1. Christopher M. Quinn, MACC, CPA, CFE, CGFO, CGMA Finance Director

3. Why the City uses Fund Accounting DO NOT TOUCH Restricted Fund Must Comply with Legal and External Requirements Some 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)

4.  Bond covenants restrict use of revenues  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

5. Comprehensive Annual Financial Report (CAFR) Prepared Annually Audited by independent, external audit firm hired by City Council  Required by State Statute Provides insight into how the City is managing finances and the financial health of the City Provides financial transparency Promotes accountability Annual Financial Audit Report

6. 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

7. Utility Financial Analysis

11. History of Rate Adjustments 2003 (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

12. Refinancing 2003 Bonds – Cost Savings due to reduced interest rates Capital Financial Program Addressing 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.

13. Questions ?