CITY OF WEST PALM BEACH, FLORIDA rpts/2016 west palm...CITY OF WEST PALM BEACH, FLORIDA...

CITY OF WEST PALM BEACH, FLORIDA

COMPREHENSIVE ANNUAL FINANCIAL REPORT

for the

FISCAL YEAR ENDED SEPTEMBER 30, 2016

Prepared by:

The Finance Department

Mark A. Parks, Jr., CPA, MBA

Director of Finance

Bruce Cuningham, CPA, MBA

Accounting Manager

CITY OF WEST PALM BEACH, FLORIDA COMPREHENSIVE ANNUAL FINANCIAL REPORT

FOR THE FISCAL YEAR ENDED SEPTEMBER 30, 2016

TABLE OF CONTENTS Page I. INTRODUCTORY SECTION Letter of Transmittal . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . i Certificate of Achievement for Excellence in Financial Reporting . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . viii Organizational Chart . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . ix City Commissioners . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . x List of City Officials . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . xi II. FINANCIAL SECTION Independent Auditors’ Report . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . xii Management’s Discussion and Analysis (Unaudited) . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . xv Basic Financial Statements Government-wide Financial Statements Statement of Net Position . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 1 Statement of Activities . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 2 Fund Financial Statements: Balance Sheet – Governmental Funds . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 3 Reconciliation of the Balance Sheet of Governmental Funds to the Statement of Net Position . . . . . . . . . 5 Statement of Revenues, Expenditures, and Changes in Fund Balances – Governmental Funds . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 6 Reconciliation of the Statement of Revenues, Expenditures, and Changes in Fund Balances of Governmental Funds to the Statement of Activities . . . . . . . . . . . . . . . . . . . . . . . . 8 Statement of Revenues, Expenditures, and Changes in Fund Balance – Budget and Actual – Budgetary Basis - General Fund . . . . . . . . . . . . . . . . . . . . . . . . . . 9 Statement of Revenues, Expenditures, and Changes in Fund Balance – Budget and Actual – Budgetary Basis – City Center CRA Fund . . . . . . . . . . . . . . . . . 10 Statement of Revenues, Expenditures, and Changes in Fund Balance – Budget and Actual – Northwood Pleasant City CRA Fund . . . . . . . . . . . . . . . . . . . . . . 11 Statement of Revenues, Expenditures, and Changes in Fund Balance – Budget and Actual – Capital Bond Fund . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 12 Statement of Net Position – Proprietary Funds . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 13 Statement of Revenues, Expenses, and Changes in Fund Net Position – Proprietary Funds . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 15 Statement of Cash Flows – Proprietary Funds . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 16 Statement of Fiduciary Net Position – Fiduciary Funds . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 20 Statement of Changes in Fiduciary Net Position – Fiduciary Funds . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 21 Notes to the Financial Statements . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 22 Required Supplementary Information (Unaudited) Schedule of Changes in the City’s Net Pension Liability and Related Ratios . . . . . . . . . . . . . . . . . . . . . . . . . 83 Schedule of City’s Contributions …. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 84 Notes to the Schedule of City’s Contributions . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 85 Schedule of Funding Progress – OPEB Trust Fund . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 86



TABLE OF CONTENTS (Continued)

Page II. FINANCIAL SECTION – CONTINUED Combining and Individual Fund Statements and Schedules General Fund Schedule of Revenues – Budget and Actual – Non GAAP Budgetary Basis . . . . . . . . . . . . . . . . . . . . . . . . 88 Schedule of Expenditures – Budget and Actual – Non GAAP Budgetary Basis . . . . . . . . . . . . . . . . . . . . . 92 Schedule of Expenditures and Encumbrances – Summary . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 95 Other Governmental Funds Combining Balance Sheet – Non-Major Governmental Funds . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 99 Combining Balance Sheet – Non-Major Special Revenue Funds . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 100 Combining Balance Sheet – Non-Major Debt Service Funds . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 104 Combining Balance Sheet – Non-Major Capital Project Funds . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 105 Combining Statement of Revenues, Expenditures, and Changes in Fund Balances – Non-Major Governmental Funds . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 107 Combining Statement of Revenues, Expenditures, and Changes in Fund Balances – Non-Major Special Revenue Funds . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 108 Combining Statement of Revenues, Expenditures, and Changes in Fund Balances – Non-Major Debt Service Funds . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 112 Combining Statement of Revenues, Expenditures, and Changes in Fund Balances – Non-Major Capital Project Funds . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 113 Schedules of Revenues, Expenditures, and Changes in Fund Balance – Budget and Actual:

Non-Major Funds Local Gas Tax Fund . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 115 Mandel Library Fund . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 116

Impact Fees Western Expansion Fund . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 117 Community Development Fund . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 118 Neighborhood Stabilization Fund . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 119 CDBG Revolving Fund. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 120 Home Program Fund . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 121 HOPWA Fund . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 122 SHIP Program Fund . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 123 Financial Assistance Fund . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 124 Permits Fund . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 125 Fire Assessment Fee Fund . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 126 Red Light Camera Fund . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 127 Waterfront District Fund . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 128 Grant Project Fund . . . . . . . . . . . . . . .. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 129 Cemetery Fund . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 130 Miscellaneous Trust Fund . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 131 Special Obligation Bond Series 2006 Fund . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 132 2005 General Obligation Bond Fund . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 133


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(Continued) Page II. FINANCIAL SECTION – CONTINUED Other Capital Projects Fund . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 134 Art in Public Places Fund . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 135 City Commons and Waterfront Fund . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 136 NPCCRA Series 2005A Construction Fund . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 137 NPCCRA Series 2005B Construction Fund . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 138 Capital Grants Project Fund . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 139 Land Acquisition Fund . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 140 Non Major Enterprise Funds Combining Statement of Net Position . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 143 Combining Statement of Revenues, Expenses and Changes in Net Position . . . . . . . . . . . . . . . . . . . . . . . 145 Combining Statement of Cash Flows . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 146 Internal Service Funds Combining Statement of Net Position . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 150 Combining Statement of Revenues, Expenses and Changes in the Net Position . . . . . . . . . . . . . . . . . . . . 152 Combining Statement of Cash Flows . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 154 Fiduciary Funds Combining Statement of Fiduciary Net Position . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 160 Combining Statement of Changes in Fiduciary Net Position . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 161 III. STATISTICAL INFORMATION (Unaudited) Financial Trends Net Position by Component . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . S-1 Changes in Net Position . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . S-2 Fund Balances of Governmental Funds . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . S-4 Changes in Fund Balances of Governmental Funds . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . S-5

bcuningham

Typewritten Text


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(Continued) III. STATISTICAL INFORMATION (continued) Page Revenue Capacity Governmental Revenues by Source - GAAP Basis . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . S-6 Government Expenditures by Function - GAAP Basis . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . S-8 General Fund - Unreserved Fund Balance - Compared to Annual Expenditures - GAAP Basis . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . S-10 General Fund -Tax Revenues by Source . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . S-11 General Fund Franchise Revenues by Source . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . S-12 Property Tax Levies and Collections . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . S-13 Taxable Values and Gross Assessed Value of Property . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . S-15 2016 Principal Taxpayers . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . S-16 Debt Capacity Outstanding Debt Per Capita by Type and General Obligation Debt Ratios . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . S-17 Computation of Direct and Overlapping Debt . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . S-18 Computation of Legal Debt Margin . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . S-19 Schedule of Revenue Bond Coverage . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . S-20 Demographic and Economic Information Demographic Statistics . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . S-21 Principal Employers . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . S-22 Operating Information Property Value and Construction . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . S-23 Miscellaneous Statistical Data . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . S-24 IV. CONTINUING DEBT DISCLOSURE (Unaudited) Public Service Tax Bonds Event Notices . . . . . . . . . . . . . . . . . . . . . . . . . .. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . C-1 Special Obligation Bonds, Series 2006 Non - Ad Valorem Revenue Collections by Source . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . C-2 Outstanding Non – Ad Valorem Revenues, Debt . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . C-4 Historical Non – Ad Valorem Revenues, Debt Service and Coverage

Assuming Debt Service Payments were not made by other Dedicated Revenue Sources . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . C-5 Accounting for Debt Service Payments made by other Dedicated Revenue Sources . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . C-6




IV. CONTINUING DEBT DISCLOSURE (continued) Page Utility System Revenue Bonds Customers and Sales Data . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . C-8 Wastewater Flows (MGD) . . . . . . . . . . . . . . . . . . . . .. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . C-9 Summary of Monthly Water and Wastewater Rates . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . C-10 Summary of Water Capacity Charges, Customer Deposits, and Meter Installations . . . . . . . . . . . . . . C-11 Summary of Monthly Stormwater Rates . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . C-12 Water System Customer Growth. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . C-13 Stormwater System Customer Growth. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . C-14 Wastewater System Customer Growth . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . C-15 Utility System Historical Debt Coverage Analysis . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . C-16 Utility System Historical Schedule of Net Cash Flow, Debt Service and Debt Coverage . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . C-17 Tax Increment Revenue Bonds (NPCCRA), Series 2006 Historical NPCCRA Tax Increment Revenues . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . C-18 Historical NPCCRA Real Property Assessed Values . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . C-19 Historical NPCCRA New Construction Taxable Values . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . C-20 Historical NPCCRA Financials . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . C-21 Historical NPCCRA Debt Service . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . C-22 Historical NPCCRA Growth . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . C-23 NPCCRA Principal Taxpayers . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . C-24 NPCCRA Principal Developments . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . C-25 Historical Millage Rates . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . C-26 Tax Increment Revenue Bonds (CCCRA), Series 2006 Historical CCCRA Tax Increment Revenues . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . C-27 Historical CCCRA Debt Service . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . C-28 Historical CCCRA Real Property Assessed Values West Palm Beach and Palm Beach County . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . C-30 Historical CCCRA Real Property Assessed Values . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . C-31 Historical CCCRA New Construction Taxable Values . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . C-32 CCCRA Principal Taxpayers . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . C-33 CCCRA Principal Developments . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . C-34 Historical Millage Rates . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . C-35 General Obligation Bonds Taxable Values and Gross Assessed Value of Property . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . C-36 Property Tax Levies and Collections . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . C-37 Principal Taxpayers . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . C-38 Property Tax Rates Direct and Overlapping Governments . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . C-39 Ratio of Net General Bonded Debt and Notes Payable . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . C-41 Computation of Direct and Overlapping Debt . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . C-43 Ratio of Annual Debt Service for General Bonded Debt to General Fund Expenditures . . . . . . . . . . C-44




V. REPORTING SECTION Page Independent Auditors’ 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 . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . R-1 Independent Auditors’ Report on Compliance for Each Major Federal Program and Report on Internal Control Over Compliance required by Uniform Guidance . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . R-3 Schedule of Expenditures of Federal Awards . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . R-5 Notes to Schedules of Expenditures of Federal Awards . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . R-7 Schedule of Findings and Questioned Costs . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . R-8 Summary Schedule of Prior Year Audit Findings . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . R-12 Management Letter in Accordance with the Rules of the Auditor General of the State of Florida . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . R-13 Independent Accountant’s Report on Compliance Pursuant to Section 218.415 Florida Statutes . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . R-24 Corrective Action Plan for Findings Related to Grants . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . R-25

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May 30, 2017 Mayor Jeri Muoio, City Commissioners and Citizens Of the City of West Palm Beach, Florida Ladies and Gentlemen: It is our pleasure to submit this Comprehensive Annual Financial Report for the City of West Palm Beach, Florida, (the “City”) for the fiscal year ended September 30, 2016. The organization, form and contents of this report plus the accompanying financial statements and statistical tables are formulated in accordance with the principles prescribed by the Governmental Accounting Standards Board, the American Institute of Certified Public Accountants, the State of Florida, the City Code of Ordinances and the Government Finance Officers Association. This document also includes the City's continuing disclosure information as required by Securities and Exchange Commission rule 15c2-12. Generally accepted accounting principles (“GAAP”) require that management provide a narrative introduction, overview and analysis to

accompany the basic financial statements in the form of Management’s Discussion and Analysis (“MD&A”). This letter of transmittal is designed to complement the MD&A and should be read in conjunction with it. The City's MD&A can be found in this report immediately following the Independent Auditors’ Report. The staff of the Finance Department prepared this report. Responsibility for both the accuracy of the data and the completeness and fairness of the presentation, including all disclosures, rests with City management. To the best of our knowledge and belief, the data as presented is accurate in all material aspects; the information is presented in a manner designed to fairly set forth the financial position and results of operations of the City as measured by the financial activity of its various funds. All disclosures necessary to enable the reader to gain

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an understanding of the City’s financial affairs are included. REPORTING ENTITY AND ORGANIZATION The City of West Palm Beach was incorporated in 1894 and has operated under a strong Mayor form of government since 1991. The City Commission consists of five elected officials who are responsible for enacting the ordinances and resolutions that govern the City. The Mayor is the elected Chief Executive Officer of the City and appoints the City Administrator, Deputy and Assistant Administrators, City Attorney and Department Directors. The City of West Palm Beach provides its constituents with a full complement of public services including, but not limited to public safety, public works, parks and recreation, construction services, housing and community development, library, and community events. All transactions required to support City services are reflected in this report. This report includes all funds that are controlled by, or are dependent on the City Commission. Additionally, the activities of certain entities for which the City exercises oversight responsibility or financial accountability have been included in this report. The City Commission and Mayor sit as the Board of the West Palm Beach Community Redevelopment Agency (CRA) and the West Palm Beach Golf Commission; accordingly, these activities are included in the reporting entity and reflected in this report. The West Palm Beach Housing Authority and the West Palm Beach Downtown Development Authority have not been included in this report. Note A in the Notes to the Financial Statements lists the specific criteria used for establishing oversight responsibility.

ECONOMIC CONDITIONS AND OUTLOOK For the fourth time in a row, the City’s tax base grew, increasing 10.2% from $9.9 to $11.0 billion. While still 13% below the City’s peak value of $12.7 billion from Fiscal Year 2007/2008, the continued increases are a strong signal that the City’s economic future is beginning to improve. As a backstop to the City’s economic improvement, the State of Florida’s economy is expected to expand at an annual rate of 3.2% through 2018, with incomes rising at a 4.0% annual rate, according to the University of Central Florida’s Institute for Economic competiveness. While the improving economy has helped to put the City on a stronger financial footing, there are still several financial challenges that remain. A report from Florida’s Office of Economic and Demographic Research shows that while the economy is showing progress, it will take a few more years to climb completely out of the hole left by the recession. At the end of our fiscal year, the national economy was volatile due to foreign influences. Volatility in the stock market was also partly due to the Fed’s dovishness regarding the increasing of the Fed Rate. Energy prices also caused volatility. Due to the volatility, the City uses a ten year financial model to evaluate potential changes in property valuation, population, interest rate risks, and a multitude of factors in order to be prepared for an economic downturn.

Housing prices are steadily increasing in the nation overall, at a rate of nearly 6.2 percent over the previous year, after a deep slide following the housing-fueled Great Recession.

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Home prices grew by 10.1 percent year-over-year at the end of 2016 in West Palm Beach.

At the City level, improvements in the economy have had an impact on the City’s revenues. For the second year in a row ad valorem tax revenues have increased in FY2015 and FY2016 by $7.85 million and $4.65 million, respectively. To overcome these obstacles, the City has remained diligent in providing the residents with the services they need in the most cost efficient manner possible. Striving to meet the goal of maintaining services without raising taxes the 2016/2017 budget was achieved by a series of revenue enhancements including maintaining the current millage rate, generating new user fees, and improving collections on outstanding amounts owed to the City. The result was a balanced budget generating $170.9 million in revenues offset by $170.9 in expenditures and transfers. This is a net 4.8% increase over the prior year budget, but still well below the City’s peak budget of $189 million in 2007. FY 2016 General Fund Balance remains strong at $41.0 million or 29% of expenditures. The City has also been very careful to not overextend itself with long term debt. Financial prudence has been rewarded by the credit rating agencies that provided the City with an overall bond rating of AA. Based on current growth projections, West Palm Beach is expected to remain Palm Beach County’s largest city. While having a positive impact in terms of potential economic development, it also presents significant challenges to the City. In order to maintain the present level of services, particularly in the areas of public safety and downtown

revitalization, the City must continue to explore alternative revenue sources and user fees, seek ways to maximize its current revenue sources, improve its operational efficiency, develop public/public partnerships, and look to eliminate or reduce non-essential services to the community. MAJOR INITIATIVES The City’s Mission is “to preserve and enhance the quality of life through providing efficient, effective community services”. To aid in the achievement of the stated Mission, the City has established a Vision Statement along with six guiding principles. The City’s priorities guide activities and decision making with the ultimate goal being the continued achievement of the stated Vision and Mission statements. Strategic Planning: The City is currently in the fifth year of implementing a comprehensive strategic plan. This process involves identifying each of the most critical short and long term needs that the City has and implementing specific plans to accomplish those goals. As part of this process, the City has developed a long term financial and capital planning model that helps identify funding to ensure that these plans can not only be achieved, but also paid for. The City has continued to focus on the City’s future over the next 19 years. Defining 2017 – 2035 will provide an opportunity for in-depth public involvement. The existing Strategic Plan will be enhanced creating more transparency on the City’s goals and strategic priorities. Economic Development: Economic Development must play a key role in the growth of our City. Finding

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ways to encourage growth, attract new industries to the City, and retain and expand our existing businesses is critical in order for us to maintain the existing service levels we provide to the community. In FY 2014/15 the City unveiled a new Economic Development Plan. It includes several economic incentives designed to encourage business investment and job growth across the City. In FY 2015/16 the City placed on the ballot the opportunity for the City Commission to have the authority to offer additional tax incentives to entrepreneurs who bring new businesses to the City. The number of requests for emergency services continues to grow. During calendar year 2015, the Department responded to 25,114 emergency incidents and the estimate for 2016 is over 25,300. Additionally, the demand for, and complexity of, mandated fire-safety inspections continues to increase.

The City has seen a decrease in violent crimes and property crimes in the last ten years. To combat crime and to better protect our neighborhoods, our Chief of Police has continued a number of new Intelligence Led Policing initiatives including expansion of the Community Response and Gang/Juvenile units. The goal of these initiatives is to address quality of life issues and build relationships and trust within the community. The City has completed the installation of a new state of the art radio system and improvements to the surveillance system that will help deter and assist with investigations. The Department is also working to improve its recruiting and retention efforts by the creation of a Professional Standards Unit. The fruits of our efforts are a Citizen Survey that states 93% of our residents feel safe in their neighborhoods and 82% say they feel safe at night.

While these services are vital to ensure the safety of our city, it is worth pointing out that the police and fire/EMS budgets account for 54% of the entire General Fund budget. More importantly the $92.9 million we spend on public safety is approximately $24.3 million more than the City generates in total property taxes. Given the continued growth in the City’s population and the tremendous demand that growth creates for parks, transportation, recreation, and other services, it is becoming extremely difficult to continue spending at this level for public safety. Going forward, we must find ways to be more efficient in providing public safety to our community. This will include looking at more jointly funded projects with the Sheriff’s office and other neighboring law enforcement agencies, increased community involvement, such as fire prevention seminars and more resident participation programs and the better use of technology driven solutions. Information Technology: In Fiscal Year 2015/16, the City entered into a lease purchase agreement in the amount of $5 million to replace most of the City’s computer infrastructure. This will bring the City IT infrastructure up to current standards and prevent disruptions in service. In addition to the aforementioned lease, the City also received bond funds in the amounts of $40 million dollars for infrastructure, $6 million of which will be utilized for IT to continue to upgrade systems for efficiency. FINANCIAL INFORMATION ACCOUNTING AND ADMINISTRATIVE CONTROLS City management is responsible for establishing and maintaining an internal control structure which is designed to ensure that the assets of the City are

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protected from loss, theft, or misuse. Furthermore, management ensures that accounting data is adequate for the preparation of financial statements in conformity with accounting principles generally accepted in the United States of America. Internal accounting controls are designed to provide reasonable but not absolute assurance regarding the safeguarding of assets against loss from unauthorized use or disposition. The controls are also intended to provide assurance as to the reliability of financial records as related to the preparation of financial statements and accountability for assets. The concept of reasonable assurance recognizes that the cost of a control should not exceed the benefits likely to be derived and that the evaluation of costs and benefits requires estimates and judgments by management. In addition to the examination of controls performed by members of the Finance Department, the City's internal auditors continually review and assess the soundness and adequacy of all the accounting and budgetary aspects of the City's financial system. Financial transactions and related data are examined for accuracy, completeness and authorization. Furthermore, data processing applications and systems are analyzed to ensure that necessary controls are in effect. All internal control evaluations occur within the above framework. We believe the current internal accounting controls existing for the City of West Palm Beach adequately safeguard assets. In addition to these internal controls, annual financial audits are performed by independent certified public accountants. BUDGETARY CONTROLS To ensure compliance with legal provisions contained in the annual

appropriated budget which is approved by the City Commission, the City also maintains budgetary controls. Annual budgets are legally adopted for activities of the general fund, certain special revenue funds, capital projects funds and debt service funds. Without Commission approval, expenditures may not legally exceed appropriations at the department level. Administrative controls are exercised at the category level for current expenditures and at the line item level for capital outlay. Encumbrance accounting is utilized in governmental funds in order to reserve the encumbered portion of the appropriation. CASH MANAGEMENT The City’s short-term liquid cash during the year was invested in U.S. Government Securities and Federal agency securities, U.S. Government securities held under repurchase agreements, corporate bonds, mortgage backed securities and cash. Although one of the City’s investment objectives is to earn interest income on short-term cash, the investment policy specifically requires that safety and liquidity are the most important standards of the policy and funds must be available when needed. Accordingly, deposits are either insured by federal depository insurance or collateralized in a pool as defined by Florida Statute 280. OTHER INFORMATION Independent Audit Florida Statutes and City Code of Ordinances require that an annual financial audit be performed by independent certified public accountants. This year the audit was performed by RSM US, LLP. In addition to meeting the requirements set forth in State statutes and City ordinances, the audit was designed to meet the federal requirements of the

Sirigle Audit Act of 1984 as amended, and the related Uniform Guidance. Additionally, the audit was designed to meet the requirements of Chapter 10. 550 of the Rules of the Florida Auditor General. The independent auditors' report is included in the financial section of the report.

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 West Palm Beach for its Comprehensive Annual Financial Report (CAFR) for the fiscal year ended September 30, 2015. The Certificate of Achievement is a prestigious national award recognizing conformance with the highest standards for preparation of state and local government financial reports. In order to be awarded a Certificate of Achievement, a government unit must publish an easily readable and efficiently organized comprehensive annual financial report, whose contents conform to program standards. As such, the CAFR must satisfy both generally accepted accounting principles and applicable legal requirements.

A Certificate of Achievement is valid for a period of one year only. The City of West Palm Beach has received a Certificate of Achievement for the last thirty-seven consecutive years.

We believe our current report continues to conform to the Certificate of Achievement program requirements, and we are submitting it to the GFOA.

ACKNOWLEDGEMENTS

This report represents countless hours of preparation. Many individuals are responsible for its completion. The utmost appreciation is extended to the many City employees throughout the

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organization who maintain the daily financial records upon which this report is based. Special recognition is given to the Accounting Division and other Finance Department employees (Bruce Cuningham, Rick Weaver, Steve Hoffmann, Jeanette Haynes, Tsiege Marineau, Silvia Mora, Brenda Keating, Dathan Griffiths and Ben Couden) who worked diligently to ensure the timeliness and accuracy of the report.

Respectfully submitted,

Mark A. Parks, Jr., CPA, MBA Chief Financial Officer

Citizens of West Palm Beach

City Commission

Internal Auditor

Mayor

City Administrator

Deputy City Administrator

Human Resources Department

City Clerk

Purchasing Department

Library Department

Parks & Recreation Department

General Services Department

City Attorney Department

Finance Department

Assistant City Administrator

Public Utilities Department

Parking Systems

Engineering

Public Works

Police Department

Fire Department

Information Technology Department

Development Services Department

Housing & Community Development Department

Golf CommissionCommunity

Redevelopment Agency

City of West Palm Beach Elected Officials

Mayor:

Jeri Muoio

District 5

Commissioner:

Shanon Materio

President

District 3

Commissioner:

Paula Ryan

District 4

Commissioner:

Keith James

District 1

Commissioner:

Sylvia Moffett

District 2

Commissioner:

Cory Michael Neering

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City of West Palm Beach, Florida Mayor-Commission Form of Government

September 30, 2016

Mayor

Jeri Muoio, PhD

City Administrator

Jeffery L. Green, CPA

Deputy City Administrator

Dorritt M. Miller, CPA

Assistant City Administrator

Scott D. Kelly, PE

City Attorney Kimberly L. Rothenburg

Development Services Director Richard E. Greene

Engineering Director Kevin Volbrecht

Finance Director Mark A. Parks, Jr.

Fire Chief Daniel R. Hanes

Housing and Community Development Director Armando Fana

Human Resources Director Jose Luis Rodriguez

Information Technology Director Christine Brevik

Internal Auditor Roger Strout

Library Director Christopher T. Murray

Parks & Recreation Director Leah Rockwell

Parking System Administrator Vacant

Police Chief Bryan A. Kummerlen

Procurement Director Festus F. Hayden

Public Utilities Director Poonam K. Kalkat

Public Works Director Peter A. Bieniek

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Independent Auditor’s Report

To the Honorable Mayor and Members of the City Commission City of West Palm Beach, Florida

Report on the Financial Statements We have audited the accompanying financial statements of the governmental activities, the business-type activities, each major fund, and the aggregate remaining fund information of the City of West Palm Beach, Florida (the City), as of and for the year ended September 30, 2016, and the related notes to the financial statements, which collectively comprise the City’s basic financial statements as listed in the table of contents.

Management’s Responsibility for the Financial Statements Management is responsible for the preparation and fair presentation of these financial statements in accordance with accounting principles generally accepted in the United States of America; this includes the design, implementation and maintenance of internal control relevant to the preparation and fair presentation of financial statements that are free from material misstatement, whether due to fraud or error.

Auditor’s Responsibility Our responsibility is to express opinions on these financial statements based on our audit. We did not audit the financial statements of the Firefighters’ Pension Fund, the Police Pension Fund and the Restated Employees’ Defined Benefit Retirement System, which represent 80% of the assets/deferred outflows, 86% of the fund balance/net position and 56% of the revenues/additions of the aggregate remaining fund information. Those financial statements were audited by other auditors whose reports have been furnished to us, and our opinion, insofar as it relates to the amounts included for the Firefighters’ Pension Fund, the Police Pension Fund, and the Restated Employees’ Defined Benefit Retirement System are based upon the reports of the other auditors. We conducted our audit in accordance with auditing standards generally accepted in the United States of America and the standards applicable to financial audits contained in Government Auditing Standards, issued by the Comptroller General of the United States. Those standards require that we plan and perform the audit to obtain reasonable assurance about whether the financial statements are free from material misstatement. The financial statements of the Firefighters' Pension Fund and the Police Pension Fund were not audited in accordance with Government Auditing Standards.

An audit involves performing procedures to obtain audit evidence about the amounts and disclosures in the financial statements. The procedures selected depend on the auditor’s judgment, including the assessment of the risks of material misstatement of the financial statements, whether due to fraud or error. In making those risk assessments, the auditor considers internal control relevant to the entity’s preparation and fair presentation of the financial statements in order to design audit procedures that are appropriate in the circumstances, but not for the purpose of expressing an opinion on the effectiveness of the entity’s internal control. Accordingly, we express no such opinion. An audit also includes evaluating the appropriateness of accounting policies used and the reasonableness of significant accounting estimates made by management, as well as evaluating the overall presentation of the financial statements.

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We believe that the audit evidence we have obtained is sufficient and appropriate to provide a basis for our audit opinions.

Opinions In our opinion, based on our audit and the reports of other auditors, 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, 2016, and the respective changes in financial position and, where applicable, cash flows thereof and the respective budgetary comparison for the general fund, community redevelopment agency fund, and the Northwood/Pleasant City community redevelopment agency fund for the year then ended in accordance with accounting principles generally accepted in the United States of America.

Other Matters Required Supplementary Information Accounting principles generally accepted in the United States of America require that the Management’s Discussion and Analysis, schedules of changes in the city’s net pension liability and related ratios, schedules of city’s contributions, the notes to the schedule of city’s contributions, schedule of funding progress OPEB Trust Fund, be presented to supplement the basic financial statements. Such information, although not a part of the basic financial statements, is required by the Governmental Accounting Standards Board who considers it to be an essential part of financial reporting for placing the basic financial statements in an appropriate operational, economic, or historical context. We have applied certain limited procedures to the required supplementary information in accordance with auditing standards generally accepted in the United States of America, which consisted of inquiries of management about the methods of preparing the information and comparing the information for consistency with management’s responses to our inquiries, the basic financial statements, and other knowledge we obtained during our audit of the basic financial statements. We do not express an opinion or provide any assurance on the information because the limited procedures do not provide us with sufficient evidence to express an opinion or provide any assurance.

Supplementary and Other Information Our audit was conducted for the purpose of forming opinions on the financial statements that collectively comprise the City’s basic financial statements. The combining and individual fund financial statements and schedules and the schedule of expenditures of federal awards, as required by the Uniform Guidance and the introductory, statistical, and continuing debt disclosure sections are presented for purposes of additional analysis and are not a required part of the basic financial statements.

The combining and individual fund statements and schedules and the schedule of expenditures of federal awards are the responsibility of management and were derived from and relate directly to the underlying accounting and other records used to prepare the basic financial statements. Such information has been subjected to the auditing procedures applied in the audit of the basic financial statements and certain additional procedures, including comparing and reconciling such information directly to the underlying accounting and other records used to prepare the basic financial statements or to the basic financial statements themselves, and other additional procedures in accordance with auditing standards generally accepted in the United States of America by us and the other auditors. In our opinion, based on our audit, the procedures performed as described above, and the reports of the other auditors, the combining and individual fund statements and schedules and the schedule of expenditures of federal awards, are fairly stated, in all material respects, in relation to the basic financial statements as a whole.

The introductory, statistical, and continuing debt disclosure sections have not been subjected to the auditing procedures applied in the audit of the basic financial statements, and accordingly, we do not express an opinion or provide any assurance on them.

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Other Reporting Required by Government Auditing Standards In accordance with Government Auditing Standards, we have also issued, under separate cover, our report dated May 30, 2017, on our consideration of the City’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 in considering the City’s internal control over financial reporting and compliance.

West Palm Beach, Florida May 30, 2017

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Management's Discussion and Analysis

(Unaudited)

As management of the City of West Palm Beach (the “City”), we offer readers of the City’s financial statements this narrative overview and analysis of the financial activities of the City for the fiscal year ended September 30, 2016.

Financial Highlights

The assets and deferred outflows of resources of the City exceeded its liabilities and deferred inflows at the close of fiscal 2016 by $640 million (net position). Of this amount, $82 million represents unrestricted net position, which may be used to meet the City’s ongoing obligations to citizens and creditors.

The City’s total net position increased $35 million or 5.8%, due in large part to Water and Sewer’s excess of revenues over expenses.

The City's total of bonds, notes and leases increased by $69 million, from $407 million to $476 million, or approximately 16%, during the current fiscal year. The issuance of the Special Obligation Bonds, Series 2016 A (pension funding), B (parks and roads) and C (refunding) raised just over $120 million.

Total spending for all City governmental activities was $193 million, down $3 million from last year. Expenditures for the largest governmental activities were general government ($25.3 million), police ($65.5 million), fire ($34.2 million), engineering services and public works ($7.5 million), economic environment ($20.5 million), health and sanitation ($11.0 million), and leisure services ($21.0).

At the end of fiscal 2016, the total of the committed, assigned, and unassigned components of fund balance for the General Fund was $34.2 million, or approximately 24.5% of General Fund expenditures. The General Fund balance also included $13.7 million committed for emergencies (10% of adjusted operating revenues as required by City ordinance) and another $6.8 million of nonspendable balances.

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 are comprised of four components: 1) government-wide financial statements, 2) fund financial statements, 3) notes to the financial statements, and 4) required supplementary information. In addition to the basic financial statements, this report contains other supplementary information.

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.

The Statement of Net Position presents financial information on all of the City’s assets, liabilities, and deferred inflows/outflows of resources, with the difference reported as net position. Over time, increases or decreases in net position may serve as a useful indicator of whether the financial position of the City is improving or deteriorating.

The Statement of Activities presents information about how the City’s net position changed during the most recent fiscal year. All changes in net position are reported as soon as the underlying event giving

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rise to the change occurs, regardless of the timing of the related cash flows. Thus, revenues and expenses are reported for some items that will only result in cash flows in future fiscal periods (e.g., uncollected taxes and earned but unused vacation leave).

The Statement of Net Position and the Statement of Activities divide the City into the following two classes of activities:

Governmental activities – City services principally supported by taxes and intergovernmental revenues are reported here, including general government, community events, community and economic development, planning and zoning, code enforcement, building permits, police, fire, public works, federal housing programs, engineering services, health and sanitation, library, parks and recreation, downtown redevelopment and Northwood redevelopment.

Business-type activities – City services for which fees are collected from the public are reported here. These services include water and sewer, storm water, parking and golf course.

Fund Financial Statements. A fund is a grouping of related accounts used to maintain control over resources that have been segregated for specific activities or objectives. The City, 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 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. Reporting for these funds focuses on how money flows into and out of funds and the balances left at year-end that are available for spending. The modified accrual basis of accounting is used to report these funds and generally measures only current financial resources (essentially cash and other assets that can readily be converted to cash). The governmental fund statements provide a detailed short-term view of the City’s operations and the services it provides. Governmental fund statements report changes in the quantity of resources available for spending in the near future. To facilitate comparison between the two presentations, both the governmental fund balance sheet and the governmental fund statement of revenues, expenditures and changes in fund balances are accompanied by reconciliations to the government-wide statements.

The City adopts an annual appropriated budget for most governmental funds. To demonstrate compliance with this budget, a budgetary comparison statement has been provided in the basic financial statements for the General Fund, the Community Redevelopment Agency Fund, the Northwood/Pleasant City CRA Fund, and the 2016 Capital Bond Fund.

Proprietary Funds. The City maintains two types of proprietary funds. Enterprise funds are used to report the same functions presented as business-type activities in the government-wide financial statements, and these funds primarily serve the public. The City uses enterprise funds to account for its water and sewer utility system, storm water utility system, parking system, and the golf course. Internal service funds are an accounting device used to accumulate and allocate costs internally among the City’s various functions. These funds primarily serve the City’s departments. The City uses separate internal service funds to account for its information systems, workers’ compensation, self-insurance program, employee health and life insurance benefits, fleet maintenance activities, and fleet and technology replacement activities. Because all of these services predominantly benefit governmental rather than business-type functions, the assets and liabilities of these funds have been included within the governmental activities column of the government-wide Statement of Net Position.

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Proprietary fund financial statements provide the same type of information as the government-wide financial statements, but in more detail. The financial statements provide separate information for the water and sewer system and the storm water system, both of which are considered major funds of the City. The parking system and the golf course are aggregated as non-major enterprise funds. All internal service funds are combined into a single, aggregated presentation in the proprietary fund financial statements.

Fiduciary Funds. Fiduciary funds are used to account for resources held for the benefit of parties outside the government. Fiduciary funds are not reported in the government-wide financial statements because the resources of those funds are not available to support the City’s own programs. The accounting used for fiduciary funds is much like that used for proprietary funds. The City reports pension trust funds for its three defined benefit pension plans and one OPEB (Other Post Employment Benefit) trust fund for annuity payments to certain pensioners and employees/retirees.

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, and is required by accounting principles generally accepted in the United States of America.

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Government-Wide Financial Analysis

Following is a summary of the City’s Statement of Net Position.

City of West Palm Beach, Florida Schedule of Net Position

September 30, 2016 and 2015 (in thousands)

Net Position: As noted above, net position may serve over time as a useful indicator of a government's financial position. Assets and deferred outflows exceeded liabilities and deferred inflows by $640 million at the close of the most recent fiscal year. Capital assets (e.g., land, buildings, machinery and equipment) less any outstanding debt used to acquire those assets represent $407 million or 64% of total net position. The City uses these capital assets to provide services to citizens. These assets are not available for future spending. Payments of outstanding debt related to capital assets must be made from other sources. Capital assets cannot be used to liquidate these liabilities. An additional $152 million of the City's net position represents resources that are subject to external restrictions on their use. The remaining unrestricted net position balance of $82 million may be used to meet the government’s ongoing obligations to citizens and creditors. Current and other assets, capital assets and liabilities: Governmental activities added $50 million of current assets primarily due to the $40 million 2016B bond issue which provided funding for several capital improvements. In the business-type activities, current and other assets increased $9.4 million on operating income of $31 million net of investments in capital assets and debt service payments. Business-type capital assets increased by $11 million from the spending of prior year bond proceeds as well as renewal and replacement spending, net of approximately $20 million of depreciation.

Governmental Business-type

activities activities Total

2016 2015 2016 2015 2016 2015Current and other assets 216,629$ 166,414$ 235,858$ 226,495$ 452,487$ 392,909$ Internal balances 964 124 (964) (124) - - Capital assets, net 349,005 349,547 444,710 433,515 793,715 783,063

Total assets 566,598 516,085 679,605 659,886 1,246,202 1,175,971

Total deferred outflows of resources 96,538 25,514 32,599 27,411 129,137 52,925

Current liabilities 16,227 19,616 22,250 18,075 38,477 37,691 Long-term liabilities 438,899 327,290 250,001 251,321 688,900 578,611

Total liabilities 455,126 346,906 272,251 269,396 727,377 616,301

Total deferred inflows of resources 7,300 6,512 266 723 7,567 7,235

Net investment in capital assets 175,216 169,012 231,703 215,130 406,919 384,142 Restricted 45,558 37,402 106,348 91,887 151,906 129,289 Unrestricted (20,065) (18,232) 101,636 110,162 81,571 91,929

Total net position 200,709$ 188,181$ 439,687$ 417,179$ 640,396$ 605,360$

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City of West Palm Beach, Florida Schedule of Changes in Net Position

For the Fiscal Years Ended September 30, 2016 and 2015 (in thousands)

Governmental activities saw a $3.2 million increase in revenue due primarily to an $8.9 million or 12.2% increase in property tax revenue (property values) offset by a $4.8 million reduction in charges for services.

On the expense side, significant changes included higher spending for police (up $15 million) resulting from higher pension costs, higher salary and benefits costs, and increased radio system and information technology maintenance costs. The engineering and public works category decreased due to the shifting of public housing and economic environment programs to other expense categories.

Net position of business-type activities increased (after the cumulative effect of change in accounting principle) by $22.5 million or 5.4%. This increase was primarily attributable to an increase in water and sewer’s net position, where revenues continued to outpace expenses.

Operating expenses of the business-type activities increased $14.9 million or 20.0% due to increased investment in the wastewater treatment plant’s joint venture, higher pension costs, and an increased usage of outsourced services.

2016 2015 2016 2015 2016 2015Revenues:Program revenues:

Charges for services 38,948$ 43,783$ 120,715$ 117,508$ 159,663$ 161,291$ Operating grants and contributions 23,213 20,344 - - 23,213 20,344 Capital grants and contributions 3,310 1,265 6,004 3,306 9,314 4,571

General revenues: Property taxes 82,076 73,132 - - 82,076 73,132 Other taxes 41,341 43,909 - - 41,341 43,909

Grants and contributions not3,934 3,928 - - 3,934 3,928

Other 2,831 6,127 1,289 1,064 4,120 7,191

Total Revenues 195,653 192,488 128,008 121,878 323,661 314,366

Expenses: Govermental Actitivities:

General government 25,313 33,360 - - 25,313 33,360 Police 65,474 50,394 - - 65,474 50,394 Fire 34,165 39,453 - - 34,165 39,453 Engineering services and public works 7,485 19,096 - - 7,485 19,096 Economic environment 20,498 17,318 - - 20,498 17,318 Health and sanitation 11,035 9,119 - - 11,035 9,119 Leisure services 21,012 19,785 - - 21,012 19,785 Interest on long-term debt 8,264 8,434 - - 8,264 8,434

Business-Type Activities:Water and sewer - - 76,763 65,082 76,763 65,082 Stormwater - - 10,981 8,042 10,981 8,042 Parking system - - 5,673 5,675 5,673 5,675 Golf course - - 1,962 1,854 1,962 1,854 Total Expenses 193,246 196,959 95,379 80,653 288,625 277,612

Increase (decrease) in net position before transfers 2,407 (4,471) 32,629 41,225 35,036 36,754 Transfers 10,121 10,196 (10,121) (10,196) - - Increase (decrease) in net position 12,528 5,725 22,508 31,029 35,036 36,754 Net position - beginning 188,181 276,739 417,179 384,374 605,360 661,113 Cumulative effect of change in accounting principle - (94,283) - 1,776 - (92,507) Net position - ending 200,709$ 188,181$ 439,687$ 417,179$ 640,396$ 605,360$

Governmental Business-Type TotalActivities Activities

restricted to specific programs

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Financial Analysis of 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, unassigned fund balance may serve as a useful measure of a government's net resources available for spending at the end of the fiscal year.

The General Fund is the chief operating fund of the City. At the end of the current fiscal year, total General Fund balance was $41 million; $13.7 million was committed for the emergency reserve, $2.4 million was assigned to the 2015-2016 budget, and $6.8 million was nonspendable. General Fund expenditures increased by $8.9 million primarily on increased public safety spending. As a measure of the General Fund's liquidity, it may be useful to compare the total fund balance to total expenditures. At year end, the total fund balance represented 24.5% of total General Fund expenditures.

The following comparative analysis is presented for General Fund revenues.

Significant changes in General Fund revenues include an increase in property tax revenue of $7.3 million. The operating tax rate held steady at 8.3465 mills, 0.1481 mills was the rate for the debt levy, and total taxable property values increased by $1 billion or 11%.

Revenue Amount

Percent of Total Amount

Percent of Total

Increase (Decrease)

Percent of Increase

(Decrease)

Taxes:

Property taxes 63,401$ 46.2% 56,109$ 42.2% 7,292$ 13.0%

Public services taxes 20,826 15.2% 20,658 15.5% 168 0.8%

Franchise taxes 9,008 6.6% 9,338 7.0% (330) -3.5%

Insurance premium taxes - 0.0% 2,813 2.1% (2,813) -100.0%

Total taxes 93,235 67.9% 88,918 66.9% 4,317 4.9%

Licenses and permits 3,694 2.7% 3,460 2.6% 234 6.8%

Intergovernmental 13,277 9.7% 12,971 9.8% 306 2.4%

Charges for services 24,439 17.8% 23,933 18.0% 506 2.1%

Fines/forfeitures 245 0.2% 293 0.2% (49) -16.6%

Other revenue 2,332 1.7% 3,296 2.5% (963) -29.2%

Total 137,222$ 100.0% 132,871$ 100.0% 4,351$ 3.3%

Comparative Analysis of General Fund Revenues

(in thousands)

2016 2015

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Proprietary funds. The proprietary fund statements provide additional detail on the type of information found in the government-wide financial statements.

Total net position of the Water and Sewer Fund at the end of the year amounted to $379 million, an increase (net of the cumulative effect of a change in accounting principle) of $22 million from the previous fiscal year, once again resulting from the excess of revenues over expenses.

General Fund Budgetary Highlights

Total tax revenues were below the budgeted amounts by 2.1% ($2.0 million). Property taxes fell slightly short by ($0.6 million). Although the property values in the City have increased in the last two years, they are still well below the pre-recession levels. The decrease in property tax revenue was offset by increases in utilities taxes.

Charges for services were above the final budgeted amount by 5.2% ($1.9 million), primarily due to higher than expected collections for Emergency Medical Services (EMS), Utility Department services, Fire Inspection fees and Sanitation revenues.

The total expenditures in General Fund functions were under budget by $4.2 million. This savings was due primarily to vacancies in all the divisions of the Engineering and Public Works Department and in the Dispatch division of the Police Department; to unencumbered capital budget for routing software in the Sanitation division; to reduced election costs’ budget that was not expended due to the departure of the City’s spokesperson; and to cost savings in materials and services for waste disposal, electricity and gasoline.

Capital Assets and Debt Administration

CITY OF WEST PALM BEACH Schedule of Capital Assets, net of depreciation

(in thousands)

Capital Assets. The City’s investment in capital assets for its governmental and business-type activities as of September 30, 2016 totals $794 million (net of accumulated depreciation). This investment in capital assets includes land, buildings, utility system improvements, machinery and equipment, park

2016 2015 2016 2015 2016 2015

Land 83,818$ 79,010$ 10,399$ 10,399$ 94,217$ 89,409$

Buildings 143,193 145,560 28,768 30,756 171,961 176,316

Improvements other

than buildings 78,466 86,432 - - 78,466 86,432

Equipment 13,322 16,361 5,100 5,636 18,422 21,997

Intangible Assets 93 113 160 (56) 253 57

Infrastructure 13,247 13,234 363,745 315,176 376,992 328,410

Construction in progress 16,866 8,837 36,538 71,604 53,404 80,441

Total 349,005$ 349,547$ 444,710$ 433,515$ 793,715$ 783,062$

Governmental Business-Type

Activities Activities Total

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facilities, roads, highways and bridges. The total increase in the City’s net investment in capital assets for the current fiscal year was $10.7 million.

Major capital asset events during the current fiscal year included the following:

Water Treatment Plan Improvement, $18.3 million

42” and 48” PCCP Force Main Improvement, $8.8 million

High Service Pumps Improvements, $3.9 million

Lakewood Improvement Pipe Replacement, $3.4 million

Additional information on the City’s capital assets can be found in Note G of this report.

CITY OF WEST PALM BEACH Schedule of Bonded Debt, Notes and Leases

(Principal Only) (in thousands)

Long-term debt: Of the $476 million in noncurrent liabilities, $440 million is in the form of bonded debt. Of this, $5.7 million consists of debt backed by the full faith and credit of the government. The remainder of the City’s bonded debt represents bonds secured solely by specified revenue sources. $219 million is secured by water, sewer and storm water fees, and $200 million is secured by covenants to budget and appropriate from legally available non-ad valorem revenues. The CRA’s $95 million of bonded debt is secured by a stand-alone pledge of tax increment revenue.

The City's total of bonds, notes payable and leases increased by $69 million, or approximately 17%, during the current fiscal year. This increase was the result of the issuance on July 5, 2016 of Special Obligation Bonds A, B and C. The proceeds of 2016A reduced the unfunded portion of the police pension liability by $50 million. 2016B is being used to finance various new projects and 2016C to refund $41.7 million of outstanding 2006 Special Obligation Bonds.

The general obligation bonds of the City maintain an underlying rating of "AA" from Standard and Poor’s Rating Services, “AA+” from Fitch IBCA, Inc., and an "Aa2" from Moody’s Investors Service, Inc. The special obligation bonds of the City maintain an underlying rating of "AA" from Standard and Poor’s Rating Services, “AA” from Fitch IBCA, Inc., and an "Aa3" from Moody’s Investors Service, Inc. The Utility System revenue bonds (water, sewer and storm water) have an underlying rating of "AA+" from Standard and Poor’s Rating Services, “AA-“ from Fitch IBCA, Inc., and an "Aa2" from Moody’s Investors Service, Inc.

Governmental Activities Business-Type ActivitiesTotal Total

2016 2015 2016 2015 2016 2015

General obligation bonds 5,725$ 7,000$ -$ -$ 5,725$ 7,000$ Revenue bonds 215,597 142,850 218,740 224,070 434,337 366,920 Total bonds 221,322 149,850 218,740 224,070 440,062 373,920

Notes and leases 35,341 33,097 194 - 35,535 33,097

Total bonds, notes and leases 256,663$ 182,947$ 218,934$ 224,070$ 475,597$ 407,017$

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The City’s Series 2015 CRA Tax Increment Revenue Bonds have an underlying rating of "A" from Standard and Poor’s Rating Services and “AA-“from Fitch.

Additional information on the City’s bonded debt and other long-term liabilities can be found in Note H of this report.

Requests for information

This financial report is designed to provide a general overview of the City’s finances. Questions concerning any of the information provided in this report or requests for additional information should be addressed to the Office of the Finance Director, 401 Clematis Street, West Palm Beach, Florida 33401.

CITY OF WEST PALM BEACH, FLORIDASTATEMENT OF NET POSITION

September 30, 2016

Governmental Business-typeActivities Activities Total

ASSETS Cash and cash equivalents 44,040,417$ 19,391,284$ 63,431,701$ Investments 63,428,532 27,244,348 90,672,880 Receivables (net) 24,176,762 14,311,021 38,487,783 Internal balances 963,795 (963,795) - Due from other governments 5,561,135 702,218 6,263,353 Prepaid items 1,301,952 47,601 1,349,553 Net OPEB asset 5,934,984 - 5,934,984 Inventories 446,377 775,056 1,221,433 Investment in joint venture 788,826 38,766,975 39,555,801 Land held for resale 11,868,358 - 11,868,358 Restricted Assets Cash with paying agent 1,650,187 8,175,670 9,825,857 Cash and cash equivalents 44,479,915 51,552,093 96,032,008 Investments 3,818,673 73,271,171 77,089,844 Interest on investments receivable 26,108 251,896 278,004 Net pension assets 8,854,612 702,408 9,557,020 Unamortized bond insurance costs 252,535 666,238 918,773 Capital assets not being depreciated 100,683,613 46,937,781 147,621,394

Capital assets being depreciated 248,321,145 397,772,572 646,093,717

Total Assets 566,597,926 679,604,537 1,246,202,463

DEFERRED OUTFLOWS OF RESOURCES

Interest rate swap - 23,805,196 23,805,196

Loss on debt defeasance 1,376,059 8,385,079 9,761,138

Net pension outflows 95,161,765 409,171 95,570,936

Total Outflows of Resources 96,537,824 32,599,446 129,137,270

LIABILITIES Vouchers payable and accrued liabilities 9,462,226 10,218,147 19,680,373 Accrued interest payable 1,578,987 2,732,327 4,311,314 Deposits 608,571 9,215,757 9,824,328 Due to other governments 852,020 16,442 868,462 Unearned revenue 3,725,110 67,200 3,792,310 Noncurrent liabilities: Due within one year Bonds 5,565,073 5,535,000 11,100,073 Loans and leases 3,596,473 38,454 3,634,927 Compensated absences, insurance claims and other 13,925,548 1,321,521 15,247,069 Due in more than one year Bonds 215,756,552 213,204,999 428,961,551 Loans and leases 23,420,954 155,198 23,576,152 Lines of credit 8,323,559 - 8,323,559 Compensated absences, insurance claims and other 33,152,189 5,940,673 39,092,862

Net pension liability 135,158,659 - 135,158,659

Interest rate swap - 23,805,196 23,805,196

Total Liabilities 455,125,921 272,250,914 727,376,835

DEFERRED INFLOWS OF RESOURCES

Deferred inflows, pension 7,300,484 266,086 7,566,570

NET POSITION Net investment in capital assets 175,216,099 231,703,096 406,919,195 Restricted for:

Capital improvements 4,539,285 - 4,539,285

Debt service 542,272 14,447,322 14,989,594

Community development 5,879,170 - 5,879,170

State and federal grants 6,019,693 - 6,019,693

Operation and maintenance - 11,272,529 11,272,529 Renewal and replacement - 74,676,033 74,676,033 Developer impact fund - 5,249,341 5,249,341 Cemetery fund 1,212,097 - 1,212,097 Forfeiture fund 608,205 - 608,205

Other purposes 17,902,806 - 17,902,806

Restated employees pension 8,854,612 702,408 9,557,020

Unrestricted (Deficit) (20,064,894) 101,636,254 81,571,360

Total Net Position 200,709,345$ 439,686,983$ 640,396,328$

The accompanying notes are an integral part of the financial statements.

