HomeMy Public PortalAbout19-9700 Approving the Completed 2016-2017 AuditSponsored by: City Manager
RESOLUTION NO.19-9700
A RESOLUTION OF THE CITY COMMISSION OF THE CITY OF
OPA-LOCKA, FLORIDA, APPROVING THE COMPLETED 2016-
2017 AUDITED FINANCIAL STATEMENT THAT WAS
PREVIOUSLY PRESENTED TO THE CITY COMMISSION;
PROVIDING FOR INCORPORATION OF RECITALS;
PROVIDING FOR AN EFFECTIVE DATE.
WHEREAS, the 2016-2017 audited financial statement was previously presented
to the City Commission; and
WHEREAS, pursuant to Section 218.39, Florida Statutes, a local government
entity shall prepare an annual financial audit of its accounts and records completed for
its fiscal year by an independent certified public accountant; and
WHEREAS, the City Commission finds that it is in the best interest of the City
Commission to approve the presented 2016-2017 audited financial statement.
NOW, THEREFORE, BE IT DULY RESOLVED BY THE CITY COMMISSION
OF THE CITY OF OPA-LOCKA, FLORIDA:
Section 1. Recitals Adopted
The recitals to the preamble are hereby incorporated by reference.
Section 2. Authorization
The City Commission hereby approves the 2016-2017 audited financial statement that
was previously presented to the City Commission by the City Manager.
Section 3. Scrivener's Errors
Sections of this . Resolution may be renumbered or re -lettered and corrections of
typographical errors which do not affect the intent may be authorized by the City
Manager or the City Manager's designee, without the need of a public hearing, by filing
a corrected copy of same with the City Clerk.
Section 4. Effective Date
This Resolution shall take effect immediately upon adoption and is subject to the
approval of the Governor or his designee.
PASSED AND ADOPTED this 30th day of September, 2019.
Resolution No. 19-9700
MATTHEW PIGATT, MAYOR
Attest to: Approved as to form and legal sufficiency:
Joy a Flores Bur a Norrieeks, P.A.
C1 Clerk Cit A orney
Moved by: Commissioner Kelley
Seconded by: Commissioner Burke
VOTE: 5-0
Commissioner Bass YES
Commissioner Burke YES
Commissioner Kelley YES
Vice -Mayor Davis YES
Mayor Pigatt YES
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City of Opa-Locka
Agenda Cover Memo
Department
Director:
Department
Director Signature:
Finance Director:
Newall J. Daughtrey, City Manager
(Finance Department Designee)
FD Signature:
Department
ACM Signature:\Ii\g„,w
,.
City Manager:
Newall J. Daughtrey
Commission
Meeting Date:
09.25.19
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Strategic Plan Priority Area:
Enhance Organizational mi
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Short Title:
A resolution of the City Commission of the City of Opa-locka, Florida approving the audited financial
statement in accordance with Florida Statute 218.39.
Staff Summary:
The City of Opa-locka approves the audited financial statements for the fiscal year ended September 30,
2017. Exhibit A represents the Audited Financial Statements for fiscal year 2016-2017.
Proposed Action:
Staff recommends approval.
Attachment:
City of Opa-locka, Florida
Annual Financial Report
For the Fiscal Year Ended
September 30, 2017
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4,401A.
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The City of Opa-locka
Mission Statement
The Mission of the City of Opa-locka is to enhance the quality
of life, environment, and safety of our customers and employees
in an atmosphere of courtesy, integrity, and quality service.
CITY OF OPA-LOCKA, FLORIDA
ANNUAL FINANCIAL REPORT
FOR THE FISCAL YEAR ENDED
SEPTEMBER 30, 2017
TABLE OF CONTENTS
PAGE
. INTRODUCTORY SECTION
Letter of Transmittal
List of Principals iv
Organizational Chart iv
II. FINANCIAL SECTION
INDEPENDENT AUDITORS' REPORT
MANAGEMENT'S DISCUSSION AND ANALYSIS (Required Supplementary Information)
1-3
4-15
BASIC FINANCIAL STATEMENTS:
Government -wide Financial Statements
Statement of Net Position 16
Statement of Activities 17
Fund Financial Statements:
Balance Sheet — Governmental Funds 18
Reconciliation of the Balance Sheet Governmental Funds to the Statement of Net Position 19
Statement of Revenues, Expenditures and Changes in Fund Balances —Governmental Funds 20
Reconciliation of the Balance Sheet to the Statement of Net Position —Governmental Funds 21
Statement of Net Position -Proprietary Funds 22
Statement of Revenues, Expenses and Changes in Net Position —Proprietary Funds 23
Statement of Cash Flows -Proprietary Funds 24
Notes to Basic Financial Statements 25-61
REQUIRED SUPPLEMENTARY INFORMATION (OTHER THAN MD&A):
Schedule of Revenues, Expenditures, and Changes in Fund Balances -Budget and Actual:
General Fund 62
People's Transportation Tax Fund 63
Capital Improvement Debt Service 64
Notes to Budgetary Comparison Schedule 65
Schedule of the City's Proportionate Share of the Net Pension Liability —
Florida Retirement System Pension Plan 66
Schedule of the City's Contributions — Florida Retirement System Pension Plan 67
Schedule of the City's Proportionate Share of the Net Pension Liability —
Health Insurance Subsidy Pension Plan 68
Schedule of the City's Contributions — Health Insurance Subsidy Pension Plan 69
CITY OF OPA-LOCKA, FLORIDA
ANNUAL FINANCIAL REPORT
FOR THE FISCAL YEAR ENDED
SEPTEMBER 30, 2017
TABLE OF CONTENTS
II. FINANCIAL SECTION (Continued)
OTHER SUPPLEMENTARY INFORMATION:
Combining and Individual Fund Statements
Combining Balance Sheet - Non -Major Governmental Funds 70
Combining Statement of Revenues, Expenditures, and Changes in Fund Balance — Non -Major
Governmental Funds 71
Combining Statement of Net Position Balances - Non -Major Enterprise Funds 72
Combining Statement of Revenues, Expenditures, and Changes in Fund Balance — Non -Major
Enterprise Fund 73
Combining Statement of Cash Flows - Non -Major Enterprise Fund 74
III. COMPLIANCE SECTION
PAGE
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 75-76
Schedule of Findings and Questioned Costs 77-96
Management Letter in Accordance with the Rules of the Auditor General of the State of Florida 97-98
Independent Accountant's Report on Compliance with Requirements of
Section 218.415, Florida Statutes 99
Newall J. Daughtrey
Acting City Manager
September 25, 2019
Telephone: (305) 953-2821
Email: njdaughtrey@opalockafl.gov
opalockafl.gov
To the Citizens, the Honorable Mayor, Vice Mayor, City Commissioners, City Manager and Assistant City
Manager of the City of Opa-locka:
It is my pleasure to submit the Audited Financial Report for the City of Opa-locka, Florida, for the fiscal year
ended September 30, 2017, pursuant to Section 218.39 of the Florida Statutes, Chapter 10.550 of the Rules of
the Auditor General of the State of Florida and the City Charter. The financial statements included in this
report conform to accounting principles generally accepted in the United States of America prescribed by the
Governmental Accounting Standards Board (GASB). This report is published to fulfill that requirement for
the fiscal year ended September 30, 2017.
Management assumes full responsibility for the completeness and reliability of the information contained in
this report, based upon a framework of internal controls that it has established for this purpose. Because the
cost of internal control should not exceed anticipated benefits, the objective is to provide reasonable, rather
than absolute assurance that the financial statements are free of any material misstatements.
The financial statements have been audited by Anthony Brunson, P.A., a firm of licensed certified public
accountants. The independent auditors have disclaimed an opinion on the City's financial statements for the
year ended September 30, 2017. The independent auditors' report is located at the front of the financial
section of the report.
The Management's Discussion and Analysis (MD&A) segment immediately follows the independent
auditor's report and provides narrative introduction, overview and analysis of the basic financial statements.
The MD&A complements this letter of transmittal and should be read in conjunction with it.
Profile of the Government
The City ofOpa-locka was incorporated in 1926 and operates under the Commission/City Manager form of
government. The City Commission is comprised of the Mayor, Vice Mayor and three Commissioners, who are
responsible for enacting ordinances, resolutions and regulations governing the City and appointing the
members of various advisory boards. Additionally, the City Commission appoints the City Manager, the City
Attorney and the City Clerk. As Chief Administrative Officer, the City Manager is responsible for the
enforcement of laws and ordinances and the appointment and supervision of the City's Department heads.
The City provides a frill range of services including police, construction and maintenance of highways and
streets and other infrastructure, recreational and cultural activities, water and wastewater, storm water,
sanitation, planning and zoning and general administrative services.
For additional services concerning our City, please visit our website at www.opalockafl.gov.
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The financial reporting entity under which the financial statements are prepared includes all activities and
functions for which the City is financially accountable.
The City is required to prepare, approve, adopt and execute an annual budget. This annual budget serves as
the foundation for the City's financial planning and control. Budgetary control is maintained at the
departmental and fund level, with the finance department providing support to departments in the
administration of their budgets. Budget to actual comparisons are provided in this report for all of the City's
funds that have an appropriated annual budget.
Local Economy
The City of Opa-locka comprises approximately 4.5 square miles and has a population of approximately
16,000 residents. It is located in the northern portion of Miami -Dade County. The City is a mix of residential,
commercial and industrial zones including the Opa-locka Airport, which is owned and operated by Miami -
Dade County. The City of Opa-locka community is served by two elementary schools.
Major Initiatives
On June 1, 2016, the City of Opa-locka City Commission adopted a Resolution to request a declaration that
the City is in a state of financial emergency, and to seek the appointment of a financial emergency board and
other assistance pursuant to section 218.503 (1), Florida Statutes. The State of Florida, Office of the
Governor, issued Executive Order 16-135, signed by Florida Governor, Rick Scott.
Acknowledgements
The Finance Department, City Manager, Assistant City Manager, Directors and Staff Members all contributed
to the preparation of this report. We would also like to express our appreciation for the leadership of the
Mayor, Vice Mayor and Commissioners.
Respectfully,
Newall J. D ughtrey
City Manager
ii
CITY OF OPA-LOCKA, FLORIDA
Joseph L. Kelley
Commissioner
John Riley
Commissioner
LIST OF PRINCIPAL OFFICIALS
CITY COIVI IISSION
Myra L. Taylor
Mayor
CITY EXECUTIVE MANAGEMENT
Ed Brown
City Manager
Joanna Flores
City Clerk
Vincent Brown
City Attorney
iii
Timothy Holmes
Vice -Mayor
Matthew Pigatt
Commissioner
t
CITY OF OPA-LOCKA, FLORIDA
ORGANIZATIONAL CHART
Mayor and
City Commission
Citizens
City Attomey
City Manager
City Clerk
Finance
Department
Human
Resources
Information
Technology
Community
Development
Code
id Enforcement
Police
Department
Building and
Licenses
Capital
Improvement
Projects
Public Works &
Utilities
Parks and
Recreation
Boards &
Committees
Community
Redevelopment
Agency (CRA)
1V
FINANCIAL SECTION
ANTHONY BRUNSON P.A.
CERTIFIED PUBLIC ACCOUNTANTS & BUSINESS ADVISORS
INDEPENDENT AUDITORS' REPORT
To the Honorable Mayor and Members of the City Council
City of Opa-locka, Florida
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 the City of Opa-locks, Florida,
(the "City") as of and for the year ended September 30, 2017, and the related notes to the financial
statements, which collectively comprise the City'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 fmancial 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.
Auditor's 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. Those
standards require that we plan and perform the audit to obtain reasonable assurance about whether the
financial statements are free from 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 auditor's 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
unmodified and qualified audit opinions.
Basis for Qualified Opinion on these Financial Statements
As discussed in Note 1, we were unable to obtain sufficient appropriate audit evidence on the City's physical
existence of capital asset balances. Accounting principles generally accepted in the United States of
America pertaining to capital assets requires evidence of their existence and that assets are reported at the
proper amounts.
Miramar Office
3350 SW 148th Avenue I Suite 110
Miramar, Florida 33027
(954) 874-1721
info@abcpasolutions.com
Miami Office
801 Brickell Avenue I Suite 900
Miami, Florida 33131
(305) 789-6673
Summary of Opinions
Opinion Unit
Governmental Activities
Business -type Activities
General Fund
People's Transportation Tax
Capital Projects Improvement Debt Service
Water and Sewer Fund
Solid Waste
Aggregate Remaining Enterprise Fund
Aggregate Remaining Governmental Fund Information
Type of Opinion
Qualified
Qualified
Unmodified
Unmodified
Unmodified
Qualified
Unmodified
Qualified
Unmodified
The amounts by which sufficient appropriate audit evidence could not be obtained would affect the assets,
and net position of the government activities, business -type activities and enterprise fund has not been
determined.
Qualified Opinion
In our opinion, except for the effects of the matters described in the "Basis for Qualified Opinion on these
Financial Statements" paragraph, the financial statements referred to above present fairly, in all material
respects, the fmancial position of the City of Opa-locka, Florida as of September 30, 2017, and the changes
in financial position thereof for the year then ended in accordance with accounting principles generally
accepted in the United States of America.
Other Matters
Required Supplementary Information
Accounting principles generally accepted in the United States of America require that the management's
discussion and analysis on pages 4 through 15, budgetary comparison information, schedules of the
proportionate share of net pension liability, and schedules of employer contributions on pages 62 through
69 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 fmancial 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 engagement was for the purpose of forming opinions on the financial statements that collectively
comprise the basic financial statements of the City of Opa-locka, Florida. The introductory section,
combining and individual nonmajor fund financial statements are presented for purposes of additional
analysis and are not a required part of the basic financial statements.
The combining and individual nonmajor fund financial statements 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 fmancial
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, except for these effects on
the Supplementary Information of the qualified opinion on the financial statements as explained in the
"Basis for Qualified Opinion on these Financial Statements" paragraph the combining and individual
nonmaj or fund financial statements, are fairly stated in all material respects, in relation to the basic financial
statements as a whole.
The introductory 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 September 25,
2019, on our consideration of the City'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 solely to describe the scope of our testing of internal control over financial
reporting and compliance and the results of that testing, and not to provide an opinion on the effectiveness
of the City's 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 City's internal
control over financial reporting and compliance.
September 25, 2019
MANAGEMENT'S DISCUSSION AND ANALYSIS
(MD&A)
CITY OF OPA-LOCKA, FLORIDA
MANAGEMENT'S DISCUSSION AND ANALYSIS
FISCAL YEAR ENDED SEPTEMBER 30, 2017
OVERVIEW OF THE FINANCIAL STATEMENTS
The City of Opa-locka's Management Discussion and Analysis (MD&A) is designed to provide an objective
and easy to read analysis of the City's financial activities based on currently known facts, decisions, or
conditions. It is intended to provide a broad overview on short-term and long-term analyses of the City's
activities based on information presented in the financial report and fiscal policies that have been adopted by
the City. Specifically, this section is designed to assist the reader in focusing on significant financial issues,
provide an overview of the City's financial activity, identify changes in the City's financial position (its ability
to address the next and subsequent year challenges), identify any material deviations from the financial plan
(the approved budget), and identify individual fund issues or concerns. The information contained within this
section should be considered only a part of a greater whole of information on the City's fmancial status.
FINANCIAL HIGHLIGHTS
1. The assets and deferred outflows of resources of the City exceeded its liabilities at the close of the
most recent fiscal year by $8.1 million (net position).
2. The City's total net position increased $124,830 or 1.6% resulting from current City operations.
3. The City's governmental -type activities reported net position of $6.9 million represents a $2 million
or 41% increase, in comparison to the prior year net position of $4.9 million.
4. The City's business -type activities reported net position of $1.2 million, represents a $1,893,355
decrease, or 60.9%, in comparison to the prior year net position of $3.1 million.
5. At the end of the fiscal year, the Governmental Fund reported a fund balance of $4.6 million, of this
balance a negative ($488,748) is unassigned general fund.
6. The City's total debt outstanding for governmental activities decreased by approximately $1.03
million, or 3% during the current fiscal year. This decrease is attributed to a decrease in FRS pension
liability, long term debt, compensated absences and accounts payable and accrued liabilities.
7. The total debt outstanding for the City's business -type activities increased by $1.28 million, or 8%.
This reduction is mostly attributable to an increase in long term debt, customer deposits and
accounts payable and accrued liabilities.
Overview of the Financial Statements
GASB Statement 34 represented a monumental change from the way in which government financial
statements are recorded and presented. It provided for the first time a concise "entity -wide" Statement of
Net Position and Statement of Activities, providing the user of the financial statements a combined
overview of the City's financial position and result of operations, eliminating interfund activities and "other
people's money" such as pension funds, which can mislead users when incorporated in a combined manner.
The Government -Wide Financial Statements also differentiate between Governmental and Business -Type
Activities, further assisting the reader in their evaluation.
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CITY OF OPA-LOCKA, FLORIDA
MANAGEMENT'S DISCUSSION AND ANALYSIS
FISCAL YEAR ENDED SEPTEMBER 30, 2017
The reporting model requires the use of accrual accounting (which focuses on economic resources) at the
topmost level, while maintaining modified accrual accounting (which focuses on current financial
resources —budgeted resources) at the individual fund level. This was an important change in governmental
accounting. The impact of long-term financial decisions is accurately matched to the period in which the
expense or revenue is attributed. A good example of this is the recording of compensated absences such as
vacation time. Previously, this time was "expensed" as paid, not when earned. As a result, employees could
accruehundreds or thousands of hours in the past without that expense being attributed to the taxpayers
who benefited from those employees' services. Once the employees separate from the City it is future
taxpayers who will bear the financial liability, but would not benefit from those employees' services. This
is but one of many examples of "expenses" that have traditionally not been matched to the period of benefit.
Users interested in "budgetary performance" will find that information available in the required
supplementary information and other financial information following the notes to the financial statements.
An overview discussion of the different sections of this reporting model follows.
GOVERNMENT -WIDE FINANCIAL STATEMENTS
The government -wide financial statements consist of a Statement of Net Position and a Statement of
Activities. Both statements represent an overview of the City as a whole, separating its operations between
governmental and business -type activities. All information is presented utilizing the economic resources
measurement focus and accrual basis of accounting. This method better matches revenues and expenses to
the period in which the revenues are earned and the expenses attributed.
The Statement of Net Position (the "Unrestricted Net Position") is designed to be similar to a bottom line
for the City and its governmental and business -type activities. This statement combines and consolidates
governmental fund's current financial resources (short-term spendable resources) with capital assets and
long-term obligations. It presents information on all the City's assets and deferred outflows of resources,
on one hand; liabilities and deferred inflows of resources on the other hand; the difference between them,
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 City is improving or deteriorating.
The Statement of Activities is focused on both the gross and net cost of various activities (including
governmental, business -type and component unit), which are provided by the government's general tax and
program revenues. This is intended to summarize and simplify the user's analysis of the cost of various
governmental services and the local taxing efforts necessary to sustain each of those activities.
Both of the government -wide financial statements distinguish functions of the City that are principally
supported by taxes, charges for services, 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 City include general government,
public safety, transportation, cultural and recreational. The business -type activities include water and sewer,
solid waste and stormwater, where the fee for service typically covers all or most of the cost of operations
and depreciation.
The government -wide financial statements can be found on pages 16-17 of this report.
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CITY OF OPA-LOCKA, FLORIDA
MANAGEMENT'S DISCUSSION AND ANALYSIS
FISCAL YEAR ENDED SEPTEMBER 30, 2017
FUND FINANCIAL STATEMENTS
Unlike government -wide financial statements, the focus of fund financial statements is directed to specific
activities of the City rather than the City as a whole. Except for the General Fund, separate funds are
established to maintain control over resources that have been segregated for specific activities or objectives.
The City, 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 City can be divided into two
categories: governmental funds and proprietary funds.
GOVERNMENTAL FUNDS
Governmental funds are used to account for essentially the same functions reported as governmental
activities in 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 financing requirements.
Because the focus of governmental funds is narrower than that of the government -wide fmancial statements,
it is useful to compare the information presented for the governmental funds with similar information
presented for the governmental activities in the government -wide fmancial statements. By doing so, readers
may better understand the long-term impact of the government's near -term financing 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 the comparison between governmental funds
and governmental activities.
The City maintains 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
balance for the General Fund, which is considered to be a major fund. The CIP Bonds 2011 and 2015 Fund
were established to account for the proceeds of the 2011 and 2015 debt issuance and are part of the Debt
Service Fund and presented as a major fund. The City presents data from all other governmental funds in a
single column (non -major funds). Individual fund data for each of these non -major governmental funds are
included in the combining statements.
The City adopts an annual appropriated budget for its governmental funds. Budgetary comparison schedules
have been provided for all the governmental funds to demonstrate compliance with the funds' budgets.
The basic governmental fund financial statements can be found on pages 18-21 of this report.
6
CITY OF OPA-LOCKA, FLORIDA
MANAGEMENT'S DISCUSSION AND ANALYSIS
FISCAL YEAR ENDED SEPTEMBER 30, 2017
PROPRIETARY FUNDS
Proprietary fund financial statements consist of a statement of net position, a statement of revenues,
expenses, and changes in fund net position and a statement of cash flows. These statements are prepared on
an accounting basis that is similar to the basis used to prepare the government -wide financial statements.
For financial reporting purposes, proprietary funds are grouped into Enterprise Funds.
The City uses Enterprise Funds to account for business -type activities that charge fees to customers for the
use of specific goods or services. These funds are used to report the same functions presented as business -
type activities in the government -wide financial statements.
Proprietary funds provide the same type of information as the government -wide financial statements, only
in more detail. The City has three Enterprise Funds; the Water and Sewer Fund, Solid Waste and
Stormwater Fund. A statement of cash flows is presented at the fund financial statement level for the
proprietary funds.
The basic propriety fund financial statements can be found on pages 22-24 of this report.
ANALYSIS OF THE OVERALL FINANCIAL POSITION AND RESULTS OF
OPERATIONS
When evaluating the financial position and short-term financial performance of the City, two tools are
particularly valuable: The Statement of Net Position and the Statement of Activities. It is useful for the user to
compare the current year with the prior year. This aids in spotting trends and other areas of concern or
interest. For ease of relative comparisons, we include the percent change from one year to another (See
below).
NOTES TO THE BASIC FINANCIAL STATEMENTS
Notes to the Financial Statements. The notes provide additional information that is necessary to acquire 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 25 - 61 of this report.
OTHER INFORMATION
In addition to the basic financial statements and accompanying notes, this report also presents certain required
supplementary information (RSI) concerning the City's progress in funding its obligation to provide pension
and other post -employment benefits to its employees. This section also includes a comparison between the
City's General Fund adopted and final budget and actual financial results. A budgetary comparison schedule
has been provided for the General Fund to demonstrate compliance with this budget. The City also adopts an
annual appropriated budget for each of its other governmental funds which are presented as supplementary
information.
Combining statements referred to earlier in connection with non -major governmental funds are presented
immediately following the Required Supplemental Information.
7
CITY OF OPA-LOCKA, FLORIDA
MANAGEMENT'S DISCUSSION AND ANALYSIS
FISCAL YEAR ENDED SEPTEMBER 30, 2017
GOVERNMENT -WIDE FINANCIAL ANALYSIS
The following schedule is a summary of the fiscal year 2017 Statement of Net Position with comparative
information for fiscal year 2016.
