3F0805-07, 2004 Annual Financial Reports

2004 Annual Financial Reports

ML052310486
Person / Time
Site:	Crystal River
Issue date:	08/11/2005
From:	Powell S Progress Energy Florida
To:	Document Control Desk, Office of Nuclear Reactor Regulation
References
3F0805-07
Download: ML052310486 (360)

Text

a Progress Energy Crystal River Nuclear Plant Docket No. 50-302 Operating License No. DPR-72 Ref: 10 CFR 50.71(b)

August 11, 2005 3F0805-07 U.S. Nuclear Regulatory Commission Attn: Document Control Desk Washington, DC 20555-0001

Subject:

Crystal River Unit 3 - 2004 Annual Financial Reports

Reference:

PEF to NRC letter, 3F0405-10, dated April 21, 2005

Dear Sir:

Pursuant to 10 CFR 50.71(b), Florida Power Corporation, doing business as Progress Energy Florida, Inc. (PEF), hereby submits the 2004 annual financial reports for three (3) of the participating co-owners of the Crystal River Unit 3 (CR-3) Nuclear Station.

PEF submitted its annual financial report (Progress Energy 2004 Annual Report) and the annual financial reports for six (6) of the nine (9) participating co-owners of CR-3 in the above referenced letter. Due to delays in printing production, annual financial reports for the City of Alachua, the City of Bushnell and the City of Ocala were received by PEF after the referenced letter was submitted to the Nuclear Regulatory Commission.

If you have any questions regarding this submittal, please contact Mr. Sid Powell, Supervisor, Licensing and Regulatory Programs at (352) 563-4883.

Sincerely, S. C. Powell Supervisor Licensing & Regulatory Programs SCP/ff Attachments xc: NRR Project Manager (w/o att.)

Regional Administrator, Region II (w/o att.)

Senior Resident Inspector (w/o att.) 1\AXt Progress Energy Florida, Inc.

Crystal River Nuclear Plant 15760 W. Powerline Street Crystal River, FL 34428

PROGRESS ENERGY FLORIDA, INC.

CRYSTAL RIVER UNIT 3 DOCKET NUMBER 50-302/LICENSE NUMBER DPR-72 2004 ANNUAL FINANCIAL REPORTS

. City of Alachua 0 City of Bushnell S City of Ocala

Emmm ANNUAL FINANCIAL REPORT OF THE CITY OF ALACHUA, FLORIDA For the Fiscal Year Ended September 30, 2004

CITY OF ALACHUA, FLORIDA ANNUAL FINANCIAL REPORT FOR THE FISCAL YEAR ENDED SEPTEMBER 30, 2004 TABLE OF CONTENTS Page INDEPENDENT AUDITOR'S REPORT ...................................................................... 1 MANAGEMENT'S DISCUSSION AND ANALYSIS ...................................................................... 3 BASIC FINANCIAL STATEMENTS:

Government-Wide Financial Statements:

Statement of Net Assets ................................................................... 21 Statement of Activities .................................................................... 22 Fund Financial Statements:

Balance Sheet - Governmental Funds ....................... .............................................. 24 Reconciliation of the Balance Sheet - Governmental Funds to the Statement of Net Assets ...... 25 Statement of Revenues, Expenditures, and Changes in Fund Balance -

Governmental Funds.................................................................................................................. 26 Reconciliation of the Statement of Revenues, Expenditures, and Changes in Fund Balances - Governmental Funds to the Statement of Activities ............. ..................... 27 Statement of Net Assets - Proprietary Funds .................................................... ................. 28 Statement of Revenues, Expenses, and Changes in Fund Net Assets -

Proprietary Funds ...................................................................... 31 Statement of Cash Flows - Proprietary Funds ..................................................................... 32 Statement of Fiduciary Net Assets - Fiduciary Funds .................................................................. 34 Statement of Changes in Fiduciary Net Assets - Fiduciary Funds ..................... .......................... 35 Notes to the Basic Financial Statements ...................................................................... 37 REQUIRED SUPPLEMENTARY INFORMATION:

GASB Statement 34:

Schedule of Revenues, Expenditures, and Changes in Fund Balances, Budget and Actual - General Fund .............. 59

COMBINING STATEMENTS Nonmaior Governmental Funds Combining Balance Sheet - Nonmajor Governmental Funds ......................................................... 62 Combining Statement of Revenues, Expenditures, and Changes in Fund Balances -

Nonmajor Governmental Funds ................................................................. 64 Fiduciary Funds i Combining Statement of Fiduciary Net Assets - Fiduciary Funds ................................ .................. 66 Combining Statement of Changes in Fiduciary Net Assets - Fiduciary Funds ................ ............... 67 SINGLE AUDIT AND GRANT COMPLIANCE SECTION II 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............................. ............... 71 i

Independent Auditor's Report on Compliance with Requirements Applicable to Each Major Federal Program and on Internal Control Over i

Compliance in Accordance with OMB Circular A-133 ........................................................... 73 Schedule of Expenditures of Federal Awards ................................................................... 75 Notes to Schedule of Expenditures of Federal Awards ................................................................... 76 Schedule of Findings and Questioned Costs .................................................................... 7 77 Auditor's Management Letter .................................................................... 79 City Responses to Management Letter ................................................................... 83 LI

• CPA OCIATES Certified Public Accountants and Consultants INDEPENDENT AUDITOR'S REPORT Honorable Mayor, City Commissioners, and City Manager City of Alachua, 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 Alachua, Florida, as of and for the year ended September 30, 2004, which collectively comprise the City's basic financial statements as listed in the Table of Contents. These financial statements are the responsibility of the City of Alachua's management. Our responsibility is to express opinions on these financial statements based on our audit.

We conducted our audit in accordance with auditing standards generally accepted in the United States of America and the standards applicable to financial audits contained in Government Auditing Standards, issued by the Comptroller General of the United States. Those standards require that we plan and perform the audit to obtain reasonable assurance about whether the financial statements are free of material misstatement. An audit 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 that our audit provides a reasonable basis for our opinions.

In our opinion, the financial statements referred to above present fairly, in all material respects, the respective financial position of the governmental activities, the business-type activities, each major fund, and the aggregate remaining fund information of the City of Alachua, Florida, as of September 30, 2004, and the respective changes in financial position and cash flows, where applicable, thereof 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 December 22, 2004 on our consideration of the City of Alachua's internal control over financial reporting and our tests of its compliance with certain provisions of laws, regulations, contracts, grant agreements, and other matters. The purpose of that report is to describe the scope of our testing of internal control over financial reporting and compliance and the results of that testing, and not to provide an opinion on the 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 and budgetary comparison information on pages 3 through 17 and on page 59 are not a required part of the basic financial statements but are supplementary information required by the Governmental Accounting Standards Board. 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.

Members: U American Institute of Certified PublicAccountants

• SEC Practice Section

• Private Companies Practice Section

• Florida Institute ofCertified Public Accountants

I lL Honorable Mayor, City Commissioners, and City Manager City of Alachua, Florida Our audit was conducted for the purpose of forming opinions on the financial statements that collectively comprise the City of Alachua, Florida's basic financial statements. The combining financial statements, listed in the Table of Contents, 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 is presented for purposes of additional analysis as required by the U.S. Office of Management and Budget Circular A-133, Audit of States, Local Governments, and Non-Profit Organizations,and is not a required part of the basic financial statements. Such information has been subjected to the auditing procedures 4'

applied in the audit of the basic financial statements and, in our opinion, is fairly stated in all material respects in relation to the basic financial statements taken as a whole.

C PA -I Bradenton, Florida December 22, 2004 I2 LII LU 2 1 L

CITY OF ALACHUA, FLORIDA MANAGEMENT'S DISCUSSION AND ANALYSIS SEPTEMBER 30, 2004 The City of Alachua's (the "City") discussion and analysis is designed to (a) assist the reader in focusing on significant financial issues, (b) provide an overview of the City's financial activity, (c) identify changes in the City's financial position (its ability to address the next and subsequent year challenges), (d) identify any material deviations from the financial plan (the approved budget), and (e) identify individual fund issues or concerns.

Since the Management's Discussion and Analysis (MD&A) is designed to focus on the current year's activities, resulting changes, and currently known facts, it should be read in conjunction with the City's financial statements (beginning on page 19). Please note the City provides prior year comparative financial formation as required by GASB 34.

Financial Highlighits The following graph is provided to assist in understanding the component parts of the financial statements:

Required components of City's Annual Financial Report Management's Discussion and Analysis Basic Financial Statements Government-Wide Fund Financial Statements I Financial Statements Notes to Financial Statements I Required Supplementary Information l Government-W^'ide Statements

• The City of Alachua's assets exceeded its liabilities at September 30, 2004 by $11.3 million (net assets). Of this amount, $7.7 million may be used to meet the government's ongoing obligations to citizens and creditors.

• As of September 30, 2004, the City of Alachua's governmental funds reported combined ending fund balances of $1,493,457, an increase of $197,699 in comparison with the prior year which was the result of a decrease in General Government expenditures.

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Approximately 81% of this total amount, $1,210,629, is available for spending at the City's discretion (unreserved, undesignated fund balance).

• The City of Alachua's total long-term debt decreased by $633,765 (-4.0%) during the j current fiscal year. The key factor in this decrease was the scheduled principal retirements of its debt.

• Total net assets ($11.3 million) are comprised of the following: i

1) $2.7 million of capital assets, net of related debt, include property and equipment, net j of accumulated depreciation, and reduced for outstanding debt related to the purchase of construction of those capital assets, 11

2) $.97 million of net assets are restricted by constraints imposed from outside of the City such as debt covenants, grantors, laws, or regulations, I

3) $.99 million of unrestricted governmental net assets, and

4) $6.7 million of unrestricted business net assets represent the portion available to maintain the City's continuing obligations to citizens and creditors.

i Fund Statements 0

• At September 30, 2004, the City's governmental funds reported combined ending fund balances of S1.49 million, an increase of $197,699, in comparison with the prior fiscal 1 year. This increase is due primarily to a decrease in General Government expenditures.

'At September 30, 2004, unreserved fund balance for the General Fund was $1.2 million or 22% of General Fund operating revenue. This is within the Government Finance Officers Association Best Practices guidelines for fund balance levels. U

• Governmental funds revenues stayed about the same compared to previous fiscal year at

$5.6 million.

• The City's outstanding notes payable and bonded debt decreased by $633,454. The key factors in this decrease were scheduled principal retirements of its current outstanding notes payable and bonded debt.

i Overview of the Financial Statements This discussion and analysis is intended to serve as an introduction to the City's basic financial statements. The City's basic financial statements consist of 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 themselves.

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Government-Wide Financial Statements The government-wide financial statements are designed to provide readers with a broad overview of the City's finances, in a manner similar to a private sector business, and consist of the following two statements:

The statement of net assets presents information on all of the City's assets and liabilities, with the difference between the two reported as net assets. Over time, increases or decreases in net assets may serve as a useful indicator of whether the financial position of the City is strengthening or weakening.

The statement of activities presents information showing how the City's net assets changed during the most recent fiscal year, focusing on both the gross and net costs of various activities, both governmental and business-type, that are supported by the government's general tax and other revenues. This is intended to summarize and simplify the user's analysis of the cost of various governmental services and/or subsidy to various business-type activities.

Both of these financial statements distinguish functions of the City that are principally supported by taxes and intergovernmental revenues (governmental activities) from other functions that are intended to recover all or a significant portion of their costs through user fees and charges (business-type activities). The governmental activities of the City include administration, police, parks and recreation, fire, transportation (streets and roads), physical environment (solid waste),

and planning and development. The business-type activities of the City include physical environment (electric, water, and wastewater utilities).

The government-wide financial statements include not only the City itself (known as the primary government), but also the following legally separate component unit: the City of Alachua Public Finance Authority for Affordable Housing. There have been no financial transactions for the Authority; therefore no amounts related to its operations are reported in the accompanying financial statements. The City has a Community Redevelopment Agency, but it has been determined that the Agency is not a separate legal entity. The Agency is presented in the basic financial statements of the City as a nonmajor governmental fund (page 62-65).

The government-wide financial statements can be found on pages 21-23 of this report.

Fund Financial Statements A fund is a grouping of related accounts that is used to maintain control over resources that have been segregated for specific activities or objectives. The City, like other state and local governments, uses fund accounting to ensure and demonstrate compliance with finance-related legal requirements. All City funds can be divided into three categories: governmental funds, proprietary funds, and fiduciary funds.

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Fund Financial Statements l Governmental Funds Proprietary Funds Fiduciary Funds Scope Includes the City's basic Services provided by the Funds for which the services such as police, City that are operated City is the trustee or cultural activities, traffic similar to private agent for someone control, and parks businesses and for which else's resources the City charges a fee Examples Police, street maintenance, Electric, water, sewer, City's retirement funds -

parks, recreational activities solid waste, stormwater pension, 401 (k), 457 Il Required financial statements Balance sheet; Statement of revenues, expenditures, and changes in fund balances Statement of net assets; Statement of revenues, expenses and changes in Statement of fiduciary net assets; Statement of changes in fiduciary net Il IS net assets; Statement of assets Accounting basis and measurement focus Modified accrual accounting and current financial cash flows Accrual accounting and Accrual accounting and economic resources focus economic resources A

information resources focus Type of asset/liability Only assets expected to be used up and liabilities that focus All assets and liabilities, All assets and both financial and capital, liabilities, both short A

come due during the year or and short and long-term and long-tern;capital soon thereafter, no capital assets, if any, are information assets included Type of inflow/ outflow Revenues for which cash is received during or soon after included .

All revenues and expenses All revenues and during the year, regardless expenses during the

-'I the end of the year; of when cash is received year, regardless of expenditures when goods or or paid when cash is received services have been received and payment is due during the year or soon thereafter or paid

-I Governmental Funds Governmental funds are used to account for essentially the same functions reported as A

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 H

resources available at the end of the fiscal year. Such information may be useful in evaluating a government's near-term financing requirements. Ii!

Because the focus of governmental funds is narrower than that of the government-wide financial statements, it is useful to compare the information presented for the governmental funds with similar information presented for governmental activities in the government-wide financial statements. By doing so, readers may better understand the long-term impact of the government's near-term financing decisions. Because of the different measurement focus (current financial resources versus total economic resources) a reconciliation of both the governmental fund Balance Sheet and the governmental fund Statement of Revenues, Expenditures, and Changes in Fund Balances is provided (see pages 24-27) to facilitate the 6

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comparison between governmental funds and governmental activities. The flow of current financial resources will reflect bond proceeds and interfund transfers as other financial sources as well as capital expenditures and bond principal payments as expenditures. The reconciliation will eliminate these transactions and incorporate the capital assets and long-term obligations (bonds and others) into the Governmental Activities column (in the government-wide statements).

The City maintains five (5) individual governmental funds. 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, which is considered a major fund. Data from the other four (4) governmental funds are combined into a single aggregated presentation. Individual fund data for each of these nonmajor governmental funds is provided in the form of combining statements in the supplementary information section of this report.

The City adopts an annual budget for its general, special revenue, debt service, and capital projects funds. A budgetary comparison statement has been provided for the General Fund to demonstrate budgetary compliance.

The basic governmental fund statements can be found on pages 24 and 26 of this report.

ProprietaryFunds The City maintains two different types of proprietary funds. Enterprise funds are used to report business-type activities in the government-wide financial statements. The City uses enterprise funds to account for its Public Utilities System (Electric, Water, Wastewater, and Mosquito Control). Internalservice funds are used to accumulate and allocate costs internally among the City's various functions. The City uses internal service funds to account for its Utility Billing and postage services. These services have been included within the government-wide financial statements as business-type activities.

Proprietary funds are used to report the same functions presented as business-type activities in the government-wide financial statements. The proprietary fund statements provide the same type of information as the government-wide financial statements, only in more detail. The proprietary fund financial statements provide separate information for the Public Utility System. The internal service fund is also presented in the proprietary fund financial statements.

The basic proprietary fund financial statements can be found on pages 28-33.

FiduciaryFunds Fiduciary funds are used to account for resources held for the benefit of parties outside the government. Fiduciary funds are not reflected in the government-wide financial statement because the resources of those funds are not available to support the City's own programs. The accounting used for fiduciary funds is similar to proprietary funds.

The basic fiduciary fund financial statements can be found on pages 34-35 of this report.

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_I "t Notes to the Financial Statements j The notes provide additional information that is essential to a full understanding of the data provided in the government-wide and fund financial statements. The notes to the financial statements can be found on pages 37-56 of this report.

Other Information j Combining statements referred to earlier present a more detailed view of the nonmajor governmental funds. Also included are statements for the pension trust funds. Combining statements can be found on pages 62-67 of this report.

jj Infrastructure Assets j Fiscal Year ended September 30, 2004 has been the second full year that the City implemented all portions of GASB Statement No. 34. Historically, a government's largest group of assets (infrastructure, roads, bridges, traffic signals, underground pipes not associated with a utility) have not been reported nor depreciated in the governmental financial statements. The new standard requires that these assets be valued and reported within the governmental column of the government-wide statements.

I The City is now depreciating its infrastructure assets in conformity with the GASB Statement No. 34.

j Governmtent-Wide FinancialAnalysis j Net assets may serve over time as a useful indicator of a government's financial position. In the case of the City, assets exceeded liabilities by S1 1.3 million at the close of the fiscal year ended September 30, 2004.

At the end of fiscal year 2004, the City is able to report positive balances in all three categories of net assets, both for the government as a whole, as well as for its separate governmental and I

business-type activities. j A portion of the City's net assets, $969,490, represents resources that are subject to external restriction on how they may be used. The balance of unrestricted net assets, $7,707,980, may be used to meet the government's ongoing obligation to citizens and creditors.

The second largest portion of the City's net assets ($2,668,135 or 24%) reflects its investment in capital assets (e.g., land, infrastructure, buildings, and equipment) less any related outstanding debt used to acquire those assets. The City uses these capital assets to provide services to citizens; consequently, these assets are not available for future spending. Although the City's investment in its capital assets is reported net of related debt, it should be noted that the resources needed to repay this debt must be provided from other sources, since the capital assets themselves cannot be used to liquidate these liabilities. H 8

As of September 30, 2004 and 2003 Governmental Business-type Total %

Ac20 vites Activities Total Change 2D44 2003 2004 2003 2004 2003 2003-2004 Current and other assets $1,803,618 $1.842,080 $9,419,546 $9,339,057 S11,223,164 $11,181,137 0.4%

Capital Assets 4,158.076 4.517,152 12.853,141 13.175,127 17,011,217 17,692,279 -3.8%

Total Assets 55.961.694 $6.359,232 $22,272,687 $22,514,184 S28,234,381 $28,873,416 *2.2%

Long-term liabilities outstanding $3,522.180 $3,616.883 $11,295,208 $11,991,999 $14,817,388 $15,608,882 -5.1%

Other liabilities 310.161 546.322 1,761,227 1.646.929 2,071,388 2.193.251 -5.6%

Total Uabilities $3,832.341 54.163.205 S13.056.435 $13,638.928 516.888,776 $17,802.133 -5.1%

Net Assets Invested in capital assets.

net d related debt $1,026,647 $900.269 $1,641,488 $1,518,611 S2,668,135 $2,418,880 10.3%

Restricted 51,490 49,901 918,000 400,808 969,490 450,709 115.1%

Unrestricted 1,051.216 1.245.857 6.656,764 6,955.837 7.707,980 8.201,694 -6.0%

Total Net Assets S2,129.353 $2,196.027 $9.216,252 $8,875,256 $11.345.605 $11,071,283 25%

For more detailed information see the Statement of Net Assets (page 21).

Normal Impacts There are six (6) basic (normal) transactions that will affect the comparability of the Statement of Net Assets summary presentation.

• Net Results of Activities: which will impact (increase/decrease) current assets and unrestricted net assets.

• Borrowing of Capital: which will increase current assets and long-term debt.

• Spending Borrowed Proceeds on New Capital: which will reduce current assets and increase capital assets. There is a second impact, an increase in invested in capital assets, and an increase in related net debt will not change the invested in capital assets, net of debt.

• Spending of Nonborrowed Current Assets on New Capital: which will reduce current assets, increase capital assets, reduce unrestricted net assets, and increase invested in capital assets, net of debt.

• Principal Payment on Debt: which will reduce current assets and reduce long-term debt, reduce unrestricted net assets, and increase invested in capital assets, net of debt.

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• Reduction of Capital Assets through Depreciation: which will reduce capital assets -i and invested in capital assets, net of debt.

City of Aachua 'I Changes inNet Assets I'1 G ovn~m Tc*~s%

Aditles Adlvttes Totas Z004 2003 200 203 200 20M3 clw L

Rargan Fea~

Chaigs k' Se~os pc~atirxg Oats ad C~altxions

$1,00,349 5809

$862,937 93j772

$10,475,2 $10,00S2382 $11,475,645 58,699

$10,924.979 93j72 5.04%

-37.40%

L Captal WaU a Ccrluticntx 887ZB 1.333,925 L

300,000 887,S 1,633,925 -4570Yo Gara PevIenur RopeyTax Z172994 1,9G:0,196 217Z994 1,90,195 10.85%

COW Tax 348.775 29829 348,775 2M829 16.71%

Frad'ise Tax UJity Tax IrtffgMU'tj 173.241 543,939 6329 131,107 541,404 529,130 173,241 543,939 63Z298 131,107 541,404 529,130 32214%

0.47%

19.50%

LI Tctal Peveu~es 79.821

$5,897,414 158,349

$5,909.309 70,531

$10,545,827 $10,36382 150,352

$16,443,241 253.046

$16.3.388

-40.5!3%

0.47% Il RL~ic Safety

$1,977,611 2227,148 S3,25Z482 S1,977,611 2227,148

$3.2S2482 2,C5895

-3920%

7.958/%

LI Parks ad Recrain 494,500 494,500 Trairxzporado Rr~sk~ Ernrimt Eomonic ENv~rcni 644,394 629,191 699,843 569,466 419,834 644,394 629,191 699,8343 566,465 419,834 13.76%

49.87% .1 Bedjric, Mff a SmIa~

In~et o laxj-crgm deli Total E~qerrms 246,730 S5,919,417 305.205 96,607,884 9,249,50Q

$9,249,502 8,395,054

$8,396,054 9,249,502 246.730 8,395,054 305.206

$16,168,919 S 15,0)2938 10.18%

-19.42Yo 7.77%

A Irxreae (deceae) in net assets JA tbefr tranfr ($1,Cr2ZC03) (938575) $1,29,325 S205625 S274,322 $1,363,450 -79.88%

Tratisfers 955.329 911,799 (955,M) (911,793)

Ircrease in net assets Ne assets 10/01M3

($6674)

S2196.027 S213,224

$1,S2803

$340,966

$8,875,293

$1,15D,=

$7,630,382

$274,322

$11,071,2B3

$1,353,45D

$9,613J185

-79.88%

1517% -I NeassetsO5304 $9216252 978o,608 $11,345.0M5 $10,97M.635 Governmental Activities S2129,353 S2195.027 335%

I The City's total net assets increased $274,322 over the previous year with an increase of

$340,996 resulting from business activities and a decrease of $(66,674) resulting from LI governmental activities.

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Major changes in revenues were caused by the following:

• Capital Grants and Contributions decreased by 33%. In fiscal year ended September 30, 2003 considerably more grants and private contributions had been awarded to renovate City parks, renovate substandard housing, and to finance infrastructure for economic development activities.

Major changes in expenses were caused by the following:

• Physical Environment expenses increased by 50%. This increase is due to higher rates charged by the new vendor providing residential waste pick-up.

Expenses and Program Revenues - Governmental Activities

$2,500,000

$2,000,000 O° $1,500,000

• Revenues (excluding 0

tax support) j $1,000,000

• Expenditures

$500,000

$0 General Transportation Economic Interest on Government Environment L.T. Debt Programs 11 C c'

Revenue by Source - Governmental Activities Capital Grants &

rContributions

• Taxes Operating Grants & 13%

Contributions 1%

• Intergovernmental Interest Earnings I o Charges for Services 0%

Transfers o Miscellaneous 14% Taxes 47%

Miscellaneous ITransfers 1%

Charges for

• Interest Earnings Services 15% I S Operating Grants &

Contributions Intergovernmental a 9% U Capital Grants & Contributions Business-Type Activities Business-type activities increased the City's net assets by $340,996. A key element for this increase is an increase in the Charges for Services revenue collected through the Electric, Water, Wastewater, and Mosquito Control utilities due to a growing customer base.

• The Electric Utility of the City operates at 7.2/12.47kV. The City purchases power from Gainesville Regional Utilities (GRU) at two different locations. The majority of the customers are supplied from the Alachua No.1 Substation which is connected to GRU's 138 kV transmission system. The second point of services, identified as the Hague Point of Service, exists as a distribution source supplied by GRU.

• The Water Utility obtains its water supply from the upper portion of the Florida Aquifer.

Three wells with depths of approximately 365 feet withdraw water from the Ocala limestone and discharge it into the City's distribution system. The quality of the City's water supply is such that chlorination and fluoridation are the only treatments, which the water requires prior to distribution. The system's wells range in age from 14 to 37 years old.

• Wastewater generated through the utility is collected through a gravity sewer system and pumped to the City's wastewater treatment plant. The collected wastewater is treated in an activated sludge treatment facility, which has a current capacity of 600,000 gallons per day.

The effluent from the treatment facility is chlorinated and disposed of by spray irrigation.

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Expenses and Program Revenues - Business-Type Activities

$9,000,000

$8,000,000

$7,000,000

$6,000,000

$5,000,000

$4,000,000

• Revenues

$3,000,000

• Expenditures

$2,000,000

$1,000,000

$0 Electric Water Wastew ater Mosquito Control Programs Revenue by Source - Business-Type Activities Capital Grants &

Contributions Interest Earnings 0%

0%

Miscellaneous 0%

• Charges for Services

• Miscellaneous O Interest Earnings 0 Capital Grants & Contributions Charges for Services 100%

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Fund FinancialAnalysis A The City uses fund accounting to ensure and demonstrate compliance with finance-related legal requirements.

Governmental Funds The primary purpose of the Citys governmentalfunds 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, unreservedfiund balance may serve as a useful l measure of a government's net resources, available for spending, at the end of the fiscal year.

CITYOFALACHUA RESERVED AND UNRESERVED FUND BALANCE Total %

i 913012003 913012004 Change Total fund balance S1,295,758 $1,493,457 15.30%

I Less reserved fund balance:

Debt Service $46,948 S48,039 2.30%

Other Purposes $2,953 S3,451 16.90% -11 Unreserved fund balance $1,245,857 $1,441,967 15.70%

1 As of the end of fiscal year 2004, the City's governmental funds reported combined ending fund balances of $1.49 million, an increase of $197,699 in comparison with the prior year. Of the approximately $1.49 million total fund balance, unreservedfund balance is $1.44 million and I

is available for spending (depending on fund restrictions) at the City's discretion.

Major Funds The General Fund is the only major governmental fund. -1 The General Fund is the chief operating fund of the City. The General Fund had an increase in fund balance of $4,326. The total fund balance was $1,214,080 of which $1,210,629 was unreserved. The cash balance at the end of the year was $1,072,513. As a measure of the General Fund's liquidity, it may be useful to compare both unreserved fund balance and total I

fund balance to total fund revenues. Unreserved fund balance represents 22% of total General Fund operating revenue, while total fund balance also represents 22% of that same amount.

The Government Finance Officers Association Best Practices guidelines calls for an unreserved fund balance level of 5%-15% of General Fund operating revenues. Il IIl 14

Proprietary Funds The City's proprietary fund statements provide the same type of information found in the government-wide financial statements, but in more detail. The Electric, Water, and Wastewater Funds, are reported as major funds.

The various utility system funds are used to account for the operations of the City's electric, water, wastewater, and mosquito control utilities. Each utility operates like a business, where the rates established by the City generally generate sufficient funds to pay the costs of current operations and provide for long-term asset acquisitions. Total assets as of September 30 were

$22.3 million, total liabilities were $13.1 million, and net assets were $9.2 million.

General Fund Budgetary Highlights The differences between the General Fund's original budget balances and final amended budget balances was an increase of $120,937 and was caused by the below listed amendments:

Revenues:

• $5,000 - Increase in Intergovernmental Revenue due to receipt of School Based Partnership grant.

• $83,329 - Increase in Charges for Services due to receipt of additional planning and zoning fees due to increased development in the City, receipt of traffic signal maintenance revenue, receipt of additional solid waste revenue due to an increase in residents, and receipt of revenues related to City special events (i.e., July 4th celebration).

• $32,608 - Increase in Miscellaneous Revenues due to receipts of insurance claim proceeds, private donations, COBRA reimbursements, and various refunds.

Expenditures:

• $21,419 - Increase in Public Safety activities for expenditures related to law enforcement services for vehicle maintenance and additional training.

• $97,538 - Increase in General Government activities for expenditures related to the July 4th celebration, legal advertising for the Planning division, and legal service charges.

• $1,980 - Increase in Culture and Recreation activities related to capital equipment purchase of a golf cart.

15

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Capital Asset and Debt Administration j The City's investment in capital assets for its governmental and business-type activities as of September 30, 2004 totals $17.0 million (net of accumulated depreciation) and includes land, buildings, improvements other than buildings, equipment, infrastructure, and construction in progress.

Major capital asset events during the current fiscal year include the purchase of machinery and equipment (vehicles, PCs, transformers, etc.) and construction planning expenses (wastewater I

treatment expansion). i Additional information on the City's capital assets can be found in Note F on page 45 of this report.

Long-Term Debt I At the end of fiscal year 2004, the City had total long-term debt outstanding of $15.5 million.

The City's debt represents bonds or notes secured by specific revenue sources (i.e., revenue J

bonds/notes).

CITY OF ALACHUA OUTSTANDING DEBT GENERAL OBLIGATION AND REVENUE BONDS/NOTES a General Obligation 2004

$0 2003 50 Total %

Change 0%

I Revenue Bonds $15,041.657 $15,615,692 -3.70%

Revenue Notes 5475.775 $535,505 -11.20%

TOTAL $15.517.432 516.151.197 -3.90%

I The City's outstanding debt decreased by $633,765 during fiscal year 2004. This decrease was due to scheduled principal and interest payments. Additional information on the Citys debt can be found in Note G on pages 46-51 of this report.

I Economic Factors and Next Year's Budgets and Rates

• The unemployment rate for the Gainesville MSA that includes the City of Alachua at September 30, 2004 was 2.7%, same as previous fiscal year.

. The citywide taxable value of property increased to $435 million, representing a I

growth of 10%.

• Population increased approximately 4% from the prior year to an estimate of 6,700 at September 30, 2004. -3 16

During the current fiscal year, unreserved fund balance in the General Fund slightly decreased to $993,416 from $1.2 million. The ad valorem tax rate for the General Fund was not increased for the 2005 fiscal year budget and is 5.700 Mills.

Requests for Information This financial report is designed to present users with a general overview of the City's finances and to demonstrate the City's accountability. If you have questions concerning any of the information provided in this report or need additional financial information, contact the Finance Department, P.O. Box 9, Alachua, Florida 32615.

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BASIC FINANCIAL STATEMENTS 19

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CITY OF ALACHUA, FLORIDA STATEMENT OF NET ASSETS September 30,2004 Primary Government Governmental Business-Type Activities Activities Total ASSETS Current assets:

Pooled cash and cash equivalents $ 1,548,105 5,025,469 6,573,574 Accounts receivable, net of allowance 149,332 1,434,741 1,584,073 Internal balances ( 48,556) 48,556 Due from other governments 97,552 97,552 Restricted assets:

Pooled cash and cash equivalents 3,451 2,198,612 2,202,063 Investments 319,704 319,704 Inventories 233,688 233,688 Prepaid Expenses 53,733 1,695 55,428 Bond issue cost 157,082 157,082 Capital assets:

Land 214,980 2,233,523 2,448,503 Buildings 1,426,154 6,700,566 8,126,720 Improvements other than buildings 1,193,470 2,233,519 3,426,989 Machinery and equipment 1,339,199 11,167,610 12,506,809 Construction in progress 62,064 62,064 Infrastructure 4,954,246 4,954,246 Accumulated depreciation ( 4,969,973) ( 9,544,141) (14,514,114)

Total assets $ 5,961,693 22,272,688 28,234,381 LIABILITIES Current liabilities:

Account payable and other current liabilities $ 247,092 766,911 1,014,003 Accrued interest payable 41,536 41,536 Current liabilities payable from restricted assets:

Customer deposits 401,064 401,064

- Accrued interest payable 273,549 273,549 Noncurrent liabilities payable from restricted assets:

Deferred credit - CR-3 decommissioning costs 21,532 319,704 341,236 Other noncurrent liabilities:

Due within one year 178,970 605,999 784,969 Due in more than one year 3,343,210 10,689,209 14,032,419 Total liabilities 3,832,340 13,056,436 16,888,776 NET ASSETS Invested in capital assets, net of related debt 1,026,647 1,641,488 2,668,135 Restricted for:

Debt service 48,039 918,000 966,039 Other purposes 3,451 3,451 Unrestricted 1,051,216 6,656,764 7,707,980 Total net assets 2,129,353 9,216,252 11,345,605 Total liabilities and net assets S 5,961,693 22,272,688 28,234,381 The notes to the financial statements are an integral part of this statement.

21

CITY OF ALACHUA, FLORIDA STATEMENT OF ACTIVITIES For the Year Ended September 30, 2004 I1 Program Revenues J.i Operating Capital Charges for Grants and Grants and Functions/Programs Expenses Services Contributions Contributions .1 Governmental activities:

General government Public safety

$ 1,977,611 2,227,148 872,927 127,422 58,699 887,298 I Physical environment 629,191 --

Transportation 644,394 --

Economic environment 699,843 --

Parks and recreation 494,500 --

Interest on long-term debt 246,730 --

Total governmental activities 6,919,417 1,000,349 58,699  : 887,298 Business-type activities:

Electric 7,499,525 8,570,033 Water and sewer 1,749,977 1,905,263 Total business-type activities Total 9,249,502

$ 16,168,919 10,475,296 11,475,645 58,699 887,298 Il General revenues:

Property taxes J

Communications services taxes Franchise taxes Utility taxes Local option gas tax Intergovernmental revenue Unrestricted investment earnings A Miscellaneous Transfers Total general revenues and transfers Change in net assets Net assets - beginning

[I 11 Net assets - ending III The notes to the financial statements are an integral part of this statement.

I1 22

'.1

Net (Expense) Revenue and Changes in Net Assets Primary Government Governmental Business-Type Activities Activities Total

( 158,687) -- ( 158,687)

( 2,099,726) - ( 2,099,726)

( 629,191) -- ( 629,191)

( 644,394) ( 644,394)

( 699,843) -- ( 699,843)

( 494,500) ( 494,500)

( 246,730) -- ( 246,730)

( 4,973,071) -- ( 4,973,071)

- 1,070,508 1,070,508

- 155,286 155,286

_- 1,225,794 1,225,794

( 4,973,071) 1,225,794 ( 3,747,277) 2,172,994 -- 2,172,994 214,259 -- 214,259 173,241 -- 173,241 543,939 543,939 134,516 -- 134,516 632,298 -- 632,298 27,886 29,534 57,420 51,935 40,997 92,932 955,329 ( 955,329) 4,906,397 ( 884,798) 4,021,599

( 66,674) 340,996 274,322 2,196,027 8,875,256 11,071,283 S 2,129,353 9,216,252 S 11,345,605 23

I i CITY OF ALACHUA, FLORIDA L BALANCE SHEET GOVERNMENTAL FUNDS September 30, 2004 I Nonmajor Total Governmental Governmental J General Funds Funds ASSETS Cash and cash equivalents $ 1,072,513 475,592 1,548,105 Accounts receivable 149,332 -- 149,332 Due from other funds 304,661 33,767 338,428 Due from other governments 97,552 -- 97,552 Prepaids 53,338 395 53,733 Restricted assets - Cash and cash equivalents 3,451 -- 3,451

[I TOTAL ASSETS S 1,680,847 509,754 2,190,601 LIABILITIES AND FUND BALANCES

~1 Liabilities:

Account payable Interest payable S 225,140 2,566 41,536 227,706 41,536 I!

Other accrued expenses 19,386 -- 19,386 Deferred revenue Due to other funds 21,532 200,709 186,275

-- 21,532 386,984 1f Total liabilities 466,767 230,377 697,144 Fund balances:

Reserved for:

Debt service 48,039 48,039 I

Other purposes 3,451 -- 3,451 Unreserved reported in special revenue funds 232,448 232,448 Unreserved reported in capital projects funds Unreserved, undesignated 1,210,629 1,110) (

1,110) 1,210,629 -1 Total fund balances 1,214,080 279,377 1,493,457 TOTAL LIABILITIES AND FUND BALANCES

-1

$ 1,680,847 509,754 2,190,601

~1 The notes to the financial statements are an integral part of this statement

.1 24

CITY OF ALACHUA, FLORIDA RECONCILIATION OF TOTAL GOVERNMENT FUND BALANCE SHEET TO NET ASSETS OF GOVERNMENTAL ACTIVITIES September 30, 2004 Total fund balance per this statement S 1,493,457 Amounts reported for governmental activities in the statement of net assets are different because:

Capital assets used in governmental activities are not financial resources and, therefore, are not reported in the funds. 4,158,076 Long-term liabilities, including bonds payable, are not due and payable in the current period and, therefore, are not reported in the funds. ( 3,522,180)

Net assets of governmental activities $ 2,129,353 The notes to the financial statements are an integral part of this statement.

25

CITY OF ALACHUA, FLORIDA STATEMENT OF REVENUES, EXPENDITURES, AND CHANGES IN FUND BALANCES GOVERNMENTAL FUNDS For The Year Ended September 30, 2004 1I Nonnmajor Total General Governmental Governmental Fund Funds Funds Revenues II Taxes S 3,238,949 3,238,949 Licenses and permits Fines and forfeitures 195,072 127,422 195,072 127,422 ill Intergovernmental revenues 1,271,852 306,443 1,578,295 Charges for services Interest 677,855 26,513 1,373 677,855 27,886 ii Miscellaneous 51,935 51,935 Total revenues 5,589,598 307,816 5,897,414 ill Expenditures I.

General government 1,947,913 1,947,913 Public safety 2,101,750 2,101,750 Physical environment 616,769 616,769 Transportation 469,639 469,639 Economic environment 623,283 73,450 696,733 Parks and recreation 452,751 452,751 Debt service 369,489 369,489 Total expenditures 6,212,105 442,939 6,655,044 Deficiency of revenues under expenditures ( 622,507) ( 135,123) ( 757,630) A Other financing sources (uses)

Transfers in 923,817 328,496 1,252,313 Transfers out ( 296,984) ( 296,984)

Ii Total other financing sources (uses) 626,833 328,496 955,329 Net change in fund balances 4,326 193,373 197,699 J

Fund balances - beginning of the year 1,209,754 86,004 1,295,758 II Fund balances - end of the year S 1,214,080 279,377 1,493,457 iS The notes to the financial statements are an integral part of this statement.

26 Ii

CITY OF ALACHUA, FLORIDA RECONCILIATION OF THE STATEMENT OF REVENUES, EXPENDITURES, AND CHANGES IN FUND BALANCES OF GOVERNMENTAL FUNDS TO THE STATEMENT OF ACTIVITIES For The Year Ended September 30, 2004 Amounts reported for governmental activities in the statement of activities are different because:

Net change in fund balance - total governmental funds S 197,699 Governmental funds report capital outlays as expenditures. However, in the statement of activities the cost of those assets is allocated over their estimated useful lives and reported as depreciation expense. This is the amount by which depreciation exceeded capital outlays in the current period. (359,076)

The issuance of long-term debt (e.g., bonds, leases) provides current financial resources to governmental funds, while the repayment of the principal of long-term debt consumes the current financial resources of governmental funds.

Neither transaction, however, has any effect on net assets. Also, governmental funds report the effect of issuance costs, premiums, discounts, and similar items when debt is first issued, whereas these amounts are deferred and amortized in the statement of activities.

This amount is the net effect of these differences in the treatment of long-term debt and related items. 94,703 Change in net assets of governmental activities $ (66,674)

The notes to the financial statements are an integral part of this statement.

27

__ _ I !1E CITY OF ALACHUA, FLORIDA STATEMENT OF NET ASSETS PROPRIETARY FUNDS September 30, 2004 Business-Type Activities-Enterprise Funds JI Nonmajor Business-Type ASSETS Major Funds Waste Fund Mosquito Total Enterprise Activities Internal I

Electric Water Water Control Funds Service Fund Current assets:

Cash and cash equivalents S 3,730,707 545,447 628,155 48,922 4,953,231 72,238 D

Receivables 1,253,310 63,000 116,179 2,252 1,434,741 Prepaids Due from other funds 1,695 16,912 166,942 15,051 1,695 198,905 --

Inventories 214,431 19,257 __ -- 233,688 --

Total current assets 5,200,143 644,616 911,276 66,225 6,822,260 72,238 A

Noncurrent assets:

Restricted assets:

Cash and cash equivalents 1,399,897 173,997 624,718 -- 2,198,612 Investments 319,704 _ _- 319.704 Total restricted assets 1,719,601 173,997 624,718 -- 2,518,316

'A Capital assets:

Property, plant and equipment 8,049,950 5,103,006 9,134,005 7,200 22,294,161 41,058 Construction in progress 62,064 -- 62,064 Less accumulated depreciation ( 3,919,829) ( 2,467,474) ( 3,133,518) ( 2,376) ( 9,523,197) ( 20,945)

Net capital assets 4,130,121 2,635,532 6,062,551 4,824 12,833,028 20,113 LU Other assets:

Bond issue costs 108,023 7,825 41,234 -- 157.082 --

A I

Li3 TOTAL ASSETS $ 11,157,888 3,461,970 7,639,779 71,049 22,330,686 92,351 L3 The notes to the financial statements are an integral part of this statement 28 1i

CITY OF ALACHUA, FLORIDA STATEMENT OF NET ASSETS PROPRIETARY FUNDS September 30, 2004 Business-Type Activities-Enterprise Funds Nonmajor Business-Type Major Funds Fund Total Activities LIABILITIES AND NET ASSETS Waste Mosquito Enterprise Internal Electric Water Water Control Funds Service Fund Current liabilities:

Accounts payable S 564,812 62,690 58,130 - 685,632 8,507 Accrued expenses 63,083 2,637 2,635 - 68,355 4,417 Due to other funds 31,638 30,770 72,890 - 135,298 15,051 Accrued compensated absences 38,403 12,009 15,624 - 66,036 16,115 Total current liabilities 697,936 108,106 149,279 _ 955,321 44,090 Current liabilities payable from restricted assets:

Accrued interest 147,987 36,530 89,032 - 273,549 --

Current portion of long-term debt 307,187 46,732 252,080 - 605,999 --

Customer deposits 313,429 45,006 42,629 - 401.064 _ -

Total current restricted liabilities 768,603 128,268 383,741 - 1,280,612 Noncurrent liabilities payable from:

restricted assets:

Deferred credit - CR-3 decommissioning costs 319,704 _319,704 Other noncurrent liabilities:

Deferred powver costs 1,404 - - - 1,404 Bonds payable 6,267,575 1,221.817 3.116,262 -- 10,605,654 --

Total noncurrent liabilities 6,588,683 1.221.817 3,116,262 - 10,926,762 -

TOTAL LIABILITIES 8,055,222 1,458,191 3,649,282 - 13,162,695 44,090 Net assets:

Investment in capital assets, net of related debt ( 2,444,641) 1,366,983 2,694,209 4,824 1,621,375 20,113 Restricted for:

Debt service 631,294 45,729 240,977 - 918,000 Unrestricted 4,916.013 591,067 1,055,311 66,225 6,628.616 28,148 Total net assets 3.102,666 2,003,779 3.990,497 71.049 9.167,991 48,261 TOTALLIABILITIESANDNETASSETS S 11.157.888 3.461.970 7,639,779 71.049 22,330,686 92.351

= ~= ~~ ~

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CITY OF ALACHUA, FLORIDA STATEMENT OF REVENUES, EXPENSES, AND CHANGES IN FUND NET ASSETS PROPRIETARY FUNDS Year Ended September 30, 2004 Business-type Activities-Enterprise Funds Nonmajor Business-type Major Funds Fund Total Activities Waste Mosquito Enterprise Internal Electric Water Water Control Funds Service Fund Operating revenues:

Charges for services 5 8,570,033 826,212 1,103,248 39,182 10,538,675 Interfund charges _ *- *- *- *- 301,773 Total operating revenues 8,570,033 826,212 1,103,248 39,182 10,538,675 301,773 Operating expenses:

Electric power expenses:

Nuclear power generation and transmission 125,311 .- _ 125,311 _

Purchased power and other 5,658,782 -- - 5,658,782 _

Personal services 543,951 210,239 223,520 977,710 273,218 Contractual services 4,585 51,060 79,663 135,308 4,540 Supplies 39,679 33,369 58,114 9,744 140,906 45,058 Repairs and maintenance 34,728 27,102 50,943 100 112,873 2,026 Billing and administration 284,383 45,397 12,071 -- 341,851 -

Depreciation 241,947 153,090 274,020 720 669,777 4,105 Other expense 192,849 82,236 117,495 331 392,911 36,205 Total operating expenses 7,126,215 602,493 815,826 10,895 8,555,429 365,152 Operating income 1,443,818 223,719 287,422 28,287 1,983,246 ( 63,379)

Nonoperating revenues (expenses):

Interest income 29,236 298 -- *- 29,534 Interest and fiscal charges ( 333,298) ( 73,939) ( 210,881) -- ( 618,118)

Amortization of bond issue costs ( 40,012) ( 7,192) ( 28,751) -- ( 75,955)

Miscellaneous 36,306 1,314 3,377 .. 40,997 Total nonoperating revenues (expenses) ( 307,768 ( 79,519) ( 236,255) -- ( 623,542) --

Income before transfers 1,136,050 144,200 51,167 28,287 1,359,704 ( 63,379)

Transfers (out) ( 888,631) -- ( 66,698) - ( 955,329) --

Net income 247,419 144,200 ( 15,531) 28,287 404,375 ( 63,379)

I Total net assets - beginning E of year 2,855,247 1,859,579 4,006,028 42,762 8,763,616 111,640 Total net assets - end of year S 3,102,666 2,003,779 3,990,497 71,049 9,167,991 48,261 The notes to the financial statements are an integral part of this statement.

31

I -~

CITY OF ALACHUA, FLORIDA STATEMENT OF CASH FLOWS PROPRIETARY FUNDS il For The Year Ended September 30, 2004 I

Business-Type Activities-Enterprise Funds Nonmajor Business-Type I

Major Funds Fund Total Activities Electric Water Waste Water Mosquito Control Enterprise Funds Internal Service Fund Ji CASH FLOWVS FROM OPERATING ACTIVITIES Receipts from customers S 8,510,647 834,981 1,107,397 38,703 10,491,728 301,773 ii' Payments to suppliers for goods and services ( 6,685,027) ( 210,316) ( 282,554) ( 10,175) ( 7,188,072) ( 88,997)

Payments to employees for services 530,922) ( 206,597) ( 221,526) - ( 959,045) ( 270,624)

Net cash (used) provided by operating activities 1,294,698 418,068 603,317 28,528 2,344,611 ( 57,848) i1 CASII FLOWVS FROM NONCAPITAL FINANCING ACTIVITIES Operating transfers out 888,631) - ( 66,698) - ( 955,329) -

ii' I

Net cash used by noncapital financing activities 888,631) - ( 66,698) - ( 955,329) -

CASH FLOWS FROM CAPITAL AND RELATED FINANCING ACTIVITIES Acquisition and construction of fixed assets ( 219,438) ( 103,124) ( 29,334) - ( 351,896) - i Miscellaneous 36,306 1,314 3,377 - 40,997_ -

Bond and loan principal payments ( 248,900) - ( 223,604) - ( 472,504) --

Bond and loan interest payments ( 219,935) ( 106,549) ( 157,273) -- ( 483,757)

Net cash used by capital and related financing activities ( 651,967) ( 208,359) ( 406,834) -- ( 1,267,160) -

CASII FLOWS FROM INVESTING ACTIVITIES I

Purchase of pooled investments 23,265) -- - -- ( 23,265) -

Interest on pooled cash and investments Net cash provided by investing activities 29,236 5,971 298 29,534 5,971

- Ii Net increase (decrease) in cash and cash equivalents Cash and cash equivalents at beginning of year 239,929) 5,370,533 210,007 509,437 129,785 1,123,088 28,528 20,394 128,391 7.023,452

( 57,848) 130,086

.t1 Cash and cash equivalents at end of year S 5,130,604 719,444 1,252,873 48,922 7,151,843 72,238 Ii

-1 I

I The notes to the financial statements are an integral part of this statement.

32 It IS

CITY OF ALACHUA, FLORIDA STATEMENT OF CASH FLOWS PROPRIETARY FUNDS (CONTINUED)

For The Year Ended September 30, 2004 RECONCILIATION OF OPERATING INCOME TO NET CASH PROVIDED BY OPERATING ACTIVITIES Operating income S 1,443,818 223,719 287,422 28,287 1,983,246 ( 63,379)

Adjustments to reconcile operating income to net cash provided by operating activities:

Depreciation expense 241,947 153,090 274,020 720 669,777 4,105 (Increase) decrease in accounts receivable ( 70,923) 2,924 ( 381) ( 479) ( 68,859)

(Increase) decrease in due from other funds -( 463) 162 - ( 301)

Decrease in due from other governments 35,418 - 35,418 Decrease in inventories and other current assets 33,286 3,955 - 37,241 Increase (decrease) in accounts payable and accrued liabilities ( 413,414) 25,356 35,570 - ( 352,488) ( 1,168)

Increase in deferred revenue 14,375) - ( 14,375) -

Increase in customer deposits 25,912 5,845 4,530 - 36,287 -

Increase in accrued compensated absences 13,029 3,642 1,994 - 18,665 2,594 S 1,294,698 418,068 603,317 28,528 2,344,611 ( 57,848)

Detail of cash at end of year:

Cash and cash equivalents - current S 3,730,707 545,447 628,155 48,922 4,953,231 72,238 Cash and cash equivalents - restricted 1,399,897 173,997 624,718 - 2,198,612 -.

S 5,130,604 719,444 1,252,873 48,922 7,151,843 72,238 33

- - I.- ILL-CITY OF ALACHUA, FLORIDA STATEMENT OF FIDUCIARY NET ASSETS i1 FIDUCIARY FUNDS September 30, 2004 Ii Pension Trust ASSETS Funds I

Investments $ 1,272,976 I1 LIABILITIES Other liabilities ii' 800 NET ASSETS JI Net assets held in trust for pension benefits I

$ 1,272,176 I

• I

-11 JI I

The notes to the financial statements are an integral part of this statement.

34 I

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CITY OF ALACHUA, FLORIDA STATEMENT OF CHANGES IN FIDUCIARY NET ASSETS FIDUCIARY FUNDS September 30, 2004 Pension Trust Funds Additions:

Contributions:

Employer $ 212,608 Plan members 5,028 State of Florida 51,784 Total contributions 269,420 Investment earnings: 73,002 Total additions 342,422 Deductions:

Benefits 34,656 Administrative fees 1,618 Total deductions 36,274 Change in net assets 306,148 Net assets held in trust for pension benefits:

Net assets - beginning of the year 966,028 Net assets - end of the year $ 1,272,176 The notes to the financial statements are an integral part of this statement 35

1 36___

_ __ _ _ II

i CITY OF ALACHUA, FLORIDA NOTES TO FINANCIAL STATEMENTS NOTE A -

SUMMARY

OF SIGNIFICANT ACCOUNTING POLICIES The financial statements of the City of Alachua, Florida (City) have been prepared in conformity with accounting principles generally accepted (GAAP) in the United States of America as applied to governmental units. The Governmental Accounting Standards Board (GASB) is the accepted standard setting body for establishing governmental accounting and financial reporting principles.

1. The Financial Reporting Entity i The City is a political subdivision of the State of Florida, established in 1908 under the legal authority of Chapter 165, F.S. and is located in Alachua County. The legislative branch of the City is composed of a five-member elected commission. The City Commission is governed by the City Charter and by state and local laws and regulations. The City Commission is responsible for the establishment and adoption of policy. The execution of such policy is the responsibility of the Commission appointed City Manager.

The City's major operations include various utility services - electric, water, and wastewater as well as police protection, road and street maintenance, parks, recreation, and other general government services. The City contracts with Alachua County for the provision of fire service at a fixed cost to the City which is renegotiated annually. The City leases the fire station and equipment to Alachua County at no cost. Sanitation services are provided by a private company, but billed by the City to its customers. The City retains an administrative fee on sanitation services.

In accordance with the Codification of Governmental Accounting and Financial Reporting Standards, the accompanying financial statements include all funds for which the City is financially accountable. The City has also considered all other potential organizations for which the nature and significance of their relationships with the City are such that exclusion would cause the City's financial statements to be misleading or incomplete.

GASB has set forth criteria to be considered in determining financial accountability. These criteria include appointing a majority of an organization's governing body and (I) the ability of the City to impose its will on that

- organization or (2) the potential for that organization to provide specific benefits to or impose specific financial burdens on the City. Other considerations are whether the organization is legally separate, whether the City holds the corporate powers of the organization, and whether there is fiscal dependency by the organization on the City.

Based on these criteria, there are no other organizations or agencies that should be included in these basic financial statements.

Community Redevelopment Agencv The Community Redevelopment Agency (the Agency) was created by the City Commission in 1982. In evaluating this potential component unit, it was determined that the Agency is not a separate legal entity as it generally cannot transact business in its own name and, therefore, should be included as part of the primary government for reporting purposes. The Agency is blended in the basic financial statements of the City as a nonmajor governmental fund.

Public Finance Authority For Affordable Housing

- The Public Finance Authority For Affordable Housing (the Authority) was created by the City Commission in 1992. The Authority is a separate legal entity capable of suing and being sued, and able to purchase property in its own name. By charter, the Authority's Board is composed of the City Commission and the City Commission has oversight over all financial activities. Accordingly, the Authority is a component unit of the City. However, there (Continued) 37

I - L-CITY OF ALACHUA, FLORIDA NOTES TO FINANCIAL STATEMENTS J

have been no financial transactions by the Authority during 2004, or since its creation; therefore, no amounts related to the Authority are reported in the accompanying basic financial statements.

2. Governiment-WVide and Fund Financial Statements The government-wide financial statements (i.e., the statement of net assets and the statement of activities) report information on all the nonfiduciary activities of the City. For the most part, the effect of interfund activity has ID been removed from these 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.

The statement of activities demonstrates the degree to which the direct expenses of a given function or segment is offset by program revenues. Direct expenses are those that are clearly identifiable with a specific function or segment. Programrevenues 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 X other items not properly included among program revenues are reported instead as generalrevenues.

Separate financial statements are provided for governmental funds and fiduciary funds, even though the latter are excluded from the government-wide financial statements. Major individual governmental funds and the major individual enterprise fund are reported as separate columns in the fund financial statements.

3. Measurement Focus, Basis of Accounting, and Financial Statement Presentation The government-wide financial statements are reported using the economic resources ineasureimentfocus 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.

Governmental fund financial statements are reported using the currentfinancialresources ineasurementfocusand the inodified accrual basis of accounting. Revenues are recognized as soon as they are both measurable and available. Revenues are considered to be available when they are collectible within the current period or soon enough thereafter to pay liabilities of the current period. For this purpose, the City considers property tax revenues i

and all other governmental fund revenues to be available if they are collected within 60 days of the end of the current fiscal period. Expenditures generally are recorded when a liability is incurred, as under accrual accounting. However, debt service expenditures, as well as expenditures related to compensated absences and claims and judgments, are recorded only when payment is due.

In applying the susceptible to accrual concept to intergovernmental revenues, the legal and contractual requirements of the numerous individual programs are used as guidance. There are, however, essentially two types of these revenues. In one, such as in grants and similar items, monies must be expended on the specific purpose or project before any amounts will be paid to the City; therefore, revenues are recognized based upon the expenditures recorded and the availability criteria. In the other, monies are virtually unrestricted as to purpose of expenditure, and are usually revocable only for failure to comply with prescribed requirements. These resources are reflected as revenues at the time of receipt, or earlier if the susceptible to accrual criteria are met.

Licenses and permits, fines and forfeitures, charges for sales and services (other than utility), and miscellaneous revenues are generally recorded as revenue when received in cash, because they are generally not measurable (Continued) 38

CITY OF ALACHUA, FLORIDA NOTES TO FINANCIAL STATEMENTS until actually received. Utility services, investment earnings, franchise fees and utility taxes are recorded as earned, since they are measurable and available.

Property taxes are recognized as revenue at the time an enforceable legal claim is established. This is determined to occur November I of each year. The assessment roll is validated July I and the millage resolution is approved by September 30. The City's property tax becomes a lien on October l and the tax is levied by Alachua County each November 1 for real and personal property located in the City. Property taxes are due before April 1 with the maximum discount available if payment is made on or before November 30. If payment remains delinquent, a tax certificate for the full amount of any unpaid taxes is sold no later than June 1. Under this arrangement, there are

- no property tax receivables at the end of the fiscal year on September 30.

The government reports the following major governmental fund:

The generalfund is the government's primary operating fund. It accounts for all financial resources of the general government, except those required to be accounted for in another fund.

The government reports the following major proprietary funds:

The electricffund accounts for the activities associated with the City's electric utility service.

The waterfund accounts for the activities associated with the City's water distribution system.

The wastewvater fund accounts for the activities associated with the City's wastewater treatment plant, wastewater pumping stations, and collection system.

L Additionally, the government reports the following fund types:

Two pension trustfunds - one that accounts for the activities of the City's police pension plan and one that accounts for the general employees' plan. These funds accumulate resources for pension benefit payments to qualified pension employees.

Private-sector standards 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. Govermnents also have the option of following subsequent private-sector guidance for their business-type activities and enterprise funds, subject to this same limitation. The government 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. Exceptions to this general rule are payments-in-lieu of taxes and other charges between the government's water and sewer function and various other functions of the government. Elimination of these charges would distort the direct costs and program revenues reported for the various functions concerned.

Amounts reported as program revenues include (1) charges to customers or applicants for goods, services, or privileges provided, (2) operating grants and contributions, and (3) capital grants and contributions, including special assessments. Internally dedicated resources are reported as general revenues rather than as program revenues. Likewise, general revenues include all taxes.

Proprietary funds distinguish operatingrevenues and expenses from nonoperatingitems. Operating revenues and expenses generally result from providing services and producing and delivering goods in connection with a (Continued) 39

I lIII CITY OF ALACHUA, FLORIDA II NOTES TO FINANCIAL STATEMENTS proprietary fund's principal ongoing operations. The principal operating revenues of the City's enterprise fund are charges to customers for sales and services. The City's enterprise fund also recognizes as operating revenue the portion of tap fees intended to recover the cost of connecting new customers to the system. Operating expenses -

for the enterprise fund include the cost of sales and services, administrative expenses, and depreciation on capital assets. All revenues and expenses not meeting this definition are reported as nonoperating revenues and expenses.

When both restricted and unrestricted resources are available for use, it is the government's policy to use restricted resources first, then unrestricted resources as they are needed.

4. Assets, Liabilities, and Net Assets or Equity a) Deposits and investments The City maintains a cash pool that is available for use by all funds. Each fund's portion of this pool is presented on the statement of net assets as "Pooled Cash and Cash Equivalents." Interest income earned as a result of pooling is distributed monthly to the appropriate funds based on average daily balances. In addition, cash and cash equivalents and investments are separately held by several of the City's funds.

The government's cash and cash equivalents are considered to be cash on hand, demand deposits, and highly liquid instruments with original maturities of three months or less from the date of acquisition.

Investments are held only in the proprietary funds and pension trust fund and consist of marketable securities reported at fair value. Securities traded on a national or international exchange are valued at the last reported sales quote at current exchange rates. Investments that do not have an established market are reported at estimated fair value based on market indicators regarded as measures of equity or fixed income performance results. The City does not have a significant amount of investments valued at other than quoted market prices.

Florida Statutes require state and local governmental units to deposit monies with financial institutions classified as "Qualified Public Depositories," a multiple financial institution pool whereby groups of securities pledged by the various financial institutions provide common collateral for their deposits of public funds. This pool is provided as additional insurance to the federal depository insurance and allows for additional assessments against the member institutions providing full insurance for public deposits.

The City had deposits only with qualifying institutions as of September 30, 2004, or with banks in which ID depository insurance was sufficient to cover the deposit balance.

All monies collected by the City are required to be deposited in accordance with the laws of the State of Florida. Florida Statutes authorize the City to invest in the following:

• Direct obligations of, or obligations guaranteed by, the U.S. Government;

• Interest-bearing time deposits or savings accounts in qualified institutions;

• Obligations of the Federal Farm Credit Banks;

• Obligations of the Federal National Mortgage Association; The Local Government Surplus Funds Trust Fund.

b) Receivable and payables I Outstanding balances between funds are reported as "due to/from other funds." Any residual balances outstanding between the governmental activities and business-type activities are reported in the government-wide financial statements as "internal balances."

(Continued) 40

CITY OF ALACHUA, FLORIDA NOTES TO FINANCIAL STATEMENTS All receivables are shown net of an allowance for uncollectibles.

c) Inventory Inventories relating to governmental activities are recorded as expenditures when purchased. For business-type activities, utility supplies and plant inventory are valued at cost as determined by the average unit cost method. The City's portion of nuclear fuel inventory at the CR-3 nuclear generating facility is recorded at amortized cost.

d) Restricted assets Certain resources are set aside for debt repayment, customer deposits, power plant decommissioning costs, and other purposes. These resources are classified as restricted assets on the balance sheet because they are maintained in separate bank accounts and their use is limited by applicable bond covenants, ordinances, or regulations.

e) Capital assets Capital assets, which include property, plant, equipment, and infrastructure assets (i.e., roads, bridges, sidewalks, and similar items), are reported in the applicable governmental or business-type activities columns in the government-wide financial statements. Capital assets are defined by the government as assets with an initial, individual cost of more than $500 (amount not rounded) and an estimated useful life in excess of two years. Such assets are recorded at historical cost or estimated historical cost if purchased or constructed. Donated capital assets are recorded at estimated fair market value at the date of donation.

The costs of normal maintenance and repairs that do not add to the value of the asset or materially extend assets lives are not capitalized.

Property, plant, and equipment of the primary government are depreciated using the straight-line method over the following estimated useful lives:

Assets Years Buildings 1540 Nuclear plant and equipment 28-37 Electric distribution plant 25-50 Water plant 10-33 Public domain infrastructure 15-50 Improvements 10-15 Equipment 5-10

1) Compensated absences Accumulated unpaid vacation time, compensatory time, and sick time amounts, including the related direct and incremental salary related payments, are accrued in the enterprise funds and appear as increases in salary expenses in the proprietary financial statements. In the governmental funds, these costs are recognized when payments are made to employees or when the costs mature as a result of employee resignation or retirement. All vacation, compensatory, and sick pay is accrued when incurred in the government-wide financial statements.

(Continued) 41

L- Ul-CITY OF ALACHUA, FLORIDA NOTES TO FINANCIAL STATEMENTS g) Long-term obligations In the government-wide financial statements, long-term debt and other long-term obligations are reported as liabilities in the applicable governmental activities and business-type activities. Bond premiums and discounts, as well as issuance costs, are deferred and amortized over the life of the bonds using the effective interest method. Bonds payable are reported net of the applicable bond premium or discount.

Bond issuance costs are reported as deferred charges and amortized over the term of the related debt.

In the fund financial statements, governmental fund types recognize bond premiums and discounts, as well as bond issuance costs, during the current period. The face amount of debt issued is reported as other I

financing sources while discounts on debt issuances are reported as other financing uses. Issuance costs, whether or not withheld from the actual debt proceeds received, are reported as debt service expenditures.

Ii) 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.