1

Net (Expense) Revenue and Changes in Net Position

Function/Program Expenses Charges for

Services

Operating Grants and

Contributions

Capital Grants and

Contributions Governmental

Activities Business-Type

Activities Total

Primary Government:

Governmental Activities

General government 25,311,930$ 13,060,399$ 5,836,910$ 2,137,500$ (4,277,121)$ -$ (4,277,121)$

Police 65,473,776 618,893 1,371,242 - (63,483,641) - (63,483,641)

Fire 34,165,108 6,967,269 3,043,236 - (24,154,603) - (24,154,603)

Engineering and public works 7,485,377 728,826 2,388,397 1,172,113 (3,196,041) - (3,196,041)

Economic environment 20,497,361 - 10,227,816 - (10,269,545) - (10,269,545)

Health and sanitation 11,034,863 14,550,478 - - 3,515,615 - 3,515,615

Leisure services 21,011,958 3,021,707 345,638 - (17,644,613) - (17,644,613)

Interest on long-term debt 8,264,219 - - - (8,264,219) - (8,264,219)

Total Governmental Activities 193,244,591 38,947,572 23,213,239 3,309,613 (127,774,167) - (127,774,167)

Business-Type Activities

Water and sewer 76,763,287 101,473,554 - 5,768,901 - 30,479,168 30,479,168

Stormwater utility 10,980,854 10,865,085 - 19,064 - (96,705) (96,705)

Parking system 5,672,549 6,841,300 - 215,662 - 1,384,413 1,384,413

Golf course 1,961,851 1,535,469 - - - (426,382) (426,382)

Total Business-Type Activities 95,378,541 120,715,408 - 6,003,627 - 31,340,494 31,340,494

Total Primary Government 288,623,132$ 159,662,980$ 23,213,239$ 9,313,240$ (127,774,167)$ 31,340,494$ (96,433,673)$

80,485,544 - 80,485,544

1,590,487 - 1,590,487

3,195,150 - 3,195,150

9,007,760 - 9,007,760

20,826,180 - 20,826,180

8,311,702 - 8,311,702

3,933,704 - 3,933,704

1,441,144 1,288,524 2,729,668

1,389,739 - 1,389,739

10,120,935 (10,120,935) -

140,302,345 (8,832,411) 131,469,934

12,528,178 22,508,083 35,036,261

188,181,167 417,178,900 605,360,067

200,709,345$ 439,686,983$ 640,396,328$

The accompanying notes are an integral part of the financial statements

CITY OF WEST PALM BEACH, FLORIDASTATEMENT OF ACTIVITIES

FOR THE FISCAL YEAR ENDED September 30, 2016

Program Revenues Primary Government

Net position - ending

Miscellaneous

Transfers

Change in net position

Total general revenues and transfers

Net position - beginning

Taxes:

Investment earnings

Public service

General Revenues:

State and local shared revenues

Business

Franchise

Property, levied for general purposes

Property, levied for special purposes

Sales tax

2

General Fund

City Center CRA Fund

Northwood/Pleasant

City CRA Fund

ASSETS

Cash and cash equivalents 11,017,803$ 7,714,796$ 1,125,321$

Investments 15,604,527 10,956,508 1,598,109

Receivables (net):

Accounts 12,524,036 90,064 4,978

Interest 82,253 45,825 6,827

Notes 547,418 313,728 -

Liens and assessments 576,832 1,002 -

Due from other funds 6,467,189 - -

Due from other governments 134,539 - -

Advances to other funds 850,740 - -

Inventories 291,976 - -

Prepaid items 321,672 - -

Advance to defined benefit pension plan 5,366,499 - -

Restricted current assets

Cash and cash equivalents - - -

Investments - - -

Interest receivable - - -

Cash with paying agent 1,650,187 - -

Land held for resale - 6,000,000 -

Total assets 55,435,671 25,121,923 2,735,235


Total deferred outflows of resources - - -

Total assets and deferred outflows of resources 55,435,671$ 25,121,923$ 2,735,235$

LIABILITIES

Vouchers payable and accrued liabilities 2,044,013 502,869 143,660

Salaries, wages and benefits payable 1,549,847 - -

Trust deposits 434,550 40,822 4,200

Due to other funds 268,438 1,805,000 -

Due to other governments 830,054 20,442 -

Unearned revenue 2,980,382 51,631 -

Total liabilities 8,107,284 2,420,764 147,860


Unavailable revenue 6,310,428 316,743 4,978

FUND BALANCES

Nonspendable 6,830,887 - -

Restricted - 22,384,416 2,582,397

Committed 13,722,195 - -

Assigned 2,404,792 - -

Unassigned 18,060,085 - -

Total fund balances 41,017,959 22,384,416 2,582,397

Total liabilities, deferred inflows of resources

and fund balances 55,435,671$ 25,121,923$ 2,735,235$

CITY OF WEST PALM BEACH, FLORIDABALANCE SHEET

GOVERNMENTAL FUNDS

September 30, 2016

3

2016 Capital Bond Fund

Other Governmental

Funds

Total Governmental

Funds

-$ 15,149,527$ 35,007,447$

- 19,040,294 47,199,438

- 516,764 13,135,842

- 80,053 214,958

- 3,040,886 3,902,032

- 526,932 1,104,766

- 268,438 6,735,627

- 2,475,902 2,610,441

- - 850,740

- 63,308 355,284

- - 321,672

- - 5,366,499

36,372,377 1,437,677 37,810,054

1,913,065 - 1,913,065

12,475 - 12,475

- - 1,650,187

- 5,868,358 11,868,358

38,297,917 48,468,139 170,058,885

- - -

38,297,917$ 48,468,139$ 170,058,885$

249,677 2,117,683 5,057,902

- 104,634 1,654,481

- 20,189 499,761

- 1,359,613 3,433,051

- 1,524 852,020

- 693,097 3,725,110

249,677 4,296,740 15,222,325

- 2,622,800 9,254,949

- 63,308 6,894,195

38,048,240 31,768,696 94,783,749

- 9,716,595 23,438,790

- - 2,404,792

- - 18,060,085

38,048,240 41,548,599 145,581,611

38,297,917$ 48,468,139$ 170,058,885$


4

CITY OF WEST PALM BEACH, FLORIDARECONCILIATION OF THE BALANCE SHEET OF GOVERNMENTAL FUNDS

TO THE STATEMENT OF NET POSITIONSEPTEMBER 30, 2016

145,581,611$

2,002,500

619,129,020$

(288,120,630) 331,008,390

252,535$

Cumulative overfunding of annual required other post employment pension trust fund contribution 5,934,984

Net pension assets 3,365,335

Loss on debt defeasance 1,376,059 10,928,913

Accrued interest payable on long term debt (1,567,425)$ General obligation debt (5,725,000) General obligation unamortized premium / discount (24,814) Revenue bonds (215,596,625) Revenue bonds unamortized premium / discount (16,847,531) Notes (3,738,375) Lines of credit (8,323,559) Arbitrage payable (28,651) Compensated absences (14,816,186) Capital lease payable (5,935,719) Net pension liability (135,158,659) Settlement payable (1,166,884) (408,929,428)

Deferred outflows/inflows of resources related to pensions

Net pension outflows 95,161,765$ Deferred pension inflows (7,300,484) 87,861,281

accrual on the government-wide statements. Unavailable revenue 9,254,949

Internal service funds are used by management to charge the

costs of certain activities to individual funds. The net postition of the internal service funds are reported with governmental activities. 23,026,139 less: Net pension inflows/outflows of internal service funds (reported above) (25,010) 23,001,129

Net position of governmental activities 200,709,345$


City park pledged by Palm Beach County

Unavailable revenue less unearned revenue in governmental funds is susceptible to full

financial resources and therefore are not reported in the governmental funds. Other assets and deferred outflows of resources used in governmental activities are not

Fund Balances - total governmental funds

Amounts reported for governmental activities in the statement of net position are different because:

Future obligations from contractual agreements by other governments are not resources and therefore are not reported in the governmental funds.

Less accumulated depreciation

Governmental fund capital assets

Capital assets used in governmental activities are not financial resources and therefore are not reported in the governmental funds.

due and payable in the current period and therefore are not Long-term liabilities and deferred inflows of resources, including bonds payable, are not

reported in the governmental funds.

Unamortized bond insurance costs

5

General Fund

City Center CRA Fund

Northwood/Pleasant

City CRA Fund

Revenues: Taxes 93,235,162$ 15,769,313$ 1,822,340$

Licenses and permits 3,694,485 - -

Intergovernmental 13,276,669 10,227,816 1,039,511

Charges for services 24,438,621 - -

Fines and forfeitures 244,763 - -

Rents and royalties 247,694 791,055 -

Interest 840,818 240,549 34,947

Miscellaneous 1,243,737 34,501 27,127

Total Revenues 137,221,949 27,063,234 2,923,925

Expenditures:Current: General government 12,925,294 - -

Public safety 89,603,337 - -

Engineering services and public works 4,669,493 - -

Economic environment - 12,700,276 1,229,984

Health and sanitation 9,980,656 - -

Leisure services 17,936,174 - -

Capital outlay 456,967 2,802,609 149,463

Debt service: Principal retirement 1,347,908 3,663,061 775,000

Interest charges 270,695 3,690,067 911,238

Issuance costs and other 2,095,770 2,250 1,712

Total Expenditures 139,286,294 22,858,263 3,067,397

Excess (Deficiency) of Revenues Over Expenditures (2,064,345) 4,204,971 (143,472)

Other Financing Sources (Uses): Issuance of long-term debt 2016A 50,400,000 - -

Issuance of long-term debt 2016B - - -

Premium of long-term debt 2016B - - -

Issuance of refunding debt 2016C 35,990,000 - -

Premium of refunding debt 2016C 5,983,363 - -

Payment to escrow agent for refunding (41,679,818) - -

Transfers in 11,385,017 - -

Transfers out (9,841,669) (1,697,213) -

Total Other Financing Sources (Uses) 52,236,893 (1,697,213) -

Special item (uses) Bond proceeds to police pension (50,000,000) - -

Net change in fund balances 172,548 2,507,758 (143,472)

Fund balances (deficit) - beginning 40,845,411 19,876,658 2,725,869

Fund balances (deficit) - ending 41,017,959$ 22,384,416$ 2,582,397$

CITY OF WEST PALM BEACH, FLORIDASTATEMENT OF REVENUES, EXPENDITURES,

AND CHANGES IN FUND BALANCES

GOVERNMENTAL FUNDS


6

2016 Capital Bond Fund

Other Governmental

Funds

Total Governmental

Funds

-$ 1,590,487$ 112,417,302$

- 9,624,941 13,319,426

- 12,221,762 36,765,758

- 2,193,746 26,632,367

- 27,667 272,430

- 420,788 1,459,537

38,899 285,931 1,441,144

- 930,639 2,236,004

38,899 27,295,961 194,543,968

- - 12,925,294

- 8,747,189 98,350,526

- 520,161 5,189,654

- 6,813,834 20,744,094

- - 9,980,656

- 3,382,416 21,318,590

1,989,759 7,707,981 13,106,779

- 2,410,000 8,195,969

- 1,381,425 6,253,425

- 2,550 2,102,282

1,989,759 30,965,556 198,167,269

(1,950,860) (3,669,595) (3,623,301)

- 50,400,000

33,795,000 - 33,795,000

6,462,110 - 6,462,110

- - 35,990,000

- - 5,983,363

- - (41,679,818)

- 6,807,015 18,192,032

(258,010) (2,830,687) (14,627,579)

39,999,100 3,976,328 94,515,108

- - (50,000,000)

38,048,240 306,733 40,891,807

- 41,241,866 104,689,804

38,048,240$ 41,548,599$ 145,581,611$


7

Net change in fund balances - total governmental funds 40,891,807$

13,106,779 (19,541,075) (6,434,296)

(44,199)$ (132,630,473)

41,679,818 6,848,061

755,539 592,369 (82,798,885)

(507,331)$ (2,028,123) (2,535,454)

6,466,526

(676,185)$

49,480,086 (1,298,375)

5,577 486,666

1,702,165 49,699,934

7,238,546

12,528,178$


resources and therefore are not reported as revenues in governmental funds.

Some expenses reported in the statement of activities do not require the use of current financial

Principal repayment on notes

Change in net OPEB obligation

Change in accrued interest

resources and therefore are not reported as expenditures in governmental funds.

Capital assets that are transferred are not in the governmental funds.

Taxes

Change in arbitrage rebate payable

Charges for services

However, the amounts are recognized in the government-wide financial statements.

Change in net position of governmental activities

Change in net position of Internal Service Funds

Change in compensated absences payable

Current year amortization of insurance costs, and charge on refunding

Change in accrued pension liability

similar items when debt is first issued, whereas these amounts are deferred and

Some revenues reported in the statement of activities do not provide current financial

amortized in the statement of activities:

Principal repayment on leases

resources to governmental funds, while the repayment of long-term debt

Retirement of debt Principal repayment on bonds

Issuance of bonds

of activities, the cost of those assets is depreciated over their estimated useful lives.

consumes the current financial resources of governmental funds. Neither

The issuance of long-term debt (e.g., notes, leases) provides current financial

Amounts reported for governmental activities in the statement of activities are different because:

Governmental funds report capital outlays as expenditures, however, in the statement

Less current year depreciation

CITY OF WEST PALM BEACH, FLORIDARECONCILIATION OF THE STATEMENT OF REVENUES, EXPENDITURES,

AND CHANGES IN FUND BALANCE OF GOVERNMENTAL FUNDS TOTHE STATEMENT OF ACTIVITIES

Issuance of lease

governmental funds report the effect of issuance costs, premiums, discounts and transaction, however, has any effect on net position of governmental activities. Also,

Debt issued or incurred:


Expenditures for capital assets, net of adjustments

8

Variance with

Final Budget -

Original Final ActualPositive

(Negative)

Revenues

Taxes 95,219,517$ 95,219,517$ 93,235,162$ (1,984,355)$

Licenses and permits 3,630,500 3,630,500 3,694,485 63,985

Intergovernmental 13,548,547 14,046,782 13,276,669 (770,113)

Charges for services 35,610,343 35,792,343 36,780,881 988,538

Fines and forfeitures 292,300 292,300 244,763 (47,537)

Rents and royalties 265,000 265,000 247,694 (17,306)

Interest 525,200 525,200 840,818 315,618

Miscellaneous 361,434 953,063 1,243,737 290,674

Total Revenues 149,452,841 150,724,705 149,564,209 (1,160,496)

Expenditures

Current

General government 25,666,519 26,639,773 23,361,198 3,278,575

Public safety 92,060,702 92,115,586 92,112,687 2,899

Engineering services and public works 5,328,152 5,376,352 4,672,280 704,072

Health and sanitation 10,406,029 10,406,029 9,985,070 420,959

Leisure services 20,105,688 20,501,044 18,217,847 2,283,197

Capital outlay 158,263 843,609 629,008 214,601

Debt service

Principal retirement 1,347,910 1,360,510 1,347,908 12,602

Interest charges 270,696 272,096 270,695 1,401

Issuance costs and other - 960,000 2,095,770 (1,135,770)

Total Expenditures 155,343,959 158,474,999 152,692,463 5,782,536

Excess (Deficiency) of Revenues

Over Expenditures (5,891,118) (7,750,294) (3,128,254) 4,622,040

Other Financing Sources (Uses)

Issuance of debt, 2016A - 300,000 50,400,000 50,100,000

Issuance of debt, 2016C - 40,657,110 41,973,363 1,316,253

Payment to refunding escrow agent - - (41,679,818) (41,679,818)

Transfers in 11,830,161 11,830,161 13,592,817 1,762,656

Transfers out (8,044,523) (50,475,834) (9,841,669) 40,634,165

Total Other Financing Sources (Uses) 3,785,638 2,311,437 54,444,693 52,133,256

Special Item Sources(Uses)

Bond proceeds to police pension - - (50,000,000) (50,000,000)

Total Special Item Sources (Uses) - - (50,000,000) (50,000,000)

Net Change in Fund Balances (2,105,480)$ (5,438,857)$ 1,316,439$ 6,755,296$

Reconciliation of Budgetary Revenues to GAAP Basis Revenues:

Revenues reported in this statement 149,564,209$

Deduct administrative charges (12,342,260)

Revenues GAAP basis 137,221,949$

Reconciliation of Budgetary Expenditures to GAAP Basis Expenditures:

Expenditures reported on this statement 152,692,463$

Deduct year end encumbrances (1,063,909)

Deduct administrative expenditures (12,342,260)

Expenditures GAAP basis 139,286,294$

Reconciliation of Budgetary Other Financing Sources (Uses)

and Special Item to GAAP Basis other Financing Sources (Uses):

Other financing sources and special items reported on this statement 4,444,693$

Transfers in reclassified to advances to other funds (2,207,800)

Other financing sources GAAP basis 2,236,893$


Budgeted Amounts

CITY OF WEST PALM BEACH, FLORIDAGENERAL FUND

STATEMENT OF REVENUES, EXPENDITURES, AND CHANGES IN FUND BALANCES -

BUDGET AND ACTUAL - BUDGETARY BASIS


9

Variance with

Final Budget -

Original Final ActualPositive

(Negative)

Revenues:

Taxes 15,443,053$ 15,443,053$ 15,769,313$ 326,260$


Rents and royalties 693,998 693,998 791,055 97,057

Interest 120,000 120,000 240,549 120,549

Miscellaneous 3,000 3,000 34,501 31,501

Total Revenues 26,372,172 26,543,632 27,063,234 519,602

Expenditures:

Current:

Economic environment 15,800,325 16,088,565 12,700,276 3,388,289

Capital outlay 9,413,318 10,366,456 2,802,609 7,563,847

Debt service

Principal retirement 3,663,061 3,663,061 3,663,061 -

Interest charges 3,535,800 3,535,800 3,690,067 (154,267)

Issuance costs and other 2,000 2,000 2,250 (250)

Total Expenditures 32,414,504 33,655,882 22,858,263 10,797,619

Excess (deficiency) of revenues

over expenditures (6,042,332) (7,112,250) 4,204,971 11,317,221

Other financing sources (uses):

Transfers out (3,829,333) (3,905,013) (3,905,013) -

Total other financing sources (uses) (3,829,333) (3,905,013) (3,905,013) -

Net change in fund balances (9,871,665)$ (11,017,263)$ 299,958 11,317,221$

Fund balances (deficit) - beginning 19,876,658

Adjustments to GAAP basis:

Transfers out reclassified to reduce advances to other funds 2,207,800

Fund balances (deficit) - ending 22,384,416$


CITY OF WEST PALM BEACH, FLORIDACOMMUNITY REDEVELOPMENT AGENCY FUND




Budgeted Amounts

10

Variance with

Final Budget -

Original Final Actual

Positive

(Negative)

Revenues:

Taxes 1,781,396$ 1,781,396$ 1,822,340$ 40,944$


Interest 25,000 25,000 34,947 9,947

Miscellaneous 4,200 4,200 27,127 22,927

Total revenues 2,831,113 3,181,113 2,923,925 (257,188)

Expenditures:

Current:

Economic environment 1,566,707 1,591,707 1,229,984 361,723

Capital outlay 250,263 575,263 149,463 425,800

Debt service

Principal retirement 784,000 784,000 775,000 9,000

Interest charges 911,238 911,238 911,238 -

Issuance costs and other 1,000 1,000 1,712 (712)

Total expenditures 3,513,208 3,863,208 3,067,397 795,811


over expenditures (682,095) (682,095) (143,472) 538,623

Net change in fund balances (682,095)$ (682,095)$ (143,472) 538,623$

Fund balances (deficit) - beginning 2,725,869



CITY OF WEST PALM BEACH, FLORIDANORTHWOOD/PLEASANT CITY CRA FUND




Budgeted Amounts

11

Variance with

Final Budget -


Positive

(Negative)

Revenues:

Interest -$ -$ 38,899$ 38,899$

Total revenues - - 38,899 38,899

Expenditures:

Current:

Engineering and public works - 44,000 - 44,000

Capital outlay - 39,444,100 1,989,759 37,454,341

Total expenditures - 39,488,100 1,989,759 37,498,341


over expenditures - (39,488,100) (1,950,860) 37,537,240


Issuance of debt - - 40,257,110 40,257,110

Transfers in - 39,999,100 - (39,999,100)

Transfers out - - (258,010) (258,010)

Total other financing sources (uses) - 39,999,100 39,999,100 -

Net change in fund balances -$ 511,000$ 38,048,240 37,537,240$

Fund balances (deficit) - beginning -



CITY OF WEST PALM BEACH, FLORIDA2016 CAPITAL BOND FUND




Budgeted Amounts

12

Water and Sewer System Fund

Stormwater System Fund

Non-Major Enterprise Funds Totals

Internal Service Funds

ASSETS

Current unrestricted

Cash and cash equivalents 13,298,643$ 3,666,266$ 2,426,375$ 19,391,284$ 9,032,970$

Investments 18,901,465 5,210,893 3,131,990 27,244,348 16,229,094

Receivables (net):

Accounts 10,715,307 1,212,880 54,017 11,982,204 5,763,392

Interest 120,811 23,823 12,704 157,338 55,772

Liens 1,716,108 455,371 - 2,171,479 -

Due from other governments 617,574 - 84,644 702,218 948,194

Inventories 742,623 - 32,433 775,056 91,093

Prepaid items 36,763 - 10,838 47,601 980,280

Current restricted

Cash with paying agent 6,274,097 1,901,573 - 8,175,670 -

Cash and cash equivalents 10,909,542 562,541 10,182 11,482,265 6,669,861

Investments 15,505,810 799,543 14,272 16,319,625 1,905,608

Interest on restricted cash and investments 35,641 429 - 36,070 13,633

Total current assets 78,874,384 13,833,319 5,777,455 98,485,158 41,689,897

Noncurrent assets:

Cash and cash equivalents 36,482,219 3,587,609 - 40,069,828 -

Investments 51,852,451 5,099,095 - 56,951,546 -

Interest on restricted cash and investments 201,966 13,860 - 215,826 -

Restated employees pension 702,408 - - 702,408 122,778

Investment in joint venture 38,766,975 - - 38,766,975 788,826

Capital assets, net 369,253,424 65,605,208 9,851,721 444,710,353 17,996,368

Unamortized bond insurance costs 585,697 80,541 - 666,238 -

Total noncurrent assets 497,845,140 74,386,313 9,851,721 582,083,174 18,907,972

Total assets 576,719,524$ 88,219,632$ 15,629,176$ 680,568,332$ 60,597,869$


Deferred outflow-interest rate swap 20,758,131 3,047,065 - 23,805,196 -

Deferred outflow-loss on defeased debt 5,983,725 2,401,354 - 8,385,079 -

Deferred outflow-pension 409,171 - - 409,171 71,522

Total deferred outflows of resources 27,151,027$ 5,448,419$ -$ 32,599,446$ 71,522$

(Continued)


PROPRIETARY FUNDS

September 30, 2016

Business-Type Enterprise Funds Activities

Governmental

13

Water and Sewer System Fund


Non-Major Enterprise Funds Totals



PROPRIETARY FUNDS

September 30, 2016

Business-Type Enterprise Funds Activities

Governmental

LIABILITIES

Current liabilities

Vouchers payable and accrued liabilities 2,288,297$ 43,535$ 305,909$ 2,637,741$ 2,664,725$

Salaries, wages and benefits payable 312,124 31,452 14,883 358,459 85,119

Due to other governments 115 - 16,327 16,442 -

Due to other funds - - 113,055 113,055 3,189,521

Compensated absences payable 1,112,234 140,648 68,639 1,321,521 312,671

Capital lease obligations - current - - 38,454 - 1,482,220

Notes payable, current - - - - 1,273,769

Accrued interest payable - - - - 11,562

Insurance claims payable - - - - 4,485,166

Trust deposits - - - - 108,810

Current liabilities payable

from restricted assets:

Accrued interest payable 2,143,857 588,470 - 2,732,327 -

Vouchers payable and accrued liabilities 6,926,190 295,757 - 7,221,947 -

Customer deposits 9,191,303 - 24,454 9,215,757 -

Bonds payable current 4,210,165 1,324,835 - 5,535,000 -

Total current liabilities 26,184,285 2,424,697 581,721 29,152,249 13,613,563

Noncurrent liabilities:

Compensated absences payable 833,646 122,248 60,072 1,015,966 230,692

Insurance claims payable, long term - - - - 9,165,143

Advance payable to General Fund - - 850,740 850,740 -

Capital lease obligation - long term - - 155,198 193,652 5,255,226

Unearned revenue - - 67,200 67,200 -

Revenue bonds payable, less current

maturities, unamortized discount/premium 177,002,080 41,127,626 - 218,129,706 -

Notes payable, long term - - - - 9,332,117

Interest rate swap 20,758,131 3,047,065 - 23,805,196 -

Total noncurrent liabilities 198,593,857 44,296,939 1,133,210 244,062,460 23,983,178

Total liabilities 224,778,142$ 46,721,636$ 1,714,931$ 273,214,709$ 37,596,741$


Restated pension 266,086 - - 266,086 46,511

Total deferred inflows 266,086 - - 266,086 46,511

NET POSITION

Net investment in capital assets 191,921,466 29,929,909 9,851,721 231,703,096 9,156,630

Restricted for:

Operation and maintenance 10,217,934 1,054,595 - 11,272,529 -

Debt service 11,455,945 2,991,377 - 14,447,322 -

Renewal and replacement 71,985,615 2,690,418 - 74,676,033 -

Developer impact fund 5,249,341 - - 5,249,341 -

Restated employees pension 702,408 - - 702,408 122,778

Unrestricted 87,293,614 10,280,116 4,062,524 101,636,254 13,746,731

Total net position 378,826,323$ 46,946,415$ 13,914,245$ 439,686,983$ 23,026,139$


14

Governmental

Activities

Water and Sewer System

Fund


Non-Major Enterprise

Funds Total


Operating revenues:

Charges for services 99,410,936$ 10,853,567$ 7,178,526$ 117,443,029$ 50,756,980$

Fines 969,872 - 1,180,125 2,149,997 67,945

Miscellaneous and other 1,092,746 11,518 18,118 1,122,382 264,078

Total operating revenues 101,473,554 10,865,085 8,376,769 120,715,408 51,089,003

Operating expenses:

Personnel services 21,720,141 2,277,066 1,135,793 25,133,000 7,336,236

Contractual services 11,695,103 1,802,890 2,559,073 16,057,066 6,220,144

Utilities 2,653,322 161,795 311,514 3,126,631 547,062

Repair and maintenance 5,598,582 1,073,702 1,079,464 7,751,748 3,181,594

Other supplies and expenses 7,637,966 839,795 1,109,645 9,587,406 2,975,814

Depreciation 15,167,937 3,642,102 1,022,108 19,832,147 2,986,037

Insurance 564,508 108,762 363,952 1,037,222 27,830,899

Loss on joint ventures 1,424,124 - - 1,424,124 369,842

Wastewater treatment and disposal 5,355,810 - - 5,355,810 -

Total operating expenses 71,817,493 9,906,112 7,581,549 89,305,154 51,447,628

Operating income (loss) 29,656,061 958,973 795,220 31,410,254 (358,625)

Non-operating revenues (expenses):

Interest revenue 1,139,029 112,159 37,336 1,288,524 194,565

Interest expense (5,143,848) (1,181,155) (52,851) (6,377,854) (312,302)

Gain (loss) on disposal of capital assets 198,054 106,413 - 304,467 861,344

Total non-operating revenues (expenses) (3,806,765) (962,583) (15,515) (4,784,863) 743,607

Income (loss) before contributions and transfers 25,849,296 (3,610) 779,705 26,625,391 384,982

Capital contributions - impact fees 981,390 - - 981,390 -

Capital contributions - grants 4,787,511 19,064 215,662 5,022,237 -

Capital contributions - lease - - - - 297,082

Transfers in - - 270,000 270,000 6,624,822

Transfers out (9,926,746) (17,690) (446,499) (10,390,935) (68,340)

Change in net position 21,691,451 (2,236) 818,868 22,508,083 7,238,546

Net position - beginning 357,134,872 46,948,651 13,095,377 417,178,900 15,787,593

Net position - ending 378,826,323$ 46,946,415$ 13,914,245$ 439,686,983$ 23,026,139$


CITY OF WEST PALM BEACH, FLORIDASTATEMENT OF REVENUES, EXPENSES, AND CHANGES IN FUND NET POSITION

PROPRIETARY FUNDS

For the fiscal year ended September 30, 2016

Business-Type Activities - Enterprise Funds

15

Water andSewer System

Stormwater System

Fund Fund

Cash Flows From Operating Activities: Cash received from customers 94,420,934$ 10,970,423$ Cash payments to suppliers/contractors (28,471,110) (4,368,938) Cash payments to employees (21,160,924) (2,035,983) Contribution to joint venture (1,638,708) - Other operating receipts 2,062,618 69,115 Cash payments for insurance - - Net cash provided by (used for) operating activities 45,212,810 4,634,617

Cash Flows From Noncapital Financing Activities:

Transfers in - -

Transfers out (9,926,746) (17,690)

Receipts due from other funds - 949,329 Payment of short term advance from General Fund - - Net cash provided by (used for) noncapital financing activities (9,926,746) 931,639

Cash Flows From Capital and Related Financing Activities: Acquisition and construction of capital assets (24,686,482) (2,422,356) Proceeds of debt issued - - Principal payment on bonds, notes, advances, and capital leases (1,064,505) (1,757,601) Interest and fees paid on bonds, notes, advances, and capital leases (8,089,904) (978,716) Capital contributions from impact fees 981,390 - Capital grants 4,787,511 19,064 Sale of assets 198,054 106,413 Net cash provided by (used for) capital and related financing activities (27,873,936) (5,033,196)

Cash Flows From Investing Activities: Purchase of investments (86,259,726) (11,109,531) Interest on investments 1,102,077 109,055 Net cash provided by (used for) investing activities (85,157,649) (11,000,476)

Net increase (decrease) in cash and cash equivalents (77,745,521) (10,467,416)

Cash, cash equivalents beginning of year 144,710,022 20,185,405

Cash, cash equivalents end of year 66,964,501$ 9,717,989$

Displayed as: Unrestricted cash and cash equivalents 13,298,643 3,666,266 Restricted cash with paying agent 6,274,097 1,901,573 Restricted cash and cash equivalents 10,909,542 562,541 Noncurrent cash and cash equivalents 36,482,219 3,587,609 Total cash 66,964,501$ 9,717,989$

Business-Type ActivitiesEnterprise Funds

CITY OF WEST PALM BEACH, FLORIDASTATEMENT OF CASH FLOWS

PROPRIETARY FUNDSFOR THE FISCAL YEAR ENDED September 30, 2016

16


Non-MajorEnterprise

Internal Service

Funds Totals Funds

7,149,875$ 112,541,232$ 47,952,887$ (5,202,694) (38,042,742) (13,822,220) (1,078,455) (24,275,362) (7,414,485)

- (1,638,708) - 1,198,243 3,329,976 357,792

- - (26,384,647) 2,066,969 51,914,396 689,327

270,000 270,000 6,624,822

(446,499) (10,390,935) (68,340)

- 949,329 - - - (303,008)

(176,499) (9,171,606) 6,253,474

(672,576) (27,781,414) (4,677,246) - - 5,210,716

(109,466) (2,931,572) (2,846,488) (52,851) (9,121,471) (319,786)

981,390 297,082 215,662 5,022,237 -

- 304,467 1,124,849 (619,231) (33,526,363) (1,210,873)

(3,146,262) (100,515,519) (18,134,702) 33,346 1,244,478 190,176

(3,112,916) (99,271,041) (17,944,526)

(1,841,677) (90,054,614) (12,212,598)

4,278,234 169,173,661 27,915,429

2,436,557$ 79,119,047$ 15,702,831$

2,426,375 19,391,284 9,032,970 - 8,175,670 -

10,182 11,482,265 6,669,861 - 40,069,828 -

2,436,557$ 79,119,047$ 15,702,831$

(Continued)


17

Water andSewer System

StormwaterSystem

Fund Fund

RECONCILIATION OF OPERATING INCOME (LOSS) TO NET CASH PROVIDED BY (USED FOR) OPERATING ACTIVITIES:

Operating income (loss) 29,656,061$ 958,973$

Adjustments to reconcile operating income (loss) to net cash provided by (used for) operating activities:

Depreciation 15,167,937 3,642,102

Changes in assets and liabilities:

(Increase) decrease in accounts receivable (446,598) 14,589 (Increase) decrease in liens receivable 119,577 102,267 (Increase) decrease in due from other governments 374,047 57,597 (Increase) decrease in inventory (252,761) - (Increase) decrease in prepaid expenses (10,693) - (Increase) decrease in net pension asset 1,032,200 335,914 (Increase) decrease in joint venture (214,584) - (Increase) decrease in deferred outflow - pension (208,777) 38,807 Increase (decrease) in vouchers payable and accrued liabilities (58,175) (381,994) Increase (decrease) in wages payable 111,725 12,979 Increase (decrease) in due to other governments (19,007) - Increase (decrease) in compensated absences payable (59,495) (33,810) Increase (decrease) in unearned revenue (3,586) Increase (decrease) in deferred inflow-pension (316,436) (112,807) Increase (decrease) in advance customer deposits 341,375 - Increase (decrease) in insurance claims payable - - Increase (decrease) in deferred inflows - pensions Total adjustments 15,556,749 3,675,644

Net cash provided by (used for) operating activities 45,212,810$ 4,634,617$


(Continued)

CITY OF WEST PALM BEACH, FLORIDASTATEMENT OF CASH FLOWS

PROPRIETARY FUNDSFOR THE FISCAL YEAR ENDED September 30, 2016

18


Non-MajorEnterprise

InternalService

Funds Totals Funds

795,220$ 31,410,254$ (358,625)$

1,022,108 19,832,147 2,986,036

(52,057) (484,066) (2,808,412) - 221,844 -

(43,794) 387,850 - (315) (253,076) - - (10,693) (15,487)

82,573 1,450,687 (534,511) - (214,584) 369,841

9,540 (160,430) (71,522) 30,409 (409,760) (348,990)

3,081 127,785 36,487 (2,792) (21,799) -

(10,126) (103,431) 33,053 67,200 63,614 -

(27,730) (456,973) - 193,652 535,027 684,628

- - 670,318 46,511

1,271,749 20,504,142 1,047,952

2,066,969$ 51,914,396$ 689,327$



19

CITY OF WEST PALM BEACH, FLORIDASTATEMENT OF FIDUCIARY NET POSITION

FIDUCIARY FUNDS

September 30, 2016

ASSETS Cash and cash equivalents 4,107,894$

Receivables: Drop loans 1,803,433 Interest and dividends 471,472

Other 1,736,532

Total receivables 4,011,437

Investments: Money market 9,707,681 U.S. Government obligations 21,600,617 U.S. Government agencies 46,852,853 Corporate obligations 21,492,652 Equity securities 27,573,518 Domestic stocks 176,435,188 Domestic equity investment funds 90,857,272 Domestic fixed income investment funds 28,505,971 Fixed income mutual fund 4,024,301 International equity investment funds 61,630,658 International fixed income investment funds 20,457,734 Real estate investment trust funds 54,447,039 Total investments 563,585,484

Prepaid expenses 1,129,831

Total assets 572,834,646

LIABILITIES

Accounts payable and accrued expenses 2,012,173

Advanced contribution from the City 5,366,499

Total liabilities 7,378,672

NET POSITION

Net position restricted for pensions 565,455,974$


20

AdditionsContributions: Plan members 56,623,612$ Insurance premium taxes collected by the State of Florida on behalf of the City of West Palm Beach 2,834,922

City of West Palm Beach 17,552,623

Total contributions 77,011,157

Investment income:

Net appreciation in fair value

of investments 32,687,243 Interest and dividends 10,822,427 Class action revenue 77,069

Rebates and other revenue 144,475

43,731,214

Less investment expense 2,130,353

Net investment income 41,600,861

Total additions 118,612,018

Deductions Participant benefit payments 34,707,481 Refunds of participant contributions 112,546

Administrative expenses 556,068

Total deductions 35,376,095

Net increase (decrease) in net position 83,235,923

Net position restricted for pensions Beginning of year 482,220,051

End of year 565,455,974$



FIDUCIARY FUNDS

STATEMENT OF CHANGES IN FIDUCIARY NET POSITION


21


COMPREHENSIVE ANNUAL FINANCIAL REPORT


NOTES TO THE FINANCIAL STATEMENTS

TABLE OF CONTENTS

Page

NOTE

A – Significant Accounting Policies. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 23

B – Deposits and Investments. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 34

C – Receivables and Deferred Revenue. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 40

D – Restricted Cash and Investments . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 43

E – Investment in Joint Ventures. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 43

F – Investment in Direct Financing Leases . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 45

G – Capital Assets . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 46

H – Long Term Debt . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 49

I – Defeased and Refunded Debt . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 61

J – Capital Lease Obligations . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 61

K – Interfund Receivables, Payables and Advances . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 63

L – Interfund Transfers. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 64

M – Stewardship, Compliance and Accountability . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 64

N – Insurance/Risk Management . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 65

O – Commitments and Contingencies . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 68

P – Employee Retirement Plans . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 69

Q – Deferred Compensation Plans . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 76

R – Other Post Employment Benefits . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 76

S – Fund Balance and Net Position. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 80

T – Subsequent Events . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 81

U – Special Item . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 81

22


NOTES TO THE FINANCIAL STATEMENTS

SEPTEMBER 30, 2016

NOTE A - SIGNIFICANT ACCOUNTING POLICIES

The City of West Palm Beach (the “City”) was incorporated under the General Law of the State of Florida on

November 5, 1894. The first Charter was granted by Chapter 5367, Laws of Florida, in 1903 and became

effective September 18 of that year. The City is governed by a mayor and a five-member board of

commissioners (the “City Commission”), all of which are elected City-wide by vote of City residents. The City

operates under a strong mayor form of government. The City provides services as listed in the Statement of

Activities.

The financial statements of the City have been prepared in accordance with generally accepted accounting

principles (“GAAP”) as applied to governmental units. The Governmental Accounting Standards Board

(“GASB”) is the standard setting body for governmental accounting and financial reporting. The following is a

summary of the City’s significant accounting policies.

1. Reporting entity

As required by accounting principles generally accepted in the United States of America, the accompanying

financial statements present the City and its component units (entities for which the City is considered to be

financially accountable). Blended component units, while legally separate entities, are in substance part of the

government’s operations. Therefore, data from these units are presented with data of the City (the primary

government). Each blended component unit has a September 30 year end. The City had no discretely presented

component units.

Blended Component Units: The Community Redevelopment Agency of West Palm Beach (“CRA”) was

established September 10, 1984 by the City under Ordinance No 1805-84 (Redevelopment Act) pursuant to the

“Community Redevelopment Act of 1969” and Chapter 163, Part III of the Florida Statutes. The five City

commissioners are board members of the CRA. The CRA Board appoints the board chairman and the vice

chairman. The director of the CRA reports to the City Administrator, so the primary government has direct

operational responsibility for the CRA. In addition, the City Finance Director serves as the CRA treasurer. The

CRA has two redevelopment areas, each of which is presented as a major governmental fund. The two funds

are the City Center Community Redevelopment Agency Fund ("City Center CRA Fund") and the

Northwood/Pleasant City Community Redevelopment Agency Fund ("Northwood/Pleasant City CRA Fund").

The West Palm Beach Municipal Golf Course (the “Golf Course”) is a legally separate dependent special district

created in February 1993 by City of West Palm Beach Ordinance 2609-93. The Golf Course was formerly

governed by the West Palm Beach Golf Commission, whose members were appointed by the City Commission

from a slate of candidates supplied by the Golf Commission. On November 3, 2003, the City Commission

passed Emergency Ordinance E01-03 (the “Ordinance”) which suspended the West Palm Beach Golf

Commission as of November 24, 2003. The Ordinance established the City Commission as the interim

governing body of the Golf Course. Because the Golf Course shares a common governing body with the City

and the City’s management has operational responsibility for the Golf Course, it is reported in these financial

statements as a blended component unit, specifically a non-major enterprise fund.

23

CITY OF WEST PALM BEACH, FLORIDA Notes to the Financial Statements

September 30, 2016

NOTE A - SIGNIFICANT ACCOUNTING POLICIES - CONTINUED

Pension Trust Funds: The West Palm Beach Restated Employees’ Defined Benefit Retirement System

(“Restated Employees’ Retirement System”), the West Palm Beach Firefighters’ Pension Fund (“Firefighters’

Pension”), and the West Palm Beach Police Pension Fund (“Police Pension”) (collectively, the “Pension Trust

Funds”) are each separate entities established to account for the financial activity of the separate pension plans.

A board of trustees governs each plan. The board of the Restated Employees’ Retirement System is comprised

of the Mayor, or designee, City Administrator, or designee, Finance Director, or designee, a citizen appointed by

the Mayor and approved by the Commission, two members elected by the plan participants, and one retiree

elected by the retirees. The Firefighters’ Pension and Police Pension boards are each comprised of five

members, two are elected by and from the plan membership, two are citizens of the City appointed by the Mayor

and one is elected by the other four members. Although each plan is administered by its respective Board of

Trustees, the Pension Trust Funds are fiscally dependent on the City. The City is obligated to fund liabilities of

each pension system based upon actuarial valuations.

The Pension Trust Funds and the OPEB Trust Fund are accounted for as pension trust (fiduciary) funds and are

not incorporated into the government-wide statements except as described below. Actuarial data for these funds

is disclosed in the notes to the financial statements and in the Required Supplementary Information section. In

accordance with GASB 68, the net pension liability and the annual pension expense for the Pension Trust Funds

(excluding the OPEB Trust Fund) are reported in the Government-Wide financial statements and in the fund

level Enterprise Fund statements, as appropriate. The Pension Trust Funds and the OPEB Trust Fund constitute

all funds included in the accompanying statements of fiduciary net position and changes in fiduciary net position

under the Pension Trust Funds caption.

Other Related Organizations: The West Palm Beach Downtown Development Authority ("DDA") is a separate

legal entity. DDA members are appointed by the Mayor and ratified by the City Commission and may be

removed for cause by a four-fifths majority. There is no financial benefit or burden to the City and the City has

no authority over day-to-day operations. The West Palm Beach Housing Authority ("Housing Authority") is also

a separate legal entity. Housing Authority commissioners are appointed by the Mayor and approved by the City

Commission. There is no financial benefit or burden to the City and the City has no authority over day-to-day

operations. As such, neither of these organizations is included in the accompanying financial statements.

2. Government-wide and fund financial statements

The government-wide financial statements (the statement of net position 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 eliminated from these statements. Notable exceptions are

payments-in-lieu of taxes and other charges of the City’s water and sewer function and the City’s parking

function to the various other functions of the City. Elimination of these charges would distort the direct costs

and program revenues reported for the various functions concerned. 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 expenses which are clearly identifiable with a

specific function or segment. Program revenues include 1) charges to customers or applicants who purchase,

use or directly benefit from goods, services, or privileges provided by a given function or segment and 2) grants

and contributions that are restricted to meeting the operational or capital requirements of a particular function or

segment. Taxes and other items not properly included among program revenues are reported instead as general

revenues.

24


September 30, 2016


Separate fund financial statements are provided for governmental funds, proprietary funds and fiduciary funds.

Fiduciary funds and component units that are fiduciary in nature (i.e. the Pension and OPEB Trust Funds) are

excluded from the government-wide financial statements. Major individual governmental funds and major

individual enterprise funds are reported as separate columns in the fund financial statements.

Since the governmental fund financial statements are presented on a different measurement focus and basis of

accounting than the government-wide statements’ governmental activities column, a reconciliation is presented

on the page following each statement, which briefly explains the adjustments necessary to reconcile the fund

based financial statements to the governmental activities column of the government-wide presentation.

Internal Service Funds of a government (which traditionally provide services primarily to other funds of the

government) are presented in summary form as part of the proprietary fund financial statements. Since the

principal users of the internal services are the City’s governmental activities, financial statements of internal

service funds are consolidated into the governmental activities column when presented at the governmental-

wide level. To the extent possible, the costs of these services are reflected in the appropriate governmental

activities.

3. Measurement focus, basis of accounting, and financial statement presentation

Government-wide financial statements, proprietary fund financial statements and fiduciary fund financial

statements: The government-wide, proprietary fund and fiduciary fund financial statements are reported using

the economic resources measurement focus and the accrual basis of accounting. Revenues are recorded when

earned and expenses are recorded when a liability is incurred. 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 have been met.

Governmental 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 when earned, measurable, and available to finance expenditures of the current period. Revenues are

considered to be available for the current period when they are collected within the fiscal year being reported on

or soon enough thereafter to pay liabilities of that fiscal year. The City considers revenues, other than those

related to state and federal expenditure driven grants, to be available if they are collected within 60 days of the

end of the fiscal year being reported on. Revenues related to expenditure driven grants are considered to be

available when collected within one year of the end of the fiscal year. 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. Expenditures related to pension and other postemployment benefits are recognized when the City has made

a decision to fund those obligations with current available resources.

Property taxes when levied for the fiscal year, public service taxes, franchise taxes, intergovernmental revenues

for which eligibility requirements have been met, charges for services such as licenses, refuse, and recycling

and interest income associated with the current fiscal period are all considered to be measurable and have been

recognized as revenues of the period, if available. Only the portion of special assessments due within the

current period is considered to be susceptible to accrual as revenue of the current period. All other revenue

items are considered to be measurable only when cash is received by the government.

25


September 30, 2016


Major Funds and Basis of Presentation: The financial transactions of the City are recorded in individual

funds. Each fund is accounted for by providing a separate set of self-balancing accounts comprised of assets,

deferred outflows, liabilities, deferred inflows, fund balance or net position, revenues, and expenditures or

expenses. These funds are segregated for the purpose of carrying on specific activities or attaining certain

objectives in accordance with special regulations, restrictions or limitations.

Accounting principles generally accepted in the United States of America set forth minimum criteria (percentage

of the assets plus deferred outflows, liabilities plus deferred inflows, revenues or expenditures/expenses of either

fund category and the governmental and enterprise combined), for the determination of major funds. The City

electively added funds, as major funds, which either have significant outstanding debt proceeds or a specific

community focus. The aggregated non-major funds are presented in one column in the fund financial

statements.

The City reports the following major governmental funds:

The General Fund is the City’s primary operating fund. It accounts for all financial resources of the general

government, except those accounted for in another fund. Revenue is derived primarily from property taxes,

state and federal distributions, grants and other intergovernmental revenue. The general operating

expenditures, fixed charges and capital outlay costs that are not paid through other funds are paid from the

General Fund.

The Community Redevelopment Agency Fund accounts for revenue received from tax increment financing.

The fund is restricted for carrying out redevelopment activity in the designated downtown redevelopment

area.

The Northwood/Pleasant City CRA Fund accounts for revenue received from tax increment financing.

These funds are restricted for carrying out redevelopment activity in the Northwood/Pleasant City

designated area. While not required to be a major fund, this fund is deemed a major fund and is reported

separately due to its high level of public interest.

The 2016B Capital Projects Fund accounts for proceeds from the 2016B Special Obligation bond issue.

Proceeds will be used for various capital improvements and capital purchases as outlined in the issue’s

Official Statement.

The City reports the following major proprietary funds:

The Water and Sewer System Fund accounts for the activities related to providing water and sewer services

to the public.

The Stormwater Systems Fund was established to maintain the City’s canals, basins and storm sewers.

In addition, the City reports the following other funds.

Internal Service Funds account for services provided to other departments of the City on a cost reimbursement

basis. These services include information technology, fleet management, risk management and insurance

(employee life/health insurance, workers’ compensation, general liability insurance, and property insurance),

vehicle fleet replacement, and technology replacement.

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September 30, 2016


The Pension Trust Funds account for the activities of the Restated Employees’ Retirement System, the

Firefighters’ Pension, and the Police Pension, which accumulate resources for pension benefit payments.

In 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, 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 operating revenues and expenses from non-operating items. Operating revenues

and expenses generally result from providing services and producing and delivering goods in connection with a

proprietary fund’s principal ongoing operations. The principal operating revenues of the enterprise funds and

the internal service funds are charges to customers for sales and services. The Water and Sewer System 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 enterprise funds and internal service 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 non-operating revenues and expenses.

The City has an indirect cost allocation study done each year which is used to allocate General Fund

administrative service fees to the other operating funds. These fees provide reimbursements for activities and

services funded by the General Fund such as finance, human resources, procurement, legal services, and general

administration. The fees are included in the revenue section of the General Fund Statement of Revenues,

Expenditures and Changes in Fund Balance – Budget and Actual. However, for the General Fund Statement of

Revenues, Expenditures and Changes in Fund Balances (GAAP basis), the fees have been treated as

reimbursements of expenses from the other funds by reducing both the revenues and expenditures of the General

Fund.

4. Assets, liabilities, deferred outflows/inflows of resources and net position/fund balance

a. Cash and Cash Equivalents

The City maintains a cash and investment pool available for use by all funds. The City’s cash and investment

pool allows individual funds, at any time, to deposit additional cash or make withdrawals without prior notice or

penalty. Cash and cash equivalents reported in the government-wide financial statements include cash on hand,

all highly liquid deposits, and investments with maturities of three months or less as of the date of purchase.

Interest earned on pooled cash and investments is allocated to funds based on average weekly balances. The

City's banking contract requires that a compensating balance be maintained. This balance is adjusted quarterly

based on charges for services utilized by the City in the prior quarter and the City's earnings credit rate (an

interest factor on collected funds.

b. Investments

For all funds except the Pension and OPEB Trust Funds, investments are guided by the City’s adopted

Investment Policy. The City's investment portfolio is held by a trust custodian. Investment decisions for the

City’s portfolio of cash and investments are made by a team of three investment managers. The investment

managers are under the direction of the City’s Investment Committee whose voting members include the City

Administrator, Deputy City Administrator, Finance Director, Accounting Manager, and Budget Manager. Assets

of the Restated Employees’ Retirement System are invested in accordance with specific investment policies and

objectives included in Section 112.661 of the Florida Statutes, which establishes investment guidelines for

Florida municipal employee pension funds.

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September 30, 2016


Assets of the Firefighters’ Pension Fund and the Police Pension Fund are invested in accordance with Chapter

175 and Chapter 185, Florida Statutes. Permissible investments of the Firefighters’ and Police Pension Funds

include obligations of the U.S. Treasury and U.S. agencies, high capitalization common or preferred stocks,

pooled equity funds, high quality bonds or notes and fixed income funds, real estate and derivative investments.

In addition, the governing boards of the Firefighters’ and Police Pensions requires that plan assets be invested

with no more than 70% in stocks and convertible securities measured at market value at the end of each reporting

period. For all funds, purchases and sales of investments are recorded on the trade dates and not on the

settlement dates. Net realized gains and losses on sales of investments are reflected in current operating results

as investment earnings along with interest and dividends. Investments are stated at fair value and are classified

as to the method, or level, used to determine the fair value. Level 1 valuations are based on quoted prices in

active markets for identical assets. Level 2 valuations are based on significant observable prices for similar

assets. Level 3 valuations are based on significant unobservable data, such as projected cash flows.

c. Interfund Receivables and Payables

During the course of its operations, the City has numerous transactions between funds to provide services,

construct assets and service debt. To the extent that certain transactions between funds were not paid for or

received by the end of the fiscal year, balances of interfund receivables and payables expected to be liquidated

within one year have been recorded as due from and due to other funds. Balances of interfund receivables and

payables not expected to be liquidated within one year are recorded as advances to and advances from other

funds. Balances of advances to other funds are classified as non-spendable in the fund balances of the respective

governmental funds.

d. Other Receivables

All trade, property tax and mortgages receivable on the Statement of Net Position are shown net of an allowance

for uncollectibles. Management determines the allowance based on a review of accounts and their knowledge of

the creditors and their ability to pay. Delinquent property tax receivables are all included in the allowance for

uncollectibles. Mortgages and other long-term receivables are analyzed for collectability based on terms and

conditions of the agreements and are included in the allowance for uncollectibles if deemed appropriate.

e. Inventories

Inventories are stated at the lower of cost or market value. Perpetual inventory records are maintained and

adjusted periodically to physical inventory amounts. Inventory is accounted for using the consumption method

whereby inventories are recorded as expenditures when they are used.

f. Prepaid Items

Material amounts of expenditures for goods or services extending over more than one accounting period are

accounted for as prepaid items and allocated between accounting periods.

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September 30, 2016

NOTE A - SIGNIFICANT ACCOUNTING POLICIES – CONTINUED

g. Restricted Assets

Proceeds of the City’s enterprise fund revenue bonds, as well as other resources set aside in accordance with

bond covenants or law are classified as restricted on the fund level Statement of Net Position of the enterprise

funds. Restricted long-term assets are not required to be presented on the balance sheets of the governmental

funds under the modified accrual basis of accounting; however, certain assets of these funds are restricted as to

use.

h. Capital Leases

The City has entered into several significant leasing arrangements constituting capital leases for which the City

is the lessee.

i. Investment in Joint Ventures

The City accounts for its investments in joint ventures in accordance with the agreements creating the ventures.

j. Capital Assets

Capital assets are stated at historical cost or, if donated, fair value at the date of donation and are reported in the

applicable governmental or business-type activities columns in the government-wide financial statements and

proprietary fund financial statements. The City capitalizes all acquisitions of tangible and intangible property

expected to be held for more than one year and which have a minimum cost of $25,000 for buildings and

infrastructure or a minimum cost of $10,000 for all other assets. Infrastructure assets are reported in the

government-wide and proprietary fund financial statements. Interest incurred during the construction phase of

capital assets of the business-type activities, net of related interest revenue, is included as part of the capitalized

value of the assets constructed.

Expenditures that materially extend the useful life of existing properties are capitalized. The cost of property

sold or retired, together with the related accumulated depreciation, is removed from the appropriate accounts,

and any resulting gain or loss is included in change in net position.

Depreciation on property, plant and equipment is recorded in the Proprietary Fund statements and in the

Government-Wide Statement of Activities. It is computed using the straight-line method over the estimated

useful lives of the related assets which are:

Years

Equipment 5 to 10

Buildings 20 to 40

Other improvements 15 to 40

Infrastructure of enterprise funds 40

Other infrastructure 30

Intangibles (primarily software) 5

In governmental funds, the acquisition or construction costs of capitalized assets are reported as expenditures

and no depreciation is recorded.

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September 30, 2016


k. Deferred Outflows of Resources

In addition to assets, the statement of net position reports a separate section for deferred outflows of resources.

This separate financial statement element, deferred outflows of resources, represents a consumption of net

position that applies to a future period(s) and so will not be recognized as an outflow of resources

(expense/expenditure) until that time. Examples of deferred outflows include employer contributions to

pensions made after the actuarial measurement date, differences between expected and actual investment returns

on pension assets, and pension liability changes resulting from changes in actuarial assumptions.

l. Compensated Absences

Employees earn vacation and sick leave in varying amounts based on length of service. Upon termination,

employees are paid 100% of accumulated vacation (and similar leave types) at current base hourly rates.

Vacation accumulation is capped at a maximum number of hours depending on employee category and

bargaining unit. Employees who are categorized as confidential and those who are in the NCFO/SEIU

bargaining unit are compensated for accumulated sick leave, not to exceed 960 hours, upon termination of

employment as follows: after 15 or more years of service compensation is at 75% of the employee’s current

hourly rate of pay and after 10 years but less than 15 years of service, compensation is at 50% of employee’s

current hourly rate of pay. All other City employees are compensated for accumulated sick leave, not to exceed

960 hours, upon termination after at least 10 years of service at a rate of 50% of the employee’s current hourly

rate of pay. The current portion of compensated absences payable is the amount estimated to be used or paid in

the following fiscal year. The liability for earned compensated absences is reported at the government-wide

level and in the proprietary fund financial statements. In governmental funds, a liability is only recorded for

amounts due as a result of employee resignations or retirement.

m. Long-Term Obligations

In the government-wide and the proprietary fund financial statements, long-term debt and other long-term

obligations are reported as liabilities on the government-wide and proprietary fund Statements of Net Position.

Debt premiums and discounts are netted against the debt payable. On the government-wide and proprietary

fund operating statements, debt premiums and discounts are deferred and amortized over the life of the debt

using the effective interest method. Bond issuance costs, except for prepaid bond insurance, are recognized as

an expenses/expenditures in the reporting period in which they are incurred. Debt refunding gains and losses are

reported as deferred inflows or outflows of resources on the Statements of Net Position. These gains and losses

are deferred and amortized over the shorter of the life of the refunding debt (new debt) or the refunded debt (old

debt). Payment of debt principal in governmental funds is reported as an expenditure.

n. Deferred Inflows of Resources

In addition to liabilities, the statement of net position reports a separate section for deferred inflows of resources.

This separate financial statement element, deferred inflows of resources, represents an acquisition of net position

that applies to a future period(s) and so will not be recognized as an inflow of resources (revenue) until that

time. Examples of deferred inflows include differences between expected and actual investment returns on

pension assets and pension liability changes resulting from changes in actuarial assumptions.

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September 30, 2016


o. Net Position Flow Assumption

Sometimes the City will fund outlays for a particular purpose from both restricted and unrestricted resources. In

order to calculate the amounts to report as restricted and unrestricted net position in the government-wide and

proprietary fund financial statements, a flow assumption must be made about the order in which the resources

are considered to be applied. It is the City’s policy to consider restricted net position to have been depleted

before unrestricted net position.

p. Fund Balance Flow Assumption

Sometimes the City will fund outlays for a particular purpose from both restricted and unrestricted resources

(the total of committed, assigned, and unassigned fund balance). In order to calculate the amounts to report as

restricted, committed, assigned, and unassigned fund balance in the governmental fund financial statements, a

flow assumption must be made about the order in which the resources are considered to be applied. It is the

City’s policy to consider restricted fund balance to have been depleted before using any of the components of

unrestricted fund balance. Further, when the components of unrestricted fund balance can be used for the same

purpose, committed fund balance is depleted first, followed by assigned fund balance. Unassigned fund balance

is applied last.

q. Fund Balance Policies

In the fund financial statements, governmental funds report fund balance classifications based on the level of

constraint on the resources. Amounts which are restricted to specific purposes either by (a) constraints placed

on the use of resources by creditors, grantors, contributors, or laws or regulations of other governments or (b)

imposed by law through constitutional provisions or enabling legislation -- are classified as restricted fund

balances. Amounts which can only be appropriated, modified, or rescinded for specific purposes pursuant to

constraints imposed by the City Commission through an ordinance are classified as committed fund balances.

