Loading...
The URL can be used to link to this page
Your browser does not support the video tag.
Home
My WebLink
About
2016-082B
Indian Iver County Florl" da r £ { }to t 5w2£ ----------- �l �}; 4.•?} �,�,a:� � 7't�s�{Yfr'�rri� {4'„r flr����ti� � t ��i���.�����s��a t I s r.,t ir�£yF„y } �c,. ++ ?? 77 s �Z��rtlrtt�tlr}trft{srt s�5 { ra t r r G � 5 5 r :.r z r tt''” fj i' t i` t S' �I i ore ensive Annual Financl* al For the Fiscal Year October 1, 2014 through September 30, 2015 The cover features a picture of the par 4-14th hole of the Lakes Course at Sandridge Golf Club. Sandridge Golf Club is owned and operated by Indian River County. The facility consists of two 18-hole championship layouts designed by Ron Garl. The first course is the Dunes Course, which opened to the public in 1987. This classic layout winds around an old ridge that runs up the East Coast of Florida and was once used for mining operations. The second course is the Lakes Course, which opened to the public in 1992. For over 20 years, both golf courses have been maintained with an unmatched passion and love for the classic game of golf. Dedication to the sport has earned Sandridge a reputation as one of the finest public golf destinations in the state of Florida and has been rated four-and-a-half stars by Golf Digest and regularly earns a spot on the magazine's "Places to Play List". , a In 2015, the Dunes . course underwent a $1.18 million irrigation system replacement. 4 MEu3 , t" INDIAN RIVER COUNTY, FLORIDA COMPREHENSIVE ANNUAL FINANCIAL REPORT FOR THE FISCAL YEAR OCTOBER 1, 2014 THROUGH SEPTEMBER 30, 2015 Jeffrey R. Smith, CPA, CGFO, CGMA Clerk of the Circuit Court and Comptroller Prepared By: Clerk of the Circuit Court Finance Department Diane Bernardo, CPA Finance Director Indian River County, Florida COMPREHENSIVE ANNUAL FINANCIAL REPORT Fiscal Year Ended September 30, 2015 Board of County Commissioners as of September 30, 2015 Wesley S. Davis Joseph E. Flescher Chairman Peter D. O'Bryan Bob Solari Tim Zorc Vice-Chairman Current Board of County Commissioners (effective November 17, 2015) Bob Solari Wesley S. Davis Chairman Peter D. O'Bryan Joseph E. Flescher Tim Zorc Vice-Chairman Constitutional Officers as of September 30, 2015 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 County Management Joseph A. Baird Dylan Reingold County Administrator County Attorney Michael Zito Jason Brown Chris Mora Assistant County Administrator Budget Director Director of'Public Works Stan Boling 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, 2015 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 I MANAGEMENT'S DISCUSSION AND ANALYSIS 5 BASIC FINANCIAL STATEMENTS: Government-wide Financial Statements: Statement of Net Position 23 Statement of Activities 25 Fund Financial Statements: Balance Sheet- Governmental Funds 26 Reconciliation of Total Governmental Fund Balances to Net Position of Governmental Activities 28 Statement of Revenues, Expenditures, and Changes in Fund Balances - Governmental Funds 30 Reconciliation of the Statement of Revenues, Expenditures, and Changes in Fund Balances of Governmental Funds to the Statement of Activities 32 Statement of Revenues, Expenditures, and Changes in Fund Balances - Budget and Actual - General Fund 33 Statement of Revenues, Expenditures, and Changes in Fund Balances - Budget and Actual - Impact Fees Fund 34 Statement of Revenues, Expenditures, and Changes in Fund Balances - Budget and Actual - Secondary Roads Construction Fund 35 Statement of Revenues, Expenditures, and Changes in Fund Balances - Budget and Actual -Transportation Fund 36 Statement of Revenues, Expenditures, and Changes in Fund Balances - Budget and Actual - Emergency Services District Fund 37 Statement of Fund Net Position - Proprietary Funds 39 Indian River County, Florida COMPREHENSIVE ANNUAL FINANCIAL REPORT TABLE OF CONTENTS - CONTINUED Fiscal Year Ended September 30, 2015 Page Number Statement of Revenues, Expenses, and Changes in Fund Net Position- Proprietary Funds 40 Statement of Cash Flows - Proprietary Funds 42 Statement of Fiduciary Net Position - Fiduciary Funds 46 Statement of Changes in Fiduciary Net Position - Other Postemployment Benefits Trust Fund 47 Notes to the Financial Statements 49 REQUIRED SUPPLEMENTARY INFORMATION: Schedule of the County's Proportionate Share of the Net Pension Liability- Florida Retirement System (FRS) Defined Benefit Pension Plan 114 Schedule of the County's Proportionate Share of the Net Pension Liability- Retiree Health Insurance Subsidy (HIS) Program Defined Benefit Pension Plab 114 Schedule of the County's Contributions - FRS Defined Benefit Pension Plan 1.1.5 Schedule of the County's Contributions - HIS Defined Benefit Pension Plan 115 Schedule of Funding Progress - Other Postemployment Benefits Plan 1.1.6 Schedule of Employer Contributions - Other Postemployment Benefits Plan 116 COMBINING AND INDIVIDUAL FUND STATEMENTS AND SCHEDULES: Combining Balance Sheet -Nonmajor Governmental Funds 122 Combining Statement of Revenues, Expenditures and Changes in Fund Balances -Nonmajor Governmental Funds 130 Budgetary Comparison Schedules 138 Combining Statement of Net Position- Internal Service Funds 170 Combining Statement of Revenues, Expenses, and Changes in Fund Net Position - Internal Service Funds 171 Combining Statement of Cash Flows - Internal Service Funds 172 Combining Statement of Changes in Assets and Liabilities -Agency Fund 176 Indian River County, Florida COMPREHENSIVE ANNUAL FINANCIAL REPORT TABLE OF CONTENTS- CONTINUED Fiscal Year Ended September 30, 2015 STATISTICAL SECTION Page Number SCHEDULE 1 Net Position by Component- Last Ten Fiscal Years 178 SCHEDULE 2 Changes in Net Position- Last Ten Fiscal Years 180 SCHEDULE 3 Fund Balances, Governmental Funds - Last Ten Fiscal Years 184 SCHEDULE 4 Changes in Fund Balances, Governmental Funds - Last Ten Fiscal Years 186 SCHEDULE 5 Tax Revenues by Source, Governmental Funds - Last Ten Fiscal Years 188 SCHEDULE 6 Assessed Value and Actual Values of Taxable Property - Last Ten Fiscal Years 1.89 SCHEDULE 7 Property Tax Rates - Direct and Overlapping Tax Rates - Last Ten Fiscal Years 190 SCHEDULE 8 Principal Property Taxpayers -Year 2015 and Year 2006 192 SCHEDULE 9 Property Tax Levies and Collections -Last Ten Fiscal Years 193 SCHEDULE 10 Ratios of Outstanding Debt by Type- Last Ten Fiscal Years 194 SCHEDULE 11 Ratio of Net General Bonded Debt Outstanding to Taxable Value and Net Bonded Debt Per Capita- Last Ten Fiscal Years 196 SCHEDULE 12 Computation of Legal Debt Margin 197 SCHEDULE 13 Direct and Overlapping Governmental Activities Debt 198 SCHEDULE 14 Pledged Revenue Coverage - Water and Sewer Revenue Bonds - Last Ten Fiscal Years 200 Indian River County, Florida COMPREHENSIVE ANNUAL FINANCIAL REPORT TABLE OF CONTENTS- CONTINUED Fiscal Year Ended September 30, 2015 Page Number SCHEDULE 15 Demographic and Economic Statistics - Last Ten Years 202 SCHEDULE 16 Principal Employers -Year 2015 and Year 2006 203 SCHEDULE 17 Building Permits-Last Ten Fiscal Years 204 SCHEDULE 18 Operating Indicators by Function/Program- Last Ten Fiscal Years 206 SCHEDULE 19 Full Time Equivalent County Government Employees by Function/Program - Last Ten Fiscal. Years 21.0 SCHEDULE 20 Capital Asset Statistics by Function/Program-Last Ten.Fiscal.Years 212 SCHEDULE 21 Department of Utility Services -Historical Rate Structure - Last Ten Fiscal Years 216 SCHEDULE 22 Water and Wastewater Customers-Last Ten Fiscal Years 217 SCHEDULE 23 Top 10 High Volume Customers of Utility Services 218 SCHEDULE 24 Capacity Charges-Utilities Department - Last Ten Fiscal Years 219 SCHEDULE 25 Pledged Revenues for Spring Training Facility Revenue Bonds, Series 2001- Last Ten Fiscal Years 220 Indian River County, Florida COMPREHENSIVE ANNUAL FINANCIAL REPORT TABLE OF CONTENTS- CONTINUED Fiscal Year Ended September 30, 2015 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 221 County Management Letter 223 Independent Accountants' Report 225 Federal and State Grants: Independent Auditors' Report on the Schedule of Expenditures of Federal Awards and State Projects Required by OMB Circular A-133 and Chapter 10.550,Rules of the Auditor General 226 Schedule of Expenditures of Federal Awards and State Projects 227 Notes to Schedule of Expenditures of Federal Awards and State Projects 232 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 234 Schedule of Findings and Questioned Costs 236 Summary Schedule of Prior Audit Findings 238 Impact Fee Affidavit 239 Indian River County, Florida COMPREHENSIVE ANNUAL FINANCIAL REPORT TABLE OF CONTENTS- CONTINUED Fiscal Year Ended September 30, 2015 AUDITOR GENERAL REPORTS SECTION Page Number BOARD OF COUNTY COMMISSIONERS Independent Auditors' Report 242 Fund Financial Statements 244 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 317 Management Letter 319 Independent Accountants' Report 321. CLERK OF THE CIRCUIT COURT AND COMPTROLLER Independent Auditors' Report 324 Fund Financial Statements 326 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 338 Management Letter 340 Independent Accountants' Report 342 PROPERTY APPRAISER Independent Auditors' Report 344 Fund Financial Statements 346 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 354 Schedule of Findings and Responses 356 Management Letter 359 Independent Accountants' Report 361 Indian River County, Florida COMPREHENSIVE ANNUAL FINANCIAL REPORT TABLE OF CONTENTS-CONTINUED Fiscal Year Ended September 30, 2015 Page Number SHERIFF Independent Auditors' Report 364 Fund Financial Statements 366 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 377 Management Letter 379 SUPERVISOR OF ELECTIONS Independent Auditors' Report 382 Fund Financial Statements 384 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 394 Management Letter 396 TAX COLLECTOR Independent Auditors' Report 400 Fund Financial Statements 402 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 414 Management Letter 416 Independent Accountants'Report 418 r JEFFREY R. SMITH, CPA, CGFO, CGMA m Clerk of Circuit Court& Comptroller ' 1801 27th Street Vero Beach, FL 32960 Telephone: (772) 226-1945 May 26, 2016 To the Citizens of Indian River County: The Comprehensive Annual Financial Report of Indian River County, Florida for the fiscal year ended September 30, 2015, is respectfully submitted. State law requires that every general-purpose government publish a complete set of audited financial statements within nine 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 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 generally 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 218.39, Florida Statutes, requires an annual audit of local governments. The unmodified opinion of the auditors (Rebmann Robson LLC, Certified Public Accountants) on the County's financial statements for the year ended September 30, 2015 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 Profile of Indian River County Indian River County, established on June 29, 1925 by an act of the Florida Legislature, is located 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. 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 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 submits a budget to the Florida Clerks of Court Operations Corporation (CCOC) prior to June 1. These operating budgets include proposed expenditures and the sources to finance them as set forth in Section 28.36, 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. The Board then holds public workshops to review the tentative budget by fund on a departmental level. 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. Unexpended ongoing project costs may be appropriated in the new fiscal year through a budget amendment. ii 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. 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 Indian River County's estimated population of 143,326 was a 1.68% increase over the previous year. 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. According to the University of Florida, Bureau of Economic and Business Research, persons aged 25-54 now make up the largest percentage of residents in the County, followed by persons aged 65+, 0-17, 55-64, and 18-24 respectively. The median age of Indian River County is 50.5 which is 22.3% above the State median age of 41.3 and 34.3% above the national median age of 37.6. Historically, Indian River County's economy was made up of agriculture (citrus and cattle) and tourism. Those industries have now been complimented with an increase in health care and information technology firms, light manufacturing, wholesale and retail trade and service sector jobs. The top three major employers in Indian River County, providing 9% of total employed persons are the School District, Indian River County Government and Indian River Medical Center. The unemployment rate decreased from 7.9% in 2014 to 7.2% in 2015. 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. INEOS New Planet BioEnergy operates 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 County parks, the Sebastian Inlet State Park or the Pelican Island National Wildlife Refuge. Indian River County is beginning to experience signs of improvement in the economy. Total property tax values increased slightly from $12.8 billion in 2014. to $1.3.4 billion in 2015.. Construction activity saw a significant increase with 20% more building permits issued for additions and alterations in 2015 over 2014. Please see Statistical Schedules 6 and 17 for more information. Although Indian River County is a major producer of citrus with approximately 34,151 acres dedicated to citrus production, production has decreased by 13% from 7.8 million boxes in 2014 to 6.9 million in 2015. iii. Long Term Financial Planning and Major 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 Plan (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 some major projects included in the current CIP along with the source of funding and estimated costs: Intergenerational Recreation Facility at South County Resional Park Construction is well underway for the 40,000 square foot intergenerational recreation facility at the South County Regional Park. The facility will be used to accommodate indoor community exhibits and events, sports activities,programs for senior citizens, a multi-purpose gymnasium and various office and meeting rooms. The building includes modern tilt-up wall construction and standing seam roof construction. Site work includes asphalt parking areas and drives, drainage improvements including retention pond, water and sewer improvements, landscaping and irrigation. The estimated cost of$11 million will be funded by impact fees and optional one cent sales tax. 45th Street Beautification Project This project consists of the milling and resurfacing of 45th Street from 43rd Avenue to east of 24th Avenue. Included in this project is the construction of new five foot wide paved shoulders, sidewalk enhancements, curb and gutter, pavement markings and extensive landscape improvements. Funding of $1.9 million will be derived from gas tax and optional one cent sales tax. 20th Avenue and 16th Street Intersection Improvements This project will include the re-alignment of 20th Avenue at 16th Street as well as the addition of left turn lanes to 20th Avenue and the extension of concrete box culverts in the Indian River Farms Water Control District Lateral "E" Canal. Optional one cent sales tax will provide the $1.1 million funding. Old Dixie Highway Resurfacing from 71st Avenue to County Road 510 The $2.5 million improvements to Old Dixie Highway consist of pavement reconstruction (full depth reclamation) a distance of two miles from 71st Street to County Road 510. Four foot wide paved shoulders, asphalt surface and structural courses, drainage improvements, utility adjustments, signage and pavements markings will be completed. This project is funded by an F.D.O.T. Small County Outreach Program(SCOP) grant and gas taxes. 1st Street SW and 43rd Avenue Intersection Improvements Improvements to this intersection will consist of the reconstruction of a portion of I st Street SW with the addition of left turn lanes in the east and west bound direction. 43rd Avenue will be milled and resurfaced within the intersection. Concrete pipe will be installed in the Indian River Farms Water Control District Canal. The work will also include a traffic signal, four foot wide paved shoulders, curbing and five foot wide sidewalk. Costs are estimated to be $2.2 million and will be funded by optional one cent sales tax. iv The following major capital projects were completed in FY 2015: • Fire Rescue/EMS Station #13 - $2.2 million station located in the southern part of the County with operating expenses of approximately $1.8 million per year • Osprey Marsh - $8.6 million algal turf scrubber system for the South Relief Canal which removes dissolved nitrogen and phosphorous from the water and returns the treated water back to the Indian River Lagoon. • 66th Avenue Roadway Improvements from State Road 60 to 49th Street - $23 million dollar road widening project to enhance one of the few main arterials connecting the north and south county areas. Relevant Financial Policies In accordance with Section 218.415, Florida Statutes, the County adopted an investment policy, which guides the investment of County surplus funds. This policy establishes investment objectives, maturity and liquidity requirements, portfolio composition, risk and diversification requirements, and authorized investments. The primary objectives of investment activities are to preserve capital and maintain sufficient liquidity to meet anticipated cash flow needs. The secondary objective is to obtain competitive returns on the investment of County surplus funds. On September 23, 2008, the County established the OPEB (Other PostEmployment Benefits) Trust. An OPEB investment policy was approved by the Board of County Commissioners in February 2009. The objective was to establish an advisory committee and to provide short-term and long-term investment guidelines. This policy also outlines the same criteria as noted in the County's investment policy, as well as including performance measures. The County's policy is to fund the annual OPEB obligation monthly. 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 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 expenditures. Information on the County's fund balance policy can be found in County Note 18. In fiscal year 2015, the County advance refunded $19,075,000 of Limited General Obligation Bonds, Series 2006, which saved approximately $217,000 in annual debt service payments and resulted in a net present value savings of$1.2 million. The bonds were refunded by a 1.66% Limited General Obligation Refunding Note, Series 2015. The Board also approved paying off the outstanding balance on the Water and Sewer Revenue Refunding Bonds, Series 2005. Half of the outstanding principal ($7.1 million) was refunded from available utility reserves and the remaining half was refunded by a 1.65% Water and Sewer Revenue Refunding Note, Series 2015. The cash funding of$7.1 million in principal results in a reduction of approximately $1.2 million in annual debt service payments and an estimated net savings of $1.1 million over the remaining life of the bonds. v In January 2015, Fitch Rating Service affirmed the County's "AAA" rating for the Water and Sewer Revenue Refunding Bonds, Series 2009. During fiscal year 2015, the County implemented Government Accounting Standards Board (GASB) Statement No. 68, Accounting and Financial Reporting for Pensions. The primary objective of the Statement is to improve accounting and financial reporting by state and local governments for pensions. It establishes standards for measuring and recognizing liabilities, deferred outflows of resources, deferred inflows of resources, and expenses/expenditures. The County now includes in the government- wide statements its proportionate share of the net pension liability of the cost-sharing pension plans in. which it participates. This proportionate amount represents a share of the present value of projected benefit payments to be provided through the cost-sharing pension plan to current active and inactive employees that is attributed to those employees' past periods of service (total pension liability), less the amount of the cost-sharing pension plan's fiduciary net position. Implementation resulted in a restatement of beginning net position as illustrated in Note 20. Awards and Acknowledgements The Government Finance Officers Association of the United States and Canada (GFOA) awarded a Certificate of Achievement for Excellence in Financial Reporting to Indian River County for its comprehensive annual financial report (CAFR) for the fiscal year ended September 30, 2014. This was the 32nd consecutive year that the County has received this prestigious award. In order to be awarded a Certificate of Achievement, a government must publish an easily readable and efficiently organized comprehensive annual financial report. This report must satisfy both generally accepted accounting principles and applicable legal requirements. A Certificate of Achievement is valid for a period of one year only. We believe that our current comprehensive annual financial report continues to meet the Certificate of Achievement Program's requirements and we are submitting it to the GFOA to determine its eligibility for another certificate. In addition, Indian River County also received the GFOA's Distinguished Budget Presentation Award for its annual budget document for the 2014-201.5 fiscal year. This was the 24th 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. Respectfully submitted, Jeffrey R. Smith, CPA, CGFO, CGMA Clerk of the Circuit Court and Comptroller vi Indian River County BCC Departmental Organization Residents of Indian River County Shenff P Clerk of Circuit Supervisor of Board of Property Tax Court Elections County Appraiser Collector Commissioners Finance Department County Administrator County Attorney Assistant Assistant to Admin. County Administrator/ General Services Commission Geographic Office Info S stems ---_ _________ --------- I - Utilities Emergency Community Huaan Office of Public Services Golf Course Services Development Resources Mgmt.&Budget Parks and Engineering Wastewater Emergency Planning Recreation Treatment -- Management Division Risk Management Road& Veterans Bridge Water Fire/Rescue Envir.Planning& Service Production ---- Code Enforcement Computer Services Shooting Range Traffic ( Radiological g g General& Emergency Metropolitan Engineering Preparedness Planning Org. Purchasing Fleet Libraries Management Customer Emergency IRCLHAP/ Service Base Grant SHIP Program Mailroom Secondary Road Switchboard Const. Wastewater Collection Animal Building Control Division Stormwater Human Services Water 911 Distribution Coordinator Ag Coastal Extension Engineering Osprey Marsh Soil&Water Facilities Conservation Management Solid Waste Disposal District Rental Assistance Telecomm. Vii LE Government Finance Officers Association Certificate of Achievement for Excellence in Financial Reporting Presented to Indian River County Florida For its Comprehensive Annual Financial Report for the Fiscal Year Ended September 30, 2014 Executive Director/CEO viii Re h m a n n Rebmann Robson 5070 North Highway A1A Suite 250 Vero Beach,FL 32963 Ph: 772.234.8484 Fx: 772.234.8488 rehmann.com INDEPENDENT AUDITORS' REPORT May 25, 2016 The Honorable Board of County Commissioners and Constitutional Officers Indian River County, Florida Report on the Financial Statements We have audited the accompanying 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, 2015, and the related notes to the financial statements, which collectively comprise the County's basic financial statements as listed in the table of contents. Management's Responsibility for the Financial Statements Management is responsible for the preparation and fair presentation of these financial statements in accordance with accounting principles generally accepted in the United States of America; this includes the design, implementation, and maintenance of internal control relevant to the preparation and fair presentation of financial statements that are free from material misstatement, whether due to fraud or error. Independent Auditors' Responsibility Our responsibility is to express opinions on these financial statements based on our audit. We conducted our audit in accordance with auditing standards generally accepted in the United States of America and the standards applicable to financial audits contained in Government Auditing Standards, issued by the Comptroller General of the United States. Those standards require that we plan and perform the audit to obtain reasonable assurance about whether the financial statements are free of material misstatement. An audit involves performing procedures to obtain audit evidence about the amounts and disclosures in the financial statements. The procedures selected depend on the auditors' judgment, including the assessment of the risks of material misstatement of the financial statements, whether due to fraud or error. In making those risk assessments, the auditor considers internal control relevant to the County's preparation and fair presentation of the financial statements in order to design audit procedures that are appropriate in the circumstances, but not for the purpose of expressing an opinion on the effectiveness of the County's internal control. Accordingly, we express no such opinion. An audit also includes evaluating the appropriateness of accounting policies used and the reasonableness of significant accounting estimates made by management, as well as evaluating the overall presentation of the financial statements. We believe that the audit evidence we have obtained is sufficient and appropriate to provide a basis for our audit opinions. Rebmann is an independent member of Nexia International. CPAs&Consultants Wealth Advisors Corporate Investigators � IITURIAI'l I I L 1 The Honorable Board of County Commissioners and Constitutional Officers May 25, 2016 Page 2 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, 2015, and the respective changes in financial position and, where applicable, cash flows thereof, and the respective budgetary comparison for the general fund and each major special revenue fund, for the year then ended in accordance with accounting principles generally accepted in the United States of America. Implementation of GASB Statement No. 68 As described in Note 15, the County implemented the provisions of GASB Statement No. 68, Financial Reporting for Pension Plans, in the current year. Accordingly, beginning net position of governmental and business-type activities was restated. Our opinion is not modified with respect to this matter. Other Matters Required Supplementary Information Accounting principles generally accepted in the United States of America require that the management's discussion and analysis and the schedules for the pension and other post employment benefit plans, 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 inquiries 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. Other Information 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, and introductory and statistical sections are presented for purposes of additional analysis and are not a required part of the basic financial statements. The combining and individual fund financial statements and schedules are the responsibility of management and were derived from and relate directly to the underlying accounting and other records used to prepare the basic financial statements. Such 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 basic 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. 2 The Honorable Board of County Commissioners and Constitutional Officers May 25, 2016 Page 3 The introductory and statistical sections have 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 them. Other Reporting Required by Government Auditing Standards In accordance with Government Auditing Standards, we have also issued our report dated May 25, 2016, on our consideration of Indian River County, Florida'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 in considering the County's internal control over financial reporting and compliance. 440trL4-)1L- LLC 3 4 Indian River County, Florida Management's Discussion and Analysis For the Year Ended September 30, 2015 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, 2015. 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. FINANCIAL HIGHLIGHTS • The County's overall financial position improved over 2014.. • The assets and deferred outflows of resources of the County exceeded its liabilities and deferred inflows by $960.1 million(net position). Of this amount, $98.2 million(unrestricted net position) may be used to meet the government's ongoing obligations to citizens and creditors. • The government's total net position decreased by $43.8 million or 4.3%. Governmental activities accounted for $47.9 million of this decrease which was offset by a $4.1 million increase in business-type activities. This decrease is primarily due to the restatement of net position per Governmental Accounting Standards Board (GASB) Statement No. 68. Further information can be found on page 10. • Governmental activities expenses reflected a 2.4% increase ($147.6 million in 2014 to $151.2 million in 2015) and business-type activities expenses reflected a 1.0% increase ($51.0 million in 2014. to $51.5 million in 2015). Further information can be found on page 10. • Unassigned fund balance for the general fund was $47.7 million, or a 1.2% decrease from the prior year general fund unassigned balance of$48.3 million. 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 decreases in net position may serve as a useful indicator of whether the financial position of the County is improving or deteriorating. 5 Indian River County, Florida Management's Discussion and Analysis For the Year Ended September 30, 2015 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 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 (BCC), 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 23 and 25 of this report. Fund financial statements A fund is a grouping of related accounts that is used to maintain control over resources that have been segregated for specific activities or objectives. The County, like other state and local governments, uses fund accounting to ensure and demonstrate compliance with finance-related legal requirements. All of the funds of the County can be divided into three categories: governmental funds,proprietary funds, and fiduciary funds. Governmental funds. Governmental funds are used to account for essentially the same functions reported as governmental activities in the government-wide financial statements. However, unlike the government-wide financial statements, governmental fund financial statements focus on near-term inflows and outflows of spendable resources, as well as on balances of spendable resources available at the end of the fiscal year. Such information may be useful in evaluating a government's near-term financial requirements. Because the focus of governmental funds is narrower than that of the government-wide financial statements, it is useful to compare the information presented for governmental funds with similar information presented for governmental activities in the government-wide financial statements. By doing so, readers may better understand the long-term impact of the government's near-term financial decisions. Both the governmental fund Balance Sheet and the governmental fund Statement of Revenues, Expenditures, and Changes in Fund Balances provide a reconciliation to facilitate this comparison between governmental funds and governmental activities. 6 Indian River County, Florida Management's Discussion and Analysis For the Year Ended September 30, 2015 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. Individual fund data for each of these nonmajor governmental funds is provided in the form of combining statements located behind the notes to the financial statements. The combining statements for the nonmajor governmental funds can be found on pages 117-167 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 26-37 of this report. Proprietary funds. The County maintains two different types of proprietary funds. Enterprise funds are used to report the same functions presented as business-type activities in the government-wide financial statements. The County uses enterprise funds to account for its water and sewer utility, solid waste disposal district, golf course, and building department. Internal service funds are an accounting device used to accumulate and allocate costs internally among the County's various functions. The County uses internal service funds to account for fleet management, self-insurance, and information technology. 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 169-173 of this report. The basic proprietary fund financial statements can be found on pages 39-45 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 statements can be found on pages 46-47 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 49-113 of this report. 7 Indian River County, Florida Management's Discussion and Analysis For the Year Ended September 30, 2015 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, as well as information regarding the County's proportionate share of its pension liability. Required supplementary information can be found on pages 114-116 of this report. Government-wide financial analysis As noted earlier, net position may serve over time as a useful indicator of a government's financial position. In the case of the County, assets and deferred outflows of resources exceeded liabilities and deferred inflows by $960.1 million at the close of the fiscal year. Indian River County Net Position (In Millions) Governmental Business-type Activities Activities Total _2015 2014 2015. 2014 2015 2014. Current and other assets $ 228.4 $ 221.0 $ 113.9 $ 107.5 $ 342.3 $ 328.5 Capital assets 550.4 549.1 240.0 248.9 790.4 798.0 Total assets 778.8 770.1 353.9 356.4 1,132.7 1,126.5 Deferred outflows of resources 12.7 - 2.1 2.2 14.8 2.2 Other liabilities 9.7 10.0 5.8 6.7 15.5 16.7 Long-term liabilities 111.2 56.3 45.1 51.8 156.3 108.1 Total liabilities 1209 66.3 50.9 58.5 171.8 124.8 Deferred inflows of resources 14.7 - 0.9 - 15.6 - Net position: Net investment in capital assets 520.2 514.7 213.1 211.7 733.3 726.4 Restricted 128.6 116.2 - - 128.6 116.2 Unrestricted 7.1 72.9 91.1 88.4 98.2 161.3 Total net position $ 655.9 $ 703.8 $ 304.2 $ 300.1 $ 960.1 $ 1,003.9 The decrease in unrestricted net position and increase in deferred outflows of resources, long-term liabilities, and deferred inflows of resources was mainly due to the implementation of GASB Statement No. 68 which required the County to report its proportionate share of the net pension liability. 8 Indian River County, Florida Management's Discussion and Analysis For the Year Ended September 30, 2015 Governmental Activities In governmental activities, the increase in restricted net position was mainly due to reduced expenses from the one cent sales proceeds for capital projects budgeted in future fiscal years. The increase in net investment in capital assets was a result of increased construction projects and decreased outstanding debt. Business-type Activities In business-type activities, the increase in unrestricted net position was mainly due to reimbursement from FEMA for expenses previously disallowed and required to return in fiscal year 2014. ($2.7 million) and a grant reimbursement for the Osprey Marsh project($1.6 million). ----------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------- --------------------------------------------- Indian River Counter Total Net Position (Inmillions) September 30, 2014 and 2015 net investment in capital assets 2014 restricted 201.5 unrestricted 0 200 400 600 800 By far, the largest portion of the County's net position (76% or $733.3 million)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. 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. A portion of the County's net position (13% or $128.6 million) represents resources that are subject to external restrictions on how they may be used. The remaining balance of the unrestricted net position ($98.2 million) may be used to meet the government's ongoing obligations to citizens and creditors. 9 Indian River County, Florida Management's Discussion and Analysis For the Year Ended September 30, 2015 Indian River County Changes in Net Position (In Millions) Governmental Business-type Activities Activities Total 2015 2014 2015 2014 2015 2014 Revenues: Program revenues: Charges for services $ 22.9 $ 23.0 $ 47.7 $ 45.3 $ 70.6 $ 68.3 Operating grants/contributions 24.9 22.2 - - 24.9 22.2 Capital grants/contributions 11.7 7.5 8.6 5.0 20.3 12.5 General revenues: Property taxes 76.6 72.7 - - 76.6 72.7 Sales taxes 23.5 21.9 - - 23.5 21.9 Franchise fees 9.2 9.3 - - 9.2 9.3 Other 2.8 3.0 0.7 0.4 3.5 3.4 Total revenues 171.6 159.6 57.0 50.7 228.6 210.3 Expenses: General government 24.7 23.0 - - 24.7 23.0 Public safety 66.4 66.9 - - 66.4 66.9 Physical environment 1.6 1.0 - - 1.6 1.0 Transportation 26.0 23.6 - - 26.0 23.6 Economic environment 0.4 1.1 - - 0.4 1.1 Human services 7.4 7.1 - - 7.4 7.1 Culture/recreation 17.0 1.6.6 - - 1.7.0 16.6 Court related 6.7 6.4 - - 6.7 6.4 Interest and fiscal charges 1.0 1.9 - - 1.0 1.9 Water and sewer - - 35.2 35.8 35.2 35.8 Solid waste - - 11.7 10.8 11.7 10.8 Golf course - - 2.5 2.6 2.5 2.6 Building - - 2.1 1.8 2.1 1.8 Total expenses 151.2 147.6 51.5 51.0 202.7 198.6 Increase (decrease)in net position before transfers 20.4 12.0 5.5 (0.3) 25.90 11.7 Transfers 3.1 0.04 3.1 0.04 - - Increase(decrease) in net position 17.3 11.9 8.6 (0.2) 25.9 11.7 Net position-beginning 703.8 691.9 300.1 300.3 1,003.9 992.2 Restatement to implement GASB 68 (65.2) - (4.5 - (69.7) - Net position-ending $ 655.9 $ 703.8 $ 304.2 $ 300.1 $ 960.1 $ 1,003.9 1.0 Indian River County, Florida Management's Discussion and Analysis For the Year Ended September 30, 2015 Revenues By Source (In 1VTiIlions) Governmental Activities Fiscal Years 2014 and 2015 90 so _____________________________________________________________________________________________________________________- 7o 60 50 40 . ................................................................ ...... ............................................................................................................................ "FY 2014 30 FY 2015 20 ` _ n n 10 Charges for Operating Capital Property Sales and use Franchise Other services grants/contrib grants/contrib taxes taxes Fees Governmental Activities • Overall program revenues increased $6.8 million. 1) Operating grants and contributions increased $2.7 million due to reimbursement from the Department of Transportation for several road resurfacing projects in the County. 2) Capital grants and contributions increased $4.2 million due to the reimbursement from Department of Environmental Protection for a beach restoration project. • Overall general revenues increased by $5.2 million mainly due to increased property tax values and tax rates (increase of$3.9 million or 5%) and an increase in sales taxes ($1.6 million or 7%). 1.1. Indian River County, Florida Management's Discussion and Analysis For the Year Ended September 30, 2015 Expenses By Function In Millions) Governmental Activities Fiscal Fears 2014 and 2015 0 70 60 50 40 - 30 20 FY 2014 10 FY 2015 0 • The governmental activities expenses were $3.6 million higher in 2015 than in 2014. Major increases included: $1.7 million in general government expenses mainly due to legal expenses for the All Aboard Florida train expansion and the Florida Municipal Power Agency electric issue and $2.4 million in transportation expenses due to road construction and maintenance projects. These major increases were offset by a $0.9 million decrease in interest and fiscal charges expenses due to decreased debt service costs for refunded bonds and early payoff in current and prior fiscal years. • Governmental activities expenses were credited $4.3 million for their related share of overall pension expense as calculated by the Florida Retirement System. The reduction in expense was allocated to the following functions: general government $0.6 million,public safety $3.1 million, physical environment $0.01 million, transportation $0.2 million, economic environment $0.04 million, human services $0.01 million, culture and recreation $0.2 million, and court related $0.2 million. 1.2 Indian River County, Florida Management's Discussion and Analysis For the Year Ended September 30, 2015 Business-type Activities Business-type activities net position increased by $8.6 million. Key elements of this increase are as follows: • Overall program revenues increased $6.0 million 1) Charges for services increased by $2.4 million or 5%. A gradual improvement in the local economy has attributed to the following increases over 2014 revenues: water and sewer charges increased by $0.5 million or 2%, solid waste revenues increased $1.2 million or 1.2%, and the building revenues increased by $0.5 million or 22%. 2) Capital grants and contributions were $3.6 million higher in 2015 than in 2014,. an overall increase of 72%. This was mainly due to grant reimbursements for the Osprey Marsh project and previously deobligated FEMA grant funds for the Rockridge Sewer Project. • Overall expenses were $0.5 million or 1% higher in 2015 than in 2014. The water and sewer utilities expenses were $0.6 million or 2% lower in 2015 than in 2014 due to the recording of pension expense and a decrease in renewal and replacement costs. The solid waste expenses were $0.9 million or 8% higher in 2015 than in 2014 due to increased engineering and depreciation costs. The golf course had$0.1 million or 4% lower expenses in 2015 than in 2014 due to decreased depreciation costs. The building department had $0.3 million or 17% higher expenses in 2015 than in 2014 due to staffing increases. • Business-type activities expenses were credited $0.3 million for their related share of overall pension expense as calculated by the Florida Retirement System. The reduction in expense was allocated to the following activities: water and sewer $0.2 million, solid waste $0.02 million, golf course $0.02 million, and building $0.04 million. 1.3 Indian River County, Florida Management's Discussion and Analysis For the Year Ended September 30, 2015 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 ($47.3 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 ($0.6 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 ($121.5 million), 3) a committed category for constraints imposed by approval of ordinances and contracts by Board of County Commissioners ($2.6 million), and 4) an assigned category for constraints by the County's intent to use for specific purposes ($7.1 million). The two largest restricted amounts are in the Impact Fees Fund with a $14.2 million restricted fund balance and the Optional Sales Tax Fund with a $64.1 million restricted fund balance. Sixty percent of the Impact Fees Fund ($8.5 million) and twenty-five percent ($16.3 million) 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 $179.1 million, which is an increase of$5.7 million over the prior year of$173.4 million. Contributing factors to the $5.7 million increase in fund balance are: • Fund balance in the General Fund decreased by $1.4 million. This decrease was due to an increase in legal services mainly related to the All Aboard Florida train expansion and the Florida Municipal Power Agency electric matter. • In the Impact Fees Fund, fund balance decreased $0.9 million. This was largely due to the $5.1 million in transportation spending for major road construction and right-of-way purchases. • In the Transportation Fund, fund balance decreased$1.0 million due to the purchase of numerous replacement vehicles, including dump trucks and front end loaders. • Fund balance in the Emergency Services District Fund decreased by $2.4 million due to the construction of Fire Station#13. • Fund balance in the Optional Sales Tax Fund increased by $10.1 million mainly due to an $8.5 million decrease in expenditures for road construction. 1.4 Indian River County, Florida Management's Discussion and Analysis For the Year Ended September 30, 2015 Proprietary funds Unrestricted net position at the end of the year amounted to $1.3.4 million in the Solid Waste Disposal District (SWDD) Fund, ($1.3) million in the Golf Course Fund, $5.4 million in the County Building Fund, and $73.6 million in the County Utilities Fund. Other factors concerning the finances of these funds have already been addressed in the discussion of the County's business-type activities. GENERAL FUND BUDGETARY HIGHLIGHTS During the year there was a$10.1 million increase in operating appropriations between the original and final amended budget. The main components of the increase are as follows: • $5.8 million grants appropriations and prior year rollovers for the Senior Resource Association (SRA) to provide County-wide public transportation. • $0.5 million in FEMA de-obligated projects • $1.4 million for All Aboard Florida and FMPA legal and professional services • $0.3 million for Sheriffs roof repair • $0.5 million in roof repairs and air conditioning and carpeting replacements at the health department and north county library and aquatic center • $0.3 million cost of living increases Actual expenditures were $5.1 million lower than anticipated for the following reasons: • $2.0 million in SRA grant costs not yet expended • $1.0 million lower than expected Sheriff expenses • $0.4 million in unspent salary and benefits expenditures • $0.5 million in unspent capital and maintenance costs The General Fund Statement of Revenues, Expenditures, and Changes in Fund Balances — Budget and Actual is shown on page 33. 1.5 Indian River County, Florida Management's Discussion and Analysis For the Year Ended September 30, 2015 CAPITAL ASSETS AND DEBT ADMINISTRATION Capital Assets The County's investment in capital assets for its governmental and business-type activities as of September 30, 2015, amounts to $790.4 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 about I%. Indian River County Capital Assets (Net of Depreciation,In Millions) Governmental Business-type Activities Activities Total 2015 2014 2015 2014 2015 2014 Land $ 133.7 $ 133.3 $ 27.5 $ 27.5 $ 161.2 $ 160.8 Right-of-way 57.4 56.8 - - 57.4 56.8 Buildings and improvements 147.8 151.4 206.0 205.8 353.8 357.2 Equipment 13.8 12.7 2.6 2.4 16.4 15.1 Intangibles 2.4 2.4 2.0 1.9 4.4 4.3 Infrastructure 145.0 149.0 - - 145.0 149.0 Construction in progress 50.3 43.5 1.9 1.1.3 52.2 54.8 Total $ 550.4 $ 549.1 $ 240.0 $ 248.9 $ 790.4 $ 798.0 Governmental activities had the following major increases during the fiscal year: • An increase in construction in progress primarily due to the following continuing project costs: 66th Avenue road expansion project from SR60 to 49th Street ($3.4 million), the South County Intergenerational Facility ($2.4 million) and the Sector 3 Beach restoration ($3.4 million), with these amounts offset by the removal from construction in progress of the following projects: the Oslo Road/43rd-58th Avenue road project($4.1 million). 1.6 Indian River County, Florida Management's Discussion and Analysis For the Year Ended September 30, 2015 Business-type activities had the following major decreases during the fiscal year: • A decrease in construction in progress due to the completion of the Osprey Marsh project ($6.7 million) and the R/O Plants lime slurry injection project ($2.7 million). Capital Assets, Net Total Primary Government September 30, 2015 IN Land *Right of Way 2% 1% z Buildings and Improvements *Equipment *Intangibles *Infrastructure 115 Construction In Progress Additional information on the County's capital assets can be found in Note 6 on pages 73-75 of this report. 17 Indian River County, Florida Management's Discussion and Analysis For the Year Ended September 30, 2015 Debt Administration-Long-term debt At the end of the current fiscal year, the County had total bonded debt outstanding of$59.1 million. Of this amount, $23.6 million is debt backed by the full faith and credit of the government. The revenue bonds represent bonds secured solely by specified revenue sources. Indian River County's Outstanding Debt General Obligation and Revenue Bonds (In Millions) Governmental Business-type Activities Activities Total General Obligation Debt: 2015 2014 2015 2014 2015 2014 Limited General Oblig. Bonds, Series 2006 $ 3.5 $ 26.6 $ - $ - $ 3.5 $ 26.6 Limited General Oblig. Note, Series 2015 20.1 - - - 20.1 - Revenue Bonds/Notes: Spring Training Facility, Series 2001 7.2 7.7 - - 7.2 7.7 Water and Sewer Ref. Rev., Series 2005 - - - 16.3 - 16.3 Water and Sewer Rev Note, Series 2015 - - 7.2 - 7.2 - Water and Sewer Ref.Rev., Series 2009 - - 21.1 23.1 21.1 23.1. Total $ 30.8 $ 34.3 $ 28.3 $ 39.4 $ 59.1 $ 73.7 Additional information on the County's long-term debt can be found in Note 1.2 on pages 81-89 of this report. ECONOMIC FACTORS AND NEXT YEAR'S BUDGETS AND RATES The County taxroll has begun to recover following a significant drop during the "Great Recession". For FY 15/16, the taxroll is increasing by approximately 7.1% from last year. This follows smaller increases over the last two years. During the downturn, significant cuts were made to adjust for a 31% taxroll drop while avoiding millage rate increases. These measures resulted in a leaner, more efficient organization that is better prepared to provide services to the public at a reduced cost going forward. For FY 2014/2015, the County embarked on a catch-up plan for needed capital equipment replacement. Staff is recommending a continuation of that plan with moderate increases in capital equipment funding in FY 2015/2016. The total proposed budget for FY 2015/2016 is $279,943,033, a decrease of$34,497,691 or 11.0% from the prior year. This is still 40.7%below the approved FY 2006/2007 amount of$472,420,328. 1.8 Indian River County, Florida Management's Discussion and Analysis For the Year Ended September 30, 2015 The County-wide millage rate is decreasing slightly. This is due to a 0.7% increase in the General Fund rate combined with a 10.3% decrease in Land Acquisition Bond millage. The Municipal Service Taxing Unit Fund millage rate remains the same as the current year. The Emergency Services :District millage is increasing 13.9% due primarily to the addition of a new fire rescue station, along with capital replacement and salary increases. The Solid Waste Disposal :District assessment rate is increasing by 28.4% for residential customers and 4.4% for commercial customers. The residential increase is due mainly to the cost of single stream recycling and recycling market fluctuations. The single greatest individual expense in the budget is Personnel Services. In total, thirty-one (3 1) additional full-time (FT)positions are proposed for FY 15116. BCC departments are increasing by thirty (30) full-time positions, while Constitutional Officers show a net increase of one (1) position. This results in an additional cost of$1,796,886 (BCC only). The majority of these positions (20) are needed to staff the new fire station. REQUESTS FOR INFORMATION This financial report is designed to provide a general overview of the County's finances for all those with an interest in the government's finances. Questions concerning any of the information provided in this report or requests for additional financial information should be addressed to: Clerk of the Circuit Court and Comptroller Attention: Finance Department 1801 27th Street Vero Beach, FL 32960 1.9 20 BASIC FINANCIAL STATEMENTS ommmmmmmmmmmmmmmmmmmmmmmmmmmmmmmmmmmmmmmmmm 21 22 Indian River County,Florida Statement of Net Position September 30,2015 Governmental Business-type Activities Activities Total ASSETS Current assets: Cash and cash equivalents $ 205,933,166 $ 54,767,056 $ 260,700,222 Accounts receivable-net 2,070,558 2,494,679 4,565,237 hrternal balances 901,730 (901,730) - Due from other governments 10,837,610 1,569,630 12,407,240 Interest receivable 288,536 536,917 825,453 Inventories 283,531 970,107 1,253,638 Prepaid expenses 1,170,524 144,112 1,314,636 Current restricted assets: Cash and cash equivalents 5,737,623 48,771,439 54,509,062 Total current assets 227,223,278 108,352,210 335,575,488 Non-current assets: Net other postemployment benefits asset 914,909 - 914,909 Capital assets-non-depreciable 246,063,152 31,009,856 277,073,008 Capital assets-depreciable 603,837,506 461,282,506 1,065,120,012 Capital assets-accumulated depreciation (299,450,714) (252,312,540) (551,763,254) Non-current restricted assets: Special assessments receivable 203,815 563,099 766,914 Impact fees receivable - 683,286 683,286 Liens receivable _. - 4,328,447 4,328,447 Total non-current assets 551,568,668 245,554,654 797,123,322 Total assets 778,791,946 353,906,864 1,132,698,810 DEFERRED OUTFLOWS OF RESOURCES Deferred outflows related to pensions 12,120,345 711,023 12,831,368 Deferred amounts on refunding 588,058 1,386,691 1,974,749 Total deferred outflows ofresources 12,708,403 2,097,714 14,806,117 LIABILITIES Current liabilities(payable from current assets): Accounts payable 7,113,297 2,465,516 9,578,813 Retainage payable - 38,880 38,880 Claims payable 3,289,891 - 3,289,891 Due to other governments 603,570 32,596 636,166 Other deposits held in escrow 33,378 1,000 34,378 Unearned revenues 505,172 29,673 534,845 Accrued compensated absences 5,823,510 642,659 6,466,169 Pollution remediation costs payable 104,453 - 104,453 Current liabilities(payable from current restricted assets): Accounts payable - 22,849 22,849 Retainage payable 1,354,623 31,833 1,386,456 Accrued interest payable - 91,433 91,433 Customer deposits 97,259 3,065,717 3,162,976 Net pension liability 3,368,794 230,487 3,599,281 Notes payable 343,000 973,000 1,316,000 Closure and maintenance costs payable - 4,630,451 4,630,451 Bonds payable 4,040,000 1,905,000 5,945,000 Total current liabilities 26,676,947 14,161,094 40,838,041 Non-current liabilities: Accrued compensated absences 5,277,004 249,063 5,526,067 Pollution remediation costs payable 2,446,747 - 2,446,747 Claims payable 4,887,629 - 4,887,629 Net pension liability 54,989,825 3,787,601 58,777,426 Notes payable 19,706,000 6,198,000 25,904,000 Due to other governments 158,086 - 158,086 Closure and maintenance costs payable - 7,379,285 7,379,285 Bonds payable,net of premium and discount _. 6,735,000 19,176,234 25,911,234 Total non-current liabilities 94,200,291 36,790,183 130,990,474 Total liabilities 120,877,238 50,951,277 171,828,515 DEFERRED INFLOWS OF RESOURCES Deferred inflows related to pensions 14,670,135 881,674 15,551,809 NET POSITION Net investment in capital assets 520,214,002 213,114,279 733,328,281 Restricted for: Transportation/mad projects 24,968,396 - 24,968,396 Public safety 13,271,766 13,271,766 Court related costs 2,885,644 2,885,644 Housing assistance 785,826 - 785,826 Capital projects 65,881,779 65,881,779 Beach renourishment 10,079,407 - 10,079,407 Culture/recreation 6,312,321 - 6,312,321 Debt service 2,914,453 2,914,453 Environmental conservation/preservation 139,188 - 139,188 Special assessment projects 1,341,307 - 1,341,307 Unrestricted 7,158,887 91,057,348 98,216,235 Total net position S 655,952,976 $ 304,171,627 $ 960,124,603 The accompanying notes are an integral part of the financial statements. 23 24 Indian River County,Florida Statement of Activities For the Year Ended September 30,2015 Net(Expense)Revenue and Program Revenues Changes in Net Position__ Operating Capital Charges for Grants and Grants and Governmental Business-type Functions/Programs Expenses Services Contributions Contributions Activities Activities Total Primary Government: Governmental activities: General government $ 24,732,636 $ 6,641,363 $ 13,733,340 $ 200,692 $ (4,157,241) $ $ (4,157,241) Public safety 66,364,113 6,457,584 1,387,529 36,800 (58,482,200) (58,482,200) Physical environment 1,636,749 - 12,750 861,359 (762,640) (762,640) Transportation 25,992,461 4,273,591 5,988,824 3,321,440 (12,408,606) (12,408,606) Economic environment 421,057 - - - (421,057) (421,057) Human services 7,352,777 277,279 3,405,126 - (3,670,372) (3,670,372) Culture/recreation 17,011,188 1,941,993 91,615 7,250,794 (7,726,786) (7,726,786) Court related 6,677,054 3,308,235 253,550 - (3,115,269) (3,115,269) Interest and fiscal charges 1,013,527 - - - (1,013,527) (1,013,527) Total governmental activities 151,201,562 22,900,045 24,872,734 11,671,085 (91,757,698) (91,757,698) Business-type activities: Water and sewer 35,223,882 30,089,101 - 8,616,416 3,481,635 3,481,635 Solid waste 11,708,383 11,455,302 - (253,081) (253,081) Golf course 2,498,397 3,235,879 737,482 737,482 Building 2,085,190 2,958,488 873,298 873,298 Total business-type activities 51,515,852 47,738,770 8,616,416 4,839,334 4,839.334 Total primary government $ 202,717,414 $ 70,638,815 $ 24,872,734 $ 20,287,501 (91,757,698) 4,839,334 (86,918,364) General revenues: Property taxes,levied for general purposes 71,825,109 - 71,825,109 Property taxes,levied for debt service 4,795,927 4,795,927 Sales and use taxes 23,549,042 23,549,042 Franchise fees,levied on gross receipts 9,180,652 9,180,652 Interest earnings 1,051,822 625,525 1,677,347 Miscellaneous 1,799,538 56,887 1,856,425 Transfers (3,057,421) 3,057,421 Total general revenues and transfers 109,144,669 3,739,833 112,884,502 Change in net position 17,386,971 8,579,167 25,966,138 Net position-beginning,as restated(Note 20B) 638,566,005 295,592,460 934,158,465 Netposition-ending $ 655,952,976 $ 304,171,627 $ 960,124,603 The accompanying notes are an integral part of the financial statements. 25 Indian River County, Florida Balance Sheet Governmental Funds September 30, 2015 Secondary Impact Roads General Fees Construction ASSETS Cash and cash equivalents $ 51,578,753 $ 13,645,387 $ 14,022,401 Accounts receivable 844,121 - - Special assessments receivable - Due from other funds 1,204,593 - - Due from other governments 3,125,852 1,356,406 802,393 Interest receivable 16,826 3,862 3,799 Inventories 112,307 - - Prepaid items 134,739 Advances to other funds 212,500 - - Total assets $ 57,229,691 $ 15,005,655 $ 14,828,593 LIABILITIES Accounts payable $ 3,542,596 $ 144,443 $ 737,347 Retainage payable - 411,244 28,657 Due to other funds 547,115 - - Due to other governments 324,513 98,588 - Unearned revenues 467,501 - Other deposits 114,613 - - Total liabilities 4,996,338 654,275 766,004 DEFERRED INFLOWS OF RESOURCES Unavailable revenue-special assessments - - - Unavailable revenue-ambulance services - - - Unavailable revenue-state and federal grants 1,954,123 158,631 382,633 Total deferred inflows of resources 1,954,123 158,631 382,633 FUND BALANCES Nonspendable: Inventories 112,307 - - Prepaid items 134,739 Advances to other funds 212,500 - - Restricted for: Transportation/road improvements - 8,549,530 13,679,956 Court-related costs and improvements - - - Housing assistance - - - Law enforcement/public safety - 778,375 - Fire/emergency services - 437,657 - Tourism-related activities - - - Beach renourishment - Boating related projects - - Library services - 992,276 - Land acquisition - - Stormwater,street lighting,and other special assessments - - Voting/election activities - Debt service - - - Capital projects - 786,025 - Dodgertown repairs/improvements - - Parks/recreational projects 1,000,000 2,648,886 Committed to: Economic incentives 1,035,240 - - Environmental conservation/preservation - Law Enforcement/public safety 1,179 - Parks/recreational projects 56,156 - Assigned to: Law enforcement/public safety - Transportation/road improvements - - - Unassigned 47,727,109 - - Total fund balances 50,279,230 14,192,749 13,679,956 Total liabilities,deferred inflows and fund balances $ 57,229,691 $ 15,005,655 $ 14,828,593 The accompanying notes are an integral part of the financial statements. 26 Emergency Optional Other Total Services Sales Governmental Governmental Transportation District Tax Funds Funds $ 7,174,425 $ 7,751,956 $ 63,684,706 $ 23,297,090 $ 181,154,718 636 917,873 - 8,522 1,771,152 203,815 - - - 203,815 - 260,235 16,456 160,061 1,641,345 247,073 - 2,915,521 2,354,666 10,801,911 147,386 2,488 18,390 5,443 198,194 - - - 22,906 135,213 9,568 - 37,433 181,740 - - - - 212,500 $ 7,773,335 $ 8,942,120 $ 66,635,073 $ 25,886,121 $ 196,300,588 $ 384,729 $ 870,200 $ 709,606 $ 542,050 $ 6,930,971 1,306 - 829,713 83,703 1,354,623 - - 405,000 952,115 - - 38,406 461,507 1,636 12,514 23,521 505,172 - - - - 114,613 387,671 882,714 1,539,319 1,092,680 10,319,001 349,176 - - - 349,176 - 916,751 - - 916,751 - - 988,841 2,146,707 5,630,935 349,176 916,751 988,841 2,146,707 6,896,862 - - - 22,906 135,213 - 9,568 - 37,433 181,740 - - 212,500 - - 22,229,486 - 2,856,617 2,856,617 - - 784,620 784,620 - - 3,439,787 4,218,162 7,133,087 - - 7,570,744 - - 382,136 382,136 - 8,301,356 8,301,356 - 1,155,120 1,155,120 - - 10,741 1,003,017 - - 126,438 126,438 - - - 1,341,307 1,341,307 - - - 3,528 3,528 - - - 2,914,453 2,914,453 - - 64,106,91.3 - 64,892,938 - 102,510 102,510 - 3,648,886 - 1,035,240 1,168,885 1,168,885 - - - 335,506 336,685 - 56,156 - 102,870 102,870 7,036,488 - - - 7,036,488 - - - (439,479) 47,287,630 7,036,488 7,142,655 64,106,913 22,646,734 179,084,725 $ 7,773,335 $ 8,942,120 $ 66,635,073 $ 25,886,121 $ 196,300,588 27 Indian River County, Florida Reconciliation of Total Governmental Fund Balances to Net Position of Governmental Activities September 30, 2015 Total governmental fund balances: $ 179,084,725 Amounts reported for governmental activities in the statement of net position are different because: Capital assets used in governmental activities are not financial resources and,therefore,are not reported 550,034,807 in the funds. Long-term liabilities,including bonds payable($10,186,942),notes payable($20,049,000), accrued compensated absences($10,985,483),medicaid settlement funds payable($316,173), and accrued pollution remediation costs($2,551,200)are not due and payable in the current period and,therefore,are not reported in the funds. (44,088,798) On the governmental fund statements,a net pension liability is not recorded until an amount is due and payable and the pension plan's fiduciary net position is not sufficient for payment of those benefits.On the statement of net position,the County's proportionate share of the net pension liability($57,823,885) of the cost-sharing defined benefit pension plans in which the County participates is reported. Additionally,deferred outflows($12,025,719)and deferred inflows($14,552,801)related to pensions are also reported in accordance with GASB Statement No.68. (60,350,967) Special assessment,ambulance services,and state and federal grant receivables are not available to pay for current period expenditures and,therefore,are reported as unavailable revenue in the funds. 6,896,862 Accrued interest is not recognized in the current period because the resources are not available and,therefore,not reported in the funds. 70,531 Internal service funds are used by management to charge the costs of certain activities,such as insurance, fleet,and information technology services,to individual funds. The assets and liabilities of the internal service funds are included in governmental activities in the statement of net position. 23,390,907 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. 914,909 Net position of governmental activities $ 655,952,976 The accompanying notes are an integral part of the financial statements. 28 29 Indian River County, Florida Statement of Revenues,Expenditures, and Changes in Fund Balances Governmental Funds For the Year Ended September 30, 2015 Secondary Impact Roads General Fees Construction REVENUES Taxes $ 52,293,726 $ - $ 3,672,972 Permits,fees and special assessments 9,401,418 5,280,765 157,165 Intergovernmental 15,112,212 1,630,482 1,018,540 Charges for services 11,800,763 - - Judgments,fines and forfeits 452,930 - - Interest 321,515 50,096 59,487 Miscellaneous 1,282,177 109,895 32,177 Total revenues 90,664,741 7,071,238 4,940,341 EXPENDITURES General government 20,596,696 368,903 - Public safety 40,610,717 816,387 - Physical environment 249,263 - - Transportation 4,837,336 5,101,408 4,890,907 Economic environment 426,790 - - Human services 3,535,915 - - Culture/recreation 8,461,822 1,689,872 - Court related 6,080,880 - - Debt service; Principal - - - Interest and other fiscal charges - - - Capital projects - - - Total expenditures 84,799,419 7,976,570 4,890,907 Excess of revenues over(under)expenditures 5,865,322 (905,332) 49,434 OTHER FINANCING SOURCES(USES) Transfers in 1,467,494 57,075 - Issuance of refunding notes - - - Transfers out (8,732,451) (79,687) - Payment to refunded bond escrow agent - - - Total other financing sources(uses) (7,264,957) (22,612) - Net change in fund balances (1,399,635) (927,944) 49,434 Fund balances at beginning of year 51,678,865 15,120,693 13,630,522 Fund balances at end of year $ 50,279,230 $ 14,192,749 $ 13,679,956 The accompanying notes are an integral part of the financial statements. 30 Emergency Optional Other Total Services Sales Governmental Governmental Transportation District Tax Funds Funds $ - $ 20,945,872 $ 16,190,352 $ 7,067,156 $ 100,170,078 190,379 - 80,542 457,462 15,567,731 2,880,033 51,600 317,741 11,055,213 32,065,821 107,104 5,215,964 - 1,434,351 18,558,182 - 13,400 - 431,530 897,860 46,242 65,691 267,178 84,496 894,705 541,899 31,413 8,460 464,532 2,470,553 3,765,657 26,323,940 16,864,273 20,994,740 170,624,930 320,974 - - 1,670,538 22,957,111 - 28,267,599 - 2,008,545 71,703,248 729,305 - - 76,453 1,055,021 12,137,157 - - 978,761 27,945,569 - - - 9,530 436,320 - - - 3,983,841 7,519,756 - - - 5,568,015 15,719,709 - - - 597,029 6,677,909 - - - 4,180,000 4,180,000 - - - 1,266,070 1,266,070 - - 5,309,597 - 5,309,597 13,187,436 28,267,599 5,309,597 20,338,782 164,770,310 (9,421,779) (1,943,659) 11,554,676 655,958 5,854,620 8,573,172 - - 1,043,282 11,141,023 - - - 20,369,000 20,369,000 (150,990) (460,942) (1,453,500) (476,949) (11,354,519) - - - (20,340,959) (20,340,959) 8,422,182 (460,942) (1,453,500) 594,374 (185,455) (999,597) (2,404,601) 10,101,176 1,250,332 5,669,165 8,036,085 9,547,256 54,005,737 21,396,402 173,415,560 $ 7,036,488 $ 7,142,655 $ 64,106,913 $ 22,646,734 $ 179,084,725 31 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 30,2015 Net change in fund balances-total governmental funds $ 5,669,165 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 22,533,416 Less current year loss on assets (302,864) Less current year depreciation 2 0,914,,,788) 1,315,764 Payments of bond principal,pollution remediation,and medicaid settlement costs are expenditures in the governmental funds,but the payment reduces long-term liabilities in the statement of net position. Bond principal payment 4,180,000 Bond refunding proceeds and payment to escrow agent (20,369,000) Payment to refunded escrow agent 20,340,959 Medicaid settlement 158,087 Pollution remediation costs 120,600 4,430,646 Changes in accrued compensated absences do not require the use of current financial resources and,therefore,are not reported as expenditures in governmental funds. (462,116) 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/deferred amount on refunding amortization expense 252,543 Accrued OPEB expense 119,542 372,085 Governmental funds report contributions in defined benefit pension plans as expenditures. However,in the statement of activities,the amount contributed to defined benefit pension plans reduces future net pension liabilities and is reported as part of deferred outflows of resources. 2,080,801 In the statement of activities,pension expense is recorded for the County's proportionate share of collective pension expense of the cost-sbaring defined benefit plans in which the County participates. Also included in pension expense are amounts required to be amortized in accordance with GASB Statement No.68. 2,246,632 Internal service funds are used by management to charge the costs of insurance,fleet and information technology services to individual funds. The net costs of the internal service funds are reported in governmental activities. (2,059,915) Governmental funds report non-exchange transactions when the applicable eligibility requirements have been met and resources are available. However,in the statement of activities,non-exchange transactions are recognized when the eligibility requirements are met. This is the net number of the prior year and current year accrual. 3,772,053 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. 21,856 Change in net position of governmental activities $ 17,386,971 The accompanying notes are an integral part of the financial statements. 32 Indian River County,Florida Statement of Revenues,Expenditures, and Changes in Fund Balances-Budget and Actual General Fund For the Year Ended September 30,2015 Variance with Final Budget Budgeted Amounts Actual Positive Original Final Amounts (Negative) REVENUES Taxes $ 51,504,439 $ 51,504,439 $ 52,293,726 $ 789,287 Permits, fees and special assessments 8,774,200 8,774,200 9,401,418 627,218 Intergovernmental 11,527,062 17,195,229 1.5,112,212 (2,083,017) Charges for services 11,803,503 11,337,227 11,800,763 463,536 Judgments, fines and forfeits 322,525 322,525 452,930 130,405 Interest 181,902 181,902 321,515 139,613 Miscellaneous 727,896 1,005,113 1,282,177 277,064 Total revenues 84,841,527 90,320,635 90,664,741 344,106 EXPENDITURES General government 18,759,938 21,631,755 20,596,696 1,035,059 Public safety 41,501,356 41,843,633 40,610,717 1,232,916 Physical environment 253,717 267,099 249,263 17,836 Transportation 1,021,481 6,894,934 4,837,336 2,057,598 Economic environment 421,679 453,575 426,790 26,785 Human services 3,652,937 3,687,307 3,535,915 151,392 Culture/recreation 8,391,055 9,173,837 8,461,822 712,015 Court related 5,816,241 5,956,681 6,080,880 (124,199) Total expenditures 79,818,404 89,908,821 84,799,419 5,109,402 Excess of revenues over(under) expenditures 5,023,123 411,814 5,865,322 5,453,508 OTHER FINANCING SOURCES(USES) Transfers in 860,315 1,583,596 1,467,494 (116,102) Transfers out (8,232,532) (8,732,532) (8,732,451) 81 Total other financing sources (uses) (7,372,217) (7,148,936) (7,264,957) (116,021) Net change in fund balances (2,349,094) (6,737,122) (1,399,635) $ 5,337,487 Fund balances at beginning of year 2,349,094 6,737,122 51,678,865 Fund balances at end of year $ - $ - $ 50,279,230 The accompanying notes are an integral part of the financial statements. 33 Indian River County,Florida Statement of Revenues,Expenditures, and Changes in Fund Balances-Budget and Actual Impact Fees Fund For the Year Ended September 30,2015 Variance with Final Budget Budgeted Amounts Actual Positive Original Final Amounts (Negative) REVENUES Permits, fees and special assessments $ 2,398,750 $ 2,398,750 $ 5,280,765 $ 2,882,015 Intergovernmental - 265,000 1,630,482 1,365,482 Interest 49,500 47,500 50,096 2,596 Miscellaneous 146 146 109,895 109,749 Total revenues 2,448,396 2,711,396 7,071,238 4,359,842 EXPENDITURES General government 232,593 676,841 368,903 307,938 Public safety 190,000 869,800 816,387 53,413 Physical environment - 1,000 - 1,000 Transportation 5,405,000 10,837,000 5,101,408 5,735,592 Culture/recreation 200,000 3,297,635 1,689,872 1,607,763 Total expenditures 6,027,593 15,682,276 7,976,570 7,705,706 Excess of revenues under expenditures (3,579,197) (12,970,880) (905,332) 1.2,065,548 OTHER FINANCING SOURCES(USES) Transfers in - 57,076 57,075 (1) Transfers out (273,355) (79,687) 193,668 Total other financing sources (uses) - (216,279) (22,612) 193,667 Net change in fund balances (3,579,1.97) (1.3,187,159) (927,944) $ 12,259,215 Fund balances at beginning of year 3,579,197 13,187,159 15,120,693 Fund balances at end of year $ - $ - $ 14,192,749 The accompanying notes are an integral part of the financial statements. 