HomeMy Public PortalAbout21-9878 Accepting and Approving the FY 2018-2019 AuditSponsored by: City Manager
RESOLUTION NO. 21-9878
A RESOLUTION OF THE CITY COMMISSION OF THE CITY OF
OPA-LOCKA, FLORIDA, ACCEPTING AND APPROVING THE FY
2018-2019 AUDITED FINANCIAL STATEMENT AND ANNUAL
FINANCIAL REPORT; PROVIDING FOR INCORPORATION OF
RECITALS; PROVIDING FOR AN EFFECTIVE DATE.
WHEREAS, the 2018-2019 audited financial statement has been considered
by the City Manager; and
WHEREAS, pursuant to Section 218.39, Florida Statutes, a local governmental
entity shall prepare an annual financial audit of its accounts and records completed
for the 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 audited financial statement for the fiscal
year ended September 30, 2019.
NOW THEREFORE BE IT RESOLVED THAT THE CITY COMMISSION
OF THE CITY OF OPA LOCKA, FLORIDA:
Section 1. Recitals.
The recitals to the preamble here are incorporated by reference.
Section 2. Authorization
The City Commission of the City of Opa-Locka hereby approves the Audited
Financial Statement and Annual Financial Report for the fiscal year ended
September 30, 2019.
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.
Resolution No. 21-9878
PASSED AND ADOPTED this day 9th of July, 2021.
Attest to:
Jonna Flores
City Clerk
Moved by: Commissioner Taylor
Seconded by: Vice Mayor Williams
VO 1E: 4-0
Matthew Pigatt, Mayor
Approved as to form and legal sufficiency:
Burnadette Norris -Weeks, P.A.
City Attorney
Commissioner Taylor YES
Commissioner Burke NOT PRESENT
Commissioner Davis YES
Vice -Mayor Williams YES
Mayor Pigatt YES
City John E. Pate Manager: -
Commission 07.09.2021Meeting
Date:
Fiscal
Impact: Yes No
(Enter X in box)
Funding (Enter Fund & Dept)
Source: Ex:
Account#:
Contract/P.O. Yes No
Required: X (Enter X in box)
Strategic Yes No
Plan Related
(Enter X in box) X
Sponsor City Manager
Name
.• ,gen a over emo City of Opa-locka A d C M CM Signature: Item Type: Resolution
X (Enter X in box}
Ordinance Reading:
(Enter X in box) Public Hearing: (Enter X in box)
Advertising Requirement:
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RFP /RFQ/Bid#:
Strategic Plan Priority Area:
Enhance Organizational � Bus. & Economic Dev D Public Safety
Quality of Education D
Qual. of Life & City Image D
Communcation DDepartment: Finance Department
Short Title:
.,/"'\
/A-.�JOy'diJiarlter Other V
1 st Reading 2nd Reading
Yes No Yes No
X X
Yes No
X
Strategic Plan Obj./Strategy:
{list the specific objective/strategy this
item will address)
City Manager A RESOLUTION OF THE CITY COMMISSION OF THE CITY OF OPA-LOCKA, FLORIDA, ACCEPTING AND APPROVING THE FY 2018-2019 AUDITED FINANCIAL STATEMENT Staff Summary: THE ANNUAL FINANCIAL REPORT AUDITED BY EXTERNAL AUDITING FIRM ANTHONY BRUNSON, P.A. WILL BE PRESENTED TO THE CITY COMMISSION FOR FISCAL YEAR ENDED SEPTEMBER 30, 2019. DURING THE SPECIAL COMMISSION MEETING ON JULY 09, 2021, MR. ANTHONY BRUNSON WILL PRESENT THE FISCAL YEAR ENDED SEPTEMBER 30, 2019 ANNUAL FINANCIAL REPORT. Proposed Action: STAFF RECOMMENDS THE APPROVAL OF THIS LEGISLATION. Attachment:
Finance Department 780 Fisherman Street, 4th Floor, Opa-locka, FL 33054 Phone 305-953-2868
Matthew A. Pigatt
Mayor
Veronica Williams
Vice Mayor
Chris Davis
Commissioner
Alvin Burke
Commissioner
John Taylor
Commissioner
John E. Pate
City Manager
Joanna Flores
City Clerk
Burnadette Norris-
Weeks
City Attorney
Date: July 8, 2021
To: John E. Pate, City Manager
From: Gerri Lazarre, CPA, Finance Department Consultant
Re: Presentation of the Annual Financial Report (AFR) for FY 2018-2019 by
Anthony Brunson, P.A. at the Special Commission Meeting
_______________________________________________________________
The City of Opa-locka, Florida, a local municipal government in the State of Florida,
recently finalized the fieldwork testing, closing and quality control procedures with the
external audit firm Anthony Brunson, P.A. concerning fiscal year 2019. The external
auditor issued its opinion on the City’s financial statements for the fiscal year ended
September 30, 219 as an unmodified opinion, which is known as a “clean opinion”, and
will be presented to management and the City Commission.
On July 9, 2021 at 5:00 p.m., the external auditor is presenting at a Special Commission
Meeting before the City’s Commission, management and the public, the results of the audit
for fiscal year ended September 30, 2019 as required. The presentation will discuss their
responsibilities and required communication, corrections made through audit adjustments,
the unmodified audit opinion, auditor recommendations as a result of the external audit
and the City’s representation to the external auditors which is the “Management
Representation Letter”.
Mr. Tony Brunson, the engagement partner, will be presenting the following which will
be included in the presentation package:
1. Audit Results and Financial Overview as of September 30, 2019 – “Closing Audit
Presentation 2019”
2. 2019 Audit Results and Required Communications - “Report to Those Charged with
Governance 2019”
3. Exhibit A – Audited Financial Report (AFR) - Financial Statement Audit for Fiscal Year
Ended September 30, 2019, will then be presented by Resolution to the City Commission
on July 9, 2021 at 5:00 p.m.
The AFR is required to be forwarded to the Office of the Florida Auditor General, Chief
Inspector General for the State of Florida, Joint Legislative Audit Committee (JLAC),
Florida Department of Financial Services, Miami-Dade County and any other compliance
and grantor agencies that do business with the City. In addition, the components of the
financial data are uploaded to the Florida Department of Financial Services Loger site to
meet the requirements with Chapter 218, Florida Statues, which prescribes financial
management and reporting requirements for local governments.
End
CITY OF OPA-LOCKA
Audit Results and Financial Overview
September 30, 2019
City of Opa-locka
Statements of Net Position –Governmental Activities (000s)
$0
$5,000
$10,000
$15,000
$20,000
$25,000
$30,000
$35,000
$40,000
ASSETS LIABILITITES
NET DEFERRED OUTFLOWS
(INFLOWS)NET POSITION
2019 $37,422 $29,595 $621 $8,448
2018 $35,525 $30,793 $1,626 $6,358
2017 $34,954 $29,623 $1,593 $6,924
2
City of Opa-locka
Statements of Net Position –Proprietary Activities (000s)
($2,000)
$0
$2,000
$4,000
$6,000
$8,000
$10,000
$12,000
$14,000
$16,000
$18,000
$20,000
ASSETS LIABILITITES
NET DEFERRED OUTFLOWS
(INFLOWS)NET POSITION
2019 $19,205 $19,318 $85 ($28)
2018 $17,801 $16,237 $222 $1,786
2017 $17,924 $16,923 $217 $1,218
3
City of Opa-locka
Overview of Revenues –Governmental Activities (000’s)
9%6%
48%
14%
11%
10%2%
2019
Charges for Services - $1,544 - 9%
Grants & Contributions - $1,040 - 6%
Property Taxes - $8,539 - 48%
Other Taxes - $2,542 - 14%
Franchise Fees - $1,962 - 11%
Intergovernmental Revenue $1,758 - 10%
Other Revenue - $461 - 2%
10%
5%
47%
16%
11%
5%6%
2018
Charges for Services - $1,435 - 10%
Grants & Contributions - $733 - 5%
Property Taxes - $7,092 - 47%
Other Taxes - $2,482 - 16%
Franchise Fees - $1,676 - 11%
Intergovernmental Revenue $822 - 5%
Other Revenue - $889 - 6%
4
$15,129$17,847
City of Opa-locka
Overview of Operating Expenditures –Governmental
Activities (000’s)
38%
40%
15%
4%3%
2018
General Government - $5,892 - 38%
Public Safety - $6,316 - 40%
Transportation - $2,415 - 15%
Culture and Recreation - $605 - 4%
Interest - $467 - 3%
5
$15,694
42%
40%
12%
3%3%
2019
General Government - $6,687 - 42%
Public Safety - $6,434 - 40%
Transportation - $1,938 - 12%
Culture and Recreation - $539 - 3%
Interest - $439 - 3%
$16,037
City of Opa-locka
Overview of Revenues –Proprietary Activities (000’s)
$-
$2,000
$4,000
$6,000
$8,000
$10,000
$12,000
$14,000
Charges for Services Other Revenue
2019 $13,911 $87
2018 $8,156 $228
2017 $9,329 $365
6
City of Opa-locka
Overview of Operating Expenses –Proprietary Activities
(000’s)
$-
$2,000
$4,000
$6,000
$8,000
$10,000
$12,000
$14,000
$16,000
Water and Sewer Stormwater
2019 $15,209 $1,398
2018 $9,181 $683
2017 $10,250 $1,215
7
CITY OF OPA-LOCKA
2018 AUDIT RESULTS AND REQUIRED COMMUNICATIONS
REPORT TO THOSE CHARGED WITH GOVERNANCE
Honorable Mayor & City Council
City of Opa-locka
780 Fisherman Street
Opa-locka, Florida 33054
Attention: Honorable Mayor & City Council
We are pleased to present this report related to our audit of 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 (the “City”) for the year ended September 30, 2018.