5. Accounting Estimates The preparation of financial statements in conformity with accounting principles generally accepted in the United States of America as applied to governmental units requires management to make estimates and assumptions that I

affect the reported amounts of assets and liabilities and disclosure of contingent assets and liabilities at the date of the financial statements and the reported amounts of revenues and expenses during the reporting period. Actual results could differ from the estimates.

NOTE B - STEWVARDSIIIP, COMPLIANCE, AND ACCOUNTABILITY i

1. Budgetary Information [

The City's procedures in preparing and adopting the annual budget are as follows:

• The City Manager is responsible for preparing a proposed operating budget for the upcoming year I prior to September 30 that includes estimated revenues, proposed expenditures, and other financing sources and uses.

• Public hearings are held to obtain taxpayer comments and suggestions. The budget is enacted through passage of a resolution, which sets spending limits by department.

I

• The City Manager is authorized to transfer budgeted amounts within any department in any fund, but may not revise total departmental expenditures without the approval of the City Commission.

• Budgets are adopted on a basis consistent with generally accepted accounting principles.

Appropriations lapse at the end of the year. Encumbrances are not recorded.

2. Excess of Expenditures Over Appropriations For the year ended September 30, 2004, expenditures did not exceed appropriation in any department (the legal level of budgetary control) of the general fund, special revenue funds, or capital projects fund.

(Continued) 1 42

CITY OF ALACHUA, FLORIDA NOTES TO FINANCIAL STATEMENTS

3. Deficit Fund Equity At September 30, 2004, the following funds had a deficit balance.

Fund Type Deficit Hitchcock Grant Nonmajor Governmental (1,110)

NOTE C - RECONCILIATION OF GOVERNMENT-WIDE AND FUND FINANCIAL STATEMENTS

1. Explanation of Certain Differences Betwveen the Governmental Fund Balance Sheet and the Government-Wide Statement of Net Assets The governmental fund balance sheet includes reconciliation between fund balance - total governmentalfunds and net assets - governmental activities as reported in the government-wide statement of net assets. One element of that reconciliation explains that "Long-termn liabilities, including bonds payable, are not due and payable in the current period and, therefore, are not reported in the funds." The details of this $3,522,180 difference are as follows:

Notes payable $ 3,367,740 Compensated absences 154,440 Net adjustment to reducefund balance - total governmentalfunds to arrive at net assets-governmental activities s2J 3

2. Explanation of Certain Differences Betwveen the Governmental Fund Statement of Revenues, Expenditures, and Changes in Fund Balances and the Government-Wide Statement of Activities The governmental fund statement of revenues, expenditures, and changes in fund balances includes a reconciliation between net changes in fund balances - total governmentalfunds and changes in net assets of governmental activities as reported in the government-wide statement of activities. One element of that reconciliation explains that "Governmental funds report capital outlays as expenditures. However, in the statement of activities the cost of those assets is allocated over their estimated useful lives and reported as depreciation expense." The detail of this $359,076 difference is as follows:

Capital outlay $ 197,604 Disposal of capital assets (11,326)

Depreciation expense (545.354)

Net adjustment to decrease net changes infund balances-total governmentalfunds to arrive at changes in net assets ofgovernmental activities Another element of that reconciliation states that "The issuance of long-term debt (e.g., bonds, leases) provides current financial resources to governmental funds, while the repayment of the principal of long-term debt consumes the current financial resources of governmental funds. Neither transaction, however, has any effect on net assets. Also, governmental funds report the effect of issuance costs, premiums, discounts, and similar items when debt is first issued, whereas these amounts are deferred and amortized in the statement of activities." The detail of this $94,703 difference is as follows:

(Continued) 43

I- iII-CITY OF ALACHUA, FLORIDA NOTES TO FINANCIAL STATEMENTS II Principal repayments:

Payments on long-term debt S 170,941 Proceeds from the issuance of long-term debt (48,182)

Increase in liability for compensated absences (28,056)

Net adjustment to increase net changes in find balances - I total governinentalfiundsto arrive at changes in net assets of governmental activities NOTE D - INVESTMENTS I1 The carrying amount and market value of investments owned by the City at September 30, 2004, was as follows: 11 Balance Type of Investment Florida Municipal Power Agency (FMPA) CR-3 Pooled 9/30/04 .1 Investment Account Florida Municipal Pension Trust Fund Total

$ 1,272,976 319,704 l

$ 1,592,680 The FMPA account represents a 2.087% interest in an investment pool which invests primarily in mid- and long- 1 tern U.S. Government obligations. The securities in the pool are registered in the name of SunTrust, N.A., as trustee for the FMPA CR-3 participants. The Florida Municipal Pension Trust Fund is an investment pool managed by the Florida League of Cities.

NOTE E - INVENTORY Inventory related to the City's business-type activities at September 30, 2004, consists of the following:

I Balance Business-Type Activities 9/30/04 Electric utility supplies $ 111,180 Water/Wastewater supplies Nuclear fuel 19,257 79,755 Il Nuclear plant materials inventory 23,496 Total S 233,688 I 11 1

-11 (Continued) 44 1

CITY OF ALACHUA, FLORIDA NOTES TO FINANCIAL STATEMENTS NOTE F - CAPITAL ASSETS The following is a summary of changes in capital assets for the year ended September 30, 2004:

Beginning Ending Balance Additions Deletions Balance Governmental Activities Capital assets, not being depreciated:

Land $ 214,980 214,980 Total capital assets not being depreciated 214,980 214,980 Capital assets, being depreciated:

Building 1,421,071 5,083 -- 1,426,154 Improvements other than buildings 1,121,736 71,734 -- 1,193,470 Infrastructure 4,954,246 -- 4,954,246 Machinery and equipment 1,229,738 120,787 (11,326) 1,339,199 Total capital assets being depreciated 8,726,791 197,604 (11,326) 8,913,069 Less accumulated depreciation for:

Building (702,317) (35,654) (737,971)

Improvements other than buildings (808,772) (119,347) -- (928,119)

Infrastructure (2,114,867) (122,513) -- (2,237,380)

Machinery and equipment (798,663) (267,840) -- (1,066,503)

Total accumulated depreciation (4,424,619) (545,354) _ (4,969,973)

Total capital assets, being depreciated, net 4,302,172 (347,750) (11,326) 3,943,096 Governmental activities capital assets, net $ 4,517,152 (347,750) (11,326) 4,158,076 Business-Type Activities Capital assets, not being depreciated:

Land $ 2,194,550 38,973 2,233,523 Construction in progress 99,897 93,527 (131,360) 62,064 Total capital assets not being depreciated 2,294,447 132,500 (131,360) 2,295,587 Capital assets, being depreciated:

Building 6,583,647 116,919 - 6,700,566 Improvements other than buildings 2,194,546 38,973 - 2,233,519 Machinery and equipment 10,972,747 194,863 -- 11,167,610 Total capital assets being depreciated 19,750,940 350,755 -- 20,101,695 Less accumulated depreciation for:

Building (2,661,077) (202,030) -- (2,863,107)

Improvements other than buildings (948,648) (134,687) (1,083,335)

Machinery and equipment (5,260,535) (337,164) (5,597,699)

Total accumulated depreciation (8,870,260) (673,881) -- (9,544,141)

Total capital assets, being depreciated, net 10,880,680 (323,126) -- 10,557,554 Proprietary activities capital assets, net $ 13,175,127 (190,626) (131,360) 12,853,141 (Continued) 45

I iIt -

CITY OF ALACHUA, FLORIDA NOTES TO FINANCIAL STATEMENTS 1

NOTE G - LONG-TERIM LIABILITIES 1 Listed below is a summary of the City's long-term debt at September 30, 2004:

Interest Principal Final Description Rate Balance Maturity 1993 City of Arcadia Revenue Bonds 5.375% $ 775,000 2015 1995 First National Bank Note 6.43% 192,070 2010 1993 Utility Acquisition Bonds 7.0% 1,015,000 2019 2003 Utility Refunding Bonds 2.0% -4.55% 9,150,000 2020 .11 2002A Utility Refunding Bonds 6.35% 1,420,000 2008 1979 Utilities Revenue Bond 1998 State Revolving Fund Loan 2000 Sales Tax Revenue Note 5.0%

2.70%

6.00%

514,000 50,692 53,677 2019 2021 2010 il 2000 Tax Increment Road Improvement Note 6.50% 230,028 2010 2001A Section 108 Loan 3.66% to 6.67% 2,075,000 2021 2004 Caterpillar Loan 3.17% 41,965 2007 Total $ 15,517,432 Total long-term debt by activity:

1 Governmental activities $ 3,367,740 Business-type activities: III Electric 7,064,079 Water 1,375,792 Wastewater Total 3,709,821

$ 15,517,432 L

Governmental Activities 1 The following schedule summarizes the changes in the City's governmental long-term liabilities during the year ended September 30, 2004:

Balance New Balance ii' 10/1/03 Debt Principal Paid 9/30/04 City of Arcadia, Florida, Dedicated Pool Local Government Revenue Bonds, Series 1993 $ 820,000 45,000 775,000 1 Sales Tax Revenue Note, Series 1995 -

First National Bank of Alachua 218,708 26,638 192,070 Sales Tax Revenue Note, Series 2000 First National Bank of Alachua 61,503 7,826 53,677 Tax Increment Road Improvement Revenue Note, Series 2000 255,288 25,260 230,028 Section 108 Government Guaranteed Certificates, Series HUD 2001A 2,135,000 60,000 2,075,000 Caterpillar Loan, 2004 48,182 6,217 41,965 Compensated Absences 126,384 28,056 154,440 Totals $ 3,616,883 76,238 170,941 3,522,180 (Continued) 46 l1

CITY OF ALACHUA, FLORIDA NOTES TO FINANCIAL STATEMENTS NOTE G - LONG-TERM LIABILITIES (CONTINUED)

City of Arcadia, Florida- DedicatedPool Local Government Revenue Bonds, Series 1993 - On July 1, 1993, the City executed a loan agreement with the City of Arcadia, Florida (the Sponsor), and NationsBank of Florida, N.A. (the Trustee), to borrow $1,200,000 from the Sponsor's $45,455,000 Local Government Revenue Bonds, Series 1993, Dedicated Pool. The Sponsor issued the bonds on August 10, 1993, and deposited the proceeds with the Trustee to fund the pool, available to governmental entities for financing and refinancing certain qualified projects. During 1996, the Trustee was changed to Bank of New York.

The City used the proceeds to refinance the balance due on a loan from the City of Gulf Breeze, originally issued to finance street and drainage improvements. The City of Arcadia loan is evidenced by a Governmental Unit L. Note, which is payable solely from the City's local option gas tax revenues and guaranteed entitlement revenues.

Sales Tax Revenue Note, Series 1995 - On May 24, 1995, the City adopted Resolution R-95-9, authorizing the L issuance of a $400,000 Sales Tax Revenue Note, Series 1995. The note was issued at the par amount of $393,000, and used to refinance the City's outstanding FLGFA loan, plus pay note issuance and loan redemption costs.

IThe note is secured by a lien upon the pledge of the City's local government half-cent sales tax. Principal and interest are payable on the first of each month in level monthly installments for fifteen years. Interest accrues at a

fixed rate of 5.20% (based on a 360-day year) for the first five years of the note, and is reset on June 1, 2000 and L June 1, 2005, to the five-year U.S. Treasury index on those dates. The City may prepay the note in whole or in part, at any time, without penalty.

Sales Tax Revenue Note, Series 2000 - On April 4, 2000, the City issued a $85,000 Sales Tax Revenue Note, Series 2000, to finance a capital project.

L The note is secured by a lien upon the pledge of the City's local government half-cent sales tax, which is junior L and subordinate to the lien and pledge in favor of the City's outstanding Sales Tax Revenue Note, Series 1995.

Principal and interest are payable on the first of each month for the ten-year term of the note. Interest accrues at a fixed rate of 6.00%.

Tax Increment Road ImprovententRevenue Note, Series 2000- On January 8, 2001, the City issued a $300,000 Tax Increment Road Improvement Revenue Note, Series 2000, to finance improvements and renovations to Main Street within the City's Community Redevelopment District.

The note is secured by the tax increment revenues of the Community Redevelopment District. Principal and interest are payable annually on the first day of February for ten years. Interest accrues at a fixed rate of 6.50%

until February 2, 2006, at which time it is reset to the five-year U.S. Treasury index at that date. The City may prepay the note in whole or in part, at any time, without penalty.

Section 108 Government GuaranteedParticipationCertificates, Series HUD 2001A - On August 2, 2001, the City executed a loan agreement with the U.S. Department of Housing and Urban Development (the Sponsor) to borrow $2,250,000 from the Sponsor's $313,756,000 Section 108 Government Guaranteed Participation Certificates, Series HUD 2001A. The Sponsor guarantees timely payment of the notes issued by local governmental agencies. The City used the proceeds of the note to repay the outstanding balances on its Taxable Sales Tax Revenue Note, Series 1999A, and Sales Tax Revenue Note, Series 1999B and finance other costs related to economic development.

(Continued) 47

11 l _

CITY OF ALACHUA, FLORIDA NOTES TO FINANCIAL STATEMENTS The note is secured by the City's local government half-cent sales tax (subordinate to the City's Sales Tax Revenue Note, Series 1995), utility franchise fees and state revenue sharing. Principal is payable annually and interest semiannually for twenty years. Interest accrues at the certificates rates which vary from 3.66% to 6.67%

over the life of the note.

The following schedule summarizes the principal retirement of governmental long-term debt by fiscal year (excluding compensated absences): 11 1995 2000 2000 2001A Fiscal Year City of Sales Tax Sales Tax Tax Section 2004 .X Ending Arcadia Revenue Revenue Increment 108 Caterpillar Total September 30 ), Loan Note Note Note Loan Loan Principal 2005 S 50,000 28,466 8,328 26,883 65,000 5,881 184,558 I 2006 50,000 30,378 8,849 28,697 70,000 11,654 199,578 2007 55,000 32,419 9,403 30,588 75,000 12,024 214,434 2008 55,000 34,580 9,987 32,604 80,000 12,406 224,577 2009 55,000 36,920 10,616 34,732 90,000 227,268 Thereafter 510,000 29,307 6,494 76,524 1,695,000 2,317,325 Totals $ 775,000 192,070 53,677 230,028 2,075,000 41,965 3,367,740 iii Business-Type Activities The following schedule summarizes the changes in the City's business-type long-term liabilities during the year ended September 30, 2004 (excluding deferred power costs):

Balance New Principal Balance 1

10/1/03 Debt Paid 9/30/04 Utility Acquisition Bonds, Series 1993 $ 1,055,000 40,000 1,015,000 1 Utility Revenue Bond of 1979 535,000 21,000 514,000 State Revolving Fund Loan - State of Florida Department of Environmental Protection 50,692 50,692 ii Utilities Refunding Revenue Note, Series 2002A 1,840,000 -- 420,000 1,420,000 Utility Refunding Revenue Bonds, Series 2003 9,180,000 30,000 9,150,000 Totals $ 12, 511,000 12,149,692 Less deferred amount on refunding, net of accumulated amortization 938,039 ill Current portion payable from restricted assets 605,999 10,605,654 11 Utility Acquisition Bonds, Series 1993 - On October 18, 1993, the City adopted Resolution R-93-24 authorizing the issuance of $1,300,000 Utility Acquisition Bonds, Series 1993 (the 1994 bonds) to provide the necessary funds for the acquisition of the private water and wastewater systems in the Turkey Creek recreational residential community in the City. The bonds are secured by the gross revenues of the combined electric, water, and wastewater utility systems of the City, but are subordinate to the secured interests of the bondholders in the other outstanding revenue bonds of the City.

(Continued) 48

.1 ii

CITY OF ALACHUA, FLORIDA NOTES TO FINANCIAL STATEMENTS The bonds were issued without premium or discount and are payable at 7% interest, with interest payable semiannually beginning April 1, 1994, and principal payable annually beginning October 1, 1994.

UtilitiesRevenue Bond of 1979 - On August 6, 1979, the City adopted a resolution to issue the Utilities Revenue Bond of 1979. The bond was issued on December 17, 1979, to partially finance the cost of the construction of additions to the utility system.

Net utility revenues and utilities service taxes are pledged as collateral for the revenue bond which has a coupon rate of 5%. The lien on revenues by the 1979 bond is equal to the Utilities Refunding Revenue Bonds of 1986 and 1993.

L. State Revolving Fund Loan - State of Florida Department of Environmental Protection - This loan is to finance preconstruction wastewater control facility costs. The total loan available is $125,732, of which $50,692 had been drawn as of September 30, 2004. Repayment commences in June 2007, and is over a term of twenty i- years bearing a 2.70% interest rate.

Utilities Refunding Revenue Note, Series 2002A - On April 2, 2002, the City issued the $2,235,000 Utilites Refunding Refunding Note, Taxable Series 2002A with an interest rate of 6.35% to refund $2,220,000 of outstanding Utility Revenue Refunding Bonds, Series 1986 with an average interest rate of 7%.

L The refunding resulted in a difference between the reacquisition price and the net carrying amount of the old debt of $60,076. This difference, reported in the accompanying financial statements as a deduction from long-term debt, is being amortized over the life of the note. The City completed the refunding to reduce its total debt service payments over the next six years by $150,004 and to obtain an economic gain (difference between the present values of the old and new debt service payments) of $84,080.

! Utility Refunding Revenue Bonds, Series 2003 - On August 18, 2003, the City adopted Resolution R-03-31, L authorizing the issuance of $9,180,000 Utility Refunding Revenue Bonds, Series 2003. The bonds were issued at a par amount of $9,180,000 to provide the funds required to refund the City's outstanding Utility Revenue Bonds, Series 1993 and to pay certain expenses related to the issuance of the Series 2003 bonds.

Gross revenues of the system, plus utilities service taxes are pledged as collateral for the revenue bonds which will rank on a parity with the City's outstanding Utility Revenue Bonds, Series 1979, and Utilities Taxable

,_ Refunding Revenue Note, Series 2002A (the "Parity Bonds"), as to lien upon and pledge of the pledged funds.

The Series 2003 Bonds are issued in the aggregate principal amount of $9,180,000 and dated September 1, 2003.

,_ The bonds bear interest rates from 2% to 4.55% and mature on April 1 of the years 2004 through 2020. Interest is payable semi-annually on April 1 and October I of each year.

The refunding resulted in a difference between the reacquisition price and the net carrying amount of the old debt of $862,312. This difference, reported in the accompanying financial statements as a deduction from long-term debt, is being amortized over the life of the bonds. The City completed the refunding to reduce its total debt service payments over the next seventeen years by $1,181,990 and to obtain an economic gain (difference between the present values of the old and new debt service payments) of $755,917.

(Continued) 49

l Il-CITY OF ALACHUA, FLORIDA NOTES TO FINANCIAL STATEMENTS

-D The following schedule summarizes the principal retirement of the business-type debt by fiscal year:

ill Utility Refunding 11 Revenue Note Series 2002 A Utilities Utility Utility State State Refunding Fiscal Year Ending September 30, Revenue Bond of 1979 Acquisition Bonds, Series 1993 Revolving Fund Loan Revolving Fund Loan Revenue Bonds Series 2003 Totals Il 2005 2006 2007

$ 26,000 25,000 26,000 40,000 45,000 45,000 445,0( )0 475,0( )0 140,0C)0 95,000 95,000 460,000 606,000 640,000 671,000 1

2008 27,000 50,000 360,0( )0 270,000 707,000 2009 Thereafter 29,000 381,000 55,000 780,000 50,692 _ --

555,000 7,675,000 639,000 8,886,692

.4 Totals $ 514,000 1,015,000 50,692 1,420,0Ci* 9,150,000 12,149,69 l'

The following schedule summarizes the requirements to pay principal and interest on the obligations of both the City's governmental activities and business-type activities as of September 30, 2004:

Governmental Activities Business-Type Activities

[1 Fiscal Year Ending September l1 30, Principal Interest Total Principal Interest Total 2005 S 184,558 197,230 381,788 606,000 544,647 1,150,647 2006 199,578 187,925 387,503 640,000 510,215 1,150,215 2007 2008 2009 214,434 224,577 227,268 176,805 164,878 152,149 391,239 389,455 379,417 671,000 707,000 639,000 473,752 446,437 409,778 1,144,752 1,153,437 1,048,778 J

2010-2014 2015-2019 2020 997,325 935,000 385,000 533,706 288,034 38,927 1,531,031 1,223,034 423,927 3,602,692 4,394,000 890,000 1,656,228 816,163 40,495 5,258,920 5,210,163 930,495 ii'

$3,367,740 1,739,654 5,107,394 12,149,692 4,897,715 17,047,407 Defeased Bonds - At September 30, 2004, the City has outstanding bonds that have been defeased by the I1 purchase of qualifying securities in irrevocable trusts. The scheduled maturities and the interest earnings on the escrowed securities are sufficient to redeem these defeased bonds without further debt service costs to the City. I1 Both defeased bonds and the escrowed securities are, as required by accounting principles generally accepted in the United States of America, omitted from the financial statements of the City.

1 l1 (Continued) 4 50

[I

CITY OF ALACHUA, FLORIDA NOTES TO FINANCIAL STATEMENTS The following bonds have been defeased by the City and no longer are included in the accompanying financial statements:

Estimated Balance September 30, 2004 Utility Revenue and Refunding Bonds, Series 1978 $ 1,260,000 Utility Revenue and Refunding Bonds, Series 1981 2,440,000 Utility Revenue and Refunding Bonds, Series 1981 A 270,000 Total $ 3,970,000 Conduit Debt - The City may assist nongovernmental entities in the obtainment of financing for capital facilities by issuing debt on behalf of the nongovernmental entity. This debt, known as conduit debt, allows the nongovernmental entity to borrow at tax-exempt rates. The nongovernmental entity, not the City, is responsible for repayment of the conduit debt obligation. At September 30, 2004, the following conduit debt is outstanding in the City's name:

Estimated Balance September 30, 2004 Industrial Development Revenue Bonds Series 1995 $ 1,300,000 NOTE H -RESTRICTED ASSETS Restricted cash and investments at September 30, 2004, are as follows:

Governmental Business-Type Activities Activities Cash Debt Service Reserve $ 918,000 Cash with Fiscal Agent 879,548 Customer Deposits 401,064 Police Forfeiture 3,451 Total $ 3,451 2,198,612 Investments CR-3 Decommissioning $ 319,704 The CR-3 Decommissioning Account is required by state law to accumulate funds for the City's share of the decommissioning costs of the CR-3 nuclear power plant. The City's contribution to this account was $14,800 including interest during 2003. The required cash balance in the decommissioning account is offset by a deferred credit on the balance sheet.

(Continued) 51

I Iz-CITY OF ALACHUA, FLORIDA NOTES TO FINANCIAL STATEMENTS NOTE I - INTERFUND RECEIVABLES AND PAYABLES, AND TRANSFERS The following is a summary of interfund receivables and payables at September 30, 2004:

Receivable Fund Payable Fund Amount General Fund Nonmajor Governmental Funds $ 169,525 Electric Fund 31,638 Water Fund 30,770 Wastewater Fund 72,728 Water Fund Nonmajor Governmental Funds 16,750 Wastewater Fund 162 Wastewater Fund General Fund 166,942 Nonmajor Governmental Fund General Fund 33,767 Nonmaior Proprietarv Fund Internal Service Fund 15,051 Total $ 537,333 Interfund transfers:

Transfers In:

General Debt Service Total Transfers out:

General S _ 261,798 261,798 Electric 888,631 888,631 Wastewater 66,698 66,698 Total Transfers out S 888,631 328,496 1,,217,127 NOTE J - NET ASSETS - RESERVED Net assets are reserved within governmental activities and business-type activities as follows:

Business-Governmental Type Activities Activities Debt service $ 48,039 918,000 Police forfeiture 3,451 --

Total $ 51,490 918,000 (Continued) 52

CITY OF ALACHUA, FLORIDA NOTES TO FINANCIAL STATEMENTS NOTE K - SEGMENT INFORMATION - ENTERPRISE FUNDS The City maintains enterprise funds to account for the activities of its electric, water, wastewater, and mosquito control.

Segment information for the year ended September 30, 2004 is as follows:

Mosquito Control Fund Operating Revenues $ 39,182 Depreciation 720 Operating Income (Loss) 28,287 Nonoperating Revenues (Expenses) --

Operating Transfers (Out) --

Net Income (Loss) 28,287 Property, Plant, and Equipment Additions --

Net Working Capital 71,049 Total Assets 42,762 Bonds Payable -

Long-Tern Portion --

Total Net Assets 71,049 NOTE L - ELECTRIC POWVER AGREEMENTS L

City of Gainesville F The City entered into a wholesale electric service contract with the City of Gainesville, Florida, on January 21, L 1987, for the purchase of the majority of the City's electric power requirements beginning January 6, 1988. The City constructed a 138 x 69 - 12.47Y/7.2kV substation to receive the power, which was placed into operation on that date. The substation is located in such a manner that the City has reasonable access to the transmission lines of both the City of Gainesville and Florida Power Corporation. A portion of the substation is owned by the City of Gainesville. The initial term of the contract was five years, with options for additional annual extensions. The contract was renegotiated on October 2, 1992, and extended for an additional fifteen years, beginning on Ls December 31, 1992. Provisions in the contract allow for price adjustments for increases and decreases in the City of Gainesville's fuel and operating costs. Total payments to the City of Gainesville for 2004 were $5,512,354.

Crystal River Unit #3 Participation Agreement The City is a participant in an agreement with Florida Power Corporation which was entered into on July 31, 1975. Under terms of the agreement, the City acquired an 0.0779% ownership interest and generation entitlement share in the nuclear steam electric generating unit. Participants are entitled to energy output of the unit based upon

- their respective generation entitlement share.

Florida Power Corporation has been appointed by the participants to act as their agent and has sole authority to L. manage, control, maintain, and operate the unit. Operating costs of the unit, in general, are shared in proportion to each generation entitlement share on a monthly basis. Common and external facilities of the generating unit are solely owned by Florida Power Corporation and participants share in the operating and maintenance expenses of such facilities. Nuclear fuel payments and capital acquisition costs are required of participants in advance. Total payments for 2004 were $125,311.

(Continued) 53

I la-CITY OF ALACHUA, FLORIDA NOTES TO FINANCIAL STATEMENTS The City's share of plant decommissioning costs to be paid during the years 2015 through 2022 is being accumulated in an account administered by the FMPA. FMPA has determined the appropriate account balance to be S319,704 at September 30, 2004. The cash account is offset by a deferred credit on the balance sheet of $319,704 at September 30, 2004.

St. Lucie No. 2 Power Purchase Agreement The City has negotiated a long-term agreement with Florida Power and Light Corporation through FMPA to purchase .3044 megawatts of generating capacity and a corresponding amount of energy monthly from the St. Lucie No. 2 nuclear generating plant. The plant became operational in 1984. Total payments for 2004 were S155,789.

The City has signed certain documents with FMPA relating to the St. Lucie Project that provide that if the agency defaults on certain bond payments, the City would be required to satisfy payment on their share (.431%) of the bonds. The par amount of the outstanding bonds at September 30, 2004, was approximately $291 million.

NOTE Ml - PENSION PLANS All full time employees of the City hired prior to January 1, 1996, participate in the Florida State Retirement System, a multiple-employer defined benefit public retirement system. Full-time employees hired on January 1, 1996, or later, participate in a retirement system administered by the Florida League of Cities, Inc. Effective October 1, 2004, the City reinstated its membership in the Florida Retirement System. All participants in the Florida League of Cities, Inc. retirement plan will now participate in the Florida Retirement System. Additionally, all full-time employees hired on October 1, 2004, or later, participate in the Florida State Retirement System.

Florida Retirement System The Florida State Retirement System (the System) was created by the Florida Legislature and is administered by the State of Florida, Department of Administration, Division of Retirement and is a cost-sharing, multiple-employer defined benefit public retirement plan available to governmental units within the state of Florida. The System issues a publicly available financial report that includes financial statements and required supplementary information for the System. The report may be obtained by writing to the Florida Retirement System, Division of Retirement, 2639-C North Monroe Street, Tallahassee, Florida 32399-1560, or by calling (850) 488-5706. At September 30, 2004, the City had 21 active participants in the System.

The System provides vesting of benefits after six years of creditable service. Members are eligible for normal retirement after they have met one of the following: (1) after thirty years of service, regardless of age (twenty-five l years if special risk), or (2) age 62 and ten years of service (age 55 and ten years if special risk).

Early retirement may be taken any time after completing six years of service; however, there is a 5% benefit reduction for each year prior to normal retirement. Benefits are computed on the basis of age, average final compensation and service credit. Average final compensation is the average of the five highest years of earnings.

The Systeni also provides death and disability benefits. Benefits are estimated by Florida Statutes and include cost of living adjustments.

The funding methods and the determination of benefits payable are provided in various acts of the Florida Legislature. These acts provide that employers, such as the City, be required to contribute 7.39% of the .11 compensation for regular members, 9.37% for senior management and 18.53% for special risk as of September 30, 2004. The City's contributions to the System for the years ended September 30, 2004, 2003, and 2002, were

$99,524, $102,548, and $121,352, respectively.

(Continued) 1 54 li

CITY OF ALACHUA, FLORIDA NOTES TO FINANCIAL STATEMENTS Florida League of Cities Plans There are two retirement plans for employees hired on or after January 1, 1996: a defined contribution plan for general employees, and a Police Officers' Pension Plan, a local-law plan that follows Chapter 185 of the Florida State Statutes. Both plans are administered by the Florida League of Cities. At September 30, 2004, the City had 48 general employees and 11 police officers participating in these plans.

The Retirement Plan and Trustfor the GeneralEmployees of the City ofAlachua is a defined contribution plan with a vesting schedule between five and ten years of service. The amount contributed to the plan by the City is at the City Commission's discretion, 11 % for fiscal year 2004. The vesting schedules are as follows:

Years Percent of Service Vested 04 Years 0%

5 Years 50%

6 Years 60%

7 Years 70%

8 Years 80%

9 Years 90%

10 or More Years 100%

The normal retirement date from this plan is the first day of the month coincident with or next following attainment of age 62. Distributions may be made at the participant's election on or after the anniversary date following termination of employment and a one-year break in service. The administrator and the investment manager of this plan is the Florida League of Cities' Florida Municipal Pension Trust Fund (FMPTF). The City's contributions to this plan for the years ended September 30, 2004, 2003, and 2002, were $151,081,

$119,011, and $108,558, respectively.

The Retirement Plan and Trust for the Police Officers of the City of Alachua is a defined benefit plan established under Chapter 185 of the Florida Statutes. Benefits are determined by the number of years of credited service multiplied by 2% and multiplied by final monthly compensation. Final monthly compensation is one-twelfth of the highest average earnings during the five best years out of the last ten years of creditable service prior to separation, or the career average, whichever is greater.

The normal retirement date is the first day of the month coincident with, or next following, attainment of age 55 and ten years of service or earlier attainment of age 52 and 25 years of service. The amount of accrued benefits will be reduced a maximum of 3 % for each year before the normal retirement age. This plan requires a 1% contribution by all participants. If a member terminates before completing ten years of credited service, all employee contributions are returned to the member, with no other benefits. Employees are 100% vested after ten years. The City's contributions are based on an actuarial study, 12.17 % for fiscal year 2001. The administrator and investment manager is the Florida League of Cities' FMPTF. Claims procedures and plan administration is supervised by the City of Alachua Police Officers' Pension Trust Fund Board of Trustees. The Florida League of Cities, Inc. issues a publicly available financial report that includes financial statements and required supplementary information for the plan. That report may be obtained by writing to the Florida League of Cities, Inc., P.O. Box 1757, Tallahassee, Florida 32302-1757, or by calling (850) 222-9684. Membership in this Board is established by the City Commission in compliance with Chapter 185, Florida Statutes. The City's contributions to this plan for the years ended September 30, 2004, 2003, and 2002, were $61,527, $54,497, and

$32,311, respectively.

(Continued) 55

I IjI-CITY OF ALACHUA, FLORIDA NOTES TO FINANCIAL STATEMENTS NOTE N - RISK MANAGEIMENTI The City is exposed to various risk of loss related to torts; theft of, damage to, and destruction of assets; errors and omissions; and natural disasters for which the City carries insurance. The City has not had any significant reduction in insurance coverage and the amounts of insurance settlements have not exceeded insurance coverage for any of the last three years. Insurance against losses is provided for the following types of risk with the following carriers: II Florida Municipal Insurance Trust

• Workers' Compensation and Employer's Liability St. Paul Fire and Marine Insurance Company

• General liability and Automobile Liability

• Real and Personal Property Damage

• Automobile Physical Damage

• Public Employees' Blanket Bond X

• Boiler Officials' Liability

• Law Enforcement Officers' Professional Liability and Other Mandated Coverage

• Accidental Death and Dismemberment

• Auxiliary Reserve Policy jf

• Law Enforcement Officers' Professional Liability The City's coverage for workers' compensation is under a retrospectively related policy. Premiums are accrued based on the ultimate cost to date of the City's experience.

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L L REQUIRED SUPPLEMENTARY INFORMATION t In accordance with Governmental Accounting Standards Board Statement No. 34, the following information L is presented as a required part of the basic financial statements.

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CITY OF ALACHUA, FLORIDA SCHEDULE OF REVENUES, EXPENDITURES, AND CHANGES IN FUND BALANCES BUDGET AND ACTUAL GENERAL FUND For The Year Ended September 30, 2004 Budgeted Amount.

Variance Positive Original Final Actual (Negative)

Revenues Taxes $ 3,238,475 3,238,475 3,238,949 474 Licenses and permits 175,000 175,000 195,072 20,072 Fines and forfeitures 130,000 130,000 127,422 ( 2,578)

Intergovernmental revenues 533,660 538,660 1,271,852 733,192 Charges for services 482,700 566,029 677,855 111,826 Interest 42,500 42,500 26,513 ( 15,987)

Miscellaneous 44,500 77,108 51,935 ( 25,173)

Total revenues 4,646,835 4,767,772 5,589,598 821,826 Expenditures General government 1,909,605 1,999,143 1,947,913 51,230 Public safety 2,057,996 2,079,415 2,101,750 ( 22,335)

Physical environment 418,600 418,600 616,769 ( 198,169)

Transportation 532,373 532,373 469,639 62,734 Economic environment 620,569 628,569 623,283 5,286 Parks and recreation 514,298 516,278 452,751 63,527 Total expenditures 6,053,441 6,174,378 6,212,105 ( 37,727)

Other financing sources (uses)

Transfers in 888,631 888,631 923,817 35,186 Transfers (out) ( 262,984) ( 262,984) ( 296,984) 34,000 Total other financing sources (uses) 625,647 625,647 626,833 69,186 Net change in fund balances ( 780,959) ( 780,959) 4,326 785,285 Fund balances - beginning of year 1,209,754 1,209,754 1,209,754 Fund balances - end of yeai $ 428,795 428,795 1,214,080 785,285 Annual budgets are adopted on a basis consistent with generally accepted accounting principles.

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COMBINING STATEMENTS These combining statements provide more detailed information than can be found in the basic financial statements, including information on the individual nonmajor governmental funds as well as the pension trust funds.

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I 'It CITY OF ALACHUA, FLORIDA NONMAJOR GOVERNMENTAL FUNDS COMBINING BALANCE SHEET September 30, 2004

.1 Community Special Revenue Redevelopment Agency Fund - SHIP Program [I ASSETS Cash and cash equivalents $ 200,852 125,000 Due from other funds 33,767 Prepaids 395 Total assets $ 235,014 125,000 LIABILITIES AND FUND BALANCES Liabilities:

Account payable S 2,566 --

Interest payable Due to other funds -- 125,000 1

Total liabilities 2,566 125,000 Fund balances Reserved for debt service Unreserved, undesignated 232,448 --

TOTAL LIABILITIES AND FUND BALANCES S 235,014 125,000 II 1

II II The notes to the financial statements aTe an integral pan of this statement.

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III

Capital Projects Fund - Total Debt Hitchcock Nonmajor Service Grant Governmental Funds 89,876 59,864 475,592

-- 33,767

-- 395 89,876 59,864 509,754 2,566 41,536 -- 41,536 301 60,974 186,275 41,837 60,974 230,377 48,039 -- 48,039

- ( 1,110) 231,338 89,876 59,864 509,754 63

I lI-CITY OF ALACHUA, FLORIDA NONMAJOR GOVERNMENTAL FUNDS COMBINING STATEMENT OF REVENUES, EXPENDITURES, AND CHANGES IN FUND BALANCE For The Year Ended September 30, 2004 Community Special Revenue Redevelopment Fund - SHIP Debt Agency Program Service Revenues Intergovernmental revenues $ 181,443 125,000 Interest 1,373 Total revenues 182,816 125,000 Expenditures 1

Economic environment 73,450 Debt service 42,084 327,405 Total expenditures 115,534 327,405 1 Other financing sources (uses)

Transfers in -- 328,496 Net change in fund balances 67,282 125,000 1,091 1 Fund balances - October I 165,166 ( 125,000) 46,948 Fund balances - September 30 $ 232,448 -- 48,039 1

II The notes to the financial statements are an integral part of this statement.

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Capital Projects Fund- Total Hitchcock Nonrnajor Grant Governmental Funds

- 306,443 1,373

-- 307,816 73,450

-- 369,489 442,939 328,496

-- 193,373

( 1,110) 86,004

( 1,110) 279,377 65

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CITY OF ALACHUA, FLORIDA COMBINING STATEMENT OF FIDUCIARY NET ASSETS FIDUCIARY FUNDS September 30, 2004 General Police Employees' Officers' Pension Trust Pension Trust Totals ASSETS Investments S 567,793 705,183 1,272,976 LIABILITIES Other liabilities 200 600 o00 NET ASSETS Net assets held in trust for pension benefits S 567,593 704,583 1,272,176 I1 11 1

1 The notes to the financial statements are an integral part of this statement.

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CITY OF ALACHUA, FLORIDA COMBINING STATEMENT OF CHANGES IN FIDUCIARY NET ASSETS FIDUCIARY FUNDS September 30, 2004 General Police Employee ist Officers' Pension Tnist Pension Trust Totals Additions:

Contributions:

Employer $ 151,01 81 61,527 212,608 Plan members - 5,028 5,028 State of Florida - 51,784 51,784 Total contributions 151,0181 118,339 269,420 Investment earnings: 31,7a19 41,253 73,002 Total additions 182,8: 30 159,592 342,422 Deductions:

Benefits 32,8(59 1,787 34,656 Administrative fees 7, 20 898 1,618 Total deductions 33,51 89 2,685 36,274 Change in net assets 149,24 41 156,907 306,148 Net assets held in trust for pension benefits:

Net assets - beginning of the year 418,352 547,676 966,028 Net assets - end of the year $ 567,593 704,583 1,272,176 The notes to the financial statements are an integral part of this statement.

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SINGLE AUDIT AND GRANT COMPLIANCE 69

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LCPA ASSOCIATES Certified Public Accountants and Consultants 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 GOVERNMENTA UDITING STANDARDS The Honorable Mayor and City Council City of Alachua, Florida L We have audited the financial statements of the City of Alachua, Florida as of and for the year ended September 30, 2004, and have issued our report thereon dated December 22, 2004. We conducted our audit in accordance with auditing standards generally accepted in the United States of America and the L 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 of Alachua, Florida's internal control over L financial reporting in order to determine our auditing procedures for the purpose of expressing our opinion on the financial statements and not to provide an opinion on the internal control over financial reporting.

Our consideration of the internal control over financial reporting would not necessarily disclose all matters in the internal control that might be material weaknesses. A material weakness is a reportable condition in L which the design or operation of one or more of the internal control components does not reduce to a relatively low level the risk that misstatements caused by error or fraud in amounts that would be material in relation to the financial statements being audited may occur and not be detected within a timely period by employees in the normal course of performing their assigned functions. We noted no matters involving the internal control over financial reporting and its operation that we consider to be material weaknesses.

- Compliance and Other Matters As part of obtaining reasonable assurance about whether the City of Alachua, Florida'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.

This report is intended solely for the information and use of the Mayor and Members of the Council, management, federal awarding agencies and pass-through entities, and is not intended to be and should not be used by anyone other than these specified parties.

L P S/

Bradenton, Florida December 22,2004 71 Members: X American Institute of Certified Public Accountants

• SEC Practice Section

• Private Companies Practice Section

• Florida Institute of Certified Public Accountants

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jCPA ASSOCIATES Certified Public Accountants and Consultants INDEPENDENT AUDITOR'S REPORT ON COMPLIANCE WITH REQUIREMENTS APPLICABLE TO EACH MAJOR FEDERAL PROGRAM AND ON INTERNAL CONTROL OVER COMPLIANCE IN ACCORDANCE WITH OMB CIRCULAR A-1 33 The Honorable Mayor and Members of the Council of the City of Alachua, Florida Compliance We have audited the compliance of the City of Alachua, Florida, vith the types of compliance requirements described in the U.S. Office of Management and Budget (OMB) Circular A-133 Compliance Supplement, that are applicable to each of its major federal programs for the year ended September 30, 2004. The City of Alachua's major federal programs 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 is the responsibility of the City of Alachua's management. Our responsibility is to express an opinion on the City of Alachua'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 Organizationsand Chapter 10.550, Rules of the Auditor General. Those standards and OMB Circular A-133 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 occurred. An audit includes examining, on a test basis, evidence about the City of Alachua'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 of Alachua's compliance with those requirements.

In our opinion, the City of Alachua complied, in all material respects, with the requirements referred to above that are applicable to each of its major federal programs for the year ended September 30, 2004.

Internal Control Over Compliance The management of the City of Alachua is responsible for establishing and maintaining effective internal control over compliance with requirements of laws, regulations, contracts and grants applicable to federal programs. In planning and performing our audit, we considered the City of Alachua's internal control over compliance with requirements that could have a direct and material effect on a major federal program in order to determine our auditing procedures for the purposes of expressing our opinion on compliance and to test and report on internal control over compliance in accordance with OMB Circular A-1 33.

73 Members: U American Institute ofCertified Public Accountants

• SEC Practice Section

• Private Companies Practice Section

• Florida Institute ofCertified Public Accountants

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-I Our consideration of the internal control over compliance would not necessarily disclose all matters in the internal control that might be material weaknesses. A material weakness is a reportable condition in which the design or operation of one or more of the internal control components does not reduce to a relatively low level the risk that noncompliance with applicable requirements of laws, regulations, contracts and grants caused by error or fraud that would be material in relation to a major federal program being audited may occur and not be detected within a timely period by employees in the normal course of performing their assigned functions. We noted no matters involving the internal control over compliance and its operation that we consider to be material weaknesses.

Schedule of Expenditures of Federal Awards j We have audited the financial statements of the governmental activities, the business-type activities, each major find, and the aggregate remaining fund information of the City of Alachua, Florida, as of and for the year ended September 30, 2004, and have issued our report thereon dated December 22, 2004. Our audit was performed for the purpose of 1

forming opinions on the financial statements that collectively comprise the City of Alachua, Florida's basic financial statements. The accompanying schedule of expenditures of federal awards is presented for purposes of additional analysis as required by OMB Circular A-133 and is not a required part of the basic financial statements. Such information has been subjected to the auditing procedures applied in the audit of the basic financial statements and, in our opinion, is fairly stated, in all material respects, in relation to the basic financial statements taken as a whole.

This report is intended solely for the information of the Mayor and Members of the Council, management, and federal awarding agencies and pass-through entities and is not intended to be and should not be used by anyone other than these specified users.

Bradenton, Florida December 22, 2004 1 II.

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CITY OF ALACHUA, FLORIDA SCHEDULE OF EXPENDITURES OF FEDERAL AWARDS FOR THE YEAR ENDED SEPTEMBER 30, 2004 CFDA Pass-through Number Grantor's Number Expenditures Federal Awards U.S. Department of Housing and Urban Development Passed through Department of Community Affairs:

Section 108 Loan Guarantee - Dollar General 14.248 01OD-SE99-99-15-X01 $ 2,075,000 Community development block grant program:

Housing Grant 14.228 02DB-89-03-11-02-HO1 102,971 WACO Project 14.228 02DB-89-11-43-02-E51 218,336 Total U.S. Department of Housing and Urban Redevelopment 2,396,307 U.S. Department of Justice Law enforcement block grant program 16.592 02-LB-BX-0235 7,679 Law enforcement block grant program 16.592 2003-LB-BX-1823 11,861 Total Federal Awards S 2,415,847 See independent auditor's report and notes to this schedule.

75

LI CITY OF ALACHUA, FLORIDA NOTES TO SCHEDULE OF EXPENDITURES OF FEDERAL AWARDS 1

NOTE A - GENERAL The accompanying schedules of expenditures of federal awards present the activity of all federal financial assistance programs of the City of Alachua, Florida. The City of Alachua reporting entity is defined in Note A of the City's basic financial statements. All federal financial assistance received directly from federal agencies as well as federal assistance passed through other government agencies is included in these schedules. l NOTE B - BASIS OF ACCOUNTING The accompanying schedules of expenditures of federal awards are presented using the modified accrual basis of accounting, which is described in Note A of the City's basic financial statements.

NOTE C - LOANS OUTSTANDING The City of Alachua, Florida had the following loan balances outstanding at September 30, 2004. These loan balances outstanding are also included in the federal expenditures presented in the schedule.

Federal Program Name CFDA Number Amount Outstanding Section 108 Loan Guarantee 14.248 $2,075,000 7il 76

CITY OF ALACHUA, FLORIDA SCHEDULE OF FINDINGS AND QUESTIONED COSTS For the Year Ended September 30, 2004 Part I - Summary of Auditor's Results Basic Financial Statement Section Type of auditor's report issued: Unqualified Opinion Internal control over financial reporting:

Material weakness (es) identified? yes x no Reportable condition(s) identified not considered to be material weaknesses? yes x no Noncompliance material to basic financial statements noted? _ _ yes x no Federal Awards Section Dollar threshold used to determine Type A programs: $300.000 Auditee qualified as low-risk auditee? x yes _ _ no Type of auditor's report on compliance for major programs: Unqualified Opinion Internal Control over compliance:

Material weakness(es) identified? yes x no Were reportable condition(s) identified not considered to be material weakness(es)? yes x no Any audit findings disclosed that are required to be reported in accordance with Circular A-1 33 (Section .510(a))? yes x no Identification of major programs CFDA Number(s) Name of Federal Program or Cluster 14.248 U.S. Department of Housing and Urban Development -

Section 108 Loan Guarantee - Dollar General 77

CITY OF ALACHUA, FLORIDA SCHEDULE OF FINDINGS AND QUESTIONED COSTS (continued)

For the Year Ended September 30, 2004 Part II - Schedule of Basic Financial Statement Findings This section identifies the reportable conditions, material weaknesses, and instances of noncompliance related to the basic financial statements that are required to be reported in accordance with Chapter 5.18 through 5.20 of Government Auditing Standards.

No reportable conditions, material weaknesses and instances of noncompliance, including questioned costs, related to the basic financial statements were noted.

j Part III - Schedule of Federal Award Findings and Questioned Costs This section identifies reportable conditions, material weaknesses, and instances of noncompliance, including known fraud and questioned costs, related to the audit of federal programs, as required to be reported by Circular A- 133 Section .5 10 (a). I No reportable conditions, material weaknesses, and instances of noncompliance, including known fraud and questioned costs, related to the audit of federal projects were identified.

Part IV - Summary Schedule of Prior Audit Findings There were no prior audit findings for federal programs.

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4CPA ASOCIATES L Certified Public Accountants and Consultants AUDITOR'S MANAGEMENT LETTER L

Honorable Mayor, City Commissioners And City Manager City of Alachua, Florida We have audited the basic financial statements of the City of Alachua, Florida as of and for the fiscal year ended September 30, 2004, and have issued our report thereon dated December 22, 2004, which was unqualified.

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 the Government Auditing Standards, issued by the L Comptroller General of the United States; and OMB Circular A-1 33, Audits of States, Local Governments, andNon-Profit Organizations. We have issued our Independent Auditor's Report on Compliance and Internal Control over Financial Reporting, Independent Auditor's Report on Compliance and Internal Control over Compliance Applicable L to each Major Federal Program, and Schedule of Findings and Questioned Costs. Disclosures in those reports and schedule, which are dated December 22, 2004, 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. Those rules (Section 10.554(1)(h)) require that we address in the management letter, if not already addressed in the auditor's reports on compliance and internal controls or schedule of findings and questioned costs, whether or not inaccuracies, shortages, defalcations, fraud, and/or violations of laws, rules, regulations, and contractual provisions reported in the preceding annual financial audit report have been corrected. There were no such manners disclosed in the preceding annual financial audit report.

L The Rules of the Auditor General (Section 10.554(l)(h)l.) require that we address in the management letter, if not already addressed in the auditor's reports on compliance and internal controls or schedule of findings and questioned costs, whether or not recommendations made in the preceding annual financial audit report have been followed. The recommendations made in the preceding annual financial audit report have been corrected, except for those reported below under the heading Prior Year FindingsandRecommendations.

As required by the Rules of the Auditor General (Section 10.554(l)(h)2.), the scope of our audit included 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 Alachua, Florida complied with Section 218.415, Florida Statutes.

The Rules of the Auditor General (Section 10.554(l)(h)3. and 4.), require disclosure in the management letter of the following matters if not already addressed in the auditor's reports on compliance and internal controls or schedule of L findings and questioned costs: (1) violations of laws, rules, regulations, and contractual provisions that have occurred, or are likely to have occurred; (2) improper or illegal expenditures; (3) improper or inadequate accounting procedures (e.g., the omission of required disclosures from the financial statements); (4) failures to properly record financial transactions; and (5) other inaccuracies, shortages, defalcations, and instances of fraud discovered by, or that come to the attention of, the auditor. Matters required to be disclosed and other recommendations are reported under the heading Current Year Findings andRecommendations.

79 Members: U American Institute of Certified PublicAccountants *SEC Practice Section *Private Companies Practice Section

• Florida Institute of Certified Public Accountants

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Hlonorable Mayor, City Commissioners And City Manager City of Alachua, Florida The Rules of the Auditor General (Section 10.554(1)(h)5.), also require that the name or official title and legal authority for the primary government and each component unit of the reporting entity be disclosed in the management letter, unless disclosed in the notes to the financial statements. The City has disclosed this information in the notes to the financial statements. I As required by the Rules of the Auditor General (Section 10.554(1)(h)6.a.), the scope of our audit included a review of the provisions of Section 218.503(1), Florida Statutes, regarding financial emergencies. In connection with our audit, we determined that the City of Alachua, Florida is not in a state of financial emergency as a consequence of 1 the conditions described in Section 218.503(1), Florida Statutes.

As required by the Rules of the Auditor General (Section 10.554(l)(h)6.b.), we determined that the annual financial report for the City of Alachua for the fiscal year ended September 30, 2004, filed with the Department of Financial Services pursuant to Section 218.32, Florida Statutes, is in agreement with the annual financial audit report for the fiscal year ended September 30, 2004.

As required by the Rules of the Auditor General (Sections 10.554(h)6.c. and 10.556(8)), we applied financial condition assessment procedures as of the fiscal year end. It is management's responsibility to monitor the entity'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. No findings were noted in this regard. 11 This management letter is intended solely for the information of the Mayor, City Commissioners, City Manager, and management, and the State of Florida Office of the Auditor General, and is not intended and should not be used by anyone other than these specified parties.

Bradenton, Florida December 22, 2004 A8 80

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PRIOR YEAR FINDINGS AND RECOMMENDATIONS 6 Pooled Cash Reconciliation During prior audits, we noted that the Citys pooled cash and investment fund reconciliation was not being L accurately or timely prepared and that the pooled cash fund did not reconcile to the cash accounts in the individual funds.

- During the current audit, we noted the same issues. We assisted management in reconciling pooled cash and discussed ways to facilitate reconciling the pooled cash fund to the cash accounts in the individual funds. Wve recommend management continues reconciling pooled cash on a monthly basis.

03-02 Fixed Asset Software The fixed asset module of the Citys accounting system is currently unable to accurately calculate depreciation expense. Calculating and recording depreciation expense on fixed assets is a requirement of the new financial reporting model under GASB No. 34. We recommend the City review the fixed asset records within the module to ensure that they are complete as to historical cost, date in service, and estimated useful life. Then, with the assistance of the software vendor, set up the module to begin calculating depreciation expense.

Our recommendation is still in the process of being implemented.

CURRENT YEAR FINDINGS AND RECOMMENDATIONS None.

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(Citp of at~adjtta (C96//1 (,0O/20/ %Jnm~ Clovis Watson, Jr., MPA Celebrating a Century City Afatiager 1905-2005 Jean Calderwood MAayor January 30, 2005 Bonnie Burgess Vice-AMayor The Honorable William 0. Monroe State of Florida Auditor General James Levis P.O. Box 1735 ICommissioner Tallahassee, FL 32302-1735 Orien Hills RE: Management Letter Responses for 9/30/04 Audit Commissioner Gib Coerper

Dear Mr. Monroe:

Commkisgioner After reviewing the Independent Auditor's Management Letter, the City Commission and Staff have implemented the following recommendations in response to the Independent Auditor's L comments pertaining to prior years.

We are very pleased that there are no current year audit findings and recommendations.

If any further assistance is needed please contact me at (386) 462-1231 between the hours of 8:00 AM until 5:00 PM Monday - Friday.

Sincerely,

~ .

Clovis Watson Jr., MPA City Manager I5001 NW 140th St.

Alachua, Florida L 32615 1'.O. Box 9 32616 Phone 386.462.1231 fax 386.462.7525 wwi.cityofalaclhua.com .

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I J4 The City of Alachua has taken action to implement prior and current recommendations as follows:

IL 01-6 Pooled Cash Reconciliation:

[I Audit Response: Administration has reconciled the Pooled Cash Fund monthly since the FY 01 audit findings. The remaining few minor issues are in the process of being addressed.

Administration will complete the necessary adjustments provided by the auditor's and h implement the additional controls to prevent future occurrences of this nalure.

03-02 Fixed Asset Software: 4]

Audit Response: Administration has reviewed the records of all the assets entered into the fixed asset module to insure their accuracy, and has attended training sessions on the operation h of the fixed asset module. lThroutgil training, the Administration has discovered that numerous fields within the module, which currently contain no information, will have to be inputted before the module will function properly. Also, various depreciation schedules will have to be consolidated or removed. It is anticipated that this process will take approximately 1-2 months.

The Administration believes that the module will be funictioning properly for the upcoming fiscal year.

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.Eitp of Iadjua 15001 NW 140th St., Alachua, F1lorida 32615 Ph one 386.462.1231 Box 9 32616 favx 386.462.7525 11 wvxvw.cit yofalaclhua.com 84 L

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>4 FiscalYe f- ar Ending .... 9

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Comprehensive Annual Financial Report of the City of Bushnell, Florida for the Fiscal Year Ended September 30, 2004 PREPARED BY TIHE OFFICE OF TIHE CITY CLERK

COMPREHENSIVE ANNUAL FINANCIAL REPORT FOR TIHE FISCAL YEAR ENDED SEPTEMBER 30,2004 CITY OF BUSHNELL, FLORIDA TABLE OF CONTENTS INTRODUCTORY SECTION Certificate ofAchievement for Excellence in Financial Reporting ............................................................. i Organization Chart ............................................................ ii Letter of Transmittal ............................................................ iii-vii City Council Elected and Appointed Officials ....................... ..................................... viii

11. FINANCIAL SECTION Independent Auditors' Report ............................................................. 1-2 Management's Discussion and Analysis ............................................................. 3-9 Basic Financial Statements Statement of Net Assets ............................................................. 10 Statement of Activities ............................................................. 11-12 Balance Sheet - All Govenmental Funds ............................................................. 13 Reconciliation of the Balance Sheet of Governmental Funds to the Statement of Net Assets ............................................................. 14 Statement of Revenues, Expenditures, and Changes in Fund Balances - All Governmental Funds ............................................................. 15 Reconciliation of the Statement of Revenues, Expenditures, and Changes in Fund Balances of Governmental Funds to the Statement of Activities ............................................................. 16 Statement of Net Assets - Proprietary Funds ............................................................. 17-18 Statement of Revenues, Expenses, and Changes in Fund Net Assets - Proprietary Funds ............................................................. 19 Statement of Cash Flows - Proprietary Funds ............................................................. 20-21 Statement of Fiduciary Net Assets ............................................................. 22 Statement of Changes in Fiduciary Net Assets - Pension Trust Funds ............................................................. 23 Notes to Financial Statements ............................................................. 24-46 Required Supplementary Information Schedule of Contributions - Employer and Other General Employees' Retirement Fund and Police Officers' Retirement Fund ............................................................. 47 Schedule of Revenues, Expenditures, and Changes in Fund Balance, Budget and Actual, Major Fund - General Fund ............................................................. 48-51

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COMPREHENSIVE ANNUAL FINANCIAL REPORT FOR TIlE FISCAL YEAR ENDED SEPTEMBER 30,2004 CITY OF BUSHNELL, FLORIDA TABLE OF CONTENTS (Concluded)

II. FINANCIAL SECTION (Concluded)

Supplemental Information Combining Balance Sheet -

Nonmajor Governmental Funds .......................................... 52 Combining Statement of Revenues, Expenditures, and Changes in Fund Balances - Nonmajor Governmental Funds.53 Budget to Actual Comparison - Nonmajor Fund -

Cemetery Fund .54 Budget to Actual Comparison - Nonmajor Funds - CDBG .55

m. STATISTICAL SECTION General Governmental Expenditures by Function...............................................................................56 General Governmental Revenues by Source .. 57 General Govenmental Tax Revenues by Sources .. 58 Property Tax Levies and Collections .. 59 Assessed and Estimated Actual Value of Property .. 60 Property Tax Rates - Direct and Overlapping Governments .. 61 Computation of Overlapping Bond Debt .. 62 Principal Taxpayers .. 63 Ratio of Annual Debt Service Expenditures for General Debt to Total General Expenditures .. 64 Schedule of Electric Utility Revenue Debt Service .. 65 Schedule of Water Revenue Debt Service .. 66 Schedule of Sanitation Revenue Debt Service .. 67 Schedule of Wastewater Revenue Debt Service .. 68 Demographic Statistics .. 69 Property Values and New Construction .. 70 Miscellaneous Statistics .. 71 Schedule of Insurance Coverage .. 72-73 Computation of Legal Debt Margin .. 74

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UIi INTRODUCTORY SECTION

Certificate of Achievement for Excellence in Financial Reporting Presented to City of Bushnell, Florida For its Comprehensive Annual Financial Report for the Fiscal Year Ended September 30, 2003 A Certificate of Achievement for Excellence in Financial Reporting is presented by the Government Finance Officers Association of the United States and Canada to government units and public employee retirement systems wvhose comprehensive annual financial reports (CAFRs) achieve the highest standards in government accounting and financial reporting.

President Executive Director i

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CITY OFBUSHNELL ORGANIZATIONAL CHART ii

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pr CITY OF BUSHNELL 219 N. Market Street i\ Bushnell, Florida 33513 P.O. Box 115 (352) 793-2591 Fax (352) 793-2711 March 4, 2005 March 4, 2005 TO THE CITIZENS OF THE CITY OFBSEMLL:

The comprehensive annual financial report of the City of Bushnell for the fiscal year ended September 30, 2004, is hereby submitted. Responsibility for both the accuracy of the data, and the completeness and fairness of the presentation, including all disclosures, rests with the City. To the best of our knowledge and belief, the enclosed data are accurate in all material respects and are reported in a manner designed to present fairly the financial position and results of operations of the City. All disclosures necessary to enable the reader to gain an understanding of the government's financial activities have been included. Additionally, the Managements Discussion and Analysis section that follows will provide highlights and review the financial performance during the reporting period.

FINANCIAL STATEMENT PRESENTATION The comprehensive annual financial report is presented in three sections, Introductory, Financial, and Statistical. The Introductory Section includes this transmittal letter, the City's organizational chart and a list of principle officials. The FinancialSection includes the basic financial statements and the auditors report. The StatisticalSection includes selected financial

& demographic information.

BACKGROUND INFORMATION The City is a political subdivision of the State of Florida located in Sumter County. The city was established under the legal authority of the Laws of Florida, chapter 57-105. The City operates under a council-manager form of government. The legislative branch of the City is composed of a four-member elected City Council, and an elected mayor.

REPORTING ENTITY AND ITS SERVICES This report includes all funds of the City. The City of Bushnell provides a full range of general governmental services and activities. These services include police and code enforcement; administrative and financial services; planning, zoning and development review; maintenance of highways, streets & drainage; library, recreation and special events. In addition to general government activities, the governing body also operates an Electric, Water, Wastewater and Sanitation utility operation.

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LOCAL ECONOMY The City of Bushnell is the County Seat of Sumter County. It also contains, within its boundaries, Bushnell Elementary and South Sumter High School. The County Courthouse, as well as the schools, brings a diverse group of consumers into the Bushnell area. While Bushnell's municipal limits are 2.5 square miles our consumer service area is much greater.

The City of Bushnell is one of the smallest Electric utility providers in the State of Florida. The City also provides Water; Sanitation and Wastewater services to consumers within the municipal limits are well as select areas outside our municipal boundaries. The Wastewater Utility has encouraged newfound commercial growth, which has created employment opportunities within the area.

Major industries located within the government's boundaries or in close proximity include manufacturers of air conditioning vents and metal components; go cart-racing motors; prosthetics for humans and horses; and cabinetry.

Due to its central location, within the state, Bushnell has access to all major cities via Interstate 75, Highway 301, and the Florida Turnpike. Thus, making it easy to commute to Tampa, Orlando, Ocala and Gainesville.

CURRENT YEAR PROJECTS During the fiscal year '04, the City of Bushnell completed some major construction projects to improve on the service delivery for our citizens. The following will highlight some of these major initiatives taken by the City during the fiscal year '04:

West Noble Avenue Water Main Extension During fiscal year 2004, a 10" water main was constructed along easements acquired by the City for the purpose of looping portions of the City's most westerly portions of its water system. This main interconnects from the Southwest corner of the Kenny Dixon Sports Complex to a location near the intersection of CR 608 & CR 609.

This looping provides added reliability to area customers by having the ability to isolate portions of a failed main and continue service means of a loop feed. This project was partially funded by the Withlacoochee Regional Water Supply Authority.

East Belt Avenue Southwest System Expansion A low-pressure sewer system was constructed along the Eastern portion of East Belt Ave during fiscal year 2004; this low-pressure system will serve approximately ten new customers, three of which are county or city facilities.

The low pressure system utilizes individual grinding pump lift stations which pump into a force main that interconnects with the City's new sewer transmission system at Pine Street &

Dade Ave.

This project was funded by assessments on a prorata share of the anticipated use of the main by those customers being benefited. It also will provide accessibility in the future to other customers in the immediate area.

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DTJOR INITIATIVES/FUTURE PROJECT The City government is considering a number of major initiatives for the City. This section will highlight briefly, one such future major initiative:

Sewer System Expansion to the South West portions of the City The City of Bushnell will be expanding its wastewater collection and transmission system to the southwest portion of the City of Bushnell along with certain segments of SR 48 (West Belt Ave). The expansion of the sewer system will consist of a combination of a gravity and low-pressure system.

The project is anticipated to cost approximately $950,000 with funding coming from the Florida Department of Environmental Protection in the form of a small disadvantaged community grant. Engineering design is currently under way and being provided by H & B Engineering.

The required permits should be filed by early summer with construction starting on and about the beginning of calendar year 2006. The expansion of this sewer collection and transmission system will add approximately 100 residential units and approximately 20 commercial establishments to the system.

Bushnell to provide sewer treatment services to the City of Webster The City of Bushnell & the City of Webster entered into an interlocal agreement whereby the City of Bushnell will be providing wastewater treatment services to the City of Webster's soon to be new sewer collection and transmission system.

The City of Webster has been successful at acquiring a number of state grants that will help fund their new waste water system. Through Webster's Wastewater Facility Study, it was determined that the treatment of Webster's wastewater by the City of Bushnell is advantageous and desirable for both municipalities.

