Independent Auditor Report 1988 l
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MUNICIPAL SERVICE DISTRICT
1 MONROE COUNTY, FLORIDA
Independent Auditors' Report
1 Financial Statements
r December 31, 1988
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PARKS& NILES, P.A., CERTIFIED PUBLIC ACCOUNTANTS
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1 BALTUFF DISPOSAL SERVICE, INC.
TABLE OF CONTENTS
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Page No.
' INDEPENDENT AUDITORS' REPORT 1
FINANCIAL STATEMENTS
Balance Sheet 2
1 Statement of Earnings 4
Statement of Retained Earnings 5
' Statement of Cash Flows 6
1 Notes to Financial Statements 7
INDEPENDENT AUDITORS' REPORT ON OTHER FINANCIAL
INFORMATION 12
' OTHER FINANCIAL INFORMATION
1 Schedule of Wages and Fringe Benefits - Employees 13
Schedule of Direct Vehicle Expenses 14
' Schedule of General Maintenance Expenses 15
Schedule of General Overhead Expenses 16
' Schedule of Salaries and Fringe Benefits - Officers 17
' Schedule of Discretionary Management Costs 18
Schedule of Other Income and Expense 19
' Schedule of Rented Property from Owners 20
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PARKS & NILES, P.A., CERTIFIED PUBLIC ACCOUNTANTS
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' INDEPENDENT AUDITORS' REPORT
Board of Commissioners
Monroe County, Florida
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' we have audited the accompanying balance sheet of Baltuff Disposal
Service, Inc. as of December 31, 1988, and the related statements
of earnings, retained earnings, and cash flows for the year then
ended. These financial statements are the responsibility of the
tCompany' s management. Our responsibility is to express an opinion
on these financial statements based on our audit.
We conducted our audit in accordance with generally accepted
auditing standards. Those standards require that we plan and
perform the audit to obtain reasonable assurance about whether the
' financial statements are free of material misstatement. An audit
includes examining, on a test basis, evidence supporting the
amounts and disclosures in the financial statements. An audit
also includes assessing the accounting principles used and signif-
icant estimates made by management, as well as evaluating the
overall financial statement presentation. We believe that our
audit provides a reasonable basis for our opinion.
' In our opinion, the financial statements referred to above present
fairly, in all material respects, the financial position of
' Baltuff Disposal Service, Inc. as of December 31, 1988 , and the
results of its operations and its cash flows for the year then
ended in conformity with generally accepted accounting
principles.
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' CERTIFIED PUBLIC ACCOUNTANTS
June 21 , 1989
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2432 Flagler Avenue, Key West, Florida 33040 / (3051 294-6606
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BALTUFF DISPOSAL SERVICE, INC.
BALANCE SHEET
December 31 , 1988
ASSETS
' Current assets:
Cash $ 46 ,844
Accounts receivable - trade 29, 185
' Accounts receivable - employees
and other 2,681
Prepaid expenses 7, 521
Total current assets $ 86, 231
t Property and equipment, at cost:
Vehicles 120 , 367
Machines, equipment and tools 37,853
Office furniture, fixtures and
' equipment 4 ,858
Commercial containers 65,801
228, 879
Less accumulated depreciation 151 ,880
tNet property and equipment 76,999
Other assets:
' Utility deposits 75
Total assets $ 163 , 305
The accompanying notes are an integral part of these financial
statements.
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' BALTUFF DISPOSAL SERVICE, INC.
BALANCE SHEET
' December 31 , 1988
' LIABILITIES AND STOCKHOLDER'S EQUITY
' Current liabilities:
Accounts payable $ 17, 788
Payroll taxes payable 205
' Accrued expenses 194
Income taxes payable 1 , 480
Current portion of long-term debt 7 ,237
' Total current liabilities $ 26,854
' Long-term debt, net of current portion 2 , 624
Total liabilities 29, 478
' Stockholder's equity:
Common stock - $200 par value
per share; 100 shares
1 authorized, 2 . 5 shares issued
and outstanding 500
Retained earnings 133 , 327
' Total stockholder's equity 133,827
Total liabilities and stock-
, holder' s equity $ 163, 305
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The accompanying notes are an integral part of these financial
statements.
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tBALTUFF DISPOSAL SERVICE, INC.
STATEMENT OF EARNINGS
For the Year Ended December 31 , 1988
1 Operating revenues :
Monroe County residential customers $ 224, 454
Monroe County commercial customers 241 ,903
1 Total operating revenues 466 , 357
Operating expenses:
' Employees' wages $ 116 , 947
Employees' fringe benefits 9,634
Direct vehicle expenses 48 ,696
1 General maintenance 55 , 295
General overhead 138 ,649
Total operating expenses 369 ,221
97, 136
1 Officers' expenses:
Officers' salaries 35 , 698
Officers' fringe benefits 5, 120
' Discretionary management costs 5,133
Total officers' expenses 45,951
1 Earnings from operations 51 , 185
Other income (expense) :
' Interest income 1 , 142
Miscellaneous income 27
Interest expense ( 1, 870 )
1 Total other income ( expense ) ( 701 )
Net earnings $ 50, 484
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' The accompanying notes are an integral part of these financial
statements .
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' BALTUFF DISPOSAL SERVICE, INC.
STATEMENT OF RETAINED EARNINGS
For the Year Ended December 31, 1988
Balance, beginning of year $ 82, 843
Net earnings for the year 50, 484
Balance, end of year $ 133 , 327
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The accompanying notes are an integral part of these financial
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' BALTUFF DISPOSAL SERVICE, INC.
STATEMENT OF CASH FLOWS
For the Year Ended December 31, 1988
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' Cash flows from operating activities:
Net earnings $ 50, 484
Add:
' Depreciation 23, 344
Decrease in accounts receivable 12, 075
Decrease in prepaid items 669
' Increase in accounts payable 3, 831
Total 90, 403
ISubtract:
Decrease in other current liabilities $ 7 ,176
Decrease in deferred taxes 1 , 478
Net cash inflow from operating 8, 654
activities 81 ,749
ICash flows from financing activities:
Cash outflows:
Repayment of demand note payable 10 , 000
I Principal payments on notes 6 , 659
Total cash outflow from financing
Iactivities ( 16 ,659 )
Cash flows from investing activities:
' Cash outflow for purchase of property
and equipment 30,170
' Total cash outflow from investing
activities ( 30, 170 )
Net cash inflow from all activities - 34, 920
' Cash beginning of year
11,924
Cash end of year $ 46 , 844
Interest paid $ 2 , 028
IIncome taxes paid $ -
IInstallment debt of $14 , 200 was incurred to acquire property and
equipment of $13, 104 and to pay off existing debt of $1 , 096 .
' The accompanying notes are an integral part of these financial
statements.
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' BALTUFF DISPOSAL SERVICE, INC.
NOTES TO FINANCIAL STATEMENTS
December 31, 1988
1 . Organization:
Baltuff Disposal Service, Inc. was incorporated in 1972 under
' the laws of the State of Florida. The Company' s main
business activity is the collection and disposition of
garbage . It is a closely held corporation with ownership as
follows:
Irving Baltuff 100%
' The Company entered into a franchise agreement on December
15, 1987 with the Board of County Commissioners of the Monroe
County Municipal Service District and was awarded the
' exclusive rights to collect and dispose of all the garbage in
its assigned territory spanning from Ramrod Key north to the
Seven Mile Bridge. This right was granted for the five year
period commencing on January 1 , 1988 and terminating on
' December 31 , 1992 . The agreement states that the Company
shall make no expenditures in reliance that the contract will
be extended beyond its present term. The District provides
and operates a solid waste disposal facility to receive the
--garbage collections .
Compensation rates for the collection services are set
annually by the County. For the year ended December 31 ,
1988 , the Company received $6 . 00 per month for each
residential unit in its assigned territory assessed by the
' County. For this same period, the franchise agreement
required that commercial units be billed based on a rate
schedule established by the County. For the period of
January 1, 1988 through December 31 , 1988 , a tipping fee of
' $13. 00 per ton for all solid waste delivered to the disposal
facility was remitted to the County on a monthly basis. The
County reserves the right to increase or decrease the tipping
fee on an annual basis so the County' s franchise fee , whether
by percentage of gross commercial revenue or by tipping fee,
remains forty percent ( 40% ) . If the County Commission
----- -exercises its right under this provision of the agreement,
the Company will incur additional franchise fees of $19 ,849.
' 2 . Significant Accounting Policies:
(a) Method of accounting and reporting period
' The Company's records are maintained on the accrual
basis with a calendar year.
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BALTUFF DISPOSAL SERVICE, INC.
NOTES TO FINANCIAL STATEMENTS (CONTINUED)
December 31, 1988
2. Significant Accounting Policies (Continued) :
(b) Property and equipment
IDepreciation of property and equipment is provided on a
basis estimated to be sufficient to spread the cost of
the assets over their estimated useful lives. The
I Company uses both the straight-line and accelerated
methods to determine depreciation. A summary of the
estimated useful lives in years for the principal
classifications of property and equipment is as
follows:
I Classification Useful lives
Vehicles 3-7
Machines, equipment and
I tools 5-7
Office furniture, fixtures
and equipment 5-7
ICommercial containers 5-7
The Company has followed the policy of charging
expenditures for maintenance and repairs to operations
as incurred. Expenditures for betterments and major
renewals have been capitalized and depreciated over
their estimated useful lives.
(c) Revenue recognition
Commercial accounts are billed on a monthly basis,
unless otherwise requested. During 1988, the bills were
mailed at the start of the month for the month of
service . Revenue is recognized in the month of
service.
Residential accounts are billed by the County. Each
month the County remits to the Company an amount equal
to $6 .00 per unit times the number of units serviced for
the previous month. Revenue is recognized in the month
of service.
(d) Income taxes
The Company has elected S corporation status effective
January 1, 1989. Earnings and losses after that date
will be included in the personal income tax returns of
the stockholders and taxed depending on their personal
tax strategies. Accordingly, the Company will not incur
additional income tax obligations, and future financial
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BALTUFF DISPOSAL SERVICE, INC.
NOTES TO FINANCIAL STATEMENTS (CONTINUED)
December 31 , 1988
' 2 . Significant Accounting Policies (Continued) :
(d) Income taxes ( continued)
statements will not include a provision for income
taxes. Prior to the change, income taxes currently
payable and deferred income taxes based on differences
between the financial basis of assets and liabilities
and their tax basis were recorded in the financial
statements.
3. Related Party Transactions :
' As of December 31, 1987, the Company had a demand note of
$10, 000 due to an officer bearing interest at 12% per annum.
This loan was primarily made for the purpose of providing
' operating cash. This loan was paid in full in February 1988 .
The interest expense was $171 .
' The Company rents from its stockholder certain land and
buildings. The lease agreement provides for a monthly rental
of $2,000 for a twenty (20) year period ending June 30,
2000 . The lease expense for 1988 was $24, 000 .
4 . Long-Term Debt:
The following is a summary of long-term debt as of December
31 , 1988:
' Due In Due After
One Year One Year
12. 75% note payable to NCNB in
monthly installments of $673
( including interest) collateralized
by the 1987 Toyota Cressida, with
an undepreciated cost of $28,025 . $ 7,237 $ 2, 624
Future maturities of long-term debt by year are as follows :
' 1989 $ 7,237
1990 2 ,624
$ 9,861
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BALTUFF DISPOSAL SERVICE, INC.
NOTES TO FINANCIAL STATEMENTS (CONTINUED)
' December 31 , 1988
1 5. Income Taxes:
As discussed in Note 2(d) , the Company changed its tax status
to nontaxable effective as of January 1 , 1989 . Accordingly,
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the deferred tax liability at the date that the election for
the change was filed has been eliminated through a credit to
the deferred tax provision. The provision for income taxes
1 ( tax benefit) consists of the folowing components :
Federal
1 Currently payable $ -
Deferred provision (benefit) :
Timing differences 3 , 738
Elimination of deferred tax liability
1 because of change in tax status ( 3 ,738 )
Provision for federal income taxes -
State
Currently payable 1 , 480
Deferred provision (benefit) :
Timing differences 151
Elimination of deferred tax
liability because of change in
1 tax status ( 1, 631 )
Provision for state income taxes -
Total provision for income taxes $ -
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IOTHER FINANCIAL INFORMATION
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PARKS & NILES, P.A., CERTIFIED PUBLIC ACCOUNTANTS
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INDEPENDENT AUDITORS' REPORT ON OTHER FINANCIAL INFORMATION
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1 Board of Commissioners
Monroe County, Florida
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Our report on our audit of the basic financial statements of
1 Baltuff Disposal Service, Inc. for 1988 appears on page 1 . That
audit was made for the purpose of forming an opinion on the basic
financial statements taken as a whole. The information presented
in the following pages, the format of which is required by the
1 franchise agreement, is presented for purposes of additional
analysis and is not a required part of the basic financial
statements. Such information has been subjected to the auditing
1 procedures applied in the audit of the basic financial statements
and, in our opinion, is fairly stated in all material respects in
relation to the basic financial statements taken as a whole .
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CERTIFIED PUBLIC ACCOUNTANTS
June 21 , 1989
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' BALTUFF DISPOSAL SERVICE, INC.
SCHEDULE OF WAGES AND FRINGE BENEFITS - EMPLOYEES
' For the Year Ended December 31, 1988
Employees' wages :
Payroll 5 111 ,731
Bonuses 468
' Casual labor 4 ,748
Total employees' wages 116 ,947
Employees' fringe benefits:
Payroll taxes 9, 091
Uniforms and laundry 543
' Total employees' fringe benefits 9,634
Total employees' wages and fringe
benefits $ 126 , 581
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BALTUFF DISPOSAL SERVICE, INC. 1
SCHEDULE OF DIRECT VEHICLE EXPENSES
For the Year Ended December 31 , 1988 ,
Year Life- t
Acquired Years Method
Depreciation: '
Garbage vehicles
1979 Int'l Garbage Truck 1985 5 Accelerated
1980 Int'l Garbage Truck 1985 5 Accelerated '
1979 Int'l Garbage Truck 1986 5 Accelerated
1980 Int'l Garbage Truck 1987 7 Accelerated
1980 Int'1 Garbage Truck 1987 7 Accelerated
Radios 1981-1985 5 Accelerated '
Supporting vehicles '
1980 Ford Pickup 1980 3 Straight-line
Trailer 1979 3 Straight-line '
1987 Toyota Cressida 1988 5 Accelerated
Van 1988 5 Accelerated
Major repairs ,
Major repairs 1988 7 Accelerated ,
Totals
Other direct vehicle expenses: 1
Fuel
Vehicle insurance '
Vehicle license, tags and tax
Total other direct vehicle
expenses ,
Total direct vehicle expenses
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Prior Years
' Accumulated 1988
Cost/Basis Depreciation Expense
' $ 6 ,400 $ 3 , 704 $ 1 , 344
25, 830 14 , 982 5, 424
1 9, 000 3 , 330 1, 890
11 ,868 1 , 288 2,615
4 ,750 646 1 ,140
14, 278 13,259 713
72,126 37 , 209 13, 126
1 8,292 8 ,292 -
375 375 -
' 30, 743 _ 2,718
1, 475 295
1 40,885 8 , 667 3, 013
7, 356 - 1, 051
1 $ 120 , 367 $ 45 , 876 17 , 190
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17, 399
' 13 ,206
901
1 31 , 506
$ 48 , 696
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BALTUFF DISPOSAL SERVICE, INC. 1
SCHEDULE OF GENERAL MAINTENANCE EXPENSES
For the Year Ended December 31 , 1988 '
Year Life- '
Acquired Years Method
Depreciation: '
Machines and equipment
Various equipment 1972-1979 5-7 Straight-line
Various equipment 1983 5 Accelerated '
Various equipment 1985 5 Accelerated
Various equipment 1987 7 Accelerated
Various equipment 1988 7 Accelerated
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Small tools '
Tools 1979 5 Straight-line
Tools 1980-1985 5 Accelerated
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Totals
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Other general maintenance expenses:
Equipment rental '
Oil , lubricants and coolants
Repair parts and maintenance
Shop supplies '
Small tools
Subcontracted maintenance
Tires and tubes
Total other general maintenance 1
expenses
Total general maintenance expenses
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Prior Years
' Accumulated 1988
Cost/Hasls Depreciation Expense
' $ 16, 765 $ 16 , 765 $ -
8, 290 7 ,832 -
3,718 1 , 376 781
257 36 63
4, 163 - 595
' 33 ,193 26, 009 1 , 439
' 1 , 509 1 , 509 -
3 ,151 3, 076 75
' 4 , 660 4 , 585 75
$ 37,853 $ 30, 594 1 , 514
' 1 ,118
4 ,642
28 , 315
3, 027'
1 , 447
6, 576
8, 656
53, 781
' $ 55,295
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BALTUFF DISPOSAL SERVICE, INC.
SCHEDULE OF GENERAL OVERHEAD EXPENSES
For the Year Ended December 31 , 1988
Year Life-
Acquired Years Method
Depreciation:
Office furniture, fixtures
and equipment
Various furniture 1975-1979 5 Straight-line
Various furniture
and equipment 1984-1985 5 Accelerated
Various furniture
and equipment 1988 7 Accelerated I
Commercial containers I
Containers 1975 5 Straight-line
Containers 1982-1985 5 Accelerated
Containers 1986 5 Accelerated
Containers 1987 7 Accelerated
Containers and improvements 1988 7 Accelerated
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Totals
Other general overhead expenses:
Accounting
Bad debts
Electric
Franchise fees - County
Insurance - general
Legal
Miscellaneous
Office expense
Postage and freight
Rent
Security
Taxes and licenses
Telephone
Utilities
Total other general overhead
expenses
Total general overhead expenses I
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Prior Years
' Accumulated 1988
Cost/oasis Depreciation Expense
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' $ 1 ,910 $ 1 ,910 $ -
1 , 355 899 264
1 1 ,593 - 228
4, 858 2 ,809 492
1 37 ,959 37,959 -
12, 109 9 , 563 1 , 342
1 3, 449 1 ,276 724
3,215 459 787
9,069 - 1 ,295
I65,801 49,257 4 , 148
' $ 70,659 $ 52 ,066 4 ,640
1 3, 057
1 , 603
843
1 77 ,987
14 , 495
1 ,394
822'
1 , 498
768
24 , 000
I 3 , 897
1 , 441
1 ,604
600
134 , 009
$ 138 ,649
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BALTUFF DISPOSAL SERVICE, INC.