This report summarizes certain matters required by professional standards to be communicated to you in
your oversight responsibility for the City’s financial reporting process.
This report is intended solely for the information and use of the Mayor and City Council, and is not
intended to be and should not be used by anyone other than these specified parties.
We appreciate the opportunity to meet with you to discuss the contents of this report, and to answer any
questions that you may have about this report or any other audit-related matters. If you have any
questions, please contact Anthony Brunson at (305)789-6673.
ANTHONY BRUNSON P.A.
May 13, 2020
Miramar Office
3350 SW 148th Avenue | Suite 110
Miramar, Florida 33027
(954) 874-1721
Miami Office
801 Brickell Avenue | Suite 900
Miami, Florida 33131
(305) 789-6673
CITY OF OPA-LOCKA
2018 AUDIT RESULTS AND REQUIRED COMMUNICATIONS
REPORT TO THOSE CHARGED WITH GOVERNANCE
TABLE OF CONTENTS
PAGE(S)
Required Communications .......................................................................................................... 1-3
ATTACHMENT
Adjusting Journal Entries
Internal Control Recommendation
Management Representation Letter
CITY OF OPA-LOCKA
2018 AUDIT RESULTS AND REQUIRED COMMUNICATIONS
REPORT TO THOSE CHARGED WITH GOVERNANCE
1
AU-C Section 260 requires the auditor to communicate certain matters to keep those charged with
governance adequately informed about matters related to the basic financial statements audit that are,
in our professional judgment, significant and relevant to the responsibilities of those charged with
governance in overseeing the financial reporting process. The following summarizes these
communications.
Matter To Be Communicated Auditor’s Response
Auditor's Responsibility
Under Professional
Standards
Our responsibility is to form and express an opinion about whether the
basic financial statements prepared by management are presented
fairly, in all material respects, in conformity with accounting principles
generally accepted in the United States of America.
We are also responsible for conducting the audit in accordance with
auditing standards generally accepted in the United States of America
and the standards applicable to financial audits contained in
Governmental Auditing Standards. Those standards require that we
obtain reasonable rather than absolute assurance about whether the
basic financial statements are free of material misstatement, whether
caused by error or fraud. Accordingly, a material misstatement may
remain undetected. Also, an audit is not designed to detect error or
fraud that is immaterial to the basic financial statements.
Accounting Practices Accounting Policies
Management is responsible for the selection and use of appropriate
accounting policies. The significant accounting policies used by the
City are described in Note 1 to the financial statements. The City
adopted GASB 75 effective for fiscal year 2018. GASB 75. This
Statement improves the accounting and financial reporting by state
and local governments for postemployment benefits other than
pensions.
Significant or Unusual Transactions
We did not identify any significant or unusual transactions or
significant accounting policies in controversial or emerging areas for
which there is a lack of authoritative guidance or consensus.
Alternative Treatments Discussed with Management
We did not discuss with management any alternative treatments
within generally accepted accounting principles for accounting
policies and practices related to material items during the current
audit period.
CITY OF OPA-LOCKA
2018 AUDIT RESULTS AND REQUIRED COMMUNICATIONS
REPORT TO THOSE CHARGED WITH GOVERNANCE
2
Matter To Be Communicated Auditor’s Response
Management's Judgments
and Accounting Estimates
Accounting estimates are an integral part of the financial statements
prepared by management and are based on management’s
knowledge and experience about past and current events and
assumptions about future events. Certain accounting estimates are
particularly sensitive because of their significance to the financial
statements and because of the possibility that future events affecting
them may differ significantly from those expected.
For fiscal year ended September 30, 2018, management’s judgement
was called upon to establish the useful lives of fixed assets, estimate the
provision for receivables, allocate expenses by function, evaluate
pension expenses. We have determined that such estimates are
reasonable.
Financial Statement
Disclosures
We did not identify any items relating to the neutrality, consistency,
and clarity of the disclosures in the financial statements which we
deemed are required to be discussed with the City's management.
Except those associated with our qualified opinion addressing
capital assets.
Audit Adjustments See attachment.
Disagreements with
Management
We encountered no disagreements with management over the
application of significant accounting principles, the basis for
management's judgments on any significant matters, the scope of
the audit, or significant disclosures to be included in the basic
financial statements. Although the audit presented challenges due
to the turnover of staff and timing of the engagement.
Consultations with Other
Accountants
We are not aware of consultations management had with other
accountants about significant accounting or auditing matters.
Significant Issues Discussed
with Management
Significant items discussed with management during the audit were:
• Audit opinion was a qualified opinion in the current fiscal year
• Discussion of prior period adjustments
• Physical inventory of assets
• Adoption of new GASB pronouncement
• Significant number of journal entries recorded
• Internal control environment
CITY OF OPA-LOCKA
2018 AUDIT RESULTS AND REQUIRED COMMUNICATIONS
REPORT TO THOSE CHARGED WITH GOVERNANCE
3
Matter To Be Communicated Auditor’s Response
Difficulties Encountered in
Performing the Audit
We did encounter difficulties in completing the audit due to the
significant number of journal entry adjustments that were necessary
after the initial trial balance was provided to us; length of time it took
to properly reconcile significant accounts; and timeline for which the
audit was conducted (almost 2 years after the close of the fiscal year).
We had the cooperation of management and access to all appropriate
information necessary to conduct our audit.
Certain Written
Communications Between
Management and Our Firm
• Engagement letter
• Management representation letter
Other Matters There were no relationships that we believe impair our independence,
and we confirm that we are independent of the City.
Material Uncertainties
Related to Events and
Conditions that May Cast
Doubt on the Ability to
Continue as a Going Concern
We are not aware of any material uncertainties that cast doubt on
the City’s ability to continue as a going concern.
Management Letter
Recommendation
See attachment regarding audit findings and value added
recommendations.
