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Home My WebLink About2010-069B COMPREHENSIVE ANNUAL FINANCIAL REPORT FOR THE FISCAL YEAR OCTOBER L 2008 THROUGH SEPTEMBER 30 2009 Q G� FLORNA INDIAN RIVER COUNTY, FLORIDA 411111 INDIAN RIVER COUNTY, FLORIDA COMPREHENSIVE ANNUAL FINANCIAL REPORT FOR THE FISCAL YEAR OCTOBER 1, 2008 LTHROUGH SEPTEMBER 30, 2009 Jeffrey K. Barton Clerk of the Circuit Court Prepared By: Clerk of the Circuit Court Finance Department Diane Bernardo Finance Director Indian River County, Florida COMPREHENSIVE ANNUAL FINANCIAL REPORT Fiscal Year Ended September 30, 2009 Board of County Commissioners as of September 30,2009 Wesley S. Davis Robert M. Solari Chairman Peter D. O'Bryan Joseph E. Flescher Gary C. Wheeler Vice-Chairman Current Board of County Commissionersafter November ovember 17,2009) Peter D. O'Bryan Wesley S. Davis Chairman Gary C. Wheeler Robert M. Solari Joseph E. Flescher Vice-Chairman Elected Constitutional Officers as of September 30,2009 Jeffrey K. Barton Carole Jean Jordan David C. Nolte Clerk of the Circuit Court Tax Collector Property Appraiser Kay Clem Deryl Loar Supervisor of Elections Sheriff County Management Joseph Baird William G. Collins II County Administrator County Attorney Jason Brown Cliff Crawford Chris Mora Budget Director Director of Recreation Director of Public Works Thomas W. Frame Robert M. Keating John W. King Director of General Services Director of Community Development Director of Emergency Services Robert J. Komarinetz Erik Olson James Sexton Director of Golf Course Director of Utilities Director of Human Resources Indian River County,Florida COMPREHENSIVE ANNUAL FINANCIAL REPORT TABLE OF CONTENTS Fiscal Year Ended September 30, 2009 INTRODUCTORY SECTION Page Number LETTEROF TRANSMITTAL.......................................................................................................vi ORGANIZATIONCHART............................................................................................................. CERTIFICATE OF ACHIEVEMENT FOR EXCELLENCE INFINANCIAL REPORTING................................................................................................vii FINANCIAL SECTION INDEPENDENTAUDITORS' REPORT..........................................................................................1 MANAGEMENT'S DISCUSSION AND ANALYSIS.....................................................................3 BASIC FINANCIAL STATEMENTS: Government-wide Financial Statements: Statementof Net Assets........................................................................................................17 Statement of Activities............................ Fund Financial Statements: Balance Sheet- Governmental Funds...................................................................................20 Statement of Revenues, Expenditures, and Changes in Fund Balances - Governmental Funds............................................................................22 Reconciliation of the Statement of Revenues, Expenditures, and Changes in Fund Balances of Governmental Funds to the Statement of Activities......................24 Statement of Revenues, Expenditures, and Changes in Fund Balances - Budget and Actual- General Fund.................................................................................25 Statement of Revenues, Expenditures, and Changes in Fund Balances - Budget and Actual -Impact Fees Fund...........................................................................26 Statement of Revenues, Expenditures, and Changes in Fund Balances - Budget and Actual- Secondary Roads Construction Fund............................................27 Statement of Revenues, Expenditures, and Changes in Fund Balances- Budget and Actual -Transportation Fund.......................................................................28 Statement of Revenues, Expenditures, and Changes in Fund Balances- Budget and Actual -Emergency Services District Fund................................................29 Statement of Net Assets - Proprietary Funds........................................................................31 Statement of Revenues, Expenses, and Changes in Fund Net Assets-Proprietary Funds..............................................................................32 Statement of Cash Flows -Proprietary Funds......................................................................34 Indian River County,Florida COMPREHENSIVE ANNUAL FINANCIAL REPORT TABLE OF CONTENTS - CONTINUED Fiscal Year Ended September 30, 2009 Page g Number Statement of Fiduciary Net Assets—Fiduciary Funds..........................................................38 Statement of Changes in Fiduciary Net Assets— Other Postemployment Benefits Trust Fund.......... ......................................... 39 Notes to the Financial Statements...............................................................................................41 REQUIRED SUPPLEMENTARY INFORMATION: Schedule of Funding Progress—Other Postemployment Benefits Plan.............................100 Schedule of Employer Contributions—Other Postemployment Benefits Plan..................100 COMBINING AND INDIVIDUAL FUND STATEMENTS AND SCHEDULES: Combining Balance Sheet-Nonmajor Governmental Funds ............................................106 Combining Statement of Revenues, Expenditures and Changes in Fund Balances -Nonmajor Governmental Funds......................................114 Budgetary Comparison Schedules......................................................................................122 Combining Statement of Net Assets - Internal Service Funds ...........................................156 Combining Statement of Revenues, Expenses, and Changes in Fund Net Assets - Internal Service Funds..................................................157 Combining Statement of Cash Flows - Internal Service Funds..........................................158 Combining Statement of Changes in Assets and Liabilities -Agency Fund......................162 i Indian River County,Florida COMPREHENSIVE ANNUAL FINANCIAL REPORT TABLE OF CONTENTS- CONTINUED Fiscal Year Ended September 30, 2009 STATISTICAL SECTION Page Number SCHEDULE 1 Net Assets by Component- Last Nine Fiscal Years.........................................164 SCHEDULE 2 Changes in Net Assets - Last Nine Fiscal Years...............................................166 SCHEDULE 3 Fund Balances, Governmental Funds -Last Ten Fiscal Years.........................170 SCHEDULE 4 Changes in Fund Balances, Governmental Funds— LastTen Fiscal Years..................................................................................172 SCHEDULE 5 Tax Revenues by Source, Governmental Funds— LastTen Fiscal Years..................................................................................174 SCHEDULE 6 Assessed Value and Actual Values of Taxable Property - LastTen Fiscal Years..................................................................................175 SCHEDULE 7 Property Tax Rates -Direct and Overlapping Tax Rates - LastTen Fiscal Years..................................................................................176 SCHEDULE 8 Principal Property Taxpayers -Year 2009 and Year 2000...............................178 SCHEDULE 9 Property Tax Levies and Collections -Last Ten Fiscal Years..........................179 SCHEDULE 10 Ratios of Outstanding Debt by Type - Last Ten Fiscal Years..........................180 SCHEDULE 11 Ratio of Net General Bonded Debt Outstanding to Taxable Value and Net Bonded Debt Per Capita- Last Ten Fiscal Years..........................182 SCHEDULE 12 Computation of Legal Debt Margin..................................................................183 SCHEDULE 13 Direct and Overlapping Governmental Activities Debt....................................184 SCHEDULE 14 Pledged Revenue Coverage-Water and Sewer Revenue Bonds - LastTen Fiscal Years..................................................................................186 Indian River County,Florida COMPREHENSIVE ANNUAL FINANCIAL REPORT TABLE OF CONTENTS- CONTINUED Fiscal Year Ended September 30, 2009 Page Number SCHEDULE 15 Pledged Revenue Coverage - Recreational Revenue Refunding Bonds - Series 2003 -Last Ten Fiscal Years ...........................................................188 SCHEDULE 16 Pledged Revenue Housing-Coverage g g Authority Component Unit LastTen Fiscal Years..................................................................................189 SCHEDULE 17 Demographic and Economic Statistics -Last Ten Years..................................190 SCHEDULE 18 Principal Employers - Year 200 P9 and Nine Years Ago....................................191 SCHEDULE 19 Building Permits—Last Ten Fiscal Years .......................................................192 SCHEDULE 20 Operating Indicators by Function/Program—Last Ten Fiscal Years ...............194 SCHEDULE 21 Full Time Equivalent County Government Employees by Function/Program -Last Nine Fiscal Years...........................................198 j SCHEDULE 22 Capital Asset Statistics by Function/Program- Last Ten Fiscal Years............200 SCHEDULE 23 Department of Utility Services -Historical Rate Structure— LastTen Fiscal Years..................................................................................204 SCHEDULE 24 Water and Wastewater Customers - Last Ten Fiscal Years..............................206 SCHEDULE 25 Top 10 High Volume Customers of Utility Service .........................................207 SCHEDULE 26 Capacity Charges - Utilities Department- Last Ten Fiscal Years....................208 SCHEDULE 27 Pledged Revenues for Recreational Revenue Refunding Bonds, Series 2003 — LastTen Fiscal Years..................................................................................209 SCHEDULE 28 Pledged Revenues for Spring Training Facility Revenue Bonds, Series 2001 — LastTen Fiscal Years..................................................................................210 k Indian River County,Florida COMPREHENSIVE ANNUAL FINANCIAL REPORT TABLE OF CONTENTS- CONTINUED Fiscal Year Ended September 30, 2009 COMPLIANCE SECTION Page Number Report on Internal Control over Financial Reporting and on Compliance and Other Matters Based on an Audit of Financial Statements Performed in Accordance with Government Auditing Standards.............................................................211 CountyManagement Letter......................................................................................................213 Federal and State Grants: Independent Auditors' Report on Compliance with Requirements Applicable to Each Major Federal Program and Major State Project and on Internal Control over Compliance in Accordance with OMB Circular A-133 and the Department of Financial Services' State Projects Compliance Supplement........................................215 Schedule of Expenditures of Federal Awards and State Projects.............................................218 Notes to Schedule of Expenditures of Federal Awards and State Projects...............................222 LLt Schedule of Findings and Questioned Costs -Federal Awards and State Projects..................223 Indian River County, Florida COMPREHENSIVE ANNUAL FINANCIAL REPORT TABLE OF CONTENTS- CONTINUED Fiscal Year Ended September 30, 2009 AUDITOR GENERAL REPORTS SECTION Page BOARD OF COUNTY COMMISSIONERS Number IndependentAuditor's Report...................................................................................................227 Special Purpose Financial Statements ......................................................................................228 Report on Internal Control over Financial Reporting and on Compliance and Other Matters Based on an Audit of Financial Statements Performed in Accordance with Government Auditing Standards ........................................................291 ManagementLetter...................................................................................................................293 Responseto Management Letter...............................................................................................295 CLERK OF THE CIRCUIT COURT Independent Auditor's Report...................................................................................................298 Special Purpose Financial Statements ......................................................................................299 Report on Internal Control over Financial Reporting and on Compliance and Other Matters Based on an Audit of Financial Statements Performed in Accordance with Government Auditing Standards ........................................................308 ManagementLetter...................................................................................................................310 Response to Management Letter...............................................................................................312 PROPERTY APPRAISER IndependentAuditor's Report...................................................................................................314 Special Purpose Financial Statements ......................................................................................315 Report on Internal Control over Financial Reporting and on Compliance and Other Matters Based on an Audit of Financial Statements Performed in Accordance with Government Auditing Standards ........................................................321 ManagementLetter...................................................................................................................323 Indian River County,Florida COMPREHENSIVE ANNUAL FINANCIAL REPORT TABLE OF CONTENTS-CONTINUED Fiscal Year Ended September 30, 2009 Page Number SHERIFF IndependentAuditor's Report...................................................................................................326 f` Special Purpose Financial Statements .....................................................................................327 Report on Internal Control over Financial Reporting and on Compliance and Other Matters Based on an Audit of Financial Statements Performed ' in Accordance with Government Auditing Standards.........................................................336 ManagementLetter...................................................................................................................338 SUPERVISOR OF ELECTIONS Independent Auditor's Report........................................................................ ...........................342 Special Purpose Financial Statements ......................................................................................343 Report on Internal Control over Financial Reporting and on Compliance and Other Matters Based on an Audit of Financial Statements Performed Accordance with Government Auditing Standards.............................................................352 Response to Internal Control Letter..........................................................................................356 ManagementLetter...................................................................................................................358 TAX COLLECTOR IndependentAuditor's Report...................................................................................................362 Special Purpose Financial Statements ......................................................................................363 Report on Internal Control over Financial Reporting and on Compliance and Other Matters Based on an Audit of Financial Statements Performed Accordance with Government Auditing Standards.............................................................373 ManagementLetter...................................................................................................................375 ,,- "_"¢° �Y � � O � �� `�- � a . �� o . . . �� ,1�1;: QA1"( � ., �. , JEFFREY K. BARTON Clerk of Circuit Court and Comptroller 1801 27th Street Vero Beach, Florida 32960-3388 Telephone (772) 226-1945 IOA March 15, 2010 To the Citizens of Indian River County: The Comprehensive Annual Financial Report of Indian River County, Florida for the fiscal year ended September 30, 2009, is respectfully submitted. State law requires that every general-purpose government publish a complete set of audited financial statements within six months of the close of each fiscal year. This report was prepared by the Finance Department under the supervision of the Clerk of the Circuit Court. Responsibility for both the accuracy of the presented data and the completeness and fairness of the presentation, including all disclosures, rests with the Finance Department and is contingent upon the internal control established for this purpose. Since the cost of internal control should not exceed anticipated benefits, the objective of the financial statements is to provide reasonable, rather than absolute, assurance that they are free of any material misstatements. Section 11.45, Florida Statutes, requires an annual audit of all County agencies. The unqualified opinion of the auditors, Harris, Cotherman, Jones, Price and Associates, Certified Public Accountants — Chartered, of the County's financial statements for the year ended September 30, 2009 has been included in this report. The independent auditors' report is located at the front of the financial section of this report. The audit was also designed to meet the requirements of Government Auditing Standards, the Florida Single Audit Act, the Federal Single Audit Act of 1984, the Single Audit Act Amendments of 1996, and revised OMB Circular A-133. Readers of this report are encouraged to read Management's Discussion and Analysis (MD&A), which provides basic financial information about the County and an overview of the County's activities. The MD&A immediately follows the independent auditors' report. Profile of the Government Indian River County, established on June 29, 1925 by an act of the Florida Legislature, is on the central Atlantic coast of Florida, approximately 100 miles southeast of Orlando and 135 miles north of Miami. The County is bordered by Brevard County to the north, St. Lucie County to the south, and Osceola and Okeechobee Counties on the west. There are approximately 100 miles of waterfront land in the County, including 23 miles of Atlantic beaches. The City of Vero Beach is the seat of County government. The functional (seasonal plus resident) population reaches approximately 162,000. Like the rest of the state of Florida, the County experienced significant population growth over the last ten years. Government, retail and the service industry remain the largest sectors of employment in the County. Indian River citrus is a well-recognized name and product throughout the United States and internationally. i Indian River Count is a non-charter count established County y estab shed under the Constitution and the Laws of the State of Florida. This Comprehensive Annual Financial Report (CAFR) includes the funds of the primary government (the Board of County Commissioners, the Clerk of the Circuit Court, the Property Appraiser, the Sheriff, the Supervisor of Elections and the Tax Collector), the blended component units consisting of the Emergency Services District and the Solid Waste Disposal District and one discretely presented component unit,the Indian River County Housing Authority. These component units were included because generally accepted accounting principles require that organizations for which the County is financially accountable be reported with the primary government (the County) as the reporting entity. This CAFR does not include the Indian River County School District,the Indian River County Mosquito Control District or the Indian River Medical Center. Local Economy The effects of the decline ec e m the national economy were also felt by Indian River County in 2009. Property tax values decreased from $18.6 billion in 2008 to $17.4 billion in 2009. Construction activity has dramatically decreased as well. The total number of building permits issued for new construction in 2009 was 564 compared to 2008 when the permits numbered 1,063. This was a 47% decrease. Our peak activity of growth occurred in 2005 and 2006 as illustrated in Statistical Schedule 19. Indian River County's population remained relatively unchanged from the previous year with a decrease of 192 residents or less than 1%. Total employment, however, decreased 33% from 55,041 in 2008 to 36,992 in 2009. The unemployment rate increased over 50%from 10.1% in 2008 to 15.2%in 2009. Indian River County is a major producer of citrus in the state with approximately 12.5% of total County acreage dedicated to citrus production. Citrus production decreased 17% from 13.8 million boxes in 2008 to 11.4 million boxes in 2009. Long Term Financial Planning On January 15, 2008, the County entered into a locally funded agreement with the Florida Department of Transportation (FDOT) to advance the 6-laning of State Road 60 from 82nd Avenue to 66`x` Avenue (Segment One) at a cost to $23,833,362 and funded by gas taxes and optional one-cent sales tax. On November 18, 2008 a second agreement was established with the FDOT to advance the widening of State Road 60 from Interstate 95 to 82nd Avenue (Segment Two) at a cost of$14,429,754. Segment One will be repaid to the County over a two year period which began in July 2009. The first of eight quarterly reimbursements by the FDOT of$2,979,170 was received in September 2009. Segment one is expected to be completed by December 2010. Segment Two will be repaid over a four and one half year period beginning in July 2011 with completion of the project expected in April 2011. In March 1989, Indian River County voters passed the optional one-cent sales tax which was effective for a fifteen year period. In November 2002, a voter referendum approved extending the optional one- cent sales tax another 15 years until December 31, 2019. Many capital projects have been completed with this funding that otherwise would have been funded by ad valorem dollars. In 2009, approximately $13 million was received and will be used towards funding numerous capital projects including the following construction projects: ii • South County Park - The expansion of this park is necessary to provide recreation facilities and programs to the growing population in the southern part of the County. A multi-purpose facility will be constructed at a cost of$1.8 million. Ad valorem tax proceeds and user fees will fund increased operating costs. The impact to ad valorem taxpayers could be reduced through the use of possible public-private partnerships to operate this facility. • Parks Maintenance Complex — This facility is needed to replace the existing facility that was severely damaged by the hurricanes in 2004. The construction of the $1.5 million complex began in fiscal year 2008-2009 and includes three buildings consisting of a 3,500 square foot office building, a 1,250 square foot equipment repair/storage building including an attached covered patio and a 2,500 square foot garage building. • EPret Marsh Stormwater Park—The County's first Algal Turf Scrubber System (ATS) is under construction and is expected to be completed during fiscal year 2009-2010 at a cost of approximately $6.0 million. This system will remove dissolved nutrients from ten million gallons of Indian River Farms Water Control District's canal water each day and it will produce a useable byproduct of harvested algae. • Fire/EMS Station #13 - Construction of Fire/EMS Station 13 is scheduled for fiscal year 2009- 2010 at a cost of$3.0 million. One-cent sales tax will provide $1.5 million while the remaining $1.5 million will be funded by Emergency Services District Reserves. This station is needed to serve the expanding south county population. The operating expense impact will be approximately$2.1 million beginning in fiscal year 2011-2012. • 800 Mhz Radio Expansion — Construction of a $2.2 million communications tower is planned for fiscal year 2009-2010. This tower will help eliminate deficiencies in "in-building coverage" for public safety agencies that have resulted since the significant growth in the south county area. Relevant Financial Policies In accordance with Section 218.415, Florida Statutes, the County adopted an investment policy, which guides the investment of County surplus funds. This policy establishes investment objectives, maturity and liquidity requirements, portfolio composition, risk and diversification requirements, and authorized investments. The primary objectives of investment activities are to preserve capital and maintain sufficient liquidity to meet anticipated cash flow needs. The secondary objective is to obtain competitive returns on the investment of County surplus funds. During FY 2009, County investments had yields ranging from 0.30%to 4.75%. The overall average yield of the portfolio as of September 30, 2009 was 2.10%. On September 23, 2008, the County established the OPEB (Other Post-Employment Benefits) Trust. An OPEB investment policy was approved by the Board of County Commissioners on February 3, 2009 and revised on May 12, 2009. The objective was to establish an advisory committee and to provide short- term and long-term investment guidelines. This policy also outlines the same criteria as noted in the County's investment policy, as well as including performance measures. The net cash contribution to the OPEB Trust for the fiscal year was $1.8 million. In addition, interest, dividend and mark-to-market income was $389,000. Yields ranged from-0.89%to 48.18%throughout the year. iii Major Initiatives In response to the critical erosion of several areas of County beaches, the Board of County Commissioners approved the Comprehensive Beach Preservation Plan (BPP) in 1999. The BPP provides for renourishment of these areas and is periodically updated to identify changing beach conditions. On February 3, 2009,the Board of County Commissioners voted to approve the 2008 Beach Preservation Plan which presents an overall strategy to protect and nourish the current status of critically eroded beaches within Indian River County. The plan also presents probable costs and prioritizes means for funding the implementation of the BPP. Since the implementation of the BPP, approximately 5 miles of beach have been renourished. A large scale beach nourishment of Sector 3 is currently underway. This project consists of placing approximately 472,000 cubic yards of dump truck hauled upland beach sand onto approximately 6.6 miles of County beaches. Total costs for design, construction and monitoring are estimated at $13.1 million. Funding will be from the Beach Preservation Fund, a portion of local option tourist tax revenue, and the one-cent sales tax. State and federal grants as well as an inter-local agreement with the Sebastian Inlet Taxing District will provide additional funding for this project. Indian River County entered into an agreement with Indian River State College (IRSC) for construction of a joint-use library. The Brackett library opened in October 2009 and is located on the IRSC campus but is part of the County's public library system. This additional facility provides a resource to serve the County's growing population as well as the students of IRSC. The County's fifty percent share of funding for the project came from the one-cent sales tax and library impact fees. Ad valorem taxes will provide most of the funding for operating costs. The college will contribute a portion of the operating costs per the interlocal agreement, which will reduce the impact on ad valorem dollars. The Utilities Department has planned on the addition of several new water distribution and wastewater p collection lines to serve new customers. Expansion of the West Regional Wastewater Treatment Plant is currently underway at a cost of approximately $25 million and the North County R/O Water Plant Expansion was completed in 2009 at a cost of$24 million. All of these improvements will be funded by current utility capacity charges and from the additional customer base they will serve. Awards and Acknowlede�ments The Government Finance Officers Association of the United States and Canada (GFOA) awarded a Certificate of Achievement for Excellence in Financial Reporting to Indian River County for its comprehensive annual financial report (CAFR) for the fiscal year ended September 30, 2008. This was the 26th consecutive year that the County has received this prestigious award. In order to be awarded a Certificate of Achievement, a government must publish an easily readable and efficiently organized comprehensive annual financial report. This report must satisfy both generally accepted accounting principles and applicable legal requirements. A Certificate of Achievement is valid for a period of one year only. We believe that our current comprehensive annual financial report continues to meet the Certificate of Achievement Program's requirements and we are submitting it to the GFOA to determine its eligibility for another certificate. iv In addition, Indian River County also received the GFOA's Distinguished Budget Presentation Award for its annual budget document for the 2008-2009 fiscal year. This was the 18th consecutive year that the County has received this prestigious award. In order to qualify for the Distinguished Budget Presentation Award, the County's budget document had to be judged proficient as a policy document, financial plan, operations guide, and communications device. Summary I would like to thank the entire staff of the Finan ce Department for their invaluable assistance in the preparation of this report. I would also like to thank the Board of County Commissioners and their staff, and the other Constitutional Officers for their personal interest and unfailing support in planning and conducting the financial operations of the County in a responsible and progressive manner. Respectfully submitted, Jeffrey K. Barton Clerk of the Circuit Court and Comptroller v Indian River County BCC Departmental Organization Residents of Indian River County Clerk of Circuitervisor of Board of Property Tax Sheriff �P qty Appraiser Collectocourt r Elections Commissioners LFinance Department County Attorney County Administrator Assistant County Administrator General Utility Emergency Community Office of Services Public Works Services Services Development Management&Budget Youth Leisure Services Geographic Info. Human FIGuidance (Golf Course) System(GIS) Recreation Resources Libraries En eerin Wastewater County g Treatment Emergency Planning Management Management P»rchasin g Roads& Water Environmental Computer Bridges Production Planning/ Services Facilities Fire/Rescue Code Enforcement Management Traffic General& Engineering IRCLHAP/ Mailroom/ Radiological SHIP Parks Emergency Switchboard Division Biosolids Preparedness Program Operations Veterans Metropolitan Fleet Services Management Customer Emergency Planning Service Base Grant Organization Telecommunications Secondary Building Road Wastewater Division Shooting Construction Collection Animal Range Control Water L_ Soil&Water Stormwater Distribution Conservation 911 Coordinator Housing Solid Waste Authority/ Disposal District Rental Assist.j L Beach Preservation AG Extension Human Sernces Vi Certificate of Achievement for Excellence in Financial Reporting Presented to Indian River County Florida For its Comprehensive Annual Financial Report for the Fiscal Year Ended September 30,2008 A Certificate of Achievement for Excellence in Financial Reporting is presented by the Government Finance Officers Association of the United States and Canada to government units and public employee retirement systems whose comprehensive annual financial reports(CAFRs)achieve the highest standards in government accounting and financial reporting. t w� W u.aim President Executive Director Vii ��Y � � O .-;: � � � �~ :� . �.:. O . . •��t'� Harris, Cotherman, Jones, Price S� Associates Certified Public Accountants-Chartered 5070 North Highway AlA,Suite 250 Vero Beach,FL 32963 Tel 772.234.8484 _ Fax 772-234-8488 Independent Auditors'Report The Honorable Boar f Board o County Commissioners and Constitutional Officers Indian River County,Florida We have audited the accompanying financial statements of governmental activities,the business- type activities, the aggregate discretely presented component unit, each major fund, and the aggregate remaining fund information of Indian River County, Florida(the "County") as of and for the year ended September 30, 2009,which collectively comprise the County's basic financial statements as listed in the table of contents. These financial statements are the responsibility of the County's management. Our responsibility is to express opinions on these financial statements based on our audit. We conducted our audit in accordance with auditing standards generally accepted in the United States of America and the standards applicable to financial audits contained in Government Auditing Standards, issued by the Comptroller General of the United States. 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 the 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 opinions. In our opinion, the financial statements referred to above present fairly, in all material respects, the respective financial position of the governmental activities, the business-type activities, the aggregate discretely presented component unit, each major fund, and the aggregate remaining fund information of the County as of September 30,2009,and the respective changes in financial position and cash flows, where applicable, thereof for the year then ended in conformity with accounting principles generally accepted in the United States of America. In accordance with Government Auditing Standards, we have also issued a report dated March 12, 2010 on our consideration of the County's internal control over financial reporting and on our tests of its compliance with certain provisions of laws, regulations, contracts and grant agreements and other matters. The purpose of the report is to describe the scope of our testing of internal control over financial reporting and compliance and the results of that testing and not to provide an opinion on the internal control over financial reporting or on compliance. That report is an integral part of an audit performed in accordance with Government Auditing Standards and should be read in conjunction with this report in considering the results of our audit. "Pievift Vtin and D;Iection to aLw Clien&' Member AICPA Member AICPA Division For CPA Firms Member FICPA Private Companies Practice Section 1 Harris, Cotherman, Jones, Price &Associates Certified Public Accountants•Chartered The Honorable Board of County Commissioners and Constitutional Officers Indian River County,Florida Page two The Management's Discussion and Analysis and required supplementary information,as listed in the table of contents, are not a required part of the basic financial statements but are supplementary information required by accounting principles generally accepted in the United States of America. We have applied certain limited procedures which consisted principally of inquiries of management regarding the methods of measurement and presentation of the required supplementary information. However, we did not audit the information and express no opinion on it. Our audit was conducted for the purpose of forming opinions on the basic financial statements that collectively comprise the County's basic financial statements. The accompanying information identified in the table of contents as combining and individual fund statements and schedules and the schedule of federal awards and state projects 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. The information identified in the table of contents as the Introductory and Statistical Sections is presented for purposes of additional analysis and is not a required part of the basic financial statements of Indian River County, Florida. Such information has not been subjected to the auditing procedures applied in the audit of the basic financial statements, and accordingly, we express no opinion on them. , / �O( 7i4t&l" &&W& Vero Beach,Florida March 12,2010 r 2 Indian River County,Florida Management's Discussion and Analysis For the Year Ended September 30,2009 We offer readers of the County's financial statements this narrative overview and analysis of the financial activities of the County for the fiscal year ended September 30, 2009. We encourage readers to consider the information presented here, in conjunction with additional information that we have furnished in our letter of transmittal, which can be found on pages i-v of this report. All amounts, unless otherwise indicated, are expressed in millions of dollars. FINANCIAL HIGHLIGHTS • The County's overall financial position improved over 2008. • The assets of the County exceeded its liabilities by $987.3 million (net assets). Of this amount, $93.0 million(unrestricted net assets)may be used to meet the government's ongoing obligations to citizens and creditors. • The government's total net assets increased by $19.7 million. Governmental activities accounted for 75% (or $14.7 million) of this increase. Attributing to this increase was a 2.3% reduction in governmental activities expenses from$168.8 million in 2008 to $164.9 million in 2009. • The County's governmental activities reported combined ending net assets of$675.9 million, an increase of $14.7 million in comparison with the prior year of $661.2 million. Of the $675.9 million ending net assets, 8% or$55.9 million, is unrestricted net assets. • Unreserved and undesignated fund balance for the general o g g al fund was $47.6 million, or 6/o increase from prior year general fund unreserved and undesignated fund balance. The general fund reserved$8 million to fund expansion of plant operations for Piper Aircraft. OVERVIEW OF FINANCIAL STATEMENTS This discussion and analysis is intended to serve as an introduction to the County's basic financial statements. The County's basic financial statements are composed of three elements: 1) government- wide financial statements, 2) fund financial statements, and 3) notes to the financial statements. This report also contains other supplementary information in addition to the basic financial statements themselves. Government-wide financial statements The government-wide financial statements are designed to provide readers with a broad overview of the County's finances, in a manner similar to a private-sector business. The Statement of Net Assets presents information on all of the County's assets and liabilities, with the difference between the two reported as net assets. Over time, increases or decreases in net assets may serve as a useful indicator of whether the financial position of the County is improving or deteriorating. 3 Indian River County,Florida Management's Discussion and Analysis For the Year Ended September 30,2009 The Statement of Activities presents information showing how the government's net assets changed during the most recent fiscal year. All changes in net assets are reported as soon as the underlying event giving rise to the change occurs, regardless of the timing of related cash flows. Thus, revenues and expenses are reported in this statement for some items that will only result in cash flows in future fiscal periods (e.g., uncollected taxes and earned, but unused, vacation leave). Both of the government-wide financial statements distinguish functions of the County that are principally supported by taxes and intergovernmental revenues (governmental activities) from other functions that are intended to recover all or a significant portion of their costs through user fees and charges (business-type activities). The governmental activities of the County include general government, public safety, physical environment, transportation, economic environment, human services, culture and recreation, and court related functions. The major business-type activities include a water and sewer utility, a solid waste disposal district, a golf course, and a building department. The government-wide financial statements include not only the Board of County Commissioners, but also the Clerk of the Circuit Court, Property Appraiser, Sheriff, Supervisor of Elections and Tax Collector. In addition, financial information is reported in a separate column for the Indian River County Housing Authority (the Authority). The Authority is not part of the primary government of Indian River County. The government-wide financial statements can be found on pages 17-19 of this report. Fund financial statements A fund is aou in of related accounts that is used to maintain control over resources that have been �' P g segregated for specific activities or objectives. The County, like other state and local governments, uses fund accounting to ensure and demonstrate compliance with finance-related legal requirements. All of the funds of the County can be divided into three categories: governmental funds, proprietary funds, and fiduciary funds. Governmental funds. Governmental funds are used to account for essentially the same functions reported as governmental activities in the government-wide financial statements. However, unlike the government-wide financial statements, governmental fund financial statements focus on near-term inflows and outflows of spendable resources, as well as on balances of spendable resources available at the end of the fiscal year. Such information may be useful in evaluating a government's near-term financial requirements. Because the focus of governmental funds is narrower than that of the government-wide financial statements, it is useful to compare the information presented for governmental funds with similar information presented for governmental activities in the government-wide financial statements. By doing so, readers may better understand the long-term impact of the government's near-term financial decisions. Both the governmental fund Balance Sheet and the governmental fund Statement of Revenues, Expenditures, and Changes in Fund Balances provide a reconciliation to facilitate this comparison between governmental funds and governmental activities. The Countymaintains 37 individual governmental funds. Information is presented separately in the governmental fund Balance Sheet and in the governmental fund Statement of Revenues, Expenditures, and Changes in Fund Balances for the general fund, four special revenue funds, and one capital project fund, the Optional (one-cent) Sales Tax Fund. All are considered to be major funds. Data from the other 31 governmental funds are combined into a single, aggregated presentation. 4 Indian River County,Florida Management's Discussion and Analysis For the Year Ended September 30,2009 Individual fund data for each of these nonmajor governmental funds is provided in the form of combining statements located behind the notes to the financial statements. The combining statements for the nonmajor governmental funds can be found on pages 101-152 of this report. The County adopts an annual appropriated budget for its general fund. A budgetary comparison statement has been provided for the general fund to demonstrate compliance with this budget. The basic governmental fund financial statements can be found on pages 20-29 of this report. Proprietary funds. The County maintains two different types of proprietary funds. Enterprise funds are used to report the same functions presented as business-type activities in the government-wide financial statements. The County uses enterprise funds to account for its water and sewer utility, solid waste disposal district, golf course, and building department. Internal service funds are an accounting device used to accumulate and allocate costs internally among the County's various functions. The County uses internal service funds to account for its fleet management, self insurance, and geographic information systems. Because these services predominantly benefit governmental rather than business-type functions, they have been included within governmental activities in the government-wide financial statements. Proprietary fund financial statements provide the same type of information as the government-wide financial statements, only in more detail. The proprietary fund financial statements provide separate information for the water and sewer utility, solid waste disposal district, golf course, and building department, which are considered to be major funds of the County. Conversely, internal service funds are combined into a single, aggregated presentation in the proprietary fund financial statements. Individual fund data for the internal service funds is provided in the form of combining statements behind the notes to the financial statements on pages 155-159 of this report. The basic proprietary fund financial statements can be found on pages 31-37 of this report. Fiduciary funds. Fiduciary funds are used to account for resources held for the benefit of parties outside the government. The Indian River County OPEB Trust(IRCOT)holds the assets of the County's other postemployment benefits. Fiduciary funds are not reflected in the government-wide financial statements because the resources of those funds are not available to support the County's own programs. The accounting used for fiduciary funds is much like that used for proprietary funds. The basic fiduciary fund financial statement can be found on pages 38-39 of this report. Notes to the financial statements The notes provide additional information that is essential to a full understanding of the data provided in the government-wide and fund financial statements. The notes to the financial statements can be found on pages 41-99 of this report. Other Information In addition to the basic financial statements and accompanying notes, this report also contains required supplementary information concerning Indian River County's progress in funding its obligations to provide other postemployment benefits to its employees. Required supplementary information can be found on page 100 of this report. 5 Indian River County,Florida Management's Discussion and Analysis For the Year Ended September 30,2009 Government-wide Financial Analysis As noted earlier, net assets may serve over time as a useful indicator of a government's financial position. In the case of the County, assets exceeded liabilities by $987.3 million at the close of the fiscal year. By far, the largest portion of the County's net assets (69%) reflects its investment in capital assets (e.g., land, buildings, infrastructure, intangibles, machinery, and equipment), less any related debt used to acquire those assets that is still outstanding. The County uses these capital assets to provide services to citizens; consequently, these assets are not available for future spending. Although the County's investment in its capital assets is reported as net of related debt, it should be noted that the resources needed to repay this debt must be provided from other sources, since the capital assets themselves cannot be used to liquidate these liabilities. Indian River County Net Assets (In Millions) Governmental Business-type Activities Activities Total 2009 2008 2009 2008 2009 2008 Current and other assets $ 247.4 $ 248.2 $ 108.9 $ 125.6 $ 356.3 $ 373.8 Capital assets 523.9 513.0 283.0 267.5 806.9 780.5 Total assets 771.3 761.2 391.9 393.1 1163.2 1154.3 Current liabilities 23.7 28.8 14.8 19.5 38.5 48.3 Other liabilities 71.7 71.2 65.7 67.2 137.4 138.4 Total liabilities 95.4 100.0 80.5 86.7 175.9 186.7 Net assets: Invested in capital assets, net of related debt 461.7 445.5 223.3 206.1 685.0 651.6 Restricted 158.3 163.1 51.0 75.8 209.3 238.9 Unrestricted 55.9 52.6 37.1 24.5 93.0 77.1 Total net assets $ 675.9 $ 661.2 $ 311.4 $ 306.4 $ 987.3 $ 967.6 A portion of the County's net assets (21.2%)represents resources that are subject to external restrictions on how they may be used. The remaining balance of the unrestricted net assets ($93 million) may be used to meet the government's ongoing obligations to citizens and creditors. At the end of the current fiscal year, the County is able to report positive balances in all three categories of net assets, both for the government as a whole, as well as for its separate governmental and business- type activities. The same situation held true for the prior fiscal year. The government's net assets increased by $19.7 million during the current fiscal year. There was a $33.4 million increase in net assets invested in capital assets, net of related debt resulting from: 1) the construction of roads, drainage and beach restoration projects, 2) the purchase of right-of-way, 3) the expansion of water and wastewaterlants expansion of the County landfill. p and 4)the 6 Indian River County,Florida Management's Discussion and Analysis For the Year Ended September 30,2009 Indian River County Changes in Net Assets (In Millions) Governmental Business-type Activities Activities Total Revenues: 2009 2008 2009 2008 2009 2008 Program revenues: Charges for services $ 18.6 $ 24.2 $ 41.5 $ 44.7 $ 60.1 $ 68.9 Operating grants/contributions 11.1 15.2 1.2 0.2 12.3 15.4 Capital grants/contributions 15.0 29.2 3.7 10.8 18.7 40.0 General revenues: Property taxes 94.4 99.8 - - 94.4 99.8 Sales taxes 19.3 20.1 19.3 20.1 Franchise fees 9.7 9.4 - - 9.7 9.4 State shared revenues 11.2 11.6 0.4 - 11.6 11.6 Other 7.8 12.5 3.7 5.6 11.5 18.1 Total revenues 187.1 222.0 50.5 61.3 237.6 283.3 Expenses: General government 25.8 7.4 - - 25.8 7.4 Public safety 71.2 70.9 71.2 70.9 Physical environment 0.8 28.0 - - 0.8 28.0 Transportation 23.7 25.7 - - 23.7 25.7 Economic environment 0.7 4.6 - - 0.7 4.6 Human services 8.5 12.6 - - 8.5 12.6 Culture/recreation 24.5 9.5 - - 24.5 9.5 Court related 6.8 7.3 - - 6.8 7.3 Interest and fiscal charges 2.9 2.8 - - 2.9 2.8 Water and sewer 37.5 41.4 37.5 41.4 Solid waste - - 10.4 11.3 10.4 11.3 Golf course - - 2.9 2.8 2.9 2.8 Building 2.2 3.0 2.2 3.0 Total expenses 164.9 168.8 53.0 58.5 217.9 227.3 Increase decrease in net assets before (decrease) transfers 22.2 53.2 (2.5) 2.8 19.7 56.0 Transfers 7.5 2.0 7.5 (2.0) - - Increase in net assets 14.7 55.2 5.0 0.8 19.7 56.0 Net assets-October 1, 2008 661.2 608.5 306.4 305.7 967.6 914.2 Adjustment-pollution remediation - (2.5) - (0.1) - (2.6) Net assets - September 30, 2009 $ 675.9 $ 661.2 $ 311.4 $ 306.4 $ 987.3 $ 967.6 7 Indian River County,Florida Management's Discussion and Analysis For the Year Ended September 30,2009 Governmental Activities Governmental activities revenues exceeded expenses by $14.7 million, accounting for 75% of the total growth in the County's net assets. Key elements of this increase are as follows: • Overall program revenues decreased $23.9 million. 1) Charges for services decreased by $5.6 million or 23%, a reflection of the slowdown in the general economy. 2) Operating grants in 2009 were $4.1 million lower, a decrease of 27% from the 2008 operating grant revenues. Economic environment operating grants decreased by $3.0 million,transportation decreased by $1.5 million, and the remaining grants increased by$0.4 million. 3) Capital grants were $14.2 million lower in 2009 than in 2008, an overall decrease of 48%. This was largely due to decreased physical environment capital grants ($12.0 million lower) and decreased transportation capital grants ($3.4 million lower). The large decrease in physical environment capital grants was mainly due to $7.3 million in FEMA and $4.1 million in stormwater grant reimbursements that occurred in fiscal year 2007-2008. • The governmental expenses were $3.9 million lower in 2009 than in 2008. The decrease is a reflection of budget cuts and completion of grant funded projects in fiscal year 2009. The large increase ($15.0 million) in culture/recreation expenses was mainly due to a $5.1 million contribution towards the construction of a joint use library with the college and increased depreciation costs for beach restoration projects that were capitalized as infrastructure. • The fluctuations between general government and physical environment expenses from 2008 to 2009 were due to $21.8 million in environmentally sensitive land purchases that were classified between these two functions. Business-type activities Business-type activities increased the County's net assets by $5.0 million, accounting for 25% of the total growth in the government's net assets. Key elements of this increase are as follows: • Capital grants/contributions decreased $7.1 million due to the reclassifying of capital assets from capital contributions to transfers in. • Charges for services for business-type activities decreased by $3.2 million or 7%. Solid waste charges decreased $1.1 million, or 10%, due to decreased construction activity. County building charges decreased by $1.2 million or 42%, due to decreased construction activity in the County. • Interest earnings had decreased by $1.9 million or 34% from the preceding year due to lower interest rates. 8 r Indian River County, Florida Management's Discussion and Analysis For the Year Ended September 30,2009 • Overall expenses are $5.5 million or 9% lower in 2009 than in 2008. Solid waste expenses were $0.9 million or 8% lower in 2009 than in 2008 due to a reduction in the required contribution for closure costs of the County landfill. The golf course had $0.1 million or 4% higher expenses in 2009 than in 2008 due to increased maintenance costs. The building department had $0.8 million or 27% lower expenses in 2009 than in 2008, largely the result of reduced staff. Water and sewer utilities expenses were $3.9 million or 9% lower in 2009 than in 2008 mainly due to adjustments for the capitalization of projects that were expensed in prior years. FINANCIAL ANALYSIS OF THE GOVERNMENT'S FUNDS As noted earlier, the County uses fund accounting to ensure and demonstrate compliance with finance related legal requirements. Governmental funds Unreserved fund balance may serve as a useful measure of the County's net resources available for spending at the end of the fiscal year. As of the end of the current fiscal year, the County's governmental funds reported combined ending fund balances of $200.5 million, an increase of $1 million in comparison with the prior year. • The fund balance of the County's General Fund increased by$2.7 million. • In the Impact Fees Fund, expenditures exceeded revenues by $12.1 million. Contributing factors were the slowdown in construction activity reflected by a decrease in impact fee revenue of$3.4 million, or 62%, and a decrease in interest earnings of $1.2 million due to market conditions. The transportation expenditures decreased by $8.9 million, from $23.1 million in 2008 to $14.1 million in 2009, due to the completion of some large road projects in 2008. Culture/recreation expenditures increased by $1.6 million, from $0.3 million to 2008 to $1.9 million in 2009, due to the purchase of the initial book collection for the Brackett Library. • The Emergency Services District fund balance increased $0.3 million, which was significantly less than the $2.4 million increase in 2008. Contributing to this decrease was a reduction in property taxes (down by $2.0 million) and increased expenditures for the EOC Training Center and Fire Station#2 renovations. • The Optional Sales Tax Fund increased by $5.6 million in 2009 compared with a $10.0 million increase in 2008. This accumulation of sales taxes is earmarked to help fund the Sector 3 beach project scheduled to begin in fiscal year 2010. Grant revenues decreased by 33% or $2.1 million due to the completion of the main relief canal stormwater project and the closure of the grant for that project. • Of the $200.5 million combined ending fund balances, 69% is classified as unreserved, undesignated fund balance. The prior year's ending fund balance of $199.5 million reflected 71% as the unreserved, undesignated portion. The 2% decrease reflects additional monies reserved for capital projects. 9 Indian River County,Florida Management's Discussion and Analysis For the Year Ended September 30,2009 The remainder of fund balance is reserved to indicate that it is not available for new spending. The largest reserved amount is in the Optional Sales Tax Fund, which is reserved for capital projects in the amount of$32.3 million. Other reservations include $14.2 million for capital projects and $0.68 million for advances to other funds in the Secondary Roads Construction Fund, and, the total fund balances for the two debt service funds and one construction reserve fund listed on page 113. The General Fund is the chief operating fund of the County. At the end of the current fiscal year, unreserved, undesignated fund balance of the General Fund was $47.6 million. As a measure of the General Fund's liquidity, it may be useful to compare unreserved fund balance to total expenditures. Unreserved,undesignated fund balance represents 54%of total General Fund expenditures. 1 The Impact Fees Fund had a $46.2 million unreserved, undesignated fund balance, and the total impact fee expenditures were 35% of the ending fund balance, indicating future road construction. Fund balances of the Impact Fees, Secondary Roads, and Transportation Funds are slated for major road expansions throughout the County. Proprietary funds Unrestricted net assets at the end of the year amounted to $19.0 million in the Solid Waste Disposal District Fund, ($0.1) million in the Golf Course Fund, $4.0 million in the County Building Fund, and $14.2 million in the County Utilities Fund. Other factors concerning the finances of these funds have already been addressed in the discussion of the County's business-type activities. GENERAL FUND BUDGETARY HIGHLIGHTS During the year there was an $11.5 million increase in appropriations between the original and final amended budget. The main components of the increase are as follows: • $8,000,000 supplemental appropriation for incentive payments to Piper Aircraft. • $1,820,292 grants appropriations and prior year rollovers for the Community Transportation Coordinator to provide County-wide public transportation. • $400,000 supplemental appropriation to the Tax Collector's office. • $282,871 supplemental appropriation to the Sheriffs Department for air conditioning repairs ($40,000) and software costs ($242,871). Actual revenues exceeded final for the following budget by$2.2 g reasons: • Grants received mid-year that are not budgeted until awarded. • Actual receipts of taxes exceeded budget by$1.0 million. • Actual franchise fees received exceeded budget by $1.0 million. 10 Indian River County,Florida Management's Discussion and Analysis For the Year Ended September 30,2009 Actual expenditures were lower than anticipated for the following reasons: • Positions budgeted but not filled due to hiring freeze. • Departments were advised to reduce expenditures mid-year. Piper incentive of$8 million was not paid. The General Fund Statement of Revenues, Expenditures, and Changes in Fund Balances — Budget and Actual is shown on page 25. CAPITAL ASSETS AND DEBT ADMINISTRATION Capital Assets The County's investment in capital assets for its governmental and business-type activities as of September 30, 2009, amounts to $806.9 million (net of accumulated depreciation). This investment in capital assets includes land, right-of-way, buildings and improvements, intangibles, equipment, infrastructure and construction in progress. The overall increase in the County's investment in capital assets for the current fiscal year was 3% (a 2% increase for governmental activities and a 6% increase for business-type activities). Governmental activities had the following major increases during the fiscal year: • An increase in infrastructure primarily due to the capitalization of the Oslo Road widening project from 27th Avenue to Timber Ridge ($11 million), the Sectors 1, 2 and 7 beach renourishment projects ($17.9 million), and the main relief canal pollution control system ($5.3 million). • An increase in construction in progress primarily due to the Egret Marsh Stormwater project ($5 million), Fire Station #9 renovation and Fire Station #12 construction ($3.9 million), and the County Road 512 widening project($5 million). An increase in right-of-way primarily due to $2.8 million for right-of-way on 43rd Avenue and $2.3 million for 66th Avenue. Business-type activities had the following major increases during the fiscal year: • An increase in construction in progress was due to the Class I Landfill expansion, the West Regional Wastewater Treatment Plant expansion, the Spoonbill Marsh project, and construction of the new Biosolids facility. o An increase in improvements due to the capitalization of the North County R/O plant expansion, and the Segment One Landfill Slopes C&D projects. 11 Indian River County,Florida Management's Discussion and Analysis For the Year Ended September 30,2009 Indian River County Capital Assets (Net of Depreciation,In Millions) Governmental Business-type Activities Activities Total 2009 2008 2009 2008 2009 2008 Land $ 138.3 $ 137.8 $ 19.3 $ 18.4 $ 157.6 $ 156.2 Right-of-way 43.0 33.4 - - 43.0 33.4 Buildings and improvements 147.9 142.1 219.6 188.5 367.5 330.6 Equipment 25.1 31.7 4.7 6.0 29.8 37.7 Intangibles 2.4 2.0 0.4 0.1 2.8 2.1 Infrastructure 118.2 85.2 - - 118.2 85.2 Construction in progress 49.0 80.8 39.0 54.5 88.0 135.3 Total $ 523.9 $ 513.0 $ 283.0 $ 267.5 $ 806.9 $ 780.5 Additional information on the County's capital assets can be found in Note 6 on pages 63-65 of this report. Debt Administration-Long-term debt end of the current fiscal ear, the Count had total bonded debt outstanding of$122.0 million. Of At the y y this amount, $49.3 million is debt backed by the full faith and credit of the government. The revenue bonds represent bonds secured solely by specified revenue sources. Indian River County's Outstanding Debt General Obligation and Revenue Bonds (In Millions) Governmental Business-type Activities Activities Total General Obligation Debt: 2009 2008 2009 2008 2009 2008 General Obligation, Series 2001 $ 6.0 $ 6.7 $ - $ - $ 6.0 $ 6.7 General Obligation Ref, Series 2003 1.2 2.4 - - 1.2 2.4 Limited General Oblig., Series 2006 42.1 44.9 - - 42.1 44.9 Revenue Bonds: Spring Training Facility, Series 2001 12.9 13.4 - - 12.9 13.4 Recreational Revenue Ref., Series 2003 - - 3.7 4.1 3.7 4.1 Water and Sewer Ref. Rev., Series 1993A - - 3.0 31.8 3.0 31.8 Water and Sewer Ref. Rev., Series 2005 - - 24.1 25.5 24.1 25.5 Water and Sewer Ref. Rev., Series 2009 - - 29.0 - 29.0 - Total $ 62.2 $ 67.4 $ 59.8 $ 61.4 $ 122.0 $ 128.8 12 Indian River County,Florida Management's Discussion and Analysis For the Year Ended September 30,2009 The County's General Obligation and Revenue Bonds underlying rating from Standard & Poor's continues to be "AA". Standard & Poor's rating is required on all issues. A second rating from Fitch or Moody's is also required. Additional information on the County's long-term debt can be found in Note 12 on pages 70-85 of this report. ECONOMIC FACTORS AND NEXT YEAR'S BUDGETS AND RATES In response to declining property values, sales tax and various other County revenues, the Board's departments, Constitutional Officers, and outside agencies were asked to trim their budgets substantially from the previous year. Many cost savings initiatives have been proposed in order to account for the revenue reductions. Some of these included staffing reductions, travel decreases, energy conservation measures, minimal reductions in services and programs, and reduced non-profit funding. The County's staff and elected officials considered many factors in developing the fiscal year 2009-2010 budget. The tax roll in the General Fund declined by 8.8%due to falling real estate values. The total proposed budget (with capital project expenditure adjustments) is a decrease of 10.1%. Indian River County, like the nation overall, has been experiencing an economic slowdown this year. New construction activity has fallen sharply as a result of the downturn in real estate and the associated credit crunch. The national slowdown has impacted our tourism and retail industries as well. These areas have spilled over into other sectors of the economy. As a result, revenue projections for next year are quite weak. For example, Half-Cent Sales Tax shows a 10.2% decrease and State Shared Revenues are projected to decrease 11.5%. Development permitting fees are expected to drop 33.3% while i building permit revenues are expected to fall 29.2%. Interest earnings are also projected to decline 42.3%. With an increase in recycling and the department's cost cutting measures, Solid Waste Disposal District (SWDD) residential rates have decreased 1.4% and the commercial assessment rates have decreased 0.7% for the fiscal year 2009-2010. Street lighting district assessment rates remained the same. All other rates and user's fees remain unchanged from fiscal year 2008-2009. REQUESTS FOR INFORMATION This financial report is designed to provide a general overview of the County's finances for all those with an interest in the government's finances. Questions concerning any of the information provided in } this report or requests for additional financial information should be addressed to: Clerk of the Circuit Court Attention: Finance Department 180127'Street Vero Beach, FL 32960 13 ;,. .. o .. Q BASIC FINANCIAL STATEMENTS 15 ��Y � )o .� is `/ ti �.:. o . : . :: .. .t:: Q � Indian River County,Florida Statement of Net Assets September 30,2009 Primary Government Governmental Business-type Component ASSETS Activities Activities Total Unit Current assets: Cash and cash equivalents $ 182,635,297 $ 49,593,908 $ 232,229,205 $ 25,177 Investments 3,064 - 3,064 Accounts receivable-net 1,791,805 2,646,054 4,437,859 1,306 Internal balances 583,785 (583,785) Due from other governments 44,916,705 891,097 45,807,802 321,506 Interest receivable 582,461 720,390 1,302,851 Inventories 173,437 1,024,472 1,197,909 t Prepaid expenses 1,150,481 2,090 1,152,571 Current restricted assets: _ Cash and cash equivalents 14,983,222 46,628,681 61,611,903 665,256 Total current assets 246,820,257 100,922,907 Non-current assets: 347,743,164 1,013,245 Unamortized bond costs 4,367,248 4,367,248 60,194 Net other postemployment benefits asset 103,880 - 103,880 Capital assets-non-depreciable 234,160,782 58,752,487 292,913,269 4,312,413 Capital assets-depreciable 471,071,798 391,242,359 862,314,157 9,647,974 Capital assets-accumulated depreciation (181,322,345) (166,945,408) (348,267,753) (5,345,142) Non-current restricted assets: Special assessments receivable 536,499 1,458,527 1,995,026 Impact fees receivable _ 874,785 874,785 _ Liens receivable 1,205,484 1,205,484 Total non-current assets 524,550,614 290,955,482 815,506,096 8,675,439 Total assets 771,370,871 391,878,389 1,163,249,260 9,688,684 LIABILITIES Current liabilities(payable from current assets): Accounts payable 8,929,094 3,036,354 11,965,448 347,307 Retainage payable 387,686 387,686 Claims payable 2,348,660 - 2,348,660 - Due to other governments 709,465 13,462 722,927 - Other deposits held in escrow 296,921 2,000 298,921 - Unearned revenues 1,121,724 37,390 1,159,114 Accrued compensated absences 3,192,740 451,186 3,643,926 - Pollution remediation costs payable 152,717 9,760 162,477 - Current liabilities(payable firom current restricted assets): Accounts payable - 1,799,914 1,799,914 Retainage payable 1,139,339 915,917 2,055,256 - Accrued interest payable 528,883 225,791 754,674 30,284 Closure and maintenance costs payable - 1,795,542 1,795,542 - Customer deposits - 2,736,218 2,736,218 16,192 Bonds payable 5,315,000 3,380,000 8,695,000 131,000 Total current liabilities 23,734,543 14,791,220 38,525,763 524,783 Non-current liabilities: It Accrued compensated absences 7,103,399 606,668 7,710,067 Pollution remediation costs payable 2,190,583 34,240 2,224,823 Claims payable 5,526,340 - 5,526,340 - Closure and maintenance costs payable - 8,632,433 8,632,433 - Bonds payable,net of premium and discount 56,885,387 56,396,398 113,281,785 3,304,779 Total non-current liabilities 71,705,709 65,669,739 137,375,448 3,304,779 Total liabilities 95,440,252 80,460,959 175,901,211 3,829,562 NET ASSETS Invested in capital assets,net of related debt 461,709,848 223,273,040 684,982,888 5,179,466 Restricted for: Capital projects 38,536,392 50,740,261 89,276,653 524,280 Debt service/bond covenants 3,787,687 281,667 4,069,354 124,784 Road projects 56,256,885 _ 56,256,885 - Other special revenues 51,043,400 51,043,400 Economic incentives 8,000,000 - 8,000,000 - Long term advances to other funds 682,000 - 682,000 - Unrestricted 55,914,407 37,122,462 93,036,869 30,592 Total net assets $ 675,930,619 $ 311,417,430 $ 987,348,049 $ 5,859,122 The accompanying notes are an integral part of the financial statements. 17 Indian River County,Florida Statement of Activities For the Year Ended September 30,2009 Program Revenues Operating Capital Charges for Grants and Grants and Expenses Services Contributions Contributions Functions/Programs Primary Government: Governmental activities: General government $ 25,837,007 $ 6,028,321 $ 519,324 $ 387,933 Public safety 71,221,082 5,884,118 1,338,884 957,560 Physical environment 813,580 636,219 275,048 4,329,144 Transportation 23,711,653 2,157,456 4,065,531 1,577,302 Economic environment 661,897 - 2,820,464 308,647 Human services 8,453,562 204,299 1,325,879 - Culture/recreation 24,559,117 1,322,785 732,258 7,472,145 Court related 6,765,203 2,375,430 - - Interest and fiscal charges 2,906,802 - - Total governmental activities 164,929,903 18,608,628 11,0772388 15,032,731 Business-type activities: Water and sewer 37,523,097 26,957,649 338,069 3,748,585 Solid waste 10,407,437 9,713,883 856,925 - Golf course 2,937,141 3,279,135 - Building 2,168,894 1,572,693 - Total business-type activities 53,036,569 41,523,360 1,194,994 3,748,585 Total primary government $ 217,966,472 $ 60,131,988 $ 12,272,382 $ 18,781,316 Component Unit: Housing authority $ 894,398 $ 425,427 $ 1321350 $ - General Revenues: Property taxes,levied for general purposes Property taxes,levied for debt service Sales and use taxes Franchise fees,levied on gross receipts State shared tax revenues Interest earnings Miscellaneous Total general revenues Transfers Total general revenues and transfers Change in net assets Net assets-beginning Net assets-ending r The accompanying notes are an integral part of the financial statements. 18 Net(Expense)Revenue and CLanees in Net Assets Primary Government Governmental Business-type Component Activities Activities Total Unit $ (18,901,429) $ - $ (18,901,429) $ - (63,040,520) - (63,040,520) - 4,426,831 - 4,426,831 - (15,911,364) (15,911,364) - 2,467,214 2,467,214 (6,923,384) - (6,923,384) - (15,031,929) - (15,031,929) (4,389,773) - (4,389,773) - (2,906,802) (2,906,802) - (120,211,156) - (120,211,156) - (6,478,794) (6,478,794) - 163,371 163,371 - = 341,994 341,994 - (596,201) (596,201) - (6,569,630) (6,569,630) - (120,211,156) (6,569,630) (126,780,786) - (336,621) 87,265,989 - 87,265,989 - 7,131,231 7,131,231 19,292,179 - 19,292,179 - 9,670,169 - 9,670,169 - 11,227,450 417,500 11,644,950 - 5,747,573 3,685,805 9,433,378 760 2,018,901 7,893 2,026,794 2,999 142,353,492 4,111,198 146,464,690 3,759 (7,452,905) 7,452,905 - - 134,900,587 11,564,103 146,464,690 3,759 14,689,431 4,994,473 19,683,904 (332,862) 661,241,188 306,422,957 967,664,145 6,191,984 $ 675,930,619 $ 311,417,430 $ 987,348,049 $ 5,859,122 k 19 Indian River County,Florida Balance Sheet Governmental Funds September 30,2009 Secondary Impact Roads General Fees Construction ASSETS 59,000,888 $ 47,272,970 $ 2,173,515 Cath and cash equivalents $ _ - Investments 3,064 610,733 Accounts receivable-net Special assessments receivable 118,434 Due from other funds 1,144,463 25,416 14,210,599 Due from other governments 51,508 Inventories _ Interest receivable 9,498 109,847 Prepaid items _ 682,000 Advance to other funds60,938,588 $ 47,408,233 $ 17,066,114 Total assets $ LIABILITIES AND FUND BALANCES Liabilities: 806,041 $ 1,433,112 3,735,986 $ Accounts payable $ 234,844 Retainage payable 260 321,788 - Due to other funds 568,290 Due to other governments 609,886 35,119 Deferred revenues 110, Other deposits held in escrow 296,992121 Advance from other funds 1,162,948 1,667,956 Total liabilities 5,321,815 Fund balances: Reserved for. Debt service _ 14,217,224 Capital projects - Economic incentives 8,000,000 _ 682,000 Other purposes Unreserved,reported in: _ _ General fund 47,616,773 - 46,245,285 498,934 Special revenue funds 55,616,773 46,245,285 15,398,158 Total fund balances Total liabilities and fund balances $ 60,938,588 $ 47,408,233 $ 17,066,114 11 The accompanying notes are an integral part of the financial statements. 20 a1 a' Emergency Optional Other Total Services Sales Governmental Governmental Transportation District Tax Funds Funds $ 9,253,967 $ 14,770,085 $ 10,650,213 $ 28,785,543 $ 171,907,181 3,064 409 4,596 26,772 642,510 536,499 - - 536,499 - 362,227 - 107,848 588,509 225,613 548,571 23,573,309 185,462 39,913,433 51,508 680 20,428 140,453 682,000 $ 10,016,488 $ 15,686,159 $ 34,223,522 $ 29,126,053 $ 214,465,157 $ 693,288 $ 925,601 $ 434,983 $ 690,029 $ 8,719,040 12,572 487,432 82,443 1,139,339 118,434 686,724 _ 64,460 709,465 536,499 209,199 966,313 621,951 2,444,434 296,921 1,242,359 1,134,800 1,888,728 1,577,317 13,995,923 _ 4,316,570 4,316,570 32,334,794 1,701,452 48,253,470 _ 8,000,000 682,000 - 47,616,773 81774,129 14,551,359 - 21,530,714 91,600,421 8,774,129 14,551,359 32,334,794 27,548,736 200,469,234 $ 10,016,488 $ 15,686,159 S 34,223,522 $ 29,126,053 Amounts reported for governmental activities in the statement of net assets are different because: Capital assets used in governmental activities are not financial resources,therefore,are not reported in the fund. 523,280,575 Long-term liabilities,including bonds payable($62,200,387),accrued compensated absences($10,255,400),and pollution remediation costs($2,343,300)are not due and payable in the current period and,therefore,are not reported in the fund. (74,799,087) Accrued general long-term debt interest expenses are not financial uses and,therefore,are not reported in the fund. (528,883) Special assessment receivables are not financial resources in the current period and,therefore,are reported as unearned revenues. 174,434 Accrued interest on special assessments is not recognized in the current period because the resources are not available,therefore,not reported in the fund. 94,619 Internal service funds are used by management to charge the costs of certain activities,such as insurance,fleet and geographic information system services,to individual funds. The assets and liabilities of the internal service funds are included in governmental activities in the statement of net assets. 20,645,553 Grant and state shared revenues are not recognized in the current period because the resources are not available, therefore,are not reported in the fund. 6,054,884 The OPEB asset resulting from contributions in excess of the annual required contribution is not a financial resource and therefore is not reported in the funds. 103,880 Interest revenues are not recognized in the current period because the resources are not available,therefore, are not reported in the fund. 435,410 Net assets of governmental activities $ 675,930,619 21 Indian River County,Florida Statement of Revenues,Expenditures,and Changes in Fund Balances Governmental Funds For the Year Ended September 30,2009 Secondary Impact Roads General Fees Construction REVENUES Taxes $ 64,153,092 $ - $ 3,369,962 Permits,fees and special assessments 9,835,444 2,054,049 39,896 Intergovernmental 11,627,740 410,311 632,159 Charges for services 10,895,452 - 88,309 Judgments,fines and forfeits 1,424,809 - - Interest 2,172,844 1,631,210 10,185 Miscellaneous 1,031,678 14,697 36,492 Total revenues 101,141,059 4,110,267 4,177,003 EXPENDITURES Current: General government 21,093,528 137,280 - Public safety 43,804,238 - - Physical environment 338,002 - - Transportation 2,745,818 14,143,034 7,874,096 Economic environment 414,871 - - Human services 3,960,553 - - Culture/recreation 9,925,985 1,888,483 - Court related 6,152,457 - - Debt service: Principal - - - Interest and fiscal charges - - Capital projects - - - Total expenditures 88,435,452 16,168,797 7,874,096 Excess of revenues over(under)expenditures 12,705,607 (12,058,530) (3,697,093) OTHER FINANCING SOURCES(USES) Transfers in 1,194,526 - - Transfers out (11,157,619) - - Total other financing sources(uses) (9,963,093) - - Net change in fund balances 2,742,514 (12,058,530) (3,697,093) Fund balances at beginning of year 52,874,259 58,303,815 19,095,251 Fund balances at end of year $ 55,616,773 $ 46,245,285 $ 15,398,158 st The accompanying notes are an integral part of the financial statements. 22 L Emergency Optional Other Total Services Sales Governmental Governmental Transportation District Tax Funds Funds $ - $ 24,712,845 $ 13,023,095 $ 8,430,405 $ 113,689,399 210,395 19,862 273,952 12,433,598 2,640,252 834,296 4,371,860 13,789,064 34,305,682 59,386 4,575,200 - 1,234,306 16,852,653 13,600 - 354,108 1,792,517 264,792 652,283 285,548 705,007 5,721,869 773,028 13,628 198 619,811 2,489,532 3,947,853 30,801,852 17,700,563 25,406,653 187,285,250 L 549,445 - - 785,860 22,566,113 - 30,014,156 - 994,770 74,813,164 413,419 158,792 910,213 13,122,490 - - 226,074 38,111,512 - - - 238,676 653,547 - _ - 4,661,207 8,621,760 3,636,220 15,450,688 468,373 6,620,830 - - - 5,120,000 5,120,000 2,948,758 2,948,758 10,136,664 298,548 10,435,212 14,085,354 30,014,156 10,136,664 19,537,278 186,251,797 (10,137,501) 787,696 7,563,899 5,869,375 1,033,453 10,923,180 - - 2,192,027 14,309,733 - (459,286) (2,000,000) (749,240) (14,366,145) 10,923,180 (459,286) (2,000,000) 1,442,787 (56,412) 785,679 328,410 5,563,899 7,312,162 977,041 61 7,988,450 14,222,949 26,770,895 20,236,574 199,492,193 $ 8,774,129 $ 14,551,359 $ 32,334,794 $ 27,548,736 $ 200,469,234 L L L 23 Florida Indtan River County,Fl da Reconciliation of the Statement of Revenues, Expenditures,and Changes in Fund Balances of Governmental Funds to the Statement of Activities For the Year Ended September 30,2009 Net chane in fund balances-total governmental funds $ 977,041 g Amounts reported for governmental activities in the statement of activities are different because: Governmental funds report capital outlay as expenditures. However,in the statement of activities,the cost of those assets is allocated over their estimated useful lives as depreciation expense. Expenditures for capital assets 35,470,998 Less current year loss on assets (2,350,155) Less current year depreciation (20,415,341) 12,705,502 Governmental funds do not report capital assets contributed from outside the entity. However,those assets are recognized in the statement of net assets and the capital contribution is recognized in the statement of activities. 