SCHEDULE OF SALARIES AND FRINGE BENEFITS - OFFICERS
For the Year Ended December 31 , 1988
Officers' salaries $ 35,698
Officers' fringe benefits:
Insurance - group 2, 313
Payroll taxes 2 ,807
Total officers' fringe benefits 5,120
' Total officers' salaries and fringe
benefits $ 40,818
CORPORATE OFFICERS/OWNERS
& Job/ Annual
Officer' s Name Owned Position Description Time Salary
' Irving Baltuff 100% President Supervisor Full $ 8 , 398
Keila Baltuff 0% Secretary Supervisor Part 27 , 300
$ 35,698
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1 BALTUFF DISPOSAL SERVICE, INC.
SCHEDULE OF DISCRETIONARY MANAGEMENT COSTS
1 For the Year Ended December 31 , 1988
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Christmas expense $ 1 , 220
Donations 2,139
Dues and subscriptions 488
1 Entertainment 973
Travel, seminars and training 313
Total discretionary management costs $ 5, 133
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BALTUFF DISPOSAL SERVICE, INC.
SCHEDULE OF OTHER INCOME AND EXPENSE
' For the Year Ended December 31 , 1988
I Other income :
Interest income $ 1 ,142
Miscellaneous income 27
1 1, 169
Other expense:
1 Interest expense ( 1 ,870 )
Total other income (expense ) $ ( 701 )
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BALTUFF DISPOSAL SERVICE, INC.
SCHEDULE OF RENTED PROPERTY FROM OWNERS
For the Year Ended December 31, 1988
Name Description of Property Annual Rent
Irving Baltuff Land and buildings $ 24 , 000
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BLAND DISPOSAL SERVICE, INC.
TABLE OF CONTENTS
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Page No.
INDEPENDENT AUDITORS' REPORT 1
FINANCIAL STATEMENTS
1 Balance Sheet
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' Statement of Earnings 4
Statement of Retained Earnings 5
1 Statement of Cash Flows 6
Notes to Financial Statements 8
1 INDEPENDENT AUDITORS' REPORT ON OTHER FINANCIAL
INFORMATION 14
OTHER FINANCIAL INFORMATION
Schedule of Wages and Fringe Benefits - Employees 15
Schedule of Direct Vehicle Expenses 16
Schedule of General Maintenance Expenses 17
Schedule of General Overhead Expenses 18
Schedule of Salaries and Fringe Benefits - Officers 19
Schedule of Discretionary Management Costs 20
1 Schedule of Other Income and Expense 21
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' PARKS & NILES, P.A., CERTIFIED PUBLIC ACCOUNTANTS
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' INDEPENDENT AUDITORS' REPORT
' Board of Commissioners
Monroe County, Florida
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we have audited the accompanying balance sheet of Bland Disposal
' Service, Inc. as of December 31 , 1988, and the related statements
of earnings, retained earnings, and cash flows for the year then
ended. These financial statements are the responsibility of the
' Company' s management. Our responsibility is to express an opinion
on these financial statements based on our audit.
We conducted our audit in accordance with generally accepted
andiFi ng standards. Those standards require that we plan and
perform the audit to obtain reasonable assurance about whether the
financial statements are free of material misstatement. An audit
' includes examining, on a test basis, evidence supporting the
amounts and disclosures in the financial statements . An audit
also includes assessing the accounting principles used and signif-
icant estimates made by management, as well as evaluating the
overall financial statement presentation. We believe that our
audit provides a reasonable basis for our opinion.
' In our opinion, the financial statements referred to above present
fairly, in all material respects, the financial position of Bland
Disposal Service, Inc. as of December 31, 1988, and the results of
' its operations and its cash flows for the year then ended in
conformity with generally accepted accounting principles .
&C UBLIC ACCOUNTANTS
' June 7, 1989
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2432 Flagler Avenue, Key West, Florida 33040 / (305i 294-6606
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1 BLAND DISPOSAL SERVICE, INC.
BALANCE SHEET
' December 31, 1988
ASSETS
' Current assets:
Cash $ 21 , 111
Accounts receivable - trade 49 ,609
1 Accounts receivable - employees
and other 3, 721
Prepaid expenses 33, 341
1 Total current assets $ 107,782
Property and equipment, at cost:
1 Vehicles 336, 422
Machines, equipment and tools 11 ,984
Building and components 90, 545
' Office furniture, fixtures and
equipment 11 , 349
Commercial containers 70, 528
1 ------ - - - -- 520, 828
Less accumulated depreciation 353, 038
1 Land 167, 790
17, 505
1 Net property and equipment 185, 295
Total assets $ 293, 077
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statements .
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1 BLAND DISPOSAL SERVICE, INC.
BALANCE SHEET
December 31 , 1988
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' LIABILITIES AND STOCKHOLDERS' EQUITY
1 Current liabilities:
Accounts payable $ 29 , 844
Payroll taxes payable 90
1 Income taxes payable 4 , 224
Current portion of long-term
debt 26,202
Total current liabilities $ 60,360
Long-term debt, net of current portion 36, 176
1 Deferred income taxes 12, 453
Total liabilities 108, 989
Stockholders' equity:
Common stock - $1 par value
1 per share; 10, 000 shares
authorized, issued and out-
standing 10 ,000
1 Additional paid-in capital
Retained earnings 16 4 , 310, 778
' Total stockholders' equity 184 , 088
Total liabilities and stock-
holders' equity $ 293, 077
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statements.
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BLAND DISPOSAL SERVICE, INC.
STATEMENT OF EARNINGS
' For the Year Ended December 31, 1988
Operating revenues:
Monroe County residential customers $ 412,062
Monroe County commercial customers 199,869
' Total operating revenues 611 , 931
Operating expenses:
' Employees' wages $ 156 ,144
Employees' fringe benefits 24, 403
Direct vehicle expenses 96 , 569
' General maintenance 63 , 196
General overhead 110,789
Total operating expenses 451, 101
160,830
' Officers' expenses :
Officers' salaries 95, 866
Officers' fringe benefits 12, 476
Discretionary management costs 1 ,776
Total officers' expenses 110, 118
Earnings from operations 50, 712
Other income (expense) :
' Interest income 16
Rental income 3 ,110
Miscellaneous income 16
Interest expense ( 6,764 )
Gain on sale of equipment, net 380
Total other income (expense) - ( 3, 242)
' Earnings before provision for
income taxes 47, 470
' Provision for income taxes 9, 605
' Net earnings $ 37 ,865
' The accompanying notes are an integral part of these financial
statements.
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1 BLAND DISPOSAL SERVICE, INC.
STATEMENT OF RETAINED EARNINGS
For the Year Ended December 31 , 1988
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1 Balance, beginning of year $ 131 ,913
Net earnings for the year 37,865
1 Balance, end of year $ 169,778
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IBLAND DISPOSAL SERVICE, INC.
STATEMENT OF CASH FLOWS
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For the Year Ended December 31, 1988
I Cash flows from operating activities:
Net earnings $ 37,865
Add:
IDepreciation 58 ,887
Increase in accounts payable
Increase in other current liabilities 5, 405402
' Increase in deferred taxes 838
4, 838
Total 107, 397
ISubtract:
Gain on sale of equipment, net $ 380
Increase in receivables 11 ,250
I Increase in prepaid items 4, 295
15, 925
' Net cash inflow from
operating activities 91, 472
Cash flows from financing activities:
I Cash
h inflow from banks 60 ,090
Cash outflows :
I Repayment of loan from stockholders 10, 411
Principal payments on notes 21 ,082
ITotal cash outflows 31 , 493
Net cash inflow from
financing activities 28, 597
I Cash flows from investing activities :
Cash inflow from sale of equipment 500
I Cash outflow for purchase of property
and equipment 99,458
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Net cash outflow from
investing activities ( 98, 958 )
Net cash inflow from all activities 21,111
ICash beginning of year -
' Cash end of year $ 21,111
The accompanying notes are an integral part of these financial
statements.
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1 BLAND DISPOSAL SERVICE, INC.
STATEMENT OF CASH FLOWS (CONTINUED)
For the Year Ended December 31, 1988
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' Interest paid $ 6, 764
Income taxes paid $ -
1
1
1
1
1
1
1
1
1
1
1
1
1
1 The accompanying notes are an integral part of these financial
statements.
1 -,
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BLAND DISPOSAL SERVICE, INC.
NOTES TO FINANCIAL STATEMENTS
December 31 , 1988
1
' 1 . Organization:
Bland Disposal Service, Inc. was incorporated in 1976 under
the laws of the State of Florida. The Corporation' s main
' business activity is the collection and disposition of gar-
bage. It is a closely held corporation with ownership as
follows:
' Betty Bland 50%
Leslie Bland 50%
Total 100%
The Company entered into a franchise agreement on December
' 15, 1987 with the Board of County Commissioners of the Monroe
County Municipal Service District and was awarded the exclu-
sive rights to collect and dispose of all the garbage in its
' assigned territory spanning from the city limits of Rey West
to Ramrod Rey, excluding the accounts assigned to Florida
Disposal Company. This right was granted for the five year
period commencing on January 1 , 1988 and terminating on
' December 31 , 1992 . The agreement states that the Company
shall make no expenditures in reliance that the contract will
be extended beyond its present term. The District provides
' and operates a solid waste disposal facility to receive the
garbage collections.
Compensation rates for the collection services are set annu-
lially by the County. For the year ended December 31, 1988 ,
the Company received $7 .00 per month for each residential
unit in its assigned territory assessed by the County. For
t this same period, the franchise agreement required that
commercial units be billed by the Company based on a rate
schedule established by the County. For the period of Janu-
ary 1, 1988 through December 31, 1988 , a tipping fee of $6. 50
per ton for all solid waste delivered to the disposal facili-
ty was remitted to the County on a monthly basis. The County
reserves the right to increase or decrease the tipping fee on
' an annual basis so the County' s franchise fee, whether by
percentage of gross commercial revenue or by tipping fee,
remains twenty-nine percent ( 29% ) . If the County Commission
' exercises its right under this provision of the agreement,
the Company will incur additional franchise fees of $3,993 .
' 2 . Significant Accounting Policies:
(a) Method of accounting and reporting period
1 The Company's records are maintained on the cash basis
-8
I
BLAND DISPOSAL SERVICE, INC.
NOTES TO FINANCIAL STATEMENTS (CONTINUED)
' December 31 , 1988
' 2. Significant Accounting Policies (Continued) :
(a ) Method of accounting and reporting period ( continued)
' with a calendar year, but have been converted to the
accrual basis for Monroe County reporting purposes.
' (b) Property and equipment
Depreciation of property and equipment is provided on a
t basis estimated to be sufficient to spread the cost of
the assets over their estimated useful lives. The
Company uses both the straight-line and accelerated
methods to determine depreciation. A summary of the
estimated useful lives in years for the principal clas-
sifications of property and equipment is as follows:
' Classification Useful lives
Vehicles 5-7
' Machines, equipment and
tools 5-7
Building and components 15-19
Office furniture, fixtures
and equipment 3-7
Commercial containers 5-7
' The Company has followed the policy of charging expendi-
tures for maintenance and repairs to operations as
incurred. Expenditures for betterments and major
renewals have been capitalized and depreciated over
' their estimated useful lives.
(c) Revenue recognition
' Commercial accounts are billed on a monthly basis,
unless otherwise requested. The bills are mailed at the
' end of the month before the month of service. Revenue
is recognized in the month of service .
Residential accounts are billed by the County. Each
' month the County remits to the Company an amount equal
to $7. 00 per unit times the number of units serviced for
the previous month. Revenue is recognized in the month
' of service.
(d) Income taxes
' The Company files its federal and state income tax
returns using the cash basis of accounting with a calen-
1 -9
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' BLAND DISPOSAL SERVICE, INC.
NOTES TO FINANCIAL STATEMENTS (CONTINUED)
' December 31, 1988
' 2 . Significant Accounting Policies ( Continued) :
(d) Income taxes (continued)
' dar year end. Deferred income taxes arise from the tax
consequences of timing differences. The timing differ-
ences resulted from the conversion from cash basis to
' accrual basis reporting and the use of alternative
depreciation methods for tax and financial accounting
purposes.
' 3 . Land:
' A portion of the Company's land, located in Big Coppitt Key,
Florida, was rented for $200 a month under a ten year lease
which commenced October 1978 . A new lease was signed effec-
tive October 1988 at a monthly rental of $400 for the first
five years and $500 for the next five years. The remaining
land is the site of the Company's operational facility which
was placed in service in September, 1982. The current year' s
' rental income was $3 ,110 .
' 4 . Long-Term Debt:
The following is a summary of long-term debt as of
' December 31, 1988 :
Due In Due After
One Year One Year
11 . 049% note payable to Barnett Bank
in monthly installments of $1969
' ( including interest) collateralized
by the 1988 Ford Garbage Truck, with
an undepreciated cost of $68, 766; $ 18, 890 $ 32 , 506
' 12.88% note payable to Barnett Bank
in monthly installments of $925
( including interest) collateralized
' by the 1984 Ford Garbage Truck, with
an undepreciated cost of $4,281 ; 4 , 481 -
' 10% note payable to Barnett Bank
in monthly installments of $279
( including interest) , collateralized
' by a 1987 Ford Bronco, with an
undepreciated cost of $5,363 . 2,831 3, 670
Totals $ 26,202 $ 36, 176
' -10-
I
' BLAND DISPOSAL SERVICE, INC.
NOTES TO FINANCIAL STATEMENTS (CONTINUED)
' December 31 , 1988
4. Long-Term Debt (Continued) :
Future maturities of long-term debt by year are as follows:
' 1989 $ 26, 202
1990 24,213
' 1991 11,963
$ 62, 378
5. Operating Leases:
On December 21, 1987 , a five year lease was executed with a
' stockholder for a new truck. The monthly rental is $436
beginning in January 1988 . The following is a schedule
detailing the future minimum rental payments for the years
' ending December 31 :
1989 $ 5, 232
' 1990 5,232
1991 5,232
1992 5,232
$ 20,928
The current year's lease expense was $4,801.
6. Related Party Transactions:
' As of December 31 , 1987, the Company had unsecured, non-
interest bearing loans payable to the stockholders of
$10,411 . This loan was paid in full during the year ended
December 31 , 1988 .
t7 . Income Taxes:
The components of the provision for income taxes are :
' Federal
Currently payable $ 3,315
Deferred due to timing differences 3, 431
' Provision for federal income taxes 6, 746
' -11-
I
' BLAND DISPOSAL SERVICE, INC.
NOTES TO FINANCIAL STATEMENTS (CONTINUED)
' December 31, 1988
t7. Income Taxes (Continued) :
State
' Currently payable $ 1,452
Deferred due to timing differences 1 , 407
Provision for state income taxes 2,859
Total provision for income taxes $ 9,605
1
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-12-
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' OTHER FINANCIAL INFORMATION
1
1
1
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1
;le
PARKS& NILES, P.A., CERTIFIED PUBLIC ACCOUNTANTS
1
1
1
INDEPENDENT AUDITORS' REPORT ON OTHER FINANCIAL INFORMATION
1
Board of Commissioners
1 Monroe County, Florida
1 Our report on our audit of the basic financial statements of Bland
Disposal Service, Inc. for 1988 appears on page 1 . That audit was
1 made for the purpose of forming an opinion on the basic financial
statements taken as a whole . The information presented in the
following pages, the format of which is required by the franchise
1 agreement, is presented for purposes of additional analysis and is
not a required part of the basic financial statements. Such
information has been subjected to the auditing procedures applied
in the audit of the basic financial statements and, in our opin-
1 ion, is fairly stated in all material respects in relation to the
basic financial statements taken as a whole.
1 CERTIFIED PUBLIC ACCOUNTANTS
1 June 7, 1989
1
1
1
1 2432 Flagler Avenue, Key West, Florida 33040 / (305) 294-6606
I
BLAND DISPOSAL SERVICE, INC.
SCHEDULE OF WAGES AND FRINGE BENEFITS - EMPLOYEES
For the Year Ended December 31, 1988
Employees' wages :
Payroll $ 156, 144
' Employees' fringe benefits :
Insurance - group 11, 317
Payroll taxes
Uniforms and laundry 12,537
549
Total employees' fringe benefits 24,403
Total employees' wages and fringe
benefits $ 180, 547
1
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BLAND DISPOSAL SERVICE, INC.