34 Indian River County,Florida Statement of Revenues,Expenditures, and Changes in Fund Balances-Budget and Actual Secondary Roads Construction Fund For the Year Ended September 30,2015 Variance with Final Budget Budgeted Amounts Actual Positive Original Final Amounts (Negative) REVENUES Taxes $ 3,044,750 $ 3,044,750 $ 3,672,972 $ 628,222 Permits,fees and special assessments - - 157,165 157,165 Intergovernmental - 2,663,423 1,018,540 (1,644,883) Interest 19,000 19,000 59,487 40,487 Miscellaneous 439 30,439 32,177 1,738 Total revenues 3,064,189 5,757,612 4,940,341 (817,271) EXPENDITURES Transportation 5,512,591 10,010,374 4,890,907 5,119,467 Total expenditures 5,512,591 10,010,374 4,890,907 5,119,467 Net change in fund balances (2,448,402) (4,252,762) 49,434 $ 4,302,196 Fund balances at beginning of year 2,448,402 4,252,762 13,630,522 Fund balances at end of year $ - $ - $ 13,679,956 The accompanying notes are an integral part of the financial statements. 35 Indian River County,Florida Statement of Revenues,Expenditures, and Changes in Fund Balances-Budget and Actual Transportation Fund For the Year Ended September 30,2015 Variance with Final Budget Budgeted Amounts Actual Positive Original Final Amounts (Negative) REVENUES Permits, fees and special assessments $ 171,000 $ 171,000 $ 190,379 $ 19,379 Intergovernmental 2,446,250 2,642,425 2,880,033 237,608 Charges for services 92,150 92,150 107,104 14,954 Interest 28,500 28,500 46,242 17,742 Miscellaneous 800,924 425,924 541,899 115,975 Total revenues 3,538,824 3,359,999 3,765,657 405,658 EXPENDITURES General government 277,078 333,366 320,974 12,392 Physical environment 603,516 859,498 729,305 130,193 Transportation 1.1,725,814 13,149,312 12,137,157 1,012,155 Total expenditures 12,606,408 14,342,176 13,187,436 1,154,740 Excess of revenues under expenditures (9,067,584) (10,982,177) (9,421,779) 1,560,398 OTHER FINANCING SOURCES(USES) Transfers in 8,073,172 8,573,172 8,573,172 - Transfers out (150,990) (150,990) (150,990) - Total other financing sources(uses) 7,922,182 8,422,182 8,422,182 - Net change in fund balances (1,145,402) (2,559,995) (999,597) $ 1,560,398 Fund balances at beginning of year 1,145,402 2,559,995 8,036,085 Fund balances at end of year $ - $ - $ 7,036,488 The accompanying notes are an integral part of the financial statements. 36 Indian River County,Florida Statement of Revenues,Expenditures, and Changes in Fund Balances-Budget and Actual Emergency Services District Fund For the Year Ended September 30,2015 Variance with Final Budget Budgeted Amounts Actual Positive Original Final Amounts (Negative) REVENUES Taxes $ 20,687,270 $ 20,687,270 $ 20,945,872 $ 258,602 Intergovernmental 42,750 67,798 51,600 (16,198) Charges for services 5,289,426 5,289,426 5,215,964 (73,462) Judgments, fines and forfeits 10,450 10,450 13,400 2,950 Interest 35,625 35,625 65,691 30,066 Miscellaneous 76,126 79,223 31,413 (47,810) Total revenues 26,141,647 26,169,792 26,323,940 154,148 EXPENDITURES Public safety 25,893,680 32,635,956 28,267,599 4,368,357 Total expenditures 25,893,680 32,635,956 28,267,599 4,368,357 Excess of revenues under expenditures 247,967 (6,466,164) (1,943,659) 4,522,505 OTHER FINANCING SOURCES (USES) Transfers out (475,367) (476,290) (460,942) 15,348 Total other financing sources(uses) (475,367) (476,290) (460,942) 15,348 Net change in fund balances (227,400) (6,942,454) (2,404,601) $ 4,537,853 Fund balances at beginning of year 227,400 6,942,454 9,547,256 Fund balances at end of year $ - $ - $ 7,142,655 The accompanying notes are an integral part of the financial statements. 37 38 Indian River County,Florida Statement of Fund Net Position Proprietary Funds September 30, 2015 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 $ 11,358,443 $ 5,384 $ 37,273,275 $ 6,129,954 $ 54,767,056 $ 30,516,071 Accounts receivable-net 107,314 - 2,387,365 - 2,494,679 299,406 Due from other funds 110,363 - - 110,363 - Due from other governments - 10,800 1,558,830 - 1,569,630 35,699 Interest receivable 10,535 228 521,943 4,211 536,917 19,811 Inventories - 94,916 875,191 - 970,107 148,318 Prepaid items 1,136 - 141,918 1,058 144,112 988,784 Current restricted assets: Cash and cash equivalents 15,297,593 - 33,473,846 - 48,771,439 - Total current assets 26,885,384 111,328 76,232,368 6,135,223 109,364,303 32,008,089 Non-current assets: Capital assets-non-depreciable 13,680,803 6,606,283 10,722,770 - 31,009,856 - Capital assets-depreciable 31,380,967 3,576,454 425,855,236 469,849 461,282,506 2,543,668 Capital assets-accumulated depreciation (11,622,681) (2,090,461) (238,256,043) (343,355) (252,312,540) (2,128,531) Non-current restricted assets: Special assessments receivable 563,099 563,099 Impact fees receivable 683,286 683,286 Liens receivable _ _ 4,328,447_ _ 4,328,447 _ Total non-current assets 33,439,089 8,092,276 203,896,795 126,494 245,554,654 415,137 Total assets 60,324,473 8,203,604 280,129,163 6,261,717 354,918,957 32,423,226 DEFERRED OUTFLOWS OF RESOURCES Deferred outflows related to pensions 39,927 36,881 539,966 94,249 711,023 94,626 Deferred amounts on refundings - - 1,386,691 - 1,386,691 - Total deferred outflows of resources 39,927 36,881 1,926,657 94,249 2,097,714 94,626 LIABILITIES Current liabilities(payable from current assets): Accounts payable 1,092,183 42,215 1,267,577 78,978 2,480,953 182,326 Retainage payable - - 38,880 - 38,880 - Due to other funds 799,593 - 799,593 - Claims payable - - - 3,289,891 Due to other governments 6,635 25,961 32,596 - Other deposits 1,000 - 1,000 Unearned revenues - 29,673 - - 29,673 - Accrued compensated absences 45,970 15,462 507,565 73,662 642,659 72,314 Total current liabilities(payable from current assets) 1,138,153 894,578 1,814,022 178,601 4,025,354 3,544,531 Current liabilities(payable from restricted assets): Accounts payable - - 7,412 - 7,412 - Retainage payable 31,833 31,833 Accrued interest payable - 91,433 91,433 Closure and maintenance costs payable 4,630,451 - - - 4,630,451 - Net pension liability 12,943 11,955 175,037 30,552 230,487 30,673 Notes payable - - 973,000 - 973,000 - Bonds payable - 1,905,000 1,905,000 Customer deposits 135,126 2,930,591 3,065,717 Total current liabilities(payable from restricted assets) 4,778,520 11,955 _6,114,306 30,552 10,935,333 30,673 Total current liabilities 5,916,673 906,533 7,928,328 209,153 14,960,687 3,575,204 Non-current liabilities: Accrued compensated absences - 48,124 192,021 8,918 249,063 42,717 Advance from other funds 212,500 - - 212,500 - Claims payable - - - 4,887,629 Closure and maintenance costs payable 7,379,285 - - - 7,379,285 - Net pension liability 212,686 196,463 2,876,388 502,064 3,787,601 504,061 Notes payable - - 6,198,000 - 6,198,000 - Bonds payable-net of unamortized discount/premium - - 19,176,234 - 19,176,234 - Total non-current liabilities 7,591,971 457,087 28,442,643 510,982 37,002,683 5,434,407 Total liabilities 13,508,644 1,363,620 36,370,971_ 720,135 51,963,370 9,009,611_ DEFERRED INFLOWS OF RESOURCES Deferred inflows related to pensions 49,510 45,732 669,562 116,870 881,674 117,334 NET POSITION Net investment in capital assets 33,439,089 8,092,276 171,456,420 126,494 213,114,279 415,137 Unrestricted 13,367,157 (1,261,143) 73,558,867 5,392,467 91,057,348 22,97.5,770 Total net position $ 46,806,246 $ 6,831,133 $ 245,015,287 $ 5,518,961 $ 304,171,627 $ 23,390,907 The accompanying notes are an integral part of the financial statements. 39 Indian River County,Florida Statement of Revenues,Expenses, and Changes in Fund Net Position Proprietary Funds For the Year Ended September 30,2015 Business-type Activities - Solid Waste Disposal Golf District Course OPERATING REVENUES Charges for services $ 11,455,302 $ 3,235,879 Charges for services pledged as security for revenue bonds - - Total operating revenues 11,455,302 3,235,879 OPERATING EXPENSES Personal services 543,085 505,367 Material, supplies, services and other operating 9,999,165 1,806,504 Depreciation 1,166,133 152,698 Total operating expenses 1.1,708,383 2,464,569 Operating income (loss) (253,081) 771,310 NONOPERATING REVENUES (EXPENSES) Interest income 179,092 3,191 Interest income pledged as security for revenue bonds - - Gain on disposal of equipment - 3,702 Interest expense - (33,828) Bond amortization expense - - Loss on disposal of equipment - - Total nonoperating revenues (expenses) 179,092 (26,935) Income (loss)before transfers and capital grants and contributions (73,989) 744,375 Capital grants - - Capital contributions - - Transfers 24,990 - Change in net position (48,999) 744,375 Total net position-beginning, as restated(Note 20B) 46,855,245 6,086,758 Total net position- ending $ 46,806,246 $ 6,831,133 The accompanying notes are an integral part of the financial statements, 40 Enterprise Funds Governmental Activities - County County Internal Utilities Building Total Service Funds $ - $ 2,958,488 $ 17,649,669 $ 22,125,803 30,089,101 - 30,089,101 - 30,089,101 2,958,488 47,738,770 22,125,803 7,401,773 1,360,766 9,810,991 2,487,906 10,939,066 705,284 23,450,019 21,820,391 14,854,818 19,140 16,192,789 125,198 33,1.95,657 2,085,190 49,453,799 24,433,495 (3,106,556) 873,298 (1,715,029) (2,307,692) - 26,231 208,514 135,261 417,011 - 417,011 - 53,1.85 - 56,887 - (2,004,297) - (2,038,125) - (22,133) - (22,133) - (1,795) - (1,795) (1,558,029) 26,231 (1,379,641) 135,261 (4,664,585) 899,529 (3,094,670) (2,172,431) 1,558,830 - 1,558,830 - 10,014,027 - 1.0,014,027 - 75,990 - 1.00,980 1.1.2,516 6,984,262 899,529 8,579,167 (2,059,915) 238,031,025 4,619,432 295,592,460 25,450,822 $ 245,015,287 $ 5,518,961 $ 304,171,627 $ 23,390,907 41 Indian River County, Florida Statement of Cash Flows Proprietary Funds For the Year Ended September 30, 2015 Business-type Activities- Solid Waste Disposal District Golf Course CASH FLOWS FROM OPERATING ACTIVITIES Cash received from customers $ 11,451,556 $ 3,232,781 Cash paid to suppliers for goods and services (9,418,532) (1,813,914) Cash paid to employees for services (562,753) j517,248) Net cash provided by(used in)operating activities 1,470,271 901,619 CASH FLOWS FROM NONCAPITAL FINANCING ACTIVITIES Transfers 24,990 - Proceeds from advances from other funds - 135,000 Payments on advances from other funds - (600,000) Net cash provided by(used in)noncapital financing activities 24,990 (465,000) CASH FLOWS FROM CAPITAL AND RELATED FINANCING ACTIVITIES - - Proceeds from issuance of long-term debt - - Payments on defeasance of debt - - Principal payments-bonds/notes - - Interest paid on long-term debt - (33,828) Payments on advances from other funds - (265,195) Proceeds from sales of capital assets - 3,702 Purchase of capital assets (282,449) (147,597) Bond paying agent fees - - Debt issuance costs - - Capital contributed by others - - Net cash flows provided by(used in)capital and related financing activities (282,449) (442,918) CASH FLOWS FROM INVESTING ACTIVITIES Interest and dividends on investments 176,484 3,155 Net cash provided by investing activities 176,484 3,155 Net increase(decrease)in cash and cash equivalents 1,389,296 (3,144) Cash and cash equivalents at beginning of year 25,266,740 8,528 Cash and cash equivalents at end of year $ 26,656,036 $ 5,384 Classified as: Current assets $ 11,358,443 $ 5,384 Restricted assets 15,297,593 - Total $ 26,656,036 $ 5,384 The accompanying notes are an integral part of the financial statements. 42 Enterprise Funds Governmental Activities- County County Internal Utilities Building Total Service Funds $ 30,324,101 $ 2,958,488 $ 47,966,926 $ 22,185,025 (11,619,376) (683,463) (23,535,285) (21,712,701) (7,596,683) (1,395,674) (10,072,358) (22,517,991) 11,108,042 879,351 14,359,283 (2,045,667) 75,990 - 100,980 112,516 - - 135,000 - (600,000) (7,000) 75,990 - (364,020) 105,516 7,171,000 - 7,171,000 - (14,205,000) - (14,205,000) - (3,485,000) - (3,485,000) - (1,852,421) - (1,886,249) - - - (265,195) - 53,185 - 56,887 - (2,587,403) (109,418) (3,126,867) (155,795) (1,900) - (1,900) - (34,512) - (34,512) - 5,415,726 - 5,415,726 - (9,526,325) (109,418) (10,361,110) (155,795) 421,250 24,928 625,817 132,161 421,25024,928 625,817 132,161 2,078,957 794,861 4,259,970 (1,963,785) 68,668,164 5,335,093 99,278,525 32,479,856 $ 70,747,121 $ 6,1.29,954 $ 103,538,495 $ 30,516,071 $ 37,273,275 $ 6,129,954 $ 54,767,056 $ 30,516,071 33,473,846 - 48,771,439 - $ 70,747,121 $ 6,129,954 $ 103,538,495 $ 30,516,071 Continued 43 Indian River County, Florida Statement of Cash Flows Proprietary Funds For the Year Ended September 30, 2015 Business-type Activities- Solid Waste Disposal Golf District Course RECONCILIATION OF OPERATING INCOME(LOSS)TO NET CASH PROVIDED BY(USED IN)OPERATING ACTIVITIES: Operating income(loss) $ (253,081) $ 771,310 Adjustments to reconcile operating income to net cash provided by(used in)operating activities: Depreciation 1,166,133 152,698 WIP reclassified as expense - - (Increase)Decrease in assets: Accounts receivable 15,649 - Due from other funds (20,895) - Due from other governments - - Inventories - (37,125) Impact fees receivable - - Special assessments receivable - Liens receivable - - Prepaid expenses (1,136) 395 Increase(Decrease)in liabilities: Accounts payable 81,769 28,830 Due to other governments - 490 Retainage payable - - Customer deposits 1,500 - Closure and maintenance costs payable 500,000 - Pollution remediation costs payable - Net pension liability (16,819) (15,537) Unearned revenues - (3,098) Claims payable - - Accrued compensated absences (2 849) 3,656 Total adjustments 1,723,352 130,309 Net cash provided by(used in)operating activities $ 1,470,271 $ 901,619 NONCASH CAPITAL AND RELATED FINANCING ACTIVITIES Change in fair value of investments $ 17,129 $ 371 Contributed property,infrastructure,and equipment - Capital assets purchased through accounts payable $ 135,407 $ - The accompanying notes are an integral part of the financial statements. 44 Enterprise Funds Governmental Activities- County County Internal Utilities Building Total Service Funds $ (3,106,556) $ 873,298 $ (1,715,029) $ (2,307,692) 14,854,818 19,140 16,192,789 125,198 68,824 - 68,824 - (4,290) - 11,359 25,048 (20,895) - - - - 34,174 21,588 - (15,537) 41,450 (426,401) - (426,401) - 414,951 - 414,951 - 129,034 - 129,034 - 18,920 (87) 18,092 161,029 (743,145) 14,737 (617,809) (45,764) 7,171 7,661 - (34,997) - (34,997) - 1.21,706 - 123,206 - - - 500,000 - (11,500) - (11,500) - (227,472) (39,704) (299,532) (39,863) (3,098) - - - - (49,025) 32,562 4,796 38,165 -----9,77-8- 14,214,598 6,053 16,074,312 262,025 $ 11,108,042 $ 879,351 $ 14,359,283 $ (2,045,667) $ 73,485 $ 6,847 $ 97,832 $ 32,210 $ 6,157,131 $ - $ 6,157,131 $ - $ 151,974 $ - $ 287,381 $ - 45 Indian River County, Florida Statement of Fiduciary Net Position Fiduciary Funds September 30,2015 Other Postemployment Agency Benefits Trust ASSETS Cash and cash equivalents $ 10,242,685 $ - Investments, at fair value: Index funds - 7,075,339 U.S. government securities funds - 6,436,903 Primary money market fund - 1,337,914 Total assets $ 10,242,685 $ 14,850,156 LIABILITIES Due to other governments 4,493,810 - Other deposits held in escrow 5,748,875 - Total liabilities $ 10,242,685 - NET POSITION Assets held in trust for other postemployment benefits 14,850,156 Total net position $ 14,850,156 The accompanying notes are an integral part of the financial statements. 46 Indian River County, Florida Statement of Changes in Fiduciary Net Position Other Postemployment Benefits Trust Fund For the Year Ended September 30, 2015 ADDITIONS Employer contributions $ 2,977,075 Investment loss (218,173) Investment expense (3,045) Total additions 2,755,857 DEDUCTIONS Benefits payments 1,944,533 Total deductions 1,944,533 Change in net position 811,324 Net position-beginning 14,038,832 Net position- ending $ 14,850,156 The accompanying notes are an integral part of the financial statements. 47 48 Indian River County, Florida Notes To Financial Statements Year Ended September 30, 2015 Note Page Note Page 1 Summary of Significant Accounting 5 Property Tax Revenues 72 Policies 50 6 Capital Assets 73 Reporting Entity 50 7 Restricted Cash and Cash Equivalents Measurement Focus and Basis of and Investments 76 Accounting 51 8 Interfund Balances 77 Basis of Presentation 54 9 Interfund Transfers 78 Assets, Liabilities,Deferred Outflows/ 10 Due from Other Governments 79 Inflows of Resources, and Net 11 Accounts Payable 80 Position or Fund Balances 56 1.2 Long-term Liabilities 81 Cash and Cash Equivalents 56 Changes in Long-term Liabilities 81 Investments 56 Governmental Activities 82 Allowance for Doubtful Accounts 57 Annual Debt Service Payments 82 Receivables and Payables 57 Limited General Obligation Bonds 83 Inventories 57 Spring Training Facility Rev Bonds 83 Prepaid Items 57 Limited General Obligation Ref Note 86 Restricted Net Position 57 Business-type Activities 87 Capital Assets 58 Annual Debt Service Payments 87 Capitalization of Interest 59 Water and Sewer Revenue Deferred Inflows/Outflows of Refunding Note, Series 2015 88 Resources 59 Water and Sewer Revenue Pensions/Net Pension Liability 60 Refunding Bonds, Series 2009 88 Change in Accounting Principle/New Compensated Absences 89 Accounting Pronouncement 60 13 Provision for Closure Costs 90 Unearned Revenues 60 14 Pollution Remediation 91 Accrued Compensated Absences 61 15 Retirement Plan-Florida Retirement Obligation for Bond Arbitrage System 92 Rebate 61 16 Other Postemployment Benefits Plan 103 Landfill Closure Costs 61 17 Operating Leases 106 Unamortized Bond Discounts 18 Fund Balance 108 and Premiums 61 19 Fund Balance Deficit 110 Capital Contributions 61 20 Net Position 110 2 Reconciliation of Government-wide 21 Risk Management 111 and Fund Financial Statements 62 22 Commitments and Contingencies 112 3 Stewardship, Compliance and Litigation 112 Accountability 66 Contracts and Other Commitments 112 Budget and Budgetary Accounting 66 Grants 1.13 4 Cash and Cash Equivalents 67 Deposits 67 Accrued Interest 67 Investments 67 OPEB Trust Investments 71 49 Indian River County, Florida Notes To Financial Statements Year Ended September 30, 2015 NOTE 1 —SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES Indian River County, Florida, (the "County") is a political subdivision of the State pursuant to Article VIII, Section 1(a) of the Constitution of the State of Florida. Created on June 29, 1925 by an act of Legislature, separating it from St. Lucie County, the County encompasses approximately 497 square miles of land with an estimated population of 143,326. 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 l(d) created the constitutional officers and Article VIII, Section 1(e), created the :Board of County Commissioners. The financial statements of the County have been prepared in accordance with generally accepted accounting principles (GAAP) as applied to governmental units. The Governmental Accounting Standards Board (GASB) is the standard-setting body for governmental accounting and financial reporting. The 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, 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. 50 Indian River County, Florida Notes To Financial Statements Year Ended September 30, 2015 NOTE 1 —SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES—Continued A. Reporting Entity—Continued Blended Component Units Solid Waste Disposal District (SWDD) — Created pursuant to County Ordinance 87-67, the Board of County Commissioners serves as the governing body for and has operational responsibility over the SWDD. The :Board also 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 governing body for and has operational responsibility over the EMS. The Board also 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. 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. 51 Indian River County, Florida Notes To Financial Statements Year Ended September 30, 2015 NOTE 1 —SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES—Continued B. Measurement Focus and Basis of Accounting- Continued 1. Government-wide Financial Statements - Continued Amounts paid to acquire capital assets are capitalized as assets in the government-wide financial 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 activities. 2. Fund Financial Statements The underlying accounting system of the County is organized and operated on the basis of separate funds, each of which is considered to be a separate accounting entity. The operations of each fund are accounted for with a separate set of self-balancing accounts that comprise its assets, 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. Fund financial statements for the primary government's governmental, proprietary, and fiduciary funds are presented after the government-wide financial statements. These statements display information about major funds individually and nonmajor funds in the aggregate for governmental and enterprise funds. Governmental Funds Governmental fund financial statements are reported using the current financial resources measurement focus and the modified accrual basis of accounting. Revenues are recognized as soon as they are both measurable and available. Revenues are considered to be available when they are collected within the current period or soon enough thereafter to pay liabilities of the current period. For this purpose, the County considers revenues to be available if they are collected within 45 days of the end of the current fiscal period. Expenditures generally are recorded when a liability is incurred, as under accrual accounting. Franchise fees, sales taxes, gas taxes, operating and capital grants, and interest associated with the current fiscal period are all considered to be susceptible to accrual and so have been recognized as revenues of the current fiscal period. All other revenue items are considered to be measurable only when the County receives cash. 52 Indian River County, Florida Notes To Financial Statements Year Ended September 30, 2015 NOTE 1 —SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES—Continued 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 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 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 special assessment receivables are offset by deferred inflows of resources. Because of their spending measurement focus, expenditure recognition for governmental fund types excludes amounts represented by non-current 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 expended, rather than as fund assets. The issuance of long-term debt is recorded as an other financing source rather than as a fund liability. However, debt service expenditures, as well as expenditures related to compensated absences and claims and judgments, are recorded only when payment is due. Proprietary Funds The County's enterprise funds and internal service funds are proprietary funds. In the fund financial statements, proprietary funds are presented using the accrual basis of accounting. Revenues are recognized when they are earned and expenses are recognized when the related goods or services are delivered. In the fund financial statements, proprietary funds are presented using the economic resources measurement focus. This means that all assets, deferred outflows of resources, liabilities and deferred inflows of resources (whether current or non-current) associated with their activity are included on their balance sheets. Proprietary fund type operating statements present increases (revenues) and decreases (expenses) in total net position. Proprietary funds distinguish operating revenues and expenses from non-operating items. Proprietary fund operating revenues, such as charges for services and premiums charged to the County and employees under various insurance programs, result from exchange transactions associated with the principal activity of the fund. Exchange transactions are those in which each parry receives and gives up essentially equal values. Non-operating revenues, such as subsidies, taxes, and investment earnings result from nonexchange transactions or ancillary activities. Principal operating expenses include salary and benefits, cost of sales and services, claims, and insurance premiums. All revenues and expenses not meeting these definitions are reported as non-operating revenues and expenses. 53 Indian River County, Florida Notes To Financial Statements Year Ended September 30, 2015 NOTE 1 - SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES—Continued B. Measurement Focus and Basis of Accounting- Continued 2. Fund Financial Statements - 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 accounted for and reported 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. 54 Indian River County, Florida Notes To Financial Statements Year Ended September 30, 2015 NOTE 1 - SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES—Continued C. Basis of Presentation - Continued 1. Governmental Major Funds - Continued Transportation.Fund—The Transportation Fund accounts for expenditures incurred for the maintenance and repair of County roads. Financing is provided by the 5th and 6th cent gas taxes, county gas tax and transfers from the General Fund. Emergency Services District Fund — The Emergency Services District Fund accounts for the expenditures of providing fire protection and advanced life support to the County. Financing is provided by ad valorem taxes. Optional Sales Tax Fund— The Optional Sales Tax Fund accounts for revenues generated by the local. option one-cent sales tax and some capital grants that use the local option one-cent sales tax as matching funds. Monies are used for various capital projects. 2. Proprietary Major Funds Solid Waste Disposal District Fund — The Solid Waste Disposal District Fund accounts for the revenues, expenses, assets and liabilities associated with the County landfill. Golf Course Fund — The Golf Course Fund accounts for the revenues, expenses, assets and liabilities associated with the Golf Course. County Utilities Fund — The County Utilities Fund accounts for the revenues, expenses, assets and liabilities associated with the County water and sewer system. 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 Information Technology 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. 55 Indian River County, Florida Notes To Financial Statements Year Ended September 30, 2015 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, certificates of deposit, Florida PRIME Fund (formerly known as the Local Government Surplus Funds Trust Fund Investment (SBA) Fund A), the Florida Trust Day to Day 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 4-C, Investments, for further information on individual investments. 56 Indian River County, Florida Notes To Financial Statements Year Ended September 30, 2015 NOTE 1 —SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES—Continued D. Assets, Liabilities,Deferred Outflows/Inflows of Resources and Net Position or Fund Balances - Continued 3. Allowance for Doubtful Accounts The County provides an allowance for water and sewer and ambulance services accounts receivables that may become uncollectible. At September 30, 2015, the allowance for water and sewer services was $424,493 and the allowance for ambulance services was $1,116,986. No other allowances for doubtful accounts are maintained since other accounts receivable are considered collectible as reported at September 30, 2015. 4. Receivables and Payables Activities between funds that are representative of lending/borrowing arrangements outstanding at the end of the fiscal year are referred to as "due to/from other funds". Any residual balances outstanding between the governmental activities and business-type activities are reported in the government-wide financial statements as "internal balances". All receivables are shown net of allowance for doubtful accounts. Receivables in excess of 120 days comprise the trade accounts receivable allowance for doubtful accounts. 5. Inventories Inventories are valued at cost, which approximates market, using the "first-in, first-out" method of accounting, with the exception of the Golf Course 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. 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. 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 information on the restrictions can be found in Note 20. 57 Indian River County, Florida Notes To Financial Statements Year Ended September 30, 2015 NOTE 1 —SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES—Continued D. Assets, Liabilities,Deferred Outflows/Inflows of Resources and Net Position or Fund Balances - Continued 8. Capital Assets Capital assets, which include property, plant, equipment, infrastructure (e.g., roads, bridges, right-of- ways, water and sewer distribution systems, beach restoration, stormwater systems and similar items), and intangible assets (e.g. software, easements, and rights), are reported in the applicable governmental or business-type activities column in the government-wide financial statements. The County defines capital assets as assets with an initial, individual cost of$1,000 or more and an estimated useful life in excess of one year. Except for roads and bridges constructed prior to October 1, 1981, assets are recorded at historical cost. Roads and bridges constructed prior to October 1, 1981 are reported at estimated historical cost. Donated capital assets are recorded at estimated fair market value at the date of donations. Transfers of capital assets within the County are recorded at their carrying value at the time of the transfer. The costs of normal maintenance and repairs that do not add to the value of the asset nor materially extend its useful life are not capitalized. Major outlays for capital assets and improvements are capitalized as projects are constructed. Interest incurred during the construction phase of capital assets of business-type activities is included as part of the capitalized value of the assets constructed. The Board holds legal title to the capital assets used in the operations of the Board, Clerk of the Circuit Court 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 58 Indian River County, Florida Notes To Financial Statements Year Ended September 30, 2015 NOTE 1 —SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES—Continued D. Assets, Liabilities,Deferred Outflows/Inflows of Resources and Net Position or Fund Balances - Continued 9. Capitalization of Interest Interest costs related to bond issues are capitalized during the construction period. These costs are netted against applicable interest earnings on construction fund investments. During the current period, the County did not have any capitalized interest. 10. 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$1,974,749 in this category on the government-wide statement of net position. A deferred charge on 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 has one item, unavailable revenue, which arises under the modified accrual basis of accounting and is reported on the governmental funds balance sheet in the total amount of$6,896,862. The sources of the unavailable revenue are a special assessment on road paving, ambulance service billings, and state and federal grants. These amounts are deferred and recognized as an inflow of resources in the period that the amounts become available. In addition to the above two deferred items, there are deferred outflows and inflows items related to pensions as calculated in accordance with GASB Statement 68, Accounting and Financial Reporting for Pensions. These deferred outflows and inflows will be recognized as adjustments to pension expense in future reporting years. Detail on the composition of the deferred inflows and outflows related to pensions are further discussed in Note 15. 59 Indian River County, Florida Notes To Financial Statements Year Ended September 30, 2015 NOTE 1 —SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES—Continued D. Assets, Liabilities,Deferred Outflows/Inflows of Resources and Net Position or Fund Balances - Continued 11. Pensions/Net Pension Liability The County participates in both the Florida Retirement System (FRS), which operates a defined benefit and compensation plan, and the Health Insurance Subsidy Program (HIS), which is a defined benefit plan. For purposes of measuring the net pension liability, deferred outflows and inflows of resources related to pensions, pension expense, and fiduciary net position are determined on the same basis as the FRS. Benefit payments (including refunds of employee contributions) are recognized when due and payable in accordance with the benefit terms. Investments are reported at fair value. The net pension liability represents the County's proportionate share of the net pension liability of the cost-sharing pension plans in which it participates. This proportionate amount represents a share of the present value of projected benefit payments to be provided through the cost-sharing pension plan to current active and inactive employees. The benefit payments are attributable to those employees past periods of service, less the amount of the cost-sharing pension plans' fiduciary net position. See Note 15 for additional information. 12. Change in Accounting Principles/New Accounting Pronouncement As a participating employer in the FRS, the County implemented Governmental Accounting Standards Board (GASB) Statement No. 68, Accounting and Financial Reporting for Pensions. This statement requires employers participating in cost-sharing, multiple-employer defined benefit pension plans to report the employers' proportionate share of the net pension liabilities of the pension plans. The requirements of this Statement are being implemented prospectively, with the County reporting at October 1, 2014 its proportionate share of the actuarially determined liabilities for governmental activities of$36,285,228, deferred outflows of resources related to pensions of$6,763,726 and deferred inflows of resources related to pensions of$35,754,203. The net adjustment to beginning net position of the governmental activities was $65,275,705. For business-type activities, the County reported its proportionate share of the actuarially determined liabilities at October 1, 2014 of$2,572,977 deferred outflows of resources related to pensions of $391,891, and deferred inflows of resources related to pensions of$2,307,185. The net adjustment to beginning net position of the business-type activities was $4,488,271. See Note 20B for further explanation. 13. Unearned Revenues Unearned revenues represent revenues, which are available but unearned. At September 30, 2015, the total amount of unearned revenues reported on the statement of net position for the governmental activities is $505,172 and for the business-type activities is $29,673. 60 Indian River County, Florida Notes To Financial Statements Year Ended September 30, 2015 NOTE 1 —SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES—Continued D. Assets, Liabilities,Deferred Outflows/Inflows of Resources and Net Position or Fund Balances - Continued 14. Accrued Compensated Absences The County accrues accumulated unpaid vacation and sick leave when earned by the employee. The current portion is the amount estimated to be used in the following year. The non-current portion is the amount estimated to be used in subsequent fiscal years. Both the current and non-current estimated accrued compensated absences amounts for governmental funds are maintained separately and represent a reconciling item between the fund and government-wide presentations. 15. 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, 2015. 16. 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. 17. 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. 18. 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. 61 Indian River County, Florida Notes To Financial Statements Year Ended September 30, 2015 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, $1.79,084,725 differs from "net position" of governmental activities, $655,952,976, 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 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 $ 847,356,990 Accumulated depreciation ( 297,322,183) Net Total S 550.034.807 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. Balances at September 30, 2015 were: Bonds payable: Limited General Obligation Bonds, Series 2006 $ (3,545,000) Spring Training Facility Bonds, Series 2001 (7,230,000) Notes payable: Limited General Obligation Refunding (20,049,000) Deferred Amount on Refunding - Limited GO Bonds 588,058 Medicaid settlement payable (316,173) Pollution remediation payable (2,551,200) Compensated absences (10,985,483 Total $ (44,088,798) 62 Indian River County, Florida Notes To Financial Statements Year Ended September 30, 2015 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 $ 6,896,862 Internal service funds Internal service funds are used by management to charge the costs of fleet management, insurance activities, and information technology 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 S 23,390,907 Accrued interest revenues Some interest revenues are not recognized in the current period because the resources are not available; therefore, these revenues are not reported in the fund. Accrued interest revenues 70 531 Net OPEB Obli ag tion 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 914 909 Net Pension Liability The net pension liability is not reported at the governmental fund level; however, the County's proportionate share of the net pension liability, and related deferred inflows and outflows of resources, of the cost-sharing defined benefit pension plan is reported on the Statement of Net Position S (60.350.967) Elimination of interfund receivables/payables Interfund receivables and payables in the amount of $952,115 between governmental funds must be eliminated for the statement of net position. 63 Indian River County, Florida Notes To Financial Statements Year Ended September 30, 2015 NOTE 2 -RECONCILIATION OF GOVERNMENT-WIDE AND FUND FINANCIAL STATEMENTS - Continued B. Explanation of Differences Between Governmental Fund Operating Statements and the Statement of Activities The "net change in fund balances" for governmental funds, $5,669,165, differs from the "change in net position" for governmental activities, $17,386,971 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 $ 22,495,325 Depreciation expense (20,914,788) Loss on assets (264,773) Difference $ 1,31.5,764 Long-term debt transactions Payments of bond principal, bond premium, notes payable, medicaid 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. The issuance of debt is reported as an other financing source in the governmental funds, and, thus, has the effect of increasing fund balance. However, the issuance increases and 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 $ 4,180,000 Bond refunding payment to escrow agent 20,340,959 Note issuance proceeds (20,369,000) Medicaid settlement costs 158,087 Pollution remediation costs 120,600 Total $ 4,430,646 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 bond interest expense $ 252,543 Net accrued OPEB expense 119,542 Total $ 372,085 64 Indian River County, Florida Notes To Financial Statements Year Ended September 30, 2015 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 462 116 Internal service funds operating loss 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 loss S (2,059,9151 Accrued revenues Some revenues are not recognized in the current period because the resources are not available, or they have been reported in a prior period; 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 revenues $ 3,772,053 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 21 856 Pension and Retirement Contribution Expense Governmental funds report contributions in defined benefit plans as expenditures. However, in the Statement of Activities, this amount reduces future net pension liabilities and is recorded as a deferred outflow of resources. In addition, the County's share of pension expense is required to be amortized in accordance with GASB Statement No. 68 Net pension and retirement contribution expense 4 327 433 Reclassification and Eliminations The governmental funds recognize revenues in the amount of$2,806,485 for the general administrative charges to the general government, public safety, transportation, economic environment, human services, 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 $11,141,023 between governmental activities should be eliminated. Capital projects costs in the amount of $5,309,597 must be distributed to the related expenditure functions. 65 Indian River County, Florida Notes To Financial Statements Year Ended September 30, 2015 NOTE 3 - STEWARDSHIP, COMPLIANCE,AND ACCOUNTABILITY Budgets and Budgetary Accounting The County uses the following procedures in establishing the budgetary data reflected in the financial. statements: (1) The constitutional officers submit, at various times, to the Board and to certain divisions within the 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 1.29 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 1.5 of each year, the County Administrator and the Director of the Office of Management and Budget, as the Board's designated budget officer, submit to the Board a tentative budget for the ensuing fiscal year. The tentative budget includes proposed expenditures and the means of financing them. The Board then holds workshops to review the tentative budget by fund on a departmental level. (5) During September, public hearings are held pursuant to Section 200.065 of the Florida Statutes in order for the Board to receive public input on the tentative budget. At the end of the last public hearing, the Board enacts ordinances to legally adopt the budgets at the fund level. 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. Unexpected ongoing project costs may be appropriated in the new fiscal year through a budget amendment. 66 Indian River County, Florida Notes To Financial Statements Year Ended September 30, 2015 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, 2015, the carrying amount of the primary government's deposits was $36,423,253 and the bank balance was $38,874,596. 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, 2015 was $30,345. 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, 2015, accrued interest for the County's portfolio totaled $200,383. The remaining accrued interest is reflected in utilities and road paving assessments. C. Investments On April 23, 2015, the County updated its investment policy to increase the limit on certificates of deposit. On October 22, 2015, the Board of County Commissioners updated its investment policy to exclude SBA pools from the list of authorized investments, to specify money manager's performance benchmarks, and to clarify the Clerk of Circuit Court and Comptroller's (Clerk) role in bank and investment agreements. 67 Indian River County, Florida Notes To Financial Statements Year Ended September 30, 2015 NOTE 4 - CASH AND CASH EQUIVALENTS - Continued C. Investments - Continued As of September 30, 2015, the County had the following investments: Weighted Average Maturity Portfolio Credit Investment Type Fair Value In Years Percentage Risks* Fixed Rate Debt Instruments: U.S. Treasuries $ 100,045,921 0.89 34.62% N/A U.S. Agencies:*** Federal Farm Credit Bureau 19,999,962 0.81 6.92 AA+ Federal Home Loan Bank 20,521,606 1.41 7.10 AA+ Federal Home Loan Mortgage 40,960,658 1.02 14.17 AA+ Federal National Mortgage Assoc. 5,995,309 0.39 2.07 AA+ Other Fixed Rate Instruments: Certificate of Deposit-Oculina Bank 1,003,428 1.61 0.35 N/A Certificate of Deposit-TD Bank 6,021,585 1.60 2.08 N/A Certificate of Deposit-National Bank of Commerce 6,014,005 0.61 2.08 N/A Certificate of Deposit-Harbor Community 253,287 0.80 0.09 N/A Certificate of Deposit-Harbor Community 258,040 0.32 0.09 N/A Certificate of Deposit-Harbor Community 3,042,693 0.35 1.05 N/A Other Market Rate Investments: Florida PRIME (Formerly Fund A) 1,018 0.08 - AAAm Florida Local Government AAAf and Investment Trust Fund 11,984,722 0.08 4.15 S-1** Florida Trust Day to Day Fund 25,326 0.08 0.01 AAAm Regions Bank Money Market 21,1.44,688 0.08 7.32 N/A TD Bank Money Market 20,079,162 0.08 6.95 N/A Harbor Community Bank Money Market 1,658,055 0.08 0.57 N/A Florida Community Bank Money Market 1,508,521 0.08 0.52 N/A BankUnited Money Market 24,376,193 0.08 8.43 N/A W&S Sinking Fund Reserve:----- U.S. eserve:U.S. Treasuries 4,1.04,192 1.24 1.43 N/A Total Fair Value $ 288,998,371 100% Weighted Average Maturity of Investments 0.71 * Ratings based upon Standard and Poor's ** AAAf credit quality, S-] .Market Volatility *** The weighted calculation considers the investments are carried until full maturity (i.e. call dates are not considered). 68 Indian River County, Florida Notes To Financial Statements Year Ended September 30, 2015 NOTE 4 - CASH AND CASH EQUIVALENTS - Continued C. Investments - Continued Florida PRIME (formerly known as the Local Government Surplus Funds Trust Investment (SBA) Fund A) is a money market fund classified as a"2a-7 like fund" using the SEC investment requirements for 2a-7 funds. The fund was established by Florida Statute 218.405 and is administered by the Florida State Board of Administration. 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 and Clerk follow this policy. The Tax Collector's policy is to limit maturities to 24 months or less. The Clerk's policy is to limit maturities to three years or less and maintain at least 50% of the portfolio in readily available funds. 69 Indian River County, Florida Notes To Financial Statements Year Ended September 30, 2015 NOTE 4 - CASH AND CASH EQUIVALENTS - Continued C. Investments- Continued Credit Risk Florida Statutes Section 218.415 limits investments to the following: 1. Direct obligations of the United States Treasury; 2. Florida PRIME(formerly known as Fund A); 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; 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. Concentration Risk The Indian River County Board of County Commissioners, the Clerk of the Circuit Court and Comptroller, and the Tax Collector follow their own investment policies. The policies have established asset allocation and issuer limits to reduce concentration of credit risk. Their investments are stated at fair value. 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 $6 million of the portfolio may be placed in certificates of deposit with any one financial institution. No more than 10% of the portfolio may be placed in any one money market fund, mutual fund, or intergovernmental investment pool. 70 Indian River County, Florida Notes To Financial Statements Year Ended September 30, 2015 NOTE 4 - CASH AND CASH EQUIVALENTS - Continued C. Investments - Continued Concentration Risk- Continued 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 95% Securities & Exchange Commission Money Funds 25% Bank Super NOW Accounts 95% Bank Repo Agreements 50% United States Government Agencies 25% The Clerk's cash and investment policy limits portfolio composition to no more than 10% or $1 million in certificates of deposit with a qualified public depository with any one financial institution. The Clerk's cash and investment policy was updated in April 2014 to limit no more than 40% of the portfolio in any money market 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 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, 2015, 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 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 (OPEB Trust), 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. 71. Indian River County, Florida Notes To Financial Statements Year Ended September 30, 2015 NOTE 4 - CASH AND CASH EQUIVALENTS- Continued D. OPEB Trust Investments - Continued The County approved a separate investment policy for the OPEB Trust assets on February 3, 2009 (last amended on November 5, 201.3). The County adopted a broadly diversified portfolio composition consisting of equity, debt, and cash and cash equivalents. Asset allocations are divided between short- term and long-term investments. Short-term asset allocations include cash and cash equivalents with maturities of 180 days or less. Long-term asset allocations range from 0-60% for equities, 0-60% for fixed income securities, and 0-100% for cash and cash equivalents. The contribution of$2.98 million for the year ended September 30, 2015. was invested in the various funds listed below. As of September 30, 2015, the OPEB Trust had the following investments: Weighted Average Maturity Portfolio Credit Investment Type Fair Value in Years Percentage Risks* Short-Term Portion: Fidelity Treasury Money Market $ 4,862 0.11 0.03% AAAm LoN-Term Portion: Vanguard 500 Index 3,1.61,492 N/A 21.29 N/A Vanguard All World Ex-US 2,839,805 N/A 19.12 N/A Vanguard Mid Cap Index 729,1.29 N/A 4.91 N/A Vanguard Small Cap Index 344,913 N/A 2.32 N/A Vanguard Short-Term Treasury 4,653,186 2.40 31.33 N/A Vanguard Intermediate Treasury 1,573,207 5.70 10.59 N/A Vanguard Prime Money Market 1,337,91.4 0.12 9.02 N/A Vanguard Federal Money Market 205,648 0.13 1.39 N/A Total Fair Value $ 14,850,156 100% * 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 2014-2015 fiscal year were levied in October 2014. 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. 72 Indian River County, Florida Notes To Financial Statements Year Ended September 30, 2015 NOTE 6 - CAPITAL ASSETS A. Governmental Activities Primary Government Beginning Ending Governmental activities: Balance Additions Deletions Balance Capital assets,not being depreciated: Land $ 133,274,798$ 388,213$ -$ 133,663,011 Construction in progress 43,462,054 19,158,201 (12,276,920) 50,343,335 Right-of-way 56,840,008 559,028 - 57,399,036 Intangibles 995,554 87,149 - 1,082,703 Infrastructure 3,575,067 - - 3,575,067 Total capital assets,not being depreciated 238,147,481 20,192,591 (1.2,276,920) 246,063,1.52 Capital assets,being depreciated: Buildings and improvements 211,079,877 2,275,536 (518,585) 212,836,828 Equipment 58,864,775 5,931,832 (2,755,856) 62,040,751 Intangibles 4,072,701 216,959 (20,647) 4,269,013 Infrastructure 318,510,419 6,349,215 (168,720) 324,690,914 Total capital assets being depreciated 592,527 772 14,773,542 �3 463,808 603,837,506 _ Less accumulated depreciation for: Buildings and improvements (59,700,365) (5,847,905) 496,250 (65,052,020) Equipment (46,179,433) (4,642,869) 2,617,333 (48,204,969) Intangibles (2,629,921) (366,182) 20,647 (2,975,456) Infrastructure (173,061,953) (10,183,030) 26,714 (183,218,269) Total accumulated depreciation (281,571,672) (21,039,986) 3,160,944 (299,450,714) Total capital assets,being depreciated,net 310,956,100X6,266,444 30( 2,864) 304,386,792 Governmental activities capital assets,net $ 549,103,581$ 13,926,147$ (12,579,784)$ 550,449,944 73 Indian River County, Florida Notes To Financial Statements Year Ended September 30, 2015 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 $ 2,747,303 Public safety 4,013,891 Physical environment 613,608 Transportation 6,527,142 Economic environment 298 Human service 123,870 Culture/recreation 6,595,961 Court related 292,715 Capital assets held by the government's internal service funds are charged to the various functions based on their usage of the assets 125,198 Total depreciation expense—governmental activities $ 21,039,986 74 Indian River County, Florida Notes To Financial Statements Year Ended September 30, 2015 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,Improvements to Land $ 27,492,902$ -$ -$ 27,492,902 Intangibles 1,496,780 164,233 - 1,661,01.3 Construction in progress 11,319,754 1,888,200 (11,352,013) 1,855,941 Total capital assets,not being depreciated 40,309,436 2,052,433 (11,352,013) 31,009,856 Capital assets,being depreciated: Buildings,distribution systems,& improvements 429,647,450 15,639,844 (1,010,120) 444,277,174 Intangibles 1,084,879 62,825 - 1,147,704 Equipment 14,965,608 923,036 Q11016� 15,857,628 Total capital assets,being depreciated 445,697,937 __16_,625_,7_0_5 (1,041,136) 461,282,506 Less accumulated depreciation for: Buildings,distribution systems,& improvements (223,898,124) (15,369,097) 1,010,002 (238,257,219) Intangibles (648,253) (116,238) - (764,491) Equipment (12,612,715) (707,454) 29,339 (13,290,830) Total accumulated depreciation (237,159,092) (16,192,789) 1,039,341 (252,312,540) Total capital assets,being depreciated,net 208,538,845 432,916 (1,795) 208,969,966 ypcapital _ 2 $ 2,485,349$_ 808)$ Business-type activities assets net —------24 ,8 848, 81 _ ______ __ 11,353,_ _____ 239,979,822 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 $ 1,166,133 Golf Course 152,698 County Utilities 14,854,818 County Building 19,140 Total depreciation expense—business-type activities $ 16,192,789 75 Indian River County, Florida Notes To Financial Statements Year Ended September 30, 2015 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 County District Utilities Total Sinking funds $ - $ 4,435,459 $ 4,435,459 Renewal and replacement 3,152,731 3,485,928 6,638,659 Customer deposits 135,126 2,930,591 3,065,717 Capital construction - 22,621,868 22,621,868 Closure and maintenance costs 1.2,009,736 - 12,009,736 Total $ 15,297,593 $ 33,473,846 $ 48,771,439 Cash totaling $5,737,623 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 and notes payable. 76 Indian River County, Florida Notes To Financial Statements Year Ended September 30, 2015 NOTE 8 -INTERFUND BALANCES Interfund balances at September 30, 2015, consisted of the following: Receivable Fund Payable Fund Amount General Fund Nonmajor Governmental Funds $ 405,000 General Fund Golf Course Enterprise Fund 799,593 $ 1,204,593 In October 2010, the General Fund loaned $333,050 to the Golf Course Fund to purchase new golf carts. In September 2013, the General Fund loaned $1,565,000 to the Golf Course Fund to pay off the Series 2003 Recreational Revenue Refunding Bonds. In September 2014, the General Fund loaned $630,000 to the Golf Course Fund for a new irrigation system. In September 2015, the General Fund loaned the Golf Course Fund $135,000 as a short-term cash loan to be repaid within the next twelve months. 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 2016. The remaining amount due from the Golf Course Fund is reported as an interfund advance. The amounts due from the Nonmajor Governmental Funds represent short-term cash loans that will be repaid within the next twelve months. Receivable Fund Payable Fund Amount Major Governmental Funds: Emergency Services District Fund General Fund $ 260,235 Optional Sales Tax Fund General Fund 16,456 $ 276,691 Major Enterprise Fund: Solid Waste Disposal District Fund General Fund $ 110,363 Nonmajor Governmental Funds: Land Acquisition Bonds Fund General Fund $ 59,608 Street Lighting Districts Fund General Fund 2,565 Clerk Special Revenue Fund General Fund 94,913 Vero Lake Estates Fund General Fund 2,962 East Gifford Stormwater Fund General Fund 13 Total Nonmajor Governmental Funds $ 160,061 Total $ 547,115 Amounts due from the General Fund represent excess fees and payments of the constitutional officers remitted to various funds subsequent to September 30, 2015. 77 Indian River County, Florida Notes To Financial Statements Year Ended September 30, 2015 NOTE 8 -INTERFUND BALANCES - Continued Interfund advances at September 30, 2015, consisted of the following: Receivable Fund Payable Fund Amount General Fund Golf Course Fund S 212,500 This amount is considered a long-term advance between major funds expected to be paid over the course of several years. This amount has been presented as nonspendable on the General Fund balance sheet. NOTE 9 -INTERFUND TRANSFERS Interfund transfers for the year ended September 30, 2015, consisted of the following: Transfers in: Nomnajor Internal General Impact Fees Transportation Governmental Enterprise Service Transfers Out: Fund Fund Fund Funds Funds Funds Total General Fund $ $ $ 8,573,172 $ 121,763 $ $ 37,516 $ 8,732,451 Impact Fees Fund - 54,697 24,990 - 79,687 Transportation Fund - 75,990 75,000 150,990 Emergency Services District Fund 460,942 - - - 460,942 Optional Sales Tax Fund 679,720 773,780 1,453,500 Nonmajor Governmental Funds 326,832 57,075 - 93,042 - - 476,949 Total $ 1,467,494 $ 57,075 $ 8,573,172 $ 1,043,282 $ 100,980 $ 112,516 $ 11,354,519 Transfers are used for the following purposes: 1) use unrestricted general fund revenues to finance transportation activities which are accounted for in a special revenue fund, 2) use unrestricted general fund revenues for beach restoration activities which must be accounted for in another fund, 3) use unrestricted general fund revenues to offset a portion of salaries and benefits expenses for an employee accounted for in the health insurance fund, 4) use impact fee fund revenues to offset portion of landfill improvements, 5) use unrestricted stormwater revenues to offset Egret Marsh employee costs accounted for in the utilities fund, 6) use transportation fund revenues to offset vehicle maintenance costs accounted for in the fleet internal service fund, 7) to use capital project fund revenues for improvements to the Historic Dodgertown facility and County Jail, 8) provide matching funds for grants, 9) move revenues from the fund that state law requires to collect them to the fund that state law requires to expend them, and 10) to use nonmajor governmental fund revenues to offset prior year expenditures related to a boat ramp project in the impact fees fund. 78 Indian River County, Florida Notes To Financial Statements Year Ended September 30, 2015 NOTE 10—DUE FROM OTHER GOVERNMENTS Governmental Funds On. November 18, 2008, the County entered into a locally funded agreement with the Florida Department of Transportation (FDOT)to advance the six-laning of State Road 60 from 82nd Avenue to 1-95 (Segment Two). The agreement obligated the County 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 quarterly installments over a four-year period which began in July 2011. Repayments to the County 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 9/30/2015 (13,986,779) Balance Due from FDOT SR60 Agreement 442,975 Additional Funds Due from other governments 2,472,546 Total Due from other governments $ 2,915,521 79 Indian River County, Florida Notes To Financial Statements Year Ended September 30, 2015 NOTE 11 —ACCOUNTS PAYABLE Payables Payables at September 30, 2015,. were as follows: Salaries and Total Governmental Activities: Vendors Benefits Payables General $ 1,417,246 $ 2,125,350 $ 3,542,596 Impact Fees 141,654 2,789 144,443 Secondary Roads Construction 729,282 8,065 737,347 Transportation 172,325 212,404 384,729 Emergency Services 247,104 623,096 870,200 Optional Sales Tax 709,606 - 709,606 Other governmental 641,644 82,732 724,376 Total Governmental Activities $ 4,058,861 $ 3,054,436 $ 7,113,297 Business-Type Activities: Payable from current assets: Solid Waste $ 1,074,523 $ 17,660 $ 1,092,183 Golf Course 29,104 13,111 42,215 Utilities 1,048,775 218,802 1,267,577 Building 33,041 45,937 78,978 Payable from restricted assets: Utilities 7,412 - 7,412 Total Business-Type Activities $ 2,192,855 $ 295,510 $ 2,488,365 Included in salaries and benefits payable is a liability to the Florida Retirement System (FRS) for pension contributions due. The amounts due to FRS at September 30, 2015 are $170,204 for governmental activities and$1.9,289 for business-type activities. The County has not engaged in any short-term debt activity during fiscal year 2015. other than that listed in Note 9. Due To Other Governments—Governmental Activities On August 21, 2012, the County approved a 5-year payment plan agreement with the State of Florida to pay back $790,434 in disputed Medicaid billings. Monthly payments began on October 5, 2012.. The County recorded the repayment agreement as a liability, Due to Other Governments, in the government- wide Statement of Net Position; and at September 30, 2015, the amount due to the State of Florida is $316,173. 80 Indian River County, Florida Notes To Financial Statements Year Ended September 30, 2015 NOTE 12 -LONG-TERM LIABILITIES A. Changes in Long-Term Liabilities Long-term liability activity for the year ended September 30, 2015,. was as follows: Due Beginning Ending Within Balance Additions Retirements Balance One Year Governmental Activities: Bonds payable: Limited General Obligation Bonds- $ 26,010,000 $ - $ 22,465,000 $ 3,545,000 $ 3,545,000 Series 2006 Spring Training Facility Revenue Bonds- Series 2001 7,700,000 - 470,000 7,230,000 495,000 Subtotal 33,710,000 - 22,935,000 10,775,000 4,040,000 Add:Unamortized bonds premium 629,265 - 629,265 - - Total bonds payable 34,339,265 - 23,564,265 10,775,000 4,040,000 Notes payable: Limited General Obligation Refunding - 20,369,000 320,000 20,049,000 343,000 Other liabilities: Pollution remediation 2,671,800 - 120,600 2,551,200 104,453 Claims payable 8,226,545 17,188,927 17,237,952 8,177,520 3,289,891 Due to other governments-Medicaid 474,260 - 158,087 316,173 158,087 Compensated absences 10,628,620 6,575,611 6,103,717 11,100,514 5,823,510 Total notes payable and other liabilities 22,001,225 44,133,538 23,940,356 42,194,407 9,718,941 Governmental activities long-term liabilities $ 56,340,490 $ 44,133,538 $ 47,504,621 $ 52,969,407 $ 13,758,941 Business-type Activities: Bonds payable: Water&Sewer Refunding Revenue Bonds- Series 2005 $ 15,875,000 $ - $ 15,875,000 $ - $ - Series 2009 21,340,000 - 1,815,000 19,525,000 1,905,000 Subtotal 37,215,000 - 17,690,000 19,525,000 1,905,000 Add:Unamortized bonds premium 2,218,889 - 662,655 1,556,234 - Totalbonds payable 39,433,889 - 18,352,655 21,081,234 1,905,000 Notes payable: Water&Sewer Revenue Refunding - 7,171,000 - 7,171,000 973,000 Other liabilities: Landfill closure and maintenance costs 11,509,736 500,000 - 12,009,736 4,630,451 Pollution remediation 11,500 - 11,500 - - Compensated absences 853,557 ---753- 53227 715,062 891,722 642,659 Total notes payable and other liabilities 12,374,793 8,424,227 726,562 20,072,458 6,246,110 Business-type activities long-term liabilities $ 51,808,682 $ 8,424,227 $ 19,079,217 $ 41,153,692 $ 8,151,110 81 Indian River County, Florida Notes To Financial Statements Year Ended September 30, 2015 NOTE 12 -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, 2015, are as follows: Fiscal Year Limited General Spring Training Facility Limited General Ending Obligation Bonds Revenue Bonds Obligation Note September 30 Series 2006 Series 2001 Series 2015 Principal Interest Principal Interest Principal Interest ---------- -------- — ------- - ------- ------- ------- 2016 $ 3,545,000 $ 70,900 $ 495,000 $ 370,037 $ 343,000 $ 332,813 2017 - - 520,000 344,050 4,053,000 327,119 2018 - - 550,000 316,750 4,158,000 259,840 2019 - - 585,000 287,875 4,227,000 190,817 2020 - - 615,000 257,163 4,298,000 120,649 2021-2025 - - 1,970,000 893,125 2,970,000 49,302 2026-2030 - - 2,060,000 427,750 - - 2031 - - 435,000 21,750 - Total 3,545,000 70,900 - 7,230,000 2,918,500 20,049,000 1,280,540 Less: Current portion 3,545,000 - 495,000 - 343,000 Total $ - $ 70,900 $ 6,735,000 $ 2,918,500 $ 19,706,000 $ 1,280,540 82 Indian River County, Florida Notes To Financial Statements Year Ended September 30, 2015 NOTE 12 -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 the sole source of ad valorem taxes not exceeding % 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. The total tax revenue received was $4,795,927 of which 100% is pledged for payment of this bond and the refunding 2015 series Note. Total principal and interest paid on this bond was $4,148,006 and represents 86% of total pledged revenue. Bonds Issued-At September 30, 2015, Limited General Obligation Bonds consisted of the following: Interest Outstanding at Rates and September 30, Description Date Matures_ Issue 2015 Limited General Obligation 4.00%-5.00% Bonds, Series 2006 1/1 and 7/1 2016 $ 48,600,000 $ 3,545,000 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 par, together with accrued interest to the redemption date. On April 9, 2015, all eligible outstanding bonds ($19,075,000) were called early and placed in an escrow account held by Regions Bank. The July 1, 2015 and 2016 principal payments ($6,935,000) were not included in the redemption. The $19,075,000 was refunded by a Regions Bank Note discussed in further detail later in this note. Spring; TrainingFacility Revenue Bonds Purpose - On August 15, 2001, the County issued $16,810,000 of Spring Training Facility Revenue Bonds, Series 2001. The Series 2001 bonds are being issued by the County to provide funds, together with other available funds, to (1) finance a portion of the cost of acquisition and expansion of a spring training facility currently known as "Historic 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. 83 Indian River County, Florida Notes To Financial Statements Year Ended September 30, 2015 NOTE 12 -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 Statutes; and 2. The Fourth Cent Tourist Development Tax levied by the County in Ordinance No. 2000-029, enacted pursuant to Section 125.0104(3)(1), Florida Statutes; and 3. Eighty-six percent (86%) of the Local Government Half-Cent Sales Tax distributed to the County, pursuant to Chapter 218, Part VI, Florida Statutes. The foregoing are collectively referred to herein as the "pledged revenues". These revenue streams are pledged for the remaining term of the bonds and are listed on Schedule 25 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 $852,375 represent nine percent of total pledged revenues. All three revenue sources totaled $8,535,683 for the current fiscal year. The County applied 100% of the state subsidy, 62% of the Fourth-Cent Tourist Tax, and none of the Half-Cent Sales Tax to the debt service payments. The total principal and interest remaining to be paid on the bonds is $10,148,500. Bonds Issued- At September 30,2015, Spring Training Facility Revenue Bonds consisted of the following: Interest Outstanding at Rates and September 30, Description Date Maturity Issue 2015 Spring Training Facility Revenue 3.30%-5.25% Bonds, Series 2001 4/1 and 10/1 2031 $ 16,810,000 $ 7,230,000 84 Indian River County, Florida Notes To Financial Statements Year Ended September 30, 2015 NOTE 12 -LONG-TERM LIABILITIES - Continued B. Primary Government- Continued Spring TrainingFacility Revenue Bonds - Continued Optional Redemption - The Series 2001 bonds maturing on or after April 1, 2012, 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. Remaining 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, 2017. --------------------------------------------Date---------------------- Principal Amount April 1, 2016 $ 495,000 April 1, 2017 520,000 Term Bonds due April 1, 2021 Date Principal.Amount April 1, 2018 $ 550,000 April 1, 2019 585,000 April 1, 2020 615,000 April 1, 2021 650,000 Term Bonds due April 1, 2027 Date Principal Amount April 1, 2022 $ 305,000 April 1, 2023 320,000 April 1, 2024 340,000 April 1, 2025 355,000 April 1, 2026 375,000 April 1, 2027 390,000 Term Bonds due April 1, 2031 Date _____ --Principal-Amount April 1, 2028 $ 410,000 April 1, 2029 430,000 April 1, 2030 455,000 April 1, 2031 435,000 85 Indian River County, Florida Notes To Financial Statements Year Ended September 30, 2015 NOTE 12 -LONG-TERM LIABILITIES - Continued B. Primary Government- Continued Limited General Obligation Refunding Note, Series 2015 Purpose - On April 7, 2015, the County voted to redeem $19,075,000 of outstanding 2006 Limited General Obligation Bonds with a 7 year note from Regions Capital Advantage, Inc. The refunding ultimately saved the County $1.2 million over the 7 year remaining life of the bonds. The initial commitment of the bonds and the subsequent note refunding is explained in the Limited General Obligation Bonds within the purpose section. The aggregate difference in debt service between the 2015 note ($28,959,008) and the 2006 bonds ($30,315,331) was $1,356,323. These amounts include the 7/1/2015 and 7/1/2016 principal and interest payments which were excluded in the refunding. The net economic gain was $636,694 and is amortized over the life (72 months) of the new debt. The unamortized balance of$588,058 is reflected as a deferred outflow of resources on the Statement of Net Position. This refinancing lowered the annual debt service by $150,000. Pledge of revenues — The principal and interest on the bonds are payable from the sole source of ad valorem taxes not exceeding 1/2 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. The total tax revenue received was $4,795,927 of which 100% is pledged for payment of this note and the 2006 bond. Total principal and interest paid on this note was $397,017 and represents 8% of total pledged revenue. Maturity and Interest Rate - Interest payments are made semiannually beginning July 1, 2015 through July 1, 2021. Annual principal payments begin July 1, 2015 and end July 1, 2021. The interest rate is fixed at 1.66%. The note may be paid early without a prepayment penalty. 86 Indian River County, Florida Notes To Financial Statements Year Ended September 30, 2015 NOTE 12 -LONG-TERM LIABILITIES - Continued B. Primary Government- Continued Business-type Activities Annual Debt Service Payments—Business-type Activities The annual debt service payments for bonds outstanding at September 30, 2015 are as follows: Fiscal Year Water and Sewer Water and Sewer Ending Revenue Refunding Revenue Refunding September 30 Note Series 2015. Bonds Series 2009 Principal---- ---------Interest - -- Principal Interest --- — _ .........------- 2016 $ 973,000 $ 119,636 $ 1,905,000 $ 976,250 2017 992,000 102,267 2,000,000 881,000 2018 1,007,000 85,899 2,100,000 781,000 2019 1,025,000 69,284 2,205,000 676,000 2020 1,042,000 52,371 2,31.5,000 565,750 2021-2022 2,132,000 52,899 9,000,000 1,046,500 Total 7,171,000 482,356 19,525,000 4,926,500 Less: Current portion 973,000 - 1,905,000 - Add: Unamortized bond premium - - 1,556,234 - Total $ 6,1.98,000 $ 482,356 $ 19,176,234 $ 4,926,500 87 Indian River County, Florida Notes To Financial Statements Year Ended September 30, 2015 NOTE 12 -LONG-TERM LIABILITIES - Continued B. Primary Government- Continued Water and Sewer Revenue Refunding Note Series 2015 Purpose - On August 18, 2015, the County voted to early call all of the outstanding Water and Sewer Revenue Refunding 2005 Bonds. The County paid down 50% of the debt ($7,100,000) with cash and refinanced the remaining 50% ($7,105,000) with a 7 year note. The total amount borrowed included the cost of issuance and accrued interest totaling $66,000, for a grand total of$7,171,000. The aggregate difference in debt service between the Series 2005 bonds ($18,866,875) and the Series 2015 note ($7,653,356), cash contribution and September 1, 2016 principal and interest payment ($9,162,642) is $2,050,877. The net economic gain was $583,991; which included the refinancing, accrued interest, and cash contribution. This lowered the annual debt service by $1.2 million. The net economic gain is amortized over the 7 year life of the note. The unamortized balance of the deferred amount on the refunding at September 30, 2015 is $577,038 and is reflected as a deferred outflow of resources on the Statement of Net Position. Pledge of Revenues — The note is collateralized, for the remaining term of the note, by a pledge of all net revenues derived from the operation of the system, certain surcharges, and special assessments. Annual principal and interest payments of$2,430,867 included principal and interest on the 2005 Water and Sewer Bonds and interest only on the 2015 note. This amount represents approximately seventeen percent of net revenues of$14,016,407 of the utility system. The total principal and interest remaining to be paid on the 2015 note is $7,653,356. Refer to Schedule 14 in the statistical section for further detail. Rate Covenant — Net revenues shall be sufficient to pay 1.00% of reserve and 120% of current year principal and interest requirements. Maturity and Interest Rate - Interest payments are made semiannually beginning September 1, 2016 through September 1, 2022. Annual principal payments begin September 1, 2016 and end September 1, 2022. The interest rate is fixed at 1.65%. Note may be paid early without any prepayment penalty. 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. The aggregate difference in debt service between the Series 1.993A ($80,434,41.5) and Series 2009 ($78,755,772) is $1,678,643. The net economic gain, which lowered average annual debt service by $1.26,000, 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, 2015 is $809,653 and is reflected as a deferred outflow of resources on the Statement of Net Position. 