An ordinance is the highest level of decision making authority and requires two City Commission “readings”

(votes) to effect or rescind. Amounts which are constrained by the City’s intent to be used for specific purposes

but are neither restricted nor committed are classified as assigned fund balances. Assigned fund balances

include the appropriation of fund balances to eliminate projected deficits in the subsequent fiscal year’s budget.

Non-spendable fund balances include amounts which cannot be spent because they are either (a) not in

spendable form, or (b) legally or contractually required to be maintained intact.

Unassigned fund balance represents fund balance which has not been assigned to other funds and which has not

been restricted, committed, or assigned to specific purposes within the general fund.

r. Minimum Fund Balance

The duties, responsibilities, and powers of the City’s finance director include the establishment and maintenance

of the general fund balance representing an emergency reserve equivalent to 10% of total general fund revenue.

This reserve is reported as “committed” fund balance. For purposes of establishing the balance and maintenance

thereafter, the finance director shall transfer the calculated amount from unassigned fund balance to the

emergency reserve, to the extent available, to satisfy the requirement and shall report such balances as part of

the annual audited financial statement. If upon completion of any fiscal year the ending balance in such

emergency reserve is less than the requirement and sufficient monies do not exist in the unassigned fund

balance, then the finance director shall recommend an amendment to the current year budget and include in

succeeding fiscal year budgets reserved appropriations sufficient to cover the deficiency over a period not to

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September 30, 2016


exceed three fiscal years (deficiency requirement). The emergency reserve shall be used exclusively for

emergencies declared by the City Commission, and the appropriation therefrom shall be made by resolution

adopted by four-fifths vote of the commission. Any monies available in the unassigned fund balance shall be

used prior to using the emergency reserve to fund authorized emergencies.

The duties, responsibilities, and powers of the City finance director also include the establishment of an

unassigned general fund balance equivalent to a minimum of 3% of total general fund revenue. If upon

completion of any fiscal year, the ending balance in the unassigned fund balance is less than the minimum

requirement, then the finance director shall recommend an amendment to the current year budget and include in

succeeding fiscal year budgets reserve appropriations sufficient to cover the deficiency over a period not to

exceed five fiscal years (deficiency requirement). Appropriation from the minimum balance shall require City

Commission approval and shall generally be for one-time expenditures such as capital purchases and not for

ongoing expenditures unless a viable revenue plan designed to sustain the expenditures is approved.

s. Net Position

Net position of the government-wide and proprietary funds is categorized as net investment in capital assets,

restricted or unrestricted. The “net investment in capital assets” component of net position consists of property,

plant, equipment and infrastructure reduced by depreciation, outstanding debt, and deferred outflows or inflows

used to construct or purchase the capital asset. The “restricted” component of net position consists of restricted

assets less liabilities and deferred inflows of resources related to those assets. Restricted assets are those with

limits on their use that are externally imposed (by creditors, grantors, contributors, or the laws or regulations of

other governments), or that are imposed by the City’s own constitutional provisions, or by enabling legislation.

The “unrestricted” component of net position represents the remainder of the assets, deferred outflows of

resources, liabilities, and deferred inflows of resources. Designations of unrestricted net position, representing

management’s intentions for the use of resources, are not reported in the statement of net position.

5. Other policies

Property Tax Calendar

The City levies property taxes each October 1. During the month of November, the Palm Beach County Tax

Collector’s Office prepares and delivers a Notice of Property Taxes and Non-Ad Valorem Assessments to each

taxpayer listed on the current year’s assessment roll.

On any property against which the taxes have been assessed, the Notice of Property Taxes and Non-Ad Valorem

Assessments is recognized as a first lien and is superior to all other liens. The lien continues in full force from

January 1 of the year in which the taxes were levied until discharged by payment. Market values of taxable

property are determined by the Palm Beach County Property Appraiser as of January 1 each year.

All taxes are due from property owners by March 31. Taxes become delinquent on April 1 and are subject to the

issuance of tax sale certificates if unpaid by June 1. Property tax revenue is subject to accrual when levied. At

September 30, unpaid delinquent taxes are reflected as a receivable on the balance sheet.

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Use of Estimates

The preparation of financial statements in conformity with accounting principles generally accepted in the

United States of America requires management to make estimates and assumptions that affect the reported

amounts of assets, deferred outflows of resources, liabilities, deferred inflows of resources, revenues, and

expenditures/expenses. Actual results differ from those estimates. Significant estimates used in these financial

statements include the amount of insurance claims payable, actuarial assumptions related to benefit plans, and

allowances for uncollectible accounts.

6. Pronouncements issued and adopted by the City

GASB Statement No. 72, Fair Value Measurement and Application. This Statement addresses accounting and

financial reporting issues related to fair value measurements. The definition of fair value is the price that would

be received to sell an asset or paid to transfer a liability in an orderly transaction between market participants at

the measurement date. This Statement provides guidance for determining a fair value measurement for financial

reporting purposes and applying fair value to certain investments and disclosure related to all fair value

measurements. The requirements of this Statement are effective for fiscal years beginning after June 15, 2015.

This statement has not materially impacted the city’s financial statements. However, increased disclosure of fair

value measurement methods and sources of pricing data has occurred as a result of this Statement.

GASB Statement No. 73, Accounting and Financial Reporting for Pensions and Related Assets That Are Not

within the Scope of GASB Statement 68, and Amendments to Certain Provisions of GASB Statements 67 and 68.

This Statement establishes requirements for defined benefit pensions that are not within the scope of Statement

68 as well as for the assets accumulated for purposes of providing those pensions. In addition, it establishes

requirements for defined contribution pensions that are not within the scope of Statement 68. It also amends

certain provisions of Statements 67 and 68 for pension plans and pensions that are within their respective

scopes. The requirements of this Statement that address accounting and financial reporting by employers and

governmental non-employer contributing entities for pensions that are not within the scope of Statement 68 are

effective for financial statements for fiscal years beginning after June 15, 2016. The requirements of this

Statement that address financial reporting for assets accumulated for purposes of providing those pensions are

effective for fiscal years beginning after June 15, 2015. The requirements of this Statement for pension plans

that are within the scope of Statement 67 or for pensions that are within the scope of Statement 68 are effective

for fiscal years beginning after June 15, 2015. This statement has not materially impacted the city’s financial

statements.

GASB Statement No. 76, The Hierarchy of Generally Accepted Accounting Principles for State and Local

Governments. The objective of this Statement is to identify—in the context of the current governmental

financial reporting environment—the hierarchy of generally accepted accounting principles (GAAP). The

“GAAP hierarchy” consists of the sources of accounting principles used to prepare financial statements of state

and local governmental entities in conformity with GAAP and the framework for selecting those principles. This

Statement reduces the GAAP hierarchy to two categories of authoritative GAAP and addresses the use of

authoritative and non-authoritative literature in the event that the accounting treatment for a transaction or other

event is not specified within a source of authoritative GAAP. This Statement supersedes Statement No. 55, the

Hierarchy of Generally Accepted Accounting Principles for State and Local Governments. The requirements of

this Statement are effective for financial statements for periods beginning after June 15, 2015 and should be

applied retroactively. This statement has not materially impacted the city’s financial statements.

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September 30, 2016


GASB Statement No. 79, Certain External Investment Pools and Pool Participants. This Statement addresses

accounting and financial reporting for certain external investment pools and pool participants. Specifically, it

establishes criteria for an external investment pool to qualify for making the election to measure all of its

investments at amortized cost for financial reporting purposes. An external investment pool qualifies for that

reporting if it meets all of the applicable criteria established in this Statement. The requirements of this

Statement are effective for reporting periods beginning after June 15, 2015, except for the provisions in

paragraphs 18, 19, 23–26, and 40, which are effective for reporting periods beginning after December 15, 2015.

This statement has not materially impacted the city’s financial statements.

Other GASB statements in the numerical range from 72 thru 79 (i.e., 74, 75, 77 and 78) and beyond that range

will be adopted as required in future years.

NOTE B – DEPOSITS AND INVESTMENTS

The City maintains a cash and investment pool that is used by all funds except the Pension and OPEB Trust

Funds. Certain of the City's Governmental and Enterprise funds also hold separate cash and investment

accounts. Deposits and investments of the Pension and OPEB Trust Funds are held separately from those of

other City funds and follow different investment policies.

Cash

The City’s cash deposits are held by banks that qualify as public depositories under the Florida Security for

Public Deposits Act as required by Chapter 280, Florida Statutes. As such, the City’s cash deposits are fully

insured by the Public Deposits Trust Fund.

At September 30, 2016, the city was required to maintain a compensating balance of $51,485,490 at JP Morgan

Chase, which is the city’s primary bank. Maintaining this minimum balance allows the city to avoid bank fees

and to earn higher rates of interest on deposits.

Authorized Investments and Credit Risk

The City adheres to an investment policy that conforms to state statutes. The City has no formal policy relating

to foreign currency risk. For the year ended September 30, 2016 the City had no investment exposure to foreign

currency. The City’s policy regarding derivative products specifically states that City Commission approval is

required prior to the use of derivatives. For the year ended September 30, 2016, the City had no investment

exposure to derivative products.

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September 30, 2016

NOTE B – DEPOSITS AND INVESTMENTS - CONTINUED

The City’s Investment Policy permits the following investments, which are limited to credit quality ratings from

Nationally Recognized Statistical Ratings Organizations (“NRSRO”) as follows:

U.S. Treasury obligations which are guaranteed by the full faith and credit of the United States with

maturities not to exceed ten years from the date of purchase.

Money Market Mutual Fund shares in open-end, no-load funds that are registered under the Federal

Investment Company Act of 1940 and operated in accordance with 17 C.F.R. § 270.2a-7. The prospectus of

such funds must indicate that the share value shall not fluctuate.

Intergovernmental Investment Pools that are authorized pursuant to the Florida Inter-local Cooperation Act,

as provided in Section 163.01, Florida Statutes and provided that said funds contain no derivatives.

Corporate obligations or notes issued by corporations organized and operating within the United States or by

depository institutions licensed by the United States that have a minimum long term debt rating, at the time

of purchase, of A or better by any Nationally Recognized Statistical Ratings Organization (“NRSRO”).

Maximum term for corporate notes and obligations shall be seven years.

In addition, under the Investment Policy, the Short Term and Long Term Portfolios may invest in the following

investments: U.S. Government Agencies, State and Local Government Debt, Commercial Paper rated “Prime-1”

by Moody’s and “A-1” by Standard & Poor’s or equivalent by another NRSRO, Banker’s Acceptances rated

Prime-1 by Moody’s and A-1 by Standard and Poor’s, Registered Investment Companies (Mutual Funds) rated

AAA or better by Standard & Poor’s.

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September 30, 2016

NOTE B – DEPOSITS AND INVESTMENTS – CONTINUED

Authorized Investments and Credit Risk - Continued

As of September 30, 2016, the City had the following cash and investment types and effective duration

presented in terms of years:

Custodial Credit Risk

Investments: Custodial credit risk is defined as the risk that, in the event of the failure of the counterparty, the

City will not be able to recover the value of its investment or collateral security that are in the possession of an

outside party. The City’s investment portfolio is held in safekeeping by SunTrust Bank, JP Morgan Chase

Bank, Wells Fargo Bank and TD Bank in the name of the City of West Palm Beach, thereby eliminating

exposure to custodial credit risk.

% of Duration Total Cash

Investment Vehicle Rating Portfolio Years Portfolio Equivalents Investments

Cash Deposits N/A 39.34% - 137,146$ 137,146$ -$

Money Market Funds AAA 11.46% - 39,963 39,963 -

US Treasuries AA+ 11.33% 3.070 39,509 - 39,509

Federal Instrumentalities AA+ 18.80% 1.594 65,548 - 65,548

Municipal Bonds AA+ 8.70% 1.704 30,330 - 30,330

Corporate Notes AA 5.17% 1.466 18,040 - 18,040

Commercial Paper AA 2.23% 0.491 7,761 - 7,761

Exchange Traded Funds (ETFs) N/R 2.96% - 10,332 - 10,332

100.00% 348,629$ 177,109$ 171,520$

Reconciliation of Portfolio to Statement of Net Position

Portfolio value 348,629$

Petty cash 28

OPEB cash and investments (11,604)

Total cash and investments on Statement of Net Position 337,053$

Amounts from Statement of Net Position

Unrestricted cash and cash equivalents 63,432$

Unrestricted investments 90,673

Restricted cash with paying agent 9,826

Restricted cash and cash equivalents 96,032

Restricted investments 77,090

Total cash and investments on Statement of Net Position 337,053$

Dollar amounts are in thousands

Credit Risk Fair Value as of September 30, 2016

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September 30, 2016


Interest Rate Risk: The City’s Investment Policy sets limits for investment maturities to match known cash

needs and cash flow requirements. Investments of current operating funds shall have maturities of no longer

than twenty-four (24) months. Investments of bond reserves, construction funds, and other non-operating funds,

“core funds”, shall have a term appropriate to the need for funds and in accordance with debt covenants, not to

exceed a maturity of five (5) years with an average duration of the portfolio as a whole not to exceed three (3)

years. The maturities of the underlying securities of a repurchase agreement will follow the requirements of the

Master Repurchase Agreement.

As of September 30, 2016, the City has no investments that have embedded options allowing the issuer to call

the obligation or demand a stated increase in the interest rate.

Effective Duration

Short Term Portfolio: As a means of limiting its exposure to fair value losses arising from rising interest rates,

the Investment Policy requires that 100% of the short term portfolio be invested in maturities of less than one

year.

Long Term Portfolio: As a means of limiting its exposure to fair value losses arising from rising interest rates,

the City’s Investment Policy requires that the duration of the long term portfolio not exceed three years.

Concentration of Credit Risk

The Investment Policy permits up to 50% of the portfolio to be invested in any single Federal Instrumentality.

As of September 30, 2016 investments in the following Federal Instrumentalities exceed 5% of the portfolio:

The Investment Policy has established asset allocation and issuer limits on the investment portfolio which are

designed to reduce the concentration of credit risk within the City’s investment portfolio.

(In thousands)

Investment Vehicle % of Portfolio Fair Value

US Treasury Notes 13.08% 39,509$

Federal National Mortgage Association 5.03% 17,524

Total 18.11% 57,033$

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September 30, 2016


A maximum of 20% of available funds may be invested in the Florida PRIME Fund, 100% of available funds

may be invested in United States Treasury Securities, 50% of available funds may be invested in United States

Government Agencies with a 25% limit on individual issuers, 80% of available funds may be invested in

Federal Instrumentalities with a 50% limit on individual issuers, 25% of available funds may be invested in non-

negotiable interest bearing time certificates of deposit with a 15% limit on individual issuers, 50% of available

funds may be invested in repurchase agreements excluding one (1) business day agreements and overnight

sweep agreements with a 25% limit on any one institution, 25% of available funds may be directly invested in

prime commercial paper with a 5% limit on individual issuers, 25% of available funds may be directly invested

in Bankers’ acceptances with a 5% limit on individual issuers, 20% of available funds may be invested in

taxable and tax-exempt debts with a limit of 20% on individual issuers, 40% of available funds may be invested

in mutual funds with a limit of 20% with any one non-SEC Rule 2a-7 investment mutual fund, 25% of available

funds may be invested in intergovernmental investment pools, 25% of available funds may be invested in

corporate obligations or corporate notes of US corporations with a limit of 5% with any one corporate note, and

30% of available funds may be invested in mortgage-backed securities with a limit of 20% invested with any

one MBS.

As of September 30, 2016, the City had the following issuer concentrations in the investment portfolio based on

fair value.

($ thousands)

Issuer Fair Value

% of

Portfolio

United States Government 39,509$ 23.0%

Federal National Mortgage Association 19,908 11.6%

Federal Farm Credit Bank 15,184 8.9%

Federal Home Loan Bank 14,859 8.7%

Federal Home Loan Mortgage Corporation 12,127 7.1%

Vanguard Exchange Traded Funds 10,332 6.0%

Washington State 3,913 2.3%

Other 55,688 32.4%

Total Investments 171,520$ 100.0%

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September 30, 2016


The City holds investments that are measured at fair value on a recurring basis. Because investing is not a core

part of the city’s mission, the city determines that the disclosures related to these investments only need to be

disaggregated by major type.

Accordingly, on September 30, 2016, the City categorized its investment portfolio using the fair value

measurements in GASB 72. GASB 72 uses a hierarchy which is based on the valuation inputs used to measure

the fair value of the asset. Level 1 inputs are quoted prices in active markets for identical assets; Level 2 inputs

are significant other observable inputs and Level 3 inputs are significant unobservable inputs. The table below

shows the City’s fair value measurements as of the aforementioned date.

Investment Type

Quoted Prices in

Active Markets for

Identical Assets

Significant Other

Observable

Inputs

Significant

Unobservable

Inputs Fair Value

Level 1 Level 2 Level 3 Total

Municipal Obligation -$ 30,330$ -$ 30,330$

Agency Bonds 64,680 868 - 65,548

US Treasuries 39,509 - - 39,509

Corporate Notes - 18,040 - 18,040

Commercial Paper - 7,761 - 7,761

Exchange Traded Funds - 10,332 - 10,332

104,189$ 67,331$ -$ 171,520$

Money Market Funds 39,963

Cash Deposits 137,146

Total cash and investments 348,629$

Dollar amounts are in thousands.

39


September 30, 2016

NOTE C – RECEIVABLES AND UNEARNED REVENUE

1. Receivables

Receivables as of year-end for the City’s governmental activities, individual major governmental funds, non-

major funds in the aggregate, internal service funds in the aggregate and applicable allowances for uncollectible

accounts are as follows:

Significant Uncollectibles

The allowance for accounts receivable in the General Fund includes $10.8 million for Emergency Medical

Services (“EMS”) receivables. This type of receivable typically experiences a low level of collectability beyond

one year since service cannot be denied based on nonpayment. The General Fund allowance also includes $1.25

million for delinquent property taxes (this represents 50% of the delinquent taxes receivable). In addition, an

allowance of $1.3 million is included for other miscellaneous billed receivables. The notes receivable of $15.3

million in the Nonmajor Governmental Funds is composed of mortgages containing covenants exempting

mortgages from repayment if certain conditions are met. In issuing these notes receivable, the primary emphasis

is on community development and repayment is a secondary consideration.

Northwood/ 2016 Capital Nonmajor Internal

General City Center Pleasant City Bond Governmental Service

Fund CRA Fund CRA Fund Fund Funds Funds Total

Receivables:

Accounts (gross) 26,500,651$ 90,064$ 4,978$ -$ 527,764$ 5,763,433$ 32,886,890$

Allowance (13,976,615) - - - (11,000) (41) (13,987,656)

Accounts (net) 12,524,036 90,064 4,978 - 516,764 5,763,392 18,899,234

Interest - Unrestricted 82,253 45,825 6,827 - 80,053 55,772 270,730

Notes (gross) 547,418 980,576 - - 15,253,748 - 16,781,742

Allowance (666,848) - - (12,212,862) - (12,879,710)

Notes (net) 547,418 313,728 - - 3,040,886 - 3,902,032

Liens (gross) 576,832 12,431 - - 526,932 - 1,116,195

Allowance - (11,429) - - - - (11,429)

Liens (net) 576,832 1,002 - - 526,932 - 1,104,766

Subtotal, Receivables - Unrestricted 13,730,539 450,619 11,805 - 4,164,635 5,819,164 24,176,762

Interest - Restricted - - - 12,475 - 13,633 26,108

Total Receivables 13,730,539$ 450,619$ 11,805$ 12,475$ 4,164,635$ 5,832,797$ 24,202,870$


40


September 30, 2016

NOTE C – RECEIVABLES AND UNEARNED REVENUE – CONTINUED

Receivables at year end for the City’s business-type activities are as follows:

Water and

Sewer Systems

Fund

Stormwater

System

Fund

Nonmajor

Enterprise

Funds Total

Receivables:

Accounts (gross) 11,109,540$ 2,345,033$ 54,017$ 13,508,590$

Allowance (394,233) (1,132,153) - (1,526,386)

Accounts (net) 10,715,307 1,212,880 54,017 11,982,204

Interest - Unrestricted 120,811 23,823 12,704 157,338

Liens (gross) 1,716,108 455,371 - 2,171,479

Allowance - - - -

Liens (net) 1,716,108 455,371 - 2,171,479

Subtotal, Receivables - Unrestricted 12,552,226 1,692,074 66,721 14,311,021

Interest - Restricted 237,607 14,289 - 251,896

Total Receivables 12,789,833$ 1,706,363$ 66,721$ 14,562,917$

Business-Type Activities

41


September 30, 2016

NOTE C – RECEIVABLES AND UNEARNED REVENUE – CONTINUED

2. Unearned/unavailable revenue

Unearned revenue from resources that have been received but not yet earned is reported on both the

government-wide Statement of Net Position and on the fund financial statements. The governmental fund

financial statements also report unavailable revenue from receivables for revenues that are not considered to be

available to liquidate liabilities of the current period. The components of unearned/unavailable revenue as of

September 30, 2016 are as follows:

General

Fund

City Center

CRA Fund

Northwood/

Pleasant City

CRA Fund

Nonmajor

Governmental

Funds Total

Revenues earned but not available:

Insurance premium tax -$ -$ -$ -$ -$

Liens and mortgages receivable 358,680 1,002 - 2,622,800 2,982,482

EMS receivables 2,742,900 - - - 2,742,900

Other receivables 3,208,848 315,741 4,978 - 3,529,567

Total Unavailable 6,310,428 316,743 4,978 2,622,800 9,254,949

Unearned revenues:

Prepaid Occupational Licenses 2,537,827 - - - 2,537,827

Prepaid Lease Payments 60,582 51,631 - 47,250 159,463

Grant receipts not yet earned 381,973 - - 645,847 1,027,820

Total Unearned 2,980,382 51,631 - 693,097 3,725,110

Total Unearned/Unavailable Revenue 9,290,810$ 368,374$ 4,978$ 3,315,897$ 12,980,059$

Governmental Funds

42


September 30, 2016

NOTE D – RESTRICTED CASH AND INVESTMENTS

Cash and investments in the enterprise funds at September 30, 2016 are restricted for the following purposes:

NOTE E – INVESTMENT IN JOINT VENTURES

East Central Regional Wastewater Treatment Facilities (“ECR”) - In September 1992, the City entered into

a joint interlocal agreement (“Agreement”) with Palm Beach County (the “County”) and three municipalities

(Riviera Beach, Lake Worth, and Town of Palm Beach) (together with the City, the “Entities”) whereby prior

separate agreements were consolidated into a single unified agreement to establish rules and procedures for the

operation and management of the existing ECR in which each participating Entity has an interest. ECR was

created to receive, treat, and dispose of sewage generated within each municipality and the County. The term of

the Agreement is for an initial period of thirty years with an option to renew for an additional thirty years upon

the mutual consent of the Entities, which option to renew has been exercised by the Entities. In the event ECR

is sold or disposed of, proceeds of the sale or disposition shall be prorated among the Entities, based on their

reserve capacity as of the date of disposition. The Agreement provides for the establishment of a Board (the

“Board”) comprised of one representative from each Entity participating in the Agreement to administer ECR.

Under the Agreement, the Board has the power to enter into contracts, employ personnel and enter into debt in

accordance with Section 163.01(7) of the Florida statutes. In accordance with the Agreement, the City operates

and manages ECR on behalf of the Board.

All costs of operating ECR, excluding non-cash expenditures, are shared by each of the Entities based on actual

flows of wastewater. Costs associated with capital projects, renewal and replacement and debt service are

shared among the participating governments based on their pro-rata share of reserve capacity except as noted

below.

Water

and Sewer Stormwater Non-Major

System System Enterprise

Purpose Fund Fund Funds Totals

Customer deposits 9,191,303$ -$ 24,454$ 9,215,757$

Operations and maintenance restricted

by revenue bond covenants 10,217,934 1,054,595 - 11,272,529

Revenue bond construction accounts 4,114,074 4,573,233 - 8,687,307

Revenue bond debt service accounts 13,720,703 3,597,818 - 17,318,521

Revenue bond renewal

and replacement accounts 71,926,876 2,739,004 - 74,665,880

Town of Palm Beach renewal

and replacement accounts 6,143,048 - - 6,143,048

Developer's hazard mitigation accounts 698,447 - - 698,447

Impact fee capital contributions account 5,249,341 - - 5,249,341

Total restricted assets 121,261,726$ 11,964,650$ 24,454$ 133,250,830$

43


September 30, 2016

NOTE E – INVESTMENT IN JOINT VENTURES - CONTINUED

The City recorded its initial investment at cost and records its ongoing financial interest as a proportion of

ECR’s net position as reported in the ECR’s most recent audited financial statements. The proportion is the

City’s reserve capacity share.

The City does not believe that the joint venture is accumulating significant financial resources or experiencing

financial stress that may cause a future benefit or burden to the City. The most recent audited financial

statements, for September 30, 2015, reported total ECR assets of $240,447,115 and total net position of

$106,484,674 including a $74,970,600 net investment in capital assets and $4,466,140 of unrestricted net

position. Complete financial statements for the ECR may be obtained at the City of West Palm Beach Finance

Department, 401 Clematis Street, West Palm Beach, Florida 33401.

The ECR Entities’ ownership interests at September 30, 2016 were:

Reserve

Capacity

Participant Percentages

City of West Palm Beach 29.28570%

Palm Beach County 34.28570%

City of Lake Worth 16.42860%

City of Riviera Beach 11.42860%

Town of Palm Beach 8.57140%

Total 100.00%

During fiscal year 2000, the City entered into an agreement with ECR concerning the construction, operation

and maintenance of a reclaimed water production facility. This equipment and structures are known as the

Advanced Water Treatment (“AWT”) facility. This facility was completed at the end of fiscal year 2006 and

treated ECR effluent in order to provide reusable water for the benefit of the City. Since it is constructed on

ECR land, the facility is considered ECR property with 100% of its capacity and beneficial interest allocated to

the City. In fiscal year 2014, the City ceased operation of the AWT and is currently evaluating alternatives for

the AWT’s future use.

At September 30, 2016, the city’s investments in ECR and AWT were reported at a book value of $29,921,207

and $8,845,768 respectively.

44


September 30, 2016

NOTE E – INVESTMENT IN JOINT VENTURES - CONTINUED

Municipal Public Safety Communications Consortium of Palm Beach County (MPSCC) - In December

1999, the City entered into an interlocal agreement with other cities and towns in Palm Beach County to

purchase and operate a county-wide public safety communications system. The interlocal agreement established

the MPSCC whose purpose is to provide its members with expanded radio communications services (via the

800MHz trunked radio system) to aid in public safety over a larger geographical region. The MPSCC is a cost

sharing organization. Its annual budget is prepared by the Executive Director and approved by the Board of

Directors. The member municipalities of the MPSCC are obligated for the debt incurred by the consortium and

each municipality is responsible for their respective portion of costs incurred by the MPSCC. The City’s 2006

initial investment in this joint venture was $3,577,000 which represents 73% of the total consortium investment.

During fiscal year 2016, member costs for the City were $100,000 and the year end value of the City's

investment was $788,826. The City’s investment and related member costs are recorded in the MIS Processing

Fund which is an Internal Service Fund.

NOTE F – INVESTMENT IN DIRECT FINANCING LEASES

On April 15, 1998, City Place Partners entered into several lease agreements with the City Center CRA for CRA

owned property in the area now known as CityPlace. For accounting purposes, these leases were classified as

direct financing leases. The leases were refinanced in 2010 and the payment schedule for the one remaining

lease was based upon the CityPlace CRA portion of Revenue Refunding Bond Series 2010B. As of August 1,

2016, the 2010B bond was paid off in full.

45


September 30, 2016

NOTE G – CAPITAL ASSETS

Capital asset activity for the year ended September 30, 2016 was as follows:

Beginning Retirements Ending

Balance Additions And Transfers Balance

Governmental Activities:

Capital assets not being depreciated:

Land 79,009,581$ 4,808,692$ -$ 83,818,273$

Construction in progress 8,837,454 11,352,904 (3,325,018) 16,865,340

Total capital assets not being depreciated 87,847,035 16,161,596 (3,325,018) 100,683,613

Capital assets being depreciated:

Buildings 193,564,892 2,533,783 (43,045) 196,055,630

Improvements other than buildings 173,832,140 2,545,504 (20,800) 176,356,844

Infrastructure 137,776,600 328,495 - 138,105,095

Equipment 49,544,927 3,759,807 (2,810,177) 50,494,557

Intangible Assets 4,189,592 24,592 - 4,214,184

Total capital assets being depreciated 558,908,151 9,192,181 (2,874,022) 565,226,310

Less accumulated depreciation and amortization:

Buildings 48,004,583 4,865,017 (7,307) 52,862,293

Improvements other than buildings 87,399,854 10,492,711 (1,387) 97,891,178

Infrastructure 121,415,761 3,442,410 - 124,858,171

Equipment 36,311,058 3,682,822 (2,821,115) 37,172,765

Intangible Assets 4,076,606 44,152 - 4,120,758

Total accumulated depreciation and amortization 297,207,862 22,527,112 (2,829,809) 316,905,165

Total capital assets being depreciated, net 261,700,289 (13,334,931) (44,213) 248,321,145

Governmental activities capital assets, net 349,547,324$ 2,826,665$ (3,369,231)$ 349,004,758$

Business-Type Activities:

Capital assets not being depreciated:

Land:

Water and Sewer Systems Fund 6,268,750$ -$ -$ 6,268,750$

Nonmajor Funds 4,130,556 - - 4,130,556

Total Land 10,399,306 - - 10,399,306

Construction in Progress:

Waterworks and Sewage Disposal System 54,313,250 26,910,353 (51,577,433) 29,646,170

Stormwater System 17,135,982 2,371,726 (13,296,815) 6,210,893

Nonmajor Funds 154,802 526,610 - 681,412

Total Construction in Progress 71,604,034 29,808,689 (64,874,248) 36,538,475

Total capital assets not being depreciated 82,003,340 29,808,689 (64,874,248) 46,937,781

Continued

46


September 30, 2016

NOTE G – CAPITAL ASSETS – CONTINUED

Beginning Retirements Ending

Balance Additions And Transfers Balance

Business-Type Activities - Continued:

Capital assets being depreciated:

Buildings:

Water and Sewer System 89,594,267$ -$ 18,045$ 89,612,312$

Nonmajor Funds 9,565,093 - - 9,565,093

Total Buildings 99,159,360 - 18,045 99,177,405

Infrastructure:

Water and Sewer System 359,511,198 51,225,712 410,736,910

Stormwater System 61,504,203 13,125,307 (400) 74,629,110

Nonmajor Funds 6,754,871 - - 6,754,871

Total Infrastructure 427,770,272 64,351,019 (400) 492,120,891

Equipment:

Water and Sewer System 12,416,941 1,069,518 (627,268) 12,859,191

Stormwater System 3,446,098 523,086 (267,592) 3,701,592

Nonmajor Funds 2,867,863 145,966 (275,562) 2,738,267

Total Equipment 18,730,902 1,738,570 (1,170,422) 19,299,050

Intangible:

Water and Sewer System 159,679 - 159,679

Stormwater System - - - -

Nonmajor Funds - - - -

Total Intangible 159,679 - - 159,679

Total capital assets being depreciated 545,820,213 66,089,589 (1,152,777) 610,757,025

Less accumulated depreciation and amortization:

Buildings:

Water and Sewer System 60,008,241 1,772,431 2,932 61,783,604

Nonmajor Funds 8,394,812 230,572 - 8,625,384

Total Buildings 68,403,053 2,003,003 2,932 70,408,988

Infrastructure:

Water and Sewer System 95,708,244 12,203,528 - 107,911,772

Stormwater System 13,357,978 3,169,242 - 16,527,220

Nonmajor Funds 3,527,924 409,365 - 3,937,289

Total Infrastructure 112,594,146 15,782,135 - 128,376,281

Equipment:

Water and Sewer System 9,609,823 1,191,978 (467,589) 10,334,212

Stormwater System 2,192,424 472,860 (256,117) 2,409,167

Nonmajor Funds 1,292,642 382,171 (219,008) 1,455,805

Total Equipment 13,094,889 2,047,009 (942,714) 14,199,184

Intangible:

Water and Sewer System 159,679 - (159,679) -

Stormwater System - - -

Nonmajor Funds 56,554 - (56,554) -

Total Intangible 216,233 - (216,233) -

Total accumulated depreciation and amortization 194,308,321 19,832,147 (1,156,015) 212,984,453

Total capital assets being depreciated, net 351,511,892 46,257,442 3,238 397,772,572

Business-type activities capital assets, net 433,515,232$ 76,066,131$ (64,871,010)$ 444,710,353$

47


September 30, 2016

NOTE G – CAPITAL ASSETS – CONTINUED

Depreciation and Amortization additions (expense) by program:

Amounts for general government activities include depreciation charged to internal service funds

in the amount of $2,986,037.

Interest capitalized in the current fiscal year amounted to approximately $4.3 million out of total interest

expense of $13.4 million.

Governmental activities:

General government 4,472,942$

Police 151,935

Fire 731,984

Community and Economic Development 14,025,425

Engineering services and Public works 2,726,026

Health and sanitation 84,594

Leisure services 334,206

Total depreciation and amortization expense - governmental activities 22,527,112$

Business-type activities:

Water and Sewage Disposal System 15,167,937$

Stormwater System Fund 3,642,102

Nonmajor Funds 1,022,108

Total depreciation and amortization expense - business-type activities 19,832,147$

48


September 30, 2016

NOTE H – LONG - TERM DEBT

Bonds and notes outstanding at September 30, 2016 consist of the following for governmental activities:

Principal Stated Maximum

Purpose of Amount Amount Interest Annual

Issue Issued Outstanding Rate Debt Service

GOVERNMENTAL ACTIVITIES:

Bonds:

General Obligation Bonds

Series 2005 Refunding 14,975,000$ 5,725,000$ 4.000 – 5.000% $1,555,500

14,975,000 5,725,000

Revenue Bonds

Series 2016A Special Obligation Police Pension 50,400,000 (1) 50,400,000 0.65% - 3.998% 3,601,542

Series 2016B Special Obligation Capital Improvement 33,795,000 (1) 33,795,000 5.00% 8,321,750

Series 2016C Special Obligation Refunding 35,990,000 (1) 35,990,000 3.00 - 5.00% 3,103,350

Series 2015, CCCRA Refunding 44,060,000 44,060,000 3.250 – 5.250% 4,119,150

Series 2015, NPCCRA Refunding 18,870,000 18,720,000 2.250 – 4.125% 1,654,731

Series 2010A, CCCRA Refunding 9,829,000 4,806,625 5.06% 1,113,481

Series 2006A, CCCRA Redevelopment 77,175,000 24,270,000 3.25 - 5.25% 5,414,751

Series 2005B, NPCCRA Redevelopment 7,280,000 3,555,000 5.68% 849,183

Series 2006 Special Obligation City Hall 43,000,000 - - -

320,399,000 215,596,625

Total Bonds 335,374,000 221,321,625

Promissory Notes:

Governmental Funds

Series 2006 Note City Hall Land 4,066,000 1,988,375 5.06% 460,618

Promissory Note Convention Center 5,000,000 1,750,000 0.00% 250,000

2013 Line of Credit Fire Stations 15,000,000 8,268,559 Variable 115,318

2015 Line of Credit Fire Stations 5,000,000 55,000 Variable 13,289

29,066,000 12,061,934


Series 2014 Revenue Note Communications 10,000,000 8,719,198 2.06% 1,220,143

Series 2014 Revenue Note Vehicles 2,375,000 1,886,688 2.28% 266,276

12,375,000 10,605,886

Total Promissory Notes 41,441,000 22,667,820

Total Bonds and Notes for Governmental Activities 376,815,000$ 243,989,445$

(1) The Series 2016 A, B and C Bonds were issued July 5, 2016.

49


September 30, 2016

NOTE H – LONG - TERM DEBT – CONTINUED

Bonds and notes outstanding at September 30, 2016 consist of the following for business-type activities:

Principal Stated Maximum

Purpose of Amount Amount Interest Annual

Issue Issued O utstanding Rate Debt Service

BUSINESS-TYPE ACTIVITIES:

Utility System Revenue Bonds:

Series 2008B Water/Sewer $12,372,390 (1) $5,650,290 4.000 – 4.250% $1,346,970

Series 2008C Water/Sewer 83,591,640 (2) 87,191,280 See swap information 13,346,418

Utility System Revenue Refunding Bonds:

Series 2008A Water/Sewer 47,605,950 (3) 38,984,400 4.00% - 5.00% 6,130,782

Series 2010 Water/Sewer 15,140,000 (4) 13,450,000 3.25 - 4.500% 2,891,488

Series 2011A Water/Sewer 15,264,000 (5) 10,044,825 5.00% 1,552,635

Series 2012A Water/Sewer 22,935,000 (6) 22,915,000 2.00 – 5.00% 5,116,407

Total Water and Sewer System Fund 196,908,980 178,235,795

Utility System Revenue Bonds:

Series 2008B Storm Water 2,462,610 (1) 504,710 4.000 – 4.250% 120,318

Series 2008C Storm Water 16,398,360 (2) 12,798,720 See swap information 1,959,107

Utility System Revenue Refunding Bonds:

Series 2008A Storm Water 6,369,050 (3) 5,215,600 4.00% - 5.00% 820,218

Series 2011A Storm Water 3,936,000 (5) 2,590,174 5.00% 400,365

Series 2012A Storm Water 20,105,000 (6) 19,395,000 2.50 – 5.00% 1,486,872

Total Storm Water Fund 49,271,020 40,504,204

Total Business-Type Activities $246,180,000 $218,739,999

50


September 30, 2016


Footnotes to the business-type bonds and notes

Note (1) The 2008 B Series Bond Issue was issued July, 2008 and was split as follows:

To the Water and Sewer System 12,372,390$

To the Storm Water System 2,462,610

Total Series 2008 B Issue 14,835,000$

The 2008 B Series Bond Issue was re-allocated April, 2013 and was split as follows:


To the Storm Water System 774,900

Total Series 2008 B Issue 9,450,000$

Note (2) The 2008 C Series Bond Issue was issued August, 2008 and was split as follows:



Total Series 2008 C Issue 99,990,000$

The 2008 C Series Bond Issue was re-allocated April, 2013 and was split as follows:



Total Series 2008 C Issue 99,990,000$

The 2008 C Bond Issue bears a variable interest rate based on SIFMA; the variable rate at September 30, 2016 was .88%

Note (3) The 2008 A Series Refunding Bond Issue was issued July, 2008, refunded the 2005 Bond Issue and was split as follows:



Total Series 2008 A Issue 53,975,000$

Note (4) The 2010 Series Refunding Bond Issue was issued February, 2010 and refunded the 1998 Bond Issue.

Note (5) The 2011 Series Refunding Bond Issue was issued June, 2011, refunded the 2002 Bond Issue and was split as follows:



Total Series 2011A Refunding Issue Amount 19,200,000$

Note (6) The 2012 A Series Refunding Bond Issue was issued September, 2012, partially refunded the 2004 Bond Issue and was split as follows:



Total Series 2012A Refunding Issue Amount 43,040,000$

51


September 30, 2016


Changes in governmental long-term debt for the year ended September 30, 2016 are summarized as follows:

Compensated absences payable are liquidated from the funds used to account for related salary and benefit

costs. Historically, about 89% has been charged to governmental funds and about 11% to enterprise funds.

Total Total

Beginning Ending Current Noncurrent

Balances Additions Reductions Balances Liabilities Liabilities

Bonds:

General obligation bonds 7,000,000$ -$ 1,275,000$ 5,725,000$ 1,340,000$ 4,385,000$

General obligation premiums 36,694 - 11,880 24,814 - 24,814

Revenue bonds 142,849,686 120,185,000 47,438,061 215,596,625 4,225,073 211,371,552

Revenue premiums 6,772,808 12,445,473 2,370,748 16,847,531 - 16,847,531

Total bonds 156,659,188 132,630,473 51,095,689 238,193,970 5,565,073 232,628,897

Promissory notes, gov funds 12,654,303 - 592,369 12,061,934 609,927 11,452,007

Promissory notes, internal service funds 11,853,266 - 1,247,381 10,605,886 1,273,769 9,332,117

Capital leases 8,589,095 6,413,986 2,329,915 12,673,165 1,712,777 10,960,388

Litigation settlements 1,166,884 - - 1,166,884 1,166,884 -

Arbitrage rebates 34,224 - 5,573 28,651 - 28,651

Compensated absences 14,650,311 1,554,538 845,300 15,359,549 8,866,498 6,493,051

Self insurance claims 12,299,684 1,767,983 417,358 13,650,309 4,485,166 9,165,143

Net pension liability 109,383,191 25,775,468 - 135,158,659 - 135,158,659

Governmental Activities Totals 327,290,146$ 168,142,448$ 56,533,585$ 438,899,007$ 23,680,094$ 415,218,913$

52


September 30, 2016


With respect to certain governmental revenue bonds and promissory notes, the City has pledged various

revenues to repay these debt instruments. All revenue pledges remain in effect for the life of the relevant debt

instrument. The following table presents revenue pledge information on the City’s collateralized governmental

debt.

Description of Issue Purpose Pledged Revenue

Revenue

Received in

FY 2016

(1) (2)

Principal and

Interest Paid in

FY 2016

Debt Service as

a Percentage of

Revenues

Pledged

Outstanding

Principal and

Interest

(1)

Pledged

Through

Special Obligation

Bonds 2016A, B and C

A - to fund Police Pension

B - To finance new capital

projects

C - To refund 2006 Special

Obligation Bonds

Non-Ad Valorem

Tax Revenue (3)

83,267,657$ -$ 0.0% 198,417,865$ 2035 through

2040

Northwood/Pleasant

City CRA Tax

Increment Revenue

Bonds Series: 2005B

and 2015A

To pay for the cost of acquiring

and clearing real property for

redevelopment purposes and

loan repayment made to the

City

Northwood/Pleasant

City CRA Tax

Increment Revenue

1,822,340 1,686,238 92.5% 31,531,115 2021 and 2035

respectively

City Center CRA Tax

Increment Revenue

Bonds Series 2006A,

2010A, 2010B and

2015B

To finance certain public

improvements, refund Sunshine

State Loans and a portion of the

Agency's Tax Increment

Revenue Bonds Series 2006A

City Center CRA Tax

Increment Revenue

15,769,313 7,190,424 45.6% 110,558,576 2016 through

2036

(1) The 2010B bond matured in August of 2016.

(2) FY 2016 Revenue: Utility Services Tax 20,826,180

(General Fund Only) Franchise Taxes 9,007,760

Charges for Services 24,438,621

Inter-governmental revenue 13,276,669

Licenses and Permits 3,694,485

Fines and Forfeitures 244,763

Interest 840,818

Rents and Royalties 247,694

Payment in Lieu of Taxes 9,446,930

Miscellaneous 1,243,737

Total non-ad valorem revenues 83,267,657$

53


September 30, 2016


Changes in business-type long-term debt for the year ended September 30, 2016 are summarized as follows:

The City has pledged future utility customer revenues, net of specified operating expenses, to repay $229

million in various Water System and Stormwater System revenue and revenue refunding bonds which were

issued between FY08 and FY12. Proceeds from these bonds provided financing for various Utilities System

infrastructure improvements including the modernization of the City’s water filtration plant. The bonds are

payable solely from utility customer net revenues and are payable through 2039. The total principal and interest

remaining to be paid on the bonds is $331,277,257. Principal and interest paid for the current year and total

customer net revenues were $16,442,476 and $50,515,924, respectively.

Total Total

Beginning Ending Current Noncurrent

Balances Additions Reductions Balances Liabilities Liabilities

Water and Sewer Systems Fund

Revenue bonds 182,276,750$ -$ 4,040,955$ 178,235,795$ 4,210,165$ 174,025,630$

Unamortized premium 3,238,136 10,480 272,166 2,976,450 - 2,976,450

Net bonds payable 185,514,886 10,480 4,313,121 181,212,245 4,210,165 177,002,080

Compensated absences 2,005,377 54,625 114,122 1,945,880 1,112,234 833,646

Fund totals 187,520,263 65,105 4,427,243 183,158,125 5,322,399 177,835,727


Revenue bonds 41,793,249 - 1,289,045 40,504,204 1,324,835 39,179,369

Unamortized premium 2,182,169 351 234,263 1,948,257 - 1,948,257

Net bonds payable 43,975,418 351 1,523,308 42,452,461 1,324,835 41,127,626

Compensated absences 296,707 26,839 60,650 262,896 140,648 122,248

Fund totals 44,272,125 27,191 1,583,958 42,715,357 1,465,483 41,249,874

Nonmajor Business-Type Funds

Compensated absences 138,835 10,766 20,890 128,711 68,639 60,072

Capital leases - 220,822 27,170 193,652 38,454 155,198

138,835 231,588 48,060 322,363 107,093 215,270

Business-Type Totals 231,931,222$ 323,884$ 6,059,261$ 226,195,845$ 6,894,975$ 219,300,870$

54


September 30, 2016


Following is a schedule of debt service requirements for governmental activity bonds, notes, and capital leases.

Principal Interest Total Required Principal Interest Total Required

1,340,000$ 208,900$ 1,548,900$ 4,225,073 7,813,064$ 12,038,137$

1,400,000 147,400 1,547,400 6,032,516 8,858,963 14,891,479

1,460,000 90,200 1,550,200 6,253,496 8,630,500 14,883,996

1,525,000 30,500 1,555,500 6,493,012 8,386,315 14,879,327

- - - 6,742,528 8,129,252 14,871,780

2022 thru 2026 - - - 40,000,000 36,080,485 76,080,485

2027 thru 2031 - - - 48,980,000 26,987,004 75,967,004

2032 thru 2036 - - - 60,025,000 15,276,472 75,301,472

2037 thru 2041 - - - 36,845,000 4,748,875 41,593,875

5,725,000$ 477,000$ 6,202,000$ 215,596,625 124,910,930$ 340,507,555$

(1,340,000) (4,225,073)

24,814 16,847,531

4,409,814$ 228,219,083

General Obligation Bonds Revenue Bonds

GOVERNMENTAL ACTIVITIES

Fiscal

Year(s)

Total

Current portion

Premium

Long-term portion

2017

2018

2019

2020

2021

Principal Interest Total Required Principal Interest Total Required

1,883,696$ 313,312$ 2,197,008$ 1,712,777 275,469 1,988,246

10,251,759 268,168 10,519,927 1,969,935 263,612 2,233,547

1,974,737 221,535 2,196,272 2,000,397 214,547 2,214,944 2,023,321 173,355 2,196,676 2,050,294 164,651 2,214,945

2,072,501 123,543 2,196,044 1,006,514 113,486 1,120,000

2022 thru 2026 4,461,806 125,846 4,587,652 2,830,438 307,545 3,137,983 2027 thru 2031 - - - 1,102,810 33,349 1,136,159

22,667,820$ 1,225,759$ 23,893,579$ 12,673,165$ 1,372,659$ 14,045,824$

(1,883,696) (1,712,777)

20,784,124$ 10,960,388$

2017

GOVERNMENTAL ACTIVITIES

Fiscal Promissory Notes Capital Leases

Year(s)

Long-term portion

2018

20192020

2021

Total

Current portion

55


September 30, 2016


Following is a schedule of debt service requirements (including swap interest expense, liquidity and remarketing fees) for business-type bonds, notes, and capital leases.

Total

Principal Interest Total Principal Interest Total

4,210,165$ 7,200,627$ 11,410,792$ 1,324,835 1,596,892$ 2,921,727$ 14,332,520$

4,372,805 7,002,232 11,375,037 1,362,194 1,550,459 2,912,653 14,287,690

4,556,840 6,815,482 11,372,322 1,408,160 1,497,809 2,905,969 14,278,291

5,038,710 6,613,890 11,652,600 1,511,290 1,436,542 2,947,832 14,600,432

5,933,625 6,469,523 12,403,148 1,691,375 1,390,450 3,081,825 15,484,973

2022 thru 2026 29,431,590 28,435,891 57,867,481 8,040,810 5,847,680 13,888,490 71,755,972

2027 thru 2031 41,760,860 20,709,824 62,470,684 9,673,860 3,940,754 13,614,614 76,085,299

2032 thru 2036 57,372,880 11,656,066 69,028,946 9,974,880 1,941,619 11,916,499 80,945,445

2037 thru 2041 25,558,320 2,078,933 27,637,253 5,516,800 305,164 5,821,964 33,459,217

178,235,795$ 96,982,468$ 275,218,263$ 40,504,204$ 19,507,370$ 60,011,574$ 335,229,837$

(4,210,165) (1,324,835)

174,025,630$ 39,179,369$

All Business-

Type Total

Principal Interest Total

38,454$ 5,898$ 44,352$ 14,376,872$

43,441 4,943 48,384 14,336,074

45,054 3,330 48,384 14,326,675

46,726 1,658 48,384 14,648,816

19,977 183 20,160 15,505,133

2022 thru 2026 - - - 71,755,972

2027 thru 2031 - - - 76,085,299

2032 thru 2036 - - - 80,945,445

2037 thru 2041 - - - 33,459,217

Total 193,652$ 16,012$ 209,664$ 335,439,501$

(38,454)

155,198$

Current portion

Current portion

Golf Cart Capital Lease

2018

Long-term portion

Long-term portion

2019

2020

2021

Fiscal

Year(s)

2017

2017

BUSINESS-TYPE ACTIVITIES

Fiscal Water/Sewer Bonds Stormwater Bonds

Year(s)

2018

2019

2020

2021

Total

56


September 30, 2016


INTEREST RATE SWAP:

Type of Derivative: Pay-Fixed, Receive-Variable Interest Rate Swap – On August 19, 2008, the City issued

the $99,990,000 Series 2008 C Utility System Variable Rate Revenue Bonds. Concurrently, the City entered

into a synthetic fixed rate bond swap agreement totaling $56,335,000. The swap agreement is attributable to

$56,335,000 of the $99,990,000 Series 2008 C Utility System Variable Rate Revenue Bonds which are

described above.

Objective of the hedge and the nature of the hedged risk: In an effort to lower its borrowing costs when

compared against fixed rate bonds at the time of issuance, the City issued variable rate debt (with a weekly

reset) and entered into a corresponding interest rate swap agreement. The intention of the swap was to

effectively change the City’s variable interest rate on the bonds to a synthetic fixed rate of 3.539%.

Notional Amount: $56,335,000

Effective Date of Derivative: August 20, 2008

Maturity Date of Derivative: October 1, 2038

Terms – Under the swap agreements, the City pays the counterparty a fixed payment of 3.539% (based on the

initial notional amount of $56,335,000). Correspondingly, the City receives a variable payment which is

computed as 72% of the monthly London InterBank Offered Rate (LIBOR). The variable rate on the bonds is

reset weekly by auction. Starting in fiscal year 2035, the notional value of the swap and the principal amount of

the associated debt decline annually until the debt is completely retired. The bonds and related swap agreement

mature on October 1, 2038.

As of September 30, 2016, bond and swap rates were as follows:

Type of Hedge – Discrete Cash Flow: The primary objective of the above referenced derivative (the City’s

interest rate swap) is to function as a hedging instrument. As a derivative instrument associated with a

hedgeable item, this interest rate swap is effective by significantly reducing an identified financial risk by

substantially offsetting changes in the cash flows of the Series 2008 C Utility System Variable Rate Revenue

Bonds.

Interest Rate Swap: Terms Rates

Fixed Payment to Counterparty Fixed 3.539%

Variable Payment from Counterparty (1) 72% of Monthly LIBOR rate (0.380%)

Net Interest Rate Swap Payments 3.159%

Variable Rate Bond Coupon Payments (2) 7 Day Market Rate 0.880%

Synthetic Interest Rate on Bonds 4.039%

(2) 0.880% ra te bas ed o n the ra te pa id to the co rpo ra te trus tee fo r the week ending 9/28/2016.

Interest Rate Swap Rate Table

(1) 0.380% ra te bas ed o n the ra te rece ived fro m the s wap co unterparty fo r the perio d 9/7/2016 to 10/05/2016.

57


September 30, 2016


Interest Rate Swap Effectiveness and Valuation:

Fair Value – As of September 30, 2016, the swap had a negative fair value of $23,919,116. The swap’s

negative fair value is due to the interest rate of the counterparty (at September 30, 2016) being less than the

original counterparty rates. However, because the coupons on the City’s variable rate bonds adjust to changing

interest rates, the swap still functions effectively as a hedge against interest rate volatility on those bonds. The

swap’s fair value estimate is derived from an independent market evaluation which uses the zero coupon method

based on proprietary assumptions. The valuation model calculates future cash flows by projecting forward swap

rates and then discounts those cash flows to their present value.

DERIVATIVE HEDGING EFFECTIVENESS TEST

SYNTHETIC INSTRUMENT METHOD

Hedged Item Principal Amount 56,335,000$

Swap Notional Amount 56,335,000$

Swap Fixed Rate 3.539%

Swap Receive Rate 72% of One-Month LIBOR

Fixed Swap Variable Swap Receipts Net Variable

Payments To From Derivative Bond Total Synthetic

FY Ended Counterparty Counterparty (Payment) Receipt Interest Payments Rate

9/30/2016 (2,021,386)$ 166,913$ (1,854,472)$ (166,820)$ (2,021,293)$ 3.588%

Analysis of Synthetic Instrument Test Fiscal Year Ended

9/30/2016

Synthetic Rate Annual Basis 3.588%

Swap Fixed Rate 3.539%

Percentage Ratio 101.4%

Is Ratio between 90% and 111% ? PASS

Synthetic Instrument Method Criteria:

- Cash flow hedge and the hedged item are both subject to variable rates of interest

- Derivative (the swap) has a zero value at inception

- Fixed rate on the derivative is the same throughout the life of the derivative

- Notional amount of the derivative matches the hedged item

- Derivative term is equal to or less than term of the hedged item

Business-type activities Classification Amount Classification Amount

Change in Fair

Value

Cash flow hedge:

Pay-fixed, receive-variable interest rate swap Deferred Outflow 23,805,196$ Liability (23,805,196)$ (5,561,875)$

(Notional amount: $56,335,000)

Fair Value at 9/30/16

58


September 30, 2016


Interest Rate Swap Risks:

Credit Risk – Credit risk is the risk that the counterparty to the swap agreement will not fulfill its obligations

when the swap has a positive fair value to the City. In any period when the swap has a positive fair value, the

City is exposed to actual credit risk in the amount of the swap’s fair value. The swap counterparty has

guaranteed all payments due under the swap agreement. On June 26, 2013, Citibank, the swap counterparty,

novated the Citibank Interest Rate Swap to the Bank of New York Mellon. A novation is a substitution of the

counterparty in a swap agreement. Upon novation, the swap is referred to as the Bank of New York Mellon

Interest Rate Swap. All swap terms and conditions remain the same. The City had no costs associated with the

novation. As of September 30, 2016, the long-term debt of the swap counterparty – The Bank of New York

Mellon Corporation – was rated AA- by Fitch, A by Standard & Poor’s, and A1 by Moody’s. To mitigate the

potential for credit risk, if the counterparties’ credit ratings fall below A-/A3, the counterparties will fully

collateralize the fair value of the swap (with U.S. Government Securities).