The Cities negotiated a contract that will reserve 175,000 gallons of capacity for the City of Webster at Bushnell's David Hanson Treatment Facility for a period of 20 years. In return, the City of Webster, through its grants, will fund certain improvements to that facility that will prepare it to accommodate the additional flow.

Currently, the City of Bushnell has engaged the services of Barnes Ferland & Associates to design these capacity improvements to the plant and it is anticipated that the capacity improvements should be complete by late 2006. Cost for construction of these capacity additions is anticipated to be approximately $ 1.8 million.

DepartmentFocus:

Management of the City of Bushnell has selected to focus on the Public Works Department to report accomplishments and undertakings in the recent past. The City of Bushnell Public Works Department is responsible for the collection and disposal of all solid waste within the city limits. Routine garbage and trash services are provided on a twice per week basis to all residential and commercial customers.

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The Public Works Department is also responsible for street maintenance and upgrades, responsible for the maintenance of all city parks and recreations facilities and is responsible for the maintenance of all buildings and grounds of the City of Bushnell.

The department operates under the direction of the Public Works Director, who works directly with the maintenance supervisor and staff assistant. Six other employees compose the staff for the Public Works Department and these nine individuals plan, prepare budgets, operate and maintain the facilities of the City designated to them.

Recently, the department initiated a data-gathering project that will help the City ascertain its right of way infrastructures. Data will be gathered for pavement, curbing, sidewalks, signage and storm water facilities. This data will become part of the city's geographical information system, which will allow for better management of these infrastructure assets.

The Public Works Department is also responsible for landscaping throughout the City.

The City has recently completed a major highway beautification project and its maintenance is the responsibility of the Public Works Department. The Beautification project was completed with funding assistance from the Florida Department of Transportation.

During fiscal year 2005, the City of Bushnell will change the way it provides sanitation services to its residential customers. An auto lift vehicle has been budgeted that will pick up city issued residential containers automatically. This new service delivery system should eliminate a lot of the previous problems experienced with bag collection and individual small trash containers.

OTHER INFORMATION Independent Audit:

State statutes require an annual audit by independent certified public accountants.

The accounting firm of Purvis, Gray, and Company was selected by the City of Bushnell's to complete this year's audit. The auditor's report on the basic financial statements are included in the financial section of the report.

Awards:

Safetu Award: The City has received numerous electric safety awards. The first safety award was presented to the City by the Florida Municipal Electric Agency to the Utility Department for recognition of a perfect safety record without reports of accidents. The City has received this award for 17 consecutive years.

Tree Citu USA: The Tree City USA award was first presented to the City in 1994. The City has continued to receive this award to the present. This award requires an annual Arbor Day Celebration, the planting of trees, and the implementation of a tree preservation policy as well as an annual application documenting levels of expenditure for maintenance of the program.

OutstandingRural Communitu: The State of Florida issued its first annual Outstanding Rural Community Award of the Year to the City of Bushnell. This award highlights one rural community with population under 8,000 for a project that significantly vi

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impacts the community's quality of life. In 1992, the City of Bushnell submitted the Kenny Dixon Sports Complex as the project for this award.

Certificateof Excellence in FinancialReportin : The Government Finance Officers Association of the United States and Canada (GFOA) awarded a Certificate of Achievement for Excellence in Financial Reporting to the City of Bushnell for its comprehensive annual financial report for the fiscal year ended September 30, 2003. This was to second consecutive year that the government has achieved this prestigious award In order to be awarded a Certificate of Achievement; a government must publish an easily readable and efficiently organized comprehensive annual financial report. This report must satisfy both generally accepted accounting principles and applicable legal requirements.

A Certificate of Achievement is valid for a period of one year only. We believe that our current comprehensive annual financial report continues to meet the Certificate of Achievement Program's requirements and we are submitting it to the GFOA to determine its eligibility for another certificate.

Acknowledgments:

The preparation of the comprehensive annual financial report on a timely basis was made possible by the dedicated service of the entire staff of the Administrative Department.

Each member of the department has our sincere appreciation for the contributions made in the preparation of this report. We should also like to thank the Mayor and the Council Members for their interest and support in planning and conducting the financial operations of the City in a responsible and progressive manner.

Sincerely, Joy Coleman, City Clerk/Finance Director

'Vince Ruano Vince Ruano, City Manager Vii

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EjTJ E mUT 0FFICEffS Mayor Joseph P. Strickland Jr.

Vice Mayor Warren Maddox Councilman Billy K. Williams Councilman Dale Swain Councilman Dale Barnes City Clerk N. Joy Coleman APPOINTD VOFFrICTI City Manager Vince Ruano Police Chief Joyce Wells Utilities Director Bruce Hickle Public Works Director Ronnie Pitts viii

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'v FINANCIAL SECTION

Purvis Gray&

Cop~any INDEPENDENT AUDITORS' REPORT Honorable Mayor and Council Members City of Bushnell Bushnell, Florida We have audited the accompanying financial statements of governmental activities, the business-type activities, each major fund and the aggregate remaining fund information of the City of Bushnell, Florida (the City) as of and for the year ended September 30, 2004, which collectively comprise the City's basic financial statements. These financial statements are the responsibility of the City's management. Our responsibility is to express an opinion on these financial statements based on our audit.

We conducted our audit in accordance with auditing standards generally accepted in the United States of America and the standards applicable to financial audits contained in Government Auditing Standards, issued by the Comptroller General of the United States. Those standards require that we plan and perform the audit to obtain reasonable assurance about whether the financial statements are free of material misstatement. An audit 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 that our audit provides a reasonable basis for our opinion.

In our opinion, the financial statements referred to above present fairly, in all material respects, the respective financial position of the governmental activities, the business-type activities, each major fund and the aggregate remaining fund information of the City as of September 30, 2004, and the respective changes in financial position and cash flows, where applicable, thereof 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 a report dated March 4, 2005, on our consideration of the City's internal control over financial reporting and our tests of its compliance with certain provisions oflaws, regulations, contracts and grants. That report is an integral part of an audit performed in accordance with Government Auditing Standards and should be read in conjunction with this report in considering the results of our audit.

Certified Public Accountants P.O. Box 23999

• 222 N.E. 1st Street

• Gainesville, Florida 32602 * (3S2) 378-2461

• FAX (352) 378-2505 Laurel Ridge Professional Center

• 2347 S.E. 17th Street

• Ocala, Florida 34471 * (352) 732-3872

• FAX (352) 732-0542 443 East College Avenue

• Tallahassee, Florida 32301 * (850) 224-7144

• FAX (850) 224.1762 1727 2nd Street

• Sarasota, Florida 34236 * (941) 365-3774

• FAX (941) 365-0238 Aww3AmN AND raLorue MEMBERS For nTITliS Or sRtwf1D fPUBLC AooNuNwrs MEMBER Of AMERICAN tHtlTE OF CEKTVW PUBIC ACCOUNTANTS PRIVATE COMPAIES ANd SaEC. AECTICE SECTIoNS 1

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Honorable Mayor and Council Members City of Bushnell Bushnell, Florida INDEPENDENT AUDITORS' REPORT (Concluded)

As discussed in note I to the financial statements, the City adopted the provisions of Governmental Accounting Standards Board (GASB) Statement No. 34, Basic FinancialStatement's-andManagement's Discussion and Analysis-for States and Local Governments; GASB Statement No. 37, Basic Financial Statements-andManagement'sDiscussion andAnalysis-for State and Local Governments: Omnibus; and Interpretation No. 6, Recognition and Measurement of Certain Liabilities and Expenditures in Governmental FundFinancialStatements, as of October 1, 2003. This results in a change in the format and content of the financial statements.

The management's discussion and analysis, the major fund budgetary comparison information, and certain pension information listed in the table of contents, are not a required part of the basic financial statements, but are supplementary information required by GASB. We have applied certain limited procedures, consisting principally of inquiries of management regarding the methods of measurement and presentation of the supplementary information. However, we did not audit the information and express no opinion on it.

Our audit was made for the purpose of forming opinions on the financial statements that collectively form the City's basic financial statements. The introductory section, combining and individual nonmajor fund financial statements, schedules and statistical tables listed in the table of contents are presented for additional analysis and are not a required part of the basic financial statements. We subjected the combining and individual nonmajor fund statements and schedules to the auditing procedures applied in the audit of the basic financial statements and in our opinion this information is fairly stated in all material respects, in relation to the basic financial statements taken as a whole. The introductory section and statistical tables have not been subjected to the auditing procedures applied inthe audit of the basic financial statements and, accordingly, we express no opinion on them.

March 4,2005 ,

Ocala, Florida A 2

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Management's Discussion and Analysis As management of the City of Bushnell, we offer readers of Bushnell's financial statement this narrative overview and analysis as of September 30, 2004. We encourage readers to consider the information presented here in conjunction with additional information that we have furnished in our letter of transmittal, which can be found on pages iii-vii of this report. All amounts, unless otherwise indicated, are expressed in thousands of dollars.

Financial Hifhlilits The assets of the City of Bushnell exceeded its liabilities at the close of the most recent fiscal year by

$9,788,940. Of this amount, $1,262,075 may be used to meet the government's ongoing obligations to citizens and creditors.

As of the close of the current fiscal year, the City of Bushnell's governmental funds reported combined ending fund balances of $948,351, an increase of $135,510 in comparison with the prior year.

Approximately 48% of this total amount $462,658 is available for spending at the government's discretion.

At the end of the current fiscal year, unreserved fund balance for the general fund was $462,658 or approximately 23% of total general fund expenditures.

Overview or the Financial Statements This management discussion and analysis is intended to serve as an introduction to the City of Bushnell's basic financial statements. The City of Bushnell's basic financial statement comprises 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 statement themselves.

1) Government-wide Financial Statements The government-wide financial statements are designed to provide readers with a broad overview of the City of Bushnell's finances, in a manner similar to a private-sector business.

The statement of new assets presents information on all of the City of Bushnell's assets and liabilities, with the difference between the two reported as net assets. Over time, increases or decreases in net assets may serve as a useful indicator of whether the financial position of the City of Bushnell is improving or deteriorating.

The statement of activities presents information showing how the government's net assets changed during the most recent fiscal year. All changes in net assets are reported as soon as the underlying event giving rise to the change occurs, regardless of the timing of related cash flows. Thus, revenues and expenses are reported in this statement for some items that will only result in cash flows in future fiscal period (e.g.,

uncollected taxes and earned but unused vacation leave).

The government-wide financial statements can be found on pages 10-12.

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2) Fund Financial Statements A fund is a grouping of related accounts that is used to maintain control over resources that have been segregated for specific activities or objectives. The City of Bushnell, like other state and local governments, uses fund accounting to ensure and demonstrate compliance with finance-related legal requirements. All of the funds of the City of Bushnell 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.

Because 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. By doing so, readers may 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.

The City of Bushnell maintains three individual governmental funds. 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. Data from the other governmental funds is provided in the form of combining statements elsewhere in this report.

The City of Bushnell adopts an annual appropriated budget for its general fund. A budgetary comparison statement has been provided for the general fund to demonstrate compliance with this budget.

The basic governmental fund financial statements can be found on pages 13-16.

Proprietary Fun - Enterprise funds are used to report the same functions presented as business-type activities in the government-wide financial statements. The City of Bushnell uses enterprise funds to account for its electric distribution operation, water services, wastewater services, and sanitation services.

Proprietary funds provide the same type of information as the government-wide financial statements, only in more detail. The proprietary fund financial statements provide separate information for the electric, water, wastewater and sanitation services, of which all are considered to be major funds of the City of Bushnell.

The basic proprietary fund financial statements can be found on pages 17-21.

FiduciaryFund - Fiduciary funds are used to account for resources held for the benefit of parties outside the government. Fiduciary funds are not reflected in the government-wide financial statement because the resources of those funds are not available to support the City of Bushnell's own programs. The accounting used for fiduciary funds is much like that used for proprietary funds.

The basic fiduciary fund financial statements can be found of pages 22-23 of this report.

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3) Notes to the Financial Statements The notes provide additional information that is essential to a full understanding of the data provided in the government-wide and fund financial statements. The notes to the financial statements can be found on pages 2446 of this report.

4) Other Information In additional to the basic financial statements and accompanying notes, this report also presents certain required supplementary information concerning the City of Bushnell's progress in funding its obligation to provide pension benefits to its employees. Required supplementary information can be found on page 47-51 of this report.

Government-wide Financial Analysis As noted earlier, net assets may serve over time as a useful indicator of a government's financial position.

In the case of the City of Bushnell, assets exceeded liabilities by $9,788,940 at the close of the most recent fiscal year.

By far the largest portion of the City of Bushnell's net assets, 81% reflects its investment in capital assets (e.g., land, buildings, machinery, and equipment) less any related debt used to acquire those assets that is still outstanding. The City of Bushnell uses these capital assets to provide services to citizens consequently; these assets are not available for future spending. Although the City of Bushnell's investment in its capital assets is reported net of related debt, it should be noted that the resources needed to repay this debt must be provided from other sources, since the capital assets themselves cannot be used to liquidate these liabilities.

An additional portion of the City of Bushnell's net assets 5% represents resources that are subject to external restrictions on how they may be used. The remaining balance of unrestricted net assets

$1,262,075 may be used to meet the government's ongoing obligations to citizens and creditors.

At the end of the current fiscal year, the City of Bushnell is able to report 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.

The government's net assets decreased by $151,075 during the current fiscal year.

The Wastewater utility 'was operated at a full year within the current fiscal year. While expenditures reflect a full year, the anticipated customer bases for revenues do not. The City of Bushnell projected a larger customer base at the start up of the system than what is reflected within the financial report.

Therefore, the City of Bushnell's cash position was decreased resulting in a decrease of net assets.

Governmental Activities - Governmental activities increased the City of Bushnell's net assets by

$178,985 thereby accounting for 31% of the total in the net assets of the City of Bushnell.

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CITY OF BUSHNELL'S NET ASSETS Business-Type 2004 Governmental Activities Total Current and other assets $ 1,084,373 $ 2,040,361 $ 3,124,734 Capital assets 2,848.334 8,877.356 11.725,690 Total assets 3,932,707 10,917.717 14.850.424 Long-term liabilities outstanding 785,182 3,090,975 3,876,157 Other liabilities 136,022 1.049.305 1.185.327 Total liabilities 921.204 4.140.280 5.061,484 Net assets:

Invested in capital assets, net of related debt 2,146,813 5,865,343 8,012,156 Restricted 485,693 29,016 514,709 Unrestricted 378.997 883.078 1.262,075 Total net assets 3.011.503 6.777.437 9.788.940 CITY OF BUSHNELL'S CHANGES IN NET ASSETS Business-Type 2004 Governmental Activities Total Revenues Program revenues:

Charges for Services 130,105 3,697,327 3,827,432 Operating grants and contributions 126,089 64,737 190,826 Capital grants and contributions 54,395 109,084 163,479 General revenues:

Property taxes 283,977 283,977 Other taxes 642,433 642,433 Other revenues 393.197 12.1 52 405,289 Total revenues 1.630.136 3.883.300 5,513,436 Expenses:

General government 389,674 389,674 Public safety 696,291 696,291 Physical Environment 12,066 12,066 Transportation 371,970 371,970 Culture and recreation 358,638 358,638 Interest on Long-term debt 36,512 36,512 Electric Utility 2,269,014 2,269,014 Water Utility 435,197 435,197 Sanitation 393,609 393,609 Wastewater Utility 701.540 701.540 Total expenses 1.865.151 3,799,360 5,664.511 Increase in net assets before transfer (235,015) 83,940 (151,075)

Transfers 414.000 (414.000) 0 Increase in net assets 178,985 (330,060) (151,075)

Net assets beginning 2.832.518 7.107.497 9,788.941 Net assets ending $ 3.011.503 $ 6.777,437 $ 9,788,940 6

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• Property taxes increased by $103,632, or 61% during the year. Most of this increase is attributed to the growth and development within the municipal limits as well as the approved increase in the millage rate.

For the most part, increases in expenses closely paralleled inflation and growth in the demand for services. One noteworthy exception, however, was the City of Bushnell streets department. In that instance, the growth in expenses reflects the cost of additional debris removal and repairs as necessitated by an unusually harsh hurricane season.

Business-type Activities - Business-type activities decreased the City of Bushnell's net assets by

$330,060 of the total in the government's net assets. A key element of this decrease was the new utility being added to the City's services provided. This utility was the Wastewater utility. With this being a new utility, many customers were not on the system for a complete year, therefore projected revenues were not met for the fiscal year. The City expects this utility to grow in the upcoming year to full capacity, contributing to a growth in business type assets. Other factors for the net assets are as follows:

• Charges for services for business-type activities increased by 25%. This can be attributed to the increase in sales due to the municipal limit and commercial growth.

• Revenues also increased as a result of a modest increase in sales. The increase in sales and rates account for the $633,253 increase in charge for services for Electric, Water, Wastewater and Sanitation services.

• With the continued growth within the Wastewater customer base the anticipated increase in charges for services should be reflective within the next fiscal year.

• Growth within the City's municipal limits also contributed to additional customers within the service area for the City of Bushnell. These annexations generated an increase in the customer base, therefore increasing charges for services revenue.

Financial Analysis of the Government's Funds As noted earlier, the City of Bushnell uses fund accounting to ensure and demonstrate compliance with finance-related legal requirements.

Goverinientalfund- The focus of the City of Bushnell's governmental funds is to provide information on near-term inflows, outflows, and balances of spendable resources. Such information is useful in assessing the City of Bushnell'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 the end of the current fiscal year, the City of Bushnell's governmental funds reported combined ending fund balances of $948,351, an increase of $140,565 in comparison with the prior year.

Approximately 48% of this total amount constitutes unreserved fund balance, which is available for spending at the government's discretion. The remainder of fund balance is reserved to indicate that it is not available for new spending because it has already been committed to pay perpetual care for the cemetery.

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The general fund is the chief operating fund of the City of Bushnell. At the end of the current fiscal year, unreserved fund balance of the general fund was $462,658 while the total fund balance reached $948.351.

As a measure of the general fund's liquidity, it may be useful to compare both unreserved fund balance and total fund balance to total fund expenditures. Unreserved fund balance represents 23% of total general fund expenditures, while total fund balance represents 48% of that same amount.

The fund balance of the City of Bushnell's general fund increased by $131,690 during the current fiscal year. Key factors in this growth are as follows:

• The City Council took a proactive choice to increase ad valorem taxes in an effort to diminish the ongoing decline in fund balance. The current millage levy is 3.50.

• The departments such as administration, police, street, parks and recreation have reduced expenditures in an attempt to assist with the increase in fund balance for the general fund.

Proprietaryfunds - The City of Bushnell's proprietary funds provide the same type of information found in the government-wide financial statements, but in more detail.

Unrestricted net assets of the Electric, Water, Wastewater and Sanitation fund at the end of the year amount to $883,078. Other factors concerning the finances of these funds have already been addressed in the discussion of the City of Bushnell's business-type activities.

General Fund Budgetarv Highlights Differences between the original budget and the final amended budget were relatively minor and can be briefly summarized as follows:

• Decrease in Grant revenue, due to lack of project completion as projected.

• Increase in all departments for additional expenses related to hurricanes.

During the year, however, revenues exceeded budgetary estimates in a greater amount than expenditures exceeded budgetary estimates, thus eliminating the need to draw upon existing fund balance.

Capital Asset and Debt Administration Capital assets. The City of Bushnell's investment in capital assets for its governmental and business type activities as of September 30, 2004, amounts to $11,725,690 (net of accumulated depreciation). This investment in capital assets includes land, buildings and system, improvements, machinery and equipment.

Capital asset events during the current fiscal year included the following:

• Small amounts of utility plant additions made to each of the utilities within the year.

• Minor improvements, building and equipment purchases made within the governmental fund.

Additional information on capital assets can be located on page 34, within the notes to the financial statement.

Long-term debt. The City of Bushnell's total debt increased by $43,770 during the current fiscal year.

The key factor in this increase was the lease of two police cruisers.

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Economic Factors and Next Year's Budgets and Rates Economic Factors. Bushnell is the County Seat of Sumter County, reported Economic and Business research as "The fastest growing County in the State of Florida in annual population change from 1998 to 2002". Situated just 50 miles north of Tampa and 50 miles west of Orlando, Bushnell is strategically located between Interstate 75 and the Florida Turnpike. Our location provides easy transportation access to both of these metropolitan areas.

Easily accessible from many areas and being the County Seat in rural Sumter County makes Bushnell's market area much larger than its corporate limits. Independent market studies suggest that the population within the market area affected by the City of Bushnell could exceed 50,000 people. In addition to this significant number, traffic studies conducted by the Sumter County Road & Bridge Department indicate average daily traffic counts of 17,000 cars on West Belt Avenue. These statistics are mentioned only to illustrate the much larger market and social forces affecting this small community on a daily basis.

Within the utility service area, which comprises mostly the incorporated City limits and some small areas in the unincorporated Sumter County, the City of Bushnell services a total of 1120-metered customers, 330 of which are commercial customers. Bushnell exhibits steady growth in its commercial sector.

Continued community growth and development is expected along Main St. north, and SR 48 west corridor to the 1-75 interchange. The SR 48 and I - 75 interchange still has a number of commercial undeveloped parcels of varying size; currently, the City serves potable water, wastewater and sanitation services to this area.

Based on current trends and projections, it is anticipated that the interchange area will have the most impact on the commercial sector of the City of Bushnell. As such, it will present the City with significant challenges in order to preserve adopted level of service of its infrastructure while allowing quality develops in the area.

Next Fiscal Year Budget and Rates. The utility rates to be utilized in the forecast of revenues for the next fiscal year budget would be Electric Utility a 3% increase, Water Utility a 6% increase, and no increase in Wastewater Utility and Sanitation Utility over existing rates. All departments will continue to minimize capital expenditures in an attempt to regain reserves.

Requests for Information This financial report is designed to provide a general overview of the City of Bushnell'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 City Clerk/Finance Director, P. 0. Box II 5, Bushmell, Fl 33513 9

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BASIC FINANCIAL STATEMENTS L

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CITY OF BUSHNELL, FLORIDA STATEMENT OF NET ASSETS SEPTEMBER 30,2004 Business-Governmental Type Assets Activities Activities Total Cash and Cash Equivalents S 842,910 $ 1,189,700 S 2,032,610 Receivables, Net 47,789 467,235 515,024 Due from Other Governments 193,674 145,562 339,236 Inventory and Prepaids 0 234,435 234,435 Capital Assets Not Being Depreciated:

Land 486,370 541,936 1,028,306 Capital Assets - Depreciated:

Utility Plant in Service 0 8,796,278 8,796,278 Buildings 1,554,518 367,084 1,921,602 Improvements Other Than Buildings 706,805 0 706,805 Machinery, Equipment and Furniture 1,643,760 2,293,464 3,937,224 Less Accumulated Depreciation (1,543,119) (3,121,406) (4,664,525)

Unamortized Bond Issue Costs 0 3,429 3,429 Total Assets 3,932,707 10,917,717 14,850,424 Liabilities Accounts and Retainage Payable 93,174 333,709 426,883 Customer Deposits 0 131,505 131,505 Accrued Liabilities 34,496 27,925 62,421 Unearned Revenue:

Licenses 8,352 0 8,352 Power Cost Recoveries 0 54,316 54,316 Developer's Agreement 0 320,155 320,155 Decommissioning Liability 0 170,776 170,776 Accrued Interest Payable 0 10,919 10,919 Noncurrent liabilities:

Due Within One Year 123,169 89,298 212,467 Due in More Than One Year 662,013 3,001,677 3,663,690 Total Liabilities 921,204 4,140,280 5,061,484 Net Assets Invested in Capital Assets, Net of Related Debt 2,146,813 5,865,343 8,012,156 Restricted for:

Perpetual Care (Expendable) 485,693 0 485,693 Debt Service 0 29,016 29,016 Unrestricted 378,997 883,078 1,262,075 Total Net Assets $ 3,011,503 S 6,777,437 S 9,788,940 See accompanying notes.

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Li CITY OF BUSHNELL, FLORIDA STATEMENT OF ACTIVITIES FOR TIlE YEAR ENDED SEPTEMBER 30,2004 L Program Revenues Charges Operating Capital Functions/Programs Governmental Activities Expenses for Services Grants and Contributions Grants and Contributions .1 General Government Public Safety Physical Environment S 389,674 696,291 12,066 S 19,875 56,931 3,682 S

23,396 0

0 S 52,889 1,506 0

I1 Transportation 371,970 0 102,693 0 Culture and Recreation Interest on Long-term debt Total Governmental Activities 358,638 36,512 1,865,151 49,617 0

130,105 126,089 0

0 54,395 0

0 I Business-type Activities Electric Utility 2,269,014 2,457,451 60,101 0 I

Water Utility 435,197 464,557 2,930 67,000 Sanitation Wastewatcr Utility Total Business-type Activities S 393,609 701,540 3,799,360 S 432,064 343,255 3,697,327 S 1,706 64,737 0

S 42,084 109,084 0

I1 General Revenues, Special Items and Transfers I1 Taxes:

Property Taxes Franchise Taxes I

Public Service Taxes Other Taxes State-shared Revenues Investment Income I

I1 Miscellaneous Transfers Total General Revenues, Special Items and Transfers Change in Net Assets Net Assets, Beginning of Year Net Assets, End of Year L I

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See accompanying notes. I 11 I

Net (Expense) Revenue and Change in Net Assets Primary Government Governmental Business-Type Activities Activities Total S (316,910) $ 0 S (316,910)

(614,458) 0 (614,458)

(8,384) 0 (8,384)

(269,277) 0 (269,277)

(309,021) 0 (309,021)

(36,512) 0 (36,512)

(1,554,562) 0 (1,554,562) 0 248,538 248,538 0 99,290 99,290 0 40,161 40,161 0 (316,201) (316,201) 0 71,788 71,788 283,977 0 283,977 214,398 0 214,398 228,892 0 228,892 199,143 0 199,143 301,788 0 301,788 2,939 12,152 15,091 88,410 0 88,410 414,000 (414,000) 0 1,733,547 (401,848) 1,331,699 178,985 (330,060) (151,075) 2,832,518 7,107,497 9,940,015 S 3,011,503 S 6,777,437 S 9,788,940 See accompanying notes.

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CITY OF BUSHNELL, FLORIDA I.

BALANCE SHEET ALL GOVERNMENTAL FUNDS L SEPTEMBER 30,2004 LI Other Total General Fund Governmental Funds Governmental Funds

.1 Assets Cash and Cash Equivalents Other Receivables S 351,303 47,789

$ 491,607 0

$ 842,910 47,789 I

Due from Other Funds 820 0 820 Due from Other Governments 192,844 830 193,674 Total Assets 592,756 492,437 1,085,193 Liabilities and Fund Balances I

Liabilities Accounts Payable 92,977 197 93,174 L Other Accrued Liabilities 34,496 0 34,496 Deposits 2,625 4,500 7,125 Due to Other Funds Unearned Revenue 0

0 820 1,227 820 1,227 L

Total Liabilities 130,098 6,744 136,842 Fund Balances I

Reserved for:

Perpetual Care Unreserved Reported in:

0 485,693 485,693 I General Fund 462,658 0 462,658 Total Fund Balances 462,658 485,693 948,351 1 Total Liabilities and Fund Balances S 592,756 $ 492,437 $ 1,085,193 L I

1 See accompanying notes. I 13 I

CITY OF BUSHNELL, FLORIDA RECONCILIATION OF THE BALANCE SHEET OF GOVERNMENTAL FUNDS TO TIlE STATEMENT OF NET ASSETS AS OF SEPTEMBER 30,2004 Total Fund Balances of Governmental Funds $ 948,351 Amounts Reported for Governmental Activities in the Statement of Assets are Different Because:

Capital assets used in governmental activities are not financial resources and, therefore, are not reported in the funds. The cost of the assets is $4,391,453 and the accumulated depreciation is $1,543,119. 2,848,334 Long-term liabilities are not due and payable in the current period and accordingly are not reported as fund liabilities.

Interest on long-term debt is not accrued in governmental funds, but rather is recognized as an expenditure when due.

All liabilities, both current and long-term, are reported in the statement of net assets. Long-term liabilities at year-end consist of:

Notes Payable and Certificates of Obligation (661,089)

Capital Lease Obligations (40,432)

Compensated Absences (83,661)

Total Net Assets of Governmental Activities $ 3,011,503 See accompanying notes.

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1 CITY OF BUSHNELL, FLORIDA STATEMENT OF REVENUES, EXPENDITURES, AND CHANGES IN FUND BALANCES I

ALL GOVERNMENTAL FUNDS SEPTEMBER 30,2004 I General Other Governmental Total Governmental I

Fund Funds Revenues Taxes S 1,042,770 S 0 $

Funds 1,042,770 I

Licenses and Permits 12,150 0 12,150 Intergovernmental Revenues 267,535 0 267,535 Grant Revenue 153,682 0 153,682 Charges for Service 32,615 0 32,615 Fines and Forfeitures Miscellaneous Revenues 56,931 41,473 0

22,980 56,931 64,453 I

Total Revenues 1,607,156 22,980 1,630,136 Expenditures L

Current:

General Government 371,766 19,160 390,926 I Public Safety 633,303 0 633,303 Physical Environment 12,066 0 12,066 Transportation 345,183 0 345,183 I Culture and Recreation 292,833 0 292,833 Capital Outlay 109,767 0 109,767 Debt Service: L Principal 131,806 0 131,806 Interest 36,512 0 36,512 Total Expenditures (1,933,236) (19,160) (1,952,396) L (Deficiency) Excess of Revenues (Under) Over Expenditures (326,080) 3,820 (322,260) L Other Financing Sources (Uses)

Transfers in 414,000 0 414,000 Capital Lease 43,770 0 43,770 Total Other Financing Sources Net Change in Fund Balances 457,770 0 457,770 I1 131,690 3,820 135,510 Fund Balance, Beginning of Year Fund Balances, End of Year S 330,968 462,658 $

481,873 485,693 S 812,841 948,351 I1 L

See accompanying notes. I 15 I

CITY OF BUSHNELL, FLORIDA RECONCILIATION OF THE STATEMENT OF REVENUES, EXPENDITURES, AND CHANGES IN FUND BALANCES OF GOVERNMENTAL FUNDS TO THE STATEMENT OF ACTIVITIES FOR TIlE YEAR ENDED SEPTEMBER 30,2004 Net Change in Fund Balances - Total Governmental Funds S 135,510 Amounts Reported for Governmental Activities in the Statement of Activities are Different Because:

Governmental funds report capital purchases as expenditures. However, in the statement of activities, the cost of those assets is depreciated over their estimated useful lives and reported as depreciation expense. This reconciling item is the amount by which depreciation expense of S164,121 exceeded capital purchases of$109,767. (54,354)

The issuance of bonds and similar long-term debt provides current financial resources to governmental funds and thus contribute to the change in fund balance. In the statement of net assets, however, issuing debt increases long-term liabilities and does not affect the statement of activities. Similarly, repayment of principal is an expenditure in the governmental funds, but reduces the liability in the statement of net assets. Also governmental funds report the effect of issuance costs, premium, discounts, and similar items when debt is first issued, whereas these amounts are deferred and amortized in the statement of activities. The amounts of the items that make up these differences in treatment of long-term debt and related items are:

Debt Issued or Incurred:

Capital Leases (43,770)

Principal Repayments:

Notes Payable and Certificates of Obligation 128,468 Capital Leases 3,338 Some expenses reported in the statement of activities such as compensated absences do not require the use of current financial resources and are not reported as expenditures in governmental funds:

Net Increase in Compensated Absences 9,793 Change in Net Assets of Governmental Activities S 178,985 See accompanying notes.

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I CITY OF BUSHNELL, FLORIDA STATEMENT OF NET ASSETS PROPRIETARY FUNDS SEPTEMBER 30,2004 I

Business-Type Activities Electric Water Wastewater L

Utility Utility Sanitation Utility Fund Fund Fund Fund Total Assets I

Current Assets Cash and Cash Equivalents S 482,098 S 130,283 S 235,319 $ 0 $ 847,700 I

Restricted Cash and Investments:

Customer Deposits 131,416 0 0 0 131,416 Revenue Bonds Receivables:

0 0 0 39,808 39,808 I Customers (Net of Allowance for Uncollectible Accounts)

Due from Other Governments 339,626 39,418 46,832 67,000 47,741 0

33,036 39,144 467,235 145,562 I1 Due from Other Funds 0 11,805 0 0 11,805 Interfund Receivable Inventories, at Cost 144,923 169,597 57,655 0 0 0 7,183 0 144,923 234,435 I1 Total Current Assets 1,307,078 313,575 283,060 119,171 2,022,884 I

Noncurrent Assets Restricted Assets Cash and Investments - CR-3 Nuclear Decommissioning 170,776 0 0 0 170,776 I1 Capital Assets:

Land 2,300 43,340 0 496,296 541,936 I Utility Plant in Service 1,722,190 1,884,920 0 5,189,168 8,796,278 Buildings Machinery and Equipment 230,544 959,982 136,540 832,931 0

344,689 155,862 0 367,084 2,293,464 I (Accumulated Depreciation and Amortization) (1,570,230) (1,064,307) (278,074) (208,795) (3,121,406)

I Total Capital Assets -

Cost Less Depreciation 1,344,786 1,833,424 66,615 5,632,531 8,877,356 Other Assets Bond Issue Costs, Net 0 3,429 0 0 3,429

.1 Advances to Other Funds 850,100 0 0 0 850,100 Total Other Assets Total Noncurrent Assets 850,100 2,365,662 3,429 1,836,853 0

66,615 5,632,531 0 853,529 9,901,661 I1 Total Assets $3,672,740 S2,150,428 S 349,675 S5,751,702 S11,924,545 I

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See accompanying notes.

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CITY OF BUSHNELL, FLORIDA STATEMENT OF NET ASSETS PROPRIETARY FUNDS SEPTEMBER 30,2004 (Concluded)

Business-Type Activities

-a- -....

Electric Water Wastewater Utility Utility Sanitation Utility Fund Fund Fund Fund Total Liabilities and Net Assets Current Liabilities Accounts Payable S 207,628 S 63,083 S 19,565 S 43,433 S 333,709 Accrued Expenses 14,271 4,347 3,930 5,377 27,925 Compensated Absences 6,058 4,228 4,718 788 15,792 Due to Other Funds 0 0 0 11,805 11,805 Interfund Payable 0 0 0 144,923 144,923 Unearned Revenue:

Developer's Agreement 0 0 0 320,155 320,155 Power Cost Recovers 54,316 0 0 0 54,316 Total Current Liabilities 282,273 71,658 28,213 526,481 908,625 Current Liabilities (Payable from Restricted Assets)

Current Portion of Revenue Bonds and Notes Payable 25,506 20,000 0 28,000 73,506 Interest Payable 127 0 0 10,792 10,919 Customer Deposits 131,505 0 0 0 131,505 Total Current Liabilities (Payable from Restricted Assets) 157,138 20,000 0 38,792 215,930 Noncurrent Liabilities Revenue Bond 0 0 0 2,772,000 2,772,000 Compensated Absences 24,230 16,914 18,874 3,152 63,170 Notes Payable 25,507 141,000 0 0 166,507 Deferred Credit -

CR-3 Decommissioning 170,776 0 0 0 170,776 Advances from Other Funds 0 220,100 0 630,000 850,100 Total Noncurrent Liabilities 220,513 378,014 18,874 3,405,152 4,022,553 Total Liabilities 659,924 469,672 47,087 3,970,425 5,147,108 Net Assets Invested in Capital Assets, Net of Related Debt 1,293,773 1,672,424 66,615 2,832,531 5,865,343 Restricted for Debt Services 0 0 0 29,016 29,016 Unrestricted 1,719,043 8,332 235,973 (1,080,270) 883,078 Total Net Assets $ 3,012,816 S 1,680,756 $ 302,588 $ 1,781,277 S 6,777,437 See accompanying notes.

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CITY OF BUSHNELL, FLORIDA STATEMENT OF REVENUES, EXPENSES, AND CHANGES IN FUND NET ASSETS PROPRIETARY FUNDS L

FOR TIlE YEAR ENDED SEPTEMBER 30,2004 L

Business-Type Activities Electric Utility Water Utility Sanitation Wastewater Utility I

Fund Fund Fund Fund Total Operating Revenues Charges for Services S 2,457,451 S 464,557 S 432,064 S 343,255 $ 3,697,327 L

Operating Expenses Demand and Energy Charge 1,628,969 0 0 0 1,628,969 I

CR-3 Operations and Maintenance 59,475 0 0 0 59,475 Landfill Charges Salaries and Benefits 252,389 0

199,264 0 182,094 135,786 149,503 0 182,094 736,942 I

Other Costs of Sales and Services I

203,618 156,386 57,394 253,233 670,631 Depreciation and Amortization 121,342 77,047 18,161 169,304 385,854 (Total Operating Expenses) (2,265,793) (432,697) (393,435) (572,040) (3,663,965)

Operating Income (Loss) 191,658 31,860 38,629 (228,785) 33,362 t Nonoperating Revenues (Expenses)

Interest Income Interest Expense 7,955 (3,221) 1,389 (2,500) 1,628 (174) 1,180 (129,500) 12,152 (135,395)

I Grant Revenues Other Income Total Nonoperating Revenues 39,418 20,683 2,930 0 0 1,706 42,084 0

81,502 25,319 I (Expenses)

Income (Expense) Before Contributions 64,835 1,819 3,160 (86,236) (16,422)

I and Transfers 256,493 33,679 41,789 (315,021) 16,940 I

Capital Contributions - Grants 0 67,000 0 0 67,000 Transfers (out) (352,000) (20,000) (42,000) 0 (414,000)

Total Capital Contributions and Transfers (352,000) 47,000 (42,000) 0 (347,000)

Change in Net Assets (95,507) 80,679 (211) (315,021) (330,060) I1 Net Assets, Beginning of Year 3,108,323 1,600,077 302,799 2,096,298 7,107,497 Net Assets, End of Year S 3,012,816 S 1,680,756 S 302,588 $ 1,781,277 S 6,777,437 L

I See accompanying notes. I1 19 L

CITY OF BUSHNELL, FLORIDA STATEMENT OF CASH FLOWS PROPRIETARY FUNDS FOR THE YEAR ENDED SEPTEMBER 30,2004 Business-Type Activities Electric Water Wastewater Utility Utility Sanitation Utility Fund Fund Fund Fund Total Cash Flows from Operating Activities Cash Received from Customers, Including Cash Deposits S 2,390,622 $ 451,577 S 428,037 S 324,383 $ 3,594,619 Cash Paid to Suppliers (1,790,872) (196,252) (131,849) (250,068) (2,369,041)

Cash Paid to Employees for Services (249,677) (100,975) (235,750) (149,503) (735,905)

Net Cash Provided by (Used in)

Operating Activities 350,073 154,350 60,438 (75,188) 489,673 Cash Flows from Noncapital Financing Activities Interfund Receivable and Payable (144,923) 0 0 144,923 0 Grant Funds 0 0 0 62,440 62,440 Transfers out (352,000) (20,000) (42,000) 0 (414,000)

Net Cash Provided by (Used in)

Noncapital and Related Financing Activities (496,923) (20,000) (42,000) 207,363 (351,560)

Cash Flows from Capital and Related Financing Activities Acquisition and Construction of Capital Assets (68,327) (137,842) (7,974) (89,930) (304,073)

Principal Paid on Capital Debt (24,534) (20,000) (22,500) 0 (67,034)

Interest Paid (3,221) (2,500) (1,070) (129,500) (136,291)

Other Nonoperating Income 20,683 2,930 1,706 0 25,319 Net Cash Provided by (Used in) Capital and Related Financing Activities (75,399) (157,412) (29,838) (219,430) (482,079)

Cash Flows from Investing Activities Interest Income 7,955 1,389 1,628 1,180 12,152 Net Increase (Decrease) in Cash and Cash Equivalents (214,294) (21,673) (9,772) (86,075) (331,814)

Cash, Beginning of Year 827,808 151,956 245,091 125,883 1,350,738 Cash, End of Year $ 613,514 $ 130,283 $ 235,319 $ 39,808 S 1,018,924 See accompanying notes.

20

I CITY OF BUSHNELL, FLORIDA STATEMENT OF CASH FLOWS PROPRIETARY FUNDS I

FOR TIlE YEAR ENDED SEPTEMBER 30,2004 (Concluded) I Business-Type Activities Electric Water Wastewater I Utility Utility Sanitation Utility Fund Fund Fund Fund Total Shown in the Financial Statements As I Cash and Cash Equivalents S 482,098 S 130,283 $ 235,319 $ 0 $ 847,700 Restricted Cash Total $

131,416 613,514 S 130,283 0

S 235,319 0

S 39,808 39,808 171,224 S 1,018,924 L Reconciliation of Operatine Income to Net Cash Provided by (Used in) Activities I Operating Income (Loss) S 191,658 $ 31,860 $ 38,629 $ (228,785) S 33,362 Adjustments to Reconcile Operating Income (Loss) to Net I Cash Provided by (Used in)

Operating Activities:

Depreciation and Amortization Changes in Assets Decrease 127,941 77,047 18,161 169,304 392,453 I (Increase) and Liabilities Increase (Decrease): I Accounts Receivable, Net (54,857) (12,980) (4,027) (18,872) (90,736)

Inventory Accounts Payable 28,081 66,510 2,151 53,260 3,738 3,937 (5,857) 2,997 28,113 126,704 I Accrued Expenses 2,712 3,012 0 6,025 11,749 Customer Deposits Total Adjustments (11,972) 158,415 122,490 0 0 21,809 153,597 0 (11,972) 456,311 I Net Cash Provided by (Used in)

Operating Activities $ 350,073 S 154,350 S 60,438 $ (75,188) S 489,673 I

Noncash Investing, Capital and Financing Activities Capital - None I I

I I

See accompanying notes.

I 21 I

CITY OF BUSHNELL, FLORIDA STATEMENT OF FIDUCIARY NET ASSETS PENSION TRUST FUNDS SEPTEMBER 30,2004 Pension Trust Funds Assets Cash and Cash Equivalents $ 44,975 Contributions Receivable 16,931 Stock and Bond Mutual Funds 482,571 Due from Other Funds 135 Total Assets 544,612 Liabilities Due to Other Funds 135 Net Assets Held in Trust for Pension Benefits $ 544,477 See accompanying notes.

22

i, CITY OF BUSHNELL, FLORIDA STATEMENT OF CHANGES IN FIDUCIARY NET ASSETS PENSION TRUST FUNDS 1

FOR TIlE YEAR ENDED SEPTEMBER 30,2004 I

Pension Trust Funds I

Additions Contributions:

Employer $ 110,373 I

State 32,668 Employee Total Contributions 2,715 145,756 I

Investment Earnings 54,240 Less: Investment Management Fees Net Investment Income (3,918) 50,322 I

Total Additions 196,078 Deductions I

Pension Benefit Payments and Refunds 1,233 General and Administrative (Total Deductions) 6,190 (7,423)

I Net Increase 188,655 I.

Net Assets held in Trust for Pension Benefits I Beginning of Year End of Year $

355,822 544,477 L

I I

I See accompanying notes. .1 23 I

NOTES TO FINANCIAL STATEMENTS CITY OF BUSHNELL, FLORIDA Note 1- Description of Funds and Summary of Sianificant Accountine Policies The financial statements of the City of Bushnell, Florida (the City) have been prepared in conformity with generally accepted accounting principles (GAAP) as applied to governmental units. The Governmental Accounting Standards Board (GASB) is the accepted standard setting body for establishing governmental accounting and financial reporting principles. For the reporting year ended September 30, 2004, the City has implemented GASB Statement No. 34, Basic FinancialStatement 's-andManagement's Discussion andAnalysis-for State and Local Governments. Significant City accounting policies are described below.

Reporting Entity The City is a political subdivision of the State of Florida located in Sumter County. The City was established under the legal authority of the Laws of Florida, Chapter 57-105. The City operates under a council-manager form of government. The legislative branch of the City is composed of a four-member elected City Council, and an elected mayor. The Mayor and City Council are governed by the City Charter by state and local laws and regulations. The Mayor and City Council are responsible for the establishment and adoption of policy. The execution of such policy is the responsibility of the City Manager. The City provides services to its residents in many areas, including public safety (police), highways and streets, utilities, sanitation, culture and recreation, public improvements, and general administrative services.

In evaluating the City as a reporting entity, management has addressed all potential component units (traditionally separate reporting entities) for which the City may or may not be financially accountable and, as such, be included 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 its will on the organization, or (2) there is a potential for the organization to provide specific financial benefit to or impose specific financial burden on the City. Additionally, the primary government is required to consider other organizations for which the nature and significance of their relationship with the primary government are such that exclusion would cause the reporting entity's financial statements to be misleading or incomplete. Management has determined that there are no component units that the City is required to report on.

Government-wide and Fund Financial Statements The govenmnent-wide financial statements (i.e., the statement of net assets and the statement of activities) report information on all of the nonfiduciary activities of the primary government.

For the most part, the effect of interfund activity has been removed from these 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 services. The statement of activities demonstrates the degree to which the direct expenses of a given function or segment is offset by program revenues. Direct expenses are those that are clearly identifiable with a specific function or segment.

24

NOTES TO FINANCIAL STATEMENTS L CITY OF BUSHNELL, FLORIDA (Continued)

Note 1- Description of Funds and Summary of Significant Accounting Policies (Continued)

Government-wide and Fund Financial Statements (Concluded)

Indirect expenses are allocated automatically and certain indirect costs are included in L

program expenses reported for individual function and activities. Program revenues include:

1) charges to customers or applicants who purchase, use, or directly benefit from goods, services, or privileges provided by a given function or segment; and 2) grants and contributions that are restricted to meeting the operational or capital requirements of a particular function or segment. Taxes and other items not properly included among program revenues are reported instead as general revenues.

Separate financial statements are provided for governmental funds, proprietary funds, and fiduciary funds. The fiduciary funds are excluded from the government-wide financial statements. Major individual governmental and enterprise funds are reported as separate columns in the fund financial statements.

Measurement Focus, Basis of Accounting, and Financial Statement Presentation Government-wide Financial Statements The government-wide financial statements are reported using the economic resources measurement focus and the accrual basis of accounting, as are the proprietary 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 revenue in the year for which they are levied. Grants and similar items are recognized as revenue as soon as all eligibility requirements imposed by the provider have been met. As a general rule, the effect of interfund activity has been eliminated from the government-wide activities.

Fund Financial Statements Governmental fund financial statements are reported using the current financial resources measurement focus and the modified accrual basis of accounting. Revenues are recognized as soon as they are both measurable and available. Revenues are considered to be available when they are collectible within the current period or soon enough thereafter to pay liabilities of the current period. For this purpose, the government considers revenues to be available if they are collected within sixty days of the end of the current fiscal period; except for the hurricane-related expense reimbursement grants which are considered available if they are collected within one year of the end of the current fiscal period. Debt service expenditures, as well as expenditures related to compensated absences and claims and judgments, are recorded only when payment is due.

I 25 1

NOTES TO FINANCIAL STATEMENTS CITY OF BUSHNELL, FLORIDA (Continued)

Note 1- Description of Funds and Summary of Significant Accounting Policies (Continued)

Measurement Focus, Basis of Accounting, and Financial Statement Presentation (Concluded)

Fund Financial Statements (Conduded)

Property taxes, franchise fees, licenses and interest associated with the current fiscal period are all considered to be susceptible to accrual and so have been recognized as revenues of the current fiscal period. Only the portion of special assessments receivable due within the current fiscal period is considered to be susceptible to accrual as revenue of the current period. All other revenue items are considered to be measurable and available only when cash is received by the government.

The City operates the following major governmental fund:

• Governmental Funds Governmental funds are used to account for all or most of a government's general activities.

The City operates the following major governmental fund:

• The General Fund is the government's primary operating fund. It accounts for all financial resources of the general government, except those required to be accounted for in another fund.

• Proprietary Funds Proprietary funds are used to account for the City's ongoing activities which are similar to those found in the private sector, where the determination of net income is necessary or useful to sound financial administration.

The City reports the following major proprietary funds:

• The Electric Utility Fund - accounts for the fiscal activity of providing electric services to residential and commercial customers.

• The Water Utility Fund - accounts for the fiscal activity of providing water services to residential and commercial customers.

• The Wastewater Fund - accounts for the fiscal activity of providing wastewater services to residential and commercial customers.

• The Sanitation Fund - accounts for the operations and maintenance of the City's refuse collection system.

Additionally, the City reports the following nonmajor and fiduciary fund types:

26

1 NOTES TO FINANCIAL STATEMENTS CITY OF BUSHNELL, FLORIDA (Continued) l Note 1- Description of Funds and Summary of Significant Accounting Policies (Continued)

• Nonmajor Funds

• Evergreen Cemetery Fund - accounts for the proceeds and expenditures generated to maintain the City's cemetery.

• Community Development Block Grant (CDBG) Fund - to account for the receipts awarded and expenditures made in compliance with grant requirements to develop the City's downtown area.

v Fiduciary Funds

• Pension Trust Funds - account for the activities of the City's General Employees' and Police Officers' Retirement funds, which accumulate resources for pension benefit payments for qualified retiring employees. They are excluded from the government-I wide financial statements because they are fiduciary in nature and do not represent resources available to the government for operations.

Summary of Significant Accounting Policies The City conforms to all significant accounting policies to generally accepted accounting principles applicable to governmental units. The following is a summary of the more significant principles and practices used in the preparation of these financial statements.

Proprietary Funds 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 GASB. Based on the accounting and reporting standards set forth in GASB Statement No. 20, Accounting and Financial Reporting for Proprietary Funds and Other Governmental Entities That Use ProprietaryFundAccounting, the City has opted out to apply only the accounting and reporting pronouncements issued by the Financial Accounting Standards Board (FASB) on or for November 30, 1989, for business-type activities and enterprise funds.

L 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 City's enterprise funds are charges to customers for sales and services. Operating expenses for enterprise funds include the cost of sales and services, administrative expenses, and depreciation on capital assets. All revenues and expenses not meeting this definition are reported as nonoperating revenues and expenses.

27

NOTES TO FINANCIAL STATEMENTS CITY OF BUSHNELL, FLORIDA (Continued)

Note 1 - Description of Funds and Summary of Significant Accounting Policies (Continued)

Summary of Significant Accounting Policies (Conduded)

Proprietary Funds (Concluded)

When both restricted and unrestricted resources are available for use, it is the City's policy to generally use restricted resources first, and then unrestricted resources, as they are needed for their intended purposes, however, this decision is frequently made on a case-by-case basis based upon facts and circumstances. Revenues of the enterprise funds are recognized on the basis of services rendered. Billing cycles of the enterprise funds that overlap September 30, are prorated based upon meter reading dates.

Budgets and Budgetary Accounting The City's procedures in preparing and adopting the annual budget, which is adopted on a basis consistent with generally accepted accounting principles, are as follows:

• The City Manager is responsible for preparing a proposed operating budget for all governmental funds and proprietary funds for the upcoming year prior to September 30, that includes estimated revenues, proposed expenditures, and other financing sources and uses.

• Public hearings are held to obtain taxpayer comments and suggestions. The budget is enacted through passage of a resolution.

• The City Manager is authorized to transfer budgeted amounts within any fund, but may not revise total fund expenditures without the approval of the City Council. The budget data presented is in agreement with the originally adopted budget as amended by the City Council.

• Formal budgetary integration is employed as a management control device during the year for substantially all funds. Budgets are adopted on a basis consistent with generally accepted accounting principles, except that the provision for depreciation expense is not included in the budget of the proprietary funds. Total budgetary appropriations within a governmental fund type may not be exceeded legally. Appropriations lapse at the end of the year. Budget data, when presented in the basic financial statements is prepared on the same basis of accounting as that prescribed for the fund. An annual operating budget was prepared for all funds.

During the year, the City made supplemental budget appropriations which increased or decreased the budgets as necessary.

Pooled Cash and Cash Equivalents Cash includes cash on hand, demand deposits with banks, deposits in cash management pools that have the general characteristics of demand deposit accounts, as well as short-term investments with a maturity date within three months of the date acquired. The City's pooled cash account is considered to be cash equivalent since each fund can effectively deposit or withdraw funds at any time without prior notice or penalty.

28

NOTES TO FINANCIAL STATEMENTS CITY OF BUSHNELL, FLORIDA (Continued) I Note 1 - Description of Funds and Summary of Sianificant Accounting Policies (Continued)

Pooled Cash and Cash Equivalents (Concluded)

The City utilizes pooled cash and investment accounts in which each fund participates on a dollar equivalent basis (except the pension trust funds). Interest is distributed monthly based on average balances. The nature of the pooled accounts permits temporary negative cash balances upon overdrawing of cash available in individual funds, which is presented as interfund receivables and payables. The deposits and investments of the pension trust funds are held separately from those of other City funds. L Transfers Transfers are recognized in the accounting period in which the interfund receivable and payable arise. Transfers are made from the utility funds to finance operations of the general fund.

Capital Grants Accounts receivable from other governments include amounts due from grantors. Program and L capital grants for capital assets are recorded as receivables and revenues at the time reimbursable costs are incurred. Revenues received in advance of costs being incurred are deferred. Capital grants for capital asset additions to the proprietary funds are recorded as nonoperating revenues.

Investments Investments including pension funds are stated at fair value-quoted market price or the best available estimate thereof.

Receivables Utility operating revenues are generally recognized on the basis of cycle billings rendered monthly. The amount of services delivered after the last billing date and up to September 30 is estimated and accrued at year end.

Inventories and Prepaid Items Inventories held by the utility funds are priced by the weighted-average costs method at the lower of cost or market. Certain payments to vendors reflect costs applicable to future accounting periods and are recorded as prepaid items. L Cost Reimbursements Certain personal services and operating expenseslexpenditures recorded in various funds and departments are a results of services performed and expenses/expenditures incurred for the benefit of other funds and departments. In order to better reflect various funds and departments' actual costs, a cost reimbursement is recorded as a reduction in expenditures or expenses. The funds and departments that benefit from the services and expenses/expenditures record a cost reimbursement as an increase in expenditures or expenses.

L 29 1

NOTES TO FINANCIAL STATEMENTS CITY OF BUSHNELL, FLORIDA (Continued)

Note 1- Description of Funds and Summary of Significant Accounting Policies (Continued)

Capital Assets Capital assets, which include land, utility plant-in-service buildings, and equipment are reported in the applicable governmental or business-type activities columns in the govcrnment-wide financial statements. Utility plant-in-service and equipment with initial, individual costs that equal or exceed $300 and estimated useful lives of over one year are recorded as capital assets.

Capital assets are recorded at historical cost if purchased or constructed.

Capital asset purchases are recorded as capital outlay expenditures in the fund level governmental funds in the year of acquisition.

Capital Assets are depreciated using the straight-line method over the following estimated useful lives:

Buildings 32-50 Years Improvements Other Than Buildings 10-50 Years Machinery, Equipment and Furniture 3-15 Years Investment in Crystal River No. 3 Nuclear Plant 28 Years Bond Discounts and Issuance Costs Bond discounts and insurance costs for proprietary fund types are deferred and amortized over the term of the bonds using the straight-line amortization method which produces a result not significantly different from the interest method. Bond discounts are presented as a reduction of the face amount of bonds payable, whereas issuance costs are recorded as deferred charges.

Compensated Absences In governmental fund financial statements, the amount of compensated absences associated with employee vacations and sick leave that are recorded as expenditures represent the amounts paid during the year, plus the amount accrued at year end that would normally be liquidated with available spendable resources. Only the amount of the compensated absence liability that would normally be liquidated with current expendable available resources in the next fiscal year is recorded in the fund financial statements of governmental funds. In the government-wide financial statements, all governmental fund compensated absences are recorded and split between the current and noncurrent portions.

In proprietary funds, the amount of compensated absences associated with employee vacations that arc recorded as expenses represent the amounts paid during the year and accrued at year end. The entire liability for compensated absences of these funds is reflected in the respective financial statements split between the current and noncurrent portions.

30

NOTES TO FINANCIAL STATEMENTS CITY OF BUSHNELL, FLORIDA (Continued)

Note 1- Description of Funds and Summary of Sienificant Accounting Policies (Continued)

Compensated Absences (Concluded)

The policy for payment of sick leave is upon voluntary termination of the employee, 50% of the L accumulated hours would be paid (75% for long-term employees with twenty or more years of full-time service) not to exceed 1,040 hours4.62963e-4 days <br />0.0111 hours <br />6.613757e-5 weeks <br />1.522e-5 months <br />. The City accrues and records 100% of unpaid vacation pay and 50% or 75%, as applicable, of unpaid sick pay at the employee's current pay rate.

I Encumbrances Encumbrances accounting, under which purchase orders, contracts, and other commitments are I

recorded as expenditures in order to reserve that portion of the applicable appropriation, is not employed by the City for budgetary purposes.

Unearned Revenues Unearned revenues include amounts collected before the revenue recognition criteria are met and receivables which, under the modified accrual basis of accounting, are measurable but not L

yet available. I Governmental Fund Types Reservations of fund balance are used to indicated the portion not currently available for expenditure or segregated for a specific future use.

Water Line Extension Charges Water line extension charges are made to customers to cover the full cost of the addition. Costs of the extension are reported as property and equipment and depreciation over the estimated L

useful life of the assets.

Property Taxes Under Florida law, the assessment of all properties and the collection of all county, municipal and school board property taxes are consolidated in the offices of the County Property Appraiser and the County Tax Collector. The laws of the state regulating tax assessment are also designed to assure a consistent property valuation method statewide. Florida Statutes permit municipalities to levy property taxes at a rate of up to 10 mills. The millage rate assessed by the City for the fiscal year ended September 30, 2004, was 3.50%.

L The tax levy of the City is established by the City Council prior to October I of each year and the Sumter County Property Appraiser incorporates the City millages into the total tax levy, which includes the County and the County School Board tax requirements.

All property is assessed according to its fair market value on January I of each year. Each assessment roll is submitted to the Executive Director of the Florida Department of Revenue for I

review to determine if the rolls meet all of the appropriate requirements of Florida Statutes.

31 1

NOTES TO FINANCIAL STATEMENTS CITY OF BUSHNELL, FLORIDA (Continued)

Note 1 - Description of Funds and Summary of Sianificant Accounting Policies (Concluded)

Property Taxes (Concluded)

Taxes are assessed on November I of each year or as soon thereafter as the assessment roll is certified and delivered to the County Tax Collector. Unpaid taxes become delinquent on April I following the year in which they are assessed. Discounts are allowed for early payment at the rate of 4% in the month of November, 3% in the month of December, 2% in the month of January, and 1%in the month of February. The taxes paid in March are without discount.

On or prior to June I following the tax year, certificates are sold for all delinquent taxes on real property. After sale, tax certificates bear interest at 18% per year or any lower rate bid by the buyer. Application for a tax deed on any unredeemed tax certificates may be made by the certificate holder after a period of two years. Unsold certificates are held by the County.

Delinquent taxes on personal property bear interest of 18% per year until the tax is satisfied either by seizure and sale of the property or by the five-year statute of limitations.

The City does not accrue its portion of the County held tax sales certificates or personal property tax warrants because such amounts are not measurable and available as of the balance sheet date.

Note 2 - Deposits and Investments Deposits All cash deposits were held in qualified public depositories and were covered by federal depository insurance or by the Florida Security for Public Deposits Act (the Act); Chapter 280 of the Florida Statutes. The Act established a multiple-financial institution collateral pool with the ability to assess member institutions to satisfy the claims of governmental entities if any member financial institution fails. This ability to assess provides protection which is similar to depository insurance.

Investments Florida Statutes authorize the investments of funds in certificates of deposits or savings accounts of financial institutions approved by the State Treasurer, obligations of the United States Government, instruments guaranteed by the United States Government, and money market funds registered with the Securities Exchange Commission. Investments may also include repurchase agreements collateralized by U.S. Treasury Securities and Market-to-Market, and deposits with the State Board of Administration pool, or any intergovernmental investment pool authorized pursuant to the Florida Interlocal Cooperation Act. The City is further authorized to invest in securities of, or other interests in, any open-ended or close-ended management type investment company or investment trust registered under the Investment Company Act of 1940, 15 United States Code. Revenue bond covenants also restrict the type and maturities of investments on bond related funds.

Governmental investments are generally required to be categorized as either: (1) insured or registered for which the securities are held by the City or its agent in the City's name; (2) uninsured and unregistered for which the securities are held by the counterparty's trust department or agent in the City's name; or (3) uninsured and unregistered for which the securities are held by the counterparty's trust department or agent, but not in the City's name.

32

NOTES TO FINANCIAL STATEMENTS CITY OF BUSHNELL, FLORIDA I

(Continued)

Note 2 - Deposits and Investments (Concluded)

Investments (Concluded)

Certain City investments, such as investment pools managed by other governments, cannot be L

categorized because the City's investments are not evidenced by specific, identifiable investment securities. The Local Government Surplus Funds Trust Fund is an investment pool administered by the Florida State Board of Administration. Investments held in the Fund consist of short-term federal agency obligations, treasury bills, repurchase agreements, and commercial paper. Investment income is recognized as earned and is allocated to participants of the fund based on their equity participation. In accordance with GASB Statement No. 31, the SBA has reported that the Local Government Investment Trust, which it operates, is a "2A-like" pool and, thus, these investments are valued using the pooled share price.

Assets of the general employees' pension trust fund and police officers' pension trust fund may be invested in accordance with Florida Statutes as previously described. Currently, the assets consist of stock and bond mutual funds which are not required to be categorized since the investments are not evidenced by securities that exist in physical or book entry form.

Throughout the fiscal year, the City invested only in types of investments as listed below:

Category Category Category Fair Investment Description 1 2 3 Value U.S. Government Bonds $ 0 $ 0 S 234,184 $ 234,184 Common Stock 0 0 311,486 311,486 Repurchase Agreement 0 0 8,718 8,718 Commercial Paper 0 0 98.959 98.959 Total Investments $ 0 S347 653 Local Government Surplus Funds Trust Fund 522,450 Cash Deposits 919,359 Certificates of Deposit 465.000 Total Cash and Cash Equivalents 1.906.809 Total Investments and Cash and Cash Equivalents SI2 Shown in the accompanying financial statements as follows: L Entity-wide Statement of Net Assets:

Cash and Cash Equivalents $ 2,032,610 Statement of Fiduciary Net Assets:

Cash and Cash Equivalents 44,975 Investments 482.571 Total Investments and Cash and Cash Equivalents I 33

NOTES TO FINANCIAL STATEMENTS CITY OF BUSHNELL, FLORIDA (Continued)

Note 3- Restricted Assets Nuclear Decommissioning Tle Florida Public Service Commission requires utilities to set aside monies to pay the estimated future cost of dismantling or decommissioning nuclear power plants. The City has set aside such monies in the custody account with a third party trustee.

Customer Deposits Customer deposits have been restricted to indicate that the amount is not available for the financing of current utility operations.

Note 4 - Capital Assets Capital asset activity for the year ended September 30, 2004, was as follows:

Beginning Decreases/ Ending Balance Increases Transters Balance Governmental Activities Capital Assets Not Being Depreciated:

Land $ 486,370 S 0 S 0 S 486,370 Construction in Progress10-217 (10.217 0 Total Capital Assets Not Being Depreciated 496 587 (10 217! 486 370 Capital Assets Being Depreciated:

Buildings 1,577,8M 31,831 (55,157) 1,554,518 Improvements Other Than Buildings 633,906 6,892 66,007 706,805 Equipment and Furniture 1.709 785 71.044 (137.069) 1 643 760 Total Capital Assets Being Depreciated 3.921 535 109 767 (126 219) 3 905 083 Less Accumulated Depreciation:

Buildings (201,923) (31,660) 0 (233,583)

Improvements Other Than Buildings (251,706) (27,345) 0 (279,051)

Equipment and Furniture (1.057.299) (105 116) 131.930 (I1030485)

Total Accumulated Depreciation (1.510.928) (164.121) 131 930 (1 543 119?