88 Indian River County, Florida Notes To Financial Statements Year Ended September 30, 2015 NOTE 12 -LONG-TERM LIABILITIES - Continued B. Primary Government- Continued Water and Sewer Revenue Refunding Bonds, Series 2009 -Continued Pledge of Revenues — The revenue bonds are collateralized, for the remaining term of the bonds, by a pledge of all net revenues derived from the operation of the system, certain surcharges, and special assessments. The principal and interest payments of $2,882,000 represent approximately twenty percent of net revenues of$14,243,879 of the utility system. Refer to Schedule 14 in the statistical section for further detail. The total principal and interest remaining to be paid on the bonds is $24,451,500. Rate Covenant—Net revenues shall be sufficient to pay 1.00% of the reserve account requirement and 120% of the current year's principal and interest payment. Bonds Issued- At September 30, 2015, the revenue bonds consisted of the following: Interest Outstanding at Rates and September 30, Description Date Maturity Issue 2015 Water and Sewer 4-5% Revenue Refunding Bonds, 3/1 and 9/1 2024 $ 26,370,000 $ 1.9,525,000 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 73 percent, and the Transportation and Emergency Services District funds normally liquidate 7 percent and 18 percent, respectively. The remaining 2 percent is liquidated by other governmental and internal service funds. 89 Indian River County, Florida Notes To Financial Statements Year Ended September 30, 2015 NOTE 13 -PROVISION FOR CLOSURE COSTS Current regulations of the U.S. Environmental Protection Agency (EPA) and the Florida Department of Environmental Protection (FDEP) require the Solid Waste Disposal District (SWDD) to place a final cover on closed landfill areas, and to maintain those areas for up to thirty years after closure. The SWDD annually obtains updated and revised estimates of total future closure and post-closure costs from its consulting engineers. The SWDD recognizes the expenses associated with the final closure and post-closure maintenance of the landfill areas over the active life of those areas. The provision for closure costs reported in the financial statements as operating expense represents the portion of these estimated future outlays which are allocable to the current year based on the amount of capacity used. The total unrecognized closure and post-closure costs are approximately $2.8 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: Capacity Estimated Used Closing Amount Closure Costs Class I - Segments I and II 68% 2026 $ 7,701,947 Construction and Demolition- Cell I 90% 2027 1,174,866 Post-closure Costs Class I - Segments I and II N/A N/A 2,938,435 Construction and Demolition- Cell I N/A N/A 1.94,488 Total account balance at 9/30/1.5: $ 12,009,736 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, 2015, $11,984,722 was on deposit at the Florida Local Government Investment Trust and $25,014 was on deposit in the County's Operating account. 90 Indian River County, Florida Notes To Financial Statements Year Ended September 30, 2015 NOTE 13 -PROVISION FOR CLOSURE COSTS - Continued A summary of changes in the landfill closure liability account is as follows: Balance Balance -------------10/1/2014-------- ..............Deposits , _Withdrawals _09/30/15 Closure and long-term care costs $ 11,509,736 500,000 12,009,736 Of the $12,009,736 liability for closure and long-term care costs, management estimates that $4,630,451 will be due and payable within one year. NOTE 14—POLLUTION REMEDIATION In accordance with GASB Statement 49, Accounting and Financial Reporting for Pollution Remediation Obligations, a consultant evaluated two 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 two sites requiring the County (using the consultant's services) to attempt to accrue a liability for pollution remediation. The liability totaled $2,551,200 at September 30, 2015 for the two 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 estimated year end liability is $2,530,000 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 $21,200 and will be paid from the General Fund. Total Governmental Activities liability: 2 551 200 91 Indian River County, Florida Notes To Financial Statements Year Ended September 30, 2015 NOTE 15 -RETIREMENT PLAN - Florida Retirement System (FRS) General Information: All of the County's employees participate in the Florida Retirement System (FRS). As provided by Chapters 121 and 112, Florida Statutes, the FRS provides two cost sharing, multiple-employer defined benefit plans administered by the Florida Department of Management Services, Division of Retirement, including the FRS Pension Plan ("Pension Plan") and the Retiree Health. Insurance Subsidy ("HIS Plan"). Under Section 1.21.4501, Florida Statutes, the FRS also provides a defined contribution plan ("Investment Plan") alternative to the FRS Pension Plan, which is administered by the State Board of Administration ("SBA"). As a general rule, membership in the FRS is compulsory for all employees working in a county, state university, community college, or a participating city or special district within the State of Florida. The FRS provides retirement and disability benefits, annual cost-of-living adjustments, and death benefits to plan members and beneficiaries. Benefits are established by Chapter 1.21, Florida Statutes, and Chapter 60S, Florida Administrative Code. Amendments to the law can be made only by an act of the Florida State Legislature. The State of Florida annually issues a publicly available financial report that includes financial statements and required supplementary information for the FRS. The latest available report may be obtained by writing to the State of Florida Division of Retirement, Department of Management Services, P.O. Box 9000, Tallahassee, Florida 32315-9000, or from the web site: www.dms.myflorida.com/workforce_operations/retirement/publications. Pension Plan Plan Description: The Pension Plan is a cost-sharing multiple-employer defined benefit pension plan, with a Deferred Retirement Option Program("DROP") for eligible employees. Benefits Provided: Benefits under the Pension Plan are computed on the basis of age, average final compensation, and service credit. For Pension Plan members enrolled before July 1, 2011, Regular Class members who retire at or after age 62 with at least six years of credited service or 30 years of service regardless of age are entitled to a retirement benefit payable monthly for life, equal to 1.6% of their final average compensation based on the five highest years of salary for each year of credited service. Vested members with less than 30 years of service may retire before age 62 and receive reduced retirement benefits. Special Risk Administrative Support class members who retire at or after age 55 with at least six years of credited service or 25 years of service regardless of age are entitled to a retirement benefit payable monthly for life, equal to 1.6% of their final average compensation based on the five highest years of salary, for each year of credited service. Special Risk class members (sworn law enforcement officers, firefighters, and correctional officers) who retire at or after age 55 with at least six years of credited service, or with 25 years of service regardless of age, are entitled to a retirement benefit payable monthly for life equal to 3.0% of their final average compensation based on the five highest years of salary for each year of credited service. 92 Indian River County, Florida Notes To Financial Statements Year Ended September 30, 2015 NOTE 15 -RETIREMENT PLAN - Florida Retirement System (FRS) - Continued Pension Plan- Continued Benefits Provided, Continued: Senior Management Service class members who retire at or after age 62 with at least six years of credited service or 30 years of service regardless of age are entitled to a retirement benefit payable monthly for life, equal to 2.0% of their final average compensation based on the five highest years of salary for each year of credited service. Elected Officers' class members who retire at or after age 62 with at least six years of credited service or 30 years of service regardless of age are entitled to a retirement benefit payable monthly for life, equal to 3.0% (3.33% for judges and justices) of their final average compensation based on the five highest years of salary for each year of credited service. For Plan members enrolled on or after July 1, 2011, the vesting requirement is extended to eight years of credited service for all these members and increasing normal retirement to age 65 or 33 years of service regardless of age for Regular, Senior Management Service, and Elected Officers' class members, and to age 60 or 30 years of service regardless of age for Special Risk and Special Risk Administrative Support class members. Also, the final average compensation for all these members will be based on the eight highest years of salary. As provided in Section 121.1.01, Florida Statutes, if the member is initially enrolled in the Pension. Plan before July 1, 2011 and all service credit was accrued before July 1, 2011, the annual cost-of-living adjustment is three percent per year. If the member is initially enrolled before July 1, 2011 and has service credit on or after July 1, 2011, there is an individually calculated cost-of-living adjustment. The annual cost-of-living adjustment is proportion of three percent determined by dividing the sum of the pre-July 2011 service credit by the total service credit at retirement multiplied by three percent. Plan members initially enrolled on or after July 1, 2011, will not have a cost-of-living adjustment after retirement. In addition to the above benefits, the DROP program allows eligible members to defer receipt of monthly retirement benefit payments while continuing employment with a FRS employer for a period not to exceed 60 months after electing to participate. Deferred monthly benefits are held in the FRS Trust Fund and accrue interest. There are no required contributions by DROP participants. Contributions: The State of Florida establishes contribution rates for participating employers and employees in section 121.71 Florida Statutes. 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, 2015 were: regular class 7.26%, special risk 22.04%, special risk administrative support 3295%, senior management 21.43%, DROP 12.88%, and elected official class 42.27%. Included in these rates is a health insurance subsidy of 1.66%. Employer contributions to the FRS are based on a percentage of covered payroll that has been actuarially determined as an amount, when combined with the 3% employee contributions, is expected to finance the cost of benefits earned by employees during the year with an additional amount to finance any unfunded accrued liability. 93 Indian River County, Florida Notes To Financial Statements Year Ended September 30, 2015 NOTE 15 -RETIREMENT PLAN - Florida Retirement System (FRS) - Continued Pension Plan- Continued The County's contribution to FRS under the Pension and Investment Plans for the year ended September 30, 2015, was $7,503,166. Employee contributions for September 30, 2015 were $1,649,124. Both employer and employee contributions were equal to 100% of the required contribution for each year. Pension Liabilities, Pension Expense, and Deferred Ou flow of Resources and Deferred Inflow of Resources Related to Pension Plan: At September 30, 2015, the Division of Retirement calculated the County's liability of $39,616,455 for the FRS plan for its proportionate share of the net pension liability. The net pension liability was measured as of June 30, 2015,. and the total pension liability used to calculate the net pension liability was determined by an actuarial valuation as of July 1, 2015. The County's proportion of the net pension liability was based on a projection of the County's long- term share of contributions to the pension plan relative to the projected contributions of all participating employers, actuarially determined. At September 30, 2015,. the County's proportion share was .3067% for the FRS pension plan. This was an increase of 0.0049% from its proportionate share measured as of June 30, 2014. For the year ended September 30, 2015,. the County recognized a reduction in pension expense of $3,431,562. In addition, the County reported deferred outflows of resources and deferred inflows of resources related to pensions from the following sources: Deferred Outflows Deferred Inflows Description of Resources of Resources Differences between expected and actual experience $ 4,182,325 $ 939,583 Changes in assumptions 2,629,477 - Net difference between projected and actual earnings on pension plan investments - 9,459,746 Changes in proportion and differences between. County contributions and proportionate share of contributions 1,572,620 4,579,888 County contributions subsequent to the measure- ment date 1,966,730 - Total $ 10,351,152 $ 14,979,217 94 Indian River County, Florida Notes To Financial Statements Year Ended September 30, 2015 NOTE 15 -RETIREMENT PLAN - Florida Retirement System (FRS) - Continued Pension Plan- Continued The deferred outflows of resources related to the pension plan totaling $1,966,730 resulting from County contributions subsequent to the measurement date, will be recognized as a reduction of the net pension liability in the year ended September 30, 2016. Other amounts reported as deferred outflows of resources and deferred inflows of resources related to pensions will be recognized in pension expense as follows: Amount Fiscal Year Ending September 30: Recognized 2016. $ (5,737,628) 2017 (5,737,628) 2018 (5,737,628) 2019 8,573,467 2020 1,648,744 Thereafter 395,698 Total X6,594,975)_ Actuarial Assumptions: The total pension liability in the July 1, 2015. actuarial valuation was determined using the following actuarial assumption, applied to all periods included in the measurement: Valuation date: July 1, 2015 Measurement date: June 30, 2015 Discount rate: 7.65% Long-term expected rate of return: 7.65%, net of pension plan investment expense Inflation: 2.60% Salary increase; 3.25%, including inflation Mortality Generational RP-2000 with Projections Scale BB Actuarial cost method Individual Entry Age The actuarial assumptions that determined the total pension liability used in the July 1, 2015 valuation were based on the results of an actuarial experience study for the period July 1, 2008 through June 30, 2013. The changes in actuarial assumptions for demographic and economic assumptions (all of the above assumptions except actuarial cost method) correspond to changes in the same assumptions in the FRS actuarial study for funding purposes. These changes were approved by the 2014 and 2015 FRS Actuarial Assumptions Conferences. The changes are explained as follows: • The discount rate and long-term expected rate of return, net of investment expense were both reduced since the prior actuarial valuation by 0.10 percent from 7.75 percent to 7.65 percent to increase the likelihood that FRS will meet or exceed its assumed investment return in future years. 95 Indian River County, Florida Notes To Financial Statements Year Ended September 30, 2015 NOTE 15 -RETIREMENT PLAN - Florida Retirement System (FRS) - Continued Pension Plan- Continued • The assumed inflation rate was decreased from 3.00 percent in the July 1, 2013 valuation to 2.60 percent in the July 1, 2014. valuation in order to bring the rate in line with the combined Social. Security intermediate long-term and lower near-term assumptions. • The salary increase assumption, including inflation was decreased by 0.75 percent from 4.00 percent to 3.25 percent. The decrease was due to two factors, a decrease in inflation as previously explained and a decrease in real wage growth. The decrease in real wage growth was made to better align with the trailing 10-year growth in payroll as well as to be in a reasonable range based on observed national data and the Social Security Administration's forward-looking assumption sets. • The mortality assumption was changed to incorporate Projection Scale BB in the July 1, 2014 actuarial valuation, in place of the Projection Scale AA previously used. The use of Scale BB allowed FRS to use a standard Society of Actuaries mortality table for each membership class/gender group without additional adjustment. Long-term Expected Rate of Return: The long-term expected rate of return on pension plan investments are not based on historical returns, but instead are based on a forward-looking capital market economic model. The allocation policy's description of each class was used to map the target allocation to the asset classes shown below. Each asset class assumption is based upon a consistent set of underlying assumptions and includes an adjustment for the inflation assumption. The target allocation and best estimates of arithmetic and geometric real rates of return for each major asset class are summarized in the following table: Compound Annual Annual Target Arithmetic (Geometric) Standard Asset Class Allocation Return Return Deviation Cash 1% 3.2% 3.1% 1.7% Fixed Income 1.8% 4.8% 4.7% 4.7% Global Equity 53% 8.5% 7.2% 17.7% Real Estate(Property) 10% 6.8% 6.2% 12.0% Private Equity 6% 11.9% 8.2% 30.0% Strategic Investments 12% 6.7% 6.1% 11.4% Total100% Assumed inflation-mean 2.6% 1.9% 96 Indian River County, Florida Notes To Financial Statements Year Ended September 30, 2015 NOTE 15 -RETIREMENT PLAN - Florida Retirement System (FRS) - Continued Pension Plan- Continued Discount Rate for Pension Plan: The discount rate used to measure the total pension liability was 7.65%. The projection of cash flows used to determine the discount rate assumed that plan member contributions will be made at the current contribution rate and that the County's contributions will be made at statutorily required rates, actuarially determined. Based on those assumptions, the pension Plan's fiduciary net position was projected to be available to make all projected future benefit payments of current active and inactive employees. Therefore, the discount rate for calculation of the total pension liability is equal to the long-term expected rate of return. Sensitivity of the County's Proportionate Share of the Net Position Liability to Changes in the Discount Rate for the Pension Plan: The following presents the County's proportionate share of the NPL (net pension liability) of the pension plan calculated using the discount rate of 7.65%. Also presented is what the County's proportionate share of the FRS plan NPL would be if it were calculated using a discount rate that is 1% lower or 1% higher than the current rate: 1% Current Discount 1% Decrease 6.65%) Rate (7.65%) Increase (8.65%) County's proportionate share of NPL $102,655,273 $39,616,455 $(12,842,141) Pension Plan Fiduciary Net Position: Detailed information regarding the Pension Plan's fiduciary net position is available in the separately issued FRS Pension Plan and Other State-Administered Systems Comprehensive Annual Financial Report. This report is available by writing to the State of Florida, Division of Retirement, Department of Management Services, P.O. Box 9000, Tallahassee, Florida 32315-9000 or by email at rep@dms.myflorida.com, or by telephone toll free at (844) 377-1888 or (850) 907-6500. This report identifies statements that were prepared in accordance with generally accepted accounting principles, the measurement focus and basis of accounting, various investment valuations, various pension plan benefits, assumptions used, and many other details. 97 Indian River County, Florida Notes To Financial Statements Year Ended September 30, 2015 NOTE 15 -RETIREMENT PLAN - Florida Retirement System (FRS) - Continued Retiree Health Insurance Subsidy (HIS) Program Plan Description: The HIS Program is a cost-sharing, multiple-employer, defined benefit pension plan established to provide a monthly subsidy payment to retired members of any state-administered retirement system. It was established under Section 112.363, Florida Statutes. Benefits are not guaranteed and are subject to annual legislative appropriation. In the event legislative appropriation or available funds fail to provide full subsidy benefits to all participants, benefits may be reduced or canceled. HIS is administered by the Florida Department of Management Services, Division of Retirement. Benefits Provided: For fiscal year ended September 30, 2015, eligible retirees and beneficiaries received a monthly HIS payment of$5 for each year of creditable service completed. The payments are at least $30 but not more than $150 per month. To be eligible to receive a HIS benefit, a retiree under a state-administered retirement system must provide proof of health insurance coverage, which may include Medicare. Contributions: The HIS Program is funded by required contributions from FRS participating employers as set by the Florida legislature. Employer contributions are a percentage of gross compensation for all active FRS members. For the fiscal year ended September 30, 2015, the HIS contribution rate was 1.26% for October 1, 2014 through June 30, 2015 and 1.66% for July 1, 2015 through September 30, 2015. There are no employee contributions required. The County contributed 100% of its statutorily required contributions for the current and preceding three years. HIS contributions are deposited in a separate trust fund from which payments are authorized. The County's contributions to the HIS Program totaled $918,200 for the fiscal year ended September 30, 2015. Pension Liabilities, Pension Expense, and Deferred Outflow of'Resources and Deferred Inflow of Resources Related to HIS Program: At September 30, 2015, the Division of Retirement calculated the County's liability of$22,760,252 for its proportionate share of the HIS Program's net pension liability. The net pension liability was measured as of June 30, 2015, and the total pension liability used to calculate the net pension liability was determined by an actuarial valuation as of July 1, 2015. The County's proportion of the net pension liability was based on based on the County's 2014-2015 contributions relative to the 2013-2014 fiscal year contributions of all participating members. At September 30, 2015, the County's proportion share was .2232% for the HIS Program. This was an increase of 0.0046% from its proportionate share measured as of June 30, 2014. 98 Indian River County, Florida Notes To Financial Statements Year Ended September 30, 2015 NOTE 15 -RETIREMENT PLAN - Florida Retirement System (FRS) - Continued Retiree Health Insurance Subsidy (HIS) Program - Continued For the year ended September 30, 2015,. the County recognized pension expense of $1,01.8,222. In addition, the County reported deferred outflows of resources and deferred inflows of resources related to pensions from the following sources: Deferred Outflows Deferred Inflows Description of Resources of Resources Changes in assumptions $ 1,790,638 $Net difference between projected and actual earnings on pension plan investments 1.2,321 - Changes in proportion and differences between County contributions and proportionate share of contributions 390,499 572,592 County contributions subsequent to the measure- ment date 286,758 - Total $ 2,480,216 $ 572,592 The deferred outflows of resources related to HIS totaling $286,758 resulting from County contributions subsequent to the measurement date, will be recognized as a reduction of the net pension liability in the year ended September 30, 2016. Other amounts reported as deferred outflows of resources and deferred inflows of resources related to HIS Program will be recognized in pension expense as follows: Amount Fiscal Year Ending_September 30: Recognized 2016 $ 280,410 2017 280,410 2018 280,410 2019 277,970 2020 277,006 Thereafter 224,660 $ 1,620,866 99 Indian River County, Florida Notes To Financial Statements Year Ended September 30, 2015 NOTE 15 -RETIREMENT PLAN - Florida Retirement System (FRS) - Continued Retiree Health Insurance Subsidy (HIS) Program - Continued Actuarial Assumptions: The total pension liability for the HIS Program in the July 1, 2015 actuarial valuation was determined using the following actuarial assumption, applied to all periods included in the measurement: Valuation date: July 1, 2015 Measurement date: June 30, 2015. Discount rate: 3.80% Long-term expected rate of return: N/A Municipal bond rate: 3.80% Inflation: 2.60% Salary increase; 3.25%, average, including inflation Mortality Generational RP-2000 with Projections Scale BB Actuarial cost method Individual Entry Age The actuarial assumptions that determined the total HIS pension liability used in the July 1, 2015 valuation were based on the results of an actuarial experience study for the period July 1, 2008 through June 30, 2013. Discount rate for HIS Program: In general, the discount rate for calculating the total pension liability is equal to the single rate equivalent to discounting at the long-term expected rate of return for benefit payments prior to the projected depletion date. Because the HIS Program is essentially funded on a pay-as-you-go basis, the depletion date is considered to be immediate. The single equivalent discount rate is equal to the municipal bond rate selected by the plan sponsor. The Bond Buyer General Obligation 20-Bond Municipal Bond Index was adopted as the applicable municipal bond index. Long-Term, Expected Rate of Return: As stated above, the HIS program is essentially funded on a pay- as-you-go basis. As such, there is no assumption for a long-term expected rate of return on a portfolio, no assumptions for cash flows into and out of the pension plan, or assumed asset allocation. 1.00 Indian River County, Florida Notes To Financial Statements Year Ended September 30, 2015 NOTE 15 -RETIREMENT PLAN - Florida Retirement System (FRS) - Continued Retiree Health Insurance Subsidy (HIS) Program - Continued Sensitivity of the County's Proportionate Share @the Net Position Liability to Changes in the Discount Rate for the HIS Program: The following presents the County's proportionate share of the NPL (net pension liability) of the HIS Program calculated using the discount rate of 3.80%. Also presented is what the County's proportionate share of the HIS Program NPL would be if it were calculated using a discount rate that is 1% lower or 1% higher than the current rate: 1% Current Discount 1% Decrease 2.80%) Rate(3.80%) Increase 4.80%) County's proportionate share of NPL $25,934,231 $22,760,252 $20,113,603 HIS Plan Fiduciary Net Position: Detailed information regarding the HIS Program's fiduciary net position is available in the separately issued FRS Pension Plan and Other State-Administered Systems Comprehensive Annual Financial Report. This report is available by writing to the State of Florida, Division of Retirement, Department of Management Services, P.O. Box 9000, Tallahassee, Florida 32315-9000 or by email at rep@dms.myflorida.com, or by telephone toll free at (844) 377-1888) or (850) 907-6500. Investment Plan Plan Description: The County contributes to the Investment Plan, a defined contribution pension plan, for its eligible employees electing to participate in the Investment Plan. The Investment Plan is administered by the State County of Administration (SBA), and is reported in the SBA's annual financial statements and in the State of Florida Comprehensive Annual Financial Report. As provided in Section 121.4501, Florida Statutes, eligible FRS members may elect to participate in the Investment Plan in lieu of the FRS defined benefit plan. County employees already participating in DROP are not eligible to participate in this program. Benefits Provided: Service retirement benefits are based upon the value of the member's account upon retirement. Employers and employee contributions, including amounts contributed to individual member's accounts, are defined by law, but the ultimate benefit depends in part on the performance of investment funds. Benefit terms, including contribution requirements, for the Investment Plan are established and may be amended by the Florida Legislature. 1.01. Indian River County, Florida Notes To Financial Statements Year Ended September 30, 2015 NOTE 15 -RETIREMENT PLAN - Florida Retirement System (FRS) - Continued Investment Plan- Continued Benefits Provided, Continued: For all membership classes, employees are immediately vested in their own contributions and are vested after one year of service for employer contributions and investment earnings. Nonvested employer contributions are placed in a suspense account for up to five years. If the employee returns to FRS-covered employment within the five year period, the employee will regain control over their account. If the employees do not return within the five-year period, the employee will forfeit the accumulated account balance. For fiscal year ended September 30, 2015, the information for the amount of forfeitures was unavailable from the SBA; however, management believes that these amounts, if any,would be immaterial to the County. If an accumulated benefit obligation for service credit originally earned under the Pension Plan is transferred to the Investment Plan, the member must have the years of service required for Pension Plan vesting (including the service credit represented by the transferred funds) to be vested for these funds and the earnings on the funds. After termination and applying to receive benefits, the member may rollover vested funds to another qualified plan, structure a periodic payment under the Investment Plan, receive a lump-sum distribution, leave the funds invested for future distribution, or any combination of these options. Disability coverage is provided; the member may either transfer the account balance to the FRS Pension Plan when approved for disability retirement to receive guaranteed lifetime month benefits under the FRS Pension Plan, or remain in the Investment Plan and rely upon that account balance for retirement income. Contributions: Cost of administering the Investment Plan, including the FRS Financial Guidance Program, are funded through an employer contribution of.04% of payroll and by forfeited benefits of Investment Plan members. The Investment Plan is funded with the same employer and employee contribution rates that are based on salary and membership class as the FRS defined benefit plan. Contributions are directed to individual member accounts, and the individual members allocate contributions and account balances amount various approved investment choices. Allocations to the investment member's accounts during the 2014-15 fiscal year are based on a percentage of gross compensation, class as follows: regular class 6.30%, special risk class 14.00%, senior management service class 7.67%, County elected officers' class 11.34%. The County's Investment Plan contributions and pension expense totaled $1,310,953 for fiscal year ended September 30, 2015. Employee contributions totaled $291,718 for the same period. The pension liability is not reported in the governmental fund financial statements of the County (but are reported in proprietary funds) since they are not payable from available spendable resources. It is reported in the financial statements of the County by the fund which normally pays the personnel service costs of the employee. 1.02 Indian River County, Florida Notes To Financial Statements Year Ended September 30, 2015 NOTE 16—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 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 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, 2014, range from $380 for single coverage Medicare participants to $715 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 INo subsidy 02/01/09 and after 115 or more years 12%/yr-max 40% No subsidy 103 Indian River County, Florida Notes To Financial Statements Year Ended September 30, 2015 NOTE 16—OTHER POSTEMPLOYMENT BENEFITS PLAN- Continued A. Plan Description - Continued The OPER 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, 2013,. the date of the latest actuarial valuation,plan participation consisted of: Active participants 1,382 Retired participants 429 Total participants 1.811 There are two classes of participants at October 1, 2013: Regular and senior management 1,141 Special risk 670 Total participants 1.811 The average employer's contribution was $1,646 per employee, approximately 4.6% of current payroll. Financial statements for the OPEB Trust are included in this report and can be found on pages 46-47. A separate, stand-alone financial report is not issued by the County. The OPEB Trust investments can be found in Note 4D and the Schedule of Funding Progress can be found on page 116. B. Funding Policy The Board of County Commissioners, in concert with the OPEB Board of Trustees, has the authority to establish and amend the funding policy of the OPEB Plan. The OPEB Trust is advance funded by the County. For the year ended September 30, 2015, the County contributed $2.98 million to the qualifying OPEB Trust. Plan members receiving benefits contributed $1.94 million, or approximately 66 percent of the total premiums. We anticipate that the OPEB liability will be liquidated in the following manner: General fund 53 percent, Transportation fund 7 percent, Emergency Services District fund 22 percent, enterprise funds 9 percent, internal service funds 7 percent, and the remaining 2 percent is by the other governmental and internal service funds. It is the County's policy to base future OPEB Trust contributions on the annual required contribution (ARC) in subsequent annual actuarial reports. Actual contributions represented 100% of the required contributions at September 30, 2015. 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. 104 Indian River County, Florida Notes To Financial Statements Year Ended September 30, 2015 NOTE 16—OTHER POSTEMPLOYMENT BENEFITS PLAN- Continued C. Annual OPEB Cost and Net OPEB Obligation - Continued FY 2014/2015_ FY 2013/2014 FY 2012/2013 Annual Required Contribution $ 2,977,075 $ 2,835,072 $ 2,965,251 Interest on Net OPEB Obligation (47,722) (18,036) (20,909) Adjustment to Annual Required Contribution 72,521 24,230 26,830 Annual OPEB Cost(expense) 3,001,874 2,841,266 2,971,172 Contributions (net of adjustments)* (3,121,416) (3,336,027) (2,950,097) Change in Net OPEB Obligation (119,542) (494,761) 21,075 Net OPEB Obligation—beginning of year (795,367) 30( 0,606) (321,681) Net OPEB Obligation—end of year $.................(914,909) $ (795,367 $ (300,6061 Percentage of Annual OPEB Cost Contributed 103.98% 117.41% 99.29% *Retiree adjustments are comprised of the actual amount withdrawn from the Trust plus premiums collected and less claims paid. For fiscal year 2015, these adjustments amounted to $144,341. For fiscal years 2014 and 2013, these adjustments totaled ($90,852) and ($15,154)respectfully. D. Funded Status and Funding Progress As of October 1, 2013 (the most recent actuarial valuation date), the funded status of the plan was as follows: Actuarial accrued liability(AAL) $ 35,745,213 Actuarial value of plan assets $ 11,571,968 Unfunded actuarial accrued liability(UAAL) $ 24,173,245 Funded ratio 32.37% Covered payroll(annual payroll of active employees covered by the plan) $ 61,615,728 UAAL as a percentage of covered payroll 39.23% Actuarial valuations of an ongoing plan involve estimates of the value of reported amounts and assumptions about the probability of occurrence of events into the future. Examples include assumptions about future employment, mortality, and the healthcare cost trend. Amounts determined regarding the funded status of the plan and the annual required contributions of the employer are subject to continual revision as actual results are compared with past expectations and new estimates are made about the future. The Schedule of Funding Progress and Schedule of Employer Contributions, presented as required supplementary information immediately following the County Notes to the Financial Statements (on page 116), 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 (listed above) and past two actuarial valuations as well as four years of funding data. 1.05 Indian River County, Florida Notes To Financial Statements Year Ended September 30, 2015 NOTE 16—OTHER POSTEMPLOYMENT BENEFITS PLAN- Continued E. Actuarial Methods and Assumptions Projections of benefits for financial reporting purposes are based on the benefits provided under terms of the substantive plan (the plan as understood by the employer and the plan members) in effect at the time of each valuation and on the pattern of sharing of costs between the employer and plan members to that point. The projection of benefits for financial reporting purposes does not explicitly incorporate the potential effects of legal or contractual funding limitations on the pattern of cost sharing between the employer and plan members in the future. Actuarial calculations reflect a long-term perspective. Consistent with that perspective, actuarial methods and assumptions used include techniques that are designed to reduce the effects of short-term volatility in actuarial accrued liabilities and the actuarial value of assets. The actuarial methods are: Actuarial cost method Entry age normal cost method Amortization method Level percent of payroll projected to grow 4%per year Amortization period(closed) 13 years Asset valuation method Market Value The actuarial assumptions are: Investment rate of return 6.0% (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 5.28%) Inflation rate 3% NOTE 1.7 - 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 $654,176 and lease expenditures totaled $309,591 for the year ended September 30, 2015. The County also leases other equipment and office facilities as both lessor and lessee on a month-to-month basis. A. Future Minimum Lease Receipts Year Amount 2016 $ 648,609 2017 629,720 2018 620,603 2019 640,446 2020 660,978 2021-2025 2,582,727 2026-2030 1,003,883 2031-2035 509,475 2036-2040 295,821 2041-2045 259,903 Total future minimum lease receipts: $ 7,852,165 1.06 Indian River County, Florida Notes To Financial Statements Year Ended September 30, 2015 NOTE 17- OPERATING LEASES—Continued A. Future Minimum Lease Receipts - Continued The property being leased is included in the statement of net position governmental activities and business-type activities columns and has a cost of $30,019,946 and a carrying value of $20,242,726. Current year depreciation on property being leased was $512,147. B. Future Minimum Lease Payments The following is a schedule of minimum future rentals to be paid by the County for various non- cancelable operating leases of office space,park land, and office equipment as of September 30, 2015: Year Amount 2016 $ 305,080 2017 149,853 2018. 65,865 2019 43,745 2020 1,500 2021-2025 7,500 2026-2030 7,500 2031-2035 7,500 2036-2040 5,100 2041-2045 4,500 2046-2050 3,600 2051-2055 3,000 2056-2060 1,500 2061-2065 1,500 2066-2070 1,500 2071-2075 1,500 2076 300 Total future minimum lease payments: $ 611,043 107 Indian River County, Florida Notes To Financial Statements Year Ended September 30, 2015 NOTE 18 -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. Restricted — Use of these resources is based on the constraints imposed externally by creditors, grantors, contributors, or laws and regulations of other governments; or imposed by law through constitutional provisions or enabling legislation. Committed—Amounts whose use is constrained by 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. Assigned — The Board of County Commissioners is the governing body authorized to assign fund balance amounts to be used for specific purposes. This assignment is done through the budget approval and amendment process. 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. 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 Funds: Emergency/Disaster Relief Reserve—A balance of no less than 5% of budgeted operating expenditures for the current fiscal year will be reserved only for the purpose of responding to natural and man-made disasters. Disasters include hurricanes, tropical storms, floods, wildfires, or terrorist activities. These funds can only be used to respond and provide relief after such a disaster. Funds will be replenished over a five-year period after the completion of the recovery from the disaster. 1.08 Indian River County, Florida Notes To Financial Statements Year Ended September 30, 2015 NOTE 18 -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, 2015,. reserve amounts for those funds were: Budget Disaster Relief Stabilization Total General Fund $ 5,450,000 $ 5,450,000 $ 10,900,000 Transportation Fund 800,000 800,000 1,600,000 Emergency Services District Fund 1,700,000 1,700,000 3,400,000 Total $ 7,950,000 $ 7,950,000 $ 15,900,000 The General Fund reserves are included in the unassigned fund balance on the balance sheet. The Transportation Fund reserves are included in the assigned fund balance and the Emergency Services District Fund reserves are included in the restricted fund balance on the balance sheet. Emergency/Disaster Relief and Budget Stabilization Reserve amounts may only be revised by the Board of County Commissioners. 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 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 committed fund balance, as appropriate, then assigned and finally unassigned fund balances. 1.09 Indian River County, Florida Notes To Financial Statements Year Ended September 30, 2015 NOTE 19 -FUND BALANCE DEFICIT The following funds had a deficit in fund balance at September 30, 2015: Fund Deficit Notimajor Governmental Funds: Metropolitan Planning Organization Fund $ 426,554 CDBG NSP3 Grant Fund 5,725 Total Deficit $ 432,279 The deficits for these two funds will be eliminated by grant proceeds in fiscal year 2016. NOTE 20—NET POSITION A. Net Position Restricted by Enabling Legislation The government-wide statement of net position for the primary government reports $128,580,087 of restricted net position, of which $97,816,878 is restricted by enabling legislation. B. Restatement of Beginning Net Position The County's beginning net position at October 1, 2014 was decreased due to the adoption of the new GASB Statement No. 68 (see County Note 1.D.12 for further explanation). This statement requires the County to recognize its proportionate share of the net position liabilities and operating statement activities related to changes in the pension liabilities of cost-sharing multiple-employer FRS and HIS defined benefit plans. The beginning net position has been adjusted as follows: Original Restated 10/1/2014 GASB 68 10/1/2014 Net Position Adjustment Net Position Governmental-type Activities 703,841,710 $ (65,275,705) $ 638,566,005 Business-Type Activities Solid Waste Disposal District 47,107,276 (252,031) 46,855,245 Golf Course 6,319,564 (232,806) 6,086,758 County Utilities 241,439,518 (3,408,493) 238,031,025 County Building 5,214,373 (594,941) 4,619,432 300,080,731 (4,488,271) 295,592,460 Total $ 1,003,922,441 $ (69,763,976) $ 934,158,465 1.1.0 Indian River County, Florida Notes To Financial Statements Year Ended September 30, 2015 NOTE 21 -RISK MANAGEMENT General Liability, Property,Worker's Compensation and Medical The County is exposed to various risks of loss related to torts, theft of, damage to and destruction of assets, errors or omissions, injuries to employees, and natural disasters. The County established a Self Insurance Fund (an internal service fund) to account for and finance its uninsured risk of loss. Under this program, the Self Insurance Fund provides coverage as follows: 05/01/11 to 10/01/13 to 10/01/14 to 9/30/2013 9/30/201.4 9/30/201.5 Worker's Compensation $ 350,000 $ 500,000 $ 750,000 General Liability 200,000 200,000 200,000 Auto Liability 200,000 200,000 200,000 Property Damage 200,000 200,000 200,000 Error or Omissions 200,000 200,000 200,000 Annual Aggregate 2,000,000 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 three workers compensation reimbursements totaling $409,914 in fiscal year 2015. The County received three workers compensation reimbursements totaling $125,21.3 in fiscal year 2014 and two in fiscal year 2013 totaling $108,123. The County is also self insured for medical claims covering employees and their eligible dependents. As required by Section 112.081, Florida Statutes, retirees and their eligible dependents are provided the same health care coverage as is offered to active employees; however, the retirees are responsible for payment of the premiums. Medical claims are paid from premiums contributed by employees, retirees and by the County. Premiums and contributions are determined by projected claims based on historical and actuarial experience. The self insurance plan assumes all risk for claims, other than worker's compensation, up to $250,000 per occurrence. The County has purchased a reinsurance policy to cover claims in excess of these limits. There were four medical claim reimbursements in excess of the $250,000 limit for fiscal year 2015 totaling $382,635. In fiscal year 2014 there were six totaling $335,641 and in fiscal year 2013 there were six totaling $285,689. The claims liability of $8,177,520 reported at September 30, 2015, 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, $3,289,891 will be liquidated over the next twelve months. 1.1.1. Indian River County, Florida Notes To Financial Statements Year Ended September 30, 2015 NOTE 21 -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 moments_merits Year End ................ -—------ 2011-2012 $ 7,877,000 $ 13,967,831 $ (13,770,831) $ 8,074,000 2012-2013 8,074,000 14,396,726 (14,396,726) 8,074,000 2013-2014 8,074,000 16,860,869 (16,708,324) 8,226,545 2014-2015 8,226,545 17,188,927 (17,237,952) 8,177,520 Included in the charges to other funds is an amount to fund future catastrophic losses not actuarially determined and at September 30, 2015, unrestricted net position of$21,730,800 has been designated for this purpose. The County has elected to accrue the larger of the discounted liability or undiscounted liability. At September 30, 2015, the undiscounted liability was the greater of the two amounts. The discount rate used in the calculation was 2.5 percent. NOTE 22 - 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, 2015. In the General Fund, contracts are for janitorial services, beach park landscape and custodial maintenance, legislative consulting services and external auditing services. In the Special Revenue Funds, contracts are for the Sector 3 Dune Repair-Post Sandy, 45th Street Canal Enclosure and Beautification project, Vero Lake Estates asphalt millings, 66th Avenue Roadway Improvements, Fire Rescue Station #13 construction, as well as a variety of other road paving and drainage projects. 1.1.2 Indian River County, Florida Notes To Financial Statements Year Ended September 30, 2015 NOTE 22 - COMMITMENTS AND CONTINGENCIES - Continued B. Contracts and Other Commitments -Continued In the Capital Projects Fund, contracts are for the South County Regional. Park Intergenerational Recreation Facility, Aviation Blvd/20th Avenue intersection improvements, and several sidewalk and road improvement projects throughout the County. In the Enterprise Funds, contracts are for the golf course maintenance, Blue Cypress Lake Wastewater Treatment Facility, USI widening utility conflicts from Oslo Road to the County line, and various other water and sewer projects. In the Internal Service Funds, contracts are for the Other Postemployment Benefits actuarial valuation services. A summary of these projects at September 30, 2015, is as follows: Remaining Total Total Paid as of Balance at Contract Price September 30,2015 Se tp ember 30,2015 General $ 853,281 $ (520,194) $ 333,087 Special Revenue 25,395,574 (16,931,258) 8,464,31.6 Capital Projects 26,413,615 (17,677,179) 8,736,436 Enterprise 5,490,098 (2,803,224) 2,686,874 Internal Service 1 1,0 00 - ------11,000 Total $ 58,163,568 $ (37,931,855) $ 20,231,713 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. 1.1.3 Indian River County, Florida Required Supplementary Information For the Year Ended September 30, 2015 Schedule of the County's Proportionate Share of the Net Pension Liability Florida Retirement System(FRS)Defined Benefit Pension Plan County's Proportionate FRS Plan County's County's Share of the Fiduciary Net Plan Sponsor Proportion Proportionate County's FRS Net Pension Position as a Fiscal Year Measurement of the FRS Share of the Covered Liability as a Percentage of Ending Date Net Pension FRS Net Pension Employee Percentage of Total Pension September 30, June 30, Liability Liability Payroll Covered Payroll Liability 2015 2015 0.3067% $ 39,616,455 $ 57,879,163 68.45% 92.00% 2014 2014 0.3018% $ 18,416,343 $ 55,095,601 33.43% 96.09% Schedule of the County's Proportionate Share of the Net Pension Liability Retiree Health Insurance Subsidy(HIS)Program Defined Benefit Pension Plan County's Proportionate HIS Plan County's County's Share of the Fiduciary Net Plan Sponsor Proportion Proportionate County's HIS Net Pension Position as a Fiscal Year Measurement of the HIS Share of the Covered Liability as a Percentage of Ending Date Net Pension HIS Net Pension Employee Percentage of Total Pension September 30, June 30, Liability Liability Payroll Covered Payroll Liability 2015 2015 0.2232% $ 22,760,252 $ 67,812,302 33.56% 0.50% 2014 2014 0.2186% $ 20,441,863 $ 64,984,255 31.46% 0.99% The County implemented GASB Statement No. 68 for the fiscal year ended September 30,2015,including a restatement as of September 30,2014. Information for prior years is not available. 114 Indian River County, Florida Required Supplementary Information For the Year Ended September 30, 2015 Schedule of the County's Contributions Florida Retirement System(FRS)Defined Benefit Pension Plan FRS FRS Contributions FRS County's Fiscal Year Contractually in Relation to the Contribution Covered FRS Contributions Ending Required Contractually Deficiency Employee as a Percentage of September 30, Contribution Required Contribution (Excess) Payroll Covered Payroll 2015 $ 7,503,166 $ 7,503,166 $ - $ 57,717,461 13.00% 2014 $ 6,760,058 $ 6,760,058 $ - $ 56,156,975 11.94% Schedule of the County's Contributions Retiree Health Insurance Subsidy(HIS)Program Defined Benefit Pension Plan HIS HIS Contributions HIS County's Fiscal Year Contractually in Relation to the Contribution Covered HIS Contributions Ending Required Contractually Deficiency Employee as a Percentage of September 30, Contribution Required Contribution (Excess) Payroll Covered Payroll 2015 $ 918,200 $ 918,200 $ - $ 67,455,498 1.36% 2014 $ 782,940 $ 782,940 $ - $ 66,229,010 1.18% The County implemented GASB Statement No. 68 for the fiscal year ended September 30,2015,including a restatement as of September 30,2014. Information for prior years is not available. 115 Indian River County, Florida Required Supplementary Information For the Year Ended September 30, 2015 Other Postemployment Benefits Plan Schedule of Funding Protress UAAL as a Actuarial Actuarial Accrued Percentage of Value of Liability(AAL)- Unfunded AAL Covered Valuation Assets Entry Age (UAAL) Funded Ratio Covered Payroll Payroll Date (a) (b) (b-a) (a/b) (c) ((b-a)/c) 10/01/2007* $ - $ 29,098,337 $ 29,098,337 0.00% $ 64,841,779 44.88% 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% 10/01/2013 $ 11,571,968 $ 35,745,213 $ 24,173,245 32.37% $ 61,615,728 39.23% * First year of Indian River County Other Postemployment Benefits Trust(IRCOT) Schedule of Employer Contributions Fiscal Year OPEB Annual Amount Percentage Ending Cost Contributed Contributed 9/30/2012 $ 2,830,204 $ 2,962,301 104.67% 9/30/2013 $ 2,971,172 $ 2,950,097 99.29% 9/30/2014 $ 2,841,266 $ 3,336,027 117.41% 9/30/2015 $ 3,001,874 $ 3,121,416 103.98% 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 16 for more information on the IRCOT. 116 COMBINING AND INDIVIDUAL FUND STATEMENTS AND SCHEDULES 117 NONMAJOR GOVERNMENTAL FUNDS SPECIAL REVENUE FUNDS Court Facilities- To account for the court facility surcharge, additional court costs, the additional recording fee for court technology, and improvements made to court facilities. Section 8 Rental Assistance- To account for the provision of rental assistance for low income housing. Financing is provided by grants from the U.S. Department of Housing and Urban Development. Special Law Enforcement- To account for the expenditures of providing law enforcement equipment. Financing is provided by confiscation of monies and property in accordance with Section 932.704 of the Florida Statutes. Tree Ordinance Fines- To account for fines assessed against individuals for illegal removal of protected trees. Funds are used for park improvements. Tourist Development- To account for the proceeds from the levy of a local option. Tourist Development tax. Funds are used to attract tourism trade and for the benefit of County residents. 911 Surcharge- To account for the receipt of the 911 surcharge on all telephone bills of the County. Monies are used to pay the operating costs of the 911 Emergency Center. Drug Abuse- To account for the collection of fines on criminal drug cases. Monies are used for drug prevention and education programs. State Housing Initiatives Partnership- To account for State funds distributed under the State Housing Initiatives Partnership Act. The purpose of this program is to provide for the creation and preservation of affordable housing. Funds are provided by the documentary stamp taxes. 1.1.8 Metropolitan Planning Organization- To account for expenditures incurred for planning community transportation in the County. Financing is provided by grants. Multi-Jurisdictional Law Enforcement- To account for expenditures incurred in connection with the cooperative drug enforcement task force established by the County, the City of Vero Beach and the City of Sebastian. Funds are provided by grants and program generated income. Native Uplands Land Acquisition- To account for expenditures related to the acquisition of native habitat preserve areas and for the management of such lands. Funding is provided by developers of property who pay to mitigate native uplands destruction where native upland plant communities will be destroyed. Beach.Restoration- To account for the expenditure of funds to preserve and improve County beaches. Funds are provided by the levy of a local option tourist development tax. CDBG Neighborhood Stabilization Program- To account for the proceeds from the Community Development Block Grant. The purpose of this grant is to provide neighborhood stabilization through resale and rental of housing units purchased by the grant funds. Florida Boating Improvement Program- To account for boat registration fees which may be used for providing recreational channel marking,public launching facilities, and other boating-related activities. Library Bequests- To account for bequests 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. 1.1.9 Land Acquisition- To account for expenditures incurred in the purchase of environmentally sensitive land, preservation of water sources, historic sites and agricultural lands. Financing is provided by bond proceeds and state grants. East Gifford Stormwater- To account for expenditures of funds for stormwater improvements in the East Gifford Watershed. Funds are provided by non-ad valorem taxes. Vero Lake Estates- To account for the expenditure of funds to improve roads in the Vero Lake Estates subdivision. Funds are provided by the levying of special assessments. Dodgertown Reserve- To provide improvements to the Historic Dodgertown facility per existing lease agreement between the County and current tenant. Funds are provided by the half cent sales tax and transfers from the optional sales tax fund. Clerk Special Revenue- To account for the proceeds from a special recording fee to be used for computer linkage and modernizing the Clerk of the Circuit 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 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. 120 DEBT SERVICE FUNDS Spring Training Facility Bonds- To account for the accumulation of State assistance and tourist tax monies pledged to pay the principal, interest, and fiscal charges on the Spring Training Facility Bonds. Land Acquisition Bonds- To account for the accumulation of ad valorem taxes to pay the principal, interest, and fiscal charges related to the Land Acquisition Bonds. MAJOR CAPITAL PROJECTS FUND Optional Sales Tax- To account for revenues generated by the local option one cent sales tax. Monies are used for various capital projects. 1.21. Indian River County,Florida Combining Balance Sheet Nonmajor Governmental Funds September 30,2015 Special Revenue Court Section 8 Rental Special Law Facilities Assistance Enforcement ASSETS Cash and cash equivalents $ 718,302 $ 425,646 $ 297,099 Accounts receivable - - - Due from other funds - Due from other governments - 22,265 - Interest receivable 207 - 83 Inventories - - - Prepaid items - 1,206 - Total Assets $ 718,509 $ 449,117 $ 297,182 LIABILITIES Accounts payable $ 15,016 $ 6,924 $ - Retainage payable - - - Due to other funds - - - Due to other governments - 21,950 - Unearned revenues - - - Total Liabilities 15,016 28,874 DEFERRED INFLOWS OF RESOURCES Unavailable revenue-state and federal grants - - - Total Deferred Inflows of Resources FUND BALANCES Nonspendable: Inventories - - - Prepaid items - 1,206 - Restricted for: Court-related costs and improvements 703,493 - - Housing assistance - 419,037 - Law enforcement/public safety - - 297,182 Tourism-related activities - - - Beach renourishment - - - Boating related projects - - - Library services - - - Land acquisition - - - Stormwater,street lighting,and other special assessments - - - Voting/election activities - - - Debt service - - - Dodgertown repairs/improvements - - - Committed to: Environmental conservation/preservation - - - Law Enforcement/public safety - - - Assigned to: Law enforcement/public safety - - - Unassigned - - - Total Fund Balances 703,493 420,243 297,182 Total Liabilities and Fund Balances $ 718,509 $ 449,117 $ 297,182 122 Special Revenue State Housing Tree Ordinance Tourist Initiatives Fines Development 911 Surcharge Drug Abuse Partership $ 334,393 $ 428,944 $ 1,519,181 $ 229,054 $ 338,494 - - - - 827 - 76,058 5,198 - 96 111 430 65 108 S 334,489 S 429,055 S 1,595,669 $ 234,317 $ 339,429 $ - $ 46,919 $ 16,512 $ 5,198 $ 17,070 46,919 16,512 5,198 17,070 - - 322,359 - 1,579,157 229,119 - - 382,136 - - - 334,489 - - - - 334,489 382,136 1,579,157 229,119 322,359 $ 334,489 $ 429,055 $ 1,595,669 $ 234,317 $ 339,429 Continued 123 Indian River County,Florida Combining Balance Sheet Nonmajor Governmental Funds September 30,2015 Special Revenue Metropolitan Multi- Planning Jurisdictional Native Uplands Organization Law Enforcement Land Acquisition ASSETS Cash and cash equivalents $ 1,080 $ 156,020 $ 834,157 Accounts receivable - - - Due from other funds - Due from other governments 358,658 - Interest receivable - - 239 Inventories - - - Prepaid items 7,200 - - Total Assets $ 366,938 $ 156,020 $ 834,396 LIABILITIES Accounts payable $ 85,815 - Retainage payable 20,423 Due to other funds 352,000 - Due to other governments - - - Unearned revenues - - - Total Liabilities 458,238 - DEFERRED INFLOWS OF RESOURCES Unavailable revenue-state and federal grants 335,254 - - Total Deferred Inflows of Resources 335,254 FUND BALANCES Nonspendable: Inventories - - - Prepaid items 7,200 - - Restricted for: Court-related costs and improvements - - - Housing assistance - - - Law enforcement/public safety - 156,020 - Tourism-related activities - - - Beach renourishment - - - Boating related projects - - - Library services - - - Land acquisition - - - Stormwater,street lighting,and other special assessments - - - Voting/election activities - - - Debt service - - - Dodgertown repairs/improvements - - - Committed to: Environmental conservation/preservation - - 834,396 Law Enforcement/public safety - - - Assigned to: Law enforcement/public safety - - Unassigned (433,754) - - Total Fund Balances (426,554) 156,020 834,396 Total Liabilities and Fund Balances $ 366,938 $ 156,020 $ 834,396 124 Special Revenue CDBG Neighborhood Florida Boating Stabilization Improvement Disabled Access Beach Restoration Program Program Library Bequests Program $ 8,421,567 $ 43,211 $ 1,194,537 $ 10,738 $ 65,265 1,778,051 - 20,652 - - 2,423 13 340 3 19 $ 10,202,041 $ 43,224 $ 1,215,529 $ 10,741 $ 65,284 $ 96,207 $ - $ 39,757 $ - $ - 26,427 - - - - 122,634 39,757 1,778,051 - 20,652 - - 1,778,051 20,652 43,224 - - - - - - 65,284 8,301,356 - - - - - 1,155,120 - - - 10,741 - 8,301,356 43,224 1,155,120 10,741 65,284 $ 10,202,041 $ 43,224 $ 1,215,529 $ 10,741 $ 65,284 Continued 125 Indian River County,Florida Combining Balance Sheet Nonmajor Governmental Funds September 30,2015 Special Revenue Federal/State Traffic Education Grants Program Land_Acquisition ASSETS Cash and cash equivalents $ 4,819 $ 33,585 $ 126,402 Accounts receivable - - - Due from other funds - - Due from other governments 43,229 - 12,750 Interest receivable - 8 36 Inventories - - - Prepaid items - - - Total Assets $ 48,048 $ 33,593 $ 139,188 LIABILITIES Accounts payable $ 3,048 - Retainage payable - - Due to other funds 45,000 Due to other governments - - - Unearned revenues - - - Total Liabilities 48,048 - DEFERRED INFLOWS OF RESOURCES Unavailable revenue-state and federal grants - - 12,750 Total Deferred Inflows of Resources - 12,750 FUND BALANCES Nonspendable: Inventories - - - Prepaid items - - - Restricted for: Court-related costs and improvements - - - Housing assistance - - - Law enforcement/public safety - 33,593 - Tourism-related activities - - - Beach renourishment - - - Boating related projects - - - Library services - - - Land acquisition - - 126,438 Stormwater,street lighting,and other special assessments - - - Voting/election activities - - - Debt service - - - Dodgertown repairs/improvements - - - Committed to: Environmental conservation/preservation - - - Law Enforcement/public safety - - - Assigned to: Law enforcement/public safety - - - Unassigned - - - Total Fund Balances - 33,593 126,438 Total Liabilities and Fund Balances $ 48,048 $ 33,593 $ 139,188 126 Special Revenue East Gifford Dodgertown Clerk Special Sheriff Special Stormwater Vero Lakes Estates Reserve Revenue Revenue $ 20,229 $ 1,026,410 $ 115,086 $ 2,058,211 $ 1,532,960 - - - - 7,695 13 2,962 - 94,913 - - - 1.0,416 - 27,389 6 294 - - - - - 22,906 - - - 29,027 - $ 20,248 $ 1,029,666 $ 125,502 $ 2,182,151 $ 1,590,950 $ - $ 143,203 $ 22,992 $ - $ 33,780 36,853 - - - - 16,456 180,056 22,992 50,236 - - - - 22,906 - 29,027 - 2,153,124 - 1,079,432 20,248 849,610 - - - 102,510 - - 335,506 102,870 20,248 849,610 102,510 2,182,151 1,540,714 $ 20,248 $ 1,029,666 $ 125,502 $ 2,182,151 $ 1,590,950 Continued 127 Indian River County,Florida Combining Balance Sheet Nonmajor Governmental Funds September 30,2015 Special Revenue Supervisor of Elections Special Street Lighting Revenue Districts CDBG NSP3 Grant ASSETS Cash and cash equivalents $ 27,049 $ 478,354 $ 2,275 Accounts receivable - - - Due from other funds - 2,565 Due from other governments - - Interest receivable - 139 - Inventories - - Prepaid items - - - Total Assets $ 27,049 $ 481,058 $ 2,275 LIABILITIES Accounts payable $ - $ 9,609 $ - Retainage payable - - - Due to other funds - - 8,000 Due to other governments - - - Unearned revenues 23,521 - - Total Liabilities 23,521 9,609 8,000 DEFERRED INFLOWS OF RESOURCES Unavailable revenue-state and federal grants - - - Total Deferred Inflows of Resources - FUND BALANCES Nonspendable: Inventories - - - Prepaid items - - - Restricted for: Court-related costs and improvements - - - Housing assistance - - - Law enforcement/public safety - - - Tourism-related activities - - - Beach renourishment - - - Boating related projects - - - Library services - - - Land acquisition - - - Stormwater,street lighting,and other special assessments - 471,449 - Voting/election activities 3,528 - - Debt service - - - Dodgertown repairs/improvements - - - Committed to: Environmental conservation/preservation - - - Law Enforcement/public safety - - - Assigned to: Law enforcement/public safety - - - Unassigned - - (5,725) Total Fund Balances 3,528 471,449 (5,725) Total Liabilities and Fund Balances $ 27,049 $ 481,058 $ 2,275 128 Debt Service Total Nonmajor Spring Training Land Acquisition Governmental Facility Bonds Bonds Funds $ 1,946,291 $ 907,731 $ 23,297,090 - - 8,522 59,608 160,061 - - 2,354,666 563 260 5,443 - - 22,906 - - 37,433 S 1,946,854 $ 967,599 $ 25,886,121 $ 542,050 83,703 405,000 38,406 - - 23,521 1,092,680 2,146,707 2,146,707 - 22,906 37,433 2,856,617 784,620 3,439,787 - 382,136 8,301,356 1,155,120 10,741 126,438 1,341,307 - 3,528 1,946,854 967,599 2,914,453 - - 102,510 - 1,168,885 - - 335,506 - - 102,870 - - (439,479) 1,946,854 967,599 22,646,734 $ 1,946,854 $ 967,599 $ 25,886,121 129 Indian River County, Florida Combining Statement of Revenues,Expenditures and Changes in Fund Balances Nonmajor Governmental Funds For the Year Ended September 30, 2015 Special Revenue Section 8 Rental Special Law Court Facilities Assistance Enforcement REVENUES Taxes $ - $ - $ - Permits,fees and special assessments - - - Intergovernmental - 2,197,888 - Charges for services 546,630 117,192 40,819 Judgments,fines and forfeits - - 23,253 Interest 3,712 634 1,245 Miscellaneous - 2,600 - Total revenues 550,342 2,318,314 65,317 EXPENDITURES General government 329,512 - - Public safety - - - Physical environment - - - Transportation - - - Economic environment - - - Human services - 2,238,163 - Culture/recreation - - - Court related 597,029 - - Debt service: Principal - - - Interest and other fiscal charges - - - Total expenditures 926,541 2,238,163 Excess of revenues over(under)expenditures (376,199) 80,151 65,317 OTHER FINANCING SOURCES(USES) Transfers in - - - Issuance of refunding notes - - - Transfers out - - (73,863) Payment to refunded bond escrow agent - - Total other financing sources(uses) - - (73,863) Net changes in fund balances (376,199) 80,151 (8,546) Fund balances at beginning of year 1,079,692 340,092 305,728 Fund balances at end of year $ 703,493 $ 420,243 $ 297,1.82 130 Special Revenue State Housing Tree Ordinance Tourist Initiatives Fines Development 911 Surcharge Drug Abuse Partership $ - $ 850,163 - - 710,278 62,616 291,743 - - 160,087 41,700 - - 7,331 - 1,407 1,525 6,341 987 2,051 - - - - 42,000 43,107 851,688 716,619 70,934 495,881 - - 355,659 57,250 - - - - 5,366 887,433 9,635 802,784 - - - 9,635 802,784 355,659 62,616 887,433 33,472 48,904 360,960 8,318 (391,552) (206,062) - - (206,062) 33,472 48,904 154,898 8,318 (391,552) 301,017 333,232 1,424,259 220,801 713,911 $ 334,489 $ 382,136 $ 1,579,157 $ 229,119 $ 322,359 Continued 131 Indian River County, Florida Combining Statement of Revenues,Expenditures and Changes in Fund Balances Nonmajor Governmental Funds For the Year Ended September 30, 2015 Special Revenue Multi- Metropolitan Jurisdictional Native Uplands Planning Law Land Organization Enforcement Acquisition REVENUES Taxes $ - $ - $ - Permits,fees and special assessments - - - Intergovernmental 589,677 - - Charges for services 25 - - Judgments,fines and forfeits - 58,798 - Interest - 583 3,678 Miscellaneous - - - Total revenues 589,702 59,381 3,678 EXPENDITURES General government 861,238 - - Public safety - - - Physicai environment - - 1,000 Transportation - - - Economic environment - - - Hurnan services - - - Culture/recreation - - - Court related - - - Debt service: Principal - - - Interest and other fiscal charges - - - Total expenditures 861,238 1,000 Excess of revenues over(under)expenditures (271,536) 59,381 21678 OTHER FINANCING SOURCES(USES) Transfers in - - - Issuance of refunding notes - - - Transfers out - (22,393) - Payment to refunded bond escrow agent - - - Total other financing sources(uses) - (22,393) - Net changes in fund balances (271,536) 36,988 2,678 Fund balances at beginning of year (155,018) 119,032 831,718 Fund balances at end of year $ (426,554) $ 156,020 $ 834,396 132 Special Revenue CDBG Neighborhood Florida Boating Beach Stabilization Improvement Library Disabled Access Restoration Program Program Bequests Program $ 850,163 5,471,323 - 70,656 - - - - - - 1,910 22,097 155 5,180 62 284 1,650 45,994 - - - 6,345,233 46,149 75,836 62 2,194 4,646 - - - 4,198,907 - 75,147 34,037 - 4,198,907 4,646 75,147 34,037 - 2,146,326 41,503 689 (33,975) 2,194 118,235 - - - - (57,075) - - 118,235 (57,075) - 2,264,561 41,503 (56,386) (33,975) 2,194 6,036,795 1,721 1,211,506 44,716 63,090 $ 8,301,356 $ 43,224 $ 1,155,120 $ 10,741 $ 65,284 Continued 133 Indian River County, Florida Combining Statement of Revenues,Expenditures and Changes in Fund Balances Nonmajor Governmental Funds For the Year Ended September 30, 2015 Special Revenue Traffic Federal/State Education Land Grants Program Acquisition REVENUES Taxes $ - $ - $ - Permits,fees and special assessments - - - Intergovernmental 852,879 - - Charges for services - - - Judgments,fines and forfeits - 31,987 - Interest - 60 742 Miscellaneous - - 40,294 Total revenues 852,879 32,047 41,036 EXPENDITURES General government - - - Public safety - - - Physical environment - - 75,453 Transportation - 6,230 - Economic environment - - - Human services 852,879 - - Culture/recreation - - - Court related - - - Debt service: Principal - - - Interest and other fiscal charges - - - Total expenditures 852,879 6,230 75,453 Excess of revenues over(under)expenditures - 25,817 (34,417) OTHER FINANCING SOURCES(USES) Transfers in - - - Issuance of refunding notes - - - Transfers out - - - Payment to refunded bond escrow agent - - Total other financing sources(uses) - - - Net changes in fund balances - 25,817 (34,417) Fund balances at beginning of year - 7,776 160,855 Fund balances at end of year $ - $ 33,593 $ 1.26,438 134 Special Revenue East Gifford Vero Lakes Dodgertown Clerk Special Sheriff Special Stormwater Estates Reserve Revenue Revenue $ 143 $ 1,168 - 961 245,633 - - - - - 125,000 - 166,991 - 415,427 154,171 - - - 183,726 82,825 88 5,773 - 4,775 - - - - - 291,026 1,192 252,574 125,000 603,928 695,013 - - - 461,278 - - 1,595,636 767,487 - - - 447,505 - - - 767,487 447,505 461,278 1,595,636 1,192 (514,913) (322,505) 142,650 (900,623) - - 128,249 - 793,270 (54) (4,280) - - - (54) (4,280) 128,249 - 793,270 1,138 (519,193) (194,256) 142,650 (107,353) 19,110 1,368,803 296,766 2,039,501 1,648,067 $ 20,248 $ 849,610 $ 102,510 $ 2,182,151 $ 1,540,714 Continued 135 Indian River County, Florida Combining Statement of Revenues,Expenditures and Changes in Fund Balances Nonmajor Governmental Funds For the Year Ended September 30, 2015 Special Revenue Supervisor of Elections Special Street Lighting CDBG NSP3 Revenue Districts Grant REVENUES Taxes $ - $ 2,817 $ - Permits,fees and special assessments - 210,868 - Intergovernmental 16,158 - - Charges for services - - - Judgments,fines and forfeits - - - Interest - 2,306 - Miscellaneous - 2,440 38,528 Total revenues 16,158 218,431 38,528 EXPENDITURES General government 18,510 - - Public safety - - - Physical environment - - - Transportation - 205,044 - Economic environment - - 4,884 Human services - - - Culture/recreation - - - Court related - - - Debt service: Principal - - - Interest and other fiscal charges - - - Total expenditures 18,510 205,044 4,884 Excess of revenues over(under)expenditures (2,352) 13,387 33,644 OTHER FINANCING SOURCES(USES) Transfers in 3,528 - - Issuance of refunding notes - - - Transfers out - (5,915) - Payment to refunded bond escrow agent - - - Total other financing sources(uses) 3,528 (5,915) - Net changes in fund balances 1,176 7,472 33,644 Fund balances at beginning of year 2,352 463,977 (39,369) Fund balances at end of year $ 3,528 $ 471,449 $ (5,725) 136 Debt Service Total Land Nonmajor Spring Training Acquisition Governmental Facility Bonds Bonds Funds $ 566,775 $ 4,795,927 $ 7,067,156 - - 457,462 500,004 - 11,055,213 - - 1,434,351 - - 431,530 8,642 12,169 84,496 - - 464,532 1,075,421 4,808,096 20,994,740 - - 1,670,538 - - 2,008,545 - - 76,453 - - 978,761 - - 9,530 - - 3,983,841 - - 5,568,015 - - 597,029 470,000 3,710,000 4,180,000 382,375 883,695 1,266,070 852,375 4,593,695 20,338,782 223,046 214,401 655,958 - - 1,043,282 - 20,369,000 20,369,000 - (107,307) (476,949) - (20,340,959) (20,340,959) - (79,266) 594,374 223,046 135,135 1,250,332 1,723,808 832,464 21,396,402 $ 1,946,854 $ 967,599 $ 22,646,734 137 Indian River County, Florida Budgetary Comparison Schedule Court Facilities For the Year Ended September 30, 2015 Variance Final Actual Positive Budget Amounts (Negative) REVENUES Charges for services $ 469,500 $ 546,630 $ 77,130 Interest 2,000 3,712 1,712 Total revenues 471,500 550,342 78,842 EXPENDITURES General government 552,699 329,51.2 223,187 Court related 674,899 597,029 77,870 Total expenditures 1,227,598 926,541 301,057 Net change in fund balances (756,098) (376,199) 379,899 Fund balances at beginning of year 