ATTACHMENT
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, 2019
TABLE OF CONTENTS
PAGE
I. INTRODUCTORY SECTION
Letter of Transmittal i-iii
List of Principals iv
Organizational Chart v
II. FINANCIAL SECTION
INDEPENDENT AUDITORS’ REPORT 1-2
MANAGEMENT’S DISCUSSION AND ANALYSIS (Required Supplementary Information) 3-16
BASIC FINANCIAL STATEMENTS:
Government-wide Financial Statements
Statement of Net Position 17
Statement of Activities 18
Fund Financial Statements:
Balance Sheet – Governmental Funds 19
Reconciliation of the Balance Sheet Governmental Funds to the Statement of Net Position 20
Statement of Revenues, Expenditures and Changes in Fund Balances –Governmental Funds 21
Reconciliation of the Statement of Revenues, Expenditures and Changes in Fund Balances of –
Governmental Funds to the Statement of Activities 22
Statement of Net Position-Proprietary Funds 23
Statement of Revenues, Expenses and Changes in Net Position –Proprietary Funds 24
Statement of Cash Flows-Proprietary Funds 25
Notes to Basic Financial Statements 26-68
REQUIRED SUPPLEMENTARY INFORMATION (OTHER THAN MD&A):
Required Supplementary Information Budgetary Comparison Schedule:
General Fund 69
Capital Improvement Debt Service 70
Notes to Budgetary Comparison Schedule 71
Schedule of the City’s Proportionate Share of the Net Pension Liability –
Florida Retirement System Pension Plan 72
Schedule of the City’s Contributions – Florida Retirement System Pension Plan 73
Schedule of the City’s Proportionate Share of the Net Pension Liability –
Health Insurance Subsidy Pension Plan 74
Schedule of the City’s Contributions – Health Insurance Subsidy Pension Plan 75
Schedule of Changes in the City’s Total Other Post-Employment Benefits Liability and Related Ratios 76
CITY OF OPA-LOCKA, FLORIDA
ANNUAL FINANCIAL REPORT
FOR THE FISCAL YEAR ENDED
SEPTEMBER 30, 2019
TABLE OF CONTENTS
PAGE
II. FINANCIAL SECTION (Continued)
OTHER SUPPLEMENTARY INFORMATION:
Combining and Individual Fund Statements
Combining Balance Sheet - Non-Major Governmental Funds 77
Combining Statement of Revenues, Expenditures, and Changes in Fund Balance – Non-Major
Governmental Funds 78
Combining Statement of Net Position Balances - Non-Major Enterprise Funds 79
Combining Statement of Revenues, Expenditures, and Changes in Net Position – Non-Major
Enterprise Fund 80
Combining Statement of Cash Flows - Non-Major Enterprise Fund 81
III. COMPLIANCE SECTION
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 82-83
Independent Auditor’s Report on Compliance for Each Major Federal Program and
Report on Internal Control Over Compliance in Accordance with the Uniform Guidance 84-85
Schedule of Findings and Questioned Costs 86-106
Schedule of Expenditure of Federal Awards 107
Note to the Schedule of Expenditure of Federal Awards 108
Management Letter in Accordance with the Rules of the Auditor General of the State of Florida 109-110
Independent Accountant’s Report on Compliance with Requirements of
Section 218.415, Florida Statutes 111
i
ii
iii
iv
CITY OF OPA-LOCKA, FLORIDA
LIST OF PRINCIPAL OFFICIALS
CITY COMMISSION
Chris Davis
Vice Mayor
Matthew Pigatt
Mayor
Alvin Burke
Commissioner
Sherelean Bass
Commissioner
Joseph L. Kelley
Commissioner
CITY EXECUTIVE MANAGEMENT
Newall J. Daughtrey
City Manager
Joanna Flores
City Clerk
Burnadette Norris-Weeks
City Attorney
v
CITY OF OPA-LOCKA, FLORIDA
ORGANIZATIONAL CHART
FINANCIAL SECTION
- 1 -
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-locka, Florida, (the
“City”) as of and for the year ended September 30, 2019, 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 financial statements in
accordance with accounting principles generally accepted in the United States of America; this includes the
design, implementation, and maintenance of internal control relevant to the preparation and fair presentation
of financial statements that are free from material misstatement, whether due to fraud or error.
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
audit opinions.
Opinion
In our opinion, the financial statements referred to above present fairly, in all material respects, the
respective financial position of the governmental activities, the business-type activities, each major fund,
and the aggregate remaining fund information of the City of Opa-locka, Florida as of September 30, 2019,
and the respective changes in financial position and, where applicable, cash flows thereof for the year then
ended in accordance with accounting principles generally accepted in the United States of America.
- 2 -
Other Matters
Required Supplementary Information
Accounting principles generally accepted in the United States of America require that the ma nagement’s
discussion and analysis on pages 3 through 16 and budgetary comparison information on pages 69 through
71 be presented to supplement the basic financial statements. Such information, although not a part of the
basic financial statements, is required by the Governmental Accounting Standards Board, who considers it
to be an essential part of financial reporting for placing the basic financial statements in an appropriate
operational, economic, or historical context. We have applied certain limited procedures to the required
supplementary information in accordance with auditing standards generally accepted in the United States
of America, which consisted of inquiries of management about the methods of preparing the information
and comparing the information for consistency with management’s responses to our inquiries, the basic
financial statements, and other knowledge we obtained during our audit of the basic financial statements.
We do not express an opinion or provide any assurance on the information because the limited procedures
do not provide us with sufficient evidence to express an opinion or provide any assurance.
Other Information
Our audit 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 and the budgetary comparison schedules
were derived from, and relate directly to the underlying accounting and other records used to prepare the basic
financial statements. Such information has been subjected to the auditing procedures applied in the audit of
the basic financial statements and certain additional procedures, including comparing and reconciling such
information directly to the underlying accounting and other records used to prepare the basic financial
statements or to the basic financial statements themselves, and other additional procedures in accordance with
auditing standards generally accepted in the United States of America. In our opinion the combining and
individual nonmajor fund financial statements and the budgetary comparison schedules, 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 June 28, 2021,
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.
Miami, Florida
June 28, 2021
MANAGEMENT’S DISCUSSION AND ANALYSIS
(MD&A)
CITY OF OPA-LOCKA, FLORIDA
MANAGEMENT’S DISCUSSION AND ANALYSIS
FISCAL YEAR ENDED SEPTEMBER 30, 2019
- 3 -
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 financial status.
FINANCIAL HIGHLIGHTS
1. The assets and deferred outflows of resources of the City exceeded its liabilities and deferred
inflows at the close of the most recent fiscal year by $8.42 million (net position).
2. The City’s total net position increased by $275,203 or 3.4% resulting from current City operations.
3. The City’s governmental-type activities reported net position of $8.4 million representing a $2.1
million or 32.9% increase when compared to the prior year’s net position of $6.4 million.
4. The City’s business-type activities reported a net position of ($28,907), representing a decrease in
comparison to the prior year’s net position of $1.78 million. This is attributed to the allowance for
doubtful accounts for utility billing receivables and other business transactions throughout the year.
5. At the end of the fiscal year, the Governmental Fund reported a fund balance of $6.6 million,
compared to $4.8 million in the prior year, the change is related to positive transfer of the capital
projects improvement debt service fund balance to the general fund for prior year activity of more
than $1.8 million.
6. The City’s total liabilities for governmental activities declined by $1.2 million, or 3.9% during the
current fiscal year as a result of increases in due to other governments, accounts payable and accrued
liabilities, as well as compensated balances.
7. The total debt outstanding for the City’s business-type activities increased by $3.1 million, or 19%,
this increase is related to changes in contingent liabilities and long-term liabilities for water meter
replacement and installation.
CITY OF OPA-LOCKA, FLORIDA
MANAGEMENT’S DISCUSSION AND ANALYSIS
FISCAL YEAR ENDED SEPTEMBER 30, 2019
- 4 -
Overview of the Financial Statements
This annual report consists of four parts—management’s discussion and analysis (this section), the basic
financial statements, required supplementary information and an additional section that presents combining
statements for non-major governmental funds. The basic financial statements include two kinds of
statements that present different views of the City:
• The first two statements are government-wide financial statements that provide both long-term and
short-term information about the City’s overall financial status.
• The remaining statements are fund financial statements that focus on individual parts of the City
government, reporting the City’s operations in more detail than the government-wide statements.
• The governmental funds statements show how general government services such as public safety
were financed in the short term as well as what remains for future spending.
The financial statements include notes explaining some of the information in the financial statements and
provide more detailed data. The statements are followed by a section of required supplementary information
which further explains and supports the information in the financial statements. In addition to these required
elements, we have included a section with combining statements that provide details about our non-major
governmental funds, each of which is added together and presented in a single column in the basic finan cial
statements.
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.
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, and is a useful indicator of a
government’s financial position.
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 analy sis of the cost of various
governmental services and the local taxing efforts necessary to sustain each of those activities.
CITY OF OPA-LOCKA, FLORIDA
MANAGEMENT’S DISCUSSION AND ANALYSIS
FISCAL YEAR ENDED SEPTEMBER 30, 2019
- 5 -
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 storm-water, 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 17-18 of this report.
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 financial 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 financial 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 Capital Projects Improvement
Debt Service Fund was established to account for the proceeds of the 2011 and 2015 debt issuance 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 major funds within the governmental funds to demonstrate compliance with the
funds’ budgets.
The basic governmental fund financial statements can be found on pages 19-22 of this report.
CITY OF OPA-LOCKA, FLORIDA
MANAGEMENT’S DISCUSSION AND ANALYSIS
FISCAL YEAR ENDED SEPTEMBER 30, 2019
- 6 -
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 23-25 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 26-68 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.
CITY OF OPA-LOCKA, FLORIDA
MANAGEMENT’S DISCUSSION AND ANALYSIS
FISCAL YEAR ENDED SEPTEMBER 30, 2019
- 7 -
GOVERNMENT-WIDE FINANCIAL ANALYSIS
Summary of Net Position. As noted earlier, Net Position may serve over time as a useful indicator of a
government’s financial position. There are six basic transactions that will affect the comparability of the
Statement of Net Position summary presentation as reflected below:
1. Net results of activities will impact (increase/decrease) current assets and unrestricted Net Position.
2. Borrowing for capital will increase current assets and long-term debt.
3. Spending borrowed proceeds on new capital will reduce current assets and increase capital assets.
There is a second impact, an increase in invested in capital assets and an increase in related net debt
which will not change the net investment in capital assets.
