 405,592 $ 256,064 $ 5,088,664 $ 8,256,150 $ 2,674,563 (continued) The accompanying notes are an integral part of these financial statements.
51 CITY OF PENSACOLA, FLORIDA RECONCILIATION OF OPERATING INCOME (LOSS) PROPRIETARY FUNDS FOR THE YEAR ENDED SEPTEMBER 30, 2009
Business-type Activities - Enterprise Funds Governmental Activities Utility Sanitation Port Airport Internal Fund Fund Fund Fund Total Service Funds
Operating income (loss) $ 8,191,805 $ (1,147,321) $ (1,517,794) $ (3,955,750) $ 1,570,940 $ (630,261)
Adjustments to reconcile operating income to net cash provided by (used for) operating activities: Depreciation 1,132,527 291,373 1,108,909 6,909,439 9,442,248 359,735
Change in assets and liabilities: (Increase) decrease in accounts receivable 2,522,729 26,998 160,544 (110,605) 2,599,666 (256,716) (Increase) decrease in inventory (45,650) (45,650) 52,040 (Increase) decrease in due from other funds (124,972) (124,972) 300,440 (Increase) decrease in due from other governments (4,179,108) (4,179,108) (43,546) (Increase) decrease in prepaid expense 21,042 9,064 78,578 221,002 329,686 81,694 Increase (decrease) in accounts payable (973,507) (23,751) 2,230 (170,729) (1,165,757) (33,014) Increase (decrease) in contracts payable (18,728) Increase (decrease) in due to other funds (31,156) 64,802 2,483 60,172 96,301 190,195 Increase (decrease) in deposits 9,619 1,119 10,738 20,495 Increase (decrease) in claims and judgments 879,836 Increase (decrease) in accrued expense 20,951 20,951 Increase (decrease) in compensated absences (10,602) 14,794 (20,176) (67,948) (83,932) (29,452) Increase (decrease) in net OPEB obligation 260,744 101,512 19,904 123,405 505,565 109,486 Net cash provided by (used for) operating activities: $ 6,763,852 $ (662,529) $ (134,752) $ 3,010,105 $ 8,976,676 $ 982,204
Noncash investing, capital, and financing activities:
Utility Sanitation Port Airport Internal Fund Fund Fund Fund Total Service Funds
Contribution of capital assets from other funds $ 17,474 $ 4,286 $ 70,487 $ 865 $ 93,112 $ 922,171 Transfer of capital assets to other funds - - - 108,365 108,365 4,286
The accompanying notes are an integral part of these financial statements.
52 CITY OF PENSACOLA, FLORIDA COMBINING STATEMENT OF FIDUCIARY NET ASSETS FIDUCIARY FUNDS SEPTEMBER 30, 2009
Total Pension ASSETS Trust Funds Other cash $ 563,077
Receivables Employer 154,098 Employee 104,942 Commission Recapture 5,235 Total receivables 264,275 Investments Short term investments 3,527,826 Debt Securities & Bond Mutual Funds 77,343,256 Stock Mutual Funds 20,708,090 Mortgage Backed Securities 10,974,376 Commingled Index Fund 9,255,837 Commingled Trust Fund 10,097,099 Domestic Stocks 106,021,897 Total investments 237,928,381
Total assets $ 238,755,733
LIABILITIES AND FUND BALANCES
Liabilities: Accounts payable $ 594,331 Total liabilities 594,331 Net assets Held in trust for pension benefits $ 238,161,402
The accompanying notes are an integral part of these financial statements.
53 CITY OF PENSACOLA, FLORIDA COMBINING STATEMENT OF CHANGES IN FIDUCIARY NET ASSETS FIDUCIARY FUNDS FOR THE YEAR ENDED SEPTEMBER 30, 2009
Total Pension Trust Funds Additions Contributions - city $ 13,387,577 Contributions - employee 1,301,812 Commission recapture 24,492 Insurance proceeds - State of Florida 1,057,418 Total contributions 15,771,299
Investment income Net appreciation (depreciation) in fair value of investments 3,565,110 Interest and dividends 7,218,397 10,783,507 Less investment expense 798,011 Net investment income 9,985,496
Total additions 25,756,795
Deductions Pensions paid - employees 15,167,521 Pensions paid - widows 2,252,930 Pensions paid - children 16,154 Refunds to employees 43,622 Deferred retirement option plan 644,863 Health insurance assistance 188,300 Administrative expenses 303,862
Total deductions 18,617,252
Change in net assets 7,139,543
Net assets held in trust for pension benefits Beginning of year 231,021,859
End of year $ 238,161,402
The accompanying notes are an integral part of these financial statements.
54
NOTES TO
FINANCIAL STATEMENTS
CITY OF PENSACOLA, FLORIDA NOTES TO FINANCIAL STATEMENTS SEPTEMBER 30, 2009
TOPICAL INDEX
Topic Page(s) Topic Page(s) Accounts Receivable 68 Investments 61 Basis of Accounting, Measurement Focus 58 Joint Ventures 56 and Financial Presentation Lease Obligations 75 Blended Component Unit 55 Litigation 92 Bond Discounts, Issuance Cost, and 63 Long-term Debt 75 Refunding Gains/Losses Net Assets 63 Capital Assets Policy 62 New Accounting Pronouncements 64 Capital Assets 70 Other Postemployment Benefits 90 Cash and Cash Equivalents/Investments 61 Other Significant Commitments 93 Changes in Long-Term Liabilities 78 Pension Funds 66 Community Maritime Park 57 Pension Plan Descriptions and Contribution 85 Compensated Absences 63 Information Conduit Debt 81 Pension Plan Financial Statements 83 Contractual, Construction, and Equipment 93 Pension Plan Obligations 88 Commitments Pension Plan Three-Year Trend Information 88 Debt Restriction 80 Prepaid Insurance 62 Deferred Compensation/Replacement 91 Prior Period Adjustments 95 Benefit Program Property Tax Calendar Year and Revenue 68 Deferred Revenue 69 Recognition Discretely Presented Component Unit 56 Reporting Entity 55 Encumbrances 64 Restricted Assets 62 Fund Balance Deficit 75 Retiree Benefits 89 Fund Equity 63 Revenues Pledged for Debt Repayment 80 General Budget Policies 64 Risk Management 81 Government-Wide and Fund Financial 58 Subsequent Events 95 Statements Summary of Debt Service Requirements 79 to Maturity Grant Contingencies 92 Surplus Funds 65 Interfund Receivables, Payables, and Transfers 73 Termination Benefits 92 Interfund Receivables/Payables Policy 61 Unbilled Utility Services 68 Inventories 61
CITY OF PENSACOLA, FLORIDA NOTES TO FINANCIAL STATEMENTS SEPTEMBER 30, 2009
NOTE I. - SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES
The financial statements of the City of Pensacola (the “City”) have been prepared in accordance with generally accepted accounting principles (GAAP) as applied to governmental units. The Governmental Accounting Standards Board (GASB) is the standard-setting body for governmental accounting and financial reporting. Statements and Interpretations of the GASB have been applied in the preparation of these financial statements.
A. Reporting Entity
The City of Pensacola operates under a Council-Manager form of government in which the ten members of City Council appoint the City Manager who is responsible for implementing the policies and legislative actions of the Council. The present form of government of the City was created by Chapter 15425, Laws of Florida 1931. On November 24, 2009 voters approved amendments to the City Charter that will change the current Council-Manager form of government to a Mayor-Council structure. The amended Charter was effective January 2010 however the executive Mayor and all Council members will earn seats in the November 2010 general election.
In evaluating the City as a reporting entity, management has addressed all potential component units for which the City may or may not be financially accountable and, as such, be includable within the City’s financial statements. The City (the primary government) is financially accountable if it appoints a voting majority of the organization’s governing board and 1) it is able to impose it’s will on the organization or 2) there is a potential for the organization to impose a specific financial benefit or burden to the City. Additionally, the primary government is required to consider other organizations for which exclusion of the nature and significance of their relationship with the City would cause the reporting entity’s financial statements to be misleading or incomplete.
The accompanying financial statements present the City and its component units and entities for which the government is considered to be financially accountable. Blended component units, although legally separate entities, are in substance part of the City’s operation. The discretely presented component unit is reported in a separate column in the government-wide financial statements to emphasize that it is legally separate from the City.
Blended Component Unit
Community Redevelopment Agency (CRA) - On September 25, 1980, the Pensacola City Council declared itself the CRA pursuant to the provisions of Chapter 163, Part III, Florida Statutes. This action, adopted by Resolution Number 55-80, also outlined the rights, powers, duties, privileges and immunities invested in the ten member City Council acting as the CRA. The CRA selects a chair and a vice-chair from the ten-member agency and approves the annual operating budget. The CRA is reported as a special revenue fund of the City.
55 CITY OF PENSACOLA, FLORIDA NOTES TO FINANCIAL STATEMENTS SEPTEMBER 30, 2009
NOTE I. - SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES (Continued)
Discretely Presented Component Unit
Downtown Improvement Board (DIB) - The DIB was created in April 1972 by Chapter 72- 655, Laws of Florida. The mayor of the City appoints and the Council approves the five member board. In addition, the City Council approves the budget of the Board, including the proposed millage rate. The accounting policies of the DIB are the same as detailed for the City. Complete financial statements of the component unit can be obtained from their administrative office as follows: Downtown Improvement Board, Post Office Box 653, Pensacola, Florida 32593.
Joint Ventures Excluded From the Reporting Entity
The following joint ventures do not meet the criteria for inclusion in the City's financial statements since no financial benefit or burden exists, nor can the City impose its will on the entities.
Escambia - Pensacola Human Relations Commission (HRC) - Created by an interlocal agreement between the Escambia County Board of County Commissioners and the Pensacola City Council in 1978, pursuant to Florida Statutes, for the purpose of promoting fair treatment and equal opportunity to all citizens of the community. The Commission is composed of nine members: four selected by the Escambia County Board of County Commissioners, four selected by the City Council, and one selected by the other eight members. There is no current or long- term debt nor does the City control the financial operations of the Commission. Complete financial statements of HRC can be obtained from their administrative office as follows: Escambia - Pensacola Human Relations Commission, 2257 Baylen Street, Pensacola, Florida, 32501.
Pensacola - Escambia County Promotion and Development Commission (PEDC) - Created in 1967 by Chapter 67-1365, Laws of Florida, amended in 1989 by House Bill 984, for the purpose of promoting and developing the industrial, commercial and tourist potential of the County, increasing employment opportunities, improving the economic environment, and expanding the tax base. The nine member commission consists of representatives from the Escambia County Board of County Commissioners, the Pensacola City Council, the Pensacola Area Chamber of Commerce, the University of West Florida, local industry, and the news media. Escambia County and the City of Pensacola each contribute to the operation and maintenance of the PEDC, but neither has control over the financial operations of the PEDC nor can it impose its will. Complete financial statements of PEDC can be obtained from their administrative office as follows: Pensacola - Escambia County Promotion and Development Commission, 117 West Garden Street, Pensacola, Florida, 32502.
56 CITY OF PENSACOLA, FLORIDA NOTES TO FINANCIAL STATEMENTS SEPTEMBER 30, 2009
NOTE I. - SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES (Continued)
Summary financial statements including fiduciary funds of these entities are as follows:
Statement of Net Assets September 30, 2009
HRC PEDC Assets $ 31,379 $ 8,692,301
Liabilities 14,725 8,362,390 Net Assets: Restricted 4,560 61,198 Unrestricted 12,094 268,713 Total Net Assets 16,654 329,911 Total Liabilities and Net Assets $ 31,379 $ 8,692,301
Statement of Revenues, Expenditures and Changes in Net Assets for the Fiscal Year Ended September 30, 2009
HRC PEDC
Revenue $ 242,125 $ 270,841 Expenditures 237,447 270,544 Excess of revenue over (under) expenditures 4,678 297 Net assets (Deficit) Beginning 11,976 329,614 Net assets (Deficit) at End of Year $ 16,654 $ 329,911
Community Maritime Park Associates (CMPA)
The CMPA, a legally separate entity, was created in 2005 for the sole purpose of developing the public and private aspects of the Vince Whibbs Senior Community Maritime Park. In March 2006, the City of Pensacola entered into a Master Development Agreement with the CMPA for the development of the City owned waterfront property located at the 300 block of Main Street. Per the Agreement, ownership of public structures and improvements remain with the City. In April 2009 CMPA entered into an agreement with the Maritime Park Development Partners for the development of the property. The City issued bonds on December 21, 2009 to fund the $40 million construction fund. Once the public structures are completed, CMPA will no longer require funding and will be financially independent from the City.
57 CITY OF PENSACOLA, FLORIDA NOTES TO FINANCIAL STATEMENTS SEPTEMBER 30, 2009
NOTE I. - SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES (Continued)
B. Government-Wide and Fund Financial Statements
The government-wide financial statements (i.e., the statement of net assets and the statement of changes in net assets) report information on all of the nonfiduciary activities of the primary government and its component units. The City’s fiduciary funds are not presented in the government-wide financial statements since by definition, the assets can not be used to address activities or obligations of the City (i.e., the assets are being held for the benefit of pension participants). The purpose of the government-wide financial statements is to provide a consolidated financial picture of all City activities. The internal service funds provide services to departments throughout the City. Only direct expenses of the change in net assets for the internal service funds are eliminated functionally on the government-wide financial statements. Governmental activities, which normally are 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. Likewise, the primary government is reported separately from the legally separate component unit for which the primary government is financially accountable.
The statement of activities demonstrates the degree to which the direct expenses of a given function or segment is offset by program revenues. The purpose of categorizing direct expenses according to function and revenues according to program is to provide an analysis of activities that are revenue sufficient and those that use the support of general revenues. Direct expenses are those expenses 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.
Individual fund 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 major individual enterprise funds are reported as separate columns in the fund financial statements. All other funds (nonmajor) are combined according to their category, governmental or business-type and are reported in a single column. Combining statements for nonmajor funds are found in the Combining Financial Statements section.
C. Basis of Accounting, Measurement Focus and Financial Presentation
The basis of accounting refers to when revenues, expenditures or expenses are recognized in the accounts and reported in the financial statements. Basis of accounting relates to the timing of the measurements made, regardless of the measurement focus applied.
58 CITY OF PENSACOLA, FLORIDA NOTES TO FINANCIAL STATEMENTS SEPTEMBER 30, 2009
NOTE I. - SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES (Continued)
The government-wide financial statements are reported using the economic resources measurement focus and the accrual basis of accounting, as are the proprietary fund and fiduciary fund financial statements. 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 revenues 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, revenues are considered to be available if they are collected within 60 days of the end of the current fiscal period. Expenditures generally are recorded when a liability is incurred, as under accrual accounting. However, debt service expenditures, as well as expenditures related to compensated absences and claims and judgments, are recorded only when payment is due.
Franchise fees, licenses, and interest associated with the current fiscal period are all considered to be susceptible to accrual and therefore have been recognized as revenues of the current fiscal period. All other revenue items are considered to be measurable and available only when cash is received.
The City reports the following major governmental funds:
General Fund - used to account for all financial resources except those required to be accounted for in another fund. All general property taxes, fines, property rentals and certain intergovernmental revenues are recorded in this fund. Typical expenditures are for administration, planning, parks and recreation, public works and public safety.
Local Option Sales Tax - a capital projects fund that accounts for the local option infrastructure sales surtax (pursuant to Florida Statutes 212.055) to provide for the construction of various infrastructure improvements including park and recreation improvements, street resurfacing and reconstruction, and payment of associated debt (other than those financed by proprietary funds).
Housing Assistance Payments – a special revenue fund that accounts for the proceeds of specific revenue sources (other than for expendable trusts or for capital projects) that are legally restricted to expenditures for specific purposes.
The City reports the following major proprietary funds:
Utility Fund – accounts for the assets, operation and maintenance of the City-owned natural gas service.
Sanitation Fund – accounts for the assets, operation and maintenance of the City-owned garbage and trash services.
59 CITY OF PENSACOLA, FLORIDA NOTES TO FINANCIAL STATEMENTS SEPTEMBER 30, 2009
NOTE I. - SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES (Continued)
Port Fund – accounts for the assets, operation and maintenance of the City-owned port facility.
Airport Fund – accounts for the assets, operation and maintenance of the City-owned airport.
Additionally, the government reports the following fund types:
Internal Service Funds (ISF) account for services provided to various City departments on a cost reimbursement basis. The services provided include a central warehouse inventory, fleet maintenance, engineering, management information services and a risk management (insurance) program. ISFs are reported as a governmental activity within the government-wide financial statements. Combining fund statements are provided in the Combining Financial Statements section.
Fiduciary Funds are trust funds that account for assets held by the City in a trustee capacity for individuals, other governmental units and/or other funds and include the City’s General, Firemen’s and Police Officers’ pension funds. Fiduciary funds are not included in government- wide financial statements, however a statement of net assets and a statement of changes in net assets are included as part of the basic financial statements with combining fund statements presented in the Combining Financial Statements section.
Private-sector standards of accounting and financial reporting issued prior to December 1, 1989, generally are followed in both the government-wide and proprietary fund financial statements to the extent that those standards do not conflict with or contradict guidance of the Governmental Accounting Standards Board. Governments also have the option of following subsequent private-sector guidance for their business-type activities and enterprise funds, subject to this same limitation. The City has elected not to follow subsequent private-sector guidance.
As a general rule, the effect of interfund activity has been eliminated from the government-wide financial statements. Amounts reported as program revenues include 1) charges to customers for goods, services, or privileges provided, and fines and forfeitures, 2) operating grants and contributions, and 3) capital grants and contributions, including special assessments. Those revenues not clearly defined as program revenues are categorized as general revenue. General revenues include resources such as taxes, franchise fees, interest and sale of assets.
Proprietary funds distinguish operating revenues and expenses from nonoperating 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 enterprise and internal service funds are charges to customers for sales and services. Operating expenses for enterprise funds and internal service funds include the cost of sales and services, administrative expenses, and depreciation on capital assets. All revenues and expenses that do not meet this definition are reported as nonoperating revenues and expenses.
When both restricted and unrestricted resources are available for use, it is the City’s policy to use restricted resources first, then unrestricted resources as they are needed.
60 CITY OF PENSACOLA, FLORIDA NOTES TO FINANCIAL STATEMENTS SEPTEMBER 30, 2009
NOTE I. - SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES (Continued)
D. Assets, Liabilities, and Net Assets or Equity
1. Cash and Cash Equivalents/Investments
The City of Pensacola has defined cash and cash equivalents as cash held at a depository and cash on hand for operating purposes and those investments which are short term and highly liquid. Generally, those investments have original maturities of three (3) months or less. Cash equivalents normally consist of treasury bills, certificates of deposit and money market funds. All monies, which are not legally restricted to separate administration, are pooled together for investment purposes while each individual fund and/or account is maintained on a daily transaction basis. Investment earnings are distributed in accordance with the participating funds’ relative equity.
2. Investments
All investments held by the City of Pensacola, including external investment pools, defined benefit pension plans, and debt securities are reported at fair value.
The City is part of the Local Government Surplus Funds Trust Fund Investment Pool, which is governed by the State Board of Administration. The fair value of the City’s position in the State Board of Administration's Local Government Surplus Funds Trust Fund Investment Pool is the same as the value of the pool shares; however, the fair value of the City’s position in the State Board of Administration's Fund B Surplus Funds Trust Fund is $66,822 less than the $148,214 investment in the pooled shares as of September 30, 2009.
3. Interfund Receivables/Payables
Interfund receivables and payables arise from interfund transactions and are recorded by all funds affected as “due to/from other funds” for the current portion of the receivable/payable or as “advance to/from other funds” for the noncurrent portion of the receivable/payable. Government-wide financial statements eliminate transactions occurring within like-kind activities (i.e., governmental to governmental or business-type to business-type). The residual balance between activities is reported in the government-wide financial statements as “internal balances”. Fund financial statements present the entire transaction on the balance sheet as “due to/from other funds” and/or “advance to/from other funds”.
4. Inventories
Inventories included in the internal service fund’s General Stock Fund consist primarily of utility stores, automotive supplies and fuel. Inventories included in the Golf Fund consist of inventories held for resale. All inventories are accounted for by the consumption method and are valued at cost, which approximates market, using the first in, first out method. Appropriate allowances have been made for obsolete and surplus items.
61 CITY OF PENSACOLA, FLORIDA NOTES TO FINANCIAL STATEMENTS SEPTEMBER 30, 2009
NOTE I. - SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES (Continued)
5. Prepaid Insurance
The City of Pensacola accounts for property insurance premiums using the consumption method. Property insurance premiums for both governmental and enterprise funds are paid quarterly, with final quarterly payment made in August of each year. The payments are prorated over the next three months resulting in a prepaid insurance premium for the month of October.
6. Restricted Assets
Certain assets of both governmental and business-type activities are restricted by specific provisions of bond resolutions, grant agreements, or other agreements with various parties. Assets so designated are identified as restricted assets since their use is limited.
7. Capital Assets
Capital assets, which include land, buildings, equipment, improvements other than buildings, and infrastructure assets are reported in the applicable governmental or business-type activities columns in the government-wide financial statements. Capital assets are defined as assets with an initial, individual cost of more than $5,000 and an estimated useful life greater than one year. Such assets are recorded at historical cost or estimated historical cost if actual historical cost is not available. Donated capital assets are valued at fair value as of the date of donation.
The costs of normal maintenance and repairs that do not add to the value of the asset or materially extend asset lives are not capitalized.
The City does not capitalize interest on borrowings used to finance the construction of general capital assets. Interest on capital assets is capitalized for proprietary funds; however, when the expense during construction is netted against the related income, the resulting amount is typically immaterial.
The Utility Fund reports an intangible asset on the face of the financial statements. The intangible asset is recorded as the excess of the purchase price over the fair market value of assets acquired. The intangible asset is amortized on a straight-line basis over an estimated useful life of forty years.
Capital assets are depreciated using the straight-line method over the following estimated useful lives: Buildings 15 - 50 years Improvements other than buildings 15 - 50 years Infrastructure 15 - 50 years Machinery and equipment 3 - 10 years Utility lines and extensions 40 - 50 years Vehicles and heavy equipment 5 - 25 years
62 CITY OF PENSACOLA, FLORIDA NOTES TO FINANCIAL STATEMENTS SEPTEMBER 30, 2009
NOTE I. - SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES (Continued)
8. Compensated Absences
It is the policy of the City to permit employees to accumulate an unlimited amount of earned but unused leave benefits (Paid Time Off - PTO) which will be paid to the employee upon separation from service. The payout of “PTO” has percentage caps per class of employee and accumulated amount of leave. Unpaid compensated absences are recorded as a liability when the benefits are earned in both the government-wide financial statements and proprietary fund financial statements. Governmental funds within the fund financial statements are not required to record a liability of accumulated amounts of unused leave benefits. The current year expense for both governmental and proprietary fund types represent the amount that would be paid to employees who plan to retire in the next fiscal year.
9. Bond Discounts, Issuance Cost, and Refunding Gains and Losses
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 assets. Capital appreciation bonds are reported at their accreted value which is computed at the end of each fiscal year. Bond premiums and discounts, as well as issuance costs, are deferred and amortized over the life of the bonds using the effective interest method. Bonds payable are reported net of the applicable bond premium or discount. Bond refunding gains and losses are deferred and amortized over the remaining life of the old debt or the life of the new debt, whichever is shorter, using the effective interest method, and presented as noncurrent liabilities.
In the fund financial statements, governmental fund types recognize bond premiums and discounts, as well as bond issuance costs (whether or not withheld from the actual debt proceeds received), 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.
10. Fund Equity
In the fund financial statements, governmental funds report reservations of fund balance for amounts that are not available for appropriation or are legally restricted by outside parties for use for a specific purpose. Designations of fund balance represent tentative management plans that are subject to change.
11. Net Assets
The government-wide and business-type fund financial statements utilize a net asset presentation. Net assets are categorized as invested in capital assets (net of related debt), restricted and unrestricted.
Invested in Capital Assets (net of related debt) is intended to reflect the portion of net assets which are associated with non-liquid, capital assets less outstanding capital asset related debt.
63 CITY OF PENSACOLA, FLORIDA NOTES TO FINANCIAL STATEMENTS SEPTEMBER 30, 2009
NOTE I. - SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES (Continued)
Restricted Net Assets are liquid assets (generated from revenues and net bond proceeds) which are not accessible for general use because of third-party (statutory, bond covenant or granting agency) limitations.
Unrestricted Net Assets represent unrestricted liquid assets.
E. New Accounting Pronouncements
GASB Statement No. 50.
In May 2007, the GASB issued Statement No. 50, “Pension Disclosures.” This statement more closely aligns the financial reporting requirements for pensions with those for other postemployment benefits. The financial statements incorporate the changes required by Statement No. 50. Please refer to Note IV, B and required supplemental information.
NOTE II. – STEWARDSHIP, COMPLIANCE, AND ACCOUNTABILITY
General Budget Policies
Prior to the beginning of each fiscal year, the City Manager submits an operating budget to the City Council. The operating budget includes proposed expenditures and the means for financing them. After acceptance by the Council the budget is legally enacted by the passage of a budget resolution. Budgetary control is established within each department at the line item. Amounts may be transferred between departmental line items within a fund. Amounts to be transferred require the approval of the City Manager or his designee; however, amounts appropriated for capital expenditures can only be transferred from capital expenditure accounts with City Council approval.
Appropriations for expenditures within a fund may only be decreased or increased with City Council approval. Expenditures for each fund may not legally exceed the total fund appropriation.
A legally adopted budget is employed as a control device for the General Fund, Special Revenue Funds, Debt Service Funds, and Capital Project Funds. In addition, Enterprise Funds are budgeted on a limited non-GAAP basis for management control purposes.
The City prepares its governmental fund type budgets on a GAAP basis. All budget amounts presented in the financial statements are as originally adopted or as authorized by the City Council.
Encumbrances
Encumbrance accounting, under which purchase orders, contracts and other commitments for the expenditure of monies are recorded in order to reserve that portion of the applicable appropriation, is employed as an extension of formal budgetary integration in the General, Special Revenue and Capital Projects Funds. Encumbrances outstanding (if any) at year-end are reported as reservations of fund balances since they do not constitute expenditures or liabilities. The budget for the subsequent year provides a re-appropriation of funds to complete transactions for outstanding encumbrances. Unencumbered appropriations lapse at year end; however, they are available for designation. 64 CITY OF PENSACOLA, FLORIDA NOTES TO FINANCIAL STATEMENTS SEPTEMBER 30, 2009
NOTE III. - DETAIL NOTES ON ALL FUNDS
A. Deposits and Investments
1. Surplus Funds (not including pensions)
As of September 30, 2009, the City had the following investments which are disclosed by specific identification.
Investments Maturity Range Fair Value State Investment Pool LGIP 33 days $ 2,853 Fund B 6.69 years 81,392 Total Investments $ 84,245
As of September 30, 2009, the City of Pensacola had a minimal balance of $2,853 invested in the State Board of Administration's Local Government Surplus Funds Trust Fund Investment Pool (LGIP). Standard and Poor's Ratings Services assigned its "AAAm" principal stability fund rating to LGIP.
As of September 30, 2009, the City of Pensacola had $148,214 invested in the State Board of Administration's Fund B Surplus Funds Trust Fund. Fund B’s fair value as of September 30, 2009 was $81,392 resulting in an unrealized loss of $66,822. Fund B is not yet rated by any nationally recognized statistical rating agency.
All monies invested in the State Board of Administration are recorded in the Insurance Retention Fund.
Credit Risk. The City’s investment policy limits investments to those securities identified in the Florida Statutes, Section 218.415(16). Additional investment types are permitted only if they are granted authority through a separate ordinance approved by the City Council.
Concentration Credit Risk. The City’s investment policy requires that bank deposits be secured as provided by Chapter 280, Florida Statues, titled Security for Public Deposits Act. If statutory responsibilities are met then the deposits placed in any qualified public depository (QPD) are protected from loss, without limit. The investment policy sets no limits as to the maximum amount that any particular institution can hold or a maximum amount for an individual type of investment. Given the statutorial restriction to the highest rating and the legal obligation to collaterize certain other investments held by individual banks, the concentration risk is not viewed to be a risk by the City.
Interest Rate Risk. The City has formally adopted an investment policy which was amended by City Council on September 26, 2002. Maturities on investments are limited to an average maturity not to exceed two years with the maximum maturity of any individual investment not to exceed five years. The investments held at September 30, 2009 meet the criteria of the City’s investment policy.
65 CITY OF PENSACOLA, FLORIDA NOTES TO FINANCIAL STATEMENTS SEPTEMBER 30, 2009
NOTE III. - DETAIL NOTES ON ALL FUNDS (Continued)
2. Pension Funds
Investments Fair Value Short Term Investments $ 3,527,826 Mutual Funds - Pension Plans 98,051,346 Mortgage & Asset backed securities 10,974,376 Commingled Index and Trust Funds 19,352,936 Stocks 106,021,897 $ 237,928,381
The City’s pension funds contains certain bonds that are actually mortgage-backed and asset- backed securities which could be classified as “derivative” investments under GASB Technical Bulletin No. 94-1. These securities are based on cash flows from interest and principal payments on underlying mortgages. Therefore, they are sensitive to prepayments by mortgagees, which may result in a decline of interest rates. The City invests in interest and principal securities (a form of mortgage-backed and asset-backed securities) in part to maximize yields and in part to hedge against a rise in interest rates. These investments are within the investment policy guidelines for the pension funds.
