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FINANCIAL STATEMENTS-AUDITORS REPORT-INCOME STATEMENT FOR 12/03� , � , ' ' 1 ' �� ' ��I I,J , � I , I ' I ' ' � JOLLEY TROLLEY TRANSPORTATION OF CLEARWATER, INC. FINANCIAL STATEMENTS Years Ended September 30, 2003 and 2002 (With Independent Auditor's Report Thereon) JOLLEY TROLLEY TRANSPORTATION OF CLEARWATER, INC. TABLE OF CON7ENTS INDEPENDENT AUDITOR'S REPORT FINANCIAL. STATEMENTS Statements of Financial Position Statements of Activities Statements of Cash Flows Notes to Financial Statements PAGE 1 2 3 4 5 INDEPENDENT AUDITOR'S REPORT ON COMPLIANCE AND ON INTERNAL CON7ROL �VER FINANCIAL REPORTING BASED ON AN AUDIT OF FINANGIAL STATEMENTS PERFORMED IN ACCORDANCE WITH GOVERNMENT AUDITING STAIVDARDS 9 i ' , John J. McKnighl, Jr., CPA Robert P. Symanski, CPA , ' , I � J , ' , C� � , � � ' ' ' r ' Symanski O McKnight, P.A. Certified Public Accountants and Business Advisors INDEPENDENT AUDITOR'S REPORT To The Board of Directors Joiley Trolley Transportation of Clearwater, Inc. Members Floridu Insiilute Oj Certrfied Pu6licAccounlunls Amerrcnn /nslilu(e Of Cerlified Pttblic Accoun�nnls We have audited the statements of financial position of Jolley Troliey Transportation of Clearwater, Inc. (a nonprofit organization) as af September 30, 2003 and 2002 , and the related statements of activities and cash flows for the years then ended_ These financial statements are the responsibility af the Organization's management. Our responsibility is to express an opinion on these financial statements based on our audits. We conducted our audits in accordance with auditing standards generally accepted in the United 5tates of America and the standards applicable to financial audits contained in GovemmentAudifing Standards, issued by the Gomptroller Generai of the United States. Those standards require that we plan and perto►m our audit to obtain reasonable assurance about whether the financial statement5 are fres of material misstatements. An audit includes examining, on a test basis, evidence supporting the amounts and disclosures in the financia! �tatements. An audit also includes assessing the accounting principles used and significant estimates made by management, as welt as evaluating the overall financiai statement presentation. We believe our audits provlde a reasanable basis for our opinion. In our opinion, the financial statements refeRed tfl above present fairly, in all material respects, the financiai posiiion of Jolley Trolley Transportation of Clearwater, lnc. as of September 30, 2003 and 2002, and the changes in its net assets and its cash flows for the years then ended in conformity with accounting principles generally accepted in the United States of America. In accordance with GovemmentAudifing Standards, we have also issued a report dated �ate, 2003 on our consideration of the Organization's intemai control over financial repo�ting and our tests of its compliance with certain provisions of laws, reguiations, contracts and grants. That report is an integraf part of an audit performed in accordance v�ith Govemment Auditing Standards and should be read in conjunction with this report in considering the results of our audit. November 14, 2�03 � C �!� � �, • 1700 McMullen Booth Road, Suite A-6, Clearwater, Florida 33759 •(727) 725-8272 • Fax (727) 669-0252 1301 Seminole Blvd., Suite 115, Largo, Florida 33770 •(727) 584-8186 • Fax (727) 584-9139 E-mail: info@symanskimcknight.com JOLLEY TROLLEY TRANSPORTATION OF CLEARWATER, INC. STATEMENTS OF FINANCIA� POSITION September 30, 2003 and 2002 Assets Current assets: Cash Prepaid and other current assets Total current assets Fixed assets: Property and equipment Less accumulated depreciation Net property and equipment Totai assets Liabilities and Net Assets Current liabilities: Accounts payable and accrued expenses Deferred revenue Total current liabilities Net assets - unrestricted Total liabilities and net assets See accompanying notes to financial statements. 