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Home My WebLink About2011-075COMPREHENSIVE ANNUAL FINANCIAL REPORT For the Fiscal Year October 1, 2009 through September 30, 2010 Indian River County Florida Emergency Services Fire Rescue Station #12 is located in the Gifford area at 3620 49th Street. It was completed in November 2009 by Barth Construction at a cost of $2.2 million. The project was funded by the Emergency Services District Fund as well as a $750,000 Community Development Block Grant from the Florida Department of Community Affairs. INDIAN RIVER COUNTY, FLORIDA COMPREHENSIVE ANNUAL FINANCIAL REPORT FOR THE FISCAL YEAR OCTOBER 1, 2009 THROUGH SEPTEMBER 30, 2010 Jeffrey K. Barton Clerk of the Circuit Court and Comptroller 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, 2010 Board of County Commissioners as of September 30, 2010 Peter D. O'Bryan Wesley S. Davis Chairman Joseph E. Flescher Bob Solari Gary C. Wheeler Vice -Chairman Current Board of County Commissioners (after November 16, 2010) Bob Solari Wesley S. Davis Chairman Joseph E. Flescher Gary C. Wheeler Peter D. O' Bryan Vice -Chairman Elected Constitutional Officers as of September 30, 2010 Jeffrey K. Barton Carole Jean Jordan David C. Nolte Clerk of the Circuit Court and Comptroller Tax Collector Property Appraiser Kay Clem Leslie R. Swan Supervisor of Elections Supervisor of Elections (through December 31, 2010) (as of January 1, 2011) Deryl Loar Sheriff County Management Joseph A. Baird Alan S. Polackwich Sr. County Administrator County Attorney Michael Zito Jason Brown Chris Mora Assistant County Administrator Budget Director Director of Public Works Robert M. Keating John W. King 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, 2010 INTRODUCTORY SECTION Page Number LETTER OF TRANSMITTAL........................................................................................................ i ORGANIZATION CHART............................................................................................................. A CERTIFICATE OF ACHIEVEMENT FOR EXCELLENCE IN FINANCIAL REPORTING................................................................................................ vii FINANCIAL SECTION INDEPENDENT AUDITORS' REPORT..........................................................................................1 MANAGEMENT'S DISCUSSION AND ANALYSIS.....................................................................3 BASIC FINANCIAL STATEMENTS: Government -wide Financial Statements: Statementof Net Assets........................................................................................................17 Statement of Activities..........................................................................................................18 Fund Financial Statements: Balance Sheet - Governmental Funds...................................................................................20 Reconciliation of Total Governmental Fund Balances to Net Assets of Governmental Activities...........................................................................22 Statement of Revenues, Expenditures, and Changes in Fund Balances - Governmental Funds............................................................................24 Reconciliation of the Statement of Revenues, Expenditures, and Changes in Fund Balances of Governmental Funds to the Statement of Activities ......................26 Statement of Revenues, Expenditures, and Changes in Fund Balances - Budget and Actual - General Fund.................................................................................27 Statement of Revenues, Expenditures, and Changes in Fund Balances - Budget and Actual - Impact Fees Fund...........................................................................28 Statement of Revenues, Expenditures, and Changes in Fund Balances - Budget and Actual - Secondary Roads Construction Fund............................................29 Statement of Revenues, Expenditures, and Changes in Fund Balances - Budget and Actual -Transportation Fund.......................................................................30 Statement of Revenues, Expenditures, and Changes in Fund Balances - Budget and Actual - Emergency Services District Fund................................................31 Statement of Net Assets - Proprietary Funds........................................................................33 Indian River County, Florida COMPREHENSIVE ANNUAL FINANCIAL REPORT TABLE OF CONTENTS - CONTINUED Fiscal Year Ended September 30, 2010 Page Number Statement of Revenues, Expenses, and Changes in Fund Net Assets - Proprietary Funds..............................................................................34 Statement of Cash Flows - Proprietary Funds......................................................................36 Statement of Fiduciary Net Assets — Fiduciary Funds..........................................................40 Statement of Changes in Fiduciary Net Assets — Other Postemployment Benefits Trust Fund...................................................41 Notes to the Financial Statements...............................................................................................43 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 Indian River County, Florida COMPREHENSIVE ANNUAL FINANCIAL REPORT TABLE OF CONTENTS- CONTINUED Fiscal Year Ended September 30, 2010 STATISTICAL SECTION Page Number SCHEDULE 1 Net Assets by Component - Last Ten Fiscal Years ..........................................164 SCHEDULE 2 Changes in Net Assets - Last Ten Fiscal Years ................................................166 SCHEDULE 3 Fund Balances, Governmental Funds - Last Ten Fiscal Years .........................170 SCHEDULE 4 Changes in Fund Balances, Governmental Funds — Last Ten Fiscal Years..................................................................................172 SCHEDULE 5 Tax Revenues by Source, Governmental Funds — Last Ten Fiscal Years..................................................................................174 SCHEDULE 6 Assessed Value and Actual Values of Taxable Property - Last Ten Fiscal Years..................................................................................175 SCHEDULE 7 Property Tax Rates - Direct and Overlapping Tax Rates - Last Ten Fiscal Years..................................................................................176 SCHEDULE 8 Principal Property Taxpayers - Year 2010 and Year 2001 ...............................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 - Last Ten Fiscal Years..................................................................................186 Indian River County, Florida COMPREHENSIVE ANNUAL FINANCIAL REPORT TABLE OF CONTENTS- CONTINUED Fiscal Year Ended September 30, 2010 Page Number SCHEDULE 15 Pledged Revenue Coverage - Recreational Revenue Refunding Bonds - Series 2003 - Last Ten Fiscal Years ...........................................................188 SCHEDULE 16 Demographic and Economic Statistics - Last Ten Years..................................189 SCHEDULE 17 Principal Employers -Year 2010 and Nine Years Ago ....................................190 SCHEDULE 18 Building Permits — Last Ten Fiscal Years .......................................................192 SCHEDULE 19 Operating Indicators by Function/Program — Last Ten Fiscal Years ...............194 SCHEDULE 20 Full Time Equivalent County Government Employees by Function/Program - Last Ten Fiscal Years ............................................198 SCHEDULE 21 Capital Asset Statistics by Function/Program - Last Ten Fiscal Years ............200 SCHEDULE 22 Department of Utility Services - Historical Rate Structure — Last Ten Fiscal Years..................................................................................204 SCHEDULE 23 Water and Wastewater Customers - Last Ten Fiscal Years..............................206 SCHEDULE 24 Top 10 High Volume Customers of Utility Service .........................................207 SCHEDULE 25 Capacity Charges - Utilities Department - Last Ten Fiscal Years....................208 SCHEDULE 26 Pledged Revenues for Recreational Revenue Refunding Bonds, Series 2003 — Last Ten Fiscal Years..................................................................................209 SCHEDULE 27 Pledged Revenues for Spring Training Facility Revenue Bonds, Series 2001 — Last Ten Fiscal Years..................................................................................210 Indian River County, Florida COMPREHENSIVE ANNUAL FINANCIAL REPORT TABLE OF CONTENTS- CONTINUED Fiscal Year Ended September 30, 2010 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: Report on Compliance with Requirements that Could Have a Direct and Material Effect on 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 Schedule of Findings and Questioned Costs.............................................................................223 ImpactFee Affidavit.................................................................................................................225 Indian River County, Florida COMPREHENSIVE ANNUAL FINANCIAL REPORT TABLE OF CONTENTS- CONTINUED Fiscal Year Ended September 30, 2010 AUDITOR GENERAL REPORTS SECTION Page Number BOARD OF COUNTY COMMISSIONERS IndependentAuditor's Report ...................................................................................................229 Special Purpose Financial Statements......................................................................................230 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 ........................................................293 ManagementLetter...................................................................................................................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 ........................................................309 ManagementLetter...................................................................................................................311 PROPERTY APPRAISER Independent Auditor'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, 2010 SHERIFF Page Number Independent Auditor's Report ...................................................................................................326 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 Independent Auditor'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.............................................................374 ManagementLetter...................................................................................................................376 �AR JEFFREY K. BARTON Clerk of Circuit Court and Comptroller 1 801 27th Street Vero Beach, Florida 32960-3388` ' Telephone (772) 226-1945 March 15, 2011 To the Citizens of Indian River County: The Comprehensive Annual Financial Report of Indian River County, Florida for the fiscal year ended September 30, 2010, 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, 2010 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. The County early implemented the Governmental Accounting Standards Board (GASB) Statement 54 — Fund Balance Reporting and Governmental Funds Type Definitions and has prepared the financial statements to meet these requirements. The Statement requires the fund balance for governmental funds to be reported in classifications that comprise a hierarchy based primarily on the extent to which the government is bound to honor constraints on the specific purposes for which amounts in those funds can be spent. 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. Indian River County is a non -charter county established 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), and the blended component units consisting of the Emergency Services District and the Solid Waste Disposal District. 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 in the national economy continued to affect Indian River County in 2010. Property tax values decreased from $17.4 billion in 2009 to $15.8 billion in 2010. Construction activity dramatically decreased as well. The peak activity of growth occurred in 2005 as illustrated in Statistical Schedule 19 and since that time, the number of building permits issued for new construction has decreased over 90%. Indian River County's population remained relatively unchanged from the previous year with a decrease of 277 residents or less than I%. The unemployment rate continued to increase from 15.2% in 2009 to 15.4%. Indian River County is a major producer of citrus in the state with approximately 11.5% of total County acreage dedicated to citrus production. Citrus production decreased 16% from 11.4 million boxes in 2009 to 9.6 million boxes in 2010. 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 66th Avenue (Segment One) at a cost of $23,833,362, 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 September 2009 and 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. ii 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 2010, approximately $12.6 million was received and will be used towards funding numerous capital projects including the following construction projects: • South County Park — Phase III Improvements - 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 was needed to replace the existing facility that was severely damaged by the hurricanes in 2004. The construction of the $1.5 million complex was completed in 2010 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. • Egret Marsh Stormwater Park — The County's first Algal Turf Scrubber System (ATS) was completed in 2010 at a cost of approximately $6.0 million. This system removes dissolved nutrients from ten million gallons of Indian River Farms Water Control District's canal water each day and produces a useable byproduct of harvested algae. • 53rd Street Widening — Due to growth in the northern portion of the County, 53rd Street is reaching capacity. This project will widen the road from two to four lanes from 58th Avenue to Indian River Boulevard at a cost of approximately $5.1 million. • 800 Mhz Radio Expansion — Construction of a $2.2 million communications tower is planned for fiscal year 2010-2011. 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 2010, County investments had yields ranging from 0.05% to 4.75%. The overall annual yield of the portfolio as of September 30, 2010 was 1.27%. 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 $1.7 million. In addition, interest, dividend and mark -to -market income was $415,361. Yields ranged from -15.38% to 17.18% 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 586,000 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, of which, $5.5 million was spent in FY 2010. 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. The Spoonbill Marsh Brine project currently underway will provide an alternative to discharging brine directly into the Indian River Lagoon at an estimated cost of $2.1 million. Also being constructed is the North Regional Reuse Storage and Repump Facility which is designed to transfer reuse water from the mainland to the barrier island. Completion of the reuse main is scheduled for 2010-2011 with a cost of approximately $1.9 million. A new biosolids facility was completed in FY 2010 which relocated biosolids processing from the Central Wastewater Plant to the Indian River County landfill site. The $5.1 million facility was designed to accept liquid sludge. The liquid sludge is then dewatered and the dried product is trucked over to the landfill for disposal. Awards and Acknowledgements 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, 2009. This was the 27th 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 2009-2010 fiscal year. This was the 19th 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 Finance 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 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 Clerk of Circuit Court Finance Department Assistant County Administrator/ General Services Youth Guidance Recreation Parks Division Veterans Services Shooting Range Libraries _ Mailroom Switchboard Humrvicaen Ses Telecommunications Sheriff Public Works Geographic Info Systems Engineering Roads & Bridges Traffic Fleet Management Secondary Road Construction Stormwater Beach Preservation Facilities Management Residents of Indian River County Supervisor of Board of Elections County Commissioners County Administrator Utilities Services Leisure Services Golf Course Wastewater Treatment Water Production General & Engineering Biosolids Operations Customer Service Wastewater Collection Water Distribution Solid Waste Disposal District V1 I Property Appraiser County Attorney Emergency Community Services Development I Tax Collector Office of Management & Budget Risk Management Computer Services Purchasing Human Resources Planning Division Environmental Emergency Management Fire /Rescue Planning & Code Enforcement IRCLHAP / SHIP Program Radiological Emergency Preparedness Emergency Base Grant Metropolitan Planning Organization Building Animal Control Division Soil &Water 911 Coordinator Conservation Housing Authority Rental Ag Extension I Tax Collector Office of Management & Budget Risk Management Computer Services Purchasing 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, 2009 A Certificate of Achievement for Fxcellence 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. .1Jv , • v ;417[DSTAlTS Anoevzo UM , N aon President fhfLi.40 Executive Director V11 �OR�IO% 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 The Honorable Board of County Commissioners and Constitutional Officers Indian River County, Florida We have audited the accompanying financial statements of governmental activities, the business - type activities, 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, 2010, 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, each major fund, and the aggregate remaining fund information of Indian River County, Florida as of September 30, 2010, and the respective changes in financial position and cash flows, where applicable, thereof and the respective budgetary comparison for the General Fund and the Major Special Revenue Funds 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 our report dated March 11, 2011 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 that 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. "Providing Vision and Direction to our Clients" 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. 5" C�marc. nlcif, . Vero Beach, Florida March 11, 2011 2 Indian River County, Florida Management's Discussion and Analysis For the Year Ended September 30, 2010 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, 2010. 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 2009. • The assets of the County exceeded its liabilities by $1,004.8 million (net assets). Of this amount, $140.4 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 $17.7 million. Governmental activities accounted for $23.3 million of this increase primarily due to conservative budgeting in anticipation of revenue shortfalls and the savings from early completion of several capital projects. Governmental activities expenses reflected a 9.7% reduction ($164.9 million in 2009 to $148.9 million in 2010). The increase in governmental activities net assets was offset by a $5.6 million decrease in business -type activities net assets, largely attributable to a decrease in interest earnings and developer contributions. • Unassigned fund balance for the general fund was $33.2 million, or a 5.4% decrease from the prior year general fund unassigned balance. The key factors for the decrease were due to $1.5 million committed to local job grants and $1.4 million assigned to FY 2011 budget appropriation. 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, 2010 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. The government -wide financial statements can be found on pages 17-19 of this report. Fund financial statements A fund is a grouping of related accounts that is used to maintain control over resources that have been 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 County maintains 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. al Indian River County, Florida Management's Discussion and Analysis For the Year Ended September 30, 2010 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 20-31 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 33-39 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 40-41 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 43-99 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, 2010 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 $1,004.8 million at the close of the fiscal year. By far, the largest portion of the County's net assets (70%) 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) Net assets: Invested in capital assets, net of related debt 480.2 461.7 223.4 223.3 703.6 685.0 Restricted 133.0 158.3 27.8 51.0 160.8 209.3 Unrestricted Governmental Business -type 54.6 37.1 140.4 Activities Activities Total 2010 2009 2010 2009 2010 2009 Current and other assets $ 251.8 $ 247.4 $ 105.2 $ 108.9 $ 357.0 $ 356.3 Capital assets 537.0 523.9 276.1 283.0 813.1 806.9 Total assets 788.8 771.3 381.3 391.9 1,170.1 1,163.2 Current liabilities 24.7 23.7 12.7 14.8 37.4 38.5 Other liabilities 65.1 71.9 62.8 65.7 127.9 137.6 Total liabilities 89.8 95.6 75.5 80.5 165.3 176.1 Net assets: Invested in capital assets, net of related debt 480.2 461.7 223.4 223.3 703.6 685.0 Restricted 133.0 158.3 27.8 51.0 160.8 209.3 Unrestricted 85.8 55.7 54.6 37.1 140.4 92.8 Total net assets $ 699.0 $ 675.7 $ 305.8 $ 311.4 $ 1,004.8 $ 987.1 A portion of the County's net assets (16.0%) represents resources that are subject to external restrictions on how they may be used. The remaining balance of the unrestricted net assets ($140.4 million) may be used to meet the government's ongoing obligations to citizens and creditors. The $18.6 million increase in net assets invested in capital assets, net of related debt resulted from: 1) the construction of roads, drainage and beach restoration projects, 2) the purchase of right-of-way, and 3) the expansion of water, wastewater and sludge facilities. Con Indian River County, Florida Management's Discussion and Analysis For the Year Ended September 30, 2010 The decrease in governmental activities restricted net assets and the increase in governmental unrestricted net assets were due to the early implementation of GASB Statement 54, Fund Balance Reporting and Governmental Fund Type Definitions. Amounts that were previously classified as restricted ($22.1 million) in fiscal year 2009 were deemed to belong in the committed and assigned categories in fiscal year 2010 (now considered unrestricted under the new Statement). In addition to the reclassification of $22.1 million in net assets, there was an $7.2 million increase in governmental activities unrestricted net assets due to the receipt of a $4.0 million grant in the County's Beach Restoration fund and a $3.2 million increase in County's Self Insurance Fund. The decrease in business -type activities restricted net assets and the increase in business -type unrestricted net assets was due to the completion of capital projects. In the County Utilities Fund, the net assets are restricted during construction and then unrestricted upon completion. 7 Indian River County, Florida Management's Discussion and Analysis For the Year Ended September 30, 2010 Indian River County Changes in Net Assets (In Millions) Governmental Business -type Activities Activities Total Revenues: Program revenues: Charges for services Operating grants/contributions Capital grants/contributions General revenues: Property taxes Sales taxes Franchise fees State shared revenues Other Total revenues Expenses: General government Public safety Physical environment Transportation Economic environment Human services Culture/recreation Court related Interest and fiscal charges Water and sewer Solid waste Golf course Building Total expenses Increase (decrease)in net assets before transfers and special item Special item Transfers Increase (decrease) in net assets Net assets - October 1, 2009 Adjustment - pollution remediation Net assets - September 30, 2010 2010 2009 2010 2009 2010 2009 $ 14.9 $ 18.6 $ 41.5 $ 41.5 $ 56.4$ 60.1 15.8 11.1 - 1.2 15.8 12.3 7.0 15.0 1.7 3.7 8.7 18.7 84.6 94.4 - - 84.6 94.4 19.0 19.3 - - 19.0 19.3 9.3 9.7 - - 9.3 9.7 17.5 11.2 - 0.4 17.5 11.6 4.1 7.8 1.3 3.7 5.4 11.5 172.2 187.1 44.5 50.5 216.7 237.6 23.5 25.8 - - 23.5 25.8 68.2 71.2 - - 68.2 71.2 1.4 0.8 - - 1.4 0.8 20.9 23.7 - - 20.9 23.7 2.5 0.7 - - 2.5 0.7 7.4 8.5 - - 7.4 8.5 16.0 24.5 - - 16.0 24.5 6.3 6.8 - - 6.3 6.8 2.7 2.9 - - 2.7 2.9 - - 34.1 37.5 34.1 37.5 - - 10.7 10.4 10.7 10.4 - - 2.7 2.9 2.7 2.9 - - 1.9 2.2 1.9 2.2 148.9 164.9 49.4 53.0 198.3 217.9 23.3 22.2 (4.9) (2.5) 18.4 19.7 - - (0.7) - (0.7) - - (7.5) - 7.5 - - 23.3 14.7 (5.6) 5.0 17.7 19.7 675.7 661.2 311.4 306.4 987.1 967.6 - (0.2) - - - (0.2) $ 699.0 $ 675.7 $ 305.8 $ 311.4 $ 1,004.8 $ 987.1 Indian River County, Florida Management's Discussion and Analysis For the Year Ended September 30, 2010 Governmental Activities Governmental activities revenues exceeded expenses by $23.3 million. Key elements of this increase are as follows: • Overall program revenues decreased $7.0 million. 1) Charges for services decreased by $3.7 million or 20%. Effective July 1, 2009 the accounting treatment of certain court related revenues changed, and this resulted in a $1.8 million decrease compared to the previous year. The remaining decrease of $1.9 million is a reflection of the slowdown in the general economy. 2) Operating grants in 2010 were $4.7 million higher, an increase of 42% from the 2009 operating grant revenues. Economic environment operating grants increased by $3.2 million, transportation increased by $2.1 million, and the remaining grants decreased by $0.6 million. 3) Capital grants were $8.0 million lower in 2010 than in 2009, an overall decrease of 53%. This was largely due to decreased physical environment capital grants ($3.1 million lower) and decreased culture/recreation capital grants ($3.0 million lower). • The governmental activities expenses were $16.0 million lower in 2010 than in 2009. The decrease is a reflection of budget cuts and the completion of projects. General government expenses decreased by $2.3 million, public safety expenses decreased by $3.0 million, transportation decreased by $2.8 million, human services decreased by $1.1 million, culture/recreation decreased by $8.5 million, and the remaining expenses increased by $1.7 million. Business -type Activities Business -type activities net assets decreased by $5.6 million. Key elements of this decrease are as follows: • Operating grants decreased by $1.2 million as there were no operating grants in 2010. Capital grants/contributions decreased $2.0 million as a result of lower developer capital contributions. • Interest earnings had decreased by $2.5 million or 68% from the preceding year due to lower interest rates. • In 2009, transfers in the amount of $7.5 million represented water and sewer capital project contributions from the governmental activities. • Overall expenses were $2.9 million or 5% lower in 2010 than in 2009, the reflection of budget cuts due to the expected economic slowdown, which included: 1) golf course had $0.2 million or 8% lower expenses in 2010 than in 2009, 2) building department had $0.3 million or 14% lower expenses in 2010 than in 2009, 3) water and sewer utilities expenses were $2.7 million or 7% lower in 2010 than in 2009. Water and sewer utilities expenses also decreased due to lower renewal and replacement costs. Solid waste expenses were $0.3 million or 3% higher in 2010 than in 2009 mainly due to increased depreciation costs for completed capital projects. I Indian River County, Florida Management's Discussion and Analysis For the Year Ended September 30, 2010 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 Unassigned fund balance may serve as a useful measure of the County's net resources available for spending at the end of the fiscal year. Approximately 16% of this total amount ($32 million) constitutes unassigned fund balance, which is available for spending at the County's discretion. The remainder of fund balance is presented in classifications that comprise a hierarchy based primarily on the extent to which the County is bound to honor constraints on the specific purposes for which amounts in those funds can be spent. The County had fund balance in 1) a nonspendable category for inventories, prepaid items, and advances to other funds ($2.5 million), 2) a restricted category for resources that are either restricted externally by creditors, grantors, contributors, or laws or regulations of other governments or imposed by law through constitutional provisions or enabling legislation ($130.2 million), 3) a committed category for constraints imposed by formal action of the Board of County Commissioners ($26.4 million), and 4) an assigned category for constraints by the County's intent to use for specific purposes ($10.9 million). The two largest restricted amounts are in the Impact Fees Fund with a $40.9 million restricted fund balance and the Optional Sales Tax Fund with a $34.7 million restricted fund balance. Fund balances of the Impact Fees and Secondary Roads Construction Funds are slated for major road expansions throughout the County. The County's governmental funds reported a combined fund balance of $202.0 million, which is an increase of $1.5 million over the prior year of $200.5 million. Contributing factors to the $1.5 million increase in fund balance are: • Fund balance in the General Fund increased by $0.9 million. This small increase was a reflection of an 11 % reduction in property tax revenue; consequently, budgets were similarly decreased, including transfers to other funds. • In the Impact Fees Fund, expenditures exceeded revenues by $5.4 million. Contributing factors were the slowdown in construction activity reflected by a decrease in impact fee revenue of $0.6 million, or 30%, and a decrease in interest earnings of $1.2 million due to market conditions. The transportation expenditures decreased by $7.7 million, from $14.1 million in 2009 to $6.4 million in 2010, due to the completion of some large road projects. Culture/recreation expenditures decreased by $0.7 million, from $1.9 million to 2009 to $1.2 million in 2010, due to the completion of the Brackett library collection. • Fund balance in the Secondary Roads Construction Fund decreased by $1.2 million due to the completion of road projects. • The Optional Sales Tax Fund increased by $2.4 million. Capital project expenditures decreased by $2.6 million due to the completion of the Egret Marsh stormwater project. 10 Indian River County, Florida Management's Discussion and Analysis For the Year Ended September 30, 2010 Proprietary funds Unrestricted net assets at the end of the year amounted to $18.5 million in the Solid Waste Disposal District Fund, ($0.2) million in the Golf Course Fund, $3.9 million in the County Building Fund, and $32.4 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 a $10.7 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. $1,748,566 grants appropriations and prior year rollovers for the Senior Resource Association to provide County -wide public transportation. $149,656 payment of the State Criminal Alien Assistance Program (SCARP) to the Sheriff's Department. Actual revenues exceeded final budget by $2.5 million for the following reasons: Actual receipts of taxes exceeded budget by $700,000. Actual franchise fees received exceeded budget by $500,000. Grants received mid -year that are not budgeted until awarded. Actual expenditures were lower than anticipated for the following reasons: Positions budgeted but not filled due to hiring freeze. Utilities expenses decreased due to a reduction in electric rates. 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 27. 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, 2010, amounts to $813.1 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 1% (a 3% increase for governmental activities and a 2% decrease for business -type activities). 11 Indian River County, Florida Management's Discussion and Analysis For the Year Ended September 30, 2010 Governmental activities had the following major increases during the fiscal year: • An increase in infrastructure primarily due to the capitalization of the County Road 512 widening project from Sebastian River Middle School to I-95 ($8.9 million), the College Lane expansion project ($1.9 million), and the 56th Court Bridge over the North Relief Canal Project ($1.2 million). • An increase in buildings and improvements primarily due to the capitalization of the parks maintenance complex ($1.5 million), Fire Station #9 renovations ($2.2 million) and Fire Station #12 construction ($2.1 million). • An increase in right-of-way primarily due to $2.8 million for right-of-way on 43rd Avenue and $1.8 million for 66th Avenue. Business -type activities had the following major increases during the fiscal year: • An increase in buildings and improvements was due to the capitalization of the West Regional Wastewater Treatment Plant expansion ($23.0 million), the new Biosolids Facility ($5.1 million), and the Fellsmere Convenience Center ($2.1 million). • An increase in intangibles due to the contribution of numerous utilities easements ($0.8 million). Indian River County Capital Assets (Net of Depreciation, In Millions) Additional information on the County's capital assets can be found in Note 6 on pages 65-68 of this report. 12 Governmental Business -type Activities Activities Total 2010 2009 2010 2009 2010 2009 Land $ 138.4 $ 138.3 $ 19.3 $ 19.3 $ 157.7 $ 157.6 Right-of-way 48.9 43.0 - - 48.9 43.0 Buildings and improvements 152.7 147.9 242.9 219.6 395.6 367.5 Equipment 25.5 25.1 3.3 4.7 28.8 29.8 Intangibles 2.4 2.4 1.3 0.4 3.7 2.8 Infrastructure 125.4 118.2 - - 125.4 118.2 Construction in progress 43.7 49.0 9.3 39.0 53.0 88.0 Total $ 537.0 $ 523.9 $ 276.1 $ 283.0 $ 813.1 $ 806.9 Additional information on the County's capital assets can be found in Note 6 on pages 65-68 of this report. 12 Indian River County, Florida Management's Discussion and Analysis For the Year Ended September 30, 2010 Debt Administration - Long-term debt At the end of the current fiscal year, the County had total bonded debt outstanding of $113.0 million. Of this amount, $44.5 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) The County received an increase in all of their bond ratings with the recalibration of the bond rating system. The County's General Obligation underlying rating from Standard & Poor's is "AAA" and "AA" on the Revenue Bonds. 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 13 on pages 74-85 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 include management reorganizations, staffing reductions, operating expense decreases, contract renegotiations, minimal reductions of services and programs, and reduced non-profit funding. In summary, staff has undertaken a critical review of all functions to streamline operations as much as possible without impacting service levels. The tax roll in the General Fund decreased by 10.4% due to continued falling real estate values. The total proposed budget is a decrease of $258,855,120 or 27.9%. 13 Governmental Business -type Activities Activities Total General Obligation Debt: 2010 2009 2010 2009 2010 2009 General Obligation, Series 2001 $ 5.2$ 6.0 $ - $ - $ 5.2$ 6.0 General Obligation Ref., Series 2003 - 1.2 - - - 1.2 Limited General Oblig., Series 2006 39.3 42.1 - - 39.3 42.1 Revenue Bonds: Spring Training Facility, Series 2001 12.3 12.9 - - 12.3 12.9 Recreational Revenue Ref., Series 2003 - - 3.1 3.7 3.1 3.7 Water and Sewer Ref. Rev., Series 1993A - - 1.6 3.0 1.6 3.0 Water and Sewer Ref. Rev., Series 2005 - - 22.7 24.1 22.7 24.1 Water and Sewer Ref. Rev., Series 2009 - - 28.8 29.0 28.8 29.0 Total $ 56.8$ 62.2 $ 56.2$ 59.8 $ 113.0$ 122.0 The County received an increase in all of their bond ratings with the recalibration of the bond rating system. The County's General Obligation underlying rating from Standard & Poor's is "AAA" and "AA" on the Revenue Bonds. 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 13 on pages 74-85 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 include management reorganizations, staffing reductions, operating expense decreases, contract renegotiations, minimal reductions of services and programs, and reduced non-profit funding. In summary, staff has undertaken a critical review of all functions to streamline operations as much as possible without impacting service levels. The tax roll in the General Fund decreased by 10.4% due to continued falling real estate values. The total proposed budget is a decrease of $258,855,120 or 27.9%. 13 Indian River County, Florida Management's Discussion and Analysis For the Year Ended September 30, 2010 Indian River County, like the nation overall, has been experiencing a continuation of the economic slowdown this year, impacting our tourism and retail industries. New construction activity has remained sluggish. During the fiscal year, the County reached an agreement with a renewable energy production facility to locate its facilities to Indian River County. Some revenues have leveled off and some are beginning to show signs of a slight increase. Therefore, our revenue projections for next year are mixed. For example, Half -Cent Sales Tax is increasing 2%, while interest earnings are expected to drop 39.2%. State Shared Revenues are expected to increase by 3.2%, with building permits to decrease 5.1%. With an increase in recycling and the department's cost cutting measures, Solid Waste Disposal District (SWDD) commercial rates have decreased 0.1% for fiscal year 2010-2011. Residential rates and the readiness -to -use fee remain unchanged. Street lighting district assessment rates for ten of the districts were able to be decreased ranging from 8.33% to 33.3%. All other rates and user's fees remain unchanged from fiscal year 2009-2010. 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 1801 27th Street Vero Beach, FL 32960 14 BASIC FINANCIAL STATEMENTS 15 R 16 LIABILITIES Current liabilities (payable from current assets) Accounts payable Indian River County, Florida 1,317,309 10,041,088 Retainage payable Statement of Net Assets 8,680 13,448 Claims payable September 30, 2010 - 2,351,622 Due to other governments 1,136,006 Primary Government 3,994,228 Other deposits held in escrow Governmental Business -type 338,008 Unearned revenues Activities Activities Total ASSETS 5,365,983 474,746 5,840,729 Current assets: 255,240 9,280 264,520 Cash and cash equivalents $ 197,648,098 $ 49,739,440 $ 247,387,538 Investments 868,909 - 868,909 Accounts receivable - net 2,046,687 2,840,234 4,886,921 Internal balances 526,669 (526,669) - Due from other governments 32,427,815 11,300 32,439,115 Interest receivable 327,206 572,319 899,525 Inventories 199,476 951,001 1,150,477 Other assets held for resale 1,677,658 - 1,677,658 Prepaid expenses 1,280,316 33,333 1,313,649 Current restricted assets: 2,242,960 32,320 2,275,280 Cash and cash equivalents 14,006,587 43,568,394 57,574,981 Total current assets 251,009,421 97,189,352 348,198,773 Non-current assets: 52,522,163 52,654,121 105,176,284 Unamortized bond issuance costs - 577,605 577,605 Deferred amounts on refundings - 3,451,072 3,451,072 Net other postemployment benefits asset 319,730 - 319,730 Capital assets - non -depreciable 235,240,647 29,871,780 265,112,427 Capital assets - depreciable 497,424,352 427,551,607 924,975,959 Capital assets - accumulated depreciation (195,629,098) (181,335,001) (376,964,099) Non-current restricted assets: 18,781,568 18,781,568 Special assessments receivable 440,907 1,568,428 2,009,335 Impact fees receivable - 815,573 815,573 Liens receivable - 1,569,743 1,569,743 Total non-current assets 537,796,538 284,070,807 821,867,345 Total assets 788,805,959 381,260,159 1,170,066,118 LIABILITIES Current liabilities (payable from current assets) Accounts payable 8,723,779 1,317,309 10,041,088 Retainage payable 4,768 8,680 13,448 Claims payable 2,351,622 - 2,351,622 Due to other governments 1,136,006 2,858,222 3,994,228 Other deposits held in escrow 337,008 1,000 338,008 Unearned revenues 496,853 27,428 524,281 Accrued compensated absences 5,365,983 474,746 5,840,729 Pollution remediation costs payable 255,240 9,280 264,520 Current liabilities (payable from current restricted assets): Accounts payable - 1,511,711 1,511,711 Retainage payable 1,251,420 124,900 1,376,320 Accrued interest payable 485,167 203,699 688,866 Customer deposits - 2„589,133 2,589,133 Bonds payable 4,270,000 3,510,000 7,780,000 Total current liabilities 24,677,846 12,636,108 37,313,954 Non-current liabilities: Accrued compensated absences 4,832,677 553,044 5,385,721 Pollution remediation costs payable 2,242,960 32,320 2,275,280 Claims payable 5,547,378 - 5,547,378 Closure and maintenance costs payable - 9,518,736 9,518,736 Bonds payable, net of premium and discount 52,522,163 52,654,121 105,176,284 Total non-current liabilities 65,145,178 62,758,221 127,903,399 Total liabilities 89,823,024 75,394,329 165,217,353 NET ASSETS Invested in capital assets, net ofrelated debt 480,243,738 223,375,337 703,619,075 Restricted for: Transportation/road projects 41,266,356 - 41,266,356 Public safety 18,781,568 18,781,568 Court related costs 3,515,856 3,515,856 Housing assistance 2,478,523 2,478,523 Capital projects 37,711,845 27,605,792 65,317,637 Beach renourishment 11,245,974 - 11,245,974 Culture/recreation 9,287,622 - 9,287,622 Debt service 2,898,553 292,500 3,191,053 Environmental conservation/preservation 1,381,231 - 1,381,231 Special assessment projects 1,576,087 1,576,087 Other purposes 2,785,223 - 2,785,223 Unrestricted 85,810,359 54,592,201 140,402,560 Total net assets $ 698,982,935 $ 305,865,830 $ 1,004,848,765 The accompanying notes are an integral part of the financial statements. 17 Functions/Programs Primary Government: Governmental activities: General government Public safety Physical environment Transportation Economic environment Human services Culture/recreation Court related Interest and fiscal charges Total governmental activities Business -type activities: Water and sewer Solid waste Golf course Building Total business -type activities Total primary government Indian River County, Florida Statement of Activities For the Year Ended September 30, 2010 Charges for Expenses Services 'rogram Revenues Operating Grants and Contributions Capital Grants and Contributions $ 23,506,576 $ 5,889,678 $ 583,221 $ 50,471 68,235,492 5,267,209 1,141,371 28,921 1,405,690 21,006 - 1,191,812 20,861,672 1,514,132 6,213,119 1,111,597 2,525,988 - 6,058,433 - 7,370,995 295,812 1,141,428 151,208 16,009,122 1,328,225 68,592 4,482,420 6,251,773 545,967 566,101 - 2,714,422 - - - 148,881,730 14,862,029 15,772,265 7,016,429 34,082,816 27,738,920 - 1,713,074 10,683,984 8,972,136 - - 2,715,607 3,148,029 - - 1,858,420 1,612,870 - - 49,340,827 41,471,955 - 1,713,074 $ 198,222,557 $ 56,333,984 $ 15,772,265 $ 8,729,503 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 Special item Transfers Total general revenues, transfers, and special item Change in net assets Net assets - beginning Net assets - ending The accompanying notes are an integral part of the financial statements. 18 Net (Expense) Revenue and Changes in Net Assets Primary Government Governmental Business -type (4,630,822) Activities Activities Total $ (16,983,206) $ - $ (16,983,206) (61,797,991) - (61,797,991) (192,872) - (192,872) (12,022,824) - (12,022,824) 3,532,445 - 3,532,445 (5,782,547) - (5,782,547) (10,129,885) - (10,129,885) (5,139,705) - (5,139,705) (2,714,422) - (2,714,422) (111,231,007) - (111,231,007) - (4,630,822) (4,630,822) - (1,711,848) (1,711,848) - 432,422 432,422 - (245,550) (245,550) - (6,155,798) (6,155,798) (111,231,007) (6,155,798) (117,386,805) 78,670,463 - 78,670,463 5,933,535 - 5,933,535 19,022,728 - 19,022,728 9,254,621 - 9,254,621 17,487,653 - 17,487,653 2,079,873 1,173,512 3,253,385 2,061,415 70,181 2,131,596 134,510,288 1,243,693 135,753,981 - (665,460) (665,460) (25,965) 25,965 - 134,484,323 604,198 135,088,521 23,253,316 (5,551,600) 17,701,716 675,729,619 311,417,430 987,147,049 $ 698,982,935 $ 305,865,830 $ 1,004,848,765 19 Indian River County, Florida Balance Sheet Governmental Funds September 30, 2010 ASSETS Cash and cash equivalents Investments Accounts receivable - net Special assessments receivable Due from other funds Due from other governments Inventories Prepaid items Other assets held for resale Advance to other funds Total assets LIABILITIES AND FUND BALANCES Liabilities: Accounts payable Retainage payable Due to other funds Due to other governments Deferred revenues Other deposits Total liabilities Fund Balances: Nonspendable: Inventories Prepaid items Advances to other funds Restricted for: Transportation/road improvements Court -related costs and improvements Housing assistance Law enforcement/public safety Fire/emergency services Tourism -related activites Beach renounshment Boating related projects Library services Land acquisition Stormwater, street lighting, and other special assessments Voting/election activities Debt service Capital projects Environmental conservation/preservation Sports Village repairs/improvements Solid waste projects Parks/recreational projects Other purposes Committed to: Economic incentives Emergency/disaster relief Budget stabilization Court operations Other purposes Assigned to: FY 2011 budget appropriation Transportation/road improvements Unassigned Total fund balances Total liabilities and fund balances Secondary Impact Roads General Fees Construction $ 57,996,310 $ 42,091,886 $ 8,021,250 868,909 - - 639,429 11 976,500 - - 920,596 31,981 6,394,802 43,278 - - 119,482 - - 622,000 $ 61,564,504 $ 42,123,867 $ 15,038,063 $ 3,219,591 $ 983,340 $ 643,543 4,768 214,578 171,532 481,040 - - 908,368 40,388 99,241 - 337,008 - - 5,050,016 1,238,306 815,075 43,278 119,482 - - 622,000 The accompanying notes are an integral part of the financial statements. 001 27,529,133 13,600,988 2,387,425 2,046,563 126,040 667,404 - 6,305,660 18,290 1,823,336 9,553,760 - 5,900,000 5,900,000 244,685 159,120 1,415,000 33,160,873 - - 56,514,488 40,885,561 14,222,988 $ 61,564,504 $ 42,123,867 $ 15,038,063 The accompanying notes are an integral part of the financial statements. 