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Indian River County, Florida Board of County Commissioners Notes To Financial Statements Year Ended September 30, 2011 NOTE 1 - SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES The Board of County Commissioners (the "Board") is a County agency and a local governmental entity pursuant to Article VIII, Section 1(e) of the Constitution of the State of Florida. For financial statement and reporting purposes, the Board does not meet the definition of a legally separate organization and is not considered to be a component unit. The Board is considered to be a part of the primary government of Indian River County. The financial statements contained herein represent the financial transactions of the Board only. The following is a summary of the significant accounting principles and policies used in the preparation of the accompanying financial statements. A. Reporting Entity The concept underlying the definition of the reporting entity is that elected officials are accountable to their constituents for their actions. The reporting entity's financial statements should allow users to distinguish between the primary government (the Board) and its component units. However, some component units, because of the closeness of their relationship with the Board, should be blended as though they are part of the Board. Otherwise, most component units should be discretely presented. As required by generally accepted accounting principles, the financial reporting entity consists of. (1) the primary government (the Board), (2) organizations for which the Board is financially accountable, and (3) other organizations for which the nature and significance of their relationship with the Board are such that exclusion would cause the reporting entity's financial statements to be misleading or incomplete. The Board is financially accountable if it appoints a voting majority of the organization's governing body and (a) it is able to impose its will on that organization or (b) there is a potential for the organization to provide specific financial benefits to, or impose specific financial burdens on, the Board. The Board is financially accountable if an organization is fiscally dependent on the Board regardless of whether the organization has (a) a separately elected governing board, (b) a governing board appointed by a higher level of government, or (c) a jointly appointed board. Based on these criteria, Board management examined all organizations, which are legally separate, in order to determine which organizations, if any, should be included in the Board's financial statements. Management determined that the Solid Waste Disposal District and the Emergency Services District were the only organizations that should be included in the Board's financial statements as blended component units. Blended Component Units Solid Waste Disposal District (SWDD) — Created pursuant to County Ordinance 87-67, the Board of County Commissioners serves as the Board for the SWDD and sets the non ad valorem assessment fees for the SWDD. Although legally separate, the SWDD is appropriately blended as a proprietary fund type (enterprise) component unit into the primary government. Emergency Services District (EMS) — Created pursuant to County Ordinance 90-25, the Board of County Commissioners serves as the Board for the EMS and sets the millage rate for EMS. Although legally separate, the EMS is appropriately blended as a governmental fund type (special revenue) component unit into the primary government. 245