5,708,460 Assets transferred from governmental funds to proprietary funds must be recognized as a transfer out on the statement of activities. (7,452,905) Payments of bond principal and pollution remediation costs are expenditures in the governmental funds,but the payment reduces long-term liabilities in the statement of net assets. Bond principal payment 5,120,000 Bond premium payment 93,224 Pollution remediation costs 157,348 5,370,572 Changes in accrued compensated absences do not require the use of current financial resources and,therefore,are not reported as expenditures in governmental funds. (2,874,043) Governmental funds report interest and OPEB expenditures based on when they are paid. The statement of activities reports these expenses as they are incurred. This is the net number of the prior year and current year accrual. Accrued bond interest expense 41,956 Accrued OPEB expense 9,786 51,742 Some revenues reported in the governmental funds have been recognized as revenues in the prior fiscal year in the statement of activities. (81,200) Internal service funds are used by management to charge the costs of insurance,fleet and geographic information systems services to individual funds. The net costs of the internal service funds are reported in governmental activities. 3,778,847 Governmental funds report non-exchange transactions when the applicable eligibility requirements have been met and resources are available. However,in the statement of activities,non-exchange transactions are recognized when the eligibility requirements are met. This is the net number of the prior year and current year accrual. (3,137,329) Some interest revenues reported in the statement of activities do not provide current financial resources,therefore,are not reported as revenues in governmental funds. This is the net number of the prior year and current year accrual. (357,256) Change in net assets of governmental activities $ 14,689,431 The accompanying notes are an integral part of the financial statements. 24 Indian River County,Florida Statement of Revenues,Expenditures,and Changes in Fund Balances-Budget and Actual General Fund For the Year Ended September 30,2009 Variance with Final Budget Budgeted Amounts Actual Positive Original Final Amounts (Negative) REVENUES Taxes $ 63,004,382 $ 63,004,382 $ 64,153,092 $ 1,148,710 Permits,fees and special assessments 8,851,625 8,851,625 9,835,444 983,819 Intergovernmental 10,889,721 12,725,740 11,627,740 (1,098,000) Charges for services 12,502,531 11,080,435 10,895,452 (184,983) Judgments,fines and forfeits 1,488,740 1,158,739 1,424,809 266,070 Interest 1,367,088 1,492,750 2,172,844 680,094 Miscellaneous 405,142 551,005 1,031,678 480,673 Total revenues 98,509,229 98,864,676 101,141,059 2,276,383 EXPENDITURES Current: General government 22,653,481 22,785,773 21,093,528 1,692,245 Public safety 43,679,960 44,403,884 43,804,238 599,646 Physical environment 365,711 365,711 338,002 27,709 Transportation 988,065 3,100,039 2,745,818 354,221 Economic environment 339,252 8,431,488 414,871 8,016,617 Human services 4,186,097 4,264,734 3,960,553 304,181 Culture/recreation 10,326,480 10,736,724 9,925,985 810,739 Court related 6,420,600 6,365,704 6,152,457 213,247 Total expenditures 88,959,646 100,454,057 88,435,452 12,018,605 Excess of revenues over(under)expenditures 9,549,583 (1,589,381) 12,705,607 14,294,988 OTHER FINANCING SOURCES(USES) Transfers in 113,141 939,751 1,194,526 254,775 Transfers out (11,154,008) (11,164,153) (11,157,619) 6,534 Total other financing sources(uses) (11,040,867) (10,224,402) (9,963,093) 261,309 Net change in fund balances (1,491,284) (11,813,783) 2,742,514 $ 14,556,297 Fund balances at beginning of year 1,491,284 11,813,783 52,874,259 Fund balances at end of year $ - $ - $ 55,616,773 The accompanying notes are an integral part of the financial statements. 25 Indian River County,Florida Statement of Revenues,Expenditures,and Changes in Fund Balances-Budget and Actual Impact Fees Fund For the Year Ended September 30,2009 Variance with Final Budget Budgeted Amounts Actual Positive Original Final Amounts (Negative) REVENUES Permits,fees and special assessments $ 4,888,517 $ 4,888,517 $ 2,054,049 $ (2,834,468) Intergovernmental - 1,700,000 410,311 (1,289,689) Interest 1,306,250 1,306,250 1,631,210 324,960 Miscellaneous - - 14,697 14,697 Total revenues 6,194,767 7,894,767 4,110,267 (3,784,500) EXPENDITURES Current: General government 759,466 224,560 137,280 87,280 Public safety 500,000 500,000 - 500,000 Transportation 3,659,500 38,468,130 14,143,034 24,325,096 Culture/recreation 1,500,000 3,705,918 1,888,483 1,817,435 Total expenditures 6,418,966 42,898,608 16,168,797 26,729,811 Excess of revenues over(under) expenditures (224,199) (35,003,841) (12,058,530) 22,945,311 OTHER FINANCING USES Transfers out (350,000) (1,933,266) - 1,933,266 Total other financing uses (350,000) (1,933,266) - 1,933,266 Net change in fund balances (574,199) (36,937,107) (12,058,530) $ 24,878,577 Fund balances at beginning of year 574,199 36 937,107 58,303,815 g g Y Fund balances at end of year $ - $ - $ 46,245,285 The accompanying notes are an integral part of the financial statements. 26 Indian River County,Florida Statement of Revenues,Expenditures,and Changes in Fund Balances-Budget and Actual Secondary Roads Construction Fund For the Year Ended September 30,2009 Variance with Final Budget Budgeted Amounts Actual Positive Original Final Amounts (Negative) REVENUES Taxes $ 3,383,413 $ 3,383,413 $ 3,369,962 $ (13,451) Permits,fees and special assessments - - 39,896 39,896 Intergovernmental - 1,163,894 632,159 (531,735) Charges for services - - 88,309 88,309 Interest 380,000 380,000 10,185 (369,815) Miscellaneous 36,492 36,492 Total revenues 3,763,413 4,927,307 4,177,003 (750,304) EXPENDITURES Current: Transportation 3,756,735 20,049,983 7,874,096 12,175,887 Total expenditures 3,756,735 20,049,983 7,874,096 12,175,887 Net change in fund balances 6,678 (15,122,676) (3,697,093) $ 11,425,583 Fund balances at beginning of year (6,678) 15,122,676 19,095,251 Fund balances at end of year $ - $ - $ 15,398,158 The accompanying notes are an integral part of the financial statements. 27 Indian River County,Florida Statement of Revenues,Expenditures,and Changes in Fund Balances-Budget and Actual Transportation Fund For the Year Ended September 30,2009 Variance with Final Budget Budgeted Amounts Actual Positive Original Final Amounts (Negative) REVENUES Permits,fees and special assessments $ 263,625 $ 263,625 $ 210,395 $ (53,230) Intergovernmental 2,519,795 2,360,064 2,640,252 280,188 Charges for services 114,950 114,950 59,386 (55,564) Interest 142,500 142,500 264,792 122,292 Miscellaneous 1,160,016 3,146,650 773,028 (2,373,622) Total revenues 4,200,886 6,027,789 3,947,853 (2,079,936) EXPENDITURES Current: General government 527,371 569,576 549,445 20,131 Physical environment 711,681 752,681 413,419 339,262 Transportation 13,998,348 16,405,460 13,122,490 3,282,970 Total expenditures 15,237,400 17,727,717 14,085,354 3,642,363 Excess of revenues over(under)expenditures (11,036,514) (11,699,928) (10,137,501) 1,562,427 OTHER FINANCING SOURCES Transfers in 10,923,180 10,923,180 10,923,180 - Total other financing sources 10,923,180 10,923,180 10,923,180 - Net change in fund balances (113,334) (776,748) 785,679 $ 1,562,427 Fund balances at beginning of year 113,334 776,748 7,988,450 Fund balances at end of year $ - $ - $ 8,774,129 The accompanying notes are an integral part of the financial statements. 28 Indian River County,Florida Statement of Revenues,Expenditures,and Changes in Fund Balances-Budget and Actual Emergency Services District Fund For the Year Ended September 30,2009 Variance with Final Budget Budgeted Amounts Actual Positive Original Final Amounts (Negative) REVENUES Taxes $ 24,365,273 $ 24,365,273 $ 24,712,845 $ 347,572 Intergovernmental 20,900 857,480 834,296 (23,184) Charges for services 3,046,175 3,046,175 4,575,200 1,529,025 Judgments,fines and forfeits - - 13,600 13,600 Interest 237,500 237,500 652,283 414,783 Miscellaneous 9,770 9,770 13,628 3,858 Total revenues 27,679,618 28,516,198 30,801,852 2,285,654 EXPENDITURES Current: Public safety 26,226,516 33,637,334 30,014,156 3,623,178 Debt service: Principal 89,043 89,043 - 89,043 Interest and fiscal charges 90,210 90,210 - 90,210 Total expenditures 26,405,769 33,816,587 30,014,156 3,802,431 Excess of revenues over(under)expenditures 1,273,849 (5,300,389) 787,696 6,088,085 OTHER FINANCING USES Transfers out (527,729) (516,506) (459,286) 57,220 Total other financing uses (527,729) (516,506) (459,286) 57,220 Net change in fund balances 746,120 (5,816,895) 328,410 $ 6,145,305 Fund balances at beginning of year (746,120) 5,816,895 14,222,949 Fund balances at end of year $ - $ - $ 14,551,359 The accompanying notes are an integral part of the financial statements. 29 " "� ��Y � � O .� r:. � � . �� o . . .�:: -: •+- Q Indian River County,Florida Statement of Net Assets Proprietary Funds September 30,2009 Business-type Activities-Enterprise Funds Governmental Solid Waste Activities Disposal Golf County County Internal ASSETS District Course Utilities Building Total Service Fund Current assets: Cash and cash equivalents S 16,876,747 $ 9,727 S 28,535,779 S 4,171,655 S 49,593,908 S 25,711,338 Accounts receivable-net 114,406 - 2,531,648 - 2,646,054 1,149,295 Due from other funds 98,215 - - 98,215 - Due from other governments 879,126 11,700 271 - 891,097 96,664 Interest receivable 81,990 2,147 625,368 10,885 720,390 52,432 Inventories - 44,569 979,903 - 1,024,472 121,929 Prepaid items 1,000 - 1,090 2,090 1,010,028 Current restricted assets: Cash and cash equivalents 13,939,253 471,264 32,218,164 46,628,681 - Total current assets 31,990,737 539,407 64,892,223 4,182,540 101,604,907 28,141,686 Non-current assets: Unamortized bond costs - 257,295 4,109,953 4,367,248 - Capital assets-non-depreciable 19,155,483 669,630 38,927,374 58,752,487 - Capital assets-depreciable 21,469,266 8,559,920 360,713,220 499,953 391,242,359 954,353 Capital assets-accumulated depreciation (9,970,909) (2,032,258) (154,502,192) (440,049) (166,945,408) (324,693) Non-current restricted assets: Special assessments receivable 1,458,527 1,458,527 Impact fees receivable 874,785 874,785 Liens receivable 1,205,484 1,205,484 Total non-current assets 30,653,840 7,454,587 252,787,151 59,904 290,955,482 629,660 Total assets 62,644,577 7,993,994 317,679,374 4,242,444 392,560,389 28,771,346 LIABILITIES Current liabilities(payable from current assets): Accounts payable 1,766,423 64,729 1,164,646 40,556 3,036,354 210,054 Retainage payable 387,686 - - 387,686 - Claims payable - - 2,348,660 Due to other governments 8,677 4,785 13,462 - Other deposits 2,000 - 2,000 Unearned revenues 37,390 - 37,390 Pollution remediation payable - 9,760 - 9,760 Accrued compensated absences 104,280 43,508 272,253 31,145 451,186 18,415 Total current liabilities(payable from current assets) 2,258,389 156,304 1,446,659 76,486 3,937,838 2,577,129 Current liabilities(payable from restricted assets) Accounts payable - - 1,799,914 - 1,799,914 - Retainage payable - 915,917 915,917 Accrued interest payable 11,264 214,527 225,791 Bonds payable - 510,000 2,870,000 3,380,000 Closure and maintenance costs payable 1,795,542 - 1,795,542 Customer deposits 164,166 2,572,052 2,736,218 Total current liabilities(payable from restricted assets) 1,959,708 521,264 8,372,410 10,853,382 - Total current liabilities 4,218,097 677,568 9,819,069 76,486 14,791,220 2,577,129 Non-current liabilities: Accrued compensated absences 136,369 33,475 358,146 78,678 606,668 22,324 Advance from other funds - 682,000 - - 682,000 - Claims payable - - - 5,526,340 Pollution remediation payable - 34,240 34,240 - Closure and maintenance costs payable 8,632,433 - 8,632,433 Bonds payable-net of unamortized discount/premium 3,142,985 53,253,413 56,396,398 Total non-current liabilities 8,768,802 3,858,460 53,645,799 78,678 66,351,739 5,548,664 Total liabilities 12,986,899 4,536,028 63,464,868 155,164 81,142,959 8,125,793 NET ASSETS Invested in capital assets,net of related debt 30,653,840 3,544,307 189,014,989 59,904 223,273,040 629,660 Restricted for. Debt service - 42,500 239,167 - 281,667 - Capital projects - - 50,740,261 - 50,740,261 - Umestricted 19,003,838 (128,841) 14,220,089 4,027,376 37,122,462 20,015,893 Total net assets S 49,657,678 S 3,457,966 $ 254,214,506 S 4,087,280 S 311,417,430 S 20,645,553 The accompanying notes are an integral part of the financial statements. 31 Indian River County,Florida Statement of Revenues,Expenses,and Changes in Fund Net Assets # Proprietary Funds For the Year Ended September 30,2009 Business-type Activities- Solid Waste Disposal Golf County District Course Utilities OPERATING REVENUES - Charges for services $ 9,713,883 $ $ Charges for services pledged as security for revenue bonds - 3,279,135 26,957,649 Total operating revenues 9,713,883 3,279,135 26,957,649 OPERATING EXPENSES Personal services 2,839,996 705,398 8,093,873 Material,supplies,services and other operating 6,693,589 1,875,856 11,827,094 Depreciation 873,852 166,602 14,437,671 Total operating expenses 10,407,437 2,747,856 34,358,638 Operating income(loss) (693,554) 531,279 (7,400,989) NONOPERATING REVENUES(EXPENSES) - Interest income 1,436,998 - Interest income pledged as security for revenue bonds - 13,035 2,110,031 Operating grants 856,925 - 338,069 Gain on disposal of equipment - 1,332 6,561 Interest expense - (147,780) (2,807,964) Bond amortization expense - (41,505) (211,991) Loss on disposal of equipment - - (144,504) State shared revenues - 417,500 - Total nonoperating revenues(expenses) 2,293,923 242,582 (709,798) Income(loss)before transfers and capital contributions 1,600,369 773,861 (8,110,787) Capital contributions - - (25,642,735) Capital contributions pledged as security for revenue bonds - - 36,844,225 Transfers in - Change in net assets 1,600,369 773,861 3,090,703 Total net assets-beginning 48,057,309 2,684,105 251,123,803 Total net assets-ending $ 49,657,678 $ 3,457,966 $ 254,214,506 The accompanying notes are an integral part of the financial statements. 32 Enterprise Funds Governmental Activities County Internal Building Total Service Funds $ 1,572,693 $ 11,286,576 $ 24,724,017 - 30,236,784 - 1,572,693 41,523,360 24,724,017 1,504,805 13,144,072 3,163,701 575,994 20,972,533 18,110,069 88,095 15,566,220 110,221 2,168,894 49,682,825 21,383,991 (596,201) (8,159,465) 3,340,026 125,741 1,562,739 380,559 - 2,123,066 - 1,194,994 - - 7,893 1,850 - (2,955,744) - (253,496) - (144,504) - - 417,500 - 125,741 1,952,448 382,409 (470,460) (6,207,017) 3,722,435 (25,642,735) - 36,844,225 - 56,412 (470,460) 4,994,473 3,778,847 4,557,740 306,422,957 16,866,706 $ 4,087,280 $ 311,417,430 $ 20,645,553 33 Indian River County,Florida Statement of Cash Flows Proprietary Funds For the Year Ended September 30,2009 Business-type Activities- Solid Waste Disposal Golf County District Course Utilities CASH FLOWS FROM OPERATING ACTIVITIES Cash received from customers $ 9,274,877 $ 3,271,331 $ 26,147,801 Cash paid to suppliers for goods and services (7,257,595) (1,861,190) (15,799,172) Cash paid to employees for services (2,813'024) (730,699) (8,091,949) Net cash provided by(used in)operating activities (795,742) 679,442 2,256,680 CASH FLOWS FROM NONCAPITAL FINANCING ACTIVITIES Transfers Operating grants(repayments) (20,971) - 534,840 Payments for advances from other funds - (30,000) - State shared revenues - 417,500 - Net cash provided by(used in)noncapital (20,971) 387,500 534,840 financing activities CASH FLOWS FROM CAPITAL AND RELATED FINANCING ACTIVITIES Principal payments-bonds/notes - ( ,000) (2,745,000) (28 Principal payments-capital leases - (28,126) - 13) Interest paid on long-term debt - (148, (2,047,5 Proceeds from sales of capital assets - 1,333232 6,56611 Purchase of capital assets (4,375,808) - (15,833,438) Bond issuance and refunding costs - - (618,553) Capital contributed by others - - 1,703,656 Net cash used in capital and related financing activities (4,375,808) (665,697) (19,534,287) CASH FLOWS FROM INVESTING ACTIVITIES Interest and dividends on investments 1,507,173 11,373 2,303,629 Net cash provided by investing activities 1,507,173 11,373 2,303,629 Net increase(decrease)in cash and cash equivalents (3,685,348) 412,618 (14,439,138) Cash and cash equivalents at beginning of year 34,501,348 68,373 75,193,081 Cash and cash equivalents at end of year $ 30,816,000 $ 480,991 $ 60,753,943 Classified as: Current assets $ 16,876,747 $ 9,727 $ 28,535,779 Restricted assets 13,939,253 471,264 32,218,164 Totals $ 30,816,000 $ 480,991 $ 60,753,943 The accompanying notes are an integral part of the financial statements. 34 Enterprise Funds Governmental Activities County Internal Building Total Service Funds $ 1,572,693 $ 40,266,702 $ 24,739,869 (589,424) (25,507,381) (16,781,549) (1,531,410) (13,167,082) (3,177,402) (548,141) 1,592,239 4,780,918 = - 56,412 513,869 (30,000) - 417,500 - 901,369 56,412 (3,235,000) - = (28,126) (2,196,416) - 7,893 1,850 (6,735) (20,215,981) (104,613) (618,553) - 1,703,656 - (6,735) (24,582,527) (102,763) 134,932 3,957,107 375,379 134,932 3,957,107 375,379 (419,944) (18,131,812) 5,109,946 4,591,599 114,354,401 20,601,392 $ 4,171,655 $ 96,222,589 $ 25,711,338 $ 4,171,655 $ 49,593,908 $ 25,711,338 - 46,628,681 - $ 4,171,655 $ 96,222,589 $ 25,711,338 Continued 35 Indian River County,Florida Statement of Cash Flows Proprietary Funds For the Year Ended September 30,2009 Business-type Activities- Solid Waste Disposal Golf County District Course Utilities RECONCILIATION OF OPERATING INCOME(LOSS)TO NET CASH PROVIDED BY(USED IN)OPERATING ACTIVITIES $ (693,554) $ 531,279 $ (7,400,989 Operating income(loss) ) Adjustments to reconcile operating income to net cash provided by(used in)operating activities: Work in progress reclassified as expense (336,107) - (2,453,493) Depreciation 873,852 166,602 14,437,671 Capitalized self-incurred expenses - - (28,183) (Increase)Decrease in assets: Accounts receivable 61,047 - 339,599 Due from other funds 3,53 - (53 Due from other governments 0) ( - Inventories - (1,556464)) (107,621) Impact fees receivable - - 107,956 Liens receivable - (718,265) Intangible assets (163,619) - (300,000) (1,000) - (1,090) Prepaid expenses Increase(Decrease)in liabilities: Accounts payable 841,007 15,103 (1,468,061) Due to other governments - 1,127 (17,233) Retainage payable ' Customer deposits (3,018) - (122,293) Closure and maintenance costs payable (1,404,013) - - Pollution remediation costs payable - (41,425) Unearned revenues - (7,604) - Claims payable - - Accrued compensated absences 26,972 (25,301) 30,107 Total adjustments (102,188) 148,163 9,657,669 Net cash provided by(used in)operating activities $ (795,742) $ 679,442 $ 2,256,680 NONCASH CAPITAL AND RELATED FINANCING ACTIVITIES Change in fair value of investments $ 261,600 $ 6,851 $ 523,538 Contributed property,plant and equipment $ - $ - $ 10,021,194 Capital assets purchased through accounts payable $ - $ - $ 1,585,577 s The accompanying notes are an integral part of the financial statements. 36 A Enterprise Funds Governmental Activities County Internal Building Total Service Funds $ (596,201) $ (8,159,465) $ 3,340,026 - (2,789,600) - 88,095 15,566,220 110,221 (28,183) - 400,646 (57,987) - 3,221 - - (730) 73,839 (109,185) 64,641 - 107,956 - - (718,265) = (463,619) (2,090) 413,669 (11,822) (623,773) (118,892) (1,608) (17,714) - (10,898) - (125,311) - - (1,404,013) - = (41,425) = ( 7,604) - 980,000 (26,605) 5,173 (13,701) 48,060 9,751,704 1,440,892 $ (548,141) $ 1,592,239 $ 4,780,918 $ 34,730 $ 826,719 $ 89,324 $ - $ 10,021,194 $ - $ - $ 1,585,577 $ - 37 Indian River County,Florida Statement of Fiduciary Net Assets Fiduciary Funds September 30,2009 Other Postemployment Agency Benefits Trust ASSETS Cash and cash equivalents $ 15,922,0 $ 301 Accounts receivable 111 0 - Investments 91,559 4,792,501 Total assets $ 16,013,744 4,792,802 LIABILITIES Accounts payable $ 556,641 - Benefits payable - 1,102,210 Due to other governments 5,824,473 - Other deposits held in escrow 9,632,630 - Total liabilities $ 16,013,744 1,102,210 NET ASSETS Assets held in trust for other postemployment benefits 3,690,592 Total net assets $ 3,690,592 in notes are an integral art of the financial statements. The accompanying gr p 38 Indian River County,Florida Statement of Changes in Fiduciary Net Assets Other Postemployment Benefits Trust Fund For the Year Ended September 30,2009 r ADDITIONS Employer contributions $ 2,789,109 Investment income 388,826 Total additions 3,177,935 DEDUCTIONS Benefits paid to participants 1,102,210 Total deductions 1,102,210 Change in net assets 2,075,725 Net assets-beginning 1,614,867 Net assets -ending $ 3,690,592 r The accompanying notes are an integral part of the financial statements. 39 1 Q � Indian River County,Florida a Notes To Financial Statements Year Ended September 30,2009 Note Page Note page 1. Summary of Significant Accounting Policies..................................................42-52 12. Long-term Liabilities............................70-85 Reporting Entity.................................42-43 Business-type Activities....................70-75 Measurement Focus and Recreational Revenue Refunding Basis of Accounting.....................43-46 Bonds, Series 2003......................70-71 Basis of Presentation..........................47-48 Water and Sewer Revenue Assets, Liabilities and Net Assets Bonds, Series 1993A...................71-72 or Equity.......................................48-52 Water and Sewer Revenue Refunding Cash and Cash Equivalents.............48 Bonds, Series 2005......................72-73 Investments.....................................49 Water and Sewer Revenue Refunding Allowance for Doubtful Accounts..49 Bonds, Series 2009......................73-74 Receivables and Payables...............49 Annual Debt Service Payments— Inventories.................................. 49 Business-type Activities 75 .. .............. Prepaid Items ..................................49 Governmental Activities....................75-80 Restricted Assets.............................50 Limited General Obligation Bonds 75-76 Capital Assets..................................50-51 General Obligation Bonds..............76-77 Capitalization of Interest.................51 Spring Training Facility Revenue Unearned Revenues ........................51 Bonds...........................................77-79 Accrued Compensated Absences....51 Annual Debt Service Payments— Obligation for Bond Arbitrage Governmental Activities..............80 Rebate ..........................................52 Housing Authority Revenue Bonds......81-83 Landfill Closure Costs....................52 Annual Debt Service Payments— Unamortized Bond Costs................52 Housing Authority.......... ......83 Unamortized Bond Discounts Summary of Defeased Debt and Premiums...............................52 Outstanding Capital Contributions......................52 Compensated Absences........................83 New Accounting Pronouncements..52 Changes in Long-term Liabilities.........84 2. Reconciliation of Government-wide Conduit Debt Obligations.....................85 and Fund Financial Statements..........53-56 13. Provision for Closure Costs..................85-86 3. Stewardship, Compliance and 14. Pollution Remediation..........................87 Accountability....................................57 15. Pension Plans........................................88-89 Budget and Budgetary Accounting.57 Florida Retirement System................88-89 4. Cash and Cash Equivalents...................58-62 16. Other Postemployment Benefits Plan...90-93 Deposits...........................................58 17. Operating Leases..................................93-94 Accrued Interest..............................58 18. Fund Equity..........................................94-95 Investments ................58-61 19. Fund Equity Deficit..............................96 OPEB Trust Investments.................61-62 20. Risk Management.................................96-97 5. Property Tax Revenues.........................62 21. Commitments and Contingencies.........98-99 6. Capital Assets........................................63-65 Litigation...........................................98 7. Restricted Cash and Cash Equivalents Contracts and Other and Investments .................................65 Commitments............... 98 ...... ..... 8. Payable from Restricted Assets ............66 Grants ................................................99 9. Interfund Balances................................67 Contingent Liability ..........................99 10. Interfund Transfers................................68 22. Subsequent Events................................99 11. Receivable and Payable Balances.........69-70 41 Indian River County,Florida Notes To Financial Statements Year Ended September 30, 2009 NOTE 1 —SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES Indian River County, Florida, (the "County ) is a political subdivision of the State pursuant to Article VIII, Section 1(a) of the Constitution of the State of Florida. Created on June 29, 1925 by an act of Legislature, separating it from St. Lucie County, the County encompasses approximately 497 square miles of land with an estimated population of 141,475. The County is governed by the Board of County Commissioners and five elected constitutional officers (Clerk of the Circuit Court, Property Appraiser, Sheriff, Supervisor of Elections, and Tax Collector) in accordance with state statutes and regulations. The constitutional officers maintain separate accounting records and budgets for the Board of County Commissioners. The Constitution of the State of Florida, Article VIII, Section 1(d) created the constitutional officers and Article VIII, Section 1(e), created the Board of County Commissioners. The financial statements of the County have been prepared in accordance with generally accepted accounting principles (GAAP) as applied to governmental units. The Governmental Accounting Standards Board (GASB) is the standard-setting body for governmental accounting and financial reporting. The Board applies all GASB pronouncements in the preparation of the financial statements of the enterprise funds as well as all FASB Statements and Interpretations, APB Opinions and Accounting Research Bulletins, issued after November 30, 1989, which do not conflict with or contradict GASB pronouncements. The GASB periodically updates its codification of the existing Governmental Accounting and Financial Reporting Standards which, along with subsequent GASB pronouncements (Statements and Interpretations), constitutes GAAP for governmental units. 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 County) and its component units. However, some component units, because of the closeness of their relationships with the County, should be blended as though they are part of the County. 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 County), (2) organizations for which the County is financially accountable, and(3) other organizations for which the nature and significance of their relationship with the County are such that exclusion would cause the reporting entity's financial statements to be misleading or incomplete. The County 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 County. The County may be financially accountable if an organization is fiscally dependent on the County 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, County management examined all organizations, which are legally separate, in order to determine which organizations, if any, should be included in the County's financial statements. Management determined that the Solid Waste Disposal District, the Emergency Services District, and the Indian River County Housing Authority were the only organizations that should be included in the County's financial statements as component units. 42 Indian River County,Florida Notes To Financial Statements Year Ended September 30, 2009 NOTE 1 —SUMMARY OF SIGNIFCANT ACCOUNTING POLICIES—Continued A. Reporting Entity—Continued 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 the EMS. Although legally separate, the EMS is appropriately blended as a governmental fund type (special revenue) component unit into the primary government. Discretely Presented Component Unit Indian River County Housing Authority (IRCHA) — Created pursuant to Chapter 421, Florida Statutes, the IRCHA, whose Board is appointed by the State of Florida, provides subsidized public housing in accordance with federal legislation. The County provides a subsidy for the operations of the IRCHA, maintains budgetary control over that subsidy, and provides use of certain furniture and equipment at no charge. Appropriations from the County totaled $143,070 and the related actual operating costs totaled $132,350 for the fiscal year. Since the IRCHA is fiscally dependent on the County, it has been reported in a separate column in the government-wide financial statements, as a discretely presented component unit,to emphasize that it is legally separate from the government. Separate financial statements for the Indian River County Housing Authority are available in the administrative office located at 1028 20"'Place,Vero Beach, Florida 32960. B. Measurement Focus and Basis of Accounting The basic financial statements of the County are composed of the following: • Government-wide financial statements • Fund financial statements Notes to the financial statements 43 Indian River County,Florida Notes To Financial Statements Year Ended September 30, 2009 NOTE 1 —SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES—Continued B. Measurement Focus and Basis of Accounting- Continued 1. Government-wide Financial Statements Government-wide financial statements display information about the reporting government as a whole, except for its fiduciary activities. These statements include separate columns for the governmental and business-type activities of the primary government (including its blended component units), as well as its discretely presented component unit. Governmental activities, which normally are supported by taxes and intergovernmental revenues, are reported separately from business-type activities, which rely, to a significant extent, on fees and charges for support. Likewise, the primary government is reported separately from the legally separate component unit for which the primary government is financially accountable. Government-wide financial statements are reported using the economic resources measurement focus and the accrual basis of accounting, as are the proprietary fund financial statements. Under the accrual basis of accounting, revenues, expenses, gains, losses, assets, and liabilities resulting from exchange and exchange-like transactions are recognized when the exchange takes place. Revenues, expenses, gains, losses, assets, and liabilities resulting from nonexchange transactions are recognized in accordance with the requirements of GASB Statement 33 — Accounting and Financial Reporting for Nonexchange Transactions. Program revenues include charges for services, special assessments, and payments made by parties outside of the reporting government's citizenry if that money is restricted to a particular program. Program revenues are netted with program expenses in the statement of activities to present the net expense of each program. Amounts paid to acquire capital assets are capitalized as assets in the government-wide financial statements, rather than reported as expenditure. Issuance of long-term debt is recorded as a liability in the government-wide financial statements, rather than as an other financing source. Amounts paid to reduce long-term indebtedness of the reporting government are reported as a reduction of the related liability, rather than as expenditure. Asag eneral rule, the effect of interfund activity has been eliminated from the government-wide financial statements. The County chooses to eliminate the indirect costs between governmental activities to avoid a "doubling up" effect. However, interfund services provided and used, such as the sale of gas and diesel from Fleet Management to the government, are not eliminated in the statement of activities. 44 Indian River County,Florida Notes To Financial Statements Year Ended September 30,2009 NOTE 1 —SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES—Continued B. Measurement Focus and Basis of Accounting-Continued 2. Fund Financial Statements The underlying accounting system of the County is organized and operated on the basis of separate funds, each of which is considered to be a separate accounting entity. The operations of each fund are accounted for with a separate set of self-balancing accounts that comprise its assets, liabilities, fund equity, revenues and expenditures or expenses, as appropriate. Governmental resources are allocated to and accounted for in individual funds based upon the purposes for which they are to be spent and the means by which spending activities are controlled. Fund financial statements for the primary government's governmental, proprietary, and fiduciary funds are presented after the government-wide financial statements. These statements display information about major funds individually and nonmajor funds in the aggregate for governmental and enterprise funds. Governmental Funds Governmental fund financial statements are reported using the current financial resources measurement focus and the modified accrual basis of accounting. Revenues are recognized as soon as they are both measurable and available. Revenues are considered to be available when they are collected within the current period or soon enough thereafter to pay liabilities of the current period. For this purpose, the County considers revenues to be available if they are collected within 45 days of the end of the current fiscal period. Expenditures generally are recorded when a liability is incurred, as under accrual accounting. Franchise fees, sales taxes, gas taxes, operating and capital grants, and interest associated with the current fiscal period are all considered to be susceptible to accrual and so have been recognized as revenues of the current fiscal period. All other revenue items are considered to be measurable only when the County receives cash. Under the current financial resources measurement focus, only current assets and current liabilities are generally included on the balance sheet. The reported fund balance is considered to be a measure of "available spendable resources". Governmental funds operating statements present increases (revenues and other financing sources) and decreases (expenditures and other financing uses) in net current assets. Accordingly, they are said to present a summary of sources and uses of"available spendable resources" during a period. Non-current portions of special assessments due to governmental funds are reported on their balance sheets in spite of their spending measurement focus. Non-current portions of notes receivable and advances to other funds are offset by fund balance reserve accounts. Because of their spending measurement focus, expenditure recognition for governmental fund types excludes amounts represented by noncurrent liabilities. Since they do not affect net current assets, such long-term amounts are not recognized as governmental fund type expenditures or fund liabilities. 45 j� k Indian River County,Florida Notes To Financial Statements Year Ended September 30, 2009 NOTE 1 - SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES—Continued and Basis of Accounting B. Measurement Focus S- Continued 2. Fund Financial Statements - Continued Governmental Funds—Continued capital assets are recorded as in the year that resources were ex Amounts expended to acquire p P expended, rather than as fund assets. The issuance of long-term debt is recorded as an other financing source rather than as a fund liability. However, debt service expenditures, as well as expenditures related to compensated absences and claims and judgments, are recorded only when payment is due. Proprietary Funds The County's enterprise funds and internal service funds are proprietary funds. In the fund financial statements, proprietary funds are presented using the accrual basis of accounting. Revenues are recognized when they are earned and expenses are recognized when the related goods or services are delivered. In the fund financial statements, proprietary funds are presented using the economic resources measurement focus. This means that all assets and all liabilities (whether current or noncurrent) associated with their activity are included on their balance sheets. Proprietary fund type operating statements present increases (revenues) and decreases (expenses) in total net assets. The Board applies all GASB pronouncements as well as all FASB Statements and Interpretations, APB Opinions and Accounting Research Bulletins, issued after November 30, 1989, which do not conflict with or contradict GASB pronouncements. Proprietary fund operating revenues result from exchange transactions associated with the principal activity of the fund. Exchange transactions are those in which each party receives and gives up essentially equal values. Non-operating revenues result from non-exchange transactions or ancillary activities. Operating expenses are costs incurred to provide services, whereas non-operating expenses are costs of debt financings, amortization of intangible assets and losses on the sale of assets. Amounts paid to acquire capital assets are capitalized as assets in the fund financial statements, rather than reported as expenditures. Issuance of long-term debt is recorded as a liability in the fund financial statements, rather than as an other financing source. Amounts paid to reduce long-term indebtedness are reported as a reduction of the related liabilities, rather than as an expense. Fiduciary Funds The fiduciary financial statements include financial information for the agency fund and the other postemployment benefit trust fund. The agency fund of the County primarily represents assets held by the County in a custodial capacity for other individuals or governments. The other postemployment benefits trust fund (Trust) accounts for activities of the Trust, which accumulates resources for health insurance benefit payments for current retirees and for current employees upon their retirement. The agency and Trust fund statements are presented using the accrual basis of accounting. 46 Y Indian River County,Florida Notes To Financial Statements Year Ended September 30, 2009 NOTE 1 -SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES—Continued C. Basis of Presentation GASB Statement 34 sets forth minimum criteria (percentage of the assets, liabilities, revenues or expenditures/expenses of either fund category and the governmental and enterprise combined) for the determination of major funds. The County has used GASB 34 minimum criteria for major fund determination and has also electively disclosed funds that either had debt outstanding or specific community focus as major funds. The nonmajor funds are combined in a column in the fund financial statements and detailed in the combining section. 1. Governmental Major Funds: General Fund—The General Fund is the general operating fund of the County. It is used to account for all financial resources, except those required to be accounted for in another fund. Impact Fees Fund — The Impact Fees Fund accounts for the receipt of various impact fees. Funds are used for the construction of roads and bridges, correctional, public safety, library, park, public building, and solid waste facilities. Secondary Roads Construction Fund — The Secondary Roads Construction Fund accounts for the expenditures of road and bridge construction. Financing is provided by collections of the local option gas tax. Transportation Fund—The Transportation Fund accounts for expenditures incurred for the maintenance and repair of County roads. Financing is provided by the 5th and 6th cent gas taxes, county gas tax and transfers from the General Fund. Emergency Services District Fund — The Emergency Services District Fund accounts for the expenditures of providing fire protection and advanced life support to the entire County. Financing is provided by ad valorem taxes. Optional Sales Tax Fund — The Optional Sales Tax Fund accounts for revenues generated by the local option one-cent sales tax and some capital grants that use the local option one-cent sales tax as matching funds. Monies are used for various capital projects. 2. Proprietary Major Funds: Solid Waste Disposal District Fund — The Solid Waste Disposal District Fund accounts for the revenues, expenses, assets and liabilities associated with the County landfill. Golf Course Fund — The Golf Course Fund accounts for the revenues, expenses, assets and liabilities associated with the Golf Course. County Utilities Fund — The County Utilities Fund accounts for the revenues, expenses, assets and liabilities associated with the County water and sewer system. 47 Indian River County,Florida Notes To Financial Statements Year Ended September 30, 2009 NOTE 1 —SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES—Continued C. Basis of Presentation—Continued 2. Proprietary Major Funds—Continued County Building Fund — The County Building Fund accounts for revenues, expenses, assets and liabilities associated with the County building permit and inspection program. 3. Other Fund Types: Internal Service Funds — Internal Service Funds account for Fleet Management, Self Insurance and Geographic Information Systems services provided to other departments of the County on a cost reimbursement basis. Agency Fund - The Agency Fund is used to account for assets held in a custodial capacity by the County for other governmental units, other funds, individuals and businesses. Examples include payroll deductions, self insurance premiums, and developer escrow funds. Other Postemployment Benefits Trust Fund—The Other Postemployment Benefits Trust Fund accounts for activities of the Trust, which accumulates resources for health insurance benefit payments for current retirees and for current employees upon their retirement. Contributions are recorded when earned and benefit payments and refunds when incurred within each year. 4. Non-current Governmental Assets/Liabilities: GASB Statement 34 requires non-current governmental assets, such as land and buildings, and non- current governmental liabilities, such as general obligation bonds and capital leases, be reported in the governmental activities column in the government-wide statement of net assets. D. Assets,Liabilities, and Net Assets or Equity 1. Cash and Cash Equivalents Cash and cash equivalents include deposits and all highly liquid investments with maturities of ninety days or less when purchased. The County maintains a cash and investment pool that is available for use by all funds. Earnings from the pooled investments are allocated to the respective funds based on applicable cash participation by each fund. The investment pool is managed such that all participating funds have the ability to deposit and withdraw cash as if they were demand deposit accounts. Therefore, all balances representing participants' equity in the investment pools are classified as cash and cash equivalents for financial statement purposes. In addition, longer-term investments are held by several of the County's funds and are reported as restricted cash on these statements. Cash and cash equivalents of the constitutional officers are maintained in separate accounts, but have been combined with the Board's cash and cash equivalents for financial statement purposes. 48 sow Indian River County,Florida Notes To Financial Statements Year Ended September 30, 2009 NOTE 1 —SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES—Continued D. Assets,Liabilities, and Net Assets or Equity- Continued 2. Investments Investments consist of U.S. Treasury Securities, U.S. Government Agency Securities, money market funds, Florida PRIME Fund (formerly known as the Local Government Surplus Funds Trust Fund Investment (SBA) Fund A), Fund B Surplus Funds Trust Fund, and the Florida Local Government Investment Trust Fund. Investments are reported at fair value based upon the average price obtained from three brokers/dealers. The SBA and Trust values are based upon the fair market value per share of the underlying portfolio. Refer to Note 4-C, Investments, for further information on individual investments. 3. Allowance for Doubtful Accounts The County provides an allowance for water and sewer accounts receivables that may become uncollectible. At September 30, 2009, this allowance was $424,493. No other allowances for doubtful accounts are maintained since other accounts receivable are considered collectible as reported at September 30, 2009. 4. Receivables and Payables Activities between funds that are representative of lending/borrowing arrangements outstanding at the end of the fiscal year are referred to as "due to/from other funds". Any residual balances outstanding between the governmental activities and business-type activities are reported in the government-wide financial statements as "internal balances". All receivables are shown net of allowance for doubtful accounts. Receivables in excess of 120 days comprise the trade accounts receivable allowance for doubtful accounts. 5. Inventories Inventories are valued at cost, which approximates market, using the "first-in, first-out" method of accounting, with the exception of the Fleet Internal Service Fund's fuel inventory which is valued using the average cost method of accounting. Inventories of all funds are recorded as expenditures (expenses) when consumed rather than when purchased. 6. Prepaid Items Prepaid items in the governmental funds represent prepayments for services that will be used in future periods. The County's policy is to record the expenditure for the services when they are used rather than when the cash is disbursed. 49 Indian River County, Florida Notes To Financial Statements Year Ended September 30, 2009 NOTE 1 —SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES—Continued Net Assets or Equity D. Assets,Liabilities, and Ne Q h' - Continued 7. Restricted Assets Certain net assets of the County are classified as restricted assets on the statement of net assets because their use is limited either by law through constitutional provisions or enabling legislation; or by restrictions imposed externally by creditors, grantors, contributors, or laws or regulations of other governments. In a fund with both restricted and unrestricted assets, qualified expenses are considered to be paid first from restricted net assets and then from unrestricted net assets. Further information on the restrictions can be found in Note 18. 8. Capital Assets Capital assets, which include property, plant, equipment, infrastructure (e.g., roads, bridges, right-of- ways, water and sewer distribution systems, beach restoration, stormwater systems and similar items), and intangible assets (e.g. software, easements, and rights), are reported in the applicable governmental or business-type activities column in the government-wide financial statements. The County defines capital assets as assets with an initial, individual cost of$1,000 or more and an estimated useful life in excess of one year. Except for roads and bridges constructed prior to October 1, 1981, assets are recorded at historical cost. Roads and bridges constructed prior to October 1, 1981 are reported at estimated historical cost. Donated capital assets are recorded at estimated fair market value at the date of donations. The costs of normal maintenance and repairs that do not add to the value of the asset nor materially extend its useful life are not capitalized. Major outlays for capital assets and improvements are capitalized as projects are constructed. Interest incurred during the construction phase of capital assets of business-type activities is included as part of the capitalized value of the assets constructed. The Board holds legal title to the capital assets used in the operations of the Board, Clerk of the Circuit Court, Property Appraiser, Supervisor of Elections and Tax Collector, and is accountable for them under Florida Law. The Sheriff is accountable for and thus maintains capital asset records pertaining only to equipment used in his operations. These assets have been combined with the Board's governmental activities capital assets in the statement of net assets. J 50 Indian River County,Florida Notes To Financial Statements Year Ended September 30, 2009 NOTE 1 —SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES—Continued D. Assets,Liabilities, and Net Assets or Equity- Continued 8. Capital Assets- Continued Property,plant, equipment, intangible, and infrastructure assets of the primary government, as well as the component units, are depreciated using the straight-line method over the following estimated useful lives: Assets Year Building and improvements 25 -50 Machinery and equipment 3 - 10 Utility distribution system 25-50 Road and bridge infrastructure 20-50 Fiberoptics 20 Software 3-5 Beach preservation infrastructure 7 Stormwater infrastructure 30 9. Capitalization of Interest Interest costs related to bond issues are capitalized during the construction period. These costs are netted against applicable interest earnings on construction fund investments. During the current period, the County did not have'any capitalized interest. 10. Unearned Revenues In government-wide financial statements, unearned revenues are recognized as revenue in the fiscal year they are earned. In governmental fund financial statements (in accordance with the modified accrual basis of accounting), deferred revenues represent revenues, which are measurable but not available, or received and unearned. At September 30, 2009, the total amount of deferred revenues reported on the governmental funds balance sheet is $2,444,434; $1,296,158 is available, but unearned, and$1,148,276 is earned but not available. 11. Accrued Compensated Absences The County accrues accumulated unpaid vacation and sick leave when earned by the employee. The current portion is the amount estimated to be used in the following year. The non-current portion is the amount estimated to be used in subsequent fiscal years. Both the current and non-current estimated accrued compensated absences amounts for governmental funds are maintained separately and represent a reconciling item between the fund and government-wide presentations. 51 Indian River County,Florida r Notes To Financial Statements Year Ended September 30, 2009 NOTE 1—SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES—Continued D. Assets,Liabilities, and Net Assets or Equity - Continued 12. Obligation for Bond Arbitrage Rebate Pursuant to Section 148(f) of the U. S. Internal Revenue Code, the County must rebate to the United States Government the excess of interest earned from the investment of certain debt proceeds and pledged revenues over the yield rate of the applicable debt. The County use the "revenue reduction" approach in accounting for rebatable arbitrage. This approach treats excess earnings as a reduction of revenue. The County has no arbitrage liability outstanding as of September 30, 2009. 13. Landfill Closure Costs Under the terms of current state and federal regulations, the Solid Waste Disposal District (SWDD) is required to place a final cover on closed landfill areas, and to perform certain monitoring and maintenance functions for a period of up to thirty years after closure. The SWDD recognizes these costs of closure and post-closure maintenance over the active life of each landfill area, based on landfill capacity used during the period. Required obligations for closure and post-closure costs are recognized in the Solid Waste Disposal District Enterprise Fund. 14. Unamortized Bond Costs Bond issuance costs and legal fees associated with the issuance of Proprietary Fund revenue bonds are amortized over the life of the bonds using the straight-line method of accounting. 15. Unamortized Bond Discounts and Premiums Bond discounts and premiums associated with the issuance of Proprietary Fund revenue bonds are amortized according to the straight-line method over the remaining life of the bonds. For financial reporting,unamortized bond discounts and premiums are netted against the applicable long-term debt. 16. Capital Contributions The capital contributions accounted for in the proprietary fund types represent contributions from other funds, developers, state and federal grant programs, and impact fees charged to new customers for their anticipated burden on the existing system. The contributions amount is reported after non-operating revenues and expenses on the Statement of Revenues, Expenses, and Changes in Fund Net Assets in accordance with GASB Statement 33. Capital contributions for the governmental funds are reported on the Statement of Activities in accordance with GASB Statement 34 and represent contributions of capital assets from developers and state agencies. 17. New Accounting Pronouncements Effective October 1, 2008, the County implemented the provisions of GASB Statement No. 49 Accounting and Financial Reporting for Pollution Remediation Obligations and GASB Statement No. 51, Accounting and Financial Reporting for Intangible Assets. See Note 14 for further details on the County's pollution remediation obligation and Note 1D-8 for a description of intangible assets. 52 Indian River County,Florida Notes To Financial Statements Year Ended September 30, 2009 NOTE 2 -RECONCILIATION OF GOVERNMENT-WIDE AND FUND FINANCIAL STATEMENTS A. Explanation of Differences Between the Governmental Fund Balance Sheet and the Government-wide Statement of Net Assets "Total fund balances" of the County's governmental funds, $200,469,234, differs from "net assets" of governmental activities, $675,930,619, reported in the statement of net assets. This difference primarily results from the long-term economic focus of the statement of net assets versus the current financial resources focus of the governmental fund balance sheet. Capital related items When capital assets (property, plant, equipment, intangibles) that are to be used in governmental activities are purchased or constructed, the costs of those assets are reported as expenditures in governmental funds. However, the statement of net assets included those capital assets among the assets of the County as a whole. Cost of capital assets $ 704,278,227 Accumulated depreciation (180,997,652 Net Total $ 523.280.575 Long-term debt transactions Long-term liabilities applicable to the County's governmental activities are not due and payable in the current period and accordingly are not reported as fund liabilities. All liabilities (both current and long- term) are reported in the statement of net assets. Balances at September 30, 2009 were: Bonds Payable: General Obligation Bonds, Series 2001 $ (5,955,000) General Obligation Refunding Bonds, Series 2003 (1,210,000) Limited General Obligation Bonds, Series 2006 (41,045,000) Spring Training Facility Bonds, Series 2001 (12,895,000) Bond Premium Payable: Limited General Obligation Bonds, Series 2006 (1,095,387) Pollution remediation payable (2,343,300) Compensated absences (10,255,400) Total $ (74.799.087) Accrued interest Accrued liabilities in the statement of net assets differs from the amount reported in governmental funds due to accrued interest on General Obligation Refunding Bonds, Series 2003, General Obligation Bonds, Series 2001, and Limited General Obligation Bonds, Series 2006. (528M3) 53 Indian River County,Florida Notes To Financial Statements Year Ended September 30, 2009 NOTE 2 -RECONCILIATION OF GOVERNMENT-WIDE AND FUND FINANCIAL STATEMENTS - Continued A. Explanation of Differences Between the Governmental Fund Balance Sheet and the Government-wide Statement of Net Assets - Continued Unearned revenues Unearned revenues in the statement of net assets differ from the amount reported in governmental funds due to special assessment and FEMA receivables. Governmental fund financial statements report revenues,which are measurable but not available as unearned revenues. However, unearned revenues in governmental funds are susceptible to full accrual on government-wide financial statements. Unearned revenues reduced1$- ,3 22,710 Internal service funds Internal service funds are used by management to charge the costs of fleet management, insurance activities, and GIS services to individual funds. The assets and liabilities of the internal service funds are included in governmental activities in the statement of net assets because they primarily serve governmental activities of the County. Internal service funds $ 20.645.553 Accrued grant and state shared revenues Some grant and state shared revenues are not recognized in the current period because the resources are not available;therefore,these revenues are not reported in the fund. Accrued grant revenues 4 906 608 Accrued interest revenues rr Some interest revenues are not recognized in the current period because the resources are not available, therefore,these revenues are not reported in the fund. Accrued interest revenues Net OPEB Obligation The net OPEB obligation asset resulting from contributions in excess of the annual required contribution is not a financial resource;therefore, it is not reported in the fund. OPEB asset $ 103,880 Elimination of interfund receivables/payables Interfund receivables and payables in the amount of $686,724 between governmental funds must be eliminated for the statement of net assets. 54 Indian River County,Florida Notes To Financial Statements Year Ended September 30, 2009 NOTE 2 -RECONCILIATION OF GOVERNMENT-WIDE AND FUND FINANCIAL STATEMENTS - Continued B. Explanation of Differences Between Governmental Fund Operating Statements and the Statement of Activities The "net change in fund balances" for governmental funds, $977,041, differs from the "change in net assets" for governmental activities, $14,689,431 reported in the statement of activities. The differences arise primarily from the long-term economic focus of the statement of activities versus the current financial resources focus of the governmental funds. The effect of the differences is illustrated below. Capital related items When capital assets that are to be used in governmental activities are purchased or constructed, the resources expended for those assets are reported as expenditures in governmental funds. However, in the statement of activities, the costs of those assets are allocated over their estimated useful lives and reported as depreciation expense. As a result, fund balances decrease by the amount of financial resources expended, whereas net assets decrease by the amount of depreciation expense charged for the year. Capital outlay $ 35,470,998 Depreciation expense (20,415,341) Transfers to business-type activities (7,452,905) Capital contributions 5,708,460 Loss on assets (2,350,155) Difference $ 10.961.057 Long-term debt transactions Payments of bond principal and pollution remediation costs are reported as an expenditure in the governmental funds and, thus, have the effect of reducing fund balance because current fmancial resources have been used. However, the payments reduce the liabilities in the statement of net assets and do not result in an expense in the statement of activities. Bond principal payments made $ 5,120,000 Bond premium payments made 93,224 Pollution remediation payments made 157,348 Total S 5.370.572 Governmental funds report interest and OPEB expenditures based on when they are paid. The statement of activities reports interest expense as it is incurred. This is the net number of the previous year accrual and the current year accrual. Net accrued OPEB expense $ 9,786 Net accrued bond interest payable 41,956 Total S 51,742 55 Indian River County,Florida Notes To Financial Statements Year Ended September 30, 2009 NOTE 2 -RECONCILIATION OF GOVERNMENT-WIDE AND FUND FINANCIAL STATEMENTS- Continued B. Explanation of Differences Between Governmental Fund Operating Statements and the Statement of Activities-Continued Long-term debt transactions—Continued Some expenses reported in the statement of activities do not require the use of current financial resources;therefore, are not reported as expenditures in governmental funds. Net change in compensated absences $(2.874.0431 Special assessment revenues Revenues collected on special assessments are reported in the governmental funds. However, in the statement of activities,the assessment revenues are recognized when they are earned. Special assessment revenues $ (81,200) Internal service funds operating gain The assets and liabilities of the internal service funds are included in governmental activities in the statement of net assets because they primarily serve governmental activities of the County. The net costs of the internal service funds are reported with governmental activities. Internal service funds operating gain73 Accrued Grant revenues Some grant revenues are not recognized in the current period because the resources are not available; therefore,these revenues are not reported in the fund. This number is a net number of prior year accrual and current year accrual. Net accrued grant revenues $ (3,137.3M Accrued interest revenues Some interest revenues are not recognized in the current period because the resources are not available; therefore,these revenues are not reported in the fund. This number is a net number of prior year accrual and current year accrual. Net accrued interest revenues 57 Reclassification and Eliminations The general fund recognizes revenues in the amount of $2,728,095 for the general administrative charges to the general government, public safety, transportation, culture/recreation, and court related functions. These revenues and expenditures must be eliminated to avoid double counting. Transfers in and transfers out in the amount of$14,366,145 between governmental activities should be eliminated. Capital projects costs in the amount of $10,435,212 must be distributed to the related expenditure functions. 56 Y3 Indian River County,Florida Notes To Financial Statements Year Ended September 30,2009 NOTE 3- STEWARDSHIP, COMPLIANCE,AND ACCOUNTABILITY Budgets and Budgetary Accounting The County uses the following procedures in establishing the budgetary data reflected in the financial statements: (1) The constitutional officers submit, at various times, to the Board and to certain divisions within the Department of Revenue, State of Florida, a proposed operating budget for the fiscal year commencing the following October 1. The operating budget includes proposed expenditures and the means of financing them, as set forth in Chapter 129 of the Florida Statutes. (2) The Department of Revenue, State of Florida, has the final authority on the operating budgets for the Tax Collector and the Property Appraiser included in the General Fund. (3) Constitutional officers, all departments controlled by the Board, and outside state and local agencies submit their proposed budgets to the Office of Management and Budget for assistance, review and compilation. The County Administrator then reviews all County departments, state agencies and nonprofit organization's budgets and makes his budget recommendation to the Board. (4) On or before July 15 of each year, the County Administrator and the Director of the Office of Management and Budget, as the Board's designated budget officer, submit to the Board a tentative budget for the ensuing fiscal year. The tentative budget includes proposed expenditures and the means of financing them. The Board then holds workshops to review the tentative budget by fund on a departmental level. (5) During September, public hearings are held pursuant to Section 200.065 of the Florida Statutes in order for the Board to receive public input on the tentative budget. At the end of the last public hearing, the Board enacts ordinances to legally adopt the budgets at the fund level for all but two governmental and proprietary fund types. The budgets legally adopted by the Board set forth the anticipated revenues by source and the appropriations by function. (6) Formal budgetary integration on an object level is used as a management control device for the governmental and proprietary funds of the County. Management is authorized to transfer budgeted amounts between objects and departments in any fund as long as management does not exceed the total appropriations of a fund. Board approval to amend the budget is only required when unanticipated revenues are received that management wishes to have appropriated, thereby increasing the total appropriations of a fund. (7) Budgets for the governmental and proprietary fund types are adopted on a basis consistent with generally accepted accounting principles. (8) Appropriations for the County lapse at the close of the fiscal year. L 57 Indian River County, Florida Notes To Financial Statements Year Ended September 30, 2009 NOTE 4 -CASH AND CASH EQUIVALENTS The County maintains a cash an d investment pool that is available for use by all funds except those whose cash and investments must be segregated due to bond covenants or other legal restrictions. A. Deposits At September 30, 2009, the carrying amount of the primary government's deposits was $29,648,177 and the bank balance was $34,575,522. The County's policy requires all deposits with financial institutions to be 100% insured by federal depository insurance or by collateral provided by qualified public depositories to the State Treasurer, in accordance with Chapter 280, Florida Statutes also known as the Florida Security for Public Deposit Act. The Act established a Trust Fund, maintained by the State Treasurer, which is a multiple financial institution pool with the ability to assess its member financial institutions for collateral shortfalls if a member fails. The carrying amount of the component unit's deposits totaled $690,033 and the bank balance was $693,298. B. Accrued Interest Interest earnings on U.S. Treasury Notes and government agency bonds are recorded in the cash and investment pools and then allocated to each fund based on each fund's average monthly balance. As of September 30, 2009, accrued interest for the County's portfolio totaled $1,261,921. The remaining accrued interest is reflected in utilities and road paving assessments. C. Investments On August 12, 2008, the County and the constitutional officers,with the exception of the Tax Collector, updated their investment policy pursuant to Section 218.415, Florida Statutes, which established permitted investments, asset allocation limits, issuer limits, credit ratings requirements and maturity limits to protect the County's cash and investments. The Tax Collector adopted his formal policy in February 2005. 58 EMANNONOW Indian River County,Florida Notes To Financial Statements Year Ended September 30, 2009 NOTE 4 - CASH AND CASH EQUIVALENTS-Continued C. Investments - Continued As of September 30, 2009, the County had the following investments: Weighted Average Fair Maturity Portfolio Credit Investment Type Value In Years Percentage Risks Fixed Rate Debt Investments: U.S. Treasuries $ 23,138,274 0.60 8.27 % N/A U.S. Agencies: Federal Farm Credit Bureau 50,438,748 2.09 18.03 AAA Federal Home Loan Bank 43,284,380 1.43 15.48 AAA Federal Home Loan Mortgage 50,894,943 1.94 18.20 AAA Federal National Mortgage Assoc. 50,627,237 1.89 18.10 AAA Other Fixed Rate Investments: Florida PRIME (Formerly Fund A) 77,772 .08 0.03 A-1+/A-1 Fund B Surplus Funds Trust Fund 654,820 5.0 0.23 Not Rated Florida Local Government Investment Trust Fund 10,427,975 .08 3.73 AA.Af and S-1* Other Market Rate Investments: Federated U.S. Treasury Fund 12,283,240 .08 4.39 AAAm SunTrust Bank NOW Account 10,010,597 .08 3.59 N/A Dreyfus Govt Cash Fund 3,491,013 .08 1.25 Aaa Morgan Stanley Govt Securities 3,010,354 .08 1.08 Aaa Florida Trust Day To Day Fund 15,919,571 .08 5.69 AAAm Fidelity Treasury Money Market 5,418,929 .08 1.93 Aaa Fidelity American U.S. Treasury Fund 3,064 .08 0.00 AAA Total Fair Value 279.680.917 100.0% Portfolio weighted average maturity 1.37 * AAAf credit quality, S-1 Market Volatility ** The weighted calculation considers the investments are carried until full maturity (i.e. call dates are not considered). 59 Indian River County,Florida Notes To Financial Statements Year Ended September 30, 2009 NOTE 4-CASH AND CASH EQUIVALENTS - Continued C. Investments - Continued The Local Government Surplus Funds Trust Fund(Fund A) is a money market fund classified as a"2a- 7 like fund" using the SEC investment requirements for 2a-7 funds. The fund was established by Florida Statute 218.405 and is administered by the Florida State Board of Administration. At September 30, 2009, the County had $1,192,422 invested in Fund B Surplus Funds Trust Fund, a fluctuating net asset value pool. The State Board of Administration (SBA) determined a negative fair market value adjustment of 45.08% of the portfolio balance, or $537,602, was needed to represent the fair market value of the participation. Consequently,the net investment in Fund E is reported at$654,820. The Florida Local Government Investment Trust Fund is a pool of various securities with maturities of less than five years. The fund was established by Florida Statute 163.01, is administered by the Florida Association of Court Clerks, and is marked to market daily. Upon the refunding of the Water and Sewer Bonds, Series 1993A, the County combined the required sinking fund reserve, $3,139,285, of the 1993A issue and the Series 2009 reserve of$2,241,625 for a total of$5,380,910. These funds were invested in the Fidelity Treasury Money Market Fund. Interest Rate Risk The County's investment policy limits interest rate risk by attempting to match investment maturities with known cash needs and anticipated cash flow requirements. All investments must have stated maturities of ten (10) years or less and no more than 25% of the portfolio shall be invested in instruments with stated final maturities greater than five (5) years. The portfolio shall have securities with varying maturity and at least 10% of the portfolio shall be invested in readily available funds. All constitutional officers with the exception of the Tax Collector follow this policy. The Tax Collector's policy is to limit maturities to 12 months or less and maintain 95% of the portfolio in readily available funds. Credit Risks Florida Statutes Section 218.415 and the County's investment policy limit investments to the following: 1. Direct obligations of the United States Treasury; 2. Florida PRIME (formerly known as Fund A) and Fund B Surplus Funds Trust Fund(Fund B); 3. Florida Local Government Investment Trust Fund; 4. Interest-bearing time deposits or savings in qualified public depositories as defined in Section 280.02 Florida Statutes; 5. Federal agencies and instrumentalities; 6. Securities of, or other interests in, any open-end or closed-end management-type investment company or investment trust registered under the Investment Company Act of 1940, 15 U.S.C. ss. 80a-1 et seq., as amended from time to time, provided that the portfolio of such investment company or investment trust is limited to obligations of the United States Government or any agency or instrumentality thereof and to repurchase agreements fully collateralized by such United States Government obligations, and provided that such investment company or investment trust takes delivery of such collateral either directly or through an authorized custodian; 60 Indian River County,Florida Notes To Financial Statements Year Ended September 30, 2009 NOTE 4 -CASH AND CASH EQUIVALENTS- Continued C. Investments - Continued Credit Risks- Continued 7. Securities and Exchange Commission registered money market funds with the highest credit quality rating from a nationally recognized rating agency; 8. Repurchase agreements with a term of one year or less collateralized by direct obligations of the United States Government which have maturities of three (3) years or less and a market value 103%or more of the repurchase amount. Currently, Fund B participants are permitted to withdraw scheduled amounts as assets become liquid. Full realization of the principal value of Fund B assets is uncertain and dependent upon the collateralized securities underlying each holding and is contingent upon future market conditions. Concentration Risk The County's investment policy has established asset allocation and issuer limits to reduce concentration of credit risk in the County's investment portfolio. All investments are stated at fair value. The County's investment policy does not allow for more than 20% of the entire portfolio to be invested in any one issuer, with the exception of United States Treasury Obligations and state authorized pools. No more than 10% of the portfolio may be placed in certificates of deposit(CD) and no more than $3 million of the portfolio may be placed in certificates of deposit with any one financial institution. No more than 5% of the portfolio may be placed in any one money market fund, mutual fund, or intergovernmental investment pool. The Tax Collector does allow 25% of the portfolio to be invested in CDs and/or money market funds. See investment list and percentages at the beginning of Note 4C. Custodial Credit Risk The County's investment policy pursuant to Section 218.415 (18), Florida Statutes requires securities to be registered and shall be held with a third party custodian and all securities purchased by, and all collateral obtained by, the County shall be held in the name of the County. The securities must be held in an account separate and apart from the assets of the financial institution. As of September 30, 2009, the County's investment portfolio in U.S. Treasuries, U.S. Agencies, and all money market funds, was held by The Bank of New York/Mellon with the exception of the following: Federated U.S. Treasury Fund (Federated), the SunTrust NOW account, and the Florida Trust Day to Day Fund. Federated was held by SunTrust Capital Markets and the Florida Trust Day to Day Fund was held by UMB Bank. D. OPEB Trust Investments Funds are held in the name of the Indian River County OPEB Trust (IRCOT), an irrevocable trust, by a third party custodian. The investment is reported at fair value. The County approved a separate investment policy for the IRCOT assets on February 3, 2009 (amended on May 12, 2009), and the funds will be reinvested in accordance with that policy. 61 Indian River County,Florida Notes To Financial Statements Year Ended September 30,2009 NOTE 4- CASH AND CASH EQUIVALENTS - Continued D. OPEB Trust Investments- Continued B Trust IRCOT had the following As of September 30, 2009, the Indian River County OPE ( ) g investments: Weighted Average Fair Maturity Portfolio Credit Investment Type Value In Years Percentayze Risks Short-Term Portion: Fidelity Treasury Money Market $ 1,102,201 0.16 23.00 % Aaa Long-Term Portion: Vanguard 500 Index 1,704,705 N/A 35.57 N/A Vanguard Mid Cap Index 211,165 N/A 4.41 N/A Vanguard Small Cap Index 107,858 N/A 2.25 N/A Vanguard Short Term Treasury 874,538 2.30 18.25 Aaa Vanguard Intermediate Treasury 586,606 6.30 12.24 Aaa Vanguard Federal Money Market 205,428 0.19 4.28 Aaa Total Fair Value S 4,792,501 100.0 % For further information on the OPEB Trust investments and related risks, see Note 16-F. NOTE 5 -PROPERTY TAX REVENUES Taxable values for all property are established as of January 1, which is the date of lien, for the fiscal year starting October 1. Property tax revenues recognized for the 2008-2009 fiscal year were levied in October 2008. All taxes are due and payable on November 1 or as soon as the assessment roll is certified and delivered to the Tax Collector. Discounts are allowed for early payment at the rate of 4% in November, 3% in December, 2% in January, and 1% in February. Taxes paid in March are without discount. All unpaid taxes become delinquent as of April 1. Virtually all unpaid taxes are collected via the sale of tax certificates on or prior to June 1; therefore, there were no material taxes receivable at fiscal year end. 62 Indian River County,Florida Notes To Financial Statements Year Ended September 30,2009 NOTE 6 -CAPITAL ASSETS Primary Government Beginning Ending Governmental activities: Balance Additions Deletions Balance Capital assets,not being depreciated: Land $ 137,845,855$ 3,579,096$ (3,157,070)$ 138,267,881 Construction in progress 80,748,995 26,699,897 (58,459,125) 48,989,767 Right-of-way 33,383,230 9,605,329 - 42,988,559 Intangibles - 339,508 - 339,508 Infrastructure 3,575,067 - - 3,575,067 Total capital assets,not being depreciated 255,553,147 40,223,830 (61,616,195) 234,160,782 Capital assets,being depreciated: Buildings and improvements 166,615,675 10,429,351 (343,369) 176,701,657 Equipment 58,756,212 4,407,891 (7,826,853) 55,337,250 Intangibles 2,019,380 433,578 - 2,452,958 Infrastructure 193,316,044 43,263,889 - 236,579,933 Total capital assets,being depreciated 420,707,311 58,534,709 (8,170,222) 471,071,798 Less accumulated depreciation for: Buildings and improvements (24,450,637) (4,669,012) 343,369 (28,776,280) Equipment (27,070,722) (5,354,922) 2,165,520 (30,260,124) Intangibles (51,621) (385,049) - (436,670) Infrastructure (111,732,692) (10,116,579) - (121,849,271) Total accumulated depreciation (163,305,672) (20,525,562) 2,508,889 (181,322,345) fi Total capital assets,being depreciated,net 257,401,639 38,009,147 (5,661,333) 289,749,453 Governmental activities capital assets,net $ 512,954,786$ 78,232,977$ (67,277,528)$ 523,910,235 63 County,Florida Indian River ty, Notes To Financial Statements Year Ended September 30, 2009 NOTE 6-CAPITAL ASSETS—Continued includes amortization expense on intangible assets, was charged to the +r Depreciation expense, which P functions/programs of the primary government's governmental activities as follows: Generalg overnment $ 3,951,045 Public safety 2,891,147 Physical environment 219,898 Transportation 7,958,601 Economic environment 4,488 Human service 150,267 Culture/recreation 5,038,944 Court related 200,951 Capital assets held by the government's internal service funds are charged to the various functions based on their usage of the assets 110,221 Total depreciation expense—governmental activities $ 20,525,562 r Primary Government Beginning Ending Business-type activities: Balance Additions Deletions Balance Capital assets,not being depreciated: Land $ 18,368,128$ 909,797$ -$ 19,277,925 Intangibles - 494,035 - 494,035 Construction in progress 54,499,419 17,699,524 (33,218,416) 38,980,527 Total capital assets,not being depreciated 72,867,547 19,103,356 (33,218,416) 58,752,487 Capital assets,being depreciated: Buildings,distribution systems,&improvements 328,266,442 44,951,067 (2,323,555) 370,893,954 Intangibles 382,382 - - 382,382 Equipment 19,855,840 433,700 (3232517) 19,966,023 Total capital assets,being depreciated 348,504,664 45,384,767 (2,647,072) 391,242,359 Less accumulated depreciation for: Buildings,distribution systems,&improvements (139,811,300) (13,672,375) 2,150,735 (151,332,940) Intangibles (245,191) (80,751) - (325,942) Equipment (13,794,962) (1,813,094) 321,530 (15,286,526) Total accumulated depreciation (153,851,453) (15,566,220) 2,472,265 (166,945,408) Total capital assets,being depreciated,net 194,653,211 29,818,547 (174,807) 224,296,951 Business-type activities capital assets,net $ 267,520,758$ 48,921,903:$ (33,393,223)$ 283,049,438 64 Indian River County,Florida Notes To Financial Statements Year Ended September 30, 2009 NOTE 6 - CAPITAL ASSETS—Continued Depreciation expense, which includes amortization expense on intangible assets, was charged to the functions/programs of the primary government's business-type activities as follows: Solid Waste Disposal District $ 873,852 Golf Course 166,602 County Building 88,095 County Utilities 14,437,671 Total depreciation expense—business-type activities 15.566,220 NOTE 7-RESTRICTED CASH AND CASH EQUIVALENTS AND INVESTMENTS Various bond covenants, resolutions, and state regulations require that the County restrict cash and cash equivalents and investments within the business-type activities. Restricted cash and cash equivalents and investments are as follows: Component Primary Government Unit Solid Waste Disposal Golf County Housing District Course Utilities Total Authority Sinking funds $ - $ 471,264 $ 6,138,439 $ 6,609,703 $ 100,784 Renewal and replacement 3,347,112 - 39485,928 6,833,040 524,280 Customer deposits 164,166 - 2,572,052 2,736,218 16,192 Capital construction - - 20,021,745 20,021,745 - Closure and maintenance costs 10,427,975 - - 10,427,975 - Tax escrow - - - - 24,000 Total $ 13,939,253 $ 471,264 $ 32,218,164 $ 46,628,681 $ 665,256 Cash totaling $14,983,222 is reported as restricted on the Statement of Net Assets for governmental activities. Of that amount, $6,983,222 is restricted for current liabilities such as retainage payable, accrued interest payable, and the current year portion of bonds payable. The remaining $8,000,000 is restricted for future payments to a local aircraft manufacturer as part of an incentive agreement to retain the company in Vero Beach. 