001 - 1,677,658 1,720,936 135 16,580 136,197 - - 622,000 Emergency Optional Other Total Services Sales Governmental Governmental Transportation District Tax Funds Funds 6,476,060 10,255,021 $ 9,265,794 $ 15,854,886 $ 18,087,765 $ 31,396,199 $ 182,714,090 - - - - 868,909 751 19 966,647 29,685 669,895 440,907 - 335,729 - 440,907 - 300,837 - 84,872 1,362,209 257,434 43,010 19,407,664 598,686 27,654,173 - - - - 43,278 135 - 34,713,820 16,580 136,197 - 1,079,736 1,677,658 1,677,658 - - - - 622,000 $ 9,965,021 $ 16,198,752 $ 37,495,429 $ 33,803,680 $ 216,189,316 243,197 2,084,823 $ 427,768 $ 900,891 $ 1,415,584 $ 1,005,413 $ 8,596,130 25,189 - 536,044 304,077 1,256,188 - 8,200,000 - 976,500 1,457,540 - - - 187,250 1,136,006 440,907 42,840 829,981 9,457 1,422,426 - - - - 337,008 893,864 943,731 2,781,609 2,482,697 14,205,298 - 1,677,658 1,720,936 135 16,580 136,197 - - 622,000 21 - 41,130,121 3,515,856 3,515,856 2,478,523 2,478,523 - 4,088,635 6,476,060 10,255,021 - 12,301,584 - 441,685 441,685 11,191,367 11,191,367 966,647 966,647 209,689 335,729 301,495 301,495 1,576,087 1,576,087 5,356 5,356 - 3,383,720 3,383,720 34,713,820 - 34,713,820 - 1,079,736 1,079,736 1,237,901 1,237,901 - 667,404 - 6,305,660 243,197 2,084,823 - - - 9,553,760 800,000 1,500,000 8,200,000 800,000 1,500,000 - 8,200,000 - - 91,573 336,258 - - 159,120 - 2,000,000 3,415,000 7,471,022 - 7,471,022 - - - (1,184,722) 31,976,151 9,071,157 15,255,021 34,713,820 31,320,983 201,984,018 $ 9,965,021 $ 16,198,752 $ 37,495,429 $ 33,803,680 $ 216,189,316 21 Indian River County, Florida Reconciliation of Total Governmental Fund Balances to Net Assets of Governmental Activities September 30, 2010 Total governmental fund balances: $ 201,984,018 Amounts reported for governmental activities in the statement of net assets are different because Capital assets used in governmental activities are not financial resources and, therefore, are not reported 536,574,076 in the fund. Long-term liabilities, including bonds payable ($56,792,163), accrued compensated absences ($10,151,576) and pollution remediation costs ($2,498,200) are not due and payable in the current period and, therefore, are not reported in the fund. (69,441,939) Accrued general long-term debt interest expenses are not financial uses and, therefore, are not reported it (485,167) the fund. Special assessment receivables are not financial resources in the current period and, therefore, are reported as unearned revenues. 95,592 Accrued interest on special assessments is not recognized in the current period because the resources ar not available and, therefore, not reported in the fund 100,184 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 24,112,503 Grant revenues are not recognized in the current period because the resources are not available and therefore, are not reported in the fund 5,522,728 The OPEB asset resulting from contributions in excess of the annual required contribution is not a financia resource and, therefore, is not reported in the funds 319,730 Interest revenues are not recognized in the current period because the resources are not available and, therefore, are not reported in the fund. 201,210 Net assets of governmental activities $ 698,982,935 The accompanying notes are an integral part of the financial statements. 22 �AR 23 Indian River County, Florida Statement of Revenues, Expenditures, and Changes in Fund Balances Governmental Funds For the Year Ended September 30, 2010 REVENUES Taxes Permits, fees and special assessments Intergovernmental Charges for services Judgments, fines and forfeits Interest Miscellaneous Total revenues EXPENDITURES Current: General government Public safety Physical environment Transportation Economic environment Human services Culture/recreation Court related Debt service: Principal Interest and fiscal charges Capital projects Total expenditures Excess of revenues over (under) expenditures OTHER FINANCING SOURCES (USES) Transfers in Transfers out Total other financing sources (uses) Net change in fund balances Fund balances at beginning of year Fund balances at end of year 19,252,544 165,244 - 43,558,014 - 315,778 - - 3,390,255 6,410,337 5,712,666 415,086 - - 3,432,333 - 9,214,964 1,183,106 - 5,692,157 - 85,271,131 7,758,687 5,712,666 9,299,631 (5,359,724) (1,175,170) 785,568 (9,187,484) - - (8,401,916) 897,715 (5,359,724) (1,175,170) 55,616,773 46,245,285 15,398,158 $ 56,514,488 $ 40,885,561 $ 14,222,988 The accompanying notes are an integral part of the financial statements. 24 Secondary Impact Roads General Fees Construction $ 58,142,762 $ - $ 3,498,698 9,418,668 1,431,948 29,947 16,086,564 370,099 912,958 8,847,945 - - 352,272 - - 716,622 478,035 68,982 1,005,929 118,881 26,911 94,570,762 2,398,963 4,537,496 19,252,544 165,244 - 43,558,014 - 315,778 - - 3,390,255 6,410,337 5,712,666 415,086 - - 3,432,333 - 9,214,964 1,183,106 - 5,692,157 - 85,271,131 7,758,687 5,712,666 9,299,631 (5,359,724) (1,175,170) 785,568 (9,187,484) - - (8,401,916) 897,715 (5,359,724) (1,175,170) 55,616,773 46,245,285 15,398,158 $ 56,514,488 $ 40,885,561 $ 14,222,988 The accompanying notes are an integral part of the financial statements. 24 25 Emergency Optional Other Total Services Sales Governmental Governmental Transportation District Tax Funds Funds $ - $ 22,060,666 $ 12,660,518 $ 7,264,082 $ 103,626,726 146,802 - 14,974 279,700 11,322,039 2,660,838 93,010 2,885,329 14,678,776 37,687,574 85,026 4,422,704 - 1,310,130 14,665,805 - 1,500 - 498,240 852,012 113,159 207,834 178,428 298,325 2,061,385 635,038 17,516 126,845 452,373 2,383,493 3,640,863 26,803,230 15,866,094 24,781,626 172,599,034 330,765 - - 1,145,563 20,894,116 - 25,655,217 2,276,382 71,489,613 443,144 - 372,251 1,131,173 11,521,032 463,617 27,497,907 - 2,105,253 2,520,339 3,835,073 7,267,406 8,055,572 18,453,642 522,674 6,214,831 5,315,000 5,315,000 - 2,758,138 2,758,138 - - 7,487,068 - 7,487,068 129294,941 25,655,217 7,487,068 26,849,523 171,029,233 (8,654,078) 1,148,013 8,379,026 (2,067,897) 1,569,801 8,951,106 - - 7,265,323 17,001,997 - (444,351) (6,000,000) (1,425,179) (17,057,014) 8,951,106 (444,351) (6,000,000) 5,840,144 (559017) 297,028 703,662 2,379,026 3,772,247 1,514,784 8,774,129 14,551,359 32,334,794 27,548,736 200,469,234 $ 9,071,157 $ 15,255,021 $ 34,713,820 $ 31,320,983 $ 201,984,018 25 Indian River County, Florida 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, 2010 Net change in fund balances - total governmental funds S 1,514,784 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 29,084,405 Less current year loss on assets (574,088) Less current year depreciation (17,989,825) 10,520,492 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. Assets transferred from governmental funds to proprietary funds must be recognized as a transfer out on the statement of activities. 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 Bond premium payment Pollution remediation costs Changes in accrued compensated absences do not require the use of current financial resources and, therefore, are not reported as expenditures in governmental funds. 2,801,077 (28,068) 5,315,000 93,224 46,100 5,454,324 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 43,716 Accrued OPEB expense 215,850 Some revenues reported in the governmental funds have been recognized as revenues in the prior fiscal year in the statement of activities. 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. 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. 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. Change in net assets of governmental activities The accompanying notes are an integral part of the financial statements. 26 103,824 259,566 (78,842) 3,466,950 (532,156) (228,635) S 23,253,316 Indian River County, Florida Statement of Revenues, Expenditures, and Changes in Fund Balances - Budget and Actual General Fund For the Year Ended September 30, 2010 REVENUES Taxes Permits, fees and special assessments Intergovernmental Charges for services Judgments, fines and forfeits Interest Miscellaneous Total revenues EXPENDITURES Current: General government Public safety Physical environment Transportation Economic environment Human services Culture/recreation Court related Total expenditures Excess of revenues over (under) expenditures OTHER FINANCING SOURCES (USES) Variance with Final Budget Budgeted Amounts Actual Positive Original Final Amounts (Negative) $ 57,407,553 $ 57,407,553 $ 58,142,762 $ 735,209 8,837,375 8,837,375 9,418,668 581,293 12,513,419 15,381,943 16,086,564 704,621 11,264,827 8,521,154 8,847,945 326,791 294,975 294,975 352,272 57,297 778,400 778,400 716,622 (61,778) 447,576 845,194 1,005,929 160,735 91,544,125 92,066,594 94,570,762 2,504,168 19,824,022 20,478,979 19,252,544 1,226,435 45,038,509 43,973,890 43,558,014 415,876 328,086 335,712 315,778 19,934 1,056,787 3,780,661 3,390,255 390,406 358,496 8,450,177 415,086 8,035,091 3,827,469 3,879,347 3,432,333 447,014 9,331,411 9,674,167 9,214,964 459,203 5,989,856 5,883,837 5,692,157 191,680 85,754,636 96,456,770 85,271,131 11,185,639 5,789,489 (4,390,176) 9,299,631 13,689,807 Transfers in 193,141 1,158,522 785,568 (372,954) Transfers out (9,185,082) (9,218,643) (9,187,484) 31,159 Total other financing sources (uses) (8,991,941) (8,060,121) (8,401,916) (341,795) Net change in fund balances (3,202,452) (12,450,297) 897,715 $ 13,348,012 Fund balances at beginning of year 3,202,452 12,450,297 55,616,773 Fund balances at end of year $ - $ - $ 56,514,488 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 Impact Fees Fund For the Year Ended September 30, 2010 Budgeted Amounts Original Final REVENUES Variance with Final Budget Actual Positive Amounts (Negative) Permits, fees and special assessments $ 3,933,000 $ 3,933,000 $ 1,431,948 $ (2,501,052) Intergovernmental - 600,000 370,099 (229,901) Interest 479,750 479,750 478,035 (1,715) Miscellaneous - - 118,881 118,881 Total revenues 4,412,750 5,012,750 2,398,963 (2,613,787) EXPENDITURES Current: General government Transportation Culture/recreation Total expenditures Net change in fund balances Fund balances at beginning of year Fund balances at end of year 187,475 1,121,214 165,244 955,970 14,092,097 25,190,557 6,410,337 18,780,220 1,575,000 3,155,585 1,183,106 1,972,479 15,854,572 29,467,356 7,758,687 21,708,669 (11,441,822) (24,454,606) (5,359,724) $ 19,094,882 11,441,822 24,454,606 46,245,285 $ 40,885,561 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 Secondary Roads Construction Fund For the Year Ended September 30, 2010 REVENUES Taxes Permits, fees and special assessments Intergovernmental Interest Miscellaneous Total revenues EXPENDITURES Current: Transportation Total expenditures Net change in fund balances Fund balances at beginning of year Fund balances at end of year Budgeted Amounts Original Final Actual Amounts Variance with Final Budget Positive (Negative) $ 3,029,312 $ 3,029,312 $ 3,498,698 $ 469,386 - - 29,947 29,947 - 2,887,967 912,958 (1,975,009) 190,000 190,000 68,982 (121,018) 9,930,568 9,930,568 26,911 (9,903,657) 13,149,880 16,037,847 4,537,496 (11,500,351) 15,014,277 18,489,026 5,712,666 12,776,360 15,014,277 18,489,026 5,712,666 12,776,360 (1,864,397) (2,451,179) (1,175,170) $ 1,276,009 1,864,397 2,451,179 15,398,158 $ - $ - $ 14,222,988 The accompanying notes are an integral part of the financial statements. 29 Indian River County, Florida Statement of Revenues, Expenditures, and Changes in Fund Balances - Budget and Actual Transportation Fund For the Year Ended September 30, 2010 REVENUES Permits, fees and special assessments Intergovernmental Charges for services Interest Miscellaneous Total revenues EXPENDITURES Current: General government Physical environment Transportation Total expenditures Excess of revenues over (under) expenditures OTHER FINANCING SOURCES Transfers in Total other financing sources Net change in fund balances Fund balances at beginning of year Fund balances at end of year Budgeted Amounts Original Final Variance with Final Budget Actual Positive Amounts (Negative) $ 76,000 $ 76,000 $ 146,802 $ 70,802 2,271,770 2,271,770 2,660,838 389,068 95,950 95,950 85,026 (10,924) 100,700 100,700 113,159 12,459 889,121 947,772 635,038 (312,734) 3,433,541 3,492,192 3,640,863 148,671 366,557 366,656 330,765 35,891 609,715 671,330 443,144 228,186 12,631,791 14,233,263 11,521,032 2,712,231 13,608,063 15,2 71,249 12, 294, 941 2,976,308 (10,174,522) (11,779,057) (8,654,078) 3,124,979 8,951,106 8,951,106 8,951,106 - 8,951,106 8,951,106 8,951,106 - (1,223,416) (2,827,951) 297,028 $ 3,124,979 1,223,416 2,827,951 8,774,129 $ - $ - $ 9,071,157 The accompanying notes are an integral part of the financial statements. 30 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, 2010 REVENUES Taxes Intergovernmental Charges for services Judgments, fines and forfeits Interest Miscellaneous Total revenues EXPENDITURES Current: Public safety Total expenditures Excess of revenues over (under) expenditures OTHER FINANCING USES Transfers out Total other financing uses Net change in fund balances Fund balances at beginning of year Fund balances at end of year Budgeted Amounts Original Final Variance with Final Budget Actual Positive Amounts (Negative) $ 21,829,153 $ 21,829,153 $ 22,060,666 $ 231,513 25,650 68,883 93,010 24,127 3,220,500 3,754,500 4,422,704 668,204 - - 1,500 1,500 205,200 205,200 207,834 2,634 5,974 5,974 17,516 11,542 25,286,477 25,863,710 26,803,230 939,520 25,456,648 27,819,114 25,655,217 2,163,897 25,456,648 27,819,114 25,655,217 2,163,897 (170,171) (1,955,404) 1,148,013 3,103,417 (493,187) (493,141) (444,351) 48,790 (493,187) (493,141) (444,351) 48,790 (663,358) (2,448,545) 703,662 $ 3,152,207 663,358 2,448,545 14,551,359 $ 15,255,021 The accompanying notes are an integral part of the financial statements. 31 �AR 32 Indian River County, Florida Statement of Net Assets Proprietary Funds September 30, 2010 LIABILITIES Current liabilities (payable from current assets) Accounts payable 445,966 Business -type Activities - Enterprise Funds 780,081 Governmental 1,317,309 Solid Waste Retainage payable - - 8,680 Activities 8,680 Disposal Golf County County - Internal - District Course Utilities Building Total Service Funds ASSETS - Other deposits 1,000 - - Current assets: Unearned revenues 27,428 - Cash and cash equivalents $ 15,637,017 $ 31,532 $ 30,060,604 $ 4,010,287 $ 49,739,440 $ 28,940,595 Accounts receivable - net 64,286 - 2,775,948 - 2,840,234 1,376,792 Due from other funds 95,331 - - 118,147 95,331 - Due from other governments - 11,300 - - 11,300 80,895 Interest receivable 22,041 676 545,142 4,460 572,319 25,812 Inventories - 46,834 904,167 - 951,001 156,198 Prepaid items - - 33,333 9,989 33,333 1,144,119 Current restricted assets: Bonds payable - 520,000 2,990,000 Cash and cash equivalents 13,005,274 470,822 30,092,298 - 43,568,394 - Total current assets 28,823,949 561,164 64,411,492 4,014,747 97,811,352 31,724,411 Non-current assets: - Total current liabilities 687,433 648,136 11,215,402 85,137 Unamortized bond issuance costs - 59,595 518,010 - 577,605 - Deferred amounts on refundings - 160,823 3,290,249 37,879 3,451,072 57,502 Capital assets - non -depreciable 13,663,976 669,630 15,538,174 622,000 29,871,780 - Capital assets - depreciable 26,648,557 8,344,069 392,131,045 427,936 427,551,607 939,955 Capital assets - accumulated depreciation (10,371,948) (1,930,800) (168,619,963) (412,290) (181,335,001) (478,130) Non-current restricted assets: - Closure and maintenance costs payable 9,518,736 - - Special assessments receivable Bonds payable - net of unamortized discount/premium 1,568,428 2,627,614 1,568,428 Impact fees receivable - Total non-current liabilities 815,573 3,287,493 815,573 57,502 Liens receivable 5,572,905 Total liabilities 1,569,743 3,935,629 1,569,743 142,639 Total non-current assets 29,940,585 7,303,317 246,811,259 15,646 284,070,807 461,825 Total assets 58,764,534 7,864,481 311,222,751 4,030,393 381,882,159 32,186,236 LIABILITIES Current liabilities (payable from current assets) Accounts payable 445,966 51,007 780,081 40,255 1,317,309 127,649 Retainage payable - - 8,680 - 8,680 - Claims payable - - - - 2,351,622 Due to other governments 7,511 2,846,099 4,612 2,858,222 - Other deposits 1,000 - - 1,000 Unearned revenues 27,428 - 27,428 Pollution remediation payable - - 9,280 - 9,280 Accrued compensated absences 102,041 31,201 301,234 40,270 474,746 21,557 Total current liabilities (payable from current assets) 548,007 118,147 3,945,374 85,137 4,696,665 2,500,828 Current liabilities (payable from restricted assets) Accounts payable - - 1,511,711 - 1,511,711 - Retainage payable - 124,900 124,900 Accrued interest payable 9,989 193,710 203,699 Bonds payable - 520,000 2,990,000 3,510,000 Customer deposits 139,426 - 2,449,707 2,589,133 Total current liabilities (payable from restricted assets) 139,426 529,989 7,270,028 7,939,443 - Total current liabilities 687,433 648,136 11,215,402 85,137 12,636,108 2,500,828 Non-current liabilities: Accrued compensated absences 116,481 37,879 341,182 57,502 553,044 25,527 Advance from other funds - 622,000 - - 622,000 - Claims payable - - - 5,547,378 Pollution remediation payable - 32,320 32,320 - Closure and maintenance costs payable 9,518,736 - - 9,518,736 Bonds payable - net of unamortized discount/premium - 2,627,614 50,026,507 52,654,121 - Total non-current liabilities 9,635,217 3,287,493 50,400,009 57,502 63,380,221 5,572,905 Total liabilities 10,322,650 3,935,629 61,615,411 142,639 76,016,329 8,073,733 NET ASSETS Invested in capital assets, net of related debt Restricted for: Debt service Capital projects Unrestricted Total net assets 29,940,585 4,096,108 189,322,998 15,646 223,375,337 461,825 43,333 249,167 292,500 - - 27,605,792 - 27,605,792 - 18,501,299 (210,589) 32,429,383 3,872,108 54,592,201 23,650,678 $ 48,441,884 $ 3,928,852 $ 249,607,340 $ 3,887,754 $ 305,865,830 $ 24,112,503 The accompanying notes are an integral part of the financial statements. 33 Indian River County, Florida Statement of Revenues, Expenses, and Changes in Fund Net Assets Proprietary Funds For the Year Ended September 30, 2010 OPERATING REVENUES Charges for services Charges for services pledged as security for revenue bonds Total operating revenues OPERATING EXPENSES Personal services Material, supplies, services and other operating Depreciation Total operating expenses Operating income (loss) NONOPERATING REVENUES (EXPENSES) Interest income Interest income pledged as security for revenue bonds Gain on disposal of equipment Interest expense Bond amortization expense Loss on disposal of equipment Total nonoperating revenues (expenses) Income (loss) before transfers and capital contributions Special item Capital contributions Transfers in Change in net assets Total net assets - beginning Total net assets - ending Business -type Activities - Solid Waste Disposal Golf District Course $ 8,972,136 $ - - 3,148,029 8,972,136 3,148,029 2,787,852 613,212 6,743,624 1,780,752 1,147,477 144,286 10,678,953 2,538,250 (1,706,817) 609,779 439,057 - - 9,491 56,997 905 - (133,889) (41,505) (5,031) (1,963) 491,023 (166,961) (1,215,794) 442,818 - 28,068 (1,215,794) 470,886 49,657,678 3,457,966 48,441,884 $ 3,928,852 The accompanying notes are an integral part of the financial statements. 34 Enterprise Funds Governmental Activities County County (5,551,600) Internal Utilities Building Total Service Funds $ 249,607,340 $ 3,887,754 $ 305,865,830 $ $ - $ 1,612,870 $ 10,585,006 $ 23,517,281 27,738,920 - 30,886,949 - 27,738,920 1,612,870 41,471,955 23,517,281 7,877,126 1,305,686 12,583,876 2,093,056 9,264,918 512,139 18,301,433 18,090,778 14,370,299 40,528 15,702,590 168,514 31,512,343 1,858,353 46,587,899 20,352,348 (3,773,423) (245,483) (5,115,944) 3,164,933 - 38,188 477,245 247,123 686,776 - 696,267 - 2,340 9,939 70,181 350 (2,314,809) - (2,448,698) - (241,860) - (283,365) - (13,804) (2,170) (22,968) (473) (1,881,357) 45,957 (1,511,338) 247,000 (5,654,780) (199,526) (6,627,282) 3,411,933 (665,460) - (665,460) - 1,713,074 - 1,741,142 - - - - 55,017 (4,607,166) (199,526) (5,551,600) 3,466,950 254,214,506 4,087,280 311,417,430 20,645,553 $ 249,607,340 $ 3,887,754 $ 305,865,830 $ 24,112,503 35 Indian River County, Florida Statement of Cash Flows Proprietary Funds For the Year Ended September 30, 2010 CASH FLOWS FROM OPERATING ACTIVITIES Cash received from customers Cash paid to suppliers for goods and services Cash paid to employees for services Net cash provided by (used in) operating activities CASH FLOWS FROM NONCAPITAL FINANCING ACTIVITIES Transfers Operating grants Payments for advances from other funds Net cash provided by (used in) noncapital financing activities CASH FLOWS FROM CAPITAL AND RELATED FINANCING ACTIVITIES Principal payments - bonds/notes Interest paid on long-term debt Proceeds from sales of capital assets Purchase of capital assets Bond paying agent fees Capital contributed by others Net cash provided by (used in) capital and related financing activities CASH FLOWS FROM INVESTING ACTIVITIES Interest and dividends on investments Net cash provided by investing activities Net increase (decrease) in cash and cash equivalents Cash and cash equivalents at beginning of year Cash and cash equivalents at end of year Classified as: Current assets Restricted assets Totals (2,173,709) 21,363 30,816,000 480,991 $ 28,642,291 $ 502,354 $ 15,637,017 $ 31,532 13,005,274 470,822 $ 28,642,291 $ 502,354 The accompanying notes are an integral part of the financial statements. Business -type Solid Waste Disposal Golf District Course $ 9,001,629 $ 3,137,467 (8,972,320) (1,797,905) (2,809,979) (621,115) (2,780,670) 718,447 877,897 - - (60,000) 877,897 (60,000) - (510,000) - (135,163) 56,997 905 (826,939) (3,788) (769,942) (648,046) 499,006 10,962 499,006 10,962 (2,173,709) 21,363 30,816,000 480,991 $ 28,642,291 $ 502,354 $ 15,637,017 $ 31,532 13,005,274 470,822 $ 28,642,291 $ 502,354 The accompanying notes are an integral part of the financial statements. Activities - Enterprise Funds Governmental Activities County County Internal Utilities Building Total Service Funds $ 27,617,542 $ 1,612,870 $ 41,369,508 $ 23,305,553 (9,983,038) (512,613) (21,265,876) (18,317,543) (7,872,809) (1,317,737) (12,621,640) (2,086,711) 9,761,695 (217,480) 7,481,992 2,901,299 - - - 55,017 271 - 878,168 - - - (60,000) - 271 - 818,168 55,017 (2,870,000) - (3,380,000) - (2,510,976) - (2,646,139) - 2,340 11,499 71,741 350 (7,296,912) - (8,127,639) (1,152) (1,722) - (1,722) - 1,547,261 - 1,547,261 - (11,130,009) 11,499 (12,536,498) (802) 767,002 44,613 1,321,583 273,743 767,002 44,613 1,321,583 273,743 (601,041) (161,368) (2,914,755) 3,229,257 60,753,943 4,171,655 96,222,589 25,711,338 $ 60,152,902 $ 4,010,287 $ 93,307,834 $ 28,940,595 $ 30,060,604 $ 4,010,287 $ 49,739,440 $ 28,940,595 30,092,298 - 43,568,394 - $ 60,152,902 $ 4,010,287 $ 93,307,834 $ 28,940,595 Continued 37 Indian River County, Florida Statement of Cash Flows Proprietary Funds For the Year Ended September 30, 2010 Business-tvpe Activities - Solid Waste Disposal Golf District Course RECONCILIATION OF OPERATING INCOME (LOSS) TO NET CASH PROVIDED BY (USED IN) OPERATING ACTIVITIES Operating income (loss) $ (1,706,817) $ 609,779 Adjustments to reconcile operating income to net cash provided by (used in) operating activities: Work in progress reclassified as expense Depreciation 1,147,477 144,286 Capitalized self -incurred expenses - - (Increase) Decrease in assets: Accounts receivable 50,120 - Due from other funds 2,884 - Due from other governments 1,229 400 Inventories - (2,265) Liens receivable - - Impact fees receivable - - Special assessments receivable - - Prepaid expenses 1,000 - Increase (Decrease) in liabilities: Accounts payable (1,320,457) (13,722) Due to other governments - (1,166) Retainage payable - - Customer deposits (24,740) (1,000) Closure and maintenance costs payable (909,239) - Pollution remediation costs payable - - Unearned revenues - (9,962) Claims payable - - Accrued compensated absences (22,127) (7,903) Total adjustments (1,073,853) 108,668 Net cash provided by (used in) operating activities $ (2,780,670) $ 718,447 NONCASH CAPITAL AND RELATED FINANCING ACTIVITIES Change in fair value of investments $ (36,859) $ (1,131) Contributed property, infrastructure and equipment $ - $ 28,068 Capital assets purchased through accounts payable $ 18,072 $ - The accompanying notes are an integral part of the financial statements. 38 Enterprise Funds County Utilities County Building Total Governmental Activities Internal Service Funds $ (3,773,423) $ (245,483) $ (5,115,944) $ 3,164,933 (401,903) - (401,903) - 14,370,299 40,528 15,702,590 168,514 (7,700) - (7,700) - (265,158) - (215,038) (227,497) - - 2,884 - - - 1,629 15,769 75,736 - 73,471 (34,269) (343,401) - (343,401) - 59,212 - 59,212 - 550,314 - 550,314 - (32,243) - (31,243) (134,091) (384,565) (301) (1,719,045) (82,405) 18,575 (173) 17,236 - 8,680 - 8,680 - (122,345) - (148,085) - - - (909,239) - (2,400) - (2,400) - - - (9,962) - - - - 24,000 12,017 (12,051) (30,064) 6,345 13,535,118 28,003 12,597,936 (263,634) $ 9,761,695 $ (217,480) $ 7,481,992 $ 2,901,299 $ (102,853) $ (7,457) $ (148,300) $ (43,163) $ 165,813 $ - $ 193,881 $ - $ 985,550 $ - $ 1,003,622 $ - 39 Indian River County, Florida Statement of Fiduciary Net Assets Fiduciary Funds September 30, 2010 ASSETS Cash and cash equivalents Investments, at fair value: Surplus Funds Trust Fund - Fund B Index funds U.S. government securities funds Prime money market fund Total assets LIABILITIES Accounts payable Benefits payable Due to other governments Other deposits held in escrow Total liabilities NET ASSETS Assets held in trust for other postemployment benefits Total net assets Agency $ 14,599,180 $ 91,189 $ 14,690,369 $ 461,889 5,483,574 8,744,906 $ 14,690,369 Other Postemployment Benefits Trust 301 2,912,340 3,682,881 317,913 6,913,435 1,323,971 1,323,971 5,589,464 $ 5,589,464 The accompanying notes are an integral part of the financial statements. M Indian River County, Florida Statement of Changes in Fiduciary Net Assets Other Postemployment Benefits Trust Fund For the Year Ended September 30, 2010 ADDITIONS Employer contributions $ 2,810,092 Investment income 415,361 Investment expense (2,610) Total additions 3,222,843 DEDUCTIONS Benefits paid to participants 1,323,971 Total deductions 1,323,971 Change in net assets 1,898,872 Net assets - beginning 3,690,592 Net assets - ending $ 5,589,464 The accompanying notes are an integral part of the financial statements. 41 �AR 42 Indian River County, Florida Notes To Financial Statements Year Ended September 30, 2010 Note Page Note Page 1. Summary of Significant Accounting 10. Interfund Transfers .............................. 71 Policies..................................................44 11. Due from Other Governments .............. 72 Reporting Entity.................................44 12. Accounts Payable ................................. 73 Measurement Focus and 13. Long-term Liabilities ............................ 74 Basis of Accounting ..................... 45 Changes in Long-term Liabilities......... 74 Basis of Presentation ..........................49 Governmental Activities....................... 75 Assets, Liabilities and Net Assets Annual Debt Service Payments — or Equity.......................................50 Governmental Activities.............. 75 Cash and Cash Equivalents.............50 Limited General Obligation Bonds 76 Investments.....................................51 General Obligation Bonds .............. 76 Allowance for Doubtful Accounts ..51 Spring Training Facility Revenue Receivables and Payables ...............51 Bonds........................................... 77 Inventories.......................................51 Business -type Activities 80 Prepaid Items..................................51 Annual Debt Service Payments — Other Assets Held For Resale .........52 Business -type Activities .............. 80 Restricted Assets .............................52 Recreational Revenue Refunding Capital Assets..................................52 Bonds, Series 2003 ...................... 80 Capitalization of Interest.................53 Water and Sewer Revenue Unearned Revenues ........................53 Bonds, Series 1993A ................... 81 Accrued Compensated Absences .... 53 Water and Sewer Revenue Refunding Obligation for Bond Arbitrage Bonds, Series 2005 ...................... 83 Rebate..........................................54 Water and Sewer Revenue Refunding Landfill Closure Costs ....................54 Bonds, Series 2009...................... 84 Unamortized Bond Costs ................54 Summary of Defeased Debt Unamortized Bond Discounts Outstanding ....................................... 85 and Premiums...............................54 Compensated Absences 85 Capital Contributions ......................54 Conduit Debt Obligations..................... 85 New Accounting Pronouncements.. 54 14. Provision for Closure Costs .................. 86 2. Reconciliation of Government -wide 15. Pollution Remediation .......................... 87 and Fund Financial Statements ..........55 16. Pension Plans - 3. Stewardship, Compliance and Florida Retirement System ................ 88 Accountability....................................59 17. Other Postemployment Benefits Plan... 90 Budget and Budgetary Accounting.59 18. Operating Leases .................................. 93 4. Cash and Cash Equivalents ................... 60 19. Fund Balance ........................................ 94 Deposits...........................................60 20. Fund Balance Deficit............................ 95 Accrued Interest..............................60 21. Net Assets ............................................. 96 Investments.....................................60 22. Risk Management................................. 97 OPEB Trust Investments.................63 23. Commitments and Contingencies......... 98 5. Property Tax Revenues .........................64 Litigation ........................................... 98 6. Capital Assets........................................65 Contracts and Other Special Item....................................68 Commitments... ...... 98 7. Restricted Cash and Cash Equivalents Grants ................................................ 99 and Investments.................................68 24. Subsequent Events................................ 99 8. Payable from Restricted Assets ............69 9. Interfund Balances................................70 43 Indian River County, Florida Notes To Financial Statements Year Ended September 30, 2010 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 141,198. 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 and the Emergency Services District were the only organizations that should be included in the County's financial statements as component units. Indian River County, Florida Notes To Financial Statements Year Ended September 30, 2010 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. Component Unit In previous years the, Indian River County Housing Authority (IRCHA), created pursuant to Chapter 421, Florida Statutes, was included in the government -wide financial statements of the County as a discretely presented component unit. The IRCHA financial statements were not completed prior to the issuance of the County's Comprehensive Annual Financial Report (CAFR) and are considered immaterial to the County as a whole. Consequently, the financial statements of the IRCHA are not included in the government -wide financial statements and notes. See Note 24, Subsequent Events, for the County's action with respect to this unit. Further information on the IRCHA financial statements should be addressed to the administrative office located at 1028 20th 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 W Indian River County, Florida Notes To Financial Statements Year Ended September 30, 2010 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 an expenditure. As a general 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. we Indian River County, Florida Notes To Financial Statements Year Ended September 30, 2010 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 nomnajor 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. M Indian River County, Florida Notes To Financial Statements Year Ended September 30, 2010 NOTE 1 - SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES — Continued B. Measurement Focus and Basis of Accounting - Continued 2. Fund Financial Statements - Continued Governmental Funds — Continued Amounts expended to acquire capital assets are recorded as expenditures in the year that resources were 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 County 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. W. Indian River County, Florida Notes To Financial Statements Year Ended September 30, 2010 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. E Indian River County, Florida Notes To Financial Statements Year Ended September 30, 2010 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. 50 Indian River County, Florida Notes To Financial Statements Year Ended September 30, 2010 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, 2010, 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, 2010. 4. Receivables and Payables Activities between funds that are representative of lendingiborrowing 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 inventory which is valued using the moving 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. 51 Indian River County, Florida Notes To Financial Statements Year Ended September 30, 2010 NOTE 1— SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES — Continued D. Assets, Liabilities, and Net Assets or Equity - Continued 7. Other Assets Held For Resale This account represents assets the County has purchased with the intent to resell. In fiscal year 2009, the County was allocated $4.6 million from the U.S. Department of Housing and Urban Development's Neighborhood Stabilization Program under a Community Development Block Grant. This funding was to be used by local governments for acquiring, redeveloping, and reselling foreclosed properties that might otherwise become sources of abandonment within their communities. The County purchased sixteen homes under this program and intends to resell them within the next fiscal year. They are reported at the lower of cost or market value on the balance sheet of the County's governmental funds. 8. 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 21. 9. 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. Transfers of capital assets within the County are recorded at their carrying value at the time of the transfer. 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. 52 Indian River County, Florida Notes To Financial Statements Year Ended September 30, 2010 NOTE 1— SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES — Continued D. Assets, Liabilities, and Net Assets or Equity - Continued 9. Capital Assets - Continued 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. 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 Years Building and improvements 10-50 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 10. 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. 11. 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, 2010, the total amount of deferred revenues reported on the governmental funds balance sheet is $1,422,426; $592,445 is available, but unearned, and $829,981 is earned but not available. 12. 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. 53 Indian River County, Florida Notes To Financial Statements Year Ended September 30, 2010 NOTE 1— SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES — Continued D. Assets, Liabilities, and Net Assets or Equity - Continued 13. 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 uses 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, 2010. 14. 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. 15. 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. 16. 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. 17. 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. 18. New Accounting Pronouncements Effective October 1, 2009, the County implemented the provisions of GASB Statement No. 54 Fund Balance Reporting and Governmental Fund Type Definitions. See Note 19 for further information on Fund Balance. 54 Indian River County, Florida Notes To Financial Statements Year Ended September 30, 2010 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, $201,984,018, differs from "net assets" of governmental activities, $698,982,935, 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 $ 731,725,044 Accumulated depreciation (195,150,968) Net Total 536.574.076 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, 2010 were: Bonds payable: General Obligation Bonds, Series 2001 $ (5,210,000) Limited General Obligation Bonds, Series 2006 (38,270,000) Spring Training Facility Bonds, Series 2001 (12,310,000) Bond premium payable: Limited General Obligation Bonds, Series 2006 (1,002,163) Pollution remediation payable (2,498,200) Compensated absences (10,151,576) Total (69.441.939) 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 Bonds, Series 2001, and Limited General Obligation Bonds, Series 2006. 485 167 55 Indian River County, Florida Notes To Financial Statements Year Ended September 30, 2010 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 assessments 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 Internal service funds Internal service funds are used by managemen activities, and GIS services to individual funds. are included in governmental activities in the governmental activities of the County. Internal service funds Accrued grant revenues 925 573 t to charge the costs of fleet management, insurance The assets and liabilities of the internal service funds statement of net assets because they primarily serve 24,112,503 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. Accrued grant revenues 4.692,747 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. Accrued interest revenues Net OPEB Obligation 301 394 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 319 730 Elimination of interfund receivables/payables Interfiand receivables and payables in the amount of $1,457,540 between governmental funds must be eliminated for the statement of net assets. 56 Indian River County, Florida Notes To Financial Statements Year Ended September 30, 2010 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, $1,514,784, differs from the "change in net assets" for governmental activities, $23,253,316 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 $ 29,084,405 Depreciation expense (17,989,825) Transfers to business -type activities (28,068) Capital contributions 2,801,077 Loss on assets (574,088) Difference 13,293,501 Long-term debt transactions Payments of bond principal, bond premium, and pollution remediation costs are reported as an expenditure in the governmental funds and, thus, have the effect of reducing fund balance because current financial 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 $ 5,315,000 Bond premium payments made 93,224 Pollution remediation payments made 46,100 Total S 5.454.324 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 $ 215,850 Net accrued bond interest payable 43,716 Total $ 259,566 57 Indian River County, Florida Notes To Financial Statements Year Ended September 30, 2010 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 103 824 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 (78,84=2) 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 gain $3,466,950 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 (532,U6) 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 (228.635) Reclassification and Eliminations The governmental funds recognize revenues in the amount of $2,644,364 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 $17,001,997 between governmental activities should be eliminated. Capital projects costs in the amount of $7,487,068 must be distributed to the related expenditure functions. W. Indian River County, Florida Notes To Financial Statements Year Ended September 30, 2010 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 one nonmajor governmental fund, the Supervisor of Elections Special Revenue Fund. 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. 59 Indian River County, Florida Notes To Financial Statements Year Ended September 30, 2010 NOTE 4 - CASH AND CASH EQUIVALENTS The County 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, 2010, the carrying amount of the primary government's deposits was $27,363,553 and the bank balance was $30,415,975. 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 Deposits 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. 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, 2010, accrued interest for the County's portfolio totaled $536,746. 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, and revised the policy November 2009. •1 Indian River County, Florida Notes To Financial Statements Year Ended September 30, 2010 NOTE 4 - CASH AND CASH EQUIVALENTS - Continued C. Investments - Continued As of September 30, 2010, the County had the following investments: Weighted Average Maturity Portfolio Credit Investment Type Fair Value InYears Percentage Risks Fixed Rate Debt Instruments: U.S. Treasuries $ 53,081,837 0.97 18.12 % N/A U.S. Agencies:** Federal Farm Credit Bureau 35,318,202 1.53 12.06 AAA Federal Home Loan Bank 42,153,036 1.33 14.39 AAA Federal Home Loan Mortgage 42,056,848 1.07 14.36 AAA Federal National Mortgage Assoc. 56,067,956 0.93 19.14 AAA Other Fixed Rate Investments: Florida Prime (Formerly Fund A) 115,800 0.08 0.04 AAAm Fund B Surplus Funds Trust Fund 652,174 7.49 0.21 Not Rated Florida Local Government AAAf and Investment Trust Fund 9,466,618 0.08 3.23 S-1* Other Market Rate Investments: Regions Bank Money Market 13,038,942 0.08 4.45 N/A Suntrust Bank NOW Account 13,544,608 0.08 4.62 N/A Dreyfus Gov't Cash Fund 1,493,714 0.08 0.51 Aaa Morgan Stanley Gov't Securities 1,013,688 0.08 0.35 Aaa Florida Trust Day to Day Fund 19,035,616 0.08 6.50 AAAm Certificate of Deposit 250,000 0.50 0.09 N/A Certificate of Deposit 250,000 1.00 0.09 N/A Fidelity American US Treas. Fund 3,064 0.08 0.00 AAA W&S Sinking Fund Reserve: Treasury Bill 2,698,271 0.21 0.92 N/A Federal Home Loan Bank 2,681,104 1.15 0.92 AAA Fidelity Institutional Money Market 4,613 0.08 0.00 Aaa Total Fair Value $ 292,926,091 100.00 % 0.93 * 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). 61 Indian River County, Florida Notes To Financial Statements Year Ended September 30, 2010 NOTE 4 - CASH AND CASH EQUIVALENTS - Continued C. Investments - Continued Florida PRIME (formerly known as the Local Government Surplus Funds Trust 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, 2010, the County had $922,377 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 29.29% of the portfolio balance, or $270,203, was needed to represent the fair market value of the participation. Consequently, the net investment in Fund B is reported at $652,174. 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. 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; 62 Indian River County, Florida Notes To Financial Statements Year Ended September 30, 2010 NOTE 4 - CASH AND CASH EQUIVALENTS - Continued C. Investments - Continued Credit Risks - Continued Securities and Exchange Commission registered money market funds with the highest credit quality rating from a nationally recognized rating agency; 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 parry 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, 2010, 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: the SunTrust NOW account, the Regions Bank Money Market, CenterState Bank certificates of deposit, and the Florida Trust Day to Day Fund. 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, Bank of New York/Mellon. The investments are reported at fair value based upon market -close price on the last business day of each month. 63 Indian River County, Florida Notes To Financial Statements Year Ended September 30, 2010 NOTE 4 - CASH AND CASH EQUIVALENTS - Continued D. OPEB Trust Investments - Continued The Board approved a separate investment policy for the IRCOT assets on February 3, 2009 (amended 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 $3.03 million for the year ended September 30, 2010 was invested in the various funds listed below. As of September 30, 2010, the Indian River County OPEB Trust (IRCOT) had the following investments: Total Fair Value $ 6,913,134 NOTE 5 - PROPERTY TAX REVENUES 100.00 % 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 2009-2010 fiscal year were levied in October 2009. 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. 01 Weighted Average Maturity Portfolio Credit Investment Type Fair Value InYears Percentage Risks Short -Term Portion: Fidelity Treasury Money Market $ 1,197,455 0.14 17.32 % Aaa Long -Term Portion: Vanguard 500 Index 1,279,203 N/A 18.50 N/A Vanguard All World Ex -US 1,183,553 N/A 17.12 N/A Vanguard Mid Cap Index 299,878 N/A 4.34 N/A Vanguard Small Cap Index 149,706 N/A 2.17 N/A Vanguard Short Term Treasury 1,366,538 2.30 19.77 Aaa Vanguard Intermediate Treasury 913,378 5.80 13.21 Aaa Vanguard Prime Money Market 317,913 0.15 4.60 A-1 Vanguard Federal Money Market 205,510 0.15 2.97 A-1 Total Fair Value $ 6,913,134 NOTE 5 - PROPERTY TAX REVENUES 100.00 % 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 2009-2010 fiscal year were levied in October 2009. 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. 