Net Position - Government -wide
Current and other assets
Capital assets, net
Total assets
Deferred outflow of resources
Current and other liabilities
Long-term liabilities
Total liabilities
Deferred inflow of resources
Net assets:
Invested in capital assets, net
of related debt
Restricted
Unrestricted
Total net assets
Governmental
Activities
Business -type
Activities
Total
2017 2016 Chance 2017 2016 Change 2017 2016 Chance
$ 8,844,497 $ 4,978,533 78% $ 6,114,543 $ 5,749,609 6% $ 14,959,040 $ 10,728,142 39%
26,109,456 27,008,147 -3% 11,809,514 12,516,799 -6% 37,918,970 39,524,946
-4%
34,953,953 31.986,680 9% 17,924.057 18,266,408 -1.9% 52.878.010 50,253,088 5%
3,840,956 5,822,004 -34% 523,767 793,909 -34% 4,364,723 6.615,913 -34%
5,110,294 4,486,348 14% 5,394,687 9,502,595
24,512,362 26,376.945 -7% 11,528,511 6,168,197
29,622,656 30,863,293 -4% 16,923,197 15,670,790
2,247,949 2,039,273 10% 306,539 278,083
-43%
10,504,981 13,988,941 -25%
87% 36,040,873 32,545,141 11%
8% 46,545,853 46.534,083 0%
10% 2.554.488 2.317,356 10%
12,497,766 12,894,007 -3% 1,106,209 7,703,308 -86% 13,603,975 20,597,315 -34%
3,298,639 3,298,639 0% - 0.0% 3,298,639 3,298,639 0%
(8,872,101) (11,286,527) 21% 111,879 (4,591,865) 102% (8,760.222) (15,878.392) 45%
R 6,924304 $ 4906,119 41% $ 1,218,088 $ 3,111,443 -61% $ 8,142,392 $ 8,017,5G 2%
STATEMENT OF NET POSITION
The overall net position of the City increased in fiscal year 2017, from the prior year net position, by
approximately $124,830 or 1.6%. In 2016, net position was $8.0 million and has increased to $8.1 million
in 2017, slight changes in net position over time can be one of the best and most useful indicators of financial
health. This change in net position is the result of increased improvement of the City's operations.
The governmental activities of the City's current and other assets increased by 78% while the current
liability of those activities increased by 14%. The business -type activities of the City's current and other
assets increased by 6% while the current liability of those activities decreased by 43%. The decrease is
attributed to the reclassification of current liabilities to long-term debt related to monies due to Miami Dade
County, Water and Sewer Department.
8
CITY OF OPA-LOCKA, FLORIDA
MANAGEMENT'S DISCUSSION AND ANALYSIS
FISCAL YEAR ENDED SEPTEMBER 30, 2017
The governmental activities invested in capital assets decreased by $898,691 or 3.3% from the previous
year and unrestricted net position now stands at ($8.87) million, a decrease of $2.4 million or 21% from the
previous year.
The business -type activities invested in capital assets decreased by $707,285 or 6% and unrestricted net
position now stands at $111,879, compared to ($4.5) million in the prior year. This represents a 102%
decrease in unrestricted assets.
Five Years Total Net Assets
(in millions)
$30.0
$25.0
$20.0
$15.0
$10.0
$5.0
$-
Total Net Assets
$27.2
2013
$24.6
2014
$ 7.ti $8.0
2015
Fiscal Year
2016
$8.0
2017
By far the largest portion of the City's net position is investment in capital assets (e.g., land, buildings and
building improvements, and equipment); less any related debt used to acquire those assets that is still
outstanding. The City uses these capital assets to provide services to its citizens; however, these assets are
not available for future spending. Although the City's investment in its capital assets is reported 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.
9
CITY OF OPA-LOCKA, FLORIDA
MANAGEMENT'S DISCUSSION AND ANALYSIS
FISCAL YEAR ENDED SEPTEMBER 30, 2017
STATEMENT OF ACTIVITIES
The following schedule is a summary of the fiscal year 2017 Statement of Activities with comparative
information to fiscal year 2016:
Changes in Net Assets
Governmental Business -type
Activities Activities
Total
2017 2016 Change 2017 2016 Change 2017 2016 Change
Revenues:
Program revenues:
Charges for services $ 1,798,315 $ 1,985,270 -9% $ 9,328,761 $ 10,279,968 -9% $ 11,127,076 $ 12,265,238 -9%
Operating/capital grants and cont. 398,338 1,406,302 -72% 365,302 447,916 -18% 763,640 1,854,218 -59%
General revenues:
Property taxes 7,654,862 6,336,736 21% 0% 7,654,862 6,336,736 21%
Other taxes 2,308,003 2,191,444 5% 0% 2,308,003 2,191,444 5%
Franchise fees 1,355,702 1,130,688 20% - 0% 1,355,702 1,130,688 20%
Intergovernmental, unrestricted 1,891,134 2,338,805 -19% 0% 1,891,134 2,338,805 -19%
Unrestricted interest earnings 587 277 112% 0% 587 277 112%
Miscellaneous 1,739,788 2,145,867 -19% 0% 1,739,788 2,145,867 -19%
Transfers 381,243 2,830,858 -87% 0% 381,243 2,830,858 -87%
Debt proceeds 214.236 100% 0% 214,236 100%
Total revenues 17.742.208 20,366,247 -13% 9,694,063 10,727,884 -10% 27,436,271 31,094,131 -12%
Expenses and transfers:
General government 6,751,876 8,009,213 -16% 0% 6,751,876 8,009,213 -16%
Public safety 5,512,414 5,557,570 -1% 0% 5,512,414 5,557,570 -1%
Transportation 1,780,407 1,732,933 3% 0% 1,780,407 1,732,933 3%
Culture and recreation 537,294 1,406,397 -62% 0% 537,294 1,406,397 -62%
Interest and fiscal charges 490,299 485,047 1% 0% 490,299 485,047 1%
Water and sewer 0% 10,250,266 10,596,650 -3% 10,250,266 10,596,650 -3%
Stormwater 0% 1,215,121 512,133 137% 1,215,121 512,133 137%
Solid waste - 0% 423,594 996,874 -58% 423,594 996,874 -58%
Transfers 381,242 3,058,301 -88% 0% 381,242 3,058,301 -88%
Total expenses 15,453,532 20,249,461 -24% 11,888,981 12,105,657 -2% 27,342,513 32,355,118 -15%
Increase (decrease) in net positions 2,288,676 116,787 1860% (2,194,918) (1,377,7721 59% 93,758 (1,260,9871 -107%
Net positions, beginning as 4,906,119 3,906,484 26% 3,111,443 3,887,432 -20% 8,017,562 7,793,916 3%
previously stated
Prior period adjustment (270,4921 882,847 -131% 301,563 601,786 -50% 31,071 1,484,633 -98%
Net position, beginning as restated 4,635,627 4,789,331 -3% 3,413,006 4,489,218 -24% 8,048,633 9,278,549 -13%
Net positions, ending $ 6,924,301 $ 4,906,119 41% $ 1,218,088 $ 3,111,443 -61% $ 8,142,391$ 8,017,562 2%
The Statement of Activities reflects a 11.8% decrease in overall revenues compared to the prior year and
total expenses reflects a 15% decrease.
The governmental activities represent the most significant activity within the City, program revenues is more
than $17 million. Total overall decreased by 12.8% in governmental activities over the prior year due to a
decrease in general government services activities such as charge for services, and other areas such as grants
revenue, incoming transfers from the business type fund and other miscellaneous revenues as a result of the
City's financial conditions.
The business -type activities are water and sewer, solid waste and storm water operations which included a
decrease of $1,033,821 or 9.6% in total revenues. The decrease is due to a reduction in charge for services,
and grants.
- 10-
CITY OF OPA-LOCKA, FLORIDA
MANAGEMENT'S DISCUSSION AND ANALYSIS
FISCAL YEAR ENDED SEPTEMBER 30, 2017.
Sources of Revenue for Fiscal Year 2017
Fiscal Year 2017
BUSINESS -TYPE ACTIVITIES
• Revenues:
Program revenues:
Charges for services
® Operating/capital grants and cont.
a General revenues:
Property taxes
■ Other taxes
■ Franchise fees
■ Intergovernmental, unrestricted
■ Unrestricted interest earnings
■ Miscellaneous
a Transfers
The Business -type Activities are comprised of the Water and Sewer, Solid Waste and Stormwater Fund.
• The operating loss for the Water and Sewer is $2.1 million which is a decrease from the prior year
of $1.37 or 59%. The decrease was primarily the result of decreases in revenue coupled with
increases in costs associated with stormwater. Additionally, the business -type activities have not
been able to pursue grants for infrastructure projects and as a result the cost associated with these
projects has halted due to non -activity.
• The Solid Waste Fund activity is not being managed in house by the City.
FINANCIAL ANALYSIS OF THE CITY' S FUNDS
The City uses fund accounting to ensure and demonstrate compliance with finance -related legal
requirements.
Governmental Funds
The focus of the City's governmental funds is to provide information on near -term inflows, outflows and
balances of spendable resources. Such information is useful in assessing the City's funding requirements.
In particular, unassigned fund balance may serve as a useful measure of a government's net resources
available for spending at the end of the fiscal year.
- 11 -
CITY OF OPA-LOCKA, FLORIDA
MANAGEMENT'S DISCUSSION AND ANALYSIS
FISCAL YEAR ENDED SEPTEMBER 30, 2017
As of the end of fiscal year 2017, the City's governmental funds reported combined ending fund balance
of $4.6 million compared to $1.3 million in the prior year, an increase of $3.2 million in fund balance
compared to the prior year. Most of the fund balance is restricted to indicate that it is not available for new
spending because it has already been committed or restricted to 1) pay debt service $ 3.2 million, 2) pay
transportation $1.1 million 3) pay public safety $597,402 related debt. In addition, there are restrictions to
cash on hand being held as a result of the City's bonds with City National Bank.
General Fund
The General Fund is the chief operating fund of the City. At the end of the current fiscal year the total fund
balance equals a negative $1.6 million, a decrease of $1.4 million or 46.7% from the prior year.
Total revenues for the general fund decreased by $595,443, a 4.2% decrease in revenue related to a
combination of decreases in permits and fees, intergovernmental, other fmancing sources and revenues, etc.
A large source of state revenue sharing was withheld in both fiscal year ending September 30, 2016 and
September 30, 2017, as a result these funds were not available to the City in accordance with Section
218.63(2), Florida Statutes.
Revenue in the general fund is shown in the following schedule:
General Fund Revenues
Property
Utility service taxes
Communication service taxes
Local option, use and fuel taxes
Franchise fees
Local business taxes
Permits and fees
Intergovernmental
Charges for services
Fines and forfeitures
Interest
Other revenue
Other financing sources
Total Revenues
2017
Amount
$ 7,438,862
62,876
Percent
of Total
55%
1%
0%
302,792 2%
1,355,702 10%
254,399 2%
606,220 4%
63,370 1%
190,784 1%
1,001,311 7%
3 0%
1,633,892 12%
595,479 5%
$ 13,505,690
2016
Amount
$ 6,309,640
65,550
1,130,688
237,679
934,436
283,009
113,746
899,015
59
2,145,867
1,981,444
100% $ 14,101,133
Percent
of Total
45%
0%
0%
0%
8%
2%
7%
2%
1%
6%
0%
15%
14%
100%
Increase
(Decrease)
From 2016
$ 1,129,222
(2,674)
302,792
225,014
16,720
(328,216)
(219,639)
77,038
102,296
(56)
(511,975)
(1,385,965)
$ (595,443)
Percent
of Increase
(Decrease)
18%
-4%
0%
100%
20%
7%
-35%
-77%
68%
11%
-94%
-24%
-70%
4.2%
Total expenditures for the general fund decreased by $2.5 million, a 17
to significant decreases in the following; general government, public
culture and recreation, and reductions in transfer out. All major areas
due to decreases in revenue.
- 12-
.4% decrease in expenditures related
safety, transportation, debt service,
experienced a decrease in spending
CITY OF OPA-LOCKA, FLORIDA
MANAGEMENT'S DISCUSSION AND ANALYSIS
FISCAL YEAR ENDED SEPTEMBER 30, 2017
Expenditures in the general fund are shown in the following schedule:
Increase Percent
2017 Percent 2016 Percent (Decrease) of Increase
General Fund Expenditures Amount of Total Amount of Total From 2016 (Decrease)
General government $ 4,375,967 36% $ 5,443,770 37% $ (1,067,803) -20%
Public safety 5,511,828 45% 5,557,570 38% (45,742) -1%
Transportation 1,438,800 12% 1,543,865 10.7% (105,065) -17%
Culture and recreation 537,294 4% 794,473 5% (257,179) -32%
Debt service 154,186 1% 496,509 3.4% (342,323) -68%
Capital outlay 110,621 1% 0% 110,621 100%
Transfers 0% 849,414 5.9% (849,114) 0%
Total expenditures $ 12,128,696 100% $ 14,685,601 100% $ (2,556,605) -17.4%
Proprietary Funds
• The City's proprietary fund statements provide the same type of information found in the
government -wide fmancial statements, but in more detail. The unrestricted net position (deficit) of
the water and sewer, storm water, and solid waste funds at the end of the prior year was
($4,591,865), and has substantially improved in the current fiscal year, amounting to $111,879,
there is no longer a deficit. The total decrease in net position for the enterprise funds was $2.1
million in the current year versus a decrease of $1.3 in the prior year, which is primarily due to
losses in operating the water and sewer fund.
GENERAL FUND BUDGETARY HIGHLIGHTS
During the year there were adjustments to the appropriations between the original and final amended
budget. Overall, the City actual total revenues was less than budgeted while overall expenditures were
reduced and did not exceed the budget, this created excess of revenues over expenditures of $781,515.
CAPITAL ASSETS AND DEBT ADMINISTRATION
Capital Assets
The City's investment in capital assets for its governmental and business -type activities as of September
30, 2017, amounted to $37.9 million (net of accumulated depreciation). This investment in capital assets
includes land, buildings and buildings improvements, machinery and equipment, park facilities, roads and
utility systems infrastructure. There was a decrease in the City's investment in capital assets for the current
fiscal year by $2.3 million attributed to depreciation.
Major capital assets additions during the current fiscal year included the following:
• Construction in progress for Cairo Lane and Historic City Hall
• Installation of sidewalk, storm water drainage and resurfacing of the roadway (Alexandria Drive)
- 13 -
CITY OF OPA-LOCKA, FLORIDA
MANAGEMENT'S DISCUSSION AND ANALYSIS
FISCAL YEAR ENDED SEPTEMBER 30, 2017
City of Opa-locka's Capital Assets
(net of accumulated depreciation)
Governmental Activities
Business -type Activities Total
2017 2016 2017 2016 2017 2016
Land $ 2,980,457 $ 3,042,475 $ 14,762 $ 14,762 $ 3,057,237 $ 2,995,219
Construction in progress 2,114,914 2,114,914 3,796,056 3,138,035 5,252,948 5,910,970
Buildings and building improvements 15,602,268 15,990,916 15,990,916 15,602,268
Furniture and equipment 106,794 138,447 341,538 771,906 910,353 448,332
Infrastructure 5,304,992 5,721,365 7,657,167 8,592,105 14,313,470 12,962,158
Total $ 26,109,425 $ 27,008,117 $ 11,809,523 $ 12,516,808 $ 39,524,924 $ 37,918,947
Additional information on the City's capital assets can be found in Note 7 of the note disclosures
accompanying this report
Debt Administration
At the end of the current fiscal year the City had total debt outstanding of $49 million, inclusive of deferred
inflow of resources, an increase of $248,903, see Note 9 for long-term debt note disclosures.
Governmental Activities
Business -type Activities Total
2017 2016 2017 2016 2017 2016
Revenue bonds $ 13,371,604 $ 14,043,437 $ - $ $ 13,371,604 $ 14,043,437
Capital leases 25,850 70,703 39,490 114,317 65,340 185,020
Loans 5,307,753 4,699,173 5,307,753 4,699,173
GASB 68 liability 8,566,264 10,382,088 1,168,127 1,415,740 9,734,391 11,797,828
Liability to Miami -Dade 214,236 5,356,061 5,570,297
OPEB 582,852 500,720 81,149 68,280 664,001 569,000
Compensated absences 1,360,847 1,455,939 107,795 168,826 1,468,642 1,624,765
Legal 1,297,602 800,000 1,297,602 800,000
Total $ 25,419,255 $ 27,252,887 $ 12,060,375 $ 6,466,336 $ 37,479,630 $ 33,719,223
ECONOMIC FACTORS AND NEXT YEAR'S BUDGET AND RATES
During fiscal year 2017, the City will be looking at the following programs/initiatives:
• On June 1, 2016, the City of Opa-locka City Commission adopted a Resolution to request a declaration that
the City is in a state of financial emergency to seek the appointment of a financial emergency board and
other assistance pursuant to section 218.503(1), Florida Statutes. The State of Florida, Office of the
Governor, issued Executive Order 16-135, signed by Florida Governor Rick Scott. In 2017, the City will
be looking to improve and enhance its operational and fmancial controls.
• Completion of the extemal audit report for fiscal year 2016 and its submission to the appropriate authorities.
• Development of key audit schedules and documentation to begin the external audit work for fiscal year
2017. Additional temporary accounting and audit staff were engaged to assist with completion of this task.
- 14-
CITY OF OPA-LOCKA, FLORIDA
MANAGEMENT'S DISCUSSION AND ANALYSIS
FISCAL YEAR ENDED SEPTEMBER 30, 2017
• Continue with upgrades to bring all of the City's 19 pump stations out of moratorium and other
improvements to the utility system to increase the opportunities for economic development and compliance
with the consent agreement with the Department of Environmental Management (DERM).
• Planning was prepared for the re -bidding of the Request for Proposal on the Ali Baba Cultural Arts Center
project. Proposals will be requested for roof repairs, stripping down and painting the building, with all
work done in accordance with ADA standards. Funding for this project was approved by Miami Dade
County's Department of Public Housing and Community Development (PHCD).
• The City has identified a contractor to complete the final 25% of underground infrastructure work at Cairo
Lane, from NW 135th Street to the canal, and from NW 127' Street to NW 32nd Avenue. This project has
been re -scheduled for completion during the early part of fiscal year 2020.
• The City participates with Miami -Dade County's Infill Housing Project team members for development of
the Magnolia Area of the City that is located within the boundaries of NW 22nd Avenue and Ali -Baba to
NW 151 st Street to the railroad tracks. Herein lies some 17 vacant properties slated for residential
development and completion during fiscal year 2020. The Department of PHCD is working with
recommendations from the City to develop these properties. The City also owns 9 vacant parcels in the
Magnolia Area and is moving forward to develop them for residential and mixed uses.
• Work to expand the City's online services to allow residents to access an e-commerce platform, which is
ongoing until fiscal year 2019. It is anticipated to be complete and released during fiscal year 2019.
• The development of a destination plan to attract more visitors to the City has been an ongoing project that
is continuing through subsequent fiscal years. As the external audits are released for these fiscal years, it
is anticipated that additional funds will be released to facilitate achievement of the destination plans to
attract more visitors to the City.
• Plans for milling and resurfacing of the City's roadways were a continued priority during fiscal year 2018.
There was approximately 10 miles of roadway that were in need of improvement, of which 7 miles were
completed during fiscal year 2019 and 3 miles are pending completion. Due to the magnitude of trucking
and other traffic throughout the City, this is an ongoing project.
These factors were considered in preparing the City of Opa-locka's budget for fiscal years 2018-2019 and
2019-2020.
Contacting the City's Financial Management
This financial report is designed to provide our citizens, taxpayers, customers, and investors and creditors
with a general overview of the City's finances and to demonstrate the City's accountability. Questions
concerning any of the information provided in this report or requests for additional information should be
addressed to The City of Opa-locka, Finance Department, 780 Fisherman Street 4th Floor, Opa-locka,
Florida 33054. A copy of this report will also be available on the City's website, www.opalockafl.gov.
- 15 -
BASIC FINANCIAL STATEMENTS
CITY OF OPA-LOCKA, FLORIDA
STATEMENT OF NET POSITION
SEPTEMBER 30, 2017
Governmental Proprietary
Activities Activities
Total
ASSETS
Cash and equity in pooled cash $ 3,835,084 $ 3,916,541 $ 7,751,625
Receivables, net 918,213 1,460,367 2,378,580
Internal balance 1,169,521 (1,169,521)
Due from other governments 466,538 459,907 926,445
Inventories 23,195 379- 23,195
Other assets 75,007 75,007
Restricted cash and cash equivalents 2,356,939 1,447,249 3,804,188
Capital assets, not being depreciated 5,095,401 3,810,819 8,906,220
Capital assets, being depreciated net 21,014,055 7,998,695 29,012,750
Total assets 34,953,953 17,924,057 52,878,010
DEFERRED OUTFLOW OF RESOURCES
Pension (Note 10)
Total deferred outflow of resources
3,840,956
3,840,956
523,767 4,364,723
523,767 4,364,723
LIABILITIES
Accounts payable and accrued liabilities 1,664,998 2,441,705 4,106,703
Due to other governments 2,525,787 1,046 2,526,833
Customers' deposits 12,616 2,420,070 2,432,686
Noncurrent liabilities:
Due within one year:
Compensated absences 136,085 10,780 146,865
Long term debt 770,808 521,086 1,291,894
Due in more than one year:
Compensated absences 1,224,762 97,016 1,321,778
OPEB obligation 582,852 81,149 664,001
Contingency 1,297,602 1,297,602
Long -term debt - Pension liability 8,566,264 1,168,127 9,734,391
Long -term debt 12,840,882 10,182,219 23,023,101
Total liabilities 29,622,656 16,923,198 46,545,854
DEFERRED INFLOW OF RESOURCES
Pension (Note 10)
Total deferred inflow of resources
2,247,949
2,247,949
306,539 2,554,488
306,539 2,554,488
NET POSITION
Invested in capital assets, net of related debt 12,497,766 1,106,209 13,603,975
Restricted for:
Debt service 3,298,639 3,298,639
Unrestricted (8,872,101) 111,879 (8,760,222)
Total Net Position $ 6,924,304 $ 1,218,08$ $ 8,142,392
See notes to basic financial statements.
- 16-
Functions / Programs
Governmental activities:
General government
Public safety
Transportation
Culture and recreation
Interest on long term debt
Total governmental activities
Proprietary activities:
Water and sewer
Solid waste
Stormwater
Total proprietary activities
Total
Expenses,
$ 6,751,876
5,512,414
1,780,407
537,294
490,299
CITY OF OPA-LOCKA, FLORIDA
STATEMENT OF ACTIVITIES
FOR THE YEAR ENDED SEPTEMBER 30, 2017
Program Revenues
Charges
for Services
$ 719,144
1,057,312
21,859
15,072,290 1,798,315
10,250,266
1,215,121
423,594
11,888,981
$ 26,961,271
Operating
Grants and
Contributions
13,191
Capital
Grants and
Contributions
385,147
13,191 385,147
7,106,891 365,302
1,499,873
721,997
9,328,761 365,302
$ 11,127,076 $ 13,191 $ 750,449
General revenues:
Property taxes
Franchise fees
Utility taxes
Communication services tax
Local option, use and fuel taxes
Local business tax
Intergovernmental revenue - unrestricted
Unrestricted interest earnings
Miscellaneous
Transfers in
Transfers out
Debt proceeds
Total general revenues and transfers
Net (Expense) Revenue and
Changes in Net Position
Governmental
Activities
$ (6,032,732) $
(4,441,911)
(1,395,260)
(515,435)
(490,299)
Proprietary
Activities Total
$ (6,032,732)
(4,441,911)
(1,395,260)
(515,435)
(490,2991
(12,875,637) (12,875,637)
(2,778,073) (2,778,073)
284,752 284,752
298.403 298,403
(2,194,918) (2,194,918)
(12,875,637) (2,194,918) (15.070555)
7,654,862
1,355,702
1,341,754
409,058
302,792
254,399
1,891,134
587
1,739,788
381,243
(381,242)
214,236
15.164.313
7,654,862
1,355,702
1,341,754
409,058
302,792
254,399
1,891,134
587
1,739,788
381,243
(381,242)
214,236
15,164,313
Change in net position 2,288,676 (2,194,918) 93,758
Net position, beginning as previously stated 4,906,119 3,111,443 8,017,562
Prior period adjustment (Note 17) (270.492) 301,563 31,071
Net position, beginning restated (Note 17) - 4,635,627 3,413,006 8.048.633
Net position, ending $ 6,924,303 $ 1.218,088 $ 8,142,391
See notes to basic financial statements.