2 2003 2002 $ 167,151 $ 183,U98 25,290 9,648 192,441 192,746 686,817 671,828 453,692 359,669 233,125 312,158 $ 4i5,566 504 905 $ 14,229 $ 19,531 7,069 749 21,298 20,280 404,268 484,625 425 566 504 905 i� i� I ' I ' JOLLEY TRQLLEY TRANSPORTATION OF CLEARWATER, INC. STATEMENTS OF ACTIVITIES Years ended September 30, 2003 and 2002 2003 Support and revenue: � Suppart: City of Clearwater Operations Grant City of Clearvvater Vehicle Maintenance Grant City of Clearwater Office Rent Grant ' Total support I� I� I ' Revenue: Fare revenue Advertising revenue Charter revenue Interest income Other revenue Total revenue Total support and revenue ' Expenses: Sa�aries - drivers Salaries - administrative � Salaries - vehicle maintenance Payroll taxes Worker's compensation insurance Trolley repairs and maintenance � Depreciation expense Insurance expense Fuel expense � Office supplies and expenses Persannel costs Travel Utilities � Rental expense Professional fees Sa{es tax and other taxes I� I � �J r �r Total expenses Changes in net assets Net assets - unrestricted, beginning of year Net assets - unrestricted, end of year See accompanying notes to financial statements. 3 2002 $ 244,970 $ 265,000 50,000 50,000 11,700 11,700 306,670 326,700 102,022 72,928 54,113 62,256 68,469 60,259 1,359 3,712 359 584 226,322 199,739 532,992 526,439 166,055 120,031 78,775 73,465 33,792 29,074 20,807 16,764 96,111 13,867 52,792 37,011 94,023 86,555 56,044 44,8p5 39,759 28,034 9,270 7,211 11,608 8,262 - 585 5,208 3,321 22,206 21,599 4,750 5,363 2,149 62 613,349 496 009 (80,357) 30,430 484,825 454,195 $ 404,268 $ 484,625 JOLLEY TROLLEY TRANSPORTATION OF CLEARWATER, INC. STATEMENTS OF CASH FLOWS Years ended September 30, 2003 and 2002 Cash flows from operating activities: Changss in net assets Adjustments to reconcile excess of support and revenue over expenses to net cash provided by operating activities: Depreciation expense (Increase) decrease in prepaid and other current assets Increase (decrease) in accounts payable and accrued Increase (decrease) in deferred revenue Net cash (used) provided by operating activities Cash flows from investing activities: Property and equipment expenditures Net cash used by investing activities Net (decrease) in cash Cash at beginning of year Cash at end of year Suppl�mental disclosure of cash flows information: Cash paid for interest Cash paid for income taxes See accompanying notes to financial statements. 4 2003 2002 $ (80,357) $ 30,430 94,023 86,555 (15,642) 11,497 (5, 302) (1,296) 6,320 (1,835) (958) 125,351 14,989 257,227 14,989 257,227 (15,9�47) (131,876) 183,098 314,974 167 151 183 098 � �.� 233 $ -0- ' ' 1 ' NOTE 1: I ' I , I , ' ' r 1 � ' JOLLEY TROLLEY TRANSPORTATION OF CLEARWATER, INC. NOTES TO FINANCIAL STATEMENTS September 30, 2003 and 2002 SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES Oraanization Jolley Trolley of Clearwater, Inc. (Organization) is incorporated under the laws of the State of Florida as a nonprofit corporation. Its purpose is to provide a local and tourist public transportation system between the islands of Sand Key and Clearwater Beach and the City of Clean�vater. Basis of Accounting The financial statements of Jolley Trolley Transportation of Clearwater, Inc. are presented on the accrual basis. Basis of Presentation The Statement of Financial Accounting Standards (SFAS) No. 117, "Financial Statements of Not-for-�rofit Organizations," establishes standards for general purpose extemal financial statements provided by a not-for-profit organization. It specifies that those statements include a statement of financial position, a statement of activities and a statement of cash flows. The financial position and activities will report information according to three classes of net assets: unrestricted net assets, temporarily restricted net assets and permanently restricted net assets. The Organization does not have any temporarily restricted or permanently restricted net assets. Revenue RecoAnition Revenue from Operations and Vehicle Maintenance Grants (see Note 4) is recognized , over the term of the Grants. All other revenues are recognized when the earnings process is substantially complete and services have been pertormed. ' 1 1 � Property and Equipment Property and equipment are stated at cost. Depreciation is charged against earnings over the estimated useful service period of the assets using the straight-line method. ' S � JOLLEY TROLLEY TRANSPORTATION OF CLEARWATER, INC. NOTES TO FINANCIAL STATEMENTS September 30, 2003 and 2002 NOTE 1: SUMMARY OF SIGNIFtCANT ACCOUNTING POLICIES (Continuedk Accounting Estimates The preparation of financial statements in conformity with generally accepted accounting principles requires management to make estimates and assumptions that affect the reported amounts