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Home My WebLink About2013-054 INDIAN RIVER COUNTY, FLORIDA;°'-' - COMPREHENSIVE ANNUAL FINANCIAL REPORT FOR THE FISCAL YEAR OCTOBER 1, 2011 I THROUGH SEPTEMBER 30, 2012 Jeffrey R. Smith, CPA, CGFO Clerk of the Circuit Court and Comptroller Prepared By: Clerk of the Circuit Court Finance Department Diane Bernardo, CPA Finance Director I i Indian River County,Florida COMPREHENSIVE ANNUAL FINANCIAL REPORT Fiscal Year Ended September 30, 2012 1 Board of County Commissioners as of September 30,2012 Gary C. Wheeler Wesley S. Davis Chairman Joseph E. Flescher Peter D. O'Bryan Bob Solari Vice-Chairman Current Board of County Commissioners (as of November 20,2012) Joseph E. Flescher Peter D. O'Bryan Chairman Bob Solari Wesley S. Davis Tim Zorc Vice-Chairman Constitutional Officers as of September 30,2012 Jeffrey R. Smith David C.Nolte Clerk of the Circuit Court and Comptroller Property Appraiser Leslie R. Swan Deryl Loar Carole Jean Jordan Supervisor of Elections Sheriff Tax Collector I 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 Vincent Burke Director of Utilities Indian River County, Florida COMPREHENSIVE ANNUAL FINANCIAL REPORT TABLE OF CONTENTS Fiscal Year Ended September 30, 2012 INTRODUCTORY SECTION Page Number LETTER OF TRANSMITTAL........................................................................................................ i ORGANIZATION CHART............................................................................................................ vii CERTIFICATE OF ACHIEVEMENT FOR EXCELLENCE IN FINANCIAL REPORTING................................................................................................ viii FINANCIAL SECTION INDEPENDENT AUDITORS' REPORT..........................................................................................1 MANAGEMENT'S DISCUSSION AND ANALYSIS.....................................................................3 BASIC FINANCIAL STATEMENTS: Government -wide Financial Statements: Statement of Net Position.....................................................................................................17 Statement of Activities..........................................................................................................18 Fund Financial Statements: Balance Sheet - Governmental Funds...................................................................................20 Reconciliation of Total Governmental Fund Balances to Net Position 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 Position - Proprietary Funds.....................................................................33 Indian River County,Florida COMPREHENSIVE ANNUAL FINANCIAL REPORT L TABLE OF CONTENTS - CONTINUED Fiscal Year Ended September 30, 2012 l Page Number Statement of Revenues, Expenses, and Changes in Fund Net Position- Proprietary Funds ...........................................................................34 Statement of Cash Flows - Proprietary Funds ......................................................................36 Statement of Fiduciary Net Position- Fiduciary Funds........................................................40 Statement of Changes in Fiduciary Net Position- +` Other Postemployment Benefits Trust Fund...................................................................41 Notes to the Financial Statements...............................................................................................43 REQUIRED SUPPLEMENTARY INFORMATION: Schedule of Funding Progress - Other Postemployment Benefits Plan................................99 Schedule of Employer Contributions - Other Postemployment Benefits Plan.....................99 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 Position- Internal Service Funds.........................................154 Combining Statement of Revenues, Expenses, and Changes in Fund Net Position- Internal Service Funds...............................................155 Combining Statement of Cash Flows - Internal Service Funds..........................................156 Combining Statement of Changes in Assets and Liabilities -Agency Fund......................160 I i Indian River County, Florida ( COMPREHENSIVE ANNUAL FINANCIAL REPORT TABLE OF CONTENTS- CONTINUED Fiscal Year Ended September 30, 2012 STATISTICAL SECTION Page Number SCHEDULE 1 Net Position by Component-Last Ten Fiscal Years........................................162 SCHEDULE 2 Changes in Net Position- Last Ten Fiscal Years .............................................164 SCHEDULE 3 Fund Balances, Governmental Funds - Last Ten Fiscal Years.........................168 SCHEDULE 4 Changes in Fund Balances, Governmental Funds - I Last Ten Fiscal Years..................................................................................170 SCHEDULE 5 Tax Revenues by Source, Governmental Funds - Last Ten Fiscal Years..................................................................................172 SCHEDULE 6 Assessed Value and Actual Values of Taxable Property - Last Ten Fiscal Years..................................................................................173 I SCHEDULE 7 Property Tax Rates - Direct and Overlapping Tax Rates - Last Ten Fiscal Years..................................................................................174 i SCHEDULE 8 Principal Property Taxpayers - Year 2012 and Year 2003...............................176 SCHEDULE 9 Property Tax Levies and Collections - Last Ten Fiscal Years..........................177 SCHEDULE 10 Ratios of Outstanding Debt by Type - Last Ten Fiscal Years..........................178 SCHEDULE 11 Ratio of Net General Bonded Debt Outstanding to Taxable Value and Net Bonded Debt Per Capita- Last Ten Fiscal Years..........................180 SCHEDULE 12 Computation of Legal Debt Margin..................................................................181 SCHEDULE 13 Direct and Overlapping Governmental Activities Debt....................................182 SCHEDULE 14 Pledged Revenue Coverage - Water and Sewer Revenue Bonds - Last Ten Fiscal Years..................................................................................184 Indian River County,Florida COMPREHENSIVE ANNUAL FINANCIAL REPORT TABLE OF CONTENTS- CONTINUED Fiscal Year Ended September 30, 2012 I Page Number SCHEDULE 15 Pledged Revenue Coverage -Recreational Revenue Refunding Bonds - Series 2003 -Last Ten Fiscal Years ...........................................................186 SCHEDULE 16 Demographic and Economic Statistics - Last Ten Years..................................187 SCHEDULE 17 Principal Employers - Year 2012 and Nine Years Ago....................................188 SCHEDULE 18 Building Permits- Last Ten Fiscal Years........................................................190 SCHEDULE 19 Operating Indicators by Function/Program- Last Ten Fiscal Years................192 SCHEDULE 20 Full Time Equivalent County Government Employees by Function/Program- Last Ten Fiscal Years............................................196 SCHEDULE 21 Capital Asset Statistics by Function/Program- Last Ten Fiscal Years............198 SCHEDULE 22 Department of Utility Services - Historical Rate Structure - Last Ten Fiscal Years..................................................................................202 l SCHEDULE 23 Water and Wastewater Customers - Last Ten Fiscal Years..............................203 SCHEDULE 24 Top 10 High Volume Customers of Utility Services........................................204 SCHEDULE 25 Capacity Charges - Utilities Department- Last Ten Fiscal Years....................205 SCHEDULE 26 Pledged Revenues for Recreational Revenue Refunding Bonds, Series 2003 - Last Ten Fiscal Years..................................................................................206 SCHEDULE 27 Pledged Revenues for Spring Training Facility Revenue Bonds, Series 2001 - Last Ten Fiscal Years..................................................................................207 l Indian River County,Florida COMPREHENSIVE ANNUAL FINANCIAL REPORT TABLE OF CONTENTS- CONTINUED Fiscal Year Ended September 30, 2012 COMPLIANCE SECTION Page Number Independent Auditors' Report on Internal Control over Financial Reporting And on Compliance and Other Matters Based on an Audit of Financial Statements Performed In Accordance with Government Auditing Standards....................209 County Management Letter......................................................................................................211 Federal and State Grants: Independent Auditors' 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 Chapter 10.550,Rules of the Auditor General ...................213 Independent Auditors' Report on the Schedule of Federal Awards and State Projects......215 Schedule of Expenditures of Federal Awards and State Projects.......................................217 Notes to Schedule of Expenditures of Federal Awards and State Projects.........................222 Schedule of Findings and Questioned Costs.......................................................................223 lImpact Fee Affidavit.................................................................................................................225 l Indian River County,Florida COMPREHENSIVE ANNUAL FINANCIAL REPORT TABLE OF CONTENTS- CONTINUED Fiscal Year Ended September 30, 2012 I AUDITOR GENERAL REPORTS SECTION Page Number BOARD OF COUNTY COMMISSIONERS IndependentAuditors' Report...................................................................................................229 FundFinancial Statements........................................................................................................230 Independent Auditors' Report on Internal Control over Financial Reporting And on Compliance and Other Matters Based on an Audit of Financial Statements Performed In Accordance with Government Auditing Standards....................291 ManagementLetter...................................................................................................................293 CLERK OF THE CIRCUIT COURT AND COMPTROLLER Independent Auditors' Report...................................................................................................296 Fund Financial Statements........................................................................................................297 Independent Auditors' Report on Internal Control over Financial Reporting And on Compliance and Other Matters Based on an Audit of Financial Statements Performed In Accordance with GovernmentAuditing Standards....................307 ManagementLetter...................................................................................................................309 ` PROPERTY APPRAISER IndependentAuditors' Report...................................................................................................312 Fund Financial Statements........................................................................................................313 Independent Auditors' Report on Internal Control over Financial Reporting And on Compliance and Other Matters Based on an Audit of Financial Statements Performed In Accordance with Government Auditing Standards....................319 ManagementLetter...................................................................................................................321 Indian River County,Florida COMPREHENSIVE ANNUAL FINANCIAL REPORT TABLE OF CONTENTS-CONTINUED Fiscal Year Ended September 30, 2012 I Page Number SHERIFF Independent Auditors' Report...................................................................................................324 Fund Financial Statements........................................................................................................325 Independent Auditors' Report on Internal Control over Financial Reporting And on Compliance and Other Matters Based on an Audit of Financial Statements Performed In Accordance with GovernmentAuditing Standards....................335 ManagementLetter...................................................................................................................337 SUPERVISOR OF ELECTIONS Independent Auditors' Report...................................................................................................340 Fund Financial Statements........................................................................................................341 Independent Auditors' Report on Internal Control over Financial Reporting And on Compliance and Other Matters Based on an Audit of Financial 1Statements Performed In Accordance with Government Auditing Standards....................350 ManagementLetter...................................................................................................................352 I TAX COLLECTOR Independent Auditors' Report...................................................................................................356 Fund Financial Statements..................:.....................................................................................357 Independent Auditors' Report on Internal Control over Financial Reporting And on Compliance and Other Matters Based on an Audit of Financial Statements Performed In Accordance with Government Auditing Standardsds................368 ManagementLetter...................................................................................................................370 1 I �� c II �LORI04' I JEFFREY R. SMITH Clerk of Circuit Court and Comptroller 1801 27th Street Vero Beach, Florida 32960-3388 * '� Telephone (772) 226-1945pRIpA 1 March 15, 2013 To the Citizens of Indian River County: The Comprehensive Annual Financial Report of Indian River County, Florida for the fiscal year ended September 30, 2012, 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 and Comptroller. 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. The County has established a comprehensive internal control framework designed to ensure that the i assets of the County are protected from loss, theft or misuse and to certify that the financial records and data used for preparing the financial statements are in conformity with accepted accounting principles (GAAP) as applicable to governmental entities. The internal control system is designed to provide reasonable, rather than absolute, assurance that these objectives are met. The idea of reasonable assurance recognizes two aspects: 1) the cost of internal control should not exceed the anticipated benefits; and 2) the valuation of the costs and benefits require estimates and judgment by management. All internal control evaluations take place within this framework. We believe the County's internal controls adequately safeguard its assets and provide reasonable assurance of properly recorded financial transactions. Section 11.45, Florida Statutes, requires an annual audit of all County g un agencies. The unqualified q opinion of the auditors, Rehmann Robson, Certified Public Accountants, of the County's financial statements for the year ended September 30, 2012 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 Federal Single Audit Act Amendments of 1996, and revised OMB Circular A-133. Readers of this report are encouraged to read Management's Discussion and Analysis (MD&A), which provides basic financial information about the County and an overview of the County's activities. The MD&A immediately follows the independent auditors' report. i f Profile oflndian River County 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. Indian River County is a non-charter county established under the Constitution and the Laws of the State of Florida. It is governed by a five member Board of County Commissioners (Board) elected at large from the five districts within the County. A County Administrator is appointed by the Board and is responsible for implementing the policies set forth by the Board. The Administrator is charged with the fiscal control of the resources of the County as well. In addition to the Board, there are five elected Constitutional Officers serving specific governmental functions: Clerk of the Circuit Court and Comptroller, Property Appraiser, Sheriff, Supervisor of Elections and Tax Collector. Although the funding for all Constitutional Offices is part of the County's General Fund, the Board does not have direct responsibility for their operations. Each office is run separately within each of its respective legal guidelines. f Indian River County provides a full range of services including, but not limited to: construction and maintenance of roadways, sidewalks and other infrastructure, fire rescue/emergency services, law enforcement, library services, traffic operations and control, parks and recreational services, human services, building inspections, licenses and permits, water/sewer utility services, and refuse collection 4 and disposal. The Clerk of the Circuit Court and Comptroller (Clerk), Sheriff, and Supervisor of Elections submit proposed operating budgets to the Board prior to May 1. The Florida Department of Revenue receives budgets from the Property Appraiser prior to June 1 and from the Tax Collector prior to August 1. Once these budgets are approved, they are forwarded to the Board. The court-related function of the Clerk 4 submits a budget to the Florida Clerks of Court Operations Corporation (CCOC) prior to October 1. These operating budgets include proposed expenditures and the sources to finance them as set forth in Chapters 129 and 28.36 of the Florida Statutes. Constitutional Officers, all departments controlled by the Board of County Commissioners, 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 the budgets of the County departments, state agencies and nonprofit organizations, and makes his budget recommendations to the Board of County Commissioners on or before July 15 of each year. During September, public hearings are held pursuant to Section 200.065, 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 (at the fund level) the budgets for all governmental fund types. The budgets legally adopted by the Board set forth the anticipated revenues by source and the appropriations by function. Budgets for Enterprise and Internal Service funds are adopted on a basis consistent with generally accepted accounting principles. Management is authorized to transfer budgeted amounts between objects and departments in any fund as long as the total appropriations of a fund are not exceeded. Board approval to amend the budget is required when unanticipated revenues are received that management wishes to have appropriated, thereby increasing the total appropriations of a fund. Appropriations for the County lapse at the close of the fiscal year. ii I � This Comprehensive Annual Financial Report (CAFR) includes the funds of the primary government (the Board of County Commissioners, the Clerk of the Circuit Court and Comptroller, 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. f These component units were included because generally accepted accounting principles require that organizations which are fiscally dependent on the County and that financially benefit from the relationship with the County 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 According to the 2010 Census, Indian River County had a population of 138,028, which is a 53% increase over the 1990 population of 90,208. While the population of the County has been steadily increasing, so has the median age of residents living here. Nationally, average ages have risen due to the increasing age of the baby boomer generation as well as the increase in life expectancy for all Americans. In addition, Florida continues to be a popular destination for retirees. Based on the Bureau of Economic Research, University of Florida, persons ages 15-44 make up the largest percentage of ( residents in the County, followed by ages 45-64 and 65+ respectively with persons ages 14 and under comprising the smallest portion of the population. Indian River County's economy is made up of agriculture (citrus and cattle), tourism, light manufacturing, wholesale and retail trade. Piper Aircraft, Inc., whose headquarters for aircraft research, development and manufacturing operations are located in Vero Beach, is the largest manufacturing ( employer in the area. CVS Pharmacy operates a distribution center which provides the distribution of products to all CVS locations in the southern half of Florida. In 2012, INEOS New Planet BioEnergy opened a state of the art center in Indian River County. The facility converts low-cost organic materials such as household and vegetative waste into bioethanol for use as a renewable road transport fuel (ethanol) while generating renewable power for export to the local electricity grid. This new technology will reduce greenhouse gas emissions from cars and energy generation in addition to reducing the amount of waste going into our landfills. The Atlantic beaches and the Indian River, along with the comfortable climate provide the basis for a year-round tourism industry. Residents can enjoy these resources at any of the forty-one County parks, the Sebastian Inlet State Park or the Pelican Island Wildlife Refuge. I The effects of the decline in the national economy continued to affect Indian River County in 2012. Property tax values decreased from $14.1 billion in 2011 to $13.2 billion in 2012. Construction activity had a slight increase over 2011, which is the third consecutive year of positive growth since the peak activity in 2005. Please see Statistical Schedule 19 for more information. The unemployment rate decreased from 13.7% in 2011 to 11.3 % in 2012. Although Indian River County is a major producer of citrus with approximately 32,820 acres dedicated to citrus production, over the last ten years production has decreased dramatically from 19.1 million boxes in 2002 to 9.4 million in 2012. iii Long Term Financial Planning and Manor Initiatives Chapter 163 Florida Statutes and Florida Administrative Code Rule 9J-5 requires each local government to have a Comprehensive Land Use Plan. An important part of this plan is the Capital Improvements Program (CIP) which evaluates the need for public facilities in support of the Future Land Use Element, to estimate the costs of improvements for which local government has fiscal responsibility, to analyze the fiscal capacity of the local government to finance and construct improvements, and to adopt financial policies to guide the funding and construction of the improvements. The CIP is updated annually and encompasses a period of five years. Listed below are five major capital projects included in the current CIP along with the source of funding and capital costs: ➢ Fire/EMS Station 13—Construction of an additional station is planned to serve the expanding south county population. The Emergency Services District reserves will provide $426,000 with the remaining $1.7 million being funded by impact fees. The operating expense will be approximately $2.1 million beginning in fiscal year 2014. ➢ 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 intergenerational facility will be constructed at a cost of$5.5 million with impact fees and one cent sales tax providing the funding. Ad valorem tax proceeds and user fees as well as partnering agency contributions will fund increased operating costs which are estimated to be about $118,000 per year. ➢ 6e Avenue Widening — This roadway is scheduled for widening from State Road 60 in Vero Beach to 49t Street. Currently, this is one of the few main arterials connecting the north and south county areas and traffic has increased substantially on this road. Estimated construction costs are over $19.8 million. Funding will be from traffic impact fees, gas taxes and grants. In the future, the County plans to expand 66th Avenue from 49th Street to the Sebastian City limits. l ➢ Oslo Road from 43rd Avenue to 58t"Avenue — This phase of Oslo Road widening will increase the road from two to four lanes at a cost of approximately $5.5 million. Funding will be from traffic impact fees and gas taxes. ➢ Crime Scene Unit Buildin —This is a renovation and expansion of an existing structure next to the Sheriff's Office for additional evidence storage. Funding in the amount of$2.4 million will be provided by both optional sales tax and impact fees. Effective October 2008, the Board of County Commissioners decided that Indian River County shall become a"green" county under the auspices of the Florida Green Building Coalition, Inc. with a goal of becoming a sustainable community and county. Since there is an important public interest in promoting the construction of energy-efficient and sustainable buildings, it is the County's policy to promote these standards and demonstrate commitment to energy conservation, saving taxpayer money and raising public awareness of environmental concerns. Indian River County has been certified as a"Gold" Status Florida Green County since 2009. The Indian River County Transit Facility, whose construction was completed in 2012, has been certified as the County's first "green" building. The facility was designed and constructed In compliance with the Florida Green Building Coalition Standards for commercial buildings. Some operational standards include controls that enhance indoor air quality and insure proper ventilation for employees, design specifications for energy reduction of 25% below normal, recycling of at least 75% of the construction waste, drought tolerant landscape materials, and furnishings made with 25%recycled content. iv f Relevant Financial Policies In accordance with Section 218.415, Florida Statutes, the County adopted an investment policy, which fguides 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 fiscal year 2012, County investments had yields ranging from 0.025% to 2.500%. The overall annual yield of the portfolio as of September 30, 2012 was 0.49%. The County continues to earn high financial strength bond ratings awarded by two major rating agencies due to these strong, conservative policies. 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 April 6, 2010. 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 change in net position for the OPEB Trust for the fiscal year was $2.4 million. In addition, interest, dividend and mark-to-market adjustments resulted in net investment income of $929,639. Yields ranged from 0.00% to 31.82% throughout the year. The County's goal is to maintain an overall fund balance equal to 30% of the annual budget in all of its taxing funds, which provides a three month cushion for operating expenses. The three month reserve is necessary due to the timing of property tax levies in the State of Florida. Although the fiscal year begins f in October, property tax monies are not typically received until mid to late December, which would require the County to operate in a deficit position for the first two months of the fiscal year without this reserve. Reserve funds are needed in order to allow the County to respond to events without facing serious financial burdens. County policy is to maintain fund balance levels and prohibit the use of fund balance to fund recurring expenses. On September 21, 2010 the Board adopted a revised fund balance and reserve policy due to the implementation of GASB Statement No. 54, Fund Balance Reporting and Governmental Fund Type Definitions, which changed the categories and terminology used to describe fund balance. The new categories change the focus from "financial resources available for appropriation" to "the extent to which the government is bound to honor constraints on the specific purposes for which the amounts in the fund can be spent". Please see County Note 19 for more information regarding fund balance. In summary, Indian River County completed the year financially strong and well positioned. In a time of a strained world-wide economy and low investment returns, the County stood committed to manage ! funds and services for its citizens. 1 v f Awards and Acknowledzements 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, 2011. This was the 29th 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 1 requirements and we are submitting it to the GFOA to determine its eligibility for another certificate. In addition, Indian River County also received the GFOA's Distinguished Budget Presentation Award for its annual budget document for the 2011-2012 fiscal year. This was the 21St 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. 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. Finally, thanks to the citizens for the trust you continue to place in your County and those who work to serve you. i i Respectfully submitted, Jeffrey R. Smith, CPA, CGFO Clerk of the Circuit Court and Comptroller 1 l f vi i ' Indian River County BCC Departmental Organization Residents of Indian River County Clerk of Circuit Supervisor of Board of Property Tax Court Sheriff Elections County Appraiser Collector Commissioners LFinance Department County Administrator County Attorney Assistant to Assistant Administrator I County Administrator/ General Services Geographic Info Commission Office Systems Public Utilities Emergency Community Office of Golf Course Services Services Development Works p Management& Budget Human Parks and Engineering Resources Recreation Roads& Wastewater Emergency Planning Risk Veterans Bridges Treatment Management Division Management Services _ TrafficWater Fire/Rescue Environmental Computer Shooting Production Planning& Services Range Code Enforcement Fleet General& Radiological Management Emergency Purchasing enc Libraries Engineering g y IRCLHAP/ Preparedness SHIP Program Secondary Biosolids Road Operations Emergency _ Mailroom Construction Metropolitan Switchboard Base Grant Planning ��N j Lmroimer Organization Stormwater Animal Human Control Services Building Wastewater Division Beach Collection 911 Preservation Youth Coordinator Soil&Water - Conservation Guidance Water Facilities Distribution Management Rental '--- Assistance Solid Waste — Telecommunication Disposal District Ag Extension Vll i i Certificate of j Achievement for Excellence in Financial Reporting Presented to Indian River County Florida For its Comprehensive Annual f Financial Report for the Fiscal Year Ended f� September 30,2011 A Certificate of Achievement for Excellence in Financial Reporting is presented by the Government Finance Officers i Association of the United States and Canada to government units and public employee retirement systems whose comprehensive annual financial reports(CAFRs)achieve the highest y standards in government accounting and financial reporting. A A" ' 9 I ca President SEALS 1 Executive Director i i Viii i ® n North Highway A1A ® Suite 250 Vero Beach,FL 32963 Ph: 772.234.8484 Fx: 772.234.8488 www.rehmann.com 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, 2012, 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 4 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, 2012, 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 12, 2013 on our consideration of the County's internal control over I financial reporting and on our tests of its compliance with certain provisions of taws, 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 f 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. CPAs&Cor sultants Wealth Advisors Corporate hivestigators ° INTERNATIONAL 1 I I rJRe h m a n n [ The Honorable Board of County Commissioners and Constitutional Officers [ Indian River County, Florida Page two Accounting principles generally accepted in the United States of America require that the management's discussion and analysis, as listed in the table of contents, be presented to supplement the basic financial statements. Such information, although not a part of the basic financial statements, is required by the Governmental Accounting Standards Board, who considers it to be an essential part of financial reporting for placing the basic financial statements in an appropriate operational, economic, or historical context. We have applied certain limited procedures to the required supplementary information in accordance with auditing standards generally accepted in the United States of America, which consisted of inquires of management about the methods of preparing the information and comparing the information for consistency with management's responses to our inquiries, the basic financial statements, and other knowledge we obtained during our audit of the basic financial statements. We do not express an opinion or provide any assurance on the information because the limited procedures do not provide us with sufficient evidence to express an opinion or provide any assurance. Our audit was conducted for the purpose of forming opinions on the financial statements that collectively comprise the County's basic financial statements. The combining and individual fund financial statements and schedules, listed in the table ' of contents, are presented for purposes of additional analysis and are 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 basic financial statements. The information has been subjected to the auditing procedures applied in the audit of the basic 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 basic 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 basic financial statements as a whole. The introductory section and statistical section are presented for purposes of additional analysis and are not a required part of the basic financial statements. Such information has not been subjected to the auditing procedures applied in the audit of the basic financial statements and accordingly, we do not express an opinion or provide any assurance on it. 4L49,rL�W� Vero Beach, Florida [ March 12, 2013 2 Indian River County,Florida Management's Discussion and Analysis For the Year Ended September 30,2012 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, 2012. 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-vi of this report. All amounts,unless iotherwise indicated, are expressed in millions of dollars. FINANCIAL HIGHLIGHTS • The County's overall financial position improved over 2011. • The assets and deferred outflows of resources of the County exceeded its liabilities by $1,006.6 million (net position). Of this amount, $146.8 million (unrestricted net position) may be used to meet the government's ongoing obligations to citizens and creditors. • The government's total net position increased by $1.5 million. Governmental activities accounted for $4.3 million of this increase, which was offset by a $2.8 million decrease in business-type activities net position. • Governmental activities expenses reflected a 0.3% increase ($147.0 million in 2011 to $147.4 million in 2012) and business-type activities expenses reflected a 0.1% increase ($48.3 million in 2011 to $48.9 million in 2012). • Unassigned fund balance for the general fund was 8. million, ° g g $4 7 1 on, ora 44.5/o increase from the i prior year general fund unassigned balance. One of the factors for the increase in the unassigned amount was the change in the designation of $8.0 million in committed economic incentives fund balance to unassigned fund balance due to the company not meeting the required timelines in the agreement. The other factor was the change in the designation of over $10.0 million of emergency and budget stabilization reserves to unassigned fund balance due to clarification of the use of the committed fund balance category. 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 Position presents information on all of the County's assets, liabilities, and deferred inflows/outflows of resources, with the difference reported as net position. Over time, increases or I decreases in net position may serve as a useful indicator of whether the financial position of the County is improving or deteriorating. 3 f r Indian River County,Florida Management's Discussion and Analysis For the Year Ended September 30,2012 i The Statement of Activities presents information showing how the government's net position changed during the most recent fiscal year. All changes in net position 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 I periods (e.g., uncollected grant revenue 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 and Comptroller, Property Appraiser, Sheriff, Supervisor of Elections and Tax Collector. The government-wide financial statements can be found on pages 17-19 of this I 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 I 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. I The County maintains 35 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. All are considered to be major funds. Data from the other 29 governmental funds are combined into a single, aggregated presentation. i 4 � _ f Indian River County,Florida Management's Discussion and Analysis For the Year Ended September 30, 2012 Individual fund data for each of these nonmajor governmental funds is provided in the form of 1 combining statements located behind the notes to the financial statements. The combining statements for the nonmajor governmental funds can be found on pages 101-151 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 I 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 153-157 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 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 43-98 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 99 of this report. I 5 t Indian River County,Florida Management's Discussion and Analysis For the Year Ended September 30,2012 Government-wide Financial Analysis As noted earlier, net position may serve over time as a useful indicator of a government's financial I position. In the case of the County, assets and deferred outflows of resources exceeded liabilities by ` $1,006.6 million at the close of the fiscal year. By far, the largest portion of the County's net position (72%) reflects its investment in capital assets (e.g., land, buildings, infrastructure, intangibles, machinery, and equipment), less any related outstanding 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 Position (In Millions) Governmental Business-type Activities Activities Total 2012 2011 2012 2011 2012 2011 Current and other assets $ 228.7 $ 242.3 $ 108.7 $ 107.0 $ 337.4 $ 349.3 Capital assets 553.4 544.7 257.3 267.1 810.7 811.8 Total assets 782.1 787.0 366.0 374.1 1,148.1 1,161.1 l Deferred outflows of resources - - 2.8 - 2.8 - Total deferred outflows - - 2.8 - 2.8 - ( I Current liabilities 21.3 23.6 13.5 12.0 34.8 35.6 I Other liabilities 54.0 60.8 55.5 58.9 109.5 119.7 Total liabilities 75.3 84.4 69.0 70.9 144.3 155.3 Net position: Net investment in capital assets 509.1 492.3 211.6 217.9 720.7 710.2 Restricted 121.2 125.4 17.9 24.3 139.1 149.7 Unrestricted 76.5 84.9 70.3 61.0 146.8 145.9 Total net position $ 706.8 $ 702.6 $ 299.8 $ 303.2 $ 1,006.6 $ 1,005.8 A portion of the County's net position(14%) represents resources that are subject to external restrictions on how they may be used. The remaining balance of the unrestricted net position ($146.8 million) may be used to meet the government's ongoing obligations to citizens and creditors. Overall, the County's net position increased less than 1%. In governmental activities, the decrease in unrestricted net position was due to the early payoff of bonds and the increase in net investment in capital assets was a result of right of way purchases and construction of roads and beach restoration projects. In business-type activities, the increase in unrestricted net position and decrease in net investment in capital assets, was a net result of decreasing book value of capital assets and the decreasing amount of debt outstanding. 6 Indian River County,Florida Management's Discussion and Analysis For the Year Ended September 30,2012 Indian River County Changes in Net Position (In Millions) Governmental Business-type Activities Activities Total 2012 2011 2012 2011 2012 2011 Revenues: Program revenues: Charges for services $ 15.7 $ 16.2 $ 42.9 $ 41.8 $ 58.6 $ 58.0 Operating grants/contributions 8.2 7.9 - - 8.2 7.9 Capital grants/contributions 7.1 1.9 2.5 2.0 9.6 3.9 General revenues: ( Property taxes 70.3 75.5 - - 70.3 75.5 Sales taxes 20.1 19.3 20.1 19.3 Franchise fees 8.6 8.7 - - 8.6 8.7 State shared revenues 18.0 17.3 - - 18.0 17.3 Other 3.7 4.4 0.7 1.3 4.4 5.7 Total revenues 151.7 151.2 46.1 45.1 197.8 196.3 Expenses: General government 19.1 21.3 - - 19.1 21.3 Public safety 66.5 67.4 66.5 67.4 Physical environment 2.4 1.3 - - 2.4 1.3 Transportation 23.7 22.3 - - 23.7 22.3 Economic environment 2.0 2.1 - - 2.0 2.1 Human services 7.7 7.8 - - 7.7 7.8 Culture/recreation 18.1 16.5 - - 18.1 16.5 Court related 5.6 5.8 - - 5.6 5.8 f Interest and fiscal charges 2.3 2.5 - - 2.3 2.5 I Water and sewer - - 34.3 33.8 34.3 33.8 Solid waste - - 10.7 10.4 10.7 10.4 Golf course - - 2.4 2.5 2.4 2.5 Building - - 1.5 1.6 1.5 1.6 Total expenses 147.4 147.0 48.9 48.3 196.3 195.3 Increase(decrease)in net position before transfers 4.3 4.2 (2.8) (3.2) 1.5 1.0 Transfers (0.03) (0.6) 0.03 0.6 - - Increase(decrease)in net position 4.3 3.6 (2.8) (2.6) 1.5 1.0 Net position-October 1,2011 702.6 699.0 303.2 305.8 1,005.8 1,004.8 Adjustments-pollution remediation (0.1) - - (0.03) (0.1) (0.03) Adjustments-deferred outflows/inflows - - (0.6) - (0.6) - Net position- September 30, 2012 $ 706.8 $ 702.6 $ 299.8 $ 303.2 $ 1,006.6 $ 1,005.8 7 Indian River County,Florida Management's Discussion and Analysis For the Year Ended September 30,2012 Governmental Activities Governmental activities net position increased by $4.3 million. Key elements of this increase are as follows: • Overall program revenues increased$5.0 million. I 1) Charges for services decreased by $0.5 million or 3%, due to a one time reimbursement of court fees from the federal government in fiscal year 2011. 2) Operating grant and contribution revenues in 2012 were $0.3 million higher, an increase of 4% from 2011. This was the net effect of a decrease in housing assistance grants and an increase in contributions for beach and park improvements. 3) Capital grants were $5.2 million higher in 2012 than in 2011, an overall increase of 273%. I This was largely due to increased physical environment capital grants ($1.0 million higher) for an environmental land purchase and increased transportation capital grants ($4.1 million higher) for the completion of the County's transit administration building and a sidewalk project. • Overall general revenues decreased by $4.5 million mainly due to decreased property tax values. • The governmental activities expenses were $0.4 million higher in 2012 than in 2011. Increases of $1.4 million in transportation and $1.6 million in culture and recreation expenses were mainly due to impact fee refunds. Increases of $1.1 million in physical environment were due to an environmental land purchase. Budget reductions resulted in decreases of$2.2 million in general government expenses, $0.9 million in public safety expenses, and $0.6 million in the remaining expenses. Business-type Activities Business-type activities net position decreased by $2.8 million. Key elements of this decrease are as follows: • Overall program revenues increased$1.6 million. t 1) Charges for services increased by $1.1 million or 3%. A gradual improvement in the local economy has attributed to the following increases over 2011 revenues: water and sewer charges increased by $0.5 million or 2%, solid waste revenues increased $0.4 million or 4%, the golf course revenues increased by $0.05 million or 2%, and the building revenues increased by$0.15 million or 9%. 2) Capital grants and contributions were $0.5 million higher in 2012 than in 2011, an overall increase of 25%. This was largely due to a $0.4 million increase in customer impact fee contributions from 2011 to 2012 in the water and sewer fund. • Interest earnings decreased by $0.1 million or 17% from the preceding year due to lower interest rates. 8 1 Indian River County, Florida Management's Discussion and Analysis For the Year Ended September 30, 2012 • Other miscellaneous general revenues decreased by $0.6 million from the preceding year. This was due to the sale of numerous solid waste capital assets in fiscal year 2011 upon privatization of the County's landfill. I • Overall expenses were $0.6 million or 1% higher in 2012 than in 2011. The golf course had$0.1 million or 4% lower expenses in 2012 than in 2011 and the building department had $0.1 million or 6% lower expenses in 2012 than in 2011 due to staff and benefit cost reductions. The water and sewer utilities expenses were $0.5 million or 1%higher in 2012 than in 2011 due to the write off of bond issuance costs and the loss on the demolition of two water and sewer buildings. The solid waste expenses were $0.3 million or 3% higher in 2012 than in 2011 due to an increase in I the recycling services contract. 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 26% of this total amount ($48.5 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 ($0.9 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 ($117.5 million), 3) a committed category for constraints imposed by approval of ordinances and contracts by Board of County Commissioners ($3.8 million), and 4) an assigned category for constraints by the County's intent to use for specific purposes ($13.1 million). The two largest restricted amounts are in the Impact Fees Fund with a $23.1 million restricted fund i balance and the Optional Sales Tax Fund with a$50.5 million restricted fund balance. The fund balance of the Secondary Roads Construction Fund($12.7 million), sixty percent of the Impact Fees Fund($13.8 million) and seventy-five percent of the Optional Sales Tax Fund is slated for major road expansions throughout the County. The County's governmental funds reported a combined fund balance of $183.8 million, which is a decrease of $13.2 million over the prior year of $197.0 million. Contributing factors to the $13.2 million decrease in fund balance are: ® Fund balance in the General Fund decreased by $2.5 million. This decrease was mainly due to the early payoff of the general obligation bonds. ` 9 Indian River County,Florida Management's Discussion and Analysis I� For the Year Ended September 30, 2012 • Fund balance in the Emergency Services District Fund decreased by $1.9 million, largely the result of decreased revenue from property tax values. • In the Impact Fees Fund, fund balance decreased $9.4 million. This was largely due to the $2.9 million in refunds issued to County residents for impact fees paid but remained unspent after six years and the$9.0 million in transportation spending due to major road construction and right-of- way purchases. • Fund balance in the Optional Sales Tax Fund increased by $6.2 million due to budgeted projects not yet completed. Proprietary funds Unrestricted net position at the end of the year amounted to $16.0 million in the Solid Waste Disposal District Fund, ($0.01) million in the Golf Course Fund, $4.1 million in the County Building Fund, and $50.2 million in the County Utilities Fund. Other factors concerning the finances of these funds have already been addressed in the discussion of the County's business-type activities. GENERAL FUND BUDGETARY HIGHLIGHTS During the year there was a$7 million increase in appropriations between the original and final amended budget. The main components are as follows: • $3,536,293 grants appropriations and prior year rollovers for the Senior Resource Association to provide County-wide public transportation. • $3,050,000 to call the remaining Land Acquisition G.O. Bonds, Series 2001. • $123,000 Local Jobs Grants • $111,500 Homeland Security Grants Actual revenues exceeded final budget by $3.6 million for the following reasons: • $1,000,000 Windsor donation reclassified from escrow fund to general fund • $556,845 Ad Valorem actual at 96.4% -budgeted at 95% • $437,000 Reimbursement for lower than anticipated insurance claims Actual expenditures were $3.3 million lower than anticipated for the following reasons: • $1,100,000 Senior Resource Association grants budgeted but not expended in FY 11/12 • $233,470 Medicaid invoices backlogged 2 months f The General Fund Statement of Revenues, Expenditures, and Changes in Fund Balances — Budget and Actual is shown on page 27. 10 Indian River County,Florida Management's Discussion and Analysis For the Year Ended September 30,2012 CAPITAL ASSETS AND DEBT ADMINISTRATION I r Capital Assets The County's investment in capital assets for its governmental and business-type activities as of September 30, 2012, amounts to $810.7 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 decrease in the County's investment in capital assets for the current fiscal year was less than 1%. Governmental activities had the following major increases during the fiscal year: • An increase in infrastructure primarily due to the capitalization of the Sector 3 Beach Restoration Project ($12.9 million), the 53rd Street road expansion project from Kings Highway to US 1 ($9.0 million), the 82nd Avenue bridge over the Lateral "D" Canal ($1.3 million), and a bridge r ($2.2 million) and sidewalk($1.2 million) along Old Dixie Highway. • An increase in buildings and improvements primarily due to the completion of the Quadrangle 4 Softball Fields at Vero Beach Sports Village ($2.4 million), and the Senior Resource Association transit facility ($2.3 million). • An increase in land due to the purchase of the Pressley Ranch property ($1.0 million). Business-type activities had the following major increases and decreases during the fiscal year: • An increase in buildings and improvements was due to the capitalization of the North County Reverse Osmosis Plant Wells 4-9 Project ($4.0 million), the North County Wastewater Treatment Plant Storage/Repump Facility ($2.1 million), and the North County reverse osmosis plant brine line ($0.9 million). • An increase in land due to the purchase of 13 acres for the South County brine project ($0.7 million). f 11 Indian River County, Florida Management's Discussion and Analysis For the Year Ended September 30,2012 Indian River County Capital Assets (Net of Depreciation, In Millions) Governmental Business-type Activities Activities Total 2012 2011 2012 2011 2012 2011 Land $ 139.6 $ 138.4 $ 21.3 $ 20.5 $ 160.9 $ 158.9 Right-of-way 54.7 53.7 - - 54.7 53.7 Buildings and improvements 149.0 148.1 226.1 232.5 375.1 380.6 Equipment 26.3 26.2 1.6 1.9 27.9 28.1 Intangibles 1.7 1.3 1.8 1.9 3.5 3.2 Infrastructure 153.9 133.0 - - 153.9 133.0 Construction in progress 28.2 44.0 6.5 10.3 34.7 54.3 Total $ 553.4 $ 544.7 $ 257.3 $ 267.1 $ 810.7 $ 811.8 Additional information on the County's capital assets can be found in Note 6 on pages 66-68 of this report. Debt Administration-Long-term debt At the end of the current fiscal year, the County had total bonded debt outstanding of$92.8 million. Of this amount, $33.2 million is debt backed by the full faith and credit of the government. The revenue bonds represent bonds secured solely by specified revenue sources. Indian River County's Outstanding Debt General Obligation and Revenue Bonds (In Millions) Governmental Business-type Activities Activities Total General Oblization Debt: 2012 2011 2012 2011 2012 2011 General Obligation, Series 2001 $ - $ 4.4 $ - $ - $ - $ 4.4 Limited General Oblig., Series 2006 33.2 36.3 - - 33.2 36.3 Revenue Bonds: Spring Training Facility, Series 2001 11.1 11.7 - - 11.1 11.7 Recreational Revenue Ref., Series 2003 - - 2.1 2.6 2.1 2.6 ` Water and Sewer Ref, Rev., Series 2005 - - 19.6 21.2 19.6 21.2 Water and Sewer Ref. Rev., Series 2009 - - 26.8 28.7 26.8 28.7 Total $ 44.3 $ 52.4 $ 48.5 $ 52.5 $ 92.8 $ 104.9 4 12 I Indian River County,Florida Management's Discussion and Analysis For the Year Ended September 30,2012 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 & Poors is "AAA" and "A-" on the Revenue Bonds. Standard &Poor's rating is required on all issues. A second rating from Fitch or Moody's is also recommended. Additional information on the County's long-term debt can be found in Note 13 on pages 74-83 of this report. ECONOMIC FACTORS AND NEXT YEAR'S BUDGETS AND RATES In order to address an expected decrease in property values and other County revenues, Board departments, Constitutional Officers, and outside agencies were asked to trim their budgets by 3% from the previous year. Many cost saving measures have been taken to adjust for declining revenues. For example, mid-year privatization of County Beach Park's Maintenance and related operations resulted in the elimination of four (4) full-time positions and an annual savings of$163,613. In summary, staff has undertaken a critical review of all functions to streamline operations as much as possible without impacting service levels. The total proposed budget is $252,135,490, a decrease of $54,879,451 or j 17.9% from the current year. This represents a drop of 46.6% from the approved FY 2006/07 amount of $472,420,328. ( The single greatest individual expense in the budget is personnel services. In order to balance the ( budget with the reduced revenues, seven (7) full-time (FT) positions were eliminated in mid-year of FY 11/12. Additional decreases of nine (9) full-time (FT)positions have been proposed for next fiscal year. Indian River County, like the nation overall, has been experiencing a continuation of the economic slowdown this year. Some revenues have leveled off and are even showing signs of a slight increase. Therefore, our revenue projections for next year are mixed. For example, Half-Cent Sales Tax is increasing $202,234 or 2.8%,while interest earnings are expected to drop $58,000 or 4.3%. State shared revenues are expected to increase by $61,952 or 2.4%. The tax roll is decreasing by 3.6% compared to a decrease of 6.6% last year. Building permit revenues are expected to increase $50,000 or 5.0%. Franchise fees are decreasing by $132,500 or 1.5%. Advanced life support charges are expected to increase by $360,000 next year. Many of the revenue increases are following five years of substantial decline. During the current fiscal year, the County approved paying off the remaining bonds early at the July 1, 2012 call date. This will provide a savings of about $250,000 in interest payments over the next four years. Additionally, this allows for the elimination of the millage needed to service these bonds, allowing for an additional decrease of$949,364 in taxes levied. Total debt service expenses are budgeted at $4,754,745, an increase of$6,304, or 0.1%. The millage rate is 0.3799, an increase of 0.0152, or 4.2%. This millage needs to be increased to generate the same revenues as last year in order to fund the debt service amount. Solid waste disposal district assessment rates remain unchanged, along with the street lighting and M.S.B.U. districts. 