- 17 -
CITY OF OPA-LOCKA, FLORIDA
BALANCE SHEET - GOVERNMENTAL FUNDS
SEPTEMBER 30, 2017
People's Capital Projects Other Nonmajor Total
General Transportation Improvement Governmental Governmental
Fund Tag Debt Service Funds Funds
ASSETS
Cash and equity in pooled cash $ 3,410,586 $ 100 $ $ 424,398 $ 3,835,084
Receivables, net 819,623 98,590 918,213
Other government account receivables 309,945 56,593 100,000 466,538
Due from other funds 10,872,396 1,687,400 5,695,233 1,836,591 20,091,620
Inventories 23,195 - 23,195
Prepaid items 75,007 75,007
Restricted cash and cash equivalents 223,116 2,065,772 68,051 2,356.939
Total assets $ 15.423,923 $ 1,997.445 $ 7,916,188 $ 2.429,040 $ 27,766,596
LIABILITIES AND FUND BALANCES
Liabilities:
Accounts payable and accrued liabilities $ 1,409,116 $ 39,767 $ 31,066 $ 185,049 $ 1,664,998
Due to other funds 13,089,503 875,164 2,674,333 2,283,099 18,922,099
Customer deposits 12,616 12,616
Other government account payables 2.524.782 1,005 2,525.787
Total liabilities 17,036,017 914,931 2.705,399 2,469.153 23,125,500
FUND BALANCE
Nonspendable:
Inventories 23,195 - - 23,195
Prepaid items 75,007 - 75,007
Restricted for:
Debt service - 3,298,639 3,298,639
Committed for:
Public safety 597,402 597,402
Transportation 1,135,601 - 1,135,601
Unassigned:
General fund (1,710,296) (53,087) 1,912,150 (637,515) (488,748)
Total fund balances (1,612,094) 1,082,514 5,210,789 (40,113) 4,641,096
Total Liabilities and Fund Balances $ 15.423.923 $ 1,997.445 $ 7,916.188 $ 2A29,040 $ 27.766.596
See notes to basic financial statements.
- 18 -
CITY OF OPA-LOCKA, FLORIDA
RECONCILIATION OF THE BALANCE SHEET
GOVERNMENTAL FUNDS TO THE STATEMENT OF NET POSITION
SEPTEMBER 30, 2017
Fund balances - total governmental funds $ 4,641,096
Amounts reported for governmental activities in the statement
of net assets are different because:
Capital assets used in governmental activities are not fmancial
resources and, therefore, are not reported in the governmental funds.
Capital assets net of accumulated depreciation $ 26,109,456
Debt (13,611,690)
Pension liability (6,973,257)
Compensated absences (1,360,847)
Other post -employment benefits (582,852)
Accrued legal settlement (1,297,602)
Net adjustment
2,283,208
Net position of governmental activities $ 6,924,304
See notes to basic fmancial statements.
- 19 -
CITY OF OPA-LOCKA, FLORIDA
STATEMENT OF REVENUES, EXPENDITURES, AND CHANGES IN FUND
BALANCES -GOVERNMENTAL FUNDS
SEPTEMBER 30, 2017
General
People's Capital Other Nonmajor Total
Transportation Improvement Governmental Governmental
Tax Debt Service Funds Funds
REVENUES:
Taxes:
Property taxes $ 7,438,862 $ $ $ 216,000 $ 7,654,862
Utility taxes 62,876 1,278,878 1,341,754
Communications service taxes 409,058 409,058
Local option, use and fuel taxes 302,792 302,792
Local business taxes 254,399 254,399
Franchise fees 1,355,702 1,355,702
Permits and fees 606,220 - 606,220
Intergovernmental 63,370 457,153 1,765,011 3,938 2,289,472
Charges for services 190,784 - 190,784
Fines and forfeitures 1,001,311 - 1,001,311
Interest 3 51 533 587
Other 1,633,892 105,896 1,739,788
Total revenues 12,910,211 457,153 3,452,998 326,367 17,146,729
EXPENDITURES:
Current:
General government
Public Safety
Transportation
Culture and recreation
Debt service:
Principal
Interest
Capital outlay
Total expenditures
4,375,967
5,511,828
1,438,800
537,294
151,659
2,527
110,621
12,128,696
341,607
15,365
356,972
671,833
487,772
1,159,605
15,187 4,391,154
586 5,512,414
1,780,407
537,294
156,457
823,492
490,299
282,443
172,230 13,817,503
Excess (deficiency) of revenues over expenditures 781,515 100,181 2,293,393 154,137 3,329,226
OTHER FINANCING SOURCES (USES):
Debt proceeds 214,236 214,236
Transfers in 381,243 381,243
Transfers out (381,243) (381,243)
Total other financing sources (uses) 595,479 (381,243) 214,236
Net change in fund balances 1,376,994 100,181 1,912,150 154,137 3,543,462
Fund balances, beginning (3,025,624) 1,427,631 3,298,640 (332,521) 1,368,126
Prior period adjustment ( Note 17) 36,533 (445,298) 138,273 (270,492)
Fund balances, beginning restated ( Note 17) (2,989,091) 982,333 3,298,640 (194,248) 1,097,634
Fund balances, ending $ (1,612,0971 $ 1,082,514 $ 5,210,790 $ (40,111) $ 4,641,096
See notes to basic financial statements.
- 20 -
CITY OF OPA-LOCKA, FLORIDA
RECONCILIATION OF THE BALANCE SHEET TO THE STATEMENT OF
NET POSITION —GOVERNMENTAL FUNDS
SEPTEMBER 30, 2017
Change in fund balance governmental funds
Amounts reported for governmental activities in the statement of activities are
different because:
Governmental funds report capital outlays as expenditures. However, in the
statement of activities, the cost of those assets is depreciated over their
estimated useful lives.
$ 3,543,462
Expenditures for capital outlays 98,163
Less current depreciation (934,835)
The effect of other transaction involving capital assets:
Sale of land (62,018)
The issuance of long-term debt provides current financial resources to governmental
funds, while the repayment of the principal of long-term debt of governmental
funds. Neither transaction, however, has any effect on net assets. Also,
governmental funds report the effect of issuance costs, premiums, discounts, and
similar items when debt is first issued, whereas these amounts are deferred and
amortized in the statement activities. This amount is the net effect of these
differences in the treatment of long-term debt and related items.
Principal payments of debt
Principal payments of capital leases
Some items reported in the statement of activities do not require the use of current
financial resources and, therefore, are not reported in the governmental funds. These
activities consist of:
671,833
44,853
Change in deferred out flow of resource (373,900)
Change in legal accrual (497,602)
Change in other post -employment benefits (82,132)
Change in compensated absences 95,088
Change in long-term debt (214,236)
Change in net position of governmental activities $ 2,288,676
See notes to basic financial statements.
- 21 -
CITY OF OPA-LOCKA, FLORIDA
STATEMENT OF NET POSITION -PROPRIETARY FUNDS
SEPTEMBER 30, 2017
Business -type Activities - Enterprise Funds
Other
Nonmajor
Water and Solid Enterprise
Sewer Waste Funds
Total
ASSETS
Current assets:
Cash and equity in pooled cash $ 2,830,321 $ $ 1,086,220 $ 3,916,541
Receivables, net 1,215,898 1,215,898
Estimated unbilled services 244,469 244,469
Due from other governments 415,467 44,438 459,905
Due from other funds 3,642,794 1,690,991 487,338 5,821,123
Total current assets 8,104,480 1,690,991 1,862,465 1 L657,936
Noncurrent assets:
Restricted cash and cash equivalents 1,337,249 110,000 1,447,249
Non depreciable capital assets 3,521,763 289,056 3,810,819
Capital assets, net 7,961,306 - 37,389 7,998,695
Total noncurrent assets 12,820,318 436,445 13,256,763
Total assets 20,924,798 1,690,991 2,298,910 24,914,699
DEFERRED OUTFLOW OF RESOURCES
Pension (Note 10) 523,767 - 523,767
Total deferred outflow of resources 523,767 523,767
LIABILITIES
Current liabilities:
Accounts payable and accrued liabilities 2,353,364 4,108 84,233 2,441,705
Due to other funds 4,642,072 1,643,564 . 705,006 6,990,642
Due to other governments 1,046 1,046
Deposits 2,353,802 66,266 2 2,420,070
Current portion of long term debt 501,264 - 19,822 521,086
Total current liabilities 9,851,548 1,713,938 809,063 12,374,549
Noncurrent liabilities:
Compensated absences 74,980 32,815 107,795
OPEB 73,985 7,164 81,149
Long -term debt - Pension Liability 1,168,127 - - 1,168,127
Long term debt 9,633,993 548,226 10,182,219
Total noncurrent liabilities 10,951,085 - 588,205 11,539,290
Total liabilities 20,802,633 1,713,938 1,397,268 23,913,839
DEFERRED INFLOW OF RESOURCES
Pension (Note 10) 306,539 306,539
Total deferred inflow of resources 306,539 306,539
NET POSITION
Invested in capital assets, net of related debt 1,347,812 (241,603) 1,106,209
Unrestricted (1,008,419) (22,947) 1,143,245 111,879
Total net position $ 339,393 $ (22,947) $ 901,642 $ 1,218,088
See notes to basic fmancial statements.
- 22 -
CITY OF OPA-LOCKA, FLORIDA
STATEMENT OF REVENUES, EXPENSES, AND CHANGES IN
FUND POSITION -PROPRIETARY FUNDS
SEPTEMBER 30, 2017
Business -Type Activities -Enterprise Funds
Other
Nonmajor
Water and Solid Enterprise
Sewer Waste Funds
Total
Operating revenues:
Charges for services $ 6,432,826 $ 1,499,873 $ 721,997 $ 8,654,696
Other revenues 1,039,367 1,039,367
Total operating revenues 7,472,193 1,499,873 721,997 9,694,063
Operating expenses:
Operating, administrative and maintenance 8,682,990 1,215,121 355,697 10,253,808
Bad debts and other 268,157 268,157
Depreciation 1,299,131 - 66,176 1,365,307
Total operating expenses 10,250,278 1,215,121 421,873 11,887,272
Operating income (loss) (2,778,085) 284,752 300,124 (2,193,209)
Non -operating revenues (expenses)
Interest and fiscal charges 12 (1,721) (1,709)
Total non -operating revenues (expenses) 12 (1,721) (1,709)
Income before transfers (2,778,073) 284,752 298,403 (2,194,918)
Change in net position (2,778,073) 284,752 298,403 (2,194,918)
Net position, beginning as previously stated 2,904,112 (307,699) 515,030 3,111,443
Prior period adjustment ( Note 17) 213,354 88,209 301,563
Net position, beginning restated (Note 17) 3,117,466 (307,699) 603,239 3,413,006
Net position, ending $ 339,393 $ (22,947) $ 901,642 $ 1,218,088
See notes to basic financial statements.
- 23 -
CITY OF OPA-LOCKA, FLORIDA
STATEMENT OF CASH FLOWS -PROPRIETARY FUNDS
SEPTEMBER 30, 2017
Business -Type Activities- Enterprise Funds
Other
Nonmajor
Water and Solid Enterprise
Sewer Waste Funds Total
Cash flows from operating activities:
Cash received from customers $ 7,978,022 $ 1,440,800 $ $ 9,418,822
Cash paid to vendors and employees (7,496,567) (1,283,922) (8,780,489)
Internal activity payments from (to) other funds, net 422,065 (156,878) 282,258 547,445
Net cash provided by operating activities 903,520 282,258 1,185,778
Cash flows from capital and related financing activities:
Acquisition and construction of capital assets (658,022) (658,022)
Capital grants and contributions 285,946 - 285,946
Proceeds from compensated absences and OPEB (48,161) (48,161)
Interest paid on long term debt 12 12
Principal paid on debt (322,445) (322,445)
Net cash used in capital and related financing activities (742,670) (742,670)
Cash flows from investing activities:
Interest income (12) (1,7211 (1,733)
Net cash provided by investing activities (12) (1,721) (1,733)
Net increase (decrease) in cash 160,838 280,537 441,375
Cash, beginning 4,006,732 915,683 4,922,415
Cash, ending 4,167,570 1,196,220 5,363,790
Display as:
Unrestricted 2,830,321 1,086,220 3,916,541
Restricted 1,337,249 110,000 1,447,249
Total 4,167,570 1,196,220 5,363,790
Reconciliation of operating income to cash provided
by operating activities:
Operating income (loss) (2,778,073) 284,752 298,403 (2,194,918)
Adjustment to reconciled operating income to net cash provided by
(used in) operating activities:
Depreciation expenses 1,299,131 66,176 1,365,307
(Increase) decrease in:
Accounts receivable 505,829 505,829
Due from other governments (79,356) - (79,356)
Due from other funds (2,490,988) (1,440,800) (131,933) (4,063,721)
Increase (decrease) in:
Accounts payable and accrued liabilities 921,934 (68,801) 40,687 893,820
Customer deposits 155,034 (1,085) 2 153,951
Compensated absences (80,911) 19,881 (61,030)
Bad debt others 268,157 268,157
Other liabilities and pension 5,151,664 503,406 5,655,070
Due to other funds 2,784,070 1,225,934 122,072 4,132,076
Due to other governments (4,752,971) (636,436) (5,389,407)
Net Cash Provided by Operating Activities $ 903,520 $ $ 282,258 $ 1,185,778
See notes to basic financial statements.
- 24 -
NOTES TO FINANCIAL STATEMENTS
CITY OF OPA-LOCKA, FLORIDA
NOTES TO THE BASIC FINANCIAL STATEMENTS
FISCAL YEAR ENDED SEPTEMBER 30, 2017
NOTE 1. SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES
The City of Opa-locka, Florida (the "City") in Miami -Dade County, Florida (the "County") was
incorporated in 1926 by the Laws of Florida Chapter 13187. The City comprises approximately 4.5
square miles of land and operates under a Commission/City Manager form of government and
provides municipal services to its residents, including general government, public safety,
transportation, and parks and recreation. The City also operates water, sewer, storm water, and
sanitation enterprises.
The accounting policies of the City conform to accounting principles generally accepted in the
United States of America (GAAP) as applied to governmental units. This report, the accounting
systems, and classification of accounts conform to standards of the Governmental Accounting
Standards Board (GASB), which is the accepted standard -setting body for establishing
governmental accounting and fmancial reporting principles. The more significant accounting
policies of the City are described below.
A. Reporting Entity
The financial reporting entity covered by this report includes the City and its component unit.
The reporting entity has been defined in accordance with GASB Codification of Governmental
Accounting and Financial Reporting Standards Section 2100. The accompanying financial
statements include those of the City (the primary government) and those of its component unit.
Component units are legally sperate organizations for which the primary government is
financially accountable or organizations which should be included in the City's financial
statements because of the nature and significance of their relationship with the primary
government. GASB Codification of Governmental Accounting and Financial Reporting
Standards Section 2100 provides guidance for the inclusion of a legally separate entity as a
component unit of an entity. The application of this guidance provides for identification of
entities for which the City is fmancially accountable or organizations that the nature and
significance of their relationship with the City are such that exclusions would cause the City's
basic financial statements to be misleading or incomplete.
Based upon the application of GASB Codification Section 2100, the component units listed
below have been included in the City's reporting entity as either blended or discretely presented
component units.
Blended component units, although legally separate entities, are in substance part of the City's
operations. Accordingly, data from these component units are included with data of the primary
government. Discretely presented component unit, on the other hand, is reported in a sperate
column in the financial statements to emphasize that they are legally separate from the City.
The financial balances and activities of the blended component unit are as of and for the year
ended September 30, 2017.
- 25 -
CITY OF OPA-LOCKA, FLORIDA
NOTES TO THE BASIC FINANCIAL STATEMENTS
FISCAL YEAR ENDED SEPTEMBER 30, 2017
NOTE 1. SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES (Continued)
A. Reporting Entity (cont'd)
Blended Component Units
Blended component units are separate legal entities that meet the component unit criteria
described and whose government body is the same, or substantially the same and 1) there is a
financial benefit or burden relationship between the primary government and the component
unit or 2) management below the level of the governing board of the primary government has
operational responsibility for a component unit.
The Opa-locka Community Redevelopment Agency (CRA) is a dependent special district
established by the City Commission in 2011 and approved by Miami -Dade County in 2013
under the authority granted by Florida Statute 163, section III. The CRA is a legal subsidiary
governed by a seven member board appointed by the City Commission, the Miami -Dade
County, District One Commissioner, and the Office of the Governor. The Board currently
comprises of the Mayor, Vice -mayor, and three City Commissioners, and an appointee from
the Miami -Dade County Commissioner and the Florida Governor's Office. Its sole purpose is
to finance the redevelop of the City's designed redevelopment areas through Tax Increment
Financing (TIF). The CRA can provide services and financial benefits/assistance to imposed
financial burdens on the City.
The CRA was in a limited -active phase of operation for FY 2016-2017 due to limited tax
increment funds produced by ad valorem taxes. There was approximately $216,000 in revenues
other than transfers from the General Fund. Although the CRA activities did not meet the major
fund criteria, the CRA's financial data is presented within the City's major governmental funds
in order to comply with the audit requirements of F.S. 163.387(8) and is part of nonmajor
governmental funds. No separate financial statements are issued.
Special District
The City passed ordinances in prior years establishing various neighborhood improvement
districts. The following neighborhood improvement districts, which are considered to be
component units of the City, have not been included in the financial statements because there
has been no financial activity for several years and the funds have no assets, liabilities, or fund
balances.
1) East-West Neighborhood Improvement District
2) Ali -Baba Neighborhood Improvement District
3) Niles Garden Neighborhood Improvement District
- 26 -
CITY OF OPA-LOCKA, FLORIDA
NOTES TO THE BASIC FINANCIAL STATEMENTS
FISCAL YEAR ENDED SEPTEMBER 30, 2017
NOTE 1. SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES (Continued)
B. Government -wide and Fund Financial Statements
The government -wide financial statements (i.e., the statement of net position and statement of
activities) report information on all of the activities of the City. For the most part, the effect of
inter -fund activity has been removed from these statements. 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.
The statement of activities demonstrates the degree to which the direct expenses of a given
function are offset by program revenues. Direct expenses are those that are clearly identifiable
with a specific function. Amounts reported as program revenues include 1) charges to
customers or applicants who purchase, use of directly benefit from goods, services, or
privileges provided by a given function, and 2) grants and contributions that are restricted to
meeting the operational or capital requirements of a particular function. Taxes and other items
not included among program revenues are reported as general revenues.
Separate financial statements are provided for governmental funds and proprietary funds.
Major individual governmental funds and major individual enterprise funds are reported as
separate columns in the fund financial statements. All remaining governmental funds are
aggregated and reported as non -major funds.
C. Measurement Focus, Basis of Accounting, and Financial Statement Presentation
The government -wide financial statements are reported using the economic resources
measurement focus and the accrual basis of accounting, as are the proprietary fund statements.
Revenues are recorded when earned and expenses are recorded when a liability is incurred,
regardless of the timing of related cash flows. Property taxes are recognized as revenues in the
year for which they are levied. Grants and similar items are recognized as revenue as soon as
all eligibility requirements imposed by the provider have been met.
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 collectible within the current period or soon enough thereafter to pay liabilities of the
current period. For this purpose, the City considers revenues to be available if they are collected
within sixty (60) days of the end of the current fiscal period, with the exception of expenditure
driven (reimbursements) grants, for which the availability period is one year.
Expenditures generally are recorded when a liability is incurred, as under accrual accounting.
However, debt service expenditures, as well as expenditures related to compensated absences
and claims and judgments, are recorded only when payment is due. General capital asset
acquisitions are reported as expenditures in governmental funds. Proceeds of general long-term
debt and acquisitions under capital leases are reported as other financing sources.
Property taxes, sales taxes, utility taxes, franchise taxes, licenses, 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 and available only when cash is received by the City.
- 27 -
CITY OF OPA-LOCKA, FLORIDA
NOTES TO THE BASIC FINANCIAL STATEMENTS
FISCAL YEAR ENDED SEPTEMBER 30, 2017
NOTE 1. SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES (Continued)
C. Measurement Focus, Basis of Accounting, and Financial Statement Presentation (cont'd)
The financial transactions of the City are recorded in individual funds. The operations of each
fund are accounted for using a separate set of self -balancing accounts which comprise its assets,
deferred outflows of resources, liabilities, deferred inflows of resources, fund equities, revenue
and expenditure or expenses. Fund accounting is designed to demonstrate legal compliances
and to aid financial management by segregating transactions related to certain government
functions or activities. Accounting principles generally accepted in the United States of
America set forth minimum criteria for determination of major funds based on the percentage
of the applicable category balances. The non -major funds are presented in one column in the
respective fund financial statements.
The City reports the following major governmental funds:
The General Fund is the general operation fund of the City. It accounts for all financial
resources of the general government, except those required to be accounting for in another
fund.
The Peoples Transportation Tax Fund accounts for the City's prorated share of the
Charter County Transit System Surtax proceeds used toward projects and programs such
as public transportation operations.
The Capital Improvement Debt Service Fund is used to account for the sinking fund
requirements of the Series 2011 A and B Capital Improvement Revenue Bonds.
The City reports the following major proprietary funds:
The Water and Sewer Fund is used to account for the operation and maintenance of the
City's water and sewer system.
The Solid Waste Fund is used to account for the operations of the City's activities
associated with refuses, yard trash, cleaning debris, white goods, special waste, refuse or
other discarded materials.
As a general rule the effect of inter -fund activity has been eliminated from the government -
wide financial statements. Exceptions to this general rule are payments and other charges
between the City's water and sewer function and various other functions of the government.
Elimination of these charges would distort the direct costs and program revenues reported for
the various functions concerned.
- 28 -
CITY OF OPA-LOCKA, FLORIDA
NOTES TO THE BASIC FINANCIAL STATEMENTS
FISCAL YEAR ENDED SEPTEMBER 30, 2017
NOTE 1. SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES (Continued)
C. Measurement Focus, Basis of Accounting, and Financial Statement Presentation (cont'd)
Proprietary funds distinguish operating revenues and expenses from non -operating items.
Operating revenues and expenses generally result from providing services and producing and
delivering goods in connection with a proprietary fund's principal ongoing operations. The
principal operating revenues of the City's water . and sewer, solid waste and storm water
enterprise funds, are charges to customers for sales and services. Operating expenses for
enterprise funds include the cost of sales and services, administrative expenses, and
depreciation on capital assets. All revenues and expenses not meeting this definition are
reported as non -operating revenues and expenses. Operating expenses for the enterprise funds
include the cost of services, administrative expenses, and depreciation on capital assets. All
revenues and expenses not meeting this definition are reported as non -operating revenues and
expenses.
When both restricted and unrestricted resources are available for use, it is the City's policy to
use restricted resources first, then unrestricted resources as they are needed.
The preparation of financial statements in conformity with accounting principles generally
accepted in the United States of America requires management to make estimates and
assumptions that affect amounts reported in the financial statements and accompanying notes.
Although these estimates are based on management's knowledge of current events and actions
it may undertake in the future, they may ultimately differ from actual results.
D. Basis for Qualified Opinion
GASB 34 requires governments to report and better understand the extent to which the City
has invested in capital assets, including roads, bridges and other infrastructure assets. The City
has not fully identified its infrastructure assets nor developed an asset management system that
the City can document that its capital assets are being properly managed and preserved.
Moreover, the City has not performed a physical inventory of its capital assets for several years.
E. Assets, Deferred Outflows, Liabilities, Deferred Inflows, and Net Position/Fund Balance
1. Encumbrances
Encumbrances accounting, under which purchase orders, contracts and other commitments
for the expenditure of monies are recorded in order to serve that portion of the applicable
appropriation, is employed in the General and Capital Projects Funds. Encumbrances
outstanding at the balance sheet date are canceled.
- 29 -
CITY OF OPA-LOCKA, FLORIDA
NOTES TO THE BASIC FINANCIAL STATEMENTS
FISCAL YEAR ENDED SEPTEMBER 30, 2017
NOTE 1. SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES (Continued)
E. Assets, Deferred Outflows, Liabilities, Deferred Inflows, and Net Position/Fund Balance
(cont'd)
2. Deposits and Investments
The City considers cash on hand, cash with fiscal agents, demand deposits, and certificates of
deposit with and original maturity of (90) ninety days or less to be cash and cash equivalents.