SCHEDULE OF DIRECT VEHICLE EXPENSES
For the Year Ended December 31 , 1988 '
Year Life-
Acquired Years Method
Depreciation:
Garbage vehicles
1978 Ford Garbage Truck 1977 7 Straight-line
1980 Ford Garbage Truck 1979 7 Straight-line 1984 Ford Garbage Truck 1984 5 ACRS
1988 Ford Garbage Truck 1988 5 MACRS
Supporting vehicles
1987 Ford Bronco 1987 5 MACRS
Totals
Other direct vehicle expenses :
Fuel
Truck leasing ,
Vehicle insurance
Vehicle license, tags and tax
Total other direct vehicle
expenses
Total direct vehicle expenses
1
t
-16- '
1
1
1
Prior Years
Accumulated 1988
Cost/Basis Depreciation Expense
1
$ 69,880 $ 55, 736 $ 7, 072
' 83,775 77 , 333 -
85,636 64, 270 17 ,085
85,957 - 17, 191
325,248 197, 339 41, 348
' 11 , 174 2, 235 3 , 576
$ 336, 422 $ 199 , 574 44 , 924
1
21 ,290
4, 801
25,248
306
1
51 ,645
$ 96 , 569
1
1
1
1
1
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1
1
BLAND DISPOSAL SERVICE, INC. 1
SCHEDULE OF GENERAL MAINTENANCE EXPENSES
For the Year Ended December 31 , 1988
Year Life- 1
Acquired Years Method
Depreciation: 1
Machines and equipment
Various equipment 1977-1980 5 Straight-line
Various equipment 1981-1984 5 ACRS
Various equipment 1984 5 Straight-line
Various equipment 1985-1986 5 ACRS
Equipment 1988 5 MACRS 1
Small tools ,
Tools 1979-1980 5 Straight-line
Tools 1987 7 MACRS
Tools 1988 5 MACRS
1
1
Other general maintenance expenses: 1
Oil, lubricants and coolants
Repair parts and maintenance
Shop supplies
Subcontracted maintenance 1
Tires and tubes
Total other general maintenance 1
expenses
Total general maintenance expenses
1
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1
1
1
17 1
1
1
1
1 Prior Years
Accumulated 1988
Cost/Basis Depreciation Expense
1
' $ 1, 016 $ 991 $ —
5,447 5, 096
1,658 1, 325 259
1 ,057 332
— 573211
1 1 ,833
367
367
11 , 011 7, 985 1, 169
1 347 312 —
467 67 114
159 — 32
1 973 379 146
' $ 11, 984 $ 8, 364
1 , 315
3 ,078
33,729
5,254
' 4 , 971
14,849
1 61 ,881
' $ 63 ,196
1
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1
1
BLAND DISPOSAL SERVICE, INC. L
SCHEDULE OF GENERAL OVERHEAD EXPENSES
For the Year Ended December 31 , 1988 1
Year Life- 1
Acquired Years Method
Depreciation:
Building and components 1
Building 1982 15 Straight-line
Building improvements 1982-1985 15 Straight-line
Building improvements 1986 19 Straight-line 1
Office furniture, fixtures
and equipment 1
Miscellaneous items 1976-1978 3-5 Straight-line
Miscellaneous items 1982-1984 5 ACRS
Radio 1987 5 MACRS 1
Miscellaneous items 1988 5-7 MACRS
Commercial containers I
Containers 1977-1980 5 Straight-line
Containers 1981-1983 5 ACRS
Containers 1984 5 Straight-line 1
Containers 1985-1986 5 ACRS
Containers 1987 7 MACRS
Containers 1988 7 MACRS 1
Totals 1
Other general overhead expenses :
Accounting 1
Bad debts
Bank charges
Electric
Franchise fees - County 1
Insurance - general
Legal
office expense I
Postage and freight
Property taxes
Radio service
Security 1
Taxes and licenses
Telephone
Travel mileage expense 1
Utilities
Total other general overhead expenses 1
Total general overhead expenses
-18- 1
Prior Years
' Accumulated 1988
Cost/Basis Depreciation Expense
' $ 74 ,854 $ 26, 613 $ 4,990
13,565 3 ,674 904
2,126 135 112
90,545 30,422 6,006
' 6 ,182 6 ,151
1 , 535 1, 435 -
41
' 877 - 175 281
2,755535
11 , 349 7,761 857
' 27, 396 26,136
13 , 310 13, 143
-
3, 108 2, 487 622
10,353 7,607 5,177
1 , 087 2,096
2, 327
8,754
- 740
70, 528 48, 030 5,785
' $ 172, 422 $ 86, 213 12, 648
' 5,360
2, 544
161
' 814
53, 337
25, 740
2,719
1 ,085
727
1,832
' 965
703
242
1 , 196
' 211
505
' 98 ,141
$ 110, 789
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' BLAND DISPOSAL SERVICE, INC.
SCHEDULE OF SALARIES AND FRINGE BENEFITS - OFFICERS
For the Year Ended December 31 , 1988
Officers' salaries $ 95,866
Officers' fringe benefits:
Insurance - group 4 ,764
' Payroll taxes 6, 885
Uniforms and laundry 827
' Total officers' fringe benefits 12, 476
Total officers' salaries and fringe
' benefits $ 108, 342
' CORPORATE OFFICERS/OWNERS
Job/ Annual
' Officer's Name Owned Position Description Time Salary
Leslie Bland 50% President Manager Full $ 48, 858
Betty Bland 50% Vice-Pres. Consultant Part 47 , 008
' 95,866
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BLAND DISPOSAL SERVICE, INC.
SCHEDULE OF DISCRETIONARY MANAGEMENT COSTS
' For the Year Ended December 31 , 1988
' Donations $ 245
Dues and subscriptions 247
Entertainment and travel 1,229
Penalties 55
'
Total discretionary management costs $ 1,776
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1 BLAND DISPOSAL SERVICE, INC.
SCHEDULE OF OTHER INCOME AND EXPENSE
For the Year Ended December 31, 1988
Other income:
Interest income $ 16
Rental income 3,110
Miscellaneous income 16
Gain on sale of equipment, net 380
' 3 , 522
Other expense :
Interest expense ( 6, 764 )
Total other income (expense ) $ ( 3,242 )
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' TED CARTER ENTERPRISES, INC.
D/B/A KEYS SANITARY SERVICE
TABLE OF CONTENTS
tPage No.
INDEPENDENT AUDITORS' REPORT 1
' FINANCIAL STATEMENTS
Balance Sheet 2
' Statement of Earnings 4
' Statement of Retained Earnings 5
Statement of Cash Flows 6
Notes to Financial Statements 7
INDEPENDENT AUDITORS' REPORT ON OTHER FINANCIAL
' INFORMATION 13
OTHER FINANCIAL INFORMATION
Schedule of Wages and Fringe Benefits - Employees 14
Schedule of Direct Vehicle Expenses 15
Schedule of General Maintenance Expenses 16
' Schedule of General Overhead Expenses 17
Schedule of Salary and Fringe Benefits - Officer 18
' Schedule of Discretionary Management Costs 19
Schedule of Other Income and Expense 20
1
'41 gl
PARKS& NILES, P.A., CERTIFIED PUBLIC ACCOUNTANTS
I
INDEPENDENT AUDITORS' REPORT
' Board of Commissioners
Monroe County, Florida
We have audited the accompanying balance sheet of Ted Carter
Enterprises, Inc. D/B/A Keys Sanitary Service as of December 31 ,
'
1988, and the related statements of earnings, retained earnings,
and cash flows for the year then ended. These financial
statements are the responsibility of the Company' s management.
' Our responsibility is to express an opinion on these financial
statements based on our audit.
We conducted our audit in accordance with generally accepted
auditing standards. Those standards require that we plan and
perform the audit to obtain reasonable assurance about whether the
financial statements are free of material misstatement. An audit
' includes examining, on a test basis, evidence supporting the
amounts and disclosures in the financial statements . An audit
also includes assessing the accounting principles used and signif-
icant estimates made by management, as well as evaluating the
overall financial statement presentation. We believe that our
audit provides a reasonable basis for our opinion.
In our opinion, the financial statements referred to above present
fairly, in all material respects, the financial position of Ted
Carter Enterprises, Inc. D/B/A Keys Sanitary Service as of
' December 31 , 1988, and the results of its operations and its cash
flows for the year then ended in conformity with generally
accepted accounting principles.
cli; 6.vf74luiPA
CERTIFIED PUBLIC ACCOUNTANTS
June 26, 1989
2432 Flagler Avenue, Key West, Florida 33040 / (305) 294-6606
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1 TED CARTER ENTERPRISES , INC.
D/B/A KEYS SANITARY SERVICE
BALANCE SHEET
1 December 31 , 1988
1 ASSETS
1 Current assets:
Cash $ 246 , 039
1 Certificate of deposit 150, 000
Accounts receivable - trade 153, 485
Accounts receivable - employees
1 and other 14 , 449
Prepaid income taxes 7, 723
Prepaid expenses 26, 359
Loan to stockholder 1 , 404
1 Total current assets $ 599 , 459
1 Property and equipment, at cost:
Vehicles 829, 742
Machines, equipment and tools 52 , 373
' Building and components 102, 686
Office furniture, fixtures and
equipment 13 , 102
Commercial containers 172 , 366
1 1 , 170, 269
1 Less accumulated depreciation 819 ,231
Land 351, 038
82, 888'
Net property and equipment 433, 926
1 Other assets :
Utility deposits 1 , 905
' Total assets $ 1 , 035, 290
1
1
1 The accompanying notes are an integral part of these financial
statements .
1 2
1
' TED CARTER ENTERPRISES, INC.
D/B/A KEYS SANITARY SERVICE
BALANCE SHEET
December 31 , 1988
LIABILITIES AND STOCKHOLDER'S EQUITY
Current liabilities:
Accounts payable $ 57, 108
' Current portion of long-term
debt 21 , 676
' Total current liabilities $ 78 , 784
Long-term debt, net of current portion 3,850
Total liabilities 82, 634
Stockholder' s equity:
' Common stock - $100 par value
per share; 5, 000 shares authorized,
100 shares issued and outstanding 10, 000
' Retained earnings 942 , 656
Total stockholder' s equity 952, 656
t Total liabilities and stock-
holder's equity $ 1 ,035,290
1
The accompanying notes are an integral part of these financial
statements.
-3-
tTED CARTER ENTERPRISES, INC.
D/B/A KEYS SANITARY SERVICE
STATEMENT OF EARNINGS
' For the Year Ended December 31, 1988
' Operating revenues:
Monroe County residential customers $ 780, 600
Monroe County commercial customers 773 , 396
Total operating revenues 1, 553 ,996
Operating expenses:
Employees ' wages $ 401 , 027
Employees' fringe benefits 50 , 640
' Direct vehicle expenses 207 , 744
General maintenance 153, 649
General overhead 372, 445
Total operating expenses 1, 185 , 505
368 , 491
' Officer's expenses:
Officer's salary 424 ,846
Officer's fringe benefits 8 , 381'
Discretionary management costs 10 ,203
Total officer' s expenses 443 , 430
' Loss from operations ( 74 ,939 )
Other income (expense) :
Interest income 20, 303
Miscellaneous income 85
Interest expense ( 8 ,686 )
' Loss on disposal of equipment ( 5,789 )
Total other income (expense ) 5, 913
Loss before provision for
income taxes ( 69 , 026 )
' Provision for income taxes ( 82 , 550 )
Net earnings $ 13 , 524
' The accompanying notes are an integral part of these financial
statements.
-4-
' TED CARTER ENTERPRISES, INC.
D/B/A KEYS SANITARY SERVICE
STATEMENT OF RETAINED EARNINGS
' For the Year Ended December 31 , 1988
' Balance, beginning of year $ 929, 132
' Net earnings for the year 13, 524
Balance, end of year $ 942, 656
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' The accompanying notes are an integral part of these financial
statements.
5-
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' TED CARTER ENTERPRISES, INC.
D/B/A KEYS SANITARY SERVICE
STATEMENT OF CASH FLOWS
' For the Year Ended December 31 , 1988
' Cash flows from operating activities :
Net earnings $ 13 , 524
' Add:
Depreciation 135, 505
Loss on disposal of equipment 5, 789
I Decrease in prepaid items 13, 325
Decrease in note receivable 13 ,280
Increase in accounts payable 15, 827
ITotal 197 ,250
Subtract:
I Increase in receivables $ 4 , 053
Increase in other current assets 6 , 395
Decrease in other current liabilities 45, 011
' Decrease in deferred taxes 79,922
135, 381
Net cash inflow from operating
activities 61, 869
Cash flows from financing activities :
' Cash outflow from principal
payments on notes 47, 499
Total cash outflow from
I
financing activities ( 47, 499 )
Cash flows from investing activities:
' Cash outflow for purchase of property
and equipment 74 , 318
' Total cash outflow from
investing activities ( 74 , 318 )
Net cash outflow from all activities ( 59,948 )
I
Cash beginning of year 305 , 987
' Cash end of year $ 246 , 039
Interest paid • $ 8 ,686
Income taxes paid $ 12 ,900
' The accompanying notes are an integral part of these financial
statements.
I
TED CARTER ENTERPRISES, INC.
D/B/A KEYS SANITARY SERVICE
t NOTES TO FINANCIAL STATEMENTS
December 31, 1988
' 1 . Organization:
' Ted Carter Enterprises, Inc. , D/B/A Keys Sanitary Service was
incorporated in 1971 under the laws of the State of Florida.
The Company's main business activity is the collection and
disposition of garbage. It is a closely held corporation
' with ownership as follows:
John E. Carter, Sr. 100%
tThe Company entered into a franchise agreement on December
15, 1987 with the Board of County Commissioners of the Monroe
County Municipal Service District and was awarded the
' exclusive rights to collect and dispose of all the garbage in
its assigned territory spanning from Snake Creek north to the
Dade County line, excluding Ocean Reef Club. This right was
' granted for the five year period commencing on January 1,
1988 and terminating on December 31 , 1992 . The agreement
states that the Company shall make no expenditutes in
' reliance that the contract will be extended beyond its
present term. The District provides and operates a solid
waste disposal facility to receive the garbage collections.
' Compensation rates for the collection services are set
annually by the County. For the year ended December 31 ,
1988, the Company received $6 . 00 per month for each
' residential unit in its assigned territory assessed by the
County. For this same period, the franchise agreement
required that commercial units be billed based on a rate
schedule established by the County. For the period of
January 1, 1988 through December 31, 1988, a tipping fee of
$13 . 00 per ton for all solid waste delivered to the disposal
facility was remitted to the County on a monthly basis. The
' County reserves the right to increase or decrease the tipping
fee on on annual basis so the County' s franchise fee, whether
by percentage of gross commercial revenue or by tipping fee,
' _remains thirty-three and five-tenths percent ( 33. 5%) . If the
County Commission exercises its right under this provision of
the agreement, the Company will incur additional franchise
fees of $31, 102.
2 . Significant Accounting Policies :
' (a) Method of accounting and reporting period
' The Company' s records are maintained on the cash basis
with a calendar year end, but have been converted to the
accrual basis for Monroe County reporting purposes.
1 -7-
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TED CARTER ENTERPRISES, INC.
D/B/A KEYS SANITARY SERVICE
NOTES TO FINANCIAL STATEMENTS ( CONTINUED)
' December 31 , 1988
2. Significant Accounting Policies (Continued) :
' (b) Property and equipment
Depreciation of property and equipment is provided on a
basis estimated to be sufficient to spread the cost of
' the assets over their estimated useful lives. The
Company uses both the straight-line and accelerated
methods to determine depreciation. A summary of the
' estimated useful lives in years for the principal
classifications of property and equipment is as follows:
Classification Useful lives
Vehicles 3-8
Machines, equipment and
tools 3-7
Building and components 18
Office furniture, fixtures
_ and equipment 5-7
Commercial containers 5-7
The Company has followed the policy of charging
expenditures for maintenance and repairs to operations
as incurred. Expenditures for betterments and major
renewals have been capitalized and depreciated over
' their estimated useful lives.
The Company follows the policy of annually writing off
containers as abandoned. The criteria for write off is
based on the date the containers were acquired.
( c) Revenue recognition
' Commercial accounts are billed on a monthly basis,
unless otherwise requested. The bills are mailed at the
' -- start of the month following the month when service was
rendered in most cases. A few accounts are billed at
the start of the month for the current month' s service.
Revenue is recognized in the month of service .
Residential accounts are billed by the County. Each
month the County remits to the Company an amount equal
' to $6 . 00 per unit times the number of units serviced for
the previous month. Revenue is recognized in the month
of service.
' -8
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TED CARTER ENTERPRISES, INC.
D/B/A KEYS SANITARY SERVICE
NOTES TO FINANCIAL STATEMENTS ( CONTINUED)
December 31 , 1988
' 2 . Significant Accounting Policies (Continued) :
t (d) Income taxes
The Company has elected S corporation status effective
June 1, 1988. Earnings and losses after that date will
be included in the personal income tax returns of the
stockholders and taxed depending on their personal tax
strategies. Accordingly, the Company will not incur
' additional income tax obligations, and future financial
statements will not include a provision for income
taxes . Prior to the change , income taxes currently
payable and deferred income taxes based on differences
' between the financial basis of assets and liabilities
and their tax basis were recorded in the financial
statements.
3 . Note Receivable :
' On January 1 , 1984 , Ted Carter Enterprises, Inc. D/B/A Keys
Sanitary Service and Ocean Reef Club, Inc. entered into an
agreement whereby Ocean Reef Club, Inc . purchased the
exclusive right to collect and dispose of garbage for the
Ocean Reef area for the purchase price of $75, 000 . This
obligation was paid initially by $21, 880 owed to Ocean Reef
' Club, Inc. at the time of the purchase, with the balance of
$53, 120 payable in four equal annual installments of $13 , 280
plus ten percent ( 10% ) interest. This note receivable was
paid in full in January 1988 .
4 . Long-Term Debt:
The following is a summary of long-term debt as of December
31 , 1988:
' Due In Due After
One Year One Year
11 . 343% note payable to Barnett Bank
' in monthly installments of $1, 933
( including interest) , collateralized
by the 1987 Garbage Truck, with an
undepreciated cost of $56 , 716. $ 21 , 676 $ 3,850
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TED CARTER ENTERPRISES, INC.
D/B/A KEYS SANITARY SERVICE
NOTES TO FINANCIAL STATEMENTS ( CONTINUED)
December 31 , 1988
4 . Long-Term Debt ( Continued) :
' Future maturities of long-term debt by year are as follows:
1989 $ 21 , 676
' 1990 3 ,850
Total $ 25, 526
5. Related Party Transactions :
As of December 31 , 1988 , the Corporation had an unsecured,
non-interest bearing loan receivable from the sole
stockholder of $1, 404 . There is no specific repayment date
set on this loan.
6. Income Taxes:
' As discussed in Note 2(d) , the Company changed its tax status
to nontaxable effective as of June 1 , 1988 . Accordingly, the
deferred tax liability at the date that the election for the
' change was filed has been eliminated through a credit to the
deferred tax provision. The provision for income taxes ( tax
benefit) consists of the following components:
' Federal
Currently payable $ -
Deferred provision (benefit) :
' Elimination of deferred tax liability
because of change in tax status ( 58 , 387 )
' Provision for federal income taxes ( 58 , 387 )
State
' Currently payable -
Deferred provision (benefit) :
Elimination of deferred tax liability
because of change in tax status ( 24, 163 )
1 Provision for state income taxes ( 24, 163 )
Total provision for income taxes $( 82 , 550 )
' -10-
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TED CARTER ENTERPRISES, INC.