65 Indian River County,Florida Notes To Financial Statements Year Ended September 30, 2009 NOTE 8-PAYABLE FROM RESTRICTED ASSETS ty business-type's business- a activities restricted assets are as follows: Liabilities payable from the Coun Component Primary Government Unit Solid Waste Disposal Golf County Housing District Course Utilities Total Authority Accounts payable $ - $ - $ 1,799,914 $ 1,799,914 $ - Retainage payable - - 915,917 915,917 - Accrued interest payable - 11,264 214,527 225,791 30,284 Bonds payable(current) - 510,000 2,870,000 3,380,000 131,000 Closure and maintenance costs payable 10,427,975 - - 10,427,975 - Customer deposits 164,166 - 2,572,052 2,736,218 16,192 Total $ 10,592,141 $ 521,264 $ 8,372,410 $ 19,485,815 $ 177,476 66 Indian River County,Florida Notes To Financial Statements Year Ended September 30, 2009 NOTE 9 -INTERFUND BALANCES Interfund balances at September 30,2009, consisted of the following: Due to General Fund from: Nonmajor Governmental Funds: Metropolitan Planning Organization Fund $ 53,000 Community Development Block Grant Fund 6,000 Federal/State Grants Fund 4,000 Disaster Recovery Grants Fund 55,434 Total $ 118,434 Amounts due from the above funds represent short-term cash loans that will be repaid within the next twelve months. Due from General Fund to: Major Governmental Fund: Emergency Services District Fund $ 362,227 Due from General Fund to: Major Enterprise Fund: Solid Waste Disposal District Fund $ 98,215 Due from General Fund to: Nonmajor Governmental Funds: Street Lighting Districts Fund $ 2,467 Vero Lakes Estates Fund 1,236 East Gifford Stormwater Fund 18 Land Acquisition Bonds Fund 104,127 Total $ 107,848 Amounts due from the General Fund represent excess fees and payments of the constitutional officers p remitted to various funds subsequent to September 30, 2009. Interfund advances at September 30,2009, consisted of the following: Due to Secondary Roads Construction Fund from: Golf Course Fund $ 682,000 This amount is considered a long-term advance expected to be paid over the course of several years. A reservation of fund balance has been established for this amount. 67 Indian River County,Florida Notes To Financial Statements Year Ended September 30, 2009 NOTE 10-INTERFUND TRANSFERS ed September 30 2009 Interfund transfers for the year end p , consisted of the following: Transfers to General Fund from: Emergency Services District Fund $ 459,286 Nonmajor Governmental Funds 735,240 Subtotal 1,194,526 Transfers to Transportation Fund from: General Fund 10,923,180 Transfers to Internal Service Fund from: General Fund 56,412 Transfers to Nonmajor Governmental Funds from: Optional Sales Tax Fund 2,000,000 General Fund 178,027 All other transfers 14,000 Subtotal 2,192,027 Total Transfers $ 14,366,145 Transfers are used for the following purposes: 1) use unrestricted general fund revenues to finance transportation activities which must be accounted for in a special revenue fund, 2) use unrestricted general fund and optional sales tax revenues for beach restoration activities which must be accounted for in another fund, 3)provide matching funds for grants, 4) move revenues from the fund that state law requires to collect them to the fund that state law requires to expend them, 5) use unrestricted general fund revenue for electric payments of a street lighting district, 6) transfer excess interest earnings from a nonmajor capital projects fund to the general fund, and 7) use unrestricted general fund revenues to offset a portion of the salaries and benefits expenses for an employee accounted for in an internal service fund. 68 Indian River County,Florida Notes To Financial Statements Year Ended September 30,2009 NOTE 11 -RECEIVABLE AND PAYABLE BALANCES Receivables Receivables at September 30,2009,were as follows: Due from Governmental Activities: Accounts Other Governments Total General $ 610,733 $ 1,485,614 $ 2,096,347 Impact Fees - 109,128 109,128 Secondary Roads Construction - 14,289,805 14,289,805 Transportation 409 225,613 226,022 Emergency Services 4,596 548,571 553,167 Optional Sales Tax - 27,107,142 27,107,142 Other governmental 1,176,067 1,150,832 2,326,899 Total Governmental Activities S 1.791.805 S 44.916.705 46.708.510 Business-Type Activities: Solid Waste $ 114,406 $ 879,126 $ 993,532 Golf Course - 11,700 11,700 Utilities 2,531,648 271 2,531,919 Total Business-Type Activities 2.646.054 $ 891,097 3,537.151 Due from other Governments On January 15, 2008,the Board entered into a locally funded agreement with the Florida Department of Transportation (FDOT) to advance the 6-laning of State Road 60 from 82nd Avenue to 66th Avenue (Segment One). The agreement originally obligated the Board to pay $34,669,601 to the FDOT. A subsequent amendment to the agreement reduced the cost to $23,833,362 which was then paid in three installments: $3,466,960 in February 2008, $13,867,840 in April 2008, and $6,498,562 in May 2008. Funding was from the following funds: $15,888,908 from the Secondary Roads Construction Fund and $7,944,454 from the Optional Sales Tax Fund. On November 18, 2008, the Board entered into another locally funded agreement with the Florida Department of Transportation (FDOT) to advance the 6-laving of State Road 60 from 82nd Avenue to I- 95 (Segment Two). The agreement obligated the Board to pay $14,429,754 to the FDOT. Payment was made in November 2008 to the FDOT. Funding was from the Optional Sales Tax Fund. Reimbursement b the FDOT for Segment One will be in eight quarterly installments over a two-year Y g g q Y Y period that began in July 2009. Reimbursement by the FDOT for Segment Two will be in ten quarterly installments over a three-year period beginning no sooner than July 2011. Repayments to the Board will include principal and any accumulated interest earnings that have not been used for supplemental costs of the project. 69 Indian River County, Florida Notes To Financial Statements Year Ended September 30,2009 NOTE 11 -RECEIVABLE AND PAYABLE BALANCES -Continued Payables Payables at September 30,2009,were as follows: Salaries and Total Governmental Activities: Vendors Benefits Retainage Payables General $ 2,241,189 $ 1,494,797 $ 260 $ 3,736,246 Impact Fees 806,041 - 321,788 1,127,829 Secondary Roads Construction 1,424,334 8,778 234,844 1,667,956 Transportation 454,052 239,236 12,572 705,860 Emergency Services 347,392 578,209 - 925,601 Optional Sales Tax 434,983 - 487,432 922,415 Other governmental 839,606 60,477 82,443 982,526 Total Governmental Activities 6,547.597 $2,3$ 49 $ 1,139,339 $10,068,433- Business-Type 10 068.433Business-Type Activities Payable from current assets: Solid Waste $ 1,687,531 $ 78,892 $ 387,686 $ 2,154,109 Golf Course 46,262 18,467 - 64,729 Utilities 932,933 231,713 - 1,164,646 Building 2,362 38,194 - 40,556 Payable from restricted assets: Utilities 1,799,914 - 915,917 2,715,831 Total Business-Type Activities $ 4.469,002 $ 367.266 1.303.603 6.139,871 The County has not engaged in any short-term debt activity during fiscal year 2009 other than that listed in Note 9. NOTE 12 -LONG-TERM LIABILITIES A. Primary Government Business-type Activities Recreational (Golf Course) Revenue Refunding Bonds, Series 2003 Purpose - On October 15, 2003, the Series es 2003 bonds were issued to e $6,735,000 of the County's outstanding Recreational Revenue Bonds, Series 1993. The Series 2003 bonds are being issued by the County to provide funds, together with $583,790, to retire all of the outstanding 1993 Series bonds and to pay for all bond issuance costs. The previous bonds were issued to build a County- owned golf course. Pledge of Revenue - The revenue bonds are secured by liens, for the remaining term of the bonds, in the following order: (1)the net revenues derived from the operations of the golf course, (2) one hundred percent of racetrack and Jai Alai Fronton funds, and(3) seven percent of the half-cent sales tax accruing annually to the County. 70 Indian River County,Florida Notes To Financial Statements Year Ended September 30, 2009 NOTE 12 - LONG-TERM LIABILITIES -Continued A. Primary Government- Continued Recreational (Golf Course)Revenue Refunding Bonds Series 2003 - Continued During the year, the financial strength of our municipal bond insurer, AMBAC, was downgraded to <. Baal. This downgrade required the County to fully cash fund the debt service reserve. The County elected to pledge the Racetrack and Jai Alai Fronton funds to meet this bond covenant. The total annual amount of the required debt service reserve is $417,500. The current principal and interest payments of $637,516 represent ninety percent of net revenues ($710,916) of the golf course. The total principal and interest remaining to be paid on the bonds is $4,244,280. All three pledged revenue sources totaled $1,647,449 for the current fiscal year. The County did not utilize the second and third revenue sources toward the current year principal and interest payments. The aggregate difference in debt service between the Series 1993 debt ($9,284,290) and Series 2003 debt ($8,060,911) is $1,223,379. The net economic gain was $348,450. Bonds Issued-At September 30, 2009,the revenue bonds consisted of the following: Outstanding at Interest Rates September 30, Description and Date Maturi1y Issue 2009 2003 Recreational Revenue 2.00—4.125% 9/1/16 $ 6,455,000 $ 3,685,000 Refunding Bonds 3/1 and 9/1 Less: Current Portion of bonds 510,000 Unamortized Bond Discount 32,015 Long-Term Portion of bonds $ 3.142.985 Optional Redemption - The revenue bonds, maturing on or after September 1, 2014, are subject to P P g P J redemption prior to maturity, at the option of the County on and after September 1, 2013, in whole or in part, at any time thereafter at the redemption price of par, plus interest accrued to the date of redemption. Water and Sewer Revenue Bonds, Series 1993A Purpose - The Series 1993 bonds were issued to defease all of the County's outstanding Water and Sewer Revenue and Refunding Bonds, Series 1986 and 1986A, Series 1989, Series 1991, and Special Assessment Revenue Bonds, Series 1989 and Series 1990, and to provide funds to make certain capital improvements to the utility system. Previously issued bond proceeds were utilized to expand facility and line capacity. Pledge of Revenues - The revenue bonds are collateralized, for the remaining term of the bonds, by a pledge of all net revenues derived from the operation of the system, and certain surcharges and special assessments. 71 Indian River County,Florida Notes To Financial Statements Year Ended September 30, 2009 NOTE 12 -LONG-TERM LIABILITIES- Continued A. Primary Government- Continued Water and Sewer Revenue Bonds Series 1993A- Continued Annual principal and interest payments of$2,389,363,not including$28,270,000 of refunded bonds, represent approximately twenty percent of net revenues ($12,018,220) of the utility system. The total principal and interest remaining to be paid on the bonds is $3,282,175. Bonds Issued—At September 30, 2009 the revenue bonds consisted of the following: Outstanding at Interest Rates Original September 30, Description and Date Maturily Issue 2009 Water and Sewer 2.60-6.50% Revenue Bonds, 3/1 and 9/1 2024 $ 47,190,000 $ 3,030,000 Series 1993A Less: Current Portion of bonds 1,475.000 Long-Term Portion of bonds $ 1.555.000 On September 11, 2009, $28,270,000 of the County's Series 1993A bonds were refunded and redeemed by the Water and Sewer Refunding Bonds, Series 2009.The following two years were not included in the refunding and will be paid on the dates listed below: Term Bonds due September 1, 2011 Date Principal Amount September 1,2010 $ 1,475,000 September 1, 2011 1,555,000 Water and Sewer Revenue Refunding Bonds, Series 2005 Purpose - The Series 2005 Bonds were issued to defease $31,680,000 of the County's outstanding Water and Sewer Revenue Bonds, Series 1996. These bonds were issued by the County to provide funds,together with $5,000,000, to retire 95 percent of the 1996 Series and to pay for all bond issuance costs. The September 1, 2005 and 2006 principal installments were not subject to early call and consequently paid at their respective maturity dates. The 1996 bonds were issued to acquire an existing water and sewer facility, as well as for capital improvements to the existing system. The aggregate difference in debt service between the Series 1996 ($40,585,193) and Series 2005 ($39,619,193) is $966,000. The net economic gain was $2,944,661, which included shortening the term of the bonds by four years and lowering average annual debt service by $242,000. 72 Indian River County,Florida Notes To Financial Statements Year Ended September 30, 2009 NOTE 12 -LONG-TERM LIABILITIES - Continued A. Primary Government- Continued Water and Sewer Revenue Refunding Bonds, Series 2005 - Continued Pledge of Revenues - The revenue bonds are collateralized, for the remaining term of the bonds, by a pledge of all net revenues derived from the operation of the system, certain surcharges, and special assessments. Annual principal and interest payments of$2,403,150 represent approximately twenty percent of net revenues ($12,018,220)of the utility system. The total principal and interest remaining to be paid on the bonds is $31,266,600. Bonds Issued-At September 30, 2009,the revenue bonds consisted of the following: Interest Outstanding at Rates and September 30, Description Date Maturity Issue 2009 Water and Sewer 3-5% Revenue Bonds, 3/1 and 9/1 2022 $ 27,675,000 $ 23,320,000 Series 2005 Less: Current Portion of bonds 1,395,000 Add: Unamortized Bond Premium 795,076 Long-Term Portion of bonds 22.720.076 Outstanding In-Substance Defeased Debt - The proceeds from the refunding have been invested in Federal Securities and were placed in an escrow account with J.P. Morgan. All of the defeased bonds ($31,680,000)were called on September 1, 2006 at 102%of the outstanding principal amount. Optional Redemption - The Series 2005 Bonds maturing after September 1, 2015, are subject to redemption by the County on or after September 1, 2015, in whole or in part, at par, plus accrued interest to date of redemption. Water and Sewer Revenue Refunding Bonds, Series 2009 Purpose - The Series 2009 bonds were issued to refund and redeem on September 11, 2009, $28,270,000 of the County's outstanding Water and Sewer Revenue Bonds, Series 1993A. The refunding excluded debt service payments due September 1, 2010 and 2011. See Water and Sewer Revenue Bonds, Series 1993A. The aggregate difference in debt service between the Series 1993A ($80,434,415) and Series 2009 ($78,755,772) is $1,678,643. The net economic gain was $1,368,427, which lowered average annual debt service by$126,000. Pledge of Revenues — The revenue bonds are collateralized, for the remaining term of the bonds, by a pledge of all net revenues derived from the operation of the system, certain surcharges, and special assessments. 73 '.3 Indian River County,Florida Notes To Financial Statements Year Ended September 30, 2009 NOTE 12 -LONG-TERM LIABILITIES - Continued A. Primary Government- Continued Water and Sewer Revenue Refunding Bonds Series 2009_- Continued There were no annual principal and interest payments in 2009. The total principal and interest remaining to be paid on the bonds is $38,572,110. Bonds Issued-At September 30, 2009,the revenue bonds consisted of the following: Outstanding at + Interest Rates September 30, Description and Date Maturity Issue 2009 Water and Sewer 4-5% Revenue Bonds, 3/1 and 9/1 2024 $ 26,370,000 $ 26,370,000 Series 2009 - Less: Current Portion of bonds Add: Unamortized Bond Premium 2,608.337 Long-Term Portion of bonds $ 28.978.337 Outstanding In-Substance Defeased Debt - The proceeds from the refunding were invested in federal securities and were placed in an escrow account with Bank of New York/Mellon. All of the defeased bonds ($28,270,000)were called on September 1, 2009 at 101%of the outstanding principal amount. Optional Redemption - The Series 2009 bonds maturing on or prior to September 1, 2019, are not subject to redemption prior to their respective dates of maturity. The Series 2009 Bonds stated to mature after September 1, 2019, are subject to redemption at the option of the County in whole or, from time to time, in part on September 1, 2019, at the redemption price of the principal amount to be redeemed,plus accrued interest to the date of redemption. 74 Indian River County,Florida Notes To Financial Statements Year Ended September 30, 2009 NOTE 12 -LONG-TERM LIABILITIES-Continued A. Primary Government- Continued Annual Debt Service Payments—Business-type Activities The annual debt service payments for bonds outstanding at September 30, 2009 are as follows: Fiscal Year Recreational Water and Sewer Water and Sewer Water and Sewer Ending Revenue Refunding Revenue Bonds Revenue Refunding Revenue Refunding September 30 Bonds Series 2003 Series 1993 Bonds Series 2005 Bonds Series 2009 Principal Interest Principal Interest Principal Interest Principal Interest 2010 $510,000 $135,164 $ 1,475,000 $166,650 $ 1,395,000 $ 1,012,650 $ - $1,331,610 2011 520,000 119,864 1,555,000 85,525 1,435,000 970,800 - 1,268,200 2012 535,000 102,964 - - 1,480,000 925,250 1,610,000 1,268,200 2013 555,000 83,169 - - 1,530,000 877,150 1,675,000 1,203,800 2014 580,000 62,356 - - 1,605,000 800,650 1,745,000 1,136,800 2015-2019 985,000 55,763 - - 9,215,000 2,805,250 10,025,000 4,381,250 2020-2024 - - - - 6,660,000 554,850 11,315,000 1,612,250 Total 3,685,000 559,280 3,030,000 252,175 23,320,000 7,946,600 26,370,000 12,202,110 Less: Current portion 510,000 - 1,475,000 - 1,395,000 - - - Unamortized bond discount 32,015 - - - - - - - Add: Unamortized bond premium - - - - 795,076 - 2,608,337 - Total $3,142,985 $559,820 $ 1,555,000 $252,175 $22,720,076 $7,946,600 $28,978,337 $12,202,110 Governmental Activities Limited General Obligation Bonds Purpose — On July 6, 2006, the County issued $48,600,000 of Limited General Obligation Bonds, Series 2006. The issuance of the Series 2006 bonds was approved by a majority of votes cast in a bond referendum held on November 2, 2004, by the qualified electors of the County. The referendum authorized a total of$50,000,000 aggregate principal amount of limited general obligation bonds. The proceeds of this issue will provide funds to acquire by purchase, interest in lands to protect water resources and/or drinking water sources, environmentally sensitive lands, historic sites, and/or agricultural lands together with the necessary restoration, remediation and reclamation activities to preserve and enhance such property and customary and necessary costs incurred in the acquisition. 75 Indian River County,Florida Notes To Financial Statements Year Ended September 30,2009 NOTE 12 -LONG-TERM LIABILITIES- Continued A. Primary Government- Continued Limited General Obligation Bonds -Continued Pledge of revenues — The principal and interest on the bonds are payable from ad valorem taxes not exceeding '/Z mil and having a maturity not exceeding fifteen years, which are levied by the County upon the taxable real and personal property of the County. Bonds Issued-At September 30, 2009,Limited General Obligation Bonds consisted of the following: Interest Outstanding at Rates and September 30, Description Date Maturity Issue 2009 Limited General Obligation 4.00%-5.00% Bonds, Series 2006 1/1 and 7/1 2021 $ 48,600,000 $ 41.045.000 Optional Redemption — The Limited General Obligation Bonds, Series 2006, maturing on or after July 1, 2017, are subject to redemption prior to maturity, at the option of the County on and after July 1, 2016, in whole or in part, at any time, on any date at a redemption price of 100% of the principal amount thereof,together with accrued interest thereon to the redemption date. General Oblation Bonds Purpose - On November 29, 2001, the County issued the additional $11,000,000 of General Obligation Bonds, Series 2001. The issuance of the Series 1995 bonds and the Series 2001 bonds were approved by a majority of votes cast in a bond referendum held on November 2, 1992, by the qualified electors of the County. The referendum authorized a total of $26,000,000 aggregate principal amount of general obligation bonds, in one or more series, of which the Series 1995 bonds are the first (in the amount of $15,000,000) and the Series 2001 bonds are the second. The proceeds of this issue will provide funds to acquire environmentally sensitive lands, together with the necessary restoration, remediation and reclamation activities to preserve and enhance such property. On July 1, 2003, the County issued $7,800,000 of General Obligation Refunding Bonds, Series 2003. The bonds were issued to provide funds, together with $600,000, to refund and redeem the entire outstanding principal amount of the County's $15,000,000 General Obligation Bonds, Series 1995. Proceeds of the bonds will also be used to pay the cost of issuance of the bonds, including the premiums for guaranty insurance. Pledge of Revenues - The principal and interest on the bonds are payable from ad valorem taxes levied by the County upon the taxable real and personal property of the County and are pledged for the remaining term of the bonds. 76 Indian River County,Florida Notes To Financial Statements Year Ended September 30, 2009 NOTE 12 -LONG-TERM LIABILITIES - Continued A. Primary Government- Continued General Obligation Bonds - Continued Bonds Issued-At September 30, 2009, General Obligation Bonds consisted of the following: Interest Outstanding at Rates and September 30, Description Date Maturity Issue 2009 General Obligation Bonds, 2.50%-4.30% r Series 2001 1/1 and 7/1 2016 11.000.0005 5 00 General Obligation Refunding 1.50%-3.00% Bonds, Series 2003 1/1 and 7/1 2010 7.800.000 $ 1,210 00 Optional Redemption - The General Obligation Bonds, Series 2001, maturing on or after July 1, 2013, are subject to redemption prior to maturity, at the option of the County on and after July 1, 2012, in whole or in part, at any time, on any date at par plus accrued interest and plus a premium ranging between 0% to 1% depending on the year of redemption. The General Obligation Refunding Bonds, Series 2003, are not subject to redemption prior to their maturities. Spring TrainingFacility Revenue Bonds ;} L Purpose - On August 15, 2001 the County issued $16,810,000 of Spring Training Facility Revenue Bonds, Series 2001. The Series 2001 bonds are being issued by the County to provide funds, together with other available funds, to (1) finance a portion of the cost of acquisition and expansion of a spring r training facility known as "Dodgertown"; (2) pay a premium for a municipal bond insurance policy and a debt service reserve account surety bond, and (3) pay certain costs and expenses incurred in connection with the issuance of the Series 2001 bonds. Pledge of Revenues - The principal and interest on the Series 2001 bonds will be payable from and secured by a first lien upon and pledge of the following, together with any investment income realized on any funds held under the Resolution, except the Cost of Issuance Account and the Rebate Fund: (1) Payments received by the County from the State of Florida pursuant to Section 212.20, Florida L Statutes; and (2) The Fourth Cent Tourist Development Tax levied by the County in Ordinance No. 2000-029, enacted pursuant to Section 125.0104(3)(1), Florida Statutes; and (3) Eighty-six percent (86%) of the Local Government Half-Cent Sales Tax distributed to the County, pursuant to Chapter 218, part VI, Florida Statutes. The foregoing are collectively referred to herein as the "pledged revenues". These revenue streams are pledged for the remaining term of the bonds. 77 Indian River County,Florida Notes To Financial Statements Year Ended September 30, 2009 NOTE 12 -LONG-TERM LIABILITIES - Continued ry A. Prima Government- Continued Spring TrainingFacility Revenue Bonds- Continued The Fourth Cent Tourist Development Tax and the Local Government Half-Cent Sales Tax pledged to the payment of debt service on the Series 2001 bonds are automatically released as a pledged revenue for the Series 2001 bonds immediately following the April 1, 2021 principal payment on the Series 2001 bonds. The current principal and interest payments of$1,224,633 represents fifteen percent of total pledged P P Pym revenues. All three revenue sources totaled $8,13 8,108 for the current fiscal year. The total principal and interest remaining to be paid on the bonds is $19,612,534. Bonds Issued - At September 30, 2009, Spring Training Facility Revenue Bonds consisted of the following: Interest Outstanding at Rates and September 30, Description Date Maturity Issue 2009 Spring Training Facility Revenue 3.30%-5.25% Bonds, Series 2001 4/1 and 10/1 2031 $ 16,810,000 $ 12.895.000 Optional Redemption - The Series 2001 bonds maturing on or after April 1, 2012, are subject to redemption at the option of the County in whole or in part, on April 1, 2011, or on any date thereafter at par plus accrued interest and plus a premium ranging between 0% to 1% depending on the year of the redemption. Mandatory Redemption - The Series 2001 Term Bonds are subject to mandatory redemption prior to maturity,by lot, at par plus accrued interest, according to the following schedule: Term Bonds due April 1, 2015 Date Principal Amount April 1, 2014 $ 685,000 April 1, 2015 725,000 Term Bonds due April 1, 2017 Date Principal Amount April 1, 2016 $ 760,000 April 1, 2017 795,000 78 Indian River County,Florida Notes To Financial Statements Year Ended September 30, 2009 NOTE 12 -LONG-TERM LIABILITIES -Continued A. Primary Government- Continued Spring TrainingFacility Revenue Bonds -Continued Term Bonds due April 1, 2021 Date Principal Amount April 1, 2018 $ 840,000 April 1, 2019 890,000 April 1, 2020 930,000 April 1, 2021 980,000 Term Bonds due April 1, 2027 Date Principal Amount April 1, 2022 $ 305,000 April 1, 2023 320,000 April 1, 2024 340,000 April 1, 2025 355,000 April 1, 2026 375,000 April 1, 2027 390,000 Term Bonds due April 1, 2031 Date Principal Amount April 1, 2028 $ 410,000 April 1, 2029 430,000 April 1, 2030 455,000 April 1, 2031 435,000 79 Indian River County,Florida Notes To Financial Statements Year Ended September 30, 2009 NOTE 12 -LONG-TERM LIABILITIES -Continued A. Primary Government- Continued Annual Debt Service Payments - Governmental Activities The annual debt service payments for bonds outstanding at September 30, 2009, are as follows: r LIlvIIIMCE ERAL GENMALCBLIGATION MsERAL SPRNGTRAD4NG FISCAL YEAR CBi C1AJM BCNU RERJ DMBQNES UucAnONBONDS FACMITYREVENLE ENDM SERIFS X06 SERIES 2003 SERIFS 2{D01 BCNU SERIES 2001 SEPT.30 nil*al Irtaest Princoal Dnmesrt Rinapal Interest Pritripal irdmmt 2010 $ 2,775,000 $ 1,838,663 $ 1210,000 $ 36,300 $ 745,000 $ 34Q572 $ 585,000 $ 012,232 2011 2,885,000 1,727,663 - - 780,000 213,008 605,000 618,833 2012 3,000,000 1,612,26=1 - - 810,000 183,368 630,000 593,423 2013 3,12,000 1,492,263 - - 845,000 151,778 655,000 566,333 2014 3255,000 1,367,463 - - 885,000 117,978 685,000 537,513 2015-2019 18,615,000 4,429,263 - - 1,890,000 12.2303 A010,000 2,108,225 22024 7,395,000 478,425 - - - - 2,875,000 1,058,975 2D25-2029 1,950,000 525,750 2030-2031 - - - - - - X0,000 66,250 Total 41,045,000 12,946,066 1,210,000 36,300 5x955,000 LCN007 12,895,000 6,717,534 I= Qmat pation 2,775,000 - 1,210,000 - 745,000 - 585,000 Uunntind bond discount - - - - - - - - Add: unmutmd bordpreznun 1,095,387 - - - - - - - Total $ 39,365,387 $ 12,946,001 $ - $ 36,300 $ 5;210,000 $ 1,029,007 $ 12310,000 $ 6,717,534 80 Indian River County,Florida Notes To Financial Statements Year Ended September 30, 2009 NOTE 12 - LONG-TERM LIABILITIES - Continued B. Discretely Presented Component Unit Housing Authorily Revenue Bonds On April 1, 1986, August 23, 1988, and July 16, 1991, the Housing Authority adopted resolutions authorizing the issuance of revenue bonds payable to the U.S. Department of Agriculture, Farmers Home Administration, for the purpose of financing a part of the cost of acquiring, erecting and constructing low-rent, multi-family housing facilities (Victory Park Apartments and Orangewood Park Apartments), including the repayment of certain notes payable to the State of Florida for the acquisition of land. Pledge of Revenues - The bonds and interest thereon are payable solely from the pledge of the gross revenues to be derived from Victory Park Apartments and Orangewood Park Apartments (Complexes). The current principal and interest payments of$90,994 for the three revenue bonds represent 21.38% of the pledged gross revenues of $425,427. The total principal and interest remaining to be paid on the three bonds is $2,783,960 and is secured by the gross revenues from the Complexes through September 1, 2013. On September 19, 2006, the Authority adopted resolution number 101-06 authorizing the issuance of two revenue bonds up to the amount of $1,925,000 payable to the United States Department of Agriculture, Rural Housing Service (RHS) to finance a part of the cost of improvements to the existing two Complexes. This financing was not secured until June 11, 2009 (through amended and supplemental resolution 101-09). The bond proceeds are held by United States Department of Agriculture-Rural Development (USDA-RD) and transferred as needed to a trustee (TD Bank) selected by RHS. All disbursements are approved by a representative of RHS as well the Authority's Executive Director. Pledge of Revenues - The bonds and interest thereon are payable solely from the pledge of the gross revenues to be derived from the Complexes. The current interest payments of$681 for the two revenue bonds represent 0.16% of the pledged gross revenues of $425,427. The total principal and interest remaining to be paid on the two bonds is $2,271,924 and is secured by the gross revenues from the Complexes through September 1, 2041. Due to the decrease in rental revenue from low occupancy at the Complexes, the Authority received approval from the USDA-RD to defer debt service payments pursuant to a work out plan, which is mentioned in Note 22—Subsequent Events. 81 Indian River County,Florida Notes To Financial Statements Year Ended September 30, 2009 NOTE 12-LONG-TERM LIABILITIES - Continued B. Discretely Presented Component Unit- Continued The revenue bond resolutions provide for the following: Due Original Revenue Balance Balance Within Bond Commitment 10/01/08 Additions Retirements 09/30/09 One Year Victory Park-Phase 1 $ 1,908,000 $ 744,000 $ - $ - $ 744,000 $ - 1986 Revenue Bond Victory Park-Phase II $ 1,908,000 808,000 - - 808,000 - 1988 Revenue Bond Orangewood Park $ 2,006,400 1,047,400 - - 1,047,400 131,000 1991 Revenue Bond Victory Park $ 1,100,000 - 197,652 - 197,652 - 2009A Revenue Bond Orangewood Park $ 825,000 - 638,727 - 638,727 - 2009B Revenue Bond Total Bonds Payable $ 2,599,400 $ 836,379 $ - $ 3,435,779 $ 131,000 Optional Redemption - Each revenue bond is redeemable at the option of the Housing Authority at par plus accrued interest and plus a premium ranging between 0% and 5% depending on the year of redemption and the holder of the bond at the time of redemption. The Housing Authority may redeem, in whole or in part, at any time, the principal portion of each revenue bond on any interest payment date, at the price of par plus accrued interest, without premium if the bond is held by the U.S. Department of Agriculture, Farmers Home Administration. 82 Indian River County,Florida Notes To Financial Statements Year Ended September 30,2009 NOTE 12 -LONG-TERM LIABILITIES- Continued B. Discretely Presented Component Unit-Continued Annual Debt Service Payments- Housing Authority The annual debt service payments for bonds outstanding at September 30, 2009, are as follows: Fiscal Year Ending September 30 Payment Amounts* 2010 $ 461,632 2011 291,364 2012 291,864 2013 291,334 2014 291,784 2015-2019 1,458,690 2020-2024 735,926 2025-2029 362,260 2030-2034 363,320 2035-2039 362,560 2040-2041 145,150 Total principal and interest payments 5,055,884 Less: amount representing interest (531,484) Total principal 4,524,400 Less: unobligated bond proceeds (1,088,621 Total obligated principal 3,435,779 Less: current principal portion (131,000) Total long term principal portion $ 3,304,779 *Annual amounts are stated at original commitment levels. C. Summary of Defeased Debt Outstanding The following outstanding revenue bonds are defeased. Since governmental obligations are held in escrow for the payment of principal and interest,the bonds are not liabilities of the County. Outstanding Retired Outstanding at During at September 30, Fiscal Year September 30, 2008 2009 2009 Capital Improvement Revenue Bonds: Series 1980 $ 1,070,000 3 0 0 -745000 D. Compensated Absences Governmental activities compensated absences are paid by the fund which normally pays the personnel services costs of the employee. 83 Indian River County,Florida rl Notes To Financial Statements Year Ended September 30, 2009 NOTE 12 -LONG-TERM LIABILITIES—Continued F. Changes in Long-term Liabilities Long-term liability activity for the year ended September 30,2009,was as follows: Due Beginning Ending Within Balance Additions Retirements Balance One Year Governmental Activities: Bonds payable: Limited General ObligationBonds- $ 43,715,000 $ - $ 2,670,000 $ 41,045,000 $ 2,775,000 Series 2006 General Obligation Bonds—Series 2001 6,675,000 - 720,000 5,955,000 745,000 Spring Training Facility Revenue Bonds- Series 2001 13,455,000 - 560,000 12,895,000 585,000 General Obligation Refunding Bonds- Series 2003 2,380,000 1,170,000 1,210,000 1,210,000 Subtotal 66,225,000 - 5,120,000 61,105,000 5,315,000 Add:Unamortized bonds premium 1,188,611 - 93,224 1,095,387 - Total bonds payable 67,413,611 5,213,224 62,200,387 5,315,000 Other liabilities: Pollution remediation 2,500,648 - 157,348 2,343,300 152,717 Claims payable 6,895,000 15,637,406 14,657,406 7,875,000 2,348,660 Compensated absences 7,435,797 9,365,004 6,504,662 10,296,139 3,192,740 Total other liabilities 16,831,445 25,002,410 21,319,416 20,514,439 5,694,117 Governmental activities long-term liabilities $ 84,245,056 $ 25,002,410 $ 26,532,640 $ 82,714,826 $ 11,009,117 Business-type Activities: Bonds payable: Recreational Refunding Revenue Bonds- Series 2003 $ 4,175,000 $ - $ 490,000 $ 3,685,000 $ 510,000 Water&Sewer Refunding Revenue Bonds- Series 1993A 32,695,000 - 29,665,000 3,030,000 1,475,000 Series 2005 24,670,000 - 1,350,000 23,320,000 1,395,000 Series 2009 - 26,370,000 - 26,370,000 - Subtotal 61,540,000 26,370,000 31,505,000 56,405,000 3,380,000 Add:Unamortized bonds premium 856,630 2,630,255 83,472 3,403,413 - Less:Unamortized bonds discount 973,194 - 941,179 32,015 - Total bonds payable 61,423,436 29,000,255 30,647,293 59,776,398 3,380,000 Other liabilities: Capital leases 28,126 - 28,126 - 'x Landfill closure and maintenance costs 11,831,988 423,055 1,827,068 10,427,975 1,795,542 Pollution remediation 85,425 - 41,425 44,000 9,760 Compensated absences 1,052,681 767,668 762,495 1,057,854 451,186 Total other liabilities 12,998,220 1,190,723 2,659,114 11,529,829 2,256,488 Business-type activities long-term liabilities $ 74,421,656 $ 30,190,978 $ 33,306,407 $ 71,306,227 $ 5,636,488 84 Indian River County,Florida Notes To Financial Statements Year Ended September 30, 2009 NOTE 12 -LONG-TERM LIABILITIES-Continued G. Conduit Debt Obligations In 1999, Indian River County issued Industrial Revenue Bonds which provide financial assistance to private-sector entities for the acquisition, construction and equipping of industrial and commercial facilities deemed to be in the public interest. These facilities include an educational facility. The bonds are secured by the property financed and are payable solely from payments received on the underlying mortgage loans. Upon repayment of the bonds, ownership of the acquired facilities transfers to the private-sector entity served by the bond issuance. Neither the County, the State, nor any political subdivision thereof is obligated in any manner for repayment of the bonds. Accordingly, the bonds are not reported as liabilities in the accompanying financial statements. See Subsequent Event Note 22 regarding a default of principal payments by St. Edward's School Inc. Original Principal Bond Issue Outstanding Year Bonds and Project Description $ 18,000,000 $ 14,800,000 1999 St. Edward's School,Inc.—Upper School educational facilities NOTE 13 -PROVISION FOR CLOSURE COSTS Current regulations of the U.S. Environmental Protection Agency (EPA) and the Florida Department of Environmental Protection (FDEP) require the Solid Waste Disposal District (SWDD) to place a final cover on closed landfill areas, and to maintain those areas for up to thirty years after closure. The SWDD annually obtains updated and revised estimates of total future closure and post-closure costs from its consulting engineers. The SWDD recognizes the expenses associated with the final closure and post-closure maintenance of the landfill areas over the active life of those areas. The provision for closure costs reported in the financial statements as operating expense represents the portion of these estimated future outlays which are allocable to the current year based on the amount of capacity used. The total unrecognized closure and post-closure costs are approximately $2.1 million. These costs will be recognized in future periods as the remaining capacity is filled. The County's policy is to fund 100% of the current year's allocation (based upon the consulting engineers' report) of both closure and post- closure care. 85 Indian River County,Florida Notes To Financial Statements Year Ended September 30, 2009 NOTE 13 -PROVISION FOR CLOSURE COSTS - Continued Required closure and post-closure obligations: Estimated Obligation Capacity E Used Closing Amount Closure Costs Class I-Segments I and H 83% 2013 $ 5,462,721 Construction and Demolition-Cell I 90% 2016 1,066,366 Post-closure Costs Class I-Segments I and H N/A N/A 3,734,400 Construction and Demolition-Cell I N/A N/A 164,488 Total account balance at 9/30/09: $ 10,427,975 All amounts recognized are based on what it would cost to perform all closure and post-closure functions in current dollars. Actual costs may be different due to inflation, deflation, changes in technology, or changes in laws and regulations. The SWDD is required by FDEP to annually show proof of ability to finance closure and post-closure costs. The SWDD is making annual deposits to a closure and post-closure cost escrow account to provide for the financing of future closure-related expenses. At September 30, 2009, $10,427,975 was on deposit at the Florida Local Government Investment Trust. A summary of changes in the landfill closure liability account is as follows: r g Balance Balance 10/01/08 Deposits Withdrawals 09/30/09 Closure and maintenance costs $ 11.831.988 423,0 $ 1.827.068 10.427.975 Of the $10,427,975 liability for closure and maintenance costs, management estimates that$1,795,542 will be due and payable within one year. 86 Indian River County,Florida Notes To Financial Statements Year Ended September 30, 2009 NOTE 14—POLLUTION REMEDIATION In accordance with GASB Statement 49, a consultant evaluated five sites to assess pollution remediation liabilities. The consultant calculated for each site an expected value (EV) estimate for pollution remediation based on three plausible mitigation scenarios. An obligating event occurred at each of the following five sites requiring the County (using the consultant's services) to attempt to accrue a liability for pollution remediation. The liability totaled $ 2,387,300 at September 30, 2009 for all five sites. The pollution remediation obligation is an estimate and subject to changes resulting from price increases and reductions,technology, and changes in applicable laws or regulations. There are no t estimated recoveries that would reduce the liability. Governmental Activities: 1) South Gifford Road closed landfill — The nature of the pollution remediation obligation is chlorinated solvent contamination. The consultant has conducted cleanup work and has coordinated with the Florida Department of Environmental Protection (FDEP). The amount of the estimated year end liability is $ 2,200,000. 2) Old Administration Building — The nature of the pollution remediation obligation is closed underground storage tank contamination. The consultant conducted groundwater sampling and coordinated with the FDEP. The amount of the estimated year end liability is $40,100. 3) Sheriff's Administration Building — The nature of the pollution remediation obligation is underground storage tank closure and closure reporting. The consultant will conduct the '# remediation work and coordinate with the FDEP. The amount of the estimated year end liability is$25,900. 4) Cattle dip site — The nature of the pollution remediation obligation is arsenic contamination. The consultant will conduct the remediation work and coordinate with the FDEP. The amount of the estimated year end liability is $ 77,300. Total Governmental activities liability: $ 2,343,300 Business-type Activities: 5) North County Reverse Osmosis plant — The nature of the pollution remediation obligation is groundwater inorganics contamination. The consultant will conduct the remediation work and coordinate with the FDEP. The amount of the estimated year end liability is$ 44,000. Please see Note 18-C for information regarding the restatement of beginning net assets for the governmental and business-type activities as it relates to the pollution remediation liabilities. The difference between the governmental activities restated beginning net assets of $2,500,648 and the liability of$2,343,300 was expensed in the governmental funds during the current year. The difference between the business-type activities restated beginning net assets of $85,425 and the liability of $44,000 was expensed in the Utilities fund during the current year. 87 Indian River County,Florida Notes To Financial Statements Year Ended September 30, 2009 NOTE 15-PENSION PLANS A. Florida Retirement System Plan Description: The County's employees participate in the Florida Retirement System (FRS), a cost- sharing multiple-employer public employee retirement system, administered by the Florida Department of Management Services. The FRS is noncontributory for all members; all contributions are made by the employer. Employees elect participation in either the defined benefit plan (Pension Plan) or the defined contribution plan (Investment Plan). The Pension Plan provides for vesting of benefits after six years of credible service. Normal retirement benefits are available to employees who retire at or after age 62 with six or more years of service or thirty years of service regardless of age. Early retirement is available after six years of service with a five percent reduction in benefits for each year prior to the normal retirement age. Retirement benefits are based on age, average compensation, and years-of- service credit where average compensation is computed as the average of an individual's five highest years of earnings. For those employees who elect participation in the Investment Plan rather than the Pension Plan, vesting occurs after one year of service and there is no "normal retirement age". These participants receive a defined contribution for self-direction in an investment product with a third party administrator selected by the State Board of Administration. In addition to the above benefits, the FRS administers a Deferred Retirement Option Program (DROP). This program allows eligible employees to defer receipt of monthly retirement benefit payments while continuing employment with a FRS employer for a period not to exceed five years after electing to participate. Deferred monthly benefits are held in the FRS Trust Fund and accrue interest. Florida Statutes Chapter 121, as may be amended from time to time by the state legislature, determines contribution rates for the various membership classes of the FRS. The FRS issues a publicly available financial report that includes financial statements, ten-year historical trend information and other required supplementary information. That report may be obtained by writing to the Florida Department of Management Services, Division of Retirement, Attention: Research, Education, & Policy Section, P.O. Box 9000, Tallahassee, Florida 32315-9000, or from the website at www.dms.myflorida.com. 88 Indian River County,Florida Notes To Financial Statements Year Ended September 30, 2009 NOTE 15 -PENSION PLANS - Continued A. Florida Retirement System- Continued Funding Policy: The FRS has six classes of membership with descriptions and contribution rates in effect during the period ended September 30, 2009, as follows (contribution rates are in agreement with the actuarially determined rates): 10/01/05 7/1/06 to 6/30/06 to 9/30/09 Regular Class - Members not qualifying for other classes. 7.83% 9.85% Senior Management Service Class- Members of senior management who do not elect the optional annuity management program. 10.45% 13.12% ecial Risk Class - Members employed as law enforcement officers, firefighters, or correctional officers and meet the criteria set to qualify for this class. 18.53% 20.92% Special Risk Administrative Support Class- Special risk members who are transferred or reassigned to non-special risk and meet the criteria. 9.92% 12.55% Elected Count Officer's Class - Certain elected county officials. 15.23% 16.53% Deferred Retirement Option Prop-ram- Members who are eligible for normal retirement that have elected to participate in the deferred retirement option program. 9.33% 10.91% Contributions to the FRS for the fiscal year ended September 30, 2009, were equal to 14.15% of the annual covered payroll. Contributions to the FRS for the fiscal years ended September 30, 2007, 2008, and 2009 were $10,679,753, $11,085,528, and $10,734,876 respectively, which are equal to 100% of the required contribution for each year. 89 Indian River County,Florida Notes To Financial Statements Year Ended September 30, 2009 NOTE 16—OTHER POSTEMPLOYMENT BENEFITS PLAN A. Plan Description The Indian River County OPEB Trust (IRCOT) was established by resolution on September 23, 2008 for the Board of County Commissioners and the five constitutional officers (Clerk of the Circuit Court, Property Appraiser, Sheriff, Supervisor of Elections, and Tax Collector). The Indian River County Board of County Commissioners acts as the OPEB Board of Trustees and delegates the administration of the IRCOT to an OPEB Trust Board. The OPEB Trust Board consists of the Clerk of the Circuit Court,Budget Director, Finance Director, County Administrator, and Human Resources Director. Resolution 2008-163 gave authority to establish the IRCOT as a single-employer defined benefit plan (OPEB Plan). The Trust's financial statements are reported using the accrual basis of accounting. The IRCOT trustees can amend the benefit provisions. The OPEB Plan subsidizes the cost of health care for employees hired prior to February 1, 2006 and their eligible dependents according to the provisions of the substantive plan (the plan as understood by the employer and the plan members). Employees hired on or after February 1, 2006 will not be eligible for any subsidy, regardless of years of service or Medicare eligibility. Life insurance is available to retirees at a flat rate per $1,000 of coverage. The premium rate is contingent upon age and date of retirement. Only the implicit rate subsidy applies to retiree life insurance coverage since retirees are responsible for the full premium of their life insurance policy. Retired employees are permitted to remain covered under the County's medical and life insurance plans as long as they pay a premium applicable to the coverage elected. This conforms to the minimum required of Florida governmental employers per Florida Statute 112.0801. The implicit rate subsidy also applies to health insurance coverage since the premiums charged are based upon a blending of younger, active employees and older, retired employees. Active participants as well as retirees are subject to the same benefits and rules. Health insurance premiums, effective October 1, 2008, range from $198 for Medicare participants to $765 for family coverage. The County subsidizes the cost of the premiums for each retiree based upon their years of service and employment date; a 2% discount for each year of service based upon the following table: Retirement Date Years of Service Under Age 65 Medicare Eligible Before 01/01/04 N/A No subsidy 60% subsidy 01/01/04- 10/01/04 Less than 15 years No subsidy 60% subsidy 01/01/04 - 10/01/04 15 or more years 21/o/yr-max 40% 20% in addition to yrs of service - max 60% subsidy 10/01/04 - 01/31/09 Less than 15 years No subsidy 20%subsidy 10/01/04—01/31/09 15 or more years 2%/yr-max 40% 20% in addition to yrs of service - max 60% subsidy 02/01/09 and after Less than 15 years No subsidy No subsidy 02/01/09 and after 15 or more years 2%/ -max 40% No subsid 90 Indian River County,Florida Notes To Financial Statements Year Ended September 30, 2009 NOTE 16—OTHER POSTEMPLOYMENT BENEFITS PLAN- Continued A. Plan Description- Continued The retiree has the option to continue with the County group health plan or elect the Medicare Advantage Plan. The subsidy will apply to either plan. At October 1, 2007, the date of the latest actuarial valuation,plan participation consisted of: Active participants 1,460 Retired participants 285 Total participants L7_45 There are two classes of participants at October 1, 2007: Regular and senior management 1,144 Special risk 601 Total participants 1.745 Financial statements for the Trust are included in this report and can be found on pages 38-39. A separate, stand-alone financial report is not issued by the County. B. Funding Policy The Board of County Commissioners, in concert with the OPEB Board of Trustees, has the authority to establish and amend the funding policy of the OPEB Plan. The OPEB Plan is advance funded by the County. For the year ended September 30, 2009, the County contributed $2.8 million to the qualifying OPEB Trust. Plan members receiving benefits contributed $0.9 million or approximately 44 percent of total premiums. It is the County's policy to base future IRCOT contributions on the annual required contribution(ARC) in subsequent annual actuarial reports. C. Annual OPEB Cost and Net OPEB Obligation The employer's contribution (i.e. annual cost or expense) to the County's OPEB Plan is based on the ARC calculation. The ARC is an amount actuarially determined in accordance with the parameters of GASB Statement No. 45. The ARC represents a level of funding that, if paid on an ongoing basis, is projected to cover the normal cost each year and amortize any unfunded actuarial liability over a period not to exceed 20 years. The following table shows the components of the County's annual OPEB Plan cost for the year, the amount actually contributed, and the changes in the net OPEB Plan obligation. FY 2008/2009 FY 2007/2008 Annual Required Contribution $ 2,810,092 $ 2,626,254 Interest on Net OPEB Obligation (6,587) - Adjustment to Annual Required Contribution 6,082 - Annual OPEB Cost(expense) 2,809,587 2,626,254 Contributions (2,819,373) (2,720,348) Change in Net OPEB obligation (9,786) (94,094) Net OPEB obligation—beginning of year (94,094) Net OPEB obligation—end of year $ (103,880) $ (94,094) Percentage of Annual OPEB Cost Contributed 100.35% 103.58% See page 100 for schedule of funding progress and schedule of employer contributions. 91 County,Florida Indian River Notes To Financial Statements Year Ended September 30, 2009 NOTE 16—OTHER POSTEMPLOYMENT BENEFITS PLAN- Continued Status and Funding D. Funded 5 g Progress The contribution made to the IRCOT for the current fiscal year was 100.4% of the annual OPEB cost. Information is available for the immediate preceding fiscal year and not applicable for fiscal year 2007. As of the October 1, 2007 actuarial valuation date, the OPEB Trust Plan was 0% funded, the actuarial accrued liability for benefits was $29.1 million, and the actuarial value of assets was $0, resulting in an unfunded actuarial accrued liability (UAAL) of$29.1 million. The covered payroll (annual payroll of active employees covered by the OPEB Trust) was $64.8 million, and the ratio of the UAAL to the covered payroll was 44.9%. Actuarial valuations of an ongoing plan involve estimates of the value of reported amounts and assumptions about the probability of occurrence of events into the future. Examples include assumptions about future employment, mortality, and the healthcare cost trend. Amounts determined regarding the funded status of the plan and the annual required contributions of the employer are subject to continual revision as actual results are compared with past expectations and new estimates are made about the future. The schedule of funding progress, presented as required supplementary information following the notes to the financial statements, presents information about whether the actuarial value of the plan assets is increasing or decreasing over time relative to the actuarial accrued liabilities for benefits. E. Actuarial Methods and Assumptions Projections of benefits for financial reporting purposes are based on the benefits provided under terms of the substantive plan (the plan as understood by the employer and the plan members) in effect at the time of each valuation and on the pattern of sharing of costs between the employer and plan members to that point. The projection of benefits for financial reporting purposes does not explicitly incorporate the potential effects of legal or contractual funding limitations on the pattern of cost sharing between the employer and plan members in the future. Actuarial calculations reflect a long-term perspective. Consistent with that perspective, actuarial methods and assumptions used include techniques that are designed to reduce the effects of short-term volatility in actuarial accrued liabilities and the actuarial value of assets. The actuarial methods are: Actuarial cost method Entry age normal cost method Amortization method Level percent of payroll projected to grow 4%per year Amortization period(closed) 19 years Asset valuation method Fully Funded The actuarial assumptions are: Investment rate of return 7% (net administrative expenses) Projected annual salaries increase 4.5-10.0% (dependent on years of service and age) Healthcare cost trend rate 10% (post-retirement benefit) Inflation rate Included in the Healthcare cost trend rate 92 Indian River County,Florida Notes To Financial Statements Year Ended September 30,2009 NOTE 16—OTHER POSTEMPLOYMENT BENEFITS PLAN- Continued F. OPEB Investments A separate investment policy was adopted by the Board of County Commissioners on May 12, 2009. The County adopted a broadly diversified portfolio composition consisting of equity, debt, and cash and cash equivalents. Asset allocations are divided between short term and long term investments. Short term asset allocations include cash and cash equivalents with maturities of 180 days or less. Long term asset allocations range from 0-60% for equities, 0-60% for fixed income securities, and 0-100% for cash and cash equivalents. The contribution of$2.8 million for ear ended September 30 2009 was invested in the various funds Y listed in Note 4D. These funds were held by our custodian, Bank of New York/Mellon, in the name of IRCOT. Investments are reported at fair market value. NOTE 17- OPERATING LEASES The County has entered into noncancelable operating leases, both as lessor and lessee. Lease terms vary from 2 to 49 years. Lease revenues totaled $533,425 and lease expenditures totaled $381,969 for the year ended September 30, 2009. The County also leases other equipment and office facilities as both - lessor and lessee on a month-to-month basis. A. Future Minimum Lease Receipts Year Amount 2010 $ 514,674 2011 516,641 2012 448,498 2013 426,886 2014 442,200 2015-2019 2,276,759 2020-2024 1,938,456 2025-2029 856,649 2030-2034 374,523 2035 200 Total future minimum lease receipts: $ 7.795.486 The property being leased is included in the statement of net assets governmental activities and business-type activities columns and has a cost of $25,211,968 and a carrying value of $18,750,797. Current year depreciation on property being leased was $578,653. 93 Indian River County,Florida Notes To Financial Statements Year Ended September 30, 2009 NOTE 17-OPERATING LEASES-Continued B. Future Minimum Lease Payments The following is a schedule of minimum future rentals to be paid by the County for various noncancelable operating leases of office space, park land, and office equipment as of September 30, 2009: Year Amount 2010 $ 310,529 2011 113,430 2012 72,491 2013 45,867 2014 23,364 2015-2019 115,220 2020-2024 115,220 2025-2029 81,104 2030-2034 1,500 2035-2039 1,500 2040-2044 1,500 2045-2048 1,200 Total future minimum lease payments: $ 882,925 NOTE 18 -FUND EQUITY A. Restricted Net Assets The County has established certain restrictions within the net assets section of the proprietary funds. Restricted net assets at September 30, 2009, consist of the following: Component Primary Government Unit Total Primary Housing Golf Course County Utilities Government Authodty Restricted for debt service and bond covenants $ 42,500 $ 239,167 $ 281,667 $ 124,784 Restricted for capital projects - 50,740,261 50,740,261 524,280 Total 42 0 $ 50,979,428 $ 51,021,928 64 064 B. Net Assets Restricted by Enabling Legislation The government-wide statement of net assets for the primary government and component unit reports $209,977,356 of restricted net assets, of which$68,563,413 is restricted by enabling legislation. 94 Indian River County,Florida Notes To Financial Statements Year Ended September 30, 2009 NOTE 18 -FUND EQUITY- Continued C. Restatement of Beginning Net Assets In accordance with the requirements of GASB Statement 49, Accounting and Financial Reporting for Pollution Remediation Obligations, beginning net assets for governmental and business type activities was restated. Based on the consultant's report and the costs paid during the fiscal year, the County Utilities Fund's portion of the estimated liability at October 1, 2008 was $85,425; therefore, beginning net assets was reduced by that amount. Based on the consultant's report and the costs paid during the fiscal year, the governmental funds' portion of the estimated liability at October 1, 2008 was $2,500,648; therefore, beginning net assets of the governmental activities was reduced by that amount. For more information on the County's pollution remediation obligation,please see Note 14. D. Reserved Fund Balances The County has established certain reserves within the fund equity section of the governmental funds. Reserved fund balances at September 30, 2009, consist of the following: General Fund: Reserved for Economic Incentives: Local Aircraft Manufacturer $ 8,000,000 Special Revenue Funds: Reserved for Capital Projects: Secondary Roads Construction Fund 14,217,224 Reserved for Advances to Other Funds: Secondary Roads Construction Fund 682,000 Total 14,899,224 Debt Service Funds: Reserved for Debt Service: Land Acquisition Bonds Fund 2,841,769 Spring Training Facility Revenue Bonds Fund 1,474,801 Total 4,316,570 Capital Projects Funds: Reserved for Capital Projects: Optional Sales Tax Fund 32,334,794 Dodgertown Capital Reserve Fund 1,701,452 Total 34,036,246 Total Reserved Fund Balances, Governmental Funds $61.252,040 95 Indian River County,Florida Notes To Financial Statements Year Ended September 30, 2009 NOTE 19-FUND EQUITY DEFICIT deficit in fund balance at 30, 2009:Se The following funds had a def p Fund Deficit Nonmajor Governmental Funds: Metropolitan Planning Organization Fund $ 69,300 Federal/State Grants Fund 8,825 Community Development Block Grant Fund 9,460 Disaster Recovery Grants Fund 55,565 Total Deficit $ 143,150 The deficits for these four funds will be eliminated by grant proceeds in fiscal year 2009. NOTE 20-RISK MANAGEMENT General Liability,Property,Worker's Compensation and Medical The County is exposed to various risks of loss related to torts, theft of, damage to and destruction of assets, errors or omissions, injuries to employees, and natural disasters. The County established a Self Insurance Fund (an internal service fund) to account for and finance its uninsured risk of loss. Under this program,the Self Insurance Fund provides coverage as follows: 10/01/04 to 04/01/08 to 10/01/08 to 03/31/08 09/30/08 09/30/09 Worker's Compensation $ 600,000 $ 300,000 $ 350,000 General Liability 200,000 250,000 250,000 Auto Liability 200,000 250,000 250,000 Property Damage 500-25,000 500-25,000 250,000 Error or Omissions 200,000 250,000 250,000 Annual Aggregate 1,000,000 1,000,000 2,000,000 Liquor Liability 1,000,000 1,000,000 1,000,000 The County purchases excess insurance to cover claims in excess of the amounts listed above. There is a 5% deductible per location for property damages arising due to a hurricane under the reinsurance policy. The County has not incurred any settlements in excess of the insurance coverage listed above in the past four fiscal years. All departments of the County participate in the program. Payments are made by various funds to the Self Insurance Fund based on past experience and actual estimates of the amounts needed to pay current year claims. 96 Indian River County,Florida Notes To Financial Statements Year Ended September 30, 2009 NOTE 20 -RISK MANAGEMENT- Continued General Liability,Property,Worker's Compensation and Medical- Continued The County is also self insured for medical claims covering employees and their eligible dependents. As required by Section 112.081, Florida Statutes, retirees and their eligible dependents are provided the same health care coverage as is offered to active employees; however, the retirees are responsible for payment of the premiums. Medical claims are paid from premiums contributed by employees, retirees and by the County. Premiums and contributions are determined by projected claims based on historical and actuarial experience. The self insurance plan assumes all risk for claims, other than worker's compensation, up to $250,000 per occurrence. For worker's compensation, the plan assumes all risk for claims up to $350,000 per occurrence. The County has purchased a reinsurance policy to cover claims in excess of these limits. There were no claims in excess of these limits for the 2007, 2008, and 2009 fiscal years. The claims liability of $7,875,000 reported at September 30, 2009, is based on the requirements of generally accepted governmental accounting standards, which require that a liability for claims be reported if information prior to the issuance of the financial statements indicates that it is probable that a liability has been incurred at the date of the financial statements, and the amount of the loss can be reasonably estimated. Estimates for claims incurred but not reported are actuarially determined and recorded. Based on the actuary's report, $2,348,660 will be liquidated over the next twelve months. Changes in the fund's claim liability amount during the current and prior three fiscal years are as follows: Balance at Claims Balance Fiscal Year and Changes Claim at Fiscal Beginning_ in Estimates Payments Year End 2005-2006 $ 5,330,000 $ 13,026,906 $ (12,490,906) $ 5,866,000 2006-2007 5,866,000 14,282,793 (13,589,793) 6,559,000 2007-2008 6,559,000 14,209,397 (13,873,397) 6,895,000 2008-2009 6,895,000 15,637,406 (14,657,406) 7,875,000 Included in the charges to other funds is an amount to fund future catastrophic losses not actuarially determined and at September 30, 2009, unreserved net assets of$17,937,488 have been designated for this purpose. The County has elected to accrue the larger of the discounted liability or undiscounted liability excluding non-incremental claims adjustment expenses. At September 30, 2009, the undiscounted liability was the greater of the two amounts. The discount rate used in the calculation was 2.5 percent. 97 r County,Florida Indian Rive ty, Notes To Financial Statements Year Ended September 30,2009 NOTE 21 - COMMITMENTS AND CONTINGENCIES A. Litigation Various suits and claims are currently pending against the County. It is impossible for the County to accurately quantify the exposure involved given the jury's latitude in assessing compensatory and punitive damages, and the court's latitude in awarding attorney's fees. The County intends to vigorously defend against these lawsuits and believes it has a good chance of prevailing on their merits. The County is contingently liable with respect to lawsuits and other claims incidental to the ordinary course of its operations. In the opinion of management and based on the advice of legal counsel, the ultimate disposition of lawsuits will not have a material adverse effect on the financial position of the County. B. Contracts and Other Commitments The County has various contracts and commitments outstanding at September 30, 2009. In the General Fund, contracts are for custodial services and external auditing services. In the Special Revenue Funds, contracts are for beach renourishment projects, renovation and construction of Fire/EMS stations, numerous environmental protection services, and a variety of road paving and drainage projects. In the Capital Projects Funds, contracts are for the parks maintenance complex, the Egret Marsh stormwater park, and several sidewalk and road improvement projects throughout the County. In the Enterprise Funds, contracts are for the North County Reverse Osmosis Plant expansion, the West Regional Wastewater Treatment Plant expansion, the vertical expansion and partial closure of the Class I landfill, State Road 60 utility conflict resolution and various other water and sewer projects. A summary of these projects at September 30, 2009, is as follows: Remaining Total Total Paid as of Balance at Contract Price September 30, 2009 September 30, 2009 General $ 7245705 $ (403,237) $ 321,468 Special Revenue 48,056,090 (27,4055108) 20,650,982 Capital Projects 115359,283 (6,328,716) 5,030,567 Enterprise 34,818,439 (28,775,450) 6,042,989 Total $ 94,958,517 $ (62,912,511) $ 32,046,006 98 Indian River e County,Florida Notes To Financial Statements Year Ended September 30, 2009 NOTE 21 - COMMITMENTS AND CONTINGENCIES- Continued C. Grants Amounts received or receivable from grantor agencies are subject to audit and adjustment by grantor agencies. If any expenditures are disallowed as a result of these audits, the claims for reimbursement to the grantor agency would become a liability of the County. In the opinion of management, any such adjustments would not be significant. D. Contingent Liability The Property Appraiser is currently negotiating a service contract relating to their software. These negotiations create a contingent liability that is expected to be resolved in the subsequent fiscal year. NOTE 22—SUBSEQUENT EVENTS Indian River County Housing Authority(Authodly) A. Bond proceeds from the USDA-RD for Orangewood Park renovations were 100% utilized by December 2009. Immediately thereafter, USDA-RD began funding a $675,000 grant also to be used for renovations. USDA-RD has also committed to funding another grant in the amount of $232,972 once the $675,000 funds have been spent. B. Bond proceeds from the USDA-RD for Victory Park apartments are currently being utilized for major renovations. USDA-RD has committed to a subsequent $900,000 grant to assist with these renovations; and upon full utilization of the $900,000 proceeds, committed to another grant in the amount of$300,000. C. On December 2, 2009, the Authority received approval by USDA-RD to rent to non-farm labor tenants. This waiver pertains to tenants at both complexes and is granted for a two year period. D. Both complexes received approval from USDA-RD for a workout plan on December 2, 2009. This was due to damages from the 2004 and 2005 hurricanes that left many units uninhabitable. This plan permitted interest and principal payments due September 1, 2009 for both complexes (and September 1, 2010 for Victory Park) to be deferred. Permission was also granted for these debt services payments to be made from the reserve cash account. Specifics pertaining to the approved work out plan can be found in the subsequent event note in the Authority's audited financial statements. E. Flood insurance, a bond covenant for Orangewood Park Apartments, was obtained on March 4, 2010. Only eighteen of the twenty-one buildings were identified in the flood plain. St. Edward's School Inc. - Conduit Debt On January 6, 2010 Indian River County was notified via registered mail that an Event of Default had occurred under the Credit Agreement for the St. Edward's School bonds. Due to this event, U.S. Bank National Association (the Trustee) was instructed by Wachovia Bank N.A. (the Credit Provider) to accelerate the St. Edward's School bonds. 99 Indian River County,Florida Required Supplementary Information For the Year Ended September 30,2009 Other Postemployment Benefits Plan Schedule of Fundine Proeress UAAL as a Actuarial Actuarial Accrued Percentage of Actuarial Value of Liability(AAL)- Unfunded AAL Covered Valuation Assets Entry Age (UAAL) Funded Ratio Covered Payroll Payroll Date (a) (b) (b-a) (a/b) (c) ((b-a)/c) 10/01/2007 $0 $ 29,098,337 $ 29,098,337 0.00% $ 64,847,001 44.87% As of September 30,2009,the actuarial valuation performed as of October 1,2007 is the only one that has been completed on the County's Other Postemployment Benefits Plan. Schedule of Employer Contributions Percentage of Annual Fiscal Year Annual Amount OPEB Cost Net OPEB Ending OPEB Cost Contributed Contributed Obligation 9/30/2008 $ 2,626,254 $ 2,720,348 103.58% $ (94,094) 9/30/2009 $ 2,809,587 $ 2,819,373 100.35% $ (103,880) Information is not available for the fiscal year ending September 30,2007. In the current fiscal year,there have not been any factors,such as changes in benefit provisions,the size or composition of the population covered by the plan or the actuarial methods and assumptions used, that would significantly affect the identification of trends in the amounts reported. 100 COMBINING AND INDIVIDUAL FUND STATEMENTS AND SCHEDULES 101 NONMAJOR GOVERNMENTAL FUNDS SPECIAL REVENUE FUNDS Court Facilities- To account for the court facility surcharge, additional court costs, the additional recording fee for court technology, and improvements made to court facilities. Section 8 Rental Assistance- To account for the provision of rental assistance for low income housing. Financing is provided by grants from the U.S. Department of Housing and Urban Development. providing Special Law Enforcement- To account for the expenditures of p g law enforcement equipment. Financing is provided by confiscation of monies and property in accordance with Section 932.704 of the Florida Statutes. made to County Parks Development- To account for expenditures for improvements parks. Financing is provided by the sale of surplus County property. Tree Ordinance Fines- To account for fines assessed against individuals for illegal removal of protected trees. Funds are used for park improvements. Tourist Development- To account for the proceeds from the levy of a local option Tourist Development tax. Funds are used to attract tourism trade and for the benefit of County residents. 911 Surcharge- To account for the receipt of the 911 surcharge on all telephone bills of the County. Monies are used to pay the operating costs of the 911 Emergency Center. Drug Abuse- To account for the collection of fines on criminal drug cases. Monies are used for drug prevention and education programs. State Housing Initiatives Partnership- To account for State funds distributed under the State Housing Initiatives Partnership Act. The purpose of this program is to provide for the creation and preservation of affordable housing. Funds are provided by the documentary stamp taxes. 102 Metropolitan Planning Organization- To account for expenditures incurred for planning community transportation in the County. Financing is provided by grants. Land Acquisition- To account for expenditures incurred in the purchase of environmentally sensitive land, preservation of water sources, historic sites and agricultural lands. Financing is provided by bond proceeds and state grants. Multi-Jurisdictional Task Force- To account for expenditures incurred in connection with the cooperative drug enforcement task force established by the County, the City of Vero Beach and the City of Sebastian. Funds are provided by grants and program generated income. Native Uplands Land Acquisition- To account for expenditures related to the acquisition of native habitat preserve areas and for the management of such lands. Funding is provided by developers of property who pay to mitigate native uplands destruction where native upland plant communities will be destroyed. Beach Restoration- To account for the expenditure of funds to preserve and improve County beaches. Funds are provided by the levy of a local option tourist development tax. Vero Lake Estates- To account for the expenditure of funds to improve roads in the Vero Lake Estates subdivision. Funds are provided by the levying of special assessments. Florida Boating Improvement Program- To account for boat registration fees which may be used for providing recreational channel marking, public launching facilities, and other boating-related activities. LibraryBequests- To account for bequests to the Indian River County Library to be q q ty used for improvements to the Main and North County Libraries. Disabled Access Program- To account for fines assessed against individuals for illegal use of handicapped parking spaces. East Gifford Stormwater- To account for expenditures of funds for stormwater improvements in the East Gifford Watershed. Funds are provided by non-ad valorem taxes. 103 Community Development Block Grant- To account for the rehabilitation or replacement of housing units in the Gifford area. Funding is provided by a housing rehabilitation Community Development Block Grant. Federal/State Grants- To account for revenues and expenditures of various grants from Federal and State agencies. Traffic Education Program- To account for the proceeds of an additional $3 add-on to traffic fines authorized by County Ordinance. Proceeds must be used for traffic education programs. SHIP Hurricane Housing Recovery Grant- To account for the proceeds from the State Housing Initiatives Program Hurricane housing Recovery Grant. The purpose of this grant is to provide financial assistance through grants and loans to residents impacted from hurricanes. Disaster Recovery Grants- To account for revenues and expenditures of grants received in response to disasters, such as hurricanes. Clerk Special Revenue- To account for the proceeds from a special recording fee to be used for computer linkage and modernizing the Clerk of the Circuit Courts' public records system. Sheriff Special Revenue- To account for the expenditure of grants, fines, and restricted revenues received by the Sheriff. Supervisor of Elections Special Revenue- To account for revenues and expenditures from state grants for voter education and pollworker activities. Street Lighting Districts- To account for the costs of providing street lights. Financing is provided by the levying of special assessments. DEBT SERVICE FUNDS Spring Training Facility Bonds- To account for the accumulation of State assistance and tourist tax monies pledged to pay the principal, interest, and fiscal charges on the Spring Training Facility Bonds. Land Acquisition Bonds- To account for the accumulation of ad valorem taxes to pay the principal, interest, and fiscal charges related to the Land Acquisition Bonds. 