756,098 1,079,692 323,594 Fund balances at end of year $ - $ 703,493 $ 703,493 138 Indian River County, Florida Budgetary Comparison Schedule Section 8 Rental Assistance For the Year Ended September 30, 2015 Variance Final Actual Positive Budget Amounts (Negative) REVENUES Intergovernmental $ 2,244,160 $ 2,197,888 $ (46,272) Charges for services - 1.17,192 117,192 Interest - 634 634 Miscellaneous 617 2,600 1,983 Total revenues 2,244,777 2,318,314 73,537 EXPENDITURES Human services 2,281,506 2,238,163 43,343 Total expenditures 2,281,506 2,238,163 43,343 Net change in fund balances (36,729) 80,151 116,880 Fund balances at beginning of year 36,729 340,092 303,363 Fund balances at end of year $ - $ 420,243 $ 420,243 139 Indian River County, Florida Budgetary Comparison Schedule Special Law Enforcement For the Year Ended September 30, 2015 Variance Final Actual Positive Budget Amounts (Negative) REVENUES Charges for services $ - $ 40,819 $ 40,819 Judgments, fines and forfeits - 23,253 23,253 Interest - 1,245 1,245 Total revenues - 65,317 65,317 OTHER FINANCING SOURCES (USES) Transfers out (73,864) (73,863) 1 Total other financing sources (uses) (73,864) (73,863) 1 Net change in fund balances (73,864) (8,546) 65,318 Fund balances at beginning of year 73,864 305,728 231,864 Fund balances at end of year $ - $ 297,182 $ 297,182 140 Indian River County, Florida Budgetary Comparison Schedule Tree Ordinance Fines For the Year Ended September 30, 2015 Variance Final Actual Positive Budget Amounts (Negative) REVENUES Judgments, fines and forfeits $ - $ 41,700 $ 41,700 Interest - 1,407 1,407 Total revenues 43,107 43,107 EXPENDITURES Culture/recreation 50,000 9,635 40,365 Total expenditures 50,000 9,635 40,365 Net change in fund balances (50,000) 33,472 83,472 Fund balances at beginning of year 50,000 301,017 251,017 Fund balances at end of year $ - $ 334,489 $ 334,489 141 Indian River County, Florida Budgetary Comparison Schedule Tourist Development For the Year Ended September 30, 2015 Variance Final Actual Positive Budget Amounts (Negative) REVENUES Taxes $ 694,750 $ 850,163 $ 155,413 Interest 1,900 1,525 (375) Total revenues 696,650 851,688 155,038 EXPENDITURES Culture/recreation 81.0,881 802,784 8,097 Total expenditures 810,881 802,784 8,097 Net change in fund balances (1.1.4,231) 48,904 163,135 Fund balances at beginning of year 114,231 333,232 219,001 Fund balances at end of year $ - $ 382,136 $ 382,136 142 Indian River County, Florida Budgetary Comparison Schedule 911 Surcharge For the Year Ended September 30, 2015 Variance Final Actual Positive Budget Amounts (Negative) REVENUES Intergovernmental $ 741,000 $ 710,278 $ (30,722) Interest - 6,341 6,341 Miscellaneous 293 (293) Total revenues 741,293 716,619 (24,674) EXPENDITURES Public safety 617,209 355,659 261,550 Total expenditures 617,209 355,659 261,550 Excess of revenues over(under) expenditures 1.24,084 360,960 236,876 OTHER FINANCING SOURCES (USES) Transfers out (206,062) (206,062) - Total other financing sources (uses) (206,062) (206,062) Net change in fund balances (81,978) 154,898 236,876 Fund balances at beginning of year 81,978 1,424,259 1,342,281 Fund balances at end of year $ - $ 1,579,157 $ 1,579,157 143 Indian River County, Florida Budgetary Comparison Schedule Drug Abuse For the Year Ended September 30, 2015 Variance Final Actual Positive Budget Amounts (Negative) REVENUES Intergovernmental $ 62,616 $ 62,616 $ - Judgments, fines and forfeits - 7,331 7,331 Interest - 987 987 Total revenues 62,616 70,934 8,318 EXPENDITURES Public safety 57,250 57,250 - Human services 5,366 5,366 - Total expenditures 62,616 62,616 Net change in fund balances - 8,318 8,318 Fund balances at beginning of year 220,801 220,801 Fund balances at end of year $ - $ 229,119 $ 229,119 144 Indian River County, Florida Budgetary Comparison Schedule State Housing Initiatives Partership For the Year Ended September 30, 2015 Variance Final Actual Positive Budget Amounts (Negative) REVENUES Intergovernmental $ 660,086 $ 291,743 $ (368,343) Charges for services 1.50,000 160,087 10,087 Interest - 2,051 2,051 Miscellaneous 154 42,000 41,846 Total revenues 810,240 495,881 (314,359) EXPENDITURES Human services 1,260,240 887,433 372,807 Total expenditures 1,260,240 887,433 372,807 Net change in fund balances (450,000) (391,552) 58,448 Fund balances at beginning of year 450,000 713,911 263,911 Fund balances at end of year $ - $ 322,359 $ 322,359 145 Indian River County, Florida Budgetary Comparison Schedule Metropolitan Planning Organization For the Year Ended September 30, 2015 Variance Final Actual Positive Budget Amounts (Negative) REVENUES Intergovernmental $ 1,890,256 $ 589,677 $ (1,300,579) Charges for services - 25 25 Miscellaneous 617 (617) Total revenues 1,890,873 589,702 (1,301,171) EXPENDITURES General government 2,095,564 861,238 1,234,326 Total expenditures 2,095,564 861,238 1,234,326 Net change in fund balances (204,691) (271,536) (66,845) Fund balances at beginning of year 204,691 (155,018) (359,709) Fund balances at end of year $ - $ (426,554) $ (426,554) 146 Indian River County, Florida Budgetary Comparison Schedule Multi-Jurisdictional Law Enforcement For the Year Ended September 30, 2015 Variance Final Actual Positive Budget Amounts (Negative) REVENUES Judgments, fines and forfeits $ 1.2,037 $ 58,798 $ 46,761 Interest - 583 583 Total revenues 12,037 59,381 47,344 OTHER FINANCING SOURCES (USES) Transfers out (22,396) (22,393) 3 Total other financing sources (uses) (22,396) (22,393) 3 Net change in fund balances (1.0,359) 36,988 47,347 Fund balances at beginning of year 10,359 119,032 108,673 Fund balances at end of year $ - $ 156,020 $ 156,020 147 Indian River County, Florida Budgetary Comparison Schedule Native Uplands Land Acquisition For the Year Ended September 30, 2015 Variance Final Actual Positive Budget Amounts (Negative) REVENUES Interest $ - $ 3,678 $ 3,678 Total revenues 3,678 3,678 EXPENDITURES Physical environment 55,000 1,000 54,000 Total expenditures 55,000 1,000 54,000 Net change in fund balances (55,000) 2,678 57,678 Fund balances at beginning of year 55,000 831,718 776,718 Fund balances at end of year $ - $ 834,396 $ 834,396 148 Indian River County, Florida Budgetary Comparison Schedule Beach Restoration For the Year Ended September 30, 2015 Variance Final Actual Positive Budget Amounts (Negative) REVENUES Taxes $ 694,750 $ 850,163 $ 155,413 Intergovernmental 2,490,010 5,471,323 2,981,313 Interest 9,500 22,097 12,597 Miscellaneous 293 1,650 1,357 Total revenues 3,194,553 6,345,233 3,150,680 EXPENDITURES Culture/recreation 6,426,256 4,198,907 2,227,349 Total expenditures 6,426,256 4,198,907 2,227,349 Excess of revenues over(under) expenditures (3,231,703) 2,146,326 5,378,029 OTHER FINANCING SOURCES (USES) Transfers in 118,235 118,235 - Total other financing sources (uses) 118,235 118,235 Net change in fund balances (3,113,468) 2,264,561 5,378,029 Fund balances at beginning of year 3,113,468 6,036,795 2,923,327 Fund balances at end of year $ - $ 8,301,356 $ 8,301,356 149 Indian River County, Florida Budgetary Comparison Schedule CDBG Neighborhood Stabilization Program For the Year Ended September 30, 2015 Variance Final Actual Positive Budget Amounts (Negative) REVENUES Interest $ - $ 155 $ 155 Miscellaneous - 45,994 45,994 Total revenues 46,149 46,149 EXPENDITURES Economic environment 4,721 4,646 75 Total expenditures 4,721 4,646 75 Net change in fund balances (4,721) 41,503 46,224 Fund balances at beginning of year 4,721 1,721 (3,000) Fund balances at end of year $ - $ 43,224 $ 43,224 150 Indian River County, Florida Budgetary Comparison Schedule Florida Boating Improvement Program For the Year Ended September 30, 2015 Variance Final Actual Positive Budget Amounts (Negative) REVENUES Intergovernmental $ 35,000 $ 70,656 $ 35,656 Interest - 5,180 5,180 Total revenues 35,000 75,836 40,836 EXPENDITURES Culture/recreation 51.4,300 75,147 439,153 Total expenditures 514,300 75,147 439,153 Excess of revenues over(under) expenditures (479,300) 689 479,989 OTHER FINANCING SOURCES (USES) Transfers out (57,076) (57,075) 1 Total other financing sources (uses) (57,076) (57,075) 1 Net change in fund balances (536,376) (56,386) 479,990 Fund balances at beginning of year 536,376 1,211,506 675,130 Fund balances at end of year $ - $ 1,155,120 $ 1,155,120 151 Indian River County, Florida Budgetary Comparison Schedule Library Bequests For the Year Ended September 30, 2015 Variance Final Actual Positive Budget Amounts (Negative) REVENUES Interest $ - $ 62 $ 62 Total revenues - 62 62 EXPENDITURES Culture/recreation 44,830 34,037 10,793 Total expenditures 44,830 34,037 10,793 Net change in fund balances (44,830) (33,975) 10,855 Fund balances at beginning of year 44,830 44,716 (114) Fund balances at end of year $ - $ 10,741 $ 10,741 152 Indian River County, Florida Budgetary Comparison Schedule Disabled Access Program For the Year Ended September 30, 2015 Variance Final Actual Positive Budget Amounts (Negative) REVENUES Judgments, fines and forfeits $ - $ 1,910 $ 1,910 Interest - 284 284 Total revenues 2,194 2,194 EXPENDITURES Human services 20,000 - 20,000 Total expenditures 20,000 20,000 Net change in fund balances (20,000) 2,194 22,194 Fund balances at beginning of year 20,000 63,090 43,090 Fund balances at end of year $ - $ 65,284 $ 65,284 153 Indian River County, Florida Budgetary Comparison Schedule Federal/State Grants For the Year Ended September 30, 2015 Variance Final Actual Positive Budget Amounts (Negative) REVENUES Intergovernmental $ 894,890 $ 852,879 $ (42,011) Total revenues 894,890 852,879 (42,011) EXPENDITURES Human services 894,890 852,879 42,011. Total expenditures 894,890 852,879 42,011 Net change in fund balances - - - Fund balances at beginning of year - - Fund balances at end of year $ - $ - $ - 154 Indian River County, Florida Budgetary Comparison Schedule Traffic Education Program For the Year Ended September 30, 2015 Variance Final Actual Positive Budget Amounts (Negative) REVENUES Judgments, fines and forfeits $ - $ 31,987 $ 31,987 Interest - 60 60 Total revenues 32,047 32,047 EXPENDITURES Transportation 7,776 6,230 1,546 Total expenditures 7,776 6,230 1,546 Net change in fund balances (7,776) 25,817 33,593 Fund balances at beginning of year 7,776 7,776 - Fund balances at end of year $ - $ 33,593 $ 33,593 155 Indian River County, Florida Budgetary Comparison Schedule Land Acquisition For the Year Ended September 30, 2015 Variance Final Actual Positive Budget Amounts (Negative) REVENUES Intergovernmental $ 15,000 $ - $ (15,000) Interest - 742 742 Miscellaneous - 40,294 40,294 Total revenues 15,000 41,036 26,036 EXPENDITURES Physical environment 131,937 75,453 56,484 Total expenditures 131,937 75,453 56,484 Net change in fund balances (116,937) (34,417) 82,520 Fund balances at beginning of year 116,937 160,855 43,918 Fund balances at end of year $ - $ 126,438 $ 126,438 156 Indian River County, Florida Budgetary Comparison Schedule East Gifford Stormwater For the Year Ended September 30, 2015 Variance Final Actual Positive Budget Amounts (Negative) REVENUES Taxes $ - $ 143 $ 143 Permits, fees and special assessments 940 961 21 Interest - 88 88 Total revenues 940 1,192 252 EXPENDITURES Transportation 19,883 - 19,883 Total expenditures 19,883 19,883 Excess of revenues over(under) expenditures (18,943) 1,1.92 20,135 OTHER FINANCING SOURCES (USES) Transfers out (60) (54) 6 Total other financing sources (uses) (60) (54) 6 Net change in fund balances (19,003) 1,138 20,141 Fund balances at beginning of year 19,003 19,110 107 Fund balances at end of year $ - $ 20,248 $ 20,248 157 Indian River County, Florida Budgetary Comparison Schedule Vero Lakes Estates For the Year Ended September 30, 2015 Variance Final Actual Positive Budget Amounts (Negative) REVENUES Taxes $ - $ 1,168 $ 1,168 Permits, fees and special assessments 241,300 245,633 4,333 Interest 2,850 5,773 2,923 Total revenues 244,150 252,574 8,424 EXPENDITURES Transportation 1,584,735 767,487 817,248 Total expenditures 1,584,735 767,487 817,248 Excess of revenues over(under) expenditures (1,340,585) (51.4,913) 825,672 OTHER FINANCING SOURCES (USES) Transfers out (4,642) (4,280) 362 Total other financing sources (uses) (4,642) (4,280) 362 Net change in fund balances (1,345,227) (519,193) 826,034 Fund balances at beginning of year 1,345,227 1,368,803 23,576 Fund balances at end of year $ - $ 849,61.0 $ 849,610 158 Indian River County, Florida Budgetary Comparison Schedule Dodgertown Reserve For the Year Ended September 30, 2015 Variance Final Actual Positive Budget Amounts (Negative) REVENUES Intergovernmental $ 125,000 $ 125,000 $ - Total revenues 125,000 125,000 EXPENDITURES Culture/recreation 447,91.2 447,505 407 Total expenditures 447,912 447,505 407 Excess of revenues over(under) expenditures (322,912) (322,505) 407 OTHER FINANCING SOURCES (USES) Transfers in 130,958 128,249 (2,709) Total other financing sources (uses) 130,958 128,249 (2,709) Net change in fund balances (191,954) (194,256) (2,302) Fund balances at beginning of year 191,954 296,766 104,812 Fund balances at end of year $ - $ 102,510 $ 102,510 159 Indian River County, Florida Budgetary Comparison Schedule Clerk Special Revenue For the Year Ended September 30, 2015 Variance Final Actual Positive Budget Amounts (Negative) REVENUES Charges for services $ 51.2,81.8 $ 415,427 $ (97,391) Judgments, fines and forfeits 1.75,000 183,726 8,726 Interest 800 4,775 3,975 Total revenues 688,618 603,928 (84,690) EXPENDITURES General government 688,618 461,278 227,340 Total expenditures 688,618 461,278 227,340 Net change in fund balances - 142,650 142,650 Fund balances at beginning of year - 2,039,501 2,039,501 Fund balances at end of year $ - $ 2,182,151 $ 2,182,151 160 Indian River County, Florida Budgetary Comparison Schedule Sheriff Special Revenue For the Year Ended September 30, 2015 Variance Final Actual Positive Budget Amounts (Negative) REVENUES Intergovernmental $ 166,991 $ 166,991 $ - Charges for services 1.50,000 1.54,171 4,171 Judgments, fines and forfeits 80,000 82,825 2,825 Miscellaneous 219,625 291,026 71,401 Total revenues 616,616 695,013 78,397 EXPENDITURES Public safety 1,620,000 1,595,636 24,364 Total expenditures 1,620,000 1,595,636 24,364 Excess of revenues over(under) expenditures (1,003,384) (900,623) 102,761 OTHER FINANCING SOURCES (USES) Transfers in 1,003,384 793,270 (210,114) Total other financing sources (uses) 1,003,384 793,270 (210,114) Net change in fund balances - (107,353) (107,353) Fund balances at beginning of year - 1,648,067 1,648,067 Fund balances at end of year $ - $ 1,540,714 $ 1,540,714 161 Indian River County, Florida Budgetary Comparison Schedule Supervisor of Elections Special Revenue For the Year Ended September 30, 2015 Variance Final Actual Positive Budget Amounts (Negative) REVENUES Intergovernmental $ 14,982 $ 16,158 $ 1,176 Total revenues 14,982 16,158 1,176 EXPENDITURES General government 18,510 18,51.0 - Total expenditures 18,510 18,510 - Excess of revenues over(under) expenditures (3,528) (2,352) 1,176 OTHER FINANCING SOURCES (USES) Transfers in 3,528 3,528 - Total other financing sources (uses) 3,528 3,528 Net change in fund balances - 1,176 1,176 Fund balances at beginning of year 2,352 2,352 Fund balances at end of year $ - $ 3,528 $ 3,528 162 Indian River County, Florida Budgetary Comparison Schedule Street Lighting Districts For the Year Ended September 30, 2015 Variance Final Actual Positive Budget Amounts (Negative) REVENUES Taxes $ - $ 2,817 $ 2,817 Permits, fees and special assessments 207,783 210,868 3,085 Interest 1,025 2,306 1,281 Miscellaneous 2,318 2,440 122 Total revenues 211,126 218,431 7,305 EXPENDITURES Transportation 233,716 205,044 28,672 Total expenditures 233,716 205,044 28,672 Excess of revenues over(under) expenditures (22,590) 13,387 35,977 OTHER FINANCING SOURCES (USES) Transfers out (6,668) (5,915) 753 Total other financing sources (uses) (6,668) (5,915) 753 Net change in fund balances (29,258) 7,472 36,730 Fund balances at beginning of year 29,258 463,977 434,719 Fund balances at end of year $ - $ 471,449 $ 471,449 163 Indian River County, Florida Budgetary Comparison Schedule CDBG NSP3 Grant For the Year Ended September 30, 2015 Variance Final Actual Positive Budget Amounts (Negative) REVENUES Miscellaneous $ - $ 38,528 $ 38,528 Total revenues 38,528 38,528 EXPENDITURES Economic environment 26,780 4,884 21,896 Total expenditures 26,780 4,884 21,896 Net change in fund balances (26,780) 33,644 60,424 Fund balances at beginning of year 26,780 (39,369) (66,149) Fund balances at end of year $ - $ (5,725) $ (5,725) 164 Indian River County, Florida Budgetary Comparison Schedule Spring Training Facility Bonds For the Year Ended September 30, 2015 Variance Final Actual Positive Budget Amounts (Negative) REVENUES Taxes $ 446,500 $ 566,775 $ 120,275 Intergovernmental 475,000 500,004 25,004 Interest 1,900 8,642 6,742 Total revenues 923,400 1,075,421 152,021 EXPENDITURES Debt service: Principal 470,000 470,000 - Interest and other fiscal charges 453,400 382,375 71,025 Total expenditures 923,400 852,375 71,025 Net change in fund balances - 223,046 223,046 Fund balances at beginning of year - 1,723,808 1,723,808 Fund balances at end of year $ - $ 1,946,854 $ 1,946,854 165 Indian River County, Florida Budgetary Comparison Schedule Land Acquisition Bonds For the Year Ended September 30, 2015 Variance Final Actual Positive Budget Amounts (Negative) REVENUES Taxes $ 4,717,757 $ 4,795,927 $ 78,170 Interest 7,555 12,169 4,614 Total revenues 4,725,312 4,808,096 82,784 EXPENDITURES Debt service: Principal 3,710,000 3,710,000 - Interest and other fiscal charges 957,339 883,695 73,644 Total expenditures 4,667,339 4,593,695 73,644 Excess of revenues over(under) expenditures 57,973 214,401 156,428 OTHER FINANCING SOURCES (USES) Issuance of refunding notes 20,369,000 20,369,000 - Transfers out (120,816) (107,307) 13,509 Payment to refunded bond escrow agent (20,315,119) (20,340,959) (25,840) Total other financing sources (uses) (66,935) (79,266) (12,331) Net change in fund balances (8,962) 135,135 144,097 Fund balances at beginning of year 8,962 832,464 823,502 Fund balances at end of year $ - $ 967,599 $ 967,599 166 Indian River County, Florida Budgetary Comparison Schedule Optional Sales Tax Capital Projects Fund For the Year Ended September 30, 2015 Variance Final Actual Positive Budget Amounts (Negative) REVENUES Taxes $ 13,000,000 $ 16,190,352 $ 3,190,352 Permits,fees and special assessments - 80,542 80,542 Intergovernmental 4,287,789 317,741 (3,970,048) Interest 76,000 267,178 191,178 Miscellaneous 2,158,306 8,460 (2,149,846) Total revenues 19,522,095 16,864,273 (2,657,822) EXPENDITURES Capital projects 40,262,570 5,309,597 34,952,973 Total expenditures 40,262,570 5,309,597 34,952,973 Excess of revenues over(under)expenditures (20,740,475) 11,554,676 32,295,151 OTHER FINANCING USES Transfers out (1,706,177) (1,453,500) 252,677 Total other financing uses (1,706,177) (1,453,500) 252,677 Net change in fund balances (22,446,652) 10,101,176 32,547,828 Fund balances at beginning of year 22,446,652 54,005,737 31,559,085 Fund balances at end of year $ - $ 64,106,913 $ 64,1.06,913 167 168 INTERNAL SERVICE FUNDS Fleet Management- To account for the expenses incurred to repair and maintain the County's vehicles and equipment. Revenues are generated by charging user departments for maintenance of their vehicles and equipment. Self Insurance- To account for the expenses incurred for worker's compensation claims, general and auto liability and property damage, and employee health insurance claims. Revenues are generated by charges to the various departments and funds based on past experience and actuarial estimates. Information Technology- To account for the expenses incurred for maintaining the County's computer services and geographic information systems. Revenues are generated by charging user departments based on their number of computer equipment and their use of the geographic information system. 169 Indian River County, Florida Combining Statement of Net Position Internal Service Funds September 30,2015 Fleet Self Information Management Insurance Technology Totals ASSETS Current assets: Cash and cash equivalents $ 203,608 $ 28,913,882 $ 1,398,581 $ 30,516,071 Accounts receivable-net 80,944 218,462 - 299,406 Due from other governments 35,699 - - 35,699 Interest receivable 1.39 18,700 972 19,811 Inventories 148,31.8 - - 148,31.8 Prepaid items - 955,650 33,134 988,784 Total current assets 468,708 30,106,694 1,432,687 32,008,089 Non-current assets: Capital assets-depreciable 268,393 19,060 2,256,215 2,543,668 Capital assets-accumulated depreciation (258,339) (18,554) (1,851,638) (2,128,531) Total non-current assets 10,054 506 404,577 415,137 Total assets 478,762 30,107,200 1,837,264 32,423,226 DEFERRED OUTFLOWS OF RESOURCES Deferred outflows related to pensions 28,107 14,364 52,155 94,626 LIABILITIES Current liabilities(payable from current assets): Accounts payable 55,785 93,728 32,81.3 182,326 Claims payable - 3,289,891 - 3,289,891. Accrued compensated absences 26,577 10,586 35,151 72,314 Net pension liability 9,111 4,656 16,906 30,673 Total current liabilities(payable from current assets) 91,473 3,398,861 84,870 3,575,204 Non-current liabilities: Accrued compensated absences 20,603 9,452 12,662 42,717 Claims payable - 4,887,629 - 4,887,629 Net pension liability 149,728 76,508 277,825 504,061 Total non-current liabilities 170,331 4,973,589 290,487 5,434,407 Total liabilities 261,804 8,372,450 375,357 9,009,611 DEFERRED INFLOWS OF RESOURCES Deferred inflows related to pensions 34,854 17,808 64,672 1.1.7,334 NET POSITION Net investment in capital assets 10,054 506 404,577 415,137 Unrestricted 200,1.57 21,730,800 1,044,813 22,975,770 Total net position $ 210,211 $ 21,731,306 $ 1,449,390 $ 23,390,907 170 Indian River County, Florida Combining Statement of Revenues,Expenses, and Changes in Fund Net Position Internal Service Funds For the Year Ended September 30, 2015 Fleet Self Information Management Insurance Technology Totals OPERATING REVENUES Charges for services $ 2,885,762 $ 18,399,243 $ 840,798 $ 22,125,803 Total revenues 2,885,762 18,399,243 840,798 22,125,803 OPERATING EXPENSES Personal services 364,318 1,367,670 755,918 2,487,906 Material, supplies,services and other operating 2,415,669 19,105,633 299,089 21,820,391 Depreciation 12,347 217 112,634 125,198 Total operating expenses 2,792,334 20,473,520 1,167,641 24,433,495 Operating income(loss) 93,428 (2,074,277) (326,843) (2,307,692) NONOPERATING REVENUES(EXPENSES) Interest income 860 127,416 6,985 135,261. Total nonoperating revenues(expenses) 860 127,416 6,985 135,261 Income(loss)before transfers 94,288 (1,946,861) (319,858) (2,172,431) Transfers in(out) 75,000 37,516 - 112,516 Change in net position 169,288 (1,909,345) (319,858) (2,059,915) Total net position-beginning,as restated 40,923 23,640,651 1,769,248 25,450,822 Total net position-ending $ 210,211 $ 21,731,306 $ 1,449,390 $ 23,390,907 171 Indian River County, Florida Combining Statement of Cash Flows Internal Service Funds For the Year Ended September 30, 2015 Fleet Self Information _Management_ Insurance- ___Technology Totals CASH FLOWS FROM OPERATING ACTIVITIES Cash received from customers $ 2,956,181 $ 18,388,046$ 840,798 $ 22,185,025 Cash paid to suppliers for goods and services (2,449,269) (18,976,699) (286,733) (21,712,701) Cash paid to employees for services (373,037) (1,372,581) (772,373) (2,517,991) Net cash provided by(used in)operating activities ___ 133,875 _(1,961,234) _________(218,308) ______(2,045,,667) CASH FLOWS FROM NONCAPITAL FINANCING ACTIVITIES Transfers 75,000 37,516 - 112,516 Payments on advances from other funds (7,000) - - (7,000) Net cash provided by noncapital financing activities 68,000 37,516 - 105,516 CASH FLOWS FROM CAPITAL AND RELATED FINANCING ACTIVITIES Purchase of capital assets - - (155,795) (155,795) Net cash provided by(used in)capital and related financing activities - - (155,795) (155,795) CASH FLOWS FROM INVESTING ACTIVITIES Interest and dividends on investments 721 124,464 6,976 132,161 Net cash provided by investing activities 721 124,464 6,976 132,161 Net increase(decrease)in cash and cash equivalents 202,596 (1,799,254) (367,127) (1,963,785) Cash and cash equivalents at beginning of year 1,012 30,713,136 1,765,708 32,479,856 Cash and cash equivalents at end of year $ 203,608 $ 28,913,882$ 1,398,581 $ 30,516,071 Classified as: Current assets $ 203,608 $28,913,882$1,398,58 1 $ 30,516,071 172 Indian River County, Florida Combining Statement of Cash Flows Internal Service Funds For the Year Ended September 30, 2015 Fleet Self Information Management Insurance Technology Totals RECONCILIATION OF OPERATING INCOME(LOSS)TO NET CASH PROVIDED BY OPERATING ACTIVITIES Operating income(loss) $ 93,428 $ (2,074,277) $ (326,843) $ (2,307,692) Adjustments to reconcile operating income(loss)to net cash provided by operating activities: Depreciation 12,347 217 112,634 125,198 (Increase)Decrease in assets: Accounts receivable 37,840 (12,792) - 25,048 Due from other funds - 1,595 - 1,595 Due from other governments 32,579 - - 32,579 Inventories 41,450 - - 41,450 Deposits - 158,833 2,196 161,029 Increase(Decrease)in liabilities: Accounts payable (75,050) 19,126 10,160 (45,764) Claims payable - (49,025) - (49,025) Net pension liability (11,840) (6,051) (21,972) (39,863) Accrued compensated absences 3,121 1,140 5,517 9,778 Total adjustments 40,447 113,043 108,535 262,025 Net cash provided by(used in)operating activities $ 133,875 $____(1,9611234 $ (218,308) $ (2,045,667) NONCASH CAPITAL AND RELATED FINANCING ACTIVITIES Change in fair value of investments $ 227 $ 30,404 $ 1,579 $ 32,210 173 fi 174 FIDUCIARY FUND Agency Fund- To account for the assets held solely in a custodial. capacity by the County. 175 Indian River County, Florida Combining Statement of Changes in Assets and Liabilities Agency Fund For the Fiscal Year Ended September 30, 2015 Balance Balance October 1, September 30, 2014 Additions Deductions 2015 ASSETS Cash and cash equivalents $ 13,484,243 $ 355,745,621 $ 358,987,179 $ 10,242,685 Total assets $ 13,484,243 $ 355,745,621 $ 358,987,179 $ 10,242,685 LIABILITIES Due to others $ 41.9,71.3 $ 42,104,669 $ 42,524,382 $ - Due to other governments 4,644,941 307,192,624 307,343,755 4,493,810 Other deposits held in escrow 8,419,589 38,312,181 40,982,895 5,748,875 Total liabilities $ 13,484,243 $ 387,609,474 $ 390,851,032 $ 10,242,685 176 Statistical Section This part of the Indian River County Comprehensive Annual Financial Report presents detailed information as a context for understanding what the information in the financial statements, note disclosures and required supplementary information says about the County's overall financial health. Contents Pae s Financial Trends (Schedules 1 - 5) 178-1.88 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) 189-193 These schedules contain information to help the reader assess the County's most significant local revenue source, the property tax. Debt Capacity (Schedules 10 - 1.4) 194-201. These schedules present information to help the reader assess the affordability of the County's current levels of outstanding debt and the County's ability to issue additional debt in the future. Demographic and Economic Information (Schedules 15- 16) 202-203 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 17 - 20) 204-215 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 21 -25) 216-220 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. 177 Indian River County,Florida Net Position by Component(Unaudited) Last Ten Fiscal Years (accrual basis of accounting) 2006 2007 2008 2009 Governmental activities Net investment in capital assets $ 278,213,361 $ 374,501,758 (A) $ 445,541,175 $ 461,709,848 Restricted 158,046,966 173,236,941 (B) 163,119,085 158,306,364 Unrestricted 121,561,389 60,726,026 (B) 55,081,576 55,914,407 Total governmental activities net position $ 557,821,716 $ 608,464,725 $ 663,741,836 $ 675,930,619 Business-type activities Net investment in capital assets $ 152,168,135 $ 174,540,682 $ 206,069,196 $ 223,273,040 Restricted 89,071,967 83,840,471 75,814,407 51,021,928 Unrestricted 53,751,547 47,338,783 24,624,779 37,122,462 Total business-type activities net position $ 294,991,649 $ 305,719,936 $ 306,508,382 $ 311,417,430 Primary government Net investment in capital assets $ 430,381,496 $ 549,042,440 $ 651,610,371 $ 684,982,888 Restricted 247,118,933 257,077,412 238,933,492 209,328,292 Unrestricted 175,312,936 1.08,064,809 79,706,355 93,036,869 Total primary government net position $ 852,813,365 $ 914,184,661 $ 970,250,218 $ 987,348,049 (A)Completed construction and renovations for beach renourishment,County administration buildings,emergency operations center,five fire stations, County park improvements,and the purchase of environmentally sensitive lands. (B)The County reclassified special revenue funds from unrestricted to restricted net position. (C)The County reclassified water and sewer funds from restricted to unrestricted net position. 178 Schedule 1 2010 2011 2012 2013 2014 2015 $ 480,243,738 $ 492,300,301 $ 509,076,923 $ 518,255,719 $ 514,764,316 $ 520,214,002 132,928,838 125,452,516 121,189,228 117,321,755 116,203,827 128,580,087 85,810,359 84,860,897 76,523,757 71,830,421 72,873,567 7,158,887 $ 698,982,935 $ 702,613,714 $ 706,789,908 $ 707,407,895 $ 703,841,710 $ 655,952,976 $ 223,375,337 $ 217,876,742 $ 211,631,529 $ 210,772,860 $ 211,660,190 $ 213,114,279 27,898,292 24,230,101 17,941,773 20,871,037 -(C) - 54,592,201 61,041,483 70,286,599 68,686,611 88,420,541 91,057,348 $ 305,865,830 $ 303,148,326 $ 299,859,901 $ 300,330,508 $ 300,080,731 $ 304,171,627 $ 703,619,075 $ 710,177,043 $ 720,708,452 $ 729,028,579 $ 726,424,506 $ 733,328,281 160,827,130 149,682,617 139,131,001 138,192,792 116,203,827 128,580,087 140,402,560 145,902,380 146,810,356 140,517,032 161,294,108 98,216,235 $ 1,004,848,765 $ 1,005,762,040 $ 1,006,649,809 $ 1,007,738,403 $ 1,003,922,441 $ 960,1242603 179 Indian River County,Florida Changes in Net Position(Unaudited) Last Ten Fiscal Years (accrual basis of accounting) 2006 2007 2008 2008 Expenses Governmental activities: General government $ 14,642,124 $ 15,506,424 $ 7,416,850 $ 25,837,007 Public safety 58,578,985 42,050,455(G) 70,973,212(H) 71,221,082 Physical environment 8,490,570(B) 34,998,512(B) 27,974,837 813,580 Transportation 22,011,006 26,173,989 25,742,974 23,711,653 Economic environment 1,077,731 950,024 4,583,763(I) 661,897 Human service 12,270,899(C) 13,925,599 12,590,578 8,453,562 Cultural/recreation 11,546,217 31,196,252(E) 9,510,029 24,559,117(L) Court related 6,014,793 6,870,466 7,265,471 6,765,203 Interest on long-term debt 2,315,372(D) ___ 3,220,907(D) 2,7_64,803 __ 2,906,802 Total governmental activities expenses 136,947,697 174,892,628 168, 822,517 164,929,903 Business-type activities: Water and sewer 33,387,825 37,518,226 41,354,025(J) 37,523,097 Solid waste 11,558,323 10,331,431 11,355,697 10,407,437 Golf course 3,058,307 3,084,837 2,775,497 2,937,141 Other 4,202,588 3,703,658 3,010,668 2,168,894 Total business-type activities expenses 52,207,043 54,638,152 58,495,887 53,036,569 Total primary government expenses $ 189,154,740 $ 229,530,780 $ 227,318,404 $ 217,966,472 Program Revenues Governmental activities: Charges for services: General government $ 10,437,774 $ 7,957,770 $ 6,943,354 $ 6,028,321 Public safety 7,151,354 5,728,644 5,754,082 5,884,118 Physical environment 854,219 1,447,553 972,865 636,219 Transportation 16,619,853 5,618,055 5,478,734 2,157,456(M) Human service 754,916 545,305 331,856 204,299 Cultural/recreation 5,480,612 2,425,679 1,730,471 1,322,785 Court related 2,466,882 2,800,680 2,971,093 2,375,430 Operating grants and contributions 13,420,891 25,561,608(F) 15,227,659 11,077,388 Capital grants and contributions 13,081,116 13,441,915 29,165,641(K) 15,032,731 Total governmental activities program revenues 70,267,617 65,527,209 68,575,755 44,718,747 Business-type activities: Charges for services: Water and sewer 28,029,062 27,541,849 27,876,971 26,957,649 Solid waste 13,741,864 11,946,566 10,758,812 9,713,883 Golf course 3,306,424 3,374,772 3,313,994 3,279,135 Other 4,746,668 3,250,585 2,726,888 1,572,693 Operating grants and contributions 1,235,413 72,828 217,751 1,194,994 Capital grants and contributions 26,781,118(A) 9,729,371 10,802,859 3,748,585 Total business-type activities program revenues 77,840,549 55,915,971 55,697,275 46,466,939 Total primary government program revenues $ 148,108,166 $ 121,443,180 $ 124,273,030 $ 91,185,686 Notes: (A)Contributions for water and sewer services by developers due to significant increase in County population. (B)Environmentally sensitive lands purchased with bond proceeds. (C)Significant increase in SHIP programs due to population growth and building boom in 2005. (D)Issued new Limited G.O.B.debt for$48,600,000. (E)Completed sections of beach renourishment program. (F)Grants received for beach renourishment,environmental sensitive lands,and various road projects. (G)Includes adjustment for prior years'public safety expenses. (H)Includes full year impact of increase in personnel,raises,and the depreciation and operating cost of new jail. (I)Piper incentive of$4 million. (J)Increase in operating costs due to maintenance projects. (K)Received$16 million grant reimbursements for physical environment grants including beach restoration and stormwater. (L)Increase due to$5 million contribution towards joint use library and increased depreciation for beach restoration projects. (M)Decrease due to reduced impact fees collections(slowdown in construction activity). (N)Received Neighborhood Stabilization Grant of$2.6 million. (0)Contribution of$4.2 million for Sector 3 beach renourishment from Sebastian Inlet District. (P)State Shared Revenues reclassified to operating grants and contributions. 180 Schedule 2 2010 2011 2012 2013 2014 2015 $ 23,506,576 $ 21,324,680 $ 19,069,181 $ 20,637,750 $ 22,968,835 $ 24,732,636 68,235,492 67,393,943 66,456,674 66,178,467 66,954,956 66,364,113 1,405,690 1,353,074 2,424,109 1,858,307 1,031,710 1,636,749 20,861,672 22,300,819 23,629,799 26,286,998 23,577,720 25,992,461 2,525,988 2,056,453 1,986,091 2,550,157 1,084,204 421,057 7,370,995 7,762,962 7,749,253 6,818,023 7,136,042 7,352,777 16,009,122 16,484,242 18,089,432 19,369,326 16,610,269 17,011,188 6,251,773 5,774,032 5,635,245 5,835,184 6,360,81.4 6,677,054 2,714,422 2,526,114 2,350,241 2,087,204 1,944,229 11013,527 148,881,730 146,976,319 147,390,025 151,621,416 147,668,779 151,201,562 34,748,276 33,818,640 34,246,967 33,815,749 35,821,287 35,223,882 10,683,984 10,370,476 10,659,004 10,405,143 10,801,408 11,708,383 2,715,607 2,537,665 2,451,603 2,537,525 2,588,424 2,498,397 1,858,420 1,623,862 1,487,515 1,547,815 1,833,528 7,085,190 50,006,287 48,350,643 48,845,089 48,306,232 51,044,647 51,515,852 $ 198,888,017 $ 195,326,962 $ 196,235,114 $ 199,927,648 $ 198,713,426 $ 202,717,414 $ 5,889,678 $ 5,845,567 $ 5,304,385 $ 5,482,814 $ 5,895,424 $ 6,641,363 5,267,209 6,076,085 5,852,093 6,625,924 8,025,849 6,457,584 21,006 24,204 20,923 5,900 20,970 - 1,514,132(M) 2,090,194 2,345,186 2,768,107 3,365,961 4,273,591 295,812 346,689 358,279 213,485 211,294 277,279 1,328,225 1,340,550 1,397,660 1,765,912 1,883,347 1,941,993 545,967 501,980 414,356 1,301,135 3,592,298 3,308,235 15,772,265(N) 7,926,832 8,230,411 26,921,514(P) 22,229,254 24,872,734 7,016,429(0) 1,937,488 7,053,494 6,681,421 7,521,538 11,671,085 37,650,723 26,089,589 30,976,787 51,766,212 52,745,935 59,443,864 27,738,920 27,842,092 28,361,246 28,522,667 29,565,901 30,089,101 8,972,136 9,221,396 9,582,955 9,998,410 10,272,415 11,455,302 3,148,029 3,163,062 3,216,471 3,072,332 3,080,960 3,235,879 1,612,870 1,588,934 1,735,713 2,018,104 2,417,724 2,958,488 1,713,074 1,923,271 2,545,759 4,700,473 5,032,042 8,616,416 43,185,029 43,738,755 45,442,144 48,311,986 50,369,042 56,355,186 $ 80,835,752 $ 69,828,344 $ 76,418,931 $ 100,078,198 $ 103,114,977 $ 115,799,050 Continued 181 Indian River County,Florida Changes in Net Position(Unaudited) Last Ten Fiscal Years (accrual basis of accounting) 2006 2007 2008 2009 Net(Expense)/Revenue Governmental activities $ (66,680,080) $ (109,365,419) $ (100,246,762) $ (120,211,156) — ------ ----( .- (6r 39) Business-type activities 25,633,506 ]277,819 2,798,612 569,6 Total primary government net expenses $ (41,046,574) $ (108,087,600) $ (103,045,374) $ (126,780,786) General Revenues and Other Changes in Net Position Governmental activities: Property taxes,levied for general purposes $ 82,448,807(A) $ 92,592,309 $ 92,483,561 $ 87,265,989 Property taxes,levied for debt service 2,465,462 7,094,485 7,343,180 7,131,231 Sales and use taxes 21,855,885 20,738,502 20,088,899 19,292,179 Franchise fees 9,318,394 9,732,773 9,443,399 9,670,169 State shared revenues 13,043,670 12,368,421 11,596,227 11,227,450 Insurance recoveries 1,104,116 - - - Interest earnings 12,163,993 16,004,890 10,347,019 5,747,573 Miscellaneous 2,089,540 1,583,343 2,170,033 2,018,901 Transfers 5,060,846(B) (106,295) 2,051,555 (7,452,905) Total governmental activities 149,550,713 160,008,428 155,523,873 134,900,587 Business-type activities: State shared revenues - - - 417,500 Interest earnings 6,335,240 9,209,517 5,553,239 3,685,805 Miscellaneous 42,554 134,656 85,374 7,893 Transfers ..............5,060,846 (B) - 106,295 (2,051,555) 7,452,905 Total business-type activities 1,316,948 9,450,468 3,587,058 11,564,103 Total primary government $ 150,867,661 $ 169,458,896 $ 159,110,931 $ 146,464,690 Change in Net Position Governmental activities $ 82,870,633 $ 50,643,009 $ 55,277,111 $ 14,689,431 Business-type activities 26,950,454 10,728,287 788,446 4,994,473 Total primary government change in net position $ 109,821,087 $ 61,371,296 $ 56,065,557 $ 19,683,904 Notes: (A)Taxable values increased by$2 billion. (B)Transfers for proportionate share of new County administration building. (C)Gain on sale of capital assets due to the privatization of the County landfill. (D)State Shared Revenues reclassified to operating grants and contributions. 182 Schedule 2 2010 2011 2012 2013 2014 2015 $ (111,231,007) $ (120,886,730) $ (116,413,238) $ (99,855,204) $ (94,922,844) $ (91,757,698) (6,821,258) (4,611,888) (3,402,945) 5,754 (675,605) 4,839,334 $ (118,052,265) $_(125,498,618) $_ 119,816,183) $ (99,849,450) $_(95,598,449) $ (86,918,364) $ 78,670,463 $ 69,856,750 $ 64,753,566 $ 62,305,177 $ 67,985,321 $ 71,825,109 5,933,535 5,600,767 5,574,183 4,664,885 4,730,556 4,795,927 19,022,728 19,261,033 20,144,820 21,035,360 21,860,958 23,549,042 9,254,621 8,730,861 8,620,401 8,818,952 9,310,711 9,180,652 17,487,653 17,328,867 17,908,806 -(D) - - 2,079,873 1,299,894 668,012 637,099 542,542 1,051,822 2,061,415 3,082,481 3,079,701 2,903,771 2,459,033 1,799,538 (25,965) (643,1.44) (32,957) - (44,000) (3,057,421) 134,484,323 124,517,509 120,716,532 100,365,244 106,845,121 109,144,669 1,173,512 723,870 600,116 427,041 381,497 625,525 70,181 562,651(C) 8,400 37,812 331 56,887 25,965 643,144 32,957 - 44,000 3,057,421 1,269,658 1,929,665 641,473 464,853 425,828 3,739,833 $ 135,753,981 $ 126,447,174 $ 121,358,005 $ 100,830,097 $ 107,270,949 $ 112,884,502 $ 23,253,316 $ 3,630,779 $ 4,303,294 $ 510,040 $ 11,922,277 $ 17,386,971 (5,551,600... --------- X2,682,223) ---------(2,761,472) ------470,607 ------------------(249,777) -------8,579,167- $ 17,701,716 $ 948,556 $ 1,541,822 $ 980,647 $ 11,672,500 $ 25,966,138 183 Indian River County, Florida Fund Balances, Governmental Funds (Unaudited) Last Ten Fiscal Years (modified accrual basis of accounting) 2006 2007 2008 -2009 General Fund Reserved $ - $ - $ 8,000,000 $ 8,000,000 Unreserved 45,300,882 50,321,956 44,874,259 47,616,773 Total general fund $ 45,300,882 $ 50,321,956 $ 52,874,259 $ 55,616,773 All other governmental funds Reserved $ 38,075,117 $ 23,047,708 $ 49,667,320 $ 53,252,040 Unreserved,reported in: Special revenue funds 183,318,603 1.49,564,925 96,950,614 91,600,421. Total all other governmental funds $ 221,393,720 $ 1.72,612,633 $ 146,61.7,934 $ 144,852,461. Total governmental funds $ 266,694,602 $ 222,934,589 $ 199,492,193 $ 200,469,234 General Fund Nonspendable Restricted Committed Assigned Unassigned Total general fund All other governmental funds Nonspendable Restricted Committed Assigned Unassigned Total all other governmental funds Total governmental funds Notes: (A)The County implemented GASB Statement 54,Fund Balance Reporting and Governmental Fund Types,in fiscal year 2010. (B)Reclassified emergency/disaster and budget stabilization reserves from Committed to Unassigned fund balance categories. (C)Budget appropriation of fund balance to balance budget no longer necessary. 184 Schedule 3 2010(AZ 2011 2012 2013 2014 2015 $ N/A $ N/A $ N/A $ NIA $ N/A $ N/A N/A N/A N/A N/A N/A N/A $ N/A $ N/A $ N/A $ N/A $ N/A $ N/A $ N/A $ N/A $ N/A $ N/A $ N/A $ N/A N/A N/A N/A N/A N/A N/A N/A N/A N/A N/A N/A N/A $ N/A $ N/A $ N/A $ N/A $ N/A $ N/A $ -------- N/A $ -------------N/A $ N/A $ --------N/A- $ -------N/A $--------------------------------N/A $ 162,760 $ 363,619 $ 311,241 $ 1,224,835 $ 1,134,846 $ 459,546 18,290 50,015 1,120,087 1,000,000 1,000,000 1,000,000 21,757,565 21,041,045 2,374,790 (B) 2,370,079 1,223,183 1,092,575 1,415,000 1,660,000 1,808,000 900,000 - (C) - 33,160,873 33,694,612 48,722,929 (B) 44,385,674 48,320,836 47,727,109 $ 56,514,488 $ 56,809,291 $ 54,337,047 $ 49,880,588 $ 51,678,865 $ 50,279,230 $ 2,316,373 $ 814,858 $ 557,128 $ 50,788 $ 39,337 $ 69,907 130,175,284 125,082,370 116,379,943 112,523,743 112,266,321 120,531,318 4,691,573 4,661,146 1,483,393 1,481,312 1,492,929 1,504,391 9,471,022 10,013,457 11,288,602 8,964,238 8,139,695 7,139,358 1,184,722) (354,995 _(202,97 (339,223) 201,587 (439,479) $ 145,469,530 $ 140,216,836 $ 129,506,095 $ 122,680,858 $ 121,736,695 $ 128,805,495 $ 201,984,018 $ 197,026,127 $ 183,843,142 $ 172,561,446 $ 173,415,560 $ 179,084,725 185 Indian River County,Florida Changes in Fund Balances,Governmental Funds(Unaudited) Last Ten Fiscal Years (modified accrual basis of accounting) 2006 2007 2008 2009 Revenues Taxes $ 116,088,548 $ 130,1.58,069 $ 130,1.58,069 $ 113,689,399 Permits,fees,and special assessments 26,285,557 8,397,437 8,397,437 12,433,598 Intergovernmental 38,261,489 54,252,074 54,252,074 34,305,682 Charges for services 18,204,600 18,997,529 18,997,529 16,852,653 Judgments,fines and forfeits 2,069,593 2,403,093 2,403,093 1,792,517 Interest 10,574,489 15,777,318 15,777,318 5,721,869 Miscellaneous 4,597,369 3,495,610 3,495,610 2,489,532 Total Revenues 216,081,645 233,481,1.30 233,481,1.30 1.87,285,250 Expenditures Current: General government 21,831,839 24,815,255 24,815,255 22,566,113 Public safety 65,975,870 72,907,822 72,907,822 74,813,164 Physical environment 8,955,262 34,324,331 34,324,331 910,213 Transportation 30,610,413 49,503,680 49,503,680 38,111,512 Economic environment 1,054,239 968,227 968,227 653,547 Human service 12,470,222 13,862,463 13,862,463 8,621,760 Culture/recreation 16,380,438 23,751,173 23,751,173 15,450,688 Court related 5,91.5,727 6,649,724 6,649,724 6,620,830 Debt service: Principal 2,61.5,659 4,870,876 4,870,876 5,120,000 Interest and fiscal charges 1,790,431 3,255,767 3,255,767 2,948,758 Capital outlay 37,848,475 42,489,997 42,489,997 10,435,212 Total Expenditures 205,448,575 277,399,315 277,399,315 186,251,797 Excess of revenues over (under)expenditures 10,633,070 (43,918,185) (43,918,185) 1,033,453 Other Financing Sources(Uses) Debt issuance 49,996,735 - - - Issuance of refunding notes - - - - Payments from capital leases - 264,467 264,467 - Transfers out (236,067) (1.9,736,023) (19,736,023) (1.4,366,1.45) Payments to refunded bond escrow agent - - - - Transfers in 10,067,988 19,629,728 19,629,728 14,309,733 Total other financing sources(uses) 59,828,656 158,172 158,172 (56,412) Net change in fund balances $ 70,461,726 $ (43,760,013) $ (43,760,013) $ 977,041 Debt service as a percentage of noncapital expenditures 3.4% 4.8% 4.8% 5.4% (A)Early call of remaining General Obligation Bonds,Series 2001 of$3.6 million. (B)Payoff of portion of Spring Training Bonds,Series 2001 of$2.275 million. (C)Refunded all of General Obligation Bonds, Series 2006 with a fixed rate 7-year note. (D)Completed widening of major north-south road. 186 Schedule 4 2010 2011 2012 2013 2014 2015 $ 103,626,726 $ 94,718,550 $ 90,472,569 $ 88,005,422 $ 94,585,345 $ 100,170,078 11,322,039 11,189,393 11,486,235 12,769,844 14,321,389 15,567,731 37,687,574 30,453,182 29,759,832 30,086,479 30,563,650 32,065,821 14,665,805 15,030,329 14,760,125 15,887,241 18,076,888 18,55 8,182 852,012 936,995 739,275 778,575 1,004,374 897,860 2,061,385 1,173,103 613,023 570,559 463,274 894,705 2,383,493 4,175,614 5,237,426 3,841,294 3,221,548 2,470,553 172,599,034 157,677,166 153,068,485 151,939,414 162,236,468 170,624,930 20,894,116 19,271,196 20,477,898 19,056,322 20,681,570 22,957,111 71,489,613 70,432,615 67,761,985 66,908,328 67,799,667 71,703,248 1,131,173 1,371,734 1,751,623 771,942 781,306 1,055,021 27,497,907 28,432,207 29,058,310 28,223,229 23,321,248 27,945,569 2,520,339 2,099,698 2,021,184 2,581,401 1,106,886 436,320 7,267,406 7,625,369 6,888,883 6,952,460 7,1.78,542 7,519,756 18,453,642 1.4,706,1.94 13,808,303 11,538,809 11,627,286 15,719,709 6,214,831 5,983,085 5,860,925 6,054,822 6,487,906 6,677,909 5,31.5,000 4,270,000 8,060,000 (A) 6,050,000 (B) 3,700,000 4,180,000 2,758,138 2,562,374 2,426,083 2,118,704 1,984,616 1,266,070 7,487,068 5,825,287 8,108,370 13,037,552 16,560,991 5,309,597 (D) 171,029,233 162,579,759 166,223,564 163,293,569 161,230,018 164,770,310 1,569,801 (4,902,593) (13,155,079) (11,354,155) 1,006,450 5,854,620 - - - - - 20,369,000 (C) (17,057,014) (8,918,267) (11,622,984) (12,540,187) (10,244,980) (11,354,519) - - - - - (20,340,959) (C) 17,001,997 8,862,969 11,595,078 12,504,699 10,092,644 11,141,023 _____(55,017 _ (55,298) ____ (27,906) ..............�35,48� - f152,336) -(185,455) $ 1,514 784 $ (4,957,891) $ __ 13,182,985 $ (11,389,643)_ $ 854,114 $ 5,669,165 5.6% 5.0% 7.6% 6.0% 4.3% 3.8% 187 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 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 2013 66,970,062 14,422,829 1,743,283 - 3,303,751 1,565,497 88,005,422 2014 72,715,877 15,228,304 1,918,201 - 3,294,709 1,428,254 94,585,345 2015 76,621,036 16,190,352 2,267,101 - 3,672,972 1,418,617 100,170,078 (A)The County's primary source of revenue is property taxes,amounting to 76 percent of Governmental Funds tax revenues in 2015. Consequently,supplemental required schedules are provided only for property tax revenues. (B)Effective 10/01.107,the State of Florida changed its uniform accounting manual to remove franchise fees from the taxes designation. 188 Indian River County,Florida Assessed Value and Actual Value of Taxable Property(Unaudited) Last Ten Fiscal Years Schedule 6 Real Personal Less: Total Taxable Total Fiscal Property Property Total Tax-Exempt Assessed Direct Year Actual Value Actual Value Actual Value Property Value Tax Rate 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 4.1.493 2010 21,272,439,325 761,01.1,306 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 2013 16,563,604,291 635,119,066 17,198,723,357 4,497,471,382 12,701,251,975 4.1625 2014 16,832,196,339 697,294,522 17,529,490,861 4,670,052,667 12,859,438,194 4.3353 2015 17,855,660,837 696,658,855 1.8,552,319,692 5,150,260,231 13,402,059,461 4.41.08 Source:Indian River County Property Appraiser;values are established as of January 1 of the previous calendar year,i.e.,January 1,2014 taxable values apply to the fiscal year ending September 30,2015. 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. 189 Indian River County,Florida Property Tax Rates Direct and Overlapping Tax Rates(Unaudited) Last Ten Fiscal Years 2006 2007 2008 2009 County direct rate General fund 3.5204 3.1914 3.0202 3.0689 Municipal service 1.3969 1.1336 1.0835 1.0804 Total direct rate(A) 49173 4.3250 4.1037 4.1493 County-wide district school board rate 8.2400 7.4430 7.5380 7.0400 Other County-wide rates Emergency Management Services District 1.9911 1.7639 1.7201 1.7148 Land acquisition bond 0.1.789 0.4108 0.4082 0.4220 Total other County-wide rates 2.1.700 2.1747 2.1283 2.1368 Total County-wide rate(B) 15.3273 13.9427 13.7700 13.3261 City rates Fellsmere 5.7500 5.7500 4.4301 4.4300 Indian River Shores 1.4730 1.4730 1.3923 1.3923 Sebastian 3.9325 3.0519 2.9917 3.3456 Orchid 0.6900 0.4525 0.4494 0.4550 Vero Beach 2.2925 2.1425 1.9367 1.9367 Average of cities rates 2.8276 2.5740 2.2400 2.3119 Other special district rates 1.6082 1.4795 1.3817 1.5362 (A)Per Florida State Statute 200.081,no ad valorem tax millage shall be levied against real property and tangible personal property by counties in excess of 10 mills,except for voted levies. (B)Total County-wide rate is borne by all property owners within the County boundaries. Source:Indian River County Property Appraiser 190 Schedule 7 2015 -----2010---- ------ ------------------- 2011 2012 -------- ---------------------2013 -------- ------------2014-- --------- --------- -------------- 3.0892 3.0892 3.0892 3.0892 3.2620 3.3375 1.0774 1.0733 1.0733 1.0733 1.0733 1.0733 4.1666 4.1625 4.1625 4.1625 4.3353 4.4108 7.5960 8.2500 8.2440 8.3130 8.1160 7.9950 1.7148 1.7148 1.7148 1.71.48 1.9799 1.9799 0.3879 0.4087 0.4364 0.3799 0.3788 0.3694 2.1027 2.1235 2.1512 2.0947 2.3587 2.3493 _______ 13.8653 14.5360 14.5577 _____ 14.5702 ________ ____ 14.8100 14.7551 4.4300 4.4300 5.2455 5.4999 5.6190 5.5309 1.3923 1.4105 1.4731 1.4731 1.4731 1.6786 3.3456 3.3041 3.3041 3.7166 3.7166 3.8556 0.4550 0.4550 0.4550 0.5000 0.4864 0.5500 1.9367 1.9367 2.0336 2.0336 2.0336 2.0336 2.3119 2.3073 2.5023 2.6446 2.6657 2.7297 1.7515 1.7663 1.6856 1.6859 1.7128 1.7126 191 Indian River County,Florida Principal Property Taxpayers(Unaudited) Year 2015 and Year 2006 Schedule 8 2015 2006 Real Percentages Real Percentages Property of Total Property of Total Assessed Assessed Assessed Assessed Taxpayer ________ ___ Valuation Rank Valuation _______Valuation Rank Valuation Florida Power&Light $ 112,933,476 1 0.84% $ 83,146,300 2 0.58% Disney Vacation Dev.Inc. 77,340,700 2 0.58 86,931,558 1 0.61 Windsor Properties 40,149,993 3 0.30 39,820,277 6 0.28 Johns Island Club Inc. 39,786,080 4 0.30 40,002,227 5 0.28 Adult Community Services Inc. 37,143,645 5 0.28 32,836,850 7 0.23 AT&T 36,518,283 6 0.27 - - Wells Fargo 28,977,860 7 0.22 - - Piper Aircraft Inc. 23,356,342 8 0.17 30,705,574 8 0.22 MHC Village Green 22,358,570 9 0.17 - - Wal-Mart Stores 21,562,877 10 0.16 28,541,120 9 0.20 Bellsouth Communications - 60,663,012 3 0.43 Indian River Mall Assoc.Inc. - 56,938,710 4 0.40 Fellsmere Joint Venture - 25,388,284 10 0.18 Total Principal Property Taxpayers Real Property Assessed Valuation $ 440,127,826 3.29% $ 484,973,912 3.41% Total County Taxable Valuation $ 13,402,059,461 $ 14,242,984,935 (from schedule 6) Source: Indian River County Property Appraiser 192 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 Q) Collections To Tax Levy 2006 $ 87,754,823 $ 84,736,835 96.56% $ 34,344 $ 84,771,179 96.60% 2007 102,986,045 99,404,127 96.52 61,566 99,465,693 96.58 2008 103,700,766 99,716,496 96.16 48,241 99,764,737 96.20 2009 97,439,623 94,107,423 96.58 273,002 94,380,425 96.86 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 2013 69,251,173 66,838,348 96.52 111,341 66,949,689 96.68 2014 75,101,883 72,572,593 96.63 149,546 72,722,139 96.83 2015 79,309,078 76,537,192 96.50 91,754 76,628,946 96.62 All taxes are due and payable on November 1 of each year or as soon thereafter as the assessment roll is certified and delivered to the Tax Collector. All unpaid taxes become delinquent on April 1 following the year in which they are assessed. Discounts are allowed for early payment at the rate of 4%in the month of November,3%in the month of December,2%in the month of January and I%in the month of February. The taxes paid in March are without discount. (1)On or prior to June 1 following the tax year,certificates are sold for all delinquent taxes on real property. After the sale, tax certificates bear interest of 18%per year or at any lower rate bid by the buyer. Application for a tax deed on any unredeemed tax certificates may be made by the certificate holder after a period of two years. Unsold certificates are held by the County. Delinquent taxes on personal property bear interest of 18%per year until the tax is satisfied either by seizure and sale of the property or by the seven year statute of limitations. The County does not accrue its portion of the County-held certificates due to the immaterial amount. Source:Indian River County Property Appraiser and Tax Collector provided the above information;consequently,the reported collections on this schedule will vary from the actual collections as reported on Schedule 5. The Tax Collector does not report the interest earnings on the collections,however,the County includes those interest earnings as part of the total tax collection. 193 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) 2006 $ 62,630,060 $ - $ 14,520,000 $ 5,089,099 $ 193,786 $ 62,416,115 2007 58,441,835 8,591 14,000,000 4,618,728 110,025 59,908,097 2008 53,958,611 - 13,455,000 4,138,356 28,126 57,285,080 2009 49,305,387 - 12,895,000 3,652,985 - 56,123,413 2010 44,482,163 - 12,310,000 3,147,614 - 53,016,507 2011 40,723,939 - 11,705,000 2,632,243 - 49,789,603 2012 33,200,714 - 11,075,000 2,101,871 - 46,462,698 2013 29,987,489 - 8,145,000 - - 43,020,793 2014 26,639,265 - 7,700,000 - - 39,433,889 2015 23,594,000 - 7,230,000 - - 28,252,234 (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.The Series 2006 bonds were refinanced in fiscal year 2015. This information is also presented on Schedules 11 and 13. (B)Recreational Revenue Refunding Bonds, Series 2003. The remaining balance was called early on September 30, 2013. (C)Water& Sewer Bonds include Series 1993, Refunding Series 2005, and Series 2009. The Series 2005 bonds were refinanced in fiscal year 2015. (D)Information not available. (E)Refer to Schedule 15 for personal income and population information Further information may be found in Note 12. Source of per capita income is University of Florida,Bureau of Economic and Business Research. 194 Schedule 10 Percentage Total of Total Debt Debt Primary to Personal Per Government Income (E) Capita(E) $ 144,849,060 2.07% $ 1,071 137,087,276 1.76 981 128,865,173 1.68 910 121,976,785 1.60 862 112,956,284 1.69 81.8 104,850,785 1.48 756 92,840,283 1.25 666 81,153,282 1.05 581 73,773,154 0.81 523 59,076,234 (D) 412 195 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 l l 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 2006 135,262 $ 14,242,984,935 $ 62,630,060 $ 1,375,837 $ 61,254,223 0.0043 $ 452.8561 2007 139,757 17,847,161,614 58,441,835 1,956,189 56,485,646 0.0032 404.1704 2008 141,667 18,580,296,938 53,958,611 2,530,612 51,427,999 0.0028 363.0203 2009 141,475 17,449,270,077 49,305,387 2,841,769 46,463,618 0.0027 328.4228 2010 138,028 15,796,158,693 44,482,163 1,845,314 42,636,849 0.0027 308.9000 2011 138,694 14,139,034,830 40,723,939 1,743,781 38,980,158 0.0028 281.0515 2012 139,446 13,205,004,567 33,200,714 1,002,540 32,198,174 0.0024 230.9007 2013 139,586 12,701,251,975 29,987,489 828,029 29,159,460 0.0023 208.8996 2014 140,955 12,859,438,194 26,639,265 832,464 25,806,801 0.0020 183.0854 2015 143,326 13,402,059,461 23,594,000 967,599 22,626,401 0.0017 157.8667 (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. The Series 2006 debt was refinanced in fiscal year 2015. Gross G.O.B.debt is also presented on Schedules 10 and 13. Total taxable assessed values also appear on Schedule 6 and 8. Source of population data is the University of Florida,Bureau of Economic and Business Research. 196 Indian River County, Florida Computation of Legal Debt Margin (Unaudited) September 30, 2015 Schedule 12 Computation of the Legal Debt Margin is omitted because the Constitution of the State of Florida (F.S. 200.181) and Indian River County set no legal debt limit. 197 Indian River County,Florida Direct and Overlapping Governmental Activities Debt(Unaudited) September 30,2015 Schedule 1.3 Governmental Unit Share of Debt Percentage Overlapping Debt repaid with property taxes: Outstanding Applicable Debt Indian River County Limited General Obligation Bonds, Series 2006 $ 3,545,000 100% $ 3,545,000 Indian River County Limited General Obligation Refunding Note, Series 2015 20,049,000 100 20,049,000 Revenue Bonds-Spring Training Facility-Series 2001 7,230,000 100 7,230,000 Total direct debt of County: 30,824,000 Other debt: Indian River County School District Certificates of Participation 113,923,1.71 (A) 1.00 113,923,171 Total overlapping debt: 113,923,171 Total direct and overlapping debt: $ 144,747,171 (A) Indian River County School District,as of June 30,2015 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. 198 199 Indian River County,Florida Pledged Revenue Coverage(Unaudited) Water and Sewer Revenue Bonds (Series 1993A, 1996,2005,2009) Last Ten Fiscal Years 2006 2007 2008 2009 Uniform Charges Water sales $ 13,336,623 $ 13,529,341 $ 13,435,398 $ 13,001,743 Wastewater sales 11,634,181 12,003,677 12,128,706 11,954,333 Other 1,744,486 1,3 86,198 1,460,143 1,285,605 Total uniform charges 26,71.5,290 26,91.9,21.6 27,024,247 26,241,681 Septage/Sludge 332,329 290,955 256,785 294,459 Surcharges 244,166 243,919 245,343 244,619 Interest earnings 4,554,419 6,576,873 3,650,480 2,110,031 1989/1990 Special assessments 60,229 21,138 112 413 1996 Special assessments 350,712 268,883 220,754 184,272 Grossrevenues 32,257,145 34,320,984 31,397,721 29,075,475 Less:Direct expenses 14,270,414 16,226,651 17,147,444 17,057,273 Net revenues available for debt service $ 17,986,731 $ 18,094,333 $ 14,250,277 $ 12,018,202 Annual debt service Principal $ 2,390,000 $ 2,505,000 $ 2,620,000 $ 2,745,000 Interest 3,157,260 3,041,150 2,922,950 2,047,513 Total debt service payment $ 5,547,260 $ 5,546,150 $ 5,542,950 $ 4,792,513 Debt service coverage 3.24x 3.26x 2.57x 2.51x 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 12. 200 Schedule 14 2010 2011 2012 2013 2014 2015 $ 13,570,657 $ 13,565,766 $ 13,621,878 $ 13,667,115 $ 14,059,231 $ 14,345,074 12,375,346 12,203,750 12,515,394 12,546,429 12,879,006 13,116,393 1,430,966 1,639,985 1,727,411 1,763,426 2,025,378 2,005,106 27,376,969 27,409,501 27,864,683 27,976,970 28,963,615 29,466,573 302,187 314,969 373,616 426,634 478,555 483,828 245,011 245,245 246,298 246,363 242,073 98,163 686,776 491,260 315,377 239,270 258,741 294,303 438 8,718 - - - - 151,316 93,513 75,037 69,757 22,091 30,872 28,762,697 28,563,206 28,875,01.1 28,958,994 29,965,075 30,373,739 16,007,055 1.5,404,503 15,657,085 15,217,294 16,040,433 1.6,129,860 $ 12,755,642 $ 13,158,703 $ 13,217,926 $ 13,741,700 $ 13,924,642 $ 14,243,879 $ 2,870,000 $ 2,990,000 $ 3,090,000 $ 3,205,000 $ 3,350,000 $ 3,485,000 2,510,910 2,324,525 2,193,450 2,080,951 1,937,450 1,827,867 $ 5,380,910 $ 5,314,525 $ 5,283,450 $ 5,285,951 $ 5,287,450 $ 5,31.2,867 2,37x 2.48x 2.50x 2,60x 2.63x 2.68x 201 Indian River County, Florida Demographic and Economic Statistics (Unaudited) Last Ten Years Schedule 15 Total Per Capita Personal Personal Unemployment --------------Year------------- ..........Population__W........ ............Income_(B)................ Income B) Rate (C -------Income_(B)........ ........................ - )----------------------- 2006 135,262 7,002,160,000 54,045 4.7 2007 139,757 7,810,408,000 59,419 7.3 2008 141,667 7,669,062,000 57,107 10.1 2009 141,475 7,610,327,000 47,689 15.2 2010 138,028 6,687,691,000 48,378 15.2 2011 138,694 7,090,634,000 51,041 13.7 2012 139,446 7,429,653,000 52,855 11.3 2013 139,586 7,731,263,000 54,448 8.8 2014 140,955 9,139,920,000 63,140 7.9 2015 143,326 (D) (D) 7.2 Sources: (A) University of Florida, Bureau of Economic and Business Research (B)US Department of Commerce, Bureau of Economic Analysis (C) Florida Agency for Workforce Innovation (D) Information not available The population and personal income information is used in Schedule 10 for calculation of Debt Per Capita and Percentage of Debt to Personal Income. 202 Indian River County, Florida Principal Employers (Unaudited) Year 2015 and Year 2006 Schedule 16 2015 Percentage Number of of Total County EmpIoyerpEmloyees Employment -------------------------------------------------------------------------------------------------------------------------------------------- -------- -— —-------- -------------- ............... School District of Indian River County 2,113 3.79 % Indian River County * 1,328 2.38 Indian River Medical Center 1,753 3.14 Publix Supermarkets 1,250 2.24 Piper Aircraft Inc. 650 1.17 Sebastian River Medical Center 569 1.02 John's Island 526 0.94 City of Vero Beach 424 0.76 Visiting Nurse Association 399 0.72 Indian River Estates 350 0.63 Total 9,362 ------------------16.79% Total County Employees 55,755 2006 Percentage Number of of Total County Employer Employees Employment School District of Indian River County 2,125 3.75 % Indian River County* 1,693 2.99 Indian River Medical Center 1,549 2.73 Publix Supermarkets 974 1.72 Piper Aircraft Inc. 950 1.68 City of Vero Beach 600 1.06 Sebastian River Medical Center 525 0.93 John's Island 475 0.84 Hale Groves 470 0.83 Wal-Mart 462 0.82 Total 9,823 17.34% Total County Employees 56,664 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. Indian River County Chamber of Commerce This includes the Board of County Commissioners, Clerk of the Circuit Court, Supervisor of Elections, Property Appraiser, Sheriff, and the Tax Collector. 203 Indian River County,Florida Building Permits (Unaudited) Last Ten-Fiscal-Years Indian River County Munici- Fiscal #of New #of Additions & #of New Year Permits Construction Permits Alterations Permits Construction 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 1.07,099,115 2008 857 222,191,316 2,686 30,731,235 206 104,188,514 2009 442 97,694,608 1,725 17,102,312 122 41,039,432 2010 394 82,995,613 2,017 20,723,725 122 30,048,727 2011 416 96,301,948 2,288 26,368,020 112 27,812,429 2012 421 95,703,031 2,591 25,060,272 150 37,380,374 2013 562 159,419,936 3,165 32,572,696 278 63,277,504 2014 61.1 190,750,218 4,290 41,977,079 262 81,288,256 2015 666 241,065,285 5,528 53,561,372 239 95,276,289 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. 204 Schedule 17 palities Countywide #of Additions& #of New #of Additions& Permits Alterations Permits Construction Permits Alterations 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 4,433 45,723,356 840 222,697,440 7,598 78,296,052 5,049 57,293,148 873 272,038,474 9,339 99,270,227 5,710 80,276,432 905 336,341,574 11,238 133,837,804 205 Indian River County,Florida Operating Indicators by Function/Program(Unaudited) Last Ten Fiscal Years Function/Program 2006 2007 2008 2009 General Government Purchasing 2,734 2,753 2,520 2,463 Purchase orders issued Public Safety Fire rescue Vehicle rescue response 6,880 32,488 (A) 33,845 34,480 Fire code inspections 2,420 2,593 3,527 5,917 Advanced life support calls 10,728 7,537 5,862 9,085 Basic life support calls(transport only) 11,105 3,643 5,759 3,486 Sheriff Arrests 5,211 5,012 5,620 4,331 Violent crimes 652 338 353 340 Non-violent crimes 3,462 6,192 6,383 6,099 Total calls for service 131,489 126,490 129,389 138,998 Building department Construction permits issued 3,760 1,404 857 442 Estimated value of construction(millions) $ 754.8 $ 280.1 $ 222.2 $ 97.7 Physical Environment Solid waste Waste stream tonnage received 380,109 295,977 239,296 207,344 Total recycled material(tons) 70,919 57,247 42,088 40,931 Utilities-water&sewer Number of water customers 43,477 41,101 42,000 42,972 Number of wastewater customers 25,943 24,666 25,000 25,192 Water ERUs 54,070 61,494 61,558 63,147 Wastewater ERUs 41,351 45,396 45,785 45,319 Water consumption(Average Daily Demand) 8,370,000 8,790,000 8,603,000 8,700,000 (A)Effective September 1.8,2006,Ere and advanced life support combined into Ere rescue. Source:Internal reports prepared by the various departments of Indian River County. 206 Schedule 18 2010 2011 2012 2013 2014 2015 1,970 1,805 1,852 1,740 1,760 1,826 34,529 37,550 39,316 39,340 41,540 45,485 2,358 2,239 1,874 1,992 1,753 1,993 9,751 10,935 10,904 10,991 11,283 11,571 3,269 3,077 3,406 3,544 3,851 4,180 5,065 4,464 3,144 3,885 4,262 3,832 310 394 107 439 552 495 5,719 6,058 6,063 5,683 5,853 5,804 154,480 162,944 176,170 199,687 216,082 250,814 394 416 421 562 611 666 $ 83.0 $ 96.3 $ 95.7 $ 159.4 $ 190.8 $ 241.1 201,561 180,434 205,355 211,382 265,278 265,958 45,298 30,424 53,255 50,792 101,444 86,564 43,723 44,254 44,571 45,216 46,223 46,865 25,205 25,465 25,773 26,233 26,948 27,448 64,146 64,391 64,820 65,477 66,261 66,829 45,427 45,863 46,107 46,576 47,027 47,596 8,225,000 8,198,000 7,798,000 7,558,000 8,620,000 9,200,000 Continued 207 Indian River County,Florida Operating Indicators by Function/Program(Unaudited) Last Ten Fiscal Years Function/Program 2006 2007 2008 2009 Transportation Public works Projects under design 5 5 6 29 Projects awarded for construction 4 5 5 5 Construction projects completed 4 5 5 12 County engineering Roads designed 11 7 8 5 Miles of roads designed 6.50 3.50 6.00 5.00 Traffic engineering Site plans reviewed 1,135 520 332 423 Culture/Recreation Library Circulation(County-wide) 1,140,904 1,188,366 1,250,075 1,314,372 Recreation department Total beach park attendance N/A N/A 415,051 437,302 Athletic and event attedance N/A N/A 8,673 14,730 Aquatic centers attendance 93,088 90,503 90,475 89,787 Shooting range Safety/Registration cards issued 6,036 6,784 6,784 9,050 Golf course Rounds played 107,048 100,539 1.04,716 101,810 Court Related Law library Circulation 26,255 24,759 21,107 18,512 (B)Law library circulation is now included in the County-wide Library Circulation. 208 Schedule 18 2010 2011 2012 2013 2014. 2015 13 26 19 20 43 34 7 7 10 5 7 9 6 8 8 5 20 17 6 4 4 6 8 8 6.00 1.00 8.00 6.00 8.35 10.00 271 218 290 357 387 554 1,403,367 1,362,857 1,277,253 1,300,764 (B) 1,317,458 1,295,310 467,434 449,213 420,609 404,287 434,397 416,962 23,750 24,112 23,979 23,841 23,900 24,073 87,107 98,515 97,965 97,183 105,459 110,186 6,471 8,176 8,302 8,462 7,911 7,655 96,593 94,713 96,723 91,770 90,306 93,739 13,079 9,168 9,428 N/A (B) N/A N/A 209 Indian River County,Florida Full-Time Equivalent County Government Employees by Function/Program(Unaudited) Last Ten Fiscal Years 2006 2007 2008 2009 General Government Board of County Commissioners 10 10 11 10 County Attorney 6 7 7 7 Administration 3 3 3 3 Financial/Administrative Service 24.5 25.5 26.5 23 Comprehensive Planning 23 23 23 19 Other 50 62 49 44.5 Clerk of Circuit Court 113 118 116 99.5 Property Appraiser 49 50 45 40 Supervisor of Elections 1.1.5 12 12 9.5 Tax Collector 40 40 38 38 Public Safety Fire Department 233 232 241 240 Advanced Life Support - (A) Sheriff-Corrections 200 197 197 195 Sheriff-Court Service 26 29.5 29.5 29.5 Sheriff-Law Enforcement 276 301 301 301 Building Department 49 50 33 18 Other 11 12 12 10 Physical Environment Solid Waste 53 53 51 49 Utilities-water and sewer 131 139 1.30 128 Other 13 14 15 9 Transportation Road and Bridges 103 106 100 86.5 County Engineering 39 42 42 33 Traffic Engineering 24 26 24 21 Real Estate Acquisition 0 0 3 2 Economic Environment 6 6 4.5 3.5 Human Services 17 15 15 14.5 Culture/Recreation Libraries 51 52.5 50 45.5 Parks 43 42 41 39 Recreation Department 56 58.5 57.5 46 Coastal Engineering 3 3 3 3 Shooting Range 6 6 5.5 5.5 Golf Course 21.5 21.5 18 16.5 Court Related Law Library 1 1 1 1 Total 1,692.5 1,757.5 1,704.5 1,589.5 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. 210 Schedule 19 2010. 2011 2012. 2013 2014 2015 10 10 8.5 9 9 9 6 6 6 6 6 6 2.72 2.35 2.35 2.35 2.35 2.35 21.5 19.85 19.85 19.35 20.85 21.85 16 14.32 15 15 14.5 14.5 36.5 34 34.75 33.9 33.4 33.4 98.5 98 96 98 93 93 40 36 35 35 36 36 9.5 8 8.5 8.5 9.5 9.5 38 38 38 44 45 47 246 244 243 243 243 244 198 207 163 163 163 163 29.5 29.5 27.5 27.5 27.5 27.5 301 301 303 303 303 303 17 15 14 15 18.5 21.5 9 6.68 6 4 4 4.5 49 10 9 9 9 10 118 112.5 112.5 113.5 116.5 118.5 9 8 8 7 8 8 80 77 77.25 77.1 78.1 78.1 28 27 26 24 24 26 21 20 20 19 19 20 2.28 1 1 1 1 1 3.5 2.5 2.5 2.5 2.5 2.5 13 13 13 12 12 12 47.5 46.5 42 41.5 41.5 42 37 34 28 28 28 28 37.5 33 33.3 32.3 32.8 38.3 2 2 2 2 2 2 5.5 5 5 5 5 5 15.5 15.5 15 13.5 13.5 13.5 1 1 1 1 1 1 1,549.0 1,478.0 1,416.0 1,415.0 1,422.5 1,442.0 211 Indian River County,Florida Capital Asset Statistics by Function/Program(Unaudited) Last Ten Fiscal Years Function/Program 2006 2007 2008 2009 General Government Buildings and grounds Total square footage maintained 493,270 715,215 715,215 715,215 Number of facilities and sites maintained 43 47 47 47 Vehicles 18 17 17 15 General government Vehicles 36 37 28 27 Planning Vehicles 6 7 7 7 GIS Vehicles 1 1 Public Safety Fire department Vehicles 49 54 53 54 Fire stations 11 11 11 11 Advanced life support Vehicles 24 21 20 20 E911 Center Vehicles 1 1 Sheriff Vehicles 274 276 295 291 Building department Vehicles 29 22 13 9 Physical Environment Solid waste Vehicles 33 34 32 30 Telecommunications Vehicles 1 1 Ag Extension Vehicles 2 2 2 2 Utilities-Water and Sewer Vehicles 90 86 82 82 Water treatment plants 2 2 2 2 Wastewater treatment facilities 7 6 6 6 Water main-miles 737 769 780 819 Force main-miles 188 217 240 230 Gravity sewer lines-miles 250 259 261 262 Transportation Road and bridge Miles maintained(paved&unpaved) 614 617 625 628 Bridges maintained 78 78 78 78 Vehicles 66 68 65 65 Source: Internal reports prepared by the various departments of Indian River County. 212 Schedule 20 2010. 2011 2012. 2013 2014 2015 715,215 715,215 720,215 720,215 720,215 720,215 47 47 48 48 48 48 15 15 15 15 16 15 26 31 31 30 30 28 7 7 6 5 6 6 1 1 1 1 1 1 51 51 51 46 47 58 12 12 12 12 12 12 17 18 18 19 19 17 1 1 1 1 1 1 288 298 295 274 293 282 9 9 9 9 10 16 30 1 1 1 1 2 1 1 1 1 1 1 1 1 1 1 1 1 81 81 85 79 80 81 2 2 2 2 2 2 6 6 6 6 6 6 845 839 843 847 852 857 226 229 223 225 225 221 269 271 270 273 269 268 636 636 638 650 650 650 78 75 75 71 72 72 64 67 67 64 64 67 Continued 213 Indian River County,Florida Capital Asset Statistics by Function/Program(Unaudited) Last Ten Fiscal Years Function/Program 2006 2007 2008 2009 Transportation-continued: Senior Resource Association Vehicles 22 25 23 25 Engineering Vehicles 11 12 17 16 Traffic engineering Traffic signals operated 125 132 133 133 Beacons operated 42 42 41 48 Vehicles 6 3 5 3 Traffic operations Vehicles 10 16 1.6 15 Human Services Health department Vehicles 16 16 16 16 Animal Control Vehicles 6 7 7 7 Rental Assistance Vehicles 3 2 2 2 Culture/Recreation Libraries Locations 2 2 2 2 Parks Number of neighborhood parks 12 12 12 12 Number of County parks 47 47 47 47 Acreage 4,004 4,014 4,014 4,014 Picnic shelters maintained 66 69 69 69 Boat ramps maintained 8 8 8 8 Vehicles 23 25 24 25 Recreation Vehicles 5 5 5 5 Shooting range Vehicles - 1 1 1 Rifle range stations - 29 29 29 Pistol range stations 35 35 35 35 Golf Course Holes maintained 36 36 36 36 Vehicles 2 2 2 2 214 Schedule 20 2010 2011. 2012. 2013 2014 2015. 32 34 34 38 35 35 16 16 13 13 13 14 137 137 137 150 150 150 48 53 46 45 45 43 1 1 1 1 1 1 16 18 18 19 21 20 15 15 17 17 17 17 7 7 7 7 6 6 2 2 2 2 2 2 3 3 3 3 3 3 12 12 12 10 10 11 47 47 47 40 37 37 4,014 4,014 4,014 4,014 3,429 3,429 69 69 69 69 69 69 8 8 8 8 8 8 24 25 24 22 23 20 5 5 5 5 5 7 1 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 2 215 Indian River County, Florida Department of Utility Services Historical Rate Structure (Unaudited) ------------------------------------------------------------------------------------------------Last-Ten-Fiscal-Years-------------------------------------------------------------------------- ------------------------Schedule 2 1, Fiscal Years 2006-2015 WATER RATES Billing charges 1.29 Base facilities charges (per ERU) 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 (0-1.3,000) 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 216 Indian River County, Florida Water and Wastewater Customers (Unaudited) Last Ten Fiscal Years Schedule 22 The number of County water and wastewater customers, expressed as the number of equivalent residential units (ERUs), for the years 2006 through 2015 as set forth below: -----------------------Fiscal Year----------------------- -------------------Water--ERUs------------------ --------Was-tewater--ERUs 2006 54,070 41,351 2007 61,494 45,396 2008 61,558 45,785 2009 63,147 45,319 2010 64,146 45,427 2011 64,391 45,863 2012 64,820 46,107 2013 65,477 46,576 2014 66,261 47,027 2015 66,829 47,596 Source: Indian River County Utilities Department 217 Indian River County, Florida Top 10 High Volume Customers of Utility Services (Unaudited) Fiscal Year 2015 Schedule 23 Below is a table depicting the ten highest volume customers of the utility system for the fiscal year ended September 30, 2015: Annual Water Annual Wastewater Volume Volume Customer (x 1,000 gals.) (x 1,000 gals.) 1. Vista Royale 30,485 30,485 2. City of Fellsmere - 24,743 3. IRC School Board 25,092 1.7,228 4. Acts, Inc. 23,713 23,656 5. MHC Village Green LLC 21,202 21,202 6. Disney's Vero Beach Resort 18,517 18,51.7 7. Encore RV Park 1.7,452 1.7,452 8. Palms of Vero Beach LTD 14,115 14,1.1.5 9. Vista Gardens 1.3,926 1.3,926 1.0. Vista Plantation 12,816 21,81.6 Source: Indian River County Utilities Department 218 Indian River County, Florida Capacity Charges - Utilities Department(Unaudited) Last Ten Fiscal Years Schedule 24 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 2006 $ 4,758,320 $ 8,287,244 $ 1.3,045,564 (A) 2007 1,159,803 620,915 1,780,71.8 (A) 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 2013. 