4. Spending of non-borrowed current assets on new capital will reduce current assets and increase
capital assets and will reduce unrestricted Net Position and net investment in capital assets.
5. Principal payment on debt will reduce current assets and reduce long-term debt and reduce
unrestricted Net Position and increase net investment in capital assets.
6. Reduction of capital assets through depreciation will reduce capital assets and net investment in
capital assets.
The following schedule is a summary of the fiscal year 2019 Statement of Net Position with comparative
information for fiscal year 2018.
Governmental
Activities
Business-type
Activities Total
2019 2018 Change 2019 2018 Change 2019 2018 Change
Current and other assets $ 12,804,303 $ 10,336,428 24% $ 6,165,261 $ 6,484,200 -5% $ 18,969,564 $ 16,820,628 13%
Capital assets, net 24,618,684 25,189,033 -2% 13,039,473 11,317,139 15% 37,658,158 36,506,172 3%
Total assets 37,422,988 35,525,461 5% 19,204,734 17,801,339 8% 56,627,722 53,326,800 6%
Deferred outflow of resources 3,049,245 3,949,017 -23% 415,806 538,502 -23% 3,465,051 4,487,519 -23%
Current and other liabilities 6,177,768 6,472,085 -5% 5,191,877 5,167,983 0% 11,369,645 11,640,068 -2%
Long-term liabilities 23,418,134 24,320,704 -4% 14,126,495 11,069,175 28% 37,544,629 35,389,879 6%
Total liabilities 29,595,902 30,792,789 -4% 19,318,372 16,237,158 19% 48,914,274 47,029,947 4%
Deferred inflow of resources 2,427,886 2,323,230 5% 331,075 316,805 5% 2,758,961 2,640,035 5%
Net assets:
Invested in capital assets, net
of related debt 12,712,613 12,342,000 3% 8,138,852 6,263,470 30% 20,851,465 18,605,470 12%
Restricted 2,737,747 2,873,620 -5% - - 0% 2,737,747 2,873,620 -5%
Unrestricted (7,001,915) (8,857,161) 21% (8,167,759) (4,477,594) 82% (15,169,674) (13,334,755) 14%
Total net assets $ 8,448,445 $ 6,358,459 33% $ (28,907) $ 1,785,876 -102% $ 8,419,538 $ 8,144,335 3%
CITY OF OPA-LOCKA, FLORIDA
MANAGEMENT’S DISCUSSION AND ANALYSIS
FISCAL YEAR ENDED SEPTEMBER 30, 2019
- 8 -
STATEMENT OF NET POSITION
The overall net position of the City increased in fiscal year 2019, from the prior year net position, by
$275,203 or 4%. The net position was $8.1 million in FY 2018 and FY 2019 net position is $8.4 million.
The changes in net position over time can be one of the best and most useful indicators of financial health.
The governmental activities of the City’s current and other assets increased by 24% while the current
liabilities of those activities decreased by 4.5%. Meanwhile, the business-type activities of the City’s current
and other assets decreased by 5% while the current liabilities of those activities increased by $23,894.
The governmental activities invested in capital assets, net of related debt was $12.3 million in the previous
year and $12.7 million in the current year. Meanwhile, the previous year’s unrestricted net position was
($8.8) million and is now ($13.1) million as a result of classification changes.
The business-type activities invested in capital assets, net of related debt was $6.2 million in the previous
year and $8.1 million in the current year. Meanwhile, the previous year’s unrestricted net position was
($4.4) million and is now ($8.1) million as of increases the allowance for doubtful accounts.
Five Years Total Net Position
(In millions)
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 oth er
sources, since the capital assets themselves cannot be used to liquidate these liabilities.
$7.8 $8.0 $8.1 $8.1
$8.4
2015 2016 2017 2018 2019
Mi
l
l
i
o
n
s
Fiscal Year
Total Net Assets
CITY OF OPA-LOCKA, FLORIDA
MANAGEMENT’S DISCUSSION AND ANALYSIS
FISCAL YEAR ENDED SEPTEMBER 30, 2019
- 9 -
STATEMENT OF ACTIVITIES
The following schedule is a summary of the fiscal year 2019 Statement of Activities with comparative
information to fiscal year 2018:
Governmental
Activities
Business-type
Activities Total
2019 2018 Change 2019 2018 Change 2019 2018 Change
Revenues:
Program revenues:
Charges for services $ 1,544,202 $ 1,434,921 8% $ 13,910,678 $ 8,156,228 71% $ 15,454,880 $ 9,591,149 61%
Operating /capital grants and cont. 1,039,836 733,240 42% 81,652 228,000 -64% 1,121,488 961,240 17%
General revenues:
Property taxes 8,539,449 7,091,758 20% - - 0% 8,539,449 7,091,758 20%
Other taxes 2,542,276 2,481,869 2% - - 0% 2,542,276 2,481,869 2%
Franchise fees 1,962,804 1,675,728 17% - - 0% 1,962,804 1,675,728 17%
Intergovernmental, unrestricted 1,758,132 822,465 114% - - 0% 1,758,132 822,465 114%
Interest 33 1,113 -97% 24 - N/A 56 1,113 -95%
Other 460,559 888,059 -48% 5,549 - N/A 466,108 888,059 -48%
Total revenues 17,847,291 15,129,153 18% 13,997,902 8,384,228 67.0% 31,845,193 23,513,381 35%
Expenses and transfers:
General government 6,409,284 5,892,068 9% - - 0% 6,409,284 5,892,068 9%
Public safety 6,434,509 6,316,205 2% - - 0% 6,434,509 6,316,205 2%
Transportation 1,937,852 2,414,667 -20% - - 0% 1,937,852 2,414,667 -20%
Culture and recreation 539,280 604,816 -11% - - 0% 539,280 604,816 -11%
Interest and fiscal charges 438,682 466,622 -6% - - 0% 438,682 466,622 -6%
Water and sewer - - 0% 15,209,280 9,180,678 66% 15,209,280 9,180,678 66%
Stormwater - - 0% 1,398,452 682,664 105% 1,398,451 682,664 105%
Solid Waste - - 0% - (4,108) -100% - (4,108) -100%
Total expenses 15,759,608 15,694,378 0% 16,607,732 9,859,234 68% 32,367,339 25,553,612 27%
Increase (decrease) in net positions 2,087,683 (565,225) -469% (2,609,829) (1,475,006) -77% (522,146) (2,040,231) -74%
Net position, beginning 6,358,459 6,924,303 -8% 1,785,876 1,218,088 47% 8,144,335 8,142,391 0%
Prior period adjustment 2,303 (619) -472% 795,046 2,042,780 -61% 797,349 2,042,161 -61%
Net position, beginning, as restated 6,360,762 6,923,684 -8% 2,580,922 3,260,868 -21% 8,941,684 10,184,552 -12%
Net positions, ending $ 8,448,445 $ 6,358,459 33% $ (28,907) $ 1,785,862 -102% $ 8,419,538 $ 8,144,321 3%
The Statement of Activities reflects a 35% increase in overall revenues compared to the prior year.
Meanwhile, total expenses rose by 27%.
The governmental activities account for the most significant activities within the City, with program revenues
of $17.8 million. Total overall increase by 18% in governmental activities over the prior year was due to an
increase in general government services activities such as charge for services, and other areas such as
intergovernmental revenues, franchise fees, and property taxes.
The business-type activities represent water and sewer, solid waste and storm water operations which
reflected a $5.6 million or 67% increase in total revenues. The increase is due to the transitioning of the
utility billing operation from the City to Miami Dade County’s Water and Sewer Department (WASD), in
addition to progressive billings by the City prior to the transitioning.
CITY OF OPA-LOCKA, FLORIDA
MANAGEMENT’S DISCUSSION AND ANALYSIS
FISCAL YEAR ENDED SEPTEMBER 30, 2019
- 10 -
Sources of Revenue for Fiscal Year 2019
BUSINESS-TYPE ACTIVITIES
The Business-type Activities are comprised of the Water and Sewer, Solid Waste and Stormwater Fund.
• The total revenues for the Proprietary or Enterprise Fund was approximately $14 million, which
was a 67% increase from the prior year’s $8.4 million. This improvement was the result of a
combination of (a) transitioning the water, sewer and stormwater billings to Miami-Dade County
Water & Sewer and (b) progressive billing practices within the City prior to the transition of water
and sewer billings to Miami-Dade County Water & Sewer.
• The Solid Waste Fund activity is not being managed in house by the City, and is being outsourced
to Miami-Dade County.