01 Indian River County, Florida Notes To Financial Statements Year Ended September 30, 2010 NOTE 6 - CAPITAL ASSETS A. Governmental Activities Primary Government Governmental activities: Capital assets, not being depreciated: Land Construction in progress Right-of-way Intangibles Infrastructure Total capital assets, not being depreciated Capital assets, being depreciated: Beginning 176,701,657 Balance Additions $ 138,267,881 $ 721,639$ 48, 989, 767 19,093,043 42,988,559 6,000,838 339,508 214,948 3,575,067 - 234,160,782 26,030,468 Ending Deletions Balance (575,961) $ 138,413,559 (24,374,642) 43,708,168 48,989,397 554,456 3,575,067 (24,950,603) 235,240,647 Buildings and improvements 176,701,657 9,739,968 (8,560) 186,433,065 Equipment 55,337,250 6,695,599 (5,503,966) 56,528,883 Intangibles 2,452,958 146,997 - 2,599,955 Infrastructure 236,579,933 15,282,516 - 251,862,449 Total capital assets, being depreciated 471,071,798 31,865,080 (5,512,526) 497,424,352 Less accumulated depreciation for: Buildings and improvements Equipment Intangibles Infrastructure Total accumulated depreciation (28,776,280) (4,935,862) (30,260,124) (4,717,951) (436,670) (364,124) (121,849,271) (8,214,074) (181,322,345) (18,232,011) 5,959 (33,706,183) 3,919,299 (31,058,776) - (800,794) - (130,063,345) 3,925,258 (195,629,098) Total capital assets, being depreciated, net 289,749,453 13,633,069 (1,587,268) 301,795,254 Governmental activities capital assets, net $ 523,910,235 $ 39,663,537 $ (26,537,871) $ 537,035,901 65 Indian River County, Florida Notes To Financial Statements Year Ended September 30, 2010 NOTE 6 - CAPITAL ASSETS — Continued A. Governmental Activities - Continued Depreciation expense, which includes amortization expense on intangible assets, was charged to the functions/programs of the primary government's governmental activities as follows: General government Public safety Physical environment Transportation Economic environment Human service Culture/recreation Court related Capital assets held by the government's internal service funds are charged to the various functions based on their usage of the assets Total depreciation expense — governmental activities $ 3,674,704 2,734,017 359,782 5,880,199 2,686 137,467 5,148,030 126,612 168,514 18.232.011 Indian River County, Florida Notes To Financial Statements Year Ended September 30, 2010 NOTE 6 - CAPITAL ASSETS — Continued B. Business -type Activities Primary Government Business -type activities: Capital assets, not being depreciated: Beginning Ending Balance Additions Deletions Balance Land $ 19,277,925 $ 34,475$ - $ 19,312,400 Intangibles 494,035 794,375 - 1,288,410 Construction in progress 38,980,527 6,773,870 (36,483,427) 9,270,970 Total capital assets, not being depreciated 58,752,487 7,602,720 (36,483,427) 29,871,780 Capital assets, being depreciated: Buildings, distribution systems, & improvements 370,893,954 38,118,204 (657,145) 408,355,013 Intangibles 382,382 19,751 - 402,133 Equipment 19,966,023 337,060 (1,508,622) 18,794,461 Total capital assets, being depreciated 391,242,359 38,475,015 (2,165,767) 427,551,607 Less accumulated depreciation for: Buildings, distribution systems, & improvements (151,332,940) (14,164,368) 10,678 (165,486,630) Intangibles (325,942) (75,180) - (401,122) Equipment (15,286,526) (1,463,042) 1,302,319 (15,447,249) Total accumulated depreciation (166,945,408) (15,702,590) 1,312,997 (181,335,001) Total capital assets, being depreciated, net 224,296,951 22,772,425 (852,770) 246,216,606 Business -type activities capital assets, net $ 283,049,438 $ 30,375,145 $ (37,336,197) $ 276,088,386 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 Golf Course County Utilities County Building Total depreciation expense — business -type activities 67 $ 1,147,477 144,286 14,370,299 40,528 15.702.590 Indian River County, Florida Notes To Financial Statements Year Ended September 30, 2010 NOTE 6 - CAPITAL ASSETS — Continued C. Special Item In fiscal year 2010, the Utilities proprietary fund constructed a new sludge facility. The County's existing sludge facility was not fully depreciated at the completion of the new facility, and County staff determined that a portion of the facility would continue to be utilized for other County needs. The portion that was abandoned resulted in the calculation of an impairment loss in accordance with GASB Statement 42 Accounting and Financial Reporting for Impairment of Capital Assets and for Insurance Recoveries. This loss resulted in a write down in value of $665,460 of the existing asset and is presented as a special item on the Statement of Revenues, Expenses, and Changes in Fund Net Assets for the Proprietary Funds. 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: Primary Government Solid Waste Cash totaling $14,006,587 is reported as restricted on the Statement of Net Assets for governmental activities. Of that amount, $6,006,587 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. •: Disposal Golf County District Course Utilities Total Sinking funds $ - $ 470,822 $ 6,130,700 $ 6,601,522 Renewal and replacement 3,347,112 - 3,485,928 6,833,040 Customer deposits 139,426 - 2,449,707 2,589,133 Capital construction - - 18,025,963 18,025,963 Closure and maintenance costs 9,518,736 - - 9,518,736 Total $ 13,005,274 $ 470,822 $ 30,092,298 $ 43,568,394 Cash totaling $14,006,587 is reported as restricted on the Statement of Net Assets for governmental activities. Of that amount, $6,006,587 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. •: Indian River County, Florida Notes To Financial Statements Year Ended September 30, 2010 NOTE 8 - PAYABLE FROM RESTRICTED ASSETS Liabilities payable from the County's business -type activities restricted assets are as follows: •' Primary Government Solid Waste Disposal Golf County District Course Utilities Total Accounts payable $ - $ - $ 1,511,711 $ 1,511,711 Retainage payable - - 124,900 124,900 Accrued interest payable - 9,989 193,710 203,699 Bonds payable (current) - 520,000 2,990,000 3,510,000 Closure and maintenance costs payable 9,518,736 - - 9,518,736 Customer deposits 139,426 - 2,449,707 2,589,133 Total $ 9,658,162 $ 529,989 $ 7,270,028 $ 17,458,179 •' Indian River County, Florida Notes To Financial Statements Year Ended September 30, 2010 NOTE 9 - INTERFUND BALANCES Interfund balances at September 30, 2040, consisted of the following: Receivable Fund General Fund Fund Nonmajor Governmental Funds: Amount Metropolitan Planning Organization Fund $ 66,000 CDBG Neighborhood Stabilization Program Fund 880,000 Federal/State Grants Fund 5,000 Disaster Recovery Grants Fund 25,500 Total: $ 976,500 Amounts due from the above funds represent short-term cash loans that will be repaid within the next twelve months. Receivable Fund Payable Fund Amount Major Governmental Fund: Emergency Services District Fund General Fund $ 300,837 Major Enterprise Fund: Solid Waste Disposal District Fund General Fund $ 95,331 Nonmajor Governmental Funds: Land Acquisition Bonds Fund General Fund $ 81,085 Street Lighting Districts Fund General Fund 2,485 Vero Lake Estates Fund General Fund 1,283 East Gifford Stormwater Fund General Fund 19 Total Nonmajor Governmental Funds $ 84,872 Total: $ 481,040 Amounts due from the General Fund represent excess fees and payments of the constitutional officers remitted to various funds subsequent to September 30, 2010. Interfund advance at September 30, 2010: Receivable Fund Payable Fund Amount Secondary Roads Construction Fund Golf Course Fund $ 622,000 This amount is considered a long-term advance between major funds expected to be paid over the course of several years. This amount has been presented as nonspendable on the Secondary Roads Construction Fund's Balance Sheet. 70 Indian River County, Florida Notes To Financial Statements Year Ended September 30, 2010 NOTE 10 - INTERFUND TRANSFERS Interfund transfers for the year ended September 30, 2010, consisted of the following: General Transportation Fund Fund Transfers Out: General Fund Emergency Services District Fund Optional Sales Tax Fund Nonmajor Governmental Funds 444,351 341,217 Transfers In: Nonmajor Governmental Internal Service Funds Fund Total $ 8,951,106 $ 181,361 $ 55,017 $ 9,187,484 - 444,351 6,000,000 - 6,000,000 1,083,962 - 1,425,179 Total $ 785,568 $ 8,951,106 $ 7,265,323 $ 55,017 $ 17,057,014 Transfers are used for the following routine 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, and 5) 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. One non -routine transfer occurred in the amount of $906,191 due to accumulated interest earnings that had to be transferred out of one nonmajor governmental fund, the SHIP Hurricane Housing Recovery Grant Fund, to be utilized in another nonmajor governmental fund, the State Housing Initiatives Partnership Fund, as per State requirements. 71 Indian River County, Florida Notes To Financial Statements Year Ended September 30, 2010 NOTE 11— DUE FROM OTHER GOVERNMENTS Governmental Funds 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-laning 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. Secondary Roads Optional Sales Construction Fund Tax Fund Segment One Amount Advance Funded $ Segment Two Amount Advance Funded Less: Reimbursements received as of 9/30/2010 Balance Due from FDOT Balance Due from other governments Total Due from other governments 15,888,908 $ 7,944,454 (9,930,567) 5,958,341 436,461 $ 6,394,802 72 14,429,754 (4,965,284) 17,408,924 1,998,740 $ 19,407,664 Indian River County, Florida Notes To Financial Statements Year Ended September 30, 2010 NOTE 12 — ACCOUNTS PAYABLE Payables Payables at September 30, 2010, were as follows: The County has not engaged in any short-term debt activity during fiscal year 2010 other than that listed in Note 9. Due To Other Governments — Utilities Fund On August 25, 2010, the County received notification from the State Division of Emergency Management that a repayment of $2,827,524 may be due to the Federal Emergency Management Agency (FEMA) for disallowed costs related to a sewer project. The County has appealed FEMA's decision. As of September 30, 2010, the County recorded these costs as a liability, Due to Other Governments, in the Utilities proprietary fund while awaiting FEMA's response to the appeal. 73 Salaries and Total Governmental Activities: Vendors Benefits Payables General $ 1,429,321 $ 1,790,270 $ 3,219,591 Impact Fees 980,402 2,938 983,340 Secondary Roads Construction 635,404 8,139 643,543 Transportation 204,966 222,802 427,768 Emergency Services 218,783 682,108 900,891 Optional Sales Tax 1,415,584 - 1,415,584 Other governmental 1,065,347 67,715 1,133,062 Total Governmental Activities 5.949,807 $2,773,972 8,723,779 Business -Type Activities Payable from current assets: Solid Waste $ 370,812 $ 75,154 $ 445,966 Golf Course 32,034 18,973 51,007 Utilities 530,784 249,297 780,081 Building 2,414 37,841 40,255 Payable from restricted assets: Utilities 1,511,711 - 1,511,711 Total Business -Type Activities 2,447,755 $ 381,265 2,829,020 The County has not engaged in any short-term debt activity during fiscal year 2010 other than that listed in Note 9. Due To Other Governments — Utilities Fund On August 25, 2010, the County received notification from the State Division of Emergency Management that a repayment of $2,827,524 may be due to the Federal Emergency Management Agency (FEMA) for disallowed costs related to a sewer project. The County has appealed FEMA's decision. As of September 30, 2010, the County recorded these costs as a liability, Due to Other Governments, in the Utilities proprietary fund while awaiting FEMA's response to the appeal. 73 Indian River County, Florida Notes To Financial Statements Year Ended September 30, 2010 NOTE 13 - LONG-TERM LIABILITIES A. Changes in Long-term Liabilities Long-term liability activity for the year ended September 30, 2010, was as follows: Governmental Activities: Bonds payable: Limited General Obligation Bonds - Series 2006 General Obligation Bonds — Series 2001 Spring Training Facility Revenue Bonds - Series 2001 General Obligation Refunding Bonds - Series 2003 Subtotal Add: Unamortized bonds premium Total bonds payable Other liabilities: Pollution remediation Claims payable Compensated absences Total other liabilities Governmental activities long-term liabilities Business -type Activities: Bonds payable: Recreational Refunding Revenue Bonds - Series 2003 Water & Sewer Refunding Revenue Bonds - Series 1993A Series 2005 Series 2009 Subtotal Add: Unamortized bonds premium Less: Unamortized bonds discount Total bonds payable Other liabilities: Landfill closure and maintenance costs Pollution remediation Compensated absences Total other liabilities Business -type activities long-term liabilities $ 3,685,000 $ $ 510,000 $ 3,175,000 $ Due Beginning 1,475,000 Ending Within Balance Additions Retirements Balance One Year 26,370,000 $ 41,045,000 $ $ 2,775,000 $ 38,270,000 $ 2,885,000 5,955,000 3,380,000 745,000 5,210,000 780,000 12,895,000 236,906 585,000 12,310,000 605,000 1,210,000 4,629 1,210,000 - - 61,105,000 3,612,277 5,315,000 55,790,000 4,270,000 1,095,387 10,427,975 93,224 1,002,163 - 62,200,387 44,000 5,408,224 56,792,163 4,270,000 9,280 2,544,300 816,333 46,100 2,498,200 255,240 7,875,000 13,940,099 13,916,099 7,899,000 2,351,622 10,296,139 6,589,835 6,687,314 10,198,660 5,365,983 20,715,439 20,529,934 20,649,513 20,595,860 7,972,845 $ 82,915,826 $ 20,529,934 $ 26,057,737 $ 77,388,023 $ 12,242,845 $ 3,685,000 $ $ 510,000 $ 3,175,000 $ 520,000 3,030,000 1,475,000 1,555,000 1,555,000 23,320,000 1,395,000 21,925,000 1,435,000 26,370,000 - 26,370,000 - 56,405,000 3,380,000 53,025,000 3,510,000 3,403,413 236,906 3,166,507 - 32,015 4,629 27,386 - 59,776,398 3,612,277 56,164,121 3,510,000 10,427,975 495,402 1,404,641 9,518,736 - 44,000 - 2,400 41,600 9,280 1,057,854 816,333 846,397 1,027,790 474,746 11,529,829 1,311,735 2,253,438 10,588,126 484,026 $ 71,306,227 $ 1,311,735 $ 5,865,715 $ 66,752,247 $ 3,994,026 74 Indian River County, Florida Notes To Financial Statements Year Ended September 30, 2010 NOTE 13 - LONG-TERM LIABILITIES - Continued B. Primary Government Governmental Activities Annual Debt Service Payments - Governmental Activities The annual debt service payments for bonds outstanding at September 30, 2010, are as follows: Fiscal Year Limited General Ending Obligation Bonds September 30 Series 2006 2011 2012 2013 2014 2015 2016-2020 2021-2025 2026-2030 2031 Total Less: Current portion Add: Unamortized bond premium Total General Obligation Spring Training Facility Refunding Bonds Revenue Bonds Series 2001 Series 2001 Principal Interest Principal Interest Principal Interest $ 2,885,000 $1,727,663 $ 780,000 $ 213,008 $ 605,000 $ 618,833 3,000,000 1,612,263 810,000 183,368 630,000 593,423 3,120,000 1,492,263 845,000 151,778 655,000 566,333 3,255,000 1,367,463 885,000 117,978 685,000 537,513 3,390,000 1,204,713 925,000 80,808 725,000 501,550 19,515,000 3,571,013 965,000 41,495 4,215,000 1,897,700 3,105,000 131,963 - - 2,300,000 910,450 - - - - 2,060,000 427,750 435,000 21,750 38,270,000 11,107,341 5,210,000 788,435 12,310,000 6,075,302 2,885,000 - 780,000 - 605,000 - 1,002,163 - - - - - $ 36,387,163 $ 11,107,341 $ 4,430,000 $788,435 $ 11,705,000 $6,075,302 75 Indian River County, Florida Notes To Financial Statements Year Ended September 30, 2010 NOTE 13 - LONG-TERM LIABILITIES - Continued B. Primary Government - Continued 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. Pledge of revenues — The principal and interest on the bonds are payable from ad valorem taxes not exceeding %2 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, 2010, Limited General Obligation Bonds consisted of the following: Interest Rates and Outstanding at September 30, Description Date Maturity Issue 2010 Limited General Obligation 4.00%-5.00% Bonds, Series 2006 1/1 and 7/1 2021 $ 48,600,000 S 38,270,000 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 Obligation 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. 76 Indian River County, Florida Notes To Financial Statements Year Ended September 30, 2010 NOTE 13 - LONG-TERM LIABILITIES - Continued B. Primary Government - Continued General Obligation Bonds - Continued 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. Bonds Issued - At September 30, 2010, General Obligation Bonds consisted of the following: Description General Obligation Bonds, Series 2001 General Obligation Refunding Bonds, Series 2003 Interest Outstanding at Rates and September 30, Date Maturity Issue 2010 2.50%-4.30% 1/1 and 7/1 2016 $ 11.000.000 $5,210,000 1.50%-3.00% 1/1 and 7/1 2010 $7,800,000 S - 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 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 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. 77 Indian River County, Florida Notes To Financial Statements Year Ended September 30, 2010 NOTE 13 - LONG-TERM LIABILITIES - Continued A. Primary Government - Continued Spring TrainingFacility Revenue Bonds - Continued 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 are collectively referred to herein as the "pledged revenues". These revenue streams are pledged for the remaining term of the bonds. 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 $1,227,633 represent eighteen percent of total pledged revenues. All three revenue sources totaled $6,790,576 for the current fiscal year. The total principal and interest remaining to be paid on the bonds is $18,385,302. Bonds Issued - At September 30, 2010, Spring Training Facility Revenue Bonds consisted of the following: Interest Outstanding at Rates and September 30, Description Date Maturity Issue 2010 Spring Training Facility Revenue 3.30%-5.25% Bonds, Series 2001 4/1 and 10/1 2031 $ 16,810,000 12.310.000 Indian River County, Florida Notes To Financial Statements Year Ended September 30, 2010 NOTE 13 - LONG-TERM LIABILITIES - Continued B. Primary Government - Continued Spring TrainingFacility Revenue Bonds - Continued 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 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, 2010 NOTE 13 - LONG-TERM LIABILITIES - Continued B. Primary Government - Continued Business -type Activities Annual Debt Service Payments — Business -type Activities The annual debt service payments for bonds outstanding at September 30, 2010 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 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 600,000 39,881 - - 1,670,000 736,450 1,815,000 1,067,000 2016-2020 385,000 15,881 - - 9,675,000 2,344,500 10,525,000 3,880,000 2021-2025 - - - - 4,530,000 279,150 9,000,000 1,046,500 Total 3,175,000 424,115 1,555,000 85,525 21,925,000 6,933,950 26,370,000 10,870,500 Less: Current portion 520,000 - 1,555,000 - 1,435,000 - - - Unamortized bond discount 27,386 - - - - - - - Add: Unamortized bond premium - - - - 733,521 - 2,432,986 - Total $2,627,614 $424,115 $ - $ 85,525 $ 21,223,521 $6,933,950 $ 28,802,986 $10,870,500 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 Revenues - 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. 01 Indian River County, Florida Notes To Financial Statements Year Ended September 30, 2010 NOTE 13 - LONG-TERM LIABILITIES - Continued B. Primary Government - Continued Recreational (Golf Course) Revenue Refunding Bonds, Series 2003 - Continued The financial strength of our municipal bond insurer, AMBAC, was downgraded to Baal in the previous year. 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 $643,889 represent eighty-four percent of net revenues ($763,556) of the golf course. The total principal and interest remaining to be paid on the bonds is $3,599,115. All three pledged revenue sources totaled $1,695,118 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. Rate Covenant — Net revenues shall be sufficient to pay 100% of reserve and current year principal and interest requirements. Bonds Issued - At September 30, 2010, the revenue bonds consisted of the following: Description 2003 Recreational Revenue Refunding Bonds Less: Current Portion of bonds Unamortized Bond Discount Long -Term Portion of bonds Interest Rates and Date 2.00 — 4.125% 3/1 and 9/1 Maturi Issue 9/1/16 $ 6,455,000 Outstanding at September 30, 2010 $ 3,175,000 520,000 27,386 $ 2.627,614 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. 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. M. Indian River County, Florida Notes To Financial Statements Year Ended September 30, 2010 NOTE 13 - LONG-TERM LIABILITIES - Continued B. Primary Government - Continued Water and Sewer Revenue Bonds, Series 1993A - 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, and certain surcharges and special assessments. Annual principal and interest payments of $1,641,650 represent approximately thirteen percent of net revenues ($12,755,643) of the utility system. The total principal and interest remaining to be paid on the bonds is $1,640,525. Rate Covenant — Net revenues shall be sufficient to pay 100% of the reserve account requirement and 120% of the current year's principal and interest payment. Bonds Issued — At September 30, 2010 the revenue bonds consisted of the following: Outstanding at Interest Rates Original September 30, Description and Date Maturi Issue 2010 Water and Sewer 2.60-6.50% Revenue Bonds, 3/1 and 9/1 2024 $ 47,190,000 $ 1,555,000 Series 1993A Less: Current Portion of bonds 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 year was not included in the refunding and will be paid on the date listed below: Term Bonds due September 1, 2011 Date September 1, 2011 Principal Amount $ 1,555,000 M. Indian River County, Florida Notes To Financial Statements Year Ended September 30, 2010 NOTE 13 - LONG-TERM LIABILITIES - Continued B. Primary Government - Continued 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 $2,407,650 represent approximately nineteen percent of net revenues ($12,755,643) of the utility system. The total principal and interest remaining to be paid on the bonds is $28,858,950. Rate Covenant — Net revenues shall be sufficient to pay 100% of the reserve account requirement and 120% of the current year's principal and interest payment. Bonds Issued - At September 30, 2010, the revenue bonds consisted of the following: Interest Rates and Description Date Water and Sewer 3-5% Revenue Refunding Bonds, 3/1 and 9/1 Series 2005 Less: Current Portion of bonds Add: Unamortized Bond Premium Long -Term Portion of bonds Outstanding at September 30, Maturity Issue 2010 2022 $ 27,675,000 $ 21,925,000 1,435,000 733,521 21.223.521 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. RN Indian River County, Florida Notes To Financial Statements Year Ended September 30, 2010 NOTE 13 - LONG-TERM LIABILITIES - Continued B. Primary Government - Continued 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. The interest payments of $1,331,610 represent approximately ten percent of net revenues ($12,755,643) of the utility system. The total principal and interest remaining to be paid on the bonds is $37,240,500. Rate Covenant — Net revenues shall be sufficient to pay 100% of the reserve account requirement and 120% of the current year's principal and interest payment. Bonds Issued - At September 30, 2010, the revenue bonds consisted of the following: Description Water and Sewer Revenue Refunding Bonds, Series 2009 Less: Current Portion of bonds Add: Unamortized Bond Premium Long -Term Portion of bonds Outstanding at Interest Rates September 30, and Date Maturi Issue 2010 4-5% 3/1 and 9/1 2024 $ 26,370,000 $ 26,370,000 2,432,986 28.802.986 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. Indian River County, Florida Notes To Financial Statements Year Ended September 30, 2010 NOTE 13 - LONG-TERM LIABILITIES - Continued 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, 2009 2010 2010 Capital Improvement Revenue Bonds: Series 1980745 000 355 000 390 000 D. Compensated Absences Governmental activities compensated absences are paid by the fund which normally pays the personnel services costs of the employee. 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. The School bonds with a principal amount of $14,800,000 were called January 6, 2010. Indian River County, Florida Notes To Financial Statements Year Ended September 30, 2010 NOTE 14 - 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 $4.2 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 sub -accounts: 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, 2010, $9,466,618 was on deposit at the Florida Local Government Investment Trust and $52,118 was on deposit in the County's Operating account. A summary of changes in the landfill closure liability account is as follows: Balance Balance 10/01/09 Deposits Withdrawals 09/30/10 Closure and long-term care costs 10,427.975 $495,402 $1,404,641 $9,518,736 Of the $9,518,736 liability for closure and long-term care costs, management estimates that no funds will be due and payable within one year. :. Capacity Estimated Used Closing Amount Closure Costs Class I - Segments I and II 54% 2027 $ 4,570,693 Construction and Demolition - Cell 1 89% 2015 1,083,866 Post -closure Costs Class I - Segments I and II N/A N/A 3,694,689 Construction and Demolition - Cell I N/A N/A 169,488 Total account balance at 9/30/10: $ 9,518,736 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, 2010, $9,466,618 was on deposit at the Florida Local Government Investment Trust and $52,118 was on deposit in the County's Operating account. A summary of changes in the landfill closure liability account is as follows: Balance Balance 10/01/09 Deposits Withdrawals 09/30/10 Closure and long-term care costs 10,427.975 $495,402 $1,404,641 $9,518,736 Of the $9,518,736 liability for closure and long-term care costs, management estimates that no funds will be due and payable within one year. :. Indian River County, Florida Notes To Financial Statements Year Ended September 30, 2010 NOTE 15 — POLLUTION REMEDIATION In accordance with GASB Statement 49, a consultant evaluated six 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 six sites requiring the County (using the consultant's services) to attempt to accrue a liability for pollution remediation. The liability totaled $2,539,800 at September 30, 2010 for all six 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 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 $32,400. 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 $3,000. 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 $74,800. 5) Former Cumberland Farms — The nature of the pollution remediation obligation is closed underground storage tank petroleum contamination. The consultant will conduct the remediation work and coordinate with the FDEP. The amount of the estimated year end liability is $188,000. Total Governmental activities liability: $2,498,200 Business -type Activities: 6) 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 $41,600. Please see Note 21-C for information regarding the restatement of beginning net assets for the governmental activities as it relates to the pollution remediation liability. Mh Indian River County, Florida Notes To Financial Statements Year Ended September 30, 2010 NOTE 16 - PENSION PLANS 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. Indian River County, Florida Notes To Financial Statements Year Ended September 30, 2010 NOTE 16 - PENSION PLANS - Continued 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, 2010, as follows (contribution rates are in agreement with the actuarially determined rates): 07/01/06 7/1/10 to 6/30/10 to 9/30/10 Regular Class - Members not qualifying for other classes. 9.85% 10.77% Senior Management Service Class - Members of senior management who do not elect the optional annuity management program. 13.12% 14.57% Special Risk Class - Members employed as law enforcement officers, firefighters, or correctional officers and meet the criteria set to qualify for this class. 20.92% 23.25% Special Risk Administrative Support Class - Special risk members who are transferred or reassigned to non -special risk and meet the criteria. 12.55% 13.24% Elected County Officer's Class - Certain elected county officials. 16.53% 18.64% Deferred Retirement Option Program - Members who are eligible for normal retirement that have elected to participate in the deferred retirement option program. 10.91% 12.25% Contributions to the FRS for the fiscal years ended September 30, 2008, 2009, and 2010, were equal to 14.33%, 14.15%, and 14.71% of the annual covered payroll. Contributions to the FRS for the fiscal years ended September 30, 2008, 2009, and 2010 were $11,085,528, $10,734,876, and $10,736,848 respectively, which are equal to 100% of the required contribution for each year. Indian River County, Florida Notes To Financial Statements Year Ended September 30, 2010 NOTE 17 — 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 IRCOT'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 $735 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 2%/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%/yr-max 40% No subsidy all Indian River County, Florida Notes To Financial Statements Year Ended September 30, 2010 NOTE 17 — 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, 2009, the date of the latest actuarial valuation, plan participation consisted of: Active participants 1,452 Retired participants 286 Total participants 1.738 There are two classes of participants at October 1, 2009: Regular and senior management 1,153 Special risk 585 Total participants 1.738 Financial statements for the IRCOT are included in this report and can be found on pages 40-41. A separate, stand-alone financial report is not issued by the County. The IRCOT investments can be found in Note 4D. 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 IRCOT is advance funded by the County. For the year ended September 30, 2010, the County contributed $3.03 million to the qualifying IRCOT. Plan members receiving benefits contributed $0.95 million or approximately 38 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. Custodial and individual fund administrative fees are paid from the portfolio dividend and interest income. C. Annual OPEB Cost and Net OPEB Obligation The employer's contribution (i.e. annual cost or expense) to the County's IRCOT 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 IRCOT cost for the year, the amount actually contributed, and the changes in the net obligation. Annual Required Contribution Interest on Net OPEB Obligation Adjustment to Annual Required Contribution Annual OPEB Cost (expense) Contributions Change in Net OPEB obligation Net OPEB obligation — beginning of year Net OPEB obligation — end of year Percentage of Annual OPEB Cost Contributed FY 2009/2010 FY 2008/2009 FY 2007/2008 $ 2,814,435 (7,272) 7,779 2,814,942 (3,030,792) (215,850) (103,880) $ (319,730) 91 107.67% $ 2,810,092 (6,587) 6,082 2,809,587 (2,819,373) (9,786) (94,094) $ (103,880) 100.35% $ 2,626,254 2,626,254 (2,720,348) (94,094) $ (94,094) 103.58% Indian River County, Florida Notes To Financial Statements Year Ended September 30, 2010 NOTE 17 — OTHER POSTEMPLOYMENT BENEFITS PLAN - Continued D. Funded Status and Funding Progress The contribution made to the IRCOT for the current fiscal year was 107.7% of the annual OPEB cost. Information is available for the two preceding fiscal years. As of the October 1, 2009 actuarial valuation date, the IRCOT was 11.37% funded, the actuarial accrued liability for benefits was $29.1 million, and the actuarial value of assets was $3.7 million, resulting in an unfunded actuarial accrued liability (UAAL) of $28.8 million. The covered payroll (annual payroll of active employees covered by the IRCOT) was $70.6 million, and the ratio of the UAAL to the covered payroll was 40.8%. 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 and schedule of employer contributions, 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 Amortization method Amortization period (closed) Asset valuation method The actuarial assumptions are: Investment rate of return Projected annual salaries increase Healthcare cost trend rate (post-retirement benefit) Inflation rate Entry age normal cost method Level percent of payroll projected to grow 4% per year 18 years Market Value 7% (net administrative expenses) 4.5%-9.47% (dependent on years of service and age) 9% Included in the Healthcare cost trend rate 92 Indian River County, Florida Notes To Financial Statements Year Ended September 30, 2010 NOTE 18 - 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 $541,692 and lease expenditures totaled $347,800 for the year ended September 30, 2010. 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 2011 2012 2013 2014 2015 2016-2020 2021-2025 2026-2030 2031-2035 Total future minimum lease receipts Amount $ 538,871 470,728 437,901 442,000 455,484 2,308,812 1,752,374 700,152 227,565 7,333.887 The property being leased is included in the statement of net assets governmental activities and business -type activities columns and has a cost of $25,704,643 and a carrying value of $18,341,513. Current year depreciation on property being leased was $682,615. 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, 2010: VPar Amniint 2011 $ 284,250 2012 222,511 2013 202,525 2014 100,237 2015 70,565 2016-2020 91,628 2021-2025 1,500 2026-2030 1,500 2031-2035 1,500 2036-2040 1,500 2041-2045 1,500 2046-2048 900 Total future minimum lease payments: $ 980,116 93 Indian River County, Florida Notes To Financial Statements Year Ended September 30, 2010 NOTE 19 - FUND BALANCE County Fund Balance Policy The County elected to early implement the GASB Statement 54 - Fund Balance Reporting and Governmental Funds Type Definitions. The Statement requires the fund balance for governmental funds to be reported in classifications that comprise a hierarchy based primarily on the extent to which the government is bound to honor constraints on the specific purposes for which amounts in those funds can be spent. Categories There are five categories of fund balance for governmental funds under Statement 54: Nonspendable - Amounts that cannot be spent because they are not in spendable form or are legally or contractually required to remain intact. Restricted - Use of these resources is based on the constraints imposed externally by creditors, grantors, contributors, or laws and regulations of other governments; or imposed by law through constitutional provisions or enabling legislation. Committed - Amounts whose use is constrained by formal action of the Board of County Commissioners, including resolution or ordinance. This category includes contractual obligations entered into by the Board of County Commissioners. Assigned - Amounts constrained by the County's intent to be used for specific purposes. Amounts appropriated to eliminate a budgetary deficit in a subsequent year are reported in this category as well. Unassigned - Residual amounts in the general fund that do not meet any of the other fund balance classifications. Fund Balance Policy On September 21, 2010, the County approved a Fund Balance and Reserve Policy that set forth the following reserves of fund balance in the General, Transportation, and Emergency Services District Funds: Emergency/Disaster Relief Reserve - A balance of no less than 5% of budgeted operating expenditures for the current fiscal year will be reserved only for the purpose of responding to natural and man-made disasters. Disasters include hurricanes, tropical storms, floods, wildfires, or terrorist activities. These funds can only be used to respond and provide relief after such a disaster. Funds will be replenished over a five-year period after the completion of the recovery from the disaster. This reserve is presented as committed fund balance in those funds. Indian River County, Florida Notes To Financial Statements Year Ended September 30, 2010 NOTE 19 - FUND BALANCE - Continued Fund Balance Policy - Continued Budget Stabilization Reserve — A balance of no less than 5% of budgeted operating expenditures for the current fiscal year will be reserved only for the purpose of revenue declines or unfunded mandates from the state and federal governments. This reserve is presented as committed fund balance in those funds. Funds utilized due to revenue declines will be replenished over a five-year period. Funds utilized for unfunded mandates or unanticipated expenditures cannot be used for more than a three-year period and must be replenished within five -years after the three-year period. The approved fund balance policy dictates the County's attempt to maintain a minimum unassigned fund balance in the General, Transportation, and Emergency Services District funds of 20% of budgeted annual operating expenditures. The Emergency/Disaster Relief and Budget Stabilization Reserve amounts may only be revised by the Board of County Commissioners. The minimum fund balance level may be revised by the County Administrator or his designee. Spending Hierarchy For all governmental funds, when restricted, committed, assigned, and unassigned fund balances are combined in a fund, qualified expenditures are paid first from restricted or committed fund balance, as appropriate, then assigned and finally unassigned fund balances. NOTE 20 - FUND BALANCE DEFICIT The following funds had a deficit in fund balance at September 30, 2010: Fund Deficit Nonmajor Governmental Funds: Metropolitan Planning Organization Fund $ 120,199 Federal/State Grants Fund 45,695 Disaster Recovery Grant Fund 33,248 Total Deficit $ 199,142 The deficits for these three funds will be eliminated by grant proceeds in fiscal year 2011. 95 Indian River County, Florida Notes To Financial Statements Year Ended September 30, 2010 NOTE 21— NET ASSETS 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, 2010 consist of the following: Restricted for Debt Service: Golf Course Fund $ 43,333 County Utilities Fund 249,167 Total $ 292,500 Restricted for Capital Projects: County Utilities Fund $ 27,605,792 B. Net Assets Restricted by Enabling Legislation The government -wide statement of net assets for the primary government reports $160,827,130 of restricted net assets, of which $75,786,441 is restricted by enabling legislation. C. Restatement of Beginning Net Assets In fiscal year 2009, and 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 as of October 1, 2008. In fiscal year 2010, the consultant's report included an additional site in the County, the former Cumberland Farms site, for pollution remediation obligations. Based on the consultant's report and the costs paid during the fiscal year, the governmental funds' portion of the new site's estimated liability at October 1, 2009 was $201,000; therefore, beginning net assets of the governmental activities was reduced by that amount. For additional information on the County's pollution remediation obligation, please see Note 15. .e Indian River County, Florida Notes To Financial Statements Year Ended September 30, 2010 NOTE 22 - 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: Worker's Compensation General Liability Auto Liability Property Damage Error or Omissions Annual Aggregate Liquor Liability 10/01/04 to 04/01/08 to 10/01/08 to 03/31/08 09/30/08 09/30/10 $ 600,000 $ 300,000 $ 350,000 200,000 250,000 250,000 200,000 250,000 250,000 500-25,000 500-25,000 250,000 200,000 250,000 250,000 1,000,000 1,000,000 2,000,000 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. 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 2008, 2009, and 2010 fiscal years. The claims liability of $7,899,000 reported at September 30, 2010, 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, $2,351,622 will be liquidated over the next twelve months. 97 Indian River County, Florida Notes To Financial Statements Year Ended September 30, 2010 NOTE 22 - RISK MANAGEMENT - Continued Changes in the fund's claim liability amount during the current and prior three fiscal years are as follows: Claims and Changes in Estimates $ 14,282,793 14,209,397 15,637,406 13,940,099 Claim Pavments $ (13,589,793) (13,873,397) (14,657,406) (13,916,099) Balance at Fiscal Year End $ 6,559,000 6,895,000 7,875,000 7,899,000 Included in the charges to other funds is an amount to fund future catastrophic losses not actuarially determined and at September 30, 2010, unreserved net assets of $21,164,759 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, 2010, the undiscounted liability was the greater of the two amounts. The discount rate used in the calculation was 2.5 percent. NOTE 23 - 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, 2010. In the General Fund, contracts are for custodial services and external auditing services. In the Special Revenue Funds, contracts are for Sector 3 beach restoration, Old Dixie Highway bridge replacement, 43rd Avenue and 66th Avenue roadway expansions as well as a variety of other road paving and drainage projects. In the Capital Projects Fund, contracts are for the expansion of the 800 Mhz radio system, South County Park Phase III improvements, 53rd Street roadway improvements, and several sidewalk and road improvement projects throughout the County. In the Enterprise Funds, contracts are for the North County Reverse Osmosis Plant raw water transmission system, Spoonbill Marsh Wetlands, Utility software implementation and various other water and sewer projects. W. Balance at Fiscal Year Beginning_ 2006-2007 $ 5,866,000 2007-2008 6,559,000 2008-2009 6,895,000 2009-2010 7,875,000 Claims and Changes in Estimates $ 14,282,793 14,209,397 15,637,406 13,940,099 Claim Pavments $ (13,589,793) (13,873,397) (14,657,406) (13,916,099) Balance at Fiscal Year End $ 6,559,000 6,895,000 7,875,000 7,899,000 Included in the charges to other funds is an amount to fund future catastrophic losses not actuarially determined and at September 30, 2010, unreserved net assets of $21,164,759 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, 2010, the undiscounted liability was the greater of the two amounts. The discount rate used in the calculation was 2.5 percent. NOTE 23 - 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, 2010. In the General Fund, contracts are for custodial services and external auditing services. In the Special Revenue Funds, contracts are for Sector 3 beach restoration, Old Dixie Highway bridge replacement, 43rd Avenue and 66th Avenue roadway expansions as well as a variety of other road paving and drainage projects. In the Capital Projects Fund, contracts are for the expansion of the 800 Mhz radio system, South County Park Phase III improvements, 53rd Street roadway improvements, and several sidewalk and road improvement projects throughout the County. In the Enterprise Funds, contracts are for the North County Reverse Osmosis Plant raw water transmission system, Spoonbill Marsh Wetlands, Utility software implementation and various other water and sewer projects. W. Indian River County, Florida Notes To Financial Statements Year Ended September 30, 2010 NOTE 23 - COMMITMENTS AND CONTINGENCIES - Continued B. Contracts and Other Commitments - Continued A summary of these projects at September 30, 2010, is as follows: General Special Revenue Capital Projects Enterprise Total C. Grants Total Contract Price $ 724,705 $ 34,903,912 12,223,685 8,551,914 Total Paid as of September 30, 2010 (403,237) $ (20,902,256) (9,512,494) (5,275,542) Remaining Balance at September 30, 2010 321,468 14,001,656 2,711,191 3,276,372 $ 56,404,216 $ (36,093,529) $ 20,310,687 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. NOTE 24 — SUBSEQUENT EVENTS On February 15, 2011, the Board of County Commissioners elected to change the financial and administrative support to the Indian River County Housing Authority (IRCHA). As of April 15, 2011 the IRCHA will no longer be included as a component unit in the County's Comprehensive Annual Financial Report (CAFR) going forward. The County has agreed to continue funding the IRCHA for the remainder of the 2011 fiscal year with the unspent appropriation. For fiscal years ending after September 30, 2011, the IRCHA will be funded like an outside agency. Indian River County, Florida Required Supplementary Information For the Year Ended September 30, 2010 Other Postemployment Benefits Plan Schedule of Funding Progress * First year of Indian River County Other Postemployment Benefits Trust (IRCOT) Schedule of Employer Contributions Fiscal Year Annual Amount Percentage Net OPEB Ending UAAL as a Contributed Actuarial Actuarial Accrued 9/30/2008 $ 2,626,254 $ 2,720,348 Percentage of Actuarial Value of Liability (AAL) - Unfunded AAL 100.35% $ (103,880) 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 * $ - $ 29,098,337 $ 29,098,337 0.00% $ 64,847,001 44.87% 10/01/2009 $ 3,690,592 $ 32,456,186 $ 28,765,594 11.37% $ 70,558,251 40.77% * First year of Indian River County Other Postemployment Benefits Trust (IRCOT) Schedule of Employer Contributions Fiscal Year Annual Amount Percentage Net OPEB Ending Required Contribution 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) 9/30/2010 $ 2,814,942 $ 3,030,792 107.67% $ (319,730) 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. See Note 17 for more information on the IRCOT. 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. Special Law Enforcement- To account for the expenditures of providing law enforcement equipment. Financing is provided by confiscation of monies and property in accordance with Section 932.704 of the Florida Statutes. 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. Multi -Jurisdictional Law Enforcement- 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. CDBG Neighborhood Stabilization Program- To account for the proceeds from the Community Development Block Grant. The purpose of this grant is to provide neighborhood stabilization through resale and rental of housing units purchased by the grant funds. 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. Library Bequests- To account for bequests to the Indian River County Library to be 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. 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. 103 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. 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. 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. Vero Beach Sports Village Reserve- To provide additional improvements to the Vero Beach Sports Village facility. The City of Vero Beach contributed $1,400,000 and the County contributed $600,000. This fund was previously known as the Dodgertown Capital Reserve Fund in prior fiscal years. 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. Disaster Recovery Grants- To account for revenues and expenditures of grants received in response to disasters, such as hurricanes. 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. Parks Development- To account for expenditures for improvements made to County parks. Financing is provided by the sale of surplus County property. 104 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. 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. 