Interest Rate Risk. The City’s General, Fire and Police Pension Plans each have funds invested in bond mutual funds. Each plan has its own investment policy, which restricts the investments that the mutual funds can hold. The policies limit the percentage of plan assets invested in bonds but does not place limits on the length of the maturities. The pension plans’ investment weighted average maturities are as follows:
General Pension Weighted Average Maturity Amount PIMCO Total Return 4.79 Years $28,664,300 PIMCO Real Return 7.42 Years 6,532,743 PIMCO Diversified Income 6.14 Years 6,542,104
Fire Pension Weighted Average Maturity Amount
PIMCO Total Return 4.79 Years $15,481,056 Integrity Fixed Income Management 4.30 Years 15,970,616
Police Pension Weighted Average Maturity Amount Integrity Fixed Income Management 4.40 Years $17,552,579 Integrity Fixed Income Management- TIPS 9.30 Years 2,140,670
66 CITY OF PENSACOLA, FLORIDA NOTES TO FINANCIAL STATEMENTS SEPTEMBER 30, 2009
NOTE III. - DETAIL NOTES ON ALL FUNDS (Continued)
Credit Risk. The risk that an issuer or other counterparty to an investment will not fulfill its obligations.
General Pension
PIMCO Total Return Bond Fund Not Rated by Nationally Recognized Statistical Rating Agency PIMCO Real Return Bond Fund Not Rated by Nationally Recognized Statistical Rating Agency PIMCO Diversified Income Bond Fund Not Rated by Nationally Recognized Statistical Rating Agency
Fire Pension PIMCO Total Return Bond Fund Not Rated by Nationally Recognized Statistical Rating Agency Integrity Fixed Income Management Not Rated by Nationally Recognized Statistical Rating Agency
Police Pension Integrity Fixed Income Management Not Rated by Nationally Recognized Statistical Rating Agency Integrity Fixed Income Management - TIPS Not Rated by Nationally Recognized Statistical Rating Agency
Custodial Credit Risk. For an investment, custodial credit risk is the risk that, in the event of the failure of the counterparty, the City’s retirement plans will not be able to recover the value of their investments that are in the possession of an outside party. The Retirement Plans’ Board of Trustees has contracts with each of their money managers which include a requirement that coverage be provided to protect the City’s retirement plans from any losses incurred arising out of the money manager’s negligence. Therefore, the City does not have a custodial credit risk.
The gross unrealized gains and losses for the marketable equity securities in the pension funds for the fiscal year ended were as follows:
General Firefighters’ Police Pension and Relief and Officers’ Retirement Pension Retirement Fund Fund Fund Totals
Unrealized Gains $ 26,990,874 $ 24,239,929 $14,177,353 $ 65,408,156 Unrealized Losses (18,050,592) (14,948,336) ( 9,789,242) (42,788,170) Net Unrealized Gains (Losses) $ 8,940,282 $ 9,291,593 $ 4,388,111 $ 22,619,986
The average cost method used in computing realized gains and losses on the sale of marketable equity securities.
67 CITY OF PENSACOLA, FLORIDA NOTES TO FINANCIAL STATEMENTS SEPTEMBER 30, 2009
NOTE III. - DETAIL NOTES ON ALL FUNDS (Continued)
B. Accounts Receivable
1. Unbilled Utility Services
All utility billing is performed on a cyclical basis which gives rise to unbilled gas services at the end of any given period. The City has recorded estimated accounts receivable and the related revenues based on the number of days of unbilled services for each cycle as of the end of the fiscal year.
2. Property Tax Calendar and Revenue Recognition
Escambia County Constitutional Officers perform all appraisals, assessments and collections of City property taxes as an agent for the City of Pensacola. Property valuations are determined each year as of January 1. All property taxes are levied and become due and payable on November 1. The collection period is from November 1 through March 31, with discounts allowed of 4, 3, 2 and 1 percent for early payment in November through February, respectively. All taxes become delinquent on April 1 in the year following assessment, and tax certificates are sold on all real property with unpaid taxes as of June 1. Property tax revenue recognition occurs during the fiscal year of levy (the year the property tax revenue was intended to finance).
As of November 2001, the City of Pensacola assessed a stormwater fee to provide additional revenue for stormwater management improvements. The fee is billed annually by the Escambia County Property Tax Collector on the November property tax roll with the exception of government owned property which is billed directly by the City. The stormwater fee is subject to the same collection laws, discounts and penalties as are property taxes. Stormwater revenues are recognized during the fiscal year in which it is billed.
3. Accounts Receivable
Accounts receivable are shown net of allowances for doubtful accounts as follows: Acounts Receivable Allowance Net Governmental activities: General Fund $ 1,043,844 $ $ 1,043,844 Local Option Sales Tax Fund 230,745 230,745 Housing Assistance Payments Fund 293,349 234,679 58,670 Nonmajor Governmental Funds 97,707 97,707 Internal Service Fund 1,291,325 1,291,325 Total governmental activities $ 2,956,970 $ 234,679 $ 2,722,291
Business-type activities: Utility Fund $ 4,689,070 $ 616,572 $ 4,072,498 Sanitation Fund 651,401 92,476 558,925 Port Fund 150,798 150,798 Airport Fund 1,631,925 1,631,925 Total business-type activities $ 7,123,194 $ 709,048 $ 6,414,146
68 CITY OF PENSACOLA, FLORIDA NOTES TO FINANCIAL STATEMENTS SEPTEMBER 30, 2009
NOTE III. - DETAIL NOTES ON ALL FUNDS (Continued)
4. Deferred Revenue
Governmental funds report deferred revenue in connection with receivables for revenues that are not considered available to liquidate liabilities of the current period. Governmental funds also defer revenue recognition in connection with resources that have been received, but not-yet earned. Amounts that are “unavailable” are not reported as deferred revenue in entity wide statements. At the end of the current fiscal year, the various components of deferred revenue and unearned revenue reported in the governmental funds were as follows:
Unavailable Unearned General Fund Special assessments $ 336,156 $ Leases – Land/ROW receivables 7,266 Annual ROW maintenance receivable 15,210 Prepaid lease payments 314,701 Occupational license fees and fines received for subsequent year 649,657 Communications Service Tax 2,407,045
Special Revenue Funds HUD – Fraud Recovery 58,670 CDBG Housing Rehab Project notes receivable 1,249,085 CRA - Baylen street receivable 663,867 CRA - Lease receivables 1,562 Rent/services recievables 3,234 Grant draws prior to meeting all requirements 1,002,344 $ 2,335,050 $ 4,373,747
In Proprietary funds, the airport fund has deferred revenue of $14,428; of which $12,750 is for occupational licenses fees received for subsequent year and $1,678 is for prepaid rent.
69 CITY OF PENSACOLA, FLORIDA NOTES TO FINANCIAL STATEMENTS SEPTEMBER 30, 2009
NOTE III. - DETAIL NOTES ON ALL FUNDS (Continued)
C. Capital Assets
Capital asset activity for the fiscal year ended September 30, 2009 was as follows: Beginning Ending Balance Increases Decreases Balance Governmental activities: Non-depreciable assets: Land $ 21,689,071 $ 402,692 $ (70,487) $ 22,021,276 Construction in progress 14,202,727 4,366,314 (12,069,410) 6,499,631 Total Non-depreciable assets 35,891,798 4,769,006 (12,139,897) 28,520,907
Depreciable assets: Buildings 49,650,233 23,559,572 (2,360,687) 70,849,118 Improvements 26,433,703 317,686 (694,593) 26,056,796 Infrastructure 65,693,927 5,682,019 (667,612) 70,708,334 Equipment 28,673,526 4,559,153 (1,157,865) 32,074,814 Total Depreciable assets 170,451,389 34,118,430 (4,880,757) 199,689,062 Total capital assets $ 206,343,187 $ 38,887,436 $ (17,020,654) $ 228,209,969
Less accumulated depreciation for:
Buildings $ 14,611,277 $ 1,078,112 $ (1,377,094) $ 14,312,295 Improvements 11,568,639 818,304 (694,594) 11,692,349 Infrastructure 9,766,567 2,162,631 -0- 11,929,198 Equipment 17,708,706 2,568,340 (1,013,494) 19,263,552
Total accumulated depreciation $ 53,655,189 $ 6,627,387 $ (3,085,182) $ 57,197,394
Governmental activities capital assets, net $ 152,687,998 $ 32,260,049 $ (13,935,472) $ 171,012,575
The schedule above includes capital assets and accumulated depreciation for both governmental funds and the internal services funds. Per GASB 34 requirements, the internal service funds are reported on the entity wide statements as a governmental activity. In fiscal year 2009, the net book value of assets held by Internal Service Funds is $2,145,490.
Total depreciation expense for governmental activities for fiscal year 2009 is $6,382,796. The difference between depreciation expense and the increase in accumulated depreciation is $244,591, which is a result of capital asset transfers from business-type to governmental activities. Capital assets are transferred at historical cost, which requires the accumulated depreciation associated with the asset to also be transferred.
70 CITY OF PENSACOLA, FLORIDA NOTES TO FINANCIAL STATEMENTS SEPTEMBER 30, 2009
NOTE III. - DETAIL NOTES ON ALL FUNDS (Continued)
Beginning Ending Balance Increases Decreases Balance Business-type activities: Non-Depreciable Assets: Land $ 15,449,636 $ 1,059,026 $ (67,783) $ 16,440,879 Construction in Progress 25,580,218 32,602,034 (14,764,705) 43,417,547 Total Non-depreciable assets 41,029,854 33,661,060 (14,832,488) 59,858,426
Depreciable Assets: Buildings 78,433,113 18,923,524 -0- 97,356,637 Improvements 152,549,279 7,855,524 (2,026,486) 158,378,317 Equipment 18,770,365 5,719,881 (5,080,145) 19,410,101 Total Depreciable assets 249,752,757 32,498,929 (7,106,631) 275,145,055 Total capital assets $ 290,782,611 $ 66,159,989 $ (21,939,119) $ 335,003,481
Less accumulated depreciation for:
Building $ 37,431,087 $ 2,633,381 $ -0- $ 40,064,468 Improvements 65,381,129 5,390,893 (485,610) 70,286,412 Equipment 13,007,088 1,663,210 (923,973) 13,746,325
Total accumulated depreciation $ 115,819,304 $ 9,687,484 $ (1,409,583) $ 124,097,205
Business-type activities capital assets, net$ 174,963,307 $ 56,472,505 $ (20,529,536) $ 210,906,276
Total depreciation expense for business-type activities for fiscal year 2009 is $9,442,248. The difference between depreciation expense and the increase in accumulated depreciation is $245,236, which is a result of capital assets transferred from governmental to business-type activities that are different from the assets transferred from business-type to governmental activities.
An intangible asset is reported in the Utility Fund representing the excess of the purchase price paid over the fair market value of assets acquired. The intangible asset is amortized on a straight-line basis over an estimated useful life of forty years.
71 CITY OF PENSACOLA, FLORIDA NOTES TO FINANCIAL STATEMENTS SEPTEMBER 30, 2009
NOTE III. - DETAIL NOTES ON ALL FUNDS (Continued)
Depreciation expense was charged to functions/programs of the primary government as follows:
Governmental activities: General Government $ 706,999 Public Safety 1,294,347 Physical Environment 52,827 Transportation 273,426 Economic Environment 51,102 Culture and Recreation 1,481,951 Unallocated Infrastructure 2,162,409 Capital assets held by governmental type internal service funds are charged to the various functions based on their usage 359,735
Total depreciation expense- governmental activities $ 6,382,796
Infrastructure reported per requirement of GASB 34 is presented as a separate line item instead of a specific function/program.
Business-type activities: Gas $ 1,132,527 Sanitation 291,373 Port 1,108,909 Airport 6,909,439
Total depreciation expense- business-type activities $ 9,442,248
The fifteen year lease agreement for the City owned Amtrak Station expired May 14, 2008. Rail services for the Sunset Limited route which passes through Northwest Florida have been suspended since 2005 as a result of the damages suffered by Hurricane Katrina. The carrying value for the land and building is approximately $736,722 as reported in the governmental activities.
72 CITY OF PENSACOLA, FLORIDA NOTES TO FINANCIAL STATEMENTS SEPTEMBER 30, 2009
NOTE III. - DETAIL NOTES ON ALL FUNDS (Continued)
D. Interfund Receivables, Payables, and Transfers
Interfund receivables/payables balances as of September 30, 2009, are as follows: Due To Due From Advance To Advance From Governmental activities: General Fund $ $ 3,904,371 $ $ Local Option Sales Tax Fund 2,213,801 1,069,467 Housing Assistance Fund 21,743 Nonmajor Governmental Funds 4,637,059 4,202,899 Internal Service Funds 1,346,784 543,090 1,740,287 19,266 Total Governmental activities 8,219,387 9,719,827 1,740,287 19,266
Business-type activities: Utility Fund 326,146 246,913 257,797 Sanitation Fund 337,838 1,631,758 Port Fund 18,576 733,500 Airport Fund 162,759 Total Business-type activities 845,319 246,913 0 2,623,055 Total governmental and business-type activities * $ 9,064,706 $ 9,966,740 $ 1,740,287 $ 2,642,321
*Due to/from and consequently advance to/from do not equal as a result of an internal cash advance from the Local Option Sales Tax (LOST) Fund to the Sanitation Fund for the purchase of capital equipment. The advance is to be paid back over a ten year term. GAAP requires that a due to be recorded for the current portion and an advance from for the long term portion in the Sanitation Fund; however, the full amount is required to be recorded as a current due from in the LOST Fund.
Internal balances-current reported in the government-wide statement of net assets in the amount of $598,406 represents the amounts receivable/payable between government and business-type activities for end of year payroll liabilities and risk management claims.
Internal balances-noncurrent reported in the government-wide statement of net assets in the amount of $2,623,055 represents the long-term portion of future claims payable by the business- type funds to the Internal Service Fund-Insurance Retention Fund. The Insurance Retention Fund is reported in the government-wide statement as a governmental activity. Due to/from and Advance to/from are reported in fund financial statements as above.
73 CITY OF PENSACOLA, FLORIDA NOTES TO FINANCIAL STATEMENTS SEPTEMBER 30, 2009
NOTE III. - DETAIL NOTES ON ALL FUNDS (Continued)
For the year ended September 30, 2009, interfund transfers are as follows:
Governmental activities: Major Governmental Funds Transfer In Transfer Out Purpose General Fund $ 8,000,000 Operating subsidy from Utility Fund $ 8,374,859 UCRT, Library, Roger Scott Tennis, Golf Course, Inspection Services, TFFDS, Eastside TIF, Stormwater capital Nonmajor Governmental Funds Community Redevelopment 2,571,146 Operating transfer from UCRT Agency (CRA) Urban Core Redevelopment 1,751,769 City’s required contribution Trust (UCRT) 3,000,895 CRA and CRA Debt Service West Florida Regional Library 1,346,300 City’s portion of interlocal agreement
CRA Debt Service Fund 429,749 Transfer from UCRT to pay debt service
Operating subsidy from General Fund Athletic Fund 55,000 for Roger Scott Tennis Center
Golf Course Fund 140,000 Operating subsidy from General Fund
Inspection Services Fund 150,000 Operating subsidy from General Fund
Tax and Franchise Fee Debt Transfer from General Fund to pay debt 2,979,062 Service Fund (TFFD) service Eastside Tax Increment 45,397 City’s required contribution Financing District Stormwater Capital Fund 1,907,331 Capital subsidy from General Fund
Business-type activities: Utility Fund 8,000,000 Operating subsidy to General Fund Total $ 19,375,754 $ 19,375,754
Transfers reported in the government-wide statement of activities in the amount of $8,000,000 represent the net amount of transfers between government and business type activities. Fund financial statements report transfers without eliminations within same type activity and are reported as above.
74 CITY OF PENSACOLA, FLORIDA NOTES TO FINANCIAL STATEMENTS SEPTEMBER 30, 2009
NOTE III. - DETAIL NOTES ON ALL FUNDS (Continued)
E. Fund Balance Deficit
The Maritime Community Park Construction Fund has a negative fund balance for the third year in a row. For the year ended September 30, 2009, the negative fund balance equaled $2,390,363. This represents design expenditures incurred on the project and is programmed to be funded in fiscal year 2010.
F. Lease Obligations
The City is obligated under certain leases accounted for as operating leases. Operating leases do not give rise to property rights or lease obligations; therefore, the results of the lease agreements are not reflected in the City's assets or liabilities.
In April 1992, the City of Pensacola entered into a lease agreement for the use of office space located at 116 South Palafox Place. On May 1, 2007 the lease agreement was extended for an additional two years. The amended lease agreement called for an annual rent of $36,608 in year one and $37,706 in year two; the lease expired on May 1, 2009 and was not renewed as the office space is no longer needed.
G. Long-term Debt
Individual Bond Issues
Below are the City’s individual bond issues which were outstanding at September 30, 2009:
Governmental activities:
Major Funds
$14,000,000 Sales & Excise Tax Refunding Revenue Bonds, Series 2004, 2% - 4% serial bonds with annual installments ranging from $448,004 – $2,936,088 beginning October 1, 2004 maturing October 1, 2012. The general government principal portion was $12,460,000 of the par amount. $ 10,835,750
$6,500,000 Capital Improvement Revenue Bonds, Series 2000A were issued through the Gulf Breeze Capital Funding Program. Interest is paid on the first of every month beginning July 1, 2000 and is a calculation using the Securities Industry and Financial Markets Association rate plus 34 basis points. Principal payments begin in 2013 with final maturity in 2017. 6,500,000
75 CITY OF PENSACOLA, FLORIDA NOTES TO FINANCIAL STATEMENTS SEPTEMBER 30, 2009
NOTE III. - DETAIL NOTES ON ALL FUNDS (Continued)
$13,500,000 Capital Improvement Revenue Bonds, Series 2000B were issued through the Gulf Breeze Loan Pool. Interest is paid on the first of every month and is a calculation using the Securities Industry and Financial Markets Association rate plus 34 basis points. Principal payments begin in 2013 with final maturity in 2017. 13,500,000
Unamortized premiums 100,364
Total Major Fund Types 30,936,114
Nonmajor Funds
$3,271,866 Redevelopment Refunding Revenue Bonds, Series 2004 serial bonds with a fixed rate of interest at 3.710% annual installments range from $345,792 to $414,052 with a final maturity in 2013. 1,569,441
Total Governmental Activities $ 32,505,555
Business-type Activities:
Utility Enterprise
$8,000,000 Gas System Revenue Bonds, Series 1999, 4.85% – 5.35% serial bonds, due in annual installments ranging from $500,000 to $865,000 through the year 2019. $ 7,500,000
$6,000,000 Gas System Revenue Bonds, Series 2008, were issued through the Gulf Breeze Loan Pool. Interest is paid on the first of every month and is based on the Securities Industry and Financial Markets Association rate plus 34 basis points. Principal payments begin in 2010 with final maturity in 2017. 4,855,947 $6,000,000 Gas Utility Revenue Note, Series 2009, had a fixed interest rate of 5.77% and final maturity of principal in 2018. The note was paid in full in December 2009. 4,122,778
Unamortized discounts (26,060)
Total Utility Enterprise 16,452,665
76 CITY OF PENSACOLA, FLORIDA NOTES TO FINANCIAL STATEMENTS SEPTEMBER 30, 2009
NOTE III. - DETAIL NOTES ON ALL FUNDS (Continued)
Port Enterprise
$1,540,000 Port portion of the $14,000,000 Sales & Excise Tax Refunding Revenue Bonds, Series 2004, 2.00% - 4.00% serial bonds with annual installments ranging from $59,265 – $363,530 beginning October 1, 2004 maturing October 1, 2012. 1 ,339,250 Unamortized premium 11,907 Total Port Enterprise 1,351,157
Airport Enterprise
$5,800,000 Airport Revenue Bond, Series 1997B - Serial bonds with interest rates ranging from 5.40% - 5.625% and principal payments ranging from $175,000 to $710,000. The last annual installment is due October 1, 2014. 3,735,000
$18,120,000 Airport Revenue Refunding Bonds, Series 1998, $7,305,000 6.00% - 6.25% serial bonds due in installments ranging from $485,000 to $880,000 through the year 2010, $3,000,000 of term bonds at 6.10% due October 1, 2012 and $7,815,000 at 6.125% due October 1, 2018. 11,695,000
$15,145,000 Airport Refunding Revenue Bonds, Series 2005A refunded the outstanding principal of Series 1997A, Airport Revenue Bonds. The 2005A bonds are all serial bonds with a rate of 3.00% - 4.00% with annual installments ranging from $721,695 - $1,440,275 beginning October 1, 2006 maturing October 1, 2027. 14,845,000
$29,060,000 Airport Capital Improvement Revenue Bonds, Series 2008A. $4,805,000 of serial bonds have a fixed interest rate of 5% - 5.5% with a maturity date of October 2018, $8,630,000 of term bonds with a fixed interest rate of 6% maturing October 2028 and $15,625,000 with a fixed interest rate of 6.25% maturing October 2038. Debt service payments are made from Passenger Facility Charge (PFC) revenues. Final maturity of principal occurs on October 1, 2038. 29,060,000
$6,720,000 Airport Capital Improvement Revenue Bonds, Series 2008B. $995,000 of serial bonds have a fixed interest rate of 5% - 5.5% with a maturity date of October 2018, $2,040,000 of term bonds with a fixed interest rate of 6% maturing October 2028 and $3,685,000 with a fixed interest rate of 6.25% maturing October 2038. Final maturity of principal occurs on October 1, 2038. 6,720,000
77 CITY OF PENSACOLA, FLORIDA NOTES TO FINANCIAL STATEMENTS SEPTEMBER 30, 2009
NOTE III. - DETAIL NOTES ON ALL FUNDS (Continued)
$19,000,000 Airport Taxable Customer Facility Charges Revenue Note, Series 2008. Interest is paid on the first of every month and is calculated using 30 day LIBOR rate plus .75% per annum. Debt service payments are secured with an additional $2.50 Customer Facility Charge (CFC). Final maturity of principal occurs in 2011. 17,847,177
Unamortized discounts (776,774) Total Airport Enterprise 83,125,403 Total Business-type Activities $100,929,225
Changes in Long-Term Liabilities
Following is a summary of changes in the long-term liabilities for the year ended September 30, 2009:
Beginning Due Within Balance Increases Decreases Ending Balance One Year
Governmental activities Bonds payable $ 35,376,807 $ $ (2,871,252) $ 32,505,555 $ 2,916,588 Claims and judgments 1,482,997 1,899,714 (1,019,878) 2,362,833 Compensated absences 6,110,609 105,331 (182,891) 6,033,049 88,312 OPEB 1,245,542 1,307,713 2,553,255 Governmental activity long-term liabilities $ 44,215,955 $ 3,312,758 $ (4,074,021) $ 43,454,692 $ 3,004,900
Business-type activities Bonds payable $ 77,161,699 $ 3,880,194 $ (2,082,623) $ 78,959,270 $ 2,544,600 Notes payable 10,697,123 11,914,705 (641,873) 21,969,955 Compensated absences 1,960,791 41,059 (104,040) 1,897,810 32,725 OPEB 482,457 505,565 988,022 Business-type activity long-term liabilities $ 90,302,070 $ 16,341,523 $ (2,828,536) $ 103,815,057 $ 2,577,325
Bonds payable for governmental activities includes $100,364 of unamortized premiums. Bonds Payable for business-type activities is reported net of unamortized discounts in the amount of $802,834 and unamortized premiums of $11,907. Reductions of Bonds Payable include principal payments and amortization of discounts.
Compensated absences are estimated at year end only. In addition, for the governmental activities, claims and judgments are liquidated by the insurance retention fund and compensated absences are generally liquidated by the general fund.
Other Postemployment Benefits (OPEB) were calculated by an independent party which provided an actuarial valuation of post-employment benefits as required by GASB 45, Accounting and Financial Reporting by Employers for Postemployment Benefits Other than Pensions. 78 CITY OF PENSACOLA, FLORIDA NOTES TO FINANCIAL STATEMENTS SEPTEMBER 30, 2009
NOTE III. - DETAIL NOTES ON ALL FUNDS (Continued)
Summary of Debt Service Requirements to Maturity
Annual debt service requirements to maturity for long-term bonds and notes are as follows; includes both fixed and variable interest rate bonds/notes:
Governmental Long-Term Debt
Fiscal Year Ending Total Principal September 30, Principal Interest and Interest 2010 $ 2,916,588 $ 1,444,353 $ 4,360,941 2011 3,028,259 1,327,942 4,356,201 2012 3,162,691 1,200,619 4,363,310 2013 5,397,653 976,783 6,374,436 2014 2,750,000 768,958 3,518,958 2015-2018 15,150,000 1,245,876 16,395,876 Total 32,405,191 6,964,531 39,369,722 Less: Current (2,916,588) - (2,916,588)
Total government debt $ 29,488,603 $ 6,964,531 $ 36,453,134
Includes Nonmajor Fund (Community Redevelopment Agency) debt service of $1,569,441. Principal is shown in gross, excluding unamortized premiums of $100,364.
Business-Type Activities Long-Term Debt
Fiscal Year Ending Total Principal September 30, Principal Interest and Interest 2010 $ 2,544,600 $ 5,286,224 $ 7,830,824 2011 21,268,751 4,544,328 25,813,079 2012 3,705,705 3,943,881 7,649,586 2013 3,903,882 3,743,908 7,647,790 2014 3,726,758 3,539,720 7,266,478 2015-2019 25,135,456 14,465,387 39,600,843 2020-2024 10,825,000 10,311,061 21,136,061 2025-2029 11,300,000 7,455,847 18,755,847 2030-2034 8,200,000 4,815,313 13,015,313 2035-2039 11,110,000 1,819,688 12,929,688 Total 101,720,152 59,925,357 161,645,509 Less: Current (2,544,600) - (2,544,600)
Total business-type debt $ 99,175,552 $ 59,925,357 $ 159,100,909
Principal is shown in gross, excluding unamortized premiums and discounts of $11,907 and $802,834, respectively.
79 CITY OF PENSACOLA, FLORIDA NOTES TO FINANCIAL STATEMENTS SEPTEMBER 30, 2009
NOTE III. - DETAIL NOTES ON ALL FUNDS (Continued)
Governmental long-term debt includes the 2000A and 2000B Capital Improvement Revenue Bonds dated June 1, 2000 for $6,500,000 and $13,500,000 respectively. Both bonds are variable rate debt with the interest rate set at the Securities Industry and Financial Markets Association rate plus 34 basis points. Interest only is due through 2012 with principal and interest payments from 2013 through 2017. For calculation purposes, interest is computed at 5.555%; however, actual interest rates for fiscal year 2009 ranged between 4.422% and .66%. Interest expense for fiscal year 2009 on Series 2000A and 2000B was $97,557 and $202,618, respectively.
Business-type activities long-term debt includes the 2008 Gas System Revenue Bonds dated September 30, 2008 for $6,000,000. The bonds are variable rate debt with the interest rate set at the Public Securities Association Municipal Market Data 7 Day Swap Index plus 34 basis points. Interest is due through 2018 with principal payments commencing in 2011 through 2017. For calculation purposes, interest is computed at 5%. Interest expense for fiscal year 2009 was $27,563. As of September 30, 2009 the drawdown of the 2008 bonds are $4,855,947.
Business-type activities long-term debt also includes the 2008 Airport Taxable Customer Facility Charges Revenue Note dated February 4, 2008 for $19,000,000. The bonds are variable rate debt with the interest rate set LIBOR rate plus .75% per annum. Interest is due through 2011 with a one time principal payment due in 2011. For calculation purposes, interest is computed at 5.55%; however, actual interest rates for fiscal year 2009 ranged between 4.51 and 1.022%. Interest expense for fiscal year 2009 was $238,221. As of September 30, 2009 the drawdown of the 2008 bonds are $17,847,177.
Debt Restriction
There are a number of limitations and restrictions contained in the various bond indentures. The City is in compliance with all significant limitations and restrictions. The City has no legal debt margin.
Revenues Pledged for Debt Repayment
General Government Public Service Tax Electric Franchise Fees Sales Taxes Tax Increment Revenues
Utility Enterprise Utility Revenues
Port Enterprise Public Service Tax Franchise Fees Sales Taxes
Airport Enterprise Airport Revenues Passenger Facility Charges Customer Facility Charges
80 CITY OF PENSACOLA, FLORIDA NOTES TO FINANCIAL STATEMENTS SEPTEMBER 30, 2009
NOTE III. - DETAIL NOTES ON ALL FUNDS (Continued)
In June 2009 the pledged revenues for the 2004 Redevelopment Refunding Revenue Note were substituted. The original issuance of bonds had a pledge of tax increment financing (TIF) revenues of the Community Redevelopment Agency (CRA). This pledge of TIF revenues was substituted with a covenant to budget and appropriate from non-ad valorem revenues of the City however the payment stream for debt service will continue to be made from CRA revenues. The pledge substitution was needed to increase the strength of the newly issued 2009 Redevelopment Bonds.
Conduit Debt
In the past, the City of Pensacola has issued Industrial Development Bonds to provide assistance to private-sector entities for acquisition and construction of facilities deemed to be in the public interest. The bonds are secured by the property financed and are payable solely from payments received on the underlying mortgage loans. Neither the City, the State, nor any other political subdivision thereof is obligated in any manner for repayment of the bonds. Accordingly, the bonds are not reported as liabilities in the accompanying financial statements.
As of September 30, 2009, there was only one series of Industrial Development Bonds outstanding. That issue has a principal balance of $1,840,000. The bonds were issued in 1984 bearing the name of Harborview Corporation.