Total Capital Assets Being Depreciated, Net 2A10 607 (54.354) 5.711 2,361 964 Governmental Activities Capital Depreciated, Net SL (5435 $-A4,506)

Business-type Activities Capital Assets Not Being Depreciated:

Land S 509.101 S 32.835 S 0 $ 541936 Capital Asset Being Depreciated:

Utility Plant in Savice 8,578,247 220,980 (2,949) 8,796,278 Buildings 366,718 366 0 367,084 Machinery and Equipment 2246.025 47A39 2,293A464 Total Capital Assets Being Depreciated 11 190S990 268785 (2.949) 1 I 456 S26 Less Accumulated Depreciation:

Utility Plant in Service (1,395,023) (259,636) 335 (1,654,324)

Buildings (129,989) (10,240) 0 (140,229)

Machinay and Equipment (1219295) (107 558) (1,326.853!

Total Accumulated Depreciation (2.744.307) (377.434! 335 (3.121 406)

Total Capital Assets Being Depreciated, Net 8A446 683 (10 6Q49) (2 614) WA335420 Total BusineDstpe Activities Capital Assets, Net 34

i NOTES TO FINANCIAL STATEMENTS CITY OF BUSHNELL, FLORIDA L1 (Continued)

Note 4 - Capital Assets (Concluded) I Depreciation Expense - Governmental Activities General Government Public Safety S 9,647 62,479 I1 Transportation 26,787 Culture and Recreation Total Depreciation Expense- Goveramental Activities S.

65 208 14,12 I

Depreciation Expense - Business-type Activities Water Utility S 76,761 L Electric Utility 121,342 Sanitation Utility 18,161 Wastewater Utility Total Depreciation Expense - Business-type Acti ities 16l 171 I

-l Note 5 - Lone-term Liabilities Long-tenn liability activity for the year ended September 30, 2004, was as follows:

I Amounts Beginning Balance Increases Decreases Ending Balance Due Within One Year I Governmental Activities Notes Payable and Certificates of Obligation:

Note Payable- Suntrust Bank S 300,000 S 0 S (33,333) S 266,667 S 33,333 I

Certificate of Obligation -

Suntrust Bank 156,493 0 (28,571) 127,922 2S,571 L

Note Payable- Community National Bank 159,500 0 (29,000) 130,500 29.000 Note Payable - Community National Bank 13.564 0 (13,564) 0 0 L Ccrtificate of Obligation -

Suntrust Bank 160 000 O (24.000 136000 S0 Total Notes Payable and I Certificates of Obligation 789 557 0 (128468) 661089 98 904 Other Liabilities:

Capital Lease Obligation 0 43,770 (3,338) 40,432 7,533 Compensated Absences 93.454 69M344 (79 437) S3 661 16732 Total Other Liabilities 93 454 113-414 (82 775 124.093 24 265 Total Governmental Activities S SS301 S_-113A14 S. =21,243 SL .7S5182 L1 I

I1 35 I

NOTES TO FINANCIAL STATEMENTS CITY OF BUSHNELL,, FLORIDA (Continued)

Note 5 - Lone-term Liabilities (Continued)

Amounts Beginning Ending DueWithin Balance increases Decreases Balance One Year Business-type Activities Revenue Bond and Notes Payable:

Water and Sewer Fund Revenue Bond, Series 2002 S 2,800,000 S 0 S 0 S 2,800,000 S 28,000 Electric Utility Fund Note Payable 75,547 0 (24,534) 51,013 25,506 Sanitation Fund Note Payable - Suntrust Bank 22,500 0 (22,500) 0 0 Florida Municipal Power Agency - Pooled Loan Note 1SI.000 0 (20000) 161.000 20000 Total Revenue Bond and Notes Payable 3,079,047 0 (67,034) 3,012,013 73.506 Other Liabilities:

Compensated Absences 67,518 54.529 (43.Q05 79962 15.792 Total Business-type Activities SS-- 5429 (110.1) 5 5 S .2%

Notes Payable - Governmental Activities On August 7, 2001, the City borrowed $600,000 from the SunTrust Bank of Brooksville, Florida, with quarterly interest only payments at 4.98% until June 30, 2003, at which time a

$300,000 principal plus accrued interest payment is due. Thereafter, beginning December 30, 2003, seventeen semiannual principal payments of $16,667 plus accrued interest are due with the final payment due on or before June 30, 2012.

On August 25, 1998, the City borrowed $290,000 from the Community National Bank of Pasco County, for the purpose of financing the construction of the City's new public works building.

The loan is collateralized by a first lien on 50% of the annual local option gas tax revenue, with a minimum annual collateral of $90,000. The loan is payable in semiannual payments of

$14,500, including interest at 4.88%, beginning June 1, 1999, and is due December 1,2008.

On July 15, 1994, the City borrowed $150,000 from the Community National Bank of Pasco County, payable in monthly payments of $1,597, including interest at 5%, beginning August 15, 1994. The loan was paid in full July 15, 2004.

Certificates of Obligation - Governmental Activities On November 7, 2001, the City borrowed $200,000 through the issuances of a Certificate of Obligation Note from SunTrust Bank for the purpose of purchasing a fire truck. The terms of the note include thirteen semiannual payments of principal in the amount of $14,286 each plus accrued interest at 4.40% per annum, beginning May 7, 2002. The loan is due November 7, 2008.

36

NOTES TO FINANCIAL STATEMENTS l CITY OF BUSHNELL, FLORIDA (Continued)

Note 5 - Lone-term Liabilities (Concluded)

Certificates of Obligation - Governmental Activities (Concluded)

On April 7, 2003, the City borrowed $160,000 through the issuance of a Certificate of L

Obligation Note from SunTrust Bank, for the purpose of purchasing a bucket truck. The terms of the note include twenty semi-annual payments of principal in the amount of $8,000 beginning on October 15, 2003, and monthly interest payments beginning on May 15, 2003. The loan matures on April 15, 2013.

Revenue Bond and Notes Payable - Business-type Activities During the 2003 fiscal year, the City obtained financing for the Wastewater Treatment Facility from the U.S. Department of Agriculture, Rural Utility Services (RUS). RUS issued a

$2,800,000 bond to the City for the refunding of the interim financing and completion of construction costs for the Facility. The bond is payable over 40 years with interest only payments until 2005 at 4.625% and annual principal payments. There are no federal arbitrage regulations applicable to this revenue bond.

During 2003, the City borrowed $100,000 from SunTrust Bank to finance the purchase of a bucket truck. The loan is payable in semiannual installments of principal and interest at the rate of 3.95% per annum. The loan matures on July 20, 2005.

During 2000, the City borrowed $90,000 from SunTrust Bank to finance the purchase of a I sanitation truck. The loan is payable in semiannual installments of principal in the amount of

$11,500 plus interest at 5.97% per annum, and was paid in full on June 1, 2004. L The City entered into a financing agreement with the Florida Municipal Power Agency (FMPA). Interest is payable at a variable rate (currently .85% plus a 0.60% administration fee).

Final maturity is July 1, 2011.

Debt service to maturity on the City's bonded indebtedness, notes payable and certificates of obligation are as follows:

Year Governmental Activities Business-Type Activities Ending Principal Interest Principal Interest 2005 S 98,904 S 29,483 S 73,506 S 134,025 2006 106,904 24,492 75,507 131,370 2007 106,904 19,500 51,000 128,891 2008 106,904 12,937 57,000 127,114 2009 77,469 9,201 59,000 125,206 2010-2014 164,004 13,166 247,000 595,680 2015-2019 0 0 245,000 544,596 2020-2024 2025-2029 0

0 0

0 306,000 384,000 482,667 405,013 L

2030-2034 2035-2039 2040-2042 0

0 0

0 0

0 482,000 604,000 428.000 307,519 185,325 39.961 L

Total S 66,8 S 108,772 S 3,012,013 072L67 Defeased Debt L There are no outstanding defeased bonds.

37

NOTES TO FINANCIAL STATEMENTS CITY OF BUSHNELL, FLORIDA (Continued)

Note 6 - Capital Lease Oblieation The City has entered into a lease agreement for financing the acquisition of two police vehicles and related equipment.

The assets acquired through capital leases are as follows:

Governmental Activities Asset:

Two Police Vehicles $ 33,076 Related Equipment 12,886 Less: Accumulated Depreciation (3,073 Total Future minimum lease payments under terms of the lease are as follows:

Year Governmental Endin_ Principal Interest 2005 $ 7,533 $ 1,293 2006 8,522 1,106 2007 8,853 778 2008 9,196 432 2009 6,328 91 Total Note 7 - Other Liabilities Crystal River 3 Decommissioning Trust Fund Federal law requires that an external trust fund be created to accumulate amounts to pay the future plant decommissioning. The City contributes to a common trust fund, maintained by FMPA, for all its members that own a portion of the Crystal River 3 Nuclear Generating Unit.

As of September 30, 2004, the City has a balance in the trust fund of $170,776.

Crystal River 3 Nuclear Decommission Cost Payable The City is responsible for its share of the future costs to decommission the Crystal River 3 Nuclear Generating Unit. The City is accruing this cost over the expected useful life of the plant.

A summary of the activity in the liability account is as follows:

Balance, September 30,2003 $ 158,598 2004 Accrual 12.178 Balance, September 30,2004 $_170,7 38

NOTES TO FINANCIAL STATEMENTS l CITY OF BUSHNELL, FLORIDA (Continued)

Note 8 - Electric Power Agreements 1 Crystal River Power Unit 3 Participation Agrcement The City is a participant in an agreement with Florida Power Corporation, which was entered L into on July 31, 1975. Under terms of the agreement, the City acquired a 0.0388% ownership interest and generation entitlement share in the nuclear steam electric generating unit.

Participants are entitled to energy output of the unit based upon their respective generation L entitlement share.

Florida Power Corporation has been appointed by the participants to act as their agent and has sole authority to manage, control, maintain and operate the unit. Operating costs of the unit, in general, are shared in proportion to each generation entitlement share on a monthly basis.

Common and external facilities of the generating unit are solely owned by Florida Power Corporation, and participants share in the operating and maintenance expenses of such facilities in proportion to their generation entitlement share.

The participation agreement provides for reversion of the ownership interest of the unit to Florida Power Corporation on August 1, 2050, or upon retirement from service, whichever occurs first.

L Florida Municipal Power Agency (FMPA)

The City is a member of the FMPA, which is a joint action agency formed by a number of Florida municipalities for the purpose of providing electric power alternatives for its members.

FMPA is a nonprofit, joint action agency formed pursuant to Florida Statutes. FMPA has the authority to undertake joint power supply projects and to issue tax-exempt bonds or other obligations to finance or refinance the costs of such projects.

Due to the diverse needs of Florida's municipal electric systems, FMPA was established as a project-oriented agency. Under this structure, each member has the option whether or not to participate in a project. Members may choose to participate in more than one project; however, I each of the FMPA's five projects is independent from the other and no revenues or funds L available from one project can be used to pay the costs of any other project.

The City has elected to participate in the "All Requirements Project," which supplies all of the City's power requirements. The agreement will remain in effect until October 1, 2035, with I

optional successive five-year renewal periods. The contract provides for optional withdrawal by the City, but would require the City to make all remaining project members whole. The cost to L the City withdrawing from the contract has not been calculated.

Power rates charged to the City by FMPA are subject to a majority vote of the Board of l Directors of FMPA. In addition, the City has elected participation in the "Pooled Loan Project" in which FMPA issues debt, then loans the money to individual systems to finance utility-related projects.

39L

NOTES TO FINANCIAL STATEMENTS CITY OF BUSHNELL, FLORIDA (Continued)

Note 9 - Employee Retirement Systems Florida State Retirement System All full-time employees of the City hired prior to January 1, 1996, participate in the Florida State Retirement System (the System). This System was created by the Florida Legislature and is a cost-sharing, multiple-employer defined benefit public retirement plan available to governmental units within the state of Florida. The System issued 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 Retirement System, Division of Retirement, 2639-C North Monroe Street, Tallahassee, Florida 32399-1560, or by calling (850) 488-5706.

All full-time employees of the City hired prior to January 1, 1996, are eligible to participate in the System. Special risk employees who retire at or after age 55, with six years of creditable service; and all other employees who retire at or after age 55, with six years of creditable service; are entitled to a retirement benefit, payable monthly for life, equal to the product of: 1) average monthly compensation in the highest five years of creditable service; 2) creditable service during the appropriate period; and 3) the appropriate benefit percentage. Benefits fully vest on reaching six years of service. Vested employees may retire after six years of creditable service and receive reduced retirement benefits. The System also provides death benefits, disability benefits and annual cost-of-living adjustments. Benefits are established by Florida Statute.

The funding methods and the determination of benefits payable are provided in various acts of the Florida Legislature. These acts provide that employers, such as the City, are required to contribute 7.39% of the compensation for regular members, 18.53% for special risk, 9.37%

senior management and 15.37% for elected officials through June 30, 2004. Beginning July 1, 2004, the required contribution rate is changed to 7.39%, 18.53%, 9.37% and 15.23% of the member's gross compensation for regular members, special risk, senior management and elected officials, respectively. The City's contributions to the System for the years ended September 30, 2004, 2003, 2002, were as follows:

Year Amount 2004 $ 42,345 2003 35,809 2002 49,504 Florida State Retirement System Opt-Out In December 1995, the City Council approved opting out of the Florida State Retirement System effective with all new employees hired after January 1, 1996. City employees covered under the System at December 31, 1995, will continue to participate in the state System and the City will continue to make contributions on their behalf Administrative costs for each plan are financed through investment earnings.

40

NOTES TO FINANCIAL STATEMENTS l CITY OF BUSHNELL, FLORIDA (Continued) I Note 9 - Employee Retirement Systems (Continued)

Pension Trust Funds

• Plan Description In January 1996, the City adopted two separate single-employer pension plans, one for police officers and a general employees' retirement plan that covers substantially all full-time City employees employed after January 1, 1996, pursuant to the City's opt out of the Florida Retirement System. These plans are maintained as pension trust funds and included as part of the City's reporting entity. City ordinance and state law requires contributions to be determined by actuarial studies every three years. Stand-alone financial reports are not issued.

The general employees' retirement plan covers all full-time employees, except for police officers. The plan is noncontributory, and the City provides the full contribution to fund the plan. The annual pension cost related to the plan includes amortization, over a thirty-year period, of a prior service cost established October 13, 1995.

The police officers' retirement plan covers all full-time police officers. The plan is contributory and requires participants to contribute 1%of their salary to the plan. The City provides the balance of contributions required after the participants' contributions. In addition, state funds collected under Florida Statutes Chapter 185 are contributed to the plan.

Substantially all full-time City employees hired on or after January 1, 1996, are eligible to participate in their respective plans. Benefits vest after six years of credited service for all employees.

• Membership Membership of each plan consisted of the following as of September 30, 2004:

Police General Pension Employees Officers Active Plan Members 18 8 Retirees and Beneficiaries Receiving Benefits 0 0 Terminated Plan Members, Entitled but Not Yet 0 0 Receiving Benefits 0 0 Total 18 _ 8

• Annual Pension Costs The Board of Trustees of each plan establishes, and may amend, the contribution l requirements of plan members and the City. The City's contribution rates for current year and annual pension cost and related information per most recent actuarial report for each plan is shown below:

41

NOTES TO FINANCIAL STATEMENTS CITY OF BUSHNELL, FLORIDA (Continued)

Note 9 - Employee Retirement Systems (Continued)

Pension Trust Funds (Continued)

. Annual Pension Costs (Concluded)

General Police Employees Officers Contribution Rates Employer 13.8% 17.0%

Employee 0.00% 1.00%

Annual Required Contribution (ARC) $ 43,056 $ 48,261 Interest on Net Pension Obligation (Asset) (1,212) 0 Annual Pension Costs 41,844 48,261 Contributions Made 49.387 52,442 (Increase) in Net Pension Obligation (7,543) (4,181)

Net Pension Obligation (Asset), Beginning of Year (15.154) 4.181 Net Pension Obligation (Asset), End of Year $.A22.692) $ O General Employees and Police Officers Actuarial Valuation Date October 1,2003 Actuarial Cost Method Aggregate Amortization Method N/A Remaining Amortization Period N/A Asset Valuation Method Market Value Actuarial Assumptions:

Investment Rate of Return 8.0%

Projected Salary Increases (*) 6.0%

(*) Includes Inflation at 3.0%

Postretirement COLA 3.0%

Both the general employees' and police officers' plans use the aggregate actuarial cost method, which does not identify or separately amortize unfunded actuarial liabilities.

a Three-year Trend Information Three-year trend information for the plan follows:

Net Fiscal Annual Percentage Pension Year Pension of APC Obligation Plan Ending Cost (APC) Contributed (Asset)

General Employees 9/30/O203 $ 41,677 118% $ (22,697) 9/30/2002 30,146 111% (15,154) 9/30/2001 20,494 121% (11,847)

Police Officers 9/30/2003 19,552 119% 0 9/30/2002 4,508 363% 0 9/30/2001 4,725 100% 0 42

i NOTES TO FINANCIAL STATEMENTS CITY OF BUSHNELL, FLORIDA I

(Continued)

Note 9 - Employee Retirement Systems (Continued) I Pension Trust Funds (Continued)

Schedule of Pension Plan Net Assets as of September 30,2004 I

General Police Officers' I

Employees' Pension Assets Fund Fund Total I

Cash and Cash Equivalents $ 18,254 $ 26,721 S 44,975 1 Investments 208,600 273,971 482,571 i Contributions Receivable 11,039 5,892 16,931 Due from Other Funds 0 135 135 Total Assets 237.893 306.719 544.612 1 Liabilities Due to Other Funds Net Assets 0

L Reserved for:

Employees' Pension Benefits S. 275 L 30.71 S 544.

I Schedule of the Change in Pension Plan Net Assets as of September 30, 2004 I

General Employees' Retirement Fund Police Officers' Retirement Fund Total I

Additions Contributions:

Employer S 84,963 $ 25,410 $ 110,373 I

State 0 32,668 32,668 Employee 0 2,715 2,715 Total Contributions 84.963 60.793 145.756 Investment Income Gain 54,240 Less: Investment Management Fees 20,905 (1.633) 33,335 (2.285) (3,918!

I Net Investment Income 19.272 31.050 50.332 Total Additions 104.235 91.843 196.078 I

I1 43 I

NOTES TO FINANCIAL STATEMENTS CITY OF BUSHNELL, FLORIDA (Continued)

Note 9 - Employee Retirement Systems (Conduded)

Pension Trust Funds (Conduded)

Schedule of the Change in Pension Plan Net Assets as of September 30, 2004 (Conduded)

General Employees' Police Officers' Retirement Retirement Fund Fund Total Deductions Pension Benefit Payments and Refunds $ 0 $ 1,233 $ 1,233 General and Administrative 3.220 2.970 6.190 (Total Deductions) (3,220) (4.203) (7.423)

Net Increase 101,015 87,640 188,655 Net Assets Reserved for Employees' Pension Benefits:

Beginning of Year 136.743 219.079 355.822 End of Year Note 10- Post Retirement Benefits The City allows retired employees to participate in the City's health insurance plan. These retirees are responsible for 50% of their premium payments. The City records an expense or expenditure at the time of payment of the retirement benefits. There were two retirees participating in the City's health insurance plan as of September 30, 2004.

Note 11 - Interfund Receivables, Pavables and Transfers Interfund Receivables and Payables Interfund receivables and payables at September 30,2004, are as follows:

Interfund Interfund Receivable Payables Major Funds General Fund $ 820 $ 0 Electric Fund 144,923 0 Wastewater Utility Fund 0 156,728 Water Utility Fund 11,805 0 Nonmajor Funds 135 955 Total Interfund Receivables and Payables $ 157,683 S 157,683 The outstanding balances between funds result mainly from the time lag between the dates that interfund goods and services are provided or reimbursable expenditures occur, transactions are recorded in the accounting system, and/or payments between funds are made.

44

I NOTES TO FINANCIAL STATEMENTS CITY OF BUSHNELL, FLORIDA I

(Continued)

Note 11 - Interfund Receival)les, Pavables and Transfers (Continued) I Interfund Transfers Interfund transfers at September 30, 2004, are as follows: L Interfund Interfund I Transfers Transfers in out Major Funds General Fund $ 414,000 $ 0 Electric Utility Fund 0 352,000 Water Utility Fund 20,000 Sanitation Fund 0

0 42.000 I

Total Interfund Transfers $ 1,00 $ 414,00 Transfers are made, in accordance with the budget, to supplement the revenues needed to cover I the expenditures of providing general governmental services.

Advances I Advances to and from other funds at September 30, 2004, are as follows:

Advances Advances I to Other from Other Funds Funds Major Funds I Water Utility Fund $ 0 $ 220,100 Wastewater Utility Fund 0 630,000 Electric Utility Fund Total Advances 850.100 0 I

$ 850.100 $ 850,100 Advances to other funds were made to supplement capital costs for their respective utility I

distribution systems. None of the balances are scheduled to be collected in the subsequent year.

I Note 12 - Other Disclosures Deficiency of General Fund Expenditures Over Budgeted Expenditures L Expenditures (in Excess) 1 Final Budgeted Budget Actual Expenditures General Fund $L=L" I 1,233,236 S (sQ65%= L L

45 I

NOTES TO FINANCIAL STATEMENTS CITY OF BUSHNELL, FLORIDA (Concluded)

Note 12 - Other Disclosures (Conduded)

Allowances for Doubtful Accounts Allowances for doubtful accounts at September 30,2004, are as follows:

Electric Utility Fund $ 3,000 Water Utility Fund 500 Sanitation Fund 500 Total Allowances for Doubtful Accounts Note 13 - State Financial Assistance and Federal Sinele Audit During the fiscal year, the City expended less than $500,000 in state financial assistance and federal awards therefore, no audit was required pursuant to the Florida Single Audit Act or A-133 Federal Single Audit.

Note 14 - Governmental Accountini! Standards Board (GASB) Statement No. 34 The general provisions of GASB Statement No. 34 were implemented by the City during the current fiscal year; the City plans on implementing the retroactive reporting of infrastructure by the year ending September 30, 2008.

Note 15 - Risk Management The City is exposed to various risks of loss related to torts; theft of, damage to and destruction of assets; errors and omissions; and natural disasters. The City transfers risk of loss through the purchase of commercial insurance from the Florida League of Cities, Inc. and independent agencies. Insurance against losses are provided for the following types of risk:

• Workers' Compensation and Employer's Liability

• General and Automobile Liability

• Real and Personal Property Damage

• Public Officials' Liability

• Accidental Death and Disability The City's coverage for workers' compensation is under a retrospectively rated policy.

Premiums are accrued based on the ultimate cost to-date of the City's experience for this type of risk. There have been no significant reductions in insurance coverage during fiscal year 2004.

Settled claims have not exceeded the commercial excess coverage in any of the past three years.

Note 16 - Contineencies Grants Amounts received or receivable from grantor agencies are subject to audits and adjustment by grantor agencies. If any expenditures are disallowed as a result of these audits, the claims for reimbursement to the grantor agency would become a liability of the City. In the opinion of management, any such adjustments would not be significant.

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REQUIRED SUPPLEMENTARY INFORMATION The following supplementary schedules present trend information regarding the retirement plans for the City's general employees, police officers, and major fund budgetary comparison schedules. This information is necessary for a fair presentation in conformity with generally accepted accounting principles.

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REQUIRED SUPPLEMENTARY INFORMATION SCHEDULE OF CONTRIBUTIONS - EMPLOYER AND OTHER GENERAL EMPLOYEES' RETIREMENT FUND AND POLICE OFFICERS' RETIREMENT FUND CITY OF BUSHNELL, FLORIDA Because the plans use the Aggregate Actuarial Cost Method for funding, the schedule of funding progress is not required per the Governmental Accounting Standards Board (GASB) Statement No. 25.

A schedule of contributions from the employer and other contributing entities follows:

General Employees' Retirement Plan Annual Year Ended Required City's Percentage September 30, Contribution Contribution Contributed 2003 $ 41,667 $ 49,522 119.00%

2002 30,146 33,583 111.40%

2001 20,494 24,737 121.00%

2000 20,211 21,963 109.00%

1999 9,719 15,721 161.75%

1998 7,743 7,743 100.00%

1997 3,303 3,303 100.00%

1996 879 879 100.00%

Police Officers' Retirement Plan Annual Year Ended Required City's State's Percentage September-30, Contribution Contribution Contribution Contributed 2003 $ 48,261 $ 23,316 $ 26,773 104.00%

2002 29,561 16,368 25,053 140.12%

2001 26,036 4,725 21,311 100.00%

2000 22,014 14,635 7,379 100.00%

1999 14,940 0 20,190 135.14%

1998 8,965 8,965 26,773 398.64%

1997 5,577 5,577 8,421 251.00%

1996 2,315 2,315 0 100.00%

Note: Both plans were established during the fiscal year ended September 30, 1996.

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I CITY OF BUSHNELL, FLORIDA SCHEDULE OF REVENUES, EXPENDITURES, AND CIANGES IN FUND BALANCE L

BUDGET AND ACTUAL MAJOR FUND - GENERAL FUND FOR THE YEAR ENDED SEPTEMBER 30, 2004 I Variance With Final Budget I

Original Final Positive Revenues Budget Budget Actual (Negative)

I Taxes Ad Valorem S 292,079 $ 292,079 $ 283,977 (8,102) L Local Government Infrastructure Surtax 119,265 172,068 175,114 3,046 Local Option Gas Tax Franchise Tax:

132,445 132,445 140,389 7,944 I

Electric 70,821 92,938 103,763 10,825 Utility Tax:

Communication Gas 106,604 15,332 106,604 16,000 99,511 15,205 (7,093)

(795)

I Electric 102,267 11,909 I

71,404 114,176 City Utility Tax 115,038 115,038 110,635 (4,403)

Total Taxes 922,988 1,029,439 1,042,770 13,331 Licenses and Permits City Building Permits 12,351 12,351 3,832 (8,519)

I City Occupational License 5,448 9,000 8,318 (682)

Total Licenses and Permits Intergovernmental Revenue 17,799 21,351 12,150 (9,201)

I1 State Revenue Sharing Alcohol Beverage License Distribution Mobile Home Licenses 73,708 1,500 7,603 73,708 1,500 7,603 76,578 1,099 7,975 2,870 (401) 372 I1 County Occupational License Sumter County Gas Tax County Reimbursement - Fire Truck 1,500 23,820 36,418 1,500 23,820 36,418 1,720 24,030 35,152 220 210 (1,266)

I County Library Funding 20,152 20,152 20,152 0 Half-cent Sales Tax Total Intergovernmental Revenue 71,385 236,086 90,537 255,238 100,829 267,535 10,292 12,297 I

Grant Revenue SWFMD Grant 243,500 0 0 0 Land and Water Conservation Grant 166,100 0 0 0 FEMAIDCA Hurricane Reimbursement Grant 0 0 99,287 99,287 l Library Grant 30,000 30,000 30,000 0 FRDAP Grant 0 0 16,494 16,494 FDOT Landscaping Grant Law Enforcement Grant 0

0 0

0 6,395 1,506 6,395 1,506 I

Total Grant Revenue 439,600 30,000 153,682 123,682 I

48 L

CITY OF BUSHNELL, FLORIDA SCHEDULE OF REVENUES, EXPENDITURES, AND CHANGES IN FUND BALANCE BUDGET AND ACTUAL MAJOR FUND - GENERAL FUND FOR TIHE YEAR ENDED SEPTEMBER 30,2004 (Continued)

Variance With Final Budget Original Final Positive Budget Budget Actual (Negative)

Revenues (Concluded)

Charges for Services Mowing Fees $ 3,000 S 3,000 S 3,150 S 150 Fall Festival 12,445 12,445 10,427 (2,018)

Summer Youth Program 17,372 14,038 19,038 5,000 Total Charges for Services 32,817 29,483 32,615 3,132 Fines and Forfeitures Fines and Forfeitures 26,284 47,000 54,655 7,655 Police Education 714 2,054 2,276 222 Total Fines and Forfeitures 26,998 49,054 56,931 7,877 Miscellaneous Revenue Interest Earned 3,658 3,658 2,939 (719)

Rent - Community Building 7,000 7,000 5,000 (2,000)

Rent - Tower Space 6,000 8,038 7,238 (800)

Disposition of Fixed Assets 0 0 0 0 Miscellaneous 16,940 25,626 26,296 670 Total Miscellaneous Revenue 33,598 44,322 41,473 (2,849)

Total Revenues $ 1,709,886 $ 1,458,887 $ 1,607,156 S 148,269 I Expenditures General Government Legislative:

Personal Services $ 18,000 $ 18,000 $ 18,000 $ 0 Operating Expenses 8,439 13,344 13,344 0 Grants and Aid 6,000 2,850 2,850 0 Total Legislative 32,439 34,194 34,194 0 Finance and Administrative:

Personal Services 234,362 240,214 240,950 (736)

Operating Expenses 59,885 60,335 73,642 (13,307)

Capital Outlay 0 2,116 2,116 0 Total Finance and Administrative 294,247 302,665 316,708 (14,043)

Legal Counsel:

Operating Expenses 24,844 24,844 22,980 1,864 Total General Government 351,530 361,703 373,882 (12,179) 49

CITY OF BUSHNELL, FLORIDA I

SCHEDULE OF REVENUES, EXPENDITURES, AND CHANGES IN FUND BALANCE BUDGET AND ACTUAL MAJOR FUND - GENERAL FUND FOR THE YEAR ENDED SEPTEMBER 30,2004 (Continued) t Variance Witb Final Budget Original Final Positive Expenditures (Continued)

Budget Budget Actual (Negative)

I Public Safety Law Enforcement:

Personal Services $ 452,465 S 485,291 S 476,095 $ 9,196 I1 Operating Expenses 104,047 120,976 107,271 13,705 Capital Outlay Total Law Enforcement 700 557,212 59,316 665,583 59,316 642,682 22,901 0-I1 Fire Department:

Operating Expenses 0 ~0 1,689 (1,689) I Code Compliance Department:

Personal Services 43,563 43,563 43,525 38 Operating Expenses 13,303 5,142 4,723 419 I Total Code Compliance Department 56,866 48,705 48,248 457 Total Public Safety 614,078 714,288 692,619 21,669 I

Physical Environment Cemetery:

Operating Expenses 400 400 0 400 I

Industrial Development Department:

Grants and Aids Animal Control:

12,000 12,000 12,000 0 I

Operating Expenses Total Physical Environment 300 12,700 300 12,700 66 12,066 234 634 I Transportation Roads and Streets:

Personal Services Operating Expenses 150,115 362,674 156,907 133,494 166,412 178,771 (9,505)

(45,277)

I Capital Outlay Total Transportation 177,000 689,789 2,000 292,401 1,356 346,539 644 (54,138) I Culture and Recreation Libraries:

Personal Services 82,664 82,664 79,440 3,224 1

Operating Expenses 27,300 26,368 31,116 (4,748)

Capital Outlay Total Libraries 4,000 113,964 11,377 120,409 11,377 121,933 0

(1,524) L I

50 L

CITY OF BUSHNELL, FLORIDA SCHEDULE OF REVENUES, EXPENDITURES, AND CHANGES IN FUND BALANCE BUDGET AND ACTUAL MAJOR FUND - GENERAL FUND FOR TIlE YEAR ENDED SEPTEMBER 30,2004 (Concluded)

Variance With Final Budget Original Final Positive Budget Budget Actual (Negative)

Expenditures (Concluded)

Culture and Recreation (Concluded)

Parks and Recreation:

Personal Services S 85,207 S 75,343 S 69,926 S 5,417 Operating Expenses 59,472 75,057 73,075 1,982 Capital Outlay 338,700 42,789 35,602 7,187 Total Parks and Recreation 483,379 193,189 178,603 14,586 Special Events:

Operating Expenses 22,101 22,101 20,610 1,491 Summer Youth Program:

Personal Services 8,650 8,650 5,241 3,409 Operating Expenses 9,300 10,242 13,425 (3,183)

Total Summer Youth Program 17,950 18,892 18,666 226 Total Culture and Recreation 637,394 354,591 339,812 14,779 Debt Service Principal Retirement 120,236 112,469 131,806 (19,337)

Interest and Fiscal Charges 39,754 34,401 36,512 (2,111)

Total Debt Service 159,990 146,870 168,318 (21,448)

(Total Expenditures) (2,465,481) (1,882,553) (1,933,236) (50,683)

(Deficiency) of Revenue (Under)

Expenditures (755,595) (423,666) (326,080) 97,586 Other Financing Sources (Uses)

Transfers in:

Electric 352,495 352,495 352,000 (495)

Water 20,000 20,000 20,000 0 Sanitation 42,000 42,000 42,000 0 Debt Proceeds 341,100 43,778 43,770 (8)

Total Other Financing Sources 755,595 458,273 457,770 (503)

Excess of Revenues and Other Financing Sources Over Expenditures and Other Financing Uses 0 34,607 131,690 97,083 Fund Balance, Beginning of Year 330,968 330,968 330,968 0 Fund Balance, End of Year S 330,968 $ 365,575 S 462,658 S 97,083 51

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CITY OF BUSHNELL, FLORIDA COMBINING BALANCE SHEET NONMAJOR GOVERNMENTAL FUNDS SEPTEMBER 30,2004 Special Revenue Funds Cemetery CDBG Fund Fund Total Assets Cash and Cash Equivalents S 490,390 s 1,217 $ 491,607 Due from Other Governments 0) ~~ 830 830 Total Assets 490,390 - 2,047 492,437 Liabilities and Fund Balances Liabilities Accounts Payable 197 0 197 Deposits 4,500 0 4,500 Due to General Fund 0 820 820 Deferred Revenue 0 1,227 1,227 Total Liabilities 4,697 2,047 6,744 Fund Balance Reserved for Perpetual Care 485,693 0 485,693 Total Liabilities and Fund Balances S 490,390 S 2,047 S 492,437 52

I CITY OF BUSHNELL, FLORIDA COMBINING STATEMENT OF REVENUES, EXPENDITURES, AND CHANGES L

IN FUND BALANCES - NONMAJOR GOVERNMENTAL FUNDS FOR THE YEAR ENDED SEPTEMBER 30,2004 I

Special Revenue Fun Cemetery CDBG I Fund Fund Total Revenues Contributions S 6,600 S 0 $ 6,600 Sale of Cemetery Lots 7,725 0 7,725 I

Interest 8,530 0 8,530 Memorials and Gifts 125 0 125 Total Revenues 22,980 0 22,980 I Expenditures General Government 19,160 0 19,160 I Excess of Revenues Over Expenditures 3,820 0 3,820 L Fund Balances, Beginning of Year 481,873 0 481,873 L

Fund Balances, End of Year $ 485,693 $ 0 $ 485,693 I

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CITY OF BUSHNELL, FLORIDA BUDGET TO ACTUAL COMPARISON - NONMAJOR FUND CEMETERY FUND FOR THE YEAR ENDED SEPTEMBER 30,2004 Variance With Final Budget Final Positive Budget Actual (Negative)

Revenues Contributions $ 8,500 $ 6,600 $ (1,900)

Sale of Cemetery Lots 6,000 7,725 1,725 Interest 20,000 8,530 (11,470)

Memorials and Gifts 500 125 (375)

Total Revenues 35,000 22,980 (12,020)

(Expenditures) (35,000) (19,160) 15,840 Excess of Revenues Over Expenditures 0 3,820 3,820 Fund Balance, Beginning of Year 481,873 481,873 0 Fund Balance, End of Year $ 481,873 $ 485,693 $ 3,820 54

L CITY OF BUSHNELL, FLORIDA BUDGET TO ACTUAL COMPARISON - NONMAJOR FUND CDBG FOR THlE YEAR ENDED SEPTEMBER 30, 2004 Variance With Final Budget Final Positive Budget Actual (Negative)

Revenues $ 0 S 0$ 0 (Expenditures) 0 0 0 Excess of Revenues Over Expenditures 0 0 0 Fund Balance, Beginning of Year 0 0 0 Fund Balance, End of Year S 0$ 0 $ 0 L

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STATISTICAL SECTION I

I'- I I 1-'- I 1I' 1'V-' I ., I ---- I - 1- I- i' I I . I I - I I TABLE 1 GENERAL GOVERNMENTAL EXPENDITURES BY FUNCTION (1) (2)

LAST TEN FISCAL YEARS CITY OF BUSHNELL, FLORIDA Culture Fiscal General Public Physical Human Economic and Debt Year Government Safety Environment Transportation Services Environment Recreation Service Total 1995 $ 280,284 $425,897 $ 20,534 $ 214,868 $ 0 $ 12,000 $ 134,779 $ 0 $1,088,362 1996 317,049 439,703 62,017 208,376 0 12,250 225,620 0 1,265,015 1997 279,604 469,726 258,109 201,520 0 13,000 289,541 0 1,511,500 1998 269,378 437,443 30,522 785,847 0 9,000 148,863 97,102 1,778,155 1999 306,366 440,907 33,001 431,133 0 12,000 264,934 43,069 1,531,410 2000 391,477 505,189 0 325,582 0 15,000 329,453 63,078 1,629,779 2001 335,139 562,608 69,426 280,747 0 2,000 417,086 64,502 1,731,508 2002 347,502 671,046 ** ** 289,738 ** 249,285 107,088 1,664,659 2003 368,574 570,454 0 0 568,038 0 446,017 419,515 2,372,598 2004 393,042 692,619 12,066 346,539 (a) 0 339,812 168,318 1,952,396 (1) Includes general and special revenue funds.

(2) Includes capital outlay expenditures by function.

During 2002, physical environment, transportation and economic environment functions were combined into the Human Services function.

(a) During 2004, expenditures for the physical environment and transportation function were reclassed from the Human Services function.

Information Source:

Audited Financial Reports 56

TABLE 2 GENERAL GOVERNMENTAL REVENUES BY SOURCE (1)

LAST TEN FISCAL YEARS CITY OF BUSHNELL, FLORIDA License Charges Fines Interest Fiscal and

• for and and Year Taxes Permits Intergovernmental Services Forfeitures Miscellaneous Total 1995 S 504,851 $ 18,748 $ 381,085 $ 1,787 $ 19,134 $ 79,900 $ 1,005,505 1996 536,217 21,940 506,840 750 37,014 150,006 1,252,767 1997 577,880 14,891 619,647 3,074 34,834 112,377 1,362,703 1998 708,234 25,446 507,413 5,388 23,348 113,954 1,383,783 1999 741,281 5,093 271,282 19,398 39,109 104,625 1,180,788 2000 752,375 10,120 329,337 15,675 28,262 118,663 1,254,432 2001 845,671 8,836 538,473 21,699 22,494 73,599 1,510,772 2002 759,625 21,021 532,377 20,008 26,319 73,019 1,432,369 2003 838,785 14,433 327,643 35,077 17,243 85,717 1,318,898 2004 1,042,770 12,150 421,217 32,615 56,931 64,453 1,630,136 (1) Includes general and special revenue funds.

• Intergovernmental revenues includes grant revenues.

Information Source:

Audited Financial Reports 57 I X - I I . 1 . 1 1 - . I I - i - iL

I I '. 1--' I I I 1 'I- I I - I' . ' I I - I I - I'- 1' TABLE 3 GENERAL GOVERNMENTAL TAX REVENUES BY SOURCE (1)

LAST TEN FISCAL YEARS CITY OF BUSHNELL, FLORIDA Sales Use Fiscal Property Franchise Utility and Total Year Taxes Fees Taxes Gas Taxes Taxes 1995 $ 92,993 $ 55,796 $ 224,986 $ 131,076 $ 504,851 1996 94,340 58,618 233,307 149,952 536,217 1997 96,703 70,562 263,724 146,891 577,880 1998 93,779 71,762 243,798 298,895 708,234 1999 95,341 67,172 254,215 324,553 741,281 2000 94,776 74,443 265,383 317,773 752,375 2001 103,989 87,545 306,902 347,235 845,671 2002 124,441 61,345 306,879 266,960 759,625 2003 180,345 79,443 311,320 267,677 838,785 2004 283,977 103,763 339,527 315,503 1,042,770 (1) Includes general and special revenue funds.

Information Source:

Audited Financial Reports 58

TABLE 4 PROPERTY TAX LEVIES AND COLLECTIONS LAST TEN FISCAL YEARS CITY OF BUSHNELL, FLORIDA Percent of Total Percent Delinquent Total Total Tax Fiscal Tax Current of Levy Tax Tax Collections Year Levy Collections Collected Collections Collections to Tax Levy 1995 $ 97,083 $ 92,993 96% $ 92,993 96%

1996 97,598 94,340 97% 94,340 97%

1997 99,741 96,703 97% 96,703 97%

1998 98,259 93,526 95% $ 253 93,779 95%

1999 97,660 94,744 97% 597 95,341 98%

2000 93,261 94,566 101% 210 94,776 102%

2001 105,771 103,783 98% 206 103,989 98%

2002 129,973 124,309 96% 132 124,441 96%

2003 187,689 180,074 96% 271 180,345 96%

2004 401,341 283,977 71% 562 284,539 71%

• Information not available.

Information Source:

Sumter County Tax Collector and City Clerk's Office 59 k- - F- F- F- F- F- F-

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-- I - I .- I - I.-' ' I. - I I I - I -- I TABLE 5 ASSESSED AND ESTIMATED ACTUAL VALUE OF PROPERTY LAST TEN FISCAL YEARS CITY OF BUSHNELL, FLORIDA Real Property Personal Property Total Estimated Estimated Estimated Ratio of Total Fiscal Assessed Actual Assessed Actual Assessed Actual Assessed to Total Year Value Value Value Value Value Value Estimated Actual Value 1995 * * * *

$40,876,122 $48,089,555 85%

1996 * * *

• 42,016,283 49,430,921 85%

1997 44,689,547 52,575,937 85%

1998 $34,612,123 $44,538,727 $11,153,561 $11,160,563 45,765,684 55,699,290 82%

1999 37,489,724 53,308,291 11,621,364 12,911,203 49,111,088 66,219,494 75%

2000 42,971,688 53,748,501 13,039,744 13,046,244 56,011,432 66,794,745 85%

2001 49,955,255 61,049,808 14,793,127 14,799,627 64,748,382 75,849,435 85%

2002 55,848,388 67,919,372 18,975,340 19,370,643 74,823,728 87,290,015 86%

2003 66,137,442 79,041,600 17,905,037 17,912,138 84,042,479 96,953,738 87%

2004 71,762,910 94,846,097 18,958,581 24,403,456 90,721,491 119,249,553 76%

• Information not available.

Information Source:

Sumter County Property Appraiser 60

TABLE 6 PROPERTY TAX RATES - DIRECT AND OVERLAPPING GOVERNMENTS LAST TEN FISCAL YEARS CITY OF BUSHNELL, FLORIDA Total Total Fiscal City State and Year Millage County Millage Total 1995 2.49 20.09 22.58 1996 2.38 20.09 22.47 1997 2.35 20.14 22.49 1998 2.18 20.08 22.26 1999 2.147 20.02 22.167 2000 1.997 21.073 23.07 2001 1.889 21.073 22.962 2002 2.5 21.273 23.773 2003 3.5 21.273 24.773 2004 4.5 24.339 28.839 Information Source:

City Millage Records Sumter County Property Appraiser 61 i iH - H-c- iL z

TABLE 7 COMPUTATION OF OVERLAPPING BOND DEBT FOR THE YEAR ENDED SEPTEMBER 30,2004 CITY OF BUSHNELL, FLORIDA Debt Percent Amount Overlapping Debt Outstanding Applicable Applicable Sumter County $ 12,975,000 3.82% $ 495,645 Sumter County School Board 4,426,000 3.82% 169,073 Total Overlapping Debt $ 664,718 Note:

The City has no general bonded debt.

Information Source:

Sumter County Finance Department Sumter County School Board 62

TABLE 8 PRINCIPAL TAXPAYERS SEPTEMBER 30,2004 CITY OF BUSHNELL, FLORIDA Percent I of Total Wal-Mart Taxpayer Assessed Valuation 8,086,712 Assessed Valuation 7.8%

I-Metal Industries 4,299,541 4.1% 1 Bellotto Properties, Inc. 4,201,286 4.0% 1 Osprey of North Florida 1,966,877 1.9%

MC Suites, Inc. 1,469,140 1.4% 1 Sundance-Oaks, LLC 1,378,740 1.3%

420 N. Main, LLC 1,261,279 1.2% I American Television 1,047,152 1.0% 1 Yusef Gosla 951,467 0.9%

Bushnell Elderly Housing 914,561 0.9% 1 Total Assessed Value $ 25,576,755 24.5% l Information Source:

Sumter County Property Appraiser 63

I I, I 1----' I I 1' I --' I' r - I I I '--' I- I - I ' I I I ,1 I TABLE 9 RATIO OF ANNUAL DEBT SERVICE EXPENDITURES FOR GENERAL DEBT TO TOTAL GENERAL EXPENDITURES LAST TEN FISCAL YEARS CITY OF BUSHNELL, FLORIDA Total Total Ratio of Debt Fiscal Debt General Service to Total Year Principal Interest Service Expenditures (1) General Expenditures 1995 $ 23,723 $ 14,640 $ 38,363 $ 1,088,362 3.52%

1996 23,527 13,172 36,699 1,265,015 2.90%

1997 25,813 12,483 38,296 1,511,500 2.53%

1998 86,526 10,576 97,102 1,778,155 5.46%

1999 27,923 15,146 43,069 1,531,410 2.81%

2000 45,663 17,415 63,078 1,629,779 3.87%

2001 45,255 19,247 64,502 1,731,508 3.73%

2002 60,341 46,747 107,088 2,464,711 4.35%

2003 376,208 43,307 419,515 2,367,432 17.72%

2004 131,806 36,512 168,318 1,952,393 8.62%

(1) Includes general and special revenue funds.

Information Source:

Audited Financial Reports 64

TABLE 10 SCHEDULE OF ELECTRIC UTILITY REVENUE DEBT SERVICE LAST TEN FISCAL YEARS CITY OF BUSHNELL, FLORIDA Net Operating Revenue Debt Fiscal Operating Operating Available for Debt Service Requirements Coverage Year Revenues Expenses Debt Service Principa I Interest Total Ratio 1995 $ 1,494,100 $ 1,249,954 $ 244,146 73,419 3.33%

1996 1,652,681 1,341,876 310,805 71,363 4.36%

1997 1,784,613 1,368,548 416,065 76,228 5.46%

1998 1,863,515 1,398,763 464,752 $ 107,9,05 $ 4,402 112,307 4.14%

1999 1,824,130 1,375,163 448,967 26,2>05 2,375 28,580 15.71%

2000 1,982,195 1,547,436 434,759 30,5572 1,417 31,989 13.59%

2001 2,380,486 1,932,692 447,794 30,5'73 133 30,706 14.58%

2002 2,160,507 1,819,916 340,591 0 0 0 0.00%

2003 2,237,324 2,010,249 227,075 24,4 41 2,819 27,260 8.33%

2004 2,457,451 2,265,793 191,658 24,5;34 3,221 27,755 6.91%

• Information not available.

Information Source:

Audited Financial Reports General Ledger 65

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I I(- l' (-'- I--- ( --- 1. - [ - (II- -- - I I-(- - 1IIII - F- - I TABLE 11 SCHEDULE OF WATER REVENUE DEBT SERVICE LAST TEN FISCAL YEARS CITY OF BUSHNELL, FLORIDA Net Operating Revenue Debt Fiscal Operating Operating Available for Debt Service Requirern ents Coverage Year Revenues Expenses Debt Service Principal Interest Total Ratio 1995 $ 285,767 $ 220,368 $ 65,399 *

$ 38,828 1.68%

1996 366,672 236,155 130,517 56,762 2.30%

1997 333,100 233,147 99,953 56,962 1.75%

1998 371,517 278,354 93,163 $ 28,222 $ 15,000 43,222 2.16%

1999 424,921 274,350 150,571 37,877 10,499 48,376 3.11%

2000 434,564 315,926 118,638 19,428 12,435 31,863 3.72%

2001 401,838 376,660 25,178 31,397 10,359 41,756 0.60%

2002 417,566 438,338 (20,772) 15,000 4,493 19,493 -1.07%

2003 534,521 411,942 122,579 15,000 3,089 18,089 6.78%

2004 464,557 432,697 31,860 20,000 2,500 22,500 1.42%

• Information not available.

Information Source:

Audited Financial Reports General Ledger 66

TABLE 12 SCHEDULE OF SANITATION REVENUE DEBT SERVICE LAST THREE FISCAL YEARS (1)

CITY OF BUSHNELL, FLORIDA Net Operating Revenue Debt Fiscal Operating Operating Available for Debt Service Requirements Coverage Year Revenues Expenses Debt Service Principal Interest Total Ratio 2001 $ 338,861 $ 286,084 S 52,777 $ 22,500 S 3,565 S 26,065 2.02%

2002 370,732 298,701 72,031 22,500 3,315 25,815 2.79%

2003 380,763 355,715 25,048 22,500 2,379 24,879 1.01%

2004 432,064 393,435 38,629 22,500 1,070 23,570 1.64%

(1) The sanitation fund has no debt service requirements from 1992 through 1999.

Information Source:

Audited Financial Reports General Ledger 67

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f .1: 1- I [' -- I' - - I7 I 1-- - I -. I i I - 1 II TABLE 13 SCHEDULE OF WASTEWATER REVENUE DEBT SERVICE CURRENT FISCAL YEAR (1)

CITY OF BUSHNELL, FLORIDA Net Operating Revenue Debt Fiscal Operating Operating Available for Debt Service Requirements Coverage Year Revenues Expenses Debt Service Principal Interest Total Ratio 2002 $ 27,416 $ 64,483 $ (37,067) $ 0 $ 30,800 $ 30,800 -1.20%

2003 81,827 201,492 (119,665) 0 101,264 101,264 -1.18%

2004 343,255 572,040 (228,785) 0 129,500 129,500 -1.77%

(1) The wastewater fund has no debt service requirements from 1992 through 2001.

Information Source:

Audited Financial Reports General Ledger 68

DEMOGRAPHIC STATISTICS TABLE 14 I LAST TEN FISCAL YEARS CITY OF BUSHNELL, FLORIDA Fiscal Per Capita Median School Unemployment I Year Population Income Age Enrollment Rate/Percent 1995 1996 2,273 2,358

$ 14,473 14,967 40.6 41.0 1,447 1,551 5.90%

5.60%

I 1997 2,384 15,364 40.0 1,702 3.30%

1998 1999 2,423 2,547 15,640 15,847 41.5 41.6 1,627 1,710 2.50%

2.70%

I 2000 2,547 15,144 41.8 1,686 4.30%

2001 2002 2,016 2,052 17,312 17,312 42.0 51.0 1,804 1,734 2.70%

2.66%

I.

2003 2004 2,119 2,195 17,420 17,750 54.5 55.0 1,811 1,811 4.30%

3.50% I Information Source:

Sumter County Economic Development Council I I

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TABLE 15 PROPERTY VALUES AND NEW CONSTRUCTION LAST TEN FISCAL YEARS CITY OF BUSHNELL, FLORIDA New New Total Fiscal Construction Construction Estimated Year Units Estimated Value Property Value 1995 24 $ 1,024,398 $ 48,089,555 1996 25 806,752 49,430,921 1997 13 528,244 52,575,937 1998 13 421,900 55,699,290 1999 11 1,177,184 55,698,064 2000 14 1,683,880 56,283,743 2001 15 1,278,616 64,824,136 2002 17 9,479,510 78,461,118 2003 13 1,598,538 84,450,878 2004 5 2,814,947 88,152,208 Information Source:

City Building Department 70

TABLE 16 I MISCELLANEOUS STATISTICS SEPTEMBER 30,2004 CITY OF BUSHNELL, FLORIDA Date of Incorporation 1911 Form of Government Council-Manager Area/Miles 2.5 Miles of Streets 18.1 1 Fire Protection Volunteer Number of Stations I Number of Firefighters and Officers I8 Police Protection Number of Stations I Number of Policeman and Officers 10 Education I High School I Elementary School I Alternative School Municipal Water Department I Number of Consumers 1,095 Average Daily Consumption (Gallons) 294,000 Miles of Water Mains 21 Municipal Wastewater Department I Number ofConsumers 297 Average Daily Consumption (kwh Usage) 48,000 Miles of Sewer Main 18 Municipal Electric Department I Number of Consumers 1,122 Average Daily Consumption (kwh Usage) 61 Miles of Electric Lines 18 Sanitation Department Average Number of Consumers 1,072 Building Permits Issued 16 1 Recreation and Culture Number of Parks 30 Acre Sports Recreation Complex 5 Acre Recreation Complex 4 Acre Recreation Complex Public Library I Community Center I Employees 40 Information Source:

City Records 71

TABLE 17 SCHEDULE OF INSURANCE COVERAGE SEPTEMBER 30,2004 CITY OF BUSHNELL, FLORIDA Carrier Type of Coverage Limits of Coverage Coregis Insurance Company General Liability Bodily Injury and Property Damage Deductible - $2,500 $100,000 Per Person Law Enforcement Operations $200,000 Per Occurrence Premises/Operations Excess Injury and Property Damage Products and Operations $900,000 Per Person "Insured" Contracts $900,000 Per Occurance Host Liquor Law Liability Broad Form Property Damage Watercraft Liability (Under 26)

Limited Worldwide Coverage Additional Persons Insured Extended Bodily Injury Incidental Medical Malpractice Employees' Benefits Liability Program Management Services, Inc. Workers' Compensation Statutory - State of Florida Preferred Governmental Insurance Trust Policy #001 000000144100 Hartford Life Insurance Company Accidental Death/Dismemberment Principal Sum Accidental Medical Expense Benefit Maximum Benefit Amount - SI00 Deductible Amount - None Disability Weekly Benefit Amount - S100 Maximum Payment Period - 104 Weeks Accidental Partial Disability See Benefits Maximum Benefit Amount - $5,000 Hartford Life Insurance Company Volunteer Fire Department Accidental Death and Dismemberment Catastrophic Loss Benefit - $100,000 Accident Total Disability Benefit Weekly Benefit Amount - $250 Maximum Payment Period - 104 Weeks Coregis Insurance Company Automobile Liability and Physical Bodily Injury/Property Damage Damage S100,000 Per Person S200,000 Per Occurence Number of City Vehicles (32) 72

TABLE 17 ii SCHEDULE OF INSURANCE COVERAGE SEPTEMBER 30,2004 CITY OF BUSHNELL, FLORIDA I

(Concluded)

Carrier Type of Coverage Limits of Coverage I

Coregis Insurance Company Automobile Liability and Physical Excess Bodily Injury/Property Damage Damage (Concluded) $900,000 Per Person

$900,000 Per Occurrence I

Personal Injury Protection - $10,000 Medical Payments - $5,000 I Uninsured Motorists - $30,000 Liability Deductible -$1,000 Physical Damage Coverage - Actual Value I

Comprehensive Deductible -$1,000 Coregis Insurance Company Collision Deductible - S1,000 I Public Officials' Liability $1,000,000 Each Loss Coregis Insurance Company Property - Building and Contents Deductible - $250 All Perils S1,000,000 Aggregate Retention - S2,500 I

Coverage Extensions: Building - $3,750,467 Extra Expense Contents - S1,034,200 l Accounts Receivable EDP Building Ord. $25,000 Per Occurrence

$25,000 Per Occurrence I

Inland Marine Coverage $10,000 Per Occurrence Deductible - $250 All-risk Excluding Flood, Quake

$250,000 Per Occurrence I Contractor's Equipment - $67,963 EDP Equipment - $40,000 Miscellaneous Property Floater -

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TABLE 18 COMPUTATION OF LEGAL DEBT MARGIN SEPTEMBER 30,2004 CITY OF BUSHNELL, FLORIDA The Constitution of the State of Florida, Florida Statute 200.181, Sets No Legal Debt Margin.

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CITY OF OCALA, FLORIDA COMPREHENSIVE ANNUAL FINANCIAL REPORT September 30, 2004 Prepared by:

Department of Finance and Administrative Services

CITY OF OCALA, FLORIDA COMPREHENSIVE ANNUAL FINANCIAL REPORT YEAR ENDED SEPTEMBER 30, 2004 CITY COUNCIL Gerald K. Ergle, Mayor Mary S. Rich, President Kyle A. Kay, President Pro Tern Michael S. Amsden R. Kent Guinn Daniel Owen CITY OFFICIALS City Manager Paul K. Nugent Assistant City Manager Bill J. Looney Acting Airport Director Bruce H. Phillips Building, Zoning and Licensing Director. Jacques Skutt City Attorney Patrick G. Gilligan City Clerk Valerie J. Forster City Engineer Bruce H. Phillips Community Programs Director William L. Patten Electric Utility Director Rebecca M. Mattey Finance and Administrative Services Director Donald A. Corley Fire Chief Danny L. Gentry Fleet Management Director Glenn A. Stephens Human Resources Director Sandra R. Wilson Internal Auditor Eric J. Lewerenz M.J.S. Director Lynne M. Zonca Planning Director Tye L Chighizola Police Chief Samuel Williams Public Works Director John Zobler Purchasing Director W. Darryl Muse Recreation and Parks Director David J. Pritchard Risk Manager James A. Dalke Water and Sewer Director Henry K. Hicks

CITY OF OCALA, FLORIDA COMPREHENSIVE ANNUAL- FINANCIAL REPORT YEAR ENDED SEPTEMBER 30, 2004

-TABLE OF CONTENTS

~' -Pa" " ' e LI 0 L LETTER OF TRANSMITTAL INTRODUCTORY.SECT. I-'

CERTIFICATE OF ACHIEVEMENT FOR EXCELLENCE IN FINANCIAL REPORTING i.. i CITY OF OCALA ORGANIZATION CHART ...............................:.'.'. '.-..

..:';.-......dv FINANCIAL SECTION INDEPENDENT AUDITORS..REPORT............................................................................................................

, INDEPENDENT AUDITORS' REPORT.1 MANAGEMENT'S DISCUSSION AND ANALYSIS.... 3

_ BASIC FINANCIAL STATEMENTS:

L Statement of Net Assets ................................. . . . . . . . . . ..-. .' ..13 Statement of Activities . n :. .14.............................

- ah e- h t-.. A d .l m u ... . ........... .. ..........  ;...........

Balance Sheet -AllGovernmentalFunds ...... ...............................

16 Reconciliation'of the Balance'Sheet of Governmental Funds UTo the'Statement of Net Assets

-he T o S ~ n N et,f A s et . ..

s6;@

Statement of Revenues,' Expenditures and Changes in Fund

6;

,;,.@ ..@&..@@,.,....'...,,..f;.@.0,17

-Balances'-'All Bijc~ Governmental G o er m e ta Funds Funds.-::;;-w;

. .... ............ ......................... .......................................... . ;188: i:':;'-

L; Reconciliation of the Statement of Revenues,' Expenditures and ,Changes in Fund anes of the Governmental Funds to the Staternetof Acvities ...........

Statement of Net Assets-. ropta -.. ..... .. '. .......20 Stateme'nt of Reven'ues,'Expenses and Changes in Net A sets-ProprietarF nds..: ....................... ........... ......... 24 C ~~:r p i t r F n s , --.... , s,, ,.,.,.,., .-.,,,...... .!.

..'.-:.8.:'........................................

Statement of Cash Flows Prop...r..ier F.u .26 Statement of Fiduciary Net Assets ...........................?.-.,.,..-.-I-.........'-...;.;......... -30 Statement of Ch'anges in Fiduciary' NetAssets.... .31 Notes to Firnancial Statements ..........................

. .. 32 (Continued)

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U CITY OF OCALA, FLORIDA, COMPREHENSIVE ANNUAL FINANCIAL REPORT YEAR ENDED SEPTEMBER 30, 2004 U

TABLE OF CONTENTS (CONTINUED)

FINANCIAL SECTION - CONTINUED U REQUIRED SUPPLEMENTARY INFORMATION: -

Schedule of Revenues, Expenditures and Changes in Fund Balance - Budget and Actual - General Fund ................................ 57 Historical Trend Information for Pensiojn Trust Funds - Schedule of Funding Progress .58' Historical Trend Infomiation for Pension Trust Funds - Schedule of Contributions from Employer and Other Contributing Entities ............................. 60 SUPPLEMENTAL INFORMATION:

List of Nonmajor Governmental Funds . . .. . . . '.;.;........................................... 62 I Combining Balance Sheet - Nonmajor Governmental Funds .64 Combining Statement of Revenues, Expenses and Changes in -

Fund Balances - Nonmajor Governmental Funds .65 Nonmajor Governmental Funds - Special Revenue Funds: -

Combining Balance Sheet .......................  ;  : 66 Combining Statement of Revenues, Expenditures and Changes in Fund Balances 68 Schedules of Revenues and Exenditures - Budget and Actual:

Parking/Parks Enforcement Fund .70 Downtown Development Fund .................... 71 Local Gasoline Tax Fund .72 Stofmwater Utility Fund . -----------.----.-.-------.----------------------------------- ,..-------------------.---------------------.73 SHIP Local Housing Assistance Fund .;' ............................  : '74 L

Community Redevelopment Fund ' ': 75 Nonmajor Governmental Funds - Debt Service Funds: 76 Combining Balance Sheet .................  ; ..... 76 Combining Statement of Revenues, Expenditures and Changes in Fund Balances .78 Schedules of Revenues and' Expenditures - Budget and Actual: '

1995 Improvement Certificates Fund .80 2002 Improvement Certificates Fund ;81 2003 Improvement Certificates Fund ............................ i -. 82 200 Opioa Gas Tax BondsFund.......................................................................................8 Nonmajor Governmental Funds - Capital Project Funds:

Combining Balance Sheet .84....................  ;.;.;.;;.;.;;.;.;;.;..' 84j Combining Statement of Revenues, Expenditures and Changes in Fund Balances ........... ............... 85 Schedule of Revenues arid Expeditures- Budget and Actual:

2002 Optional Gas Tax Construction Fund .............................. 86 2002 Capital Improvement Fund .............................. 87

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CITY OF OCALA, FLORIDA COMPREHENSIVE ANNUAL FINANCIAL REPORT, YEAR ENDED SEPTEMBER 30,2004-L.

TABLE OF CONTENTS (CONTINUED)

L) Intemal Service Funds:

' List of Internal Service Funds ...........  ;-:;-:;;-;8 itCombining Balance Sheet.......8...9......9.........8.......................8................................................... 9 I Combining Statement of Revenues, Expenses and Changes in Net Assets ..... .................... ......90 Combining Statement of Ca Flows sh ' . ; . : . : .91 91......................

STATISTICAL SECTION l Description of Schedules in Statistical Section ..:3.........

General Governmental Revenues and Other Financing Sources By Source - Last Ten Fiscal Years 94 L General Governmental Expenditures and Other Uses By Function - Last Ten Fiscal Years ................ -96.......

Property Tax Levies, Tax Collections and Assessed Valuations - Last Ten Fiscal Years .98 L Property Tax Rates and Levies - Direct and Overlapping Governments - Last Ten Fiscal Years .99 C Special Assessment Collections - Last Ten Fiscal Years . . . 100 Computation of Legal Debt Margin ... 101 I; Schedules of Bond Coverage:

Schedule of Electric System Revenue and Refunding Revenue Bonds

- Last Ten Fiscal Years .102 Schedule of Water and Sewer Revenue and Refunding Revenue Bonds i - Last Ten Fiscal Years .103 Schedule of Utility Systems Subordinate Refunding Revenue Bonds

- Last Ten Fiscal Years .105 Schedule of Capital Improvement Revenue and Refunding Revenue Bonds, and L! Capital Improvement Revenue, Revenue Refunding and Refunding Revenue Certificates - Last Ten Fiscal Years ...............  ; 16..............

106 L Schedule of Optional Gas Tax Revenue Bonds and Optional Gas Tax Refunding Revenue Bonds - Last Ten Fiscal Years .108 Computation of Direct and Overlapping General Obligation Debt .109 L; i c la e u S a itc lD t ......................................................................................