Basis Risk – Instead of the actual variable debt interest payment, the City’s interest rate swap is based on a

fixed payment and an indexed variable receipt. Any difference between the indexed variable receipt and the

actual market-determined variable rate paid on the bonds is called “basis risk”. Whereas the underlying swap

agreement pays the City at 72% of the 1 month LIBOR rate, the Series 2008 C Utility System Variable Rate

Revenue Bonds bear interest at the seven day market rate. From August 19, 2008 to the termination date, the

swap exposes the City to basis risk should the relationship between LIBOR and the seven day market rate

converge (thereby changing the synthetic rate on the bonds). If a change occurs that results in the rates moving

to convergence, the City’s payments out may be in excess of its payments received from the counterparty and

the City’s expected cost savings may not be realized.

Termination Risk – The City’s derivative contract uses the International Swaps and Derivatives Association’s

Master Agreement. The ISDA Master Agreement includes standard termination events, such as failure to pay

and bankruptcy. The Schedule to the Master Agreement also includes “additional termination events”.

Accordingly, if the counterparty’s credit quality rating falls below “BBB-“ as issued by Standard & Poor’s or

“Baa3” as issued by Moody’s Investors Service, the City may terminate the swap. The City or the counterparty

may terminate the swap if the other party fails to perform under the terms of the contract. If the swap is

terminated, the variable rate bonds would no longer carry a synthetic interest rate and the City would no longer

be insulated from the possibility of increasing interest rate payments. A termination of the swap agreement may

also result in the City making or receiving a termination payment (equal to the swap’s fair value at the

termination date).

Rollover Risk – Because the maturity dates for the hedged Series 2008 C Utility System Variable Rate Bonds

and the interest rate swap agreement are the same (October 1, 2038), the City is not exposed to rollover risk.

Interest Rate Risk – The hedging derivative is a pay-fixed, receive variable cash flow hedge that is hedging

interest rates on a portion of the 2008C bonds outstanding. The City believes that it has significantly reduced

interest rate risk attributable to the principal amount being hedged by entering into the interest rate swap.

Foreign Currency Risk – Foreign currency risk is the risk that changes in exchange rates would adversely

affect the fair value of the derivative or cash flows of the City. With respect to the City’s derivative and the

related cash flows, the City has no exposure to foreign currency risk.

59


September 30, 2016


Swap Payments and Associated Debt – The interest rate swap agreements do not affect the City’s obligation

(under the bond indenture) to repay the principal and variable interest on the Series 2008C bonds. As interest

rates vary, the variable rate interest payments and swap payments will vary. Using September 30, 2016 rates,

debt service requirements of the variable rate bonds and the swap payments were as follows, assuming interest

rates remain constant for the duration of those instruments.

Interest Rate Swap

Fiscal Liquidity Remarketing

Year(s) Notional Value Interest

(1)

Fees

(2)

Fees

(3)

Net Amount

(4) (5) Total

2017 56,335,000$ 495,748$ 270,408$ 70,419$ 1,779,623$ 2,616,197$

2018 56,335,000 495,748 270,408 70,419 1,779,623 2,616,197

2019 56,335,000 495,748 270,408 70,419 1,779,623 2,616,197

2020 56,335,000 495,748 270,408 70,419 1,779,623 2,616,197

2021 56,335,000 495,748 270,408 70,419 1,779,623 2,616,197

2022 thru 2026 56,335,000 2,478,740 1,352,040 352,094 8,898,113 13,080,987

2027 thru 2031 56,335,000 2,478,740 1,352,040 352,094 8,898,113 13,080,987

2032 thru 2036 54,210,024 2,385,241 1,301,041 338,813 8,562,473 12,587,568

2037 thru 2038 24,459,526 430,488 234,811 61,149 1,545,353 2,271,801

Total 10,251,949$ 5,591,972$ 1,456,243$ 36,802,166$ 54,102,329$

Fiscal

Year(s) Principal Interest

(Note 1) Total

2017 -$ 384,164$ 384,164$

2018 - 384,164 384,164

2019 - 384,164 384,164

2020 - 384,164 384,164

2021 335,000 382,690 717,690

2022 thru 2026 7,415,000 1,741,894 9,156,894

2027 thru 2031 12,930,000 1,362,020 14,292,020

2032 thru 2036 22,975,000 415,338 23,390,338

2037 thru 2038 - - -

Total 43,655,000$ 5,438,598$ 49,093,598$

(1) The interest rate at September 30, 2016 for the variable rate bonds was 0.88%.

(2) Liquidity fees are 48 basis points or 0.48% of the outstanding bond principal amount and provide for a ready buyer in the event that

no other bond buyers can be found when these bonds are remarketed weekly.

(3) The remarketing fees are 12.5 basis points or 0.125% of the outstanding bond principal amount.

(4) Computed: (3.539% - .380%) multiplied by the notional amount outstanding (see Interest Rate Swap Rate Table).

(5) Amortization of Notional Value of Swap

From and Including To but excluding Notional Amount

6/5/2013 10/1/2035 56,335,000$

10/1/2035 10/1/2036 43,100,000

10/1/2036 10/1/2037 29,310,000

10/1/2037 10/1/2038 14,950,000

Notional Amount in Future Years

2008C Utility System Revenue Bonds

Debt Service Requirements and Net Swap Payments

Variable Rate Bonds - Hedged

Variable Rate Bonds - Unhedged

60


September 30, 2016


LINES OF CREDIT:

On July 12, 2013, the City entered into a financing arrangement for a $15 million line of credit. The initial

usage is to finance the construction of Fire Station No. 5, the Emergency Operations Center, Fire Station No. 4,

and Fire Station No. 8. The line of credit has a renewable term of 36 months and will be drawn upon during the

construction phase of the projects. The line may be used for tax exempt or taxable projects. The tax exempt

rate for the line is 74% of the one-month LIBOR plus 85 basis points and the taxable rate is one-month LIBOR

plus 85 basis points. Once the above referenced projects are complete, the City will seek permanent financing

through a conventional loan or bond issuance (depending on market conditions at the time). The terms of the

line of credit provide for a term out financing provision with a five year amortization at the then prevailing five

year swap rate plus 100 basis points. On October 30, 2014, the City signed an agreement to add a $5 million

line of credit under terms identical to the existing line. As of September 30, 2016, $8,268,559 and $55,000,

respectively, were the outstanding balances of the first and second lines of credit.

NOTE I – DEFEASED AND REFUNDED DEBT

On July 5, 2016, the City issued the Series 2016 Special Refunding Bonds. The proceeds of the 2016C bond

financed the refunding of the City’s Special Obligation Bonds, Series 2006. This refunding defeased

$41,685,000 of outstanding bonds and resulted in a cash savings of $7,576,636 and an economic gain of

$6,444,420.

The assets of the trust accounts and the liabilities for defeased bonds are not included in the City’s financial

statements. On September 30, 2016, the City had $41,865,000 of outstanding bonds which were considered to

be in-substance defeased. The 2006 Special Obligation bonds were scheduled to be called on October 1, 2016.

NOTE J – CAPITAL LEASE OBLIGATIONS


On December 14, 2011, the City entered into a 15-year capital leasing arrangement to finance energy

efficiency/conservation improvements throughout the City. As of September 30, 2016, the $6,900,000 original

present value of the minimum payments under the arrangement was included in capital assets. Accumulated

depreciation was $1,522,401.

On July 12, 2012, the City entered into a ten-year capital leasing arrangement to acquire four pumper trucks and

an aerial platform truck for the Fire Department. As of September 30, 2016, the $2,700,000 original present

value of the minimum payments under the arrangement was included in capital assets. Accumulated

depreciation was $945,689.

61


September 30, 2016

NOTE J – CAPITAL LEASE OBLIGATIONS – CONTINUED

On October 26, 2015, the City entered into a five-year capital lease to fund financial system software upgrades.

As of September 30, 2016, the $5,185,117 original present value of the minimum lease payments under the

arrangement is not included in capital assets as the project was not substantially complete.

On February 1, 2016, the City entered into a five-year capital lease to fund the purchase of 75 new golf carts for

the City-owned West Palm Beach Golf Club. The $241,920 original present value of the minimum lease

payments is not included in capital assets as the cost per cart is below the materiality threshold for asset

capitalization.

On May, 12, 2016, the City entered into a two-year capital lease to fund the purchase of a scrubber/sweeper

machine. The $52,537 original present value of the minimum lease payments is not included in capital assets.

On June 1, 2016, the City entered into a five-year capital lease to fund the purchase of 39 police vehicles. As of

September 30, 2016, the $1,183,803 original present value of the minimum lease payments under the

arrangement is not included in capital assets pending documentation confirming that the project is substantially

complete.

Future minimum lease obligations of the governmental activities are as follows:

Capital

Leases

Operating

Leases

Total Lease

Payments

2017 2,032,598 94,825 2,127,423

2018 2,281,931 94,825 2,376,756

2019 2,263,328 52,826 2,316,154

2020 2,263,329 7,404 2,270,733

2021 1,140,160 - 1,140,160

2022 thru 2026 3,137,983 - 3,137,983

2027 thru 2031 1,136,159 - 1,136,159

14,255,488 249,880 14,505,368 Total

Fiscal

Year(s)

62


September 30, 2016

NOTE K – INTERFUND RECEIVABLES, PAYABLES AND ADVANCES

The composition of interfund balances as of September 30, 2016 is as follows:

Due to/from other funds:

The $1.8 million amount owed by the CRA to the General Fund represents the final year’s payment on a 2009

loan, the proceeds of which were used to purchase the Helen Wilkes property in downtown West Palm Beach.

The nonmajor governmental, nonmajor enterprise, and internal service payables result from loans to cover

negative cash balances at year end.

The General Fund payable results from a temporary unresolved transaction involving the Permits Fund and the

General Fund.

Advances to/from other funds:

An advance in the amount of $1.5 million was made in 2009 to finance renovation of the City's golf course.

This advance was made in accordance with an interlocal agreement between the City and the Golf Commission.

Repayment will be made over a period of up to 15 years based on a schedule included in the agreement.

Receivable Fund Payable Fund Amount

General Fund City Center CRA Fund 1,805,000$

Nonmajor Governmental Funds 1,359,613

Nonmajor Enterprise Funds 113,055

Internal Service Funds 3,189,521

Nonmajor Govermental Fund General Fund 268,438

6,735,627$

Receivable Fund Payable Fund Amount

General Fund Nonmajor Enterprise Funds (Golf Course) 850,740

850,740$

63


September 30, 2016

NOTE L – INTERFUND TRANSFERS

Following is a summary of interfund transfer activity:

Transfers-out from the General Fund to Nonmajor Governmental Funds funded debt service requirements,

capital improvements, technology replacement, and grant matching. Transfers-out from the City Center CRA

Fund to the General Fund represent funding for debt service obligations. Transfers-out from the Water and

Sewer Systems Fund to the General Fund represent Payments-In-Lieu-Of-Taxes (i.e., “PILOT”). Transfers to

the Internal Service funds were primarily for technology replacement and improvements as well as OPEB

contributions.

NOTE M – STEWARDSHIP, COMPLIANCE AND ACCOUNTABILITY

Budget

Annual budgets are adopted for all the major and nonmajor governmental funds excluding the Cemetery Fund.

Except for the General Fund, these budgets are prepared on the modified accrual basis of accounting. In the

General Fund, budgets are prepared on the modified accrual basis of accounting except that current year

encumbrances are treated as expenditures for budgetary purposes and administrative charges to other funds are

budgeted as revenue in the General Fund.

All unencumbered and unexpended appropriations lapse at fiscal year end except those for ongoing capital

projects and special revenue funds which are brought forward and become part of the subsequent year’s original

budget.

Appropriations at year end that are encumbered but unexpended are also brought forward and become part of

the subsequent year’s original budget. Supplemental appropriations made during the fiscal year are included in

the ‘Final Budget’ columns on the statements of revenues, expenditures and changes in fund balances – budget

and actual.

Non-Major Non-Major Internal

Transfer-Out Funds: General Governmental Enterprise Service Total

General -$ 5,014,187$ -$ 4,827,482$ 9,841,669$

CRA 250,000 1,177,213 270,000 - 1,697,213

2016 Capital Bond Fund 258,010 - - - 258,010

Non-major governmental 1,335,340 615,615 - 879,732 2,830,687

Non-major enterprise 435,000 - - 11,499 446,499

Water and sewer 9,081,667 - - 845,079 9,926,746

Stormwater - - - 17,690 17,690

Internal Service 25,000 - - 43,340 68,340

Total Transfers 11,385,017$ 6,807,015$ 270,000$ 6,624,822$ 25,086,854$

Transfer-In Funds:

64


September 30, 2016

NOTE M – STEWARDSHIP, COMPLIANCE AND ACCOUNTABILITY - CONTINUED

Supplemental appropriations made during fiscal year 2016 included $500,000 for legal services related to the

preservation of the city’s watershed.

Budgetary Control

Expenditures may not legally exceed appropriations at the fund and department level without Commission

approval. Budget changes within a fund and department which do not affect the departmental total may be

approved on the administrative level. The City Administrator and Finance Director have the authority to

approve such administrative changes.

For the fiscal year ended September 30, 2016, expenditures exceeded the legal level of budgetary control in two

departments. The City Commission Department was over budget by $44,681 due to an unbudgeted pay increase

and a one-year pay adjustment for a Commissioner. The Fire Department was over budget by $392,777 due to

the opening of temporary Fire Station #9. Expenditures for staffing, a building lease, utility payments and minor

equipment were made for this station.

NOTE N – RISK MANAGEMENT

The City maintains two risk retention funds, the Self Insurance Fund and the Employee Health/Life Insurance

Fund. These funds combine risk retention (“self-insurance”) with purchased insurance policies and are

categorized as internal service funds. The Self Insurance Fund is used to account for the City's workers'

compensation, general, and automotive liability claims. The Employee Health/Life Insurance Fund is used to

account for the health and life benefits for eligible City employees and certain retirees.

Insurance claims liabilities and expenses are recognized when it is probable a loss has occurred and the amount

of the loss can be reasonably estimated.

Risk has been retained by the City in the amount of $500,000 for workers’ compensation, $350,000 for general

and auto liability, 100% for employee health (beginning July 1, 2016), and $100,000 for property loss. Excess

insurance has been purchased for general liability coverage up to $10,000,000.

Property loss is covered by purchased insurance policies up to $327 million (total insured value).

During the past three years, claims settlement amounts have not exceeded insurance coverages.

65


September 30, 2016

NOTE N – RISK MANAGEMENT - CONTINUED

The claims liability amounts shown below represent the present value of estimated future payments to be made

for claims that occurred prior to September 30, 2016. The discount rate used in calculating the Self Insurance

Fund’s liability is 3%. No discounting was done in calculating the Employee Health/Life Insurance Fund’s

liability. No non-incremental claims adjustments have been made.

Following is a summary of the changes in claims liability for the Self Insurance Fund for the fiscal years ended

September 30:

Fiscal Year Fiscal Year

2016 2015

Unpaid claims as of October 1 12,299,684$ 12,294,225$

Incurred claims (including claims incurred but not

reported as of September 30):

Provision for current year events where the City

retained risk of loss 6,024,536 4,126,651

Increases (decrease) in provision for prior years'

events where the City has retained risk of loss (529,472) 1,960,965

Total incurred claims 5,495,064 6,087,616

Payments:

Claims attributable to current year events where

the City has retained risk of loss 1,239,965 667,628

Claims attributable to prior years' events where

the City has retained risk of loss 3,584,781 5,414,529

Total payments 4,824,747 6,082,157

Unpaid claims as of September 30 12,970,001$ 12,299,684$

Reconciliation to Internal Service Funds Statement of Net Position:

Insurance claims payable, current portion 3,804,858 3,228,049

Insurance claims payable, long term portion 9,165,143 9,071,635

12,970,001$ 12,299,684$

66


September 30, 2016

NOTE N – RISK MANAGEMENT - CONTINUED

Following is a summary of the changes in claims liability for the Employee Health/Life Insurance Fund for

the fiscal years ended September 30:

Fiscal Year Fiscal Year

2016 2015

Unpaid claims as of July 1, 2016 -$ n/a

Incurred claims (including claims incurred but not

reported as of September 30):

Provision for current year events where the City

retained risk of loss 2,902,886 n/a

Increases (decrease) in provision for prior years'

events where the City has retained risk of loss - n/a

Total incurred claims 2,902,886 n/a

Payments:

Claims attributable to current year events where

the City has retained risk of loss 2,222,578 n/a

Claims attributable to prior years' events where

the City has retained risk of loss - n/a

Total payments 2,222,578 n/a

Unpaid claims as of September 30 680,308$ n/a

Reconciliation to Internal Service Funds Statement of Net Position:

Insurance claims payable, current portion 680,308 n/a

Insurance claims payable, long term portion - n/a

680,308$ n/a

67


September 30, 2016

NOTE O – COMMITMENTS AND CONTINGENCIES

Construction and Equipment Contracts

At year end, the City had the following significant commitments related to uncompleted contracts for

construction and equipment:

Litigation, Claims and Assessments

The City is engaged in routine litigation, claims and assessments incidental to the conduct of its business. In the

opinion of the City Attorney, the ultimate outcome of any pending litigation, claims and assessments which

represent potential liability to the City in excess of either amounts already provided for in the accompanying

financial statements, or covered by insurance, will not have a material or adverse effect on its financial position.

State and Federal Grants

Grant funds received and disbursed by the City are for specific purposes and are subject to audit by the grantor

agencies. Amounts received or receivable from the agencies are subject to audit and adjustment. Any

disallowed claims, including the amounts already collected, may constitute a liability of the applicable funds.

Future disallowances, if any, cannot be determined at this time although in the opinion of management, any

disallowed expenditures would not have a material adverse effect on the financial condition of the City.

City Place Community Development District Debt

On April 20, 2012, the CDD issued the $39,890,000 Special Assessment and Refunding Bonds, Series 2012,

primarily pledged by special assessments to the properties within the CDD. Additionally, the CRA pledged

certain tax increment revenue for properties within the CDD and up to $2 million of the existing tax increment

revenues generated outside the CDD. The CRA payments, together with the special assessments required to be

levied by the CDD, are anticipated to fully fund the debt service requirements. As of September 30, 2016,

neither the City nor the CRA has an outstanding liability to the CDD.

Governmental Activities: None

Business-Type Activities:

Water and Sewer Fund 47,044,692$

Nonmajor Funds 4,711,860$

68


September 30, 2016

NOTE P – EMPLOYEE RETIREMENT PLANS

During the fiscal year ended September 30, 2016, the City participated in four single-employer pension plans

covering substantially all full-time employees. Three of the plans are defined benefit pension plans and one is a

defined contribution pension plan. Each defined benefit pension plan is administered by an independent board

of trustees and each is audited annually by an independent certified public accountant. The City also

participated in three Voluntary Employees’ Beneficiary Association (VEBA) plans.

For this report dated September 30, 2016, the actuarial valuation date for all plans is September 30, 2014, and

the measurement date is September 30, 2015. The Required Supplementary Information section of this report

provides additional detailed information about actuarial methods and assumptions used to determine the

contribution rates for each plan. That section also provides schedules of employer contributions, total pension

asset/liability, plan fiduciary net position, and changes in net pension asset/liability for each plan. The schedules

of employer contributions and pension liabilities will be expanded each year until a total of ten years is

presented.

1. Defined benefit plans

Police Pension Plan: The West Palm Beach Police Pension Fund (“the plan”) was created in 1947 by a special

act of the Florida legislature, Chapter 24981, Section 16, Laws of Florida, as amended. The plan provides

retirement benefits for noncivilian police department employees and is maintained through contributions from

employee members, actuarially determined contributions from the City, and from investment earnings. In

addition, the State of Florida, pursuant to Chapter 185 of the Florida Statutes, pays to the plan all casualty

insurance premium surcharges collected from within the city limits. These surcharges are distributed annually

provided the local government has met its actuarial funding requirement for the most recently completed fiscal

year. Employee members of the Plan make regular contributions. For fiscal year 2016, the City withheld 11%

of earnings from employee members. 7% was remitted to the pension plan and 4% was paid to the Police

VEBA.

Benefit provisions and contribution requirements are established and may be amended by the City of West Palm

Beach in conjunction with the Palm Beach County Police Benevolent Association. Any such amendments take

effect upon passage by the Florida State Legislature. The City’s recommended and actual contribution for fiscal

year 2016, as discounted for payment at the beginning of the fiscal year, was $59,726,454, which included $50

million of proceeds from a pension obligation bond issued in June of 2016. This contribution amount

represented 290% of covered payroll. Chapter 185 funds, as mentioned above, amounted to $1,259,981 for

fiscal year 2016. The plan annually produces a separately audited annual report including financial statements

and required supplementary information. This report may be obtained by writing to City of West Palm Beach,

Finance Department, 401 Clematis Street, West Palm Beach, Florida 33401 or by calling 1-561-822-1310 or

thru wpbppf.com.

Firefighters’ pension plan: The West Palm Beach Firefighters’ Pension Fund (“the plan”) was created in 1947

by a special act of the Florida legislature, Chapter 24981, Section 17, Laws of Florida, as amended. The plan

provides retirement benefits for firefighters and fire department officers and is maintained through contributions

from employee members, actuarially determined contributions from the City, and from investment earnings. In

addition, the State of Florida, pursuant to Chapter 175 of the Florida Statutes, pays to the plan all property

insurance premium surcharges collected from within the city limits. These surcharges are distributed annually

provided the local government has met its actuarial funding requirement for the most recently completed fiscal

year. Employee members of the Plan make regular contributions. For fiscal year 2016, the City withheld 13.1%

of earnings from employee members. 11.1% was remitted to the pension plan and 2% was paid to the

Firefighters’ VEBA.

69


September 30, 2016

NOTE P – EMPLOYEE RETIREMENT PLANS - CONTINUED

Benefit provisions and contribution requirements are established and may be amended by the City of West Palm

Beach in conjunction with the West Palm Beach Association of Fire Fighters, I.A.F.F. Local 727. The City’s

recommended and actual contribution for fiscal year 2016, as discounted for payment at the beginning of the

fiscal year, was $6,090,133. Chapter 175 funds, as mentioned above, amounted to $1,600,663 for fiscal year

2016. In accordance with the union contract, 85% of the Chapter 175 monies, or $1,040,431, was remitted to

the pension plan. These combined contributions, amounting to $7,130,564, represented 43% of covered payroll.

The plan annually produces a separately audited annual report including financial statements and required

supplementary information. This report may be obtained by writing to City of West Palm Beach, Finance

Department, 401 Clematis Street, West Palm Beach, Florida 33401 or by calling 1-561-822-1310 or thru

resourcecenters.com.

Restated pension plan: The West Palm Beach Restated Employees’ Defined Benefit Retirement System (“the

plan”) was established under Ordinance No 3059-97 on August 11, 1997. The plan, a successor plan to the City

of West Palm Beach Employees’ Retirement System, provides retirement benefits for employees who were

active members of the predecessor plan as of September 10, 1997. All members are fully vested and the plan is

closed to new members. Active members make regular contributions to the plan in the amount of 5.5% of

employee earnings. Benefit provisions and contribution requirements for the plan are established and may be

amended by the City of West Palm Beach in conjunction with the State Employees International Union and the

Professional Managers and Supervisors Association. The City made an advance payment of $7,445,067 in fiscal

year 2013. Actuarially determined contributions made after that date will be subtracted from that advance.

The plan’s administrative costs are financed through investment earnings. The plan annually produces a

separately audited annual report including financial statements and required supplementary information. This

report may be obtained by writing to City of West Palm Beach, Finance Department, 401 Clematis Street, West

Palm Beach, Florida 33401 or by calling 1-561-822-1310 or thru resourcecenters.com. Selected actuarial data

for the defined benefit pension plans is presented below.

Police

Pension

Firefighters'

Pension

Restated

Employees'

Pension

Membership as of valuation date: September 30, 2014 September 30, 2014 September 30, 2014

Number of:

Retirees and beneficiaries 248 194 161

Inactive, nonretired members 13 6 8

Active members 221 190 30

Total 482 390 199

Covered payroll $18,805,018 $16,144,923 $1,814,346

Net pension asset (liablity):

Total pension liability ($320,381,184) ($249,781,746) ($38,794,542)

Fiduciary net position 258,834,220 176,170,051 42,985,063

Net pension asset (liability) ($61,546,964) ($73,611,695) $4,190,521

Fiduciary net position as a

% of total pension liability 81% 71% 111%

Net pension asset (liability) as a

% of covered employee payroll -327% -456% 231%

70


September 30, 2016


The following assumptions were used to produce the actuarial reports.

Police Firefighters Restated Employees

Valuation Date: September 30, 2014 September 30, 2014 September 30, 2014

Measurement Date: September 30, 2015 September 30, 2015 September 30, 2015

Reporting Date: September 30, 2016 September 30, 2016 September 30, 2016

Methods and Assumptions Used to Determine Net Pension Liability:

Actuarial Cost Method: Entry Age Normal Entry Age Normal Entry Age Normal

Inflation: 3.00% 4.00% 5.00%

Salary Increases: 5.0%, including inflation 5.00% to 5.50%, including

inflation

5.00% to 8.80% per year

Investment Rate of Return: 8.00% 8.00% 8.00%

Long-Term Municipal Bond Rate: N/A 3.71% 3.71%

Retirement Age: Experience-based table of rates

that are specific to the type of

eligibility condition.

Age and experience-based table

of rates specific to the type of

eligibility condition. Last updated

for the 2012 valuation.

Age-based table of rates that

are specific to the type of

eligibility condition.

Mortality: 80% recognition of the RP-2000

CHPMT for males and females

with mortality improvement

projected using Scale AA after

2000 and 20% recognition of the

1983 Group Annuity Mortality

Table for males and females

with no future mortality

improvements.

RP-2000 Combined Mortality

Table projected to 2005. At the

time of the most recent

experience study (2013), a

margin for future mortality

improvements is included in

these tables.

RP-2000 Combined Healthy

Mortality Table. There is

currently no margin for future

mortality improvement.

Other Information: Effective for the Actuarial Val

as of Sep-30-14, the mortality

assumption was changed to

recognize 100% of RP-2000

CHPMT. This change

increased the net pension liability

by $2,066,046.

No benefit changes or

assumption changes were

reflected in the TPL as of

September 30, 2015. Cost of

living adjustments were 5.5%

per year for Plan A recipients.

1.17% per year was used for

Plan B.

Cost of living adjustments were

2.0% simple.

71


September 30, 2016


The City is reporting deferred outflows of resources and deferred inflows of resources from the following

sources at September 30, 2016.

2. Pension plan assets

Discount rate: A single discount rate of 8.00% was used to measure the total pension liability for all three plans.

This single discount rate was based on the expected rate of return on pension plan investments of 8.00%. The

projection of cash flows used to determine this single discount rate assumed that plan member contributions will

be made at the current contribution rate and that employer contributions will be made at rates equal to the

difference between the total actuarially determined contribution rates and the member rate. Based on these

assumptions, the fiduciary net position of all funds was projected to be available to make all projected future

benefit payments of current plan members. Therefore, the long-term expected rate of return on pension plan

investments (8.00%) was applied to all periods of projected benefit payments to determine the total pension

liability.

Description Police Firefighters Restated Total

City contribution subsequent to

measurement date $ 59,726,454 $ 7,130,564 $ - $ 66,857,018

Differences between expected

and actual experience 528,251 (2,309,041) - (1,780,790)

Change of assumptions 1,777,575 - - 1,777,575

15,293,905 8,673,096 2,441,091 26,408,092

(2,026,782) (1,643,297) (1,587,450) (5,257,529)

75,299,403$ 11,851,322$ 853,641$ 88,004,366$

Amounts from Statement of Net Position: Deferred outflows - pensions 95,570,936

Deferred inflows - pensions (7,566,570)

88,004,366

Deferred Outflows (Inflows)

Net difference between

projected and actual earnings

72


September 30, 2016


Sensitivity of the discount rate: Regarding the sensitivity of the net pension liability (asset) to changes in the

single discount rate, the following presents each plan’s net pension liability (asset), calculated using a single

discount rate of 8.00%, as well as what each plan’s net pension liability (asset) would be if it were calculated

using a single discount rate that is one percentage point lower or one percentage point higher than the current

rate assumption.

The deferred outflows of resources resulting from City contributions to the pension plans subsequent to the

measurement date will be recognized as a reduction of the net pension liability in the following fiscal year. The

amount reported as a deferred outflow (inflow) of resources related to the pensions will be recognized in

pension expense in future years as follows:

Long-Term Expected Rate of Return – The long-term expected rate of return on pension plan investments was

determined using a building-block method in which best estimate ranges of expected future real rates of return

(expected returns, net of pension plan investment expense and inflation) are developed for each major asset

class. These ranges are combined to produce the long-term expected rate of return by weighting the expected

future real rates of return by the target asset allocation percentage and by adding expected inflation. Best

estimates of arithmetic real rates of return for each major asset class included in the pension plan’s target asset

allocation as of September 30, 2016 are summarized in the following table.

Current Single Discount

1% Decrease Rate Assumption 1% Increase

7% 8% 9%

Police Pension $90,204,331 $61,546,964 $38,179,490

Firefighters' Pension $92,636,560 $73,611,695 $57,698,571

Restated Employees' Pension ($62,707) ($4,190,521) ($7,689,129)

Fiscal Year Ending September 30 Police Firefighters Restated

2017 $3,739,042 $1,220,022 $81,123

2018 3,739,042 1,220,022 81,123

2019 3,739,041 1,220,022 81,123

2020 4,355,824 1,767,788 610,272

2021 - (400,486) -

Thereafter - (306,610) -

$15,572,949 $4,720,758 $853,641

73


September 30, 2016


Asset Class

Target

Allocation

Long-Term Expected

Real Rate of Return

Large cap equity 52% 5.5%

International equity 13% 8.5%

Domestic bonds 25% 2.5%

Real estate 10% 4.5%

100%

Asset Class

Target

Allocation

Long-Term Expected

Real Rate of Return

Domestic equity 50% 5.0%



International bonds 5% 2.4%

Real estate 10% 3.0%

Alternative assets 5% 3.8%

100%

Asset Class

Target

Allocation

Long-Term Expected

Real Rate of Return

Domestic equity 50% 7.5%



International bonds 10% 3.5%

Real estate 5% 4.5%

Alternative assets 5% 6.0%

100%

Firefighters' Pension:

Restated Pension:

Police Pension:

74


September 30, 2016


3. Defined contribution plan

The Public Employee Defined Contribution Plan ("PEDCP") covers all full-time employees except those

covered by the Restated, Police, and Firefighters’ pension plans. The PEDCP is administered by the City

through a third party administrator. Benefit provisions, contribution requirements and all other requirements of

the PEDCP are established by West Palm Beach Code of Ordinances Sections 62-131 through 62-141.

New employees are enrolled in the PEDCP upon successful completion of six months of employment. Vesting

is immediate. Required and actual contributions represent 7.5% for employees and from 6.5% to 9.5% by the

City, depending upon employee group and length of employment. Employer contribution expense for fiscal

year 2016 was $3.4 million. The assets of the PEDCP are held in trust and are the sole property of the

participants. No balances or financial information relative to the PEDCP are reported in the basic financial

statements.

4. Voluntary employees’ beneficiary association plans

The City participates in Voluntary Employees’ Beneficiary Association Plans (VEBA Plans) for the Firefighters,

Police, General Employees, and Management Employees groups. Each of the VEBA plans is administered by a

separate Board of Trustees. The assets of the VEBA Plans are held in trust and are the sole property of the

participants. No balances or financial information related to the VEBA Plans are reported in the Basic Financial

Statements.

Voluntary Employees' Beneficiary Association Plan for Firefighters (FF VEBA: The FF VEBA plan is

authorized in the collective bargaining contract between the City and the West Palm Beach Association of

Firefighters, Local 727 (the Contract). The Contract, effective January 9, 2012, requires the City to contribute

2% of pensionable earnings of members of the bargaining unit to the FF VEBA plan. In exchange, the members

of the bargaining unit agreed to voluntary concessions of an equal value, resulting in no additional cost to the

City.

The FF VEBA is administered by a Board of Trustees appointed by the bargaining unit with approval from the

City. The Board of Trustees has approved and may amend the Agreement and Declaration of Trust, which sets

out provisions for payment of benefits to the VEBA members. Liability of the City is limited to periodic

contributions as required by the Contract.

Voluntary Employees' Beneficiary Association Plan for Police (Police VEBA: The Police VEBA is

authorized in the collective bargaining unit between the City and the Palm Beach County Police Benevolent

Association (the Contract). The Contract provides for a Voluntary Employees’ Beneficiary Association for

members of the bargaining unit. The Contract requires the City to contribute 4% of pensionable earnings of

members of the bargaining unit to the Police VEBA plan. In exchange, members of the bargaining unit agreed

to voluntary concessions of an equal value, resulting in no additional cost to the City.

The Police VEBA is administered by a Board of Trustees appointed by the bargaining unit with approval from

the City. The Board of Trustees has approved and may amend the Agreement and Declaration of Trust, which

sets out provisions for payment of benefits to the Police VEBA members. Liability of the City is limited to

periodic contributions as required by the Contract.

75


September 30, 2016


Voluntary Employees' Beneficiary Association Plans for General Employees (General Employees VEBA)

and Management Employees (Management VEBA: In January 2007, the City Commission passed ordinance

no. 4017-07 establishing the Management Employees VEBA and the General Employees VEBA. The two plans

cover elected officials of the City of West Palm Beach and all full time employees who are not covered by either

the FF VEBA plan or the Police VEBA plan. The City Commission further authorized City contributions

beginning January 1, 2007 in the amount of 1.65% of the salary of participating management employees and

2.15% of the salary of other eligible employees. The plans are administered by their respective Boards of

Trustees, appointed partly by the City and partly by the membership of each plan. Each plan has a Declaration

of Trust which has been approved and may be amended by the respective Board of Trustees and which sets out

provisions for payment of benefits to the members. Effective October 1, 2010, employer contributions to the

General Employees VEBA and the Management Employees VEBA were suspended. Liability of the City is

limited to periodic contributions as required by Ordinance.

NOTE Q – DEFERRED COMPENSATION PLANS

The City offers its employees a deferred compensation plan created in accordance with Internal Revenue

Service (“IRS”) Code Section 457 (“457 Plan”). The 457 Plan, available to all City employees, permits them to

defer a portion of their salary until future years. The deferred compensation is not available to employees until

termination, retirement, death, or the hardship distribution criteria as defined in IRS Code Section 457. The

assets of the plans are held in trust and are the sole property of the participants. No balances or financial

information relative to the 457 Plan are reported in the basic financial statements.

NOTE R – OTHER POSTEMPLOYMENT BENEFITS

The City's Other Postemployment Benefits Plan is reported in accordance with Governmental Accounting

Standards Board Statement No. 45, Accounting and Reporting by Employers for Postemployment Benefits other

than Pensions ("OPEB"). Pursuant to Section 112.081, Florida Statutes, the City is required to permit eligible

retirees and their eligible dependents to participate in the City's health insurance program at a cost to the retiree

that is no greater than the cost to active employees. These retirees pay 100% of the blended rate for active and

retired employees. Because the blended rate is greater than that of a plan including active employees only and

less than that of a plan including retirees only, the amount the City expends for active employees includes an

implicit subsidy for participating retirees and dependents.

76


September 30, 2016

NOTE R – OTHER POSTEMPLOYMENT BENEFITS - CONTINUED

The City is accounting for OPEB benefits through the Other Post-Employment Benefits Trust Fund ("The OPEB

Trust") established by the City Commission on September 23, 2008. No employee or retiree contributions to the

Trust are required. Future contributions to the trust will be budgeted by the City Commission based on

actuarially determined amounts. The OPEB Trust is a single employer fund administered by a Board of

Trustees as designated in the Declaration of Trust. The Trust provides for the payment of implicit rate subsidies

and other non-pension post-employment benefits for eligible retirees and their families. Amendments to the

Trust must be in accordance with governing Ordinance No. 4106-08, unless such Ordinance is subsequently

amended by the City.

OPEB calculations are based on the OPEB benefits provided under the terms of the substantive plan in effect at

the time of each valuation and on the pattern of sharing of costs between the employer and plan members to that

point. Actuarial calculations for the OPEB plan reflect a long-term perspective. The actuarial valuation

involves estimates of the values of reported amounts and assumptions about the probability of events far into the

future. Actuarially determined amounts are subject to continual revision as results are compared to past

expectations and new estimates are made about the future.

The City's actuarially determined annual OPEB cost and net OPEB overfunding for the fiscal years ended

September 30, are as follows:

2016 2015 2014

Annual required contribution (ARC) 1,081,200$ 847,182$ 675,545$

Interest on net OPEB obligation (NOO) (258,795) (229,403) (187,181)

NOO amortization adjustment to ARC 426,965 378,473 173,815

Annual OPEB cost 1,249,370 996,252 662,179

Employer contribution (1,736,036) (1,615,043) (1,551,049)

Change in net OPEB obligation (486,666) (618,791) (888,870)

Net OPEB obligation (overfunding), beginning of year (5,448,318) (4,829,527) (3,940,657)

Net OPEB obligation (overfunding), end of year (5,934,984)$ (5,448,318)$ (4,829,527)$

Percentage of OPEB cost contributed 139.0% 162.1% 234.2%

77


September 30, 2016


Actuarial methods and significant actuarial assumptions used to determine the annual required contribution for

the current year were as follows:

The Schedule of Funding Progress for the OPEB plan, which is part of Required Supplementary Information

immediately following the Notes to the Financial Statements, presents multi-year trend information about

whether the actuarial value of plan assets is increasing or decreasing relative to the actuarial liability for benefits

over time.

The following table presents healthcare trend rates related to the increase in medical and prescription drug

benefits in the five years following the valuation date. The percentages include a pure inflation factor of 3%.

Funding progress of the OPEB Trust as of the October 1, 2015 measurement date is as follows:

Actuarial valuation date (effective date of report) September 30, 2016

Actuarial measurement date ("rolled back" date) October 1, 2015

Actuarial cost method Entry Age Normal Level % of Salary

Amortization method for unfunded actuarial liability Level Percent of Payroll

Amortization period 15 Years

Asset valuation method Fair Value

Actuarial assumptions:

Investment discount rate (long term expectation of

investment return on assets) 4.75%

Projected salary increases including inflation and other across

the board increases. Includes no increase in number of active

employees covered by the plan. 3.00%

Year Trend

2017 9.0%

2018 8.5%

2019 8.0%

2020 7.5%

2021 7.0%

Actuarial Accrued Unfunded AAL

Value of Liability Unfunded Funded Covered as % of

Assets (AAL) AAL Ratio Payroll Covered Payroll

(A) (B) (B) - (A) (A) / (B) (C) [(B)-(A)]/(C)

9,597,217$ 15,355,088$ 5,757,871$ 62.5% 84,063,813$ 6.8%

78


September 30, 2016


OPEB Trust Fund financial statements for the fiscal year ended September 30, 2016, which are included in the

Fiduciary Fund Financial Statements of this report, are as follows:

Accounting for the OPEB Trust Fund is done by City of West Palm Beach staff and separately issued audited

statements are not available.

Cash and cash equivalents 1,271,507$ Additions

Employer contributions 1,736,036$

Interest receivable 8 Investment earnings (loss) 1,156,608

Total additions 2,892,644

Investments

Domestic equity 5,321,574 Deductions

Domestic fixed income 2,090,879 Participant benefit payments 867,021

International fixed income 2,459,642 Administrative expenses 19,073

Real estate investment trust 460,156 Total deductions 886,094

Total investments 10,332,251

Net increase 2,006,550

Total assets 11,603,766

Net position

Beginning of year 9,597,216

Net position 11,603,766$ End of year 11,603,766$

STATEMENT OF FIDUCIARY NET POSITION STATEMENT OF CHANGES IN FIDUCIARY NET POSITION

September 30, 2016 For the Fiscal Year Ended September 30, 2016

79


September 30, 2016

NOTE S – FUND BALANCE CONSTRAINTS

Fund balances are separated into five categories of constraints as shown in the following table:

General

Fund

City Center

CRA Fund

Northwood/

Pleasant

City CRA

Fund

2016

Capital

Bond Fund

Other

Governmental

Funds

Total

Governmental

Funds

Fund balances:

Nonspendable

Advances to other funds 850,740$ -$ -$ -$ -$ 850,740$

Inventories 291,976 - - - 63,308 355,284

Prepaid items 5,688,171 - - - - 5,688,171

Restricted

Forfeiture - - - - 608,205 608,205

Cemetery trust - - - - 1,148,789 1,148,789

Transportation - - - - 8,282,998 8,282,998

Public safety - - - - 11,054,146 11,054,146

Economic environment - 22,384,416 2,582,397 - 7,274,651 32,241,464

Library - - - - 39,318 39,318

Debt service - - - 2,109,697 2,109,697

Capital outlay - - - 38,048,240 1,250,892 39,299,132

Committed

Emergency reserve 13,722,195 - - - - 13,722,195

Land held for resale - - - - 2,926,990 2,926,990

Public safety - - - - 2,090,013 2,090,013

Leisure services - - - - 863,077 863,077

Capital outlay - - - - 3,836,515 3,836,515

Assigned

For subsequent year's expenditures 2,404,792 - - - - 2,404,792

Unassigned 18,060,085 - - - - 18,060,085

Total fund balances 41,017,959$ 22,384,416$ 2,582,397$ 38,048,240$ 41,548,599$ 145,581,611$

bcuningham

Typewritten Text

80

bcuningham

Typewritten Text


September 30, 2016

NOTE T – SUBSEQUENT EVENTS

On October 3, 2016, the City entered into a lease/purchase agreement for the acquisition of $2.7 million of 20

vehicles. These vehicles will be used to replace and upgrade outdated vehicles in the fire, sanitation and police

departments. An annual lease payment of $556,857 will be made during each of the next five years.

On February 1, 2017, the City issued the Series 2017 Utility System Revenue Bonds for an aggregate amount of

$136.81 million. The proceeds of the series 2017A Utility Revenue Refunding Bonds will be used primarily to

finance capital projects related to the Utility System. The proceeds of the 2017B Utility System Revenue

Refunding Bonds will be used for the advance refunding and defeasance of $38.25 million of the City’s $42.315

million outstanding Utility System Revenue Refunding Bonds, Series 2008A. The proceeds of the Series 2017C

Bonds will provide for the current refunding of $41.845 million in aggregate principal amount of the City’s

$99.99 million outstanding Utility System Variable Rate Revenue Bonds, Series 2008C.

NOTE U – SPECIAL ITEM

In June of 2016, the city issued $50.4 million of pension obligation bonds to fund a major portion of the

unfunded police pension liability. Investment earnings on the bond proceeds are expected to far exceed the

bonds’ interest costs. The payment of $50 million to the police pension is being reported in the governmental

funds’ statement of revenues, expenditures, and changes in fund balances as a “special” item due to the unusual

nature and significant size of this transaction. The city had not previously issued debt for pension funding.

81

West Palm Beach West Palm Beach Restated EmployeesPolice Pension Firefighters Pension Pension Fund

Total Pension Liability ("TPL")Changes for the Year: Service cost 3,720,389$ 3,764,066$ 44,894$ Interest on the TPL 23,790,608 12,846,010 3,005,049 Difference-expected vs. actual experience of TPL 439,779 (2,709,527) (467,954) Changes in assumptions 2,221,969 Benefit payments (14,788,140) (14,063,173) (2,656,230) Refunds (60,567) (246,947) - Other 2,110,393 7,613,395 - Net change in TPL 17,434,431$ 7,203,824$ (74,241)$ TPL balance - beginning of year 302,946,753 242,577,922 38,868,783TPL balance - end of year 320,381,184$ 249,781,746$ 38,794,542$

Plan Fiduciary Net Position ("FNP")Changes for the year: Contributions - employer and state 9,857,010$ 7,530,174$ -$ Contributions - employees 2,154,131 2,963,279 93,620 Net investment income 1,873,520 3,085,047 456,643 Benefit payments (14,788,140) (14,063,173) (2,656,230) Refunds (60,567) (246,947) - Pension plan administrative expense (266,916) (204,066) (83,101) Other 898,188 58,204 2,380 Net change in FNP (332,774)$ (877,482)$ (2,186,688)$ FNP balance - beginning of year 259,166,994 176,974,492 45,171,494Adjustment - 73,041 257 FNP balance - end of year 258,834,220$ 176,170,051$ 42,985,063$ (1)

Change in Net Pension Liability ("NPL")

NPL - Beginning of year 43,779,759$ 65,603,430$ (6,302,711)$ NPL - End of year 61,546,964 73,611,695 (4,190,521) Increase (decrease) in NPL 17,767,205 8,008,265 2,112,190

Plan FNP as a percentage of TPL 81% 71% 111%Covered employee payroll 18,805,018$ 16,144,923$ 1,814,346$ NPL as a percentage of covered payroll 327% 456% -231%

(1) The fiduciary net position reported here for the Restated pension differs from the amount reported on the 2015 pension statements by the amount of unamortized prepaid contributions recognized as an increase in fund balance on this actuarial statement.


REQUIRED SUPPLEMENTARY INFORMATION

Measurement Date September 30, 2015

SCHEDULE OF CHANGES IN THE NET PENSION LIABILITY AND RELATED RATIOS

83

Fiscal Year Ended West Palm Beach West Palm Beach West Palm Beach

September 30 Police Pension Firefighters Pension Restated Pension

2014 Actuarially determined employer contribution 10,041,651$ 7,370,114$ 1,350,431$

2014 Actual contributions 10,041,651 7,419,393 1,350,431 (1)

2014 Contribution deficiency (excess) -$ (49,279)$ -$

2014 Covered employee payroll 25,959,266 15,363,247 2,019,761

2014 Actual contribution as % of covered payroll 38.68% 48.29% 66.86%

2015 Actuarially determined employer contribution 9,744,918$ 7,478,085$ 728,137$

2015 Actual contributions 9,744,918 7,530,174 728,137 (1)

2015 Contribution deficiency (excess) -$ (52,089)$ -$


2015 Actual contribution as % of covered payroll 40.30% 49.01% 40.13%

2016 Actuarially determined employer contribution 9,726,454$ 7,130,564$ -$

2016 Actual contributions 59,726,454 7,130,564 - (1)

2016 Contribution deficiency (excess) (50,000,000)$ -$ -$


2016 Actual contribution as % of covered payroll 290% 43% 0%

Notes:

(1) In 2013, the City contributed the full amount of the outstanding pension liability to the Restated Pension Plan. The payment

was booked as a prepayment and each year the city recognizes contribution expenditures based on the actuarially determined

contribution amount.

(2) This schedule will be expanded each year until it includes 10 years of information.

CITY OF WEST PALM BEACH, FLORIDASCHEDULE OF CITY CONTRIBUTIONS

FOR THE THREE YEARS ENDED SEPTEMBER 30, 2016

84

West Palm Beach Police Pension Fund:

Actuarial cost method Entry Age Normal

Amortization method Level Percentage of Payroll, Closed

Remaining amortization period 30 Years

Asset valuation method 4-Year Smoothed Market

Inflation 3.0%

Salary increases 5%, including inflation

Long-term expected investment rate of return 8.0%

Retirement age Experience-based rate tables of rates that are specific to the type of eligibility

Mortality80% recognition of the RP-2000 Combined Healthy Participant Mortality Table for males and females

with mortality improvement projected using Scale AA after 2000 and 20% recognition of the 1983

Group Annuity Mortality Table for males and females with no future mortality improvements

Cost-of-living adjustments 3% of base annually after age 65 provided CPI has increased at least 3%

West Palm Beach Firefighters Pension Fund:

Actuarial cost method Entry Age Normal

Amortization method Level Percentage of Payroll, Closed

Remaining amortization period 1-30 Years

Asset valuation method 4-Year Smoothed Market

Inflation 4.0%

Salary increases 5.0% to 5.5%, including inflation


Long-term municipal bond rate 3.71%

Retirement age Age and experience-based table of rates that are specific to the type of eligibility condition

MortalityRP-2000 Combined Mortality Table projected to 2005. At the time of the most recent experience study

(2013), a margin for future mortality improvements is included in these tables.

Cost-of-living adjustments 5.5% per year for Plan A recipients (hired prior to May 1, 1959). Implied 1.17% per year for prior Plan

B pension recipients as of September 30, 1998, if aggregate gains from all sources do not limit it.

West Palm Beach Restated Employees Pension Fund

Actuarial cost method Aggregate

Amortization method N/A

Remaining amortization period N/A

Asset valuation method Market Value

Inflation 5.00%

Salary increases 5.0% to 8.8% per year


Municipal bond rate 3.71%

Retirement age Age-based table of rates that are specific to the type of eligibility condition.

Mortality RP-2000 Combined Healthy Mortality Table. There is currently no margin for future mortality

improvement.

Cost-of-living adjustments 2% Simple


METHODS AND ASSUMPTIONS USED TO DETERMINE THE PENSION CONTRIBUTION RATES

NOTES TO THE SCHEDULE OF PENSION CONTRIBUTIONS

Actuarial valuation date: September 30, 2014

85

Actuarial

Valuation

Date

October 1

Actuarial

Value of

Assets

(A)

Actuarial

Accrued

Liability

(AAL)

Frozen

Entry Age

(B)

Unfunded

(AAL)

(B) - (A)

Funded

Ratio

(A) / (B)

Active

Participant

Covered

Payroll

( C)

Unfunded AAL

as Percentage of

Active Participant

Covered Payroll

((B-A)/C)

2012 7,311$ 15,041$ 7,730$ 49% 85,884$ 9.0%

2013 8,145 13,210 5,065 62% 80,864 6.3%

2014 9,074 13,753 4,679 66% 83,290 5.6%

2015 9,597 15,355 5,758 63% 84,064 6.8%

Dollar amounts are in thousands.