NOTE IV. – OTHER INFORMATION
A. Risk Management
The City is self-insured with respect to general, auto liability and workers' compensation claims. An excess liability policy for workers’ compensation has been purchased. This excess policy also provides excess general liability coverage. In any given fiscal year, insurance settlements have not exceeded insurance coverage. (Coverage limits have remained relatively constant over the past five years.) The coverage limits and deductibles are as follows:
Primary Coverage Coverage (in millions) Deductible Port operations 50 15,000 Airport operations 75 2,500 Police officers 2 50,000 Public officials 2 50,000
81 CITY OF PENSACOLA, FLORIDA NOTES TO FINANCIAL STATEMENTS SEPTEMBER 30, 2009
NOTE IV. – OTHER INFORMATION (Continued)
Excess Liability Coverage Coverage (in millions) Self Insured Retentions Workers' compensation Per Florida Statutory Limits 500,000 Per Occurrence General Liability 1 1,000,000 Per Occurrence Gas Operation 35 200,000 Per Occurrence Gas Operation - Pollution 35 500,000 Per Occurrence
The City has established reserves of $917,601 in the Insurance Retention Fund representing a contract between the City and its employees regarding health, life, dental and survivor disability insurance; a majority of which is survivor disability insurance. This amount is not available for city-wide catastrophic losses.
All departments of the City participate in the self insurance program and make payments to the Insurance Retention Fund. Claims liability of $2,362,833 at September 30, 2009 is based on the requirements of Governmental Accounting Standards Board (GASB) Statements No. 10 and No. 30, which require that a liability for claims be reported if information prior to the issuance of the financial statements indicates that it is a) probable that a liability has been incurred at the date of the financial statements and b) the amount of the loss can be reasonably estimated.
Claim liabilities, including incurred but not reported (IBNR) claims, are based on the estimated ultimate cost of settling the claim (including the effects of inflation and other societal and economic factors), using past experience adjusted for current trends, and any other factors that would modify past experience. Claim liabilities also include specific, incremental claim adjustment expenses. In addition, estimated amounts of salvage and subrogation and reinsurance recoverable on unpaid claims are deducted from the liability for unpaid claims. Expenses and liabilities are estimated through a case-by-case review of all claims and the application of historical experience of the outstanding claims. Estimates of IBNR losses are based on historical experience and are stratified to general, automobile and workers' compensation liabilities.
At September 30, 2009, the claims liability for automobile, general and workers’ compensation liability were $182,363, $96,585, and $2,083,885, respectively. The City’s insurance administrators do not calculate or report discounted amounts for automobile and general liability. Workers’ compensation liability is discounted at a rate of 8%. Each claim under workers’ compensation is calculated independently using the monthly payment amount and the present value factor. The undiscounted amount is not calculated, therefore unavailable for disclosure.
Changes in the Fund's claims liability amount in fiscal year 2008 and 2009 were:
Beginning of Current Year Claims Balance at Fiscal Fiscal Year and Changes in Claim Fiscal Year Liability Estimates Payments Year End 2008 $1,942,316 554,711 (1,014,030) $1,482,997 2009 $1,482,997 1,899,714 (1,019,878) $2,362,833
82 CITY OF PENSACOLA, FLORIDA NOTES TO FINANCIAL STATEMENTS SEPTEMBER 30, 2009
NOTE IV. – OTHER INFORMATION (Continued)
B. Pension Plans
The financial statements for the General, Fire and Police Pension Plans are presented below:
STATEMENT OF NET ASSETS SEPTEMBER 30, 2009
General Firemen's Police Pension and Relief and Officers' Retirement Pension Retirement ASSETS Fund Fund Fund Other cash $ 190,477 $ 201,734 $ 170,866
Receivables Employer 55,698 15,802 82,598 Employee 20,464 83,322 1,156 Commission Recapture 1,885 3,200 150 Total receivables 78,047 102,324 83,904 Investments Short term investments 1,632,229 991,488 904,109 Debt Securities & Bond Mutual Funds 41,739,147 23,079,325 12,524,784 Stock Mutual Funds 18,797,024 1,911,066 Mortgage Backed Securities 436,276 3,304,407 7,233,693 Commingled Index Fund 9,255,837 Commingled Trust Fund 10,097,099 Domestic Stocks 40,225,047 45,188,314 20,608,536 Total investments 102,829,723 82,660,633 52,438,025
Total assets $ 103,098,247 $ 82,964,691 $ 52,692,795
LIABILITIES AND FUND BALANCES
Liabilities: Accounts payable $ 286,331 $ 136,733 $ 171,267 Total liabilities 286,331 136,733 171,267 Net assets Held in trust for pension benefits $ 102,811,916 $ 82,827,958 $ 52,521,528
83 CITY OF PENSACOLA, FLORIDA NOTES TO FINANCIAL STATEMENTS SEPTEMBER 30, 2009
NOTE IV. – OTHER INFORMATION (Continued)
STATEMENT OF CHANGES IN NET ASSETS FOR THE YEAR ENDED SEPTEMBER 30, 2009
General Firemen's Police Pension and Relief and Officers' Retirement Pension Retirement Fund Fund Fund Additions Contributions - city $ 7,447,653 $ 3,168,964 $ 2,770,960 Contributions - employee 709,440 555,411 36,961 Commission recapture 10,164 13,385 943 Insurance proceeds - State of Florida 530,169 527,249 Total contributions 8,167,257 4,267,929 3,336,113
Investment income Net appreciation (depreciation) in fair value of investments 1,441,993 3,168,502 (1,045,385) Interest and dividends 3,308,808 2,429,014 1,480,575 4,750,801 5,597,516 435,190 Less investment expense 275,061 326,376 196,574 Net investment income 4,475,740 5,271,140 238,616
Total additions 12,642,997 9,539,069 3,574,729
Deductions Pensions paid - employees 8,407,747 4,629,416 2,130,358 Pensions paid - widows 1,306,586 583,651 362,693 Pensions paid - children 4,718 11,436 Refunds to employees 27,203 6,467 9,952 Deferred retirement option plan 289,245 154,937 200,681 Health insurance assistance 188,300 Administrative expenses 96,794 160,036 47,032
Total deductions 10,320,593 5,545,943 2,750,716
Change in net assets 2,322,404 3,993,126 824,013
Net assets held in trust for pension benefits Beginning of year 100,489,512 78,834,832 51,697,515
End of year $ 102,811,916 $ 82,827,958 $ 52,521,528
The State Insurance proceeds are based on Chapter 185.08 and Chapter 19112 of the Laws of Florida.
84 CITY OF PENSACOLA, FLORIDA NOTES TO FINANCIAL STATEMENTS SEPTEMBER 30, 2009
NOTE IV. – OTHER INFORMATION (Continued)
C. Pension Plan Obligations
Pension Plan Descriptions and Contribution Information The City maintains three contributory, defined benefit, single employer pension plans which are administered by the City’s Director of Finance. The Firefighters’ Relief and Pension plan covers full-time firefighters; the Police Officers’ Pension plan covers full-time police officers; the General Pension and Retirement plan covers non-public safety, full-time employees. The administrative costs are included in the City’s cost and contribution rate provided in the actuarial valuation. Benefits and refunds of the defined pension plan are recognized when due and payable in accordance with the terms of the plan.
Prior to October 1, 1979 all non-public safety, full-time employees were required to participate in the General Pension and Retirement plan; employees hired between October 1, 1979 and October 6, 1997 were given an option to participate in the General Pension and Retirement plan or a deferred compensation plan; new employees hired between October 6, 1997 through June 17, 2007 were required to participate in the General Pension and Retirement plan. As of June 18, 2007 the General Pension and Retirement Plan was closed to new participants. Existing non- public safety, full-time employees were given an option to remain in the General Pension and Retirement plan or join the Florida Retirement System (FRS), a non-contributory, multiple- employer, cost sharing public employee retirement system. Non-public safety, full-time employees hired after June 18, 2007 are required to participate in the FRS. Unlike the General Pension and Retirement plan, FRS requires employees to participate in the Federal Social Security Program.
Actuarial reports for the General Pension and Retirement plan, Firefighters’ Relief and Pension plan and Police Officers’ Retirement plan are required to be updated every three years per State Statue Chapter 112.63(2), 175.261(1)(b) and 185.221(2)(b), respectively . Membership of the General Pension and Retirement plan and the Firefighters’ Relief and Pension plan at September 30, 2008, and the Police Officers’ Retirement plan at September 30, 2006 (the date of the latest actuarial valuation) consisted of the following:
General Pension Firefighters’ Police Officers’ and Retirement Relief and Pension Retirement
Retirees and beneficiaries receiving benefits 567 159 111 Terminated plan members entitled to but not yet receiving benefits 54 0 3 DROP plan members 43 15 8 Active plan members 341 106 162 Total 1,005 280 284
Number of participating Employers 1 1 1
85 CITY OF PENSACOLA, FLORIDA NOTES TO FINANCIAL STATEMENTS SEPTEMBER 30, 2009
NOTE IV. – OTHER INFORMATION (Continued)
The benefit provisions and all other requirements of the firefighters' plan are established by Special Act of the State. The benefit provisions and all other requirements of the police officers’ and regular employees’ plans are established by City ordinance. FRS benefits are established by Chapter 121 of the Florida Statue. The accrual method of accounting is used as the basis of accounting for all four of the plans. Those provisions and requirements as of September 30, 2009 are summarized as follows:
Florida Retirement System General Pension Firefighters' Relief Police Officers' (FRS) and Retirement and Pension Retirement Vesting 6 years 6 years 10 years 10 years Eligibility for Age 62 with (w/) 30 yrs of Age 55 w/ 20 yrs of svc Age 52 w/10 yrs of svc Age 55 w/10 yrs of svc retirement svc or 30 yrs of svc w/no or 30 yrs of svc w/no or 25 yrs of svc w/no or 25 yrs of svc w/ no age requirement age requirement age requirement age requirement Annual Based on final average Based on final average Based on final average Based on final average retirement earnings (highest 5 yrs): earnings (highest 2 of earnings (highest 2 of earnings (highest 2 of benefit last 5 yrs): last 5 yrs): last 5 yrs): Regular Class - Age 62 1.6% - 75% of 1st $2,400 75% of final monthly Percentage of average - Age 63 1.63% - 50% of next $1,200 average earnings for final compensation for - Age 64 1.65% - 40% of excess or normal retirements with each full year of - Age 65 1.68% 2.1% times yrs of svc 25 or more yrs of svc credited service: (30 yrs max) times or: - Hired before 10/1/79 Senior Mgmt - 75% of 1st $2,400 receive 2% - Age 62 2% final monthly average earnings (whichever - 70% of next $1,200 - Hired after 10/1/79 Elected Officials formula provides the - 65% of any add'l who elected to - Age 62 3% greater benefit) but amount for disability participate receive 3% not less than $25 per retirements and - Hired after 10/1/79 Special Risk normal retirements who elected to - Age 62 yr of svc w/less than participate receive 3% - 2% if hired between 25 yrs of svc 12/1/70 and 9/30/74 - 3% if hired after 10/1/74 Other - Early retirement - Early retirement - Early retirement - Early retirement Benefits - Deferred retirement - Deferred retirement - Deferred retirement - Deferred retirement - Disability retirement - Disability retirement - Disability retirement - Disability retirement - Health insurance subsidy - Health ins. subsidy - Death benefits - Death benefits - Death benefits - Death benefits - Deferred retirement - Deferred retirement - Deferred retirement option - Deferred retirement option program option program program option program
Post- 3% per year Up to 1.5% annually Up to 3% annually w/a Up to 3% annually w/a retirement w/a corresponding corresponding increase corresponding increase COLA increase in the CPI in the CPI in the CPI (Increase discretion - Pension Bd) Contributions * Employee 0.00% 5.50% 11.00% 0.50% Employer See Below 57.74% 58.15% 37.48% Regular Class 9.85% N/A N/A N/A Senior Mgmt 13.12% N/A N/A N/A Elect Officials 16.53% N/A N/A N/A DROP 10.91% N/A N/A N/A Special Risk 20.92% N/A N/A N/A State N/A N/A 9.73% 7.13% *All employee contributions to the pension plans and the City’s contribution to the Police Officers’ Retirement Plan are based on a percentage of pay. The remaining contribution percentages shown above are reported as a percentage of pay for comparative purposes only. 86 CITY OF PENSACOLA, FLORIDA NOTES TO FINANCIAL STATEMENTS SEPTEMBER 30, 2009
NOTE IV. – OTHER INFORMATION (Continued)
The General Pension and Retirement Plan, the Firefighters’ Relief and Pension Plan and the Police Officers’ Retirement Fund do not issue audited stand-alone financial statements but rely on the audit performed for the City. All three of the defined benefit pension plans are included within this financial report.
The funded status of the General Pension and Retirement Plan as of September 30, 2008, the Firefighters’ Relief and Pension Plan as of October 1, 2008 and the Police Officers’ Retirement Fund as of October 1, 2006 is as follows:
(4) UAAL (1) (2) Unfunded (5) As A Percentage Actuarial Actuarial Accrued (3) AAL Annual Of Covered Value Liability(AAL) Percentage (UAAL) (2)- Covered Payroll of Assets Frozen Entry Age Funded (1)/(2) (1) Payroll (4)/(5)
General Pension $ 114,133 $ 163,922 69.6% $ 49,789 $ 13,546 $ 367.6% Fire Pension 88,835 107,803 82.4% 18,968 5,513 344.1% Police Pension 55,628 67,807 82.0% 12,179 7,601 160.2%
The schedules of funding progress, presented as required supplementary information (RSI) following the notes to the financial statements, present multiyear trend information about whether the actuarial values of the plan assets are increasing or decreasing over time relative to the AALs for benefits.
Additional information as of the latest actuarial valuation follows:
General Pension and Retirement Firefighters’ Relief and Police Officers’ Retirement
Valuation date 9/30/2008 10/1/2008 10/1/2006 Actuarial cost method Entry Age Normal Cost Entry Age Normal Cost Frozen Entry Age Amortization method Level Percentage Closed Level Percentage Open Level Percentage Closed Remaining Amortization 19 years 7-30 years 25 years Asset Valuation Method 5 year smoothed market 5 year phased in period 5 year weighted index Actuarial Assumptions: Investment rate of return 8.00% 8.00% 8.00% Projected salary increases 4.50% - 9.50% 4.00% 5.50% Includes inflation at: 3.50% 4.00% 3.00% Cost of living adjustments 1.50% 2.88% 2.80%
The Florida Retirement System issues a publicly available financial report that includes financial statements and required supplementary information for the System. That report may be obtained by writing to the Florida Division of Retirement, 2639 N. Monroe Street, Building C, Tallahassee, Florida 32399 or calling 1-850-488-6491.
87 CITY OF PENSACOLA, FLORIDA NOTES TO FINANCIAL STATEMENTS SEPTEMBER 30, 2009
NOTE IV. – OTHER INFORMATION (Continued)
Pension Plan Obligations
General Firefighters’ Police Officers’ Pension and Relief Retirement Retirement and Pension
Annual required contributions $ 7,094,735 $ 3,704,687 $ 3,189,523 for 9/30/09 (a)
Interest on net pension obligation -0- -0- -0-
Adjustment to annual required Contribution -0- -0- -0-
Annual Pension Cost 7,094,735 3,704,687 3,189,523
Contributions Made (7,094,735) (3,704,687) (3,189,523)
Increase (decrease) in net pension Obligation -0- -0- -0-
Net pension obligation beginning of year -0- -0- -0-
Net pension obligation end of year $ -0- $ -0- $ -0-
(a) Firefighters’ Relief and Pension plan represent annual required contributions as of 9/30/07. General Pension and Retirement and Police Officers’ Retirement plans represent annual required contributions as of 9/30/08.
Three-Year Trend Information Trend information gives an indication of the progress made in accumulating sufficient assets to pay benefits when due. The annual pension cost (APC) and net pension obligation for the years ended 2007, 2008 and 2009 for the City’s three contributory, defined benefit, single employer pension plans are presented below. The years presented are the most recent years that actuarial information is available.
FLORIDA RETIREMENT SYSTEM (FRS)
Annual Pension Percentage of Net Pension Cost (APC) APC Contributed Obligation
9/30/07 $ 232,103 100% $ -0-
9/30/08 921,838 100% -0-
9/30/09 897,260 100% -0-
88 CITY OF PENSACOLA, FLORIDA NOTES TO FINANCIAL STATEMENTS SEPTEMBER 30, 2009
NOTE IV. – OTHER INFORMATION (Continued)
GENERAL PENSION AND RETIREMENT FUND
Annual Pension Percentage of Net Pension Cost (APC) APC Contributed Obligation
9/30/07 $ 5,962,692 100% $ -0-
9/30/08 6,263,729 100% -0-
9/30/09 7,094,735 100% -0-
FIREFIGHTERS’ RELIEF AND PENSION FUND
Annual Pension Percentage of Net Pension Cost (APC) APC Contributed Obligation
9/30/06 $ 3,181,675 100% $ -0-
9/30/07 3,605,366 100% -0-
9/30/08 3,704,687 100% -0-
POLICE OFFICERS’ RETIREMENT FUND
Annual Pension Percentage of Net Pension Cost (APC) APC Contributed Obligation
9/30/05 $ 2,959,233 100% $ -0-
9/30/06 2,937,401 100% -0-
9/30/07 3,189,523 100% -0-
Retiree Benefits In addition to providing pension benefits, the City of Pensacola provides a health insurance benefit for retired employees who worked for the City for ten or more years and had health insurance coverage at the time of their retirement. Retirees may keep the same level of insurance coverage (single or family) they had as an active employee or they may reduce the level of coverage from family to single coverage. However, they cannot increase coverage from single to family after retirement. Approximately 369 retirees and/or families were covered during the fiscal year ended September 30, 2009. The city does not cover the cost of any retiree insurance.
89 CITY OF PENSACOLA, FLORIDA NOTES TO FINANCIAL STATEMENTS SEPTEMBER 30, 2009
NOTE IV. – OTHER INFORMATION (Continued)
Other Postemployment Benefits (OPEB) The City of Pensacola offers three plans for health care through Blue Cross Blue Shield of Florida; Health Options HMO, Blue Options PPO Health Savings Account and BlueMedicare Group PPO. Insurance is offered to both active employees and retirees however only active employees receive a premium contribution.
In order to comply with requirements of GASB 45, the City contracted with a recognized and certified actuarial firm to provide an actuarial valuation of post-employment benefits. Post- employment benefits, such as health care, will continue to be offered on a retiree pay all basis with no premium subsidy. The State of Florida, per Statute 112.0801, requires claims experience of the retiree group to be co-mingled with that of active employees in determining the health plan cost. According to GASB 45, the co-mingling of claims requirement equates to an implicit subsidy to retirees which creates an OPEB liability on the part of the City.
The actuary’s report was prepared based on the valuation date of December 31, 2007 for the reporting period of September 30, 2009. The actuary used the Projected Unit Credit Actuarial Cost Method with normal pension-related actuarial assumptions and a decreasing estimate of health care cost increases ranging from 10% to 5% over an 8-year period. The calculation produced an unfunded obligation of $36,455,001 and an annual required contribution (ARC) as 5.52% of active payroll projected to be $1,813,278. The ARC represents a level of funding that, if paid on an ongoing basis, is projected to cover normal cost each year and amortize any unfunded actuarial liability over a period not to exceed thirty years.
Annual required contribution (ARC) $ 1,813,278 Interest on net OPEB obligation - Adjustment to ARC - Annual OPEB cost 1,813,278 Contributions made - Increase in net OPEB obligation 1,813,278 Net OPEB obligation-beginning of year 1,727,999 Net OPEB obligation-end of year $ 3,541,277
The City does not intend to fund the actuarial liability. The net OPEB obligation and ARC is recorded at the fund level for proprietary activities and the allocated amount for governmental activities is presented at the government-wide level. The OPEB expense, or ARC, is included in the line item of salaries for proprietary fund statements and is allocated by function for governmental activities on the government-wide financial statements. In the year of implementation the Net OPEB Obligation and the ARC are the same amount. The Net OPEB Obligation will continue to increase if the obligation is not funded.
90 CITY OF PENSACOLA, FLORIDA NOTES TO FINANCIAL STATEMENTS SEPTEMBER 30, 2009
NOTE IV. – OTHER INFORMATION (Continued)
Annual Required Contribution (ARC) Expense Governmental Activities $ 1,198,227 Utility Fund 260,744 Sanitation Fund 101,512 Port Fund 19,904 Airport Fund 123,405 Insurance Retention Fund 11,942 Central Services 97,544 Total ARC Expense $ 1,813,278
Deferred Compensation/Replacement Benefit Program The City of Pensacola also has four retirement plans which are defined contribution pension plans. These plans provide benefits at retirement to general and public safety employees of the City. At September 30, 2009 there were 762 active plan members. The plan provisions and contribution requirements are established and may be amended by the City of Pensacola City Council. The following is a schedule of employee and employer contributions.
Elected Officers & Social Security Pension Part-time Replacement Replacement Non-Social Employees Plan Plan Security Plan Plan Employee 4.7%, 5.7% or 6.7% 5.5% $10 minimum 7.5% Contribution 0-5 yrs of service 1.5% City Matches employee’s 5-10 yrs of service 2.5% None None Contributions contribution up to 6.7% 10 or more years 6.5% Employee Contribution $1,919,876 $127,630 $471,372 $931 for 9/30/09 City Contribution $1,355,216 $133,691 N/A N/A for 9/30/09
Employer and plan member contributions are recognized in the period that the contributions are due. As required by Internal Revenue Code Section 457, the assets are held in trust for the employees’ benefit. The Director of Finance, selected by the government as the administrator, is responsible for the administration of the plan, including approval of certain investment alternatives (funds) which are made available to plan participants. The government has a fiduciary duty to administer the plan properly and to assure that the investment alternatives made available are reasonable. However, since plan participants select the investment fund or funds in which their deferred compensation accounts are invested, the government has no liability for investment losses which occur as a result of the investments selected by the plan participants.
91 CITY OF PENSACOLA, FLORIDA NOTES TO FINANCIAL STATEMENTS SEPTEMBER 30, 2009
NOTE IV. – OTHER INFORMATION (Continued)
Termination Benefits The City of Pensacola does not offer any termination benefits to employees. Therefore, GASB Statement No. 47, Accounting for Termination Benefits, does not apply.
D. Litigation
The Airport contracted with Phoenix Construction of Panama City, Florida for the reconstruction of the Airport’s north/south runway. The project was completed in October 2007; however, in 2006, the contractor filed a lawsuit against the City and its project engineer for damages in excess of $5.87 million. The contractor alleged breach of contract due to failing to adjust the contract time and contract price. Also alleged is that the City provided plans and specifications which were not complete, sufficient, and constructible with the time frames set forth in the contract.
In November 2008, the City Council approved a Ground Lease and Development Agreement with Sandspur Development LLC for the development of a hotel and related facilities on Airport property. In January 2009, a lawsuit was filed in the Escambia County Circuit Court by the PNS Hotel Group Ltd., a corporation which owns real property on Airport Blvd. near the Pensacola Gulf Coast Regional Airport. The complaint asserts several counts including claims that the City of Pensacola lacks sufficient authority to lease this property for a hotel development, that appropriate land use Florida Statues were not complied with, and that there is an insufficient public purpose with having a hotel on Airport property. The City Attorney’s Office has reviewed and researched the allegations of this complaint and has determined that the allegations of the complaint are without merit, and the interest in defending this lawsuit is being vigorously asserted. In the opinion of City staff, due to the lawsuit by PNS Hotel Group, the site/property should not be relinquished until there is a resolution of the pending legal action. Hence, staff communicated the City’s intent to stay all obligations under the Agreement until there is a final decision on the lawsuit. Sandspur Development has agreed to this course of action. In late January motions for summary judgment filed by the plaintiff and the City were denied.
The City is contingently liable with respect to other lawsuits and other claims incidental to the ordinary course of its operations. Although the outcome of these lawsuits is not presently determinable, in the opinion of management, based on the advice of counsel, the resolution of these matters will not have a material adverse effect on the financial condition of the City.
E. Grant Contingencies
The City has received numerous state and federal grants. The disbursement of funds received under these programs is subject to review and audit by grantor agencies. Any disbursements disallowed by these agencies could become a liability of the City. In the opinion of management, any such claims should not have a material adverse effect on the financial position of the City.
92 CITY OF PENSACOLA, FLORIDA NOTES TO FINANCIAL STATEMENTS SEPTEMBER 30, 2009
NOTE IV. – OTHER INFORMATION (Continued)
F. Contractual, Construction, and Equipment Commitments
The City has outstanding commitments for contractual services and for the construction and acquisition of property, plant and equipment at year end. The commitments represent the difference between the contract prices of the various projects and the amounts paid on each contract. Outstanding commitments by fund at September 30, 2009 were as follows:
General Fund $ 202,361 Local Option Sales Tax Fund 6,790,232 Utility Fund 852,020 Sanitation Fund 49,755 Port Fund 44,431 Airport Fund 19,853,329 Nonmajor Government 2,334,001 Internal Service Fund 70,278 Total $ 30,196,407
G. Other Significant Commitments
1. The City receives lease payments amounting to $248,000 annually from the federal government for their use of one of the Airport's air traffic control towers. The City in turn pays these lease payments to a private corporation as a repayment on the corporation's investment in the construction of the tower. The lease began on April 14, 1992. In the event the federal government terminates its lease with the City after the tenth year of the term then the amount the City is obligated to pay the corporation is a sum equal to the cost of amortizing its development loan plus interest. The amount due from the City will be reduced by the sum representing that percentage of the annual rental allocated to the corporation’s profit. In the opinion of management, the likelihood of the termination of the government’s lease with the City and this outcome is not probable. The debt service commitment, as well as the lease agreement with Financial American Services Company expires September 30, 2022.
2. On May 1, 1997, the City entered into an agreement with Port Royal Phase II, Inc. (the Developer), a Florida corporation regarding real property known as the Baylen Street Property, Phase II. The Developer has entered into a lease term for a period of 86 years for the purpose of developing a residential project consisting of lots for sixteen single-family residences and eight carriage house units and parking areas. The Developer paid a lump sum of $420,000 for the initial 50 year lease. Annual lease revenue will be recognized over the 50 year period. For years 51 through 86 the Developer will make annual installments not to be less than $4,119.69 adjusted every five years by a factor of the Consumer Price Index. There is a renewal term of 100 years after the initial 86-year term.
93 CITY OF PENSACOLA, FLORIDA NOTES TO FINANCIAL STATEMENTS SEPTEMBER 30, 2009
NOTE IV. – OTHER INFORMATION (Continued)
3. The Port of Pensacola has entered into several long term leases of land and warehouse space. Listed below is a summary of the current lease terms.
TYPE OF ANNUAL TENANT PROPERTY TERM RENT
Halcorp Land 2 1/2 years with rolling 365-day $300,000 Effective 1/1/09 notice of cancellation thereafter
Community Redevelopment Land Years 1 - 10 $16,910 Agency (20 years) Years 11 - 15 $27,395 Effective 8/1/96 Years 16 - 20 $32,875
Martin Marietta Land 1 year with “4” 5 year renewals $63,228 Effective 12/01/01; Rent Effective 12/1/07
CEMEX Ready Mix Warehouse 5 years with “3” 5 year $205,920 Effective 10/25/03; Rent renewals Effective 1/1/08
NWF Cold Storage Warehouse 5 years with “2” 5 year renewals $127,833 Effective 2/24/09
4. Energy Services of Pensacola (ESP) has the option under its contract with its natural gas supplier, BP Corporation North America, to exercise several hedging options for the purchase of natural gas. This hedging strategy allows ESP to purchase a percentage of its natural gas at specified prices for future delivery. ESP, in concurrence with its commodities consultant, decide on pricing strategies due to the volatility in the market price of natural gas. ESP enters into these hedging contracts to protect itself against volatility in the market price of natural gas. However due to the instability of the market, the market price to purchase natural gas may be lower than the price at which ESP is committed to buy. Should the natural gas supplier fail to fulfill the gas hedging contracts, the terms of the contract include provisions for recovering the cost in excess of the guaranteed price from the natural gas supplier should ESP have to procure natural gas on the open market.
5. In August 2009 the City entered into an agreement with the Emerald Coast Utilities Authority (ECUA) as a commitment by the City to contribute to the Main Street Waste Water Treatment Plant Replacement Project (the Project). The City has committed up to $19.5 million for the project and agreed to budget and appropriate water and sewer franchise fees and the beverage license tax revenues. Annual installments of $1.3 million will begin in 2013. Related to this transaction, the City entered in an agreement with the Community Redevelopment Agency (CRA) wherein the annual installments to ECUA will be paid from CRA revenues and any shortfall paid by the City will be reimbursed. For accounting purposes, this is a voluntary non-exchange transaction therefore the obligation is not recorded until the project is completed.
94 CITY OF PENSACOLA, FLORIDA NOTES TO FINANCIAL STATEMENTS SEPTEMBER 30, 2009
NOTE IV. – OTHER INFORMATION (Continued)
H. Prior Period Adjustment
The beginning net assets for business-type activities, recorded in the Port Fund have decreased by $61,137 as a result of prior year overstatement of interest revenue. Interest earned on a customer’s deposit was posted to interest revenue in prior years and should have been posted to a balance sheet account. Terms of the agreement require interest to be earned and posted to the customer’s deposit. At the end of the contractual period the deposit and interest earnings will be returned to the customer.