13 Indian River County,Florida Management's Discussion and Analysis For the Year Ended September 30,2012 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: i Clerk of the Circuit Court and Comptroller Attention: Finance Department 1801 27th Street Vero Beach, FL 32960 I l ,l I i I 14 i i i i BASIC FINANCIAL STATEMENTS i I 15 FioxroA Indian River County,Florida Statement of Net Position September 30,2012 Primary Government Governmental Business-type Activities Activities Total j ASSETS (I Current assets: Cash and cash equivalents $ 200,153,652 $ 57,642,357 $ 257,796,009 Investments 691,980 - 691,980 Accounts receivable-net 2,243,219 2,977,799 5,221,018 Internal balances 399,255 (399,255) Due from other governments 16,950,318 15,431 16,965,749 Interest receivable 233,730 538,139 771,869 Inventories 266,242 950,479 1,216,721 Other assets held for resale 658,000 - 658,000 Prepaid expenses 1,554,345 211,858 1,766,203 Current restricted assets: Cash and cash equivalents 4,940,591 42,192,730 47,133,321 Total current assets 228,091,332 104,129,538 332,220,870 Non-current assets: Net other postemployment benefits asset 321,681 321,681 Capital assets-non-depreciable 226,629,449 29,252,222 255,881,671 Capital assets-depreciable 556,857,658 435,586,230 992,443,888 Capital assets-accumulated depreciation (230,134,470) (207,517,593) (437,652,063) f Non-current restricted assets: Special assessments receivable 310,506 1,007,420 1,317,926 Impact fees receivable - 744,116 744,116 Liens receivable 2,819,565 2,819,565 Total non-current assets 553 984 824 261,891,960 815,876,784 Total assets 782,076,156 366,021,498 1,148,097,654 DEFERRED OUTFLOWS OF RESOURCES Deferred amounts on refundings 2,875,239 2,875,239 Total deferred outflows of resources - 2,875,239 2,875,239 j+ LIABILITIES Current liabilities(payable from current assets): Accounts payable 6,435,150 2,793,188 9,228,338 Retainage payable 438 242,016 242,454 Claims payable 2,197,855 2,197,855 Due to other governments 578,215 2,856,263 3,434,478 Other deposits held in escrow 323,847 1,000 324,847 Unearned revenues 189,294 29,652 218,946 Accrued compensated absences 6,532,620 644,945 7,177,565 Pollution remediation costs payable 137,003 2,510 139,513 Current liabilities(payable from current restricted assets): Accounts payable - 59,013 59,013 Retainage payable 792,526 35,364 827,890 Accrued interest payable 373,065 180,344 553,409 Customer deposits 2,895,754 2,895,754 Bonds payable 3,775,000 3,760,000 7,535,000 Total current liabilities 21,335,013 13,500,049 34,835,062 Non-current liabilities: Accrued compensated absences 4,466,032 212,192 4,678,224 Pollution remediation costs payable 2,475,997 6,290 2,482,287 Claims payable 5,876,145 - 5,876,145 Due to other governments 632,347 - 632,347 Closure and maintenance costs payable 10,513,736 10,513,736 Bonds payable,net of premium and discount 40,500,714 44,804,569 85,305,283 Total non-current liabilities 53,951,235 55,536,787 109,488,022 Total liabilities 75,286,248 69,036,836 144,323,084 NET POSITION Net investment in capital assets 509,076,923 211,631,529 720,708,452 Restricted for: Transportation/road projects 27,006,817 - 27,006,817 Public safety 17,781,161 17,781,161 fl Court related costs 3,612,381 3,612,381 Housing assistance 1,737,207 1,737,207 Capital projects 50,757,842 17,941,773 68,699,615 Beach renourishment 6,093,395 - 6,093,395 Culture/recreation 7,946,240 7,946,240 Debt service 2,387,548 2,387,548 Environmental conservation/preservation 258,095 258,095 Special assessment projects 1,738,510 1,738,510 Other purposes 1,870,032 - 1,870,032 Unrestricted 76,523,757 70,286,599 146,810,356 Total net position $ 706,789,908 $ 299,859,901 $ 1,006,649,809 The accompanying notes are an integral part of the financial statements. 17 Indian River County,Florida Statement of Activities For the Year Ended September 30,2012 Program Revenues Operating Capital Charges for Grants and Grants and Expenses Services Contributions Contributions Functions/Programs Primary Government: Governmental activities: General government $ 19,069,181 $ 5,304,385 $ 454,253 $ 3,370 f Public safety 66,456,674 5,852,093 459,292 985,197 l Physical environment 2,424,109 20,923 - 1,022,876 Transportation 23,629,799 2,345,186 2,790,719 5,033,657 Economic environment 1,986,091 - 358,879 - Human services 7,749,253 358,279 2,825,859 - Culture/recreation 18,089,432 1,397,660 1,297,718 8,394 Court related 5,635,245 414,356 43,691 - Interest and fiscal charges 2,350,241 - - - l Total governmental activities 147,390,025 15,692,882 8,230,411 7,053,494 Business-type activities: Water and sewer 34,246,967 28,361,246 - 2,545,759 Solid waste 10,659,004 9,582,955 - - Golf course 2,451,603 3,216,471 - - Building 1,487,515 1,735,713 - - Total business-type activities 48,845,089 42,896,385 - 2,545,759 Total primary government $ 196,235,114 $ 58,589,267 $ 8,230,411 $ 9,599,253 General Revenues: Property taxes,levied for general purposes Property taxes,levied for debt service Sales and use taxes Franchise fees,levied on gross receipts F State shared tax revenues Interest earnings Miscellaneous Total general revenues Transfers Total general revenues and transfers Change in net position Net position-beginning,as restated(Note 21C) Net position-ending I The accompanying notes are an integral part of the financial statements. 18 I Net(Expense)Revenue and Changes in Net Position Primary Government Governmental Business-type Activities Activities Total $ (13,307,173) $ - $ (13,307,173) (59,160,092) (59,160,092) (1,380,310) - (1,380,310) (13,460,237) - (13,460,237) (1,627,212) (1,627,212) (4,565,115) - (4,565,115) (15,385,660) - (15,385,660) (5,177,198) - (5,177,198) (2,350,241) (2,350,241) (116,413,238) - (116,413,238) - (3,339,962) (3,339,962) - (1,076,049) (1,076,049) 764,868 764,868 248,198 248,198 - (3,402,945) (3,402,945) (116,413,238) (3,402,945) (119,816,183) 64,753,566 - 64,753,566 5,574,183 5,574,183 20,144,820 - 20,144,KO 8,620,401 - 8,620,401 17,908,806 17,908,806 668,012 600,116 1,268,128 3,079,701 8,400 3,088,101 120,749,489 608,516 121,358,005 (32,957) 32,957 - 120,716,532 641,473 121,358,005 4,303,294 (2,761,472) 1,541,822 702,486,614 302,621,373 1,005,107,987 $ 706,789,908 $ 299,859,901 $ 1,006,649,809 I 19 Indian River County,Florida Balance Sheet Governmental Funds September 30,2012 j Secondary Impact Roads General Fees Construction ASSETS Cash and cash equivalents $ 53,924,172 $ 25,056,533 $ 12,569,189 Investments 691,980 - _ Accounts receivable-net 662,278 Special assessments receivable - Due from other funds 498,704 - - Due from other governments 2,223,819 62,718 288,980 Inventories 48,046 - - Prepaid items 74,779 Other assets held for resale - Advance to other funds 188,416 255,000 Total assets $ 58 312,194 $ 25,119,251 $ 13,113,169 LIABILITIES Accounts payable $ 2,720,121 $ 1,569,517 $ 409,289 Retainage payable 438 398,820 30,634 Due to other funds 415,573 - - Due to other governments 397,300 22,828 Unearned revenues 173,532 - Other deposits 268,183 - _ Total liabilities 3,975,147 1,991,165 439,923 I! DEFERRED INFLOWS OF RESOURCES Unavailable revenue-special assessments - Total deferred inflows of resources FUND BALANCES Nonspendable: Inventories 48,046 Prepaid items 74,779 - Advances to other funds 188,416 - 255,000 Restricted for: Transportationlroad improvements - 13,817,620 12,418,246 Court-related costs and improvements 120,087 - - Housing assistance - - Law enforcement/public safety 1,325,474 Fire/emergency services 1,618,259 Tourism-related activites _ Beach renourishment Boating related projects _ Library services 345,201 Land acquisition _ Stormwater,street lighting,and other special assessments Debt service Capital projects Sports Village repairs/improvements - - Solid waste projects - 25,802 - Parks/recreational projects 1,000,000 4,437,723 - Other purposes - 1,558,007 - Committed to: Economic incentives 2,343,213 - Environmental conservation/preservation - Law enforcement/public safety 4,244 Court operations - Other purposes 27,333 f Assigned tw jI Subsequent year's budget appropriation of fund balance 1,808,000 Transportation/road improvements - _ Unassigned 48,722,929 - Total fund balances 54,337,047 23,128,086 12,673,246 Total liabilities,deferred inflows and fund balances $ 58,312,194 $ 25,119,251 $ 13,113,169 The accompanying notes are an integral part of the financial statements. 20 I i ( Emergency Optional Other Total Services Sales Governmental Governmental Transportation District Tax Funds Funds $ 8,738,192 $ 11,846,281 $ 38,776,874 $ 22,215,507 $ 173,126,748 691,980 - 12,606 674,884 310,506 - - 310,506 - 239,268 - 77,940 815,912 232,096 12,190 12,656,159 124,851 15,600,813 48,046 302,128 376,907 658,000 658,000 - - 443,416 $ 9,280,794 $ 12,097,739 $ 51,433,033 $ 23,391,032 $ 192,747,212 $ 226,686 $ 171,827 $ 614,954 $ 519,864 $ 6,232,258 - - 335,285 27,787 792,964 219,500 635,073 - - 420,128 6,620 9,142 189,294 } - - 55,664 323,847 (I 226,686 178,447 950,239 831,957 8,593,564 310,506 - 310,506 310,506 310,506 - - 48,046 302,128 376,907 - 443,416 - 26,235,866 3,449,680 3,569,767 1,597,356 1,597,356 - 2,912,503 4,237,977 9,374,292 - 10,992,551 381,152 381,152 6,093,395 6,093,395 1,084,470 1,084,470 144,490 489,691 258,095 258,095 1,738,510 1,738,510 - 2,477,447 2,477,447 50,482,794 - 50,482,794 - 553,204 553,204 25,802 - 5,437,723 286,223 1,844,230 - 2,343,213 1,058,569 1,058,569 391,568 395,812 33,256 33,256 - - 27,333 - 2,545,000 4,353,000 8,743,602 - - 8,743,602 - - - (202,971) 48,519,958 8,743,602 11,919,292 50,482,794 22,559,075 183,843,142 $ 9,280,794 $ 12,097,739 $ 51,433,033 $ 23,391,032 $ 192,747,212 l 21 r 4 Indian River County, Florida Reconciliation of Total Governmental Fund Balances to Net Position of Governmental Activities September 30,2012 Total governmental fund balances: $ 183,843,142 Amounts reported for governmental activities in the statement of net position are different because: Capital assets used in governmental activities are not fmancial resources and,therefore,are not reported 553,000,546 in the fund. Long-term liabilities,including bonds payable($44,275,714),accrued compensated absences($10,953,682), f medicaid settlement funds payable($790,434)and pollution remediation costs($2,613,000) are not due and payable in the current period and,therefore,are not reported in the fund. (58,632,830) Accrued general long-term debt interest expenses are not fmancial uses and,therefore,are not reported in (373,065) the fund. Special assessment receivables are not available to pay for current period expenditures and,therefore,are reported as unavailable revenue in the funds. 310,506 Accrued interest on special assessments is not recognized in the current period because the resources are not available and,therefore,not reported in the fund. 133,794 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 position. 26,879,571 Grant revenues are not recognized in the current period because the resources are not available and, therefore,are not reported in the fund. 1,222 541 The OPEB asset resulting from contributions in excess of the annual required contribution is not a financial resource and,therefore,is not reported in the funds. 321,681 Interest revenues are not recognized in the current period because the resources are not available and, therefore,are not reported in the fund. 84,022 Net position of governmental activities $ 706,789,908 The accompanying notes are an integral part of the financial statements. 22 n�� cOG n� s � s �1oRroA Indian River County,Florida I Statement of Revenues,Expenditures,and Changes in Fund Balances Governmental Funds For the Year Ended September 30,2012 Secondary Impact Roads General Fees Construction REVENUES Taxes $ 48,402,789 $ - $ 3,329,183 Permits,fees and special assessments 8,771,351 2,267,920 44,705 Intergovernmental 16,528,034 43,731 991,722 Charges for services 8,347,171 - 6,340 Judgments,fines and forfeits 324,186 Interest 224,265 72,788 39,860 Miscellaneous 2,425,574 484,908 23,916 Total revenues 85,023,370 2,869,347 4,435,726 EXPENDITURES Current: General government 17,197,033 272,699 - Public safety 39,937,404 472,131 Physical environment 257,820 - _ Transportation 3,305,565 9,068,091 4,955,169 Economic environment 362,868 - _ Human services 3,154,028 Culture/recreation 8,054,600 2,326,872 Court related 5,227,709 - Debt service: Principal - _ Interest and fiscal charges _ !I Capital projects - _ _ Total expenditures 77,497,027 12,139,793 4,955,169 Excess of revenues over(under)expenditures 7,526,343 (9,270,446) (519,443) S OTHER FINANCING SOURCES(USES) Transfers in 700,562 Transfers out (10,699,149) (100,000) Total other financing sources(uses) (9,998,587) (100,000) Net change in fund balances (2,472,244) (9,370,446) (519,443) 4 Fund balances at beginning of year 56,809,291 32,498,532 13,192,689 Fund balances at end of year $ 54,337,047 $ 23,128,086 $ 12,673,246 The accompanying notes are an integral part of the financial statements. 24 Emergency Optional Other Total Services Sales Governmental Governmental Transportation District Tax Funds Funds $ - $ 17,848,785 $ 13,708,911 $ 7,182,901 $ 90,472,569 ((( 106,427 - 22,353 273,479 11,486,235 2,723,247 95,560 261,342 9,116,196 29,759,832 118,731 4,779,183 - 1,508,700 14,760,125 (I 7,000 408,089 739,275 35,865 55,920 111,762 72,563 613,023 1,151,450 140,939 223,465 787,174 5,237,426 4,135,720 22,927,387 14,327,833 19,349,102 153,068,485 273,897 - - 2,734,269 20,477,898 24,473,608 2,878,842 67,761,985 395,508 - 1,098,295 1,751,623 11,520,797 208,688 29,058,310 - 1,658,316 2,021,184 3,734,855 6,888,883 3,426,831 13,808,303 - 633,216 5,860,925 - - 8,060,000 8,060,000 - - 2,426,083 2,426,083 - 8,108,370 - 8,108,370 12,190,202 24,473,608 8,108,370 26,859,395 166,223,564 (8,054,482) (1,546,221) 6,219,463 (7,510,293) (13,155,079) f 7,499,582 _ 3,394,934 11,595,078 (379,401) (444,434) (11,622,984) 7,499,582 (379,401) - 2,950,500 (27,906) ( (554,900) (1,925,622) 6,219,463 (4,559,793) (13,182,985) (! 9,298,502 13,844,914 44,263,331 27,118,868 197,026,127 $ 8,743,602 $ 11,919,292 $ 50,482,794 $ 22,559,075 $ 183,843,142 l f 1 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 30,2012 Net change in fund balances-total governmental funds $ (13,182,985) 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 27,751,553 Less current year loss on assets (948,213) Less current year depreciation (20,004,763) 6,798,577 Governmental funds do not report capital assets contributed from outside the entity. However,those assets are recognized in the statement of net position and the capital contribution is recognized in the statement of activities. 1,918,753 Assets transferred from governmental funds to proprietary funds must be recognized as a transfer out on the statement of activities. (40,489) ` Payments of bond principal,pollution remediation,and medicaid settlement costs are f expenditures in the governmental funds,but the payment reduces long-term liabilities in the statement of net position. Bond principal payment 8,060,000 Bond premium payment 93,225 Medicaid settlement (790,434) Pollution remediation costs 83,300 7,446,091 Changes in accrued compensated absences do not require the use of current financial resources and,therefore,are not reported as expenditures in governmental funds. (228,998) 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 75,842 Accrued OPEB expense 132,097 207,939 Some revenues reported in the governmental funds have been recognized as revenues in the prior fiscal year in the statement of activities. 236,710 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. 927,862 Governmental funds report non-exchange transactions when the applicable eligibility requirements have been met and resources are available. However,in the statement cl 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. 262,891 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. (43,057) Change in net position of governmental activities $ 4,303,294 The accompanying notes are an integral part of the financial statements. 26 Indian River County,Florida Statement of Revenues,Expenditures,and Changes in Fund Balances-Budget and Actual General Fund For the Year Ended September 30,2012 Variance with Final Budget Budgeted Amounts Actual Positive Original Final Amounts (Negative) REVENUES Taxes $ 47,634,737 $ 47,634,736 $ 48,402,789 $ 768,053 Permits,fees and special assessments 8,530,525 8,530,525 8,771,351 240,826 Intergovernmental 13,225,516 16,127,139 16,528,034 400,895 Charges for services 9,835,794 7,926,505 8,347,171 420,666 ( Judgments,fines and forfeits 303,525 303,525 324,186 20,661 Interest 268,875 268,875 224,265 (44,610) Miscellaneous 449,113 634,045 2,425,574 1,791,529 Total revenues 80,248,085 81,425,350 85,023,370 3,598,020 EXPENDITURES Current: General government 17,731,501 18,144,543 17,197,033 947,510 Public safety 41,133,399 40,085,775 39,937,404 148,371 Physical environment 255,043 266,143 257,820 8,323 Transportation 845,286 4,467,615 3,305,565 1,162,050 Economic environment 349,264 444,074 362,868 81,206 Human services 3,178,533 3,572,249 3,154,028 418,221 Culture/recreation 8,177,728 8,485,377 8,054,600 430,777 { Court related 5,223,336 5,378,385 5,227,709 150,676 ll Total expenditures 76,894,090 80,844,161 77,497,027 3,347,134 Excess of revenues over(under)expenditures 3,353,995 581,189 7,526,343 6,945,154 ( OTHER FINANCING SOURCES(USES) Transfers in 193,141 946,166 700,562 (245,604) Transfers out (7,649,218) (10,699,218) (10,699,149) 69 Total other financing sources(uses) (7,456,077) (9,753,052) (9,998,587) (245,535) Net change in fund balances (4,102,082) (9,171,863) (2,472,244)$ 6,699,619 Fund balances at beginning of year 4,102,082 9,171,863 56,809,291 Fund balances at end of year $ - $ - $ 54,337,047 f 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 30,2012 Variance with Final Budget Budgeted Amounts Actual Positive Original Final Amounts (Negative) REVENUES Permits,fees and special assessments $ 1,363,250 $ 1,363,250 $ 2,267,920 $ 904,670 Intergovernmental - - 43,731 43,731 Interest 114,000 114,000 72,788 (41,212) Miscellaneous - - 484,908 484,908 Total revenues 1,477,250 1,477,250 2,869,347 1,392,097 EXPENDITURES Current: General government 277,891 480,142 272,699 207,443 Public safety 90,000 3,218,460 472,131 2,746,329 Physical environment 25,000 25,000 - 25,000 Transportation 7,435,837 17,419,285 9,068,091 8,351,194 Culture/recreation 2,050,000 8,052,554 2,326,872 5,725,682 Total expenditures 9,878,728 29,195,441 12,139,793 17,055,648 Excess of revenues over(under)expenditures (8,401,478) (27,718,191) (9,270,446) 18,447,745 OTHER FINANCING USES Transfers out - (100,000) (100,000) - Total other financing uses - (100,000) (100,000) - Net change in fund balances (8,401,478) (27,818,191) (9,370,446) $ 18,447,745 i Fund balances at beginning of year 8,401,478 27,818,191 32,498,532 Fund balances at end of year $ - $ - $ 23,128,086 I i The accompanying notes are an integral part of the financial statements. 28 I _ Indian River County,Florida ( Statement of Revenues,Expenditures,and Ii Changes in Fund Balances-Budget and Actual Secondary Roads Construction Fund For the Year Ended September 30,2012 Variance with Final Budget Budgeted Amounts Actual Positive Original Final Amounts (Negative) REVENUES Taxes $ 3,220,500 $ 3,220,500 $ 3,329,183 $ 108,683 Permits,fees and special assessments - - 44,705 44,705 Intergovernmental 3,697,186 991,722 (2,705,464) Charges for services - - 6,340 6,340 Interest 52,250 52,250 39,860 (12,390) Miscellaneous 23,750 23,750 23,916 166 Total revenues 3,296,500 6,993,686 4,435,726 (2,557,960) EXPENDITURES Current: Transportation 11,026,726 16,806,158 4,955,169 11,850,989 Total expenditures 11,026,726 16,806,158 4,955,169 11,850,989 Net change in fund balances (7,730,226) (9,812,472) (519,443)$ 9,293,029 Fund balances at beginning of year 7,730,226 9,812,472 13,192,689 Fund balances at end of year $ - $ - $ 12,673,246 f I r i 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 30,2012 Variance with Final Budget Budgeted Amounts Actual Positive f Original Final Amounts (Negative) REVENUES Permits,fees and special assessments $ 118,750 $ 118,750 $ 106,427 $ (12,323) Intergovernmental 2,492,800 2,500,263 2,723,247 222,984 Charges for services 87,875 87,875 118,731 30,856 Interest 49,400 49,400 35,865 (13,535) Miscellaneous 792,750 793,793 1,151,450 357,657 Total revenues 3,541,575 3,550,081 4,135,720 585,639 EXPENDITURES I" Current: General government 285,958 286,656 273,897 12,759 Physical environment 544,058 647,434 395,508 251,926 Transportation 11,461,141 12,459,867 11,520,797 939,070 Total expenditures 12,291,157 13,393,957 12,190,202 1,203,755 Excess of revenues over(under)expenditures (8,749,582) (9,843,876) (8,054,482) 1,789,394 OTHER FINANCING SOURCES Transfers in 7,499,582 7,499,582 7,499,582 - Total other financing sources 7,499,582 7,499,582 7,499,582 - Net change in fund balances (1,250,000) (2,344,294) (554,900) $ 1,789,394 1 Fund balances at beginning of year 1,250,000 2,344,294 9,298,502 Fund balances at end of year $ - $ - $ 8,743,602 C f I I I 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 lFor the Year Ended September 30,2012 ` Variance with Final Budget Budgeted Amounts Actual Positive Original Final Amounts (Negative) REVENUES Taxes $ 17,580,683 $ 17,580,683 $ 17,848,785 $ 268,102 Intergovernmental 33,250 105,627 95,560 (10,067) Charges for services 4,186,175 4,186,175 4,779,183 593,008 Judgments,fines and forfeits 1,900 1,900 7,000 5,100 Interest 90,250 90,250 55,920 (34,330) Miscellaneous 14,527 14,527 140,939 126,412 Total revenues 21,906,785 21,979,162 22,927,387 948,225 EXPENDITURES Current: Public safety 24,659,507 25,896,332 24,473,608 1,422,724 Total expenditures 24,659,507 25,896,332 24,473,608 1,422,724 Excess of revenues over(under)expenditures (2,752,722) (3,917,170) (1,546,221) 2,370,949 OTHER FINANCING USES Transfers out (451,068) (451,068) (379,401) 71,667 Total other financing uses (451,068) (451,068) (379,401) 71,667 Net change in fund balances (3,203,790) (4,368,238) (1,925,622)$ 2,442,616 Fund balances at beginning of year 3,203,790 45368,238 13,844,914 Fund balances at end of year $ - $ - $ 11,919,292 I i The accompanying notes are an integral part of the financial statements. 31 F�roA I Indian River County,Florida Statement of Net Position Proprietary Funds September 30,2012 Business-type Activities-Enterprise Funds Governmental Solid Waste Activities Disposal Golf County County Internal District Course Utilities Building Total Service Funds ASSETS Current assets: Cash and cash equivalents $ 14,760,597 $ 183,390 $ 38,463,042 $ 4,235,328 $ 57,642,357 $ 31,967,495 Accounts receivable-net 113,820 - 2,863,979 - 2,977,799 1,568,335 Due from other funds 98,365 - - 98,365 - Due from other governments - 11,100 4,331 _ 15,431 126,964 Interest receivable 9,608 438 525,988 2,105 538,139 15,914 Inventories 56,673 893,806 950,479 218,196 Prepaid items - 211,858 211,858 1,177,438 Current restricted assets: Cash and cash equivalents 13,869,807 470,681 27,852,242 42,192,730 - Total current assets 28,852,197 722,282 70,815,246 4,237,433 104,627,158 35,074,342 Non-current assets: Capital assets-non-depreciable 18,755,620 786,611 9,709,991 29,252,222 - Capitalassets-depreciable 21,836,756 8,314,248 404,979,117 456,109 435,586,230 1,119,934 Capital assets-accumulated depreciation (8,710,425) (1,811,236) (196,570,779) (425,153) (207,517,593) (767,843) Non-current restricted assets: Special assessments receivable 1,007,420 1,007,420 Impact fees receivable 744,116 744,116 Liens receivable 2,819,565 2,819,565 Total non-cutrem assets 31,881,951 7,289,623 222,684,430 30,956 261,891,960 352,091 Total assets 60,734,148 8,011,905 293,504,676 4,268,389 366,519,118 35,426,433 DEFERRED OUTFLOWS OF RESOURCES Deferred amounts on refundings - 107,215 2,768,024 2,875,239 Total deferred outflows of resources 107,215 2,768,024 2,875,239 LIABILITIES Current liabilities(payable from current assets): Accounts payable 1,973,276 139,328 660,621 19,963 2,793,188 202,892 Retainage payable 216,211 4,987 20,818 - 242,016 - Due to other funds 54,204 54,204 225,000 Claims payable 2,197,855 Due to other governments 7,771 2,833,946 14,546 2,856,263 - Other deposits 1,000 - 1,000 Unearned revenues 29,652 - 29,652 Pollution remediation payable 2,510 2,510 Accrued compensated absences 36,275 36,579 492,621 79,470 644,945 33,005 Total current liabilities(payable from current assets) 2,225,762 273,521 4,010,516 113,979 6,623,778 2,658,752 Current liabilities(payable from restricted assets): Accounts payable - - 59,013 - 59,013 - Retainage payable 35,364 35,364 Accrued interest payable 6,931 173,413 180,344 Bonds payable - 555,000 3,205,000 3,760,000 Customer deposits 126,626 2,769,128 2,895,754 Total current liabilities(payable from restricted assets) 126,626 561,931 6,241,918 6,930,475 Total current liabilities 2,352,388 835,452 10,252,434 113,979 13,554,253 2,658,752 Non-current liabilities: Accrued compensated absences 5,998 6,456 180,217 19,521 212,192 11,965 Advance from other funds - 443,416 - - 443,416 - Claims payable - - - 5,876,145 Pollution remediation payable 6,290 6,290 Closure and maintenance costs payable 10,513,736 10,513,736 Bonds payable-net of unamortized discount/premium 1,546,871 43,257,698 44,804,569 Total non-current liabilities 10,519,734 1,996,743 43,444,205 19,521 55,980,203 5,888,110 Total liabilities 12,872,122 2,832,195 53,696,639 133,500 69,534,456 8,546,862 NET POSITION Net investment in capital assets 31,881,951 5,294,967 174,423,655 30,956 211,631,529 352,091 Restricted for: Capital projects - - 17,941,773 - 17,941,773 - Unrestricted 15,980,075 (8,042) 50,210,633 4,103,933 70,286,599 26,527,480 Total net position $ 47,862,026 $ 5,286,925 $ 242,576,061 $ 4,134,889 $ 299,859,901 $ 26,879,571 I t • 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 Position Proprietary Funds For the Year Ended September 30,2012 Business-type Activities- Solid Waste Disposal Golf District Course OPERATING REVENUES Charges for services $ 9,582,955 $ - Charges for services pledged as security for revenue bonds - 3,216,471 Total operating revenues 9,582,955 3,216,471 OPERATING EXPENSES Personal services 533,291 537,390 Material,supplies,services and other operating 9,283,395 1,643,574 Depreciation 842,318 129,906 Total operating expenses 10,659,004 2,310,870 Operating income(loss) (1,076,049) 905,601 NONOPERATING REVENUES(EXPENSES) Interest income 268,633 - Interest income pledged as security for revenue bonds - 4,088 Gain on disposal of equipment - 625 Interest expense - (109,301) Bond amortization expense - (31,432) Loss on disposal of equipment - - Total nonoperating revenues(expenses) 268,633 (136,020) f Income(loss)before transfers and capital contributions (807,416) 769,581 Capital contributions - - Capital grants - Transfers in - - Transfers out - (7,532) Change in net position (807,416) 762,049 Total net position-beginning,as restated(Note 21C) 48,669,442 4,524,876 Total net position-ending $ 47,862,026 $ 5,286,925 1 The accompanying notes are an integral part of the financial statements. 34 I Enterprise Funds Governmental Activities County County Internal Utilities Building Total Service Funds $ - $ 1,735,713 $ 11,318,668 $ 21,563,550 28,361,246 - 31,577,717 - 285361,246 1,735,713 42,896,385 21,563,550 7,315,133 1,038,946 9,424,760 2,471,801 10,059,161 445,023 21,431,153 18,143,414 14,414,302 3,546 15,390,072 155,207 31,788,596 1,487,515 46,245,985 20,770,422 ( (3,427,350) 248,198 (3,349,600) 793,128 - 12,018 280,651 98,046 315,377 - 319,465 - 7,775 - 8,400 1,250 (2,184,076) (2,293,377) (25,828) - (57,260) - (248,467) - (248,467) - (2,135,219) 12,018 (1,990,588) 99,296 (5,562,569) 260,216 (5,340,188) 892,424 2,513,774 - 2,513,774 - 72,474 - 72,474 - - - - 35,438 - (7,532) - (2,976,321) 260,216 (2,761,472) 927,862 245,552,382 3,874,673 302,621,373 25,951,709 $ 2423576,061 $ 4,134,889 $ 299,859,901 $ 26,879,571 35 f E Indian River County,Florida Statement of Cash Flows Proprietary Funds For the Year Ended September 30,2012 I Business-type Solid Waste Disposal Golf District Course CASH FLOWS FROM OPERATING ACTIVITIES Cash received from customers $ 9,575,399 $ 3,217,549 Cash paid to suppliers for goods and services (7,804,212) (1,566,655) Cash paid to employees for services (530,952) (559,077) Net cash provided by(used in)operating activities 1,240,235 1,091,817 CASH FLOWS FROM NONCAPITAL FINANCING ACTIVITIES Transfers - (7,532) Proceeds from advances from other funds - - Payments for advances from other funds - (307,604) Net cash provided by(used in)noncapital financing activities - (315,136) CASH FLOWS FROM CAPITAL AND RELATED FINANCING ACTIVITIES Principal payments-bonds/notes - (535,000) Interest paid on long-term debt - (111,081) Proceeds from sales of capital assets 501 625 Purchase of capital assets (2,648,473) (84,625) Bond paying agent fees - - Capital contributed by others - - Net cash provided by(used in)capital and related financing activities (2,647,972) (730,081) CASH FLOWS FROM INVESTING ACTIVITIES Interest and dividends on investments 274,658 4,224 Net cash provided by investing activities 274,658 4,224 Net increase(decrease)in cash and cash equivalents (1,133,079) 50,824 Cash and cash equivalents at beginning of year 29,763,483 603,247 Cash and cash equivalents at end of year $ 28,630,404 $ 654,071 Classified as: Current assets $ 14,760,597 $ 183,390 Restricted assets 13,869,807 470,681 Totals $ 28,630,404 $ 654,071 The accompanying notes are an integral part of the financial statements. 36 I I Activities-Enterprise Funds Governmental Activities `I County County Internal Utilities Building Total Service Funds $ 28,212,318 $ 1,736,088 $ 42,741,354 $ 21,545,354 (9,469,003) (428,657) (19,268,527) (18,109,270) (7,263,059) (1,035,613) (9,388,701) (2,470,632) 11,480,256 271,818 14,084,126 965,452 4 - - (7,532) 35,438 35,000 - - (307,604) - (315,136) 70,438 (3,090,000) - (3,625,000) - (2,193,450) - (2,304,531) - 7,775 - 8,901 1,250 (2,773,381) (29,465) (5,535,944) (101,763) (1,620) - (1,620) - 1,626,811 - 1,626,811 - (6,423,865) (29,465) (9,831,383) (100,513) 325,697 12,925 617,504 105,524 325,697 12,925 617,504 105,524 5,382,088 255,278 4,555,111 1,040,901 60,933,196 3,980,050 95,279,976 30,926,594 ( $ 66,315,284 $ 4,235,328 $ 99,835,087 $ 31,967,495 t $ 38,463,042 $ 4,235,328 $ 57,642,357 $ 31,967,495 27,852,242 42,192,730 $ 66,315,284 $ 4,235,328 $ 99,835,087 $ 31,967,495 4 ' Continued 37 Indian River County,Florida Statement of Cash Flows Proprietary Funds f' For the Year Ended September 30,2012 Business-type Activities- Solid Waste Disposal Golf f' District Course � RECONCILIATION OF OPERATING INCOME(LOSS)TO NET CASH PROVIDED BY(USED IN)OPERATING ACTIVITIES Operating income(loss) $ (1,076,049) $ 905,601 Adjustments to reconcile operating income to net cash provided by(used in)operating activities: i Work in progress reclassified as expense - - Depreciation 842,318 129,906 ' (Increase)Decrease in assets: Accounts receivable (5,526) - Due from other funds (1,515) - Due from other governments - (300) f Inventories - (2,211) I Liens receivable - - Impact fees receivable - - Special assessments receivable - - i9 Prepaid expenses - - Increase(Decrease)in liabilities: Accounts payable 981,683 79,104 Due to other governments - 26 Retainage payable - - Customer deposits (515) - Closure and maintenance costs payable 497,500 - Pollution remediation costs payable - - Unearned revenues - 1,378 Claims payable - - Accrued compensated absences 2,339 (21,687) Total adjustments 2,316,284 186,216 Net cash provided by(used in)operating activities $ 1,240,235 $ 1,091,817 NONCASH CAPITAL AND RELATED FINANCING ACTIVITIES Change in fair value of investments $ (8,175) $ (373) Contributed property,infrastructure and equipment $ - $ - Capital assets purchased through accounts payable $ 773,815 $ - l The accompanying notes are an integral part of the financial statements. G 38 ti i Enterprise Funds Governmental Activities County County Internal Utilities Building Total Service Funds { $ (3,427,350) $ 248,198 $ (3,349,600) $ 793,128 f 458,343 - 458,343 - 14,414,302 3,546 15,390,072 155,207 (37,426) 375 (42,577) (3,759) - (1,515) - (4,280) (4,580) (14,437) (17,547) - (19,758) (8,529) (686,120) - (686,120) - 31,919 - 31,919 - 249,216 249,216 (30,694) - (30,694) (141,768) 239,702 13,136 1,313,625 (12,559) 6,422 3,230 9,678 - (3,446) - (3,446) - 291,341 290,826 - - 497,500 - (56,200) - (56,200) - 1,378 - - - 197,000 52,074 3,333 36,059 1,169 14,907,606 23,620 17,433,726 172,324 $ 11,480,256 $ 271,818 $ 14,084,126 $ 965,452 $ (25,536) $ (1,791) $ (35,875) $ (13,539) $ 926,147 $ - $ 926,147 $ - $ 231,834 $ - $ 1,005,649 $ - 39 �f 1 Indian River County,Florida Statement of Fiduciary Net Position Fiduciary Funds I September 30,2012 Other Postemployment �r Agency Benefits Trust ASSETS Cash and cash equivalents $ 11,550,559 $ - Investments, at fair value: Surplus Funds Trust Fund-Fund B 79,993 - Index funds - 4,748,954 U.S. government securities funds - 5,379,116 Prime money market fund - 705,586 Total assets $ 11,630,552 10,833,656 l� LIABILITIES Accounts payable $ 637,964 - Benefits payable - 1,459,609 Due to other governments 5,114,411 - Other deposits held in escrow 5,878,177 - l Total liabilities $ 11,630,552 1,459,609 NET POSITION Net position held in trust for other postemployment benefits 9,374,047 Total net position $ 9,374,047 I I L I 1! The accompanying notes are an integral part of the financial statements. { 40 Indian River County,Florida Statement of Changes in Fiduciary Net Position Other Postemployment Benefits Trust Fund For the Year Ended September 30,2012 . f ADDITIONS Employer contributions $ 2,948,661 Investment income 930,584 Investment expense (945) Total additions 3,878,300 DEDUCTIONS Benefits paid to participants 1,459,609 Total deductions 1,459,609 Change in net position 2,418,691 Net position-beginning 6,955,356 !I Net position- ending $ 9,374,047 I r! I I f t The accompanying notes are an integral part of the financial statements. i 41 I i� i i 0 •N c 42 i r � Indian River County, Florida Notes To Financial Statements Year Ended September 30, 2012 Note Pae Note Page 1. Summary of Significant Accounting 7. Restricted Cash and Cash Equivalents i Policies.;................................................44 and Investments.................................69 Reporting Entity.................................44 8. Payable from Restricted Assets............69 Measurement Focus and 9. Interfund Balances................................70 Basis of Accounting.....................45 10. Interfund Transfers ..............................71 Basis of Presentation..........................48 11. Due from Other Governments..............72 Assets,Liabilities, Deferred Outflows 12. Accounts Payable.................................72 Or Inflows of Resources, and 13. Long-term Liabilities............................74 Net Position or Fund Balances.....50 Changes in Long-term Liabilities.........74 Cash and Cash Equivalents.............50 Governmental Activities.......................75 i. Investments.....................................50 Annual Debt Service Payments— Allowance for Doubtful Accounts..50 Governmental Activities..............75 Receivables and Payables...............51 Limited General Obligation Bonds 76 Inventories.......................................51 General Obligation Bonds 77 Prepaid Items ..................................51 Spring Training Facility Revenue Other Assets Held For Resale.........51 Bonds...........................................77 Restricted Net Position...................51 Business-type Activities..................80 Capital Assets..................................52 Annual Debt Service Payments— Capitalization of Interest.................53 Business-type Activities..............80 ( Deferred Inflows/Outflows.............53 Recreational Revenue Refunding l Unearned Revenues ........................53 Bonds, Series 2003......................80 Accrued Compensated Absences....53 Water and Sewer Revenue Refunding Obligation for Bond Arbitrage Bonds, Series 2005......................81 Rebate ..........................................54 Water and Sewer Revenue Refunding Landfill Closure Costs ....................54 Bonds, Series 2009......................82 Unamortized Bond Discounts Compensated Absences...................83 and Premiums...............................54 14. Provision for Closure Costs..................84 Capital Contributions......................54 15. Pollution Remediation..........................85 New Accounting Pronouncements..54 16. Pension Plans - 2. Reconciliation of Government-wide Florida Retirement System................86 and Fund Financial Statements..........55 17. Other Postemployment Benefits Plan...88 3. Stewardship, Compliance and 18. Operating Leases..................................91 ! Accountability....................................59 19. Fund Balance........................................93 Budget and Budgetary Accounting.59 20. Fund Balance Deficit............................95 4. Cash and Cash Equivalents...................60 21.Net Position..........................................95 Deposits...........................................60 22. Risk Management.................................96 Accrued Interest..............................60 23. Commitments and Contingencies.........97 Investments.....................................60 Litigation...........................................97 OPEB Trust Investments.................64 Contracts and Other 5. Property Tax Revenues.........................65 Commitments..................... .....97 6. Capital Assets........................................66 Grants ................................................98 i I 43 Indian River County, Florida Notes To Financial Statements Year Ended September 30, 2012 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 �I miles of land with an estimated population of 138,694. The County is governed by the Board of County Commissioners and five elected constitutional officers (Clerk of the Circuit Court and Comptroller, 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 from 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 j reporting. The County applies all GASB Pronouncements in the preparation of the financial statements of the enterprise funds as well as all FASB and AICPA 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 blended component units. 1 44 Indian River County,Florida Notes To Financial Statements Year Ended September 30, 2012 NOTE 1 —SUMMARY OF SIGNIFCANT ACCOUNTING POLICIES—Continued A. Reporting Entity—Continued 1 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. 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 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). 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. 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, deferred outflows/inflows of resources, 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. i 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. 45 ,I Indian River County,Florida Notes To Financial Statements Year Ended September 30, 2012 NOTE 1 —SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES—Continued B. Measurement Focus and Basis of Accounting - Continued 1. Government-wide Financial Statements - Continued I Amounts paid to acquire capital assets are capitalized as assets in the government-wide financial 4 statements, rather than reported as expenditures. 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 l activities. I 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 c accounted for with a separate set of self-balancing accounts that comprise its assets, deferred outflows of resources, liabilities, deferred inflows of resources, fund balance, 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. i' Fund financial statements for the primary government's governmental, proprietary, and fiduciary funds are presented after the government-wide financial statements. These statements display information about major funds individually and nonmajor funds in the aggregate for governmental and enterprise funds. Governmental Funds i ' 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 51 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. 1 46 I Indian River County,Florida Notes To Financial Statements Year Ended September 30, 2012 l NOTE 1 —SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES—Continued I B. Measurement Focus and Basis of Accounting - Continued 2. Fund Financial Statements - Continued Governmental Funds - Continued Under the current financial resources measurement focus, only current assets, deferred outflows of 4 resources, and current liabilities and deferred inflows of resources 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 j decreases (expenditures and other financing uses) in net fund balance. 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 fund balances, 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 j 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 fdelivered. In the fund financial statements, proprietary funds are presented using the economic resources measurement focus. This means that all assets, deferred outflows of resources, liabilities and deferred inflows of resources (whether current or noncurrent) associated with their activity are included on their balance sheets. Proprietary fund type operating statements present increases (revenues) and f decreases (expenses) in total net position. The County applies all GASB Pronouncements in the preparation of the financial statements of the enterprise funds as well as all FASB and AICPA Pronouncements. Proprietary fund operating revenues result from exchange transactions associated with the principal E 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. 47 i Indian River County,Florida Notes To Financial Statements Year Ended September 30, 2012 NOTE 1 - SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES—Continued B. Measurement Focus and Basis of Accounting- Continued Proprietary Funds - Continued 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 funds 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. } C. Basis of Presentation GASB Statement 34 sets forth minimum criteria (percentage of the assets, liabilities, deferred outflows/inflows of resources, 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. Funds are also used for administrative expenditures of monitoring the aforementioned activities. Secondary Roads Construction Fund — The Secondary Roads Construction Fund accounts for the expenditures of road and bridge construction, roadway, bridge and right of way maintenance and drainage, and related administrative costs. Financing is provided by collections of the local option gas tax. Transportation Fund—The Transportation Fund accounts for expenditures incurred for the maintenance i and repair of County roads. Financing is provided by the 5th and 6th cent gas taxes, county gas tax and P transfers from the General Fund. I 48 Indian River County,Florida Notes To Financial Statements Year Ended September 30, 2012 ( NOTE 1 - SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES—Continued I C. Basis of Presentation - Continued 1. Governmental Major Funds - Continued ( Emergency Services District Fund — The Emergency Services District Fund accounts for the expenditures of providing fire protection and advanced life support to the 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. I 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. 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 (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. Contributions are recorded when earned and benefit payments and refunds when incurred within each year. 49 Indian River County, Florida Notes To Financial Statements Year Ended September 30, 2012 NOTE 1 —SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES—Continued C. Basis of Presentation—Continued 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 Position. D. Assets,Liabilities,Deferred Outflows/Inflows of Resources and Net Position or Fund Balances 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. When restricted and unrestricted resources are available, expenses are paid first from restricted resources. 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, 2012, 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, 2012. 50 Indian River County,Florida Notes To Financial Statements Year Ended September 30, 2012 NOTE I —SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES—Continued D. Assets,Liabilities, Deferred Outflows/Inflows of Resources and Net Position or Fund j Balances - Continued 4. Receivables and Payables 4 Activities between funds that are representative of lending/borrowing arrangements outstanding at the end of the fiscal year are referred to as "due to/from other funds". Any residual balances outstanding j between the governmental activities and business-type activities are reported in the government-wide I 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 j 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 Shooting Range and Fleet Internal Service Fund's inventories which are valued using the average cost method of accounting. Inventories of all funds are recorded as f 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. 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. At September 30, 2012, seven homes remain unsold. The County intends to resell these homes in 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 Net Position Certain resources of the County are classified as restricted net position on the statement of net position 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 net position, qualified expenses are considered to be paid first from restricted net position and then from unrestricted net position. Further 1 information on the restrictions can be found in Note 19. 51 Indian River County, Florida Notes To Financial Statements Year Ended September 30, 2012 NOTE 1 —SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES—Continued D. Assets,Liabilities, Deferred Outflows/Inflows of Resources and Net Position or Fund Balances - Continued E 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. 1 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 and Comptroller, Property Appraiser, Supervisor of Elections and Tax Collector, and is accountable for them under Florida Law. The Sheriff is accountable for and thus maintains capital asset records pertaining only to equipment used in his operations. These assets have been combined with the Board's governmental activities capital assets in the statement of net position. 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 52 Indian River County,Florida Notes To Financial Statements Year Ended September 30, 2012 NOTE 1 —SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES—Continued D. Assets,Liabilities,Deferred Outflows/Inflows of Resources and Net Position or Fund j Balances - Continued 10. Capitalization of Interest t i 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. Deferred Outflows/Inflows of Resources In addition to assets, the statement of financial position will sometimes report a separate section for deferred outflows of resources. Deferred outflows of resources represent a consumption of net position that applies to a future period(s) and so will not be recognized as an outflow of resources (expense/expenditure) until then. The County reports the deferred charge on refundings in the amount of$2,875,239 in this category on the government-wide statement of net position. A deferred charge on 1 refundings results from the difference in the carrying value of refunded debt and its reacquisition price. This amount is deferred and amortized over the shorter of the life of the refunded or refunding debt. In addition to liabilities, the statement of financial position may report a separate section for deferred inflows of resources. Deferred inflows of resources represent an acquisition of net position that applies to a future period(s) and so will not be recognized as an inflow of resources (revenue) until that time. The County only has one item, unavailable revenue, which arises under the modified accrual basis of accounting and is reported on the governmental funds balance sheet. The source of the unavailable revenue is a special assessment on road paving. This amount is deferred and recognized as an inflow of resources in the period that the amounts become available. 12. Unearned Revenues Unearned revenues represent revenues, which are available but unearned. At September 30, 2012, the total amount of unearned revenues reported on the statement of net position for the governmental activities is $189,294 and for the business-type activities is $29,652. 13. Accrued Compensated Absences I 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 1 Indian River County, Florida Notes To Financial Statements Year Ended September 30, 2012 NOTE 1 —SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES—Continued f I D. Assets,Liabilities, Deferred Outflows/Inflows of Resources and Net Position or Fund Balances - Continued 14. 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, 2012. 15. Landfill Closure Costs l 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. 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 Position 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 i Effective October 1, 2011, the Board implemented the provisions of GASB Statement No. 63 Financial Reporting of Deferred Outflows of Resources, Deferred Inflows of Resources, and Net Position and GASB Statement No. 65 Items Previously Reported as Assets and Liabilities. 54 Indian River County,Florida Notes To Financial Statements Year Ended September 30, 2012 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 Position "Total fund balances" of the County's governmental funds, $183,843,142 differs from"net position" of governmental activities, $706,789,908, reported in the statement of net position. This difference primarily results from the long-term economic focus of the statement of net position versus the current financial resources focus of the governmental funds 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 j governmental funds. However, the statement of net position included those capital assets among the assets of the County as a whole. ( Cost of capital assets $ 782,367,173 Accumulated depreciation (229,366,627) Net Total $ 553,000,546 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 position. J Balances at September 30, 2012 were: I Bonds payable: Limited General Obligation Bonds, Series 2006 $ (32,385,000) Spring Training Facility Bonds, Series 2001 (11,075,000) Bond premium payable: Limited General Obligation Bonds, Series 2006 (815,714) Medicaid settlement payable (790,434) Pollution remediation payable (2,613,000) Compensated absences (10,953,682 Total $(58,632,8301 Accrued interest Accrued liabilities in the statement of net position differs from the amount reported in governmental funds due to accrued interest on the Limited General Obligation Bonds, Series 2006. (373,065) 55 Indian River County,Florida Notes To Financial Statements Year Ended September 30, 2012 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 Position- Continued Deferred Inflow of Resources—Unavailable Revenue Deferred inflows of resources reported on the statement of net position differ from the amount reported in governmental funds due to special assessments. Governmental fund financial statements report revenues, which are measurable but not available as unavailable revenue, a deferred inflow of resources. However, unavailable revenues in governmental funds are susceptible to full accrual on government-wide financial statements. Unavailable revenues 310 506 Internal service funds Internal service funds are used by management to charge the costs of fleet management, insurance activities, and GIS services to individual funds. The assets and liabilities of the internal service funds are included in governmental activities in the statement of net position because they primarily serve governmental activities of the County. Internal service funds 26,879,571 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. Accrued grant revenues 1 222 541 Accrued interest revenues 5 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 217 816 Net OPEB Obligation The net OPEB obligation asset resulting from contributions in excess of the annual required contribution is not a financial resource; therefore, it is not reported in the fund. OPEB asset 321 681 l Elimination of interfund receivables/payables Interfund receivables and payables in the amount of $860,073 between governmental funds must be eliminated for the statement of net position. 56 i Indian River County, Florida Notes To Financial Statements Year Ended September 30, 2012 NOTE 2 -RECONCILIATION OF GOVERNMENT-WIDE AND FUND FINANCIAL STATEMENTS - Continued ( B. Explanation of Differences Between Governmental Fund Operating Statements and the 1 Statement of Activities ( The "net change in fund balances" for governmental funds, ($13,182,985), differs from the "change in J net position" for governmental activities, $4,303,294 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 position decreases by the amount of depreciation expense charged for the year. Capital outlay $ 27,751,553 1 Depreciation expense (20,004,763) 1 Transfers to business-type activities (40,489) Capital contributions 1,918,753 Loss on assets (948,213) Difference $ 8,676,841 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 position and do not result in an expense in the statement of activities. Bond principal payments made $ 8,060,000 Bond premium payments made 93,225 Medicaid settlement costs (790,434) Pollution remediation costs 83,300 Total $ 7,446,091 I 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 $ 132,097 Net accrued bond interest payable 75,842 Total $ 207,939 57 Indian River County, Florida Notes To Financial Statements Year Ended September 30, 2012 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 $ (228,998) 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. 