FINANCIAL ANALYSIS OF THE CITY’S FUNDS
The City uses fund accounting to ensure and demonstrate compliance with finance-related legal
requirements.
49%
4%
27%
8%
6%
5%0%1%
Fiscal Year 2019
Charges for services
Operating /capital grants and cont.
Property taxes
Other taxes
Franchise fees
Intergovernmental, unrestricted
Unrestricted interest earnings
Miscellaneous
CITY OF OPA-LOCKA, FLORIDA
MANAGEMENT’S DISCUSSION AND ANALYSIS
FISCAL YEAR ENDED SEPTEMBER 30, 2019
- 11 -
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.
At September 30, 2019, the City’s governmental funds reported combined ending fund balance of $6.6
million compared to $4.8 million in the prior year, an increase of $1.8 million in fund balance associated
with transfers of debt service fund balance to the general fund after the release of restrictions, and other
miscellaneous correction of errors from prior periods. Most of the remaining fund balance is restricted to
indicate that it is not available for new spending because it has already been committed or restricted to pay
1) debt service, 2) transportation and 3) public safety. Additionally, there are restrictions to cash on hand
being held associated with the 2015A&B bonds held by 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, negative ($2.2) million as compared to a negative ($3.96) million in the prior fiscal year,
representing a significant increase due to transfers and reclassification of capital projects improvement debt
service funds being properly re-allocated to the general fund related to prior years for funds in excess of debt
service pledged to the capital improvement and debt service fund.
Total revenues for the general fund rose by $2.3 million, or 21%, this is related to increases in property
taxes, franchise fees, fines and forfeitures and other financing sources of $978,660 related to transfers from
the capital projects improvement debt service fund in the current year. It is important to note that a large
source of state revenue sharing was withheld in fiscal year ending September 30, 2018 and some in
September 30, 2019, 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
2019
Amount
Percent
of Total
2018
Amount
Percent
of Total
Increase
(Decrease)
From 2018
Percent of
Increase
(Decrease)
Property taxes $ 7,984,161 60% $ 6,734,982 61% $ 1,249,179 19%
Utility service taxes 77,475 1% 63,454 1% 14,021 22%
Local option, use and service taxes - 0% 29,104 0% (29,104) -100%
Franchise fees 1,962,804 15% 1,675,728 15% 287,076 17%
Local business taxes 284,844 2% 301,715 3% (16,871) -6%
Permits and fees 693,714 5% 737,810 7% (44,096) -6%
Intergovernmental 117,711 1% 45,500 0% 72,211 159%
Charges for services 178,402 1% 148,460 1% 29,942 20%
Fines and forfeitures 662,776 5% 548,651 5% 114,125 21%
Interest - 0% - 0% - 0%
Other revenue 460,559 3% 816,080 7% (355,521) -44%
Other financial sources 978,660 7% - 0% 978,660 N/A
Total Revenues $ 13,401,106 100% $ 11,101,484 100% $ 2,299,622 21%
CITY OF OPA-LOCKA, FLORIDA
MANAGEMENT’S DISCUSSION AND ANALYSIS
FISCAL YEAR ENDED SEPTEMBER 30, 2019
- 12 -
Total expenditures for the general fund increased by $555,572, representing a 4% increase in expenditures.
This increase was comprised of a $1.6 million increase in general government, and a decrease by $1.1
million in transportation cost to name a few. Expenditures in the general fund are shown in the following
schedule:
General Fund Expenditures
2019
Amount
Percent
of Total
2018
Amount
Percent
of Total
Increase
(Decrease)
From 2018
Percent of
Increase
(Decrease)
General government $ 5,586,321 41% $ 3,975,884 30% $ 1,610,437 41%
Public safety 6,430,103 47% 6,307,538 48% 122,565 2%
Transportation 882,692 6% 1,963,493 15% (1,080,801) -55%
Culture and recreation 539,280 4% 604,816 5% (65,536) -11%
Debt Service 53,011 0% 76,555 1% (23,544) -31%
Capital outlay 201,825 1% 209,374 2% (7,549) -4%
Other financing uses - 0% - 0% - 0%
Total expenditures $ 13.693,232 100% $ 13,137,660 100% $ 555,572 4%
Proprietary Funds
• The City’s proprietary fund statements provide the same type of information found in the
government-wide financial statements, but in more detail. The unrestricted net position of the water
and sewer, storm water, and solid waste funds at the end of the prior year was at a deficit of ($4.5)
million in prior year and is now a deficit of ($8.8), mainly attributed to an increase in doubtful
accounts of more than $5.1 million in fiscal year 2019. The total net position for the enterprise fund
is ($28,907) in the current year versus a $1.8 million in the prior year, the decrease is as a result of
provisions made for doubtful utility billing, contingencies and other.
GENERAL FUND BUDGETARY HIGHLIGHTS
During the year there were adjustments to the appropriations between the original and final amended
budget. Overall, the City’s actual total revenues were more than budgeted while overall expenditures were
under budget; this created an excess of expenditures over revenues of $1.2 million.
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, 2019, amounted to $37.6 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. The City’s investment in capital assets rose by $1.2 million for the current
fiscal year, primarily due to additions related to new water meter replacement and installation of $1.6
million and other additions to capital assets, reductions due to depreciation expense, deletions, and
adjustments to accumulated depreciation.
CITY OF OPA-LOCKA, FLORIDA
MANAGEMENT’S DISCUSSION AND ANALYSIS
FISCAL YEAR ENDED SEPTEMBER 30, 2019
- 13 -
Major capital assets additions during the current fiscal year included the following:
• Construction in progress for Cairo Lane;
• Sewer line projects on Bahman Avenue;
• Meter replacement and installation;
• The milling and resurfacing of portions of the streets listed below:
o Ahmad Street, Aladdin Street, Jann Avenue, Kalandar Street, N.W. 26th Avenue, Opa-locka Blvd
and Sinbad Avenue;
• Vehicles, Furniture & Equipment.
City of Opa-locka’s Capital Assets
(Net of accumulated depreciation)
Governmental Activities Business-type Activities Total
2019 2018 2019 2018 2019 2018
Land $ 2,980,457 $ 2,980,457 $ 14,762 $ 14,762 $ 2,995,219 $ 2,995,219
Construction in progress 2,114,944 2,114,944 4,790,244 4,084,879 6,905,188 6,199,823
Buildings and building improvements 14,834,316 15,213,621 - - 14,834,316 15,213,621
Furniture and equipment 216,722 (8,609) 1,983,681 333,405 2,200,403 324,796
Infrastructure 4,472,245 4,888,619 6,256,747 6,884,102 10,728,992 11,772,721
Total $ 24,618,684 $ 25,189,032 $ 13,045,434 $ 11,317,148 $ 37,664,118 $ 36,506,180
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 outstanding debt, both current and long-term, of $48.9
million, exclusive of deferred inflow of resources. For long-term debt note disclosures, see Note 9.
Governmental Activities Business-type Activities Total
2019 2018 2019 2018 2019 2018
Revenue bonds $ 11,906,072 $ 12,627,334 $ - $ - $ 11,906,072 $ 12,627,334
Capital leases - 5,463 - - - 5,463
Loans, State Revolving - - 4,900,621 5,053,667 4,900,621 5,053,667
GASB 68 liability 8,941,473 9,076,099 1,219,292 1,237,650 10,160,765 10,313,749
Liability to Miami-Dade 207,334 214,236 6,790,417 5,356,061 6,997,751 5,570,297
OPEB 331,170 300,161 45,936 41,709 377,106 341,870
Compensated absences 1,779,211 1,750,962 100,228 107,644 - 1,858,606
Legal 252,875 1,296,683 1,070,000 - - 1,296,683
Total $ 23,418,135 $ 25,270,938 $ 14,126,494 $ 11,796,731 $ 34,342,315 $ 37,067,669
CITY OF OPA-LOCKA, FLORIDA
MANAGEMENT’S DISCUSSION AND ANALYSIS
FISCAL YEAR ENDED SEPTEMBER 30, 2019
- 14 -
ECONOMIC FACTORS AND NEXT YEAR’S BUDGET AND RATES
During fiscal year 2020, 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 2020 and moving
forward, the City will be looking to improve and enhance its operational and financial controls and has made
significant strides since then.
• Development of key audit schedules and documentation to begin the external audit work for fiscal year 2019
and beyond. Additional temporary accounting and audit staff were engaged to assist with completion of this
task.
• Four of 19 pump stations remain out of compliance with Miami-Dade County’s (“County”) Department of
Environmental Resources Management (DERM). These are stations 4, 5, 7, and 8. Gravity system lining
has been completed in all of these service areas to mitigate infiltration, the City will then follow with
rehabilitating all of the manholes; after which flow testing will be conducted to ensure compliance with the
Miami-Dade County code.