D/B/A KEYS SANITARY SERVICE
NOTES TO FINANCIAL STATEMENTS (CONTINUED)
December 31 , 1988
' 7 . Pension Plan:
' Ted Carter Enterprises, Inc. has in existence a defined
benefit plan covering all employees not under a collective
bargaining agreement, who have at least thirty-six months of
service and have attained age twenty-one. The effective
' starting date for the plan was August 1 , 1984 .
The Company makes contributions to the plan equal to the
amounts accrued for pension expense. The total pension
expense for 1988 was $-0-. This funding amount is calculated
using a year end of May 31. The results are substantially
' the same as those of a calendar year. There have been no
significant changes in the plan from May 31 , 1987 to May 31 ,
1988 . The funding policy of this plan is the individual
aggregate using auxilary fund deposits.
' The assets are calculated at fair market values as of the
valuation date. The latest valuation was done as of May 31 ,
' 1988. The net assets of the plan as of May 31 , 1988 were
B493, 400. The plan' s assumed rate of return is six percent
( 6%) . The actuarial present value of vested benefits were
$423 ,431 and nonvested benefits were $2 ,240 .
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' OTHER FINANCIAL INFORMATION
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PARKS & NILES, P.A., CERTIFIED PUBLIC ACCOUNTANTS
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INDEPENDENT AUDITORS' REPORT ON OTHER FINANCIAL INFORMATION
Board of Commissioners
' Monroe County, Florida
Our report on our audit of the basic financial statements of Ted
' Carter Enterprises, Inc. D/B/A Keys Sanitary Service for 1988
appears on page 1 . That audit was made for the purpose of forming
an opinion on the basic financial statements taken as a whole .
The information presented in the following pages, the format of
' which is required by the franchise agreement, is presented for
purposes of additional analysis and is not a required part of the
basic financial statements. Such information has been subjected
' to the auditing procedures applied in the audit of the basic
financial statements and, in our opinion, is fairly stated in all
material respects in relation to the basic financial statements
taken as a whole .
6 /flod'
CERTIFIED PUBLIC ACCOUNTANTS
1
June 26, 1989
2432 Flagler Avenue, Key West, Florida 33040 / 1305) 294-6606
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' TED CARTER ENTERPRISES, INC.
D/B/A KEYS SANITARY SERVICE
SCHEDULE OF WAGES AND FRINGE BENEFITS - EMPLOYEES
' For the Year Ended December 31, 1988
1 Employees' wages:
Payroll $ 399, 412
' Casual labor 1 ,615
Total employees' wages 401,027
1 Employees' fringe benefits:
Insurance - group 11 ,676
Payroll taxes 32 , 457
1 Uniforms and laundry 6 , 507
Total employees' fringe benefits 50,640
1 Total employees' wages and fringe
benefits $ 451 , 667
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TED CARTER ENTERPRISES, INC. 1
D/B/A KEYS SANITARY SERVICE
SCHEDULE OF DIRECT VEHICLE EXPENSES
For the Year Ended December 31 , 19881
Year Life- 1 Acquired Years Method
Depreciation:
Garbage vehicles
1977 Int'l 25 yd Diesel 1977 8 Double-declining
1978 Int'l 25 yd Diesel 1978 8 Double-declining
1979 IMC Diesel 1979 8 Double-declining
1980 Mack Truck 1980 8 Double-declining
1982 Int' l Garbage Truck 1982 5 Accelerated
1984 Int'l Garbage Truck 1983 5 Accelerated
1985 IAC Leach 1985 5 Accelerated
1986 Leach Packer 1986 5 Accelerated
1987 Int' l Garbage Truck 1987 7 Accelerated '
1988 Heil Packer 1988 7 Accelerated
Supporting vehicles 1
Ford Courier 1981 3 Accelerated
1987 Mazda 1987 5 Accelerated '
F988 Ford Thunderbird 1987 5 Accelerated
1988 Ford Mustang 1987 5 Accelerated
1
Major repairs and
replacements '
New engine and clutch 1978 3 Double-declining
New engine 1979 3 Double-declining
Major repairs 1986 3 Accelerated '
Totals '
Other-direct vehicle expenses: '
Fuel
Vehicle insurance
Vehicle license and tags '
Total other direct vehicle
expenses
Total direct vehicle. expenses 1
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-15- '
Prior Years
' Accumulated 1988
Cost/Basis Depreciation Expense
' $ 54 ,846 $ 48 , 598 $ -
55, 940 50, 081 -
' 68,194 60 , 248 -
80,678 69, 595 2, 078
84,766 84 ,766 -
' 85,771 80 ,990 -
87,697 48, 322 17 , 496
91 ,922 34 ,011 19, 304
92 ,659 13 , 241 22,702
' 34, 088 - 4 ,871
736, 561 489, 852 66 , 451
6 ,208 6, 208 -
8, 345 1 ,669 2, 670
I 24 , 876 4 , 975 7 ,960
14, 783 2,957 4 ,730
' 54, 212 15, 809 15, 360
I3, 000 3 , 000 -
2 ,755 2 , 754 -
33 , 214 20, 926 12, 289
38 ,969 26 , 680 12, 289
' $ 829,742 $ 532 , 341 94 , 100
I 40, 533
69 ,600
3, 511
113 , 644
$ 207 , 744
TED CARTER ENTERPRISES , INC. '
D/B/A KEYS SANITARY SERVICE
SCHEDULE OF GENERAL MAINTENANCE EXPENSES '
For the Year Ended December 31 , 1988
Year Life- ,
Acquired Years Method
Depreciation: ,
Machines and equipment
Various equipment 1979-1981 3-5 Accelerated
Various equipment 1982 5 Accelerated '
Various equipment 1983 5 Accelerated
Various equipment 1984 5 Accelerated
Various equipment 1985 5 Accelerated
Various equipment 1986 5 Accelerated '
Various equipment 1987 7 Accelerated
Various equipment 1988 7 Accelerated
Totals '
Other general maintenance expenses : ,
Oil , lubricants and coolants
Repair parts and maintenance
Shop supplies '
Tires and tubes
Total other general maintenance I
expenses
Total general maintenance expenses
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Prior Years
Accumulated 1988
Cost/Basis Depreciation Expense
1 $ 9,843 $ 8, 973 $ -
4 , 210 4 , 210 -
3, 100 2,945 _
3 ,268 2 , 452 653
6,160 3 , 443 1, 247
11, 212 4 ,149 2 , 355
5, 415 775 1 , 327
9 ,165 - 1 , 310
1 $ 52, 373 $ 26 ,947 6 , 892
1 9,135
75,842
17 , 590
44, 190
1 146, 757
$ 153,649
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TED CARTER ENTERPRISES, INC. ,
D/B/A KEYS SANITARY SERVICE
SCHEDULE OF GENERAL OVERHEAD EXPENSES ,
For the Year Ended December 31 , 1988
Year Life- '
Acquired Years Method
Depreciation: '
Building and components
Building 1984 18 Accelerated
Office furniture, fixtures '
and equipment
Miscellaneous items 1984 5 Accelerated '
Office equipment 1986-1987 5 Accelerated
Computer software 1988 7 Accelerated
Commercial containers
Containers 1979-1981 5 Accelerated '
Containers 1982-1983 5 Accelerated
Containers 1984 5 Accelerated
Containers 1985 5 Accelerated
Containers 1986 5 Accelerated ,
Containers 1987 7 Accelerated
Containers 1988 7 Accelerated
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Totals
Other general overhead expenses:
Accounting '
Bad debts
Electric
Exterminating '
Franchise fees - County
Insurance - general
Legal
Miscellaneous '
Office expense
Pension plan administration
Property taxes '
Radio service
Taxes and licenses
Telephone
Utilities '
Total other general overhead
expenses '
Total general overhead expenses
-17- '
Prior Years
Accumulated 1988
Cost/Basis Depreciation Expense
' $ 102, 686 $ 29, 780 $ 7 ,188
1 ,905 1 , 430 379
' 8, 197 3, 000 1 ,954 2 , 495
429
13 ,102 3, 384 3, 303
25,686 24 , 138 -
' 24 ,161 23 , 165 -
23,096 17, 335 4 ,606
26, 098 14, 380 5,207
25, 489 9 ,431 5, 353
19,771 2 , 825 4 , 845
28,065 - 4 , 011
172, 366 91 ,274 24, 022
$ 288 ,154 $ 124 ,438 34 , 513
11, 600'
2, 451
1 ,254
1 ,015
227, 774
72, 986
3,962
426
3 ,712
2 , 725
2 , 119
' 733
2, 540
4 ,160
' 475
337, 932
'
$ 372 , 445
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1 TED CARTER ENTERPRISES, INC.
D/B/A KEYS SANITARY SERVICE
SCHEDULE OF SALARY AND FRINGE BENEFITS - OFFICER
1 For the Year Ended December 31, 1988
1 Officer ' s salary $ 424,846
Officer's fringe benefits :t
Insurance - group 4 , 938
Payroll taxes 3 , 443
1 Total officer' s fringe benefits 8 , 381
Total officer's salary and fringe
1 benefits $ 433, 227
1 CORPORATE OFFICER/OWNER
$ Job/ Annual
1 Officer's Name Owned Position Description Time Salary
John E. Carter, Sr. 100% President Manager Full $ 424 , 846
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1 TED CARTER ENTERPRISES, INC.
D/B/A KEYS SANITARY SERVICE
SCHEDULE OF DISCRETIONARY MANAGEMENT COSTS
For the Year Ended December 31 , 1988
Advertising $ 548
Donations 2,797
Dues and subscriptions 519
Employee gifts 2 , 096
Entertainment and travel 3 ,660
Penalties 583
1 Total discretionary management costs $ 10, 203
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1 TED CARTER ENTERPRISES, INC.
D/B/A KEYS SANITARY SERVICE
1 SCHEDULE OF OTHER INCOME AND EXPENSE
For the Year Ended December 31, 1988
1 Other income:
Interest income $ 20, 303
1 Miscellaneous income 85
20,388
1 Other expense:
Interest expense ( 8,686 )
Loss on disposal of equipment ( 5,789 )
1 ( 14, 475)
Total other income (expense) $ 5,913
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ISLAND DISPOSAL COMPANY, INC.
TABLE OF CONTENTS
1
Page No.
INDEPENDENT AUDITORS' REPORT 1
FINANCIAL STATEMENTS
Balance Sheet 2
Statement of Earnings 4
Statement of Retained Earnings 5
' Statement of Cash Flows 6
Notes to Financial Statements 8
' INDEPENDENT AUDITORS' REPORT ON OTHER FINANCIAL
INFORMATION 14
OTHER FINANCIAL INFORMATION
Schedule of Wages and Fringe Benefits - Employees 15
Schedule of Direct Vehicle Expenses 16
1 Schedule of General Maintenance Expenses 17
Schedule of General Overhead Expenses 18
1 Schedule of Salaries and Fringe Benefits - Officers 19
Schedule of Discretionary Management Costs 20
Schedule of Other Income and Expense 21
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PARKS & NILES, P.A., CERTIFIED PUBLIC ACCOUNTANTS
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' INDEPENDENT AUDITORS' REPORT
' Board of Commissioners
Monroe County, Florida
We have audited the accompanying balance sheet of Island Disposal
' Company, Inc. as of December 31 , 1988, and the related statements
of earnings, retained earnings, and cash flows for the year then
ended. These financial statements are the responsibility of the
' Company' s management. Our responsibility is to express an opinion
on these financial statements based on our audit.
We conducted our audit in accordance with generally accepted
auditing standards. Those standards require that we plan and
perform the audit to obtain reasonable assurance about whether the
financial statements are free of material misstatement. An audit
' includes examining, on a test basis, evidence supporting the
amounts and disclosures in the financial statements. An audit
also includes assessing the accounting principles used and
' significant estimates made by management, as well as evaluating
the overall financial statement presentation. We believe that our
audit provides a reasonable basis for our opinion.
In our opinion, the financial statements referred to above present
fairly, in all material respects, the financial position of Island
Disposal Company, Inc. as of December 31, 1988, and the results of
its operations and its cash flows for the year then ended in
conformity with generally accepted accounting principles.
ai.otainded% /?%
' CERTIFIED PUBLIC ACCOUNTANTS
tJune 12, 1989
1
2432 Flagler Avenue, Key West, Florida 33040 / (305) 294-6606
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ISLAND DISPOSAL COMPANY, INC.
BALANCE SHEET
December 31, 1988
1
ASSETS
' Current assets:
Cash $ 160 , 445
Accounts receivable - trade 57,982
' Accounts receivable - employees
and other 2, 815
Prepaid expenses 11 ,619
1 Total current assets $ 232,861
Property and equipment, at cost:
' Vehicles 321 , 711
Machines, equipment and tools 14 ,969
Building and components 14, 011
' Office furniture, fixtures and
equipment 3 ,214
Commercial containers 65,914
1 ----- -- 419 , 819
Less accumulated depreciation 319 , 367
' Land 100 , 452
68,502
' Net property and equipment 168, 954
Other assets:
' Utility deposits 855
Unamortized loan costs 295
Loan to stockholder 142, 308
' Total other assets 143, 458
Total assets $ 545,273
The accompanying notes are an integral part of these financial
statements.
1 -2
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ISLAND DISPOSAL COMPANY, INC.
BALANCE SHEET
' December 31, 1988
LIABILITIES AND STOCKHOLDER'S EQUITY
' Current liabilities:
Accounts payable $ 36, 869
Payroll taxes payable 5,785
' Income taxes payable 15, 690
Accrued expenses 13 ,689
Accrued pension contribution 29, 567
' Current portion of long-term
debt 25,836
Total current liabilities $ 127,436
Long-term debt, net of current portion 27 , 409
' Total liabilities 154 ,845
Stockholder's equity:
' Common stock - no par value per
share; 25 shares authorized,
issued and outstanding 500
Additional paid-in capital 3 , 485
' Retained earnings 422, 076
Treasury stock - 18 .75 shares at
cost ( 35, 633 )
' Total stockholder's equity 390, 428
Total liabilities and stock-
holder's equity $ 545,273
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The accompanying notes are an integral part of these financial
statements.
-3-
1 ISLAND DISPOSAL COMPANY, INC.
STATEMENT OF EARNINGS
' For the Year Ended December 31, 1988
' Operating revenues:
Monroe County residential customers $ 172,286
Monroe County commercial customers 467,393
' 639,679
Operating expenses:
' Employees' wages $ 112 ,421
Employees' fringe benefits 26, 821
Direct vehicle expenses 72,699
' General maintenance 39 , 062
General overhead 203, 896
' Total operating expenses 454 ,899
184, 780
' Officers' expenses:
Officers' salaries 66 ,866
Officers' fringe benefits 36 ,433
' Discretionary management costs 4, 390
Total officers' expenses 107, 689
tEarnings from operations 77, 091
Other income (expense) :
' Interest income 14 , 035
Miscellaneous income 285
Interest expense ( 7, 456)
' Total other income ( expense ) 6 ,864
Earnings before provision for
' income taxes 83,955
Provision for income taxes 15, 187
Net earnings $ 68, 768
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' The accompanying notes are an integral part of these financial
statements.
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ISLAND DISPOSAL COMPANY, INC.
STATEMENT OF RETAINED EARNINGS
For the Year Ended December 31 , 1988
1
1 Balance, beginning of year $ 353, 308
Net earnings for the year 68, 768
1 Balance, end of year $ 422 , 076
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1 -5-
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1 ISLAND DISPOSAL COMPANY, INC.
STATEMENT OF CASH FLOWS
For the Year Ended December 31, 1988
1
1 Cash flows from operating activities:
Net earnings $ 68, 768
Add:
1 Depreciation $ 41 , 567
Amortization 164
Decrease in accounts receivable 2 , 990
1 Decrease in prepaid expenses 1, iis
Increase in accounts payable 18 ,191
Increase in other current liabilities 13 , 174
' Increase in accrued expenses 222
77, 426
' 146, 194
Subtract:
Increase in utility deposits 440
1 Decrease in deferred income taxes 6, 631
7, 071
' Net cash inflow from operating
activities 139,123
Cash flows from financing activities :
1 Cash inflow from stockholder 1 , 080
Cash outflows:
' Loans to stockholder 142, 308
Principal payments on mortgage
and notes 24, 582
1 Total cash outflows 166 ,890
Net cash outflow from financing
activities ( 165,810)
Cash flows from investing activities:
Cash outflow from purchase of property
and equipment 9 , 352
Total cash outflow from investing
1 activities ( 9, 352 )
Net cash outflow from all activities ( 36, 039 )
1 Cash beginning of year 196 , 484
' Cash end of year $ 160 , 445
The accompanying notes are an integral part of these financial
statements .
1 -6-
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ISLAND DISPOSAL COMPANY, INC.
STATEMENT OF CASH FLOWS ( CONTINUED)
For the Year Ended December 31 , 1988
1
' Interest paid $ 7, 456
Income taxes paid $ 8, 806
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1 -7
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' ISLAND DISPOSAL COMPANY, INC.
NOTES TO FINANCIAL STATEMENTS
' December 31 , 1988
1 . Organization:
Island Disposal Company, Inc. was incorporated in 1967 under
the laws of the State of Florida. The Company' s main
business activity is the collection and disposition of
garbage, it is a closely held corporation with ownership as
follows:
Norman Parker 100%
The Company entered into a franchise agreement on December
15, 1987 with the Board of County Commissioners of the Monroe
County Municipal Service District and was awarded the
exclusive rights to collect and dispose of all the garbage in
' its assigned territory spanning from Long Key Bridge to Snake
Creek . This right was granted for the five year period
commencing on January 1 , 1988 and terminating on December 31 ,
' 1992 . The agreement states that the Company shall make no
expenditures in reliance that the contract will be extended
beyond its present term. The District provides and operates
a solid waste disposal facility to receive the garbage
' collections.