105 Indian River County, Florida Combining Balance Sheet Nonmajor Governmental Funds September 30, 2010 ASSETS Cash and cash equivalents Accounts receivable Due from other funds Due from other governments Prepaid items Other assets held for resale Total Assets LIABILITIES AND FUND BALANCES Liabilities: Accounts payable Retainage payable Due to other funds Due to other governments Deferred revenues Total Liabilities Fund Balances: Nonspendable: Inventories Prepaid items Restricted for: Court -related costs and improvements Housing assistance Law enforcement/public safety Tourism -related activites Beach renourishment Boating related projects Library services Land acquisition Stormwater, street lighting, and other special assessments Voting/election activities Debt service Environmental conservation/preservation Sports Village repairs/improvements Other purposes Committed to: Court operations Unassigned Total Fund Balances Total Liabilities and Fund Balances Special Revenue Section 8 Court Rental Special Law Facilities Assistance Enforcement $ 1,197,304 $ 351,390 $ 201,291 - 13,671 - $ 1,197,304 $ 365,061 $ 201,291 $ 6,597 $ 6,998 $ - 186,268 - - 192,865 6,998 - 1,004,439 - - - 358,063 - - 201,291 1,004,439 358,063 201,291 $ 1,197,304 $ 365,061 $ 201,291 106 Special Revenue Tree State Housing Ordinance Tourist 911 Drug Initiatives Fines Development Surcharge Abuse Partnership $ 251,408 $ 647,500 $ 1,604,501 $ 159,623 $ 2,130,130 - 2,506 - - - - 63,180 8,707 $ 251,408 $ 650,006 $ 1,667,681 $ 168,330 $ 2,130,130 $ 3,839 $ 208,321 $ 4,389 $ 27,640 $ 9,670 3,839 208,321 4,389 27,640 9,670 - - - 2,120,460 - 1,663,292 - - 441,685 - - 247,569 - - - 140,690 - 247,569 441,685 1,663,292 140,690 2,120,460 $ 251,408 $ 650,006 $ 1,667,681 $ 168,330 $ 2,130,130 Continued 107 Indian River County, Florida Combining Balance Sheet Nonmajor Governmental Funds September 30, 2010 ASSETS Cash and cash equivalents Accounts receivable Due from other funds Due from other governments Prepaid items Other assets held for resale Total Assets LIABILITIES AND FUND BALANCES Liabilities: Accounts payable Retainage payable Due to other funds Due to other governments Deferred revenues Total Liabilities Fund Balances: Nonspendable: Inventories Prepaid items Restricted for: Court -related costs and improvements Housing assistance Law enforcement/public safety Tourism -related activites Beach renourishment Boating related projects Library services Land acquisition Stormwater, street lighting, and other special assessments Voting/election activities Debt service Environmental conservation/preservation Sports Village repairs/improvements Other purposes Committed to: Court operations Unassigned Total Fund Balances Total Liabilities and Fund Balances Special Revenue Metropolitan Multi- Native Uplands Planning Jurisdictional Land Organization Law Enforcement Acquisition $ 53 $ 153,761 $ 832,167 $ 53 $ 153,761 $ 832,167 $ 54,252 66,000 - 120,252 - - 153,761 - 832,167 (120,199) - - (120,199) 153,761 832,167 $ 53 $ 153,761 $ 832,167 108 Special Revenue CDBG Florida Disabled Beach Neighborhood Boating Improv. Library Access Restoration Stabilization Pgm Program Bequests Program 11,414,094 $ 1,159 $ 977,427 $ 203,740 $ 60,221 5,746 70 - 6,798 - 212,645 - - - 757 1,677,658 - $ 11,632,485 $ 1,678,887 $ 977,427 $ 211,295 $ 60,221 $ 149,855 $ 106,809 $ 10,780 $ 849 $ - 291,263 - - - - 880,000 441,118 986,809 10,780 849 - 1,677,658 - - - 757 11,191,367 - - - - 966,647 - - - 209,689 - 60,221 - (985,580) - - - 11,191,367 692,078 966,647 210,446 60,221 $ 11,632,485 $ 1,678,887 $ 977,427 $ 211,295 $ 60,221 Continued 109 Indian River County, Florida Combining Balance Sheet Nonmajor Governmental Funds September 30, 2010 Special Revenue Fund Balances: Nonspendable: Inventories Prepaid items Restricted for: Court -related costs and improvements Housing assistance Law enforcement/public safety Tourism -related activites Beach renourishment Boating related projects Library services Land acquisition Stormwater, street lighting, and other special assessments Voting/election activities Debt service Environmental conservation/preservation Sports Village repairs/improvements Other purposes Committed to: Court operations Unassigned Total Fund Balances Total Liabilities and Fund Balances - 301,495 42,286 (45,695) - - (45,695) 42,286 301,495 $ 162,198 $ 56,736 $ 314,986 110 Traffic Federal/State Education Land Grants Program Acquisition ASSETS Cash and cash equivalents $ 2,278 $ 56,736 $ 314,986 Accounts receivable - - - Due from other funds - - Due from other governments 159,920 - Prepaid items - - Other assets held for resale - - - Total Assets $ 162,198 $ 56,736 $ 314,986 LIABILITIES AND FUND BALANCES Liabilities: Accounts payable $ 190,079 $ 14,450 $ 13,491 Retainage payable 12,814 - - Due to other funds 5,000 - Due to other governments - - Deferred revenues - - - Total Liabilities 207,893 14,450 13,491 Fund Balances: Nonspendable: Inventories Prepaid items Restricted for: Court -related costs and improvements Housing assistance Law enforcement/public safety Tourism -related activites Beach renourishment Boating related projects Library services Land acquisition Stormwater, street lighting, and other special assessments Voting/election activities Debt service Environmental conservation/preservation Sports Village repairs/improvements Other purposes Committed to: Court operations Unassigned Total Fund Balances Total Liabilities and Fund Balances - 301,495 42,286 (45,695) - - (45,695) 42,286 301,495 $ 162,198 $ 56,736 $ 314,986 110 Special Revenue East Vero Beach Clerk Sheriff Gifford Vero Lake Sports Special Special Stormwater Estates Village Reserve Revenue Revenue S 15,177 $ 1,059,998 $ 1,379,080 $ 2,608,401 $ 1,992,546 - - - - 894 19 1,283 - - - - - 117,086 - 15,823 - $ 15,196 $ 1,061,281 $ 1,379,080 $ 2,624,224 $ 2,110,526 $ - $ 26 $ 141,179 $ 5,379 $ 36,522 - 32 950 - - - 2,763 26 141,179 5,411 40,235 - 15,823 - 2,511,417 - - 2,070,291 15,196 1,061,255 - - - 1,237,901 - - 91,573 15,196 1,061,255 1,237,901 2,618,813 2,070,291 $ 15,196 $ 1,061,281 $ 1,379,080 $ 2,624,224 $ 2,110,526 Continued 111 Indian River County, Florida Combining Balance Sheet Nonmajor Governmental Funds September 30, 2010 Special Revenue Supervisor Street Disaster of Elections Lighting Recovery Special Revenue Districts Grants ASSETS Cash and cash equivalents $ 12,050 $ 502,863 $ 457 Accounts receivable - - - Due from other funds - 2,485 - Due from other governments - - - Prepaid items - - - Other assets held for resale - - - Total Assets $ 12,050 $ 505,348 $ 457 LIABILITIES AND FUND EQUITY Liabilities: Accounts payable Retainage payable Due to other funds Due to other governments Deferred revenues Total Liabilities Fund Balances: Nonspendable: Inventories Prepaid items Restricted for: Court -related costs and improvements Housing assistance Law enforcement/public safety Tourism -related activites Beach renourishment Boating related projects Library services Land acquisition Stormwater, street lighting, and other special assessments Voting/election activities Debt service Environmental conservation/preservation Sports Village repairs/improvements Other purposes Committed to: Court operations Unassigned Total Fund Balances Total Liabilities and Fund Balances $ - $ 5,712 $ 8,205 - - 25,500 6,694 - - 6,694 5,712 33,705 - 499,636 - 5,356 - - - - (33,248) 5,356 499,636 (33,248) $ 12,050 $ 505,348 $ 457 112 Debt Service Spring Land Total Nonmajor Training Acquisition Governmental Facility Bonds Bonds Funds $ 1,501,258 $ 1,764,600 $ 31,396,199 - - 29,685 - 81,085 84,872 37,148 - 598,686 - 16,580 - - 1,677,658 $ 1,538,406 $ 1,845,685 $ 33,803,680 371 371 1,538,406 1,845,314 1,538,406 1,845,314 $ 1,538,406 $ 1,845,685 113 $ 1,005,413 304,077 976,500 187,250 9,457 2,482,697 1,677,658 16,580 3,515,856 2,478,523 4,088,635 441,685 11,191,367 966,647 209,689 301,495 1,576,087 5,356 3,383,720 1,079,736 1,237,901 243,197 91,573 (1,184,722) 31,320,983 $ 33,803,680 Indian River County, Florida Combining Statement of Revenues, Expenditures and Changes in Fund Balances Nonmajor Governmental Funds For the Year Ended September 30, 2010 REVENUES Taxes Permits, fees and special assessments Intergovernmental Charges for services Judgments, fines and forfeits Interest Miscellaneous Total revenues EXPENDITURES Current: General government Public safety Physical environment Transportation Economic environment Human services Culture/recreation Court related Debt service: Principal Interest and other fiscal charges Total expenditures Excess of revenues over (under) expenditures OTHER FINANCING SOURCES (USES) Transfers in Transfers out Total other financing sources (uses) Net change in fund balances Fund balances at beginning of year Fund balances at end of year Special Revenue Section 8 Court Rental Special Law Facilities Assistance Enforcement - 1,963,883 - 460,051 55,522 27,301 - - 39,750 12,391 3,689 2,162 - 894 - 472,442 2,023,988 69,213 44,203 - - - 49,366 - - 1,920,495 - 425,919 - - 470,122 1,969,861 - 2,320 54,127 69,213 (126,382) - - (126,382) 2,320 54,127 (57,169) 1,002,119 303,936 258,460 $ 1,004,439 $ 358,063 $ 201,291 114 Tree Ordinance Fines 2,935 2.935 cial Revenue Tourist 911 Development Surcharge 496,857 $ - $ - 817,451 7,335 15,832 399 - 504,591 833,283 State Housing Drug Initiatives Abuse Partnership 102,256 350,000 - 138,142 15,762 - 1,742 18,096 - 307,479 119.760 813.717 - - 419,237 103,917 - - - - 27,938 841,697 36,910 988,924 - - - 36,910 988,924 419,237 131,855 841,697 (33,975) (484,333) 414,046 (12,095) (27,980) - - - - 906,191 - - (193,141) - - - - (193,141) - 906,191 (33,975) (484,333) 220,905 (12,095) 878,211 281,544 926,018 1,442,387 152,785 1,242,249 $ 247,569 $ 441,685 $ 1,663,292 $ 140,690 $ 2,120,460 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, 2010 REVENUES Taxes Permits, fees and special assessments Intergovernmental Charges for services Judgments, fines and forfeits Interest Miscellaneous Total revenues EXPENDITURES Current: General government Public safety Physical environment Transportation Economic environment Human services Culture/recreation Court related Debt service: Principal Interest and other fiscal charges Total expenditures Excess of revenues over (under) expenditures OTHER FINANCING SOURCES (USES) Transfers in Transfers out Total other financing sources (uses) Net change in fund balances Fund balances at beginning of year Fund balances at end of year Revenue Metropolitan Multi- Native Uplands Planning Jurisdictional Land Organization Law Enforcement Acquisition 507,202 - - - 76,070 - 119 1,752 9,334 507.321 77.822 9.334 558,220 - - - 9,505 - - 1,904 558,220 9,505 1,904 (50,899) 68,317 7,430 (51,389) - (51,389) - (50,899) 16,928 7,430 (69,300) 136,833 824,737 $ (120,199) $ 153,761 $ 832,167 116 Special Revenue - CDBG Florida - Disabled Beach Neighborhood Boating Improv. Library Access Restoration Stabilization Pgm Program Bequests Program (1,007,182) 701,538 98,564 57,101 $ 496,858 $ - $ - $ - $ - 4,630,757 2,636,162 155,007 - - - - - - 538 100,601 - 10,723 2,134 673 1,000 - - 123,588 - 5,229,216 2,636,162 165,730 125,722 1,211 - 1,934,624 - - - 6,236,398 - 67,166 68,621 - 6,236,398 1,934,624 67,166 68,621 - (1,007,182) 701,538 98,564 57,101 1,211 61178,959 - - - - 6,178,959 - - - - 5,171,777 701,538 98,564 57,101 1,211 6,019,590 (9,460) 868,083 153,345 59,010 $ 11,191,367 $ 692,078 $ 966,647 $ 210,446 $ 60,221 Continued 117 Indian River County, Florida Combining Statement of Revenues, Expenditures and Changes in Fund Balances Nonmajor Governmental Funds For the Year Ended September 30, 2010 REVENUES Taxes Permits, fees and special assessments Intergovernmental Charges for services Judgments, fines and forfeits Interest Miscellaneous Total revenues EXPENDITURES Current: General government Public safety Physical environment Transportation Economic environment Human services Culture/recreation Court related Debt service: Principal Interest and other fiscal charges Total expenditures Excess of revenues over (under) expenditures OTHER FINANCING SOURCES (USES) Transfers in Transfers out Total other financing sources (uses) Revenue Traffic Federal/State Education Land Grants Program Acquisition 1,158,151 - - 525 - 753 4,467 - - 16,344 1,158,151 1,278 20,811 133,986 - - 370,347 228,104 35,318 - 689,171 - - 143,760 - - 1,195,021 35,318 370,347 (36,870) (34,040) (349,536) Net change in fund balances (36,870) (34,040) (349,536) Fund balances at beginning of year (8,825) 76,326 651,031 Fund balances at end of year $ (45,695) $ 42,286 $ 301,495 118 Special Revenue East Vero Beach Clerk Sheriff Gifford Vero Lake Sports Special Special Stormwater Estates Village Reserve Revenue Revenue 52 $ 2,623 $ - $ - $ - 1,399 91,741 - - - - - - - 846,490 - - - 306,753 322,361 - - - 172,276 193,319 165 11,727 - 16,200 6,184 1,616 106,091 - 495,229 1,368,354 - - - 338,814 - - - - - 1,743,723 - 14,868 - - - - - 463,551 - - - - - 90,261 6,494 14,868 429,075 - 463,551 1,750,217 1,616 91,223 (463,551) 66,154 (381,863) - - - - 177,771 (55) (2,989) - (14,086) - (55) (2,989) - (14,086) 177,771 1,561 88,234 (463,551) 52,068 (204,092) 13,635 973,021 1,701,452 2,566,745 2,274,383 $ 15,196 $ 1,061,255 $ 1,237,901 $ 2,618,813 $ 2,070,291 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, 2010 REVENUES Taxes Permits, fees and special assessments Intergovernmental Charges for services Judgments, fines and forfeits Interest Miscellaneous Total revenues EXPENDITURES Current: General government Public safety Physical environment Transportation Economic environment Human services Culture/recreation Court related Debt service: Principal Interest and other fiscal charges Total expenditures Revenue Supervisor of Street Elections Lighting Special Revenue Districts Disaster Recovery Grants $ - $ 2,919 $ - 186,560 - 66,280 - 143,580 42 6,001 - - 2,669 - 66,322 198,149 143,580 70,340 - - - 185,327 - - 121,263 70,340 185,327 121,263 Excess of revenues over (under) expenditures (4,018) 12,822 22,317 OTHER FINANCING SOURCES (USES) Transfers in 2,402 - Transfers out - (5,613) Total other financing sources (uses) 2,402 (5,613) Net change in fund balances (1,616) 7,209 22,317 Fund balances at beginning of year 6,972 492,427 (55,565) Fund balances at end of year $ 5,356 $ 499,636 $ (33,248) 120 I Revenue SHIP Hurricane Parks Housing Grant Development 355,772 - 7,953 252 363,725 252 Debt Service Spring Training Facility Bonds $ 331,238 $ 945,785 13,814 Land Acquisition Bonds 5,933,535 41,249 1,290,837 5,974,784 355,772 - - - - 50,242 - - 355,772 50,242 7,953 (49,990) (906,191) - (906,191) - (898,238) (49,990) 898,238 49,990 585,000 4,730,000 642,232 2,115,906 1,227,232 6,845,906 63,605 (871,122) (125,333) - (125,333) 63,605 (996,455) 1,474,801 2,841,769 $ 1,538,406 $ 1,845,314 121 Total Nonmajor Governmental Funds $ 7,264,082 279,700 14,678,776 1,310,130 498,240 298,325 452,373 24,781,626 1,145,563 2,276,382 372,251 463,617 2,105,253 3,835,073 8,055,572 522,674 5,315,000 2,758,138 26, 849,523 (2,067,897) 7,265,323 (1,425,179) 5,840,144 3,772,247 27,548,736 $ 31,320,983 Indian River County, Florida Budgetary Comparison Schedule Court Facilities For the Year Ended September 30, 2010 REVENUES Charges for services Interest Total revenues EXPENDITURES General government Court related Total expenditures Net change in fund balances Fund balances at beginning of year Fund balances at end of year Final Budget Variance Actual Positive Amounts (Negative) $ 438,637 $ 460,051 $ 21,414 3,500 12,391 8,891 442,137 472,442 30,305 45,000 44,203 797 456,878 425,919 30,959 501,878 470,122 31,756 (59,741) 2,320 62,061 59,741 1,002,119 942,378 $ - $ 1,004,439 $ 1,004,439 122 Indian River County, Florida Budgetary Comparison Schedule Section 8 Rental Assistance For the Year Ended September 30, 2010 REVENUES Intergovernmental Charges for services Interest Miscellaneous Total revenues EXPENDITURES Economic environment Human services Total expenditures Net change in fund balances Fund balances at beginning of year Fund balances at end of year Final Budget Variance Actual Positive Amounts (Negative) $ 2,046,639 $ 1,963,883 $ (82,756) - 55,522 55,522 - 3,689 3,689 - 894 894 2,046,639 2,023,988 (22,651) 49,366 49,366 - 2,046,639 1,920,495 126,144 2,096,005 1,969,861 126,144 (49,366) 54,127 103,493 49,366 303,936 254,570 $ - $ 358,063 $ 358,063 123 Indian River County, Florida Budgetary Comparison Schedule Special Law Enforcement For the Year Ended September 30, 2010 REVENUES Charges for services Judgments, fines and forfeits Interest Total revenues EXPENDITURES Public safety Total expenditures Excess of revenues over (under) expenditures OTHER FINANCING USES Transfers out Total other financing uses Net change in fund balances Fund balances at beginning of year Fund balances at end of year Variance Final Actual Positive Budget Amounts (Negative) $ - $ 27,301 $ 27,301 126,383 39,750 (86,633) - 2,162 2,162 126,383 69,213 (57,170) 126,383 69,213 (57,170) (126,383) (126,382) (126,383) (126,382) - (57,169) L (57,169) 258,460 258,460 $ - $ 201,291 $ 201,291 124 Indian River County, Florida Budgetary Comparison Schedule Tree Ordinance Fines For the Year Ended September 30, 2010 REVENUES Interest Total revenues EXPENDITURES Culture/recreation Total expenditures Net change in fund balances Fund balances at beginning of year Fund balances at end of year Final Budget Variance Actual Positive Amounts (Negative) $ - $ 2,935 $ 2,935 - 2,935 2,935 50,000 36,910 13,090 50,000 36,910 13,090 (50,000) (33,975) 16,025 50,000 281,544 231,544 $ - $ 247,569 $ 247,569 125 Indian River County, Florida Budgetary Comparison Schedule Tourist Development For the Year Ended September 30, 2010 REVENUES Taxes Interest Miscellaneous Total revenues EXPENDITURES Culture/recreation Total expenditures Excess of revenues over (under) expenditures OTHER FINANCING SOURCES Transfers in Total other financing sources Net change in fund balances Fund balances at beginning of year Fund balances at end of year 126 Variance Final Actual Positive Budget Amounts (Negative) $ 489,250 $ 496,857 $ 7,607 16,625 7,335 (9,290) - 399 399 505,875 504,591 (1,284) 1,024,278 988,924 35,354 1,024,278 988,924 35,354 (518,403) (484,333) 34,070 33,561 - (33,561) 33,561 - (33,561) (484,842) (484,333) 509 484,842 926,018 441,176 $ - $ 441,685 $ 441,685 126 Indian River County, Florida Budgetary Comparison Schedule 911 Surcharge For the Year Ended September 30, 2010 REVENUES Intergovernmental Interest Total revenues EXPENDITURES Public safety Total expenditures Excess of revenues over (under) expenditures OTHER FINANCING USES Transfers out Total other financing uses Net change in fund balances Fund balances at beginning of year Fund balances at end of year 127 Variance Final Actual Positive Budget Amounts (Negative) $ 646,000 $ 817,451 $ 171,451 - 15,832 15,832 646,000 833,283 187,283 603,250 419,237 184,013 603,250 419,237 184,013 42,750 414,046 371,296 (193,141) (193,141) - (193,141) (193,141) - (150,391) 220,905 371,296 150,391 1,442,387 1,291,996 $ - $ 1,663,292 $ 1,663,292 127 Indian River County, Florida Budgetary Comparison Schedule Drug Abuse For the Year Ended September 30, 2010 REVENUES Intergovernmental Judgments, fines and forfeits Interest Total revenues EXPENDITURES Public safety Human services Total expenditures Net change in fund balance Fund balances at beginning of year Final Budget Variance Actual Positive Amounts (Negative) $ 129,896 $ 102,256 $ (27,640) 2,000 15,762 13,762 - 1,742 1,742 131,896 119,760 (12,136) 103,917 103,917 - 27,979 27,938 41 131,896 131,855 41 (12,095) (12,095) - 152,785 152,785 Fund balances at end of year $ - $ 140,690 $ 140,690 128 Indian River County, Florida Budgetary Comparison Schedule State Housing Initiatives Partnership For the Year Ended September 30, 2010 REVENUES Intergovernmental Charges for services Interest Miscellaneous Total revenues EXPENDITURES Human services Total expenditures Excess of revenues over (under) expenditures OTHER FINANCING SOURCES Transfers in Total other financing sources Net change in fund balances Fund balances at beginning of year Fund balances at end of year Final Budget Variance Actual Positive Amounts (Negative) $ 44,859 $ 350,000 $ 305,141 50,000 138,142 88,142 - 18,096 18,096 - 307,479 307,479 94,859 813,717 718,858 1,075,582 841,697 233,885 1,075,582 841,697 233,885 (980,723) (27,980) 952,743 - 906,191 906,191 906,191 906,191 (980,723) 878,211 1,858,934 980,723 1,242,249 261,526 $ - $ 2,120,460 $ 2,120,460 129 Indian River County, Florida Budgetary Comparison Schedule Metropolitan Planning Organization For the Year Ended September 30, 2010 REVENUES Intergovernmental Interest Total revenues EXPENDITURES General government Total expenditures Net change in fund balances Fund balances at beginning of year Fund balances at end of year Final Budget Variance Actual Positive Amounts (Negative) $ 746,490 $ 507,202 $ (239,288) - 119 119 746,490 507,321 (239,169) 746,490 558,220 188,270 746,490 558,220 188,270 - (50,899) (50,899) - (69,300) (69,300) $ - $ (120,199) $ (120,199) 130 Indian River County, Florida Budgetary Comparison Schedule Multi -Jurisdictional Law Enforcement For the Year Ended September 30, 2010 REVENUES Judgments, fines and forfeits Interest Total revenues EXPENDITURES Public safety Total expenditures Excess of revenues over (under) expenditures OTHER FINANCING USES Transfers out Total other financing uses Net change in fund balances Fund balances at beginning of year Fund balances at end of year Variance Final Actual Positive Budget Amounts (Negative) $ 60,896 $ 76,070 $ 15,174 - 1,752 1,752 60,896 77,822 16,926 9,506 9,505 1 9,506 9,505 1 51,390 68,317 16,927 (51,390) (51,389) 1 (51,390) (51,389) 1 - 16,928 16,928 - 136,833 136,833 $ - $ 153,761 $ 153,761 131 Indian River County, Florida Budgetary Comparison Schedule Native Uplands Land Acquisition For the Year Ended September 30, 2010 REVENUES Interest Total revenues EXPENDITURES Physical environment Total expenditures Net change in fund balances Fund balances at beginning of year Fund balances at end of year Final Budget Variance Actual Positive Amounts (Negative) $ - $ 9,334 $ 9,334 - 9,334 9,334 55,000 1,904 53,096 55,000 1,904 53,096 (55,000) 7,430 62,430 55,000 824,737 769,737 $ - $ 832,167 $ 832,167 132 Indian River County, Florida Budgetary Comparison Schedule Beach Restoration For the Year Ended September 30, 2010 REVENUES Taxes Intergovernmental Interest Miscellaneous Total revenues EXPENDITURES Culture/recreation Total expenditures Excess of revenues over (under) expenditures OTHER FINANCING SOURCES Transfers in Total other financing sources Net change in fund balances Fund balances at beginning of year Fund balances at end of year Final Budget Variance Actual Positive Amounts (Negative) $ 489,250 $ 496,858 $ 7,608 5,270,080 4,630,757 (639,323) 42,750 100,601 57,851 - 1,000 1,000 5,802,080 5,229,216 (572,864) 13,214,971 6,236,398 6,978,573 13,214,971 6,236,398 6,978,573 (7,412,891) (1,007,182) 6,405,709 6,178,959 6,178,959 - 6,178,959 6,178,959 - (1,233,932) 5,171,777 6,405,709 1,233,932 6,019,590 4,785,658 $ - $ 11,191,367 $ 11,191,367 133 Indian River County, Florida Budgetary Comparison Schedule CDBG Neighborhood Stabilization Program For the Year Ended September 30, 2010 REVENUES Intergovernmental Total revenues EXPENDITURES Economic environment Total expenditures Net change in fund balances Fund balances at beginning of year Fund balances at end of year Final Actual Budget Amounts Variance Positive (Negative) $ 4,671,360 $ 2,636,162 $ (2,035,198) 4,671,360 2,636,162 (2,035,198) 4,671,360 1,934,624 2,736,736 4,671,360 1,934,624 2,736,736 - 701,538 701,538 - (9,460) (9,460) $ - $ 692,078 $ 692,078 134 Indian River County, Florida Budgetary Comparison Schedule Florida Boating Improvement Program For the Year Ended September 30, 2010 REVENUES Intergovernmental Interest Total revenues EXPENDITURES Culture/recreation Total expenditures Net change in fund balances Fund balances at beginning of year Final Budget Variance Actual Positive Amounts (Negative) $ 153,051 $ 155,007 $ 1,956 - 10,723 10,723 153,051 165,730 12,679 353,051 67,166 285,885 353,051 67,166 285,885 (200,000) 98,564 298,564 200,000 868,083 668,083 Fund balances at end of year $ - $ 966,647 $ 966,647 135 Indian River County, Florida Budgetary Comparison Schedule Library Bequests For the Year Ended September 30, 2010 REVENUES Interest Miscellaneous Total revenues EXPENDITURES Culture/recreation Total expenditures Net change in fund balances Fund balances at beginning of year Fund balances at end of year Variance Final Actual Positive Budget Amounts (Negative) $ - $ 2,134 $ 2,134 123,588 123,588 125,722 125,722 69,801 68,621 1,180 69,801 68,621 1,180 (69,801) 57,101 126,902 69,801 153,345 83,544 $ - $ 210,446 $ 210,446 136 Indian River County, Florida Budgetary Comparison Schedule Disabled Access Program For the Year Ended September 30, 2010 REVENUES Judgments, fines and forfeits Interest Total revenues EXPENDITURES Human services Total expenditures Net change in fund balances Fund balances at beginning of year Variance Final Actual Positive Budget Amounts (Negative) $ - $ 538 $ 538 - 673 673 1,211 1,211 20,000 - 20,000 20,000 - 20,000 (20,000) 1,211 21,211 20,000 59,010 39,010 Fund balances at end of year $ - $ 60,221 $ 60,221 137 Indian River County, Florida Budgetary Comparison Schedule Federal/State Grants For the Year Ended September 30, 2010 REVENUES Intergovernmental Total revenues EXPENDITURES General government Transportation Human services Culture/recreation Total expenditures Net change in fund balances Fund balances at beginning of year Final Budget Variance Actual Positive Amounts (Negative) $ 3,520,855 $ 1,158,151 $ (2,362,704) 3,520,855 1,158,151 (2,362,704) 2,052,940 228,104 1,064,811 175,000 3,520,855 133,986 228,104 689,171 143,760 1,195,021 (36,870) 1,918,954 375,640 31,240 2,325,834 (36,870) (8,825) (8,825) Fund balances at end of year $ - $ (45,695) $ (45,695) 138 Indian River County, Florida Budgetary Comparison Schedule Traffic Education Program For the Year Ended September 30, 2010 REVENUES Judgments, fines and forfeits Interest Total revenues EXPENDITURES Transportation Total expenditures Net change in fund balances Fund balances at beginning of year Final Budget Variance Actual Positive Amounts (Negative) $ 45,000 $ 525 $ (44,475) - 753 753 45,000 1,278 (43,722) 75,586 35,318 40,268 75,586 35,318 40,268 (30,586) (34,040) (3,454) 30,586 76,326 45,740 Fund balances at end of year $ - $ 42,286 $ 42,286 139 Indian River County, Florida Budgetary Comparison Schedule Land Acquisition For the Year Ended September 30, 2010 REVENUES Interest Miscellaneous Total revenues EXPENDITURES Physical environment Total expenditures Net change in fund balances Fund balances at beginning of year Fund balances at end of year .m (634,734) 634,734 (349,536) 285,198 651,031 16,297 301,495 $ 301,495 Variance Final Actual Positive Budget Amounts (Negative) $ - $ 4,467 $ 4,467 58,769 16,344 (42,425) 58,769 20,811 (37,958) 693,503 370,347 323,156 693,503 370,347 323,156 .m (634,734) 634,734 (349,536) 285,198 651,031 16,297 301,495 $ 301,495 Indian River County, Florida Budgetary Comparison Schedule East Gifford Stormwater For the Year Ended September 30, 2010 REVENUES Taxes Permits, fees and special assessments Interest Total revenues EXPENDITURES Transportation Total expenditures Excess of revenues over expenditures OTHER FINANCING USES Transfers out Total other financing uses Net change in fund balances Fund balances at beginning of year Fund balances at end of year 141 Variance Final Actual Positive Budget Amounts (Negative) $ - $ 52 $ 52 1,995 1,399 (596) - 165 165 1,995 1,616 (379) 1,935 - 1,935 1,935 - 1,935 60 1,616 1,556 (60) (55) 5 (60) (55) 5 - 1,561 1,561 - 13,635 13,635 $ - $ 15,196 $ 15,196 141 Indian River County, Florida Budgetary Comparison Schedule Vero Lake Estates For the Year Ended September 30, 2010 REVENUES Taxes Permits, fees and special assessments Interest Total revenues EXPENDITURES Physical environment Transportation Total expenditures Excess of revenues over (under) expenditures OTHER FINANCING USES Transfers out Total other financing uses Net change in fund balances Fund balances at beginning of year Fund balances at end of year Final Budget Variance Actual Positive Amounts (Negative) $ - $ 2,623 $ 2,623 88,174 91,741 3,567 7,125 11,727 4,602 95,299 106,091 10,792 141,037 - 141,037 293,321 14,868 278,453 434,358 14,868 419,490 (339,059) 91,223 430,282 (4,719) (2,989) 1,730 (4,719) (2,989) 1,730 (343,778) 88,234 432,012 343,778 973,021 629,243 $ - $ 1,061,255 $ 1,061,255 142 Indian River County, Florida Budgetary Comparison Schedule Vero Beach Sports Village Reserve For the Year Ended September 30, 2010 REVENUES Miscellaneous Total revenues EXPENDITURES Culture/recreation Total expenditures Net change in fund balances Fund balances at beginning of year Variance Final Actual Positive Budget Amounts (Negative) 1,701,452 463,551 1,237,901 1,701,452 463,551 1,237,901 (1,701,452) (463,551) 1,237,901 1,701,452 1,701,452 Fund balances at end of year $ - $ 1,237,901 $ 1,237,901 143 Indian River County, Florida Budgetary Comparison Schedule Clerk Special Revenue For the Year Ended September 30, 2010 REVENUES Charges for services Judgments, fines and forfeits Interest Miscellaneous Total revenues EXPENDITURES General government Court related Total expenditures Excess of revenues over (under) expenditures OTHER FINANCING USES Transfers out Total other financing uses Net change in fund balances Fund balances at beginning of year Fund balances at end of year Final Budget Variance Actual Positive Amounts (Negative) $ 285,000 $ 306,753 $ 21,753 324,000 172,276 (151,724) 10,100 16,200 6,100 315,363 - (315,363) 934,463 495,229 (439,234) 416,153 338,814 77,339 90,375 90,261 114 506,528 429,075 77,453 427,935 66,154 (361,781) (427,935) (14,086) 413,849 (427,935) (14,086) 413,849 - 52,068 52,068 - 2,566,745 2,566,745 $ - $ 2,618,813 $ 2,618,813 144 Indian River County, Florida Budgetary Comparison Schedule Sheriff Special Revenue For the Year Ended September 30, 2010 REVENUES Intergovernmental Charges for services Judgments, fines and forfeits Interest Total revenues EXPENDITURES Public safety Court related Total expenditures Excess of revenues over (under) expenditures OTHER FINANCING SOURCES Transfers in Total other financing sources Net change in fund balances Fund balances at beginning of year Final Budget Variance Actual Positive Amounts (Negative) $ 846,490 $ 846,490 $ - 484,245 322,361 (161,884) 238,611 193,319 (45,292) 6,000 6,184 184 1,575,346 1,368,354 (206,992) 1,746,617 1,743,723 2,894 6,500 6,494 6 1,753,117 1,750,217 2,900 (177,771) (381,863) (204,092) 177,771 177,771 - 177,771 177,771 - (204,092) (204,092) 2,274,383 2,274,383 Fund balances at end of year $ - $ 2,070,291 $ 2,070,291 145 Indian River County, Florida Budgetary Comparison Schedule Supervisor of Elections Special Revenue For the Year Ended September 30, 2010 REVENUES Intergovernmental Interest Total revenues EXPENDITURES General government Total expenditures Excess of revenues under expenditures OTHER FINANCING SOURCES Transfers in Total other financing sources Net change in fund balances Fund balances at beginning of year Fund balances at end of year 146 Variance Final Actual Positive Budget Amounts (Negative) $ - $ 66,280 $ 66,280 - 42 42 - 66,322 66,322 - 70,340 (70,340) - 70,340 (70,340) - (4,018) (4,018) - 2,402 2,402 - 2,402 2,402 - (1,616) (1,616) - 6,972 6,972 $ - $ 5,356 $ 5,356 146 Indian River County, Florida Budgetary Comparison Schedule Street Lighting Districts For the Year Ended September 30, 2010 REVENUES Taxes Permits, fees and special assessments Interest Miscellaneous Total revenues EXPENDITURES Transportation Total expenditures Excess of revenues over (under) expenditures OTHER FINANCING USES Transfers out Total other financing uses Net change in fund balances Fund balances at beginning of year Fund balances at end of year Final Budget Variance Actual Positive Amounts (Negative) $ - $ 2,919 $ 2,919 178,554 186,560 8,006 7,547 6,001 (1,546) 3,205 2,669 (536) 189,306 198,149 8,843 229,318 185,327 43,991 229,318 185,327 43,991 (40,012) 12,822 52,834 (6,808) (5,613) 1,195 (6,808) (5,613) 1,195 (46,820) 7,209 54,029 46,820 492,427 445,607 $ - $ 499,636 $ 499,636 147 Indian River County, Florida Budgetary Comparison Schedule Disaster Recovery Grants For the Year Ended September 30, 2010 REVENUES Intergovernmental Total revenues EXPENDITURES Economic environment Total expenditures Net change in fund balances Fund balances at beginning of year Fund balances at end of year Final Budget Actual Amounts Variance Positive (Negative) $ 121,328 $ 143,580 $ 22,252 121,328 143,580 22,252 121,328 121,263 65 121,328 121,263 65 - 22,317 22,317 (55,565) (55,565) $ - $ (33,248) $ (33,248) 148 Indian River County, Florida Budgetary Comparison Schedule SHIP Hurricane Housing Recovery Grant For the Year Ended September 30, 2010 REVENUES Intergovernmental Interest Total revenues EXPENDITURES Human services Total expenditures Excess of revenues over expenditures OTHER FINANCING USES Transfers out Total other financing uses Net change in fund balances Fund balances at beginning of year Fund balances at end of year Final Budget $ 360,000 $ 360,000 360,000 Variance Actual Positive Amounts (Negative) 355,772 $ (4,228) 7,953 7,953 363.725 3.725 360,000 355,772 4,228 360,000 355,772 4,228 - 7,953 7,953 (906,191) (906,191) - (906,191) (906,191) - (906,191) (898,238) 7,953 906,191 898,238 (7,953) 149 Indian River County, Florida Budgetary Comparison Schedule Parks Development For the Year Ended September 30, 2010 REVENUES Interest $ Total revenues EXPENDITURES Culture/recreation Total expenditures Net change in fund balances Fund balances at beginning of year Final Actual Budget Amounts 252 $ 252 50,242 50,242 50,242 50,242 (50,242) (49,990) Variance Positive (Negative) 252 252 252 50,242 49,990 (252) Fund balances at end of year 150 Indian River County, Florida Budgetary Comparison Schedule Spring Training Facility Bonds For the Year Ended September 30, 2010 REVENUES Taxes Intergovernmental Interest Total revenues EXPENDITURES Debt service: Principal Interest Total expenditures Net change in fund balances Fund balances at beginning of year Fund balances at end of year Final Budget Variance Actual Positive Amounts (Negative) $ 326,166 $ 331,238 $ 5,072 898,492 945,785 47,293 17,575 13,814 (3,761) 1,242,233 1,290,837 48,604 585,000 585,000 - 657,233 642,232 15,001 1,242,233 1,227,232 15,001 - 63,605 63,605 - 1,474,801 1,474,801 $ - $ 1,538,406 $ 1,538,406 151 Indian River County, Florida Budgetary Comparison Schedule Land Acquisition Bonds For the Year Ended September 30, 2010 REVENUES Taxes Interest Total revenues EXPENDITURES Debt service: Principal Interest Total expenditures Excess of revenues over (under) expenditures OTHER FINANCING USES Transfers out Total other financing uses Net change in fund balances Fund balances at beginning of year Fund balances at end of year Final Budget Variance Actual Positive Amounts (Negative) $ 5,865,726 $ 5,933,535 $ 67,809 56,950 41,249 (15,701) 5,922,676 5,974,784 52,108 4,730,000 4,730,000 - 2,155,535 2,115,906 39,629 6,885,535 6,845,906 39,629 (962,859) (871,122) 91,737 (187,560) (125,333) 62,227 (187,560) (125,333) 62,227 (1,150,419) (996,455) 153,964 1,150,419 2,841,769 1,691,350 $ - $ 1,845,314 $ 1,845,314 152 Indian River County, Florida Budgetary Comparison Schedule Optional Sales Tax For the Year Ended September 30, 2010 REVENUES Taxes Permits, fees and special assessments Intergovernmental Interest Miscellaneous Total revenues EXPENDITURES Capital projects Total expenditures Excess of revenues over (under) expenditures OTHER FINANCING USES Transfers out Total other financing uses Net change in fund balances Fund balances at beginning of year Fund balances at end of year Final Budget Variance Actual Positive Amounts (Negative) $ 12,656,718 $ 12,660,518 $ 3,800 - 14,974 14,974 2,194,433 2,885,329 690,896 380,000 178,428 (201,572) 4,965,283 126,845 (4,838,438) 20,196,434 15,866,094 (4,330,340) 26,478,333 7,487,068 18,991,265 26,478,333 7,487,068 18,991,265 (6,281,899) 8,379,026 14,660,925 (6,000,000) (6,000,000) (6,000,000) (6,000,000) (12,281,899) 2,379,026 14,660,925 12,281,899 32,334,794 20,052,895 $ - $ 34,713,820 $ 34,713,820 153 �AR 154 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, 2010 ASSETS Current assets: Cash and cash equivalents Accounts receivable - net Due from other governments Interest receivable Inventories Prepaid expenses Total current assets Non-current assets: Capital assets - depreciable Accumulated depreciation Total non-current assets Total assets LIABILITIES Current liabilities (payable from current assets): Accounts payable Claims payable Accrued compensated absences Total current liabilities (payable from current assets) Non-current liabilities: Claims payable Accrued compensated absences Total non-current liabilities Total liabilities NET ASSETS Invested in capital assets, net of related debt Unrestricted Total net assets 48,053 71,698 Geographic 127,649 Fleet Self Information 2,351,622 Management Insurance Systems Totals 64,197 2,423,808 12,823 $ 19,814 $ 26,642,402 $ 2,278,379 $ 28,940,595 50,134 1,326,658 - 1,376,792 80,895 - - 80,895 98 23,254 2,460 25,812 156,198 - - 156,198 - 1,144,119 361,723 1,144,119 307,139 29,136,433 2,280,839 31,724,411 249,617 16,901 673,437 939,955 (150,732) (15,684) (311,714) (478,130) 98,885 1,217 361,723 461,825 406,024 29,137,650 2,642,562 32,186,236 48,053 71,698 7,898 127,649 - 2,351,622 - 2,351,622 16,144 488 4,925 21,557 64,197 2,423,808 12,823 2,500,828 - 5,547,378 - 5,547,378 20,114 488 4,925 25,527 20,114 5,547,866 4,925 5,572,905 84,311 7,971,674 17,748 8,073,733 98,885 1,217 361,723 461,825 222,828 21,164,759 2,263,091 23,650,678 $ 321,713 $ 21,165,976 $ 2,624,814 $ 24,112,503 156 Indian River County, Florida Combining Statement of Revenues, Expenses, and Changes in Fund Net Assets Internal Service Funds For the Year Ended September 30, 2010 OPERATING REVENUES Charges for services: Vehicle maintenance Self insurance Geographic information systems Total revenues OPERATING EXPENSES Personal services Material, supplies, services and other operating Depreciation Total operating expenses Operating income (loss) NONOPERATING REVENUES (EXPENSES) Interest income 1,100 Gain on disposal of equipment 350 Loss on disposal of equipment (473) Total nonoperating revenues 977 Income (loss) before transfers Transfers in Change in net assets Total net assets - beginning Total net assets - ending (120,209) 225,308 20,715 247,123 - - 350 - - (473) 225,308 20,715 247,000 3,168,966 363,176 3,411,933 55,017 - 55,017 (120,209) 3,223,983 363,176 3,466,950 441,922 17,941,993 2,261,638 20,645,553 $ 321,713 $ 21,165,976 $ 2,624,814 $ 24,112,503 157 Geographic Fleet Self Information Management Insurance Systems Totals $ 3,143,549 $ - $ - $ 3,143,549 - 19,612,917 - 19,612,917 - - 760,815 760,815 3,143,549 19,612,917 760,815 23,517,281 533,067 1,328,008 231,981 2,093,056 2,698,812 15,337,963 54,003 18,090,778 32,856 3,288 132,370 168,514 3,264,735 16,669,259 418,354 20,352,348 (121,186) 2,943,658 342,461 3,164,933 NONOPERATING REVENUES (EXPENSES) Interest income 1,100 Gain on disposal of equipment 350 Loss on disposal of equipment (473) Total nonoperating revenues 977 Income (loss) before transfers Transfers in Change in net assets Total net assets - beginning Total net assets - ending (120,209) 225,308 20,715 247,123 - - 350 - - (473) 225,308 20,715 247,000 3,168,966 363,176 3,411,933 55,017 - 55,017 (120,209) 3,223,983 363,176 3,466,950 441,922 17,941,993 2,261,638 20,645,553 $ 321,713 $ 21,165,976 $ 2,624,814 $ 24,112,503 157 Indian River County, Florida Combining Statement of Cash Flows Internal Service Funds For the Year Ended September 30, 2010 Net increase (decrease) in cash and cash equivalents Cash and cash equivalents at beginning of year Cash and cash equivalents at end of year Classified as: Current assets (158,263) 2,885,893 501,627 3,229,257 178,077 23,756,509 1,776,752 25,711,338 $ 19,814 $ 26,642,402 $ 2,278,379 $ 28,940,595 $ 19,814 $ 26,642,402 $ 2,278,379 $ 28,940,595 158 Geographic Fleet Self Information Management Insurance Systems Totals CASH FLOWS FROM OPERATING ACTIVITIES Cash received from customers $ 3,154,613 $ 19,390,125 $ 760,815 $ 23,305,553 Cash paid to suppliers for goods and services (2,786,869) (15,477,404) (53,270) (18,317,543) Cash paid to employees for services (527,941) (1,331,362) (227,408) (2,086,711) Net cash provided by (used in) operating activities (160,197) 2,581,359 480,137 2,901,299 CASH FLOWS FROM NONCAPITAL FINANCING ACTIVITIES Transfers - 55,017 - 55,017 Net cash provided by noncapital financing activities - 55,017 - 55,017 CASH FLOWS FROM CAPITAL AND RELATED FINANCING ACTIVITIES Proceeds from sale of capital assets 350 - - 350 Purchase of capital assets - - (1,152) (1,152) Net cash provided by (used in) capital and related financing activities 350 - (1,152) (802) CASH FLOWS FROM INVESTING ACTIVITIES Interest and dividends on investments 1,584 249,517 22,642 273,743 Net cash provided by investing activities 1,584 249,517 22,642 273,743 Net increase (decrease) in cash and cash equivalents Cash and cash equivalents at beginning of year Cash and cash equivalents at end of year Classified as: Current assets (158,263) 2,885,893 501,627 3,229,257 178,077 23,756,509 1,776,752 25,711,338 $ 19,814 $ 26,642,402 $ 2,278,379 $ 28,940,595 $ 19,814 $ 26,642,402 $ 2,278,379 $ 28,940,595 158 Indian River County, Florida Combining Statement of Cash Flows Internal Service Funds For the Year Ended September 30, 2010 RECONCILIATION OF OPERATING INCOME (LOSS) TO NET CASH PROVIDED BY OPERATING ACTIVITIES Operating income (loss) Adjustments to reconcile operating income (loss) to net cash provided by operating activities: Geographic Fleet Self Information Management Insurance Systems Totals $ (121,186) $ 2,943,658 $ 342,461 $ 3,164,933 Depreciation 32,856 3,288 132,370 168,514 (Increase) Decrease in assets: Accounts receivable (4,705) (222,792) - (227,497) Due from other governments 15,769 - - 15,769 Inventories (34,269) - - (34,269) Deposits 6,602 (140,693) - (134,091) Increase (Decrease) in liabilities: Accounts payable (60,390) (22,748) 733 (82,405) Claims payable - 24,000 - 24,000 Accrued compensated absences 5,126 (3,354) 4,573 6,345 Total adjustments (39,011) (362,299) 137,676 (263,634) Net cash provided by (used in) operating activities $ (160,197) $ 2,581,359 $ 480,137 $ 2,901,299 NONCASH CAPITAL AND RELATED FINANCING ACTIVITIES Change in fair value of investments $ (163) $ (38,886) $ 159 (4,114) $ (43,163) �AR 160 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, 2010 ASSETS Cash and cash equivalents Investments Accounts receivable Total assets LIABILITIES Accounts payable Due to other governments Other deposits held in escrow Total liabilities Balance October 1, $ 15,922,075 $ 457,981,814 $ 91,559 106,296 Balance September 30, 459,304,709 $ 14,599,180 106,666 91,189 $ 556,641 $ 72,060,307 $ 72,155,059 $ 461,889 5,824,473 407,554,968 407,895,867 5,483,574 9,632,630 36,133,228 37,020,952 8,744,906 $ 16,013,744 $ 515,748,503 $ 517,071,878 $ 14,690,369 162 Statistical Section This part of the Indian River County Comprehensive Annual Financial Report 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 (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 —15) 180-188 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 16 —17) 189-190 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 18 — 21) 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 22 — 27) 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. 163 Governmental activities Invested in capital assets, net of related debt Restricted Unrestricted Total governmental activities net assets Business -type activities Invested in capital assets, net of related debt Restricted Unrestricted Total business -type activities net assets Primary government Invested in capital assets, net of related debt Restricted Unrestricted Total primary government net assets Indian River County, Florida Net Assets by Component Last Ten Fiscal Years (accrual basis of accounting) 2001 2002 2003 2004 $ 214,622,489 $ 225,179,898 $ 227,795,289 $ 242,057,257 100, 742,230 113,252,580 112,083, 712 128,024,220 17,953,280 17,559,989 20,389,245 22,697,741 $ 333,317,999 $ 355,992,467 $ 360,268,246 $ 392,779,218 $ 97,701,866 $ 106,004,641 $ 113,354,198 $ 122,280,348 26,758,894 31,179,151 42,971,494 57,825,011 43,816,852 45,137,431 47,079,296 44,084,834 $ 168,277,612 $ 182,321,223 $ 203,404,988 $ 224,190,193 $ 312,324,355 $ 331,184,539 $ 341,149,487 $ 364,337,605 127,501,124 144,431,731 155,055,206 185,849,231 61,770,132 62,697,420 67,468,541 66,782,575 $ 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. 