For purposes of the statement of cash flows for proprietary fund types fund, all highly liquid
investments (including restricted assets) with maturity of three months or less when
purchased are considered to be cash equivalents.
For purposes of the statement of cash flows for proprietary fund types fund, all highly liquid
investments (including restricted assets) with maturity of three months or less when
purchased are considered to be cash equivalents.
Investments, consisting of U.S. Government securities, and certificates of deposit with
financial institutions, are stated at cost plus accrued interest.
3. Receivables
In the government -wide statements, receivables consist of all revenues earned at year-end
and not yet received. The City calculates its allowance for uncollectible using historical
collection data, specific account analysis, and management's judgment. Major receivables
balances for the governmental activities include franchise fees and utility taxes, and amounts
due from other governments. Business -type activities report utility billings as major
receivables.
4. Inventories
Inventories are valued at cost, which approximates market, using the first -in, and first -out
method. Inventories in the General and Enterprise Funds consist of fuel and expendable
supplies held for consumption. The costs of Governmental Fund type inventories are
recorded as expenditures when consumed rather than when purchased. In the governmental
funds, reported inventories are offset by a fund balance reserve which indicates that they do
not constitute available spendable resources.
5. Restricted Assets
Restricted assets include cash and cash equivalents of the governmental and enterprise funds
that are legally restricted as to their use. Cash and cash equivalents are restricted for debt
service, customers' deposits, revenue bond requirement, and sewer system improvements.
- 30 -
CITY OF OPA-LOCKA, FLORIDA
NOTES TO THE BASIC FINANCIAL STATEMENTS
FISCAL YEAR ENDED SEPTEMBER 30, 2017
NOTE 1. SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES (Continued)
E. Assets, Deferred Outflows, Liabilities, Deferred Inflows, and Net Position/Fund Balance
(cont'd)
6. Capital Assets
Capital assets, including land, buildings, improvements, infrastructure, and equipment
assets, are reported in the applicable governmental or business -type activities columns in
the government -wide financial statements. Capital assets are defined by the City as assets
with an initial, individual cost of more than $500 and an initial useful life of one year or
greater. Such assets are recorded at historical cost if purchased or constructed. Donated
capital assets are recorded at estimated fair value at the date of donation.
The costs of normal maintenance and repairs that do not add to the value of the asset or
materially extended the life of the asset 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.
Buildings, improvements, infrastructure and equipment assets are depreciated using the
straight-line method over the following estimated useful lives:
Assets Years
Buildings and Building Improvements 10-50
Infrastructure Systems 30
Equipment 3-10
Vehicles 3-10
7. Inter -fund Transactions
Activities between funds that are representative of lending/borrowing arrangements at the
end of the fiscal year are referred to as "due to/from other funds" or "advances 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".
Non -current portions of long-term inter -fund loan receivables are reported as advances
within the governmental funds, and are offset equally by a fund balance reserve account
which indicates that they do not constitute expendable available financial resources, and
therefore, are not available for appropriation.
Transactions among City funds that would be treated as revenues and expenditures or
expenses if they involve organizations external to City government are accounted for as
revenues and expenditures or expenses in the funds involved.
- 31 -
CITY OF OPA-LOCKA, FLORIDA
NOTES TO THE BASIC FINANCIAL STATEMENTS
FISCAL YEAR ENDED SEPTEMBER 30, 2017
NOTE 1. SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES (Continued)
E. Assets, Deferred Outflows, Liabilities, Deferred Inflows, and Net Position/Fund Balance
(cont'd)
7. Inter -fund Transactions (cont'd)
Transactions that constitute reimbursements to a fund for expenditures initially made from
it, which are properly applicable to another fund, are recorded as expenditures in the
reimbursing fund and as reductions of expenditures in the reimbursed fund. Transactions,
which constitute the transfer of resources from a fund receiving revenues to a fund through
which the revenues are to be expended, are separately reported in the respective funds'
operating statements.
8. Deferred Outflows of Resources
The statement of net position includes a separate section, listed below Total Assets, for
Deferred Outflows of Resources. This represents the usage of net position applicable to
future periods and will not be recognized as expenditures until the future period to which it
applies. Items in this category include deferred items related to pension and the deferred
charge on refunding reported on the Government -wide Statement of Net Position. A
deferred charge is the difference between 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 the refunding debt.
9. Unearned Revenues
Unearned revenue is recorded for governmental fund receivables that are measurable and
available, but have not met the criteria for revenue recognition, such as donations or grants
received for specific projects. These are recorded as unearned revenue in the government -
wide and fund statements.
10. Compensated Absences
It is the City's policy to permit employees to accumulate, with certain limits, earned but
unused vacation time and sick leave hours for subsequent use or for payment upon
termination, death or retirement. For government -wide statements and proprietary fund
types, these accumulations are recorded as expenses and liabilities of the appropriate fund
in the fiscal year earned. For governmental fund types, the amount of accumulated unpaid
vacation and sick leave that is payable from available resources is recorded as a liability of
the respective fund only if they have matured, for example, as a result of employee
retirements and resignations.
- 32 -
CITY OF OPA-LOCKA, FLORIDA
NOTES TO THE BASIC FINANCIAL STATEMENTS
FISCAL YEAR ENDED SEPTEMBER 30, 2017
NOTE 1. SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES (Continued)
E. Assets, Deferred Outflows, Liabilities, Deferred Inflows, and Net Position/Fund Balance
(cont'd)
11. Long -Term Debt
In the government -wide financial statements, and proprietary fund types in the fund
financial statements, long-term debt and other long-term obligations are reported as
liabilities in the applicable governmental activities, business -type activities, or proprietary
fund type statement of net position. Bonds payable are reported net of the applicable
premium or discount. These premiums and discounts are deferred and amortized over the
life of the bonds using the straight line method. Bond issuance costs are expensed in the
year they are incurred.
12. Deferred Inflows of Resources
The Statement of Net Position includes a separate section, listed below Total Liabilities, for
Deferred Inflows of Resources. This represents the acquisition of net position applicable to
future periods and will not be recognized as revenue until the future period to which it
applies. In the governmental funds, this category includes unavailable revenue, whereas in
the government -wide and the proprietary fund Statements. It includes resources related to
pension, which will be recognized as inflows of resources in the period that the amounts
become available.
13. Net Position and Fund Balance
Net position in the government -wide and proprietary funds is categorized as net investment
in capital assets; restricted or unrestricted. Net investment in capital assets is the difference
between the cost of capital assets, less accumulated depreciation, reduced by the, outstanding
balances of any borrowings used for the acquisition, construction or improvement of those
assets plus unspent bond proceeds.
Restricted balances consist of net position with constraints placed on their use by external
parties (creditors, grantors, contributors, laws or regulations of other governments) or
imposed by law through constitutional provisions or enabling legislation. Unrestricted
balances indicate the portion of net position that is available to fund future operations.
Sometimes the government will fund outlays for a particular purpose from both restricted
(e.g., restricted bond or grant proceeds) and unrestricted resources. In order to calculate the
amounts to report as restricted — net position and unrestricted — net position in the
government -wide and proprietary fund fmancial statements, a flow assumption must be
made about the order in which the resources are considered to be applied. It is the
government's policy to consider restricted — net position to have been depleted before
unrestricted — net position is applied.
- 33 -
CITY OF OPA-LOCKA, FLORIDA
NOTES TO THE BASIC FINANCIAL STATEMENTS
FISCAL YEAR ENDED SEPTEMBER 30, 2017
NOTE 1. SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES (Continued)
E. Assets, Deferred Outflows, Liabilities, Deferred Inflows, and Net Position/Fund Balance
(cont'd)
13. Net Position and Fund Balance (cont'd)
In the fund financial statements, governmental funds report fund classifications that
comprise a hierarchy based primarily on the extent to which the City is bound to honor
constraints on the specific purposes for which amounts in those funds can be spent. Amounts
that are restricted to specific purposes either by constraints placed on the use of resources
by (a) creditors, grantors, contributors, laws or regulations of other governments or (b)
imposed by law through constitutional provisions or enabling legislation are classified as
restricted fund balances. Amounts that can only be used for specific purposes pursuant to
constraints imposed by the City Commission through an ordinance or resolution are
classified as committed fund balances. Amounts that are constrained by the City's intent to
be used for specific purposes but are neither restricted nor committed are classified as
assigned fund balances. Assignments are made by City management based on Commission
direction. Non -spendable fund balances include amounts that cannot be spent because they
are either (a) not in spendable form or (b) legally or contractually required to be maintained
intact. Unassigned fund balance represents fund balance that has not been assigned to other
funds and that has not been restricted, committed or assigned to specific purposes within the
general fund.
14. Deferred Compensation Plan
The City offers its employees a deferred compensation plan (the "Plan") created in
accordance with Internal Revenue Code Section 457. The Plan, available to all City
employees, allows them to defer a portion of their salary to future years. The City's direct
involvement in the Plan is limited to remitting the amounts withheld from employees to the
Plan's administrator. The deferred compensation plan is not included in the City's financial
statements.
F. Use of Estimates
The preparation of financial statements in conformity with accounting principles generally
accepted in the United States requires management to make estimates and assumptions that affect
the amounts reported in the financial statements and accompanying notes. Material estimates that
are particularly susceptible to significant change in the near term relate to:
1) The determination of the actuarially accrued liability for unpaid claims which is prepared
based on certain assumptions pertaining to interest rates, and inflation rates, etc.; and
2) The actuarially determined liability for post -employment benefits other than pensions.
Although these estimates (as well as all estimates) are based on management's knowledge of
current events and actions in the future, they may ultimately differ from actual results.
- 34 -
CITY OF OPA-LOCKA, FLORIDA
NOTES TO THE BASIC FINANCIAL STATEMENTS
FISCAL YEAR ENDED SEPTEMBER 30, 2017
NOTE 2. DEFICIT FUND EQUITY
The City reported fund balance deficits of $1.6 million for the General Fund, $22,947 for the Solid
Waste Fund and $683,319 for the Safe Neighborhood Capital Projects Fund. These deficit balances
are being addressed through a five-year recovery plan beginning in fiscal year 2019. In accordance
with Florida Statue, 218.503 (3)(h) that clarifies the determination of fmancial emergency, the City
is in the process of completing the Five -Year Recovery Plan to submit to State of Florida
Governor's office for approval of the plan, and to resolve its financial emergency condition.
NOTE 3. PROPERTY TAXES
Property taxes are levied on the first of November each year, at which time taxes become an
enforceable lien on property assessed as of the previous first of January. Tax bills are payable upon
receipt with discounts rates of one to four percent allowed if paid prior to March 1 of the following
calendar year. Taxes become delinquent on April 1 of the year following the year of assessment
and State law provides for enforcement of collection of property taxes by the sale of interest -bearing
tax certificates and the seizure of personal property to satisfy unpaid property taxes. Miami -Dade
County bills and collects all property taxes for the City, and sells tax certificates for delinquent
taxes.
The gross taxable value of property, as established by the Miami -Dade County Property Appraiser, at
July 1, 2016 upon which the 2016-2017 levy, was approximately $7.6 million. For the year ended
September 30, 2017, the millage rate to finance general government services was 10% per $1,000 of
assessed taxable value).
No accrual for the property tax levy becoming due in November 2017 is included in the
accompanying financial statements since the legal right to receive these taxes occurs on November
1, 2017, and such taxes are collected to finance expenditures of the fiscal year ending September
30, 2018.
NOTE 4. DEPOSITS AND INVESTMENTS
As of September 30, 2017, the City's cash are considered to be cash on hand, demand deposits.
Deposits
All deposits with financial institutions are fully insured or collateralized as required by the City
Commission. The deposits are covered by federal depository insurance and, for the amount in
excess of such federal depository insurance, by the State of Florida's Public Deposits Act ("the
Act"). Provisions of the Act require that public deposits may only be made at qualified public
depositories. The Act requires each qualified public depository to deposit with the State Treasurer
eligible collateral equal to or in excess of the required collateral as determined by the provisions of
the Act. In the event of a failure by a qualified public depository, losses, in excess of federal
depository insurance and proceeds from the sale of the securities pledged by the defaulting
depository, are assessed against the other qualified public depositories of the same type as the
depository in default.
- 35 -
CITY OF OPA-LOCKA, FLORIDA
NOTES TO THE BASIC FINANCIAL STATEMENTS
FISCAL YEAR ENDED SEPTEMBER 30, 2017
NOTE 4. DEPOSITS AND INVESTMENTS (cont'd)
Investments
The City is authorized to make direct investments in U.S. government, federal agency, and
instrumentality obligations at a price not to exceed the market price at the time of purchase. In
addition, the City may invest in certificates of financial institutions insured by the United States
government or agencies thereof and repurchase agreements.
As of September 30, 2017, the City has no investments.
NOTE 5. ACCOUNTS RECEIVABLE
Receivable balances as of September 30, 2017, were as follows:
Due from Allowance for
Accounts Taxes Other Agencies Others Uncollectible Net
Governmental activities
General $ - $ - $ - $ 819,624 $ $ 819,624
Capital projects and debt service 98,589 - 98,589
Total governmental activities $ 98,589 $ - $ $ 819,624 $ $ 918,213
Business -type activities:
Water and sewer $ 2,078,111 $ $ $ $ (862,213) $ 1,215,898
Stormwater 261,733 (17,264) 244,469
Total business -type activities $ 2,339,844 $ $ $ - $ (879,477) $ 1,460,367
NOTE 6. INTERFUND BALANCES AND TRANSFERS
Transfers are used to (1) move revenues from the fund that statute or budget requires collecting
them to the fund that statute or budget requires to expend them or (2) use unrestricted revenues
collected in the General Fund to finance various programs accounted for in other funds in
accordance with budgetary authorizations. These transfers are eliminated in the consolidation, by
column, for the Governmental Activities. Inter -fund balances result from the time lag between the
dates that (1) inter -fund goods and services are provided or reimbursable expenditures occur, (2)
transactions are recorded in the accounting system and (3) payments between funds are made.
Interfund balances as of September 30, 2017, consisted of the following:
Due from Other Funds Due to Other Funds
Major governmental fund:
General fund $ 10,872,396 $ 13,089,503
Capital improvement debt service 5,695,233 2,674,333
People's Transportation 1,687,400 784,400
Non -major governmental funds 1,809,495 2,283,099
Major enterprise fund:
Solid waste 1,690,991 1,643,564
Water and sewer 3,642,794 4,642,072
Non -major enterprise funds 423,668 705,006
Total $ 25,821,977 $ 25,821,977
- 36 -
CITY OF OPA-LOCKA, FLORIDA
NOTES TO THE BASIC FINANCIAL STATEMENTS
FISCAL YEAR ENDED SEPTEMBER 30, 2017
NOTE 6. INTERFUND BALANCES AND TRANSFERS (Continued)
Interfund transfers for the year ended September 30, 2017, consisted of the following:
Transfers In Transfers Out
General fund $ 381,243 $
CIP debt service fund (381,243)
Total $ 381,243 $ (381,243)
The balance of certain pledged funds are normally available for use within the General Fund and
are transferred back after debt services payments have been completed. However, City National
Bank has been restricted the use of these excess pledged funds after debt service payments have
been made; as of September 30, 2017, approximately $3.2 million is unavailable for City
operations.
NOTE 7. CAPITAL ASSETS
The following is a summary of changes in capital assets for the year ended September 30, 2017:
Balance Balance
09/30/16 Increases Decreases 09/30/17
Governmental Activities:
Capital assets not being depreciated:
Land $ 3,042,475 $ $ (62,018) $ 2,980,457
Construction in progress 2,114,914 - 2,114,914
Total assets not being depreciated 5,157,389 (62 0181 5,095,371
Capital assets being depreciated:
Buildings and improvements 19,498,959 19,498,959
Vehicles, furniture, and equipment 4,706,309 114,347 4,820,656
Infrastructure 21,648,028 - 21,648,028
Total assets being depreciated 45,853,296 114,347 45,967,643
Less accumulated depreciation:
Buildings and improvements (3,508,044) (388,647) (3,896,691)
Vehicles, furniture, and equipment (4,567,862) (146,000) (4,713,862)
Infrastructure (15,926,663) (416,373) (16,343,036)
Total accumulated depreciation (24,002,569) (951,020) (24,953,589)
Total capital assets being depreciated, net 21,850,727 (836,674) 21,014,054
Governmental activities capital assets, net $ 27,008,115. $ (836,674). $ (62,018) $ 26,109,49,5
Business -type Activities:
Capital assets not being depreciated:
Land $ 14,762 $ - $ $ 14,762
Construction in progress 3,138,035 658,022 3,796,056
Total assets not being depreciated 3,152,797 658,022 3,810,819
Capital assets being depreciated:
Vehicles, furniture, and equipment 6,867,366 6,867,366
Infrastructure 21,899,740 21,899,740
Total assets being depreciated 28,767,106 28,767,106
Less accumulated depreciation:
Vehicles, furniture, and equipment (6,095,460) (430,368) (6,525,828)
Infrastructure (13,307,634) (934,939) (14,242,573)
Total accumulated depreciation (19,403,094) (1,365,307) (20,768,401)
Total capital assets being depreciated, net 9364,011 (1,365,307) 7,998,705
Business -type activities capital assets, net $ 12,516,808 $ (707,285) $ - $ 11,809.579
- 37 -
CITY OF OPA-LOCKA, FLORIDA
NOTES TO THE BASIC FINANCIAL STATEMENTS
FISCAL YEAR ENDED SEPTEMBER 30, 2017
NOTE 7. CAPITAL ASSETS (Continued)
Depreciation expense was charged to functions/programs of the City as follows:
Governmental activities:
General government $ 291,011
Public safety 193,057
Transportation 460,294
Parks and recreation 6,658
Total $ 951,020
Business -type activities:
Water and sewer
Storm water
Total
NOTE 8. LEASES
Capital Leases
$ 1,299,131
66,176
$ 1,365,307
The City has entered into lease agreements as lessee for financing the acquisition of various
vehicles. The City also financed the acquisition of water meter reading equipment. These lease
agreements qualify as capital leases for accounting purposes and, therefore, have been recorded at
the present value of their future minimum lease payments as of the inception dates. Future
minimum payments under the lease agreements and the present value of minimum payments as of
September 30, 2017, are as follows:
Governmental Activities:
Governmental Business -type
Year Ending September 30, Activities Activities Total
2018 $ 25,850 $ 39,488 $ 65,338
Total minimum lease 25,850 39,488 65,338
Less: amount representing interest 331 483 814
Present value of minimum lease payments $ 25,519 $ 39,005 $ 64,524
- 38 -
CITY OF OPA-LOCKA, FLORIDA
NOTES TO THE BASIC FINANCIAL STATEMENTS
FISCAL YEAR ENDED SEPTEMBER 30, 2017
NOTE 9. LONGTERM DEBT
Long-term liability activity for the year ended September 30, 2017, was as follows:
Balance Balance Due in
9/30/16 Additions Reductions Adiustments 9/30/17 One Year
Governmental Activities
Capital Improvement Revenue Bond
Series 2011 A&B $ 5,716,000 $ - $ (445,000) $ - $ 5,271,000 $ 510,000
Citi National Bank
Series 2015 8,327,437 (226,833) 8,100,604 234,958
Other liabilities:
Capital lease obligation 70,703 (44,853) 25,850 25,850
Total bond and leases 14,114,140 (716,686) 13,397,454 770,808
Compensated absences 1,455,939 (95,092) 1,360,847
OPEB 500,720 82,132 582,852
FRS Pension liability 10,382,088 (1,815,824) 8,566,264
Miami Dade County debt 214,236 214,236
Long-term liability legal 800,000 497,602 1,297,602
Total other long-term debt 13,138,747 793,970 (1,910,916) 12,021,800
Total Governmental Activities $ 27,252,887 $ 793,970 $ (716,686) $ (1,910,916) $ 25,419,254 $ 770,808
Business Type Activities
State Revolving Loan CS12080003P $ 623,933 $ $ (88,232) $ $ 535,701 $ 90,926
State Revolving Loan WW800050 1,404,765 (118,198) 1,286,567 120,013
State Revolving Loan DW130330 92,465 (8,672) 83,793 10,043
State Revolving Loan SW130320 176,385 (9,184) 167,201 8,867
State Revolving Loan WW130300 493,984 (23,331) 470,653 23,077
State Revolving Loan WW130301 1,907,641 669,307 2,576,948 166,545
State Revolving Loan DW130331 130,280 56,609 186,889 62,124
Total State Revolving Loans 4,699,173 799,587 (247,617) 56,609 5,307,753 481 595
Other debt:
Capital lease obligation 114,316 (74,828) 39,488 39,488
Total leases 114,316 (74,828) 39,488 39,488
Compensated absences 168,826 - (61,031) 107,795 -
OPEB 68,280 12,868 81,148
Long-term debt - MDC 5,356,061 5,356,061
FRS Pension liability 1,415,740 - - (247,613) 1,168,127
Total other long-term debt 1,652,846 5,368,929 (308,644) 6,713,131
Total Business Type Activities $ 6,466,335 $ 6,168,516 $ (322,445) $ (252,035) $ 12,060,372 $ 521,083
- 39 -
CITY OF OPA-LOCKA, FLORIDA
NOTES TO THE BASIC FINANCIAL STATEMENTS
FISCAL YEAR ENDED SEPTEMBER 30, 2017
NOTE 9. LONG-TERM DEBT (Continued)
For governmental activities, compensated absences are generally liquidated by the General Fund.
Long -Term Debt — Governmental Activities
Long-term debt of the City's governmental activities, excluding compensated absences and capital
leases, include the:
(a) Series 2011 A&B Capital Improvement Revenue bonds, bearing annual interest rates on the
Series A and Series B bonds range from approximately 3.31 % to 3.89%, and are payable
from a pledge of Grantee Entitlement Revenues which must be shared by the State of Florida,
in annual principal installments ranging from $445,000 in 2017 to $670,000 through 2026.
(b)
Series 2015 Capital Improvement Revenue Note ("2015 Note") - for $8,600,000, bearing
interest at a rate of 2.65% to 4.25%, with a maturity date of July 1, 2025, and are payable by
a lien on Pledge Revenues as defined by the terms of the Series 2015 Note agreement.
The Series 2014 Capital Improvement Revenue Note was paid off in May 2015 and replaced by
the Series 2015 Bond for the purchase of Town Center One, the New City Hall.
Long -Term Debt - Business -Type Activities
Long-term debt of the City's business -type activities, excluding compensated absences, consists of
the following:
(a) State Revolving Loan Note Project No. CS 12080003P as amended - for $1.827 million,
bearing interest at a rate of 2.56% and 1.54%, due in 40 semi-annual payments of $53,240,
including interest, from June 15, 2003 through December 15, 2022, secured by a lien on
Pledge Revenues as defined by the State Revolving Fund loan agreement.
(b)
State Revolving Loan Note Project No. WW800050 - for $2.375 million, bearing interest at
a rate of 1.53%, due in 40 semi-annual payments of $71,143, including interest, secured by
a lien on Pledge Revenues as defined by the State Revolving Fund loan agreement.
(c) Various Capital agreements with the Ford Motor Company in the original total amount of
$354,863 commencing March 15, 2013 and June 14, 2013. Interest payable at 3.79% and
4.00% respectively. Principal and interest payments due monthly in the amounts of
approximately $4,001 and $3,119 through May and February 2018, respectively.
(d) State Revolving Loan Note Project No. WW130300 — for $512,806, bearing interest at a rate
of 1.63%, due in 40 semi-annual payments of $15,644, including interest, secured by a lien
on Pledge Revenues as defined by the State Revolving Fund loan agreement.
- 40 -
CITY OF OPA-LOCKA, FLORIDA
NOTES TO THE BASIC FINANCIAL STATEMENTS
FISCAL YEAR ENDED SEPTEMBER 30, 2017
NOTE 9. LONGTERM DEBT (Continued)
Long -Term Debt - Business -Type Activities (cont'd)
(e) State Revolving Loan Note Project No. SW130320 — for $197,035, bearing interest at a rate
of 1.63%, due in 40 semi-annual payments of $6,011, including interest, secured by a lien on
Pledge Revenues as defined by the State Revolving Fund loan agreement.