795,134 1,225,379 2,020,51.3 2014 1,081,355 1,625,404 2,706,759 2015. 1,041,885 1,575,406 2,617,291 (A) Large decrease in capacity charges due to construction slowdown. 219 Indian River County, Florida Pledged Revenues for Spring Training Facility Revenue Bonds, Series 2001 (Unaudited) Last Ten Fiscal Years Schedule 25 Year Professional Total Ended Sports State Tourist One Cent Half Cent September 30 Subsidy_ Tax Collected Tourist Tax (A) Sales Tax B(B) 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 2013 500,004 1,743,283 435,821 7,828,550 2014 500,004 1,918,200 479,550 8,219,778 2015 500,004 2,267,100 566,774 8,684,772 (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 in County Note 12. 220 h ��� �� �� �� n�m�ua��u 0 N 0 0 ��� 0 N N N 5070 North Highway A1A Suite 250 Vero Beach,FL32983 Ph: 772.234.8484 Fx: ,7zz3u.8488 zoumaoo.coou INDEPENDENT AUDITORS' REPORT ON INTERNAL CONTROL OVER FINANCIAL REPORTING AND ON COMPLIANCE AND OTHER MATTERS BASED ON4NAUDIT OFFINANCIAL STATEMENTS PERFORMED |N ACCORDANCE WITH GOVERYMENT AUDITING S7AMDAADS May 25' 2O16 The Honorable Board ofCounty Commissioners and Constitutional Officers Indian River County, Florida We have audited, in accordance with the 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, the financial statements of the governmental activities, the business-type activities, each major fund, and the aggregate remaining fund information ufIndian Mver County, Florida (the "County''), asofand for the year ended September 30, 2015, and the related notes tothe financial statements, which collectively comprise the County's basic financial statements' and have issued our report thereon dated May 25, 2016. Internal Control over Financial Reporting In planning and performing our audit ofthe financial statements, we considered the County's internal control over financial reporting (internal control) to determine the audit procedures that are appropriate in the circumstances 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. Accordingly, we do not express an opinion on the effectiveness of the County's internal control. 4 deficiency /n internal control exists when the design or operation of a control does not allow management oremployees, in the normal course nfperforming their assigned functions, to prevent, or detect and correct misstatements on a timely basis. A nnoter/o/ weakness is a deficiency, or a combination of deficiencies' in internal control such that there is a reasonable possibility that a materia( misstatement of the entity's financial statements will not be prevented, or detected and corrected on u timely basis. Ashgnificont deficiency is a deficiency' or a combination of deficiencies' in internal control that ix less severe than a material weakness, yet important enough to merit attention by those charged with governance. Our consideration of internal control was for the limited purpose described in the preceding paragraph and was not designed toidentify all deficiencies in internal control that might be material weaknesses or significant deficiencies. Given these limitations, during our audit we did not identify any deficiencies in internal control that we consider to be material weaknesses. However, material weaknesses may exist that have not been identified. Rebmann is"`independent member mwexwInternational. CPAm&Consultants Wealth Advisors Corporate Investigators zyronw^rzoy^, 221 The Honorable Board of County Commissioners Indian River County, Florida May 25, 2016 Page 2 Compliance and Other Matters As part of obtaining reasonable assurance about whether the County's financial statements are free of material misstatement, we performed tests of its compliance with certain provisions of laws, regulations, contracts, and grant agreements, noncompliance with which could have a direct and material effect on the determination of financial statement amounts. However, providing an opinion on compliance with those provisions was not an objective of our audit and, accordingly, we do not express such an opinion. The results of our tests disclosed no instances of noncompliance or other matters that are required to be reported under Government Auditing Standards. Purpose of this Report The purpose of this report is solely to describe the scope of our testing of internal control and compliance and the results of that testing, and not to provide an opinion on the effectiveness of the County's internal control or on compliance. This report is an integral part of an audit performed in accordance with Government Auditing Standards in considering the entity's internal control and compliance. Accordingly, this communication is not suitable for any other purpose. 44444. 4r),— LLC 222 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 MANAGEMENT LETTER rehmann.com May 25, 2016 Honorable Board of County Commissioners and Constitutional Officers Indian River County, Florida Report on the Financial Statements We have audited the financial statements of 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, 2015, and have issued our report thereon dated May 25, 2016. Auditor's Responsibility 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; OMB Circular A-133, Audits of States, Local Governments, and Non-Profit Organizations; and Chapter 10.550, Rules of the Florida Auditor General. Other Reports and Schedule 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; Independent Auditor's Report on Compliance with Each Major Program and State Project and Report on Internal Control over Compliance; Schedule of Findings and Questioned Costs; and Independent Accountants' Report on an examination conducted in accordance with AICPA Professional Standards, Section 601, regarding compliance requirements in accordance with Chapter 10.550, Rules of the Auditor General. Disclosures in those reports and schedule, which are dated May 25, 2016, should be considered in conjunction with this management letter. Prior Audit Findings 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. Official Title and Legal Authority Section 10.554(1)(i)4., 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. Financial Condition Section 10.554(1)(i)5.a. and 10.556(7), Rules of the Auditor General, requires that we report the results of our determination as to whether or not the County has met one or more of the conditions described in Section 218.503(1), Florida Statutes, and identification of the specific conditions met. in Rebmann is an independent member of Nexia International. CPAs&Consultants Wealth Advisors Corporate Investigators � 3��r>x;v�rsoti:tr. 223 connection with our audit, we determined that the County did not meet any of the conditions described in Section 218.503(1), Florida Statutes. Pursuant to Sections 10.554(1)(i)5.c. and 10.556(8), Rules of the Auditor General, we applied financial condition assessment procedures. 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. Annual Financial Report Section 10.554(1)(i)5.b. and 10.556(7), Rules of the Auditor General, require that we apply appropriate procedures and report the results of our determination as to whether the annual financial report for the County for the fiscal year ended September 30, 2015, filed with the Florida Department of Financial Services pursuant to Section 218.32(1)(a), Florida Statutes, is in agreement with the annual financial audit report for the fiscal year ended September 30, 2015. In connection with our audit, we determined that these two reports were in agreement. Other Matters Section 10.554(1)(i)2., Rules of the Auditor General, requires that we address in the management letter any recommendations to improve financial management. In connection with our audit, we did not have any such recommendations. Section 10.554(1)(i)3., Rules of the Auditor General, requires that we address noncompliance with 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 which warrants the attention of those charged with governance. In connection with our audit, we did not have any such findings. Purpose of this Letter 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 granting agencies, the Board of County Commissioners and applicable management and is not intended to be and should not be used by anyone other than these specified parties. 440� W4411-- L LC 224 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 rehmann.com INDEPENDENT ACCOUNTANTS' REPORT May 25, 2016 The Honorable Board of County Commissioners Indian River County, Florida We have examined the compliance of Indian River County, Florida (the "County") with Sections 218.415, 28.35, 28.36, 365.172(10), 365.173(2)(d) and 61.181 Florida Statutes, during the year ended September 30, 2015. Management is responsible for compliance with those requirements. Our responsibility is to express an opinion on the County's compliance based on our examination. Our examination was conducted in accordance with attestation standards established by the American Institute of Certified Public Accountants and, accordingly, 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 examination provides a reasonable basis for our opinion. Our examination does not provide a legal determination on the County's compliance with specified requirements. In our opinion, the County complied, in all material respects, with the aforementioned requirements for the year ended September 30, 2015. This report is intended solely for the information and use of management, the Board of County Commissioners and the Florida Auditor General and is not intended to be and should not be used by anyone other than these specified parties. L LC Rebmann is an independent member of Nexia International. CPAs&Consultants Wealth Advisors Corporate Investigators � I IT,R.N AT IO N1 225 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 rehmann.com INDEPENDENT AUDITORS' REPORT ON THE SCHEDULE OF EXPENDITURES OF FEDERAL AWARDS AND STATE PROJECTS REQUIRED BY OMB CIRCULAR A-133 AND CHAPTER 10.550, RULES OF THE AUDITOR GENERAL May 25, 2016 The Honorable Board of County Commissioners and Constitutional Officers 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, 2015, and the related notes to the financial statements, which collectively comprise the County's basic financial statements. We issued our report thereon dated May 25, 2016, which contained unmodified opinions on those financial statements. Our audit was conducted for the purpose of forming opinions on the financial statements that collectively comprise the basic financial statements. The accompanying schedule of expenditures of federal awards and state projects is presented for purposes of additional analysis as required by OMB Circular A-133, 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 basic 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 basic 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 schedule of expenditure of federal awards and state projects is fairly stated in all material respects in relation to the basic financial statements as a whole. 4"*t r4Z4)4_ L LC Rebmann is an independent member of Nexia International. CPAs&Consultants Wealth Advisors Corporate Investigators � I IT,R.N AT IO N1 226 Indian River County,Florida Schedule of Expenditures of Federal Awards and State Projects For the Fiscal Year Ended September 30,2015 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: Comm.Dev.Block Grant-Neighborhood Stabilization Pgm 93 14.228 B-11-UN-12-0022 CDBG NSP#3 Program Income Expenditures 14.228 Program Income $ 4,884 Indirect Programs: Passed through Florida Dept.of Economic Opportunity: Comm.Dev.Block Grant-Neighborhood Stabilization Program 14.228 l ODB-4X-10-40-O1-F13 416 CDBG NSP Program Income Expenditures 14.228 Program Income 4,230 Subtotal CFDA-14.228 9,530 Direct Programs: Supportive Housing Program- Homeless Management Information Systems 14.235 FL041813411091100 9,692 Subtotal CFDA-14.235 9,692 Shelter Plus Care 14.238 FL0380C4H09IOOO 62,881 Shelter Plus Care 14.238 FL0338CH090900 69,887 Subtotal CFDA-14.238 132,768 Indirect Program: Passed through Florida Housing Finance Corporation: Tenant Based Rental Assistance 14.239 2013-210TBRA 181,296 Direct Programs: Continuum of Care- Rental Assistance 14.267 FL0I13L4H091301 99,156 Rental Assistance 14.267 FL0I 14L4H091306 43,429 Rental Assistance 14.267 FL0I14L4H091407 26,574 Homeless Management Information Systems 14.267 FL01161-411091306 36,177 Rental Assistance 14.267 FL0I19L4H091306 91,023 Rental Assistance 14.267 FL0]191.411091407 16,364 Rental Assistance 14.267 FL0120L4H091306 120,455 Rental Assistance 14.267 FL0120L4H091407 36,075 Homeless Management Information Systems 14.267 FL0308L4H091305 25,856 Rental Assistance 14.267 FL0360C4H091304 70,374 Rental Assistance 14.267 FL0360C4H091405 21,601 Homeless Management Information Systems 14.267 FL0418L4H091301 16,978 Rental Assistance 14.267 FL0440L411091302 65,553 Rental Assistance 14.267 FL0440L4H091403 40,804 Subtotal CFDA-14.267 710,419 Direct Programs: Section 8 Housing Choice Vouchers 14.871 FL-132-VO-014 to 017 2,056,867 Total Department of Housing and Urban Development 3,100,572 Department of Justice: Indirect Programs: Passed through Office of the Attorney General: Crime Victim Assistance Program 16.575 V007-14050 41,122 Direct Programs: State Criminal Alien Assistance Program 16.606 2014-AP-BX-0791 50,885 2014 Local Solicitation Justice Assistance Grant 16.738 2014-DJ-BX-0027 24,877 Indirect Programs: Passed through Florida Department of Law Enforcement: Bryne Formula Grant Program Multi-Agency Drug Enforcement Unit 16.738 2015-JAGC-INRI-1-R3-115 57,250 Drug Testing Program Grant 16.738 2015-JAGC-INRI-2-R3-116 5,366 Subtotal CFDA-16.738 87,493 Total Department of Justice 179,500 227 Indian River County,Florida Schedule of Expenditures of Federal Awards and State Projects For the Fiscal Year Ended September 30,2015 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: LAP-Old Dixie Highway 20.205 ARL29 $ 134,735 Florida Safe Routes to School-2015 20.205 BDV231 46,751 Florida Safe Routes to School-2016 20.205 BDV231 12,224 Metropolitan Planning Organization 20.205 AA080 481,466 Subtotal CFDA-20.205 675,176 Indirect Programs: Passed through Florida Department of Environmental Protection: Martin Luther King Trail 20.219 T14035 102,345 Total Highway Planning and Contruction Cluster 777,521 Federal Transit Metropolitan Planning Grant 20.505 AQ212 61,777 Section 5311 Non-Urbanized Public Transit 20.509 APT03 17,335 $ 17,335 Section 5311 Non-Urbanized Public Transit 20.509 ARQ46 53,957 53,957 Subtotal CFDA-20.509 71,292 71,292 Metro Planning Organization(Part of the Federal Transit Cluster) 20.526 ARE87 415,850 Florida Highway Safety Grant-Total Highway Safety Cluster 20.616 ARO00 77,672 Total Department of Transportation 1,404,112 71,292 Federal Transit Administration: Direct Programs: Federal Transit Formula Section 5309 Grant 20.500 FL-04-0182 6,429 6,429 Federal Transit Formula Section 5307 Grant 20.507 FL-90-X888 1,624,396 1,624,396 Federal Transit Formula Section 5307 Grant 20.507 FL-90-X838 161,467 161,467 Federal Transit Formula Section 5307 Grant 20.507 FL-90-X828 239,422 239,422 Federal Transit Formula Section 5307 Grant 20.507 FL-90-X756 188,125 188,125 Federal Transit Formula Section 5307 Grant 20.507 FL-90-X739 9,893 9,893 Subtotal CFDA-20.507 2,223,303 2,223,303 Total Federal Transit Administration 2,229,732 2,229,732 Total Federal Transit Cluster 2,645,582 2,229,732 Elections Assistance Commission: Indirect Programs: Passed through the Florida Dept of State Division of Elections Federal Elections Activties 2013/2014 90.401 N/A 15,680 Federal Elections Activties 2012/2013 90.401 N/A 477 Total Elections Asssistance Commission 16,157 228 Indian River County,Florida Schedule of Expenditures of Federal Awards and State Projects For the Fiscal Year Ended September 30,2015 Federal/State Agency CFDA/ Contract/ Pass-through Entity CSFA Grant Transfers to Federal Program/State Project No. No. Expenditures Subrecipients Department of Health and Human Services, Agency for Children and Families, Office of Child Support Enforcement: Indirect Programs: Passed through Florida Department of Revenue: Sheriff Service of Notices 93.563 00331 $ 11,043 Child Support Enforcement-Title IV D 93.563 COC31 382,933 Total Office of Child Support Enforcement 393,976 Department of Homeland Security: Indirect Programs: Passed through Division of Emergency Management: Community Emergency Response Team 97.042 15-CI-N2-10-40-02-417 5,429 Emergency Management Performance Grant 97.042 15-FG-40-10-40-01-098 75,464 Emergency Management Performance Grant 97.042 16-FG-5A-10-40-01-097 60,684 Subtotal CFDA-97.042 141,577 Emergency Management Homeland Security 97.067 14-DS-L5-10-39-01-281 8,000 Emergency Management Homeland Security 97.067 15-DS-P4-10-40-01-346 5,000 Emergency Management Homeland Security 97.067 15-DS-P9-10-40-02-404 23,320 Subtotal CFDA-97.067 36,320 Total Department of Homeland Security 177,897 TOTAL EXPENDITURES OF FEDERAL AWARDS: $ 7,501,946 $ 2,301,024 229 Indian River County,Florida Schedule of Expenditures of Federal Awards and State Projects For the Fiscal Year Ended September 30,2015 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: Emergency Management Programs Emergency Management Preparedness and Assistance 31.063 16-BG-83-10-40-01-030 $ 20,618 Emergency Management Preparedness and Assistance 31.063 15-BG-83-10-40-01-031 84,156 Subtotal CSFA-31.063 104,774 Hazardous Materials Analysis Grant 31.067 15-CP-11-10-40-01-214 1,365 Total Division of Emergency Management 106,139 Department of Environmental Protection: Direct Projects: Wabasso Beach Restoration Project 37.003 15IR1 5,194,919 Hurricane Sandy Beach Project 37.003 141R2 1,778,051 Subtotal CSFA-37.003 6,972,970 Egret Marsh Stormwater Park 37.039 S0733 175,000 Total Department of Environmental Protection 7,147,970 Department of State: Direct Project: State Aid to Libraries 45.030 15-ST-23 120,235 Florida Housing Finance Corporation: Direct Projects: State Housing Initiatives Partnership 52.901 NIA 884,031 Department of Transportation: Direct Projects: Transportation Disadvantaged Planning Grant 55.002 G0231 4,139 Transportation Disadvantaged Planning Grant 55.002 ARH80 17,646 Subtotal CSFA-55.002 21,785 Commuter Assistance Grant 55.007 G0115 22,758 $ 22,758 SCOP-Aviation Boulevard 55.009 ARUI 1 92,125 SCOP-Old Dixie Highway 55.009 AR620 1,266,438 Subtotal CSFA-55.009 1,358,563 Fl Public Transit Block Grant 55.010 ARQ56 230,000 230,000 Fl Public Transit Block Grant 55.010 APT70 205,369 205,369 Subtotal CSFA-55.010 435,369 435,369 FDOT Service Development Grant 55.012 AQG07 299,394 299,394 Transit Corridor Grant 55.013 ARE86 74,400 74,400 Intermodal Park and Ride Facility 55.014 APT19 68,642 TRIP-66th Avenue from SR60 to 41st Street 55.026 AQN66 1,033,817 Total Department of Transportation 3,314,728 831,921 230 Indian River County,Florida Schedule of Expenditures of Federal Awards and State Projects For the Fiscal Year Ended September 30,2015 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 C3031 $ 27,167 Total Department of Health 27,167 Department of Revenue: Direct Project: Facilities for Retained Spring Training Franchise 73.016 N/A 500,004 Total Department of Revenue 500,004 TOTAL EXPENDITURES OF STATE FINANCIAL ASSISTANCE: $ 12,100,274 $ 831,921 231 Indian River County, Florida Notes to Schedule of Expenditures of Federal Awards and State Projects For the Fiscal Year Ended September 30, 2015 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. Such expenditures are recognized following the cost principles contained in OMB A-87 Cost Principles for State, Local, and Indian Tribal Governments, wherein certain types of expenditures are not allowable or are limited as to reimbursement. 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 adjustment by 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. 232 Indian River County, Florida Notes to Schedule of Expenditures of Federal Awards and State Projects For the Fiscal Year Ended September 30, 2015 NOTE 1 —SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES—Continued E. Wabasso Beach(Sector 3) Restoration Project The Florida Department of Environmental Protection grant No. 1.5IR1 known as the Wabasso Beach (Sector 3) Restoration Project incurred expenditures over five fiscal years. This grant was not awarded until fiscal year 2015 but allowed for reimbursement of expenditures from those five fiscal years. Total expenditures are reported on the Schedule of Expenditures of Federal Awards and State Projects. Breakdown of those expenditures by fiscal year is as follows: Fiscal Year Expenditures 2009/2010 $ 2,335,689 2010/2011 1,725,599 2011/2012 932,821 201.3/201.4 128,416 2014/2015 72,394 Total $ 5,194,919 233 h ��� �� �� �� n�m�ua��u 0 N 0 0 ��� 0 N N N 5070 North Highway A1A Suite 250 Vero Beach,FL32983 Ph: 772.234.8484 Fx: ,7zz3u.8488 zoumaoo.coou 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 4'133 AND CHAPTER 10.550, RULES OF THE AUDITOR GENERAL May 25' 2O16 The Honorable Board nfCounty Commissioners and Constitutional Officers Indian River County, Florida Report on Compliance for Each Major Federal Program and Major State Project We have audited the compliance of InndianMver County, Florida (the "County") with the types of compliance requirements described in the O0\8 Circular 4-133 Compliance Supplement and the requirements described in the Florida Department of Financia( Services' State Projects Compliance Supplement that could have a direct and material effect on each of the County's major federal programs or state projects for the year ended September 30, 2015. The County's major federal programs and state projects are identified in the summary of auditors' results section of the accompanying schedule nffindings and questioned costs. Management's Responsibility Management is responsible for compliance with the requirements of taws, regulations, contracts' and grants applicable toits federal programs. Independent Auditors' Responsibility Our responsibility is to express an opinion on compliance for each of the County's major federal programs based on our audit ofthe types ofcompliance requirements referred to above. 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 Staten; OMB Circular A-133, Audits of States, Local Governments, and Non-Profit Organizations; and Chapter 10.550' Ru/es of the Auditor General. Those standards and OMB Circular A-133 require that we pian and perform the audit to obtain reasonable assurance about whether noncompliance with the types of compliance requirements referred to above that could have e 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 on compliance for each major federal program. However, our audit does not provide a legal determination of the County's compliance. Rebmann w=`independent member mwexiaInternational. CPAm&Consultants Wealth Advisors Corporate Investigators zwrau"^r,ow^, 234 Opinion on Each Major Federal Program and State Project In our opinion, the County complied, in all material respects, with the types of compliance requirements referred to above that could have a direct and material effect on each of its major federal programs and state projects for the year ended September 30, 2015. Report on Internal Control Over Compliance Management of the County is responsible for establishing and maintaining effective internal control over compliance with the types of compliance requirements referred to above. In planning and performing our audit of compliance, we considered the County's internal control over compliance with the types of requirements that could have a direct and material effect on each major federal program and state project to determine the auditing procedures that are appropriate in the circumstances for the purpose of expressing an opinion on compliance for each major federal program and state project 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. A deficiency in internal control over compliance exists when the design or operation of a control over compliance does not allow management or employees, in the normal course of performing their assigned functions, to prevent, or detect and correct, noncompliance with a type of compliance requirement of a federal program 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. A significant deficiency in internal control over compliance is a deficiency, or a combination of deficiencies, in internal control over compliance with a type of compliance requirement of a federal program or state project that is less severe that a material weakness in internal control over compliance, yet important enough to merit attention by those charged with governance. 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 material weaknesses or significant deficiencies. We did not identify any deficiencies in internal control over compliance that we consider to be material weaknesses. However, material weaknesses may exist that have not been identified. Purpose of this Report The purpose of this report on internal control over compliance is solely to describe the scope of our testing of internal control over compliance and the results of that testing based on the requirements of OMB Circular A-133 and Chapter 10.550, Rules of the Auditor General. Accordingly, this report is not suitable for any other purpose. LLC 235 INDIAN RIVER COUNTY, FLORIDA Scdue:c;}f Fr�dins and: iMcic + rt For the Year Ended September 30, 2015 SECTIwON - SUM +IRY 4F Al1DITORS' RESULTS . Financial Statements Type of auditors' report issued: Unmodified Internal control over financial reporting: Material weakness(es) identified? yes X no Significant deficiency(ies) identified? yes X none reported Noncompliance material to financial statements yes X no noted? Federal Awards and State Proiects Internal control over major programs and projects: Material weakness(es) identified? yes X no Significant deficiency(ies) identified? yes X none reported Type of auditors' report issued on compliance for major programs: Unmodified Any audit findings disclosed that are required to be reported in accordance with Circular A-133, Section 510(a)? yes X no Identification of major programs: CFDA Number Name of Federal Program or Cluster 20.FTC DOT Federal Transit Cluster 93.563 DHHS Child Support Enforcement CSFA Number Name of State Project 37.003 Beach Management Funding Assistance Program 55.009 Small County Outreach Program Dollar threshold used to distinguish between Type A and Type B programs: $ 300,000 (Federal and State) Auditee qualified as low-risk auditee? X yes no 236 INDIAN RIVER COUNTY, FLORIDA Scdue:cf Fr�dins and: cc + rt For the Year Ended September 30, 2015 SECTION tl - FINANCiAl, STATEMENT FIDAIG5 None noted. CCTICI SII fCIRAL A / D F1lCtr h101` "ION�U C+CT : None noted. 237 INDIAN RIVER COUNTY, FLORIDA SchedU, ©f Pr c r Audit Ffndings For the Year Ended September 30, 2014 None noted. 238 JEFFREY R. SMITH, CPA, CGFO, CGMA Clerk of Circuit uit Court and Comptroller Finance Department 1801 27 th Street, Building Vera 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 Grath that: I. I am the Chief Financial Officer of Indian River County which is a local governmental entity of the State of Florida; . Indian River County adapted Ordinance No.2005-015 on May 17, 2005 implementing dight new impact fee categories, plus revised transportation impact fees (9 total impact fee categories). The impact fees were subsequently amended as follows: on March 24, 2009 in Ordinance No. 2009-003, on September 22, 2009 in Ordinance No. 2009-015, and on March 1.6, 2010 in Ordinance No. 2010-002.. The result of these amendments was suspension offive of the mine original impact fees from April 1 2009 through Larch 31, 2011. On March 15, 2011 in Ordinance leo. 2011-002, the impact fees were amended to suspend three of the nine 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. On March 11, 2014, Ordinance No. 2014-004 continued d this suspension from April 1, 2014 through March 31, 2015.. On April 22, 2014, Ordinance No. 2014-009 adapted new non- residential impact fee schedules. On October 14, 2014, Ordinance No. 2014-016 was adapted. That ordinance contained new impact fee schedules comprised of the non-residential impact fees adopted as part of Ordinance 2014-0709 and new impact fees for residential uses. That ordinance also continued the suspensions of three impact fee categories pending further tread evaluation during the next scheduled impact fee methodological update. 3. Indian River County has complied and, as of the date of this Affidavit, remains in compliance with Section 1. 3.31801, Florida Statutes, FURTHER AFFIANTSAYETH NAUGHT. (C of i nci icer of the Entity) " ATE OF FLORIDA,COUNTY TOF INDIAN RIVER WORN TO AND SUBSCRIBEDbefore me this/3 day of a ,L 2016: 111d 11z� NOTARY PUBLIC. Print Natne s Personallyknown or produced identification__ o TE RICCWNS-LIST N Type of identification produced: �.��.__._� � V COMMISON#FF 1414 EXPIRES;October 30,2018 My Commission Expires: 1'1'r.""v Bondedlhr Bu*tNo#R Swim 239 240 BOARD OF COUNTY COMMISSIONERS ommmmmmmmmmmmmmmmmmmmmmmmmmmmmmmmmmmmmmmmmm 241 h ��� �� �� �� n�m�ua��u 0 N 0 0 ��� 0 N N N 5070 North Highway A1A Suite 250 Vero Beach,FL32983 Ph: 772.234.8484 Fx: ,7zz3u.8488 zoumaoo.coou INDEPENDENT AUDITORS' REPORT May 25, 2O16 The Honorable Board ofCounty Commissioners Indian River County, Florida Report onthe Financial Statements 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 Commissioners(the "Board")' as of and for the year ended September 30, 2015' and the related notes to the financial statements' which collectively comprise the Board's basic financial statements as listed in the table of contents. Management's Responsibility for the Financial Statements Management is responsible for the preparation and fair presentation ofthese financial statements in accordance with accounting principles generally accepted in the United States of America; this includes the design, implementation, and maintenance nfinternal control relevant tnthe preparation and fair presentation of financial statements that are free from material misstatement, whether due to fraud or error. Independent Auditors' Responsibility 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 inthe United States nf 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 pian and perform the audit to obtain reasonable assurance about whether the financial statements are free of material misstatement. An audit involves performing procedures to obtain audit evidence about the amounts and disclosures in the financial statements. The procedures selected depend on the auditors' judgment, including the assessment ofthe risks of material misstatement ofthe financial statements, whether due tofraud or error. In making those risk assessments, the auditor considers internal control relevant to the entity's preparation and fair presentation of the financial statements in order to design audit procedures that are appropriate in the circumstances' but not for the purpose of expressing an opinion on the effectiveness of the entity's internal control. Accordingly, we express no such opinion. An audit also includes evaluating the appropriateness of accounting policies used and the reasonableness of significant accounting estimates made by management, aswell esevaluating the overall presentation of the financial statements. We believe that the audit evidence vve have obtained issufficient and appropriate to provide basis for our audit opinions. Rebmann is""independent member mmexiaInternational. CPAs&Consultants Wealth Advisors Corporate Investigators zxronn^rzoy^, 242 The Honorable Board of County Commissioners Indian River County, Florida May 25, 2016 Page 2 Opinions In our opinion, the financial statements referred to above present fairly, in all material respects, the respective financial position of the funds of the Board of County Commissioners as of September 30, 2015, and the respective changes in financial position and the respective budgetary comparison for the general fund for the year then ended in accordance with accounting principles generally accepted in the United States of America. Reporting Entity As discussed in Note 1, the financial statements referred to above present only the Indian River County, Florida Board of County Commissioners and do not purport to, and do not, present fairly the financial position of Indian River County, Florida as of September 30, 2015, and the changes in its financial position for the year then ended, in conformity with accounting principles generally accepted in the United States of America. Other Reporting Required by Government Auditing Standards In accordance with Government Auditing Standards, we have also issued our report dated May 25, 2016, on our consideration of the Board of County Commissioner'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 in considering the Board of County Commissioner's internal control over financial reporting and compliance. A rL4Y- L LC 243 Indian River County,Florida Board of County Commissioners Balance Sheet Governmental Funds September 30,2015 Secondary Impact Roads General Fees Construction ASSETS Cash and cash equivalents $ 45,517,683 $ 13,451,729 $ 14,022,401 Accounts receivable 552,293 - - Special assessments receivable - Due from other funds 1,204,593 - - Due from other governments 6,124,043 1,550,064 802,393 Interest receivable 16,826 3,862 3,799 Inventories 45,113 - - Prepaid items 65,605 - Advances to other funds 212,500 - - Total assets $ 53,738,656 $ 15,005,655 $ 14,828,593 LIABILITIES Accounts payable $ 1,282,570 $ 144,443 $ 737,347 Retainage payable - 411,244 28,657 Due to other funds - - - Due to other governments 21,803 98,588 - Unearned revenues 183,912 - - Other deposits 17,018 - - Total liabilities 1,505,303 654,275 766,004 DEFERRED INFLOWS OF RESOURCES Unavailable revenue-special assessments - - - Unavailable revenue-ambulance services - - - Unavailable revenue-state and federal grants 1,954,123 158,631 382,633 Total deferred inflows of resources 1,954,123 158,631 382,633 FUND BALANCES Nonspendable: Inventories 45,113 - - Prepaid items 65,605 - - Advances to other funds 212,500 - - Restricted for: Transportation/road improvements - 8,549,530 13,679,956 Court-related costs and improvements - - - Housing assistance - - - Law enforcement/public safety - 778,375 - Fire/emergency services - 437,657 - Tourism-related activities - - - Beach renourishment - Boating related projects - - Library services - 992,276 - Land acquisition - - Stormwater,street lighting,and other special assessments - - Debt service - - Capital projects - 786,025 - Dodgertown repairs/improvements - - Parks/recreational projects 1,000,000 2,648,886 Committed to: Economic incentives 1,035,240 - - Environmental conservation/preservation - Law enforcement/public safety 1,179 Parks/recreational projects 56,156 - Assigned to: Transportation/road improvements - Unassigned 47,863,437 - - Total fund balances 50,279,230 14,192,749 13,679,956 Total liabilities,deferred inflows and fund balances $ 53,738,656 $ 15,005,655 $ 14,828,593 The accompanying notes are an integral part of the financial statements. 244 Emergency Optional Other Total Services Sales Governmental Governmental Transportation District Tax Funds Funds $ 7,174,425 $ 7,749,308 $ 63,684,706 $ 19,480,263 $ 171,080,515 636 917,873 - 827 1,471,629 203,815 - - 203,815 - - - - 1,204,593 247,073 262,883 2,931,977 2,591,032 14,509,465 147,386 2,488 18,390 5,443 198,194 - - - - 45,113 - 9,568 - 8,406 83,579 - - - - 212,500 $ 7,773,335 $ 8,942,120 $ 66,635,073 $ 22,085,971 $ 189,009,403 $ 384,729 $ 870,200 $ 709,606 $ 508,270 $ 4,637,165 1,306 - 829,713 83,703 1,354,623 - - 405,000 405,000 - - 21,950 142,341 1,636 12,514 - - 198,062 - - - - 17,018 387,671 882,714 1,539,319 1,018,923 6,754,209 349,176 - - - 349,176 - 916,751 - - 916,751 - - 988,841 2,146,707 5,630,935 349,176 916,751 988,841 2,146,707 6,896,862 - - - - 45,113 9,568 8,406 83,579 - - - 212,500 - 22,229,486 703,493 703,493 784,620 784,620 - 2,360,355 3,138,730 7,133,087 - - 7,570,744 - - - 382,136 382,136 - 8,301,356 8,301,356 - 1,155,120 1,155,120 - 10,741 1,003,017 - - 126,438 126,438 - - 1,341,307 1,341,307 - - 2,914,453 2,914,453 - 64,106,913 - 64,892,938 - 102,510 102,510 - 3,648,886 - - - 1,035,240 1,1.68,885 1,168,885 - 1,179 - - 56,156 7,036,488 - - - 7,036,488 - - - (439,479) 47,423,958 7,036,488 7,142,655 64,106,913 18,920,341 175,358,332 $ 7,773,335 $ 8,942,120 $ 66,635,073 $ 22,085,971 $ 189,009,403 245 Indian River County,Florida Board of County Commissioners Statement of Revenues,Expenditures,and Changes in Fund Balances Governmental Funds For the Year Ended September 30,2015 Secondary Impact Roads General Fees Construction REVENUES Taxes $ 52,293,726 $ - $ 3,672,972 Permits,fees and special assessments 9,401,418 5,280,765 157,165 Intergovernmental 14,862,652 1,630,482 1,018,540 Charges for services 5,342,153 - - Judgments,fines and forfeits 452,930 - - Interest 302,178 50,096 59,487 Miscellaneous 1,231,860 109,895 32,177 Total revenues83,886,917 7,071,238 4,940,341 EXPENDITURES General government 11,152,587 368,903 - Public safety 4,030,516 816,387 - Physical environment 249,263 - - Transportation 4,837,336 5,101,408 4,890,907 Economic environment 426,790 - - Human services 3,535,915 - - Culture/recreation 8,461,822 1,689,872 - Court related 217,888 - - Debt service: Principal - - - Interest and other fiscal charges - - - Capital projects - - - Total expenditures 32,912,117 7,976,570 4,890,907 Excess of revenues over(under)expenditures 50,974,800 (905,332) 49,434 OTHER FINANCING SOURCES(USES) Transfers in - 57,075 - Issuance of refunding notes - - - Transfers out (8,728,923) (24,990) - Transfers to constitutional officers (43,645,512) (54,697) - Payment to refunded bond escrow agent - - - Total other financing sources(uses) (52,374,435) (22,612) - Net change in fund balances (1,399,635) (927,944) 49,434 Fund balances at beginning of year 51,678,865 15,120,693 13,630,522 Fund balances at end of year $ 50,279,230 $ 14,192,749 $ 13,679,956 The accompanying notes are an integral part of the financial statements. 246 Emergency Optional Other Total Services Sales Governmental Governmental Transportation District Tax Funds Funds $ - $ 20,945,872 $ 16,190,352 $ 7,067,156 $ 100,170,078 190,379 - 80,542 457,462 15,567,731 2,880,033 51,600 317,741 10,872,064 31,633,112 107,104 5,215,964 - 864,753 11,529,974 - 13,400 - 164,979 631,309 46,242 65,691 267,178 79,721 870,593 541,899 31,413 8,460 173,506 2,129,210 3,765,657 26,323,940 16,864,273 19,679,641 162,532,007 320,974 - - 1,190,750 13,033,214 - 28,267,599 - 412,909 33,527,411 729,305 - - 76,453 1,055,021 12,137,157 - - 978,761 27,945,569 - - - 9,530 436,320 - - - 3,983,841 7,519,756 - - - 5,568,015 15,719,709 - - - 597,029 814,917 - - - 4,180,000 4,180,000 - - - 1,266,070 1,266,070 - - 5,309,597 - 5,309,597 13,187,436 28,267,599 5,309,597 18,263,358 110,807,584 (9,421,779) (1,943,659) 11,554,676 1,416,283 51,724,423 8,573,172 - - 246,484 8,876,731 - - - 20,369,000 20,369,000 (150,990) - (128,249) (57,075) (9,090,227) - (460,942) (1,325,251) (419,874) (45,906,276) - - - (20,340,959) (20,340,959) 8,422,182 (460,942) (1,453,500) (202,424) (46,091,731) (999,597) (2,404,601) 10,101,176 1,213,859 5,632,692 8,036,085 9,547,256 54,005,737 17,706,482 169,725,640 $ 7,036,488 $ 7,142,655 $ 64,106,913 $ 18,920,341 $ 175,358,332 247 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, 2015 Variance with Final Budget Budgeted Amounts Actual Positive Original Final Amounts (Negative) REVENUES Taxes $ 51,504,439 $ 51,504,439 $ 52,293,726 $ 789,287 Permits,fees and special assessments 8,774,200 8,774,200 9,401,418 627,218 Intergovernmental 11,218,280 16,945,668 14,862,652 (2,083,016) Charges for services 4,771,246 4,835,821 5,342,153 506,332 Judgments, fines and forfeits 322,525 322,525 452,930 130,405 Interest 156,275 156,275 302,178 145,903 Miscellaneous 727,896 915,731 1,231,860 316,129 Total revenues 77,474,861 83,454,659 83,886,917 432,258 EXPENDITURES General government 9,155,971 11,935,374 11,152,587 782,787 Public safety 4,112,351 4,254,745 4,030,516 224,229 Physical environment 253,717 267,099 249,263 17,836 Transportation 1,021,481 6,894,934 4,837,336 2,057,598 Economic environment 421,679 453,575 426,790 26,785 Human services 3,652,937 3,687,307 3,535,915 151,392 Culture/recreation 8,391,055 9,173,837 8,461,822 712,015 Court related 227,175 229,609 217,888 11,721 Total expenditures 27,236,366 36,896,480 32,912,117 3,984,363 Excess of revenues over(under) expenditures 50,238,495 46,558,179 50,974,800 4,416,621 OTHER FINANCING SOURCES(USES) Transfers out (8,228,923) (8,728,923) (8,728,923) - Transfers to constitutional officers (44,358,666) (44,566,378) (43,645,512) 920,866 Total other financing sources (uses) (52,587,589) (53,295,301) (52,374,435) 920,866 Net change in fund balances (2,349,094) (6,737,122) (1,399,635) $ 5,337,487 Fund balances at beginning of year 2,349,094 6,737,122 51,678,865 Fund balances at end of year $ - $ - $ 50,279,230 The accompanying notes are an integral part of the financial statements. 248 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, 2015 Variance with Final Budget Budgeted Amounts Actual Positive Original Final Amounts (Negative) REVENUES Permits, fees and special assessments $ 2,398,750 $ 2,398,750 $ 5,280,765 $ 2,882,015 Intergovernmental - 265,000 1,630,482 1,365,482 Interest 49,500 49,500 50,096 596 Miscellaneous 146 146 109,895 109,749 Total revenues 2,448,396 2,713,396 7,071,238 4,357,842 EXPENDITURES General government 232,593 676,841 368,903 307,938 Public safety 190,000 869,800 816,387 53,413 Physical environment - 1,000 - 1,000 Transportation 5,405,000 10,837,000 5,101.,408 5,735,592 Culture/recreation 200,000 3,297,635 1,689,872 1,607,763 Total expenditures 6,027,593 15,682,276 7,976,570 7,705,706 Excess of revenues under expenditures (3,579,197) (12,968,880) (905,332) 12,063,548 OTHER FINANCING SOURCES(USES) Transfers in - 57,076 57,075 (1) Transfers out - (25,000) (24,990) 10 Transfers to constitutional officers - (248,355) - (54,697) 193,658 Total other financing sources (uses) - (216,279) (22,612) 193,667 Net change in fund balances (3,579,197) (13,185,159) (927,944) $ 12,257,215 Fund balances at beginning of year 3,579,197 13,185,159 15,120,693 Fund balances at end of year $ - $ - $ 14,192,749 The accompanying notes are an integral part of the financial statements. 249 Indian River County,Florida Board of County Commissioners Statement of Revenues,Expenditures, and Changes in Fund Balances-Budget and Actual Secondary Roads Construction Fund For the Year Ended September 30, 2015 Variance with Final Budget Budgeted Amounts Actual Positive Original Final Amounts (Negative) REVENUES Taxes $ 3,044,750 $ 3,044,750 $ 3,672,972 $ 628,222 Permits, fees and special assessments - - 157,165 157,165 Intergovernmental - 2,663,423 1,018,540 (1,644,883) Interest 19,000 19,000 59,487 40,487 Miscellaneous 439 30,439 32,177 1,738 Total revenues 3,064,189 5,757,612 4,940,341 (817,271) EXPENDITURES Transportation 5,512,591 10,010,374 4,890,907 5,119,467 Total expenditures 5,512,591 10,010,374 4,890,907 5,119,467 Net change in fund balances (2,448,402) (4,252,762) 49,434 $ 4,302,1.96 Fund balances at beginning of year 2,448,402 4,252,762 13,630,522 Fund balances at end of year $ - $ - $ 13,679,956 The accompanying notes are an integral part of the financial statements. 250 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, 2015 Variance with Final Budget Budgeted Amounts Actual Positive Original Final Amounts (Negative) REVENUES Permits, fees and special assessments $ 171,000 $ 171,000 $ 190,379 $ 19,379 Intergovernmental 2,446,250 2,642,425 2,880,033 237,608 Charges for services 92,150 92,150 107,104 14,954 Interest 28,500 28,500 46,242 17,742 Miscellaneous 800,924 425,924 541,899 115,975 Total revenues 3,538,824 3,359,999 3,765,657 405,658 EXPENDITURES General government 277,078 333,366 320,974 12,392 Physical environment 603,516 859,498 729,305 130,193 Transportation 1.1,725,814 13,149,312 12,137,157 1,012,155 Total expenditures 12,606,408 14,342,176 13,187,436 1,154,740 Excess of revenues under expenditures (9,067,584) (10,982,177) (9,421,779) 1,560,398 OTHER FINANCING SOURCES(USES) Transfers in 8,073,172 8,573,172 8,573,172 - Transfers out (150,990) (150,990) (150,990) - Total other financing sources(uses) 7,922,182 8,422,182 8,422,182 - Net change in fund balances (1,145,402) (2,559,995) (999,597) $ 1,560,398 Fund balances at beginning of year 1,145,402 2,559,995 8,036,085 Fund balances at end of year $ - $ - $ 7,036,488 The accompanying notes are an integral part of the financial statements. 251 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, 2015 Variance with Final Budget Budgeted Amounts Actual Positive Original Final Amounts (Negative) REVENUES Taxes $ 20,687,270 $ 20,687,270 $ 20,945,872 $ 258,602 Intergovernmental 42,750 67,798 51,600 (16,198) Charges for services 5,289,426 5,289,426 5,215,964 (73,462) Judgments, fines and forfeits 10,450 10,450 13,400 2,950 Interest 35,625 35,625 65,691 30,066 Miscellaneous 76,126 79,223 31,413 (47,810) Total revenues 26,141,647 26,169,792 26,323,940 154,148 EXPENDITURES Public safety 25,893,680 32,635,956 28,267,599 4,368,357 Total expenditures 25,893,680 32,635,956 28,267,599 4,368,357 Excess of revenues under expenditures 247,967 (6,466,164) (1,943,659) 4,522,505 OTHER FINANCING SOURCES(USES) Transfers to constitutional officers (475,367) (476,290) (460,942) 15,348 Total other financing sources(uses) (475,367) (476,290) (460,942) 15,348 Net change in fund balances (227,400) (6,942,454) (2,404,601) $ 4,537,853 Fund balances at beginning of year 227,400 6,942,454 9,547,256 Fund balances at end of year $ - $ - $ 7,142,655 The accompanying notes are an integral part of the financial statements. 252 Indian River County,Florida Board of County Commissioners Statement of Fund Net Position Proprietary Funds September 30,2015 Enterprise Funds Solid Waste Disposal Golf County County Internal District Course Utilities Building Total Service Funds ASSETS Current assets: Cash and cash equivalents $ 11,357,559 $ 5,384 $ 37,273,275 $ 6,129,954 $ 54,766,172 $ 30,516,071 Accounts receivable-net 107,314 - 2,387,365 - 2,494,679 299,406 Due from other governments 111,247 10,800 1,558,830 - 1,680,877 35,699 Interest receivable 10,535 228 521,943 4,211 536,917 19,811 Inventories - 94,916 875,191 - 970,107 148,318 Prepaid items 1,136 - 141,918 1,058 144,112 988,784 Current restricted assets: Cash and cash equivalents 15,297,593 - 33,473,846 - 48,771,439 - Total current assets 26,885,384 111,328 76,232,368 6,135,223 109,364,303 32,008,089 Non-current assets: Capital assets-non-depreciable 13,680,803 6,606,283 10,722,770 - 31,009,856 - Capital assets-depreciable 31,380,967 3,576,454 425,855,236 469,849 461,282,506 2,543,668 Capital assets-accumulated depreciation (11,622,681) (2,090,461) (238,256,043) (343,355) (252,312,540) (2,128,531) Non-current restricted assets: Special assessments receivable 563,099 - 563,099 Impact fees receivable - 683,286 683,286 Liens receivable - - 4,328,447 - 4,328,447 - Total non-current assets 33,439,089 8,092,276 203,896,795 126,494 245,554,654 415,137 Total assets 60,324,473 8,203,604 280,129,163 6,261,717 354,918,957 32,423,226 DEFERRED OUTFLOWS OF RESOURCES Deferred outflows related to pensions 39,927 36,881 539,966 94,249 711,023 94,626 Deferred amounts on refundings - - 1,386,691 - 1,386,691 - Total deferred outflows of resources 39,927 36,881 1,926,657 94,249 2,097,714 94,626 LIABILITIES Current liabilities(payable from current assets): Accounts payable 1,092,183 42,215 1,267,577 78,978 2,480,953 182,326 Retainage payable - - 38,880 - 38,880 - Due to other funds 799,593 - 799,593 - Claims payable - - - - 3,289,891 Due to other governments 6,635 - 25,961 32,596 - Other deposits 1,000 - - 1,000 Unearned revenues - 29,673 - - 29,673 - Aecrued compensated absences 45,970 15,462 507,565 73,662 642,659 72,314 Total current liabilities(payable from current assets) 1,138,153 894,578 1,814,022 178,601 4,025,354 3,544,531 Current liabilites(payable from restricted assets): Accounts payable - - 7,412 - 7,412 - Retainage payable - 31,833 - 31,833 Accrued interest payable - 91,433 - 91,433 Closure and maintenance costs payable 4,630,451 - - - 4,630,451 - Net pension liability 12,943 11,955 175,037 30,552 230,487 30,673 Notes payable - - 973,000 - 973,000 - Bonds payable - - 1,905,000 1,905,000 Customer deposits 135,126 - 2,930,591 - 3,065,717 - Total current liabilities(payable from restricted assets) 4,778,520 11,955 6,114,306 30,552 10,935,333 30,673 Total current liabilities 5,916,673 906,533 7,928,328 209,153 14,960,687 3,575,204 Non-current liabilities: Accrued compensated absences - 48,124 192,021 8,918 249,063 42,717 Advance from other funds 212,500 - - 212,500 - Claims payable - - - - 4,887,629 Closure and maintenance costs payable 7,379,285 - - - 7,379,285 - Net pension liability 212,686 196,463 2,876,388 502,064 3,787,601 504,061 Notes payable - - 6,198,000 - 6,198,000 - Bonds payable-net of unamortized discount/premium - - 19,176,234 - 19,176,234 - Total non-current liabilities 7,591,971 457,087 28,442,643 510,982 37,002,683 5,434,407 Total liabilities 13,508,644 1,363,620 36,370,971 720,135 51,963,370 9,009,611 DEFERRED INFLOWS OF RESOURCES Deferred inflows related to pensions 49,510 45,732 669,562 116,870 881,674 117,334 NET POSITION Net investment in capital assets 33,439,089 8,092,276 171,456,420 126,494 213,114,279 415,137 Unrestricted 13,367,157 (1,261,143) 73,558,867 5,392,467 91,057,348 22,975,770 Total net position $ 46,806,246 $ 6,831,133 $ 245,015,287 $ 5,518,961 $ .304,171,627 $ 23,390,907 The accompanying notes are an integral part of the financial statements. 253 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 30,2015 Enterprise Funds Solid Waste Disposal Golf District Course OPERATING REVENUES Charges for services $ 11,455,302 $ 3,235,879 Charges for services pledged as security for revenue bonds - - Total operating revenues 11,455,302 3,235,879 OPERATING EXPENSES Personal services 543,085 505,367 Material, supplies, services and other operating 9,999,165 1,806,504 Depreciation 1,166,133 152,698 Total operating expenses 11,708,383 2,464,569 Operating income (loss) (253,081) 771,310 NONOPERATING REVENUES (EXPENSES) Interest income 179,092 3,191 Interest income pledged as security for revenue bonds - - Gain on disposal of equipment - 3,702 Interest expense - (33,828) Bond amortization expense - - Loss on disposal of equipment - - Total nonoperating revenues (expenses) 179,092 (26,935) Income(loss)before transfers and capital contributions (73,989) 744,375 Capital grants and contributions - - Transfers 24,990 - Change in net position (48,999) 744,375 Total net position-beginning, as restated(Note 18) 46,855,245 6,086,758 Total net position-ending $ 46,806,246 $ 6,831,133 The accompanying notes are an integral part of the financial statements. 254 Enterprise Funds County County Internal Utilities Building Total Service Funds $ - $ 2,958,488 $ 17,649,669 $ 22,125,803 30,089,101 - 30,089,101 - 30,089,101 2,958,488 47,738,770 22,125,803 7,401,773 1,360,766 9,810,991 2,487,906 10,939,066 705,284 23,450,019 21,820,391 14,854,818 19,140 16,192,789 125,198 33,195,657 2,085,190 49,453,799 24,433,495 (3,106,556) 873,298 (1,715,029) (2,307,692) - 26,231 208,514 135,261 417,011 - 417,011 - 53,185 - 56,887 - (2,004,297) - (2,038,125) - (22,133) - (22,133) - (1,795) - (1,795) - (1,558,029) 26,231 (1,379,641) 135,261 (4,664,585) 899,529 (3,094,670) (2,172,431) 11,572,857 - 11,572,857 - 75,990 - 100,980 1.1.2,516 6,984,262 899,529 8,579,167 (2,059,915) 238,031,025 4,619,432 295,592,460 25,450,822 $ 245,015,287 $ 5,518,961 $ 304,171,627 $ 23,390,907 255 Indian River County,Florida Board of County Commissioners Statement of Cash Flows Proprietary Funds For the Year Ended September 30, 2015 Enterprise Funds Solid Waste Disposal Golf District Course CASH FLOWS FROM OPERATING ACTIVITIES Cash received from customers $ 11,451,407 $ 3,232,781 Cash paid to suppliers for goods and services (9,418,532) (1,813,914) Cash paid to employees for services (562,753) (517,248 Net cash provided by(used in) operating activities 1,470,122 901,619 CASH FLOWS FROM NONCAPITAL FINANCING ACTIVITIES Transfers 24,990 - Proceeds from advances from other funds - 135,000 Payments on advances from other funds - (600,000) Net cash provided by(used in)noncapital financing activities 24,990 (465,000) CASH FLOWS FROM CAPITAL AND RELATED FINANCING ACTIVITIES Proceeds from issuance of long-term debt - - Payments on defeasance of debt - - Principal payments-bonds/notes - - Interest paid on long-term debt - (33,828) Payments on advances from other funds - (265,195) Proceeds from sales of capital assets - 3,702 Purchase of capital assets (282,449) (147,597) Bond paying agent and arbitrage fees - - Debt issuance costs - - Capital grants and contributions - - Net cash provided by(used in) capital and related financing activities (282,449) (442,918) CASH FLOWS FROM INVESTING ACTIVITIES Interest and dividends on investments 176,484 3,155 Net cash provided by investing activities 1.76,484 3,155 Net increase(decrease)in cash and cash equivalents 1,389,147 (3,144) Cash and cash equivalents at beginning of year 25,266,005 8,528 Cash and cash equivalents at end of year $ 26,655,152 $ 5,384 Classified as: Current assets $ 11,357,559 $ 5,384 Restricted assets 15,297,593 - Totals $ 26,655,152 $ 5,384 The accompanying notes are an integral part of the financial statements. 256 County County Internal Utilities______ Building Total Service Funds - $ 30,324,101 $ 2,958,488 $ 47,966,777 $ 22,1.85,025 (11,619,376) (683,463) (23,535,285) (21,712,701) (7,596,683) X1,395,674) (10,072,358 ________(2,517,991)_ 11,108,042 879,351 14,359,134 (2,045,667) 75,990 - 100,980 112,516 - - 135,000 - ---------------------------------- --------------------------------- (600,000) -(7,000) 75,990 - (364,020) 105,516 7,171,000 - 7,1.71,000 - (14,205,000) - (14,205,000) - (3,485,000) - (3,485,000) - (1,852,421) - (1,886,249) - - - (265,195) - 53,185 - 56,887 - (2,587,403) (109,418) (3,126,867) (155,795) (1,900) - (1,900) - (34,512) - (34,512) - 5,415,726 - 5,415,726 - (9,526,325) (109,418) (10,361,110) (155,795) 421,250 24,928 625,817 132,161 421,250 24,928 625,817 132,161 2,078,957 794,861 4,259,821 (1,963,785) 68,668,164 5,335,093 99,277,790 32,479,856 $ 70,747,121 $ 6,129,954 $ 103,537,611 $ 30,516,071 $ 37,273,275 $ 6,129,954 $ 54,766,172 $ 30,516,071 33,473,846 - 48,771,439 - $ 70,747,121 $ 6,129,954 $ 103,537,611 $ 30,516,071 Continued 257 Indian River County,Florida Board of County Commissioners Statement of Cash Flows Proprietary Funds For the Year Ended September 30,2015 Enterprise Funds Solid Waste Disposal Golf D i str i et Course RECONCILIATION OF NET OPERATING INCOME (LOSS) TO NET CASH PROVIDED BY(USED IN) OPERATING ACTIVITIES Operating income (loss) $ (253,081) 771,310 Adjustments to reconcile operating income to net cash provided by operating activities: Depreciation 1,166,133 152,698 Work in progress reclassified as expense - - (Increase)Decrease in assets: Accounts receivable 15,649 Due from other governments (21,044) Inventories - (37,125) Liens receivable - Impact fees receivable - Special assessments receivable - - Prepaid items (1,136) 395 Increase (Decrease)in liabilities: Accounts payable 81,769 28,830 Due to other governments - 490 Retainage payable - - Customer deposits 1,500 Closure and maintenance costs payable 500,000 Pollution remediation costs payable - Net pension liability (16,819) (15,537) Unearned revenues (3,098) Claims payable - Accrued compensated absences (2,849) 3,656 Total adjustments 1,723,203 130,309 Net cash provided by(used in)operating activities $ 1,470,122 901,619 NONCASH CAPITAL AND RELATED FINANCING ACTIVITIES Change in fair value of investments $ 17,129 $ 371 Capital grants and contributions $ - $ - Capital assets purchased through accounts payable $ 135,407 $ The accompanying notes are an integral part of the financial statements. 258 County County Internal Utilities Builder Total Service Funds $ (3,106,556) $ 873,298 $ (1,715,029) $ (2,307,692) 14,854,818 19,140 16,192,789 125,198 68,824 - 68,824 - (4,290) - 11,359 25,048 - - (21,044) 34,174 21,588 - (15,537) 41,450 (426,401) - (426,401) - 414,951 - 414,951 - 129,034 - 129,034 - 18,920 (87) 18,092 161,029 (743,145) 14,737 (617,809) (45,764) 7,171 7,661 - (34,997) - (34,997) - 121,706 - 123,206 - - - 500,000 - (11,500) - (11,500) - (227,472) (39,704) (299,532) (39,863) (3,098) - - - - (49,025) 32,562 4,796 38,165 9,778 14,214,598 6,053 16,074,163 262,025 $ 11,108,042 $ 879,351 $ 14,359,134 $ (2,045,667) $ 73,485 $ 6,847 $ 97,832 $ 32,210 $ 6,157,131 $ - $ 6,157,131 $ - $ 151,974 $ - $ 287,381 $ - 259 Indian River County, Florida Board of County Commissioners Statement of Fiduciary Net Position Fiduciary Funds September 30,2015 Other Postemployment Agency Benefits Trust ASSETS Cash and cash equivalents $ 2,248,584 $ - Investments, at fair value: Index funds - 7,075,338 U.S. government securities funds - 6,436,904 Primary money market fund - 1,337,914 Total assets $ 2,248,584 $ 14,850,156 LIABILITIES Other deposits held in escrow 2,248,584 - Total liabilities $ 2,248,584 NET POSITION Assets held in trust for other postemployment benefits 14,850,156 Total net position $ 14,850,156 The accompanying notes are an integral part of the financial statements. 260 Indian River County, Florida Board of County Commissioners Statement of Changes in Fiduciary Net Position Other Post Employment Benefits Trust Fund For the Year Ended September 30, 2015 ADDITIONS Employer contributions $ 2,977,075 Investment loss (218,173) Investment expense (3,045) Total additions 2,755,857 DEDUCTIONS Benefits payments 1,944,533 Total deductions 1,944,533 Change in net position 811,324 Net position-beginning 14,038,832 Net position- ending $ 14,850,]56 The accompanying notes are an integral part of the financial statements. 261 �toxroA Indian River County, Florida Board of County Commissioners Notes To Financial Statements Year Ended September 30, 2015 NOTE 1 - SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES The Board of County Commissioners (the "Board") is a County agency and a local governmental entity pursuant to Article VIII, Section 1(e) of the Constitution of the State of Florida. For financial statement and reporting purposes, the Board does not meet the definition of a legally separate organization and is not considered to be a component unit. The Board is considered to be a part of the primary government of Indian River County. The financial statements contained herein represent the financial transactions of the Board only. The following is a summary of the significant accounting principles and policies used in the preparation of the accompanying financial statements. A. Reporting Entity The concept underlying the definition of the reporting entity is that elected officials are accountable to their constituents for their actions. The reporting entity's financial statements should allow users to distinguish between the primary government (the Board) and its component units. However, some component units, because of the closeness of their relationship with the Board, should be blended as though they are part of the Board. Otherwise, most component units should be discretely presented. As required by generally accepted accounting principles, the financial reporting entity consists of. (1) the primary government (the Board), (2) organizations for which the Board is financially accountable, and (3) other organizations for which the nature and significance of their relationship with the Board are such that exclusion would cause the reporting entity's financial statements to be misleading or incomplete. The Board is financially accountable if it (a) serves as the governing body of the legally separate organization and there is a financial burdenibenefit relationship or management has operational responsibility of the organization, (b) the organization provides almost exclusive service or benefit to the primary government, or (c) total debt of the organization is repayable almost entirely from the resources of the primary government. Based on these criteria, 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 governing body for and has operational responsibility over the SWDD. The Board also 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 governing body for and has operational responsibility over the EMS. The Board also 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. 263 Indian River County, Florida Board of County Commissioners Notes To Financial Statements Year Ended September 30, 2015 NOTE 1 - SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES - Continued B. Fund Financial Statements The underlying accounting system of the Board is organized and operated on the basis of separate funds, each of which is considered to be a separate accounting entity. The operations of each fund are accounted for with a separate set of self-balancing accounts that comprise its assets, liabilities, fund 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 16 for more information on the spending hierarchy of fund balances in the fund financial statements. Governmental Funds Governmental fund financial statements are reported using the current financial resources measurement focus and the modified accrual basis of accounting. Revenues are recognized as soon as they are both measurable and available. Revenues are considered to be available when they are collectable within the current period or soon enough thereafter to pay liabilities of the current period. For this purpose, the Board considers revenues to be available if they are collected within 45 days after the end of the current fiscal period. Expenditures generally are recorded when a liability is incurred, as under accrual accounting. Franchise fees, sales taxes, gas taxes, operating and capital grants, and interest associated with the current fiscal period are all considered to be susceptible to accrual and so have been recognized as revenues of the current fiscal period. All other revenue items are considered to be measurable only when cash is received by the Board. Under the current financial resources measurement focus, only current assets, 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 16 for more information on the categories and descriptions of fund balances in the fund financial statements. 264 Indian River County, Florida Board of County Commissioners Notes To Financial Statements Year Ended September 30, 2015 NOTE 1 - SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES—Continued B. Fund Financial Statements—Continued Because of their spending measurement focus, expenditure recognition for governmental fund types excludes amounts represented by non-current liabilities. Since they do not affect net current assets, such long-term amounts are not recognized as governmental fund type expenditures or fund liabilities. Amounts expended to acquire capital assets are recorded as expenditures in the year that resources were expended, rather than as fund assets. The proceeds of long-term debt are recorded as an other financing source rather than as a fund liability. Debt service expenditures, as well as expenditures related to compensated absences and claims and judgments, are recorded only when payment is due. Proprietary Funds The Board's enterprise and internal service funds are proprietary funds. In the fund financial statements, proprietary funds are presented using the accrual basis of accounting. Revenues are recognized when they are earned and expenses are recognized when the related goods or services are delivered. In the fund financial statements, proprietary funds are presented using the economic resources measurement focus. This means that all assets, deferred outflows of resources, liabilities, and deferred inflows of resources (whether current or non-current) associated with their activity are included on their balance sheets. Proprietary fund type operating statements present increases (revenues) and decreases (expenses) in total net position. Proprietary funds distinguish operating revenues and expenses from non-operating items. Proprietary fund operating revenues, such as charges for services and premiums charged to the Board and employees under various insurance programs, 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. Principal operating expenses include salary and benefits, cost of sales and services, claims, and insurance premiums. All revenues and expenses not meeting these definitions are reported as non-operating revenues and expenses. Amounts paid to acquire capital assets are capitalized as assets in the fund financial statements, rather than reported as an expense. Proceeds of long-term debt are recorded as a liability in the fund financial statements, rather than as an other financing source. Amounts paid to reduce long-term indebtedness are reported as a reduction of the related liabilities, rather than as an expense. Fiduciary Funds The fiduciary financial statements include financial information for the agency fund and the other postemployment benefits trust fund. The agency fund of the Board primarily represents assets held by the Board in a custodial capacity for other individuals or governments. The other postemployment benefits trust fund (Trust) accounts for activities of the Trust, which accumulates resources for health insurance benefit payments for current retirees and for current employees upon their retirement. The agency and Trust fund statements are presented using the accrual basis of accounting. 265 Indian River County, Florida Board of County Commissioners Notes To Financial Statements Year Ended September 30, 2015 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 Board. It is used to account for all financial resources, except those accounted for and reported 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 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. 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. ProprietarMajor 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 County golf course. County Utilities Fund — The County Utilities Fund accounts for the revenues, expenses, assets and liabilities associated with the County water and sewer system. County Building Fund — The County Building Fund accounts for revenues, expenses, assets, and liabilities associated with the County building permit and inspection program. 266 Indian River County, Florida Board of County Commissioners Notes To Financial Statements Year Ended September 30, 2015 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 Information Technology services provided to other departments of the Board on a cost reimbursement basis. Agency Fund—The Agency Fund is used to account for assets held in a custodial capacity by the Board for other governmental units, other funds, individuals and businesses. Examples include payroll deductions, self insurance premiums, and developer escrow funds. Other Postemployment Benefits Trust Fund— The Other Postemployment Benefits Trust Fund accounts for activities of the Trust, which accumulates resources for health insurance benefit payments for current retirees and for current employees upon their retirement. Contributions are recorded when earned and benefit payments and refunds when incurred within each year. C. Cash and Cash Equivalents Cash and cash equivalents include deposits and all highly liquid investments with maturities of ninety days or less when purchased. The Board maintains a cash and investment pool that is available for use by all funds. Earnings for the pooled investments are allocated to the respective funds based on applicable cash participation by each fund. The investment pool is managed such that all participating funds have the ability to deposit and withdraw cash as if they were demand deposit accounts. Therefore, all balances representing participants' equity in the investment pools are classified as cash and cash equivalents for financial statement purposes. In addition, longer-term investments are held by several of the Board's funds and are, therefore, reported as current restricted cash and cash equivalents on these statements. When restricted and unrestricted resources are available, expenses are paid first from restricted resources. D. Investments Investments consist of U.S. Treasury Securities, U.S. Government Agency Securities, money market funds, 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 FLGIT Fund 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. 267 Indian River County, Florida Board of County Commissioners Notes To Financial Statements Year Ended September 30, 2015 NOTE 1 - SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES - Continued E. Allowance for Doubtful Accounts The Board provides an allowance for water and sewer and ambulance service accounts receivables that may become uncollectable. At September 30, 2015, the allowance for water and sewer was $424,493 and for ambulance services was $1,116,986. No other allowances for doubtful accounts are maintained since other accounts receivable are considered collectable as reported at September 30, 2015. F. Inventories Inventories are valued at cost, which approximates market, using the "first-in, first-out" method of accounting, with the exception of the Golf Course 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. G. Prepaid Items This account represents prepayments for services that will be used in future periods. The Board's policy is to record the expenditure for the services when they are used rather than when the cash is disbursed. H. Capital Assets Capital assets, which include property, plant, equipment, infrastructure (e.g., roads, bridges, right-of- ways, water and sewer distribution systems, beach restoration, stormwater systems and similar items), and intangible assets (e.g. software, easements, and rights), are reported in the applicable governmental or business-type activities column in the government-wide financial statements. The Board 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 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 and Comptroller, Property Appraiser, Supervisor of Elections and Tax Collector, and is accountable for them under Florida Law. Capital assets used by the Board's governmental funds are reported in the financial statements of the County. Capital assets of the Board's enterprise and internal service funds are reported in the Proprietary Funds' financial statements. 268 Indian River County, Florida Board of County Commissioners Notes To Financial Statements Year Ended September 30, 2015 NOTE 1 - SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES—Continued H. 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 Road and bridge infrastructure 20-50 Fiberoptics 20 Software 3-5 Beach preservation infrastructure 7 Stormwater infrastructure 30 I. Capitalization of Interest Interest costs related to bond issues are capitalized during the construction period. These costs are netted against applicable interest earnings on construction fund investments. During the current period, the Board did not have any capitalized interest. J. 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. 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 has three items that qualify for reporting in these categories. One item is the deferred charge on refunding which is reported as a deferred outflow of resources on the Statement of Fund 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. The second item is unavailable revenue, which arises under a modified accrual basis of accounting, and is reported as a deferred inflow of resources in the governmental funds balance sheet. The source of the unavailable revenue is a special assessment on road paving, ambulance service billings, and state and federal grant revenues. These amounts are deferred and recognized as an inflow of resources in the period the amounts become available. 