164 Schedule 1 2005 2006 2007 2008 2009 2010 $ 264,193,976 $ 278,213,361 $ 374,501,758 (A) $ 445,541,175 $ 461,709,848 $ 480,243,738 150,019,583 158,046,966 173,236,941 (B) 163,119,085 158,306,364 132,928,838 60,737,524 121,561,389 60,726,026 (B) 55,081,576 55,914,407 85,810,359 $ 474,951,083 $ 557,821,716 $ 608,464,725 $ 663,741,836 $ 675,930,619 $ 698,982,935 $ 134,402,945 $ 152,168,135 $ 174,540,682 $ 206,069,196 $ 223,273,040 $ 223,375,337 81,084,337 89,071,967 83,840,471 75,814,407 51,021,928 27,898,292 52,553,913 53,751,547 47,338,783 24,624,779 37,122,462 54,592,201 $ 268,041,195 $ 294,991,649 $ 305,719,936 $ 306,508,382 $ 311,417,430 $ 305,865,830 $ 398,596,921 $ 430,381,496 $ 549,042,440 $ 651,610,371 $ 684,982,888 $ 703,619,075 231,103,920 247,118,933 257,077,412 238,933,492 209,328,292 160,827,130 113,291,437 175,312,936 108,064,809 79,706,355 93,036,869 140,402,560 $ 742,992,278 $ 852,813,365 $ 914,184,661 $ 970,250,218 $ 987,348,049 $ 1,004,848,765 165 Expenses Governmental activities: General government Public safety Physical environment Transportation Economic environment Human service Cultural/recreation Court related Interest on long-term debt Total governmental activities expenses Business -type activities: Water and sewer Solid waste Golf course Other Total business -type activities expenses Total primary government expenses Program Revenues Governmental activities: Charges for services: General government Public safety Physical environment Transportation Human service Cultural/recreation Court related Operating grants and contributions Capital grants and contributions Total governmental activities program revenues Business -type activities: Charges for services: Water and sewer Solid waste Golf course Other Operating grants and contributions Capital grants and contributions Total business -type activities program revenues Total primary government program revenues Notes Indian River County, Florida Changes in Net Assets Last Ten Fiscal Years (accrual basis of accounting) 2001 2002 2003 13,756,310 42,896,286 2,145,214 13,525,659 1,358,025 4,612,841 10,631,008 5,151,347 587,004 94,663,694 22,459,042 8,245,056 2,894,314 1,409,610 35,008,022 $ 129,671,716 6,357,015 3,626,767 97,687 3,893,294 69,594 1,094,588 901,485 5,122,151 3,756,327 24,918,908 18,917,518 9,628,155 3,033,997 1,673,916 111,252 9,973,352 43,338,190 68,257,098 17,942,122 45,186,455 1,648,446 14,878,771 357,911 5,975,775 8,157,505 5,472,095 1,710,405 101,329,485 23,240,123 8,043,106 2,777,519 1,882,038 35,942,786 $ 137,272,271 5,349,797 4,120,093 64,314 4,476,914 186,290 473,043 1,515,840 5,425,369 4,818,626 26,430,286 19,962,496 9,897,222 2,897,502 2,009,737 11,256,039 46,022,996 $ 72,453,282 20,323,241 46,409,761 791,383 16,264,468 587,227 6,165,603 8,711,251 6,144,728 1,549,957 106,947,619 25,015,125 8,589,141 2,842,907 2,033,754 38,480,927 145,428,546 6,513,557 4,288,357 29,260 5,584,999 302,998 776,829 1,458,688 5,175,499 19,908,254 (A) 44,038,441 21,210,935 10,187,432 3,112,087 2,432,420 271,662 19,796,906 (B) 57,011,442 $ 101,049,883 (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. (H) 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 ?nn4 23,287,533 (C) 54,052,726 (C) 1,039,550 21,335,262 (C) 639,826 7,664,422 (C) 9,616,323 (C) 6,221,983 1,313,340 125,170,965 26,907,959 14,103,641 (C) 2,806,115 2,532,617 46,350,332 $ 171,521,297 7,593,486 3,927,664 92,354 11,182,015 604,379 813,827 1,449,771 9,270,478 11,784,511 (C) 46,718,485 22,984,883 11,160,368 3,099,287 3,202,380 5,760,512 19,138,278 (B) 65,345,708 $ 112,064,193 Schedule 2 2005 2006 2007 2008 2009 2010 $ 18,165,441 $ 14,642,124 $ 15,506,424 $ 7,416,850 $ 25,837,007 $ 23,506,576 54,271,542 58,578,985 42,050,455 (J) 70,973,212 (K) 71,221,082 68,235,492 2,850,738 8,490,570 (E) 34,998,512 (E) 27,974,837 813,580 1,405,690 21,726,741 22,011,006 26,173,989 25,742,974 23,711,653 20,861,672 696,448 1,077,731 950,024 4,583,763 (L) 661,897 2,525,988 7,385,726 12,270,899 (F) 13,925,599 12,590,578 8,453,562 7,370,995 10,775,291 11,546,217 31,196,252 (H) 9,510,029 24,559,117 (0) 16,009,122 5,704,361 6,014,793 6,870,466 7,265,471 6,765,203 6,251,773 1,246,237 2,315,372 (G) 3,220,907 (G) 2,764,803 2,906,802 2,714,422 122,822,525 136,947,697 174,892,628 168,822,517 164,929,903 148,881,730 30,260,577 33,387,825 37,518,226 41,354,025 (M) 37,523,097 34,748,276 19,156,896 (C) 11,558,323 10,331,431 11,355,697 10,407,437 10,683,984 2,939,321 3,058,307 3,084,837 2,775,497 2,937,141 2,715,607 3,768,301 4,202,588 3,703,658 3,010,668 2,168,894 1,858,420 56,125,095 52,207,043 54,638,152 58,495,887 53,036,569 50,006,287 $ 178,947,620 $ 189,154,740 $ 229,530,780 $ 227,318,404 $ 217,966,472 $ 198,888,017 $ 8,779,557 $ 10,437,774 $ 7,957,770 $ 6,943,354 $ 6,028,321 $ 5,889,678 4,712,594 7,151,354 5,728,644 5,754,082 5,884,118 5,267,209 631,456 854,219 1,447,553 972,865 636,219 21,006 37,384,003 (D) 16,619,853 5,618,055 5,478,734 2,157,456 (P) 1,514,132 821,811 754,916 545,305 331,856 204,299 295,812 800,555 5,480,612 2,425,679 1,730,471 1,322,785 1,328,225 2,294,908 2,466,882 2,800,680 2,971,093 2,375,430 545,967 16,310,024 (C) 13,420,891 25,561,608 (1) 15,227,659 11,077,388 15,772,265 6,069,586 13,081,116 13,441,915 29,165,641_(N) 15,032,731 7,016,429 77,804,494 70,267,617 65,527,209 68,575,755 44,718,747 37,650,723 25,579,512 28,029,062 27,541,849 27,876,971 26,957,649 27,738,920 16,874,618 13,741,864 11,946,566 10,758,812 9,713,883 8,972,136 3,247,815 3,306,424 3,374,772 3,313,994 3,279,135 3,148,029 4,535,869 4,746,668 3,250,585 2,726,888 1,572,693 1,612,870 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 1,713,074 96,868,753 77,840,549 55,915,971 55,697,275 46,466,939 43,185,029 174,673,247 $ 148,108,166 $ 121,443,180 $ 124,273,030 $ 91,185,686 $ 80,835,752 Continued 167 Net (Expense)/Revenue Governmental activities Business -type activities Total primary government net expenses General Revenues and Other Chances in Net Assets Governmental activities: Property taxes, levied for general purposes Property taxes, levied for debt service Sales and use taxes Franchise fees State shared revenues Insurance recoveries Interest earnings Miscellaneous Transfers Total governmental activities Business -type activities: State shared revenues Interest earnings Miscellaneous Transfers Total business -type activities Total primary government Indian River County, Florida Changes in Net Assets Last Ten Fiscal Years (accrual basis of accounting) 2001 2002 2003 2004 $ (69,744,826) $ (74,899,199) $ (62,909,178) $ (78,452,480) (A) 8,330,168 10,080,210 18,530,515 (B) 18,995,376 (B) $ (61,414,658) $ (64,818,989) $ (44,378,663) $ (59,457,104) $ 50,825,605 $ 55,407,180 $ 60,139,514 $ 67,701,525 1,570,336 1,581,362 2,595,265 2,427,908 15,620,653 16,983,678 17,162,979 18,825,771 6,255,747 5,797,407 6,222,326 6,720,166 12,228,528 12,914,452 10,605,656 11,608,557 10,637,239 5,189,432 2,787,928 2,536,347 697,932 1,103,457 1,761,754 1,336,789 (240,665) (1,403,301) (157,870) (193,611) 97,595,375 97,573,667 101,117,552 110,963,452 6,293,439 3,790,253 2,332,013 1,590,203 85,496 15,100 63,367 6,015 117,130 158,048 157,870 193,611 6,496,065 3,963,401 2,553,250 1,789,829 $ 104,091,440 $ 101,537,068 $ 103,670,802 $ 112,753,281 Chance 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. Schedule 2 - Continued 2005 2006 2007 2008 2009 2010 $ (45,018,031) $ (66,680,080) $ (109,365,419) $ (100,246,762) $ (120,211,156) $ (111,231,007) 40,743,658 (B) 25,633,506 1,277,819 (2,798,612) (6,569,630) (6,821,258) $ (4,274,373) $ (41,046,574) $ (108,087,600) $ (103,045,374) $ (126,780,786) $ (118,052,265) $ 71,698,850 $ 82,448,807 (C) $ 92,592,309 $ 92,483,561 $ 87,265,989 $ 78,670,463 2,480,497 2,465,462 7,094,485 7,343,180 7,131,231 5,933,535 21,892,558 21,855,885 20,738,502 20,088,899 19,292,179 19,022,728 7,941,020 9,318,394 9,732,773 9,443,399 9,670,169 9,254,621 14,022,896 13,043,670 12,368,421 11,596,227 11,227,450 17,487,653 3,666,960 1,104,116 - - - - 4,444,772 12,163,993 16,004,890 10,347,019 5,747,573 2,079,873 1,235,708 2,089,540 1,583,343 2,170,033 2,018,901 2,061,415 (193,365) 5,060,846 (D) (106,295) 2,051,555 (7,452,905) (25,965) 127,189,896 149,550,713 160,008,428 155,523,873 134,900,587 134,484,323 - - - - 417,500 - 2,861,308 6,335,240 9,209,517 5,553,239 3,685,805 1,173,512 52,671 42,554 134,656 85,374 7,893 70,181 193,365 (5,060,846) (D) 106,295 (2,051,555) 7,452,905 25,965 3,107,344 1,316,948 9,450,468 3,587,058 11,564,103 1,269,658 $ 130,297,240 $ 150,867,661 $ 169,458,896 $ 159,110,931 $ 146,464,690 $ 135,753,981 $ 82,171,865 $ 82,870,633 $ 50,643,009 $ 55,277,111 $ 14,689,431 $ 23,253,316 43,851,002 26,950,454 10,728,287 788,446 4,994,473 (5,551,600) $ 126,022,867 $ 109,821,087 $ 61,371,296 $ 56,065,557 $ 19,683,904 $ 17,701,716 HWe] Indian River County, Florida Fund Balances, Governmental Funds Last Ten Fiscal Years (modified accrual basis of accounting) 2001 2002 2003 2004 General Fund Reserved Unreserved 17,481,844 Total general fund $ 17,481,844 $ 18,244,725 $ 20,104,115 $ 20,623,340 18,244,725 20,104,115 20,623,340 All other governmental funds Reserved $ 49,037,252 $ 40,013,059 $ 40,667,031 $ 47,458,489 Unreserved, reported in: Special revenue funds 56,582,715 75,879,893 69,317,385 74,344,120 Total all other governmental funds $ 105,619,967 $ 115,892,952 $ 109,984,416 $ 121,802,609 Total governmental funds $ 123,101,811 $ 134,137,677 $ 130,088,531 $ 142,425,949 General Fund Nonspendable Restricted Committed Assigned Unassigned Total general fund All other governmental funds Nonspendable Restricted Committed Assigned Unassigned Total all other governmental funds Total governmental funds Notes: (A) The County implemented GASB Statement 54 in fiscal year 2010. 170 Schedule 3 2005 2006 2007 2008 2009 2010(A) $ - $ - $ - $ 8,000,000 $ 8,000,000 $ N/A 30,152,425 45,300,882 50,321,956 44,874,259 47,616,773 N/A $ 30,152,425 $ 45,300,882 $ 50,321,956 $ 52,874,259 $ 55,616,773 $ N/A $ 50,257,972 $ 38,075,117 $ 23,047,708 $ 49,667,320 $ 53,252,040 $ N/A N/A 115,822,479 183,318,603 149,564,925 96,950,614 91,600,421 N/A $ 166,080,451 $ 221,393,720 $ 172,612,633 $ 146,617,934 $ 144,852,461 $ N/A $ 196,232,876 $ 266,694,602 $ 222,934,589 $ 199,492,193 $ 200,469,234 $ N/A $ 162,760 18,290 21,757,565 1,415,000 33,160,873 $ 56,514,488 $ 2,316,373 130,175,284 4,691,573 9,471,022 (1,184,722) $ 145,469,530 $ 201,984,018 171 Revenue Taxes Permits, fees, and special assessments Intergovernmental Charges and services Judgments, fines and forfeits Interest Miscellaneous Total Revenues Expenditures Current: General government Public safety Physical environment Transportation Economic environment Human service Culture/recreation Court related Debt service: Principal Interest and fiscal charges Capital outlay Indian River County, Florida Changes in Fund Balances, Governmental Funds Last Ten Fiscal Years (modified accrual basis of accounting) 2001 2002 2003 2004 42,872,181 45,352,323 47,565,048 $ 73,553,625 $ 80,488,343 $ 86,120,084 $ 95,675,370 4,293,579 4,746,172 5,499,533 11,788,168 18,764,102 20,802,982 35,213,140 26,588,303 11,037,594 11,368,399 13,683,108 14,282,587 1,251,098 1,421,542 1,584, 737 1,508,786 9,333,122 5,007,150 2,999,915 1,999,574 1,594,863 2,362,780 1,964,177 1,791,613 2,394,142 604,358 1,621,178 119,827,983 126,197,368 147,064,694 153,634,401 14,834,937 16,979,694 18,446, 787 19,996,339 42,872,181 45,352,323 47,565,048 55,792,130 1,312,972 1,473,749 17,613,489 1,751,551 11,801,892 16,686,374 19,442,909 21,928,790 1,351,831 347,096 583,850 627,914 4,317,086 5,756,579 6,178,917 7,185,411 8,781,914 9,117,900 18,378,068 13,179,751 5,323,388 5,802,798 5,998,260 6,210,614 1,255,352 2,229,201 2,881,492 2,394,142 604,358 1,621,178 1,639,145 1,333,392 17,075,909 20,767,383 12,228,005 10,994,900 Total Expenditures 109,531,820 126,134,275 150,955,970 141,394,934 Excess of revenues over (under) expenditures 10,296,163 63,093 (3,891,276) 12,239,467 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 160,765 275,000 - 291,562 Transfers out (240,665) (302,227) (157,870) (193,611) Transfers in Total other financing sources (uses) 16,872,877 10,972,773 (157,870) 97,951 Net change in fund balances $ 27,169,040 $ 11,035,866 $ (4,049,146) $ 12,337,418 Debt service as a percentage of noncapital expenditures * 2.1% 4.0% 4.4% 3.1% * Not possible to determine capital expenditures in functional expenditure categories. 172 2005 2006 2007 2008 2009 Schedule 4 2010 $ 104,012,925 $ 116,088,548 $ 130,158,069 $ 119,915,640 $ 113,689,399 $ 103,626,726 38,043,246 26,285,557 8,397,437 15,888,780 12,433,598 11,322,039 35,973,818 38,261,489 54,252,074 49,065,955 34,305,682 37,687,574 18,151,546 18,204,600 18,997,529 18,678,544 16,852,653 14,665,805 1,715,875 2,069,593 2,403,093 2,137,413 1,792,517 852,012 4,083,164 10,574,489 15,777,318 10,052,801 5,721,869 2,061,385 1,398,166 4,597,369 3,495,610 2,449,035 2,489,532 2,383,493 203,378,740 216,081,645 233,481,130 218,188,168 187,285,250 172,599,034 20,107,020 21,831,839 24,815,255 25,323,595 22,566,113 20,894,116 57,045,359 65,975,870 72,907,822 73,982,636 74,813,164 71,489,613 2,989,117 8,955,262 34,324,331 28,111,033 910,213 1,131,173 21,285,597 30,610,413 49,503,680 50,231,090 38,111,512 27,497,907 713,019 1,054,239 968,227 4,579,574 653,547 2,520,339 7,270,391 12,470,222 13,862,463 12,619,575 8,621,760 7,267,406 15,062,134 16,380,438 23,751,173 21,068,267 15,450,688 18,453,642 5,630,734 5,915,727 6,649,724 6,940,682 6,620,830 6,214,831 2,239,663 2,615,659 4,870,876 5,069,591 5,120,000 5,315,000 1,255,837 1,790,431 3,255,767 2,803,585 2,948,758 2,758,138 15,779,577 37,848,475 42,489,997 11,617,867 10,435,212 7,487,068 149,378,448 205,448,575 277,399,315 242,347,495 186,251,797 171,029,233 54,000,292 10,633,070 (43,918,185) (24,159,327) 1,033,453 1,569,801 - 49,996,735 - - - - - - 264,467 126,000 - - (193,365) (236,067) (19,736,023) (13,254,013) (14,366,145) (17,057,014) - 10,067,988 19,629,728 13,844,944 14,309,733 17,001,997 (193,365) 59,828,656 158,172 716,931 (56,412) (55,017) $ 53,806,927 $ 70,461,726 $ (43,760,013) $ (23,442,396) $ 977,041 $ 1,514,784 3.0% 3.4% 4.8% 5.0% 5.4% 5.6% 173 Indian River County, Florida Tax Revenues by Source, Governmental Funds Last Ten Fiscal Years (A) The County's primary source of revenue is property taxes, amounting to 82 percent of Governmental Funds tax revenues in 2010. 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 (modified accrual basis of accounting) Schedule 5 Fiscal Year Property (A) Sales & Use Tourist Franchise (B) Gasoline Other Total 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 2010 84,603,998 12,660,518 1,324,953 - 3,498,698 1,538,559 103,626,726 (A) The County's primary source of revenue is property taxes, amounting to 82 percent of Governmental Funds tax revenues in 2010. 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 Fiscal Property Property Total Tax -Exempt Assessed Year Actual Value Actual Value Actual Value Property Value 2001 $ 9,109,672,314 $ 725,390,231 $ 9,835,062,545 $ 2,394,165,810 $ 7,440,896,735 2002 10,539,705,283 707,941,621 11,247,646,904 2,706,441,764 8,541,205,140 2003 11,985,128,952 694,305,280 12,679,434,232 3,178,543,019 9,500,891,213 2004 13,547,372,018 693,374,322 14,240,746,340 3,556,717,407 10,684,028,933 2005 15,716,463,269 699,716,008 16,416,179,277 4,236,183,618 12,179,995,659 2006 19,265,033,998 712,011,582 19,977,045,580 5,734,060,645 14,242,984,935 2007 25,458,676,130 755,187,275 26,213,863,405 8,366,701,791 17,847,161,614 2008 25,155,652,635 782,529,196 25,938,181,831 7,357,884,893 18,580,296,938 2009 24,141,420,963 739,467,578 24,880,888,541 7,431,618,464 17,449,270,077 2010 21,272,439,325 761,011,306 22,033,450,631 6,237,291,938 15,796,158,693 Source: Indian River County Property Appraiser; values are established as of January 1 of the previous calendar year, i.e., January 1, 2009 taxable values apply to the fiscal year ending September 30, 2010. 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 Total Direct Tax Rate 5.5408 5.5234 5.4713 5.5181 5.1563 4.9173 4.3250 4.1037 4.1493 4.1666 Indian River County, Florida Property Tax Rates Direct and Overlapping Tax Rates Last Ten Fiscal Years 2001 2002 2003 2004 County direct rate General fund 4.1014 4.0501 3.8729 3.8377 Municipal service 1.4394 1.4733 1.5984 1.6804 Total direct rate (A) 5.5408 5.5234 5.4713 5.5181 County -wide district school board rate 9.5570 9.0820 8.7320 8.7100 Other County -wide rates Emergency Management Services District 2.4913 2.3660 2.2750 2.1871 Land acquisition bond 0.2165 0.1947 0.2839 0.2344 Total other County -wide rates 2.7078 2.5607 2.5589 2.4215 Total County -wide rate (B) 17.8056 17.1661 16.7622 16.6496 City rates Fellsmere 5.7500 5.7500 5.7500 5.7500 Indian River Shores 1.4280 1.4284 1.4370 1.4730 Sebastian 5.0000 4.5904 4.5904 4.5904 Orchid 1.6793 1.3430 0.9354 0.8954 Vero Beach 2.1425 2.1425 2.1425 2.1425 Average of cities rates 3.2000 3.0509 2.9711 2.9703 Other special district rates 1.6290 1.6105 1.9008 2.1548 (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 2005 2006 2007 2008 2009 2010 3.6233 3.5204 3.1914 3.0202 3.0689 3.0892 1.5330 1.3969 1.1336 1.0835 1.0804 1.0774 5.1563 4.9173 4.3250 4.1037 4.1493 4.1666 2.1942 2.1700 2.1747 2.1283 2.1368 2.1027 15.8495 15.3273 13.9427 13.7700 13.3261 13.8653 5.7500 5.7500 5.7500 4.4301 4.4300 4.4300 1.4730 1.4730 1.4730 1.3923 1.3923 1.3923 4.5904 3.9325 3.0519 2.9917 3.3456 3.3456 0.7508 0.6900 0.4525 0.4494 0.4550 0.4550 2.1425 2.2925 2.1425 1.9367 1.9367 1.9367 2.9413 2.8276 2.5740 2.2400 2.3119 2.3119 1.8923 1.6082 1.4795 1.3817 1.5362 1.7515 177 Indian River County, Florida Principal Property Taxpayers Year 2010 and Year 2001 The New Piper Aircraft Horizon Outlet Center Ltd. Wal-Mart Stores Total Principal Property Taxpayers Real Property Assessed Valuation $ 473,254,215 Total County Taxable Valuation $ 15,796,158,693 (from schedule 6) Source: Indian River County Property Appraiser 2010 2001 Schedule 8 Real Real Property Percentages Assessed Taxpayer Valuation of Total Florida Power & Light $ 97,540,932 Disney Vacation Dev. Inc. 73,978,167 Adult Community Total Services 51,563,000 BellSouth Telecomm Inc. 51,024,833 I.R. Mall Association, Ltd. 43,145,900 Johns Island Club Inc. 43,873,235 Windsor Properties 32,987,768 Fellsmere Joint Venture 30,313,940 Sebastian Hospital Inc. 24,904,164 CVS Vero FL Distribution LLC 23,922,276 The New Piper Aircraft Horizon Outlet Center Ltd. Wal-Mart Stores Total Principal Property Taxpayers Real Property Assessed Valuation $ 473,254,215 Total County Taxable Valuation $ 15,796,158,693 (from schedule 6) Source: Indian River County Property Appraiser 2010 2001 Schedule 8 178 3.00% $ 431,736,312 5.44% $ 7,440,896,735 Percentages Real Percentages of Total Property of Total Assessed Assessed Assessed Rank Valuation Valuation Rank Valuation 1 0.62 $ 58,846,320 3 0.79 2 0.47 74,904,118 1 1.01 3 0.33 - - 4 0.32 63,903,439 2 0.86 5 0.27 54,257,889 4 0.73 6 0.28 30,137,414 7 0.41 7 0.21 32,183,769 6 0.43 8 0.19 27,141,460 10 - 9 0.16 - - 10 0.15 - - - 32,878,625 5 0.44 - 29,737,070 8 0.40 - 27,746,208 9 0.37 178 3.00% $ 431,736,312 5.44% $ 7,440,896,735 Total Current Tax Tax Year Levy Collections 2001 $ 53,727,318 $ 52,148,971 2002 59,184,019 56,856,770 2003 65,289,186 2004 72,306,331 2005 76,748,078 2006 87,754,823 2007 102,986,045 2008 103,700,766 2009 97,439,623 2010 87,360,868 62,668,552 69,906,761 73,991,702 84,736,835 99,404,127 99,716,496 94,107,423 84,431,741 Indian River County, Florida Property Tax Levies And Collections Last Ten Fiscal Years Schedule 9 Percent of Current Tax Delinquent Collections Tax To Tax Levy Collections (1) 97.06% $ 158,661 $ 96.07 95,364 95.99 7,797 96.68 176,345 96.41 111,220 96.56 34,344 96.52 61,566 96.16 48,241 96.58 273,002 96.65 171,392 Percent of Total Total Tax Tax Collections Collections To Tax Levy 52,307,632 97.36% 56,952,134 96.23 62,676,349 96.00 70,083,106 74,102,922 84,771,179 99,465,693 99,764,737 94,3 80,425 84,603,133 96.93 96.55 96.60 96.58 96.20 96.86 96.84 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 I% in the month of February. The taxes paid in March are without discount. (1) 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 to 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 Capital Facility Bonds Revenue Capital Water & Sewer Year Bonds (A) Leases 2001 Series Bonds (B) Leases Bonds (C) 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 2010 43,480,000 - 12,310,000 3,175,000 - 49,850,000 (A) General Obligation Bonds include Series 2001, Refunding Series 2003, and Limited General Obligation Bonds, Series 2006. This information is also presented on Schedule 11. (B) Recreational Revenue Refunding Bonds, Series 2003 (C) Water & Sewer Bonds include Series 1993, Refunding Series 2005, and Series 2009. (D) Information not available (E) Refer to Schedule 16 for personal income and population information Further information on these notes may be found in Note 13. Source for per capita income is University of Florida, Bureau of Economic and Business Research. Schedule 10 181 Percentage Total of Total Debt Debt Primary to Personal Per Government Income (E) Capita (E) $ 111,738,191 2.45% $ 966 118,649,009 2.54 1,004 113,627,518 2.33 938 108,979,938 1.86 859 100,528,512 1.57 773 143,593,786 2.05 1,062 135,923,616 1.74 973 127,793,126 1.67 902 117,510,000 (D) 831 108,815,000 (D) 771 181 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 11 (A) Columns are provided as additional information for General Obligation Bonds (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 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 2001 115,716 $ 7,440,896,735 $ 10,215,000 $ 1,609,998 $ 8,605,002 0.0012 74.3631 2002 118,149 8,541,205,140 19,810,000 1,085,999 18,724,001 0.0022 158.4779 2003 121,274 9,500,891,213 17,725,000 684,016 17,040,984 0.0018 140.5164 2004 126,829 10,684,028,933 16,080,000 867,776 15,212,224 0.0014 119.9428 2005 130,043 12,179,995,659 14,385,000 1,106,353 13,278,647 0.0011 102.1097 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 2010 141,198 15,796,158,693 43,480,000 1,845,314 41,634,686 0.0026 294.8674 (A) Columns are provided as additional information for General Obligation Bonds (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, 2010 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, 2010 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 $ 4,274,882 (A) 100% $ 4,274,882 Indian River County Limited General Obligation Bonds, Series 2006 37,359,804 (B) 100 37,359,804 Total direct debt of County: 41,634,686 Indian River County School District General Obligation Bonds, 2002 Refunding 10,644,012 (C) 100 10,644,012 Indian River County School District General Obligation Bonds, 2003 Refunding 1,911,382 (C) 100 1,911,382 Other debt: Indian River County School District Certificates of Participation 109,605,000 (C) 100 109,605,000 Indian River County School District Capital Lease Payable 1,421,555 (C) 100 1,421,555 Total overlapping debt: 123,581,949 Total direct and overlapping debt: $ 165,216,635 (A) Ending General Obligation, Series 2001 balance $ 5,210,000 Less: Fund balance available in debt service fund (935,118) Net debt outstanding 4,274,882 (B) Ending Limited General Obligation, Series 2006 balance 38,270,000 Less: Fund balance available in debt service fund (910,196) Net debt outstanding 37,359,804 Total direct debt of County: $ 41,634,686 (C) Indian River County School District, as of June 30, 2010 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 �AR 185 Indian River County, Florida Pledged Revenue Coverage Water and Sewer Revenue Bonds (Series 1993A, 1996, 2005, 2009) Last Ten Fiscal Years Annual debt service Principal 2001 2002 2003 2004 Uniform Charges 4,177,559 4,102,839 4,021,989 3,936,019 Water sales $ 9,101,553 $ 9,373,866 $ 10,108,045 $ 11,037,623 Wastewater sales 8,154,933 8,534,228 8,940,200 9,439,597 Other 1,367,291 1,684,506 1,314,453 1,426,112 Total uniform charges 18,623,777 19,592,600 20,362,698 21,903,332 Septage/Sludge 293,741 381,741 348,320 278,897 Surcharges 238,079 247,137 243,342 234,746 Interest Earnings 4,577,350 2,983,032 1,797,260 1,269,838 1989/1990 Special assessments 37,235 9,409 11,650 1,564 1996 Special assessments 870,629 2,619,805 2,752,661 1,539,600 Gross revenues 24,640,811 25,833,724 25,515,931 25,227,977 Less: Direct expenses 9,388,472 9,662,508 10,723,548 12,507,398 Net revenues available for debt service $ 15,252,339 $ 16,171,216 $ 14,792,383 $ 12,720,579 Annual debt service Principal $ 1,615,000 $ 1,690,000 $ 1,765,000 $ 1,855,000 Interest 4,177,559 4,102,839 4,021,989 3,936,019 Total debt service payment $ 5,792,559 $ 5,792,839 $ 5,786,989 $ 5,791,019 Debt service coverage 2.63x 2.79x 2.56x 2.20x 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. Expenses specifically excluded: renewal and replacement, depreciation, amortization and interest expense, and loss on disposal of equipment. Note: Water and Sewer debt information can be found in Note 13. 186 Schedule 14 2005 2006 2007 2008 2009 2010 $ 12,146,416 $ 13,336,623 $ 13,529,341 $ 13,435,398 $ 13,001,743 $ 13,570,657 10,437,091 11,634,181 12,003,677 12,128,706 11,954,333 12,375,346 1,685,502 1,744,486 1,386,198 1,460,143 1,285,605 1,430,966 24,269,009 26,715,290 26,919,216 27,024,247 26,241,681 27,376,969 269,575 332,329 290,955 256,785 294,459 302,187 242,451 244,166 243,919 245,343 244,619 245,011 2,264,132 4,554,419 6,576,873 3,650,480 2,110,031 686,776 - 60,229 21,138 112 413 438 722,922 350,712 268,883 220,754 184,272 151,316 27,768,089 32,257,145 34,320,984 31,397,721 29,075,475 28,762,697 12,853,872 14,270,414 16,226,651 17,147,444 17,057,273 16,007,055 $ 14,914,217 $ 17,986,731 $ 18,094,333 $ 14,250,277 $ 12,018,202 $ 12,755,642 $ 2,020,000 $ 2,390,000 $ 2,505,000 $ 2,620,000 $ 2,745,000 $ 2,870,000 3,525,573 3,157,260 3,041,150 2,922,950 2,047,513 2,510,910 $ 5,545,573 $ 5,547,260 $ 5,546,150 $ 5,542,950 $ 4,792,513 $ 5,380,910 2.69x 3.24x 3.26x 2.57x 2.51x 2.37x 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 Requirements Year Gross (A) Operating (B) Revenues Principal Interest Total Coverage 2001 $ 3,095,768 $ 2,190,943 $ 904,825 $ 345,000 $ 390,673 $ 735,673 1.23 2002 25928,157 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 35324,127 2,554,640 769,487 460,000 179,291 639,291 1.20 2007 35396,639 2,6705309 726,330 475,000 170,016 645,016 1.13 2008 35327,236 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 2010 3,157,520 2,393,964 763,556 510,000 133,889 643,889 1.19 (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. Indian River County, Florida Demographic and Economic Statistics 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 The population and personal income information is used in Schedule 10 for calculation of Debt Per Capita and Percentage of Debt to Personal Income. O Last Ten Years Schedule 16 Total Per Capita Personal Personal Unemployment Year Population (A) Income (B) Income (B) Rate (C) 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 2007 139,757 7,810,408,000 59,419 7.3 2008 141,667 7,669,062,000 57,107 10.1 2009 141,475 (D) (D) 15.2 2010 141,198 (D) (D) 15.4 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 The population and personal income information is used in Schedule 10 for calculation of Debt Per Capita and Percentage of Debt to Personal Income. O Indian River County, Florida Principal Employers Year 2010 and Nine Years ARo Number of Employer Employees School District of Indian River County Indian River County * Indian River Medical Center Publix Supermarkets Piper Aircraft Inc. Sebastian River Medical Center John's Island City of Vero Beach Visiting Nurse Association Indian River Estates Total Total County Employees 2,080 1,411 1,334 960 850 600 550 505 475 442 9,207 52,985 Number of Employer Employees School District of Indian River County Indian River Memorial Hospital Indian River County* Publix Supermarkets The New Piper City of Vero Beach Wal-Mart Hale Groves John's Island Gracewood Fruit Total Total County Employees 1,979 1,331 1,326 715 700 681 672 500 475 465 8,844 37,486 2010 2001 Schedule 17 Percentage of Total County Employment 3.93 2.66 2.52 1.81 1.60 1.13 1.04 0.95 0.90 0.83 17.37% Percentage of Total County Employment 5.28 3.55 3.54 1.91 1.87 1.82 1.79 1.33 1.27 1.24 24.60% 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. 190 �AR 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 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 1,147 262,135,977 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 2010 394 82,995,613 2,017 20,723,725 122 30,048,727 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 ities Schedule 18 # of Additions & # of New # of Additions & Permits Alterations Permits Construction Permits Alterations 3,364 $ 30,274,210 3,588 27,333,128 4,141 37,578,377 4,395 47,075,876 13,062 119,403,505 7,072 65,822,951 3,712 53,482,334 2,850 40,039,893 2,188 34,072,491 2,948 32,545,131 2,021 $ 372,109,920 2,257 433,774,860 2,854 514,871,537 4,662 824,876,069 5,917 966,108,386 4,586 940,373,663 1,673 387,155,954 1,063 326,379,830 564 138,734,040 516 113,044,340 193 5,028 $ 54,606,378 4,922 59,451,532 5,523 66,395,897 6,330 93,249,722 17,471 176,953,400 12,702 109,721,626 7,611 91,772,466 5,536 70,771,128 3,913 51,174,803 4,965 53,268,856 Indian River County, Florida Operating Indicators by Function/Program Last Ten Fiscal Years Function/Program General Government Purchasing Purchase orders issued Probation New cases received Public Safety Fire rescue Vehicle rescue response Fire code inspections Advanced life support calls Basic life support calls (transport only) Sheriff Arrests Violent crimes Non-violent crimes Total calls for service Building department Construction permits issued Estimated value of construction (millions) $ Physical Environment Solid waste Waste stream tonnage received Total recycled material (tons) Utilities - water & sewer Number of water customers Number of wastewater customers Water ERUs Wastewater ERUs Water consumption (Average Daily Demand) 2001 2002 2003 2004 1,097 1,156 731 N/A 10,270 10,671 10,700 11,467 2,431 1,886 2,497 2,514 6,569 6,681 6,697 7,222 3,611 3,788 4,090 4,340 3,817 2,648 4,181 4,979 301 305 290 359 3,482 2,870 2,979 2,805 N/A 156,179 149,202 130,847 1,518 1,658 2,084 3,889 259.7 $ 291.5 $ 386.5 $ 642.0 245,000 274,604 277,622 349,538 111,075 79,362 81,006 72,568 26,218 27,632 27,849 33,793 16,169 16,737 17,293 19,786 39,404 41,242 44,420 46,254 29,644 30,297 32,432 33,250 6,528,000 6,897,000 7,586,000 7,660,000 (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 19 2005 2006 2007 2008 2009 2010 N/A N/A N/A N/A N/A N/A 10,602 6,880 32,488 (A) 33,845 34,480 34,529 2,215 2,420 2,593 3,527 5,917 2,358 5,623 10,728 7,537 5,862 9,085 9,751 4,606 11,105 3,643 5,759 3,486 3,269 5,172 5,211 5,012 5,620 4,331 5,065 300 652 338 353 340 310 3,930 3,462 6,192 6,383 6,099 5,719 122,893 131,489 126,490 129,389 13 8, 998 154,480 4,770 3,760 1,404 857 442 394 $ 704.0 $ 754.8 $ 280.1 $ 222.2 $ 97.7 $ 83.0 529,238 380,109 295,977 239,296 207,344 201,561 129,869 70,919 57,247 42,088 40,931 45,298 34,867 43,477 41,101 42,000 42,972 43,723 20,237 25,943 24,666 25,000 25,192 25,205 53,032 54,070 61,494 61,558 63,147 64,146 38,387 41,351 45,396 45,785 45,319 45,427 7,780,000 8,370,000 8,790,000 8,603,000 8,700,000 8,225,000 Continued 195 Indian River County, Florida Operating Indicators by Function/Program Last Ten Fiscal Years Function/Program 2001 2002 2003 2004 Transportation Public works Projects under design 8 8 8 3 Projects awarded for construction 5 5 2 3 Construction projects completed 6 3 3 5 County engineering Roads designed 11 11 12 12 Miles of roads designed 4.00 4.00 6.40 6.50 Traffic engineering Site plans reviewed 659 916 1,053 1,103 Culture/Recreation Library Circulation (County -wide) 852,567 862,783 1,012,852 1,012,241 Recreation department Total beach park attendance N/A N/A N/A N/A Athletic and event attedance N/A N/A N/A N/A Aquatic centers attendance 1,500 21,369 101,182 95,711 Shooting range Safety/Registration cards issued 2,969 5,961 4,929 4,616 Golf course Rounds played 115,927 110,514 108,684 106,871 Court Related Law library Circulation 21,491 21,529 21,172 25,627 196 Schedule 19 - Continued 2005 2006 2007 2008 2009 2010 4 5 5 6 29 13 0 4 5 5 5 7 0 4 5 5 12 6 6 11 7 8 5 6 1.71 6.50 3.50 6.00 5.00 6.00 1,274 1,135 520 332 423 271 1,079,206 1,140,904 1,188,366 1,250,075 1,314,372 1,403,367 N/A N/A N/A 415,051 437,302 467,434 N/A N/A N/A 8,673 14,730 23,750 89,000 93,088 90,503 90,475 89,787 87,107 3,718 6,036 6,784 6,784 9,050 6,471 97,465 107,048 100,539 104,716 101,810 96,593 26,481 26,255 24,759 21,107 18,512 13,079 197 Indian River County, Florida Full -Time Equivalent County Government Employees by Function/Program Last Ten Fiscal Years 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. (A) The fire department and advanced life support unions were consolidated on September 18, 2006. 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 Clerk of Circuit Court 98 99.5 104.5 106 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 Engineering 26 27 28 29 Traffic Engineering 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 I 1 I I Total 1443 1482 1522.5 1541 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. (A) The fire department and advanced life support unions were consolidated on September 18, 2006. Schedule 20 2005 2006 2007 2008 2009 2010 10 10 10 11 10 10 6 6 7 7 7 6 3 3 3 3 3 2.72 23.5 24.5 25.5 26.5 22.5 21.5 23 23 23 23 19 16 42 50 62 49 44.5 36.5 108 113 118 116 99.5 98.5 47 49 50 45 40 40 11.5 11.5 12 12 9.5 9.5 40 40 40 38 38 38 144.5 233 232 241 240 246 82 - (A) - (A) 130 200 197 197 195 198 25.5 26 29.5 29.5 29.5 29.5 276 276 301 301 301 301 45 49 50 33 18 17 17.5 11 12 12 10 9 53 53 53 51 49 49 126 131 139 130 128 118 11 13 14 15 9 9 100 103 106 100 86.5 80 33 39 42 42 33 28 22 24 26 24 21 21 0 0 0 3 2 2.28 6 6 6 4.5 3.5 3.5 15 17 15 15 14.5 13 51 51 52.5 50 45.5 47.5 39 43 42 41 39 37 56.5 56 58.5 57.5 46 37.5 3 3 3 3 3 2 6 6 6 5.5 5.5 5.5 22 21.5 21.5 18 16.5 15.5 1 1 1 1 1 1 1579 1692.5 1757.5 1704.5 1589.5 1549 199 Indian River County, Florida Capital Asset Statistics by Function/Program Last Ten Fiscal Years Function/Program 2001 493,270 General Government 42 Buildings and grounds 12 Total square footage maintained 468,470 Number of facilities and sites maintained 42 Vehicles 11 General government 3 Vehicles 18 Planning 1 Vehicles 3 GIS 62 Vehicles 2 Public Safety 2 Fire department 7 Vehicles 28 Fire stations 11 Advanced life support N/A Vehicles 10 E911 Center N/A Vehicles 601 Sheriff 78 Vehicles 212 Building department 51 Vehicles 8 Physical Environment Solid waste Vehicles 23 Telecommunications Vehicles Ag Extension Vehicles 1 Utilities - water and sewer Vehicles 39 Water treatment plants 2 Wastewater treatment facilities 7 Water main - miles N/A Force main - miles N/A Gravity sewer lines - miles N/A Transportation Road and bridges Miles maintained (paved & unpaved) 656 Bridges maintained 78 Vehicles 44 2002 2003 2004 483,470 493,270 493,270 42 42 43 12 13 17 21 23 27 3 3 3 30 35 41 11 11 11 16 19 21 214 227 241 8 13 16 26 28 32 1 1 2 54 62 74 2 2 2 7 7 7 NIA N/A N/A N/A N/A N/A N/A N/A N/A 658 601 609 78 78 78 48 51 59 Source: Internal reports prepared by the various departments of Indian River County. 200 Schedule 21 2005 2006 2007 2008 2009 2010 493,270 493,270 715,215 715,215 715,215 715,215 43 43 47 47 47 47 18 18 17 17 15 15 32 36 37 28 27 26 6 6 7 7 7 7 1 1 1 43 49 54 53 54 51 11 11 11 11 11 22 25 24 21 20 20 17 1 1 1 252 274 276 295 291 288 27 29 22 13 9 9 32 33 34 32 30 30 1 1 1 2 2 2 2 2 1 84 90 86 82 82 81 2 2 2 2 2 2 7 7 6 6 6 6 N/A 737 769 780 819 845 N/A 188 217 240 230 226 N/A 250 259 261 262 269 614 614 617 625 628 636 78 78 78 78 78 78 61 66 68 65 65 64 201 Indian River County, Florida Capital Asset Statistics by Function/Program Last Ten Fiscal Years Function/Program 2001 2002 2003 2004 Transportation - continued: Senior Resource Association Vehicles 4 7 9 10 Engineering Vehicles 5 6 8 9 Traffic engineering Traffic signals operated 104 110 114 119 Beacons operated 39 36 41 42 Vehicles 5 5 5 6 Traffic operations Vehicles 6 9 10 10 Economic Environment Rental Vehicles 1 1 1 1 Human Services Health department Vehicles 13 13 14 14 Animal Control Vehicles 1 1 2 5 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 35 37 35 Acreage 2,681 3,857 3,869 3,857 Picnic shelters maintained 51 59 62 59 Boats ramps maintained 8 8 8 8 Vehicles 13 15 16 20 Recreation Vehicles 1 2 4 4 Shooting range Vehicles N/A 1 1 1 Rifle range stations 29 29 29 29 Pistol range stations 35 35 35 35 Golf Course Holes maintained 36 36 36 36 Vehicles 1 1 1 2 202 Schedule 21 - Continued 2005 2006 2007 2008 2009 2010 20 22 25 23 25 32 9 11 12 17 16 16 122 125 132 133 133 137 37 42 42 41 48 48 6 6 3 5 3 1 10 10 16 16 15 16 1 1 1 1 0 1 17 16 16 16 16 15 5 6 7 7 7 7 2 2 1 l 2 1 2 2 2 2 2 3 12 12 12 12 12 12 47 47 47 47 47 47 3,994 4,004 4,014 4,014 4,014 4,014 64 66 69 69 69 69 8 8 8 8 8 8 22 23 25 24 25 24 4 5 5 5 5 5 1 0 1 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 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 2001 2002 2003 2004 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 14.58 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 facilities 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 22 2005 2006 2007 2008 2009 2010 $ 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 6.20 205 Indian River County, Florida Water and Wastewater Customers Last Ten Fiscal Years Schedule 23 The number of County water and wastewater customers, expressed as the number of equivalent residential units (ERUs), for the years 2001 through 2010 as set forth below: Fiscal Year Water ERUs Wastewater ERUs 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 2010 64,146 45,427 Source: Indian River County Utilities Department 206 Indian River County, Florida Top 10 High Volume Customers of Utility Services Fiscal Year 2010 Schedule 24 Below is a table depicting the ten highest volume customers of the utility system for the fiscal year ended September 30, 2010: Customer 1. Vista Royale 2. Village Green Manufactured Housing Park 3. ACTS Inc 4. City of Fellsmere (Wastewater Only) 5. Disney's Vero Beach Resort 6. IRC School Board 7. IRC Facilities Management / Jail 8. Vista Gardens 9. Palms of Vero Ltd 10. Vista Plantation Source: Indian River County Utilities Department Annual Water Volume (x 1,000 gals.) Annual Wastewater Volume (x 1,000 gals.) 24,007 24,007 22,602 22,602 21,956 21,956 - 20,891 19,676 19,676 19,546 19,546 16,808 16,808 11,542 11,542 10,665 10,665 10,613 10,613 207 Indian River County, Florida Capacity Charges - Utilities Department Last Ten Fiscal Years Schedule 25 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: (A) Large increase in capacity charges due to construction boom. 1., Wastewater Water Capacity Capacity Total Fiscal Year Charges Charges Charges 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 1,159,803 620,915 1,780,718 2008 699,054 1,088,279 1,787,333 2009 504,658 367,940 872,598 2010 1,025,700 276,551 1,302,251 (A) Large increase in capacity charges due to construction boom. 1., Indian River County, Florida Pledged Revenues for Recreational Revenue Refunding Bonds, Series 2003 Last Ten Fiscal Years Schedule 26 Racetrack and Jai Alai fronton funds and 7% 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 13 for more information. 209 Racetrack 7% of Fiscal and Jai Alai Half -Cent Year Fronton Funds Sales Tax 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 2010 446,500 485,062 Racetrack and Jai Alai fronton funds and 7% 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 13 for more information. 209 Indian River County, Florida Pledged Revenues for Spring Training Facility Revenue Bonds, Series 2001 Last Ten Fiscal Years Schedule 27 Year Professional Total Ended Sports State Tourist One Cent Half Cent September 30 Subsidy Tax Collected Tourist Tax (A) Sales Tax (B) 2001 $ 291,649 $ 1,408,046 $ 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 2010 500,004 1,324,953 331,238 6,929,458 (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. Refer to pledged revenue coverage on County Note 13A. 210 Harris, Cotherman, Jones, Price & Associates Certified Pubtic 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 The Honorable Board of County Commissioners Indian River County, Florida We have audited the financial statements of Indian River County, Florida (the "County") as of and for the year ended September 30, 2010, and have issued our report thereon dated March 11, 2011. 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 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 County's financial statements will not be prevented, or detected and corrected on a timely basis. Our consideration of the 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 over financial reporting 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. "Providing Vision and Direction to our Clients" Member AICPA Member AICPA Division For CPA Firms Member FICPA Private Companies Practice Section 211 Harris, Cotherman, Jones, Price & Associates Certified Public Accountants - Chartered 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 County'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 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. Vero Beach, Florida March 11, 2011 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 financial statements of Indian River County, Florida as of and for the year ended September 30, 2010 and have issued our report thereon dated March 11, 2011. We conducted our audit in accordance with United States 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, and OMB Circular A-133, Audits of States, Local Governments, and Non -Profit Organizations. We have issued our Report on Internal Control Over Financial Reporting and on Compliance and Other Matters, Report on Compliance with Requirements that Could Have a Direct and Material Effect on 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, and Schedule of Findings and Questioned Costs. Disclosures in those reports and schedule, which are dated March 11, 2011, should be considered in conjunction with this management letter. We have also issued separate management letters dated March 11, 2011 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. This letter includes the following information, which is not included in the aforementioned auditors' reports or schedules. In accordance with the Rules of the Auditor General (Section 10.554(1)(i)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 10.554(1)(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(1)(i)3.) require 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. 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 findings. "Providing Vision and Direction to our Clients" Member AICPA Member AICPA Division For CPA Firms Member FICPA Private Companies Practice Section 213 Harris, Cotherman, Jones, Price & Associates Certified Public Accountants - Chartered The Honorable Board of County Commissioners Indian River County, Florida Page two The Rules of the Auditor General (Section 10.554(1)(i)5.) provide that the auditor may, based on professional judgment, report the following matters that have an inconsequential effect on 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) deficiencies in internal control 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(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, 2010. As required by the Rules of the Auditor General (Section 10.554(1)(i)7.b.), the annual financial report required to be filed with the Florida Department of Financial Services pursuant to Section 218.32(1)(a) of the Florida Statutes has been completed and is in agreement with the annual financial audit report. As required by the Rules of the Auditor General (Sections 10.554(1)(i)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 County's financial condition, and our financial condition assessment was based in part on representations made by management and the review of financial information provided by same. 