(f)
(g)
State Revolving Loan Note Project No. DW 130330 — for $240,000, bearing interest at a rate
of 2.53%, due in 40 semi-annual payments of $6,011, including interest, secured by a lien on
Pledge Revenues as defined by the State Revolving Fund loan agreement.
State Revolving Loan Note Project No. WW 130301- for $16.895 million, interest -free, due
in forty (40) semi-annual payments of $430,845, from July 15, 2018 through June 15, 2032,
including interest, secured by a lien on pledged revenues as defined by the State Revolving
Fund loan agreement.
(h) State Revolving Loan Note Project No. DW130331- for $2,745,981 million, bearing interest
at a rate of 1.21 %, due in 40 semi-annual payments of $79,075, from July 15, 2018 until all
amounts have been fully paid, secured by a lien on pledged revenues as defined by the State
Revolving Fund loan agreement.
(i)
In August 4, 2017, the City entered into an agreement with Miami -Dade County ("the
County") for (1) sewer disposal service, (2) administering the meter reading, billing and
collection of water, sanitary sewage and stormwater utility charges, and (3) acknowledging
delinquent charges and repay at a rate of three percent (3%) annual interest rate, in monthly
payments for sixty (60) months to re -pay past due debt owed as of March 15, 2017. As of
September 30, 2017, the total debt outstanding was $5,570,297, with monthly payments of
$100,090.95.
Annual debt service requirements to maturity for debt outstanding, other than the capital leases, are
as follows:
Governmental Activities Business - Type Activities
Fiscal Year Ending September 30, Principal Interest Principal Interest
2018 $ 744,958 $ 465,933 $ 544,096 $ 85,721
2019 770,390 439,780 890,096 106,446
2020 797,140 412,708 1,778,170 219,271
2021 825,221 384,676 1,817,423 180,019
2022 853,646 355,653 1,857,804 139,638
2023-2028 9,380,249 893,789 5,966,820 288,451
Thereafter 4,948,569 114,334
$ 13,371,604 $ 2,952,539 $ 17,802,978 $ 1,133,880
-41 -
CITY OF OPA-LOCKA, FLORIDA
NOTES TO THE BASIC FINANCIAL STATEMENTS
FISCAL YEAR ENDED SEPTEMBER 30, 2017
NOTE 9. LONGTERM DEBT (Continued)
Summary of Debt Covenants
Series 2011A and Series 2011B Capital Improvement Revenue Bonds — Debt service is provided
by a pledge of guaranteed state revenue sharing funds, local option gas tax revenues, and the half -
cent sales tax. Reserves must be maintained equal to the maximum bond service requirement. At
September 30, 2017, the City had on deposit with the trustee for these bonds, a reserve account
insurance policy which unconditionally and irrevocably guarantees the full and complete payment
required to be made by or on the behalf of the City.
On June 3, 2014 - as authorized by City Ordinance No. 13-40 - the City entered into an agreement
with City National Bank of Florida for the issuance of the Series 2014 Capital Improvement
Revenue Note for the purpose of acquiring, construction, installation and equipping an
administration building. Debt service is provided by a pledge of guaranteed state communications
services tax revenues, public service tax revenues and all investment income except for Rebate
fund. In May 2015, this was rolled up into the Series 2015 Note.
Pledged Revenues - the City's agreement under the State of Florida Revolving Loan Fund Program
requires the City to generate Pledged Revenues, as defined by the agreement, from the services
furnished by its water and sewer systems equal to or exceeding 1.15 times the sum of the
semiannual loan payments. As of September 30, 2017, the City is in compliance with this
requirement.
The amount of long-term debt that can be incurred by the City is limited by the charter of the City.
Total general obligation bond of the City outstanding in any one fiscal year can be no greater than
15% of the assessed value of taxable property as of the beginning of the fiscal year. As of September
30, 2017, the amount of bonds outstanding and notes payable exclusively from the revenues of a
municipal project was less than 5% of property assessments as of September 30, 2017.
Bonds payable exclusively from the revenue of a municipal project may be issued and outstanding
without regard to the 15% limitation; however, such an issue would be subject to the limitations
imposed by the City's charter with respect to restrictions on bonds parity with or junior to the Series
2011A and Series 2011B Capital Improvement Revenue Bonds.
NOTE 10. RETIREMENT PLANS
All of the City's employees participate in the Florida Retirement System (1-AS). 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 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 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
regularly established position for a Florida. state agency, county government, district school board,
state university, community college, or a participating city or special district. The FRS provides
retirement and disability benefits, annual cost -of -living adjustments, and death benefits to plan
members and beneficiaries. The Florida Legislature established and may amend the contribution
requirements and benefit terms of all FRS plans.
- 42 -
CITY OF OPA-LOCKA, FLORIDA
NOTES TO THE BASIC FINANCIAL STATEMENTS
FISCAL YEAR ENDED SEPTEMBER 30, 2017
NOTE 10. RETIREMENT PLANS (Continued)
The plan administrator for FRS prepares and publishes its own stand-alone comprehensive annual
fmancial report, including financial statements and required supplementary information. Copies of
this report can be obtained from the Department of Management Services, Division of Retirement,
Bureau of Research and Member Communications, P.O. Box 9000, Tallahassee, Florida 32315-
9000; or at the Division's website (www.frs.myflorida.com).
A. Pension Plan - Florida Retirement System (FRS)
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.
The general classes of membership for the City are as follows:
• Regular Class - Members of the FRS who do not qualify for membership in the other classes.
• Senior Management Service Class (SMSC) - Members in senior management level positions
• Special Risk Class - Members who are employed as law enforcement officers
Employees enrolled in the Pension Plan prior to July 1, 2011, vest after six years of creditable
service, and employees enrolled in the Pension Plan on or after July 1, 2011, vest after eight years
of creditable service. Regular Class and SMSC members initially enrolled in the Pension Plan
before July 1, 2011, once vested, are eligible for normal retirement benefits at age 62 or at any age
after 30 years of creditable service. Members in these classes initially enrolled in the Pension Plan
on or after July 1, 2011, once vested, are eligible for normal retirement benefits at age 65 or any
time after 33 years of creditable service. Early retirement may be taken any time after vesting within
20 years of normal retirement age; however, a 5.0% benefit reduction is imposed for each year
prior to the normal retirement age.
DROP is available under the Pension Plan when the member first reaches eligibility for normal
retirement. The DROP allows a member to retire while continuing employment for up to 60 months.
While in the DROP, the member's retirement benefits accumulate in the FRS Trust Fund increased
by a cost -of -living adjustment each July and earn monthly interest equivalent to an annual rate of
1.30%. DROP participants with an effective DROP commencement date before July 1, 2011, earn
monthly interest equivalent to an annual rate of 6.50%.
Benefits Provided - Benefits under the Pension Plan are computed on the basis of age and/or years
of service, average final compensation, and service credit. Credit for each year of service is
expressed as a percentage of the average final compensation. For members initially enrolled before
July 1, 2011, the average final compensation is the average of the five highest fiscal years' earnings;
for members initially enrolled on or after July 1, 2011, the average final compensation is the average
of the eight highest fiscal years' earnings. The total percentage value of the benefit received is
determined by calculating the total value of all service, which is based on the retirement plan and/or
class to which the member belonged when the service credit was earned. The following chart shows
the percentage value for each year of service credit earned.
- 43 -
CITY OF OPA-LOCKA, FLORIDA
NOTES TO THE BASIC FINANCIAL STATEMENTS
FISCAL YEAR ENDED SEPTEMBER 30, 2017
NOTE 10. RETIREMENT PLANS (Continued)
A. Pension Plan - Florida Retirement System (FRS) (cont'd)
% Value
Class. Initial Enrollment, and Retirement Age/Years of Service (Per Year of Service)
Regular Class Members Initially Enrolled Before July 1, 2011
Retirement up to age 62 or up to 30 years of service 1.60%
Retirement at age 63 or with 31 years of service 1.63%
Retirement at age 64 or with 32 years of service 1.65%
Retirement at age 65 or with 33 or more years of service 1.68%
Regular Class Members Initially Enrolled On or After July 1, 2011
Retirement up to age 65 or up to 33 years of service 1.60%
Retirement at age 66 or with 34 years of service 1.63%
Retirement at age 67 or with 35 years of service 1.65%
Retirement at age 68 or with 36 or more years of service 1.68%
Special Risk Class
Service from Dec. 1, 1970 through Sept. 30, 1974 2.00%
Service on and after Oct. 1, 1974 3.00%
Senior Management Service Class 2.00%
The benefits received by retirees and beneficiaries are increased by a COLA each July based on
their June benefit amount. For retirees who have been retired for less than 12 months on July 1, the
first COLA increase is prorated. The COLA applies to all continuing monthly retirement benefits
paid under the FRS Pension Plan (i.e., normal and early service retirement benefits and benefits
accruing in participant accounts under the DROP, disability retirement benefits, and survivor
benefits). The COLA for retirements or DROP participation effective before August 1, 2011, is 3
percent per year. The COLA formula for retirees with an effective retirement date or DROP begin
date on or after August 1, 2011, will be the sum of the pre -July 2011 service credit divided by the
total service credit at retirement multiplied by 3 percent. Each Pension Plan member with an
effective retirement date of August 1, 2011, or after will have an individual COLA factor for
retirement. FRS Pension Plan members initially enrolled on or after July 1, 2011, will not have a
COLA after retirement.
- 44 -
CITY OF OPA-LOCKA, FLORIDA
NOTES TO THE BASIC FINANCIAL STATEMENTS
FISCAL YEAR ENDED SEPTEMBER 30, 2017
NOTE 10. RETIREMENT PLANS (Continued)
A. Pension Plan - Florida Retirement System (FRS) (cont'd)
Contributions - Effective July 1, 2011, all enrolled members of the Pension Plan, other than DROP
participants, are required to contribute 3.0% of their salary to the Pension Plan. In addition to member
contributions, governmental employers are required to make contributions to the Pension Plan based
on state-wide contribution rates established by the Florida Legislature. These rates are updated as of
July 1 of each year. The employer contribution rates by job class for the fiscal year 2016-2017 are as
follows:
Employee Employer Total
Class Contribution Rate Contribution Rate* Contribution Rate
Regular 3.00% 5.80% 8.80%
Senior Management 3.00% 20.05% 23.05%
Special Risk 3.00% 20.85% 23.85%
DROP N/A 11.33% 11.33%
*These rates include the normal cost and unfunded actuarial liability contributions but do not include
the 1.66 percent contribution for the Retiree Health Insurance Subsidy and the fee of 0.06 percent for
administration of the FRS Investment Plan and provision of educational tools for both plans.
For the fiscal year ending September 30, 2017, contributions, including employee contributions, to
the Pension Plan for the City totaled $852,437.
Pension Liabilities, Pension Expense, and Deferred Outflows of Resources and Deferred Inflows
of Resources Related to Pensions. At September 30, 2017, the City reported a liability of
$7,651,779 for its proportionate share of the Pension Plan's net pension liability. The net pension
liability was measured as of June 30, 2017, and the total pension liability used to calculate the net
pension liability was determined by an actuarial valuation as of July 1, 2017. The City's
proportionate share of the net pension liability was based on its share of the City's 2016-2017
fiscal year contributions relative to the 2015-2016 fiscal year contributions of all participating
members.
For the fiscal year ended September 30, 2017, the City recognized pension expense of $1,177,526.
In addition, the City reported deferred outflows of resources and deferred inflows of resources
related to pensions from the following sources:
Differences between expected and actual experience
Change of Assumptions
Net difference between projected and actual earnings on
Pension Plan investments
Changes in proportion and differences between Pension Plan contributions
and proportionate share of contributions
Pension Plan contributions subsequent to the measurement date
Total
-45-
Deferred Outflows Deferred Inflows
of Resources of Resources
$ 702,249 $ ( 42,387)
2,571,538
(189,630)
400,973 (1,236,240)
179,012
$ 3,853,772 $ ( 1,468,257)
CITY OF OPA-LOCKA, FLORIDA
NOTES TO THE BASIC FINANCIAL STATEMENTS
FISCAL YEAR ENDED SEPTEMBER 30, 2017
NOTE 10. RETIREMENT PLANS (Continued)
A. Pension Plan - Florida Retirement System (FRS) (cont'd)
The deferred outflows of resources related to the Pension Plan, totaling $179,012 for the City,
resulting from contributions to the Plan subsequent to the measurement date will be recognized as
a reduction of the net pension liability in the fiscal year ended September 30, 2017. Other amounts
reported as deferred outflows of resources and deferred inflows of resources related to the Pension
Plan will be recognized in pension expense as follows:
For the Year Ending September 30, Deferred Outflows/(Inflows) Net
2018 $ 193,587
2019 551,832
2020 534,407
2021 (52,682)
2022 306,460
Thereafter 672,899
Total $ 2,206,503
Actuarial Assumptions — The total pension liability in the June 30, 2017, actuarial valuation was
determined using the following actuarial assumptions:
Inflation 2.60%
Salary Increases 3.25% average, including inflation
Investment Rate of Return 7.10%, net of pension plan investment expense, including inflation
Mortality rates were based on the Generational RP-2000 with Projection Scale BB tables.
The actuarial assumptions used in the July 1, 2017, valuation were based on the results of an
actuarial experience study for the period July 1, 2008, through June 30, 2013.
- 46 -
CITY OF OPA-LOCKA, FLORIDA
NOTES TO THE BASIC FINANCIAL STATEMENTS
FISCAL YEAR ENDED SEPTEMBER 30, 2017
NOTE 10. RETIREMENT PLANS (Continued)
A. Pension Plan - Florida Retirement System (FRS) (cont'd)
The long-term expected rate of return on Pension Plan investments was not based on historical
returns but, instead, is based on a forward -looking capital market economic model. The allocation
policy's description of each asset class was used to map the target allocation to the asset classes
shown below. Each asset class assumption is based on 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:
Target Annual Compound Annual Standard
Asset Class Allocation* Arithmetic Return (Geometric) Return Deviation
Cash 1.00% 30% 3.0% 1.8%
Fixed Income 18.00% 4.5% 4.4% 4.2%
Global Equity 53.00% 7.8% 6.6% 17.0%
Real Estate (Property) 10.00% 6.6% 5.9% 12.8%
Private Equity 6.00% 11.5% 7.8% 30.0%
Strategic Investments 12.00% 6.1% 5.6% 9.7.1%
Total 100.00%
Assumed Inflation — Mean
2.6% 1.9%
*As outlined in the Pension Plan's investment policy.
Discount Rate — The discount rate used to measure the total pension liability was 7.10%. 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 Proportionate Share of the Net Position Liability to Changes in the Discount Rate
— The following represents the City's proportionate share of the net pension liability calculated
using the discount rate of 7.10%, as well as what the proportionate share of the net pension liability
would be if it were calculated using a discount rate that is one percentage point lower (6.10%) or
one percentage point higher (8.10%) than the current rate:
1 % Current 1 %
Decrease Discount Rate Increase
6.10% 7.10% 8.10%
City's proportionate share of the net pension liability $13,849,257 $7,651,779 $2,506,452
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.
Payables to the Pension Plan - At September 30, 2017, the City had no outstanding payables of to
the Pension Plan for contributions to the Pension Plan required for the fiscal year ended September
30, 2017.
- 47 -
CITY OF OPA-LOCKA, FLORIDA
NOTES TO THE BASIC FINANCIAL STATEMENTS
FISCAL YEAR ENDED SEPTEMBER 30, 2017
NOTE 10. RETIREMENT PLANS (Continued)
B. Retiree Health Insurance Subsidy Program (HIS)
Plan Description - The HIS Plan is a cost -sharing multiple -employer defined benefit pension plan
established under Section 112.363, Florida Statutes, and may be amended by the Florida
Legislature at any time. The benefit is a monthly payment to assist retirees of state administered
retirement systems in paying health insurance costs and is administered by the Florida Department
of Management Services, Division of Retirement.
Benefits Provided - For the fiscal year ended September 30, 2017, eligible retirees and beneficiaries
received a monthly HIS payment of $5 for each year of creditable service completed at the time of
retirement, with a minimum HIS payment of $30 and a maximum HIS payment of $150 per month.
To be eligible to receive these benefits, a retiree under a state administered retirement system must
provide proof of health insurance coverage, which may include Medicare.
Contributions - The HIS Plan 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, 2017, the HIS contribution
rate for the period October 1, 2016 through September 30, 2017, was 1.66% of payroll pursuant to
section 112.363, Florida Statutes. The City contributed 100% of its statutorily required
contributions for the current and preceding three years. HIS Plan contributions are deposited in a
separate trust fund from which payments are authorized. HIS Plan 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 cancelled.
For the fiscal year ending September 30, 2017, contributions to the HIS Plan for the City totaled
$129,528.
Pension Liabilities, Pension Expense, and Deferred Outflows of Resources and Deferred Inflows
of Resources Related to Pensions - At September 30, 2017, the City reported a liability of
$2,082,612 for its proportionate share of the HIS Plan's net pension liability. The net pension
liability was measured as of June 30, 2017, and the total pension liability used to calculate the net
pension liability was determined by an actuarial valuation as of July 1, 2017. The City's
proportionate share of the net pension liability was based its share of the City's 2016-2017 fiscal
year contributions relative to the 2015-2016 fiscal year contributions of all participating members.
For the fiscal year ended September 30, 2017, the City recognized pension expense of $128,338.
In addition, the City reported deferred outflows of resources and deferred in flows of resources
related to pensions from the following sources:
Deferred Outflows Deferred Inflows
of Resources of Resources
Differences between expected and actual experience $ 292,744 $ (4,336)
Change of Assumptions 1,155 (180,086)
Changes in proportion and differences between Pension Plan
contributions and proportionate share of contributions 190,604 (901,808)
Pension Plan contributions subsequent to the measurement date 26,448
Total $ 510,951 $ (1,086,230)
- 48 -
CITY OF OPA-LOCKA, FLORIDA
NOTES TO THE BASIC FINANCIAL STATEMENTS
FISCAL YEAR ENDED SEPTEMBER 30, 2017
NOTE 10. RETIREMENT PLANS (Continued)
B. Retiree Health Insurance Subsidy Program (HIS) (cont'd)
The deferred outflows of resources related to the HIS Plan, totaling $26,448 for the City, resulting
from contributions to the HIS Plan subsequent to the measurement date, will be recognized as a
reduction of the net pension liability in the fiscal year ended September 30, 2017. Other amounts
reported as deferred outflows of resources and deferred inflows of resources related to the HIS
Plan will be recognized in pension expense as follows:
For the Year Ending September 30, Deferred Outflows/(Inflows) Net
2018 $ (68,493)
2019 (68,711)
2020 (68,816)
2021 (77,277)
2022 (92,626)
Thereafter (225,804)
Total $ (601,727)
Actuarial Assumptions — Actuarial valuations for the HIS plan are conducted biennially. The July
1, 2016 HIS valuation is the most recent actuarial valuation and was used to develop the liabilities
for June 30, 2017.
Liabilities originally calculated as of the actuarial valuation date have been recalculated as of a later
GASB Measurement Date using standard actuarial roll forward procedures.
The total pension liability as of June 30, 2017 was determined using the following actuarial
assumptions:
Inflation 2.60%
Salary Increases 3.25% average, including inflation
Investment Rate of Return 3.58%, net of pension plan investment expense, including inflation
Mortality rates were based on the Generational RP-2000 with Projection Scale BB tables.
The actuarial assumptions that determine the total pension liability as of June 30, 2017 were based
on the results of an actuarial experience study for the period July 1, 2008 through June 30, 2013.
- 49 -
CITY OF OPA-LOCKA, FLORIDA
NOTES TO THE BASIC FINANCIAL STATEMENTS
FISCAL YEAR ENDED SEPTEMBER 30, 2017
NOTE 10. RETIREMENT PLANS (Continued)
B. Retiree Health Insurance Subsidy Program (HIS) (coot' d)
Discount Rate - The discount rate used to measure the total pension liability at June 30, 2017 was
3.58. 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 benefit is essentially funded on a pay-as-you-go basis, the
depletion date is considered to be immediate, and the single equivalent discount rate is equal to the
municipal bond rate selected by the HIS Plan sponsor. The Bond Buyer General Obligation 20-Bond
Municipal Bond Index was adopted as the applicable municipal bond index. The discount rate used
in the 2017 valuation was updated from 2.85% to 3.58% reflecting the change in the Bond Buyer
General Obligation 20-Bond municipal Bond Index as of June 30, 2017.
Sensitivity of the Proportionate Share of the Net Position Liability to Changes in the Discount Rate
- The following represents the City's proportionate share of the net pension liability calculated
using the discount rate of 3.58%, as well as what the proportionate share of the net pension liability
would be if it were calculated using a discount rate that is one percentage point lower (2.58%) or
one percentage point higher (4.58%) than the current rate:
1 % Current 1 %
Decrease Discount Rate Increase
2.58% 3.58% 4.58%
City's proportionate share of the net pension liability $2,376,536 $2,082,612 $1,837,789
Pension Plan Fiduciary Net Position - Detailed information regarding the HIS Plan's fiduciary net
position is available in the separately issued FRS Pension Plan and Other State -Administered
Systems Comprehensive Annual Financial Report.
C. Investment Plan
The SBA administers the defined contribution plan officially titled the FRS Investment Plan. The
Investment Plan 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 defined benefit pension plan. City employees participating in DROP
are not eligible to participate in the Investment Plan. Employer 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.
The Investment Plan is funded with the same employer and employee contribution rates that are based
on salary and membership class, as the Pension Plan. Contributions are directed to individual member
accounts, and the individual members allocate contributions and account balances among various
approved investment choices. Costs of administering the Investment Plan, including the FRS
Financial Guidance Program, are funded through an employer contribution of 0.04 percent of payroll
and by forfeited benefits of plan members.
- 50 -
CITY OF OPA-LOCKA, FLORIDA
NOTES TO THE BASIC FINANCIAL STATEMENTS
FISCAL YEAR ENDED SEPTEMBER 30, 2017
NOTE 10. RETIREMENT PLANS (Continued)
C. Investment Plan (cont'd)
Allocations to the investment member's accounts during the 2016-17 fiscal year, as established by
Section 121.72, Florida Statutes, are based on a percentage of gross compensation, by class, as
follows:
Membership Class Percentage of Gross Compensation
FRS Regular 6.30%
FRS Senior Manager Service 7.67%
FRS Special Risk 14.00%
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. 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. 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 the account. If the employee does not return
within the five-year period, the employee will forfeit the accumulated account balance. For the
fiscal year ended September 30, 2017, 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 City.
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 elect any combination of these
options. Disability coverage is provided; the member may either transfer the account balance to the
Pension Plan when approved for disability retirement to receive guaranteed lifetime monthly
benefits under the Pension Plan, or the member may remain in the Investment Plan and rely upon
that account balance for retirement income.
The Investment Plan pension expense for the City totaled $121,925, for the fiscal year ended
September 30, 2017.
At September 30, 2017, the City has no outstanding contributions to the Investment Plan required
for the fiscal year ended September 30, 2017.
- 51 -
CITY OF OPA-LOCKA, FLORIDA
NOTES TO THE BASIC FINANCIAL STATEMENTS
FISCAL YEAR ENDED SEPTEMBER 30, 2017
NOTE 11. RELATIONSHIP WITH THE COUNTY
In 1955, the Florida Legislature approved and submitted to a general election a constitutional
amendment designed to give a new form of government to the County of Miami -Dade. The County is,
in effect, a municipality with governmental powers effective upon more than 29 cities, including the
City, and the unincorporated areas. It has not displaced or replaced the cities, but supplements them. The
County can take over particular activities of the City's operations if (1) the services fall below minimum
standards set by the County Commission, or (2) with the consent of the governing body of the City.
Since its inception, the County has assumed responsibility for a number of functions, including
county -wide police services, complementing county -wide fire protection; consolidated two-tier
court system; creation of the various surface transportation programs; installation of a central traffic
control computer system; merging all public transportation systems into a county system; and
centralization of the property appraiser and tax collector functions.