104 CAPITAL PROJECTS FUNDS Dodgertown Capital Reserve- To provide additional improvements to the Dodgertown Spring Training Facility. The City of Vero Beach contributed $1,400,000 and the County contributed$600,000. MAJOR CAPITAL PROJECTS FUND Optional Sales Tax- To account for revenues generated by the local option one cent sales tax. Monies are used for various capital projects. r 105 Indian River County,Florida Combining Balance Sheet Nonmajor Governmental Funds September 30,2009 Special Revenue Section 8 Court Rental Special Law Facilities Assistance Enforcement ASSETS Cash and cash equivalents $ 1,075,560 $ 290,821 $ 258,460 Accounts receivable - 19,355 - Prepaid items - Due from other funds - - Due from other governments - 1,475 - Total Assets $ 1,075,560 $ 311,651 $ 258,460 LIABILITIES AND FUND EQUITY Liabilities: Accounts payable $ 73,441 $ 7,715 $ - Retainage payable - - Due to other funds ' Due to other governments - - - Deferred revenues - Total Liabilities 73,441 7,715 Fund Equity: Fund balances: Unreserved(Deficit) 1,002,119 303,936 258,460 Reserved for debt service - - Reserved for capital projects - - Total Fund Equity 1,002,119 303,936 258,460 Total Liabilities and Fund Equity $ 1,075,560 $ 311,651 $ 258,460 106 Special Revenue Tree Parks Ordinance Tourist 911 Drug Development Fines Development Surcharge Abuse $ 53,589 $ 281,544 $ 946,435 $ 1,385,038 $ 154,310 62,266 5,977 $ 53,589 $ 281,544 $ 946,435 $ 1,447,304 $ 160,287 $ - $ - $ 20,417 $ 4,917 $ 7,502 3,599 3,599 - 20,417 4,917 7,502 49,990 281,544 926,018 1,442,387 152,785 49,990 281,544 926,018 1,442,387 152,785 $ 53,589 $ 281,544 $ 946,435 $ 1,447,304 $ 160,287 Continued 107 Indian River County,Florida Combining Balance Sheet Nonmajor Governmental Funds September 30,2009 Special Revenue SHIP Metropolitan Low Income Planning Land Housing Organization Acquisition ASSETS _ 680 $ 634,734 Cash and cash equivalents $ 1,453,228 $ Accounts receivable - _ Prepaid items Due from other funds - Due from other governments - - 49,145 Total Assets $ 1,453,228 $ 680 $ 683,879 EQUITY LIABILITIES AND FUND E Q Liabilities: Accounts payable $ 2,557 $ 16,980 $ 32,848 Retainage payable - - Due to other funds - 53,000 - Due to other governments - Deferred revenues 208,422 - Total Liabilities 210,979 69,980 32,848 Fund Equity: Fund balances: Unreserved(Deficit) 1,242,249 (69,300) 651,031 Reserved for debt service Reserved for capital projects - - Total Fund Equity 1,242,249 (69,300) 651,031 Total Liabilities and Fund Equity $ 1,453,228 $ 680 $ 683,879 a 108 Special Revenue Multi- Native Uplands Florida Jurisdictional Land Beach Vero Lakes Boating Improv. Law Force Acquisition Restoration Estates Program $ 136,833 $ 824,737 $ 6,376,330 $ 972,663 $ 875,702 1,236 - - - 26,021 - - $ 136,833 $ 824,737 $ 6,402,351 $ 973,899 $ 875,702 $ - $ - $ 303,917 $ 878 $ 7,619 78,844 - - 2 761 878 7 38 , 619, 136,833 824,737 6,019,590 973,021 868,083 136,833 824,737 6,019,590 973,021 868,083 $ 136,833 $ 824,737 $ 6,402,351 $ 973,899 $ 875,702 Continued 109 r County,Florida Indian Rive ty, Combining Balance Sheet Nonmajor Governmental Funds September 30,2009 Special Revenue Disabled East Library Access Gifford Bequests Program Stormwater ASSETS - - Cash and cash equivalents $ 153,575 $ 59,010 $ 13,617 Accounts receivable Prepaid items - Due from other funds - - 18 Due from other governments - - Total Assets $ 153,575 $ 59,010 $ 13,635 LIABILITIES AND FUND EQUITY Liabilities: Accounts payable $ 230 $ - $ Retainage payable - Due to other funds - Due to other governments - Deferred revenues - Total Liabilities 230 - Fund Equity: Fund balances: Unreserved(Deficit) 153,345 59,010 13,635 Reserved for debt service - - Reserved for capital projects - Total Fund Equity 153,345 59,010 13,635 Total Liabilities and Fund Equity $ 153,575 $ 59,010 $ 13,635 r 110 Special Revenue Community Traffic SHIP Disaster Development Federal/State Education Hurricane Housing Recovery Block Grant Grants Program Recovery Grant Grants $ 728 $ 930 $ 89,284 $ 1,256,442 $ _ 3,430 - - - $ 728 $ 4,360 $ 89,284 $ 1,256,442 $ - $ 4,188 $ 9,185 $ 12,958 $ = $ 131 6,000 4,000 - - 55,434 _ - 358,204 - 10,188 13,185 12,958 358,204 55,565 (9,460) (8,825) 76,326 898,238 (55,565) (9,460) (8,825) 76,326 898,238 (55,565) $ 728 $ 4,360 $ 89,284 $ 1,256,442 $ Continued 111 Indian River County,Florida Combining Balance Sheet Nonmajor Governmental Funds September 30,2009 Special Revenue Clerk Sheriff Supervisor Special Special of Elections Revenue Revenue Special Revenue ASSETS Cash and cash equivalents $ 2,547,737 $ 2,362,745 $ 60,614 Accounts receivable - 7,417 - Prepaid items 20,428 - _ Due from other funds _ Due from other governments _ - _ Total Assets $ 2,568,165 $ 2,370,162 $ 60,614 LIABILITIES AND FUND EQUITY Liabilities: Accounts payable $ 1,420 $ 29,636 $ - Retainage payable _ _ _ Due to other funds Due to other governments - 64,460 - Deferred revenues - 1,683 53,642 Total Liabilities 1,420 95,779 53,642 Fund Equity: Fund balances: Unreserved(Deficit) 2,566,745 2,274,383 6,972 Reserved for debt service - Reserved for capital projects _ Total Fund Equity 2,566,745 2,274,383 6,972 Total Liabilities and Fund Equity $ 2,568,165 $ 2,370,162 $ 60,614 r a 112 Special Revenue Debt Service Capital Projects Street Spring Land Dodgertown Total Nonmajor Lighting Training Acquisition Capital Governmental Districts Facility Bonds Bonds Reserve Funds $ 506,109 $ 1,437,653 $ 2,737,642 $ 1,838,793 $ 28,785,543 26,772 20,428 _ 2,467 - 104,127 - 107,848 37,148 - - 185,462 $ 508,576 $ 1,474,801 $ 2,841,769 $ 1,838,793 $ 29,126,053 $ 16,149 $ - $ - $ 137,341 $ 690,029 - - - - 82,443 118,434 64,460 621,951 16,149 - - 137,341 1,577,317 492,427 - - - 21,530,714 - 1,474,801 2,841,769 - 4,316,570 - - - 1,701,452 1,701,452 492,427 1,474,801 2,841,769 1,701,452 27,548,736 $ 508,576 $ 1,474,801 $ 2,841,769 $ 1,838,793 $ 29,126,053 113 Indian River County,Florida Combining Statement of Revenues,Expenditures and Changes in Fund Balances Nonmajor Governmental Funds For the Year Ended September 30,2009 Special Revenue Section 8 Court Rental Special Law Facilities Assistance Enforcement REVENUES Taxes $ _ $ _ $ _ Permits,fees and special assessments Intergovernmental - 1,874,957 - Charges for services 518,626 23,306 36,479 Judgments,fines and forfeits - - 34,090 Interest 25,563 4,236 6,571 Miscellaneous 27,037 103,748 - Total revenues 571,226 2,006,247 77,140 EXPENDITURES Current: General government 4,924 Public safety _ Physical environment _ Transportation _ _ _ Economic environment - 40,351 - Human services - 1,969,854 - Culture/recreation _ Court related 375,577 Debt service: Principal _ Interest and other fiscal charges Capital projects _ _ _ Total expenditures 380,501 2,010,205 - Excess of revenues over(under)expenditures 190,725 (3,958) 77,140 OTHER FINANCING SOURCES(USES) Transfers in Transfers out - (14,000) Total other financing sources(uses) - - (14,000) Net change in fund balances 190,725 (3,958) 63,140 Fund balances at beginning of year 811,394 307,894 195,320 Fund balances at end of year $ 1,002,119 $ 303,936 $ 258,460 114 Special Revenue Tree Parks Ordinance Tourist 911 Drug Development Fines Development Surcharge Abuse $ _ $ - $ 485,311 $ _ $ 800,266 63,369 36,184 - - 15,685 2,501 7,406 46,872 33,751 4,189 830 1,025 - 2,501 43,590 533,013 835,042 83,243 _ - 437,979 36,031 23,685 35,990 - 1,311,173 - - 35,990 - 1,311,173 437,979 59,716 (33,489) 43,590 (778,160) 397,063 23,527 (113,141) (113,141) - (33,489) 43,590 (778,160) 283,922 23,527 83,479 237,954 1,704,178 1,158,465 129,258 $ 49,990 $ 281,544 $ 926,018 $ 1,442,387 $ 152,785 Continued 115 Indian River County,Florida Combining Statement of Revenues,Expenditures and Changes in Fund Balances Nonmajor Governmental Funds For the Year Ended September 30,2009 Special Revenue SHIP Metropolitan Low Income Planning Land _ Housing Organization Acquisition REVENUES Taxes $ _ $ _ $ _ Permits,fees and special assessments Intergovernmental 635,062 585,138 3,147,541 Charges for services 77,824 _ - Judgments,fines and forfeits - _ Interest 40,559 1,712 19,363 Miscellaneous 117,552 - 42,944 Total revenues 870,997 586,850 3,209,848 EXPENDITURES Current: General government - 474,626 - Public safety _ _ _ Physical environment - - 112,220 Transportation _ _ _ Economic environment _ _ _ Human services 1,083,813 - Culture/recreation - Court related - Debt service: Principal _ Interest and other fiscal charges - Capital projects _ Total expenditures 1,083,813 474,626 112,220 Excess of revenues over(under)expenditures (212,816) 112,224 3,097,628 OTHER FINANCING SOURCES(USES) Transfers in Transfers out Total other financing sources(uses) - _ Net change in fund balances (212,816) 112,224 3,097,628 Fund balances at beginning of year 1,455,065 (181,524) (2,446,597) Fund balances at end of year $ 1,242,249 $ (69,300) $ 651,031 116 Special Revenue Multi- Native Uplands Florida Jurisdictional Land Beach Vero Lakes Boating Improv. Law Enforce Acquisition Restoration Estates Program $ - $ - $ 485,311 $ 3,796 $ - - 90,972 - 1,194,142 - 149,572 24,663 - - - - 3,546 24,895 148,760 27,849 25,800 - - 173,940 - - 28,209 24,895 2,002,153 122,617 175,372 - 19,120 - - - - - 9,615 - - - 2135,308 - 123,551 19,120 2,135,308 9,615 1235551 28,209 5,775 (133,155) 113,002 51,821 - - 2,174,460 - - - - (3,186) - 2,174,460 (3,186) - 28,209 5,775 2,041,305 109,816 51,821 108,624 818,962 3,978,285 863,205 816,262 $ 136,833 $ 824,737 $ 6,019,590 $ 973,021 $ 868,083 Continued 117 Indian River County,Florida r Combining Statement of Revenues,Expenditures and Changes in Fund Balances Nonmajor Governmental Funds For the Year Ended September 30,2009 Special Revenue r Disabled East Library Access Gifford Bequests Program Stormwater REVENUES Taxes $ - $ - $ 33 Permits,fees and special assessments - - 1,281 Intergovernmental - - - Charges for services - - - Judgments,fines and forfeits - 1,134 - Interest 5,331 1,740 379 Miscellaneous - - - Total revenues 5,331 2,874 1,693 EXPENDITURES Current: General government - - - Public safety - - - Physical environment - - - Transportation - - - Economic environment - - - Human services - - - Culture/recreation 30,198 - - Court related - - - Debt service: Principal - - - Interest and other fiscal charges - - - Capital projects - - - Total expenditures 30,198 - - Excess of revenues over(under)expenditures (24,867) 2,874 1,693 OTHER FINANCING SOURCES(USES) Transfers in - - - Transfers out - - (58) Total other financing sources(uses) - - (58) Net change in fund balances (24,867) 2,874 1,635 Fund balances at beginning of year 178,212 56,136 12,000 Fund balances at end of year $ 153,345 $ 59,010 $ 13,635 118 Special Revenue Community Traffic SHIP Disaster Development Federal/State Education Hurricane Housing Recovery Block Grant Grants Program Recovery Grant Grants = 579,742 = 997,526 2,711,678 744 - - 2,989 7,282 - - - - 947 149,119 579,742 3,733 1,005,755 2,860,797 - - 75 - - 27,452 29,962 - - 9,460 - - - 188,865 - 586,329 - 997,526 - 9,460 586,329 29,962 997,526 216,392 (9,460) (6,587) (26,229) 8,229 2,644,405 (9,460) (6,587) (26,229) 8,229 2,644,405 (2,238) 102,555 890,009 (2,699,970) $ (9,460) $ (8,825) $ 76,326 $ 898,238 $ (55,565) Continued 119 Indian River County,Florida Combining Statement of Revenues,Expenditures and Changes in Fund Balances Nonmajor Governmental Funds For the Year Ended September 30,2009 Special Revenue Clerk Sheriff Supervisor of Special Special Elections Revenue Revenue Special Revenue REVENUES Taxes $ - $ - $ Permits,fees and special assessments - - - Intergovernmental - 86,004 44,465 Charges for services 315,155 262,916 - Judgments,fines and forfeits 40,970 200,638 - Interest 3 8,871 15,513 146 Miscellaneous - - - Total revenues 394,996 565,071 44,611 EXPENDITURES Current: General government 257,856 - 48,454 Public safety - 520,685 - Physical environment - - - Transportation - - - Economic environment - - - Human services - - - Culture/recreation - - - Court related 75,631 17,165 - Debt service: Principal - - - Interest and other fiscal charges - - - Capital projects - - - Total expenditures 333,487 537,850 48,454 Excess of revenues over(under)expenditures 61,509 27,221 (3,843) OTHER FINANCING SOURCES(USES) Transfers in - 14,000 3,567 Transfers out (451,318) - - Total other financing sources(uses) (451,318) 14,000 3,567 Net change in fund balances (389,809) 41,221 (276) Fund balances at beginning of year 2,956,554 2,233,162 7,248 Fund balances at end of year $ 2,566,745 $ 2,274,383 $ 6,972 : 120 Special Revenue Debt Service Capital Projects Total Street Land Dodgertown Nonmajor Lighting Spring Training Acquisition Capital Governmental Districts Facility Bonds Bonds Reserve Funds $ 1,182 $ 323,541 $ 7,131,231 $ - $ 8,430,405 181,699 - - - 273,952 - 919,602 - - 13,789,064 - - 1,234,306 354,108 16,272 41,017 151,894 - 705,007 2,669 - - = 619,811 201,822 1,284,160 7,283,125 25,406,653 - - - 785,860 994,770 - - - 158,792 186,497 - - - 226,074 = = = 238,676 4,661,207 3,636,220 468,373 - 560,000 4,560,000 - 5,120,000 665,033 2,283,725 - 2,948,758 - - 298,548 298,548 186,497 1,225,033 6,843,725 298,548 19,537,278 15,325 59,127 439,400 (298,548) 5,869,375 2,192,027 (5,732) - (128,243) (33,562) (749,240) (5,732) - (128,243) (33,562) 1,442,787 9,593 59,127 311,157 (332,110) 7,312,162 482,834 1,415,674 2,530,612 2,033,562 20,236,574 $ 492,427 $ 1,474,801 $ 2,841,769 $ 1,701,452 $ 27,548,736 121 Indian River County,Florida Budgetary Comparison Schedule Court Facilities For the Year Ended September 30,2009 Variance Final Actual Positive Budget Amounts (Negative) REVENUES Charges for services $ 536,780 $ 518,626 $ (18,154) Interest 4,500 25,563 21,063 Miscellaneous - 27,037 27,037 Total revenues 541,280 571,226 29,946 EXPENDITURES General government 35,000 4,924 30,076 Court related 566,763 375,577 191,186 Total expenditures 601,763 380,501 221,262 Net change in fund balances (60,483) 190,725 251,208 Fund balances at beginning of year 60,483 811,394 750,911 Fund balances at end of year $ - $ 1,002,119 $ 1,002,119 122 Indian River County,Florida Budgetary Comparison Schedule Section 8 Rental Assistance For the Year Ended September 30,2009 Variance Final Actual Positive REVENUES Budget Amounts (Negative) Intergovernmental $ 2,016,875 $ 1,874,957 $ (141,918) Charges for services 12,000 23,306 11,306 Interest - 4,236 4,236 Miscellaneous 92,000 103,748 11,748 Total revenues 2,120,875 2,006,247 (114,628) EXPENDITURES Economic environment 49,515 40,351 9,164 Human services 2,117,060 1,969,854 147,206 Total expenditures 2,166,575 2,010,205 156,370 Net change in fund balances (45,700) (3,958) 41,742 Fund balances at beginning of year 45,700 307,894 262,194 Fund balances at end of year $ - $ 303,936 $ 303,936 123 Indian River County,Florida Budgetary Comparison Schedule Special Law Enforcement For the Year Ended September 30,2009 Variance Final Actual Positive Budget Amounts (Negative) REVENUES Charges for services $ - $ 36,479 $ 36,479 Judgments, fines and forfeits 14,000 34,090 20,090 Interest - 6,571 6,571 Total revenues 14,000 77,140 63,140 EXPENDITURES Public safety - - - Total expenditures - - - Excess of revenues over(under) expenditures 14,000 77,140 63,140 OTHER FINANCING USES Transfers out (14,000) (14,000) - Total other financing uses (14,000) (14,000) - Net change in fund balances - 63,140 63,140 Fund balances at beginning of year - 195,320 195,320 Fund balances at end of year $ - $ 258,460 $ 258,460 124 Indian River County,Florida Budgetary Comparison Schedule Parks Development For the Year Ended September 30,2009 Variance Final Actual Positive REVENUES Budget Amounts (Negative) Interest $ 2,501 $ 2,501 $ Total revenues 2,501 2,501 - EXPENDITURES Culture/recreation 35,990 35,990 Total expenditures 35,990 35,990 - Net change in fund balances (33,489) (33,489) - Fund balances at beginning of year 33,489 83,479 49,990 Fund balances at end of year $ - $ 49,990 $ 49,990 125 Indian River County,Florida Budgetary Comparison Schedule Tree Ordinance Fines For the Year Ended September 30,2009 Variance Final Actual Positive Budget Amounts (Negative) REVENUES Judgments,fines and forfeits $ - $ 36,184 $ 36,184 Interest - 7,406 7,406 Total revenues - 43,590 43,590 EXPENDITURES Culture/recreation 50,000 - 50,000 Total expenditures 50,000 - 50,000 Net change in fund balances (50,000) 43,590 93,590 Fund balances at beginning of year 50,000 237,954 187,954 Fund balances at end ofear $ - $ 281 544 $ 281 544 Y � , r 126 Indian River County,Florida Budgetary Comparison Schedule Tourist Development For the Year Ended September 30,2009 Variance Final Actual Positive REVENUES Budget Amounts (Negative) Taxes $ 517,750 $ 485,311 $ (32,439) Interest 23,750 46,872 23,122 Miscellaneous - 830 830 Total revenues 541,500 533,013 (8,487) EXPENDITURES Culture/recreation 1,335,201 1,311,173 24,028 Total expenditures 1,335,201 1,311,173 24,028 Net change in fund balances (793,701) (778,160) 15,541 Fund balances at beginning of year 793,701 1,704,178 910,477 Fund balances at end ofear Y $ - $ 926,018 $ 926,018 127 Indian River County, Florida Budgetary Comparison Schedule 911 Surcharge For the Year Ended September 30,2009 Variance Final Actual Positive Budget Amounts (Negative) REVENUES Intergovernmental $ 617,435 $ 800,266 $ 182,831 Interest - 33,751 33,751 Miscellaneous - 1,025 1,025 Total revenues 617,435 835,042 217,607 EXPENDITURES Public safety 507,494 437,979 69,515 Total expenditures 507,494 437,979 69,515 Excess of revenues over(under) expenditures 109,941 397,063 287,122 OTHER FINANCING USES Transfers out (113,141) (113,141) - Total other financing uses (113,141) (113,141) - Net change in fund balances (3,200) 283,922 287,122 Fund balances at beginning of year 3 200 1 158 465 1 155 265 g g Y > Fund balances at end of year $ - $ 1,442,387 $ 1,442,387 r S 128 Indian River County,Florida Budgetary Comparison Schedule Drug Abuse For the Year Ended September 30,2009 Variance Final Actual Positive Budget Amounts (Negative) REVENUES Intergovernmental $ 55,952 $ 63,369 $ 7,417 Judgments, fines and forfeits - 15,685 15,685 Interest - 4,189 4,189 Total revenues 55,952 83,243 27,291 EXPENDITURES Public safety 36,031 36,031 - Human services 23,918 23,685 233 Total expenditures 59,949 59,716 233 Net change in fund balance (3,997) 23,527 27,524 Fund balances at beginning of year 3,997 129,258 125,261 Fund balances at end of year $ - $ 152,785 $ 152,785 129 Indian River County,Florida Budgetary Comparison Schedule State Housing Initiatives Partnership For the Year Ended September 30,2009 Variance Final Actual Positive Budget Amounts (Negative) REVENUES Intergovernmental $ 1,438,184 $ 635,062 $ (803,122) Charges for services 275,000 77,824 (197,176) Interest - 40,559 40,559 Miscellaneous - 117,552 117,552 Total revenues 1,713,184 870,997 (842,187) EXPENDITURES Human services 2,132,686 1,083,813 1,048,873 , Total expenditures 2,132,686 1,083,813 1,048,873 Net change in fund balances (419,502) (212,816) 206,686 Fund balances at beginning of year 419,502 1,455,065 1,035,563 Fund balances at end of year $ - $ 1,242,249 $ 1,242,249 r 130 ` Indian River County,Florida Budgetary Comparison Schedule Metropolitan Planning Organization For the Year Ended September 30,2009 Variance Final Actual Positive REVENUES Budget Amounts (Negative) Intergovernmental $ 641,766 $ 585,138 $ (56,628) Interest - 1,712 1,712 Total revenues 641,766 586,850 (54,916) EXPENDITURES General government 649,484 474,626 174,858 Total expenditures 649,484 474,626 174,858 Net change in fund balances (7,718) 112,224 119,942 Fund balances at beginning of year 7,718 (181,524) (189,242 Fund balances at end of year $ - $ (69,300) $ (69,300) 131 Indian River County,Florida Budgetary Comparison Schedule Land Acquisition For the Year Ended September 30,2009 Variance with Final Budget Actual Positive Final Amounts (Negative) REVENUES Intergovernmental $ 596,000 $ 3,147,541 $ 2,551,541 Interest - 19,363 19,363 Miscellaneous 40,741 42,944 2,203 Total revenues 636,741 3,209,848 2,573,107 EXPENDITURES Current: Physical environment 642,591 112,220 530,371 Total expenditures 642,591 112,220 530,371 Net change in fund balances (5,850) 3,097,628 3,103,478 Fund balances at beginning of year 5,850 (2,446,597) (2,452,447) Fund balances at end of year $ - $ 651,031 $ 651,031 132 Indian River County,Florida Budgetary Comparison Schedule Multi-Jurisdictional Law Enforcement For the Year Ended September 30,2009 Variance Final Actual Positive Budget Amounts REVENUES (Negative) Judgments, fines and forfeits $ - $ 24,663 $ 24,663 Interest - 3,546 3,546 Total revenues - 28,209 28,209 EXPENDITURES Public safety _ Total expenditures Net change in fund balances - 28,209 28,209 Fund balances at beginning of year - 108,624 108,624 Fund balances at end of year $ - $ 136,833 $ 136,833 L L L L L L 133 Indian River County,Florida Budgetary Comparison Schedule Native Uplands Land Acquisition For the Year Ended September 30,2009 Variance Final Actual Positive Budget Amounts (Negative) REVENUES Interest $ - $ 24,895 $ 24,895 Total revenues - 24,895 24,895 EXPENDITURES Physical environment 55,000 19,120 35,880 Total expenditures 55,000 19,120 35,880 Net change in fund balances (55,000) 5,775 60,775 Fund balances at beginning of year 55,000 818,962 763,962 Fund balances at end of year $ - $ 824,737 $ 824,737 134 MW Indian River County,Florida Budgetary Comparison Schedule Beach Restoration For the Year Ended September 30,2009 Variance Final Actual Positive (Negative) REVENUES Budget Amounts -- Taxes $ 517,750 $ 485,311 $ (32,439) Intergovernmental 1,904,908 1,194,142 (710,766) Interest 57,000 148,760 91,760 Miscellaneous 175,203 173,940 (1,263) Total revenues 2,654,861 2,002,153 (652,708) EXPENDITURES Culture/recreation 5,700,686 2,135,308 3,565,378 Total expenditures5,700,686 2,135,308 3,565,378 Excess of revenues over(under) expenditures (3,045,825) (133,155) 2,912,670 OTHER FINANCING SOURCES Transfers in 2,174,462 2,174,460 (2) Total other financing sources 2,174,462 2,174,460 (2) Net change in fund balances (871,363)) 204 1,305 2,912,668 Fund balances at beginning of year 871,363 3,978,285 3,106,922 Fund balances at end of year $ - $ 6,019,590 $ 6,019,590 135 Indian River County,Florida Budgetary Comparison Schedule Vero Lake Estates For the Year Ended September 30,2009 Variance Final Actual Positive Budget Amounts (Negative) REVENUES Taxes $ - $ 3,796 $ 3,796 Permits, fees and special assessments 88,174 90,972 2,798 Interest 7,600 27,849 20,249 Total revenues 95,774 122,617 26,843 EXPENDITURES Physical environment 141,037 - 141,037 Transportation 291,322 9,615 281,707 Total expenditures 432,359 9,615 422,744 Excess of revenues over(under) expenditures (336,585) 113,002 449,587 OTHER FINANCING USES Transfers out (4,862) (3,186) 1,676 Total other financing uses (4,862) (3,186) 1,676 Net change in fund balances (341,447) 109,816 451,263 Fund balances at beginning of year 341,447 863,205 521,758 Fund balances at end of year $ - $ 973,021 $ 973,021 136 Indian River County,Florida Budgetary Comparison Schedule Florida Boating Improvement Program For the Year Ended September 30,2009 Variance Final Actual Positive REVENUES Budget Amounts (Negative) Intergovernmental $ 235,000 $ 149,572 $ (85,428) Interest 25,800 25,800 Total revenues 235,000 175,372 (59,628) EXPENDITURES Culture/recreation 515,000 123,551 391,449 Total expenditures 515,000 123,551 391,449 Net change in fund balances (280,000) 51,821 331,821 Fund balances at beginning of year 280,000 816,262 536,262 Fund balances at end of year $ - $ 868,083 $ 868,083 137 Indian River County,Florida Budgetary Comparison Schedule Library Bequests For the Year Ended September 30,2009 Variance Final Actual Positive Budget Amounts (Negative) REVENUES Interest $ - $ 5,331 $ 5,331 Total revenues - 5,331 5,331 EXPENDITURES Culture/recreation 50,000 30,198 19,802 Total expenditures 50,000 30,198 19,802 Net change in fund balances (50,000) (24,867) 25,133 Fund balances at beginning of year 50,000 178,212 128,212 Fund balances at end of year $ - $ 153,345 $ 153,345 r 138 Indian River County,Florida Budgetary Comparison Schedule Disabled Access Program For the Year Ended September 30,2009 Variance Final Actual Positive Budget Amounts (Negative) REVENUES Judgments, fines and forfeits $ - $ 1,134 $ 1,134 Interest - 1,740 1,740 Total revenues - 2,874 2,874 EXPENDITURES Human services 20,000 - 20,000 Total expenditures 20,000 - 20,000 Net change in fund balances (20,000) 2,874 22,874 Fund balances at beginning of year 20,000 56,136 36,136 Fund balances at end of year $ - $ 59,010 $ 59,010 L L L L L 139 Indian River County,Florida Budgetary Comparison Schedule East Gifford Stormwater For the Year Ended September 30,2009 nc Varia e Final Actual Positive Budget Amounts (Negative) REVENUES Taxes $ - $ 33 $ 33 Permits, fees and special assessments 1,995 1,281 (714) Interest - 379 379 Total revenues 1,995 1,693 (302) EXPENDITURES Transportation 1,928 - 1,928 Total expenditures 1,928 - 1,928 Excess of revenues over expenditures 67 1,693 1,626 OTHER FINANCING USES Transfers out (67) (58) 9 Total other financing uses (67) (58) 9 Net change in fund balances - 1,635 1,635 Fund balances at beginning of year - 12,000 12,000 Fund balances at end of year $ - $ 13,635 $ 13,635 140 Indian River County,Florida Budgetary Comparison Schedule Community Development Block Grant For the Year Ended September 30,2009 Variance Final Actual Positive REVENUES Budget Amounts (Negative) Intergovernmental $ 4,680,825 $ = $ (4,680,825) Total revenues 4,680,825 (4,680,825) EXPENDITURES Economic environment 4,680,825 9,460 4,671,365 Total expenditures 4,680,825 9,460 4,671,365 Net change in fund balances - (9,460) ((9,460) Fund balances at beginning of year Fund balances at end of year $ - $ (9,460) $ (9,460) L L L L L L L 141 Indian River County,Florida Budgetary Comparison Schedule Federal/State Grants For the Year Ended September 30,2009 Variance Final Actual Positive Budget Amounts (Negative) REVENUES Intergovernmental $ 3,438,411 $ 579,742 $ (2,858,669) Total revenues 3,438,411 579,742 (2,858,669) EXPENDITURES General government 2,281,044 - 2,281,044 Human services 1,157,367 586,329 571,038 Total expenditures 3,438,411 586,329 2,852,082 Net change in fund balances - (6,587) (6,587) Fund balances at beginning of year - (2,238) (2,238) Fund balances at end of year $ - $ (8,825) $ (8,825) 142 Indian River County,Florida Budgetary Comparison Schedule Traffic Education Program For the Year Ended September 30,2009 Variance Final Actual Positive REVENUES Budget Amounts (Negative) Judgments, fines and forfeits $ 60,548 $ 744 $ (59,804) Interest - 2,989 2,989 Total revenues 60,548 3,733 (56,815) EXPENDITURES Transportation 60,548 29,962 30,586 Total expenditures 60,548 29,962 30,586 Net change in fund balances - (26,229) (26,229) Fund balances at beginning of year - 102,555 102,555 Fund balances at end of year $ - $ 76,326 $ 76,326 143 Indian River County,Florida Budgetary Comparison Schedule SHIP Hurricane Housing Recovery Grant For the Year Ended September 30,2009 Variance Final Actual Positive Budget Amounts (Negative) REVENUES Intergovernmental $ 1,895,000 $ 997,526 $ (897,474) Interest - 7,282 7,282 Miscellaneous - 947 947 Total revenues 1,895,000 1,005,755 (889,245) EXPENDITURES Human services 1,895,000 997,526 897,474 Total expenditures 1,895,000 997,526 897,474 Net change in fund balances - 8,229 8,229 Fund balances at beginning of year - 890,009 890,009 g g Y Fund balances at end of year $ - $ 898,238 $ 898,238 144 r Indian River County, Florida Budgetary Comparison Schedule Disaster Recovery Grants For the Year Ended September 30,2009 Variance with Final Budget Actual Positive REVENUES tive) Final Amounts (Nega- Intergovernmental $ 337,237 $ 2,711,678 $ 2,374,441 Miscellaneous - 149,119 149,119 Total revenues 337,237 2,860,797 2,523,560 EXPENDITURES Current: Public safety 75 75 - Physical environment 27,500 27,452 48 Economic environment 309,662 188,865 120,797 Total expenditures 337,237 216,392 120,845 Net change in fund balances - 2,644,405 2,644,405 Fund balances at beginning of year - (2,699,970) (2,699,970) Fund balances at end of year $ - $ (55,565) $ (55,565) 145 Indian River County,Florida Budgetary Comparison Schedule Clerk Special Revenue For the Year Ended September 30,2009 Variance Final Actual Positive Budget Amounts (Negative) REVENUES Charges for services $ 721,986 $ 315,155 $ (406,831) Judgments, fines and forfeits 40,971 40,970 (1) Interest 57,002 38,871 (18,131) Total revenues 819,959 394,996 (424,963) EXPENDITURES General government 295,876 257,856 38,020 Court related 80,973 75,631 5,342 Total expenditures 376,849 333,487 43,362 -Excess of revenues over(under) expenditures 443,110 61,509 (381,601) OTHER FINANCING USES Transfers out (443,110) (451,318) (8,208) Total other financing uses (443,110) (451,318) (8,208) Net chane in fund balances - 389,809 (389,809) Fund balances at beginning of year - 2,956,554 2,956,554 Fund balances at end of year $ - $ 2,566,745 $ 2,566,745 146 Indian River County,Florida Budgetary Comparison Schedule Sheriff Special Revenue For the Year Ended September 30,2009 Variance Final Actual Positive REVENUES Budget Amounts (Negative) Intergovernmental $ 86,004 $ 86,004 $ Charges for services 260,000 262,916 2,916 Judgments, fines and forfeits 175,000 200,638 25,638 Interest 11,996 15,513 3,517 Total revenues 533,000 565,071 32,071 EXPENDITURES Public safety 529,000 520,685 8,315 Court related 18,000 17,165 835 Total expenditures 547,000 537,850 9,150 Excess of revenues over(under)expenditures (14,000) 27,221 41,221 OTHER FINANCING SOURCES Transfers in 14,000 14,000 - Total other financing sources 14,000 14,000 - Net change in fund balances - 41,221 41,221 Fund balances at beginning of g g year - 2,233,162 2,233,162 Fund balances at end of year $ - $ 2,274,383 $ 2,274,383 147 r County,Florida Indian Rive ty, Budgetary Comparison Schedule Supervisor of Elections Special Revenue For the Year Ended September 30,2009 Variance Final Actual Positive Budget Amounts (Negative) REVENUES Intergovernmental $ - $ 44,465 $ 44,465 Interest - 146 146 Total revenues - 44,611 44,611 EXPENDITURES General government - 48,454 (48,454) Total expenditures - 48,454 (48,454) Excess of revenues under expenditures - (3,843) (3,843) OTHER FINANCING SOURCES Transfers in - 3,567 3,567 Total other financing sources - 3,567 3,567 Net change in fund balances - (276) (276) Fund balances at beginning of - 7,248 7 248 g g year , Fund balances at end of year $ - $ 6,972 $ 6,972 148 Indian River County,Florida Budgetary Comparison Schedule LStreet Lighting Districts For the Year Ended September 30,2009 Variance Final Actual Positive Budget Amounts REVENUES (Negative) Taxes $ - $ 1,182 $ 1,182 Permits, fees and special assessments 178,553 181,699 3,146 Interest 11,982 16,272 4,290 Miscellaneous 3,206 2,669 (537) Total revenues 193,741 201,822 8,081 EXPENDITURES Transportation 227,604 186,497 41,107 Total expenditures 227,604 186,497 41,107 rExcess of revenues over(under)expenditures (33,863) 15,325 49,188 OTHER FINANCING USES Transfers out (6,980) (5,732) 1,248 Total other financing uses (6,980) (5,732) 1,248 Net change in fund balances (40,843) 9,593 50,436 Fund balances at beginning of year 40,843 482,834 441,991 Fund balances at end of year $ - $ 492,427 $ 492,427 149 .3 Indian River County,Florida Budgetary Comparison Schedule Spring Training Facility Bonds For the Year Ended September 30,2009 Variance Final Actual Positive Budget Amounts (Negative) REVENUES Taxes $ 345,166 $ 323,541 $ (21,625) Intergovernmental 871,667 919,602 47,935 Interest 22,800 41,017 18,217 Total revenues 1,239,633 1,284,160 44,527 EXPENDITURES Debt service: Principal 560,000 560,000 - Interest 679,633 665,033 14,600 Total expenditures 1,239,633 1,225,033 14,600 Net change in fund balances - 59,127 59,127 Fund balances at beginning of year - 1 4 g g y 15,674 1,415,674 Fund balances at end of year $ - $ 1,474,801 $ 1,474,801 150 Indian River County,Florida Budgetary Comparison Schedule Land Acquisition Bonds For the Year Ended September 30,2009 Variance Final Actual Positive REVENUES Budget Amounts (Negative) Taxes $ 7,028,716 $ 7,131,231 $ 102,515 Interest 76,307 151,894 75,587 Total revenues 7,105,023 7,283,125 178,102 EXPENDITURES Debt service: Principal 4,560,000 4,560,000 - Interest 2,323,355 2,283,725 39,630 Total expenditures 6,883,355 6,843,725 39,630 Excess of revenues over expenditures 221,668 439,400 217,732 OTHER FINANCING USES Transfers out (189,565) (128,243) 61,322 Total other financing uses (189,565) (128,243) 61,322 Net change in fund balances 32,103 311,157 279,054 Fund balances at beginning of year (32,103) 2,530,612 2,562,715 Fund balances at end of year $ - $ 2,841,769 $ 2,841,769 151 Indian River County,Florida Budgetary Comparison Schedule Dodgertown Capital Reserve For the Year Ended September 30,2009 Variance Final Actual Positive Budget Amounts (Negative) REVENUES Interest $ - $ - $ - Total revenues - - - EXPENDITURES Capital projects 2,000,000 298,548 1,701,452 Total expenditures 2,000,000 298,548 1,701,452 Excess of revenues over(under)expenditures (2,000,000) (298,548) 1,701,452 OTHER FINANCING USES Transfers out (33,562) (33,562) - Total other financing uses (33,562) (33,562) - Net change in fund balances (2,033,562) (332 110 1,701,452 Fund balances at beginning of year 2,033,562 2,033,562 - Fund balances at end of year $ - $ 1,701,452 $ 1,701,452 152 Indian River County,Florida Budgetary Comparison Schedule Optional Sales Tax For the Year Ended September 30,2009 Variance Final Actual Positive Budget Amounts (Negative) REVENUES Taxes $ 12,593,749 $ 13,023,095 $ 429,346 Permits, fees and special assessments - 19,862 19,862 Intergovernmental 8,652,240 4,371,860 (4,280,380) Interest 380,000 285,548 (94,452) Miscellaneous - 198 198 Total revenues 21,625,989 17,700,563 (3,925,426) EXPENDITURES Capital projects 33,392,837 10,136,664 23,256,173 Total expenditures 33,392,837 10,136,664 23,256,173 Excess of revenues over(under)expenditures (11,766,848) 7,563,899 19,330,747 OTHER FINANCING USES Transfers in 916,811 - (916,811) Transfers out (2,000,000) (2,000,000) - Total other financing uses (1,083,189) (2,000,000) (916,811) Net change in fund balances (12,850,037) 5,563,899 18,413,936 Fund balances at beginning of year 12,850,037 26,770,895 13,920,858 Fund balances at end of year $ - $ 32,334,794 $ 32,334,794 153 �Y � � O ,..,:. C� _ �. 1 1 �--i • ••• O h: � �7�• 1► INTERNAL SERVICE FUNDS Fleet Management- To account for the expenses incurred to repair and maintain the County's vehicles and equipment. Revenues are generated by charging user departments for maintenance of their vehicles and equipment. Self Insurance- To account for the expenses incurred for worker's compensation claims, general and auto liability and property damage, and employee health insurance claims. Revenues are generated by charges to the various departments and funds based on past experience and actuarial estimates. Geographic Information Systems- To account for the expenses incurred for maintaining the County's geographic information system. Revenues are generated by charging user departments for their use of the geographic information systems. 155 Indian River County,Florida „ Combining Statement of Net Assets Internal Service Funds September 30,2009 Geographic Fleet Self Information Management Insurance Systems Totals ASSETS Current assets: Cash and cash equivalents $ 178,077 $ 23,756,509 $ 1,776,752 $ 25,711,338 Accounts receivable-net 45,429 1,103,866 - 1,149,295 Due from other governments 96,664 - - 96,664 Interest receivable 582 47,463 4,387 52,432 Inventories 121,929 - - 121,929 Prepaid expenses 6,602 1,003,426 - 1,010,028 Total current assets 449,283 25,911,264 1,781,139 28,141,686 Non-current assets: Capital assets-depreciable 256,328 25,740 672,285 954,353 Accumulated depreciation (124,114) (21,235) (179,344) (324,693) Total non-current assets 132,214 4,505 492,941 629,660 Total assets 581,497 25,915,769 2,274,080 28,771,346 t LIABILITIES Current liabilities(payable from current assets): Accounts payable 108,443 94,446 7,165 210,054 Claims payable - 2,348,660 - 2,348,660 Accrued compensated absences 13,077 3,886 1,452 18,415 Total current liabilities(payable from current assets) 121,520 2,446,992 8,617 2,577,129 Non-current liabilities: Claims payable - 5,526,340 - 5,526,340 Accrued compensated absences 18,055 444 3,825 22,324 Total non-current liabilities 18,055 5,526,784 3,825 5,548,664 Total liabilities 139,575 7,973,776 12,442 8,125,793 NET ASSETS Invested in capital assets,net of related debt 132,214 4,505 492,941 629,660 Unrestricted 309,708 17,937,488 1,768,697 20,015,893 Total net assets $ 441,922 $ 17,941,993 $ 2,261,638 $ 20,645,553 156 Indian River County,Florida Combining Statement of Revenues,Expenses, and Changes in Fund Net Assets Internal Service Funds For the Year Ended September 30,2009 Geographic Fleet Self Information Management Insurance Systems Totals OPERATING REVENUES Charges for services: Vehicle maintenance $ 3,049,316 $ - $ - $ 3,049,316 Self insurance - 20,810,412 - 20,810,412 Geographic information systems - - 864,289 864,289 Total revenues 3,049,316 20,810,412 864,289 24,724,017 OPERATING EXPENSES Personal services 566,901 2,399,943 196,857 3,163,701 Material,supplies, services and other operating 2,581,128 15,383,853 145,088 18,110,069 Depreciation 20,847 3,540 85,834 110,221 Total operating expenses 3,168,876 17,787,336 427,779 21,383,991 Operating income(loss) (119,560) 3,023,076 436,510 3,340,026 NONOPERATING REVENUES Interest income 7,454 329,136 43,969 380,559 Gain on disposal of equipment 1,850 - - 1,850 Total nonoperating revenues 9,304 329,136 43,969 382,409 Income(loss)before transfers (110,256) 3,352,212 480,479 3,722,435 Transfers in - 56,412 - 56,412 Change in net assets (110,256) 3,408,624 480,479 3,778,847 Total net assets-beginning 552,178 14,533,369 1,781,159 16,866,706 Total net assets-ending $ 441,922 $ 17,941,993 $ 2,261,638 $ 20,645,553 L L 157 a Indian d River County,Florida Combining Statement of Cash Flows Internal Service Funds For the Year Ended September 30,2009 Geographic Fleet Self Information Management Insurance Systems Totals CASH FLOWS FROM OPERATING ACTIVITIES Cash received from customers $ 3,143,073 $ 20,732,507 $ 864,289 $ 24,739,869 Cash paid to suppliers for goods and services (2,617,936) (13,955,689) (207,924) (16,781,549) Cash paid to employees for services (567,039) (2,418,783) (191,580) (3,177,402) Net cash provided by(used in)operating activities (41,902) 4,358,035 464,785 4,780,918 CASH FLOWS FROM NONCAPITAL FINANCING ACTIVITIES Transfers - 56,412 - 56,412 Net cash provided by noncapital financing activities - 56,412 - 56,412 CASH FLOWS FROM CAPITAL AND RELATED FINANCING ACTIVITIES Proceeds from sale of capital assets 1,850 - - 1,850 Purchase of capital assets (100,595) - (4,018) (104,613) Net cash used in capital and related financing activities (98,745) - (4,018) (102,763) CASH FLOWS FROM INVESTING ACTIVITIES Interest and dividends on investments 8,327 324,429 42,623 375,379 Net cash provided by investing activities 8,327 324,429 42,623 375,379 Net increase(decrease)in cash and cash equivalents (132,320) 4,738,876 503,390 5,109,946 Cash and cash equivalents at beginning of year 310,397 19,017,633 1,273,362 20,601,392 Cash and cash equivalents at end of year $ 178,077 $ 23,756,509 $ 1,776,752 $ 25,711,338 Classified as: Current assets $ 178,077 $ 23,756,509 $ 1,776,752 $ 25,711,338 Totals $ 178,077 $ 23,756,509 $ 1,776,752 $ 25,711,338 rr 158 Indian River County,Florida Combining Statement of Cash Flows Internal Service Funds For the Year Ended September 30,2009 Geographic Fleet Self Information RECONCILIATION OF OPERATING Management Insurance Systems Totals INCOME(LOSS)TO NET CASH PROVIDED BY OPERATING ACTIVITIES Operating income(loss) $ (119,560) $ 3,023,076 $ 436,510 $ 3,340,026 Adjustments to reconcile operating income(loss)to net cash provided by operating activities: Depreciation 20,847 3,540 85,834 110,221 (Increase)Decrease in assets: Accounts receivable 19,918 (77,905) - (57,987) Due from other governments 73,839 - - 73,839 Inventories 64,641 - - 64,641 Deposits (6,602) 420,271 - 413,669 Increase(Decrease)in liabilities: Accounts payable (94,847) 27,893 (51,938) (118,892) Retainage payable - - (10,898) (10,898) Claims payable - 980,000 - 980,000 Accrued compensated absences (138) (18,840) 5,277 (13,701) Total adjustments 77,658 1,334,959 28,275 1,440,892 Net cash provided by(used in)operating activities $ (41,902) $ 4,358,035 $ 464,785 $ 4,780,918 NONCASH CAPITAL AND RELATED FINANCING ACTIVITIES Change in fair value of investments $ 1,858 $ 73,470 $ 13,996 $ 89,324 159 - � � ,�' ! �Y � � O -. . �:. C� � ~ � � ..: . C� . : . .,:: �• �� FIDUCIARY FUND Agency Fund- To account for the assets held solely in a custodial capacity by the County. 161 Indian River County,Florida Combining Statement of Changes in Assets and Liabilities Agency Fund For the Fiscal Year Ended September 30,2009 Balance Balance October 1, September 30, 2008 Additions Deductions 2009 ASSETS Cash and cash equivalents $ 12,724,450 $ 361,197,916 $ 358,000,291 $ 15,922,075 Investments 161,043 47,250 116,734 91,559 Accounts receivable - 110 - 110 Total assets $ 12,885,493 $ 361,245,276 $ 358,117,025 $ 16,013,744 LIABILITIES Accounts payable $ 89,058 $ 64,247,999 $ 63,780,416 $ 556,641 Due to other governments 5,537,567 313,803,076 313,516,170 5,824,473 Other deposits held in escrow 7,258,868 29,606,335 27,232,573 9,632,630 Total liabilities $ 12,885,493 $ 407,657,410 $ 404,529,159 $ 16,013,744 r r 162 Statistical Section This part of the Indian River County Comprehensive Annual Financial Report p rt presents detailed information as a context for understanding what the information in the financial statements, note disclosures and required supplementary information says about the County's overall financial health. Contents Pae s Financial Trends (Schedules 1 -5) 164-174 These schedules contain trend information to help the reader understand how the County's financial performance and well-being have changed over time. Revenue Capacity p ty (Schedules 6—9) 175-179 These schedules contain information to help the reader assess the County's most significant local revenue source,the property tax. Debt Capacity (Schedules 10—16) 180-189 These schedules present information to help the reader assess the affordability of the County's current levels of outstanding debt and the County's ability to issue additional debt in the future. Demographic and Economic Information (Schedules 17—18) 190-191 These schedules offer demographic and economic indicators to help the reader understand the environment within which the County's financial activities take place. Operating Information (Schedules 19—22) 192-203 These schedules contain service and infrastructure data to help the reader understand how the information in the County's financial report relates to the services the County provides and the activities it performs. Additional Bond Disclosures (Schedules 23—28) 204-210 These schedules provide information for required continuing disclosure for the water and sewer, golf course and spring training bonds. Sources: Unless otherwise noted, the information in these schedules is derived from the comprehensive annual financial report for the relevant year. The County implemented GASB Statement 34 in 2001; schedules presenting government- wide information include information beginning in that year. 163 Indian River County,Florida Net Assets by Component Last Nine Fiscal Years (accrual basis of accounting) 2001 2002 2003 2004 Governmental activities Invested in capital assets,net of related debt $ 214,622,489 $ 225,179,898 $ 227,795,289 $ 242,057,257 Restricted 100,742,230 113,252,580 112,083,712 128,024,220 Unrestricted 17,953,280 17,559,989 20,389,245 22,697,741 Total governmental activities net assets $ 333,317,999 $ 355,992,467 $ 360,268,246 $ 392,779,218 Business-type activities Invested in capital assets,net of related debt $ 97,701,866 $ 106,004,641 $ 113,354,198 $ 122,280,348 Restricted 26,758,894 31,179,151 42,971,494 57,825,011 Unrestricted 43,816,852 45,137,431 47,079,296 44,084,834 Total business-type activities net assets $ 168,277,612 $ 182,321,223 $ 203,404,988 $ 224,190,193 Primary government Invested in capital assets,net of related debt $ 312,324,355 $ 331,184,539 $ 341,149,487 $ 364,337,605 Restricted 127,501,124 144,431,731 155,055,206 185,849,231 Unrestricted 61,770,132 62,697,420 67,468,541 66,782,575 Total primary government net assets $ 501,595,611 $ 538,313,690 $ 563,673,234 $ 616,969,411 (A) Completed construction and renovations for beach renourishment, county administration buildings, emergency operations center,five fire stations,county park improvements,and the purchase of environmentally sensitive lands. (B) The County redefined restricted and unrestricted net assets to reflect special revenue funds from unrestricted and restricted. r 164 Schedule 1 2005 2006 2007 2008 2009 $ 264,193,976 $ 278,213,361 $ 374,501,758 (A) $ 445,541,175 461,709,848 150,019,583 158,046,966 173,236,941 (B) 163,119,085 158,306,364 60,737,524 121,561,389 60,726,026 (B) 55,081,576 55,914,407 $ 474 951,083 $ 557,821,716 $ 608,464,725 $ 663,®,836 675,® $ 134,402,945 $ 152,168,135 $ 174,540,682 $ 206,069,196 223,273,040 81,084,337 89,071,967 83,840,471 75,814,407 51,021,928 52,553,913 53,751,547 47,338,783 24,624,779 37,122,462 $ 268,041,195 $ 294,991,649 $ 305,719,936 $ 306 508,382 311,® $ 398,596,921 $ 430,381,496 $ 549,042,440 $ 651,610,371 684,982,888 231,103,920 247,118,933 257,077,412 238,933,492 209,328,292 113,291,437 175,312,936 108,064,809 79,706,355 93,036,869 $ 742,992,278 $ 852,®$ 914 184,661 $ 970,250,218� 987,348,049 165 Indian River County,Florida Changes in Net Assets Last Nine Fiscal Years (accrual basis of accounting) 2001 2002 2003 2004 Expenses Governmental activities: General government $ 13,756,310$ 17,942,122 $ 20,323,241 $ 23,287,533(C) Public safety 42,896,286 45,186,455 46,409,761 54,052,726(C) Physical environment 2,145,214 1,648,446 791,383 1,039,550 Transportation 13,525,659 14,878,771 16,264,468 21,335,262(C) Economic environment 1,358,025 357,911 587,227 639,826 Human service 4,612,841 5,975,775 6,165,603 7,664,422(C) Cultural/Recreation 10,631,008 8,157,505 8,711,251 9,616,323(C) Court related 5,151,347 5,472,095 6,144,728 6,221,983 Interest on long-term debt 587,004 1,710,405 1,549,957 1,313,340 Total governmental activities expenses 94,663,694 101,329,485 106,947,619 125,170,965 Business-type activities: Water and sewer 22,459,042 23,240,123 25,015,125 26,907,959 Solid waste 8,245,056 8,043,106 8,589,141 14,103,641(C) Golfcourse 2,894,314 2,777,519 2,842,907 2,806,115 Other 1,409,610 1,882,038 2,033,754 2,532,617 Total business-type activities expenses 35,008,022 35,942,786 38,480,927 46,350,332 Total primary government expenses $ 129,671,716$ 137,272,271 $ 145,428,546 $ 171,521,297 Proaram Revenues Governmental activities: Charges for services: General government $ 6,357,015$ 5,349,797 $ 6,513,557 $ 7,593,486 Public safety 3,626,767 4,120,093 4,288,357 3,927,664 Physical environment 97,687 64,314 29,260 92,354 Transportation 3,893,294 4,476,914 5,584,999 11,182,015 Human service 69,594 186,290 302,998 604,379 Cultural/Recreation 1,094,588 473,043 776,829 813,827 Court related 901,485 1,515,840 1,458,688 1,449,771 Operating grants and contributions 5,122,151 5,425,369 5,175,499 9,270,478 Capital grants and contributions 3,756,327 4,818,626 19,908,254(A) 11,784,511(C) Total governmental activities program revenues 24,918,908 26,430,286 44,038,441 46,718,485 Business-type activities: Charges for services: Water and sewer 18,917,518 19,962,496 21,210,935 22,984,883 Solid waste 9,628,155 9,897,222 10,187,432 11,160,368 Golf course 3,033,997 2,897,502 3,112,087 3,099,287 Other 1,673,916 2,009,737 2,432,420 3,202,380 Operating grants and contributions 111,252 - 271,662 5,760,512 Capital grants and contribution 9,973,352 11,256,039 19,796,906(B) 19,138,278(B) Total business-type activities program revenues 43,338,190 46,022,996 57,011,442 65,345,708 Total primary government program revenues $ 68,257,098$ 72,453,282 $ 101,049,883 $ 112,064,193 Notes: (A)County received grants for the purchase of environmentally sensitive lands and beach erosion;recorded as capital assets. (B)Contributions for water and sewer services by developers due to significant increase in County population. (C)Increase in revenue and related expenses due to hurricane Frances and Jeanne in 2004;and hurricane Wilma in 2005. (D)Impact fees increased with building boom. (E)Environmentally sensitive lands purchased with bond proceeds. (F)Significant increase in SHIP programs due to population growth and building boom in 2005. (G)Issued new Limited G.O.B.debt for$48,600,000. (Il)Completed sections of beach renourishment program. (I)Grants received for beach renourishment,environmental sensitive lands,and various road projects. (J)Includes adjustment for prior years'public safety expenses. (K)Includes full year impact of increase in personnel,raises,and the depreciation and operating cost of new jail. (L)Piper incentive of$4 million. (M)Increase in operating costs due to maintenance projects. (N)Received$16 million grant reimbursements for physical environment grants including beach restoration and stormwater. (0)Increase due to$5 million contribution towards joint use library and increased depreciation for beach restoration projects. (P)Decrease due to reduced impact fees collections(slowdown in construction activity). 166 Schedule 2 2005 2006 2007 2008 2009 $ 18,165,441 $ 14,642,124 $ 15,506,424 $ 7,416,850 25,837,007 54,271,542 58,578,985 42,050,455(.1) 70,973,212(K) 71,221,082 2,850,738 8,490,570(E) 34,998,512(E) 27,974,837 813,580 21,726,741 22,011,006 26,173,989 25,742,974 23,711,653 696,448 1,077,731 950,024 4,583,763(L) 661,897 7,385,726 12,270,899(F) 13,925,599 12,590,578 8,453,562 10,775,291 11,546,217 31,196,252(13) 9,510,029 24,559,117(0) 5,704,361 6,014,793 6,870,466 7,265,471 6,765,203 1,246,237 2,315,372(G) 3,220,907(G) 2,764,803 2,906,802 122,822,525 136,947,697 174,892,628 168,822,517 164,929,903 30,260,577 33,387,825 37,518,226 41,354,025(K 37,523,097 19,156,896(C) 11,558,323 10,331,431 11,355,697 10,407,437 2,939,321 3,058,307 3,084,837 2,775,497 2,937,141 3,768,301 4,202,588 3,703,658 3,010,668 2,168,894 56,125,095 52,207,043 54,638,152 58,495,887 53,036,569 $ 178,947,620 $ 189,154,740 $ 229,530,780 $ 227,318,404 217,966,472 $ 8,779,557 $ 10,437,774 $ 7,957,770 $ 6,943,354 6028321 4,712,594 7,151,354 5,728,644 5,754,082 5,884,118 631,456 854,219 1,447,553 972,865 636,219 37,384,003(D) 16,619,853 5,618,055 5,478,734 2,157,456(P) 821,811 754,916 545,305 331,856 204,299 800,555 5,480,612 2,425,679 1,730,471 1,322,785 2,294,908 2,466,882 2,800,680 2,971,093 2,375,430 16,310,024(C) 13,420,891 25,561,608(1) 15,227,659 11,077,388 6,069,586 13,081,116 13,441,915 29,165,641(1) 15,032,731 77,804,494 70,267,617 65,527,209 68,575,755 44,718,747 25,579,512 28,029,062 27,541,849 27,876,971 26,957,649 16,874,618 13,741,864 11,946,566 10,758,812 9,713,883 3,247,815 3,306,424 3,374,772 3,313,994 3,279,135 4,535,869 4,746,668 3,250,585 2,726,888 1,572,693 8,518,757 1,235,413 72,828 217,751 1,194,994 38,112,182(B) 26,781,118(B) 9,729,371 10,802,859 3,748,585 96,868,753 77,840,549 55,915,971 55,697,275 46,466,939 $ 174,673,247 $ 148,108,166 $ 121,443,180 $ 124,273,030 91,185,686 Continued 167 Indian River County,Florida Changes in Net Assets Last Nine Fiscal Years (accrual basis of accounting) 2001 2002 2003 2004 Net(Expense)/Revenue Governmental activities $ (69,744,826)$ (74,899,199) $ (62,909,178) $ (78,452,480) (A) Business-type activities 8,330,168 10,080,210 18,530,515 (B) 18,995,376 (B) Total primary government net expenses $ (61,414,658)$ (64,818,989)$ (44,378,663) $ (59,457,104) General Revenues and Other Chanes in Net Assets Governmental activities: Property taxes,levied for general purposes $ 50,825,605 $ 55,407,180 $ 60,139,514 $ 67,701,525 Property taxes,levied for debt service 1,570,336 1,581,362 2,595,265 2,427,908 Sales and use taxes 15,620,653 16,983,678 17,162,979 18,825,771 Franchise fees 6,255,747 5,797,407 6,222,326 6,720,166 State shared revenues 12,228,528 12,914,452 10,605,656 11,608,557 Insurance recoveries - - - - Interest earnings 10,637,239 5,189,432 2,787,928 2,536,347 Miscellaneous 697,932 1,103,457 1,761,754 1,336,789 Transfers (240,665) (1,403,301) (157,870) (193,611) Total governmental activities 97,595,375 97,573,667 101,117,552 110,963,452 Business-type activities: State shared revenues - - - - Interest earnings 6,293,439 3,790,253 2,332,013 1,590,203 Miscellaneous 85,496 15,100 63,367 6,015 Transfers 117,130 158,048 157,870 193,611 Total business-type activities 6,496,065 3,963,401 2,553,250 1,789,829 Total primary government $ 104,091,440 $ 101,537,068 $ 103,670,802 $ 112,753,281 Chanee in Net Assets Governmental activities $ 27,850,549 $ 22,674,468 $ 38,208,374 $ 32,510,972 Business-type activities 14,826,233 14,043,611 21,083,765 20,785,205 Total primary government change in net assets $ 42,676,782 $ 36,718,079 $ 59,292,139 $ 53,296,177 Notes: (A)Hurricanes Frances and Jeanne FEMA reimbursements had not yet been received. (B)Growth in water and sewer services due to expansion of County population. (C)Taxable values increased by$2 billion. (D)Transfers for proportionate share of new county administration building. 168 Schedule 2-Continued 2005 2006 2007 2008 2009 $ (45,018,031) $ (66,680,080) $ (109,365,419) $ (100,246,762) $ (120,211,156) 40,743,658 (B) 25,633,506 1,277,819 (2,798,612) (6,569,630) $ (4,274,373) $ (41,046,574) $ (108,087,600) $ (103,045,374) $ (126,780,786) $ 71,698,850 $ 82,448,807C ( ) $ 92,592,309 $ 92,483,561 $ 87,265,989 2,480,497 2,465,462 7,094,485 7,343,180 7,131,231 21,892,558 21,855,885 20,738,502 20,088,899 19,292,179 7,941,020 9,318,394 9,732,773 9,443,399 9,670,169 14,022,896 13,043,670 12,368,421 11,596,227 11,227,450 3,666,960 1,104,116 - - 4,444,772 12,163,993 16,004,890 10,347,019 5,747,573 1,235,708 2,089,540 1,583,343 2,170,033 2,018,901 (193,365) 5,060,846 (D) (106,295) 2,051,555 (7,452,905) 127,189,896 149,550,713 160,008,428 155,523,873 134,900,587 417,500 2,861,308 6,335,240 9,209,517 5,553,239 3,685,805 52,671 42,554 134,656 85,374 7,893 193,365 (5,060,846) (D) 106,295 (2,051,555) 7,452,905 3,107,344 1,316,948 9,450,468 3,587,058 11,564,103 $ 130,297,240 $ 150,867,661 $ 169,458,896 $ 159,110,931 $ 146,464,690 $ 82,171,865 $ 82,870,633 $ 50,643,009 $ 55,277,111 $ 14,689,431 43,851,002 26,950,454 10,728,287 788,446 4,994,473 $ 126,022,867 $ 109,821,087 $ 61,371,296 $ 56,065,557 $ 19,683,904 169 River County,Florida Indian ty, Fund Balances, Governmental Funds Last Ten Fiscal Years (modified accrual basis of accounting) 2000 2001 2002 2003 General Fund Reserved $ - $ - Unreserved 16,785,009 17,481,844 18,244,725 20,104,115 Total general fund $ 16,785,009 $ 17,481,844 $ 18,244,725 $ 20,104,115 All other governmental funds Reserved $ 32,004,421 $ 49,037,252 $ 40,013,059 $ 40,667,031 Unreserved,reported in: Special revenue funds 46,426,470 56,582,715 75,879,893 69,317,385 Debt service funds (73,536) - - - Capital projects funds 337,915 - - Trust funds(A)(B) 452,492 - - Total all other governmental funds $ 79,147,762 $ 105,619,967 $ 115,892,952 $ 109,984,416 4 137 677 130 088 531 Total governmental funds $ 95,932,771 $ 123,101,811 $ 13 $ , Notes: (A) Inmate Welfare Trust Fund became a special revenue fund in FY 2001 with the imvlementation of GASB 34. 170 Schedule 3 2004 2005 2006 2007 2008 2009 $ - $ - $ - $ - $ 8,000,000 $ 8,000,000 20,623,340 30,152,425 45,300,882 50,321,956 44,874,259 47,616,773 $ 20,623,340 $ 30,152,425 $ 45,300,882 $ 50,321,956 $ 52,874,259 $ 55,616,773 $ 47,458,489 $ 50,257,972 $ 38,075,117 $ 23,047,708 $ 49,667,320 $ 53,252,040 74,344,120 115,822,479 183,318,603 149,564,925 96,950,614 91,600,421 $ 121,802,609 $ 166,080,451 $ 221,393,720 $ 172,612,633 $ 146,617,934 $ 144,852,461 $ 142,425,949 $ 196,232,876 $ 266,694,602 $ 222,934,589 $ 199,492,193 $ 200,469,234 171 Indian River County,Florida r Changes in Fund Balances,Governmental Funds Last Ten Fiscal Years (modified accrual basis of accounting) 2000 2001 2002 2003 Revenue Taxes $ 69,537,158 $ 73,553,625 $ 80,488,343 $ 86,120,084 Permits,fees,and special assessments 4,004,370 4,293,579 4,746,172 5,499,533 Intergovernmental 18,908,166 18,764,102 20,802,982 35,213,140 Charges and services 9,659,007 11,037,594 11,368,399 13,683,108 Judgments,fines and forfeits 1,332,950 1,251,098 1,421,542 1,584,737 Interest 6,562,067 9,333,122 5,007,150 2,999,915 Miscellaneous 1,292,825 1,594,863 2,362,780 1,964,177 Total Revenues 111,296,543 119,827,983 126,197,368 147,064,694 Expenditures Current: General government 14,069,358 14,834,937 16,979,694 18,446,787 Public safety 39,734,506 42,872,181 45,352,323 47,565,048 Physical environment 4,780,305 1,312,972 1,473,749 17,613,489 Transportation 12,663,766 11,801,892 16,686,374 19,442,909 Economic environment 259,354 1,351,831 347,096 583,850 Human service 4,928,117 4,317,086 5,756,579 6,178,917 Culture/recreation 7,326,459 8,781,914 9,117,900 18,378,068 Court related 4,565,674 5,323,388 5,802,798 5,998,260 Debt service: Principal 5,305,502 1,255,352 2,229,201 2,881,492 Interest and fiscal charges 890,236 604,358 1,621,178 1,639,145 Capital outlay 7,563,130 17,075,909 20,767,383 12,228,005 Total Expenditures 102,086,407 109,531,820 126,134,275 150,955,970 Excess of revenues over (under)expenditures 9,210,136 10,296,163 63,093 (3,891,276) Other Financing Sources(Uses) Debt issuance - 16,952,777 11,000,000 7,800,000 Payments to escrow agent - - - (7,800,000) Payments from capital leases 78,516 160,765 275,000 - Transfers out (118,275) (240,665) (302,227) (157,870) Transfers in Total other financing sources(uses) (39,759) 16,872,877 10,972,773 (157,870) Net change in fund balances $ 9,170,377 $ 27,169,040 $ 11,035,866 $ (4,049,146) Debt service as a percentage of noncapital expenditures 7.2% * 2.1% 4.0% 4.4% *NotP ossible to determine capital expenditures in functional expenditure categories. 172 Schedule 4 2004 2005 2006 2007 2008 2009 $ 95,675,370 $ 104,012,925 $ 116,088,548 $ 130,158,069 $ 119,915,640 $ 113,689,399 11,788,168 38,043,246 26,285,557 8,397,437 15,888,780 12,433,598 26,588,303 35,973,818 38,261,489 54,252,074 49,065,955 34,305,682 14,282,587 18,151,546 18,204,600 18,997,529 18,678,544 16,852,653 1,508,786 1,715,875 2,069,593 2,403,093 2,137,413 1,792,517 1,999,574 4,083,164 10,574,489 15,777,318 10,052,801 5,721,869 1,791,613 1,398,166 4,597,369 3,495,610 2,449,035 2,489,532 153,634,401 203,378,740 216,081,645 233,481,130 218,188,168 187,285,250 19,996,339 20,107,020 21,831,839 24,815,255 25,323,595 22,566,113 55,792,130 57,045,359 65,975,870 72,907,822 73,982,636 74,813,164 1,751,551 2,989,117 8,955,262 34,324,331 28,111,033 910,213 21,928,790 21,285,597 30,610,413 49,503,680 50,231,090 38,111,512 627,914 713,019 1,054,239 968,227 4,579,574 653,547 7,185,411 7,270,391 12,470,222 13,862,463 12,619,575 8,621,760 13,179,751 15,062,134 16,380,438 23,751,173 21,068,267 15,450,688 6,210,614 5,630,734 5,915,727 6,649,724 6,940,682 6,620,830 2,394,142 2,239,663 2,615,659 4,870,876 5,069,591 5,120,000 1,333,392 1,255,837 1,790,431 3,255,767 2,803,585 2,948,758 10,994,900 15,779,577 37,848,475 42,489,997 11,617,867 10,435,212 141,394,934 149,378,448 205,448,575 277,399,315 242,347,495 186,251,797 12,239,467 54,000,292 10,633,070 (43,918,185) (24,159,327) 1,033,453 49,996,735- _ 291,562 - 264,467 126,000 0 (193,611) (193,365) (236,067) (19,736,023) (13,254,013) (14,366,145) 10,067,988 19,629,728 13,844,944 14,309,733 97,951 (193,365) 59,828,656 158,172 716,931 (56,412) $ 12,337,418 $ 53,806,927 $ 70,461,726 $ (43,760,013) $ (23,442,396) $ 977,041 3.1% 3.0% 3.4% 4.8% 5.0% 5.4% 173 Indian River County,Florida Tax Revenues by Source,Governmental Funds Last Ten Fiscal Years (modified accrual basis of accounting) Schedule 5 Fiscal Year Property(A) Sales&Use Tourist Franchise(B) Gasoline Other Total 2000 $ 49,233,150 $ 10,546,759 $ 1,114,916 $ 5,615,427 $ 3,026,906 $ - $ 69,537,158 2001 52,395,941 11,142,006 1,408,046 6,255,747 2,351,885 - 73,553,625 2002 56,988,542 11,399,491 1,410,409 5,797,407 3,967,345 925,149 80,488,343 2003 62,734,779 11,678,272 1,286,885 6,222,326 3,222,742 975,080 86,120,084 2004 70,129,433 12,850,023 1,443,271 6,720,166 3,497,894 1,034,583 95,675,370 2005 74,179,347 15,582,689 1,675,781 7,941,020 3,573,036 1,061,052 104,012,925 2006 84,914,269 15,736,078 1,517,360 9,318,394 3,526,774 1,075,673 116,088,548 2007 99,686,794 14,549,834 1,449,083 9,732,773 3,482,514 1,257,071 130,158,069 2008 99,826,741 13,714,228 1,584,514 - 3,218,705 1,571,452 119,915,640 2009 94,397,220 13,023,095 1,294,163 - 3,369,962 1,604,959 113,689,399 (A)The County's primary source of revenue is property taxes,amounting to 83 percent of Governmental Funds tax revenues in 2009. Consequently,supplemental required schedules are provided only for property tax revenues. (B)Effective 10/01/07,the State of Florida changed its uniform accounting manual to remove franchise fees from the taxes designation. 174 Indian River County,Florida Assessed Value and Actual Value of Taxable Property Last Ten Fiscal Years Schedule 6 Real Personal Less: Total Taxable Total Fiscal Property Property Total Tax-Exempt Assessed Direct Year Actual Value Actual Value Actual Value Property Value Tax Rate 2000 $ 8,670,864,496 $ 764,851,686 $ 9,435,716,182 $ 2,440,619,325 $ 6,995,096,857 5.5487 2001 9,109,672,314 725,390,231 9,835,062,545 2,394,165,810 7,440,896,735 5.5408 2002 10,539,705,283 707,941,621 11,247,646,904 2,706,441,764 8,541,205,140 5.5234 2003 11,985,128,952 694,305,280 12,679,434,232 3,178,543,019 9,500,891,213 5.4713 2004 13,547,372,018 693,374,322 14,240,746,340 3,556,717,407 10,684,028,933 5.5181 2005 15,716,463,269 699,716,008 16,416,179,277 4,236,183,618 12,179,995,659 5.1563 2006 19,265,033,998 712,011,582 19,977,045,580 5,734,060,645 14,242,984,935 4.9173 2007 25,458,676,130 755,187,275 26,213,863,405 8,366,701,791 17,847,161,614 4.3250 2008 25,155,652,635 782,529,196 25,938,181,831 7,357,884,893 18,580,296,938 4.1037 2009 24,141,420,963 739,467,578 24,880,888,541 7,431,618,464 17,449,270,077 4.1493 Source: Indian River County Property Appraiser;values are established as of January 1 of the previous calendar year, i.e., January 1,2008 taxable values apply to the fiscal year ending in 2009. The actual value is based upon market values in the area. Property is assessed at the actual values less various exemptions for homestead, age, disability,widows, religious,charitable,educational and governmental situations. Total taxable values are also presented on schedules 8 and 11. 175 Indian River County,Florida Property Tax Rates Direct and Overlapping Tax Rates Last Ten Fiscal Years 2000 2001 2002 2003 County direct rate General fund 4.0855 4.1014 4.0501 3.8729 Municipal service 1.4632 1.4394 1.4733 1.5984 Total direct rate(A) 5.5487 5.5408 5.5234 5.4713 County-wide district school board rate 9.6140 9.5570 9.0820 8.7320 Other Countv-wide rates Emergency Management Services District 2.4553 2.4913 2.3660 2.2750 Land acquisition bond 0.2396 0.2165 0.1947 0.2839 Total other County-wide rate 2.6949 2.7078 2.5607 2.5589 Total County-wide rate 17.8576 17.8056 h' �) 17.1661 16.7622 City rates Fellsmere 5.7500 5.7500 5.7500 5.7500 Indian River Shores 1.3890 1.4280 1.4284 1.4370 Sebastian 5.0000 5.0000 4.5904 4.5904 Orchid 2.1998 1.6793 1.3430 0.9354 Vero Beach 2.1425 2.1425 2.1425 2.1425 Average of cities rates 3.2963 3.2000 3.0509 2.9711 Other special district rates 1.5209 1.6290 1.6105 1.9008 (A)Per Florida State Statute 200.071,no ad valorem tax millage shall be levied against real property and tangible personal property by counties in excess of 10 mills, except for voted levies. (B)Total County-wide rate is borne by all property owners within the County boundaries. Source: Indian River County Property Appraiser 176 Schedule 7 2004 2005 2006 2007 2008 2009 3.8377 3.6233 3.5204 3.1914 3.0202 3.0689 1.6804 1.5330 1.3969 1.1336 1.0835 1.0804 5.5181 5.1563 4.9173 4.3250 4.1037 4.1493 8.7100 8.4990 8.2400 7.4430 7.5380 7.0400 2.1871 1.9836 1.9911 1.7639 1.7201 1.7148 0.2344 0.2106 0.1789 0.4108 0.4082 0.4220 2.4215 2.1942 2.1700 2.1747 2.1283 2.1368 16.6496 15.8495 15.3273 13.9427 13.7700 13.3261 5.7500 5.7500 5.7500 5.7500 4.4301 4.4300 1.4730 1.4730 1.4730 1.4730 1.3923 1.3923 4.5904 4.5904 3.9325 3.0519 2.9917 3.3456 0.8954 0.7508 0.6900 0.4525 0.4494 0.4550 2.1425 2.1425 2.2925 2.1425 1.9367 1.9367 2.9703 2.9413 2.8276 2.5740 2.2400 2.3119 2.1548 1.8923 1.6082 1.4795 1.3817 1.5362 177 Indian River County,Florida Principal Property Taxpayers Year 2009 and Year 2000 Schedule 8 2009 2000 Real Percentages Real Percentages Property of Total Property of Total Assessed Assessed Assessed Assessed Taxpayer Valuation Rank Valuation Valuation Rank Valuation Florida Power&Light 3 108,569,583 1 0.62 $ 73,782,139 2 1.05 Disney Vacation Dev. Inc. 76,637,600 2 0.44 61,279,822 3 0.88 BellSouth Telecommunications 58,013,479 3 0.33 103,928,471 1 1.49 I.R.Mall Association,Ltd. 51,193,160 4 0.29 53,035,650 4 0.76 Adult Community Total Services 49,538,330 5 0.28 42,623,792 5 0.61 Johns Island Club Inc. 46,423,148 6 0.27 28,816,277 7 0.41 Windsor Properties 42,558,736 7 0.24 27,782,731 9 0.40 Shelby Homes at Millstone Inc. 34,001,320 8 0.19 - Health Care Reit Inc 29,353,840 9 0.17 Fellsmere Joint Venture 28,994,631 10 0.17 - _ Horizon Outlet Center Ltd. - - 28,610,819 8 0.41 AT&T - - 28,817,278 6 0.41 Wal-Mart Stores - - 27,711,628 10 0.40 Total Principal Property Taxpayers Real Property Assessed Valuation $ 525,283,827 3.01% $ 476,388,607 6.81% Total County Taxable Valuation $ 17,449,270,077 $ 6,995,096,857 (from schedule 6) Source: Indian River County Property Appraiser raiser P 178 a Indian River County,Florida Property Tax Levies And Collections Last Ten Fiscal Years Schedule 9 Percent of Percent of Total Current Current Tax Delinquent Total Total Tax Tax Tax Collections Tax Tax Collections Year Levy Collections To Tax Levy Collections(1) Collections To Tax Levy 2000 $ 50,599,662 $ 48,936,993 96.71% $ 108,698 $ 49,045,691 96.93% 2001 53,727,318 52,148,971 97.06 158,661 52,307,632 97.36 2002 59,184,019 56,856,770 96.07 95,364 56,952,134 96.23 2003 65,289,186 62,668,552 95.99 7,797 62,676,349 96.00 2004 72,306,331 69,906,761 96.68 176,345 70,083,106 96.93 2005 76,748,078 73,991,702 96.41 111,220 74,102,922 96.55 2006 87,754,823 84,736,835 96.56 34,344 84,771,179 96.60 2007 102,986,045 99,404,127 96.52 61,566 99,465,693 96.58 2008 103,700,766 99,716,496 96.16 48,241 99,764,737 96.20 2009 97,439,623 94,107,423 96.58 273,002 94,380,425 96.86 All taxes are due and payable on November 1 of each year or as soon thereafter as the assessment roll is certified and delivered to the Tax Collector. All unpaid taxes become delinquent on April 1 following the year in which they are assessed. Discounts are allowed for early payment at the rate of 4%in the month of November,3%in the month of December,2%in the month of January and 1%in the month of February. The taxes paid in March are without discount. (I)On or prior to June 1 following the tax year,certificates are sold for all delinquent taxes on real property. After the sale,tax certificates bear interest of 18%per year or at any lower rate bid by the buyer. Application for a tax deed on any unredeemed tax,certificates may be made by the certificate holder after a period of two years. Unsold certificates are held by the County. Delinquent taxes on personal property bear interest of 18%per year until the tax is satisfied either by seizure and sale of the property or by the seven year statute of limitations. The County does not accrue its portion of the County-held certificates due tc the immaterial amount. Source:Indian River County Property Appraiser and Tax Collector provided the above information;consequently,the reported collections on this schedule will vary from the actual collections as reported on Schedule 5. The Tax Collector does not report the interest earnings on the collections,however,the Board includes those interest earnings as part of the total tax collection. 179 Indian River County,Florida Ratios of Outstanding Debt by Type Last Ten Fiscal Years Governmental Activities Business-type Activities General Spring Training Recreational Obligation Facility Bonds Revenue Capital Water& Sewer Year Bonds(A) Capital Leases 2001 Series Bonds (B) Leases Bonds(C) 2000 $ 11,100,000 $ 1,313,562 $ - $ 7,815,000 $ 165,105 $ 77,830,000 2001 10,215,000 943,210 16,810,000 7,470,000 84,981 76,215,000 2002 19,810,000 754,009 16,450,000 7,110,000 - 74,525,000 2003 17,725,000 417,518 15,990,000 6,735,000 - 72,760,000 2004 16,080,000 434,938 15,515,000 6,045,000 - 70,905,000 2005 14,385,000 380,275 15,025,000 5,595,000 263,237 64,880,000 2006 61,255,000 - 14,520,000 5,135,000 193,786 62,490,000 2007 57,160,000 8,591 14,000,000 4,660,000 110,025 59,985,000 2008 52,770,000 - 13,455,000 4,175,000 28,126 57,365,000 2009 48,210,000 - 12,895,000 3,685,000 - 52,720,000 (A)General Obligation Bonds include Series 1995, Series 2001, Refunding Series 2003, and Limited General Obligation Bonds, Series 2006. This information is also presented on Schedule 11. (B)Recreational Revenue Bonds, Series 1993 and Recreational Revenue Refunding Bonds, Series 2003. (C)Water& Sewer bonds include Series 1993, Series 1996, and Refunding Series 2005. (D)Information not available Source for per capita income is University of Florida, Bureau of Economic and Business Research. i 180 L Schedule 10 Component Unit Percentage Total of Total Debt Debt Percentage Debt Primary to Personal Per Housing of Personal Per Government Income Capita Authority Income Capita $ 98,223,667 2.33% $ 870 $ 4,080,400 0.10% $ 36 111,738,191 2.45 966 3,901,400 0.09 34 118,649,009 2.54 1,004 3,720,400 0.08 31 113,627,518 2.33 938 3,538,400 0.07 29 108,979,938 1.86 859 3,354,400 0.06 26 100,528,512 1.57 773 3,168,400 0.05 24 143,593,786 2.05 1,062 3,168,400 0.05 23 135,923,616 1.74 973 2,790,400 0.04 20 127,793,126 (D) 902 2,599,400 (D) 18 117,510,000 (D) 831 3,435,779 (D) 24 181 Indian River County,Florida Ratio of Net General Bonded Debt Outstanding to Taxable Value and Net Bonded Debt per Capita Last Ten Fiscal Years Schedule 1 I Ratio Of Gross General Debt Service Net Bonded Net Bonded Fiscal Taxable Obligation Monies Net Bonded Debt To Debt Per Year Population(A) Value(A) Bonded Debt Available(A) Debt Taxable Value Capita 2000 112,947 $ 6,995,948,262 $ 11,100,000 $ 1,357,461 $ 9,742,539 0.0014 86.2600 2001 115,716 7,440,896,735 10,215,000 1,609,998 8,605,002 0.0012 74.3600 2002 118,149 8,541,205,140 19,810,000 1,085,999 18,724,001 0.0022 158.4800 2003 121,274 9,500,891,213 17,725,000 684,016 17,040,984 0.0018 140.5200 2004 126,829 1004,028,933 16,080,000 867,776 15,212,224 0.0014 119.9400 2005 130,043 12,179,995,659 14,385,000 1,106,353 13,278,647 0.0011 102.1100 2006 135,262 14,242,984,935 61,255,000 1,375,837 59,879,163 0.0042 442.6902 2007 139,757 17,847,161,614 57,160,000 1,956,189 55,203,811 0.0031 394.9985 2008 141,667 18,580,296,938 52,770,000 2,530,612 50,239,388 0.0027 354.6301 2009 141,475 17,449,270,077 48,210,000 2,841,769 45,368,231 0.0026 320.6802 (A) Columns are provided as additional information for General Obligation Bonds nds (G.O.B.), Series 2001 and 2003 and Limited G.O.B., Series 2006.Total taxable values are also presented in Schedule 6. Gross G.O.B.debt is also presented on Schedule 10. Source of population data is the University of Florida,Bureau of Economic and Business Research. 182 Indian River County,Florida Computation of Legal Debt Margin September 30, 2009 Schedule 12 Computation of the Legal Debt Margin is omitted because the Constitution of the State of Florida(F.S.200.181)and Indian River County set no legal debt limit. 183 Indian River County,Florida Direct and Overlapping Governmental Activities Debt September 30 2009 Schedule 13 Governmental Unit Share of Debt Percentage Overlapping Debt repaid with property taxes: Outstanding Applicable Debt Indian River County General Obligation Bonds,Series 2001 $ 4,234,352 (A) 100% $ 4,234,352 Indian River County General Obligation Bonds,Refunding Series 2003 860,381 (B) 100 860,381 Indian River County Limited General Obligation Bonds,Series 2006 40,273,498 (C) 100 40,273,498 Indian River County School District General Obligation Bonds,2002 Refunding 12,770,000 (D) 100 12,770,000 Indian River County School District General Obligation Bonds,2003 Refunding 4,810,000 (D) 100 4,810,000 Other debt: Indian River County School District Certificates of Participation 113,965,000 (D) 100 113,965,000 Indian River County School District Capital Lease Payable 1,849,599 (D) 100 1,849,599 Indian River County School District Estimated Long-Term Claims Payable 6,596 (D) 100 6,596 Indian River County School District State School Bonds,Series 2008-A 1,180,000 (D) 100 1,180,000 Indian River County School District State School Bonds,Series 2005-A 5,645,000 (D) 100 5,645,000 Total overlapping debt: $ 185,594,426 (A)Ending General Obligation,Series 2001 balance $ 5,955,000 Less:Fund balance available in debt service fund (1,720,648) Net Debt Outstanding 4,234,352 (B)Ending General Obligation,Refunding Series 2003 balance 1,210,000 Less:Fund balance available in debt service fund (349,619) Net Debt Outstanding 860,381 (C)Ending Limited General Obligation,Series 2006 balance 41,045,000 Less:Fund balance available in debt service fund (771,502) Net debt outstanding 40,273,498 Total direct debt of County $ 45,368,231 (D) Indian River County School District,as of June 30,2009 Source:Information on outstanding debt provided by the Indian River County School District Finance Department. Note:Overlapping debt is borne by all property owners within the County boundaries. 184 �1TY � � O `'r: �+► ti 00 . : �� o ., ,;; '� '+� �� Indian River County,Florida Pledged Revenue Coverage Water and Sewer Revenue Bonds (Series 1993A, 1996,2005,2009) Last Ten Fiscal Years 2000 2001 2002 2003 Uniform Charges Water sales $ 8,680,435 $ 9,101,553 $ 9,373,866 $ 10,108,045 Wastewater sales 7,991,280 8,154,933 8,534,228 8,940,200 Other 1,443,978 1,367,291 1,684,506 1,314,453 Total uniform charges 18,115,693 18,623,777 19,592,600 20,362,698 Septage/Sludge 223,384 293,741 381,741 348,320 Surcharges 231,478 238,079 247,137 243,342 Interest Earnings 2,938,338 4,577,350 2,983,032 1,797,260 1989/1990 Special assessments 166,239 37,235 9,409 11,650 1996 Special assessments 1,542,906 870,629 2,619,805 2,752,661 Gross revenue 23,218,038 24,640,811 25,833,724 25,515,931 Direct expense 8,361,845 9,388,472 9,662,508 10,723,548 Net revenues available for debt service $ 14,856,193 $ 15,252,339 $ 16,171,216 $ 14,792,383 Annual debt service Principal $ 1,965,000 $ 1,615,000 $ 1,690,000 $ 1,765,000 Interest 4,267,654 4,177,559 4,102,839 4,021,989 Total debt service payment $ 6,232,654 $ 5,792,559 $ 5,792,839 $ 5,786,989 Debt service coverage 2.38x 2.63x 2.79x 2.56x Note: In accordance with Water and Sewer Revenue Refunding Bonds, Series 2005 bond covenants, there are items included in the debt service coverage calculation other than normal operating revenues. These items include surcharges and collections on special assessments. Note: Water and Sewer debt information can be found in Note 12. 186 Schedule 14 2004 2005 2006 2007 2008 2009 $ 11,037,623 $ 12,146,416 $ 13,336,623 $ 13,529,341 $ 13,435,398 $ 13,001,743 9,439,597 10,437,091 11,634,181 12,003,677 12,128,706 11,954,333 1,426,112 1,685,502 1,744,486 1,386,198 1,460,143 1,285,605 21,903,332 24,269,009 26,715,290 26,919,216 27,024,247 26,241,681 278,897 269,575 332,329 290,955 256,785 294,459 234,746 242,451 244,166 243,919 245,343 244,619 1,269,838 2,264,132 4,554,419 6,576,873 3,650,480 2,110,031 1,564 - 60,229 21,138 112 413 1,539,600 722,922 350,712 268,883 220,754 184,272 25,227,977 27,768,089 32,257,145 34,320,984 31,397,721 29,075,475 12,507,398 12,853,872 14,270,414 16,226,651 17,147,444 17,057,273 $ 12,720,579 $ 14,914,217 $ 17,986,731 $ 18,094,333 $ 14,250,277 $ 12,018,202 $ 1,855,000 $ 2,020,000 $ 2,390,000 $ 2,505,000 $ 2,620,000 $ 2,745,000 3,936,019 3,525,573 3,157,260 3,041,150 2,922,950 2,047,513 $ 5,791,019 $ 5,545,573 $ 5,547,260 $ 5,546,150 $ 5,542,950 $ 4,792,513 2.20x 2.69x 3.24x 3.26x 2.57x 2.51x r 187 Indian River County,Florida Pledged Revenue Coverage Recreational Revenue Refunding Bonds,Series 2003 Last Ten Fiscal Years Schedule 15 Golf Course Operations Less: Net Fiscal Revenues Expenses Available Debt Service Operations Year Gross(A) Operating(B) Revenues Principal Interest Total Coverage 2000 $ 2,998,955 $ 2,110,920 $ 888,035 $ 325,000 $ 404,973 $ 729,973 1.22 2001 3,095,768 2,190,943 904,825 345,000 390,673 735,673 1.23 2002 2,928,157 2,188,791 739,366 360,000 375,148 735,148 1.01 2003 3,135,478 2,326,179 809,299 375,000 357,103 732,103 1.11 2004 3,105,806 2,474,969 630,837 410,000 202,155 612,155 1.03 2005 3,252,414 2,590,759 661,655 450,000 188,307 638,307 1.04 2006 3,324,127 2,554,640 769,487 460,000 179,291 639,291 1.20 2007 3,396,639 2,670,309 726,330 475,000 170,016 645,016 1.13 2008 3,327,236 2,390,018 937,218 485,000 159,753 644,753 1.45 2009 3,292,170 2,581,254 710,916 490,000 147,516 637,516 1.12 (A)Gross revenues include charges for services of the golf course as well as interest income. Insurance recoveries and gain on disposal of equipment are excluded. (B)Operating expenses include all expenses except depreciation,amortization,interest expense,and loss on disposal of equipment. Note:Details regarding the County's outstanding debt can be found in the Notes to the Financial Statements. 188 Indian River County,Florida Pledged Revenue Coverage Housing Authority-Component Unit Last Ten Fiscal Years Schedule 16 Housing Authority Activity Less: Net Revenue Direct Available Fiscal Revenues Expenses For Debt Debt Service Requirements Year Gross(A) Operating(B) Service Principal Interest Total Coverage 2000 $ 666,946 $ 402,612 $ 264,334 $ 177,000 $ 42,705 $ 219,705 1.20 2001 716,796 449,220 267,576 179,000 40,655 219,655 1.22 2002 712,236 465,551 246,685 181,000 39,014 220,014 1.12 2003 690,645 494,031 196,614 182,000 37,052 219,052 0.90 2004 615,450 538,808 76,642 184,000 32,903 216,903 0.35 2005 599,074 664,806 (65,732) 186,000 33,388 219,388 (0.30) 2006 671,949 504,885 167,064 188,000 36,965 224,965 0.74 2007 651,281 588,978 62,303 190,000 9,431 199,431 0.31 2008 581,490 558,416 23,074 191,000 27,743 218,743 0.11 2009 425,427 557,421 (131,994) (C) 28,118 28,118 (0.30) (A)Gross revenues includes rental assistance subsidy,tenant rental income,and other income. Interest income is excluded. (B)Operating expenses include all Complexes'expenses except depreciation and interest expense. Also excluded are administrative expenses which are paid by the County. (C)Housing Authority received deferment for 9/1/09 principal payment.Refer to County Note 22. Note:Details regarding the outstanding debt can be found in County Note 12. Even though the Housing Authority is not a part of the primary government,this schedule is required for continuing disclosures. 