NOTE V. - SUBSEQUENT EVENTS
In 2008 the City issued a $4.2 million Gas Utility Subordinate Revenue Note through Bank of America to finance energy conservation projects for the United States Navy through a Basic Ordering Agreement (BOA). The Note was structured as an agency funding with work performed through a subcontractor hired by the City of Pensacola. The Navy's monthly payments to the City were calculated to pay the debt in full in ten (10) years. When closing the transaction, the City entered into a Purchase Agreement with Bank of America that upon acceptance of the project by the Navy, the City would sell to Bank of America the Navy's receivable which would cancel the borrowing. On October 7, 2009 the Navy accepted the project and the Note Receivable was sold to Bank of America on October 29, 2009 and the debt was removed from the City’s proprietary type Utility Fund.
On November 8, 2009 Pensacola City Council seated as the Community Redevelopment Agency (CRA) board voted to preserve $10 million in State New Markets Tax Credits (NMTC). Earlier in the year, $70 million of Federal NMTCs were identified as a potential funding source for the Maritime Museum to be located in the Community Maritime Park of which the City is funding the public improvements. Due to deadlines imposed on State NMTCs the City and the CRA capitalize on the leveraged loan idea to preserve approximately $2.5 million net benefit to the Community Maritime Park project. Originally CRA would have provided gross proceeds in an amount not to exceed $6 million to leverage $10 million in State NMTC’s and $10 million in Federal NMTC’s; however, with the December 21, 2009 issuance of the Redevelopment Revenue Bonds the $6 million will come from the bond proceeds. Bond proceeds plus the net proceeds of NMTC’s will produce approximately $8 million in project funding.
On January 28, 2010 at a special meeting of the Council, the City Manager was authorized to work in cooperation with the Community Maritime Park Associates Board (CMPA - an independent Board created to carryout the development of the park) to initiate a transaction to secure a minimum of $35 million of the $70 million Federal NMTCs. On February 8, 2010 the City paid $175,000 to the CTA-CDA Agency (owner of the credits) for legal and professional fees associated with the $35 million distribution. Funding for the transaction is scheduled for late February. Earlier in the year, an agreement to reserve $35 million of the NMTC allocation was entered into by CMPA and CTA-CDE. The NMTCs have been identified as a potential funding source for the Maritime Museum to be located in the Community Maritime Park.
95 CITY OF PENSACOLA, FLORIDA NOTES TO FINANCIAL STATEMENTS SEPTEMBER 30, 2009
NOTE V. - SUBSEQUENT EVENTS (Continued)
On December 21, 2009 the City issued $45.6 million of Redevelopment Revenue Bonds, Series 2009 A and B to fund a $40 million construction fund for the construction of public structures related to the Community Maritime Park. The bonds are a hybrid of $6,715,000 tax exempt serial bonds (Series A) and $38,925,000 taxable Build America Bonds (BABs) (Series B). Tax Increment Financing (TIF) revenues were pledged to the payment of debt service along with Federal Direct Payments relating to the Series B Bonds. In addition the City has a covenant to budget and appropriate from non-ad valorem revenues sufficient funds to pay debt service after application of pledged revenues. The bonds have coupons of 4% - 4.25% for serial bonds and 6.829% - 7.363% for taxable BABs which are term bonds maturing in 2024, 2033 and 2040. The structure of the bonds provide for approximately two years of capitalized interest. The senior underwriter was Wells Fargo Securities. The public improvements include a multiuse stadium, infrastructure and a waterfront park. Development Agreement was entered into by CMPA and Maritime Park Development Partners in April 2009.
On November 24, 2009 a referendum to change the City’s charter received 55% voter approval. The current Council-Manager structure will change to a Mayor-Council form of government effective January 11, 2010. The Mayor and Council will be seated with the November 2010 election. With the new structure, the Mayor will not be a member of Council, will not have voting power and has a 4 year term of office. Members of Council are limited to 3 consecutive 4 year terms. Every 10 years the Charter Review Commission will be established to review the City’s charter. City Council adopted the new charter on November 25, 2009.
On January 15, 2010 the Escambia County Consolidated Study Commission forwarded its proposed consolidation plan to the Northwest Florida Legislative Delegation for consideration. The Town of Century voted a year ago to pull its support. The Escambia County commissioners voted at their early January meeting to send a letter to the Delegation asking them not to support the current draft thereby delaying the referendum to the November 2012 ballot. The Mayor of the City of Pensacola sent notification to the Delegation that at the January 25, 2010 Pensacola City Council Committee of the Whole meeting the motion to approve the Proposed Charter for Consolidated Government failed. In November 2008 the County Commission and the City Council passed a resolution to support the establishment of a Consolidated Study Commission of which they appointed 25 members tasked to study, debate and generate a consolidated plan for referendum.
96
REQUIRED SUPPLEMENTARY INFORMATION
PENSION FUNDS AND OTHER POST EMPLOYEMENT BENIFITS SCHEDULE OF EMPLOYER CONTRIBUTIONS AND ANALYSIS OF FUNDING PROGRESS
CITY OF PENSACOLA, FLORIDA GENERAL PENSION & RETIREMENT FUND REQUIRED SUPPLEMENTARY INFORMATION
SCHEDULE OF EMPLOYER CONTRIBUTIONS (IN THOUSANDS OF DOLLARS) Fiscal Annual Required Percentage Year Contributions Contributed 2000 $ 1,935 100% 2001 2,124 100% 2002 2,210 100% 2003 3,190 100% 2004 4,591 100% 2005 5,515 100% 2006 6,061 100% 2007 5,963 100% 2008 6,264 100% 2009 7,095 100%
ANALYSIS OF FUNDING PROGRESS (IN THOUSANDS OF DOLLARS)
(2) UAAL AS A (1) ACTUARIAL (3) (4) (5) PERCENT OF ACTUARIAL ACCRUED PERCENTAGE UNFUNDED ANNUAL COVERED FISCAL VALUE OF LIABILITY (AAL) FUNDED AAL (UAAL) COVERED PAYROLL YEAR ASSETS FROZEN ENTRY AGE (1)/(2) (2)-(1) PAYROLL (4)/(5) 1999 $ 97,992 $ 131,148 74.7% $ 33,156 $ 15,465 214.4% 2000 104,738 140,905 74.3% 36,167 14,030 257.8% 2001 106,476 141,680 75.2% 35,204 14,480 243.1% 2002 104,817 140,310 74.7% 35,493 15,445 229.8% 2003 105,000 155,855 67.4% 50,855 15,286 332.7% 2004 104,027 160,845 64.7% 56,818 15,708 361.7% 2005 104,435 157,913 66.1% 53,478 16,904 316.4% 2006 106,662 157,417 67.8% 50,755 17,598 288.4% 2007 113,372 163,684 69.3% 50,312 14,807 339.8% 2008 114,133 163,922 69.6% 49,789 13,546 367.6%
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CITY OF PENSACOLA, FLORIDA FIREFIGHTERS' RELIEF AND PENSION FUND REQUIRED SUPPLEMENTARY INFORMATION
SCHEDULE OF EMPLOYER CONTRIBUTIONS (IN THOUSANDS OF DOLLARS) Fiscal Annual Required Percentage Year Contributions * Contributed 2000 $ 1,518 100% 2001 1,390 100% 2002 1,199 100% 2003 1,265 100% 2004 2,130 100% 2005 2,534 100% 2006 3,182 100% 2007 3,605 100% 2008 3,705 100% 2009 3,691 100%
*Annual Required Contributions include Chapter 175 contributions
ANALYSIS OF FUNDING PROGRESS (IN THOUSANDS OF DOLLARS)
(2) UAAL AS A (1) ACTUARIAL (4) (5) PERCENT OF ACTUARIAL ACCRUED (3) UNFUNDED ANNUAL COVERED FISCAL VALUE OF LIABILITY (AAL) PERCENTAGE AAL (UAAL) COVERED PAYROLL YEAR ASSETS FROZEN ENTRY AGE FUNDED (1)/(2) (2)-(1) PAYROLL (4)/(5) 1999 $ 63,803 $ 76,345 83.6% $ 12,542 $ 4,189 299.4% 2000 70,000 82,307 85.0% 12,307 4,321 284.8% 2001 73,385 85,619 85.7% 12,234 4,471 273.6% 2002 71,441 83,545 85.5% 12,104 3,887 311.4% 2003 72,891 85,334 85.4% 12,443 4,103 303.3% 2004 73,263 85,214 86.0% 11,951 4,468 267.5% 2005 74,679 92,165 81.0% 17,486 5,025 348.0% 2006 78,872 97,021 81.3% 18,149 4,840 375.0% 2007 85,956 100,973 85.1% 15,017 5,041 297.9% 2008 88,835 107,803 82.4% 18,968 5,513 344.1%
98
CITY OF PENSACOLA, FLORIDA POLICE OFFICERS' RETIREMENT FUND REQUIRED SUPPLEMENTARY INFORMATION
SCHEDULE OF EMPLOYER CONTRIBUTIONS (IN THOUSANDS OF DOLLARS) Fiscal Annual Required Percentage Year Contributions * Contributed 1998 $ 734 100% 1999 717 100% 2000 692 100% 2001 701 100% 2002 787 100% 2003 1,150 100% 2004 1,992 100% 2005 2,959 100% 2006 2,937 100% 2007 3,190 100%
*Annual Required Contributions include Chapter 185 contributions
ANALYSIS OF FUNDING PROGRESS (IN THOUSANDS OF DOLLARS)
(1) (2) UAAL AS A ACTUARIAL ACTUARIAL (4) (5) PERCENT OF VALUE OF ACCRUED (3) UNFUNDED ANNUAL COVERED FISCAL ASSETS LIABILITY (AAL) PERCENTAGE AAL (UAAL) COVERED PAYROLL YEAR (A) FROZEN ENTRY AGE FUNDED (1)/(2) (2)-(1) PAYROLL (4)/(5) 1999 $ 30,194 $ 36,418 83.4% $ 6,224 $ 5,805 107.2% 2000 34,308 N/A N/A 0 5,838 N/A 2001 37,698 N/A N/A 0 5,643 N/A 2002 39,435 42,153 93.6% 2,718 5,859 46.4% 2003 39,144 41,900 93.4% 2,756 6,318 43.6% 2004 40,485 48,631 83.3% 8,146 6,484 125.6% 2005 43,022 54,823 78.5% 11,801 6,883 171.5% 2006 46,703 58,611 79.7% 11,908 7,934 150.1% 2007 50,257 62,328 80.6% 12,071 7,153 168.8% 2008 55,628 67,807 82.0% 12,179 7,601 160.2%
Notes: All numbers for the pension funds schedules of employer contributions and analysis of funding progress are obtained from the most recent actuarial reports. Actuary changed the method of calculation from the Frozen Entry Age to the Aggregate on the September 30, 2000 valuation. 99
CITY OF PENSACOLA, FLORIDA OTHER POST EMPLOYMENT BENEFITS (OPEB) REQUIRED SUPPLEMENTARY INFORMATION
FY 2008 FY 2009 Retirees and beneficiaries currently receiving benefits 400 469 Terminated employees entitled to benefits but not yet receiving benefits -0- -0- Active members 859 777 Total 1,259 1,246
SCHEDULE OF FUNDING PROGRESS ACTUARIAL ACCRUED UAAL AS OF ACTUARIAL LIABILITY (AAL) PERCENT ACTUARIAL VALUE OF PROJECTED UNIT UNFUNDED FUNDED COVERED COVERED FISCAL VALUATION ASSETS CREDIT AAL (UAAL) RATIO PAYROLL PAYROLL YEAR DATE (A) (B) (B - A) (A/B) (C) ((B - A) / C) 2008 12/31/2006 -0- $25,741,049 $25,741,049 -0- $33,464,956 76.9% 2009 12/31/2007 -0- $36,455,001 $36,455,001 -0- $31,664,284 115.1%
SCHEDULE OF EMPLOYER CONTRIBUTIONS ANNUAL YEAR REQUIRED ACTUAL PERCENTAGE ENDED CONTRIBUTION CONTRIBUTIONS CONTRIBUTED 9/30/2008 $1,727,999 -0- -0- 9/30/2009 $1,813,278 -0- -0-
FISCAL YEAR 2008 FISCAL YEAR 2009 Valuation Date 12/31/2006 12/31/2007 Actuarial cost method Projected unit credit Projected unit credit Amortization method Level percent of pay, open Level percent of pay, open Remaining amortization period 30 years 30 years Asset valuation method Market value of assets Market value of assets Actuarial assumptions: Investment rate of return* 4.50% 4.50% Medical cost trend rate* 12.00% 10.00% Ultimate trend rate 5.00% 5.00% Year of ultimate trend rate 2014 2016
*Includes inflation at 3.00%
100
COMBINING FINANCIAL STATEMENTS
NONMAJOR GOVERNMENTAL FUNDS
INTERNAL SERVICE FUNDS
FIDUCIARY FUNDS
NONMAJOR GOVERNMENTAL FUNDS
Special Revenue Funds
Special Grants Fund – to account for various private, state and federal grant receipts and the expenditures thereof.
Local Option Gasoline Tax Fund - to account for the receipt and expenditures of gasoline tax revenue.
Community Development Block Grant Fund - to account for the community development block grant and the housing rehabilitation program federal grant receipts and the expenditures thereof.
Community Redevelopment Agency - to account for the tax increment development receipts and the expenditures thereof.
Urban Core Redevelopment Trust - to account for the tax increment development receipts and the expenditures thereof.
West Florida Public Library Fund – to account for the receipt and expenditures of the West Florida Public Library.
Stormwater Utility Fund – to account for the receipt and expenditures for the operating and maintenance activities related to stormwater.
Youth Center Fund - to account for monies provided by the City and by various youth groups. The monies are expended primarily on various recreation centers and youth athletics.
Athletic Fund - to account for monies provided by the City and participation fees from various athletic clubs. Resources are expended primarily for athletic functions and equipment.
Law Enforcement Trust Fund - to account for proceeds from the sale of confiscated property. Expenditure of such funds is restricted to law enforcement purposes.
Hurricane Damage Fund - to account for federal and state monies received and expended for disaster relief as a result of hurricanes.
Golf Course Fund - to account for the revenues and expenditures of the Osceola Golf Course and Pro Shop.
Eastside Tax Increment Financing District - to account for the tax increment revenues associated with programs and projects identified in eastside community redevelopment area.
Inspections Fund – to account for the receipts and expenditures of collections as regulated under Florida Statue 553 referred to as the ‘Florida Building Code’.
Debt Service Funds
Tax and Franchise Fee Debt Service Fund – to account for the principal and interest payments for the sales and excise tax revenue bonds.
CRA Debt Service Fund – to provide monies for payment of the 2004 Redevelopment Refunding Revenue Bonds which were issued to defease the 1994 Series. Financing is provided from increases in assessed valuation within the redevelopment area.
Capital Projects Funds
Stormwater Capital Fund – to account for the capital expenditures of stormwater improvements. Financing is provided by a transfer from the General Fund of matching receipts collected by the stormwater utility fee.
Maritime Community Park Construction Fund – to account for the capital expenditures of the Vince Whibbs Senior Community Maritime Park.
CITY OF PENSACOLA, FLORIDA COMBINING BALANCE SHEET NONMAJOR GOVERNMENTAL FUNDS SEPTEMBER 30, 2009
Special Revenue Funds
Local Community Community Urban Core Special Option Development Redevelopment Redevelopment Grants Gasoline Tax Block Grant Agency Trust
ASSETS
Cash and cash equivalents $ $ 667,532 $ $ $ Investments 988,386 Prepaids and deposits 4,058 Accounts receivable 666,359 Inventories Due from other funds 2,303,070 1,882,206 Due from other governments 146,576 Restricted assets Cash and cash equivalents 11,775 61,159 Other cash 14,074 Investments 17,434 90,556 Due from other governments 525,382 150,328 Notes receivable 709,995 1,249,085
Total assets $ 1,264,586 $ 1,802,494 $ 1,413,487 $ 2,973,487 $ 2,033,921
LIABILITIES AND FUND BALANCES
Liabilities Accounts payable $ 512 $ 1,882 $ 6,735 $ 10,678 $ Contracts payable 102,339 283,047 28,730 Contracts payable - retainage 5,200 105,991 112,176 Due to other funds 1,027 157,667 1,900,747 Deferred revenue 1,002,344 1,249,085 665,429 Deposits 1,000 Total liabilities 1,111,422 390,920 1,413,487 2,718,760 0
Fund balances Reserved Inventories Encumbrances 153,164 605,263 254,727 Debt service Unreserved Designated for carryover appropriations Designated for capital projects 806,311 2,033,921 Designated for debt service Unreserved - undesignated Total fund balances 153,164 1,411,574 0 254,727 2,033,921
Total liabilities and fund balances $ 1,264,586 $ 1,802,494 $ 1,413,487 $ 2,973,487 $ 2,033,921
(continued)
101 CITY OF PENSACOLA, FLORIDA COMBINING BALANCE SHEET NONMAJOR GOVERNMENTAL FUNDS SEPTEMBER 30, 2009
Special Revenue Funds
West Florida Stormwater Law Public Utility Youth Athletic Enforcement Library Fund Fund Fund Trust
ASSETS
Cash and cash equivalents $ 119,195 $ 110,463 $ 203,494 $ 51,263 $ 85,454 Investments 176,488 163,558 301,305 75,903 126,528 Prepaids and deposits 2,528 379 234 330 Accounts receivable 1,075 546 Inventories Due from other funds 17,622 Due from other governments 25,647 Restricted assets Cash and cash equivalents Other cash Investments Due from other governments Notes receivable
Total assets $ 298,211 $ 300,047 $ 506,108 $ 145,664 $ 211,982
LIABILITIES AND FUND BALANCES
Liabilities Accounts payable $ 13,683 $ 25,379 $ 13,006 $ 11,890 $ Contracts payable 8,626 2,000 Contracts payable - retainage Due to other funds 84,342 37,737 9,456 2,164 Deferred revenue 1,075 546 Deposits 1,860 Total liabilities 106,651 63,116 25,397 16,600 0
Fund balances Reserved Inventories Encumbrances 140,744 Debt service Unreserved Designated for carryover appropriations 50,816 176,400 250,000 Designated for capital projects Designated for debt service Unreserved - undesignated 60,531 230,711 129,064 211,982 Total fund balances 191,560 236,931 480,711 129,064 211,982
Total liabilities and fund balances $ 298,211 $ 300,047 $ 506,108 $ 145,664 $ 211,982
(continued)
102 CITY OF PENSACOLA, FLORIDA COMBINING BALANCE SHEET NONMAJOR GOVERNMENTAL FUNDS SEPTEMBER 30, 2009
Special Revenue Funds
Hurricane Golf Eastside Damage Course Tax Increment Inspections Fund Fund Financing District Fund
ASSETS
Cash and cash equivalents $ $ 29,988 $ 99,268 $ 64,089 Investments 44,401 146,981 94,893 Prepaids and deposits 2,599 Accounts receivable 937,832 1,613 Inventories 8,239 Due from other funds Due from other governments 228,976 Restricted assets Cash and cash equivalents Other cash Investments Due from other governments Notes receivable
Total assets $ 1,166,808 $ 86,840 $ 246,249 $ 158,982
LIABILITIES AND FUND BALANCES
Liabilities Accounts payable $ 375 $ 10,294 $ 337 $ 8,826 Contracts payable 11,891 2,092 Contracts payable - retainage 96,423 Due to other funds 111,278 9,118 540 18,724 Deferred revenue 1,613 Deposits 868 93,912 Total liabilities 219,967 23,985 877 121,462
Fund balances Reserved Inventories 8,239 Encumbrances 69,188 8,216 Debt service Unreserved Designated for carryover appropriations Designated for capital projects 245,372 Designated for debt service Unreserved - undesignated 877,653 46,400 37,520 Total fund balances 946,841 62,855 245,372 37,520
Total liabilities and fund balances $ 1,166,808 $ 86,840 $ 246,249 $ 158,982
(continued)
103 CITY OF PENSACOLA, FLORIDA COMBINING BALANCE SHEET NONMAJOR GOVERNMENTAL FUNDS SEPTEMBER 30, 2009
Debt Service Capital Projects Funds Funds Total Tax & Maritime Nonmajor Franchise Fee CRA Stormwater Community Park Governmental Debt Service Debt Service Capital Construction Funds
ASSETS
Cash and cash equivalents $ $ $ 1,792,548 $ $ 3,223,294 Investments 2,654,147 4,772,590 Prepaids and deposits 10,128 Accounts receivable 97,707 1,705,132 Inventories 8,239 Due from other funds 4,202,898 Due from other governments 401,199 Restricted assets Cash and cash equivalents 1,200,917 86,552 1,360,403 Other cash 14,074 Investments 1,778,145 128,155 2,014,290 Due from other governments 675,710 Notes receivable 1,959,080
Total assets $ 2,979,062 $ 214,707 $ 4,446,695 $ 97,707 $ 20,347,037
LIABILITIES AND FUND BALANCES
Liabilities Accounts payable $ $ $ $ 185,000 $ 288,597 Contracts payable 70,923 509,648 Contracts payable - retainage 47,231 367,021 Due to other funds 1,189 2,303,070 4,637,059 Deferred revenue 2,920,092 Deposits 97,640 Total liabilities 0 0 119,343 2,488,070 8,820,057
Fund balances Reserved Inventories 8,239 Encumbrances 677,251 1,908,553 Debt service 2,760,813 214,707 2,975,520 Unreserved Designated for carryover appropriations 477,216 Designated for capital projects 3,085,604 Designated for debt service 218,249 218,249 Unreserved - undesignated 3,650,101 (2,390,363) 2,853,599 Total fund balances 2,979,062 214,707 4,327,352 (2,390,363) 11,526,980
Total liabilities and fund balances $ 2,979,062 $ 214,707 $ 4,446,695 $ 97,707 $ 20,347,037
104 CITY OF PENSACOLA, FLORIDA COMBINING STATEMENT OF REVENUES, EXPENDITURES, AND CHANGES IN FUND BALANCE NONMAJOR GOVERNMENTAL FUNDS FOR THE YEAR ENDED SEPTEMBER 30, 2009
Special Revenue Funds
Local Community Community Urban Core Special Option Development Redevelopment Redevelopment Grants Gasoline Tax Block Grant Agency Trust Revenues: Taxes $ $ 1,605,605 $ $ $ Licenses and permits Intergovernmental 1,346,102 1,319,471 2,901,251 Charges for services 32,919 Fines and forfeits Interest income 259 42,335 16,616 8,294 86,994 Donations 51,139 3,200 Other 6 868 Total revenues 1,397,500 1,647,940 1,336,093 45,281 2,988,245
Expenditures: Current - General government 1,333,112 2,014,674 Public safety 92,312 Transportation 35,333 Culture and recreation 18,021 Economic environment 372,294 Physical environment Capital outlay 905,493 1,475,274 2,981 1,792,259 Debt service - Principal retirement Interest Total expenditures 1,388,120 1,510,607 1,336,093 3,806,933 0
Excess (deficiency) of revenues over (under) expenditures 9,380 137,333 0 (3,761,652) 2,988,245
Other financing sources (uses): Transfers in 2,571,146 1,751,769 Transfers (out) (3,000,895) Sale of capital assets 663,867 Insurance recoveries Total other financing sources (uses) 0 0 0 3,235,013 (1,249,126)
Net change in fund balances 9,380 137,333 0 (526,639) 1,739,119
Fund balances at beginning of year 143,784 1,274,241 0 781,366 294,802 Fund balances at end of year $ 153,164 $ 1,411,574 $ 0 $ 254,727 $ 2,033,921
(continued)
105
CITY OF PENSACOLA, FLORIDA COMBINING STATEMENT OF REVENUES, EXPENDITURES, AND CHANGES IN FUND BALANCE NONMAJOR GOVERNMENTAL FUNDS FOR THE YEAR ENDED SEPTEMBER 30, 2009
Special Revenue Funds
West Florida Stormwater Law Public Utility Youth Athletic Enforcement Library Fund Fund Fund Trust Revenues: Taxes $ $ $ $ $ Licenses and permits Intergovernmental 3,612,117 Charges for services 1,876,314 383,913 210,553 Fines and forfeits 93,430 31,016 126,672 Interest income 6,862 24,329 11,129 2,576 6,043 Donations 9,142 Other Total revenues 3,721,551 1,931,659 395,042 213,129 132,715
Expenditures: Current - General government Public safety 168,364 Transportation Culture and recreation 4,643,238 492,781 233,901 Economic environment Physical environment 2,350,929 Capital outlay 540,919 29,592 Debt service - Principal retirement Interest Total expenditures 5,184,157 2,350,929 492,781 233,901 197,956
Excess (deficiency) of revenues over (under) expenditures (1,462,606) (419,270) (97,739) (20,772) (65,241)
Other financing sources (uses): Transfers in 1,346,300 55,000 Transfers (out) Sale of capital assets 2,475 Insurance recoveries Total other financing sources (uses) 1,346,300 0 0 55,000 2,475
Net change in fund balances (116,306) (419,270) (97,739) 34,228 (62,766)
Fund balances at beginning of year 307,866 656,201 578,450 94,836 274,748 Fund balances at end of year $ 191,560 $ 236,931 $ 480,711 $ 129,064 $ 211,982
(continued)
106 CITY OF PENSACOLA, FLORIDA COMBINING STATEMENT OF REVENUES, EXPENDITURES, AND CHANGES IN FUND BALANCE NONMAJOR GOVERNMENTAL FUNDS FOR THE YEAR ENDED SEPTEMBER 30, 2009
Special Revenue Funds
Hurricane Golf Eastside Damage Course Tax Increment Inspections Fund Fund Financing District Fund Revenues: Taxes $$$ $ Licenses and permits 802,858 Intergovernmental 3,012,731 69,758 Charges for services 619,256 Fines and forfeits Interest income 38,003 1,152 6,439 2,238 Donations Other Total revenues 3,050,734 620,408 76,197 805,096
Expenditures: Current - General government 5,475 33,043 Public safety 24,271 960,038 Transportation 83 Culture and recreation 151,184 706,258 Economic environment Physical environment 39,950 Capital outlay 4,514,876 6,859 Debt service - Principal retirement Interest Total expenditures 4,735,839 706,258 39,902 960,038
Excess (deficiency) of revenues over (under) expenditures (1,685,105) (85,850) 36,295 (154,942)
Other financing sources (uses): Transfers in 140,000 45,397 150,000 Transfers (out) Sale of capital assets Insurance recoveries 999,781 Total other financing sources (uses) 999,781 140,000 45,397 150,000
Net Change in fund balances (685,324) 54,150 81,692 (4,942)
Fund balances at beginning of year 1,632,165 8,705 163,680 42,462 Fund balances at end of year $ 946,841 $ 62,855 $ 245,372 $ 37,520
(continued)
107
CITY OF PENSACOLA, FLORIDA COMBINING STATEMENT OF REVENUES, EXPENDITURES, AND CHANGES IN FUND BALANCE NONMAJOR GOVERNMENTAL FUNDS FOR THE YEAR ENDED SEPTEMBER 30, 2009
Debt Service Capital Projects Funds Funds Total Tax & Maritime Nonmajor Franchise Fee CRA Stormwater Community Park Governmental Debt Service Debt Service Capital Construction Funds Revenues: Taxes $ $ $ $ $ 1,605,605 Licenses and permits 802,858 Intergovernmental 12,261,430 Charges for services 3,122,955 Fines and forfeits 251,118 Interest income 124,830 378,099 Donations 63,481 Other 874 Total revenues 0 0 124,830 0 18,486,420
Expenditures: Current - General government 335 3,386,639 Public safety 1,244,985 Transportation 35,416 Culture and recreation 57,089 6,302,472 Economic environment 372,294 Physical environment 307,154 2,698,033 Capital outlay 943,598 645,667 10,857,518 Debt service - Principal retirement 2,492,300 357,909 2,850,209 Interest 486,762 71,505 558,267 Total expenditures 2,979,062 429,749 1,250,752 702,756 28,305,833
Excess (deficiency) of revenues over (under) expenditures (2,979,062) (429,749) (1,125,922) (702,756) (9,819,413)
Other financing sources (uses): Transfers in 2,979,062 429,749 1,907,331 11,375,754 Transfers (out) (3,000,895) Sale of capital assets 666,342 Insurance recoveries 999,781 Total other financing sources (uses) 2,979,062 429,749 1,907,331 0 10,040,982
Net Change in fund balances 0 0 781,409 (702,756) 221,569
Fund balances at beginning of year 2,979,062 214,707 3,545,943 (1,687,607) 11,305,411 Fund balances at end of year $ 2,979,062 $ 214,707 $ 4,327,352 $ (2,390,363) $ 11,526,980
108 CITY OF PENSACOLA, FLORIDA STATEMENT OF REVENUES, EXPENDITURES, AND CHANGES IN FUND BALANCE – BUDGET AND ACTUAL LOCAL OPTION SALES FUND FOR THE YEAR ENDED SEPTEMBER 30, 2009
Variance with Final Budget - Budget Actual Positive/(Negative)
Revenues: Taxes $ 5,990,000 $ 5,976,299 $ (13,701) Interest income 1,000,000 532,867 (467,133) Donations 3,096,100 2,625,571 (470,529)
Total revenues 10,086,100 9,134,737 (951,363)
Expenditures: Current - General government 18,383 16,556 1,827 Public Safety 119,119 119,117 2 Culture and recreation 133,341 133,341 Capital outlay 26,835,318 14,136,709 12,698,609 Debt service - Interest 300,175 300,175 0 Total expenditures 27,406,336 14,572,557 12,833,779