NOTE 12. COMNHTMENTS AND CONTINGENCIES
Water Supply and Sewer Services Contract
In February 1985, the City entered into an agreement with Miami -Dade Water and Sewer Authority
(the "Authority") for the purpose of providing to the City all of its potable water supply and sewer
services for a period of thirty (30) years subject to termination at any time by operation of law or
by mutual consent of the City and the Authority. For the year ended September 30, 2017 and 2016,
the City purchased water and sewer services totaling $4,078,651 and $4,029,094 respectively, from
the Authority under the terms of this agreement.
Various other claims and lawsuits, which arose in the normal course of operations, are pending
against the City and are summarized below:
THREATENED LITIGATION, CLAIMS AND ASSESSMENTS
The City is involved in litigation and additional claims have been asserted against the City which
are not being handled by the City Attorney's office and third party attorneys. A multiple number
of cases remain outstanding assessing damages which range to as much as $12 million. In City
most cases the City anticipates that its insurance carrier will cover the damages. Please consult
with the City's City Attorney and Risk Manager for further information regarding such claims and
lawsuits, which arose in the normal course of operations, are pending against the City. In the
opinion of management, based on the advice of the City's Attorney, the outcome of these actions
is not known. No provision for liability, if any, has been accrued on the financial position and
results of operations of the City.
- 52 -
CITY OF OPA-LOCKA, FLORIDA
NOTES TO THE BASIC FINANCIAL STATEMENTS
FISCAL YEAR ENDED SEPTEMBER 30, 2017
NOTE 12. COMMITMENTS AND CONTINGENCIES (Continued)
Contingencies
The City participates in a number of Federal and State grant programs in accordance with the
provisions of the Uniform Guidance and the State of Florida Single Audit Act. Pursuant to those
provisions, financial assistance programs were tested for compliance with applicable grant
requirements. These programs may be subjected to financial and compliance audits by the grantors
or their representatives. The possible disallowance of any item charged to the program or request for
the return of already collected funds may be disallowed by the grantor agency. In the opinion of
management, future disallowances, if any, of grant program expenditures would not have a material
adverse effect on the financial condition of the City.
NOTE 13. OTHER POST -EMPLOYMENT BENEFITS
Pursuant to Section 112.081, Florida Statutes, the City is required to permit eligible retirees and
their eligible dependents to participate in the City's health insurance program at a cost to the retiree
that is no greater than the cost at which coverage is available for active employees. The City does
not provide retirees with any subsidy for this benefit.
The City elected to establish an irrevocable other post -employment benefit ("OPEB") trust and
began funding the obligation during fiscal year 2009, leaving no unfunded obligation.
Plan Description: On September 17, 2008, the City established the OPEB Trust, a single employer
defined benefit health care plan to all of its employees except for part-time employees and full-time
employees who either resign or are terminated. The City is authorized to establish and amend
benefit levels, subject to minimum requirements set forth by Florida Statutes, and to approve the
actuarial assumptions used in the determination of contribution levels. The plan does not issue a
separate financial report.
Based on GASB Statement 45 which sets forth the guidelines and a future implementation timetable
for reporting and disclosure of Other Post -Employment Benefits ("OPEB"), the City had an actuary
calculate future funding requirements for fiscal year 2017. The actuary's estimate, using the
projected unit credit cost method, included other actuarial assumptions as classified below. The
City elected to implement the provisions of GASB 45 prospectively.
Actuarial Methods and Assumptions
The actuarial valuation of the calculation of OPEB involves estimates of the value of reported
amounts and assumptions about the probability of events in the future. 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 to past expectations and new estimates
are made about the future. The required schedule of funding progress is designed to provide multi-
year trend information to show whether the actuarial value of plan assets is increasing or decreasing
over time relative to the actuarial accrued liability for benefits. However, the City has not
contributed assets to the plan at this time and has elected to fund the plan on a pay -as -you go
method.
- 53 -
CITY OF OPA-LOCKA, FLORIDA
NOTES TO THE BASIC FINANCIAL STATEMENTS
FISCAL YEAR ENDED SEPTEMBER 30, 2017
NOTE 13. OTHER POST -EMPLOYMENT BENEFITS (Continued)
Actuarial Methods and Assumptions (cont'd)
Projections of benefits for financial reporting purposes are based on the substantive plan (the plan
as understood by the City and plan members) and include the types of benefits in force at the
valuation date and the historical pattern of sharing benefit costs between the City and the plan
members to that point. Actuarial calculations reflect a long-term perspective and employ methods
and assumptions that are designed to reduce short-term volatility in actuarial accrued liabilities and
the actuarial value of assets.
Significant methods and assumptions were as follows:
Actuarial valuation date
Actuarial cost method
Amortization method
Remaining amortization period
Investment return
Healthcare cost trend rate(s)
Select rates
Ultimate rate
Funding Policy
October 1, 2015
Projected unit credit
Level -dollar payment
15-year, open period; level -dollar payment
4.00% per annum
(Includes 2.75% inflation)
Insurance Premiums
8.0% for 2015/16 graded
to 5.50% for 2020/21
5.00% per annum
The City does not directly make a contribution to the plan on behalf of retirees. Retirees and their
beneficiaries pay the same group rates as are charged to the City for active employees by its healthcare
provider. However, the City's actuaries, in their actuarial valuation, calculate an offset to the cost of
these benefits as an Employer Contribution, based upon an implicit rate subsidy. This offset equals
the total age -adjusted costs paid by the City or its active employees for coverage of the retirees and
their dependents for the year net of the retiree's own payments for the year.
- 54 -
CITY OF OPA-LOCKA, FLORIDA
NOTES TO THE BASIC FINANCIAL STATEMENTS
FISCAL YEAR ENDED SEPTEMBER 30, 2017
NOTE 13. OTHER POST -EMPLOYMENT BENEFITS (Continued)
Annual OPEB Cost and Net OPEB Obligation
The annual other post -employment benefit (OPEB) cost is calculated based on the annual required
contribution ("ARC') of the employer, an amount actuarially determined in accordance with GASB
Statement No. 45. The annual required contribution represents a level of funding that, if paid on an
ongoing basis, is projected to cover normal cost each year and to amortize any unfunded actuarial
liabilities over a period not to exceed twenty years.
Required Contribution Rates:
Employer Pay-as-you-go
Plan Member N/A
Annual Required Contribution (ARC) $ 138,000
Interest on net OPEB obligation 23,000
Adjustment to the ARC (49,000)
Annual OPEB cost 112,000
Employer contributions (17,000)
Increase in net OPEB obligation (asset) 95,000
Net OPEB obligation (asset ) - beginning of the year 569,000
Net OPEB obligation $ 664,000
The $17,000 represents an actuarial estimate only and does not represent a physical contribution.
Trend information gives an indication of the progress made in accumulating sufficient assets to
pay benefits when due. Two year information (three year is not available) for fiscal years ended
September 30, is presented as follows:
Percentage of Annual Net OPEB
Fiscal Year Ended September 30, Annual OPEB Cost OPEB Cost Contributed Obligation (Asset)
2016 $ 109,000 9% $ 569,000
2017 $ 112,000 15% $ 664,000
Funded Status and Funding Progress: The schedule of funding progress, presented as RSI
following the notes to the fmancial statements, presents multiyear trend information about
whether the actuarial value of plan assets are increasing or decreasing over time relative to the
actuarial accrued liability for benefits. An analysis of funding progress (the last plan year
valuation date) is as follows:
Actuarial
Actuarial Actuarial Accrued Unfunded UAAL as a
Valuation Value Liability AAL Funded Covered Percentage of
Date of Assets (AAL) (UAAL) Ratio Payroll Payroll
(a) (b) (b) - (a) (a)/(b) (c) ((b-a)/c)
1-Apr-14 $0 $766,000 $766.000 0% $9,139,000 8.4%
1-Oct-15 $0 $603,000 $603,000 0% $6,020,000 10.0%
- 55 -
CITY OF OPA-LOCKA, FLORIDA
NOTES TO THE BASIC FINANCIAL STATEMENTS
FISCAL YEAR ENDED SEPTEMBER 30, 2017
NOTE 14. DEFERRED COMPENSATION PLAN
The City offers its employees a deferred compensation plan (the "Plan"), which is administered by
two administrators. The portion of the plan administered by the International City Management
Association Retirement Corporation ("ICMA") was created in accordance with Internal Revenue
Code Section 457 (a qualified plan). The other portion constitutes a nonqualified plan benefit and
is administered by the Equitable Life Assurance Society ("Equitable"). The Plan, available to all
City employees, permits them to defer a portion of their salary until future years. Participation in
this plan is optional. The deferred compensation is not available to employees until termination,
retirement, death or unforeseeable emergency.
All assets and income of the Plan are held in trust for the exclusive benefits of the participants. The
City makes no investment decisions and has no fiduciary responsibilities regarding the Plan;
therefore, the assets and liabilities of the Plan are not included in the City's financial statements as
September 30, 2017.
NOTE 15. RISK MANAGEMENT
The government is exposed to various risks of loss related to torts; theft of, damage to, and
destruction of assets; errors and omissions; injuries to employees; and natural disasters for which
the City carries commercial insurance. The City has not had a significant reduction in insurance
coverage from coverage in the prior year by major categories of risk, and settled claims have not
exceeded the City's retention and excess coverage in force for each of the past three years.
NOTE 16. REQUIRED SUPPLEMENTARY INFORMATION
Under GASB Statement No. 34, budgetary comparison information is required to be presented for
the general fund and each major special revenue fund with a legally adopted budget. The City
adopts annual operating budgets for the general fund and all special revenue funds. Budget and
actual comparison for the General Fund is presented in the Required Supplementary Information
section of the report. Budget and actual comparisons for other funds are reflected in the Combining
Statements section.
NOTE 17. RESTATEMENT - PRIOR PERIOD ADJUSTMENTS
Government Activities — The City's net position of Government Activities as of September 30,
2016, has been restated for prior period adjustments. The net position decreased by $270,492
resulting from net adjustments to due /from other funds, cash, revenue, expenditures and other
errors related to prior year.
Business -Type Activities — The City's net position of Business Type -Activities as of September
30, 2016, has been restated for prior period adjustments. The net position increased by $301,563
for accounts due to and from other funds, cash, revenue, expenditures and other errors related to
prior year.
- 56 -
CITY OF OPA-LOCKA, FLORIDA
NOTES TO THE BASIC FINANCIAL STATEMENTS
FISCAL YEAR ENDED SEPTEMBER 30, 2017
NOTE 17. RESTATEMENT - PRIOR PERIOD ADJUSTMENTS (Continued)
The beginning net position of Government Activities and Business -type Activities were restated.
The net position of the Governmental Activities decreased by $270,492 while Business -type
Activities increased by $301,563, resulting from net adjustments to revenue, expenditures, cash
and other.
Restatement of Net Position
Net position, September 30, 2016, previously stated and reported
Prior period adjustment:
Correction of an error, effect of adjustment to revenue, expenditures and other
Net position, September 30, 2016, restated
NOTE 18. NEW ACCOUNTING PRONOUNCEMENTS ISSUED
Governmental
Activities
$ 4,906,119
Business -Type
Activities Total
$ 3,111,443 $ 8,017,562
(270.492) 301,563
$ 4,635,627 $ 3,413,006
Accounting Pronouncements — Adopted and Unadopted
31.071
$ 8,048,633
The Governmental Accounting Standards Board (GASB) has issued several pronouncements that
have effective dates in the future that may impact future financial presentations. Management has
not currently determined what, if any, effect implementation of the following statements may have
on the financial statements of the City.
GASB Statement No. 69, Government Combinations and Disposals of Government Operations,
establishes accounting and fmancial reporting standards related to government combinations and
disposals of government operations. The adoption resulted in no financial impact to the City.
GASB Statement No. 70, Accounting and Financial Reporting for Non -exchange Financial
Guarantees, requires a government that extends a non -exchange fmancial guarantee to recognize
a liability when qualitative factors and historical data, if any, indicate.
GASB Statement No. 71, Pension Transition for Contributions Made Subsequent to the
Measurement Date, addresses amounts associated with contributions, if any, made by a state or
local government employer or non -employer contributing entity to a defined benefit pension plan
after the measurement date of the government's beginning net pension liability.
GASB Statement No. 72, Fair Value Measurement and Application, was issued February 2015.
The Statement addresses accounting and financial reporting issues related to fair value
measurements. The provisions of this Statement will be effective for the City beginning with year
ending September 30, 2017.
GASB Statement No. 73, Accounting and Financial Reporting for Pensions and Related Assets
That Are Not Within the Scope of GASB Statement 68, and Amendments to Certain Provisions of
GASB Statement 67 and 68, was issued June 2015. This Statement improves the usefulness of
information about pensions included in the general purpose external fmancial reports of state and
local governments for making decisions and assessing accountability. The provisions of this
Statement will be effective for the City beginning with year ending September 30, 2017.
- 57 -
CITY OF OPA-LOCKA, FLORIDA
NOTES TO THE BASIC FINANCIAL STATEMENTS
FISCAL YEAR ENDED SEPTEMBER 30, 2017
NOTE 18. NEW ACCOUNTING PRONOUNCEMENTS ISSUED (Continued)
Accounting Pronouncements — Adopted and Unadopted (cont'd)
GASB Statement No. 74, Financial Reporting for Postemployment Benefit Plans Other Than
Pension Plans, was issued June 2015. This Statement improves the usefulness of information about
postemployment benefits other than pensions (other postemployment benefits or OPEB) included
in the general purpose external fmancial reports of state and local government OPEB plans for
making decisions and assessing accountability. The provisions of this Statement will be effective
for the City beginning with year ending September 30, 2017.
GASB Statement No. 75, Accounting and Financial Reporting for Postemployment Benefit Plans
Other Than Pensions, was issued June 2015. This Statement improves the accounting and financial
reporting by state and local governments for postemployment benefits other than pensions (other
postemployment benefits or OPEB). The provisions of this Statement will be effective for the City
beginning with year ending September 30, 2018.
GASB Statement No. 76, The Hierarchy of Generally Accepted Accounting Principles for State
and Local Governments, was issued June 2015. This Statement identifies the hierarchy of generally
accepted accounting principles (GAAP). The provisions of this Statement will be effective for the
City beginning with year ending September 30, 2017.
GASB Statement No. 77, Tax Abatement Disclosures, was issued August 2015. This Statement
requires certain financial reporting disclosures when a government enters into tax abatement
agreements. The provisions of this Statement will be effective for the City beginning with year
ending September 30, 2017.
GASB Statement No. 78, Pensions Provided through Certain Multiple -Employer Defined Benefit
Pension Plans, was issued December 2015. This Statement amends the scope and applicability of
Statement 68 and establishes requirements for recognition and measurement of pension expense,
expenditures, and liabilities; note disclosures; and required supplementary information for
pensions. The provisions of this Statement will be effective for the City beginning with year ending
September 30, 2017.
GASB Statement No. 79, Certain External Investment Pools and Pool Participants, was issued
December 2015. This Statement establishes additional note disclosure requirements for qualifying
external investment pools that measure all of their investments at amortized cost for financial
reporting purposes and for governments that participate in those pools. The provision of this
Statement will be effective for the City beginning with its year ending September 30, 2017, except
for certain provisions on portfolio quality, custodial credit risk, and shadow pricing. Those
provisions will be effective for the City beginning with year ending September 30, 2017.
GASB Statement No. 80, Blending Requirements for Certain Component Units, was issued January
2016. This Statement amends the blending requirements for the financial statement presentation of
component units of all state and local governments. The provisions of the Statement will be
effective for the City beginning with year ending September 30, 2017.
- 58 -
CITY OF OPA-LOCKA, FLORIDA
NOTES TO THE BASIC FINANCIAL STATEMENTS
FISCAL YEAR ENDED SEPTEMBER 30, 2017
NOTE 18. NEW ACCOUNTING PRONOUNCEMENTS ISSUED (Continued)
Accounting Pronouncements — Adopted and Unadopted (cont'd)
GASB Statement No. 81, Irrevocable Split -Interest Agreements, was issued in March 2016. This
Statement is to improve accounting and fmancial reporting for irrevocable split -interest agreements
by providing recognition and measurement guidance for situations in which a government is a
beneficiary of the agreement. The Statement is effective for financial statements for periods
beginning after December 15, 2016, and should be applied retroactively. Earlier application is
encouraged.
GASB Statement No. 82, Pension Issues — An Amendment of GASB Statements No. 67, No. 68 and
No. 73, was issued in March 2016. This Statement was issued to address certain issues that have
been raised with respect to Statements No. 67, Financial Reporting for Pension Plans, No. 68,
Accounting and Financial Reporting for Pensions and Related Assets That Are Not within the Scope
of GASB Statement 68, and Amendments to Certain Provisions of GASB Statements 67 and 68.
Specifically, this Statement addresses issues regarding (1) the presentation of payroll -related
measures in required supplementary information, (2) the selection of assumptions and the treatment
of deviations from the guidance in an Actuarial Standard of Practice for financial reporting
purposes, (and (3) the classification of payments made by employers to satisfy employee (plan
member) contribution requirements. The requirements of this Statement are effective for reporting
periods beginning after June 15, 2016, except for the requirements of paragraph 7 in a circumstance
in which an employer's pension.
GASB Statement No. 83, Certain Asset Retirement Obligations, was issued in November 2016 to
establish recognition and measurement guidance for assets not covered by existing GASB standards
by requiring the measurement and recognition of a legally enforceable liability for retirement of an
asset. This Statement applies to all state and local governments and is effective for reporting periods
beginning after June 15, 2018. Early application is encouraged.
GASB Statement No. 84, Fiduciary Activities, was issued in January 2017, to improve guidance
regarding the identification of fiduciary activities for accounting and fmancial reporting purposes
and how those activities should be reported. The effective date is for reporting periods beginning
after December 15, 2018.
GASB Statement No. 85, Omnibus 2017, was issued in March 2017, this Statement addresses a
variety of accounting and financial reporting issues identified during the implementation and
application of GASB pronouncements; issues related to blending component units, goodwill, fair
value measurement, pensions and other postemployment benefits (OPEB) are among them. The
provisions of Statement 85 are effective for periods beginning after June 15, 2017. Early adoption
is encouraged.
- 59 -
CITY OF OPA-LOCKA, FLORIDA
NOTES TO THE BASIC FINANCIAL STATEMENTS
FISCAL YEAR ENDED SEPTEMBER 30, 2017
NOTE 18. NEW ACCOUNTING PRONOUNCEMENTS ISSUED (Continued)
Accounting Pronouncements — Adopted and Unadopted (cont'd)
GASB Statement No. 86, Certain Debt Extinguishment Issues, was issued in May 2017. The
primary objective of this Statement is to improve consistency in accounting and financial reporting
for in -substance defeasance of debt by providing guidance for transactions in which cash and other
monetary assets acquired with only existing resources — resources other than the proceeds of
refunding debt - are placed in an irrevocable trust for the sole purpose of extinguishing debt. This
Statement also improves accounting and financial reporting for prepaid insurance on debt that is
extinguished and notes to financial statements for debt that is defeased in substance. The
requirements of this Statement are effective for reporting periods beginning after June 15, 2017.
Early adoption is encouraged.
GASB Statement No. 87, Leases, was issued in June 2017. The objective of this Statement is to
better meet the information needs of financial statement users by improving accounting and
fmancial reporting for leases by governments. This Statement increases the usefulness of
governments' financial statements by requiring recognition of certain lease assets and liabilities for
leases that previously were classified as operating leases and recognized as inflows of resources or
outflows of resources based on the payment provisions of the contract. It establishes a single model
for lease accounting based on the foundational principle that leases are financings of the right to
use an underlying asset. Under this Statement, a lessee is required to recognize a lease liability and
an intangible right -to -use lease asset, and a lessor is required to recognize a lease receivable and a
deferred inflow of resources, thereby enhancing the relevance and consistency of information about
governments' leasing activities. The requirements of this Statement are effective for reporting
periods beginning after December 15, 2019.
GASB Statement No. 88, Certain Disclosures Related to Debt, including Direct Borrowings and
Direct Placements, was issued April 2018. The primary objective of this Statement is to Improve
the information that is disclosed in notes to government financial statements related to debt,
including direct borrowings and direct placements. It also clarifies which liabilities governments
should include when disclosing information related to debt.
This Statement defines debt for purposes of disclosure in notes to financial statements as a liability
that arises from a contractual obligation to pay cash (or other assets that may be used in lieu of
cash) in one or more payments to settle an amount that is fixed at the date the contractual obligation
is established.
This Statement requires that additional essential information related to debt be disclosed in notes
to financial statements, including unused lines of credit; assets pledged as collateral for debt; and
terms specified in debt agreements related to significant events of default with finance -related
consequences, significant termination events with finance -related consequences, and significant
subjective acceleration clauses.
For notes to financial statements related to debt, this Statement also requires that existing and
additional information be provided for direct borrowings and direct placements of debt separately
from other debt. The requirements of this Statement are effective for reporting periods beginning
after June 15, 2018. Earlier adoption is encouraged.
- 60 -
CITY OF OPA-LOCAA, FLORIDA
NOTES TO THE BASIC FINANCIAL STATEMENTS
FISCAL YEAR ENDED SEPTEMBER 30, 2017
NOTE 19. STATE AND LOCAL AGREEMENT
On June 1, 2016, the City of Opa-locka City Commission adopted a Resolution to request a
declaration that the City is in a state of financial emergency to seek the appointment of a fmancial
emergency board and other assistance pursuant to section 218.503(1), Florida Statutes. The State
of Florida, Office of the Governor, issued Executive Order 16-135, signed by Florida Governor
Rick Scott.
On June 8, 2016, the City entered into a State and Local Agreement of Cooperation between the
Governor as a result of being in a state of financial emergency. The State implemented measures
to resolve the financial emergency, the City's cooperation with the Governor to resolve the financial
emergency and the Governor to designate the Office of the Chief Inspector General ("Governor's
Designee") to serve as the lead entity responsible for coordinating the Governor's efforts in
providing intervention and assistance to the City.
NOTE 20. MANAGEMENT'S REVIEW
In preparing these fmancial statements, the Organization has evaluated events and transactions for
potential recognition or disclosure through September 25, 2019, the date the financial statements
were available to be issued. There were no other significant events that management believed
require disclosure.
