HomeMy WebLinkAbout1989-032WHEREAS, there were no objections to the name change;
NOW, THEREFORE, BE IT RESOLVED BY THE BOARD OF COUNTY
COMMISSIONERS OF INDIAN RIVER COUNTY, FLORIDA, that Fellsmere
Management Company Water and Sewer Utility Franchise is authorized
to change its name to Sun Ag, Inc., Water and Sewer Utility
Franchise, effective immediately.
The foregoing resolution was offered by Commissioner
Eggert , who moved its adoption. The motion was seconded
by Commissioner Bird
the vote was as follows:
and, upon being put to a vote,
Chairman Gary Wheeler _Axe
Vice -Chairman Carolyn Eggert
Aye
Commissioner Don C. Scurlock, Jr.
Commissioner Richard N. Bird __A_Y —
Commissioner Margaret C. Bowman Ayye'
The Chairman thereupon declared the resolution duly passed and
adopted this 4th day of April
VST
1989.
BOARD OF COUNTY COMMISSIONERS
OF INDIAN RIVER COUNTY, FLORIDA
BY:
G Y W ELER, CHAIRMAN
INetn PJW Cs Approved 021e
Admin. e 315 0
Legal
8udgel g
Utilities 3 -Ib -g
.Risk Mgr.
Name, Address and Telephone number o.f (407) 571-1200
Sun Ag, Inc. (telephone #)
Fellamer_e_ Management Com an Water & Sewer Utilitx Franchif
(name of applicant) - — — -
(project name)
7735 County Road 512 10120 130th Avenue
tistreets or box #)
(street address)
Fellsmere, FL 32948 _ Fellsmere, FL 32948
(city, state, zip)
(city, state, zip)
Type of Business:
X Corporation — Partnership _ Joint Venture _ Individual Proprietc
If Corporation, list principle officers, giving name, title, address,
telephone number and per cent of stock ownership:
Patrick D. Leary, President - Vero Beach FL 32962 - 0%
Dick Stoll, Executive Vice President - Vero Beach, FL 32960 - 0%
Bernard Egan, Director, Vero Beach, FL 32962 - 100%
2b. If Partnership, list partners, giving name, citlF:; addres,.; 5elephone
number and per cent of.ownership:
2c. If Joint Venture, list principle, giving name, address, telephone
number and investment in Joint Venture:
Purpose of application (establish franchise, namechange) ownership cnangt
Specify whether it is for a public water system, a public sewerage
system, or both. If both, provide installation, nines, lines,
extension, main and lateral for both systems so that neither system
will be extended without the simultaneous extension of the other
system. If a transfer of ownership, state present owner's name and address.
If a name change of franchise, state present name franchise is known by.
Fellsmere Management Company Water & Sewer utility Franchise
I
r
v�'4•.'
ht 3
Legal Description of Franchise Area: (Attachment A)
$ i,)�
-j
-
` Location Map: (Attachment B)
z
The applicant shall sumbit a location map showing:
#,
a) layout of lots
a,
-b) ;location of all proposed treatment plants
c), all rights of ways & easements required for
utility purposes
d) applicant shall show that he has approval from
the owner of all necessary rights of ways or
easements owned by other than Indian River County
e) show all adjacent land owners numbered on map
to correspond with attached list of names and
addresses certified by County Property Appraiser's
Office (within 300 ft, of franchise area)
Certificate of Responsibility: (Attachment C)
Applicant shall certify that he has the capability to
serve the entire area covered by his request, that the
applicant is acting in faith
good and has the means
to build, install, and/or operate the proposed system.
Applicant shall also file certified copies of:
a) its corporate charter(if applicable)
b) current financial statement
C) $1,000,000 liability insurance coverage certificate
co -naming Indian River County as an additional
insured
d) credit bureau credit check
e) such other pertinent data as the Board may require
#7.
