Comprehensive Annual Financial Report City Of Pompano Beach, Florida Fiscal Year Ended September 30,2011 Prepared by the Finance Department Suzette Sibbie, Finance Director Andrew Jean-Pierre, Controller Erica Simmons-Ahimah, Accountant Jayne Post, Accounting Systems Analyst Jesse Durbin, Accounting Supervisor Tana Ziontz, Department Head Secretary CITY OF POMPANO BEACH, FLORIDA COMPREHENSIVE ANNUAL FINANCIAL REPORT FISCAL YEAR ENDED SEPTEMBER 30, 2011 TABLE OF CONTENTS Page I. INTRODUCTORY SECTION (Unaudited) List of Elected Officials and Administration iv Letter of Transmittal v-xiii City Organizational Chart xiv Certificate of Achievement for Excellence in Financial Reporting xv II. FINANCIAL SECTION Independent Auditor's Report 1-2 A. MANAGEMENT'S DISCUSSION AND ANALYSIS (Unaudited) (required supplementary information) 3-19 B. BASIC FINANCIAL STATEMENTS Government-wide Financial Statements Statement of Net Assets 20 Statement of Activities 21-22 Fund Financial Statements Governmental Fund Financial Statements Balance Sheet 23-24 Reconciliation of the Governmental Funds Balance Sheet to the Statement of Net Assets 25 Statement of Revenues, Expenditures and Changes in Fund Balances 26-27 Reconciliation of the Statement of Revenues, Expenditures, and Changes in Fund Balances of Governmental Funds to the Statement of Activities 28 Proprietary Fund Financial Statements Statement of Net Assets 29 Reconciliation of the Enterprise Funds Statement of Net Assets to the Government­ wide Statement of Net Assets 30 Statement of Revenues, Expenses, and Changes In Fund Net Assets 31 Reconciliation of the Statement of Revenues, Expenses and Changes in Fund Net Assets of Enterprise Funds to the Statement of Activities 32 Statement of Cash Flows 33-34 Fiduciary Fund Financial Statements Statement of Fiduciary Net Assets 35 Statement of Changes In Fiduciary Net Assets 36 Notes to Financial Statements 37-93 C. REQUIRED SUPPLEMENTARY INFORMATION (Unaudited) Police and Firefighters' Retirement System, General Employees' Retirement System and Other Post Employment Benefits Schedule of Funding Progress 94 Budgetary Comparison Schedules General Fund 95 Northwest Community Redevelopment District Fund 96 East Community Redeveloment District Fund 97 Emergency Medical Services Fund 98 CITY OF POMPANO BEACH, FLORIDA TABLE OF CONTENTS (Continued) Page Notes to the Required Supplementary Information 99-100 D. COMBINING AND INDIVIDUAL FUND FINANCIAL STATEMENTS AND SCHEDULES Nonmajor Governmental Funds: Combining Balance Sheet 101-102 Combining Statement of Revenues, Expenditures and Changes in Fund Balances 103-104 SHIP Fund: Schedule of Revenues, Expenditures and Changes in Fund Balance- Budget and Actual 105 Cemetery Fund: Schedule of Revenues, Expenditures and Changes in Fund Balance - Budget and Actual 106 1993 G,O. Bonds Fund: Schedule of Revenues, Expenditures and Changes in Fund Balance - Budget and Actual 107 Nonmajor Enterprise Funds: Combining Statement of Net Assets 108-109 Combining Statement of Revenues, Expenses and Changes in Fund Net Assets 110-111 Combining Statement of Cash Flows 112-113 Internal Service Funds Combining Statement of Net Assets 114-115 Combining Statement of Revenues, Expenses and Changes in Fund Net Assets 116-117 Combining Statement of Cash Flows 118-119 Fiduciary Funds Combining Statement of Fiduciary Net Assets (Pension Trust Funds) 120 Combining Statement of Changes in Fiduciary Net Assets (pension Trust Funds) 121 Schedule of Changes in Assets and Liabilities (General Agency Fund) 122 III. STATISTICAL SECTION (Unaudited) SCHEDULES Statistical Section Summary 123 1 Net Assets by Component, Last Eight Fiscal Years 124-125 2 Changes in Net Assets, Last Eight Fiscal Years 126-127 3 Fund Balances, Governmental Funds, Last Ten Fiscal Years 128 4 Changes in Fund Balances, Governmental Funds, Last Ten Fiscal Years 129 5 Assessed Value and Actual Value of Taxable Property, Last Ten Fiscal Years 130-131 6 Direct and Overlapping Property Tax Rates, Last Ten Fiscal Years 132-133 7 Principal Property Taxpayers, Current Year and Nine Years Ago 134 8 Property Tax Levies and Collections, Last Ten Fiscal Years 135-136 9 Ratios of Outstanding Debt by Type, Last Ten Fiscal Years 137 10 Ratios of General Bonded Debt Outstanding, Last Ten Fiscal Years 138 11 Direct and Overlapping Governmental Activities Debt 139 12 Legal Debt Margin Information, Last Ten Fiscal Years 140 13 Utility Pledged Revenue Bond Coverage, Last Ten Fiscal Years 141 14 Demographic and Economic Statistics, Last Ten Calendar Years 142 15 Principal Employers, Current Year and Nine Years Ago 143 ii CITY OF POMPANO BEACH, FLORIDA TABLE OF CONTENTS (Continued) Page 16 Full-Time Equivalent City Government Employees by Function/Program, Last Ten Fiscal Years 