- 61 -
REQUIRED SUPPLEMENTARY INFORMATION
(Other Than MD&A)
CITY OF OPA-LOCKA, FLORIDA
REQUIRED SUPPLEMEMTARY INFORMATION
BUDGETARY COMPARISON SCHEDULE
GENERAL FUND
FOR THE YEAR ENDED SEPTEMBER 30, 2017
Budgeted Amounts Variance with
Final Budget
Original Final Actual Positive (Negative)
Revenues:
Taxes:
Property taxes $ 7,139,541 $ 7,139,541 $ 7,438,862 $ 299,321
Utility taxes 47,621 47,621 62,876 15,255
Local option gas tax - 302,792 302,792
Local business taxes - 254,399 254,399
Franchise fees 1,396,928 1,396,928 1,355,702 (41,226)
Permits and fees 909,423 909,423 606,220 (303,203)
Intergovernmental 124,266 124,266 63,370 (60,896)
Charges for services 98,281 98,281 190,784 92,503
Fines and forfeitures 987,510 987,510 1,001,311 13,801
Interest - 3 3
Other 4,271,270 4,271,270 _ 1,633,892 (2,637,378)
Total revenues 14,974,840 14,974,840 12,910,211 (2,064,629)
Expenditures:
General government:
City commission 144,699 112,995 85,924 (27,071)
City manager 362,549 334,363 363,290 28,927
City clerk 317,913 302,687 285,841 (16,846)
City attorney 261,200 261,200 531,779 270,579
Finance 699,316 473,491 505,242 31,751
Town Center 429,073 425,073 719,779 294,706
Information technology 316,637 305,217 256,651 (48,566)
Human resources 941,125 875,941 517,144 (358,797)
Building licenses 376,800 302,955 294,134 (8,821)
Community development 285,390 220,671 207,835 (12,836)
Total general government 4,134,702 3,614,593 3,767,619 153,026
Public safety:
Police 4,809,029 4,709,028 4,908,921 199,893
Code enforcement 267,637 261,928 239,026 (22,902)
Total public safety 5,076,666 4,970,956 5,147,947 176,991
Public works:
Administration 337,689 309,148 251,926 (57,222)
Street maintenance 378,184 365,263 520,340 155,077
Building maintenance 162,971 74,298 239,863 165,565
Vehicle maintenance 539,748 385,366 437,812 52,446
Total public works 1,418,592 1,134,075 1,449,941 315,866
Parks and recreation:
Parks 637,627 512,617 537,292 24,675
Total parks and recreation 637,627 512,617 537,292 24,675
Non -departmental 3,368,883 3,410,978 1,225,897 (2,185,081)
Total non -departmental 3,368,883 3,410,978 1,225,897 (2,185,081)
Total expenditures 14,636,470 13,643,219 12,128,696 (1,514,523)
Excess of revenues over expenditures 338,370 1,331,621 781,515 (550,106)
Other fmancing sources (uses):
Loan/capital lease proceeds 214,236 214,236
Transfers in 381,243 381,243
Net change in fund balance 338,370 1,331,621 1,376,994
Fund balance, beginning (3,025,624)
Prior period adjustment 36,533
Fund balances, beginning restated (2,989,091)
Fund balance, ending $ (1,612,097)
- 62 -
CITY OF OPA-LOCKA, FLORIDA
REQUIRED SUPPLEMEMTARY INFORMATION
BUDGETARY COMPARISON SCHEDULE
PEOPLE'S TRANSPORTATION TAX FUND
FOR THE YEAR ENDED SEPTEMBER 30, 2017
Budgeted Amounts Variance with
Final Budget
Original Final Actual Positive (Negative)
Revenues:
Taxes:
Intergovernmental $ 1,031,251 $ 1,031,251 $ 457,153 $ (574,098)
Total revenues 1,031,251 1,031,251 457,153 (574,098)
Expenditures:
Current:
General government:
Public works:
Street maintenance 1,031,251 1,031,251 341,607 689,644
Total public works 1,031,251 1,031,251 341,607 689,644
Total expenditures 1,031,251 1,031,251 341,607 689,644
Excess of revenues over expenditures - 115,546 115,546
Other financing sources (uses):
Capital acquisitions (15,365) (15,365)
Net change in fund balance 100,181
Fund balance, beginning 1,427,631
Prior period adjustment (445,298)
Fund balances, beginning restated 982,333
Fund balance, ending $ 1,082,514
- 63 -
CITY OF OPA-LOCKA, FLORIDA
REQUIRED SUPPLEMENTARY INFORMATION
BUDGETARY COMPARISON SCHEDULE
CAPITAL IMPROVEMENT DEBT SERVICE
FOR THE YEAR ENDED SEPTEMBER 30, 2017
Revenues:
Taxes:
Intergovernmental
Interest
Total revenues
Expenditures:
Current:
General government:
Debt service:
Principal
Interest
Total debt service
Total expenditures
Excess of revenues over expenditures
Other financing sources (uses):
Transfers out
Net change in fund balance
Fund balance, beginning
Fund balance, ending
Budgeted Amounts
Original Final
$ 1,513,406 $
2,078,276
3,591,682
1,513,406
2,078,276
3,591,682
671,169 671,169
490,934 490,934
1,162,103 1,162,103
1,162,103 1,162,103
2,429,579 2,429,579
(2,429,579) (2,429,579)
-64-
Actual
1,687,936
1,765,011
51
3,452,998
671,833
487,772
1,159,605
1,159,605
2,293,393
381,243
1,912,150
3,298,640
5,210,790
Variance with
Final Budget
Positive (Negative)
$ 174,530
(313,265)
51
(138,684)
(664)
3,162
2,498
2,498
(136,186)
2,810,822
CITY OF OPA-LOCKA, FLORIDA
REQUIRED SUPPLEMENTARY INFORMATION
SEPTEMBER 30, 2017
NOTE 1. BUDGETS AND BUDGETARY ACCOUNTING
Chapter 166, Florida Statutes, requires that all municipalities prepare, approve, adopt and execute an
annual budget for funds as may be required by law or by sound financial practices and generally
accepted accounting principles. The budgets control the levy and the expenditure of money for City
purposes in the ensuing fiscal year. The budgeting process is based on estimates of revenues and
expenditures. The City budgets are prepared on a modified -accrual basis or accrual basis of accounting
in accordance with generally accepted accounting principles.
The City follows these procedures in establishing the budgetary data reflected in the financial
statements.
1. Prior to August 1, the City Manager submits to the City Commission a proposed operating budget
for the fiscal year commencing the following October 1. The operating budget includes proposed
expenditures and the means of financing them.
2. Public hearings are conducted to obtain taxpayer comments.
3. Prior to October 1, the budget is legally enacted through passage of an ordinance.
4. Budgetary control is maintained at the departmental and fund level, with finance department providing
support to departments in the administration of their budgets. In accordance with the City's budget
transfer policy, the City Manager is authorized to transfer budgeted amounts within any fund or
functions; however, any supplemental appropriations or revisions that amend the total expenditure of
any fund must be approved by the City Commission. The City also maintains an encumbrance
accounting system as one technique of accomplishing budgetary control. Encumbrances outstanding at
the balance sheet date are canceled.
5. Annual operating budgets are legally adopted for the General, Special Revenue, Debt Service,
Capital Projects, and Enterprise Funds. All budgets are on a basis consistent with accounting
principles generally accepted in the United States of America. The legal level of budgetary control
is the department level. This is the level at which expenditures may not exceed appropriations.
6. All annual appropriations lapse at fiscal year-end.
NOTE 2. BUDGETARY EXPENDITURES IN EXCESS OF APPROPRIATIONS
For the year ended September 30, 2017, expenditures did not exceeded appropriations in, general
government, public safety, public works and parks and recreation of the general fund. Overall, General Fund
did not exceed its budget there was a positive variance of approximately $781,515.
For the year ended September 30, 2017, expenditures did not exceed appropriations in the People
Transportation Tax fund, there was a positive variance with the final budget by approximately $115,546.
This was attributed to reduced street, side -walk, and other transportation related projects.
- 65 -
CITY OF OPA-LOCKA, FLORIDA
REQUIRED SUPPLEMENTARY INFORMATION
SCHEDULE OF THE CITY' S PROPORTIONATE SHARE OF THE NET PENSION LIABILITY -
FLORIDA RETIREMENT SYSTEM PENSION PLAN
SEPTEMBER 30, 2017
City of Opa-locka's proportion of the net pension liability
2017 2016 2015 2014.
0.0259% 0.0343% 0.0357% 0.0325%
City of Opa-locka's proportionate share of the net pension liability $ 7,651,779 $ 8,653,259 $ 4,610,060 $ 3,574,813
City of Opa-locka's covered -employee payroll $ 6,394,032 $ 7,395,338 $ 9,279,820 $ 8,850,709
City of Opa-locka's proportionate share of the net pension liability (asset)
as a percentage of its covered -employee payroll 119.67% 117.01 % 49.68% 40.39%
Plan fiduciary net position as a percentage of the total pension liability
Note: The amounts presented for each fiscal year were determined as of June 30t'.
83.89% 84.88% 92.00% 96.09%
These schedules are presented to illustrate the requirements to show information for 10 years. However, until a full 10-year trend has been
compiled, information is presented only for the years for which the required supplementary information is available.
- 66 -
CITY OF OPA-LOCKA, FLORIDA
REQUIRED SUPPLEMENTARY INFORMATION
SCHEDULE OF THE CITY' S CONTRIBUTIONS -
FLORIDA RETIREMENT SYSTEM PENSION PLAN
SEPTEMBER 30, 2017
2017 2016 2015 2014
Contractually required contribution $ 852,437 $ 983,512 $ 1,086,534 $ 937,687
Contributions in relation to the contractually required contribution $ 852,437 $ 983,512 $ 1,086,534 $ 937,687
Contribution deficiency (excess) $ - $ - $ - $
City of Opa-locka.'s covered -employee payroll $ 6,394,032 $ 7,395,338 $ 9,279,820 $ 8,850,709
Contributions as a percentage of covered -employee payroll 13.33% 13.30% 11.71 % 10.59%
Note: The amounts presented for each fiscal year were determined as of September 30t.
These schedules are presented to illustrate the requirements to show information for 10 years. However, until a full 10-year trend has been
compiled, information is presented only for the years for which the required supplementary information is available.
- 67 -
CITY OF OPA-LOCKA, FLORIDA
REQUIRED SUPPLEMENTARY INFORMATION
SCHEDULE OF THE CITY'S PROPORTIONATE SHARE OF THE NET PENSION LIABILITY -
HEALTH INSURANCE SUBSIDY PENSION PLAN
SEPTEMBER 30, 2017
2017 2016 2015 2014
City of Opa-locka's proportion of the net pension liability (asset) 0.0195% 0.0270% 0.0309% 0.0288%
City of Opa-locka's proportionate share of the net pension liability (asset) $ 2,082,612 $ 3,144,569 $ 3,151,008 $ 3,574,813
City of Opa-locka's covered -employee payroll $ 6,394,032 $ 7,395,338 $ 9,279,820 $ 8,850,709
City of Opa-locka's proportionate share of the net pension liability (asset)
as a percentage of its covered -employee payroll 32.57% 42.52% 33.96% 40.39%
Plan fiduciary net position as a percentage of the total pension liability 1.6400% 0.9700% 0.5000% 0.9900%
Note: The amounts presented for each fiscal year were determined as of June 30d'.
These schedules are presented to illustrate the requirements to show information for 10 years. However, until a full 10-year trend has been
compiled, information is presented only for the years for which the required supplementary information is available.
- 68 -
CITY OF OPA-LOCKA, FLORIDA
REQUIRED SUPPLEMENTARY INFORMATION
SCHEDULE OF THE CITY' S CONTRIBUTIONS -
HEALTH INSURANCE SUBSIDY PENSION PLAN
SEPTEMBER 30, 2017
2017 2016 2015 2014
Contractually required contribution $ 129,528 $ 161,304 $ 156,110 $ 129,092
Contributions in relation to the contractually required contribution $ 129,528 $ 161,304 $ 156,110 $ 129,092
Contribution deficiency (excess) $ $ - $ - $
City of Opa-locka's covered -employee payroll $ 6,394,032 $ 7,395,338 $ 9,279,820 $ 8,850,709
Contributions as a percentage of covered -employee payroll 2.03% 2.18% 1.68% 1.46%
Note: The amounts presented for each fiscal year were determined as of September 30`s.
These schedules are presented to illustrate the requirements to show information for 10 years. However, until a full 10-year trend has been
compiled, information is presented only for the years for which the required supplementary information is available.
- 69 -
OTHER SUPPLEMENTARY INFORMATION
CITY OF OPA-LOCKA, FLORIDA
COMBINING BALANCE SHEET
NON -MAJOR GOVERNMENTAL FUNDS
SEPTEMBER 30, 2017
Special Community Safe
Law Redevelopment Neighborhood
Enforcement Agency Capital Proiects Total
ASSETS
Cash and equity in pooled cash $ 262,469 $ $ 161,929 $ 424,398
Other government account receivables 100,000 100,000
Due from other funds 327,060 588,069 921,462 1,836,591
Restricted cash and cash equivalents 68,051 68,051
Total Assets $ 589,529 $ 588,069 $ 1,251,442 $ 2,429,040
LIABILITIES AND FUND BALANCES
Liabilities:
Accounts payable and accrued liabilities
Due to other funds
Other government account payables
Deferred revenues
Total liabilities
Fund Balances:
Reserved for:
$ $ 1,376 $ 183,673 $ 185,049
(7,874) 540,890 1,750,083 2,283,099
1,005 1,005
(7,874)
542,266 1,934,761 2,469,153
Public safety 597,402 597,402
Unreserved 1 45,803 (683,319) (637,515)
Total fund balances 597,403 45,803 (683,319) (40,113)
Total Liabilities and Fund Balances $ 589,529 $ 588,069 $ 1,251,442 $ 2,429,040
- 70 -
CITY OF OPA-LOCKA, FLORIDA
COMBINING STATEMENT OF REVENUES, EXPENDITURES
AND CHANGES IN FUND BALANCES
NON -MAJOR GOVERNMENTAL FUNDS
FOR THE YEAR ENDED SEPTEMBER 30, 2017
Special Community Safe
Law Redevelopment Neighborhood
Enforcement A2encv Capital Projects Total
Revenues:
Property taxes $ $ 216,000 $ $ 216,000
Intergovernmental 3,938 3,938
Interest 533 533
Other 105,896 105,896
Total revenues 109,834 216,000 533 326,367
Expenditures:
Current:
General government 255 14,932 15,187
Public safety 586 586
Capital outlay 156,457 156,457
Total expenditures 586 255 171,389 172,230
Excess (deficiency) of revenues over expenditures 109,248 215,745 (170,856) 154,137
Net change in fund balance 109,248 215,745 (170,856) 154,137
Fund balance - beginning 488,154 (170,197) (650,481) (332,524)
Prior period adjustment 255 138,018 138,273
Fund balance - beginning restated 488,154 (169,942) (512,463) (194,251)
Fund balance - ending $ 597,402 $ 45,803 $ (683,319) $ (40,114)
- 71 -
CITY OF OPA-LOCKA, FLORIDA
COMBINING STATEMENT OF NET POSITION BALANCES
NON -MAJOR ENTERPRISE FUNDS
SEPTEMBER 30, 2017
Stormwater Total
ASSETS
Current assets:
Cash and equity in pooled cash $ 1,086,220 $ 1,086,220
Estimated unbilled services 244,469 244,469
Due from other governments 44,438 44,438
Restricted cash and cash equivalents 110,000 110,000
Due from other funds 487,338 487,338
Total current assets 1,972,465 1,972,465
Non -current assets:
Non -depreciable capital assets 289,056 289,056
Capital assets, net 37,389 37,389
Total non -current assets 326,445 326,445
Total Assets $ 2,298,910 $ 2,298,910
LIABILITIES
Current liabilities:
Accounts payable and accrued liabilities $ 84,233 $ 84,233
Due to other funds 705,006 705,006
Customers' deposits 1 1
Current portion of long-term debt 19,822 19,822
Total current liabilities 809,062 809,062
Long term debt:
Compensated absences 32,815 32,815
OPEB obligation 7,164 7,164
Long-term debt 548,226 548,226
Total long-term debt 588,205 588,205
Total Liabilities 1,397,267 1,397,267
NET POSITION
Invested in capital assets, net of related debt (241,603) (241,603)
Unrestricted 1,143,246 1,143,246
Total Net Position $ 901,643 $ 901,643
- 72 -
CITY OF OPA-LOCKA, FLORIDA
COMBINING STATEMENT OF REVENUES, EXPENDITURES, AND CHANGES IN
FUND BALANCES -NON -MAJOR ENTERPRISE FUNDS
Operating revenues:
Charges for services
Total operating revenues
FOR THE YEAR ENDED SEPTEMBER 30, 2017
Stormwater Total
$ 721,997 $ 721,997
721,997 721,997
Operating expenses:
Operating, administrative and maintenance 355,697 355,697
Depreciation 66,176 66,176
Total operating expenses 421,873 421,873
Non -operating revenues (expenses):
Interest and other debt costs 1,721 1,721
Total non -operating revenues (expenses) 1,721 1,721
Change in net position
298,403 298,403
Net position, beginning 515,030 515,030
Prior period adjustment 88,209 88,209
Net position, beginning restated 603,239 603,239
Net position, ending $ 901,642 $ 901,642
- 73 -
CITY OF OPA-LOCKA, FLORIDA
COMBINING STATEMENT OF CASH FLOWS
NON -MAJOR ENTERPRISE FUNDS
FOR THE YEAR ENDED SEPTEMBER 30, 2017
Stormwater Total
Cash flows from operating activities:
Payments from (to) other funds, net $ 282,258 $ 282,258
Net cash provided by operating activities 282,258 282,258
Cash flows from investing activities:
Interest income (1,721) (1,721)
Net cash used in capital and related financing activities (1,721) (1,2721)
Net decrease in cash 280,537 280,537
Cash, beginning 915,683 915,683
Cash, ending 1,196,220 1,196,220
Display as:
Unrestricted 1,086,220 1,086,220
Restricted 110,000 110,000
Total $ 1,196,220 $ 1,196,220
Reconciliation of operating income to cash provided by
operating activities:
Operating (loss)
$ 298,403 $ 298,403
Adjustment to reconciled operating income to net cash
provided by (used in) operating activities:
Depreciation 66,176 66,176
Due from other funds (131,933) (131,933)
Increase (decrease)in:
Accounts payable and accrued liabilities 40,687 40,687
Customer deposits 2 2
Compensated absences 19,881 19,881
Other liabilities and pension 503,406 503,406
Due to other governments (636,436) (636,436)
Due to other funds 122,072 122,072
Net cash provided by operating activities $ 282,258 $ 282,258
- 74 -
COMPLIANCE SECTION
ANTHONY BRUNSON P.A.
CERTIFIED PUBLIC ACCOUNTANTS & BUSINESS ADVISORS
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
To the Honorable Mayor and Members of the City Council
City of Opa-locka, 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 of
The City of Opa-locka, ("Opa-locka")" as of and for the year ended September 30, 2017, and the related
notes to the financial statements, which collectively comprise Opa-locka's basic financial statements and
have issued our report thereon dated September 25, 2019. Our report qualifies an opinion on such financial
statements because as discussed in Note 1, we were unable to obtain sufficient appropriate audit evidence
on the City's capital asset balances.
Internal Control over Financial Reporting
In planning and performing our audit of the financial statements of Opa-locka, we considered Opa-locka's
internal control over fmancial 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 Opa-locka's internal control.
Accordingly, we do not express an opinion on the effectiveness of Opa-locka's internal control.
Our consideration of internal control was for the limited purpose described in the preceding paragraph and
was not designed to identify all deficiencies in internal control that might be material weaknesses or
significant deficiencies and therefore, material weaknesses or significant deficiencies may exist that have
not been identified. However, as described in the accompanying schedule of fmdings and questioned costs,
we identified certain deficiencies in internal control that we consider to be material weaknesses and
significant deficiencies.
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
fmancial statements will not be prevented, or detected and corrected on a timely basis. We consider the
deficiencies described in the accompanying schedule of findings and questioned costs to be material
weaknesses. 2017-01, 2017-02, 2017-03, 2017-04, 2017-05, 2015-01, 2015-03, and 2014-03.
Miramar Office
3350 SW 1486" Avenue Suite 110
Miramar, Florida 33027
(954) 874-1721
-75-
CL F,NT FOCUSED: SOLUTION DIRT EN
info@abcpasolutions.com
Miami Office
801 Brickell Avenue Suite 900
Miami, Florida 33131
(305) 789-6673
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.
We consider the deficiencies described in the accompanying schedule of findings and questioned costs to
be significant deficiencies. 2017-06 and 2015-02.
Compliance and Other Matters
In connection with our engagement to audit the fmancial statements of Opa-locka, 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.
City of Opa-locka's Response to Findings
Opa-locka's response to the findings identified in our engagement is described in the accompanying
schedule of fmdings and questioned costs. Opa-locka's response was not subjected to the auditing
procedures applied in the engagement to audit the fmancial statements and, accordingly, we express no
opinion on it.
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 entity's internal
control or on compliance. This report is an integral part of an engagement to perform an audit 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.
September 25, 2019
- 76 -
CITY OF OPA-LOCKA, FLORIDA
SCHEDULE OF FINDINGS AND QUESTIONED COSTS
FOR THE YEAR ENDED SEPTEMBER 30, 2017
Section II - Financial Statement Current Year Findings and Questioned Costs
Material Weakness
2017-01 Florida Auditor General Report Findings
Criteria
Prudent accounting practices include policies, procedures, and controls over the safeguarding,
recording, processing, and reporting of the City's financial Operations and transactions.
Condition
On May 23, 2019, the Auditor General of the State of Florida prepared a report on the City, pursuant
to an operational audit conducted by the Agency. As a result of the audit, multiple findings and
recommendations were submitted to City seeking actual or proposed corrective actions.
Recommendation
We recommend that the City designate a member of management take timely action to resolve issues
identified or proposed action plans to formally address issues cited as soon as time permits.
View of Responsible Officials and Planned Corrective Actions
The City has provided responses regarding the corrective action and corresponding timelines
associated with the fmdings to the Office of the Auditor General. The City will continue to address
each finding and issue until resolved.
- 77 -
CITY OF OPA-LOCKA, FLORIDA
SCHEDULE OF FINDINGS AND QUESTIONED COSTS
FOR THE YEAR ENDED SEPTEMBER 30, 2017
Section II - Financial Statement Current Year Findings and Questioned Costs (Continued)
Material Weakness
2017-02 Strengthen Staff Resources in the Finance and Accounting Department
Criteria
The City should have available finance and/or accounting staff members who understand and have
experience in the accounting and fmancial reporting requirements of the governmental industry.
Condition
In performing the City's audits, we noted conditions of personnel turnover as well as a lack of full-
time employee who possess the skills, knowledge and experience in the governmental industry.
Recommendation
We recommend the City assess the accounting department staffing needs as well as hire an
experienced governmental accounting person or trained existing staff member to enhance their skill
sets.
View of Responsible Officials and Planned Corrective Actions
The City is currently advertising the recruitment of an experienced governmental accounting
professional to employ as the Finance Director. In addition, the City will assess and identify areas of
weakness in the Finance Department to make corrective action, and provide the necessary resources
and tools to further strengthen the department.
- 78 -
CITY OF OPA-LOCKA, FLORIDA
SCHEDULE OF FINDINGS AND QUESTIONED COSTS
FOR THE YEAR ENDED SEPTEMBER 30, 2017
Section II - Financial Statement Current Year Findings and Questioned Costs (Continued)
Material Weakness
2017-03 There is No Physical Inventory of Infrastructure and Fixed Assets
Criteria
The implementation of GASB 34 established financial reporting standards for state and local
governments. In connection therewith, the recognition of major general infrastructure assets is
required to be capitalized and reported.
Condition
The City has not performed a physical inventory of infrastructure assets or other capital assets owned
by the City.
Recommendation
We recommend that the City perform a physical inventory of its infrastructure and capital assets and
soon as time permits.
View of Responsible Officials and Planned Corrective Actions
The City is assessing its financial needs and resources as it develops a 5-year financial recovery plan
as a condition of the State and Local Cooperation Agreement between the Govemor and the City to
fund a citywide physical inventory. This process will also include a procurement plan to request
information to assess the scope and cost of a physical inventory of infrastructure assets or other
capital assets owned by the City.
- 79 -
CITY OF OPA-LOCKA, FLORIDA
SCHEDULE OF FINDINGS AND QUESTIONED COSTS
FOR THE YEAR ENDED SEPTEMBER 30, 2017
Section H - Financial Statement Current Year Findings and Questioned Costs (Continued)
Material Weakness
2017-04 Reconciliation of Cash Accounts
Criteria
Timely preparation of complete and accurate bank reconciliations is a key to maintaining adequate
control over both cash receipts and disbursements.
Condition
During review of cash accounts, we noted that the account reconciliation was not accurately
completed. For governmental funds checks totaling $35,560 that cleared the bank account prior to
September 30, 2017 were included in reconciling listing of outstanding as of September 30, 2017.
For the water and sewer fund checks totaling $583,141 that cleared the bank prior to September 30,
2017 were included in the reconciling listing of outstanding checks as of September 30, 2017.
Cause
Failure of the City to perform timely reconciliation of cash accounts.
Effect
Material journal entries were proposed to correct errors and misstatements.
Recommendation
We recommend that the bank reconciliations be reviewed for accuracy and completeness on a timely
basis by the someone with the appropriate skill -set identify significant discrepancies. The review
should include tests of mechanical accuracy and tracing of items on the reconciliation to the relevant
source documents.
View of Responsible Officials and Planned Corrective Actions
For multiple years, the City's Finance Department was functioning without the required resources,
along with a rotation of Finance Director's, therefore the staffmg capacity and competency suffered.
The City is currently advertising the recruitment of an experienced governmental accounting
professional to employ as the Finance Director. In addition, the City will assess and identify areas of
weakness within the Finance Department to make corrective action, and provide the necessary
resources and tools to further strengthen the department.