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 and others within the entity, 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 Beach, Florida March 11, 2011 214 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 Compliance with Requirements that Could Have a Direct and Material Effect on 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 Compliance We have audited the compliance of Indian River County, Florida (the "County") with the types of compliance requirements described in the U.S. Office 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 have a direct and material effect on each of its major federal programs and state projects for the year ended September 30, 2010. Indian River County, Florida's major federal programs and 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 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 69I-5, Rules of the Department of Financial Services, and Chapter 10.550, Rules of the Auditor General. Those standards, OMB Circular A-133, Chapter 69I-5 and Chapter 10.550 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 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 compliance requirements referred to above that could have a direct and material effect on each of its federal programs and major state projects for the year ended September 30, 2010. Internal Control over Compliance 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 state project in order to determine our auditing procedures for the purpose of expressing our opinion on compliance and to test and report on internal control over compliance in accordance with OMB Circular A-133, 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. "Providing Vision and Direction to our Clients" Member AICPA Member AICPA Division For CPA Firms 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 A deficiency in internal control over compliance exists when the design or operation of a control over compliance does not allow management or employees, in the normal course of performing their assigned functions, to prevent or detect and correct, noncompliance with a type of compliance requirement of a federal program or state project on a timely basis. A material weakness in internal control over compliance is a deficiency, or combination of deficiencies, in internal control over compliance, such that there is a reasonable possibility that material noncompliance with a type of compliance requirement of a federal program or state project will not be prevented, or detected and corrected, on a timely basis. Our consideration of internal control over compliance was for the limited purpose described in the first paragraph of this section and was not designed to identify all deficiencies in internal control over compliance that might be deficiencies, 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 Expenditures of Federal Awards and State Projects We have audited the financial statements of governmental activities, the business -type activities, 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, 2010, and have issued our report thereon dated March 11, 2011, which contained unqualified opinions on those financial statements. Our audit was performed for the purpose of forming opinions on the financial statements as a whole. The accompanying schedule of expenditures of federal awards and state projects is presented for purposes of additional analysis as required by OMB Circular A-133 and Chapter 10.550, Rules of the Auditor General and is not a required part of the basic financial statements. Such information is the responsibility of management and was derived from and relates directly to the underlying accounting and other records used to prepare the financial statements. The information has been subjected to the auditing procedures applied in the audit of the financial statements and certain additional procedures, including comparing and reconciling such information directly to the underlying accounting and other records used to prepare the financial statements or to the financial statements themselves, and other additional procedures in accordance with auditing standards generally accepted in the United States of America. In our opinion, the information is fairly stated in all material respects in relation to the financial statements as a whole. This report is intended solely for the information and use of the Board of County Commissioners, management, 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 Be ch, Florida March 11, 2011 216 �AR 217 Indian River County, Florida Schedule of Expenditures of Federal Awards and State Projects For the Fiscal Year Ended September 30, 2010 Federal/State Agency CFDA Contract/ 20.205 AOU94 Pass-through Entity CSFA Grant 42,703 Transfers to Federal Program/State Project No. No. Expenditures Subrecipients Department of Housing and Urban Development: 934,820 20.505 ANR93 Direct Programs: 20.509 APT03 48,259 Section 8 Housing Choice Vouchers 14.871 FL -132 -VO -014 to 017 $ 1,969,861 Shelter Plus Care 14.238 FL29C509001 66,367 Shelter Plus Care 14.238 FL29C709001 74,275 Shelter Plus Care 14.238 FL0113CH090800 92,579 Shelter Plus Care 14.238 FL0114CH090801 34,742 Shelter Plus Care 14.238 FL0114CH090802 39,577 Shelter Plus Care 14.238 FL0119CH090801 87,449 Shelter Plus Care 14.238 FL0119CH090802 17,570 Shelter Plus Care 14.238 FL0120CH090801 114,315 Shelter Plus Care 14.238 FL0120CH090802 35,272 Subtotal CFDA - 14.238 562,146 Supportive Housing Program - Homeless Management Information Systems 14.235 FL2913709003 25,670 Family Options 14.235 FL0115BH090801 46,709 Homeless Management Information Systems 14.235 FL0115BH090802 19,731 Homeless Management Information Systems 14.235 FL0116BH090801 34,916 Subtotal CFDA - 14.235 127,026 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 24,609 Comm.Dev. Block Grant - Neighborhood Stabilization Program 14.228 I ODB-4X-10-40-O1-F13 3,621,742 Comm.Dev. Block Grant - Wilma Disaster Recovery 14.228 08DB-D3-10-40-01-Al2 117,037 Subtotal CFDA - 14.228 3,763,388 Total Department of Housing and Urban Development 6,422,421 Federal Transit Administration: Direct Programs: ARRA - Federal Transit Formula Section 5307 Grant 20.507 FL-96-XO18-00 $ 228,104 Federal Transit Formula Section 5307 Grant 20.507 FL -90-X739 777,403 Federal Transit Formula Section 5307 Grant 20.507 FL -90-X717 112,189 Federal Transit Formula Section 5307 Grant 20.507 FL -90-X702 984,214 Federal Transit Formula Section 5307 Grant 20.507 FL -90-X669 26,451 Federal Transit Formula Section 5307 Grant 20.507 FL -90-X611 173,882 Federal Transit Formula Section 5307 Grant 20.507 FL -90-X568 318,540 Federal Transit Formula Section 5307 Grant 20.507 FL -90-X533 47,732 Federal Transit Formula Section 5307 Grant 20.507 FL -90-X500 133,986 Total Federal Transit Administration 2,802,501 Federal Highway Administration: Indirect Programs: Passed through Florida Department of Transportation: 12th Street Sidewalk Improvements 12th Street Sidewalk Improvements 8th Street Sidewalk From 18th Ct ARRA - Landscaping on 58th Avenue Metropolitan Planning Organization Subtotal CFDA - 20.205 Metropolitan Planning Organization Section 5311 Non -Urbanized Public Transit Total Federal Highway Administration 20.205 AOU95 69,047 20.205 AOU94 120,137 20.205 AP106 42,703 20.205 APK49 237,265 20.205 AA080 465,668 934,820 20.505 ANR93 51,271 20.509 APT03 48,259 1,034,350 218 Indian River County, Florida Schedule of Expenditures of Federal Awards and State Projects For the Fiscal Year Ended September 30, 2010 Federal/State Agency CFDA Contract/ Pass-through Entity CSFA Grant Federal Program/State Project No. No. Environmental Protection Agency: Indirect Programs: Passed through Florida Department of Environmental Protection: Nonpoint Source Implementation Grants - Egret Marsh Regional Stormwater 66.460 G0143 Total Environmental Protection Agency Department of Justice: N/A 14,190 Direct Programs: N/A 18,908 State Criminal Alien Assistance Program 16.606 2009 -F8319 -FL -AP ARRA - 2009 Local Solicitation 16.804 2009 -SB -B9-1973 ARRA - 2009 COPS Hiring 16.710 2009RKWX0223 2009 Local Solicitation 16.738 2009 -DJ -BX -0913 Indirect Programs: Passed through Florida Department of Law Enforcement: Bryne Formula Grant Program Multi -Agency Drug Enforcement Unit 16.738 2010-JAGC-INRI-1-4X-134 Substance Abuse Advisory Council 16.738 2010-JAGC-INRI-2-4X-078 Subtotal CFDA - 16.738 ARRA - Edward Byrne Memorial JAG Program Passed through Office of the Attorney General: Crime Victim Assistance Program Total Department of Justice Elections Assistance Commission: Indirect Programs: Passed through Florida Dept of State Division of Elections: Federal Elections Activities Federal Elections Activities Federal Elections Activities Ballot on Demand HAVA Grant to Implement MOVE Act Total Elections Assistance Commission Department of Health and Human Services, Agency for Children and Families, Office of Child Support Enforcement: Indirect Programs: Passed through Florida Department of Revenue: Child Support Enforcement -Title IV D - Sheriff Service of Notices Total Office of Child Support Enforcement Federal Emergency Management Agency: Direct Program: Assistance to Firefighters Grant Indirect Programs: Passed through Florida Dept. of Community Affairs: Emergency Management Homeland Security Emergency Management Performance Grant Total Federal Emergency Management Agency TOTAL EXPENDITURES OF FEDERAL AWARDS: Transfers to Expenditures Subrecipients $ 131,320 131,320 149,656 132,883 302,617 30,721 103,917 25,979 160,617 16.803 2010-ARRC-INRI-3-W7-275 344,032 16.575 V9050 36,237 1,126,042 90.401 N/A 14,190 90.401 N/A 18,908 90.401 N/A 16,693 90.401 N/A 13,170 90.401 N/A 3,320 66,281 93.563 00331 10,817 93.563 CC331 414,039 424,856 97.044 EMW-2009-FP-00738 8,000 97.067 08 -DS -60-10-01-204 25,000 97.042 10 -BG -25-10-40-01-068 57,360 90,360 $ 9,295,630 $ 2,802,501 219 Indian River County, Florida Schedule of Expenditures of Federal Awards and State Projects For the Fiscal Year Ended September 30, 2010 Federat/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: Hazardous Materials Emergency Planning 52.023 09 -CP -04-10-40-01-048 $ 3,039 Hazardous Materials Emergency Planning 52.023 10 -CP -04-10-40-01-153 2,625 Subtotal CSFA - 52.023 5,664 Emergency Management Programs- Emergency Management Base Grant 52.008 10 -BG -25-10-40-01-068 98,396 Total Department of Community Affairs 104,060 Florida Housing Finance Agency: Direct Projects: Local Hurricane Housing Recovery Plan 52.902 N/A 358,203 State Housing Initiatives Partnership 52.901 N/A 748,935 Florida Housing Opportunity Program 52.901 N/A 92,761 Subtotal CSFA - 52.901 841,696 Total Florida Housing Finance Agency 1,199,899 Department of State: Division of Library Services: Direct Project: State Aid to Libraries 45.030 10 -ST -23 100,167 Total Department of State 100,167 Department of Transportation: Direct Projects: Transportation Disadvantaged Planning Grant 55.002 APJ58 14,910 Transportation Disadvantaged Planning Grant 55.002 AQ040 4,971 Subtotal CSFA - 55.002 19,881 County Incentive Grant Program - 66th Avenue 55.008 AOC45 376,231 Small County Outreach Program (SCOP) - Old Dixie Hwy 55.009 AOR74 63,234 Small County Outreach Program (SCOP) - Old Dixie Hwy 55.009 APS88 150,729 Subtotal CSFA - 55.009 213,963 Fl Public Transit Block Grant 55.010 APT70 189,036 FDOT Service Development Grant 55.012 A0185 88,200 Transit Corridor Grant 55.012 AOX67 101,000 Subtotal CSFA - 55.012 189,200 Transit Corridor Grant 55.013 AN 83 $ 13,542 Transit Corridor Grant 55.013 AP049/AP050 181,650 Subtotal CSFA - 55.013 181,650 13,542 Access Improvements to Aviation Boulevard 55.014 ANP77 83,603 JPA Agreement Sidewalk Gap Program 55.023 ANU30 6,292 Enhancement & Operation Computerized Traffic Control 55.023 APG29 144,177 Subtotal CSFA - 55.023 150,469 Intersection Improvements(TRIP) 55.026 AP105 52,632 Total Department of Transportation $ 1,456,665 $ 13,542 220 Indian River County, Florida Schedule of Expenditures of Federal Awards and State Projects For the Fiscal Year Ended September 30, 2010 Federal/State Agency CFDA Contract/ Pass-through Entity CSFA Grant Transfers to Federal Program/State Project No. No. Expenditures Subrecipients STATE OF FLORIDA - Continued Department of Environmental Protection: Direct Projects: Wabasso Beach Restoration 37.003 07IR2 60,774 Ambersand Beach Renourishment 37.003 07IR3 151,891 Subtotal CSFA - 37.003 212,665 Egret Marsh Regional Stormwater 37.039 LP6734 480,000 Egret Marsh Regional Stormwater 37.039 LP6822 180,000 Subtotal CSFA - 37.039 660,000 South County Regional Park 37.017 F8138 16,031 Total Department of Environmental Protection 888,696 Department of Health: Direct Project: County Awards Grant -Emergency Medical Svc 64.005 C9031 $ 12,686 Total Department of Health 12,686 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: $ 4,262,177 $ 13,542 221 Indian River County, Florida Notes to Schedule of Expenditures of Federal Awards and State Projects For the Fiscal Year Ended September 30, 2010 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. 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 Indian River County, Florida Schedule of Findings and Questioned Costs Year Ended September 30, 2010 Section I — Summary of Auditors' Results Financial Statements Name of Federal Program or Cluster 14.228 HUD CDBG - Neighborhood Stabilization Type of auditors' report issued Unqualified 14.871 HUD Section 8 Internal control over financial reporting: DOJ COPS 16.738 DOJ Drug Enforcement Material weakness(es) identified? Yes X No Significant deficiency(ies) identified not DOT Highway Planning and Construction 20.205 DOT Highway Planning and Construction considered to be material weaknesses? Yes X None reported Noncompliance material to financial statements Name of State Project 37.039 FDEP - Surface Water Restoration noted? Yes X No Federal Awards and State Projects FDOT County Incentive 55.009 FDOT County Outreach Internal control over major programs and projects: FDOT Transit Corridor Material weakness(es) identified? Yes X No Significant deficiency(ies) 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 accordance with Section 510(a) of Circular A-133? Yes X No Identification of major federal programs and state projects: CFDA Number Name of Federal Program or Cluster 14.228 HUD CDBG - Neighborhood Stabilization 14.235 HUD Supportive Housing Program 14.871 HUD Section 8 16.710 ARRA DOJ COPS 16.738 DOJ Drug Enforcement 16.803 ARRA DOJ Justice Assistance 16.804 ARRA DOJ Justice Assistance 20.205 ARRA DOT Highway Planning and Construction 20.205 DOT Highway Planning and Construction 20.507 ARRA DOT FTA Section 5307 20.507 DOT FTA Section 5307 CSFA Number Name of State Project 37.039 FDEP - Surface Water Restoration 45.030 Department of State - State Aid to Libraries 52.901 FHFA SHIP 55.008 FDOT County Incentive 55.009 FDOT County Outreach 55.013 FDOT Transit Corridor 223 Indian River County, Florida Schedule of Findings and Questioned Costs Page two Dollar threshold used to distinguish between Type A and Type B programs $362,944 (Federal) $300,000 (State) Auditee qualified as low-risk auditee? X Yes No Section II — Financial Statement Findings There were no financial statement findings. Section III — Federal or State Award Findings and Questioned Costs There were no federal or state award findings or questioned costs. Section IV — Prior Year Findings and Questioned Costs There were no prior year findings or questioned costs. 224 JEFFREY K. BARTON Clerk of Circuit Court and Comptroller Finance DepartmentORI04' 1801 27th Street, Building A Vero Beach, Florida 32960 Telephone (772) 226-1945 AFFIDAVIT BEFORE ME, the undersigned authority, personally appeared Jeffrey K. Barton, who being duly sworn, deposes and says on oath that: 1. I am the Chief Financial Officer of Indian River County which is a local governmental entity of the State of Florida; 2. Indian River County adopted Ordinance No. 2005-015 on May 17, 2005 implementing an impact fee. The impact fee .was subsequently amended as follows: on March 24, 2009 in Ordinance No. 2009-003, on September 22, 2009 in Ordinance No. 2009-015, and on March 16, 2010 in Ordinance No. 2010-002. The result of these amendments was suspension of five of the eight original impact fees from April 1, 2009 through March 31, 2011. 3. Indian River County has complied and, as of the date of this Affidavit, remains in compliance with Section 163.31801, Florida Statutes. FURTHER AFFIANT SAYETH NAUGHT. \/ - (Chief Vfirgicial Officer of the Entity) STATE OF FLORIDA COUNTY OF INDIAN RIVER SWORN TO AND SUBSCRIBED before me this // day of 2011. MARIA I. SUESZ rl; C.r.,mmission # DD 978402 Expires July 26, 201 �o-3esTo,s oto` Bonded TW Troy Fain MUM" NOTARY PUBLIC Print Name I'M A 1hZ-- ersonally kno or produced identification Type of identification produced: My Commission Expires: 225 �AR 226 BOARD OF COUNTY COMMISSIONERS 227 �AR 228 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 Board of County Commissioners Indian 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, 2010, 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 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 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 present the financial position of only the Board of County Commissioners at September 30, 2010 and the results of operations for the year then ended. These financial 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 Board of County Commissioners as of September 30, 2010 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 11, 2011 on our consideration of the Board of County Commissioners' 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 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. (iv [!��f.�'.�(s'•� �GGII(l'x� GT=�:UWY/,e 21L � —(�i?Qil �lil.2Gi� Vero B ach, Florida March 11, 2011 "Providing Vision and Direction to our Clients" Member AICPA Member AICPA Division For CPA Firms Member FICPA Private Companies Practice Section 229 Indian River County, Florida Board of County Commissioners Balance Sheet Governmental Funds September 30, 2010 ASSETS Cash and cash equivalents Accounts receivable Special assessments receivable Due from other funds Due from other governments Inventories Prepaid expenses Other assets held for resale Advances to other funds Total assets LIABILITIES AND FUND BALANCES Liabilities: Accounts payable Retainage payable Due to other funds Due to other governments Deferred revenues Other deposits Total liabilities Fund Balances: Nonspendable: Inventories Prepaid items Advances to other funds Restricted for: Transportation/road improvements Court -related costs and improvements Housing assistance Law enforcement/public safety Fire/emergency services Tourism -related activites Beach renourishment Boating related projects Library services Land acquisition Stormwater, street lighting, and other special assessments Debt service Capital projects Environmental conservation/preservation Sports Village repairs/improvements Solid waste projects Parks/recreational projects Other purposes Committed to: Economic incentives Emergency/disaster relief Budget stabilization Other purposes Assigned to: FY 2011 budget appropriation Transportation/road improvements Unassigned Total fund balances Total liabilities and fund balances 43,048 102,212 - - 622,000 27,529,133 13,600,988 2,387,425 2,046,563 126,040 667,404 - 6,305,660 18,290 1,823,336 9,553,760 5,900,000 5,900,000 159,120 1,415,000 33,169,560 - - $ 56,260,990 $ 40,885,561 $ 14,222,988 $ 58,172,520 $ 42,123,867 $ 15,038,063 The accompanying notes are an integral part of the financial statements. 230 Secondary Impact Roads General Fees Construction $ 53,092,965 $ 42,091,886 $ 8,021,250 437,601 - 11 976,500 - - 3,520,194 31,981 6,394,802 43,048 - - 102,212 - - 622,000 $ 58,172,520 $ 42,123,867 $ 15,038,063 $ 1,245,429 $ 983,340 $ 643,543 4,768 214,578 171,532 416,901 40,388 74,109 - 170,323 - - 1,911,530 1,238,306 815,075 43,048 102,212 - - 622,000 27,529,133 13,600,988 2,387,425 2,046,563 126,040 667,404 - 6,305,660 18,290 1,823,336 9,553,760 5,900,000 5,900,000 159,120 1,415,000 33,169,560 - - $ 56,260,990 $ 40,885,561 $ 14,222,988 $ 58,172,520 $ 42,123,867 $ 15,038,063 The accompanying notes are an integral part of the financial statements. 230 231 Emergency Optional Other Total Services Sales Governmental Governmental Transportation District Tax Funds Funds $ 9,265,794 $ 15,841,237 $ 18,087,765 $ 26,638,166 $ 173,039,063 751 19 - 28,791 467,173 440,907 - - 440,907 - - - - 976,500 257,434 357,496 19,407,664 711,508 30,681,079 - - - - 43,048 135 757 103,104 - 1,677,658 1,677,658 - - - - 622,000 $ 9,965,021 $ 16,198,752 $ 37,495,429 $ 29,056,880 $ 208,050,532 $ 427,768 $ 900,891 $ 1,415,584 $ 963,512 $ 6,580,067 25,189 - 536,044 304,077 1,256,188 - - 976,500 976,500 - - - 186,268 643,557 440,907 42,840 829,981 - 1,387,837 - - - - 170,323 893,864 943,731 2,781,609 2,430,357 11,014,472 - - - 1,677,658 1,720,706 135 757 103,104 - - 622,000 - 41,130,121 1,004,439 1,004,439 2,478,523 2,478,523 - 2,018,344 4,405,769 10,255,021 - 12,301,584 - 441,685 441,685 11,191,367 11,191,367 966,647 966,647 209,689 335,729 301,495 301,495 1,576,087 1,576,087 - 3,383,720 3,383,720 34,713,820 - 34,713,820 - 1,079,736 1,079,736 1,237,901 1,237,901 - - 667,404 - - 6,305,660 243,197 2,084,823 - - - 9,553,760 800,000 1,500,000 8,200,000 800,000 1,500,000 8,200,000 - - 159,120 - 2,000,000 3,415,000 7,471,022 - 7,471,022 - - - (1,184,722) 31,984,838 $ 9,071,157 $ 15,255,021 $ 34,713,820 $ 26,626,523 $ 197,036,060 $ 9,965,021 $ 16,198,752 $ 37,495,429 $ 29,056,880 $ 208,050,532 231 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, 2010 REVENUES Taxes Permits, fees and special assessments Intergovernmental Charges for services Judgments, fines and forfeits Interest Miscellaneous Total revenues EXPENDITURES Current: General government Public safety Physical environment Transportation Economic environment Human services Culture/recreation Court related Debt service: Principal Interest and other fiscal charges Capital projects Total expenditures Excess of revenues over (under) expenditures OTHER FINANCING SOURCES (USES) Transfers in Transfers out Transfers to constitutional officers Total other financing sources (uses) Net change in fund balances Fund balances at beginning of year Fund balances at end of year 10,233,010 165,244 - 4,761,573 - - 315,778 - - 3,390,255 6,410,337 5,712,666 415,086 - - 3,432,333 - - 9,214,964 1,183,106 - 355,630 - - 32,118,629 55,795,913 (9,185,082) (45,858,094) (55,043,176) 7,758,687 5,712,666 (5,359,724) (1,175,170) 752,737 (5,359,724) (1,175,170) 55,508,253 46,245,285 15,398,158 $ 56,260,990 $ 40,885,561 $ 14,222,988 The accompanying notes are an integral part of the financial statements. 232 Secondary Impact Roads General Fees Construction $ 58,142,762 $ - $ 3,498,698 9,418,668 1,431,948 29,947 12,574,824 370,099 912,958 5,760,902 - - 352,272 - - 704,289 478,035 68,982 960,825 118,881 26,911 87,914,542 2,398,963 4,537,496 10,233,010 165,244 - 4,761,573 - - 315,778 - - 3,390,255 6,410,337 5,712,666 415,086 - - 3,432,333 - - 9,214,964 1,183,106 - 355,630 - - 32,118,629 55,795,913 (9,185,082) (45,858,094) (55,043,176) 7,758,687 5,712,666 (5,359,724) (1,175,170) 752,737 (5,359,724) (1,175,170) 55,508,253 46,245,285 15,398,158 $ 56,260,990 $ 40,885,561 $ 14,222,988 The accompanying notes are an integral part of the financial statements. 232 330,765 Emergency Optional Other Total - Services Sales Governmental Governmental Transportation District Tax Funds Funds $ - $ 22,060,666 $ 12,660,518 $ 7,264,082 $ 103,626,726 146,802 - 14,974 279,700 11,322,039 2,660,838 93,010 2,885,329 13,766,006 33,263,064 85,026 4,422,704 - 681,016 10,949,648 - 1,500 - 132,645 486,417 113,159 207,834 178,428 275,899 2,026,626 635,038 17,516 126,845 452,373 2,338,389 3,640,863 26,803,230 15,866,094 22,851,721 164,012,909 330,765 - - 736,409 11,465,428 - 25,655,217 - 532,659 30,949,449 443,144 - - 372,251 1,131,173 11,521,032 - - 463,617 27,497,907 - - - 2,105,253 2,520,339 - - 3,835,073 7,267,406 - - 8,055,572 18,453,642 - - - 425,919 781,549 - - - 5,315,000 5,315,000 - - - 2,758,138 2,758,138 - - 7,487,068 - 7,487,068 12,294,941 25,655,217 7,487,068 24,599,891 115,627,099 (8,654,078) 1,148,013 8,379,026 (1,748,170) 48,385,810 8,951,106 - - 7,085,150 16,036,256 - - (6,000,000) (906,191) (16,091,273) - (444,351) - (504,902) (46,807,347) 8,951,106 (444,351) (6,000,000) 5,674,057 (46,862,364) 297,028 703,662 2,379,026 3,925,887 1,523,446 8,774,129 14,551,359 32,334,794 22,700,636 195,512,614 $ 9,071,157 $ 15,255,021 $ 34,713,820 $ 26,626,523 $ 197,036,060 233 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, 2010 The accompanying notes are an integral part of the financial statements. 234 Variance with Final Budget Budgeted Amounts Actual Positive Original Final Amounts (Negative) REVENUES Taxes $ 57,407,553 $ 57,407,553 $ 58,142,762 $ 735,209 Permits and fees 8,837,375 8,837,375 9,418,668 581,293 Intergovernmental 9,148,494 12,010,408 12,574,824 564,416 Charges for services 5,729,784 5,545,994 5,760,902 214,908 Judgments, fines and forfeits 294,975 294,975 352,272 57,297 Interest 752,400 752,400 704,289 (48,111) Miscellaneous 447,576 755,473 960,825 205,352 Total revenues 82,618,157 85,604,178 87,914,542 2,310,364 EXPENDITURES Current: General government 10,600,486 11,118,248 10,233,010 885,238 Public safety 4,861,079 5,175,251 4,761,573 413,678 Physical environment 328,086 335,712 315,778 19,934 Transportation 1,056,787 3,780,661 3,390,255 390,406 Economic environment 358,496 8,450,177 415,086 8,035,091 Human services 3,827,469 3,879,347 3,432,333 447,014 Culture/recreation 9,331,411 9,674,167 9,214,964 459,203 Court related 401,615 385,269 355,630 29,639 Total expenditures 30,765,429 42,798,832 32,118,629 10,680,203 Excess of revenues over expenditures 51,852,728 42,805,346 55,795,913 12,990,567 OTHER FINANCING USES Transfers out (9,185,082) (9,218,643) (9,185,082) 33,561 Transfers to constitutional officers (45,870,098) (46,037,000) (45,858,094) 178,906 Total other financing uses (55,055,180) (55,255,643) (55,043,176) 212,467 Net change in fund balances (3,202,452) (12,450,297) 752,737 $ 13,203,034 Fund balances at beginning of year 3,202,452 12,450,297 55,508,253 Fund balances at end of year $ - $ - $ 56,260,990 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 Impact Fees Fund For the Year Ended September 30, 2010 Budgeted Amounts Original Final REVENUES Actual Amounts Variance with Final Budget Positive (Negative) Permits, fees and special assessments $ 3,933,000 $ 3,933,000 $ 1,431,948 $ (2,501,052) Intergovernmental - 600,000 370,099 (229,901) Interest 479,750 479,750 478,035 (1,715) Miscellaneous - - 118,881 118,881 Total revenues 4,412,750 5,012,750 2,398,963 (2,613,787) EXPENDITURES Current: General government Transportation Culture/recreation Total expenditures Net change in fund balances Fund balances at beginning of year Fund balances at end of year 187,475 1,121,214 165,244 955,970 14,092,097 25,190,557 6,410,337 18,780,220 1,575,000 3,155,585 1,183,106 1,972,479 15,854,572 29,467,356 7,758,687 21,708,669 (11,441,822) (24,454,606) (5,359,724) $ 19,094,882 11,441,822 24,454,606 46,245,285 $ 40,885,561 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 Secondary Roads Construction Fund For the Year Ended September 30, 2010 REVENUES Taxes Permits, fees and special assessments Intergovernmental Interest Miscellaneous Total revenues EXPENDITURES Current: Transportation Total expenditures Net change in fund balances Fund balances at beginning of year Fund balances at end of year Budgeted Amounts Original Final Actual Amounts Variance with Final Budget Positive (Negative) $ 3,029,312 $ 3,029,312 $ 3,498,698 $ 469,386 - - 29,947 29,947 - 2,887,967 912,958 (1,975,009) 190,000 190,000 68,982 (121,018) 9,930,568 9,930,568 26,911 (9,903,657) 13,149,880 16,037,847 4,537,496 (11,500,351) 15,014,277 18,489,026 5,712,666 12,776,360 15,014,277 18,489,026 5,712,666 12,776,360 (1,864,397) (2,451,179) (1,175,170) $ 1,276,009 1,864,397 2,451,179 15,398,158 $ 14,222,988 The accompanying notes are an integral part of the financial statements. 236 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, 2010 REVENUES Permits, fees and special assessments Intergovernmental Charges for services Interest Miscellaneous Total revenues EXPENDITURES Current: General government Physical environment Transportation Total expenditures Excess of revenues under expenditures OTHER FINANCING SOURCES Transfers in Total other financing sources Net change in fund balances Fund balances at beginning of year Fund balances at end of year Budgeted Amounts Original Final Actual Amounts Variance with Final Budget Positive (Negative) $ 76,000 $ 76,000 $ 146,802 $ 70,802 2,271,770 2,271,770 2,660,838 389,068 95,950 95,950 85,026 (10,924) 100,700 100,700 113,159 12,459 889,121 947,772 635,038 (312,734) 3,433,541 3,492,192 3,640,863 148,671 366,557 366,656 330,765 35,891 609,715 671,330 443,144 228,186 12,631,791 14,233,263 11,521,032 2,712,231 13,608,063 15,271,249 12,294, 941 2,976,308 (10,174,522) (11,779,057) (8,654,078) 3,124,979 8,951,106 8,951,106 8,951,106 - 8,951,106 8,951,106 8,951,106 - (1,223,416) (2,827,951) 297,028 $ 3,124,979 1,223,416 2,827,951 8,774,129 9,071,157 The accompanying notes are an integral part of the financial statements. 237 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, 2010 REVENUES Taxes Intergovernmental Charges for services Judgments, fines and forfeits Interest Miscellaneous Total revenues EXPENDITURES Current: Public safety Total expenditures Excess of revenues over (under) expenditures OTHER FINANCING USES Transfers to constitutional officers Total other financing uses Net change in fund balances Fund balances at beginning of year Fund balances at end of year Budgeted Amounts Original Final Variance with Final Budget Actual Positive Amounts (Negative) $ 21,829,153 $ 21,829,153 $ 22,060,666 $ 231,513 25,650 68,883 93,010 24,127 3,220,500 3,754,500 4,422,704 668,204 - - 1,500 1,500 205,200 205,200 207,834 2,634 5,974 5,974 17,516 11,542 25,286,477 25,863,710 26,803,230 939,520 25,456,648 27,819,114 25,655,217 2,163,897 25,456,648 27,819,114 25,655,217 2,163,897 (170,171) (1,955,404) 1,148,013 3,103,417 (493,187) (493,141) (444,351) 48,790 (493,187) (493,141) (444,351) 48,790 (663,358) (2,448,545) 703,662 $ 3,152,207 663,358 2,448,545 14,551,359 $ - $ - $ 15,255,021 The accompanying notes are an integral part of the financial statements. 238 Indian River County, Florida Board of County Commissioners Statement of Net Assets Proprietary Funds September 30, 2010 Enterprise Funds Solid Waste Disposal Golf County County District Course Utilities Building ASSETS Current assets Internal Total Service Funds Cash and cash equivalents $ 15,636,837 $ 31,532 $ 30,060,604 $ 4,010,287 $ 49,739,260 $ 28,940,595 Accounts receivable - net 64,286 - 2,775,948 - 2,840,234 1,376,792 Due from other governments 95,511 11,300 - - 106,811 80,895 Interest receivable 22,041 676 545,142 4,460 572,319 25,812 Inventories - 46,834 904,167 - 951,001 156,198 Prepaid expenses - - 33,333 33,333 1,144,119 Current restricted assets: - - 9,280 - 9,280 - Cash and cash equivalents 13,005,274 470,822 30,092,298 40,270 43,568,394 21,557 Total current assets 28,823,949 561,164 64,411,492 4,014,747 97,811,352 31,724,411 Non-current assets: Unamortized bond costs - 59,595 518,010 - 577,605 - Deferred amounts on refundings - 160,823 3,290,249 3,451,072 Capital assets- non -depreciable 13,663,976 669,630 15,538,174 - 29,871,780 - Capital assets -depreciable 26,648,557 8,344,069 392,131,045 427,936 427,551,607 939,955 Accumulated depreciation (10,371,948) (1,930,800) (168,619,963) (412,290) (181,335,001) (478,130) Non-current restricted assets: 139,426 529,989 7,270,028 7,939,443 Special assessments receivable 687,433 648,136 1,568,428 85,137 1,568,428 2,500,828 Impact fees receivable 815,573 815,573 Liens receivable 116,481 37,879 1,569,743 57,502 1,569,743 25,527 Total non-current assets 29,940,585 7,303,317 246,811,259 15,646 284,070,807 461,825 Total assets 58,764,534 7,864,481 311,222,751 4,030,393 381,882,159 32,186,236 LIABILITIES Current liabilities (payable from current assets) Accounts payable 445,966 51,007 780,081 40,255 1,317,309 127,649 Retainage payable - - 8,680 - 8,680 - Claims payable - - - - 2,351,622 Due to other governments 7,511 2,846,099 4,612 2,858,222 - Unearned revenues 27,428 - - 27,428 Other deposits 1,000 - 1,000 Pollution remediation costs payable - - 9,280 - 9,280 - Accrued compensated absences 102,041 31,201 301,234 40,270 474,746 21,557 Total current liabilities (payable from current assets) 548,007 118,147 3,945,374 85,137 4,696,665 2,500,828 Current liabilities (payable from restricted assets): Accounts payable - - 1,511,711 - 1,511,711 - Retainage payable - 124,900 124,900 Accrued interest payable 9,989 193,710 203,699 Bonds payable - 520,000 2,990,000 3,510,000 Customer deposits 139,426 2,449,707 2,589,133 Total current liabilities (payable from restricted assets) 139,426 529,989 7,270,028 7,939,443 Total current liabilities 687,433 648,136 11,215,402 85,137 12,636,108 2,500,828 Non-current liabilities: Accrued compensated absences 116,481 37,879 341,182 57,502 553,044 25,527 Advance from other funds - 622,000 - - 622,000 - Claims payable - - - 5,547,378 Pollution remediation costs payable - 32,320 32,320 - Closure and maintenance costs payable 9,518,736 - - 9,518,736 Bonds payable - net of discount and premium 2,627,614 50,026,507 52,654,121 Total non-current liabilities 9,635,217 3,287,493 50,400,009 57,502 63,380,221 5,572,905 Total liabilities 10,322,650 3,935,629 61,615,411 142,639 76,016,329 8,073,733 NET ASSETS Invested in capital assets, net of related debt 29,940,585 4,096,108 189,322,998 15,646 223,375,337 461,825 Restricted for: Debt service - 43,333 249,167 - 292,500 - Capital projects - - 27,605,792 - 27,605,792 - Unrestricted 18,501,299 (210,589) 32,429,383 3,872,108 54,592,201 23,650,678 Total net assets $ 48,441,884 $ 3,928,852 $ 249,607,340 $ 3,887,754 $ 305,865,830 $ 24,112,503 The accompanying notes are an integral part of the financial statements. 239 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, 2010 OPERATING REVENUES Charges for services Charges for services pledged as security for revenue bonds Total operating revenues OPERATING EXPENSES Personal services Material, supplies, services and other operating Depreciation Total operating expenses Operating income (loss) NONOPERATING REVENUES (EXPENSES) Interest income Interest income pledged as security for revenue bonds Gain on disposal of equipment Interest expense Bond amortization expense Loss on disposal of equipment Total nonoperating revenues (expenses) Income (loss) before transfers and capital contributions Special item Capital contributions Transfers in Change in net assets Total net assets - beginning Total net assets - ending Enterprise Funds Solid Waste Disposal Golf District Course $ 8,972,136 $ - 3,148,029 8,972,136 3,148,029 2,787,852 613,212 6,743,624 1,780,752 1,147,477 144,286 10,678,953 2,538,250 (1,706,817) 609,779 439,057 - - 9,491 56,997 905 - (133,889) (41,505) (5,031) (1,963) 491,023 (166,961) (1,215,794) 442,818 28,068 (1,215,794) 470,886 49,657,678 3,457,966 48,441,884 $ 3,928,852 The accompanying notes are an integral part of the financial statements. 240 County County Utilities Building Internal Total Service Funds $ - $ 1,612,870 $ 10,585,006 $ 23,517,281 27,738,920 - 30,886,949 - 27,738,920 1,612,870 41,471,955 23,517,281 7,877,126 1,305,686 12,583,876 2,093,056 9,264,918 512,139 18,301,433 18,090,778 14,370,299 40,528 15,702,590 168,514 31,512,343 1,858,353 46,587,899 20,352,348 (3,773,423) (245,483) (5,115,944) 3,164,933 - 38,188 477,245 247,123 686,776 - 696,267 - 2,340 9,939 70,181 350 (2,314,809) - (2,448,698) - (241,860) - (283,365) - (13,804) (2,170) (22,968) (473) (1,881,357) 45,957 (1,511,338) 247,000 (5,654,780) (199,526) (6,627,282) 3,411,933 (665,460) - (665,460) - 1,713,074 - 1,741,142 - - - - 55,017 (4,607,166) (199,526) (5,551,600) 3,466,950 254,214,506 4,087,280 311,417,430 20,645,553 $ 249,607,340 $ 3,887,754 $ 305,865,830 $ 24,112,503 241 Indian River County, Florida Board of County Commissioners Statement of Cash Flows Proprietary Funds For the Year Ended September 30, 2010 Enterprise Funds Solid Waste Disposal Golf District Course CASH FLOWS FROM OPERATING ACTIVITIES Cash received from customers $ 9,003,992 Cash paid to suppliers for goods and services (8,972,320) Cash paid to employees for services (2,809,979) Net cash provided by (used in) operating activities (2,778,307) CASH FLOWS FROM NONCAPITAL FINANCING ACTIVITIES Transfers in - Operating grants 877,897 Payments on advances from other funds - Net cash provided by (used in) noncapital financing activities 877,897 CASH FLOWS FROM CAPITAL AND RELATED FINANCING ACTIVITIES Principal payments - bonds/notes Interest paid on long-term debt Proceeds from sales of capital assets Purchase of capital assets Bond paying agent fees Capital contributed by others Net cash provided by (used in) capital and related financing activities CASH FLOWS FROM INVESTING ACTIVITIES Interest and dividends on investments Net cash provided by investing activities Net increase (decrease) in cash and cash equivalents Cash and cash equivalents at beginning of year Cash and cash equivalents at end of year Classified as: Current assets Restricted assets Totals 56,997 (826,939) $ 3,137,467 (1,797,905) (621,115) 718,447 (60,000) (60,000) (510,000) (135,163) 905 (3,788) (769,942) (648,046) 499,006 10,962 499,006 10,962 (2,171,346) 21,363 30,813,457 480,991 $ 28,642,111 $ 502,354 $ 15,636,837 $ 31,532 13,005,274 470,822 $ 28,642,111 $ 502,354 The accompanying notes are an integral part of the financial statements. 242 County County Internal Utilities Building Total Service Funds $ 27,617,542 $ 1,612,870 $ 41,371,871 $ 23,305,553 (9,983,038) (512,613) (21,265,876) (18,317,543) (7,872,809) (1,317,737) (12,621,640) (2,086,711) 9,761,695 (217,480) 7,484,355 2,901,299 - - - 55,017 271 - 878,168 - - - (60,000) - 271 - 818,168 55,017 (2,870,000) - (3,380,000) - (2,510,976) - (2,646,139) - 2,340 11,499 71,741 350 (7,296,912) - (8,127,639) (1,152) (1,722) - (1,722) - 1,547,261 - 1,547,261 - (11,130,009) 11,499 (12,536,498) (802) 767,002 44,613 1,321,583 273,743 767,002 44,613 1,321,583 273,743 (601,041) (161,368) (2,912,392) 3,229,257 60,753,943 4,171,655 96,220,046 25,711,338 $ 60,152,902 $ 4,010,287 $ 93,307,654 $ 28,940,595 $ 30,060,604 $ 4,010,287 $ 49,739,260 $ 28,940,595 30,092,298 - 43,568,394 - $ 60,152,902 $ 4,010,287 $ 93,307,654 $ 28,940,595 Continued 243 Indian River County, Florida Board of County Commissioners Statement of Cash Flows Proprietary Funds For the Year Ended September 30, 2010 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) $ (1,706,817) $ 609,779 Adjustments to reconcile operating income to net cash provided by operating activities: Expenses reclassified as work in progress Depreciation 1,147,477 144,286 Capitalized self -incurred expenses - - (Increase) Decrease in assets: Accounts receivable 50,120 - Due from other governments 6,476 400 Inventories - (2,265) Liens receivable - - Impact fees receivable - - Special assessments receivable - - Prepaid items 1,000 - Increase (Decrease) in liabilities: Accounts payable (1,320,457) (13,722) Due to other governments - (1,166) Retainage payable - - Customer deposits (24,740) (1,000) Closure and maintenance costs payable (909,239) - Pollution remediation costs payable - - Unearned revenues - (9,962) Claims payable - - Accrued compensated absences (22,127) (7,903) Total adjustments (1,071,490) 108,668 Net cash provided by (used in) operating activities $ (2,778,307) $ 718,447 NONCASH CAPITAL AND RELATED FINANCING ACTIVITIES Change in fair value of investments $ (36,859) $ (1,131) Contributed property, infrastructure and equipment $ - $ 28,068 Capital assets purchased through accounts payable $ 18,072 $ - The accompanying notes are an integral part of the financial statements. 244 County County Internal Utilities Building Total Service Funds $ (3,773,423) $ (245,483) $ (5,115,944) $ 3,164,933 (401,903) - (401,903) - 14,370,299 40,528 15,702,590 168,514 (7,700) - (7,700) - (265,158) - (215,038) (227,497) - - 6,876 15,769 75,736 - 73,471 (34,269) (343,401) - (343,401) - 59,212 59,212 - 550,314 550,314 - (32,243) - (31,243) (134,091) (384,565) (301) (1,719,045) (82,405) 18,575 (173) 17,236 - 8,680 - 8,680 - (122,345) - (148,085) - - - (909,239) - (2,400) - (2,400) - - - (9,962) - - - - 24,000 12,017 (12,051) (30,064) 6,345 13,535,118 28,003 12,600,299 (263,634) $ 9,761,695 $ (217,480) $ 7,484,355 $ 2,901,299 $ (102,853) $ (7,457) $ (148,300) $ (43,163) $ 165,813 $ - $ 193,881 $ - $ 985,550 $ - $ 1,003,622 $ - 245 Indian River County, Florida Board of County Commissioners Statement of Fiduciary Net Assets Fiduciary Funds September 30, 2010 Other Postemployment Agency Benefits Trust ASSETS Cash and cash equivalents $ 5,661,432 $ 301 Investments, at fair value: Index funds - 2,912,340 U.S. government securities funds - 3,682,881 Prime money market fund - 317,913 Total assets $ 5,661,432 6,913,435 LIABILITIES Accounts payable $ 458,071 - Benefits payable - 1,323,971 Other deposits held in escrow 5,203,361 - Total liabilities $ 5,661,432 1,323,971 NET ASSETS Assets held in trust for other postemployment benefits Total net assets 5,589,464 $ 5,589,464 The accompanying notes are an integral part of the financial statements. 246 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, 2010 ADDITIONS Employer contributions $ 2,810,092 Investment income 415,361 Investment expense (2,610) Total additions 3,222,843 DEDUCTIONS Benefits payments 1,323,971 Total deductions 1,323,971 Change in net assets 1,898,872 Net assets - beginning 3,690,592 Net assets - ending $ 5,589,464 The accompanying notes are an integral part of the financial statements. 247 �AR MA 9 Indian River County, Florida Board of County Commissioners Notes To Financial Statements Year Ended September 30, 2010 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. 249 Indian River County, Florida Board of County Commissioners Notes To Financial Statements Year Ended September 30, 2010 NOTE 1 - SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES - Continued B. Fund Financial Statements The underlying accounting system of the Board 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 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. See Note 17 for more information on the spending hierarchy of fund balances in the fund financial statements. 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. Long-term receivables are reported on their balance sheets in spite of their spending measurement focus. Advances and notes to other funds are offset as nonspendable fund balance. See Note 17 for more information on the categories and descriptions of fund balances in the fund financial statements. 250 Indian River County, Florida Board of County Commissioners Notes To Financial Statements Year Ended September 30, 2010 NOTE 1 - SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES — Continued B. Fund Financial Statements — Continued Because of their spending measurement focus, expenditure 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. Proprietary 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. 251 Indian River County, Florida Board of County Commissioners Notes To Financial Statements Year Ended September 30, 2010 NOTE 1 - SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES - Continued B. Fund Financial Statements - Continued 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 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. Proprietary Major 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. 252 Indian River County, Florida Board of County Commissioners Notes To Financial Statements Year Ended September 30, 2010 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, 2010, 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, 2010. 253 Indian River County, Florida Board of County Commissioners Notes To Financial Statements Year Ended September 30, 2010 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 inventory which is valued using the moving 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. Other Assets Held For Resale This account represents assets the Board has purchased with the intent to resell. In fiscal year 2009, the Board was allocated $4.6 million from the U.S. Department of Housing and Urban Development's Neighborhood Stabilization Program under a Community Development Block Grant. This funding was to be used by local governments for acquiring, redeveloping, and reselling foreclosed properties that might otherwise become sources of abandonment within their communities. The Board purchased sixteen homes under this program and intends to resell them within the next fiscal year. They are reported at the lower of cost or market value on the balance sheet of the Board's governmental funds. I. 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. 254 Indian River County, Florida Board of County Commissioners Notes To Financial Statements Year Ended September 30, 2010 NOTE 1 - SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES — Continued I. Capital Assets - Continued Property, plant, equipment, intangible, and infrastructure assets of the primary government, as well as 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 Building and improvements Machinery and equipment Utility distribution systems Road and bridge infrastructure Fiberoptics Software Beach preservation infrastructure Stormwater infrastructure J. Capitalization of Interest Years 10-50 3-10 25-50 20-50 20 3-5 7 30 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. K. 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. L. 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. M. 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. 255 Indian River County, Florida Board of County Commissioners Notes To Financial Statements Year Ended September 30, 2010 NOTE 1 - SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES — Continued N. 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. O. 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. P. 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, 2010. Q. New Accounting Pronouncements Effective October 1, 2009, the County implemented the provisions of GASB Statement No. 54 Fund Balance Reporting and Governmental Fund Type Definitions. See Note 17 for further information on Fund Balance. R. 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, 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. 256 Indian River County, Florida Board of County Commissioners Notes To Financial Statements Year Ended September 30, 2010 NOTE 1 - SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES — Continued R. Budgets and Budgetary Accounting 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 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 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, 2010, the carrying value of the Board's deposits with banks was $13,922,262 and the bank balance was $15,405,008. 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, 2010, accrued interest for the Board's portfolio totaled $335,536 and was allocated to the funds based on their average monthly balance for September. 257 Indian River County, Florida Board of County Commissioners Notes To Financial Statements Year Ended September 30, 2010 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, 2010, the Board had the following investments: Weighted Average Maturity Portfolio Credit Investment Type Fair Value InYears Percentage Risks Fixed Rate Debt Instruments: U.S. Treasuries $ 53,081,837 0.97 18.51 % N/A U.S. Agencies:** Federal Farm Credit Bureau 35,318,202 1.53 12.31 AAA Federal Home Loan Bank 42,153,036 1.33 14.70 AAA Federal Home Loan Mortgage 42,056,848 1.07 14.66 AAA Federal National Mortgage Assoc. 56,067,956 0.93 19.55 AAA Other Fixed Rate Investments: Fund B Surplus Funds Trust Fund 539,290 7.49 0.19 Not Rated Florida Local Government AAAf and Investment Trust Fund 9,466,618 0.08 3.30 S-1* Other Market Rate Investments: Regions Bank Money Market 13,038,942 0.08 4.55 N/A Suntrust Bank NOW Account 13,544,608 0.08 4.72 N/A Dreyfus Gov't Cash Fund 1,493,714 0.08 0.52 Aaa Morgan Stanley Gov't Securities 1,013,688 0.08 0.35 Aaa Florida Trust Day to Day Fund 13,648,161 0.08 4.76 AAAm W&S Sinking Fund Reserve: Treasury Bill 2,698,271 0.21 0.94 N/A Federal Home Loan Bank 2,681,104 1.15 0.94 AAA Fidelity Institutional Money Market 4,613 0.08 0.00 Aaa Total Fair Value $ 286,806,888 100.00 % 0.94 * 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). 258 Indian River County, Florida Board of County Commissioners Notes To Financial Statements Year Ended September 30, 2010 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, 2010, the Board had $762,724 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 29.29% of the portfolio balance, or $223,434, was needed to represent the fair market value of the participation. Consequently, the net investment in Fund B is reported at $539,290. 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. 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; 259 Indian River County, Florida Board of County Commissioners Notes To Financial Statements Year Ended September 30, 2010 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 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 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, 2010, 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: the SunTrust NOW account, the Regions Bank Money Market, and the Florida Trust Day to Day Fund. 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, Bank of New York/Mellon. The investments are reported at fair value based upon market -close price on the last business day of each month. The Board approved a separate investment policy for the IRCOT assets on February 3, 2009 (amended 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. 260 Indian River County, Florida Board of County Commissioners Notes To Financial Statements Year Ended September 30, 2010 NOTE 2 - CASH AND CASH EQUIVALENTS - Continued D. OPEB Trust Investments - Continued The contribution of $3.03 million for year ended September 30, 2010 was invested in the various funds listed below. As of September 30, 2010, the Indian River County OPEB Trust (IRCOT) had the following investments: Total Fair Value $ 6,913,134 NOTE 3 - PROPERTY TAX REVENUES 100.00 % 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 2009-2010 fiscal year were levied in October 2009. 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. 