189 Indian River County,Florida Demographic and Economic Statistics Last Ten Years Schedule 17 Total Per Capita Personal Personal Unemployment Year Population(A) Income(B) Income(B) Rate(C) 2000 112,947 $ 4,207,683,000 $ 37,108 7.0 2001 115,716 4,552,238,000 39,470 6.5 2002 118,149 4,680,414,000 39,717 7.7 2003 121,274 4,886,086,000 40,757 8.2 2004 126,829 5,870,597,000 47,286 6.9 2005 130,043 6,386,893,000 50,369 4.7 2006 135,262 7,002,160,000 54,045 4.7 757 7 810 408 2007 139, 000 59,419 7.3, 2008 141,667 (D) (D) 10.1 2009 141,475 (D) (D) 15.2 Sources: (A)University of Florida,Bureau of Economic and Business Research (B)US Department of Commerce,Bureau of Economic Analysis (C)Florida Agency for Workforce Innovation (D)Information not available 190 Indian River County,Florida Principal Employers Year 2009 and Nine Years Ago Schedule 18 2009 Percentage Number of of Total County Employer Employees Employment School District of Indian River County 2,147 4.14 Indian River County * 1,425 2.75 Indian River Medical Center 1,093 2.11 Piper Aircraft Inc. 700 1.35 Publix Supermarkets 535 1.03 City of Vero Beach 489 0.94 Sebastian River Medical Center 380 0.73 CVS Warehouse/District 325 0.63 Wal-Mart 293 0.57 John's Island 250 0.48 Total 7,637 14.73% Total County Employees 51,833 2000 Percentage Number of of Total County Employer Employees Employment School District of Indian River County 1,700 4.60 Indian River Memorial Hospital 1,520 4.11 Indian River County* 1,379 3.73 Piper Aircraft Inc. 1,249 3.38 Publix Supermarkets 792 2.14 Wal-Mart 774 2.09 City of Vero Beach 606 1.64 Sun Ag Inc. 550 1.49 Winn Dixie 520 1.41 Hale Indian River Groves 505 1.37 Total 9,595 25.94% Total County Employees 36,992 Source: Indian River County, Florida Annual Budgets for individual employers. Florida Agency for Workforce Innovation-Labor Market Statistics, and Bureau of Economic and Business Research at University of Florida for total County employment figures. * This includes the Board of County Commissioners, Clerk of the Circuit Court, Supervisor of Elections, Property Appraiser, Sheriff, and the Tax Collector. 191 Indian River County,Florida Building Permits Last Ten Fiscal Years Indian River County Munici- Fiscal # of New # of Additions& # of New Year Permits Construction Permits Alterations Permits Construction 2000 1,336 $ 248,523,923 1,710 $ 20,345,326 482 $ 151,128,071 2001 1,518 259,705,809 1,664 24,332,468 503 112,404, 111 2002 1,658 291,543,816 1,334 32,118,404 599 142,231,044 2003 2,084 386,495,461 1,382 28,817,520 770 128,376,076 2004 3,889 642,032,168 1,935 46,173,846 773 182,843,901 2005 4,770 703,972,409 4,409 57,549,895 1,147 262135,977 2006 3,760 754,817,641 5,630 43,898,675 826 185,556,022 2007 1,404 280,056,839 3,899 38,290,132 269 107,099,115 2008 857 222,191,316 2,686 30,731,235 206 104,188,514 2009 442 97,694,608 1,725 17,102,312 122 41,039,432 Source: Building Departments - Indian River County (including the City of Vero Beach), Town of Orchid, Town of Indian River Shores, City of Sebastian, and City of Fellsmere. 192 Schedule 19 palities Countywide #of Additions & #of New #of Additions & Permits Alterations Permits Construction Permits Alterations 3,213 $ 23,510,426 1,818 $ 399,651,994 4,923 $ 43,855,752 3,364 30,274,210 2,021 372,109,920 5,028 54,606,378 3,588 27,333,128 2,257 433,774,860 4,922 59,451,532 4,141 37,578,377 2,854 514,871,537 5,523 66,395,897 4,395 47,075,876 4,662 824,876,069 6,330 93,249,722 13,062 119,403,505 5,917 966,108,386 17,471 176,953,400 7,072 65,822,951 4,586 940,373,663 12,702 109,721,626 3,712 53,482,334 1,673 387,155,954 7,611 91,772,466 2,850 40,039,893 1,063 326,379,830 5,536 70,771,128 2,188 34,072,491 564 138,734,040 3,913 51,174,803 193 Indian River County,Florida Operating Indicators by Function/Program Last Ten Fiscal Years Function/Program 2000 2001 2002 2003 General Government Purchasing 2,850 2,990 2,742 2,563 Purchase orders issued Probation 932 1,097 1,156 731 New cases received Public Safety Fire rescue Vehicle rescue response 10,897 10,270 10,671 10,700 Fire code inspections 2,219 2,431 1,886 2,497 Advanced life support calls 6,400 6,569 6,681 6,697 Basic life support calls(transport only) 4,054 3,611 3,788 4,090 Sheriff Arrests 1,837 3,817 2,648 4,181 Violent crimes 180 301 305 290 Non-violent crimes 1,450 3,482 2,870 2,979 Total calls for service 67,701 N/A 156,179 149,202 Building department Construction permits issued 1,336 1,518 1,658 2,084 Estimated value of construction(millions) $ 248.5 $ 259.7 $ 291.5 $ 386.5 Physical Environment Solid waste Waste stream tonnage received 244,419 245,000 274,604 277,622 Total recycled material (tons) 104,384 111,075 79,362 81,006 Utilities-water&sewer Number of water customer 24,058 26,218 27,632 27,849 Number of wastewater customers 15,173 16,169 16,737 17,293 Water ERUs 36,999 39,404 41,242 44,420 Wastewater ERUs 28,544 29,644 30,297 32,432 Water consumption(Average Daily Demand) 5,778,000 6,528,000 6,897,000 7,586,000 (A)Effective September 18, 2006, fire and advanced life support combined into fire rescue. Source: Internal reports prepared by the various departments of Indian River County. 194 Schedule 20 2004 2005 2006 2007 2008 2009 2,800 2,554 2,734 2,753 2,520 2,463 N/A N/A N/A N/A N/A N/A 11,467 10,602 6,880 32,488(A) 33,845 34,480 2,514 2,215 2,420 2,593 3,527 5,917 7,222 5,623 10,728 7,537 5,862 9,085 4,340 4,606 11,105 3,643 5,759 3,486 4,979 5,172 5,211 5,012 5,620 4,331 359 300 652 338 353 340 2,805 3,930 3,462 6,192 6,383 6,099 130,847 122,893 131,489 126,490 129,389 138,998 3,889 4,770 3,760 1,404 857 857 $ 642.0 $ 704.0 $ 754.8 $ 280.1 $ 222.2 222.2 349,538 529,238 380,109 295,977 239,296 207,344 72,568 129,869 70,919 57,247 42,088 40,931 33,793 34,867 43,477 41,101 42,000 42,972 19,786 20,237 25,943 24,666 25,000 25,192 46,254 53,032 54,070 61,494 61,558 63,147 33,250 38,387 41,351 45,396 45,785 45,319 7,660,000 7,780,000 8,370,000 8,790,000 8,603,000 8,291,000 Continued 195 Indian River County,Florida Operating Indicators by Function/Program Last Ten Fiscal Years Function/Program 2000 2001 2002 2003 Transportation Public works Projects under design 11 8 8 8 Projects awarded for construction 5 5 5 2 Construction projects completed 6 6 3 3 County engineer Roads designed 17 11 11 12 Miles of roads designed 4.00 4.00 4.00 6.40 Traffic engineer Site plans reviewed 771 659 916 1,053 Culture/Recreation Library Circulation(County-wide) 853,637 852,567 862,783 1,012,852 Recreation department Participants in adult programs 3,500 4,000 4,300 5,000 Participants in youth programs 5,000 5,500 5,700 6,500 Aquatic centers attendance N/A 1,500 21,369 101,182 Shooting range Safety/Registration cards issued N/A 2,969 5,961 4,929 Golf course Rounds played 116,940 115,927 110,514 108,684 Court Related Law library Circulation 22,071 21,491 21,529 21,172 r 196 Schedule 20- Continued 2004 2005 2006 2007 2008 2009 3 4 5 5 6 29 3 0 4 5 5 5 5 0 4 5 5 12 12 6 11 7 8 5 6.50 1.71 6.50 3.50 6.00 5.00 1,103 1,274 1,135 520 332 423 1,012,241 1,079,206 1,140,904 1,188,366 1,250,075 1,314,372 5,500 5,400 8,000 7,400 5,671 5,798 7,000 7,000 7,000 6,900 8,227 8,382 95,711 89,000 93,088 90,503 90,475 85,699 4,616 3,718 6,036 6,784 6,784 9,050 106,871 97,465 107,048 100,539 104,716 101,810 25,627 26,481 26,255 24,759 21,107 18,512 197 Indian River County,Florida Full-Time Equivalent County Government Employees by Function/Program Last Nine Fiscal Years 2001 2002 2003 2004 General Government Board of County Commissioners 10 10 10 10 County Attorney 6 6 6 6 Administration 3 3 3 3 Financial/Administrative Service 21.5 22.5 23.5 23.5 Comprehensive Planning 19 19 19 20 Other 50 51 50 46 106 Clerk of Circuit Court 98 99.5 104.5 47 Property Appraiser 45 47 47 47 Supervisor of Elections 9.5 10 10 11.5 Tax Collector 35 35 35 40 Public Safety Fire Department 141.5 141.5 142.5 142.5 Advanced Life Support 75 82 82 82 Sheriff-Corrections 121 128 121 128 Sheriff-Court Service 26 26.5 37.5 25.5 Sheriff-Law Enforcement 262 265 261 273 Building Department 19 21.5 23 29 Other 22 22 22 19.5 Physical Environment Solid Waste 51 53 54 54 Utilities-water and sewer 115 120 122 125 Other 8 8 8 8 Transportation Road and Bridges 98 98 98 99 County Engineer 26 27 28 29 Traffic Engineer 19 19 20 20 Real Estate Acquisition 0 0 0 0 Economic Environment 6 6 6 6 Human Services 14 14 14 15 Culture/Recreation Libraries 46.5 50.5 51 51 Parks 35 35 37 37 Recreation Department 27.5 28.5 54 55 Coastal Engineering 0 0 0 0 Shooting Range 6 6 6 6 Golf Course 26.5 26.5 26.5 22.5 Court Related Law Library 1 1 1 1 Total 1,443 1,482 1,523 1,541 Source:Indian River County,Florida Annual Budgets Method:Using 1.0 for each full-time employee,and 0.50 for each part-time/seasonal employee. Information provided since 2001,the year of GASB 34 implementation. (A)The fire department and advanced life support unions were consolidated on September 18,2006. 198 Schedule 21 2005 2006 2007 2008 2009 10 10 10 11 10 6 6 7 7 7 3 3 3 3 3 23.5 24.5 25.5 26.5 22.5 23 23 23 23 19 42 50 62 49 44.5 108 113 118 116 99.5 47 49 50 45 40 11.5 11.5 12 12 9.5 40 40 40 38 38 144.5 233 232 241 240 82 - (A) - (A) 130 200 197 197 195 25.5 26 29.5 29.5 29.5 276 276 301 301 301 45 49 50 33 18 17.5 11 12 12 10 53 53 53 51 49 126 131 139 130 128 11 13 14 15 9 100 103 106 100 86.5 33 39 42 42 33 22 24 26 24 21 0 0 0 3 2 6 6 6 4.5 3.5 15 17 15 15 14.5 51 51 52.5 50 45.5 39 43 42 41 39 56.5 56 58.5 57.5 46 3 3 3 3 3 6 6 6 5.5 5.5 22 21.5 21.5 18 16.5 1 1 1 1 1 1,579 1,693 1,758 1,705 1,589.5 199 Indian River County,Florida Capital Asset Statistics by Function/Program Last Ten Fiscal Years Function/Program 2000 2001 2002 2003 General Government Buildings and grounds Total square footage maintained 468,470 468,470 483,470 493,270 Number of facilities and sites maintained 42 42 42 42 Vehicles 10 11 12 13 General government Vehicles 13 18 21 23 Planning Vehicles 2 3 3 3 GIS Vehicles Public Safety Fire department Vehicles 27 28 30 35 Fire stations 8 11 11 11 Advanced life support Vehicles 9 10 16 19 E911 Center Vehicles Sheriff Vehicles 209 212 214 227 Building department Vehicles 7 8 8 13 Physical Environment Solid waste Vehicles 21 23 26 28 Telecommunications Vehicles Ag Extension Vehicles 1 1 1 1 Utilities-water and sewer Vehicles 24 39 54 62 Water treatment plants 2 2 2 2 Wastewater treatment facilities 6 7 7 7 Water main-miles N/A N/A N/A N/A Force main-miles N/A N/A N/A N/A Gravity sewer lines-miles 0 N/A N/A N/A Transportation Road and bridges Miles maintained(paved&unpaved) 656 656 658 601 Bridges maintained 78 78 78 78 Vehicles 40 44 48 51 Source:Internal reports prepared by the various departments of Indian River County. 200 Schedule 22 2004 2005 2006 2007 2008 2009 493,270 493,270 493,270 715,215 715,215 715,215 43 43 43 47 47 47 17 18 18 17 17 15 27 32 36 37 28 27 3 6 6 7 7 7 1 1 41 43 49 54 53 54 11 11 11 11 11 11 21 25 24 21 20 20 1 1 241 252 274 276 295 291 16 27 29 22 13 9 32 32 33 34 32 30 1 1 2 2 2 2 2 2 74 84 90 86 82 82 2 2 2 2 2 2 7 7 7 6 6 6 N/A N/A 737 769 780 819 N/A N/A 188 217 240 230 N/A N/A 250 259 261 262 609 614 614 617 625 628 78 78 78 78 78 78 59 61 66 68 65 65 Continued 201 Indian River County,Florida Capital Asset Statistics by Function/Program Last Ten Fiscal Years Function/Program 2000 2001 2002 2003 Transportation-continued: Senior Resource Association Vehicles 4 4 7 9 Engineering Vehicles 5 5 6 8 r Traffic engineering Traffic signals operated 101 104 110 114 Beacons operated 36 39 36 41 Vehicles 4 5 5 5 Traffic operations Vehicles 6 6 9 10 Economic Environment Rental Vehicles 1 1 1 1 Human Services Health department Vehicles 11 13 13 14 Animal Control Vehicles 1 1 1 2 Housing Vehicles 1 1 1 1 Culture/Recreation Libraries Locations 2 2 2 2 Parks Number of neighborhood parks 12 12 12 12 Number of County parks 31 31 35 37 Acreage 2,681 2,681 3,857 3,869 Picnic shelters maintained 51 51 59 62 Boats ramps maintained 8 8 8 8 Vehicles 11 13 15 16 Recreation Vehicles - 1 2 4 Shooting range Vehicles N/A N/A 1 1 Rifle range stations N/A 29 29 29 Pistol range stations N/A 35 35 35 Golf Course Holes maintained 36 36 36 36 Vehicles 1 1 1 1 202 Schedule 22-Continued 2004 2005 2006 2007 2008 2009 10 20 22 25 23 25 9 9 11 12 17 16 119 122 125 132 133 133 42 37 42 42 41 48 6 6 6 3 5 3 10 10 10 16 16 15 1 1 1 1 1 0 14 17 16 16 16 16 5 5 6 7 7 7 1 2 2 1 1 2 2 2 2 2 2 2 12 12 12 12 12 12 35 47 47 47 47 47 3,857 3,994 4,004 4,014 4,014 4,014 59 64 66 69 69 69 8 8 8 8 8 8 20 22 23 25 24 25 4 4 5 5 5 5 1 1 0 1 1 1 29 29 29 29 29 29 35 35 35 35 35 35 36 36 36 36 36 36 2 2 2 2 2 2 203 Indian River County,Florida Department of Utility Services Historical Rate Structure Last Ten Fiscal Years 2000 2001 2002 2003 WATER RATES Billing charges Base facilities charges(per ERU) $ 1.29 $ 1.29 $ 1.29 $ 1.29 Single-family or commercial 7.76 7.76 7.76 7.76 Multi-family or manufactured home 6.60 6.60 6.60 6.60 Volume charge-per 1,000 gallons(per ERU) 0-3,000 gallons 2.20 2.20 2.20 2.20 3,000-7,000 gallons 2.42 2.42 2.42 2.42 7,001 gallons and over 3.85 3.85 3.85 3.85 Excess volume surcharge-greater than 13,000 gallons per month(per ERU) 7.70 7.70 7.70 7.70 Base facilities charge where capacity is Reserved but lines are not yet available(per ERU) Single-family or commercial 3.88 3.88 3.88 3.88 Multi-family or manufactured home 3.30 3.30 3.30 3.30 SEWER RATES Billing charges 1.29 1.29 1.29 1.29 Base facility charge(per ERU) Single-family or commercial 14.48 14.58 14.58 14.58 Multi-family or manufactured home 12.40 12.40 12.40 12.40 Volume charge-per 1,000 gallons Single-family&manufactured home(1,000-12,000) 2.86 2.86 2.86 2.86 Multi-family&commercial(0-13,000) 2.86 2.86 2.86 2.86 Multi-family&commercial(>13,000) 4.29 4.29 4.29 4.29 Base facility charge where capacity is Reserved but lines are not yet available(per ERU) Single-family or commercial 7.29 7.29 7.29 7.29 Multi-family or manufactured home 6.20 6.20 6.20 6.20 Source:Indian River County Utilities Department In addition to the charges shown above,users of the North Beach Water System are subject to a$13 per ERU per month surcharge. 204 Schedule 23 2004 2005 2006 2007 2008 2009 L $ 1.29 $ 1.29 $ 1.29 $ 1.29 $ 1.29 $ 1.29 7.76 7.76 7.76 7.76 7.76 7.76 6.60 6.60 6.60 6.60 6.60 6.60 2.20 2.20 2.20 2.20 2.20 2.20 2.42 2.42 2.42 2.42 2.42 2.42 3.85 3.85 3.85 3.85 3.85 3.85 7.70 7.70 7.70 7.70 7.70 7.70 3.88 3.88 3.88 3.88 3.88 3.88 3.30 3.30 3.30 3.30 3.30 3.30 1.29 1.29 1.29 1.29 1.29 1.29 14.58 14.58 14.58 14.58 14.58 14.58 12.40 12.40 12.40 12.40 12.40 12.40 2.86 2.86 2.86 2.86 2.86 2.86 2.86 2.86 2.86 2.86 2.86 2.86 4.29 4.29 4.29 4.29 4.29 4.29 7.29 7.29 7.29 7.29 7.29 7.29 6.20 6.20 6.20 6.20 6.20 6.20 L L L L L L 205 n River County,Florida India ty, Water and Wastewater Customers Last Ten Fiscal Years Schedule 24 water and wastewater customers The number of County expressed as the number of equivalent residential units("ERUs"),for the years 2000 through 2009 as set forth below: Fiscal Year Water ERUs Wastewater ERUs 2000 36,999 28,544 2001 39,404 29,644 2002 41,242 30,297 2003 44,420 32,432 2004 46,254 33,250 2005 53,032 38,387 2006 54,070 41,351 2007 61,494 45,396 2008 61,558 45,785 2009 63,147 45,319 Source:Indian River County Utilities Department 206 Indian River County,Florida, Top 10 High Volume Customers of Utility Services Fiscal Year 2009 Schedule 25 Below is a table depicting p tmg the ten highest volume customers of the utility system for the fiscal year end, September 30,2009: Annual Water Annual Wastewater Volume Volume Customer (x 1,000 gals.) (x 1,000 gals.) 1. ACTS Inc 24,391 24,391 2. Vista Royale 24,360 24,360 3. Village Green Manufactured Housing Park 24,182 24,182 4. Disney's Vero Beach Resort 23,322 23,322 5. City of Fellsmere(Wastewater Only) 19,328 6. Indian River County Jail 18,849 18,849 7. Vista Gardens 12,617 12,617 8. Vista Plantation 11,608 11,608 9. Palms of Vero Beach 10,062 10,062 10. Vero Beach Resort 9,962 9,962 Source: Indian River County Utilities Department 207 Indian River County,Florida Capacity Charges -Utilities Department Last Ten Fiscal Years Schedule 26 The County also receives capacity charges in connection with the system. Capacity charges are not pledged as a security for the bonds. While the County may pledge the capacity charges in the future, the County presently has no intention to pledge capacity charges as security for the bonds. Capacity charges for the last ten fiscal years ended September 30 are as follows: Wastewater Water Capacity Capacity Total Fiscal Year Charges Charges Charges 2000 $ 2,668,482 $ 2,916,529 $ 5,585,011 2001 2,780,120 2,392,169 5,172,289 2002 2,687,997 2,423,583 5,111,580 2003 4,182,272 5,448,827 9,631,099 2004 5,464,809 7,559,916 13,024,725 2005 11,036,369 19,109,246 30,145,615 (A) 2006 4,758,320 8,287,244 13,045,564 2007 1,159,803 741,143 1,900,946 2008 699,054 1,088,279 1,787,333 2009 504,658 367,940 872,598 (A)Large increase in capacity charges due to construction boom. 208 Indian River County,Florida Pledged Revenues for Recreational Revenue Refunding Bonds, Series 2003 Last Ten Fiscal Years Schedule 27 Racetrack 7% of Fiscal and Jai Alai Half-Cent Year Fronton Funds Sales Tax 2000 $ 446,500 $ 434,410 2001 446,500 456,472 2002 446,500 483,509 2003 446,500 490,138 2004 446,500 529,488 2005 446,500 612,279 2006 446,500 614,368 2007 446,500 568,608 2008 446,500 531,138 2009 446,500 490,033 Racetrack and Jai Alai fronton funds and 7/0 of the Half-Cent Sales Tax are pledged as security for payment on these bonds. This is in addition to the net revenues of the golf course. Refer to pledged revenue coverage ratio on Schedule 15 and County Note 12 for more information. 209 Indian River County,Florida Pledged Revenues for Spring Training Facility Revenue Bonds, Series 2001 Last Ten Fiscal Years Schedule 28 Year Professional Total Ended Sports State Tourist One Cent Half Cent September 30 Subsidy Tax Collected Tourist Tax(A) Sales Tax(B) $ 6,205,862 2000 $ - $ 1,114,916 $ 2001 291,649 1,408,046 (A) 244,623 6,521,024 2002 500,004 1,410,409 347,710 6,917,278 2003 500,004 1,286,885 321,721 7,001,976 2004 500,004 1,443,272 360,818 7,564,109 2005 500,004 1,675,781 418,945 8,746,849 2006 500,004 1,517,360 379,340 8,776,684 2007 500,004 1,449,083 362,271 8,122,976 2008 500,004 1,584,512 396,128 7,587,682 2009 500,004 1,294,163 323,541 7,000,465 (A)A 4th cent was imposed effective February 1, 2001. (B)This amount represents 100%of the half-cent sales tax received. Eighty-six percent of this amount is pledged to the payment of debt service on the Series 2001 bonds. 210 Harris, Cotherman, Jones, Price Associates Certified Public Accountancs-Chattered 5070 North Highway AlA,Suite 250 Vero Beach,FL 32963 Tel 772.234.8484 Fax 772.234-8488 Report on Internal Control over Financial Reporting and on Compliance and Other Matters Based on an Audit of Financial Statements Performed in Accordance with Government Auditing Standards The Honorable Board of County Commissioners Indian River County, Florida We have audited the financial statements of governmental activities,the business-type activities, the aggregate discretely presented component unit, each major fund, and the aggregate remaining fund information of Indian River County, Florida (the "County") as of and for the year ended September 30, 2009, which collectively comprise the County's basic financial statements and have issued our report thereon dated March 12, 2010. We conducted our audit in accordance with auditing standards generally accepted in the United States of America and the standards applicable to financial audits contained in Government Auditing Standards issued by the Comptroller General of the United States. Internal Control over Financial Reporting In planning and performing our audit,we considered the County's internal control over financial reporting as a basis for designing our auditing procedures for the purpose of expressing our opinions on the financial statements, but not for the purpose of expressing an opinion on the effectiveness of the County's internal control over financial reporting. Accordingly, we do not express an opinion on the effectiveness of the County's internal control over financial reporting. A control deficiency exists when the design or operation of a control does not allow management or employees, in the normal course of performing their assigned functions, to prevent or detect misstatements on a timely basis. A significant deficiency is a control deficiency, or combination of control deficiencies, that adversely affects the County's ability to initiate, authorize, record, process, or report financial data reliably in accordance with generally accepted accounting principles such that there is more than a remote likelihood that a misstatement of the County's financial statements that is more than inconsequential will not be prevented or detected by the County's internal control. A material weakness is a significant deficiency, or combination of significant deficiencies, that results in more than a remote likelihood that a material misstatement of the financial statements will not be prevented or detected by the County's internal control. "Providing Vision and Direction to our Chenta" Member AICPA Member AICPA Division Fa CPA Firms Member FICPA Private Companies Practice Section 1 211 Harris, Cotherman, Jones, Price Associates Certified Public Accountants-Chartered The Honorable Board of County Commissioners Indian River County,Florida Page two Our consideration of the internal control over financial reporting was for the limited purpose described in the first paragraph of this section and would not necessarily identify all deficiencies in internal control that might be significant deficiencies or material weaknesses. We did not identify any deficiencies in internal control over financial reporting that we consider to be material weaknesses, as defined above. Compliance and Other Matters As part of obtaining reasonable assurance about whether the County's financial statements are free of material misstatement, we performed tests of its compliance with certain provisions of laws,regulations, grant agreements and contracts,noncompliance with which could have a direct and material effect on the determination of financial statement amounts. However, providing an opinion on compliance with those provisions was not an objective of our audit and, accordingly, we do not express such an opinion. The results of our tests disclosed no instances of noncompliance or other matters that are required to be reported under Government Auditing Standards. This report is intended solely for the information of the Board of County Commissioners, management, the Auditor General of the State of Florida, and federal and state awarding agencies and is not intended to be and should not be used by anyone other than these specified parties. 9'. d Vero B6ach,Florida March 12,2010 212 Harris, Cotherman, Jones, Price &Associates Certified Public Accountants-Chartered 5070 North Highway AlA,Suite 250 Vero Beach,FL 32963 Tel 772-234.8484 Fax 772-234-8488 Management Letter The Honorable Board of County Commissioners Indian River County, Florida We have audited the basic financial statements of Indian River County, Florida as of and for the year ended September 30, 2009 and have issued our report thereon dated March 12, 2010. We conducted our audit in accordance with United States generally accepted auditing standards; the standards applicable to financial audits contained in Government Auditing Standards issued by the Comptroller General of the United States; and OMB Circular A-133, Audits of States, Local Governments, and Non-Profit Organisations. We have issued our Independent Auditors' Report on Internal Control Over Financial Reporting and on Compliance and Other Matters, Independent Auditors' Report on Compliance with Requirements Applicable to Each Major Federal Program and Major State Project, and Schedule of Findings and Questioned Costs. Disclosures in those reports and schedule, which are dated March 12, 2010,should be considered in conjunction with this management letter. We have also issued separate management letters dated March 12, 2010 for each county agency not included in this letter,which should also be considered in conjunction with this management letter. Additionally,our audit was conducted in accordance with Chapter 10.550,Rules of the Auditor General, which govern the conduct of local government entity audits performed in the state of Florida and unless otherwise required to be represented in the report on internal controls and on compliance or in the schedule of findings and questioned costs,this letter is required to include the following information: In accordance with the Rules of the Auditor General(Section 10.554(1 Xi)1.),it is noted that there were no recommendations made in the preceding audit report. As required by the Rules of the Auditor General(Section 10.5 54(1 Xi)2.),the scope of our audit included a review of the provisions of Section 218.415, Florida Statutes, regarding the investment of public funds. In connection with our audit, we determined that the Board of County Commissioners complied with Section 218.415,Florida Statutes. The Rules of the Auditor General (Section 10.554(lXi)3.) require that we address in the management letter any findings and recommendations to improve financial management, accounting procedures, and internal control. In connection with our audit,we did not have any such findings. The Rules of the Auditor General(Section 10.554(lXi)4.)require that we address violations of provisions of contracts and grant agreements or abuse that have occurred,or are likely to have occurred,that have an effect on the financial statements that is less than material but more than inconsequential. In connection with our audit,we did not have any such findings. 'Provi ng Vuim and Direction to our Clients" Member AICPA Member AICPA Division For CPA Firms Member RCPA Private Companies Practice Section 213 Harris, Cotherman, Jones, Price &Associates Certified Public Accountant•Chartered The Honorable Board of County Commissioners Indian River County,Florida Page two The Rules of the Auditor General Section 10.554(Ixi)5.)require disclosure in the management letter of the following matters that are inconsequential to the determination of financial statement amounts, considering both quantitative and qualitative factors: (1) violations of provisions of contracts or grant agreements,fraud, illegal acts or abuse and(2)control deficiencies that were not significant deficiencies. In connection with our audit,we did not have any such findings. The Rules of the Auditor General(Section 10.554(1)(i)6.)require that the name or official title and legal authority for the primary government and each component unit of the reporting entity be disclosed in this management letter, unless disclosed in the notes to the financial statements. This disclosure has been included in the notes to the financial statements. As required by the Rules of the Auditor General (Section 10.554(1)(i)7.a.), none of the conditions described in Section 218.503(1), Florida Statutes, were met during the fiscal year ended September 30, 2009. As required by the Rules of the Auditor General (Section 10.554(lxi)7.b.), the annual financial report required to be filed with the Florida Department of Financial Services pursuant to Section 218.32(lxa)of the Florida Statutes has been completed and is in agreement with the annual financial audit report. We agreed this report with the annual financial audit report and noted no exceptions for the fiscal year ended September 30,2009. As required by the Rules of the Auditor General (Sections 10.554(lxi)7.c. and 10.556(7)), we applied financial condition assessment procedures relating to Indian River County. It is management's responsibility to monitor the entity's financial condition,and our financial condition assessment was done as of the fiscal year end and was based in part on representations made by management and the review of financial information provided by same. This report is public record and its distribution is not limited. This report is intended for the information of management,the Board of County Commissioners,and the Auditor General of the State of Florida,and is not intended to be and should not be used by anyone other than these specified parties. , A Vero Mach,Florida March 12,2010 214 Harris, �ohtman, Jones, Pce Associates Cettified Public Accountants-Chattered 5070 North Highway AIA,Suite 250 Vero Beach,FL 32963 Tel 772-234.8484 Fax 772-234-8488 Independent Auditors'Report on Compliance with Requirements Applicable to Each Major Federal Program and Major State Project and on Internal Control over Compliance in Accordance with OMB Circular A-133 and the Department of Financial Services'State Projects Compliance Supplement The Honorable Board of County Commissioners Indian River County,Florida Compllance We have audited the compliance of Indian River County, Florida (the "County") with the types of compliance requirements described in the U.S. ice of Management and Budget (OMB) Circular A-133 Compliance Supplement and the requirements described in the Department of Financial Services' State Projects Compliance Supplement that are applicable to each of its major federal programs and major state projects for the year ended September 30,2009. Indian River County,Florida's major federal programs and major state projects are identified in the summary of auditors' results section of the accompanying Schedule of Findings and Questioned Costs. Compliance with the requirements of laws,regulations,contracts and grants applicable to each of its major federal programs and major state projects is the responsibility of the County's management. Our responsibility is to express an opinion on Indian River County,Florida's compliance based on our audit. We conducted our audit of compliance in accordance with auditing standards generally accepted in the United States of America;the standards applicable to financial audits contained in Government Auditing Standards issued by the Comptroller General of the United States; OMB Circular A-133,Audits of States, Local Governments, and Non- Profit Organizations; Chapter 691-5,Rules of the Department of Financial Services, and Chapter 10.550, Rules of the Auditor General. Those standards, OMB Circular A-133, Chapter 691-5 and Chapter 10.550, Rules of the Auditor General, require that we plan and perform the audit to obtain reasonable assurance about whether noncompliance with the types of compliance requirements referred to above that could have a direct and material effect on a major federal program or major state project occurred. An audit includes examining, on a test basis, evidence about the County's compliance with those requirements and performing such other procedures as we considered necessary in the circumstances. We believe that our audit provides a reasonable basis for our opinion. Our audit does not provide a legal determination on the County's compliance with those requirements. In our opinion, Indian River County, Florida complied, in all material respects, with the requirements referred to above that are applicable to each of its major federal programs and major state projects for the year ended September 30,2009. Internal Control over Compliance The management of Indian River County,Florida is responsible for establishing and maintaining effective internal control over compliance with requirements of laws,regulations,contracts and grants applicable to federal programs and state projects. In planning and performing our audit, we considered the County's internal control over compliance with requirements that could have a direct and material effect on a major federal program or major state project in order to determine our auditing procedures for the purpose of expressing our opinion on compliance but not for the purpose of expressing an opinion on the effectiveness of internal control over compliance. Accordingly, we do not express an opinion on the effectiveness of the County's internal control over compliance with OMB Circular A-133, Chapter 691-5, Rules of the Department of Financial Services, and Chapter 10.550, Rules of the Auditor General. "Providing Vision and Daection to our Clients!' Member AICPA Member AICPA Division For CPA Fume Member FICPA Private Companies Practice Section 215 Harris, Cotherman, Jones, Price &Associates Certified Public Accountants.Chartered The Honorable Board of County Commissioners Indian River County,Florida Page two e e A control deficiency in an entity's internal control over compliance exists when the design oroperation of a control does not allow management or employees,in the normal course of performing their assigned functions,to prevent or detect noncompliance with a type of compliance requirement of a federal program or state project on a timely basis. A significant deficiency is a control deficiency, or combination of control deficiencies, that adversely affects the entity's ability to administer a federal program or state project such that there is more than a remote likelihood that noncompliance with a type of compliance requirement of a federal program that is more than inconsequential will not be prevented or detected by the entity's internal control. A material weakness is a significant deficiency,or combination of significant deficiencies,that results in more than a remote likelihood that material noncompliance with a type of compliance requirement of a federal program or state project will not be prevented or detected by the entity's internal control. our consideration of internal control over compliance was for the limited purpose described in the first paragraph of this section and would not necessarily identify all deficiencies in internal control that might be significant deficiencies or material weaknesses. We did not identify any deficiencies in internal control over compliance that we consider to be material weaknesses,as defined above. Schedule of Erpenditures of Federal Awards and State Projects We have audited the compliance of the County with the type of compliance requirements in OMB Circular A-133 Compliance Supplement, and the requirements of the Department of Financial Services State Projects Compliance Supplement,applicable to each of the county's major federal programs and major state projects for the year ended September 30,2009. The accompanying schedule of expenditures of federal awards and state projects is presented for purposes of additional analysis and is not a required part of the basic financial statements. Such information has been subjected to auditing procedures, as considered necessary, and in our opinion, is fairly stated in all material respects in relation to the basic financial statements taken as a whole. This report is intended solely for the information and use of the Board of County Commissioners,management,and specific legislative or regulatory bodies and is not intended to be and should not be used by anyone other than these specified parties. �Q •i L� l C.J1LVl Vero Be h,Florida March 12,2010 216 amA ..A Indian River County,Florida Schedule of Expenditures of Federal Awards and State Projects For the Fiscal Year Ended September 30,2009 Federal/State Agency CFDA Contract/ Pass-through Entity CSFA Grant Transfers to Federal Program/State Project No. No. Expenditures Subrecipients Department of Housing and Urban Development: Direct Programs: Section 8 Housing Choice Vouchers 14.871 FL-132-VO-014 to 017 $ 2,010,205 Shelter Plus Care 14.238 FL29C309002 102,379 Shelter Plus Care 14.238 FL29C509001 69,711 Shelter Plus Care 14.238 FL29C709001 69,734 Shelter Plus Care 14.238 FL29C709004 101,397 Shelter Plus Care 14.238 FL29C709005 24,639 Shelter Plus Care 14.238 FL0I 14CH090801 34,522 Shelter Plus Care 14.238 FLOI 19CH090801 17,851 Shelter Plus Care 14.238 FL0120CH090801 39,585 Supportive Housing Program- Homeless Management Information Systems 14.235 FL29B609003 33,151 Family Options 14.235 FL29B709002 42,703 Homeless Management Information Systems 14.235 FL29B709003 26,042 Family Options 14.235 FL0I15BH090801 23,354 Homeless Management Information Systems 14.235 FL0116BH090801 1,261 Indirect Programs: Passed through Florida Dept.of Community Affairs: Comm.Dev.Block Grant-Gifford Fire Station#12 14.228 08DB-T3-10-40-01-N-25 707,771 Comm.Dev.Block Grant-Wilma Disaster Recovery 14.228 08DB-D3-10-40-01-Al2 59,793 Disaster Recovery Initiative Grant 14.228 06DB-3C-10-40-01-W-14 187,952 Total Department of Housing and Urban Development 3,552,050 Federal Transit Administration: Direct Programs: Federal Transit Formula Section 5307 Grant 20.507 FL-90-X669 $ 107,318 Federal Transit Formula Section 5307 Grant 20.507 FL-90-X611 42,041 Federal Transit Formula Section 5307 Grant 20.507 FL-90-X568 229,002 Federal Transit Formula Section 5307 Grant 20.507 FL-90-X533 63,370 Federal Transit Formula Section 5307 Grant 20.507 FL-90-X500 6,681 Total Federal Transit Administration 448,412 Federal Highway Administration: Indirect Programs: Passed through Florida Department of Transportation: 12th Street Sidewalk Improvements 20.205 AOU95 289,823 12th Street Sidewalk Improvements 20.205 AOU94 26,031 Aggressive Driver Program 20.600 APE38 43,870 Metropolitan Planning Organization 20.205 AA080 423,823 Metropolitan Planning Organization 20.505 ANR93 39,459 Total Federal Highway Administration 823,006 Environmental Protection Agency: Indirect Programs: Passed through Florida Department of Environmental Protection: Nonpoint Source Implementation Grants- Egret Marsh Regional Stormwater 66.460 G0143 358,680 Main Relief Canal Pollution Control Structure 66.460 G0182 68,680 Total Environmental Protection Agency 427,360 218 Indian River County,Florida Schedule of Expenditures of Federal Awards and State Projects For the Fiscal Year Ended September 30,2009 Federal/State Agency CFDA Contract/ Pass-through Entity CSFA Grant Transfers to Federal Program/State Project No. No. Expenditures Subrecipients Department of Justice: Direct Programs: State Criminal Alien Assistance Program 16.606 2008-F2621-FL-AP 157,349 Bureau of Justice Assistance Bulletproof Vest Partnership 16.607 N/A 611 Adult Drug Court Grant 16.738 2006-DJ-BX-0589 18,018 Indirect Programs: Passed through Florida Department of Law Enforcement: Bryne Formula Grant Program Multi-Agency Drug Enforcement Unit 16.738 2009-JAGC-INRI-I-T7-059 36,031 Substance Abuse Advisory Council 16.738 2009-JAGC-INRI-2-T7-039 3,900 Passed through Office of the Attorney General: Crime Victim Assistance Program 16.575 V8012 37,733 Total Department of Justice 253,642 National Fish and Wildlife Foundation: Direct Program: Indian River Turtle Nesting Habitat Improvements 11.470 2006-0114-005 66,017 Total National Fish and Wildlife Foundation 66,017 Dept of Interior Fish and Wildlife Service: Direct Program: Lost Tree Islands FWS 15.614 144840181-6-G-100 49,145 Total Dept of Interior 49,145 Elections Assistance Commission: Indirect Programs: Passed through Florida Dept of State Division of Elections: Ballot on Demand 90.401 NIA 17,500 Poll Worker Recruitment and Training 90.401 N/A 7,926 Voter Education Program 90.401 N/A 15,851 Total Elections Assistance Commission 41,277 Office of Child Support Enforcement: Indirect Programs: Passed through Florida Department of Revenue: Child Support Enforcement-Title IV D- 93.563 00331 3,842 Sheriff Service of Notices 93.563 CC331 405,203 Total Office of Child Support Enforcement 409,045 Federal Emergency Management Agency: Direct Program: Assistance to Firefighters Grant 97.044 EMW-2008-FO-05618 77,141 Indirect Programs: Passed through Florida Dept.of Community Affairs: Disaster Relief Funding-Hurricane Frances 97.036 05-PA-G%10-41-01-800 113,588 Disaster Relief Funding-Hurricane Jeanne 97.036 05-PA-E=1041-01-864 875,886 FEMA Hazardous Mitigation Grant 97.039 07HM-04a-10-04-01-008 275,048 Total Federal Emergency Management Agency 1,341,663 TOTAL EXPENDITURES OF FEDERAL AWARDS: $ 6,963,205 $ 448,412 219 Indian River County,Florida Schedule of Expenditures of Federal Awards and State Projects For the Fiscal Year Ended September 30,2009 Federal/State Agency CFDA Contract/ Pass-through Entity CSFA Grant Transfers to Federal Program/State Project No. No. Expenditures Subrecipients STATE OF FLORIDA Department of Community Affairs: Direct Projects: Emergency Management Programs-Emergency Management Base Grant 52.008 09-BG-03-10-40-01-141 $ 82,462 Total Department of Community Affairs 82,462 Florida Housing Finance Agency: Direct Projects: Local Hurricane Housing Recovery Plan 52.902 N/A 997,527 State Housing Initiatives Partnership 52.901 N/A 1,083,813 Total Florida Housing Finance Agency 2,081,340 Department of Environmental Protection: Direct Projects: Wabasso Beach Restoration 37.003 07182 456,933 Ambersand Beach Renourishment 37.003 07183 199,760 Egret Marsh Regional Stormwater 37.039 LP6734 1,520,000 Egret Marsh Regional Stormwater 37.039 LP6822 570,000 South County Regional Park 37.017 F8138 70,356 Oslo Boat Ramp 37.017 F7064 69,749 Total Department of Environmental Protection 2,886,798 Department of State: Division of Library Services: Direct Project: Public Library Construction Grant 45.020 07-PLC-05 500,000 State Aid to Libraries 45.030 09-ST-23 120,161 Total Department of State 620,161 Department of Transportation: Direct Projects: Access Improvements to Aviation Boulevard 55.014 ANP77 83,712 CR 512/Fellsmere Road(TRIP) 55.026 A0034 1,127,470 FDOT Service Development Grant 55.012 A0185 80,162 Small County Outreach Program(SCOP) -Old Dixie Hwy 55.009 AOR74 308,794 County Incentive Grant Program -66th Avenue 55.008 AOC45 37,069 Transportation Disadvantaged Planning Grant 55.002 AP620 7,380 Transportation Disadvantaged Planning Grant 55.002 APJ58 4,970 FI Public Transit Block Grant 55.010 ANT19 264,533 JPA Agreement Sidewalk Gap Program 55.023 ANU30 90,841 Enhancement&Operation Computerized Traffic Control 55.023 APG29 186,116 Transit Corridor Grant 55.013 AN_83 84,679 Transit Corridor Grant 55.012 AOX67 97,416 Total Department of Transportation 2,373,142 Florida Fish and Wildlife Conservation Commission: Direct Project: Nearshore Reef Monitoring Grant 77.007 FWC-06720 77,053 Total Florida Fish&Wildlife Conservation Commission 77,053 220 Indian River County,Florida Schedule of Expenditures of Federal Awards and State Projects For the Fiscal Year Ended September 30,2009 Federal/State Agency CFDA Contract/ Pass-through Entity CSFA Grant Transfers to Federal Program/State Project No. No. Expenditures Subrecipients STATE OF FLORIDA-Continued It Department of Health: Direct Project: County Awards Grant-Emergency Medical Svc 64.005 C8031 16,556 Total Department of Health 16,556 Department of Revenue: Direct Project: Facilities for Retained Spring Training Franchise- Dodgertown 73.016 N/A 500,004 Total Department of Revenue 500,004 TOTAL EXPENDITURES OF STATE FINANCIAL ASSISTANCE: $ 8,637,516 $ - United States Department of Agriculture: FHA Acquisition and Construction Revenue Bonds Loan Number Victory Park Phase I-1986 10.405 09-031-990986629-01-5 $ 744,000 Victory Park Phase II-1988 10.405 09-031-990986629-01-5 808,000 Victory Park-2009A 10.405 09-031-990986629-01-5 197,652 Orangewood Park Apartments-1991 10.405 09-031-812903861-01-2 1,047,400 Orangewood Park Apartments-2009B 10.405 09-031-801083563-01-0 638,727 TOTAL BONDS PAYABLE(FEDERALLY GUARANTEED): $ 3,435,779 221 Indian River County,Florida a Notes to Schedule of Expenditures of Federal Awards and State Projects For the Fiscal Year Ended September 30,2009 NOTE 1 -SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES The accounting policies and presentation of the Single Audit Report of Indian River County, Florida, (the"County")have been designed to conform to generally accepted accounting principles as applicable to governmental units,including the reporting and compliance requirements of the Audits of States,Local Governments,and Non-Profit Organizations and Office of Management and Budget Circular A-133. A.Reporting Entity The reporting entity consists of Indian River County,the primary government, and each of its component units. The County includes a Schedule of Expenditures of Federal Awards and State Projects in the Compli- ance Section. rl B.Basis of Accounting Basis of accounting refers to when revenues and expenditures or expenses are recognized in the accounts and reported in the financial statements. Basis of accounting relates to the timing of the measurements made,regardless of the measurement focus. The modified accrual basis of accounting is followed in the Schedule of Expenditures of Federal Awards and State Projects. Under the modified accrual basis, revenues are recognized when they become measurable and available. Revenues are considered to be available when they are collectible within the current period or soon enough thereafter to pay liabilities of the current period. For this purpose,the County considers rev- enues to be available if they are collected within 45 days after the end of the current fiscal period. Expendi- tures generally are recorded when a liability is incurred, as under accrual accounting. Actual disaster relief expenditures exceed the amount allowed by the Federal Emergency Management Agency for many projects. Future Schedules of Expenditures of Federal Awards and State Projects may be adjusted to reflect additional expenditures from current and prior fiscal years. 222 L Indian River County,Florida Schedule of Findings and Questioned Costs-Federal Awards and State Projects Year Ended September 30,2009 Section I—Summary of Auditors'Results Financial Statements Type of auditors'report issued Unqualified Internal control over financial reporting: Material weaknesses)identified? Yes X No Reportable condition(s)identified not considered to be material weaknesses? Yes X None reported Noncompliance material to financial statements noted? Yes X No Federal Awards and State Projects Internal control over major programs: Material weakness(es)identified? Yes X No Reportable condition(s)identified not considered to be material weaknesses? Yes X None reported Type of auditors'report issued on compliance for major federal programs and state projects Unqualified Any audit findings disclosed that are required to be reported in regards to the major federal programs or state projects? Yes X No Identification of major programs: CFDA Number Name of Federal Program or Cluster 14.228 HUD-CDBG Grant 14.238 HUD-Shelter Plus Care 14.871 HUD Section 8 Rental Assistance 20.205 DOT-Highway Planning and Construction 20.507 DOT-Federal Transit Formula Grant 93.563 HHS-Child Support Enforcement 97.039 DHS-Hazardous Mitigation Grant 10.405 FHA Acquisition&Construction Revenue Bonds: Victory Park Phase I Victory Park Phase II Orangewood Park Apartments CSFA Number Name of State Project 37.003 FDEP Beach Restoration 37.039 FDEP-Egret Marsh Storm Water 45.020 FDOS-Public Library Grant 52.901 FHFA-State Housing Initiative 55.010 FDOT-Public Transit Block Grant 55.023 FDOT-Traffic Enhancement/Sidewalk Program Dollar threshold used to distinguish between Type A and Type B programs $300,000 (Federal) $300,000 (State) Auditee qualified as low-risk auditee? X Yes No Section H—Financial Statement Findings There were no reportable conditions,material weaknesses,or instances of noncompliance related to the financial statements. Section III—Federal Award Findings and Questioned Costs There were no audit findings related to federal awards required to be reported by Circular A-133,Section 510(A). Section IV—Prior Year Findings and Questioned Costs No matters were reported 223 S N . ••' O N Now BOARD OF COUNTY COMMISSIONERS 225 .� ,. -.. � . ._ ��Y � � o ,. ;:. � � �' N •' O N �� !;i %' •a Harris, Cotherman, Jones, Price & Associates Certified Public Accountants-Chartered 5070 North Highway AIA,Suite 250 Vero Beach,FL 32963 Tel 772,234-8484 Fax 772-234.8488 Report on Special Purpose Financial Statements Prepared in Compliance with a Regulatory Provision That Results in an Incomplete Presentation But One That is Otherwise in Conformity with Generally Accepted Accounting Principles L The Honorable Board of County Commissioners rIndian River County,Florida We have audited the accompanying fund financial statements of Indian River County, Florida Board of County Commissioners as of and for the fiscal year ended September 30, 2009, as listed in the table of contents. These financial statements are the responsibility of the Board of County Commissioners' management. Our responsibility is to express an opinion on the financial statements based on our audit. We conducted our audit in accordance with generally accepted auditing standards and the standards applicable to financial audits contained in Government Auditing Standards issued by the Comptroller General of the United States. Those standards require that we plan and perform the audit to obtain reasonable assurance about whether the fund financial statements are free of material misstatement. An audit includes examining, on a test basis, evidence supporting the amounts and disclosures in the fund 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. As described in Note 1,the accompanying fund financial statements referred to above present fairly only the financial position of the Board of County Commissioners at September 30, 2009 and the results of operations for the year then ended in conformity with generally accepted accounting principles. These financial statements are not intended to be a complete presentation of the financial position of Indian River County. In our opinion, the fund financial statements referred to above present fairly, in all material respects,the financial position of the Board of County Commissioners as of September 30, 2009 and the results of operations for the year then ended in conformity with U. S.generally accepted accounting principles. In accordance with Government Auditing Standards, we have also issued reports dated March 12,2010 on our consideration of the Board of County Commissioners' internal control over financial reporting and on compliance and other matters,and a management letter. This report is intended solely for the information and use of management, the Board of County Commissioners,the Auditor General of the State of Florida,and applicable federal and state agencies,and is not intended to be�and should not be used by anyone other than these specified parties. Vero each,Florida March 12,2010 ,Providav Vision and Direction do our Clients" Member AICPA Member AICPA Division For CPA Finns Member FICPA lm Private Companies Practice Section 227 Indian River County,Florida Board of County Commissioners Balance Sheet Governmental Funds September 30,2009 Secondary Impact Roads General Fees Construction ASSETS Cash and cash equivalents $ 52,441,067 $ 47,272,970 $ 2,173,515 Accounts receivable 466,022 - - Special assessments receivable - ' Due from other funds 118,434 - - Due from other governments 4,298,539 25,416 14,210,599 Inventories 51,396 - - Prepaid expenses 4,345 109,847 - Advances to other funds - - 682,000 Total assets $ 57,379,803 $ 47,408,233 $ 17,066,114 LIABILITIES AND FUND BALANCES Liabilities: Accounts payable $ 1,706,489 $ 806,041 $ 1,433,112 Retainage payable 260 321,788 234,844 Due to other funds - - - Due to other governments 27,597 35,119 - Deferred revenues 64,176 - - Other deposits 73,028 - - Total liabilities 1,871,550 1,162,948 1,667,956 Fund balances: Reserved for: Economic incentives 8,000,000 - Debt service - Capital projects - - 14,217,224 Advances to other funds - - 682,000 Unreserved,reported in: General fund 47,508,253 - - Special revenue funds - 46,245,285 498,934 Total fund balances 55,508,253 46,245,285 15,398,158 Total and fund balances $ 57,379,803 $ 47,408,233 $ 17,066,114 - The accompanying notes are an integral part of the financial statements. 228 L Emergency Optional Other Total Services Sales Governmental Governmental Transportation District Tax Funds Funds $ 9,253,967 $ 14,718,736 $ 10,650,213 $ 23,668,925 $ 160,179,393 409 4,596 - 19,355 490,382 536,499 - - - 536,499 - - - - 118,434 225,613 962,147 23,573,309 438,832 43,734,455 - - - - 51,396 680 - - 114,872 - - - - 682,000 $ 10,016,488 $ 15,686,159 $ 34,223,522 $ 24,127,112 $ 205,907,431 $ 693,288 $ 925,601 $ 434,983 $ 658,973 $ 6,658,487 12,572 - 487,432 82,443 1,139,339 - - - 118,434 118,434 - - - - 62,716 536,499 209,199 966,313 566,626 2,342,813 - - - - 73,028 1,242,359 1,134,800 1,888,728 1,426,476 10,394,817 - - 8,000,000 4,316,570 4,316,570 32,334,794 1,701,452 48,253,470 - 682,000 - - - - 47,508,253 8,774,129 14,551,359 - 16,682,614 86,752,321 8,774,129 14,551,359 32,334,794 22,700,636 195,512,614 $ 10,016,488 $ 15,686,159 $ 34,223,522 $ 24,127,112 $ 205,907,431 229 Indian River County,Florida Board of County Commissioners Statement of Revenues,Expenditures,and Changes in Fund Balances Governmental Funds For the Year Ended September 30,2009 Secondary Impact Roads General Fees Construction REVENUES Taxes $ 64,153,092 $ - $ 3,369,962 Permits,fees and special assessments 9,835,444 2,054,049 39,896 Intergovernmental 10,693,308 410,311 632,159 Charges for services 5,890,930 - 88,309 Judgments,fines and forfeits 368,492 - Interest 2,138,236 1,631,210 10,185 Miscellaneous 1,050,553 14,697 36,492 Total revenues 94,130,055 4,110,267 4,177,003 EXPENDITURES Current: General government 11,388,120 137,280 - Public safety 4,904,697 - Physical environment 338,002 - Transportation 2,745,818 14,143,034 7,874,096 Economic environment 414,871 - - Human services 3,960,553 - Culture/recreation 9,925,985 1,888,483 - Court related 331,420 - Debt service: Principal " Interest and other fiscal charges Capital projects - Total expenditures 34,009,466 16,168,797 7,874,096 Excess of revenues over(under)expenditures 60,120,589 (12,058,530) (3,697,093) OTHER FINANCING SOURCES(USES) Transfers in 33,562 - - Transfers out (11,154,052) - Transfers to constitutional officers (46,366,105) - Total other financing sources(uses) (57,486,595) - Net change in fund balances 2,633,994 (12,058,530) (3,697,093) Fund balances at beginning of year 52,874,259 58,303,815 19,095,251 Fund balances at end of year $ 55,508,253 $ 46,245,285 $ 15,398,158 The accompanying notes are an integral part of the financial statements. 230 Emergency Optional Other Total Services Sales Governmental Governmental Transportation District Tax Funds Funds $ - $ 24,712,845 $ 13,023,095 $ 8,430,405 $ 113,689,399 210,395 - 19,862 273,952 12,433,598 2,640,252 834,296 4,371,860 13,658,595 33,240,781 59,386 4,575,200 - 656,235 11,270,060 - 13,600 - 112,500 494,592 264,792 652,283 285,548 650,477 5,632,731 773,028 13,628 198 619,811 2,508,407 3,947,853 30,801,852 17,700,563 24,401,975 179,269,568 549,445 - - 479,550 12,554,395 - 30,014,156 - 474,085 35,392,938 413,419 - - 158,792 910,213 13,122,490 - - 226,074 38,111,512 - - - 238,676 653,547 - - - 4,661,207 8,621,760 - - - 3,636,220 15,450,688 - - - 375,577 706,997 - - - 5,120,000 5,120,000 - - - 2,948,758 2,948,758 - - 10,136,664 298,548 10,435,212 14,085,354 30,014,156 10,136,664 18,617,487 130,906,020 (10,137,501) 787,696 7,563,899 5,784,488 48,363,548 10,923,180 - - 2,174,460 13,131,202 - (2,000,000) (33,562) (13,187,614) - (459,286) - (264,360) (47,089,751) 10,923,180 (459,286) (2,000,000) 1,876,538 (47,146,163) 785,679 328,410 5,563,899 7,661,026 1,217,385 7,988,450 14,222,949 26,770,895 15,039,610 194,295,229 $ 8,774,129 $ 14,551,359 $ 32,334,794 $ 22,700,636 $ 195,512,614 231 Indian River County,Florida Board of County Commissioners Statement of Revenues,Expenditures,and Changes in Fund Balances-Budget and Actual General Fund For the Year Ended September 30,2009 Variance with Final Budget Budgeted Amounts Actual Positive Original Final Amounts (Negative) REVENUES Taxes $ 63,004,382 $ 63,004,382 $ 64,153,092 $ 1,148,710 Permits and fees 8,851,625 8,851,625 9,835,444 983,819 Intergovernmental 10,508,897 11,884,509 10,693,308 (1,191,201) Charges for services 6,050,686 6,141,292 5,890,930 (250,362) Judgments,fines and forfeits 293,740 293,740 368,492 74,752 Interest 1,225,088 1,362,750 $2,138,236 775,486 Miscellaneous 405,142 509,840 $1,050,553 540,713 Total revenues 90,339,560 92,048,138 94,130,055 2,081,917 EXPENDITURES Current: General government 12,212,006 12,545,688 11,388,120 1,157,568 Public safety 5,022,502 5,240,160 4,904,697 335,463 Physical environment 365,711 365,711 338,002 27,709 Transportation 988,065 3,100,039 2,745,818 354,221 Economic environment 339,252 8,431,488 414,871 8,016,617 Human services 4,186,097 4,264,734 3,960,553 304,181 Culture/recreation 10,326,480 10,736,724 9,925,985 810,739 Court related 375,949 359,071 331,420 27,651 Total expenditures 33,816,062 45,043,615 34,009,466 11,034,149 Excess of revenues over expenditures 56,523,498 47,004,523 60,120,589 13,116,066 OTHER FINANCING SOURCES(USES) - 33,562 33,562 Transfers in Transfers out (11,154,008) (11,164,153) (11,154,052) 10,101 Transfers to constitutional officers (46,860,774) (47,800,856) (46,366,105) 1,434,751 Total other financing sources(uses) (58,014,782) (58,931,447) (57,486,595) 1,444,852 Net change in fund balances (1,491,284) (11,926,924) 2,633,994 $ 14,560,918 Fund balances at beginning of year 1,491,284 11,926,924 52,874,259 Fund balances at end of year $ - $ - $ 55,508,253 The accompanying notes are an integral part of the financial statements. 232 Indian River County,Florida Board of County Commissioners Statement of Revenues,Expenditures,and Changes in Fund Balances-Budget and Actual Impact Fees Fund For the Year Ended September 30,2009 Variance with Final Budget Budgeted Amounts Actual Positive Original Final Amounts (Negative) REVENUES Permits,fees and special assessments $ 4,888,517 $ 4,888,517 $ 2,054,049 $ (2,834,468) Intergovernmental - 1,700,000 410,311 (1,289,689) Interest 1,306,250 1,306,250 1,631,210 324,960 Miscellaneous - - 14,697 14,697 Total revenues 6,194,767 7,894,767 4,110,267 (3,784,500) EXPENDITURES Current: General government 759,466 224,560 137,280 87,280 Public safety 500,000 500,000 - 500,000 Transportation 3,659,500 38,468,130 14,143,034 24,325,096 Culture/recreation 1,500,000 3,705,918 1,888,483 1,817,435 Total expenditures 6,418,966 42,898,608 16,168,797 26,729,811 Excess of revenues over(under)expenditures (224,199) (35,003,841) (12,058,530) 22,945,311 OTHER FINANCING USES Transfers out (350,000) (1,933,266) - 1,933,266 Total other financing uses (350,000) (1,933,266) - 1,933,266 Net change in fund balances (574,199) (36,937,107) (12,058,530) $ 24,878,577 Fund balances at beginning of year 574,199 36,937,107 58,303,815 Fund balances at end of year $ - $ - $ 46,245,285 The accompanying notes are an integral part of the financial statements. 233 Indian River County,Florida Board of County Commissioners Statement of Revenues,Expenditures,and Changes in Fund Balances-Budget and Actual Secondary Roads Construction Fund For the Year Ended September 30,2009 Variance with Final Budget Budgeted Amounts Actual Positive Original Final Amounts (Negative) REVENUES Taxes $ 3,383,413 $ 3,383,413 $ 3,369,962 $ (13,451) Permits,fees and special assessments - - 39,896 39,896 Intergovernmental - 1,163,894 632,159 (531,735) Charges for services - - 88,309 88,309 Interest 380,000 380,000 10,185 (369,815) Miscellaneous - - 36,492 36,492 Total revenues 3,763,413 4,927,307 4,177,003 (750,304) EXPENDITURES Current: 56,735 20,049,983 7,874,096 12,175,887 Transportation 3,7 Total expenditures 3,756,735 20,049,983 7,874,096 12,175,887 3 697, Net change in fund balances 6,678 (15,122,676) 093 $( ) 11,425,583 Fund balances at beginning of year (6,678) 15,122,676 19,095,251 Fund balances at end of year $ - $ - $ 15,398,158 The accompanying notes are an integral part of the financial statements. 234 Indian River County,Florida Board of County Commissioners Statement of Revenues,Expenditures,and Changes in Fund Balances-Budget and Actual Transportation Fund For the Year Ended September 30,2009 Variance with Final Budget Budgeted Amounts Actual Positive Original Final Amounts (Negative) REVENUES Permits,fees and special assessments $ 263,625 $ 263,625 $ 210,395 $ (53,230) Intergovernmental 2,519,795 2,360,064 2,640,252 280,188 Charges for services 114,950 114,950 59,386 (55,564) Interest 142,500 142,500 264,792 122,292 Miscellaneous 1,160,016 3,146,650 773,028 (2,373,622) Total revenues 4,200,886 6,027,789 3,947,853 (2,079,936) EXPENDITURES Current: General government 527,371 569,576 549,445 20,131 Physical environment 711,681 752,681 413,419 339,262 Transportation 13,998,348 16,405,460 13,122,490 3,282,970 Total expenditures 15,237,400 17,727,717 14,085,354 3,642,363 Excess of revenues over(under)expenditures (11,036,514) (11,699,928) (10,137,501) 1,562,427 OTHER FINANCING SOURCES Transfers in 10,923,180 10,923,180 10,923,180 - Total other financing sources 10,923,180 10,923,180 10,923,180 - Net change in fund balances (113,334) (776,748) 785,679 $ 1,562,427 Fund balances at beginning of year 113,334 776,748 7,988,450 Fund balances at end of year $ - $ - $ 8,774,129 The accompanying notes are an integral part of the financial statements. 235 Indian River County,Florida Board of County Commissioners Statement of Revenues,Expenditures,and Changes in Fund Balances-Budget and Actual Emergency Services District Fund For the Year Ended September 30,2009 Variance with Final Budget Budgeted Amounts Actual Positive Original Final Amounts (Negative) REVENUES Taxes $ 24,365,273 $ 24,365,273 $ 24,712,845 $ 347,572 Intergovernmental 20,900 857,480 834,296 (23,184) Charges for services 3,046,175 3,046,175 4,575,200 1,529,025 Judgments,fines and forfeits - 13,600 13,600 Interest 237,500 237,500 652,283 414,783 9,770 9,770 13,628 3,858 Miscellaneous Total revenues 27,679,618 28,516,198 30,801,852 2,285,654 EXPENDITURES Current: Public safety 26,226,516 33,637,334 30,014,156 3,623,178 Debt service: Principal 89,043 89,043 - 89,043 Interest and other fiscal charges 90,210 90,210 - 90,210 Total expenditures 26,405,769 33,816,587 30,014,156 3,802,431 Excess of revenues over(under)expenditures 1,273,849 (5,300,389) 787,696 6,088,085 OTHER FINANCING USES Transfers to constitutional officers (527,729) (516,506) (459,286) 57,220 Total other financing uses (527,729) (516,506) (459,286) 57,220 Net change in fund balances 746,120 (5,816,895) 328,410 $ 6,145,305 Fund balances at beginning of year (746,120) 5,816,895 14,222,949 Fund balances at end of year $ - $ - $ 14,551,359 The accompanying notes are an integral part of the financial statements. 236 Indian River County,Florida Board of County Commissioners Statement of Net Assets Proprietary Funds September 30,2009 Enterprise Funds Solid Waste Disposal Golf County County Internal District Course Utilities Building Total Service Funds ASSETS Current assets: Cash and cash equivalents S 16,874,204 S 9,727 $ 28,535,779 S 4,171,655 $ 49,591,365 $ 25,711,338 Accounts receivable-net 114,406 - 2,531,648 - 2,646,054 1,149,295 Due from other governments 979,884 11,700 271 991,855 96,664 Interest receivable 81,990 2,147 625,368 10,885 720,390 52,432 Inventories - 44,569 979,903 - 1,024,472 121,929 Prepaid expenses 1,000 - 1,090 2,090 1,010,028 Current restricted assets: Cash and cash equivalents 13,939,253 471,264 32,218,164 - 46,628,681 - Total current assets 31,990,737 539,407 64,892,223 4,182,540 101,604,907 28,141,686 Non-current assets: Unamortized bond costs 257,295 4,109,953 - 4,367,248 - Capital assets-non-depreciable 19,155,483 669,630 38,927,374 - 58,752,487 - Capital assets-depreciable 21,469,266 8,559,920 360,713,220 499,953 391,242,359 954,353 Accumulated depreciation (9,970,909) (2,032,258) (154,502,192) (440,049) (166,945,408) (324,693) Non-current restricted assets: Special assessments receivable 1,458,527 1,458,527 Impact fees receivable 874,785 874,785 Liens receivable 1,205,484 1,205,484 - Total non-current assets 30,653,840 7,454,587 252,787,151 59,904 290,955,482 629,660 Total assets 62,644,577 7,993,994 317,679,374 4,242,444 392,560,389 28,771,346 LIABILITIES Current liabilities(payable from current assets): Accounts payable 1,766,423 64,729 1,164,646 40,556 3,036,354 210,054 Retainage payable 387,686 - - - 387,686 - Claims payable - - - - 2,348,660 Due to other governments 8,677 4,785 13,462 - Uneamed revenues 37,390 - 37,390 Other deposits 2,000 - - 2,000 Pollution remediation costs payable - - 9,760 9,760 - Accrued compensated absences 104,280 43,508 272,253 31,145 451,186 18,415 Total current liabilities(payable from current assets) 2,258,389 156,304 1,446,659 76,486 3,937,838 2,577,129 Current liabilities(payable from restricted assets) Accounts payable - - 1,799,914 1,799,914 - Retainage payable - 915,917 915,917 Accrued interest payable 11,264 214,527 225,791 it Bonds payable - 510,000 2,870,000 3,380,000 Closure and maintenance costs payable 1,795,542 - - 1,795,542 Customer deposits 164,166 2,572,052 2,736,218 Total current liabilities(payable from restricted assets) 1,959,708 521,264 8,372,410 10,853,382 Total current liabilities 4,218,097 677,568 9,819,069 76,486 14,791,220 2,577,129 Non-current liabilities: Accrued compensated absences 136,369 33,475 358,146 78,678 606,668 22,324 Advance from other funds - 682,000 - - 682,000 - Claims payable - - - 5,526,340 Pollution remediation costs payable - 34,240 34,240 - Closure and maintenance costs payable 8,632,433 - - 8,632,433 Bonds payable-net of discount and premium 3,142,985 53,253,413 56,396,398 - Total non-current liabilities 8,768,802 3,858,460 53,645,799 78,678 66,351,739 5,548,664 Total liabilities 12,986,899 4,536,028 63,464,868 155,164 81,142,959 8,125,793 NET ASSETS Invested in capital assets,net of related debt 30,653,840 3,544,307 189,014,989 59,904 223,273,040 629,660 Restricted for. Debt service - 42,500 239,167 - 281,667 - capital projects - - 50,740,261 - 50,740,261 Unrestricted 19,003,838 (128,841) 14,220,089 4,027,376 37,122,462 20,015,893 Total net assets $ 49,657,678 $ 3,457,966 S 254,214,506 $ 4,087,280 $ 311,417,430 $ 20,645,553 L The accompanying notes are an integral part of the financial statements. 237 Indian River County, Florida Board of County Commissioners Statement of Revenues,Expenses, and Changes in Fund Net Assets Proprietary Funds For the Year Ended September 30,2009 Enterprise Funds Solid Waste Disposal Golf District Course OPERATING REVENUES Charges for services $ 9,713,883 $ - Charges for services pledged as security for revenue bonds - 3,279,135 Total operating revenues 9,713,883 3,279,135 OPERATING EXPENSES Personal services 2,839,996 705,398 Material, supplies, services and other operating 6,693,589 1,875,856 Depreciation 873,852 166,602 Total operating expenses 10,407,437 2,747,856 Operating income(loss) (693,554) 531,279 NONOPERATING REVENUES(EXPENSES) Interest income 1,436,998 - Interest income pledged as security for revenue bonds - 13,035 Operating grants 856,925 - Gain on disposal of equipment - 1,332 Interest expense - (147,780) Bond amortization expense - (41,505) Loss on disposal of equipment - State shared revenue - 417,500 Total nonoperating revenues(expenses) 2,293,923 242,582 Income(loss)before transfers and capital contributions 1,600,369 773,861 Capital contributions - - Capital contributions pledged as security for revenue bonds - Transfers in - Change in net assets 1,600,369 773,861 Total net assets-beginning 48,057,309 2,684,105 Total net assets-ending $ 49,657,678 $ 3,457,966 The accompanying notes are an integral part of the financial statements. 238 County County Internal Utilities Building Total Service Funds $ - $ 1,572,693 $ 11,286,576 $ 24,724,017 26,957,649 - 30,236,784 - 26,957,649 1,572,693 41,523,360 24,724,017 8,093,873 1,504,805 13,144,072 3,163,701 11,827,094 575,994 20,972,533 18,110,069 14,437,671 88,095 15,566,220 110,221 34,358,638 2,168,894 49,682,825 21,383,991 (7,400,989) (596,201) (8,159,465) 3,340,026 - 125,741 1,562,739 380,559 2,110,031 - 2,123,066 - 338,069 1,194,994 6,561 - 7,893 1,850 (2,807,964) _ (2,955,744) - (211,991) (253,496) (144,504) - (144,504) - - - 417,500 - (709,798) 125,741 1,952,448 382,409 (8,110,787) (470,460) (6,207,017) 3,722,435 (25,642,735) - (25,642,735) - 36,844,225 - 36,844,225 - - - - 56,412 3,090,703 (470,460) 4,994,473 3,778,847 251,123,803 4,557,740 306,422,957 16,866,706 $ 254,214,506 $ 4,087,280 $ 311,417,430 $ 20,645,553 239 Indian River County,Florida Board of County Commissioners Statement of Cash Flows Proprietary Funds For the Year Ended September 309 2009 Enterprise Funds j Solid Waste Disposal Golf District Course CASH FLOWS FROM OPERATING ACTIVITIES Cash received from customers $ 9,272,640 $ 3,271,331 Cash paid to suppliers for goods and services (7,257,595) (1,861,190) Cash paid to employees for services (2,813,024) (730,699) Net cash provided by(used in)operating activities (797,979) 679,442 CASH FLOWS FROM NONCAPITAL FINANCING ACTIVITIES Transfers in Operating grants(repayments) (20,971) Payments on advances to other funds - (30,000) State shared revenues - 417,500 Net cash provided by(used in)noncapital financing activities (20,971) 387,500 CASH FLOWS FROM CAPITAL AND RELATED FINANCING ACTIVITIES Principal payments-bonds/notes - ( ,000) (28 Principal payments-capital leases - (28,126) 903) Interest paid on long-term debt - (148, Proceeds from sales of capital assets 1,333232 Purchase of capital assets (4,375,808) - Bond issuance and refunding costs Capital contributed by others Net cash used in capital and related financing activities (4,375,808) (665,697) CASH FLOWS FROM INVESTING ACTIVITIES Interest and dividends on investments 1,507,173 11,373 Net cash provided by investing activities 1,507,173 11,373 Net increase(decrease)in cash and cash equivalents (3,687,585) 412,618 Cash and cash equivalents at beginning of year 34,501,042 68,373 Cash and cash equivalents at end of year $ 30,813,457 $ 480,991 Classified as: Current assets $ 16,874,204 $ 9,727 Restricted assets 13,939,253 471,264 Totals $ 30,813,457 $ 480,991 The accompanying notes are an integral part of the financial statements. 240 County County Internal Utilities Building Total Service Funds $ 26,147,801 $ 1,572,693 $ 40,264,465 $ 24,739,869 (15,799,172) (589,424) (25,507,381) (16,781,549) (8,091,949) (1,531,410) (13,167,082) (3,177,402) 2,256,680 (548,141) 1,590,002 4,780,918 - - 56,412 534,840 - 513,869 - = � (30,000) 417,500 534,840 - 901,369 56,412 (2,745,000) - (3,235,000) - - (28,126) - (2,047,513) - (2,196,416) - 6,561 - 7,893 1,850 (15,833,438) (6,735) (20,215,981) (104,613) (618,553) - (618,553) - 1,703,656 - 1,703,656 (19,534,287) (6,735) (24,582,527) (102,763) 2,303,629 134,932 3,957,107 375,379 2,303,629 134,932 3,957,107 375,379 (14,439,138) (419,944) (18,134,049) 5,109,946 75,193,081 4,591,599 114,354,095 20,601,392 $ 60,753,943 $ 4,171,655 $ 96,220,046 $ 25,711,338 $ 28,535,779 $ 4,171,655 $ 49,591,365 $ 25,711,338 32,218,164 - 46,628,681 - $ 60,753,943 $ 4,171,655 $ 96,220,046 $ 25,711,338 Continued 241 Indian River County,Florida Board of County Commissioners Statement of Cash Flows Proprietary Funds For the Year Ended September 30,2009 Enterprise Funds Solid Waste Disposal Golf District Course RECONCILIATION OF NET OPERATING INCOME(LOSS)TO NET CASH PROVIDED BY(USED IN)OPERATING ACTIVITIES Operating income(loss) $ (693,554)$ 531,279 Adjustments to reconcile operating income to net cash provided by operating activities: Expenses reclassified as work in progress (336,107) - Depreciation 873,852 166,602 Capitalized self-incurred expenses (Increase)Decrease in assets: Accounts receivable 61,047 - Due from other governments 454 (200) Intangible assets (163,619) - Inventories - (1,564) Impact fees receivable - - Liens receivable Prepaid items (1,000) - Increase(Decrease)in liabilities: Accounts payable 841,007 1 ,103 1 Due to other governments - 1,127 Retainage payable - Customer deposits (3,018) - Closure and maintenance costs payable (1,404,013) Unearned revenues - (7,604) Claims payable - - Accrued compensated absences 26,972 (25,301) Total adjustments (104,425) 148,163 Net cash provided by(used in)operating o activities $ (797,979)$ 679,442 g NONCASH CAPITAL AND RELATED FINANCING ACTIVITIES Change in fair value of investments $ 261,600 $ 6,851 Contributed property,plant and equipment $ - $ - Capital assets purchased through accounts payable $ - $ The accompanying notes are an integral part of the financial statements. 242 County County Internal Utilities Building Total Service Funds $ (7,400,989) $ (596,201) $ (8,159,465) $ 3,340,026 (2,453,493) - (2,789,600) - 14,437,671 88,095 15,566,220 110,221 (28,183) (28,183) 339,599 - 400,646 (57,987) - 254 73,839 (300,000) (463,619) (107,621) - (109,185) 64,641 107,956 - 107,956 - (718,265) (718,265) (1,090) - (2,090) 413,669 (1,468,061) (11,822) (623,773) (118,892) (17,233) (1,608) (17,714) - (10,898) (122,293) - (125,311) - (41,425) - (1,445,438) - (7,604) - - - - 980,000 30,107 (26,605) 5,173 (13,701) 9,657,669 48,060 9,749,467 1,440,892 $ 2,256,680 $ (548,141) $ 1,590,002 $ 4,780,918 $ 523,538 $ 34,730 $ 826,719 $ 89,324 $ 10,021,194 $ - $ 10,021,194 $ $ 1,585,577 $ - $ 1,585,577 $ - 243 Indian River County,Florida Board of County Commissioners Statement of Fiduciary Net Assets Fiduciary Funds September 30,2009 Other Postemployment Agency Benefits Trust ASSETS Cash and cash equivalents $ 6,822,581 $ 301 Investments - 4,792,501 Total assets $ 6,822,581 4,792,802 LIABILITIES Accounts payable $ 452,584 - Benefits payable - 1,102,210 Other deposits held in escrow 6,369,997 - Total liabilities $ 6,822,581 1,102,210 NET ASSETS Assets held in trust for other postemployment benefits 3,690,592 Total net assets $ 3,690,592 The accompanying notes are an integral part of the financial statements. 244 Indian River County,Florida Board of County Commissioners Statement of Changes in Fiduciary Net Assets Other Postemployment Benefits Trust Fund For the Year Ended September 30,2009 ADDITIONS Employer contributions $ 2,789,109 Investment income 388,826 Total assets 3,177,935 DEDUCTIONS Benefits payments 1,102,210 Total liabilities 1,102,210 Increase in fiduciary net assets 2,075,725 NET ASSETS,OCTOBER 1,2008 1,614,867 NET ASSETS,SEPTEMBER 30,2009 $ 3,690,592 The accompanying notes are an integral part of the financial statements. 245 �� o .. r , r:; �,/ 1 N • ••• O ;. � �1;: �: � Indian River County,Florida Board of County Commissioners Notes To Financial Statements Year Ended September 30, 2009 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 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. 247 n River County,Florida India ty, Board of County Commissioners Notes To Financial Statements Year Ended September 30, 2009 NOTE 1 -SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES - Continued B. Fund Financial Statements system of the Board is organized and on the basis of separate funds,o The underlying accounting y g p each of which is considered to be a separate accounting entity. The operations of each fund are accounted for with a separate set of self-balancing accounts that comprise its assets, liabilities, fund equity, revenues and expenditures or expenses, as appropriate. Governmental resources are allocated to and accounted for in individual funds based upon the purposes for which they are to be spent and the means by which spending activities are controlled. Fund financial statements for the Board's governmental, proprietary, and fiduciary funds are presented. Governmental accounting standards set forth minimum criteria (percentage of the assets, liabilities, revenues or expenditures/expenses of either fund category and the governmental and enterprise combined) for the determination of major funds. These statements display information about major funds individually and nonmajor funds in the aggregate for governmental and enterprise funds. The Statement of Fiduciary Net Assets presents assets held by the Board in a custodial capacity for other individuals or organizations. fund expenses are considered to be When both restricted and unrestricted resources are combined m a ex p paid first from restricted resources, and then from unrestricted resources. Governmental Funds Governmental fund financial statements are reported using the current financial resources measurement focus and the modified accrual basis of accounting. Revenues are recognized as soon as they are both measurable and available. Revenues are considered to be available when they are collectable within the current period or soon enough thereafter to pay liabilities of the current period. For this purpose, the Board considers revenues to be available if they are collected within 45 days after the end of the current fiscal period. Expenditures generally are recorded when a liability is incurred, as under accrual accounting. Franchise fees, sales taxes, gas taxes, operating and capital grants, and interest associated with the current fiscal period are all considered to be susceptible to accrual and so have been recognized as revenues of the current fiscal period. All other revenue items are considered to be measurable only when cash is received by the Board. Under the current financial resources measurement focus, only current assets and current liabilities are generally included on the balance sheet. The reported fund balance is considered to be a measure of "available spendable resources". Governmental funds operating statements present increases (revenues and other financing sources) and decreases (expenditures and other financing uses) in net current assets. Accordingly, they are said to present a summary of sources and uses of"available spendable resources" during a period. Non-currentortions of long-term receivables due to governmental funds are reported on their balance p g sheets in spite of their spending measurement focus. Non-current portions of long-term advances and notes to other funds are offset by fund balance reserve accounts. 