Miscellaneous Statistical Data...110

1 Demographic Statistics................................................................................................................................ 111

- List of Ten Largest Taxpayers -2004 Tax Roll ....................................................... :112 Schedule of Insurance in Force .113 Property Value, Construction and Bank Deposits - Last Ten Fiscal Years .................................................... 115 Summary of Debt Service Requirements to Maturity - All Bonded Debt .116

ii CITY OF OCALA, FLORIDA COMPREHENSIVE ANNUAL FINANCIAL REPORT YEAR ENDED SEPTEMBER 30, 2004 fi TABLE OF CONTENTS (CONTINUED) fi Statement of Bonded Debt and Interest:

Capital Improvement Revenue Certificates, Series 1995 .......... .... 117 1..........

tp Capital Improvement Revenue Certificates,. Series 2002 .118 Capital Improvement Refunding Revenue Certificates, Series 2003 .119 Optional Gas Tax Refunding and Improvement Revenue Bonds, Series 2002 .120 P

Water and Sewer Revenue Bonds, Series 1995 .......................................... 121 Water and Sewer Refunding Revenue Bonds, Series 1996 .122 Water and Sewer Re venue Bonds, Series 20011 Water and Sewer Refunding Revenue Bonds, Series 2001 A;.124 Li 123...........................

Electric System Refunding Revenue Bonds, Series 2001 .125 tP Analysis of Sewerage System Capital improvement Fund Established for Florida Department of Environmental Regulation Grant #621080 .126 P;

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-F City of Ocala Ocaa-Maion County

.-FINANCEE& NADMINI

(*( SERVICES.DEPARTMENT"-I P.O. BOX 1270, OCALA, FLORIDA 34478-1270 (352) 629-8373,

-FAX: (352) 690-2025 April 26, 2005 Citizens, Honorable Mayor,

& Members of City Council City Hall.

Ocala, Florida 34478 Ladies and Gentlemen:

It isa pleasure to submit this Comiprehe'nsiveAn-nual FinancialRepo' (CAFR) for the City of Ocala, Fiorida for the fiscai y3ear'ended September 30, 2004; The rreportfuilfills the require-ments set forth in the FloridaStatutes, Chapter 166.241(4) and the Rules of the Florida Auditor General, Chapter 10.550. - -, -

This CAFR is controlled by and is the resp'onsibility of City management.- We believe 'that the report accurately and fairly presents the financial position, results of operations of all fund types, and cash flows of proprietaryfund types oftfh City. All dis' l6sures necessaiy to enable the readef to gain'an"'understandingrofthe City's financial'activities have been included. The report is structured to be'of interest to the public, local government officials, state agencies and the banking and financial community, in general.

. :n . d - ( 'a ;

i*Zt*;4tSs In developing, maintaing and evaluating the City s accounting system, management has

+e establishled a comprehensive interuial cohtrol framework that 'i'd signd bboth to ensure that the City's assets are protected from loss, theft or misuse and to ensure that 'suffcieint reliable accounting data is compiled to allow for the preparation of financial statements in conformity with generally ~accted accounting principles (GAAP). iThis int~eruil control structure is osolute, assurance that these 6bjectives ire met. The

.sIt i. .e? i i = ,_4

-6a.> -f I h _ d concept of reasonable assurance recognizes that: (1) the cost fa control should not exceed

,,,_s*¢s t I}

the benefits likely to be deriVe d; and (2) thvaluation'of costs' and benefits requires ektimates and judgments by management. .The City's chart of accounts, substantiallysconplies with the 2

Uniform Accounting System as prescrilied by Chapter 3A 61 cf the Fo7riddAdmirlstrative

-Code.i The Florida Statutes requre an' independent audit ofthe books, financial r6ords and transactions of all adnministrativ6&partiments of the City bY'a Certified Public Accountant selected by the City Council. -The goal of the independent audit is to provide reasonable l

U assurance that the financial statements of the City are free of material misstatement. The audit involves examining, on a test basisevidence'supporting the amounts and disclosures in the

' financial statements; assessing the accounting principles used and significant estimates made by management; and evaluating the overall financial stateme'nt presentation. The'independent auditor has concluded, based upon the audit, that there is a reasonable basis for rendering an U unqualified opinion that the financial stitemiits presented herein are in conformity with GAAP. The auditors' report ondthe City's general-purpose financial statements, the combining and individual fund statements and the' schedules is included in the Financial U Section of this report.

The CAFR is presented in three sections: Introductory, Financial, and Statistical. The U Introductory Section contains the table of contents, this transmittal letter, the Certificate'of Achievement for Excellence in Financial Reporting for the 2003 CAFR and the City's organization chart.

The Financial Section includes the Independent Certified Public Accountant's Report on the City's Basic Financial Statements, Management's Discussion and Analysis, the Basic Financial Statements, Notes to Financial Statements, Required Supplementary Information, and the Combining and Individual Fund Financial Statements and Schedules. ,

The Statistical Section includes selected unaudited financial and demographic information designed to enhance the reader's'understanding of the City's past and its future-potential. lI The Management's Discussion and Analysis (MD&A) is a narrative introduction, overview and analysis that accompanies the basic financial statemeints. 'This letter of transmittal is j designed to complement the MD&A and should be read in conjunction with it.

• - i -*ai .i.Sla

' .: '- i~': is -to . ,~ r The Notes to Financiai State s in the financial section are necessary to understand the -

statements. The notes include asummr of significant accounting policies' and other' necessary disclosures relating to the financial position ofthe City.'

All City fuinds are included in this report. The City of Oc'ala-jrovides a full range of general services; including police and fire protection; general government; culture and recreation; the

construction andmaintenance of highways, streets and infrastrii ture; and other public works related activities.

L The City has nine enterprises th atprovide financial support and a high quality of service to its citizens. The enterprise funds include two ch~n'hipionship' gof courses with a total of 45 holes and clubhouse facilities, garbage and trash picku service (both back door aniid curb side),

.,- water and sanitay sewer services,' electric utility'service,;'an air (Ocal Internation'al Airport/Jim Taylor Field), an adult athletic complex,'a broadband'communications 'network, a municipal trailer park and aregional mass transit system. l The financial activities of all municipal boards and commissions are included in the City's financial statements.. Only the Ocala Housing Authority does not meet the established criteria for reporting and is excluded from this report. The Community Redevelopment Agency is Ii ii

AI

I..> ..*wr- -975 included to meet State statutoiyrequirements and because 'f the City Council's fiduciary responsibility.

Budgetary control is maintained on an annual allotment basis, based upon prior working capital and on revenue projections for the current year. 'Expenditures and encumibraices are recorded against budgeted appropriations. -'At mid-year, City department heads are required to reassess their appropriations for the'remiain'der of jhe year and, if fiecessary, a budget revision is prepared and submitted for City-Council approval.IThe Finance and Administrative ServicesjDirector coordinates the budget process. Uriliquidated pu:rchase order balances, as of September 30, are reappropriated in the form of a supplemental appropriation resolution, which is presented for adoption by City Council.- This rei6lution also includes a provision to carry-forward major projects not completed in the previous year that are not covered by purchase orders. All items in this resolution are subject to a working capital availability test.

Monthly reports are distributed to the various departments to keep them informed of their year to date expenditures, encumbrances and funds available.

Local Demouiraphic Statistics Population growth has averaged less than one percent per year for the last ten years. The growth has resulted from new residents relocating to the City from other areas of the country, annexation and new births in the community. Over the past several years, the City has had a more aggressive posture toward annexation. Long term, this will enhance the City's financial viability.

Population]

48,000- ;E

'47,0DOO~~

46X000 .~ Al 44~i X gr ifv 4400 0 - - sng 0 0.

41,000 :4,0 - 01 X-&. ; . .*-s . f .i .i.

- - -- 1995 -1996 -- 1997 --

1998 -- 1999 2000: 2001 :2002 2003 -2004

-Fiscal Years The iiicrea~smg property values are due to a combinat'ion ofnew oxn tructidn fansnexation and reassessments of existing property in the' area.' Aa Valorem taxe's base'd on prop~erty -values are a major revenue source to the City's General Fund for providing public safety and other essential City services.

iii

I.

r

$55,000 -

Property Values per Capital I 1 Pro pe rty I

$50,000 - ___ Values Per

$45,000 -

$40,000 Capita Real Dollars I

$35,000

$30,000

$25,000

• Property Values Per Capita I

$20,000 b

NO N49 NC Z 'A P NdjA'b N4'(:' T6P T,6P N , ,

cle,je, me p Constant Dollars I I

After many years of a relatively constant millage rate, the rate was increased by approxi-mately 10.6% in 2001 in order to increase the general fund balance to a more appropriate level and to provide necessary public safety capital and operating resources in excess of baseline U

budgets. The City Council strives to keep the millage rate at the lowest level possible while 1 continuing to provide quality service to the citizens of Ocala. For 2004 the rate was reduced by nearly 1.8% over the prior year level.

t II Millage Raes I 6.000 5.750 I 5.500 to 4)

IX 5.250 I 5.000 4.750 4.500 I I I I I I 1995 1996 1997 1998 1999 2000 Fiscal Years 2001 2002 2003 2004 t t

The City has experienced a steady increase in the tax levies due to a 62% increase in the assessed valuation of property within the City over the last ten years. The constant millage rate (1995) shows that the City's increase in tax levies is largely due to the increase in I

assessed valuation rather than an increase in the millage rate.

I-t iv tjI

7.-- j'f - "'

ITax Levies I -'Actual City

$15,000,000 Tax Levies

$14,000,000

$13,000,000

$12,000,000

$11,000,000

$10,000,000 Tax Levies

$9,000,000 with

$8,000,000 Constant

$7,000,000 Millage

$6,000,000 Rate of 5.0264 1995 1996 1997 1998 1999 2000 2001 2002 2003 2004 Fiscal Years Ocala Electric Utility, the City's Electric Department, remains comparable to other local electric companies in the average cost to consumers. The price increases in recent years are largely the result of increases in the cost of fuel used to produce electricity.

IYearly Average Cost of 1000 KHWs 95 X -Ocala Electric 90Utlt 85 -r- -Florida Power Z 0 80 - _Clay ...... Electric 75 70 -. Sumter 1995 1996 1997 1998 1999 2000 2001 2002 2003 2004 Electric Fiscal Years The median age of the County increased slightly to 45.1 years in 2003, the latest year for which data is available, due largely to the influx of older citizens.

I~dan ge]

46 44 42

& 40 38 36 34 1994 1995 1996 1997 1998 1999 2000 2001 2002 2003 Years V

Personal income per capita measures the ability to pay taxes and other costs for City services.

It demonstrates to credit rating agencies the ability of a local government to repay debts without creating a hardship for its citizenry. In the community, the economy supports some expendable income. Most of the dollars are allocated by individuals to pay for necessities, e.g. food, clothing, etc. Additionally, some percentage of income supports the cost of government. To the extent personal income levels do not keep pace with inflation, there is a commensurate reduction in an individual's ability to pay for governmental services. The chart below shows the growth of personal income per capita in Marion County through 2004.

Personal Income per Capita for Marion County Residents 30,000 -

25,000 70 20,000 -\.-m;!*llll:I

= 15,000 0

a 10,000 5,000 ~_l14 O- ,J0>lL 1995 1996 1997 1998 1999 2000 2001 2002 2003 2004 Years Historically, Marion County has experienced an unemployment rate similar to the unem-ployment rate of the State of Florida but for the past three years Marion County has experienced a significantly lower rate. This is attributable to the City's efforts pursuant to economic development. The City's Electric Utility allocates dollars annually for leveraging against other community resources, which has resulted in a much stronger employment base.

Unemployment Ratej 6.0 -------- Ocala/

. _ _ Madon 5.0 - County 4.0S 4.0x -a- xState of Florda 3.0 l 1995 1996 1997 1998 1999 2000 2001 2002 2003 2004 Years Vi c ot I I--

w i;T:,. 7111,T,

^ws, : §!

Maior Industries affectinE the Local Economy.'

Horse breeding, dominated bhjThoroughbreds and Arabians, is a major industry in the Ocala area. The tourist industry also has a significant impact on the economy, with Silver'Springs Attraction and the Ocala National Forest nearby. Some other local industries making Ocala the place for their operations are Emergency One, Inc., Clairson International Corp. (Closet Maid), K-Mart'Corporation (K-Mart Distribution Center), Merillat Industries, Inc., Class I, CarQuest, Lockheed Martin, Cingular Wireless Call Center and Signature Brands, LLC.

Future economic outlook Ocala/Marion County population growth rate ranks 15 'l among Florida's 67 counties. Net migration to Marion County is expected to outpace job growth for thie intermediate and long-term futur'e, ensuring a sufficient workforce to meet the needs of the expanding local ec6nomy.- The City's Economic Improvement Fund (EIF) is used to h&lp new industries set up' their operations in Ocala. -

The improvement in economic conditions begun last year has continued through fiscal year

-2004.'. However, concerns over domestic terrorism, international tensions and the ongoing war in Iraq have combined to slow the recovery. -Continuing shortfalls' in the State budget, partially due to a decline in tourism post-91 1i and the passing of several very'c'stly' constitutional amendments in recent years threaten future Revenue' Sharing dollars for the City and other local governments.. These conditions could continue to impose difficult economic times and tight budgets for the City over the next few'years.

-~' lXMAJOR

; INITIATIVES s ¢ , ' 1  ;

9 A- - :. ., ;  :..

For the Year The City's major goals for-2004 as directed by -the City Council, were to maintain the high quality of life for the citizens of the City ofOcala, provide greater fiscal responsibility to the citizens, improve services to-the.Ocala commupty and cocntinu onomc&deVelopment activities.., a ,

Infrastructure improvement projects are still underway in the electric and water and sewer systems. During fiscal year 2004, the City began a comprehensive underground water and sewer piping and infrastructure evaluation to determine the condition of the water and 'sewer infrastructure. In addition, the replacement of a major sewer line along SE 17h Street was laccomplished.j.The City also continues'to renovate' existing' City'biildirigs, inicldimgAthne refurbishing ofthe old OEU Customer Service Office building tohoius'ethe City's Building Department during fiscal year 2004. .For a numib~r 'ofye rs,'hCityad MarionCointy have shared the costs of improvements of some major arterial 'stfeets. In 2004 'the City initiated major improvements to SE. Ft. KingiStreet., X-

.! I y *ei

The City sponsored weeklong celebration of racial harmony and cultural awareness called-

"One America .... One Ocala Week" was somewhat"abbreviated this year. due to Florida's.

unusually severe hurricane season. The week's events brought together diverse citizens to promote racial' harmony, encourage appreciation and respect-for cultural differences and to spotlight racial and cultural issues that need to be addressed in our community.

The City's 5-year interlocal agreement with'the City's two hospitals and Marion County to provide ambulance service throughout Marion County began' in fiscal year 2004.- In its initial year of operations the Emergency Medical Services Allianc `Ic.-(EMSA) fared somewhat better financially than originally projected. The City's financial commitment, as per the agreement, does not begin until Fiscal Year 2005. The annual cost to the City is projected at U

$804,000.

In addition, the following programs and projects are underway to foster growth and development in the'commu'nity as a whole:

U

• Congruent with the Council's policy objective ofproviding services to low income; individuals in the community; "Operations Infrastructuie" provides grants to qualified property owners to pay utility connection fees and related expeinses.- The program also provides for the installation of underground utilities and the paving of streets. This I

funding is coupled with the CDBG'allocation to provide ample funding to meet the needs of the southwest quadfant of the community. The southwest quadrant is the first phase of the project. All quadra'nts of the comnmunity' are scheduled' for improvements to be L

implemented over a six-year time frame.

• The City has also embarked on key activities related to downtown redevelopment. These activities have included creatiiig selected "site'-specific6 redevelopment plans, an overall strategic development schedule and a comprehensive marketing analysis. The activities will lead to planned physical development that complements and enhances the downtown Community Redevelopment Area (CRA). In Fis~al Year 2004, a Downtown Master Plan was adopted by City Council and a Request for Proposal was issued for three of the six i identified sites.

• During fiscal year 2001, staffinthe Electrie Department conducted a workshop with Council relate-d t long-term planning for the' electric 's'ystemn.: There were several projects L

identified that' are geared toward nkixi th'e system more reliable and efficient.; The magnitude of the total five-year capital improvement program is $69 million.

Forthe Future  ;

fThe City will contnue to upgrade infrastructure", and programs are already underway to.l

improve and expand the electric system, the water and seweir;system and the City's streets.

'The City has develop'd a capital impiovement piogram~consistiiig of neaily $70 million in water and~se'ver pirojects. The program inclide's'the new water'reclaination plant and several

replacehent and renewral projects. A portioni'bf thecapital improveirents was financed - X through the issuance of the Water and Sewer Revenue Bonds,' Series 2001 and Series 2001 A.

viii

The City's Electric Utilitiiurchases power for6its customers by way oftheCity's relationship with the Florida MunicipaiPo'wer Agency (FMPA). FMPA'has-ac6onumitment under an All Requirements Power Supply Project Contrct agrherent (ARP) with member municipalities to provide and deliver all power' requiried by the municipal ties; Inan effort to keep its;--

commitment to the members of the ARP, FMPA contemplates building or jointly participating in the building of three power plants over the next three to fifteen years., Although FMPA is yet to quantify the fiscal impact, the City's share of associated debt se r'vice6forrthedk priojects

-would be approximately 19% of FMPA's portion. This could have a significant impact on the City's ability to borrow for other projects.,e' City will be working wthfFMPAlto explore other alternatives for addressing 'thedemand,sisuch as long-teirm p'wer purchase contracts.

The City's Downtown eopment Proga, initiated in fiscal year 2004, -will continue in future years. The selection of a development propopalthe c'ration of sit`e-specificplans and the negotiation of a develo6pme nt agreement and incentive package are' expected to-occur in the coming year. ' ' ' --.

The City of Ocala has committed to taking the leading role in the revitalization efforts of the West Ocala Historic District, which was listed on the National Register of Historic' Places in June 2002.: -The City has developed new housing programs that include facade grants for existing housing and plans for new affordable'infill housing.' Nblic-prN'ate partnerships with L Habitat for Humanity, financial institutions, developers, contractors and building 'supply companies are being pursued to facilitate the revitalization effo's. It is anticipated that private owners will follow thie City's lead by either participating in the faicade program or by working with banks and private developers. The City is 'alsoworkinig on infrastructure improvements to the water and sewer systems, drainage, streets and sidewalks, as well as historic street signage and stop signs. . . . - . , -

OTHER INFORMATION

.TsPension i FustFndOeaions-The City sponsors separate contributory defined benefit-pension pians for its Police' Officers and its Firefighters' and a non-'cintribiutor-ydefin'ed benefit pensio plan" for all 6thier-fulltime employees. The assets of eatch plan are managed y multiple inistint'manage's iind the

• board

. of each plan retains a advisor who prepares quarterly reports evaluating the results achieved by the plan's investment nanagers. Eachyear' idpendent atcti~ies engaged by the

-various pension plans calculate the am'iount bf'the annua lacontribuftidn that t he"City must mae

to the pensionbplans to ensuri e that they will be 'i'ob ilymele '1r bligationis totitbe City's Due to continuing str6ni equity marke conditions, the coien Truk Funds experienced a $9.9 million increasem pianhe'nt-a'ssets"durirg 2004. Co"imibined'netfinmvestment gains for the three fuids totaled $10.3 'mii'forthe year ending Septernher 30,t2004t compared to a combined net investment gain of $11.9 million for the previous year. For ix

U

-FY 2004 the City contributed 12.5% of payroll to all employee pension plans. With the exception of the Firefightees Retirement Pldn,.the City's contribution at this 'rate, 64led&

with the good investment results, appears to, 6 eadequale to fund the plans. City staff are continuing to work with the Firefighter's Retire'ment Plin Board to deal with shortfills in that U plan.

Debt Administration .,, U At September 30,2004,,theCity had$142,035,000 inoutstandig serial'and term n sand certificates. Of this amount, $92,295,000 is'`associated with enterprise fuiids'and $49,740,000 is associated with governmental funds. Allof the City's issues carry high'ratings. Debt coverage ratios for the.City's bond issues are included in the statistical section of this report Although the City may issue obligation' debt in an aamouptujp t6 20% of the iissessed Ageneral valuation of the taxable real irid personal property in the City according to article IX, section 9.02, of the City Charter,there is no 'general obligation debt ouistanding. '

Cash Management The City is authoriz'ed by Florida Statutes to' inivest' in obligations of U.S. 'agencies, interest-bearing time deposits, and savings accounts in banks and in saving s'and loan -associations. In U

addition the City has 'an investment policy, whichlifrad iis thei instrubents in which the City can invest. The primary objectives of the City's investment policy are the'safety and:-

preservation of principal, liquidity and yield while minimizing risk. -

Cash temporarily idle duringgthe year was investe'd in the State Board of Administration Local government Surplus Trust Fund, which is an investment po'ol administered by the State of Florida. At September 30, 2004 our investments with the State Board of Administration were' earning 1.70%.

I During fiscal 1998, the City hired Sawgrass Asset Management, L.L.C. as its investment manager to maximize investment earnings. In fiscal 2003, due to the size of the City's L

portfolio, the Investment Committee made the decision to divide the funds between multiple investment managers., Consequently, PFM Asset Management, LLC. and Trusco Capital -

Management were hired inJuly 2003. Investmients of approxiniately $30 niillion were'l transferred to each of the newmanagers fro'm Sawgrass Asset Management. '

The three managers, within the confines of the City investment policy, invest the City' reserve

'funds in broadly diversified U.S. Government, U.S.' Agenc 'and'crporate debt obligations.

..^Compliance to the terms o'fthe' City investment policy restrictions with 'regard to credit and market risk is strictly monitored. Portfolio investments range from 30 days to 6.'4 years to Ii maturity with the average maturity of 33.6 months deriving a yield of 1.52%. The'City'sl investment portfolio of $1 10,966,790 at September 30, 2004 consisted of U. S. Government JJ and federal agency secrities (61%), corporate bo'nds (36 %)j and cash equ'valents (3%). Total earnings on those investments during fiscal year 2004 were $1,677,220.

,U

Risk Manarement The Intergovernmental Risk Management Department was established through an Interlocal Agreement between the City of Ocala and Marion County in 1987. The Department is charged with mininiizing the adverse impact of risk on the organizations' resources. -To achieve this gdal' the oowing programs have been established within the department.

Employee Insurance tHealth Beniefits, Dependent Coverage, Life Insurance, Short-term anid Long-temn Disability Insurance Plans.

Employer'Insurance - Workers'Compensati6n, Property,;Auto, General and Professional Liability Insurance; Claims Management, and Safety Activities.

Environmental - Compliance with Federal, State and Local Environmental Regulations. Environnienthl Site Assessments of City properties and properties tie-:

City is consideri g-acquiring.

Information on the City's insurance coverage can be found in the Statistical Section of this report.

AWARDS AND ACKNOWLEDGEMENTS Awards The Government Finance Officers Association of the United States and Canada (GFOA) awarded a Certificate of Achievement for Excellence in Financial Reporting to the City of Ocala, Florida for its comprehensive annual financial report for the fiscal year ended September 30, 2003. This was the twenty-second consecutive year that the City of Ocala has achieved this prestigious award. In order to be awarded a Certificate of Achievement, a government must publish an easily readable and efficiently'organized comprehensive annual financial report. This report must satisfy both generally accepted accounting principles and applicable legal requirements.

A Certificate of Achievement is'valid for a period of one year only. We believe that our current comprehensive annual financial report continues to meet the Certificate of Achievement Program's requirements and we are submitting it to the GFOA to determine its eligibility for another certificate.

The City was also awarded the Distinguished Budget Presentation Award by the Government Finance Officers Association of the 'United States and Canada for its annual budgets for the fiscal years beginning October 1, 1987 through 2003. In order to receive this award, which is xi

valid for a period of one year only, a governmental unit must publish a budget document that meets program criteria as a policy document, as an operations guide, as a financial plan and as a communications medium.

-Ackrnowledizements.  : . i-.J f6i The preparation of this comprehensive annual financial report was made possible by the dedicated service of the entire staff of the Finance4 and Adriministrative Sevice's Department.

Sincere appreciation is extended to specific individuals who worked diligeintl throuliout the audit: Diane M. McDonald, Controller; Cheryl A. Knight, Chief Accountant; Myron Taylor, Revenue Officer and Chuck Backhus, Revenue Analyst. Appreciation is also extended to Eric L

Lewerenz, the City's Internal Auditor for his assistance in this effort.

In closing, without the leadership and support of the City Council, whose continued interest in maintaining a financially sound government as an invaluable asset to our community, the preparation of this report would not have been possible. Jt Respectfully submitted, Paul K. Nugent Director of Finance and v City Manager Administrative Services -

Xihi JJ

... .... .Ii

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.:  : J!

Certificate off Achievement for Excellence

:-inFiancial

0:-- - -I:-Report~ing ;I --; -

Presented to City of ,cala, Florida' For its Comprehensive Annual Financial Report for the Fiscal 'YearkEnded-,:

September 30, 2003 A Certificate of Achievement for Excellence in Financial Reporting is presen'ted by the GoVernment Finance Officers Ass6ciati6n of the United States and Canada to government units and public emipiioyee retirement systeibs 'hose comprehensive annual financial reports (CAFRs)' achieve the highest standards in government accounting

'and financial reporting.- -

cn .> ;  :  :-President

1. x';ti'"- Director Jo. , 1.Executive Director

I CITY OF OCALA ORGANIZATIONAL CHART J

U LI

.I MAYOR J

I CITYCLERK l 1TRAAUDITORl I CITYMANAGE 1YAAE I Y I POLICE CHE ii

• ! ,. - Ir '

U lFNANCE L _,ELECTRlC ADMIN. SERVICES PURCHASING tUTIL1TIES

.c-

_ WAERT I DEPT U

l HUMAN .l lRESOURCES'r U

INFORMATION_

TECHNOLOGY'. 1 l PLANN,1NG I; I RISK ':I l~.1 FLET I METROPOLITAN_

PLANNING ORG. l- MANAGMENT] l ti-COMMUNITYl :t l &: ZON1NG lENGrfJE:ERI l

l '

PROGRAMS RECREATIONl

'L

& :PARKS I AIR_

SERVICES Ii i

4' ilj xiv ii

Purvis Gray, INDEPENDENT AUDITORS' RPORT The Honorable Members of teCyConcil-City of Ocala Ocala, .Foria-. ft :i s to i-' -i. . ...

We h-ave .audited the accompanying financ~ial ~statements of gvrmna-ctiiebusinegsstype govermnental activities activities, each major fund and the aggregate rem-ining fund the ityof O ala .ori (the City) as -of and for the year ended Seipterb~ri3O, 2004 , which oolehlyp'riPise the City, s b'aic financial statements as listed in the table of contents. 'These fiancialst 'tm~~ent -aie Ahe resosibility'of the

-Citys management. Our responsibility isNereIss an opinion o'tl'ese finan'ia' st'atemets' bas on our audit. .- i -

We conducted our audit in ac n w accepted ithe Unite Se f America and the standards applicable to financial au dits contained in Government Auditing Standards, issued by the Comptroller General of the United States. Those standards -require that we plan and pefr teaudit-to obtain reasonable assuranced~bouit whether the financial statements are free of material misstatement An audit includes exa iin,>on a test basis, evidence supporting the amo~un'ts a_~d disclosures in the financial statements.' A lso nludes assessing the accounting piiciples used and significant estimates made by management, as Well as evaluating the overall financial statement presentation. We believe that our audit provides a reasonable basis for our -opinion.

In our opinion, the financial statements referred to-above present fairly, in all material respects, the respective financial position of the governmental activities, business-type activities, each major fund and the aggregate remaining fund information of the City as of September 30, 2004, and the respective changes in financial position and the cash flows, where ap licable, thereof for the year ended in conformity with accounting principles generally accepted in'the United States of America.

In accordance with Government Auditing Stan-dards, .e have also issued a report dated April.26, 2005, on our consideration ofuthe City's internal ciontrol over financial reporting and our tests of its compliance with certain provisions of laws, regulations, contracts and grants. That report is an integral part of an audit performed in accordance with Government Auditing Standards and should be read in, conjunction with this report in considering the results of our audit.'

Inou piinthinnia saemns efredt aov reet ail, nal mtrilrepet,1h Certified Public Accountants P.O. Box 23999 *222 N.E. Ist Street

• Gainesvillel Florida 32662.- (352) 378-2461 *FAX (352) 378-2S55 Laurel Ridge Professional Center

• 2347 S.E. 17th Street'Ocala, Floridas34471e (352)732-3872

• FAX (352) 732-0542 443 East College Avenue

• Tallahassee, FloridaA32301. (850) a 224-7144 FAX (850) 224-1762 1727 2rtnStreetouSarasota, Flprida 34236 (941) b365-3774

• FAX (941) 365-0238 MEMBERS OF AMERICAN AND FLORIDA INSTITUME OF CERTIFIED PUBLIC ACCOUNTANTS MEMBER OF AMERICA~NNTIuTE oF cERTIFIED PUBLIC ACCOUNTANTS PRIVATE COMPANIES AND S.E.C. PRACFIa SECTIONS

/

Il The Honorable Members of the City Council

' City of Ocala J Ocala, Florida

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INDEPENDENT AUDITORS' REPORT (Concluded)

I The Management's Discussion and Analysis, the major fund budgetary comparison and certain pension trend information as listed mA the. table of, contents, are not a required part of the basic financial statements, but are supplementary informiation' required bythe GASB. We applied certain limited procedures, consisting principally of inquiries of management regarding the methods of measurement and d

presentation of the supplementary information. However, we did not audit the information and express no opinion on it. LI Our audit was conducted for the purpose of forming opinions on the financial statements that' collectively comprise the City's.basic. financial statements. The introductory section combining and individual noimajor fund financial.'statetifiins,' and statistical tables listed in-the-table of contents are Wchedules U

presented for additional aialysis,,a'nd 'aIot a required part of th'eibasic ifnancial statements. We subjected the combining and individual non'major fund statements and schedules to the auditing procedures applied in the audit of the baasic, fina'ncia[ statdmiets and, in our opinion ,this infoiniati6n is fairly stated in all material respects, in relation to the basic financial statementstaken as a wlibIl& The introductory section and statistical tables have not been subjected to the auditing procedures applied in the audit of the ii U

basic financial statements and, accordingly, we express no opinion on them.

LI April 26, 2005 2:., _,.>5z U.- la Ocala, Florida U

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CITY OF OCALA, FLORIDA MANAGEMENT'S DISCUSSION AND ANALYSIS SEPTEMBER 30,:2004.

The City's management discussion and analysis presents an overview of the City's financial the activities for the fiscal year ended September 30,'2004. Please read it in conjunction with statements beginning on page Letter of Transmittal, beginning on page i, and the City's financial

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Financial Highlights The assets of the City exceeded its liabilities at the close of fiscal yeba 2004may by

--$431,629,815 (net assets). Of this amount, $74,425,809 (unrestricted net assets)

F be used to meet the government's ongoing obligations to citizens and creditors.

I- -.. At September 30,' 2004,-the City's governmental funds reported combined ending fund A balances of $47,314,332,'a -decrease bof $551,914in comparison With the prioryear.

factor of the decrease in fund balance is the 29% increase In debt service expenditures from the previous year.

'-At September 30; 2004, unreserved and undesignated fund balance for the General Fund was $6,184,000,-13.0% of total general fund expenditures. This is a reduction of

";$654,317 or 10% under the prior fiscal year...-

The Cis outstanding long- ermdebt decreased by $5,342,609 during fiscal year 2004.

Overview of the Financial Statements -

financial This discussion and analysis is'inten'ded to-serve as an introduction to the City's basic statements. ,The City's' basic'financial statements comprise three components: 1) government-wide'fin'ancial statements;, 2)'fudnd financial staterments, and 3) notesrto the financial statements'. finuancial This-report 'also'contains' other' supplementary-information in addition to the basic statements theIselves.'

Govemment-wide financial statements '

are The jgovemment-wide financial statements, ,which consist of the.following two statements, to a a broad overew of the Ciy's finances, in a manner similar designed to provide readers with private-sector business. .

with the The statement of net atspresents informationron all of the City's assets and liabilities, in net difference 'between the two' reported as net assets. Over time, increases or decreases

'r assets may serve as a useful indi6ator"of whether the financial position of the City is irnpro'ving

-deteriorating. . - .  :-  ; . -,

• assets The statement of acite presents- information showing howthe 'govemment's net the 2004. All changes in net assetstare ;reported 'as soon 'as changed during fiscal year cash flows.

underlying event,'givirig rise to'the change,'occurs,- regardless of the timing of related result in Thus, revenues and expenses are reported in this statement for some items that will only cash flows in future fiscal periods (e.g.,xuncollected and earned, but unused vacation leave) supported iBoth of these financial statements distinguish functions of the City that are principally that are

,by taxes and intergovernmental revenues (governmental actiities) fromrother functions charg'es

,intended to recover all or a significant portion of their costs through'user fees and S(business type activities). The governmental activities 'of the City include ugcvernent,general 1public safety, public works, culture and recreationjandhhousing rehabilitationThe business-type

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CITY OF OCALA, FLORIDA-,i MANAGEMENT'S DISCUSSION AND ANALYSIS (CONTINUED)

SEPTEMBER 30, 2004 - J activities of the City include its'electric'utility, solid waste disposal, water and sewer utilities, golf.

courses, airport and public transportation.

IJ The government-wide financial statements can be found on pages 13 and 14 of this report.

Fund financial statements, A fund is a grouping of related accounts that is used to maintain control over resources that have been segregated-for' specific' activities or: objectives.t - The. City, like other state and local govemments, uses fund accounting to ensure, and demonstrate compliance with finance-related U

legal requirements.'; All of the funds of the City can be divided into three categories: governmental funds, proprietary funds, and fiduciary funds.

Govemmental funds L'

Governmental funds. are used to account for essentially;thesame 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-U t6em 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 govemment's near-tern financing requirements. - -

Because the focus of governmental funds is narrower than that ofjthe government-wide financial statements, it is useful to compare the information presented for, governmental funds with" similar info matio1n pres~ented for govemmental activities, in-the govemment-wide, finuancial stateme'nts.',

By doing so, readers 'may better urderstand 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 reconciliation'to facilitate this comparison between governmental funds and 'governmental activities.' '-

i The City maintains several hidividual governinental funds.- nformation' is presented'separately in I the governmental funds' balance'-sheet'ard' in the governmental funds'statement'of revenues, expenditures, and changes in fund balances for the General Fund, which' is considered to be a major fund. Data from the'othdr'.governmental funds are combined into a single, aggregated presentation. Individual fund data for each of these nonmajor governmental funds is 'provided in the form of 'combining statements in'the other supplemental information section of this report.

The City adopts an annual appropriated budget for its general, special revenue and certain capital projects funds. ; Budgetary comparison, schedules have been provided for these funds tol demonstrate budgetary compliance. '

The basic governmental fund financial statements can be found on pages 16 through 19 of this report. u A . ,:' J ProprThe taifundtinstwo ts differnttypes of' proprietary funds., Enftrprise funds are used'to report the, same functions, presented "as' business-type- actviies` (electri' Utility,' water and- sewer, sanitatlon, etc.) in-the'govemnnent-Qwide financial sfateiirents. entemralservice-funds are 'an accounting, device used to acciumulate' and alldcate6`c6ts itte'rnfiy amnong 'the' City's various i

fulhctions. The 'City uses' the' intenmal s'ervic'e' fund !to'account for its' intemal service," fleet management, and self-insurance and risk management programs. Because these services l) predominantly benefit governmental rather than business-type functions, they have been included within governmental activities in the govemment-wide financial statements.

Proprietary funds provide the same type of information as the government-wide financial statements, only in more detail. The proprietary fund financial statements provide separate L

information for all of the City's proprietary funds.

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• r- 1. , 1 i CITY OF OCALA, FLORIDA' MANAGEMENT'S DISCUSSION AND ANALYSIS (CONTINUED)

SEPTEMBER 30,2004 The basic proprietary fund financial statements can-be found on pages 20 through 29 of this report. '

Fiduciary funds Fiduciary funds are used to account for resources held for the benefit -of parties outside the government. .Fiduciary funds are not reflected 'in the government-wide financial statement

'because the 'resource's of those funds are not available to support the City's own programs. The accounting used for fiduciary funds is similar to proprietary funds. Thefiduciary funds of the City are pension trust funds.,

-The basic fiduciary fund financial statements canDbefound on-pages 30 and 31 of this report.

Notes to the financial statements The notes provide:additional information that is essential to a full.,understanding of the data' provided'in the government-wide and fund financial statements. 'The'notes to the financial

statements can be found on pages 32 through 56 of this report. m*-

Other information -

In addition to the basic financial statements and accompanying notes, required supplementary information is included which presents budgetary comparison schedules for the City's general fund as well as historical trend information for pension trust funds. Required supplementary information can be found on pages 57 through 61 of this report.

The combining statements and budgetary comparison schedules referred to earlier in connection with nonmajor governmental funds and fiduciary funds are presented in the other supplemental information section of this report. Combining and individual fund schedules for the nonmajor governmental funds as well as forfthe internal service funds can be found on pages 62 through 94

-of this report.

.Government-wide Financial Analysis -

As noted earlier, net assets may serve over time as a'useful indicator of a government's financial position. -In the case of the City, assets exceeded liabilities by $431,629,815 at the close of the -

'fiscal year ended September 30, 2004.  ; '.

Thelargest portion of the City's net assetsapproximately 80%,-reflects its investment in capital assets (e.g. land, buildings, improvements other'than building including utility plants and

,extensions, machinery and equipment,' infrastructure and construction in progress), less any -

related debt used to acquire those assets which-is still outstanding The City of Ocala uses these capital assets to provide services to citizens and custormers;' consequently, these assets are not' available' for future spending. It should be noted that the resources needed to repay the related

=^capital asset debt must be provided from current resources.

-.,An additional portion of the City of Ocala's net assets, approximately' 10%, represents resources that are subject to external restrictions on how thek'may' be used. The remaining balance'of =

unrestricted net assets ($7,4A25,809) 'may be used to meet the City's ongoing obligations to its',

citizens, customers and 'creditors, as well asito provide the funding for various projects.

L.-At the end 'offiscal year,2004, the Citys able to report positive balances in all three categories off net assets, both for the goverrmentas a 'whole, as well as for its total governmental and'total

' business activities.- 'The same , situation held true for' the prior fiscal ,year.,

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CITY OF OCALA, FLORIDA. L MANAGEMENT'S DISCUSSION AND ANALYSIS (CONTINUED)

SEPTEMBER 30, 2004- -

U CITY OF OCALA, FLORIDA . ,.,

NET ASSETS Governmental Business-Type U Activitles Activitles Total 2003 , 2004 2003 2004- 2003 2004 Current and other assets $ 70,367,603 $ 69,898,027 ' S125,990,227^:$.1120,352,653r.f $196,357,830 $190,250,680 Capital assets (net) 169,275.789  ; z 165.344.986 252,337,006 258,753,778, . 421.612,795 - 424,098,764 Total Assets 239,643,392; . 235,243,013 378,327,233*.- 379,106,431- 617,970,625 -. 614,349,444

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Current and other liabilities 8,555,212 9,304,023 17,849,336 18,163,980 - : . 26,404,548 = 27,468,003 Long-term liabilities 58,984,098 58,033,859 100,822,181 97,2157,767- 159,806,279 155,251,626 Total Liabilities 67,540,310 67,337,882 11 8.671.517

--11 5,381 ,747 - -186,211,827

- 182,719,629 Net Assets:

Invested in capital assets, net of related debt Restricted Unrestricted 117,361.235 33,087,229 -

21,654,548 1 15,459,984

' 33,214,401 19,230,746 173,278,919

" 23,935,720 62,441,077- .

! f 230,012,247 f - 290,640,154 -. 345,472,231

-. -10,396,405 23,316,032 r '.."'57,022,949:

84,095,625 . 42,546,778

- 43,610,806 1!

Total Net Assets $ 172,103,082 $ 167,905,131 $ 259,655.716 $ 263.724.684 $ 431,758,798 $ 431,629.815 L'

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- rY 1cr OF OCALA FLORIDA

-: ICH-. ' HANGES IN NET ASSETS

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Governmental Business-Type

-*' ' Activities 2003 Activities '

2004 2003 2004 2003 Total 2004 i-if REVENUES:

Program revenues:

Charges for services S 6,098,943 $ 7,348.630 S 136,881,961, $ -153,072,655 $ 142,980,904 S 160,421,285 Operating grants and contrbution Capital grants and contributions 3,925,625

-'142,214-.-

8,972,211 29,045 895,435 5,115,107 4,345,717 3,173,740 4,821,060 5,257,321 13,317,928 3,202,785 iI General revenues: - - , V+E -s-- *;;

Property taxes 13,237,448 114,009.302 * -13,237,448. - 14,009,302 Other taxes 12,801,895 9,961,213 12,801,895 = - 9,961,213 Other 6,577,912 5,305,250 3,499,201 1,297,764 10,077,113 6,603,014 Total Revenues 42,784,037 45.625,651 146,391,704 161.689.876 - 189,175,741-. 207,515,527 EXPENSES: .

General Government Public Safety Public Works L- .1;-j

. 6,535,061 . -

• 27,115,122 16,410,274-1 6,970,877 28,723,206' 15,846,226 6,535,061' 27,115,122 16,410,274 6,970,877 28,723,206

.15,846,226

'I, Culture and Recreation * - 4,804W,900 4,667,252.8 4.804,900 4,667,252 Housing Rehabilitation Non-departmental Other ::- -. : ; .

272,948 220,218

..1,219,184 304,668.

401,875 2,634,403

'272,948

-220,218 1,219,184 304,668 401,875 2,634,403 I.

Interest On Long Term Debt 2,044,103 1,941,182 2,044,103 . 1,941,182 Electric

• 98,558,024' 112,445,791 98,558,024 112,445,791 Water and Sewer Sanitation Munikpal Gotf Courses 15,794,442-

. 8,257,920 17.609,196 9,080,734 2,665,999' 15,794,442-8,257,920 2,580,330

. 17,609,196 9,080,734 11 2,580,330 2,665,999 Municipal Trailer Park , A111,198. . 96,477 111,198 96,477 International Airport 1,491,629 1,491,874 1,491,629 1,491,874 Emergency Training Facility Adult Athletic Complex , 166,947; - 171.140 166,947 - 171,140 1i Communications 799,468 854,242 799,468 854,242 Suntran 1,521,482 1,639368 1,521,482 1,639,368 Total expenses Change in Net Assets Before Transfers 58,621,810 (15,837,773) 61.489,689 (15,864,03O 129,281 ,440 17,110,264 146,054.821 15,835,055 187.903.250 1,272,491 207.544.510 (28,983)

I Transfers 11,461,890 11,766,087 (11,461.890) (11,766.087)

Change in Net Assets Net Assets - Beginning NetAssets-Ending (4,375,883 176,478,965

$172,103,082 $

(4,097,951) 172,003,082 167,905.131 $

6 5,648,374 254,007.342 259.655,716 $

4,068,968 259,655,716 263.724.684 $

1,272,491 430,488,307 431,758,798 $

431,658,798 431,629,815 (28,983)

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I CITY OF OCALA, FLORIDA MANAGEMENT'S DISCUSSION AND ANALYSIS (CONTINUED)

SEPTEMBER 30, 2004 There was a net increase of $4,068,968 in net assets reported in connection with the City's business-type activities, while governmental activities decreased the City's net assets by

$4,097,951. The overall affect is a net decrease to the City's total net assets of $28,983.

EXPENSES AND PROGRAM REVENUES - GOVERNMENTAL ACTIVITIES

%of Program  % of Net (Expense)

Functions/Programs Expenses Total Revenues Total Revenue General Government $ 6,970,877 11.3% $ 4,048,606 24.8% $ (2,922,271)

Public Safety 28,723,206 46.7% 1,851,515 11.3% (26,871,691)

Public Works 15,846,226 25.8% 7,083,235 43.3% (8,762,991)

Culture and Recreation 4,667,252 7.6% 817,216 5.0% (3,850,036)

Housing Rehabilitation 304,668 0.5% 304,668 1.9%

Non-departmental 401,875 0.7% 0.0% (401,875)

Other 2,634,403 4.3% 2,244,646 13.7% (389,757)

Interest On Long Term Debt 1,941,182 3.1% 0.0% (1,941,182)

$61,489,689 100.0% $16,349,886 100.0% $ (45,139,803)

Revenues by Source-Governmental Activities Investment Income -Miscellaneous Revenue 1.9% r 0.1%

State Shared Revenues I I Charges for Services 9.6% 16.1%

Other Taxes-,

1.4%

Utility Service Taxes 20.4%

F Operating Grants and Contributions 19.7%

Capital Grants and Contributions 0.1%

Property Taxes 30.7%

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CITY OF OCALA, FLORIDA-MANAGEMENT'S DISCUSSION AND-ANALYSIS (CONTINUED)

SEPTEMBER 30,-2004 LI EXPENSES AND PROGRAM REVENUES - BUSINESS-TYPE ACTIVITIES LU

% of Program  % of Net (Expense)

FunctionslProprams Expenses Total Revenues Total Revenue U

Electric $112,445,79 1 77.0% $121,881,074 75.9% $ 9,435,283 Water and Sewer .,!'17,609,19 6-- 12.1% 22,272,107 13.9% 4,662,911 Sanitation Municipal Golf Courses 9,080,73[4 ~

2,665,999 6.5% ;

1.8%

5.- 5 9,721,205 2,345,534 6.1%

1.5%

-:640,471 (320,465)

U Municipal Trailer Park 96,47 106,001 0.1%  : 9,524 international Airport Emergency Training Facility

- 1,491,87 4 0-1.OWI

.0 %

1,518,109 0.9%

0.0%

26,235 U~

Adult Athletic Complex 171,14 103,295 0.1%- (67,845)

Communications Suntran 854,24 W2 1,639,36 8 0.6%:

1.1%_ -

1,445,890 1,198,897 0.9%

0.7%

591,648 (440,471) fl

$146,054,821 100.0% i $160,592,112 100.0% $ .14,537,291

,U It should be noted that all of the expenditure numbers are-inclusive of depreciation expense, which contributes to the net position. Management, in concert with Council, continues to monitor the progress of policies aimed at moving funds towards a net revenue position. For example, the Sanitation Fund increased residential rates by one dollar ($1) per month. As you can see, by i,

assessing and increasing rates commensurate with expenses, this fund now shows a net profit forthis year. ii'-'

The Municipal Golf Course Fund continues to make progress towards self-sufficiency. Steps i ;. Ji taken have reduced the operating position by $206,767 or 39% for FY2004, and we anticipate FY2005 will continue to show success.

The Adult Athletic Complex has committed to raise rates annually pursuant to full recovery of 12 costs within three (3) years.

While the net operating position of the Suntran Fund reflects a deficit, this is not problematic due to federal, state, and county support. -

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CITY OF OCALA, FLORIDA MANAGEMENT'S DISCUSSION AND ANALYSIS (CONTINUED)

SEPTEMBER 30, 2004 REVENUES BY SOURCE - BUSINESS-TYPE ACTIVITIES Charges for Services 94.6% Operating Grants and Contributions 2.7%

Capital Grants and Contributions 2.0%

Investment Income 0.8%

Financial Analysis of the City's Funds As noted earlier, the City uses fund accounting to ensure and demonstrate compliance with finance-related legal requirements.

Governmental funds The focus of the City's 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 the end of fiscal year 2004, the City's governmental funds reported combined ending fund balances of $47,314,332. Unreserved fund balance of the governmental funds is $13,162,755 of which $4,551,291 is designated for specific projects. The unreserved and undesignated fund balance of $8,611,464 is available for spending at the City's discretion. The remainder of fund balance is reserved to indicate that it is not available for new spending because it has already been committed.

The General Fund is the primary operating fund of the City. At the end of fiscal year 2004, the fund balance of the General Fund was $10,735,291, all of which was unreserved. Of the total unreserved fund balance, $4,551,291 is designated for specific projects and $6,184,000 is unreserved and undesignated. As a measure of the General Fund's liquidity, it is useful to compare both unreserved fund balance and total fund balance to total fund expenditures. In this case, they are one in the same and represent a healthy 22.6% of the total general fund expenditures.

The fund balance of the City's General Fund decreased by only $494,529 during the current fiscal year, as compared to a decrease of $2,697,103 for FY2003. Key factors for this decrease are as follows:

• An increase in overall revenues of 7.7%.

• Expenditures increased by only $650,717 over last year, a conservative 1.4% increase.

• Less than 100% of the appropriated budget was expended.

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ELL CTY OF OCALA, FLORIDA, MANAGEMENT'S DISCUSSION AND ANALYSIS (CONTINUED),

SEPTEMBER 30, 2004 U' Proprietary fundsU The City's proprietary funds provide the same type of informnation found, in the government-wide financial statements, but In more detail. All proprietary funds are reported as major funds.

Unrestricted net assets of proprietary funds at the end of the-year amounted to:

Unrestricted Fund_ . Net Assets Electric System Revenue" $ 39,067,070 Water and Sewer Sanitation~ ,751,656

_15,723,359 L Municipal Golf Course Municipal Trailer Park Ocala International Airport (794,837) 130,231 (714,994)

U Adult Athletic Complex (312,640)

Communications 1,338,660 SunTran 6,558 Total $ 55,195,063 Other factors concerning the finances of these funds have been addressed in the discussion ofL theCity's business-type activities.;

Gen'eral Fund Budgetary Highlights.,~

The following is a bnrie review of the budgeting changes from the original to final budget (please see budget to actual co-m parisonin fpage 57).;. ,. ' .'

.The., increases -in: revenu- i;wre weelaglrgl attributable. to. $2,637,888,, increase, in- otherI inegvrnetl-rvne- 'suic 'as ~community' 'programs,~-. and .,Florida . Department~ of Traspotatongratsari a$402,802 ihcrease in other revenues. Additionally, the general, fund isexeced t rciv $4600 i revenue- from iFEMA7 due, to costs incurred during the hurricnes exerienc dbh' State~of Florida' in September 2004~'.The'corresponding increases in appropriations are primarily due to a $1,430,598 increase in public safety and a $2,365,661 increase in otelepqi~~jand as$,374,554 decrease in nondepartrnentl. appropriations.

beex'6rde'frrnavailable Fund Balance. During the year, 31,8'2to hoevrexenitre Wre9.5%' less';thiari budgeted; resulting .in;, a,decreased Pneed for, Fund Th yar~ci~il perations resulted in a $494;529 reduction to existing fund balance.,,,,

Balnce L-The budgetary. vaniance betw'een'th'-e o~riginal and final revenue an~d otherfina,~cing source-s -budget was $3,236,058, or 8.6%. Thieimajority of this anmount was the increase in other' intergoVemmiental revenues as mentioned above.

e~The budgetary variance nat`he~betweern the original and final exp~enditu~e' and financing u'ses buddet was 3,505,899, or 7.1%. This was contributable to increa~ses in'public sa'fetyand other expendiftures.

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• CITY OF OCALA, FLORIDA MANAGEMENT'S DISCUSSION AND ANALYSIS'(CONTINUED)

I SEPTEMBER 30,2004 Capital Asset and Debt Administration.- u *. -

Capital Assets "The Citys investment in capital assets for its governmental and, business-type activities as of September 30, 2004 amounts to $424,098,764 '(net of accumulated depreciation). This investment in. capital assets;. include's land,buildings, improvements - other thar-buildings leasehold improvements, equipment, infrastructure, 'and 'construction- ina progress. 'The total increase in the City's investment in capital assets was less than historical for.the current year.

The net decrease in'governmental c'apital assets was offset byihe'i'iircease in business-type capital assets. . -a -*

72% of the increase in capital assets attributable to business-type activities occurred in the Waterand Sewer.Fund. Additional projects were done in connecti6n with Water Reclamation

.,Facility #3, and replacement of the SW I79. Street Lift Station 'forcemain Additiohally, several

- improvements and upgrades were made to the overall system.- i To a lsser extent, the increase ato business-type activities occurred in the Electric System Reven6ue Fund 'with theadditional costs this year of the Ocala Palms transmission line.

CITY OF OCALA, FLORIA  :;

^- :CAPITAL ASS-US

- -- ; - - ~Governmental - Bursiness-Type,!-; ---, , ;'SE, '

Activities Activities Total 2003 2004 2003 2004 2003 2004 Land $ 9,721,176 $ 10,046,901 $ 17,814,669 $ 17,904,966 $ 27,535,845 $ 27,951,867 Buildings 30,017,642 31,079,011 11,062,845 . 15,390,098 41,080,487 46,469,109 kIrproven-ents Other Than Buildings - - 281,528,478 320,817,011 281,528,478 320,817,011 Cystal Rver Lhit #3 - - 16,168,423 16,168,423 16,168,423 16,168,423 Etiuipment 33,205,922 35,036,338 10,799,653 10,089,850 44,005,575 45,126,188 infrastructure 250,762,743 250,762,743 - - 250,762,743 250,762,743 Oxistruction inPogress 9,145,206 9,718,873 38,757,107 11,930,600 47,902,313 21,649,473 332,852,689 336,643,866 376,131,175 392,300,948 708,983,864 728,944,814 Less: Accurrulated Depreciation (163,576,900) (171,298,88) (123,794,169) .(133,547,170) (287,371,069) (304,846,050)

Wtap Assets, lit $ 169,275,789 $ 165,344,986 $252,337,006 $258,753,778 $ 421,612,795 $424,098,764 Additional information on the City's capital assets can be found in Note 4 on pages 44 and 45 of this report.

Long-term debt At the end of fiscal year 2004, the City had total long-term debt outstanding of $155,251,626. Of this amount, $142,035,000 represents bonds secured solely by specified revenue sources (i.e.,

revenue bonds). $49,740,000 of the revenue bonds are applicable to govermmental activities, and

$92,295,000 are for the business-type activities. Other items included in long-term debt include self-insurance claims payable and compensated absences.

The City's bonded debt had a net decrease of $7,000,000 or 5.0% during fiscal year 2004.

Additional information on the City's debt can be found in Note 6 on pages 51 to 54 of this report.

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9-CITY OF OCALA, FLORIDA MANAGEMENT'S DISCUSSIONiANDIANALYSIS (CONTINUED)

I SEPTEMBER 30, 2004 U Economic Factors and Next Year's Budgets-and Rates

• The unemployment rate for the City at September 30, 2004 was 4.4 percent. This represents a .2 percent decrease from'the prior year.

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• The taxable value of commercial and residential property increased 7.26 percent in the 2004 lj fiscal year, increasing from $2,351,269,279 to $2,521,911,481.-..

. Building permit activity increased 7.3 percent during the 2004 fiscal year.

• Population increased only .5 percent from the prior fiscal year to 47,271 at September 30, 2004.

I During the current fiscal year,. unreserved fund balance'in the- General Fund decreased to

$10,735,291, of which $4,551,291 is designated for special projects. Of the- remaining X

$6,184,000 unreserved and undesignated fund balance, the City has! appropriated $1,920,514 of this amount for spending in the adopted budget for fiscal year 2005. The ad valorem tax rate for the General Fund has' been increased to 5.926 mnills for the 2005 fiscal year budget. -

Requests for Information This financial report is designed to present users with a general overview of the City's finances and to demonstrate the City's accountability.. If you, have questions concerning any of the information provided in this report or need additional financial information, please contact the City's Finance and Administrative Services Department at 151 SE Osceola Avenue, Ocala, Florida 34471, or call (352) 629-8373.

12i ii a

12

CITY OF OCALA, FLORIDA STATEMENT OF NET ASSETS SEPTEMBER 30, 2004

1. ;I. 1 -

!t:. .- .i.

Business

,,Governmental .Type Assets - Activities - - ActIvities Total Cash and Investments $ 25,652,954 $ 17,961,697 S 43,614,651 Equity In Pooled Cash Fund 38,459,397 74,899,272 113,358,669 Receivables (net) 721,995 20,412,023 21,134,018' Internal Balances  : 64,317 (64,317)

Due From Other Governments 4,007,705 3,589,912 7,597,617 .- ;

Inventories 2,622,790 2,622,790 Other Assets 991,659 931,276 1,922,935 Capital Assets, net of accumulated depreciation:

L.and 10,046,901 17,904,966 27,95i,867 Buildings 20,862,368 11,229,225 32,091,593 Improvements Other than Buildings .I 213,594,246 213,594,246

,Machinery and Equipment  ; 14,162,7768 -T S 4,094,741 - 18,257,517 Infrastructure --111,596,486 111,596,486 Construction in Progress 8,676,455 11,930,600 20,607,055 Total Assets 235,243,013 379,106,431 614,349,444 7-Liabillties Accounts Payable 6,268,611 - 12,358,355 18,626,966 Accrued Uabilifies

• 937,176 2,199,544 3,136,720 '--

Deferred Revenue 2,098,236 209,331 2,307,567-Other Uabilities 3,396,750 3,396,750 Long Term LUabilities:

Due Within One Year 3,453,510 5,730,336 9,183,846 Due In More Than One Year 54,580,349 91,487,431 146,067,780 Total Llabillites 67,337,882  ; 115,381,747 182,719,629 Net Assets Invested In Capital Assets, Net Of Related Debt 115,459,984 183,076,288 298,536,270 Restricted For.

Transportation 8,282,400 8,282,400 District Improvements 541,222 541,222 Capital Projects 21,585,780; '20,408,335 41,994,115 Debt Service 2,804,999 -.25,045,000 7,849,999 Unrestricted 19,230,746 55,19S,063 74,425,809 Total Net Assets $ 167,905,131- $-;- 263,724,684 $ 431,629,815 The notes to the financial statements are an integral part of the financial statements.

13

CITY OF OCALA, FLORIDA .I STATEMENT OF ACTIVITIES FOR THE YEAR ENDED SEPTEMBER 30,2004 Proaram Revenues I Operating Capital AI Charges For Grants and Grants and Contributions Functions/Programs 'Expenses ' Services Contributions Ji Governmental Activities:

General Government $ 6,970,877. $ 3,580,601 $ 468,005 $p -j Public Safety 28,723,206 621,434 1,230,081 '

Public Works 15,846,226 2,359,217 4,694,973 29,045 Culture and Recreation 4,667,252 634,608 182,608 Housing Rehabilitation 304,668 - 304,668 ji Non-departmental 401,875 Other Interest On Long Term Debt 2,634,403 1,941,182 152,770 2,091,876 LE Total Governmental Activities 61,489,689 7,348,630 8,972,211 ' ' - 29,045 Business Type Activities: U Electiic 112,445,791 119,620,424 1,745,648 515,002 Water and Sewer 17,609,196 19,794,329 122,873 2,354,905 Sanitation Municipal Golf Courses

-- :: 9,080,734 2,665,999 8,822,329 2,330,548 898,876 14,986 LI Municipal Trailer Park 96,477 106,001 International Airport AdultAthlefic Complex Communications 1,491,874 171,140 854,242 675,459 103,295 1,445,890 580,959 ,261,691 U

Suntran ' ' ' '_1,639,368  ; ', 174,380 982,375 42,142 Total Business Type Activities $ 146,054,821 $ 153,072,655 $ 4,345,717 $ 3,173,740 UL General Revenues:

Taxes: L Property Taxes Utility Service Taxes Other Taxes Unreitricted Revenues L

Investment Income Miscellaneous Transfers Total General Revenues, Special Items and Transfers Change In Net Assets Net Assets-Beginning

• 1 Net Assets-Ending The notes to the financial statements are an integral part of the financial statements.

1i I

14 I

J

Net (Expense) Revenue and Change In Net Assets

.- -!Primary Government

-Governmental, .Business-type Activities . Activities Total

.1 . .  :

$ (2,922,271) $ - $ (2,922,271)'

(26,8711,691) - (26,871,691)

(8,762,991) - (8,762,991) .

(3,850,036) - (3,850,036) '

(401,875); (401,875)

(389,7s57)- (389,75n7)

(1,941,182) (1,941,182)

(45,139,803) (45,139,803) 9,435,283 9,435,283 4,662,911 4,662,911 640,471 640,471 (320,465) (320,465) 9,524 9,524 26,235 26,235 (67,845) (67,845) 591,648 591,648 (440,471), (440,471)

$ $ 14,537,291 $ 14,537,291-

$ 14,009,302 $. N.b..B.tI.

-... . .1..9,0 _

9,329,469 9,329,469 631,744 -  ; '631,744 4,392,031 - 44392,031 864,869 1,297,764 2,162,633 48,350 .48,350 i .>r¢ 11,766,087 (11,766,087) 41,041,852 (10,468,323) 30,573,529 (4,097,951) 4,068,968 (28,983) 172,003,082 -259,655,716 431,658,798

$ 167,905,131 $ 263,724,684 $ 431,629,815 15 e

CITY OF OCALA, FLORIDA BALANCE SHEET J

ALL GOVERNMENTAL FUNDS SEPTEMBER 30, 2004 U

.Other> -- ., Total U General Governmental Governmental -

Assets Fund . .Funds : Funds -

U Cash and Investments $ 95,868 $ 25,555,986 25,651,854 Equity In Pooled Cash Fund Receivables (net)

Due From Other Funds 14,285,396 439,446 1,225,499 11,621,564 108,573 111,676 25,906,960 548,019 1,337,175 -

U Due From Other Governments 1,157,286 3,981,52i Other Assets 2,824,235 13,198 1,800 14,998 L Total Assets $ 18,883,642 $ 38,556,885 $ 57,440,527 Liabilities and Fund Balances 11 Liabilities:

Accounts Payable Accrued Uabilities

$ 4,876,162 1,241,779:

$ 610,133 43,711.

$ 5,486,295 1,285,490 Lt Deferred Revenue 1,214,603 883,633 2,098,236 Advances To Other Funds Total Liabilities 815,807 8,148,351 440,367 1,977,844 1,256,174 10,126,195 I Fund Balances:

Reserved For Debt Service 3,742,175 3,742,175.

LI Transportation 8,282,400 8,282,400 District Improvements Capital Projects 541,222:

21,585,780 541,222 21,585,780 It Unreserved:

Designated For Specific Projects Unreserved and Undesignated 4,551,291 6,184,000 2,427,464 4,551,291 8,611,464 15 Total Fund Balances 10,735,291 . , .. 36,579,041 47,314,332 Total Liabilities and Fund Balances $ 18,883,642 - $ 38,556,885 $ 57,440,527 L' The notes to the financial statements are an integral part of the financial statements. I 1

If 16 Jr j

-CITY OF OCALA, FLORIDA-RECONCILIATION OF THE BALANCE SHEET OF GOVERNMENTAL FUNDS TO THE STATEMENT OF NET ASSETS AS OF SEPTEMBER 30, 2004 TL . nes o G Total Fund Balances of Govemnmental Funds $ 47,314,332 Amounts reported for governmental activities in the statement of

-assets are different because; Capital assets used in governmental activities are not financial resourcesand, therefore, are not reported in the funds. The cost of the'assets is$ 298,632,278, and the accumulated

_depreciation is $151,006,187 - 147,626,091 The internal service fund is used by management to charge the costs of fleetimanagement, risk management, information technology and other services to individual funds. The assets and liabilities of the internal service fund are included in govemmental activities in the statement of net assets. 24,665,090 Long term liabilities are not due and payable in the current period and accordingly are not reported as fund liabilities Interest on long Jterm debt is not accrued in governmental funds, but rather is

%recognizedas an expenditure when due. All liabilities-both current and long term are reported in the'Statement of Net Assets. Long term liabilities at year end consist of:

Revenue bonds and certificates (49,740,000),

Less: Deferred charge on'refunding (to be amortized as interest expense). 517,120 Deferred charge for issuance costs (to be amortized over life of debt) 691,926 Bond (premiubm) discount (to be amortized

-- M:over lifeof debt) (1,354,048)

-Accrued interest payable " (937,176)-

Compensated absences -' > (878,204)'

Total net assets of governmental activities $ 167,905,131 The notes to the financial statements are an integral part of the financial statemreints 17

,A'

CITY OF OCALA, FLORIDA U

STATEMENT OF REVENUES, EXPENDITURES AND CHANGES IN FUND BALANCES ALL GOVERNMENTAL FUNDS

-. SEPTEMBER 30, 2004-.