Certificate of System Sufficiency: (Attachment D)
The Utility Director must be satisfied that the system
has sufficient
capacity to serve the franchise area. A
signed and sealed report shall be submitted by the
applicant's engineer(who must be registered in the State
of Florida)
which has the following type information:
(P a) number of units & bedrooms in the service area
b) type of units(single-family, multi -family,
commercial, townhouse, etc.)
C) total daily flow requirements
d) method of treatment for water and wastewater
and their proposed design capacities
e) statement as to treatment quality planned for design
f) metering concept
g) specifications for hardware components & installation
methods
h) letter stating fire flow requirements from Fire
Department
i) intentions for conservation plans
j) rate structure including all rates, charges, and
justification of same(applicant has option of
setting rates at this hearing or at a later hearing
held for that specific purpose)
�. Applicable rules, regulations & laws: (Attachment E)
Applicant shall certify compliance with all conditions
contained in Chapter 59-1380, Laws of Florida, Indian
River County Resolutions & Ordinances, St. John's Water
Management District, Florida Department of Environmental
Regulation & all applicable state or federal rules,
regulations or laws.
'Not applicable to transfer of ownership application.
-2-
4
•Q _ . 3 - _
{ 9. 'Franchise Resolution: (Attachment F) This will be provided by County.
A Franchise Resolution shall be prepared for consideration of the
Indian River County Board of Commissioners at a public hearing before
any,franchise will be permitted. The Franchise Resolution shall be
patterned after the sample resolution and shall include the following
..patterned
of its text:
"The Franchise and rights herein granted shall take effect and
be inforce from and after the time of the adoption of this resolution
by the Board and shall continue in force and effect until such time
as the County may install or acquire its own sewerage collection
and treatment system or its water distribution and treatment system
and supplies the same to individual customers. At this time, the
Company will convey all of its facilities and easements for location
of same as the Company may own, to said County without charge, provided,
however, that within sixty days from the time of the adoption of this
resolution the Company shall file with the Board its written acceptance
of this Franchise and all of its terms and conditions and provided
further that if such acceptance is not filed within the time specified
then the provisions of this Franchise shall be null and void."
Franchise fees as required by ordinance for franchise hearings,
inspection, hydrant calibration, impact and maintenance, etc. shall
be denoted in -the Franchise Resolution Text.
B. Applicant shall submit 1 copy of approved items A-1 through A-9
to the Utility Director and shall at that time complete items B-1
through B-3.
1. Public Hearing: (Attachment G)
The notice of such hearing, the name of the applicant, the legal
description of the area to be embraced by the Franchise, the proposed
rate and hookup charges, the period for which the Franchise e
e
, not more than
a required
equired
u
rquir
and the time and place of such hearing shall be published in
regularly published in said County at least one time
one month, nor less than one week preceding such hearing. or p r.ty
Certified proof of notice of such hearing and notification of property
owners shall be filed with the Board, once the hearing date is scheduled.,
Received
Date Signature --'"-
2. Facilities Design: (Attachment H)
The applicant shall design all facilities within the Franchise Area
to conform to the Indian River County Comprehensive Land use Plan
for utilities. The applicant shall agree to supply the County
Utilities Department with one accurate set of as -built drawings
(on sepia) for each utility system prior to providing service to
any units.
Received
ate
Signature
Systems Testing and Engineering Certification: (Attachment J)
The applicant shall conduct all tests on each utility with a member
of the County's Utility Department. All sanitary sewer lines shall
be viewed by a television camera with a member of the County's Utility
Department. All testing to be as required by the County's Specifi-
cations, including Engineer's Certification.