269 Indian River County, Florida Board of County Commissioners Notes To Financial Statements Year Ended September 30, 2015 NOTE 1 - SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES—Continued J. Deferred Outflows/Inflows of Resources - Continued In addition to the above two deferred items, both deferred outflows and inflows related to pensions are calculated in accordance with GASB Statement 68, Accounting and Financial Reporting for Pensions. These deferred outflows and inflows are an aggregate of various pension items and will be recognized as adjustments to pension expense or net pension liability in future reporting years. Further information. and detail on the composition of these items is discussed in Note 13. K. Pensions/Net Pension Liability In the Statement of Fund Net Position for Proprietary Funds, net pension liability represents the Board's proportionate share of the net pension liability of the cost-sharing pension plans in which it participates. This proportionate amount represents a share of the present value of projected benefit payments to be provided through the cost-sharing pension plan to current active and inactive employees. The benefit payments are attributable to those employees past periods of service, less the amount of the cost-sharing pension plans' fiduciary net position. The Board participates in both the Florida Retirement System (FRS), which operates a defined benefit and compensation plan, and the Health Insurance Subsidy Program (HIS), which is a defined benefit plan. For purposes of measuring the net pension liability, deferred outflows and inflows of resources related to pensions, pension expense, and fiduciary net position are determined on the same basis as the FRS. Benefit payments (including refunds of employee contributions) are recognized when due and payable in accordance with the benefit terms. Investments are reported at fair value. L. Change in Accounting Principles/New Accounting Pronouncement As a participating employer in the FRS, the Board implemented Governmental Accounting Standards Board (GASB) Statement No. 68, Accounting and Financial Reporting for Pensions. This statement requires employers participating in cost-sharing, multiple-employer defined benefit pension plans to report the employers' proportionate share of the net pension liabilities of the pension plans. The requirements of this Statement are being implemented prospectively, with the Board reporting its proportionate share of the actuarially determined liabilities for proprietary funds of $2,915,394 at October 1, 2014. In addition, the Board reported beginning deferred outflows of $444,047 and beginning deferred inflows of $2,614,229 related to pensions. The net adjustment to beginning net position for the proprietary funds was $5,085,576. 270 Indian River County, Florida Board of County Commissioners Notes To Financial Statements Year Ended September 30, 2015 NOTE 1 - SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES—Continued M. 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. N. 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. O. 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. P. 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. Q. 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, 2015. 271 Indian River County, Florida Board of County Commissioners Notes To Financial Statements Year Ended September 30, 2015 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 means of financing them. The Board then holds workshops to review the tentative budget by fund on a departmental level. 5. During September, public hearings are held pursuant to Section 200.065 of the Florida Statutes in order for the Board to receive public input on the tentative budget. At the end of the last public hearing, the Board enacts resolutions to legally adopt the budgets at the fund level for all governmental and proprietary fund types. The budgets legally adopted by the Board set forth the anticipated revenues by source and the appropriations by function. 6. Formal budgetary integration on an object level is used as a management control device for the governmental and proprietary funds of the Board. Management is authorized to transfer budgeted amounts between objects and departments in any fund as long as management does not exceed the total appropriations of a fund. Board approval to amend the budget is only required when unanticipated revenues are received that management wishes to have appropriated, thereby increasing the total appropriations of a fund. 7. Budgets for the governmental and proprietary fund types are adopted on a basis consistent with generally accepted accounting principles. 8. Appropriations for the Board lapse at the close of the fiscal year. 272 Indian River County, Florida Board of County Commissioners Notes To Financial Statements Year Ended September 30, 2015 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, 2015, the carrying value of the Board's deposits was $23,286,835 and the bank balance was $23,873,246. 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, 2015 was $9,400. 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, 2015, accrued interest for the Board's portfolio totaled $132,813 and was allocated to the funds based on their average monthly balance for September. The remaining accrued interest is reflected in utilities and road paving assessments. C. Investments On April 23, 2015, the Board of County Commissioners updated its investment policy to increase the limit on certificates of deposit. On October 22, 2015, the Board of County Commissioners updated its investment policy to exclude SBA pools from the list of authorized investments, to specify money manager's performance benchmarks, and to clarify the Clerk of Circuit Court and Comptrollers's role in bank and investment agreements. 273 Indian River County, Florida Board of County Commissioners Notes To Financial Statements Year Ended September 30, 2015 NOTE 2 - CASH AND CASH EQUIVALENTS - Continued C. Investments - Continued As of September 30, 2015, the Board had the following investments: Weighted Average Maturity Portfolio Credit Investment Type Fair Value In Years Percentage Risks* Fixed Rate Debt Instruments: U.S. Treasuries $ 100,045,921 0.89 35.22 % N/A U.S. Agencies:*** Federal Farm Credit Bureau 19,999,962 0.81 7.04 AA+ Federal Home Loan Bank 20,521,606 1.41 7.22 AA+ Federal Home Loan Mortgage 40,960,658 1.02 14.42 AA+ Federal National Mortgage Assoc. 5,995,309 0.39 2.11 AA+ Other Fixed Rate Investments: Oculina Bank CD 1,003,428 1.61 0.35 TD Bank CD 6,021,585 1.60 2.12 National Bank of Commerce CD 6,014,006 0.61 2.12 Harbor Community Bank CD 3,042,693 0.35 1.07 N/A Other Market Rate Investments: Regions Bank Money Market 21,144,687 0.08 7.44 N/A TD Bank Money Market 20,079,162 0.08 7.07 N/A BankUnited Money Market 23,168,615 0.08 8.16 N/A Florida Local Government AAAf and Investment Trust Fund 11,984,722 0.08 4.22 S-1** W&S Sinking Fund Reserve: U.S. Treasuries 4,104,192 1.24 1.44 N/A Total Fair Value $ 284,086,546 100 % Weighted Average Maturity of Investments 0.72 * 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). 274 Indian River County, Florida Board of County Commissioners Notes To Financial Statements Year Ended September 30, 2015 NOTE 2 - CASH AND CASH EQUIVALENTS - Continued C. Investments—Continued The Florida Local Government Investment Trust Fund is a pool of various securities with maturities of less than five years. The fund was established by Florida Statute 163.01, is administered by the Florida Association of Court Clerks, and is marked to market daily. Interest Rate Risk The Board's investment policy limits interest rate risk by attempting to match investment maturities with known cash needs and anticipated cash flow requirements. All investments must have stated maturities of ten (10) years or less and no more than 25% of the portfolio shall be invested in instruments with stated final maturities greater than five (5) years. The portfolio shall have securities with varying maturity and at least 10% of the portfolio shall be invested in readily available funds. Credit Risks Florida Statutes, Section 218.415 and the Board's investment policy limit investments to the following: 1. Direct obligations of the United States Treasury; 2. Any intergovernmental investment pool, with the exception of SBA pools, authorized pursuant to the Florida Interlocal Cooperation Act as provided in Florida Statute 163.01; 3. Florida Local Government Investment Trust Fund; 4. Interest-bearing time deposits or savings in qualified public depositories as defined in Section 280.02, Florida Statutes; 5. Federal agencies and instrumentalities; 6. Securities of, or other interests in, any open-end or closed-end management-type investment company or investment trust registered under the Investment Company Act of 1940, 15 U.S.C. ss. 80a-1 et seq., as amended from time to time, provided that the portfolio of such investment company or investment trust is limited to obligations of the United States Government or any agency or instrumentality thereof and to repurchase agreements fully collateralized by such United States Government obligations, and provided that such investment company or investment trust takes delivery of such collateral either directly or through an authorized custodian; 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. 275 Indian River County, Florida Board of County Commissioners Notes To Financial Statements Year Ended September 30, 2015 NOTE 2 - CASH AND CASH EQUIVALENTS - Continued C. Investments—Continued 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 $6 million of the portfolio may be placed in certificates of deposit with any one financial institution. No more than 10% 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, 2015 the Board'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: Money Markets at Regions Bank, TD Bank, and Bank United; Certificates of Deposit at Harbor Community Bank, TD Bank, Oculina Bank and National Bank of Commerce; and the Florida Local Government Investment Trust (held by the Bank of New York/Mellon). 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 November 5, 2013). 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. 276 Indian River County, Florida Board of County Commissioners Notes To Financial Statements Year Ended September 30, 2015 NOTE 2 - CASH AND CASH EQUIVALENTS - Continued D. OPEB Trust Investments - Continued The contribution of $2.98 million for the year ended September 30, 2015 was invested in the various funds listed below. As of September 30, 2015, the Indian River County OPEB Trust (IRCOT) had the following investments: Weighted Average Maturity Portfolio Credit Investment Type Fair Value In Years Percentage Risks* Short-Term Portion: Fidelity Treasury Money Market $ 4,862 0.11 0.03% AAAm Long-Term Portion: Vanguard 500 Index 3,161,492 N/A 21.29 N/A Vanguard All World Ex-US 2,839,805 N/A 19.12 N/A Vanguard Mid Cap Index 729,129 N/A 4.91 N/A Vanguard Small Cap Index 344,913 N/A 2.32 N/A Vanguard Short Term Treasury 4,653,186 2.40 31.33 N/A Vanguard Intermediate Treasury 1,573,207 5.70 10.59 N/A Vanguard Prime Money Market 1,337,914 0.12 9.02 N/A Vanguard Federal Money Market 205,648 0.13 1.39 N/A Total Fair Value $ 14,850,156 100% * Ratings based upon Standard and Poor's NOTE 3 -PROPERTY TAX REVENUES Taxable values for all property are established as of January 1, which is the date of lien, for the fiscal year starting October 1. Property tax revenues recognized for the 2014-2015 fiscal year were levied in October 2014. 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. 277 Indian River County, Florida Board of County Commissioners Notes To Financial Statements Year Ended September 30, 2015 NOTE 4—CAPITAL ASSETS A. Governmental Fund Type Capital Assets A summary of changes in the Governmental fund type capital assets is as follows: Buildings And Construction Land Improvements Equipment Intangibles Infrastructure In Progress Total Balance 10/1!2014 $ 133,274,798 $ 211,077,040 $ 36,938,656 $ 3,580,536 $ 378,925,494 $ 43,462,054 $ 807,258,578 Additions 388,213 2,275,536 3,454,478 191,956 6,908,243 19,158,201 32,376,627 Deletions - (518,585) (1,529,497) (20,647) (168,720) (12,276,920) (14,514,369) Balance 9/30/2015 $ 133,663,011 $ 212,833,991 $ 38,863,637 $ 3,751,845 $ 385,665,017 $ 50,343,335 $ 825,120,836 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 Enterprise Funds A summary of changes in the Enterprise fund type capital assets is as follows: Buildings And Construction Land Improvements Equipment Intangibles In Progress Total Balance 10/1/2014 $ 21,556,248 $ 435,584,104 $ 14,965,608 $ 2,581,659 $ 11,319,754 $ 486,007,373 Additions - 15,639,843 923,036 227,058 1,888,201 18,678,138 Deletions - (1,010,120) 3( 1,016) - _ 11,352,013) (12,393,149) 21,556,248 450,213,827 15,857,628 2,808,717 1,855,942 492,292,362 Less: Accumulated Depreciation - (238,257,219) (13,290,830) (764,491) - (252,312,540) Balance 9/30/2015 $ 21,556,248 $ 211,956,608 $ 2,566,798 $ 2,044,226 $ 1,855,942 $ 239,979,822 The beginning balance for land has been increased by $99,485 and the beginning balance for buildings and improvements has been decreased by the same amount to correct amounts reported at September 30, 2014. 278 Indian River County, Florida Board of County Commissioners Notes To Financial Statements Year Ended September 30, 2015 NOTE 4—CAPITAL ASSETS - Continued B. Proprietary Fund Type Capital Assets - Continued Internal Service Funds A summary of changes in the Internal Service fund type capital assets is as follows: Buildings And Improvements Equipment Intangibles Total Balance 10/1/2014 $ 2,837 $ 903,131 $ 1,487,719 $ 2,393,687 Additions - 62,985 112,152 175,137 --------------------------------------------------- -- --- ---------------------------- ----- 156 Deletions 5,15 25, 2,837 940,960 1,599,871 2,543,668 Less:Accumulated Depreciation (2,837) (792,350) (1,333,344) (2,128,531) Balance 9/30/2015 $ - $ 148,610 $ 266,527 $ 41.5,1.37 NOTE 5—RESTRICTED CASH AND CASH EQUIVALENTS AND INVESTMENTS Solid Waste Disposal County District Utilities Total Sinking funds $ - $ 4,435,459 $ 4,435,459 Renewal and replacement 3,152,731 3,485,928 6,638,659 Customer deposits 135,126 2,930,591 3,065,717 Capital construction - 22,621,868 22,621,868 Closure and maintenance cost 12,009,736 - 12,009,736 Total $ 15,297,593 $ 33,473,846 $ 48,771,439 279 Indian River County, Florida Board of County Commissioners Notes To Financial Statements Year Ended September 30, 2015 NOTE 6 - INTERFUND BALANCES Interfund balances at September 30, 2015, consisted of the following: Receivable Fund Payable Fund Amount General Fund Nonmajor Governmental Funds $ 405,000 General Fund Golf Course Enterprise Fund 799,593 $ 1,204,593 In October 2010, the General Fund loaned $333,050 to the Golf Course Fund to purchase new golf carts. In September 2013, the General Fund loaned $1,565,000 to the Golf Course Fund for early payoff of the 2003 Recreational Revenue Bonds. In September 2014, the General Fund loaned $630,000 to the Golf Course Fund for a new irrigation system. In September 2015, the General Fund loaned the Golf Course Fund $135,000 as a short-term cash loan to be repaid within the next twelve months. 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 2016. The remaining amount due from the Golf Course Fund is reported as an interfund advance. The amounts due from the Nonmajor Governmental Funds represent short-term cash loans that will be repaid within the next twelve months. Interfund advance at September 30, 2015, consisted of the following: Receivable Fund Payable Fund Amount General Fund Golf Course Fund $ 212,500______ This amount is considered a long-term advance between major funds expected to be paid in fiscal year 2017. This amount has been presented as nonspendable on the General Fund Balance Sheet. 280 Indian River County, Florida Board of County Commissioners Notes To Financial Statements Year Ended September 30, 2015 NOTE 7 -INTERFUND TRANSFERS Interfund transfers for the year ended September 30, 2015,. consisted of the following: Transfers In: Impact Nonmajor Solid Waste Internal Fees Transportation Governmental Disposal Utilities Service Fund Fund Fund District Fund Fund Total Transfers Out: General Fund $ - $ 8,573,172 $ 118,235 $ - $ - $ 37,516 $ 8,728,923 Impact Fees Fund - - - 24,990 - - 24,990 Transportation Fund - - - - 75,990 75,000 150,990 Optional Sales Tax Fund - - 128,249 - - - 128,249 Nonmaj or Governmental Funds 57,075 - - - - - 57,075 Total $ 57,075 $ 8,573,172 $ 246,484 $ 24,990 $ 75,990 $ 112,516 $ 9,090,227 Transfers are used for the following purposes: 1) use unrestricted general fund revenues to finance transportation activities which are accounted for in a special revenue fund, 2) use unrestricted general fund revenues for beach restoration activities which must be accounted for in another fund, 3) use unrestricted general fund revenues to offset a portion of salaries and benefits expenses for an employee accounted for in the health insurance fund, 4) use impact fee fund revenues to offset portion of landfill improvements, 5) use unrestricted stormwater revenues to offset Egret Marsh employee costs accounted for in the utilities fund, 6) use transportation fund revenues to offset vehicle maintenance costs accounted for in the fleet internal service fund, 7) to use capital project fund revenues for improvements to the Historic Dodgertown facility, and 8) to use nonmajor governmental fund revenues to offset prior year expenditures related to a boat ramp project in the impact fees fund. 281 Indian River County, Florida Board of County Commissioners Notes To Financial Statements Year Ended September 30, 2015 NOTE 8—DUE FROM OTHER GOVERNMENTS Governmental Funds On November 18, 2008, the Board entered into a locally funded agreement with the Florida Department of Transportation (FDOT) to advance the six-laning of State Road 60 from 82nd Avenue to 1-95 (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 quarterly installments over a four-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 Tax Fund Segment Two Amount Advance Funded $ 14,429,754 Less: Reimbursements received as of 9/30/2015 (13,986,779) Balance Due from FDOT SR60 Agreement 442,975 Additional Funds Due from other governments 2,489,022 Total Due from other governments $ 2,931,997 282 Indian River County, Florida Board of County Commissioners Notes To Financial Statements Year Ended September 30, 2015 NOTE 9-ACCOUNTS PAYABLE Accounts Payable at September 30, 2015, were as follows: Total Salaries and Accounts Governmental Funds: Vendors Benefits Payable General $ 940,316 $ 342,254 $ 1,282,570 Impact Fees 141,654 2,789 144,443 Secondary Roads Construction 729,282 8,065 737,347 Transportation 172,325 212,404 384,729 Emergency Services 247,104 623,096 870,200 Optional Sales Tax 709,606 - 709,606 Other Governmental 484,032 24,238 508,270 Total Governmental Funds $ 3,424,319 $ 1,212,846 $ 4,637,165 Proprietary Funds: Payable from current assets: Solid Waste $ 1,074,523 $ 17,660 $ 1,092,183 Golf Course 29,104 13,111 42,215 Utilities 1,048,775 218,802 1,267,577 Building 33,041 45,937 78,978 Other Proprietary 1.41,01.4 41,312 1.82,326 Payable from restricted assets: Utilities 7,412 - 7,41.2 Total Proprietary Funds $ 2,333,869 $ 336,822 $ 2,670,691 Included in salaries and benefits payable is a liability to the Florida Retirement System (FRS) for pension contributions due. The amounts due to FRS at September 30, 2015 were $139,331 for governmental funds and $21,953 for proprietary funds. The Board has not engaged in any short-term debt activity during fiscal year 2015 other than that listed in Note 6. 283 Indian River County, Florida Board of County Commissioners Notes To Financial Statements Year Ended September 30, 2015 NOTE 10 -LONG-TERM LIABILITIES A. Governmental Long-Term Debt Changes in Long-Term Liabilities Balance Balance October 1, September 30, 2014 Additions Deletions 2015 Accrued Compensated Absences: $ 4,193,794 $ 2,659,077 $ 2,750,165 $ 4,102,706 Bonds Payable: Limited General Obligation Bonds -2006 Series 26,010,000 - 22,465,000 3,545,000 Spring Training Facility Revenue Bonds -2001 Series _ 7,700,000 _470,000 7,230,000 Total Bonds Payable 33,710,000 22,935,000 10,775,000 Notes Payable: Limited General Obligation Refunding 7 20,369,000 320,000, 20,049,000, Grand Total $ 37,903,794 $ 23,028,077 $ 26,005,165 $ 34,926,706 Of the $4,102,706 liability for accrued compensated absences, management estimates that $2,427,214 will be due and payable within one year. The long-term liabilities are not reported in the financial statements of the Board since they are not payable from available spendable resources. They are reported in the financial statements of the County. The General Obligation Bonds and Spring Training Facility Revenue Bonds are not reported in the governmental fund statements since they are not current liabilities payable from available spendable resources. They are reported in the government-wide financial statements of the County. Payments on the above general obligation bond and note 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). 284 Indian River County, Florida Board of County Commissioners Notes To Financial Statements Year Ended September 30, 2015 NOTE 10 -LONG-TERM LIABILITIES—Continued A. Governmental Long-Term Debt- Continued Annual Debt Service Payments The annual debt service payments for bonds and notes outstanding at September 30, 2015, are as follows: Fiscal Year Limited General Spring Training Facility Limited General Ending Obligation Bonds Revenue Bonds Obligation Note September 30 Series 2006 Series 2001 Series 2015 Principal Interest Principal Interest Principal Interest ---------- - --------- _._- .._ ------- ------- — ------- ------ 2016 $ 3,545,000 $ 70,900 $ 495,000 $ 370,037 $ 343,000 $ 332,813 2017 - - 520,000 344,050 4,053,000 327,119 2018 - - 550,000 316,750 4,158,000 259,840 2019 - - 585,000 287,875 4,227,000 190,817 2020 - - 615,000 257,163 4,298,000 120,649 2021-2025 - - 1,970,000 893,125 2,970,000 49,302 2026-2030 - - 2,060,000 427,750 - - 2031 - - 435,000 21,750 - - Total 3,545,000 70,900 7,230,000 2,918,500 20,049,000 1,280,540 Less: Current portion 3,545,000 - 495,000 - 343,000 Total $ - $ 70,900 $ 6,735,000 $ 2,918,500 $ 19,706,000 $ 1,280,540 Limited General Obligation Bonds Purpose— On July 6, 2006, the Board issued $48,600,000 of Limited General Obligation Bonds, Series 2006. The issuance of the Series 2006 bonds was approved by a majority of votes cast in a bond referendum held on November 2, 2004, by the qualified electors of the County. The referendum authorized a total of$50,000,000 aggregate principal amount of limited general obligation bonds. The proceeds of this issue will provide funds to acquire interest in lands to protect water resources and/or drinking water sources, environmentally sensitive lands, historic sites, and/or agricultural lands together with the necessary preservation, restoration, remediation and reclamation activities to preserve and enhance such property. Pledge of revenues - The principal and interest on the bonds are payable from ad valorem taxes not exceeding 1/z 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. The total tax revenue received was $4,795,927, of which 100% is pledged for payment of this bond and the refunding 2015 series Note. Total principal and interest paid on this bond was $4,148,006 and represents 86% of total pledged revenue. 285 Indian River County, Florida Board of County Commissioners Notes To Financial Statements Year Ended September 30, 2015 NOTE 10 -LONG-TERM LIABILITIES—Continued A. Governmental Long-Term Debt- Continued Limited General Obligation Bonds - Continued Bonds Issued- At September 30, 2015, Limited General Obligation Bonds consisted of the following: Outstanding at Interest Rates September 30, Description and Date Maturity Issue 2015 Limited General Obligation 4.00%-5.00% Bonds,2006 Series 1/1 and 7/1 2016 $ 48,600,000 $ 3,545,000 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. On April 9, 2015, all eligible outstanding bonds ($19,075,000) were called early and placed in an escrow account held by Regions Bank. The July 1, 2015 and 2016 principal payments ($6,935,000) were not included in the redemption. The $19,075,000 was refunded by a Regions Bank Note discussed in further detail later in this note. Spring TrainingFacility Revenue Bonds Purpose - On August 15, 2001, the Board issued $16,81.0,000 of Spring Training Facility Revenue 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 "Historic 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. 286 Indian River County, Florida Board of County Commissioners Notes To Financial Statements Year Ended September 30, 2015 NOTE 10 -LONG-TERM LIABILITIES - Continued A. Governmental Long-Term Debt—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 Board from the State of Florida pursuant to Section 21.2.20, 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 $852,375 represent nine percent of total pledged revenues. All three pledged revenue sources totaled $8,535,683 for the current fiscal year. The Board applied 100% of the state subsidy, 62% of the Fourth-Cent Tourist Tax, and none of the Half-Cent Sales Tax to the debt service payments. The total principal and interest remaining to be paid on the bonds is $10,148,500. Bonds Issued - At September 30, 2015, Spring Training Facility Revenue Bonds consisted of the following: Outstanding at Interest Rates September 30, Description and Date Maturity Issue 2015. Spring Training Facility 3.30%-5.25% Revenue Bonds, 2001 Series 4/1 and 10/1 2031 $ 16,810,000 $ 7,230,000 287 Indian River County, Florida Board of County Commissioners Notes To Financial Statements Year Ended September 30, 2015 NOTE 10-LONG-TERM LIABILITIES - Continued A. Governmental Long-Term Debt—Continued Spring TrainingFacility acility Revenue Bonds - Continued Remaining 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, 2017 Date Principal Amount April 1, 2016 $ 495,000 April 1, 2017 520,000 Term Bonds due April 1, 2021 Date Principal Amount April 1, 2018 $ 550,000 April 1, 2019 585,000 April 1, 2020 615,000 April 1, 2021 650,000 Term Bonds due April 1, 2027 Date Principal Amount April 1, 2022 $ 305,000 April 1, 2023 320,000 April 1, 2024 340,000 April 1, 2025 355,000 April 1, 2026 375,000 April 1, 2027 390,000 Term Bonds due April 1, 2031 Date Principal Amount April 1, 2028 $ 410,000 April 1, 2029 430,000 April 1, 2030 455,000 April 1, 2031 435,000 Limited General Obligation Refunding Note, Series 2015 Purpose - On April 7, 2015, the Board voted to redeem $19,075,000 of outstanding 2006 Limited General Obligation Bonds with a 7 year note from Regions Capital Advantage, Inc. The refunding ultimately saved the Board $1.2 million over the 7 year remaining life of the bonds. 288 Indian River County, Florida Board of County Commissioners Notes To Financial Statements Year Ended September 30, 2015 NOTE 10-LONG-TERM LIABILITIES - Continued A. Governmental Long-Term Debt- Continued Limited General Obligation Refunding Note, Series 2015 - Continued The aggregate difference in debt service between the 2015 note ($28,959,008) and the 2006 bonds ($30,315,331) was $1,356,323. These amounts include the 7/1/2015 and 7/1/2016 principal and interest payments which were excluded in the refunding. The net economic gain was $636,694 and is amortized over the life (72 months) of the new debt. The unamortized balance of $588,058 is reflected as a deferred outflow of resources on the government-wide Statement of Net Position. This refinancing lowered the annual debt service by $150,000. Pledge of revenues — The principal and interest on the bonds are payable from the sole source of ad valorem taxes not exceeding 1/z mil and having a maturity not exceeding fifteen years, which are levied by the County upon the taxable real and personal property of the County. The total tax revenue received was $4,795,927 of which 100% is pledged for payment of this note and the 2006 bond. Total principal and interest paid on this note was $397,017 and represents 8% of total pledged revenue. Maturity and Interest Rate - Interest payments are made semiannually beginning July 1, 2015 through July 1, 2021. Annual principal payments begin July 1, 2015 and end July 1, 2021. The interest rate is fixed at 1.66%. The note may be paid early without a prepayment penalty. B. Proprietary Long-Term Debt Changes in Long-Term Liabilities Balance Balance October 1, September 30, 2014 Additions Deletions 2015 Accrued Compensated Absences $ 958,810 $ 835,167 $ 787,224 $ 1,006,753 Note Payable: Water& Sewer Refunding Note Series 2015 - 7,171,000 - 7,171,000 Bonds Payable: Water& Sewer Revenue Refunding Series 2005 15,875,000 - 15,875,000 - Water& Sewer Revenue Refunding Series 2009 21,340,000 - 1,815,000 19,525,000 Total. Bonds Payable 37,215,000 - 17,690,000 19,525,000 Grand Total $ 38,173,810 $ 8,006,167 $ 18,477,224 $ 27,702,753 289 Indian River County, Florida Board of County Commissioners Notes To Financial Statements Year Ended September 30, 2015 NOTE 10 -LONG-TERM LIABILITIES - Continued B. Proprietary Funds Long-Term Debt- Continued Annual Debt Service Payments The annual debt service payments for bonds and notes outstanding at September 30, 2015 are as follows: Fiscal Year Water and Sewer Water and Sewer Ending Revenue Refunding Revenue Refunding September 30 Note Series 2015 Bonds Series 2009 Principal Interest Principal Interest 2016 $ 973,000 $ 119,636 $ 1,905,000 $ 976,250 2017 992,000 102,267 2,000,000 881,000 2018. 1,007,000 85,899 2,100,000 781,000 2019 1,025,000 69,284 2,205,000 676,000 2020 1,042,000 52,371 2,315,000 565,750 2021-2022 2,132,000 52,899 9,000,000 1,046,500 Total 7,171,000 482,356 19,525,000 4,926,500 Less: Current portion 973,000 - 1,905,000 - Add: Unamortized bond premium - - 1,556,234 - Total $ 6,1.98,000 $ 482,356 $ 1.9,176,234 $ 4,926,500 Water and Sewer Revenue Refunding Note, Series 2015 Purpose - On August 1.8, 2015, the Board voted to early call all of the outstanding Water and Sewer Revenue Refunding 2005 Bonds. The Board paid down 50% of the debt ($7,100,000) with cash and refinanced the remaining 50% ($7,105,000) with a 7 year note. The total amount borrowed included the cost of issuance and accrued interest totaling $66,000, for a grand total of$7,171,000. The aggregate difference in debt service between the Series 2005 bonds ($18,866,875) and the Series 2015 note ($7,653,356), cash contribution and September 1, 2016 principal and interest payment ($9,162,642) is $2,050,877. The net economic gain was $583,991; which included the refinancing, accrued interest, and cash contribution. This lowered the annual debt service by $1.2 million. The net economic gain is amortized over the 7 year life of the note. The unamortized balance of the deferred amount on the refunding at September 30, 2015. is $577,038 and is reflected as a deferred outflow of resources on the Statement of Net Position. 290 Indian River County, Florida Board of County Commissioners Notes To Financial Statements Year Ended September 30, 2015 NOTE 10 -LONG-TERM LIABILITIES - Continued B. Proprietary Funds Long-Term Debt- Continued Water and Sewer Revenue Refunding Note, Series 2015 - Continued Pledge of'Revenues—The note is collateralized, for the remaining term of the note, by a pledge of all net revenues derived from the operation of the system, certain surcharges, and special assessments. Annual principal and interest payments of $2,430,867 included principal and interest on the 2005 Water and Sewer Bonds and interest only on the 2015. note. This amount represents approximately seventeen percent of net revenues of$14,016,407 of the utility system. The total principal and interest remaining to be paid on the 2015 note is $7,653,356. Refer to Schedule 1.4 in the statistical section for further detail. Rate Covenant — Net revenues shall be sufficient to pay 100% of reserve and 120% of current year principal and interest requirements. Maturity and Interest Rate - Interest payments are made semiannually beginning September 1, 2016 through September 1, 2022. Annual principal payments begin September 1, 2016 and end September 1, 2022. The interest rate is fixed at 1.65%. Note may be paid early without any prepayment penalty. 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 $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, 2015 is $809,653 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$2,882,000 represent approximately twenty percent of net revenues of$14,243,879 of the utility system. The total principal and interest remaining to be paid on the bonds is $24,451,500. Rate Covenant — Net revenues shall be sufficient to pay 1.00% of reserve and 1.20% of current year principal and interest requirements. 291 Indian River County, Florida Board of County Commissioners Notes To Financial Statements Year Ended September 30, 2015 NOTE 10 -LONG-TERM LIABILITIES - Continued B. Proprietary Funds Long Term Debt—Continued Water and Sewer Revenue Refunding Bonds, Series 2009 - Continued Bonds Issued- At September 30, 2015, the revenue bonds consisted of the following: Outstanding at Interest Rates September 30, Description and Date Maturity Issue 2015 Water and Sewer 4-5% Revenue Bonds, 3/1 and 9/1 2024 $ 26,370,000 $ 19,525,000 Series 2009 Outstanding In-Substance Defeased Debt - The proceeds from the refunding were invested in Federal 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. 292 Indian River County, Florida Board of County Commissioners Notes To Financial Statements Year Ended September 30, 2015 NOTE 11 -PROVISION FOR CLOSURE COSTS Current regulations of the U.S. Environmental Protection Agency (EPA) and the Florida Department of Environmental Protection (FDEP) require the Solid Waste Disposal District (SWDD) to place a final cover on closed landfill areas, and to maintain those areas for up to thirty years after closure. The SWDD annually obtains updated and revised estimates of total future closure and post-closure costs from its consulting engineers. The SWDD recognizes the expenses associated with the final closure and post-closure maintenance of the landfill areas over the active life of those areas. The provision for closure costs reported in the financial statements as operating expense represents the portion of these estimated future outlays which are allocable to the current year based on the amount of capacity used. The total unrecognized closure and post-closure costs are approximately $2.8 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, II and III 68% 2026 $ 7,701,947 Construction and Demolition 90% 2027 1,174,866 Post-closure Costs Class I- Segments I and II N/A N/A 2,938,435 Construction and Demolition N/A N/A 194,488 Total account balance at 9/30/15 $ 12,009,736 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 F:DEP 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 costs account to provide for the financing of future closure-related expenses. At September 30, 2015, $11,984,722 was on deposit at the Florida Local Government Investment Trust and $25,014 was on deposit in the Board's Operating account. A summary of changes in the landfill closure liability account is as follows: Balance Balance 10/1/2014 Deposits Withdrawals 09/30/15 Closure and long-term care costs $ 1.1,509,736 $ 500,000 $ - $ 12,009,736 Of the $12,009,736 liability for closure and long-term care costs, management estimates that $4,630,451 will be due and payable within one year. 293 Indian River County, Florida Board of County Commissioners Notes To Financial Statements Year Ended September 30, 2015 NOTE 12—POLLUTION REMEDIATION In accordance with GASB Statement 49, Accounting and Financial Reporting for Pollution Remediation Obligations, a consultant evaluated two 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 two sites requiring the Board(using the consultant's services) to attempt to accrue a liability for pollution remediation. The liability totaled $2,551,200 at September 30, 2015 for the two sites. The pollution remediation obligation is an estimate and subject to changes resulting from price increases and reductions, technology, and changes in applicable laws or regulations. There are no estimated recoveries that would reduce the liability. Governmental Funds: 1. South Gifford Road closed landfill — The nature of the pollution remediation obligation is chlorinated solvent contamination. The consultant will conduct monitoring, bioremediation and reporting with the Florida Department of Environmental Protection (FDEP). The amount of the estimated year end liability is $2,530,000 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 $21,200 and will be paid from the General Fund. Total governmental funds liability: X551,200 294 Indian River County, Florida Board of County Commissioners Notes To Financial Statements Year Ended September 30, 2015 NOTE 13 -RETIREMENT PLAN - Florida Retirement System (FRS) General Information: All of the Board's employees participate in the Florida Retirement System (FRS). As provided by Chapters 121 and 112, Florida Statutes, the FRS provides two cost sharing, multiple employer defined benefit plans administered by the Florida Department of Management Services, Division of :Retirement, including the FRS Pension Plan ("Pension Plan") and the Retiree Health Insurance Subsidy ("HIS Plan"). Under Section 121.4501, Florida Statutes, the FRS also provides a defined contribution plan ("Investment Plan") alternative to the FRS Pension Plan, which is administered by the State Board of Administration ("SBA"). As a general rule, membership in the FRS is compulsory for all employees working in a county, state university, community college, or a participating city or special district within the State of Florida. The FRS provides retirement and disability benefits, annual cost-of-living adjustments, and death benefits to plan members and beneficiaries. Benefits are established by Chapter 121, Florida Statutes, and Chapter 60S, Florida Administrative Code. Amendments to the law can be made only by an act of the Florida State Legislature. The State of Florida annually issues a publicly available financial report that includes financial statements and required supplementary information for the FRS. The latest available report may be obtained by writing to the State of Florida Division of Retirement, Department of Management Services, P.O. Box 9000, Tallahassee, Florida 32315-9000, or from the web site: www.dms.myflorida.com/workforce_operations/retirement/publications. Pension Plan Plan Description: The Pension Plan is a cost-sharing multiple-employer defined benefit pension plan, with a Deferred Retirement Option Program("DROP") for eligible employees. Benefits Provided: Benefits under the Pension Plan are computed on the basis of age, average final compensation, and service credit. Regular Class members who retire at or after age 62 with at least six years of credited service or 30 years of service regardless of age are entitled to a retirement benefit payable monthly for life. The benefit is equal to 1.6% of their final average compensation based on the five highest years of salary, for each year of credited service. Vested members with less than 30 years of service may retire before age 62 and receive reduced retirement benefits. Special Risk Administrative Support class members who retire at or after age 55 with at least six years of credited service or 25 years of service regardless of age are entitled to a retirement benefit payable monthly for life. This benefit is equal to 1.6% of their final average compensation based on the five highest years of salary, for each year of credited service. Special Risk class members (sworn law enforcement officers, firefighters, and correctional officers) who retire at or after age 55 with at least six years of credited service, or with 25 years of service regardless of age, are entitled to a retirement benefit payable monthly for life equal to 3.0% of their final average compensation based on the five highest years of salary for each year of credited service. 295 Indian River County, Florida Board of County Commissioners Notes To Financial Statements Year Ended September 30, 2015 NOTE 13 -RETIREMENT PLAN - Florida Retirement System (FRS) - Continued Pension Plan - Continued Benefits Provided, Continued: Senior Management Service class members who retire at or after age 62 with at least six years of credited service or 30 years of service regardless of age are entitled to a retirement benefit payable monthly for life, equal to 2.0% of their final average compensation based on the five highest years of salary for each year of credited service. Elected Officers' class members who retire at or after age 62 with at least six years of credited service or 30 years of service regardless of age are entitled to a retirement benefit payable monthly for life, equal to 3.0% (3.33% for judges and justices) of their final average compensation based on the five highest years of salary for each year of credited service. For Plan members enrolled on or after July 1, 2011,. the vesting requirement is extended to eight years of credited service for all these members and increasing normal retirement to age 65 or 33 years of service regardless of age for Regular, Senior Management Service, and Elected Officers' class members, and to age 60 or 30 years of service regardless of age for Special Risk and Special Risk Administrative Support class members. Also, the final average compensation for all these members will be based on the eight highest years of salary. As provided in Section 121.101, Florida Statutes, if the member is initially enrolled in the Pension Plan before July 1, 2011 and all service credit was accrued before July 1, 2011, the annual cost-of-living adjustment is three percent per year. If the member is initially enrolled before July 1, 2011 and has service credit on or after July 1, 2011, there is an individually calculated cost-of-living adjustment. The annual cost-of-living adjustment is proportion of three percent determined by dividing the sum of the pre-July 2011 service credit by the total service credit at retirement multiplied by three percent. Plan members initially enrolled on or after July 1, 2011, will not have a cost-of-living adjustment after retirement. In addition to the above benefits, the DROP program allows eligible members to defer receipt of monthly retirement benefit payments while continuing employment with a FRS employer for a period not to exceed 60 months after electing to participate. Deferred monthly benefits are held in the FRS Trust Fund and accrue interest. There are no required contributions by DROP participants. Contributions: The State of Florida establishes contribution rates for participating employers and employees in section 121.71 Florida Statutes. 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, 2015 were: regular class 7.26%, special risk 22.04%, special risk administrative support 32.95%, senior management 21.43%, DROP 12.88%, and elected official class 42.27%. Included in these rates is a health insurance subsidy of 1.66%. Employer contributions to the FRS are based on a percentage of covered payroll that has been actuarially determined as an amount, when combined with the 3% employee contributions, is expected to finance the cost of benefits earned by employers during the year with an additional amount to finance any unfunded accrued liability. 296 Indian River County, Florida Board of County Commissioners Notes To Financial Statements Year Ended September 30, 2015 NOTE 13 -RETIREMENT PLAN - Florida Retirement System (FRS) - Continued Pension Plan - Continued The Board's actuarial contribution to FRS under the Pension Plan for the year ended September 30, 2015, was $3,878,848. Employee contributions for September 30, 2015 were $839,897. Both employer and employee contributions were equal to 100% of the required contribution for each year. Pension Liabilities, Pension Expense, and Deferred Outflow of Resources and Deferred Inflow of Resources Related to Pension Plan: At September 30, 2015, the Division of Retirement calculated the Board's liability of$20,147,953 for the FRS plan for its proportionate share of the net pension liability. The net pension liability was measured as of June 30, 2015, and the total pension liability used to calculate the net pension liability was determined by an actuarial valuation as of July 1, 2015. The Board's proportion of the net pension liability was based on a projection of the Board's long-term share of contributions to the pension plan relative to the projected contributions of all participating employers, actuarially determined. At June 30, 2015, the Board's proportion share was .155988% for the FRS pension plan. This was an increase of .000663% from its proportionate share measured as of June 30, 2014. For the year ended September 30, 2015,. the Board's calculated total reduction of actuarially determined pension expense of was $1,746,865. Of this amount, the Board recognized $215,336 in the enterprise funds and $28,657 in the internal service funds. In addition, the Board's calculated deferred outflows of resources and deferred inflows of resources related to pensions from the following sources were: Deferred Outflows Deferred Inflows Description of Resources of Resources Differences between expected and actual experience $ 2,127,027 $ 477,848 Changes in assumptions 1,337,287 - Net difference between projected and actual earnings on pension plan investments - 4,810,994 Changes in proportion and differences between Board contributions and proportionate share of contributions - 1,639,778 Board contributions subsequent to the measure- ment date 1,069,045 - Total $ 4,533,359 $ 6,928,620 Deferred outflows related to pensions recognized by enterprise funds were $711,023 and $94,626 for internal service funds. Deferred inflows related to pensions recognized by the enterprise funds were $881,674 and $117,334 for the internal service funds. 297 Indian River County, Florida Board of County Commissioners Notes To Financial Statements Year Ended September 30, 2015 NOTE 13 -RETIREMENT PLAN - Florida Retirement System (FRS) - Continued Pension Plan - Continued The deferred outflows of resources related to pensions totaling $1,069,045 resulting from Board contributions subsequent to the measurement date, will be recognized as a reduction of the net pension liability in the year ended September 30, 2016. Other amounts reported as deferred outflows of resources and deferred inflows of resources related to pensions will be recognized in pension expense as follows: Amount Fiscal Year Ending September 30: Recognized 2016 $ (3,013,946) 2017 (3,013,946) 2018 (3,013,946) 2019 4,503,598 2020 866,076 Thereafter 207,858 Total $ (3,464,306) Actuarial Assumptions: The total pension liability in the July 1, 2015 actuarial valuation was determined using the following actuarial assumption, applied to all periods included in the measurement: Valuation date: July 1, 2015 Measurement date: June 30, 2015 Discount rate: 7.65% Long-term expected rate of return: 7.65%, net of pension plan investment expense, including inflation Inflation: 2.60% Salary increase; 3.25%, including inflation Mortality Generational RP-2000 with Projections Scale BB Actuarial cost method Individual Entry Age Normal The actuarial assumptions that determined the total pension liability used in the July 1, 2015 valuation were based on the results of an actuarial experience study for the period July 1, 2008 through June 30, 2013. The actuarial assumptions for demographic and economic assumptions are identical to those used in the previous valuation and are the same assumptions in the FRS actuarial study for funding purposes. These changes were approved by the 2014 and 2015 FRS Actuarial Assumptions Conferences. The changes are explained as follows: • The discount rate and long-term expected rate of return, net of investment expense were both reduced since the prior actuarial valuation by 0.10 percent from 7.75 percent to 7.65 percent to increase the likelihood that FRS will meet or exceed its assumed investment return in future years. 298 Indian River County, Florida Board of County Commissioners Notes To Financial Statements Year Ended September 30, 2015 NOTE 13 -RETIREMENT PLAN - Florida Retirement System (FRS) - Continued Pension Plan - Continued • The assumed inflation rate was decreased from 3.00 percent in the July 1, 2013 valuation to 2.60 percent in the July 1, 2014 valuation in order to bring the rate in line with the combined Social Security intermediate long-term and lower near-term assumptions. • The salary increase assumption, including inflation was decreased by 0.75 percent from 4.00 percent to 3.25 percent. The decrease was due to two factors, a decrease in inflation as previously explained and a decrease in real wage growth. The decrease in real wage growth was made to better align with the trailing 1.0-year growth in payroll as well as to be in a reasonable range based on observed national data and the Social Security Administration's forward-looking assumption sets. • The mortality assumption was changed to incorporate Projection Scale BB in the July 1, 2014 actuarial valuation, in place of the Projection Scale AA previously used. The use of Scale BB allowed FRS to use a standard Society of Actuaries mortality table for each membership class/gender group without additional adjustment. Long-Term, Expected Rate of Return: The long-term expected rate of return on pension plan investments are not based on historical returns, but instead are based on a forward-looking capital market economic model. The allocation policy's description of each class was used to map the target allocation to the asset classes shown below. Each asset class assumption is based upon a consistent set of underlying assumptions and includes an adjustment for the inflation assumption. The target allocation and best estimates of arithmetic and geometric real rates of return for each major asset class are summarized in the following table: Compound Annual Annual Target Arithmetic (Geometric) Standard Asset Class Allocation. Return Return Deviation Cash 1% 3.2% 3.1% 1.7% Fixed Income 18% 4.8% 4.7% 4.7% Global Equity 53% 8.5% 7.2% 17.7% Real Estate(Property) 1.0% 6.8% 6.2% 12.0% Private Equity 6% 11.9% 8.2% 30.0% Strategic Investments 12% 6.7% 6.1% 11.4% Total 100% Assumed inflation-mean 2.6% 1.9% 299 Indian River County, Florida Board of County Commissioners Notes To Financial Statements Year Ended September 30, 2015 NOTE 13 -RETIREMENT PLAN - Florida Retirement System (FRS) - Continued Pension Plan - Continued Discount rate,for Pension Plan: The discount rate used to measure the total pension liability was 7.65%. The projection of cash flows used to determine the discount rate assumed that plan member contributions will be made at the current contribution rate and that the Board's contributions will be made at statutorily required rates, actuarially determined. Based on those assumptions, the pension. plans' fiduciary net position was projected to be available to make all projected future benefit payments of current active and inactive employees. Therefore, the discount rate for calculation of the total pension liability is equal to the long-term expected rate of return. Sensitivity of the Board's Proportionate Share of the Net Position Liability to Changes in the Discount Rate for the Pension Plan: The following presents the Board's proportionate share of the NPL (net pension liability) of the pension plan calculated using the discount rate of 7.65%. Also presented is what the Board's proportionate share of the FRS plan NPL would be if it were calculated using a discount rate that is I% lower or I% higher than the current rate: 1% Current Discount 1% Decrease(6.65%) Rate (7.65%) Increase(8.65%) Board's proportionate share of NPL $52,207,902 $20,147,953 $(6,531,191) Pension Plan Fiduciary Net Position: Detailed information regarding the Pension Plan's fiduciary net position is available in the separately issued FRS Pension Plan and Other State-Administered Systems Comprehensive Annual Financial Report. This report is available by writing to the State of Florida, Division of Retirement, Department of Management Services, P.O. Box 9000, Tallahassee, Florida 32315-9000 or by email at rep@dms.myflorida.com, or by telephone toll free at (844) 377-1888) or (850) 907-6500. This report identifies statements that were prepared in accordance with generally accepted accounting principles, the measurement focus and basis of accounting, various investment valuations, various pension plan benefits, assumptions used, and many other details. 300 Indian River County, Florida Board of County Commissioners Notes To Financial Statements Year Ended September 30, 2015 NOTE 13 -RETIREMENT PLAN - Florida Retirement System (FRS) - Continued Retiree Health Insurance Subsidy (HIS) Program Plan Description: The HIS Program is a cost-sharing, multiple-employer, defined benefit pension plan established to provide a monthly subsidy payment to retired members of any state-administered retirement system. It was established under Section 112.363, Florida Statutes. Benefits are not guaranteed and are subject to annual legislative appropriation. In the event legislative appropriation or available funds fail to provide full subsidy benefits to all participants, benefits may be reduced or canceled. HIS is administered by the Florida Department of Management Services, Division of Retirement. Benefits Provided: For fiscal year ended September 30, 2015, eligible retirees and beneficiaries received a monthly HIS payment of$5 for each year of creditable service completed. The payments are at least $30 but not more than $150 per month. To be eligible to receive a HIS benefit, a retiree under a state-administered retirement system must provide proof of health insurance coverage, which may include Medicare. Contributions: The HIS Program is funded by required contributions from FRS participating employers as set by the Florida legislature. Employer contributions are a percentage of gross compensation for all active FRS members. For the fiscal year ended September 30, 2015, the HIS contribution rate was 1.26% for October 1, 2014 through June 30, 2015 and 1.66% for July 1, 2015 through September 30, 2015. There are no employee contributions required. The Board contributed 100% of its statutorily required contributions for the current and preceding three years. HIS contributions are deposited in a separate trust fund from which payments are authorized. The Board's actuarial contributions to the HIS Program totaled $ 511,413 for the fiscal year ended September 30, 2015. Pension Liabilities, Pension Expense, and Deferred Outflow of'Resources and Deferred Inflow of Resources Related to HIS Program: At September 30, 2015, the Division of Retirement calculated the Board's liability of$12,447,858 for its proportionate share of the HIS Program's net pension liability. The net pension liability was measured as of June 30, 2015, and the total pension liability used to calculate the net pension liability was determined by an actuarial valuation as of July 1, 2015. The Board's proportion of the net pension liability was based on based on the Board's 2014-2015 contributions relative to the 2013-2014 fiscal year contributions of all participating members. At September 30, 2015, the Board's proportion share was .122057% for the HIS Program. This was an increase of 0.001% from its proportionate share measured as of June 30, 2014. 301 Indian River County, Florida Board of County Commissioners Notes To Financial Statements Year Ended September 30, 2015 NOTE 13 -RETIREMENT PLAN - Florida Retirement System (FRS) - Continued Retiree Health Insurance Subsidy (HIS) Program -Continued For the year ended September 30, 2015, the Board's calculated total actuarially determined pension expense of was $553,332. Of this amount, the Board recognized $68,209 in the enterprise funds and $9,076 in the internal service funds. In addition, the Board's calculated deferred outflows of resources and deferred inflows of resources related to pensions from the following sources were: Deferred Outflows Deferred Inflows Description of Resources of Resources Changes in assumptions $ 979,322 $Net difference between projected and actual earnings on pension plan investments 6,738 - Changes in proportion and differences between Board contributions and proportionate share of contributions 81,273 223,760 Board contributions subsequent to the measure- ment date 167,304 - Total $ 1,234,637 $ 223,760 The deferred outflows of resources related to HIS totaling $167,304 resulting from Board contributions subsequent to the measurement date, will be recognized as a reduction of the net pension liability in the year ended September 30, 2016. Other amounts reported as deferred outflows of resources and deferred inflows of resources related to HIS Program will be recognized in pension expense as follows: Amount Fiscal Year Ending September 30: Recognized 2016 $ 145,938 2017 145,938 2018 145,938 2019 144,673 2020 144,166 Thereafter 116,920 Total $ 843,573 302 Indian River County, Florida Board of County Commissioners Notes To Financial Statements Year Ended September 30, 2015 NOTE 13 -RETIREMENT PLAN - Florida Retirement System (FRS) - Continued Retiree Health Insurance Subsidy (HIS) Program -Continued Actuarial Assumptions: The total pension liability for the HIS Program in the July 1, 2015 actuarial valuation was determined using the following actuarial assumption, applied to all periods included in the measurement: Valuation date: July 1, 2015 Measurement date: June 30, 2015 Discount rate: 3.80% Long-term expected rate of return: N/A Municipal bond rate: 3.80% Inflation: 2.60% Salary increase; 3.25%, average, including inflation Mortality Generational RP-2000 with Projections Scale BB Actuarial cost method Individual Entry Age Normal The actuarial assumptions that determined the total HIS pension liability used in the July 1, 2015 valuation were based on the results of an actuarial experience study for the period July 1, 2008 through June 30, 2013. Discount rate for HIS Program: In general, the discount rate for calculating the total pension liability is equal to the single rate equivalent to discounting at the long-term expected rate of return for benefit payments prior to the projected depletion date. Because the HIS Program is essentially funded on a pay- as-you-go basis, the depletion date is considered to be immediate. The single equivalent discount rate is equal to the municipal bond rate selected by the plan sponsor. The Bond Buyer General Obligation 20- Bond Municipal Bond Index was adopted as the applicable municipal bond index. Long-Term, Expected Rate of Return: As stated above, the HIS program is essentially funded on a pay- as-you-go basis. As such, there is no assumption for a long-term expected rate of return on a portfolio, no assumptions for cash flows into and out of the pension plan, or assumed asset allocation. Sensitivity of the Board's Proportionate Share of the Net Position Liability to Changes in the Discount Rate for the HIS Program: The following presents the Board's proportionate share of the NPL (net pension liability) of the HIS Program calculated using the discount rate of 3.80%. Also presented is what the Board's proportionate share of the HIS Program NPL would be if it were calculated using a discount rate that is I% lower or I% higher than the current rate: 303 Indian River County, Florida Board of County Commissioners Notes To Financial Statements Year Ended September 30, 2015 NOTE 13 -RETIREMENT PLAN - Florida Retirement System (FRS) - Continued Retiree Health Insurance Subsidy (HIS) Program -Continued 1% Current Discount 1% Decrease (2.80%) Rate 3.80%) Increase 4.80%) Board's proportionate share of NPL: $ 14,183,755 $12,447,858 $ 11,000,381 HIS Plan Fiduciary Net Position: Detailed information regarding the HIS Program's fiduciary net position is available in the separately issued FRS Pension Plan and Other State-Administered Systems Comprehensive Annual Financial Report. This report is available by writing to the State of Florida, Division of Retirement, Department of Management Services, P.O. Box 9000, Tallahassee, Florida 32315-9000 or by email at rep@dms.myflorida.com, or by telephone toll free at (844) 377-1888) or (850) 907-6500. Investment Plan Plan Description: The Board contributes to the Investment Plan, a defined contribution pension plan, for its eligible employees electing to participate in the Investment Plan. The Investment Plan is administered by the State Board of Administration (SBA), and is reported in the SBA's annual financial statements and in the State of Florida Comprehensive Annual Financial Report. As provided in Section 121.4501, Florida Statutes, eligible FRS members may elect to participate in the Investment Plan in lieu of the FRS defined benefit plan. Board employees already participating in DROP are not eligible to participate in this program. Benefits Provided: Service retirement benefits are based upon the value of the member's account upon retirement. Employers and employee contributions, including amounts contributed to individual member's accounts, are defined by law, but the ultimate benefit depends in part on the performance of investment funds. Benefit terms, including contribution requirements, for the Investment Plan are established and may be amended by the Florida Legislature. 304 Indian River County, Florida Board of County Commissioners Notes To Financial Statements Year Ended September 30, 2015 NOTE 13 -RETIREMENT PLAN - Florida Retirement System (FRS) - Continued Investment Plan - Continued Benefits Provided, Continued: For all membership classes, employees are immediately vested in their own contributions and are vested after one year of service for employer contributions and investment earnings. Non-vested employer contributions are placed in a suspense account for up to five years. If the employee returns to FRS-covered employment within the five year period, the employee will regain control over their account. If the employee does not return within the five-year period, the employee will forfeit the accumulated account balance. For fiscal year ended September 30, 2015, the information for the amount of forfeitures was unavailable from the SBA; however, management believes that these amounts, if any, would be immaterial to the Board. If an accumulated benefit obligation for service credit originally earned under the Pension Plan is transferred to the Investment Plan, the member must have the years of service required for Pension Plan vesting (including the service credit represented by the transferred funds) to be vested for these funds and the earnings on the funds. After termination and applying to receive benefits, the member may rollover vested funds to another qualified plan, structure a periodic payment under the Investment Plan, receive a lump-sum distribution, leave the funds invested for future distribution, or any combination of these options. Disability coverage is provided; the member may either transfer the account balance to the FRS Pension Plan when approved for disability retirement to receive guaranteed lifetime month benefits under the FRS Pension Plan, or remain in the Investment Plan and rely upon that account balance for retirement income. Contributions: Cost of administering the Investment Plan, including the FRS Financial Guidance Program, are funded through an employer contribution of .04% of payroll and by forfeited benefits of Investment Plan members. The Investment Plan is funded with the same employer and employee contribution rates that are based on salary and membership class as the FRS defined benefit plan. Contributions are directed to individual member accounts, and the individual members allocate contributions and account balances amount various approved investment choices. Allocations to the investment member's accounts during the 2014-15 fiscal year were as follows: regular class 6.30%, special risk class 14.00%, senior management service class 7.67%, Board elected officers' class 11.34%. This includes the employee contribution of 3%. The Board's Investment Plan pension expense totaled $485,604 for fiscal year ended September 30, 2015. Employee contributions totaled$122,643 for the same period. 305 Indian River County, Florida Board of County Commissioners Notes To Financial Statements Year Ended September 30, 2015 NOTE 14—OTHER POSTEMPLOYMENT BENEFITS PLAN (OPEB) A. Plan Description On September 23, 2008, the Board of Board Commissioners approved resolution number 2008-163, establishing an irrevocable trust (OPER Trust) to separately identify assets accumulated to pay OPEB benefits for eligible retirees. The OPEB Trust includes the Board of Board 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 Board 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, 2014 range from $380 for single coverage Medicare participants to $715 for family coverage. Life insurance is available to retirees at a flat rate of$.20 per $1,000 of coverage (to a maximum of $20,000 until the age of 70). After 70, the maximum amount of life insurance is $1.0,000. 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 - 1.0/01/04 Less than 15 years No subsidy 60% subsidy 20% in addition to yrs of 01/01/04 - 10/01/04 15 or more years 2%/yr-max 40% service-max 60% subsidy 10/01/04 -01/31/09 Less than 15 years No subsidy 20% subsidy 20% in addition to yrs of 10/01/04 -01/31/09 15 or more years 2%/yr-max 40% service-max 60% subsidy 02/01/09 and after Less than 15 years No subsidy No subsidy 02/01/09 and after 15 or more years 2%/yr-max 40% No subsidy 306 Indian River County, Florida Board of County Commissioners Notes To Financial Statements Year Ended September 30, 2015 NOTE 14—OTHER POSTEMPLOYMENT BENEFITS PLAN (OPEB)—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 Board Comprehensive Annual Financial Report (CAFR). Questions regarding the OPEB plan may be directed to the Finance Director. At October 1, 2013, the date of the latest actuarial valuation,plan participation consisted of. Active participants 1,382 Retired participants 429 Total participants 1.81.1. There are two classes of participants at October 1, 2013: Regular and senior management 1,141 Special risk 670 Total participants 1,811 The average employer's contribution was $1,646 per employee, approximately 4.6% of current payroll. Financial statements for the OPEB Trust are included in this report and can be found on pages 260-261. 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 116. B. Funding Policy The Board of Board 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 Board. For the year ended September 30, 2015, the Board contributed $2.98 million to the qualifying OPEB Trust. Plan members receiving benefits contributed $1.94 million, or approximately 66 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. The contributions are paid by the fund(s) by which the participant is employed. 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 Board'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 Board's annual cost for the current and two preceding years, the amount actually contributed, and the changes in the net obligation. 307 Indian River County, Florida Board of County Commissioners Notes To Financial Statements Year Ended September 30, 2015 NOTE 14-OTHER POSTEMPLOYMENT BENEFITS PLAN (OPEB) - Continued C. Annual OPEB Cost and Net OPEB Obligation - Continued FY 2014/2015 FY 2013/2014 FY 2012/2013 - ---------------- ------------ --------- --------------- Annual Required Contribution 2,977,075 2,835,072 2,965,251 Interest on Net OPEB Obligation (47,722) (18,036) (20,909) Adjustment to Annual Required Contribution 72,52-1 -------24,230 -------26,830----------- Annual OPEB Cost(expense) 3,001,874 2,841,266 2,971,172 Contributions (net of adjustments)* (3,121,416) (3,336,027) (2,950,097) Change in Net OPEB Obligation (119,542) (494,761) 21,075 Net OPEB Obligation-beginning of year 367(795, ---------------- - 71 ...............Q_00,696) .............(321,681)......... Net OPEB Obligation-end of year $_ i�414,909) $ (795,367) (300,606) Percentage of Annual OPEB Cost Contributed 103.98% 117.41 % 99.29% *Retiree adjustments are comprised of the actual amount withdrawn from the Trust plus premiums collected and less claims paid. For fiscal year 2015, these adjustments amounted to $144,341. For fiscal years 2014 and 2013, these adjustments totaled ($90,852) and (15,154) respectfully. D. Funded Status and Funding Progress The Schedule of Funding Progress and Schedule of Employer Contributions, presented as required supplementary information immediately following the Board Notes to the Financial Statements (on page 116), 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 three actuarial valuations and seven 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. 308 Indian River County, Florida Board of County Commissioners Notes To Financial Statements Year Ended September 30, 2015 NOTE 14—OTHER POSTEMPLOYMENT BENEFITS PLAN (OPEB) - 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) 13 years Asset valuation method Market Value The actuarial assumptions are: Investment rate of return 6.0% (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 V2% each year& thereafter to the ultimate value of 5.28%) Inflation rate 3% NOTE 15 - 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 $654,176 and lease expenditures totaled $86,637 for the year ended September 30, 2015. 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 2016 $ 648,609 2017 629,720 2018 620,603 2019 640,496 2020 660,978 2021-2025 2,582,727 2026-2030 1,003,883 2031-2035 509,475 2036-2040 295,821 2041-2045 259,903 Total future minimum receipts: $ 7,852,215 The property being]eased is reported in the financial statements of Board and has a cost of$30,019,946, and a carrying value of$20,242,726. Current year depreciation on property being leased was $512,147. 309 Indian River County, Florida Board of County Commissioners Notes To Financial Statements Year Ended September 30, 2015 NOTE 15 - OPERATING LEASES -Continued B. Future Minimum Lease Payments The following is a schedule, by years, of minimum future rentals to be paid by the Board for various noncancelable operating leases as of September 30, 2015: Year Amount 2016 $ 96,858 2017 52,478 2018 43,745 2019 43,745 2020 1,500 2021-2025 7,500 2026-2030 7,500 2031-2035 7,500 2036-2040 5,100 2041-2045 4,500 2046-2050 3,600 2051-2055 3,000 2056-2060 1,500 2061-2065 1,500 2066-2070 1,500 2071-2075 1,500 2076 300 Total future minimum lease payments: $ 283,326 310 Indian River County, Florida Board of County Commissioners Notes To Financial Statements Year Ended September 30, 2015 NOTE 16 -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. Restricted—Use of these resources is based on the constraints imposed externally by creditors, grantors, contributors, or laws and regulations of other governments; or imposed by law through constitutional provisions or enabling legislation. Committed— Amounts whose use is constrained by the approval of a Board ordinance by the Board of Board Commissioners. This category also includes existing resources on hand to satisfy the obligations that arise from contractual obligations entered into by the Board of Board Commissioners. Assigned—The Board of Board Commissioners is the governing body authorized to assign fund balance amounts to be used for specific purposes. This assignment is done through the budget approval and amendment process. 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. B. Fund Balance Policy On September 21, 2010,. the Board approved a Fund Balance and Reserve Policy that set forth the following reserves of fund balance in the General, Transportation, and Emergency Services District Funds: Emergency/Disaster Relief Reserve—A balance of no less than 5% of budgeted operating expenditures for the current fiscal year will be reserved only for the purpose of responding to natural and man-made disasters. Disasters include hurricanes, tropical storms, floods, wildfires, or terrorist activities. These funds can only be used to respond and provide relief after such a disaster. Funds will be replenished over a five-year period after the completion of the recovery from the disaster. 