SCHEDULE OF FUNDING PROGRESS

OPEB TRUST FUND

86

Original Budget Final Budget General Fund

Variance with Final Budget

Positive (Negative)

Taxes: General property taxes: Current year 62,060,864$ 62,060,864$ 61,081,956$ (978,908)$ Delinquent taxes 1,900,000 1,900,000 2,319,266 419,266

63,960,864 63,960,864 63,401,222 (559,642)

Utility services taxes: Electricity 10,231,300 10,231,300 10,614,492 383,192 Water 3,926,658 3,926,658 4,070,057 143,399 Gas 500,000 500,000 532,159 32,159 Propane 87,166 87,166 103,656 16,490 Communications service tax 5,725,712 5,725,712 5,505,816 (219,896)

20,470,836 20,470,836 20,826,180 355,344 Franchise taxes: Electricity 8,778,949 8,778,949 8,533,718 (245,231) Utilities 150,000 150,000 90,048 (59,952) Rolloff containers 300,000 300,000 365,244 65,244 Cable TV - - - - Towing 30,000 30,000 18,750 (11,250)

9,258,949 9,258,949 9,007,760 (251,189)

Insurance premium taxes:

Fire insurance (firemans' pension) 1,528,868 1,528,868 - (1,528,868)

Total Taxes 95,219,517 95,219,517 93,235,162 (1,984,355)

Licenses and Permits: Business licenses and permits: Occupational licenses 3,125,000 3,125,000 3,129,599 4,599 Penalties on licenses 60,500 60,500 65,651 5,151

3,185,500 3,185,500 3,195,250 9,750

Nonbusiness licenses and permits: Vehicle for hire 10,000 10,000 6,487 (3,513) Miscellaneous permits, registrations and inspections 200,000 200,000 187,320 (12,680) Certification of use fee 235,000 235,000 305,398 70,398 Historic preservation - - 30 30

445,000 445,000 499,235 54,235

Total Licenses and Permits 3,630,500 3,630,500 3,694,485 63,985

CITY OF WEST PALM BEACH, FLORIDASCHEDULE OF REVENUES--BUDGET AND ACTUAL

GENERAL FUND NON-GAAP BUDGETARY BASIS

For Fiscal Year Ended September 30, 2016

88



Positive (Negative)




Intergovernmental Revenue:

Federal Revenue:

Department of Justice Grant 16,000 20,573 1,076 (19,497)

State revenue: Revenue Sharing Act of 1972 3,416,858 3,416,858 3,476,021 59,163 Alcoholic beverage licenses 120,000 120,000 140,199 20,199 Gasoline tax refund 110,000 110,000 92,586 (17,414) Half-cent sales tax 8,536,610 8,536,610 8,311,702 (224,908) Firefighters' supplemental compensation 40,000 40,000 84,950 44,950 State Library Services Grant 203,769 419,771 143,160 (276,611)

12,427,237 12,643,239 12,248,618 (394,621)

County Revenue: Occupational licenses 206,000 206,000 224,898 18,898 Mobile home licenses 60,000 60,000 64,320 4,320 Hazmat 511,492 511,492 513,988 2,496 911 grant 170,000 431,000 121,005 (309,995)

947,492 1,208,492 924,211 (284,281)

Other Local Unit Revenue: West Palm Beach Housing Authority - PILOT 38,000 38,000 22,998 (15,002) Other Local Grants 119,818 136,478 79,766 (56,712)

157,818 174,478 102,764 (71,714)

Total Intergovernmental Revenue 13,548,547 14,046,782 13,276,669 (770,113)

89



Positive (Negative)




Charges for Services: General government: Administration fees: Community Redevelopment Agency 4,002,143$ 4,002,143$ 4,002,143$ -$ Waterworks and sewage disposal systems 6,053,680 6,053,680 6,052,840 (840) Internal service funds 2,628,317 2,628,317 2,628,317 - Miscellaneous charges for services 442,800 442,800 460,414 17,614 Lien Searches 550,000 550,000 498,353 (51,647) Special Assessment - - 3,897 3,897 Planning Fees 631,000 631,000 573,097 (57,903) Election filing fees 5,000 5,000 7,600 2,600

14,312,940 14,312,940 14,226,661 (86,279)

Public safety: False burglar and fire alarms 192,000 192,000 291,857 99,857 Identification cards 12,000 12,000 16,502 4,502 Certified copies 15,000 15,000 13,067 (1,933) Police services 77,000 77,000 60,647 (16,353) Fire department services 1,350,000 1,350,000 1,319,406 (30,594) EMS 3,330,000 3,362,000 3,476,840 114,840 Fire inspection fees 392,500 392,500 659,573 267,073

5,368,500 5,400,500 5,837,892 437,392

Public works: Street Lighting 158,793 158,793 158,793 -

158,793 158,793 158,793 -

Sanitation: Household garbage and trash 4,835,000 4,835,000 4,884,803 49,803 Commercial garbage and trash 7,926,100 7,926,100 8,115,096 188,996 Single family recycling charges 850,000 850,000 903,383 53,383 Multi-family recycling charge 535,000 535,000 517,421 (17,579) Board and secure 645,000 795,000 1,140,063 345,063

14,791,100 14,941,100 15,560,766 619,666

Library: Fees 32,000 32,000 27,483 (4,517) Photocopies 3,510 3,510 3,555 45

35,510 35,510 31,038 (4,472)

90



Positive (Negative)




Charges for Services, continued:

Parks and playgrounds:

Fees, permits and rentals 58,500$ 58,500$ 53,723$ (4,777)$

Arts and crafts 12,000 12,000 6,298 (5,702)

Athletic programs 110,000 110,000 112,902 2,902

Dance programs 16,000 16,000 8,498 (7,502)

Tennis programs 9,000 9,000 8,801 (199)

Swimming pools 30,000 30,000 22,141 (7,859)

Other program activity fees 708,000 708,000 755,168 47,168

Special events - - (1,800) (1,800)

943,500 943,500 965,731 22,231

Total Charges for Services 35,610,343 35,792,343 36,780,881 988,538

Fines and Forfeitures:

Lien Fines - - 1,200 1,200

Library fines 50 50 - (50)

Court fines 191,000 191,000 111,504 (79,496)

Code violations - sanitation 100,500 100,500 131,123 30,623

Returned checks 750 750 936 186

Total Fines and Forfeitures 292,300 292,300 244,763 (47,537)

Interest:

Interest earnings 176,500 176,500 333,404 156,904

Interest on delinquent taxes 80,000 80,000 213,594 133,594

Current tax interest 25,000 25,000 18,928 (6,072)

Interest earnings on advances 218,700 218,700 220,565 1,865

Lien interest 25,000 25,000 54,327 29,327

Total Interest 525,200 525,200 840,818 315,618

Rents and Royalties:

First United Bank Easement Lease 265,000 265,000 247,694 (17,306)

Total Rents and Royalties 265,000 265,000 247,694 (17,306)

Miscellaneous:

Sale of property - 48,200 38,806 (9,394)

Sale of scrap and surplus equipment 5,000 5,000 2,307 (2,693)

Contributions 118,917 384,596 190,239 (194,357)

Other 237,517 515,267 1,012,385 497,118

Total Miscellaneous 361,434 953,063 1,243,737 290,674

Total Revenue 149,452,841$ 150,724,705$ 149,564,209$ (1,160,496)$

Reconciliation to GAAP basis statements:

Deduct administrative fees recorded as budgeted

to reduce expenditures in 'Statement of Revenues"

Changes in Fund Balances - Governmental Funds (12,342,260)

Total Revenue - GAAP basis 137,221,949$

91

Original Budget Final Budget Actual


Positive (Negative)

General Government

Department of Mayor

Mayor's office 739,482$ 814,482$ 696,808$ 117,674$

City clerk 544,327 544,327 521,719 22,608

City administrator 1,415,867 1,415,867 1,303,631 112,236

CRA 989,415 989,415 989,415 -

Economic development office 666,454 766,454 602,723 163,731

Youth and Family services 406,770 406,770 352,932 53,838

CityTV 18 624,955 699,955 397,314 302,641

Elections 98,667 98,667 5,063 93,604

Total department of Mayor 5,485,937 5,735,937 4,869,605 866,332

Department of City Commission 545,003 547,503 592,184 (44,681)

Department of Internal Auditor 603,219 603,219 557,758 45,461

Department of Support Services

City hall building operations 2,532,832 2,518,832 2,321,412 197,420

Seaboard railway station maintenance 25,595 25,595 15,597 9,998

Air conditioning 232,965 232,965 214,551 18,414

Total department of Support services 2,791,392 2,777,392 2,551,560 225,832

Department of Finance

Financial administration 858,349 715,349 685,265 30,084

Budget office 329,665 401,665 398,235 3,430

Cash management 974,263 1,045,263 1,035,707 9,556

Special Revenue 288,026 288,026 281,565 6,461

Accounting 1,105,490 1,105,490 1,125,081 (19,591)

Total department of Finance 3,555,793 3,555,793 3,525,853 29,940

Department of Procurement 1,161,746 1,161,746 1,136,146 25,600

Department of City Attorney 2,576,452 3,076,452 2,961,621 114,831

Department of Human Resources

Personnel services 701,744 701,744 613,305 88,439

Administration and support 645,830 655,163 666,556 (11,393)

Labor relations and training 212,869 212,869 200,742 12,127

Minority recruiting 21,830 21,830 18,400 3,430

Employee benefits 342,998 342,998 286,171 56,827

Total department of Human Resources 1,925,271 1,934,604 1,785,174 149,430

Department of Housing and Community Development

Housing development 382,408 382,408 378,324 4,084

Economic development 189,881 189,881 172,103 17,778

Total department of Housing and

Community development 572,289 572,289 550,427 21,862

Department of Development Services

Business tax 755,599 755,599 642,970 112,629

Code enforcement 2,113,167 2,263,167 2,230,324 32,843

Planning 1,700,947 1,715,947 1,510,131 205,816

Total department of Development Services 4,569,713 4,734,713 4,383,425 351,288

Non-Departmental General Government Expenditures 1,879,704 1,940,125 447,445 1,492,680

Total General Government 25,666,519$ 26,639,773$ 23,361,198$ 3,278,575$

(continued)

CITY OF WEST PALM BEACH, FLORIDASCHEDULE OF EXPENDITURES--BUDGET AND ACTUAL



92



Positive (Negative)




Public Safety

Department of Police

Police administration 10,656,959$ 10,806,959$ 10,811,515$ (4,556)$

Building maintenance 962,616 962,616 846,982 115,634

Innovative policing 2,472,629 1,898,629 1,821,871 76,758

Law enforcement education 54,947 54,947 54,942 5

Patrol services 21,488,416 20,751,116 20,654,678 96,438

Community services 2,845,015 3,840,015 3,735,415 104,600

Special services 1,160,049 1,110,609 995,203 115,406

Traffic 2,601,317 2,601,317 2,954,683 (353,366)

Narcotics division 4,447,514 4,552,514 4,533,593 18,921

Investigative services 8,902,343 8,998,343 9,052,205 (53,862)

Police grants 50,919 117,761 62,905 54,856

Dispatch 3,945,270 3,945,270 3,720,428 224,842

Total department of Police 59,587,994 59,640,096 59,244,420 395,676

Department of Fire

Fire administration and support 1,216,162 1,216,162 1,330,691 (114,529)

Emergency management 358,111 358,111 362,464 (4,353)

Fire equipment maintenance 1,013,851 1,018,086 927,384 90,702

Emergency medical service 1,584,861 1,580,499 1,613,243 (32,744)

Fire prevention 1,085,556 1,085,556 952,284 133,272

Fire training 840,301 840,301 751,481 88,820

Hazmat 458,772 458,772 323,716 135,056

Fire suppression 25,915,094 25,918,003 26,607,004 (689,001)

Total department of Fire 32,472,708 32,475,490 32,868,267 (392,777)

Total Public Safety 92,060,702 92,115,586 92,112,687 2,899

Engineering Services and Public Works

Department of Engineering Services 2,625,474 2,673,674 2,319,035 354,639

Department of Public Works

Street lighting 1,194,818 1,194,818 1,038,539 156,279

Street maintenance 1,507,860 1,507,860 1,314,706 193,154

Total department of Public Works 2,702,678 2,702,678 2,353,245 349,433

Total Engineering Services and Public Works 5,328,152 5,376,352 4,672,280 704,072

Health and Sanitation

Department of Sanitation 10,406,029 10,406,029 9,985,070 420,959

Total Health and Sanitation 10,406,029$ 10,406,029$ 9,985,070$ 420,959$

(continued)

93



Positive (Negative)




Leisure Services

Department of Library:

Library 4,089,779$ 4,297,570$ 4,008,589$ 288,981$

Library state grants 108,157 244,952 69,227 175,725

Total department of Library 4,197,936 4,542,522 4,077,816 464,706

Department of Parks and Recreation

Administration and support 533,281 533,281 518,451 14,830

Special populations 85,489 85,489 83,989 1,500

Events 371,254 371,254 366,855 4,399

Community recreation 4,490,396 4,536,166 4,548,067 (11,901)

Volunteer Services 223,708 223,708 162,108 61,600

Fountain maintenance 257,874 257,874 205,821 52,053

Parks Maintenance 8,951,989 8,951,989 7,370,053 1,581,936

Youth programs 604,896 609,896 505,739 104,157

Cemetery 388,865 388,865 378,948 9,917

Total department of Parks and Recreation 15,907,752 15,958,522 14,140,031 1,818,491

Total Leisure Services 20,105,688 20,501,044 18,217,847 2,283,197

Capital Outlay Capital outlay department wide 158,263 843,609 629,008 214,601

Total Capital Outlay 158,263 843,609 629,008 214,601

Debt Service Costs

Principal Retirement 1,347,910 1,360,510 1,347,908 12,602

Interest charges 270,696 272,096 270,695 1,401

Issuance Costs - 960,000 2,095,770 (1,135,770)

Total Debt Service Costs 1,618,606 2,592,606 3,714,373 (1,121,767)

Total Expenditures 155,343,959$ 158,474,999$ 152,692,463$ 5,782,536$

94

ReduceDeduct Expenditures for

Year End ReclassificationBudgetary Basis Encumbrances of Administrative GAAP Basis

Expenditures Outstanding Fees Revenue Expenditures

General government 23,361,198$ (299,711)$ (10,136,193)$ 12,925,294$ Public safety 92,112,687 (303,283) (2,206,067) 89,603,337 Engineering and public works 4,672,280 (2,787) - 4,669,493 Economic environment - - - - Health and sanitation 9,985,070 (4,414) - 9,980,656 Leisure services 18,217,847 (281,673) - 17,936,174 Capital outlay 629,008 (172,041) 456,967 Debt service: Principal retirement 1,347,908 - - 1,347,908 Interest 270,695 - - 270,695 Issuance costs and other 2,095,770 - - 2,095,770

Totals 152,692,463$ (1,063,909)$ (12,342,260)$ 139,286,294$

CITY OF WEST PALM BEACH, FLORIDASCHEDULE OF EXPENDITURES AND ENCUMBRANCES - SUMMARY

GENERAL FUNDFOR THE FISCAL YEAR ENDED September 30, 2016

95

OTHER GOVERNMENTAL FUNDS

Special Revenue Funds

Local Gas Tax Fund - This fund accounts for revenue received from the State of Florida, which collects and remits to the City

a portion, based on City population, of the Local Option Sixth Cent Fuel Tax from the sale of gasoline in Palm Beach County.

The revenue is restricted to use for road and street improvements.

Mandel Library Grant Fund - This fund accounts for grant revenues received from the Mandel Foundation. The Library’s

uses of the foundations’ grant proceeds are restricted to specific programs as proposed by the grantor in conjunction with City

administration.

Impact Fees Western Expansion - This fund accounts for impact fees restricted for three programs: Affordable Housing

Trust Fund; the wetlands mitigation program for Roebuck/Jog Road; and/or the construction of the City’s public safety facility

in the area.

Community Development Fund - This fund accounts for revenue received from the Department of Housing and Urban

Development. The revenue is restricted to accomplishing the various objectives of the Community Development Block Grant

Program.

Neighborhood Stabilization Fund - This fund accounts for revenue received from a federal grant. The revenues of the fund

are restricted for the purpose of the acquisition, rehabilitation, and retention of low, moderate and medium income housing.

CDBG Revolving Loan Fund - This fund accounts for revenue received from the Department of Housing and Urban

Development for the Community Development Block Grant (CDBG). The revenues of the fund are restricted for the purpose

of providing grants or loans for affordable housing and economic development projects.

Home Program Fund - This fund accounts for grant revenues received from the Department of Housing and Urban

Development for the HOME Investment Partnership Program. The revenue is restricted for activities related to new

construction, rehabilitation, acquisition, and allowable operating and administrative expenses.

HOPWA Fund - This fund accounts for grant revenues received from the Department of Housing and Urban Development for

the “Housing Opportunities for Persons with AIDS Program”. The revenue is restricted for housing opportunities and support

services to individuals with AIDS and related diseases.

SHIP Program Fund - This fund accounts for grant revenues received from the State of Florida Department of Community

Affairs for the State Housing Initiatives Partnership program. The revenue is restricted for activities relating to new

construction, rehabilitation, land acquisition, down-payment assistance and allowable operating and administrative costs.

Housing Trust - This fund accounts for revenues used for the development of affordable housing. Primary funding sources

include proceeds from the sale of City-owned properties designated for affordable housing, and proceeds from the sale of City-

owned Transfer of Development Rights (TDRs).

Financial Assistance Fund – This fund was created with residual monies from the HOPE Program Fund for the purpose of

providing financial assistance to citizens in the City seeking financial assistance to prevent or reduce foreclosures in an effort

to sustain home ownership within the city.

Permits Fund - This fund accounts for all building permit fees. State statute restricts the use of these fees for building

permitting and inspection activities.

Fire Assessment Fund - This fund accounts for special assessment revenue assessed and received from taxpayers for the

purpose of funding the operations, improvements, or replacement of fire equipment and machinery.

Red Light Camera Fund - This fund accounts for special assessment revenue assessed and received from traffic citations for

the purpose of funding the operations, improvements, or replacement of Police equipment and machinery.

Waterfront District Fund - This fund accounts for expenditures associated with promotional activities at the City’s waterfront

park.

Special Revenue Grant Programs Fund - This fund is used to account for the proceeds and expenditures from federal, state

and local grant awards that do not have a requirement to be accounted for in a separate governmental fund.

Cemetery Sinking Fund - This fund is used to account for the proceeds from the sale of cemetery lots to be used for care and

maintenance of the cemetery.

Miscellaneous Trust Fund - This fund is used to account for assets seized and forfeited in the course of law enforcement

activities.

97

Debt Service Funds

Special Obligation Bond Series 2006 Fund - This fund accounts for principal and interest payments of the 2006 Special

Obligation Revenue Bonds.

2005 General Obligation Bonds Fund - This fund accounts for principal and interest payments of the 2005 General

Obligation Bonds.

NPCCRA Debt Service Reserve Fund – This fund accounts for the reserve portion of principal and interest related to the 2005

Northwood / Pleasant City capital improvements bond.

Capital Project Funds

Other Capital Projects Fund - This fund accounts for various capital projects not accounted for in a separate fund. Projects

include improvements to various parks, renovations to City Buildings, and various landscaping through out the City.

Art in Public Places Fund - By local ordinance, 1% of most City construction projects, up to a maximum of $150,000 per

fiscal year, must be set aside for the selection, commission, acquisition and maintenance of art in public places. This fund was

created to account for the expenditure of such funds, other than projects funded by bonds.

City Commons & Waterfront Park Construction Fund – This fund was specifically created to account for the construction of

the City Commons and the Waterfront Park.

NPCCRA Series 2005A Construction Fund - This fund accounts for the taxable portion of the Northwood / Pleasant City

Bond for land acquisition and development costs.

NPCCRA Series 2005B Construction Fund - This fund accounts for the non-taxable portion of the Northwood / Pleasant City

Bond for renewal and development costs.

Land Acquisition Fund - This fund accounts land holdings purchased by the City for future development.

Capital Grant Program Fund - This fund is used to account for the proceeds and expenditures from federal, state and local

grant awards used in the construction of capital assets that do not have a requirement to be accounted for in a separate

governmental fund.

98

Special Revenue

Funds

Debt Service Funds

Capital Project Funds

Total Non-Major

Governmental Funds

ASSETS

Cash and cash equivalents 12,510,460$ 871,579$ 1,767,488$ 15,149,527$

Investments 15,299,721 1,230,500 2,510,073 19,040,294

Receivables (net):

Accounts 509,922 - 6,842 516,764

Interest 62,466 7,921 9,666 80,053

Notes 3,040,886 - - 3,040,886

Liens 526,932 - - 526,932

Due from other governments 1,414,818 - 1,061,084 2,475,902

Due from other funds 268,438 - - 268,438

Inventory 63,308 - - 63,308

Land held for resale 3,011,786 - 2,856,572 5,868,358


Cash and cash equivalents - - 1,437,677 1,437,677

Total assets 36,708,737$ 2,110,000$ 9,649,402$ 48,468,139$

LIABILITIES

Vouchers payable and accrued liabilities 1,701,022 303 416,358 2,117,683

Salaries, wages and benefits payable 104,634 - - 104,634

Trust deposits 20,189 - - 20,189

Due to other funds 140,966 - 1,218,647 1,359,613

Due to other governments 1,524 - - 1,524

Unearned revenue 693,097 - - 693,097

Total liabilities 2,661,432 303 1,635,005 4,296,740


Unavailable revenue 2,622,800 - - 2,622,800

FUND BALANCES

Nonspendable 63,308 - - 63,308

Restricted 28,408,107 2,109,697 1,250,892 31,768,696

Committed 2,953,090 - 6,763,505 9,716,595

Total fund balances 31,424,505 2,109,697 8,014,397 41,548,599


and fund balances 36,708,737$ 2,110,000$ 9,649,402$ 48,468,139$

CITY OF WEST PALM BEACH, FLORIDACOMBINING BALANCE SHEET

NON-MAJOR GOVERNMENTAL FUNDS

September 30, 2016

99

Local Gas Tax Fund

Mandel Library SR

Fund

Impact Fees Western

Expansion Fund

Community Development

Fund

ASSETS

Cash and cash equivalents 3,601,792$ 18,046$ 296,126$ -$

Investments 5,115,033 25,628 420,538 -

Receivables (net):

Accounts 381,556 - - -

Interest 21,128 128 1,754 -

Notes - - 1,046,543 808,182

Due from other governments - - - 207,633

Inventory - - - -

Land held for resale - - - -

Total assets 9,119,509$ 43,802$ 1,764,961$ 1,015,815$

LIABILITIES

Vouchers payable and accrued liabilities 836,510$ 4,080$ (332)$ 74,767$

Salaries, wages and benefits - 404 - 4,206

Trust deposits - - - -

Due to other funds - - - 128,555

Due to other governments - - - -

Unearned revenues - - - -

Total liabilities 836,510 4,484 (332) 207,528


Unavailable revenue -$ -$ 1,046,562$ 808,010$

FUND BALANCES

Nonspendable - - - -

Restricted 8,282,999 39,318 718,731 277

Committed - - - -

Total fund balances 8,282,999 39,318 718,731 277

Total liabilities, deferred inflows of resourcesand fund balances 9,119,509$ 43,802$ 1,764,961$ 1,015,815$


NON-MAJOR SPECIAL REVENUE FUNDS

September 30, 2016

100

Neighborhood Stabilization

Program Fund

CDBG Revolving Loan Fund

HOME Program Fund

HOPWA Fund

SHIP Program Fund

Housing Trust Fund

35,642$ 41,330$ 921,755$ 11,744$ 841,201$ 213,010$

50,616 58,693 36,833 16,677 - 302,504

- - - - - -

- - - - (668) 1,264

1,186,143 - 18 - - -

146,886 - - 342,767 - -

- - - - - -

2,913,248 - 98,538 - - -

4,332,535$ 100,023$ 1,057,144$ 371,188$ 840,533$ 516,778$

37,175$ -$ (1,072)$ 370,054$ 499$ -$

- - 1,445 1,134 765 -

- - - - - -

- - - - 1,463 -

- - - - - -

- - - - 454,810 -

37,175 - 373 371,188 457,537 -

232,487$ -$ -$ -$ -$ -$

- - - - - -

4,062,873 100,023 1,056,771 - 382,996 516,778

- - - - - -

4,062,873 100,023 1,056,771 - 382,996 516,778

4,332,535$ 100,023$ 1,057,144$ 371,188$ 840,533$ 516,778$

(Continued)

101

Financial Assistance

FundPermits

Fund

Fire Assessment

Fee Fund

Red Light Camera

Fund

ASSETS

Cash and cash equivalents 15,812$ 4,523,612$ 844,299$ 12,554$

Investments 22,456 6,424,143 1,199,019 17,803

Receivables (net):

Accounts - 4,746 3,744 1,170

Interest 94 26,526 5,218 72

Notes - - - -

Liens - 526,932 - -

Due from other governments - - - -

Due from other funds - 268,438 - -

Inventory - - - -


Total assets 38,362$ 11,774,397$ 2,052,280$ 31,599$

LIABILITIES

Vouchers payable and accrued liabilities -$ 138,917$ 12,866$ (19,000)$

Salaries, wages and benefits payable - 54,347 - -

Trust deposits - - - -

Due to other funds - - - -

Due to other governments - - - -

Unearned revenue 53,192 - - -

Total liabilities 53,192 193,264 12,866 (19,000)


Unavailable revenue - 526,987 - -

FUND BALANCES

Nonspendable - - - -

Restricted (14,830) 11,054,146 - -

Committed - - 2,039,414 50,599

Total fund balances (14,830) 11,054,146 2,039,414 50,599

Total liabilities, deferred inflows of resourcesand fund balances 38,362$ 11,774,397$ 2,052,280$ 31,599$



September 30, 2016

(Continued)

102

Waterfront District Fund

Special Revenue Grant

Programs Fund

Cemetery Sinking Fund

Miscellaneous Trust Fund

Total Non-Major Special

Revenue Funds

392,500$ -$ 478,665$ 262,372$ 12,510,460$

557,404 - 679,769 372,605 15,299,721

117,370 1,336 - - 509,922

2,542 - 2,835 1,573 62,466

- - - - 3,040,886

- - - - 526,932

- 717,532 - - 1,414,818

- - - - 268,438

- - 63,308 - 63,308

- - - - 3,011,786

1,069,816$ 718,868$ 1,224,577$ 636,550$ 36,708,737$

134,334$ 91,587$ 12,480$ 8,156$ 1,701,022$

14,877 27,455 - - 104,634

- - - 20,189 20,189

- 10,948 - - 140,966

1,524 - - - 1,524

47,250 137,845 - - 693,097

197,985 267,835 12,480 28,345 2,661,432

8,754 - - - 2,622,800

- - 63,308 - 63,308

- 451,033 1,148,789 608,205 28,408,107

863,077 - - - 2,953,090

863,077 451,033 1,212,097 608,205 31,424,505

1,069,816$ 718,868$ 1,224,577$ 636,550$ 36,708,737$

103

Special Obligation

Bond Series 2006 Fund

2005 General

Obligation Bond Fund

NPCCRA Debt Service

Reserve Fund

Total Non-Major Debt

Service Funds

ASSETSCash and cash equivalents 113,363$ 65,889$ 692,327$ 871,579$

Investments 153,731 93,572 983,197 1,230,500

Receivables (net):

Interest 3,426 391 4,104 7,921

Total assets 270,520$ 159,852$ 1,679,628$ 2,110,000$

LIABILITIES

Vouchers payable and accrued liabilities 303 - - 303

Total liabilities 303 - - 303


Unavailable revenues -$ -$ -$ -$

FUND BALANCES

Restricted 270,217 159,852 1,679,628 2,109,697

Total fund balances 270,217 159,852 1,679,628 2,109,697


and fund balances 270,520$ 159,852$ 1,679,628$ 2,110,000$


NON-MAJOR DEBT SERVICE FUNDS

September 30, 2016

104

Other Capital Projects Funds

Art in Public Places Fund

City Commons

and Waterfront

Fund

NPCCRA Series 2005A Construction

Fund

ASSETS

Cash and cash equivalents 1,484,438$ 73,388$ 151,716$ -$

Investments 2,108,103 104,222 215,457 -

Receivables (net):

Accounts 6,842 - - -

Interest 8,042 469 899 -

Due from other governments - - - -


Cash and cash equivalents - - - 1,437,677


Total assets 3,607,425$ 178,079$ 368,072$ 1,437,677$

LIABILITIES

Vouchers payable and accrued liabilities 223,361$ 49,432$ 44,268$ 175$

Due to other funds - - - 221,162

Total liabilities 223,361 49,432 44,268 221,337


Unavailable revenue -$ -$ -$ -$

FUND BALANCES

Restricted - - - 1,216,340

Committed 3,384,064 128,647 323,804 -

Total fund balances 3,384,064 128,647 323,804 1,216,340


and fund balances 3,607,425$ 178,079$ 368,072$ 1,437,677$


NON-MAJOR CAPITAL PROJECT FUNDS

September 30, 2016

105

NPCCRA Series 2005B

Construction Fund

Grant Capital Projects

Fund

Land Acquisition

Fund

Total Non- Major Capital

Project Funds

14,242$ 14,678$ 29,026$ 1,767,488$

20,227 20,844 41,220 2,510,073

- - - 6,842

84 - 172 9,666

- 1,061,084 - 1,061,084

- - - 1,437,677

- - 2,856,572 2,856,572

34,553$ 1,096,606$ 2,926,990$ 9,649,402$

-$ 99,121$ -$ 416,357$

- 997,485 - 1,218,647

- 1,096,606 - 1,635,004

-$ -$ -$ -$

34,553 - - 1,250,892

- - 2,926,990 6,763,505

34,553 - 2,926,990 8,014,397

34,553$ 1,096,606$ 2,926,990$ 9,649,402$

106

Special Revenue

Funds

Debt Service Funds

Capital Projects Funds

Total Non-Major

Governmental Funds

Revenues

Taxes -$ 1,590,487$ -$ 1,590,487$

Licenses and permits 9,624,941 - - 9,624,941

Intergovernmental 11,049,649 - 1,172,113 12,221,762

Charges for services 2,161,061 - 32,685 2,193,746

Fines and forfeitures 27,667 - - 27,667

Rents and royalties 420,788 - - 420,788

Interest 215,898 33,738 36,295 285,931

Miscellaneous 930,639 - - 930,639

Total revenues 24,430,643 1,624,225 1,241,093 27,295,961

Expenditures

Current

Public safety 8,747,189 - - 8,747,189

Public works 468,155 - 52,006 520,161

Economic environment 6,126,863 - 686,971 6,813,834

Leisure services 3,253,062 - 129,354 3,382,416

Capital outlay 5,341,235 - 2,366,746 7,707,981

Debt service

Principal retirement - 2,410,000 - 2,410,000

Interest charges 129,151 1,252,274 - 1,381,425

Issuance costs and other - 1,050 1,500 2,550

Total expenditures 24,065,655 3,663,324 3,236,577 30,965,556


over (under) expenditures 364,988 (2,039,099) (1,995,484) (3,669,595)

Other financing sources (uses)

Transfers in 3,321,837 2,359,498 1,125,680 6,807,015

Transfers out (1,697,881) (1,132,216) (590) (2,830,687)

Total other financing sources (uses) 1,623,956 1,227,282 1,125,090 3,976,328

Net change in fund balances 1,988,944 (811,817) (870,394) 306,733

Fund balances - beginning 29,435,561 2,921,514 8,884,791 41,241,866

Fund balances - ending 31,424,505$ 2,109,697$ 8,014,397$ 41,548,599$

CITY OF WEST PALM BEACH, FLORIDACOMBINING SCHEDULE OF REVENUE, EXPENDITURES AND CHANGES IN FUND BALANCES

NON-MAJOR GOVERNMENTAL FUNDS


107

Local Gas Tax Fund

Mandel Library SR

Fund

Impact Fees

Western Expansion

Fund

Community Development

FundRevenues Licenses and permits -$ -$ -$ -$ Intergovernmental 2,388,397 202,478 68,141 1,033,423 Charges for services 233,549 - - - Interest 71,853 326 9,500 1,201 Miscellaneous - - 2,047 121,377 Total revenues 2,693,799 202,804 79,688 1,156,001

Expenditures Current Public works 465,814 - - - Economic environment - - - 1,035,552 Leisure services - 136,541 - - Capital outlay 3,544,123 - - 20,449 Total expenditures 4,009,937 136,541 - 1,056,001

Excess (deficiency) of revenue over (under) expenditures (1,316,138) 66,263 79,688 100,000

Other financing sources (uses) Transfers in - - - - Transfers out - (590) (509,491) (100,000) Total other financing sources (uses) - (590) (509,491) (100,000)

Net change in fund balances (1,316,138) 65,673 (429,803) -

Fund balances (deficits) - beginning 9,599,137 (26,355) 1,148,534 277

Fund balances (deficits) - ending 8,282,999$ 39,318$ 718,731$ 277$

CITY OF WEST PALM BEACH, FLORIDACOMBINING STATEMENT OF REVENUES, EXPENDITURES AND CHANGES IN FUND BALANCES



108

Neighborhood Stabilization

Program Fund

CDBG Revolving

Loan Fund

HOME Program

FundHOPWA

Fund

SHIP Program

Fund

Housing Trust Fund

-$ -$ -$ -$ -$ -$ 41,459 - - 3,227,936 339,122 -

- - 49,160 - - -- 23 9,270 1 82 1,163

114,098 - 198,046 - 225,525 -155,557 23 256,476 3,227,937 564,729 1,163

- - - - - -304,620 - 1,134,657 3,228,531 422,691 -

- - - - - -8,799 - (1) - - -

313,419 - 1,134,656 3,228,531 422,691 -

(157,862) 23 (878,180) (594) 142,038 1,163

- 100,000 586,786 - - 515,615- - - - - -- 100,000 586,786 - - 515,615

(157,862) 100,023 (291,394) (594) 142,038 516,778

4,220,735 - 1,348,165 593 240,958 -

4,062,873$ 100,023$ 1,056,771$ (1)$ 382,996$ 516,778$

(Continued)

109

Financial Assistance

FundPermits

Fund

Fire Assessment Fee Fund

Red Light

Camera Fund

Revenues Licenses and permits -$ 9,624,941$ -$ -$ Intergovernmental - - - - Charges for services - 28,639 1,083,472 - Fines and forfeitures - - - 27,667 Rents and royalties - - - - Interest 354 78,592 26,485 171 Miscellaneous - 24,152 - - Total revenues 354 9,756,324 1,109,957 27,838

Expenditures Current Public safety - 5,945,150 40,726 12,533 Public works - - - - Economic environment 812 - - - Leisure services - - - - Capital outlay - - 433,870 - Debt service Interest charges - - 129,151 - Total expenditures 812 5,945,150 603,747 12,533


over (under) expenditures (458) 3,811,174 506,210 15,305

Other financing sources (uses) Transfers in - - - - Transfers out (6,124) (693,100) (382,473) - Total other financing sources (uses) (6,124) (693,100) (382,473) -

Net change in fund balances (6,582) 3,118,074 123,737 15,305

Fund balances - beginning (8,248) 7,936,072 1,915,677 35,294

Fund balances - ending (14,830)$ 11,054,146$ 2,039,414$ 50,599$




(Continued)

110

Waterfront District Fund

Special Revenue Grant Program Fund

Cemetery Sinking

FundMiscellaneous

Trust Fund

Total Special

Revenue Funds

-$ -$ -$ -$ 9,624,941$ - 3,555,735 - 192,958 11,049,649

725,096 - 41,145 - 2,161,061- - - - 27,667

420,788 - - - 420,7888,033 - 8,843 1 215,898

208,327 37,067 - - 930,6391,362,244 3,592,802 49,988 192,959 24,430,643

- 2,529,625 - 219,155 8,747,189- - 2,341 - 468,155- - - - 6,126,863

2,660,279 456,242 - - 3,253,062128,584 1,075,365 12,483 117,563 5,341,235

- - - - 129,1512,788,863 4,061,232 14,824 336,718 24,065,655

(1,426,619) (468,430) 35,164 (143,759) 364,988

1,810,033 309,403 - - 3,321,837(6,103) - - - (1,697,881)

1,803,930 309,403 - - 1,623,956

377,311 (159,027) 35,164 (143,759) 1,988,944

485,766 610,060 1,176,933 751,964 29,435,561

863,077$ 451,033$ 1,212,097$ 608,205$ 31,424,505$

111

Special Obligation

Bond Series 2006 Fund

2005 General

Obligation Bond Fund

NPCCRA Debt Service Reserve Fund

Total Non -Major Debt

Service FundsRevenues:

Taxes -$ 1,590,487$ -$ 1,590,487$

Interest income 6,920 13,836 12,982 33,738

Total revenues 6,920 1,604,323 12,982 1,624,225

Expenditures:

Current:

Debt service:

Principal retirement 1,135,000 1,275,000 - 2,410,000

Interest charges 977,999 274,275 - 1,252,274

Issuance cost and other 1,050 - - 1,050

Total expenditures 2,114,049 1,549,275 - 3,663,324


over (under) expenditures (2,107,129) 55,048 12,982 (2,039,099)


Transfers in 2,359,498 - - 2,359,498

Transfers out (1,132,216) - - (1,132,216) Total other financing sources (uses) 1,227,282 - - 1,227,282

Net change in fund balances (879,847) 55,048 12,982 (811,817)

Fund balances (deficits) - beginning 1,150,064 104,804 1,666,646 2,921,514

Fund balances (deficits) - ending 270,217$ 159,852$ 1,679,628$ 2,109,697$


NON-MAJOR DEBT SERVICE FUNDS


112

Other Capital Projects

Fund

Art in Public Places Fund

City Commons

and Waterfront

Fund

NPCCRA Series 2005A Construction

Fund

Revenues Intergovernmental -$ -$ -$ -$ Charges for services - 32,685 - - Interest 26,650 2,506 2,844 3,233

Total revenues 26,650 35,191 2,844 3,233

Expenditures Current Public works - - - - Economic environment 244,989 5,000 - 412,483 Leisure services - 125,842 - 3,512 Capital outlay 838,254 247,450 - 108,929 Debt service Issuance costs and other 1,500 - - - Total expenditures 1,084,743 378,292 - 524,924

Excess (deficiency) of revenues over (under) expenditures (1,058,093) (343,101) 2,844 (521,691)

Other financing sources (uses) Transfers in 1,125,680 - - - Transfers out - (590) - -

Total other financing sources (uses) 1,125,680 (590) - -

Net change in fund balances 67,587 (343,691) 2,844 (521,691)

Fund balances (deficits) - beginning 3,316,477 472,338 320,960 1,738,031

Fund balances (deficits) - ending 3,384,064$ 128,647$ 323,804$ 1,216,340$


NON-MAJOR CAPITAL PROJECT FUNDS


113

NPCCRA Series 2005B Construction

Fund

Capital Grants Fund

Land Acquisition

Fund

Total Non- Major Capital

ProjectsFunds

-$ 1,172,113$ -$ 1,172,113$ - - - 32,685

502 - 560 36,295

502 1,172,113 560 1,241,093

52,006 - - 52,006- - 24,499 686,971- - - 129,354- 1,172,113 - 2,366,746

-- - - 1,500

52,006 1,172,113 24,499 3,236,577

(51,504) - (23,939) (1,995,484)

- - - 1,125,680- - - (590)

- - - 1,125,090

(51,504) - (23,939) (870,394)

86,057 (1) 2,950,929 8,884,791

34,553$ (1)$ 2,926,990$ 8,014,397$

114


Variance with

Final Budget -

Positive

(Negative)

Revenues:

Intergovernmental 2,338,276$ 2,338,276$ 2,388,397$ 50,121$

Charges for services - - 233,549 233,549

Interest - - 71,853 71,853

Miscellaneous - - - -

Total revenues 2,338,276 2,338,276 2,693,799 355,523

Expenditures:

Current:

Engineering and Public works 784,258 675,863 465,814 210,049

Capital outlay 8,992,462 9,100,857 3,544,123 5,556,734



over (under) expenditures (7,438,444) (7,438,444) (1,316,138) 6,122,306

Net change in fund balances (7,438,444)$ (7,438,444)$ (1,316,138) 6,122,306$

Fund balances - beginning 9,599,137

Fund balances - ending 8,282,999$

Budgeted Amounts

CITY OF WEST PALM BEACH, FLORIDALOCAL GAS TAX FUND

SCHEDULE OF REVENUE, EXPENDITURES AND CHANGES IN FUND BALANCES -

BUDGET AND ACTUAL

For the Fiscal Year Ended September 30, 2016

115


Variance with

Final Budget -

Positive

(Negative)

Revenues:

Intergovernmental 176,123$ 176,123$ 202,478$ 26,355$

Interest - - 326 326

Total revenues 176,123 176,123 202,804 26,681

Expenditures:

Current:

Leisure services 175,533 175,533 136,541 38,992

Total expenditures 175,533 175,533 136,541 38,992


over (under) expenditures 590 590 66,263 65,673

Transfer out (590) (590) (590) -

Total other financing

sources (uses) (590) (590) (590) -

Net change in fund balances -$ -$ 65,673 65,673$

Fund balances - beginning (26,355)

Fund balances - ending 39,318$

Budgeted Amounts

CITY OF WEST PALM BEACH, FLORIDAMANDEL LIBRARY FUND


BUDGET AND ACTUAL


116


Variance with

Final Budget -

Positive

(Negative)

Revenues:

Intergovernmental -$ -$ 68,141$ 68,141$

Interest - - 9,500 9,500

Miscellaneous - 67,559 2,047 (65,512)

Total revenues - 67,559 79,688 12,129

Expenditures:

Current:

Total expenditures - - - -


over (under) expenditures - 67,559 79,688 12,129


Transfer out - (509,491) (509,491) -


sources (uses) - (509,491) (509,491) -

Net change in fund balances -$ (441,932)$ (429,803) 12,129$



Budgeted Amounts

CITY OF WEST PALM BEACH, FLORIDAIMPACT FEES WESTERN EXPANSION


BUDGET AND ACTUAL


117


Variance

with Final

Budget -

Positive

(Negative)

Revenues:

Intergovernmental 1,879,449$ 1,879,449$ 1,033,423$ (846,026)$

Interest - - 1,201 1,201

Miscellaneous - 106,968 121,377 14,409

Total revenues 1,879,449 1,986,417 1,156,001 (830,416)

Expenditures:

Current:


Capital outlay 170,765 54,455 20,449 34,006



over (under) expenditures 100,000 185,575 100,000 (85,575)


Transfer out (100,000) (100,000) (100,000) -


sources (uses) (100,000) (100,000) (100,000) -

Net change in fund balances -$ 85,575$ - (85,575)$

Fund balances - beginning 277

Fund balances - ending 277$

Budgeted Amounts

CITY OF WEST PALM BEACH, FLORIDACOMMUNITY DEVELOPMENT FUND


BUDGET AND ACTUAL


118


Variance with

Final Budget -

Positive

(Negative)

Revenues:

Intergovernmental 367,430$ 367,430$ 41,459$ (325,971)$

Miscellaneous 829,786 829,786 114,098 (715,688)

Total revenues 1,197,216 1,197,216 155,557 (1,041,659)

Expenditures:

Current:

Economic environment 865,108 732,976 304,620 428,356

Capital outlay 332,108 464,240 8,799 455,441

Total expenditures 1,197,216 1,197,216 313,419 883,797


over (under) expenditures - - (157,862) (157,862)

Net change in fund balances -$ -$ (157,862) (157,862)$



Budgeted Amounts

CITY OF WEST PALM BEACH, FLORIDANEIGHBORHOOD STABILIZATION PROGRAM


BUDGET AND ACTUAL


119


Variance

with Final

Budget -

Positive

(Negative)

Revenues:

Interest -$ -$ 23$ 23$

Total revenues - - 23 23

Expenditures:

Current:

Economic environment 100,000 100,000 - 100,000

Total expenditures 100,000 100,000 - 100,000


over (under) expenditures (100,000) (100,000) 23 100,023

Transfers in 100,000 100,000 100,000 -


sources (uses) 100,000 100,000 100,000 -


Fund balances - beginning -


Budgeted Amounts

CITY OF WEST PALM BEACH, FLORIDACDBG REVOLVING FUND


BUDGET AND ACTUAL


120


Variance with

Final Budget -

Positive

(Negative)

Revenues:

Intergovernmental 1,524,509$ 1,524,509$ -$ (1,524,509)$

Charges for services 400,000 400,000 49,160 (350,840)

Interest - - 9,270 9,270

Miscellaneous - 13,137 198,046 184,909

Total revenues 1,924,509 1,937,646 256,476 (1,681,170)

Expenditures:

Current:

Economic environment 2,789,703 2,789,703 1,134,657 1,655,046

Capital outlay 14,985 14,985 (1) 14,986



over (under) expenditures (880,179) (867,042) (878,180) (11,138)

Transfers in 586,786 586,786 586,786 -


source (uses) 586,786 586,786 586,786 -

Net change in fund balances (293,393)$ (280,256)$ (291,394) (11,138)$



Budgeted Amounts

CITY OF WEST PALM BEACH, FLORIDAHOME PROGRAM


BUDGET AND ACTUAL


121


Variance with

Final Budget -

Positive

(Negative)

Revenues:

Intergovernmental 3,693,888$ 3,693,888$ 3,227,936$ (465,952)$

Interest - - 1 1

Total revenues 3,693,888 3,693,888 3,227,937 (465,951)

Expenditures:

Current:




over (under) expenditures - - (594) (594)

Net change in fund balances -$ -$ (594) (594)$

Fund balances - beginning 593

Fund balances - ending (1)$

Budgeted Amounts

CITY OF WEST PALM BEACH, FLORIDAHOPWA FUND


BUDGET AND ACTUAL


122


Variance with

Final Budget -

Positive

(Negative)

Revenues:

Intergovernmental 1,287,527$ 1,969,487$ 339,122$ (1,630,365)$

Interest - - 82 82

Miscellaneous - - 225,525 225,525

Total revenues 1,287,527 1,969,487 564,729 (1,404,758)

Expenditures:

Current:

Economic environment 1,528,483 2,210,443 422,691 1,787,752

Total expenditures 1,528,483 2,210,443 422,691 1,787,752


over (under) expenditures (240,956) (240,956) 142,038 382,994

Net change in fund balances (240,956)$ (240,956)$ 142,038 382,994$

Fund balances - beginning 240,958


Budgeted Amounts

CITY OF WEST PALM BEACH, FLORIDASHIP PROGRAM


BUDGET AND ACTUAL


123


Variance with

Final Budget -

Positive

(Negative)

Revenues:

Interest -$ -$ 354$ 354$


Expenditures:

Current:

Economic environment 54,755 48,631 812 47,819

Total expenditures 54,755 48,631 812 47,819


over (under) expenditures (54,755) (48,631) (458) 48,173


Transfer out - (6,124) (6,124) -


source (uses) - (6,124) (6,124) -


Fund balances - beginning (8,248)

Fund balances - ending (14,830)$

Budgeted Amounts

CITY OF WEST PALM BEACH, FLORIDAFINANCIAL ASSISTANCE FUND


BUDGET AND ACTUAL


124


Variance with

Final Budget -

Positive

(Negative)

Revenues:

License and permits 6,203,400$ 6,580,196$ 9,624,941$ 3,044,745$

Charges for services 1,000 1,000 28,639 27,639

Interest 50,000 50,000 78,592 28,592

Miscellaneous 20,000 20,000 24,152 4,152

Total revenues 6,274,400 6,651,196 9,756,324 3,105,128

Expenditures:

Current:

Public safety 6,898,348 7,275,144 5,945,150 1,329,994



over (under) expenditures (623,948) (623,948) 3,811,174 4,435,122


Transfer out (693,100) (693,100) (693,100) -


sources (uses) (693,100) (693,100) (693,100) -

Net change in fund balances (1,317,048)$ (1,317,048)$ 3,118,074 4,435,122$



Budgeted Amounts

CITY OF WEST PALM BEACH, FLORIDAPERMITS


BUDGET AND ACTUAL


125


Variance with

Final Budget -

Positive

(Negative)

Revenues:

Charges for services 1,100,000$ 1,100,000$ 1,083,472$ (16,528)$

Interest - - 26,485 26,485

Total revenues 1,100,000 1,100,000 1,109,957 9,957

Expenditures:

Current:

Public safety 598,935 598,935 40,726 558,209

Capital outlay 10,647,152 10,647,152 433,870 10,213,282

Debt Service:

Interest charges 130,000 130,000 129,151 849



over (under) expenditures (10,276,087) (10,276,087) 506,210 10,782,297


Transfer out (382,473) (382,473) (382,473) -


source (uses) (382,473) (382,473) (382,473) -




Budgeted Amounts

CITY OF WEST PALM BEACH, FLORIDAFIRE ASSESSMENT FEE FUND


BUDGET AND ACTUAL


126


Variance with

Final Budget -

Positive

(Negative)

Revenues:

Fines and forfeitures 63,200$ 63,200$ 27,667$ (35,533)$

Interest - - 171 171

Total revenues 63,200 63,200 27,838 (35,362)

Expenditures:

Current:

Public safety 67,385 67,385 12,533 54,852







Budgeted Amounts

CITY OF WEST PALM BEACH, FLORIDARED LIGHT CAMERA FEE FUND


BUDGET AND ACTUAL


127


Variance with

Final Budget -

Positive

(Negative)

Revenues:

Charges for services 570,350$ 570,350$ 725,096$ 154,746$

Rents and royalties 425,000 425,000 420,788 (4,212)

Interest - - 8,033 8,033

Miscellaneous 200,000 200,000 208,327 8,327

Total revenues 1,195,350 1,195,350 1,362,244 166,894

Expenditures:

Current:

Leisure services 2,912,315 3,104,739 2,660,279 444,460

Capital outlay 104,587 296,236 128,584 167,652



over (under) expenditures (1,821,552) (2,205,625) (1,426,619) 779,006


Transfers in 1,660,033 1,810,033 1,810,033 -

Transfer out (6,103) (6,103) (6,103) -


source (uses) 1,653,930 1,803,930 1,803,930 -




-

Budgeted Amounts

CITY OF WEST PALM BEACH, FLORIDAWATERFRONT DISTRICT FUND


BUDGET AND ACTUAL


128


Variance with

Final Budget -

Positive

(Negative)

Revenues:

Intergovernmental 5,209,187$ 5,593,695$ 3,555,735$ (2,037,960)$

Miscellaneous 92,756 137,006 37,067 (99,939)

Total revenues 5,301,943 5,730,701 3,592,802 (2,137,899)

Expenditures:

Current:

Public safety 4,856,383 5,236,446 2,529,625 2,706,821


Capital outlay 1,329,882 1,329,882 1,075,365 254,517



over (under) expenditures (1,535,820) (1,554,530) (468,430) 1,086,100


Transfers in 1,056,709 1,075,419 309,403 (766,016)


sources (uses) 1,056,709 1,075,419 309,403 (766,016)




Budgeted Amounts

CITY OF WEST PALM BEACH, FLORIDAGRANT PROJECTS FUND


BUDGET AND ACTUAL


129


Variance

with Final

Budget -

Positive

(Negative)

Revenues:

Charges for services -$ -$ 41,145$ 41,145$

Interest - - 8,843 8,843


Expenditures:

Current:

Engineering and Public works - - 2,341 (2,341)

Capital outlay 300,000 300,000 12,483 287,517







Budgeted Amounts

CITY OF WEST PALM BEACH, FLORIDACEMETERY FUND


BUDGET AND ACTUAL


130


Variance with

Final Budget -

Positive

(Negative)

Revenues:

Intergovernmental 379,788$ 626,288$ 192,958$ (433,330)$

Interest - - 1 1

Miscellaneous 500 500 - (500)

Total revenues 380,288 626,788 192,959 (433,829)

Expenditures:

Current:

Public safety 201,885 451,607 219,155 232,452

Capital outlay 178,403 175,181 117,563 57,618



over (under) expenditures - - (143,759) (143,759)




Budgeted Amounts

CITY OF WEST PALM BEACH, FLORIDAMISCELLANEOUS TRUST FUND


BUDGET AND ACTUAL


131


Variance with Final Budget - Positive

(Negative)

Revenues:

Interest -$ -$ 6,920$ 6,920$


Expenditures:

Debt Service:

Principal retirement 1,190,000 1,190,000 1,135,000 55,000

Interest charges 1,955,998 1,169,499 977,999 191,500

Issuance costs and other - - 1,050 (1,050)



over (under) expenditures (3,145,998) (2,359,499) (2,107,129) 252,370


Transfers in 3,145,998 2,359,499 2,359,498 (1)

Transfer out - - (1,132,216) (1,132,216)


sources (uses) 3,145,998 2,359,499 1,227,282 (1,132,217)




Budgeted Amounts

CITY OF WEST PALM BEACH, FLORIDASPECIAL OBLIGATION BOND SERIES 2006 DS FUND


BUDGET AND ACTUAL


132


Variance

with Final

Budget -

Positive

(Negative)

Revenues:

Taxes 1,549,660$ 1,549,660$ 1,590,487$ 40,827$

Interest - - 13,836 13,836

Total revenues 1,549,660 1,549,660 1,604,323 54,663

Expenditures:

Debt Service:

Principal retirement 1,275,000 1,275,000 1,275,000 -

Interest charges 274,660 274,660 274,275 385

Total expenditures 1,549,660 1,549,660 1,549,275 385


over (under) expenditures - - 55,048 55,048




Budgeted Amounts

CITY OF WEST PALM BEACH, FLORIDA2005 GENERAL OBLIGATION BOND


BUDGET AND ACTUAL


133


Variance

with Final

Budget -

Positive

(Negative)

Revenues:

Interest -$ -$ 26,650$ 26,650$


Expenditures:

Current:

Economic environment - - 47,214 (47,214)

Engineering and Public works - - 197,775

Debt Service:

Issuance costs and other - - 1,500 (1,500)

Capital outlay 3,727,948 4,153,628 838,254 3,117,599



over (under) expenditures (3,727,948) (4,153,628) (1,058,093) 3,095,535


Transfers in 750,000 1,125,680 1,125,680 -


sources (uses) 750,000 1,125,680 1,125,680 -




Budgeted Amounts

CITY OF WEST PALM BEACH, FLORIDAOTHER CAPITAL PROJECTS FUNDS


BUDGET AND ACTUAL


134



(Negative)

Revenues

Charges for services 630,983$ 642,483$ 32,685$ (609,798)$

Interest - - 2,506 2,506

Total revenues 630,983 642,483 35,191 (607,292)

Expenditures

Current

Economic environment - 10,000 5,000 5,000


Capital outlay 51,250 281,200 247,450 33,750



over (under) expenditures 397,013 78,013 (343,101) (421,114)

Other financing sources (uses)

Transfer out (590) (590) (590) -


sources (uses) (590) (590) (590) -

Net change in fund balances 396,423$ 77,423$ (343,691) (421,114)$



Budgeted Amounts

CITY OF WEST PALM BEACH, FLORIDAART IN PUBLIC PLACES


BUDGET AND ACTUAL


135



(Negative)

Revenues

Interest -$ -$ 2,844$ 2,844$


Expenditures

Current

Engineering and public works 24,013 24,013 - 24,013

Capital outlay 213,340 213,340 - 213,340

Total expenditures 237,353 237,353 - 237,353






Budgeted Amounts

CITY OF WEST PALM BEACH, FLORIDACITY COMMONS AND WATERFRONT FUND


BUDGET AND ACTUAL


136



(Negative)

Revenues:

Interest -$ -$ 3,233$ 3,233$


Expenditures:

Current:


Leisure services - - 3,512 -

Capital outlay 1,215,838 1,010,838 108,929 901,909



over (under) expenditures (1,375,352) (1,674,352) (521,691) 1,156,173

Net change in fund balances (1,375,352)$ (1,674,352)$ (521,691) 1,156,173$



Budgeted Amounts

CITY OF WEST PALM BEACH, FLORIDANPCCRA SERIES 2005A CONSTRUCTION FUND


BUDGET AND ACTUAL


137


Variance

with Final

Budget -

Positive

(Negative)

Revenues:

Interest -$ -$ 502$ 502$


Expenditures:

Current:

Engineering and public works 52,006 52,006 52,006 -

Economic environment 33,949 33,949 - 33,949



over (under) expenditures (85,955) (85,955) (51,504) 34,451




Budgeted Amounts

CITY OF WEST PALM BEACH, FLORIDANPCCRA SERIES 2005B CONSTRUCTION FUND


BUDGET AND ACTUAL


138


Variance with Final Budget -

Positive (Negative)

Revenues:

Intergovernmental 3,527,735$ 3,680,380$ 1,172,113$ (2,508,267)$

Total revenues 3,527,735 3,680,380 1,172,113 (2,508,267)

Expenditures:

Capital outlay 3,527,735 3,680,380 1,172,113 2,508,267



Over (under) expenditures - - - -

Net change in fund balances -$ -$ - -$

Fund balances - beginning -

Fund balances - ending -$

Budgeted Amounts

CITY OF WEST PALM BEACH, FLORIDACAPITAL GRANTS FUND


BUDGET AND ACTUAL


139


Variance with

Final Budget -

Positive

(Negative)

Revenues:

Interest -$ -$ 560$ 560$


Expenditures:


Capital outlay 8,428 8,428 - 8,428



over (under) expenditures (94,357) (94,357) (23,939) 70,418




Budgeted Amounts

CITY OF WEST PALM BEACH, FLORIDALAND ACQUISITION FUND


BUDGET AND ACTUAL


140

NON-MAJOR ENTERPRISE FUNDS

Parking Fund - This fund is used to account for revenues and expenses related to providing both

covered garage and metered parking spaces in the City.

Golf Course Fund - This fund is used to account for revenues and expenses resulting from the

operations of the municipal golf course.