Received
ateT' Signature
V- 'K
Franchise System Start-up:
mx�
Attachment A
SUN AG, INC., LEGAL DESCRIPTION:
The East Half of Tract 1239; all of Tracts
1240, 1241, 1242, 1243, 1250, 1251, 1252,
1253, 1254, 1340, 1341, 1342, 1343, 1350,
1351, 1352, 1442, and 1443, according to
Plat of Fellsmere Farms Company's subdivision
of all of the unsurveyed part of Township 31 -
South, Range 37 -East, as recorded in Plat Book
2, pages 1 and 2, public records of St. Lucie
County, Florida; said lands now lying and being
in Indian River County, Florida. Said tracts
containing 183 acres, more or less.
z•' Fellemere`Management• Cw �.
Trailer park ATTACHHENT B
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IDIPPUrtrilent of
I certify that the attached is a true and correct copy of the
Articles of Amendment, filed on January 5, 1988, to the Articles of
Incorporation for FELLSMERE MANAGEMENT COMPANY, changing its
name to SUN -AG, INC., a Florida corporation, as shown by the records
of this office.
The document number of this corporation is 569338.
Given unser mg haus anb the
Great Real of the *Hte of Aloriba,
at Tallahassee, the Capital, this the
bag of
28th January, 1988.
Jim smith
'Secretarg of jState
ATTACHMENT C
Item b
Audited Financial Statements
Fellsmere Joint Venture
(A Partnership)
September 30, 1988
EW Ernst &Whinney
Report of Independent Auditors . . . . . . . . . . . . . . . . . .. . . . 1
Balance Sheets . . . . . . . . . . . . . . . . . . . . . . . . . . y
Statements of Income . . . . . . . . . . . . . . . . . . . . . . . . . 4
Statements of Venturers' Equity . . . . . . . . . . . . . . . . . . . . .
Statements of Cash Flows . . . . . . . . . . . . . . . . . . . . . . . . . . . . 5 5
Notes to Financial Statements . . . . . . . . . . . . . . . . . . . . . . . . 7
7Z Ernst &Whinney
Report of Independent Auditors
Executive Committee
Fellsmere Joint Venture
Fellsmere, Florida
Certified Public Accountants
332 North Magnolia Avenue
P.O. Box 3426
Orlando, Florida 32802
407/841-2050
We have audited the accompanying balance sheets of Fellsmere Joint Venture (A
Partnership) as of September 30, 1988 and 1987, and the related statements of
income, venturers' equity and cash flows for the years then ended. These financial
statements are the responsibility of the Venture's management. Our responsibility
is to express an opinion on these financial statements based on our audits.
We conducted our audits 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 audits
provide 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 Fellsmere Joint Venture at
September 30, 1988 and 1987, and the results of its operations and its cash flows
for the years then ended in conformity with generally accepted accounting
principles.
Orlando, Florida
October 18, 1988
-1-
BAIANC& SHEETS
FELLSMERE JOINT VENTURE (A PARTNERSHIP)
September 30
1988 1987
ASSETS
CURRENT ASSETS
Cash and cash equivalents (at cost
which approximates market)
$ 2,476,373
$10,515,012
Short-term investments --Note B
171,462
444,332
Accounts receivable --Note C
2,402,433
1,418,069
Inventories:
Crops
64,361
Cattle
92,944
Deferred cattle costs
228,220
374,373
Deferred citrus costs --Note C
1,468,327
1,251,786
Deferred farming costs
47,171
Supplies and parts
636,691
585,720
Citrus tree deposits and other current assets
121,588
162,965
TOTAL CURRENT ASSETS
7,569,455
14,892,372
PROPERTY AND EQUIPMENT, at cost --Note C
Land
6,062,459
6,062,459
Land improvements
1,959,963
2,113,208
Citrus trees
14,657,863
12,622,319
Buildings and structures
4,095,342
3,714,338
Breeding herd
1,674,285
1,905,874
Transportation equipment
2,588,198
2,803,882
Machinery and other equipment
10,775,786
12,153,384
41,813,896
41,375,464
Less allowances for depreciation
19,510,785
19,976,649
22,303,111
21,398,815
Property under development
6,899,067
7,102,010
29,202,178 28,500,825
OTHER ASSETS 246,450 199,053
$43,592,250
-2-
LIABILITIES AND VENTURERS' EQUITY
CURRENT LIABILITIES
September 30
1988 1987
Accounts
Accrued
payable
incentive fee --Note D
$ 518,520
$ 672,043
Accrued
interest payable
1,000,000
300,624
316,018
Accrued
expenses and other liabilities
865,854
911,005
Current
portion of mortgage note
payable
--Note C
1,000,000
1,000,000
TOTAL CURRENT LIABILITIES
396849998
2,899,066
LONG-TERM DEBT --Note C
Mortgage note payable less portion
classified as current
Grove development loan
VENTURERS' EQUITY
E & S Partnership
PIC Realty Corporation
PIC -FLA, Limited
See notes to financial statements.