Excess (deficiency) of revenues over (under) expenditures (17,320,236) (5,437,820) 11,882,416
Net change in fund balances (17,320,236) (5,437,820) 11,882,416
Fund balances at beginning of year 17,320,236 18,333,981 1,013,745 Fund balances at end of year $ 0 $ 12,896,161 $ 12,896,161
109 CITY OF PENSACOLA, FLORIDA COMBINING SCHEDULES OF REVENUES, EXPENDITURES, AND CHANGES IN FUND BALANCE–BUDGET AND ACTUAL (GAAP BASIS) NONMAJOR GOVERNMENTAL FUNDS FOR THE YEAR ENDED SEPTEMBER 30, 2009
Special Grants Variance Positive/ Budget Actual (Negative)
Revenues: Taxes $ $ $ Licenses and permits Intergovernmental 2,471,539 1,346,102 (1,125,437) Charges for services Fines and forfeits Interest income 259 259 Donations 298,564 51,139 (247,425) Other Total revenues 2,770,103 1,397,500 (1,372,603)
Expenditures: Current - General government Public safety 350,685 92,312 258,373 Transportation Culture and recreation 34,025 18,021 16,004 Economic environment 464,245 372,294 91,951 Physical environment Capital outlay 2,059,742 905,493 1,154,249 Debt service - Principal retirement Interest Total expenditures 2,908,697 1,388,120 1,520,577 Excess (deficiency) of revenues over (under) expenditures (138,594) 9,380 147,974
Other financing sources (uses): Transfers in Transfers (out) Sale of capital assets Insurance recoveries Total other financing sources (uses) 0 0 0
Net change in fund balances (138,594) 9,380 147,974
Fund balances at beginning of year 138,594 143,784 5,190
Fund balances at end of year $ 0 $ 153,164 $ 153,164 (continued) 110 CITY OF PENSACOLA, FLORIDA COMBINING SCHEDULES OF REVENUES, EXPENDITURES, AND CHANGES IN FUND BALANCE–BUDGET AND ACTUAL (GAAP BASIS) NONMAJOR GOVERNMENTAL FUNDS FOR THE YEAR ENDED SEPTEMBER 30, 2009
Local Option Gasoline Tax Community Development Block Grant Variance Variance Positive/ Positive/ Budget Actual (Negative) Budget Actual (Negative)
Revenues: Taxes $ 1,580,000 $ 1,605,605 $ 25,605 $ $ $ Licenses and permits Intergovernmental 1,533,676 1,319,471 (214,205) Charges for services Fines and forfeits Interest income 28,400 42,335 13,935 16,616 16,616 Donations Other 66 Total revenues 1,608,400 1,647,940 39,540 1,533,676 1,336,093 (197,583)
Expenditures: Current - General government 1,367,097 1,333,112 33,985 Public safety Transportation 35,345 35,333 12 Culture and recreation Economic environment Physical environment Capital outlay 2,847,296 1,475,274 1,372,022 258,282 2,981 255,301 Debt service - Principal retirement Interest Total expenditures 2,882,641 1,510,607 1,372,034 1,625,379 1,336,093 289,286 Excess (deficiency) of revenues over (under) expenditures (1,274,241) 137,333 1,411,574 (91,703) 0 91,703
Other financing sources (uses): Transfers in Transfers (out) Sale of capital assets Insurance recoveries Total other financing sources (uses) 0 0 0 0 0 0
Net change in fund balances (1,274,241) 137,333 1,411,574 (91,703) 0 91,703
Fund balances at beginning of year 1,274,241 1,274,241 0 91,703 0 (91,703)
Fund balances at end of year $ 0 $ 1,411,574 $ 1,411,574 $ 0 $ 0 $ 0 (continued)
111 CITY OF PENSACOLA, FLORIDA COMBINING SCHEDULES OF REVENUES, EXPENDITURES, AND CHANGES IN FUND BALANCE–BUDGET AND ACTUAL (GAAP BASIS) NONMAJOR GOVERNMENTAL FUNDS FOR THE YEAR ENDED SEPTEMBER 30, 2009
Community Redevelopment Agency Variance Positive/ Budget Actual (Negative)
Revenues: Taxes $ $ $ Licenses and permits Intergovernmental Charges for services 32,000 32,919 919 Fines and forfeits Interest income 10,000 8,294 (1,706) Donations 3,200 3,200 Other 868 868 Total revenues 42,000 45,281 3,281
Expenditures: Current - General government 2,797,979 2,295,804 502,175 Public safety Transportation Culture and recreation Economic environment Physical environment Capital outlay 3,277,510 1,511,129 1,766,381 Debt service - Principal retirement Interest Total expenditures 6,075,489 3,806,933 2,268,556 Excess (deficiency) of revenues over (under) expenditures (6,033,489) (3,761,652) 2,271,837
Other financing sources (uses): Transfers in 4,588,223 2,571,146 (2,017,077) Transfers (out) Sale of capital assets 663,900 663,867 (33) Insurance recoveries Total other financing sources (uses) 5,252,123 3,235,013 (2,017,110)
Net change in fund balances (781,366) (526,639) 254,727
Fund balances at beginning of year 781,366 781,366 0
Fund balances at end of year $ 0 $ 254,727 $ 254,727 (continued) 112 CITY OF PENSACOLA, FLORIDA COMBINING SCHEDULES OF REVENUES, EXPENDITURES, AND CHANGES IN FUND BALANCE–BUDGET AND ACTUAL (GAAP BASIS) NONMAJOR GOVERNMENTAL FUNDS FOR THE YEAR ENDED SEPTEMBER 30, 2009
Urban Core Redevelopment Trust West Florida Public Library Variance Variance Positive/ Positive/ Budget Actual (Negative) Budget Actual (Negative)
Revenues: Taxes $ $ $ $ $ $ Licenses and permits Intergovernmental 2,901,251 2,901,251 0 3,612,100 3,612,117 17 Charges for services Fines and forfeits 82,000 93,430 11,430 Interest income 70,000 86,994 16,994 5,000 6,862 1,862 Donations 4,000 9,142 5,142 Other Total revenues 2,971,251 2,988,245 16,994 3,703,100 3,721,551 18,451
Expenditures: Current - General government Public safety Transportation Culture and recreation 4,675,604 4,643,238 32,366 Economic environment Physical environment Capital outlay 681,667 540,919 140,748 Debt service - Principal retirement Interest Total expenditures 0 0 0 5,357,271 5,184,157 173,114 Excess (deficiency) of revenues over (under) expenditures 2,971,251 2,988,245 16,994 (1,654,171) (1,462,606) 191,565
Other financing sources (uses): Transfers in 1,751,769 1,751,769 0 1,346,300 1,346,300 0 Transfers (out) (5,017,823) (3,000,895) 2,016,928 Sale of capital assets Insurance recoveries Total other financing sources (uses) (3,266,054) (1,249,126) 2,016,928 1,346,300 1,346,300 0
Net change in fund balances (294,803) 1,739,119 2,033,922 (307,871) (116,306) 191,565
Fund balances at beginning of year 294,803 294,802 (1) 307,871 307,866 (5)
Fund balances at end of year $ 0 $ 2,033,921 $ 2,033,921 $ 0 $ 191,560 $ 191,560 (continued) 113 CITY OF PENSACOLA, FLORIDA COMBINING SCHEDULES OF REVENUES, EXPENDITURES, AND CHANGES IN FUND BALANCE–BUDGET AND ACTUAL (GAAP BASIS) NONMAJOR GOVERNMENTAL FUNDS FOR THE YEAR ENDED SEPTEMBER 30, 2009
Stormwater Utility Fund Variance Positive/ Budget Actual (Negative)
Revenues: Taxes $ $ $ Licenses and permits Intergovernmental Charges for services 1,876,300 1,876,314 14 Fines and forfeits 5,500 31,016 25,516 Interest income 25,000 24,329 (671) Donations Other Total revenues 1,906,800 1,931,659 24,859
Expenditures: Current - General government Public safety Transportation Culture and recreation Economic environment Physical environment 2,424,500 2,350,929 73,571 Capital outlay Debt service - Principal retirement Interest Total expenditures 2,424,500 2,350,929 73,571 Excess (deficiency) of revenues over (under) expenditures (517,700) (419,270) 98,430
Other financing sources (uses): Transfers in Transfers (out) Sale of capital assets Insurance recoveries Total other financing sources (uses) 0 0 0
Net change in fund balances (517,700) (419,270) 98,430
Fund balances at beginning of year 517,700 656,201 138,501
Fund balances at end of year $ 0 $ 236,931 $ 236,931 (continued)
114 CITY OF PENSACOLA, FLORIDA COMBINING SCHEDULES OF REVENUES, EXPENDITURES, AND CHANGES IN FUND BALANCE–BUDGET AND ACTUAL (GAAP BASIS) NONMAJOR GOVERNMENTAL FUNDS FOR THE YEAR ENDED SEPTEMBER 30, 2009
Youth Fund Athletic Fund Variance Variance Positive/ Positive/ Budget Actual (Negative) Budget Actual (Negative)
Revenues: Taxes $ $ $ $ $ $ Licenses and permits Intergovernmental Charges for services 457,900 383,913 (73,987) 247,100 210,553 (36,547) Fines and forfeits Interest income 20,000 11,129 (8,871) 2,300 2,576 276 Donations Other Total revenues 477,900 395,042 (82,858) 249,400 213,129 (36,271)
Expenditures: Current - General government Public safety Transportation Culture and recreation 762,900 492,781 270,119 304,400 233,901 70,499 Economic environment Physical environment Capital outlay Debt service - Principal retirement Interest Total expenditures 762,900 492,781 270,119 304,400 233,901 70,499 Excess (deficiency) of revenues over (under) expenditures (285,000) (97,739) 187,261 (55,000) (20,772) 34,228
Other financing sources (uses): Transfers in 55,000 55,000 0 Transfers (out) Sale of capital assets Insurance recoveries Total other financing sources (uses) 0 0 0 55,000 55,000 0
Net change in fund balances (285,000) (97,739) 187,261 0 34,228 34,228
Fund balances at beginning of year 285,000 578,450 293,450 0 94,836 94,836
Fund balances at end of year $ 0 $ 480,711 $ 480,711 $ 0 $ 129,064 $ 129,064 (continued)
115 CITY OF PENSACOLA, FLORIDA COMBINING SCHEDULES OF REVENUES, EXPENDITURES, AND CHANGES IN FUND BALANCE–BUDGET AND ACTUAL (GAAP BASIS) NONMAJOR GOVERNMENTAL FUNDS FOR THE YEAR ENDED SEPTEMBER 30, 2009
Law Enforcement Trust Variance Positive/ Budget Actual (Negative)
Revenues: Taxes $ $ $ Licenses and permits Intergovernmental Charges for services Fines and forfeits 126,672 126,672 Interest income 6,043 6,043 Donations Other Total revenues 0 132,715 132,715
Expenditures: Current - General government Public safety 245,103 168,364 76,739 Transportation Culture and recreation Economic environment Physical environment Capital outlay 29,645 29,592 53 Debt service - Principal retirement Interest Total expenditures 274,748 197,956 76,792 Excess (deficiency) of revenues over (under) expenditures (274,748) (65,241) 209,507
Other financing sources (uses): Transfers in Transfers (out) Sale of capital assets 2,475 2,475 Insurance recoveries Total other financing sources (uses) 0 2,475 2,475
Net change in fund balances (274,748) (62,766) 211,982
Fund balances at beginning of year 274,748 274,748 0
Fund balances at end of year $ 0 $ 211,982 $ 211,982 (continued)
116 CITY OF PENSACOLA, FLORIDA COMBINING SCHEDULES OF REVENUES, EXPENDITURES, AND CHANGES IN FUND BALANCE–BUDGET AND ACTUAL (GAAP BASIS) NONMAJOR GOVERNMENTAL FUNDS FOR THE YEAR ENDED SEPTEMBER 30, 2009
Hurricane Damage Fund Golf Course Fund Variance Variance Positive/ Positive/ Budget Actual (Negative) Budget Actual (Negative)
Revenues: Taxes $ $ $ $ $ $ Licenses and permits Intergovernmental 3,049,700 3,012,731 (36,969) Charges for services 612,800 619,256 6,456 Fines and forfeits Interest income 33,400 38,003 4,603 1,152 1,152 Donations Other Total revenues 3,083,100 3,050,734 (32,366) 612,800 620,408 7,608
Expenditures: Current - General government 22,264 5,475 16,789 Public safety 30,546 24,271 6,275 Transportation 4,595 83 4,512 Culture and recreation 339,129 151,184 187,945 752,800 706,258 46,542 Economic environment 0 Physical environment 426,964 39,950 387,014 Capital outlay 4,395,323 4,514,876 (119,553) Debt service - Principal retirement Interest Total expenditures 5,218,821 4,735,839 482,982 752,800 706,258 46,542 Excess (deficiency) of revenues over (under) expenditures (2,135,721) (1,685,105) 450,616 (140,000) (85,850) 54,150
Other financing sources (uses): Transfers in 140,000 140,000 0 Transfers (out) Sale of capital assets 0 Insurance recoveries 62,000 999,781 937,781 Total other financing sources (uses) 62,000 999,781 937,781 140,000 140,000 0
Net change in fund balances (2,073,721) (685,324) 1,388,397 0 54,150 54,150
Fund balances at beginning of year 2,073,721 1,632,165 (441,556) 0 8,705 8,705
Fund balances at end of year $ 0 $ 946,841 $ 946,841 $ 0 $ 62,855 $ 62,855 (continued)
117 CITY OF PENSACOLA, FLORIDA COMBINING SCHEDULES OF REVENUES, EXPENDITURES, AND CHANGES IN FUND BALANCE–BUDGET AND ACTUAL (GAAP BASIS) NONMAJOR GOVERNMENTAL FUNDS FOR THE YEAR ENDED SEPTEMBER 30, 2009
Eastside Tax Increment Financing District Fund Variance Positive/ Budget Actual (Negative)
Revenues: Taxes $ $ $ Licenses and permits Intergovernmental 69,758 69,758 0 Charges for services Fines and forfeits Interest income 6,439 6,439 Donations Other Total revenues 69,758 76,197 6,439
Expenditures: Current - General government 216,099 33,043 183,056 Public safety Transportation Culture and recreation Economic environment Physical environment Capital outlay 62,736 6,859 55,877 Debt service - Principal retirement Interest Total expenditures 278,835 39,902 238,933 Excess (deficiency) of revenues over (under) expenditures (209,077) 36,295 245,372
Other financing sources (uses): Transfers in 45,397 45,397 0 Transfers (out) Sale of capital assets Insurance recoveries Total other financing sources (uses) 45,397 45,397 0
Net change in fund balances (163,680) 81,692 245,372
Fund balances at beginning of year 163,680 163,680 0
Fund balances at end of year $ 0 $ 245,372 $ 245,372 (continued)
118 CITY OF PENSACOLA, FLORIDA COMBINING SCHEDULES OF REVENUES, EXPENDITURES, AND CHANGES IN FUND BALANCE–BUDGET AND ACTUAL (GAAP BASIS) NONMAJOR GOVERNMENTAL FUNDS FOR THE YEAR ENDED SEPTEMBER 30, 2009
Inspections Fund Tax & Franchise Fee Debt Service Variance Variance Positive/ Positive/ Budget Actual (Negative) Budget Actual (Negative)
Revenues: Taxes $ $ $ $ $ $ Licenses and permits 845,000 802,858 (42,142) Intergovernmental Charges for services Fines and forfeits Interest income 2,238 2,238 Donations Other Total revenues 845,000 805,096 (39,904) 0 0 0
Expenditures: Current - General government Public safety 995,000 960,038 34,962 Transportation Culture and recreation Economic environment Physical environment Capital outlay Debt service - Principal retirement 2,492,300 2,492,300 0 Interest 486,800 486,762 38 Total expenditures 995,000 960,038 34,962 2,979,100 2,979,062 38 Excess (deficiency) of revenues over (under) expenditures (150,000) (154,942) (4,942) (2,979,100) (2,979,062) 38
Other financing sources (uses): Transfers in 150,000 150,000 0 2,979,100 2,979,062 (38) Transfers (out) Sale of capital assets Insurance recoveries Total other financing sources (uses) 150,000 150,000 0 2,979,100 2,979,062 (38)
Net change in fund balances 0 (4,942) (4,942) 0 0 0
Fund balances at beginning of year 0 42,462 42,462 0 2,979,062 2,979,062
Fund balances at end of year $ 0 $ 37,520 $ 37,520 $ 0 $ 2,979,062 $ 2,979,062 (continued) 119 CITY OF PENSACOLA, FLORIDA COMBINING SCHEDULES OF REVENUES, EXPENDITURES, AND CHANGES IN FUND BALANCE–BUDGET AND ACTUAL (GAAP BASIS) NONMAJOR GOVERNMENTAL FUNDS FOR THE YEAR ENDED SEPTEMBER 30, 2009
CRA Debt Service Fund Variance Positive/ Budget Actual (Negative)
Revenues: Taxes $ $ $ Licenses and permits Intergovernmental Charges for services Fines and forfeits Interest income Donations Other Total revenues 0 0 0
Expenditures: Current - General government 335 (335) Public safety Transportation Culture and recreation Economic environment Physical environment Capital outlay Debt service - Principal retirement 358,000 357,909 91 Interest 71,600 71,505 95 Total expenditures 429,600 429,749 (149) Excess (deficiency) of revenues over (under) expenditures (429,600) (429,749) (149)
Other financing sources (uses): Transfers in 429,600 429,749 149 Transfers (out) Sale of capital assets Insurance recoveries Total other financing sources (uses) 429,600 429,749 149
Net change in fund balances 00 0
Fund balances at beginning of year 0 214,707 214,707
Fund balances at end of year $ 0 $ 214,707 $ 214,707 (continued)
120 CITY OF PENSACOLA, FLORIDA COMBINING SCHEDULES OF REVENUES, EXPENDITURES, AND CHANGES IN FUND BALANCE–BUDGET AND ACTUAL (GAAP BASIS) NONMAJOR GOVERNMENTAL FUNDS FOR THE YEAR ENDED SEPTEMBER 30, 2009
Stormwater Capital Fund Maritime Community Park Construction Fund Variance Variance Positive/ Positive/ Budget Actual (Negative) Budget Actual (Negative)
Revenues: Taxes $ $ $ $ $ $ Licenses and permits Intergovernmental Charges for services Fines and forfeits Interest income 75,000 124,830 49,830 Donations Other Total revenues 75,000 124,830 49,830 0 0 0
Expenditures: Current - General government Public safety Transportation Culture and recreation 57,089 (57,089) Economic environment Physical environment 540,557 307,154 233,403 Capital outlay 4,966,686 943,598 4,023,088 651,698 645,667 6,031 Debt service - Principal retirement Interest Total expenditures 5,507,243 1,250,752 4,256,491 651,698 702,756 (51,058) Excess (deficiency) of revenues over (under) expenditures (5,432,243) (1,125,922) 4,306,321 (651,698) (702,756) (51,058)
Other financing sources (uses): Transfers in 1,886,300 1,907,331 21,031 Transfers (out) Sale of capital assets Insurance recoveries Total other financing sources (uses) 1,886,300 1,907,331 21,031 0 0 0
Net change in fund balances (3,545,943) 781,409 4,327,352 (651,698) (702,756) (51,058)
Fund balances at beginning of year 3,545,943 3,545,943 0 651,698 (1,687,607) (2,339,305)
Fund balances at end of year $ 0 $ 4,327,352 $ 4,327,352 $ 0 $ (2,390,363) $ (2,390,363) (continued)
121 CITY OF PENSACOLA, FLORIDA COMBINING SCHEDULES OF REVENUES, EXPENDITURES, AND CHANGES IN FUND BALANCE–BUDGET AND ACTUAL (GAAP BASIS) NONMAJOR GOVERNMENTAL FUNDS FOR THE YEAR ENDED SEPTEMBER 30, 2009
Total Nonmajor Governmental Funds Variance Positive/ Budget Actual (Negative)
Revenues: Taxes $ 1,580,000 $ 1,605,605 $ 25,605 Licenses and permits 845,000 802,858 (42,142) Intergovernmental 13,638,024 12,261,430 (1,376,594) Charges for services 3,226,100 3,122,955 (103,145) Fines and forfeits 87,500 251,118 163,618 Interest income 269,100 378,099 108,999 Donations 302,564 63,481 (239,083) Other 0 874 874 Total revenues 19,948,288 18,486,420 (1,461,868)
Expenditures: Current - General government 4,403,439 3,667,769 735,670 Public safety 1,621,334 1,244,985 376,349 Transportation 39,940 35,416 4,524 Culture and recreation 6,868,858 6,302,472 566,386 Economic environment 464,245 372,294 91,951 Physical environment 3,392,021 2,698,033 693,988 Capital outlay 19,230,585 10,576,388 8,654,197 Debt service - Principal retirement 2,850,300 2,850,209 91 Interest 558,400 558,267 133 Total expenditures 39,429,122 28,305,833 11,123,289 Excess (deficiency) of revenues over (under) expenditures (19,480,834) (9,819,413) 9,661,421
Other financing sources (uses): Transfers in 13,371,689 11,375,754 (1,995,935) Transfers (out) (5,017,823) (3,000,895) 2,016,928 Sale of capital assets 663,900 666,342 2,442 Insurance recoveries 62,000 999,781 937,781 Total other financing sources (uses) 9,079,766 10,040,982 961,216
Net change in fund balances (10,401,068) 221,569 10,622,637
Fund balances at beginning of year 10,401,068 11,305,411 904,343
Fund balances at end of year $ 0 $ 11,526,980 $ 11,526,980
122
INTERNAL SERVICE FUNDS
General Stock Account - to account for the cost of operating a central warehouse facility used by other City departments. Material purchases are recovered from the users.
Insurance Retention Fund - to account for the City's self-insurance program.
Central Services Fund - to account for the operation of the City Print Shop, Mail Room, Management Information Services, Engineering, and City Garage Facilities.
CITY OF PENSACOLA, FLORIDA COMBINING STATEMENT OF NET ASSETS INTERNAL SERVICE FUNDS SEPTEMBER 30, 2009
Insurance Central General Retention Services ASSETS Stock Account Fund Fund Total
Current assets Cash and cash equivalents $ 36,164 $ 930,106 $ 615,603 $ 1,581,873 Investments 53,547 1,528,233 911,496 2,493,276 Accounts receivable (net) 1,291,325 1,291,325 Due from other funds 543,090 543,090 Due from other governments 43,546 43,546 Inventory 573,659 573,659 Prepaid expenses 18,251 27,940 46,191 Total current assets 663,370 4,311,005 1,598,585 6,572,960
Noncurrent assets Prepaid expense 202,950 202,950 Advances to other funds 1,740,287 1,740,287 Restricted assets Cash and cash equivalents 1,092,690 1,092,690 Investments 1,617,898 1,617,898 Capital assets Depreciable (net) 2,145,490 2,145,490 Total noncurrent assets 0 4,653,825 2,145,490 6,799,315
Total assets $ 663,370 $ 8,964,830 $ 3,744,075 $ 13,372,275
LIABILITIES
Current liabilities Accounts payable $ $ 29,976 $ 10,025 $ 40,001 Contracts payable 19,551 19,551 Due to other funds 1,230,628 116,156 1,346,784 Deposits 24,132 24,132 Total current liabilities 0 1,284,736 145,732 1,430,468
Noncurrent liabilities Compensated absences payable 30,105 467,162 497,267 Advances from other funds 19,266 19,266 Claims and judgments payable 2,362,833 2,362,833 Net OPEB obligation 21,273 190,683 211,956 Total noncurrent liabilities 0 2,414,211 677,111 3,091,322
Total liabilities 0 3,698,947 822,843 4,521,790
Net assets Investment in capital assets, net of related debt 2,145,490 2,145,490 Unrestricted 663,370 5,265,883 775,742 6,704,995
Total net assets 663,370 5,265,883 2,921,232 8,850,485
Total liabilities and net assets $ 663,370 $ 8,964,830 $ 3,744,075 $ 13,372,275
123 CITY OF PENSACOLA, FLORIDA COMBINING STATEMENT OF REVENUES, EXPENSES, AND CHANGES IN FUND NET ASSETS INTERNAL SERVICE FUNDS FOR THE YEAR ENDED SEPTEMBER 30, 2009
General Insurance Central Stock Retention Services Account Fund Fund Total Operating revenues: Charges for services $ $ $ 4,129,829 $ 4,129,829 Health 8,181,406 8,181,406 Dental 350,109 350,109 Life 225,719 225,719 Survivor disability 504,345 504,345 Liability 3,942,483 3,942,483 Other 126,918 2,820 129,738 Total operating revenues 0 13,330,980 4,132,649 17,463,629
Operating expenses: Salaries and employee benefits 453,063 3,568,198 4,021,261 Materials and supplies 3,926 57,221 61,147 Repairs and maintenance 876 52,960 53,836 Contractual services 63,399 191,730 255,129 Office and utilities 36,803 234,466 271,269 Premiums and claims expense - General liability 2,650,591 2,650,591 Workmen's compensation 1,252,032 1,252,032 Auto 73,958 73,958 Health 8,167,689 8,167,689 Dental 349,740 349,740 Life 224,470 224,470 Survivor disability 353,033 353,033 Total operating expenses before depreciation 0 13,629,580 4,104,575 17,734,155 Operating income (loss) before depreciation 0 (298,600) 28,074 (270,526)
Depreciation 359,735 359,735
Operating income (loss) 0 (298,600) (331,661) (630,261)
Nonoperating revenues (expenses): Investment interest 153,672 40,120 193,792 Gain (loss) on disposal of capital assets (65,349) (65,349) Total nonoperating revenues 0 153,672 (25,229) 128,443
Income (loss) before contributions and transfers: 0 (144,928) (356,890) (501,818)
Contributions and transfers: Contributed capital from other funds 922,171 922,171 Total contributions and transfers 0 0 922,171 922,171
Change in net assets 0 (144,928) 565,281 420,353
Net assets at beginning of year 663,370 5,410,811 2,355,951 8,430,132
Net assets at end of year $ 663,370 $ 5,265,883 $ 2,921,232 $ 8,850,485
124 CITY OF PENSACOLA, FLORIDA COMBINING STATEMENT OF CASH FLOWS INTERNAL SERVICE FUNDS FOR THE YEAR ENDED SEPTEMBER 30, 2009
General Insurance Central Stock Retention Services Account Fund Fund Total
Cash flows from operating activities: Cash received from customers $ $ 10,028,412 $ 4,132,649 $ 14,161,061 Cash received from other funds 52,040 3,366,787 3,418,827 Cash payments to suppliers for goods and services (12,300,911) (502,195) (12,803,106) Cash payments to employees for services (262,178) (3,532,400) (3,794,578) Net cash provided by (used for) operating activities 52,040 832,110 98,054 982,204
Cash flows from noncapital financing activities: Advance from other funds 18,684 18,684 Advance to other funds (878,602) (878,602) Net cash provided by (used for) noncapital financing activities 0 (878,602) 18,684 (859,918)
Cash flows from capital and related financing activities: Acquisition of capital assets (175,385) (175,385) Proceeds from sale of assets 2,996 2,996 Net cash provided by (used for) capital and related financing activities 0 0 (172,389) (172,389)
Cash flows from investing activities: (Purchase)/sale of investments (21,408) 1,198,727 404,629 1,581,948 Interest on investments 153,672 40,120 193,792 Net cash provided by (used for) investing activities (21,408) 1,352,399 444,749 1,775,740
Net increase (decrease) in cash and cash equivalents 30,632 1,305,907 389,098 1,725,637
Cash and cash equivalents at beginning of year 5,532 716,889 226,505 948,926
Cash and cash equivalents of end of year $ 36,164 $ 2,022,796 $ 615,603 $ 2,674,563
125 CITY OF PENSACOLA, FLORIDA COMBINING STATEMENT OF CASH FLOWS RECONCILIATION OF OPERATING INCOME TO NET CASH INTERNAL SERVICE FUNDS FOR THE YEAR ENDED SEPTEMBER 30, 2009
General Insurance Central Stock Retention Services Account Fund Fund Total
Operating income (loss) $ $ (298,600) $ (331,661) $ (630,261)
Adjustments to reconcile operating income to net cash provided by (used for) operating activities: Depreciation 359,735 359,735
Change in assets and liabilities: (Increase) decrease in accounts receivable (256,716) (256,716) (Increase) decrease in inventory 52,040 52,040 (Increase) decrease in due from other funds 300,440 300,440 (Increase) decrease in due from other governments (43,546) (43,546) (Increase) decrease in prepaid expenses 46,665 35,029 81,694 Increase (decrease) in accounts payable (32,167) (847) (33,014) Increase (decrease) in contracts payable (18,728) (18,728) Increase (decrease) in due to other funds 189,786 409 190,195 Increase (decrease) in deposits 20,495 20,495 Increase (decrease) in claims and judgments 879,836 879,836 Increase (decrease) in compensated absences (10,843) (18,609) (29,452) Increase (decrease) in net OPEB obligation 11,942 97,544 109,486 Net cash provided by (used for) operating activities $ 52,040 $ 832,110 $ 98,054 $ 982,204
Noncash investing, capital, and financing activities:
General Insurance Central Stock Retention Services Account Fund Fund Total
Contribution of fixed assets from other funds $ - $ - $ 922,171 $ 922,171 Transfer of capital assets to other funds - - 4,286 4,286
126 FIDUCIARY FUNDS
PENSION TRUST FUNDS
General Pension and Retirement Fund – to account for the accumulation of resources to be used for pension and retirement payments for substantially all City employees except for those in the Fire and Police Pension Funds. Resources are contributed by employees and the City at actuarially determined rates. The General Pension was closed to new employees hired on or after June 18, 2007 with the implementation of the Florida Retirement System.
