CULTURAL COUNCIL OF NOTES TO FINANCIAL STATEMENTS

PALM BEACH COUNTY, INC.

For the Year Ended September 30, 2022

7. Pledges Receivable

Pledges receivable consist of unconditional promises to give from individuals. Pledges that are expected to be collected within one year are recorded at their net realizable value, while those that are expected to be collected in future years are recorded at the present value of their estimated future cash flows. The discount on those amounts is computed using an interest rate applicable to the years in which the promises are received (1.0% as of the date of the capital campaign/major gift). Pledges receivable as of September 30, 2022 was $50,000.

Management believes that pledges receivable are fully collective and, therefore, no allowance for uncollectible receivables was considered necessary.

8. Beneficial Interest in Trust

The Council is the income beneficiary of a perpetual trust, whose assets are held by the Community Foundation for Palm Beach and Martin Counties, Inc. (the “Foundation”) as an endowed component fund (“Fund”). Under the terms of the Fund, the Foundation’s Board of Directors has a variance power to modify any restriction or condition on the distribution of funds for any specific charitable purpose or to specified organizations, if in their sole judgement (without the approval of any trustee, custodian, or agent), such restriction or conditions becomes, in effect, unnecessary, incapable of fulfillment or inconsistent with the charitable needs of the community or the area served by the Foundation. The Fund is subject to the Foundation’s investment and spending policies. During the year ended September 30, 2022, the Council received $7,500 distributions from the Fund.

9. Property and Equipment

Property and equipment as of September 30, 2022, consisted of the following:

10. Note Payable

Note payable to the City of Lake Worth Community Redevelopment Agency (LW CRA). The note is interest free and non-amortizing. The principal will be forgiven as long as the Council fulfills the restrictions surrounding the use of the loan funds. The final ten percent (10%) of the original note was forgiven during the year ended September 30, 2022.

11. Line of Credit

The Council received a commitment from a financial institution for a line of credit in the amount of $250,000 secured by equipment, fixtures and general intangibles. Interest is due monthly at the greater of the Bank’s Prime Rate or 7.62% as of September 30, 2022. As of September 30, 2022, there is no outstanding balance.

PALM BEACH COUNTY, INC.

For the Year Ended September 30, 2022

12. Net Assets with Donor Restrictions

Net assets with donor restrictions as of September 30, 2022 consisted of the following: for a specific purpose:

13. Pension Plan

The Council has established a 401(k) defined contribution plan for the benefit of substantially all eligible employees. Employees who work 1,000 hours or more are eligible to receive a fully vested employer contribution after one year of employment and are eligible to contribute to the plan after 90 days of employment. The Council currently contributes 6% (a mandatory 3% safe harbor contribution and an additional 3% discretionary contribution) of the employee’s base salary, regardless of the employee’s contribution.

The employee may contribute to the Plan up to the total deferral allowed by law. The Council’s contribution to this plan was approximately $69,900 for the year ended September 30, 2022.

14. Contributions, In-Kind

Contributed goods and services are reflected as contributions in-kind support, and expenses or assets in the accompanying financial statements. At times, businesses contribute equipment, advertising, and other professional services. The products and professional services are recorded at their estimated fair value. On behalf of the Council, the County directly paid approximately $159,600 of tax collector commission expenses, $149,100 of administrative expenses, and $10,000 of inspector general expenses for the year ended September 30, 2022.

The Council recognized $179,500 of advertising, promotion, and consulting as in-kind general administrative expenses, which are reflected in the Statement of Activities as part of in-kind administration support. The allocation of the use of the in-kind by type is included in the Statement of Functional Expenses. Advertising and promotion, $168,800, are valued based on prices of advertising time and/or space. Consulting services, $10,700, are value based on the price of the services provided.