U General Other Governmental Total Governmental U

Revenues Fund Funds Funds Property Taxes $ 13,865,851 143,451 $ 14,009,302 Utility Service Taxes 9,329,46 D 9,329,469-Other Taxes 709,786 709,786 State Revenue Sharing Other Intergovernmental Revenues Parking Meters and Facilities 1,443,396-6,837,915 4,372,171 66,572 1,443,396 11,210,086 66,572 Ii Licenses and Permits 1,483,910. 1,483,910 Fines and Forfeitures 483,088. 6,055 ;489,143 Charges For Services 2,325,377. 2,327,1115 4,652,492 Investment Income 222,005 . 487,555 709,560 343,306 251,611i 594,917 Gifts Other 664,682 107,027 771,709 L Total Revenues Expenditures 37,708,785 7,761,557 45,470,342 fi Current General Government 6,254,224 503,040 6;757,264 Public Safety 27,269,177 27,269,177 Public Works Culture and Recreation 5,241,787 4,226,419 3,087,461 8,329,248 4,226,419 LE Housing Rehabilitiation 304,668 304,668 Nondepartmental Other Capital Outlay 197,618 2,519,372 1,586,311 52,108 2,698,894 197,618 2,571,480 4,285,205 I'

Debt Service:

Principal Payments Interest and Fees 9,515 2,145,000 1,699,046 2,145,000 1,708,561 b

Total Expenditures 47,609,091 10,185,549 57,794,640 Excess (Deficiency) Of Revenues Over Expenditures Other FInancing Sources (Uses)

(9,900,306) (2,423,992) (12,324,298) Ii Transfers In 11,613,155; - 4,794,252 16,407,407

- Transfers Out:

Total Other Financing Sources (Uses)

(2,207,378) .

9,405,777 (2,427,645)

, 2,366,607 (4,635,023) 11,772,384

.I-Net Change In Fund Balances (494,529),,. (57,385) (551,914)

Fund Balances-BegInning Fund Balances-Ending 11,229,820

$ 10,735,291

- 36,636,426

$ 36,579,041 47,866,246

$ 47,314,332 I The notes to the financial statements are an Integral part of the financial statements. 1i 1I Ii 18 I

If

CITY OF OCALA,'FLORIDA.'

RECONCILIATION OF THE STATEMENT OF REVENUES, EXPENDITURES AND CHANGES IN FUND BALANCES OF THE GOVERNMENTAL FUNDS TO THE STATEMENT OF ACTIVITIES FOR THE YEAR ENDED SEPTEMBER 30, 2004 Amounts reported for governmental activities in the statement of activities are different because:

Net change in fund balances - total governmental funds - - -$ -- (551,914)

Governmental funds report capital purchases as expenditure. However,]n the statement of activities, the cost of those assets Is depreciated over their estimated useful lives and reported as depreciation expense. :This reconciling item is the amount by which capital purchases of $4,285,205 exceeded depreciation expense and --

loss on asset disposal of $8,529,532 - --14,244,327)

The issuance of bonds and similar long term debt provides current financial resources to governmental funds and thus contribute to the change in fund balance. In the statement of net assets, however, issuing debt increases long term liabilities and does not affect the' statement of activities.' Similarly, repayment of principal is an expenditure -

in the governmental funds, but reduces the liability in the statement of net assets. Also governmental funds report the effect of issuance' costs, premium, discounts, and similar -2.1.5. 00.

items when debt is first issued, whereas these amounts are deferred and amortized in the statement of activities. The amounts of the items that make up these differences in:

treatment of long term debt and related items are:-: =-

Principal repayments:

Bonds and Certificates ,,r an .,

Amortization of bond discount, premium, issuance costs and ,_ ; -i,- - Z .I deferred amounts on refunding -- I i . I I --

(15,448)

Some expenses reported in the statement of activities such as compensated absences and accrued interest, do not require the use of current financial resources and are not reported as expenditures in governmental funds:.

Compensated absences (118,928)

Accrued interest on long term debt _-- 2 i (177,106)

The internal service fund Is used by management to charge the costs of activities that' benefit the entire government.The net income (expense) of the internal service fund is reported with governmental activities. em (1,135,228)

Change in net assets of go&Vernirintal activities ^;.'t.~" ~v $ (f4,097.951)

The notes to thefinincial statements are aniintegral part of the financial statehi6nts.

-~ . i- 'j  !._ _ . I I' t I- , .- ..

19

LI CITY OF OCALA, FLORIDA STATEMENT OF NET ASSETS.

PROPRIETARY FUNDS U

'SEPTEMBER 30, 2004 Electric BUSINESS-TYPE ACTMTIES -

Municipal Municipal U

Water Current Assets:

Assets System Revenue and Sewer Sanitation' Golf Course Trailer Park LI Cash and Investments Equity in pooled cash and investment fund I 26,616,299 3,300 250 12,819,868 1,125,092

$5 4,128$

100 133,858 LI Restricted assets available for current liabilitles Accrued Interest receivable Accounts and notes receivable 2.220,659 270,532 10,509,527 6,600,930 126,035 85,091 10.129; 600. 1 ,033 1,311 90 El Accrued unbilled revenues 9,086,560 Due from other funds Interfund loans receivable Inventories 7,905 2240,047 1,068,156 44,685 410,642

- - 75,416 -

ii Due from other governments - 11,745,648 122,873 898,876W-4 - 14,986 -

Other current assets Total current assets

-1..85,682 52.886,159 -

4,160 20,872.048 2.445,339

.. 16,533 112.096-i 458 135.817 ii Noncurrent Assets:

Restricted Assets:

Cash and Investments: tl Crystal River Decomlssloning Trust 6,723,329 Construction accounts Debt service accounts 2,220,659 3,987.196 5,022,635 ii I

Equity In pooled cash and Investment fund:

Construction accounts 12,472,779 Debt service accounts Impact fee accounts 10,321,165  : _

!L; , Renewal and replacement 6,519,293 3,508,802 - - -

Accrued interest receivable:

Construction accounts Impact fee accounts 1,961 112,242 98,933 I'

Renewal and replacement I,61,961 33,349. J - _

• m Due from other governments

. . Other Less: Portion classified as current (2,220,659) 44,197 (6,600,930) _____ -; -

1I Total restricted assets 13,304,583 28,998,368 _

Issuance Costs on Long-Term Debt Interfund Loans Receivable, long-term-Capital Assets, Net: ,.

. 34256 3,945.100

,1 645,990 - - -

I Land Buildings

.Improvements otherthan buildings 5,227,791 4,423,711 69,249,581 7,129,886 1,754,249 126,m,053 810 1,808;,

t5 394,284 1.510,337 2,032,464 33,907 640 1,665.

I9 Machinery and equipment 2.163,971 845,506 220,068 38,175 604 Construction In process 2,887,697 8,035,257 Total capital assets (net) 83,952,751 144,541,951 222,684 3,975,260 36,816 Total Noncurrent Assets 101,236,690 I 174,186,309 ! - ; 222,684s '. 3,975,260' .- :36,816 -

Total Assets $ 154,122,849 $ 195,058,357 $ 2,668,023 $ 4,087,356 $ 172,833 The notes to the financial statements are an integral part of the financial statements.

it 20

.4

I - '.

it - :." .

ENTERPRISE FUNDS  : GOVERNMENTAL Oca.a Adult, ACTITIES International Athletic Communl- - Internal Airport Complex cations SunTran Total Service Funds

$ 100 $ - S - S - S 7,878 $ 1,100 268,986 -1113,130 42,077,233 12,552,437 I 334,088

! 8,855,677, 5214 10,371 423,592 119,312 180 865

• 10,597,386 54,664

- 9,088,560 -

• 1,478,798

-.7,905_

1,137 261,505 - 2,622,790 214,304 520,617 3,303,000 26,184

- 206,833 70,431 308,388 1,317 1.385,871 520,617 78,667,652 13,038,432 6,723,329

- - z- 3,987,196 7,243,294

-. - 12,7277 12,472,779

- - - -1 10,321,165 10,028,095

- - 112,242 _

_- - 96,933 -

- * - 95,310

-286,912 - - 286,912 -

4417i (34,088) - _____ ____ (8,855,6Th) -

252,824 - -

• 42,555,775

- - - - 680,246 _.

• - - _ -_ 3,945,100

'1 5.107,997 11,101 - J 17.904,966 667,770 3,350,403 167,045 22,030 t 11,229,225 - 6,860,501 10,146,085 -1.032,190 i4,353,400 i_t Y 213,594 246 -

e4445 - ,549 i63,007 717413*D 4 094741 10,190,624 616,635 - 391,011 - 11,930,600 -

19,265,570 1,211,885 4,807,418 739,443 258,753,778 17,718,895 19,518,394 1,211,885 4,807,418 739,443 ,, 305,934,899 - , 17,718,895 S 19,826.782 $ 1,213,202 $ 6,193,289 $ 1,260,060 $ 384,602,551 $ 30.757,327 (Continued) 21

LI CITY OF OCALA, FLORIDA STATEMENT OF NET ASSETS (Continued) U PROPRIETARY FUNDS SEPTEMBER 30, 2004 BUSINESS-TYPE ACTMITIES -

Electric Municipal Municipal Liabilities and Fund Equity Systemn Revenue Water and Sewer Sanitation Golf Course -

Trailei Prk - U Current Liabilities:

Payable from unrestricted assets:

Accounts payable $ 9,640,089 $ 302,940 $ . 525,810 $ 83,924 $ 2,047 Li Claims payable Compensated absences payable Accrued interest payable 354,425 1,250 136,089 145,439 34,591 1,149 L

Due to other funds 2,000,734 296,381 Customer deposits Deferred revenue Total current liabilities payable 3,396,750 31,986 Li from unrestricted assets 15,393,248 439,029 671,249 446,862 3,196 Payable from restricted assets:

EV Accounts payable 1,400,930 - _ _

Accrued Interest payable Deferred revenue Revenue bonds payable within 115,659 2,082,635 177,365 -

li 2105,000 2,940,000 _-

one year Total current liabilities payable from restricted assets 2,220,659 6,600,930

'IE Total current liabilities 17,613,907 7,039,959 671,249 446,862 3,196 Noncurrent Liabilities:

Interfund Loans Payable After One Year 101,871 898,876 436,316 l'

Decommissioning costs 6,723,329 Compensated absences payable Revenue Bonds and Notes Payable 265,941 89,494 123,558 23,755 2,390 jJ After One Year 4,233,019 80,018,624 Total noncurrent liabilities 11,222,289.:. 80,209,989 1,022434 460,071 - 2,390.

Total liabilities 28,836,196 87,249,948 1,693,683 906,933 5,586 I Net Assets:

Invested in capital assets, net of related debt 77,533,329 75,317,969 222684 3,975,260 36,816 11i Restricted for debt service 2,105,000 2,940,000 Restricted for capital projects 6,581,254 13,827,081 Unrestricted (accumulated deficit) 39,067,070 7 15,723,359 751,656 *(794,837) .130,231, I

Total net assets $ 125,286,653 $ 107,808,409 $ 974,340 $ 3,180,423 $ 167,047 The notes to the financial statements are an Integral part of the financial statements.

Ii I1 22

'I JI

ENTERPRISE FUNDS -- - GOVERNMENTAL Ocala Adult ACTIVITIES International Athletic Conimuni- Intemal Airport -- Complex cations SunTran Total .- Service Funds

$ 25,518 $ 4,597 $ 39,022 S 29913 90 $ .10,923,337 $ 782,316 4,993,302 5,662 1,884 6,097 - 685,336 - 170,699

- 1,250 304,189 214,6 69 - 2,815,973

- 3,396,750

- - 31,966 31,180 310,670 45,119 514,0 59 17,854,612 5,946,317 34,088 1,435,018 2,198,294 177,365 5,045,000 -

34,088 - - 8,855,677 65,268 310,670 45,119 514,059 26,710,289 5,948,317 1,243.084 - - - 2,680,147 16,684

- - 6,723,329 1,942 3,287 2092 - . - 512,459 129,236

- 84,251,643 _

1,245,026 3,287 Zs092 - 94,167,578 145,920 1,310,294 - 313,957 *- 47,211 514,059 120,877,867 6,092,237 1.11

.88 19,231,482 1,211,885 4,807,418 739,443 183,076,286 17,718,895

-5,045,000

~ -V ~ 9. *. t~

• 20,408,335 (714,994) (312640) 1,33;18,660 6,558 .55195,063 6,946,195

$ 18,516,488 . 899,245 rS 6,146,078 $ .746001 $ 263,724,684 $ 24,665,090

= _

23

Li CITY OF OCALA, FLORIDA STATEMENT OF REVENUES, EXPENSES AND CHANGES IN FUND NET ASSETS Li PROPRIETARY FUNDS FOR THE YEAR ENDED SEPTEMBER 30, 2004 BUSINESS-TYPE ACTIVTIES -

tl

- Electric Municipal Municipal. I.

System Water. - Golf Trailer Revenue and Sewer Sanitation Course Park .

Operating Revenues:

Charges for services $ 114,899,200 $ .18,708,787 $ .8,812,729 $ 1,909,864 $ 104,674 LI" Other 5,466,872 1,208,415 908,476 435,670 1,327 Total operating revenues 121,366,072 19,917,202 9,721,205 2,345,534 106,001 Operating Expenses:

Purchase of electricity 83,607,585 Distribution Operation and maintenance 11,784,907 2,955,892 1,531,461

. 7,533,349 2321,973 94,318 1I Water and sewer treatment 3,670,634 Sewer collection Internal service Administration 5,840,728 1,886,136 1,915,646 487,685 51,954 -

Li Depreciation and amortization Economic Improvement Incentives Other 4,654,491 322,404 2,927,837 4,859,564 12,094 68,985

- 990,715 230,379 27,754 2159 LI Total operating expenses 112093,844 13,975,535 9,080,734 2,632,060 96,477-Operating Income (Loss) 9,272,228 5,941,667 640,471 (286,526) 9,524 Li Non-Operating Revenues (Expenses):

• Investment Income Interest expense Other non-operating revenue 630,468 (351,947) 515,002 631,225 (3,633,661) 2,354,905 14,615 -

(33,939) 11,692 Ii Total non-operating revenues (expenses) . 793,523 (647,531) 14,615 (33,939) 1,692 U Income (Loss) Before Operating Transfers 10,065,751 5,294,136 655,086 (320,465) 11,216 Transfers:

From other funds - . 553 - 203 X 50,000 L,

To other funds (11,251,789) (732,853) (127,000)

Total operating transfers Change in net assets (11,251,236)

(1,185,485)

(732,853) 4,561,283 (126,797) 528,289 50,00 (270,465) 11,216 ii Net assets:

Beginning of year 126,472,138 103,2 47,126 446,051 3,450,888 155,831 Li 1.25 ,286,6 End of year .S 125 286,65S $ 107,8 108,409 $ I' 974,340 $ 3,180,423 $ 167,047 Ii IL The notes to the financial statements are an Integral part of the financial statements.

I.1 11 24 I

L L

L ENTERPRISE FUNDS - GOVERNMENTAL ACTIVITIES L Ocala International Adult.

Athletic-'- Cornmunl-Internal Service Airport Complex cations SunTran Total Funds L S 667,480 $ 102,710. $ 1,406,639 $ 1158,252 $ 146,770,335 $ 21,273.611 7,979 585 39,251- ___ 5-.. 9,068,575._ 701,956 L 675,459 103,295 1,445,890 158,252 155,838,910 21,975,567

- - - - 83,607,585 L _

683,351

• _13,316,368 91,810 632,920 1,335,232 15,648,845

- - - - 3,670,634 L -

38,520

-t 1,886,136 8,3i4,533

- ~

20,216,964 746,202 75,385 182,802 304,136 11,124,103 3,042,843 L -

-167

- -..rw -

- 322,404 4,058,567--- --

1,429,720 167,195 854,242 1,639,368 141,969,175 23,259,807 L (754,261) (63.900) 591,648 (1,481,116) 13,869,735 (1,284,240) 7.529 - 12,235 ' - 1,297,764 155,309 (62,154) (3,945) - (4,085646)  ;

842,650 - . - 1,040,645 4,753,202 _ _ --

L 788,025 33,764 (3,945)

(67,845)

-12,235 603,883 1.040,645 (440,471)

=1,965,320 15,835,055 155,309 (1128,931)

L 116,739 - 35,231 4142,829 0-345,555 -

- - -4 (6Z97)I i -  ;-

116,739 35,231 142,829 (11,766,087) (6,297) . *>-

L" 150,503 (67,845) 639,114 (297,642) 4,068,968 (1,135,228) -- ;

18,365,985-- 967,090 5,506,964 1,043,643 259,655,716 25,800,3188 L $ 18,516,488 *$ 899,245 $ 6,146,078 $ 746,001 i S 263,724,684 - $ 24,665,090

. - - -.. ~t. _ -< - - - .;-<

,e>=z;~~

Lil 25 '

fl CITY OF OCALA, FLORIDA STATEMENT OF CASH FLOWS PROPRIETARY FUNDS U

FOR THE YEAR ENDED SEPTEMBER 30,2004 BUSINESS-TYPE ACTMTIES -1 U

Electric Municipal Municipal System Revenue Water and Sewer Sanitation Golf Course Trailer Park U Cash Flows from Operating Activities:

Cash received from customers Cash paid to suppliers for goods and services S 114,890,088 (96,261,818)

$ 19,622,820 (5,470,735)

$ 8,777.962 (5,518,605)

$ 2,373,102

- (1,445,600)

$ 105,911 (49,296)

Li Cash paid to employees for services (9,461,275) (3,620,022) (3,319,023) (1,089,794) (45,697)

Net cash provided by (used In) operating activities Cash Flows from Non-Capital 9,166,995 10,532,063 (59,666): (162,292) 10,918 -

U Financing Activities:

Transfers in Transfers out Operating grants

.. 553 (11,251,789) (732,853) 203 (127,000) 50,000 JI Loans to other funds (2,168,696)

Proceeds of loans from other funds Principal received on loans to other funds Interest received on loans to 18,038 101,871 898,876 6,470 U

other funds - 100,847 Interest paid on loans from other funds (30,089) LI1 Net cash provided by (used In) -

non-capital financing activities (13,301,047)- (630,982) 772,079 26,381 Cash Flows from Capital and Related Financing Activities:

Principal paid on bonds and notes Interest paid on bonds and notes Proceeds from sale of capital assets (2,035,000)

(264,388)

(2,820,000)

(4,221,045) 136,708 LI iE Acquisition and construction of capital assets (5,196,826) (10,825,826) (10,114) (797)

Contributions received from other governments and developers Net cash provided by (used in) -

capital and related financing 515,002 2.354,905 -

iI activities (6,981,212) (15,511,966) . (10,114) - 135,911 Cash Flows from Investing Activities: I Purchase of investments (806,890) (5,362.520)

Proceeds from sales and maturities D

of Investments 6,671,160 Investment Income 624,834 687,824 -10,256 1,529 Net cash provided by investing activities (182,056) 1,996,464 10,256 - . 1,529 Net Increase (Decrease) in Cash and Cash Equivalents (11,297,320) (3,614,421) 712,555; . 12,447;. 11 Cash and Cash Equivalents,

- 46,656,871: j I

beginning of year 47,759,920 412,537-' 4.128 121,511 Cash and Cash Equivalents, end of year $ 35,359,551 $ 44,145.499 $ 1,125,092 $ 4,128 $ 133,958 The notes to the financial statements are an integral part of the financial statements.

I 26 I'

1

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• i 4

v -

ENTERPRISE FUNDS - - GOVERNMENTAL ACTMTIES Ocala ' -Adult Internal International Athletic Commun .i- Service Airport Complex cations SunTran 7; Total Funds

$ 675,459 $ 103,295 $ 1.445,3 31 S 157,594 $ 148,151,562 $ 21,428,344 (833.289) (38,481) (231.3 93) (1.484,254) (111,333.471) (14,517,010)

(277.314) C- (64,814) - (346.7'99) (53,588) (18,278,326) (4,723,357)  ;

(435.144) - 867,1 39 (1.380,248) 18,539,765 2,187,977-.

116,739 - 35,231 142,829 . .345,555

- (12,111.642) (6,297) 1,199,078,_ -1199,078 (2,168,696)

- 1.007,217 16,684' 18,038

. -100,847 (62,1543 - - -_ (92,243) 54,585 - .35,231 1,341,907 (11.701,846) 10,387 erI -4

..4T (4,855,000)

(4,485,433) 389,850 - - 526,558 495,887 (638,631) - (244,881) (16.917,075) (3,428,490)

- . i1 676,614 - - '19,216 3,565,737 (22.-

1 1. I 1, 427.833 - (244,881)  ! 19.216 (22.165.213) (2,932.603) i.

- = - - - (6,169,410)

- - -4.- 6,671.160 -

4,286 - 4,905 - 1,333,634 151,269

.4 r z s,4j J. 4 4,286 4,905 - 835384 151,269 51,560 662,394 (19.125) (13,491,910) (582,970) ..  ;

217,526 - 450.736 19,125 95,642,354 13,136,507

'444

$ 269,086 , $ - - S 1,113,130 S-. f S 82,150,4"44 $

S 12,553,537:

(Continued) 27

U CITY OF OCALA, FLORIDA STATEMENT OF CASH FLOWS (Continued)

PROPRIETARY FUNDS fl FOR THE YEAR ENDED SEPTEMBER 30, 2004 BUSINESS-TYPE ACTMTIES -

U Electric Systern Revenue Water and Sewer Sanitation Municipal Golf Course Municipal

. Trailer -

Park U

Reconciliation of Cash and Cash Equivalents to Balance Sheet U Total current cash and Invest- E ments per the balance sheet $ 28,840,258 $ 17,842,753 $ 1,125,092 4,128 $ 133,958 Total noncurrent cash and invest-ments per the balance sheet 13,242,622 30,289,942 - -  :- U Total cash and investments 42,082,880 48,132,695 1,125,092 4,128 133,958 Less: Investments not meeting the definition of cash equivalents Cash and Cash Equivalents, end of year $

(6,723,329) 35,359,551 $

(3,987,196) 44,145,499 $ 1,125,092

$ 4,128 S

133,958 L

Reconciliation of Operating Income (Loss) to Net Cash Provided by (Used in)

Operating Activities:

LI Operating income (loss)

Adjustments to reconcile operating income loss) to cash provided

$ 9,272,228 $ 5,941,667 $ 640,471 $ (286,526) $ 9,524 LI by operating activities:

Depreciation Amortization Loss(galn) on capital asset disposal 4,648,184

6,307 127,435 4,788,932 70,632 (8,965)

• 68,985 3,002 230,379 (123,852)

- 2,159 LI (Increase) decrease In assets:

Accounts and notes receivable (2,952,698) 16,543 (600) 2,105 (90)

Accrued unbilled revenue (1,802,978) Il Due from other funds (221,175) (43,767)

Inventories 156,965 (9,843)

Due from other governments (1,745,648) (122,873) (14986)

Other current assets Increase (decrease) In liabilities:

(20,246) 8,538 (898,876) (5,692) . (458)

LI Accounts payable 173,842 (2,464) 152,672 (4,932) (748)

Compensated absences payable 28,983 18,447 763 Due to other funds Customer deposits Deferred revenue 55,451 415,923 25,340 42,088 41,608 (1,159) 531 iII Decommissioning costs 806,890 Net Cash Provided by (Used In)

Operating Activities $ 9,166,995 $ 10,532,063 $ (59,66) $ (162,292) $ 10,918 Ii Noncash Capital and Related Financing Activities:

Plant and equipment contributed I'

from (to) other funds $ (23,010) $ 10,301 $ (3,002) $ (12,891) $ -

Noncash Investing Activities:

Change in fair value of investments $ 26,478 $ (3,505) $ - $ - $ -

Ii The notes to the financial statements are an Integral part of the financial statements.

ii 28 I.

I

g.

i, f ,

ENTERPRISE FUNDS GOVERNMENTAL ACTVTIES Ocala Adult .; Internal International Athletic Communi- Service Airport Complex - cations SunTran Total Funds

$ 269,086 $ 1,113,130 $ - $ 49,328,405 $ 12,553,537

_ _ 43,532,564 -:_! _

Li 269,086 .

r::_

_1 1,113,130 - 92,860,969 12,553,537 '

_- (10,710,525)

Li $ 269,086 $_ $ 1,113,130 $ - $ 82,150,444 $ 12,553,537 (1 , 2842  :

~- t. ..

! I $ (754,261) $ (63,900) $ 591,648 $ (1,481,116) $ 13,869,735 $ *I,,28'4,2406--

Li 746,202 75,385 182,802 304,136 11,047,164 76,939 3,042,843 Li (389,336) (22,438) 21,879 (414,154)

(2,912,861)

(423,764)

(11,005)

- - (1,802,978)

- - (264,942)  ;

- (760) 85,299 - 231,661 (3,525)

- - (1,883,507) (26,184) 225 1,739 - (914,770) (12,652)

Li (34,577 '612' 10,299 105,984 400,688 874,805 Li (3,397) 843 (12,180)

(4.089)

- (308,594)

(658) -

97,532 136,757 25,340

-;-40,271 35,199 (3,500)

_- 806,890 -

$ (435,144) $ _ $ 867,139 $ (1,380,248) $ 18,539,765 $ 2,187,977 I I L

$ (255) $ $ 22,439 $ - $ (8,713) $ -

L $ $ - $ - $ 22,973 $ -

29

U CITY OF OCALA, FLORIDA STATEMENT OF FIDUCIARY NET ASSETS U FIDUCIARY FUNDS SEPTEMBER 30, 2004 U

PENSION TRUST U

Assets FUNDS Cash and Cash Equivalents $ 3,302,471 U Receivables:

Interest and dividends receivable Accounts receivable 154,161 311,833 U

Due from other governments 43,764 Total receivables Investments, at fair value:

509,758 U

Mutual funds: equities - 6,871,768 Mutual funds: bonds Common stock 25,231,217 47,821,414 U

Government obligations 6,858,193 International stock Non-government obligations Total investments 10,644,352 5,673,100 103,100,044 U

Total Assets 106,912,273 U Liabilities Accounts Payable Total liabilities 2,348,298 2,348,298 U

Net Assets Reserved for Employees' Pension Benefits $ 104,563,975 U

U The notes to the financial statements are an integral part of the financial statements.

U U

. 0 A

Ii I]

30 L

CITY OF OCALA, FLORIDA STATEMENT OF CHANGES IN FIDUCIARY NET ASSETS FIDUCIARY FUNDS FOR THE YEAR ENDED SEPTEMBER 30, 2004 PENSION TRUST FUNDS Additions:

Contributions:

Employer $ 5,353,085 State 867,118 Employee 1,036,573 Total contributions 7,256,776 l_tF^+A+ ADA - AA.

InVeblIL IflCU.Ts Investment income (loss) 8,614,021 Dividend income 1,052,422 Total income on investments 9,666,443 Less: Investment management fees (618,287)

Net investment income (loss). - . 9,048,156 Total additions (reductions);' 16,304,932 Deductions:

Pension payments 6,970,711 Refunds to employees 45,020 Administration S. 164,400 Total deductions 7,180,131 Net Increase (Decrease) 9,124,801 Net Assets Reserved for Employees' Pension Benefits:

Beginning of year 95,439,174 End of year $ 104,563,975 The notes to the financial statements are an integral part of the financial statements.

31

U LI U

L ii L

'L L,

LI L

Li

.J

• L

CITY OF OCALA, FLORIDA NOTES TO FINANCIAL STATEMENTS SEPTEMBER 30,2004 Pages

1. Summary of Significant Accounting Policies 33-40

• Reporting Entity 33

• Government-wide and Fund Financial Statements 34

• Measurement Focus, Basis of Accounting and Financial Statement Presentation 34-36

• Annual Budgets 36

• Equity in Pooled Cash and Investments 37

• Cash Flows 37

• Investments 37

• Inventories 37

• Capital Assets 37-38

• Accrued Revenue 38

• Property Taxes 38

• Interfund Receivables and Payables 38

• Compensated Absences 38-39

• Self-insurance Claims 39

• Pension Costs 39

• Reserves of Fund Balances 39

• Grants and Contributions 39

• Bond Premiums, Discounts and Issuance Costs 39

• Deferred Loss on Defeasance of Debt 39

• Cost Allocations 39-40

• Encumbrances 40

2. Cash and Investments and Equity in Pooled Cash and Investment 40-41

• Cash 40

• Investments 40-41

3. Interfund Transactions 42-43

4. Capital Assets 44-45

5. Pension Plans 46-50

• Plan Descriptions and Provisions 46-47

• Investments 47

• Contributions Required and Contributions Made 47

• Three-Year Trend Information 48

• Statement of Plan Net Assets 49

• Statement of Changes in Plan Net Assets 50

6. Long-Term Liabilities 51-54

7. Prior Year Defeasance of Debt 54

8. Fund Deficits 54

- 9. Risk Management 55

10. Commitments and Contingent Liabilities 55-56

- 11. Hurricanes 56

12. Subsequent Events 56 32

CITY OF OCALA, FLORIDA NOTES TO FINANCIAL STATEMENTS - CONTINUED SEPTEMBER 30,2004 [

NOTE I -

SUMMARY

OF SIGNIFICANT ACCOUNTING POLICIES U The financial statements of the City Of Ocala (the 'City) have been prepared in conformity with generally accepted accounting principles (GAAP) as applied to government units. The Governmental Accounting Standards I

Board (GASB) is the accepted standard-setting body for establishing governmental accounting and financial reporting principles. Significant City accounting policies are described below. U Reporting Entitv U The City of Ocala, Florida (the "City') operates under a council-manager form of government, including a six-member City Council comprised of a Mayor (elected at large) and five district Councilmen and provides the 11 following services as authorized by its charter: public safety, public works, public utilities, culture, recreation and community development. The City of Ocala, Florida was created pursuant to the Laws of Florida, Chapter 67-1782.

In evaluating the City as a reporting entity, management has addressed all potential component units (traditionally separate reporting entities) for which the City may or may not be financially accountable and, as such, be I1 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 its will on the organization or (2) there is a potential for the organization to provide specific financial benefit to or impose specific financial burden on the City. Additionally, the primary government is required to consider other organizations for which the nature and significance of their relationship with the primary government are such that exclusion would cause the reporting entity's financial statements to be misleading or incomplete. Management determined that l the Community Redevelopment Agency is the only organization that should be included in the City's financial statements as a component unit.

Blended Component Unit: l Community Redevelopment Aaencv (CRA) - The Community Redevelopment Agency was created pursuant to Chapter 163.356, Florida Statutes, City Ordinance 2009 and City Resolutions 88-37, 88-52 and 89-44. The City Council serves as the CRA Board. Although legally separate, the CRA is appropriately blended as a governmental fund type component unit into the primary government.

Separate financial statements for the CRA are not presently developed.

The City includes advisory boards and commissions within the City in its financial statements in circumstances where the City selects the governing authority, designates management, has the ability to influence operations, and has accountability for fiscal matters of the advisory boards and commissions. L Related Organization:

The City is responsible for appointing the Ocala Housing Authority's board. However, the City's accountability for this organization does not extend beyond making these appointments.

L 1

33 U

CITY OF OCALA, FLORIDA NOTES TO FINANCIAL STATEMENTS - CONTINUED SEPTEMBER 30,2004 NOTE 1 -

SUMMARY

OF SIGNIFICANT ACCOUNTING POLICIES (CONTINUED)

Government-wide and Fund Financial Statements The government-wide financial statements (i.e., the Statement of Net Assets and the Statement of Activities) report information on all of the nonfiduciary activities of the primary government and its component units. For the most part, the effect of interfund activity has been removed from these statements. Interfund services provided and used are not eliminated in the process of consolidation. 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. The Statement of Activities demonstrates the degree to which the direct expenses of a given function or segment are offset by program revenues. Direct expenses are those that are clearly identifiable with a specific function or segment. Program revenues include 1) charges to customers or applicants who purchase, use, or directly benefit from goods, services, or privileges provided by a given function orsegment and 2) grants and contributions that are restricted to meeting the operational or capital requirements of a particular function or segment. Taxes and other items not properly included among program revenues are reported instead as general revenues.

Separate financial statements are provided for governmental funds, proprietary funds, and fiduciary funds.

Fiduciary funds are excluded from the government-wide financial statements. Major individual governmental and enterprise funds are reported as separate columns in the fund financial statements.

Measurement Focus, Basis of Accounting, and Financial Statement Presentation Govemment-wide Financial Statements The government-wide financial statements are reported using the economic resources measurement focus and the accrual basis of accounting, as are the proprietary 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 revenue as soon as all eligibility requirements imposed by the provider have been met. 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 or applicants for goods, services, or privileges provided, 2) operating grants and contributions, and 3) capital grants and contributions. Internally dedicated resources are reported as general revenues rather than as program revenues. Likewise, general revenues include all taxes.

Fund Financial Statements Governmental fund financial statements are reported using the current financial resources measurement focus and the modified accrual basis of accounting. Revenues are recognized as soon as they are both measurable and available. Revenues are considered to be available when they are collectible within the current period or soon enough thereafter to pay liabilities of the current period. For this purpose, the government considers revenues to be available if they generally are collected within 90 days of the end of the current fiscal period, except for FEMA disaster relief for hurricane damage which has a one year window. Expenditures generally are recorded when a liability is incurred, as under accrual accounting. However, debt service expenditures, as well as expenditures related to compensated absences and claims and judgments, are recorded only when payment is due.

Property taxes, franchise fees, licenses, and interest associated with the current fiscal period are all considered to be susceptible to accrual and so have been recognized as revenues of the current fiscal period. Only the portion of special assessments receivable due within the current fiscal period is considered to be susceptible to accrual 34

CITY OF OCALA, FLORIDA U

NOTES TO FINANCIAL STATEMENTS - CONTINUED SEPTEMBER 30, 2004 1J NOTE 1 -

SUMMARY

OF SIGNIFICANT ACCOUNTING POLICIES (CONTINUED) l as revenue of the current period. All other revenue items are considered to be measurable and available only when cash is received by the government.

L The City reports the following major governmental fund: L

• The General Fund is the government's primary operating fund. It accounts for all financial resources of the general government, except those required to be accounted for in another fund.

The City reports the following major proprietary funds:

• The Electric System Revenue Fund accounts for the construction, operation and maintenance of the City- l owned portion of CR-3 and the City-owned electric system as well as sales of electricity and other services to the general public. Electricity rates charged to customers are set by the City Council within the rate structure established by the Florida Public Service Commission.

• The Water and Sewer System accounts for the fiscal activity of providing water and wastewater services to residential and commercial customers.

• The Sanitation Fund accounts for the operations and maintenance of the City's refuse collection system.

• The Municipal Golf Course Fund accounts for the construction, operations and maintenance of the City's two golf courses.

• The Municipal Trailer Park Fund accounts for the operations and maintenance of the City-owner trailer park.

• The Ocala Intemational Airport Fund accounts for the construction, operations and maintenance of the City's airport and the Foreign Trade Zone #217. t

• The Adult Athletic Complex Fund accounts for the construction, operations and maintenance of the Ocala Regional Sportsplex.

• The Communication Fund accounts for the construction, operations and maintenance of the City's broadband l communications (fiber optics) network.

• The SunTran Fund accounts for the operations and maintenance of the regional mass transit system that l began operations during 1999.

Additionally, the City reports the following fund types: L

• Special Revenue Funds account for the proceeds of specific revenue sources that are legally restricted to expenditure for specified purposes. L

• Debt Service Funds account for the accumulation of resources for, and the payment of, general long-term debt principal and interest. l 35 t

CITY OF OCALA, FLORIDA NOTES TO FINANCIAL STATEMENTS - CONTINUED SEPTEMBER 30, 2004 NOTE I -

SUMMARY

OF SIGNIFICANT ACCOUNTING POLICIES (CONTINUED)

• Capital Projects Funds account for financial resources to be used for the acquisition or construction of major capital facilities (other than those financed by proprietary funds).

• Internal Service Funds account for the activities of the City's risk management, fleet management and internal service funds. The City's risk management program includes amounts collected and the claims paid for the County's workers' compensation, property, general liability, and prescription medicine self-insurance. The Fleet management fund is charged with acquiring and maintaining of approximately 930 units of gas-driven vehicles and equipment. The Internal Services fund operates the City's MIS system, facilities maintenance, purchasing and warehousing functions.

• Pension Trust Funds account for the activities of the City's General Employees', Firefighters' and Police Officers' Retirement System, which accumulate resources for pension benefit payments to qualified retiring

- employees. They are excluded from the govemment-wide financial statements because they are fiduciary in nature and do not represent resources available to the government for operations.

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 GASB. Based on the accounting and reporting standards set forth in GASB Statement No. 20, Accounting and Financial Reporting for Proprietary Funds and Other Governmental Entities That Use Proprietary FundAccounting, the City has opted to apply only the accounting and reporting pronouncements issued by the Financial Accounting Standards Board (FASB) on or before November 30, 1989 for business-type activities and enterprise funds.

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 City's enterprise funds

- and of the County's internal service fund are charges to customers for sales and services. Operating expenses for enterprise funds and internal service fund include the cost of sales and services, administrative expenses, and depreciation on capital assets. All revenues and expenses not meeting this definition are reported as nonoperating revenues and expenses.

When both restricted and unrestricted resources are available for use, it is the City's policy to use unrestricted resources first, and then restricted resources, as they are needed for their intended purposes.

Annual Budoets An annual budget is prepared for all governmental and proprietary funds. The budget amounts presented in the accompanying financial statements for the governmental funds are as originally adopted, or as legally amended, by the City Council during the year ended September 30, 2004.

The City Manager is authorized to transfer budgeted amounts between departments within any fund; however, any budget amendments that alter the total expenditures of any fund must be approved by the City Council.

During 2004, the City Council approved various supplemental budget appropriations to provide for unanticipated requirements of the period. Budget appropriations may not be legally exceeded on a fund basis. Appropriations lapse at the end of each fiscal year. The budgets for the governmental funds are adopted on a basis consistent with generally accepted accounting principles (GAAP). The budgetary comparisons reflect only those activities for which legally adopted budgets are prepared. For the year ended September 30, 2004, no expenditures exceeded the budget at the fund level.

36

CITY OF OCALA, FLORIDA NOTES TO FINANCIAL STATEMENTS - CONTINUED SEPTEMBER 30, 2004 NOTE I -

SUMMARY

OF SIGNIFICANT ACCOUNTING POLICIES (CONTINUED)

EquitW in Pooled Cash and Investments L The City maintains a pooled cash and investment fund which allows the various funds of the City to pool monies for investment purposes. The City maintains records to identify the equity of each fund investing in the pool as well as amounts borrowed from the pool. Investment earnings of the pool are recorded as earned and are L allocated to the participating funds based on the respective fund's equity in the pool at the end of each month.

Cash Flows L For purposes of the statement of cash flows, cash and cash equivalents include cash on hand (including equity pooled cash), demand deposit accounts and highly liquid investments (including restricted assets) with a maturity of three months or less when purchased. L Investments All investments are stated at fair value based on quoted market prices at the end of the fiscal year. Income from other investments owned by the individual funds is recorded in the respective funds as earned. I Inventories Inventories held by the proprietary funds consist of golf retail merchandise, equipment and supplies held for maintenance use or for capital improvements and are stated at the lower of average cost or market. Obsolete L

and unusable items have been reduced to estimated salvage values.

Capital Assets t Capital assets, which include property, plant, equipment, and infrastructure assets (e.g., roads, bridges, sidewalks, and similar items), are reported in the applicable governmental or business-type activities columns in the government-wide financial statements. Property, plant, and equipment with initial, individual costs that equal l or exceed $750 and estimated useful lives of over one year are recorded as capital assets. Roads, bridges, and sidewalks are capitalized when their initial costs equal or exceed $25,000 and possess estimated useful lives of more than one year. Capital assets are recorded at historical cost or estimated historical cost if purchased or constructed. Donated capital assets are recorded at estimated fair market value at the date of donation.

Major outlays for capital assets and improvements are capitalized as projects are constructed. Interest incurred during the construction phase of capital assets of business-type activities is included as part of the capitalized value of the assets constructed.

I Property, plant, and equipment are depreciated using the straight line method over the following estimated useful lives:

Buildings 30 Years Electric and Water/Sewer Plant 10-30 Years Machinery, Equipment and Vehicles 5 Years Infrastructure 15-50 Years L 37 L

CITY OF OCALA, FLORIDA NOTES TO FINANCIAL STATEMENTS - CONTINUED SEPTEMBER 30,2004 NOTE 1 -

SUMMARY

OF SIGNIFICANT ACCOUNTING POLICIES (CONTINUED)

Capitalization of Interest - In accordance with FASB Statement No. 62, the Water and Sewer System enterprise fund capitalizes net interest costs on funds borrowed to finance the construction of capital assets. For the year ended September 30, 2004, capitalization of net interest costs was as follows:

Water and Sewer System Interest expense $ 745,206 Amortization of bond issuance costs 6,134 Interest income (22,355)

Increase in construction in progress $ 728,985 Capital Leases and Installment Purchase Contracts - The acquisition or construction of general capital assets under a capital lease agreement or installment purchase contract is recognized as an expenditure and other financing source and principal and interest expenditures in the governmental funds.

Property and equipment and liabilities associated with capital leases and installment purchase contracts of proprietary funds are accounted for and reported in the financial statements of the respective proprietary fund.

Accrued Revenue Revenues of enterprise funds are accrued based on estimated unbilled services provided to customers at the end of the fiscal year.

Property Taxes Property taxes levied by the City are billed and collected by Marion County and normally attach as an enforceable lien on property as of January 1. Generally taxes are levied on November 1 and are payable on or before June 1.

Substantially all property tax billings are collected during the fiscal period billed.

The City is permitted under its charter to levy taxes up to $10 per $1,000 of assessed valuation for general government services other than the payment of principal and interest on general long-term debt and in unlimited amounts for the payment of principal and interest on long-term debt. Additional taxes assessed for the payment of general long-term debt issues of the City must be approved by the public. The tax rate assessed by the City for the year ended September 30, 2004 was $5.6760 per $1,000 of assessed property value.

Interfund Pavables and Receivables Interfund payables and receivables are non-interest bearing and generally are liquidated monthly (Note 3).

Interfund advances are liquidated in accordance with the City Council's resolution and may bear interest (Note 3).

Compensated Absences In governmental fund financial statements, the amount of compensated absences associated with employee vacations that are recorded as expenditures represent the amounts accrued during the year that would normally be liquidated with available spendable resources. The amount of compensated absences associated with employee sick leave is based on the historical annual trend of adjusted sick leave payments made at retirement.

Accordingly, only the amount of the compensated absence liability that would normally be liquidated with expendable available resources in the next fiscal year is reflected in the fund financial statements of governmental funds. In the government-wide financial statements, all governmental fund compensated absences are recorded and split between the current and noncurrent portions.

38

CITY OF OCALA, FLORIDA NOTES TO FINANCIAL STATEMENTS - CONTINUED SEPTEMBER 30, 2004 L NOTE I -

SUMMARY

OF SIGNIFICANT ACCOUNTING POLICIES (CONTINUED)

In proprietary funds, the amount of compensated absences associated with employee vacations that are recorded as expenses represent the amounts accrued during the year and the amount of compensated absences associated with employee sick leave is based on the historical annual trend of adjusted sick leave payments L made at retirement. The entire liability for compensated absences of these funds is reflected in the respective financial statements split between the current and noncurrent portions.

Self-insurance Claims Liabilities for reported claims and incurred but not reported claims are estimated based on an actuarial review of claims pending and historical experience. L Pension Costs Pension plan contributions include provision for normal cost plus an amount sufficient to amortize the past service liability over a thirty-year period.

Reserves of Fund Balances Fund balances of governmental funds are reserved for assets which have been legally segregated for specific future uses or which are not available for expenditure. Encumbrances lapse at year end.

Grants and Contributions I Program and capital grants received by governmental funds are recorded in the applicable governmental fund as receivables and revenues at the time reimbursable costs are incurred and all significant grant restrictions are satisfied. Grant revenues received In advance of meeting all majorgrant restrictions are deferred. L Capital grants received by proprietary funds are also recorded as revenues and receivables when reimbursable project costs are incurred or as deferred credits if the grant money is received in advance of project expenditures.

Contributed assets are recorded at fair market value at the time received.

Bond Premiums, Discounts and Issuance Costs Bond premiums, discounts and issuance costs are deferred and amortized over the term of the bonds using the effective interest method. I Bond discounts are presented as a reduction of the face amount of the related bonds payable and bond premiums are presented as an addition to the face amount of the related bonds payable. Issuance costs are recorded as other assets.

Deferred Loss on Defeasance of Debt The difference between the reacquisition price (new debt) and the net carrying value of the old debt in a debt refinancing is deferred and amortized as a component of interest expense over the shorter remaining life of the old or new debt. The deferred loss on defeasance of debt is presented as a reduction of the face amount of the new bonds payable. I Cost Allocations Certain expenses are incurred by the City's Electric System Revenue Fund on behalf of the Water and Sewer and Sanitation funds. The Electric System Revenue Fund charges for these services based on the receiving fund's original budgeted appropriations. The reimbursement for these services is recorded as an operating expense of the Water and Sewer and Sanitation funds and as an operating revenue of the Electric Revenue Fund.

The City's General Fund also incurs certain expenditures on behalf of other funds of the City. The General Fund is reimbursed for these expenditures based on actual cost allocations. The amounts reimbursed are recorded as 39 1

CITY OF OCALA, FLORIDA NOTES TO FINANCIAL STATEMENTS - CONTINUED SEPTEMBER 30, 2004 NOTE 1 -

SUMMARY

OF SIGNIFICANT ACCOUNTING POLICIES (CONTINUED) revenue of the General Fund. The related reimbursements are recorded as either an operating expense of the proprietary funds or as an expenditure of the governmental funds.

Encumbrances Encumbrance accounting, under which purchase orders, contracts and other commitments for the expenditure of monies are recorded in order to reserve a portion of the applicable budget appropriation, is utilized by the governmental funds of the City. Encumbrances lapse at year end.

NOTE 2 - CASH AND INVESTMENTS AND EQUITY IN POOLED CASH AND INVESTMENTS The City maintains a cash and investment pool that is available for use by all funds, except the pension trust funds and certain other funds required to have separate bank accounts. Each fund type's portion of this pool is displayed on the combined balance sheet as "Equity in pooled cash and investment fund". In addition, investments are held separately by several of the City's funds. The deposits and investments of the pension trust funds are held separately from those of other City funds.

Cash At September 30, 2004, the carrying amount of the City's deposits was $14,100,619. These deposits, consisting of interest bearing and non-interest bearing demand accounts and certificates of deposit, were entirely insured by federal depository insurance or by collateral held by the City's agent pursuant to the Public Depository Security Act of the State of Florida. This Act requires that the City maintain deposits only in "qualified public depositories".

All qualified public depositories must deposit with the State Treasurer eligible collateral in such amounts as required by the Act. In addition, qualified public depositories are required under the Act to assume mutual responsibility against loss caused by the default or insolvency of other qualified public depositories of the same type. Should a default or insolvency occur, the State Treasurer will implement procedures for payment of losses according to the validated claims of the City.

Funds not prohibited by bond covenants have pooled their cash balances in order to maximize investment earnings. The City's banking arrangement provides that the City will pay monthly direct service charges and will earn interest on collected balances at the effective federal funds rate less 50 basis points and adjusted for reserve requirement.

Investments Florida Statutes authorize the City to invest in the Local Government Surplus Funds Trust Fund, obligations of the U.S. Government, U.S. Government Instrumentalities, interest-bearing time deposits and savings accounts in banks and savings and loans provided such deposits are collateralized as described above, mutual funds investing in U.S. Government securities and repurchase agreements fully collateralized by U.S. Government obligations. In addition to the above, the City's investment policy also authorizes the City to invest in corporate bonds, bankers acceptances, prime commercial paper, repurchase agreements, collateralized mortgage obligations, yankee securities and eurodollar securities. Assets of the Ocala Firefighters' Retirement Plan and the Ocala Police Officers' Retirement System may also be invested, under state statute, in corporate bonds, corporate stocks, commercial paper and life insurance contracts.

Cash Management Funds are mutual funds administered by the SunTrust Bank and by The Bank of New York.

Investments held in these funds consist of U.S. Government and other short-term obligations. Investment income is recognized as earned and is allocated to participants of the funds based on their equity participation.

40

CITY OF OCALA, FLORIDA U

NOTES TO FINANCIAL STATEMENTS - CONTINUED SEPTEMBER 30, 2004 U

NOTE 2 - CASH AND INVESTMENTS AND EQUITY IN POOLED CASH AND INVESTMENTS (CONTINUED)

LI The Local Government Surplus Funds Trust Fund is an investment pool administered by the Florida State Board of Administration. Investments held in the Fund consist of short-term federal agency obligations, treasury bills, repurchase agreements, and commercial paper. Investment income is recognized as earned and is allocated to participants of the fund based on their equity participation. In accordance with GASB Statement 31, the SBA has reported that the Local Government Investment Trust, which it operates, is a "2A-7 like" pool and, thus, these investments are valued using the pooled share price.

L Collateralized mortgage obligations (CMO's) are investments used by the City to maximize yields. The City's CMO's, consisting of planned amortization classes (PAC's) and adjustable rate mortgage pools (ARM's), are based on cash flows from principal and interest payments on underlying mortgages. The PAC's have fixed I interest rates; therefore, as interest rates rise, they will decline in value. The ARM's have an adjustable interest rate based on an underlying index; therefore, they will normally retain their value as interest rates change.

Although there is market risk in connection with fluctuating interest rates, the City feels that the risk for these L

types of CMO's is minimal.

The City's investments are categorized by type to give an indication of the level of credit risk assumed by the City at year end. Category I Includes investments that are insured or registered or for which the securities are held by the City or its agent in the City's name. Category 2 includes uninsured and unregistered investments, with securities held by the counterparty's trust department or agent in the City's name. Category 3 includes uninsured and unregistered investments for which the securities are held by the counterparty, or by its trust department or agent but not in the City's name. The pension trust funds hold approximately 35% of the investments in Category 1. The types of investments and their levels of risk exposure as of September 30, 2004 were typical of I

those items held during the fiscal year then ended.

Category 1 Category 2 Category 3 Fair Value L

U.S. Government securities $ 72,416,872 $ - $- $ 72,416,872 Non-government obligations Common stock 53,554,323 47,821,414 173,792,609 $ - $

53,554,323 47,821,414 173,792,609 I

Cash Management Funds Mutual funds: bonds Mutual funds: domestic equities 5,020,553 25,231,217 6,871,768 I

Mutual funds: foreign equities 10,644,352 Local Government Surplus Funds Trust Fund Total Investments 27,714,716 249,275,215 I Carrying amount of cash deposits 14,100,619 Total cash and investments $ 263,375,834 I Per Government-wide Statement of Net Assets:

Cash and investments Equity in pooled cash fund 43,614,651 113,358,668 I

Per Statement of Fiduciary Net Assets:

Cash and cash equivalents Investments, at fair value Total cash and investments per statements $

3,302,471 103,100,044 263,375,834 I

I I

41 I

CITY OF OCALA, FLORIDA NOTES TO FINANCIAL STATEMENTS - CONTINUED SEPTEMBER 30, 2004 NOTE 3 - INTERFUND TRANSACTIONS The composition of interfund balances as of September 30, 2004 is as follows:

Interfund Interfund Interfund Interfund Total Receivables/ Advances Advances Advances Interfund Payables Current Long-Term Total Balances Due to General Fund from:

Electric System Revenue Fund $ 410,260 $ $ - $ 410,260 Municipal Golf Course Fund 296,381 - 296,381 Adult Athletic Complex Fund 304,189 - 304189 SunTran Fund 214,669 _ - 214669 Total due to General Fund from other funds $ 1,225,499 $= -

=

$ - $ $ 1,225,499

- Due to nonmajor governmental funds from:

Electric System Revenue Fund $ 111,676 $ - $ - $ - $ 111,676 Due to Electric System Revenue Fund from:

General Fund $ $ 7,905 $ 807,902 $ 815,807 $ 815,807 Water and Sewer Fund - 101,871 101,871 101,871 Sanitation Fund - 898,876 898,876 898,876 Municipal Golf Course Fund - 436,316 436,316 436,316 Ocala Intemational Airport Fund - 1,243,084 1,243,084 1,243,084 Internal Service Fund - 9,728 9,728 9,728 Fleet Management Fund - 6,956 6,956 6,956 Nonmajor governmental funds - 440,367 440,367 440,367 Total due to Electric System Revenue Fund from other funds $ - $ 7,905 $3,945,100 $3,953,005 $3,953,005 Due to Water and Sewer Fund from:

Electric System Revenue Fund $ 1,068,156 $ - $ - $ - $_1,068,156 Due to Sanitation Fund from:

Electric System Revenue Fund $ 410,642 $ - $ - $ - $ 410,642 Totals at the fund level $ 2,815,973 $ 7,905 $3,945,100 $3,953,005 $6,768,978 Interfund receivables and payables are the result of normal recurring interfund transactions. Interfund advances, which are approved by City Council and usually bear interest, are for the funding of various projects which are too small for bond issuance and for the City's grant matches on some grants. At September 30, 2004, the interfund advances also Include the funding in the applicable funds of the estimated amounts due from FEMA for hurricane disaster relief which will be liquidated when the reimbursements are received, in accordance with City Council's direction.

42

CITY OF OCALA, FLORIDA I

NOTES TO FINANCIAL STATEMENTS - CONTINUED SEPTEMBER 30, 2004 L"

NOTE 3 - INTERFUND TRANSACTIONS (CONTINUED)

I Interfund transfers for the year ended September 30, 2004, consisted of the following:

Transfers to General Fund from:

L Nonmajor governmental funds $ 222,832 Electric System Revenue Fund Water and Sewer Fund Total transfers to General Fund 10,890,323 500,000

$11,613,155 I

Transfers to nonmajor governmental funds from:

General Fund $ 2,120,307 I

Nonmajor governmental funds Electric System Revenue Fund Water and Sewer Fund 2,061,985 305,310 173,353 I

Sanitation Fund 127,000 Internal Service Fund 6,297 Total transfers to nonmajor governmental funds $ 4,794,252 Transfers to SunTran Fund from:

Nonmajor governmental funds $ 142,829 I

Total transfers to SunTran Fund $ 142,829 Transfers to Ocala International Airport Fund from: L General Fund $ 86,314 Electric System Revenue Fund Water and Sewer Fund Total transfers to Ocala International Airport Fund $

20,925 9,500 116,739 I

Transfers to Communications Fund from:

Electric System Revenue Fund $ 35,231 I

Total transfers to Communications Fund $ 35,231 Transfers to Municipal Golf Course Fund from:

I Water and Sewer Fund $ 50,000 Total transfers to Municipal Golf Course Fund $ 50,000 I All other transfers $ 756 Total transfers at the fund level $16,752,962 I

Interfund transfers are normally recurring and are approved by City Council during the budget process or by separate resolutions. The transfers from the Electric System Revenue Fund and the Water and Sewer Fund to the l1 General Fund are in support of general government operations. Other transfers are for debt service requirements and for City grant matches.

I 1,

43 I

CITY OF OCALA, FLORIDA NOTES TO FINANCIAL STATEMENTS - CONTINUED SEPTEMBER 30, 2004 NOTE 4 - CAPITAL ASSETS Capital asset activity for the year ended September 30, 2004 was as follows:

Beginning Ending Balance Increases Decreases Balance Governmental Activities:

Capital assets not being depreciated; Land and Improvements $ 9,721,176 $ 356,225 $ (30,500) $ 10,046,901 Construction In Progress 9,145,206 2,576,176 (2,002,509) 9,718,873 Total capital assets not being depreciated 18,866 382 2,932,401 (2,033,009) 19,765,774 Capital assets being depreciated:

Buildings and Improvements 30,017,642 1,126,420 (65,051) 31,079,011 Equipment 33,205,923 8,263,083 (6,432,668) 35,036,338 Infrastructure (Roads and Streets) 250,762,743 250,762,743 Total capital assets being depreciated 313,986,308 9,389,503 (6,497,7197 316,878,092 Less Accumulated Depreciation:

Buildings and Improvements (9,422,497) (846,186) 52,041 (10,216,642)

Equipment (20,248,293) (3,407,472) 2,782,202 (20,873,563)

Infrastructure (Roads and Streets) (133,906,110) (6,302,565) (140,208,675)

Total Acumulated Depreciation (163,576,900) (10,556,223) 2,834,243 (171,298,880)

Total capital assets being depreciated-net 15040940 (1,166,720) (3,663,476) 145,579,212 Governmental activities capital assets-net $ 169,275,790 $ 1,765,681 $ (5,696,485) $ 165,344,986 Business Type Activities:

Capital assets not being depreciated:

Land and Improvements $ 17,814,669 $ 90,692 $ (395) $ 17,904,966 Construction In Progress 38,757,107 16,681,499 (43,508,006) 11,930,600 Total capital assets not being depreciated M,571,776- 16,772,191 (43,508,401)_ 29,835,566 Capital assets being depreciated:

Buildings and Improvements 11,062,845 4,327,253 - 15,390,098 Improvements and Extensions 281,528,478 39,694,078 (405,545) 320,817,011 Equipment 10,799,653 559,424 (1,269,227) 10,089,650 Crystal River Unit No.3 16,168,423 - 16,168,423 Total capital assets being depreciated 319,559,3a99 44,580.755 (1,674,772) 362,465,382 Less Accumulated Depreciation:

Buildings (3,741,397) (419,476) - (4,160,873)

Improvements and Extensions (102,518,294) (9,162,201) 296,800 (111,353,695)

Equipment (5,787,043) (1,205,429) 997,363 (5,995,109)

Crystal River Unit No.3 (11,747,435) (260,058) - (12,007,493)

Total Acumulated Depreciation (123,794,169) (11,047,164) 1,294,163 (133,547,170)

Total capital assets being depreciated-net 195,765,230 33,5S33,591 (380,609) 228,918,212 Business-Type activities capital assets-net $ 252,337,006 $ 50,305,782 $ (43,889,010) $ 258,753,778 44

I CITY OF OCALA, FLORIDA NOTES TO FINANCIAL STATEMENTS - CONTINUED SEPTEMBER 30, 2004 I

NOTE 4 - CAPITAL ASSETS (CONTINUED)

I Depreciation expense was charged to functions /programs of the government as follows:

Governmental Activities:

General Government and Administration $ 91,780 l

Public Safety 823,922 Public Works 143,328 Infrastructure 6,302,565 I Culture and Recreation 125,074 Nondepartmental 47,955 Other 101,311 Capital assets held by the City's internal service funds I are charged to the various functions based on their usage of the assets 2,920,288 Total Depreciation Expense - Governmental ActMtles $ 10,556,223 I Business Type Activities:

Electric $ 4,648,184 Water and Sewer Sanitation 4,788,932 68,985 I

Golf Courses 230,379 Trailer Park 2,159 Airport Athletic Complex 746,202 75,385 I Communications 182,802 SunTran 304,136 Total Depreciation Expense - Business Type Activities $ 11,047,164 l I

I I

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45 I1 1i

CITY OF OCALA, FLORIDA NOTES TO FINANCIAL STATEMENTS - CONTINUED SEPTEMBER 30, 2004 NOTE 5 - PENSION PLANS The City maintains a single-employer, defined benefit pension plan which covers substantially all of the City's full-time employees excluding certified law enforcement officers and certified firefighters (General Employees' Retirement System), a single-employer defined benefit pension plan which covers all of its full-time certified law enforcement officers (Police Officers' Retirement System) and a single-employer defined benefit pension plan which covers all of its full-time certified firefighters (Firefighters' Retirement Plan). The provisions of each of the Plans are established by City Ordinance. All benefit provisions, including changes in contribution requirements, can be amended only by City Ordinance. Administrative costs are financed through investment earnings.

Benefits and Refunds are recognized when due and payable in accordance with the terms of the plan. During fiscal year 2000 the City's pension plans were restructured, which addressed the changes in the requirements of the Florida Statutes, Chapters 175 and 185.

Plan Descriptions and Provisions General Emplovees' Retirement System - The General Employees' Retirement System is a noncontributory defined benefit pension plan covering substantially all full-time employees of the City excluding certified law enforcement officers and certified firefighters.

Employees are eligible to retire at age sixty-five (65) with five (5) years of credited service or at any age with thirty (30) years of credited service; or may elect early retirement at age fifty-five (55) with five (5) years of credited service or at any age with twenty-five (25) years of credited service. Employees become vested after five (5) years of credited service.

Police Officers' Retirement System - The Police Officers' Retirement System is a contributory defined benefit pension plan covering any person employed full-time in the Ocala Police Department who is certified as a law enforcement officer in compliance with the provisions of Chapter 943.14 of the Florida Statutes. Florida Statutes Chapter 185 allows contributions to the Plan by the State of Florida.

A law enforcement officer is eligible to retire on the first day of any month coincident with, or next following the earlier of the attainment of age fifty-two (52) and the completion of ten (10) years of credited service or the completion of twenty-five (25) years of credited service or may elect to take early retirement on the first day of any month coincident with or next following the attainment of age fifty (50) and the completion of ten (10) years of credited service. Those electing early retirement have the option of receiving either a deferred or an immediate monthly retirement benefit. Law enforcement officers become vested in the plan after ten (10) years of credited service.

Pursuant to Florida Statutes Section 185.08, an excise tax amounting to 0.85% of the gross amount of receipts of premiums from policyholders on all premiums collected on casualty insurance policies covering property within the corporate limits of the City is collected by the Insurance Commissioner. Such amounts collected by the Insurance Commissioner, less expenses, are contributed annually to the Plan. For the 2004 fiscal year the amount of these contributions totaled $526,766, however, the amount available to the plan for the provision of benefits is frozen, in accordance with Chapter 185, Florida Statutes at $430,493. The City contributes 12.5% and the law enforcement officers contribute 8.5% of their salaries or wages to the Police Officers' Retirement System.

Firefighters' Retirement Plan - The Firefighters' Retirement Plan is a contributory defined benefit pension plan covering any person employed full-time in the Ocala Fire Department who is certified as a firefighter as a condition of employment in accordance with the provisions of Section 633.35 of the Florida Statutes. Florida Statutes Chapter 175 allows contributions to the Plan by the State of Florida.

Firefighters are eligible for normal service retirement on the first day of the month coincident with or next following the earlier of the sum of age and years of service equal to seventy (70), the attainment of age fifty-five (55) and the completion often (10) years of credited service, or the completion of twenty-five (25) years of credited service.

There shall be no mandatory retirement age. Early retirement is available to firefighter members on the first day of the month coincident with or next following the attainment of age fifty (50) and the completion of ten (10) years of 46

CITY OF OCALA, FLORIDA NOTES TO FINANCIAL STATEMENTS - CONTINUED SEPTEMBER 30, 2004 NOTE 5 - PENSION PLANS (CONTINUED) credited service. Those electing early retirement may receive either a deferred or an immediate monthly retirement benefit. Firefighters become vested in the Plan afterten (10) years of credited service.

Pursuant to Florida Statutes Section 175.101, an excise tax amounting to 1.85% of the gross amount of receipts of premiums from policyholders on all premiums collected on casualty insurance policies covering property within the corporate limits of the City is collected by the Insurance Commissioner. Such amounts collected by the Insurance Commissioner, less expenses, are contributed annually to the plan. For the 2004 fiscal year the I

amount of these contributions totaled $340,352, however, the amount available to the plan for the provision of benefits is frozen, in accordance with Chapter 175, Florida Statutes at $259,377. The City contributes 12.5% and the firefighters contribute 8.42% of their salaries or wages to the Firefighters' Retirement Plan.