-3-
25,000,000 26,000,000
3,788,524 3,440,398
28,788,524 29,440,398
2,272,752
254,023 6,251,547
2,0179786 5,001,239
4,544,561 11,252,786
37.018 08 4 2
Operating revenues:
Citrus --Note D
Cattle
Farming
Packinghouse
Operating expenses:
Harvesting
Grove caretaking
Cost of sales --cattle
Farming
Packinghouse
General services
Other income (expenses):
Net gain on sale of property
and equipment
Management company incentive fee --Note D
General and administrative
Interest income
Interest expense
Other
See notes to financial statements.
-4-
Year Ended September 30
1988 1987
$31,877,044 $28,712,075
1,590,845 1,477,458
1,105,541 2,102,750
4,112,420 3,432,945
38,685,850 35,725,228
5,504,189
5,246,468
8,070,522
7,801,886
1,468,948
1,661,844
1,499,592
3,984,187
3,100,586
3,104,587
1,142,387
2,046,856
20,786,224
23,845,828
GROSS PROFIT 17,899,626
11,879,400
516,510
201,123
(1,000,000)
(1,658,285)
(1,759,094)
458,779
504,955
(2,833,875)
(2,898,506)
68,020
8,694
NET INCOME 13.450.775 7.936.572
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01
OPERATING ACTIVITIES
Net Income
Add (deduct) adjustments to reconcile net income
to net cash provided by operating activities:
Depreciation
Depreciation capitalized as cattle production
and grove development costs
Amortization of debt acquisition costs
Other assets
Gain on sale of assets
Interest deferral on grove development loan
Year Ended September 30
1988 1987
$13,450,775 $ 7,936,572
2,782,293 2,677,024
264,292
427,757
26,878
26,878
(74,275)
(17,925)
(516,510)
(201,123)
348,126
316,218
Changes in operating assets and liabilities:
(Increase) decrease in assets:
Accounts receivable
(984,364)
(1,165,270)
Inventories
(45,605)
121,747
Citrus tree deposits and other current assets
41,377
19,089
Increase (decrease) in liabilities:
Accounts payable
(153,523)
103,563
Accrued incentive fee
1,000,000
Accrued interest payable
(15,394)
(7,712)
Accrued expenses and other liabilities
(45,151)
109,969
NET CASH PROVIDED BY OPERATING ACTIVITIES
16,078,919
10,346,787
INVESTING ACTIVITIES
Proceeds from maturity of short-term investments
272,870
Proceeds from sale of property, plant and equipment
707,696
583,012
Purchase of property, plant and equipment
(3,939,124)
(5,428,974)
NET CASH USED IN INVESTING ACTIVITIES
(2,958,558)
(4,8459962)
FINANCING ACTIVITIES
Principal payment on mortgage
(1,000,000)
(1,000,000)
Cash distributions to partners
(20,159,000)
Payment of closing cost on liquidation of
partnership interest
(146,752)
NET CASH USED IN FINANCING ACTIVITIES (21,159,000) (1,146,752)
INCREASE (DECREASE) IN CASH AND CASH EQUIVALENTS (8,038,639) 4,354,073
Cash and cash equivalents at beginning of year 10,515,012 6,160,939
CASH AND CASH EQUIVALENTS AT END OF YEAR
M-11
NOTES TO FINANCIAL STATEMENTS
FRLLSMERE JOINT VENTURE (A PARTNERSHIP)
September 30, 1988
xiOT£ A-SZGNZFZCANT ACCOLiNT2NG P
Reporting Entit : Through February 28, 1987, the Fellsmere Joint Venture consisted
of 10% ownership by Fellsmere Farms, 50% by PIC Realty Corporation, and 40% by
PIC -FLA, Limited, both wholly owned subsidiaries of Prudential Insurance Company of
America.