5 Special assessment revenues $2M,710 Internal service funds operating gain The assets and liabilities of the internal service funds are included in governmental activities in the statement of net position 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 927 862 Accrued grant revenues I 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 $ 262,891 i 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 $ (43,057) Reclassification and Eliminations The governmental funds recognize revenues in the amount of$3,562,046 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$11,630,516 between governmental activities should be eliminated. Capital projects costs in the amount of $8,108,370 must be distributed to the related expenditure functions. 58 l Indian River County,Florida Notes To Financial Statements Year Ended September 30, 2012 NOTE 3 - STEWARDSHIP, COMPLIANCE,AND ACCOUNTABILITY Budgets and Budgetary Accounting EThe 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 Florida Department of Revenue and the Florida Clerks of Court Operations Corporation, a proposed operating budget for the following fiscal year. 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. ti (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. I (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, 2012 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, 2012, the carrying amount of the primary government's deposits was $31,412,676 and the bank balance was $36,557,919. 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. Cash on hand at September 30, 2012 was $25,859. 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, 2012, accrued interest for the County's portfolio totaled $143,142. The remaining accrued interest is reflected in utilities and road paving assessments. C. Investments On August 12, 2008, the County, 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 a formal investment policy in February 2005, and revised the policy in November 2009 and August 2011. The Clerk elected not to adopt a formal investment policy and selected the alternative investment guidelines as provided by Florida Statutes subsection 17, 218.415. 60 1 Indian River County,Florida Notes To Financial Statements Year Ended September 30, 2012 NOTE 4 - CASH AND CASH EQUIVALENTS - Continued C. Investments - Continued As of September 30, 2012,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 $ 97,027,307 0.80 33.96 % N/A l U.S. Agencies:*** Federal Farm Credit Bureau 45,054,504 1.24 15.77 AA+ Federal Home Loan Bank 49,021,782 0.88 17.16 AA+ Federal Home Loan Mortgage 23,001,426 0.59 8.05 AA+ Federal National Mortgage Assoc. 10,991,812 0.55 3.85 AA+ 1 Other Fixed Rate Investments: Florida PRIME (Formerly Fund A) 161,276 0.08 0.06 AAAin Fund B Surplus Funds Trust Fund 572,104 4.08 0.20 Not Rated Florida Local Government AAAf and Investment Trust Fund 10,442,551 0.08 3.66 S-1** Other Market Rate Investments: Regions Bank Money Market 13,210,015 0.08 4.62 N/A Suntrust Bank NOW Account 13,579,733 0.08 4.75 N/A Florida Trust Day to Day Fund 16,669,554 0.08 5.84 AAAm Certificate of Deposit 251,043 1.84 0.09 N/A Certificate of Deposit 254,413 1.00 0.09 N/A W&S Sinking Fund Reserve: U.S. Treasuries 5,410,103 1.03 1.89 N/A Fidelity Institutional Money Market 22,562 0.08 0.01 AAAm Total Fair Value $ 285,670,185 100.00 % Weighted Average Maturity of Investments 0.73 * Ratings based upon Standard and Poor's ** 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 1 Indian River County, Florida Notes To Financial Statements Year Ended September 30, 2012 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 S State Board of Administration. I At September 30, 2012, the County had $602,869 invested in Fund B Surplus Funds Trust Fund (Fund + B), a fluctuating net asset value pool. The State Board of Administration (SBA) determined that Fund f B did not meet the requirements of a SEC 2a7-like fund; therefore, a fair value factor (total net asset value of Fund B divided by total participant balances) was provided for reporting the value of the County's participation in Fund B at fiscal year-end. This resulted in a negative adjustment of 5.1% of the portfolio balance, or $30,765. Consequently, the net investment in Fund B is reported at $572,104. 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 24 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 Funds; 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, 2012 NOTE 4 - CASH AND CASH EQUIVALENTS - Continued C. Investments - Continued Credit Risks - Continued 7. Securities and Exchange .Commission registered money market funds with the highest credit quality rating from a nationally recognized rating agency; 8. Repurchase agreements with a term of one year or less collateralized by direct obligations of the United States Government which have maturities of three (3) years or less and a market value 103% or more of the repurchase amount. Currently, Fund B participants are permitted to withdraw scheduled amounts as assets become liquid. Full realization of the principal value of Fund B assets is uncertain and dependent upon the collateralized securities underlying each holding and is contingent upon future market conditions. t Concentration Risk The Indian River County Board of County Commissioners and the Tax Collector follow their own l investment policies. Both policies have established asset allocation and issuer limits to reduce concentration of credit risk. Their investments are stated at fair value. ,I 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 (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's cash and 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 50% Securities & Exchange Commission Money Funds 25% Bank Super NOW Accounts 95% Bank Repo Agreements 50% United States Government Agencies 25% The Clerk's investment in the Florida Trust Day to Day Fund of $4.205 million, the Tax Collector's investment of $25,248, and the Board's investment of $12.439 million have a combined total of $16.670 million. f 63 Indian River County,Florida Notes To Financial Statements Year Ended September 30, 2012 NOTE 4 - CASH AND CASH EQUIVALENTS - Continued C. Investments - Continued Custodial Credit Risk The Board's investment policy pursuant to Section 218.415 (18), Florida Statutes requires securities to be registered and shall be held with a third party custodian "and all securities purchased by, and all collateral obtained by, the 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, 2012, the County's investment portfolio in U.S. Treasuries, U.S. Agencies, and money market funds, was held by The Bank of New York/Mellon. Additional investments include the following: the SunTrust NOW account, the Regions Bank Money Markets, CenterState Bank certificates of deposit, the Florida Local Government Investment Trust (held by the Bank of New York/Mellon) and the Florida Trust Day to Day Fund(held by UMB Bank). D. OPER Trust Investments Funds are held in the name of the Indian River County OPEB Trust (OPEB Trust), an irrevocable trust, { by a third party custodian, Bank of New York/Mellon. The investments are reported at fair value based 1 upon market-close price on the last business day of each month. The County approved a separate investment policy for the OPEB Trust assets on February 3, 2009 (last amended on April 6, 2010). 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 l 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. i I 64 Indian River County,Florida Notes To Financial Statements Year Ended September 30, 2012 NOTE 4 - CASH AND CASH EQUIVALENTS - Continued D. OPEB Trust Investments - Continued l The contribution of$2.96 million for the year ended September 30, 2012 was invested in the various j funds listed below. As of September 30, 2012,the OPEB Trust had the following investments: Weighted ( Average Maturity Portfolio Credit Investment Type Fair Value InYears Percentage Risks* Short-Term Portion: 1 Fidelity Treasury Money Market $ 1,493,663 0.15 13.79 % AAAm Long-Term Portion: Vanguard 500 Index 2,105,515 N/A 19.43 N/A Vanguard All World Ex-US 1,948,813 N/A 17.99 N/A Vanguard Mid Cap Index 466,038 N/A 4.30 N/A Vanguard Small Cap Index 228,588 N/A 2.11 N/A Vanguard Short-Term Treasury 2,179,647 2.20 20.12 AA+ Vanguard Intermediate Treasury 1,500,241 5.50 13.85 AA+ Vanguard Prime Money Market 705,586 0.16 6.51 A-1 Vanguard Federal Money Market 205,565 0.16 1.90 A-1 Total Fair Value $ 10,833,656 100.00 % * Ratings based upon Standard and Poor's NOTE 5 -PROPERTY TAX REVENUES Taxable values for all property are established as of January 1, which is the date of lien, for the fiscal year starting October 1. Property tax revenues recognized for the 2011-2012 fiscal year were levied in October 2011. 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. I 65 r Indian River County, Florida Notes To Financial Statements Year Ended September 30, 2012 NOTE 6 - CAPITAL ASSETS A. Governmental Activities i Primary Government Beginning Ending t Governmental activities: Balance Additions Deletions Balance II Capital assets,not being depreciated: Land $ 138,388,559$ 1,295,487$ (50,796)$ 139,633,250 Construction in progress 44,026,126 21,545,261 (37,446,190) 28,125,197 Right-of-way 53,740,521 2,045,707 (1,067,626) 54,718,602 l Intangibles 554,456 22,877 - 577,333 l Infrastructure 3,575,067 - - 3,575,067 Total capital assets,not being depreciated 240,284,729 24,909,332 (38,564,612) 226,629,449 Capital assets,being depreciated: Buildings and improvements 187,177,188 7,485,489 (167,323) 194,495,354 Equipment 59,098,399 4,717,316 (5,051,209) 58,764,506 Intangibles 2,883,863 669,256 (102,351) 3,450,768 Infrastructure 268,262,989 31,884,041 - 300,147,030 Total capital assets,being depreciated 517,422,439 44,756,102 (5,320,883) 556,857,658 Less accumulated depreciation for: Buildings and improvements (40,396,475) (5,269,277) 150,224 (45,515,528) Equipment (31,616,904) (3,708,795) 2,881,440 (32,444,259) Intangibles (2,168,062) (256,078) 102,351 (2,321,789) Infrastructure (138,796,487) (11,056,407) - (149,852,894) Total accumulated depreciation (212,977,928) (20,290,557) 3,134,015 (230,134,470) Total capital assets,being depreciated,net 304,444,511 24,465,545 (2,186,868)_ 326,723,188 Governmental activities capital assets,net $ 544,729,240$ 49,374,877$ (40,751,480)$ 553,352,637 The beginning balance reported for accumulated depreciation for the buildings and improvements was increased by $1,347,429 and the beginning balance for equipment was decreased by $1,347,429 to reflect the reclassification of a capital asset from equipment to improvement. 66 f Indian River County,Florida Notes To Financial Statements lI Year Ended September 30, 2012 ( 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 $ 3,122,120 Public safety 2,390,586 Physical environment 592,849 Transportation 6,513,763 Economic environment 922 j Human service 139,558 Culture/recreation 7X5,635 Court related 59,917 ( Capital assets held by the government's internal service funds are charged to the various functions based on their usage of the assets 155,207 Total depreciation expense—governmental activities $ 20,290,557 1 1. I i I l I 67 Indian River County,Florida Notes To Financial Statements Year Ended September 30, 2012 NOTE 6 - CAPITAL ASSETS—Continued B. Business-type Activities Primary Government Beginning Ending Business-type activities: Balance Additions Deletions Balance Capital assets,not being depreciated: Land $ 20,530,432$ 755,578 $ -$ 21,286,010 l) Intangibles 1,388,379 42,733 - 1,431,112 Construction in progress 10,340,138 4,904,009 (8,709,047) 6,535,100 Total capital assets,not being depreciated 32,258,949 5,702,320 (8,709,047) 29,252,222 Capital assets,being depreciated: Buildings,distribution systems,&improvements 412,799,300 8,606,837 (1,194,636) 420,211,501 Intangibles 900,367 6,980 - 907,347 Equipment 14,348,378 316,148 (197,144) 14,467,382 Total capital assets,being depreciated 428,048,045 8,929,965 (1,391,780) 435,586,230 Less accumulated depreciation for: Buildings,distribution systems, &improvements (180,309,133) (14,717,296) 870,445 (194,155,984) l Intangibles (423,473) (69,298) - (492,771) Equipment (12,438,956) (603,478) 173,596 (12,868,838) Total accumulated depreciation (193,171,562) (15,390,072) 1,044,041 (207,517,593) Total capital assets,being depreciated,net 234,876,483 (6,460,107) (347,739) 228,068,637 Business-type activities capital assets,net $ 267,135,432$ (757,787)$ (9,056,786)$ 257,320,859 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 $ 842,318 Golf Course 129,906 County Utilities 14,414,302 County Building 3,546 Total depreciation expense—business-type activities 15,390.072 The beginning balance reported for accumulated depreciation for the intangibles was increased by $17,734 and the beginning balance for equipment was decreased by $17,734 to reflect the reclassification of capital assets from equipment to improvement. I 68 Indian River County,Florida Notes To Financial Statements Year Ended September 30, 2012 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 Disposal Golf County District Course Utilities Total Sinking funds $ - $ 470,681 $ 6,176,994 $ 6,647,675 Renewal and replacement 3,229,445 - 3,485,928 6,715,373 Customer deposits 126,626 2,769,128 2,895,754 Capital construction - - 15,420,192 15,420,192 Closure and maintenance costs 10,513,736 - - 10,513,736 Total $ 13,869,807 $ 470,681 $ 27,852,242 $ 42,192,730 Cash totaling $4,940,591 is reported as restricted on the Statement of Net Position for governmental activities. These funds are restricted for current liabilities such as retainage payable, accrued interest payable, and the current year portion of bonds payable. NOTE 8 -PAYABLE FROM RESTRICTED ASSETS Liabilities payable from the County's business-type activities restricted assets are as follows: Solid Waste Disposal Golf County District Course Utilities Total Accounts payable $ - $ - $ 59,013 $ 59,013 Retainage payable = - 35,364 35,364 Accrued interest payable 6,931 173,413 180,344 Customer deposits 126,626 - 2,769,128 2,895,754 f Bonds payable (current) - 555,000 3,205,000 3,760,000 Closure and maintenance costs payable 10,513,736 - - 10,513,736 Total $ 10,640,362 $ 561,931 $ 6,241,918 $ 17,444,211 69 f Indian River County,Florida Notes To Financial Statements Year Ended September 30, 2012 NOTE 9 -INTERFUND BALANCES Interfund balances at September 30,2012, consisted of the following: Receivable Fund Payable Fund Amount f General Fund Nonmajor Governmental Funds $ 219,500 General Fund Golf Course Enterprise Fund 54,204 General Fund Fleet Internal Service Fund 225,000 $ 498,704 In October 2010, the General Fund loaned $ 333,050 to the Golf Course Fund to purchase new golf carts. The amount reported as due from the Golf Course Fund is the current portion of the scheduled payments due to the General Fund in fiscal year 2013. The remaining amount due from the Golf Course Fund is reported as an interfund advance. The amounts due from the Fleet Internal Service Fund and the Nonmajor Governmental Funds represent short-term cash loans that will be repaid within the l next twelve months. l Receivable Fund Payable Fund Amount l Major Governmental Fund: l Emergency Services District Fund General Fund $ 239,268 Major Enterprise Fund: Solid Waste Disposal District Fund General Fund $ 98,365 Nonmajor Governmental Funds: Land Acquisition Bonds Fund General Fund $ 74,417 Street Lighting Districts Fund General Fund 2,317 Vero Lake Estates Fund General Fund 1,193 East Gifford Stormwater Fund General Fund 13 Total Nonmajor Governmental Funds $ 77,940 Total: $ 415,573 Amounts due from the General Fund represent excess fees and payments of the constitutional officers remitted to various funds subsequent to September 30, 2012. Interfund advances at September 30,2012, consisted of the following: Receivable Fund Payable Fund Amount l Secondary Roads Construction Fund Golf Course Fund $ 255,000 General Fund Golf Course Fund 188,416 $ 443,416 These amounts are considered long-term advances between major funds expected to be paid over the course of several years. These amounts have been presented as nonspendable on the General and Secondary Roads Construction Funds balance sheets. 70 Indian River County, Florida ` Notes To Financial Statements Year Ended September 30, 2012 NOTE 10 - INTERFUND TRANSFERS Interfund transfers for the year ended September 30, 2012, consisted of the following: jTransfers In: Nonmajor General Transportation Governmental Internal Service (I Fund Fund Funds Fund Total Transfers Out: General Fund $ - $ 7,499,582 $ 3,164,129 $ 35,438 $ 10,699,149 Impact Fees Fund - - 100,000 - 100,000 Emergency Services District Fund 379,401 - - - 379,401 Nonmajor Governmental - - Funds 313,629 130,805 444,434 ( Golf Course Fund 7,532 - - - 7,532 Total $ 700,562 $ 7,499,582 $ 3,394,934 $ 35,438 $ 11,630,516 Transfers are used for the following purposes: 1) use unrestricted general fund revenues to finance i transportation activities which must be accounted for in a special revenue fund, 2) use unrestricted l general fund revenues for beach restoration activities which must be accounted for in another fund, 3) provide matching funds for grants, 4) move revenues from the fund that state law requires to collect them to the fund that state law requires to expend them, 5)use unrestricted general fund revenues to pay y off a bond issue, 6) reimburse the general fund for a golf course server, and 7) use unrestricted general fund revenues to offset a portion of salaries and benefits expenses for an employee accounted for in the health insurance fund. I i 71 Indian River County,Florida Notes To Financial Statements Year Ended September 30, 2012 NOTE 11—DUE FROM OTHER GOVERNMENTS Governmental Funds On November 18, 2008, the Board entered into a locally funded agreement with the Florida Department f of Transportation (FDOT) to advance the six-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 Two will be in ten quarterly installments over a three-year period which began in 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. Optional Sales l Tax Fund Segment Two Amount Advance Funded $ 14,429,754 Less: Reimbursements received as of 9/30/2012 (3,000,000) Balance Due from FDOT SR60 Agreement 11,429,754 Additional Funds Due from other governments 1,226,405 Total Due from other governments $ 12,656,159 NOTE 12—ACCOUNTS PAYABLE Payables Payables at September 30,2012,were as follows: f Salaries and Total Governmental Activities: Vendors Benefits Payables General $ 1,518,079 $ 1,202,042 $ 2,720,121 Impact Fees 1,569,237 280 1,569,517 Secondary Roads Construction 408,482 807 409,289 Transportation 204,782 21,904 226,686 Emergency Services 109,067 62,760 171,827 Optional Sales Tax 614,954 - 614,954 Other governmental 708,587 14,169 722,756 Total Governmental Activities 5.133.188 1—i.301.962 6.435.150 Business-Type Activities: Payable from current assets: Solid Waste $ 1,971,588 $ 1,688 $ 1,973,276 Golf Course 137,825 1,503 139,328 Utilities 637,379 23,242 660,621 Building 16,588 3,375 19,963 Payable from restricted assets: Utilities 59,013 - 59,013 Total Business-Type Activities 2.822.393 $ 29.808 2.852.201 72 Indian River County,Florida Notes To Financial Statements Year Ended September 30, 2012 NOTE 12—ACCOUNTS PAYABLE- Continued The County has not engaged in any short-term debt activity during fiscal year 2012 other than that listed in Note 9. Due To Other Governments —Governmental Activities `IOn August 21 2012 the County approved a 5-year payment planagreement with the State of Florida to pay back $790,434 in disputed Medicaid billings. Monthly payments began on October 5, 2012. The County recorded these payments as a liability, Due to Other Governments, in the government-wide Statement of Net Position at September 30, 2012. 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, 2012, 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, 2012 NOTE 13 -LONG-TERM LIABILITIES A. Changes in Long-Term Liabilities Long-term liability activity for the year ended September 30,2012,was as follows: Due Beginning Ending Within Balance Additions Retirements Balance One Year fI Governmental Activities: Bonds payable: Limited General ObligationBonds- $ 35,385,000 $ $ 3,000,000 $ 32,385,000 $ 3,120,000 Series 2006 General Obligation Bonds—Series 2001 4,430,000 4,430,000 - - Spring Training Facility Revenue Bonds- (I Series 2001 11,705,000 630,000 11,075,000 655,000 Subtotal 51,520,000 8,060,000 43,460,000 3,775,000 Add:Unamortized bonds premium 908,939 - 93,225 815,714 - Total bonds payable 52,428,939 8,153,225 44,275,714 3,775,000 Other liabilities: Pollution remediation 2,569,200 43,800 - 2,613,000 137,003 Claims payable 7,877,000 13,967,831 13,770,831 8,074,000 2,197,855 Compensated absences 10,768,485 7,170,075 6,939,908 10,998,652 6,532,620 Total other liabilities 21,214,685 21,181,706 20,710,739 21,685,652 8,867,478 Governmental activities long-term liabilities $ 73,643,624 $ 21,181,706 $ 28,863,964 $ 65,961,366 $ 12,642,478 Business-type Activities: Bonds payable: Recreational Refunding Revenue Bonds- Series 2003 $ 2,655,000 $ - $ 535,000 $ 2,120,000 $ 555,000 Water&Sewer Refunding Revenue Bonds- Series 2005 20,490,000 - 1,480,000 19,010,000 1,530,000 Series 2009 26,370,000 - 1,610,000 24,760,000 1,675,000 Subtotal 49,515,000 - 3,625,000 45,890,000 3,760,000 Add:Unamortized bonds premium 2,929,603 - 236,905 2,692,698 - Less:Unamortized bonds discount22,757 ( ) (4,628) (18,129) - Total bonds payable 52,421,846 - 3,857,277 48,564,569 3,760,000 Other liabilities: Landfill closure and maintenance costs 10,016,236 497,500 - 10,513,736 - Pollution remediation 65,000 - 56,200 8,800 2,510 Compensated absences 821,078 712,995 676,936 857,137 644,945 Total other liabilities 10,902,314 1,210,495 733,136 11,379,673 647,455 Business-type activities long-term liabilities $ 63,324,160 $ 1,210,495 $ 4,590,413 $ 59,944,242 $ 4,407,455 74 I Indian River County,Florida Notes To Financial Statements Year Ended September 30, 2012 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, 2012, are as follows: Fiscal Year Limited General Spring Training Facility Ending Obligation Bonds Revenue Bonds ! September 30 Series 2006 Series 2001 I Principal Interest Principal Interest 2013 $ 3,120,000 $ 1,492,263 $ 655,000 $ 566,333 f2014 3,255,000 1,367,463 685,000 537,513 2015 3,390,000 1,204,712 725,000 501,550 2016 3,545,000 1,035,212 760,000 463,487 2017 3,705,000 893,413 795,000 423,587 2018-2022 15,370,000 1,774,350 3,945,000 1,443,575 2023-2027 - - 1,780,000 708,250 2028-2031 - - 1,730,000 218,750 Total 32,385,000 7,767,413 11,075,000 4,863,045 Less: Current portion 3,120,000 - 655,000 - Add: Unamortized bond premium 815,714 - - - Total $ 30,080,714 $ 7,767,413 $ 10,420,000 $ 4,863,045 75 Indian River County,Florida Notes To Financial Statements Year Ended September 30, 2012 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 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, protect, or enhance such property. 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, 2012, Limited General Obligation Bonds consisted of the following: Interest Outstanding at Rates and September 30, Description Date Maturity Issue 2012 Limited General Obligation 4.00%-5.00% Bonds, Series 2006 1/1 and 7/1 2021 $ 48,600,000 $ 32,385,000 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. L 76 Indian River County,Florida Notes To Financial Statements Year Ended September 30, 2012 NOTE 13 -LONG-TERM LIABILITIES - Continued B. Primary Government- Continued General Obligation Bonds (GOB) Purpose — On November 2, 1992, County voters approved a bond referendum authorizing a total of $26,000,000 aggregate principal amount of general obligation bonds, in one or more series, to acquire environmentally sensitive lands, together with the necessary restoration, remediation, and reclamation activities to preserve and enhance such property. On November 29, 2001, the County issued the second series of GOBs in the amount of$11,000,000. The remaining outstanding principal balance of$3,620,000 was called early on July 1, 2012. 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 were used to pay the cost of issuance of the bonds, including the premiums for guaranty insurance. The last installment of these GOBS was paid on July 1, 2010. Sig Training Facility 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 currently known as "Vero Beach Sports Village (formerly 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. I i 77 f( l Indian River County,Florida Notes To Financial Statements Year Ended September 30, 2012 NOTE 13 -LONG-TERM LIABILITIES - Continued B. 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 I 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, l 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 and are listed on Schedule 27 in the statistical section. 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$1,223,432 represent seventeen percent of total pledged revenues. All three revenue sources totaled $7,276,317 for the current fiscal year. The County applied f 100% of the first two pledged revenue sources and five percent of the Half-Cent Sales Tax to the debt service payments. The total principal and interest remaining to be paid on the bonds is $15,938,045. Bonds Issued - At September 30, 2012, Spring Training Facility Revenue Bonds consisted of the following: Interest Outstanding at Rates and September 30, Description Date Maturity Issue 2012 Spring Training Facility Revenue 3.30%-5.25% Bonds, Series 2001 4/1 and 10/1 2031 $ 16,810,000 11,075,000 Optional Redemption - The Series 2001 bonds maturing on or after April 1, 2012, were 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. 78 i Indian River County,Florida L Notes To Financial Statements Year Ended September 30, 2012 NOTE 13 -LONG-TERM LIABILITIES - Continued I B. Primary Government- Continued Spring TrainingFacility 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: I Term Bonds due April 1, 2015 Date Principal Amount April 1, 2014 $ 685,000 iApril 1, 2015 725,000 Term Bonds due April 1, 2017 IDate Principal Amount April 1, 2016 $ 760,000 April 1, 2017 795,000 ITerm 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 E 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 I April 1, 2030 455,000 April 1, 2031 435,000 i i 79 i Indian River County,Florida Notes To Financial Statements Year Ended September 30, 2012 NOTE 13 - LONG-TERM LIABILITIES - Continued B. Primary Government- Continued Business-type Activities Annual Debt Service Payments—Business-type Activities ti f The annual debt service payments for bonds outstanding at September 30, 2012 are as follows: Fiscal Year Recreational Water and Sewer Water and Sewer Ending Revenue Refunding Revenue Refunding Revenue Refunding September 30 Bonds Series 2003 Bonds Series 2005 Bonds Series 2009 Principal Interest Principal Interest Principal Interest 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 385,000 15,881 1,750,000 652,950 1,905,000 976,250 ` 2017 - - 1,840,000 565,450 2,000,000 881,000 2018-2022 - - 10,615,000 1,405,250 11,600,000 2,801,250 2023-2024 - - - - 4,020,000 268,000 Total 2,120,000 201,287 19,010,000 5,037,900 24,760,000 8,334,100 Less: Current portion 555,000 - 1,530,000 - 1,675,000 - Unamortized bond discount 18,129 - - - - - Add: Unamortized bond premium - - 610,413 - 2,082,285 - Total $ 1,546,871 $ 201,287 $ 18,090,413 $ 5,037,900 $ 25,167,285 $8,334,100 l 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. 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 and is amortized over the life of the bonds. The unamortized balance of the deferred amount on the refunding at September 30, 2012 is $107,215 and is reflected as a deferred outflow of resources on the Statement of Net Position. 80 I Indian River County,Florida Notes To Financial Statements Year Ended September 30, 2012 NOTE 13 -LONG-TERM LIABILITIES - Continued B. Primary Government- Continued Recreational (Golf Course) Revenue Refunding Bonds, Series 2003 - Continued 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. Refer to Schedule 26 of the statistical section for historical data on the pledged revenues. l The financial strength of our municipal bond insurer, AMBAC, was downgraded to Baal in November 2008. 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, $417,500, was cash funded. The current principal and interest payments of$637,964 represent sixty-one percent of net revenues of $1,039,595 of the golf course. The total principal and interest remaining to be paid on the bonds is $2,321,287. All three pledged revenue sources totaled $2,004,997 for the current fiscal year. The County did not utilize the second and third revenue sources toward the current year principal and interest payments. Rate Covenant—Net revenues shall be sufficient to pay 100% of reserve and current year principal and interest requirements. I Bonds Issued-At September 30, 2012,the revenue bonds consisted of the following: Outstanding at Interest Rates September 30, Description and Date Maturity Issue 2012 2003 Recreational Revenue 2.00—4.125% 9/1/16 $ 6,455,000 2,120,000 Refunding Bonds 3/1 and 9/1 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 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 pard 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. 81 i Indian River County, Florida Notes To Financial Statements Year Ended September 30, 2012 NOTE 13 -LONG-TERM LIABILITIES - Continued B. Primary Government- Continued Water and Sewer Revenue Refunding Bonds, Series 2005 - Continued i 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, which included shortening the term of the bonds by four years and lowering average annual debt service by $242,000, was $2,944,661 and is amortized over the life of the bonds. The unamortized balance of the deferred amount on the refunding at September 30, 2012 is $1,684,686 and is reflected as a deferred outflow of resources on the Statement of Net Position. Pledge of Revenues - The revenue bonds are collateralized, for the remaining term of the bonds, by a 1 pledge of all net revenues derived from the operation of the system, certain surcharges, and special assessments. Annual principal and interest payments of$2,405,250 represent approximately eighteen percent of net revenues of$13,217,926 of the utility system. The total principal and interest remaining to be paid on the bonds is $24,047,900. Rate Covenant—Net revenues shall be sufficient to pay 100% of the reserve account requirement and I 120% of the current year's principal and interest payment. Bonds Issued-At September 30, 2012,the revenue bonds consisted of the following: Interest Outstanding at Rates and September 30, Description Date Maturity Issue 2012 Water and Sewer 3-5% Revenue Refunding Bonds, 3/1 and 9/1 2022 $ 27,675,000 19,010,000 Series 2005 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 p J after September 1 2015 are subject to redemption by the County on or after September 1, 2015, in whole or in part, at par, plus accrued interest to date of redemption. Water and Sewer Revenue Refunding Bonds, Series 2009 Purpose - The Series 2009 bonds were issued to refund and redeem on September 11, 2009, $28,270,000 of the County's outstanding Water and Sewer Revenue Bonds, Series 1993A. The refunding excluded debt service payments due September 1,2010 and 2011,which were consequently paid at their respective maturity date. 82 Indian River County, Florida Notes To Financial Statements Year Ended September 30, 2012 ( NOTE 13 -LONG-TERM LIABILITIES - Continued B. Primary Government- Continued Water and Sewer Revenue Refunding Bonds, Series 2009 - Continued 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, which lowered average annual debt service by $126,000, was $1,368,427 and is amortized over the life of the bonds. The unamortized balance of the ( deferred amount on the refunding at September 30, 2012 is $1,083,338 and is reflected as a deferred outflow of resources on the Statement of Net Position. 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. I The interest payments of $2,878,200 represent approximately twenty two percent of net revenues of $13,217,926 of the utility system. The total principal and interest remaining to be paid on the bonds is $33,094,100. 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, 2012,the revenue bonds consisted of the following: Outstanding at Interest Rates September 30, Description and Date Maturity Issue 2012 Water and Sewer 4-5% ! Revenue Refunding Bonds, 3/1 and 9/1 2024 $ 26,370,00024.760,000 Series 2009 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. C. Compensated Absences For the governmental activities compensated absences liability, the general fund normally liquidates 71 percent, and the Transportation and Emergency Services District funds normally liquidate 6 percent and 9 percent, respectively. The remaining 14 percent is liquidated by the other governmental and internal service funds. I 83 Indian River County,Florida Notes To Financial Statements Year Ended September 30, 2012 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 $3.6 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: l Capacity Estimated Used Closing Amount Closure Costs f Class I - Segments I and II 58% 2030 $ 6,801,947 Construction and Demolition- Cell I 89% 2017 1,118,866 Post-closure Costs Class I - Segments I and II N/A N/A 2,413,435 Construction and Demolition- Cell I N/A N/A 179,488 Total account balance at 9/30/12: $ 10,513,736 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 expenseg. At September 30, 2012, $10,442,551 was on deposit at the Florida Local Government Investment Trust and$71,185 was on deposit in the County's Operating account. A summary of changes in the landfill closure liability account is as follows: Balance Balance 10/01/11 Deposits Withdrawals 09/30/12 Closure and long-term care costs 10.016.236 $ 497,500 $ - IL0,513.736 Of the $10,513,736 liability for closure and long-term care costs, management estimates that no funds will be due and payable within one year. 84 i Indian River County,Florida Notes To Financial Statements Year Ended September 30, 2012 NOTE 15—POLLUTION REMEDIATION In accordance with GASB Statement 49, Accounting and Financial Reporting for Pollution 4 Remediation Obligations, a consultant evaluated five sites to assess pollution remediation liabilities. The consultant calculated for each site an expected value (EV) estimate for pollution remediation based on three plausible mitigation scenarios. An obligating event occurred at each of the following five sites requiring the County (using the consultant's services) to attempt to accrue a liability for pollution remediation. The liability totaled $2,621,800 at September 30, 2012 for all five sites. The pollution remediation obligation is an estimate and subject to changes resulting from price increases and reductions, technology, and changes in applicable laws or regulations. There are no estimated recoveries that would reduce the liability. Governmental Activities: 1) South Gifford Road closed landfill — The nature of the pollution remediation obligation is chlorinated solvent contamination. The consultant will conduct monitoring, bioremediation and reporting with the Florida Department of Environmental Protection (FDEP). The amount of the j estimated year end liability is $2,425,000 and will be paid from the Optional Sales Tax Fund. 2) Old Administration Building — The nature of the pollution remediation obligation is closed underground storage tank contamination. The consultant will conduct monitoring and reporting 1 with the FDEP. The amount of the estimated year end liability is $32,000 and will be paid from the General Fund. i 3) Cattle dip site — The nature of the pollution remediation obligation is arsenic contamination. The consultant will conduct monitoring and assessment. The amount of the estimated year end liability is $73,200 and will be paid from the Impact Fees Fund. 4) Shadowbrook Estates — The nature of the pollution remediation obligation is arsenic and lead contamination in two areas of a former citrus grove. The consultant will conduct the additional assessment and natural attenuation monitoring. The amount of the estimated year end liability is $82,800 and will be paid from a nonmajor fund,the Land Acquisition Fund. Total Governmental Activities liability: 2 613 000 Business-type Activities: 5) North County Reverse Osmosis plant — The nature of the pollution remediation obligation is groundwater inorganic contamination. The consultant will conduct monitoring and assessment. The amount of the estimated year end liability is $8,800 and will be paid from the County Utilities Fund. Total Business-type Activities liability: 8 800 I 85 it Indian River County,Florida Notes To Financial Statements Year Ended September 30,2012 NOTE 15—POLLUTION REMEDIATION- Continued Due to the addition of the Shadowbrook Estates site in fiscal year 2012, beginning net position for the governmental activities needed to be restated. The difference between the governmental activities restated beginning net position of$127,100 and the liability of$82,800 was expensed during the current year. Please see Note 21-C for more information regarding the restatement of beginning net position. NOTE 16-PENSION PLANS 11 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. Effective July 1, 2011, the FRS became a contributory plan for all members, except DROP participants, whereby members contribute 3% and employers pay a rate based upon each member's employment class. Employer rates effective as of July 1, 2012 were as follows: regular class 5.18%, senior class 6.30%, special risk 14.90% and elected official class 10.23%. Employees elect participation in either the defined benefit plan (Pension Plan) or the defined contribution plan (Investment Plan). If the employee enrolled in the FRS prior to July 1, 2011, normal retirement is age 62 with 6 years of service or 30 years of service, regardless of age. If the employee enrolled in the FRS on or after July 1, 2011, normal retirement is age 65 with 8 years of service or 33 years of service, regardless of age. Under the Pension Plan, early retirement is available before ! reaching normal retirement age and will be subject to an early-retirement reduction of 5% for each year your age at retirement is under your 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. Participants have access to the full value of their vested account balance when they leave FRS employment, regardless of 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 determined by age, years of service, the average of the highest 5 or 8 fiscal years of pay, membership class and the payment option selected at retirement. 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 and Education Section, P.O. Box 9000, Tallahassee, Florida 32315-9000, or from the website at www.dms.myflorida.com. I 86 1 Indian River County,Florida Notes To Financial Statements Year Ended September 30, 2012 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, 2012, as follows (contribution rates are in agreement with the actuarially determined rates): 10/01/09 07/01/10 07/01/11 07/01/12 to 6/30/10 to 6/30/11 to 6/30/12 to 9/30/12 � Regular Class - Members not qualifying for other classes. 9.85% 10.77% 7.91% 8.18% Senior Management Service Class - Members of senior management who do not elect the optional annuity management program. 13.12% 14.57% 9.27% 9.30% 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% 17.10% 17.90% Special Risk Administrative Support Class - Special risk members who are transferred or freassigned to non-special risk and meet the criteria. 12.55% 13.24% 9.04% 8.91% Elected County Officer's Class - Certain elected county officials. 16.53% 18.64% 14.14% 13.23% Deferred Retirement Option Program- Members who are eligible for normal retirement that have elected to participate i in the deferred retirement option program. 10.91% 12.25% 4.42% 5.44% Contributions to the FRS for the fiscal years ended September 30, 2010, 2011, and 2012, were equal to 14.71%, 14.15%, and 8.64% of the annual covered payroll. Contributions to the FRS for the fiscal years ended September 30, 2010, 2011, and 2012 were $10,736,848, $9,810,332, and $5,845,997 respectively. Employee contributions for the fiscal years ended September 30, 2011 and 2012 were $455,378 and $1,789,315. Both employer and employee contributions were equal to 100% of the required contribution for each year. 87 f Indian River County,Florida Notes To Financial Statements Year Ended September 30,2012 NOTE 17—OTHER POSTEMPLOYMENT BENEFITS PLAN(OPEB) I A. Plan Description On September 23, 2008, the Board of County Commissioners approved resolution number 2008-163, establishing an irrevocable trust (OPEB Trust) to separately identify assets accumulated to pay OPEB benefits for eligible retirees. The OPEB Trust includes the Board of County Commissioners and the five constitutional officers (Clerk of the Circuit Court and Comptroller, Property Appraiser, Sheriff, Supervisor of Elections, and Tax Collector). The resolution also established the Board of County Commissioners as trustees of the OPEB Trust and the authority for the trustees to amend the benefit provisions. The OPEB Trust is a single-employer defined benefit plan (OPEB Plan). The OPEB plan subsidizes (see the chart below) the cost of health care for employees hired prior to February 1, 2006 and their 1 eligible dependents according to the provisions of the substantive plan (the plan as understood by the employer and plan members). Employees hired on or after February 1, 2006, will not be eligible for any subsidy,regardless of the years of service or Medicare eligibility Active participants as well as retirees are subject to the same benefits and rules. Retired employees are permitted to remain covered under the Board'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 retiree has the option to continue with the Board group health plan or elect Medicare Advantage Plan. ! The implicit rate subsidy applies to health and life insurance coverage since the premiums charged are based upon a blending of younger active employees and older retired employees. Health insurance premiums, effective October 1, 2011 range from $198 for Medicare participants to $735 for family coverage. Life insurance is available to retirees at a flat rate of $.20 per $1000 of coverage (to a maximum of$20,000 until the age of 70). After 70, the maximum amount of life insurance is $10,000. The Board subsidizes the cost of the health premiums for each retiree based upon their years of service and employment date (as mentioned above); a 2% discount is given 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 88 Indian River County,Florida Notes To Financial Statements Year Ended September 30, 2012 NOTE 17—OTHER POSTEMPLOYMENT BENEFITS PLAN- Continued A. Plan Description - Continued The OPEB Trust financial statements are reported using the accrual basis of accounting and are included in the Indian River County Comprehensive Annual Financial Report (CAFR). Questions regarding the OPEB plan may be directed to the Finance Director. + At October 1, 2011,the date of the latest actuarial valuation,plan participation consisted of: Active participants 1,428 Retired participants 371 ti Total participants 1,799 I There are two classes of participants at October 1, 2011: 1 Regular and senior management 1,127 Special risk 672 Total participants 1.799 The average employer's contribution was $1,981 per employee, approximately 4.5% of current payroll. Financial statements for the OPEB Trust 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 OPEB Trust investments can be found in Note 4D. ` B. Funding Policy f The Board of County Commissioners, in concert with the OPEB Board of Trustees, has the authority to establish and amend the funding policy of the OPEB Plan. The OPEB Trust is advance funded by the County. For the year ended September 30, 2012, the County contributed $2.96 million to the qualifying OPEB Trust. Plan members receiving benefits contributed $1.5 million, or approximately 51 percent of the total premiums. It is the County's policy to base future OPEB Trust contributions on the annual required contribution (ARC) in subsequent annual actuarial reports. Custodial and individual fund Iadministrative 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 OPEB Trust 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 cost for the current and two preceding years,the amount actually contributed, and the changes in the net obligation. 89 I Indian River County,Florida Notes To Financial Statements Year Ended September 30, 2012 NOTE 17—OTHER POSTEMPLOYMENT BENEFITS PLAN- Continued C. Annual OPEB Cost and Net OPEB Obligation- Continued FY 2011/2012 FY 2010/2011 FY 2009/2010 Annual Required Contribution $ 2,828,452 $ 2,948,682 $ 2,814,435 Interest on Net OPEB Obligation (12,323) (22,381) (7,272) Adjustment to Annual Required Contribution 14,075 23,385 7,779 Annual OPEB Cost(expense) 2,830,204 2,949,686 2,814,942 { Contributions (2,962,301) (2,819,540) (3,030,792) Change in Net OPEB Obligation (132,097) 130,146 (215,850) Net OPEB Obligation—beginning of year (189,584) (319,730) (103,880) Net OPEB Obligation—end of year $ (321,681) $ (189,584) $ (319,730) Percentage of Annual OPEB Cost Contributed 104.67% 95.59% 107.6770 D. Funded Status and Funding Progress ress The Schedule of Funding Progress and Schedule of Employer Contributions, presented as required supplementary information immediately following the County Notes to the Financial Statements (on page 99), presents multi-year trend information regarding liabilities, funding, and payroll. The data also reflects whether the actuarial value of the plan assets is increasing or decreasing over time relative to the actuarial accrued liabilities for benefits. This information includes the current and past two actuarial valuations and five years of funding data. 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. 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 S 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. t 90 Indian River County, Florida Notes To Financial Statements Year Ended September 30, 2012 NOTE 17—OTHER POSTEMPLOYMENT BENEFITS PLAN- Continued E. Actuarial Methods and Assumptions - Continued The actuarial methods are: Actuarial cost method Entry age normal cost method Amortization method Level percent of payroll projected to grow 4%per year f Amortization period (closed) 16 years S Asset valuation method Market Value The actuarial assumptions are: Investment rate of return 6.5% (net administrative expenses) Projected annual salaries increase 4.0%-9.47% (dependent on years of service and age) Healthcare cost trend rate 8.5% (decreasing 1/2% each year&thereafter to the ultimate value of 5.32%) Inflation rate 3% ( NOTE 18 - OPERATING LEASES The County has entered into non-cancelable operating leases, both as lessor and lessee. Lease terms vary from 1 to 99 years. Lease revenues totaled $587,765 and lease expenditures totaled $281,415 for the year ended September 30, 2012. The County also leases other equipment and office facilities as Iboth lessor and lessee on a month-to-month basis. A. Future Minimum Lease Receipts Year Amount 2013 $ 492,658 2014 458,600 2015 471,411 2016 456,234 2017 443,383 2018-2022 2,121,034 2023-2027 1,298,906 2028-2032 721,056 2033-2037 132,600 2038 27,900 Total future minimum lease receipts: 6.623.782 fThe property being leased is included in the statement of net position governmental activities and business-type activities columns and has a cost of $29,060,384 and a carrying value of $20,723,566. Current year depreciation on property being leased was $368,896. 91 Indian River County,Florida Notes To Financial Statements Year Ended September 30, 2012 NOTE 18 - OPERATING LEASES - Continued j B. Future Minimum Lease Payments The following is a schedule of minimum future rentals to be paid by the County for various 1 noncancelable operating leases of office space, park land, and office equipment as of September 30, 2012: Year Amount 2013 $ 261,565 2014 136,872 ' 2015 86,670 2016 32,295 2017 28,162 2018-2022 54,840 2023-2027 7,500 2028-2032 7,500 2033-2037 6,900 2038-2042 4,500 2043-2047 4,500 2048-2052 3,300 2053-2057 3,000 2058-2062 2,400 2063-2067 1,500 2068-2072 1,500 2073-2077 1,500 Total future minimum lease payments: 644 504 i i { 4 92 Indian River County,Florida Notes To Financial Statements Year Ended September 30, 2012 NOTE 19 -FUND BALANCE GASB Statement 54, Fund Balance Reporting and Governmental Funds Type Definitions, 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. A. 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. A Restricted — Use of these resources is based on the constraints imposed externally by creditors, S 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 the approval of a County ordinance by the Board of County Commissioners. This category also includes existing resources on hand to satisfy the obligations that arise from contractual obligations entered into by the Board of County Commissioners. i Assigned — The Board of County Commissioners is the governing body authorized to assign fund balance amounts to be used for specific purposes. Amounts appropriated to eliminate a budgetary deficit in a subsequent year are reported in this category as well. l Unassigned — Residual amounts in the general fund that do not meet any of the other fund balance classifications. B. 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 I Funds: Emergency/Disaster Relief Reserve—A balance of no less than 5% of budgeted operating expenditures Cfor 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. I 93 I`1 Indian River County,Florida Notes To Financial Statements Year Ended September 30, 2012 NOTE 19 -FUND BALANCE—Continued B. 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. 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. At September 30, 2012, reserve amounts for those funds were: Budget Disaster Relief Stabilization Total General Fund $ 5,200,000 $ 5,200,000 $ 10,400,000 Transportation Fund 700,000 700,000 1,400,000 Emergency Services District Fund 1,400,000 1,400,000 2,800,000 Total $ 7,300,000 $ 7,300,000 $ 14,600,000 The General Fund reserves are included in the unassigned fund balance on the balance sheet. Emergency/Disaster Relief and Budget Stabilization Reserve amounts may only be revised by the Board of County Commissioners. I Minimum Fund Balance - The approved fund balance policy dictates the County's attempt to maintain a minimum fund balance in the General, Transportation, and Emergency Services District funds of 20% of budgeted annual operating expenditures. The minimum fund balance level may be revised by the 4 County Administrator or his designee. C. 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 conimitted fund balance, as appropriate,then assigned and finally unassigned fund balances. f 94 I Indian River County,Florida Notes To Financial Statements Year Ended September 30, 2012 ( NOTE 20 -FUND BALANCE DEFICIT fThe following funds had a deficit in fund balance at September 30, 2012: I Fund Deficit Nonmajor Governmental Funds: Metropolitan Planning Organization Fund $ 190,688 Federal/State Grants Fund 5,083 Total Deficit $ 195,771 The deficits for these two funds will be eliminated by grant proceeds in fiscal year 2013. NOTE 21—NET POSITION A. Restricted Net Position The County has established a restriction within the net position section of the proprietary funds for capital projects. Restricted net position at September 30, 2012 consist of the following: Restricted for Capital Projects: County Utilities Fund $ 17,941,773 B. Net Position Restricted by g g Enabling Legislation The government-wide statement of net position for the primary government reports $139,131,001 of restricted net position, of which$82,688,060 is restricted by enabling legislation. C. Restatement of Beginning Net Position In accordance with the requirements of GASB Statement 49, Accounting and Financial Reporting for Pollution Remediation Obligations, beginning net position for governmental activities was restated. Due to the addition of the Shadowbrook Estates site and based on the consultant's report, the } governmental activities' portion of the estimated liability at October 1, 2011 was $127,100; therefore, beginning net position was reduced by that amount. For more information on the County's pollution remediation obligation,please see Note 15. In accordance with the requirements of GASB Statement 65, Items Previously Reported as Assets and Liabilities, beginning net position for the Golf Course and Utilities Funds was restated. The Statement f required the expensing of any outstanding bond issuance costs, which had previously been reported as f an asset and amortized over the life of the bond issue. At October 1, 2011, this results in the reduction of the Golf Course Fund's beginning net position by $49,523 and the reduction of the Utilities Fund's net position by$477,430. 95 I Indian River County,Florida Notes To Financial Statements Year Ended September 30, 2012 NOTE 22 -RISK MANAGEMENT I 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: 04/01/08 to 10/01/08 to 05/01/11 to j 09/30/08 04/30/11 09/30/12 Worker's Compensation $ 300,000 $ 350,000 $ 350,000 General Liability 250,000 250,000 200,000 Auto Liability 250,000 250,000 200,000 Property Damage 500-25,000 250,000 200,000 Error or Omissions 250,000 250,000 200,000 Annual Aggregate 1,000,000 2,000,000 2,000,000 Liquor Liability 1,000,000 1,000,000 1,000,000 The County purchases excess insurance to cover claims in excess of the amounts listed above. There is a 5% deductible per location for property damages arising due to a hurricane under the reinsurance policy. 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. The County has received one reimbursement, for a liability claim in excess of the general liability limit, in the amount of$134,820 in fiscal year 2012. The prior two fiscal years did not incur any excess settlements. 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 f compensation, up to $250,000 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 current and prior two fiscal years. The claims liability of $8,074,000 reported at September 30, 2012, 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, $2,197,855 will be liquidated over the next twelve months. 