142

Parking Facilities

Fund

West Palm Beach Golf Course

Fund Totals

ASSETSCurrent assets:

Cash and cash equivalents 2,106,549$ 319,826$ 2,426,375$

Investments 3,011,967 120,023 3,131,990

Receivables (net): -

Accounts 54,017 - 54,017

Interest 12,134 570 12,704

Due from other governments 84,644 - 84,644

Inventories - 32,433 32,433

Prepaid items - 10,838 10,838Restricted assets: current

Cash and cash equivalents 10,182 - 10,182

Investments 14,272 - 14,272

Total current assets 5,293,765 483,690 5,777,455

Noncurrent assets:

Capital assets, net 7,568,492 2,283,229 9,851,721

Total noncurrent assets 7,568,492 2,283,229 9,851,721

Total assets 12,862,257$ 2,766,919$ 15,629,176$


Total deferred outflows of resources -$ -$ -$

CITY OF WEST PALM BEACH, FLORIDACOMBINING STATEMENT OF NET POSITION


September 30, 2016

Business-Type - Enterprise Funds

143

Parking Facilities

Fund


Fund Totals

CITY OF WEST PALM BEACH, FLORIDACOMBINING STATEMENT OF NET POSITION


September 30, 2016

Business-Type - Enterprise Funds

LIABILITIESCurrent liabilities:

Vouchers payable and accrued liabilities 219,810$ 86,099$ 305,909$

Salaries, wages and benefits payable 14,883 - 14,883

Due to other governments 12,634 3,693 16,327

Compensated absences payable 68,639 - 68,639

Capital lease obligations - current - 38,454 38,454

Current liabilities payable

from restricted assets:

Customer deposits 24,454 - 24,454

Due to other funds - 113,055 113,055

Total current liabilities 340,420 241,301 581,721


Compensated absences payable 60,072 - 60,072

Advance payable to General Fund - 850,740 850,740

Capital lease obligations - long term - 155,198 155,198

Unearned revenue 67,200 - 67,200

Total noncurrent liabilities 127,272 1,005,938 1,133,210

Total liabilities 467,692$ 1,247,239$ 1,714,931$

DEFERRED INFLOWS OF RESOURCES Total deferred inflows of resources - - -

NET POSITION

Net investment in capital assets 7,568,492$ 2,283,229$ 9,851,721$

Unrestricted 4,826,073 (763,549) 4,062,524

Total net position 12,394,565$ 1,519,680$ 13,914,245$

144

Parking Facilities

Fund


Fund Totals

Operating revenues:

Charges for services 5,658,104$ 1,520,422$ 7,178,526$

Fines 1,180,125 - 1,180,125

Miscellaneous and other 3,071 15,047 18,118

Total operating revenues 6,841,300 1,535,469 8,376,769

Operating expenses:

Personnel services 1,135,793 - 1,135,793

Contractual Services 1,701,070 858,003 2,559,073

Utilities 230,457 81,057 311,514

Repairs and maintenance 980,324 99,140 1,079,464

Other supplies and expenses 526,085 583,560 1,109,645

Depreciation 744,687 277,421 1,022,108

Insurance claims and expenses 354,133 9,819 363,952

Total operating expenses 5,672,549 1,909,000 7,581,549

Operating income (loss) 1,168,751 (373,531) 795,220

Non-operating revenues (expenses):

Interest revenue 34,817 2,519 37,336

Interest expenses - (52,851) (52,851)

Total non-operating revenues (expenses) 34,817 (50,332) (15,515)

Income (loss) before contributions and transfers 1,203,568 (423,863) 779,705

Capital contributions - grants 215,662 - 215,662

Transfers in 270,000 - 270,000

Transfers out (411,499) (35,000) (446,499)

Change in net position 1,277,731 (458,863) 818,868

Net position -beginning 11,116,834 1,978,543 13,095,377

Net position - ending 12,394,565$ 1,519,680$ 13,914,245$

Business-Type Activities - Enterprise Funds

CITY OF WEST PALM BEACH, FLORIDACOMBINING STATEMENT OF REVENUES, EXPENSES,

AND CHANGES IN FUND NET POSITION


For the fiscal year ended September 30, 2016

145

Parking West Palm BeachFacilities Golf Course

Fund Fund Totals

Cash Flows From Operating Activities: Cash received from customers 5,627,493$ 1,522,382$ 7,149,875$ Cash payments to suppliers/contractors (3,771,734) (1,430,960) (5,202,694) Cash payments to employees (1,078,455) - (1,078,455) Other operating receipts 1,183,196 15,047 1,198,243 Net cash provided (used) by operating activities 1,960,500 106,469 2,066,969

Cash Flows From Noncapital Financing Activities: Transfers in 270,000 - 270,000 Transfers out (411,499) (35,000) (446,499) Net cash provided (used) by noncapital financing activities (141,499) (35,000) (176,499)

Cash Flows From Capital and Related Financing Activities: Acquisition and construction of capital assets (614,172) (58,404) (672,576) Principal payments - (109,466) (109,466) Interest payments - (52,851) (52,851) Grants 215,662 - 215,662 Net cash provided (used) by capital and related financing activities (398,510) (220,721) (619,231)

Cash Flows From Investing Activities: Purchase of investments (3,026,239) (120,023) (3,146,262) Interest on investments 31,183 2,163 33,346 Net cash provided (used) by investing activities (2,995,056) (117,860) (3,112,916)

Net increase (decrease) in cash and cash equivalents (1,574,565) (267,112) (1,841,677)

Cash, cash equivalents beginning of year 3,691,296 586,938 4,278,234

Cash, cash equivalents end of year 2,116,731$ 319,826$ 2,436,557$

Displayed as: Cash and cash equivalents 2,106,549 319,826 2,426,375 Restricted cash and cash equivalents 10,182 - 10,182 Total cash 2,116,731 319,826 2,436,557

CITY OF WEST PALM BEACH, FLORIDACOMBINING STATEMENT OF CASH FLOWS




146

Parking West Palm BeachFacilities Golf Course

Fund Fund Totals

RECONCILIATION OF OPERATING INCOME (LOSS) TO NET CASH PROVIDED (USED) BY OPERATING ACTIVITIES:

Operating income (loss) 1,168,751$ (373,531)$ 795,220$

Adjustments to reconcile operating income (loss) to net cash provided (used) by operating activities:

Depreciation 744,687 277,421 1,022,108


(Increase) decrease in accounts receivable (54,017) 1,960 (52,057) (Increase) decrease in due from other governments (43,794) - (43,794) (Increase) decrease in net pension asset 82,573 - 82,573 (Increase) decrease in inventory - (315) (315) (Increase) decrease in deferred outflow - pension 9,540 - 9,540 Increase (decrease) in vouchers payable and accrued liabilities 23,017 7,392 30,409 Increase (decrease) in wages payable 3,081 - 3,081 Increase (decrease) in due to other governments (2,682) (110) (2,792) Increase (decrease) in compensated absences payable (10,126) - (10,126) Increase (decrease) in unearned revenue 67,200 67,200 Increase (decrease) in deferred inflow pension (27,730) - (27,730) Increase (decrease) in lease payable - 193,652 193,652 Total adjustments 791,749 480,000 1,271,749

Net cash provided (used) by operating activities 1,960,500$ 106,469$ 2,066,969$

CITY OF WEST PALM BEACH, FLORIDACOMBINING STATEMENT OF CASH FLOWS




(Continued)

147

INTERNAL SERVICE FUNDS

MIS Processing Fund - This fund is used to account for expenses related to providing data

processing and telecommunication services to the other departments of the City.

Fleet Management Fund - This fund is used to account for fuel, oil, lubricants, repairs and

maintenance of City vehicles and the use of vehicles by City employees.

Self Insurance Fund - This fund is used to account for expenses related to providing and

administering the self-insured general liability, automobile liability, workers' compensation and

property insurance coverage for the City.

Employee Health/Life Insurance Fund - This fund is used to account for resources provided

from the employees’ and employer’s share of group life and health insurance deductions and the

related claims and premiums.

Fleet Replacement Fund - This fund is used to account for capital replacement of all City owned

vehicles.

Technology Replacement Fund - This fund is used to account for capital replacement of

equipment used in providing data processing and telecommunications services provided within

the City.

Property Management Fund - This fund is used to account for maintenance of city owned

buildings.

149

MIS Processing Fund

Fleet Management Fund

Self Insurance

Fund

ASSETS Current assets:

Cash and cash equivalents 1,005,963$ 405,321$ 4,273,855$ Investments 6,045,134 575,611 5,906,899

Interest receivable 17,998 1,476 25,184

Accounts receivable (net) 190 4,517 6,297

Due from other governments - - 948,194

Inventory - 91,093 -

Prepaid items - - 980,280 Restricted assets: Cash and cash equivalents 1,345,159 - - Investments 1,905,608 - - Interest on restricted cash and investments 8,297 - -

Total current assets 10,328,349 1,078,018 12,140,709

Noncurrent assets:

Restated employees pension 122,778 - -

Capital assets, net 7,010,511 622,214 96,281

Investment in joint venture 788,826 - -

Total noncurrent assets 7,922,115 622,214 96,281

Total assets 18,250,464 1,700,232 12,236,990


Deferred outflows of pension 71,522 - -

LIABILITIES Current liabilities:

Vouchers payable and accrued liabilities 543,731 1,046,921 39,920

Salaries, wages and benefits payable 57,219 20,066 7,834

Due to other funds - - -

Compensated absences payable 211,917 93,047 7,707

Capital lease - current - - -

Notes payable - current 1,048,593 - -

Insurance claims payable - - 3,804,858

Accrued interest payable - - -

Trust deposit - - -

Total current liabilities 1,861,460 1,160,034 3,860,319


Compensated absences payable 154,708 71,874 4,110

Insurance claims payable, long term - - 9,165,143

Capital lease - long term - - -

Notes payable - long term 7,670,605 - -

Total noncurrent liabilities 7,825,313 71,874 9,169,253

Total liabilities 9,686,773 1,231,908 13,029,572

DEFERRED INFLOWS OF RESOURCES Deferred inflows of pension 46,511 - -

NET POSITION

Net investment in capital assets 1,523,720 622,214 96,281Restricted for:

Restated employees pension 122,778 - -

Unrestricted 6,942,204 (153,890) (888,863)

Total net position 8,588,702$ 468,324$ (792,582)$

(Continued)

CITY OF WEST PALM BEACH, FLORIDAINTERNAL SERVICE FUNDS

COMBINING STATEMENT OF NET POSITION

September 30, 2016

150

Employee Health/Life Ins.

FundFleet Replacement

Fund

Technology Replacement

FundProperty

Management Fund Totals

741,426$ 577,837$ 1,510,202$ 518,366$ 9,032,970$ - 820,607 2,144,692 736,151 16,229,094

- 4,202 3,662 3,250 55,772

4,568,585 1,183,803 - - 5,763,392

- - - - 948,194

- - - - 91,093

- - - - 980,280

- - 5,324,702 - 6,669,861- - - - 1,905,608- - 5,336 - 13,633

5,310,011 2,586,449 8,988,594 1,257,767 41,689,897

- - - - 122,778

174,894 8,280,432 1,629,502 182,534 17,996,368

- - - - 788,826

174,894 8,280,432 1,629,502 182,534 18,907,972

5,484,905 10,866,881 10,618,096 1,440,301 60,597,869

- - - - 71,522

831,910 53,310 5,205 143,728$ 2,664,725$

- - - - 85,119

3,189,521 - - - 3,189,521

- - - - 312,671

- 491,574 990,646 - 1,482,220

- 225,176 - - 1,273,769

680,308 - - - 4,485,166

- 11,562 - - 11,562

108,810 - - - 108,810

4,810,549 781,622 995,851 143,728 13,613,563

- - - - 230,692

- - - - 9,165,143

- 2,130,101 3,125,125 - 5,255,226

- 1,661,512 - - 9,332,117

- 3,791,613 3,125,125 - 23,983,178

4,810,549 4,573,235 4,120,976 143,728 37,596,741

- - - - 46,511

174,894 3,723,759 2,833,228 182,534 9,156,630

- - - - 122,778

499,462 2,569,887 3,663,892 1,114,039 13,746,731

674,356$ 6,293,646$ 6,497,120$ 1,296,573$ 23,026,139$

151

MIS Processing

Fund

Fleet Management

Fund

Self Insurance

Fund

Operating revenues:

Charges for services 12,392,683$ 7,207,815$ 8,255,168$

Court fines 67,945 - -

Miscellaneous and other 31,671 139,768 -

Total operating revenues 12,492,299 7,347,583 8,255,168

Operating expenses:

Personnel services 4,763,631 1,463,325 240,265

Contractual services 3,882,312 513,389 734,141

Utilities 491,896 48,845 -

Repairs and maintenance 132,941 3,015,044 -

Other supplies and expenses 221,566 1,663,131 253,772

Depreciation 138,519 104,522 3,883

Insurance claims and expenses 13,287 82,340 6,907,503

Loss on joint venture 369,842 - -

Total operating expenses 10,013,994 6,890,596 8,139,564

Operating Income (Loss) 2,478,305 456,987 115,604

Non-operating Revenues (Expenses):

Interest revenue 91,094 967 78,687

Interest expenses (185,377) - -

Gain (loss) on disposal of assets 23,212 9,530 -

Total non-operating revenues (expenses) (71,071) 10,497 78,687

Net income (loss) before contributions and transfers 2,407,234 467,484 194,291

Contributed capital - - -

Transfers in - - -

Transfers out (29,188) (36,204) (2,948)

Changes in net position 2,378,046 431,280 191,343

Net position - beginning 6,210,656 37,044 (983,925)

Net position - ending 8,588,702$ 468,324$ (792,582)$

(Continued)


COMBINING STATEMENT OF REVENUE, EXPENSES AND CHANGES IN FUND NET POSITION


152

Employee Health/Life Ins.

Fund

Fleet Replacement

Fund


Fund

Property Management

Fund Total

22,301,613$ 599,701$ -$ -$ 50,756,980$

- - - - 67,945

- - - 92,639 264,078

22,301,613 599,701 - 92,639 51,089,003

869,015 - - - 7,336,236

1,085,471 - - 4,831 6,220,144

4,256 - - 2,065 547,062

810 - - 32,799 3,181,594

462,105 54,531 242,445 78,264 2,975,814

4,825 2,033,556 700,623 109 2,986,037

20,827,769 - - - 27,830,899

- - - - 369,842

23,254,251 2,088,087 943,068 118,068 51,447,628

(952,638) (1,488,386) (943,068) (25,429) (358,625)

(27,245) 12,880 29,487 8,695 194,565

- (93,853) (33,072) - (312,302)

- 274,200 (1,198) 555,600 861,344

(27,245) 193,227 (4,783) 564,295 743,607

(979,883) (1,295,159) (947,851) 538,866 384,982

- - 297,082 - 297,082

3,619,015 1,505,473 1,500,334 - 6,624,822

- - - - (68,340)

2,639,132 210,314 849,565 538,866 7,238,546

(1,964,776) 6,083,332 5,647,555 757,707 15,787,593

674,356$ 6,293,646$ 6,497,120$ 1,296,573$ 23,026,139$

153

MIS Processing

Fund

Fleet Management

Fund

Self Insurance

Fund

Cash Flows From Operating Activities:

Cash received from customers 12,392,683$ 7,206,989$ 8,255,168$

Cash payments to suppliers/contractors (5,234,721) (5,029,962) (1,178,748)

Cash payments to employees (4,846,950) (1,464,020) (234,500)

Other operating receipts 99,616 139,768 -

Cash payments for insurance - - (6,237,186)

Net provided by (used for) operating activities 2,410,628 852,775 604,734

Cash Flows From Noncapital Financing Activities: Transfers in - - -

Transfers out (29,188) (36,204) (2,948)

Repayment of short term advance from General Fund - - -

Net cash provided by (used for) noncapital

financing activities (29,188) (36,204) (2,948)

Cash Flows From Capital and Related Financing Activities: Acquisition and construction of capital assets (2,682,338) (37,428) - Proceeds from new debt - - -

Sale of assets 23,212 9,530 -

Capital contribution - - -

Principal paid on notes and leases (1,027,266) - -

Interest and fees paid on notes and leases (192,861) - -

Net cash provided by (used for) capital and related

financing activities (3,879,253) (27,898) -

Cash Flows From Investing Activities: Purchase of investments (7,950,742) (575,611) (5,906,899)

Interest on investments 93,085 (178) 76,024

Net cash provided by (used for) investing activities (7,857,657) (575,789) (5,830,875)

Net increase (decrease) in cash and cash equivalents (9,355,470) 212,884 (5,229,089)

Cash and cash equivalents, beginning of year 11,706,592 192,437 9,502,944

Cash and cash equivalents, end of year 2,351,122$ 405,321$ 4,273,855$

Displayed as: Cash and cash equivalents 1,005,963 405,321 4,273,855 Restricted cash and cash equivalents 1,345,159 - -

Total cash 2,351,122 405,321 4,273,855


COMBINING STATEMENT OF CASH FLOWS


154

Employee Health/Life Insurance

Fund

Fleet Replacement

Fund


Fund

PropertyManagement

FundTotals

19,498,346$ 599,701$ - $ - $ 47,952,887$

(1,515,856) (278,477) (584,456) - (13,822,220)

(869,015) - - - (7,414,485)

- - - 118,408 357,792 (20,147,461) - - - (26,384,647)

(3,033,986) 321,224 (584,456) 118,408 689,327

3,619,015 1,505,473 1,500,334 - 6,624,822

- - - - (68,340)

(303,008) - - - (303,008)

3,316,007 1,505,473 1,500,334 - 6,253,474

- (1,529,708) (245,129) (182,643) (4,677,246) - - 5,210,716 - 5,210,716

- 537,705 (1,198) 555,600 1,124,849

- - 297,082 - 297,082

- (724,277) (1,094,945) - (2,846,488) - (93,853) (33,072) - (319,786)

- (1,810,133) 4,133,454 372,957 (1,210,873)

- (820,607) (2,144,692) (736,151) (18,134,702) (27,245) 11,679 29,584 7,227 190,176

(27,245) (808,928) (2,115,108) (728,924) (17,944,526)

254,776 (792,364) 2,934,224 (237,559) (12,212,598)

486,650 1,370,201 3,900,680 755,925 27,915,429

741,426$ 577,837$ 6,834,904$ 518,366$ 15,702,831$

741,426 577,837 1,510,202 518,366 9,032,970 - - 5,324,702 - 6,669,861

741,426 577,837 6,834,904 518,366 15,702,831

155

MIS Processing

Fund

Fleet Management

Fund

Self Insurance

Fund

Employee Health/Life Insurance

Fund

RECONCILIATION OF OPERATING INCOME (LOSS) TO NET CASH

PROVIDED BY (USED FOR) OPERATING ACTIVITIES

Operating income (loss) 2,478,305$ 456,987$ 115,604$ (952,638)$

Adjustments to reconcile operating income (loss)

to net cash provided by (used for) operating activities:

Depreciation 138,519 104,522 3,883 4,824


(Increase) decrease in accounts receivable - (826) - (2,807,586)

(Increase) decrease in joint venture 369,841 - - -

(Increase) decrease in prepaid expenses - - (15,487) -

(Increase) decrease in net pension asset (122,778) 292,787 (175,349) 36,786 (Increase) decrease in deferred outflows - pension (71,522) - - - Increase (decrease) in accounts payable (492,718) - - -

Increase (decrease) in wages payable 27,814 4,890 3,783 -

Increase (decrease) in compensated absences payable 36,656 (5,585) 1,982 -

Increase (decrease) in trust deposits - - - 684,628

Increase (decrease) in insurance claims payable - - 670,318 -

Increase (decrease) in deferred inflows - pension 46,511 - - -

Total adjustments (67,677) 395,788 489,130 (2,081,348)

Net cash provided by (used for) operations 2,410,628$ 852,775$ 604,734$ (3,033,986)$

(Continued)


COMBINING STATEMENT OF CASH FLOWSFOR THE FISCAL YEAR ENDED September 30, 2016

156

Fleet Replacement

Fund


Fund

PropertyManagement

FundTotals

(1,488,386)$ (943,068)$ (25,429)$ (358,625)$

2,033,556 700,623 109 2,986,036

- - - (2,808,412)

- - - 369,841

- - - (15,487)

(223,946) (342,011) - (534,511) - - - (71,522)

- 143,728 (348,990)

- - - 36,487

- - - 33,053

- - - 684,628

- - - 670,318 - - - 46,511

1,809,610 358,612 143,837 1,047,952

321,224$ (584,456)$ 118,408$ 689,327$

157

FIDUCIARY FUNDS

Firefighters’ Pension Fund - This fund is used to account for assets held in a trustee capacity for

the retirement pensions for all firefighters and fire department officers.

Police Pension Fund - This fund is used to account for all assets held in a trustee capacity for the

retirement pensions for all non-civilian police department employees.

Restated Employees’ Retirement System Fund - This fund is used to account for assets held in a

Trustee capacity for the retirement pensions of certain employees previously covered by the

Employees’ Retirement System. This plan is closed to new members.

OPEB Fund – This fund is used to account for assets held in trust for post employment benefits

other than pensions.

159

Firefighters' Pension

Fund

Police Pension

Fund

RestatedEmployees'

PensionFund

OPEBFund Total

ASSETS Cash and cash equivalents 2,511,142$ 2,778$ 322,467$ 1,271,507$ 4,107,894$

Receivables: Drop loans 552,619 1,250,814 - - 1,803,433 Interest and dividends 125,073 300,835 45,556 8 471,472 Other 506,754 1,229,778 - - 1,736,532 Total receivables 1,184,446 2,781,427 45,556 8 4,011,437

Investments: Money market 1,609,514 7,656,000 442,167 - 9,707,681 U.S. government obligations 9,786,708 5,502,195 6,311,714 - 21,600,617 U.S. government agencies 3,495,347 43,357,506 - - 46,852,853 Corporate obligations 4,317,762 15,358,471 1,816,419 - 21,492,652 Equity securities - - 27,573,518 - 27,573,518 Domestic stocks 67,912,533 108,522,655 - - 176,435,188 Domestic equity investment funds 27,021,751 58,513,947 - 5,321,574 90,857,272 Domestic fixed income investment funds 13,957,721 12,457,371 - 2,090,879 28,505,971 Fixed income mutual fund - - 4,024,301 - 4,024,301 International equity investment funds 18,069,905 43,560,753 - - 61,630,658 International fixed income investment funds 17,998,092 - - 2,459,642 20,457,734 Real estate investment trust funds 21,752,889 29,455,981 2,778,013 460,156 54,447,039 Total investments 185,922,222 324,384,879 42,946,132 10,332,251 563,585,484

Prepaid expenses 6,983 1,121,830 1,018 - 1,129,831 Total assets 189,624,793 328,290,914 43,315,173 11,603,766 572,834,646

LIABILITIES Accounts payable and accrued expenses 881,709 1,087,204 43,260 - 2,012,173 Advanced city contribution - - 5,366,499 - 5,366,499 Total liabilities 881,709 1,087,204 5,409,759 - 7,378,672

NET POSITION Net position restricted for pensions 188,743,084$ 327,203,710$ 37,905,414$ 11,603,766$ 565,455,974$


FIDUCIARY FUNDS

COMBINING STATEMENT OF FIDUCIARY NET POSITION

September 30, 2016

160

Firefighters' Pension

Fund

Police Pension Fund

RestatedEmployees'

PensionFund

OPEB Fund Total

AdditionsContributions: Plan members 3,778,776$ 52,759,666$ 85,170$ - $ 56,623,612$ Insurance premium taxes collected by the State of Florida on behalf of the City of West Palm Beach 1,574,941 1,259,981 - - 2,834,922 City of West Palm Beach 6,090,133 9,726,454 - 1,736,036 17,552,623

Total contributions 11,443,850 63,746,101 85,170 1,736,036 77,011,157

Investment income: Net appreciation (depreciation) in fair value of investments 12,765,691 17,797,270 2,124,282 - 32,687,243 Interest and dividends 4,285,468 4,262,291 1,118,060 1,156,608 10,822,427 Class action revenue 48,464 28,605 - - 77,069 Rebates and other revenue 7,975 129,982 6,518 - 144,475

17,107,598 22,218,148 3,248,860 1,156,608 43,731,214 Less investment expenses 892,303 988,623 249,427 - 2,130,353

Net investment income 16,215,295 21,229,525 2,999,433 1,156,608 41,600,861

Total additions 27,659,145 84,975,626 3,084,603 2,892,644 118,612,018

Deductions Participant benefit payments 14,902,198 16,224,666 2,713,596 867,021 34,707,481 Refunds of participant contributions 19,093 93,453 - - 112,546 Administrative expenses 164,821 288,017 84,157 19,073 556,068

Total deductions 15,086,112 16,606,136 2,797,753 886,094 35,376,095

Net increase (decrease) in net position 12,573,033 68,369,490 286,850 2,006,550 83,235,923

Net position restricted for pensions Beginning of year 176,170,051 258,834,220 37,618,564 9,597,216 482,220,051

End of year 188,743,084$ 327,203,710$ 37,905,414$ 11,603,766$ 565,455,974$

FIDUCIARY FUNDS

COMBINING STATEMENT OF CHANGES IN FIDUCIARY NET POSITION



161

STATISTICAL INFORMATION (unaudited)

STATISTICAL INFORMATION

The Statistical Information section provides unaudited informational data regarding the City’seconomic condition and is organized in five specific objectives.

Financial Trends – Provides information to help understand and assess how the City’s financialposition has changed over a period of time.

Revenue Capacity – Provides information to help understand and assess the City’s ability to generateown-source revenue.

Debt Capacity – Provides information to help understand and assess the City’s debt burden and itsability to issue additional debt.

Demographic and Economic – Provides information to help understand and assess the City’ssocioeconomic environment and to facilitate comparisons of financial statement information.

Operating Information - Provides information to help understand and assess the City’s operationsand economic resources.

FINANCIAL TRENDS (unaudited)

2007 2008 2009 2010 2011 2012 2013 2014 2015 2016Governmental Activities:

Net investment in capital assets 180,488$ 187,319$ 198,047$ 207,495$ 197,684$ 188,937$ 183,764$ 178,930$ 169,012$ 175,216$

Restricted 24,119 23,008 22,630 21,336 24,352 24,899 32,204 29,614 37,402 45,558

Unrestricted 63,017 62,724 61,063 56,426 60,816 66,906 59,001 68,195 18,232- 20,065-

Total net position of governmental activities 267,624 273,051 281,740 285,257 282,852 280,742 274,969 276,739 188,181 200,709

Business-type Activities:

Net investment in capital assets 170,223 181,784 190,203 193,842 194,738 201,814 205,203 209,585 215,130 231,703

Restricted 25,665 24,044 30,780 38,758 46,908 50,272 56,841 59,584 91,887 106,348

Unrestricted 51,994 51,035 51,223 57,950 66,500 79,348 94,904 115,206 110,162 101,636 Total net position of

business-type activities 247,882 256,863 272,206 290,550 308,146 331,434 356,948 384,374 417,179 439,687

Primary Government:

Net investment in capital assets 350,711 369,103 388,250 401,338 392,422 390,752 388,967 388,515 384,142 406,919

Restricted 49,784 47,052 53,410 60,094 71,260 75,171 89,045 89,198 129,289 151,906

Unrestricted 115,011 113,759 112,286 114,376 127,316 146,253 153,905 183,401 91,929 81,571

Total net position of primary government 515,506$ 529,914$ 553,946$ 575,808$ 590,998$ 612,176$ 631,917$ 661,113$ 605,360$ 640,396$

(IN THOUSANDS)

CITY OF WEST PALM BEACH, FLORIDANET POSITION BY COMPONENT

LAST TEN FISCAL YEARS

(ACCRUAL BASIS OF ACCOUNTING)

(UNAUDITED)

September 30, 2016

S-1

2007 2008 2009 2010 2011 2012 2013 2014 2015 2016

EXPENSES (1)

Governmental Activities: General government, Community relations, Planning and zoning, Building permits, Federal housing, Code enforcement, Community and economic development 42,347$ 44,795$ 40,680$ 37,381$ 32,718$ 30,883$ 33,286$ 30,660$ 33,361$ 25,312$

Police 48,212 52,141 49,835 50,060 48,599 48,331 49,564 57,321 50,394 65,474

Fire 30,578 32,319 35,831 31,508 31,023 36,264 30,543 32,057 39,453 34,165

Engineering services and Public works 23,910 25,038 25,387 21,551 21,100 18,975 19,401 19,035 19,096 7,485

Economic Environment (Downtown and No 9,606 10,689 13,556 16,901 17,600 14,604 15,857 16,489 17,318 20,497

Health and sanitation 9,010 9,162 8,806 9,008 8,285 8,631 9,379 10,043 9,119 11,035

Leisure services (Library and Parks) 15,496 16,144 16,719 20,538 20,965 19,455 17,598 21,849 19,785 21,012

Interest on long-term debt 11,548 11,887 11,359 10,274 9,356 9,803 9,003 7,800 8,434 8,264

Total governmental activities 190,707 202,175 202,172 197,222 189,646 186,947 184,630 195,254 196,960 193,245


Water and sewer 48,363 53,104 55,132 58,702 67,102 61,212 63,491 63,841 65,082 76,763

Stormwater utility 4,977 5,303 5,644 6,433 6,962 6,994 7,352 6,841 8,042 10,981

Parking system 3,561 3,816 4,053 4,013 4,078 4,106 4,465 4,891 5,675 5,673

Golf Course 1,837 1,945 1,586 2,281 1,941 1,765 1,781 1,662 1,854 1,962

Total business-type activities 58,739 64,167 66,415 71,429 80,084 74,077 77,089 77,234 80,653 95,379

Total primary government 249,446 266,342 268,587 268,649 269,729 261,024 261,719 272,488 277,613 288,623

PROGRAM REVENUES (1)

Governmental activities:

Charges for services

General government and Building permits 12,932 9,860 9,704 9,270 10,225 12,156 12,778 15,938 11,507 13,060

Police 2,504 1,814 1,224 2,014 1,789 1,919 1,892 4,621 1,206 619

Fire 3,762 3,987 4,316 3,881 8,428 8,532 4,412 8,176 9,478 6,967 Engineering and public works and Economic Environment (Other activities) 1,247 2,898 2,147 2,265 4 1,926 2,111 147- 5,104 729


Leisure services (Parks and recretion) 922 999 968 1,015 1,574 2,412 1,734 1,886 2,188 3,022

Operating grants and contributions 23,510 23,789 24,470 22,249 20,137 19,987 19,618 20,022 20,344 23,213

Capital grants and contributions 3,017 496 5,101 7,683 3,043 3,125 639 4,006 1,265 3,310

Total governmental activities 61,048 57,218 60,960 61,472 59,450 64,078 56,892 68,516 65,392 65,470


Charges for services:

Water and sewer 54,010 59,033 71,934 78,136 84,713 86,717 91,451 96,524 99,108 101,474

Stormwater utility 6,947 8,153 8,670 9,633 10,147 10,604 11,010 10,777 10,842 10,865

Parking system 3,817 3,859 4,068 4,325 4,623 4,613 5,356 5,931 6,045 1,660

Golf Course 2,074 2,188 1,369 1,697 1,546 1,547 1,589 1,505 1,513 6,717

Operating grants and contributions (56) - - - - - - - - -

Capital grants and contributions 2,463 1,908 1,457 2,388 4,209 4,391 873 550 3,306 6,004

Total business-type activities 69,310 75,141 87,498 96,179 105,237 104,747 110,279 115,287 120,814 126,719

Total primary government 130,358 132,359 148,458 157,651 164,688 168,825 167,170 183,803 186,206 192,189

NET REVENUES (EXPENSES):Governmental activities (129,659) (144,957) (141,212) (135,748) (130,196) (122,869) (127,739) (126,738) (131,568) (127,774) Business-type activities 10,571 10,974 21,083 24,750 25,154 30,670 33,190 38,051 40,162 31,340

Total primary government (119,088)$ (133,983)$ (120,129)$ (110,998)$ (105,042)$ (92,199)$ (93,569)$ (88,685)$ (91,406)$ (96,434)$

(1) In 2016 the expenses and revenue categories were reorganized.

(Continued)

CITY OF WEST PALM BEACH, FLORIDACHANGES IN NET POSITION

LAST TEN FISCAL YEARS(ACCRUAL BASIS OF ACCOUNTING)

September 30, 2016(UNAUDITED)

(IN THOUSANDS)

S-2

2007 2008 2009 2010 2011 2012 2013 2014 2015 2016NET REVENUES (EXPENSES) - PRIMARY GOVERNMENT (119,088)$ (133,983)$ (120,129)$ (110,998)$ (105,042)$ (92,199)$ (93,569)$ (88,685)$ (91,406)$ (96,434)$

GENERAL REVENUES AND OTHER CHANGES IN NET POSITION:Governmental activities:Taxes Property, levied for general purposes 90,208 87,369 86,042 78,003 68,154 65,117 65,294 66,996 71,559 80,485 Property, levied for special purposes 3,729 3,604 3,667 3,604 3,710 1,576 1,570 1,572 1,574 1,590 Business 2,463 2,413 2,898 2,547 2,551 2,486 2,507 2,877 3,017 3,195 Franchise 9,316 8,971 8,817 8,294 7,803 8,549 8,383 9,093 9,338 9,008 Public service 17,905 18,415 19,418 19,591 19,470 19,440 19,715 20,459 20,658 20,826 Insurance premium 3,408 2,864 2,111 2,565 2,585 2,374 2,501 2,874 2,900 - Grants and contributions not restricted to specific progamsState and local grants/shared revenues 3,765 3,554 6,423 6,340 3,134 3,221 3,436 3,619 3,928 3,934 Sales tax 7,505 7,401 3,260 3,305 7,067 6,036 6,949 7,470 7,996 8,312 Investment earnings 14,352 10,360 7,240 3,362 1,493 1,477 802 911 1,082 1,441 Miscellaneous 5,174 680 3,086 3,823 3,503 2,265 1,318 4,893 5,044 1,390 Other non-operating gains (losses) - - - - - - - - - - Capital contributions - - - - - - - - - - Transfers 4,588 4,753 6,939 7,832 8,322 8,217 8,081 9,113 10,196 10,121 Total governmental activities 162,413 150,384 149,901 139,266 127,791 120,758 120,555 129,876 137,292 140,302

Business-type activities:State and local grants & shared revenues - - - - - - - - - - Investment earnings 2,213 1,624 1,430 1,426 764 836 405 686 1,064 1,289 Miscellaneous - - - - - - - - - - Gain (loss) on disposal of capital assets - 1,137 (231) - - - - - - - Other non-operating gains - - - - - - - - - - Transfers (4,588) (4,753) (6,939) (7,832) (8,322) (8,217) (8,081) (9,113) (10,196) (10,121) Total business-type activities (2,375) (1,992) (5,740) (6,406) (7,558) (7,381) (7,675) (8,427) (9,133) (8,832) Total primary government 160,039 148,391 144,161 132,859 120,233 113,377 112,880 121,449 128,160 131,470

CHANGE IN NET POSITIONGovernmental activities 32,755 5,426 8,689 3,518 (2,404) (2,111) (7,184) 3,138- 5,725 12,528 Business type activities 8,140 8,982 15,343 18,344 17,595 23,289 25,515 29,625 31,029 22,508

Total primary government 40,895$ 14,408$ 24,032$ 21,862$ 15,191$ 21,177$ 18,331$ 32,764$ 36,754$ 35,036$

(IN THOUSANDS)

CITY OF WEST PALM BEACH, FLORIDACHANGES IN NET POSITION (continued)

LAST TEN FISCAL YEARS(ACCRUAL BASIS OF ACCOUNTING)

(UNAUDITED)September 30, 2016

S-3

General fund: 2007 2008 2009 2010 2011 2012 2013 2014 2015 2016Reserved -$ -$ -$ -$ -$ -$ -$ -$ -$ -$ Encumbrances 1,033 559 418 241 - - - - - - Inventories 170 221 185 217 - - - - - - Prepaid items 8 8 23 30 - - - - - - Advances to other funds 19,966 16,049 14,620 10,189 - - - - - - Nonspendable (1) Advances to other funds - - - - 9,543 8,855 6,830 4,860 2,769 851 Inventories - - - - 216 205 226 286 149 292 Prepaid items - - - - 62,598 61 7,529 6,159 51 5,688 Deferred outflows - - - - - - - - 5,366 - Restricted (1)Committed (1) Emergency reserve - - - - 12,016 12,083 12,031 12,732 13,287 13,722 Unreserved, designated: Reserve for emergencies 29,071 29,350 29,350 23,542 - - - - - - For subsequent year's expenditures 566 1,358 169 65 - - - - - - Assigned (1) For subsequent year's expenditures - - - - 7,683 10,533 9,630 633 2,998 2,405 Unreserved, undesignated 6,843 2,958 1,648 1,536 - - - - - - Unassigned (1) - - - - 6,874 7,203 - 12,332 16,225 18,060 Total general fund 57,656 50,502 46,413 35,821 36,395 38,941 36,247 37,003 40,845 41,018

All other governmental funds:Reserved 56,572 45,738 25,572 21,173 - - - - - - Nonspendable (1) Advances to other funds - - - - - - - - - - Inventories - - - - 76 73 71 69 66 63 Prepaid items - - - - - - - - - - Restricted (1) Land held for resale - - - - - - 2,857 2,857 7,014 2,927 Forfeiture - - - - 1,094 991 927 856 752 608 Cemetery trust - - - - 945 989 1,020 1,055 1,111 1,149 Transportation and Economic Environment - - - - 4,549 5,635 6,872 8,077 9,599 8,283 Economic environment - - - - 22,902 21,485 20,479 19,672 25,308 32,241 Wetlands Mitigation - - - - 707 707 707 707 707 - Library - - - - - - 8 63 (26) 39

Debt Service - - - - 1,728 1,776 1,805 1,839 2,922 2,110 Capital outlay - - - - 4,053 6,427 3,205 2,064 2,922 39,299 Land held for resale - - - - - - - 3,965 - - Public safety - - - - - 847 - - - 11,054 Committed (1) Reserves for emergencies - - - - - - - - - - Public safety - - - - 500 932 4,148 9,079 9,887 2,090 Leisure services - - - - 53 472 140 298 486 863 Capital outlay - - - - 6,303 6,430 4,973 5,301 4,204 3,837 Assigned (1) For subsequent year's expenditures - - - - 2 - - - - - Capital outlay - - - - - - 144 - - - Debt service - - - - (836) - - - - - Unreserved, Undesignated Special revenue funds (178) 5,939 12,012 16,763 - - - - - - Debt service funds 2,650 2,530 2,467 1,715 - - - - - - Capital project funds 83,027 43,392 17,730 12,380 - - - - - - Unassigned (1) - - - - - (4) (22) (2) - - Total all other governmental funds 142,071 97,599 57,781 52,031 45,494 48,892 50,220 55,901 63,844 104,564

Total governmental funds 199,727$ 148,102$ 104,194$ 87,851$ 81,889$ 87,834$ 86,467$ 92,904$ 104,690$ 145,582$

(1) Categories pursuant to GASB 54.

(IN THOUSANDS)

CITY OF WEST PALM BEACH, FLORIDAFUND BALANCES OF GOVERNMENTAL FUNDS

LAST TEN FISCAL YEARS

(MODIFIED ACCRUAL BASIS OF ACCOUNTING)


S-4

2007 2008 2009 2010 2011 2012 2013 2014 2015 2016

Revenues:

Taxes 124,190$ 121,294$ 120,327$ 111,938$ 101,640$ 97,100$ 97,402$ 100,815$ 105,941$ 112,417$

Licenses and permits 9,766 7,047 6,982 6,454 6,330 7,729 8,626 12,916 10,788 13,319

Intergovernmental 38,857 34,902 37,278 38,034 33,873 31,767 30,976 35,498 33,533 36,766

Charges for services 19,169 19,668 21,662 21,683 23,138 24,012 22,680 24,077 26,160 26,632

Special assessments 4 4 6 3 2 - 4 - - -

Fines and forfeitures 712 905 580 798 948 1,387 1,276 4,215 1,005 272

Rents and royalties 1,131 3,989 897 1,171 1,400 1,530 1,458 1,549 4,050 1,460

Interest 13,607 9,735 6,817 3,055 1,358 1,342 795 862 927 1,441

Miscellaneous 2,479 2,445 782 2,185 1,122 722 924 3,634 3,562 2,236

Total Revenues 209,915 199,989 195,331 185,321 169,811 165,588 164,141 183,566 185,966 194,544

Expenditures:

Current:

General government 21,180 19,143 18,686 16,757 13,226 13,025 11,890 11,804 13,478 12,925

Public safety 83,199 87,687 84,850 82,260 81,534 80,636 82,437 90,896 91,225 98,351

Engineering services and Public Work 13,892 13,620 13,181 10,213 8,449 6,260 6,338 5,799 5,457 5,190

Economic environment 15,882 18,426 20,384 19,664 18,177 15,480 16,261 17,180 18,505 20,744


Leisure services 15,489 15,557 15,976 19,727 20,533 18,914 20,327 21,039 20,625 21,319

Capital outlay 62,627 65,214 59,775 28,463 11,304 11,975 8,647 13,770 6,423 13,107

Debt service:

Principal retirement 12,062 13,697 11,408 11,300 11,765 9,103 9,543 10,375 6,576 8,196

Interest charges 11,028 11,705 10,986 10,175 9,297 9,100 8,530 8,544 7,630 6,253

Issuance costs and other 2,581 30 28 234 3 515 54 2 755 2,102

Total Expenditures 246,722 253,666 243,608 207,448 182,377 173,227 172,993 188,414 179,676 198,167

Excess of Revenues

Over (Under) Expenditures (36,809) (53,677) (48,277) (22,127) (12,566) (7,639) (8,852) (4,848) 6,290 (3,623)

Other Financing Sources (Uses):

Issuance of Debt 134,225 - - - - 6,900 2,581 6,215 67,809 50,400

Issuance and Premium of refunding debt - - - 27,354 - - - - - 82,230

Payment to escrow agent for refunding - - - (27,208) - - - - (67,198) (41,680)

Transfers in 56,704 55,761 47,021 51,398 47,330 31,929 20,711 17,940 16,297 18,192

Transfers out (55,968) (53,709) (42,652) (45,760) (40,726) (25,245) (15,807) (12,870) (11,941) (14,628)

Total Other Financing

Sources (Uses) 134,961 2,052 4,368 5,784 6,604 13,584 7,485 11,285 5,496 94,515

Special item (uses)

Bond proceeds to police pension - - - - - - - - - (50,000)

Net Changes in Fund Balances 98,152 (51,625) (43,908) (16,343) (5,962) 5,945 (1,367) 6,437 11,786 40,892

Fund Balances (Deficit)

- beginning of year 101,574 199,726 148,102 104,194 87,851 81,889 87,834 86,467 92,904 104,690

Fund Balances (Deficit)

- end of year 199,726$ 148,102$ 104,194$ 87,851$ 81,889$ 87,834$ 86,467$ 929,904$ 104,690$ 145,582$

Debt service as a percentage

of non-capital expenditures 13.94% 13.50% 12.20% 12.13% 12.31% 11.61% 11.03% 10.83% 8.64% 8.94%

(IN THOUSANDS)

CITY OF WEST PALM BEACH, FLORIDACHANGES IN FUND BALANCES OF GOVERNMENTAL FUNDS

LAST TEN FISCAL YEARS(MODIFIED ACCRUAL BASIS OF ACCOUNTING)


S-5

Revenue Capacity (unaudited)

Fiscal Year Inter-

Ended Total Total Licenses Governmental Charges forSeptember 30 Revenue Taxes and Permits Revenue Services

2007 209,913,744$ 124,190,339$ 9,765,674$ 38,856,965$ 19,169,073$ 2008 199,989,138 121,293,965 7,046,596 34,901,674 19,667,598 2009 195,331,143 120,327,033 6,981,876 37,277,665 21,661,616 2010 185,320,243 111,938,012 6,453,522 38,034,341 21,682,952 2011 169,811,190 101,640,404 6,329,593 33,872,909 23,137,915 2012 165,588,357 97,100,239 7,729,177 31,766,519 24,011,917 2013 164,141,132 97,402,111 8,625,718 30,976,290 22,680,226 2014 183,565,932 100,814,979 12,916,031 35,497,974 24,076,908 2015 185,966,334 105,941,305 10,787,509 33,533,339 26,159,765 2016 194,543,968 112,417,302 13,319,426 36,765,758 26,632,367

Source - City of West Palm Beach Finance Department.

CITY OF WEST PALM BEACH, FLORIDAGOVERNMENTAL FUNDS REVENUES BY SOURCE

FOR THE LAST TEN FISCAL YEARS

GAAP (MODIFIED ACCRUAL) BASIS

(UNAUDITED)

September 30, 2016

S-6

Fines and Rents and

Forfeitures Interest Royalties Miscellaneous715,559$ 13,606,706$ 1,130,701$ 2,478,727$ 909,292 9,735,391 3,989,278 2,445,344 586,230 6,817,331 897,178 782,214 801,403 3,054,610 1,170,594 2,184,809 950,075 1,358,482 1,400,204 1,121,608

1,387,062 1,341,621 1,530,283 721,539 1,279,560 794,542 1,458,238 924,447 4,214,530 862,004 1,549,119 3,634,387 1,005,143 926,801 4,050,444 3,562,028

272,430 1,441,144 1,459,537 2,236,004

S-7

Fiscal

Year

Ended Total General Public Public Work & Economic

September 30 Expenditures Government Safety Engineering Environment

2007 246,722,470$ 21,180,036$ 83,198,727$ 13,892,233$ 15,882,385$

2008 254,135,372 19,142,626 87,686,765 14,090,704 18,425,782

2009 244,764,895 18,685,730 84,849,810 14,338,815 20,384,429

2010 211,655,885 16,757,042 82,260,233 14,421,701 19,663,846

2011 187,156,605 13,226,493 81,534,499 13,228,301 18,176,505

2012 179,753,597 13,024,972 80,635,605 12,785,821 15,479,643

2013 179,413,693 11,889,824 82,436,835 12,758,447 16,260,739

2014 195,466,614 11,804,350 90,896,411 12,851,688 17,179,938

2015 187,083,868 13,478,459 91,225,379 12,864,938 18,505,250

2016 198,167,269 12,925,294 98,350,526 5,189,654 20,744,094


(UNAUDITED)

CITY OF WEST PALM BEACH, FLORIDAGOVERNMENTAL FUNDS EXPENDITURES BY FUNCTION

FOR THE LAST TEN FISCAL YEARSGAAP (MODIFIED ACCRUAL) BASIS OF ACCOUNTING

September 30, 2016

S-8

Debt

Health and Leisure Capital Service

Sanitation Services Outlay Requirements

8,781,885$ 15,489,082$ 62,626,615$ 25,671,507$

8,586,963 15,556,696 65,214,067 25,431,769

8,333,352 15,975,678 59,774,565 22,422,516

8,655,111 19,726,674 28,462,548 21,708,730

8,089,040 20,532,898 11,303,784 21,065,085

8,221,015 18,913,676 11,974,563 18,718,302

8,966,029 20,327,165 8,646,846 18,127,808

9,004,885 21,038,671 13,770,353 18,920,318

9,000,502 20,625,423 6,423,317 14,960,600

9,980,656 21,318,590 13,106,779 16,551,676

S-9

Fiscal Subsequent Years' UnreservedYear Expenditures Fund Balance

Ended and Other Designated for Total Annual as Percent ofSeptember 30 Undesignated Designations Emergencies Unreserved Expenditures Expenditures

2007 6,843,005$ 565,720$ 29,071,139$ 36,479,864$ 133,228,274$ 27.4%2008 2,957,996 1,357,881 29,349,942 33,665,819 135,184,997 24.9%2009 1,648,012 169,461 29,349,942 31,167,415 134,218,541 23.2%2010 1,535,628 65,095 23,542,117 25,142,840 131,491,267 19.1%

Fiscal Year

EndedSeptember 30

Non - Spendable Committed Assigned Unassigned

Annual Expenditures

UnassignedFund Balance

as Percentage ofExpenditures

2011 9,821,679$ 12,016,480$ 7,682,949$ 10,533,075$ 124,206,251$ 8.5%2012 9,121,228 12,083,495 10,533,075 7,203,361 123,009,497 5.9%2013 14,585,732 12,031,258 9,630,343 - 125,035,431 0.0%2014 11,305,467 12,732,291 10,671,924 2,293,125 131,227,410 1.7%2015 8,335,426 13,287,105 2,998,334 16,224,546 130,322,674 12.4%2016 6,830,887 13,722,195 2,404,792 18,060,085 139,286,294 13.0%

Source - City of West Palm Beach Finance Department

Note - In FY 2011 the City implemented GASB Statement No. 54, Fund Balance Reporting and Governmental Fund Type DefinitionsThis statement significantly changed the fund balance classifications in the governmental funds.

----------------------------Unreserved Fund Balances-----------------------------

(UNAUDITED)

CITY OF WEST PALM BEACH, FLORIDAGENERAL FUND-FUND BALANCE-COMPARED

TO ANNUAL EXPENDITURES FOR THE LAST TEN FISCAL YEARSGAAP (MODIFIED ACCRUAL) BASIS

September 30, 2016

S-10

FiscalYear General Insurance

Ended Total Property Utilities Franchise PremiumSeptember 30 Taxes Taxes Taxes Taxes Taxes

2007 120,461,013$ 90,208,358$ 17,905,240$ 9,316,366$ 3,031,049$ 2008 117,689,613 87,368,692 18,414,776 8,970,782 2,935,363 2009 116,660,204 86,042,581 19,417,782 8,817,388 2,382,453 2010 108,334,248 78,003,364 19,591,107 8,293,884 2,445,893 2011 97,930,546 68,153,656 19,470,328 7,802,807 2,503,755 2012 95,523,909 65,117,145 19,439,772 8,548,587 2,418,405 2013 81,760,619 51,222,824 19,714,871 8,382,610 2,440,314 2014 84,978,883 52,731,290 20,459,379 9,093,201 2,695,013 2015 88,918,256 56,109,347 20,657,795 9,338,246 2,812,868 2016 93,235,162 63,401,222 20,826,180 9,007,760 -


CITY OF WEST PALM BEACH, FLORIDAGENERAL FUND TAX REVENUES BY SOURCE



S-11

Fiscal TotalYear Franchise Cable Rolloff

Ended Revenue Electric TV Towing Container Utilities

2007 9,316,366$ 8,598,349$ 90,000$ 38,775$ 265,630$ 323,612$

2008 8,970,782 8,387,637 90,000 30,000 278,757 184,388

2009 8,817,388 8,220,306 90,000 30,000 239,948 237,134

2010 8,293,884 7,849,917 90,000 30,000 214,611 109,356

2011 7,802,807 7,367,062 90,000 30,000 199,980 115,765

2012 8,548,587 8,068,300 90,000 29,500 210,175 150,612

2013 8,382,610 7,922,637 - 30,500 306,412 123,061

2014 9,093,201 8,606,813 - 30,000 298,344 158,044

2015 9,338,246 8,745,791 - 30,000 404,411 158,044

2016 9,007,760 8,533,718 - 18,750 365,244 90,048


CITY OF WEST PALM BEACH, FLORIDAGENERAL FUND FRANCHISE REVENUES BY SOURCE

FOR THE LAST TEN FISCAL YEARSSeptember 30, 2016

(UNAUDITED)

S-12

CurrentFiscal Year Total Gross Percent Delinquent

Ended Property Tax Property Tax of Levy Property TaxSeptember 30 Levy Collections Collected Collections

2007 97,142,569$ 93,750,321$ 96.5% 187,363$ 2008 94,844,720 90,939,996 95.9% 33,408 2009 93,197,570 88,427,189 94.9% 1,282,220 2010 84,726,133 80,442,081 94.9% 1,165,045 2011 74,310,620 71,034,798 95.6% 827,967 2012 69,227,999 63,978,383 92.4% 2,715,092 2013 69,341,005 64,406,609 92.9% 2,457,707 2014 69,644,759 66,475,683 95.4% 2,091,703 2015 73,988,745 70,973,106 95.9% 1,849,963 2016 79,285,313 78,030,091 98.4% 2,319,266

Source - City of West Palm Beach Finance Department and the Palm Beach County Tax Collector's Office.

(1) Data from General fund only.

CITY OF WEST PALM BEACH, FLORIDAPROPERTY TAXES LEVIES AND COLLECTIONS

FOR THE LAST TEN FISCAL YEARSSeptember 30, 2016

(UNAUDITED)

S-13

OutstandingTotal Delinquent

Total Collections Outstanding Taxes asProperty Tax as Percent of Delinquent Percent of

Collections Current Levy Taxes Current Levy93,937,684$ 96.7% 656,682$ 0.7%90,973,404 95.9% 1,244,559 1.3%89,709,409 96.3% 678,350 0.7%81,607,126 96.3% 695,052 0.8%71,862,765 96.7% 575,638 0.8%66,693,475 96.3% 166,797 0.2%66,864,316 96.4% 272,321 0.4%68,567,386 98.5% 2,285,147 3.3%71,977,487 97.3% 399,004 0.5%80,349,357 101.3% 2,505,727 3.2%

S-14

Taxable Value for Operating Millage

Tax Roll

Fiscal YearEnded Real Personal Centrally Taxable

Exemptionsand

Total Assessed

Total Direct

Tax

Year September 30 Property Property Assessed Value Adjustments Values Rate2007 2008 11,967,346,460$ 740,660,972$ 13,856,810$ 12,721,864,242$ 4,764,368,581$ 17,486,232,823$ 7.48832008 2009 11,041,036,114 736,914,025 13,856,810 11,791,806,949 5,639,399,348 17,431,206,297 7.87482009 2010 9,476,076,845 708,548,439 12,358,014 10,196,983,298 3,686,804,390 13,883,787,688 8.45752010 2011 8,164,122,455 644,862,520 10,496,184 8,819,481,159 2,768,536,373 11,588,017,532 8.51652011 2012 7,813,471,998 591,792,615 10,939,288 8,416,203,901 2,643,493,104 11,059,697,005 8.26712012 2013 7,553,816,860 582,042,374 11,325,576 8,147,184,810 2,568,045,816 10,957,180,927 8.54692013 2014 7,748,029,218 582,623,897 11,243,415 8,341,896,530 2,616,426,695 10,958,323,225 8.54202014 2015 8,254,913,572 616,902,702 12,379,013 8,884,195,287 2,681,275,118 11,565,470,405 8.54202015 2016 9,293,035,997 665,054,642 13,848,568 9,971,939,207 2,807,722,858 12,779,662,065 8.54202016 2017 10,308,824,564 679,378,289 15,081,124 11,003,283,977 2,991,957,270 13,995,241,247 8.4946

Source - Palm Beach County Property Appraiser's OfficeNote - Assessed values are established by the Palm Beach County Property Appraiser's Office a of January 1 each year. Assessments were increased to 100% of market value as of 1980

Exemptions include Homestead, Widow/Widower's, Government, Institutional, etc.

Adjustments are made to Just Value for Land Classified as Agriculture, High-Water Recharge, Pollution Control Devices, Historically SignificantProperties, etc

CITY OF WEST PALM BEACH, FLORIDATAXABLE VALUES AND GROSS ASSESSED VALUE OF PROPERTY


(UNAUDITED)

September 30, 2016

S-15

Percentage Percentageof Total of Total

Assessed Assessed Assessed AssessedTaxpayer Value (1) Rank Valuation Value (1) Rank ValuationPalm Beach Outlets I LLC $184,945,295 1 1.32%CPT Phillips Point LLC 175,801,674 2 1.26% $124,734,730 1 0.98%CPT Equity LLC 123,336,217 3 0.88%West Palm Beach CRA (Lessor) 90,016,913 4 0.64% 117,650,816 2 0.92%Aaron Drive Holding LLC 76,757,994 5 0.55%CLPF Marketplace LLC 73,178,650 6 0.52%222 Lakeview LLC 66,431,627 7 0.47%Tenet Saint Mary's Hospital 60,295,448 8 0.43% 61,241,295 5 0.48%WPB Multifamily Owner I LLC 54,692,001 9 0.39%WPB Multifamily Owner II LLC 52,637,973 10 0.38%CLPF Esperante Partners LP - 65,461,813 3 0.51%Tenet Good Samaritan Inc. Hospital 63,371,906 4 0.50%Primegro Strand LLC 54,878,126 6 0.43%Gaedeke Holdings LTD 49,510,323 7 0.39%Portfine Phase II Land LTD 44,000,000 8 0.35%Lucky Chase III LLC - 43,763,000 9 0.34%Flagler Center Properties 34,000,000 10 0.27%

$958,093,792 6.85% $658,612,009 5.17%

(1) Source - Palm Beach County Tax Collector, 2017.