Effective February 28, 1987, the Joint Venture distributed to Fellsmere Farms
approximately 15,000 acres of land together with land improvements, structures, and
equipment located on the land in exchange for Fellsmere Farms 10% ownership
interest. Management estimates that the property and equipment had a market value
of approximately $15 million at the date of transfer. The carrying value of the
property and equipment distributed to Fellsmere Farms was as follows:
Land
Land improvements
Buildings and structures
Transportation equipment
Machinery and other equipment
Property under development
Joint Venture income from October 1, 1986 to February 28, 1987 was allocated to the
three partners in relation to their ownership interests. Joint Venture income for
fiscal 1987, subsequent to February 28, 1987, was allocated solely to PIC Realty
Corporation and PIC -FLA, Limited, based on a 55.6% and 44.4% ownership interest,
respectively.
On March 31, 1988, E & S Partnership acquired from PIC Realty Corporation a 50%
interest in the capital of the Joint Venture, a 49.99% interest in the profit and
losses of the Venture, and an option to acquire an additional .01% interest in the
profit and losses of the Venture.
Joint Venture income from October 1, 1987 to March 31, 1988 was allocated to the
two partners, PIC Realty Corporation and PIC -FLA, Limited, in relation to their
ownership interest, including management's estimates of final settlement to be
received for fruit delivered prior to March 31, 1988. Joint Venture income
subsequent to March 31, 1988 was allocated to E & S Partnership, PIC Realty
Corporation and PIC -FLA, Limited, based on a 49.99%, 5.61% and 44.4% allocation of
profits and losses, respectively.
-7-
Accumulated
Cost
Depreciation
Carrying Value
$2,436,664
$2,436,664
517,743
$388,108
129,635
163,846
106,371
57,475
67,295
51,644
15,651
263,472
165,172
98,300
699,777
699,777
4.148.
ILU�23
$3,437,5D2
Joint Venture income from October 1, 1986 to February 28, 1987 was allocated to the
three partners in relation to their ownership interests. Joint Venture income for
fiscal 1987, subsequent to February 28, 1987, was allocated solely to PIC Realty
Corporation and PIC -FLA, Limited, based on a 55.6% and 44.4% ownership interest,
respectively.
On March 31, 1988, E & S Partnership acquired from PIC Realty Corporation a 50%
interest in the capital of the Joint Venture, a 49.99% interest in the profit and
losses of the Venture, and an option to acquire an additional .01% interest in the
profit and losses of the Venture.
Joint Venture income from October 1, 1987 to March 31, 1988 was allocated to the
two partners, PIC Realty Corporation and PIC -FLA, Limited, in relation to their
ownership interest, including management's estimates of final settlement to be
received for fruit delivered prior to March 31, 1988. Joint Venture income
subsequent to March 31, 1988 was allocated to E & S Partnership, PIC Realty
Corporation and PIC -FLA, Limited, based on a 49.99%, 5.61% and 44.4% allocation of
profits and losses, respectively.
-7-
,NOTES -20 FINANCIAL STATEMENTS --Continued
FELLSMERE JOINT VENTURE (A PARTNERSHIP)
NOTE A --SIGNIFICANT ACCOUNTING POLICIES --Continued
Sun Ag, Inc. (formerly Fellsmere Management Company) manages the operations and
assets of the Joint Venture.