• The County’s Public Housing and Community Development provided the City with a second allocation of
funds, in the amount of $250,000 to bring the 2105 Ali Baba Avenue Cultural Arts Center into full
compliance with ADA requirements. This will include renovations to parking lot.
• In August of 2019, Intercounty Engineering mutually terminated the contract with the City of Opa-locka for
the improvement of Cairo Lane and NW 127 Street; the project stands at 64% complete. The City met with
the Florida Department of Environmental Protection (FDEP) to ensure there would be adequate funding to
complete the project. It was at this time that the state required the City to retain the services of a professional
engineer to ensure that the project design would be adequate for construction, and evaluate all constructed
aspects of the project. This evaluation is in progress and the project should be going out for bid in February
2022.
• For fiscal year 2020-2021, residential development will begin to experience an uptick in the City of Opa-
locka. Several homes have been rehabbed with new windows, doors, and roofs through the PACE Energy
Improvement Program. Three new houses were built with a few more in planning phase in the South Area
of Town Center bounded by Opa-locka Boulevard to the Northeast, the CSX Railroad ROW to the
Northwest and Atlantic Street to the South between NW 27th Avenue and Sesame Street. One house was an
infill project built on a former City owned surplus vacant lot at 825 Superior Street. Two houses at 931 and
951 Superior Street were built on a site where the Historic King Truck Factory once stood. The 1930
structure was demolished in 2017 after years of neglect and fire took inside of the historic structure. In the
Magnolia North area, the City is working with Miami-Dade County’s Infill Housing Project team members
for development located within the boundaries of NW 22nd Avenue and Ali-Baba to NW 151st Street to the
railroad tracks. Seventeen [17] vacant properties have been assigned for residential development. Miami-
Dade County’s Public Housing and Community Development (PHCD) is working with City staff to develop
these properties. Palmetto Homes is one of the developers selected by Miami-Dade County [per
recommendation by PHCD] to build residential and mixed use development in the Magnolia North area.
Two-twin homes [4 units] are under construction and are scheduled to be completed by the end of fiscal year
2021. This company has four more nearby sites to be built on during fiscal year 2021-23. Cazo has two
CITY OF OPA-LOCKA, FLORIDA
MANAGEMENT’S DISCUSSION AND ANALYSIS
FISCAL YEAR ENDED SEPTEMBER 30, 2019
- 15 -
projects planned for development, one is four twin houses [8-units] for homeownership, and the other is a
42-unit elderly assisted living apartment complex. The City of Opa-locka recently transferred ownership of
11 vacant parcels in the Magnolia North Area and is working with private developers to produce residential
and mixed use projects. The 11 vacant City owned properties in Magnolia North were proffered as part of a
settlement agreement. The properties with deed restriction and reverter clause with Miami-Dade County
were resolved per legislation by the City of Opa-locka Commission’s approval of a resolution for the deed
restriction to be modified for residential development. Miami-Dade County’s Board of County
Commissioners also approved this deed amendment. The legal settlement is almost complete, and Opa-
locka PCD staff will be meeting with the new owners/developers to determine what will be built on these
sites. In the Oasis Neighborhood just across the lake from Magnolia Gardens, 112-units of townhouse cluster
homes are being developed as part of the final phase of a development called Mirage of Sailboat Cove. What
originally started as 59 units for homeowners in 2005, will now include a phase of affordable workforce
rentals, of which 24 units recently received their certificate of occupancy and the remaining units are
scheduled to be completed by the end of fiscal year 2021. Once complete, Mirage at Sailboat Cove will total
171 units, all two story three and four bedroom units with 2.5 bath. Commercial and industrial projects are
being planned.
• Work to expand the City’s online services to allow residents to access an e -commerce platform, is
ongoing, and anticipated to be complete and released during fiscal year 2019. The migration of water
billing to Miami-Dade County’s Water and Sewer Department (WASD) has allowed the City to refocus
the online portal portion of the website to other online services. The City Clerk’s Office in conjunction
with the Information Technology Department has created an online portal which allows the public
access to official City documents through the website. Additionally, the ability to submit building plans
via the portal was enabled. A data cleanup is still underway in the Building Department which is
necessary to complete the ability to have access to permit applications and status updates online.
CITY OF OPA-LOCKA, FLORIDA
MANAGEMENT’S DISCUSSION AND ANALYSIS
FISCAL YEAR ENDED SEPTEMBER 30, 2019
- 16 -
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. (See attached milling and resurfacing
plan.)
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.
BASIC FINANCIAL STATEMENTS
CITY OF OPA-LOCKA, FLORIDA
STATEMENT OF NET POSITION
SEPTEMBER 30, 2019
- 17 -
Governmental
Activities
Proprietary
Activities Total
ASSETS
Current assets:
Cash and cash equivalents $ 3,098,320 $ 2,275,445 $ 5,373,765
Accounts receivable, net 551,128 3,483,324 4,034,453
Internal balance 1,360,506 (1,360,506) -
Due from other governments 2,514,023 290,564 2,804,586
Prepaids and other 6,363 29,149 35,512
Restricted cash and cash equivalents 5,273,963 1,447,285 6,721,247
Total current assets 12,804,303 6,165,261 18,969,564
Non-current assets:
Capital assets not being depreciated 5,095,402 4,805,006 9,900,407
Capital assets being depreciated 19,523,283 8,234,468 27,577,249
Total non-current assets 24,618,684 13,039,473 37,658,158
Total assets 37,422,988 19,204,734 56,627,721
DEFERRED OUTFLOW OF RESOURCES
Pension (See Note 9) 3,049,245 415,806 3,465,051
Total deferred outflow of resources 3,049,245 415,806 3,465,051
LIABILITIES
Current liabilities:
Accounts payable and accrued liabilities 3,362,816 1,305,901 4,668,717
Due to other governments 2,781,157 342,249 3,123,407
Customer deposits 33,795 3,543,727 3,577,522
Total current liabilities 6,177,768 5,191,877 11,369,645
Non-current liabilities:
Due within one year:
Compensated absences 177,921 10,023 187,944
Debt related to capital acquisitions 797,140 638,934 1,436,074
Other long term debt 40,472 1,013,185 1,053,657
Due in more than one year:
Compensated absences 1,601,290 90,205 1,691,495
Contingencies 252,875 1,070,000 1,322,875
OPEB obligation 331,170 45,937 377,107
Debt related to capital acquisitions 11,108,931 4,261,687 15,370,619
Pension (See Note 9) 8,941,473 1,219,292 10,160,764
Other long term debt 166,862 5,777,233 5,944,095
Total non-current liabilities 23,418,134 14,126,495 37,544,629
Total liabilities 29,595,902 19,318,372 48,914,274
DEFERRED INFLOW OF RESOURCES
Pension (See Note 9) 2,427,886 331,075 2,758,961
Total deferred inflow of resources 2,427,886 331,075 2,758,961
NET POSITION
Invested in capital assets, net of related debt 12,712,613 8,138,852 20,851,465
Restricted for:
CRA 779,900 - 779,900
Public safety 670,731 - 670,731
Transportation 1,130,655 - 1,130,655
Capital projects 156,461 - 156,461
Debt service 6,101,588 - 6,101,588
Unrestricted (13,103,503) (8,167,759) (21,271,262)
Total Net Position $ 8,448,445 $ (28,907) $ 8,419,538
See notes to basic financial statements.