4I I 96 Indian River County,Florida Notes To Financial Statements Year Ended September 30, 2012 NOTE 22 -RISK MANAGEMENT - Continued General Liability,Property,Worker's Compensation and Medical- Continued Changes in the fund's claim liability amount during the current and prior three fiscal years are as follows: Balance at Claims Balance Fiscal Year and Changes Claim at Fiscal Beginning in Estimates Payments Year End 2008-2009 $ 6,895,000 $ 15,637,406 $ (14,657,406) $ 7,875,000 2009-2010 7,875,000 13,940,099 (13,916,099) 7,899,000 i 2010-2011 7,899,000 12,901,425 (12,923,425) 7,877,000 2011-2012 7,877,000 13,967,831 (13,770,831) 8,074,000 Included in the charges to other funds is an amount to fund future catastrophic losses not actuarially determined and at September 30, 2012, unreserved net position of$24,330,918 has 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, 2012, 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, 2012. In the General Fund, contracts are for janitorial services, beach park landscape and custodial maintenance and external auditing services. In the Special Revenue Funds, contracts are for the construction of Fire Station 13 in the southern part of the County on 4th Street and 43rd Avenue, Oslo Road Widening from 43rd Avenue to 27th Avenue (Phase 11) and from 58th Avenue to 43rd Avenue (Phase III), 66th Avenue Roadway Improvements from 16th Street to 4th Street, 27th Avenue Milling and Resurfacing, as well as a variety of other road paving and drainage projects. In the Capital Projects Fund, contracts are for the South County Regional Park Intergenerational Recreation Facility, PC South Algal Turf Scrubber Nutrient Recovery System and several sidewalk and road improvement projects throughout the County. 97 Indian River County,Florida Notes To Financial Statements Year Ended September 30, 2012 NOTE 23 - COMMITMENTS AND CONTINGENCIES - Continued B. Contracts and Other Commitments - Continued j In the Enterprise Funds, contracts are for Sandridge Golf Club driving range tee renovations, Segment E III Landfill Expansion, Repaving of the Winter Beach, Roseland and Gifford customer convenience centers, West Wabasso gravity sewer system, South County Brine Disposal project and various other water and sewer projects. A summary of these projects at September 30, 2012, is as follows: Remaining Total Total Paid as of Balance at Contract Price September 30, 2012 September 30, 2012 General $ 570, 803 $ (339,750) $ 231,053 Special Revenue 32,783,500 (16,365,467) 16,418,033 Capital Projects 10,110,328 (7,292,557) 2,817,771 S Enterprise 8,107,986 (4,590,047) 3,517,939 Total $ 51,572,617 $ (28,587,821) $ 22,984,796 C. Grants Amounts received or receivable from grantor agencies are subject to audit and adjustment by grantor agencies. If any expenditures are disallowed as a result of these audits, the claims for reimbursement to the grantor agency would become a liability of the County. In the opinion of management, any such adjustments would not be significant. j 1 I 98 Indian River County,Florida Required Supplementary Information For the Year Ended September 30,2012 ( Other Postemployment Benefits Plan i Schedule of Funding Progress 11 UAAL as a Actuarial Actuarial Accrued Percentage of ( Actuarial Value of Liability(AAL)- Unfunded AAL Covered (I Valuation Assets Entry Age (URAL) 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% 10/01/2011 $ 6,955,356 $ 33,877,613 $ 26,922,257 20.53% $ 62,739,616 42.91% *First year of Indian River County Other Postemployment Benefits Trust(IRCOT) Schedule of Employer Contributions I 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) II 9/30/2010 $ 2,814,942 $ 3,030,792 107.67% $ (319,730) 9/30/2011 $ 2,949,686 $ 2,819,540 95.59% $ (189,584) 9/30/2012 $ 2,830,204 $ 2,962,301 104.67% $ (321,681) 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. 99 * ; I ORt04' i 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 I 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 I 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. 1 Drug Abuse- To account for the collection of fines on criminal drug cases. Monies are used for drug prevention and education programs. l 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. l 102 f 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 i 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 j 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 which may be used for improvements to the Indian River 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. l 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 l for computer linkage and modernizing the Clerk of the Circuit Court and Comptroller's 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. CDBG Neighborhood Stabilization Program 3 Grant- To account for the proceeds from the Community Development l Block Neighborhood Stabilization Program 3 Grant. The purpose of this grant is to provide neighborhood stabilization through resale of housing units purchased with the grant funds. l 104 DEBT SERVICE FUNDS I 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. I l 105 I Indian River County,Florida Combining Balance Sheet Nonmajor Governmental Funds September 30,2012 Special Revenue , Section 8 Court Rental Special Law Facilities Assistance Enforcement ASSETS Cash and cash equivalents $ 1,181,842 $ 350,254 $ 242,175 Accounts receivable - - Due from other funds Due from other governments - 529 - Prepaid items - - Other assets held for resale - - Total Assets $ 1,181,842 $ 350,783 $ 242,175 LIABILITIES I Accounts payable $ 25,574 $ 2,233 $ - Retainage payable - - Due to other funds - Unearned revenues Other deposits Total Liabilities 25,574 2,233 - FUND BALANCES Nonspendable: Prepaid items - - Restricted for: Court-related costs and improvements 1,156,268 - - Housing assistance - 348,550 - Law enforcement/public safety - - 242,175 Tourism-related activites - - (f Beach renourishment - - Boating related projects - - Library services - - - Land acquisition - - Stormwater,street lighting,and other special assessments - - - Debt service - - - Sports Village repairs/improvements - - Other purposes - Committed to: Environmental conservation/preservation - - Law enforcement/public safety - - (I Court operations - - - Unassigned - - - Total Fund Balances 1,156,268 348,550 242,175 Total Liabilities and Fund Balances $ 1,181,842 $ 350,783 $ 242,175 C 1 106 fSpecial Revenue Tree State Housing Ordinance Tourist 911 Drug Initiatives Fines Development Surcharge Abuse Partnership I 219,708 $ 439,500 $ 1,042,827 $ 199,640 $ 690,479 1,500 3,628 57,839 6,588 $ 221,208 $ 439,500 $ 1,100,666 $ 206,228 $ 694,107 $ - $ 58,348 $ 26,155 $ 9,069 $ 540 I - - - 58,348 26,155 9,069 540 f - - 693,567 - 1,074,511 _ 381,152 _ 197,159 _ 221,208 - _ _ 221,208 381,152 1,074,511 197,159 693,567 $ 221,208 $ 439,500 $ 1,100,666 $ 206,228 $ 694,107 Continued 107 Indian River County,Florida Combining Balance Sheet Nonmajor Governmental Funds September 30,2012 Special Revenue Metropolitan Multi- Native Uplands Planning Jurisdictional Land Organization Law Enforcement Acquisition ASSETS Cash and cash equivalents $ 120 $ 90,719 $ 837,361 Accounts receivable - Due from other funds Due from other governments - Prepaid items 7,200 - Other assets held for resale - - - 11 Total Assets $ 7,320 $ 90,719 $ 837,361 LIABILITIES Accounts payable $ 40,508 $ - $ - l Retainage payable - Due to other funds 157,500 Unearned revenues - Other deposits Total Liabilities 198,008 - FUND BALANCES Nonspendable: Prepaid items 7,200 Restricted for: Court-related costs and improvements - Housing assistance - ' Law enforcement/public safety - 90,719 Tourism-related activites - - Iy Beach renourishment - Boating related projects - Library services - Land acquisition - Stormwater,street lighting,and other special assessments - - Debt service - - Sports Village repairs/improvements - - - Other purposes - - Committed to: Environmental conservation/preservation - - 837,361 Law enforcement/public safety - - - Court operations - - Unassigned (197,888) - - Total Fund Balances (190,688) 90,719 837,361 Total Liabilities and Fund Balances $ 7,320 $ 90,719 $ 837,361 I 108 i Special Revenue CDBG Florida Disabled Beach Neighborhood Boating Improv. Library Access Restoration Stabilization Pgm Program Bequests Program i $ 6,133,776 $ 165 $ 1,084,470 $ 144,622 $ 62,302 8,030 - 658,000 - _ _ $ 6,141,806 $ 658,165 $ 1,084,470 $ 144,622 $ 62,302 $ 20,624 $ 76,061 $ - $ 132 $ 27,787 - _ _ - 56,000 48,411 132,061 132 - 526,104 _ 6,093,395 _ - - 1,084,470 - _ - _ 144,490 - - - 62,302 6,093,395 526,104 1,084,470 144,490 62,302 $ 6,141,806 $ 658,165 $ 1,084,470 $ 144,622 $ 62,302 Continued 109 Indian River County,Florida Combining Balance Sheet Nonmajor Governmental Funds September 30,2012 Special Revenue Traffic Federal/State Education Land f Grants Program Acquisition ASSETS Cash and cash equivalents $ 917 $ 26,762 $ 314,034 ` Accounts receivable - - - M Due from other funds - Due from other governments 9,571 - Prepaid items - Other assets held for resale - - - it Total Assets $ 10,488 $ 26,762 $ 314,034 LIABILITIES Accounts payable $ 9,571 $ - $ 275 Retainage payable - - - Due to other funds 6,000 Unearned revenues - - - Other deposits - - 55,664 Total Liabilities 15,571 55,939 FUND BALANCES Nonspendable: 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 - - 258,095 Stormwater,street lighting,and other special assessments - - - Debt service - - - Sports Village repairs/improvements - - - Other purposes - 26,762 - Committed to: Environmental conservation/preservation - - - Law enforcement/public safety - - - Court operations - - - Unassigned (5,083) - - Total Fund Balances (5,083) 26,762 258,095 f Total Liabilities and Fund Balances $ 10,488 $ 26,762 $ 314,034 110 I Special Revenue East Vero Beach Clerk Sheriff Gifford Vero Lake Sports Special Special Stormwater Estates Village Reserve Revenue Revenue $ 17,192 $ 1,232,966 $ 658,559 $ 2,335,415 $ 2,002,061 7,422 13 1,193 - _ _ _ - 5,633 11,762 $ 17,205 $ 1,234,159 $ 658,559 $ 2,347,177 $ 2,015,116 $ - $ 915 $ 105,355 $ 8,747 $ 118,450 915 105,355 8,747 118,450 1. - - 11,762 - 2,293,412 - _ - 1,505,098 I 17,205 1,233,244 _ - 553,204 _ - 391,568 33,256 - 17,205 1,233,244 553,204 2,338,430 1,896,666 $ 17,205 $ 1,234,159 $ 658,559 $ 2,347,177 $ 2,015,116 i Continued 111 Indian River County,Florida Combining Balance Sheet Nonmajor Governmental Funds I September 30,2012 Special Revenue Supervisor Street of Elections Lighting CDBG Special Revenue Districts NSP3 Grant ASSETS Cash and cash equivalents $ 9,142 $ 494,573 $ 37,557 (- Accounts receivable - - 56 Due from other funds - 2,317 - Due from other governments - - Prepaid items - Other assets held for resale - - - Total Assets $ 9,142 $ 496,890 $ 37,613 LIABILITIES Accounts payable $ - $ 8,829 $ 8,478 Retainage payable - - - Due to other funds - - - Unearned revenues 9,142 - I Other deposits - - - Total Liabilities 9,142 8,829 8,478 FUND BALANCES Nonspendable: Prepaid items - - - Restricted for: Court-related costs and improvements - - Housing assistance - - 29,135 Law enforcement/public safety - - - Tourism-related activites - - - Beach renourishment - - - Boating related projects - - - Library services - - - I Land acquisition - - - 1 Stormwater,street lighting,and other special assessments - 488,061 - Debt service - - - Sports Village repairs/improvements - - Other purposes - - Committed to: Environmental conservation/preservation - - Law enforcement/public safety - - Court operations - - - Unassigned - - - Total Fund Balances - 488,061 29,135 Total Liabilities and Fund Balances $ 9,142 $ 496,890 $ 37,613 I 112 i Debt Service Spring Land Total Nonmajor Training Acquisition Governmental Facility Bonds Bonds Funds $ 1,438,246 $ 928,123 $ 22,215,507 12,606 74,417 77,940 36,661 - 124,851 283,166 - 302,128 658,000 $ 1,758,073 $ 1,002,540 $ 23,391,032 $ - $ - $ 519,864 - 27,787 - 219,500 - 9,142 - 55,664 - 831,957 283,166 - 302,128 l - - 3,449,680 - - 1,597,356 - - 2,912,503 381,152 - - 6,093,395 - 1,084,470 - - 144,490 - - 258,095 - - 1,738,510 1,474,907 1,002,540 2,477,447 - - 553,204 286,223 - 1,058,569 391,568 - 33,256 - - (202,971) 1,758,073 1,002,540 22,559,075 $ 1,758,073 $ 1,002,540 $ 23,391,032 113 Indian River County,Florida i Combining Statement of Revenues,Expenditures and Changes in Fund Balances Nonmajor Governmental Funds For the Year Ended September 30,2012 Special Revenue Section 8 Court Rental Special Law Facilities Assistance Enforcement REVENUES Taxes $ _ $ _ $ _ Permits,fees and special assessments - - Intergovernmental - 1,901,583 - Charges for services 465,669 37,413 35,424 Judgments,fines and forfeits - - 40,040 Interest 3,838 1,138 818 Miscellaneous - _ - Total revenues 469,507 1,940,134 76,282 EXPENDITURES Current: i General government 10,164 - - Public safety _ _ _ Physical environment - - - Transportation _ _ _ Economic environment - - - Human services - 1,935,108 - Culture/recreation - _ - Court related 474,764 - - Debt service: Principal _ Interest and other fiscal charges - - _ Total expenditures 484,928 1,935,108 - Excess of revenues over(under)expenditures (15,421) 5,026 76,282 OTHER FINANCING SOURCES(USES) Transfers in - _ _ Transfers out - - (104,425) Total other financing sources(uses) - - (104,425) Net change in fund balances (15,421) 5,026 (28,143) Fund balances at beginning of year 1,171,689 343,524 270,318 Fund balances at end of year $ 1,156,268 $ 348,550 $ 242,175 1 114 I i Special Revenue Tree State Housing Ordinance Tourist 911 Drug Initiatives Fines Development Surcharge Abuse Partnership $ - $ 601,845 $ - $ _ $ _ - = 1,539,602 67,451 - I! 306,626 14,400 - - 13,364 - 666 1,172 4,464 603 3,041 1,061 1,128 3,528 15,066 604,078 1,545,194 81,418 313,195 I_ _ 1,924,865 45,025 - - - - 22,426 935,650 605,304 - - _ - 605,304 1,924,865 67,451 935,650 15,066 (1,226) (379,671) 13,967 (622,455) (193,141) - - (193,141) - _ 15,066 (1,226) (572,812) 13,967 (622,455) 206,142 382,378 1,647,323 183,192 1,316,022 $ 221,208 $ 381,152 $ 1,074,511 $ 197,159 $ 693,567 Continued 115 Indian River County,Florida Combining Statement of Revenues,Expenditures and Changes in Fund Balances (I Nonmajor Governmental Funds For the Year Ended September 30,2012 Special Revenue Metropolitan Multi- Native Uplands Planning Jurisdictional Land Organization Law Enforcement Acquisition REVENUES Taxes $ - $ - $ - Permits,fees and special assessments - - - Intergovernmental 385,202 Charges for services - - - Judgments,fines and forfeits - 4,000 - Interest - 339 2,671 Miscellaneous - - - Total revenues 385,202 4,339 2,671 EXPENDITURES Current: I General government 468,478 - - Public safety - - - Physical environment - - - Transportation - - - Economic environment - - - Human services - - - Culture/recreation - - - Court related - - - Debt service: Principal - - - Interest and other fiscal charges - - - Total expenditures 468,478 - - Excess of revenues over(under)expenditures (83,276) 4,339 2,671 OTHER FINANCING SOURCES(USES) Transfers in - - - Transfers out - (26,380) - Total other financing sources(uses) - (26,380) - Net change in fund balances (83,276) (22,041) 2,671 Fund balances at beginning of year (107,412) 112,760 834,690 Fund balances at end of year $ (190,688) $ 90,719 $ 837,361 l 116 Special Revenue CDBG Florida Disabled Beach Neighborhood Boating Improv. Library Access Restoration Stabilization Pgm Program Bequests Program f $ 601,845 $ - $ - $ - $ - ( 101,232 74,959 70,177 - - - - - - 876 �- 21,718 240 3,397 494 198 2,128 621,161 60,134 726,923 696,360 73,574 60,628 1,074 = 1,517,759 2,367,304 - 13,337 46,832 - 2,367,304 1,517,759 13,337 46,832 - (1,640,381) (821,399) 60,237 13,796 1,074 111,698 - - - - 111,698 - - - - (1,528,683) (821,399) 60,237 13,796 1,074 7,622,078 1,347,503 1,024,233 130,694 61,228 $ 6,093,395 $ 526,104 $ 1,084,470 $ 144,490 $ 62,302 Continued 117 Indian River County,Florida Combining Statement of Revenues,Expenditures and �- Changes in Fund Balances Nonmajor Governmental Funds For the Year Ended September 30,2012 Special Revenue Traffic Federal/State Education Land Grants Program Acquisition REVENUES Taxes $ - $ - $ _ Permits,fees and special assessments - - - Intergovernmental 2,815,342 - 1,000,000 �- Charges for services - _ - Judgments,fines and forfeits - 213 - Interest - 103 852 Miscellaneous - - 44,336 Total revenues 2,815,342 316 1,045,188 EXPENDITURES Current: General government 1,749,479 - - Public safety - _ _ Physical environment - - 1,098,295 Transportation - 8,900 - Economic environment - - _ Human services 841,671 - - Culture/recreation - - _ Court related - - - Debt service: Principal - - - l Interest and other fiscal charges - - _ Total expenditures 2,591,150 8,900 1,098,295 Excess of revenues over(under)expenditures 224,192 (8,584) (53,107) OTHER FINANCING SOURCES(USES) Transfers in - Transfers out Total other financing sources(uses) - - - Net change in fund balances 224,192 (8,584) (53,107) Fund balances at beginning of year (229,275) 35,346 311,202 Fund balances at end of year $ (5,083) $ 26,762 $ 258,095 118 I t f fSpecial Revenue fEast Vero Beach Clerk Sheriff Gifford Vero Lake Sports Special Special Stormwater Estates Village Reserve Revenue Revenue f $ 153 $ 473 $ - $ - $ - 889 93,397 - - - f - - - - 64,478 354,884 308,684 - - - 152,058 183,138 54 3,902 - 6,539 23 1,096 97,772 - 513,481 556,323 - - - 470,723 - f - - - - 908,952 10,756 - - - 394,054 - - f - - - 149,631 8,821 - 10,756 394,054 620,354 917,773 1,096 87,016 (394,054) (106,873) (361,450) - - - - 230,805 (47) (2,751) - - - (47) (2,751) - - 230,805 f1,049 84,265 (394,054) (106,873) (130,645) 16,156 1,148,979 947,258 2,445,303 2,027,311 f $ 17,205 $ 1,233,244 $ 553,204 $ 2,338,430 $ 1,896,666 fContinued f119 I_ Indian River County,Florida Combining Statement of Revenues,Expenditures and Changes in Fund Balances Nonmajor Governmental Funds For the Year Ended September 30,2012 Special Revenue Supervisor of Street Elections Lighting CDBG Special Revenue Districts NSP3 Grant REVENUES Taxes $ - $ 3,172 $ - Permits,fees and special assessments - 179,193 - Intergovernmental 25,250 - 129,519 Charges for services - _ _ II Judgments,fines and forfeits - - _ Interest - 1,712 23 Miscellaneous - 2,440 51,258 Total revenues 25,250 186,517 180,800 EXPENDITURES Current: General government 35,425 - - Public safety - Physical environment - _ _ Transportation - 189,032 - Economic environment - - 140,557 Human services - _ _ Culture/recreation - _ _ Court related - _ _ Debt service: I Principal - _ _ Interest and other fiscal charges - - _ Total expenditures 35,425 189,032 140,557 Excess of revenues over(under)expenditures (10,175) (2,515) 40,243 OTHER FINANCING SOURCES(USES) f Transfers in 2,431 - - Transfers out - (5,060) - Total other financing sources(uses) 2,431 (5,060) - Net change in fund balances (7,744) (7,575) 40,243 Fund balances at beginning of year 7,744 495,636 (11,108) Fund balances at end of year $ - $ 488,061 $ 29,135 120 I Debt Service Total Land Nonmajor Spring Training Acquisition Governmental Facility Bonds Bonds Funds $ 401,230 $ 5,574,183 $ 7,182,901 - - 273,479 941,401 - 9,116,196 1,508,700 - - 408,089 4,692 9,866 72,563 - - 787,174 1,347,323 5,584,049 19,349,102 - - 2,734,269 ( 2,878,842 - - 1,098,295 - - 208,688 - 1,658,316 3,734,855 - - 3,426,831 - - 633,216 630,000 7,430,000 8,060,000 593,423 1,832,660 2,426,083 1,223,423 9,262,660 26,859,395 123,900 (3,678,611) (7,510,293) i - 3,050,000 3,394,934 (112,630) (444,434) 2,937,370 2,950,500 123,900 (741,241) (4,559,793) 1,634,173 1,743,781 27,118,868 $ 1,758,073 $ 1,002,540 $ 22,559,075 121 Indian River County, Florida Budgetary Comparison Schedule Court Facilities For the Year Ended September 30, 2012 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 122 Variance Final Actual Positive Budget Amounts (Negative) $ 450,000 $ 465,669 $ 15,669 3,000 3,838 838 453,000 469,507 16,507 30,000 10,164 19,836 520,909 474,764 46,145 550,909 484,928 65,981 (97,909) (15,421) 82,488 97,909 1,171,689 1,073,780 $ - $ 1,156,268 $ 1,156,268 122 i Indian River County,Florida Budgetary Comparison Schedule Section 8 Rental Assistance For the Year Ended September 30,2012 Variance Final Actual Positive Budget Amounts (Negative) REVENUES Intergovernmental $ 1,934,707 $ 1,901,583 $ (33,124) Charges for services - 37,413 37,413 Interest - 1,138 1,138 Total revenues 1,934,707 1,940,134 5,427 EXPENDITURES Human services 1,949,407 1,935,108 14,299 Total expenditures 1,949,407 1,935,108 14,299 Net change in fund balances (14,700) 5,026 19,726 Fund balances at beginning of year 14,700 343,524 328,824 Fund balances at end of year $ - $ 348,550 $ 348,550 l : f 123 Indian River County,Florida Budgetary Comparison Schedule Special Law Enforcement For the Year Ended September 30,2012 Variance Final Actual Positive Budget Amounts (Negative) REVENUES Charges for services $ - $ 35,424 $ 35,424 Judgments, fines and forfeits 104,426 40,040 (64,386) I Interest - 818 818 Total revenues 104,426 76,282 (28,144) EXPENDITURES Public safety - - _ Total expenditures - - Excess of revenues over(under) expenditures 104,426 76,282 (28,144) OTHER FINANCING USES Transfers out (104,426) (104,425) 1 Total other financing uses (104,426) (104,425) 1 Net change in fund balances - (28,143) (28,143) Fund balances at beginning of year - 270,318 270,318 Fund balances at end of year $ - $ 242,175 $ 242,175 l_ l f 124 Indian River County,Florida Budgetary Comparison Schedule Tree Ordinance Fines For the Year Ended September 30,2012 Variance Final Actual Positive Budget Amounts (Negative) REVENUES Judgments, fines and forfeits $ - $ 14,400 $ 14,400 Interest - 666 666 Total revenues - 15,066 15,066 EXPENDITURES Culture/recreation 50,000 - 50,000 Total expenditures 50,000 50,000 Net change in fund balances (50,000) 15,066 65,066 Fund balances at beginning of year 50,000 206,142 156,142 Fund balances at end of year $ - $ 221,208 $ 221,208 I I 125 i_ Indian River County,Florida Budgetary Comparison Schedule Tourist Development For the Year Ended September 30,2012 I Variance Final Actual Positive Budget Amounts (Negative) REVENUES Taxes $ 508,250 $ 601,845 $ 93,595 Interest 9,500 1,172 (8,328) Miscellaneous - 1,061 1,061 Total revenues 517,750 604,078 86,328 i EXPENDITURES Culture/recreation 663,660 605,304 58,356 Total expenditures 663,660 605,304 58,356 Net change in fund balances (145,910) (1,226) 144,684 f Fund balances at beginning of year 145,910 382,378 236,468 Fund balances at end of year $ - $ 381,152 $ 381,152 I 1 i i 126 Indian River County,Florida Budgetary Comparison Schedule 911 Surcharge For the Year Ended September 30,2012 f Variance Final Actual Positive Budget Amounts (Negative) 1 REVENUES Intergovernmental $ 1,768,107 $ 1,539,602 $ (228,505) Interest - 4,464 4,464 Miscellaneous - 1,128 1,128 Total revenues 1,768,107 1,545,194 (222,913) EXPENDITURES ( Public safety 2,991,033 1,924,865 1,066,168 Total expenditures 2,991,033 1,924,865 1,066,168 f Excess of revenues over(under) expenditures (1,222,926) (379,671) 843,255 1 OTHER FINANCING USES Transfers out (193,141) (193,141) - Total other financing uses (193,141) (193,141) - Net change in fund balances (1,416,067) (572,812) 843,255 Fund balances at beginning of year 1,416,067 1,647,323 231,256 Fund balances at end of year $ - $ 1,074,511 $ 1,074,511 4 127 Indian River County,Florida Budgetary Comparison Schedule Drug Abuse For the Year Ended September 30,2012 Variance Final Actual Positive Budget Amounts (Negative) REVENUES Intergovernmental $ - $ 67,451 $ 67,451 { Judgments, fines and forfeits - 13,364 13,364 I Interest - 603 603 Total revenues - 81,418 81,418 EXPENDITURES Public safety 57,934 45,025 12,909 Human services 35,508 22,426 13,082 Total expenditures 93,442 67,451 25,991 Net change in fund balance (93,442) 13,967 107,409 Fund balances at beginning of year 93,442 183,192 89,750 Fund balances at end of year $ - $ 197,159 $ 197,159 f I i I I 128 Indian River County,Florida Budgetary Comparison Schedule C State Housing Initiatives Partnership For the Year Ended September 30,2012 Variance Final Actual Positive Budget Amounts (Negative) REVENUES Charges for services $ 46,000 $ 306,626 $ 260,626 Interest 4,000 3,041 (959) Miscellaneous - 3,528 3,528 Total revenues 50,000 313,195 263,195 EXPENDITURES Human services 1,002,525 935,650 66,875 Total expenditures 1,002,525 935,650 66,875 Net change in fund balances g (952,525) (622,455) 330,070 Fund balances at beginning of year 952,525 1,316,022 363,497 Fund balances at end of year $ - $ 693,567 $ 693,567 I I 129 Indian River County,Florida Budgetary Comparison Schedule Metropolitan Planning Organization For the Year Ended September 30,2012 I Variance Final Actual Positive Budget Amounts (Negative) REVENUES Intergovernmental $ 678,664 $ 385,202 $ (293,462) f Total revenues 678,664 385,202 (293,462) f EXPENDITURES j General government 678,664 468,478 210,186 Total expenditures 678,664 468,478 210,186 Net change in fund balances - (83,276) (83,276) Fund balances at beginning of year - (107,412) (107,412) Fund balances at end of year $ - $ (190,688) $ (190,688) II i i` I I ' l A 130 Indian River County,Florida Budgetary Comparison Schedule Multi-Jurisdictional Law Enforcement For the Year Ended September 30,2012 Variance I Final Actual Positive Budget Amounts (Negative) REVENUES I Judgments, fines and forfeits $ 26,381 $ 4,000 $ (22,381) Interest - 339 339 Total revenues 26,381 4,339 (22,042) EXPENDITURES Public safety - - = Total expenditures IExcess of revenues over(under) expenditures 26,381 4,339 (22,042) OTHER FINANCING USES I Transfers out (26,381) (26,380) 1 Total other financing uses (26,381) (26,380) 1 Net change in fund balances - (22,041) (22,041) ( Fund balances at beginning of year - 112,760 112,760 IFund balances at end of year $ - $ 90,719 $ 90,719 I . 4 I I I131 Indian River County,Florida Budgetary Comparison Schedule Native Uplands Land Acquisition For the Year Ended September 30,2012 Variance Final Actual Positive Budget Amounts (Negative) l REVENUES Interest $ - $ 2,671 $ 2,671 Total revenues - 2,671 2,671 EXPENDITURES Physical environment 55,000 - 55,000 Total expenditures 55,000 - 55,000 Net change in fund balances (55,000) 2,671 57,671 f Fund balances at beginning of year 55,000 834,690 779,690 Fund balances at end of year $ - $ 837,361 $ 837,361 1 132 Indian River County,Florida I Budgetary Comparison Schedule Beach Restoration For the Year Ended September 30,2012 Variance 4 Final Actual Positive Budget Amounts (Negative) REVENUES 1 Taxes $ 508,250 $ 601,845 $ 93,595 Intergovernmental - 101,232 101,232 Interest 28,500 21,718 (6,782) Miscellaneous 1,000 2,128 1,128 Total revenues 537,750 726,923 189,173 EXPENDITURES Culture/recreation 3,900,394 2,367,304 1,533,090 Total expenditures 3,900,394 2,367,304 1,533,090 Excess of revenues over(under) expenditures (3,362,644) (1,640,381) 1,722,263 OTHER FINANCING SOURCES Transfers in 111,698 111,698 - Total other financing sources 111,698 111,698 - Net change in fund balances (3,250,946) (1,528,683) 1,722,263 Fund balances at beginning of year 3,250,946 7,622,078 4,371,132 Fund balances at end of year $ - $ 6,093,395 $ 6,093,395 I 133 i Indian River County,Florida Budgetary Comparison Schedule CDBG Neighborhood Stabilization Program For the Year Ended September 30,2012 Variance Final Actual Positive Budget Amounts (Negative) REVENUES Intergovernmental $ - $ 74,959 $ 74,959 Interest - 240 240 Miscellaneous 1,256,221 621,161 (635,060) Total revenues 1,256,221 696,360 (559,861) EXPENDITURES Economic environment 1,911,370 1,517,759 393,611 Total expenditures 1,911,370 1,517,759 393,611 Net change in fund balances (655,149) (821,399) (166,250) Fund balances at beginning of year 655,149 1,347,503 692,354 Fund balances at end of year $ - $ 526,104 $ 526,104 l_ 1 134 Indian River County,Florida Budgetary Comparison Schedule Florida Boating Improvement Program For the Year Ended September 30,2012 ,1 Variance Final Actual Positive Budget Amounts (Negative) REVENUES Intergovernmental $ 35,000 $ 70,177 $ 35,177 Interest - 3,397 3,397 Total revenues 35,000 73,574 38,574 EXPENDITURES Culture/recreation 235,000 13,337 221,663 Total expenditures 235,000 13,337 221,663 Net change in find balances (200,000) 60,237 260,237 Fund balances at beginning of year 200,000 1,024,233 824,233 Fund balances at end of year $ - $ 1,084,470 $ 1,084,470 I i 135 Indian River County,Florida Budgetary Comparison Schedule Library Bequests ` For the Year Ended September 30,2012 Variance Final Actual Positive Budget Amounts (Negative) REVENUES Interest $ - $ 494 $ 494 Miscellaneous - 60,134 60,134 Total revenues - 60,628 60,628 EXPENDITURES Culture/recreation 56,193 46,832 9,361 Total expenditures 56,193 46,832 9,361 ` Net change in fund balances (56,193) 13,796 69,989 Fund balances at beginning of year 56,193 130,694 74,501 Fund balances at end of year $ - $ 144,490 $ 144,490 E .I I 136 Indian River County,Florida Budgetary Comparison Schedule Disabled Access Program For the Year Ended September 30,2012 1 ; Variance Final Actual Positive Budget Amounts (Negative) REVENUES Judgments, fines and forfeits $ - $ 876 $ 876 Interest - 198 198 Total revenues - 1,074 1,074 EXPENDITURES Human services 20,000 - 20,000 Total expenditures 20,000 20,000 Net change in fund balances (20,000) 1,074 21,074 Fund balances at beginning of year 20,000 61,228 41,228 Fund balances at end of year $ - $ 62,302 $ 62,302 I I, I 137 Indian River County,Florida Budgetary Comparison Schedule Federal/State Grants For the Year Ended September 30,2012 I Variance Final Actual Positive Budget Amounts (Negative) REVENUES Intergovernmental $ 2,978,598 $ 2,815,342 $ (163,256) Total revenues 2,978,598 2,815,342 (163,256) EXPENDITURES General government 1,815,315 1,749,479 65,836 Human services 1,256,883 841,671 415,212 Total expenditures 3,072,198 2,591,150 481,048 Net change in fund balances (93,600) 224,192 317,792 Fund balances at beginning of year 93,600 (229,275) (322,875) Fund balances at end of year $ - $ (5,083) $ (5,083) f I ; \1 138 i _ Indian River County,Florida Budgetary Comparison Schedule Traffic Education Program For the Year Ended September 30, 2012 Variance Final Actual Positive Budget Amounts (Negative) REVENUES Judgments, fines and forfeits $ - $ 213 $ 213 Interest - 103 103 Total revenues - 316 316 EXPENDITURES Transportation 32,703 8,900 23,803 Total expenditures 32,703 8,900 23,803 Net change in fund balances (32,703) (8,584) 24,119 I Fund balances at beginning of year 32,703 35,346 2,643 Fund balances at end of year $ - $ 26,762 $ 26,762 I , I l 139 Indian River County,Florida Budgetary Comparison Schedule Land Acquisition For the Year Ended September 30,2012 I Variance Final Actual Positive Budget Amounts (Negative) REVENUES Intergovernmental $ 1,000,000 $ 1,000,000 $ - Interest - 852 852 Miscellaneous 100,000 44,336 (55,664) Total revenues 1,100,000 1,045,188 (54,812) EXPENDITURES Physical environment 1,206,300 1,098,295 108,005 Total expenditures 1,206,300 1,098,295 108,005 r Net change in fund balances (106,300) (53,107) 53,193 Fund balances at beginning of year 106,300 311,202 204,902 Fund balances at end of year $ - $ 258,095 $ 258,095 i r 140 I Indian River County,Florida Budgetary Comparison Schedule East Gifford Stormwater For the Year Ended September 30,2012 I Variance Final Actual Positive Budget Amounts (Negative) REVENUES Taxes $ - $ 153 $ 153 Permits, fees and special assessments 1,330 889 (441) Interest - 54 54 Total revenues 1,330 1,096 (234) EXPENDITURES Transportation 1,928 - 1,928 Total expenditures 1,928 - 1,928 Excess of revenues over expenditures (598) 1,096 1,694 OTHER FINANCING USES Transfers out (55) (47) 8 Total other financing uses (55) (47) 8 Net change in fund balances (653) 1,049 1,702 Fund balances at beginning of year 653 16,156 15,503 Fund balances at end of year $ - $ 17,205 $ 17,205 I I I 141 i Indian River County,Florida Budgetary Comparison Schedule Vero Lake Estates For the Year Ended September 30,2012 Variance Final Actual Positive Budget Amounts (Negative) REVENUES Taxes $ - $ 473 $ 473 Permits, fees and special assessments 88,174 93,397 5,223 Interest 3,325 3,902 577 Total revenues 91,499 97,772 6,273 EXPENDITURES - Physical environment 141,037 - 141,037 Transportation 271,061 10,756 260,305 Total expenditures 412,098 10;756 401,342 Excess of revenues over(under)expenditures (320,599) 87,016 407,615 OTHER FINANCING USES Transfers out (4,401) (2,751) 1,650 Total other financing uses (4,401) (2,751) 1,650 Net change in fund balances (325,000) 84,265 409,265 Fund balances at beginning of year 325,000 1,148,979 823,979 Fund balances at end of year $ - $ 1,233,244 $ 1,233,244 f t 142 Indian River County,Florida Budgetary Comparison Schedule Vero Beach Sports Village Reserve For the Year Ended September 30,2012 Variance Final Actual Positive Budget Amounts (Negative) REVENUES Miscellaneous $ - $ - $ - t Total revenues - - - EXPENDITURES Culture/recreation 947,253 394,054 553,199 Total expenditures 947,253 394,054 553,199 4 Net change in fund balances (947,253) (394,054) 553,199 Fund balances at beginning of year 947,253 947,258 5 j Fund balances at end of year $ - $ 553,204 $ 553,204 f f i I 143 I _ Indian River County,Florida Budgetary Comparison Schedule ` Clerk Special Revenue For the Year Ended September 30,2012 i Variance Final Actual Positive Budget Amounts (Negative) I REVENUES Charges for services $ 434,632 $ 354,884 $ (79,748) Judgments, fines and forfeits 181,000 152,058 (28,942) Interest 5,026 6,539 1,513 - Total revenues 620,658 513,481 (107,177) EXPENDITURES General government 470,893 470,723 170 1+ Court related 149,765 149,631 134 Total expenditures 620,658 620,354 304 Net change in fund balances - (106,873) (106,873) f Fund balances at beginning of year - 2,445,303 2,445,303 Fund balances at end of year $ - $ 2,338,430 $ 2,338,430 f 1 l _ r 1 1 1 I 144 Indian River County,Florida ( Budgetary Comparison Schedule Sheriff Special Revenue { For the Year Ended September 30,2012 I Variance Final Actual Positive Budget Amounts (Negative) REVENUES 1 Intergovernmental $ 64,478 $ 64,478 $ - Charges for services 390,000 308,684 (81,316) Judgments, fines and forfeits 234,000 183,138 (50,862) Interest 3,715 23 (3,692) Total revenues 692,193 556,323 (135,870) EXPENDITURES Public safety 914,000 908,952 5,048 Court related 9,000 8,821 179 Total expenditures 923,000 917,773 5,227 Excess of revenues over(under) expenditures (230,807) (361,450) (130,643) OTHER FINANCING SOURCES Transfers in 230,807 230,805 (2) ( Total other financing sources 230,807 230,805 (2) Net change in fund balances - (130,645) (130,645) Fund balances at beginning of year - 2,027,311 2,027,311 Fund balances at end ofear $ - $ 1,896,666 $ 1 896 666 y > f 145 Indian River County,Florida Budgetary Comparison Schedule i Supervisor of Elections Special Revenue For the Year Ended September 30,2012 Variance Final Actual Positive Budget Amounts (Negative) f REVENUES Intergovernmental $ - $ 25,250 $ 25,250 Total revenues - 25,250 25,250 EXPENDITURES General government - 35,425 (35,425) Total expenditures - 35,425 (35,425) Excess of revenues under expenditures - (10,175) (10,175) OTHER FINANCING SOURCES Transfers in - 2,431 2,431 Total other financing sources - 2,431 2,431 Net change in fund balances - (7,744) (7,744) Fund balances at beginning of year - 7,744 7,744 Fund balances at end of year $ - $ - $ - l 1 l 146 Indian River County,Florida Budgetary Comparison Schedule Street Lighting Districts i For the Year Ended September 30,2012 I Variance Final Actual Positive 1 Budget Amounts (Negative) REVENUES Taxes $ - $ 3,172 $ 3,172 Permits, fees and special assessments 173,876 179,193 5,317 Interest 1,084 1,712 628 Miscellaneous 3,205 2,440 (765) Total revenues 178,165 186,517 8,352 EXPENDITURES Transportation 227,496 189,032 38,464 Total expenditures 227,496 189,032 38,464 Excess of revenues over(under) expenditures (49,331) (2,515) 46,816 OTHER FINANCING USES Transfers out (6,227) (5,060) 1,167 Total other financing uses (6,227) (5,060) 1,167 1 Net change in fund balances (55,558) (7,575) 47,983 Fund balances at beginning of year 55,558 495,636 440,078 Fund balances at end of year $ - $ 488,061 $ 488,061 l f 147 Indian River County,Florida Budgetary Comparison Schedule CDBG NSP3 Grant For the Year Ended September 30,2012 Variance Final Actual Positive f Budget Amounts (Negative) REVENUES Intergovernmental $ 1,489,319 $ 129,519 $ (1,359,800) Interest - 23 23 Miscellaneous 51,258 51,258 - Total revenues 1,540,577 180,800 (1,359,777) EXPENDITURES Economic environment 1,540,577 140,557 1,400,020 S Total expenditures 1,540,577 140,557 1,400,020 Net change in fund balances - 40,243 40,243 { Fund balances at beginning of year - (11,108) (11,108) Fund balances at end of year $ - $ 29,135 $ 29,135 4 _ l l f 148 l i Indian River County,Florida Budgetary Comparison Schedule Spring Training Facility Bonds For the Year Ended September 30,2012 Variance ( Final Actual Positive Budget Amounts (Negative) REVENUES Taxes $ 338,834 $ 401,230 $ 62,396 Intergovernmental 892,939 941,401 48,462 Interest 6,650 4,692 (1,958) Total revenues 1,238,423 1,347,323 108,900 EXPENDITURES Debt service: Principal 630,000 630,000 - Interest 608,423 593,423 15,000 Total expenditures 1,238,423 1,223,423 15,000 i Net change in fund balances - 123,900 123,900 f Fund balances at beginning of year - 1,634,173 1,634,173 Fund balances at end of year $ - $ 1,758,073 $ 1,758,073 1 I 149 Indian River County,Florida Budgetary Comparison Schedule Land Acquisition Bonds For the Year Ended September 30,2012 Variance Final Actual Positive Budget Amounts (Negative) REVENUES Taxes $ 5,488,937 $ 5,574,183 $ 85,246 Interest 17,100 9,866 (7,234) Total revenues 5,506,037 5,584,049 78,012 EXPENDITURES Debt service: Principal 7,430,000 7,430,000 Interest 1,856,830 1,832,660 24,170 Total expenditures 9,286,830 9,262,660 24,170 Excess of revenues over(under) expenditures (3,780,793) (3,678,611) 102,182 OTHER FINANCING SOURCES (USES) Transfers in 3,050,000 3,050,000 - Transfers out (155,407) (112,630) 42,777 Total other financing uses 2,894,593 2,937,370 42,777 Net change in fund balances (886,200) (741,241) 144,959 Fund balances at beginning of year 886,200 1,743,781 857,581 Fund balances at end of year $ - $ 1,002,540 $ 1,002,540 f l 150 Indian River County,Florida Budgetary Comparison Schedule Optional Sales Tax For the Year Ended September 30,2012 Variance Final Actual Positive Budget Amounts (Negative) REVENUES Taxes $ 12,349,349 $ 13,708,911 $ 1,359,562 Permits, fees and special assessments - 22,353 22,353 Intergovernmental 6,858,149 261,342 (6,596,807) Interest 118,750 111,762 (6,988) Miscellaneous 2,386,000 223,465 (2,162,535) Total revenues 21,712,248 14,327,833 (7,384,415) EXPENDITURES Capital projects 32,629,242 8,108,370 24,520,872 Total expenditures 32,629,242 8,108,370 24,520,872 Net change in fund balances (10,916,994) 6,219,463 17,136,457 Fund balances at beginning of year 10,916,994 44,263,331 33,346,337 Fund balances at end of year $ - $ 50,482,794 $ 50482,794 I 151 A '4LORiOq' INTERNAL SERVICE FUNDS Fleet Management- To account for the expenses incurred to repair and 1 maintain the County's vehicles and equipment. Revenues are generated by charging user departments for maintenance of their vehicles and equipment. l 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 System- 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 system. f 153 Indian River County,Florida Combining Statement of Net Position Internal Service Funds September 30,2012 Geographic Fleet Self Information ((( Management Insurance Systems Totals ASSETS Current assets: Cash and cash equivalents $ 257 $ 29,813,294 $ 2,153,944 $ 31,967,495 Accounts receivable-net 90,499 1,477,836 - 1,568,335 Due from other governments 123,851 3,113 - 126,964 Interest receivable - 14,826 1,088 15,914 Inventories 218,196 - - 218,196 Prepaid items - 1,144,903 32,535 1,177,438 Total current assets 432,803 32,453,972 2,187,567 35,074,342 Non-current assets: Capital assets-depreciable 279,125 16,901 823,908 1,119,934 f Accumulated depreciation (204,414) (16,901) (546,528) (767,843) Total non-current assets 74,711 - 277,380 352,091 Total assets 507,514 32,453,972 2,464,947 35,426,433 LIABILITIES Current liabilities(payable from current assets): Accounts payable 167,674 33,322 1,896 202,892 Claims payable - 2,197,855 - 2,197,855 Due to other funds 225,000 - - 225,000 Accrued compensated absences 14,706 11,046 7,253 33,005 Total current liabilities(payable from current assets) 407,380 2,242,223 9,149 2,658,752 Non-current liabilities: Claims payable - 5,876,145 - 5,876,145 Accrued compensated absences - 4,686 7,279 11,965 Total non-current liabilities - 5,880,831 7,279 5,888,110 Total liabilities 407,380 8,123,054 16,428 8,546,862 NET POSITION Net investment in capital assets 74,711 - 277,380 352,091 Unrestricted 25,423 24,330,918 2,171,139 26,527,480 Total net position $ 100,134 $ 24,330,918 $ 2,448,519 $ 26,879,571 1 , l l i 154 Indian River County,Florida Combining Statement of Revenues,Expenses, and Changes in Fund Net Position Internal Service Funds ( For the Year Ended September 30,2012 Geographic Fleet Self Information Management Insurance Systems Totals OPERATING REVENUES Charges for services $ 3,802,280 $ 17,434,016 $ 327,254 $ 21,563,550 Total revenues 3,802,280 17,434,016 327,254 21,563,550 OPERATING EXPENSES Personal services 444,851 1,762,663 264,287 2,471,801 Material, supplies,services and other operating 3,343,965 14,721,721 77,728 18,143,414 Depreciation 34,817 - 120,390 155,207 Total operating expenses 3,823,633 16,484,384 462,405 20,770,422 Operating income(loss) (21,353) 949,632 (135,151) 793,128 NONOPERATING REVENUES(EXPENSES) Interest income - 91,683 6,363 98,046 Gain on disposal of equipment 1,250 1,250 ( Total nonoperating revenues 1,250 91,683 6,363 99,296 Income(loss)before transfers (20,103) 1,041,315 (128,788) 892,424 Transfers in - 35,438 - 35,438 Change in net position (20,103) 1,076,753 (128,788) 927,862 Total net position-beginning 120,237 23,254,165 2,577,307 25,951,709 Total net position- ending $ 100,134 $ 24,330,918 $ 2,448,519 $ 26,879,571 155 I _ Indian River County,Florida Combining Statement of Cash Flows Internal Service Funds For the Year Ended September 30,2012 L Geographic Fleet Self Information Management Insurance Systems Totals CASH FLOWS FROM OPERATING ACTIVITIES Cash received from customers $ 3,763,437 $ 17,454,663 $ 327,254 $ 21,545,354 Cash paid to suppliers for goods and services (3,335,745) (14,655,076) (118,449) (18,109,270) Cash paid to employees for services (459,052) (1,748,921) (262,659) (2,470,632) Net cash provided by(used in)operating activities (31,360) 1,050,666 (53,854) 965,452 CASH FLOWS FROM NONCAPITAL FINANCING ACTIVITIES Transfers - 35,438 - 35,438 i Proceeds from advances from other funds 35,000 - - 35,000 Net cash provided by noncapital financing activities 35,000 35,438 - 70,438 CASH FLOWS FROM CAPITAL AND RELATED FINANCING ACTIVITIES Proceeds from sale of capital assets 1,250 - - 1,250 Purchase of capital assets (5,122) - (96,641) (101,763) Net cash provided by(used in)capital and related financing activities (3,872) - (96,641) (100,513) CASH FLOWS FROM INVESTING ACTIVITIES l Interest and dividends on investments - 98,497 7,027 105,524 Net cash provided by investing activities - 98,497 7,027 105,524 Net increase(decrease)in cash and cash equivalents (232) 1,184,601 (143,468) 1,040,901 Cash and cash equivalents at beginning of year 489 28,628,693 2,297,412 30,926,594 Cash and cash equivalents at end of year $ 257 $ 29,813,294 $ 2,153,944 $ 31,967,495 Classified as: Current assets $ 257 $ 29,813,294 $ 2,153,944 $ 31,967,495 1 l I 156 I Indian River County,Florida Combining Statement of Cash Flows Internal Service Funds For the Year Ended September 30,2012 Geographic Fleet Self Information Management Insurance Systems Totals RECONCILIATION OF OPERATING INCOME(LOSS)TO NET CASH PROVIDED BY OPERATING ACTIVITIES Operating income(loss) $ (21,353)$ 949,632 $ (135,151) $ 793,128 j Adjustments to reconcile operating income(loss)to net cash provided by operating activities: Depreciation 34,817 - 120,390 155,207 (Increase)Decrease in assets: Accounts receivable (27,519) 23,760 - (3,759) Due from other governments (11,324) (3,113) - (14,437) Inventories (8,529) - - (8,529) Deposits (134,429) (7,339) (141,768) Increase(Decrease)in liabilities: Accounts payable 16,749 4,074 (33,382) (12,559) Claims payable - 197,000 - 197,000 Accrued compensated absences (14,201) 13,742 1,628 1,169 Total adjustments (10,007) 101,034 81,297 172,324 Net cash provided by(used in)operating activities $ (31,360)$ 1,050,666 $ (53,854) $ 965,452 NONCASH CAPITAL AND RELATED FINANCING ACTIVITIES Change in fair value of investments $ - $ (12,613)$ (926) $ (13,539) i I i 157 �'toeioA FIDUCIARY FUND I Agency Fund- To account for the assets held solely in a custodial capacity by the County. I I 159 i Indian River County,Florida Combining Statement of Changes in Assets and Liabilities Agency Fund For the Fiscal Year Ended September 30,2012 Balance Balance October 1, September 30, 2011 Additions Deductions 2012 ASSETS Cash and cash equivalents $ 12,571,159 $ 348,629,283 $ 349,649,883 $ 11,550,559 Investments 77,521 24,909 22,437 79,993 Accounts receivable 697 2,615 3,312 - Total assets $ 12,649,377 $ 348,656,807 $ 349,675,632 $ 11,630,552 ' l LIABILITIES Accounts payable $ 821,359 $ 52,860,563 $ 53,043,958 $ 637,964 Due to other governments 4,939,915 315,657,815 315,483,319 5,114,411 Other deposits held in escrow 6,888,103 23,384,277 24,394,203 5,878,177 Total liabilities $ 12,649,377 $ 391,902,655 $ 392,921,480 $ 11,630,552 I C �I 160 i 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 Page(s) ( 1 Financial Trends (Schedules 1 - 5) 162-172 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) 173-177 These schedules contain information to help the reader assess the County's most l significant local revenue source, the property tax. Debt Capacity (Schedules 10— 15) 178-186 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. I ' Demographic and Economic Information (Schedules 16—17) 187-188 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) 190-201 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) 202-207 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. 161 Indian River County,Florida Net Position by Component(Unaudited) Last Ten Fiscal Years (accrual basis of accounting) 2003 2004 2005 2006 Governmental activities Net investment in capital assets $ 227,795,289 $ 242,057,257 $ 264,193,976 $ 278,213,361 Restricted 112,083,712 128,024,220 150,019,583 158,046,966 Unrestricted 20,389,245 22,697,741 60,737,524 121,561,389 1' Total governmental activities net position $ 360,268,246 $ 392,779,218 $ 474,951,083 $ 557,821,716 Business-type activities Net investment in capital assets $ 113,354,198 $ 122,280,348 $ 134,402,945 $ 152,168,135 Restricted 42,971,494 57,825,011 81,084,337 89,071,967 Unrestricted 47,079,296 44,084,834 52,553,913 53,751,547 Total business-type activities net position $ 203,404,988 $ 224,190,193 $ 2681041,195 $ 294,991,649 I 1 Primary government Net investment in capital assets $ 341,149,487 $ 364,337,605 $ 398,596,921 $ 430,381,496 Restricted 155,055,206 185,849,231 231,103,920 247,118,933 Unrestricted 67,468,541 66,782,575 113,291,437 175,312,936 Total primary government net position $ 563,673,234 $ 616,969,411 $ 742,992,278 $ 852,813,365 (A) Completed construction and renovations for beach renourishment,County administration buildings,emergency operations center,five fire stations,County park improvements,and I the purchase of environmentally sensitive lands. (B)The County reclassified special revenue funds from unrestricted to restricted net position. L I 162 i Schedule 1 2007 2008 2009 2010 2011 2012 $ 374,501,758 (A) $ 445,541,175 $ 461,709,848 $ 480,243,738 $ 492,300,301 $ 509,076,923 173,236,941 (B) 163,119,085 158,306,364 132,928,838 125,452,516 121,189,228 60,726,026 (B) 55,081,576 55,914,407 85,810,359 84,860,897 76,523,757 $ 608,464,725 $ 663,741,836 $ 675,930,619 $ 698,982,935 $ 702,613,714 $ 706,789,908 $ 174,540,682 $ 206,069,196 $ 223,273,040 $ 223,375,337 $ 217,876,742 $ 211,631,529 83,840,471 75,814,407 51,021,928 27,898,292 24,230,101 17,941,773 47,338,783 24,624,779 37,122,462 54,592,201 61,041,483 70,286,599 I $ 305,719,936 $ 306,508,382 $ 311,417,430 $ 305,865,830 $ 303,148,326 $ 299,859,901 $ 549,042,440 $ 651,610,371 $ 684,982,888 $ 703,619,075 $ 710,177,043 $ 720,708,452 257,077,412 238,933,492 209,328,292 160,827,130 149,682,617 139,131,001 108,064,809 79,706,355 93,036,869 140,402,560 145,902,380 146,810,356 $ 914,184,661 $ 970,250,218 $ 987,348,049 $ 1,004,848,765 $ 1,005,762,040 $ 1,006,649,809 I 1 l I 41 1 163 1 Indian River County,Florida Changes in Net Position(Unaudited) Last ccrual basis of accountiTen Fiscal Years (accrual 2003 2004 2005 2006 Expenses Governmental activities: General government $ 20,323,241 $ 23,287,533(C) $ 18,165,441 $ 14,642,124 Public safety 46,409,761 54,052,726(C) 54,271,542 58,578,985 Physical environment 791,383 1,039,550 2,850,738 8,490,570(E) Transportation 16,264,468 21,335,262(C) 21,726,741 22,011,006 Economic environment 587,227 639,826 696,448 1,077,731 Human service 6,165,603 7,664,422(C) 7,385,726 12,270,899(F) Cultural/recreation 8,711,251 9,616,323(C) 10,775,291 11,546,217 Court related 6,144,728 6,221,983 5,704,361 6,014,793 Interest on long-term debt 1,549,957 1,313,340 1,246,237 2,315,372(G) Total governmental activities expenses 106,947,619 125,170,965 122,822,525 136,947,697 Business-type activities: 'Vater and sewer 25,015,125 26,907,959 30,260,577 33,387,825 Solid waste 8,589,141 14,103,641 (C) 19,156,896(C) 11,558,323 Golf course 2,842,907 2,806,115 2,939,321 3,058,307 Other 2,033,754 2,532,617 3,768,301 4,202,588 Total business-type activities expenses 38,480,927 46,350,332 56,125,095 52,207,043 Total primary government expenses $ 145,428,546 $ 171,521,297 $ 178,947,620 $ 189,154,740 Program Revenues Governmental activities: Charges for services: �.. General government S 6,513,557 $ 7,593,486 S 8,779,557 $ 10,437,774 Public safety 4,288,357 3,927,664 4,712,594 7,151,354 Physical environment 29,260 92,354 631,456 854,219 Transportation 5,584,999 11,182,015 37,384,003(D) 16,619,853 Human service 302,998 604,379 821,811 754,916 Cultural/recreation 776,829 813,827 800,555 5,480,612 Court related 1,458,688 1,449,771 2,294,908 2,466,882 Operating grants and contributions 5,175,499 9,270,478 16,310,024(C) 13,420,891 Capital grants and contributions 19,908,254(A) 11,784,511 (C) 6,069,586 13,081,116 Total governmental activities program revenues 44,038,441 46,718,485 77,804,494 70,267,617 Business-type activities: Charges for services: Water and sewer 21,210,935 22,984,883 25,579,512 28,029,062 Solid waste 10,187,432 11,160,368 16,874,618 13,741,864 Golfcourse 3,112,087 3,099,287 3,247,815 3,306,424 Other 2,432,420 3,202,380 4,535,869 4,746,668 Operating grants and contributions 271,662 5,760,512 8,518,757 1,235,413 Capital grants and contributions 19,796,906(B) 19,138,278(B) 38,112,182(B) 26,781,118(B) Total business-type activities program revenues 57,011,442 65,345,708 96,868,753 77,840,549 Total primary government program revenues $ 101,049,883 $ 112,064,193 $ 174,673,247 S 148,108,166 ((( Notes: (A)County received grants for the purchase of environmentally sensitive lands and beach erosion;recorded as capital (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. 4(I (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 newjail. (L)Piper incentive of$4 million. (M)Increase in operating costs due to maintenance projects. (I)Received$16 million grant reimbursements for physical environment grants including beach restoration and stomtwater. (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). (Q)Received Neighborhood Stabilization Grant of$2.6 million. (R)Contribution of$4.2 milion for Sector 3 beach renourishment from Sebastian Inlet District. f 164 i Schedule 2 2007 2008 2009 2010 2011 2012 $ 15,506,424 $ 7,416,850 $ 25,837,007 $ 23,506,576 $ 21,324,680 $ 19,069,181 42,050,455(J) 70,973,212(K) 71,221,082 68,235,492 67,393,943 66,456,674 34,998,512(E) 27,974,837 813,580 1,405,690 1,353,074 2,424,109 26,173,989 25,742,974 23,711,653 20,861,672 22,300,819 23,629,799 950,024 4,583,763(L) 661,897 2,525,988 2,056,453 1,986,091 f 13,925,599 12,590,578 8,453,562 7,370,995 7,762,962 7,749,253 31,196,252(H) 9,510,029 24,559,117(0) 16,009,122 16,484,242 18,089,432 j 6,870,466 7,265,471 6,765,203 6,251,773 5,774,032 5,635,245 3,220,907(G) 2,764,803 2,906,802 2.714,422 2,526,114 2,350,241 174,892,628 168,822,517 164,929,903 148,881730 _ 146,976,319 147,390025 37,518,226 41,354,025(M) 37,523,097 34,748,276 33,818,640 34,246,967 10,331,431 11,355,697 10,407,437 10,683,984 10,370,476 10,659,004 3,084,837 2,775,497 2,937,141 2,715,607 2,537,665 2,451,603 3,703,658 3,010,668 2,168 894 1,858,420 1,623,862 1,487,515 54,638,152 58,495,887 53,036,569 50,006,287 48.350,643 48,845,089 $ 229,530,780 $ 227,318,404 $ 217,966,472 $ 198,888,017 $ 195,326,962 $ 196,235,114 f $ 7,957,770 $ 6,943,354 $ 6,028,321 $ 5,889,678 $ 5,845,567 $ 5,304,385 5,728,644 5,754,082 5,884,118 5,267,209 6,076,085 5,852,093 1,447,553 972,865 636,219 21,006 24,204 20,923 5,618,055 5,478,734 2,157,456(P) 1,514,132(P) 2,090,194 2,345,186 545,305 331,856 204,299 295,812 346,689 358,279 . 