248 Indian River County,Florida a Board of County Commissioners Notes To Financial Statements Year Ended September 30, 2009 NOTE 1 - SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES—Continued B. Fund Financial Statements—Continued Because of their spending measurement focus expenditure p e recognition for governmental fund types excludes amounts represented by non-current liabilities. Since they do not affect net current assets, such long-term amounts are not recognized as governmental fund type expenditures or fund liabilities. Amounts expended to acquire capital assets are recorded as expenditures in the year that resources were expended, rather than as fund assets. The proceeds of long-term debt are recorded as an other financing source rather than as a fund liability. Debt service expenditures, as well as expenditures related to compensated absences and claims and judgments, are recorded only when payment is due. Provrietary Funds The Board's enterprise and internal service funds are proprietary funds. In the fund financial statements, proprietary funds are presented using the accrual basis of accounting. Revenues are recognized when they are earned and expenses are recognized when the related goods or services are delivered. In the fund financial statements, proprietary funds are presented using the economic resources measurement focus. This means that all assets and all liabilities (whether current or non-current) associated with their activity are included on their balance sheets. Proprietary fund type operating statements present increases (revenues) and decreases (expenses) in total net assets. The Board applies all GASB Pronouncements as well as all FASB Statements and Interpretations, APB Opinions and Accounting Research Bulletins, issued after November 30, 1989, which do not conflict with or contradict GASB Pronouncements. Proprietary fund operating revenues, such as charges for services, result from exchange transactions associated with the principal activity of the fund. Exchange transactions are those in which each party receives and gives up essentially equal values. Non-operating revenues, such as subsidies, taxes, and investment earnings result from nonexchange transactions or ancillary activities. Amounts paid to acquire capital assets are capitalized as assets in the fund financial statements, rather than reported as an expense. Proceeds of long-term debt are recorded as a liability in the fund financial statements, rather than as an other financing source. Amounts paid to reduce long-term indebtedness are reported as a reduction of the related liabilities, rather than as an expense. Fiduciary Funds The fiduciary financial statements include financial information for the agency fund and the other postemployment benefits trust fund. The agency fund of the Board primarily represents assets held by the Board in a custodial capacity for other individuals or governments. The other postemployment benefits trust fund (Trust) accounts for activities of the Trust, which accumulates resources for health insurance benefit payments for current retirees and for current employees upon their retirement. The agency and Trust fund statements are presented using the accrual basis of accounting. 249 Indian River County,Florida Board of County Commissioners Notes To Financial Statements Year Ended September 30, 2009 NOTE I - SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES-Continued B. Fund Financial Statements- Continued Governmental Maior Funds General Fund—The General Fund is the general operating fund of the County. It is used to account for all financial resources, except those required to be accounted for in another fund. Impact Fees Fund— The Impact Fees Fund accounts for the receipt of various impact fees. Funds are used for the construction of roads and bridges, correctional, public safety, library, park, public building, and solid waste facilities. Secondary Roads Construction Fund — The Secondary Roads Constructions Fund accounts for the expenditures of road and bridge construction. Financing is provided by collections of the local option gas tax. Transportation Fund—The Transportation Fund accounts for expenditures incurred for the maintenance and repair of County roads. Financing is provided by the 5th and 6th cent gas tax, County gas tax and transfers from the General Fund. Emergency Services District Fund — The Emergency Services District Fund accounts for the expenditures of providing fire protection and advanced life support to the County. Ad valorem taxes are the primary source of revenue. Optional Sales Tax Fund — The Optional Sales Tax Fund accounts for revenue generated by the local option one-cent sales tax and some capital grants that use the local option one-cent sales tax as matching funds. Monies are used for various capital projects. Prop �rie Ma'or Funds Solid Waste Disposal District — The Solid Waste Disposal District Fund accounts for the revenues, expenses, assets and liabilities associated with the County landfill. Golf Course Fund — The Golf Course Fund accounts for the revenues, expenses, assets and liabilities associated with the Golf Course. County Utilities Fund — The County Utilities Fund accounts for the revenues, expenses, assets and liabilities associated with the County water and sewer system. County Building Fund — The County Building Fund accounts for revenues, expenses, assets, and liabilities associated with the County building permit and inspection program. 250 Indian River County,Florida Board of County Commissioners Notes To Financial Statements Year Ended September 30, 2009 NOTE 1 -SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES - Continued B. Fund Financial Statements -Continued Other Fund Types Internal Service Funds — Internal Service Funds account for Fleet Management, Self Insurance and Geographic Information Systems services provided to other departments of the County on a cost reimbursement basis. Agency Fund — The Agency Fund is used to account for assets held in a custodial capacity by the County for other governmental units, other funds, individuals and businesses. Examples include payroll deductions, self insurance premiums, and developer escrow funds. Other Postemployment Benefits Trust Fund— The Other Postemployment Benefits Trust Fund accounts for activities of the Trust, which accumulates resources for health insurance benefit payments for current retirees and for current employees upon their retirement. Contributions are recorded when earned and benefit payments and refunds when incurred within each year. C. Cash and Cash Equivalents Cash and cash equivalents include deposits and all highly liquid investments with maturities of ninety days or less when purchased. The Board maintains a cash and investment pool that is available for use by all funds. Earnings for the pooled investments are allocated to the respective funds based on applicable cash participation by each fund. The investment pool is managed such that all participating funds have the ability to deposit and withdraw cash as if they were demand deposit accounts. Therefore, all balances representing participants' equity in the investment pools are classified as cash and cash equivalents for financial statement purposes. In addition, longer-term investments are held by several of the Board's funds and are, therefore, reported as current restricted cash and cash equivalents on these statements. D. Investments Investments consist of U.S. Treasury Securities, U.S. Government Agency Securities, money market funds, Florida PRIME Fund (formerly known as the Local Government Surplus Funds Trust Fund Investment (SBA) Fund A), Fund B Surplus Funds Trust Fund, and the Florida Local Government Investment Trust Fund (FLGIT). Investments are reported at fair value based upon the average price obtained from three brokers/dealers. The SBA and FLGIT values are based upon the fair market value per share of the underlying portfolio. Refer to Note 2-C, Investments, for further information on individual investments. E. Allowance for Doubtful Accounts The Board provides an allowance for water and sewer accounts receivables that may become uncollectable. At September 30, 2009, this allowance was $424,493. No other allowances for doubtful accounts are maintained since other accounts receivable are considered collectable as reported at September 30, 2009. 251 Indian River County,Florida Board of County Commissioners Notes To Financial Statements Year Ended September 30,2009 NOTE 1 - SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES - Continued F. Inventories Inventories are valued at cost, which approximates market, using the "first-in, first-out" method of accounting, with the exception of the Fleet Internal Service Fund's fuel inventory which is valued using the average cost method of accounting. Inventories of all funds are recorded as expenditures (expenses) when consumed rather than when purchased. G. Prepaid Items This account represents prepayments for services that will be used in future periods. The Board's policy is to record the expenditure for the services when they are used rather than when the cash is disbursed. H. Capital Assets Capital assets, which include property, plant, equipment, infrastructure (e.g., roads, bridges, right-of- ways, water and sewer distribution systems, beach restoration, stormwater systems and similar items), and intangible assets (e.g. software, easements, and rights), are reported in the applicable governmental or business-type activities column in the government-wide financial statements. The County defines capital assets as assets with an initial, individual cost of$1,000 or more and an estimated useful life in excess of one year. Except for roads and bridges constructed prior to October 1, 1981, assets are recorded at historical cost. Roads and bridges constructed prior to October 1, 1981 are reported at estimated historical cost. Donated capital assets are recorded at estimated fair market value at the date of donations. The costs of normal maintenance and repairs that do not add to the value of the asset nor materially extend its useful life are not capitalized. Major outlays for capital assets and improvements are capitalized as projects are constructed. Interest incurred during the construction phase of capital assets of business-type activities is included as part of the capitalized value of the assets constructed. The Board holds legal title to the capital assets used in the operations of the Board, Clerk of the Circuit Court, Property Appraiser, Supervisor of Elections and Tax Collector, and is accountable for them under Florida Law. Capital assets used by the Board's governmental funds are reported in the financial statements of the County. Capital assets of the Board's enterprise and internal service funds are reported in the Proprietary Funds' financial statements. 252 Indian River County,Florida Board of County Commissioners Notes To Financial Statements Year Ended September 30, 2009 NOTE 1 -SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES—Continued H. Capital Assets - Continued Property, plant, equipment,uipment, intangible, and infrastructure assets of the primary government, as well as P the component units, are depreciated, or amortized as in the case of intangible assets, using the straight- line method over the following estimated useful lives: Assets Year Building and improvements 25 -50 Machinery and equipment 3 - 10 Utility distribution systems 25 -50 Road and bridge infrastructure 20-50 Fiberoptics 20 Software 3-5 Beach preservation infrastructure 7 Stormwater infrastructure 30 I. Capitalization of Interest Interest costs related to bond issues are capitalized during the construction period. These costs are netted against applicable interest earnings on construction fund investments. During the current period, the Board did not have any capitalized interest. J. Unamortized Bond Costs Bond issuance costs and legal fees associated with the issuance of Proprietary Fund revenue bonds are amortized over the life of the bonds using the straight-line method of accounting. K. Unamortized Bond Discounts and Premiums Bond discounts and premiums associated with the issuance of Proprietary Fund revenue bonds are amortized over the life of the bonds according to the straight-line method. For financial reporting, unamortized bond discounts and premiums are netted against the applicable long-term debt. L. Landfill Closure Costs Under the terms of current state and federal regulations, the Solid Waste Disposal District (SWDD) is required to place a final cover on closed landfill areas, and to perform certain monitoring and maintenance functions for a period of up to thirty years after closure. The SWDD recognizes these costs of closure and post-closure maintenance over the active life of each landfill area, based on landfill capacity used during the period. Required obligations for closure and post-closure costs are recognized in the Solid Waste Disposal District Enterprise Fund. 253 Indian River County, Florida Board of County Commissioners Notes To Financial Statements Year Ended September 30, 2009 NOTE 1 - SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES—Continued M. Deferred Revenues In governmental fund financial statements (in accordance with the modified accrual basis of accounting), deferred revenues represent revenues, which are measurable but not available, or received and unearned. N. Accrued Compensated Absences The Board does not report compensated absences in the governmental fund statements since they are not current liabilities payable from available spendable resources. They are reported in the financial statements of the County. Proprietary fund types accrue compensated absences in the period they are earned. O. Obligation for Bond Arbitrage Rebate Pursuant to Section 148(f) of the U.S. Internal Revenue Code, the Board must rebate to the United States Government the excess of interest earned from the investment of certain debt proceeds and pledged revenues over the yield rate of the applicable debt. The Board has no arbitrage liability outstanding as of September 30, 2009. P. New Accounting Pronouncements Effective October 1, 2008, the County implemented the provisions of GASB Statement No. 49 Accounting and Financial Reporting for Pollution Remediation Obligations and GASB Statement No. 51, Accounting and Financial Reporting for Intangible Assets. See Note 12 for further details on the Board's pollution remediation obligation and Note 1-H for a description of intangible assets. Q. Budgets and Budgetary Accounting The Board uses the following procedures in establishing the budgetary data reflected in the financial statements: 1. The constitutional officers submit, at various times, to the Board and to certain divisions within the Department of Revenue, State of Florida, a proposed operating budget for the fiscal year commencing the following October 1. The operating budget includes proposed expenditures and the means of financing them, as set forth in Chapter 129 of the Florida Statutes. 2. The Department of Revenue, State of Florida, has the final authority on the operating budgets for the Tax Collector and the Property Appraiser included in the General Fund. 3. Constitutional officers, g all departments controlled by the Board, and outside state and local agencies submit their proposed budgets to the Office of Management and Budget for assistance, review, and compilation. The County Administrator then reviews all County departments, state agencies, and nonprofit organization's budgets and makes his budget recommendation to the Board. 254 Indian River County,Florida Board of County Commissioners Notes To Financial Statements Year Ended September 30, 2009 NOTE I - SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES—Continued Q. Budgets and Budgetary Accounting—Continued 4. On or before July 15 of each year, the County Administrator and the Director of the Office of Management and Budget, as the Board's designated budget officer, submit to the Board a tentative budget for the ensuing fiscal year. The tentative budget includes proposed expenditures and the means of financing them. The Board then holds workshops to review the tentative budget by fund on a departmental level. 5. During September, public hearings are held pursuant to Section 200.065 of the Florida Statutes in order for the Board to receive public input on the tentative budget. At the end of the last public hearing, the Board enacts resolutions to legally adopt the budgets at the fund level for all but two governmental and proprietary fund types. The budgets legally adopted by the Board set forth the anticipated revenues by source and the appropriations by function. 6. Formal budgetary integration on an object level is used as a management control device for the g �' g J governmental and proprietary funds of the Board. Management is authorized to transfer budgeted amounts between objects and departments in any fund as long as management does not exceed the total appropriations of a fund. Board approval to amend the budget is only required when unanticipated revenues are received that management wishes to have appropriated, thereby increasing the total appropriations of a fund. 7. Budgets for the governmental and proprietary fund types are adopted on a basis consistent with generally accepted accounting principles. 8. Appropriations for the Board lapse at the close of the fiscal year. NOTE 2 - CASH AND CASH EQUIVALENTS The Board maintains a cash and investment pool that is available for use by all funds except those whose cash and investments must be segregated due to bond covenants or other legal restrictions. A. Deposits At September 30, 2009, the carrying value of the Board's deposits with banks was $11,821,971 and the bank balance was $14,058,041. All the deposits were covered by the FDIC or collateralized in accordance with Chapter 280, Florida Statutes, also known as the "Florida Security for Public Deposits Act". B. Accrued Interest Interest earnings on U.S. Treasury Notes and government agency bonds are recorded in the cash and investment pools and then allocated to each fund based on each fund's average monthly balance. As of September 30, 2009, accrued interest for the Board's portfolio totaled $826,511 and was allocated to the funds based on their average monthly balance for September. 255 Indian River County,Florida Board of County Commissioners Notes To Financial Statements Year Ended September 30, 2009 NOTE 2 -CASH AND CASH EQUIVALENTS - Continued C. Investments On August 12, 2008, the Indian River County Board of County Commissioners modified the investment policy pursuant to Section 218.415, Florida Statutes that established permitted investments, asset allocation limits, issuer limits, credit ratings requirements and maturity limits to protect the Board's cash and investments As of September 30, 2009,the Board had the following investments: Weighted Average Maturity Portfolio Credit Investment Type Fair Value In Years Percentaize Risks Fixed Rate Debt Investments: U.S. Treasuries $ 23,138,274 0.60 8.37 % N/A U.S. Agencies:** Federal Farm Credit Bureau 50,438,748 2.09 18.24 AAA Federal Home Loan Bank 43,284,380 1.43 15.65 AAA Federal Home Loan Mortgage 50,894,943 1.94 18.40 AAA Federal National Mortgage Assoc. 50,627,237 1.89 18.30 AAA Other Fixed Rate Investments: Florida PRIME(Formerly Fund A) 1 .08 0.00 A-1+/A-1 Fund B Surplus Funds Trust Fund 541,477 5.0 0.20 Not Rated Florida Local Government Investment Trust Fund 10,427,975 .08 3.77 AAAf and S-1* Other Market Rate Investments: Federated U.S. Treasury Fund 12,283,240 .08 4.44 AAAm SunTrust Bank NOW Account 10,010,597 .08 3.62 N/A Dreyfus Govt Cash Fund 3,491,013 .08 1.26 Aaa Morgan Stanley Govt Securities 3,010,354 .08 1.09 Aaa Florida Trust Day To Day Fund 13,025,504 .08 4.71 AAAm Fidelity Treasury Money Market 5,418,929 .08 1.95 Aaa Total Fair Value $ 276.592,672 100.0 % Portfolio weighted average maturity 1.39 * AAAf credit quality, S-1 Market Volatility ** The weighted calculation considers the investments are carried until full maturity (i.e. call dates are not considered). 256 Indian River County,Florida Board of County Commissioners Notes To Financial Statements Year Ended September 30, 2009 NOTE 2 -CASH AND CASH EQUIVALENTS -Continued C. Investments—Continued Florida PRIME Fund (formerly known as the Local Government Surplus Funds Trust Fund Investment (SBA) Fund A) is a money market fund classified as a "2a-7 like fund" using the SEC investment requirements for 2a-7 funds. The fund was established by Florida Statute 218.405 and is administered by the Florida State Board of Administration. At September 30, 2009, the Board had $986,026 invested in Fund B Surplus Funds Trust Fund, a fluctuating net asset value pool. The State Board of Administration (SBA) determined a negative fair market value adjustment of 45.08% of the portfolio balance, or $444,549, was needed to represent the fair market value of the participation. Consequently, the net investment in Fund B is reported at$541,477. The Florida Local Government Investment Trust Fund is a pool of various securities with maturities of less than five years. The fund was established by Florida Statute 163.01, is administered by the Florida Association of Court Clerks, and is marked to market daily. Upon the refunding of the Water and Sewer Bonds, Series 1993A, the Board combined the required sinking fund reserve, $3,139,285, of the 1993A issue and the Series 2009 reserve of$2,241,625 for a total of$5,380,910. These funds were invested in the Fidelity Treasury Money Market Fund. Interest Rate Risk The Board's investment policy limits interest rate risk by attempting to match investment maturities with known cash needs and anticipated cash flow requirements. All investments must have stated maturities of ten (10) years or less and no more than 25% of the portfolio shall be invested in instruments with stated final maturities greater than five (5) years. The portfolio shall have securities with varying maturity and at least 10% of the portfolio shall be invested in readily available funds. Credit Risks Florida Statutes, Section 218.415 and the Board's investment policy limit investments to the following: 1. Direct obligations of the United States Treasury; 2. Florida PRIME (formerly known as Fund A) and Fund B Surplus Funds Trust Fund(Fund B); 3. Florida Local Government Investment Trust Fund; 4. Interest-bearing time deposits or savings in qualified public depositories as defined in Section 280.02, Florida Statutes; 5. Federal agencies and instrumentalities; 6. Securities of, or other interests in, any open-end or closed-end management-type investment company or investment trust registered under the Investment Company Act of 1940, 15 U.S.C. ss. 80a-1 et seq., as amended from time to time, provided that the portfolio of such investment company or investment trust is limited to obligations of the United States Government or any agency or instrumentality thereof and to repurchase agreements fully collateralized by such United States Government obligations, and provided that such investment company or investment trust takes delivery of such collateral either directly or through an authorized custodian; 257 Indian River County,Florida Board of County Commissioners Notes To Financial Statements Year Ended September 30, 2009 NOTE 2 - CASH AND CASH EQUIVALENTS - Continued C. Investments—Continued 7. Securities and Exchange Commission registered money market funds with the highest credit quality rating from a nationally recognized rating agency; 8. Repurchase agreements with a term of one year or less collateralized by direct obligations of the United States Government which have maturities of three (3) years or less and a market value 103%or more of the repurchase amount. Currently, Fund B participants areermitted to withdraw scheduled amounts as assets become liquid. P q Full realization of the principal value of Fund B assets is uncertain and dependent upon the collateralized securities underlying each holding and is contingent upon future market conditions. Concentration Risk The Board's investment policy has established asset allocation and issuer limits to reduce concentration of credit risk in the Board's investment portfolio. The Board's investment policy does not allow for more than 20% of the entire portfolio to be invested in any one issuer, with the exception of United States Treasury Obligations and state authorized pools. No more than 10% of the portfolio may be placed in certificates of deposit and no more than $3 million of the portfolio may be placed in certificates of deposit with any one financial institution. No more than 5% of the portfolio may be placed in any one money market fund,mutual fund, or intergovernmental investment pool. Custodial Credit Risk The Board's investment policy pursuant to Section 218.415 (18), Florida Statutes requires securities to be registered and held with a third party custodian. All securities purchased, as well as all collateral obtained, by the Board shall be held in the name of the Board. The securities must be held in an account separate and apart from the assets of the financial institution. As of September 30, 2009, the Board's investment portfolio in U.S. Treasuries, U.S. Agencies, and all money market funds, was held by The Bank of New York/Mellon with the exception of the following: Federated U.S. Treasury Fund (Federated), the SunTrust NOW account, and the Florida Trust Day to Day Fund. Federated was held by SunTrust Capital Markets and the Florida Trust Day to Day Fund was held by UMB Bank. D. OPEB Trust Investments Funds are held in the name of the Indian River County OPEB Trust (IRCOT), an irrevocable trust, by a third party custodian. The investment is reported at fair value. The Board approved a separate investment policy for the IRCOT assets on February 3, 2009 (amended on May 12, 2009), and the funds will be reinvested in accordance with that policy. 258 Indian River County,Florida Board of County Commissioners Notes To Financial Statements Year Ended September 30, 2009 NOTE 2 - CASH AND CASH EQUIVALENTS-Continued D. OPEB Trust Investments -Continued As of September 30, 2009, the Indian River County OPEB Trust (IRCOT) had the following investments: Weighted Average Maturity Portfolio Credit Investment Type Fair Value In Years Percentage Risks Short-Term Portion: Fidelity Treasury Money Market $ 1,102,201 0.16 23.00% Aaa Lona-Term Portion: Vanguard 500 Index 1,704,705 N/A 35.57 N/A Vanguard Mid Cap Index 211,165 N/A 4.41 N/A Vanguard Small Cap Index 107,858 N/A 2.25 N/A Vanguard Short Term Treasury 874,538 2.3 18.25 Aaa Vanguard Intermediate Treasury 586,606 6.3 12.24 Aaa Vanguard Federal Money Market 205,428 0.19 4.28 Aaa Total Fair Value $ 4.792.501 100.0 % For further information on the OPEB Trust investments and related risks, see Note 14-F. NOTE 3 -PROPERTY TAX REVENUES Taxable values for all property are established as of January 1, which is the date of lien, for the fiscal year starting October 1. Property tax revenues recognized for the 2008-2009 fiscal year were levied in October 2008. All taxes are due and payable on November 1 or as soon as the assessments roll is certified and delivered to the Tax Collector. Discounts are allowed for early payment at the rate of 4% in November, 3% in December, 2% in January, and 1% in February. Taxes paid in March are without discount. All unpaid taxes become delinquent as of April 1. Virtually all unpaid taxes are collected via the sale of tax certificates on or prior to June 1; therefore, there were no material taxes receivable at fiscal year end. 259 Indian River County,Florida Board of County Commissioners Notes To Financial Statements Year Ended September 30, 2009 NOTE 4—CAPITAL ASSETS A. Governmental Fund Type Capital Assets A summary of changes in the governmental fund type capital assets is as follows: Buildings And Construction Land Improvements Equipment Intangibles Infrastructure In Progress Total Balance 10/1/2008 $ 137,845,855 $ 166,615,675 $ 42,608,920 $ 1,919,069 $ 3,575,067 $ 20,389,094 $ 372,953,680 Additions 3,579,096 10,429,351 3,111,217 339,508 5,331,908 8,227,335 31,018,415 Deletions (3,157,070) (343,369) (7,272,508) - - (20,942,335) (31,715,282) Balance 9/30/2009 $ 138,267,881 $ 176,701,657 $ 38,447,629 $ 2,258,577 $ 8,906,975 $ 7,674,094 $ 372,256,813 Depreciation expense, which includes amortization expense on intangible assets, for governmental fund type capital assets is not reported in the financial statements of the Board. Depreciation expense is reported in the financial statements of the County. Please refer to the County Notes for a more detailed explanation of the County's policy on depreciation. B. Proprietary Fund Type Capital Assets A summary of changes in the proprietary fund type capital assets is as follows: Buildings And Construction Land Improvements Equipment Intangibles In Progress Total Balance at 10/1/2008 $ 18,368,128 $ 328,370,667 $ 20,141,371 $ 482,693 $ 54,902,549 $ 422,265,408 Additions 909,797 44,951,067 507,865 927,612 17,699,524 64,995,865 Deletions - (2,323,555) (366,973) - (33,621,546) (36,312,074) 19,277,925 370,998,179 20,282,263 1,410,305 38,980,527 450,949,199 Less: _ Accumulated Depreciation - (151,344,939) (15,496,083) (429,079) - (167,270,101) Balance at 9/30/2009 $ 19,277,925 $ 219,653,240 $ 4,786,180 $ 981,226 $ 38,980,527 $ 283,679,098 260 Indian River County,Florida Board of County Commissioners Notes To Financial Statements Year Ended September 30, 2009 NOTE 5—RESTRICTED CASH AND CASH EQUIVALENTS AND INVESTMENTS Solid Waste Disposal Golf County District Course Utilities Total Sinking funds $ - $ 471,264 $ 6,138,439 $ 6,609,703 Renewal and replacement 3,347,112 - 3,485,928 6,833,040 Customer deposits 164,166 - 2,572,052 2,736,218 Capital construction - - 20,021,745 20,021,745 Closure and maintenance cost 10,427,975 - - 10,427,975 Total $ 13,939,253 $ 471,264 $ 32,218,164 $ 46,628,681 NOTE 6—PAYABLE FROM RESTRICTED ASSETS Liabilities payable from the Board's Enterprise Funds restricted assets above are as follows: Solid Waste Disposal Golf County District Course Utilities Total Accounts payable $ - $ - $ 1,799,914 $ 1,799,914 Retainage payable - - 915,917 915,917 Accrued interest payable - 11,264 214,527 225,791 Bonds payable (current portion) - 510,000 2,870,000 3,380,000 Closure/maint. costs payable 10,427,975 - - 10,427,975 Customer deposits 164,166 - 2,572,052 2,736,218 Total $ 10,592,141 $ 521,264 $ 8,372,410 $ 19,485,815 261 Indian River County,Florida Board of County Commissioners Notes To Financial Statements Year Ended September 30, 2009 NOTE 7-INTERFUND BALANCES Interfund balances at September 30,2009, consisted of the following: Due to General Fund from: Nonmajor Governmental Funds: Metropolitan Planning Organization Fund $ 53,000 Community Development Block Grant Fund 6,000 Federal/State Grants Fund 4,000 Disaster Recovery Grants Fund 55,434 Total Nonmajor Governmental Funds $ 118,434 Amounts due from the above funds represent short-term cash loans that will be repaid within the next twelve months. Interfund advances at September 30,2009, consisted of the following: Due to Secondary Roads Construction Fund from: Golf Course Fund $ 682,000 This amount is considered a long-term advance expected to be paid over the course of several years. A reservation of fund balance has been established for this amount. NOTE 8 -INTERFUND TRANSFERS Interfund transfers for the year ended September 30, 2009, consisted of the following: Transfers to General Fund from: Nonmajor capital projects fund $ 33,562 Transfers to Transportation Fund from: General Fund 10,923,180 Transfers to Nonmajor governmental fund from: General Fund 174,460 Optional Sales Tax Fund 2,000,000 Transfers to Internal Service funds from: General Fund 56,412 Total Transfers $ 13,187,614 Transfers are used for the following purposes: 1) transfer excess interest earnings from a capital projects fund to the general fund, 2) use unrestricted general fund revenues to finance transportation activities which must be accounted for in a special revenue fund, 3) use unrestricted general fund and optional sales tax revenues for beach restoration activities which must be accounted for in another fund, and 4) use unrestricted general fund revenues to offset a portion of salaries and benefits expenses for an employee accounted for in the health insurance fund. 262 Indian River County,Florida Board of County Commissioners Notes To Financial Statements Year Ended September 30, 2009 NOTE 9—RECEIVABLE AND PAYABLE BALANCES Receivables Receivables at September 30, 2009 were as follows: Customer Due from other Governmental Funds: Accounts Governments Total General $ 466,022 $ 4,298,539 $ 4,764,561 Impact Fees - 25,416 25,416 Secondary Roads Construction - 14,210,599 14,210,599 Transportation 409 225,613 226,022 Emergency Services 4,596 962,147 966,743 Optional Sales Tax - 23,573,309 23,573,309 Other Governmental 19,355 438,832 458,187 Total Governmental Funds 490,312 S 43.734.455 S442Z4.837 Proprietary Funds: Solid Waste $ 114,406 $ 979,884 $ 1,094,290 Golf Course - 11,700 11,700 Utilities 2,531,648 271 2,531,919 Other Proprietary 1,149,295 96,664 1,245,959 Total Proprietary Funds $ 1,088,5124 883 6 Due from other Governments On January 15, 2008, the Board entered into a locally funded agreement with the Florida Department of Transportation (FDOT) to advance the 6-laning of State Road 60 from 82nd Avenue to 66th Avenue (Segment One). The agreement originally obligated the Board to pay $34,669,601 to the FDOT. A subsequent amendment to the agreement reduced the cost to $23,833,362 which was then paid in three installments: $3,466,960 in February 2008, $13,867,840 in April 2008, and $6,498,562 in May 2008. Funding was from the following funds: $15,888,908 from the Secondary Roads Construction Fund and $7,944,454 from the Optional Sales Tax Fund. On November 18, 2008, the Board entered into another locally funded agreement with the Florida Department of Transportation (FDOT) to advance the 6-laving of State Road 60 from 82nd Avenue to I- 95 (Segment Two). The agreement obligated the Board to pay $14,429,754 to the FDOT. Payment was made in November 2008 to the FDOT. Funding was from the Optional Sales Tax Fund. Reimbursement by the FDOT for Segment One will be in eight quarterly installments over a two-year period that began in July 2009. Reimbursement by the FDOT for Segment Two will be in ten quarterly installments over a three-year period beginning no sooner than July 2011. Repayments to the Board will include principal and any accumulated interest earnings that have not been used for supplemental costs of the project. 263 Indian River County,Florida Board of County Commissioners Notes To Financial Statements Year Ended September 30, 2009 NOTE 9-RECEIVABLE AND PAYABLE BALANCES-Continued Payables Payables at September 30, 2009,were as follows: Y Accounts Payable Salaries and Retainage Total Governmental Funds: Vendors Benefits Pa abs le Payables General $ 1,279,139 $ 427,350 $ 260 $ 1,706,749 Impact Fees 806,041 - 321,788 1,127,829 Secondary Roads Construction 1,424,333 8,779 234,844 1,667,956 Transportation 454,052 239,236 12,572 70500 Emergency Services 347,392 578,209 - 925,601 Optional Sales Tax 434,983 - 487,432 922,415 Other Governmental 630,855 28,118 82,443 741,416 Total Governmental Funds S 5.376.795 $ 1.281.692 1.139.339 7.797.826 Proprietary Funds: Payable from current assets: Solid Waste $ 1,687,531 $ 78,892 $ 387,686 $ 2,154,109 Golf Course 46,262 18,467 - 64,729 Utilities 932,933 231,713 - 1,164,646 Building 2,362 38,194 - 40,556 Other Proprietary 184,652 25,402 - 210,054 Payable from restricted assets: Utilities 1,799,914 - 915,917 2,715,831 Total Proprietary Funds $4.653.654 S 392.668 1.303.603 6.349.925 The Board has not engaged in any short-term debt activity during fiscal year 2009 other than that listed in Note 7. 264 Indian River County,Florida Board of County Commissioners Notes To Financial Statements Year Ended September 30, 2009 NOTE 10—LONG-TERM LIABILITIES A. Enterprise Fund Bonds Payable Recreational (Golf Course) Revenue Refunding Bonds Series 2003 Purpose - On October 15, 2003, the Series 2003 bonds were issued to redeem $6,735,000 of the County's outstanding Recreational Revenue Bonds, Series 1993. The Series 2003 bonds are being issued by the County to provide funds, together with $583,790, to retire all of the outstanding 1993 Series bonds and to pay for all bond issuance costs. The previous bonds were issued to build a County-owned golf course. Pledge of Revenue - The revenue bonds are secured by liens, for the remaining term of the bonds, in the following order: (1) the net revenues derived from the operations of the golf course, (2) one hundred percent of racetrack and Jai Alai Fronton funds, and(3) seven percent of the half-cent sales tax accruing annually to the County. During the year, the financial strength of our municipal bond insurer, AMBAC, was downgraded to Baal. This downgrade required the Board to fully cash fund the debt service reserve. The Board elected to pledge the Racetrack and Jai Alai Fronton funds to meet this bond covenant. The total annual amount of the required debt service reserve is $417,500. The current principal and interest payments of $637,516 represent ninety percent of net revenues ($710,916) of the golf course. The total principal and interest remaining to be paid on the bonds is $4,244,280. All three pledged revenue sources totaled $1,647,449 for the current fiscal year. The County did not utilize the second and third revenue sources toward the current year principal and interest payments. The aggregate difference in debt service between the Series 1993 debt ($9,284;290) and Series 2003 debt ($8,060,911) is $1,223,379. The net economic gain was $348,450. Bonds Issued-At September 30, 2009,the revenue bonds consisted of the following: Outstanding at Interest Rates September 30, Description and Date Maturity Issue 2009 2003 Recreational Revenue 2.00—4.125% 9/1/16 $ 6,455,000 $ 3,685,000 Refunding Bonds 3/1 and 9/1 Less: Current Portion of bonds 510,000 Unamortized Bond Discount 32.015 Long-Term Portion of bonds $ 3.142.985 Optional Redemption - The revenue bonds, maturing on or after September 1, 2014, are subject to redemption prior to maturity, at the option of the County on and after September 1, 2013, in whole or in part, at any time thereafter at the redemption price of par,plus interest accrued to the date of redemption. 265 Indian River County, Florida Board of County Commissioners Notes To Financial Statements Year Ended September 30, 2009 NOTE 10—LONG-TERM LIABILITIES-Continued A. Enterprise Fund Bonds Payable- Continued Water and Sewer Revenue Bonds Series 1993A Purpose - The Series 1993 bonds were issued to defease all of the County's outstanding Water and Sewer Revenue and Refunding Bonds, Series 1986 and 1986A, Series 1989, Series 1991, and Special Assessment Revenue Bonds, Series 1989 and Series 1990, and to provide funds to make certain capital improvements to the utility system. Previously issued bond proceeds were utilized to expand facility and line capacity. Pledge of Revenues - The revenue bonds are collateralized, for the remaining term of the bonds, by a pledge of all net revenues derived from the operation of the system, and certain surcharges and special assessments. Annual principal and interest payments of$2,389,363, not including $28,270,000 of refunded bonds, represent approximately twenty percent of net revenues ($12,018,220) of the utility system. The total principal and interest remaining to be paid on the bonds is $3,282,175. Bonds Issued—At September 30, 2009 the revenue bonds consisted of the following: Outstanding at Interest Rates Original September 30, Description and Date Maturity Issue 2009 Water and Sewer 5.50% Revenue Bonds, 3/1 and 9/1 2024 $ 47,190,000 $ 3,030,000 Series 1993A Less: Current Portion of bonds 1,475,000 Long-Term Portion of bonds 1.555.000 266 Indian River County,Florida Board of County Commissioners Notes To Financial Statements Year Ended September 30, 2009 NOTE 10—LONG-TERM LIABILITIES - Continued A. Enterprise Fund Bonds Payable- Continued Water and Sewer Revenue Bonds, Series 1993A- Continued On September 11, 2009, $28,270,000 of the County's Series 1993A bonds were refunded and redeemed by the Water and Sewer Refunding Bonds, Series 2009. The following two years were not included in the refunding and will be paid on the dates listed below: Term Bonds due September 1, 2011 Date Principal Amount September 1, 2010 $ 1,475,000 September 1, 2011 1,555,000 Water and Sewer Revenue Refunding Bonds Series 2005 Purpose - The Series 2005 bonds were issued to defease $31,680,000 of the County's outstanding Water and Sewer Revenue Bonds, Series 1996. These bonds were issued by the County to provide funds, together with $5,000,000, to retire 95 percent of the 1996 Series and to pay for all bond issuance costs. The September 1, 2005 and 2006 principal installments were not subject to early call and consequently paid at their respective maturity dates. The 1996 bonds were issued to acquire an existing water and sewer facility, as well as for capital improvements to the existing system. The aggregate difference in debt service between the Series 1996 ($40,585,193) and Series 2005 ($39,619,193) is $966,000. The net economic gain was $2,944,661, which included shortening the term of the bonds by four years and lowering average annual debt service by $242,000. Pledge of Revenues — The revenue bonds are collateralized, for the remaining term of the bonds, by a pledge of all net revenues derived from the operation of the system, certain surcharges, and special assessments. Annual principal and interest payments of$2,403,150 represent approximately twenty percent of net revenues ($12,018,220) of the utility system. The total principal and interest remaining to be paid on the bonds is $31,266,600. 267 Indian River County,Florida Board of County Commissioners Notes To Financial Statements Year Ended September 30, 2009 NOTE 10 -LONG-TERM LIABILITIES- Continued r A. Enterprise Fund Bonds Payable—Continued Bonds Issued-At September 30, 2009,the revenue bonds consisted of the following: Outstanding at Interest Rates September 30, Description and Date Maturi Issue 2009 Water and Sewer 3-5% Revenue Bonds, 3/1 and 9/1 2022 $ 27,675,000 $ 23,320,000 Series 2005 1,395,000 Less: Current Portion of bonds 795.076 Add:Unamortized Bond Premium 22,720.076 Long-Term Portion of bonds Outstanding In-Substance Defeased Debt - The proceeds from the refunding was invested in Federal Securities and was placed in an escrow account with J.P. Morgan. All of the defeased bonds ($31,680,000)were called on September 1, 2006 at 102%of the outstanding principal amount. Optional Redemption - The Series 2005 bonds maturing after September 1, 2015, are subject to redemption by the County on or after September 1, 2015, in whole or in part, at par, plus accrued interest to date of redemption. Water and Sewer Revenue Refunding Bonds Series 2009 Purpose - The Series 2009 bonds were issued to refund and redeem on September 11, 2009, $28,270,000 of the County's outstanding Water and Sewer Revenue Bonds, Series 1993A. The refunding excluded debt service payments due September 1, 2010 and 2011. See Water and Sewer Revenue Bonds, Series 1993A. The aggregate difference in debt service between the Series 1993A ($80,434,415) and Series2009 ($78,755,772) is $1,678,643. The net economic gain was $1,368,427, which lowered average an debt service by$126,000. Pledge of Revenues — The revenue bonds are collateralized, for the remaining term of the bonds, by a pledge of all net revenues derived from the operation of the system, certain surcharges, and special assessments. There were no annual principal and interest payments in 2009. The total principal and interest remaining to be paid on the bonds is $38,572,110. 268 Indian River County,Florida Board of County Commissioners Notes To Financial Statements Year Ended September 30,2009 NOTE 10-LONG-TERM LIABILITIES- Continued A. Enterprise Fund Bonds Payable—Continued Bonds Issued-At September 30, 2009,the revenue bonds consisted of the following: Outstanding at Interest Rates September 30, Description and Date Maturity Issue 2009 Water and Sewer 4-5% Revenue Bonds, 3/1 and 9/1 2024 $ 26,370,000 $ 26,370,000 Series 2009 Less: Current Portion of bonds - Add: Unamortized Bond Premium 2,608,337 Long-Term Portion of bonds 28.978.337 Outstanding In-Substance Defeased Debt - The proceeds from the refunding were invested in Federal Securities and were placed in an escrow account with Bank of New York/Mellon. All of the defeased bonds($28,270,000)were called on September 1, 2009 at 101% of the outstanding principal amount. Optional Redemption - The Series 2009 bonds maturing on or prior to September 1, 2019, are not subject to redemption prior to their respective dates of maturity. The Series 2009 Bonds stated to mature after September 1, 2019, are subject to redemption at the option of the County in whole or, from time to time, in part on September 1, 2019, at the redemption price of the principal amount to be redeemed, plus accrued interest to the date of redemption. { 269 Indian River County,Florida Board of County Commissioners Notes To Financial Statements Year Ended September 30, 2009 NOTE 10 -LONG-TERM LIABILITIES - Continued A. Enterprise Fund Bonds Payable—Continued Annual Debt Service Payments is for bonds outstandin at September 30, 2009 are as follows: The annual debt service paymen g Fiscal Year Recreational Water and Sewer Water and Sewer Water and Sewer Ending Revenue Refunding Revenue Bonds Revenue Refunding Revenue Refunding September 30 Bonds Series 2003 Series 1993 Bonds Series 2005 Bonds Series 2009 Principal Interest Principal Interest Principal Interest Principal Interest 2010 $510,000 $135,164 $ 1,475,000 $166,650 $ 1,395,000 $ 1,012,650 $ - $1,331,610 2011 520,000 119,864 1,555,000 85,525 1,435,000 970,800 - 1,268,200 2012 535,000 102,964 - - 1,480,000 925,250 1,610,000 1,268,200 2013 555,000 83,169 - - 1,530,000 877,150 1,675,000 1,203,800 2014 580,000 62,356 - - 1,605,000 800,650 1,745,000 1,136,800 2015-2019 985,000 55,763 - - 9,215,000 2,805,250 10,025,000 4,381,250 2020-2024 - - - - 6,660,000 554,850 11,315,000 1,612,250 Total 3,685,000 559,280 3,030,000 252,175 23,320,000 7,946,600 26,370,000 12,202,110 Less: Current portion 510,000 - 1,475,000 - 1,395,000 - - Unamortized bond discount 32,015 - - - - - - Add: Unamortized bond premium - - - - 795,076 - 2,608,337 - Total $3,142,985 $559,820 $ 1,555,000 $252,175 $22,720,076 $7,946,600 $28,978,337 $12,202,110 r 270 Indian River County,Florida Board of County Commissioners Notes To Financial Statements Year Ended September 30, 2009 NOTE 10-LONG-TERM LIABILITIES - Continued B. Changes in Governmental Long-Term Liabilities Balance Balance October 1, September 30, 2008 Additions Deletions 2009 Accrued Compensated Absences: $ 4,298,554 $ 2,650,379 $ 2,470,921 $ 4,478,012 Bonds Payable: Limited General Obligation Bonds - 2006 Series 43,715,000 - 2,670,000 41,045,000 General Obligation Bonds-2001 Series 6,675,000 - 720,000 5,955,000 General Obligation Refunding Bonds -2003 Series 2,380,000 - 1,170,000 1,210,000 Spring Training Facility Revenue Bonds - 2001 Series 13,455,000 - 560,000 12,895,000 Total Bonds Payable 66,225,000 - 5,120,000 61,105,000 Total $ 70,523,554 $ 2,650,379 $7,590,921 $65,583,012 Of the $4,478,012 liability for accrued compensated absences, management estimates that $1,678,803 will be due and payable within one year. The long-term liabilities are not reported in the financial statements of the Board since they are not payable from available spendable resources. They are reported in the financial statements of the County by the fund which normally pays the personnel service costs of the employee. C. Governmental Long-Term Debt Limited General Obligation Bonds Purpose — On July 6, 2006, the Board issued $48,600,000 of Limited General Obligation Bonds, Series 2006. The issuance of the Series 2006 bonds was approved by a majority of votes cast in a bond referendum held on November 2, 2004, by the qualified electors of the County. The referendum authorized a total of$50,000,000 aggregate principal amount of limited general obligation bonds. The proceeds of this issue will provide funds to acquire interest in lands to protect water resources and/or drinking water sources, environmentally sensitive lands, historic sites, and/or agricultural lands together with the necessary preservation, restoration, remediation and reclamation activities to preserve and enhance such property. Pledge of revenues - The principal and interest on the bonds are payable from ad valorem taxes not exceeding 1/2 mil and having a maturity not exceeding fifteen years, which are levied by the Board upon the taxable real and personal property of the Board. 271 Indian River County,Florida Board of County Commissioners Notes To Financial Statements Year Ended September 30, 2009 NOTE 10-LONG TERM LIABILITIES - Continued C. Governmental Long-Term Debt- Continued Limited General Obligation Bonds- Continued Bonds Issued-At September 30, 2009, Limited General Obligation Bonds consisted of the following: Outstanding at Interest Rates September 30, Description and Date Maturi Issue 2009 Limited General Obligation 4.00%-5.00% Bonds,2006 Series 1/1 and 7/1 2021 $ 48,600,000 $41.045.000 Optional Redemption - The Limited General Obligation Bonds, Series 2006, maturing on or after July 1, 2017, are subject to redemption prior to maturity, at the option of the Board on and after July 1, 2016, in whole or in part, at any time, on any date at a redemption price of par, together with accrued interest to the redemption date. General Obligation Bonds Purpose — On November 29, 2001, the Board issued the additional $11,000,000 of General Obligation Bonds, Series 2001. The issuance of the Series 1995 bonds and the Series 2001 bonds were approved by a majority of votes cast in a bond referendum held on November 2, 1992, by the qualified electors of the County. The referendum authorized a total of $26,000,000 aggregate principal amount of general obligation bonds, in one or more series, for which the Series 1995 bonds are the first (in the amount of $15,000,000) and the Series 2001 bonds are the second. The proceeds of this issue will provide funds to acquire environmentally sensitive lands, together with the necessary restoration, remediation, and reclamation activities to preserve and enhance such property. On July 1, 2003, the Board issued $7,800,000 of General Obligation Refunding Bonds, Series 2003. The bonds were issued to provide funds, together with $600,000, to refund and redeem the entire outstanding principal amount of the Board's $15,000,000 General Obligation Bonds, Series 1995. Proceeds of the bonds will also be used to pay the cost of issuance of the bonds, including the premiums for guaranty insurance. Pledge of Revenues - The principal and interest on the bonds are payable from ad valorem taxes levied by the Board upon the taxable real and personal property of the Board and are pledged for the remaining term of the bonds. 272 Indian River County,Florida Board of County Commissioners Notes To Financial Statements Year Ended September 30, 2009 NOTE 10 -LONG-TERM LIABILITIES - Continued C. Governmental Long-Term Debt-Continued General Obligation Bonds - Continued Bonds Issued-At September 30,2009, General Obligation Bonds consisted of the following: Outstanding at Interest Rates September 30, Description and Date Maturity Issue 2009 General Obligation Bonds, 2.50%-4.30% 2001 Series 1/1 and 7/1 2016 $ 11,000,000 $_5155,0Q0 General Obligation Refunding 1.50%-3.00% Bonds, 2003 Series 1/1 and 7/1 2010 $ 7,800,000 $ 1.210.000 Optional Redemption - The General Obligation Bonds, Series 2001, maturing on or after July 1, 2013, are subject to redemption prior to maturity, at the option of the Board on and after July 1, 2012, in whole or in part, at any time, on any date at par plus accrued interest and plus a premium ranging between 0% to 1% depending on the year of redemption. The General Obligation Refunding Bonds, Series 2003, are not subject to redemption prior to their maturities. Spring Training Facility Revenue Bonds Purpose - On August 15, 2001, the Board issued $16,810,000 of Spring Training Facility Revenue Bonds, Series 2001. The Series 2001 bonds are being issued by the County to provide funds, together with other available funds, to (1) finance a portion of the cost of acquisition and expansion of a spring training facility known as "Dodgertown'; (2) pay a premium for a municipal bond insurance policy and a debt service reserve account surety bond, and (3) pay certain costs and expenses incurred in connection with the issuance of the Series 2001 bonds. Pledge of Revenues - The principal and interest on the Series 2001 bonds will be payable from and secured by a first lien upon and pledge of the following, together with any investment income realized on any funds held under the Resolution, except the Cost of Issuance Account and the Rebate Fund: 1. Payments received by the County from the State of Florida pursuant to Section 212.20, Florida Statutes; and 2. The Fourth Cent Tourist Development Tax levied by the County in Ordinance No. 2000-029, enacted pursuant to Section 125.0104(3)(1), Florida Statutes; and 3. Eighty-six percent (86%) of the Local Government Half-Cent Sales Tax distributed to the County, pursuant to Chapter 218, part VI,Florida Statutes. The foregoing is collectively referred to herein as the "pledged revenues". These revenue streams are pledged for the remaining term of the bonds. 273 Indian River County,Florida Board of County Commissioners Notes To Financial Statements Year Ended September 30, 2009 LONG NOTE 10_ -TERM LIABILITIES - Continued C. Governmental Long-Term Debt- Continued Spring Training Facility Revenue Bonds- Continued The Fourth Cent Tourist Development Tax and the Local Government Half-Cent Sales Tax pledged to the payment of debt service on the Series 2001 bonds are automatically released as pledged revenue for the Series 2001 bonds immediately following the April 1, 2021 principal payment on the Series 2001 bonds. The current principal and interest payments of $1,224,633 represent fifteen percent of total pledged revenues. All three revenue sources totaled $6,843,945 for the current fiscal year. The total principal and interest remaining to be paid on the bonds is $19,612,534. Bonds Issued-At September 30 2009 Spring Training Facility Revenue Bonds consisted of the following: Outstanding at Interest Rates September 30, Description and Date Maturi Issue 2009 Spring Training Facility 3.30%-5.25% Revenue Bonds, Series 2001 4/1 and 10/1 2031 $ 16,810,000 $ 12.895.000 Optional Redemption - The Series 2001 bonds maturing on or after April 1, 2012, are subject to redemption at the option of the Board, in whole or in part, on April 1, 2011, or on any date thereafter at par plus accrued interest and plus a premium ranging between 0% to 1% depending on the year of the redemption. 274 Indian River County,Florida Board of County Commissioners Notes To Financial Statements Year Ended September 30, 2009 NOTE 10- LONG-TERM LIABILITIES -Continued C. Governmental Long-Term Debt—Continued Spring TrainingFity Revenue Bonds - Continued Mandatory Redemption - The Series 2001 Term Bonds are subject to mandatory redemption prior to maturity,by lot, at par plus accrued interest, according to the following schedule: Term Bonds due April 1, 2015 Date Principal Amount April 1, 2014 $ 685,000 April 1, 2015 725,000 Term Bonds due April 1, 2017 Date Principal Amount April 1, 2016 $ 760,000 April 1, 2017 795,000 Term Bonds due April 1, 2021 Date Principal Amount April 1, 2018 $ 840,000 April 1, 2019 890,000 April 1, 2020 930,000 April 1,2021 980,000 Term Bonds due April 1, 2027 Date Principal Amount April 1, 2022 $ 305,000 April 1, 2023 320,000 April 1,2024 340,000 April 1, 2025 355,000 April 1,2026 375,000 April 1, 2027 390,000 Term Bonds due April 1, 2031 Date Principal Amount April 1, 2028 $ 410,000 April 1,2029 430,000 April 1, 2030 455,000 April 1, 2031 435,000 275 Indian River County,Florida Board of County Commissioners Notes To Financial Statements Year Ended September 30, 2009 NOTE 10 -LONG-TERM LIABILITIES - Continued C. Governmental Long-Term Debt- Continued Annual Debt Service Payments The annual debt service payments for bonds outstanding at September 30, 2009, are as follows: Limited General General Obligation General Obligation Spring Training Facility Fiscal Year Ending Obligation Bonds Refunding Bonds Bonds Revenue Bonds September 30 Series 2006 Series 2003 Series 2001 Series 2001 Principal Interest Principal Interest Principal Interest Principal Interest 2010 $2,775,0 00 $1,838,663 $ 1,210,000 $36,300 $745,000 $240,572 $585,000 $642,232 2011 2,885,000 1,727,663 - - 780,000 213,008 605,000 618,833 2012 3,000,000 1,612,263 - - 810,000 183,368 630,000 593,423 2013 3,120,000 1,492,263 - - 845,000 151,778 655,000 566,333 2014 3,255,000 1,367,463 - - 885,000 117,978 685,000 537,513 2015-2019 18,615,000 4,429,263 - - 1,890,000 122,303 4,010,000 2,108,225 - 2,875,000 1,058,975 2020-2024 7,395,000 478,425 _ _ _ 1,960,000 525,750 2025-2029 - - 890,000 66,250 2030-2031 Total 41,045,000 12,946,003 1,210,000 36,300 5,955,000 1,029,007 12,895,000 6,717,534 Less: - 585,000 - Current portion 2,775,000 - 1,210,000 745,000 - Unamortized bond discount - - - Add: Unamortized bond premium 1,095,387 - - Total $39,365,387 $ 12,946,003 $- $36,300 j5=,2 L1,029,007 $ 12,310,00016,717,534 The General Obligation Bonds and Spring Training Facility Revenue Bonds are not reported in the governmental fund statements since they are not current liabilities payable from available spendable resources. They are reported in the government-wide financial statements of the County. 19 276 Indian River County,Florida Board of County Commissioners Notes To Financial Statements Year Ended September 30, 2009 NOTE 10- LONG-TERM LIABILITIES -Continued D. Summary of Defeased Debt Outstanding The following outstanding revenue bonds are defeased. Since governmental obligations are held in escrow for the payment of principal and interest, the bonds are not liabilities of the Board. Retired Outstanding at During Outstanding at September 30, Fiscal Year September 30, Description 2008 2009 2009 Capital Improvement Revenue Bonds: Series 1980 1.070.000 2 QO 745,000 L E. Conduit Debt Obligations In 1999, Indian River County issued Industrial Revenue Bonds which provide financial assistance to private-sector entities for the acquisition, construction, and equipping of industrial and commercial facilities deemed to be in the public interest. These facilities include an educational facility. The bonds are secured by the property financed and are payable solely from payments received on the underlying mortgage loans. Upon repayment of the bonds, ownership of the acquired facilities transfers to the private-sector entity served by the bond issuance. Neither the County, the State, nor any political subdivision thereof is obligated in any manner for repayment of the bonds. Accordingly, the bonds are not reported as liabilities in the accompanying financial statements. See Subsequent Event Note 21 regarding a default of principal payments by St. Edward's School Inc. Original Principal Bond Issue OutstandinZ Year Bonds and Project Description $ 18,000,000 $ 14,800,000 1999 St.Edward's School,Inc.—Upper School educational facilities 277 Indian River County,Florida Board of County Commissioners Notes To Financial Statements Year Ended September 30, 2009 NOTE 11 P ROVISION FOR CLOSURE COSTS Current regulations of the U.S. Environmental Protection Agency (EPA) and the Florida Department of Environmental Protection (FDEP) require the Solid Waste Disposal District (SWDD) to place a final cover on closed landfill areas, and to maintain those areas for up to thirty years after closure. The SWDD annually obtains updated and revised estimates of total future closure and post-closure costs from its consulting engineers. The SWDD recognizes the expenses associated with the final closure and post- closure maintenance of the landfill areas over the active life of those areas. The provision for closure costs reported in the financial statements as operating expense represents the portion of these estimated future outlays which are allocable to the current year based on the amount of capacity used. The total unrecognized closure and post-closure costs are approximately $2.1 million. These costs will be recognized in future periods as the remaining capacity is filled. The County's policy is to fund 100% of the current year's allocation (based upon the consulting engineers' report) of both closure and post- closure care. Required closure and post-closure obligations: Capacity Estimated Obligation Used Closing Amount Closure Costs Class I-Segments I and II 83% 2013 $ 5,462,721 Construction and Demolition-Cell I 90% 2016 1,066,366 Post-closure Costs Class I-Segments I and II N/A N/A 3,734,400 Construction and Demolition-Cell I N/A N/A 164,488 Total account balance at 9/30/09: $ 10,427,975 All amounts recognized are based on what it would cost to perform all closure and post-closure functions in current dollars. Actual costs may be different due to inflation, deflation, changes in technology, or changes in laws and regulations. The SWDD is required by FDEP to annually show proof of ability to finance closure and post-closure costs. The SWDD is making annual deposits to a closure and post-closure cost escrow account to provide for the financing of future closure-related expenses. At September 30, 2009, $10,427,975 was on deposit at the Florida Local Government Investment Trust. A summary of changes in the landfill closure liability account is as follows: Balance Balance 10/01/08 Deposits Withdrawals 09/30/09 Closure and maintenance costs $ 11.831.988 423,05a 1 82 0 10.427.975 Of the $10,427,975 liability bili for closure and maintenance costs,management estimates that$1,795,542 will be due and payable within one year. a 278 Indian River County,Florida Board of County Commissioners Notes To Financial Statements Year Ended September 30,2009 NOTE 12—POLLUTION REMEDIATION In accordance with GASB Statement 49, a consultant evaluated five sites to assess pollution remediation liabilities. The consultant calculated for each site an expected value (EV) estimate for pollution remediation based on three plausible mitigation scenarios. An obligating event occurred at each of the following five sites requiring the County (using the consultant's services) to attempt to accrue a liability for pollution remediation. The liability totaled $ 2,387,300 at September 30, 2009 for all five sites. The pollution remediation obligation is an estimate and subject to changes resulting from price increases and reductions, technology, and changes in applicable laws or regulations. There are no estimated recoveries that would reduce the liability. Governmental Funds: 1) South Gifford Road closed landfill — The nature of the pollution remediation obligation is chlorinated solvent contamination. The consultant has conducted cleanup work and has coordinated with the Florida Department of Environmental Protection (FDEP). The amount of the estimated year end liability is $ 2,200,000. 2) Old Administration Building — The nature of the pollution remediation obligation is closed underground storage tank contamination. The consultant conducted groundwater sampling and coordinated with the FDEP. The amount of the estimated year end liability is $40,100. 3) Sheriff's Administration Building — The nature of the pollution remediation obligation is underground storage tank closure and closure reporting. The consultant will conduct the remediation work and coordinate with the FDEP. The amount of the estimated year end liability is $25,900. 4) Cattle dip site—The nature of the pollution remediation obligation is arsenic contamination. The consultant will conduct the remediation work and coordinate with the FDEP. The amount of the estimated year end liability is $ 77,300. Total governmental funds liability: $2,343,300 Proprietary Funds: 5) North County Reverse Osmosis plant — The nature of the pollution remediation obligation is groundwater inorganic contamination. The consultant will conduct the remediation work and coordinate with the FDEP. The amount of the estimated year end liability is $ 44,000. Please see Note 18-B for information regarding the restatement of beginning net assets for the proprietary funds as it relates to the pollution remediation liability. The difference between the Utilities Fund restated beginning net assets of $85,425 and the liability of $44,000 was expensed during the current year. L 279 Indian River County,Florida Board of County Commissioners Notes To Financial Statements Year Ended September 30, 2009 NOTE 13—PENSION PLANS Florida Retirement System Plan Description: The Board's employees participate in the Florida Retirement System (FRS), a cost- sharing multiple-employer public employee retirement system, administered by the Florida Department of Management Services. The FRS is noncontributory for all members; all contributions are made by the employer. Employees elect participation in either the defined benefit plan (Pension Plan) or the defined contribution plan(Investment Plan). The Pension Plan provides for vesting of benefits after six years of creditable service. Normal retirement benefits are available to employees who retire at or after age 62 with six or more years of service or thirty years of service regardless of age. Early retirement is available after six years of service with a five percent reduction in benefits for each year prior to the normal retirement age. Retirement benefits are based on age, average compensation, and years-of-service credit where average compensation is computed as the average of an individual's five highest years of earnings. For those employees who elect participation in the Investment Plan rather than the Pension Plan,vesting occurs after one year of service and there is no "normal retirement age". These participants receive a defined contribution for self-direction in an investment product with a third party administrator selected by the State Board of Administration. In addition to the above benefits, the FRS administers a Deferred Retirement Option Program (DROP). This program allows eligible employees to defer receipt of monthly retirement benefit payments while continuing employment with a FRS employer for a period not to exceed five years after electing to participate. Deferred monthly benefits are held in the FRS Trust Fund and accrue interest. e Contributions to the FRS for the fiscal year ended September 30 2009 were equal to 13.1% of the annual covered payroll. Contributions to the FRS for the fiscal years ended September 30, 2007, 2008, and 2009, were $5,648,875, $5,803,638 and $5,630,401 respectively, which are equal to 100% of the required contribution for each year. Florida Statutes Chapter 121, as may be amended from time to time by the state legislature, determines contribution rates for the various membership classes of the FRS. The FRS issues a publicly available financial report that includes financial statements, ten-year historical trend information and other required supplementary information. That report may be obtained by writing to the Florida Department of Management Services, Division of Retirement, Attention: Research, Education, & Policy Section, P.O. Box 9000, Tallahassee, Florida 32315-9000, or from the website at www.dms.myflorida.com. The funding policy is described in detail in the Florida Retirement System note in the County-wide financial statements. 280 Indian River County,Florida Board of County Commissioners Notes To Financial Statements Year Ended September 30, 2009 NOTE 14—OTHER POSTEMPLOYMENT BENEFITS PLAN A. Plan Description The Indian River County OPEB Trust (IRCOT) was established by resolution on September 23, 2008 for the Board of County Commissioners and the five constitutional officers (Clerk of the Circuit Court, Property Appraiser, Sheriff, Supervisor of Elections, and Tax Collector). The Indian River County Board of County Commissioners acts as the OPEB Board of Trustees and delegates the administration of the IRCOT to an OPEB Trust Board. The OPEB Trust Board consists of the Clerk of the Circuit Court,Budget Director, Finance Director, County Administrator, and Human Resources Director. Resolution 2008-163 gave authority to establish the IRCOT as a single-employer defined benefit plan (OPEB Plan). The Trust's financial statements are reported using the accrual basis of accounting. The IRCOT trustees can amend the benefit provisions. The OPEB Plan subsidizes the cost of health care for employees hired prior to February 1, 2006 and their eligible dependents according to the provisions of the substantive plan (the plan as understood by the employer and the plan members). Employees hired on or after February 1, 2006 will not be eligible for any subsidy, regardless of years of service or Medicare eligibility. Life insurance is available to retirees at a flat rate per $1,000 of coverage. The premium rate is contingent upon age and date of retirement. Only the implicit rate subsidy applies to retiree life insurance coverage since the retirees are responsible for the full premium of their life insurance coverage. Retired employees are permitted to remain covered under the County's medical and life insurance plans as long as they pay a premium applicable to the coverage elected. This conforms to the minimum required of Florida governmental employers per Florida Statute 112.0801. The implicit rate subsidy also applies to health insurance coverage since the premiums charged are based upon a blending of younger, active employees and older, retired employees. Active participants as well as retirees are subject to the same benefits and rules. Health insurance premiums, effective October 1, 2008, range from $198 for Medicare participants to $765 for family coverage. The County subsidizes the cost of the premiums for each retiree based upon their years of service and employment date; a 2% discount for each year of service based upon the following table: Retirement Date Years of Service Under Age 65 Medicare Eligible Before 01/01/04 N/A No subsid 60%subsidy 01/01/04- 10/01/04 Less than 15 years No subsidy 60%subsidy 20%in addition to yrs of 01/01/04- 10/01/04 15 or more years 2%/yr-max 40% service-max 60%subsidy 10/01/04-01/31/09 Less than 15 years No subsidy 20%subsidy 20%in addition to yrs of 10/01/04-01/31/09 15 or more years 2%/ -max 40% service-max 60%subsidy 02/01/09 and after Less than 15 years No subsidy No subsidy 02/01/09 and after 15 or more years 20/o/ %max 40% No subsidy The retiree has the option to continue with the County group health plan or elect the Medicare Advantage Plan. The subsidy will apply to either plan. 281 Indian River County,Florida Board of County Commissioners Notes To Financial Statements Year Ended September 30, 2009 NOTE 14—OTHER POSTEMPLOYMENT BENEFITS PLAN—Continued A. Plan Description—Continued At October 1,2007,the date of the latest actuarial valuation,plan participation consisted of: Active participants 1,460 Retired participants 285 Total participants L745 There are two classes of participants artici ants at October 1, 2007: Regular and senior management 1,144 Special risk 601 Total participants Financial statements for the Trust are included in this report and can be found on pages 38-39. A separate, stand-alone financial report is not issued by the County. B. . Funding Policy The Board of County Commissioners, in concert with the OPEB Board of Trustees, has the authority to establish and amend the funding policy of the OPEB Plan. The OPEB Plan is advance funded by the Board. For the year ended September 30, 2009, the County contributed $2.8 million to the qualifying OPEB Trust. Plan members receiving benefits contributed $0.9 million, or approximately 44 percent of the total premiums. It is the County's policy to base future IRCOT contributions on the annual required contribution(ARC) in subsequent annual actuarial reports. C. Annual OPEB Cost and Net OPEB Obligation The employer's contribution (i.e. annual cost or expense) to the County's OPEB Plan is based on the ARC calculation. The ARC is an amount actuarially determined in accordance with the parameters of GASB Statement No. 45. The ARC represents a level of funding that, if paid on an ongoing basis, is projected to cover the normal cost each year and amortize any unfunded actuarial liability over a period not to exceed 20 years. The following table shows the components of the County's annual OPEB Plan cost for the year,the amount actually contributed, and the changes in the net OPEB Plan obligation. FY 2008/2009 FY 2007/2008 Annual Required Contribution $ 2,810,092 $ 2,626,254 Interest on Net OPEB Obligation (6,587) - Adjustment to Annual Required Contribution 6,082 - Annual OPEB Cost(expense) 2,809,587 2,626,254 Contributions (2,819,373) (2,720,348) Change in Net OPEB obligation (9,786) (94,094) Net OPEB obligation—beginning of year (94,094) - Net OPEB obligation—end of year $ (103,880) $ (94,094) Percentage of Annual OPEB Cost Contributed 100.35% 103.58% See page 100 for schedule of funding progress and schedule of employer contributions. 282 Indian River County,Florida Board of County Commissioners Notes To Financial Statements Year Ended September 30, 2009 NOTE 14—OTHER POSTEMPLOYMENT BENEFITS PLAN- Continued D. Funded Status and Funding Progress The contribution made to the IRCOT for the current fiscal year was 100.4% of the annual OPEB cost. Information is available for the immediate preceding fiscal year and not applicable for fiscal year 2007. As of the October 1, 2007 actuarial valuation date, the OPEB Trust Plan was 0% funded, the actuarial accrued liability for benefits was $29.1 million, and the actuarial value of assets was $0, resulting in an unfunded actuarial accrued liability (UAAL) of$29.1 million. The covered payroll (annual payroll of active employees covered by the OPEB Trust) was $64.8 million, and the ratio of the UAAL to the covered payroll was 44.9%. Actuarial valuations of an ongoing plan involve estimates of the value of reported amounts and assumptions about the probability of occurrence of events into the future. Examples include assumptions about future employment, mortality, and the healthcare cost trend. Amounts determined regarding the funded status of the plan and the annual required contributions of the employer are subject to continual revision as actual results are compared with past expectations and new estimates are made about the future. The schedule of funding progress, presented as required supplementary information following the County notes to the financial statements, presents information about whether the actuarial value of the plan assets is increasing or decreasing over time relative to the actuarial accrued liabilities for benefits. Methods and Assumptions E. Actuarial Me tions p Projections of benefits for financial reporting purposes are based on the benefits provided under terms of the substantive plan (the plan as understood by the employer and the plan members) in effect at the time of each valuation and on the pattern of sharing of costs between the employer and plan members to that point. The projection of benefits for financial reporting purposes does not explicitly incorporate the potential effects of legal or contractual funding limitations on the pattern of cost sharing between the employer and plan members in the future. Actuarial calculations reflect a long-term perspective. Consistent with that perspective, actuarial methods and assumptions used include techniques that are designed to reduce the effects of short-term volatility in actuarial accrued liabilities and the actuarial value of assets. The actuarial methods are: Actuarial cost method Entry age normal cost method Amortization method Level percent of payroll projected to grow 4%per year Amortization period(closed) 19 years Asset valuation method Fully Funded The actuarial assumptions are: Investment rate of return 7% (net administrative expenses) Projected annual salaries increase 4.5%-10.5% (dependent on years of service and age) Healthcare cost trend rate 10% (post-retirement benefit) Inflation rate Included in the Healthcare cost trend rate 283 t Indian River County,Florida Board of County Commissioners Notes To Financial Statements Year Ended September 30, 2009 NOTE 14 OTHER POSTEMPLOYMENT BENEFITS PLAN- Continued F. OPEB Investments A separate investment policy was adopted by the Board of County Commissioners on May 12, 2009. The County adopted a broadly diversified portfolio composition consisting of equity, debt, and cash and cash equivalents. Asset allocations are divided between short term and long term investments. Short term asset allocations include cash and cash equivalents with maturities of 180 days or less. Long term asset allocations range from 0-60%for equities, 0-60%for fixed income securities, and 0-100% for cash and cash equivalents. The contribution of$2.8 million for year ended September 30, 2009 was invested in the various funds listed in Note 2D. These funds were held by our custodian, Bank of New York/Mellon, in the name of IRCOT. Investments are reported at fair market value. NOTE 15-OPERATING LEASES The Board has entered into operating noncancelable o eratin leases, both as lessor and lessee. Lease terms vary from 2 to 49 years. Lease revenues totaled $533,425 and lease expenditures totaled $62,994 for the year ended September 30, 2009. The Board also leases other equipment and office facilities as both lessor and lessee on a month-to-month basis. A. Future Minimum Lease Receipts Year Amount 2010 $ 514,674 2011 516,641 2012 448,498 2013 426,886 2014 442,200 2015-2019 2,276,759 2020-2024 1,938,456 2025-2029 856,649 2030-2034 374,523 2035 200 Total future minimum receipts: $ 7.795_.486 The property being leased is reported in the financial statements of County and has a cost of $25,211,968, and a carrying value of$18,750,797. Current year depreciation on property being leased was $578,653. 