CITY OF OPA-LOCKA, FLORIDA
STATEMENT OF ACTIVITIES
FOR THE YEAR ENDED SEPTEMBER 30, 2019
- 18 -
Program Revenues
Net (Expense) Revenue and
Changes in Net Position
Functions / Programs Expenses
Charges
for Services
Operating
Grants and
Contributions
Capital
Grants and
Contributions
Governmental
Activities
Proprietary
Activities Total
Governmental activities:
General government $ 6,409,283 $ 881,426 $ - $ - $ (5,527,857) $ - $ (5,527,857)
Public safety 6,434,509 662,776 - - (5,771,733) - (5,771,733)
Transportation 1,937,852 - - - (1,937,852) - (1,937,852)
Culture and recreation 539,280 - - - (539,280) - (539,280)
Interest on long term debt 438,682 - - - (438,682) - (438,682)
Total governmental activities 15,759,606 1,544,202 - - (14,215,404) - (14,215,404)
Proprietary activities:
Water and sewer 15,209,280 12,374,987 - 81,652 - (2,752,642) (2,752,642)
Stormwater 1,398,451 1,535,691 - - - 137,240 137,240
Solid waste - - - - - - -
Total proprietary activities 16,607,732 13,910,678 - 81,652 - (2,615,402) (2,615,402)
Total $ 32,495,316 $ 15,454,880 $ - $ 81,652 (14,215,404) (2,615,402) (16,830,806)
General revenues
Property taxes 8,539,449 - 8,539,449
Franchise fees 1,962,804 - 1,962,804
Utility taxes 1,541,065 - 1,541,065
Communication services tax 399,446 - 399,446
Local option, use and fuel taxes 316,921 - 316,921
Local business tax 284,844 - 284,844
Intergovernmental revenue - unrestricted 2,797,968 - 2,797,968
Unrestricted interest earnings 33 24 56
Other 460,559 5,549 466,108
Total general revenues and transfers 16,303,089 5,573 16,308,661
Change in net position 2,087,684 (2,609,829) (522,145)
Net position, beginning 6,358,459 1,785,876 8,144,335
Prior period adjustment 2,302 795,046 797,348
Net position, beginning adjusted 6,360,761 2,580,922 8,941,683
Net position, ending $ 8,448,445 $ (28,907) $ 8,419,538
See notes to basic financial statements
CITY OF OPA-LOCKA, FLORIDA
BALANCE SHEET ― GOVERNMENTAL FUNDS
SEPTEMBER 30, 2019
- 19 -
General
Fund
Capital Projects
Improvement
Debt Service
Other Nonmajor
Governmental
Funds
Total
Governmental
Funds
ASSETS
Current assets:
Cash and cash equivalents $ 1,965,326 $ - $ 1,132,994 $ 3,098,320
Accounts receivable, net 442,756 108,372 - 551,128
Due from other funds 23,981,253 4,648,694 5,397,093 34,027,039
Due from other governments - 342,328 2,171,694 2,514,023
Prepaids and other 6,363 - - 6,363
Restricted cash and cash equivalents 759,354 4,445,504 69,104 5,273,963
Total current assets 27,155,052 9,544,899 8,770,885 45,470,836
Total assets $ 27,155,052 $ 9,544,899 $ 8,770,885 $ 45,470,836
LIABILITIES
Current liabilities:
Accounts payable and accrued liabilities $ 2,994,778 $ - $ 368,039 $ 3,362,816
Due to other funds 23,558,122 3,443,311 5,665,100 32,666,533
Due to other governments 2,781,157 - - 2,781,157
Customer deposits 33,795 - - 33,795
Total current liabilities 29,367,852 3,443,311 6,033,138 38,844,301
Total liabilities 29,367,852 3,443,311 6,033,138 38,844,301
NET POSITION
Non-spendable:
Prepaids and other 6,363 - - 6,363
Restricted for:
CRA - - 779,900 779,900
Public safety - - 670,731 670,731
Transportation - - 1,130,655 1,130,655
Capital projects - - 156,461 156.461
Debt service - 6,101,588 - 6,101,588
Unrestricted (2,219,163) - - (2,219,163)
Total Fund Balances (2,212,800) 6,101,588 2,737,747 6,626,535
Total Liabilities and Fund Balances $ 27,155,052 $ 9,544,899 $ 8,770,885 $ 45,470,836
See notes to basic financial statements.
CITY OF OPA-LOCKA, FLORIDA
RECONCILIATION OF THE BALANCE SHEET OF
GOVERNMENTAL FUNDS TO THE STATEMENT OF NET POSITION
SEPTEMBER 30, 2019
- 20 -
Fund balances - total governmental funds $ 6,626,535
Amounts reported for governmental activities in the statement
of net assets are different because:
Capital assets used in governmental activities are not financial
resources and, therefore, are not reported in the governmental funds.
Government capital assets net of accumulated depreciation $ 24,618,684
Long-term debt (11,906,071)
Pension liability (8,941,473)
Compensated absences (1,779,211)
Other post-employment benefits (331,170)
Deferred inflow of resources (2,427,886)
Deferred outflow of resources 3,049,245
Accrued legal settlement (252,875)
Other long term debt (207,334)
Net adjustment 1,821,910
Net position of governmental activities $ 8,448,445
See notes to basic financial statements.
CITY OF OPA-LOCKA, FLORIDA
STATEMENT OF REVENUES, EXPENDITURES, AND CHANGES IN FUND
BALANCES―GOVERNMENTAL FUNDS
FOR THE YEAR ENDED SEPTEMBER 30, 2019
- 21 -
General
Fund
Capital Projects
Improvement
Debt Service
Other Nonmajor
Governmental
Funds
Total
Governmental
Funds
REVENUES
Property taxes $ 7,984,161 $ - $ 555,288 $ 8,539,449
Utility taxes 77,475 1,463,590 - 1,541,065
Communication services taxes - 399,446 - 399,446
Local option, use and fuel taxes - - 316,921 316,921
Local business taxes 284,844 - - 284,844
Franchise fees 1,962,804 - - 1,962,804
Permits and fees 693,714 - - 693,714
Intergovernmental 117,711 1,665,617 1,014,641 2,797,968
Charges for services 178,402 - 9,310 187,712
Fines and forfeitures 662,776 - - 662,776
Interest - 33 - 33
Other 460,559 - - 460,559
Total revenues 12,422,446 3,528,685 1,896,159 17,847,291
EXPENSES
Current:
General government 5,586,321 8,007 66,660 5,660,988
Public safety 6,430,103 - 4,406 6,434,509
Transportation 882,692 - 1,055,160 1,937,852
Culture and recreation 539,280 - - 539,280
Debt service:
Principal 53,011 771,488 - 824,499
Interest - 438,682 - 438,682
Capital Outlay 201,825 - - 201,825
Total expenses 13,693,232 1,218,177 1,126,226 16,037,635
Excess (deficiency) of revenues over expenditures (1,270,785) 2,310,508 769,933 1,809,656
OTHER FINANCING SOURCES (USES):
Transfer in 978,660 - - 978,660
Transfer out - (978,660) - (978,660)
Total other financing sources (uses) 978,660 (978,660) - -
Net change in fund balances (292,125) 1,331,848 769,933 1,809,656
Fund balances, beginning (3,964,529) 6,583,852 2,195,254 4,814,577
Prior period adjustment 2,043,855 (1,814,112) (227,440) 2,302
Fund balances, beginning restated (1,920,674) 4,769,740 1,967,814 4,816,879
Fund balances, ending $ (2,212,800) $ 6,101,588 $ 2,737,747 $ 6,626,535
See notes to basic financial statements.
CITY OF OPA-LOCKA, FLORIDA
RECONCILIATION OF THE STATEMENT OF
REVENUES, EXPENDITURES AND CHANGES IN FUND BALANCES
OF THE GOVERNMENTAL FUNDS TO THE STATEMENT OF ACTIVITIES
FOR THE YEAR ENDED SEPTEMBER 30, 2019
- 22 -
Amounts reported for governmental activities in the statement of activities are
different because:
Net change in fund balances - total governmental funds $ 1,809,656
Governmental funds report capital outlays as expenditures. However, in the statement of
activities, the cost of those assets is allocated over their useful lives and reported as
depreciation expense. The amount by which capital outlays exceeded depreciation in
the current period.
Expenditures for capital outlays 218,612
Net effect of various transactions involving capital assets (42,234)
Less current depreciation (788,951) (612,573)
Issuance of long term debt (e.g., bonds leases) provides current financial resources to
governmental funds, while the repayment of the principal of long term debt consumes
the current financial resources of governmental funds. Neither transaction, however,
has any effect on net position.
775,852
Some expenses 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:
Change in deferred inflows and outflows relating to
pensions and the net pension liability (869,801)
Change in legal accrual 1,043,808
Change in other post-employment benefits (31,009)
Change in compensated absences (28,249)
114,749
Change in net position - governmental activities $ 2,087,684
See notes to basic financial statements.