2,425,679 1,730,471 1,322,785 1,328,225 1,340,550 1 397,660 2,800,680 2,971,093 2,375,430 545,967 501,980 414,356 25,561,608(I) 15,227,659 11,077,388 15,772,265(Q) 7,926,832 8,230,411 13.441,915 29,165,641 (1) 15.032,731 7,016,429(R) 1,937,488 7,053,494 65,527,209 68,575,755 44,718,747 37,650,723 26.089,589 30,976,787 27,541,849 27,876,971 26,957,649 27,738,920 27,842,092 28,361,246 11,946,566 10,758,812 9,713,883 8,972,136 9,221,396 9,582,955 3,374,772 3,313,994 3,279,135 3,148,029 3,163,062 3,216,471 3,250,585 2,726,888 1,572,693 1,612,870 1,588,934 1,735,713 72,828 217,751 1,194,994 9,729,371 10,802,859 3,748,585 1,713,074 1,923,271 2,545,759 55,915,971 55,697,275 46,466,939 43,185,029 43,738,755 _ 45,442144 $ 121,443,180 $ 124,273,030 $ 91,185,686 $_ 80,835,752 $_ 69,828,344 $ 76,418,931 l i i Continued 165 Indian River County,Florida Changes in Net Position(Unaudited) Last Ten Fiscal Years (accrual basis of accounting) 2003 2004 2005 2006 Net(Expense)/Revenue Governmental activities $ (62,909,178) $ (78,452,480) (A) $ (45,018,031) $ (66,680,080) Business-type activities 18,530,515 (B) 18,995,376 (B) 40,743,658 (B) 25,633,506 Total primary government net expenses $ (44,378,663) $ (59,457,104) $ (4,274,373) $ (41,046,574) General Revenues and Other Changes in Net Position Governmental activities: Property taxes,levied for general purposes $ 60,139,514 $ 67,701,525 $ 71,698,850 $ 82,448,807 (C) i Property taxes,levied for debt service 2,595,265 2,427,908 2,480,497 2,465,462 Sales and use taxes 17,162,979 18,825,771 21,892,558 21,855,885 Franchise fees 6,222,326 6,720,166 7,941,020 9,318,394 State shared revenues 10,605,656 11,608,557 14,022,896 13,043,670 Insurance recoveries - - 3,666,960 1,104,116 Interest earnings 2,787,928 2,536,347 4,444,772 12,163,993 Miscellaneous 1,761,754 1,336,789 1,235,708 2,089,540 Transfers (157,870) (193,611) (193,365) 5,060,846 (D) }t Total governmental activities 101,117,552 110,963,452 127,189,896 149,550,713 t Business-type activities: State shared revenues - - - - Interest earnings 2,332,013 1,590,203 2,861,308 6,335,240 Miscellaneous 63,367 6,015 52,671 42,554 Transfers 157,870 193,611 193,365 (5,060,846) (D) Total business-type activities 2,553,250 1,789,829 3,107,344 1,316,948 j Total primary government $ 103,670,802 $ 112,753,281 $ 130,297,240 $ 150,867,661 { Change in Net Position Governmental activities $ 38,208,374 $ 32,510,972 $ 82,171,865 $ 82,870,633 l Business-type activities 21,083,765 20,785,205 43,851,002 26,950,454 Total primary government change in net position $ 59,292,139 $ 53,296,177 $ 126,022,867 $ 109,821,087 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. 11 (C)Taxable values increased by$2 billion. (D)Transfers for proportionate share of new County administration building. (E)Gain on sale of capital assets due to the privatization of the County landfill. l l i 166 L9I ZZ8`ihS I $ 95S`8b6 $ 9IL TOL`LI $ TO £8961 $ 755`590`95 $ 96Z IL£`19 $ ZLti`I9L Z £ZZ 289 Z 009`i55 5 £Lb`b6-6 h - 9bb 88� L — L8Z`8Z O 176Z`£007 $ 6LL`O£9`£ $ 91£`£5Z`£Z $ i£ti`6801 $ III`LLZ`59 $ 600`£ti9`OS $ S00`85£`IZI $ 77175 9ZI $ 78 ME S£I®$ 069 ti9t 9bi $ 1£6751765I $ 968 8S�-Tr69i$ £Lb`Iti9 599626 I-- 859`69�i £OI ti9—`T-- 850`L8�5£ — 89bOW6 L56`Z£ bbi`£49 596`SZ 906 ZS— b`L — SSS ISO Z 562 90— 1 OOb`8 (a) I59`Z9S 18 VOL £68`L VL£`98 959`b£I 911`009 OL8`£ZL ZIS`£LI`I 508`589`£ 6£Z`£99`5 LIS`60Z`6 i - 005`Lly Z£S`9i 0— 605 LITS VZ`i £Z£`b8— b ti T L8S`006 tiT— £L8£2'551 8Zb 80� 0 09— L56`Z£ tib1£b9 (996'5Z) 506`ZSti L SSS iSp Z (96Z'90 1 IOL`6L0`£ 18b`Z80`£ Stb`i90`Z 106`810`Z ££0`OLI`Z £I7£`£85`I Z10`899 t68`66Z`l £L8`6L0`Z £LS`LbL`S 610`Lb£`OI 068`700`91 908`806`Li L98`8Z£`LI £59`L8b`LI O9V'LZZ`ii LZZ`965`ii IZ17`89£`ZI IOti`OZ9`8 198`0£L`8 IZ9`VgZ`6 691`OL9`6 66£`£th`6 £LL`Z£L`6 OZ8`th1`OZ ££0`19Z`61 8ZL`ZZO`6I 6LI`Z6Z`6I 668`880`OZ ZO9`8£L`OZ £8I`bLS`5 L9L`009`5 9£S`££6`5 I£Z`t£I`L 08I`£17£`L 58V'V60`L 999`£9L`b9 $ O9L`958`69 $ £9b`OL9`8L $ 686`59Z`L8 $ I99`£8h`Z6 $ 60£`Z69`Z6 $ R8 1'918'611 $ 8i9 867 SZI $ S9Z`ZSO`8i I $ 987`087 9ZT $ bL£St0`£Oi $ 009`780`801 $ Sb6 ZW888`1 I9 ti 852 IZ8 9 0£9 699`9 Z19`86L`Z 618 LL—Z I (8£2`£17`911) $ (0£L`988`OZI) $ (L00`i£Z`I11) $ (9SI`iiZ`OZi) $ (297`972`001) $ (617`59£`601) $ ZiOZ ITOZ OIOZ 600Z 8002 LOOZ Z alnPauoS } Indian River County,Florida Fund Balances,Governmental Funds(Unaudited) Last Ten Fiscal Years (modified accrual basis of accounting) it 2003 2004 2005 2006 General Fund Reserved $ - $ $ - $ Unreserved 20,104,115 20,623,340 30,152,425 45,300,882 Total general fund $ 20,104,115 $ 20,623,340 $ 30,152,425 $ 45,300,882 All other governmental funds Reserved $ 40,667,031 $ 47,458,489 $ 50,257,972 $ 38,075,117 S Unreserved,reported in: Special revenue funds 69,317,385 74,344,120 115,822,479 183,318,603 Total all other governmental funds $ 109,984,416 $ 121,802,609 $ 166,080,451 $ 221,393,720 Total governmental funds $ 130,088,531 $ 142,425,949 $ 196,232,876 $ 266,694,602 General Fund Nonspendable 1 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. (B)Reclassified emergency/disaster and budget stabilization reserves from Committed to Unassigned fund balance categories. 1 1 168 { Schedule 3 2007 2008 2009 2010(A) 2011 2012 $ $ 8,000,000 $ 8,000,000 $ N/A $ NIA $ N/A 50,321,956 44,874,259 47,616,773 N/A N/A N/A $ 50,321,956 $ 52,874,259 $ 55,616,773 $ N/A $ N/A $ N/A $ 23,047,708 $ 49,667,320 $ 53,252,040 $ N/A $ N/A $ N/A N/A N/A N/A 149,564,925 96,950,614 91,600,421 N/A N/A N/A $ 172,612,633 $ 146,617,934 $ 144,852,461 $ N/A $ N/A $ N/A $ 222,934,589 $ 199,492,193 $ 200,469,234 $ N/A $ N/A $ N/A I $ 162,760 $ 363,619 $ 311,241 f 18,290 50,015 1,120,087 21,757,565 21,041,045 2,374,790(B) 1,415,000 1,660,000 1,808,000 33,160,873 33,694,612 48,722,929(B) 1 $ 56,514,488 $ 56,809,291 $ 54,337,047 $ 2,316,373 $ 814,858 $ 557,128 130,175,284 125,082,370 116,379,943 4,691,573 4,661,146 1,483,393 9,471,022 10,013,457 11,288,602 (1,184,722) (354,995) (202,971) $ 145,469,530 $ 140,216,836 $ 129,506,095 $ 201,984,018 $ 197,026,127 $ 183,843,142 I 169 Indian River County,Florida Changes in Fund Balances,Governmental Funds(Unaudited) Last Ten Fiscal Years (modified accrual basis of accounting) Revenues 2003 2004 2005 2006 Taxes $ 86,120,084 $ 95,675,370 $ 104,012,925 $ 116,088,548 Permits,fees,and special assessments 5,499,533 11,788,168 38,043,246 26,285,557 Intergovernmental 35,213,140 26,588,303 35,973,818 38,261,489 Charges for services 13,683,108 14,282,587 18,151,546 18,204,600 Judgments,fines and forfeits 1,584,737 1,508,786 1,715,875 2,069,593 j Interest 2,999,915 1,999,574 4,083,164 10,574,489 Miscellaneous 1,964,177 1,791,613 1,398,166 4,597,369 Total Revenues 147,064,694 153,634,401 203,378,740 216,081,645 Expenditures Current: General government 18,446,787 19,996,339 20,107,020 21,831,839 Public safety 47,565,048 55,792,130 57,045,359 65,975,870 Physical environment 17,613,489 1,751,551 2,989,117 8,955,262 Transportation 19,442,909 21,928,790 21,285,597 30,610,413 Economic environment 583,850 627,914 713,019 1,054,239 Human service 6,178,917 7,185,411 7,270,391 12,470,222 Culture/recreation 18,378,068 13,179,751 15,062,134 16,380,438 Court related 5,998,260 6,210,614 5,630,734 5,915,727 Debt service: Principal 2,881,492 2,394,142 2,239,663 2,615,659 Interest and fiscal charges 1,639,145 1,333,392 1,255,837 1,790,431 Capital outlay 12,228,005 10,994,900 15,779,577 37,848,475 Total Expenditures 150,955,970 141,394,934 149,378,448 205,448,575 11 Excess ofrevenues over (under)expenditures (3,891,276) 12,239,467 54,000,292 10,633,070 Other Financing Sources(Uses) Debt issuance 7,800,000 49,996,735 Payments to escrow agent (7,800,000) Payments from capital leases 291,562 Transfers out157,870 Transfers in out (157,870) (193,611) (193,365) (236,067) 10,067,988 Total other financing sources(uses) (157,870) 97,951 (193,365) 59,828,656 Net change in fund balances $ (4,049,146) $ 12,337,418 $ 53,806,927 $ 70,461,726 Debt service as a percentage of noncapital expenditures 4.4% 3.1% 3.0% 3.4% (A)Early call of remaining General Obligation Bonds,Series 2001 of$3.6 million. f 1 170 r Schedule 4 2007 2008 2009 2010 2011 2012 $ 130,158,069 $ 119,915,640 $ 113,689,399 $ 103,626,726 $ 94,718,550 $ 90,472,569 8,397,437 15,888,780 12,433,598 11,322,039 11,189,393 11,486,235 54,252,074 49,065,955 34,305,682 37,687,574 30,453,182 29,759,832 18,997,529 18,678,544 16,852,653 14,665,805 15,030,329 14,760,125 2,403,093 2,137,413 1,792,517 852,012 936,995 739,275 15,777,318 10,052,801 5,721,869 2,061,385 1,173,103 613,023 3,495,610 2,449,035 2,489,532 2,383,493 4,175,614 5,237,426 233,481,130 218,188,168 187,285,250 172,599,034 157,677,166 153,068,485 24,815,255 25,323,595 22,566,113 20,894,116 19,271,196 20,477,898 72,907,822 73,982,636 74,813,164 71,489,613 70,432,615 67,761,985 34,324,331 28,111,033 910,213 1,131,173 1,371,734 1,751,623 49,503,680 50,231,090 38,111,512 27,497,907 28,432,207 29,058,310 968,227 4,579,574 653,547 2,520,339 2,099,698 2,021,184 13,862,463 12,619,575 8,621,760 7,267,406 7,625,369 6,888,883 23,751,173 21,068,267 15,450,688 18,453,642 14,706,194 13,808,303 6,649,724 6,940,682 6,620,830 6,214,831 5,983,085 5,860,925 4,870,876 5,069,591 5,120,000 5,315,000 4,270,000 8,060,000 (A) 3,255,767 2,803,585 2,948,758 2,758,138 2,562,374 2,426,083 42,489,997 11,617,867 10,435,212 7,487,068 5,825,287 8,108,370 277,399,315 242,347,495 186,251,797 171,029,233 162,579,759 166,223,564 (43,918,185) (24,159,327) 1,033,453 1,569,801 (4,902,593) (13,155,079) 264,467 126,000 4I (19,736,023) (13,254,013) (14,366,145) (17,057,014) (8,918,267) (11,622,984) 19,629,728 13,844,944 14,309,733 17,001,997 8,862,969 11,595,078 158,172 716,931 (56,412) (55,017) (55,298) (27,906) ( $ (43,760,013) $ (23,442,396) $ 977,041 $ 1,514,784 $ (4,957,891) $ (13,182,985) 11 4.8% 5.0% 5.41/. 5.6% 5.0% 7.61/. I 1 171 Indian River County,Florida Tax Revenues by Source,Governmental Funds(Unaudited) Last Ten Fiscal Years (modified accrual basis of accounting) Schedule 5 Fiscal Year Property(A) Sales&Use Tourist Franchise(B) Gasoline Other Total 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 2011 75,457,517 12,942,483 1,487,060 - 3,346,362 1,485,128 94,718,550 2012 70,327,749 13,708,911 1,604,920 - 3,329,183 1,501,806 90,472,569 (A)The County's primary source of revenue is property taxes,amounting to 78 percent of Governmental Funds tax revenues in 2012. 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. r 172 f Indian River County, Florida Assessed Value and Actual Value of Taxable Properly(Unaudited) Last Ten Fiscal Years Schedule 6 j Real Personal Less: Total Taxable Total Fiscal Property Property Total Tax-Exempt Assessed Direct Year Actual Value Actual Value Actual Value Property Value Tax Rate I2003 $ 11,985,128,952 $ 694,305,280 $ 12,679,434,232 $ 3,178,543,019 $ 9,500,891,213 5.4713 2004 13,547,372,018 693,374,322 14,240,746,340 3,556,717,407 10,684,028,933 5.5181 2005 15,716,463,269 699,716,008 16,416,179,277 4,236,183,618 12,179,995,659 5.1563 2006 19,265,033,998 712,011,582 19,977,045,580 5,734,060,645 14,242,984,935 4.9173 2007 25,458,676,130 755,187,275 26,213,863,405 8,366,701,791 17,847,161,614 4.3250 2008 25,155,652,635 782,529,196 25,938,181,831 7,357,884,893 18,580,296,938 4.1037 2009 24,141,420,963 739,467,578 24,880,888,541 7,431,618,464 17,449,270,077 4.1493 2010 21,272,439,325 761,011,306 22,033,450,631 6,237,291,938 15,796,158,693 4.1666 2011 18,741,543,869 711,180,228 19,452,724,097 5,313,689,267 14,139,034,830 4.1625 2012 17,291,910,945 644,205,795 17,936,116,740 4,731,112,173 13,205,004,567 4.1625 ` Source: Indian River County Property Appraiser; values are established as of January 1 of the previous t calendar year, i.e.,January 1, 2011 taxable values apply to the fiscal year ending September 30, 2012. I 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. I 173 Indian River County,Florida Property Tax Rates Direct and Overlapping Tax Rates(Unaudited) Last Ten Fiscal Years County direct rate 2003 2004 2005 2006 General fund 3.8729 3.8377 3.6233 3.5204 Municipal service 1.5984 1.6804 1.5330 1.3969 Total direct rate(A) 5.4713 5.5181 5.1563 4.9173 County-wide district school board rate 8.7320 8.7100 8.4990 8.2400 Other County-wide rates Emergency Management Services District 2.2750 2.1871 1.9836 1.9911 Land acquisition bond 0.2839 0.2344 0.2106 0.1789 Total other County-wide rates 2.5589 2.4215 2.1942 2.1700 Total County-wide rate(B) 16.7622 16.6496 15.8495 15.3273 s City rates (( Fellsmere 5.7500 5.7500 5.7500 5.7500 Indian River Shores 1.4370 1.4730 1.4730 1.4730 Sebastian 4.5904 4.5904 4.5904 3.9325 Orchid 0.9354 0.8954 0.7508 0.6900 Vero Beach 2.1425 2.1425 2.1425 2.2925 Average of cities rates 2.9711 2.9703 2.9413 2.8276 Other special district rates 1.9008 2.1548 1.8923 1.6082 (A)Per Florida State Statute 200.071,no ad valorem tax millage shall be levied against real property I and tangible personal property by counties in excess of 10 mills,except for voted levies. (((( (B)Total County-wide rate is home by all property owners within the County boundaries. Source:Indian River County Property Appraiser l 174 Schedule 7 { 2007 2008 2009 2010 2011 2012 3.1914 3.0202 3.0689 3.0892 3.0892 3.0892 1.1336 1.0835 1.0804 1.0774 1.0733 1.0733 4.3250 4.1037 4.1493 4.1666 4.1625 4.1625 f7.4430 7.5380 7.0400 7.5960 8.2500 8.2440 1.7639 1.7201 1.7148 1.7148 1.7148 1.7148 0.4108 0.4082 0.4220 0.3879 0.4087 0.4364 2.1747 2.1283 2.1368 2.1027 2.1235 2.1512 { 13.9427 13.7700 13.3261 13.8653 14.5360 14.5577 11 5.7500 4.4301 4.4300 4.4300 4.4300 5.2455 1.4730 1.3923 1.3923 1.3923 1.4105 1.4731 3.0519 2.9917 3.3456 3.3456 3.3041 3.3041 0.4525 0.4494 0.4550 0.4550 0.4550 0.4550 2.1425 1.9367 1.9367 1.9367 1.9367 2.0336 2.5740 2.2400 2.3119 2.3119 2.3073 2.5023 1.4795 1.3817 1.5362 1.7515 1.7663 1.6856 I f 4 I t I 1 175 I Indian River County,Florida Principal Property Taxpayers(Unaudited) Year 2012 and Year 2003 Schedule 8 2012 2003 I Real Percentages Real Percentages Property of Total Property of Total Assessed Assessed Assessed Assessed Taxpayer Valuation Rank Valuation Valuation Rank Valuation Florida Power&Light $ 91,641,112 1 0.69 $ 61,098,500 2 0.64 Disney Vacation Dev.Inc. 72,277,441 2 0.55 69,069,073 1 0.73 Windsor Properties 41,937,736 3 0.32 50,376,579 4 0.53 Johns Island Club Inc. 39,861,626 4 0.30 30,849,571 7 0.32 BellSouth Telecomm Inc. 39,388,979 5 0.30 58,655,192 3 0.62 Adult Community Services Inc. 32,998,710 6 0.25 30,514,130 8 0.32 Sebastian Hospital Inc. 29,529,181 7 0.22 I.R.Mall Associates Ltd. 26,761,350 8 0.20 47,574,020 5 0.50 Fellsmere Joint Venture 25,721,703 9 0.19 Health Care REIT Inc 23,000,900 10 0.17 The New Piper Aircraft - - 34,121,169 6 0.36 Horizon Outlet Center Ltd. - - 29,737,070 9 0.31 Wal-Mart Stores - - 28,577,908 10 0.30 Total Principal Property Taxpayers Real Property Assessed Valuation $ 423,118,738 3.20% $ 440,573,212 4.64% ! Total County Taxable Valuation $ 13,205,004,567 $ 9,500,891,213 (from schedule 6) f Source:Indian River County Property Appraiser l 176 Indian River County,Florida Property Tax Levies And Collections(Unaudited) Last Ten Fiscal Years Schedule 9 Percent of Percent of Total Current Current Tax Delinquent Total Total Tax Tax Tax Collections Tax Tax Collections Year Levy Collections To Tax Levy Collections(1) Collections To Tax Levy 2003 $ 65,289,186 $ 62,668,552 95.99% $ 7,797 $ 62,676,349 96.00% 2004 72,306,331 69,906,761 96.68 176,345 70,083,106 96.93 2005 76,748,078 73,991,702 96.41 111,220 74,102,922 96.55 2006 87,754,823 84,736,835 96.56 34,344 84,771,179 96.60 j 2007 102,986,045 99,404,127 96.52 61,566 99,465,693 96.58 2008 103,700,766 99,716,496 96.16 48,241 99,764,737 96.20 2009 97 439,623 94,107,423 96.58 273,002 94,380,425 96,86 2010 87,360,868 84,431,741 96.65 171,392 84,603,133 96.84 2011 77,790,733 75,215,452 96.69 290,472 75,505,924 97.06 2012 72,668,518 70,200,922 96.60 133,385 70,334,307 96.79 All taxes are due and payable on November 1 of each year or as soon thereafter as the assessment roll is certified and delivered to the Tax Collector. All unpaid taxes become delinquent on April 1 following the year in which they are assessed. Discounts are allowed for early payment at the rate of 4%in the month of November,3%in the month of December,2%in the month of January and 1%in the month of February. The taxes paid in March are without discount. (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. i I I 177 Indian River County,Florida Ratios of Outstanding Debt by Type(Unaudited) 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) 2003 $ 17,725,000 $ 417,518 $ 15,990,000 $ 6,735,000 $ - $ 72,760,000 f I 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 f 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 2011 39,815,000 - 11,705,000 2,655,000 - 46,860,000 f 2012 32,385,000 - 11,075,000 2,120,000 - 43,770,000 (A)General Obligation Bonds include Series 2001 and Limited General Obligation Bonds, Series 2006. The remaining balance of the 2001 issue was called early on July 1, 2012. This information is also presented on Schedules 11 and 13. (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 i Further information may be found in Note 13. Source for per capita income is University of Florida, Bureau of Economic and Business Research. I f 178 Schedule 10 Percentage Total of Total Debt Debt 4 Primary to Personal Per Government Income(E) Capita(E) C $ 113,627,518 2.33% $ 938 108,979,938 1.86 859 100,528,512 1.57 773 1 143,593,786 2.05 1,062 135,923,616 1.74 973 127,793,126 1.67 902 117,510,000 1.54 831 108,815,000 1.62 788 101,035,000 1.43 728 89,350,000 (D) 644 179 Indian River County,Florida Ratio of Net General Bonded Debt Outstanding to Taxable Value and Net Bonded Debt per Capita(Unaudited) Last Ten Fiscal Years Schedule 11 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 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 f 2009 141,475 17,449,270,077 48,210,000 2,841,769 45,368,231 0.0026 320.6802 2010 138,028 15,796,158,693 43,480,000 1,845,314 41,634,686 0.0026 301.6394 2011 138,694 14,139,034,830 39,815,000 1,743,781 38,071,219 0.0027 274.4980 2012 138,694 * 13,205,004,567 32,385,000 1,002,540 31,382,460 0.0024 226.2712 f (A) Columns are provided as additional information for General Obligation Bonds (G.O.B.), Series 2001 and Limited G.O.B., Series 2006. The remaining balance of the 2001 issue was called early on July 1,2012. Total taxable values are also presented in Schedule 6. Gross G.O.B. debt is also presented on Schedules 10 and 13. Source of population data is the University of Florida,Bureau of Economic and Business Research. *2012 population unchanged from 2011 due to data not available at time of printing 1 180 Indian River County,Florida Computation of Legal Debt Margin(Unaudited) ( September 30, 2012 Schedule 12 I 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. l l 1 1 1 I(I t l i C I 181 Indian River County,Florida Direct and Overlapping Governmental Activities Debt(Unaudited) Se tember 30,2012 Schedule 13 Governmental Unit Share of Debt Percentage Overlapping Debt repaid with property taxes: Outstanding Applicable Debt Indian River County Limited General Obligation Bonds, Series 2006 $ 33,200,714 100 $ 33,200,714 Total direct debt of County: 33,200,714 I Indian River County School District General Obligation Bonds,2002 Refunding 4,750,000 (A) 100 4,750,000 1 Other debt: Indian River County School District Certificates of Participation 127,629,571 (A) 100 127,629,571 Indian River County School District Capital Lease Payable 689,849 (A) 100 689,849 Total overlapping debt: 133,069,420 Total direct and overlapping debt: $ 166,270,134 l (A) Indian River County School District,as of June 30,2012 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. 182 c��RCOG �IAR1�4' { Indian River County,Florida ! Pledged Revenue Coverage(Unaudited) Water and Sewer Revenue Bonds (Series 1993A, 1996,2005,2009) Last Ten Fiscal Years Uniform Charges 2003 2004 2005 2006 Water sales $ 10,108,045 $ 11,037,623 $ 12,146,416 $ 13,336,623 Wastewater sales 8,940,200 9,439,597 10,437,091 11,634,181 Other 1,314,453 1,426,112 1,685,502 1,744,486 Total uniform charges 20,362,698 21,903,332 24,269,009 26,715,290 Septage/Sludge 348,320 278,897 269,575 332,329 1 Surcharges 243,342 234,746 242,451 244,166 Interest earnings 1,797,260 1,269,838 2,264,132 4,554,419 1989/1990 Special assessments 11,650 1,564 60,229 1996 Special assessments 2,752,661 1,539,600 722,922 350,712 f Gross revenues 25,515,931 25,227,977 27,768,089 32,257,145 (I Less:Direct expenses 10,723,548 12,507,398 12,853,872 14,270,414 Net revenues available for debt service $ 14,792,383 $ 12,720,579 $ 14,914,217 $ 17,986,731 Annual debt service Principal $ 1,765,000 $ 1,855,000 $ 2,020,000 $ 2,390,000 Interest 4,021,989 3,936,019 3,525,573 3,157,260 Total debt service payment $ 5,786,989 $ 5,791,019 $ 5,545,573 $ 5,547,260 Debt service coverage 2.56x 2.20x 2.69x 3.24x 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. f 1 184 I Schedule 14 I 2007 2008 2009 2010 2011 2012 $ 13,529,341 $ 13,435,398 $ 13,001,743 $ 13,570,657 $ 13,565,766 $ 13,621,878 ( 12,003,677 12,128,706 11,954,333 12,375,346 12,203,750 12,515,394 1,386,198 1,460,143 1,285,605 1,430,966 1,639,985 1,727,411 26,919,216 27,024,247 26,241,681 27,376,969 27,409,501 27,864,683 290,955 256,785 294,459 302,187 314,969 373,616 243,919 245,343 244,619 245,011 245,245 246,298 6,576,873 3,650,480 2,110,031 686,776 491,260 315,377 21,138 112 413 438 8,718 - ( 268,883 220,754 184,272 151,316 93,513 75,037 34,320,984 31,397,721 29,075,475 28,762,697 28,563,206 28,875,011 16,226,651 17,147,444 17,057,273 16,007,055 15,404,503 15,657,085 ( $ 18,094,333 $ 14,250,277 $ 12,018,202 $ 12,755,642 $ 13,158,703 $ 13,217,926 $ 2,505,000 $ 2,620,000 $ 2,745,000 $ 2,870,000 $ 2,990,000 $ 3,090,000 3,041,150 2,922,950 2,047,513 2,510,910 2,324,525 2,193,450 $ 5,546,150 $ 5,542,950 $ 4,792,513 $ 5,380,910 $ 5,314,525 $ 5,283,450 3.26x 2.57x 2.51x 2.37x 2.48x 2.50x I I i 1 185 Indian River County,Florida Pledged Revenue Coverage(Unaudited) 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(C) Total Coverage t 2003 $ 3,135,478 $ 2,326,179 $ 809,299 $ 375,000 $ 357,103 $ 732,103 1.11 l 2004 3,105,806 2,474,969 630,837 410,000 202,155 612,155 1.03 2005 3,252,414 2,590,759 661,655 450,000 188,307 638,307 1.04 2006 3,324,127 2,554,640 769,487 460,000 179,291 639,291 1.20 2007 3,396,639 2,670,309 726,330 475,000 170,016 645,016 1.13 2008 3,327,236 2,390,018 937,218 485,000 159,753 644,753 1.45 2009 3,292,170 2,581,254 710,916 490,000 147,516 637,516 1.12 2010 3,157,520 2,393,964 763,556 510,000 133,889 643,889 1.19 2011 3,170,572 2,246,881 923,691 520,000 126,302 646,302 1.43 2012 3,220,559 2,180,964 1,039,595 535,000 109,301 644,301 1.61 (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. (C)Effective 1/l/11,interest expense includes 3%interest paid on an interfund loan for the purchase of golf carts. Note:Details regarding the County's outstanding debt can be found in the Notes to the Financial Statements. I I 186 f t Indian River County,Florida Demographic and Economic Statistics(Unaudited) Last Ten Years Schedule 16 Total Per Capita Personal Personal Unemployment Year Population(A) Income(B) Income(B) Rate(C) 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 I 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 7,610,327,000 47,689 15.2 2010 138,028 6,737,286,000 48,726 15.2 2011 138,694 7,080,348,000 50,977 13.7 ( 2012 138,694 * (D) (D) 11.3 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 i (D)Information not available * 2012 population unchanged from 2011 due to data not available at time of printing The population and personal income information is used in Schedule 10 for calculation of Debt fPer Capita and Percentage of Debt to Personal Income. I 4 187 Indian River County,Florida f Principal Employers (Unaudited) Year 2012 and Nine Years Ago Schedule 17 2012 Percentage Number of of Total County Employer Employees Employment (` School District of Indian River County 2,013 3.55 Indian River County * 1,354 2.39 Indian River Medical Center 1,608 2.83 Publix Supermarkets 1,006 1.77 Piper Aircraft Inc. 700 1.23 Sebastian River Medical Center 569 1.00 1 John's Island 550 0.97 City of Vero Beach 492 0.87 Visiting Nurse Association 399 0.70 Indian River Estates 350 0.62 Total 9,041 15.93% Total County Employees 56,732 2003 Percentage Number of of Total County Employer Employees Employment School District of Indian River County 1,940 3.81 Indian River Memorial Hospital 1,451 2.85 Indian River County* 1,372 2.70 The New Piper Aircraft 1,000 1.96 Publix Supermarkets 715 1.40 City of Vero Beach 681 1.34 + Wal-Mart 672 1.32 Hale Groves 500 0.98 f John's Island 475 0.93 Gracewood Fruit 465 0.91 Total 9,271 18.20% Total County Employees 50,904 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. 188 FIARI�4' Indian River County,Florida Building Permits (Unaudited) Last Ten Fiscal Years Indian River County Mumci- Fiscal #of New # of Additions & # of New Year Permits Construction Permits Alterations Permits Construction 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 1 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 2011 416 96,301,948 2,288 26,368,020 112 27,812,429 i 2012 421 95,703,031 2,591 25,060,272 150 37,380,374 i 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. f I I S 190 i Schedule 18 palities Countywide # of Additions & #of New #of Additions & Permits Alterations Permits Construction Permits Alterations 4,141 $ 37,578,377 2,854 $ 514,871,537 5,523 $ 66,395,897 4,395 47,075,876 4,662 824,876,069 6,330 93,249,722 13,062 119,403,505 5,917 966,108,386 17,471 176,953,400 7,072 65,822,951 4,586 940,373,663 12,702 109,721,626 3,712 53,482,334 1,673 387,155,954 7,611 91,772,466 2,850 40,039,893 1,063 326,379,830 5,536 70,771,128 2,188 34,072,491 564 138,734,040 3,913 51,174,803 2,948 32,545,131 516 113,044,340 4,965 53,268,856 2,973 42,087,897 528 124,114,377 5,261 68,455,917 3,271 43,011,051 571 133,083,405 5,862 68,071,323 I I I 191 Indian River County,Florida Operating Indicators by Function/Program(Unaudited) Last Ten Fiscal Years Function/Program 2003 2004 2005 2006 General Government 1 Purchasing 2,563 2,800 2,554 2,734 1 Purchase orders issued Probation 731 N/A N/A N/A New cases received Public Safety !I Fire rescue Vehicle rescue response 10,700 11,467 10,602 6,880 j Fire code inspections 2,497 2,514 2,215 2,420 t( Advanced life support calls 6,697 7,222 5,623 10,728 Basic life support calls(transport only) 4,090 4,340 4,606 11,105 Sheriff Arrests 4,181 4,979 5,172 5,211 Violent crimes 290 359 300 652 Non-violent crimes 2,979 2,805 3,930 3,462 Total calls for service 149,202 130,847 122,893 131,489 Building department f Construction permits issued 2,084 3,889 4,770 3,760 Estimated value of construction(millions) $ 386.5 $ 642.0 $ 704.0 $ 754.8 Physical Environment } Solid waste Waste stream tonnage received 277,622 349,538 529,238 380,109 Total recycled material(tons) 81,006 72,568 129,869 70,919 Utilities-water&sewer Number of water customers 27,849 33,793 34,867 43,477 Number of wastewater customers 17,293 19,786 20,237 25,943 Water ERUs 44,420 46,254 53,032 54,070 Wastewater ERUs 32,432 33,250 38,387 41,351 1 Water consumption(Average Daily Demand) 7,586,000 7,660,000 7,780,000 8,370,000 (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. C 192 i Schedule 19 2007 2008 2009 2010 2011 2012 ( 2,753 2,520 2,463 1,970 1,805 1,852 N/A N/A N/A N/A N/A N/A 32,488(A) 33,845 34,480 34,529 37,550 39,316 2,593 3,527 5,917 2,358 2,239 1,874 7,537 5,862 9,085 9,751 10,935 10,904 3,643 5,759 3,486 3,269 3,077 3,406 5,012 5,620 4,331 5,065 4,464 3,144 338 353 340 310 394 107 6,192 6,383 6,099 5,719 6,058 6,063 126,490 129,389 138,998 154,480 162,944 176,170 1,404 857 442 394 416 421 $ 280.1 $ 222.2 $ 97.7 $ 83.0 $ 96.3 $ 95.7 295,977 239,296 207,344 201,561 180,434 205,355 57,247 42,088 40,931 45,298 30,424 53,255 41,101 42,000 42,972 43,723 44,254 44,571 24,666 25,000 25,192 25,205 25,465 25,773 61,494 61,558 63,147 64,146 64,391 64,820 45,396 45,785 45,319 45,427 45,863 46,107 8,790,000 8,603,000 8,700,000 8,225,000 8,198,000 7,798,000 4 I C Continued 193 Indian River County,Florida Operating Indicators by Function/Program(Unaudited) Last Ten Fiscal Years Function/Program Transportation 2003 2004 2005 2006 Public works Projects under design 8 3 4 5 Projects awarded for construction 2 3 0 4 Construction projects completed 3 5 0 4 County engineering Roads designed 12 12 6 11 Miles of roads designed 6.40 6.50 1.71 6.50 Traffic engineering Site plans reviewed 1,053 1,103 1,274 1,135 Culture/Recreation �- Library Circulation(County-wide) 1,012,852 1,012,241 1,079,206 1,140,904 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 101,182 95,711 89,000 93,088 Shooting range Safety/Registration cards issued 4,929 4,616 3,718 6,036 Golf course Rounds played 108,684 106,871 97,465 107,048 Court Related Law library Circulation 21,172 25,627 26,481 26,255 l_ 1 I . i I E 194 i Schedule 19 2007 2008 2009 2010 2011 2012 5 6 29 13 26 19 5 5 5 7 7 10 5 5 12 6 8 8 7 8 5 6 4 4 3.50 6.00 5.00 6.00 1.00 8.00 520 332 423 271 218 290 1,188,366 1,250,075 1,314,372 1,403,367 1,362,857 1,277,253 N/A 415,051 437,302 467,434 449,213 420,609 N/A 8,673 14,730 23,750 24,112 23,979 90,503 90,475 89,787 87,107 98,515 97,965 6,784 6,784 9,050 6,471 8,176 8,302 100,539 104,716 101,810 96,593 94,713 96,723 24,759 21,107 18,512 13,079 9,168 9,428 I V C I I 195 Indian River County,Florida Full-Time Equivalent County Government Employees by Function/Program(Unaudited) Last Ten Fiscal Years General Government 2003 2004 2005 2006 Board of County Commissioners 10 10 10 10 County Attorney 6 6 6 6 Administration 3 3 3 3 Financial/Administrative Service 23.5 23.5 23.5 24.5 Comprehensive Planning 19 20 23 23 Other 50 46 42 50 Clerk of Circuit Court 104.5 106 108 113 Property Appraiser 47 47 47 49 Supervisor of Elections 10 11.5 11.5 11.5 1 Tax Collector 35 40 40 40 Public Safety Fire Department 142.5 142.5 144.5 233 Advanced Life Support 82 82 82 (A) Sheriff-Corrections 121 128 130 200 Sheriff-Court Service 37.5 25.5 25.5 26 Sheriff-Law Enforcement 261 273 276 276 Building Department 23 29 45 49 Other 22 19.5 17.5 11 Physical Environment Solid Waste 54 54 53 53 II Utilities-water and sewer 122 125 126 131 l Other 8 8 11 13 Transportation Road and Bridges 98 99 100 103 County Engineering 28 29 33 39 Traffic Engineering 20 20 22 24 Real Estate Acquisition 0 0 0 0 Economic Environment 6 6 6 6 Human Services 14 15 15 17 Culture/Recreation Libraries 51 51 51 51 Parks 37 37 39 43 Recreation Department 54 55 56.5 56 l Coastal Engineering 0 0 3 3 Shooting Range 6 6 6 6 Golf Course 26.5 22.5 22 21.5 Court Related j Law Library I I I I (I Total 1,522.5 1,541 1,579 1,692.5 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. Totals include unfilled positions. (A)The fire and advanced life support departments were consolidated on September 18,2006. I+I 196 Schedule 20 2007 2008 2009 2010 2011 2012 s 10 11 10 10 10 8.5 7 7 7 6 6 6 3 3 3 2.72 2.35 2.35 25.5 26.5 22.5 21.5 19.85 19.85 23 23 19 16 14.32 15 62 49 44.5 36.5 34 34.75 118 116 99.5 98.5 98 96 50 45 40 40 36 35 12 12 9.5 9.5 8 8.5 l 40 38 38 38 38 38 232 241 240 246 244 243 197 197 195 198 207 163 29.5 29.5 29.5 29.5 29.5 27.5 301 301 301 301 301 303 50 33 18 17 15 14 12 12 10 9 6.68 6 53 51 49 49 10 9 139 130 128 118 112.5 112.5 14 15 9 9 8 8 106 100 86.5 80 77 77.25 42 42 33 28 27 26 ! 26 24 21 21 20 20 0 3 2 2.28 1 1 6 4.5 3.5 3.5 2.5 2.5 15 15 14.5 13 13 13 52.5 50 45.5 47.5 46.5 42 42 41 39 37 34 28 58.5 57.5 46 37.5 33.3 39.8 3 3 3 2 2 2 6 5.5 5.5 5.5 5 5 1 21.5 18 16.5 15.5 15.5 15 1 1 1 1 1 1 1 1,757.5 1,704.5 1,589.5 1,549 1,478 1,422.5 1 e 197 Indian River County,Florida Capital Asset Statistics by Function/Program(Unaudited) Last Ten Fiscal Years Function/Program 2003 2004 2005 2006 General Government Buildings and grounds Total square footage maintained 493,270 493,270 493,270 493,270 I Number of facilities and sites maintained 42 43 43 43 Vehicles 13 17 18 18 General government Vehicles 23 27 32 36 Planning Vehicles 3 GIS 3 6 6 Vehicles Public Safety Fire department Vehicles 35 41 43 49 Fire stations I I I I I I I1 Advanced life support Vehicles 19 21 E911 Center 25 24 Vehicles Sheriff Vehicles 227 241 252 274 Building department Vehicles 13 16 27 29 Physical Environment Solid waste Vehicles 28 32 32 33 Telecommunications Vehicles Ag Extension Vehicles 1 2 2 2 Utilities-water and sewer Vehicles 62 74 84 90 Water treatment plants 2 2 2 2 Wastewater treatment facilities 7 7 7 7 Water main-miles N/A N/A N/A 737 Force main-miles N/A N/A N/A 188 Gravity sewer lines-miles N/A N/A N/A 250 Transportation Road and bridge Miles maintained(paved&unpaved) 601 609 614 614 Bridges maintained 78 78 78 78 Vehicles 51 59 61 66 Source:Internal reports prepared by the various departments of Indian River County. 198 I Schedule 21 2007 2008 2009 2010 2011 2012 715,215 715,215 715,215 715,215 715,215 720,215 47 47 47 47 47 48 1 17 17 15 IS 15 15 37 28 27 26 31 31 7 7 7 7 7 6 1 1 1 1 1 54 53 54 51 51 51 11 11 11 12 12 12 21 20 20 17 18 18 1 1 1 1 1 276 295 291 288 298 295 22 13 9 9 9 9 34 32 30 30 1 1 1 1 1 1 1 2 2 2 1 1 1 86 82 82 81 81 85 2 2 2 2 2 2 6 6 6 6 6 6 769 780 819 845 839 843 217 240 230 226 229 223 259 261 262 269 271 270 617 625 628 636 636 638 78 78 78 78 78 78 68 65 65 64 67 67 t 1 f II i Continued 199 Indian River County,Florida Capital Asset Statistics by Function/Program(Unaudited) Last Ten Fiscal Years Function/Program 2003 2004 2005 2006 Transportation-continued: Senior Resource Association Vehicles 9 10 20 22 Engineering Vehicles 8 9 9 11 Traffic engineering Traffic signals operated 114 119 122 125 Beacons operated 41 42 37 42 Vehicles 5 6 6 6 Traffic operations Vehicles 10 10 10 10 Human Services Health department Vehicles 14 14 17 16 i Animal Control II Vehicles 2 5 5 6 Rental Assistance Vehicles 2 2 3 3 Culture/Recreation Libraries Locations 2 2 Paries 2 2 Number of neighborhood parks 12 12 12 12 Number of County parks 37 35 47 47 Acreage 3,869 3,857 3,994 4,004 Picnic shelters maintained 62 59 64 66 Boat ramps maintained 8 8 8 8 Vehicles 16 20 iJ 22 23 Recreation Vehicles 4 4 4 5 Shooting range Vehicles I I 1 0 l Rifle range stations 29 29 29 0 Pistol range stations 35 35 35 35 Golf Course Holes maintained 36 36 36 36 Vehicles 1 2 2 2 I 200 f Schedule 21 2007 2008 2009 2010 2011 2012 r 25 23 25 32 34 34 ( 12 17 16 16 16 13 132 133 133 137 137 137 42 41 48 48 53 46 3 5 3 1 1 1 16 16 15 16 18 18 16 16 16 15 15 17 7 7 7 7 7 7 2 2 2 2 2 2 2 2 2 3 3 3 12 12 12 12 12 12 47 47 47 47 47 47 4,014 4,014 4,014 4,014 4,014 4,014 69 69 69 69 69 69 8 8 8 8 8 8 25 24 25 24 25 24 5 5 5 5 5 5 11 1 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 i' l i 201 Indian River County,Florida Department of Utility Services Historical Rate Structure(Unaudited) Last Ten Fiscal Years Schedule 22 Fiscal Years 2003-2012* 4 WATER RATES f Billing charges Base facilities charges(per ERU) $ 1.29 !f Single-family or commercial 7.76 Multi-family or manufactured home 6.60 Volume charge-per 1,000 gallons(per ERU) 0-3,000 gallons 2.20 3,000-7,000 gallons 2.42 7,001 gallons and over 3.85 Excess volume surcharge-greater than 13,000 gallons per month(per ERU) 7.70 Base facilities charge where capacity is reserved but lines are not yet available(per ERU) Single-family or commercial 3.88 Multi-family or manufactured home 3.30 SEWER RATES Billing charges 1.29 Base facility charge(per ERU) Single-family or commercial 14.58 Multi-family or manufactured home 12.40 Volume charge-per 1,000 gallons Single-family&manufactured home(1,000-12,000) 2.86 Multi-family&commercial(0-13,000) 2.86 Multi-family&commercial(>13,000) 4.29 Base facilities charge where capacity is reserved but lines are not yet available(per ERU) Single-family or commercial 7.29 Multi-family or manufactured home 6.20 *The last change to the County's water and sewer rates occurred on October 1, 1999. 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. i l 202 Indian River County,Florida Water and Wastewater Customers(Unaudited) 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 2003 through 2012 as set forth below: Fiscal Year Water ERUs Wastewater ERUs 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 3 2010 64,146 45,427 I 2011 64,391 45,863 2012 64,820 46,107 Source: Indian River County Utilities Department 1 f 203 Indian River County,Florida Top 10 High Volume Customers of Utility Services (Unaudited) Fiscal Year 2012 Schedule 24 I Below is a table depicting the ten highest volume customers of the utility system for the fiscal year ended September 30, 2012: Annual Water Annual Wastewater Volume Volume Customer (x 1,000 gals.) (x 1,000 gals.) 1. Vista Royale 27,601 27,601 2. IRC School Board 25,145 20,364 l 3. City of Fellsmere (Wastewater Only) - 23,372 I 4. Acts, Inc 23,078 23,078 5. Disney's Vero Beach Resort 21,843 21,843 f 6. MHC Village Green LLC 20,121 20,121 7. IRC Facilities Management/Jail 15,050 15,050 8. Vista Plantation 11,773 11,773 9. Vista Gardens 11,765 11,765 j 10. Palms of Vero Beach LTD 11,621 11,621 2 1 Source: Indian River County Utilities Department 204 f Indian River County,Florida Capacity Charges -Utilities Department(Unaudited) 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: Wastewater Water Capacity Capacity Total Fiscal Year Charges Charges Charges 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 2011 485,225 462,114 947,339 ( 2012 585,490 755,838 1,341,328 (A)Large increase in capacity charges due to construction boom. I I 1 205 Indian River County,Florida Pledged Revenues for Recreational Revenue Refunding Bonds, Series 2003 (Unaudited) Last Ten Fiscal Years Schedule 26 L Racetrack 7%of Fiscal and Jai Alai Half-Cent Year Fronton Funds Sales Tax J 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 2011 446,500 495,257 2012 446,500 518,902 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. 206 i Indian River County,Florida Pledged Revenues for Spring Training Facility Revenue Bonds, Series 2001 (Unaudited) 1 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) 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 2011 500,004 1,487,061 363,233 7,075,101 2012 500,004 1,604,919 401,230 7,412,887 (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. I 1 207 �1oRroA I 5070 North Highway AIA 11Rehmann Suite 250 Vero Beach,FL 32963 Ph:772.234.8484 Fx:772.234.8488 www.rehmann.com I Independent Auditors' Report on Internal Control over Financial Reporting and on Compliance and Other Matters Based on an Audit of Financial Statements Performed in Accordance with Government Auditing Standards The Honorable Board of County Commissioners Indian River County, Florida We have audited the financial statements of the 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, 2012, and have issued our report thereon dated March 12, 2013. 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 Management of the County is responsible for establishing and maintaining effective 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. 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. I ,�s&`�Io-,u,ltmi Wealth Advisers corporate Investigators � ` INTERNATIONAL 209 F6) jRehmann I I The Honorable Board of County Commissioners Indian River County, Florida Page two 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 12, 2013 I l 210 C P" Ike h m a n n Sate North0 h Highway AIA Vero Beach,FL 32963 Ph: 772.234.8484 Fx: 772.234.8488 www.rehmann.com Management Letter The Honorable Board of County Commissioners Indian River County, Florida We have audited the financial statements of the governmental activities, the business-type activities, each major fund, and the aggregate remaining fund information of Indian River l County, Florida (the "County") as of and for the year ended September 30, 2012 and have issued our report thereon dated March 12, 2013. 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 Chapter 10.550, Rules of the Auditor General, and Schedule of Findings and Questioned Costs. Disclosures in those reports and schedule, which are dated March 12, 2013, should be considered in conjunction with this management letter. We have also issued separate management letters dated March 12, 2013 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.), 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 make any such recommendations. u,i--.s 8 Wealth Acivi ors Corporate Investigators INTERNATIONAL 211 Re h m a n n The Honorable Board of County Commissioners Indian River County, Florida Page two ! 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 identify any such findings. 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 identify 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, 2012. I As required by the Rules of the Auditor General (Section 10.554(1)(i)7.b.), the annual financial report for the fiscal year September 30, 2012, 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. Our management letter is intended solely for the information and use of the Legislative Auditing Committee, members of the Florida Senate and the Florida House of Representatives, the Florida Auditor General, federal and other state granting agencies, and applicable management within the entity, and is not intended to be and should not be used by anyone other than these specified parties. 4"41-440-� Vero Beach, Florida March 12, 2013 212 ® ] w � 5070 North Highway AIA (��r Suite 250 Vero Beach,FL 32963 Ph:772.234.8484 Fx: 772.234.8488 www.rehmann.com Independent Auditors' 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 Chapter 10.550, Rules of the Auditor General 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 OMB Circular A-133 Compliance Supplement and the requirements described in the Florida Department of Financial Services' State Projects Compliance Supplement that could have a direct and material effect on each of its major federal programs and state projects for the year ended September 30, 2012. The County'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 the County'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; and Chapter l 10.550, Rules of the Auditor General. Those standards, OMB Circular A-133, and Chapter 10.550 l 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, 2012. 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 & r * VUealri:Advisors (,r ri)orate Investigators ;PAs C;orsuLan�s INTERNATIONAL 213 M P,.,e h m a n n Honorable Board of County Commissioners Indian River County, Florida Page two 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 and Chapter 10.550 Rules of the Auditor General, 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. The A deficiency in internal f 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. 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 Beach, Florida March 12, 2013 1 214 ® 5070 North Highway AIA ® e m a n n Suite 250 Vero Beach,FL 32963 Ph:772.234.8484 Fx: 772.234.8488 www.rehmann,com .L INDEPENDENT AUDITORS' REPORT ON THE SCHEDULE OF EXPENDITURES OF FEDERAL AWARDS AND STATE PROJECTS The Honorable Board of County Commissioners Indian River County, Florida We have audited the financial statements of the governmental activities, the business-type activities, each major fund, and the aggregate remaining fund information of the Indian River County, Florida (the "County") as of and for the year ended September 30, 2012, which collectively comprise the basic financial statements, and have issued our report thereon dated March 12, 2013. Our audit was conducted for the purpose of forming opinions on the financial statements that collectively comprise the County's basic financial statements. The accompanying schedule of expenditures of federal awards and state projects I is presented for purposes of additional analysis as required by OMB Circular A-133, Audits of States, Local Governments, and Non-Profit Organizations, 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 Beach, Florida March 12, 2013 Coi s:il ams V11oalth iidMOF; corporate Investigators II INTERNATIONAL 215 '`2oRroA Indian River County,Florida Schedule of Expenditures of Federal Awards and State Projects For the Fiscal Year Ended September 30,2012 1 Federal/State Agency CFDA Contract/ Pass-through Entity CSFA Grant Transfers to Federal Program/State Project No. No. Expenditures Subrecipients Department of Housing and Urban Development: Direct Programs: Section 8 Housing Choice Vouchers 14.871 FL-132-VO-014 to 017 $ 1,935,108 Shelter Plus Care 14.238 FL29C709001 60,826 Shelter Plus Care 14.238 FL0360C4H091001 75,862 Shelter Plus Care 14.238 FL0360C4H091102 20,158 Shelter Plus Care 14.238 FL0380C411091000 67,866 Shelter Plus Care 14.238 FL0113CH090800 60,293 Shelter Plus Care 14.238 FL0114CH091003 42,241 Shelter Plus Care 14.238 FL0114CH091104 30,939 Shelter Plus Care 14.238 FL0338CH090900 68,737 Shelter Plus Care 14.238 FL0119CH091003 98,260 Shelter Plus Care 14.238 FL0119CH091104 15,196 L Shelter Plus Care 14.238 FL0120CH091003 134,110 Shelter Plus Care 14.238 FL0120CH091104 35,111 Subtotal CFDA-14.238 709,599 ( Supportive Housing Program- Homeless Management Information Systems 14.235 FL0I16B4H091002 35,262 Homeless Management Information Systems 14.235 FL011613411091104 890 Transitional Housing 14.235 FL0I 15B4H091003 46,709 Transitional Housing 14.235 FL0115B4H091104 23,355 Homeless Management Information Systems 14.235 FL0308B4H091002 25,856 i Subtotal CFDA-14.235 132,072 Comm.Dev.Block Grant-Neighborhood Stabilization Pgm#3 14.228 B-11-UN-12-0022 118,411 CDBG NSP#3 Program Income Expenditures 14:228 Program Income 22,146 Indirect Programs: { Passed through Florida Dept.of Economic Opportunity: I` Comm.Dev.Block Grant-Neighborhood Revitalization 14.228 12DB-OH-10-40-01-N01 9,443 Comm.Dev.Block Grant-Neighborhood Stabilization Program 14.228 IODB-4X-10-40-01-F13 209,726 CDBG NSP Program Income Expenditures 14.228 Program Income 859,316 Subtotal CFDA-14.228 1,219,042 Total Department of Housing and Urban Development 3,995,821 Federal Transit Administration: Direct Programs: ARRA-Federal Transit Formula Section 5307 Grant 20.507 FL-96-XO18-00 $ 1,688,342 Federal Transit Formula Section 5301 Grant 20.507 FL-90-X799 1,166,272 Federal Transit Formula Section 5307 Grant 20.507 FL-90-X792 57,062 Federal Transit Formula Section 5307 Grant 20.507 FL-90-X756 133,332 Federal Transit Formula Section 5307 Grant 20.507 FL-90-X739 54,164 ( Federal Transit Formula Section 5307 Grant 20.507 FL-90-X717 51,862 I Federal Transit Formula Section 5307 Grant 20.507 FL-90-X702 30,227 Federal Transit Formula Section 5307 Grant 20.507 FL-90-X611 1,500 Total Federal Transit Administration 3,182,761 I 1 217 Indian River County,Florida Schedule of Expenditures of Federal Awards and State Projects For the Fiscal Year Ended September 30,2012 Federal/State Agency CFDA Contract/ Pass-through Entity CSFA Grant Transfers to Federal Program/State Project No. No. Expenditures Subrecipients Department of Transportation: Indirect Programs: Passed through Florida Department of Transportation: Indian River Blvd Sidewalk 20.205 APK04 $ 140,947 Indian River Blvd/17th Street Improvements 20.205 AQ920 94,984 Old Dixie Highway Sidewalk 20.205 AQ822 1,068,499 Metropolitan Planning Organization 20.205 AA080 345,675 Subtotal CFDA-20.205 1,650,105 Federal Transit Metropolitan Planning Grant 20.505 AQ212 40,200 Section 5311 Non-Urbanized Public Transit 20.509 APT03 69,067 Safe Routes to School 20.600 AQJ07 43,136 Passed through Florida Department of Environmental Protection: Trans-Florida Rail-Trail Greenway 20.219 T29025 198,686 Total Department of Transportation 2,001,194 Department of Justice: Direct Programs: State Criminal Alien Assistance Program 16.606 2011-AP-BX-0140 88,050 ARRA-2009 COPS Hiring 16.710 2009RKWX0223 338,320 2011 Local Solicitation Justice Assistance Grant 16.738 2011-DJ-BX-3341 25,000 Indirect Programs: Passed through Florida Department of Law Enforcement: Bryne Formula Grant Program Multi-Agency Drug Enforcement Unit 16.738 2012-JAGC-INRI-I-C4-130 45,025 Drug Testing Program Grant 16.738 2012-JAGC-INRI-2-C4-105 22,426 Subtotal CFDA-16.738 92,451 Passed through Office of the Attorney General: Crime Victim Assistance Program 16.575 V11050 39,478 Total Department of Justice 558,299 Elections Assistance Commission: Indirect Programs: i Passed through Florida Dept of State Division of Elections: l Federal Elections Activities 2008/2009 90.401 N/A 349 Federal Elections Activities 2009/2010 90.401 N/A 1,823 Federal Elections Activities 2010/2011 90.401 N/A 16,013 Federal Elections Activities 2011/2012 90.401 N/A 7,065 Total Elections Assistance Commission- Subtotal CFDA 16.738 25,250 Department of Health and Human Services, Agency for Children and Families, Office of Child Support Enforcement: Indirect Programs: Passed through Florida Department of Revenue: f Sheriff Service of Notices 93.563 00331 5,544 Child Support Enforcement-Title IV D 93.563 CD331 450,994 Total Office of Child Support Enforcement 456,538 218 I Indian River County,Florida Schedule of Expenditures of Federal Awards and State Projects For the Fiscal Year Ended September 30,2012 Federal/State Agency CFDA Contract/ Pass-through Entity CSFA Grant Transfers to Federal Program/State Project No. No. Expenditures Subrecipients U.S.Environmental Protection Agency: Indirect Program: Passed through St.Johns River Water Management District: Pollution Control South 66.456 27199 $ 11,349 Total U.S.Environmental Protection Agency: 11,349 U.S.Department of the Interior Fish and Wildlife Service: Direct Program: St Johns River Headwaters Project 15.623 FL-N171 1,000,000 iTotal U.S.Department of the Interior Fish and Wildlife Service: 1,000,000 Department of Homeland Security: Direct Project: Assistance to Firefighters Grant 97.044 EMW-2011-FO-01142 1,103 Indirect Programs: l Passed through Division of Emergency Management: i Emergency Management Homeland Security 97.067 10-DS-39-10-40-01-250 45,100 Emergency Management Homeland Security 97.067 11-DS-9Z-39-10-40-386 12,132 Emergency Management Homeland Security 97.067 12-CI-24-10-40-01-407 1,700 Subtotal CFDA-97.067 58,932 Emergency Management Performance Grant 97.042 12-FG-R3-10-40-01-098 69,425 Total Department of Homeland Security 129,460 t TOTAL EXPENDITURES OF FEDERAL AWARDS: $ 8,177,911 $ 3,182,761 I � i I 219 Indian River County,Florida Schedule of Expenditures of Federal Awards and State Projects For the Fiscal Year Ended September 30,2012 f Federal/State Agency CFDA Contract/ Pass-through Entity CSFA Grant Transfers to Federal Program/State Project No. No. Expenditures Subrecipients STATE OF FLORIDA Division of Emergency Management: Direct Projects: Hazardous Materials Analysis Grant 52.023 12-CP-03-10-40-01-196 $ 2,189 Emergency Management Programs Emergency Management Preparedness and Assistance 52.008 12-BG-05-10-40-01-031 80,963 Emergency Management Preparedness and Assistance 52.008 13-BG-06-10-40-01-031 21,219 Subtotal CSFA-52.008 102,182 Total Division of Emergency Management 104,371 Florida Housing Finance Corporation: Direct Projects: State Housing Initiatives Partnership 52.901 N/A 935,650 Total Florida Housing Finance Corporation 935,650 Department of State: l` Division of Library Services: Direct Project: State Aid to Libraries 45.030 12-ST-21 113,999 Total Department of State 113,999 Department of Transportation: Direct Projects: Transportation Disadvantaged Planning Grant 55.002 AQB41 16,928 Transportation Disadvantaged Planning Grant 55.002 AQP41 2,974 Subtotal CSFA-55.002 19,902 Small County Outreach Program(SCOP) -27th Ave Road 55.009 AQL69 33,468 Fl Public Transit Block Grant 55.010 APT70 301,165 FDOT Service Development Grant 55.012 AQG07 155,517 Transit Corridor Grant 55.013 AOX67 126,887 Transit Corridor Grant 55.013 AP049 166,000 Subtotal CSFA-55.013 292,887 Intermodal Improvements to Aviation Boulevard 55.014 ANP77 11,977 Total Department of Transportation 814,916 Department of Environmental Protection: Direct Projects: Ambersand Beach Renourishment 37.003 07IR3 55,007 Pollution Control South 37.039 LP31010 7,235 Total Department of Environmental Protection 62,242 220 Indian River County,Florida Schedule of Expenditures of Federal Awards and State Projects ( For the Fiscal Year Ended September 30,2012 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 Health: Direct Project: County Awards Grant-Emergency Medical Svc 64.005 C0031 $ 16,655 Total Department of Health 16,655 V Department of Management Services: Direct Project: E911 State Grant Program 72.002 53-10-11-01 335,188 E9II State Grant Program 72.002 S4-11-06-02 432,268 Total Department of Management Services 767,456 Department of Highway Safety and Motor Vehicles: Indirect Program: (I Passed through St.Johns River Water Management District: Pollution Control South 76.010 27199 44,446 Total Department of Highway Safety and Motor Vehicles 44,446 Department of Revenue: Direct Project: Facilities for Retained Spring Training Franchise 73.016 N/A 500,004 Total Department of Revenue 500,004 i TOTAL EXPENDITURES OF STATE FINANCIAL ASSISTANCE: $ 3,359,739 $ �1 t i 221 Indian River County,Florida Notes to Schedule of Expenditures of Federal Awards and State Projects For the Fiscal Year Ended September 30,2012 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 Compliance 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 Schedule of Expenditures of Federal Awards and State Projects is maintained on a modified accrual basis of accounting for governmental funds and a full accrual basis for proprietary funds, which is explained further in the notes to the financial statements. C. Program Clusters OMB Circular A-133 defines a cluster of programs as a grouping of closely related programs that share common compliance requirements. According to this definition, similar programs deemed to be a cluster of programs are tested accordingly. D. Contingencies Grant revenue amounts received by the County are subject to audit and Y adjustment b the grantor agencies. Such audits may result in requests for reimbursement by the grantor agency. Any adjustments to grant funding are recorded in the year the adjustment occurs. 222 f 5070 North Highway AIA ® P,..,e h m a n n Suite 250 Vero Beach,FL 32963 Ph:772.234.8484 Fx: 772.234.8488 www.rehmann.com i Indian River County, Florida Schedule of Findings and Questioned Costs Year Ended September 30, 2012 Section I - Summary of Auditors' Results Financial Statements Type of auditors' report issued Unqualified Internal control over financial reporting: Material weakness(es) identified? Yes X No I Significant deficiency(ies) identified not considered to be material weaknesses? Yes X None reported Noncompliance material to financial statements noted? Yes X No Federal Awards and State Projects Internal control over major programs and projects: ( 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 15.623 DOI North American Wetland Conversation 16.710 ARRA DOJ Public Safety Partnership i 20.FTC ARRA DOT Federal Transit Cluster 93.563 DHHS Child Support Enforcement _r'FlS.'•_�,* SAleali.�A Viii:.,, Corpoiate invest atorS INTERNATIONAL 223 i P.,e h m a n n I Indian River County, Florida Schedule of Findings and Questioned Costs Page two ( CSFA Number Name of State Project 52.008 FDCA EM Base Grant 52.901 FDCA SHIP 55.010 FDOT Fl Public Transit Block Grant 72.002 FDMS E911 Grant Dollar threshold used to distinguish between Type A and Type B programs $340,820 (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. ,ff I l ( 224 ��CO f JEFFREY R. SMITH o Clerk of Circuit Court and Comptroller Finance Department �LpRIpA 1 801 27th Street, Building A Vero Beach, Florida 32960 Telephone (772) 226-1945 AFFIDAVIT BEFORE ME, the undersigned authority, personally appeared Jeffrey R. Smith, 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 sl 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. On March 15, 2011 in Ordinance No. 2011-002, the impact fee was amended to suspend three of the eight original impact fees from April 1, 2011 through March 31, 2012. On March 13, 2012, Ordinance No. ( 2012-003 continued this suspension from April 1, 2012 through March 31, 2014. 