The Joint Venture operates a citrus packinghouse and primarily processes fruit
produced by the Joint Venture.
Accounting Basis for Recording Revenues, Expenses and Inventories: Citrus and
Farming --the Joint Venture records revenue as fruit and crops are harvested and
sold. Because the proceeds for fruit usually are not completely received until the
following year and prices are not fixed until near the date of final payment,
management estimates the amount to be received for the fruit. The excess, if any,
of the expected net revenues over the advances received is recorded as accounts
receivable. Adjustments to the estimated revenues, if any, are recorded in the
following year when actual amounts become known. As of September 30, 1988 and
1987, respectively, approximately $2,238,750 and $957,000 has been included in
accounts receivable as management's estimate of the final settlement to be received
on the fruit sold for the 1988 and 1987 seasons, respectively. During fiscal 1988
the receivable at September 30, 1987 and an additional $871,224 for the 1987 season
was collected in full.
The Joint Venture leases farm land and a vegetable packinghouse to agricultural
companies. Revenue from the leases totaled approximately $135,000 and $179,000 for
the years ended September 30, 1988 and 1987, respectively, and is recorded as
farming revenue as it is earned.
Expenses generally are recognized when incurred except in the case of certain
citrus grove care and farming costs associated with the next season's crop. These
costs are deferred and included separately in the balance sheet as deferred citrus
costs and deferred farming costs, and are recognized as expenses when the related
crops are harvested. In addition, certain grove care costs related to groves under
development are capitalized until the trees reach their productive stage.
Inventories are valued at the lower of cost or market. Cost is determined generally
on the first -in, first -out method. Cattle inventory at September 30, 1987 is
stated at current market value, which is approximately $69,000 less than cost.
There is no cattle inventory at September 30, 1988.
Cattle Operations --Revenues from sales of breeding herd and calf inventory are
recorded at the time contractual ownership is transferred to the buyer.
-8-
NOTE9-TO FINANCIAL STATEMENTS --Continued
FELLSMERE JOINT VENTURE (A PARTNERSHIP)
NOTE A --SIGNIFICANT ACCOUNTING POLICIES --Continued
Production costs associated with the cattle operation are allocated to the calf
inventory. Production costs are accumulated on an August 1 to July 31 breeding
year and all subsequent costs between August 1 and September 30 are recognized on
the balance sheet as deferred cattle costs. After an animal reaches breeding age,
it no longer accumulates costs, and is transfered to the breeding herd and
depreciated over its expected productive life.
Property and Equipment: Depreciation is considered to be a period expense except
for depreciation charged to cattle operations, which is considered a production
cost. Depreciation is computed using straight-line and accelerated methods over
the estimated useful lives as follows:
Description Useful Lives
Land improvements 5-15 years
Citrus trees 22-33 years
Buildings and structures 5-30 years
Breeding herd 5 years
Transportation equipment 3-6 years
Machinery and other equipment 3-15 years
Property under development consists of approximately $5,372,000 for citrus trees
that have not reached the production stage and approximately $1,527,000 for the
construction of structures, reservoirs and ditches.
Statements of Cash Flows: The Joint Venture has adopted Financial Accounting
Standard No. 95 which requires the presentation of a statement of cash flows. This
statement replaces the previously required statement of changes in financial
position. To enhance comparability, the accompanying 1987 statement of changes in
financial position has been restated. The statements of cash flows are presented
utilizing the indirect method.
Cash Equivalents: The Venture considers all highly liquid investments with
maturity of three months or less when purchased to be cash equivalents.
Income Taxes: The Internal Revenue code provides for partnership income or losses
to be reported by the partners, who are to report their equitable share of the net
profit or loss on their tax returns. Accordingly, the financial statements do not
include any provision for income taxes.
Reclassification: Certain items reported in the 1987 financial statements have
been reclassified herein to conform to the 1988 classification.