I Participation - At September 30, 2004, participation in the plans consisted of the following:

General Police Fire Retirees and beneficiaries currently receiving benefits 317 39 44 l DROP retirees 9 8 5 Terminated employees entitled to benefits not yet receiving them 165 10 5I 491 57 54 Current employees: _

Vested 472 68 52 Nonvested 290 78 60 Total 762 146 112 Investments Investments of the three plans, consisting of domestic and international common stocks, government and non-government obligations and mutual funds, are stated at fair value based on quoted market prices at the end of the 4

fiscal year.

Contributions Required and Contribution Made The contribution requirement for the General Employees' Retirement System for the 2004 fiscal year, determined through an actuarial valuation performed as of October 1, 2002, was $3,402,463 (12.5% of current covered payroll). Actual employer contributions to the General Employees' Retirement System amounted to $3,522,203 (12.5% of current covered payroll). Excess contributions were added to the contribution surplus account and are available to assist in funding the City's contribution requirement s in future years.

The contribution requirement for the Police Officers' Retirement System for the 2004 fiscal year, determined through an actuarial valuation performed as of October 1, 2002, was $1,925,919 (26.0% of current covered A payroll). Actual employee contributions to the Police Officers' Retirement System totaled $591,880 (8.0% of current covered payroll), actual City contributions were $906,865 (12.5% of current covered payroll) and actual state contributions deposited directly to the plan amounted to $526,766 (7.25% of current covered payroll). A Excess contributions were added to the contribution surplus account and are available to assist in funding the City's contribution requirements in future years.

47

CITY OF OCALA, FLORIDA NOTES TO FINANCIAL STATEMENTS - CONTINUED SEPTEMBER 30, 2004 NOTE 5 - PENSION PLANS (CONTINUED)

The contribution requirement for the Firefighters' Retirement Plan for the 2004 fiscal year, determined through an actuarial valuation performed as of October 1, 2003, was $1,510,928 (33.25% of current covered payroll). Actual employee contributions totaled $444,693 (8.42% of current covered payroll), actual City contributions were

$653,813 (12.5% of current covered payroll) plus an additional $270,204 for a total of $924,017, and actual state contributions deposited directly to the plan amounted to $340,352 (7.49% of current covered payroll). No

- accumulated excess contributions were available in the contribution surplus account to assist In funding the City's contribution requirement for the year.

There is no net pension obligation or asset for each of these Plans.

Three-Year Trend Information Annual Percentage Net Pension Pension of APC Obligation Fiscal Year Ended Cost (APC) Contributed (Asset)

General Plan:

9/30/02 2,456,998 100.00% -

9/30/03 2,604,418 100.00% -

9/30/04 3,402,463 103.52% -

Police Officers' Plan:

9/30/02 683,102 100.00% -

9/30/03 576,290 100.00% -

9/30104 906,865 100.34% -

Firefighters' Plan:

9/30/02 590,123 100.00% -

9/30/03 1,009,732 100.00% -

9/30/04 924,017 100.00% -

48

CITY OF OCALA, FLORIDA I

NOTES TO FINANCIAL STATEMENTS - CONTINUED SEPTEMBER 30, 2004 1L NOTE 5 - PENSION PLANS (CONTINUED)

I Since the City does not issue separate financial reports for all of the pension plans, the combining statement of fiduciary net assets and the combining statement of changes in fiduciary net assets for the pension trust funds are being included in the notes to the financial statements as information for the users.

I The following is the combining statement of plan net assets for the pension trust funds at September 30, 2004:

I General Employees' Firefighters' Police Officers' I Retirement Retirement Retirement System Plan System Total Assets I Cash and Cash Equivalents $ 1,621,532 $ 206,480 $ 1,474,459 $ 3,302,471 Receivables: I Interest and dividends receivable 20,348 6,809 127,004 154,161 Accounts receivable 38,212 270,204 3,417 311,833 Due from other governments Total receivables 58,560 43,764 320,777 130,421 43,764 509,758 I

Investments, at fair value:

Mutual funds: equities Mutual funds: bonds 17,938,319 6,871,768 7,292,898 6,871,768 25,231,217 I

Common stock 27,735,503 4,723,877 15,362,034 47,821,414 Government obligations International stock 6,024,785 1,709,823

- 6,858,193 2,909,744 6,858,193 10,644,352 I

Non-government obligations 5,673,100 5,673,100 Total investments 51,698,607 20,598,366 3,803,071 103,100,044 A

Total Assets 53,378,699 21,125,623 32,407,951 106,912,273 Liabilities I Accounts Payable 1,183,199 70,722 1,094,377 2,348,298 Total liabilities 1,183,199 70,722 1,094,377 2,348,298 I

Net Assets Net Assets Reserved for Employees' A

Pension Benefits $ 52,195,500 $ 21,054,901 $ 31,313,574 $ 104,563,975 1

I I1 49

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CITY OF OCALA, FLORIDA NOTES TO FINANCIAL STATEMENTS - CONTINUED SEPTEMBER 30, 2004 NOTE 5 - PENSION PLANS (CONTINUED)

The following is the combining statement of changes in plan net assets for the pension trust funds for the fiscal year ended September 30, 2004:

General Police Employees' Firefighters' Officers' Retirement Retirement Retirement System Plan System Total Additions:

Contributions:

Employer $ 3,522,203 $ 924,017 $ 906,865 $ 5,353,085 State 340,352 526,766 867,118 Employee 444,693 591,880 1,036,573 Total contributions 3,522,203 1,709,062 2,025,511 7,256,776 Investment income:

Investment income 5,107,476 1,071,101 2,435,444 8,614,021 Dividend income 487,363 303,910 261,149 1,052,422 Total income on investments 5,594,839 1,375,011 2,696,593 9,666,443 Less: Investment management fees (331,224) (134,022) (153,041) (618,287)

Net investment income (loss) 5,263,615 1,240,989 2,543,552 9,048,156 Total additions (reductions) 8,785,818 2,950,051 4,569,063 16,304,932 Deductions:

Pension payments 3,794,173 1,446,574 1,729,964 6,970,711 Refunds to employees 29,990 15,030 45,020 Administration 68,199 65,840 30,361 164,400 Total deductions 3,862,372 1,542,404 1,775,355 7,180,131 Net Increase (Decrease) 4,923,446 1,407,647 2,793,708 9,124,801 Net Assets Reserved for Employees' Pension Benefits:

Beginning of year 47,272,054 19,647,254 28,519,866 95,439,174 End of year $ 52,195,500 $ 21,054,901 $ 31,313,574 $ 104,563,975 50

CITY OF OCALA, FLORIDA L

NOTES TO FINANCIAL STATEMENTS - CONTINUED SEPTEMBER 30, 2004 L

NOTE 6 - LONG-TERM LIABILITIES 1

The City's outstanding long-term debt includes bonds payable, notes payable, claims payable and compensated absences payable. The following is a schedule of changes in the City's long-term debt for the fiscal year ended September 30, 2004:

I Beginning Balance increases Decreases Ending Balance Amounts Due Within One Year I

Governmental ActivlAes:

Revenue Bonds and Certificates L 2002 Optional Gas Tax Bonds $ 17,565,000 $ - $ (1,525,000) $ 16,040,000 $ 1,415,000 1995 Capital Improvement Certificates 4,670,000 - (90,000) 4,580,000 95,000 2002 Capital improvement Certificates 2003 Capital improvement Certificates Subtotal 14,340,000 15,310,000 51,885,000

- (530,000)

(2,145,000) 13,810,000 15,310,000 49,740,000 550,000 590,000 2,650,000 1

Less deferred refuridings and discounts 880,190 - (43,262) 836,928 -

Total Revenue Bonds and Certificates Other liabilites Compensated Absences 52,765,190 2,114,100 2,147,968 (2,188,262)

(1,798,439) 50,576,928 2,463,629 2,650,000 1,456,190 I

Claims and Judgements 4,204,808 3,324,709 (2,538,215) 4,993,302 998,660 Total other liabilities Total Governmental Activities $

6,318,908 59,084,098 $

5,472,677 5,472,677 7T ST7):

(6,522,916) $

1,456,931 58,033,859 254,850

$ 3 453 510 I Business-type Activities:

Revenue Bonds 1995 Water and Sewer Bonds 1996 Water and Sewer Bonds

$ 4,945,000 9,615,000

$ - $ (10,000)

(510,000)

$ 4,935,000 9,105,000

$ 10,000 540,000 I

2001 Water and Sewer Bonds 36,205,000 - - 36,205,000 2001 A Water and Sewer Bonds 37,805,000 - (2,300,000) 35,505,000 2,390,000 2001 Electric System Bonds 8,580,000 - (2,035,000) 6,545,000 2,105,000 Subtotal Less deferred refundings and discounts CR#3 decommissioning costs payable 97,150,000 (3,344,521) 5,916,439 346,164 806,890 (4,855,000) 92,295,000 (2,998,357) 6,723,329 5,045,000 1I Compensated Absences 1,100,263 923,593 (826,061) 1,197,795 685,336 Total Business-type Activities $ 100,822,181 $ 2,076,647 $ (5,681,061) $ 97,217,767 $5,3,3 The compensated absences payable from the governmental funds are typically liquidated in the General Fund.

I Bonds Payable Collateral I The City has gas tax revenue bonds, capital improvement certificates, water and sewer revenue bonds and electric system revenue bonds outstanding at year-end. Gas tax revenue bonds are collateralized by a pledge of the City's sixth cent optional gas tax; the capital improvement certificates are collateralized by a pledge of certain I

non-ad valorem revenues of the City; and the enterprise revenue bonds are collateralized by a pledge of the net revenues generated by the issuing fund.

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51 I

I

CITY OF OCALA, FLORIDA NOTES TO FINANCIAL STATEMENTS - CONTINUED SEPTEMBER 30, 2004 NOTE 6 - LONG-TERM LIABILITIES (CONTINUED)

The following is a schedule of bonds outstanding at September 30, 2004:

Amount Amount Interest Description Of Bonds Purpose Of Issue Issued Outstanding Rates Governmental Activities:

2002 Optional Gas Tax Bonds Road Projects $17,565,000 $ 16,040,000 2.25%-3.55%

1995 Capital Improvement Certificates Capital Projects 5,000,000 4,580,000 4.40%-5.375%

2002 Capital Improvement Certificates Capital Projects 14,340,000 13,810,000 2.00%-4.50%

2003 Capital Improvement Certificates Refunding 15,310,000 15,310,000 2.00%-5.375%

Total Governmental Activities $ 49,740,000 Business-Type Activities:

1995 Water and Sewer Bonds Capital Projects 5,000,000 $ 4,935,000 4.40%-5.50%

1996 Water and Sewer Bonds Refunding 12,170,000 9,105,000 5.50%-6.00%

2001 Water and Sewer Bonds Capital Projects 36,205,000 36,205,000 5.00%-5.75%

2001-A Water and Sewer Bonds Refunding 39,885,000 35,505,000 3.25%-4.50%

2001 Electric System Bonds Refunding 10,520,000 6,545,000 3.25%-4.00%

- Total Business-Type Activities $ 92,295,000 The following schedules show debt service requirement to maturity for the City's bonded indebtedness for the City's governmental activities and for the City's business-type activities:

Governmental Activities Capital Improvement Fiscal Certificates Optional Gas Tax Bonds Year Principal Interest Principal Interest 2005 $ 1,235,000 $ 1,388,006 $ 1,415,000 $ 460,575 2006 1,265,000 1,360,422 1,450,000 426,575 2007 1,290,000 1,331,339 1,480,000 391,762 2008 1,325,000 1,299,949 1,520,000 354,262 2009 1,355,000 1,265,566 1,555,000 313,493 2010-2014 8,235,000 5,592,890 8,620,000 749,482 2015-2019 11,575,000 3,299,913 2020-2024 7,420,000 751,831 2025-2029 2030-2032 Total $ 33,700,000 $ 16,289,916 $ 16,040,000 $ 2,696,149 52

CITY OF OCALA, FLORIDA 1

NOTES TO FINANCIAL STATEMENTS - CONTINUED SEPTEMBER 30, 2004 L

NOTE 6- LONG-TERM LIABILITIES (CONTINUED)

Business-Type Activities L

Fiscal Year Electric System Revenue Bonds Principal Interest Water and Sewer Revenue Bonds Principal Interest L

2005 2006

$ 2,105,000 2,185,000

$ 189,219 111,613

$ 2,940,000 3,070,000

$ 4,101,039 3,978,875 L

2007 2,255,000 38,053 3,180,000 3,859,200 2008 2009 3,305,000 3,450,000 3,721,553 3,573,188 L 2010-2014 - 19,665,000 15,404,770 2015-2019 2020-2024 2025-2029 14,505,000 10,975,000 14,195,000 11,005,962 8,220,025 5,015,887 I

2030-2032 Total $ 6,545,000 $

338,885 10,465,000

$85,750,000 923,307

$ 59,803,806 L

The City's charter limits the aggregate amount of general obligation bonds outstanding to twenty percent (20%) of 1

the assessed valuation of the taxable real and personal property in the City. At September 30, 2004, there was no general obligation debt outstanding. IL During the fiscal year ended September 30, 2004, there was no new bond activity.

Conduit Issue In January, 1994, $3,500,000 Student Housing Revenue Bonds were issued. The proceeds of the bonds are being used by the Central Florida Community College Foundation to acquire real property and to construct student housing facilities. The bonds, which mature in 2014, do not represent debt or an obligation of the City L

and are collateralized solely from the gross revenues of the completed project. The completed project and all revenues derived therefrom, subsequent to the payment of all debt service requirements, belong exclusively to the Foundation. The outstanding balance at September 30, 2004 is $2,235,000.

L I

I I

1i 53 L

CITY OF OCALA, FLORIDA NOTES TO FINANCIAL STATEMENTS - CONTINUED SEPTEMBER 30, 2004 NOTE 7 - PRIOR YEAR DEFEASANCE OF DEBT The City has defeased certain bonds by placing the proceeds of new bonds in an irrevocable trust to provide for all future debt service payments on the old bonds. Accordingly, the trust account assets and the liability for the defeased bonds are not included in the City's financial statements. At September 30, 2004, $1,730,000 of bonds outstanding are considered defeased, as follows:

Governmental Activities $ -

Business-Type Activities:

Electric System Revenue:

Power Supply Revenue Bonds, Series 1977 $ 1,730,000 Total $ 1,730,000 NOTE 8-FUND DEFICITS At September 30, 2004 the Self-insurance Internal Service Fund had a $1,938,532 deficit in total net assets. This was caused primarily by increased claims and changes in the actuarial estimate for claims liability. The changes in the claim liability are contained in Note 9 - Risk Management. The City plans to eliminate the deficit over the next five years by increasing the user fees to the other funds.

NOTE 9- RISK MANAGEMENT The City has established a self-insurance fund (an internal service fund) to account for the City's self-insured programs. This fund is used to account for the City's workers' compensation, general liability, automobile liability, disability income replacement, medical and dental programs. The City uses a combination of self-insurance and private insurance to protect itself against risks which cannot be eliminated.

The City has general liability insurance with a $100,000 retention per claimant and $200,000 retention per occurrence with limits of $1,000,000. The City has workers' compensation insurance with a $250,000 deductible per occurrence with limits of $5,000,000. The disability income replacement, dental programs and auto liability programs are fully self-insured. The City's employee health insurance program was fully self-insured through February, 1994, after which it is fully insured except for the prescription program which was fully self-insured through December, 1997. The City had no significant reductions in insurance coverage during the fiscal year ended September 30, 2004.

All departments of the City participate in the program. Payments are made by various funds to the Self Insurance Fund based on past experience of the amounts needed to pay current year claims. For the year ended September 30, 2004, the City obtained actuarially determined estimates of the total claims loss reserves for all self-insurance risks. The claims liability of $4,993,302 reported in the Fund at September 30, 2004 is based on the requirements of Governmental Accounting Standards Board Statement No. 10 which requires that a liability for unpaid claims costs, including estimates of costs relating to incurred but not reported claims, be accrued when 54

CITY OF OCALA, FLORIDA LI NOTES TO FINANCIAL STATEMENTS - CONTINUED SEPTEMBER 30, 2004 U

NOTE 9 - RISK MANAGEMENT (CONTINUED) insured events occur. In addition, there have been no settlements which exceeded the City's insurance coverage LI in any of the past three fiscal years. Changes in the Fund's claim liability amount during the past three fiscal years are as follows:

Current Year L

Claims and Balance Beginning-of-Fiscal-Year-Liability Changes in Estimates Claim Payments at Fiscal Year End 1 2001-2002 2002-2003 2003-2004

$ 3,067,719 3,266,247 4,204,808

$ 1,946,718 3,081,645 3,324,709

$ 1,748,190 2,143,084 2,536,215

$ 3,266,247 4,204,808 4,993,302 L,

I NOTE 10 - COMMITMENTS AND CONTINGENT LIABILITIES 1

Economic Improvement Incentives - The City has designated a portion of the savings resulting from the decision to purchase power through the Florida Municipal Power Agency to be set aside for economic improvement incentives. The funds are utilized to encourage local businesses to remain in Ocala and to attract existing businesses to relocate to Ocala to create new employment opportunities and, thereby, increasing City revenues I through electric utility usage and an expanded tax base. Economic incentive payments amounted to $322,404 for the year ended September 30, 2004.

Grants - The City receives significant financial assistance from federal agencies primarily in the form of capital I grants. The disbursement of funds received under these programs generally requires compliance with terms and conditions specified in the grant agreements and is subject to audit by the grantor agencies. Disallowed claims, if any, resulting from such audits may become liabilities of the City. However, in the opinion of management, I disallowed claims, if any, will not have a material effect on the City's financial statements.

Litigation - Various suits and claims arising in the ordinary course of City operations are pending against the City of Ocala. While the ultimate effect of such litigation cannot be ascertained at this time, the City does not expect 1 any of these routine items to have a material impact on the financial condition of the City.

Other Commitments - The City has outstanding commitments on various contracts for construction and other projects. These commitments, as of September 30, 2004, in the respective funds are as follows: 1 General Fund $ 400,064 Electric System Revenue Fund 772,444 I Water and Sewer Fund 1,089,399 Sanitation Fund 29,609 Municipal Golf Course Fund Ocala International Airport Fund 12,703 28,590 l

Communications Fund 73,005 SunTran Fund Municipal Trailer Park Fund 18,969 120 11 Adult Athletic Complex Fund 780 Nonmajor Governmental Funds Internal Service Funds Total 766,810 259,566

$ 3,452,059 I

55 A1 j

CITY OF OCALA, FLORIDA NOTES TO FINANCIAL STATEMENTS - CONTINUED SEPTEMBER 30,2004 NOTE 10 - COMMITMENTS AND CONTINGENT LIABILITIES (CONTINUED)

Purchased Power Contract - The City presently purchases power exclusively from Florida Municipal Power Agency (FMPA) through the 230 kv State-wide bulk power system. Additionally, since 1977, the City has become the owner of an undivided 1.333% or 11 MW share of the 825 MW Crystal River Nuclear Plant No. 3 (CR-3).

The City has an All Requirements Power Supply Project Contract ("Requirements Contract") with FMPA which requires FMPA to sell and deliver to the City and the City to purchase from FMPA all electric power that the City requires in excess of the amount the City receives from its percentage ownership interest in CR-3. The Requirements Contract expires in 2025, but automatically extends for additional five-year terms unless either party notifies the other of its decision not to extend the Requirements Contract. The City pays for electric power under the Requirements Contract at the rates set forth in the applicable rate schedule of FMPA, which FMPA may revise from time to time. The power supply contract provides the option for the City to leave the Agency after notice and making the remaining project participants whole. This is generally understood to mean paying off its portion of the project's long-term debt.

NOTE 11 - HURRICANES The City of Ocala was impacted by Hurricanes Charley, Frances and Jeanne in August and September of 2004.

Although these events occurred during fiscal year 2004, the recovery and restoration is continuing months after year-end. The two largest areas of hurricane related recovery for the City were debris cleanup and the restoration of the electric system. The entity-wide expenses related to hurricanes in fiscal year 2004 are $4.2 million, although the total expenses incurred have exceeded $9 million well into fiscal year 2005. The majority of these costs will be reimbursed by FEMA, and the financial statements include estimated revenues and receivables of

$3.8 million.

NOTE 12 - SUBSEQUENT EVENTS In January, 2005, the City defeased the $4,440,000 outstanding Electric System Refunding Revenue Bonds, Series 2001, by depositing the $777,373.33 available in the related sinking fund and $3,729,512.29 in other available funds with an escrow agent.

In January, 2005, the City issued $24,625,000 Utility Systems Refunding Revenue Bonds, Series 2005A, for the purpose of defeasing all of the $4,925,000 outstanding balance of the Water and Sewer Revenue Bonds, Series 1995, and $18,230,000 of the $36,205,000 outstanding balance of the Water and Sewer Revenue Bonds, Series 2001. The funds were deposited with an escrow agent. The interest rates on the series 2005A bonds range from 2.10% to 4.60%. In January, 2005, the City also issued $33,355,000 of Utility Systems Revenue Bonds, Series 2005B, for improvements to the City's Water and Sewer system and to the City's Electric system. The interest rates on the series 2005B bonds range from 2.10% to 5.25% The coverage for the utility systems bonds is 110%

of the combined net revenues of both the Electric and Water and Sewer systems.

56

CITY OF OCALA FLORIDA GENERAL FUND SCHEDULE OF REVENUES. EXPENDITURES AND CHANGES IN FUND BALANCE - BUDGET AND ACTUAL FOR THE YEAR ENDED SEPTEMBER 30, 2004 Variance with Budgeted Amounts Final Budget -

(GAAP Basis) Actual Positive Original _ Final Amounts (Negative)

Revenues:

Property taxes $ 14,156,969 $ 14,156,969 $ 13,865,851 $ (291,118)

Utility service tax 9,640,000 9,640,000 9,329,469 (310,531)

Other taxes 456,030 456,000 709,786 253,786 State revenue sharing 1,372,603 1,372,603 1,443,396 70,793 Other intergovernmental revenues 5,397,971 8,035,859 6,837,915 (1,197,944)

Licenses and permits 1,561,070 1,561,070 1,483,910 (77,160)

Fines and forfeitures 414,600 431,232 483,088 51,856 Charges for services 1,561,500 1,692,901 2,325,377 632,476 Investment income 714,239 714,239 222,005 (492,234)

Gifts 160,500 207,835 343,306 135,471 Other 2,108,248 2,511,050 664,682 (1,070,368)

Total revenues 37,543,700 40,779,758 37,708,785 (3,070,973)

Expenditures:

Current General government and administration 6,694,925 6,941,359 6,254,224 687,135 Pubric safety 26,667,305 28,097,903 27,269,177 828,726 Public works 5,680,347 5,865,575 5,241,787 623,788 Culture and recreation 4,379,023 4,564,712 4,226,419 338,293 Housing rehabilitation 406,111 422,661 304,668 117,993

- Nondepartmental appropriations 1,767,169 392,615 197,618 194,997 Other 1,478,285 3,843,946 2,519,372 1,324,574 Capital outlay 2,026,418 2,476,711 1,586,311 890,400 Debt service:

Interest and paying agents' fees 9,516 9,516 9,515 1 Total expenditures 49,109,099 52,614,998 47,609,091 5,005,907 Excess (Deficiency) of Revenues Over Expenditures (11,565,399) (11,835,240) (9,900,306) 1,934,934 Other Financing Sources (Uses):

Transfers in 11,944,827 11,944,827 11,613,155 (331,672)

Transfers out (2,268,345) (2,341,269) (2,207,378) 133,891 Total other financing sources (uses) 9,676,482 9,603,558 9,405,777 (197,781)

Net change in fund balance (1,888,917) (2,231,682) (494,529) 1,737,153 Fund Balance, beginning of year 11,229,820 11,229,820 11 ,229,820 -

Fund Balance, end of year $ 9,340,903 $ 8,998,138 $ 10,735,291 $ 1,737,153 57

Ll CITY OF OCALA, FLORIDA REQUIRED SUPPLEMENTARY INFORMATION L HISTORICAL TREND INFORMATION FOR PENSION TRUST FUNDS SCHEDULE OF FUNDING PROGRESS (1)

L General Plan:

([b]-[a])/[c]

[b] UAAL as a Fiscal Year

[a]

Actuarial Actuarial Accrued

[b] - [a]

Unfunded (a] I [b] [c]

Percentage of I

Ended Value of Liability ML Funded Covered Covered 9/30 Assets ,

(AAL)* (UAAL) Ratio Payroll Payroll l

2004 $53,517,767 $76,208,308 $22,690,541 70.23% $27,782,381 81 .67%

2003 52,181,215 62,420,895 10,239,680 83.60% 26,845,342 38.14%

2002 2001 51,050,337 49,715,165 60,715,570 58,555,697 9,665,233 84.08%

84.90%

25,712,036 37.59% I 8,840,532 24,305,928 36.37%

2000 1999 1998 49,300,452 66,142,950 62,105,361 57,844,296 71,753,284 67,670,920 8,543,844 5,610,334 5,565,559 85.23%

92.18%

91.78%

21,757,209 31,891,235 30,016,764 39.27%

17.59%

18.54%

I, Police Officers' Plan:

[b]

([bJ-[a])/[c]

UAALasa I Fiscal [a] Actuarial [b] - [a) Percentage Year Ended 9/30 Actuarial Value of Assets Accrued Liability (AAL)*

Unfunded AAL (UAAL)

[al / (bi Funded Ratio

[c]

Covered Payroll of Covered Payroll I

2004 2003

$34,313,287 32,838,390

$39,794,643 32,838,390

$ 5,481,357 86.23%

100.00%

$ 7,337,563 7,298,837 74.70% I 2002 31,939,047 31,939,047 100.00% 6,993,805 2001 31,152,402 31,152,402 100.00% 6,625,498 I

2000 28,632,326 30,103,745 1,471,419 95.11% 6,434,809 22.87%

1999 27,130,310 28,611,663 1,481,353 91 .74% 5,783,939 25.61%

1998 13,084,660 13,084,660 100.00% 5,316,552

• For the 2004 fiscal year the actuarial cost method was changed from Frozen Entry Age to Entry Age Normal In order to produce more stable and predictable contribution amounts. Neither actuaril L

cost method has a defined AAL after the initial year. The AAL was created by adding the UAAL (which is defined under both methods) to the actuarial value of assets. 1 (Continued) 1 58

CITY OF OCALA, FLORIDA REQUIRED SUPPLEMENTARY INFORMATION HISTORICAL TREND INFORMATION FOR PENSION TRUST FUNDS SCHEDULE OF FUNDING PROGRESS - CONTINUED (1)

Firefighters' Plan:

[b]

Actuarial Ub]-[a])/c]

Accrued UAALasa Fiscal [a] Liability [b] - [a] Percentage Year Actuarial (AAL) Unfunded [a] / [b] [c] of Ended Value of Entry ML Funded Covered Covered 9/30 Assets Age * (UAAL) Ratio Payroll Payroll 2004 $20,590,179 $29,212,483 $ 8,622,304 70.00% $ 4,981,506 166.00%

2003 19,325,113 27,459,330 8,134,217 70.00% 4,981,506 163.00%

2002 17,122,893 24,825,695 7,702,802 69.00% 4,632,402 166.00%

2001 18,331,226 23,293,986 4,962,760 79.00% 4,287,493 116.00%

(1) Actuarial information as of the latest actuarial valuation is as follows:

General Police Officers Firefighters Valuation Date October 1, 2004 October 1, 2004 October 1, 2004 Actuarial Cost Method Entry Age-Normal Entry Age-Normal Entry Age-Normal Amortization Method Level Percent of Level Percent of Level Percent of Pay- Closed Pay - Closed Pay- Closed Remaining Amortization Period 30 Years 30 Years 22 Years Asset Valuation Method 5-Year Smoothing 5-Year Smoothing Expected Value Actual Assumptions (All Plans):

Net Investment Rate of Retum 8.5% 8.5% 7.75%

Projected Salary Increases 6.0% 6.0% 3.25% - 7.25%

Includes Inflation at 3.0% 3.0% 3.25%

Cost-of-Living Adjustments 0.0% 0.0% 0.0%

Prior to the 2001 fiscal year the Firefighters! Retirement Plan used the Aggregate Actuarial Cost method. Consequently, for this period, no Schedule of Funding Progress Isrequired or possible, since this method does not identify or separately amortize unfunded actuarial liabilities.

59

I CITY OF OCALA, FLORIDA REQUIRED SUPPLEMENTARY INFORMATION HISTORICAL TREND INFORMATION FOR PENSION TRUST FUNDS A

SCHEDULE OF CONTRIBUTIONS FROM EMPLOYER LI AND OTHER CONTRIBUTING ENTITIES LI General Plan:

Annual U Required Fiscal Year 2004 Contribution (City)

$ 3,402,463 Percentage Contributed 104.00%

LI 2003 2,604,418 100.00%

2002 2001 2,456,998 1,790,087 100.00%

100.00%

Li 2000 1,471,544 100.00%

1999 1998 1,413,903 1,350,660 100.00%

100.00%

L:

1 Firefighters' Plan:

Annual Annual Required Annual Required

£ Fiscal Required Contribution Contribution Percentage Year Contribution (City) (1) (State) (2) Contributed 2004 $ 1,183,394 $ 924,017 $ 259,377 100.00%

2003 1,063,378 804,001 259,377 100.00%

2002 2001 911,985 815,204 652,608 555,827 259,377 259,377 100.00%

100.00%

I 2000 562,416 308,354 254,062 100.00%

1999 1998 219,086 215,356 8,632 219,086 206,724 100.00%

100.00% L (1) These City contributions include funds that were drawn from the contributions I

surplus account.

(2) Excess state annual required contributions are accumulated in the I

contributions surplus account which is drawn upon if actual state contributions fall below the annual required contribution.

A (Continued) 1 60 LI

CITY OF OCALA, FLORIDA REQUIRED SUPPLEMENTARY INFORMATION HISTORICAL TREND INFORMATION FOR PENSION TRUST FUNDS SCHEDULE OF CONTRIBUTIONS FROM EMPLOYER AND OTHER CONTRIBUTING ENTITIES - CONTINUED Police Officers' Plan:

Annual Annual Annual Required Required Fiscal Required Contribution Contribution Percentage Year Contribution (City) (1) (State) (2) Contributed 2004 $ 1,337,358 $ 906,865 $ 430,493 100.34%

2003 1,006,783 576,290 430,493 100.00%

2002 1,125,549 683,102 442,447 100.00%

2001 1,020,584 617,506 403,078 100.00%

2000 714,755 416,374 382,863 100.00%

1999 471,671 100,829 370,842 100.00%

1998 402,319 31,477 370,842 100.00%

(1) These City contributions include funds that were drawn from the contributions surplus account.

(2) Excess state annual required contributions are accumulated in the contributions surplus account which is drawn upon if actual state contributions fall below the annual required contribution.

61

I I

A I

I I

U LI Li I'

1I I

CITY OF OCALA, FLORIDA NONMAJOR GOVERNMENTAL FUNDS SEPTEMBER 30, 2004 SPECIAL REVENUE FUNDS:

Special revenue funds are used to account for the proceeds of specific revenue sources that are legally or administratively restricted to expenditure for specific purposes. Special revenue funds used by the City are:

Parkinc/Parks Enforcement Fund - This fund accounts for the proceeds from the City's parking system and for the enforcement of the City's parks ordinance for the implementation of fines.

Downtown Development Fund - This fund accounts for property taxes levied against downtown property owners.

Local Gasoline Tax Fund - This fund accounts for street related maintenance and improvement projects financed by the City's share of local gasoline taxes. These taxes are required by law to be used to maintain streets.

Stornwater Utility Fund - This fund accounts for resources collected that are to be used for additions to, improvements to and maintenance of the storm drainage system.

SHIP Local Housing Assistance Fund - This fund accounts for the receipt and uses of funds received from the Florida "local housing assistance trust fund" for the State Housing Initiative Partnership (low income housing).

Community Redevelopment Trust Fund - The Community Redevelopment Trust Fund is used to account for receipts and transfers of the tax increment fees collected for improving and redeveloping the downtown area.

DEBT SERVICE FUNDS:

Debt service funds are used to account for the accumulation of resources for the payment of principal, interest and related costs of the City's general long-term debt. Debt service funds used by the City are:

1995 Improvement Certificates Fund - This fund is used for the payment of principal, interest and related costs of the Capital Improvement Revenue Certificates, Series 1995.

2002 Improvement Certificates Fund - This fund is used for the payment of principal, interest and related costs of the Capital Improvement Revenue Certificates, Series 2002.

2003 Improvement Certificates Fund - This fund is used for the payment of principal, interest and related costs of the Capital Improvement Refunding Revenue Certificates, Series 2003.

2002 Optional Gas Tax Bonds Fund - This fund is used for the payment of principal, interest and related costs'of the Optional Gas Tax Refunding and Improvement Revenue Bonds, Series 2002.

62

J1 CITY OF OCALA, FLORIDA NONMAJOR GOVERNMENTAL FUNDS (CONTINUED)

SEPTEMBER 30, 2004 CAPITAL PROJECTS FUNDS:

The Capital Projects Funds are used to account for resources earmarked for the acquisition and construction of major capital facilities and other project oriented activities other than those financed by proprietary funds. Capital project funds used by the City are:

2002 Optional Gas Tax Construction Fund - This fund is used to account for resources earmarked for construction of and improvements to several roadways funded by the new money portion of the Optional Gas Tax Refunding and Improvement Revenue Bonds, Series 2002.

2002 Capital Improvement Fund - This fund is used to account for the resources earmarked for the acquisition and construction of certain capital improvements funded by the Capital Improvement Revenue Certificates, Series 2002.

63

J CITY OF OCALA, FLORIDA COMBINING BALANCE SHEET I

NONMAJOR GOVERNMENTAL FUNDS SEPTEMBER 30, 2004 J

Total Special Revenue Debt Service Capital Projects Nonmajor Governmental I

Funds Funds Funds Funds Assets Cash and Investments $a $ 3,742,175 $ 21,813,811 $ 25,555,986 I

Equity In Pooled Cash Fund 11,621,564 11,621,564 Receivables (net)

Due From Other Funds Due From Other Governments 108,573 111,676 1,157,286 108,573 111,676 1,157,286 ii Other Assets Total Assets 1,800 13,000,899 3,742,175 21 813, 811 1,800 38,556,885 I Liabilities and Fund Balances Liabilities:

Accounts Payable 382,102 - 228,031 610,133 I

Accrued Liabilities 43,711 43,711 Deferred Revenue Advances To Other Funds 883,633 440,367

- 228,031 883,633 440,367 I Total Liabilities 1,749,813 1,977,844 Fund Balances: A Reserved For Debt Service Transportation 8,282,400 3,742,175 3,742,175 8,282,400 A

District Improvements 541,222 541,222 Capital Projects 21,585,780 21,585,780 Total Reserved Fund Balances 8,823,622 3,742,175 21,585,780 34,151,577 Unreserved 2,427,464 2,427,464 Total Fund Balances 11,251,086 3,742,175 21,585,780 36,579,041 Total Liabilities and Fund Balances $ 13,000,899 $ 3,742,175 $ 21,813,811 $ 38,556,885 I

-1 64 ii

CITY OF OCALA, FLORIDA COMBINING STATEMENT OF REVENUES, EXPENDITURES AND CHANGES IN FUND BALANCES NONMAJOR GOVERNMENTAL FUNDS SEPTEMBER 30,2004 Total Special Debt Capital Nonmajor Revenue Service Projects Governmental Funds Funds Funds Funds Revenues Property Taxes $ 143,451 $ $p - $ 143,451 Other Intergovernmental Revenues 4,372,171 - 4,372,171 Parking Meters and Facilities 66,572 - 66,572 Fines and Forfeitures 6,055 - 6,055 Charges For Services 2,327,115 - 2,327,115 Investment Income 146,142 43,902 297, 511 487,555 Gifts 222,566 29, 045 251,611 Other 74,926 32, 101 107,027 Total Revenues 7,358,998 43,902 358, ,657 7,761,557 Expenditures Current:

General Government 503,040 503,040 Public Works 2,631,226 456,235 3,087,461 Other 52,108 52,108 Capital Outlay 1,555,430 1,143,464 2,698,894 Debt Service:

Principal Payments 2,145,000 2,145,000 Interest and Fees 350 1,698,696 1,699,046 Total Expenditures 4,742,154 3,843,696 1,599,699 10,185,549 Excess (Deficiency) Of Revenues Over Expenditures 2,616,844 (3,799,794) (1,241,042) (2,423,992)

Other Financing Sources (Uses):

Transfers In 114,901 4,679,351 4,794,252 Transfers Out (2,385,193) (42,452) (2,427,645)

Total Other Financing Sources (Uses) (2,270,292) 4,636,899 2,366,607 Net Change In Fund Balance 346,552 837,105 (1,241,042) (57,385)

Fund Balances-Beginning 10,904,534 2,905,070 22,826,822 36,636,426 Fund Balances-Ending $11,251,086 $ 3,742,175 $ 21,585,780 $ 36,579,041 65

W LI CITY OF OCALA, FLORIDA COMBINING BALANCE SHEET U NONMAJOR GOVERNMENTAL FUNDS - SPECIAL REVENUE FUNDS SEPTEMBER 30, 2004 LI Parking/

Parks Enforcement Downtown Development U Assets Equity in pooled cash and investment fund Accrued interest receivable

$ 57,158 574

$ 40,231 447 LI Accounts and notes receivable 42 Due from other funds Due from other governments LI Other current assets 50 1,750 Total Assets $ 57,824 $ 42,428 LI Liabilities and Fund Balances LI Liabilities:

Accounts payable Compensated absences payable Deferred revenue

$ 5,337 $ 669 LI Interfund loans payable after one year Total liabilities 5,337 669 LI Fund Balance:

Reserved for transportation Reserved for district improvements Total reserved fund balance 41,759 41,759 LI Unreserved fund balance Total fund balance 52,487 52,487 41,759 LI Total Liabilities and Fund Balances $ 57,824 $ 42,428 LI Ii1 U

Li L

66 11 U

Local SHIP Local Community Gasoline Stormwater Housing Redevelopment Tax Utility Assistance Trust Total

,686,367 7$ $ 2,613,199 $ 729,898 $ 494,711 $ 11,621,564 72,639 23,217 6,207 4,752 107,836 695 _ 737 111,676 - - 111,676 716,919 440,367 - - 1,157,286 1,800

- $ 8,475,925 $ 3,189,154 $ 736,105 $ 499,463 $ 13,000,899

$ 34,734 $ 339,248 $ 2,114 $ 382,102 9,149 34,562 43,711 149,642 733,991 883,633 440,367 440,367 193,525 814,177 736,105 1,749,813 8,282,400 8,282,400 499,463 541,222 8,282,400 499,463 8,823,622 2,374,977 2,427,464

- 8,282,400 2,374,977 499,463 11,251,086

$ 8,475,925 $ . 3,189,154 $ 736,105 $ 499,463 $ 13,000,899 67

LI CITY OF OCALA, FLORIDA COMBINING STATEMENT OF REVENUES, EXPENDITURES AND CHANGES IN FUND BALANCES L NONMAJOR GOVERNMENTAL FUNDS - SPECIAL REVENUE FUNDS FOR THE YEAR ENDED SEPTEMBER 30, 2004 L

Parking/

Parks Enforcement Downtown Development U Revenues:

Property taxes Other intergovernmental revenues

$ - $ 51,416 LI Parking meters and facilities 66,572 Fines and forfeitures Charges for services 6,055 LI Investment income 719 631 Gifts Other Total revenues 73,346 52,047 U

Expenditures:

Current 16 General government and administration 20,81-5 Public works Other Capital outlay 52,108 1,025 Li Debt service:

Interest and paying agents' fees Total expenditures 350 53,483 20,815 U

Excess (Deficiency) of Revenues Over Expenditures Other Financing Sources (Uses):

19,863 31,232 16 Transfers from other funds Transfers to other funds Total other financing sources (uses)

(21,730)

(21,730) 16 Net change in Fund Balances Fund Balances at Beginning of Year 19,863 32,624 9,502 32,257 L

Fund Balances at End of Year $ 52,487 $ 41,759 L.

16 L

16 68 L

Local SHIP Local Community Gasoline Stormwater Housing R~edevelopment Tax Utility Assistance Trust Total

$_ $ $ - $ 92,035 $ 143,451 3,442,949 471,489 457,733 - 4,372,171

- 66,572

- - 6,055 2,327,115 - - 2,327,115 96,386 31,144 9,220 8,042 146,142 222,566 - - 222,566 32,552 32,102 10,272 - 74,926 3,794,453 2,861,850 477,225 . 100,077 7,358,998 477,225 5,000 503,040 420,748 2,210,478 2,631,226 52,108 429,113 1,007,828 117,464 1,555,430 849,861 3,218,306 477,225 1 350 849,861 3,218,306 477,225 122,464 4,742,154 2,944,592 (356,456) - (22,387) 2,616,844 19,225 95,676 114,901 (2,338,463) (25,000) (2,385,193)

(2,319,238) (125,000) 95,676 (2,270,292) 625,354 (381,456) 73,289 346,552 7,657,046 2,756,433 426,174 10,904,534

- $ 8,282,400 $ 2,374,977 $ $ 499,463 $ 11,251,086 69

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U CITY OF OCALA, FLORIDA SCHEDULE OF REVENUES AND EXPENDITURES - BUDGET AND ACTUAL U

PARKINGIPARKS ENFORCEMENT FUND FOR THE YEAR ENDED SEPTEMBER 30, 2004 Ii Variance with Final Final Budget Positive fl Actual Budget (Negative)

Revenues:

Parking meters and facilites $ 66,572 $ 57,100 $ 9,472 K

Fines and forfeitures 6,055 7,120 (1,065)

Investment income Total revenues 719 73,346 1,685 65,905 (966) 7,441 L, Expenditures:

Current - other Capital outlay 52,108 1,025 53,600 1,248 1,492 223 L!

Debtservice:

Principal payments Interest and paying agents' fees Total expenditures 350 53,483 10,685 351 65,884 10,685 12,401 1 L Excess (Deficiency) of Revenues Over Expenditures 19,863 21 19,842 L Net Change in Fund Balance 19,863 21 19,842 Fund Balance:

Beginning of year 32,624 (21) 32,645 L

End of year $ 52,487 $ - $ 52,487 L L

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CITY OF OCALA, FLORIDA SCHEDULE OF REVENUES AND EXPENDITURES - BUDGET AND ACTUAL DOWNTOWN DEVELOPMENT FUND FOR THE YEAR ENDED SEPTEMBER 30, 2004 Variance with Final Budget Final Positive Actual Budget (Negative)

Revenues:

Property taxes $ 51,416 $ 52,694 $ (1,278)

Investment income 631 1,600 (969)

Total revenues 52,047 54,294 (2,247)

Expenditures:

Current - General government and administration 20,815 28,278 7,463 Total expenditures 20,815 28,278 7,463 Excess of Revenues Over Expenditures 31,232 26,016 5,216 Other Financing Sources (Uses):

Transfers to other funds (21,730) (21,730)

Total other financing sources (uses) (21,730) (21,730)

Net Change in Fund Balance 9,502 4,286 5,216 Fund Balance:

Beginning of year 32,257 (4,286) 36,543 End of year $ 41,759 $ - $ 41,759 71

1-LI CITY OF OCALA, FLORIDA SCHEDULE OF REVENUES AND EXPENDITURES - BUDGET AND ACTUAL U

LOCAL GASOLINE TAX FUND FOR THE YEAR ENDED SEPTEMBER 30,2004 I

Variance with Final Final Budget Positive I Actual Budget (Negative)

Revenues:

Other intergovernmental revenues $ 3,442,949 $ 3,048,000 $ 394,949 L

investment income 96,386 315,000 (218,614)

Gifts Other Total revenues 222,566 32,552 3,794,453 703,400 6,102 4,072,502 (480,834) 26,450 (278,049)

U Expenditures:

Current - Public works 420,748 2,004,234 1,583,486 LI Capital outlay 429,113 5,520,319 5,091,206 Total expenditures Excess (Deficiency) of Revenues Over Expenditures 849,861 2,944,592 7,524,553 (3,452,051) 6,674,692 6,396,643 L

Other Financing Sources (Uses):

Transfers from other funds Transfers to other funds 19,225 (2,338,463) 32,760 (2,413,587)

(13,535) 75,124 L.

Total other financing sources (uses) (2,319,238) (2,380,827) 61,589 1 Net Change in Fund Balance 625,354 (5,832,878) 6,458,232 L

Fund Balance at Beginning of Year Fund Balance at End of Year $

7,657,046 8,282,400 $

5,832,878 1,824,168 8,282,400 L

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CITY OF OCALA, FLORIDA SCHEDULE OF REVENUES AND EXPENDITURES - BUDGET AND ACTUAL STORMWATER UTILITY FUND FOR THE YEAR ENDED SEPTEMBER 30,2004 Variance with Final Budget Final Positive Actual Budget (Negative)

Revenues:

Other intergovernmental revenues $ 471,489 $ 912,716 $ (441,227)

Charges for services 2,327,115 2,314,000 13,115 Investment income 31,144 120,000 (88,856)

Gifts 31,563 (31,563)

Other 32,102 6,102 26,000 Total revenues 2,861,850 3,384,381 (522,531)

Expenditures:

Current - Public Works 2,210,478 2,755,159 544,681 Capital outlay 1,007,828 2,495,161 1,487,333 Total expenditures 3,218,306 5,250,320 2,032,014 Excess (Deficiency) of Revenues Over Expenditures (356,456) (1,865,939) 1,509,483 Other Financing (Uses):

Transfers to other funds (25,000) (25,000)

Total other financing sources (uses) (25,000) (25,000)

Net Change in Fund Balance (381,456) (1,890,939) 1,509,483 Fund Balance at Beginning of Year 2,756,433 1,890,939 865,494 Fund Balance at End of Year $ 2,374,977 $ $ 2,374,977 73

Ii CITY OF OCALA, FLORIDA SCHEDULE OF REVENUES AND EXPENDITURES - BUDGET AND ACTUAL SHIP LOCAL HOUSING ASSISTANCE FUND Ii FOR THE YEAR ENDED SEPTEMBER 30,2004 L

Variance with Final Budget -I Final Positive Actual Budget (Negative)

Revenues:

Other intergovernmental revenues $ 457,733 $ 1,600,923 $ (1,143,190)

L1 Investment income 9,220 - 9,220 Other Total revenues 10,272 477,225 1,600,923

- 10,272 (1,123,698) L Expenditures:

Current - General government and administration Total expenditures 477,225 477,225 1,600,923 1,600,923 1,123,698 1,123,698 L

Net Change in Fund Balance Fund Balance at Beginning of Year 1

Fund Balance at End of Year $ - $ - $ L U

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CITY OF OCALA, FLORIDA SCHEDULE OF REVENUES AND EXPENDITURES - BUDGET AND ACTUAL COMMUNITY REDEVELOPMENT FUND FOR THE YEAR ENDED SEPTEMBER 30, 2004 Variance with Final Budget Final Positive Actual Budget . (Negative)

Revenues:

Property taxes $ 92,035 $ 102,161 $ (10,126)

Investment income 8,042 9,000 (958)

Total revenues 100,077 111,161 (11,084)

Expenditures:

Current:

General government and administrative 5,000 5,000 Capital outlay 117,464 142,812 25,348 Total expenditures 122,464 147,812 Excess of Revenues Over Expenditures (22,387) (36,651) (11,084)

Other Financing Sources:

Transfers from other funds 95,676 101,431 (5,755)

Net Change in Fund Balance 73,289 64,780 (16,839)

Fund Balance at Beginning of Year 426,174 (64,780) 490,954 Fund Balance at End of Year $ 499,463 $ - $ 474,115 Excess (Deficiency) of Revenues Over Expenditures 75

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CITY OF OCALA, FLORIDA COMBINING BALANCE SHEET NONMAJOR GOVERNMENTAL FUNDS - DEBT SERVICE FUNDS SEPTEMBER 30, 2004 LI!

1995 Improvement Certificates 2002 Improvement Certificates L.

Assets Restricted cash and investments $ 216,267 $ 798,221 L Total Restricted Assets $ 216,267 798,221 L"

Fund Balances Fund Balances:

216,267 $ 798,221 L

Reserved for debt service Total Fund Balances $ 216,267 $ 798,221 LI 76 L

2003 2002 Optional Improvement Gas Tax Certificates Bonds Total

$ 921,307 $ 1,806,380 $ 3,742,175

$ 921,307 $ 1,806,380 $ 3,742,175

$ 921.307 $ 1,806L380 $ 3,742,175

$ 921,307 $ 1,806,380 $ 3,742,175 77

Li CITY OF OCALA, FLORIDA COMBINING STATEMENT OF REVENUES, EXPENDITURES AND CHANGES IN FUND BALANCES Ii NONMAJOR GOVERNMENTAL FUNDS - DEBT SERVICE FUNDS FOR THE YEAR ENDED SEPTEMBER 30, 2004 1995 Improvement Certificates 2002 Improvement Certificates LI Revenues:

Investment income $ 3,006 $ 9,687 L Expenditures:

Debt Service:

Principal payments 90,000 530,000 L

Interest and paying agents' fees 245,059 502,217 Total expenditures 335,059 1,032,217 L

(1,022,530)

Deficiency of Revenues Over Expenditures Other Financing Sources (Uses):

(332,053) 1 Transfers from other funds 337,534 1,046,442 Transfers to other funds (2,506) (9,212)

L Total other financing sources (uses) 335,028 . 1,037,230 Net Change in Fund Balances 2,975 14,700 Fund Balances at Beginning of Year 213,292 783,521 Fund Balances at End of Year $ 216,267 $ 798,221 1 L

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2003 2002 Optional

- Improvement Gas Tax Certificates Bonds Total

$ 11,509 $ 19,700 $ 43,902 1,525,000 2,145,000 458,309 493,111 1,698,696 458,309 2018,111 3,843,696 (446,800) (1,998,411) (3,799,794) 1,252,615 2,042,760 4,679,351 (11,509) (19,225) (42,452) 1,241,106 2,023,535 4,636,899 794,306 25,124 837,105 127,001 1,781,256 2,905,070

$ 921,307 $ 1,806,380 $ 3,742,175 79

CITY OF OCALA, FLORIDA SCHEDULE OF REVENUES AND EXPENDITURES - BUDGET AND ACTUAL 1995 IMPROVEMENT CERTIFICATES FUND FOR THE YEAR ENDED SEPTEMBER 30,2004 Variance with Final Final Budget Positive fl Actual Budget (Negative)

Revenues:

Investment income $ 3,006 $ 3,825 $ (819)

L Total revenues 3,006 3,825 . (9)

Expenditures:

Debt Service:

L Principal payments Interest and paying agents' fees Total expenditures 90,000 245,059 335,059 90,000 245,159 335,159 100 100 I',

Excess (Deficiency) of Revenues Over Expenditures Other Financing Sources (Uses):

(332,053) (331,334) (719)

L Transfers from other funds 337,534 337,534 Transfers to other funds (2,506) (3,225) 719 Total other financing sources (uses) 335,028 334,309 719 Net Change in Fund Balance 2,975 2,975 Fund Balance at Beginning of Year 213,292 (2,975) 216,267 Fund Balance at End of Year $ 216,267 $ $ 216,267 L

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CITY OF OCALA, FLORIDA SCHEDULE OF REVENUES AND EXPENDITURES - BUDGET AND ACTUAL 2002 IMPROVEMENT CERTIFICATES FUND FOR THE YEAR ENDED SEPTEMBER 30,2004 Variance with Final Budget Final Positive Actual Budget (Negative)

Revenues:

Investment income $ 9,687 $ 14,440 $ (4,753)

Total revenues 9,687 14,440 (4,753)

Expenditures:

Debt Service:

Principal payments 530,000 530,000 Interest and paying agents' fees 502,217 502,243 26 Total expenditures 1,032,217 1,032,243 26 Excess (Deficiency) of Revenues Over Expenditures (1,022,530) (1,017,803) (4,727)

Other Financing Sources (Uses):

Transfers from other funds 1,046,442 1,046,442 Transfers to other funds (9,212) (13,940) 4,728 Total other financing sources (uses) 1,037,230 1,032,502 4,728 Net Change in Fund Balance 14,700 14,699 I Fund Balance at Beginning of Year 783,521 (14,699) 798,220 Fund Balance at End of Year $ 798,221 $ - $ 798,221 81

LI CITY OF OCALA, FLORIDA SCHEDULE OF REVENUES AND EXPENDITURES - BUDGET AND ACTUAL U

2003 IMPROVEMENT CERTIFICATES FUND FOR THE YEAR ENDED SEPTEMBER 30,2004 U

Variance With Final Final Budget Positive U Actual Budget (Negative)

Revenues:

Investment income $ 11,509 $ 16,595 $ (5,086)

[A Total revenues 11,509 16595(5,086)

Expenditures: U Debt Service:

Interest and paying agents' fees Total expenditures 458,309 458,309 458,809 458,809 500 500 U Excess (Deficiency) of Revenues Over Expenditures (446,800) (442,214) (4,586)

Other Financing Sources (Uses):

Transfers from other funds 1,252,615 1,252,615 U

Transfers to other funds (11,509) (16,095)

Li 4,586 Total other financing sources (uses) 1,241,106 1,236,520 4,586 Net Change in Fund Balance 794,306 794,306 Fund Balance at Beginning of Year 127,001 (794,306) 921,307 U Fund Balance at End of Year $ 921,307 $_ $ 921,307 h

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CITY OF OCALA, FLORIDA SCHEDULE OF REVENUES AND EXPENDITURES -BUDGET AND ACTUAL 2002 OPTIONAL GAS TAX BONDS FUND FOR THE YEAR ENDED SEPTEMBER 30,2004 Variance with Final Budget Final Positive Actual Budget (Negative)

Revenues:

Investment income $ 19,700 $ 33,260 $ (13,560)

Total revenues 19,700 33,260 (13,560)

Expenditures:

Debt Service:

Principal payments 1,625,00O 1,525,000 Interest and paying agents' fees 493,111 495,888 2,777 Total expenditures 2,018,111 2,020,888 2,777 Excess (Deficiency) of Revenues Over Expenditures (1,998,411) (1,987,628) (10,783)

Other Financing Sources (Uses):

Transfers from other funds 2,042,760 2,048,262 (5,502)

Transfers to other funds (19,225) (32,760) 13,535 Total other financing sources (uses) 2,023,535 2,015,502 8,033 Net Change in Fund Balance 25,124 27,874 (2,750)

Fund Balance at Beginning of Year 1,781,256 (27,874) 1,809,130 Fund Balance at End of Year $ 1,806,380 $ - $ 1,806,380 83

U CITY OF OCALA, FLORIDA COMBINING BALANCE SHEET Ii NONMAJOR GOVERNMENTAL FUNDS - CAPITAL PROJECTS FUNDS SEPTEMBER 30, 2004 L

Assets 2002 Optional Gas Tax Construction 2002 Capital Improvement Total 1

Cash and investments $

10,590,444 10,590,444

$ 11,223,367

$ 11,223,367

$ 21,813,811

$ 21,813,811 L

Total Assets Liabilities and Fund Balances 1

Current Liabilities:

228,031 L Accounts payable Total liabilities

$ 87,310 87,310

$ 140,721 140,721 228,031 1 Fund Balances:

Reserved for capital projects 10,503,134 11,082,646 21,585,780 Total fund balance 10,503,134 11,082,646 21,585,780 Total Liabilities and Fund Balances $ 10,590,444 $ 11,223,367 $ 21,813,811 L

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CITY OF OCALA, FLORIDA COMBINING STATEMENT OF REVENUES, EXPENDITURES AND CHANGES IN FUND BALANCES NONMAJOR GOVERNMENTAL FUNDS - CAPITAL PROJECTS FUNDS FOR THE YEAR ENDED SEPTEMBER 30, 2004 2002 Optional 2002 Gas Tax Capital Construction Improvement Total Revenues:

Investment income $ 143,645 $ 153,866 $ 297,511 Gifts - 29,045 29,045 Other - 32,101 32,101 Total revenues 143,645 215,012 358,657 Expenditures:

Current Public works 273,544 182,691 456,235 Capital outlay 270,891 872,573 1,143,464 Total expenditures 544,435 1,055,264 1,599,699 (Deficiency) of Revenues Over Expenditures (400,790) (840,252) (1,241,042)

Net Change InFund Balances (400,790) (840,252) (1,241,042)

Fund Balances at Beginning of Year 10,903,924 11,922,898 22,826,822 Fund Balances at End of Year $ 10,503,134 $ 11,082,646 $ 21,585,780 85

U CITY OF OCALA, FLORIDA SCHEDULE OF REVENUES AND EXPENDITURES - BUDGET AND ACTUAL I

2002 OPTIONAL GAS TAX CONSTRUCTION FUND FOR THE YEAR ENDED SEPTEMBER 30, 2004 1

Variance with Final Final Budget Positive 1

Actual Budget (Negative)

Revenues:

Investment income $ 143,645 $ $ 143,645 1

Total revenues 143,645 143,645 Expenditures:

1 Current - Public works 273,544 2,296,328 2,022,784 Capital outlay 270,891 7,617,049 7,346,158 Total expenditures 544,435 9,913,377 9,368,942 Excess (Deficiency) of Revenues Over Expenditures (400,790) (9,913,377) 9,512,587 Net Change in Fund Balance (400,790) (9,913,377) 9,512,587 Fund Balance at Beginning of Year Fund Balance at End of Year $

10,903,924.

10,503,134 $_

9,913,377 990,547 10,503,134 L

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CITY OF OCALA, FLORIDA SCHEDULE OF REVENUES AND EXPENDITURES - BUDGET AND ACTUAL 2002 CAPITAL IMPROVEMENT FUND FOR THE YEAR ENDED SEPTEMBER 30, 2004 Variance with Final Budget Final Positive Actual Budget (Negative)

Revenues:

Investment income $ 153,866 $ 200,000 $ (46,134)

Gifts 29,045 33,000 (3,955)

Other 32,101 6,101 26,000 Total revenues 215,012 239,101 (24,089)

Expenditures:

Current Public works 182,691 1,834,398 1,651,707 Capital outlay 872,573 4,704,933 3,832,360 Total expenditures 1,055,264 6,539,331 5,484,067 Excess (Deficiency) of Revenues Over Expenditures (840,252) (6,300,230) 5,459,978 Net Change in Fund Balance (840,252) (6,300,230) 5,459,978 Fund Balance at Beginning of Year 11,922,898 6,300,230 5,622,668 Fund Balance at End of Year $ 11,082,646 $ - $ 11,082,646 87

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CITY OF OCALA, FLORIDA INTERNAL SERVICE FUNDS SEPTEMBER 30, 2004 INTERNAL SERVICE FUNDS:

The Intemal Service Funds account for the operation of departments which exist solely to provide services to other City departments. The revenues of the Internal Service Funds are derived from user fees and self-insurance premiums charged to other City funds. The Intemal Service Funds used by the City are:

Internal Service Fund - This fund accounts for the operation of the management information system, central services, facilities maintenance, clinic and purchasing and warehousing departments.

Fleet Management Fund - This fund accounts for the operation of the fleet management department, which is responsible for replacing, specifying, acquiring, maintaining and disposing of approximately 930 units of gas driven equipment.

Self-insurance Fund - This fund accounts for the operation of the risk management department and for the costs of the City's insurance and self-insurance plans.

88

LI CITY OF OCALA, FLORIDA COMBINING BALANCE SHEET Li INTERNAL SERVICE FUNDS SEPTEMBER 30, 2004 U

Self-Assets Internal Service.