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. (Ch' Fi a cia icer of the Entity) STATE OF FLORIDA COUNTY OF INDIAN RIVER SWORN TO AND SUBSCRIBED before me this day of �fikg- 2013. NOTARY PUBL C Print Name E l r-/t o Personally known Xor produced identification Type of identification produced: I My Commission Expires: NOTARY PCBLiC-STATE OF FLORIDA Finn E. Derriko Commission#DD908DD908571 Expires AUG.05,2013 BONDED TNRV ATW,I'JC BONDMO co.,INC. 225 OG 7a > i i i i BOARD OF COUNTY COMMISSIONERS � 227 * s �OR[04' Re h m a n n Suit North Highway AIA Suite 250 Vero Beach,FL 32963 Ph: 772.234.8484 Fx:772.234.8488 www.rehmann.com Independent Auditors' Report The Honorable Board of County of Commissioners Indian River County, Florida We have audited the accompanying fund financial statements of each major fund and the aggregate remaining fund information of the Indian River County, Florida Board of County of Commissioners (the "Board") as of and for the year ended September 30, 2012, which collectively comprise the Board's fund financial statements as listed in the table of contents. These financial statements are the responsibility of the Board of County of 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 financial statements are free of material misstatement. An audit includes examining, on a test basis, evidence supporting the amounts and disclosures in the financial statements. An audit also includes assessing the accounting principles used and significant estimates made by management, as well as evaluating the overall presentation of the financial statements. We believe that our audit provides a reasonable basis for our ( opinion. As described in Note 1, the fund financial statements present only the funds of the Board of County of Commissioners and do not purport to, and do not, present fairly the financial position of Indian River ( County as of September 30, 2012, the changes in its financial position, or, where applicable, its cash flows for the year then ended in conformity with accounting principles generally accepted in the United States of America. In our opinion, the fund financial statements referred to previously present fairly, in all material respects, the financial position of the funds of the Board of County of Commissioners as of September 30, 2012, and the changes in financial position thereof for the year then ended in conformity with accounting principles generally accepted in the United States of America. 11 In accordance with Government Auditing Standards, we have also issued a report dated March 12, 2013 on our consideration of the Board'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 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 considered in assessing the results of our audit. This report is intended solely for the information and use of management, the Board of County of ` Commissioners, Indian River County, the Florida Auditor General, and applicable federal and state l agencies, and is not intended to be and should not be used by anyone other than these specified parties. p I rl' Vero Beach, Florida March 12, 2013 CpAs cons rlTants Wealth Advisors Corporate Investigators � INTERNATIONAL 229 f Indian River County,Florida Board of County Commissioners Balance Sheet Governmental Funds September 30,2012 Secondary Impact Roads General Fees Construction ASSETS Cash and cash equivalents $ 49,078,178 $ 25,056,533 $ 12,569,189 Accounts receivable 459,653 Special assessments receivable _ Due from other funds 498,704 _ _ Due from other governments 4,783,024 62,718 288,980 ! Inventories 46,893 - _ Prepaid expenses 45,901 Other assets held for resale _ Advances to other funds 188,416 255,000 Total assets $ 55,100,769 $ 25,119,251 $ 13,113,169 LIABILITIES Accounts payable $ 725,776 $ 1,569,517 $ 409,289 Retainage payable 438 398,820 30,634 lI Due to other funds Due to other governments 9,473 22,828 Unearned revenues 141,047 - Other deposits 29,211 Total liabilities 905,945 1,991,165 439,923 DEFERRED INFLOWS OF RESOURCES Unavailable revenue-special assessments _ _ Total deferred inflows of resources _ FUND BALANCES Nonspendable: Inventories 46,893 Prepaid items 45,901 _ Advances to other funds 188,416 - 255,000 f Restricted for: ! Transportation/road improvements - 13,817,620 12,418,246 Court-related costs and improvements _ Housing assistance _ Law enforcement/public safety 1,325,474 Fire/emergency services 1,618,259 Tourism-related activites Beach renourishment Boating related projects _ Library services 345,201 Land acquisition _ Stormwater,street lighting,and other special assessments Debt service Capital projects Sports Village repairs/improvements _ tf Solid waste projects - 25,802 Parks/recreational projects 1,000,000 4,437,723 Other purposes - 1,558,007 Committed to: Economic incentives 2,343,213 _ Environmental conservation/preservation _ Law enforcement/public safety 4,244 Other purposes 27,333 Assigned to: Subsequent year's budget appropriation of fund balance 1,808,000 Transportation/road improvements _ Unassigned 48,730,824 Total fund balances $ 54,194,824 $ 23,128,086 $ 12,673,246 Total liabilities,deferred inflows and fund balances $ 55,100,769 $ 25,119,251 $ 13,113,169 The accompanying notes are an integral part of the financial statements. i 230 Emergency Optional Other Total Services Sales Governmental Governmental Transportation District Tax Funds Funds $ 8,738,192 $ 11,844,418 $ 38,776,874 $ 17,736,580 $ 163,799,964 5,184 464,837 310,506 - 310,506 498,704 232,096 253,321 12,656,159 329,467 18,605,765 46,893 290,366 336,267 658,000 658,000 - 443,416 $ 9,280,794 $ 12,097,739 $ 51,433,033 $ 19,019,597 $ 185,164,352 I $ 226,686 $ 171,827 $ 614,954 $ 392,667 $ 4,110,716 !I 335,285 27,787 792,964 - 219,500 219,500 _ - 32,301 6,620 = - 147,667 55,664 84,875 226,686 178,447 950,239 695,618 5,388,023 I 310,506 - 310,506 310,506 310,506 _ - 46,893 290,366 336,267 - 443,416 - 26,235,866 1,156,268 1,156,268 1,597,356 1,597,356 - = 1,407,405 2,732,879 9,374,292 10,992,551 381,152 381,152 6,093,395 6,093,395 = 1,084,470 1,084,470 144,490 489,691 258,095 258,095 1,738,510 1,738,510 2,477,447 2,477,447 50,482,794 50,482,794 553,204 553,204 - 25,802 - 5,437,723 286,223 1,844,230 - 2,343,213 1,058,569 1,058,569 { _ _ _ 4,244 27,333 - 2,545,000 4,353,000 8,743,602 - 8,743,602 (202,971) 48,527,853 $ 8,743,602 $ 11,919,292 $ 50,482,794 $ 18,323,979 $ 179,465,823 $ 9,280,794 $ 12,097,739 $ 51,433,033 $ 19,019,597 $ 185,164,352 231 Indian River County,Florida 1 Board of County Commissioners Statement of Revenues,Expenditures,and Changes in Fund Balances Governmental Funds For the Year Ended September 30,2012 Secondary Impact Roads General Fees Construction REVENUES Taxes $ 48,402,789 $ - $ 3,329,183 Permits,fees and special assessments 8,771,351 2,267,920 44,705 Intergovernmental 13,231,323 43,731 991,722 Charges for services 5,372,003 - 6,340 Judgments,fines and forfeits 324,186 - _ Interest 215,413 72,788 39,860 Miscellaneous 2,391,809 484,908 23,916 Total revenues 78,708,874 2,869,347 4,435,726 EXPENDITURES Current: General government 8,838,897 272,699 - Public safety 4,305,345 472,131 - Physical environment 257,820 - _ Transportation 3,305,565 9,068,091 4,955,169 Economic environment 362,868 - _ Human services 3,154,028 - _ 11 Culture/recreation 8,054,600 2,326,872 Court related 193,053 - _ Debt service: Principal _ Interest and other fiscal charges Capital projects _ _ - Total expenditures 28,472,176 12,139,793 4,955,169 Excess of revenues over(under)expenditures 50,236,698 (9,270,446) (519,443) OTHER FINANCING SOURCES(USES) Transfers in 7,532 Transfers out (10,696,718) _ Transfers to constitutional officers (42,079,833) (100,000) Total other financing sources(uses) (52,769,019) (100,000) Net change in fund balances (2,532,321) (9,370,446) (519,443) Fund balances at beginning of year 56,727,145 32,498,532 13,192,689 Fund balances at end of year $ 54,194,824 $ 23,128,086 $ 12,673,246 f I The accompanying notes are an integral part of the financial statements. 232 1 Emergency Optional Other Total Services Sales Governmental Governmental Transportation District Tax Funds Funds $ - $ 17,848,785 $ 13,708,911 $ 7,182,901 $ 90,472,569 106,427 - 22,353 273,479 11,486,235 2,723,247 95,560 261,342 9,026,468 26,373,393 118,731 4,779,183 - 845,132 11,121,389 - 7,000 - 72,893 404,079 35,865 55,920 111,762 66,001 597,609 1,151,450 140,939 223,465 787,174 5,203,661 4,135,720 22,927,3 87 14,327,833 18,254,048 145,658,935 273,897 - - 2,228,121 11,613,614 24,473,608 1,969,890 31,220,974 395,508 - - 1,098,295 1,751,623 11,520,797 - - 208,688 29,058,310 - - - 1,658,316 2,021,184 3,734,855 6,888,883 - - - 3,426,831 13,808,303 - - - 474,764 667,817 - - - 8,060,000 8,060,000 - - - 2,426,083 2,426,083 - - 8,108,370 - 8,108,370 12,190,202 24,473,608 8,108,370 25,285,843 115,625,161 (8,054,482) (1,546,221) 6,219,463 (7,031,795) 30,033,774 7,499,582 - 3,161,698 10,668,812 - - - - (10,696,718) (379,401) (444,434) (43,003,668) 7,499,582 (379,401) - 2,717,264 (43,031,574) (554,900) (1,925,622) 6,219,463 (4,314,531) (12,997,800) 9,298,502 13,844,914 44,263,331 22,638,510 192,463,623 $ 8,743,602 $ 11,919,292 $ 50,482,794 $ 18,323,979 $ 179,465,823 I 1 233 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 30,2012 Variance with Final Budget Budgeted Amounts Actual Positive Original Final Amounts (Negative) REVENUES Taxes $ 47,634,737 $ 47,634,736 $ 48,402,789 $ 768,053 Permits and fees 8,530,525 8,530,525 8,771,351 240,826 Intergovernmental 9,897,915 12,799,538 13,231,323 431,785 Charges for services 5,147,534 5,239,006 5,372,003 132,997 Judgments,fines and forfeits 303,525 303,525 324,186 20,661 I Interest 258,875 258,875 215,413 (43,462) Miscellaneous 449,113 572,019 2,391,809 1,819,790 Total revenues 72,222,224 75,338,224 78,708,874 3,370,650 EXPENDITURES Current: General government 9,211,574 9,514,363 8,838,897 675,466 Public safety 4,249,605 4,449,655 4,305,345 144,310 Physical environment 255,043 266,143 257,820 8,323 1 Transportation 845,286 4,467,615 3,305,565 1,162,050 1 Economic environment 349,264 444,074 362,868 81,206 Human services 3,178,533 3,572,249 3,154,028 418,221 Culture/recreation 8,177,728 8,485,377 8,054,600 430,777 Court related 229,285 229,491 193,053 36,438 Total expenditures 26,496,318 31,428,967 28,472,176 2,956,791 Excess of revenues over expenditures 45,725,906 43,909,257 50,236,698 6,327,441 OTHER FINANCING SOURCES(USES) Transfers in - 7,600 7,532 (68) Transfers out (7,646,718) (10,696,718) (10,696,718) - Transfers to constitutional officers (42,181,270) (42,392,002) (42,079,833) 312,169 Total other financing uses (49,827,988) (53,081,120) (52,769,019) 312,101 Net change in fund balances (4,102,082) (9,171,863) (2,532,321) $ 6,639,542 Fund balances at beginning of year 4,102,082 9,171,863 56,727,145 (I Fund balances at end of year $ 54,194,824 I, The accompanying notes are an integral part of the financial statements. f 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 30,2012 Variance with Final Budget f Budgeted Amounts Actual Positive Original Final Amounts (Negative) REVENUES Permits,fees and special assessments $ 1,363,250 $ 1,363,250 $ 2,267,920 $ 904,670 ! Intergovernmental - - 43,731 43,731 ! Interest 114,000 114,000 72,788 (41,212) Miscellaneous - - 484,908 484,908 Total revenues 1,477,250 1,477,250 2,869,347 1,392,097 EXPENDITURES Current: General government 277,891 480,142 272,699 207,443 Public safety 90,000 3,218,460 472,131 2,746,329 Physical environment 25,000 25,000 - 25,000 Transportation 7,435,837 17,419,285 9,068,091 8,351,194 Culture/recreation 2,050,000 8,052,554 2,326,872 5,725,682 Total expenditures 9,878,728 29,195,441 12,139,793 17,055,648 Excess of revenues over(under)expenditures (8,401,478) (27,718,191) (9,270,446) 18,447,745 OTHER FINANCING USES Transfers out (100,000) (100,000) Total other financing uses - (100,000) (100,000) - l Net change in fund balances (8,401,478) (27,818,191) (9,370,446) $ 18,447,745 Fund balances at beginning of year 8,401,478 27,818,191 32,498,532 Fund balances at end of year $ - $ - $ 23,128,086 The accompanying notes are an integral part of the financial statements. 235 Indian River County,Florida 1 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 30,2012 Variance with f Final Budget Budgeted Amounts Actual Positive Original Final Amounts (Negative) f REVENUES Taxes $ 3,220,500 $ 3,220,500 $ 3,329,183 $ 108,683 Permits,fees and special assessments - - 44,705 44,705 Intergovernmental - 3,697,186 991,722 (2,705,464) Charges for services - - 6,340 6,340 Interest 52,250 52,250 39,860 (12,390) Miscellaneous 23,750 23,750 23,916 166 Total revenues 3,296,500 6,993,686 4,435,726 (2,557,960) EXPENDITURES Current: Transportation 11,026,726 16,806,158 4,955,169 11,850,989 Total expenditures 11,026,726 16,806,158 4,955,169 11,850,989 Net change in fund balances (7,730,226) (9,812,472) (519,443) $ 9,293,029 ` Fund balances at beginning of year 7,730,226 9,812,472 13,192,689 t Fund balances at end of year $ - $ - $ 12,673,246 f l I I 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 30,2012 Variance with Final Budget Budgeted Amounts Actual Positive Original Final Amounts (Negative) REVENUES Permits,fees and special assessments $ 118,750 $ 118,750 $ 106,427 $ (12,323) Intergovernmental 2,492,800 2,500,263 2,723,247 222,984 Charges for services 87,875 87,875 118,731 30,856 Interest 49,400 49,400 35,865 (13,535) Miscellaneous 792,750 793,793 1,151,450 357,657 Total revenues 3,541,575 3,550,081 4,135,720 585,639 EXPENDITURES Current: General government 285,958 286,656 273,897 12,759 Physical environment 544,058 647,434 395,508 251,926 Transportation 11,461,141 12,459,867 11,520,797 939,070 Total expenditures 12,291,157 13,393,957 12,190,202 1,203,755 Excess of revenues under expenditures (8,749,582) (9,843,876) (8,054,482) 1,789,394 OTHER FINANCING SOURCES Transfers in 7,499,582 7,499,582 7,499,582 - Total other financing sources 7,499,582 7,499,582 7,499,582 - Net change in fund balances (1,250,000) (2,344,294) (554,900) $ 1,789,394 Fund balances at beginning of year 1,250,000 2,344,294 9,298,502 Fund balances at end of year $ - $ - $ 8,743,602 I The accompanying notes are an integral part of the financial statements. 237 i 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 30,2012 Variance with Final Budget Budgeted Amounts Actual Positive Original Final Amounts (Negative) REVENUES Taxes $ 17,580,683 $ 17,580,683 $ 17,848,785 $ 268,102 Intergovernmental 33,250 105,627 95,560 (10,067) I) Charges for services 4,186,175 4,186,175 4,779,183 593,008 Judgments,fines and forfeits 1,900 1,900 7,000 5,100 Interest 90,250 90,250 55,920 (34,330) Miscellaneous 14,527 14,527 140,939 126,412 l Total revenues 21,906,785 21,979,162 22,927,387 948,225 EXPENDITURES Current: Public safety 24,659,507 25,896,332 24,473,608 1,422,724 Total expenditures 24,659,507 25,896,332 24,473,608 1,422,724 Excess of revenues over(under)expenditures (2,752,722) (3,917,170) (1,546,221) 2,370,949 OTHER FINANCING USES Transfers to constitutional officers (451,068) (451,068) (379,401) 71,667 Total other financing uses (451,068) (451,068) (379,401) 71,667 Net change in fund balances (3,203,790) (4,368,238) (1,925,622) $ 2,442,616 Fund balances at beginning of year 3,203,790 4,368,238 13,844,914 Fund balances at end of year $ - $ - $ 11,919,292 1 The accompanying notes are an integral part of the financial statements. 238 Indian River County,Florida Board of County Commissioners ( Statement of Net Position Proprietary Funds September 30,2012 Enterprise Funds Solid Waste Disposal Golf County County Internal ( District Course Utilities Building Total Service Funds ASSETS Current assets: Cash and cash equivalents $ 14,759,997 $ 183,390 $ 38,463,042 $ 4,235,328 $ 57,641,757 $ 31,967,495 Accounts receivable-net 113,820 - 2,808,184 - 2,922,004 1,568,335 Due from other governments 98,965 11,100 64,457 - 174,522 126,964 Interest receivable 9,608 438 525,988 2,105 538,139 15,914 Inventories 56,673 893,806 950,479 218,196 Prepaid items - 211,858 211,858 1,177,438 Current restricted assets: Cash and cash equivalents 13,869,807 470,681 27,852,242 42,192,730 - Total current assets 28,852,197 722,282 70,819,577 4,237,433 104,631,489 35,074,342 Non-current assets: Capital assets-non-depreciable 18,755,620 786,611 9,709,991 - 29,252,222 - Capital assets-depreciable 21,836,756 8,314,248 404,979,117 456,109 435,586,230 1,119,934 Accumulated depreciation (8,710,425) (1,811,236) (196,570,779) (425,153) (207,517,593) (767,843) Non-current restricted assets: Special assessments receivable 1,007,420 1,007,420 Impact fees receivable 739,785 739,785 Liens receivable 2,819,565 2,819,565 Total non-current assets 31,881,951 7,289,623 222,685,099 30,956 261.887 629_ _ 352,091 S Total assets 60,734,148 8,011,905 293,504,676 4,268,389 366,519,118 35,426,433 11 DEFERRED OUTFLOWS OF RESOURCES Deferred amounts on refundings - 107,215 2,768,024 - 2,875,239 - Total deferred outflows of resources 107,215 2,768,024 2,875,239 LIABILITIES Current liabilities(payable from current assets): Accounts payable 1,973,276 139,328 660,621 19,963 2,793,188 202,892 Retainage payable 216,211 4,987 26,818 - 242,016 - Claims payable 2,197,855 Due to other funds 54,204 54,204 225,000 Due to other governments 7,771 2,833,946 14,546 2,856,263 - Uneanted revenues 29,652 - 29,652 Other deposits 1,000 - 1,000 Pollution remediation costs payable 2,510 2,510 Accrued compensated absences 36,275 36,579 492,621 79,470 644,945 33,005 Total current liabilities(payable from current assets) 2,225,762 273,521 4,010,516 113,979 6,623,778 2,658,752 Current liabilities(payable from restricted assets): Accounts payable - - 59,013 - 59,013 - Retainage payable 35,364 35,364 Accrued interest payable 6,931 173,413 180,344 Bonds payable - 555,000 3,205,000 3,760,000 Customer deposits 126,626 2,769,128 2,895,754 Total current liabilities(payable from restricted assets) 126,626 561,931 6,241,918 6,930,475 Total current liabilities 2,352,388 835,452 10,252,434 113,979 13,554,253 2,658,752 Non-current liabilities: Accrued compensated absences 5,998 6,456 180,217 19,521 212,192 11,965 Advance from other funds - 443,416 - - 443,416 - Claims payable - 5,876,145 Pollution remediation costs payable 6,290 6,290 Closure and maintenance costs payable 10,513,736 10,513,736 Bonds payable-net of discount and premium 1,546,871 43,257,698 44,804,569 Total non-current liabilities 10,519,734 1,996,743 43,444,205 19,521 55,980,203 5,888,110 Total liabilities 12,872,122 2,832,195 53,696,639 133,500 69,534,456 8,546,862 NET POSITION Net investment in capital assets 31,881,951 5,294,967 174,423,655 30,956 211,631,529 352,091 Restricted for: Capital projects - - 17,941,773 17,941,773 - Unrestricted 15,980,075 (8,042) 50,210,633 4,103,933 70,286,599 26,527,480 Total net position $ 47,862,026 $ 5,286,925 $ 242,576,061 $ 4,134,889 $ 299,859,901 $ 26,879,571 The accompanying notes are an integral part of the financial statements. I 239 Indian River County,Florida Board of County Commissioners Statement of Revenues, Expenses, and Changes in Fund Net Position Proprietary Funds For the Year Ended September 30,2012 Enterprise Funds Solid Waste i Disposal Golf District Course OPERATING REVENUES Charges for services $ 9,582,955 $ - Charges for services pledged as security for revenue bonds - 3,216,471 Total operating revenues 9,582,955 3,216,471 OPERATING EXPENSES Personal services 533,291 537,390 Material, supplies, services and other operating 9,283,395 1,643,574 Depreciation 842,318 129,906 Total operating expenses 10,659,004 2,310,870 Operating income(loss) (1,076,049) 905,601 NONOPERATING REVENUES (EXPENSES) Interest income 268,633 - Interest income pledged as security for revenue bonds - 4,088 Gain on disposal of equipment - 625 Interest expense - (109,301) Bond amortization expense - (31,432) Loss on disposal of equipment _ _ Total nonoperating revenues (expenses) 268,633 (136,020) Income(loss)before transfers and capital contributions (807,416) 769,581 Capital contributions _ _ f Capital grants Transfers - (7,532) l Change in net position (807,416) 762,049 Total net position- beginning, as restated(Note 19B) 48,669,442 4,524,876 Total net position- ending $ 47,862,026 $ 5,286,925 I f The accompanying notes are an integral part of the financial statements. 240 l I County County Internal Utilities Building Total Service Funds $ - $ 1,735,713 $ 11,318,668 $ 21,563,550 28,361,246 - 31,577,717 - 28,361,246 1,735,713 42,896,385 21,563,550 7,315,133 1,038,946 9,424,760 2,471,801 10,059,161 445,023 21,431,153 18,143,414 14,414,302 3,546 15,390,072 155,207 31,788,596 1,487,515 46,245,985 20,770,422 (3,427,350) 248,198 (3,349,600) 793,128 - 12,018 280,651 98,046 315,377 - 319,465 - 7,775 8,400 1,250 (2,184,076) - (2,293,377) - (25,828) - (57,260) (248,467) (248,467) - (2,135,219) 12,018 (1,990,588) 99,296 (5,562,569) 260,216 (5,340,188) 892,424 2,513,774 - 2,513,774 - 72,474 - 72,474 - - - (7,532) 35,438 (2,976,321) 260,216 (2,761,472) 927,862 245,552,382 3,874,673 302,621,373 25,951,709 $ 242,576,061 $ 4,134,889 $ 299,859,901 $ 26,879,571 241 Indian River County,Florida Board of County Commissioners Statement of Cash Flows Proprietary Funds For the Year Ended September 30,2012 l Enterprise Funds Solid Waste Disposal Golf District Course CASH FLOWS FROM OPERATING ACTIVITIES Cash received from customers $ 9,574,854 $ 3,217,549 Cash paid to suppliers for goods and services (7,804,212) (1,566,655) Cash paid to employees for services (530,952) (559,077) Net cash provided by(used in)operating activities 1,239,690 1,091,817 CASH FLOWS FROM NONCAPITAL FINANCING ACTIVITIES Transfers in _ tl Transfers out - (7,532) Proceeds from advances from other funds _ Payments on advances from other funds - (307,604) Net cash provided by(used in)noncapital financing activities - (315,136) CASH FLOWS FROM CAPITAL AND RELATED FINANCING ACTIVITIES Principal payments-bonds/notes - (535,000) Interest paid on long-term debt - (111,081) Proceeds from sales of capital assets 501 625 Purchase of capital assets (2,648,473) (84,625) Bond paying agent and arbitrage fees Capital grants and contributions Net cash provided by(used in)capital and related financing activities (2,647,972) (730,081) CASH FLOWS FROM INVESTING ACTIVITIES Interest and dividends on investments 274,658 4,224 Net cash provided by investing activities 274,658 4,224 Net increase(decrease)in cash and cash equivalents (1,133,624) 50,824 Cash and cash equivalents at beginning of year 29,763,428 603,247 Cash and cash equivalents at end of year $ 28,629,804 $ 654,071 Classified as: , Current assets $ 14,759,997 $ 183,390 Restricted assets 13,869,807 470,681 Totals $ 28,629,804 $ 654,071 I The accompanying notes are an integral part of the financial statements. 242 County County Internal Utilities Building Total Service Funds $ 28,212,318 $ 1,736,088 $ 42,740,809 $ 21,545,354 (9,469,003) (428,657) (19,268,527) (18,109,270) (7,263,059) (1,035,613) (9,388,701) (2,470,632) 11,480,256 271,818 14,083,581 965,452 - - - 35,438 (7,532) - - - - 35,000 (307,604) - (315,136) 70,438 (3,090,000) - (3,625,000) _ (2,193,450) (2,304,531) 7,775 - 8,901 1,250 (2,773,381) (29,465) (5,535,944) (101,763) (1,620) - (1,620) - 1,626,811 - 1,626,811 - (6,423,865) (29,465) (9,831,383) (100,513) 325,697 12,925 617,504 105,524 325,697 12,925 617,504 105,524 5,382,088 255,278 4,554,566 1,040,901 i 60,933,196 3,980,050 95,279,921 30,926,594 $ 66,315,284 $ 4,235,328 $ 99,834,487 $ 31,967,495 $ 38,463,042 $ 4,235,328 $ 57,641,757 $ 31,967,495 27,852,242 - 42,192,730 - $ 66,315,284 $ 4,235,328 $ 99,834,487 $ 31,967,495 Continued 243 Indian River County,Florida Board of County Commissioners r Statement of Cash Flows Proprietary Funds For the Year Ended September 30,2012 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) $ (1,076,049)$ 905,601 Adjustments to reconcile operating income to net cash provided by operating activities: Work in progress reclassified as expense - - Depreciation 842,318 129,906 (Increase)Decrease in assets: Accounts receivable (5,526) - Due from other governments (2,060) (300) Inventories - (2,211) I{ Liens receivable - - Impact fees receivable - - Special assessments receivable - - Prepaid items - - Increase(Decrease)in liabilities: Accounts payable 981,683 79,104 Due to other governments - 26 Retainage payable - - Customer deposits (515) - Closure and maintenance costs payable 497,500 - Pollution remediation costs payable - - Unearned revenues - 1,378 Claims payable - - Accrued compensated absences 2,339 (21,687) f Total adjustments 2,315,739 186,216 Net cash provided by(used in)operating activities $ 1,239,690 $ 1,091,817 NONCASH CAPITAL AND RELATED FINANCING ACTIVITIES Change in fair value of investments $ (8,175)$ (373) Contributed property,infrastructure and equipment $ - $ - Capital assets purchased through accounts payable $ 773,815 $ - 1 The accompanying notes are an integral part of the financial statements. 244 I_ I County County Internal (` Utilities Building Total Service Funds i $ (3,427,350) $ 248,198 $ (3,349,600) $ 793,128 458,343 - 458,343 - ( 14,414,302 3,546 15,390,072 155,207 (37,426) 375 (42,577) (3,759) (4,280) - (6,640) (14,437) l (17,547) - (19,758) (8,529) I (686,120) - (686,120) - 31,919 - 31,919 - 249,216 - 249,216 - f (30,694) (30,694) (141,768) 239,702 13,136 1,313,625 (12,559) 6,422 3,230 9,678 - (3,446) - (3,446) - 291,341 - 290,826 - 497,500 (56,200) - (56,200) - - 1,378 - - - - 197,000 52,074 3,333 36,059 1,169 14,907,606 23,620 17,433,181 172,324 $ 11,480,256 $ 271,818 $ 14,083,581 $ 965,452 $ (25,536) $ (1,791) $ (35,875) $ (13,539) $ 926,147 $ - $ 926,147 $ - $ 231,834 $ - $ 1,005,649 $ - I { 245 Indian River County,Florida Board of County Commissioners Statement of Fiduciary Net Position Fiduciary Funds September 30,2012 Other Postemployment Agency Benefits Trust ASSETS Cash and cash equivalents $ 3,224,907 $ - Investments, at fair value: Index funds - 4,748,954 U.S. government securities funds - 5,379,116 Prime money market fund - 705,586 Total assets $ 3,224,907 10,833,656 I LIABILITIES Accounts payable $ 637,575 - Benefits payable - 1,459,609 Other deposits held in escrow 2,587,332 - Total liabilities $ 3,224,907 1,459,609 NET POSITION Net position held in trust for other postemployment benefits 9,374,047 Total net position $ 9,374,047 I The accompanying notes are an integral part of the financial statements. 246 f I Indian River County,Florida Board of County Commissioners Statement of Changes in Fiduciary Net Position Other Postemployment Benefits Trust Fund For the Year Ended September 30,2012 I ADDITIONS Employer contributions $ 2,948,661 Investment loss 930,584 Investment expense (945) Total additions 3,878,300 DEDUCTIONS Benefits payments 1,459,609 f Total deductions 1,459,609 1 Change in net position 2,418,691 Net position- beginning 6,955,356 Net position- ending $ 9,374,047 L I C The accompanying notes are an integral part of the financial statements. 247 �LORlo4' Indian River County,Florida Board of County Commissioners Notes To Financial Statements Year Ended September 30, 2012 NOTE I - 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 C 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. l A. Reporting Entity The concept underlying the definition of the reporting entity is that elected officials are accountable to their constituents for their actions. The reporting entity's financial statements should allow users to distinguish between the primary government (the Board) and its component units. However, some component units, because of the closeness of their relationship with the Board, should be blended as though they are part of the Board. Otherwise, most component units should be discretely presented. As required by generally accepted accounting principles, the financial reporting entity consists of. (1) the primary government (the Board), (2) organizations for which the Board is financially accountable, and (3) other organizations for which the nature and significance of their relationship with the Board are such that exclusion would cause the reporting entity's financial statements to be misleading or incomplete. The Board is financially accountable if it appoints a voting majority of the organization's governing body and (a) it is able to impose its will on that organization or (b) there is a potential for the organization to provide specific financial benefits to, or impose specific financial burdens on, the Board. The Board is financially accountable if an organization is fiscally dependent on the Board regardless of whether the organization has (a) a separately elected governing board, (b) a governing board appointed by a higher level of government, or (c) a jointly appointed board. Based on these criteria, Board management examined all organizations, which are legally separate, in order to determine which organizations, if any, should be included in the Board's financial statements. Management determined that the Solid Waste Disposal District and the Emergency Services District were the only organizations that should be included in the Board's financial statements as blended component units. Blended Component Units Solid Waste Disposal District (SWDD) — Created pursuant to County Ordinance 87-67, the Board of County Commissioners serves as the Board for the SWDD and sets the non ad valorem assessment fees for the SWDD. Although legally separate, the SWDD is appropriately blended as a proprietary fund type (enterprise) component unit into the primary government. Emergency Services District(EMS)—Created pursuant to County Ordinance 90-25,the Board of County Commissioners serves as the Board for the EMS and sets the millage rate for EMS. Although legally separate, the EMS is appropriately blended as a governmental fund type (special revenue) component unit into the primacy government. 249 I Indian River County,Florida Board of County Commissioners Notes To Financial Statements Year Ended September 30, 2012 ff NOTE 1 - SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES - Continued i B. Fund Financial Statements i 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 balances, 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 plus deferred outflows of resources, liabilities plus deferred inflows of resources, 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 Position 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 p g 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 51 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, deferred outflows of resources, current liabilities, and deferred inflows of resources 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 fund balances. 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, 2012 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 f fund financial statements, proprietary funds are presented using the economic resources measurement focus. This means that all assets, deferred outflows of resources, liabilities, and deferred inflows of resources (whether current or non-current) associated with their activity are included on their balance 1 sheets. Proprietary fund type operating statements present increases (revenues) and decreases (expenses) in total net position. The Board applies all GASB Pronouncements as well as all FASB and AICPA 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. fFiduciary 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, 2012 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 l all financial resources, except those required to be accounted for in another fund. f Impact Fees Fund — The Impact Fees Fund accounts for the receipt of various impact fees. Funds are 1 used for the construction of roads and bridges, correctional, public safety, library, park, public building, and solid waste facilities. Funds are also used for administrative expenditures of monitoring the aforementioned activities. Secondary Roads Construction Fund — The Secondary Roads Construction Fund accounts for the expenditures of road and bridge construction, roadway, bridge and right of way maintenance and I drainage, and related administrative expenses. 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. �I 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. i County Building Fund — The County Building Fund accounts for revenues, expenses, assets, and liabilities associated with the County building permit and inspection program. 252 I Indian River County, Florida f Board of County Commissioners Notes To Financial Statements Year Ended September 30, 2012 I 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 E deductions, self insurance premiums, and developer escrow funds. I 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. I 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 fiends 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. fE. Allowance for Doubtful Accounts The Board provides an allowance for water and sewer accounts receivables that may become uncollectable. At September 30, 2012, 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, 2012. 253 Indian River County, Florida Board of County Commissioners Notes To Financial Statements Year Ended September 30, 2012 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 Shooting Range and Fleet Internal Service Fund's inventories which are valued using the average cost method of accounting. Inventories of all funds are recorded as ! expenditures (expenses) when consumed rather than when purchased. f G. Prepaid Items f 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. At September 30, 2012, seven homes remain unsold. The Board intends to resell these homes in 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 Board defines s 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 Board 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 I( 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, 2012 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 Years ( Building and improvements 10-50 Machinery and equipment 3 - 10 Utility distribution systems 25 -50 I Road and bridge infrastructure 20-50 Fiberoptics 20 Software 3-5 Beach preservation infrastructure 7 Stormwater infrastructure 30 J. Capitalization of Interest Interest costs related to bond issues are capitalized during the construction period. These costs are netted I against applicable interest earnings on construction fund investments. During the current period, the jBoard did not have any capitalized interest. K. Deferred Outflows/Inflows of Resources Deferred outflows of resources represent a consumption of net position/fund balance that applies to a future period(s) and so will not be recognized as an outflow of resources (expense/expenditure) until then. The Board only has one item that qualifies for reporting in this category. It is the deferred charge on refunding reported on the Statement of Net Position for the Proprietary funds. A deferred charge on refunding results from the difference in the carrying value of refunded debt and its reacquisition price. This amount is deferred and amortized over the shorter of the life of the refunding debt. Deferred inflows of resources represent an acquisition of net position/fund balance that applies to a future period(s) and so will not be recognized as an inflow of resources (revenue) until then. The Board only has one type of item, which arises under a modified accrual basis of accounting, that qualifies for reporting in this category. The item, unavailable revenue, is reported only in the governmental funds balance sheet. The source of the unavailable revenue is a special assessment on road paving. This amount is deferred and recognized as an inflow of resources in the period the amounts become available. l 255 i C Indian River County,Florida Board of County Commissioners Notes To Financial Statements Year Ended September 30, 2012 f NOTE 1 - SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES—Continued 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. N. Unearned Revenues In governmental fund financial statements (in accordance with the modified accrual basis of accounting),unearned revenues represent revenues, which are available but not earned. 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, 2012. Q. New Accounting Pronouncements Effective October 1, 2011, the Board implemented the provisions of GASB Statement No. 63 Financial Reporting of Deferred Outflows of Resources, Deferred Inflows of Resources, and Net Position and GASB Statement No. 65 Items Previously Reported as Assets and Liabilities. 1 256 Indian River County,Florida Board of County Commissioners Notes To Financial Statements Year Ended September 30, 2012 1 NOTE 1 - SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES—Continued 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 Florida Department of Revenue and the Florida Clerks of Court Operations Corporation, a proposed operating budget for the following fiscal year. 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 Cmeans of financing them. The Board then holds workshops to review the tentative budget by fund on a departmental level. f5. 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. 257 i Indian River County,Florida Board of County Commissioners Notes To Financial Statements Year Ended September 30, 2012 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, 2012, the carrying value of the Board's deposits was $18,001,674 and the bank balance was $20,538,877. 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". Cash on hand at September 30, 2012 was $8,240. 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, 2012, accrued interest for the Board's portfolio totaled$143,142 and was allocated to the funds based on their average monthly balance for September. I i 258 Indian River County,Florida Board of County Commissioners Notes To Financial Statements Year Ended September 30, 2012 NOTE 2 - CASH AND CASH EQUIVALENTS - Continued i 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, 2012,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 $ 97,027,307 0.80 34.57 % N/A U.S. Agencies:*** Federal Farm Credit Bureau 45,054,504 1.24 16.05 AA+ Federal Home Loan Bank 49,021,782 0.88 17.47 AA+ Federal Home Loan Mortgage 23,001,426 0.59 8.20 AA+ Federal National Mortgage Assoc. 10,991,812 0.55 3.92 AA+ Other Fixed Rate Investments: Fund B Surplus Funds Trust Fund 473,079 4.08 0.17 Not Rated Florida Local Government AAAf and Investment Trust Fund 10,442,551 0.08 3.72 S-I** Other Market Rate Investments: Regions Bank Money Market 13,210,015 0.08 4.71 N/A Suntrust Bank NOW Account 13,579,733 0.08 4.84 N/A Florida Trust Day to Day Fund 12,438,923 0.08 4.43 AAAm W&S Sinking Fund Reserve: U.S. Treasuries 5,410,103 1.03 1.92 N/A Fidelity Institutional Money Market 22,562 0.08 0.00 AAAm Total Fair Value $ 280,673,797 100.00 % Weighted Average Maturity of Investments 0.74 4 * Ratings based upon Standard and Poor's ** 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). 259 Indian River County, Florida Board of County Commissioners f Notes To Financial Statements Year Ended September 30, 2012 NOTE 2 - CASH AND CASH EQUIVALENTS - Continued C. Investments—Continued At September 30, 2012, the Board had $498,519 invested in Fund B Surplus Funds Trust Fund (Fund B), a fluctuating net asset value pool. The State Board of Administration (SBA) determined that Fund B did not meet the requirements of a SEC 2a7-like fund; therefore, a fair value factor (total net asset value of Fund B divided by total participant balances) was provided for reporting the value of the Board's participation in Fund B at fiscal year-end. This resulted in a negative adjustment of 5.1% of the portfolio balance, or $25,440. Consequently, the net investment in Fund B is reported at$473,079. 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. f i 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. f Credit Risks l Florida Statutes, Section 218.415 and the Board's investment policy limit investments to the following: 1. Direct obligations of the United States Treasury; I 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. l 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; f 1 I 260 i Indian River County,Florida Board of County Commissioners Notes To Financial Statements f Year Ended September 30, 2012 ! 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, 2012, the Board's investment portfolio in U.S. Treasuries, U.S. Agencies, and money market fund, was held by The Bank of New York/Mellon. Additional investments include the following: the SunTrust NOW account, the Regions Bank Money Markets, the Florida Local Government Investment Trust (held by the Bank of New York/Mellon) and the Florida Trust Day to Day Fund(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 (last amended on April 6, 2010). The Board 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. 261 1 Indian River County, Florida Board of County Commissioners Notes To Financial Statements Year Ended September 30, 2012 NOTE 2 - CASH AND CASH EQUIVALENTS - Continued D. OPEB Trust Investments - Continued The contribution of $2.96 million for the year ended September 30, 2012 was invested in the various funds listed below. As of September 30, 2012, the Indian River County OPEB Trust (IRCOT) had the following investments: Weighted j Average I Maturity Portfolio Credit Investment Type Fair Value InYears Percentage Risks* Short-Term Portion: Fidelity Treasury Money Market $ 1,493,663 0.15 13.79 % AAAm Long-Term Portion: l Vanguard 500 Index 2,105,515 N/A 19.43 N/A Vanguard All World Ex-US 1,948,813 N/A 17.99 N/A Vanguard Mid Cap Index 466,038 N/A 4.30 N/A Vanguard Small Cap Index 228,588 N/A 2.11 N/A Vanguard Short Term Treasury 2,179,647 2.20 20.12 AA+ Vanguard Intermediate Treasury 1,500,241 5.50 13.85 AA+ Vanguard Prime Money Market 705,586 0.16 6.51 A-1 Vanguard Federal Money Market 205,565 0.16 1.90 A-1 Total Fair Value $ 10,833,656 100.00 % * Ratings based upon Standard and Poor's i 4 NOTE 3 -PROPERTY TAX REVENUES i 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 2011-2012 fiscal year were levied in October 2011. 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. 262 f Indian River County, Florida Board of County Commissioners Notes To Financial Statements Year Ended September 30, 2012 NOTE 4—CAPITAL ASSETS A. Governmental Fund Type Capital Assets A summary of changes in the governmental fund type capital assets is as follows: Buildings And Construction ( Land Improvements Equipment Intangibles Infrastructure In Progress Total 1 Balance 10/1/2011 $138,388,559 $187,159,035 $ 39,688,685 $2,851,824 $ 8,986,693 $ 4,633,494 $381,708,290 Additions 1,295,487 7,485,490 2,999,139 582,932 - 8,552,682 20,915,730 Deletions (50,796) (167,323) (3,495,620) (102,351) - (7,626,843) (11,442,933) Balance 9/30/2012 $139,633,250 $194,477,202 $ 39,192,204 $3,332,405 $ 8,986,693 $ 5,559,333 $391,181,087 ` Depreciation expense, which includes amortization expense on intangible assets, for governmental fund type capital assets is not reported in the financial statements of the Board. Depreciation expense is reported in the financial statements of the County. Please refer to the County Notes for a more detailed explanation of the County's policy on depreciation. B. Proprietary Fund Type Capital Assets A summary of changes in the proprietary fund type capital assets is as follows: Buildings j And Construction f( Land Improvements Equipment Intangibles In Progress Total Balance at 10/1/2011 $20,530,432 $4125817,452 $14,736,673 $2,875,241 $ 10,367,438 $461,327,236 Additions 755,578 8,606,838 336,011 158,912 4,985,908 14,843,247 Deletions - (1,194,636) (199,214) - (85818,247) (10,212,097) 21,286,010 420,229,654 14,873,470 3,034,153 6,535,099 465,958,386 Less: Accumulated Depreciation - (194,174,136) (13,211,389) (899,911) - (208,285,436) Balance at 9/30/2012 $21,286,010 $226,055,518 $ 1,662,081 $2,134,242 $ 6,535,099 $257,672,950 263 f Indian River County, Florida Board of County Commissioners Notes To Financial Statements Year Ended September 30, 2012 NOTE 5—RESTRICTED CASH AND CASH EQUIVALENTS AND INVESTMENTS f Solid Waste t Disposal Golf County District Course Utilities Total Sinking funds $ - $ 470,681 $ 6,176,994 $ 6,647,675 Renewal and 1 replacement 3,229,445 - 3,485,928 6,715,373 Customer deposits 126,626 - 2,769,128 2,895,754 +) Capital construction - - 15,420,192 15,420,192 Closure and maintenance cost 10,513,736 - - 10,513,736 Total $ 13,869,807 $ 470,681 $ 27,852,242 $ 42,192,730 1 NOTE 6—PAYABLE FROM RESTRICTED ASSETS Liabilities payable from the Board's Enterprise Funds restricted assets above are as follows: Solid Waste Disposal Golf County District Course Utilities Total Accounts payable $ - $ - $ 59,013 $ 59,013 Retainage payable - - 35,364 35,364 Accrued interest payable - 6,931 173,413 180,344 Bonds payable (current portion) - 555,000 3,205,000 3,760,000 Closure/maint. costs payable 10,513,736 - - 10,513,736 Customer deposits 126,626 - 2,769,128 2,895,754 Total $ 10,640,362 $ 561,931 $ 6,241,918 $ 17,444,211 264 Indian River County,Florida Board of County Commissioners ` Notes To Financial Statements Year Ended September 30, 2012 NOTE 7-INTERFUND BALANCES Interfund balances at September 30,2012, consisted of the following: Receivable Fund Payable Fund Amount General Fund Nonmajor Governmental Funds $ 219,500 General Fund Golf Course Enterprise Fund 54,204 j General Fund Fleet Internal Service Fund 225,000 $ 498,704 1 In October 2010, the General Fund loaned $ 333,050 to the Golf Course Fund to purchase new golf carts. The amount reported as due from the Golf Course Fund is the current portion of the scheduled payments due to the General Fund in fiscal year 2013. The remaining amount due from the Golf Course Fund is reported as an interfund advance. The amounts due from the Fleet Internal Service Fund and the Nonmajor Governmental Funds represent short-term cash loans that will be repaid within the next twelve months. Interfund advances at September 30,2012, consisted of the following: Receivable Fund Payable Fund Amount Secondary Roads Construction Fund Golf Course Fund $ 255,000 General Fund Golf Course Fund 188,416 j $ 443,416 These amounts are considered long-term advances between major funds expected to be paid over the course of several years. These amounts have been presented as nonspendable on the General and Secondary Roads Construction Funds Balance Sheets, NOTE 8 -INTERFUND TRANSFERS Interfund transfers for the year ended September 30, 2012, consisted of the following: f Transfers In: Nonmajor Internal General Transportation Governmental Service Fund Fund Funds Fund Total Transfers Out: 1 General Fund $ - $ 7,499,582 $ 3,161,698 $ 35,438 $ 10,696,718 Golf Course Fund 7,532 - - 7,532 Total $ 7,532 $ 7,499,582 $ 3,161,698 $ 35,438 $ 10,704,250 265 Indian River County,Florida Board of County Commissioners Notes To Financial Statements Year Ended September 30, 2012 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 I general fund revenues for beach restoration activities which must be accounted for in another fund, 3) use unrestricted general fund revenues to pay off a bond issue, 4) use unrestricted general fund revenues ! to offset a portion of salaries and benefits expenses for an employee accounted for in the health 4 insurance fund, and 5)to reimburse the general fund for a golf course server. I NOTE 9—DUE FROM OTHER GOVERNMENTS Governmental Funds On November 18, 2008, the Board entered into a locally funded agreement with the Florida Department f of Transportation (FDOT) to advance the six-laning of State Road 60 from 82"d 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 Two will be in ten quarterly installments over a three-year j period which began in 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. Optional Sales Tax Fund Segment Two Amount Advance Funded $ 14,429,754 Less: Reimbursements received as of 9/30/2012 (3,000,000) Balance Due from FDOT SR60 Agreement 11,429,754 Additional Funds Due from other governments 1,226,405 Total Due from other governments $ 12,656,159 t I 1 266 i Indian River County,Florida i Board of County Commissioners Notes To Financial Statements Year Ended September 30, 2012 NOTE 10-ACCOUNTS PAYABLE Accounts Payable at September 30, 2012, were as follows: Total Salaries and Accounts Governmental Funds: Vendors Benefits Pa, abs General $ 688,876 $ 36,900 $ 725,776 Impact Fees 1,569,236 281 1,569,517 Secondary Roads Construction 408,483 806 409,289 Transportation 204,782 21,904 226,686 Emergency Services 109,067 62,760 171,827 Optional Sales Tax 614,954 614,954 Other Governmental 389,933 2,734 392,667 Total Governmental Funds $ 3,985,331 $ 125,385 4,110,716 Proprietary Funds: Payable from current assets: ! Solid Waste $ 1,971,588 $ 1,688 $ 1,973,276 Golf Course 137,826 1,502 139,328 Utilities 637,379 23,242 660,621 Building 16,588 3,375 19,963 Other Proprietary 199,858 3,034 202,892 1 Payable from restricted assets: Utilities 59,013 - 59,013 Total Proprietary Funds 3,022,252 $ 32,841 3,055,093 I The Board has not engaged in any short-term debt activity during fiscal year 2012 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, 2012, 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. 267 i Indian River County,Florida Board of County Commissioners ` Notes To Financial Statements 1 Year Ended September 30, 2012 NOTE 11 -LONG-TERM LIABILITIES j A. Governmental Long-Term Debt Changes in Long-Term Liabilities Balance Balance October 1, September 30, 2011 Additions Deletions 2012 Accrued Compensated Absences: $ 4,163,758 $ 3,066,993 $ 3,048,565 $ 4,182,186 Bonds Payable: Limited General Obligation Bonds - 2006 Series 35,385,000 - 3,000,000 32,385,000 General Obligation Bonds - 2001 Series 4,430,000 - 4,430,000 - Spring Training Facility Revenue Bonds - 2001 Series 11,705,000 - 630,000 11,075,000 Total Bonds Payable 51,520,000 - 8,060,000 43,460,000 Grand Total $ 55,683,758 $ 3,066,993 $ 11,108,565 $ 47,642,186 Of the $4,182,186 liability for accrued compensated absences, management estimates that $3,293,589 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 I reported in the financial statements of the County by the fund which normally pays the personnel service costs of the employee. The General Obligation Bonds and Spring Training Facility Revenue Bonds are not reported in the f 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. Payments on the above general obligation and revenue bonds are made by debt service funds (refer to the Table of Contents for these debt service funds under the category: Combining Balance Sheet and Combining Statement of Revenues, Expenditures and Changes in Fund Balances of Nonmajor Governmental Funds). i 268 Indian River County,Florida i Board of County Commissioners Notes To Financial Statements Year Ended September 30, 2012 NOTE 11 -LONG-TERM LIABILITIES—Continued A. Governmental Long-Term Debt- Continued f Annual Debt Service Payments ( The annual debt service payments for bonds outstanding at September 30, 2012, are as follows: Fiscal Year Limited General Spring Training Facility Ending Obligation Bonds Revenue Bonds September 30 Series 2006 Series 2001 Principal Interest Principal Interest 2013 $ 3,120,000 $ 1,492,263 $ 655,000 $ 566,333 2014 3,255,000 1,367,463 685,000 537,513 i2015 3,390,000 1,204,712 725,000 501,550 2016 3,545,000 1,035,212 760,000 463,487 2017 3,705,000 893,413 795,000 423,587 2018-2022 15,370,000 1,774,350 3,945,000 1,443,575 2023-2027 - - 1,780,000 708,250 2028-2031 - - 1,730,000 218,750 Total 32,385,000 7,767,413 11,075,000 4,863,045 Less: Current portion 3,120,000 - 655,000 - Add: Unamortized ! bond premium 815,714 - - - + Total $ 30,080,714 $ 7,767,413 $ 10,420,000 $ 4,863,045 4 Limited General Obligation Bonds fPurpose — 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 f 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. I 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 Board upon the taxable real and personal property of the Board. 269 t Indian River County,Florida Board of County Commissioners Notes To Financial Statements Year Ended September 30, 2012 NOTE 11 -LONG-TERM LIABILITIES—Continued A. Governmental Long-Term Debt- Continued i Limited General Obligation Bonds - Continued . Bonds Issued-At September 30, 2012, Limited General Obligation Bonds consisted of the following: Outstanding at ! Interest Rates September 30, Description and Date Maturity Issue 2012 Limited General Obligation 4.00%-5.00% Bonds, 2006 Series 1/1 and 7/1 2021 $ 48,600,000 32.385,000 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 (GOB) (t Purpose — On November 2, 1992, County voters approved a bond referendum authorizing a total of $26,000,000 aggregate principal amount of general obligation bonds, in one or more series, to acquire environmentally sensitive lands, together with the necessary restoration, remediation, and reclamation activities to preserve and enhance such property. l On November 29, 2001, the Board issued the second series of GOBS in the amount of$11,000,000. The remaining outstanding principal balance of$3,620,000 was called early on July 1, 2012. 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 were used to pay the cost of issuance of the bonds, including the premiums for guaranty insurance. The last installment of these GOBS was paid on July 1, 2010. Spring TrainingFacil ty Revenue Bonds f Purpose - On August 15, 2001, the Board issued $16,810,000 of Spring Training Facility Revenue l Bonds, Series 2001. The Series 2001 bonds are being issued by the Board 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 currently known as "Vero Beach Sports Village" (formerly 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. 