Compensation rates for the collection services are set
annually by the County. For the year ended December 31,
1988, the Company received $6 . 00 per month for each
residential unit in its assigned territory assessed by the
' County. For this same period, the franchise agreement
required that commercial units be billed by the Company based
on a rate schedule established by the County. For the period
of January 1 , 1988 through December 31, 1988, a tipping fee
of $22 .00 per ton for all solid waste delivered to the
disposal facility was remitted to the County on a monthly
basis. The County reserves the right to increase or decrease
' the tipping fee on an annual basis so the County's franchise
fee, whether by percentage of gross commercial revenue or by
tipping fee, remains thirty-nine and four-tenths percent
' ( 39 . 4% ) . if the County Commission exercises its right under
this provision of the agreement, the Company will incur
additional franchise fees of $37, 995.
2 . Significant Accounting Policies :
' (a) Method of accounting and reporting period
The Company' s records are maintained on the accrual
' basis with a calendar year.
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ISLAND DISPOSAL COMPANY, INC.
NOTES TO FINANCIAL STATEMENTS (CONTINUED)
1 December 31 , 1988
' 2 . Significant Accounting Policies ( Continued) :
(b) Property and equipment
Depreciation of property and equipment is provided on a
basis estimated to be sufficient to spread the cost of
the assets over their estimated useful lives . The
Company uses both the straight-line and accelerated
methods to determine depreciation. A summary of the
estimated useful lives in years for the principal
' classifications of property and equipment is as
follows:
Classification Useful lives
Vehicles 3-7
Machines, equipment and tools 3-7
' Building and components 7-19
Office furniture, fixtures and
equipment 5_7
Commercial containers 5_7
The Company has followed the policy of charging
expenditures for maintenance and repairs to operations
' as incurred. Expenditures for betterments and major
renewals have been capitalized and depreciated over
their estimated useful lives.
(c) Revenue recognition
' Commercial accounts are billed on a monthly basis,
unless otherwise requested. The bills are mailed at the
start of the month following the month when service was
rendered in most cases. A few accounts are billed at
' the start of the month for the current month's service .
Revenue is recognized in the month of service.
1 Residential accounts are billed by the County. Each
month the County remits to the Company an amount equal
to $6 . 00 per unit times the number of units serviced for
the previous month. Revenue is recognized in the month
of service.
(d) Income taxes
The Company has elected S Corporation status efective
January 1, 1989 . Earnings and losses after that date
will be included in the personal income tax returns of
the stockholders and taxed depending on their personal
tax strategies. Accordingly, the Company will not incur
1 -9-
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ISLAND DISPOSAL COMPANY, INC.
NOTES TO FINANCIAL STATEMENTS (CONTINUED)
December 31, 1988
1
2 . Significant Accounting Policies ( Continued) :
(d) Income taxes (continued)
' additional income tax obligations, and future financial
statements will not include a provision for income
taxes . Prior to the change, income taxes currently
payable and deferred income taxes based on differences
between the financial basis of assets and liabilities
and their tax basis were recorded in the financial
statements.
3 . Related Party Transactions :
During the year ended December 31, 1988 , the Company loaned
$20 ,000 and $122, 308 to the stockholder . The notes were
' unsecured demand loans and bear interest at the rate of 8%
per annum. There were no payments of principal or interest
for these notes during the year . Interest of $2 , 575 was
' accrued as of December 31 , 1988.
As of December 31, 1987, $1 ,080 was due from the stockholder.
This was paid during the year ended December 31, 1988 .
1
4 . Long-Term Debt:
The following is a summary of long-term debt as of
December 31 , 1988 :
1 Due In Due After
One Year One Year
11 .75% mortgage payable to Barnett
Bank of the Keys in monthly install-
ments of $885 ( including interest) ,
collateralized by land and building,
with an undepreciated cost of $78 , 713; $ 9, 134 $ 7 , 529
9.75% note payable to Sun Bank
in monthly installments of $319
( including interest) , collateralized
' by a 1988 Plymouth Van, with an
undepreciated cost of $9 , 618; 2 ,744 9, 415
' 11 .75% note payable to Barnett Bank of
the Keys in monthly installments of
$1 , 163 (plus interest) , collateralized
by a 1987 Ford LT800 Truck with an
undepreciated cost of $56 , 518 . 13 , 958 10, 465
Totals $ 25, 836 $ 27 , 409
' -10-
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ISLAND DISPOSAL COMPANY, INC.
NOTES TO FINANCIAL STATEMENTS (CONTINUED)
December 31 , 1988
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t4 . Long-Term Debt (Continued) :
Future maturities of long-term debt by year are as follows :
1989 $ 25, 836
1990 21 , 023
1991 3, 342
' 1992 3, 044
$ 53 ,245
5 . Pension Plan:
' Island Disposal Company, Inc . has in existence a defined
benefit plan covering all employees who have at least thirty-
six months of service and have attained age twenty-one . The
' effective starting date for the plan was August 1 , 1984 .
The Company makes contributions to the plan equal to the
' amounts accrued for pension expense. The total pension
expense for 1988 was $28 , 481 . As of December 31 , 1988,
$29, 567 remained to be funded for 1987 and 1988 ( $1 ,086 and
$28, 481 respectively) . The funding policy of this plan is
' the individual aggregate ( spread gain) method.
The assets are calculated at current market values as of the
valuation date . The net assets of the plan as of December
31 , 1988 were $137 ,658 . The plan' s assumed rate of return is
five percent ( 5% ) . The actuarial present value of vested
' benefits were $172 ,754 . There were not any nonvested
benefits as all participants were fully vested.
' 6 . Income Taxes:
As discussed in Note 2(d) , the Company changed its tax status
' to nontaxable effective as of January 1 , 1989 . Accordingly,
the deferred tax liability at the date that the election for
the change was filed has been eliminated through a credit to
the deferred tax provision. The provision for income taxes
( tax benefit) consists of the following components :
Federal
' Currently payable $ 14 , 903
Deferred provision (benefit ) :
Timing differences 120
' Elimination of deferred tax
liability because of change in
tax status ( 3 , 641 )
-11-
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ISLAND DISPOSAL COMPANY, INC.
NOTES TO FINANCIAL STATEMENTS ( CONTINUED)
December 31 , 1988
1
' 6 . Income Taxes ( Continued) :
Provision for federal income taxes 11, 382
t State
Currently payable 5, 172
Deferred provision (benefit) :
' Timing differences 46
Elimination of deferred tax
liability because of change in
' tax status ( 1 , 413 )
Provision for state income taxes 3 ,805
' Total provision for income taxes $ 15, 187
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OTHER FINANCIAL INFORMATION
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PARKS& NILES, P.A., CERTIFIED PUBLIC ACCOUNTANTS
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INDEPENDENT AUDITORS' REPORT ON OTHER FINANCIAL INFORMATION
1
Board of Commissioners
Monroe County, Florida
1
Our report on our audit of the basic financial statements of
1 Island Disposal Company, Inc. for 1988 appears on page 1 . That
audit was made for the purpose of forming an opinion on the basic
financial statements taken as a whole. The information presented
in the following pages, the format of which is required by the
1 franchise agreement, is presented for purposes of additional
analysis and is not a required part of the basic financial
statements. Such information has been subjected to the auditing
1 procedures applied in the audit of the basic financial statements
and, in our opinion, is fairly stated in all material respects in
relation to the basic financial statements taken as a whole .
1
1 & :i?uluif'_
CERTIFIED PUBLIC ACCOUNTANTS
June 12, 1989
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1 2432 Flagler Avenue, Key West, Florida 33040 / (305) 294-6606
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1 ISLAND DISPOSAL COMPANY, INC.
SCHEDULE OF WAGES AND FRINGE BENEFITS - EMPLOYEES
For the Year Ended December 31 , 1988
1
1 Employees' wages:
Payroll $ 112, 256
Casual labor 165
1 Total employees' wages 112, 421
Employees' fringe benefits:
1 Insurance - group 12, 397
Payroll taxes 9 , 013
Pension plan contribution 1 , 799
1 Uniforms and laundry 3, 612
Total employees' fringe benefits 26, 821
1 Total employees' wages and fringe
benefits $ 139, 242
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1 -15-
ISLAND DISPOSAL COMPANY, INC.
SCHEDULE OF DIRECT VEHICLE EXPENSES
For the Year Ended December 31, 1988 ,
Year Life-
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Acquired Years Method
Depreciation: '
Garbage vehicles
Ford LT800 Truck 1978 5 Straight-line
1980 Ford LET Truck 1980 7 Straight-line '
1982 Leach Truck 1982 5 Accelerated
1987 Ford LT800 Truck 1987 7 Accelerated
Supporting vehicles
1985 Toyota Pickup 1985 3 Accelerated ,
1988 Plymouth Van 1987 5 Accelerated
Major repairs and 1
replacements
New engine 1983 3 Accelerated '
Transmission 1988 7 Accelerated
Totals
Other direct vehicle expenses : '
Fuel
Vehicle insurance '
Vehicle license, tags and tax
Total other direct vehicle
expenses '
Total direct vehicle expenses
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Prior Years
Accumulated 1988
Cost/Basis Depreciation Expense
' $ 43,716 $ 43, 716 $ -
73 ,077 73 , 077
' 74,767 74, 767 -
92, 313 13 , 188 22,607
' 283,873 204, 748 22, 607
7,882 7, 732 -
20,036 4 ,007 6 , 411
27,918 11 ,739 6 , 411
■ 7,551 7, 324 -
2, 369 -- 339
1 9,920 7, 324 339
$ 321 , 711 $ 223 , 811 29 , 357
13, 414
' 27 , 483
2 , 445
43, 342
$ 72,699
ISLAND DISPOSAL COMPANY, INC. '
SCHEDULE OF GENERAL MAINTENANCE EXPENSES
For the Year Ended December 31, 1988 ,
Year Life- '
Acquired Years Method
Depreciation: ,
Machines and equipment
Various equipment 1984-1985 5 Accelerated
Various equipment 1987 7 Accelerated
Small tools '
Tools 1980 3 Straight-line
Tools 1982 5 Accelerated
Tools 1984-1985 5 Accelerated '
Tools 1986 5 Accelerated
Tools 1987 5 Accelerated
Totals ,
Other general maintenance expenses: '
Oil , lubricants and coolants
Repair parts and maintenance
Shop supplies '
Small tools expense
Tires and tubes
Total other general maintenance ,
expenses
Total general maintenance expenses ,
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Prior Years
1 Accumulated 1988
Cost/Basis Depreciation Expense
1 $ 4, 493 $ 3 , 214 $ 943
3,869 553 948
1 8, 362 3, 767 1 , 891
1 1 , 997 1 ,997 —
692 623 —
1, 925 1 , 243 404 1
378 140 79
1,615 231 396
1 6,607 4 ,234 879
$ 14 , 969 $ 8 ,001 2 ,770
■
1 1 , 651
19 , 315
6 , 426
33
1 8 ,867
1 36, 292
1 $ 39, 062
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ISLAND DISPOSAL COMPANY, INC. 1
SCHEDULE OF GENERAL OVERHEAD EXPENSES
For the Year Ended December 31, 1988 '
Year Life-
Acquired Years Method ,
Depreciation:
Building and components
Building 1985 19 Accelerated '
Building improvements 1986 19 Accelerated
Building improvements 1987 7 Accelerated
Office furniture, fixtures 1
and equipment
Miscellaneous items 1983 5 Accelerated 1
Furniture 1986 5 Accelerated
Equipment 1987 7 Accelerated
Commercial containers 1
Containers 1978-1980 5 Straight-line
Containers 1981-1982 5 Straight-line 1
Containers 1983-1985 5 Accelerated
Containers 1986 5 Accelerated
Containers 1987 7 Accelerated I
Containers 1988 7 Accelerated
Totals 1
Other general overhead expenses: 1
Accounting
Amortization
Bad debts
Electric 1
Equipment rental
Franchise fees - County
Insurance - general 1
Legal
Office expense
Pension plan administration
Property taxes 1
Rent
Security
Taxes 1
Telephone
Utilities
Total other general overhead 1
expenses
Total general overhead expenses 1
-18- 1
Prior Years
Accumulated 1988
1 Cost/Basis Depreciation Expense
' $ 5, 000 $ 990 $ 370
6 ,298 892 495
2, 713 388 665
' 14 ,011 2, 270 1, 530
1 ,230 1, 183 -
905 335 190
1, 079 154 264
3,214 1, 672 454
14 ,623 14, 623 -
' 10, 821 10,821 -
17, 015 12, 161 2,748
9,194 3 , 402 1 , 931
7,278 1, 039 1 ,782
- 6, 983 - 995
65,914 42, 046 7, 456
' $ 83,139 $ 45,988 9, 440
' 5, 436
164
85'
2, 185
484
146,146
1 24 , 345
2,899
4, 095
1 , 023
1 ,855
1, 590
202
' 82
3,187
735
194, 456
I $ 203,896
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ISLAND DISPOSAL COMPANY, INC.
SCHEDULE OF SALARIES AND FRINGE BENEFITS - OFFICERS
' For the Year Ended December 31 , 1988
Officers' salaries $ 66 ,866
Officers' fringe benefits :
1 Insurance - group 4, 600
Payroll taxes 5,151
Pension plan contribution 26 ,682
Total officers' fringe benefits 36, 433
Total officers' salaries and fringe
1 benefits $ 103 , 299
' CORPORATE OFFICERS/OWNERS
% Job/ Annual
' Officer' s Name Owned Position Description Time Salary
Norman Parker 100E President Manager Part $ 41 ,600
Mary Jo Parker 0% Sec./Treas. Office Mgr . Full 25 ,266
$ 66 , 866
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1 ISLAND DISPOSAL COMPANY, INC.
SCHEDULE OF DISCRETIONARY MANAGEMENT COSTS
For the Year Ended December 31, 1988
1 Advertising and promotion $ 45
Donations 29
Dues and subscriptions 290
Penalties 739
Travel and entertainment 3, 287
Total discretionary management costs $ 4, 390
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ISLAND DISPOSAL COMPANY, INC.
SCHEDULE OF OTHER INCOME AND EXPENSE
' For the Year Ended December 31 , 1988
Other income:
Interest income $ 14,035
Miscellaneous income 285
' 14, 320
' Other expense:
Interest expense ( 7 , 456)
Total other income (expense) $ 6 ,864
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MARATHON GARBAGE SERVICE, INC.
TABLE OF CONTENTS
1
Page No.
INDEPENDENT AUDITORS' REPORT 1
FINANCIAL STATEMENTS
1 Balance Sheet 2
1 Statement of Loss 4
Statement of Retained Earnings 5
Statement of Cash Flows 6
Notes to Financial Statements 7
INDEPENDENT AUDITORS' REPORT ON OTHER FINANCIAL
INFORMATION 13
OTHER FINANCIAL INFORMATION
__.. Schedule of Wages and Fringe Benefits - Employees 14
Schedule of Direct Vehicle Expenses 15
Schedule of General Maintenance Expenses 16
Schedule of General Overhead Expenses 17
Schedule of Salaries and Fringe Benefits - Officers 18
Schedule of Discretionary Management Costs lg
Schedule of Other Income and Expense 20
Schedule of Rented Property from Owners 21
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PARKS& NILES, P.A., CERTIFIED PUBLIC ACCOUNTANTS
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INDEPENDENT AUDITORS' REPORT
Board of Commissioners
Monroe County, Florida
1
1 We have audited the accompanying balance sheet of Marathon
Garbage Service, Inc. as of December 31, 1988 , and the related
statements of loss, retained earnings, and cash flows for the year
then ended. These financial statements are the responsibility of
1 the Company's management. Our responsibility is to express an
opinion on these financial statements based on our audit.
1 We conducted our audit in accordance with generally accepted
auditing standards. Those standards require that we plan and
perform the audit to obtain reasonable assurance about whether the
1 financial statements are free of material misstatement . An audit
includes examining, on a test basis, evidence supporting the
amounts and disclosures in the financial statements. An audit
also includes assessing the accounting principles used and signif-
icant estimates made by management, as well as evaluating the
overall financial statement presentation. We believe that our
audit provides a reasonable basis for our opinion.
1 In our opinion, the financial statements referred to above present
fairly, in all material respects, the financial position of
Marathon Garbage Service, Inc. as of December 31, 1988, and the
results of its operations and its cash flows for the year then
ended in conformity with generally accepted accounting
principles.
1
1 1'72Gl e/, "i 7-
1 CERTIFIED PUBLIC ACCOUNTANTS
June 29, 1989
1
1 2432 Flagler Avenue, Key West, Florida 33040 / (305) 294-6606
1
MARATHON GARBAGE SERVICE, INC.
BALANCE SHEET
I
December 31 , 1988
' ASSETS
' Current assets:
Cash $ 81 ,987
Accounts receivable - trade 64 ,805
1 Accounts receivable - employees
and others 17, 500
Loans receivable - stockholders 3, 904
1 Equipment deposits 36 ,220
Prepaid expenses 48 , 347
Total current assets $ 252,763
1 Property and equipment, at cost:
Vehicles 633, 476
1 Machines, equipment and tools 44 , 389
Building and components 79, 284
Office furniture, fixtures and
equipment 5, 585
I Commercial containers 116 , 520
879, 254
1 Less accumulated depreciation . 592, 157
1 Net property and equipment 287, 097
Other assets:
IUtility deposits 50
Total assets $ 539 ,910
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' The accompanying notes are an integral part of these financial
statements.
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MARATHON GARBAGE SERVICE, INC.
BALANCE SHEET
December 31, 1988
LIABILITIES AND STOCKHOLDERS' EQUITY
' Current liabilities:
Accounts payable $ 74 , 554
Accrued expenses 41 ,644
Income taxes payable 894
Current portion of long-term
debt 30, 257
Total current liabilities $ 147, 349
Long-term debt, net of current portion 14,703
' Loans from stockholders 14 ,687
Total liabilities 176 ,739
Stockholders' equity:
I Common stock - $100 par value
per share; 100 shares
authorized, issued and out-
standing 10 , 000
' Additional paid-in capital 3, 805
Retained earnings 349 , 366
' Total stockholders' equity 363, 171
Total liabilities and stock-
holders' equity $ 539,910
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The accompanying notes are an integral part of these financial
statements .
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IMARATHON GARBAGE SERVICE, INC.
