FINANCE DEPARTMENTChristopher M. Quinn, MACC, CPA, CFE, CGFO, CGMAFinance Director

Utility Capital Financing Plan

Government Accounting 101

• General Fund• Special Revenue Funds• Capital Project Funds

Governmental Funds

• Enterprise Funds• Internal Service Funds

Proprietary Funds

• Trust Funds• Agency Funds

Fiduciary Funds

Why the City uses Fund Accounting

DO NOT TOUCH Restricted Fund

Must Comply with Legal and External RequirementsSome Examples: Infrastructure Surtax (Capital Projects) Utility Revenues (Operation and

Expansion of Utility System) Impact Fees (Infrastructure Capacity

Improvements related to Growth) Grants (Specific Programs/Projects)

What is an Enterprise Fund?

Type of Proprietary Fund Operates like a business

Primarily funded through charges for services Services to external customers

Separate accounting and financial reporting Fund has its own set of “books”

Examples of Enterprise Funds

Utility FundStormwater FundSolid Waste FundGolf Course FundTennis Center FundBuilding Permits & Inspections FundIT&C Fund

Fund Restrictions Each enterprise fund has a separate

rate structure

Rates are reviewed to insure that adequate funding is available to meet the needs of that enterprise’s budgetary requirements

Reserves are planned to meet operating expenses and future capital needs

Bond covenants restrict use of revenuesLegally bindingProtect the bond holder

Treated like a separate business for accounting purposes

Financial statements are included in the annual audit report

Excess revenues (profits) are restricted from use in other areas of the City Re-invested back in the Utility

Utility Fund

Charges for Services 37.5%

Intergovernmen-tal Revenue

13.2%

Permits, Fees and Special As-sessments 1.4%

Local Business Tax 0.3%

Communications Services Taxes

2.0%

Local Option, Use and Fuel Taxes 2.0%

Ad Val-

orem Taxes 11.0%

Appropriated Fund Balance

9.9%

Transfers from Other Funds 2.4% Non Revenues 6.5%Debt Proceeds

12.3%Miscellaneous

Revenues 0.3%Interest and

Other Earnings 0.7%

Judgments, Fines & Forfeits

0.6%

Total City RevenuesFiscal Year 2013

City Ad Valorem Tax HistoryDeclining Ad Valorem Receipts

FY 2008 FY 2009 FY 2010 FY 2011 FY 2012 FY 2013$0

$5

$10

$15

$20

$25

$20.2$17.6 $18.0

$15.0 $15.0 $15.1

Year

$ (M

illio

ns)

Ad Val-orem Taxes

$15.1 Mil-lion

Services Provided through Property TaxesFiscal Year 2013

Fire Pro-tec-tion $7.3

M48.4%

Po-lice Pro-tec-tion $2.6

M17.2%

Street & Park Main-tenance $4.7M

31.1%

Cap-ital Projects$.5M

3.3%

Comprehensive Annual Financial Report (CAFR)Prepared AnnuallyAudited by independent, external audit firm

hired by City CouncilAudit is Required by State Statute

Provides insight into how the City is managing finances and the financial health of the City

Provides financial transparencyPromotes accountability

Annual Financial Audit Report

Where can it be found?On the City’s website under “Popular Links” then

“Financial Reports” www.palmcoastgov.com

Fiscal Year 2000 – 2012 is available

Filed with Florida Auditor General

Available for viewing on the Florida Auditor General’s website: www.myflorida.com/audgen

Annual Financial Audit Report

Summary of 2010-2012Total Operating ExpensesChange in Net Assets (net profit)Net Cash FlowUnrestricted Net Assets (reserves)

Utility Financial Performance

Utility Financial Analysis

Utility Financial Analysis

Utility Financial Analysis

Utility Financial Analysis

History of Rate Adjustments2003 (Purchase of Utility) through November 2008

No rate change

November 2008 12.5% increase to address capital needs including Water Treatment Plant 3

2009-2012 Consumer Pricing Index (CPI) adjustments only

Average 1.67% Included a decrease of 1.4% in 2009

Refinancing 2003 Bonds – Cost Savings due to reduced interest rates

Capital Financial ProgramAddressing 3 issues:

Provide capital funding needed for EPA required ZLD Project

Anticipated need for Waste Water Treatment Plant 2 which is in current 5 year capital improvement program.

Questions?