Firemen’s Relief and Pension Fund – to account for the accumulation of resources to be used for pension and retirement payments for all firefighters. Resources are contributed by employees and the City at actuarially determined rates.
Police Officer’s Retirement Fund – to account for the accumulation of resources to be used for pension and retirement payments for all police officers. Resources are contributed by employees and the City at actuarially determined rates.
CITY OF PENSACOLA, FLORIDA COMBINING STATEMENT OF FIDUCIARY NET ASSETS FIDUCIARY FUNDS SEPTEMBER 30, 2009
General Firemen's Police Pension and Relief and Officers' Retirement Pension Retirement Total Pension ASSETS Fund Fund Fund Trust Funds Other cash $ 190,477 $ 201,734 $ 170,866 $ 563,077
Receivables Employer 55,698 15,802 82,598 154,098 Employee 20,464 83,322 1,156 104,942 Commission Recapture 1,885 3,200 150 5,235 Total receivables 78,047 102,324 83,904 264,275 Investments Short term investments 1,632,229 991,488 904,109 3,527,826 Debt Securities & Bond Mutual Funds 41,739,147 23,079,325 12,524,784 77,343,256 Stock Mutual Funds 18,797,024 1,911,066 20,708,090 Mortgage Backed Securities 436,276 3,304,407 7,233,693 10,974,376 Commingled Index Fund 9,255,837 9,255,837 Commingled Trust Fund 10,097,099 10,097,099 Domestic Stocks 40,225,047 45,188,314 20,608,536 106,021,897 Total investments 102,829,723 82,660,633 52,438,025 237,928,381
Total assets $ 103,098,247 $ 82,964,691 $ 52,692,795 $ 238,755,733
LIABILITIES AND FUND BALANCES
Liabilities: Accounts payable $ 286,331 $ 136,733 $ 171,267 $ 594,331 Total liabilities 286,331 136,733 171,267 594,331 Net assets Held in trust for pension benefits $ 102,811,916 $ 82,827,958 $ 52,521,528 $ 238,161,402
127 CITY OF PENSACOLA, FLORIDA COMBINING STATEMENT OF CHANGES IN FIDUCIARY NET ASSETS FIDUCIARY FUNDS FOR THE YEAR ENDED SEPTEMBER 30, 2009
General Firemen's Police Pension and Relief and Officers' Retirement Pension Retirement Total Pension Fund Fund Fund Trust Funds Additions Contributions - city $ 7,447,653 $ 3,168,964 $ 2,770,960 $ 13,387,577 Contributions - employee 709,440 555,411 36,961 1,301,812 Commission recapture 10,164 13,385 943 24,492 Insurance proceeds - State of Florida 530,169 527,249 1,057,418 Total contributions 8,167,257 4,267,929 3,336,113 15,771,299
Investment income Net appreciation (depreciation) in fair value of investments 1,441,993 3,168,502 (1,045,385) 3,565,110 Interest and dividends 3,308,808 2,429,014 1,480,575 7,218,397 4,750,801 5,597,516 435,190 10,783,507 Less investment expense 275,061 326,376 196,574 798,011 Net investment income 4,475,740 5,271,140 238,616 9,985,496
Total additions 12,642,997 9,539,069 3,574,729 25,756,795
Deductions Pensions paid - employees 8,407,747 4,629,416 2,130,358 15,167,521 Pensions paid - widows 1,306,586 583,651 362,693 2,252,930 Pensions paid - children 4,718 11,436 16,154 Refunds to employees 27,203 6,467 9,952 43,622 Deferred retirement option plan 289,245 154,937 200,681 644,863 Health insurance assistance 188,300 188,300 Administrative expenses 96,794 160,036 47,032 303,862
Total deductions 10,320,593 5,545,943 2,750,716 18,617,252
Change in net assets 2,322,404 3,993,126 824,013 7,139,543
Net assets held in trust for pension benefits Beginning of year 100,489,512 78,834,832 51,697,515 231,021,859
End of year $ 102,811,916 $ 82,827,958 $ 52,521,528 $ 238,161,402
128 STATISTICAL SECTION
This part of the City of Pensacola’s comprehensive annual financial report presents detailed information as a context for understanding what the information in the financial statements, note disclosures, and required supplementary information says about the city’s overall financial health.
Financial Trends - These schedules contain trend information to help the reader understand how the city’s financial performance and well-being have changed over time.
Revenue Capacity - These schedules contain information to help the reader assess the factors affecting the city’s ability to generate its property, sales taxes, and utility revenue.
Debt Capacity - These schedules present information to help the reader assess the affordability of the city’s current levels of outstanding debt and the city’s ability to issue additional debt in the future. Note the city has no general obligation debt.
Demographic and Economic Information - These schedules offer demographic and economic indicators to help the reader understand the environment within which the city’s financial activities take place and to help make a comparison over time and with other governments.
Operating Information - These schedules contain information about the city’s operations and resources to help the reader understand how the city’s financial information relates to the services the city provides and the activities it performs.
Sources: Unless otherwise noted, the information in these schedules is derived from the comprehensive annual financial reports for the relevant year. The City implemented GASB Statement 34 in 2003; schedules presenting government wide information include information beginning in that year.
FINANCIAL TRENDS
CITY OF PENSACOLA, FLORIDA CHANGES IN NET ASSETS LAST SEVEN FISCAL YEARS (accrual basis of accounting)
Fiscal Year 2003 2004 2005 2006 2007 2008 2009 Expenses Governmental activities: General Government $ 10,436,763 $ 11,066,332 $ 12,288,844 $ 12,088,920 $ 13,760,551 $ 13,028,271 $ 10,607,815 Public safety 23,114,792 28,084,201 28,951,510 31,110,329 31,499,372 31,837,050 31,494,450 Transportation 4,133,112 4,831,361 5,022,158 6,840,783 4,302,907 4,515,948 2,837,201 Culture and recreation 10,798,822 11,780,250 16,562,124 14,850,420 14,102,175 13,463,182 14,140,256 Economic environment 10,798,460 10,443,891 8,479,343 8,670,298 9,655,932 13,772,416 14,502,662 Physical environment 2,290,689 2,910,187 34,160,089 3,470,795 2,417,760 3,037,313 3,151,470 Human services 111,850 129,903 120,756 91,500 109,670 115,000 94,200 Unallocated depreciation 1,649,004 1,636,690 731,323 875,748 1,144,137 1,700,181 2,162,409 Interest on long-term debt 5,887,415 1,829,965 1,519,935 1,082,666 1,656,581 1,272,372 769,278 Total governmental activities expenses 69,220,907 72,712,780 107,836,082 79,081,459 78,649,085 82,741,733 79,759,741
Business-type activities: Utility 32,690,179 34,908,268 36,027,746 43,300,811 38,972,519 46,166,828 39,206,068 Sanitation 5,328,118 5,600,079 5,106,334 5,634,608 6,001,189 6,463,890 6,873,786 Port 3,114,053 2,648,571 2,524,108 3,520,798 2,952,129 2,828,158 2,667,098 Airport 12,647,237 13,691,938 15,532,401 16,194,337 14,681,765 18,964,646 22,709,226 Golf Course (a) 703,503 734,779 799,182 837,265 Total business-type activities expenses 54,483,090 57,583,635 59,989,771 69,487,819 62,607,602 74,423,522 71,456,178
Total primary government expenses $ 123,703,997 $ 130,296,415 $ 167,825,853 $ 148,569,278 $ 141,256,687 $ 157,165,255 $ 151,215,919
Program Revenues Governmental activities: Charges for Services: General Government $ 1,387,764 $ 1,407,088 $ 1,322,200 $ 1,262,794 $ 417,496 $ 294,520 $ 335,438 Public safety 2,042,048 2,184,730 2,458,155 2,338,428 2,032,238 2,069,778 1,728,932 Transportation 496,011 826,251 937,402 970,940 935,986 729,613 697,453 Culture and recreation 701,996 699,780 697,034 760,346 1,311,187 1,320,242 1,391,241 Physical environment 1,939,553 1,888,305 1,820,320 2,306,040 1,813,446 1,913,284 1,899,385 Operating grants and contributions (c) 16,153,346 17,464,270 13,536,300 5,815,503 22,328,404 17,310,191 19,475,151 Capital grants and contributions 1,215,224 995,622 42,595,215 22,341,613 10,624,444 6,834,357 8,169,629 Total governmental activities program revenues 23,935,942 25,466,046 63,366,626 35,795,664 39,463,201 30,471,985 33,697,229
Business-type activities: Charges for Services Utility 40,710,596 47,698,947 47,408,710 52,914,809 52,684,149 57,557,864 47,673,400 Sanitation 5,366,322 5,399,778 5,349,156 5,463,914 6,128,324 6,699,149 6,366,664 Port 1,495,583 1,382,933 2,120,485 2,736,093 1,601,256 1,801,002 1,242,839 Airport 10,776,719 11,224,092 12,625,713 14,655,698 16,503,822 17,696,841 14,972,720 Golf (a) 570,717 583,941 576,809 639,575 Operating grants and contributions 180,468 Capital grants and contributions 7,243,829 4,550,188 7,066,929 12,877,590 26,271,082 6,196,139 15,055,919 Total business-type activities program revenues 66,344,234 70,839,879 75,147,802 89,287,679 103,188,633 89,950,995 85,311,542 Total primary government program revenues $ 90,280,176 $ 96,305,925 $ 138,514,428 $ 125,083,343 $ 142,651,834 $ 120,422,980 $ 119,008,771 (continued) 129 CITY OF PENSACOLA, FLORIDA CHANGES IN NET ASSETS LAST SEVEN FISCAL YEARS (accrual basis of accounting)
Fiscal Year 2003 2004 2005 2006 2007 2008 2009 Net (Expense)/Revenue Governmental activities $ (45,284,965) $ (47,246,734) $ (44,469,456) $ (43,285,795) $ (39,185,884) $ (52,269,748) $ (46,062,512) Business-type activities 11,861,144 13,256,244 15,158,031 19,799,860 40,581,031 15,527,473 13,855,364
Total primary government net expenses $ (33,423,821) $ (33,990,490) $ (29,311,425) $ (23,485,935) $ 1,395,147 $ (36,742,275) $ (32,207,148)
General Revenues and Other Changes in Net Assets Governmental activities: Taxes: Property taxes (c) $ 10,729,011 $ 11,535,735 $ 12,624,627 $ 12,612,006 $ 15,328,153 $ 14,963,002 $ 13,990,633 Public service taxes and franchise fees 10,810,180 11,060,170 11,358,867 12,703,460 13,209,195 13,268,556 13,999,030 Communication services tax 4,531,421 4,860,343 5,676,211 5,620,991 3,859,998 4,025,970 3,738,973 Local business tax (b) 907,014 940,673 895,570 Local option gasoline tax 2,106,436 2,214,743 2,339,408 2,242,110 1,748,740 1,612,704 1,605,605 Local option sales tax (c) 6,075,856 6,160,594 7,621,290 7,545,633 6,960,630 6,550,530 5,976,299 Intergovernmental revenues (c) 7,390,690 7,876,665 8,975,434 9,127,199 6,492,065 6,190,954 5,807,740 Unrestricted investment earnings (c) 562,349 488,652 1,226,597 2,460,641 2,674,332 2,177,667 1,349,471 Insurance recoveries 537,694 3,241,306 1,033,232 Donation of capital assets 684,476 Miscellaneous 272,837 237,571 234,984 91,090 123,968 27,872 34,364 Net gain (loss) on sale of asset 221,278 300,199 Gain (loss) on impairment of asset - Hurricane Ivan (3,974,027) Transfers 5,589,800 6,576,326 6,947,524 1,240,132 8,852,993 11,344,453 8,000,000 Overhead transfers 2,928,300 2,982,400 3,161,400 3,821,000 3,414,200 3,683,400 2,429,800 Total governmental activities 51,218,158 50,019,172 60,704,036 61,005,767 64,255,764 65,819,013 57,827,485
Business-type activities: Unrestricted investment earnings 278,322 219,965 773,466 1,162,375 1,036,596 999,959 1,235,552 Insurance recoveries 651,416 Donation of capital assets 180,000 Miscellaneous 319,096 567,130 270,871 269,834 309,576 Net gain (loss) on sale of asset 9,246 28,305 Gain (loss) on impairment of asset - Hurricane Ivan 198,469 Transfers (5,589,800) (6,576,326) (6,947,524) (1,240,132) (8,852,993) (11,344,453) (8,000,000) Overhead transfers (2,928,300) (2,982,400) (3,161,400) (3,821,000) (3,414,200) (3,683,400) (2,429,800) Total business-type activities (8,230,532) (9,111,987) (8,836,362) (3,331,627) (10,959,726) (13,106,644) (8,884,672)
Total primary government $ 42,987,626 $ 40,907,185 $ 51,867,674 $ 57,674,140 $ 53,296,038 $ 52,712,369 $ 48,942,813
Change in Net Assets Governmental activities $ 5,933,193 $ 2,772,438 $ 16,234,580 $ 17,719,972 $ 25,069,880 $ 13,549,265 $ 11,764,973 Business-type activities 3,630,612 4,144,257 6,321,669 16,468,233 29,621,305 2,420,829 4,970,692
Total primary government $ 9,563,805 $ 6,916,695 $ 22,556,249 $ 34,188,205 $ 54,691,185 $ 15,970,094 $ 16,735,665
Note: The city began to report accrual information when it implemented GASB Statement 34 in fiscal year 2003 (a) In FY 07, the Golf Course was moved from an enterprise fund to a special revenue fund. (b) In FY07, the Uniform Accounting System Manual changed how local governments recorded the local business tax. Prior to FY07, the tax was classified as a licenses and in FY07 the tax is classified as a tax, moving it from general government charges for services to general government taxes. (c) 2007 and prior have been restated, where noted, to reflect only those revenues which should be reported in each category. 130 CITY OF PENSACOLA, FLORIDA NET ASSETS BY COMPONENT LAST SEVEN FISCAL YEARS (accrual basis of accounting)
Fiscal Year 2003 2004 2005 2006 2007 2008 2009 Governmental activities Invested in capital assets, net of related debt $ 48,361,182 $ 43,946,470 $ 57,923,281 $ 72,919,805 $ 96,906,089 $ 117,973,303 $ 139,118,040 Restricted 27,212,298 30,762,070 42,813,703 41,792,153 46,006,637 37,093,415 30,099,551 Unrestricted 14,942,445 18,579,823 13,381,959 15,374,631 13,924,384 15,535,349 13,149,449 Total governmental activities net assets $ 90,515,925 $ 93,288,363 $ 114,118,943 $ 130,086,589 $ 156,837,110 $ 170,602,067 $ 182,367,040
Business-type activities Invested in capital assets, net of related debt $ 64,722,277 $ 65,911,984 $ 75,547,523 $ 91,681,359 $ 119,978,282 $ 90,891,929 $ 125,156,505 Restricted 3,423,211 4,146,309 5,028,402 5,028,402 5,699,402 5,700,402 9,638,870 Unrestricted 19,475,472 21,706,924 17,510,961 17,692,713 18,082,391 50,074,594 16,781,105 Total business-type activities net assets $ 87,620,960 $ 91,765,217 $ 98,086,886 $ 114,402,474 $ 143,760,075 $ 146,666,925 $ 151,576,480
Primary government Invested in capital assets, net of related debt $ 113,083,459 $ 109,858,454 $ 133,470,804 $ 164,601,164 $ 216,884,371 $ 208,865,232 $ 264,274,545 Restricted 30,635,509 34,908,379 47,842,105 46,820,555 51,706,039 42,793,817 39,738,421 Unrestricted 34,417,917 40,286,747 30,892,920 33,067,344 32,006,775 65,609,943 29,930,554 Total primary government net assets $ 178,136,885 $ 185,053,580 $ 212,205,829 $ 244,489,063 $ 300,597,185 $ 317,268,992 $ 333,943,520
Note: The city began to report accrual information when it implemented GASB Statement 34 in fiscal year 2003
131 CITY OF PENSACOLA, FLORIDA PROGRAM REVENUES BY FUNCTION/PROGRAM LAST SEVEN FISCAL YEARS (accrual basis of accounting)
Fiscal Year 2003 2004 2005 2006 2007 2008 2009 Function/Programs Governmental activities: General government $ 1,399,764 $ 1,490,846 $ 4,072,170 $ 5,314,738 $ 5,590,979 $ 3,891,303 $ 3,734,253 Public safety 2,155,160 3,235,786 3,774,577 2,789,747 2,715,923 2,497,330 1,903,690 Transportation 504,220 919,581 4,300,221 5,794,746 3,640,571 821,374 746,254 Culture and recreation 4,320,524 4,455,440 10,143,442 (a) 6,813,505 7,503,800 9,093,754 11,596,641 Economic environment 12,923,260 12,326,942 9,318,343 10,791,610 16,862,124 11,510,064 12,839,011 Physical environment 2,551,471 2,920,774 31,441,843 (a) 4,346,219 3,219,462 2,658,160 2,877,380 Human services 40,903 144,744 Total governmental activities 23,854,399 25,390,272 63,195,340 35,850,565 39,532,859 30,471,985 33,697,229
Business-type activities: Utility 40,710,596 47,698,947 47,408,710 52,914,809 52,684,149 57,557,864 47,673,400 Sanitation 5,366,322 5,399,778 5,349,156 5,463,914 6,218,324 6,699,149 6,366,664 Port 4,126,945 1,574,247 3,229,199 3,323,749 2,224,705 1,904,284 2,222,280 Airport 15,568,654 15,582,966 18,583,928 26,945,632 (b) 42,151,455 (b) 23,789,698 29,049,198 Golf Course 571,717 583,941 576,809 639,575 Total business-type activities 66,344,234 70,839,879 75,147,802 89,287,679 103,278,633 89,950,995 85,311,542
Total primary government $ 90,198,633 $ 96,230,151 $ 138,343,142 $ 125,138,244 $ 142,811,492 $ 120,422,980 $ 119,008,771
Note: The city began to report accrual information when it implemented GASB Statement 34 in fiscal year 2003
(a) The increase to program revenues in the culture and recreation and physical environment activities is due to capital grants and contributions for Hurricanes Ivan, Dennis, and Katrina. (b) The increase to program revenues in the airport activity is primarily due to capital grants and contributions for Hurricane Ivan.
132 CITY OF PENSACOLA, FLORIDA FUND BALANCE, GOVERNMENTAL FUNDS LAST SEVEN FISCAL YEARS (modified accrual basis of accounting)
Fiscal Year 2003 2004 2005 2006 2007 2008 2009 General Fund Reserved $ 495,195 $ 436,972 $ 701,440 $ 689,489 $ 921,523 $ 926,095 $ 1,332,323 Unreserved 7,020,518 7,999,916 8,909,628 10,135,396 8,983,669 9,803,661 9,906,638 Total General Fund $ 7,515,713 $ 8,436,888 $ 9,611,068 $ 10,824,885 $ 9,905,192 $ 10,729,756 $ 11,238,961
All Other Governmental Funds Reserved $ 8,193,123 $ 7,754,479 $ 12,479,371 $ 11,926,118 $ 8,623,413 $ 15,596,086 $ 13,634,480 Unreserved, reported in: Special revenue funds 6,519,583 7,728,562 8,151,788 8,623,967 18,562,204 11,553,673 9,091,855 Capital projects funds 15,804,549 15,538,378 21,854,883 21,950,966 19,167,052 10,935,750 7,359,785 Debt service funds 1,603,658 2,196,842 2,090,023 1,032,662 271,348 215,413 218,249 Total all other governmental funds $ 32,120,913 $ 33,218,261 $ 44,576,065 $ 43,533,713 $ 46,624,017 $ 38,300,922 $ 30,304,369
Note: The City began to report accrual information when it implemented GASB Statement 34 in fiscal year 2003
133 CITY OF PENSACOLA, FLORIDA CHANGES IN FUND BALANCE, GOVERNMENTAL FUNDS LAST TEN FISCAL YEARS (modified accrual basis of accounting)
Fiscal Year Revenues 2000 2001 2002 2003 2004 2005 2006 2007 2008 2009 Taxes $ 25,946,456 $ 27,068,983 $ 30,535,841 $ 30,205,225 $ 31,810,661 $ 35,735,447 $ 36,070,618 $ 34,699,382 $ 33,850,592 $ 32,095,945 Licenses and permits 1,458,512 1,357,093 1,380,730 1,476,315 1,503,479 1,831,273 1,721,355 875,705 1,235,120 864,844 Franchise fees 5,392,012 5,953,515 5,211,787 5,600,062 5,860,175 6,088,923 6,884,189 7,307,290 7,510,843 8,110,165 Intergovernmental 18,061,487 19,205,273 20,856,236 22,244,379 23,777,867 62,231,407 (a) 34,028,187 36,468,652 24,529,512 28,722,364 Charges for services 1,734,735 1,741,664 3,425,336 3,757,661 4,270,447 4,382,032 4,800,789 5,216,030 4,327,860 4,339,480 Fines and forfeits 402,035 468,812 541,088 549,669 569,923 554,047 469,118 354,393 385,063 441,251 Assessments 80,288 52,846 65,788 107,692 87,690 105,918 168,087 216,744 112,760 89,577 Interest income 1,921,497 2,083,984 882,001 659,423 578,335 1,437,059 2,935,879 3,394,311 2,711,137 1,470,144 Charges for overhead 3,156,300 3,269,800 3,308,600 3,293,700 3,447,600 3,652,600 4,545,600 4,046,200 (c) Rents and leases 234,324 235,274 191,766 151,279 159,617 181,161 (b) Donations 205,578 5,249 5,708 4,000 53,928 77,491 86,739 75,830 2,828,116 2,689,665 Other 1,086,258 682,547 825,566 894,567 1,027,807 7,067,287 765,734 2,151,466 652,214 733,049
Total revenues 59,679,482 62,125,040 67,230,447 68,943,972 73,147,529 123,344,645 92,476,295 94,806,003 78,143,217 79,556,484
Expenditures Current - General government 9,171,459 9,514,080 10,176,526 10,331,772 11,037,313 11,619,232 11,747,226 13,140,542 8,099,930 7,026,818 Public safety 18,954,041 20,616,865 21,746,259 21,945,655 26,801,960 27,215,803 29,369,501 30,073,622 30,108,528 29,285,357 Transportation 4,356,066 3,646,994 3,378,311 3,927,511 4,617,127 4,770,599 6,551,328 4,078,150 2,471,682 2,510,175 Culture and recreation 8,792,437 9,104,547 9,826,964 9,940,167 10,542,926 15,181,664 13,441,009 12,649,876 11,451,051 11,828,720 Economic environment 7,334,253 9,211,103 10,054,319 11,162,317 10,901,512 8,448,711 8,647,869 9,636,721 13,668,432 14,398,618 Physical environment 647,243 1,539,440 2,205,531 2,263,397 2,924,615 34,090,416 (a) 3,408,113 2,329,484 2,921,658 2,916,615 Human services 207,898 223,374 180,093 111,850 129,903 120,756 91,500 109,670 115,000 94,200 Capital outlay 17,641,484 11,653,122 9,598,519 7,209,555 6,976,163 11,286,300 23,583,756 22,483,692 23,176,356 24,998,552 Debt service - Principal retirement 3,467,530 3,648,912 4,629,721 2,640,478 2,645,397 7,426,150 3,797,282 4,655,760 3,372,006 2,850,209 Interest 2,394,449 2,596,128 3,631,104 3,504,752 3,507,298 3,377,456 2,526,411 1,728,048 1,292,286 858,442
Total expenditures 72,966,860 71,754,565 75,427,347 73,037,454 80,084,214 123,537,087 103,163,995 100,885,565 96,676,929 96,767,706 Excess (deficiency) of revenues over (under) expenditures (13,287,378) (9,629,525) (8,196,900) (4,093,482) (6,936,685) (192,442) (10,687,700) (6,079,562) (18,533,712) (17,211,222)
Other financing sources (uses) Transfers in 23,608,854 24,226,989 27,350,060 26,435,355 32,981,066 33,620,450 39,958,942 46,846,554 22,190,629 (d) 19,375,754 Transfers (out) (18,058,854) (18,201,289) (21,748,310) (20,845,555) (24,731,992) (25,498,685) (32,687,643) (39,927,214) (13,439,238) (d) (11,375,754) Sale of capital assets 55,497 120,060 349,175 298,380 37,058 6,661 255,330 99,547 1,072,364 724,093 Insurance recoveries 3,241,306 1,033,232 999,781 Proceeds from debt 9,516,840 8,097,930 2,385,889 Bonds Issued 15,966,820 Issuance Cost (262,309) (37,498) Payment to Escrow Agent (15,035,435)
Total other financing sources (uses) 15,122,337 14,243,690 8,336,814 5,888,180 8,955,208 8,128,426 10,767,935 7,018,887 10,819,489 9,723,874 Net change in fund balances before prior period adjustments 1,834,959 4,614,165 139,914 1,794,698 2,018,523 7,935,984 80,235 939,325 (7,714,223) (7,487,348)
Prior period adjustments - - - - - 4,596,000 91,230 1,231,286 215,692 -
Net change in fund balances $ 1,834,959 $ 4,614,165 $ 139,914 $ 1,794,698 $ 2,018,523 $ 12,531,984 $ 171,465 $ 2,170,611 $ (7,498,531) $ (7,487,348)
Debt service as a percentage of noncapital expenditures 10.60% 10.39% 12.55% 9.34% 8.35% 9.58% 7.89% 8.10% 6.31% 5.13%
Notes: (a) The increase in intergovernmental revenues and economic environment expenditures are a result of Hurricanes Ivan, Dennis, and Katrina. (b) Starting in FY 2006, rents and leases are reflected in charges for services. (c) Starting in FY 2008, charges for overhead are reflected as a reduction to expenditures (cost recovery). (d) The decrease in transfers in (out) are a result of an accounting change in the Tax and Franchise Fee Debt Service Fund (TFFDS). In FY 08, revenues previously recorded in the TFFDS Fund are now recorded directly into the General Fund. 134 REVENUE CAPACITY
CITY OF PENSACOLA, FLORIDA ASSESSED VALUE AND ESTIMATED ACTUAL VALUE OF TAXABLE PROPERTY LAST TEN FISCAL YEARS (in thousands of dollars)
Less: Total Taxable Total Fiscal Personal Real Central Tax-Exempt Assessed Direct Year Property Property Property Property Value Tax Rate 2000 $ 391,675 $ 2,450,587 $ 5,935 $ 1,001,183 $ 1,847,014 5.057 2001 415,122 2,807,726 5,167 1,194,322 2,033,693 5.057 2002 427,108 2,911,073 4,409 1,176,176 2,166,414 5.057 2003 441,745 2,965,797 4,616 1,191,203 2,220,955 5.057 2004 413,014 3,238,596 7,135 1,313,660 2,345,085 5.057 2005 421,212 3,594,930 6,946 1,420,435 2,602,653 5.057 2006 433,775 3,652,079 4,842 1,470,558 2,620,138 5.057 2007 534,628 4,713,764 4,517 2,013,162 3,239,747 4.950 2008 537,581 4,760,528 5,113 1,935,505 3,367,717 4.598 2009 568,137 4,749,243 7,608 2,134,762 3,190,226 4.540
Source: Escambia County Property Appraiser's Office
Notes: Property is reassessed every 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.
135 CITY OF PENSACOLA, FLORIDA DIRECT AND OVERLAPPING PROPERTY TAX RATES LAST TEN FISCAL YEARS (rate per $1,000 of assessed value)
Overlapping Rates City Of City Of Pensacola Pensacola Escambia Northwest Total Downtown County Florida Water Fiscal Direct Improvement School Escambia Management Year Rate Board Board County (a) District
2000 5.0570 2.0000 9.0110 8.7560 0.0500 2001 5.0570 2.0000 9.2490 8.7560 0.0500 2002 5.0570 2.0000 8.9860 8.7560 0.0500 2003 5.0570 1.0000 8.8870 8.7560 0.0500 2004 5.0570 2.0000 8.7880 8.7560 0.0500 2005 5.0570 2.0000 8.4100 8.7560 0.0500 2006 5.0570 2.0000 8.0330 8.7560 0.0500 2007 4.9500 2.0000 7.8940 8.7560 0.0500 2008 4.5980 2.0000 7.7200 8.0170 0.0450 2009 4.5395 2.0000 7.7200 6.9755 0.0450
Source: Escambia County Tax Collector
Notes: (a) Escambia County property tax rates do not include MSTU rate. The MSTU rate is a rate charged to County-Only residents.
136 CITY OF PENSACOLA, FLORIDA PRINCIPAL PROPERTY TAX PAYERS CURRENT YEAR AND NINE YEARS AGO
2009 2000 PercentagePercentage Taxable of Total City Taxable of Total City Assessed Taxable Assessed Taxable Taxpayer Value Rank Assessed Value Value Rank Assessed Value (a)
Sacred Heart Hospital $ 167,739,637 1 0.61% $ 50,607,770 2 0.45% Gulf Power 93,870,488 2 0.34% 69,842,160 1 0.62% Simon Debartolo Group 38,105,890 3 0.14% ------Armstrong World Industries 34,149,854 4 0.12% 27,685,750 4 0.24% Bellsouth/Southern Bell 30,114,429 5 0.11% 36,039,350 3 0.32% Wal-mart 26,552,447 6 0.10% ------Gayfers/Dillards 19,146,128 7 0.07% 15,609,350 6 0.14% Pensacola POB Inc 16,914,492 8 0.06% ------Moulton Properties 15,439,991 9 0.06% ------AT&T 15,121,654 10 0.05% 19,653,700 5 0.17% Reichhold Inc/Arizona Chemical ------10,049,020 10 0.09% Baars Theo Jr. ------14,076,410 7 0.12% Pensacola News Journal ------12,944,590 8 0.11% Pensacola Properties ------10,506,590 9 0.09%
Total $ 457,155,010 1.66% $ 216,406,920 1.91%
Source: Escambia County Tax Collector
Notes: (a) Actual percentages of total city taxable assessed value are not available; percentages are based on estimates.