311 Indian River County, Florida Board of County Commissioners Notes To Financial Statements Year Ended September 30, 2015 NOTE 16-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, 2015,reserve amounts for those funds were: Budget Disaster Relief Stabilization Total General Fund $ 5,450,000 $ 5,450,000 $ 10,900,000 Transportation Fund 800,000 800,000 1,600,000 Emergency Services District Fund 1,700,000 1,700,000 3,400,000 Total $ 7,950,000 $ 7,950,000 $ 15,900,000 The General Fund reserves are included in the unassigned fund balance on the balance sheet. The Transportation Fund reserves are included in the assigned fund balance and the Emergency Services District Fund reserves are included in the restricted fund balance on the balance sheet. The Emergency/Disaster Relief and Budget Stabilization Reserve amounts may only be revised by the Board of Board Commissioners. 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 Board 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 committed fund balance, as appropriate, then assigned and finally unassigned fund balances. 312 Indian River County, Florida Board of County Commissioners Notes To Financial Statements Year Ended September 30, 2015 NOTE 17 -FUND BALANCE DEFICIT The following funds had a deficit in fund balance at September 30, 2015: Fund Deficit Nonmaj or Governmental Funds: Metropolitan Planning Organization Fund 426,554 Community Development Block Grant NSP3 Grant Fund 5,725 Total Deficit 432,279 The deficits for these two funds will be eliminated by grant proceeds in fiscal year 2016. NOTE 18 -NET POSITION Restatement of Proprietary Funds Beginning Net Position The beginning net position at October 1, 2014 of the Board proprietary funds was decreased due to the adoption of the new GASB Statement No. 68 accounting standard (see Board Note IL for further explanation). This statement requires the Board to recognize its proportionate share of the net position liabilities and operating statement activities related to changes in the pension liabilities of cost-sharing multiple-employer FRS and HIS defined benefit plans. The proprietary funds beginning net position has been adjusted as follows: Original Beginning Net Restated Beginning Net Fund Position GASB 68 Adjustment Position Solid Waste Disposal District 47,107,276 $ (252,031) $ 46,855,245 Golf Course 6,319,564 (232,806) 6,086,758 Board Utilities 241,439,518 (3,408,493) 238,031,025 Board Building 5,214,373 (594,941) 4,619,432 Internal Service Funds 26,048,127 ----(597,305) 25,450,822 $ 326,128,858 (5,085,576)_ $ _321,043,282 313 Indian River County, Florida Board of County Commissioners Notes To Financial Statements Year Ended September 30, 2015 NOTE 19 -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: 05/0l/]] to 10/01/13 to 10/01/14 to 9/30/2013 9/30/2014 _________ 9/30/2015 Worker's Compensation $ 350,000 $ 500,000 $ 750,000 General Liability 200,000 200,000 200,000 Auto Liability 200,000 200,000 200,000 Property Damage 200,000 200,000 200,000 Error or Omissions 200,000 200,000 200,000 Annual Aggregate 2,000,000 2,000,000 2,000,000 Liquor Liability 1,000,000 1,000,000 1,000,000 The Board purchases excess insurance to cover claims in excess of the 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 three workers compensation reimbursements totaling $409,914 in fiscal year 2015. The Board received three workers compensation reimbursements totaling $125,21.3 in fiscal year 2014. and two in fiscal year 2013 totaling $108,123. 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 four medical claim reimbursements in excess of the $250,000 limit for fiscal year 2015 totaling $382,635. In fiscal year 2014 there were six totaling $335,641 and in fiscal year 2013 there were six totaling $285,689. 314 Indian River County, Florida Board of County Commissioners Notes To Financial Statements Year Ended September 30, 2015 NOTE 19 -RISK MANAGEMENT - Continued General Liability, Property, Worker's Compensation and Medical—Continued The claims liability of $8,177,520 reported at September 30, 2015, 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, $3,289,891 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 2011-2012 $ 7,877,000 $ 13,967,831 $ (13,770,831) $ 8,074,000 2012-2013 8,074,000 14,396,726 (14,396,726) 8,074,000 2013-2014 8,074,000 16,860,869 (16,708,324) 8,226,545 2014-2015 8,226,545 1.7,188,927 (17,237,952) 8,177,520 Included in the charges to other funds is an amount to fund future catastrophic losses not actuarially determined; and at September 30, 2015, unrestricted net position of$21,730,800 has been designated for this purpose. The Board has elected to accrue the larger of the discounted liability or undiscounted liability. At September 30, 2015, the undiscounted liability was the greater of the two amounts. The discount rate used in the calculation was 2.5 percent. NOTE 20- COMMITMENTS AND CONTINGENCIES A. Litigation Various suits and claims are currently pending against the Board. It is impossible for the Board to accurately quantify the exposure involved given the jury's latitude in assessing compensatory and punitive damages, and the court's latitude in awarding attorney's fees. The Board intends to vigorously defend against these lawsuits and believes it has a good chance of prevailing on their merits. The Board is contingently liable with respect to lawsuits and other claims incidental to the ordinary course of its operations. In the opinion of management and based on the advice of legal counsel, the ultimate disposition of lawsuits will not have a material adverse effect on the financial position of the Board. 315 Indian River County, Florida Board of County Commissioners Notes To Financial Statements Year Ended September 30, 2015 NOTE 20 - COMMITMENTS AND CONTINGENCIES - Continued B. Contracts and Other Commitments The Board has various contracts and commitments outstanding at September 30, 2015.. In the General Fund, contracts are for janitorial services, beach park landscape and custodial maintenance, legislative consulting services and external auditing services. In the Special Revenue Funds, contracts are for the Sector 3 Dune Repair-Post Sandy, 45th Street Canal Enclosure and Beautification project, Vero Lake Estates asphalt millings, 66th Avenue Roadway Improvements, Fire Rescue Station #13 construction, as well as a variety of other road paving and drainage projects. In the Capital Projects Fund, contracts are for the South Board Regional Park Intergenerational Recreation Facility, Aviation Blvd/20th Avenue intersection improvements, and several sidewalk and road improvement projects throughout the Board. In the Enterprise Funds, contracts are for the golf course maintenance, Blue Cypress :Lake Wastewater Treatment Facility, USI widening utility conflicts from Oslo Road to the Board line, and various other water and sewer projects. In the Internal Service Funds, contracts are for the Other Postemployment Benefits actuarial valuation services. A summary of these projects at September 30, 2015, is as follows: Remaining Total Total Paid as of Balance at Contract Price September 30, 2015 _September 30, 2015 General $ 853,281 $ (520,194) $ 333,087 Special Revenue 25,395,574 (16,931,258) 8,464,316 Capital Projects 26,413,615 (17,677,179) 8,736,436 Enterprise 5,490,098 (2,803,224) 2,686,874 Internal Service 11,000 - 11,000 Total $ 58,163,568 $ (37,931,855) $ 20,231,713 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. 316 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 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 May 25, 2016 The Honorable Board of County Commissioners Indian River County, Florida We have audited, in accordance with the auditing standards generally accepted in the United States of America and the standards applicable to financial statements contained in Government Auditing Standards issued by the Comptroller General of the United States, the fund financial statements of the major fund and the aggregate remaining fund information of the Indian River County, Florida Board of County Commissioners (the "Board"), as of and for the year ended September 30, 2015, which collectively comprise the Board's fund financial statements and have issued our report thereon dated May 25, 2016. Internal Control over Financial Reporting In planning and performing our audit of the financial statements, we considered the Board's internal control over financial reporting (internal control) to determine the audit procedures that are appropriate in the circumstances 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. Accordingly, we do not express an opinion on the effectiveness of the Board's internal control. 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 a combination of deficiencies, in internal control such that there is a reasonable possibility that a material misstatement of the entity's financial statements will not be prevented, or detected and corrected on a timely basis. A significant deficiency is a deficiency, or a combination of deficiencies, in internal control that is less severe than a material weakness, yet important enough to merit attention by those charged with governance. Our consideration of internal control 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 material weaknesses or significant deficiencies. Given these limitations, during our audit we did not identify any deficiencies in internal control that we consider to be material weaknesses. However, material weaknesses may exist that have not been identified. Rebmann is an independent member of Nexia International. CPAs&Consultants Wealth Advisors Corporate Investigators 317 The Honorable Board of County Commissioners Indian River County, Florida May 25, 2016 Page 2 Compliance and Other Matters As part of obtaining reasonable assurance about whether the Board's financial statements are free from 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. Purpose of this Report The purpose of this report is solely to describe the scope of our testing of internal control and compliance and the results of that testing, and not to provide an opinion on the effectiveness of the Board's internal control or on compliance. This report is an integral part of an audit performed in accordance with Government Auditing Standards in considering the entity's internal control and compliance. Accordingly, this communication is not suitable for any other purpose. 4LA441-1 Wo--� LLC 318 Re h m a n n Rebmann Robson 5070 North Highway AIA Suite 250 Vero Beach,FL 32963 Ph: 772.234.8484 MANAGEMENT LETTER Fx: 772.234.8488 rehmann.com May 25, 2016 The Honorable Board of County Commissioners Indian River County, Florida Report on the Financial Statements We have audited the financial statements of each major fund and the aggregate remaining fund information of the Indian River County, Florida Board of County Commissioners(the "Board"), as of and for the year ended September 30, 2015 and have issued our report thereon dated May 25, 2016. Auditor's Responsibility 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; OMB Circular A-133, Audits of States, Local Governments, and Non-Profit Organizations; and Chapter 10.550, Rules of the Auditor General. Other Reports and Schedule 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; Independent Auditor's Report on Compliance for Each Major Federal Program and State Project and Report on Internal Control over Compliance; Schedule of Findings and Questioned Costs; and Independent Accountants' Report on an examination conducted in accordance with AICPA Professional Standards, Section 601, regarding compliance requirements in accordance with Chapter 10.550, Rules of the Auditor General. Disclosures in those reports, which are dated May 25, 2016, should be considered in conjunction with this management letter. Prior Audit Findings 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. Official Title and Legal Authority Section 10.554(1)(i)4., 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. Other Matters Section 10.554(1)(i)2., Rules of the Auditor General, requires that we address in the management letter any recommendations to improve financial management. In connection with our audit, we did not have any such recommendations. Rebmann is an independent member of Nexia International. CPAs&Consultants Wealth Advisors Corporate Investigators M iI 11311 AT 3.N1S. 319 Section 10.554(1)(i)3., Rules of the Auditor General, requires that we address noncompliance with 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 which warrants the attention of those charged with governance. In connection with our audit, we did not have any such findings. Purpose of this Letter 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 granting agencies, and applicable management and is not intended to be and should not be used by anyone other than these specified parties. 4444t d-4� LLC 320 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 rehmann.com INDEPENDENT ACCOUNTANTS' REPORT May 25, 2016 The Honorable Board of County Commissioners Indian River County, Florida We have examined the compliance of Indian River County, Florida Board of County Commissioners (the "Board") with Sections 218.415, 365.172(10), and 365.173(2)(d) Florida Statutes, during the year ended September 30, 2015. Management is responsible for compliance with those requirements. Our responsibility is to express an opinion on the Board's compliance based on our examination. Our examination was conducted in accordance with attestation standards established by the American Institute of Certified Public Accountants and, accordingly, includes examining, on a test basis, evidence about the Board's compliance with those requirements and performing such other procedures as we considered necessary in the circumstances. We believe that our examination provides a reasonable basis for our opinion. Our examination does not provide a legal determination on the Board's compliance with specified requirements. In our opinion, the Board complied, in all material respects, with the aforementioned requirements for the year ended September 30, 2015. This report is intended solely for the information and use of management, the Board of County Commissioners and the Florida Auditor General and is not intended to be and should not be used by anyone other than these specified parties. 44441, d-4� L LC Rebmann is an independent member of Nexia International. CPAs&Consultants Wealth Advisors Corporate Investigators � I IT,R.N AT IO N1 321 322 CLERK OF THE CIRCUIT COURT AND COMPTROLLER 323 Re h m a n n Rebmann Robson 5070 North Highway A1A Suite 250 Vero Beach,FL 32963 Ph: 772.234.8484 Fx: 772.234.8488 rehmann.com INDEPENDENT AUDITORS' REPORT May 25, 2016 The Honorable Jeffrey R. Smith Clerk of the Circuit Court and Comptroller Indian River County, Florida Report on the Financial Statements We have audited the accompanying fund financial statements of each major fund and the aggregate remaining fund information of the Indian River County, Florida Clerk of Court (the "Clerk"), as of and for the year ended September 30, 2015, and the related notes to the financial statements, which collectively comprise the Clerk's fund financial statements as listed in the table of contents. Management's Responsibility for the Financial Statements Management is responsible for the preparation and fair presentation of these financial statements in accordance with accounting principles generally accepted in the United States of America; this includes the design, implementation, and maintenance of internal control relevant to the preparation and fair presentation of financial statements that are free from material misstatement, whether due to fraud or error. Independent Auditors' Responsibility Our responsibility is to express opinions on these financial statements based on our audit. We conducted our audit in accordance with auditing standards generally accepted in the United States of America and the standards applicable to financial audits contained in Government Auditing Standards, issued by the Comptroller General of the United States. Those standards require that we plan and perform the audit to obtain reasonable assurance about whether the financial statements are free of material misstatement. An audit involves performing procedures to obtain audit evidence about the amounts and disclosures in the financial statements. The procedures selected depend on the auditors' judgment, including the assessment of the risks of material misstatement of the financial statements, whether due to fraud or error. In making those risk assessments, the auditor considers internal control relevant to the entity's preparation and fair presentation of the financial statements in order to design audit procedures that are appropriate in the circumstances, but not for the purpose of expressing an opinion on the effectiveness of the entity's internal control. Accordingly, we express no such opinion. An audit also includes evaluating the appropriateness of accounting policies used and the reasonableness of significant accounting estimates made by management, as well as evaluating the overall presentation of the financial statements. We believe that the audit evidence we have obtained is sufficient and appropriate to provide a basis for our audit opinion. Rebmann is an independent member of Nexia International. CPAs&Consultants Wealth Advisors Corporate Investigators � iNTi'i;R.N AT3ON;1 S. 324 Opinion In our opinion, the financial statements referred to above present fairly, in all material respects, the financial position of the funds of the Clerk as of September 30, 2015, and the respective changes in financial position and the respective budgetary comparison for the general fund for the year then ended in accordance with accounting principles generally accepted in the United States of America. Reporting Entity As discussed in Note 1, the financial statements referred to above present only the Indian River County, Florida Clerk of Court and do not purport to, and do not, present fairly the financial position of Indian River County, Florida as of September 30, 2015, and the changes in its financial position for the year then ended, in conformity with accounting principles generally accepted in the United States of America. Other Reporting Required by Government Auditing Standards In accordance with Government Auditing Standards, we have also issued our report dated May 25, 2016, on our consideration of the Clerk'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 in considering the Clerk's internal control over financial reporting and compliance. LLC rL41r- 325 Indian River County,Florida Clerk of the Circuit Court and Comptroller Balance Sheet Governmental Funds September 30, 2015 Total Nonmajor Fund Governmental General Special Revenue Funds ASSETS Cash and cash equivalents $ 317,027 $ 2,058,211 $ 2,375,238 Accounts receivable 113,757 - 113,757 Prepaid items 42,369 29,027 71,396 Due from other governments 9,296 - 9,296 Due from other funds - 94,913 94,913 Total assets $ 482,449 $ 2,182,151 $ 2,664,600 LIABILITIES AND FUND BALANCES Liabilities: Accounts payable $ 8,825 $ - $ 8,825 Due to other funds 94,913 - 94,913 Due to other governments 62,507 - 62,507 Other deposits held in escrow 89,429 - 89,429 Unearned revenues 226,775 - 226,775 Total liabilities 482,449 - 482,449 Fund Balances: Nonspendable: Prepaid items 42,369 29,027 71,396 Restricted for: Court-related costs and improvements - 2,153,124 2,153,124 Unassigned (42,369) - (42,369) Total fund balances - 2,182,151 2,182,151 Total iabilities fund balances $ 482,449 $ 2,182,151 $ 2,664,600 The accompanying notes are an integral part of the financial statements. 326 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 30,2015 Total Nonmajor Fund Governmental General Special Revenue Funds REVENUES Intergovernmental $ 249,560 $ - $ 249,560 Charges for services 4,115,918 415,427 4,531,345 Judgments, fines and forfeits - 183,726 183,726 Interest 11,501 4,775 16,276 Total revenues 4,376,979 603,928 4,980,907 EXPENDITURES General government 1,771,402 461,278 2,232,680 Court related 3,619,300 - 3,619,300 Total expenditures 5,390,702 461,278 5,851,980 Excess of revenues over (under) expenditures (1,013,723) 142,650 (871,073) OTHER FINANCING SOURCES(USES) Transfers from Board of County Commissioners 1,023,499 - 1,023,499 Transfer to Board of County Commissioners (9,776) - (9,776) Total other financing sources (uses) 1,013,723 - 1,013,723 Net change in fund balances - 142,650 142,650 Fund balances at beginning of year - 2,039,501 2,039,501 Fund balances at end of year $ - $ 2,182,151 $ 2,182,151 The accompanying notes are an integral part of the financial statements. 327 Indian River County,Florida 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, 2015 Variance with Final Budget Budgeted Amount Positive Original Final Actual (Negative) REVENUES Intergovernmental $ 308,782 $ 249,562 $ 249,560 $ (2) Charges for services 3,967,000 4,051,793 4,115,918 64,125 Interest 16,627 16,627 11,501 (5,126) Total revenues 4,292,409 4,317,982 4,376,979 58,997 EXPENDITURES General government 1,729,338 1,800,217 1,771,402 28,815 Court related 3,563,948 3,627,387 3,619,300 8,087 Total expenditures 5,293,286 5,427,604 5,390,702 36,902 Excess of revenues over (under) expenditures (1,000,877) (1,109,622) (1,013,723) 95,899 OTHER FINANCING SOURCES(USES) Transfers in 54,253 54,253 - (54,253) Transfers from Board of County Commissioners 946,624 1,055,369 1,023,499 (31,870) Transfers to Board of County Commissioners - - (9,776) (9,776) Total other financing sources(uses) 1,000,877 1,109,622 1,013,723 (95,899) Net change in fund balances Fund balances at beginning of year - Fund balances at end of year $ - The accompanying notes are an integral part of the financial statements. 328 Indian River County, Florida Clerk of the Circuit Court and Comptroller Statement of Fiduciary Net Position Agency Fund September 30, 2015 ASSETS Cash and cash equivalents $ 4,253,01.7 Total assets $ 4,253,017 LIABILITIES Due to other governments $ 782,079 Escrow deposits 3,470,938 Total liabilities $ 4,253,01.7 The accompanying notes are an integral part of the financial statements, 329 Indian River County, Florida Clerk of the Circuit Court and Comptroller Notes To Financial Statements Year Ended September 30, 2015 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 primary government of Indian River County. Court-related expenditures are funded through filing fees, service charges, court costs and fines assessed to parties using the court system. Under 201.3-44, Laws of Florida, revenue collected by the Clerk is retained by the County and remitted to the Florida Department of Revenue based upon various formulas determined by Florida Clerks of Court Operations Corporation. Non-court expenditures are funded by the Board of County Commissioners for both the finance and recording (board meeting recordings) departments. Additional non-court revenues include various fees assessed for the recording of documents, passports, marriage licenses and court reporter services. Both court and non-court operations are reported in these financial statements. 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 (both court and non-court) 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. 330 Indian River County, Florida Clerk of the Circuit Court and Comptroller Notes To Financial Statements Year Ended September 30, 2015 NOTE 1 - SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES - Continued B. Basis of Accounting, Measurement Focus and Presentation The accounts of the governmental funds are maintained on the modified accrual basis. Under the modified accrual basis, expenditures are recorded at the time liabilities are incurred. Revenues are recorded when received in cash or when they are considered both measurable and available. The Clerk only considers revenue to be available if collected within the current fiscal year, except for Title IV-D grant revenue. This grant revenue is subject to accrual and has been recognized as revenue of the current fiscal period. Revenues collected in excess of expenditures are not considered earned and are reflected as liabilities. The fiduciary fund is accounted for on the accrual basis. C. Budgetary Requirements State statutes require the Clerk 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) by Tune 1 of each year (for consolidation to the Florida Legislative Budget Commission by August 1). 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, including funding from the Board, shall equal the total estimated expenditures. Management is authorized to transfer budgeted amounts between objects and departments in any fund as long as management does not exceed the total appropriations of a fund. D. Cash and Cash Equivalents Cash and cash equivalents include deposits and all highly liquid investments with maturities of ninety days or less when purchased. E. Prepaid 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. 331. Indian River County, Florida Clerk of the Circuit Court and Comptroller Notes To Financial Statements Year Ended September 30, 2015 NOTE 1 - SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES - Continued G. Compensated Absences The Clerk accrues a liability for employees' rights to receive compensation for future absences when certain conditions are met. The Clerk does not, nor is he legally required to, accumulate expendable available financial resources to liquidate this obligation. Accordingly, the liability for compensated absences is not reported in the Clerk's financial statements. Additional information on the liability is reflected in subsequent Note 6. H. Transfer In The non-court operations (finance function and board meeting recordings) were funded by the Board of County Commissioners in the amount of$1,023,499. 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 30, 2015, $9,776 was returned to the Board. This transfer is included in the amount Due to Other Governments on the balance sheet. J. Fund Balance GASB Statement 54 — Fund Balance Reporting and Governmental Funds Type Definitions was implemented as of October 1, 2009. The Statement requires the fund balance for governmental funds to be reported in classifications that comprise a hierarchy based primarily on the extent to which the government is bound to honor constraints on the specific purposes for which amounts in those funds can be spent. Categories for fund balance are as follows: nonspendable,restricted, committed, assigned, and unassigned. For more information, see the County-wide note on fund balance. 332 Indian River County, Florida Clerk of the Circuit Court and Comptroller Notes To Financial Statements Year Ended September 30, 2015 NOTE 2 - CASH AND CASH EQUIVALENTS A. Deposits At September 30, 2015, the carrying value of the Clerk's deposits was $2,252,176 and the bank balance was $3,060,451. 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, 2015 was $1,925. The Clerk's office follows the above state law (governing custodial credit risk) for cash deposits. Refer to the County-wide note on cash and cash equivalents for the definition of custodial credit risk. B. Investments As of September 30, 2015,the Clerk had the following investments: Weighted Average Portfolio Investment Type Fair Value Maturity(In Years) Percentage Bank United Public Funds Money Market $ 1,207,578 0.08 27.61% Florida Community Bank Public Funds Money Market $ 1,508,521 0.08 34.49 Harbor Community Bank Money Market $ 1,658,055 0.08 37.90 Total.Fair Value $ 4,374,1.54 100.00% Interest Rate Risk The Clerk adopted an investment policy on April 25, 2013 with the intent to match investment maturities with known cash needs and anticipated cash flow requirements. The policy was updated on April 24, 2014 to increase individual money market allocations from 35%to 40%. The policy included the following limits: • All final maturities are three years or less, • At least 50% of the portfolio shall be invested in readily available funds. Concentration Risk The following limits on portfolio compensation are outlined in the Clerk's investment policy: • No more than 10% or $1 Million of the total portfolio may be placed in certificates of deposit with a Qualified Public Depository with any one financial institution, • No more than 40% of the portfolio may be placed in any money market fund or intergovernmental investment pool. 333 Indian River County, Florida Clerk of the Circuit Court and Comptroller Notes To Financial Statements Year Ended September 30, 2015 NOTE 2 - CASH AND CASH EQUIVALENTS B. Investments - Continued Credit Risk Authorized investments are subject to the restrictions imposed by Section 218.145 of the Florida Statues and are limited to the following securities: • Florida Local Government Investment Trust Funds (FLGIT), • State of Florida.Local Government Surplus Funds Trust Funds, for existing fund only, • Interest-bearing time deposits or savings accounts in qualified public depositories (as defined in Section 280.02, FS), • Money market funds registered with the Securities and Exchange Commission (with the highest quality rating from a nationally recognized rating agency), • Derivatives are prohibited. 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 (DMS). Benefit provisions are established and may be amended by state statute. A financial report is available from the DMS website at www.dmsmyflorida.com or by mail at Florida Division of Retirement, PO Box 9000, Tallahassee, FL 32315-9000. 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, 2015 were: regular class 7.26%, senior class 21.43%, DROP class 12.88%, and elected official class 42.27%. Included in these rates is a health insurance subsidy of 1.66%. 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 Pension Plan 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 Pension Plan on or after July 1, 2011, normal retirement is age 65 with 8 years of service or 33 years of service, regardless of age. 334 Indian River County, Florida Clerk of the Circuit Court and Comptroller Notes To Financial Statements Year Ended September 30, 2015 NOTE 3—PENSION PLAN- Continued Florida Retirement System - Continued 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 parry administrator selected by the State Board of Administration. Benefits Provided: 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 the County-wide note on pension plans. Contributions: Employer contributions to the FRS are based on a percentage of covered payroll that has been actuarially determined as an amount, when combined with employee contributions, is expected to finance the cost of benefits earned by employees during the year with an additional amount to finance any unfunded accrued liability. For the year ended September 30, 2015, the Clerk's actuarial contribution to FRS under the Pension Plan was $291,821 and the HIS Program was $48,372 . Employee contributions for both plans were $98,162. Both employer and employee contributions were equal to 100% of the required contribution for each year. Pension Liabilities: At September 30, 2015, the Division of Retirement calculated the Clerk's liability of$1,558,237 for the FRS plan and $1,180,265 for the Health Insurance Subsidy (HIS) Program, for a total of$2,738,502 for its proportionate share of the net pension liability. The net pension liability was measured as of June 30, 2015 and the total pension liability used to calculate the net pension liability was determined by an actuarial valuation as of July 1, 2015. The Clerk's proportion of the net pension liability was based on a projection of the Clerk's long-term share of contributions to the pension plan relative to the projected contributions of all participating employers, actuarially determined. At September 30, 2015, the Clerk's proportion was .012064% for the FRS pension plan and .011573% for the HIS Program. Discount Rate for Pension Plan: The discount rate used to measure the total pension liability was 7.65%. The projection of cash flows used to determine the discount rate assumed that plan member contributions will be made at the current contribution rate and that the Clerk's contributions will be made statutorily required rates, actuarially determined. Based on those assumptions, the pension plans' fiduciary net position was projected to be available to make all projected future benefit payments of current active and inactive employees. Therefore, the long-term expected rate of return on pension plan investments was applied to all periods of projected benefit payments to determine the total pension liability. 335 Indian River County, Florida Clerk of the Circuit Court and Comptroller Notes To Financial Statements Year Ended September 30, 2015 NOTE 3—PENSION PLAN- Continued Florida Retirement System - Continued Sensitivity of the Clerk's Proportionate Share of the Net Position Liability to Changes in the Discount Rate for the Pension Plan: The following presents the Clerk's proportionate share of the NPL (net pension liability) of the pension plan calculated using the discount rate of 7.65%. Also presented is what the Clerk's proportionate share of the FRS plan NPL would be if it were calculated using a discount rate that is I% lower or I% higher than the current rate: Current Discount 1% Decrease (6.65%) Rate (7.65%) 1%Increase (8.65%) Clerk's proportionate share of NPL $ 4,037,745 $ 1,558,237 $ (505,1.21) Discount rate for the HIS Program: In general, the discount rate for calculating the pension liability is equal to the single rate equivalent to discounting at the long-term expected rate of return for benefit payments prior to the projected depletion date. Because the HIS :Program is essentially funded on a pay- as-you-go basis, the depletion date is considered to be immediate. The single equivalent discount rate is equal to the municipal bond rate selected by the plan sponsor. The Bond Buyer General Obligation 20- Bond Municipal Bond Index was adopted as the applicable municipal bond index. Sensitivity of the Clerk's Proportionate Share of the Net Position Liability to Changes in the Discount Rate for the HIS Program: The following presents the Clerk's proportionate share of the NPL (net pension liability) of the HIS Program calculated using the discount rate of 3.80%. Also presented is what the Clerk's proportionate share of the HIS Program NPL would be if it were calculated using a discount rate that is I% lower or I% higher than the current rate: Current Discount 1% Decrease (2.80%) _ Rate (3.80%) I%Increase 4.80% Clerk's proportionate share of NPL $ 1,344,857 $ 1,180,265 $ 1,043,020 Refer to the County-wide note for actuarial assumptions (including the investment rate of return), pension liability on financial statements, and an explanation of pension expense components. The pension liability is not reported in the financial statements of the Clerk since they are not payable from available spendable resources. It is reported in the financial statements of the County by the fund which normally pays the personnel service costs of the employee. 336 Indian River County, Florida Clerk of the Circuit Court and Comptroller Notes To Financial Statements Year Ended September 30, 2015 NOTE 4—OTHER POSTEMPLOYMENT BENEFITS The Clerk participated in the Indian River County Other Postemployment Benefits Trust (IRCOT). The Clerk's 2015 annual contribution of$147,431 was funded by the Board of County Commissioners in the amount of $23,044; non-court revenue in the amount of $122,741 (which included court-related State expenditures in the amount of $100,71.7) and the public modernization trust fund in the amount of $1,646. This contribution was considered part of a total contribution determined by the IRCOT actuary. Further information on the IRCOT can be found in the County-wide financial statements and in the County notes. NOTE 5—RISK MANAGEMENT Indian River County maintains a risk management program that provides for coverage of risks of loss related to torts, theft of, damage to and destruction of assets, errors or omissions, injuries to employees, natural disasters, and medical and life insurance coverage for employees and their eligible dependents. Various excess catastrophe insurance policies with a commercial carrier are also in force for claims exceeding the amount chargeable against the Self-insurance Fund. The Clerk participated in the County's self-insurance program during the fiscal year at an annual cost of approximately $648,078. Further details of this self-insurance program are discussed in the County-wide financial statements and County-wide note on risk management. NOTE 6—LONG-TERM LIABILITIES Changes in Long-Term Liabilities The following is a schedule of changes in long-term liabilities as of September 30, 2015: Beginning Ending Balance Balance 10/01/14 Additions Deletions 9/30/15 Accrued Compensated Absences $ 227,986 $ 285,099 $ 252,184 $260,901 Of the $260,901 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 employee. 337 h ��� �� �� �� n�m�ua��u 0 N 0 0 ��� 0 N N N 5070 North Highway A1A Suite 250 Vero Beach,FL32983 Ph: 772.234.8484 Fx: ,7zz3u.8488 zoumaoo.coou 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 GOVERVMENT AUDITING S7ANDAPDS May 25, 2O16 The Honorable Jeffrey R. Smith Clerk ofthe Circuit Court and Comptroller Indian River County, Florida We have audited, in accordance with the auditing standards generally accepted in the United States of America and the standards applicable to financial statements contained in Government Auditing Standards issued by the Comptroller General of the United States' the fund financial statements of the major fund and the aggregate remaining fund information of the IndimnF0ver County, Florida Clerk of Court (the "Clerk"), asofand for the year ended September 30, 2015' which collectively comprise the Clerk's fund financial statements and have issued our report thereon dated May 25' 2016. Internal Control over Financial Reporting In planning and performing our audit ofthe financial statements, we considered the Clerk's internal control over financial reporting (internal control) to determine the audit procedures that are appropriate in the circumstances 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 Clerk's internal control. Accordingly, we do not express an opinion on the effectiveness ofthe Clerk's internal control. A deficiency /n /ntcnnu/ control exists when the design or operation of a control does not allow management nremployees, in the normal course ofperforming their assigned functions, to prevent, or detect and correct misstatements on a timely basis. A nnoter/o/ weakness is a deficiency' or a combination of deficiencies' in internal control such that there is a reasonable possibility that a material misstatement of the entity's financial statements will not be prevented, or detected and corrected on a timely basis. As/ynificunt deficiency is a deficiency, or a combination of deficiencies' in internal control that in less severe than a material weakness, yet important enough to merit attention by those charged with governance. Our consideration of interna( control was for the limited purpose described in the first paragraph of this section and was not designed toidentify all deficiencies in internal control that might be material weaknesses nrsignificant deficiencies. Given these limitations, during our audit we did not identify any deficiencies in internal control that we consider to be material weaknesses. However, material weaknesses may exist that have not been identified. Rebmann is""independent member mmexiaInternational. CPAs&Consultants Wealth Advisors Corporate Investigators 338 zxronn^rzoy^, The Honorable Jeffrey R. Smith Clerk of the Circuit Court and Comptroller May 25, 2016 Page 2 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. Purpose of this Report The purpose of this report is solely to describe the scope of our testing of internal control and compliance and the results of that testing, and not to provide an opinion on the effectiveness of the Clerk's internal control or on compliance. This report is an integral part of an audit performed in accordance with Government Auditing Standards in considering the entity's internal control and compliance. Accordingly, this communication is not suitable for any other purpose. 4.01 L4444- W"Y— L LC 339 Re h m a n n Rebmann Robson 5070 North Highway A1A Suite 250 Vero Beach,FL 32963 Ph: 772.234.8484 MANAGEMENT LETTER Fx: 772.234.8488 rehmann.com May 25, 2016 The Honorable Jeffrey R. Smith Clerk of the Circuit Court and Comptroller Indian River County, Florida Report on the Financial Statements We have audited the fund financial statements of the major fund and the aggregate remaining fund information of the Indian River County, Florida Gerk of Court (the "Clerk"), as of and for the year ended September 30, 2015, which collectively comprise the Clerk's fund financial statements and have issued our report thereon dated May 25, 2016. Auditor's Responsibility 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. Other Reports and Schedule 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; and Independent Accountants' Report on an examination conducted in accordance with AICPA Professional Standards, Section 601, regarding compliance requirements in accordance with Chapter 10.550, Rules of the Auditor General. Disclosures in those reports, which are dated May 25, 2016, should be considered in conjunction with this management letter. Prior Audit Findings 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. Official Title and Legal Authority Section 10.554(1)(i)4., 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. Other Matters Section 10.554(1)(i)2., Rules of the Auditor General, requires that we address in the management letter any recommendations to improve financial management. In connection with our audit, we did not have any such recommendations. Rebmann is an independent member of Nexia International. CPAs&Consultants Wealth Advisors Corporate Investigators � I 111P1 I..N AT l0 N:1L 340 Section 10.554(1)(i)3., Rules of the Auditor General, requires that we address noncompliance with 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 which warrants the attention of those charged with governance. In connection with our audit, we did not have any such findings. Purpose of this Letter 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 granting agencies, and applicable management and is not intended to be and should not be used by anyone other than these specified parties. 4494t Wlt-� LLC 341 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 rehmann.com INDEPENDENT ACCOUNTANTS' REPORT May 25, 2016 The Honorable Jeffrey R. Smith Clerk of the Circuit Court and Comptroller Indian River County, Florida We have examined the compliance of Indian River County, Florida Clerk of Court and Comptroller (the "Clerk") with Sections 218.415, 28.35, 28.36, and 61.181 Florida Statutes, during the year ended September 30, 2015. Management is responsible for compliance with those requirements. Our responsibility is to express an opinion on the Clerk's compliance based on our examination. Our examination was conducted in accordance with attestation standards established by the American Institute of Certified Public Accountants and, accordingly, includes examining, on a test basis, evidence about the Clerk's compliance with those requirements and performing such other procedures as we considered necessary in the circumstances. We believe that our examination provides a reasonable basis for our opinion. Our examination does not provide a legal determination on the Clerk's compliance with specified requirements. In our opinion, the Clerk complied, in all material respects, with the aforementioned requirements for the year ended September 30, 2015. This report is intended solely for the information and use of management, the Clerk, the Board of County Commissioners and the Florida Auditor General and is not intended to be and should not be used by anyone other than these specified parties. LLC Rebmann is an independent member of Nexia International. CPAs&Consultants Wealth Advisors Corporate Investigators � I IT,R.N AT IO N1 342 PROPERTY APPRAISER ommmmmmmmmmmmmmmmmmmmmmmmmmmmmmmmmmmmmmmmmm 343 Re h m a n n Rebmann Robson 5070 North Highway A1A Suite 250 Vero Beach,FL 32963 Ph: 772.234.8484 Fx: 772.234.8488 rehmann.com INDEPENDENT AUDITORS' REPORT May 25, 2016 The Honorable David Nolte Property Appraiser Indian River County, Florida Report on the Financial Statements We have audited the accompanying 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, 2015, and the related notes to the financial statements, which collectively comprise the Property Appraiser's fund financial statements as listed in the table of contents. Management's Responsibility for the Financial Statements Management is responsible for the preparation and fair presentation of these financial statements in accordance with accounting principles generally accepted in the United States of America; this includes the design, implementation, and maintenance of internal control relevant to the preparation and fair presentation of financial statements that are free from material misstatement, whether due to fraud or error. Independent Auditors' Responsibility Our responsibility is to express opinions on these financial statements based on our audit. We conducted our audit in accordance with auditing standards generally accepted in the United States of America and the standards applicable to financial audits contained in Government Auditing Standards, issued by the Comptroller General of the United States. Those standards require that we plan and perform the audit to obtain reasonable assurance about whether the financial statements are free of material misstatement. An audit involves performing procedures to obtain audit evidence about the amounts and disclosures in the financial statements. The procedures selected depend on the auditors' judgment, including the assessment of the risks of material misstatement of the financial statements, whether due to fraud or error. In making those risk assessments, the auditor considers internal control relevant to the entity's preparation and fair presentation of the financial statements in order to design audit procedures that are appropriate in the circumstances, but not for the purpose of expressing an opinion on the effectiveness of the entity's internal control. Accordingly, we express no such opinion. An audit also includes evaluating the appropriateness of accounting policies used and the reasonableness of significant accounting estimates made by management, as well as evaluating the overall presentation of the financial statements. We believe that the audit evidence we have obtained is sufficient and appropriate to provide a basis for our audit opinion. Rebmann is an independent member of Nexia International. CPAs&Consultants Wealth Advisors Corporate Investigators M 3 N T E R.N IT I.N1S. 344 Opinion In our opinion, the financial statements referred to above present fairly, in all material respects, the financial position of the fund of the Property Appraiser as of September 30, 2015, and the respective changes in financial position and the respective budgetary comparison for the general fund for the year then ended in accordance with accounting principles generally accepted in the United States of America. Reporting Entity As discussed in Note 1, the financial statements referred to above present only the Indian River County, Florida Property Appraiser and do not purport to, and do not, present fairly the financial position of Indian River County, Florida as of September 30, 2015, and the changes in its financial position for the year then ended, in conformity with accounting principles generally accepted in the United States of America. Other Reporting Required by Government Auditing Standards In accordance with Government Auditing Standards, we have also issued our report dated May 25, 2016 on our consideration of the Property Appraiser'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 in considering the Property Appraiser's internal control over financial reporting and compliance. 4"411 rL4)A- LLC 345 Indian River County, Florida Property Appraiser Balance Sheet General Fund September 30, 2015. ASSETS Cash and cash equivalents $ 84,907 Accounts receivable 3,385 Prepaid items 23,022 Total assets $ 111,314 LIABILITIES AND FUND BALANCES Liabilities: Accounts payable $ 16,820 Due to other governments 86,664 Other deposits 7,830 Total liabilities 111,314 Fund Balances: Nonspendable: Prepaid items 23,022 Unassigned (23,022) Total fund balances - Total liabilities and fund balances $ 1.1.1,31.4 The accompanying notes are an integral part of the financial statements. 346 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, 2015 Variance with Final Budget Budgeted Amount Positive Original Final Actual (Negative) REVENUES Charges for services $ 3,287,962 $ 3,288,461 $ 3,296,145 $ 7,684 Interest - - 732 732 Miscellaneous - - 35,000 35,000 Total revenues 3,287,962 3,288,461 3,331,877 43,416 EXPENDITURES General government 3,287,962 3,288,461 3,253,545 34,916 Total expenditures 3,287,962 3,288,461 3,253,545 34,916 Excess of revenues over (under) expenditures - - 78,332 78,332 OTHER FINANCING USES Transfers to Board of County Commissioners - (78,332) (78,332) Total other financing uses - - (78,332) (78,332) 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. 347 Indian River County, Florida Property Appraiser Notes To Financial Statements Year Ended September 30, 2015 NOTE 1 - SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES The Property Appraiser is a County agency and a local governmental entity pursuant to Article VIII, Section 1(d) of the Constitution of the State of Florida. For financial statement and reporting purposes, the Property Appraiser does not meet the definition of a legally separate organization and is not considered to be a component unit. The Property Appraiser is considered to be a part of the primary government of Indian River County. The financial statements contained herein represent the financial transactions of the Property Appraiser only. The format of the Property Appraiser's statements has been prepared in accordance with the presentation requirements of GASB 34 for fund financial statements. The following is a summary of the significant accounting principles and policies used in the preparation of the accompanying financial statements. A. Description of Funds For reporting purposes, the accounting records are organized on the basis of governmental funds. Governmental Fund General Fund—The General Fund, which is a governmental fund, is used to account for all revenues and expenditures applicable to the general operations of the Property Appraiser. All 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. B. Basis of Accounting, Measurement Focus and Presentation The accounts of the governmental funds are maintained on the modified accrual basis. Under the modified accrual basis, expenditures are recorded at the time liabilities are incurred. Revenues are recorded when received in cash or when they are considered both measurable and available. Revenues collected in excess of expenditures are not considered earned and are reflected as liabilities. C. Budgetary Requirements State statutes require the Property Appraiser to prepare an annual budget, which clearly reflects the revenues available to his office and the functions for which money is to be expended. The budgeted revenues and expenditures are subject to the review and approval of the Department of Revenue. Management is authorized to transfer budgeted amounts between objects and departments as long as management does not exceed the total appropriations of a fund. Department of Revenue approval is only required when unanticipated revenues are received that management wishes to have appropriated, thereby increasing the total appropriations. The budget is prepared on a basis consistent with generally accepted accounting principles. 348 Indian River County, Florida Property Appraiser Notes To Financial Statements Year Ended September 30, 2015 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 $86,664 at September 30, 2015 and are included as due to other governments on the balance sheet. Of this amount, $78,332 was owed to the Board of County Commissioners and is reported as Transfers to Board of County Commissioners on the Statement of Revenues, Expenditures and Changes in Fund Balances. G. Fund Balance GASB Statement 54 — Fund Balance Reporting and Governmental Funds ?Type Definitions was implemented as of October 1, 2009. This Statement requires the fund balance for governmental funds to be reported in classifications that comprise a hierarchy based primarily on the extent to which the government is bound to honor constraints on the specific purposes for which amounts in those funds can be spent. Categories for fund balance are as follows: nonspendable,restricted, committed, assigned, and unassigned. For more information, see the County-wide note on fund balance. NOTE 2 - CASH Deposits At September 30, 2015, the carrying amount of the Property Appraiser's deposits was $84,837 and the bank balance was $163,603. 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 on cash and cash equivalents for the definition of custodial credit risk. Cash on hand at September 30, 2015 was $70. 349 Indian River County, Florida Property Appraiser Notes To Financial Statements Year Ended September 30, 2015 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 (DMS). Benefit provisions are established and may be amended by state statute. A financial report is available from the DMS website at www.dms.myflorida.com or by mail at Florida Division of Retirement, PO Box 9000, Tallahassee, FL 32315-9000. 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, 2015 were: regular class 7.26%, senior class 21.43%, DROP class 12.88%, and elected official class 42.27%. Included in these rates is a health insurance subsidy of 1.66%. 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. Benefits Provided: 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 the County-wide note on pension plans. Contributions: Employer contributions to the FRS are based on a percentage of covered payroll that has been actuarially determined as an amount, when combined with employee contributions, is expected to finance the cost of benefits earned by employees during the year with an additional amount to finance any unfunded accrued liability. For the year ended September 30, 2015, the Property Appraiser's actuarial contributions to FRS under the Pension Plan were $168,362 and the HIS Program were $27,557. Employee contributions for were $53,332. Both employer and employee contributions were equal to 100% of the required contribution for each year. 350 Indian River County, Florida Property Appraiser Notes To Financial Statements Year Ended September 30, 2015 NOTE 3—PENSION PLAN- Continued Florida Retirement System - Continued Pension Liabilities: At September 30, 2015, the Division of Retirement calculated the Property Appraiser's liability of$889,946 for the FRS plan and $674,544 for the Health Insurance Subsidy (.HIS) Program, for a total of $1,564,490 for its proportionate share of the net pension liability. The net pension liability was measured as of June 30, 2015 and the total pension liability used to calculate the net pension liability was determined by an actuarial valuation as of July 1, 2015. The Property Appraiser's proportion of the net pension liability was based on a projection of the Property Appraiser's long-term share of contributions to the pension plan relative to the projected contributions of all participating employers, actuarially determined. At September 30, 2015, the Property Appraiser's proportion was .006890% for the FRS pension plan and .006614% for the HIS Program. Discount Rate for Pension Plan: The discount rate used to measure the total pension liability was 7.65%. The projection of cash flows used to determine the discount rate assumed that plan member contributions will be made at the current contribution rate and that the Property Appraiser's contributions will be made statutorily required rates, actuarially determined. Based on those assumptions,the pension plans' fiduciary net position was projected to be available to make all projected future benefit payments of current active and inactive employees. Therefore, the long-term expected rate of return on pension plan investments was applied to all periods of projected benefit payments to determine the total pension liability. Sensitivity of the Property Appraiser's Proportionate Share of the Net Position Liability to Changes in the Discount Rate for the Pension Plan: The following presents the Property Appraiser's proportionate share of the NPL (net pension liability) of the pension plan calculated using the discount rate of 7.65%. Also presented is what the Property Appraiser's proportionate share of the FRS plan NPL would be if it were calculated using a discount rate that is 1% lower or 1%higher than the current rate: 1%Decrease Current Discount 1% Increase (6.65%) Rate (7.65%) (8.65%) Property Appraiser's proportionate share of NPL $ 2,306,051 $ 889,946 $ (288,486) Discount rate for the HIS Program: In general, the discount rate for calculating the pension liability is equal to the single rate equivalent to discounting at the long-term expected rate of return for benefit payments prior to the projected depletion date. Because the HIS Program is essentially funded on a pay- as-you-go basis, the depletion date is considered to be immediate. The single equivalent discount rate is equal to the municipal bond rate selected by the plan sponsor. The Bond Buyer General Obligation 20- Bond Municipal Bond Index was adopted as the applicable municipal bond index. 351 Indian River County, Florida Property Appraiser Notes To Financial Statements Year Ended September 30, 2015 NOTE 3—PENSION PLAN- Continued Florida Retirement System - Continued Sensitivity of the Property Appraiser's Proportionate Share of the Net Position Liability to Changes in the Discount Rate for the HIS Program: The following presents the Property Appraiser's proportionate share of the NPL (net pension liability) of the HIS Program calculated using the discount rate of 3.80%. Also presented is what the Property Appraiser's proportionate share of the HIS Program NPL would be if it were calculated using a discount rate that is I% lower or I%higher than the current rate: 1%Discount Current Discount 1%Increase (2.80%) Rate (3.80%) (4.80%) Property Appraiser's proportionate share of NPL $ 768,51.1 $ 674,544 $ 596,1.06 Refer to the County-wide note for actuarial assumptions (including the investment rate of return), pension liability on financial statements, and an explanation of pension expense components. The pension liability is not reported in the financial statements of the Property Appraiser since they are not payable from available spendable resources. It is reported in the financial statements of the County by the fund which normally pays the personnel service costs of the employee. NOTE 4—OTHER POSTEMPLOYMENT BENEFITS The Property Appraiser participated in the Indian River County Other Postemployment Benefits Trust (IRCOT). The Property Appraiser's 2015 annual contribution of$57,610 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. 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 2015 at an annual cost of approximately $276,640. Further details on the self-insurance program are discussed in the County-wide financial statements and County notes. 352 Indian River County, Florida Property Appraiser Notes To Financial Statements Year Ended September 30, 2015 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 10/01/14 --Additions ---Deletions 09/30/15 Accrued Compensated Absences $ 21,183 $ 124,332 $ 127,367 $ 18,148 Of the $18,148 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. 353 n��m n��n h �� �� �� x�o�u� � � � �_]� � � � �- - - - - --- - - - - 5070 N.HigunvarAlA - Vero Beach,FL 32983 Ph: 772.234.8484 rv: rro.nn4ouoV zoumauo.vmo INDEPENDENT AUDITORS' REPORT ON INTERNAL CONTROL OVER FINANCIAL REPORTING AND ONCOMPLIANCE AND OTHER MATTERS BASED ON4NAUDIT OFFINANCIAL STATEMENTS PERFORMED |NACCORDANCE WITH GOVERNMENT AUDITING STANDARDS May 25` 2016 The Honorable David Nolte Property Appraiser Indian River County, Florida We have audited, in accordance with the auditing standards generally accepted in the United States of America and the standards applicable to financial audits contained in Government Auditing Standards issued bythe Comptroller General nfthe United States, the fund financial statements of the major fund of the IRC- Property Appraiser (the "Property Appraiser"), as of and for the year ended September 30, 2015 which comprises the Property Appraiser's fund financial statements, and have issued our report thereon dated May 25, 2Ol6. Internal Control Over Financial Reporting In planning and performing our audit of the financial statements, we considered the Property Appraiser's internal control over financial reporting (internal control) to determine the audit procedures that are appropriate in the circumstances 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 Property Appraiser's internal control. Accordingly, we do not express an opinion on the effectiveness of the Property Appraiser's internal control. Our consideration of internal control was for the limited purpose described in the preceding paragraph and was not designed toidentify all deficiencies in internal control that might be material weaknesses orsignificant deficiencies and therefore, material weaknesses orsignificant deficiencies may exist that were not identified. However, as described in the accompanying schedule of findings and questioned costs, we identified certain deficiencies in internal control that vveconsider to be material weaknesses. A deficiency /n internal control exists when the design or operation of a control does not aiiovv management oremployees, in the normal course of performing their assigned functions' to prevent, or detect and correct misstatements on a timely basis. A nnoter/o/ weakness is a deficiency, or a combination of deficiencies' in internal control such that there is a reasonable possibility that a material misstatement of the entity's financial statements will not be prevented' or detected and corrected on a timely basis. We consider the deficiency described in the accompanying schedule of findings and responses as item 2015'001 to be material weakness. Asignificont deficiency is a deficiency, or a combination of deficiencies, in internal control that is less severe than a material weakness, yet important enough to merit attention by those charged with governance. 354 Compliance and Other Matters As part of obtaining reasonable assurance about whether the Property Appraiser's financial statements are free from 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 an instance of material noncompliance that is required to be reported under Government Auditing Standards and which is described in the accompanying schedule of findings and responses as item 2015-002. IRC - Property Appraiser's Response to Findings The Property Appraiser's response to the findings identified in our audit follows the accompanying schedules of findings and responses. The Property Appraiser's responses were not subjected to the auditing procedures applied in the audit of the financial statements and, accordingly, we express no opinion on them. Purpose of this Report The purpose of this report is solely to describe the scope of our testing of internal control and compliance and the results of that testing, and not to provide an opinion on the effectiveness of the Property Appraiser's internal control or on compliance. This report is an integral part of an audit performed in accordance with Government Auditing Standards in considering the entity's internal control and compliance. Accordingly, this communication is not suitable for any other purpose. L 355 INDIAN RIVER COUNTY, FLORIDA PROPERTY APPRAISER Schecll cif Fndgs=and Responses For the Year Ended September 30, 2015 2015-001 - Material Audit Adjustments Finding Type. Material Weakness in Internal Control over Financial Reporting. Criteria. Management is responsible for maintaining its accounting records in accordance with generally accepted accounting principles (GAAP). Condition. During our audit, we identified and proposed two material adjustments (which were approved and posted by management) to adjust the Property Appraiser's accounting records to their appropriate balances. Proceeds from a lawsuit settlement were recorded as an offset to expense instead of miscellaneous revenue and two prepaid maintenance contracts were recorded as expenses instead of assets. Cause. Both of these adjustments appear to be the result of a material weakness in internal controls and oversight in financial reporting. Effect. As a result of this condition, the Property Appraiser's financial information was initially misstated by amounts that were deemed to be quantitatively material. Correcting entries were subsequently posted by management to the Property Appraiser's records and the appropriate balances are presented in the audited financial statements. Recommendation. Management has already taken appropriate corrective action by posting correcting journal entries. However, we recommend that the Property Appraiser management closely review the financial statements throughout the year to correct errors and maintain the Property Appraiser's books and records in accordance with GAAP. 356 INDIAN RIVER COUNTY, FLORIDA PROPERTY APPRAISER Schecll cif Fij ndli~gs=and Responses For the Year Ended September 30, 2015 2015-002 - Non-Compliance with travel-related laws and regulations Finding Type. Material Noncompliance with Laws and Regulations Criteria. State law requires that county offices document any vehicle allowances with signed statements regarding use, and the IRS regulation requires that individuals provide documentation of mileage logs in order for the amounts. Florida statutes dictate the rate at which county employees should be reimbursed for mileage on personal vehicles. Condition. During the FY14 audit, we identified vehicle allowance and mileage reimbursements being paid improperly. Vehicle allowances are being paid without appropriate documentation, and an incorrect mileage is rate being paid to employees. The noncompliance was reported to the Property Appraiser in the Communication to Those Charged with Governance for the September 30, 2014 audit. However, the conditions were not corrected during the vear ended September 30, 2015. Cause. This condition was caused by the Property Appraiser's ongoing disregard for compliance with state and federal laws regarding travel reimbursements. Effect. As a result of this condition, the Property Appraiser is out of compliance with state statute and IRS regulations Recommendation. We recommend that the Property Appraiser follow state statutes and IRS regulations with respect to travel reimbursements and expenditures. 357 David C. Nolte, ASA INDIAN RIVER COUNTY PROPERTY APPRAISER a.. WE ARE HERE TO SERVE Qty! 180027 th Street o Vara Beach, FL 32960 February 8, 201 Indian River County Auditors 5070 N Highway AM, Suite 250 Vero each, FL 32963 Gentlemen: We have received the findings, agree to address the findings with staff; and to implement procedures to insure this will not happen again (1). Sincerely, David C. Nolte; ASA Indian liver aunty Property Appraiser (1) 34 years of previous edit report 195.087 F.S.; 112.061 (7)(d) F.S. DCN,ds (772)567-6666 Fax: (772)770-5087 h :L! m� r 358 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 rehmann.com MANAGEMENT LETTER The Honorable David Nolte Property Appraiser Indian River County, Florida Report on the Financial Statements 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, 2015, which comprises the Property Appraiser's fund financial statements and have issued our report thereon dated May 25, 2016. Auditor's Responsibility 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. Other Reports and Schedule 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; and Independent Accountants' Report on an examination conducted in accordance with AICPA Professional Standards, Section 601, regarding compliance requirements in accordance with Chapter 10.550, Rules of the Auditor General. Disclosures in those reports, which are dated May 25, 2016, should be considered in conjunction with this management letter. Prior Audit Findings 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. Official Title and Legal Authority Section 10.554(1)(i)4., 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. Rebmann is an independent member of Nexia International. CPAs&Consultants Wealth Advisors Corporate Investigators � 111'P>I..N AT IO N:I I. 359 Other Matters Section 10.554(1)(i)2., 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 make the following recommendations: 2015-001 -Management has already taken appropriate corrective action by posting correcting journal entries. However, we recommend that the Property Appraiser management closely review the financial statements throughout the year to correct errors and maintain the Property Appraiser's books and records in accordance with GAAP. Section 10.554(1)(i)3., Rules of the Auditor General, requires that we address noncompliance with 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 which warrants the attention of those charged with governance. In connection with our audit, we found the following: 2015-002 - We recommend that the Property Appraiser follow state statutes and IRS regulations with respect to travel reimbursements and expenditures. Purpose of this Letter 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 granting agencies, and applicable management and is not intended to be and should not be used by anyone other than these specified parties. 4440e, rtl_� LLC 360 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 rehmann.com INDEPENDENT ACCOUNTANTS' REPORT May 25, 2016 The Honorable David Nolte Property Appraiser Indian River County, Florida We have examined the compliance of Indian River County, Florida Property Appraiser (the "Property Appraiser") with Section 218.415, Florida Statutes, during the year ended September 30, 2015. Management is responsible for compliance with those requirements. Our responsibility is to express an opinion on the Property Appraiser's compliance based on our examination. Our examination was conducted in accordance with attestation standards established by the American Institute of Certified Public Accountants and, accordingly, includes examining, on a test basis, evidence about the Property Appraiser's compliance with those requirements and performing such other procedures as we considered necessary in the circumstances. We believe that our examination provides a reasonable basis for our opinion. Our examination does not provide a legal determination on the Property Appraiser's compliance with specified requirements. In our opinion, the Property Appraiser complied, in all material respects, with the aforementioned requirements for the year ended September 30, 2015. This report is intended solely for the information and use of management, the Property Appraiser, the Board of County Commissioners and the Florida Auditor General and is not intended to be and should not be used by anyone other than these specified parties. 444�9 r4to.