of assets and liabilities and disclosure of contingent �ssets and liabilities at the date of the financial statements and the reported amounts of revenues and expenses during the reporting period. Actual results could differ from those estimates. Donated Services No amounts have been reflected in the financial statements for donated services because the criteria for recognition under SFAS 116 have not been satisfied. NOTE 2: INCOME TAXES In June 1995, the Or�ganization received a favorable determination from the Internal Revenue Service as to its federal income tax exemption sta#as under Section 501(a) of the Intemal Revenue Code. NOTE 3: PROPERTY AND EQUIPMENT Property and equipment at September 30, 2003 and 20p2 are as follows: Estimated years of useful 2003 2002 se►vice Trolley vehicles $ 662,519 $ 648,550 5 Fumiture and office 16,581 16,581 5 Signage 1,020 - 5 Garage equipment 6,697 6,697 5 Total property and equipment 686 817 $ 671,828 0 i� i� I ' , NOTE 4: CJ � � ' � JOLLEY TROLLEY TRANSPORTATION OF CLEARWATER, INC. NOTES TO FINANCIAL STATEMENTS September 30, 2003 and 2002 GRAMTS The City of Clearwater has annual Funding Agreements to the Jolley Trolley Transportation of Clearwater, Inc., subject to an annual budgetary appropriation approved by the City of Clearwater Commission. The funding of the Operations Grant and Vehicle Maintenance Grant and Office Rent Grant for the years ended September 30, 2003 and 2002 was $244,970, $50,000 and $11,700 and $265,000, $50,000 and $11,700, respectively. Amounts received under the above grants require the fulfillment of certain conditians as set forth in the grant instruments. Failure to ful�ll the conditions could result in the return of the funds to the grantor, reduction of funding commitment or termination of agreement. The Board of Directors is of the opinion that Jolley Trolley Transportation of Clearvvater, Inc. has complied with all significant provisions of the grants as of September 30, 2003 and 2002. The funding agreement will terminate as of September 30, 2004, On October 3, 2003 a one year funding agreement was approved by the City of ' Clearwater which provides $229,540 for providing trolley service, $50,000 for maintaining the trolley vehicles and $11,700 for the lease of office space. The funding monies are payable to the Organization in 12 equal monthfy instatlments. ' II �� , NOTE 5: RENT The Or�ganizatian rents a gar�ge facility on a month-tamonth basis for $650 per month. It has a one year lease for office space at $1,076.25 per month which began on February 17, 2003. The Organization has the option to extend the lease for one additional period of five (5) years on the same terms with CPI adjustments. , NOTE 6: CONCENTRATION OF RISK � �I� � ' 1 The Organization maintains cash balances with its banking institutions. Cash amounts at these banks are insured by the FDIC for up to $100,000. Afthough the Organization's bank accounts were in excess of $100,000 at September �0, 2002, management does not believe that the Organization's deposits are at risk of loss at the depository bank. Approximately 58°� and 62% of the Organization's support for the years ended September 30, 2003 and 2002, respectively, came from City of Clearwater grants. ' 7 ' � John J. McKriighl, Jr., CPA Robert P. Symanski, CPA , 1 , � � ' � � ' � ' ' 1 , � ' � Symanski Q McKnight� P.A. Certified Pub[ic Accountan[s and Business Advisors Membere Floridu /nslrlu[e Of Cerlified PublicAccoun(unu Americrui h�slr(u!e Of Cerlified PublrcAccounlrmU INDEPENDENT AUDITOR'S REPORT ON C�MPLIANCE AND ON 1NTERNAL CONTROL OVER FINANCIAL REPORTING BASED ON AN AUDIT OF FINANCIAL STATEMENTS PERFORMED IN ACCORDANCE WITH GOVERNMENTAUDITJNG STANDARDS The Board of Directors Joliey Trolley Transportation of Clearwater, Inc. We have audited the financial statements of Joiley Trolley Transportation of Clearwater, Inc. (A nonprofit organization) as of and for the years ended September 30, 2003 and 2002, and have issued our report thereon dated Date, 2003. We conducted our audit in accordance with auditing standards generalty accepted in the United States of America and the standards applicable to financial audits contained in Government Audifing Standards, issued by the Comptroller General of the United States. Compliance As part of obtaining reasonable assurance about whether Jolley Trotley Transportation of Clearwater, lnc.'s financial statements are free of material misstatement, we performed tests of its compliance with certain provision of laws, regulations, contracts and grants, noncompliance with which could have a direct and material effect on the determina#ion 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 suci� an opinion. The results of our tests disclosed no instances of noncompliance that are required to be reported under Govemment Auditing Sfandards. 