STATEMENT OF LOSS
For the Year Ended December 31 , 1988
I
I Operating revenues:
Monroe County residential customers $ 488 ,760
Monroe County commercial customers 776, 402
1 Total operating revenues 1, 265, 162
Operating expenses:
1 Employees' wages $ 195, 308
Employees' fringe benefits 29, 506
Direct vehicle expenses 142 , 557
I General maintenance 118,684
General overhead 382 ,685
' Total operating expenses 868, 740
396, 422
I Officers' expenses:
Officers' salaries 341 ,680
Officers' fringe benefits 65, 346
Discretionary management costs 23 ,827
HI Total officers' expenses 430,853
ILoss from operations ( 34, 431 )
Other income ( expense) :
1 Interest income 5 , 491
Interest expense ( 7, 013 )
Loss on sale of equipment ( 3, 570 )
ITotal other income (expense ) ( 5, 092 )
Loss before provision for
Iincome taxes ( 39, 523)
Provision for income taxes ( 4 , 382 )
11 Net loss $ ( 35,141 )
I
1 The accompanying notes are an integral part of these financial
statements.
4
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1 MARATHON GARBAGE SERVICE, INC.
STATEMENT OF RETAINED EARNINGS
1 For the Year Ended December 31, 1988
1 Balance, beginning of year $ 384, 507
Net loss for the year ( 36, 141 )
1 Balance, end of year $ 349, 366
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1 The accompanying notes are an integral part of these financial
statements.
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IMARATHON GARBAGE SERVICE, INC.
STATEMENT OF CASH FLOWS
IFor the Year Ended December 31 , 1988
I Cash flows from operating activities:
Net loss $ ( 35, 141 )
I Add:
Depreciation 87, 177
Loss on sale of equipment 3,570
Decrease in receivables 28 ,514
I Increase in accounts payable 17 ,637
Increase in other current liabilities 10, 496
ITotal 112 ,253
Subtract :
I Increase in equipment deposits $ 36 ,220
Increase in prepaid items 5, 501
Decrease in deferred taxes 6 , 000
47,721
I Net cash inflow from operating
activities 64 , 532
I Cash flows from financing activities:
Cash inflow from repayment of loan to
stockholders 18, 067
Cash outflow from principal payments
I
on notes 34 , 277
Net cash outflow from financing
Iactivities ( 16 ,210)
Cash flows from investing activities :
I Cash inflow from sale of equipment 3 ,200
Cash outflow for purchase of property
and equipment 44 , 466
I Net cash outflow from investing
activities ( 41 ,266 )
INet cash inflow from all activities 7 ,056
Cash beginning of year 74 ,931
ICash end of year $ 81 ,987
Interest paid $ 7, 013
IIncome taxes paid $ 1,638
The accompanying notes are an integral part of these financial
I
statements.
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MARATHON GARBAGE SERVICE, INC.
NOTES TO FINANCIAL STATEMENTS
December 31, 1988
1 . Organization:
Marathon Garbage Service, Inc. was incorporated in 1959 under
' the laws of the State of Florida. The Company's main
business activity is the collection and disposition of
garbage. It is a closely held corporation with ownership as
follows:
John Konrath 25. 00%
Sallie Kodrath 25. 00%
' Ronald Konrath 22 . 50%
William xonrath 22 . 50%
Gregory xonrath 5.00%
Total 100 . 00%
The Company entered into a franchise agreement on December
' 15, 1987 with the Board of County Commissioners of the Monroe
County Municipal Service District and was awarded the
exclusive rights to collect and dispose of all the garbage in
' its assigned territory spanning from Pigeon Key north to Long
Key Bridge . This right was granted for the five year period
commencing on January 1 , 1988 and terminating on December 31,
1992 . The agreement states that the Company shall make no
' expenditures in reliance that the contract will be extended
beyond its present term. The District provides and operates
a solid waste disposal facility to receive the garbage
' collections.
Compensation rates for the collection services are set
' annually by the County. For the year ended December 31,
1988, the Company received $6. 00 per month for each
residential unit in its assigned territory assessed by the
County. For this same period, the franchise agreement
' required that commercial units be billed by the Company based
on a rate schedule established by the County. For the period
of January 1 , 1988 through December 31 , 1988 , a tipping fee
- -- of $17 .00 per ton for all solid waste delivered to the
disposal facility was remitted to the County on a monthly
basis. The County reserves the right to increase or decrease
the tipping fee on an annual basis so the County' s franchise
fee, whether by percentage of gross commercial revenue or by
tipping fee, remains thirty-nine percent ( 39% ) . If the
County Commission exercises its right under this provision of
the agreement, the Company will incur additional franchise
fees of $42,658 .
1
MARATHON GARBAGE SERVICE, INC.
NOTES TO FINANCIAL STATEMENTS ( CONTINUED)
December 31 , 1988
1 2 . Significant Accounting Policies :
(a) Method of accounting and reporting period
The Company's records are maintained on the accrual
basis with a calendar year .
(b) Property and equipment
Depreciation of property and equipment is provided on a
basis estimated to be sufficient to spread the cost of
the assets over their estimated useful lives. The
Company uses both the straight-line and accelerated
methods to determine depreciation. A summary of the
estimated useful lives in years for the principal
classifications of property and equipment is as
follows:
' Classification Useful lives
Vehicles 3-7
Machinery, equipment and
tools 3-10
Building and components 10-31 . 5
' Office furniture, fixtures
and equipment 3-10
Commercial containers 3-7
The Company has followed the policy of charging
expenditures for maintenance and repairs to operations
as incurred. Expenditures for betterments and major
renewals have been capitalized and depreciated over
their estimated useful lives.
( c) Revenue recognition
Commercial accounts are billed on a monthly basis,
' - unless otherwise requested. The bills are mailed at the
start of the month following the month when service was
rendered, although some accounts are billed for service
in advance. Revenue is recognized in the month of
service.
Residential accounts are billed by the County. Each
' month the County remits to the Company an amount equal
to $6 .00 per unit times the number of units serviced for
the previous month. Revenue is recognized in the month
of service .
-8
MARATHON GARBAGE SERVICE, INC.
NOTES TO FINANCIAL STATEMENTS (CONTINUED)
December 31, 1988
2 . Significant Accounting Policies (Continued) :
(d) Income taxes
The Company has elected S corporation status effective
January 1, 1989. Earnings and losses after that date
will be included in the personal income tax returns of
!� the stockholders and taxed depending on their personal
® tax strategies. Accordingly, the Company will not incur
additional income tax obligations, and future financial
statements will not include a provision for income
taxes. Prior to the change, income taxes currently
payable and deferred income taxes based on differences
between the financial basis of assets and liabilities
and their tax basis were recorded in the financial
statements.
' 3 . Long-Term Debt:
The following is a summary of long-term debt as of December
31, 1988 :
Due In Due After
One Year One Year
11 . 5% note payable to Marine Bank in
monthly installments of $1 ,685
( including interest) , collateralized
by a 1987 Int'l Garbage Truck, with
an undepreciated cost of $41,784 ; $ 12, 027 $ -
I 9 . 75% note payable to First National
Bank in monthly installments of
$1 ,720 ( including interest) ,
collateralized by a 1988 Int'l
Garbage Truck, with an undepreciated
cost of $65,789 . 18,230 14 ,703
Totals $ 30 ,257 $ 14 ,703
Future maturities of long-term debt by year are as follows :
1989 $ 30, 257
' 1990 14 ,703
Total $ 44 ,960
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2 MARATHON GARBAGE SERVICE, INC.
NOTES TO FINANCIAL STATEMENTS ( CONTINUED)
December 31, 1988
3 4 . Profit-Sharing Plan:
The Company has a non-contributory profit-sharing plan
covering employees after one year of service who are at least
twenty-one years old. Contributions to the plan are made at
the discretion of the Board of Directors . During 1988,
contributions to the plan charged to operations were
$35, 000 .
The profit-sharing plan's administration is not up-to-date .
Subsequent to year end, corrective measures have been taken
to begin to rectify this.
1 5. Related Party Transactions:
As of December 31, 1988, the Company had unsecured, non-
interest bearing loans payable to stockholders of $14, 687 and
loans receivable from stockholders of $3, 904. These loans
were primarily made for the purpose of short term advances.
1 There is no specific repayment date set on these loans.
The Company had a nine percent ( 9% ) loan receivable from a
stockholder payable in monthly installments of $450
( including interest) . A payment of $20,000 including $1 , 933
of accrued interest as received in 1988 . No additional
payments were received and the principal balance at December
31, 1988 was $915.
An advance of $17, 500 was paid on behalf of a former employee
who is a related party. The balance due is included in
accounts receivable-employees and others. No interest rate
or repayment date has been established.
Also, the Company rents its facility from its stockholders .
The lease agreement provides for a monthly rental of $3 , 500
plus sales tax for a five year period beginning June 1 , 1986
and terminating May 31 , 1991 . The lease expense for 1988 was
$44, 555 .
6. Income Taxes:
As discussed in Note 2(d) , the Company changed its tax status
to nontaxable effective as of January 1 , 1989 . Accordingly,
the deferred tax liability at the date that the election for
the change was filed has been eliminated through a credit to
the deferred tax provision. The provision for income taxes
( tax benefit) consists of the following components:
-10-
3
2 MARATHON GARBAGE SERVICE, INC.
NOTES TO FINANCIAL STATEMENTS (CONTINUED)
December 31, 1988
3
3 6. Income Taxes (Continued) :
Federal
Currently payable $ 718
Deferred provision (benefit) :
Timing differences ( 4 , 011 )
Provision for federal income taxes ( 3, 293 )
State
Currently payable 126
Deferred provision (benefit) :
Timing differences ( 1,215)
3 Provision for state income taxes ( 1 , 089 )
Total provision for income taxes $ ( 4 ,382 )
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OTHER FINANCIAL INFORMATION
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PARKS & NILES, P.A., CERTIFIED PUBLIC ACCOUNTANTS
J
INDEPENDENT AUDITORS' REPORT ON OTHER FINANCIAL INFORMATION
1
Board of Commissioners
Monroe County, Florida
■
Our report on our audit of the basic financial statements of
Marathon Garbage Service, Inc. for 1988 appears on page 1 . That
audit was made for the purpose of forming an opinion on the basic
financial statements taken as a whole . The information presented
in the following pages, the format of which is required by the
franchise agreement, is presented for purposes of additional
analysis and is not a required part of the basic financial
statements . Such information has been subjected to the auditing
procedures applied in the audit of the basic financial statements
and, in our opinion, is fairly stated in all material respects in
relation to the basic financial statements taken as a whole.
yj
&(.."14/771e44 %'g
CERTIFIED PUBLIC ACCOUNTANTS
11-
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2432 Flagler Avenue, Key West, Florida 33040 / (305) 294-6606
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' MARATHON GARBAGE SERVICE, INC.
SCHEDULE OF WAGES AND FRINGE BENEFITS - EMPLOYEES
For the Year Ended December 31 , 1988
I
' Employees' wages:
Payroll $ 195, 308
Employees' fringe benefits :
1 Insurance - group 3, 295
Miscellaneous expense 2,636
Payroll taxes 16, 047
1 Profit-sharing contribution 3,710
Uniforms and laundry 3,818
' Total employees' fringe benefits 29 , 506
Total employees' wages and fringe
benefits $ 224,814
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MARATHON GARBAGE SERVICE, INC. I
SCHEDULE OF DIRECT VEHICLE EXPENSES
For the Year Ended December 31, 1988
I
Year Life- I
Acquired Years Method
Depreciation:
Garbage vehicles '
1981 Int' l Garbage Truck 1980 7 Straight-line
1982 Int'l Garbage Truck 1981 7 Straight-line
1984 Int'l Garbage Truck 1983 5 Straight-line '
1985 Int'l Garbage Truck 1984 3 Straight-line
1987 Int'l Garbage Truck 1986 5 Straight-line
1988 Int'l Garbage Truck 1987 7 Straight-line '
Supporting vehicles '
1987 Ford 1986 5 Straight-line
1987 Buick 1987 5 Straight-line
1989 Ford Bronco 1988 5 Accelerated '
1989 Ford F-150 Pickup 1988 5 Accelerated
Major repairs and 1
replacements
Overhauling engines '
and other major
repairs 1982-1988 3-7 Straight-line
Totals '
Other direct vehicle expenses: '
Fuel
Vehicle insurance
Vehicle license, tags and tax '
Total other direct vehicle
expenses
Total direct vehicle expenses 1
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Prior Years
' Accumulated 1988
Cost/Basis Depreciation Expense
I $ 86, 613 $ 66, 392 $ 5, 392
85,765 54 , 760 6,215
' 74,931 60, 504 5,771
76 ,649 61 , 561 6 , 035
83, 569 25,071 16,714
83,732 5, 981 11,962
491 ,259 274, 269 52 ,089
1 15,483 8, 000 4, 800
14 , 000 1,400 2 ,800
' 16 , 443 - 2, 560
16, 471 2, 560
62, 397 9, 400 12,720
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79, 820 56 , 538 6, 061
' $ 633,476 $ 340,207 70 , 870
1 35,703
35, 858
' 126
' 71 , 687
$ 142 ,557
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MARATHON GARBAGE SERVICE, INC.
SCHEDULE OF GENERAL MAINTENANCE EXPENSES
For the Year Ended December 31, 1988
Year Life-
Acquired Years Method
Depreciation:
Machines and equipment
Lifts, loader and other
equipment 1974-1981 3-10 Straight-line
various equipment 1981-1985 5 Straight-line
Truck/base communi-
cation system 1982 5 Straight-line
Small tools
Tools 1975-1988 3-7 Straight-line
Totals
Other general maintenance expenses: '
Oil , lubricants and coolants
Repair parts and maintenance
Shop supplies
Tires and tubes
Total other general maintenance
expenses
Total general maintenance expenses t
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Prior Years
1 Accumulated 1988
Cost/Basis Depreciation Expense
1
$ 9, 947 $ 9,771 $ 53
1 11 , 342 8 ,969 1,306
20,665 20 , 664 -
1 41,954 39, 404 1 , 359
1 2, 435 1 , 596 120
$ 44 , 389 $ 41 , 000 1 , 479
1
4 ,276
•
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27 ,813
1 18 , 607
117, 205
1 $ 118 ,684
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MARATHON GARBAGE SERVICE, INC. I
SCHEDULE OF GENERAL OVERHEAD EXPENSES
For the Year Ended December 31 , 1988
I
Year Life-
Acquired Years Method '
Depreciation:
Building and components
Office building and
improvements 1960-1980 10-20 Straight-line ,
Paving 1979 10 Straight-line
Building and improve-
ments 1981-1985 10-15 Straight-line '
Improvements 1986 10 Straight-line
Improvements 1988 31. 5 Straight-line
I
Office furniture, fixtures
and equipment '
Miscellaneous items 1965-1974 3-10 Straight-line
Office equipment 1983-1987 5-7 Straight-line
Office equipment 1988 7 Accelerated '
Commercial containers
Containers 1972-1985 3-5 Straight-line
Containers 1986 5 Straight-line
Containers 1987 7 Straight-line '
Containers 1988 7 Accelerated
Totals
Other general overhead expenses: '
Accounting
Electric
Franchise fees - County '
Insurance - general
Legal
_ Miscellaneous
Office expense '
Postage and freight
Property taxes
Rent ,
Security
Taxes and licenses
Telephone
Utilities '
Total other general overhead expenses
Total general overhead expenses
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' Prior Years
Accumulated 1988
' Cost/Basis Depreciation Expense
$ 11 ,110 $ 9, 951 $ 447
10, 899 9, 355 1 , 090
' 21, 008 8, 301 1 , 466
33, 977 5, 097 3 , 398
2, 290 - 15
' 79,284 32 ,704 6, 416
1,772 1 ,772 -
1 ,917 1 ,107 373
I1,896 - 271
5, 585 2 ,879 644
II 94 ,629 86 ,145 3, 972
5,112 1 , 325 1 , 022
' 11 ,601 5,178 - 720 2, 034
740
' 116 , 520 88 , 190 7,768
$ 201 , 389 $ 123 ,773 14 ,828
8,998
3, 409
I 260, 138
36, 343
3, 426
190
' 2,724
2, 395
969
' 44, 555
1, 171
104
' 1, 815
1, 620
367,857
$ 382,685
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IMARATHON GARBAGE SERVICE, INC.
SCHEDULE OF SALARIES AND FRINGE BENEFITS - OFFICERS
' For the Year Ended December 31 , 1988
IOfficers' salaries $ 341,680
Officers' fringe benefits:
' Insurance - group 19, 582
Payroll taxes 13,746
Profit-sharing contribution 31, 290
Uniforms and laundry 728
1 Total officers' fringe benefits 65, 346
' Total officers' salaries and fringe
benefits $ 407,026
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CORPORATE OFFICERS/OWNERS
1 % Job/ Annual
Officer's Name Owned Position Description Time Salary
IRonald Konrath 22 . 50% President Manager Full $ 126 , 000
William Konrath 22. 50% Vice-Pres. Administrator Full 126 ,000
Gregory Konrath 5.00% Treasurer Driver Full 44, 840
IMichael Konrath 0% Secretary Driver Full 44 ,840
$ 341,680
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MARATHON GARBAGE SERVICE, INC.
SCHEDULE OF DISCRETIONARY MANAGEMENT COSTS
For the Year Ended December 31 , 1988
1 Advertising and promotion $ 3, 719
Cash expenses 6 ,111
Donations 9, 436
' Dues and subscriptions 603
Entertainment and travel 3,916
Penalties 42
Total discretionary management costs $ 23 ,827
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1 MARATHON GARBAGE SERVICE, INC.
SCHEDULE OF OTHER INCOME AND EXPENSE
' For the Year Ended December 31, 1988
1 Other income:
Interest income $ 5, 491
' 5,491
Other expense:
Interest expense ( 7,013 )
1 Loss on sale of equipment ( 3 , 570 )
( 10, 583 )
1 Total other income (expense ) $ ( 5, 092 )
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1 MARATHON GARBAGE SERVICE, INC.
SCHEDULE OF RENTED PROPERTY FROM OWNERS
' For the Year Ended December 31, 1988
Name Description of Property Annual Rent
John & Sallie Ronrath Land and buildings $ 44,555
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iOCEAN REEF SOLID WASTE, INC.
TABLE OF CONTENTS
Page No.