Fleet Management Insurance Total L Current Assets:

Cash and investments Equity in pooled cash and investment fund Accrued interest receivable

$ 150 1,418,998 13,686

$ 800 7,899,628 70,765

$ 150 3,233,811 34,861

$ 1,100 12,552,437 119,312 LI Accounts receivable Inventories Due from other governments 1,068 33,914 9,728 15,215 180,390 6,956 38,381 9,500 54,664 214,304 26,184 LI Other current assets 225 225 69,981 70,431 Total current assets Capital Assets, Net 1,477,769 8,014,665 8,173,979 9,694,221 3,386,684 10,009 13,038,432 17,718,895 L

Total Assets $ 9,492,434 $ 17,868,200 $ 3,396,693 $ 30,757,327 L Liabilities Current Liabilities:

L Accounts payable Claims payable Compensated absences payable

$ 197,243 110,819

$ 243,150 59,880

$ 341,923 4,993,302

$ 782,316 4,993,302 170,699 1

Total current liabilities 308,062 303,030 5,335,225 5,946,317 Noncurrent Liabilities:

L Interfund loans payable after one year 9,728 6,956 16,684 Compensated absences payable Total noncurrent liabilities Total Liabilities 88,149 97,877 405,939 41,087 48,043 351,073 5,335,225 129,236 145,920 6,092,237 L

Net Assets Invested in capital assets 8,014,665 9,694,221 10,009 17,718,895 1

Unrestricted 1,071,830 7,822,906 (1,948,541) 6,946,195 Total Net Assets $ 9,086,495 $ 17,517,127 $ (1,938,532) $ 24,665,090 L I

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CITY OF OCALA, FLORIDA COMBINING STATEMENT OF REVENUES, EXPENSES AND CHANGES IN FUND NET ASSETS INTERNAL SERVICE FUNDS FOR THE YEAR ENDED SEPTEMBER 30,2004 Internal Fleet Self-Service Management Insurance Total Operating Revenues:

Fees and rentals $ 5,316,808 $ 5,095,050 $ 1,278,775 $ 11,690,633 City insurance contributions - 7,441,446 7,441,446 Employee insurance contributions - 2,141,532 2,141,532 Other 21 8,236 483,720 - 701,956 Total operating revenues 5,535,044 5,578,770 10,861,753 21,975,567 Operating Expenses:

Fleet management 3,157,762 3,157,762 Purchasing and warehousing 794,076 794,076 Information technology and central services 2,480,869 2,480,869 Facilities maintenance 1,894,209 1,894,209 Insurance, administration and other 11,730,856 11,730,856 Depreciation 808,396 2,231,633 2,814 3,042,843 Other 148,227 10,965 159,192 Total operating expenses 6,125,777 5,400,360 11,733,670 23,259,807 Operating Income (Loss) (590,733) 178,410 (871,917) (1,284,240)

Non-Operating Revenues Investment income 18,441 104,807 32,061 155,309 Total non-operating revenues 18,441 104,807 32,061 155,309 Income (Loss) Before Operating Transfers (572,292) 283,217 (839,856) (1,128,931)

Transfers:

To other funds (6,297) - (6,297)

Total operating transfers (6,297) - (6,297)

Change in Net Assets (578,589) 283,217 (839,856) (1,135,228)

Total Net Assets, beginning of year 9,665,084 17,233,910 (1,098,676) 25,800,318 Total Net Assets, end of year $ 9,086,495 $ 17,517,127 $ (1,938,532) $ 24,665,090 90

L CITY OF OCALA, FLORIDA COMBINING STATEMENT OF CASH FLOWS L

INTERNAL SERVICE FUNDS FOR THE YEAR ENDED SEPTEMBER 30,2004 L

Internal Fleet Self-Service Management Insurance Total L

Cash Flows from Operating Activities:

Cash received from employees Cash paid to suppliers for goods and services (2,375,658)

(1,725,419)

$ 2,142,615 (7,879,718)

$ 2,142,615 (11,980,795) r Cash paid to employees for services (2,807,264) (1,419,977) (496,116) (4,723,357)

Cash received from otherfunds Cash paid for insurance claims 5,317,548 5,258,006 8,710,175 (2,536,215) 19,285,729 (2,536,215)

L Net cash provided by (used in) operating activities Cash Flows from Non-Capital Financing 134,626 2,112,610 (59,259) 2,187,977 L1 Activities:

Transfers in Transfers out Proceeds of loans from other funds (6,297) 9,728 6,956 (6,297) 16,684 L

Net cash used in non-capital financing activities 3,431 6,956 - 10,387 L Cash Flows from Capital and Related Financing Activities:

Principal paid on capital lease and notes payable L

Interest paid on capital lease and notes payable Proceeds from sale of capital assets 19,699 476,188 495,887 Acquisition and construction of capital assets Net cash used in capital and related financing activities

( 111,989)

(92,290)

(3,312,081)

(2,835,893)

(4,420)

(4,420)

(3,428,490)

(2,932,603)

L Cash Flows from Investing Activities:

Investmentincome 18,442 107,605 25,222 151,269 L

Net cash provided by investing activities 18,442 107,605 25,222 151,269 Net Increase in Cash and Cash Equivalents 64,209 (608,722) (38,457) (582,970)

Cash and Cash Equivalents, beginning of year 1,354,939 8,509,150 3,272,418 13,136,507 L

Cash and Cash Equivalents, end of year $ 1,419,148 $ 7,900,428 $ 3,233,961 $ 12,553,537 (Continued)

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CITY OF OCALA, FLORIDA COMBINING STATEMENT OF CASH FLOWS (Continued)

INTERNAL SERVICE FUNDS FOR THE YEAR ENDED SEPTEMBER 30, 2004 Internal Fleet Self-Service Management Insurance Total Reconciliation of Operating Income (Loss) to Cash Provided by Operating Activities:

Operating income (loss) $ (590,733) $ 178,410 $ (871,917) $ (1,284,240)

Adjustment to reconcile operating income to cash flows provided by operating activities:

Depreciation 808,396 2,231,633 2,814 3,042,843 Loss (gain) on capital asset disposal (124,471) (298,781) (512) (423,764)

(Increase) decrease in assets:

Accounts and notes receivable (561) (15,027) 4,583 (11,005)

Inventories 5,645 (9,170) (3,525)

Due from other governments (9,728) (6,956) (9,500) (26,184)

Other current assets 598 (225) (13,025) (12,652)

Increase (decrease) in liabilities:

Accounts payable 21,916 21,091 43,304 86,311 Compensated absences payable 23,564 11,635 35,199 Claims payable 788,494 788,494 Deferred revenue (3,500) (3,500)

Net Cash Provided by Operating Activities $ 134,626 $ 2,112,610 $ (59,259) $ 2,187,977 92

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CITY OF OCALA, FLORIDA STATISTICAL SECTION Description of Schedules General Governmental Revenues and Other Financing Sources by Source General Governmental Expenditures and Other Uses .by Function Property Tax Levies, Tax Collections and Assessed Valuations Property Tax Rates and Levies - Direct and Overlapping Governments Special Assessment Collections Computation of Legal Debt Margin Schedules of Bond Coverage:

Electric System Revenue and Refunding Revenue Bonds Water and Sewer Revenue and Refunding Revenue Bonds Utility Systems Subordinate Refunding Revenue Bonds, Series 1992A and 1992B Capital Improvement Revenue and Refunding Revenue Bonds and-Capital Improvement Revenue, Revenue Refunding and Refunding Revenue Certificates Optional Gas Tax Revenue Bonds, Refunding Revenue Bonds and Refunding and Improvement Revenue Bonds Computation of Direct and Overlapping General Obligation Debt Miscellaneous Statistical Data Demographic Statistics List of Ten Largest Taxpayers Schedule of Insurance in Force Property Value, Construction and Bank Deposits Summary of Debt Service Requirements to Maturity - All Bonded Debt Statements of Bonded Debt and Interest:

Capital Improvement Revenue Certificates, Series 1995 Capital Improvement Revenue Certificates, Series 2002 Capital Improvement Refunding Revenue Certificates, Series 2003 Optional Gas Tax Refunding and Improvement Revenue Bonds, Series 2002 Water and Sewer Revenue Bonds, Series 1995 Water and Sewer Refunding Revenue Bonds, Series 1996 Water and Sewer Revenue Bonds, Series 2001 Water and Sewer Refunding Revenue Bonds, Series 2001A Electric System Refunding Revenue Bonds, Series 2001 Analysis of Sewerage System Capital Improvement Fund Established for Florida Department of Environmental Regulation Grant #621080 93

LI U

CITY OF OCALA, FLORIDA GENERAL GOVERNMENTAL REVENUES AND OTHER FINANCING SOURCES BY SOURCE (1) U LAST TEN FISCAL YEARS 1995 1996 1997 1998 L Property taxes $ 7,638,214 $ 7,819,975 $ 8,368,548 $ 8,480,580 4,791,403 5,040,944 Utility service tax Other taxes Intergovernmental revenues 1,508,766 9,122,383 1,673,396 10,495,025 4,722,401 1,777,951 11,657,539 1,825,810 12,034,615 L

Licenses and permits 772,036 800,587 957,288 960,467 Fines and forfeitures Charges for services and off-street parking 1,052,858 2,380,049 580,973 2,463,001 642,935 2,526,920 594,544 2,747,158 U

Operating transfers from other funds 17,000,557 15,256,416 14,637,135 14,082,216 Bond and note proceeds Investment income 1,467,264 154,506 1,632,089 297,975 1,733,101 314,017 2,161,010 436,978 U

Miscellaneous TOTAL $ 41,096,633 $ 45,810,840 $ 47,337,835 $ 48,364,322 U

(1) This schedule includes revenues and other financing sources of the General Fund, Special Ii Revenue Funds and Debt Service Funds. Interfund expenditures have not been eliminated between these funds. I_

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1.

I 94 L

1999 2000 2001 2002 2003 2004

$ 9,102,961 $ 9,511,892 $ 11,548,574 $ 12,436,199 $ 13,237,448 $ 14,009,302 5,102,382 5,306,148 7,551,057 9,826,251 8,972,010 9,329,469 1,812,423 2,054,924 979,605 395,596 629,497 709,786 13,454,031 12,272,487 11,036,370 13,365,718 10,952,739 12,653,482 1,054,871 1,096,018 1,589,534 1,055,928 1,418,871 1,483,910 464,268 381,070 391,965. 403,763 *396,124 489,143 3,262,969 3,822,275 4,115,134 4,094,558 4,225,866 4,719,064 13,231,408 13,939,858 14,488,147 14,274,470 16,039,513 16,407,407 6,544,120 16,829,140 1,039,143 1,847,372 2,849,560 1,770,818 995,020 412,049 3,134,366 1,093,781 553,724 835,729 1,135,027 1,305,480

$ 51,658,822 $ 51,325,825 $ 55,103,670. $ 65,003,150 $ 74,831,255 $ 61,519,092 95

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CITY OF OCALA, FLORIDA GENERAL GOVERNMENTAL EXPENDITURES L AND OTHER USES BY FUNCTION (1)

LAST TEN FISCAL YEARS 1995 1996 1997 1998 Li General government and administration Public safety Public works

$ 3,750,855 14,812,271 4,531,891

$ 4,141,798 15,621,375 4,732,747

$ 4,472,247 16,672,853 5,253,535

$ 4,759,554 17,476,228 5,646,503 L

Culture and recreation - 3,939,075 4,259,453 5,184,240 4,572,977 Nondepartmental 87,932 143,264 191,039 210,752 Debt service 3,501,935 3,627,857 3,760,178 3,758,570 Capital outlay 3,160,173 3,497,923 5,175,529 4,993,327 Operating transfers to other funds Payment to Refunding Bonds Escrow Agent Miscellaneous 4,777,853 995,400 6,455,475 1,025,824 3,990,763 1,057,508 4,017,101 2,361,933 L

Total $ 39,557,385 $ 43,505,716 $ 45,757,892 $ 47,796,945 1

L (1) This schedule includes expenditures and other financing uses of the General Fund, Special Revenue Funds and Debt Service Funds. Interfund expenditures have not been eliminated between these funds.

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1999 2000 2001 2002 2003 2004

$ 5,353,842 $ 5,556,404 $ 5,207,855 $ 5,722,144 $ 6,244,743 $ 6,757,264 18,844,027 19,588,382 21,686,577 23,546,305 25,564,889 27,269,177 6,265,545 5,813,068 5,931,960 8,722,518 8,463,819 7,873,013 4,911,858 3,341,906 3,650,228 3,922,136 4,477,221 4,226,419 195,447 730,425 316,333 330,237 381,999 197,618 2,469,619 2,982,635 2,979,339 5,164,672 2,790,966 3,853,561 6,417,164 9,521,370 7,120,700 8,462,353 6,480,089 3,141,741 5,097,944 5,187,048 4,552,992 4,218,807 4,567,326 4,635,023 6,422,315 16,599,223 1,729,854 . 1,454,750 1,153,583 1,477,483 1,398,900 2,876,148

$ 51,285,300 $ 54,175,988 $ 52,599,567 $ 67,988,970 $ 76,969,175 $ 60,829,964 97

U CITY OF OCALA, FLORIDA PROPERTY TAX LEVIES, TAX COLLECTIONS U

Assessed AND ASSESSED VALUATIONS (1)

LAST TEN FISCAL YEARS Current Total 131 of Total L

I Fiscal Valuation Tax Rate in Total Tax Tax Tax Collections Uncollected Year (100% at Market) Mills (5I Levy (2 Collections Collections to Tax Levy Taxes 1995 $ 1,556,395,804 5.03 $ 7,836,849 $ 7,289,707 $ 7,595,038 96.9 $547,142 1996 1997 1,574,831,300 1,634,063,072 5.09 5.22 8,041,653 8,567,696 7,474,513 7,925,026 7,781,671 8,328,857 96.8 97.2 567,140 642,670 L

1998 1999 1,662,531,988 1,771,686,458 5.22 5.27 8,725,865 9,385,714 8,131,668 8,755,381 8,441,660 9,061,156 96.8 96.5 594,197 630,333 L

2000 1,853,082,830 5.27 9,821,569 9,172,117 9,468,965 11,504,383 96.4 649,452 751,261 1

2001 2,026,300,739 5.84 11,884,723 11,133,462 96.8 2002 2,194,839,566 5.78 12,761,905 11,927,359 12,273,927 96.2 834,546 I 2003 2,351,269,279 5.78 13,674,384 12,665,942 13,093,274 95.8 1,008,442 2004 2,521,911,481 5.68 14,369,729 13,444,999 13,865,851 96.5 924,730 I L

Source: Marion County Tax Collector and City of Ocala Finance & Administrative Services Department (1) Excludes property tax levies of the Downtown Development Commission.

I (2)

(3)

Includes penalties under § 193.072, Florida Statutes.

Tax collections include current and delinquent taxes, and tax certificates and payments to local I

governments for homestead exemptions.

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CITY OF OCALA, FLORIDA PROPERTY TAX RATES AND LEVIES -

DIRECT AND OVERLAPPING GOVERNMENTS LAST TEN FISCAL YEARS Millage Rates Year City CountV School Districts Total 1995 5.03 5.74 9.88 0.48 21.13 1996 5.09 5.40 9.75 0.48 20.72 1997 5.22 5.71 9.99 0.48 21.40 1998 5.22 6.22 10.59 0.48 22.51 1999 5.27 6.15 10.62 0.48 22.52 2000 5.27 6.15 9.83 0.48 21.73 2001 5.84 6.18 9.66 0.47 22.15 2002 5.78 6.06 9.50 0.46 21.80 2003 5.78 6.04 9.44 0.46 21.72 2004 5.68 5.64 9.06 0.46 20.84 Tax Levies Water Fiscal Mgmt Year City (1) County (2) School (2) Districts (2) Total 1995 7,823,068 8,933,712 15,377,191 747,070 32,881,041 1996 8,027,264 8,504,089 15,354,605 755,919 32,641,877 1997 8,551,764 9,330,500 16,324,290 784,350 34,990,904 1998 8,705,206 10,340,949 17,606,214 798,015 37,450,384 1999 9,365,048 10,895,872 18,815,310 850,409 39,926,639 2000 9,797,630 11,396,459 18,215,804 889,480 40,299,373 2001 11,855,904 12,522,539 19,574,065 952,361 44,904,869 2002 12,722,270 13,300,726 20,850,973 1,009,626 47,883,595 2003 13,630,465 14,201,666 22,186,577 1,086,286 51,104,994 2004 14,342,032 14,223,581 22,861,128 1,165,123 52,591,864 (1) Does not include penalties under § 193.072 of the Florida Statutes.

(2) The tax levies for overlapping governments reflect each government's millage applied to the total assessed valuation within the City's corporate boundaries.

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U CITY OF OCALA, FLORIDA U SPECIAL ASSESSMENT COLLECTIONS LAST TEN FISCAL YEARS U

Fiscal New Liens Collections and Total Outstanding I Year Assessed Adiustments Assessments ()

1995 1996

• 1997

$ 16,916 7,336 21,112

$115,703 108,367 87,255 I

1998 4,106 83,149 1999 2000 11,595 22,770 71,554 48,784 I'

2001 25,044 23,740 2002 2003 2,735 21,005 21,005 I 2004 21,005 (1) Does not reflect reserves for uncollectible special assessment levies.

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CITY OF OCALA, FLORIDA COMPUTATION OF LEGAL DEBT MARGIN SEPTEMBER 30, 2004 Assessed Value (100% at market as of January 1, 2004) $ 2,521,911,481 Debt Limit: 20% of Assessed Value $ 504,382,296 Amount of General Obligation Debt Outstanding Legal Debt Margin $ 504,382,296 In accordance with Article IX, §9.02, of the City of Ocala Charter, the "aggregate amount of general obligation bonds of the City outstanding at any one time shall not be greater than twenty percent (20%) of the assessed valuation of the taxable real and personal property in the City according to the latest assessment of such real and personal property."

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CITY OF OCALA, FLORIDA SCHEDULE OF ELECTRIC SYSTEM REVENUE Li AND REFUNDING REVENUE BONDS COVERAGE LAST TEN FISCAL YEARS Net Revenue Available for Debt Debt Service Requirements (2) (3) (4)

L Year Service (1) Principal Interest Total Coverage 1995 $ 22,733,287 $ 1,435,000 $ 494,065 $ 1,929,065 11.78 L 1996 19,025,573 1,530,000 398,038 1,928,038 9.87 1997 18,935,425 1,630,000 293,325 1,923,325 9.85 1998 22,891,440 1,745,000 179,390 1,924,390 11.90 L 1999 21,531,368 1,740,000 60,030 1,800,030 11.96 2000 20,413,962 - - -

2001 18,548,045 - - - - L 2002 22,528,190 - 243,571 243,571 92.33 2003 16,043,273 1,940,000 331,406 2,271,406 7.06 2004 14,557,187 2,035,000 264,388 2,299,388 6.33 (1) Represents gross operating revenues and interest income (including interest income capitalized) less gross operating expenses, excluding amortization and depreciation, of the electric system.

(2) In October, 1989, the City issued Electric System Revenue Bonds, Series 1989A in the amount of $28,425,000 and Electric System Revenue Refunding Bonds, Series 1989B in the amount of $13,000,000. The 1989B Bonds were issued for the purpose of advance refunding the City's outstanding Power Supply Revenue Bonds, Series 1977 and the City's outstanding Power Supply Revenue Refunding Bonds, Series 1988. The refunding bonds are no longer considered outstanding debt of the City because an escrow account was created for them; and, therefore, all debt service requirements subsequent to October, 1989 for the refunded bonds have been excluded from the determination of debt service coverage. The proceeds of the 1989A Bonds are being used to fund the cost of the acquisition system and certain infrastructure improvements related thereto. The first interest payments on the Series 1989A and 1989B Bonds occurred in April, 1990; the first principal payments were made October 1, 1990. The final principal and interest payments on the Series 1989B Bonds were made on October 1, 1998.

(3) In March, 1992, the City issued the $28,435,000 Utility Systems Subordinate Refunding Revenue Bonds, I Series 1992B, for the purpose of refunding the outstanding Electric System Revenue Bonds, Series 1989A.

The refunded bonds are no longer considered outstanding debt of the City since an escrow account was created for them; and, therefore, all debt service requirements subsequent to 1992 will be excluded from the determination of debt service coverage. Since the Series 1992B Bonds, as well as the Utility Systems Subordinate Refunding Revenue Bonds, Series 1992A, are payable from a lien upon the surplus revenues of the City's Water and Sewer System and the City's Electric System, the debt service coverage for those two L

issues is shown in a separate schedule for 1993 and subsequent years.

(4) In August 2001, the City.issued the $10,520,000 Electric System Refunding Revenue Bonds, Series 2001, for the purpose of the current refunding of the Utility Systems Subordinate Refunding Revenue Bonds, Series I

1992B. The refunded bonds are no longer considered outstanding debt of the City since an escrow account was created for them. The first interest payment on the Series 2001 bonds occurred in April 2002; the first principal payment was made on October 1, 2002. I 102

CITY OF OCALA, FLORIDA SCHEDULE OF WATER AND SEWER REVENUE AND REFUNDING REVENUE BONDS COVERAGE LAST TEN FISCAL YEARS Net Revenue Available for Debt Debt Service Requirements (2) (3) (4)

Year Service (1) Principal Interest Total Coverage 1995 $ 8,596,135 $ 245,000 $ 937,825 $ 1,182,825 7.26 1996 9,041,538 260,000 1,051,660 1,311,660 6.89 1997 9,355,166 786,254 786,254 11.90 1998 10,048,277 385,000 953,281 1,338,281 7.51 1999 9,167,898 405,000 934,771 1,339,771 6.84 2000 10,960,270 420,000 914,745 1,334,745 8.21 2001 12,826,558 445,000 893,613 1,338,613 9.58 2002 11,135,857 460,000 3,708,504 4,168,504 2.67 2003 9,499,706 2,575,000 4,333,189 4,168,504 2.28 2004 11,319,476 2,820,000 4,221,045 7,041,045 1.61 (1) Represents gross operating revenues less gross operating expenses, excluding amortization and depreciation, of the water and sewer system. Additional pledge revenues are the unlevied public service tax (all issues), interest earnings on investments and any income realized from such investments of the sinking, sinking reserve, and renewal and replacement funds.

(2) In March, 1992, the City issued the $51,880,000 Utility Systems Subordinate Refunding Revenue Bonds, Series 1992A, primarily for the purpose of refunding the outstanding Water and Sewer Revenue Bonds, Series 1985A and Water and Sewer Refunding Revenue Bonds, Series 1986. The refunded bonds are no longer considered outstanding debt of the City since an escrow account was created for them; and, therefore, all debt service requirements subsequent to 1992 will be excluded from the determination of debt service coverage. Since the Series 1992A Bonds, as well as the Utility Systems Subordinate Refunding Revenue Bonds, Series 1992B, are payable from a lien upon the surplus revenues of the City's Water and Sewer System and the City's Electric System, the debt service coverage for these two issues is shown in a separate schedule for 1993 and subsequent years.

(3) In October, 1995, the City issued the $5,000,000 Water and Sewer Revenue Bonds, Series 1995, primarily for the purpose of financing the cost of acquisition and construction of additions, improvements and extensions to the City's water and sewer system. The first interest payment on the Series 1995 Bonds occurred in April, 1996 and the first principal payment occurred in October, 1997.

(4) In July, 1996, the City issued the $12,170,000 Water and Sewer Refunding Revenue Bonds, Series 1996, primarily for the purpose of forward refunding the outstanding Water and Sewer Refunding Revenue Bonds, Series 1988. The refunded bonds are no longer considered outstanding debt of the City since an escrow account was created for them; and, therefore, all debt service requirements subsequent to 1996 will be excluded from the determination of debt service charge. The first interest payment on the Series 1996 Bonds occurred in October, 1996 and the first principal payment occurred in October, 1997.

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(Continued)

CITY OF OCALA, FLORIDA SCHEDULE OF WATER AND SEWER REVENUE AND REFUNDING REVENUE BONDS COVERAGE I

LAST TEN FISCAL YEARS (Concluded)

(5) In April 2001, the City issued the $36,205,000 Water and Sewer Revenue Bonds, Series 2001, primarily for the purpose of financing the cost of acquisition and construction of additions, L improvements and extensions to the City's water and sewer system. The first interest payment on the Series 2001 Bonds occurred on October 1, 2001, and the first principal payment will occur on October 1, 2016.

(6) In August 2001, the City issued the $39,885,000 Water and Sewer Refunding Revenue Bonds, Series 2001A, for the purpose of the current refunding of the Utility Systems Subordinate Refunding Revenue Bonds, Series 1992A. The refunded bonds are no longer considered outstanding debt of the City since l an escrow account was created for them. The first interest payment on the Series 2001 bonds occurred in April 2002; the first principal payment was made on October 1,2002.

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CITY OF OCALA, FLORIDA SCHEDULE OF UTILITY SYSTEMS SUBORDINATE REFUNDING REVENUE BONDS, SERIES 1992A AND 1992B, COVERAGE LAST TEN FISCAL YEARS Net Revenue Available for Debt Debt Service Requirements Year Service (1) Principal Interest Total Coverage 1995 $28,213,532 $3,255,000 $4,1 07,890 $7,362,890 3.83 1996 24,827,413 3,415,000 3,953,546 7,368,546 3-37 1997 25,581,012 3,575,000 3,783,065 7,358,065 3.48 1998 29,677,046 3,760,000 3,595,930 7,355,930 4.03 1999 27,559,440 2,805,000 3,422,435 6,227,435 4.43 2000 30,039,487 1,525,000 3,304,000 4,829,000 6.22 2001 30,035,990 1,610,000 3,214,610 4,824,610 6.23 2002 2003 2004 (1) Represents the surplus revenues of the City's Electric System and of the City's Water and Sewer System available after the payment of the debt service requirements on the senior lien bonds.

(2) In August 2001, the City issued the $39,885,000 Water and Sewer Refunding Revenue Bonds, Series 2001A, and the $10,520,000 Electric System Refunding Revenue Bonds, Series 2001, primarily for the purpose of the current refunding of the outstanding Utility Systems Subordinate Refunding Revenue Bonds, Series 1992A and 1992B; The refunded bonds are no longer considered outstanding debt of the City since an escrow account was created for them; therefore all debt service coverage subsequent to 2001 will be excluded from the determination of debt service coverage.

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CITY OF OCALA, FLORIDA l SCHEDULE OF CAPITAL IMPROVEMENT REVENUE AND REFUNDING REVENUE BONDS AND CAPITAL IMPROVEMENT REVENUE, REVENUE REFUNDING AND REFUNDING REVENUE CERTIFICATES COVERAGE L LAST TEN FISCAL YEARS 1

Pledged Revenues Local Government Communication Occupational Mobile Court Half-Cent Services Franchise License Guaranteed Home Fines and Year Sales Tax Tax Fees Tax Entitlement (1) Licenses Forfeitures 1995 $2,106,763 - $497,871 $378,545 $643,622 $16,913 $660,082 1996 2,196,321 - 573,247 436,646 643,622 21,030 507,069 1997 2,245,440 - 627,813 439,902 643,622 25,700 468,236 1998 2,443,377 - 594,940 452,402 643,622 26,486 532,189 1999 2,632,262 - 564,533 463,809 643,622 29,113 431,951 2000 2,530,619 - 807,441 488,485 643,622 43,358 337,801 2001 2,804,438 - 911,727 490,247 643,622 43,124 360,264 2002 2,919,423 3,944,616 321,825 487,485 643,622 37,504 384,681 2003 3,043,521 3,671,699 529,707 514,246 643,622 32,872 336,930 2004 3,308,143 3,392,966 585,678 511,916 643,622 36,277 422,516 (1) The minimum amount of state revenue sharing funds to be received by the City in accordance with the provisions of the State of Florida Revenue Sharing Act.

(2) The Capital Improvement Refunding Revenue Bonds, Series 1986 were sold in August, 1986. The first L interest payment for this issue was on October 1, 1986, and the first principal payment was on October 1, 1987. This issue places a senior lien on the pledged revenues. The outstanding portion of this issue was refunded in December, 1993 by the Capital Improvement Refunding Revenue Certificates, Series 1993. Since an escrow account was established for the redemption of this issue, the 1986 bonds will not be included in the debt service requirements for 1994 and subsequent years.

(3) The Capital Improvement Revenue Refunding Certificates, Series 1988 were sold in August, 1988. The first principal and interest payments were made on April 1, 1989. This issue constituted a junior or 1 subordinate lien on the pledged revenues until the senior debt, the Capital Improvement Refunding Revenue Bonds, Series 1986, was refunded in December 1993. The final principal and interest payments for this issue were made on April 1, 1998.

(4) The Capital Improvement Refunding Revenue Certificates, Series 1993 were sold in December 1993.

The first interest payment was made on April 1, 1994, and the first principal payment was made on October 1, 1999. This issue is on a parity with the Capital Improvement Revenue Refunding Certificates, Series 1988 and with the Capital Improvement Revenue Certificates, Series 1995 and Series 2002.

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Total Revenue Available for Debt Debt Service Requirements (2)(3) (4)(5)(6)(7)

Service Principal Interest Total Coverage

$4,303,796 $980,000 $1,201,352 $2,181,352 1.97 4,377,935 1,050,000 1,258,467 2,308,467 1.90 4,450,713 1,120,000 1,322,799 2,442,799 1.82 4,693,016 1,200,000 1,244,399 2,444,399 1.92 4,765,290 1,158,599 1,158,599 4.11 4,851,326 520,000 1,148,418 1,668,4i8 2.91 5,253,422 540,000 1,127,339 1,667,339 3.15 8,739,156 560,000 1,104,895 1,664,895 5.25 8,772,597 585,000 1,341,542 1,926,542 4.55 8,901,118 620,000 1,243,263 1,863,263 4.78 (5) The Capital Improvement Revenue Certificates, Series 1995 were sold in October 1995. The first interest payment was made on April 1, 1996, and the first principal payment was made on October 1, 1999. This issue is on a parity with the Capital Improvement Revenue Certificates, Series 2002 and with the Capital Improvement Refunding Revenue Certificates, Series 2003.

(6) The Capital Improvement Revenue Certificates, Series 2002 were sold in September 2002. The first interest payment occurred on April 1, 2003, and the first principal payment will occur on October 1, 2003. This issue is on a parity with the Capital Improvement Revenue Certificates, Series 1995 and with the Capital Improvement Refunding Revenue Certificates, Series 2003.

(7) The Capital Improvement Refunding Revenue Certificates, Series 2003 were sold in July 2003. The first interest payment will occur on October 1, 2003, and the first principal payment will occur on October 1, 2004. This issue is on a parity with the Capital Improvement Revenue Certificates, Series 1995 and with the Capital Improvement Revenue Certificates, Series 2002.

107

L CITY OF OCALA, FLORIDA SCHEDULE OF OPTIONAL GAS TAX REVENUE BONDS AND 1,

OPTIONAL GAS TAX REFUNDING REVENUE BONDS COVERAGE LAST TEN FISCAL YEARS L Pledged Revenue -

1 Year Six-Cent Optional Gas Tax Debt Service Requirements (1)(2) (3)

Principal Interest Total Coverage L

$595,000 $715,763 $1,310,763 1.58 1995 1996 1997

$2,077,200 2,156,374 2,304,362 615,000 635,000 694,578 670,490 1,309,578 1,305,490 1.65 1.77 It 1998 2,282,798 660,000 642,953 1,302,953 1.75 1999 2,416,976 690,000 612,476 1,302,476 1.86 2000 2,440,994 725,000 578,395 1,303,395 1.87 2001 2,515,737 755,000 541,018 1,296,018 1.94 2002 2003 2004 2,625,636 2,725,114 2,840,647 800,000 200,565 263,374 492,636 1,000,565 263,374 1,862,636 2.02 10.35 1.53 1i 1,370,000 I

(1) The Optional Gas Tax Revenue Bonds, Series 1989 were sold in February, 1989. The first interest payment occurred in June, 1989, and the first principal payment occurred in December, 1990. The outstanding portion of this issue was advance refunded in December, 1992 by the Optional Gas Tax I

Refunding Revenue Bonds, Series 1992. Since an escrow account was established for the redemption (2) of this issue, the 1989 bonds will not be included in the debt service requirements after 1993.

The Optional Gas Tax Refunding Revenue Bonds, Series 1992 were sold in December, 1992. The first I

interest payment occurred in June, 1993, and the first principal payment occurred in December, 1993.

The outstanding portion of this issue was refunded in September, 2002 by the Optional Gas Tax Refunding and Improvement Revenue Bonds, Series 2002 by the Optional Gas Tax Refunding and Improvement Revenue Bonds, Series 2002. Since an escrow account was established for the current I

refunding of this issue, the 1992 bonds will not be included in the debt service requirements after 2002.

(3) The Optional Gas Tax Refunding and Improvement Revenue Bonds, Series 2002 were sold in September, 2002. The first interest payment occurred in April, 2003, and the first principal payment I

occurred in October, 2003.

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CITY OF OCALA, FLORIDA COMPUTATION OF DIRECT AND OVERLAPPING GENERAL OBLIGATION DEBT (1)

SEPTEMBER 30, 2004 Bonds Applicable to City of Ocala Governmental Unit Outstanding Percent"' Amount Marion County Limited Ad Valorem Refunding Tax Bonds, Series 1998 $ 7,980,000 Limited Ad Valorem Refunding Tax Bonds, Series 2003 5,140,000 13,120,000 25.87% $ 3,394,144 Total Overlapping Debt $ 13,120,000 $ 3,394,144 (1) The City of Ocala did -not have any general obligation debt outstanding during the fiscal year ended September 30, 2004.

(2) Represents the fraction of assessed valuation of taxable property in the City of Ocala over the assessed valuation of taxable property in the governmental unit. .

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CITY OF OCALA, FLORIDA MISCELLANEOUS STATISTICAL DATA L

SEPTEMBER 30, 2004 Li Date of Incorporation February 4, 1869 City Charter Adopted Form of Government January 28, 1885 Council/Manager L

Area of City 40.83 square miles 1

Miles of Streets, Sidewalks and Bikepaths 288.96 miles Streets - Paved Streets - Unpaved Sidewalks(1 )

7.64 61.71 miles miles L

Bikepaths 25.47 miles Miles of Sewers Storm 74 miles L

Sanitary Force Main Number of Lift Stations 305.69 miles 78.1 Omiles 98 L

Building Permits (October 2003 - September 2004)

Permits Issued Permit Value (2)(3) 5,708

$167,586,874 L

Fire Protection:

Stations 5 L

Employees - Sworn 116 Employees - Civilian Fire and rescue response time (minutes) 11 4 I Police Protection:

Stations Employees - Sworn 5

157 L

Employees - Civilian 88 Vehicular Patrol Units - Marked Vehicles Vehicular Patrol Units - Motorcycles Vehicular Patrol Units - Other Vehicles 109 5

65 I

Recreation:

Land area (acres) 731 1

Activity centers 9 Pools Playgrounds 2

18 I (1) Includes 11.66 miles of sidewalks installed by the Florida Department of 1 Transportation located inside the City limits.

(2) Excludes 204 permits valued at $492,623 that are hurricane related permits.

(3) Includes plumbing, gas, electrical, water, heating, air conditioning, I

refrigeration, ventilation and building permits. Does not include moving and sign permits.

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CITY OF OCALA, FLORIDA

-DEMOG RAPHIC-STATISTICS-SEPTEMBER 30, 2004 POPULATION - LAST TEN YEARS Year City of Ocala Marion County 1995 43,207 224,612 1996 43,332 229,260 1997 43,630 237,204 1998 44,718 242,357 1999 45,585 249,433 2000 45,943 258,900 2001 46,288 264,277 2002 46,543 271,096 2003 47,028 278,805 2004 47,271 289,901 Source: The City of Ocala Comprehensive Plan - Planning Department.

POPULATION PROJECTIONS (1)

Year Marion County State of Florida

.317,900 18,978,4u0 2015 346,700 20,386,900 2020 375,900 21,807,100 2025 404,200 23,177,700 2030 430,100 24,428,300 Source: 2003 Florida Statistical Abstract, Bureau of Business and Economic Research -

University of Florida, Gainesville. Figures for years prior to year 2010 and subsequent to year 2030 are unavailable.

% POPULATION BY AGE GROUP (1)

Year Marion County State of Florida 0-14 16.9% 18.7%

15-24 10.8% 12.7%

25-44 22.1% 27.0%

45-64 26.2% 24.4%

65 + 24.0% 17.2%

Source: Demographic Estimating Conference, September, 2004, Office of Economic &

Demographic Research, The Florida Legislature (1) Figures are not maintained for individual cities within Marion County.

111

CITY OF OCALA, FLORIDA LIST OF TEN LARGEST TAXPAYERS 2004 TAX ROLL Percent of Total Assessed Assessed City Tax Taxpayer Type of Business Valuation Valuation Bill (1)(2)

1. Sprint-Florida, Inc. Telephone Communications $ 124,898,013 4.95% $ 708,921

2. K-Mart Corporation Department Store/

Distribution Center 56,624,558 2.25% 321,401

3. Marion Community Hospital General Hospital Care 46,295,270 1.84% 262,772

4. Wal-Mart Department Store 37,237,944 1.48% 211,363

5. Paddock Mall Associates Local Shopping Center 26,965,500 1.07% 153,056

6. Clairson International Manufacturer 23,583,567 0.93% 133,860

7. Carlton Arms of Ocala Apartment Complex 15,866,367 0.63% 90,058

8. Gray Lumber Company (Tuscany Apts) Apartment Complex 12,634,035 0.50% 71,711

9. Rolling Greens MHP LP Mobile Home Park 12,404,525 0.49% 70,408

10. C.C. Ocala Joint Venture (Gaitway Plaza) Local Shopping Center 10,564,520 0.42% 59,964 Total Adjusted Value 367,074,299 14.56% 2,083,514 Other Taxpayers 2,154,837,182 85.44% 12,230,856 Total Assessed Value $2,521,911,481 100.00% $ 14,314,370 (1) City of Ocala taxpayers pay City, County, School Board and certain water district levies. Only the City levy is shown here.

(2) Excludes property tax levies of the Downtown Development Districts.

112

CITY OF OCALA, FLORIDA SCHEDULE OF INSURANCE IN FORCE SEPTEMBER 30, 2004 Deductible Self Limit of Company Policy # Type of Coverage Retention Coverage City of Ocala Self-Insured Workers' Compensation - Statutory Midwest Employers 3667-SO-FL Workers' Compensation excess $750,000 Statutory Insurance Company Hartford Life Insurance ETB-1 10402 Police and Firefighters accidental $ 50,000 Company death and dismemberment Statutory

- tHartford Life Insurance ETB-110402 Fresh Pursuit/Emergency $50,000 Company Response Statutory Hartford Life Insurance ETB-110402 Police and Firefighters intentional $ 150,000 Company death and dismemberment Statutory Unum-Provident Life 125543 Employee Life, AD and D - Various as Insurance Company specified in policy City of Ocala Self-Insured Disability Income Replacement - 60% of income Preferred Govemment P KFL1042290003-02 All risk property $100,000 Replacement Insurance Trust (PGIT) Bldg & Contents cost

- Ace Property & Casualty AAPN00972617 Airport Liability - $5,000,000 Insurance Company per occurrence

_ PGIT PKFL1042290003-02 General Uability, including Fire $100,000 $1,000,000 Legal and EMT Liability per person per occurrence

$200,000 per occurrence PGIT PKFL1042290003-02 Public Officials Liability $25,000 $1,000,000 Employer Practices LUability $25,000 per occurrence

- Fidelity & Deposit CCP005813101 Crime Policy including $10,000 $1,000,000 Company of Maryland Employee Dishonesty per occurrence per occurrence PGIT PKFL1042290003-02 Boiler and Machinery $50,000 $20,000,000 limit Indian Harbor/ PEC 000604801 Pollution Liability $50,000 $1,000,000 XL Environmental per occurrence City of Ocala Self-insured Auto Liability (Continued) 113

CITY OF OCALA, FL( RIDAI SCHEDULE OF INSURANCE IN FO'RCE (CONTINUED)

SEPTEMBER 30, 2004 L Self Limit of Company Policy # Type of C:overage Retention Coverage City of Ocala Self-Insured Auto Physical Dar nage - Actual cash  :

value PGIT PKFL1042290003-02 Auto Physical Dar nage, High $100,000 Actual cash l Cost Vehicles value PG IT PKFL1042290003-02 Out of state auto Iilability $100,000 $1,000,000 l per occurrence Blue Cross/Blue 15920 Employee Health ICoverage Fully insured Various as Shield of Florida specified in policy City of Ocala Self-Insured Dental Fully self- $1,000 per l insured person per year Travelers insurance 104145896 Fiduciary Liability $1,000 $1,000,000 Company per claim t Travelers insurance 206800307 Bond, Over-weighl t charge - $ 10,000 Company (landfill)

I Surety Bonds Required by Ordinance Amount City Manager:

Travelers Insurance Co 206894635 $ 95,000 Finance and Administrative Services Director:

Travelers Insurance Co 206500910 $95,000 114

CITY OF OCALA, FLORIDA PROPERTY VALUE, CONSTRUCTION AND BANK DEPOSITS LAST TEN FISCAL YEARS Commercial Residential Bank Deposits Construction (1) Construction (1) (in thousands)

Number Number Savings & Loan Year of Units Value of Units Value Bank(2)(4) Association (3) (4) 1995 72 $ 32,579,580 119 $ 8,439,036 $ 2,134,528 $ 119,237 1996 51 14,222,885 122 9,314,269 2,332,913 1997 55 32,731,058 118 10,547,982 2,391,266 1998 61 21,826,358 208 30,564,248 2,520,364 1999 79 39,962,937 212 19,190,387 2,541,736 409 2000 76 44,932,744 207 22,497,308 2,533,202 2001 73 83,284,180 200 24,970,219 2,732,180 2002 101 33,542,912 131 15,819,218 2,928,964 2003 142 35,568,925 196: 23,630,008 3,200,380 2004 121 41,566,248 376 50,712,584 3,548,000 (1) Obtained from records maintained by the City of Ocala Building, Zoning and Licensing Department.

(2) Obtained by the Florida Bankers Association for 1997 and 1998; Barnett Bank for 1993 through 1996; FDIC web site for 1999 through 2004. Figures shown are for Marion County and represent total bank deposits at September 30 for the years 1994 through 1998; June 30 for 1999 through 2004.

(3) Obtained by Barnett Bank for 1994 through 1996, the Florida Bankers Association for 1997 and 1998, and the FDIC web site for 1999 through 2004. Figures shown are for Marion County and represent total savings and loan association deposits at June 30 for 1999 through 2004, and at September 30 for 1993 through 1998.

(4) The swing in deposits from savings and loan associations to banks represents the purchase/merger of Mid-State Federal Savings and Loan Association by AmSouth Bank and of California Federal Savings and Loan Association by NationsBank during fiscal year 1994, and purchase/merger of Citizens Savings and Loan Association by NationsBank during fiscal year 1996.

115

Li CITY OF OCALA, FLORIDA LI

SUMMARY

OF DEBT SERVICE REQUIREMENTS TO MATURITY ALL BONDED DEBT 2005-2032 L

CAPITAL OPTIONAL IMPROVEMENT REVENUE AND GAS TAX REFUNDING AND ELECTRIC SYSTEM WATER &

SEWER REVENUE AND TOTAL 1'

REFUNDING IMPROVEMENT REFUNDING REFUNDING PRINCIPAL FISCAL YEAR REVENUE CERTIFICATES REVENUE BONDS REVENUE BONDS REVENUE BONDS AND INTEREST 1

2005 $ 2,623,006 $ 1,875,575 $ 2,294,219 $ 7,041,039 $ 13,833,839 2006 2,625,422 1,876,575 2,296,613 7,048,875 13,847,485 2007 2,621,339 1,871,762 2,293,053 7,039,200 13,825,354 2008 2009 2010 2,624,949 2,620,566 2,622,301 1,874,262 1,868,493 1,867,722 7,026,553 7,023,188 7,021,428 11,525,764 11,512,247 11,511,451 I

2011 2,619,366 1,866,910 7,019,132 11,505,408 2012 2,616,724 1,861,622 7,014,887 11,493,233 2013 2,987,668 3,773,228 7,011,839 13,772,735 2014 2,981,831 7,002,484 9,984,315 2015 2,979,965 6,991,236 9,971,201 2016 2,976,563 6,987,139 9,963,702 2017 2018 2019 2,976,625 2,970,033 2,971,727 3,847,187 3,845,775 3,839,625 6,823,812 6,815,808 6,811,352 L

2020 2,046,664 3,838,475 5,885,139 2021 2022 2023 2,040,986 2,045,075 2,039,106 3,836,937 3,837,538 3,840,162 5,877,923 5,882,613 5,879,268 I

2024 3,841,913 3,841,913 2025 2026 2027 3,847,412 3,847,925 3,843,025 3,847,412 3,847,925 3,843,025 I

2028 2029 2030 3,840,513 3,832,012 3,816,575 3,840,513 3,832,012 3,816,575 I

2031 3,796,219 3,796,219 2032 Total $ 49,989,916 $ 18,736,149 $ 6,883,885 3,775,513

$ 145,553,806 $

3,775,513 221,163,756 I1 I

I I

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CITY OF OCALA, FLORIDA STATEMENT OF BONDED DEBT AND INTEREST CAPITAL IMPROVEMENT REVENUE CERTIFICATES, SERIES 1995 SEPTEMBER 30, 2004 In October, 1995, the $5,000,000 Capital Improvement Revenue Certificates, Series 1995 were sold. This issue consisted of $1,335,000 in serial certificates maturing on October 1, 1999 through 2011 and of

$3,665,000 in term certificates maturing on October 1, 2022. As of September 30, 2004, $420,000 of these certificates have been retired. The schedule below shows the actual maturities for the serial certificates and the debt service requirements for the term certificates. The certificates are fully registered and were issued in denominations of $5,000 or any integral multiple thereof. The paying agent and registrar is The Bank of New York.

The Series 1995 Certificates and the interest thereon are payable solely from and secured by a lien upon and pledge of sales tax revenues, franchise fees, occupational license taxes, the guaranteed entitlement portion of state revenue sharing funds, mobile home licenses and court fines and forfeitures. The Series 1995 Certificates are payable on a parity with the City's outstanding Capital Improvement Revenue Certificates, Series 2002, and Capital Improvement Refunding Revenue Certificates, Series 2003.

Proceeds received from the sale of the Series 1995 Certificates were used primarily to finance the costs of acquisition and construction of certain capital improvements in the City.

Principal Interest Interest Fiscal Interest Due Due Due Year Rate Oct 1 Oct 1 Apr 1 Totals 2005 4.600% $ 95,000 $ 121,267 $ 119,082 $ 335,349 2006 4.700% 100,000 119,082 116,732 335,814 2007 4.800% 105,000 116,732 114,212 335,944 2008 4.900% 110,000 114,212 111,517 335,729 2009 5.000% 115,000 111,517 108,642 335,159 2010 5.100% 125,000 108,642 105,454 339,096 2011 5.200% 130,000 105,454 102,074 337,528 2012 5.300% 135,000 102,074 98,497 335,571 2013 98,497 98,497 196,994 2014 98,497 98,497 196,994 2015 98,497 98,497 196,994 2016 98,497 98,497 196,994 2017 98,497 98,497 196,994 2018 98,497 98,497 196,994 2019 98,497 98,497 196,994 2020 5.375% 845,000 98,497 75,787 1,019,284 2021 5.375% 890,000 75,787 51,869 1,017,656 2022 5.375% 940,000 51,869 26,606 1,018,475 2023 5.375% 990,000 26,606 1,016,606 Total $ 4,580,000 $ 1,841,218 $ 1,719,951 $ 8,141,169 117

LI CITY OF OCALA fl STATEMENT OF BONDED DEBT AND INTEREST CAPITAL IMPROVEMENT REVENUE CERTIFICATES, SERIES 2002 SEPTEMBER 30, 2004 L The Capital Improvement Revenue Certificates, Series 2002, dated September 1, 2002, bear interest at 2.00-4.50%, payable semi-annually on April 1 and October 1. As of September 30, 2004, $530,000 of these bonds have been retired. The certificates, which are fully registered and were issued in denominations of $5,000 or L

any integral multiple thereof, consist of $14,340,000 of serial certificates. The paying agent and registrar is The Bank of New York.

The Series 2002 Certificates and the interest thereon are payable solely from and secured by a lien upon and pledge of half-cent sales tax revenues, franchise fees, local communication services tax, occupational license taxes, the guaranteed entitlement portion of state revenue sharing funds, mobile home licenses and court fines and forfeitures. The Series 2002 Certificates are payable on a parity with the City's outstanding Capital Improvement Revenue Certificates, Series 1995, and Capital Improvement Refunding Revenue Certificates, Series 2003.

1 Principal Interest Interest Fiscal Year 2005 Interest Rate 2.000% $

Due Oct 1 550,000 $

Due

- Oct I

.. 248,221 Due Apr 1

$ 242,721 $

Totals 1,040,942 1

2006 2007 2008 2.000%

2.250%

2.500%

560,000 570,000 585,000 242,721 237,121 230,709 237,122 230,709 223,396 1,039,843 1,037,830 1,039,105 I

2009 2010 2011 2.850%

3.000%

3.250%

600,000 615,000 635,000 223,396 214,996 205,771 214,996 205,772 195,453 1,038,392 1,035,768 1,036,224 I

2012 3.350% 655,000 195,453 184,481 1,034,934 2013 2014 3.400%

3.550%

675,000 700,000 184,481 173,006 173,006 160,581 1,032,487 1,033,587 I

2015 3.650% 725,000 160,581 147,350 1,032,931 2016 2017 3.800%

4.000%

750,000 780,000 147,350 133,100 133,100 117,500 1,030,450 1,030,600 t

2018 4.100% 810,000 117,500 100,895 1,028,395 2019 2020 4.200%

4.300%

845,000 880,000 100,895 83,150 83,150 64,230 1,029,045 1,027,380 I 2021 4.400% 915,000 64,230 44,100 1,023,330 2022 2023 4.500%

4.500%

-960,000 1,000,000 44,100 22,500 22,500 1,026,600 1,022,500 I Totals $ 13,810,000 $ 3,029,281 $ 2,781,062 $ 19,620,343 1

Proceeds received from the sale of the Series 2002 Certificates are being used primarily to finance the costs of acquisition and construction of certain capital improvements in the City.

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CITY OF OCALA, FLORIDA STATEMENT OF BONDED DEBT AND INTEREST CAPITAL IMPROVEMENT REFUNDING REVENUE CERTIFICATES, SERIES 2003 SEPTEMBER 30, 2004 The Capital Improvement Refunding Revenue Certificates, Series 2003, dated July 1, 2003, bear interest at 2.00-5.375%, payable semi-annually on April 1 and October 1. The certificates, which are fully registered and were issued in denominations of $5,000 or any integral multiple thereof, consist of $15,310,000 of serial certificates maturing on October 1, 2005 through 2019. As of September 30, 2004, none of these certificates have been retired. The paying agent and registrar is The Bank of New York.

The Series 2003 Certificates and the interest thereon are payable solely from and secured by a lien upon and pledge of sales tax revenues, franchise fees, communications service tax revenues, occupational license taxes, the guaranteed entitlement portion of state revenue sharing funds, mobile home licenses fees and court fines and forfeitures. The Series 2003 Certificates are payable on a parity with the City's outstanding Capital Improvement Revenue Certificates, Series 1995 and the Capital Improvement Revenue Certificates, Series 2002.

Proceeds received from the sale of the Series 2003 Certificates were used primarily to refund the City's Capital Improvement Refunding Revenue Certificates, Series 1993.

Principal Interest Interest Fiscal Interest Due Due Due Year Rate Oct 1 Oct 1 Apr I Totals 2005 2.000% $ 590,000 $ 331,308 $ 325,407 $ 1,246,715 2006 2.000% 605,000 325,408 319,357 1,249,765 2007 2.000% 615,000 319,358 313,207 1,247,565 2008 2.000% 630,000 313,208 306,907 1,250,115 2009 2.125% 640,000 306,908 300,107 1,247,015 2010 2.375% 655,000 300,108 292,329 1,247,437 2011 2.700% 670,000 292,329 283,285 1,245,614 2012 3.000% 690,000 283,284 272,935 1,246,219 2013 5.250% 1,245,000 272,934 240,253 1,758,187 2014 5.250% 1,305,000 240,253 205,997 1,751,250 2015 5.375% 1,375,000 205,997 169,043 1,750,040 2016 5.375% 1,450,000 169,044 130,075 1,749,119 2017 5.375% 1,530,000 130,075 88,956 1,749,031 2018 5.375% 1,610,000 88,956 45,688 1,744,644 2019 5.375% 1,700,000 45,688 1,745,688 Totals $ 15,310,000 $ 3,624,858 $ 3,293,546 $ 22,228,404 119

- l M LI CITY OF OCALA, FLORIDA L STATEMENT OF BONDED DEBT AND INTEREST OPTIONAL GAS TAX REFUNDING AND IMPROVEMENT REVENUE BONDS, SERIES 2002 1 SEPTEMBER 30, 2004 The Optional Gas Tax Refunding and Improvement Revenue Bonds, Series 2002, dated September 1, 2002, 1 bear interest at 2.25-3.55%, payable semi-annually on April 1 and October 1. As of September 30, 2004,

$1,525,000 of these bonds has been retired. The bonds, which are fully registered and were issued in denominations of $5,000 or any integral multiple thereof, consisted of $15,500,000 of serial bonds and

$2,065,000 of term bonds. The paying agent and registrar is The Bank of New York.

L The Series 2002 Bonds and the interest thereon are payable solely from and secured by a lien and pledge of the proceeds of the six-cent local option fuel tax received by the City.

Proceeds received from the sale of the Series 2002 Bonds were used primarily to refund the City's Optional I

Gas Tax Refunding Revenue Bonds, Series 1992, and to finance the cost of acquisition and construction of certain roads and road improvements within the City.

Principal Interest Interest I

Fiscal Interest Due Due Due Year 2005 Rate 2.500%

Oct 1

$ 1,415,000 $

Oct 1 239,131 $

Apr 1 221,444 $

Total 1,875,575 I

2006 2.250% 1,450,000 221,444 205,131 1,876,575 2007 2008 2.500%

2.500%

1,480,000 1,520,000 205,131 186,631 186,631 167,631 1,871,762 1,874,262 1

2009 2.800% 1,555,000 167,631 145,862 1,868,493 2010 2011 3.000%

3.250%

1,600,000 1,650,000 145,861 121,861 121,861 95,049 1,867,722 1,866,910 I

2012 3.350% 1,700,000 95,049 66,573 1,861,622 2013 2013 3.400%

3.550%

1,760,000 1,910,000 66,574 36,654 3,773,228 I

Totals $ 16,040,000 $ 1,449,313 $ 1,246,836 $ 18,736,149 I

• Term Bond due April 1, 2013 I I

I A,

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CITY OF OCALA, FL STATEMENT OF BONDED DEBT AND INTEREST WATER AND SEWER REVENUE BONDS, SERIES 1995 SEPTEMBER 30, 2004 In October 1995, the $5,000,000 Water and Sewer Revenue Bonds, Series 1995 were sold. This issue consisted of $155,000 in serial bonds maturing on October 1, 1997 through 2011 and of $4,845,000 in term bonds maturing on October 1, 2020. As of September 30, 2004, $65,000 of these bonds have been retired.

The schedule below shows the actual maturities for the serial bonds and the debt service requirements for the term bonds. The bonds are fully registered and were issued in denominations of $5,000 or any integral multiple thereof. The paying agent and registrar is The Bank of New York.

The Series 1995 Bonds and the interest thereon are payable solely from and secured by a lien upon the net revenues derived from the operation of the water and sewer system on a parity with the Water and Sewer Refunding Revenue Bonds, Series 1996, the Water and Sewer Revenue Bonds, Series 2001, and the Water and Sewer Refunding Revenue Bonds, Series 2001A.

The proceeds of this issue were used primarily to finance the cost of acquisition and construction of additions, improvements and extensions to the City's water and sewer system.

Principal Interest Interest Fiscal Interest Due Due Due Year Rate Oct 1 Oct 1 Apr 1 Total 2005 4.60% $ 10,000 $ 135,480 $ 135,250 $ 280,730 2006 4.70% 10,000 135,250 135,015 280,265 2007 4.80% 10,000 135,015 134,775 279,790 2008 4.90% 10,000 134,775 134,530 279,305 2009 5.00% 10,000 134,530 134,280 278,810 2010 5.10% 10,000 134,280 134,025 278,305 2011 5.20% 15,000 134,025 133,635 282,660 2012 5.30% 15,000 133,635 133,238 281,873 2013 5.50% 15,000 133,237 132,825 281,062 2014 5.50% 15,000 132,825 132,413 280,238 2015 5.50% 15,000 132,412 132,000 279,412 2016 5.50% 15,000 132,000 131,588 278,588 2017 5.50% 860,000 131,587 107,938 1,099,525 2018 5.50% 905,000 107,937 83,050 1,095,987 2019 5.50% 955,000 83,050 56,788 1,094,838 2020- 5.50% 1,005,000 - 56,787 29,150 1,090,937 2021 5.50% 1,060,000 29,150 1,089,150 Total $ 4,935,000 $ 2,015,975 $ 1,880,500 $ 8,831,475k 121

. la-L CITY OF OCALA, FL L STATEMENT OF BONDED DEBT AND INTEREST WATER AND SEWER REVENUE BONDS, SERIES 1996 SEPTEMBER 30, 2004 L In July 1996, the $12,170,000 Water and Sewer Refunding Revenue Bonds, Series 1996 were sold. This issue consisted of $1,620,000 in serial bonds maturing on October 1, 1997 through 2000 and of $10,550,000 in term bonds maturing on October 1, 2005, 2010 and 2015. As of September 30, 2004, $3,065,000 of these bonds have been retired. The schedule below shows the actual maturities for the serial bonds and the debt service requirements for the term bonds. The bonds are fully registered and were issued in denominations of

$5,000 or any integral multiple thereof. The paying agent and registrar is The Bank of New York.

1 The Series 1996 Bonds and the interest thereon are payable solely from and secured by a lien upon the net revenues derived from the operation of the water and sewer system on a parity with the Water and Sewer Revenue Bonds, Series 1995, the Water and Sewer Revenue Bonds, Series 2001, and the Water and Sewer I

Refunding Revenue Bonds, Series 2001A.

The proceeds of this issue were used primarily for the forward refunding of the City's outstanding Water and Sewer Refunding Revenue Bonds, Series 1988.

I Fiscal Interest Principal Due Interest Due Interest Due I Year Rate Oct 1 Oct 1 Apr 1 Totals 2005 6.00% $ 540,000 $ 261,775 $ 245,575 $ 1,047,350 2006 6.00% 580,000 245,575 228,175 1,053,750 2007 6.00% 610,000 228,175 209,875 1,048,050 2008 6.00% 645,000 209,875 190,525 1,045,400 2009 6.00% 685,000 190,525 169,975 1,045,500 2010 6.00% 725,000 169,975 148,225 1,043,200 2011 6.00% 770,000 148,225 125,125 1,043,350 2012 5.50% 815,000 125,125 102,713 1,042,838 2013 5.50% 860,000 102,712 79,063 1,041,775 2014 5.50% 910,000 79,062 54,038 1,043,100 2015 5.50% 955,000 54,037 27,775 1,036,812 2016 5.50% 1,010,000 27,775 1,037,775 Totals $ 9,105,000 $ 1,842,836 $ 1,581,064 $12,528,900 122 1

CITY OF OCALA, FLORIDA STATEMENT OF BONDED DEBT AND INTEREST WATER AND SEWER REVENUE BONDS, SERIES 2001 SEPTEMBER 30, 2004 In May 2001, the $36,205,000 Water and Sewer Revenue Bonds, Series 2001, were sold. This issue consists of $9,120,000 in serial bonds maturing on October 1, 2016 through 2022 and of $27,085,000 in term bonds maturing on October 1, 2024, 2027 and 2031. The schedule below shows the actual maturities for the serial bonds and the debt service requirements for the term bonds. The paying agent and registrar is The Bank of New York.

The Series 2001 Bonds and the interest thereon are payable solely from and secured by a lien on the net revenues derived from the operation of the City's Water and Sewer System on a parity with the Water and Sewer Revenue Bonds, Series 1995, the Water and Sewer Refunding Revenue Bonds, Series 1996 and the Water and Sewer Refunding Revenue Bonds, Series 2001A.

The proceeds received from the sale of the Series 2001 Bonds were used primarily to finance the cost of acquisition and construction of additions, improvements and extensions to the City's water and sewer system.

Principal Interest Interest Fiscal Interest Due Due Due Year Rate Oct 1 Oct 1 Apr 1 Totals 2005 966,769 $ 966,768 $ 1,933,537 2006 966,769 966,769 1,933,538 2007 966,768 966,769 1,933,537 2008 966,769 966,769 1,933,538 2009 966,769 966,768 1,933,537 2010 966,769 966,769 1,933,538 2011 966,768 966,769 1,933,537 2012 966,769 966,769 1,933,538 2013 966,769 966,768 1,933,537 2014 966,769 966,769 1,933,538 2015 966,768 966,769 1,933,537 2016 966,769 966,769 1,933,538 2017 5.00% $ 835,000 966,769 945,893 2,747,662 2018 5.00% 880,000 945,894 923,894 2,749,788 2019 5.00% 920,000 923,893 900,894 2,744,787 2020- 5.00%1 970,000 900,894 876,644 2,747,-538 2021 5.00% 1,020,000 876,643 851,144 2,747,787 2022 5.00% 2,190,000 851,144 796,394 3,837,538 2023 5.00% 2,305,000 796,394 738,768 3,840,162 2024 5.00% 2,425,000 738,769 678,144 3,841,913 2025 5.00% 2,555,000 678,144 614,268 3,847,412 2026 5.25% 2,690,000 614,269 543,656 3,847,925 2027 5.25% 2,830,000 543,656 469,369 3,843,025 2028 5.25% 2,980,000 469,369 391,144 3,840,513 2029 5.75% 3,140,000 391,143 300,869 3,832,012 2030 5.75% 3,310,000 300,869 205,706 3,816,575 2031 5.75% 3,485,000 205,706 105,513 3,796,219 2032 5.75% 3,670,000 105,513 3,775,513 Totals $ 36,205,000 $ 21,910,294 $ 20,943,525 $ 79,058,819 123

U CITY OF OCALA, FLORIDA L STATEMENT OF BONDED DEBT AND INTEREST WATER AND SEWER REFUNDING REVENUE BONDS, SERIES 2001A SEPTEMBER 30, 2004 L In August 2001, the $39,885,000 Water and Sewer Refunding Revenue Bonds, Series 2001A, were sold. This issue consists of $39,885,000 in serial bonds maturing on October 1, 2002 through 2015. At September 30, 1

2004, $4,380,000 of these bonds have been retired. The schedule below shows the actual maturities for the serial bonds. The bonds are fully registered and were issued in denominations of $5,000 or any integral multiple thereof. The paying agent and registrar is The Bank of New York. I The Series 2001A Bonds and the interest are payable solely from and secured by a lien on the net revenues derived from the operation of the City's Water and Sewer System on a parity with the Water and Sewer Revenue Bonds, Series 1995, the Water and Sewer Refunding Revenue Bonds, Series 1996 and the Water and Sewer Revenue Bonds, Series 2001.

I Proceeds received from the sale of the Series 2001A Bonds were used primarily for the current refunding of the City's Utility Systems Subordinate Refunding Revenue Bonds, Series 1992A. I Principal Interest Interest Fiscal Year Interest Rate Due Oct 1 Due Oct 1 Due Apr 1 Total I

2005 4.000% $ 2,390,000 $ 718,611 $ 670,811 $ 3,779,422 2006 2007 3.250%

3.375%

2,480,000 2,560,000 670,811 630,512 630,511 587,311 3,781,322 3,777,823 I

2008 4.250% 2,650,000 587,311 530,999 3,768,310 2009 2010 3.750%

4.000%

2,755,000 2,865,000 530,999 479,343 479,342 422,042 3,765,341 3,766,385 I

2011 4.000% 2,975,000 422,042 362,543 3,759,585 2012 2013 4.100%

4.200%

3,095,000 3,225,000 362,543 299,095 299,095 231,370 3,756,638 3,755,465 I 2014 4.300% 3,355,000 231,370 159,238 3,745,608 2015 2016 4.400%

5.500%

Totals 3,500,000 3,655,000

$ 35,505,000 159,237 82,238

$ 5,174,112 82,238 3,741,475 3,737,238

$ 45,134,612 t

$ 4,455,500 I

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CITY OF OCALA, FLORIDA STATEMENT OF BONDED DEBT AND INTEREST ELECTRIC SYSTEM REFUNDING REVENUE BONDS, SERIES 2001 SEPTEMBER 30, 2004 In August 2001, the $10,520,000 Electric System Refunding Revenue Bonds, Series 2001 were sold. This issue consisted of $10,520,000 in serial bonds maturing on October 1, 2002 through 2006. As of September 30, 2004, $3,975,000 of these bonds have been retired. The schedule below shows the actual maturities for the serial bonds. . The bonds are fully registered and were issued in denominations of $5,000 or any integral multiple thereof. The paying agent and registrar is The Bank of New York.

The Series 2001 Bonds and the interest thereon are payable solely from and secured by a lien upon the net revenues derived from the operation of the City's electric system.

The proceeds of this issue were used primarily for the current refunding of the City's outstanding Utility Systems Subordinate Refunding Revenue Bonds, Series 1992B.

Principal Interest Interest Fiscal Interest Due Due Due Year Rate Oct 1 Oct 1 Apr 1 Totals 2005 4.000% $ 2,105,000 $ 115,659 $ 73,560 $ 2,294,219 2006 3.250% 2,185,000 73,560 38,053 2,296,613 2007 3.375% 2,255,000 38,053 - 2,293,053 Totals $ 6,545,000 $ 227,272 $ 111,613 $ 6,883,885 125

_ WI l CITY OF OCALA, FLORIDA ANALYSIS OF SEWERAGE SYSTEM CAPITAL IMPROVEMENT FUND ESTABLISHED FOR FLORIDA DEPARTMENT OF ENVIRONMENTAL REGULATION GRANT #621080 The City received grant number 621080 from the State of Florida Department of Environmental Regulation for a portion of the construction of Sewer Treatment Plant #1. One of the requirements of this grant is that the City provide for a sewerage system capital improvement account to accumulate the equivalent future value of the grant amount adjusted for inflationary cost increases upon completion of the grant-related project. In December 1985, the City adopted ordinance #1810, which addresses this subject in section 5. The amount to be accumulated by the City is $6,020,462.40. Grant condition number 23 requires annual certification that the I

sewerage system capital improvement account is maintained in accordance with Section 17-501.610 of the Florida Administrative Code. I The construction of the grant-related project, Sewer Treatment Plant #1, was completed during fiscal year 1988. Since prepayments to the capital improvement fund are allowed, the City started making deposits in fiscal year 1986. During fiscal year 2000, $1,500,000 was withdrawn from this fund for the Water Reclamation Facility #3 project, which is an expansion of the system. During fiscal year 2003, $2,622,798 was withdrawn from this fund for repairs at Water Reclamation Facility #2 and for the sewer portion of various road I

construction projects.

The following schedule shows all activity in the sewerage system capital improvement fund since its inception: I Fiscal Deposits Investment Balance I Year (Withdrawals) Income September 30 1988 $ 301,023.12 $ 50,909.96 $ 972,693.32 1989 301,023.12 91,647.90 1,365,364.34 1990 301,023.12 125,170.01 1,791,557.47 I

1991 301,023.12 142,728.85 2,235,309.44 1992 301,023.12 111,185.27 2,647,517.83 1993 301,023.00 116,575.01 3,065,115.84 1 1994 301,023.00 133,077.65 3,499,216.49 1995 301,023.00 178,917.78 3,979,157.27 1996 301,023.00 232,147.37 4,512,327.64 l 1997 301,023.00 278,526.52 5,091,877.16 1998 301,023.00 412,080.84 5,804,981.00 l 1999 301,023.00 191,600.02 6,297,604.02 2000 (1,500,000.00) 350,778.24 5,148,382.26 2001 - 507,048.67 5,655,430.93 l 2002 - 272,019.10 5,927,450.03 2003 (2,622,798.00) 164,134.56 3,468,786.59 2004 - 45,532.41 3,514,319.00 126 1