Fiscal Year 2016 Fiscal Year 2007

CITY OF WEST PALM BEACH, FLORIDAPRINCIPAL TAXPAYERS

TAX ROLL YEAR 2015/FISCAL 2016CURRENT YEAR AND NINE YEARS PRIOR


S-16

Debt Capacity(unaudited)

Fiscal Non-Ad Total Debt Total

Year General Valorem Total Debt as Percent Debt

Ended Obligation Revenue Promissory Capital Promissory Revenue Loans Capital Primary of Personal Per

September 30 Bonds Bonds Notes - Gov Leases Notes - ISF Bonds Payable Leases Government Income (1) Capita (2)

2007 23,965,000$ 182,735,000$ 34,153,727$ 2,564,277$ 143,495,000$ 3,371,492$ 7,522$ 390,292,018$ 6.28% 3,714.7$

2008 21,065,000 177,660,000 28,504,997 2,088,083 256,340,000 3,019,237 - 488,677,317 20.33% 4,714

2009 18,045,000 172,350,000 25,508,391 1,590,633 254,425,000 2,657,901 - 474,576,925 14.85% 4,601

2010 14,885,000 180,838,583 8,279,923 1,295,440 250,410,000 2,287,251 - 457,996,197 N/A 4,469

2011 11,605,000 172,900,845 7,583,585 989,077 243,505,000 1,907,045 - 438,490,552 11.17% 4,388

2012 10,510,000 165,468,836 6,864,930 10,192,167 238,665,000 - - 431,700,933 7.94% 4,246

2013 9,380,000 157,646,162 6,122,026 10,773,461 233,965,000 - - 417,886,649 13.41% 4,101

2014 8,215,000 148,417,339 17,228,987 9,588,753 229,105,000 - - 412,555,079 13.17% 4,027

2015 7,000,000 142,849,686 12,654,303 8,589,096 224,070,000 - - 395,163,085 12.02% 3,701

2016 5,725,000 215,596,625 12,061,934 12,673,165 10,605,886 218,740,000 - 193,652 475,596,262 14.47% 4,454

(1) FY2010 Personal income not available.

(2) See first page of Demographic and Economic section

Ratio of

Fiscal General GO Debt

Year Obligation Gross to GO Debt

Ended Bonded Assessed Assessed Per

September 30 Debt (3) Value Value Population Capita

2007 23,965,000$ 16,897,209,483$ 0.14% 105,068 228$

2008 21,065,000 17,486,232,823 0.12% 103,663 203

2009 18,045,000 17,431,206,297 0.10% 103,150 175

2010 14,885,000 11,588,017,532 0.13% 102,475 145

2011 11,605,000 11,059,697,005 0.10% 99,919 116

2012 10,510,000 10,715,230,626 0.10% 101,668 103

2013 9,380,000 10,958,323,225 0.09% 101,903 92

2014 8,215,000 11,565,470,405 0.07% 102,436 80

2015 7,000,000 12,779,662,065 0.05% 104,031 67

2016 5,725,000 13,995,241,247 0.04% 106,779 54

Note: Details regarding the City's outstanding debt can be found in the notes to the financial statements.

(3) Principal outstanding.

Business-Type Activities Debt

GENERAL OBLIGATION DEBT RATIOS

CITY OF WEST PALM BEACH, FLORIDA OUTSTANDING DEBT PER CAPITA BY TYPE

AND GENERAL OBLIGATION DEBT RATIOS


(UNAUDITED)

September 30, 2016

Governmental Activities Debt

S-17

Govermental Debt

Outstanding

Percentage Applicable to City of West Palm Beach

Amount Applicable to City of West Palm Beach

City of West Palm Beach (1)

Total bonds (2) 238,193,970$

Promissory notes, govermental funds 12,061,934

Promissory notes, internal service funds 10,605,885

Capital leases 12,673,165

Total direct debt 273,534,954 100.00% (5) 273,534,954$

Palm Beach County (3) 1,172,262,227 7.00% (5) 82,058,356

School Board (4) 14,868,000 7.00% (5) 1,040,760

Total overlapping debt 83,099,116

Total direct and overlapping debt 356,634,070$

(1) Source - City of West Palm Beach Finance Department. Government debt rollforward.

(2) Includes premiums and discounts.

(3) Source - Palm Beach County Finance Department.

(4) Source - Palm Beach County School Board.

Palm Beach County.

CITY OF WEST PALM BEACH, FLORIDACOMPUTATION OF DIRECT AND OVERLAPPING DEBT

SEPTEMBER 30, 2016(UNAUDITED)

(5) Percentage applicable based on total assessed value for the City of West Palm Beach and

S-18

Taxable Value of Property 11,003,283,977$

Debt Limitation - 10% of assessed value (1) 1,100,328,398

Amount of debt applicable to debt limit:Total bonded debt (2) 243,989,444$ Less:

Amount available in general debt service funds 2,110,000Other deductions allowed by law: Revenue Bonds 215,596,625 217,706,625

Legal Debt Margin 882,621,773$


(1) - Policy 1.5.6 from the Evaluation and Appraisal Report (E.A.R.) of the Comprehensive Plan(1996) Capital Improvements Element, Chapter 15.

(2) - Includes general obligation bonded debt, notes payable and long-term revenue bond debt.

CITY OF WEST PALM BEACH, FLORIDACOMPUTATION OF LEGAL DEBT MARGIN


S-19

Fiscal NetYear Operating Operating Revenue

Ended Revenue Expenses Available for Debt Service RequirementsSeptember 30 (1) (2) Debt Service Principal Interest Total Coverage

2007 66,394,064$ 45,256,289$ 21,137,775$ 3,080,000$ 6,107,316$ 9,187,316$ 230.1%2008 72,531,054 51,276,737 21,254,317 1,915,000 14,309,714 16,224,714 131.0%2009 85,980,962 53,310,037 32,670,925 4,345,000 7,349,350 11,694,350 279.4%2010 93,262,163 54,768,856 38,493,307 4,460,000 7,123,216 11,583,216 332.3%2011 99,706,675 63,544,888 36,161,787 4,885,000 6,430,052 11,315,052 319.6%2012 101,963,314 55,943,635 46,019,679 4,700,000 5,370,708 10,070,708 457.0%2013 109,405,945 58,930,857 50,475,088 4,860,000 6,095,743 10,955,743 460.7%2014 114,736,894 59,089,157 55,647,737 5,035,000 5,788,684 10,823,684 514.1%2015 117,507,988 62,062,079 55,445,909 5,329,997 5,669,483 10,999,480 504.1%2016 120,715,408 69,473,007 51,242,401 5,330,000 5,577,476 10,907,476 469.8%


(1) Includes Operating Revenue of City Enterprise Funds: Water & Sewer, Stormwater,Parking & Golf Funds.

(2) Includes Operating Expenses less Depreciation of City Enterprise Funds.

CITY OF WEST PALM BEACH, FLORIDASCHEDULE OF REVENUE BOND COVERAGE



S-20

Demographic and Economic(unaudited)

FiscalYear

Population MedianAge

School Enrollment

UnemploymentRate

Per Capita Personal Income

Total PersonalIncome

(1) (2) (3) (4) (5)2007 105,068 36.7 18,064 3.0% 31,235$ 3,281,798,980$ 2008 103,663 38.6 18,236 3.8% 23,188 2,403,737,644 2009 103,150 43.4 22,558 6.3% 30,992 3,196,824,800 2010 102,475 36.7 18,204 11.5% N/A N/A2011 99,919 43.5 16,970 10.9% 39,272 3,924,018,9682012 101,043 38.1 17,135 8.7% 31,235 3,156,078,1052013 101,903 38.1 17,131 7.1% 33,960 3,460,625,8802014 102,436 38.9 17,334 6.0% 30,493 3,123,580,9482015 104,031 39.9 17,383 5.2% 29,955 3,116,248,6052016 106,779 39.6 17,622 4.7% 30,788 3,287,511,852

(1) Source - US Census Bureau.(2) Source - US Census Bureau.(3) Source - Palm Beach County School Board Budget Office.(4) Source - Florida Department of Labor & Employment.(5) Source - US Census Bureau.

CITY OF WEST PALM BEACH, FLORIDADEMOGRAPHIC STATISTICS


September 30, 2016

(UNAUDITED)

S-21

Percentage of Percentage ofTotal County Total County

Employees Rank Employment Employees Rank Employment

Palm Beach County School Board 21,656 1 3.13% 21,707 1 3.34%

Palm Beach County Government 5,507 2 0.80% 11,293 2 1.74%

Tenet Healthcare Corp (2) 4,595 3 0.66% 4,500 3 0.69%

NextEra Energy/Florida Power & Light Company 4,005 4 0.58% 3,250 5 0.50%

HCA Palm Beach Hospitals (JFK, Palms West and West Palm) 3,476 5 0.50% 3,411 4 0.52%

Veterans Health Administration 2,700 6 0.39%

Florida Atlantic University 2,529 7 0.37% 2,923 6 0.45%

Boca Raton Regional Hospital 2,500 8 0.36% 1,860 9 0.29%

Jupiter Medical Center 2,195 9 0.32%

Bethesda Memorial Hospital 2,150 10 0.31%

The Breakers - 2,300 7 0.35%

Office Depot (Hdqtrs) - 2,180 8 0.34%

U.S. Sugar Corp - 1,800 10 0.28%Total 51,313 7.42% 55,224 8.50%

Source: Business Development Board of Palm Beach County.

CITY OF WEST PALM BEACH, FLORIDAPrincipal Employers in Palm Beach County

Current Year and Nine Years Prior

(UNAUDITED)

2016 2007

September 30, 2016

S-22

Demographic and Economic(unaudited)

Commercial Residential Total BuildingTotal Construction (1) Construction (1) Permits (1)

Tax Roll Fiscal Assessed Number NumberYear As of Year Ended Property of of Number Value of

1-Jan September 30 Value Units Value Units Value Issued Permits

2006 2007 16,897,209,483$ 53 213,808,077$ 46 13,750,725$ 11,055 414,007,991$

2007 2008 17,486,232,823 44 129,343,914 30 11,856,452 9,097 299,011,255

2008 2009 17,431,206,297 33 71,339,933 23 5,488,909 7,522 195,234,876

2009 2010 11,588,017,532 22 16,485,237 24 4,116,260 7,160 125,425,379

2010 2011 11,493,590,912 17 7,497,358 24 6,871,594 8,091 102,348,565

2011 2012 11,019,154,187 6 97,372,282 23 3,981,308 8,148 207,412,287

2012 2013 10,682,250,212 53 30,188,221 52 9,652,512 9,179 160,497,510

2013 2014 10,939,024,360 59 180,212,461 133 21,067,917 11,700 401,739,973

2014 2015 12,779,662,065 26 114,952,309 156 29,181,810 11,388 291,304,248

2015 2016 13,995,241,247 55 190,370,413 205 49,128,855 12,121 447,832,917

(1) Source - City of West Palm Beach Construction Services Department

(2) Source - Palm Beach County Property Appraiser's Office

CITY OF WEST PALM BEACH, FLORIDAPROPERTY VALUE AND CONSTRUCTION


(UNAUDITED)

September 30, 2016

S-23

November 5, 1894

September 18, 1903

DATE PRESENT CHARTER ADOPTED - October 1, 1988

FORM OF GOVERNMENT - Mayor - Commission

AREA: POPULATION:1945 - 16.00 square miles 1950 (U.S. Census) 43,1621955 - 16.00 square miles 1960 (U.S. Census) 56,2081965 - 41.75 square miles 1970 (U.S. Census) 57,3751975 - 43.25 square miles 1980 (U.S. Census) 63,0001980 - 42.07 square miles 1990 (U.S. Census) 67,6431985 - 42.60 square miles 2010 (University of FL) 102,4751990 - 52.00 square miles 2011 (University of FL) 99,9191995 - 55.34 square miles 2012 (University of FL) 101,0432000 - 57.80 square miles 2013 (U.S Census) 101,9032005 - 55.00 square miles 2014 (U.S Census) 102,4362010 - 55.29 square miles 2015 (U.S Census) 104,0312015 - 55.29 square miles 2016 (U.S Census) 106,779

EDUCATION (CITY-WIDE):

Number of public schools 22Number of full time employees(teachers and support) 1,679

Number of students 17,622

Souce - School District of Palm Beach County .

STREETS, SIDEWALKS AND STORM SEWERS:452.34 miles of paved streets and alleys 1,324 miles of sidewalks 319 miles of storm sewers

Source - City of West Palm Beach, MIS Support Services (GIS).

STREET LIGHTS:Number of street lights - 18,281

Source - City of West Palm Beach, MIS Support Services (GIS).

Continued on next page.

CITY OF WEST PALM BEACH, FLORIDAMISCELLANEOUS STATISTICAL DATA

(UNAUDITED)

DATE OF INCORPORATION -

DATE FIRST CHARTER ADOPTED -

September 30, 2016

S-24

ELECTIONS:

59,715 Registered Voters at last municipal election20,753 Votes cast in last municipal election

34.75% Registered voters voting

Source - City of West Palm Beach City Clerk

EMPLOYEES AS OF SEPTEMBER 30, 2016

1,370 Full Time Employees

Source - City of West Palm Beach Human Resources Department.

POLICE PROTECTION: FIRE PROTECTION:

285 Sworn Police officers 8 Suppression Units 111 Civilian Employees (full-time and part-time) 8 Advanced Life Support Units (Rescue units)396 Total 8 Fire stations

288 Employees (full-time)

Source - City of West Palm Beach Police Department. Source - City of West Palm Beach Fire Department.


(Continued)


September 30, 2016

S-25

RECREATION:Public parks - 578 acres

Cemeteries - 2

Municipal golf course - 1

Municipal swimming pool - 1

Source - City of West Palm Beach Leisure Services Department.

ENTERPRISE FUNDS:

Parking facilities1,629 Metered on street spaces2,807 Off street revenue controlled spaces

Source - City of West Palm Beach Parking System. * Does not include 400 spaces at the Police Department

WATER AND SEWER DISPOSAL SYSTEM: WATER SEWERActive accounts 33,723 27,534Capacity per day (million gallons) (1) 47 MGD 70 MGDMiles of mains (2) 559 319Fire hydrants: West Palm Beach 3,816 Palm Beach 392 South Palm Beach 10

Source - City of West Palm Beach Public Utilities Department.Note (1) - Based on average daily plan capacity for the year.Note (2) - Based upon new data from the City's GIS system.

Includes: park facilities, recreational centers, tennis courts, handball courts, soccer and football.


September 30, 2016(Continued)


S-26

Year Population % Change Population % Change Population % Change2007 1,295,033 0.55 (1) 18,680,367 1.81 (1) 301,139,947 0.902008 1,294,654 -0.03 (1) 18,807,219 0.68 (1) 304,059,724 0.972009 1,279,950 1.14 (1) 18,537,969 -1.43 (1) 307,006,550 0.972010 1,286,461 0.51 (1) 18,772,352 1.26 (1) 310,988,987 1.302011 1,320,134 2.62 (1) 18,801,310 0.15 (1) 312,602,730 0.432012 1,335,187 1.10 (1) 19,057,542 0.14 (1) 314,969,523 0.762013 1,356,545 0.02 (1) 19,317,568 1.36 (1) 313,914,040 -0.342014 1,372,171 0.01 (2) 19,552,860 1.23 (2) 316,128,839 0.072015 1,397,710 0.02 (2) 19,893,297 1.74 (2) 318,857,056 0.862016 1,422,789 0.02 (2) 20,612,439 1.74 (2) 323,127,513 0.86

(1) Source: University of Florida Bureau of Business and Economic Development.(2) Source - US Census Bureau.

Palm Beach CountyPer Capita Civilian

Personal Personal Labor Unemployment

Year Population Income Income Force (3)

2007 1,295,033 74,548,299$ (1) 59,147$ 650,548 (1) 4.8%2008 1,294,654 74,099,427 (1) 58,358 655,669 (1) 7.3%2009 1,279,950 77,339,224 (1) N/A 623,480 (1) 11.5%2010 1,286,461 73,546,909 (1) N/A 617,366 (1) 10.4%2011 1,320,134 N/A (1) 39,272 618,694 (1) 11.7%2012 1,335,187 N/A (1) 53,500 617,597 (1) 8.7%2013 1,356,545 N/A (1) 33,960 640,200 (1) 7.1%2014 1,372,171 N/A (2) 33,239 668,600 (3) 6.0%2015 1,397,710 N/A (2) 32,858 685,000 (3) 5.2%2016 1,422,789 N/A (2) 33,650 691,475 (3) 4.7%

(1) Source: University of Florida Bureau of Business and Economic Development.

(2) Source - US Census Bureau.

(3) Source - Labor Force and Unemployment data are for September of each year.


September 30, 2016(Continued)

Population Growth

Palm Beach County Florida United States

S-27

Continuing Debt Disclosure (unaudited)

Event Occurrence

Principal and interest deliquencies NoneNon-payment related defaults NoneUnscheduled draws on debt service reserves reflecting financial difficulties NoneUnscheduled draws on credit enhancements reflecting financial difficulties NoneSubstitution of credit or liquidity providers, or their failure to perform NoneAdverse tax opinions or events affecting the tax-exempt status of the security NoneModifications to rights of security holders NoneBond calls and tender offers NoneRelease, substitution or sale of property securing repayment of securities NoneRatings changes NoneBankruptcy, insolvency or receivership NoneMerger, acquisition or sale of all issuer assets NoneAppointment of successor trustee None

CITY OF WEST PALM BEACH, FLORIDACONTINUING DISCLOSURE

EVENT NOTICESFISCAL YEAR 2016

(UNAUDITED)

C-1

Special Obligation Bonds (unaudited)

Fiscal TotalYear Non-Ad Utility Insurance Inter-

Ended Valorem Services Franchise Premium Charges for GovernmentalSeptember 30 Collections (1) Taxes Taxes Taxes Services Revenue

2007 76,956,738$ 17,905,240$ 9,316,366$ 3,031,049$ 18,858,991$ 14,289,846$ 2008 75,084,756 18,414,776 8,970,782 2,935,363 19,247,818 12,968,368 2009 75,157,004 19,417,782 8,817,388 2,382,453 19,321,736 11,417,685 2010 74,556,758 19,591,107 8,293,884 2,445,893 19,500,405 10,507,435 2011 76,539,755 19,470,328 7,802,807 2,503,755 22,618,597 11,606,626 2012 77,279,783 19,439,772 8,548,587 2,418,405 22,888,368 10,735,999 2013 77,691,025 19,714,871 8,382,610 2,440,314 21,515,326 12,103,445 2014 83,716,476 20,459,379 9,093,201 2,695,013 22,685,372 12,425,405 2015 86,067,888 20,657,795 9,338,246 2,812,868 23,932,521 12,970,886 2016 83,267,657 20,826,180 9,007,760 - 24,438,621 13,276,669


(1) Includes non ad-valorem revenues of the City that are deposited into the City's General Fund.

CITY OF WEST PALM BEACH, FLORIDACONTINUING DISCLOSURE: SPECIAL OBLIGATION BONDS

NON-AD VALOREM REVENUE COLLECTIONS BY SOURCE


(UNAUDITED)

C-2

Licenses Fines Rents Paymentand and and in Lieu of

Permits Forfeitures Interest Royalties Taxes Miscellaneous

2,824,297$ 711,653$ 3,774,404$ 122,860$ 4,314,511$ 1,807,521$ 2,779,219 905,335 3,641,662 127,164 4,528,146 566,123 3,256,290 580,397 2,954,788 144,659 6,393,024 470,802 2,880,908 372,237 1,845,038 273,185 7,388,040 1,458,626 2,919,864 292,835 612,251 277,315 8,013,606 421,771 2,805,129 750,124 1,014,815 226,769 8,001,726 450,089 2,902,578 687,945 603,753 234,036 8,601,274 504,873 3,303,820 663,031 610,241 258,437 9,124,857 2,397,720 3,460,440 293,397 589,772 251,421 9,306,186 2,454,356 3,694,485 244,763 840,818 247,694 9,446,930 1,243,737

C-3

Outstanding Percent MaximumOutstanding Final Principal of AnnualObligation Maturity Amount Total Debt Service

Capital Improvement Revenue Refunding Note, Series 2006 (1) 2021 1,988,375$ 1.48% 460,826$ Communication System Note, Series 2014 (2) 2024 8,719,197 6.48% 1,220,143 Vehicle Acquisition Note, Series 2014 (2) 2024 1,886,688 1.40% 266,276 Palm Beach County Promissory Note (3) 2023 1,750,000 1.30% 250,000 Special Obligation Series 2016 2040 120,185,000 89.34% 15,026,642

TOTAL 134,529,260$ 100.00% 17,223,887$


(4) Maximum Annual Debt Service based on budgetary-basis amortization schedule.

(2) Non-Ad Valorem Funds are not expected to be needed to pay debt service due to court and assessment fees and other revenues that the City expects to receive to pay such debt service.

(1) Non-Ad Valorem Funds will be used to pay the City's allocable share (100%) of the remaining debt service pursuant to an Interlocal Agreement which obligated the City and the Agency to each fund their allocable share of such debt service.

(3) Non-Ad Valorem Funds are not expected to be needed to pay debt service due to an Interlocal Agreement which obligates the West Palm Beach Community Redevelopment Agency (the "Agency") to pay such debt service.


OUTSTANDING NON-AD VALOREM DEBTSEPTEMBER 30, 2016

(UNAUDITED)

C-4

A B C D=(A-B-C) E F=D/E

Non-AdValorem

Available Revenues DebtNon-Ad Obligations Available Debt ServiceValorem Secured by for Service on Coverage on

Fiscal Total Revenues Specific Covenant to Covenant to Covenant toYear Non-Ad Used for Non-Ad Budget and Budget and Budget and

Ended Valorem Essential Valorem Appropriated Appropriated AppropriatedSeptember 30 Revenues Services (1) Revenues (2) Debt Debt (3) Debt

2012 77,279,783$ 32,015,200$ 3,996,075$ 41,268,508$ 5,200,178$ 7.94x2013 77,691,025 34,747,144 3,962,075 38,981,806 4,418,801 8.82x2014 83,716,476 38,266,243 2,321,100 43,129,133 4,924,523 8.76x2015 86,067,888 36,500,372 - 49,567,516 2,196,816 22.56x2016 83,267,657 36,182,771 - 47,084,886 2,196,802 21.43x


(1) Represents total expenses for public safety, health care and sanitation, minus the portion of such expenses paid from the City's ad valorem tax revenues.(2) Represents debt service payments on the City's Public Service Tax Bonds, the Guaranteed Entitlement Bonds, and the Sunshine State Loans, Series 1995.

(3) Represents debt service on (i) the CityPlace CDD Bonds, Series 1998, (ii) the Sunshine State Loans, Series 1996, 1997, and 2001, (iii) the Palm Beach County Promissory Note, (iv) the Capital Improvement Revenue Note, Series 2003, (v) the Capital Improvement Revenue Refunding Note, Series 2006, (vi) the HUD Section 108 Note, Series 2000-A, (vii) the Communication System Note, Series 2006, (viii) the CityPlace CDD Revenue Refunding Bonds, Series 2012, (ix) the Communication System Note, Series 2014, and the (x) Vehicle Acquisition Note, Series 2014.

(UNAUDITED)


HISTORICAL NON-AD VALOREM REVENUES, DEBT SERVICE AND

COVERAGE (ASSUMING DEBT SERVICE PAYMENTS WERE NOT

MADE BY OTHER DEDICATED REVENUE SOURCES)

FOR THE LAST FIVE FISCAL YEARS

C-5

A B C D=(A-B-C) ENon-AdValorem

Available RevenuesNon-Ad Obligations Available DebtValorem Secured by for Service on

Fiscal Total Revenues Specific Covenant to Covenant toYear Non-Ad Used for Non-Ad Budget and Budget and

Ended Valorem Essential Valorem Appropriate AppropriateSeptember 30 Revenues Services (1) Revenues (2) Debt Debt (3)

2012 77,279,783$ 32,015,200$ 3,996,075$ 41,268,508$ 460,369$ 2013 77,691,025 34,747,144 3,962,075 38,981,806 460,775 2014 83,716,476 38,266,243 2,321,100 43,129,133 460,440 2015 86,067,888 36,500,372 - 49,567,516 460,397 2016 83,267,657 36,182,771 - 47,084,886 460,398



HISTORICAL NON-AD VALOREM REVENUES, DEBT SERVICE ANDCOVERAGE (ACCOUNTING FOR DEBT SERVICE PAYMENTS

MADE BY OTHER DEDICATED REVENUE SOURCES)FOR THE LAST FIVE FISCAL YEARS

(UNAUDITED)

(3) All of the existing debt for which the City has covenanted to budget and appropriate legally available non-ad valorem revenues to satisfy its payment obligations thereunder (excluding the City's allocable share of the Capital Improvement Revenue Refunding Note, Series 2006, and the Special Obligation Bonds, Series 2006) historically has been paid in full by (i) tax increment revenue received from the West Palm Beach Community Redevelopment Agency pursuant to Interlocal Agreements that obligate the Agency to make such payments and (ii) in the case of the HUD Section 108 Note and Communication System Note, Series 2006, federal grants and other sources of revenue that are not received as non-ad valorem revenue for deposit into the City's General Fund.

(2) Represents debt service payments on the City's Public Service Tax Bonds, Series 2010, and the Guaranteed Entitlement Bonds.

(1) Represents total expenses for public safety, health care and sanitation, minus the portion of such expenses paid from the City's ad valorem tax revenues.

C-6

F G=D/(E+F)

DebtService

Maximum CoverageAnnual Debt on all

Service Covenant toon Budget and

Series 2006 AppropriateBonds Debt

3,119,373$ 11.53x3,119,373 10.89x3,119,373 12.05x3,119,373 13.85x3,119,373 13.15x

C-7

Utility System Revenue Bonds (unaudited)

Average Annual Number Average Annual Number Water Salesof Accounts Served of ERCs Served (Thousands of Gallons)

32,105 84,553 8,465,032


* Includes customers located outside the corporate limits of the City.

Average Annual Number Average Annual Number Water Salesof Accounts Served of ERCs Served (Thousands of Gallons)

27,779 62,935 4,393,799

Source - City of West Palm Beach Utilities Rate Consultant.

CITY OF WEST PALM BEACH, FLORIDACONTINUING DISCLOSURE: UTILITY SYSTEM REVENUE BONDS

CUSTOMERS AND SALESFISCAL YEAR 2016*

(UNAUDITED)

* Includes customers located outside the corporate limits of the City.

Water Customers and Sales (*)

Wastewater Customers and Sales (*)

C-8

Fiscal Annual AnnualYear Average Allotted Average Permitted

Ended Daily Flow Capacity Percent of Daily Flow Capacity Percent ofSeptember 30 (MGD) (MGD) Allotment (MGD) (MGD) Capacity

2012 12.35 20.50 60.2% 41.39 70.00 59.13%2013 11.79 20.50 57.5% 40.92 70.00 58.46%2014 11.44 20.50 55.8% 40.66 70.00 58.09%2015 12.24 20.50 59.7% 40.52 70.00 57.88%2016 12.75 20.50 62.2% 43.00 70.00 61.43%


City of West Palm Beach Flows Total ECRWWRF Flows

WASTEWATER FLOWS (MGD)FOR THE LAST FIVE FISCAL YEARS

(UNAUDITED)


C-9

Water WastewaterRates Rates

Residential ServiceService Charge (per dwelling unit) [2] 21.43$ 12.24$

Commodity Charge (per units of water used) [3]0-8 units 2.48$ 3.61$ 9-16 units 3.11 3.61 [4]17-36 units 3.66 N/A37-76 units 4.28 N/A77-200 units 4.94 N/AAbove 201 units 5.55 N/A

Non-Residential and IrrigationService Charge (per service meter) [2]

5/8-inch 21.43$ 12.24$ 3/4-inch 32.69 18.38 1-inch 53.61 30.65

1+1/2-inch 107.28 61.20 2-inch 171.65 97.93 3-inch 321.87 183.62 4-inch 536.45 308.31 6-inch 1,072.90 612.03 8-inch 1,716.60 979.28 10-inch 2,467.63 1,407.72 12-inch 4,608.05 2,633.60

Commodity Charge (per units of water used) [3]0-8 units 2.48$ 3.61$ 9-16 units 3.11 N/A17-36 units 3.66 N/A37-76 units 4.28 N/A77-200 units 4.94 N/AAbove 201 units 5.55 N/A

Irrigation Service0-75 units 4.28$ N/A76-200 units 4.94 N/AAbove 201 units 5.55 N/A


(2) The monthly service charge represents the minimum bill rendered.

(4) Rate billed to parcels that provide their own level of canal and drainage maintenance and street sweeping services.

(1) The amounts derived from the Rate Resolution as approved by the City Commission.

(3) One unit of water is equal to 100 cubic feet of metered water; 100 cubic feet is equivalent to 748 gallons.

(UNAUDITED)


SUMMARY OF MONTHLY WATER AND WASTEWATER RATESAS OF 10/1/2016

C-10

Meter Size Water Wastewater

5/8 - inch $2,190 $1,2703/4 - inch 3,285 1,9051- inch 5,475 3,1751 1/2 - inch 10,950 6,3502 - inch 17,520 10,1603 - inch 35,040 20,3204 - inch 54,750 31,7506 - inch 109,500 63,5008 - inch 175,200 101,60010 - inch 251,850 146,05012 - inch 470,850 273,050

Meter Size Residential General Service

5/8 inch $190 $2203/4 inch 285 3301 inch 480 5501 1/2 inch 955 1,1002 inch 1,530 1,7603 inch 2,865 3,3004 inch 4,775 5,5006 inch 9,550 11,0008 inch 15,280 17,60010 inch 21,965 25,30012 inch 41,085 47,320

Fire Hydrant Meter Deposit $1,500Detector check Meter deposit $175

Meter Size Installation Tap-In Charge

5/8 - inch $610 $1,9735/8 - inch Dual C 342 N/A3/4 - inch 567 9731- inch 800 2,1551 1/2 - inch 944 3,2302 - inch 1,379 3,5893 - inch 3,321 (2) N/A (3)4 - inch 7,975 (2) N/A (3)6 - inch 10,634 (2) N/A (3)8 - inch 13,040 (2) N/A (3)10 - inch 17,519 (2) N/A (3)12 - inch 19,629 (2) N/A (3)


(1) Includes cost of meter instalation.


SUMMARY OF WATER CAPACITY CHARGES, CUSTOMER DEPOSITS, AND METER INSTALLATIONS

(UNAUDITED)

(3) Customer responsible for installing 3-inch and larger services.

Customer DepositsEffective 10/1/16

Effective 10/1/16Meter Installation Charges

(2) Reflects estimated charge; final charge recommended to recover actual cost incurred.

Effective 10/1/16Capacity Charges

C-11

StormwaterRates

Class A110 [2] 13.17$ Class A110 [3] 8.97 Class A110 [4] 4.91


(2) Essentially billed to customers receiving full stormwater utility services by the City.(3) Rate billed to parcels providing their own level of canal maintenance services.

(1) The monthly service charge per equivalent residential unit represents the minimum bill rendered; the charge for stormwater utility service is included on the monthly bill for water and wastewater services. Number of equivalent residential units is based on individual property characteristics of each nonresidential parcel determined on a basis consistent with the average impervious residential developed property.

(4) Rate billed to parcels that provide their own level of canal and drainage maintenance and street sweeping

(UNAUDITED)


SUMMARY OF MONTHLY STORMWATER RATES [1]AS OF 10/1/2016

C-12

Average

Fiscal Year Monthly

Ended Average Water Average Water Average Water Average Water Use per Unit

September 30 Annual Units Sales (ccf) Annual Units Sales (ccf) Annual Units Sales (ccf) Annual Units Sales (ccf) (Gallons)

2007 53,385 8,148,035 9,588 3,452,869 1,874 136,831 64,847 11,737,735 11,283

2008 54,226 7,136,865 9,502 2,821,531 1,874 123,715 65,602 10,082,111 9,580

2009 54,383 7,419,206 9,440 3,317,135 1,874 134,759 65,697 10,871,100 10,315

2010 53,956 7,631,302 9,389 3,418,347 1,874 137,817 65,219 11,187,466 10,692

2011 53,857 7,555,790 9,412 3,490,998 1,874 137,996 65,143 11,184,784 10,702

2012 53,736 7,104,445 9,510 2,720,923 1,873 110,741 65,119 9,936,109 9,511

2013 53,643 7,682,732 9,338 2,995,930 1,873 119,061 64,854 10,797,723 10,738

2014 53,316 7,286,320 9,321 3,405,880 1,881 155,177 64,518 10,847,377 10,480

2015 53,594 7,527,314 9,347 3,474,048 1,894 153,965 64,835 11,155,327 10,725

2016 54,422 7,545,809 9,333 3,617,076 1,875 154,003 65,630 11,316,888 10,748

Average Average

Annual Monthly

Compound Average Water Average Water Average Water Average Water Use per Unit

Growth Rate Annual Units Sales (ccf) Annual Units Sales (ccf) Annual Units Sales (ccf) Annual Units Sales (ccf) (Gallons)

2006 to 2016 1.31% -1.75% -0.16% -1.21% 0.01% -0.10% 0.23% -1.56% -1.79%

2011 to 2016 0.21% -0.03% -0.17% 0.71% 0.01% 2.22% 0.15% 0.24% 0.09%

2014 to 2016 1.03% 1.77% 0.06% 3.05% -0.16% -0.38% 0.86% 2.14% 1.27%



WATER SYSTEM CUSTOMER GROWTH

AS OF 10/1/2016

(UNAUDITED)

Water System Customer Growth

Note: "ccf" is the amount of water that flows through customer water meters and is measured in hundreds of cubic feet.

1 ccf (100 cubic feet) is equivalent to 748 gallons of water.

West Palm Beach Palm Beach South Palm Beach Total

West Palm Beach Palm Beach South Palm Beach Total

C-13

Fiscal Year Average Average Average Average Average Average Average AverageEnded Annual Annual Annual Annual Annual Annual Annual Annual

September 30 Accounts ESUs Accounts ESUs Accounts ESUs Accounts ESUs

2007 22,424 22,424 2,130 27,722 2,776 45,094 27,330 95,240 2008 22,439 22,439 2,122 27,888 2,790 45,834 27,351 96,161 2009 22,444 22,444 2,119 27,855 2,801 46,501 27,364 96,800 2010 22,433 22,433 2,092 27,735 2,829 47,685 27,354 97,853 2011 22,422 22,422 2,091 27,668 2,840 48,200 27,353 98,290 2012 22,414 22,414 2,115 27,655 2,850 48,316 27,379 98,385 2013 22,428 22,428 2,113 27,629 2,866 48,482 27,407 98,539 2014 22,445 22,445 2,112 27,638 2,862 48,476 27,419 98,559 2015 22,490 22,490 2,106 27,970 2,833 48,502 27,429 98,962 2016 22,504 22,504 2,100 28,347 2,853 48,491 27,457 99,342

AverageAnnual Average Average Average Average Average Average Average Average

Compound Annual Annual Annual Annual Annual Annual Annual AnnualGrowth Rate Accounts ESUs Accounts ESUs Accounts ESUs Accounts ESUs

2006 to 2016 0.13% 0.13% -0.29% 0.46% 0.51% 0.99% 0.14% 0.64%2011 to 2016 0.07% 0.07% 0.09% 0.49% 0.09% 0.12% 0.08% 0.21%2014 to 2016 0.13% 0.13% -0.28% 1.27% -0.16% 0.02% 0.07% 0.40%



STORMWATER SYSTEM CUSTOMER GROWTH

AS OF 10/1/2016

(UNAUDITED)

Single Family

Stormwater System Customer Growth

Single Family Multifamily Commercial Total

Multifamily Commercial Total

C-14

Fiscal Year Average Monthly

Ended Average Annual Billed Billed Flow

September 30 Units (1) Sales (ccf) per Unit (gallons)

2007 52,058 6,096,199$ 7,299

2008 52,833 5,618,636 6,629

2009 53,199 5,727,245 6,711

2010 53,094 5,759,141 6,761

2011 52,913 5,796,672 6,829

2012 52,841 5,524,306 6,517

2013 52,530 5,568,384 6,608

2014 52,372 5,729,737 6,820

2015 52,997 5,843,162 6,873

2016 53,600 5,874,063 6,831

Average

Annual Average Monthly

Compound Average Annual Billed Billed Flow

Growth Rate Units Sales (ccf) per Unit (gallons)

2006 to 2016 0.44% -0.64% -1.08%

2011 to 2016 0.26% 0.27% 0.01%

2014 to 2016 1.17% 1.25% 0.09%

(1) - Units represent the sum of the residential dwelling and commercial accounts served.


Wastewater System Customer Growth


WASTEWATER SYSTEM CUSTOMER GROWTH

AS OF 10/1/2016

(UNAUDITED)

C-15

2012 2013 2014 2015 2016

Water System Sales 50,276,673$ 55,315,301$ 58,825,624$ 60,574,857$ 61,392,172$ Wastewater System Sales 26,263,531 27,365,957 28,397,747 28,637,971 29,170,820

Stormwater System Sales 10,022,779 10,383,648 10,764,281 10,840,359 10,853,567 Other Operating Revenues 6,639,447 9,356,557 9,272,706 9,714,930 10,242,081 Total Operating Revenues 93,202,430 102,421,463 107,260,358 109,768,117 111,658,640

Other Income 787,343 717,678 955,045 1,577,763 1,166,279 Total Revenues 93,989,773 103,139,141 108,215,403 111,345,880 112,824,919

Operating Expenses 52,448,642 53,759,301 54,962,050 56,521,647 63,087,241 Applicable Impact Fees 587,500 328,667 461,355 781,849 778,246

Net Revenues 42,128,631 49,708,507 53,714,708 55,606,082 50,515,924 As a Percent of Total Revenues 44.82% 48.20% 49.64% 49.94% 44.77%Other Transfers [1] 32,523,743 31,056,462 31,604,303 35,291,607 36,793,847 Debt Service Coverage: Rate Covenant Test 1 2.53 3.19 3.50 3.55 3.38 Rate Covenant Test 2 1.30 1.60 1.70 1.58 1.37

Amount Available for Other Purposes 9,604,888$ 18,652,045$ 22,110,405$ 20,314,475$ 13,722,077$




UTILITY SYSTEM HISTORICAL DEBT COVERAGE ANALYSISFOR THE LAST FIVE FISCAL YEARS

(UNAUDITED)

(1) Includes transfers to General Fund (P.I.L.O.T.), renewal and replacement transfers, annual debt service payments on outstanding utility system indebtedness and required ECR transfers.

Firscal Year Ended September 30

C-16

Fiscal

Year Net Revenue Maximum

Ended Operating Available for Debt Annual

September 30 Revenue Expenses Debt Service Service Coverage (1)

2007 58,787,255$ 41,197,701$ 18,037,798$ 9,584,155$ 1.88

2008 66,890,361 46,950,087 20,604,728 15,521,701 1.33

2009 81,448,594 49,511,597 32,702,461 15,479,081 2.11

2010 88,595,227 49,893,597 38,900,514 15,479,081 2.51

2011 94,939,873 53,111,573 42,345,550 15,479,081 2.74

2012 95,737,970 52,448,642 43,805,073 16,650,111 2.63

2013 102,997,493 53,759,301 49,566,859 15,577,757 3.18

2014 108,215,403 54,962,050 53,714,708 15,344,375 3.50

2015 111,345,880 56,521,647 55,606,082 15,676,227 3.55

2016 112,824,919 63,087,241 50,515,924 14,956,603 3.38



UTILITY SYSTEM HISTORICAL SCHEDULE OF

NET CASH FLOW, DEBT SERVICE AND DEBT COVERAGE

(1) Before required transfers to Reserve Account, Renewal, Replacement and Improvement Fund, and to the

General Reserve Fund.

CONTINUING DISCLOSURE: UTILITY SYSTEM REVENUE BONDS

(UNAUDITED)


C-17

Tax Increment Revenue Bonds(NPCCRA)(unaudited)

Percentage DollarTax Roll Fiscal Increase/ Increase/

Year Year City of Decrease (Decrease)Ended Ended West Palm Palm Beach Over Over

December 31 September 30 Beach County Total Prior Year Prior Year

2006 2007 2,984,883$ 1,569,350$ 4,554,233$ -8.00% (395,870)$ 2007 2008 2,723,498 1,363,950 4,087,448 -10.25% (466,785) 2008 2009 2,101,222 1,130,521 3,231,743 -20.93% (855,705) 2009 2010 1,703,046 1,001,928 2,704,973 -16.30% (526,769) 2010 2011 1,489,436 882,069 2,371,505 -12.33% (333,468) 2011 2012 1,480,112 847,311 2,327,424 -1.86% (44,082) 2012 2013 1,503,051 860,500 2,363,551 1.55% 36,128 2013 2014 1,584,528 905,194 2,489,722 5.34% 126,171 2014 2015 1,782,533 1,020,421 2,802,955 12.58% 313,232 2015 2016 1,822,340 1,039,511 2,861,851 2.10% 58,896

(1) Palm Beach County began utilizing a different Taxable Value with tax roll year 2013 that adjusts for the county-wide senior, historic and/or economic exemptions.

CITY OF WEST PALM BEACH, FLORIDACONTINUING DISCLOSURE: TAX INCREMENT REVENUE BONDS

HISTORICAL NPCCRA TAX INCREMENT REVENUESFOR THE LAST TEN FISCAL YEARS

(UNAUDITED)

Source - City of West Palm Beach Finance Department. Data from statement of revenues, expenditures, and changes in fund balances, govermental funds.

C-18

A B =A-B

Tax Roll Fiscal Final Percentage Base Percentage DollarYear Year Gross Increase Year Increase Increase

Ended Ended Taxable Over Taxable Incremental Over OverDecember 31 September 30 Value Prior Year Value (1) Value (2) Prior Year Prior Year

2007 2008 523,829,387$ 1.42% 86,933,276$ 436,896,111$ 1.71% 7,330,222$ 2008 2009 466,647,209 -10.92% 86,933,276 379,713,933 -13.09% (57,182,178) 2009 2010 360,879,313 -22.67% 86,933,276 273,946,037 -27.85% (105,767,896) 2010 2011 308,967,242 -14.38% 86,933,276 222,033,966 -18.95% (51,912,071) 2011 2012 281,117,897 -9.01% 86,933,276 194,184,621 -12.54% (27,849,345) 2012 2013 273,599,846 -2.67% 86,933,276 186,666,570 -3.87% (7,518,051) 2013 2014 276,492,817 1.06% 86,933,276 189,559,541 1.55% 2,892,971 2014 2015 286,768,468 3.72% 86,933,276 199,835,192 5.42% 10,275,651 2015 2016 311,740,198 8.71% 86,933,276 224,806,922 12.50% 24,971,730 2016 2017 346,037,449 11.00% 86,933,276 259,104,173 15.26% 34,297,251


(2) Incremental Value equals the Final Gross Taxable Value minus the Base Year Taxable Value.(3) Represents Final Taxable Value as provided by the Palm Beach County Property Appraiser's Office (the "PAO").

(1) The boundaries of the Northwood/Pleasant City Community Redevelopment Area (the "NPCCRA") were expanded in December, 2001 to include the residential neighborhood located in the Pleasant City area. The aggregate assessed value of the taxable real property in the expanded boundary of the NPCCRA as of January 1, 2001, was $9,731,463. In tax roll year 2001, fiscal year 2002, such amount was added to the assessed value of the taxable property originally located in the NPCCRA to establish a new base year taxable value for use in determining the NPCCRA TaxIncrement Revenues to be deposited into the NPCCRA Redevelopment Trust Fund.


HISTORICAL NPCCRA REAL PROPERTY ASSESSED VALUESFOR THE LAST TEN FISCAL YEARS

(UNAUDITED)

C-19

Tax Roll FiscalYear Year

Ended Ended New ConstructionDecember 31 September 30 Taxable Value

2011 2012 324,171$ 2012 2013 835,198 2013 2014 1,282,124 2014 2015 562,500 2015 2016 240,800 2016 2017 (156,783)


HISTORICAL NPCCRA NEW CONSTRUCTION TAXABLE VALUESCONTINUING DISCLOSURE: TAX INCREMENT REVENUE BONDS


(UNAUDITED)FOR THE LAST FIVE FISCAL YEARS

C-20

2012 2013 2014 2015 2016 Total

Revenues

Tax Increment

City of West Palm Beach 1,500,034$ 1,488,023$ 1,503,051$ 1,586,281$ 1,822,340$ 7,899,729$

Palm Beach County 881,469 847,311 860,500 905,194 1,039,511 4,533,985

Total Tax Increment 2,381,503 2,335,334 2,363,551 2,491,475 2,861,851 12,433,714

Miscellaneous

Loan/ Assessment Repayments 5,873 8,022 9,166 34,815 27,127 85,003

Investment Earnings (General) 34,709 17,025 20,796 19,472 34,947 126,949

Investment Earnings on NPCCRA

Debt Service Reserve Subaccount 12,229 5,971 7,406 - - 25,606

Total Miscellaneous 52,811 31,018 37,368 54,287 62,074 237,558

Total Revenues 2,434,314 2,366,352 2,400,919 2,545,762 2,923,925 12,671,272

Expenditures

Debt Service Series 2005A 876,500$ 876,500$ 876,500$ 438,250$ -$ 3,067,750$

Debt Service 2005B 847,585 847,652 846,993 849,183 843,156 4,234,569

Debt Service 2015 - - - 154,321 844,794 999,115

Total Debt 1,724,085 1,724,152 1,723,493 1,441,754 1,687,950 8,301,434

Operations

City Cost Allocation

Operating Expense 709,494 833,876 671,920 570,010 520,006 3,305,306

City Administrative Expense 749,916 722,836 650,326 431,459 425,550 2,980,087

Innovative Policing Expense 236,980 231,378 293,134 287,049 284,428 1,332,969 Capital Outlay 4,500 3,000 - - 149,463 156,963

Total Operations 1,700,890 1,791,090 1,615,380 1,288,518 1,379,447 7,775,325

Total Expenditures 3,424,975 3,515,242 3,338,873 2,730,272 3,067,397 16,076,759

Surplus (990,661)$ (1,148,890)$ (937,954)$ (184,510)$ (143,472)$ (3,405,487)$

Source: City of West Palm Beach Finance Department.

(1) Assumes an issuance of the Series 2005 Bonds at par in the aggregate principal amount of $7,280,000 at a true interest cost of interest cost of 5.680217% and the payment of interest only on the Series 2005B Bonds until the Fiscal Year ending September 30, 2010. (2) Represents an allocation by the City of allowable costs incurred by the Agency in its implementation of the NPCCRA Redevelopment Plan. The City expects to continue funding of such services, (subject to approval by the City Commission) in the absence of available Agency funding for any portion of the City's cost allocation.


HISTORICAL NPCCRA FINANCIAL REPORTSFOR THE LAST FIVE FISCAL YEARS

For the Fiscal Year Ending September 30, 2016

C-21

Fiscal Year

NPCCRA Tax

Increment Revenues

Debt Sevice

on Series 2005A Bonds

Debt Service

Coverage on

Series 2005A Bonds

Debt Sevice

on Series 2005B Bonds

Debt Service

Coverage on

Series 2005BBonds

Debt Sevice

on Series 2015

Bonds

Debt Service

Coverage on

Series 2015

Bonds

Maximum Annual Debt

Service on Series

2005A, 2005B and

2015 Bonds

2012 2,381,503$ 876,500$ 2.72 847,585$ 1.78 -$ - 1,726,125$ 1.38 x2013 2,335,334 876,500 2.66 847,652 1.72 - - 1,726,125 1.35 x2014 2,363,551 876,500 2.70 846,993 1.76 - - 1,726,125 1.37 x2015 2,491,475 438,250 5.69 849,183 2.42 154,321 9.64 1,726,125 1.44 x2016 2,861,851 - - 843,156 3.39 844,794 1.39 2,503,696 1.14 x


HISTORICAL NPCCRA TAX INCREMENT REVENUES, DEBT SERVICES,AND DEBT SERVICE COVERAGE


Maximum Annual

Debt Service

CoverageSeries 2005A,

2005B and 2015

C-22

2012 2013 2014 2015 2016

Actual Growth/ Assumed Growth -12.33% -1.83% 1.55% 5.20% 12.54%

Existing Value $280,793,726 $272,764,648 $275,210,693 $286,117,366 $311,520,441

Taxing Authority:

City of West Palm Beach

New Construction 324,171 835,198 1,282,124 240,800 (156,783)

Taxable Value 281,117,897 273,599,846 276,492,817 286,358,166 311,363,658

Base Year Value 86,933,276 86,933,276 86,933,276 86,933,276 86,933,276

Tax Increment 194,184,621 186,666,570 189,559,541 199,424,890 224,430,382

Millage Rate (City) 8.0739 8.3465 8.3465 8.3465 8.3465

Gross Incremental Revenue 1,567,827 1,558,013 1,582,159 1,664,500 1,873,208

Statutory Reduction 0.95% 0.95% 0.95% 0.95% 0.95%

Incremental Revenue 1,489,436 1,480,112 1,503,051 1,581,275 1,779,548

Palm Beach County

Millage Rate (County) 4.7815 4.7815 4.7815 4.7815 4.7815

Gross Incremental Revenue 928,494 892,546 906,379 953,550 1,073,114

Statutory Reduction 0.95% 0.95% 0.95% 0.95% 0.95%

Incremental Revenue 882,069 847,919 861,060 905,873 1,019,458

Total Revenue 2,371,505$ 2,328,031$ 2,364,111$ 2,487,147$ 2,799,006$


HISTORICAL NPCCRA TAX INCREMENT REVENUES AND GROWTHFOR THE LAST FIVE FISCAL YEARS

For the Fiscal Year Ending September 30

C-23

Percentage ofFiscal Year

Taxable 2016 GrossTaxpayer Use of Property Value (1) Taxable Value

1515 Flagler Property LP Office 28,000,000$ 8.98%920 N Stanley Partners LLC Vacant Commercial 12,000,000 3.85%2014 Cahuenga Partners LP Vacant Commercial 7,002,310 2.25%Mountain West Palm Real Estate, Inc. Warehouse/Distribution 5,989,500 1.92%La Boheme Properties Inc Light MFG 4,221,925 1.35%Business Development Center LLC Wareh/Dist Term Condo 4,213,778 1.35%CK 919 LLC Office 3,190,439 1.02%SILC R W Light MFG 2,933,263 0.94%SIL FIR CORP Warehouse/Distribution 2,847,706 0.91%401 Northwood Road LLC Multi-use 2,578,962 0.83%

TOTAL 23.41%

(1) Represents Final Taxable Value as provided by the Palm Beach County Property Appraiser's Office (the "PAO").

Source - City of West Palm Beach Finance Department and the Palm Beach County Property Appraiser's Office (the "PAO").


NPCCRA PRINCIPAL TAXPAYERSTAX ROLL YEAR 2015/FISCAL YEAR 2016

(UNAUDITED)

C-24


Taxable 2016 GrossDevelopment Use of Property Value (1),(2) Taxable Value

Flagler Pointe Condominium Residential 51,284,528$ 16.45%The Slade Condominium Residential 38,187,271 12.25%Portofino Condominium Residential 13,235,754 4.25%La Fontana Condominium Residential 10,845,783 3.48%Majestic Towers Condominium Residential 8,900,254 2.86%Villa Lofts Condominium Residential 6,952,875 2.23%Downtown Business Park Condominium Office 4,783,967 1.53%Toy Store Condominium Office 1,882,783 0.60%Butler Medical Center Condominium Office 1,788,122 0.57%Vacant Condo Land Residential 1,500,000 0.48%

TOTAL 44.70%

(2) Represents Final Taxable Value as provided by the Palm Beach County Property Appraiser's Office (the "PAO").

(1) Taxable value represents the value for the entire development and not the taxable value attributable to any individual taxpayer

Source - City of West Palm Beach Finance Department and the Palm Beach County Property Appraiser's Office (the "PAO").


NPCCRA PRINCIPAL DEVELOPMENTSTAX ROLL YEAR 2015/FISCAL YEAR 2016

(UNAUDITED)

C-25

Tax Roll FiscalYear Year City of

Ended Ended West Palm Palm BeachDecember 31 September 30 Beach County

2007 2008 7.1916 3.7811 2008 2009 7.5500 3.7811 2009 2010 8.0739 4.3440 2010 2011 8.0739 4.7500 2011 2012 8.0739 4.7815 2012 2013 8.3465 4.7815 2013 2014 8.3465 4.7815 2014 2015 8.3465 4.7815 2015 2016 8.3465 4.7815 2016 2017 8.3465 4.7815


(UNAUDITED)


NPCCRA HISTORICAL MILLAGE RATES


C-26

Tax Increment Revenue Bonds (CCCRA) (unaudited)

Tax Roll Fiscal PercentageYear Year City of Downtown Increase

Ended Ended West Palm Palm Beach Development OverDecember 31 September 30 Beach County Authority Total Prior Year

2006 2007 13,728,372$ 7,217,913$ 1,579,981$ 22,526,266$ 0.84%2007 2008 14,421,747 7,222,526 1,615,141 23,259,414 3.25%2008 2009 14,647,396 7,880,738 1,412,395 23,940,529 2.93%2009 2010 12,308,235 7,241,125 1,185,342 20,734,702 -13.39%2010 2011 12,019,425 7,118,107 1,136,422 20,273,954 -2.22%2011 2012 12,513,033 7,166,430 1,112,251 20,791,714 2.55%2012 2013 12,761,458 7,308,494 1,025,958 21,095,910 1.46%2013 2014 13,625,131 7,792,666 1,104,414 22,522,211 6.76%2014 2015 15,383,593 8,811,558 1,258,228 25,453,379 13.01%2015 2016 15,769,313 10,227,816 1,457,204 27,454,333 7.86%


(1) Palm Beach County began utilizing a different Taxable Value with tax roll year 2013 that adjusts for the county-wide senior, historic and/or economic exemptions.


HISTORICAL CCCRA TAX INCREMENT REVENUES


(UNAUDITED)

C-27

Fiscal Year

CCCRA Tax Increment Revenues

Debt Service on

Series 2006A Bonds

Debt Service Coverage on Series 2006A

Bonds

Debt Service on Series

2006B Bonds

Debt Service Coverage on Series 2006B

Bonds


2010A Refunding

Bonds

2012 20,273,954$ 3,566,450$ 5.68 1,781,791$ 9.38 1,113,609$ 2013 20,788,557 3,566,450 5.83 1,801,127 9.56 1,113,861 2014 21,120,894 5,414,075 3.90 - N/A 1,113,050 2015 22,760,247 5,411,950 4.21 - N/A 1,113,985

2016 (1) 25,997,129 3,227,390 8.06 - N/A 1,112,950

(1) Fy 2016. The amount of debt service dropped by just over $2 millions form FY 2015 as the 2006 Special Obligation and the 2010B CCCRA bonds were paid off during the year.