INDEPENDENT AUDITORS' REPORT 1
FINANCIAL STATEMENTS
Balance Sheet 2
Statement of Earnings 4
Statement of Retained Earnings 5
Statement of Cash Flows 6
Notes to Financial Statements 7
INDEPENDENT AUDITORS' REPORT ON OTHER FINANCIAL
INFORMATION 12
OTHER FINANCIAL INFORMATION
Schedule of Wages and Fringe Benefits - Employees 13
Schedule of Direct Vehicle Expenses 14
1 Schedule of General Maintenance Expenses 15
Schedule of General Overhead Expenses 16
1 Schedule of Salaries and Fringe Benefits - Officers 17
Schedule of Other Income and Expense 18
1 Schedule of Rented Property from Owners 19
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k.4
PARKS & NILES, P.A., CERTIFIED PUBLIC ACCOUNTANTS
I
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INDEPENDENT AUDITORS' REPORT
' Board of Commissioners
Monroe County, Florida
We have audited the accompanying balance sheet of Ocean Reef Solid
' Waste, Inc. as of December 31, 1988 , and the related statements of
earnings, retained earnings, and cash flows for the year then
ended. These financial statements are the responsibility of the
' Company's management. Our responsibility is to express an opinion
on these financial statements based on our audit.
We conducted our audit in accordance with generally accepted
.• a' " ng standards . Those standards require that we plan and
perform the audit to obtain reasonable assurance about whether the
financial statements are free of material misstatement. An audit
includes examining, on a test basis, evidence supporting the
amounts and disclosures in the financial statements. An audit
also includes assessing the accounting principles used and signif-
icant estimates made by management, as well as evaluating the
' overall financial statement presentation. We believe that our
audit provides a reasonable basis for our opinion.
In our opinion, the financial statements referred to above present
fairly, in all material respects, the financial position of Ocean
Reef Solid Waste, Inc. as of December 31, 1988, and the results of
its operations and its cash flows for the year then ended in
conformity with generally accepted accounting principles .
a al; y.446, //A
CERTIFIED PUBLIC ACCOUNTANTS
' May 25, 1989
1
2432 Flagler Avenue, Key West, Florida 33040 / 1305) 294-6606
1
■ OCEAN REEF SOLID WASTE, INC.
■ BALANCE SHEET
December 31, 1988
1
ASSETS
1 Current assets:
Cash
$ 98
Property and equipment, at cost:
Vehicles $ 174,694
Machines and equipment 2,243
Commercial containers 15, 354
1 192,291
1 Less accumulated depreciation 47, 738
Net property and equipment 144 , 553
1 Other assets :
Franchise rights, net 2,500
Due from parent company 48, 071
1 Total other assets 50, 571
1 Total assets $ 195,222
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1
1 The accompanying notes are an integral part of these financial
statements.
1 -2
1
1 OCEAN REEF SOLID WASTE, INC.
BALANCE SHEET
December 31, 1988
1
1 LIABILITIES AND STOCKHOLDER'S EQUITY
1 Current liabilities:
Accounts payable $ 5,130
Income taxes payable 36, 000
1 Total current liabilities $ 41 ,130
Stockholder's equity:
1 Common stock - $ .01 par value
per share; 1000 shares
authorized, issued and outstanding 10
1 Additional paid-in capital 36, 418
Retained earnings 117 ,664
1 Total stockholder' s equity 154, 092
Total liabilities and stock-
holder's equity $ 195,222
1
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1
1 The accompanying notes are an integral part of these financial
statements.
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1 OCEAN REEF SOLID WASTE, INC.
STATEMENT OF EARNINGS
For the Year Ended December 31, 1988
1
Operating revenues:
1 Monroe County residential customers $ 201, 555
Monroe County commercial customers 151 ,712
1 Total operating revenues 353, 267
Operating expenses:
1 Employee wages $ 77 , 425
Employee fringe benefits 11 , 361
Direct vehicle expenses 37 , 396
General maintenance 11 , 635
1 General overhead 96, 192
Total operating expenses 234 , 009
1 119, 258
1 Officers expenses:
Officers salaries 22 , 005
Officers fringe benefits 1 ,640
1 Total officers expenses 23,645
Net earnings from operations 95, 613
1 Other income (expense ) :
Other income 50
1 Total other income (expense) 50
Earnings before provision for
1 income taxes 95, 663
Provision for income taxes 36 ,000
1 Net earnings $ 59,663
1
1
1
1 The accompanying notes are an integral part of these financial
statements .
1 _4
1
1 OCEAN REEF SOLID WASTE, INC.
STATEMENT OF RETAINED EARNINGS
For the Year Ended December 31 , 1988
1
1 Balance, beginning of year $ 58 , 001
Net earnings for the year 59,663
1 Balance, end of year $ 117,664
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1
1 The accompanying notes are an integral part of these financial
statements.
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IOCEAN REEF SOLID WASTE, INC.
STATEMENT OF CASH FLOWS
For the Year Ended December 31, 1988
I
Cash flows from operating activities:
INet earnings $ 59, 663
Add:
I Depreciation 16, 134
Amortization 15, 000
Total 90, 797
I Subtract:
Decrease in accounts payable $ 159
I Decrease in accrued interest payable 1 , 328
Decrease in income taxes payable 8, 294
9, 781
I Net cash inflow from
operating activities 81 ,016
ICash flows from financing activities:
Cash outflow from payment of
installment note payable 13, 280
ITotal cash outflow from
financing activities ( 13, 280 )
1 Cash flows from investing activities :
Cash inflow from net increase in
amount due from parent company 20 ,883
I Cash outflow for purchase of property
and equipment 88 ,619
I Net cash outflow from
investing activities ( 67 ,736 )
Net cash flow from all activities -
Cash beginning of year 98
ICash end of year $ 98
IInterest paid $ 1 , 328
Income taxes paid $ 44 , 294
I
1 The accompanying notes are an integral part of these financial
statements.
1
OCEAN REEF SOLID WASTE, INC.
NOTES TO FINANCIAL STATEMENTS
December 31, 1988
i
1 . Organization:
Ocean Reef Solid Waste, Inc. (Company) was incorporated in
1986 under the laws of the State of Florida. On January 1 ,
1987, Ocean Reef Club, Inc. (Parent Company) transferred the
assets of its Garbage Collection Department to Ocean Reef
Solid Waste, Inc. in exchange for its stock . Ocean Reef Solid
Waste, Inc. is wholly owned by Ocean Reef Club, Inc. The
Company' s main business activity is the collection and
disposition of garbage.
1 The Company entered into a franchise agreement on December 15,
1987 with the Board of County Commissioners of the Monroe
County Municipal Service District and was awarded the
exclusive rights to collect and dispose of all the garbage in
its assigned territory which encompasses all Ocean Reef
properties . This right was granted for the five year period
1 commencing on January 1, 1988 and terminating on December 31 ,
1992 . The agreement states that the Company shall make no
expenditures in reliance that the contract will be extended
beyond its present term. The District provides and operates a
solid waste disposal facility to receive the garbage
collections .
Compensation rates for the collection services are set
annually by the County. For the year ended December 31, 1988 ,
the Company received $6 .00 per month for each residential unit
in its assigned territory assessed by the County. For this
same period, the franchise agreement required that commercial
units be billed by the Company based on a rate schedule
established by the County. For the period of January 1 , 1988
1 through December 31, 1988, a tipping fee of $18. 00 per ton for
all solid waste delivered to the disposal facility was
remitted to the County on a monthly basis . The County
reserves the right to increase or decrease the tipping fee on
an annual basis so the County's franchise fee, whether by
percentage of gross commercial revenue or by tipping fee,
remains twenty-nine percent (29% ) . If the County Commission
exercises its right under this provision of the agreement, the
Company will incur additional franchise fees of $7 , 476.
2. Significant Accounting Policies :
' ( a) Method of accounting and reporting period
Ocean Reef Solid Waste, Inc. maintains its records on the
accrual basis with a calendar year end.
1
OCEAN REEF SOLID WASTE, INC.
NOTES TO FINANCIAL STATEMENTS (CONTINUED)
December 31 , 1988
1
2 . Significant Accounting Policies (Continued) :
(b) Depreciation
Depreciation of property and equipment is provided on a
basis estimated to be sufficient to spread the cost of
the assets over their estimated useful lives. The
Company uses the straight-line method to determine
depreciation. A summary of the estimated useful lives in
years for the principal classifications of property and
equipment is as follows:
Classification Useful lives
vehicles 2-10
Machines and equipment 5
Containers 1-5
The Company has followed the policy of charging
expenditures for maintenance and repairs to operations as
incurred. Expenditures for betterments and major
-- renewals have been capitalized and depreciated over their
estimated useful lives.
(c) Revenue recognition
Commercial accounts are billed on a monthly basis in
accordance with the County' s rate schedule, except for
dock slips. The dock slips are billed at a rate of
$12. 50 per month. Revenue is recognized in the month of
service.
3 Residential accounts are billed by the County, except for
special pick ups. Each month the County remits an
amount equal to $6 .00 per unit times the number of units
serviced for the previous month. In addition, the
homeowners pay $6. 50 per unit per month. This covers the
additional collection services provided to the
residential customers . Revenue is recognized when the
service is rendered.
(d) Amortization
The cost of the franchise rights is amortized over a five
year period to coincide with the term of the original
franchise agreement between the County and Ocean Reef
Club, Inc. The straight-line method is used to calculate
amortization expense .
1 E
I
OCEAN REEF SOLID WASTE, INC.
i NOTES TO FINANCIAL STATEMENTS (CONTINUED)
December 31 , 1988
I
2. Significant Accounting Policies ( Continued) :
(e ) Income taxes
I The Company files consolidated federal and state income
tax returns with its Parent Company on a calendar year
basis. Maximum corporate tax rates ( 34% for federal and
5. 5% for Florida) are used by the Company to calculate
its income tax provision.
I3. Franchise Rights:
On January 1 , 1984 , Ted Carter Enterprises , Inc. D/B/A Keys
I Sanitary Service and Ocean Reef Club, Inc. entered into an
agreement whereby Ocean Reef Club, Inc. purchased the
exclusive right to collect and dispose of garbage for the
Ocean Reef area for the purchase price of $75,000 . This
I obligation was paid initially by $21 ,880 owed to Ocean Reef
Club, Inc. at the time of the purchase , with the balance of
$53 ,120 payable in four equal annual installments of $13,280
I plus ten percent ( 10% ) interest. The final installment of
$13 ,280 plus interest was paid on January 4, 1988 .
On December 31 , 1988 , the Company had unamortized franchise
rights of $2, 500 .
4 . Operating Leases:
I
In 1988 , the Parent Company leased five trucks used by Ocean
Reef Solid Waste, Inc. for trash pick up. Three of these
t leases expired during 1988 . In March 1989 , the remaining two
leases were cancelled by the Parent Company and the Company
subsequently purchased these vehicles outright.
Lease expense for the year ended December 31 , 1988 was
$6,197 .
I
5. Related Party Transactions :
IThe Company rents office space from its Parent Company under a
verbal agreement at a rate of $100 per month. In addition,
the Parent Company assesses the Company for various
I administrative and overhead expenses based on various
allocation methods. The total of these expenses for the year
ended December 31 , 1988 was $49, 554 .
I
OCEAN REEF SOLID WASTE, INC.
NOTES TO FINANCIAL STATEMENTS (CONTINUED)
December 31 , 1988
1
5. Related Party Transactions ( Continued) :
All receipts are deposited and certain expenses are paid by
the Parent Company. Cash is transferred periodically to Ocean
3 Reef Solid Waste, Inc. to cover disbursements. These trans-
actions are recorded on the Company' s books through the
intercompany account.
The Company collects trash from several of the Parent Company
divisions and businesses owned by the Parent Company. The
Company charges the Parent commercial fees as established by
the annual County ordinance . 1988 commercial revenues
attributable to the Parent Company were $94 , 362.
3 6 . Income Taxes:
The components of the provision for income taxes are currently
payable as follows:
Provision for federal income taxes $ 30,700
1 Provision for state income taxes 5, 300
1 Total provision for income taxes $ 36 , 000
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OTHER FINANCIAL INFORMATION
3
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PARKS& NILES, P.A., CERTIFIED PUBLIC ACCOUNTANTS
1
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1 INDEPENDENT AUDITORS' REPORT ON OTHER FINANCIAL INFORMATION
1
Board of Commissioners
Monroe County, Florida
Our report on our audit of the basic financial statements of Ocean
Reef Solid Waste, Inc. for 1988 appears on page 1 . That audit was
made for the purpose of forming an opinion on the basic financial
statements taken as a whole. The information presented in the
following pages, the format of which is required by the franchise
' agreement, is presented for purposes of additional analysis and is
not a required part of the basic financial statements. Such
information has been subjected to the auditing procedures applied
in the audit of the basic financial statements and, in our
1 opinion, is fairly stated in all material respects in relation to
the basic financial statements taken as a whole .
& f 7 cac Xg
CERTIFIED PUBLIC ACCOUNTANTS
1 May 25, 1989
1
1
1
1 2432 Flagler Avenue, Key West, Florida 33040 / )305) 294-6606
I
OCEAN REEF SOLID WASTE, INC.
SCHEDULE OF WAGES AND FRINGE BENEFITS - EMPLOYEES
For the Year Ended December 31, 1988
1
Employees wages:
Payroll
$ 77, 425
Employees fringe benefits:
' Insurance - group 2,843
Payroll taxes 6, 378
Tolls 283
' Uniforms and laundry 1 , 503
Other employee benefits 354
' Total employees fringe benefits 11,361
Total employees wages and fringe
benefits $ 88,786
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OCEAN REEF SOLID WASTE, INC.
SCHEDULE OF DIRECT VEHICLE EXPENSES
For the Year Ended December 31, 1988
1
Year Life- 1
Acquired Years Method
Depreciation: '
Garbage vehicles
1979 GMC Garbage Packer 1984 5 Straight-line
1980 GMC Garbage Packer 1984 5 Straight-line '
Cushman Haulster 1980 2 Straight-line
Cushman Haulster 1985 5 Straight-line
1987 Ford Garbage Packer 1987 10 Straight-line t
1988 Ford Loadmaster 1988 10 Straight-line
1985 Toyota pick-up 1988 3 Straight-line
Totals '
Other direct vehicle expenses : '
Fuel
Truck leasing
Vehicle insurance
Total other direct vehicle
expenses
Total direct vehicle expenses t
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1 Prior Years
Accumulated 1988
Cost/Basis Depreciation Expense
1
$ 8, 300 $ 6 ,363 $ 1, 660
1 6, 500 2, 863 4 ,983
2, 863 1,300
-
8,181 4, 636 1 ,636
' 63,689 4 ,246 6, 369
81, 080 -
2 , 702
4, 081 227
1 $ 174 ,694 $ 23 , 091
13, 894
6, 907
6,197
10, 398
•
23, 502
$ 37, 396
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OCEAN REEF SOLID WASTE, INC.
SCHEDULE OF GENERAL MAINTENANCE EXPENSES
For the Year Ended December 31 , 1988
Year Life-
Acquired Years Method
Depreciation: ,
Machines and equipment
Floor jack 1982 5 Straight-line
Steam denny 1985 5 Straight-line
Totals
Other general maintenance expenses : '
Oil, lubricants and coolants
Repair parts and maintenance
Service supplies
Tires and tubes
Total other general maintenance
expenses
Total general maintenance expenses
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1
Prior Years
Accumulated 1988
Cost/Basis Depreciation Expense
1
$ 196 $ 196 $
1 2, 047 853 409
$ 2,243 $ 1 , 049 409
1
319
8, 436
2, 030
1
441
11,226
■
$ 11, 635
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OCEAN REEF SOLID WASTE, INC. t
SCHEDULE OF GENERAL OVERHEAD EXPENSES
For the Year Ended December 31, 1988
Year Life- '
Acquired Years Method
Depreciation: ,
Commercial containers
Containers 1979 1 ht-line
Strai
Containers 1980 g ,
Containers 2 Straight-line
1982
Containers 1983 5 Straight-line
Containers 5 Straight-line
1984 5 Straight-line
'
Containers 1986
Containers 1987 5 Straight-line
Containers 1988 5 Straight-line
Totals ,
Other general overhead expenses: '
Accounting
Amortization
Bank charges
Electric
Franchise Fees - County
Insurance - general
Legal
Miscellaneous
Property taxes
Rent
Telephone
Utilities
Total other general overhead
expenses
Total general overhead expenses I
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4 Prior Years
Accumulated 1988
Cost/Basis Depreciation Expense
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$ 1,019 $ 1 , 019 $ -
2 ,799 2 , 799 -
1, 166 1, 167 -
1 ,171 956 215
1 ,111 685 222
I2,651 574 530
1,979 264 396
3, 458 - 468
I $ 15,354 $ 7 , 464 1 ,831
I
9, 600
15, 000
. 52
600
36, 520
26, 460
2, 374
251
1 1, 633
1 , 200
138
533
94 , 361
1 $ 96, 192
3
OCEAN REEF SOLID WASTE, INC.
SCHEDULE OF SALARIES AND FRINGE BENEFITS - OFFICERS
For the Year Ended December 31 , 1988
1
1 Officers salaries
$ 22 , 005
Officers fringe benefits:
Insurance - group
1 Payroll taxes 165
Meals and entertainment 1 , 034
441
1 Total officers fringe benefits 1 ,640
Total officers salaries and fringe
benefits $ 23 ,645
1 CORPORATE OFFICERS/OWNER
$ Job/ Annual
1 Officers Name Owned Position Description Time Salary
Russell Post 0% President Part $ 4 , 500
Richard Guinand 0% Vice President Part 5,005
1 Gene Palrud 0% Vice President Part 12, 500
1 $22 , 005
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OCEAN REEF SOLID WASTE, INC.
SCHEDULE OF OTHER INCOME AND EXPENSE
For the Year Ended December 31, 1988
I
Other income :
Other income $ 50
50
Other expense
Total other income (expense) $ 50
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OCEAN REEF SOLID WASTE, INC.