137 CITY OF PENSACOLA, FLORIDA PROPERTY TAX LEVIES AND COLLECTIONS PAST TEN FISCAL YEARS
Collected within the Fiscal Year Taxes Levied Fiscal Year of the Levy Collections Totals Collections to Date Ended for the Percentage in Subsequent Percentage September 30, Fiscal Year (a) Amount (b) of Levy Years (c) Amount (d) of Levy
2000 $ 9,340,349 $ 8,929,147 95.6% $ 35,070 $ 8,964,217 96.0% 2001 10,284,386 9,840,828 95.7% 52,032 9,892,860 96.2% 2002 10,955,561 10,508,046 95.9% 113,181 10,621,227 96.9% 2003 11,231,367 10,669,274 95.0% 59,736 10,729,011 95.5% 2004 11,859,094 11,406,796 96.2% 128,939 11,535,735 97.3% 2005 13,161,616 12,538,957 95.3% 85,670 12,624,627 95.9% 2006 13,250,038 12,413,790 93.7% 198,216 12,612,006 95.2% 2007 16,036,749 15,291,677 95.4% 36,476 15,328,153 95.6% 2008 15,484,765 14,879,673 96.1% 83,329 14,963,002 96.6% 2009 14,482,031 13,811,445 95.4% 179,188 13,990,633 96.6%
Source: Escambia County Tax Collector.
Notes: (a) The tax levy is based on the tax roll as certified by the Escambia County Property Appraiser. (b) Current tax collections are after applicable discounts for early payment. (c) Collections represent subsequent and current year delinquent revenues. (d) Property taxes collected are accounted for in the General Fund. Outstanding delinquent property taxes are not reported because they are considered not available at year end.
138 CITY OF PENSACOLA, FLORIDA TAXABLE SALES BY CATEGORY LAST TEN CALENDAR YEARS (in thousands of dollars)
Fiscal Year 2000 2001 2002 2003 2004 2005 2006 2007 2008 2009 (a)
General merchandise stores $ 84,364 $ 98,852 $ 373,573 $ 681,095 $ 706,509 $ 775,301 $ 744,296 $ 720,523 $ 689,995 $ 481,141 Grocery stores 174,770 182,476 175,925 171,254 190,511 226,175 220,364 215,618 201,809 155,799 Hotels and apartments 94,363 98,576 106,617 104,349 121,330 (c) 106,004 128,563 145,076 147,407 124,533 Lumber and building materials 224,296 167,045 195,565 234,608 242,896 325,156 (d) 258,968 243,424 232,226 160,383 Manufacturing and mining 111,032 71,531 64,548 68,366 69,282 93,780 124,271 104,058 74,887 49,157 Motor vehicle dealers 640,512 633,027 699,932 687,134 737,529 875,945 762,294 724,052 597,693 397,914 Office space and commercial rentals 152,352 151,556 159,015 170,548 168,992 176,203 187,011 197,872 197,947 142,318 Restaurants and lunchrooms 321,559 334,379 355,278 365,036 400,885 437,593 449,429 461,118 453,222 352,603
Total $ 1,803,248 $ 1,737,442 $ 2,130,453 $ 2,482,390 $ 2,637,934 $ 3,016,157 $ 2,875,196 $ 2,811,741 $ 2,595,186 $ 1,863,848
City direct sales tax rate (b)
Source: The University of West Florida Haas Center
Notes: Data presented reflects Escambia County. (a) 2009 data only represents the first nine months of the calendar year. (b) The city has no direct tax rate. However, the city receives a portion of the proceeds from the Half Cent Sales Tax and the Local Option Sales Tax. The distribution of the proceeds of the Half Cents Sales Tax and the Local Option Sales Tax to the incorporated municipalities of the County are controlled by the formula set forth in Section 218.65 and 218.62, Florida Statues. (c) The 16.2% increase in hotel and apartment taxable sales in 2004 is attributable to Hurricane Ivan displaced families. (d) The 33.9% increase in lumber and building materials taxable sales in 2005 is attributable to Hurricane Ivan and Dennis protective and repair measures.
139 CITY OF PENSACOLA, FLORIDA DIRECT AND OVERLAPPING SALES TAX RATES LAST TEN FISCAL YEARS
Local Option Half Cent Sales Tax Sales Tax Fiscal Escambia School Year County District
2000 1.00% 0.50% 2001 1.00% 0.50% 2002 1.00% 0.50% 2003 1.00% 0.50% 2004 1.00% 0.50% 2005 1.00% 0.50% 2006 1.00% 0.50% 2007 1.00% 0.50% 2008 1.00% 0.50% 2009 1.00% 0.50%
Source: City Budget Office
Note: The city has no direct tax rate. However, the city receives a portion of the proceeds from the Local Option Sales Tax. The distribution of the proceeds of the Local Option Sales Tax to the incorporated municipalities of the County are controlled by the formula set forth in Section 218.62, Florida Statues.
140 CITY OF PENSACOLA, FLORIDA SALES TAX REVENUE PAYERS BY INDUSTRY CURRENT YEAR AND NINE YEARS AGO (in thousands of dollars)
2009 2000 Number Percentage Tax Percentage Number Percentage Tax Percentage of Filers of Total Liability (a) of Total of Filers of Total Liability (a) of Total
Retail trade 2,145 31.42% $ 126,669 53.00% 2,930 37.84% $ 128,505 56.68% Services 1,904 27.89% 50,101 20.96% 2,174 28.07% 40,131 17.70% Manufacturing and mining 120 1.76% 3,966 1.66% 82 1.06% 6,829 3.01% Wholesale trade 156 2.29% 7,414 3.10% 154 1.99% 5,369 2.37% Construction 166 2.43% 14,518 6.07% 216 2.79% 15,586 6.87% Finance, insurance, and real estate 2,080 30.47% 20,717 8.67% 1,893 24.44% 14,541 6.41% Transportation and utilities 60 0.88% 11,633 4.87% 79 1.02% 13,680 6.03% Agricultural 45 0.66% 1,876 0.78% 48 0.62% 920 0.41% Other 150 2.20% 2,123 0.89% 168 2.17% 1,147 0.52%
Total 6,826 100.00% $ 239,017 100.00% 7,744 100.00% $ 226,708 100.00%
Source: Florida Department of Revenue Office of Research
Notes: Data presented reflects Escambia County. Data is presented on the State Fiscal Year of July 1 - June 30. (a) Tax liability represents the state percentage of the tax liability paid by businesses in Escambia County. Total tax liability was not available by industry for Escambia County.
141 CITY OF PENSACOLA, FLORIDA ENERGY SERVICES OF PENSACOLA GAS SOLD IN MCFS BY TYPE OF CUSTOMER LAST TEN FISCAL YEARS (in thousands of Mcfs)
2000 2001 2002 2003 2004 2005 2006 2007 2008 2009 Type of Customer Residential -Inside City Limits 568 670 547 572 500 395 345 362 327 311 Residential -Outside City Limits 979 1,164 962 1,017 984 801 796 765 712 701 Commercial -Inside City Limits 326 347 333 344 357 334 327 358 353 287 Commercial -Outside City Limits 507 583 546 557 596 571 500 482 453 415 Municipal 100 74 76 63 45 43 47 34 14 15 Interruptible 834 771 960 905 575 592 579 588 642 628 Transportation 976 829 757 834 1,178 1,095 1,563 1,673 1,379 961 Total 4,290 4,438 4,181 4,292 4,235 3,831 4,157 4,262 3,880 3,318
Total direct rate per Mcf (a) $ - $ 12.80 $ 10.64 $ 12.61 $ 15.16 $ 16.39 $ 19.38 $ 18.26 $ 20.47 $ 18.74
Source: Energy Services of Pensacola Notes: (a) In fiscal year 2000 and prior gas rates were based on usage, therfore total direct rates for those years are not available. Total direct rate per Mcf is calculated using residential in/out, commercial in/out, and municipal customers. Interruptible and transportation direct rates are not available.
142 CITY OF PENSACOLA, FLORIDA ENERGY SERVICES OF PENSACOLA GAS RATES LAST NINE FISCAL YEARS
Residential - Inside City Limits Residential - Outside of City Limits Commercial - Inside City Limits Fixed Base PGA & WNA Fixed Base PGA & WNA Fixed Base PGA & WNA Fiscal Monthly Rate per Rate per Monthly Rate per Rate per Monthly Rate per Rate per Year Charge Mcf Mcf (a) Charge Mcf Mcf (a) Charge Mcf Mcf (a)
2001 $ 6.00 $ 5.28 $ 6.48 $ 7.00 $ 6.95 $ 6.66 $ 10.00 $ 5.28 $ 6.74 2002 6.00 5.28 4.53 7.00 6.95 4.68 10.00 5.28 4.40 2003 6.00 5.28 6.43 7.00 6.95 6.47 10.00 5.28 6.46 2004 6.00 5.28 8.95 7.00 6.95 9.04 10.00 5.28 8.81 2005 6.00 5.28 10.21 7.00 6.95 10.32 10.00 5.28 9.91 2006 6.00 5.28 13.14 7.00 6.95 13.30 10.00 5.28 12.99 2007(b) 7.00 6.27 11.05 8.00 7.97 11.10 12.00 6.27 10.92 2008 7.00 6.27 12.87 8.00 7.97 12.94 12.00 6.27 12.62 2009 7.28 6.53 10.72 8.32 8.30 10.78 12.48 6.53 10.52
Commercial - Outside of City Limits Municipal Interruptible and Transportation (c) Fixed Base PGA & WNA Fixed Base PGA & WNA Fixed Base PGA & WNA Fiscal Monthly Rate per Rate per Monthly Rate per Rate per Monthly Rate per Rate per Year Charge Mcf Mcf (a) Charge Mcf Mcf (a) Charge Mcf Mcf (a)
2001 $ 12.00 $ 6.95 $ 6.71 $ 15.00 $ 1.95 $ 4.53 $ 0.00 $ N/A $ N/A 2002 12.00 6.95 4.23 15.00 1.95 2.58 0.00 N/A N/A 2003 12.00 6.95 6.34 15.00 1.95 4.48 0.00 N/A N/A 2004 12.00 6.95 8.74 15.00 1.95 7.01 0.00 N/A N/A 2005 12.00 6.95 10.01 15.00 1.95 8.26 0.00 N/A N/A 2006 12.00 6.95 13.01 15.00 1.95 11.19 0.00 N/A N/A 2007(b) 14.00 7.97 10.93 16.00 2.30 9.75 150.00 N/A N/A 2008 14.00 7.97 12.70 16.00 2.30 12.41 150.00 N/A N/A 2009 14.56 8.30 10.57 16.64 2.39 10.39 150.00 N/A N/A
Source: Energy Services of Pensacola Notes: In fiscal years 2000 and prior gas rates were based on usage, therefore direct rates for those years are not available. (a) The Purchase Gas Adjustment (PGA) is a monthly adjustment to the gas rate due to increases in the cost of gas purchased for resale. The Weather Normalization Adjustment (WNA) is an adjustment to the gas rate to account for fluctuations in consumption due to colder or warmer weather during the months of October through March of the previous or current fiscal year. PGA and WNA rates are based on a yearly average. Both the base rate and the PGA/WNA rates need to be taking into consideration when determining the yearly rate per Mcf. (b) The increase to the fixed monthly charges and base rates took effect in the beginning of the monthly June 2007 billing cycle. (c) Interruptible and transportation rates per Mcf are not reported as rates are negotiated on a customer by customer bases. 143 DEBT CAPACITY
CITY OF PENSACOLA, FLORIDA RATIOS OF OUTSTANDING DEBT BY TYPE LAST TEN FISCAL YEARS (dollars in thousands, except for per capita)
Governmental Activities Business-type Activities Tax and Local Option Community Gas Tax and Airport Total Percentage Fiscal Franchise Fee Sales Tax Redevelopment Revenue Franchise Fee Revenue Primary of Personal Per Year Bonds Bonds Bonds Bonds Bonds (Port) Bonds Government Income (a) Capita (a)
2000 $ 31,293 $ 20,012 $ 4,515 $ 16,625 $ 5,940 $ 43,395 $ 121,780 1.77% $ 397 2001 29,848 27,014 4,295 15,725 4,700 42,550 124,132 1.80% 418 2002 27,770 26,460 4,060 14,785 4,016 41,759 118,850 1.65% 397 2003 25,125 25,275 3,815 13,810 3,306 41,634 112,965 1.81% 372 2004 24,243 24,040 3,272 12,755 1,558 39,549 105,417 1.68% 343 2005 21,991 22,750 2,926 11,650 1,524 35,550 96,391 1.49% 317 2006 19,213 21,405 2,605 10,495 1,502 34,425 89,645 1.33% 290 2007 16,355 20,000 2,273 9,280 1,480 33,569 82,957 1.14% 266 2008 13,328 20,000 1,927 9,681 1,457 77,550 123,943 1.66% 390 2009 10,836 20,000 1,569 16,479 1,339 83,902 134,125 1.82% 425
Notes: Details regarding the city's outstanding debt can be found in the notes to the financial statements. (a) See demographic and economic statistics schedule for personal income and population data. These ratios are calculated using Escambia County population and personal income for the corresponding calander year.
144 CITY OF PENSACOLA, FLORIDA DIRECT AND OVERLAPPING GOVERMENTAL ACTIVITIES AS OF SEPTEMBER 30, 2009 (dollars in thousands)
Estimated Share of Estimated Direct and Debt Percentage Overlapping Governmental Unit Outstanding Applicable Debt
Other Debt
Escambia County Sales Tax Revenue Bonds $ 80,780 18.2200% $ 14,718 Tourism Development Revenue Bonds 11,385 18.2200% 2,074 Capital Improvement Bonds/Notes 28,635 18.2200% 5,217 Capital Leases 1,165 18.2200% 212
Escambia County School District State Board of Education Bonds 9,100 0.0882% 8 Certificates of Participation 50,275 0.0882% 44 Capital Leases 1,038 0.0882% 1
Subtotal, overlapping debt 22,275
City direct debt 32,405
Total direct and overlapping debt $ 54,680
Source: Debt outstanding provided by Escambia County Clerks office. Estimated percentages for Escambia County is obtained from the Florida Legislative Committee on Intergovernmental Relations. Estimated percentages for Escambia County School Board is obtained by dividing the city's population by the counties population (see the Demographic and Economic and Statistics schedule) and multiplying it by the .5% half cent sales tax.
Notes: Overlapping governments are those that coincide, at least in part, with the geographic boundaries of the city. This schedule estimates the portion of the outstanding debt of those overlapping governments that is borne by the residents and businesses of the City of Pensacola. This process recognizes that, when considering the city'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 tax payer is a resident - and therefore responsible for repaying the debt - of each overlapping government.
145 CITY OF PENSACOLA, FLORIDA PLEDGED REVENUE COVERAGE LAST TEN FISCAL YEARS (dollars in thousands)
Tax and Franchise Fee Bonds Local Option Sales Tax Bonds
Public Half cent Electric Occupational Local Fiscal Service Sales Franchise Gas Licenses Debt Service Option Debt Service Year Tax Tax Fee Tax Tax Principal Interest Coverage Sales Tax Principal Interest Coverage
2000 $ 7,676 $ 3,796 $ 4,684 $ 145 $ 833 $ 3,175 $ 1,568 3.61 $ 6,147 $ 1,055 $ 478 4.01 2001 7,703 3,631 5,079 94 792 3,360 1,378 3.65 5,953 1,095 1,261 2.53 2002 4,747 3,737 4,279 79 803 1,909 2,665 2.98 5,840 1,140 1,002 2.73 2003 5,141 3,810 5,600 63 868 1,869 2,715 3.38 6,076 1,185 880 2.94 2004 5,194 3,931 5,860 2 871 1,111 2,758 4.10 6,161 1,235 1,204 2.53 2005 5,264 4,408 4,063 - - 1,173 3,188 3.15 7,621 1,290 1,391 2.84 2006 5,815 4,487 4,623 - - 2,093 1,644 3.99 7,546 1,345 1,829 2.38 2007 5,896 4,093 4,972 - - 2,880 830 4.03 6,961 1,405 859 3.07 2008 5,747 3,825 5,049 - - 3,050 681 3.92 6,551 - 585 11.20 2009 5,879 3,443 5,802 - - 2,610 542 4.80 5,976 - 299 19.99
Community Redevelopment Bonds Gas Revenue Bonds
Tax Utility Less: Net Fiscal Increment Debt Service Charges Operating Available Debt Service Year Revenues Principal Interest Coverage for Services (a) Expense (b) Revenue Principal Interest Coverage
2000 $ 1,351 $ 215 $ 485 1.93 $ 27,830 $ 21,770 $ 6,060 $ 865 $ 755 3.74 2001 1,967 220 259 4.11 46,890 35,971 10,919 900 787 6.47 2002 2,411 235 248 4.99 35,345 23,717 11,628 940 749 6.88 2003 2,417 245 236 5.02 40,711 32,203 8,508 975 707 5.06 2004 2,825 260 223 5.85 47,699 34,642 13,057 1,055 662 7.60 2005 3,387 346 84 7.88 47,699 35,967 11,732 1,105 613 6.83 2006 3,443 321 108 8.03 53,437 43,724 9,713 1,155 560 5.66 2007 5,399 333 97 12.56 52,914 39,455 13,459 1,215 504 7.83 2008 5,126 345 84 11.95 57,790 46,833 10,957 1,368 456 6.01 2009 4,653 358 72 10.82 47,926 38,601 9,325 1,205 451 5.63
Airport Revenue Bonds
Airport Less: Net Coverage Capital Coverage Fiscal Charges Operating Available Debt Service before Fund after Year for Services Expense (b) Revenue Principal Interest Transfer Transfer (d) Transfer
2000 $ 10,262 $ 5,074 $ 5,188 $ 1,285 $ 2,563 1.35 889 1.58 2001 10,171 5,776 4,395 845 2,479 1.32 1,529 1.78 2002 10,631 6,015 4,616 895 2,432 1.39 1,543 1.85 2003 10,777 6,393 4,384 1,125 2,378 1.25 1,010 1.54 2004 11,224 6,764 4,460 1,185 2,314 1.27 1,069 1.58 2005 12,630 7,947 4,683 1,260 2,246 1.34 1,033 1.63 2006 14,669 9,429 5,240 1,279 1,572 1.84 1,513 2.37 2007 16,512 10,117 6,395 1,295 1,735 2.11 2,303 2.87 2008 17,700 10,559 7,141 1,365 1,659 2.36 2,492 3.19 2009 13,719 12,021 1,698 1,440 1,579 (c) 0.56 2,380 1.35
(continued) 146 CITY OF PENSACOLA, FLORIDA PLEDGED REVENUE COVERAGE LAST TEN FISCAL YEARS (dollars in thousands)
Airport Revenue Note CFC Airport Revenue Bonds PFC
Customer Passenger Fiscal Facility Debt Service Facility Debt Service Year Charge Principal Interest Coverage Charge Principal Interest Coverage
2000 ------2001 ------2002 ------2003 ------2004 ------2005 ------2006 ------2007 ------2008 ------2009 $ 1,255 $ - $ 245 5.12 $ 2,844 $ - $ 1,097 2.59
Source: City Finance Office
Notes: Details regarding the city's outstanding debt can be found in the notes to the financial statements. Interest consist of both variable and fixed rates. (a) 2003 operating revenues are deflated by a deferred revenue posting of $2.3 million; 2004 operating revenues are inflated by the same posting. (b) Operating expenses are net of depreciation expenses. (c) Excludes interest expense paid with bond proceeds. (d) The capital fund transfer is a prepaid revenue amount which is comprised of the prior year's coverage plus non-obligated capital improvements and any excess operating funds.
147 DEMOGRAPHIC AND ECONOMIC INFOMATION
CITY OF PENSACOLA, FLORIDA DEMOGRAPHIC AND ECONOMIC STATISTICS LAST TEN CALANDER YEARS
Escambia Personal Per Capita Calendar Pensacola County Income Personal Median School Unemployment Year Population Population (in thousands) Income Age Enrollment Rate 2000 60,865 306,500 $ 6,874,795 $ 22,430 35 44,536 4.4% 2001 56,275 296,709 6,883,055 23,198 36 44,657 5.5% 2002 56,271 299,485 7,202,015 24,048 36 43,547 4.8% 2003 56,307 303,310 6,253,039 20,616 36 43,724 4.3% 2004 56,366 307,226 6,289,531 20,472 36 43,699 3.5% 2005 54,827 303,623 6,486,905 21,365 35 42,960 4.1% 2006 55,033 309,647 6,757,426 21,823 36 42,442 3.3% 2007 55,311 311,624 7,306,960 23,448 37 42,390 3.8% 2008 56,373 317,553 7,478,373 23,550 37 40,391 5.6% 2009 55,637 315,545 7,357,247 23,316 37 40,404 9.9%
Source: Unemployment data provided by the Florida Research and Economic Database. Population, personal income and median age data provide by the University of West Florida, HAAS center. School enrollment data provided by Escambia county school system, public relations office.
Notes: All data is applicable to Escambia County except for Pensacola population.
148 CITY OF PENSACOLA, FLORIDA PRINCIPAL EMPLOYERS CURRENT YEAR AND NINE YEARS AGO
2009 2000 Percentage Percentage Employees Rank of Total MSA Employees Rank of Total MSA Employment Employment Employer
Local Government 16,500 1 8.35% 10,900 2 6.25% Federal Government 6,500 2 3.29% 26,500 1 15.20% State Government 6,100 3 3.09% 4,800 4 2.75% Sacred Heart Health System 5,000 4 2.53% 3,500 5 2.01% Baptist Health Care 4,013 5 2.03% 5,000 3 2.87% Lakeview Center 2,000 6 1.01% ------Ascend Performance Materials 1,400 7 0.71% ------Gulf Power Company 1,400 8 0.71% 1,300 9 0.75% Wal-Mart 1,375 9 0.69% ------West Florida Regional Medical Center 1,300 10 0.66% 1,800 6 1.03% University of West Florida ------1,500 8 0.86% Solutia, Inc. (formerly Monsanto Co.) ------1,500 7 0.86% International Paper ------1,100 10 0.63%
Total 45,588 23.07% 57,900 33.21%
Source: Pensacola Area Chamber of Commerce, Enterprise Florida Inc., Reference USA, and Florida Research and Economic Development Labor Market Statistics.
Notes: Principal employer information is only available on a calendar year basis and for the Pensacola Metropolitan Statistical Area. Actual numbers are not available, therefore estimates are presented.
149 OPERATING INFOMATION
CITY OF PENSACOLA, FLORIDA OPERATING INDICATORS BY FUNCTION/PROGRAM LAST TEN FISCAL YEARS
Fiscal Year 2000 2001 2002 2003 2004 2005 2006 2007 2008 2009 Governmental activities: General Government Permits issued 7,285 6,804 6,822 7,382 7,249 16,301 (d) 8,746 7,610 7,415 5,448 Building inspections conducted ------19,665 18,989 18,918 13,982 Police Residential burglary responses - 366 445 402 392 207 401 410 363 521 Commercial burglary responses - 145 156 198 223 146 198 198 118 173 Emergency responses - 104,242 102,457 98,686 103,503 102,517 96,531 97,602 93,019 84,155 Physical arrests 4,399 4,183 4,200 4,031 3,960 4,582 4,490 4,059 3,958 3,894 Traffic violations 14,677 14,907 13,167 12,519 14,036 11,409 10,793 10,617 9,890 8,095 Fire Emergency responses 5,822 1,571 4,253 5,532 5,738 6,332 5,655 5,624 5,823 6,011 Fires extinguished 399 97 249 267 310 264 265 248 264 207 Inspections 1,038 1,249 1,492 1,340 1,354 1,147 1,615 1,344 1,111 1,689 Transportation (a) Traffic signals maintained 82 294 369 478 408 281 297 324 310 280 Traffic warning signals maintained 36 40 42 33 42 62 52 132 95 52 Street lights maintained 25 79 128 239 228 288 219 231 217 194 Street name markers replaced 56 44 77 56 47 83 479 251 193 164 Traffic control signs replaced 587 406 454 379 584 525 110 265 242 679 Parking meters replaced 50 50 30 35 35 35 40 50 - (h) - Culture and recreation Parks and recreation Number of programs offered ------496 450 369 244 City resident program participants ------234,889 301,389 288,489 459,634 County resident program participants 115,691 135,406 74,053 62,324 Golf Course Rounds played 42,637 43,402 41,827 37,007 36,950 32,603 37,427 27,428 30,866 35,543 Tournaments held ------92 82 76 80 Tournament participants ------4,942 4,808 4,500 4,500 Libraries Items circulated 991,366 938,731 1,023,651 1,083,813 1,147,516 1,014,058 948,830 680,577 (e) 747,294 778,052 Public computer use 44,982 71,329 101,942 127,621 136,446 148,208 166,164 138,553 159,004 168,654 Program Attendance 12,402 13,690 14,845 16,375 17,086 12,674 13,358 11,551 11,335 10,011 Information Transactions 56,558 58,503 62,080 65,199 60,982 84,039 57,303 71,318 74,349 78,982 City resident library card usage 24,601 24,086 24,700 24,413 23,267 29,646 30,739 30,286 24,373 33,081 County resident library card usage 59,146 57,846 58,905 59,225 54,942 71,348 77,596 77,523 61,475 86,325 (continued)
150 CITY OF PENSACOLA, FLORIDA OPERATING INDICATORS BY FUNCTION/PROGRAM LAST TEN FISCAL YEARS
Fiscal Year 2000 2001 2002 2003 2004 2005 2006 2007 2008 2009 Economic environment Homes repaired/rehabilitated - - 58 36 49 51 41 28 34 39 New homes constructed - - 12 12 23 45 49 47 46 3 First-time homebuyers assisted - - 40 6 22 14 59 21 52 35 Lots acquired for infill housing - - 1 1 4 3 - 1 - - Families assisted - - 1,968 2,162 1,994 1,952 1,600 1,685 2,163 2,269 Housing inspections conducted - - 4,555 1,042 4,807 3,295 3,999 3,336 4,700 4,440 Congregate meals/meals on wheel provided - - 286 184 351 1,269 1,300 978 1,030 1,342 Day care assistance provided, number of children - - 272 235 355 815 295 335 - - Physical environment (a) Miles of paved streets swept - 15,000 20,000 20,000 22,000 22,500 23,610 25,680 27,378 24,740
Business-type Activities: Utility Average daily consumption in mmbtu's (c) 9,080 11,094 9,810 10,158 9,653 8,729 7,983 8,923 9,182 8,124 Maximum daily consumption in mmbtu's 39,236 40,086 36,932 40,983 37,483 34,799 31,313 33,131 33,926 29,524 In City customer connections 19,155 19,301 19,256 19,046 17,427 (g) 17,396 17,448 17,468 17,032 16,648 Outside City customer connections 37,447 38,314 38,808 39,663 41,648 (g) 41,828 41,953 41,999 42,312 41,767 Sanitation Customers 19,000 19,000 19,000 19,000 19,000 19,300 19,150 19,167 19,122 18,965 Refuse collected (tons) Garbage 22,842 22,218 23,064 23,064 24,030 26,987 24,344 23,009 22,213 18,490 Green Waste 12,874 14,675 16,332 17,170 15,428 13,057 10,654 10,358 11,023 9,716 Recycling (new in FY 2009) 1,189 Construction/Demolition (C&D) 1,398 1,466 1,298 1,407 1,694 551 (b) 3,004 3,313 2,847 2,828 Port Tonnage exported 365,464 390,832 255,184 125,771 66,626 45,175 139,706 26,318 (f) 26,899 13,950 Tonnage imported 331,827 237,771 329,871 378,039 441,286 448,831 709,103 498,925 (f) 357,532 233,822 Number of vessels in port 468 334 532 477 425 145 189 85 (f) 64 16 Airport Carriers 3 3 4 4 4 4 4 4 4 4 Commuter services 5 5 7 7 7 7 10 8 8 8 Passengers enplaned 515,624 523,991 637,885 672,397 740,608 799,907 811,291 835,121 814,279 700,662 Passengers deplaned 537,398 529,385 643,730 677,906 737,998 797,595 805,956 825,424 811,324 697,840 Air freight enplaned in pounds 2,709,051 2,459,542 2,690,188 2,917,762 2,739,046 2,157,396 2,029,739 2,675,816 2,594,147 681,481 Mail enplaned in pounds 2,067,210 2,237,417 1,072,004 1,166,787 1,320,534 392,944 71,176 875 303 102 Total flights (private and commercial) 112,750 117,058 130,204 124,777 127,848 129,269 114,887 108,636 109,141 96,233
Sources: Various city departments.