284 Indian River County,Florida Board of County Commissioners Notes To Financial Statements Year Ended September 30, 2009 NOTE 15- OPERATING LEASES- Continued B. Future Minimum Lease Payments The following is a schedule, by years, of minimum future rentals to be paid by the Board for various noncancelable operating leases as of September 30, 2009: Year Amount 2010 $ 63,294 2011 23,044 2012 23,044 2013 23,044 2014 23,044 2015-2019 115,220 2020-2024 115,220 2025-2029 81,104 2030-2034 1,500 2035-2039 1,500 2040-2044 1,500 2045-2049 1,200 Total future minimum lease payments: SA22,714 285 Indian River County,Florida Board of County Commissioners Notes To Financial Statements Year Ended September 30, 2009 NOTE 16 -FUND EQUITY Reserved Fund Balances The Board has established certain reserves within the fund equity section of the governmental funds. Reserved fund balances at September 30, 2009, consist of the following: General Fund: Reserved for Economic Incentives: $ 8,000,000 Local Aircraft Manufacturer Special Revenue Funds: Reserved for Capital Projects: 14,217,224 Secondary Roads Construction Fund Reserved for Advances to Other Funds: 682,000 Secondary Roads Construction Fund 14 899.224 Total Debt Service Funds: Reserved for Debt Service: 2,841,769 Land Acquisition Bonds Fund Spring Training Facility Revenue Bonds Fund 1,474,801 4,316,57 Total0 Capital Projects Funds: Reserved for Capital Projects: 32,334,794 Optional Sales Tax Fund Dodgertown Capital Reserve Fund 1 701,452 34,036,246 Total Total Reserved Fund Balances, Governmental Funds $61,252.040 286 Indian River County,Florida Board of County Commissioners Notes To Financial Statements Year Ended September 30, 2009 NOTE 17- FUND EQUITY DEFICIT The following funds had a deficit in fund balance at September 30, 2009: Fund Deficit Nonmajor Governmental Funds: Metropolitan Planning Organization Fund $ 69,300 Federal/State Grants Fund 8,825 Community Development Block Grant Fund 9,460 Disaster Recovery Grant Fund 55,565 Total Deficit $ 143,150 The deficits for these four funds will be eliminated by grant proceeds in fiscal year 2010. NOTE 18—NET ASSETS A. Restricted Net Assets The Board has established certain restrictions within the net assets section of the proprietary funds. Restricted net assets at September 30, 2009, consist of the following: Restricted for Debt Service: Golf Course Fund $ 42,500 County Utilities Fund 239,167 Total $ 281,667 Restricted for Capital Projects: County Utilities Fund $ 50.740.261 B. Restatement of Beginning Net Assets In accordance with the requirements of GASB Statement 49, Accounting and Financial Reporting for Pollution Remediation Obligations, beginning net assets for the Utilities Fund was restated. Based on the consultant's report, the Utilities Fund's portion of the estimated liability at October 1, 2008 was $85,425; therefore, beginning net assets was reduced by that amount. For more information on the Board's pollution remediation obligation,please see Note 12. 287 Indian River County,Florida Board of County Commissioners Notes To Financial Statements Year Ended September 30, 2009 NOTE 19 -RISK MANAGEMENT A. General Liability,Property,Worker's Compensation and Medical The Board is exposed to various risks of loss related to torts, theft of, damage to and destruction of assets, errors or omissions, injuries to employees, and natural disasters. The Board established a Self Insurance Fund (an internal service fund) to account for and finance its uninsured risk of loss. Under this program,the Self Insurance Fund provides coverage as follows: 10/01/04 to 04/01/08 to 10/01/08 to 03/31/08 09/30/08 09/30/09 Worker's Compensation $ 600,000 $300,000 $ 350,000250,000 General Liability 200,000 250,000 Auto Liability 200,000 250,000 250,000 Property Damage 500 -25,000 500-25,000 250,000 Error or Omissions 200,000 250,000 250,000 Annual Aggregate 1,000,000 1,000,000 2,000,000 Liquor Liability 1,000,000 1,000,000 1,000,000 The Board purchases excess insurance to cover claims in excess of the coverage listed above. There is a 5%deductible per location for property damages arising due to a hurricane under the reinsurance policy. The Board has not incurred any settlements in excess of the insurance coverage listed above in the past four fiscal years. All departments of the Board participate in the program. Payments are made by various funds to the Self Insurance Fund based on past experience and actual estimates of the amounts needed to pay current year claims. The Board is also self-insured for medical claims covering employees and their eligible dependents. As required by Section 112.081, Florida Statutes, retirees and their eligible dependents are provided the same health care coverage as is offered to active employees; however, the retirees are responsible for payment of the premiums. Medical claims are paid from premiums contributed by employees, retirees, and by the Board. Premiums and contributions are determined by projected claims based on historical and actuarial experience. The self insurance plan assumes all risk for claims, other than worker's compensation, up to $250,000 per occurrence. For worker's compensation, the plan assumes all risk for claims up to $350,000 per occurrence. The Board has purchased a reinsurance policy to cover claims in excess of these limits. There were no claims in excess of these limits for the 2007, 2008, and 2009 fiscal years. r 288 Indian River County,Florida Board of County Commissioners Notes To Financial Statements Year Ended September 30, 2009 NOTE 19- RISK MANAGEMENT- Continued A. General Liability,Property,Worker's Compensation and Medical—Continued The claims liability of $7,875,000 reported at September 30, 2009, is based on the requirements of generally accepted governmental accounting standards, which require that a liability for claims be reported if information prior to the issuance of the financial statements, and the amount of the loss, can be reasonably estimated. Estimates for claims incurred but not reported are actuarially determined and recorded. Based on the actuary's report, $2,348,660 will be liquidated over the next twelve months. Changes in the fund's claims liability amount during the current and prior three fiscal years are as follows: Balance at Claims Balance Fiscal Year and Changes Claims at Fiscal Bea*— ' g in Estimates Payments Year End 2005-2006 5,330,000 13,026,906 (12,490,906) 5,866,000 2006-2007 5,866,000 14,282,793 (13,589,793) 6,559,000 2007-2008 6,559,000 14,209,397 (13,873,397) 6,895,000 2008-2009 6,895,000 15,637,406 (14,657,406) 7,875,000 Included in the charges to other funds is an amount to fund future catastrophic losses not actuarially determined; and at September 30, 2009, unreserved net assets of$17,937,488 have been designated for this purpose. The Board has elected to accrue the larger of the discounted liability or undiscounted liability. At September 30, 2009, the undiscounted liability was the greater of the two amounts. The discount rate used in the calculation was 2.5 percent. NOTE 20-COMMITMENTS AND CONTINGENCIES A. Litigation Various suits and claims are currently pending against the Board. It is impossible for the Board to accurately quantify the exposure involved given the jury's latitude in assessing compensatory and punitive damages, and the court's latitude in awarding attorney's fees. The Board intends to vigorously defend against these lawsuits and believes it has a good chance of prevailing on their merits. The Board is contingently liable with respect to lawsuits and other claims incidental to the ordinary course of its operations. In the opinion of management and based on the advice of legal counsel, the ultimate disposition of lawsuits will not have a material adverse effect on the financial position of the Board. 289 Indian River County,Florida Board of County Commissioners Notes To Financial Statements Year Ended September 30, 2009 NOTE 20 -COMMITMENTS AND CONTINGENCIES -Continued „ B. Contracts and Other Commitments The Board has various contracts and commitments outstanding at September 30, 2009. In the General Fund, contracts are for custodial services and external auditing services. In the Special Revenue Funds, contracts are for beach renourishment projects, renovation and construction of Fire/EMS stations, numerous environmental protection services, and a variety of road paving and drainage projects. In the Capital Projects Funds, contracts are for the parks maintenance complex, the Egret Marsh stormwater park, and several sidewalk and road improvement projects throughout the County. In the Enterprise Funds, contracts are for the North County Reverse Osmosis Plant expansion, the West Regional Wastewater Treatment Plant expansion, the vertical expansion and partial closure of the Class I landfill, State Road 60 utility conflict resolution and various other water and sewer projects. A summary of these projects at September 30, 2009, is as follows: Remaining Total Total Paid as of Balance at Contract Price September 30,2009 September 30, 2009 General $ 724,705 $ (403,237) $ 321,468 Special Revenue 48,056,090 (27,405,108) 20,650,982 Capital Projects 11,359,283 (6,328,716) 5,030,567 Enterprise 34,818,439 (28,775,450) 6,042,989 Total $ 94,958,517 $ (62,912,511) $ 32,046,006 C. Grants Amounts received or receivable from grantor agencies are subject to audit and adjustment by grantor agencies. If any expenditures are disallowed as a result of these audits, the claims for reimbursement to the grantor agency would become a liability of the Board. In the opinion of management, any such adjustments would not be significant. NOTE 21—SUBSEQUENT EVENTS St. Edward's School Inc. - Conduit Debt On January 6, 2010 Indian River County was notified via registered mail that an Event of Default had occurred under the Credit Agreement for the St. Edward's School bonds. Due to this event, U.S. Bank National Association (the Trustee) was instructed by Wachovia Bank N.A. (the Credit Provider) to accelerate the St. Edward's School Bonds. 290 Harris, Cotherman, Jones, Price & Associates Certified Public Accountants-Chartered 5070 North Highway AIA,Suite 250 Vero Beach,FL 32963 Tel 772.234-8454 Fax 772-234.8488 Report on Internal Control over Financial Reporting and on Compliance and Other Matters Based on an Audit of Financial Statements Performed in Accordance with Government Auditing Standards The Honorable Board of County Commissioners Indian River County, Florida We have audited the basic financial statements of Indian River County, Florida, including the individual fund financial statements of the Board of County Commissioners (the "Board"), as of and for the year ended September 30, 2009 and have issued our report thereon dated March 12, 2010. We conducted our audit in accordance with auditing standards generally accepted in the United States of America and the standards applicable to financial audits contained in Government Auditing Standards issued by the Comptroller General of the United States. Internal Control over Financial Reporting In planning and performing our audit, we considered the Board's internal control over financial reporting as a basis for designing our auditing procedures for the purpose of expressing our opinions on the financial statements, but not for the purpose of expressing an opinion on the effectiveness of the Board's internal control over financial reporting. Accordingly, we do not express an opinion on the effectiveness of the Board's internal control over financial reporting. A control deficiency exists when the design or operation of a control does not allow management or employees, in the normal course of performing their assigned functions, to prevent or detect misstatements on a timely basis. A significant deficiency is a control deficiency, or combination of control deficiencies, that adversely affects the Board's ability to initiate, authorize, record, process, or report financial data reliably in accordance with generally accepted accounting principles such that there is more than a remote likelihood that a misstatement of the Board's financial statements will not be prevented or detected by the Board's internal control. A material weakness is a significant deficiency, or combination of significant deficiencies, that results in more than a remote likelihood that a material misstatement of the financial statements will not be prevented or detected by the Board's internal control. Our consideration of the internal control over financial reporting was for the limited purpose described in the first paragraph of this section and would not necessarily identify all deficiencies in internal control that might be significant deficiencies or material weaknesses. We did not identify any deficiencies in internal control over financial reporting that we consider to be material weaknesses, as defined above. "Providing Vision atd Direction W our Clients" Member AICPA Member AICPA Division For CPA Firms Member FICPA Private Companies Practice Section 291 8 Harris, Cotherrnan, Jones, Price Associates Certified Public Accouncaws-Chamemd The Honorable Board of County Commissioners Indian River County,Florida Page two Compliance and Other Matters As part of obtaining reasonable assurance about whether the Board's fund financial statements are free of material misstatement, we performed tests of its compliance with certain provisions of laws regulations, grant agreements and contracts, noncompliance with which could have a direct g providing an and material effect on the determination of financial statement amounts. However, p g opinion on compliance with those provisions was not an objective of our audit and, accordingly, we do not express such an opinion. The results of our rt d under disclosedGovn i nst antesAudiof noncompliance or other matters that are required to be po ng Standards. This report is intended solely for the information and use of the Board of County Commissioners, management, and the Auditor General of the State of Florida and is not intended to be and should not be used by anyone other than these specified parties. / n J / Vero B Florida h, March 12,2010 r 292 Harris, Cotherman, Jones, Price & Associates Certified Public Accountants-Chartered 5070 North Highway AlA,Suite 250 Vero Beach,FL 32963 Tel 772.234-8484 Fax 772-2344488 Management Letter The Honorable Board of County Commissioners Indian River County,Florida We have audited the basic financial statements of Indian River County,Florida,including the individual fund financial statements of the Board of County Commissioners,as of and for the year ended September 30,2009 and have issued our report thereon dated March 12, 2010. We conducted our audit in accordance with United States generally accepted auditing standards;the standards applicable to financial audits contained in Government Auditing Standards issued by the Comptroller General of the United States; and OMB Circular A-133, Audits of States, Local Governments, and Non-Profit Organizations. We have issued our Independent Auditors' Report on Internal Control Over Financial Reporting and on Compliance and Other Matters,Independent Auditors' Report on Compliance with Requirements Applicable to Each Major Federal Program and Major State Project, and Schedule of Findings and Questioned Costs. Disclosures in those reports and schedule, which are dated March 12, 2010, should be considered in conjunction with this management letter. Additionally, our audit was conducted in accordance with Chapter 10.550, Rules of the Auditor General, which govern the conduct of local government entity audits performed in the state of Florida and require that certain items be addressed in this letter. In accordance with the Rules of the Auditor General(Section 10.554(1)(i)1.), we have noted that there were no findings and recommendations made in the preceding annual financial audit. As required by the Rules of the Auditor General(Section 10.554(l)(i)2.), the scope of our audit included a review of the provisions of Section 218.415, Florida Statutes, regarding the investment of public funds. In connection with our audit, we determined that the Board of County Commissioners complied with Section 218.415,Florida Statutes. The Rules of the Auditor General(Section 10.554(l)(i)3.),require that we submit recommendations designed to help the Board of County Commissioners improve the internal control structure and achieve operational efficiencies. In connection with our audit,we have the following recommendation: Fixed Asset Inventory During the current year we noted various equipment that was not able to be located during the physical inventory counts primarily for the Fire Rescue and the Library Services departments. Many of these assets were fully depreciated or had a minimal remaining net book value. After further inquiry and follow-up, it appears that some of these assets were located; however, significant efforts in tracking location and disposal forms were required. 'Trovi ft Visiott and Dhm&n to our Clients" Member FiCPA Member AICPA Member AICPA Division For CPA Firms Private Companies Practice Section 293 Harris, Cotherman, Jones, Price &Associates Certified Public Accountants-Chartered The Honorable Board of County Commissioners Indian River County,Florida Page two Physical inventory should be tracked and records be maintained to ensure adequate internal controls are in place and accountability is maintained by each department. We recommend the County identify custodians for these departments who will be responsible for tracking assets and their locations during transfer, and maintaining tracking records on site. These custodians should be sending disposal/transfer tracking sheets on a timely basis to the Finance Department as inventory is moved. We also recommend the Finance Department periodically confirm their records with the department custodian's on-site records to confirm that deletions and transfer records are accurate and updated. Overall, implementing these recommendations will ensure that the physical inventory count process will be more simplified and accurate and records for each department will coincide with those of the Finance Department during the annual physical inventory. The Rules of the Auditor General(Section 10.554(1)(i)4.)require that we address violations of provisions of contracts and grant agreements or abuse that have occurred,or are likely to have occurred,that have an effect on the financial statements that is less than material but more than inconsequential. In connection with our audit,we did not have any such fmdings. The Rules of the Auditor General(Section 10.554(lXi)5.)require disclosure in the management letter of the following matters that are inconsequential to the determination of financial statement amounts, considering both quantitative and qualitative factors: (1)violations of provisions of contracts or grant agreements,fraud, illegal acts or abuse and(2)control deficiencies that are not significant deficiencies. In connection with our audit,we did not have any such findings. The Rules of the Auditor General (Section 10.554(lXi)6.) require that the name or official title and legal authority for the primary government and each component unit of the reporting entity be disclosed in this management letter, unless disclosed in the notes to the financial statements. This disclosure has been included in the notes to the financial statements. This report is public record and its distribution is not limited. This report is intended for the information of management, the Board of County Commissioners, and the Auditor General of the State of Florida, and is not intended to be and should not be used by anyone other than these specified parties. #Xat,a)/ Vero BAch,Florida March 12,2010 294 BOARD OF COUNTY COMMISSIONERS 1801 2e Street, Vero Beach, Florida 32960-3388 4 Office of Management&Budget Telephone: (772)226-1214 a March 12,2010ORI�4' Harris, Cotherman,Jones,Price&Associates 5070 North AIA, Suite 250 Vero Beach,FL 32963 Dear Harris,Cotherman, Jones,Price&Associates: Please find below our response to the management letter resulting from the audit of the general purpose financial statements of Indian River County for the fiscal year ended September 30, 2009. Fixed Asset Inventory Notification was sent to all County departments in November 2009 to assign a designated fixed asset custodian. This custodian will be responsible for the fixed asset inventory in their department, reviewing their surplus listing on a quarterly basis, and completing disposal/transfer forms in a prompt manner. The Budget Office will be notified of any items not located during the inventory process. An explanation will be provided by the department and the appropriate paperwork will be completed by the custodian. Sincerely, Jaso E. rown Dire ,Management&Budget 91 IN 295 �Y 1 Q� .f ' .4 CLERK OF THE CIRCUIT COURT 297 Harris, Cotherman, Jones, Price &Associates Certified Public Accountants-Chartered 5070 North Highway AlA,Suite 250 Vero Beach,FL 32963 Tel 772-234.8484 Fax 772.234-8488 Independent Auditors'Report on Special Purpose Financial Statements Prepared in Compliance with a Regulatory Provision That Results in an Incomplete Presentation But One That is Otherwise in Conformity with Generally Accepted Accounting Principles The Honorable Jeffrey K.Barton Clerk of the Circuit Court Indian River County,Florida We have audited the accompanying fund financial statements of Indian River County,Florida Clerk of the Circuit Court as of and for the year ended September 30, 2009 as listed in the table of contents. These financial statements are the responsibility of the Clerk of the Circuit Court's management. Our responsibility is to express an opinion on the financial statements based on our audit. We conducted our audit in accordance with auditing standards generally accepted in the United States of America and the standards applicable to financial audits contained in Government Auditing Standards issued by the Comptroller General of the United States. Those standards require that we plan and perform the audit to obtain reasonable assurance about whether the fund financial statements are free of material misstatement. An audit includes examining, on a test basis, evidence supporting the amounts and disclosures in the presentation of the fund financial statements. An audit also includes assessing the accounting principles used and significant estimates made by management, as well as evaluating the overall presentation of the financial statements. We believe that our audit provides a reasonable basis for our opinion. As described in Note 1,the accompanying fund financial statements present the financial position of only the Clerk of the Circuit Court at September 30, 2009 and the results of its operations for the year then ended. These statements are not intended to be a complete presentation of the financial position of Indian River County. In our opinion, the accompanying fund financial statements present fairly, in all material respects, the financial position of the Clerk of the Circuit Court as of September 30, 2009 and the results of its operations for the year then ended in conformity with U.S.generally accepted accounting principles. In accordance with Government Auditing Standards, we have also issued a report dated March 12, 2010 on our consideration of the Clerk of the Circuit Court's internal control over financial reporting and on our tests of compliance with certain provisions of laws,regulations,contracts,and grant agreements. This report is intended solely for the information and use of management,the Clerk of the Circuit Court, Indian River County, the Florida Auditor General, and applicable federal and state agencies, and is not 3ero ded to be and should not be used by anyone other than these specified parties. kA se ad Florida March 12,2010 'Providing ViAm and Dh+ection to our Clients" Member AICPA Member AICPA Division For CPA Firms Member FICPA Private Companies Practice section 298 Indian River County,Florida Clerk of the Circuit Court Balance Sheet Governmental Funds September 30, 2009 Total Special Revenue Governmental General Fund Funds ASSETS $ 395,044 $ 2,547,737 $ 2,942,781 Cash and cash equivalents _ 70,687 Accounts receivable 70 ,687 1,191 20,428 21,619 Prepaid expenses _ 4,434 Due from other governments 4,434 $ 471,356 $ 2,568,165 $ 3,039,521 Total assets LIABILITIES AND FUND BALANCES Liabilities: 1,420 $ 11,686 Accounts payable $ 10,266 $ 140,724 140,724 Due to other governments _ 211,846 Other deposits held in escrow 211,846 362,836 1,420 364,256 Total liabilities Fund Balances: 2,566,745 2,675,265 Unreserved 108,520 108, Total fund balances 520 2,566,745 2,675,265 Total liabilities and fund balances $ 471,356 $ 2,568,165 $ 3,039,521 r The accompanying notes are an integral part of the financial statements. 299 Indian River County,Florida Clerk of the Circuit Court Statement of Revenues,Expenditures,and Changes in Fund Balance Governmental Funds For the Year Ended September 30,2009 Total Special Revenue Governmental General Fund Funds REVENUES Intergovernmental $ 934,432 $ - $ 934,432 Charges for services 2,887,014 315,155 3,202,169 Judgments,fines and forfeits 1,056,317 40,970 1,097,287 Interest - 38,871 38,871 Total revenues 4,877,763 394,996 5,272,759 EXPENDITURES General government 2,167,081 257,856 2,424,937 Court related 4,110,104 75,631 4,185,735 Total expenditures 6,277,185 333,487 6,610,672 Excess of revenues over (under)expenditures (1,399,422) 61,509 (1,337,913) OTHER FINANCING SOURCES(USES) Transfers in 451,318 - 451,318 Transfers out - (451,318) (451,318) Transfers from Board of County Commissioners 1,086,956 - 1,086,956 Transfer from other governments 145,000 - 145,000 Transfer to other governments (175,332) - (175,332) Total other financing sources(uses) 1,507,942 (451,318) 1,056,624 Net change in fund balances 108,520 (389,809) (281,289) r Fund balances at beginning of year - 2,956,554 2,956,554 Fund balances at end of year $ 108,520 $ 2,566,745 $ 2,675,265 f The accompanying notes are an integral part of the financial statements. 300 Indian River County,Florida Clerk of the Circuit Court Statement of Revenues,Expenditures,and Changes in Fund Balances-Budget and Actual General Fund For the Year Ended September 30,2009 Variance with Final Budget Budgeted Amount Positive Original Final Actual (Negative) REVENUES93,201 Intergovernmental $ 380,824 $ 841,231 $ 934,432 $ Charges for services 3,700,303 3,375,112 2,887,014 (488,098) 1,195,000 864,999 1,056,317 191,318 Judgments,fines and forfeits 35,000 - (35,000) Interest 47,000 579) Total revenues 5,323,127 5,116,342 4,877,763 (238, EXPENDITURES183,636 General government 2,613,371 2,350,717 2,167,081 4,200,575 4,295,691 4,110,104 185,587 Court related277,185 369,223 Total expenditures 6,813,946 6,646,408 6, Excess of revenues over 0 130,644 (under)expenditures ,490,819) (1,530,066) (1,399,422) OTHER FINANCING SOURCES(USES) 403,863 443,110 451,318 8,208 Transfers in Transfers from Board _ 6 of County Commissioners 1,08 ,956 1,086,956 1,086,956 145,000 _ _ 145,000 Transfers from other governments _ _ (175,332) (175,332) Transfers to other governments 1,507,942 (22,124) Total other financing sources(uses) 1,490,819 1,530,066 $ _ $ _ 108,520 $ 108,520 Net change in fund balances Fund balances at beginning of year $ 108,520 Fund balances at end of year The accompanying notes are an integral part of the financial statements. 301 Indian River County, Florida Clerk of the Circuit Court Statement of Fiduciary Net Assets Agency Fund September 30, 2009 ASSETS Cash and cash equivalents $ 4,409,189 Accounts receivable 110 Total assets $ 4,409,299 LIABILITIES Accounts payable $ 104,057 Due to other governments 1,139,174 Escrow deposits 3,166,068 Total liabilities $ 4,409,299 The accompanying notes are an integral part of the financial statements. 302 Indian River County, Florida Clerk of the Circuit Court Notes To Financial Statements Year Ended September 30, 2009 NOTE I - SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES The Clerk of the Circuit Court is a County agency and a local governmental entity pursuant to Article VIII, Section 1(d) of the Constitution of the State of Florida. For financial statement and reporting purposes, the Clerk of the Circuit Court does not meet the definition of a legally separate organization and is not considered to be a component unit. The Clerk of the Circuit Court is considered to be a part of the primary government of Indian River County. As part of the 2009 Legislative changes, the Clerk's court-related functions are now funded through L general revenue appropriations and by trust funds supported by filing fees, servicecharges, fines, ourt costs assessed to parties using the court system. Under 2009-204, Laws of Florida revenue collected by the Clerk is remitted to the Florida Department of Revenue and deposited in the Clerk of L Court Trust Fund within the Justice Administrative Commission. The fiscal year for court operations is July 1 to June 30 and the fiscal year for non-court operations is October 1 to September 30. The financial statements contained herein represent the financial transactions of the Clerk of the Circuit Court only. The format of the Clerk of Circuit Court's it for fund financial ststaatements has been prepared in accordance with the presentation requirements of G ASB s. The following is a summary of the significant accounting principles and policies used in the preparation of the accompanying financial statements. A. Description of Funds For reporting purposes,the accounting records are organized into the following two fund types: governmental funds and a fiduciary fund. Governmental Funds General Fund—The General Fund,which is a governmental fund, is used to account for all revenues and expenditures applicable to the general operations of the Clerk of the Circuit Court which is not accounted for in another fund. All general operating nThe governmental restricted fund measurement focus is use by outside sources, are recorded in the General Fund based upon determination of financial position and changes in financial position (sources, uses and balances of financial resources) rather than upon net income determination. Revenue Fund accounts for the proceeds from recording fees to Special Revenue Fund—The Special R be used for modernizing the Clerk of the Circuit Court's public records systems, subsidizing court-related operational needs and program enhancements, and adding access to public records (by charging a computer usage fee). Fiduciary Fund Circuit Court Agency Fund—The Agency Fund is used toaccount ot be used to support the Clerk's own programs. in a trustee capacity or as an agent. These funds 303 Indian River County,Florida Clerk of the Circuit Court Notes To Financial Statements Year Ended September 30, 2009 NOTE 1 -SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES- Continued B. Basis of Accounting,Measurement Focus and Presentation The accounts of the governmental funds are maintained on the modified accrual basis. Under the modified accrual basis, expenditures are recorded at the time liabilities are incurred. Revenues are recorded when received in cash or when they are considered both measurable and available. The Clerk only considers revenue to be available if collected within the current fiscal year, except for Title IV-D grant revenue. This grant revenue is subject to accrual and has been recognized as revenue of the current fiscal period. Revenues collected in excess of expenditures are not considered earned and are reflected as liabilities. The fiduciary fund is accounted for on the accrual basis. C. Budgetary Requirements State statutes require the Clerk of the Circuit Court to prepare his budget in two parts: the budget relating to the State court system, including recording; and the budget relating to the requirements of the Clerk as Clerk to the Board of County Commissioners, County auditor, and custodian of all County funds and other County-related duties. The budget relating to the State court system, including recording, is prepared by the Clerk and submitted to the Florida Clerks of Court Operations Corporation (CCOC)prior to October 1 of each year. The budget relating to the requirements of the Clerk as Clerk to the Board of County Commissioners is prepared prior to June 1 and is reviewed, modified if required, and approved by the Board. Both budgets are adopted on a basis consistent with generally accepted accounting principles. The budget legally adopted by the Clerk must be balanced; that is, the total of estimated receipts, including funding from the Board, shall equal the total estimated expenditures. Management is authorized to transfer budgeted amounts between objects and departments in any fund as long as management does not exceed the total appropriations of a fund. D. Cash and Cash Equivalents Cash and cash equivalents include deposits and all highly liquid investments with maturities of ninety days or less when purchased. E. Prepaid Expenses This account represents prepayments for services that will be used in future periods. The Clerk's policy is to record the expenditure for the services when they are used rather than when the cash is disbursed. F. Capital Assets Acquisitions of equipment are recorded as expenditures at the time of purchase for governmental fund financial statements. Tangible personal property used by the Clerk of the Circuit Court in operations is reported in the financial statements of the County. Refer to the County-wide note on capital assets for capitalization threshold, depreciation methodology and useful lives. t, 304 River County,tY,Florida Clerk of the Circuit Court Notes To Financial Statements Year Ended September 30, 2009 NOTE 1 - SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES-Continued G. Compensated Absences The Clerk of the Circuit Court accrues a liability for employees' rights to receive compensation for future absences when certain conditions are met. The Clerk of the Circuit Court does not, nor is he legally required to, accumulate expendable available financial resources to liquidate this obligation. Accordingly, the liability for compensated absences is not reported in the Clerk of the Circuit Court financial statements. Additional information on the liability is reflected in subsequent Note 6. H. Transfer In With the change in fiscal year for court-related operations from September 30 to June 30, the CCOC advance funded$145,000 which represented 1/2 of the month of Julys state appropriation. I. Transfer Out In accordance with Florida Statutes, all non-court-related revenues in excess of expenditures as of year- end are owed to the Board of County Commissioners before November 1. At September 30, 2009, there were no excess fees due to the Board. With the change in fiscal year for court-related operations from September 30 to June 30, excess revenues over expenditures at June 30, in the amount of$175,332,were submitted to the CCOC through the Department of Revenue for deposit to the Clerk of Court Trust Fund. A transfer in the amount of$451,318 was made from the public modernization funds to the non-court related general fund to cover technology-related expenses. J. Fund Balance Court-related revenues in excess of expenditures at September 30, 2009 were $108,520. Per Florida Senate Bills 1718 and 2108, excess fees for the court related function are determined on June 30th of each year to coincide with the State fiscal year. Therefore, it is presented as fund balance of the General Fund at September 30,2009. NOTE 2-CASH AND CASH EQUIVALENTS A. Deposits At September 30, 2009, the carrying value of the Clerk's deposits was $4,434,319, and the bank balance was $5,373,546. All deposits with financial institutions were 100% insured by federal depository insurance or by collateral provided by qualified public depositories to the State Treasurer in accordance with Section 280.01, Florida Statutes, also known as the Florida Security for Public Deposits Act. The Clerk's office adopted the Board of County Commissioners' investment policy. This policy requires the Clerk's office to follow the above state law(governing custodial credit risk) for cash deposits. Refer to the County-wide Note 4, Cash and Cash Equivalents, for definition of custodial credit risk. 305 Indian River County,Florida Clerk of the Circuit Court Notes To Financial Statements Year Ended September 30, 2009 NOTE 2 -CASH AND CASH EQUIVALENTS- Continued B. Investments The Local Government Surplus Funds Trust Fund is a moneymarket fund classified as a"2a7 like fund" using the SEC investment requirements for 2a7 funds. The fund was established by Florida Statute 218.405 and is administered by the Florida State Board of Administration. At year end, the Clerk had $39,668 invested in Fund B Local Government Surplus Funds Trust Fund. At September 30, 2009, the State Board of Administration (SBA) determined a negative fair market value adjustment of 45.08% of the portfolio balance, or $17,884, was needed to represent the fair market value of the participation. Consequently,the net investment in Fund B is reported at$21,784. The Florida Local Government Investment Trust Fund-Florida Trust Day to Day Fund is a money market product of various securities with maturities of less than 762 days. The fund was established by Florida Statute 163.01, is administered by the Florida Association of Court Clerks, and is marked to market daily. The Clerk invested $2,894,067 with the Florida Local Government Investment Trust Fund. Both of these State authorized pools are specifically permitted in the Clerk's investment policy and in Section 218.415 (17), Florida Statutes. This statute, the County-wide investment policy, and credit risks are explained in Note 4 of the County-wide financial statements. NOTE 3—PENSION PLAN Florida Retirement System Plan Description: The Clerk's employees participate in the Florida Retirement System (FRS), a cost- sharing multiple-employer public employee retirement system, administered by the Florida Department of Management Services. The FRS is noncontributory for all members; the employer makes all contributions. Employees elect participation in either the defined benefit plan (Pension Plan) or the defined contribution plan (Investment Plan). The Pension Plan provides for vesting of benefits after six years of creditable service. Normal retirement benefits are available to employees who retire at or after age 62 with six or more years of service. Early retirement is available after six years of service with a five percent reduction in benefits for each year prior to the normal retirement age. For those employees who elect participation in the Investment Plan rather than the Pension Plan, vesting occurs after one year of service and there is no "normal retirement age". These participants receive a defined contribution for self-direction in an investment product with a third party administrator selected by the State Board of Administration. Retirement benefits are based on age, average compensation, and years-of-service credit where average compensation is computed as the average of an individual's five highest years of earnings. For further information concerning the Florida Retirement System and contribution rates, please read County-wide Note 15,Pension Plans. 306 County,Florida Indian River Clerk of the Circuit Court Notes To Financial Statements Year Ended September 30, 2009 NOTE 3–PENSION PLAN-Continued Contributions to the FRS for the fiscal year ended September 30, 2009, were equal to 10.17% of the annual covered payroll. Contributions to the FRS for the fiscal years ended September 30, 2007, 2008, 2009 were $396,856, $417,836 and $432,578 respectively. These amounts are equal to 100% of the required contribution for each year. NOTE 4–OTHER POSTEMPLOYMENT BENEFITS The Clerk of the Circuit Court participated in the Indian River County Other Postemployment Benefits Trust(IRCOT). The Clerk's 2009 annual required contribution of$115,991 was funded by the Board of County Commissioners in the amount of$23,266 and funded by the court-related State expenditures in the amount of $92,725 as part of a total contribution determined by the IRCOT actuary. Further information on the IRCOT can be found in the County-wide financial statements and in County-wide Note 16. NOTE 5–RISK MANAGEMENT Indian River County maintains a risk management program that provides for coverage of risks of loss related to torts, theft of, damage to and destruction of assets, errors or omissions, injuries to employees, natural disasters, and medical and life insurance coverage for employees and their eligible dependents. Various excess catastrophe insurance policies with a commercial carrier are also in force for claims exceeding the amount chargeable against the Self-insurance Fund. The Clerk of the Circuit Court participated in the County's self-insurance program during fiscal year 2009 at an annual cost of approximately$872,673. Further details of this self-insurance program are discussed in the County wide financial statements and specifically in County-wide Note 20, Risk Management. NOTE 6–LONG-TERM LIABILITIES Changes in Long-Term Liabilities The following is a schedule of changes in long-term liabilities as of September 30, 2009: Beginning Ending Balance Balance 10/01/08 Additions Deletions 9/30/09 Accrued Compensated Absences UVI—QU UV,—Q81 $ 325,53 4 $ 21412-- Of the $219,412 liability for accrued compensated absences, management estimates that $50,000 will be due and payable within one year. The long-termliabilities are not spendable reported They are financial in the reported statements the available sreso the Clerk since they are not payable from p financial statements of the County. 307 Harris, Cotherman, Jones, Price Associates Certified Public Accountants•Chartered 5070 North Highway AIA,Suite 250 Vern Beach,FL 32963 Tel 772-234.8484 Fax 772.234.8488 Report on Internal Control Over Financial Reporting and on Compliance and Otber Matters Based on an Audit of Financial Statements Performed In Accordance with Government Auditing Standards The Honorable Jeffery K. Barton Clerk of the Circuit Court Indian River County,Florida We have audited the financial statements of Indian River County,Florida,including the fund financial statements of the Clerk of the Circuit Court,as of and for the year ended September 30,2009 and issued our report thereon dated March 12, 2010. We conducted our audit in accordance with auditing standards generally accepted in the United States of America and the standards applicable to financial audits contained in Government Auditing Standards issued by the Comptroller General of the United States. Internal Control over Financial Reporting In planning and performing our audit,we considered the Clerk of the Circuit Court's internal control over financial reporting as a basis for designing our auditing procedures for the purpose of expressing our opinion on the financial statements,but not for the purpose of expressing an opinion on the effectiveness of the Clerk of the Circuit Court's internal control over financial reporting. Accordingly, we do not express an opinion on the effectiveness of the Clerk of the Circuit Court's internal control over financial reporting. A deficiency in internal control exists when the design or operation of a control does not allow management or employees, in the normal course of performing their assigned functions, to prevent, or detect and correct misstatements on a timely basis. A material weakness is a deficiency,or combination of deficiencies, in internal control,such that there is a reasonable possibility that a material misstatement of the financial statements will not be prevented or detected by the entity's internal control. Our consideration of internal control over financial reporting was for the limited purpose described in the first paragraph of this section and was not designed to identify all deficiencies in internal control that might be deficiencies,significant deficiencies or material weaknesses. We did not identify any deficiencies in internal control over financial reporting that we consider to be material weaknesses,as defined above. Compliance and Other Matters As part of obtaining reasonable assurance about whether the Clerk of the Circuit Court's financial statements are free of material misstatement, we performed tests of its compliance with certain provisions of laws, regulations, contracts, and grant agreements, noncompliance with which could have a direct and material effect on the determination of financial statement amounts. However,providing an opinion on compliance with those provisions was not an objective of our audit and, accordingly, we do not express such an opinion. The results of our tests disclosed no instances of noncompliance that are required to be reported under Government Auditing Standards. "Providing Vision and Direction to our Clients" n Member AICPA Member AICPA Division For CPA Firma Member FICPA e Private Companies Practice Section 308 Harris Cotherman, Jones, Price &Associates Certified Public Aaountan6•Chartered The Honorable Jeffery K.Barton Clerk of the Circuit Court Page two uM Ind This report is intended solely for the information and use of management,the Clerk of the Circuit ditor General,and applicable federal and state agenoc es,and�is River County,others within the entity,the Florida Au not intended to be and should not be used by anyone other than these specified parties. Vero Beach,Florida March l2,2010 309 Harris, Cotherman, Jones, Price &Associates Certified Public Accountants-Chartered 5070 North Highway AIA,Suite 250 Vero Beach,FL 32963 Tel 772-234.8484 Fax 772.234-8488 Management Letter The Honorable Jeffrey K.Barton Clerk of the Circuit Court Indian River County,Florida We have audited the financial statements of Indian River County, Florida, including the fund financial statements of the Clerk of the Circuit Court, as of and for the year ended September 30, 2009 and have issued our report thereon dated March 12,2010. We conducted our audit in accordance with auditing standards generally accepted in the United States of America and the standards applicable to financial audits contained in Government Auditing Standards, issued by the Comptroller General of the United States. We have issued our Independent Auditors' Report on Internal Control over Financial Reporting and on Compliance and Other Matters based on an Audit of Financial Statements Performed in Accordance with Government Auditing Standards dated March 12,2010,which should be considered in conjunction with this management letter. Additionally,our audit was conducted in accordance with Chapter 10.550,Rules of the Auditor General, which govern the conduct of local governmental entity audits performed in the state of Florida.This letter includes the following information which is not included in the aforementioned auditors' report or schedule: Section 10.554(1 xi)l.,Rules of the Auditor General, requires that we determine whether or not corrective actions have been taken to address significant findings and recommendations made in the preceding annual financial audit report. There were no recommendations made in the preceding audit report. Section 10.554(1)(i)2., Rules of the Auditor General, requires our audit to include a review of the provisions of Section 218.415, Florida Statutes, regarding the investment of public funds. In connection with our audit,we determined that the Clerk of the Circuit Court,Indian River County,Florida,complied with Section 218.415,Florida Statutes. Section 10.554(lxi)3., Rules of the Auditor General, requires that we address in the management letter any recommendations to improve financial management. In connection with our audit, we have the following recommendation: Fixed Asset Inventory (Clerk to Board) During the current year, we noted various equipment that was not able to be located during the physical inventory counts,primarily for the Fire Rescue and Library Services departments. Many of these assets were fully depreciated or had a minimal remaining net book value. After further inquiry and follow-up, it appears that some of these assets were located; however, significant efforts in tracking location and disposal forms were required. " nt Vvdm and Direction to our Cherr&' Member AICPA Member AICPA Division For CPA Firms Member FICPA Private Companies Practice Section 3 310 L erma Harris, Cot KJones, Price &Assocniates Certified Public Accountants•Chartered The Honorable Jeffrey K.Barton Clerk of the Circuit Court Page two Physical inventory should be tracked and records be maintained to ensure adequate internal controls are in place and accountability is maintained by each department We recommend the County identify custodians for these departments who will be responsible for tracking assets and their locations during ntracking sheets on a timely bans t site. the These custodians should be sending disposal/transfer Finance Department as inventory is moved. We also recommend the Finance Department periodically confirm their records with the department custodian's on-site records to confirm that deletions and transfer records are accurate and updated. Overall, implementing these recommendations will ensure that the physical inventory count process will be more simplified and accurate and records for each department will coincide with those of the Finance Department during the annual physical inventory. Section 10.554(I)(i)4., Rules of the Auditor General, requires that we address violations of laws, regulations,and contracts or grant agreements,or abuse that have occurred,or are likely to have occurred, that have an effect on the determination of financial statement amounts that is less than material,but more than inconsequential. In connection with our audit,we did not have any such findings. Section 10.554(lxi)5.,Rules of the Auditor General, provides that the auditor may,based on professional judgment, report the following matters that have an inconsequential effect on financial statements, considering both quantitative and qualitative factors: (1)violations of contracts or grant agreements,or fraud, illegal acts, or abuse and, (2) control deficiencies that are not significant deficiencies. In connection with our audit,we did not have any such findings. Section 10.554(l)(i)6., Rules of the Auditor General, requires that the name or official title and legal authority for the primary government and each component unit of the reporting entity be disclosed in this management letter,unless disclosed in the notes to the financial statements. This information is disclosed in the notes to the financial statements. Section 10.554(lxi)8.,Rules of the Auditor General, regiSastatementnas totwhether or noth our the Clerk we of Courts complied with Section 28.35 and 28.36, Flo determined that the Clerk complied with such requirements. Pursuant to Chapter 119,Florida Statutes,this management letter is a public record and its distribution is not limited. Auditing standards generally accepted in the United States of America require us to indicate that this letter is intended solely for the information and use of management, the Clerk of the Circuit Court,Indian River County,the Florida Auditor General,thanthe easpe federal arrttestate agencies,and is not intended to be and should not be used by anyone other A C1'°a,c'C`icfcv V�Bawch�, lorida March 12,2010 311 JEFFREY K. BARTON Clerk of Circuit Court and Comptroller s Finance Department 1801 27th Street, Building A Vero Beach, Florida 32960 Telephone (772) 226-1945 March 12, 2010 Harris,Cotherman,Jones, Price&Associates 5070 North Highway AIA, Suite 250 Vero Beach,FL 32963 Dear Harris,Cotherman, Jones, Price&Associates: Please find below our response to the management comment for the 2008-2009 fiscal year. Fixed Asset Inventory The County Capital Asset Policy has been updated and approved as of November 24, 2009. The update included a new requirement that a custodian be designated for all Board departments and any constitutional officers or outside agencies of which the Board holds title to their assets. The Finance Department will confirm deletions and asset transfers quarterly with all designated custodians. We would like to thank your staff for their professional assistance during this audit. Sincerely, Sincerely, ane Ana;, u Jeffrey K. Barton Diane L. Bernardo Clerk of the Circuit Court and Comptroller Finance Director cc: Joseph A. Baird,County Administrator Jason Brown,Budget Director rt i 312 PROPERTY APPRAISER 313 Harris, Cotherman, Jones, Price &Associates Certified Public Accountants-Chartered 5070 North Highway AlA,Scute 250 Vero Beach,FL 32963 Tel 772434-8484 Fax 772.234.8488 Independent Auditors'Report pe p rt o n Special Purpose Financial Statements Prepared in Compliance with a Regulatory Provision That Results in an Incomplete Presentation But One That is Otherwise in Conformity with Generally Accepted Accounting Principles The Honorable David C.Nolte Property Appraiser Indian River County,Florida We have audited the accompanying fund financial statements of Indian River County, Florida Property Appraiser as of and for the year ended September 30, 2009 as listed in the table of contents. These financial statements are the responsibility of the Property Appraiser's management. Our responsibility is to express an opinion on the financial statements based on our audit. We conducted our audit in accordance with auditing standards generally accepted in the United States of America and the standards applicable to financial audits contained in Government Auditing Standards issued by the Comptroller General of the United States. Those standards require that we plan and perform the audit to obtain reasonable assurance about whether the fund financial statements are free of material misstatement. An audit includes examining, on a test basis, evidence supporting the amounts and disclosures in the presentation of the fund financial statements. An audit also includes assessing the accounting principles used and significant estimates made by management, as well as evaluating the overall presentation of the financial statements. We believe that our audit provides a reasonable basis for our opinion. As described in Note 1,the accompanying fund financial statements present the financial position of only the Property Appraiser at September 30, 2009 and the results of its operations for the year then ended. These statements are not intended to be a complete presentation of the financial position of Indian River County. In our opinion, the accompanying fund financial statements present fairly, in all material respects, the financial position of the Property Appraiser as of September 30, 2009 and the results of its operations for the year then ended in conformity with U.S.generally accepted accounting principles. In accordance with Government Auditing Standards, we have also issued a report dated March 12, 2010 on our consideration of the Property Appraiser's internal control over financial reporting and on our tests of compliance with certain provisions of laws,regulations,contracts,and grant agreements. This report is intended solely for the information and use of management,the Property Appraiser,Indian River County,the Florida Auditor General, and applicable federal and state agencies, and is not intended to b and should not be used by anyo a other than these specified parties. Vero B aL ch,Florida March 12,2010 "PmvWhv Vigor and Direction to our Clients" Member AICPA Member AICPA Division For CPA Fines Member FICPA Private Companies Practice Section 'f 314 Indian River County,Florida Property Appraiser Balance Sheet General Fund September 30, 2009 ASSETS $ 307,423 Cash and cash equivalents 9,227 Accounts receivable $ 316,650 Total assets - LIABILITIES AND FUND BALANCES Liabilities: $ 17,036 Accounts payable 288,539 Due to other governments 11,075 Deposits 316,650 Total liabilities Fund Balances: _ Fund balance _ Total fund balances Total liabilities and fund balances $ 316,650 The accompanying notes are an integral part of the financial statements. 315 Indian River County,Florida Property Appraiser Statement of Revenues,Expenditures,and Changes in Fund Balances-Budget and Actual General Fund For the Year Ended September 30,2009 Variance with Final Budget Budgeted Amount Positive Original Final Actual (Negative) REVENUES Charges for services $ 3,456,800 $ 3,457,562 $ 3,466,152 $ 8,590 Interest - - 3,912 3,912 Total revenues 3,456,800 3,457,562 3,470,064 12,502 EXPENDITURES General government 3,456,800 3,457,562 3,181,525 276,037 Total expenditures 3,456,800 3,457,562 3,181,525 276,037 Excess of revenues over (under)expenditures - - 288,539 288,539 OTHER FINANCING USES Excess fees to Board of County Commissioners - - (263,753) (263,753) Excess fees to other governments - - (24,786) (24,786) Total other financing uses - - (288,539) (288,539) Net change in fund balances $ - $ - _ $ _ Fund balances at beginning of year Fund balances at end of year $ _ k a The accompanying notes are an integral part of the financial statements. t 3 316 Indian River County,Florida Property Appraiser Notes To Financial Statements Year Ended September 30, 2009 NOTE 1 - SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES The Property Appraiser is a County agency and a local governmental entity pursuant to Article VIII, Section 1(d) of the Constitution of the State of Florida. For financial statement and reporting purposes, the Property Appraiser does not meet the definition of a legally separate organization and is not considered to be a component unit. The Property Appraiser 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 Property Appraiser only. The format of the Property Appraiser's statements has been prepared in accordance with the presentation requirements of GASB 34 for fund financial statements The following is a summary of the significant accounting principles and policies used in the preparation of the accompanying financial statements. A. Description of Funds The accounting records are organized for reporting purposes on the basis of governmental funds. Governmental Fund General Fund—The General Fund, which is a governmental fund,is used to account for all revenues and expenditures applicable to the general operations of the Property Appraiser. All general operating revenues, which are not restricted or designated as to use by outside sources, are recorded in the General Fund. The governmental fund measurement focus is based upon determination of financial position and changes in financial position (sources, uses and balances of financial resources) rather than upon net income determination. B. Basis of Accounting,Measurement Focus and Presentation The accounts of the governmental funds are maintained on the modified accrual basis. Under the modified accrual basis, expenditures are recorded at the time liabilities are incurred. Revenues are recorded when received in cash or when they are considered both measurable and available. Revenues collected in excess of expenditures are not considered earned and are reflected as liabilities. C. Budgetary Requirements State statutes require the Property Appraiser to prepare an annual budget, which clearly reflects the revenues available to his office and the functions for which money is to be expended. The budgeted revenues and expenditures are subject to the review and approval of the Department of Revenue. Management is authorized to transfer budgeted amounts between objects and departments as long as management does not exceed the total appropriations of a fund. Department of Revenue approval is only required when unanticipated revenues are received that management wishes to have appropriated, thereby increasing the total appropriations. The budget is prepared on a basis consistent with generally accepted accounting principles. 317 Indian River County,Florida Property Appraiser Notes To Financial Statements Year Ended September 30, 2009 NOTE 1 - SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES—Continued D. Capital Assets Acquisitions of equipment are recorded as expenditures at the time of purchase for governmental fund financial statements. Tangible personal property used by the Property Appraiser in operations is reported in the financial statements of the County. Refer to the County-wide note on capital assets for capitalization threshold, depreciation methodology and useful lives. E. Compensated Absences The Property Appraiser accrues a liability for employees' rights to receive compensation for future absences when certain conditions are met. The Property Appraiser does not, nor is he legally required to, accumulate expendable available financial resources to liquidate this obligation. Accordingly, the liability for compensated absences is not reported on the Property Appraiser's financial statements. Additional information on the liability is reflected in subsequent Note 6. F. Transfer Out In accordance with Florida Statutes, all revenues in excess of expenditures as of year-end are owed to the Board of County Commissioners and other governments. These "excess fees" totaled $288,539 and are reported as transfers out. These transfers are also reflected as Due to other governments on the balance sheet. NOTE 2 - CASH Deposits At September 30, 2009, the carrying amount of the Property Appraiser's deposits was $307,323 and the bank balance was $375,245. All deposits with financial institutions were 100% insured by federal depository insurance or by collateral provided by qualified public depositories to the State Treasurer in accordance with Section 280.01, Florida Statutes, also known as the Florida Security for Public Deposits Act. The Property Appraiser adopted the Board of County Commissioners' investment policy. This policy requires the Property Appraiser's office to follow the above state law (governing custodial credit risk) for cash deposits. Refer to the County-wide Note 4, Cash and Cash Equivalents, for definition of custodial credit risk. 318 Indian River County,Florida Property Appraiser Notes To Financial Statements Year Ended September 30, 2009 NOTE 3—PENSION PLAN Florida Retirement System Plan Description: The Property Appraiser's employees participate in the Florida Retirement System (FRS), a cost-sharing multiple-employer public employee retirement system, administered by the Florida Department of Management Services. The FRS is noncontributory for all members; all contributions are made by the employer. Employees elect participation in either the defined benefit plan (Pension Plan) or the defined contribution plan(Investment Plan). The Pension Plan provides for vesting of benefits after six years of creditable service. Normal retirement benefits are available to employees who retire at or after age 62 with six or more years.of service. Early retirement is available after six years of service with a five percent reduction in benefits for each year prior to the normal retirement age. For those employees who elect participation in the Investment Plan rather than the Pension Plan, vesting occurs after one year of service and there is no "normal retirement age". These participants receive a defined contribution for self-direction in an investment product with a third party administrator selected by the State Board of Administration. Retirement benefits are based on age, average compensation, and years-of-service credit where average compensation is computed as the average of an individual's five highest years of earnings. For further information concerning the Florida Retirement System and contribution rates, please read the County- wide note on the Florida Retirement System. Contributions to the FRS for the fiscal year ended September 30, 2009, were equal to 10.42% of the annual covered payroll. Contributions to the FRS for the fiscal years ended September 30, 2007, 2008, 2009 were $249,037, $241,429, and $220,468 respectively. These amounts are equal to 100% of the required contribution for each year. NOTE 4—OTHER POSTEMPLOYMENT BENEFITS The Property Appraiser participated in the Indian River County Other Post Employment Benefits Trust (IRCOT). The Property Appraiser's 2009 annual required contribution of $72,048 was funded by the Board of County Commissioners as part of a total contribution determined by the IRCOT actuary. Further information on the IRCOT can be found in the County-wide financial statements and in County Note 16. NOTE 5—RISK MANAGEMENT Indian River County maintains a risk management program that provides for coverage of risks of loss related to torts, theft of, damage to and destruction of assets, errors or omissions, injuries to employees, natural disasters, and medical and life insurance coverage for employees and their eligible dependents. Various excess catastrophe insurance policies with a commercial carrier are also in force for claims exceeding the amount chargeable against the Self-insurance Fund. The Property Appraiser participated in the County's self-insurance program during fiscal year 2009 at an annual cost of approximately $334,865. 319 Indian River County,Florida Property Appraiser Notes To Financial Statements Year Ended September 30, 2009 NOTE 6—LONG-TERM LIABILITIES r A. Changes in Long-Term Liabilities A summary of changes in long-term liabilities is as follows: Beginning Ending Balance Balance 10/01/08 Additions Deletions 09/30/09 Accrued Compensated Absences $ 93,291 117 3 121 1 Of the $89359 liabilityfor accrued compensated absences, management estimates that $15,000 will be due and payable within one year. The long-term liabilities are not reported in the financial statements of the Property Appraiser since they are not payable from available spendable resources. They are reported in the financial statements of the County. NOTE 7—COMMITMENTS AND CONTINGENCIES A. Litigation Various suits and claims are currently pending against the Property Appraiser. It is impossible for the Property Appraiser to accurately quantify the exposure involved given the jury's latitude in assessing compensatory and punitive damages, and the court's latitude in awarding attorney's fees. The Property Appraiser intends to vigorously defend against these lawsuits and believes he has a good chance of prevailing on their merits. In the opinion of management and based on the advice of legal counsel, the ultimate disposition of these lawsuits will not have a material adverse effect on the financial position of the Property Appraiser. B. Contingent Liability The Property Appraiser is currently negotiating a service contract related to their software. These negotiations create a contingent liability that is expected to be resolved in the subsequent fiscal year. 320 Harris, Cotherman, Jones, Price &Associates Certified Public Accountants-Chartered 5070 North I ighway AIA,Suite 250 Vero Beach,FL 32963 Tel 772,234.8484 Fax 772.234-8488 Report on Internal Control Over Financial Reporting and on Compliance and Other Matters Based on an Audit of Financial Statements Performed in Accordance with Government Auditing Standards The Honorable David C.Nolte Property Appraiser Indian River County,Florida We have audited the financial statements of Indian River County,Florida,including the fund financial statements of the Property Appraiser,as of and for the year ended September 30,2009 and issued our report thereon dated March 12,2010. We conducted our audit in accordance with auditing standards generally accepted in the United States of America and the standards applicable to financial audits contained in Government Auditing Standards issued by the Comptroller General of the United States. Internal Control Over Financial Reporting raiser's internal control over financial In planning and performing our audit, we considered the Property App reporting as a basis for designing our auditing procedures for the purpose of expressing ouropinion the financial statements,but not for the purpose of expressing an opinion on the effectiveness of the Prop et Appraiser's internal control over financial reporting. Accordingly, we do not express an opinion on the effectiveness of the Property Appraiser's internal control over financial reporting. A deficiency in internal control exists when the design or operation of a control does not allow management or employees, in the normal course of performing their assigned functions, to prevent, or detect and correct misstatements on a timely basis. A material weakness is a deficiency,or combination of deficiencies, in internal control,such that there is a reasonable possibility that a material misstatement of the financial statements will not be prevented or detected by the entity's internal control. Our consideration of internal control over financial reporting was for the limited purpose described in the first paragraph of this section and was not designed to identify all deficiencies in internal control that might be deficiencies,significant deficiencies or material weaknesses. We did not identify any deficiencies in internal control over financial reporting that we consider to be material weaknesses,as defined above. } Compliance and Other Matters about whether the Property Appraiser's financial statements are free of As part of obtaining reasonable assurance of its compliance with certain provisions of laws,regulations,contracts, material misstatement,we performed tests and grant agreements,noncompliance with which could have a direct and material effect on the determination of financial statement amounts. However, providing an opinion on compliance with those provisions was not an objective of our audit and, accordingly,we do not express such an opinion. The results of our tests disclosed no instances of noncompliance that are required to be reported under Government Auditing Standards. "Providing Vision and Direction to our Clients" Member FICPA Member AICPA Member AICPA Division For CPA Firms Private Companies Practice Section 321 Harris, Cotherman, Jones, Price &Associates Certified Public Accountants•Chartered The Honorable David C.Nolte Property Appraiser Page two This report is intended solely for the information and use of management, the Property Appraiser, Indian River County,others within the entity,the Florida Auditor General, and applicable federal and state agencies,and is not intended to be and should not be used by anyone other than these specified parties. Vero Beh,Florida March 12,2010 r i 322 Harris, Cotherman, Jones, Price & Associates Certified Public Accountants.Chartered 5070 North Highway AIA,Suite 250 Vero Beach,FL 32963 Tel 772-234.8484 Fax 772.234-8488 Management Letter The Honorable David C.Nolte Property Appraiser Indian River County,Florida We have audited the financial statements of Indian River County, Florida, including the fund financial statements of the Property Appraiser, as of and for the year ended September 30, 2009 and have issued our report thereon dated March 12,2010. We conducted our audit in accordance with auditing standards generally accepted in the United States of America and the standards applicable to financial audits contained in Government Auditing Standards, issued by the Comptroller General of the United States. We have issued our Independent Auditors' Report on Internal Control over Financial Reporting and on Compliance with Other Matters based on an Audit of Financial Statements Performed in Accordance with Government Auditing Standards dated March 12,2010,which should be considered in conjunction with this management letter. Additionally, our audit was conducted in accordance with Chapter 10.550,Rules of the Auditor General, which govern the conduct of local governmental entity audits performed in the state of Florida. This letter includes the following information which is not included in the aforementioned auditors' report or schedule: Section 10.554(Ixi)l.,Rules of the Auditor General, requires that we determine whether or not corrective actions have been taken to address significant findings and recommendations made in the preceding iu annual financial audit report. There were no recommendations made in the preceding audit report. Section 10.554(1)(i)2., Rules of the Auditor General, requires our audit to include a review of the provisions of Section 218.415, Florida Statutes,regarding the investment of public funds. In connection with our audit,we determined that the Property Appraiser, Indian River County, Florida, complied with Section 218.415,Florida Statutes. Section 10.554(l)(i)3., Rules of the Auditor General, requires that we address in the management letter any recommendations to improve financial management. In connection with our audit, we did not have any such recommendations. f Section 10.554(1)(1)4., Rules o the Auditor General, requires that we address violations of laws, regulations,and contracts or grant agreements,or abuse that have occurred,or are likely to have occurred, that have an effect on the determination of financial statement amounts that is less than material,but more than inconsequential. In connection with our audit,we did not have any such findings. "proming Viin and Dhw&n to ouc CllW&' Member FICPA Member AICPA Member AICPA Division For CPA Firms Private Companies Practice Section 323 Harris' Cotherman, Jones, Price &Associates Cerrified Public Accountants•Chartered The Honorable David C.Nolte Property Appraiser Page two Section 10.554(l)(i)5.,Rules of the Auditor General, provides that the auditor may,based on professional judgment, report the following matters that have an inconsequential effect on financial statements, rail considering both quantitative and qualitative factors: (1) violations of contracts or grant agreements,or fraud, illegal acts, or abuse and, (2) control deficiencies that are not significant deficiencies. In connection with our audit,we did not have any such findings. Section 10.554(lxi)6., Rules of the Auditor General, requires that the name or official title and legal authority for the primary government and each component unit of the reporting entity be disclosed in this management letter,unless disclosed in the notes to the financial statements. This information is disclosed in the notes to the financial statements. Pursuant to Chapter 119,Florida Statutes,this management letter is a public record and its distribution is not limited. Auditing standards generally accepted in the United States of America require us to indicate that this letter is intended solely for the information and use of management, the Property Appraiser, Indian River County, the Florida Auditor General, and applicable federal and state agencies, and is not intended to be and Lshould not be used by anyone other than thes-fe�specified parties. Vero Beach,Florida March 12,2010 324 N M W T�T� Vl _„ Harris, Cotherman, Jones, Price & Associates Certified Public Accountants-Chartered 5070 North Highway AIA,Suite 250 Vero Beach,FL 32963 Tel 772-234.8484 Fax 772.234-8488 Independent Auditors'Report on Special Purpose Financial Statements Prepared in Compliance with a Regulatory Provision That Results in an Incomplete Presentation But One That is Otherwise in Conformity with Generally Accepted Accounting Principles The Honorable Deryl Loar Sheriff Indian River County,Florida We have audited the accompanying fund financial statements of Indian River County, Florida Sheriff as of and for the fiscal year ended September 30, 2009, as listed in the table of contents. These financial statements are the responsibility of the Sheriff's management. Our responsibility is to express an opinion on the financial statements based on our audit. We conducted our audit in accordance with auditing standards generally accepted in the United States of America and the standards applicable to financial audits contained in Government Auditing Standards issued by the Comptroller General of the United States. Those standards require that we plan and perform the audit to obtain reasonable assurance about whether the fund financial statements are free of material misstatement. An audit includes examining, on a test basis, evidence supporting the amounts and disclosures in the presentation of the fund financial statements. An audit also includes assessing the accounting principles used and significant estimates made by management, as well as evaluating the overall presentation of the financial statements. We believe that our audit provides a reasonable basis for our opinion. As described in Note 1,the accompanying fund financial statements present the financial position of only the Sheriff at September 30, 2009, and the results of its operations for the year then ended. These statements are not intended to be a complete presentation of the financial position of Indian River County. In our opinion, the accompanying fund financial statements present fairly, in all material respects, the financial position of the Sheriff as of September 30, 2009, and the results of its operations for the year then ended in conformity with U.S.generally accepted accounting principles. In accordance with Government Auditing Standards, we have also issued a report dated March 12, 2010 on our consideration of the Sheriffs internal control over financial reporting and on our tests of compliance with certain provisions of laws,regulations,contracts,and grant agreements. This report is intended solely for the information and use of management, the Sheriff, Indian River County,the Florida Auditor General and applicable federal and state agencies, and is not intended to be and should not be used by anyone other than these specified parties. P Vero B cida March 12,2010 'Troviding Vision and Direction to our Client' Member AICPA Member AICPA Division For CPA Firms Member FICPA Private Companies Practice Section 326 Indian River County,Florida Sheriff Balance Sheet Governmental Funds September 30, 2009 Total Special Governmental General Revenue Funds ASSETS Cash and cash equivalents $ 1,566,147 $ 2,362,745 $ 3,928,892 Accounts receivable-net 29,670 7,417 37,087 Total assets $ 1,595,817 $ 2,370,162 $ 3,965,979 LIABILITIES AND FUND BALANCES Liabilities: Accounts payable $ 1,331,625 $ 29,636 $ 1,361,261 Due to other governments 264,192 64,460 328,652 Unearned revenue - 1,683 1,683 Total liabilities 1,595,817 95,779 1,691,596 Fund Balances: Unreserved - 2,274,383 2,274,383 Total fund balances - 2,274,383 2,274,383 Total liabilities and fund balances $ 1,595,817 $ 2,370,162 $ 3,965,979 The accompanying notes are an integral part of the financial statements. 327 Indian River County,Florida Sheriff Statement of Revenues,Expenditures, and Changes in Fund Balances Governmental Funds For the Year Ended September 30,2009 Total Special Governmental General Revenue Funds REVENUES Intergovernmental $ - $ 86,004 $ 86,004 Charges for services - 262,916 262,916 Judgments,fines and forfeits - 200,638 200,638 Miscellaneous 27,704 15,513 43,217 Total revenues 27,704 565,071 592,775 EXPENDITURES Public safety 38,899,541 520,685 39,420,226 Court related 1,710,933 17,165 1,728,098 Total expenditures 40,610,474 537,850 41,148,324 Excess of revenues over (under)expenditures (40,582,770) 27,221 (40,555,549) OTHER FINANCING SOURCES(USES) Transfers from Board of County Commissioners 40,846,962 14,000 40,860,962 Transfers to Board of County Commissioners (264,192) - (264,192) Total other financing sources 40,582,770 14,000 40,596,770 Net change in fund balances - 41,221 41,221 Fund balances at beginning of year - 2,233,162 2,233,162 Fund balances at end of year $ - $ 2,274,383 $ 2,274,383 The accompanying notes are an integral part of the financial statements. 