270 Indian River County,Florida Board of County Commissioners Notes To Financial Statements Year Ended September 30, 2012 NOTE 11 -LONG-TERM LIABILITIES - Continued A. Governmental Long-Term Debt—Continued i 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: I 1. Payments received by the Board 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 Board, 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. } 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$1,223,423 represent seventeen percent of total pledged revenues. All three pledged revenue sources totaled $7,276,317 for the current fiscal year. The Board applied 100% of the first two pledged revenues and six percent of the Half-Cent Sales Tax to the debt service payments. The total principal and interest remaining to be paid on the bonds is $15,938,045. Bonds Issued-At September 30, 2012, Spring Training Facility Revenue Bonds consisted of the following: Outstanding at Interest Rates September 30, Description and Date Maturity Issue 2012 Spring Training Facility 3.30%-5.25% Revenue Bonds, 2001 Series 4/1 and 10/1 2031 $ 16,810,000 $ 11.075,000 Optional Redemption - The Series 2001 bonds maturing on or after April 1, 2012, were 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, 2012 NOTE 11 -LONG-TERM LIABILITIES - Continued A. 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 l Date Principal Amount April 1, 2018 $ 840,000 April 1, 2019 890,000 April 1, 2020 930,000 April 1, 2021 980,000 I Term Bonds due April 1, 2027 Date Principal Amount April 1, 2022 $ 305,000 April 1, 2023 320,000 April 1, 2024 340,000 l 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 4 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, 2012 NOTE 11 -LONG-TERM LIABILITIES - Continued B. Proprietary Funds Long-Term Debt Changes in Long-Term Liabilities Balance Balance October 1, September 30, 2011 Additions Deletions 2012 Accrued Compensated Absences $ 864,879 $ 714,164 $ 676,936 $ 902,107 Bonds Payable: Recreational Revenue Refunding Series 2003 2,655,000 - 535,000 2,120,000 Water& Sewer Revenue Refunding Series 2005 20,490,000 1,480,000 19,010,000 Water& Sewer Revenue Refunding Series 2009 26,370,000 - 1,610,000 24,760,000 f Total Bonds Payable 49,515,000 - 3,625,000 45,890,000 Grand Total $ 50,379,879 $ 714,164 $ 4,301,936 $ 46,792,107 Annual Debt Service Pants The annual debt service payments for bonds outstanding at September 30, 2012 are as follows: Fiscal Year Recreational Water and Sewer Water and Sewer Ending Revenue Refunding Revenue Refunding Revenue Refunding September 30 Bonds Series 2003 Bonds Series 2005 Bonds Series 2009 Principal Interest Principal Interest Principal Interest 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 385,000 15,881 1,750,000 652,950 1,905,000 976,250 (l 2017 1,840,000 565,450 2,000,000 881,000 2018-2022 - - 10,615,000 1,405,250 11,600,000 2,801,250 2023-2024 - - - - 4,020,000 268,000 Total 2,120,000 201,287 19,010,000 5,037,900 24,760,000 8,334,100 Less: Current portion 555,000 - 1,530,000 - 1,675,000 - Unamortized bond discount 18,129 - - - - - Add: Unamortized bond premium - - 610,413 - 2,082,285 - 1 Total $1,546,871 $201,287 $18,090,413 $5,037,900 $25,167,285 $8,334,100 273 Indian River County,Florida Board of County Commissioners Notes To Financial Statements Year Ended September 30, 2012 NOTE 11 —LONG-TERM LIABILITIES - Continued B. Proprietary Funds Long-Term Debt- Continued 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 Board's outstanding Recreational Revenue Bonds, Series 1993. The Series 2003 bonds are being issued by the Board 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. 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 and is amortized over the life of the bonds. The unamortized balance of the deferred amount on the refunding at September 30, 2012 is $107,215 and is reflected as a deferred outflow of resources on the Statement of Net Position. I 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 November 2008. 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. The current principal and interest payments of$637,964 represent sixty-one percent of net revenues of $1,039,595 of the golf course. The total principal and interest remaining to be paid on the bonds is $2,321,287. All three pledged revenue sources totaled $2,004,997 for the current fiscal year. The Board did not utilize the second and third revenue sources toward the current year principal and interest payments. Rate Covenant—Net revenues shall be sufficient to pay 100% of reserve and current year principal and interest requirements. Bonds Issued-At September 30, 2012,the revenue bonds consisted of the following: ' Outstanding at Interest Rates September 30, Description and Date Maturity Issue 2012 Recreational Revenue 2.00—4.125% 9/1/16 $ 6,455,000 2,120,000 Refunding Bonds, Series 2003 3/1 and 9/1 Optional Redemption - The revenue bonds, maturing on or after September 1, 2014, are subject to redemption prior to maturity, at the option of the Board 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. 274 i Indian River County,Florida ( Board of County Commissioners Notes To Financial Statements Year Ended September 30, 2012 NOTE 11 —LONG-TERM LIABILITIES - Continued B. Proprietary Funds Long Term Debt - Continued f Water and Sewer Revenue Refunding Bonds, Series 2005 Purpose - The Series 2005 bonds were issued to defease $31,680,000 of the Board's outstanding Water and Sewer Revenue Bonds, Series 1996. These bonds were issued by the Board 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. f 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, which included shortening the term of the bonds by four years and lowering average annual debt service by $242,000, was $2,944,661 and is amortized over the life of the bonds. The unamortized balance of the deferred amount on the refunding at September 30, 2012 is $1,684,686 and is reflected as a deferred outflow of resources on the Statement of Net Position. I 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. j Annual principal and interest payments of$2,405,250 represent approximately eighteen percent of net I revenues of$13,217,926 of the utility system. The total principal and interest remaining to be paid on the bonds is $24,047,900. Rate Covenant—Net revenues shall be sufficient to pay 100% of reserve and 120% of current year principal and interest requirements. Bonds Issued- At September 30, 2012, the revenue bonds consisted of the following: Outstanding at Interest Rates September 30, Description and Date Maturity Issue 2012 Water and Sewer 3-5% Revenue Bonds, 3/1 and 9/1 2022 $ 27,675,000 19,010,000 Series 2005 Outstanding In-Substance Defeased Debt - The proceeds from the refunding were invested in Federal 1 Securities and 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. 275 Indian River County,Florida Board of County Commissioners Notes To Financial Statements Year Ended September 30, 2012 NOTE 11 -LONG-TERM LIABILITIES - Continued B. Proprietary Funds Long Term Debt—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 Board's outstanding Water and Sewer Revenue Bonds, Series 1993A. The refunding excluded debt service payments due September 1, 2010 and 2011. 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, which lowered average annual debt service by f $126,000, was $1,368,427 and is amortized over the life of the bonds. The unamortized balance of the f deferred amount on the refunding at September 30, 2012 is $1,083,338 and is reflected as a deferred outflow of resources on the Statement of Net Position. { 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 current principal and interest payments of$2,878,200 represent approximately twenty two percent of net revenues of$13,217,926 of the utility system. The total principal and interest remaining to be paid on the bonds is $33,094,100. Rate Covenant—Net revenues shall be sufficient to pay 100% of reserve and 120% of current year principal and interest requirements. f Bonds Issued- At September 30, 2012, the revenue bonds consisted of the following: Outstanding at Interest Rates September 30, Description and Date Maturity Issue 2012 Water and Sewer 4-5% Revenue Bonds, 3/1 and 9/1 2024 $ 26,370,000 24,760,000 Series 2009 Outstanding In-Substance Defeased Debt - The proceeds from the refunding were invested in Federal f Securities and 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. 276 Indian River County,Florida Board of County Commissioners Notes To Financial Statements Year Ended September 30, 2012 ! 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 $3.6 million. These costs will be recognized in future periods as the remaining capacity is filled. The Board'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: Capacity Estimated ! Used Closing Amount Closure Costs Class I - Segments I and II 58% 2030 $ 6,801,947 Construction and Demolition- Cell I 89% 2017 1,118,866 ( Post-closure Costs Class I - Segments I and H N/A N/A 2,413,435 Construction and Demolition- Cell I N/A N/A 179,488 ! Total account balance at 9/30/12: $ 10,513,736 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, 2012, $10,442,551 was on deposit at the Florida Local Government Investment Trust and $71,185 was on deposit in the Board's Operating account. A summary of changes in the landfill closure liability account is as follows: ! Balance Balance 10/01/11 Deposits Withdrawals 09/30/12 Closure and long-term care costs $ 10,016,236 497 500 $ - 10,513.736 Of the $10,513,736 liability for closure and long-term care costs,management estimates that no funds will be due and payable within one year. 277 Indian River County,Florida Board of County Commissioners Notes To Financial Statements Year Ended September 30, 2012 NOTE 13 —POLLUTION REMEDIATION In accordance with GASB Statement 49,Accounting and Financial Reporting for Pollution Remediation Obligations, a consultant evaluated five sites to assess pollution remediation liabilities. The consultant calculated for each site an expected value (EV) estimate for pollution remediation based on three plausible mitigation scenarios. An obligating event occurred at each of the following five sites requiring the Board (using the consultant's services) to attempt to accrue a liability for pollution remediation. The liability totaled $2,621,800 at September 30, 2012 for all five sites. The pollution remediation obligation is an estimate and subject to changes resulting from price increases and reductions, { technology, and changes in applicable laws or regulations. There are no estimated recoveries that would reduce the liability. Governmental Funds: 1) South Gifford Road closed lan(fill — The nature of the pollution remediation obligation is chlorinated solvent contamination. The consultant will conduct monitoring, bioremediation and reporting with the Florida Department of Environmental Protection (FDEP). The amount of the estimated year end liability is $2,425,000 and will be paid from the Optional Sales Tax Fund. 2) Old Administration Building — The nature of the pollution remediation obligation is closed underground storage tank contamination. The consultant will conduct monitoring and reporting with the FDEP. The amount of the estimated year end liability is $32,000 and will be paid from the General Fund. 3) Cattle dip site—The nature of the pollution remediation obligation is arsenic contamination. The consultant will conduct monitoring and assessment. The amount of the estimated year end liability is $73,200 and will be paid from the Impact Fees Fund. 4) Shadowbrook Estates — The nature of the pollution remediation obligation is arsenic and lead 1 contamination in two areas of a former citrus grove. The consultant will conduct the additional l assessment and natural attenuation monitoring. The amount of the estimated year end liability is $82,800 and will be paid from a nonmajor fund, the Land Acquisition Fund. i Total governmental funds liability: 2 613 000 Proprietary Funds: 5) North County Reverse Osmosis plant — The nature of the pollution remediation obligation is groundwater inorganic contamination. The consultant will conduct monitoring and assessment. The amount of the estimated year end liability is $8,800 and will be paid from the County Utilities Fund. Total proprietary funds liability:S&800 278 I Indian River County,Florida Board of County Commissioners Notes To Financial Statements Year Ended September 30, 2012 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. Effective July 1, 2011, the FRS became a contributory plan for all members, except DROP participants, whereby members contribute 3% and employers pay a rate based upon each member's employment class. Employer rates effective as of July 1, 2012 were as follows: regular class 5.18%, senior class 6.30%, special risk 14.90%, and elected official class 10.23%. Employees elect participation in either the defined benefit plan (Pension Plan) or the defined contribution plan (Investment Plan). If the employee enrolled in the FRS prior to July 1, 2011, normal retirement is age 62 with 6 years of service or 30 years of service, regardless of age. If the employee f enrolled in the FRS oil or after July 1, 2011, normal retirement is age 65 with 8 years of service or 33 ! years of service, regardless of age. Under the Pension Plan, early retirement is available before reaching normal retirement age and will be subject to an early-retirement reduction of 5% for each year your age i at retirement is under your 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. Participants have access to the full value of their vested account balance when they leave FRS employment, regardless of 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 determined by age, years of service,the average of the highest 5 or 8 fiscal years of pay, membership class and the payment option selected at retirement. In addition to the above benefits, the FRS administers a Deferred Retirement Option Program (DROP). I 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. Employer contributions to the FRS for the fiscal years ended September 30, 2010, 2011 and 2012, were fequal to 13.4%, 12.8%, and 7.7% of the annual covered payroll. Employer contributions to the FRS for the fiscal years ended September 30, 2010, 2011, and 2012, were $5,602,795, $4,975,937 and $2,894,804 respectively. Employee contributions for the fiscal years ended September 30, 2011 and 2012 were $259,425 and $956,266. Both employer and employee contributions were equal to 100% of the required contribution for each year. lFlorida 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 1 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 and Education 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. 279 Indian River County, Florida Board of County Commissioners Notes To Financial Statements Year Ended September 30, 2012 NOTE 15—OTHER POSTEMPLOYMENT BENEFITS PLAN(OPEB) A. Plan Description { On September 23, 2008, the Board of County Commissioners approved resolution number 2008-163, establishing an irrevocable trust (OPEB Trust) to separately identify assets accumulated to pay OPEB f benefits for eligible retirees. The OPEB Trust includes 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 resolution also established the Board of County Commissioners as trustees of the OPEB Trust and the authority for the trustees to amend the benefit provisions. The OPEB Trust is a single-employer defined benefit plan (OPEB Plan). The OPEB plan subsidizes (see the chart below) 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 plan members). Employees hired on or after February 1, 2006, will not be eligible for any subsidy, regardless of the years of service or Medicare eligibility. ! Active participants as well as retirees are subject to the same benefits and rules. Retired employees are permitted to remain covered under the Board'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 retiree has the option to continue with the Board group health plan or elect Medicare Advantage Plan. The implicit rate subsidy applies to health and life insurance coverage since the premiums charged are based upon a blending of younger active employees and older retired employees. Health insurance premiums, effective October 1, 2011 range from $198 for Medicare participants to $735 for family coverage. Life insurance is available to retirees at a flat rate of $.20 per $1000 of coverage (to a maximum of$20,000 until the age of 70). After 70, the maximum amount of life insurance is$10,000. The Board subsidizes the cost of the health premiums for each retiree based upon their years of service and employment date (as mentioned above); a 2% discount is given 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 20% in addition to yrs of service-max 60% 01/01/04- 10/01/04 15 or more years 2%/yr-max 40% subsidy ` 10/01/04- 01/31/09 Less than 15 years No subsidy 20% subsidy 20% in addition to yrs of service-max 60% 10/01/04 - 01/31/09 15 or more years 2%/yr-max 40% subsidy 02/01/09 and after Less than 15 years No subsidy No subsidy 02/01/09 and after 1 15 or more years 2%/yr-max 40% No subsidy 280 f Indian River County,Florida Board of County Commissioners Notes To Financial Statements Year Ended September 30, 2012 NOTE 15—OTHER POSTEMPLOYMENT BENEFITS PLAN—Continued A. Plan Description—Continued The OPEB Trust financial statements are reported using the accrual basis of accounting and are included in the Indian River County Comprehensive Annual Financial Report (CAFR). Questions regarding the OPEB plan may be directed to the Finance Director. At October 1, 2011,the date of the latest actuarial valuation,plan participation consisted of: Active participants 1,428 Retired participants 371 Total participants 1.799 There are two classes of participants at October 1, 2011: Regular and senior management 1,127 Special risk 672 Total participants 1.799 The average employer's contribution was $1,981 per employee, approximately 4.5% of current payroll. f Financial statements for the OPEB Trust are included in this report and can be found on pages 40-41. A separate, stand-alone financial report is not issued by the Board; however, the OPEB Trust investments can be found in Note 2D and the Schedule of Funding Progress can be found on page 99. B. Funding Policy The Board of County Commissioners, in concert with the OPEB Board of Trustees, has the authority to l establish and amend the funding policy of the OPEB Plan. The OPEB Trust is advance funded by the t Board. For the year ended September 30, 2012, the County contributed $2.96 million to the qualifying OPEB Trust. Plan members receiving benefits contributed $1.5 million, or approximately 51 percent of the total premiums. It is the Board's policy to base future 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 OPEB Trust 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 cost for the current and two preceding years,the amount actually contributed, and the changes in the net obligation. 281 Indian River County,Florida Board of County Commissioners Notes To Financial Statements Year Ended September 30, 2012 NOTE 15—OTHER POSTEMPLOYMENT BENEFITS PLAN- Continued C. Annual OPEB Cost and Net OPEB Obligation- Continued FY 2011/2012 FY 2010/2011 FY 2009/2010 Annual Required Contribution $ 2,828,452 $ 2,948,682 $ 2,814,435 Interest on Net OPEB Obligation (12,323) (22,381) (7,272) Adjustment to Annual Required Contribution 14,075 23,385 7,779 Annual OPEB Cost(expense) 2,830,204 2,949,686 2,814,942 Contributions (2,962,301) (2,819,540) (3,030,792) Change in Net OPEB Obligation (132,097) 130,146 (215,850) Net OPEB Obligation—beginning of year (189,584) (319,730) (103,880) Net OPEB Obligation—end of year $ (321,681) $ (189,584) $ (319,730) Percentage of Annual OPEB Cost Contributed 104.67% 95.59% 107.67% D. Funded Status and Funding Progress The Schedule of Funding Progress and Schedule of Employer Contributions, presented as required supplementary information immediately following the County Notes to the Financial Statements (on page 99), presents multi-year trend regarding liabilities, funding, and payroll. The data also reflects whether the actuarial value of the plan assets is increasing or decreasing over time relative to the actuarial accrued liabilities for benefits. This information includes the current and past two actuarial valuations and five years of funding data. 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. 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. 282 Indian River County,Florida Board of County Commissioners Notes To Financial Statements Year Ended September 30, 2012 NOTE 15—OTHER POSTEMPLOYMENT BENEFITS PLAN-.Continued E. Actuarial Methods and Assumptions - Continued The actuarial methods are: Actuarial cost method Entry age normal cost method Amortization method Level percent of payroll projected to grow 4%per year Amortization period(closed) 16 years Asset valuation method Market Value The actuarial assumptions are: Investment rate of return 6.5% (net administrative expenses) Projected annual salaries increase 4.0%-9.47% (dependent on years of service and age) Healthcare cost trend rate 8.5% (decreasing 1/2% each year&thereafter to ( the ultimate value of 5.32%) Inflation rate 3 NOTE 16 - OPERATING LEASES The Board has entered into noncancelable operating leases, both as lessor and lessee. Lease terms vary from 1 to 99 years. Lease revenues totaled $587,765 and lease expenditures totaled $76,908 for the year ended September 30, 2012. 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 2013 $ 492,658 2014 458,600 2015 471,411 2016 456,234 2017 443,383 2018-2022 2,121,034 2023-2027 1,298,906 2028-2032 721,056 2033-2037 132,600 2038 27,900 Total future minimum receipts: $ 6,623,782 The property being leased is reported in the financial statements of County and has a cost of $29,060,384, and a carrying value of$20,723,566. Current year depreciation on property being leased was $368,896. 283 Indian River v r County, Florida Board of County Commissioners Notes To Financial Statements Year Ended September 30, 2012 NOTE 16 - OPERATING LEASES - Continued B. Future Minimum Lease Payments S 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, 2012: Year Amount 2013 $ 80,114 2014 42,739 2015 25,170 2016 25,170 2017 25,170 2018-2022 54,840 2023-2027 7,500 2028-2032 7,500 2033-2037 6,900 j 2038-2042 4,500 ' 2043-2047 4,500 2048-2052 3,300 2053-2057 2,400 I 2058-2062 1,500 2063-2067 1,500 2068-2072 1,500 2073-2077 1,500 Total future minimum lease payments: 295 803 1 I I 284 Indian River County,Florida Board of County Commissioners Notes To Financial Statements Year Ended September 30, 2012 NOTE 17 -FUND BALANCE GASB Statement 54 —Fund Balance Reporting and Governmental Funds Type Definitions 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. A. Categories f There are five categories of fund balance for governmental funds under Statement 54: j 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. ICommitted—Amounts whose use is constrained by the approval of a County ordinance by the Board of County Commissioners. This category also includes existing resources on hand to satisfy the 1 obligations that arise from contractual obligations entered into by the Board of County Commissioners. Assigned — The Board of County Commissioners is the governing body authorized to assign fund Ibalance amounts 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. IB. Fund Balance Policy I 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: IEmergencylDisaster 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. f 285 Indian River County,Florida Board of County Commissioners Notes To Financial Statements Year Ended September 30, 2012 NOTE 17 - FUND BALANCE—Continued B. 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. 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. At September 30, 2012,reserve amounts for those funds were: I Budget Disaster Relief Stabilization Total General Fund $ 5,200,000 $ 5,200,000 $ 10,400,000 Transportation Fund 700,000 700,000 1,400,000 Emergency Services District Fund 1,400,000 1,400,000 2,800,000 Total $ 7,300,000 $ 7,300,000 $ 14,600,000 The General Fund reserves are included in the unassigned fund balance on the balance sheet. The Emergency/Disaster Relief and Budget Stabilization Reserve amounts may only be revised by the Board of County Commissioners. 4 1 Minimum Fund Balance - The approved fund balance policy dictates the Board's attempt to maintain a minimum fund balance in the General, Transportation, and Emergency Services District funds of 20% of budgeted annual operating expenditures. The minimum fund balance level may be revised by the County Administrator or his designee. I C. 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. f I 286 Indian River County, Florida Board of County Commissioners Notes To Financial Statements Year Ended September 30, 2012 NOTE 18 -FUND BALANCE DEFICIT The following funds had a deficit in fund balance at September 30, 2012: Fund Deficit Nonmajor Governmental Funds: Metropolitan Planning Organization Fund $ 190,689 Federal/State Grants Fund 5,083 Total Deficit $ 195,772 The deficits for these two funds will be eliminated by grant proceeds in fiscal year 2013. l NOTE 19—NET POSITION ( A. Restricted Net Position The Board has established a restriction within the net position section of the proprietary funds for capital projects. Restricted net position at September 30, 2012 consist of the following: Restricted for Capital Projects: County Utilities Fund $ 17,941,773 B. Restatement of Beginning Net Position In accordance with the requirements of GASB Statement 65, Items Previously Reported as Assets and ( Liabilities, beginning net position for the Golf Course and Utilities Funds were restated. Due to the write off of the unamortized bond issuance costs outstanding at September 30, 2011, the Golf Course Fund's beginning net position was reduced by $49,523 and the Utilities Fund's beginning net position was reduced by$477,430. 287 I Indian River County,Florida Board of County Commissioners Notes To Financial Statements Year Ended September 30, 2012 NOTE 20 -RISK MANAGEMENT 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: 04/01/08 to 10/01/08 to 05/01/11 to I 09/30/08 04/30/11 09/30/12 Worker's Compensation $ 300,000 $ 350,000 $ 350,000 General Liability 250,000 250,000 200,000 Auto Liability 250,000 250,000 200,000 Property Damage 500 - 25,000 250,000 200,000 Error or Omissions 250,000 250,000 200,000 Annual Aggregate 1,000,000 2,000,000 2,000,000 Liquor Liability 1,000,000 1,000,000 1,000,000 ! f The Board purchases excess insurance to cover claims in excess of the liability coverage listed above. There is a 5% deductible per location for property damages arising due to a hurricane under the ! reinsurance policy. 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 has received one reimbursement, for a liability claim in excess of the general liability limit, in the amount of$134,820 in fiscal year 2012. The prior two fiscal years did not incur any excess settlements. 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 medical plan assumes all risk for claims, other than worker's compensation, up to $250,000 per occurrence. The Board has purchased a reinsurance policy to cover claims in excess of these limits. There were no medical claims in excess of the $250,000 limit for the current and prior two fiscal years. 1 288 1 Indian River County,Florida Board of County Commissioners Notes To Financial Statements Year Ended September 30, 2012 NOTE 20 -RISK MANAGEMENT- Continued General Liability,Property,Worker's Compensation and Medical—Continued The claims liability of $8,074,000 reported at September 30, 2012, 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, $2,197,855 will be liquidated over the next twelve months. Changes in the fund's claims liability amount during the current and prior three fiscal years are as follows: Balance at Claims Balance Fiscal Year and Changes Claims at Fiscal Beginning in Estimates Payments Year End 1 2008-2009 $ 6,895,000 $15,637,406 $ (14,657,406) $ 7,875,000 2009-2010 7,875,000 13,940,099 (13,916,099) 7,899,000 ( 2010-2011 7,899,000 12,901,425 (12,923,425) 7,877,000 2011-2012 7,877,000 13,967,831 (13,770,831) 8,074,000 Included in the charges to other funds is an amount to fund future catastrophic losses not actuarially determined; and at September 30, 2012, unrestricted net position of$24,330,918 has been designated for this purpose. The Board has elected to accrue the larger of the discounted liability or undiscounted liability. At September 30, 2012, the undiscounted liability was the greater of the two amounts. The discount rate used in the calculation was 2.5 percent. 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 g Y 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. I f 289 Indian River County,Florida Board of County Commissioners Notes To Financial Statements Year Ended September 30, 2012 NOTE 21 - COMMITMENTS AND CONTINGENCIES - Continued B. Contracts and Other Commitments The Board has various contracts and commitments outstanding at September 30, 2012. In the General Fund, contracts are for janitorial services, beach park landscape and custodial maintenance and external auditing services. In the Special Revenue Funds, contracts are for the construction of Fire Station 13 in the southern part of the County on 4th Street and 43rd Avenue, Oslo Road Widening from 43rd Avenue to 27th Avenue (Phase II) and from 58th Avenue to 43rd Avenue (Phase III), 66th Avenue Roadway Improvements from 16th Street to 4th Street, 27th Avenue Milling and Resurfacing, as well as a variety of other road paving and drainage projects. In the Capital Projects Fund, contracts are for the South County Regional Park Intergenerational Recreation Facility, PC South Algal Turf Scrubber Nutrient Recovery System and several sidewalk and road improvement projects throughout the County. In the Enterprise Funds, contracts are for Sandridge Golf Club driving range tee renovations, Segment III Landfill Expansion, Repaving of the Winter Beach, Roseland and Gifford customer convenience centers, West Wabasso gravity sewer system, South County Brine Disposal project and various other water and sewer projects. A summary of these projects at September 30, 2012, is as follows: Remaining Total Total Paid as of Balance at Contract Price September 30, 2012 September 30, 2012 General $ 570, 803 $ (339,750) $ 231,053 Special Revenue 32,783,500 (16,365,467) 16,418,033 Capital Projects 10,110,328 (7,292,557) 2,817,771 Enterprise 8,107,986 (4,590,047) 3,517,939 Total $ 51,572,617 $ (28,587,821) $ 22,984,796 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. I 290 P\e h ry d � � 5070 North highway AIA Suite 260 Vero Beach,FL 32963 Ph:772.234.8484 Fx: 772.234.8488 www.rehmann.com Independent Auditors' Report on Internal Control over Financial Reporting and on Compliance and Other Matters Based on an Audit of Financial Statements Performed in Accordance with Government Auditing Standards The Honorable Board of County Commissioners Indian River County, Florida We have audited the accompanying fund financial statements of each major fund and the aggregate remaining fund information of Indian River County, Florida Board of County of Commissioners (the "Board") as of and for the year ended September 30, 2012, which collectively comprise the Board's fund financial statements as listed in the table of contents. 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 Management of the Board is responsible for establishing and maintaining effective 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. I YAs&co!:>itlt.:urtB Wealth Advisor;; corporate hivestigators INTERNATIONAL 291 i Rehmann I 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 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 i 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 I 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. 4"Oltt�wa-/ri Vero Beach, Florida March 12, 2013 i • 1 1 1 I l 292 I ® R.,e n n North Highway A1A Suite e 250 Vero Beach,FL 32963 Ph:772.234.8484 Fx: 772.234.8488 www.rehmann.com Management Letter The Honorable Board of County Commissioners Indian River County, Florida We have audited the financial statements of each major fund and the aggregate remaining fund information of the Indian River County, Board of County of Commissioners (the "Board") as of and for the year ended September 30, 2012 and have issued our report thereon dated March 12, 2013. 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 Chapter 10.550, Rules of the Auditor General, and Schedule of Findings and Questioned Costs. Disclosures in those reports and schedule, which are dated March 12, 2013, 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(1)(i)1.), there were no findings and recommendations made in the preceding annual financial 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 make 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 identify any such findings. CPAs&Consutc znts %Ale tlth AdviSrofs Corporate Investigators ((( INTERNATIONAL 293 Re h m a -n n 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 identify 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. This letter is intended solely for the information and use of the Legislative Auditing f Committee, members of the Florida Senate and the Florida House of Representatives, the I` Florida Auditor General, federal and other state granting agencies, and applicable management within the entity, and is not intended to be and should not be used by anyone other than these specified parties. Vero Beach, Florida March 12, 2013 f f 294 CLERK OF THE CIRCUIT COURT AND COMPTROLLER � 295 I r/ R e h m a n n Rehmann Robson 5070 North Highway AIA Suite 250 Vero Beach,FL 32963 Ph:772.234.8484 Fx: 772.234.8488 Independent Auditors' Report www.rehmann.com The Honorable Jeffrey R. Smith Clerk of the Circuit Court and Comptroller Indian River County, Florida We have audited the accompanying fund financial statements of the major funds and the aggregate remaining fund information of the Indian River County, Florida Clerk of the Circuit Court (the "Clerk") as of and for the year ended September 30, 2012, which collectively comprise the Clerk's fund financial statements as listed in the table of contents. These financial statements are the responsibility of the Clerk's management. Our responsibility is to express opinions 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 financial statements are free of material misstatement. An audit includes examining, on a test basis, evidence supporting the amounts and disclosures in the financial statements. An audit also includes assessing the accounting principles used and significant estimates made by management, as well as evaluating the overall presentation of the financial statements. We believe that our audit provides a reasonable basis for our opinions. As described in Note 1, the fund financial statements present only the funds of the Clerk and do not purport to, and do not, present fairly the financial position of Indian River County as of September 30, 2012 the changes in its financial position, or, where applicable, its cash flows for the year then ended l in conformity with accounting principles generally accepted in the United States of America. In our opinion, the fund financial statements referred to previously present fairly, in all material respects, the financial position of the major funds and the aggregate remaining fund information of the Clerk as of September 30, 2012, and the changes in financial position thereof for the year then ended in conformity with accounting principles generally accepted in the United States of America. In accordance with Government Auditing Standards, we have also issued a report dated March 12, 2013 on our consideration of the Clerk's internal control over financial reporting and on our tests of its compliance with certain provisions of taws, 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 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 considered in assessing the results of our audit. r This report is intended solely for the information and use of management, the Clerk, 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. rL� 1 Vero Beach, Florida March 12, 2013 Rebmann is an independent member of Nexia International. CFAs&CoInstlicanis IANC filth Advisors Corporate Investigators INTERNATIONAL 296 r i Indian River County, Florida j Clerk of the Circuit Court and Comptroller f Balance Sheet Governmental Funds September 30, 2012 Total Governmental General Special Revenue Funds ASSETS Cash and cash equivalents $ 307,357 $ 2,335,415 $ 2,642,772 Accounts receivable 78,565 78,565 Prepaid items 22,136 11,762 33,898 Due from other governments 3,995 - 3,995 Total assets $ 412,053 $ 2,347,177 $ 2,759,230 LIABILITIES AND FUND BALANCES Liabilities: Accounts payable $ 4,081 $ 8,747 $ 12,828 Due to other governments 43,036 43,036 Other deposits held in escrow 222,713 - 222,713 Total liabilities 269,830 8,747 278,577 Fund Balances: f Nonspendable: Prepaid items 22,136 11,762 33,898 Restricted for: Court-related costs and improvements 120,087 2,293,412 2,413,499 Committed to: Court operations - 33,256 33,256 Total fund balances 142,223 2,338,430 2,480,653 Total liabilities and fund balances $ 412,053 $ 2,347,177 $ 2,759,230 The accompanying notes are an integral part of the financial statements. 297 4 Indian River County,Florida Clerk of the Circuit Court and Comptroller Statement of Revenues,Expenditures, and Changes in Fund Balances Governmental Funds For the Year Ended September 30,2012 Total Governmental General Special Revenue Funds REVENUES Intergovernmental $ 3,296,711 $ - $ 3,296,711 Charges for services 1,108,511 354,884 1,463,395 Judgments,fines and forfeits - 152,058 152,058 Interest 363 6,539 6,902 Total revenues 4,405,585 513,481 4,919,066 EXPENDITURES General government 1,709,019 470,723 2,179,742 Court related 3,529,676 149,631 3,679,307 Total expenditures 5,238,695 620,354 5,859,049 Excess of revenues over j (under)expenditures (833,110) (106,873) (939,983) OTHER FINANCING SOURCES(USES) Transfers from Board of County Commissioners 932,252 - 932,252 f Transfers to Board of County Commissioners (5,375) - (5,375) I Transfer to other governments (33,690) - (33,690) Total other financing sources(uses) 893,187 - 893,187 Net change in fund balances 60,077 (106,873) (46,796) Fund balances at beginning of year 82,146 2,445,303 2,527,449 Fund balances at end of year $ 142,223 $ 2,338,430 $ 2,480,653 The accompanying notes are an integral part of the financial statements. 298 Indian River County,Florida I- Clerk of the Circuit Court and Comptroller Statement of Revenues,Expenditures, and Changes in Fund Balances -Budget and Actual ! General Fund For the Year Ended September 30,2012 Variance with Final Budget Budgeted Amount Positive Original Final Actual (Negative) REVENUES ( Intergovernmental $ 3,327,601 $ 3,327,601 $ 3,296,711 $ (30,890) Charges for services 940,000 940,000 1,108,511 168,511 Interest - - 363 363 Total revenues 4,267,601 4,267,601 4,405,585 137,984 EXPENDITURES General government 1,630,655 1,684,216 1,709,019 (24,803) 4 Court related 3,419,738 3,643,904 3,529,676 114,228 1 Total expenditures 5,050,393 5,328,120 5,238,695 89,425 f Excess of revenues over f (under)expenditures (782,792) (1,060,519) (833,110) 227,409 OTHER FINANCING SOURCES(USES) Transfers from other funds 69,062 128,267 - (128,267) Transfers from Board of County Commissioners 932,252 932,252 932,252 - Transfers to Board of County Commissioners - - (5,375) (5,375) Transfers to other governments (218,522) - (33,690) (33,690) j Total other financing sources(uses) 782,792 1,060,519 893,187 (167,332) i Net change in fund balances $ - $ - 60,077 $ 60,077 Fund balances at beginning of year 82,146 Fund balances at end of year $ 142,223 f i l The accompanying notes are an integral part of the financial statements. 299 Indian River County,Florida Clerk of the Circuit Court and Comptroller Statement of Fiduciary Net Position i Agency Fund September 30,2012 f I ASSETS Cash and cash equivalents $ 4,426,491 Total assets $ 4,426,491 LIABILITIES Accounts payable $ 389 Due to other governments 1,208,493 Escrow deposits 3,217,609 Total liabilities $ 4,426,491 t f I The accompanying notes are an integral part of the financial statements. 300 I Indian River County, Florida Clerk of the Circuit Court and Comptroller R Notes To Financial Statements Year Ended September 30, 2012 NOTE 1 - SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES The Clerk of the Circuit Court and Comptroller (Clerk) 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 does not meet the definition of a legally separate organization and is not considered to be a component unit. The Clerk is considered to be a part of the I 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 and Comptroller only. The format of the Clerk'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 which are not accounted for in another fund. All financial resources, which are not accounted for and reported in another fund, 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'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 in a trustee capacity or as an agent. These funds cannot be used to support the Clerk's own programs. 301 Indian River County, Florida Clerk of the Circuit Court and Comptroller Notes To Financial Statements Year Ended September 30, 2012 NOTE I - SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES - Continued I 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 l as liabilities. The fiduciary fund is accounted for on the accrual basis. C. Budgetary Requirements f State statutes require the Clerk to prepare his budget in two parts: the budget relating to the State court system 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 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 May 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, i including funding from the Board, shall equal the total estimated expenditures. Management is 1 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. I 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 Items 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 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. 302 I Indian River County,Florida Clerk of the Circuit Court and Comptroller i Notes To Financial Statements Year Ended September 30, 2012 i NOTE 1 - SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES - Continued LG. Compensated Absences The Clerk accrues a liability for employees' rights to receive compensation for future absences when f certain conditions are met. The Clerk does not, nor is he legally required to, accumulate expendable 1 available financial resources to liquidate this obligation. Accordingly, the liability for compensated absences is not reported in the Clerk financial statements. Additional information on the liability is reflected in subsequent Note 6. ( H. Transfer In The Clerk budgeted one transfer in the amount of$128,267 from the public records modernization fund to subsidize court technology expenses. At year end, this amount was not needed due to recording fees exceeding budget. The non-court operations (finance function and board meeting recordings) were funded by the Board of County Commissioners in the amount of$932,252. 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. On October 29, 2012, $5,375 in unspent budget funds was returned to the Board. This transfer is also reported as due to other governments on the balance sheet. IWith 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$33,690, were submitted to the CCOC through the Department of Revenue for deposit to the Clerk of Court Trust Fund. 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 fgovernment 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-wide note on fund balance. Per 2009 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. Court-related revenues in excess of expenditures from July 1, 2012 through September 30, 2012 were $142,223; this amount is presented as fund balance of the General Fund at September 30, 2012. 303 1 Indian River County,Florida Clerk of the Circuit Court and Comptroller Notes To Financial Statements Year Ended September 30, 2012 NOTE 2 - CASH AND CASH EQUIVALENTS A. Deposits At September 30, 2012, the carrying value of the Clerk's deposits was $2,842,948 and the bank balance was $3,373,102. 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. Cash on hand at September 30, 2012 was $1,900. The Clerk's office follows 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. 1 B. Investments At September 30, 2012, the Clerk had $20,055 invested in the Fund B Surplus Funds Trust Fund (Fund B), a fluctuating net asset value pool. The fund was established by Florida Statute 218.405 and is administered by the Florida State Board of Administration(SBA). The SBA determined that Fund B did not meet the requirements of a SEC 2a7-like fund; therefore, a fair value factor (total net asset value of Fund B divided by total participant balances) was provided for reporting the value of the Clerk's participation in Fund B at fiscal year-end. This resulted in a negative adjustment of 5.1% of the portfolio ! balance, or$1,023. Consequently,the net investment in Fund B is reported at$19,032. The Clerk also participated in the Florida Trust Day to Day Fund, part of the Florida Local Government Investment Trust Fund. The Day to Day fund is a money market product of various securities with an average maturity of 55 days. It was established by Florida Statute 163.01, is administered by the Florida Association of Court Clerks, and is marked to market daily. At year end, the Clerk maintained a balance of$4,205,383 in this trust fund. The Clerk's office elected not to adopt a formal investment policy and selected the alternative investment guidelines as provided by Florida Statutes 218.415, subsection 17, which specifically permitted these State authorized pools. 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. Effective July 1, 2011, the FRS became a contributory plan for all members, except DROP participants, whereby members contribute 3% and employers pay a rate based upon each member's employment class. Classes and rates in effect at July 1, 2012 were: regular class 5.18%, senior class 6.30%, DROP class 5.44%, and elected official class 10.23%. j 304 i Indian River County, Florida Clerk of the Circuit Court and Comptroller Notes To Financial Statements Year Ended September 30, 2012 NOTE 3 —PENSION PLAN - Continued Florida Retirement System- Continued Employees elect participation in either the defined benefit plan (Pension Plan) or the defined contribution plan (Investment Plan). If the employee enrolled in the FRS prior to July 1, 2011, normal retirement is age 62 with 6 years of service or 30 years of service, regardless of age. If the employee enrolled in the FRS on or after July 1, 2011, normal retirement is age 65 with 8 years of service or 33 years of service, regardless of age. Under the Pension Plan, early retirement is available before reaching normal retirement age and will be subject to an early-retirement reduction of 5% for each year your age at retirement is under your 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. Participants have access to the full value of their vested account balance when they leave FRS employment, regardless of 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 determined by age, years of service, the average of the highest 5 or 8 fiscal years ( of pay, membership class and the payment option selected at retirement. For further information concerning the Florida Retirement System and contribution rates, please read County-wide Note 16, Pension Plans. Employer contributions to the FRS for the fiscal years ended September 30, 2010, 2011 and 2012, were equal to 10.62%, 9.92% and 5.21% of the annual covered payroll. Employer contributions to the FRS for the fiscal years ended September 30, 2010, 2011 and 2012 were $375,894, $371,781 and $186,001 respectively. Employee contributions for the fiscal years ended September 30, 2011 and 2012 were $23,576 and $91,895 respectively. Both employer and employee contributions were equal to 100% of the required contribution for each year. NOTE 4—OTHER POSTEMPLOYMENT BENEFITS S The Clerk participated in the Indian River County Other Postemployment Benefits Trust (IRCOT). The Clerk's 2012 annual required contribution of $165,045 was funded by the Board of County Commissioners in the amount of $26,362; non-court revenue in the amount of $25,176; court-related State expenditures in the amount of$111,624; and the public modernization trust fund in the amount of $1,883. 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. 305 Indian River County,Florida Clerk of the Circuit Court and Comptroller Notes To Financial Statements Year Ended September 30, 2012 NOTE 5—RISK MANAGEMENT Indian River County maintains a risk management program that provides for coverage of risks of loss l 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 participated in the County's self-insurance program during fiscal year 2012 at an annual cost of approximately $716,634. Further details of this self-insurance program are discussed in the County-wide financial statements and j County notes. NOTE 6—LONG-TERM LIABILITIES Changes in Long-Term Liabilities 1 The following is a schedule of changes in long-term liabilities as of September 30, 2012: Beginning Ending Balance Balance 10/01/11 Additions Deletions 9/30/12 Accrued Compensated Absences $ 346,201 U 85 488 Of the $285,488 liability for accrued compensated absences, management estimates that $75,000 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 by the fund which normally pays the personnel service costs of the 1 employee. 306 ` Fie h m a n n Rehmann Robson e 5070 North Highway AIA Suite 250 Vero Beach,FL 32963 Ph:772.234.8484 Fx:772.234.8488 www.rehmann.com r Report on Internal Control Over Financial Reporting and on Compliance and Other Matters Based on an Audit of Financial Statements Performed I in Accordance with Government Auditing Standards l The Honorable Jeffrey R. Smith Clerk of the Circuit Court and Comptroller Indian River County, Florida J We have audited the fund financial statements of the major fund and the aggregate c remaining fund information of the Indian River County, Florida Clerk of the Circuit Court (the "Clerk"), as of and for the year ended September 30, 2012, which collectively comprise the Clerk's fund financial statements and have issued our report thereon dated March 12, 2013. 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 Management of the Clerk is responsible for establishing and maintaining effective internal control over financial reporting. In planning and performing our audit, we considered the Clerk'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's internal control over financial reporting. Accordingly, we do not express an opinion on the effectiveness of the Clerk's internal control over financial reporting. 1 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 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. Rebmann is an independent member of Nexia International. CPAs&Consultants vrjeaith Advisors Corporate Investigators s INTL•RNAT[ONAL i307 Re h m a n n The Honorable Jeffrey R. Smith Clerk of Court and Comptroller { Page two Compliance and Other Matters As part of obtaining reasonable assurance about whether the Clerk'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. r This report is intended solely for the information and use of management, the Clerk, 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. 414 rL-f-14- i Vero Beach, Florida March 12, 2013 C l 308 J I ® h m a n Rebmann Robson 5070 North Highway AIA Suite 250 Vero Beach,FL 32963 Ph: 772.234.8484 Fx: 772.234.8488 Management Letter www.rehmann.com The Honorable Jeffrey y R. Smith Clerk of the Circuit Court and Comptroller Indian River County, Florida We have audited the fund financial statements of the major fund and the aggregate remaining fund information of the Indian River County, Florida Clerk of the Circuit Court (the "Clerk"), as of and for the year ended September 30, 2012, which collectively comprise the Clerk's fund financial statements and have issued our report thereon dated March 12, 2013. We conducted our audit 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; and Chapter 10.550, Rules of the Florida Auditor General. We have issued our Independent Auditors' Report on Internal Control over Financial Reporting and on Compliance and Other Matters Based on an Audit of the Financial Statements Performed in Accordance with Government Auditing Standards. Disclosures in that report, which is dated March 12, 2013, 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: 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 findings and recommendations made in the ` preceding annual financial audit report. There were no findings or recommendations in the preceding annual financial audit report. Section 10.554(1)(i)2., Rules of the Auditor General, requires our audit to include a review of the provisions of Section 218.415, Florida Statutes, regarding the investment of public funds. In connection with our audit, we determined that the Clerk 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 identify 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 financial statements that is less than material, but more than inconsequential. In connection with our audit, we did. Rehmann is an independent member of Nexia International. CPAs&Consultants Wealth Advisors Corporate Investigators INTERNATIONAL 4 309 I ®J Re h man n 4 The Honorable Jeffrey R. Smith Clerk of the Circuit Court and Comptroller Page two � Section 10.554(1)(i)5., Rules of the Auditor General, provides that the auditor may, based on i professional judgment, report the following matters that have an inconsequential effect on j 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 identify 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. j Section 10.554(1)(i)8., Rules of the Auditor General, requires a statement as to whether or not the Clerk complied with the requirements of Sections 28.35 and 28.36, Florida Statutes. In connection with our audit, we determined that the Clerk complied with such requirements. Our management letter is intended solely for the information and use of the Legislative Auditing Committee, members of the Florida Senate and the Florida House of I Representatives, the Florida Auditor General, Federal and other granting agencies, and applicable management and is not intended to be and should not be used by anyone other than these specified parties. 