-9-
NOTES' TO FINANCIAL STATEMENTS --Continued
FELLSMERE JOINT VENTURE (A PARTNERSHIP)
NOTE B --SHORT-TERM INVESTMENTS
Short-term investments are comprised of U. S. Treasury securities. Interest rates
on these investments have ranged from approximately 6% to 7% during the year ended
September 30, 1988.
NOTE C --LONG TERM DEBT
Long term debt consists of:
First mortgage note payable to Prudential Insurance
Company, interest at 9 1/4% payable annually, annual
principal payments of $1,000,000 with the remaining
balance of unpaid principal due May 1, 1993
Less current portion of mortgage note payable
Grove development loan payable to Prudential Insurance
Company, interest at 9.875% through April 15, 1990 and
adjusted thereafter to a fixed rate equal to 2 1/4% above
a Federal Reserve index payable semi-annually beginning
October 15, 1990; annual principal payments of $220,565
beginning April 15, 1991 with the remaining balance of
unpaid principal and accrued interest due August 15, 1993
September 30
1988 1987
$26,000,000 $27,000,000
1,000,000 1,000,000
25,000,000 26,000,000
3,788,524 3,440,398
28.788.524 29.440.398
Principal payments of $1,000,000 are due within each of the fiscal years 1989
through 1990, $1,220,565 due within fiscal years 1991 and 1992 and $25,347,394 due
in 1993.
The mortgage note and grove development loan are collateralized by accounts
receivable, citrus crop, land, improvements, citrus trees, buildings, equipment,
and property under development having an aggregate carrying amount of approximately
$33,000,000 at September 30, 1988.
Interest paid was approximately $2,501,143 and $2,590,000 during fiscal years 1988
and 1987, respectively.
NOTES TO FiNANCIAI. STATEMENTS --Continued
F£LLSMERE JOINT VENTURE (A PARTNERSHIP)
NOTE D --RELATED PARTY TRANSACTIONS
During the year ended September 30, 1988 and 1987, citrus revenues from related
parties amounted to $12,197,803 and $7,669,413, respectively. It is management's
opinion that these sales are at terms considered to be in the normal course of
business.
At September 30, 1988 and 1987 respectively, the Joint Venture has $1,154,289 and
$9,630,816 of investments with Prudential Bache Securities, a wholly-owned
subsidiary of Prudential Insurance Company of America. It is management's opinion
that these investments are at terms considered to be in the normal course of
business.
Through February 28, 1987 the Fellsmere Management Company (FMC) (see Note A) was
primarily owned by the same principals that own Fellsmere Farms, one of the Joint
Venture partners until February 28, 1987. Subsequent to February 28, 1987, FMC was
owned by three individuals, none of whom were Joint Venture partners. On December
20, 1987 FMC was reorganized and renamed Sun Ag. Inc (the management company). The
reorganized company is owned by four individuals, one of whom is a partner in E & S
Partnership, a current Joint Venturer. The Joint Venture enters into annual
agreements with Sun Ag., Inc. to manage, operate and maintain the assets of the
Joint Venture. For the years ended September 30, 1988 and 1987, annual fees of
$352,975 and $266,500, respectively were paid to the management company. In
addition to management fees paid during the year, the Joint Venture has a liability
to the management company, as of September 30, 1988, for an incentive management
fee of $1,000,000 based on fiscal 1988 operating results as defined in the
management agreement. This agreement expired on September 30, 1988.
NOTE E --EMPLOYEE BENEFIT PLAN
The Fellsmere Management Company Profit Sharing
contribution plan which is comprised of a profit
salary savings plan for the benefit of Sun Ag,
effective as of January 1, 1984. Federal income
the employees are deferred in accordance with
Revenue Code.