— LLC Rebmann is an independent member of Nexia International. CPAs&Consultants Wealth Advisors Corporate Investigators � I IT,R.N AT IO N1 361 362 SHERIFF 363 Re h m a n n Rebmann Robson 5070 North Highway A1A Suite 250 Vero Beach,FL 32963 Ph: 772.234.8484 Fx: 772.234.8488 rehmann.com INDEPENDENT AUDITORS' REPORT May 25, 2016 The Honorable Deryl Loar Sheriff Indian River County, Florida Report on the Financial Statements We have audited the accompanying fund financial statements of each 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, 2015, and the related notes to the financial statements, which collectively comprise the Sheriff's fund financial statements as listed in the table of contents. Management's Responsibility for the Financial Statements Management is responsible for the preparation and fair presentation of these financial statements in accordance with accounting principles generally accepted in the United States of America; this includes the design, implementation, and maintenance of internal control relevant to the preparation and fair presentation of financial statements that are free from material misstatement, whether due to fraud or error. Independent Auditors' Responsibility Our responsibility is to express opinions on these financial statements based on our audit. We conducted our audit in accordance with auditing standards generally accepted in the United States of America and the standards applicable to financial audits contained in Government Auditing Standards, issued by the Comptroller General of the United States. Those standards require that we plan and perform the audit to obtain reasonable assurance about whether the financial statements are free of material misstatement. An audit involves performing procedures to obtain audit evidence about the amounts and disclosures in the financial statements. The procedures selected depend on the auditors' judgment, including the assessment of the risks of material misstatement of the financial statements, whether due to fraud or error. In making those risk assessments, the auditor considers internal control relevant to the entity's preparation and fair presentation of the financial statements in order to design audit procedures that are appropriate in the circumstances, but not for the purpose of expressing an opinion on the effectiveness of the entity's internal control. Accordingly, we express no such opinion. An audit also includes evaluating the appropriateness of accounting policies used and the reasonableness of significant accounting estimates made by management, as well as evaluating the overall presentation of the financial statements. We believe that the audit evidence we have obtained is sufficient and appropriate to provide a basis for our audit opinion. Rebmann is an independent member of Nexia International. CPAs&Consultants Wealth Advisors Corporate Investigators � iNTi'i;R.N AT3ON;1 S. 364 Opinion In our opinion, the financial statements referred to above present fairly, in all material respects, the financial position of the funds of the Sheriff as of September 30, 2015, and the respective changes in financial position and the respective budgetary comparison for the general fund for the year then ended in accordance with accounting principles generally accepted in the United States of America. Reporting Entity As discussed in Note 1, the financial statements referred to above present only the Indian River County, Florida Sheriff and do not purport to, and do not, present fairly the financial position of Indian River County, Florida as of September 30, 2015, and the changes in its financial position for the year then ended, in conformity with accounting principles generally accepted in the United States of America. Other Reporting Required by Government Auditing Standards In accordance with Government Auditing Standards, we have also issued our report dated May 25, 2016 on our consideration of the Sheriff'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 in considering the Sheriff's internal control over financial reporting and compliance. 4L44001- r44-e— LLC 365 Indian River County, Florida Sheriff Balance Sheet Governmental Funds September 30,2015 Nonmajor Fund Total Special Governmental General Revenue Funds ASSETS Cash and cash equivalents $ 2,775,206 $ 1,726,618 $ 4,501,824 Accounts receivable-net 56,401 7,695 64,096 Due from other governments - 27,389 27,389 Inventories 64,677 22,906 87,583 Total assets $ 2,896,284 $ 1,784,608 $ 4,680,892 LIABILITIES AND FUND BALANCES Liabilities: Accounts payable $ 2,031,599 $ 33,780 $ 2,065,379 Due to other governments 864,685 210,114 1,074,799 Total liabilities 2,896,284 243,894 3,140,178 Fund Balances: Nonspendable: Inventories 64,677 22,906 87,583 Restricted for: Law enforcement/public safety - 1,079,432 1,079,432 Committed to: Law enforcement/public safety - 335,506 335,506 Assigned to: Law enforcement/public safety - 102,870 102,870 Unassigned (64,677) - (64,677) Total fund balances - 1,540,714 1,540,714 Total liabilities and fund balances $ 2,896,284 $ 1,784,608 $ 4,680,892 The accompanying notes are an integral part of the financial statements. 366 Indian River County, Florida Sheriff Statement of Revenues,Expenditures, and Changes in Fund Balances Governmental Funds For the Year Ended September 30, 2015 Nonmajor Fund Total Special Governmental General Revenue Funds REVENUES Intergovernmental $ - $ 166,991 $ 166,991 Charges for services - 154,171 154,171 Judgments, fines and forfeits - 82,825 82,825 Miscellaneous 68,351 291,026 359,377 Total revenues 68,351 695,013 763,364 EXPENDITURES Public safety 36,580,201 1,595,636 38,175,837 Court related 2,243,692 - 2,243,692 Total expenditures 38,823,893 1,595,636 40,419,529 Excess of revenues over (under)expenditures (38,755,542) (900,623) (39,656,165) OTHER FINANCING SOURCES (USES) Transfers from Board of County Commissioners 39,620,227 1,003,384 40,623,611 Transfers to Board of County Commissioners (864,685) (210,114) (1,074,799) Total other financing sources 38,755,542 793,270 39,548,812 Net change in fund balances - (107,353) (107,353) Fund balances at beginning of year - 1,648,067 1,648,067 Fund balances at end of year $ - $ 1,540,714 $ 1,540,714 The accompanying notes are an integral part of the financial statements. 367 Indian River County,Florida Sheriff Statement of Revenues,Expenditures, and Changes in Fund Balances-Budget and Actual General Fund For the Year Ended September 30, 2015 Variance with Final Budget Budgeted Amounts Positive Original Final Actual (Negative) REVENUES Miscellaneous $ - $ 68,346 $ 68,351 $ 5 Total revenues 68,346 68,351 5 EXPENDITURES Public safety 37,389,005 37,588,888 36,580,201 1,008,687 Court related 2,025,118 2,099,685 2,243,692 (144,007) Total expenditures 39,414,123 39,688,573 38,823,893 864,680 Excess of revenues over (under) expenditures (39,414,123) (39,620,227) (38,755,542) 864,685 OTHER FINANCING SOURCES(USES) Transfers from Board of County Commissioners 39,414,123 39,620,227 39,620,227 - Transfers to Board of County Commissioners - - (864,685) (864,685) Total other financing sources 39,414,123 39,620,227 38,755,542 (864,685) 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. 368 Indian River County, Florida Sheriff Statement of Fiduciary Net Position Agency Fund September 30,2015 ASSETS Cash and cash equivalents $ 29,353 Total assets $ 29,353 LIABILITIES Escrow deposits $ 29,353 Total liabilities $ 29,353 The accompanying notes are an integral part of the financial statements. 369 Indian River County, Florida Sheriff Notes To Financial Statements Year Ended September 30, 2015 NOTE 1 - SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES The Sheriff is a County agency and a local governmental entity pursuant to Article VIII, Section 1(d) of the Constitution of the State of Florida. For financial statement and reporting purposes, the Sheriff does not meet the definition of a legally separate organization and is not considered to be a component unit. The Sheriff is considered to be a part of the primary government of Indian River County. The financial statements contained herein represent the financial transactions of the Sheriff only. The format of the Sheriff's statements has been prepared in accordance with the presentation requirements of GASB 34 for fund financial statements. The following is a summary of the significant accounting principles and policies used in the preparation of the accompanying financial statements. A. Description of Funds 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, committed or assigned 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. Funds are for the employee cafeteria plan. 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. 370 Indian River County, Florida Sheriff Notes To Financial Statements Year Ended September 30, 2015 NOTE 1 - SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES - Continued C. Budgetary Requirements State statutes require the Sheriff to submit a proposed budget to the Board of County Commissioners by May 1 of each year. The budget reflects the estimated amounts of all proposed expenditures for operating and equipping the Sheriff's office and jail. Capital improvements for these buildings are funded by the Board. The budget is prepared on a basis consistent with generally accepted accounting principles. After review and approval of the budget by the Board, the Sheriff is authorized to transfer budgeted amounts between objects and departments as long as he does not exceed the total appropriations approved by the Board. Increases in the total budget are subject to the review and approval of the Board. The budgeted revenues and expenditures in the accompanying financial statements reflect all amendments approved by the Board of County Commissioners. D. Compensated Absences The Sheriff accrues a liability for employees' rights to receive compensation for future absences when certain conditions are met. The Sheriff does not, nor is he legally required to, accumulate expendable available financial resources to liquidate this obligation. Accordingly, the liability for compensated absences is not reported on the Sheriffs financial statements. Additional information on the liability is reflected in subsequent Note 7. E. Transfer Out In accordance with Florida Statutes, all general fund revenues in excess of expenditures as of year-end are owed to the Board of County Commissioners. The September 30, 2015 amount totaled $864,685 and was reported as a transfer to the Board of County Commissioners at year end. This transfer is also reported 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. 371 Indian River County, Florida Sheriff Notes To Financial Statements Year Ended September 30, 2015 NOTE 2 - CASH Deposits At September 30, 2015, the carrying amount of the Sheriff's deposits was $4,530,752, and the bank balance was $5,320,194. 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, 2015 was $425. The Sheriff's office elected not to adopt a formal investment policy and selects the alternative investment guidelines as provided by Florida Statutes 218.41.5, subsection 17. Refer to the County-wide note on cash and cash equivalents for the definition of custodial credit risk. NOTE 3 —CAPITAL ASSETS Tangible personal property used by the Sheriff in operations is reported in the financial statements of the County. State law requires the Sheriff to account for all tangible property used by the Sheriff. A summary of changes in capital assets is as follows: Beginning Ending Balance Balance 10/01/14 Additions Deletions 09/30/15 Tangible Personal Property $ 21,022,988 $ 2,414,369 $ 1,201,203 $ 22,236,154 Refer to the County-wide note on capital assets for capitalization threshold, depreciation methodology and useful lives. NOTE 4 -INVENTORIES Inventories are valued at cost, which approximates market, using the "first-in, first-out" method of accounting. The costs of inventory are recorded as an expenditure when consumed rather than when purchased. Inventory of the Sheriff represents law enforcement gear, miscellaneous clothing and store items. 372 Indian River County, Florida Sheriff Notes To Financial Statements Year Ended September 30, 2015 NOTE 5—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 (DMS). Benefit provisions are established and may be amended by state statute. A financial report is available from the DMS website at www.dms.myflorida.com or by mail at Florida Division of Retirement, PO Box 9000, Tallahassee, FL 32315-9000. 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, 2015 were: regular class 7.26%, senior class 21.43%, DROP class 1.2.88%, and elected official class 42.27%. Included in these rates is a health insurance subsidy of 1.66%. 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. Benefits Provided: 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 the County-wide note on pension plans. Contributions: Employer contributions to the FRS are based on a percentage of covered payroll that has been actuarially determined as an amount, when combined with employee contributions, is expected to finance the cost of benefits earned by employees during the year with an additional amount to finance any unfunded accrued liability. For the year ended September 30, 2015, the Sheriffs actuarial contributions to FRS under the Pension Plan were $2,923,630 and the HIS Program were $301,715. Employee contributions were $595,603. Both employer and employee contributions were equal to 100% of the required contribution for each year. 373 Indian River County, Florida Sheriff Notes To Financial Statements Year Ended September 30, 2015 NOTE 5—PENSION PLAN- Continued Florida Retirement System - Continued Pension Liabilities: At September 30, 2015, the Division of Retirement calculated the Sheriffs liability of$15,711,946 for the FRS plan and $7,730,930 for the Health Insurance Subsidy (.HIS) Program, for a total of$23,442,876 for its proportionate share of the net pension liability. The net pension liability was measured as of June 30, 2015 and the total pension liability used to calculate the net pension liability was determined by an actuarial valuation as of July 1, 2015. The Sheriffs proportion of the net pension liability was based on a projection of the Sheriffs long-term share of contributions to the pension plan relative to the projected contributions of all participating employers, actuarially determined. At September 30, 2015, the Sheriffs proportion was .121.644% for the FRS pension plan and .075805% for the HIS Program. Discount Rate for Pension Plan: The discount rate used to measure the total pension liability was 7.65%. The projection of cash flows used to determine the discount rate assumed that plan member contributions will be made at the current contribution rate and that the Sheriffs contributions will be made statutorily required rates, actuarially determined. Based on those assumptions, the pension plans' fiduciary net position was projected to be available to make all projected future benefit payments of current active and inactive employees. Therefore, the long-term expected rate of return on pension plan investments was applied to all periods of projected benefit payments to determine the total pension liability. Sensitivity of the Sheriffs Proportionate Share of the Net Position Liability to Changes in the Discount Rate for the Pension Plan: The following presents the Sheriffs proportionate share of the NPL (net pension liability) of the pension plan calculated using the discount rate of 7.65%. Also presented is what the Sheriffs proportionate share of the FRS plan NPL would be if it were calculated using a discount rate that is 1% lower or 1%higher than the current rate: Current Discount 1% Decrease (6.65%) Rate (7.65%) 1%Increase (8.65%) Sheriffs proportionate share of NPL $ 40,713,206 $ 15,711,946 $ (5,093,209) Discount rate for the HIS Program: In general, the discount rate for calculating the pension liability is equal to the single rate equivalent to discounting at the long-term expected rate of return for benefit payments prior to the projected depletion date. Because the HIS Program is essentially funded on a pay- as-you-go basis, the depletion date is considered to be immediate. The single equivalent discount rate is equal to the municipal bond rate selected by the plan sponsor. The Bond Buyer General Obligation 20- Bond Municipal Bond Index was adopted as the applicable municipal bond index. 374 Indian River County, Florida Sheriff Notes To Financial Statements Year Ended September 30, 2015 NOTE 5—PENSION PLAN- Continued Florida Retirement System - Continued Sensitivity of the Sheriffs Proportionate Share of the Net Position Liability to Changes in the Discount Rate for the HIS Program: The following presents the Sheriffs proportionate share of the NPL (net pension liability) of the HIS Program calculated using the discount rate of 3.80%. Also presented is what the Sheriffs proportionate share of the HIS Program NPL would be if it were calculated using a discount rate that is I% lower or I% higher than the current rate: Current Discount 1%Decrease (2.80%) Rate (3.80%) 1%Increase (4.80%) Sheriffs proportionate share of NPL $ 8,809,035 $ 7,730,930 $ 6,831,953 Refer to the County-wide note for actuarial assumptions (including the investment rate of return), pension liability on financial statements, and an explanation of pension expense components. The pension liability is not reported in the financial statements of the Sheriff since they are not payable from available spendable resources. It is reported in the financial statements of the County by the fund which normally pays the personnel service costs of the employee. NOTE 6—OTHER POSTEMPLOYMENT BENEFITS The Sheriff participated in the Indian River County Other Postemployment Benefits Trust (IRCOT). The Sheriff's 2015 annual contribution of $1,065,876 was funded by the Board of County Commissioners as part of a total contribution determined by the IRCOT actuary. Further information on. the IRCOT can be found in the County-wide financial statements and County notes. NOTE 7—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 2015 at an annual cost of approximately $3,706,548. Further details on this self-insurance program are disclosed in the County-wide financial statements and County notes. 375 Indian River County, Florida Sheriff Notes To Financial Statements Year Ended September 30, 2015 NOTE 8—LONG-TERM LIABILITIES Changes in Long-Term Liabilities The following is a schedule of changes in long-term liabilities as of September 30, 2015: Beginning Ending Balance Balance 10/01/14 Additions Deletions 09/30/15 Accrued Compensated Absences $ 5,933,715 $ 3,361,577 $ 2,820,531 $ 6,474,761 Of the $6,474,761 liability for accrued compensated absences, management estimates that $3,215,501. 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 9—OPERATING LEASES The Sheriff has entered into noncancelable operating leases as lessee of a building, hangar, mail machine, and copiers. Lease expenditures totaled$100,870 for the year ended September 30, 2015.. 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 2016 $ 100,629 2017 90,019 2018. 1.9,768 Total Future Minimum Lease Payments $ 210,416 NOTE 10—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. 376 h ��� �� �� �� n�m�ua��u 0 N 0 0 ��� 0 N N N 5070 North Highway A1A Suite 250 Vero Beach,FL32983 Ph: 772.234.8484 Fx: ,7zz3u.8488 zoumaoo.coou 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 YV|7FH GOVEMMENT AUDIT/NG STANDARDS May 25, 2O16 The Honorable Dery( Loar Sheriff Indian River County, Florida We have audited, in accordance with the auditing standards generally accepted in the United States of America and the standards applicable to financial statements contained in Government Auditing Standards issued by the Comptroller General of the United States, the fund financial statements ofthe 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 38' 2015' which collectively comprise the Sheriff's fund financial statements and have issued our report thereon dated May 25' 2016. Internal Control over Financial Reporting In planning and performing our audit nfthe financial statements, we considered the Sheriff's internal control over financial reporting (internal control) to determine the audit procedures that are appropriate in the circumstances 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 Sheriff's internal control. Accordingly, we do not express an opinion on the effectiveness of the Sheriff's internal control. A deficiency in internal control exists when the design or operation of a control does not allow management oremployees, in the normal course ofperforming their assigned functions, to prevent, or detect and correct misstatements on a timely basin. A /noter/u/ weakness is a deficiency' or a combination of deficiencies' in internal control such that there is a reasonable possibility that a material misstatement of the entity's financial statements will not be prevented, or detected and corrected on u timely basis. As/gnificont deficiency is a deficiency, or a combination of deficiencies' in internal control that is less severe than a material weakness, yet important enough to merit attention bythose charged with governance. Our consideration of internal control was for the limited purpose described in the first paragraph of this section and was not designed toidentify all deficiencies in internal control that might be material weaknesses orsignificant deficiencies. Given [hese limitations, during our audit vvedid not identify any deficiencies in internal control that we consider to be material weaknesses. However, material weaknesses may exist that have not been identified. Compliance and Other Matters As part of obtaining reasonable assurance about whether the Sheriff'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 ofour audit and, accordingly, we do not Rebmann is"`independent member mwexmInternational. CPAm&Consultants Wealth Advisors Corporate Investigators zxronn^rzoy^, 377 The Honorable Deryl Loar Sheriff May 25, 2016 Page 2 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. Purpose of this Report The purpose of this report is solely to describe the scope of our testing of internal control and compliance and the results of that testing, and not to provide an opinion on the effectiveness of the Sheriff's internal control or on compliance. This report is an integral part of an audit performed in accordance with Government Auditing Standards in considering the entity's internal control and compliance. Accordingly, this communication is not suitable for any other purpose. 4L"e- WA-4� LLC 378 Re h m a n n Rebmann Robson 5070 North Highway A1A Suite 250 Vero Beach,FL 32963 Ph: 772.234.8484 Fx: 772.234.8488 rehmann.com MANAGEMENT LETTER May 25, 2016 The Honorable Deryl Loar Sheriff Indian River County, Florida Report on the Financial Statements We have audited the fund financial statements of the major fund and the aggregate remaining fund information of the Indian River County, Florida Si►eriff (the "Sheriff"), as of and for the year ended September 30, 2015, which collectively comprise the Sheriff's fund financial statements and have issued our report thereon dated May 25, 2016. Auditor's Responsibility 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. Other Reports and Schedule 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 May 25, 2016, should be considered in conjunction with this management letter. Prior Audit Findings 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. Corrective actions have been taken to address recommendations made in the preceding annual financial audit report. Official Title and Legal Authority Section 10.554(1)(i)4., 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. Rebmann is an independent member of Nexia International. CPAs&Consultants Wealth Advisors Corporate Investigators � IITURIAI'l I I L 379 Other Matters Section 10.554(1)(i)2., Rules of the Auditor General, requires that we address in the management letter any recommendations to improve financial management. In connection with our audit, we did not have any such recommendations. Section 10.554(1)(i)3., Rules of the Auditor General, requires that we address noncompliance with 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 which warrants the attention of those charged with governance. In connection with our audit, we did not have any such findings. Purpose of this Letter 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 granting agencies, and applicable management and is not intended to be and should not be used by anyone other than these specified parties. - rL4--A- LLC 380 SUPERVISOR OF ELECTIONS ommmmmmmmmmmmmmmmmmmmmmmmmmmmmmmmmmmmmmmmmm 381 Re h m a n n Rebmann Robson 5070 North Highway A1A Suite 250 Vero Beach,FL 32963 Ph: 772.234.8484 Fx: 772.234.8488 rehmann.com INDEPENDENT AUDITORS' REPORT May 25, 2016 The Honorable Leslie Swan Supervisor of Elections Indian River County, Florida Report on the Financial Statements 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, 2015, and the related notes to the financial statements, which collectively comprise the Supervisor of Elections' fund financial statements as listed in the table of contents. Management's Responsibility for the Financial Statements Management is responsible for the preparation and fair presentation of these financial statements in accordance with accounting principles generally accepted in the United States of America; this includes the design, implementation, and maintenance of internal control relevant to the preparation and fair presentation of financial statements that are free from material misstatement, whether due to fraud or error. Independent Auditors' Responsibility Our responsibility is to express opinions on these financial statements based on our audit. We conducted our audit in accordance with auditing standards generally accepted in the United States of America and the standards applicable to financial audits contained in Government Auditing Standards, issued by the Comptroller General of the United States. Those standards require that we plan and perform the audit to obtain reasonable assurance about whether the financial statements are free of material misstatement. An audit involves performing procedures to obtain audit evidence about the amounts and disclosures in the financial statements. The procedures selected depend on the auditors' judgment, including the assessment of the risks of material misstatement of the financial statements, whether due to fraud or error. In making those risk assessments, the auditor considers internal control relevant to the entity's preparation and fair presentation of the financial statements in order to design audit procedures that are appropriate in the circumstances, but not for the purpose of expressing an opinion on the effectiveness of the entity's internal control. Accordingly, we express no such opinion. An audit also includes evaluating the appropriateness of accounting policies used and the reasonableness of significant accounting estimates made by management, as well as evaluating the overall presentation of the financial statements. We believe that the audit evidence we have obtained is sufficient and appropriate to provide a basis for our audit opinion. Rebmann is an independent member of Nexia International. CPAs&Consultants Wealth Advisors Corporate Investigators � I ITP>R.11-1 O^;AI. 382 Opinion In our opinion, the financial statements referred to above present fairly, in all material respects, the financial position of the funds of the Supervisor of Elections as of September 30, 2015, and the respective changes in financial position and the respective budgetary comparison for the general fund for the year then ended in accordance with accounting principles generally accepted in the United States of America. Reporting Entity As discussed in Note 1, the financial statements referred to above present only the Indian River County, Florida Supervisor of Elections and do not purport to, and do not, present fairly the financial position of Indian River County, Florida as of September 30, 2015, and the changes in its financial position for the year then ended, in conformity with accounting principles generally accepted in the United States of America. Other Reporting Required by Government Auditing Standards In accordance with Government Auditing Standards, we have also issued our report dated May 25, 2016 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 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 in considering the Supervisor of Elections' internal control over financial reporting and compliance. rL4�4_ L LC 383 Indian River County,Florida Supervisor of Elections Balance Sheet Governmental Funds September 30, 2015 Nonmajor Fund Total Special Governmental General Revenue Funds ASSETS Cash and cash equivalents $ 53,737 $ 27,049 $ 80,786 Prepaid items 1,183 - 1,183 Total assets $ 54,920 $ 27,049 $ 81,969 LIABILITIES AND FUND BALANCES Liabilities: Accounts payable $ 23,043 $ - $ 23,043 Due to other governments 31,877 - 31,877 Unearned revenues - 23,521 23,521 Total liabilities 54,920 23,521 78,441 Fund Balances: Nonspendable: Prepaid items 1,1.83 - 1,1.83 Restricted for: Voting/election activities - 3,528 3,528 Unassigned (1,183) - (1,183) Total fund balances - 3,528 3,528 Total liabilities and fund balances $ 54,920 $ 27,049 $ 81,969 The accompanying notes are an integral part of the financial statements. 384 Indian River County, Florida Supervisor of Elections Statement of Revenues,Expenditures, and Changes in Fund Balances Governmental Funds For the Year Ended September 30, 2015 Nonmajor Fund Total Special Governmental General Revenue Funds REVENUES Intergovernmental $ - $ 16,158 $ 16,158 Charges for services 1,653 - 1,653 Miscellaneous 21,036 - 21,036 Total revenues 22,689 16,158 38,847 EXPENDITURES General government 1,049,526 18,510 1,068,036 Total expenditures 1,049,526 18,510 1,068,036 Excess of revenues over (under) expenditures (1,026,837) (2,352) (1,029,189) OTHER FINANCING SOURCES(USES) Transfers from Board of County Commissioners 1,062,242 - 1,062,242 Transfers from other funds - 3,528 3,528 Transfers to Board of County Commissioners (31,877) - (31,877) Transfers to other funds (3,528) - (3,528) Total other financing sources (uses) 1,026,837 3,528 1,030,365 Net change in fund balances - 1,176 1,176 Fund balances at beginning of year - 2,352 2,352 Fund balances at end of year $ - $ 3,528 $ 3,528 The accompanying notes are an integral part of the financial statements. 385 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, 2015 Variance with Final Budget Budgeted Amount Positive Original Final Actual (Negative) REVENUES Charges for services $ - $ - $ 1,653 $ 1,653 Miscellaneous - 21,036 21,036 - Total revenues - 21,036 22,689 1,653 EXPENDITURES General government 1,058,633 1,079,669 1,049,526 30,143 Total expenditures 1,058,633 1,079,669 1,049,526 30,143 Excess of revenues over (under) expenditures (1,058,633) (1,058,633) (1,026,837) 31,796 OTHER FINANCING SOURCES(USES) Transfers from Board of County Commissioners 1,062,242 1,062,242 1,062,242 - Transfers to Board of County Commissioners - - (31,877) (31,877) Transfers to other funds (3,609) (3,609) (3,528) 81 Total other financing sources (uses) 1,058,633 1,058,633 1,026,837 (31,796) 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. 386 Indian River County, Florida Supervisor of Elections Notes To Financial Statements Year Ended September 30, 2015 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 expenditures applicable to the general operations of the Supervisor of Elections. 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 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. 387 Indian River County, Florida Supervisor of Elections Notes To Financial Statements Year Ended September 30, 2015 NOTE 1 - 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. 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 In accordance with Florida Statutes, all general fund revenues in excess of expenditures as of year-end are owed to the Board of County Commissioners and other governments. This unspent budget totaled $31,877 and was reported as transfers out. These transfers are also reflected as due to other governments on the balance sheet. 1. 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. 388 Indian River County, Florida Supervisor of Elections Notes To Financial Statements Year Ended September 30, 2015 NOTE 2 - CASH Deposits At September 30, 2015, the carrying amount of the Supervisor of Elections' deposits was $80,761, and the bank balance was $158,811. 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, 2015 was $25. 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 on cash and cash equivalents for the 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 (DMS). Benefit provisions are established and may be amended by state statute. A financial report is available from the DMS website at www.dms.myflorida.com or by mail at Florida Division of Retirement, PO Box 9000, Tallahassee, FL 32315-9000. 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, 2015 were: regular class 7.26%, senior class 21.43%, DROP class 12.88%, and elected official class 42.27%. Included in these rates is a health insurance subsidy of 1.66%. 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. 389 Indian River County, Florida Supervisor of Elections Notes To Financial Statements Year Ended September 30, 2015 NOTE 3—PENSION PLAN- Continued Florida Retirement System - Continued Benefits Provided: 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 the County-wide note on pension plans. Contributions: Employer contributions to the FRS are based on a percentage of covered payroll that has been actuarially determined as an amount, when combined with employee contributions, is expected to finance the cost of benefits earned by employees during the year with an additional amount to finance any unfunded accrued liability. For the year ended September 30, 2015, the Supervisor of Elections' actuarial contribution to FRS under the Pension Plan were $63,701 and the HIS Programs were $6,306. Employee contributions for were $13,295. Both employer and employee contributions were equal to 100% of the required contribution for each year. Pension Liabilities: At September 30, 2015,. the Division of Retirement calculated the Supervisor of Elections' liability of$349,072 for the FRS plan and $158,326 for the Health Insurance Subsidy (HIS) Program, for a total of$507,398 for its proportionate share of the net pension liability. The net pension liability was measured as of June 30, 2015 and the total pension liability used to calculate the net pension liability was determined by an actuarial valuation as of July 1, 2015. The Supervisor of Elections' proportion of the net pension liability was based on a projection of the Supervisor of Elections' long-term share of contributions to the pension plan relative to the projected contributions of all participating employers, actuarially determined. At September 30, 2015, the Supervisor of Elections' proportion was .002703% for the FRS pension plan and .001552% for the HIS Program. Discount Rate for Pension Plan: The discount rate used to measure the total pension liability was 7.65%. The projection of cash flows used to determine the discount rate assumed that plan member contributions will be made at the current contribution rate and that the Supervisor of Elections' contributions will be made statutorily required rates, actuarially determined. Based on those assumptions, the pension plans' fiduciary net position was projected to be available to make all projected future benefit payments of current active and inactive employees. Therefore, the long-term expected rate of return on pension plan investments was applied to all periods of projected benefit payments to determine the total pension liability. 390 Indian River County, Florida Supervisor of Elections Notes To Financial Statements Year Ended September 30, 2015 NOTE 3—PENSION PLAN- Continued Florida Retirement System - Continued Sensitivity of the Supervisor of Elections'Proportionate Share of the Net Position Liability to Changes in the Discount Rate for the Pension Plan: The following presents the Supervisor of Elections' proportionate share of the NPL (net pension liability) of the pension plan calculated using the discount rate of 7.65%. Also presented is what the Supervisor of Elections' proportionate share of the FRS plan NPL would be if it were calculated using a discount rate that is 1% lower or 1% higher than the current rate: I%Decrease Current Discount 1%Increase ..................(6.65°"................. .........Rate_(7.65%)- ----- ................f8.650 ----------- f 8.65°/ Supervisor of Elections' proportionate share of NPL $ 904,524 $ 349,072 $ (113,156) Discount rate for the HIS Program: In general, the discount rate for calculating the pension liability is equal to the single rate equivalent to discounting at the long-term expected rate of return for benefit payments prior to the projected depletion date. Because the HIS Program is essentially funded on a pay- as-you-go basis, the depletion date is considered to be immediate. The single equivalent discount rate is equal to the municipal bond rate selected by the plan sponsor. The Bond Buyer General Obligation 20- Bond Municipal Bond Index was adopted as the applicable municipal bond index. Sensitivity of the Supervisor of Elections'Proportionate Share of the Net Position Liability to Changes in the Discount Rate for the HIS Program: The following presents the Supervisor of Elections' proportionate share of the NPL (net pension liability) of the HIS Program calculated using the discount rate of 3.80%. Also presented is what the Supervisor of Elections' proportionate share of the HIS Program NPL would be if it were calculated using a discount rate that is 1% lower or 1% higher than the current rate: I%Decrease Current Discount 1% Increase (2.80%) Rate (3.80%) (4.80%) Supervisor of Election's proportionate share of NPL $ 180,405 $ 158,326 $ 139,91.5 Refer to the County-wide note for actuarial assumptions (including the investment rate of return), pension liability on financial statements, and an explanation of pension expense components. The pension liability is not reported in the financial statements of the Supervisor of Elections since they are not payable from available spendable resources. It is reported in the financial statements of the County by the fund which normally pays the personnel service costs of the employee. 391. Indian River County, Florida Supervisor of Elections Notes To Financial Statements Year Ended September 30, 2015 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 2015 annual contribution of$13,168 was funded by the Board of County Commissioners as part of a total contribution determined by the IRCOT actuary. Further information on the IRCOT can be found in the County-wide financial statements and County notes. NOTE 5—RISK MANAGEMENT Indian River County maintains a risk management program that provides for coverage of risks of loss related to torts, theft of, damage to and destruction of assets, errors or omissions, injuries to employees, natural disasters, and medical and life insurance coverage for employees and their eligible dependents. Various excess catastrophe insurance policies with a commercial carrier are also in force for claims exceeding the amount chargeable against the Self-insurance Fund. The Supervisor of Elections participated in the County's self-insurance program during fiscal year 2015 at an annual cost of approximately $59,625. NOTE 6—LONG-TERM LIABILITIES Changes in Long-Term Liabilities The following is a schedule of changes in long-term liabilities as of September 30, 2015: Beginning Ending Balance Balance 10/01/14 Additions Deletions 09/30/15 Accrued Compensated Absences $ 26,671 $ 31,733 $ 39,987 $ 18,417 Of the $18,417 liability for accrued compensated absences, management estimates that $9,733 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. 392 Indian River County, Florida Supervisor of Elections Notes To Financial Statements Year Ended September 30, 2015 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$6,672 for the year ended September 30, 2015. The following is a schedule by years of minimum future rentals to be paid by the Supervisor of Elections for the noncancelable operating leases as of September 30: YearAmount 2016 $ 6,672 20175,004 Total Future Minimum Lease Payments $ 1.1,676 393 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 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 May 25, 2016 The Honorable Leslie Swan Supervisor of Elections Indian River County, Florida We have audited, in accordance with the auditing standards generally accepted in the United States of America and the standards applicable to financial statements contained in Government Auditing Standards issued by the Comptroller General of the United States, 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, 2015, which collectively comprise the Supervisor of Elections' fund financial statements and have issued our report thereon dated May 25, 2016. Internal Control over Financial Reporting In planning and performing our audit of the financial statements, we considered the Supervisor of Elections' internal control over financial reporting (internal control) to determine the audit procedures that are appropriate in the circumstances 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 Supervisor of Elections' internal control. Accordingly, we do not express an opinion on the effectiveness of the Supervisor of Elections' internal control. 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 a combination of deficiencies, in internal control such that there is a reasonable possibility that a material misstatement of the entity's financial statements will not be prevented, or detected and corrected on a timely basis. A significant deficiency is a deficiency, or a combination of deficiencies, in internal control that is less severe than a material weakness, yet important enough to merit attention by those charged with governance. Our consideration of internal control 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 material weaknesses or significant deficiencies. Given these limitations, during our audit we did not identify any deficiencies in internal control that we consider to be material weaknesses. However, material weaknesses may exist that have not been identified. 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 Rebmann is an independent member of Nexia International. CPAs&Consultants Wealth Advisors Corporate Investigators � z�rr,Rw�r2o�:1J 394 The Honorable Leslie Swan Supervisor of Elections May 25, 2016 Page 2 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. Purpose of this Report The purpose of this report is solely to describe the scope of our testing of internal control and compliance and the results of that testing, and not to provide an opinion on the effectiveness of the Supervisor of Elections' internal control or on compliance. This report is an integral part of an audit performed in accordance with Government Auditing Standards in considering the entity's internal control and compliance. Accordingly, this communication is not suitable for any other purpose. LLC 395 A fie h m a n n Rebmann Robson 1500 W.Big Beaver Road 2nd Floor Troy,MI 48084 Ph: 248.952.5000 Fx: 248.952.5750 rehmann.com MANAGEMENT LETTER May 25, 2016 The Honorable Leslie Swan Supervisor of Elections Indian River County, Florida Report on the Financial Statements 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, 2015, which collectively comprise the Supervisor of Elections' fund financial statements and have issued our report thereon dated May 25, 2016. Auditor's Responsibility 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. Other Reports and Schedule 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 May 25, 2016, should be considered in conjunction with this management letter. Prior Audit Findings 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. Official Title and Legal Authority Section 10.554(1)(i)4., 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. Other Matters Section 10.554(1)(i)2., Rules of the Auditor General, requires that we address in the management letter any recommendations to improve financial management. In connection with our audit, we did not have any such recommendations. Rebmann is an independent member of Nexia international. CPAs&Consultants Wealth Advisors Corporate Investigators I N T I I I AT IO 11,11, 396 Section 10.554(1)(i)3., Rules of the Auditor General, requires that we address noncompliance with 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 which warrants the attention of those charged with governance. In connection with our audit, we did not have any such findings. Purpose of this Letter 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 granting agencies, and applicable management and is not intended to be and should not be used by anyone other than these specified parties. 4419 r44-11k- LLC 397 398 TAX COLLECTOR 399 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 rehmann.com INDEPENDENT AUDITORS' REPORT May 25, 2016 The Honorable Carole Jean Jordan Tax Collector Indian River County, Florida Report on the Financial Statements 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, 2015, and the related notes to the financial statements, which collectively comprise the Tax Collector's fund financial statements as listed in the table of contents. Management's Responsibility for the Financial Statements Management is responsible for the preparation and fair presentation of these financial statements in accordance with accounting principles generally accepted in the United States of America; this includes the design, implementation, and maintenance of internal control relevant to the preparation and fair presentation of financial statements that are free from material misstatement, whether due to fraud or error. Independent Auditors' Responsibility Our responsibility is to express opinions on these financial statements based on our audit. We conducted our audit in accordance with auditing standards generally accepted in the United States of America and the standards applicable to financial audits contained in Government Auditing Standards, issued by the Comptroller General of the United States. Those standards require that we plan and perform the audit to obtain reasonable assurance about whether the financial statements are free of material misstatement. An audit involves performing procedures to obtain audit evidence about the amounts and disclosures in the financial statements. The procedures selected depend on the auditors' judgment, including the assessment of the risks of material misstatement of the financial statements, whether due to fraud or error. In making those risk assessments, the auditor considers internal control relevant to the entity's preparation and fair presentation of the financial statements in order to design audit procedures that are appropriate in the circumstances, but not for the purpose of expressing an opinion on the effectiveness of the entity's internal control. Accordingly, we express no such opinion. An audit also includes evaluating the appropriateness of accounting policies used and the reasonableness of significant accounting estimates made by management, as well as evaluating the overall presentation of the financial statements. We believe that the audit evidence we have obtained is sufficient and appropriate to provide a basis for our audit opinion. Rebmann is an independent member of Nexia International. CPAs&Consultants Wealth Advisors Corporate Investigators � 3vr�cRv�r3o�:t�. 400 Opinion In our opinion, the financial statements referred to above present fairly, in all material respects, the financial position of the funds of the Tax Collector as of September 30, 2015, and the respective changes in financial position and the respective budgetary comparison for the general fund for the year then ended in accordance with accounting principles generally accepted in the United States of America. Reporting Entity As discussed in Note 1, the financial statements referred to above present only the Indian River County, Florida Tax Collector and do not purport to, and do not, present fairly the financial position of Indian River County, Florida as of September 30, 2015, and the changes in its financial position for the year then ended, in conformity with accounting principles generally accepted in the United States of America. Other Reporting Required by Government Auditing Standards In accordance with Government Auditing Standards, we have also issued our report dated May 25, 2016 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 in considering the Tax Collector's internal control over financial reporting and compliance. 4L441j.. r4"),- LLC 401 Indian River County,Florida Tax Collector Balance Sheet General Fund September 30, 2015 ASSETS Cash and cash equivalents $ 2,760,091 Accounts receivable 118,285 Inventories 2,517 Prepaid items 2,560 Total assets $ 2,883,453 LIABILITIES AND FUND BALANCES Liabilities: Accounts payable $ 179,739 Due to other governments 2,646,564 Unearned revenues 56,814 Other deposits 336 Total liabilities 2,883,453 Fund Balances: Nonspendable: Inventories 2,517 Prepaid items 2,560 Unassigned (5,077) Total fund balances - Total liabilities and fund balances $ 2,883,453 The accompanying notes are an integral part of the financial statements. 402 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, 2015 Variance with Final Budget Budgeted Amount Positive Original Final Actual (Negative) REVENUES Charges for services $ 5,630,680 $ 5,630,680 $ 5,81.1,102 $ 180,422 Interest 9,000 9,000 7,104 (1,896) Total revenues 5,639,680 5,639,680 5,818,206 178,526 EXPENDITURES General government 3,528,034 3,528,034 3,443,706 84,328 Tota] expenditures 3,528,034 3,528,034 3,443,706 84,328 Excess of revenues over(under) expenditures 2,111,646 2,1.11,646 2,374,500 262,854 OTHER FINANCING USES Transfers to Board of County Commissioners (2,111,646) (2,111,646) (2,374,500) (262,854) Total other financing uses (2,111,646) (2,111,646) (2,374,500) (262,854) 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. 403 Indian River County, Florida Tax Collector Statement of Fiduciary Net Position Agency Fund September 30,2015 ASSETS Cash and cash equivalents $ 3,983,972 Total assets $ 3,983,972 LIABILITIES Due to other governments $ 3,983,972 Total liabilities $ 3,983,972 The accompanying notes are an integral part of the financial statements. 404 Indian River County, Florida Tax Collector Notes To Financial Statements Year Ended September 30, 2015 NOTE 1 - SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES The Tax Collector is a County agency and a local governmental entity pursuant to Article VIII, Section 1(d) of the Constitution of the State of Florida. For financial statement and reporting purposes, the Tax Collector does not meet the definition of a legally separate organization and is not considered to be a component unit. The Tax Collector is considered to be a part of the primary government of Indian River County. The financial statements contained herein represent the financial transactions of the Tax Collector only. The format of the Tax Collector's statements has been prepared in accordance with the presentation requirements of GASB 34 for fund financial statements. The following is a summary of the significant accounting principles and policies used in the preparation of the accompanying financial statements. A. Description of Funds The accounting records are organized for reporting purposes on the basis of governmental funds and a fiduciary fund. Governmental Fund General Fund—The General Fund, which is a governmental fund, is used to account for all revenues and expenditures applicable to the general operations of the Tax Collector. All 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. Fiduciary Fund Fiduciary Fund—The Fiduciary Fund of the Tax Collector is the Agency Fund, which is used to account for assets held by the Tax Collector as an agent. The Agency Fund is custodial in nature and does not involve measurement of results of operations. These funds cannot be used to support the Tax Collector's own programs. B. Basis of Accounting, Measurement Focus and Presentation The accounts of the governmental funds are maintained on the modified accrual basis. The fiduciary fund is reported on an accrual basis. Under the modified accrual basis, expenditures are recorded at the time liabilities are incurred. Revenues are recorded when received in cash or when they are considered both measurable and available. Revenues collected in excess of expenditures are not considered earned and are reflected as liabilities. 405 Indian River County, Florida Tax Collector Notes To Financial Statements Year Ended September 30, 2015 NOTE 1 - SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES - Continued C. Budgetary Requirements State statutes require the Tax Collector to prepare an annual budget that clearly reflects the revenues available to her office and the functions for which money is to be expended. The budgeted revenues and expenditures are subject to the review and approval of the Department of Revenue. Management is authorized to transfer budgeted amounts between objects and departments as long as management does not exceed the total appropriations of a fund. Department of Revenue approval is only required when unanticipated revenues are received that management wishes to have appropriated, thereby increasing the total appropriations of a fund. The budget is prepared on a basis consistent with generally accepted accounting principles. D. Cash and Cash Equivalents Cash and cash equivalents include deposits and all highly liquid investments with maturities of ninety days or less when purchased. E. Prepaid 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. G. Unearned Revenues Unearned revenues represent revenues which are available but not earned. The amount reported on the Tax Collector's balance sheet of$56,81.4 represents prepaid vehicle registrations. 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. 406 Indian River County, Florida Tax Collector Notes To Financial Statements Year Ended September 30, 2015 NOTE 1 - SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES - Continued 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" totaled $2,646,564 at September 30, 2015 and are included as due to other governments on the balance sheet. Of this amount, $2,374,500 was owed to the Board of County Commissioners and is reported as Transfers to Board of County Commissioners on the Statement of Revenues, Expenditures and Changes in Fund Balances. 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, 2015, the carrying amount of the Tax Collector's deposits was $6,187,892 and the bank balance was $6,298,291. 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, 2015 was $18,500. B. Investments The Tax Collector last modified their investment and deposit policy in June 2014. 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 on cash and cash equivalents for the definition of custodial credit risk. 407 Indian River County, Florida Tax Collector Notes To Financial Statements Year Ended September 30, 2015 NOTE 2 - CASH AND CASH EQUIVALENTS - Continued B. Investments - Continued At September 30, 2015, the Tax Collector had the following investments: Weighted Average Portfolio Credit Investment Type Fair Value Maturity In Years Percentage Risks Other Market Rate Investments: Florida PRIME(formerly Fund A) $ 1,018 0.08 0.19% AAAm Florida Trust Day to Day Fund 25,326 0.08 4.71 AAAm Other Fixed Rate Investments: Certificate of Deposit— 12 Month 253,287 0.80 4711 N/A Certificate of Deposit—24 Month 258,040 0.32 47.99 N/A Total Fair Value $ 537,671 100.00% Portfolio weighted average maturity 0.53 Concentration Risk 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 95% Securities &Exchange Commission Money Funds 25% Bank Super NOW Accounts 95% Bank Repo Agreements 50% United States Government Agencies 25% The Tax Collector invests surplus funds in an external investment pool, the Local Government Surplus Funds Trust Fund(the "Florida Prime"). The Florida PRIME is administered by the Florida State Board of Administration ("SBA"), who provides regulatory oversight. The Florida PRIME has adopted operating procedures consistent with the requirements for a 2a-7 like fund. The Tax Collector's investment in the Florida PRIME is reported at amortized cost. The fair value of the position in the pool is equal to the value of the pool shares. At September 30, 2015, the Florida PRIME held a rating of AAAm by Standard and Poor's and had a weighted average days to maturity of 28 days. 408 Indian River County, Florida Tax Collector Notes To Financial Statements Year Ended September 30, 2015 NOTE 2 - CASH AND INVESTMENTS - Continued B. Investments - Continued Interest Rate Risk The Tax Collector will attempt to match investment maturities with known cash needs and anticipated cash flow requirements. Investments of current operating funds shall have maturities of no longer than. twelve months and funds in excess of current operating needs may have maturities of no longer than twenty-four months. Credit Risk Florida Statutes authorize investments in certificates of deposit, savings accounts, the Local Government Surplus Funds Trust Fund administered by the Florida State Board of Administration; Securities and Exchange Commission registered money market funds with the highest credit quality rating from a nationally recognized rating agency, and direct obligations of the U.S. Treasury. Custodial Credit Risk All investments are held in the name of the Tax Collector, by the Tax Collector, with the exception of the Florida Trust Day to Day Fund, which was held by UMB Bank, and the Florida PRIME which was held by BNY Mellon. NOTE 3 -INVENTORIES Inventories are valued at cost, which approximates market, using the "first-in, first-out" method of accounting. The costs of general fund inventory are recorded as an expenditure when consumed rather than when purchased. Inventory of the Tax Collector, included in the general fund, represents postage. NOTE 4—PENSION PLAN Florida Retirement System Plan Description: The Tax Collector's employees participate in the Florida Retirement System (FRS), a cost-sharing, multiple-employer public employee retirement system, administered by the Florida Department of Management Services (DMS). Benefit provisions are established and may be amended by state statute. A financial report is available from the DMS website at www.dms.myflorida.com or by mail at Florida Division of Retirement, PO Box 9000, Tallahassee,FL 32315-9000. 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, 2015 were: regular class 7.26%, senior class 21.43%, DROP class 12.88%, and elected official class 42.27%. Included in these rates is a health insurance subsidy of 1.66%. 409 Indian River County, Florida Tax Collector Notes To Financial Statements Year Ended September 30, 2015 NOTE 4—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. Benefits Provided: 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 the County-wide note on pension plans. Contributions: Employer contributions to the FRS are based on a percentage of covered payroll that has been actuarially determined as an amount, when combined with employee contributions, is expected to finance the cost of benefits earned by employees during the year with an additional amount to finance any unfunded accrued liability. For the year ended September 30, 2015, the Tax Collector's actuarial contributions to FRS under the Pension Plan were $176,804 and the HIS Program were $22,837. Employee contributions were $48,835. Both employer and employee contributions were equal to 100% of the required contribution for each year. Pension Liabilities: At September 30, 2015, the Division of Retirement calculated the Tax Collector's liability of$959,301 for the FRS plan and $568,329 for the Health Insurance Subsidy (HIS) Program, for a total of$1,527,630 for its proportionate share of the net pension liability. The net pension liability was measured as of June 30, 2015 and the total pension liability used to calculate the net pension liability was determined by an actuarial valuation as of July 1, 2015. The Tax Collector's proportion of the net pension liability was based on a projection of the Tax Collector's long-term share of contributions to the pension plan relative to the projected contributions of all participating employers, actuarially determined. At September 30, 2015, the Tax Collector's proportion was .007427% for the FRS pension plan and .005573% for the HIS Program. 410 Indian River County, Florida Tax Collector Notes To Financial Statements Year Ended September 30, 2015 NOTE 4—PENSION PLAN- Continued Florida Retirement System - Continued Discount Rate for Pension Plan: The discount rate used to measure the total pension liability was 7.65%. The projection of cash flows used to determine the discount rate assumed that plan member contributions will be made at the current contribution rate and that the Tax Collector's contributions will be made statutorily required rates, actuarially determined. Based on those assumptions, the pension plans' fiduciary net position was projected to be available to make all projected future benefit payments of current active and inactive employees. Therefore, the long-term expected rate of return on pension plan investments was applied to all periods of projected benefit payments to determine the total pension liability. Sensitivity of the Tax Collector's Proportionate Share of the Net Position Liability to Changes in the Discount Rate for the Pension Plan: The following presents the Tax Collector's proportionate share of the NPL (net pension liability) of the pension plan calculated using the discount rate of 7.65%. Also presented is what the Tax Collector's proportionate share of the FRS plan NPL would be if it were calculated using a discount rate that is 1% lower or 1%higher than the current rate: Current Discount 1% Decrease (6.65%) Rate (7.65%) 1%Increase (8.65%) Clerk's proportionate share of NPL $ 2,485,767 $ 959,301 $ (310,969) Discount rate for the HIS Program: In general, the discount rate for calculating the pension liability is equal to the single rate equivalent to discounting at the long-term expected rate of return for benefit payments prior to the projected depletion date. Because the HIS Program is essentially funded on a pay- as-you-go basis, the depletion date is considered to be immediate. The single equivalent discount rate is equal to the municipal bond rate selected by the plan sponsor. The Bond Buyer General Obligation 20- Bond Municipal Bond Index was adopted as the applicable municipal bond index. Sensitivity of the Tax Collector's Proportionate Share of the Net Position Liability to Changes in the Discount Rate,for the HIS Program: The following presents the Tax Collector's proportionate share of the NPL (net pension liability) of the HIS Program calculated using the discount rate of 3.80%. Also presented is what the Tax Collector's proportionate share of the HIS Program NPL would be if it were calculated using a discount rate that is 1% lower or 1%higher than the current rate: Current Discount 1% Decrease (2.80%) Rate (3.80%) 1%Increase (4.80%) Clerk's proportionate share of NPL $ 647,585 $ 568,329 $ 502,242 411. Indian River County, Florida Tax Collector Notes To Financial Statements Year Ended September 30, 2015 NOTE 4—PENSION PLAN- Continued Florida Retirement System - Continued Refer to the County-wide note for actuarial assumptions (including the investment rate of return), pension liability on financial statements, and an explanation of pension expense components. The pension liability is not reported in the financial statements of the Tax Collector since they are not payable from available spendable resources. It is reported in the financial statements of the County by the fund which normally pays the personnel service costs of the employee. NOTE 5—OTHER POSTEMPLOYMENT BENEFITS The Tax Collector participated in the Indian River County Other Postemployment Benefits Trust (IRCOT). The Tax Collector paid their 2015. annual contribution of$74,070 which was their part of the total contribution determined by the IRCOT actuary. Further information on the IRCOT can be found in the County-wide financial statements and County notes. NOTE 6—RISK MANAGEMENT Indian River County maintains a risk management program that provides for coverage of risks of loss related to torts, theft of, damage to and destruction of assets, errors or omissions, injuries to employees, natural disasters, and medical and life insurance coverage for employees and their eligible dependents. Various excess catastrophe insurance policies with a commercial carrier are also in force for claims exceeding the amount chargeable against the Self Insurance Fund. The Tax Collector participated in the County's self-insurance program during fiscal year 2015 at an annual cost of approximately $246,990. Further details of this self-insurance program are discussed in the risk management note in the County- wide financial statements. NOTE 7—LONG-TERM LIABILITIES Changes in Long-Term Liabilities The following is a schedule of changes in long-term liabilities as of September 30, 2015: Beginning Ending Balance Balance 10/01/14 Additions Deletions 09/30/15 Accrued Compensated Absences $ 120,018 $ 31,854 $ 41,321 $ 110,551 Of the $1.1.0,551 liability for accrued compensated absences, management estimates that$1.3,748 will be due and payable within one year. The long-term liabilities are not reported in the financial statements of the Tax Collector since they are not payable from available spendable resources. They are reported in the financial statements of the County. 41.2 Indian River County, Florida Tax Collector Notes To Financial Statements Year Ended September 30, 2015 NOTE 8—OPERATING LEASES The Tax Collector has entered into noncancelable operating leases as lessee for office space and office equipment. Lease expenditures totaled$115,412 for the fiscal year ended September 30, 2015.. The following is a schedule by years of minimum future rentals to be paid by the Tax Collector for noncancelable operating leases as of September 30: Year Amount 2016 $ 100,921 2017 2,352 2018. 2,352 Total future minimum lease payments $ 105,625 413 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 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 May 25, 2016 The Honorable Carole Jean Jordan Tax Collector Indian River County, Florida We have audited, in accordance with the auditing standards generally accepted in the United States of America and the standards applicable to financial statements contained in Government Auditing Standards issued by the Comptroller General of the United States, 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, 2015, which collectively comprise the Tax Collector' fund financial statements and have issued our report thereon dated May 25, 2016. Internal Control over Financial Reporting In planning and performing our audit of the financial statements, we considered the Tax Collector' internal control over financial reporting (internal control) to determine the audit procedures that are appropriate in the circumstances 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 Tax Collector' internal control. Accordingly, we do not express an opinion on the effectiveness of the Tax Collector' internal control. 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 a combination of deficiencies, in internal control such that there is a reasonable possibility that a material misstatement of the entity's financial statements will not be prevented, or detected and corrected on a timely basis. A significant deficiency is a deficiency, or a combination of deficiencies, in internal control that is less severe than a material weakness, yet important enough to merit attention by those charged with governance. Our consideration of internal control 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 material weaknesses or significant deficiencies. Given these limitations, during our audit we did not identify any deficiencies in internal control that we consider to be material weaknesses. However, material weaknesses may exist that have not been identified. Compliance and Other Matters As part of obtaining reasonable assurance about whether the Tax Collector's financial statements are free of material misstatement, we performed tests of its compliance with certain provisions of laws, regulations, contracts, and grant agreements, noncompliance with which could have a direct and Rebmann is an independent member of Nexia International. CPAs&Consultants Wealth Advisors Corporate Investigators � i\T I?.R.NAIlO 11L 414 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. Purpose of this Report The purpose of this report is solely to describe the scope of our testing of internal control and compliance and the results of that testing, and not to provide an opinion on the effectiveness of the Tax Collector's internal control or on compliance. This report is an integral part of an audit performed in accordance with Government Auditing Standards in considering the entity's internal control and compliance. Accordingly, this communication is not suitable for any other purpose. 4"41X r4410— LLC 415 Re h m a n n Rebmann Robson 5070 North Highway A1A Suite 250 Vero Beach,FL 32963 Ph: 772.234.8484 Fx: 772.234.8488 rehmann.com MANAGEMENT LETTER May 25, 2016 The Honorable Carole Jean Jordan Tax Collector Indian River County, Florida Report on the Financial Statements 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, 2015, which collectively comprise the Tax Collector's fund financial statements and have issued our report thereon dated May 25, 2016. Auditor's Responsibility 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. Other Reports and Schedule 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; and Independent Accountants' Report on an examination conducted in accordance with AICPA Professional Standards, Section 601, regarding compliance requirements in accordance with Chapter 10.550, Rules of the Auditor General. Disclosures in those reports, which are dated May 25, 2016, should be considered in conjunction with this management letter. Prior Audit Findings 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. Official Title and Legal Authority Section 10.554(1)(i)4., 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. Rebmann is an independent member of Nexia International. CPAs&Consultants Wealth Advisors Corporate Investigators � I I TF P..N AT iO NAS. 416 Other Matters Section 10.554(1)(i)2., Rules of the Auditor General, requires that we address in the management letter any recommendations to improve financial management. In connection with our audit, we did not have any such recommendations. Section 10.554(1)(i)3., Rules of the Auditor General, requires that we address noncompliance with 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 which warrants the attention of those charged with governance. In connection with our audit, we did not have any such findings. Purpose of this Letter 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 granting agencies, and applicable management and is not intended to be and should not be used by anyone other than these specified parties. 4444�t r4w)4- LLC 417 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 rehmann.com INDEPENDENT ACCOUNTANTS' REPORT May 25, 2016 The Honorable Carole Jean Jordan Tax Collector Indian River County, Florida We have examined the compliance of Indian River County, Florida Tax Collector (the "Tax Collector") with Section 218.415, Florida Statutes, during the year ended September 30, 2015. Management is responsible for compliance with those requirements. Our responsibility is to express an opinion on the Tax Collector's compliance based on our examination. Our examination was conducted in accordance with attestation standards established by the American Institute of Certified Public Accountants and, accordingly, includes examining, on a test basis, evidence about the Tax Collector's compliance with those requirements and performing such other procedures as we considered necessary in the circumstances. We believe that our examination provides a reasonable basis for our opinion. Our examination does not provide a legal determination on the Tax Collector's compliance with specified requirements. In our opinion, the Tax Collector complied, in all material respects, with the aforementioned requirements for the year ended September 30, 2015. This report is intended solely for the information and use of management, the Tax Collector, the Board of County Commissioners and the Florida Auditor General and is not intended to be and should not be used by anyone other than these specified parties. 449-el rL410— LLC Rebmann is an independent member of Nexia International. CPAs&Consultants Wealth Advisors Corporate Investigators � I IT,R AT I{?^IAL 418