1700 McMullen Booth Road, Suite A-6, Clearwater, Florida 33759 •(727) 725-8272 • Fax (727) 669-0252 ' 1301 Seminole Blvd., Suite 115, Largo, Florida 33770 •(727) 584-8186 • Fax (727) 584-9139 E-mail: info@symanskimcknight.com ' ' The Board of Directors ' Joliey Trolley Transportation of Clearwater, inc. ' Internal Control Over Financial Reqortinq � In planning and pertorming our audit, we considered Jolley Troliey Transportation of Clearwater, Inc.'s internal control over financial reporting in order to determine our auditing procedures for the purpose of expressing our opinion on the financial statements and not to provide assurance on the intemal control over ' financial reporting. Our consideration of the internal control over financial reporting woufd not necessarily disclose all matters in the internal control over financial reporting that might be material weaknesses. A material weakness is a condition in which the design or operation of one or more of the internal control components does not reduce to a relatively low level the risk that misstatements in amounts that would be ' material in relation to the financial statements being audited may occur and not be detected within a timely periad by employees in the normal course of pertorming their assigned functions. We noted no matters involving the intemal control over financial reporting and its operation that we consider to be material ' weaknesses. This report is intended for the information of the board of directors, management and others within the ' �rganization and is not iniended to be and should not be used by anyone otherthan these specified parties. � � ,�� , November 14, 2003 1 , � 1 ' r � ' 9 IW"'� �� REVENUE JOLLEY TROLLEY INCOME STATEMENT Month of: DECEMBER CITY GRAN'�" FARES ADVERTISING TN�EBES� INCOME CHARTERS OTHER INCOME � TOTAL REVENUE EXPENSE WAGES, DRIVERS WAGES, CLERICAL WAGES, VEHICLE MAINT. SALARIES, ADMIN. PAYROLL TAXES WORKERS` COMP. MAINT. PARTS & REPAIR INSURANCE FUEL OFFICE EXPENSE FERSONNEL C�STS UTILITIES RENTALS PROFESSIONAL FEES OTHER TAXES & FEES MISCELLANEOUS TOTAL EXPENSE NET CHANGE IN ASSETS 2003-2004 PLAN 24,270 5,582 4,124 135 7,268 40 41,419 12,420 2,995 2,644 3,553 1,804 1,435 4,218 5, 417 3,500 764 ?,550 279 1,745 5,400 1,930 31 4 50,068 (8,649) IIGC�! V G��7 JAN 0 �6 �00� � CITY MAIWpG�F�'� ��€�Pe�E ACTUAL 24,27J 6,559 7,774 45 5,865 39 44,442 14,099 1,746 2,565 3,451 1,819 1,200 2,992 6,288 3,446 269 ?�2°4 427 1,718 -0- 1,763 -0- 42,997 1,445 VARIANCE � -�- 977 3,540 (90) (1,403) (1) 3,023 (1,679) 1,249 79 102 (15) 235 1,296 (871) 54 495 366 (148) 27 5,400 167 31 4 7,071 10,094 . EXPLANATION OF VARIANGES Month of DECEMBER 2003-2004 ITEM VARIANCE FARES 977 � ADVERTISING 3,450 CHARTERS (1,403) WAGES, DRIVERS (1,679) WAGES, CLERICAL 1,249 MAIIVT. PARTS 1,296 INSURANCE � (871) PROF. FEES 5,400 EXPLANATION Thanks to Iowa & Florida Tardy charges received in December Bookings fell short Drivers used to man the office Drivers used to cover offi�e when office people unavaila��le Expensi�ve repair parts not needed Added expense to catch up to actual for the year , Audit not completed. Charge will appear in January �� 1\�Iv Januar.y 7, 2004 To: Board Members From: Bill Kirbas � Subj. Net Change In Assets Ref: Auditors Report �� '"' ,,-, ; �-:: , � �.�: . .''z': ,, . _.�:'}(''�� .��;��.�;s �" � �� _>;-� �: ;.�i.�-wi [ � ��' E, � �,,. .._. . Report shows a change in assets of a negative $80,357. In order to compare the audit'report'•s result, we need to compare the change before interest, taxes, depreciation and amortization (EBITDA). To do so we must add back depreciation expense of $94;023 which then results in a positive position of $�1:3,666 versus plan break-even ($O�. Plan accounting, as reported to the Board,'At�§ not consider depreciation in that it is a non-cash expense. �� JOLLEY TROLLEY TRANSPORTATION OF CLEARWATER, INC. 483 MANDALAY AVE., SUITE 213 CLEARWATER, FL 33767 (727) 445-1200 FAX (727) 443-3655 