-11-
Plan (the "Plan") is a defined
sharing plan and a self-directed
Inc. employees. The Plan was
taxes on amounts contributed by
section 401(k) of the Internal
NOTE E --EMPLOYEE BENEFIT PLAN --Continued
Employees of Sun Ag, Inc., formerly Fellsmere Management Company (the "Company"),
are eligible to participate after completing 30 months of service and attaining age
20 1/2. Contributions by the Joint Venture to the profit sharing plan are made at
the discretion of the Company's Board of Directors. Employees may contribute up to
i 10% of their annual compensation to the self-directed salary savings plan. The
employee is fully vested in their contributions immediately. Normal withdrawals
may begin at age 55, with provisions for "hardship" withdrawals prior to that age.
Employees receive the then current value of their account upon termination.
NOTE F --LINE OF CREDIT
The Joint Venture has available a $4,000,000 unsecured line of credit with a bank.
The line of credit, which is unused at September 30, 1988, would carry interest at
the bank's prime rate.
-12-
C. E R T i F I C A T E G r I iii S U R Ai•J C. E ATTTACEMENT C
Item c
i........................._.IJAir
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'PROD'JCER ---... ... .-- -- •,
1 TP,IS CERTIFICATE IS ISSUED AS A MATTER OF iAr)=;•t w
NLY ASD ;,OIYFERS
1' Alton Insurance Services Inc NO RIGHT VON THE CER71rICAtE HOLDER. THIS CcR-,, ICA DOES NOT AMEND,
( P.O. Box 1Gi17 ' .TEND OR ALTER THE COVERAGE AFF,'ADED BY TrE ,...rCIES 2C
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•' 1 pest Farm Beach, FL 334x,6 ��
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COMPANY
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1 THIS IS TO CERTIFY THAT POLICIES OF iNSLRA;rCE LISTED BELira HAVE BEEN !ESuED TO THE iNSOP,ED NAMED ABOVE FOR THE 'POLICY PERIOD 1
1 INDICATED. NOTKi'HSTANDING ANY REQUIREMENT, TERM OR. CONDITION OF ANY CONTRACT OR OTTER ur�Cu:?_i,T wITH REE?ECT TO Kh!Cn THIS
-1 CERTIFICATE MY BE ISSUED OR MAY PERTAIN rHE INSURANCE AFFORDED BY THE POLICIES DESCRIBED HEREa ;
1.. EXCLUSIONS, AND CONDITIONS OF SJCH PGLUES. Is SUBJECT i0 ALL THE 7cB5,
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1 POLICY POLICY
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1LTk1 TYPE U"r INSURANCE 1 .EPPtCTiVE ;EXPIRATION; 1
--SURANCE SSSS-- 1 'POLICY NUMBER DATE 1 DATE
1 1 GEhEkAL LIABILITY - -------- ALL-Li-----INGATE Sir. u5AND5..----------'
1 A 1 Is7 COMMERCIAL GENERAL LIABILITY 1 GL401Z363E2 1 10/01/38 ; 1U/U1/39 1 PRODUCTZGENERAL pCOY'E/u�S .4GC ELATE i?;000
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1 DESCRIPTION OF OPERATIONS/LOCATiUNS/VEHICLES/SPECIAL ITEMS -- '"- "-"--'"'-""- -fr'-
L.irnits snr,wn may be reduce, by paid clairns MAR 061989
Additional insured.
CERTIFICATE HOLDER CA'_-----•••---
- -- --- SSSS-- SSSS - -- -- CANCELLATION - --_- - --- - - -- - - --
' dian river_Couat — 5YC"JLD ANY OF T. -E ABOVE OESCRIitD POLICIES BE CANCELLED BEFORE THE EX -
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I rranth_lS o.mmstratron Serviced 10 DAYS WRITTEN NOTICE TO 7HE CERiiFIC6,ie HOLDER NAMED TO THE 1
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1 Vero Beach, Y.L 32960 1 LIABILITY OF A)Ya "' 1
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1------------------------------
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1 AUTHORIZED REPRESENTATIVE r;y 1
--------------------------------- ............................
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