HISTORICAL CCCRA TAX INCREMENT REVENUES, DEBT SERVICES,AND DEBT SERVICE COVERAGE


C-28

Debt Service Coverage on Series 2010A

Refunding Bonds


2010B Refunding

Bonds

Debt Service Coverage on Series 2010B

Refunding Bonds

Debt Serviceon Series 2015

Refunding Bonds

Maximum Annual


2006A, 2006B, 2010A, 2010B

and 2015 Bonds

Maximum Annual

Debt Service Coverage

13.40 1,213,119$ 11.39 -$ 7,674,969$ 2.64 x13.84 1,276,963 11.20 - 7,758,401 2.68 x14.11 1,134,796 12.86 - 7,661,921 2.76 x15.57 707,392 22.95 - 7,233,326 3.15 x20.46 761,385 28.44 2,078,603 7,180,328 3.62 x

C-29

A B =A-BTax Roll Fiscal Final Percentage Base Percentage

Year Year Gross Increase Year IncreaseEnded Ended Taxable Over Taxable Incremental Over

December 31 September 30 Value Prior Year Value Value (1) Prior Year

2007 2008 2,260,928,135$ 9.34% 251,511,950$ 2,009,416,185$ 10.63%2008 2009 2,262,212,175 0.06% 251,511,950 2,010,700,225 0.06%2009 2010 2,161,160,564 -4.47% 251,511,950 1,909,648,614 -5.03%2010 2011 1,856,193,364 -14.11% 251,511,950 1,604,681,414 -15.97%2011 2012 1,818,539,815 -2.03% 251,511,950 1,567,027,865 -2.35%2012 2013 1,829,612,152 0.61% 251,511,950 1,578,100,202 0.71%2013 2014 1,860,942,669 1.71% 251,511,950 1,609,430,719 1.99%2014 2015 1,969,866,074 5.85% 251,511,950 1,718,354,124 6.77%

2015 (2) 2016 (2) 2,191,637,208 11.26% 251,511,950 1,940,125,258 12.91%2016 (2) 2017 (2) 2,439,488,349 11.31% 251,511,950 2,187,976,399 12.78%


(1) Incremental Value equals the Final Gross Taxable Value minus the Base Year Taxable Value.

CITY OF WEST PALM BEACH AND PALM BEACH COUNTY


(UNAUDITED)

(2) Represents Final Taxable Value (prior to value adjustment and board reviews) as provided by the Palm Beach County Property Appraiser's Office.


HISTORICAL CCCRA REAL PROPERTY ASSESSED VALUES

C-30

A B =A-BTax Roll Fiscal Final Percentage Base Percentage

Year Year Gross Increase Year IncreaseEnded Ended Taxable Over Taxable Incremental Over

December 31 September 30 Value Prior Year Value Value (1) Prior Year

2007 2008 1,854,701,902$ 10.77% 191,563,585$ 1,663,138,317$ 12.16%2008 2009 1,891,711,869 2.00% 191,563,585 1,700,148,284 2.23%2009 2010 1,678,294,850 -11.28% 191,563,585 1,486,731,265 -12.55%2010 2011 1,439,291,701 -14.24% 191,563,585 1,247,728,116 -16.08%2011 2012 1,387,796,768 -3.58% 191,563,585 1,196,233,183 -4.13%2012 2013 1,362,354,481 -1.83% 191,563,585 1,170,790,896 -2.13%2013 2014 1,271,519,588 -6.67% 191,563,585 1,079,956,003 -7.76%2014 2015 1,354,104,804 6.50% 191,563,585 1,162,541,219 7.65%

2015 (2) 2016 (2) 1,516,013,663 11.96% 191,563,585 1,324,450,078 13.93%2016 (2) 2017 (2) 1,725,462,556 13.82% 191,563,585 1,533,898,971 15.81%


(1) Incremental Value equals the Final Gross Taxable Value minus the Base Year Taxable Value.(2) Represents Final Taxable Value as provided by the Palm Beach County Property Appraiser's Office (the "PAO").

(UNAUDITED)


HISTORICAL CCCRA REAL PROPERTY ASSESSED VALUESDOWNTOWN DEVELOPMENT AUTHORITY


C-31

Tax Roll FiscalYear Year New

Ended Ended ConstructionDecember 31 September 30 Taxable Value

2012 2013 9,562,092 2013 2014 6,898,894 2014 2015 28,317,960 2015 2016 12,314,153 2016 2017 40,594,679


(UNAUDITED)

CITY OF WEST PALM BEACH, FLORIDACONTINUING DISCLOSURE: TAX INCREMENT REVENUE BONDSHISTORICAL CCCRA NEW CONSTRUCTION TAXABLE VALUES


C-32


Taxable 2016 GrossTaxpayer Use of Property Value (1) Taxable Value (1)

Phillips Point II, LLC Office 175,801,674$ 8.02%CityPlace Tower Equity, LLC Office 123,336,217 5.63%West Palm Beach CRA Lessor - City Place & Others Mixed-used 119,813,814 5.47%222 Lakeview LLC Office 66,431,627 3.03%Melrose Camerford Partners LLC Office 39,065,445 1.78%Flagler Center Properties Office 38,540,511 1.76%Colonnade Clematis LLC Office 38,169,064 1.74%515 N Flagler Drive Owner LLC Office 37,581,960 1.71%One Clearlake Centre, LLC Office 26,400,000 1.20%PBM Properties, LLC Office 24,200,000 1.10%

TOTAL 31.45%

Source - City of West Palm Beach Finance Department and the Palm Beach County Property Appraiser's Office

(1) Represents Final Taxable Value as provided by the Palm Beach County Property Appraiser's Office


CCCRA PRINCIPAL TAXPAYERSTAX ROLL YEAR 2015/FISCAL YEAR 2016

(UNAUDITED)

C-33


Taxable 2015 GrossDevelopment Use of Property Value (1),(2) Taxable Value

2 City Plaza Condominium Mixed-Use 189,242,377$ 8.63%One Watermark Place Condominium Residential 135,140,927 6.17%Trump Plaza Condominium Residential 120,733,336 5.51%City Place South Tower Mixed-Use 114,287,340 5.21%1 City Plaza Condominium Residential 91,714,754 4.18%Waterview Towers Condominium Residential 71,099,572 3.24%City Palms Condominium Residential 69,417,634 3.17%The Edge Condominium Residential 49,992,167 2.28%The Strand Condominium Office/Residential 48,962,857 2.23%Esplanade Grande Condominium Residential 44,431,800 2.03%

TOTAL 42.66%

Source - City of West Palm Beach Finance Department and the Palm Beach County Property Appraiser's Office.

(2) Represents Final Taxable Value as provided by the Palm Beach County Property Appraiser's Office.

(1) Taxable value represents the value for the entire development and not the taxable value attributable to any individual taxpayer (e.g. taxable for condominiums is for the entire complex, not any individual condominium owner or group of owners).


CCCRA PRINCIPAL DEVELOPMENTSTAX ROLL YEAR 2015/FISCAL YEAR 2016

(UNAUDITED)

C-34

Tax Roll FiscalYear Year City of Downtown

Ended Ended West Palm Palm Beach DevelopmentDecember 31 September 30 Beach County Authority (1)

2007 2008 7.1916 3.7811 1.5000 2008 2009 7.5500 3.7811 1.0000 2009 2010 8.0739 4.3440 1.0000 2010 2011 8.0739 4.7500 1.0000 2011 2012 8.0739 4.7815 1.0000 2012 2013 8.3465 4.7815 1.0000 2013 2014 8.3465 4.7815 1.0000 2014 2015 8.3465 4.7815 1.0000 2015 2016 8.3465 4.7815 1.0000 2016 2017 8.3465 4.7815 1.0000



CCCRA HISTORICAL MILLAGE RATESFOR THE LAST TEN FISCAL YEARS

(1) Pursuant to Interlocal Agreement, revenue derived from the second mill of the DDA tax levy has been exempted from inclusion into the CCCRA Redevelopment Trust Fund, as such revenue is to be used by the DDA to provide trolley service and marketing programs to retain and attract business in the CCCRA or for any other purpose that supports the CCCRA Redevelopment Plan.

(UNAUDITED)

C-35

General Obligation Bonds (unaudited)

FiscalYear Taxable Value for Operating Millage (1) Gross

Tax Roll Ended Real Personal Centrally Total Exemptions & AssessedYear September 30 Property Property Assessed Property Adjustments (2) Values

2007 2008 11,967,346,460$ 740,660,972$ 13,856,810$ 12,721,864,242$ 4,764,368,581$ 17,486,232,823$

2008 2009 11,041,036,114 736,914,025 13,856,810 11,791,806,949 5,639,399,348 17,431,206,297

2009 2010 9,476,076,845 708,548,439 12,358,014 10,196,983,298 3,636,804,390 13,833,787,688

2010 2011 8,042,224,657 672,179,527 10,496,184 8,724,900,368 2,768,690,544 11,493,590,912

2011 2012 7,772,722,569 590,003,300 10,939,288 8,373,665,157 2,645,489,030 11,019,154,187

2012 2013 7,520,194,033 581,248,590 11,325,576 8,112,768,199 2,569,482,013 10,682,250,212

2013 2014 7,729,608,349 581,279,065 11,243,415 8,322,130,829 2,616,893,531 10,939,024,360

2014 2015 8,254,913,572 616,902,702 12,379,013 8,884,195,287 2,681,275,118 11,565,470,405

2015 2016 9,293,035,997 665,054,642 13,848,568 9,971,939,207 2,807,722,858 12,779,662,065

2016 2017 10,308,824,564 679,378,289 15,081,124 11,003,283,977 2,991,957,270 13,995,241,247

Source - Palm Beach County Property Appraiser's Office

(1) Assessed values are established by the Palm Beach County Property Appraiser's Office as of January 1 each year. State law requires that assessed values be established at 100% of estimated actual value.(2) Exemptions provided by State law include exemptions for homestead, government, institutions and for certain individuals who qualify as widows, disabled persons or senior citizens. Adjustments provided by State law include certain lands used for agriculture, high-water recharge, pollution control devices and certain historically significant properties.


TAXABLE VALUES AND GROSS ASSESSED VALUE OF PROPERTY


(UNAUDITED)

CONTINUING DISCLOSURE: GENERAL OBLIGATION BONDS

C-36

OutstandingFiscal Current Total DelinquentYear Total Gross Percent Delinquent Total Collections Outstanding Taxes as

Ended Property Tax Property Tax of Levy Property Tax Property Tax as Percent of Delinquent Percent ofSeptember 30 Levy Collections Collected Collections Collections Current Levy Taxes Current Levy

2007 97,142,569$ 93,750,321$ 96.5% 187,363$ 93,937,684$ 96.7% 656,682$ 0.7%

2008 94,844,720 90,939,996 95.9% 33,408 90,973,404 95.9% 1,244,559 1.3%

2009 93,197,570 88,427,189 94.9% 1,282,220 89,709,409 96.3% 678,350 0.7%

2010 84,726,133 80,442,081 94.9% 1,165,045 81,607,126 96.3% 695,052 0.8%

2011 74,310,620 71,034,798 95.6% 827,967 71,862,765 96.7% 575,638 0.8%

2012 69,227,999 63,978,383 92.4% 2,715,092 66,693,475 96.3% 166,797 0.2%

2013 69,341,005 64,406,609 92.9% 2,457,707 66,864,316 96.4% 272,321 0.4%

2014 69,644,759 66,475,683 95.4% 2,091,703 68,567,386 98.5% 2,285,147 3.3%

2015 73,988,745 70,973,106 95.9% 1,849,963 71,977,487 97.3% 399,004 0.5%

2016 79,285,313 78,030,091 98.4% 2,319,266 80,349,357 101.3% 2,505,727 3.2%


(1) Data from General fund only.

CITY OF WEST PALM BEACH, FLORIDACONTINUING DISCLOSURE: GENERAL OBLIGATION BONDS

PROPERTY TAX LEVIES AND COLLECTIONS


(UNAUDITED)

C-37

Percentageof Total

Assessed AssessedTaxpayer Value (1) Valuation

Palm Beach Outlets I LLC $184,945,295 1.32 %CPT Phillips Point LLC 175,801,674 1.26 %CPT Equity LLC 123,336,217 0.88 %West Palm Beach CRA (Lessor) - City Place & Other Prop. 90,016,913 0.64 %Aaron Drive Holding LLC 76,757,994 0.55 %CLPF Marketplace LLC 73,178,650 0.52 %222 Lakeviwe LLC 66,431,627 0.47 %Tenet Saint Mary's Hospital 60,295,448 0.43 %WPB Multifamily Owner I LLC 54,692,001 0.39 %WPB Multifamily Owner II LLC 52,637,973 0.38 %

958,093,792$ 6.84 %

(1) Source - Palm Beach County Tax Collector.


2016 PRINCIPAL TAXPAYERS

TAX ROLL YEAR 2015/FISCAL YEAR 2016

(UNAUDITED)

C-38

FloridaInland

Fiscal Year City of West Palm Beach Children's NavigationTax Roll Ended General Debt Services District

Year September 30 Operations Service Total DDA (2) (2)

2007 2008 7.1916 0.2967 7.4883 1.5000 0.5823 0.03452008 2009 7.5500 0.3248 7.8748 1.0000 0.6009 0.03452009 2010 8.0739 0.3836 8.4575 1.0000 0.6898 0.03452010 2011 8.0739 0.4426 8.5165 1.0000 0.7513 0.03452011 2012 8.0739 0.1932 8.2671 1.0000 0.7475 0.03452012 2013 8.3465 0.2004 8.5469 1.0000 0.7300 0.03452013 2014 8.3465 0.1955 8.5420 1.0000 0.7025 0.03452014 2015 8.3465 0.1838 8.5303 1.0000 0.6745 0.03452015 2016 8.3465 0.163 8.5095 1.0000 0.6677 0.03202016 2017 8.3465 0.1481 8.4946 1.0000 0.6833 0.0320


(2) Pursuant to a voter-approved special millage levy beginning in calendar year 1987.


(1) All millage rates are based on $1.00 for every $1,000.00 of assessed value. Millages included here are only for those that are assessed city-wide, with the exception being the DDA.

CONTINUING DISCLOSURE: GENERAL OBLIGATION BONDS

PROPERTY TAX RATES-DIRECT AND OVERLAPPING GOVERNMENTS


(UNAUDITED)

C-39

South FloridaPalm Beach Water Health

Palm Beach County Management Everglades Care TotalCounty School Board District Construction District (1)

3.9813 7.3560 0.5346 0.0894 0.8900 22.45643.9656 7.2510 0.5346 0.0894 0.9975 22.34834.5614 7.9830 0.5346 0.0894 1.1451 24.49534.9960 8.1540 0.5346 0.0894 1.1451 25.22144.9925 8.1800 0.3739 0.0624 1.1250 24.78294.9902 7.7780 0.3676 0.0613 1.1220 24.63054.9852 7.5860 0.3523 0.0587 1.0800 24.34124.9729 7.5940 0.3294 0.0548 1.0800 24.27044.9277 7.5120 0.1459 0.0506 1.0426 23.88804.9142 7.0700 0.1359 0.0471 0.8993 23.2764

C-40

Fiscal

Year Gross Outstanding

Ended Population Assessed Gross Bonded Notes Revenue

September 30 (1) Value Debt Payable Bonds

2007 105,068 16,897,209,483$ 23,965,000$ 34,153,727$ 182,735,000$ 2008 103,663 17,486,232,823 21,065,000 28,504,997 177,660,0002009 103,150 17,431,206,297 18,045,000 25,508,391 172,350,0002010 102,475 13,833,787,688 14,885,000 8,279,923 180,838,5832011 99,919 11,493,590,912 11,605,000 7,583,585 172,900,8452012 101,043 11,019,154,187 10,510,000 6,864,930 165,468,8362013 101,903 10,682,250,212 9,380,000 6,122,026 157,646,1622014 102,436 10,939,024,360 8,215,000 17,228,987 148,417,3392015 104,031 12,779,662,065 7,000,000 12,654,303 142,849,6862016 106,779 13,995,241,247 5,725,000 12,061,934 215,596,625

Source - City of West Palm Beach Finance Department and the Palm Beach County Property Appraiser's Office.

(1) Population figures for 2004-2013 are as per Bureau of Economic and Business Research, University of Florida.

Population figures for 2014-Current are as of US Census Bureau.


(UNAUDITED)


RATIO OF NET GENERAL BONDED DEBT AND NOTES PAYABLE

TO ASSESSED VALUE AND NET BONDED DEBT PER CAPITA

C-41

Less Amount Ratio

Available in of Net Net

the General Debt to Debt

Capital Debt Service Net Assessed Per

Leases Fund Debt Value Capita

2,564,277$ (2,650,006)$ 240,767,998$ 1.42% 2,292$ 2,088,083 (2,530,435) 226,787,645 1.30% 2,188 1,590,633 (2,466,570) 215,027,454 1.23% 2,085 1,295,440 (1,714,900) 203,584,046 1.47% 1,987

989,077 (1,712,598) 191,365,909 1.66% 1,915 10,192,168 (1,775,868) 191,260,066 1.74% 1,893 10,773,461 (1,804,849) 182,116,800 1.70% 1,787

9,588,753 (1,804,849) 181,645,230 1.66% 1,773 8,589,096 (2,921,514) 168,171,571 1.32% 1,617

12,866,817 (2,109,697) 244,140,679 1.74% 2,286

C-42

GovermentalDebt

Outstanding

Percentage Applicable to City of West Palm Beach

Amount Applicable to City of West Palm Beach

City of West Palm Beach (1)

Total bonds (2) 238,193,970$

Promissory notes, govermental funds 12,061,934

Promissory notes, internal service funds 10,605,885

Capital leases 12,673,165

Total direct debt 273,534,954 100.00% (5) 273,534,954$

Palm Beach County (3) 1,172,262,227 7.00% (5) 82,058,356

School Board (4) 14,868,000 7.00% (5) 1,040,760

Total overlapping debt 83,099,116

Total direct and overlapping debt 356,634,070$

(1) Source - City of West Palm Beach Finance Department. Government debt rollforward.

(2) Includes premium and discounts.

(3) Source - Palm Beach County Finance Department.

(4) Source - Palm Beach County School Board.

(5) Percentage applicable based on total assessed value for the City of West Palm Beach and Palm Beach County.


COMPUTATION OF DIRECT AND OVERLAPPING DEBT

SEPTEMBER 30, 2016

(UNAUDITED)

C-43

Fiscal TotalYear Annual Debt Service Expenditures General Fund

Ended Total ExpendituresSeptember 30 Principal Interest (1) (2)

2007 2,770,000$ 1,028,639$ 3,798,639$ 133,228,274$ 2008 2,900,000 907,435 3,807,435 135,184,997 2009 3,020,000 787,865 3,807,865 134,218,541 2010 3,160,000 666,615 3,826,615 131,491,267 2011 3,280,000 539,343 3,819,343 124,206,251 2012 1,095,000 457,630 1,552,630 123,009,497 2013 1,130,000 423,001 1,553,001 125,035,431 2014 1,165,000 386,123 1,551,123 131,227,410 2015 1,215,000 336,525 1,551,525 130,322,674 2016 1,275,000 274,275 1,549,275 139,286,294


(1) Includes general obligation bonded debt only.(2) Includes General Fund only, GAAP basis.

Service to

Expenditures

2.9%

2.8%

General Fund

FOR THE LAST TEN FISCAL YEARS(UNAUDITED)

Ratio of Debt


RATIO OF ANNUAL DEBT SERVICE EXPENDITURES FORGENERAL BONDED DEBT TO TOTAL GENERAL FUND EXPENDITURES

1.1%

1.2%1.2%

2.8%

3.1%

1.2%

2.9%

1.3%

C-44

REPORTING SECTION

1

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

Independent Auditor’s Report To the Honorable Mayor, Members of the City Commission and Audit Committee City of West Palm Beach, Florida We have audited, in accordance with the auditing standards generally accepted in the United States of America and the standards applicable to financial audits contained in Government Auditing Standards issued by the Comptroller General of the United States, the financial statements of the governmental activities, the business-type activities, each major fund and the aggregate remaining fund information of the City of West Palm Beach, Florida (the City), as of and for the year ended September 30, 2016, and the related notes to the financial statements, which collectively comprise the City’s basic financial statements, and have issued our report thereon dated May 30, 2017. Our report includes a reference to other auditors who audited the financial statements of the Firefighter’s Pension Fund, the Police Pension fund, and the Restated Employees’ Defined Benefit Retirement System, as described in our report on the City’s financial statements. This report does not include the results of the other auditors’ testing on internal control over financial reporting or compliance and other matters that are reported on separately by those auditors. The financial statements of the Firefighters’ Pension Fund and the financial statements of the Police Pension Fund were not audited in accordance with Government Auditing Standards. Internal Control over Financial Reporting In planning and performing our audit of the financial statements, we considered the City’s internal control over financial reporting (internal control) to determine the audit procedures that are appropriate in the circumstances for the purpose of expressing our opinion on the financial statements, but not for the purpose of expressing an opinion on the effectiveness of the City’s internal control. Accordingly, we do not express an opinion on the effectiveness of the City’s internal control. A deficiency in internal control exists when the design or operation of a control does not allow management or employees, in the normal course of performing their assigned functions, to prevent, or detect and correct, misstatements on a timely basis. A material weakness is a deficiency, or a combination of deficiencies, in internal control, such that there is a reasonable possibility that a material misstatement of the entity’s financial statements will not be prevented, or detected and corrected on a timely basis. A significant deficiency is a deficiency, or a combination of deficiencies, in internal control that is less severe than a material weakness, yet important enough to merit attention by those charged with governance.

2

Our consideration of internal control was for the limited purpose described in the first paragraph of this section and was not designed to identify all deficiencies in internal control that might be material weaknesses or significant deficiencies. Given these limitations, during our audit we did not identify any deficiencies in internal control that we consider to be material weaknesses. However, material weaknesses may exist that have not been identified. Compliance and Other Matters As part of obtaining reasonable assurance about whether the City’s financial statements are free from material misstatement, we performed tests of its compliance with certain provisions of laws, regulations, contracts and grant agreements, noncompliance with which could have a direct and material effect on the determination of financial statement amounts. However, providing an opinion on compliance with those provisions was not an objective of our audit, and accordingly, we do not express such an opinion. The results of our tests disclosed no instances of noncompliance or other matters that are required to be reported under Government Auditing Standards. Purpose of this Report The purpose of this report is solely to describe the scope of our testing of internal control and compliance and the results of that testing, and not to provide an opinion on the effectiveness of the City’s internal control or on compliance. This report is an integral part of an audit performed in accordance with Government Auditing Standards in considering the City’s internal control and compliance. Accordingly, this communication is not suitable for any other purpose.

May 30, 2017 West Palm Beach, Florida

3

Report On Compliance For Each Major Federal Program and Report On Internal Control Over Compliance Required by the Uniform Guidance

Independent Auditors’ Report

To the Honorable Mayor, Members of the City Commission and Audit Committee City of West Palm Beach, Florida Report on Compliance for Each Major Federal Program We have audited the City of West Palm Beach, Florida’s (the City) compliance with the types of compliance requirements described in the OMB Compliance Supplement that could have a direct and material effect on the City’s major federal programs for the year ended September 30, 2016. The City’s major federal programs are identified in the summary of auditor’s results section of the accompanying schedule of findings and questioned costs. Management’s Responsibility Management is responsible for compliance with federal statutes, regulations and the terms and conditions of its federal awards applicable to its federal programs. Auditor’s Responsibility Our responsibility is to express an opinion on compliance for the City’s major federal programs based on our audit of the types of compliance requirements referred to above. 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; and the audit requirements of Title 2 U.S. Code of Federal Regulations Part 200, Uniform Administrative Requirements, Cost Principles, and Audit Requirements for Federal Awards (Uniform Guidance). Those standards and the Uniform Guidance 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’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 on compliance for the major federal programs. However, our audit does not provide a legal determination of the City’s compliance. Opinion on Major Federal Program In our opinion, the City complied, in all material respects, with the types of compliance requirements referred to above that could have a direct and material effect on its major federal programs for the year ended September 30, 2016.

4

Other Matters The results of our auditing procedures disclosed instances of noncompliance, which are required to be reported in accordance with the Uniform Guidance and which are described in the accompanying schedule of findings and questioned costs as items 2016-002 and 2016-003. Our opinion on each major federal program is not modified with respect to this matter. The City’s response to the noncompliance findings identified in our audit is described in the accompanying schedule of findings and questioned costs. The City’s response was not subjected to the auditing procedures applied in the audit of compliance and, accordingly, we express no opinion on the response. Report on Internal Control Over Compliance Management of the City is responsible for establishing and maintaining effective internal control over compliance with the types of compliance requirements referred to above. In planning and performing our audit of compliance, we considered the City’s internal control over compliance with the types of requirements that could have a direct and material effect on the major federal programs to determine the auditing procedures that are appropriate in the circumstances for the purpose of expressing an opinion on compliance for the major federal programs and to test and report on internal control over compliance in accordance with Uniform Guidance, but not for the purpose of expressing an opinion on the effectiveness of internal control over compliance. Accordingly, we do not express an opinion on the effectiveness of the City’s internal control over compliance. A deficiency in internal control over compliance exists when the design or operation of a control over compliance does not allow management or employees, in the normal course of performing their assigned functions, to prevent, or detect and correct, noncompliance with a type of compliance requirement of a federal program on a timely basis. A material weakness in internal control over compliance is a deficiency, or combination of deficiencies, in internal control over compliance, such that there is a reasonable possibility that material noncompliance with a type of compliance requirement of a federal program will not be prevented, or detected and corrected, on a timely basis. A significant deficiency in internal control over compliance is a deficiency, or a combination of deficiencies, in internal control over compliance with a type of compliance requirement of a federal program that is less severe than a material weakness in internal control over compliance, yet important enough to merit attention by those charged with governance. Our consideration of internal control over compliance was for the limited purpose described in the first paragraph of this section and was not designed to identify all deficiencies in internal control over compliance that might be material weaknesses or significant deficiencies. We did not identify any deficiencies in internal control over compliance that we consider to be material weaknesses. However, we identified a deficiency in internal control over compliance, as described in the accompanying schedule of findings and questioned costs as item 2016-001 that we consider to be a significant deficiency. The City’s response to the internal control over compliance finding identified in our audit is described in the accompanying schedule of findings and questioned costs. The City’s response was not subjected to the auditing procedures applied in the audit of compliance and, accordingly, we express no opinion on the response. The purpose of this report on internal control over compliance is solely to describe the scope of our testing of internal control over compliance and the results of that testing based on the requirements of the Uniform Guidance. Accordingly, this report is not suitable for any other purpose.

May 30, 2017 West Palm Beach, Florida

5

City of West Palm Beach, FloridaSchedule of Expenditures of Federal Awards

Fiscal Year Ended September 30, 2016

CFDA Contract / Grant Transfers Federal Agency, Pass-through Entity, Federal Program Number Number Expenditures to SubrecipientsU.S. Department of Housing and Urban Development:

Direct:

Community Development Block Grant (CDBG) 14.218B-12-MC-13-0022 through

B-15-MC-12-0022 1,040,971 $ 85,694 $ Community Development Block Grant (CDBG) – NSP3 14.218 B-10-MC-12-0022 34,635 -

Total CDBG Entitlement Grants Cluster 1,075,606 85,694

Home Investment Partnership Program Grant 14.239M-12-MC-12-0224 through

M-15-MC-12-0224 272,353 -

Housing Opportunity for People with AIDS (HOPWA) Grant 14.241FL-H-13-F-006 through FL-

H-15-F-006 3,159,982 3,068,877 Total U.S. Department of Housing and Urban Development 4,507,941 3,154,571

U.S. Department of Homeland Security:Direct:Assistance to Firefighters 97.044 EMW-2014-FO-01494 1,149,213 -

Staffing for Adequate Fire & Emergency Response (SAFER II) – Hiring 97.083 EMW-2013-FH-00285 550,121 - Staffing for Adequate Fire & Emergency Response (SAFER III) – Hiring 97.083 EMW-2014-FH-00649 758,345 -

Total SAFER 1,308,466 -

Total U.S. Department of Homeland Security 2,457,679 -

U.S. Department of Justice:Direct:Forfeiture Equitable Sharing Program 16.922 NA 94,126 - COPS Hiring Program Grant 16.710 2013-UM-WX-0071 424,659 -

Justice Assistance Grant 16.738 2013-DJ-BX-0296 30,069 - Justice Assistance Grant 16.738 2015-DJ-BX-0785 52,437 -

Total Justice Assistance Grant 82,506 -

Total U.S. Department of Justice 601,291 -

Department of the Treasury:Direct:Treasury Forfeiture Fund Program 21.000 NA 138,505 -

Total Department of the Treasury 138,505 -

U.S. Department of Transportation:Highway Planning and Construction Cluster:Federal Highway Administration (FHWA)Passed Through Florida Department of Transportation (FDOT):

High Visibility Enforcement Program 20.205 NA 17,710 - 15th Street Bike/Pedestrian Streetscape 20.205 FPN No. 431652-1-58-01 841,652 -

Tamarind North (PBLakes Blvd to 25th Street) 20.205FPN No. 429665-1-58-01 &

429665-1-68-01 253,461 - Subtotal Highway Planning and Construction Cluster Passed Through Florida Department of Transportation (FDOT) 1,112,823 -

Federal Transit Administration (FTA)Direct:Federal Transit Cluster - Construction of Trolley Shelters 20.500 FL-04-0067-00 76,970 -

Transit Services Programs Cluster - Passed Through South Florida Regional Transportation Authority (SFRTA):

Trolley Job Access and Reverse Commute Program (JARC II ) 20.516 FL-37-X072-00 249,838 - Subtotal Transit Services Programs Cluster Passed Through South Florida Regional Transportation Authority (SFRTA)

249,838

Total U.S. Department of Transportation 1,439,631 -

(Continued)

6

City of West Palm Beach, FloridaSchedule of Expenditures of Federal Awards (Continued)

Fiscal Year Ended September 30, 2016

CFDA Contract / Grant Transfers Federal Agency, Pass-through Entity, Federal Program Number Number Expenditures to Subrecipients

U.S. Department of Agriculture:Direct:Childcare Food Program (CCFP) 10.558 NA 74,250 -

Total U.S. Department of Agriculture 74,250 -

U.S. Department of Health and Human Services:Direct:Minority Youth Violence Prevention (PATHWAY) 93.910 1 YEPMP140084-01-00 341,511 -

Total U.S. Department of Health and Human Services 341,511 -

U.S. Department of Environmental Protection Agency (EPA):Direct:Brownfields Program 66.818 BF-00D12713-0 109,000 -

Total U.S. Department of Environmental Protection 109,000 -

Total Expenditures of Federal Awards 9,669,808 $ 3,154,571 $

NA – Not ApplicableSee Notes to Schedules of Expenditures of Federal Awards.

City of West Palm Beach, Florida Notes to Schedules of Expenditures of Federal Awards

7

(1) Basis of Presentation The accompanying Schedules of Expenditures of Federal Awards and State Financial Assistance (the Schedules) presents the activity of all federal awards and state financial assistance of the City of West Palm Beach, Florida (the City) for the year ended September 30, 2016. The information in the Schedules are presented in accordance with the requirements of Title 2 U.S. Code of Federal Regulations Part 200, Uniform Administrative Requirements, Cost Principles, and Audit Requirements for Federal Awards (Uniform Guidance). Because the Schedules present only a selected portion of the operations of the City, they are not intended to and do not present the financial position, changes in net positions, or cash flows of the City. The City’s reporting entity is defined in Note A to the City’s basic financial statements. (2) Summary of Significant Accounting Policies The Schedules are presented using the modified accrual basis of accounting for expenditures accounted for in the governmental funds and on the accrual basis of accounting for expenses of the proprietary fund types, which are described in Note A to the City’s basic financial statements. Such expenditures are recognized following the cost principles contained in the Uniform Guidance, wherein certain types of expenditures are not allowable or are limited as to reimbursement. (3) Indirect Cost Recovery The City did not recover its indirect costs using the 10% de minimis indirect cost rate provided under Section 200.414 of the Uniform Guidance.

City of West Palm Beach, Florida Schedule of Findings and Questioned Costs

8

I - Summary of Independent Auditor's Results

Financial Statements

Type of auditor's report issued:

Internal control over financial reporting:

Material weakness(es) identified? Yes X No

Significant deficiency(ies) identified that are

not considered to be material weakness(es)? Yes X None Reported

Noncompliance material to financial statements

noted? Yes X No

Federal Awards

Internal control over major program:

Material weakness(es) identified? Yes X No

Significant deficiency(ies) identified not

considered to be material weakness(es)? X Yes No

Type of auditor's report issued on compliance for

major program:

Any audit findings disclosed that are required

to be reported in accordance with Section

2 CFR 200.516(a)? X Yes No

Identification of major program:

CFDA Number

97.044

97.083

Dollar threshold used to distinguish between type

A and type B programs:

Auditee qualified as low-risk auditee? X Yes No

(Continued)

Unmodified

Unmodified

Name of Federal Program or Cluster

750,000 $

Assistance to Firefighters

Staffing for Adequate Fire & Emergency Response

City of West Palm Beach, Florida Schedule of Findings and Questioned Costs (Continued)

9

Section II – Financial Statement Findings No material weaknesses or significant deficiencies reported. Section III – Federal Awards Findings and Questioned Costs A. Internal Control Over Compliance

2016-001 Reporting Department of Homeland Security: Federal Emergency Management Agency (FEMA) – Staffing For Adequate Fire & Emergency Response (SAFER II) – Hiring (CFDA No. 97.083) Staffing For Adequate Fire & Emergency Response (SAFER III) – Hiring (CFDA No. 97.083) Criteria: The City’s internal control over the quarterly performance report is to have the grant administrator review reports for accuracy and completeness prior to submission to grantor. Condition: The City was unable to provide evidence that a review took place for all 4 quarterly performance reports tested prior to submission to the grantor. Questioned costs: Not applicable. Context: This condition is considered to be systemic in nature. Effect: Failure to review information prior to submission to the grantor could lead to inaccurate and/or incomplete information being submitted. Cause: The City’s control over this grant’s reporting requirement were not operating effectively. Recommendation: We recommend that City personnel in charge of administering grant compliance, review the City’s internal control policies to help ensure that all reports are reviewed prior to submission to grantors. View of responsible officials and planned corrective action: • All Fire Department Senior Staff will meet with the Finance Department’s accounting division to

review current City Grant Policies and Procedures. • A tracking system will be utilized to monitor the timely submission of required reports.

• The Fire Department grant administrator will provide a copy of required reports to the Finance Department’s accounting division to ensure compliance.

The City of West Palm Beach, Florida Schedule of Findings and Questioned Costs (Continued)

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B. Compliance

2016-002 Reporting Department of Homeland Security: Federal Emergency Management Agency (FEMA) – Staffing For Adequate Fire & Emergency Response (SAFER II) – Hiring (CFDA No. 97.083) Staffing For Adequate Fire & Emergency Response (SAFER III) – Hiring (CFDA No. 97.083) Criteria: FEMA program performance reporting requirements states quarterly performance reports are due within 30 days of the end of each of the grant’s quarters. Article III of the grant agreement states the Federal Financial Report is due semi-annually based on the calendar year beginning with the period after the award is made. The reporting periods for the Federal Financial Report are January 1 – June 30 (report due by July 31) and July 1 through December 31 (report due by January 31). Condition: It was noted two out of four performance reports selected for testing were filed after the due date stipulated by the agency. It was also noted that one out of two federal financial reports selected for testing was submitted after the due date stipulated by the agency. Questioned costs: Undeterminable. Context: See condition above. Effect: Failure to submit reports within a timely manner could jeopardize the City’s ability to receive awarded grant funds as well as effect the City’s chances to receive further grant awards. Cause: The City did not follow policies and procedures regarding the timely filing of the reports. Recommendation: We recommend the City review its policies and procedures to ensure the required reports are filed within a timely manner as required by the granting agencies. The tracking system should be properly and timely monitored to help manage the timely submission of the reports. View of responsible officials and planned corrective action: • All Fire Department Senior Staff will meet with the Finance Department’s accounting division to



City of West Palm Beach, Florida Schedule of Findings and Questioned Costs (Continued)

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2016-003 Reporting Department of Homeland Security: Federal Emergency Management Agency (FEMA) – Assistance of Firefighters Grant (CFDA No. 97.044) Criteria: Article III of the grant agreement states the Federal Financial Report is due semi-annually based on the calendar year beginning with the period after the award is made. The reporting periods for the Federal Financial Report are January 1 – June 30 (report due by July 31) and July 1 through December 31 (report due by January 31). Condition: It was noted one report was filed after the due date stipulated by the agency. Questioned costs: Not applicable. Context: This condition appears to be isolated in nature. Effect: Failure to submit reports within a timely manner could jeopardize the City’s ability to receive awarded grant funds as well as effect the City’s chances to receive further grant awards. Cause: The City did not follow policies and procedures regarding the timely filing of the Report. Recommendation: We recommend the City implement policies and procedures to ensure the required reports are filed within a timely manner as required by the granting agencies. The tracking system should be properly and timely monitored to help manage the timely submission of the reports. View of responsible officials and planned corrective action: • All Fire Department Senior Staff will meet with the Finance Department’s accounting division to



City of West Palm Beach, Florida Summary Schedule of Prior Year Audit Findings For the Fiscal Year Ended September 30, 2016

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I – Financial Statement Findings

No material weaknesses or significant deficiencies reported.

II – Federal Awards Findings and Questioned Costs

None reported.

City of West Palm Beach, Florida Management Letter in Accordance With the Rules of the Auditor General of the State of Florida September 30, 2016

Contents

Management letter in accordance with the Rules of the Auditor General of the State of Florida

13-14

Index of current year observations and recommendations 15

Appendix A—Current year’s recommendations to improve financial management, accounting procedures and internal controls

16-23

13

Management Letter in Accordance With the Rules of the Auditor General of the State of Florida

To the Honorable Mayor, Members of the City Commission and Audit Committee City of West Palm Beach, Florida Report on the Financial Statements We have audited the financial statements of the governmental activities, the business-type activities, each major fund and the aggregate remaining fund information of the City of West Palm Beach, Florida (the City), as of and for the year ended September 30, 2016, and have issued our report thereon dated May 30, 2017. We did not audit the financial statements of the Firefighters' Pension Fund, the Police Pension Fund, and the Restated Employees’ Defined Benefit Retirement System, which represent 80% of the assets/deferred outflows, 86% of the fund balance/net position and 56% of the revenues/additions of the aggregate remaining fund information. Those financial statements were audited by other auditors whose reports have been furnished to us, and our opinion, insofar as it relates to the amounts included for the Firefighters’ Pension Fund, the Police Pension Fund, and the Restated Employees’ Defined Benefit Retirement System are based upon the reports of the other auditors. Our report does not address their respective internal control or compliance. Auditor’s Responsibility We conducted our audit in accordance with auditing standards generally accepted in the United States of America; the standards applicable to financial audits contained in Government Auditing Standards, issued by the Comptroller General of the United States; the audit requirements of Title 2 U.S. Code of Federal Regulations Part 200, Uniform Administrative Requirements, Cost Principles, and Audit Requirements of Federal Awards (Uniform Guidance) and the Chapter 10.550, Rules of the Florida Auditor General. Other Reports and Schedule We have issued our Independent Auditor’s Report on Internal Control Over Financial Reporting and on Compliance and Other Matters Based on an Audit of Financial Statements Performed in Accordance with Government Auditing Standards; Independent Auditor’s Report on Compliance For Each Major Federal Program and Report on Internal Control Over Compliance in Accordance With the Uniform Guidance; the Schedule of Findings and Questioned Costs and our Independent Accountant’s Report on an examination conducted in accordance with AICPA Standards for Attestation Engagements, Section 601, regarding compliance requirements in accordance with Chapter 10.550, Rules of the Auditor General. Disclosures in those reports and schedule, which are dated May 30, 2017, should be considered in conjunction with this management letter. Prior Audit Findings Section 10.554(1)(i)1., Rules of the Auditor General, requires that we determine whether or not corrective actions have been taken to address findings and recommendations made in the preceding annual financial audit report. There were no prior audit findings and recommendations.

14

Official Title and Legal Authority Section 10.554(1)(i)4., Rules of the Auditor General , requires that the name or official title and legal authority for the primary government and each component unit of the reporting entity be disclosed in this management letter, unless disclosed in the notes to the financial statements. The information is disclosed in Note A1 to the financial statements. Financial Condition Section 10.554(1)(i)5.a and 10.556(7), Rules of the Auditor General, requires that we report the results of our determination as to whether or not the City has met one or more of the conditions described in Section 218.503(1), Florida Statutes, and identification of the specific condition(s) met. In connection with our audit, we determined that the City did not meet any of the conditions described in Section 218.503(1), Florida Statutes. Pursuant to Sections 10.554(1)(i)5.c. and 10.556(8), Rules of the Auditor General, we applied financial condition assessment procedures. It is management’s responsibility to monitor the City’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. Annual Financial Report Section 10.554(1)(i)5.b and 10.556(7), Rules of the Auditor General, requires that we report the results of our determination as to whether the annual financial report for the City for the fiscal year ended September 30, 2016, filed with the Florida Department of Financial Services pursuant to Section 218.32(1)(a), Florida Statutes, is in agreement with the annual financial audit report for the fiscal year ended September 30, 2016. In connection with our audit, we determined that these two reports were in agreement. Other Matters Section 10.554(1)(i)2., Rules of the Auditor General, requires that we address in the management letter any recommendations to improve financial management. The recommendations to improve the City’s financial management have been addressed in “Current Year’s Recommendations to Improve Financial Management, Accounting Procedures and Internal Controls” in Appendix A to this report. The City’s responses to the recommendations to improve the City’s financial management have been addressed in “Current Year’s Recommendations to Improve Financial Management, Accounting Procedures and Internal Controls” in Appendix A to this report. Section 10.554(1)(i)3., Rules of the Auditor General, requires that we address noncompliance with provisions of contracts or grant agreements, or abuse, that have occurred, or are likely to have occurred, that have an effect on the financial statements that is less than material but which warrants the attention of those charged with governance. In connection with our audit, we did not have any such findings. Purpose of This Letter Our management letter is intended solely for the information and use of the Legislative Auditing Committee, members of the Florida Senate and the Florida House of Representatives, the Florida Auditor General, Federal and other granting agencies, City Commissioners and applicable management, and is not intended to be and should not be used by anyone other than these specified parties.

West Palm Beach, Florida May 30, 2017

City of West Palm Beach, Florida Index of Current Year Observations and Recommendations

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No. Current Year’s Observations and Recommendations2016-01 Supervisory approval of employee timecards2016-02 Depreciation – Quarterly Convention and placed in service policy2016-03 Post-Closing and Financial Reporting Process2016-04 Investment Rate of Return

2016-05 User Access Provisioning and Modifications

2016-06 User Access Review

2016-07 Data Recovery Testing

2016-08 Change Management Testing and Approvals

City of West Palm Beach, Florida

Appendix A—Current Year’s Recommendations to Improve Financial Management, Accounting Procedures and Internal Controls

16

ML 2016-01

Supervisory Approval of Employee Timecards

Criteria: The City’s internal control policies and procedures require all Department Managers to electronically review and approve each employee’s timecard between the pay period end date (Friday) and the payroll period close date (the following Monday at 12:00 p.m.) in Kronos.

Condition: It was noted three out of twelve employee timecards selected for testing were not approved by the Department Manager in Kronos prior to processing for the following departments: Drainage, WTR Treatment Plant and Criminal Investigation.

Context: This condition is considered to be systemic in nature.

Effect: Failure to review employee timecards may lead to inaccurate processing of payroll for any pay period.

Cause: The City did not follow its policies and procedures in reviewing timecards prior to processing payroll. The payroll was processed without first obtaining evidence of proper approval.

Recommendation: We recommend that the City review its policies and procedures in place with both payroll processing personnel and the departments to help ensure all payroll transactions are properly approved and accurately recorded.

Views of Responsible Officials and Planned Corrective Action: We agree that the City did not follow its policies and procedures to ensure all payroll transactions are properly approved and accurately recorded. The Finance Department is currently reviewing and revising processes for payroll and the issue of approvals will be addressed.


Appendix A—Current Year’s Recommendations to Improve Financial Management, Accounting Procedures and Internal Controls (Continued)

17

ML 2016-02

Depreciation – Quarterly Convention and placed in service policy

Criteria: The City does not have a formal policy in place that determines the placed in service date. In addition, all assets placed in service are depreciated on a quarterly basis.

Condition: It was noted the basis of determining the placed in service date was not consistent through all ten items selected for testing. In addition, the City recognized additional depreciation expense for the year as a result of the quarterly convention method being followed. This resulted in depreciation being recorded on assets before they were actually placed into service and used. For example, an asset acquired on January 27, 2016 was given an effective date of December 31, 2015, which resulted in an additional quarter of depreciation for the asset.

Context: This condition is considered to be systemic in nature.

Effect: Lack of a formal policy determining the placed in service date results in varying starting points for depreciation to begin which leads to more or less depreciation expense being recognized in the fiscal year. An organization may elect to define a consistent time for adding capital assets to their system throughout the fiscal year but that timing should never be before the asset is actually acquired or placed into service.

Cause: The City does not have a policy in place to follow in determining the placed in service date. In addition, the City’s current quarterly convention method lead to misstatements of depreciation expense in the fiscal year which were adjusted and corrected.

Recommendation: We recommend that the City establish policies and procedures to determine the placed in service date for all capital assets. In addition, we recommend the City review its present quarterly convention method. The City should not recognize depreciation expense before assets are physically received and placed into service.

Views of Responsible Officials and Planned Corrective Action: We agree that the current system could lead to more or less depreciation for the first year that an asset is in-service. We will investigate the setup of the capital asset system and will determine what options are available to affect an improvement in the system.


Appendix A—Current Year’s Recommendations to Improve Financial Management, Accounting Procedures and Internal Controls (Continued)

18

ML 2016-03

Post-Closing and Financial Reporting Process

Criteria: Internal control policies and procedures in place should provide reasonable assurance that all accounting transactions have been properly recorded. As part of this system, the monthly review and analysis of account balances and transactions should be strictly complied with to ensure that everything is being processed accurately and timely.

Condition: Material post-closing adjustments were made to the trial balance in order to report in accordance with accounting principles generally accepted in the United States (GAAP).

Context: The finding is considered systemic in nature.

Effect: Failure to implement strong internal control policies and procedures for financial reporting could result in potential misstatements in the financial statements that are not properly and timely detected.

Cause: Lack of accurate and timely reconciliation of accounting transactions and balances during the post-closing and financial reporting process.

Recommendation: We recommend that the City review its present policies and procedures over accounting and financial reporting and implement additional procedures which may include but not be limited to the following:

• Preparation of monthly or quarterly analysis and reconciliation of significant account balances andreview of transactions recorded in the general ledger.

• Provide timely training and continuing education to accounting and finance staff to keep themupdated with changes in governmental accounting standards and increase the depth of resourcescapable of assisting with the preparation of these documents.

Views of Responsible Officials and Planned Corrective Action: We agree that the current process could result in potential misstatements in the financial statements that are not properly and timely detected. We will determine a process for the reconciliation of general ledger funds and accounts and will develop a timeline for completing this reconciliation on a consistent basis.

City of West Palm Beach, Florida Appendix A—Current Year’s Recommendations to Improve Financial Management, Accounting Procedures and Internal Controls (Continued)

19

2016-04 – Investment Rate of Return Criteria: The investment rate of return used for the valuation of the net pension liability should be consistent with the long-term expected rate of return. Condition: The City’s investment rate of return, which is being used by their independent actuary, serves as a component in the computation of the net pension liability; however, the investment rate of return used by the City’s actuary is not consistent with the long-term expected rates of return on the City’s investments for all three of the City’s pension plans. Cause: The investment rate of return of 8% used for calculating the net pension liability is not consistent with the long-term expected rates of return. Effect: Failure to use an appropriate rate could lead to an error in estimating the City’s net pension liability. Recommendation: We recommend that the City collaborate with their actuary and the pension boards for each plan, to assess the investment rate of return used for calculating their net pension liability to ensure that the rate is consistent with the long-term expected rate of return. Although the net pension liability is long-term in nature, management should review its recent investment returns and the projected expected long-term rate of return to help ensure that the investment rate of return is properly selected. Views of Responsible Officials and Planned Corrective Actions: We agree that the investment rate of return used in the calculation of net pension liability should be consistent with the long-term expected rate of return on pension assets. The pension trustees make the decision on the investment rate of return with the assistance of their actuaries. The City does consult, but in most cases does not decide the rates for each pension board. All boards have discussed the rates this year and have decided that where they are is the most appropriate rate at this time.


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2016-05 – User Access Provisioning and Modifications Criteria: Procedures are in place so that user accounts are added, modified and deleted in a timely manner to reduce the risk of unauthorized/inappropriate access to the organization’s relevant financial reporting applications or data. Condition: Of the five samples selected for new hire testing and all modifications (transfers) all requests did not follow the procedures in place. User access provisioning and modification requests were not consistently documented during FY’16. Cause: Approvals for user access provisioning and modification requests were done verbally and not documented in email or a ticketing system in FY’16. Effect: Risks include unauthorized usage, damage or misuse of IT resources. Recommendation: User access provisioning and modifications requests and approvals should be documented in a ticketing system or via email. Views of Responsible Officials and Planned Corrective Actions: We agree with this recommendation and have implemented this process. Beginning FY’17 user access requests are tracked in the City’s Solarwinds ticketing system. Supervisors are required to submit a ticket with access modification information which is then processed by authorized IT staff after verifying the request details. Human Resources also distributes weekly communications listing terminated employees, which is reviewed by an IT staff member. If any discrepancies are found staff immediately takes appropriate action to disable the account. This action is also tracked in the City’s Solarwinds ticketing system.


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2016-06 – User Access Review Criteria: Access rights to the organization’s relevant financial reporting applications or data are monitored periodically by management. Condition: The user access reviews were not performed for Oracle eBusiness Suite, Oracle CC&B or the network during FY’16. Cause: User access reviews were not completed in FY’16. Effect: Risks include unauthorized usage, damage or misuse of IT resources. Recommendation: User access reviews should be completed for systems with an impact on financial reporting at least annually. Views of Responsible Officials and Planned Corrective Actions: We partially agree with the recommendation. When an employee leaves the organization, their access to the Oracle applications is immediately terminated and the account is locked. The current workflow was designed to ensure that the concept of unauthorized usage, damage or misuse of the application does not arise therefore eliminating the risk for unauthorized usage, damage or misuse of IT resources. The user “responsibilities” or “roles” as they are called in eBusiness suite and CC&B are granted based upon the user’s role in the organization. Users cannot change their roles by themselves. Any change in regards to user account access has to come as a notification from the corresponding Manager/Director to the application administrator who then grants/revokes the additional access. We do agree that scheduled reviews would add additional compliance and will add this task to our process.


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2016-07 – Data Recovery Testing Criteria: Data recovery testing is performed periodically to test the effectiveness of the restoration process and determine that data, transactions and programs that are necessary for financial reporting can be recovered. Condition: A full scale recovery test for Oracle eBusiness Suite, Oracle CC&B and the network was not performed in FY’16. A full restoration has not been performed in at least two years. Cause: A full scale recovery test was not completed in FY’16 for Oracle eBusiness Suite, Oracle CC&B and the network and testing of the viability of backups was only performed via the completion of ad hoc requests Effect: Risks include data loss, increased recovery time and financial loss. Recommendation: Data recovery testing should be documented and performed once a year to test the effectiveness of the restoration process and determine that data, transactions and programs that are necessary for financial reporting can be recovered. Views of Responsible Officials and Planned Corrective Actions: We agree with this recommendation. The IT Department is implementing an internal policy defining backup testing and related logging requirements. Per the policy backup data recovery testing across all platforms will be carried out on, at a minimum, an annual basis to ensure that data restores are reliable. Results of those test will be documented for historical and auditing purposes. Please note that the City will be using the Oracle Disaster Recovery Cloud solution for the replication, backup and recovery of the Oracle eBusiness and CC&B applications in FY’17.


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2016-08 – Change Management Testing and Approvals Criteria: Controls are in place to ensure that any changes to the systems/applications providing control over financial reporting are authorized by an appropriate level of management, tested, validated and approved prior to being placed into production. Condition: Approvals to migrate changes to production were given verbally but not formally documented and evidence of testing was not documented for all changes. Cause: Evidence of approvals and testing of changes was not consistently documented. Effect: Risks include unauthorized changes and unexpected system outages/downtime caused by untested or unapproved changes. Recommendation: Clear evidence of testing and approval of changes should be documented in each change ticket for audit and reporting purposes. Views of Responsible Officials and Planned Corrective Actions: We agree with this recommendation. Beginning in FY’ 17 the IT Department instituted a Request for Change’s (RFCs) process that is tracked in the City’s Solarwinds ticketing system. RFCs are reviewed by IT Management and the approval or denial is logged in the ticket. The RFC ticket includes a description of work, possible risks, personnel involved and a testing plan. After the change is made the ticket is updated with a description of the outcome and test results before close out.

Independent Accountant's Report

The Honorable Mayor, Members of the

City Commission, and Audit Committee City of West Palm Beach, Florida We have examined the City of West Palm Beach, Florida’s (the City) compliance with Section 218.415, Florida Statutes, Local Government Investment Policies during the year ended September 30, 2016. Management is responsible for the City’s compliance with those requirements. Our responsibility is to express an opinion on the City’s compliance based on our examination. Our examination was conducted in accordance with attestation standards established by the American Institute of Certified Public Accountants and, accordingly, included examining, on a test basis, evidence about the City’s compliance with those requirements and performing such other procedures as we considered necessary in the circumstances. We believe that our examination provides a reasonable basis for our opinion. Our examination does not provide a legal determination on the City’s compliance with specified requirements. In our opinion, the City complied, in all material respects, with the aforementioned requirements for the year ended September 30, 2016.

This report is intended solely for the information and use of the Florida Auditor General, the Honorable Mayor, Members of the City Commission, the Audit Committee, and applicable management, and is not intended to be and should not be used by anyone other than these specified parties.

Fort Lauderdale, Florida May 30, 2017

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WEST PALM BEACH FIRE RESCUE DEPARTMENT

CORRECTIVE ACTION PLAN

Finding Number

PLANNED CORRECTIVE ACTION ANTICIPATED COMPLETION

DATE

RESPONSIBLE CONTACT PERSON

2016-01

Fire Administration will insist that on all future grant reporting, that all data needed to be used in preparation of grant reports is available.

July 2017

Diana Matty

2016-01

The grant report deadlines will be added into two calendars (Fire Chief’s Administrative Assistant and Fiscal Services Supervisor) along with reminders.

July 2017

Diana Matty

2016-01

Fire Administration has requested a fiscal services FTE position to be added in the FY 2018 budget. This position would allow restructuring of assignments within the Fire Department’s fiscal services to ensure that grant reporting is a primary job task.

October 2017

Diana Matty

2016-02


July 2017

Diana Matty

2016-02


July 2017

Diana Matty

2016-02


October 2017

Diana Matty

2016-03


July 2017

Diana Matty

2016-03


July 2017

Diana Matty

2016-03


October 2017

Diana Matty

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