Notes: No operating indicators are available for the human services function. For those indicators that are null, data is not available. (a) Data provided is based on estimates. (b) 40,458 cubic yards of C&D were also collected that year. (c) MMBTU stands for one million British Thermal Unit. (d) Fluctuation due to Hurricane Ivan. (e) The Santa Rosa Library was transferred to the County durring FY07. (f) Decrease due to a major tenant being inoperative a considerable length of time to make major renovations to their capital equipment. (g) In fiscal year 2004, new software was purchased which provided a more accurate count between in-city and outside city customers. (h) The responsibility of the City's parking garages, lots and meters were transferred to the Downtown Improvement Board during FY 2008. 151 CITY OF PENSACOLA, FLORIDA CAPITAL ASSET STATISTICS BY FUNCTION/PROGRAM LAST TEN FISCAL YEARS
Fiscal Year 2000 2001 2002 2003 2004 2005 2006 2007 2008 2009 Governmental Activities: General Government Police Stations 1 1 1 1 1 1 1 1 1 1 Patrol units 140 136 136 139 140 140 140 140 135 130 Fire Stations 7 7 7 7 7 7 7 7 7 6 Apparatus 28 28 28 28 28 28 28 28 31 31 Transportation (a) Miles of street 327 327 328 328 328 328 328 328 330 332 Traffic warning signals 43 45 45 51 51 47 47 49 48 45 Traffic control signals 90 90 91 93 93 94 96 96 95 92 Traffic control signs 4,845 5,100 5,150 5,150 5,248 5,524 6,138 7,210 7,284 7,292 Culture and recreation Parks and recreation Parks 95 95 95 95 95 95 94 93 93 93 Acreage 509 509 509 509 509 509 508 483 483 483 Golf course Par 72 72 72 72 72 72 72 72 72 72 Acreage 98 98 98 98 98 98 98 123 123 123 Yardage 6,400 6,400 6,400 6,400 6,400 6,400 6,400 6,400 6,400 6,400 Libraries Number of libraries 3 3 3 3 3 3 3 2 (b) 33 Number of bookmobiles 2 2 2 2 2 2 2 2 1 0 Number of volumes 251,821 264,505 285,246 307,384 330,392 339,687 359,005 294,084 (b) 297,639 289,128 Economic environment (a) Street lights 7,209 7,299 7,343 7,500 7,645 7,700 7,792 7,815 7,855 7,790 Street name markers 2,350 2,385 2,385 2,400 2,400 2,400 2,459 2,889 2,910 2,905 Parking garages and lots, Number and size 3 @550 sp 3 @550 sp 3 @550 sp 3 @550 sp 3 @550 sp 3 @550 sp 3 @550 sp 3 @550 sp 3 @550 sp (d) 3 @550 sp Parking meters 745 745 745 745 745 571 669 653 627 (d) 621 Berths ------3 (c) 3 Physical environment Street Sweepers 8 8 8 8 8 8 8 8 6 7 (continued)
152 CITY OF PENSACOLA, FLORIDA CAPITAL ASSET STATISTICS BY FUNCTION/PROGRAM LAST TEN FISCAL YEARS
Fiscal Year 2000 2001 2002 2003 2004 2005 2006 2007 2008 2009 Business-type activities: Utility Miles of gas mains 1,370 1,446 1,469 1,487 1,507 1,526 1,563 1,588 1,613 1,623 Sanitation Collection trucks - residential Garbage 17 17 17 17 16 16 16 16 17 12 (e) Collection trucks - trash collection Container 2 2 2 2 2 2 2 2 2 2 Grapplers 9 9 9 9 8 8 8 8 8 9 Shuttle 10 10 10 10 9 9 9 9 9 2 Dump 2 2 2 2 2 2 2 2 2 1 Tractor 1 1 1 1 1 1 1 1 1 1 Shuttle trailers 20 20 20 20 20 20 20 20 20 8 Collection trucks - residential Recycling 4 (e) Port Warehouses 8 8 8 8 8 8 8 8 8 8 Berths 8 8 8 8 8 8 8 8 5 (c) 5 Airport Runway 17-35 length and width in square feet 7000x150 7000x150 7000x150 7000x150 7000x150 7000x150 7000x150 7000x150 7000x150 7000x150 Runway 8-26 length and width in square feet 6000x150 6000x150 6000x150 6000x150 6000x150 7000x150 7000x150 7000x150 7000x150 7000x150 Terminal building in square feet 159,000 159,000 159,000 159,000 159,000 159,000 159,000 159,000 159,000 159,000
Sources: Various city departments.
Notes: No capital asset indicators are available for the economic environment and human services function. For those indicators that are null, data is not available. (a) Data provided is based on estimates. (b) The Santa Rosa Library was transferred to the County in FY07. (c) Three berths were transfered out Port's control during FY08. Two were moved to Culture and Recreation and one to Economic Environment. (d) The responsibility of the City's parking garages, lots and meters were transferred to the Downtown Improvement Board in FY 2008. (e) The City started a recycling program in fiscal year 2009. Four trucks were moved out of residentail garbage and into residential recycling.
153 CITY OF PENSACOLA, FLORIDA FULL-TIME-EQUIVALENT CITY GOVERNMENT POSITIONS BY FUNCTION/PROGRAM LAST TEN FISCAL YEARS
Full-time-Equivalent Employees as of September 30, Function/Program 2000 2001 2002 2003 2004 2005 2006 2007 2008 2009 Governmental activities: General government City manager 11 11 11 11 9 8 7 7 7 7 City clerk 3 3 3 3 3 3 3 3 3 3 Legal 6 6 6 6 6 6 6 6 6 3 Employee service 12 12 13 13 13 12 14 14 14 8 Civil service 3333333332 Financial services 58 58 58 58 57 57 57 54 52 32 Community development 0 0 0 0 33 (c) 32 32 32 14 (d) 10 Planning & neighborhood development 9 (a) 9 12 12 0 (c) 0 0 0 0 0 Garage 23 23 23 23 24 24 24 24 22 18 MIS 19202020202019181817 CRA 333 333 4 4 4 2 Public safety Police 233 233 233 233 230 229 229 226 220 212 Fire 139 139 139 139 139 136 142 142 138 115 Inspection services 18 19 19 19 0 (c) 0 0 0 18 (d) 14 Code enforcement board 1 1 0 0 0 0 0 0 0 Street cleaning 8 10 3 (b) 0 0 0 0 0 0 0 Transportation Public Works 38 38 15 (b) 15 16 16 17 17 16 12 Culture and recreation Parks and recreation (e) 88 88 92 92 92 92 92 92 92 80 Golf Course 5 5 5 5 5 7 7 7 7 5 Library 24 28 32 33 33 41 42 49 49 52 Economic environment Housing 26262828282727252523 Physical environment Stormwater utility 0 0 34 (b) 34 32 32 32 32 32 31 Engineering 10 10 10 11 10 10 11 11 11 11 Business-type activities: Utility 107 109 111 111 112 112 112 113 113 131 Sanitation 62 62 62 62 62 62 59 60 57 51 Port 12 12 13 14 11 11 10 12 12 10 Airport 40 41 42 48 49 49 49 50 51 62
958 969 990 996 990 992 998 1001 984 911
Source: City Budget Office Notes: (a) Neighborhood Enhancement Team (NET) added to Planning and Neighborhood Development. Positions transferred from Police, ESP, Sanitation and Housing. (b) Stormwater Utility Fee Fund created. Moved 24 Positions from Public Works/Stormwater and 10 Positions from Sanitation/Street Cleaning. (c) As part of reorganization, Community Development created; combining Planning and Neighborhood Dev. and Inspection Services. (d) Inspection Services moved to a Special Revenue Fund. (e) Number of employees represent full time budgeted positions. Parks and recreation has part-time temporary employees to help facilitate programs during the summer. 154
OTHER AUDIT REPORTS SECTION
INDEPENDENT AUDITOR’S REPORT ON INTERNAL CONTROL OVER FINANCIAL REPORTING AND ON COMPLIANCE AND OTHER MATTERS BASED ON AN AUDIT OF FINANCIAL STATEMENTS PERFORMED IN ACCORDANCE WITH GOVERNMENT AUDITING STANDARDS
Honorable Mayor, City Council, and City Manager City of Pensacola, Florida
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 City of Pensacola, Florida (the City) as of and for the year ended September 30, 2009, which collectively comprise the City’s basic financial statements and have issued our report thereon dated February 15, 2009. 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.
Internal Control Over Financial Reporting
In planning and performing our audit, we considered the City’s internal control over financial reporting as a basis for designing our auditing procedures 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 City’s internal control over financial reporting. Accordingly, we do not express an opinion on the effectiveness of the City’s internal control over financial reporting.
A control deficiency 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 misstatements on a timely basis. A significant deficiency is a control deficiency, or a combination of control deficiencies, that adversely affects the City’s ability to initiate, authorize, record, process, or report financial data reliably in accordance with generally accepted accounting principles such that there is more than a remote likelihood that a misstatement of the City’s financial statements that is more than inconsequential will not be prevented or detected by the City’s internal control.
A material weakness is a significant deficiency, or combination of significant deficiencies, that results in more than a remote likelihood that a material misstatement of the financial statements will not be prevented or detected by the City’s internal control.
Our consideration of internal control over financial reporting was for the limited purpose described in the first paragraph of this section and would not necessarily identify all deficiencies in internal control that might be significant deficiencies or material weaknesses. We did not identify any deficiencies in internal control over financial reporting that we consider to be material weaknesses, as defined above.
Compliance and Other Matters
As part of obtaining reasonable assurance about whether the City’s financial statements are free of 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.
However, we noted a certain matter that we reported to management of the City in a separate letter dated February 15, 2010.
This report is intended solely for the information and use of the City of Pensacola, the State of Florida, and applicable federal agencies and pass-through entities and is not intended to be and should not be used by anyone other than these specified parties.
Pensacola, Florida February 15, 2010
INDEPENDENT AUDITOR’S REPORT ON COMPLIANCE WITH REQUIREMENTS APPLICABLE TO EACH MAJOR FEDERAL PROGRAM, STATE PROJECT AND PASSENGER FACILITY CHARGE PROGRAM AND ON INTERNAL CONTROL OVER COMPLIANCE IN ACCORDANCE WITH OMB CIRCULAR A-133
Honorable Mayor, City Council, and City Manager City of Pensacola, Florida
Compliance
We have audited the compliance of the City of Pensacola, Florida (the City) with the types of compliance requirements described in the U.S. Office of Management and Budget (OMB) Circular A-133 Compliance Supplement, the requirements described in the Executive Office of the Governor’s State Projects Compliance Supplement, and the compliance requirements described in the Passenger Facility Charge Audit Guide for Public Agencies, issued by the Federal Aviation Administration, that are applicable to each of its major federal programs, state projects and its passenger facility charges for the year ended September 30, 2009. The City’s major federal programs and state projects are identified in the summary of auditor’s results section of the accompanying schedule of findings and questioned costs. Compliance with the requirements of laws, regulations, contracts and grants applicable to each of its major federal programs, state projects, and its passenger facility charges is the responsibility of the City’s management. Our responsibility is to express an opinion on the City’s compliance based on our audit.
We conducted our audit of compliance 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; OMB Circular A-133, Audits of States, Local Governments, and Non-Profit Organizations; Chapter 10.550, Rules of the Auditor General and Federal Aviation Administration; Passenger Facility Charge Audit Guide for Public Agencies. Those standards, OMB Circular A-133, Chapter 10.550, Rules of the Auditor General and Passenger Facility Charge Audit Guide for Public Agencies, require that we plan and perform the audit to obtain reasonable assurance about whether noncompliance with the types of compliance requirements referred to above that could have a direct and material effect on a major federal program, state project, and the passenger facility charge program occurred. An audit includes examining, on a test basis, evidence about the City’s compliance with those requirements and performing such other procedures as we considered necessary in the circumstances. We believe that our audit provides a reasonable basis for our opinion. Our audit does not provide a legal determination on the City’s compliance with those requirements.
In our opinion, the City complied, in all material respects, with the requirements referred to above that are applicable to each of its major federal programs, state projects, and passenger facility charge program for the year ended September 30, 2009.
Internal Control Over Compliance
The management of the City is responsible for establishing and maintaining effective internal control over compliance with requirements of laws, regulations, contracts and grants applicable to federal programs, state projects, and passenger facility charge program. In planning and performing our audit, we considered the City’s internal control over compliance with the requirements that could have a direct and material effect on a major federal program, state project, and passenger facility charge program in order to determine our auditing procedures for the purpose of expressing our opinion on compliance, but not for the purpose of expressing an opinion on the effectiveness of internal control over compliance. Accordingly, we do not express an opinion on the effectiveness of the City’s internal control over compliance.
A control deficiency in an entity’s internal control over compliance 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 noncompliance with a type of compliance requirement of a federal program, state project, and passenger facility charge program on a timely basis. A significant deficiency is a control deficiency, or a combination of control deficiencies, that adversely affects the entity’s ability to administer a major federal program, state project, or passenger facility charge program such that there is more than a remote likelihood that noncompliance with a type of compliance requirement of a major federal program, state project, or passenger facility charge program that is more than inconsequential will not be prevented or detected by the entity’s internal control.
A material weakness is a significant deficiency, or a combination of significant deficiencies, that results in more than a remote likelihood that material noncompliance with a type of compliance requirement of a federal program, state project, or passenger facility charge program will not be prevented or detected by the entity’s internal control.
Our consideration of internal control over compliance was for the limited purpose described in the first paragraph of this section and would not necessarily identify all deficiencies in internal control that might be significant deficiencies or material weaknesses. We did not identify any deficiencies in internal control over compliance that we consider to be material weaknesses, as defined above.
This report is intended solely for the information and use of the City of Pensacola, the State of Florida, and applicable federal agencies and pass-through entities and is not intended to be and should not be used by anyone other than these specified parties.
Pensacola, Florida February 15, 2010
CITY OF PENSACOLA FLORIDA SCHEDULE OF FINDINGS AND QUESTIONED COSTS - YEAR ENDED SEPTEMBER 30, 2009
A. SUMMARY OF AUDIT RESULTS
1. The independent auditor’s report expresses an unqualified opinion on the financial statements of the City of Pensacola, Florida.
2. No significant deficiencies in internal control relating to the audit of the financial statements are reported in the Independent Auditor’s Report on Compliance and Internal Control over Financial Reporting Based on an Audit of Financial Statements Performed in Accordance with Government Auditing Standards.
3. No instances of noncompliance material to the financial statements of the City of Pensacola, which would be required to be reported in accordance with Government Auditing Standards, were disclosed during the audit.
4. No significant deficiencies relating to the audit of the major federal award program and state projects are reported in the Independent Auditor’s Report on Compliance and Internal Control Over Compliance Applicable to each Major Federal Program and State Project.
5. The auditor’s report on compliance for major federal award programs and state projects for the City of Pensacola expresses an unqualified opinion.
6. No instances of audit findings that are required to be reported in accordance with Section 510(a) of OMB Circular A-133 are reported in this schedule.
7. The programs tested as major programs/projects were:
Federal Programs Airport Improvement Program (CFDA No. 20.106), Disaster Grants – Public Assistance (Presidentially Declared Disasters) (CFDA No. 97.036), Airport Checked Baggage Screening Program (CFDA No. 97.100).
State Projects Aviation Development Grants (CSFA No. 55.004), Seaports Grants (CSFA No. 55.005), State Aid to Libraries (CSFA No. 45.030).
8. The threshold for distinguishing Types A and B programs was $580,000 for major federal programs and $300,000 for major state projects.
9. The City of Pensacola, Florida was determined to be a low-risk auditee pursuant to OMB Circular A-133.
CITY OF PENSACOLA FLORIDA SCHEDULE OF FINDINGS AND QUESTIONED COSTS - YEAR ENDED SEPTEMBER 30, 2009
B. FINDINGS - FINANCIAL STATEMENTS AUDIT
None.
C. FINDINGS AND QUESTIONED COSTS - MAJOR FEDERAL PROGRAMS
None.
D. FINDINGS AND QUESTIONED COSTS - MAJOR STATE PROJECTS
None.
CITY OF PENSACOLA FLORIDA SUMMARY SCHEDULE OF PRIOR AUDIT FINDINGS YEAR ENDED SEPTEMBER 30, 2009
There were no prior year audit findings.
CITY OF PENSACOLA, FLORIDA SCHEDULE OF EXPENDITURES OF FEDERAL AWARDS, PASSENGER FACILITY CHARGE AND STATE FINANCIAL ASSISTANCE FOR THE YEAR ENDED SEPTEMBER 30, 2009
Federal Passenger CFDA Number/ Facility Federal/State Agency, Pass-Through State CSFA Contract Grant Charge Entity, Federal Program/State Project Number Number Expenditures Revenue
FEDERAL AWARDS
U. S. DEPARTMENT OF HOUSING AND URBAN DEVELOPMENT Community Development Block Grant 14.218 B-07/08-MC-12-0016 $ 1,130,904 Housing Rehabilitation 14.218 B-07/08-MC-12-0016 205,190 Total Community Development Block Grants 1,336,094 Section 8 Housing Choice Vouchers Program 14.871 FL092 13,821,325
HOME Investment Partnerships Program 14.239 B-06-UC-12-0012 310,616
Pass through State of Florida, Florida Housing Finance Corporation: HOME Tenant Based Rental Assistance 14.239 2005-103TBRA 709 Total HOME Investment Partnership Program 311,325 Total U. S. Department of Housing and Urban Development 15,468,744
U.S. ENVIRONMENTAL PROTECTION AGENCY Passed through State of Florida: 17th Ave Stormwater Retrofit 66.460 G0084 15,150 Total U. S. Environmental Protection Agency 15,150
U. S. DEPARTMENT OF TRANSPORTATION Airport Improvement Program 20.106 N/A 2,975,316 Pass through State of Florida, Florida Department of Transportation State Match: Aviation Development Reconstruct/Overlay R/W 17/35 55.004 AJ936 1,677 Aviation Development Apron Expansion 55.004 AO975 482,851 Total Florida Department of Transportation State Match 484,528 Passed through the State of Florida, Department of Transportation: Highway Planning & Construction 20.205 APE84 45,700 Total U. S. Department of Transportation 3,505,544
U. S. DEPARTMENT OF JUSTICE Office of Justice Programs: Bulletproof Vest Partnership Program 16.607 2007-BU-BX-0703-9913 6,745 Bulletproof Vest Partnership Program 16.607 2009-BU-BX-0804-5575 6,303 Total Bulletproof Vest Partnership Program 13,048 Edward Byrne Memorial Justice Assistance Program 16.738 2007-DJ-BX-1146 130 Edward Byrne Memorial Justice Assistance Program 16.738 2008-DJ-BX-0212 11,112 Edward Byrne Memorial Justice Assistance Program 16.738 2009-JAGC-ESCA-2-T7-038 20,000 Total Edward Byrne Memorial Justice Assistance Program 31,242 Law Enforcement Trust Fund N/A N/A 20,558 Total U. S. Department of Justice 64,848
U.S. DEPARTMENT OF HOMELAND SECURITY Hurricane Ivan - 90% 97.036 1551-DR-FL 3,925,491 Hurricane Ivan - 10% - State 97.036 1551-DR-FL 436,166 Hurricane Katrina - 100% 97.036 1602-DR-FL 220,759 Total Disaster Grants - Public Assistance 4,582,416
Assistance to Firefighters Grant Program 97.044 EMW-2008-FO-09117 68,146
Port Security Training Program 97.056 2007-GB-T7-0295 2,917
Pass through State of Florida, Passed through Escambia County, Florida: Homeland Security Grant Program 97.067 2009-LETP-OKAL-4-S3-067 75,000
Airport Checked Baggage Screening Program 97.100 HSTS04-08-H-CT1030 6,430,332 Total U.S. Department of Homeland Security 11,158,811 CITY OF PENSACOLA, FLORIDA SCHEDULE OF EXPENDITURES OF FEDERAL AWARDS, PASSENGER FACILITY CHARGE AND STATE FINANCIAL ASSISTANCE FOR THE YEAR ENDED SEPTEMBER 30, 2009
Federal Passenger CFDA Number/ Facility Federal/State Agency, Pass-Through State CSFA Contract Grant Charge Entity, Federal Program/State Project Number Number Expenditures Revenue
FEDERAL AWARDS CONTINUED
U.S. DEPARTMENT OF AGRICULTURE Passed through State of Florida, Florida Department of Health: Child and Adult Care Food Program 10.558 A-2573 13,291 Total U.S. Department of Agriculture 13,291
TOTAL EXPENDITURES OF FEDERAL AWARDS $ 30,226,388
PASSENGER FACILITY CHARGE $ 1,959,204 1 2,842,177 2
STATE FINANCIAL ASSISTANCE
FLORIDA DEPARTMENT OF TRANSPORTATION Seaport Warehouse Improvemment and Dredging 55.005 AP127 $ 10,409 Seaport Freezer and Warehouse Expansion 55.005 APG09 686,545 Seaport Freezer and Warehouse Expansion Phase II 55.005 APG62 279,569 Total Seaport Grants 976,523 Aviation Development Air Commerce Park Land Acquisition 55.004 AO986 1,076,023 Aviation Development Expansion of Parking Lot 55.004 ANW47 28,973 Aviation Development Drainange Improvements 55.004 ANW51 125,000 Aviation Development SAFE Council 55.004 APG90 28,331 Total Aviation Development Grants 1,258,327 Area Wide Coordinate Signal Timings 55.013 AOM42 271,089 Total Transit Corridor Program Grants 271,089 Highway Beautification Council Grant 55.003 422812-1-74-01 6,773 Total Florida Highway Beautification Council Grants 6,773 Total Florida Department of Transportation 2,512,712
FLORIDA HOUSING FINANCE CORPORATION SHIP Program 52.901 SHIP 2008 60,969 Total Florida Housing Finance Corporation 60,969
FLORIDA DEPARTMENT OF STATE AND SECRETARY OF STATE Division of Library and Information Services: State Aid to Libraries 45.03 09-ST-90 134,712 State Aid to Libraries 45.03 08-PLC-09 500,000 Total Florida Department of State and Secretary of State 634,712
TOTAL EXPENDITURES OF STATE FINANCIAL ASSISTANCE $ 3,208,393
NOTE TO SCHEDULE OF EXPENDITURES OF FEDERAL AWARDS, PASSENGER FACILITY CHARGE AND STATE FINANCIAL ASSISTANCE NOTE A - SIGNIFICANT ACCOUNTING POLICIES The schedule of expenditures of federal awards and passenger facility charge is presented on the accrual basis of accounting in accordance with generally accepted accounting principles. 1 Includes debt service of $1,691,012 2 Includes interest earnings of $112,477
MANAGEMENT LETTER
Honorable Mayor, City Council, and City Manager City of Pensacola, Florida
We have audited the financial statements of the City of Pensacola, Florida, as of and for the fiscal year ended September 30, 2009, and have issued our report thereon dated February 15, 2010.
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 OMB Circular A-133, Audits of States, Local Governments, and Non-Profit Organizations. We have issued our Independent Auditor’s Report on Internal Control over Financial Reporting and Compliance and Other Matters, Independent Auditor’s Report on Compliance with Requirements Applicable to each Major Federal Program and State Project and on Internal Control over Compliance, and Schedule of Findings and Questioned Costs. Disclosures in those reports and schedule, which are dated February 15, 2009, should be considered in conjunction with this management letter.
Additionally, our audit was conducted in accordance with Chapter 10.550, Rules of the Auditor General, which governs the conduct of local governmental entity audits performed in the State of Florida. This letter is includes the following information, which is not included in the aforementioned auditor’s reports or schedule:
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 significant findings and recommendations made in the preceding annual financial audit report. Except as noted below under the heading Prior Year Findings and Recommendations, corrective actions have been taken to address significant findings and recommendations made in the preceding annual financial audit report.
Section 10.554(1)(i)2., Rules of the Auditor General, requires our audit to include a review of the provisions of Section 218.415, Florida Statutes, regarding the investment of public funds. In connection with our audit, we determined that the City of Pensacola, Florida complied with Section 218.415, Florida Statutes.
Section 10.554(1)(i)3., Rules of the Auditor General, requires that we address in the management letter any recommendations to improve financial management. In connection with our audit, we have the following recommendation:
Prior Year Findings and Recommendations:
Management Information Systems - Rotation of Duties
Auditor’s Comment:
The management information services department continues its implementation of a cross-training program as recommended in our prior year management letter. We encourage the department to continue to complete implementation of this program and, once completed, we recommend that duties of department personnel be rotated periodically to strengthen controls.
Periodic rotation of duties helps prevent the loss of important management information capabilities due to a single employee maintaining specific knowledge isolated to a particular function. In addition, rotation of duties can lead to better cooperation and teamwork among department personnel.
If the small size of the management information services department limits the extent to which duties can be rotated, we recommend that management periodically reevaluate controls and procedures to ensure that material weaknesses do not develop.
Management’s response:
We agree with the auditor’s comment. The department is too small and the duties are too diverse to rotate duties as recommended. We continue cross-training personnel through on-the-job training. Formal training has been eliminated due to budget shortfalls. The on-the-job training is an ongoing process that will require significant time to accomplish.
Section 10.554(1)(i)4., Rules of the Auditor General, requires that we address violations of provisions of contracts or grant agreements, or abuse, that have an effect on the financial statements that is less than material but more than inconsequential. In connection with our audit, we did not have any such findings.
Section 10.554(1)(i)5., Rules of the Auditor General, provides that the auditor may, based on professional judgment, report the following matters that have an inconsequential effect on financial statements, considering both quantitative and qualitative factors: (1) violations of provisions of contracts or grant agreements, fraud, illegal acts, or abuse, and (2) control deficiencies that are not significant deficiencies. In connection with our audit, we did not have any such findings.
Section 10.554(1)(i)6., 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 included in the notes to the City of Pensacola, Florida’s financial statements.
Section 10.554(1)(i)7.a., Rules of the Auditor General, requires a statement be included as to whether or not the local governmental entity has met one or more of the conditions described in Section 218.503(1), Florida Statutes, and identification of the specific condition(s) met. In connection with our audit, we determined that the City of Pensacola, Florida did not meet any of the conditions described in Section 218.503(1), Florida Statutes.
Section 10.554(1)(i)7.b., Rules of the Auditor General, requires that we determine whether the annual financial report for the City of Pensacola, Florida for the fiscal year ended September 30, 2009, filed with the Florida Department of Financial Services pursuant to Section 218.32(1)(a), Florida Statutes, is in agreement with the annual financial audit report for the fiscal year ended September 30, 2009. In connection with our audit, we determined that these two reports were in agreement.
Pursuant to Sections 10.554(1)(i)7.c. and 10.556(7), Rules of the Auditor General, we applied financial condition assessment procedures. It is management’s responsibility to monitor the City of Pensacola, 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.
Pursuant to Chapter 119, Florida Statutes, this management letter is a public record and its distribution is not limited. Auditing standards generally accepted in the United States of America require us to indicate that this letter is intended solely for the information and use of management, and the Florida Auditor General, and is not intended to be and should not be used by anyone other than these specified parties.
Pensacola, Florida February 15, 2010
CITY OF PENSACOLA, FLORIDA FINANCIAL DATA SCHEDULE SECTION 8 HOUSING CHOICE VOUCHERS PROGRAM CATALOGUE OF FEDERAL DOMESTIC ASSISTANCE NUMBER 14.871 FOR THE YEAR ENDED SEPTEMBER 30, 2009
Line Item # Account Description Amount
Assets: Current Assets: Cash: 111 Unrestricted $ 2,357,835 113 Other restricted 1,946,054 100 Total cash 4,303,889 Receivables: 128 Fraud recovery 293,349 128.1 Allowance for doubtful accounts - Fraud (234,679) 120 Total receivables 58,670 131 Investments - unrestricted 1,608,846 142 Prepaid expenses and other assets 424 150 Total current assets 5,971,829 190 Total assets $ 5,971,829
Liabilities: Current liabilities: 312 Accounts payable <= 90 days $ 10,188 321 Accrued wage/payroll taxes payable 21,743 342 Deferred revenue 58,670 310 Total current liabilities 90,601 300 Total liabilities 90,601
Equity: 509.2 Fund Balance Reserved 1,946,054 512.2 Unreserved, undesignated fund balance 3,935,174 513 Total equity/net assets 5,881,228 600 Total liabilities and equity/net assets $ 5,971,829 CITY OF PENSACOLA, FLORIDA FINANCIAL DATA SCHEDULE SECTION 8 HOUSING CHOICE VOUCHERS PROGRAM CATALOGUE OF FEDERAL DOMESTIC ASSISTANCE NUMBER 14.871 FOR THE YEAR ENDED SEPTEMBER 30, 2009
Line Item # Account Description Amount
Revenues Other revenue: 70600 HUD PHA Operating Grants $ 10,598,222 71100 Investment Income - unrestricted 69,274 71400 Fraud Recovery 42,759 71500 Other revenue 295,699 71600 Gain or loss on sale of capital assets 810 72000 Investment Income - restricted 34,258 700 Total revenues 11,041,022
Expenses 91100 Administrative salaries 676,036 91200 Auditing fees 32,300 91500 Employee benefit contributions - administrative 317,415 91600 Other operating - administrative 2,362 91810 Allocated Overhead 127,100 93100 Water 630 93200 Electricity 13,535 93300 Gas 869 93600 Sewer 630 93800 Other utilities expense 26,288 94200 Maintenance and operations - materials and other 159,720 94300 Maintenance and operations - contracts 16,746 96120 Liability insurance 14,946 96200 Other general expenses 150 96210 Compensated absences (21,436) 96900 Total operating expenses 1,367,291 97000 Excess operating revenue over operating expenses 9,673,731 Other expenses: 97300 Housing Assistance Payments 12,454,034 90000 Total expenses 13,821,325
10000 Excess (deficiency) of total revenue over (under) total expenses $ (2,780,303)
11030 Beginning Equity $ 8,661,530 11170 Administrative Fee Equity $ 3,935,173 11180 Housing Assistance Payments Equity $ 1,946,054 11190 Unit Months Available 27,456 11210 Number of Unit Months Leased 27,231