■ SCHEDULE OF RENTED PROPERTY FROM OWNERS
For the Year Ended December 31, 1988
2
Name Description of Property P � Y Annual Rent
Ocean Reef Club, Inc. Office space
$ 1 ,200
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1 MUNICIPAL SERVICE DISTRICT
MONROE COUNTY, FLORIDA
TABLE OF CONTENTS
1
1 Page No.
INDEPENDENT AUDITORS' REPORT ON OTHER FINANCIAL
INFORMATION 1
COMBINED STATEMENT OF EARNINGS (LOSS) - FRANCHISEES 2
1 COMBINED SCHEDULES - FRANCHISEES
Wages and Fringe Benefits - Employees 3
1 Direct Vehicle Expenses 4
General Maintenance Expenses 5
1 General Overhead Expenses 6
1 Salaries and Fringe Benefits - Officers 7
Discretionary Management Costs 8
1 Other Income and Expense 9
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' PARKS & NILES, P.A., CERTIFIED PUBLIC ACCOUNTANTS
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INDEPENDENT AUDITORS' REPORT ON OTHER FINANCIAL INFORMATION
Board of Commissioners
Monroe County, Florida
Our reports on our audits of the basic financial statements of the
franchisees of the Municipal Service District of Monroe County,
Florida are presented in the preceding sections of this report.
The audits were made for the purpose of forming an opinion on the
basic- financial statements taken as a whole . The information
presented in the following pages , the format of which is required
by the franchise agreement, is presented for purposes of
' additional analysis and is not a required part of the basic
financial statements. Such information has been subjected to the
auditing procedures applied in the audits of the basic finanical
t statements and, in our opinion, is fairly stated in all material
respects in relation to the basic financial statements taken as a
whole.
s ate,; ,41,9
CERTIFIED PUBLIC ACCOUNTANTS
' June 29, 1989
1
1
2432 Flagler Avenue, Key West, Florida 33040 / (305) 294-6606
I
MUNICIPAL SERVICE DISTRICT 1
MONROE COUNTY, FLORIDA
COMBINED STATEMENT OF EARNINGS (LOSS ) - FRANCHISEES '
For the Year Ended December 31 , 1988
Baltuff Bland '
Disposal Disposal
Service, Service, '
Inc. Inc.
Operating revenues: IIMonroe County residential customers $ 224,454 $ 412 ,062
Monroe County commercial customers 241, 903 199, 869
Total operating revenues 466 ,357 611 ,931 '
Operating expenses :
Employees' wages 116 ,947 156 ,144 '
Employees' fringe benefits 9 , 634 24, 403
Direct vehicle expenses 48,696 96, 569
General maintenance 55,295 63 ,196 '
General overhead 138 ,649 110 ,789
Total operating expenses 369, 221 451 , 101
97, 136 160 ,830 I
Officers ' expenses: '
Officers' salaries 35, 698 95,866
Officers' fringe benefits 5,120 12, 476
Discretionary management costs 5, 133 1, 776
Total officers' expenses 45, 951 110,118 '
Earnings ( loss) from operations 51 , 185 50, 712 '
Other income ( expense ) ( 701 ) ( 3 ,242 )
Earnings ( loss) before provision '
for income taxes 50, 484 47 , 470
Provision for income taxes - 9, 605 '
Net earnings ( loss) $ 50, 484 $ 37 ,865
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1 Ted Carter Island Marathon
Enter- Disposal Garbage Ocean Reef
prises, Company, Service , Solid Elimina- Combined
1 Inc. Inc. Inc. Waste, Inc. tions Total
I
$ 780, 600 $ 172 ,286 $ 488 ,760 $ 201, 555 $ - $ 2 , 279,717
773 , 396 467 , 393 776, 402 151 ,712 2, 610 ,675
1 1 , 553,996 639,679 1, 265,162 353 ,267 - 4 ,890, 392
401 , 027 112, 421 195, 308 77 , 425 - 1 , 059 , 272
50 ,640 26,821 29, 506 11 , 361 _ 152, 365
207, 744 72,699 142 , 557 37, 396 605, 661
153, 649 39 ,062 118 , 684 11 , 635 - 441 , 521
1 372, 445 203 ,896 382, 685 96 , 192 - 1 , 304 ,656
1 ,185, 505 454 ,899 868,740 234 ,009 - 3, 563, 475
1 368, 491 184 ,780 396 , 422 119 , 258 - 1, 326 ,917
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424 ,846 66 ,866 341 , 680 22, 005 - 986, 961
129, 396
8 , 381 36 , 433 65, 346 1 ,640
10 ,203 4, 390 23,827 - - 45, 329
1 443, 430 107,689 430 ,853 23, 645 - 1 ,161 ,686
( 74,939) 77 ,091 ( 34, 431 ) 95,613 - 165,231
I5,913 6, 864 ( 5, 092 ) 50 - 3,792
1 ( 69, 026 ) 83 ,955 ( 39, 523) 95,663 - 169 , 023
( 82 , 550 ) 15, 187 ( 4 , 382 ) 36 , 000 - ( 26, 140 )
I $ 13, 524 $ 68,768 $ ( 35,141 ) $ 59 , 663 $ - $ 195,163
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MUNICIPAL SERVICE DISTRICT '
MONROE COUNTY, FLORIDA
COMBINED SCHEDULE OF WAGES AND '
FRINGE BENEFITS - EMPLOYEES - FRANCHISEES
For the Year Ended December 31 , 1988
Baltuff Bland
Disposal Disposal '
Service, Service,
Inc. Inc.
Employees' wages: '
Payroll $ 111,731 $ 156 ,144
Bonuses 468
Casual labor 4 ,748 - ,
Total employees' wages 116, 947 156 ,144
Employees' fringe benefits : '
Insurance - group - 11 , 317
Payroll taxes 9 , 091 12 , 537
Pension/profit-sharing '
plan contribution - -
Tolls - -
Uniforms and laundry 543 549 ,
Other - -
Total employees' fringe benefits 9 ,634 24 , 403 '
Total employees' wages and fringe
benefits $ 126, 581 $ 180, 547
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3_
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Ted Carter Island Marathon
Enter- Disposal Garbage Ocean Reef
'
prises, Company, Service, Solid Elimina- Combined
Inc. Inc. Inc . Waste, Inc. tions Total
' $ 399, 412 $ 112,256 $ 195, 308 $ 77, 425 $ - $ 1, 052,276
468
1 ,615 165 - - - 6, 528
401, 027 112, 421 195, 308 77, 425 - 1 ,059, 272
11 ,676 12, 397 3 ,295 2 ,843 - 41 , 528
32, 457 9, 013 16 , 047 6 , 378 - 85, 523
' - 1 , 799 3, 710 - - 5, 509
283 283
6 , 507 3, 612 3 ,818 1 , 503 - 16, 532
us
-- - - 2 ,636 354 - 2 , 990
50,640 26 ,821 29 , 506 11, 361 - 152, 365
' $ 451 , 667 $ 139, 242 $ 224 ,814 $ 88 , 786 $ - $ 1 ,211 ,637
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MUNICIPAL SERVICE DISTRICT
MONROE COUNTY, FLORIDA
COMBINED SCHEDULE OF DIRECT
VEHICLE EXPENSES - FRANCHISEES
For the Year Ended December 31, 1988
Baltuff Bland
Disposal Disposal
Service, Service,
Inc. Inc.
Depreciation:
Garbage vehicles $ 13, 126 $ 41, 348
Supporting vehicles 3, 013 3, 576 '
Major repairs and
replacements 1 , 051
Totals 17 , 190 44 ,924
Other direct vehicle expenses:
Fuel 17, 399 21, 290
Truck leasing - 4, 801
Vehicle insurance 13, 206 25, 248
Vehicle license, tags and tax 901 306
Total other direct vehicle
expenses 31 , 506 51 ,645 '
Total direct vehicle expenses $ 48 ,696 $ 96, 569
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Ted Carter Island Marathon
Enter- Disposal Garbage Ocean Reef
prises, Company, Service, Solid Elimina- Combined
Inc. Inc. Inc. Waste, Inc. lions Total
1 $ 66 , 451 $ 22, 607 $ 52, 089 $ 13 ,894 $ - $ 209, 5151
1 15, 360 6, 411 12 ,720 - - 41, 080
1
12,289 339 6, 061 - - 19 ,740
1 94 ,100 29, 357 70,870 13 ,894 - 270, 335
1 40 , 533 13, 414 35,703 6 , 907 - 135, 246
6 , 197 - 10 , 998
69,600 27 ,483 35 , 858 10, 398 - 181 ,793
1 -- - - 3, 511 2 , 445 126 - - 7, 289
1 113 ,644 43 , 342 71 ,687 23 , 502 - 335, 326
$ 207 ,744 $ 72 ,699 $ 142 , 557 $ 37, 396 $ - $ 605,661
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1
MUNICIPAL SERVICE DISTRICT
MONROE COUNTY, FLORIDA
COMBINED SCHEDULE OF GENERAL
MAINTENANCE EXPENSES - FRANCHISEES
For the Year Ended December 31, 1988
1
Baltuff Bland
Disposal Disposal
Service, Service,
Inc. Inc.
Depreciation: ,
Machines and equipment $ 1 , 439 $ 1 , 169
Small tools 75 146
Totals 1, 514 1,315
Other general maintenance expenses: '
Equipment rental 1 ,118 -
Oil , lubricants and coolants 4,642 3 , 078
Repair parts and maintenance 28, 315 33 ,729
Shop supplies 3, 027 5,254
Small tools expense 1, 447 -
Subcontracted maintenance 6, 576 4, 971
Tires and tubes 8,656 14,849
Total other general maintenance
expenses 53 ,781 61 ,881
Total general maintenance
expenses $ 55, 295 $ 63 ,196 '
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1
Ted Carter island Marathon
' Enter- Disposal Garbage Ocean Reef
prises, Company, Service, Solid Elimina- Combined
Inc. Inc. Inc. Waste, Inc. lions Total
1 $ 6, 892 $ 1 ,891 $ 1 , 359 $ 409 $ - $ 13, 159
' - 879 120 - - 1, 220
6,892 2 ,770 1 , 479 409 - 14 , 379
1 - - 1 ,118
9,135 1, 651 4 ,276 319 - 23,101
1 75,842 19, 315 66 , 509 8 , 436 _ 232, 146
17, 590 6 , 426 27 ,813 2, 030 62 ,140
- 33 - - - 1, 480
- - - - 11 , 547
- 44, 190 8 ,867 18, 607 441 - 95, 610
1
1 146, 757 36 ,292 117, 205 11, 226 - 427 ,142
' $ 153, 649 $ 39, 062 $ 118,684 $ 11, 635 $ - $ 441 ,521
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MUNICIPAL SERVICE DISTRICT 1
MONROE COUNTY, FLORIDA
COMBINED SCHEDULE OF GENERAL '
OVERHEAD EXPENSES - FRANCHISEES
For the Year Ended December 31 , 1988
1
Baltuff Bland
Disposal Disposal ,
Service, Service,
Inc. Inc.
Depreciation: '
Building and components $ - $ 6, 006
Office furniture, fixtures '
and equipment 492 857
Commercial containers 4, 148 5,785
Totals 4, 640 12 ,648 1
Other general overhead expenses : '
Accounting 3 , 057 5, 360
Amortization - -
Bad debts 1 ,603 2, 544 '
Bank charges - 161
Electric 843 814
Equipment rental - -
Exterminating - - '
Franchise fees - County 77,987 53, 337
Insurance - general 14 , 495 25,740
Legal 1, 394 2, 719 '
Miscellaneous 822 -
Office expense 1, 498 1 , 085
Pension plan administration - -
Postage and freight 768 727 '
Property taxes - 1 ,832
Radio service - 965
Rent 24 ,000 - '
Security 3 ,897 703
Taxes and licenses 1 , 441 242
Telephone 1 ,604 1, 196 ,
Travel - 211
Utilities 600 505
Total other general overhead '
expenses 134 , 009 98 ,141
Total general overhead expenses $ 138 ,649 $ 110,789
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1
1
1
1
Ted Carter Island Marathon
Enter- Disposal Garbage Ocean Reef'
prises, Company, Service, Solid Elimina- Combined
Inc. Inc. Inc. Waste, Inc. tions Total
1 $ 7, 188 $ 1, 530 $ 6 , 416 $ - $ - $ 21 , 140
1 3, 303 454 644 - - 5,750
24 ,022 7 ,456 7, 768 1 ,831 - 51, 010
1 34 , 513 9, 440 14 ,828 1 ,831 - 77 , 900
1 11 ,600 5, 436 8 ,998 9, 600 - 44 ,051
- 164 - 15, 000 - 15,164
2, 451 28 - - - 6, 626
--- - - 52 - 213
1,254 2,185 3, 409 600 - 9, 105
- 484 - - - 484
1 ,015 - - - - 1, 015
227,774 146, 146 260,138 36 , 520 801,902
72, 986 24 , 345 36 , 343 26 , 460 - - 200, 369
3, 962 2,899 3 , 426 2, 374 _ 16, 774
426 190 251 1, 689
3, 712 4 , 095 2 ,724 - - 13, 114
2, 725 1 , 023 - - - 3, 748
I -
2 , 395 3,890
2, 119 1 ,855 969 1 ,633 8 , 408
733 - - - - 1 ,698
' _ 1 , 590 44, 555
1, 171 1 ,200 _ 71 , 345
202 5, 973
2, 540 82 104 - - 4 , 409
1 _4,160 3, 187 1 ,815 - 138 - 12, 100
-
-
-
-
211
475 735 1 ,620 533 4, 468
I337, 932 194 , 456 367 ,857 94 , 361 - 1, 226, 756
1 $ 372 ,445 $ 203,896 $ 382 ,685 $ 96, 192 $ - $ 1 , 304 ,656
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MUNICIPAL SERVICE DISTRICT 1
MONROE COUNTY, FLORIDA
COMBINED SCHEDULE OF SALARIES AND '
FRINGE BENEFITS - OFFICERS - FRANCHISEES
For the Year Ended December 31, 1988
1
Baltuff Bland
Disposal Disposal '
Service, Service,
Inc. Inc.
Officers' salaries $ 35,698 $ 95,866 1
Officers' fringe benefits:
Insurance - group 2, 313 4,764 '
Payroll taxes 2 ,807 6,885
Pension/profit-sharing
plan contribution - - '
Uniforms and laundry - 827
Meals and entertainment - -
Total officers' fringe benefits 5, 120 12, 476 ,
Total officers' salaries and
fringe benefits $ 40, 818 $ 108, 342 '
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1
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1
1
Ted Carter Island Marathon
' Enter- Disposal Garbage Ocean Reef
prises, Company, Service, Solid Elimina- Combined
Inc. Inc. Inc . Waste, Inc. tions Total
1 $ 424, 846 $ 66 ,866 $ 341 ,680 $ 22, 005 $ - $ 986 ,961
' 4, 938 4,600 19, 582 165 _ 36 , 362
3, 443 5,151 13 ,746 1, 039 33 ,066
- 26 ,682 31, 290 _ - 57, 972
728 1 , 555
441 441
1 8, 381 36, 433 65, 346 1 ,640 - 129, 396
$ 433,227 $ 103 ,299 $ 407, 026 $ 23,645 $ - $ 1 , 116 , 357
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MUNICIPAL SERVICE DISTRICT 1
MONROE COUNTY, FLORIDA
COMBINED SCHEDULE OF DISCRETIONARY t
MANAGEMENT COSTS - FRANCHISEES
For the Year Ended December 31 , 1988
1
Baltuff Bland
Disposal Disposal '
Service, Service,
Inc. Inc.
Advertising and promotion $ - $ - 1
Cash expenses
Christmas expense 1 ,220 -
Donations 2,139 245 '
Dues and subscriptions 488 247
Employee gifts
Entertainment 973 1 ,229 '
Penalties 55
Travel, seminars and training 313 -
$ 5, 133 $ 1, 776 '
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1
1
1
1
1
1
1
1
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Ted Carter Island Marathon
I
Enter- Disposal Garbage Ocean Reef
prises, Company, service, Solid Elimina- Combined
Inc. Inc. Inc. Waste , Inc. lions Total
I $ - 548 $ 45 $ 3 ,719 $ _ $ - 4 , 312
6 , 111 6 ,111
- - - - - 1, 220
2 ,797 29 9, 436 - - 14 , 646
519 290 603 2 ,147
2,096 - - - - 2, 096
3 , 660 - 3 ,916 - - 9,778
583 739 42 1 , 419
3 ,287 - - - 3, 600
I $ 10, 203 $ 4 , 390 $ 23 ,827 $ - $ - $ 45, 329
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1
MUNICIPAL SERVICE DISTRICT '
MONROE COUNTY, FLORIDA
COMBINED SCHEDULE OF OTHER INCOME '
AND EXPENSE - FRANCHISEES
For the Year Ended December 31 , 1988
Baltuff Bland
Disposal Disposal '
Service, Service,
Inc. Inc.
Other income: '
Interest income $ 1, 142 $ 16
Miscellaneous income 27 16
Rental income 3 ,110 '
Gain on sale of equipment, net - 380
Total other income 1 ,169 3 , 522 '
Other expense :
Interest expense ( 1 ,870 ) ( 6 ,764 ) I
Loss on disposal of equipment - _
Total other expense ( 1 ,870 ) ( 6,764 )
Total other income (expense) $ ( 701) $ ( 3, 242 ) I
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5
Ted Carter Island Marathon
1 Enter- Disposal Garbage Ocean Reef
prises, Company, Service, Solid Elimina- Combined
Inc. Inc. Inc. Waste, Inc. tion6 Total
I $ 20, 303 $ 14,035 $ 5, 491 $ - $ - $ 40, 987
85 285 - 50 - 463
1 -
- _ _ _ _ 3 ,110
380
1 20, 388 14, 320 5, 491 50 - 44 , 940
( 8,686 ) ( 7, 456 ) ( 7,013 ) - - ( 31 , 789 )
I ( 5,789) - ( 3, 570) -
( 9 , 359 )
( 14, 475 ) ( 7 , 456 ) ( 10,583 ) - - ( 41 , 148 )
•II
$ 5,913 $ 6 ,864 $ ( 5,092 ) $ 50 $ - $ 3, 792
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