4414 Vero Beach, Florida March 12, 2013 1 310 I 1 I f PROPERTY APPRAISER 311 f Rebmann Robson P\e mann 5070 North Highway AIA Suite 250 Vero Beach,FL 32963 Ph: 772.234,8484 Fx: 772.234.8488 Independent Auditors' Report www.rehmann.com The Honorable David C. Nolte Property Appraiser Indian River County, Florida We have audited the accompanying fund financial statements of the major fund of the Indian River County, Florida Property Appraiser (the "Property Appraiser") as of and for the year ended September 30, 2012, which comprise the Property Appraiser's fund financial statements as listed in the table of contents. These financial statements are the responsibility of the Property Appraiser's j management. Our responsibility is to express an opinion on the financial statements based on our J 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 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 fund financial statements present only the fund of the Property Appraiser and do not purport to, and do not, present fairly the financial position of Indian River County as of September 30, 2012 the changes in its financial position, or, where applicable, its cash flows for the year then ended in conformity with accounting principles generally accepted in the United States of America. In our opinion, the fund financial statements referred to previously present fairly, in all material respects, the financial position of the funds of the Property Appraiser as of September 30, 2012, and the changes in financial position thereof for the year then ended in conformity with accounting principles generally accepted in the United States of America. { i In accordance with Government Auditing Standards, we have also issued a report dated March 12, 2013 on our consideration of the Property Appraiser's internal control over financial reporting and on our y 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 internal control over financial reporting or on compliance. That report is an integral part of an audit j performed in accordance with Government Auditing Standards and should be considered in assessing the results of our audit. 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 l intended to be and should not be used by anyone other than these specified parties. Vero Beach, Florida March 12, 2013 Rebmann is an independent member of Nexia International. ("'PAs&C 0I1S1 lT.arlrS wealth Advisor:; CorPorate investigators 4 INTERNATIONAL 312 Indian River County, Florida Property Appraiser Balance Sheet General Fund September 30, 2012 I ASSETS Cash and cash equivalents $ 171,932 Accounts receivable 3,385 Total assets $ 175,317 LIABILITIES AND FUND BALANCES Liabilities: Accounts payable $ 38,591 Due to other governments 121,391 ( Deposits 15,335 ( Total liabilities 175,317 Fund Balances: Unassigned _ Total fund balances Total liabilities and fund balances $ 175,317 The accompanying notes are an integral part of the financial statements, 313 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 30,2012 Variance with Final Budget Budgeted Amount Positive Original Final Actual (Negative) REVENUES Charges for services $ 2,818,582 $ 2,818,100 $ 2,826,103 $ 8,003 Interest - - 1,324 1,324 Total revenues 2,818,582 2,818,100 2,827,427 9,327 y EXPENDITURES I General government 2,818,582 2,818,100 2,706,036 112,064 l Total expenditures 2,818,582 2,818,100 2,706,036 112,064 Excess of revenues over (under)expenditures - - 121,391 121,391 OTHER FINANCING USES Transfers to Board of County Commissioners - - (109,762) (109,762) Transfers to other governments - - (11,629) (11,629) Total other financing uses - - (121,391) (121,391) l Net change in fund balances $ - $ - - $ - Fund balances at beginning of year - Fund balances at end of year $ - l The accompanying notes are an integral part of the financial statements. 314 Indian River County, Florida Property Appraiser Notes To Financial Statements Year Ended September 30, 2012 NOTE I - 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 I 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. I A. Description of Funds For reporting purposes,the accounting records are organized on the basis of governmental funds. Governmental Fund I 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 financial resources, which are not accounted for and reported in another fund, are recorded in the General Fund. The governmental fund measurement focus is based upon determination of financial position and changes in t 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 g ry q 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. 315 Indian River County,Florida Property Appraiser Notes To Financial Statements Year Ended September 30, 2012 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 $121,391 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 f 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-wide note on fund balance. NOTE 2 - CASH Deposits At September 30, 2012, the carrying amount of the Property Appraiser's deposits was $171,862 and the bank balance was $214,123. 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. Cash on hand at September 30, 2012 was $70. 316 I Indian River County,Florida ( Property Appraiser ( Notes To Financial Statements Year Ended September 30, 2012 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. Effective July 1, 2011, the FRS became a contributory plan for all members, except DROP participants, whereby members contribute 3% and employers pay a rate based upon each member's employment class (regular class 5.18%, senior class 6.30%, and elected official class 10.23%). Employees elect participation in either the defined benefit plan (Pension Plan) or the defined contribution plan (Investment Plan). If the employee enrolled in the FRS prior to July 1, 2011, normal retirement is age 62 with 6 years of service or 30 years of service, regardless of age. If the employee enrolled in the FRS on or after July 1, 2011, normal retirement is age 65 with 8 years of service or 33 years of service, regardless of age. Under the Pension Plan, early retirement is available before reaching normal retirement age and will be subject to an early-retirement reduction of 5% for each year your age at retirement is under your 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. Participants have access to the full value of their vested account balance when they leave FRS employment, regardless of 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 determined by age, years of service, the average of the highest 5 or 8 fiscal years t of pay, membership class and the payment option selected at retirement. For further information concerning the Florida Retirement System and contribution rates, please read County-wide Note 15, Pension Plans. Employer contributions to the FRS for the fiscal years ended September 30, 2010, 2011, and 2012, were equal to 10.73%, 10.02%, and 5.41% of the annual covered payroll. Employer contributions to the FRS for the fiscal years ended September 30, 2010, 2011, 2012 were $224,920, $195,025, and $102,232 respectively. Employee contributions for the fiscal years ended September 30, 2011 and 2012 were $13,320 and $52,696 respectively. Both employer and employee contributions were 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 2012 annual required contribution of $65,905 was funded by the Board of County Commissioners as part of a total contribution determined by the IRCOT actuary. Further information on the IRCOT can be found in the County-wide financial statements and in the County notes. 317 Indian River County, Florida Property Appraiser Notes To Financial Statements Year Ended September 30, 2012 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 2012 at an annual cost of approximately $271,260. Further details on the self-insurance program are discussed in the County-wide financial statements and County notes. NOTE 6—LONG-TERM LIABILITIES Changes in Long-Term Liabilities A summary of changes in long-term liabilities is as follows: Beginning Ending Balance Balance 10/01/11 Additions Deletions 09/30/12 Accrued Compensated Absences 75 789 106,709 161,476 $ 21,022 Of the $21,022 liability for accrued compensated absences, management estimates that $10,000 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 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. i 318 Re h m a n n Rebmann Robson 5070 North Highway AIA Suite 250 Vero Beach,FL 32963 Ph: 772.234.8484 Fx: 772.234.8488 www.rehmann.com 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 fund financial statements of the major fund of the Indian River County, Florida Property Appraiser ("the Property Appraiser"), as of and for the year ended September 30, 2012, which comprises the Property Appraiser's fund financial statements and have issued our report thereon dated March 12, 2013. 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 Management of the Property Appraiser is responsible for establishing and maintaining effective 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 and corrected on a timely basis. 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. Rehmann Ia an independent member of Nexia International. C;r s!ti;cnsIirams Wealth Advisors Corporate Investigators INTERNATIONAL f 319 f PJARehmann I The Honorable David C. Nolte Property Appraiser Page two Compliance and Other Matters As part of obtaining reasonable assurance about whether the Property Appraiser's financial l 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 management, the Property Appraiser, Indian River County, others within the entity, the Florida Auditor General, and applicable federal and state agencies, and is not intended to be and should not be used by anyone other than these specified parties. Vero Beach, Florida March 12, 2013 l l 320 f d Re h m a n n Rehmann Robson 5070 North Highway AIA Suite 250 Vero Beach,FL 32963 Ph: 772.234.8484 Fx:772.234.8488 www,rehmann.com Management Letter The Honorable David C. Nolte Property Appraiser Indian River County, Florida We have audited the fund financial statements of the major fund information of the Indian River County, Florida Property Appraiser (the "Property Appraiser"), as of and for the year ended September 30, 2012, which comprises the Property Appraiser's fund financial statements and have issued our report thereon dated March 12, 2013. We conducted our audit 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; and Chapter 10.550, Rules of the Florida Auditor General. We have issued our Independent Auditors' Report on Internal Control over Financial Reporting and on Compliance and Other Matters Based on an Audit of the Financial Statements Performed in Accordance with Government Auditing Standards. Disclosures in that report, which is dated March 12, 2013, 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: 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 findings and recommendations made in the preceding annual financial audit report. There were no findings or recommendations in the preceding annual financial audit report. 4 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 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 identify 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 financial statements that is less than material, but more than inconsequential. In connection with our audit, we did not identify any such findings. Rehmann is an independent member of Nexia Intemational. C 8s&C:olvsuhants Wealth Advisors Corporate Investigators � INTERNATIONAL 321 ®-4 I\ehmann 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 identify any such findings. Section 10.554(1)(i)6., Rules of the Auditor General, requires that the name or official title l and legal authority for the primary government and each component unit of the reporting I 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. This letter is intended solely for the information and use of the Legislative Auditing Committee, members of the Florida Senate and the Florida House of Representatives, the Florida Auditor General, Federal and other granting agencies, and applicable management and is not intended to be and should not be used by anyone other than these specified l parties. J'��a-nom Vero Beach, Florida March 12, 2013 l 322 I SHERIFF ®� Re h m a n n Rehmann Robson 5070 North Highway AIA Suite 250 Vero Beach,FL 32963 Ph: 772.234.8484 Fx: 772.234.8488 t www.rehmann.com Independent Auditors' Report The Honorable Deryl Loar Sheriff Indian River County, Florida We have audited the accompanying fund financial statements of the major funds and the aggregate remaining fund information of the Indian River County, Florida Sheriff (the "Sheriff") as of and for the year ended September 30, 2012, which collectively comprise the Sheriff's fund financial statements as listed in the table of contents. These financial statements are the responsibility of the Sheriff's management. Our responsibility is to express opinions 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 financial statements are free of material misstatement. An audit includes examining, on a test basis, evidence supporting the amounts and disclosures in the financial statements. An audit also includes assessing the accounting principles used and significant estimates made by management, as well as evaluating the overall presentation of the financial statements. We believe that our audit provides a reasonable basis for our opinions. As described in Note 1, the fund financial statements present only the funds of the Sheriff and do not { purport to, and do not, present fairly the financial position of Indian River County as of September 30, 2012 the changes in its financial position, or, where applicable, its cash flows for the year then ended in conformity with accounting principles generally accepted in the United States of America. In our opinion, the fund financial statements referred to previously present fairly, in all material respects, the financial position of the major funds and the aggregate remaining fund information of the Sheriff as of September 30, 2012, and the changes in financial position thereof for the year then ended in conformity with accounting principles generally accepted in the United States of America. In accordance with Government Auditing Standards, we have also issued a report dated March 12, 2013 on our consideration of the Sheriff'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 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 considered in assessing the results of our audit. 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 l be and should not be used by anyone other than these specified parties. JZ� Vero Beach, Florida March 12, 2013 Rebmann is an independent member of Nexia International. l CPAs&Co;rs:llrams Wealth Advisom Corporate Investigators � INTERNATIONAL 324 I Indian River County, Florida Sheriff Balance Sheet Governmental Funds September 30, 2012 Total Special Governmental General Revenue Funds ASSETS I Cash and cash equivalents $ 1,554,284 $ 2,002,061 $ 3,556,345 Accounts receivable- net 45,716 7,422 53,138 Due from other governments - 5,633 5,633 Prepaid items 118 - 118 Total assets $ 1,600,118 $ 2,015,116 $ 3,615,234 LIABILITIES AND FUND BALANCES Liabilities: Accounts payable $ 1,593,358 $ 118,450 $ 1,711,808 l Due to other governments 6,760 6,760 Total liabilities 1,600,118 118,450 1,718,568 IFund Balances: Nonspendable: Prepaid items 118 - 118 Restricted for: Law enforcement/public safety - 1,505,098 1,505,098 I Committed for: Law enforcement/public safety - 391,568 391,568 Unassigned (118) - (118) Total fund balances 1,896,666 1,896,666 Total liabilities and fund balances $ 1,600,118 $ 2,015,116 $ 3,615,234 I 4 ' f The accompanying notes are an integral part of the financial statements. 325 Indian River County, Florida Sheriff Statement of Revenues, Expenditures, and Changes in Fund Balances Governmental Funds For the Year Ended September 30,2012 Total Special Governmental t General Revenue Funds l) REVENUES Intergovernmental $ - $ 64,478 $ 64,478 Charges for services - 308,684 308,684 Judgments,fines and forfeits - 183,138 183,138 Interest - 23 23 Miscellaneous 62,026 - 62,026 Total revenues 62,026 556,323 618,349 EXPENDITURES f Public safety 35,632,059 908,952 36,541,011 Court related 1,504,980 8,821 1,513,801 Total expenditures 37,137,039 917,773 38,054,812 Excess of revenues over (under)expenditures (37,075,013) (361,450) (37,436,463) OTHER FINANCING SOURCES(USES) Transfers from Board of County Commissioners 37,079,084 230,805 37,309,889 Transfers to Board of County Commissioners (4,071) - (4,071) Total other financing sources 37,075,013 230,805 37,305,818 Net change in fund balances - (130,645) (130,645) Fund balances at beginning of year - 2,027,311 2,027,311 Fund balances at end of year $ - $ 1,896,666 $ 1,896,666 l The accompanying notes are an integral part of the financial statements. 326 Indian River County,Florida Sheriff Il Statement of Revenues,Expenditures,and Changes in Fund Balances-Budget and Actual General Fund For the Year Ended September 30,2012 Variance with Final Budget Budgeted Amount Positive ( Original Final Actual (Negative) I REVENUES Miscellaneous $ - $ 62,026 $ 62,026 $ - Total revenues - 62,026 62,026 - EXPENDITURES Public safety 36,883,794 35,636,120 35,632,059 4,061 Court related 1,574,313 1,504,990 1,504,980 10 Total expenditures 38,458,107 37,141,110 37,137,039 4,071 Excess of revenues over (under)expenditures (38,458,107) (37,079,084) (37,075,013) 4,071 OTHER FINANCING SOURCES(USES) Transfers from Board of County Commissioners 38,458,107 37,079,084 37,079,084 - Transfers to Board of County Commissioners - (4,071) (4,071) Total other financing sources 38,458,107 37,079,084 37,075,013 (4,071) Net change in fund balances $ - $ - - $ - Fund balances at beginning of year - Fund balances at end of year $ - I i The accompanying notes are an integral pact of the financial statements. 327 1 Indian River County, Florida Sheriff Statement of Fiduciary Net Position Agency Fund September 30, 2012 l ASSETS Cash and cash equivalents $ 84,088 Total assets $ 84,088 LIABILITIES Escrow deposits $ 845088 Total liabilities $ 84,088 I t I The accompanying notes are an integral part of the financial statements. 328 i Indian River County, Florida Sheriff Notes To Financial Statements Year Ended September 30, 2012 jNOTE 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. f 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 Sheriff, which are not accounted for in another fund. All financial resources, which are not accounted for and reported in another fund, 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 Agency Fund— The Agency Fund is used to account for assets held by the Sheriff in a trustee capacity or as an agent. These funds cannot be used to support the Sheriff'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. I I 329 Indian River County, Florida Sheriff Notes To Financial Statements Year Ended September 30, 2012 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 I 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 l the Board of County Commissioners. This unspent budget totaled $4,071 and was reported as a transfer to the Board of County Commissioners at year end. These transfers are also included as due to other governments on the balance sheet. 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-wide note on fund balance. l 1 330 i Indian River County,Florida ( Sheriff Notes To Financial Statements Year Ended September 30, 2012 NOTE 2 - CASH ( Deposits At September 30, 2012, the carrying amount of the Sheriff's deposits was $3,640,433, and the bank balance was $5,700,087. 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 218.415, subsection 17. Refer to the County-wide Note 4, Cash and Cash Equivalents, for the definition of custodial credit risk. l 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 10/01/11 Additions Deletions 09/30/12 Tangible Personal Property $ 19,021.420 1,186,435 1 041 639 19.166 216 Refer to the County-wide Note on capital assets for capitalization threshold, depreciation methodology and useful lives. I 331 Indian River County,Florida i Sheriff Notes To Financial Statements Year Ended September 30, 2012 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. Effective July 1, 2011, the FRS became a contributory plan for all members, except DROP participants, whereby members contribute 3% and employers pay a rate based upon each member's employment class (regular class 5.18%, special risk 14.90%, senior class 6.30%, and elected official class 10.23%). Employees elect participation in either the defined benefit plan (Pension Plan) or the defined contribution plan (Investment Plan). If the employee enrolled in the FRS prior to July 1, 2011, normal retirement is age 62 with 6 years of service or 30 years of service, regardless of age. If the employee enrolled in the FRS on or after July 1, 2011, normal retirement is age 65 with 8 years of service or 33 years of service, regardless of age. Under the Pension Plan, early retirement is available before reaching normal retirement age and will be subject to an early-retirement reduction of 5% for each year your age at retirement is under your 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. Participants have access to the full value of their vested account balance when they leave FRS employment, regardless of 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 determined by age, years of service,the average of the highest 5 or 8 fiscal years of pay, membership class and the payment option selected at retirement. For further information l concerning the Florida Retirement System and contribution rates, please read County-wide Note 16, Pension Plans. Employer contributions to the FRS for the fiscal years ended September 30, 2010, 2011, and 2012 were equal to 18.29%, 17.87%, and 11.30% of the annual covered payroll. Employer contributions to the FRS for the fiscal years ended September 30, 2010, 2011, 2012 were $4,294,161, $4,048,292, and $2,544,542 respectively. Employee contributions for the fiscal years ended September 30, 2011 and 2012 were $146,774 and $629,659 respectively. Both employer and employee contributions were 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 2012 annual required contribution of $1,101,834 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. 332 f i Indian River County,Florida Sheriff Notes To Financial Statements Year Ended September 30, 2012 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 2012 at an annual cost of approximately $3,458,737. ( Further details on this self-insurance program are disclosed in the County-wide financial statements and County notes. NOTE 7—LONG-TERM LIABILITIES Changes in Long-Terni Liabilities The following is a schedule of changes in long-term liabilities as of September 30, 2012: Beginning Ending Balance Balance 10/01/11 Additions Deletions 09/30/12 I Accrued Compensated Absences 6.054,416 $ 3,594,958 $ 3,311,513 16,337861 Of the $6,337,861 liability for accrued compensated absences, management estimates that $3,100,000 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 County-wide financial statements and County notes. NOTE 8—OPERATING LEASES The Sheriff has entered into noncancelable operating leases as lessee of a building, hangar, mail machine, and copiers. Lease expenditures totaled $105,639 for the year ended September 30, 2012. The following is a schedule by years of minimum future rentals to be paid by the Sheriff for noncancelable operating leases as of September 30: Year Amount 2013 $ 82,987 2014 32,332 2015 11,482 2016 5,983 2017 2,992 Total Future Minimum Lease Payments 135 776 333 Indian River County,Florida Sheriff Notes To Financial Statements Year Ended September 30, 2012 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. 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 Sheriff. ( f I I E f 334 ', e h man Rebmann Robson 5070 North Highway AIA Suite 250 Vero Beach,FL 32963 Ph: 772.234.8484 Fx: 772.234.8488 www.rehmanri.com 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 DerY t Loar Sheriff Indian River County, Florida We have audited the fund financial statements of the major fund and the aggregate remaining fund information of the Indian River County, Florida Sheriff (the "Sheriff"), as of and for the year ended September 30, 2012, which collectively comprise the Sheriff's fund financial statements and have issued our report thereon dated March 12, 2013. 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 Management of the Sheriff is responsible for establishing and maintaining effective internal control over financial reporting. In planning and performing our audit, we considered the Sheriff's internal control over financial reporting as a basis for designing our auditing procedures for the purpose of expressing our opinion on the financial statements, but not for the purpose of expressing an opinion on the effectiveness of the Sheriff's internal control over financial reporting. Accordingly, we do not express an opinion on the effectiveness of the Sheriff'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, C 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 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. I Rehmann is an independent member of Nexia[ntemational. f CPAs&Consultants `0)eaith Advisors Corporate Investigators INTERNATIONAL 335 i ®� P,.,e h m a n n The Honorable Deryl Loar Sheriff Page two 4 Compliance and Other Matters As part of obtaining reasonable assurance about whether the Sheriff's financial statements f 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 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. r 4 Vero Beach, Florida March 12, 2013 l l 1 1 I 336 NA \e h m a n n Rebmann Robson 5070 North Highway AIA Suite 250 Vero Beach,FL 32963 I Ph: 772.234.8484 Fx: 772.234.8488 www.rehmann.com Management Letter The Honorable Deryl Loar i Sheriff ! Indian River County, Florida We have audited the fund financial statements of the major fund and the aggregate remaining fund information of the Indian River County, Florida Sheriff (the "Sheriff"), as of and for the year ended September 30, 2012, which collectively comprise the Sheriff's fund ! financial statements and have issued our report thereon dated March 12, 2013. ! We conducted our audit 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; and Chapter 10.550, Rules of the Florida Auditor General. We have issued our Independent Auditors' Report on Internal Control over Financial Reporting and on Compliance and Other Matters Based on an Audit of the Financial Statements Performed in Accordance with Government Auditing Standards. Disclosures in that report, which is dated March 12, 2013, 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: 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 findings and recommendations made in the preceding annual financial audit report. There were no findings or recommendations in the preceding annual financial audit report. fSection 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 complied with Section 218.415, Florida Statutes. Section 10.554(1)(i)3., Rules of the Auditor General, requires that we address in the f management letter any recommendations to improve financial management. In connection with our audit, we did not identify 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 financial statements that is less than material, but more than inconsequential. In connection with our audit, we did not identify any such findings. Rebmann is an independent member of Nexia International. CPAs t§Consuhanus 6Nealth Advis,rs Corporate Investigators INTERNATIONAL 337 I Re h m a n n The Honorable DerY t 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 identify 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. This letter is intended solely for the information and use of the Legislative Auditing Committee, members of the Florida Senate and the Florida House of Representatives, the Florida Auditor General, Federal and other granting agencies, and applicable management and is not intended to be and should not be used by anyone other than these specified parties. l _ Vero Beach, Florida March 12, 2013 I 338 i i i i i i i i SUPERVISOR OF ELECTIONS 339 i Ren n Rebmann Robson 5070 North Highway AIA Suite 250 Vero Beach,FL 32963 Ph: 772.234.8484 Fx: 772.234.8488 Independent Auditors' Report www.rehmann.com The Honorable Leslie Rossway Swan Supervisor of Elections Indian River County, Florida We have audited the accompanying fund financial statements of the major fund and the aggregate remaining fund information of the Indian River County, Florida Supervisor of Elections (the "Supervisor of Elections") as of and for the year ended September 30, 2012, which collectively comprise the Supervisor of Election's fund financial statements 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 financial statements are free of material misstatement. An audit includes examining, on a test basis, evidence supporting the amounts and disclosures in the financial statements. An audit also includes assessing the accounting principles used and significant estimates made by management, as well as evaluating the overall presentation of the financial statements. We believe that our audit provides a reasonable basis for our opinion. As described in Note 1, the fund financial statements present only the funds of the Supervisor of Elections and do not purport to, and do not, present fairly the financial position of Indian River County as of September 30, 2012 the changes in its financial position, or, where applicable, its cash flows for the year then ended in conformity with accounting principles generally accepted in the United States of America. In our opinion, the fund financial statements referred to previously present fairly, in all material respects, the financial position of the funds of the Supervisor of Elections as of September 30, 2012, and the changes in financial position thereof for the year then ended in conformity with accounting principles generally accepted in the United States of America. In accordance with Government Auditing Standards, we have also issued a report dated March 12, 2013 on our consideration of the Supervisor of Elections' internal control over financial reporting and on our tests of its compliance with certain provisions of laws, regulations, contracts, and grant agreements II 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 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 considered in assessing the results of our audit. 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 f intended to be and should not be used by anyone other than these specified parties. 4"011 J7�-a�x Vero Beach, Florida March 12, 2013 f Rehmann is an independent member of Nexia International. f I CPAs.§ :lls_tIT_in'ts 0kalt1i Advisor;, Corporate Investigators t INTERNATIONAL l 340 Indian River County,Florida i Supervisor of Elections Balance Sheet Governmental Funds ( September 30,2012 Total Special Governmental General Revenue Funds ASSETS ( Cash and cash equivalents $ 36,150 $ 9,142 $ 45,292 Prepaid items 4,803 4,803 Total assets $ 40,953 $ 9,142 $ 50,095 LIABILITIES AND FUND BALANCES Liabilities: Accounts payable $ 16,659 $ - $ 16,659 Due to other governments 24,294 - 24,294 I Unearned revenue - 9,142 9,142 Total liabilities 40,953 9,142 50,095 Fund Balances: Nonspendable: Prepaid items 4,803 - 4,803 Unassigned (4,803) - (4,803) Total fund balances - - - Total liabilities and fund balances $ 40,953 $ 9,142 $ 50,095 1 I l 1 l The accompanying notes are an integral part of the financial statements. 341 Indian River County,Florida Supervisor of Elections Statement of Revenues,Expenditures,and Changes in Fund Balances Governmental Funds For the Year Ended September 30,2012 I Total Special Governmental General Revenue Funds REVENUES Intergovernmental $ - $ 25,250 $ 25,250 Charges for services 5,003 - 5,003 Miscellaneous 52,708 - 52,708 Total revenues 57,711 25,250 82,961 EXPENDITURES General government 1,166,995 35,425 1,202,420 I Total expenditures 1,16.6_,_995 35,425 1,202,42.0 Excess of revenues over (under)expenditures (1,109,284) (10,175) (1,119,459) f OTHER FINANCING SOURCES(USES) 1 Transfers from Board of County Commissioners 1,136,009 - 1,136,009 Transfer from other funds - 2,431 2,431 Transfers to Board of County Commissioners (24,294) - (24,294) Transfer to other funds (2,431) - (2,431) Total other financing sources(uses) 1,109,284 2,431 1,111,715 Net change in fund balances - (7,744) (7,744) Fund balances at beginning of year - 7,744 7,744 Fund balances at end of year $ - $ - $ - I 1 1 The accompanying notes are an integral part of the financial statements. 342 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 30,2012 Variance with f Final Budget Budgeted Amount Positive Original Final Actual (Negative) REVENUES Charges for services $ - $ - $ 5,003 $ 5,003 Miscellaneous 52,708 52,708 Total revenues - 52,708 57,711 5,003 EXPENDITURES General government 1,133,509 1,186,217 1,166,995 19,222 Total expenditures 1,133,509 1,186,217 1,166,995 19,222 Excess of revenues over (under)expenditures (1,133,509) (1,133,509) (1,109,284) 24,225 1 OTHER FINANCING SOURCES(USES) Transfers from Board of County Commissioners 1,136,009 1,136,009 1,136,009 - Transfers to Board of County Commissioners - - (24,294) (24,294) Transfers to other funds (2,500) (2,500) (2,431) 69 Total other financing sources(uses) 1,133,509 1,133,509 1,109,284 (24,225) Net change in fund balances $ - $ - - $ _ Fund balances at beginning of year - Fund balances at end of year $ - f I The accompanying notes are an integral part of the financial statements. 343 s s � FLORI�4' Indian River County, Florida Supervisor of Elections Notes To Financial Statements Year Ended September 30, 2012 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 Funds 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 l expenditures applicable to the general operations of the Supervisor of Elections. All financial resources, I which are not accounted for and reported in another fund, 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. 345 Indian River County,Florida Supervisor of Elections Notes To Financial Statements Year Ended September 30, 2012 NOTE I - SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES- Continued D. Prepaid Items 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. Unearned Revenues Unearned revenues reported on the Supervisor of Election's balance sheet represent revenues which are available but not earned. G. 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. i 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. H. Transfer Out f Statutes, all revenues in excess of expenditures as of ear-end are owed to In accordance with Florida Sta p y the Board of County Commissioners and other governments. This unspent budget totaled $24,294 and was reported as transfers out. These transfers are also reflected as due to other governments on the 4l balance sheet. 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-wide note on fund balance. I 346 Indian River County,Florida Supervisor of Elections Notes To Financial Statements Year Ended September 30, 2012 NOTE 2 - CASH Deposits At September 30, 2012, the carrying amount of the Supervisor of Elections' deposits was $45,167, and the bank balance was $114,041. 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. Cash on hand at September 30, 2012 was $125. 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. Effective July 1, 2011, the FRS became a contributory plan for all members, except DROP participants, whereby members contribute 3% and employers pay a rate based upon each member's employment class (regular class 5.18%, senior class 6.30%, and elected official class 10.23%). Employees elect participation in either the defined benefit plan (Pension Plan) or the defined contribution plan (Investment Plan). If the employee enrolled in the FRS prior to July 1, 2011, normal retirement is age 62 with 6 years of service or 30 years of service, regardless of age. If the employee enrolled in the FRS on or after July 1, 2011, normal retirement is age 65 with 8 years of service or 33 years of service, regardless of age. Under the Pension Plan, early retirement is available before reaching normal retirement age and will be subject to an early-retirement reduction of 5% for each year your age at retirement is under your 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. Participants have access to the full value of their vested account balance when they leave FRS employment, regardless of 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 determined by age, years of service, the average of the highest 5 or 8 fiscal years of pay, membership class and the payment option selected at retirement. For further information concerning the Florida Retirement System and contribution rates, please read County-wide Note 16, Pension Plans. Employer contributions to the FRS for the fiscal years ended September 30, 2010, 2011, and 2012, were equal to 11.4%, 11.5%, and 6.19% of the annual covered payroll. Employer contributions to the FRS for the fiscal years ended September 30, 2010, 2011, 2012 were $59,170, $48,433 and $28,013 respectively. Employee contributions for the fiscal years ended September 30, 2011 and 2012 were $1,957 and $13,585 respectively. Both employer and employee contributions were equal to 100% of the required contribution for each year. 347 Indian River County,Florida Supervisor of Elections Notes To Financial Statements Year Ended September 30, 2012 !! 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 2012 annual required contribution of$13,181 was funded i 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 2012 at an annual cost of approximately$42,320. NOTE 6–LONG-TERM LIABILITIES Changes in Long-Term Liabilities i The following is a schedule of changes in long-term liabilities as of September 30, 2012: Beginning Ending Balance Balance 10/01/11 Additions Deletions 09/30/12 Accrued Compensated Absences 23 770 &28,-179 $ 25,360 $ 26,589 Of the $26,589 liability for accrued compensated absences, management estimates that $8,315 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. I 348 l Indian River County,Florida Supervisor of Elections Notes To Financial Statements Year Ended September 30, 2012 NOTE 7—OPERATING LEASES The Supervisor of Elections has entered into noncancelable operating leases as lessee for a mail machine and letter opener. Lease expenditures totaled $7,245 for the year ended September 30, 2012. The following is a schedule by years of minimum future rentals to be paid by the Supervisor of Elections I for the noncancelable operating leases as of September 30: Year Amount 2013 3,379 Total Future Minimum Lease Payments $ 3,379 i C 349 CQh r1 n n Rebmann Robson 5070 North Highway AIA Suite 250 Vero Beach,FL 32963 Ph: 772.234.8484 Fx: 772.234.8488 www.rehmann.com 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 Leslie Rossway Swan Supervisor of Elections Indian River County, Florida We have audited the fund financial statements of the major fund and the aggregate f remaining fund information of the Indian River County, Florida Supervisor of Elections (the "Supervisor of Elections"), as of and for the year ended September 30, 2012, which collectively comprise the Supervisor of Election's fund financial statements and have issued our report thereon dated March 12, 2013. We conducted our audit in accordance with auditing standards generally accepted in the United States of America and the standards I applicable to financial audits contained in Government Auditing Standards issued by the Comptroller General of the United States. Internal Control over Financial Reporting Management of the Supervisor of Elections is responsible for establishing and maintaining effective internal control over financial reporting. In planning and performing our audit, we considered the Supervisor of Elections' 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 l Supervisor of Elections' internal control over financial reporting. Accordingly, we do not express an opinion on the effectiveness of the Supervisor of Elections' 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 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. Rehmann is an independent member of Nexia International. CPAs&Consultants loealth Advisors Corporate Investigators INTERNATIONAL 350 I ® eh ann C The Honorable Leslie Rossway Swan Supervisor of Elections Page two Compliance and Other Matters As part of obtaining reasonable assurance about whether the Supervisor of Elections' 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 management, the Supervisor of Elections, Indian River County, others within the entity, the Florida Auditor General, and applicable federal and state agencies, and is not intended to be and should not be used by �. anyone other than these specified parties. Vero Beach, Florida I March 12, 2013 l 351 ® Re h m a n n ® Rebmann Robson 5070 North Highway AIA Suite 250 Vero Beach,FL 32963 Ph: 772.234.8484 Fx: 772.234.8488 www.rehmann.com Management Letter The Honorable Leslie Rossway Swan Supervisor of Elections Indian River County, Florida We have audited the fund financial statements of the major fund and the aggregate remaining fund information of the Indian River County, Florida Supervisor of Elections (the "Supervisor of Elections"), as of and for the year ended September 30, 2012, which collectively comprise the Supervisor of Election's fund financial statements and have issued our report thereon dated March 12, 2013. We conducted our audit 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; and Chapter 10.550, Rules of the Florida Auditor General. We have issued our Independent Auditors' Report on Internal Control over Financial Reporting and on Compliance and Other Matters Based on an Audit of the Financial Statements Performed in Accordance with Government Auditing Standards. Disclosures in that report, which is dated March 12, 2013, 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: 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 findings and recommendations made in the preceding annual financial audit report. There were no findings or recommendations in the preceding annual financial audit report. Section 10.554(1)(i)2., Rules of the Auditor General, requires our audit to include a review of the provisions of Section 218.415, Florida Statutes, regarding the investment of public funds. In connection with our audit, we determined that the Supervisor of Elections 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 identify 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 financial statements that is less than material, but more than inconsequential. In connection with our audit, we did not identify any such findings. Rehmann is an independent member of Nexia International. 11A S 0 ;Is;i b`deall.a Advisors Corporate Investigators � LNTLRNA7[ORAL 352 f NjR ehmann C The Honorable Leslie Rossway Swan 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 identify any such findings. I 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. This letter is intended solely for the information and use of the Legislative Auditing Committee, members of the Florida Senate and the Florida House of Representatives, the Florida Auditor General, Federal and other granting agencies, and applicable management and is not intended to be and should not be used by anyone other than these specified parties. d71L� f Vero Beach, Florida March 12, 2013 l f I I I 353 c �IARl�p' I I f_ i f TAX COLLECTOR I 355 i I ] e h a n n Rebmann Robson j 5070 North Highway AIA Suite 250 Vero Beach,FL 32963 Ph: 772.234.8484 Fx: 772.234.8488 Independent Auditors' Report www.rehmann.com The Honorable Carole Jean Jordan j Tax Collector 1 Indian River County, Florida We have audited the accompanying fund financial statements of the major fund and the aggregate ` remaining fund information of the Indian River County, Florida Tax Collector (the "Tax Collector") as of and for the year ended September 30, 2012, which collectively comprise the Tax Collector's fund financial statements as listed in the table of contents. These financial statements are the responsibility of the Tax Collector's management. Our responsibility is to express opinions 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 financial statements are free of material misstatement. An audit includes examining, on a test basis, evidence supporting the i amounts and disclosures in the financial statements. An audit also includes assessing the accounting principles used and significant estimates made by management, as well as evaluating the overall presentation of the financial statements. We believe that our audit provides a reasonable basis for our ` opinions. As described in Note 1, the fund financial statements present only the funds of the Tax Collector and do not purport to, and do not, present fairly the financial position of Indian River County as of September 30, 2012 the changes in its financial position, or, where applicable, its cash flows for the year then ended in conformity with accounting principles generally accepted in the United States of America. In our opinion, the fund financial statements referred to previously present fairly, in all material respects, the financial position of the funds of the Tax Collector as of September 30, 2012, and the changes in financial position thereof for the year then ended in conformity with accounting principles generally accepted in the United States of America. 1 In accordance with Government Auditing Standards, we have also issued a report dated March 12, 2013 1 on our consideration of the Tax Collector'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 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 considered in assessing 4 the results of our audit. 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. Vero Beach, Florida March 12, 2013 Rehmann Is an independent member of Nexia International. :...;i13Ul :al'cS Wealth Advisors Gorperate investigators � INTERNATIONAL 111 356 Indian River County, Florida Tax Collector Balance Sheet General Fund September 30,2012 ASSETS Cash and cash equivalents $ 2,311 394 Investments 691,980 Accounts receivable 74,959 Inventories 1,153 C Prepaid items 1,821 Total assets $ 3,081,307 LIABILITIES AND FUND BALANCES Liabilities: Accounts payable $ 341,656 Due to other governments 2,706,242 Unearned revenues 32,485 Other deposits held in escrow 924 Total liabilities 3,081,307 1 Fund Balances: Nonspendable: Inventories 1,153 ` Prepaid items 1,821 Unassigned (2,974) ( Total fund balances I Total liabilities and fund balances $ 3,081,307 I I t The accompanying notes are an integral part of the financial statements. 357 l 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 30,2012 Variance with Final Budget Budgeted Amount Positive Original Final Actual (Negative) REVENUES Charges for services $ 5,561,845 $ 5,561,845 $ 5,556,132 $ (5,713) Interest 10,000 10,000 7,165 (2,835) S Total revenues 5,571,845 5,571,845 5,563,297 (8,548) EXPENDITURES General government 2,937,181 2,941,647 2,857,055 84,592 Total expenditures 2,937,181 2,941,647 2,857,055 84,592 Excess of revenues over (under)expenditures 2,634,664 2,630,198 2,706,242 76,044 OTHER FINANCING USES Transfers to Board of County Commissioners (2,305,858) (2,301,949) (2,368,531) (66,582) Transfers to other j governments (328,806) (328,249) (337,711) (9,462) 1 Total other financing uses (2,634,664) (2,630,198) (2,706,242) (76,044) 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. 358 I Indian River County, Florida Tax Collector Statement of Fiduciary Net Position Agency Fund September 30, 2012 ASSETS Cash and cash equivalents $ 4,414,722 Investments 79,993 { Total assets $ 4,494,715 LIABILITIES Due to other governments $ 4,494,715 Total liabilities $ 4,494,715 I l l The accompanying notes are an integral part of the financial statements. 359 s s �2pgLpA I Indian River County,Florida Tax Collector Notes To Financial Statements Year Ended September 30, 2012 NOTE 1 - SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES The Tax Collector is a County agency and a local governmental entity pursuant to Article VIII, Section f 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 C 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 financial resources, which are not accounted for and reported in another fund, 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. lFiduciary 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. 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. 361 Indian River County,Florida Tax Collector Notes To Financial Statements l Year Ended September 30, 2012 NOTE I - SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES - Continued C. Budgetary Requirements - Continued 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 1 Cash and cash equivalents include deposits and all highly liquid investments with maturities of ninety days or less when purchased. E. Prepaid Items 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. j G. Unearned Revenues I Unearned revenues reported on the Tax Collector's balance sheet represent revenues which are available but not earned. H. 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. I. 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 $2,706,242 at year-end. 362 Indian River County,Florida Tax Collector Notes To Financial Statements Year Ended September 30, 2012 NOTE 1 - SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES - Continued J. 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-wide note on fund balance. NOTE 2 - CASH AND CASH EQUIVALENTS A. Deposits At September 30, 2012, the carrying amount of the Tax Collector's deposits was $6,710,592 and the 0 bank balance was $6,617,689. 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. Cash on hand at September 30, 2012 was $15,524. B. Investments i The Tax Collector modified their investment and deposit policy in August 2011. 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, 2012,the Tax Collector had the following investments: Weighted Average Portfolio Credit Investment Type Fair Value Maturity In Years Percentaize Risks Other Fixed Rate Investments: Florida PRIME (formerly Fund A) $ 161,276 .08 20.89% AAAm Fund B Surplus Funds Trust Fund 79,993 4.08 10.36 Not Rated Other Market Rate Investments: Certificate of Deposit—22 Month 251,043 1.84 32.52 N/A Certificate of Deposit— 1 Year 254,413 1.00 32.96 N/A Florida Trust Day to Day Fund 25,248 .08 3.27 AAAm Total Fair Value $ 771,973 100.00% Portfolio weighted average maturity 1.37 363 PJ Fie h m a n n Rebmann Robson A 5070 North Highway AIA � Suite 250 Vero Beach,FL 32963 Ph: 772.234.8484 Fx:772.234.8488 www.rehmann.com i 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 fund financial statements of the major fund and the aggregate remaining fund information of the Indian River County, Florida Tax Collector (the "Tax Collector"), as of and for the year ended September 30, 2012, which collectively comprise the Tax Collector's fund financial statements and have issued our report thereon dated March A 2, 2013. 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 Management of the Tax Collector is responsible for establishing and maintaining effective 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 and corrected on a timely basis. I 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 I weaknesses. We did not identify any deficiencies in internal control over financial reporting that we consider to be material weaknesses as defined above. Rebmann is an independent member of Nexia International. L:PAs t 1`01Isuitan1s IAlealth Advisors comorate investigators INTERNATIONAL 368 C ' Re h m a nn The Honorable Carole Jean Jordan Tax Collector Page two Compliance and Other Matters As part of obtaining reasonable assurance about whether the Tax Collector's financial f 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. EThis 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. Vero Beach, Florida March 12, 2013 369 Rebmann Robson Re h m `iil n n 5070 North Highway AIA Suite 250 Vero Beach,FL 32963 Ph:772.234.8484 Fx: 772.234.8488 Management Letter www.rehmann.com The Honorable Carole Jean Jordan Tax Collector Indian River County, Florida We have audited the fund financial statements of the major fund and the aggregate remaining fund information of the Indian River County, Florida Tax Collector (the "Tax Collector"), as of and for the year ended September 30, 2012, which collectively comprise the Tax Collector's fund financial statements and have issued our report thereon dated March 12, 2013. We conducted our audit 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; and Chapter 10.550, Rules of the Florida Auditor General. We have issued our Independent Auditors' Report on Internal Control over Financial Reporting and on Compliance and Other Matters Based on an Audit of the Financial Statements Performed in Accordance with Government Auditing Standards. Disclosures in that report, which is dated March 12, 2013, 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: Section 10.554(1)(i)l., Rules of the Auditor General, requires that we determine whether or l not corrective actions have been taken to address findings and recommendations made in the preceding annual financial audit report. There were no findings or recommendations in the 1 preceding annual financial 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 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 identify any such recommendations. l Section 10.554(1)(i)4., Rules of the Auditor General, requires that we address violations of I provisions of contracts or 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 identify any such findings. Rebmann Is an independent member of Nexia International. 1 pAs Cons lirancs VVealtit Advisors corporate Investigators INTERNATIONAL 370 i Re h m a n n The Honorable Carole Jean Jordan Tax Collector Page two I 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 identify any such findings. I 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 Istatements. This information is disclosed in the notes to the financial statements. This letter is intended solely for the information and use of the Legislative Auditing I Committee, members of the Florida Senate and the Florida House of Representatives, the Florida Auditor General, Federal and other granting agencies, and applicable management and is not intended to be and should not be used by anyone other than these specified parties. I Vero Beach, Florida March 12, 2013 I I I I 371 FLORIDA' i