261 Weighted Average Maturity Portfolio Credit Investment Type Fair Value InYears Percentage Risks Short -Term Portion: Fidelity Treasury Money Market $ 1,197,455 0.14 17.32 % Aaa Long -Term Portion: Vanguard 500 Index 1,279,203 N/A 18.50 N/A Vanguard All World Ex -US 1,183,553 N/A 17.12 N/A Vanguard Mid Cap Index 299,878 N/A 4.34 N/A Vanguard Small Cap Index 149,706 N/A 2.17 N/A Vanguard Short Term Treasury 1,366,538 2.30 19.77 Aaa Vanguard Intermediate Treasury 913,378 5.80 13.21 Aaa Vanguard Prime Money Market 317,913 0.15 4.60 A-1 Vanguard Federal Money Market 205,510 0.15 2.97 A-1 Total Fair Value $ 6,913,134 NOTE 3 - PROPERTY TAX REVENUES 100.00 % 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 2009-2010 fiscal year were levied in October 2009. 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. 261 Indian River County, Florida Board of County Commissioners Notes To Financial Statements Year Ended September 30, 2010 NOTE 4 — CAPITAL ASSETS A. Governmental Fund Type Capital Assets A summary of changes in the governmental fund type capital assets is as follows: Land Balance 10/1/2009 $ 138,267,881 Additions 721,639 Buildings And Construction Improvements Equipment Intangibles Infrastructure In Progress $ 176,701,657 $ 38,447,629 $ 2,258,577 $ 8,906,975 $ 7,674,094 9,721,815 4,267,042 361,945 42,218 4,983,700 Total $ 372,256,813 20,098,359 Deletions (575,961) (8,560) (4,491,989) - - (11,548,817) (16,625,327) Balance 9/30/2010 $ 138,413,559 $ 186,414,912 $ 38,222,682 $ 2,620,522 $ 8,949,193 $ 1,108,977 $ 375,729,845 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: Balance at 10/1/2009 Additions Deletions Less: Accumulated Depreciation Balance at 9/30/2010 C. Special Item Buildings And Construction Land Improvements Equipment Intangibles In Progress Total $19,277,925 $ 370,998,179 $20,282,263 $1,410,305 $ 38,980,527 $450,949,199 34,475 38,136,355 338,211 814,127 6,773,870 46,097,038 - (761,369) (1,438,099) - (36,483,427) (38,682,895) 19,312,400 408,373,165 19,182,375 2,224,432 9,270,970 458,363,342 - (165,504,527) (15,701,054) (607,550) - $19,312,400 $ 242,868,638 $ 3,481,321 $1,616,882 $ 9,270,970 (181.813.131) $ 276,550,211 In fiscal year 2010, the Utilities proprietary fund constructed a new sludge facility. The Board's existing sludge facility was not fully depreciated at the completion of the new facility, and Board staff determined that a portion of the facility would continue to be utilized for other Board needs. The portion that was abandoned resulted in the calculation of an impairment loss in accordance with GASB Statement 42 Accounting and Financial Reporting for Impairment of Capital Assets and for Insurance Recoveries. This loss resulted in a write down in value of $665,460 of the existing asset and is presented as a special item on the Statement of Revenues, Expenses, and Changes in Fund Net Assets for the Proprietary Funds. 262 Indian River County, Florida Board of County Commissioners Notes To Financial Statements Year Ended September 30, 2010 NOTE 5 — RESTRICTED CASH AND CASH EQUIVALENTS AND INVESTMENTS Solid Waste Disposal Golf County District Course Utilities Total Sinking funds $ - $ 470,822 $ 6,130,700 Renewal and replacement 3,347,112 - 3,485,928 Customer deposits 139,426 - 2,449,707 Capital construction - - 18,025,963 Closure and maintenance cost 9,518,736 - - Total $ 13,005,274 $ 470,822 $ 30,092,298 NOTE 6 — PAYABLE FROM RESTRICTED ASSETS $ 6,601,522 6,833,040 2,589,133 18,025,963 9,518,736 $ 43,568,394 Liabilities payable from the Board's Enterprise Funds restricted assets above are as follows: 263 Solid Waste Disposal Golf County District Course Utilities Total Accounts payable $ - $ - $ 1,511,711 $ 1,511,711 Retainage payable - - 124,900 124,900 Accrued interest payable - 9,989 193,710 203,699 Bonds payable (current portion) - 520,000 2,990,000 3,510,000 Closure/maint. costs payable 9,518,736 - - 9,518,736 Customer deposits 139,426 - 2,449,707 2,589,133 Total $ 9,658,162 $ 529,989 $ 7,270,028 $ 17,458,179 263 Indian River County, Florida Board of County Commissioners Notes To Financial Statements Year Ended September 30, 2010 NOTE 7 - INTERFUND BALANCES Interfund balances at September 30, 2010, consisted of the following: Receivable Fund Payable Fund Amount General Fund Nonmajor Governmental Funds $ 976,500 Amounts due from the above funds represent short-term cash loans that will be repaid within the next twelve months. Interfund advance at September 30, 2010, consisted of the following: Receivable Fund Payable Fund Amount Secondary Roads Construction Fund Golf Course Fund $ 622,000 This amount is considered a long-term advance between major funds expected to be paid over the course of several years. This amount has been presented as nonspendable on the Secondary Roads Construction Fund's Balance Sheet. NOTE 8 - INTERFUND TRANSFERS Interfund transfers for the year ended September 30, 2010, consisted of the following: 264 Transfers In: Transportation Nonmajor Internal Service Fund Governmental Funds Fund Total Transfers Out: General Fund $ 8,951,106 $ 178,959 $ 55,017 $ 9,185,082 Optional Sales Tax Fund - 6,000,000 - 6,000,000 Nonmajor Governmental Funds - 906,191 - 906,191 Total $ 8,951,106 $ 7,085,150 $ 55,017 $ 16,091,273 264 Indian River County, Florida Board of County Commissioners Notes To Financial Statements Year Ended September 30, 2010 NOTE 8 - INTERFUND TRANSFERS - Continued 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, and 3) use unrestricted general fund revenues to offset a portion of salaries and benefits expenses for an employee accounted for in the health insurance fund. One non -routine transfer occurred in the amount of $906,191 due to accumulated interest earnings that had to be transferred out of one nonmajor governmental fund, the SHIP Hurricane Housing Recovery Grant Fund, to be utilized in another nonmajor governmental fund, the State Housing Initiatives Partnership Fund, as per State requirements. NOTE 9 — DUE FROM OTHER GOVERNMENTS Governmental Funds 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-laning 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. Segment One Amount Advance Funded Segment Two Amount Advance Funded Less: Reimbursements received as of 9/30/2010 Balance Due from FDOT Balance Due from other governments Total Due from other governments Secondary Roads Optional Sales Construction Fund Tax Fund (9,930,567) 5,958,341 436,461 $ 6,394,802 265 $ 7,944,454 14,429,754 (4,965,284) 17,408,924 1,998,740 $ 19,407,664 Indian River County, Florida Board of County Commissioners Notes To Financial Statements Year Ended September 30, 2010 NOTE 10 - ACCOUNTS PAYABLE Accounts Payable at September 30, 2010, were as follows: Governmental Funds: General Impact Fees Secondary Roads Construction Transportation Emergency Services Optional Sales Tax Other Governmental Total Governmental Funds Proprietary Funds: Payable from current assets: Solid Waste Golf Course Utilities Building Other Proprietary Payable from restricted assets: Utilities Total Proprietary Funds The Board has not engaged in any short-term debt activity during fiscal year 2010 other than that listed in Note 7. Due To Other Governments - Utilities Fund On August 25, 2010, the Board received notification from the State Division of Emergency Management that a repayment of $2,827,524 may be due to the Federal Emergency Management Agency (FEMA) for disallowed costs related to a sewer project. The Board has appealed FEMA's decision. As of September 30, 2010, the Board recorded these costs as a liability, Due to Other Governments, in the Utilities proprietary fund while awaiting FEMA's response to the appeal. 266 Total Salaries and Accounts Vendors Benefits Payable $ 826,275 $ 419,154 $ 1,245,429 980,402 2,938 983,340 635,404 8,139 643,543 204,966 222,802 427,768 218,783 682,108 900,891 1,415,584 - 1,415,584 936,618 26,894 963,512 5.218.032 1,362.035 6,580.067 $ 370,812 $ 75,154 $ 445,966 32,034 18,973 51,007 530,784 249,297 780,081 2,414 37,841 40,255 97,781 29,868 127,649 1,511,711 - 1,511,711 S 2,545,536 S 411,133 2.956.669 The Board has not engaged in any short-term debt activity during fiscal year 2010 other than that listed in Note 7. Due To Other Governments - Utilities Fund On August 25, 2010, the Board received notification from the State Division of Emergency Management that a repayment of $2,827,524 may be due to the Federal Emergency Management Agency (FEMA) for disallowed costs related to a sewer project. The Board has appealed FEMA's decision. As of September 30, 2010, the Board recorded these costs as a liability, Due to Other Governments, in the Utilities proprietary fund while awaiting FEMA's response to the appeal. 266 Indian River County, Florida Board of County Commissioners Notes To Financial Statements Year Ended September 30, 2010 NOTE 11 - LONG-TERM LIABILITIES A. Changes in Governmental Long -Term Liabilities Accrued Compensated Absences: Bonds Payable: Limited General Obligation Bonds - 2006 Series General Obligation Bonds - 2001 Series General Obligation Refunding Bonds - 2003 Series Spring Training Facility Revenue Bonds - 2001 Series Total Bonds Payable Total Balance October 1, 2009 Additions $ 4,478,012 $ 2,830,117 Deletions $ 2,787,308 Balance September 30, 2010 $ 4,520,819 41,045,000 - 2,775,000 38,270,000 5,955,000 - 745,000 5,210,000 1,210,000 - 1,210,000 - 12,895,000 - 585,000 12,310,000 61,105,000 - 5,315,000 55,790,000 $ 65,583,012 $ 2,830,117 $8,102,308 $60,310,819 Of the $4,520,820 liability for accrued compensated absences, management estimates that $1,821,384 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. B. Governmental Long -Term Debt 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. 267 Indian River County, Florida Board of County Commissioners Notes To Financial Statements Year Ended September 30, 2010 NOTE 11 - LONG-TERM LIABILITIES - Continued B. Governmental Long -Term Debt - Continued Annual Debt Service Pam The annual debt service payments for bonds outstanding at September 30, 2010, are as follows: Fiscal Year Ending September 30 2011 2012 2013 2014 2015 2016-2020 2021-2025 2026-2030 2031 Total Limited General Obligation Bonds Series 2006 Principal Interest $ 2,885,000 $1,727,663 3,000,000 1,612,263 3,120,000 1,492,263 3,255,000 1,367,463 3,390,000 1,204,713 19,515,000 3,571,013 3,105,000 131,963 General Obligation Refunding Bonds Series 2001 Principal Interest $ 780,000 $ 213,008 810,000 183,368 845,000 151,778 885,000 117,978 925,000 80,808 965,000 41,495 38,270,000 11,107,341 5,210,000 788,435 Spring Training Facility Revenue Bonds Series 2001 Principal Interest $ 605,000 $ 618,833 630,000 593,423 655,000 566,333 685,000 537,513 725,000 501,550 4,215,000 1,897,700 2,300,000 910,450 2,060,000 427,750 435,000 21,750 12,310,000 6,075,302 Less: Current portion 2,885,000 - 780,000 - 605,000 - Add: Unamortized bond premium 1,002,163 - - - - - Total $ 36,387,163 $ 11,107,341 $ 4,430,000 $788,435 $ 11,705,000 $6,075,302 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. 268 Indian River County, Florida Board of County Commissioners Notes To Financial Statements Year Ended September 30, 2010 NOTE 11 - LONG-TERM LIABILITIES - Continued B. Governmental Long -Term Debt - Continued Limited General Oblijzation Bonds - Continued Bonds Issued - At September 30, 2010, Limited General Obligation Bonds consisted of the following: Description Limited General Obligation Bonds, 2006 Series Interest Rates and Date Maturi Outstanding at September 30, Issue 2010 4.00%-5.00% 1/1 and 7/1 2021 $ 48,600,000 38.270.000 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. 269 Indian River County, Florida Board of County Commissioners Notes To Financial Statements Year Ended September 30, 2010 NOTE 11 - LONG-TERM LIABILITIES - Continued B. Governmental Long -Term Debt - Continued General Obligation Bonds - Continued Bonds Issued - At September 30, 2010, General Obligation Bonds consisted of the following: Description General Obligation Bonds, 2001 Series Interest Rates and Date Maturi Issue Outstanding at September 30, 2010 2.50%-4.30% 1/1 and 7/1 2016 $ 11,000,000 5.210.000 General Obligation Refunding 1.50%-3.00% Bonds, 2003 Series 1/1 and 7/1 2010 $ 7,800,000 $ - 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 TrainingFacility 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. 270 Indian River County, Florida Board of County Commissioners Notes To Financial Statements Year Ended September 30, 2010 NOTE 11 - LONG-TERM LIABILITIES - Continued B. Governmental Long -Term Debt - Continued Spring Training Fg acility 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 $1,227,633 represent eighteen percent of total pledged revenues. All three revenue sources totaled $6,790,576 for the current fiscal year. The total principal and interest remaining to be paid on the bonds is $18,385,302. Bonds Issued - At September 30, 2010, Spring Training Facility Revenue Bonds consisted of the following: Description Spring Training Facility Revenue Bonds, Series 2001 Interest Rates and Date Maturi 3.30%-5.25% 4/1 and 10/1 2031 Outstanding at September 30, Issue 2010 $ 16,810,000 12.310.000 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. 271 Indian River County, Florida Board of County Commissioners Notes To Financial Statements Year Ended September 30, 2010 NOTE 11 - LONG-TERM LIABILITIES - Continued B. Governmental Long -Term Debt — Continued Spring Training Facility 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 435,000 272 Indian River County, Florida Board of County Commissioners Notes To Financial Statements Year Ended September 30, 2010 NOTE 11 - LONG-TERM LIABILITIES - Continued C. Enterprise Fund Bonds Payable Annual Debt Service Pam The annual debt service payments for bonds outstanding at September 30, 2010 are as follows: Fiscal Year Ending September 30 2011 2012 2013 2014 2015 2016-2020 2021-2025 Total Recreational Revenue Refunding Bonds Series 2003 Principal Interest $520,000 $119,864 535,000 102,964 555,000 83,169 580,000 62,356 600,000 39,881 385,000 15,881 Water and Sewer Revenue Bonds Series 1993 Principal Interest $ 1,555,000 $85,525 3,175,000 424,115 1,555,000 85,525 Water and Sewer Revenue Refunding Bonds Series 2005 Principal Interest $ 1,435,000 $ 970,800 1,480,000 925,250 1,530,000 877,150 1,605,000 800,650 1,670,000 736,450 9,675,000 2,344,500 4,530,000 279,150 21,925,000 6,933,950 Water and Sewer Revenue Refunding Bonds Series 2009 Principal Interest $ - $1,268,200 1,610,000 1,268,200 1,675,000 1,203,800 1,745,000 1,136,800 1,815,000 1,067,000 10,525,000 3,880,000 9,000,000 1,046,500 26,3 70, 000 10, 870,500 Less: Current portion 520,000 - 1,555,000 - 1,435,000 - - - Unamortized bond discount 27,386 - - - - - - - Add: Unamortized bond premium - - - - 733,521 - 2,432,986 - Total $2,627,614 $424,115 $ - $ 85,525 $ 21,223,521 $6,933,950 $ 28,802,986 $10,870,500 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. The financial strength of our municipal bond insurer, AMBAC, was downgraded to Baal in the previous year. 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 of $417,500 was cash funded. 273 Indian River County, Florida Board of County Commissioners Notes To Financial Statements Year Ended September 30, 2010 NOTE 11— LONG-TERM LIABILITIES - Continued C. Enterprise Fund Bonds Payable - Continued Recreational (Golf Course) Revenue Refunding Bonds, Series 2003 - Continued The current principal and interest payments of $643,889 represent eighty-four percent of net revenues ($763,556) of the golf course. The total principal and interest remaining to be paid on the bonds is $3,599,115. All three pledged revenue sources totaled $1,695,118 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. Rate Covenant — Net revenues shall be sufficient to pay 100% of reserve and current year principal and interest requirements. Bonds Issued - At September 30, 2010, the revenue bonds consisted of the following: Description 2003 Recreational Revenue Refunding Bonds Less: Current Portion of bonds Unamortized Bond Discount Long -Term Portion of bonds Interest Rates and Date 2.00 — 4.125% 3/1 and 9/1 Maturi Issue 9/1/16 $ 6,455,000 Outstanding at September 30, 2010 $ 3,175,000 520,000 27,386 $ 2.627.614 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. 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 $1,641,650 represent approximately thirteen percent of net revenues ($12,755,643) of the utility system. The total principal and interest remaining to be paid on the bonds is $1,640,525. 274 Indian River County, Florida Board of County Commissioners Notes To Financial Statements Year Ended September 30, 2010 NOTE 11— LONG-TERM LIABILITIES - Continued C. Enterprise Fund Bonds Payable - Continued Bonds Issued — At September 30, 2010 the revenue bonds consisted of the following: Outstanding at Interest Rates Original September 30, Description and Date Maturi Issue 2010 Water and Sewer 5.50% Revenue Bonds, 3/1 and 9/1 2024 $ 47,190,000 $ 1,555,000 Series 1993A Less: Current Portion of bonds 1,555,000 Long -Term Portion of bonds $ - 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 year was not included in the refunding and will be paid on the date listed below: Term Bonds due September 1, 2011 Date September 1, 2011 Principal Amount $ 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 $2,407,650 represent approximately nineteen percent of net revenues ($12,755,643) of the utility system. The total principal and interest remaining to be paid on the bonds is $28,858,950. 275 Indian River County, Florida Board of County Commissioners Notes To Financial Statements Year Ended September 30, 2010 NOTE 11 - LONG-TERM LIABILITIES - Continued C. Enterprise Fund Bonds Payable — Continued Bonds Issued - At September 30, 2010, the revenue bonds consisted of the following: Description Water and Sewer Revenue Bonds, Series 2005 Less: Current Portion of bonds Add: Unamortized Bond Premium Long -Term Portion of bonds Interest Rates and Date Maturi Issue 3-5% 3/1 and 9/1 2022 $ 27,675,000 Outstanding at September 30, 2010 $ 21,925,000 1,435,000 733,521 21.223.521 Outstanding In -Substance Defeased Debt - The proceeds from the refunding were 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 Board 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. The interest payments of $1,331,610 represent approximately ten percent of net revenues ($12,755,643) of the utility system. The total principal and interest remaining to be paid on the bonds is $37,240,500. 276 Indian River County, Florida Board of County Commissioners Notes To Financial Statements Year Ended September 30, 2010 NOTE 11 - LONG-TERM LIABILITIES - Continued C. Enterprise Fund Bonds Payable — Continued Bonds Issued - At September 30, 2010, the revenue bonds consisted of the following: Description Water and Sewer Revenue Bonds, Series 2009 Less: Current Portion of bonds Add: Unamortized Bond Premium Long -Term Portion of bonds Interest Rates and Date Maturi Issue 4-5% 3/1 and 9/1 2024 $ 26,370,000 Outstanding at September 30, 2010 $ 26,370,000 2,432,986 28.802.986 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 Board 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. 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. Description Capital Improvement Revenue Bonds: Series 1980 277 Retired Outstanding at During Outstanding at September 30, Fiscal Year September 30, 2009 2010 2010 745 000 355 000 390 000 277 Indian River County, Florida Board of County Commissioners Notes To Financial Statements Year Ended September 30, 2010 NOTE 11 - LONG-TERM LIABILITIES - Continued 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. The School bonds with a principal amount of $14,800,000 were called January 6, 2010. NOTE 12 - 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 $4.2 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 sub -accounts: 278 Capacity Estimated Used Closing Amount Closure Costs Class I - Segments I and II 54% 2027 $ 4,570,693 Construction and Demolition - Cell I 89% 2015 1,083,866 Post -closure Costs Class I - Segments I and II N/A N/A 3,694,689 Construction and Demolition - Cell I N/A N/A 169,488 Total account balance at 9/30/10: $ 9,518,736 278 Indian River County, Florida Board of County Commissioners Notes To Financial Statements Year Ended September 30, 2010 NOTE 12 - PROVISION FOR CLOSURE COSTS - Continued 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, 2010, $9,466,618 was on deposit at the Florida Local Government Investment Trust and $52,118 was on deposit in the Board's Operating account. A summary of changes in the landfill closure liability account is as follows: Balance Balance 10/01/09 Deposits Withdrawals 09/30/10 Closure and long-term care costs 10.427.975 $495,402 $1,404,641 9.518.736 Of the $9,518,736 liability for closure and long-term care costs, management estimates that no funds will be due and payable within one year. 279 Indian River County, Florida Board of County Commissioners Notes To Financial Statements Year Ended September 30, 2010 NOTE 13 — POLLUTION REMEDIATION In accordance with GASB Statement 49, a consultant evaluated six 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 six sites requiring the County (using the consultant's services) to attempt to accrue a liability for pollution remediation. The liability totaled $2,539,800 at September 30, 2010 for all six 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 $32,400. 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 $3,000. 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 $74,800. 5) Former Cumberland Farms — The nature of the pollution remediation obligation is closed underground storage tank petroleum contamination. The consultant will conduct the remediation work and coordinate with the FDEP. The amount of the estimated year end liability is $188,000. Total governmental funds liability: $2,498,200 Proprietary Funds: 6) 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 $41,600. 280 Indian River County, Florida Board of County Commissioners Notes To Financial Statements Year Ended September 30, 2010 NOTE 14 — 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. Contributions to the FRS for the fiscal years ended September 30, 2008, 2009 and 2010, were equal to 13.3%, 13.1%, and 13.4% of the annual covered payroll. Contributions to the FRS for the fiscal years ended September 30, 2008, 2009, and 2010, were $5,803,638, $5,630,401 and $5,602,795 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. 281 Indian River County, Florida Board of County Commissioners Notes To Financial Statements Year Ended September 30, 2010 NOTE 15 — 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 $735 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 2%/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%/yr-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. 282 Indian River County, Florida Board of County Commissioners Notes To Financial Statements Year Ended September 30, 2010 NOTE 15 — OTHER POSTEMPLOYMENT BENEFITS PLAN — Continued A. Plan Description — Continued At October 1, 2009, the date of the latest actuarial valuation, plan participation consisted of- Active fActive participants 1,452 Retired participants 286 Total participants 1.738 There are two classes of participants at October 1, 2009: Regular and senior management 1,153 Special risk 585 Total participants 1.738 Financial statements for the IRCOT are included in this report and can be found on pages 40-41. A separate, stand-alone financial report is not issued by the County. The IRCOT investments can be found in Note 2D. 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 IRCOT is advance funded by the Board. For the year ended September 30, 2010, the County contributed $3.03 million to the qualifying IRCOT. Plan members receiving benefits contributed $0.95 million, or approximately 38 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. Custodial and individual fund administrative fees are paid from the portfolio dividend and interest income. C. Annual OPEB Cost and Net OPEB Obligation The employer's contribution (i.e. annual cost or expense) to the County's IRCOT 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 IRCOT cost for the year and two preceding years, the amount actually contributed, and the changes in the net obligation. Annual Required Contribution Interest on Net OPEB Obligation Adjustment to Annual Required Contribution Annual OPEB Cost (expense) Contributions Change in Net OPEB obligation Net OPEB obligation — beginning of year Net OPEB obligation — end of year Percentage of Annual OPEB Cost Contributed FY 2009/2010 FY 2008/2009 FY 2007/2008 $ 2,814,435 $ 2,810,092 $ 2,626,254 (7,272) (6,587) - 7.779 6.082 - 2,814,942 (3,030,792) (215,850) (103,880) (319,730) 283 107.67% 2,809,587 (2,819,373) (9,786) (94,094) $ (103,880) $ 100.35% 2,626,254 (2,720,348) (94,094) (94,094) 103.58% Indian River County, Florida Board of County Commissioners Notes To Financial Statements Year Ended September 30, 2010 NOTE 15 — OTHER POSTEMPLOYMENT BENEFITS PLAN - Continued D. Funded Status and Funding Progress The contribution made to the IRCOT for the current fiscal year was 107.7% of the annual OPEB cost. Information is available for the two preceding fiscal years. As of the October 1, 2009 actuarial valuation date, the IRCOT was 11.37% funded, the actuarial accrued liability for benefits was $32.5 million, and the actuarial value of assets was $3.7 million, resulting in an unfunded actuarial accrued liability (URAL) of $28.8 million. The covered payroll (annual payroll of active employees covered by the IRCOT) was $70.6 million, and the ratio of the UAAL to the covered payroll was 40.8%. 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 and schedule of employer contributions, 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. 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 Amortization method Amortization period (closed) Asset valuation method The actuarial assumptions are: Investment rate of return Projected annual salaries increase Healthcare cost trend rate (post-retirement benefit) Inflation rate Entry age normal cost method Level percent of payroll projected to grow 4% per year 18 years Market Value 7% (net administrative expenses) 4.5%-9.47% (dependent on years of service and age) 9% Included in the Healthcare cost trend rate I:" Indian River County, Florida Board of County Commissioners Notes To Financial Statements Year Ended September 30, 2010 NOTE 16 - OPERATING LEASES The Board has entered into noncancelable operating leases, both as lessor and lessee. Lease terms vary from 2 to 49 years. Lease revenues totaled $541,692 and lease expenditures totaled $78,644 for the year ended September 30, 2010. 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 2011 $ 538,871 2012 470,728 2013 437,901 2014 442,000 2015 455,484 2016-2020 2,308,812 2021-2025 1,752,374 2026-2030 700,152 2031-2035 227,565 Total future minimum receipts: $ 7.333.887 The property being leased is reported in the financial statements of County and has a cost of $25,704,643, and a carrying value of $18,341,513. Current year depreciation on property being leased was $682,615. 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, 2010: Year Amount 2011 $ 72,026 2012 74,901 2013 77,776 2014 40,401 2015 22,832 2016-2020 91,628 2021-2025 1,500 2026-2030 1,500 2031-2035 1,500 2036-2040 1,500 2041-2045 1,500 2046-2048 900 Total future minimum lease payments: 387 964 285 Indian River County, Florida Board of County Commissioners Notes To Financial Statements Year Ended September 30, 2010 NOTE 17 - FUND BALANCE The Board elected to early implement the GASB Statement 54 — Fund Balance Reporting and Governmental Funds Type Definitions. The Statement requires the fund balance for governmental funds to be reported in classifications that comprise a hierarchy based primarily on the extent to which the government is bound to honor constraints on the specific purposes for which amounts in those funds can be spent. Categories There are five categories of fund balance for governmental funds under Statement 54: Nonspendable — Amounts that cannot be spent because they are not in spendable form or are legally or contractually required to remain intact. Restricted — Use of these resources is based on the constraints imposed externally by creditors, grantors, contributors, or laws and regulations of other governments; or imposed by law through constitutional provisions or enabling legislation. Committed — Amounts whose use is constrained by formal action of the Board of County Commissioners, including resolution or ordinance. This category includes contractual obligations entered into by the Board of County Commissioners. Assigned — Amounts constrained by the Board's intent to be used for specific purposes. Amounts appropriated to eliminate a budgetary deficit in a subsequent year are reported in this category as well. Unassigned — Residual amounts in the general fund that do not meet any of the other fund balance classifications. Fund Balance Policy On September 21, 2010, the Board approved a Fund Balance and Reserve Policy that set forth the following reserves of fund balance in the General, Transportation, and Emergency Services District Funds: Emergency/Disaster Relief Reserve — A balance of no less than 5% of budgeted operating expenditures for the current fiscal year will be reserved only for the purpose of responding to natural and man-made disasters. Disasters include hurricanes, tropical storms, floods, wildfires, or terrorist activities. These funds can only be used to respond and provide relief after such a disaster. Funds will be replenished over a five-year period after the completion of the recovery from the disaster. This reserve is presented as committed fund balance in those funds. Budget Stabilization Reserve — A balance of no less than 5% of budgeted operating expenditures for the current fiscal year will be reserved only for the purpose of revenue declines or unfunded mandates from the state and federal governments. This reserve is presented as committed fund balance in those funds. Funds utilized due to revenue declines will be replenished over a five-year period. Funds utilized for unfunded mandates or unanticipated expenditures cannot be used for more than a three-year period and must be replenished within five -years after the three-year period. 286 Indian River County, Florida Board of County Commissioners Notes To Financial Statements Year Ended September 30, 2010 NOTE 17 - FUND BALANCE — Continued Fund Balance Policy - Continued The approved fund balance policy dictates the Board's attempt to maintain a minimum unassigned fund balance in the General, Transportation, and Emergency Services District funds of 20% of budgeted annual operating expenditures. The Emergency/Disaster Relief and Budget Stabilization Reserve amounts may only be revised by the Board of County Commissioners. The minimum fund balance level may be revised by the County Administrator or his designee. Spending Hierarchy For all governmental funds, when restricted, committed, assigned, and unassigned fund balances are combined in a fund, qualified expenditures are paid first from restricted or committed fund balance, as appropriate, then assigned and finally unassigned fund balances. NOTE 18 - FUND BALANCE DEFICIT The following funds had a deficit in fund balance at September 30, 2010: Fund Nonmajor Governmental Funds: Deficit Metropolitan Planning Organization Fund $ 120,199 Federal/State Grants Fund 45,695 Disaster Recovery Grant Fund 33,248 Total Deficit $ 199,142 The deficits for these three funds will be eliminated by grant proceeds in fiscal year 2011. 287 Indian River County, Florida Board of County Commissioners Notes To Financial Statements Year Ended September 30, 2010 NOTE 19 — RESTRICTED NET ASSETS The Board has established certain restrictions within the net assets section of the proprietary funds. Restricted net assets at September 30, 2010 consist of the following: Restricted for Debt Service: Golf Course Fund $ 43,333 County Utilities Fund 249,167 Total $ 292,500 Restricted for Capital Projects: County Utilities Fund $ 27,605,792 Indian River County, Florida Board of County Commissioners Notes To Financial Statements Year Ended September 30, 2010 NOTE 20 - 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: 10/01/08 to 09/30/10 $ 350,000 250,000 250,000 250,000 250,000 2,000,000 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 2008, 2009, and 20010 fiscal years. .& 10/01/04 to 04/01/08 to 03/31/08 09/30/08 Worker's Compensation $ 600,000 $ 300,000 General Liability 200,000 250,000 Auto Liability 200,000 250,000 Property Damage 500-25,000 500-25,000 Error or Omissions 200,000 250,000 Annual Aggregate 1,000,000 1,000,000 Liquor Liability 1,000,000 1,000,000 10/01/08 to 09/30/10 $ 350,000 250,000 250,000 250,000 250,000 2,000,000 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 2008, 2009, and 20010 fiscal years. .& Indian River County, Florida Board of County Commissioners Notes To Financial Statements Year Ended September 30, 2010 NOTE 20 - RISK MANAGEMENT - Continued A. General Liability, Property, Worker's Compensation and Medical — Continued The claims liability of $7,899,000 reported at September 30, 2010, 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, $2,351,622 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: Claims and Changes in Estimates $14,282,793 14,209,397 15,637,406 13,940,099 Claims Payments $ (13,589,793) (13,873,397) (14,657,406) (13,916,099) Balance at Fiscal Year End $ 6,559,000 6,895,000 7,875,000 7,899,000 Included in the charges to other funds is an amount to fund future catastrophic losses not actuarially determined; and at September 30, 2010, unrestricted net assets of $21,164,759 have been designated for this purpose. The Board has elected to accrue the larger of the discounted liability or undiscounted liability. At September 30, 2010, the undiscounted liability was the greater of the two amounts. The discount rate used in the calculation was 2.5 percent. 290 Balance at Fiscal Year Be _ ig nning 2006-2007 $ 5,866,000 2007-2008 6,559,000 2008-2009 6,895,000 2009-2010 7,875,000 Claims and Changes in Estimates $14,282,793 14,209,397 15,637,406 13,940,099 Claims Payments $ (13,589,793) (13,873,397) (14,657,406) (13,916,099) Balance at Fiscal Year End $ 6,559,000 6,895,000 7,875,000 7,899,000 Included in the charges to other funds is an amount to fund future catastrophic losses not actuarially determined; and at September 30, 2010, unrestricted net assets of $21,164,759 have been designated for this purpose. The Board has elected to accrue the larger of the discounted liability or undiscounted liability. At September 30, 2010, the undiscounted liability was the greater of the two amounts. The discount rate used in the calculation was 2.5 percent. 290 Indian River County, Florida Board of County Commissioners Notes To Financial Statements Year Ended September 30, 2010 NOTE 21 - 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. B. Contracts and Other Commitments The Board has various contracts and commitments outstanding at September 30, 2010. In the General Fund, contracts are for custodial services and external auditing services. In the Special Revenue Funds, contracts are for Sector 3 beach restoration, Old Dixie Highway bridge replacement, 43rd Avenue and 66th Avenue roadway expansions as well as a variety of other road paving and drainage projects. In the Capital Projects Fund, contracts are for the expansion of the 800 Mhz radio system, South County Park Phase III improvements, 53rd Street roadway improvements, and several sidewalk and road improvement projects throughout the County. In the Enterprise Funds, contracts are for the North County Reverse Osmosis Plant raw water transmission system, Spoonbill Marsh Wetlands, Utility software implementation and various other water and sewer projects. A summary of these projects at September 30, 2010, is as follows: General Special Revenue Capital Projects Enterprise Total Total Contract Price $ 724,705 $ 34,903,912 12,223,685 Remaining Total Paid as of Balance at September 30, 2010 September 30, 2010 (403,237) $ (20,902,256) (9,512,494) 8,551,914 (5,275,542) 321,468 14,001,656 2,711,191 3.276.372 $ 56,404,216 $ (36,093,529) $ 20,310,687 291 Indian River County, Florida Board of County Commissioners Notes To Financial Statements Year Ended September 30, 2010 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 Board. In the opinion of management, any such adjustments would not be significant. NOTE 22 — SUBSEQUENT EVENTS On February 15, 2011, the Board of County Commissioners elected to change the financial and administrative support to the Indian River County Housing Authority (IRCHA). As of April 15, 2011 the IRCHA will no longer be included as a component unit in the County's Comprehensive Annual Financial Report (CAFR) going forward. The County has agreed to continue funding the IRCHA for the remainder of the 2011 fiscal year with the unspent appropriation. For fiscal years ending after September 30, 2011, the IRCHA will be funded like an outside agency. 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 772-234.8488 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 Indian River County, Florida, including the fund financial statements of the Board of County Commissioners (the "Board"), as of and for the year ended September 30, 2010 and have issued our report thereon dated March 11, 2011. 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 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. Our consideration of the 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 over financial reporting 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. "Providing Vision and Direction to our Clients" Member AICPA Member AICPA Division For CPA Firms Member FICPA 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 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, 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 or other matters that are required to be reported under Government Auditing 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. Vero Bach, Florida March 11, 2011 294 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 Board of County Commissioners Indian River County, Florida We have audited the financial statements of Indian River County, Florida, including the fund financial statements of the Board of County Commissioners, as of and for the year ended September 30, 2010 and have issued our report thereon dated March 11, 2011. We conducted our audit in accordance with United States 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 and OMB Circular A-133, Audits of States, Local Governments, and Non -Profit Organizations. We have issued our Report on Internal Control Over Financial Reporting and on Compliance and Other Matters, Report on Compliance with Requirements that Could Have a Direct and Material Effect on 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, and Schedule of Findings and Questioned Costs. Disclosures in those reports and schedule, which are dated March 11, 2011, 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. This letter includes the following information, which is not included in the aforementioned auditors' reports or schedules. In accordance with the Rules of the Auditor General (Section 10.554(l)(i)l.), we have noted that Endings and recommendations made in the preceding annual financial audit appear to be appropriately resolved. As required by the Rules of the Auditor General (Section 10.554(1)(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(1)(i)3.) require 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. 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 findings. "Providing Vision and Direction to our Clients" Member AICPA Member AICPA Division For CPA Firms Member FICPA Private Companies Practice Section 295 Harris, Cotherman, Jones, Price & Associates Certified Public Accountants - Chartered The Honorable Board of County Commissioners Indian River County, Florida Page two The Rules of the Auditor General (Section 10.554(1)(i)5.) provide that the auditor may, based on professional judgment, report the following matters that have an inconsequential effect on 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) deficiencies in internal control 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(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. 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 and others within the entity, 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�lorida March 11, 2011 296 CLERK OF THE CIRCUIT COURT 297 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 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, 2010 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, 2010 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, 2010 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 11, 2011 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 intennd�e�d� two -be and should not be used by anyone other than these specified parties. �u�Ci Q — C>Qicv�7� Vero Be ch Florida March 11, 2011 'Troviding Vision and Direction 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, 2010 ASSETS Cash and cash equivalents Accounts receivable Prepaid expenses Due from other governments Total assets LIABILITIES AND FUND BALANCES Liabilities: Accounts payable Due to other governments Other deposits held in escrow Total liabilities Fund Balances: Nonspendable: Prepaid items Restricted for: Court -related costs and improvements Committed to: Court operations Total fund balances Total liabilities and fund balances General $ 555,546 $ 83,988 8,813 13,216 $ 661,563 $ Special Revenue Fund Total Governmental Funds 2,608,401 $ 3,163,947 - 83,988 15,823 24,636 - 13,216 2,624,224 $ 3,285,787 $ 190,037 $ 5,379 $ 195,416 63,697 32 63,729 154,331 - 154,331 408,065 5,411 413,476 8,813 15,823 24,636 - 2,511,417 2,511,417 244,685 91,573 336,258 253,498 2,618,813 2,872,311 $ 661,563 $ 2,624,224 $ 3,285,787 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, 2010 REVENUES Intergovernmental Charges for services Judgments, fines and forfeits Interest Miscellaneous Total revenues EXPENDITURES General government Court related Total expenditures Excess of revenues over (under) expenditures OTHER FINANCING SOURCES (USES) Transfers in Transfers out Transfers from Board of County Commissioners Transfer to other governments Total other financing sources (uses) Net change in fund balances Fund balances at beginning of year Fund balances at end of year Special Revenue General Fund Total Governmental Funds $ 3,511,740 $ - $ 3,511,740 1,007,435 306,753 1,314,188 - 172,276 172,276 675 16,200 16,875 15,423 - 15,423 4,535,273 495,229 5,030,502 1,691,341 338,814 2,030,155 3,644,755 90,261 3,735,016 5,336,096 429,075 5,765,171 (800,823) 66,154 (734,669) 14,086 - 14,086 - (14,086) (14,086) 1,003,407 - 1,003,407 (71,692) - (71,692) 945,801 (14,086) 931,715 144,978 52,068 197,046 108,520 2,566,745 2,675,265 $ 253,498 $ 2,618,813 $ 2,872,311 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, 2010 REVENUES Intergovernmental Charges for services Interest Miscellaneous Total revenues EXPENDITURES General government Court related Total expenditures Excess of revenues over (under) expenditures OTHER FINANCING SOURCES (USES) Transfers in Transfers from Board of County Commissioners Transfers to other governments Total other financing sources (uses) Net change in fund balances Fund balances at beginning of year Fund balances at end of year Variance with 108,520 $ 253,498 The accompanying notes are an integral part of the financial statements. 301 Final Budget Budgeted Amount Positive Original Final Actual (Negative) $ 3,364,925 $ 3,371,535 $ 3,511,740 $ 140,205 914,100 914,100 1,007,435 93,335 1,000 1,000 675 (325) - - 15,423 15,423 4,280,025 4,286,635 4,535,273 248,638 1,758,468 1,756,348 1,691,341 65,007 3,798,057 3,806,787 3,644,755 162,032 5,556,525 5,563,135 5,336,096 227,039 (1,276,500) (1,276,500) (800,823) 475,677 273,093 273,093 14,086 (259,007) 1,003,407 1,003,407 1,003,407 - - - (71,692) (71,692) 1,276,500 1,276,500 945,801 (330,699) $ - $ - 144,978 $ 144,978 108,520 $ 253,498 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, 2010 ASSETS Cash and cash equivalents $ 4,580,390 Total assets $ 4,580,390 LIABILITIES Accounts payable $ 3,818 Due to other governments 1,135,343 Escrow deposits 3,441,229 Total liabilities $ 4,580,390 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, 2010 NOTE 1 - 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 general revenue appropriations and by trust funds supported by filing fees, service charges, fines, and court 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 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 the Circuit Court'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 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 are not accounted for in another fund. All general operating revenues, which are not restricted or designated for 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 from recording fees to 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 Agency Fund — The Agency Fund is used to account for assets held by the Clerk of the Circuit Court in a trustee capacity or as an agent. These funds cannot be used to support the Clerk's own programs. 303 Indian River County, Florida Clerk of the Circuit Court Notes To Financial Statements Year Ended September 30, 2010 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 by October 1. 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. Indian River County, Florida Clerk of the Circuit Court Notes To Financial Statements Year Ended September 30, 2010 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 The Clerk budgeted two transfers: one in the amount of $194,310 from the public records modernization fund to subsidize court technology expenses and one in the amount of $78,783 from the 10% fine fund to subsidize court operations. At year end, the only transfer needed was $14,086 to fund court technology expenses. 