144 17 Operating Indicators by Function/Program, Last Ten Fiscal Years 145 18 Capital Asset Statistics by Function/Program, Last Ten Fiscal Years 146 19 Insurance Coverage 147 20 General Background Information 148-149 iii CITY OF POMPANO BEACH, FLORIDA Commission-Manager Form of Government CITY COMMISSION lamar Fisher Mayor at large George Brummer Vice Mayor, District V Barry Dockswell Commissioner, District I Charlotte Burrie Commissioner, District II Rex Hardin Commissioner, District III Woodrow J. Poitier Commissioner, District IV APPOINTED OFFICIALS Dennis Beach City Manager Gordon B. Linn City Attorney Mary Chambers City Clerk Barbara Deleon Internal Auditor iv p mpano beach~ Florida's Warmest Welcome March 27, 2012 The Honorable Mayor, Commissioners and Residents of the City of Pompano Beach, Florida Dear Honorable Mayor, City Commissioners and Residents: We are pleased to submit the Comprehensive Annual Financial Report (CAFR) of the City of Pompano Beach, Florida (the City), for the fiscal year ended September 30, 2011. This report, presented in conformity with accounting principles generally accepted in the United States of America (GAAP), was prepared by the City's Finance Department and audited by an independent firm of certified public accountants, McGladrey and Pullen, LLP, as mandated by Florida Statutes, Chapter 218.39, Annual Financial Audit Reports. The audit was conducted in accordance with the Rules of the Auditor General of the State of Florida, promulgated pursuant to Florida Statute, Chapter 11.45. The independent auditor has issued an unqualified opinion that this report fairly presents the financial position of the City and complies with applicable reporting standards. The City is responsible for the accuracy of the data and the completeness and fairness of the presentation, including all disclosures. Management has established an internal control structure designed to ensure the assets of the City are protected from loss, theft or misuse and to ensure that adequate accounting data is compiled to allow for the preparation of financial statements in conformity with GAAP. Because the cost of internal controls should not outweigh their benefits, the City's comprehensive framework of internal controls has been designed to provide reasonable, rather than absolute assurance, that the financial statements will be free from material misstatement. We believe the data, as presented, is accurate in all material respects and is reported in a manner designed to fairly set forth the financial position and results of operations of the City as measured by the financial activity of its various funds. As a recipient of federal, state and county financial assistance, the City is also responsible for ensuring that an adequate internal control structure is in place to ensure compliance with applicable laws and regulations related to those programs. The City is required to undergo an annual single audit performed under the provisions of the US Office of Management and Budget Circular A-133, Audits of States, Local Governments and Non-Profit Organizations and Chapter 10.550, Rules of the Auditor General, of the State of Florida. The information related to the Single Audit, including the schedule of expenditure of federal awards and state financial assistance, findings and recommendations, and auditors' reports on the internal control and compliance with applicable laws and regulations are included in a separate report. This report is divided into three parts. The Introductory Section provides a summary of the contents of the entire report and general information about the reporting entity. The Financial Section includes the Independent Auditors' Opinion, Management's Discussion and Analysis (Unaudited), the Basic Financial Statements, Notes to the Financial Statements, Required Supplementary Information (Unaudited), and the Combining and Individual Fund Financial Statements and Schedules. The Management's Discussion and Analysis section provides a narrative introduction, overview and analysis of the basic financial statements. It complements this letter of transmittal and should be read in conjunction with it. v PROFILE OF THE CITY The City was incorporated in 1947 and covers an area of approximately 25.08 square miles. The legal authority by which the City was created and is governed is its charter, which was derived from Chapter 57-1754, Special Acts 1957, as amended. The City is governed by an elected five member district commission and a mayor at large. In addition to general government services, the City also provides community planning and redevelopment, public safety, public works and culture and recreation services to its residents. Furthermore, the City's water and sewer, stormwater, sanitation, golf,