328 un Indian River County,Florida Sheriff Statement of Revenues,Expenditures,and Changes in Fund Balances-Budget and Actual General Fund For the Year Ended September 30,2009 Variance with Final Budget Budgeted Amount Positive Original Final Actual (Negative) REVENUES Miscellaneous $ - $ 27,704 $ 27,704 $ - '` Total revenues - 27,704 27,704 - EXPENDITURES Public safety 38,657,458 39,163,724 38,899,541 264,183 Court related 1,844,076 1,710,942 1,710,933 9 Total expenditures 40,501,534 40,874,666 40,610,474 264,192 Excess of revenues over (under)expenditures (40,501,534) (40,846,962) (40,582,770) 264,192 OTHER FINANCING SOURCES(USES) Transfers from Board of County Commissioners 40,501,534 40,846,962 40,846,962 - Transfers to Board of County Commissioners - - (264,192) (264,192) Total other financing sources 40,501,534 40,846,962 40,582,770 (264,192) Net change in fund balances $ $ - $ Fund balances at beginning of year Fund balances at end of year $ The accompanying notes are an integral part of the financial statements. 329 Indian River County, Florida Sheriff Statement of Fiduciary Net Assets Agency Fund September 30, 2009 ASSETS Cash and cash equivalents $ 112,883 Total assets $ 112,883 LIABILITIES Escrow deposits $ 112,883 Total liabilities $ 112,883 The accompanying notes are an integral part of the financial statements. 330 County,Florida Indian River ty, Sheriff Notes To Financial Statements Year Ended September 30,2009 NOTE 1 - SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES The Sheriff is a County agency and a local governmental entity pursuant to Article VIII, Section 1(d) of the Constitution of the State of Florida. For financial statement and reporting purposes, the Sheriff does not meet the definition of a legally separate organization and is not considered to be a component unit. The Sheriff 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 Sheriff only. The format of the Sheriffs statements has been prepared in accordance with the presentation requirements of GASB 34 for fund financial statements. The following is a summary of the significant accounting principles and policies used in the preparation of the accompanying financial statements. A. Description of Funds and Account Groups The accounting records are organized for reporting purposes on the basis of governmental funds and a fiduciary fund. Governmental Funds General Fund—The General Fund,which is a governmental fund, is used to account for all revenues and expenditures applicable to the general operations of the Sheriff, which are not accounted for in another fund. All general operating revenues,which are not restricted or designated as to use by outside sources, are recorded in the General Fund. The governmental fund measurement focus is based upon determination of financial position and changes in financial position (sources, uses and balances of financial resources)rather than upon net income determination. Special Revenue Fund — The Special Revenue Fund accounts for the proceeds of specific revenue sources that are legally restricted or committed for public safety such as police education, special purpose equipment,jail commissary, and special law enforcement activities. Fiduciary Fund Agency Fund — The Agency Fund is used to account for assets held by the Sheriff as an agent. The Agency Fund is custodial in nature and does not involve measurement of results of operations. B. Basis of Accounting,Measurement Focus and Presentation The accounts of the governmental funds are maintained on the modified accrual basis. The fiduciary fund is reported on an accrual basis. Under the modified accrual basis, expenditures are recorded at the time liabilities are incurred. Revenues are recorded when received in cash or when they are considered both measurable and available. Revenues collected in excess of expenditures are not considered earned and are reflected as liabilities. 331 r County,Florida Indian Rive ty, Sheriff Notes To Financial Statements Year Ended September 30,2009 NOTE 1 -SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES-Continued C. Budgetary Requirements e the Sheriff to submit a proposed budget to the Board of County Commissioners by " State statutes require p p g tY May 1 of each year. The budget reflects the estimated amounts of all proposed expenditures for operating and equipping the Sheriff's office and jail. Capital improvements for these buildings are funded by the Board. The budget is prepared on a basis consistent with generally accepted accounting principles. After review and approval of the budget by the Board, the Sheriff is authorized to transfer budgeted amounts between objects and departments as long as he does not exceed the total appropriations approved by the Board. Increases in the total budget are subject to the review and approval of the Board. The budgeted revenues and expenditures in the accompanying financial statements reflect all amendments approved by the Board of County Commissioners. D. Compensated Absences rights to receive compensation for future absences when The Sheriff accrues a liability for employees' e p certain conditions are met. The Sheriff does not, nor is he legally required to, accumulate expendable available financial resources to liquidate this obligation. Accordingly, the liability for compensated absences is not reported on the Sheriff's financial statements. Additional information on the liability is reflected in subsequent Note 7. E. Transfer Out In accordance with Florida Statutes, all revenues in excess of expenditures as of year-end are owed to the Board of County Commissioners. These"excess fees"totaled $264,192 and are reported as a transfer to the Board of County Commissioners at year end. NOTE 2 -CASH Deposits At September 30, 2009, the carrying amount of the Sheriff's deposits was $4,041,775, and the bank balance was $5,697,311. All deposits with financial institutions were 100% insured by federal depository insurance or by collateral provided by qualified public depositories to the State Treasurer in accordance with Section 280.01, Florida Statutes, also known as the Florida Security for Public Deposits Act. The Sheriff's office elected not to adopt a formal investment policy and selects the alternative investment guidelines as provided by Florida Statutes subsection 17, 218.415. Refer to the County-wide Note 4, Cash and Cash Equivalents, for the definition of custodial credit risk. 332 Indian River County,Florida Sheriff Notes To Financial Statements Year Ended September 30, 2009 NOTE 3—CAPITAL ASSETS Tangible personal property used by the Sheriff in operations is reported in the financial statements of the County. State law requires the Sheriff to account for all tangible property used by the Sheriff. A summary of changes in capital assets is as follows: Beginning Ending Balance Balance 10/01/08 Additions Deletions 09/30/09 Tangible Personal Property $ 15,75.7,537 $ 995,.104 283 4 4 S 16.469.157 NOTE 4—PENSION PLAN Florida Retirement System Plan Description: The Sheriff s employees participate in the Florida Retirement System (FRS), a cost- sharing multiple-employer public employee retirement system, administered by the Florida Department of Management Services. The FRS is noncontributory for all members; all contributions are made by the employer. Employees elect participation in either the defined benefit plan (Pension Plan) or the defined contribution plan (Investment Plan). The Pension Plan provides for vesting of benefits after six years of credible service. Normal retirement benefits are available to employees who retire at or after age 62 with six or more years of service. For law enforcement and corrections officers, benefits are available at or after age 55 with six or more years of service. Early retirement is available after six years of service with a five percent reduction in benefits for each year prior to the normal retirement age. For those employees who elect participation in the Investment Plan rather than the Pension Plan, vesting occurs after one year of service and there is no "normal retirement age". These participants receive a defined contribution for self-direction in an investment product with a third party administrator selected by the State Board of Administration. Retirement benefits are based on age, average compensation, and years-of-service credit where average compensation is computed as the average of an individual's five highest years of earnings. For further information concerning the Florida Retirement System and contribution rates, please read the County- wide note on the Florida Retirement System. Contributions to the FRS for the fiscal year ended September 30, 2009, were equal to 17.27% of the annual covered payroll. Contributions to the FRS for the fiscal years ended September 30, 2007, 2008, 2009 were $4,158,848, $4,383,977, and $4,221,209 respectively. These amounts are equal to 100% of the required contribution for each year. 333 r Indian River County,Florida Sheriff Notes To Financial Statements Year Ended September 30, 2009 NOTE 5—OTHER POSTEMPLOYMENT BENEFITS The Sheriff participated in the Indian River County Other Post Employment Benefits Trust (IRCOT). The Sheriffs 2009 annual required contribution of $1,097,330 was funded by the Board of County Commissioners as part of a total contribution determined by the IRCOT actuary. Further information on the IRCOT can be found in the County-wide financial statements and in County Note 16. NOTE 6—RISK MANAGEMENT Indian River County maintains a risk management program that provides for coverage of risks of loss related to torts, theft of, damage to and destruction of assets, errors or omissions, injuries to employees, natural disasters, and medical and life insurance coverage for employees and their eligible dependents. Various excess catastrophe insurance policies with a commercial carrier are also in force for claims exceeding the amount chargeable against the Self-insurance Fund. The Sheriff participated in the County's self-insurance program during fiscal year 2009 at an annual cost of approximately $3,747,726. r NOTE 7—LONG-TERM LIABILITIES Changes in Long-Term Liabilities The following is a schedule of changes in long-term liabilities as of September 30, 2009: Beginning Ending Balance Balance 10/01/08 Additions Deletions 09/30/09 Accrued Compensated Absences2 554 21 $ 6.163.759450 4 5 26 34 Of the $5,267,344 liability for accrued compensated absences, management estimates that $1,400,000 will be due and payable within one year. The long-term liabilities are not reported in the financial statements of the Sheriff since they are not payable from available spendable resources. They are reported in the financial statements of the County. 334 Indian River County,Florida Sheriff Notes To Financial Statements Year Ended September 30, 2009 NOTE 8—OPERATING LEASES The Sheriff has entered into noncancelable operating leases as lessee. Lease expenditures totaled $102,404 for the year ended September 30, 2009. The following is a schedule by years of minimum future rentals to be paid by the Sheriff for noncancelable operating leases as of September 30: Year Amount 2010 $ 98,266 2011 66,029 2012 42,590 2013 17,680 2014 320 Total Future Minimum Lease Payments $ 224,885 NOTE 9—COMMITMENTS AND CONTINGENCIES Various suits and claims are currently pending against the Sheriff. It is impossible for the Sheriff to accurately quantify the exposure involved given the jury's latitude in assessing compensatory and punitive damages, and the court's latitude in awarding attorney's fees. The Sheriff intends to vigorously defend against these lawsuits and believes he has a good chance of prevailing on their merits. 335 Harris, Cotherman, Jones, Price &Associates Certified Public Accountants-Chartered 5070 North Highway AIA,Suite 250 Vero Beach,FL 32963 Tel 772.234-8484 Fax 772.234-8488 Report on Internal Control Over Financial Reporting and on Compliance and Other Matters Based on an Audit of Financial Statements Performed in Accordance with Government Auditing Standards The Honorable Deryl Loar Sheriff Indian River County,Florida We have audited the financial statements of Indian River County,Florida including the fund financial statements of the Sheriff, as of and for the year ended September 30,2009,and issued our report thereon dated March 12,2010. We conducted our audit in accordance with auditing standards generally accepted in the United States of America and the standards applicable to financial audits contained in Government Auditing Standards issued by the Comptroller General of the United States. Internal Control Over Financial Reporting In planning and performing our audit,we considered the Sheriff's internal control over financial reporting as a basis for designing our auditing procedures for the purpose of expressing our opinion on the financial statements,but not for the purpose of expressing an opinion on the effectiveness of the Sheriffs internal control over financial reporting. Accordingly, we do not express an opinion on the effectiveness of the Sheriffs internal control over financial reporting. A deficiency in internal control exists when the design or operation of a control does not allow management or employees, in the normal course of performing their assigned functions, to prevent, or detect and correct misstatements on a timely basis. A material weakness is a deficiency,or combination of deficiencies, in internal control,such that there is a reasonable possibility that a material misstatement of the financial statements will not be prevented or detected by the entity's internal control. Our consideration of internal control over financial reporting was for the limited purpose described in the first paragraph of this section and was not designed to identify all deficiencies in internal control that might be deficiencies,significant deficiencies or material weaknesses. We did not identify any deficiencies in internal control over financial reporting that we consider to be material weaknesses,as defined above. Compliance and Other Matters As part of obtaining reasonable assurance about whether the Sheriffs financial statements are free of material misstatement,we performed tests of its compliance with certain provisions of laws,regulations,contracts,and grant agreements, noncompliance with which could have a direct and material effect on the determination of financial statement amounts. However,providing an opinion on compliance with those provisions was not an objective of our audit and, accordingly, we do not express such an opinion. The results of our tests disclosed no instances of noncompliance that are required to be reported under Government Auditing Standards. "Providing Vision and Direction to our Clients" Member AICPA Member AICPA Division For CPA Firms Member FICPA Private Companies Practice Section 336 Harris' arris Cotherman, Jones, Price 6z Associates Certified Public Accountants-Chartered The Honorable Dery l Loar Sheriff Page two This report is intended solely for the information and use of management,the Sheriff, Indian River County,others within the entity,the Florida Auditor General and applicable federal and state agencies,and is not intended to be and should not be used by anyone other than these specified parties. 41 Vero Beach,Florida March 12,2010 337 Harris, Cotherman, Jones, Price Associates Certified Public Accountants•Chartered 5070 North Highway AlA,Suite 250 Vero Beach,FL 32963 Tel 772-234.8484 Fax 772-234-8488 Management Letter The Honorable Dery 1 Loar Sheriff Indian River County,Florida We have audited the financial statements of Indian River County, Florida, including the fund financial statements of the Sheriff, as of and for the year ended September 30, 2009, and have issued our report thereon dated March 12,2010. We conducted our audit in accordance with auditing standards generally accepted in the United States of America and the standards applicable to financial audits contained in Government Auditing Standards, issued by the Comptroller General of the United States. We have issued our Independent Auditors' Report on Internal Control over Financial Reporting and on Compliance and Other Matters based on an Audit of Financial Statements Performed in Accordance with Government Auditing Standards dated March 12,2010,which should be considered in conjunction with this management letter. Additionally, our audit was conducted in accordance with Chapter 10.550,Rules of the Auditor General, which govern the conduct of local governmental entity audits performed in the State of Florida.This letter includes the following information, which is not included in the aforementioned auditors' report or schedule: Section 10.554(1)(i)l.,Rules of the Auditor General, requires that we determine whether or not corrective actions have been taken to address significant findings and recommendations made in the preceding annual financial audit report. There were no recommendations made in the preceding audit report. Section 10.554(1)(i)2., Rules of the Auditor General, requires our audit to include a review of the provisions of Section 218.415,Florida Statutes, regarding the investment of public funds. In connection with our audit, we determined that the Sheriff, Indian River County, Florida, complied with Section 218.415,Florida Statutes. Section 10.554(lxi)3., Rules of the Auditor General, requires that we address in the management letter any recommendations to improve financial management. In connection with our audit, we did not have any such recommendations. Section 10.554(1)(i)4., Rules of the Auditor General, requires that we address violations of laws, regulations,contracts or grant agreements,or abuse that have occurred,or are likely to have occurred,that have an effect on the determination of financial statement amounts that is less than material but more than inconsequential. In connection with our audit,we did not have any such findings. "Pmvicling Vision and Dnectian m our Clients" Member AICPA Member AICPA Division For CPA Fvms Member FICPA s Private Companies Praedce Section 338 Harris Cotherman, Jones,Price &Associates Certified Public Accountants•Chartered The Honorable Deryl Loar Sheriff Page Two Section 10.554(l)(i)5.,Rules of the Auditor General, provides that the auditor may,based on professional judgment, report the following matters that have an inconsequential effect on financial statements, considering both quantitative and qualitative factors: (1)violations of contracts or grant agreements, or fraud, illegal acts, or abuse and, (2) control deficiencies that are not significant deficiencies. In connection with our audit,we did not have any such findings. Section 10.554(l)(i)6., Rules of the Auditor General, requires that the name or official title and legal ent unit of the reporting entity be disclosed in this authority for the primary government and each compon management letter,unless disclosed in the notes to the financial statements. This information is disclosed in the notes to the financial statements. Pursuant to Chapter 119,Florida Statutes,this management letter is a public record and its distribution is not limited. Auditing standards generally accepted in the United States of America require us to indicate that this letter is intended solely for the information and use of management, the Sheriff, Indian River County,the Florida Auditor General, and applicable federal and state agencies, and is not intended to be and should not be used by anyone other than these specified parties. J�(.lr/W� QAz�—l�CGj1�� Vero Beach,Florida March 12,2010 339 .. Y �� o ,:. � � aM . �� o :, . :: ., .�:: . . Q � SUPERVISOR OF ELECTIONS 341 Harris, Cotherman, Jones, Price &Associates Certified Public Accountants-Chartered 5070 North Highway AIA,Suite 250 Vero Beach,FL 32963 Tel 772-234.8484 Fax 772.234-8488 Independent Auditors'Report on Special Purpose Financial Statements Prepared in Compliance with a Regulatory Provision That Results in an Incomplete Presentation But One That is Otherwise in Conformity with Generally Accepted Accounting Principles The Honorable Kay Clem Supervisor of Elections Indian River County,Florida We have audited the accompanying fund financial statements of Indian River County,Florida Supervisor of Elections as of and for the year ended September 30, 2009 as listed in the table of contents. These financial statements are the responsibility of the Supervisor of Elections'management. Our responsibility is to express an opinion on the financial statements based on our audit. We conducted our audit in accordance with auditing standards generally accepted in the United States of America and the standards applicable to financial audits contained in Government Auditing Standards issued by the Comptroller General of the United States. Those standards require that we plan and perform the audit to obtain reasonable assurance about whether the fund financial statements are free of material misstatement. An audit includes examining, on a test basis, evidence supporting the amounts and disclosures in the presentation of the fund financial statements. An audit also includes assessing the accounting principles used and significant estimates made by management, as well as evaluating the overall presentation of the financial statements. We believe that our audit provides a reasonable basis for our opinion. As described in Note 1, the accompanying fund financial statements present the financial position of only the Supervisor of Elections at September 30,2009 and the results of its operations for the year then ended. These statements are not intended to be a complete presentation of the financial position of Indian River County. In our opinion, the accompanying fund financial statements present fairly, in all material respects, the financial position of the Supervisor of Elections as of September 30,2009 and the results of its operations for the year then ended in conformity with U.S.generally accepted accounting principles. In accordance with Government Auditing Standards, we have also issued a report dated March 12, 2010 on our consideration of the Supervisor of Elections' internal control over financial reporting and on our tests of compliance with certain provisions of laws,regulations,contracts,and grant agreements. This report is intended solely for the information and use of management, the Supervisor of Elections, Indian River County, the Florida Auditor General, and applicable federal and state agencies, and is not intended to be eet-and should not be used by anyone other than these specified parties. �07icP�YiideCi� ? 4 0,44 - Vero B ach,Florida March 12,2010 'Providing Vidor and Daection to oar Clients" Member AICPA Member AICPA Division For CPA Firms Member FICPA Private Companies Practice Section 342 Indian River County,Florida Supervisor of Elections Balance Sheet Governmental Funds September 30,2009 Total Special Governmental General Revenue Funds ASSETS Cash and cash equivalents $ 25,224 $ 60,614 $ 85,838 Due from other governments 18,179 - 18,179 Prepaid expenses 3,962 - 3,962 Total assets $ 47,365 $ 60,614 $ 107,979 LIABILITIES AND FUND BALANCES Liabilities: Accounts payable $ 45,681 $ - $ 45,681 Due to other governments 1,684 - 1,684 Unearned revenue - 53,642 53,642 Total liabilities 47,365 53,642 101,007 Fund Balances: Fund balance - 6,972 6,972 Total fund balances - 6,972 6,972 Total liabilities and fund balances $ 47,365 $ 60,614 $ 107,979 The accompanying notes are an integral part of the financial statements. 343 Indian River County, Florida Supervisor of Elections Statement of Revenues,Expenditures,and Changes in Fund Balance Governmental Funds For the Year Ended September 30,2009 Total Special Governmental General Revenue Funds REVENUES a Intergovernmental $ - $ 44,465 $ 44,465 Charges for services 574 - 574 Interest 376 146 522 Miscellaneous 13,461 - 13,461 Total revenues 14,411 44,611 59,022 EXPENDITURES General government 1,217,381 48,454 1,265,835 Total expenditures 1,217,381 48,454 1,265,835 Excess of revenues over (under)expenditures (1,202,970) (3,843) (1,206,813) OTHER FINANCING SOURCES(USES) Transfers from Board of County Commissioners 1,208,221 - 1,208,221 Transfer from other funds - 3,567 3,567 Transfers to Board of County Commissioners (1,684) - (1,684) Transfer to other funds (3,567) - (3,567) Total other financing sources(uses) 1,202,970 3,567 1,206,537 Net change in fund balances (276) (276 ) Fund balances at beginning of year - 7,248 7,248 Fund balances at end of year $ - $ 6,972 $ 6,972 r The accompanying notes are an integral part of the financial statements. 344 River County,Florida Indian R'� ty, Supervisor of Elections Statement of Revenues,Expenditures,and Changes in Fund Balances-Budget and Actual General Fund For the Year Ended September 30,2009 Variance with Final Budget Budgeted Amount Positive Original Final Actual (Negative) REVENUES Charges for services $ - $ - $ 574 $ 574 376 376 Interest - - Miscellaneous - 13,461 13,461 Total revenues - 13,461 14,411 950 EXPENDITURES General government 1,143,001 1,203,503 1,217,381 (13,878) Total expenditures 1,143,001 1,203,503 1,217,381 (13,878) Excess of revenues over (under)expenditures (1,143,001) (1,190,042) (1,202,970) (12,928) OTHER FINANCING SOURCES(USES) Transfers from Board of County Commissioners 1,143,001 1,190,042 1,208,221 18,179 Transfers to Board of County Commissioners - - (1,684) (1,684) Transfers to other funds - - (3,567) (3,567) Total other financing sources(uses) 1,143,001 1,190,042 1,202,970 12,928 Net change in fund balances $ - $ - $ Fund balances at beginning of year - Fund balances at end of year $ The accompanying notes are an integral part of the financial statements. 345 "„�'"'� Y �� O -. � . �:�- � 1 M • ••' i� 't'� •1. Indian River County, Florida Supervisor of Elections Notes To Financial Statements Year Ended September 30, 2009 NOTE 1 - SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES The Supervisor of Elections is a County agency and a local governmental entity pursuant to Article VIII, Section 1(d) of the Constitution of the State of Florida. For financial statement and reporting purposes, the Supervisor of Elections does not meet the definition of a legally separate organization and is not considered to be a component unit. The Supervisor of Elections 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 Supervisor of Elections only. The format of the Supervisor of Elections' statements has been prepared in accordance with the presentation requirements of GASB 34 for fund financial statements. The following is a summary of the significant accounting principles and policies used in the preparation of the accompanying financial statements. A. Description of Fund The accounting records are organized for reporting purposes on the basis of governmental funds. Governmental Funds General Fund—The General Fund,which is a governmental fund, is used to account for all revenues and expenditures applicable to the general operations of the Supervisor of Elections. All general operating revenues, which are not restricted or designated as to use by outside sources, are recorded in the General Fund. The governmental fund measurement focus is based upon determination of financial position and changes in financial position (sources, uses and balances of financial resources) rather than upon net income determination. Special Revenue Fund— The Special Revenue Fund accounts for the grant proceeds from the State and matching funds from the County. These funds are legally restricted for voter education and poll worker recruitment and training. B. Basis of Accounting,Measurement Focus and Presentation The accounts of the governmental funds are maintained on the modified accrual basis. Under the modified accrual basis, expenditures are recorded at the time liabilities are incurred. Revenues are recorded when received in cash or when they are considered both measurable and available. Revenues collected in excess of expenditures are not considered earned and are reflected as liabilities. 347 Indian River County,Florida Supervisor of Elections Notes To Financial Statements Year Ended September 30, 2009 NOTE 1 -SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES - Continued C. Budgetary Requirements State statutes require the Supervisor of Elections (Supervisor) to submit a proposed budget to the Board of County Commissioners by May 1 of each year. After review and approval of the budget by the Board, the Supervisor or Elections is authorized to transfer budgeted amounts between objects and departments as long as she does not exceed the total appropriations approved by the Board. Increases in the total budget are subject to the review and approval of the Board. The budgeted revenues and expenditures in the accompanying financial statements reflect all amendments approved by the Board of County Commissioners. The budget is prepared on a basis consistent with generally accepted accounting principles. After completing the audit for September 30, 2009, it was determined the Supervisor did exceed their budget authority by $18,179. The Supervisor will be requesting these funds in the next fiscal year. D. Prepaid Expenses Deposits in the governmental funds represent prepayments for services that will be used in future periods. The Supervisor of Election's policy is to record the expenditure for the services when they are used rather than when the cash is disbursed. E. Capital Assets Acquisitions of equipment are recorded as expenditures at the time of purchase for governmental fund financial statements. Tangible personal property used by the Supervisor of Elections in operations is reported in the financial statements of the County. Refer to the County-wide note on capital assets for the capitalization threshold, depreciation methodology and useful lives. F. Compensated Absences The Supervisor of Elections accrues a liability for employees' rights to receive compensation for future absences when certain conditions are met. The Supervisor of Elections does not, nor is she legally required to, accumulate expendable available financial resources to liquidate this obligation. Accordingly, the liability for compensated absences is not reported on the Supervisor of Elections' financial statements. Additional information on the liability is reflected in subsequent Note 6. G. Transfer Out In accordance with Florida Statutes, all revenues in excess of expenditures as of year-end are owed to the Board of County Commissioners before November 1. On October 31, 2009, the Supervisor of Elections presented a financial statement reflecting $1,684 in"excess fees". 348 µ Indian River County,Florida Supervisor of Elections Notes To Financial Statements Year Ended September 30, 2009 NOTE 2 - CASH Deposits At September 30, 2009, the carrying amount of the Supervisor of Elections' deposits was $85,713, and the bank balance was $123,908. All deposits with financial institutions were 100% insured by federal depository insurance or by collateral provided by qualified public depositories to the State Treasurer in accordance with Section 280.01, Florida Statutes, also known as the Florida Security for Public Deposits Act. The Supervisor of Elections has adopted the Board of County Commissioners' investment policy. This policy requires the Supervisor of Elections' office to follow the above state law (governing custodial credit risk) for cash deposits. Refer to the County-wide Note 4, Cash and Cash Equivalents, for definition of custodial credit risk. NOTE 3—PENSION PLAN Florida Retirement System Plan Description: The Supervisor of Elections' employees participate in the Florida Retirement System (FRS), a cost-sharing multiple-employer public employee retirement system, administered by the Florida Department of Management Services. The FRS is noncontributory for all members; the employer makes all contributions. Employees elect participation in either the defined benefit plan (Pension Plan) or the defined contribution plan (Investment Plan). The FRS provides for vesting of benefits after six years of creditable service. Normal retirement benefits are available to employees who retire at or after age 62 with six or more years of service. Early retirement is available after six years of service with a five percent reduction in benefits for each year prior to the normal retirement age. For those employees who elect participation in the Investment Plan rather than the Pension Plan, vesting occurs after one year of service and there is no "normal retirement age". These participants receive a defined contribution for self-direction in an investment product with a third party administrator selected by the State Board of Administration. Retirement benefits are based on age, average compensation, and years-of-service credit where average compensation is computed as the average of an individual's five highest years of earnings. For further information concerning the Florida Retirement System and contribution rates, please read the County- wide note on the Florida Retirement System. Contributions to the FRS for the fiscal year ended September 30, 2009, were equal to 10.5% of the annual covered payroll. Contributions to the FRS for the fiscal years ended September 30, 2007, 2008, 2009 were $53,969, $58,121 and $57,066 respectively. These amounts are equal to 100% of the required contribution for each year. 349 Indian River County, Florida Supervisor of Elections Notes To Financial Statements Year Ended September 30, 2009 NOTE 4—OTHER POSTEMPLOYMENT BENEFITS The Supervisor of Elections participated in the Indian River County Other Post Employment Benefit Trust (IRCOT). The Supervisor of Election's 2009 annual required contribution of$12,758 was funded by the Board of County Commissioners as part of a total contribution determined by the IRCOT actuary. Further information on the IRCOT can be found in the County-wide financial statements and in County Note 16. NOTE 5—RISK MANAGEMENT Indian River County maintains a risk management program that provides for coverage of risks of loss related to torts, theft of, damage to and destruction of assets, errors or omissions, injuries to employees, natural disasters, and medical and life insurance coverage for employees and their eligible dependents. Various excess catastrophe insurance policies with a commercial carrier are also in force for claims exceeding the amount chargeable against the Self-insurance Fund. The Supervisor of Elections participated in the County's self-insurance program during fiscal year 2009 at an annual cost of approximately$74,068. NOTE 6—LONG-TERM LIABILITIES Changes in Long-Term Liabilities The following is a schedule of changes in long-term liabilities as of September 30, 2009: Beginning Ending Balance Balance 10/01/08 Additions Deletions 09/30/09 Accrued Compensated Absences 48 175 6 2 5 35 7 4 1 Of the $48,751 liability for accrued compensated absences, management estimates that $20,000 will be due and payable within one year. The liability for accrued compensated absences is not reported in the financial statements of the Supervisor of Elections since it is not payable from available spendable resources. The liability is reported in the financial statements of the County. 350 Indian River County, Florida Supervisor of Elections Notes To Financial Statements Year Ended September 30, 2009 NOTE 7—OPERATING LEASES The Supervisor of Elections has entered into noncancelable operating leases as lessee for a mail machine and for two ballot on demand machines. Lease expenditures totaled $24,282 for the year ended September 30, 2009. The following is a schedule by years of minimum future rentals to be paid by the Supervisor of Elections for the noncancelable operating lease as of September 30: Year Amount 2010 $ 22,005 2011 22,005 2012 4,505 2013 3,379 Total Future Minimum Lease Payments $ 351 Harris, Cotherman, Jones, Price &Associates Certified Public Accountants•Chartered 5070 North Highway AlA,Suite 250 Vero Beach,FL 32963 Tel 772-234-8484 Fax 772-234.8488 Report on Internal Control Over Financial Reporting and on Compliance and Other Matters Based on an Audit of Financial Statements Performed in Accordance with Government Auditing Standards a The Honorable Kay Clem Supervisor of Elections Indian River County,Florida We have audited the financial statements of Indian River County,Florida,including the fund financial statements of the Supervisor of Elections (the "Supervisor"), as of and for the year ended September 30, 2009 and issued our report thereon dated March 12, 2010. We conducted our audit in accordance with auditing standards generally accepted in the United States of America and the standards applicable to financial audits contained in Government Auditing Standards issued by the Comptroller General of the United States. Internal Control Over Financial Reporting In planning and performing our audit,we considered the Supervisor's internal control over financial reporting as a basis for designing our auditing procedures for the purpose of expressing our opinion on the financial statements, but not for the purpose of expressing an opinion on the effectiveness of the Supervisor's internal control over financial reporting. Accordingly, we do not express an opinion on the effectiveness of the Supervisor's internal control over financial reporting. A control deficiency exists when the design or operation of a control does not allow management or employees,in the normal course of performing their assigned functions,to prevent or detect misstatements on a timely basis. A significant deficiency is a control deficiency, or combination of control deficiencies, that adversely affects the entity's ability to initiate, authorize,record, process, or report financial data reliably in accordance with generally accepted accounting principles such that there is more than a remote likelihood that a misstatement of the entity's financial statements that is more than inconsequential will not be prevented or detected by the entity's internal control. Our consideration of internal control over financial reporting was for the limited purpose described in the preceding paragraph and was not designed to identify all deficiencies in internal control over reporting that might be significant deficiencies or material weaknesses and therefore, there can be no assurance that all deficiencies, significant deficiencies, or material weaknesses have been identified. However,as described in the accompanying Schedule of Supervisor of Elections'Findings and Responses, we identified certain deficiencies in internal control over financial reporting that we consider to be material weaknesses. "Providing Vision and Dirixtion to our Com" Member AICPA Member AICPA Division For CPA Firms Member FICPA Private Companies Practice Section 352 Harris, Cotherman, Jones, Price &Associates Certified Pubic Accountants•Chartered The Honorable Kay Clem Supervisor of Elections Page two A deficiency in internal control exists when the design or operation of a control does not allow management or employees, in the normal course of performing their assigned functions, to prevent, or detect and correct misstatements on a timely basis. A material weakness is a deficiency,or combination of deficiencies, in internal control,such that there is a reasonable possibility that a material misstatement of the financial statements will not be prevented or detected and corrected on a timely basis. We consider the deficiencies described as 2009-01,2009-02 and 2009-03 in the accompanying Schedule of Supervisor of Elections' Findings and Responses to be material weaknesses. Compliance and Other Matters As part of obtaining reasonable assurance about whether the Supervisor's financial statements are free of material misstatement,we performed tests of its compliance with certain provisions of laws,regulations,contracts,and grant agreements, noncompliance with which could have a direct and material effect on the determination of financial statement amounts. However,providing an opinion on compliance with those provisions was not an objective of our audit and, accordingly, we do not express such an opinion. The results of our tests disclosed one instance of noncompliance or other matters that is required to be reported under Government Auditing Standards and which is described as 2009-03 in the accompanying Schedule of Supervisor of Elections'Findings and Responses. The Supervisor's responses to the findings identified in our audit follow the accompanying Schedule of Supervisor of Elections'Findings and Responses. We did not audit the Supervisor's responses and,accordingly,we express no opinion on them. This report is intended solely for the information and use of management,the Supervisor of Elections,Indian River County,others within the entity,the Florida Auditor General,and applicable federal and state agencies,and is not intended to be and should not be used by anyone other than these specified parties. Vero Beach,Florida March 12,2010 353 r SCHEDULE OF SUPERVISOR OF ELECTIONS'FINDINGS AND RESPONSES FINDING 2009-01 Criteria: Good internal control requires the timely reconciliation and review of financial activities to prevent material misstatement in the financial statements. Condition: Bank and general ledger account reconciliations were not being performed in a timely manner for the Supervisor's accounts. Management's reviews of these reconciliations were not being performed in a timely manner. The nonoperation of these critical internal controls was pervasive throughout the Supervisor's financial system. We consider this condition to be a material weakness. Cause: Employees assigned the responsibility to perform the reconciliations were reconciling bank accounts only every four to six months. General ledger account reconciliations were not being performed. Management failed to oversee and review reconciliations in a timely manner. Effect: Errors made by the Supervisor's bank allowed funds to be inappropriately withdrawn from the officer accounts and be deposited into the Supervisor's personal account. Failure to perform timely bank reconciliations and review of the bank reconciliations allowed these errors to happen and not be detected and corrected for several months. Recommendation: We recommend that all bank and general ledger account reconciliations be performed monthly and that the Supervisor review and approve these reconciliations as soon as they are prepared. Supervisor's Response: See attached Supervisor's response. FINDING 2009-02 Criteria: Generally accepted accounting principles dictate that an entity adopt and follow significant accounting policies,including revenue recognition. Condition: As advance payments under grant agreements were received,the Supervisor recorded these receipts as revenue when they should have been recorded as deferred revenue and recognized as revenue as the funds were expended. The nonoperation of this accounting policy resulted in deferred revenue being understated and revenue being overstated in the Supervisor's financial system. We consider this condition to be a material weakness. Cause: Employees assigned the responsibility to account for receipts of grant monies did not have the knowledge and/or experience to record properly. Management failed to note the error during its review of the financial statements. Effect: Incorrect recording of grant funds received resulted in the Supervisor's overstating revenues in its financial reports to the Board of County Commissioners. 354 it i L SCHEDULE OF SUPERVISOR OF ELECTIONS'FINDINGS AND RESPONSES-Continued L FINDING 2009-02-Continued Recommendation: We recommend the Supervisor staff its accounting function with individuals who have the requisite knowledge or experience to maintain the Supervisor's books in accordance with generally accepted accounting principles. We also recommend that management be focused on proper revenue recognition in its review of the financial statements. Supervisor's Response: See attached Supervisor's response. FINDING 2009-03 Criteria: Florida Statute 129.202(d)requires the Supervisor of Elections to".. .charge all paid bills and payrolls to the proper budget accounts." In addition, Florida Statute 129.202(e) requires that"All expenses incurred for the fiscal year for which the budget is made shall be vouchered and charged to the budget for that year." Condition: The Supervisor approved expenditures that exceeded the approved budget. The nonoperation of this critical internal control was pervasive throughout the Supervisor's financial system. We consider this condition to be a material weakness. Cause: The Supervisor did not review expenditures against the approved budget. Effect: Failure to properly review expenditures against the approved budget has resulted in the Supervisor approving expenditures that exceeded the budget,resulting in the Supervisor not complying with Florida Statutes. Recommendation: We recommend that the Supervisor perform monthly reviews of its financial activities against the approved budget. We also recommend that the Supervisor refer to the approved budget when approving expenditures. Supervisor's Response: See attached Supervisor's response. 355 Kay Clem Supervisor of Elections Indian River County, Florida March 12, 2010 Mr. Robert Hams Harris, Cotherman, Jones, Price and Associates 5070 North Al A, Suite 250 Vero Beach, FI 32963 Dear Mr. Hams, Please find below our responses to the internal control findings resulting from the audit of the general- purpose financial statements of Indian River County for the fiscal year ended September 30, 2009. Finding 2009-01 Bank Reconciliations We will make certain all accounts will be monitored daily by the accounting manager. Monthly bank reconciliations will be done on all of our bank accounts on a monthly basis. Statement cash balances will be reconciled to Quickbooks ledger to verify incoming and outgoing transactions. I will receive all unopened bank statements at the beginning of the month, prior to being reconciled to monitor account activity. Once I examine all account statements, they will be handed over to my accounting manager for reconciliation. The bank statements and reconciliation reports will be completed immediately and then delivered back to me for final review and approval. By taking these necessary internal measures all bank accounts will be closely monitored to ensure security on accounts. Federal accounts (both savings and money market)will continue to be monitored on a monthly and quarterly basis. We receive quarterly statements on our County Match Grant Funds. There should be no activity in the accounts other than one time withdrawals for approved purposes, i.e. sample ballots, poll worker training, etc.We fell behind during the busy primary and presidential elections as I pulled my previous accounting manager to help with other staffing needs due to budget cuts and a reduced workforce in our office. 356 Page Two Mr. Robert Harris March 12, 2010 Furthermore, our business accounts have been moved to a different banking institution different than where my personal funds are kept. Findinq 2009-02 Grant Recording We are now going to seek the services of an independent CPA with expertise in the government accounting field to provide an overview of our books quarterly to make sure this error or any other error does not occur again. Finding 2009-03 Budget Management We will continue to monitor the expenditures as they relate to our approved budget with an eye guided toward ascertaining that the revenues and expenditures are reported in the proper accounts. Most sincerely, Kay Cl Supervisor of Elections 357 Harris, Cotherman, Jones, Price & Associates Certified Public Accountants,Chartered 5070 North Highway AIA,Suite 250 Vero Beach,FL 32963 Tel 772.234.8484 Fax 772.234-8488 Management Letter The Honorable Kay Clem Supervisor of Elections Indian River County,Florida We have audited the financial statements of Indian River County, Florida, including the fund financial statements of the Supervisor of Elections, as of and for the year ended September 30, 2009 and have issued our report thereon dated March 12,2010. We conducted our audit in accordance with auditing standards generally accepted in the United States of America and the standards applicable to financial audits contained in Government Auditing Standards, issued by the Comptroller General of the United States. We have issued our Independent Auditors' Report on Internal Control over Financial Reporting and on Compliance and Other Matters based on an Audit of Financial Statements Performed in Accordance with Government Auditing Standards dated March 12,2010,which should be considered in conjunction with this management letter. Additionally, our audit was conducted in accordance with Chapter 10.550,Rules of the Auditor General, which govern the conduct of local governmental entity audits performed in the state of Florida.This letter includes the following information which is not included in the aforementioned auditors' report or schedule: Section 10.554(l)(i)1.,Rules of the Auditor General, requires that we determine whether or not corrective actions have been taken to address significant findings and recommendations made in the preceding annual financial audit report. There were no recommendations made in the preceding audit report. Section 10.554(1)(i)2., Rules of the Auditor General, requires our audit to include a review of the provisions of Section 218.415, Florida Statutes, regarding the investment of public funds. In connection with our audit, we determined that the Supervisor of Elections, Indian River County,Florida, complied with Section 218.415,Florida Statutes. Section 10.554(l)(i)3., Rules of the Auditor General, requires that we address in the management letter any recommendations to improve financial management. In connection with our audit, we did not have any such recommendations. Section 10.554(1)(i)4., Rules of the Auditor General, requires that we address violations of laws, regulations,and contracts or grant agreements,or abuse that have occurred,or are likely to have occurred, that have an effect on the determination of financial statement amounts that is less than material,but more than inconsequential. In connection with our audit,we did not have any such findings. 'Providing Yisian and Dhecdm to our Chen&' Member AICPA Member AICPA Division For CPA Firms Member FICPA Private Companies Practice Section 358 Harris, Cotherman, Jones, Price &Associates Certified Public Accountants-Chartered The Honorable Kay Clem Supervisor of Elections Page two Section 10.554(1 xi)5.,Rules of the Auditor General, provides that the auditor may,based on professional judgment, report the following matters that have an inconsequential effect on financial statements, considering both quantitative and qualitative factors: (1) violations of contracts or grant agreements, or fraud, illegal acts, or abuse and, (2) control deficiencies that are not significant deficiencies. In connection with our audit,we did not have any such findings. Section 10.554(1)(i)6., Rules of the Auditor General, requires that the name or official title and legal authority for the primary government and each component unit of the reporting entity be disclosed in this management letter,unless disclosed in the notes to the financial statements. This information is disclosed in the notes to the financial statements. Pursuant to Chapter 119,Florida Statutes,this management letter is a public record and its distribution is not limited. Auditing standards generally accepted in the United States of America require us to indicate that this letter is intended solely for the information and use of management,the Supervisor of Elections, Indian River County, the Florida Auditor General, and applicable federal and state agencies, and is not intended to be and should not be used by anyone other than these specified parties. me �Atvmvcll oj� Qze�,A Vero Beach,Florida March 12,2010 359 �Y �E O -. � . ,:. � 0 M . . �� o . . ., .,:: ,:. .,_, Q '�' U W 0 aM O u -MIa N .W a Harris, Cotherman, Jones, Price &Associates Certified Public Accountants-Chartered 5070 North Highway AIA,Suite 250 Vero Beach,FL 32963 Tel 772.234.8484 Fax 772.234.8488 Independent Auditors'Report on Special Purpose Financial Statements Prepared in Compliance with a Regulatory Provision That Results in an Incomplete Presentation But One That is Otherwise in Conformity with Generally Accepted Accounting Principles The Honorable Carole Jean Jordan Tax Collector Indian River County,Florida We have audited the accompanying fund financial statements of Indian River County, Florida Tax Collector as of and for the year ended September 30, 2009 as listed in the table of contents. These financial statements are the responsibilityof based on our audits management. Our responsibility is to express an opinion on the financial statements We conducted our audit in accordance with auditing standards generally accepted in the United States of America and the standards applicable to financial audits contained in Government Auditing Standards the United States. Those standards require that we plan and perform issued by the Comptroller General of the audit to obtain reasonable assurance about whether the fund financial statements are free of material misstatement. An audit includes examining, on a test basis, evidence supporting the amounts and disclosures in the presentation of the fund financial statements. An audit also includes assessing the accounting principles used and significant estimates made by management, as well as evaluating the overall presentation of the financial statements. We believe that our audit provides a reasonable basis for our opinion. As described in Note 1,the accompanying fund financial statements present the financial position of only the Tax Collector at September 30,2009 and the results of its operations for the year then ended. These statements are not intended to be a complete presentation of the financial position of Indian River County. In our opinion, the accompanying fund financial statements present fairly, in all material respects, the financial position of the Tax Collector as of September 30, 2009 and the results of its operations for the year then ended in conformity with U.S.generally accepted accounting principles. In accordance with Government Auditing Standards, we have also issued a report dateMarch 12,d on our tests 0 on our consideration of the Tax Collector's internal control over financial reporting compliance with certain provisions of laws,regulations,contracts,and grant agreements. This report is intended solely for the information and use of management,the Tax Collector,Indian River County,the Florida Auditor General, and applicable federal and state agencies, and is not intended to be and should not be used by anyone other than these specified parties. ??-Aa ai�� j *eroeac�zh6jlorida March 12,2010 "providing Vision and Dh ection to our , Member FICPA Member AICPA Member AICPA Division For CPA Firms Private Companies Practice Section 362 Indian River County,Florida Tag Collector Balance Sheet General Fund September 30,2009 ii ASSETS Cash and cash equivalents $ 4,057,315 Investments 3,064 Accounts receivable 35,127 Inventories 112 Total assets $ 4,095,618 LIABILITIES AND FUND BALANCES Liabilities: Accounts payable $ 624,889 Due to other governments 3,423,461 Deferred revenues 46,296 Other deposits held in escrow 972 Total liabilities 4,095,618 Fund Balances: Fund balance - Total fund balances - Total liabilities and fund balances $ 4,095,618 The accompanying notes are an integral part of the financial statements. 363 Indian River County,Florida Tax Collector Statement of Revenues,Expenditures,and Changes in Fund Balances-Budget and Actual General Fund For the Year Ended September 30,2009 Variance with Final Budget Budgeted Amount Positive Final Actual (Negative) Original - REVENUES223,348 Charges for services $ 6,368,878 $ 6,368,878 $ 6,592,226 $ 95,000 95,000 30,696 (64,304) Interest 6,463,878 6,622,922 159,044 Total revenues 6,463,878 EXPENDITURES28,842 3,228,303 3,228,303 3,199,461 General government 3,228,303 3,228,303 3,199,461 28,842 Total expenditures Excess of revenues over 3,235,575 3,235,575 3,423,461 187,886 (under)expenditures OTHER FINANCING SOURCES(USES) Excess fees to Board (3,006,682) (127,020) of County Commissioners (2,879,662) (2,879,662) Excess fees to Other 416,779) (60,866) Governments (355,913) (355,913) ( 187,886) Total other financing sources(uses) (3,235,575) (3,235,575) (3,423,461) $ _ $ _ - $ - Net change in fund balances Fund balances at beginning of year Fund balances at end of year The accompanying notes are an integral part of the financial statements. 364 Indian River County, Florida Tax Collector Statement of Fiduciary Net Assets Agency Fund September 30, 2009 ASSETS Cash and cash equivalents $ 4,985,504 Investments 91,559 Total assets $ 5,077,063 LIABILITIES Due to other governments $ 5,077,063 Total liabilities $ 5,077,063 The accompanying notes are an integral part of the financial statements. 365 Y ti M Q � Indian River County,Florida Tax Collector Notes To Financial Statements Year Ended September 30,2009 NOTE 1 -SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES The Tax Collector is a County agency and a local governmental entity pursuant to Article VIII, Section 1(d) of the Constitution of the State of Florida. For financial statement and reporting purposes, the Tax Collector does not meet the definition of a legally separate organization and is not considered to be a component unit. The Tax Collector 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 Tax Collector only. The format of the Tax Collector's statements has been prepared in accordance with the presentation requirements of GASB 34 for fund financial statements. The following is a summary of the significant accounting principles and policies used in the preparation of the accompanying financial statements. A. Description of Funds The accounting records are organized for reporting purposes on the basis of governmental funds and a fiduciary fund. Governmental Fund General Fund—The General Fund,which is a governmental fund, is used to account for all revenues and expenditures applicable to the general operations of the Tax Collector. All general operating revenues, which are not restricted or designated as to use by outside sources, are recorded in the General Fund. The governmental fund measurement focus is based upon determination of financial position and changes in financial position (sources, uses and balances of financial resources) rather than upon net income determination. Fiduciary Fund Fiduciary Fund—The Fiduciary Fund of the Tax Collector is the Agency Fund, which is used to account for assets held by the Tax Collector as an agent. The Agency Fund is custodial in nature and does not involve measurement of results of operations. These funds cannot be used to support the Tax Collector's own programs. B. Basis of Accounting,Measurement Focus and Presentation The accounts of the governmental funds are maintained on the modified accrual basis. The fiduciary fund is reported on an accrual basis. Under the modified accrual basis, expenditures are recorded at the time liabilities are incurred. Revenues are recorded when received in cash or when they are considered both measurable and available. Revenues collected in excess of expenditures are not considered earned and are reflected as liabilities. 367 Indian River County,Florida Tax Collector Notes To Financial Statements Year Ended September 30,2009 NOTE 1 - SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES- Continued C. Budgetary Requirements learly reflects the ues State statutes require the Tax Collector to prepare anus o be ex pendedet that c The budgeted revenuesand available to his office and the functions for which money f Revenue. Management is expenditures are subject to the review and approval of the Departments e dents as long as management does authorized to transfer budgeted amounts between objects and p nly required when not exceed the total appropriations of a fund. Department of tRoehe e appropriated,proval is thereby increasing unanticipated revenues are received that management wishes the total appropriations of a fund. The budget is prepared on a basis consistent with generally accepted accounting principles. D. Cash and Cash Equivalents Cash and cash equivalents include deposits and all highly liquid investments with maturities of ninety days or less when purchased. E. Prepaid Expenses This account represents prepayments for services that will be used in futureperiods. The Tax Collectorthe cash is policy is to record the expenditure for the services when they are used rather disbursed. F. Capital Assets Acquisitions of equipment are recorded as expenditures at the time of purchase for gamntal fund iin financial statements. Tangible personal property used by the Tax Collector m operationsreported the financial statements of the County. Refer to the County-wide note on capital assets for capitalization threshold, depreciation methodology and useful lives. G. Compensated Absences The Tax Collector accrues a liability for employees' rights to receive compensation for future absences when certain conditions are met. The Tax Collector does not, nor is he legally required to, accumulate expendable available financial resources to liquidate this obligation. Accordingly, the liability nal for compensated absences is not reported on the Tax Collector's financial statements. Additiinformation on the liability is reflected in subsequent Note 7. H. Transfer Out In accordance with Florida Statutes, all revenues in excess of expenditures as of year-end are owed to the Board of County Commissioners and other governments. These "excess fees" are reportedas transfers out and a liability and were $3,423461 at year-end. 368 Indian River County,Florida Tax Collector Notes To Financial Statements Year Ended September 30, 2009 NOTE 2 -CASH AND CASH EQUIVALENTS A. Deposits At September 30, 2009, the carrying amount of the Tax Collector's deposits was $8,957,076 and the bank balance was $8,947,471. All deposits with financial institutions were 100% insured by federal depository insurance or by collateral provided by qualified public depositories to the State Treasurer in accordance with Section 280.01, Florida Statutes, also known as the Florida Security for Public Deposits Act. The Tax Collector modified their investment and deposit policy in February of 2005. This policy requires the Tax Collector's office to follow the above state law (governing custodial credit risk) for deposits. Refer to the County-wide Note 4, Cash and Cash Equivalents, for definition of custodial credit risk. B. Investments Florida Statutes authorize investments in certificates of deposit, savings accounts,the Local Government Surplus Funds Trust Fund administered by the Florida State Board of Administration, Securities and Exchange Commission registered money market funds with the highest credit quality rating from a nationally recognized rating agency, and direct obligations of the U.S. Treasury. The Tax Collector's investment policy limits portfolio composition to no more than 25% in direct obligations of the U.S. government, money market and certificates of deposit, and money market funds. No more than 95% shall remain in the Local Government Surplus Funds Trust Fund or Bank NOW accounts.No more than 50%is allowable in bank repo agreements. The Tax Collector invests surplus funds in an external investment pool, the Local Government Surplus Funds Trust Fund (the "State Pool"). The State Pool is administered by the Florida State Board of Administration("SEA"), who provides regulatory oversight. During fiscal year 2008, the SBA reported that the State Pool was exposed to potential risks due to indirect exposure in the sub-prime mortgage financial market. Consequently, the SBA placed some restrictions on how participants could access portions of their surplus funds and ultimately restructured the State Pool into two separate pools ("LGIP" and"Fund B"). The LGIP has adopted operating procedures consistent with the requirements for a 2a-7 like fund. The Tax Collector's investment in the LGIP is reported at amortized cost. The fair value of the position in the pool is equal to the value of the pool shares. At September 30, 2009, the LGIP held a rating of AAAm by Standard and Poor's and had a weighted average days to maturity of 33 days. The investment objective for Fund B is to maximize the present value of distributions to participants, to the extent reasonable and prudent, net of fees; thus weight is given not only to the realized value of security sales, but also to the speed with which monies are distributed (liquidity). As cash becomes available in Fund B, it is distributed among participant accounts in the LGIP, according to each participant's pro rata share of Fund B. All distributions from Fund B are 100% available liquid balance (ALB)upon transfer. 369 Indian River County,Florida Tax Collector Notes To Financial Statements Year Ended September 30, 2009 NOTE 2 -CASH AND CASH EQUIVALENTS - Continued B. Investments - Continued Fund B is reported at fair value, determined by the fair value per share of the Pool's underlying portfolio. Fund B was unrated as of September 30, 2009. At year-end,the Tax Collector's investment in the State Pools consisted of. LGIP $ 77,771 Fund B 91,559 Total $ 169.330 All funds held in Fund B are "on-behalf-of' (OBF) accounts. These OBF accounts were established on December 26, 2007 and held for the eleven taxing districts that did not have SBA accounts at the time of the restructuring of SBA funds into the LGIP and Fund B. At September 30, 2009, the State Board of Administration (SBA) determined a negative fair market value adjustment of 45.08% of the portfolio balance, or ($75,169), was needed to represent the fair market value of the participation. Consequently, the net investment in Fund B is reported at$91,559. The Tax Collector participated in a capital lease program in which funds are deposited into an escrow account and drawn upon as equipment is purchased. At September 30, 2009, $3,064 of unspent capital lease proceeds remained in the escrow account. NOTE 3 -INVENTORIES Inventories are valued at cost, which approximates market, using the "first-in, first-out" method of accounting. The costs of general fund inventory are recorded as an expenditure when consumed rather than when purchased. Inventory of the Tax Collector, included in the general fund, represents postage. NOTE 4—PENSION PLAN Florida Retirement System Plan Description: The Tax Collector's employees participate in the Florida Retirement System (FRS), a cost-sharing multiple-employer public employee retirement system, administered by the Florida Department of Management Services. The FRS is noncontributory for all members; all contributions are made by the employer. Employees elect participation in either the defined benefit plan(Pension Plan) or the defined contribution plan (Investment Plan). The Pension Plan provides for vesting w benefits after six years of creditable service. Normal retirement benefits are available to employees who retire at or after age 62 with six or more years of service. Early retirement is available after six years of service with a five percent reduction in benefits for each year prior to the normal retirement age. For those employees who elect participation in the Investment Plan rather than the Pension Plan, vesting occurs after one year of service and there is no "normal retirement age". These participants receive a defined contribution for self-direction in an investment product with a third party administrator selected by the State Board of Administration. 370 Indian River County,Florida Tax Collector Notes To Financial Statements Year Ended September 30, 2009 NOTE 4—PENSION PLAN-Continued Florida Retirement System- Continued Retirement benefits are based on age, average compensation, and years-of-service credit where For further erage compensation is computed as the average Tof anindividual'sandcointributve hon ratesest s pleasof e rle d the County- information concerning the Florida RetSystem wide note on the Florida Retirement System. Contributions to the FRS for the fiscal year ended September 30, 2009, were equal to 10.69% of the annual covered payroll. Contributions to the FRS for the fiscal years ended September 30, 2007, 2008, vely. These amounts are equal to 100% of the required 2009 were $172,168, $180,527, $173,154 respecti contribution for each year. NOTE 5—OTHER POSTEMPLOYMENT BENEFITS The Tax Collector participated in the Indian River County Other Postemployment Benefits Trust (IRCOT). The Tax Collector's 2009 annual required contribution of$60,040 was funded by the Bye of County Commissioners as part of a total contribution determined by the IRCOT actuary. information on the IRCOT can be found in the County-wide financial statements and in County Note 16. NOTE 6—RISK MANAGEMENT Indian River County maintains a risk management program that provides for coverage of risks of loss related to torts, theft of, damage to and destruction of assets, errors or omissions, injuries to employeesdep . natural disasters, and medical and life insurance coverage for employees and their g P Various excess catastrophe insurance policies with a commercial carrier are also in force for claims exceeding the amount chargeable against the Self-insurance Fund. The Tax Collector participated 5$277, �e County's self-insurance program during fiscal year 2009 at an annual cost of approx y Further details of this self-insurance program are discussed in the risk management note in the County- wide financial statements. NOTE 7—LONG-TERM LIABILITIES Changes in Long-Term Liabilities The following is a schedule of changes in long-term liabilities as of September 30, 2009: Beginning Ending Balance Balance 10/01/08 Additions Deletions 09/30/09 Accrued Compensated Absences $ 150,057 44 4 2 41 7 152 522 371 Indian River County,Florida Tax Collector Notes To Financial Statements Year Ended September 30, 2009 NOTE 7—LONG-TERM LIABILITIES -Continued Changes in Long-Term Liabilities - Continued Of the$152,522 liability for accrued compensated absences,management estimates that$10,522 will be due and payable within one year. The long-term liabilities are not reported in the financial statements of the Tax Collector since they are not payable from available spendable resources. They are reported in the financial statements of the County. NOTE 8—OPERATING LEASES The Tax Collector has entered into noncancelable operating leases as lessee for office space and office equipment. Lease expenditures totaled$192,289 for the fiscal year ended September 30, 2009. The following is a schedule by years of minimum future rentals to be paid by the Tax Collector for noncancelable operating leases as of September 30: Year Amount 2010 $ 126,964 2011 2,352 2012 2,352 2013 1,764 Total future minimum lease payments 13 4 2 r 372 Harris, Cotherman, Jones, Price Associates Certified Public Accountants-Chartered 5070 North Highway AIA,Suite 250 Vero Beach,n 32963 Tel 772.234.8484 Fax 772.234-8488 Report on Internal Control Over Financial Reporting and on Compliance and Other Matters Based on an Audit of Financial Statements Performed in Accordance with Government Auditing Standards The Honorable Carole Jean Jordan Tax Collector Indian River County,Florida We have audited the financial statements of Indian River County,Florida,including the fund financial statements of the Tax Collector,as of and for the year ended September 30,2009 and issued our report thereon dated March 12, America a a conducted rd audit a le tofinancialaudits contained in Government Auditing Standardse with auditing standards generally accepted in the lted is issued bysof the America and the standards applicable to fin Comptroller General of the United States. Internal Control over Financial Reporting In planning and performing our audit,we considered the Tax Collector's internal control over financial reporting as a basis for designing our auditing procedures for the purpose of expressing our opinion on the financial statements, but not for the purpose of expressing an opinion on the effectiveness of the Tax Collector's internal control over financial reporting. Accordingly,we do not express an opinion on the effectiveness of the Tax Collector's internal control over financial reporting. A deficiency in internal control exists when the design or operation of a control does not allow management or employees, in the normal course of performing their assigned functions, to prevent, or detect and correct misstatements on a timely basis. A material weakness is a deficiency,or combination of deficiencies, in internal control,such that there is a reasonable possibility that a material misstatement of the financial statements will not be prevented or detected by the entity's internal control. our consideration of internal control over financial reporting was for the limited purpose described in the first paragraph of this section and was not designed to identify all deficiencies in internal control that might be deficiencies,significant deficiencies weaknesses. a a di s definedidentify anyabovedeficiencies in internal control weak over financial reporting that we considert be material Compliance and Other Matters As part of obtaining reasonable assurance about whether the Tax Collector's financial statements are free of material its compliance with certain provisions of laws,regulations,contracts,and grant misstatement,we performed tests u agreements, noncompliance with which could have a direct and material effect on the determination of financial statement amounts. However,providing an opinion on compliance with those provisions was not an objective of our audit, and accordingly, we do not express such an opinion. The results of our tests disclosed no instances of noncompliance that are required to be reported under Government Auditing Standards. "ProNldittg Vain and Direction to Our Clients" Member FICPA Member AICPA Member AICPA Division For CPA Firms Private Companies Practice Section 373 Harris, Cotherman, Jones, Price &Associates Certified Public Accountants•Chartered The Honorable Carole Jean Jordan Tax Collector Page two This report is intended solely for the information and use of management,the Tax Collector, Indian River County, others within the entity,the Florida Auditor General,and applicable federal and state agencies,and is not intended to be and should not be used by anyone other than these specified parties. • C.��d.�t/ V.iLl.�J°� Guy d�0 -Ou.,17`a Vero Beach,Florida March 12,2010 374 HarrisCotherman, Jones,Price hg :n, Certified Public Accountants.Chartered 5070 North Highway AlA,Suite 250 Vero Beach,FL 32963 Tel 772.234-8484 Fax 772.234-8488 Management Letter The Honorable Carole Jean Jordan Tax Collector Indian River County,Florida We have audited the financial statements of Indian River County, Florida, including the fund financial statements of the Tax Collector, as of and for the year ended September 30, 2009 and have issued our report thereon dated March 12,2010. We conducted our audit in accordance with auditing standards generally accepted in the United States of ntained in Government Auditing America and the standards applicable to financial Coble have issued our Independent Auditorsby the Comptroller General of the United States Report on Internal Control over Financial Reporting and on Compliance and Other Matters based on an Audit of Financial Statements Performed in Accordance with Government Auditing Standards dated March 12,2010,which should be considered in conjunction with this management letter. Additionally,our audit was conducted in accordance with Chapter 10.550,Rules of the Auditor General, which govern the conduct of local governmental entity audits performed in the state of Florida. This letter includes the following information which is not included in the aforementioned auditors' report or schedule: Section 10.554(lxi)1.,Rules of the Auditor General, requires that we determine whether or not corrective actions have been taken to address significant findings and recommendations made in the preceding annual financial audit report. There were no recommendations made in the preceding audit report. Section 10.554(l)(i)2., Rules of the Auditor General, requires our audit to include a review of the provisions of Section 218.415, Florida Statutes,regarding the investment of public funds. In connection with our audit, we determined that the Tax Collector, Indian River County, Florida, complied with Section 218.415,Florida Statutes. Section 10.554(lxi)3., Rules of the Auditor General, requires that we address in the management letter any recommendations to improve financial management. In connection with our audit, we did not have any such recommendations. Section 10.554(l)(i)4., Rules of the Auditor General, requires that we address violations of laws, regulations,and contracts or grant agreements,or abuse that have occurred,or are likely to have occurred, that have an effect on the determination of financial statement amounts that is less than material,but more than inconsequential. In connection with our audit,we did not have any such findings. «prcmiding Vain and Dhwfwn m otic Cliet& Member FICPA Member AICPA Member AICPA Division Far CPA Finns Private Companies Practice section 375 Harris, Cotherman, Jones, Price &Associates Certified Public Accountants•Chartered The Honorable Carole Jean Jordan Tax Collector Page two Section 10.554(lxi)5.,Rules of the Auditor General, provides that the auditor may,based on professional judgment, report the following matters that have an inconsequential effect on financial statements, considering both quantitative and qualitative factors: (1) violations of contracts or grant agreements,or fraud, illegal acts, or abuse and, (2) control deficiencies that are not significant deficiencies. In connection with our audit,we did not have any such findings. Section 10.554(1)(i)6., Rules of the Auditor General, requires that the name or official title and legal authority for the primary government and each component unit of the reporting entity be disclosed in this management letter,unless disclosed in the notes to the financial statements. This information is disclosed in the notes to the financial statements. Pursuant to Chapter 119,Florida Statutes,this management letter is a public record and its distribution is not limited. Auditing standards generally accepted in the United States of America require us to indicate that this letter is intended solely for the information and use of management, the Tax Collector, Indian River County,the Florida Auditor General,and applicable federal and state agencies, and is not intended to be and should not be used by anyone other than these specified parties. Vero Beach,Florida March 12,2010 �t 376