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, 2010, 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 $71,692, 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 $14,086 was made from the public modernization funds to the non -court related general fund to cover technology -related expenses. J. Fund Balance GASB Statement 54 — Fund Balance Reporting and Governmental Funds Type Definitions was implemented as of October 1, 2009. The Statement requires the fund balance for governmental funds to be reported in classifications that comprise a hierarchy based primarily on the extent to which the government is bound to honor constraints on the specific purposes for which amounts in those funds can be spent. Categories for fund balance are as follows: nonspendable, restricted, committed, assigned, and unassigned. For more information, see the County Note on Fund Balance. Court -related revenues in excess of expenditures at September 30, 2010 were $144,978. Per Florida Senate Bills 1718 and 2108, excess fees for the court related function are determined on June 30 of each year to coincide with the State fiscal year. Therefore, it is presented as fund balance of the General Fund at September 30, 2010. 305 Indian River County, Florida Clerk of the Circuit Court Notes To Financial Statements Year Ended September 30, 2010 NOTE 2 - CASH AND CASH EQUIVALENTS A. Deposits At September 30, 2010, the carrying value of the Clerk's deposits was $2,583,431, and the bank balance was $2,757,185. 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. B. Investments The Local Government Surplus Funds Trust Fund is a money market 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 $30,684 invested in Fund B Local Government Surplus Funds Trust Fund. At September 30, 2010, the State Board of Administration (SBA) determined a negative fair market value adjustment of 29.29% of the portfolio balance, or $8,988, was needed to represent the fair market value of the participation. Consequently, the net investment in Fund B is reported at $21,696. The Florida Local Government Investment Trust Fund -Florida Trust Day to Day Fund is a money market product of various securities with an average maturity of 45 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 $5,137,410 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. 306 Indian River County, Florida Clerk of the Circuit Court Notes To Financial Statements Year Ended September 30, 2010 NOTE 3 — PENSION PLAN- Continued 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. Contributions to the FRS for the fiscal years ended September 30, 2008, 2009 and 2010, were equal to 9.95%, 10.17%, and 10.62% of the annual covered payroll. Contributions to the FRS for the fiscal years ended September 30, 2008, 2009, and 2010 were $417,836, $432,578, and $375,894 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 2010 annual required contribution of $138,092 was funded by: the Board of County Commissioners in the amount of $21,014; the court -related State expenditures in the amount of $115,577; and the public modernization trust fund in the amount of $1,501. This contribution was considered 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 the County Notes. 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 2010 at an annual cost of approximately $745,483. Further details of this self-insurance program are discussed in the County -wide financial statements and County Notes. 307 Indian River County, Florida Clerk of the Circuit Court Notes To Financial Statements Year Ended September 30, 2010 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, 2010: Beginning Ending Balance Balance 10/01/09 Additions Deletions 9/30/10 Accrued Compensated Absences 219 412 &2K,927 $265,050 $247,289 Of the $247,289 liability for accrued compensated absences, management estimates that $50,000 will be due and payable within one year. The long-term liabilities are not reported in the financial statements of the Clerk since they are not payable from available spendable resources. They are reported in the financial statements of the County. 308 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 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, 2010 and issued our report thereon dated March 11, 2011. 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" Member AICPA Member AICPA Division For CPA Firms Member FICPA Private Companies Practice Section 309 Harris, Cotherman, Jones, Price & Associates Certified Public Accountants - Chartered The Honorable Jeffery K. Barton Clerk of the Circuit Court Page two This report is intended solely for the information and use of management, the Clerk of the Circuit Court, 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. J`�� 'Q.�'0� � C - 0 �l�!.P/Y►'Y.Z.w� G/�D�i.(,d�� \ J'J�� °� ��A-4Q2�.C�'l �?�N qMt) dvxa mlaWZ -Chi Vero Beach, Florida March 11, 2011 310 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, 2010 and have issued our report thereon dated March 11, 2011. 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 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 11, 2011, 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 wh ich 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. Corrective action has been taken to address recommendations made in the management letter for fiscal year ending September 30, 2009. 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(1)(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 provisions of 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 Vision and Direction to our Clients" Member AICPA Member AICPA Division For CPA Firms Member FICPA Private Companies Practice Section 311 Harris, Cotherman, Jones, Price & Associates Certified Public Accountants - Chartered The Honorable Jeffrey K. Barton Clerk of the Circuit Court Page two Section 10.554(1)(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 provisions of contracts or grant agreements, or fraud, illegal acts, or abuse and, (2) deficiencies in internal control 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. Section 10.554(1)(i)8., Rules of the Auditor General, requires a statement as to whether or not the Clerk of Courts complied with Sections 28.35 and 28.36, Florida Statutes. In connection with our audit, we 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, and applicable federal and state agencies, and is not intended to be and should not be used by anyone other than these specified parties. Q��,t.0,� �-4'`TlUtlt�rtl.IirU � � `/✓u,G�� °� Qq,d,Ct�,t,Ex,� Vero Beach, Florida March 11, 2011 312 PROPERTY APPRAISER 313 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 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, 2010 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, 2010 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, 2010 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 11, 2011 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 be and should not be used by anyone other than these speci-/fi-ed parties. g��[}�J►_(,Q�/ `" _ ' �'GfJYx��/ � �J1.000i °� ��G�4"d�2dL,Cl1� Vero B ach, Florida March 11, 2011 "Providing Vision and Direction to our Clients' Member AICPA Member AICPA Division For CPA Firms Member FICPA Private Companies Practice Section 314 Indian River County, Florida Property Appraiser Balance Sheet General Fund September 30, 2010 ASSETS Cash and cash equivalents $ 131,700 Accounts receivable 9,227 Total assets $ 140,927 LIABILITIES AND FUND BALANCES Liabilities: Accounts payable $ 24,503 Due to other governments 105,033 Deposits 11,391 Total liabilities 140,927 Fund Balances: Unassigned - Total fund balances - Total liabilities and fund balances $ 140,927 The accompanying notes are an integral part of the financial statements. 315 REVENUES Charges for services Interest Total revenues EXPENDITURES General government Total expenditures Excess of revenues over (under) expenditures OTHER FINANCING USES Excess fees to Board of County Commissioners Excess fees to other governments Total other financing uses Net change in fund balances Fund balances at beginning of year Fund balances at end of year 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, 2010 Budgeted Amount Original Final Variance with Final Budget Positive Actual (Negative) $ 3,270,590 $ 3,270,847 $ 3,279,394 $ 8,547 - - 2,175 2,175 3,270,590 3,270,847 3,281,569 10,722 3,270,590 3,270,847 3,176,536 94,311 3,270,590 3,270,847 3,176,536 94,311 105,033 105,033 (94,981) (94,981) (10,052) (10,052) (105,033) (105,033) The accompanying notes are an integral part of the financial statements. 316 Indian River County, Florida Property Appraiser Notes To Financial Statements Year Ended September 30, 2010 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, 2010 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 $105,033 and are reported as transfers out. These transfers are also reflected as due to other governments on the balance sheet. G. Fund Balance GASB Statement 54 — Fund Balance Reporting and Governmental Funds Type Definitions was implemented as of October 1, 2009. This Statement requires the fund balance for governmental funds to be reported in classifications that comprise a hierarchy based primarily on the extent to which the government is bound to honor constraints on the specific purposes for which amounts in those funds can be spent. Categories for fund balance are as follows: nonspendable, restricted, committed, assigned, and unassigned. For more information, see the County Note on Fund Balance. NOTE 2 - CASH Deposits At September 30, 2010, the carrying amount of the Property Appraiser's deposits was $131,630 and the bank balance was $224,305. 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. Indian River County, Florida Property Appraiser Notes To Financial Statements Year Ended September 30, 2010 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 years ended September 30, 2008, 2009, and 2010, were equal to 10.33%, 10.42%, and 10.73% of the annual covered payroll. Contributions to the FRS for the fiscal years ended September 30, 2008, 2009, 2010 were $241,429, $220,468, and $224,920 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 2010 annual required contribution of $60,040 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 the County Notes. 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 2010 at an annual cost of approximately $312,380. 319 Indian River County, Florida Property Appraiser Notes To Financial Statements Year Ended September 30, 2010 NOTE 6 — LONG-TERM LIABILITIES A. Changes in Long -Term Liabilities A summary of changes in long-term liabilities is as follows: Beginning Balance 10/01/09 Additions Accrued Compensated Absences 89 359122 311 Deletions $127,249 Ending Balance 09/30/10 84 421 Of the $84,421 liability for accrued compensated absences, management estimates that $20,000 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. 320 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 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, 2010 and issued our report thereon dated March 11, 2011. 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 Property Appraiser'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 Property 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 As part of obtaining reasonable assurance about whether the Property Appraiser'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" Member AICPA Member AICPA Division For CPA Firms Member FICPA 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. Wd" , /!7x4-" Qz�b -'- 04-"�Ip Vero Bea , Florida March 11, 2011 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, 2010 and have issued our report thereon dated March 11, 2011. 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 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 11, 2011, 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 Property Appraiser, Indian River County, Florida, complied with Section 218.415, Florida Statutes. Section 10.554(1)(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 provisions of 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 Vision and Direction to our Clients" Member AICPA Member AICPA Division For CPA Firms Member FICPA Private Companies Practice Section 323 Harris, Cotherman, Jones, Price & Associates Certified Public Accountants - Chartered The Honorable David C. Nolte Property Appraiser Page two Section 10.554(1)(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 provisions of contracts or grant agreements, or fraud, illegal acts, or abuse and, (2) deficiencies in internal control 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 Property Appraiser, 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 Be�rida March 11, 2011 324 SHERIFF 325 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, 2010, 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, 2010, 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, 2010, 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 11, 2011 on our consideration of the Sheriff'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 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. Cel Yu.�C4� ' �aA��GL Vero B ach, Florida March 11, 2011 "Providing Vision and Direction to our Clients" 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, 2010 ASSETS Cash and cash equivalents Accounts receivable - net Due from other governments Prepaid expenses Total assets LIABILITIES AND FUND BALANCES Liabilities: Accounts payable Due to other governments Unearned revenue Total liabilities Fund Balances: Nonspendable: Prepaid items Restricted for: Law enforcement/public safety Unassigned Total fund balances Total liabilities and fund balances The accompanying notes are an integral part of the financial statements. 327 Total Special Governmental General Revenue Funds $ 1,397,450 $ 1,992,546 $ 3,389,996 59,400 894 60,294 117,086 117,086 2,091 - 2,091 $ 1,458,941 $ 2,110,526 $ 3,569,467 $ 1,456,134 $ 36,522 $ 1,492,656 2,807 950 3,757 - 2,763 2,763 1,458,941 40,235 1,499,176 2,091 - 2,091 - 2,070,291 2,070,291 (2,091) - (2,091) - 2,070,291 2,070,291 $ 1,458,941 $ 2,110,526 $ 3,569,467 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, 2010 REVENUES Intergovernmental Charges for services Judgments, fines and forfeits Interest Miscellaneous Total revenues EXPENDITURES Public safety Court related Total expenditures Excess of revenues over (under) expenditures OTHER FINANCING SOURCES (USES) Transfers from Board of County Commissioners Transfers to Board of County Commissioners Total other financing sources 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. 328 Total Special Governmental General Revenue Funds $ - $ 846,490 $ 846,490 - 322,361 322,361 - 193,319 193,319 - 6,184 6,184 37,651 - 37,651 37,651 1,368,354 1,406,005 38,796,441 1,743,723 40,540,164 1,691,772 6,494 1,698,266 40,488,213 1,750,217 42,238,430 (40,450,562) (381,863) (40,832,425) 40,452,769 177,771 40,630,540 (2,207) - (2,207) 40,450,562 177,771 40,628,333 - (204,092) (204,092) - 2,274,383 2,274,383 $ - $ 2,070,291 $ 2,070,291 The accompanying notes are an integral part of the financial statements. 328 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, 2010 REVENUES Miscellaneous Total revenues EXPENDITURES Public safety Court related Total expenditures Excess of revenues over (under) expenditures OTHER FINANCING SOURCES (USES) Transfers from Board of County Commissioners Transfers to Board of County Commissioners Total other financing sources Net change in fund balances Fund balances at beginning of year Fund balances at end of year Budgeted Amount Original Final Actual $ - $ 37,651 $ 37,651 $ 37,651 37,651 Variance with Final Budget Positive (Negative) 40,177,430 38,798,639 38,796,441 2,198 1,790,184 1,691,781 1,691,772 9 41,967,614 40,490,420 40,488,213 2,207 (41,967,614) (40,452,769) (40,450,562) 2,207 41,967,614 40,452,769 40,452,769 - - - (2,207) (2,207) 41,967,614 40,452,769 40,450,562 (2,207) The accompanying notes are an integral part of the fmancial statements. 329 Indian River County, Florida Sheriff Statement of Fiduciary Net Assets Agency Fund September 30, 2010 ASSETS Cash and cash equivalents $ Total assets $ LIABILITIES Escrow deposits $ Total liabilities $ The accompanying notes are an integral part of the financial statements. 330 116,741 116,741 116,741 116,741 Indian River County, Florida Sheriff Notes To Financial Statements Year Ended September 30, 2010 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 Sheriff'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 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 Indian River County, Florida Sheriff Notes To Financial Statements Year Ended September 30, 2010 NOTE 1- SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES - Continued C. Budgetary Requirements State statutes require the Sheriff to submit a proposed budget to the Board of County Commissioners by 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 The Sheriff accrues a liability for employees' rights to receive compensation for future absences when 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 $2,207 and are reported as a transfer to the Board of County Commissioners at year end. F. Fund Balance GASB Statement 54 — Fund Balance Reporting and Governmental Funds Type Definitions was implemented as of October 1, 2009. This Statement requires the fund balance for governmental funds to be reported in classifications that comprise a hierarchy based primarily on the extent to which the government is bound to honor constraints on the specific purposes for which amounts in those funds can be spent. Categories for fund balance are as follows: nonspendable, restricted, committed, assigned, and unassigned. For more information, see the County Note on Fund Balance. 332 Indian River County, Florida Sheriff Notes To Financial Statements Year Ended September 30, 2010 NOTE 2 - CASH Deposits At September 30, 2010, the carrying amount of the Sheriff's deposits was $3,506,737, and the bank balance was $4,748,320. 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. 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 10/01/09 Additions Deletions 09/30/10 Tangible Personal Property 16,469,157 $2,427,406 $978,275 17,918.288 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. 333 Indian River County, Florida Sheriff Notes To Financial Statements Year Ended September 30, 2010 NOTE 4 — PENSION PLAN - Continued Florida Retirement System - Continued 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 years ended September 30, 2008, 2009, and 2010 were equal to 17.60%, 17.27%, and 18.29% of the annual covered payroll. Contributions to the FRS for the fiscal years ended September 30, 2008, 2009, 2010 were $4,383,977, $4,221,209, and $4,294,161 respectively. These amounts are equal to 100% of the required contribution for each year. NOTE 5 — OTHER POSTEMPLOYMENT BENEFITS The Sheriff participated in the Indian River County Other Post Employment Benefits Trust (IRCOT). The Sheriff's 2010 annual required contribution of $1,101,833 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 County Notes. 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 2010 at an annual cost of approximately $3,549,668. 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, 2010: Beginning Ending Balance Balance 10/01/09 Additions Deletions 09/30/10 Accrued Compensated Absences5,267,344 $3,230,877 $3,385,354 $5,112,867 Of the $5,112,867 liability for accrued compensated absences, management estimates that $3,415,000 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, 2010 NOTE 8 — OPERATING LEASES The Sheriff has entered into noncancelable operating leases as lessee. Lease expenditures totaled $96,688 for the year ended September 30, 2010. 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, 2010: Year Amount 2011 $ 99,446 2012 49,769 2013 26,380 2014 320 Total Future Minimum Lease Payments &L75,915 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, 2010, and issued our report thereon dated March 11, 2011. 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 Sheriffs 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 Sheriff's 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, Cotherman, Jones, Price & Associates Certified Public Accountants - Chartered The Honorable Deryl 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. Nout�) I �(d A"a'W't Vero Beach, Florida March 11, 2011 337 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 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, 2010, and have issued our report thereon dated March 11, 2011. 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 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 11, 2011, 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(1)(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 provisions of 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 Vision and Direction to our Clients" Member AICPA Member AICPA Division For CPA Firms Member FICPA Private Companies Practice Section 338 Harris, Cotherman, Jones, Price & Associates Certified Public Accountants - Chartered The Honorable Deryl Loar Sheriff Page Two Section 10.554(1)(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 provisions of contracts or grant agreements, or fraud, illegal acts, or abuse and, (2) deficiencies in internal control 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 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. °r a"'te&� Vero Be ch, Florida March 11, 2011 339 �AR 340 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, 2010 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, 2010 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, 2010 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 11, 2011 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 and should not be usedbyanyone other than these specified parties. Vero Beach, Florida March 11, 2011 "Providing Vision and Direction to our 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, 2010 Fund Balances: Nonspendable: Prepaid items Restricted for: Voting/elections activities Unassigned Total fund balances Total liabilities and fund balances 6,330 - 6,330 - 5,356 5,356 (6,330) - (6,330) - 5,356 5,356 $ 74,298 $ 12,050 $ 86,348 The accompanying notes are an integral part of the financial statements. 343 Total Special Governmental General Revenue Funds ASSETS Cash and cash equivalents $ 63,854 $ 12,050 $ 75,904 Accounts receivable - net 4,114 - 4,114 Prepaid expenses 6,330 - 6,330 Total assets $ 74,298 $ 12,050 $ 86,348 LIABILITIES AND FUND BALANCES Liabilities: Accounts payable $ 24,624 $ - $ 24,624 Due to other governments 49,674 - 49,674 Unearned revenue - 6,694 6,694 Total liabilities 74,298 6,694 80,992 Fund Balances: Nonspendable: Prepaid items Restricted for: Voting/elections activities Unassigned Total fund balances Total liabilities and fund balances 6,330 - 6,330 - 5,356 5,356 (6,330) - (6,330) - 5,356 5,356 $ 74,298 $ 12,050 $ 86,348 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, 2010 REVENUES Intergovernmental Charges for services Interest Miscellaneous Total revenues EXPENDITURES General government Total expenditures Excess of revenues over (under) expenditures OTHER FINANCING SOURCES (USES) Transfers from Board of County Commissioners Transfer from other funds Transfers to Board of County Commissioners Transfer to other funds Total other financing sources (uses) 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. 344 Total Special Governmental General Revenue Funds $ - 8 66,280 $ 66,280 24,417 - 24,417 506 42 548 52,070 - 52,070 76,993 66,322 143,315 1,061,044 70,340 1,131,384 1,061,044 70,340 1,131,384 (984,051) (4,018) (988,069) 1,036,102 - 1,036,102 - 2,402 2,402 (49,649) - (49,649) (2,402) - (2,402) 984,051 2,402 986,453 - (1,616) (1,616) - 6,972 6,972 $ - $ 5,356 $ 5,356 The accompanying notes are an integral part of the financial statements. 344 Indian River County, Florida Supervisor of Elections Statement of Revenues, Expenditures, and Changes in Fund Balances - Budget and Actual General Fund For the Year Ended September 30, 2010 The accompanying notes are an integral part of the financial statements. 345 Variance with Final Budget Budgeted Amount Positive Original Final Actual (Negative) REVENUES Charges for services $ - $ - $ 24,417 $ 24,417 Interest - - 506 506 Miscellaneous - 52,070 52,070 - Total revenues - 52,070 76,993 24,923 EXPENDITURES General government 1,018,812 1,088,172 1,061,044 27,128 Total expenditures 1,018,812 1,088,172 1,061,044 27,128 Excess of revenues over (under) expenditures (1,018,812) (1,036,102) (984,051) 52,051 OTHER FINANCING SOURCES (USES) Transfers from Board of County Commissioners 1,018,812 1,036,102 1,036,102 - Transfers to Board of County Commissioners - - (49,649) (49,649) Transfers to other funds - - (2,402) (2,402) Total other financing sources (uses) 1,018,812 1,036,102 984,051 (52,051) 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 R 346 E-3 Indian River County, Florida Supervisor of Elections Notes To Financial Statements Year Ended September 30, 2010 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. C. Budgetary Requirements State statutes require the Supervisor of Elections 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. 347 Indian River County, Florida Supervisor of Elections Notes To Financial Statements Year Ended September 30, 2010 NOTE 1 - SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES - Continued 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 and other governments. These "excess fees" totaled $49,649 and are reported as transfers out. These transfers are also reflected as due to other governments on the balance sheet. H. Fund Balance GASB Statement 54 — Fund Balance Reporting and Governmental Funds Type Definitions was implemented as of October 1, 2009. This Statement requires the fund balance for governmental funds to be reported in classifications that comprise a hierarchy based primarily on the extent to which the government is bound to honor constraints on the specific purposes for which amounts in those funds can be spent. Categories for fund balance are as follows: nonspendable, restricted, committed, assigned, and unassigned. For more information, see the County Note on Fund Balance. 348 Indian River County, Florida Supervisor of Elections Notes To Financial Statements Year Ended September 30, 2010 NOTE 2 - CASH Deposits At September 30, 2010, the carrying amount of the Supervisor of Elections' deposits was $75,779, and the bank balance was $109,909. 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 years ended September 30, 2008, 2009, and 2010, were equal to 10.8%, 10.5%, and 11.4% of the annual covered payroll. Contributions to the FRS for the fiscal years ended September 30, 2008, 2009, 2010 were $58,121, $57,066 and $59,170 respectively. These amounts are equal to 100% of the required contribution for each year. M, Indian River County, Florida Supervisor of Elections Notes To Financial Statements Year Ended September 30, 2010 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 2010 annual required contribution of $12,760 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 County Notes. 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 2010 at an annual cost of approximately $58,549. 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, 2010: Beginning Balance 10/01/09 Accrued Compensated Absences 48 751 Additions 25 839 Ending Balance Deletions 09/30/10 $38,136 $36,454 Of the $36,454 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, 2010 NOTE 7 — OPERATING LEASES The Supervisor of Elections has entered into noncancelable operating leases as lessee for a mail machine, letter opener, and a ballot on demand machine. Lease expenditures totaled $21,114 for the year ended September 30, 2010. The following is a schedule by years of minimum future rentals to be paid by the Supervisor of Elections for the noncancelable operating leases as of September 30: Year Amount 2011 $ 24,745 2012 7,245 2013 5,433 Total Future Minimum Lease Payments $ 37.423 351 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 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, 2010 and issued our report thereon dated March 11, 2011. 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. 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. 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 2009-02 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 that is required to be reported under Government Auditing Standards and which was reported to management of the Supervisor of Elections in a separate letter dated March 11, 2011 in accordance with Section 10.554(1)(i)2, Rules of the Auditor General of the State of Florida.. "Provicling Vision and Direction to our Clients" Member AICPA Member AICPA Division For CPA Firms Member FICPA Private Companies Practice Section 352 Harris, Cotherman, Jones, Price & Associates Certified Public Accountants - Chartered The Honorable Kay Clem Supervisor of Elections Page two 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. ��r� ac�� JB�each, Florida March 11, 2011 353 SCHEDULE OF SUPERVISOR OF ELECTIONS' FINDINGS AND RESPONSES 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 in fiscal year ending September 30, 2009. In fiscal year ending September 30, 2010, the Supervisor adopted procedures that recorded all grant related monies as deferred revenues and recognized as revenue as the funds were expended. Some of the grant related monies were required matches of County funds which should not have been deferred. This resulted in the deferred revenue being overstated and revenue being understated in the Supervisor's financial system in fiscal year ending September 30, 2010. 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 misstating revenues in its financial reports to the Board of County Commissioners. Recommendation: We recommend the Supervisor staff its accounting function with individuals who have the requisite knowledge or experience to maintain the Supervisor's books i n 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 in the fiscal year ending September 30, 2009. In the fiscal year ending September 30, 2010, the Supervisor was paid a paycheck on September 30, 2010 that exceeded her statutorily allowed salary in error. In addition, an accrual of additional pay was recorded in error. Had these amounts been vouchered against the approved budget for the fiscal year, the error would have been noted and corrected prior to being discovered during the audit of the financial statements. The entries were subsequently corrected by reversing the accrual and the Supervisor refunding the excess pay. The nonoperation of this critical internal control was pervasive throughout the Supervisor's financial system. We consider this condition to be a material weakness. 354 SCHEDULE OF SUPERVISOR OF ELECTIONS' FINDINGS AND RESPONSES -Continued FINDING 2009-03 - Continued 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 11, 2011 Mr. Robert Harris Harris, Cotherman, Jones, Price & Associates 5070 North Highway AIA, Suite 250 Vero Beach, FL 32963 Dear Mr. Harris: I have reviewed the deficiencies from the prior Supervisor of Elections and have met with our accounting coordinator and the auditor from Harris, Cotherman, Jones, and Price to implement procedures to rectify the management findings. Please find below our response to the management findings for the fiscal year ending September 30, 2010. Finding 2009-02 The Supervisor of Elections has been receiving Federal grant monies for several years. We have been recording grant monies received each year as deferred grant revenue. Since the previous year's finding our new accounting coordinator has put procedures in place to properly record deferred grant revenue received and expended. Although the County matching funds miscoded, all expenditures out of the grant revenue accounts were for proper and correct expenses. The Supervisor of Election's accountant has reviewed our financial statements with the auditors from Harris, Cotherman, Jones, Price and Associates to insure that the County match grant accounts have been properly recorded. Our accountant has implemented the proper County match revenue recognition; therefore, future transfers of grant County matching funds will be properly recorded on our financial statements thus preventing further misstatements of revenue. 4375 43rd Avenue, Unit 101 • Vero Beach, Florida 32967 • (772) 226-3440 • Fax (772) 770-5367 www.voteindianriver.com 356 Page Two (2) Mr. Harris March 11, 2011 Finding 2009-03 Mrs. Clem first took office fourteen years ago. Our retention records only go back ten years. We were not able to confirm but believe that over the period she was in office, Mrs. Clems pay was forced into the same pay period schedule as regular salaried employees. Constitutional salaries are not to be accrued, thus Mrs. Clem's pay period moved forward thru the years, so that although she never received more than one pay check in a two week pay period, the period covered by that paycheck moved forward until, by October 1, 2009, paychecks to the Mrs. Clem represented salaries paid in advance, not arrears. As Supervisor of Elections, I have implemented a new procedure to monitor the fiscal budget. The Supervisor of Elections and the accountant will review budget versus actual expenditure reports on a monthly basis. The Supervisor of Elections will sign off on each monthly review report to ensure quality control. The Supervisor of Elections will continue to monitor expenditures as they relate to the approved budget to make certain that revenues and expenditures are properly recorded. We would like to thank your staff for their professional assistance during this audit Sincerely, Leslie R. Swan Supervisor of Elections Indian River County 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, 2010 and have issued our report thereon dated March 11, 2011. 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 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 11, 2011, 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. The status of significant findings and recommendations and corrective actions taken to address those findings are discussed in the Schedule of Findings and Responses attached to the Report on Internal Control over Financial Reporting. 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, did not comply with Section 218.415, Florida Statutes in that accounts used to hold public funds during the year ending September 30, 2010 were not designated as qualified public depositories. Upon discovery of this fact, the Supervisor rectified the matter by having the accounts designated as governmental accounts and included in the bank's list of qualified public depositories. Section 10.554(1)(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 provisions of 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 Vision and Direction to our Clients" 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)(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 provisions of contracts or grant agreements, or fraud, illegal acts, or abuse and, (2) deficiencies in internal control 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. Wim, ca& 9,A�a Qa, em*-�v ni "" ��► - c'A&Wcu Vero Beach, Florida March 11, 2011 359 R 360 E-3 TAX COLLECTOR 361 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, 2010 as listed in the table of contents. These financial statements are the responsibility of the Tax Collector'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 Tax Collector at September 30, 2010 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, 2010 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 11, 2011 on our consideration of the Tax Collector'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 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. �eat�� Vero Beach, Florida March 11, 2011 "Providing Vision and Direction to our Clients" Member AICPA Member AICPA Division For CPA Firms Member FICPA Private Companies Practice Section 362 Indian River County, Florida Tax Collector Balance Sheet General Fund September 30, 2010 ASSETS Cash and cash equivalents $ 2,579,238 Investments 868,909 Accounts receivable 45,099 Inventories 230 Prepaid expenses 36 Total assets $ 3,493,512 LIABILITIES AND FUND BALANCES Liabilities: Accounts payable $ 278,864 Due to other governments 3,188,553 Deferred revenues 25,132 Other deposits held in escrow 963 Total liabilities 3,493,512 Fund Balances: Nonspendable: Inventories 230 Prepaid items 36 Unassigned (266) Total fund balances - Total liabilities and fund balances $ 3,493,512 The accompanying notes are an integral part of the financial statements. 363 REVENUES Charges for services Interest Total revenues EXPENDITURES 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, 2010 Budgeted Amount Original Final $ 5,991,676 $ 5,991,676 25,000 25,000 $ 6,329,723 9,483 6,339,206 Variance with Final Budget Positive (Negative) $ 338,047 (15,517) 322,530 General government 3,175,666 3,245,364 3,150,653 94,711 Total expenditures 3,175,666 3,245,364 3,150,653 94,711 Excess of revenues over (under) expenditures 2,841,010 2,771,312 3,188,553 417,241 OTHER FINANCING SOURCES (USES) Excess fees to Board of County Commissioners (2,495,259) (2,434,043) Excess fees to Other Governments (345,751) (337,269) Total other financing sources (uses) (2,841,010) (2,771,312) Net change in fund balances $ - $ Fund balances at beginning of year Fund balances at end of year (2,771,460) (417,093) (3,188,553) The accompanying notes are an integral part of the financial statements. 364 (337,417) (79,824) (417,241) Indian River County, Florida Tax Collector Statement of Fiduciary Net Assets Agency Fund September 30, 2010 ASSETS Cash and cash equivalents $ Investments Total assets $ LIABILITIES Due to other governments $ Total liabilities $ 4,575,039 91,189 4,666,228 4,666,228 4,666,228 The accompanying notes are an integral part of the financial statements. 365 R 366 E-3 Indian River County, Florida Tax Collector Notes To Financial Statements Year Ended September 30, 2010 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, 2010 NOTE 1 - SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES - Continued C. Budgetary Requirements State statutes require the Tax Collector to prepare an annual budget that clearly reflects the revenues available to her 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 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 future periods. The Tax Collector'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 Tax Collector 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. 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 she legally required to, accumulate expendable available financial resources to liquidate this obligation. Accordingly, the liability for compensated absences is not reported on the Tax Collector's financial statements. Additional information 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 reported as transfers out and a liability and were $3,188,553 at year-end. 368 Indian River County, Florida Tax Collector Notes To Financial Statements Year Ended September 30, 2010 NOTE 1 - SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES - Continued I. Fund Balance GASB Statement 54 — Fund Balance Reporting and Governmental Funds Type Definitions was implemented as of October 1, 2009. This Statement requires the fund balance for governmental funds to be reported in classifications that comprise a hierarchy based primarily on the extent to which the government is bound to honor constraints on the specific purposes for which amounts in those funds can be spent. Categories for fund balance are as follows: nonspendable, restricted, committed, assigned, and unassigned. For more information, see the County Note on Fund Balance. NOTE 2 - CASH AND INVESTMENTS A. Deposits At September 30, 2010, the carrying amount of the Tax Collector's deposits was $7,143,714 and the bank balance was $7,171,248. 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. B. Investments The Tax Collector modified their investment and deposit policy in November of 2009. This policy requires the Tax Collector's office to follow the above state law (governing custodial credit risk) for deposits and Section 218.415, Florida Statutes. Refer to the County -wide Note 4, Cash and Cash Equivalents, for definition of custodial credit risk. At September 30, 2010, the Tax Collector had the following investments: 369 Weighted Average Portfolio Credit Investment Type Fair Value Maturity In Years Percentage Risks Other Fixed Rate Investments: Florida PRIME (formerly Fund A) $ 115,800 .08 12.06% AAAm Fund B Surplus Funds Trust Fund 91,189 7.49 9.50 Not Rated Other Market Rate Investments: Certificate of Deposit — Six Month 250,000 .50 26.04 N/A Certificate of Deposit — One Year 250,000 1.00 26.04 N/A Florida Trust Day to Day Fund 250,045 .08 26.04 AAAm Fidelity American U.S. Treasury Fund 3,064 .08 0.32 AAA Total Fair Value $ 960,098 100.00% Portfolio weighted average maturity 1.32 369 Indian River County, Florida Tax Collector Notes To Financial Statements Year Ended September 30, 2010 NOTE 2 - CASH AND INVESTMENTS - Continued B. Investments - Continued 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, 2010, $3,064 of unspent capital lease proceeds remained in the escrow account. Concentration Risk The Tax Collector's investment policy limits portfolio composition to the following maximum guidelines: Local Government Surplus Funds Trust Fund 95% Florida Trust Day to Day Fund 95% Direct Obligations of the U.S. Government 25% Money Market, CD's, and Savings Accounts 25% Securities & Exchange Commission Money Funds 25% Bank Super NOW Accounts 95% Bank Repo Agreements 50% United States Government Agencies 25% 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 ("SBA"), 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, 2010, the LGIP held a rating of AAAm by Standard and Poor's and had a weighted average days to maturity of 52 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. 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, 2010. 370 Indian River County, Florida Tax Collector Notes To Financial Statements Year Ended September 30, 2010 NOTE 2 - CASH AND INVESTMENTS - Continued B. Investments — Continued Concentration Risk - Continued 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, 2010, the State Board of Administration (SBA) determined a negative fair market value adjustment of 29.29% of the portfolio balance, or ($37,781), was needed to represent the fair market value of the participation. Consequently, the net investment in Fund B is reported at $91,189. Interest Rate Risk The Tax Collector will attempt to match investment maturities with known cash needs and anticipated cash flow requirements. Investments of current operating funds shall have maturities of no longer than twelve months. Credit Risk 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. Custodial Credit Risk All investments are held in the name of the Tax Collector, by the Tax Collector, with the exception of the Florida Trust Day to Day Fund, which was held by UMB Bank, and the LGIP which was held by the State of Florida. 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. 371 Indian River County, Florida Tax Collector Notes To Financial Statements Year Ended September 30, 2010 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 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, 2008, 2009, and 2010, were equal to 10.53%, 10.69%, and 11.44% of the annual covered payroll. Contributions to the FRS for the fiscal years ended September 30, 2008, 2009, 2010 were $180,527, $173,154, $179,908 respectively. These amounts are equal to 100% of the required 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 paid their 2010 annual required contribution of $60,040 which was their part of the total contribution determined by the IRCOT actuary. Further information on the IRCOT can be found in the County -wide financial statements and County Notes. 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 Tax Collector participated in the County's self-insurance program during fiscal year 2010 at an annual cost of approximately $257,452. Further details of this self-insurance program are discussed in the risk management note in the County- wide financial statements. 372 Indian River County, Florida Tax Collector Notes To Financial Statements Year Ended September 30, 2010 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, 2010: Beginning Balance 10/01/09 Accrued Compensated Absences 152 522 Additions Deletions $52,584 Ending Balance 09/30/10 $149,726 Of the $149,726 liability for accrued compensated absences, management estimates that $18,042 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 $151,354 for the fiscal year ended September 30, 2010. 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, 2010: Year Amount 2011 $ 88,033 2012 90,596 2013 92,936 2014 59,516 2015 47,733 Total future minimum lease payments378 814 373 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 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, 2010 and issued our report thereon dated March 11, 2011. 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 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 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 Tax Collector'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" Member AICPA Member AICPA Division For CPA Firms Member FICPA Private Companies Practice Section 374 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. ��alz2ca� �'o �trt�riman�, ` Y�.u► .� °� Vero Beach, Florida March 11, 2011 375 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 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, 2010 and have issued our report thereon dated March 11, 2011. 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 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 11, 2011, 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)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 Tax Collector, Indian River County, Florida, complied with Section 218.415, Florida Statutes. Section 10.554(1)(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 provisions of 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 Vision and Direction to our Clients" Member AICPA Member AICPA Division For CPA Firms Member FICPA Private Companies Practice Section 376 Harris, Cotherman, Jones, Price & Associates Certified Public Accountants - Chartered The Honorable Carole Jean Jordan Tax Collector Page two Section 10.554(1)(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 provisions of contracts or grant agreements, or fraud, illegal acts, or abuse and, (2) deficiencies in internal control 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. qcGt�) 6eo�"- L'ti a t&udi Vero Beach, Florida March 11, 2011 377 R 378 E-3