As a result, the City was behind in past financial and compliance audits and day to day operations.
Currently, the City is addressing past financial and compliance audits and day to day operational
needs of the Finance Department. The City is enhancing its bank reconciliation process to be
completed timely, to ensure accurate financial reporting and implement a proper review process.
- 80 -
CITY OF OPA-LOCKA, FLORIDA
SCHEDULE OF FINDINGS AND QUESTIONED COSTS
FOR THE YEAR ENDED SEPTEMBER 30, 2017
Section II - Financial Statement Current Year Findings and Questioned Costs (Continued)
Material Weakness
2017-05 Internal Control Over Payroll Processing and Personnel File Maintenance
Criteria
Prudent accounting practices include policies, procedures and controls over the recording, processing
and reporting of accounting events and transactions.
Condition
During our review of payroll and personnel files we noted the following:
o There were discrepancies between the payrate documented on the Payroll register and the
payrate documented personnel files
o Proper documentation to support pay rates were not available in all personnel files
o There was no evidence of proper approval on timesheets
o There was no evidence that payroll transactions including journal entries were properly
reviewed and approved prior to posting to the general ledger
Cause
Failure to design and implement adequate intemal controls over payroll and personnel file
maintenance.
Effect of Condition
Unauthorized or fraudulent transactions could be posted, additionally lack of adequate reviews and
approvals could result in financial statement misstatements.
Recommendation
We recommend that the City design and implement adequate internal controls and policies and
procedures for payroll processing and personnel file maintenance.
- 81 -
CITY OF OPA-LOCKA, FLORIDA
SCHEDULE OF FINDINGS AND QUESTIONED COSTS
FOR THE YEAR ENDED SEPTEMBER 30, 2017
Section H - Financial Statement Current Year Findings and Questioned Costs (Continued)
Material Weakness
2017-05 Internal Control Over Payroll Processing and Personnel File Maintenance (cont'd)
View of Responsible Officials and Planned Corrective Actions
The City has reviewed the internal control finding on discrepancies between the pay rate as
documented in the Payroll System and the pay rate as documented on personnel files. We concur
and will implement the following:
• On a monthly basis, and prior to the processing of the first payroll of the month, the City's
Human Resources Director will be required to process a "Payroll Pay Rate Report" to monitor
and review discrepancies and the completeness of personnel files.
• To ensure that there is clear evidence of proper approval on timesheets, the City has developed
an electronic timesheet approval process within its ADP payroll system. This system includes
an automatic cross reference mechanism that ties each employee's name to a specific supervisor.
Should an attempt be made to approve an employee's time by an unauthorized supervisor, that
employee's time will be rejected in the system, until the properly matched supervisor has
approved the timesheet. An electronic timesheet approval process is currently in effect.
• The payroll register for each payroll period will be reviewed by the Finance Director or
designated personnel to perform this supervisory function with a signature as evidence of review.
- 82 -
CITY OF OPA-LOCKA, FLORIDA
SCHEDULE OF FINDINGS AND QUESTIONED COSTS
FOR THE YEAR ENDED SEPTEMBER 30, 2017
Section II - Financial Statement Current Year Findings and Questioned Costs (Continued)
Significant Deficiency
2017-06 Pension Plan Remittance
Criteria
The City participates in a deferred compensation plan as described in IRC section 457. Pursuant to
the Department of Labor (DOL) regulations participants contributions received by an employer must
be remitted to the Plan no later than the 15th business day of the month following the month in which
the participant contribution are received by the employer.
Conditions
During our review of the 457 Pension plan payments we noted that for 5 months during fiscal year
2017 the City failed to remit funds in a timely manner as outlined in the DOL regulations.
Cause
Failure of the City design and implement adequate controls.
Effect
Non-compliance with specific regulations may cause the Plan to become ineligible for the tax
benefits of Section 457.
Recommendation
We recommend that the City implement procedures that with ensure full compliance with the Plan
documents.
View of Responsible Officials and Planned Corrective Actions
The City has addressed and corrected untimely remittance of 457 Pension plan payments by
designating appropriate staff personnel to review and monitor routinely. There will be oversight and
monitoring by both the Human Resources Director and staff within the Finance Department. In
addition to the implementation of an electronically monitored payment process to ensure compliance
with the plan documents as required.
- 83 -
CITY OF OPA-LOCKA, FLORIDA
SCHEDULE OF FINDINGS AND QUESTIONED COSTS
FOR THE YEAR ENDED SEPTEMBER 30, 2017
Section III — Prior Year - Financial Statement Findings and Status
Material weakness
2015-01 Timeliness of Recording Individual Transactions
Criteria
Prudent accounting practices include policies, procedures and controls over the recording, processing
and reporting of accounting events and transactions.
Condition
We believe that the City of Opa-locka does not maintain adequate financial records. Certain
transactions are not summarized in a general ledger, nor all transactions recorded on the books in a
timely manner. Such a system does not permit the preparation of accurate and reliable financial
statements.
Recommendation
We recommend that a designated member of management performs periodic analysis of significant
accounts to determine the completeness of account balances and investigate and resolve any issues
identified. This practice serves to enforce checks and balances necessary for strong internal controls
and accurate financial reporting.
Current Year Status
Similar condition noted in the current year audit.
View of Responsible Officials and Planned Corrective Actions
The City has assessed and reviewed the internal accounting policies, procedures and controls over
the recording, processing and reporting of its accounting events and transactions. The City has also
developed the necessary policies and accounting procedures to address this fmding. The City is
actively reconciling accounts on a timely basis to produce relevant and accurate data. Additionally,
the City is in the process of recruiting a Finance Director to provide financial management, oversight,
staff supervisory and to continually monitor and improve the Finance Department's financial
reporting system.
- 84 -
CITY OF OPA-LOCKA, FLORIDA
SCHEDULE OF FINDINGS AND QUESTIONED COSTS
FOR THE YEAR ENDED SEPTEMBER 30, 2017
Section III — Prior Year - Financial Statement Findings and Status (Continued)
Significant Deficiency
2015-2
Upgrade the Accounting System
Criteria
The financial accounting and reporting system should provide the information management needs to
monitor the City's financial condition and make appropriate decisions in a timely basis.
Condition
The software programs used to perform the financial functions and related activity does not have the
capability of producing reports that are necessary for management to accurately report on the City's
financial position. Example, during our audit we noted that the City was not able to provide accounts
payable aging report or an alternate report to support account payable balance in the general ledger
system.
Recommendation
We recommend that the City conduct an evaluation of the existing financial system and an analysis
of projected needs. This evaluation should focus on ensuring that the City's financial systems
maximize the productivity of its staff and meet the financial reporting needs of management.
Current Year Status
Similar condition noted in the current year audit.
View of Responsible Officials and Planned Corrective Actions
The City has determined that the existing financial accounting and reporting system does not meet
all of its needs. However, in assessing and evaluating the operational and financial needs of the City,
any modifications and or changes to the existing financial accounting and reporting system will occur
when budgetary and operational circumstances permit. The City is developing its 5-year financial
recovery plan as a condition of the State and Local Cooperation Agreement between the Governor
and the City to fund a citywide physical inventory. This process will also include a procurement plan
to request information, quote and/or proposal for a financial and reporting system.
- 85 -
CITY OF OPA-LOCKA, FLORIDA
SCHEDULE OF FINDINGS AND QUESTIONED COSTS
FOR THE YEAR ENDED SEPTEMBER 30, 2017
Section III — Prior Year - Financial Statement Findings and Status (Continued)
2015-03 — Financial Reporting Policies and Procedures Manual and Reconciliation General Ledger.
Accounts to Supporting Documents
Criteria
Prudent financial reporting requires accurate and timely reconciliation of general ledger accounts.
The existence of a formal policy and procedures manual could assist with the timeliness of
reconciling account balances.
Condition
During the audit, we noted that significant general ledger accounts were not properly reconciled. A
formal accounting policies and procedures manual would facilitate continuity in the necessary
procedures.
Recommendation
We recommend that the City develop a formal financial reporting policies and procedures manual
which include the reconciliation of general ledger accounts on a monthly basis among other process
and procedures. A benefit of monthly reconciliations is that errors do not accumulate but can be
identified and attributed to a specific period, which makes it easier to perform future reconciliations.
Also, formal documentation can be used to reinforce established policies and procedures and serve
as a training tool.
Current Year Status
Similar condition noted in the current year audit.
View of Responsible Officials and Planned Corrective Actions
The City is developing and updating its existing financial reporting policies and procedures and has
implemented systems to continually monitor the monthly general ledger reconciliation process,
including providing supporting documentation for accounting transactions (i.e. journal entries).
- 86 -
CITY OF OPA-LOCKA, FLORIDA
SCHEDULE OF FINDINGS AND QUESTIONED COSTS
FOR THE YEAR ENDED SEPTEMBER 30, 2017
Section III — Prior Year - Financial Statement Findings and Status (Continued)
Significant Deficiency
2015-04 Journal Entries
Criteria
Adjusting journal entries should be approved by a designated member of management and include
clear descriptions and supporting documentation. This allows for a complete audit trail of journal
entries posted.
Condition
During our audit procedures, we noted the journal entries lacked proper approval by a responsible
official. We also noted that many of the entries lacked adequate supporting documentation. All
journal entries should be accompanied by full explanations and reference to adequate supporting
data and proper approval.
Recommendation
We recommend that a designated member of management review and approve all journal entries and
initial the support for the entries to document their approval. This process would improve controls
over adjustments to the general ledger.
Current Year Status
Comment is no longer applicable.
- 87 -
CITY OF OPA-LOCKA, FLORIDA
SCHEDULE OF FINDINGS AND QUESTIONED COSTS
FOR THE YEAR ENDED SEPTEMBER 30, 2017
Section III — Prior Year - Financial Statement Findings and Status (Continued)
Significant Deficiency
2015-05 Deficit Cash Balances
Criteria
The City utilizes separate pooled cash for governmental and enterprise funds, cash transactions
should be accurately recorded in the respective funds.
Condition
During our audit we noted that the Safe Neighborhood fund and the Solid waste fund had deficit GL
cash account balances of $201,610 and $5,106,392, respectively. The City has not been able to
determine the reason for the deficit cash balances.
Recommendation
We recommend that the City perform a thorough analysis of the deficit cash balances and determine
the necessary actions to cure the deficit position.
Current Year Status
Comment is no longer applicable.
- 88 -
CITY OF OPA-LOCKA, FLORIDA
SCHEDULE OF FINDINGS AND QUESTIONED COSTS
FOR THE YEAR ENDED SEPTEMBER 30, 2017
Section III — Prior Year - Financial Statement Findings and Status (Continued)
2014-01 Checks Outstanding for Over 12 Months
Condition
Stale checks dating to the prior fiscal year are still being tracked in monthly bank reconciliations.
Criteria
While performing its monthly bank reconciliations, the City should monitor old outstanding checks
as required by the City's policies and procedures.
Cause
The City did not perform complete monthly bank reconciliation.
Effect
Cash balances are not accurately stated to reflect the true cash balance at the reported date.
Recommendation
We recommend the City to research stale checks dating over a year and follow the City's policies
and procedures regarding stale checks.
Current Year Status
Comment is no longer applicable.
- 89 -
CITY OF OPA-LOCKA, FLORIDA
SCHEDULE OF FINDINGS AND QUESTIONED COSTS
FOR THE YEAR ENDED SEPTEMBER 30, 2017
Section III — Prior Year - Financial Statement Findings and Status (Continued)
2014-02 Budgets (Repeat finding from FY2013)
Condition
Budgets are not being adhered to, properly balanced or being utilized by management as they should
be.
Criteria
The budget is an important legal requirement for the City and is a public document. City management
and officials are held accountable for any budget overages or amendments, since the budget
demonstrates how the City is going to spend its taxpayers' money..
Cause
Staff is not being held accountable for the budget and there is no monitoring from budget to actual
expenditures.
Effect
The City may be out of compliance with the Florida Statutes if expenditures exceed budgeted
amendments and poor decisions may be made if budgets are not being followed correctly which
could place the City in financial difficulty.
Recommendation
We recommend that the City appoint someone within the finance department to take responsibility
for the budget and to track budget to actual expenditures on a monthly basis in order to make
informed financial decisions as well as any necessary budget amendments.
Current Year Status
Comment is no longer applicable.
- 90 -
CITY OF OPA-LOCKA, FLORIDA
SCHEDULE OF FINDINGS AND QUESTIONED COSTS
FOR THE YEAR ENDED SEPTEMBER 30, 2017
Section III — Prior Year - Financial Statement Findings and Status (Continued)
2014-03 Deteriorating Financial Condition (Repeat finding from FY2013)
Condition
There has been a lack of information for timely reporting
Criteria
The City needs to be able to keep the revenues in line with expenditures and not rely on revenues
from utility funds.
Cause
There have been significant staff turnovers at the highest level, which has disrupted continuity and
has caused ineffective training for finance staff as well as a general lack of experience with specific
matters related to the City. Property values continue to decline which causes a loss in property tax
assessments and a reduction of a significant revenue stream. Unemployment levels remain very high
at 17.5% and household incomes are not increasing.
Effect
If financial conditions continue to deteriorate, the City may require state assistance which would
then be deemed a financial emergency pursuant to Section 218.503(1), Florida Statutes.
Current Year Status
Comment is no longer applicable.
- 91 -
CITY OF OPA-LOCKA, FLORIDA
SCHEDULE OF FINDINGS AND QUESTIONED COSTS
FOR THE YEAR ENDED SEPTEMBER 30, 2017
Section IV - Current Year Findings - Federal Award and State Proiect - Maior Programs
66-458 -Capitalization Grants for Clean Water State Revolving Funds
All prior year findings still existed during the current year. See prior year finding for updates.
Internal Control and Compliance
66-468 -Capitalization Grants for Drinking Water State Revolving Funds
2016-01 Insufficient Supporting Documentation
Condition
During our Cash Management audit procedures; we noted that City did not maintain sufficient
records to support reimbursements requested from the grantor
Criteria
The Uniform guidance require that non -Federal entities receiving Federal awards establish and
maintain internal control designed to reasonably ensure compliance with Federal laws, regulations,
and program compliance requirements.
Cause
Failure to implement adequate internal controls over the grant program resulted in insufficient record
keeping.
Effect
Continued weaknesses in internal control over Federal awards can negatively impact the City's
ability to obtain funding from Federal as well as non -Federal agencies.
Recommendation
We recommend that the City creates a formal document that outlines internal control policies and
procedures over grant programs to ensure compliance.
Current Year Status
Progress has occurred but condition remains applicable.
View of Responsible Officials and Planned Corrective Actions
The City has made improvements to the grant administration, management and compliance process
to comply with Federal, State and Local requirements. The City has developed a draft grant manual
to assist with improving the internal control policies and procedures over grant programs to ensure
meeting compliance requirements.
In addition, sufficient documentation was provided to the external auditors for the audit period ended
September 30, 2017.
- 92 -
CITY OF OPA-LOCKA, FLORIDA
SCHEDULE OF FINDINGS AND QUESTIONED COSTS
FOR THE YEAR ENDED SEPTEMBER 30, 2017
Section IV - Current Year Findings - Federal Award and State ProWet - Major Programs (cont'd)
Compliance
2016-02 Non Submission of Federal Financial Report
Criteria
Based on the grant agreements, the SF-425 - Federal Financial Report should be prepared and
submitted to the grantor quarterly.
Condition
During our reporting audit procedures, we noted that the City failed to prepare and submit the
required report.
Cause
Failure to implement adequate internal controls over the grant program resulted in non-compliance
with the grant agreement.
Effect
Noncompliance with grant program requirements may prevent the City from obtaining future
funding from Federal as well as non- Federal sources.
Recommendation
We recommend that the City implement policies and procedures that will ensure compliance
program requirements.
Current Year Status
Comment is not applicable for fiscal year ended 2017.
- 93 -
CITY OF OPA-LOCKA, FLORIDA
SCHEDULE OF FINDINGS AND QUESTIONED COSTS
FOR THE YEAR ENDED SEPTEMBER 30, 2017
Section V — Prior Year Findings - Federal Award and State Proiect - Major Programs
CFDA 66-458— Capitalization Grants for Clean Water State Revolving Fund
CFDA 66-202 — Congressionally Mandated Projects
Internal Control and Compliance
2015-06 Insufficient Supporting Documentation
Condition
During our Cash Management audit procedures; we noted that for both Federal award programs; the
City did not maintain sufficient records to support reimbursements requested from the grantor.
Criteria
The A-102 Common Rule and OMB Circular A-110 (2 CFR part 215) require that non -Federal
entities receiving Federal awards establish and maintain internal control designed to reasonably
ensure compliance with Federal laws, regulations, and program compliance requirements.
Cause
Failure to implement adequate internal controls over the grant program resulted in
Insufficient record keeping
Effect
Continued weaknesses in internal control over Federal awards .can negatively impact the City's
ability to obtain funding from Federal as well as non -Federal agencies.
Recommendation
We recommend that the City creates a formal document that outlines internal control policies and
procedures over grant programs to ensure compliance A-102 Common Rule and OMB Circular A-
110 (2 CFR part 215). The 2015 audit is being done in FY 2018 as such the policies and procedures
manual should be in compliance with the Uniform Guidance.
Current Year Status
Comment is not applicable for fiscal year ended 2017.
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CITY OF OPA-LOCKA, FLORIDA
SCHEDULE OF FINDINGS AND QUESTIONED COSTS
FOR THE YEAR ENDED SEPTEMBER 30, 2017
Section VI — Prior Year Findings - Federal Award and State Proiect - Major Programs (Continued)
CFDA 66-458— Capitalization Grants for Clean Water State Revolving Fund
CFDA 66-202 — Congressionally Mandated Projects
Compliance
2015-07 Non Submission of Federal Financial Report
Criteria
Based on the grant agreements, the SF-425 - Federal Financial Report should be prepared and
submitted to the grantor quarterly.
Condition
During our reporting audit procedures, we noted that for both Federal award programs; the City
failed to prepare and submit the required report.
Cause
Failure to implement adequate internal controls over the grant program resulted in non-compliance
with the grant agreement.
Effect
Noncompliance with grant program requirements may prevent the City from obtaining future
funding from Federal as well as non- Federal sources.
Recommendation
We recommend that the City implement policies and procedures that will ensure compliance
program requirements.
Current Year Status
Comment is not applicable for fiscal year ended 2017.
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CITY OF OPA-LOCKA, FLORIDA
SCHEDULE OF FINDINGS AND QUESTIONED COSTS
FOR THE YEAR ENDED SEPTEMBER 30, 2017
Section VI — Prior Year Findings - Federal Award and State Proiect - Major Programs (Continued)
CSFA 37--077 — Wastewater Treatment Facility Construction
CSFA 37-039 — Statewide Surface Water Restoration and Wastewater Projects
Internal Control and Compliance
2015-08 Lack of Supporting Documentation
Condition
During our cash management audit procedures; for both State projects we noted that the City did not
maintain sufficient document to support drawdown/reimbursement request from the State agency.
Criteria
Under the Florida single audit act non state entities are required to implement adequate controls to
provide reasonable assurance of compliance with the provision of laws, regulations and other rules
pertaining to State awards.
Cause
Failure to implement adequate internal controls over the grant program resulted in insufficient record
keeping.
Effect
Lack of adequate controls over State awards can negatively impact the City's ability to obtain future
funding under State award programs.
Recommendation
We recommend that the City review the Internal Control requirements as documented in the Florida
Single Audit Act and implement procedures that will ensure compliance with program requirements.
Current Year Status
Comment is not applicable for fiscal year ended 2017.
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S
ANTHONY BRUNSON P.A.
CERTIFIED PUBLIC ACCOUNTANTS & BUSINESS ADVISORS
MANAGEMENT LETTER IN ACCORDANCE WITH THE RULES
OF THE AUDITOR GENERAL OF THE: STATE OF FLORIDA
To the Honorable Mayor and Member of the City Council
City of Opa-locka, Florida
Report on the Financial Statements
We have audited the financial statements of the City of Opa-locka, Florida, as of and for the fiscal year
ended September 30, 2017, and have issued our report dated September 25, 2019.
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 Auditor's Report on Internal Control over Financial Reporting and
Compliance and Other Matters Based on an Audit of the Financial Statements Performed in Accordance with
Government Auditing Standards and Report on Internal Control over Compliance; Schedule of Findings and
Questioned Costs; and Independent Accountant's Reports on an examination conducted in accordance with
AICPA Professional Standards, AT C Section 315, regarding compliance requirements in accordance with
Chapter 10.550, Rules of the Auditor General. Disclosures in those reports and schedule, which are dated
September 25, 2019, should be considered in conjunction with this management letter.
Prior Audit Findings
Section 10.554(1)(i)1., Rules of the Auditor General, requires that we determine whether or not corrective
actions have been taken to address findings and recommendations made in the preceding annual financial
audit report. Corrective actions have been taken to address findings and recommendations made in the
preceding annual fmancial audit report except as noted in the Schedule of Findings and Questioned Costs.
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. The name or official title and
legal authority of the Primary government are disclosed in the notes to the fmancial statements.
Miramar Office
3350 SW 148th Avenue Suite 110
Miramar, Florida 33027
(954) 874-1721
-97-
ENT FOCUSED: SOLUTION DRIVEN
info@abcpasolutions.com
Miami Office
801 Brickell Avenue Suite 900
Miami, Florida 33131
(305) 789-6673
Financial Condition
Sections 10.554(1)(i)5.a. 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 or not the City has met one or more of
the conditions described in Section 218.503(1), Florida Statutes, and identification of the specific
condition(s) met.
On June 1, 2016, the City of Opa-locks City Commission adopted a Resolution to request a declaration that
the City is in a state of financial emergency to seek the appointment of a financial emergency board and
other assistance pursuant to section 218.503(1), Florida Statues. The State of Florida, Office of the
Governor, issued Executive Order 16-135, signed by Florida Governor Rick Scott.
The City is in process of preparing its Five Year Recovery Plan in accordance with Florida Statue, 218.503
(3)(h)•
Annual Financial Report
Sections 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 fmancial report for the City
for the fiscal year ended September 30, 2017, 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, 2017. As a result of the completion of our audit, an amended annual
report will be filed with the Auditor General.
Additional Matters
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 fmancial statements that is less than material but which warrants the attention of
those charged with governance.
Matters to be disclosed pursuant to the Rules of the Auditor General Section 10.554(1)(i)3 are reported in
the accompanying Schedule of Findings and Questioned Costs.
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 members of the City Commission, and applicable
management, and is not intended to be and should not be used by anyone other than these specified parties.
September 25, 2019
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ANTHONY BRUNSON P.A.
CERTIFIED PUBLIC ACCOUNTANTS & BUSINESS ADVISORS
INDEPENDENT ACCOUNTANT'S REPORT ON COMPLIANCE WITH
REQUIREMENTS OF SECTION 218.415, FLORIDA STATUTES
To the Honorable Mayor and Member of the City Council
City of Opa-locka, Florida
We were engaged to examine the City of Opa-locka's (the City) compliance with Section 218.415, Florida Statutes,
Local Government Investment Policies for the year ended September 30, 2017. Management is responsible for the
City's compliance with those requirements. Our responsibility is to express an opinion on the City's compliance with
the specified requirements based on our examination.
The City failed to provide written investment policy that is consistent with the requirements of the applicable Florida
Statutes; as such were not able to test compliance with policy requirements. Additionally, the City's books and records
were not adequately maintained, hence we were not able to perform sufficient procedures to determine the status of
any surplus funds that the City may have.
Because of the limitation on the scope of our examination discussed in the preceding paragraph, the scope of our work
was not sufficient to enable us to express, and we do not express, an opinion on whether the City complied with the
specified requirements of Section 218.415, Florida Statutes for the year ended September 30, 2017.
September 25, 2019
Miramar Office
3350 SW 148th Avenue Suite 110
Miramar, Florida 33027
(954) 874-1721
/if
-99-
CLIENT FOCUSED: SOLUTION DR'F,N
info@abcpasolutions.com
Miami Office
801 Brickell Avenue Suite 900
Miami, Florida 33131
(305) 789-6673