CITY OF OPA-LOCKA, FLORIDA
STATEMENT OF NET POSITION ―PROPRIETARY FUNDS
FOR THE YEAR ENDED SEPTEMBER 30, 2019
- 23 -
Water and
Sewer
Other Nonmajor
Enterprise Funds Total
ASSETS
Current assets:
Cash and cash equivalents $ 253,188 $ 2,022,257 $ 2,275,445
Accounts receivable, net 3,135,540 347,785 3,483,324
Due from other funds 5,255,051 2,396,209 7,651,260
Due from other governments 252,050 38,514 290,564
Prepaids and other 29,149 - 29,149
Restricted cash and cash equivalents 1,337,285 110,000 1,447,285
Total current assets 10,262,262 4,914,765 15,177,027
Non-current assets:
Capital assets, non-depreciable 4,515,949 289,056 4,805,006
Capital assets, depreciable 8,202,478 31,990 8,234,468
Total non-current assets 12,718,428 321,046 13,039,473
Total assets 22,980,690 5,235,810 28,216,500
DEFERRED OUTFLOW OF RESOURCES
Pension 415,806 - 415,806
Total deferred outflow of resources 415,806 - 415,806
LIABILITIES
Current liabilities:
Accounts payable and accrued liabilities 1,041,137 264,764 1,305,901
Due to other funds 5,989,781 3,021,985 9,011,766
Due to other governments 342,249 - 342,249
Customer deposits 3,479,583 64,145 3,543,727
Current portion of long term debt 638,934 - 638,934
Total current liabilities 11,491,684 3,350,893 14,842,577
Non-current liabilities:
Compensated absences 71,917 28,311 100,228
Contingencies 1,070,000 - 1,070,000
OPEB obligation 41,942 3,996 45,937
Debt related to capital acquisitions 4,261,687 - 4,261,687
Pension 1,219,292 - 1,219,292
Other long term debt 6,259,446 530,972 6,790,418
Total non-current liabilities 12,924,283 563,278 13,487,561
Total liabilities 24,415,967 3,914,171 28,330,138
DEFERRED INFLOW OF RESOURCES
Pension 331,075 - 331,075
Total deferred inflow of resources 331,075 - 331,075
NET POSITION
Invested in capital assets, net of related debt 8,456,740 321,046 8,777,786
Unrestricted (9,807,286) 1,000,594 (8,806,693)
Total Net Position $ (1,350,546) $ 1,321,639 $ (28,907)
See notes to basic financial statements.
CITY OF OPA-LOCKA, FLORIDA
STATEMENT OF REVENUES, EXPENSES, AND CHANGES IN
NET POSITION ―PROPRIETARY FUNDS
FOR THE YEAR ENDED SEPTEMBER 30, 2019
- 24 -
Business-Type Activities-Enterprise Funds
Water and
Sewer
Other Nonmajor
Enterprise Funds Total
Operating revenues:
Charges for services $ 12,374,987 $ 1,535,691 $ 13,910,678
Intergovernmental 81,652 - 81,652
Other 5,549 - 5,549
Total operating revenues 12,462,187 1,535,691 13,997,878
Operating expenses:
Operating, administrative and maintenance 10,056,961 706,472 10,763,433
Bad debts and other 4,460,908
691,979 5,152,887
Depreciation 691,411 - 691,411
Total operating expenses 15,209,280 1,398,451 16,607,732
Operating income (loss) (2,747,093) 137,240 (2,609,853)
Non-operating revenues (expenses)
Interest and fiscal charges 24 - 24
Total non-operating revenues (expenses) 24 - 24
Income before transfers (2,747,069) 137,240 (2,609,829)
Change in net position (2,747,069) 137,240 (2,609,829)
Net position, beginning as previously stated 743,861 1,042,015 1,785,876
Prior period adjustment
652,662 142,384 795,046
Net position, beginning restated
1,396,523 1,184,399 2,580,922
Net position, ending $ (1,350,546) $ 1,321,639 $ (28,907)
See notes to basic financial statements.
CITY OF OPA-LOCKA, FLORIDA
STATEMENT OF CASH FLOWS ―PROPRIETARY FUNDS
FOR THE YEAR ENDED SEPTEMBER 30, 2019
- 25 -
Business-Type Activities- Enterprise Funds
Water and
Sewer
Other Nonmajor
Enterprise Funds Total
Cash flows from operating activities:
Cash received from customers $ 9,348,621 $ 1,132,107 $ 10,480.728
Cash paid to vendors (8,611,817) (619,661) (9,231,478)
Cash paid to employees (716,323) (84,047) (800,370)
Receipts from other government - 5,924 5,924
Net cash provided by operating activities 20,481 434,323 454,804
Cash flows from capital and related financing activities:
Acquisition and construction of capital assets (819,697) - (819,697)
Interest paid on long term debt (23,767) (2,764) (26,531)
Proceeds from debt 587,750 - 587,750
Principal paid on debt (906,440) - (906,440)
Net cash used in capital and related financing activities (1,162,154) (2,764) (1,164,918)
Cash flows from noncapital financing activities:
Grants received 81,651 - 81,651
Transfer from (to) other funds - 398,864 398,864
Net cash provided by noncapital financing activities 81,651 398,864 480,515
Cash flows from investing activities:
Interest income 24 - 24
Net cash provided by investing activities 24 - 24
Net increase (decrease) in cash (1,059,998) 830,423 (229,575)
Cash, beginning 2,650,471 1,301,834 3,952.305
Cash, ending 1,590,473 2,132,257 3,722,730
Display as:
Unrestricted 253,188 2,022,257 2,275,445
Restricted 1,337,285 110,000 1,447,285
Total $ 1,590,473 $ 2,132,257 $ 3,722,730
Reconciliation of operating income to cash provided
by operating activities:
Operating income (loss) $ (2,747,069) $ 137,240 $ (2,609,829)
Adjustment to reconciled operating income to net cash provided by (used in)
operating activities:
Depreciation expenses 691,411 - 691,411
Retired asset (39,201) (39,201)
Other, net (895,122) - (895,122)
(Increase) decrease in:
Accounts receivable 212,736 180,025 392,761
Due from other governments 272,983 5,924 278,907
Due from other funds (1,280,105) (163,687) (1,443,792)
Other current assets 57,672 - 57,672
Deferred outflow of resources 122,696 - 122,696
Increase (decrease) in:
Accounts payable and accrued liabilities (530,730) 43,148 (487,582)
Customer deposits 930,681 (727) 929,954
Compensated absences 3,992 (11,408) (7,416)
Other liabilities and pension 2,354,102 (16,921) 2,337,181
Due to other funds 543,084 260,729 803,813
Deferred inflow of resources 14,270 - 14,270
Due to other governments 309,081 - 309.081
Net cash provided by operating activities $ 20,481 $ 434,323 $ 454,804
See notes to basic financial statements.
NOTES TO FINANCIAL STATEMENTS
CITY OF OPA-LOCKA, FLORIDA
NOTES TO THE BASIC FINANCIAL STATEMENTS
FISCAL YEAR ENDED SEPTEMBER 30, 2019
- 26 -
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, and storm water enterprises.
The accounting policies of the City conform to accounting principles generally accepted in the
United States of America the Generally Accepted Accounting Principles (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 financial 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 separate 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 financially 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. A discretely presented component unit, on the other hand, is reported in a separate
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, 2019.
CITY OF OPA-LOCKA, FLORIDA
NOTES TO THE BASIC FINANCIAL STATEMENTS
FISCAL YEAR ENDED SEPTEMBER 30, 2019
- 27 -
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 is comprised 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 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 continued to operate in a limited-active phase based on limited tax increment funds
produced by ad valorem taxes. For the fiscal year ended September 2019, there was approximately
$555,288 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
non-major governmental funds. No separate financial statements are issued.
Effective for the 2019-2020 fiscal year, the Florida Legislature enacted Chapter 2019-163,
Laws of Florida, which amended Section 163.387(8), Florida Statues, to require that each
community redevelopment agency (CRA) meeting the specified $100,000 threshold provide
for a separate audit and that the resultant audit report accompany the municipality annual
financial report filed with the Department of Finance Services (see Section 163.387(8)(c) and
218.32(3)(b), Florida Statues). Based on this guidance, the CRA will be separate from the audit
of the City, but if a component unit, the CRA will be part of the reporting entity.
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, are included in the non-major governmental fund financial
statements. No separate financial statements are issued.
1) East-West Neighborhood Improvement District
2) Ali-Baba Neighborhood Improvement District
3) Niles Garden Neighborhood Improvement District
CITY OF OPA-LOCKA, FLORIDA
NOTES TO THE BASIC FINANCIAL STATEMENTS
FISCAL YEAR ENDED SEPTEMBER 30, 2019
- 28 -
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.
Inconsequential differences may occur due to rounding in calculating totals in the basic and
supplemental financial schedules.
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.
CITY OF OPA-LOCKA, FLORIDA
NOTES TO THE BASIC FINANCIAL STATEMENTS
FISCAL YEAR ENDED SEPTEMBER 30, 2019
- 29 -
NOTE 1. SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES (Continued)
C. Measurement Focus, Basis of Accounting, and Financial Statement Presentation (cont’d)
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.
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 accounted for in another fund.
The Capital Improvement Debt Service Fund is used to account for the sinking fund
requirements of the Series 2011 A&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.
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.
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.
CITY OF OPA-LOCKA, FLORIDA
NOTES TO THE BASIC FINANCIAL STATEMENTS
FISCAL YEAR ENDED SEPTEMBER 30, 2019
- 30 -
NOTE 1. SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES (Continued)
C. Measurement Focus, Basis of Accounting, and Financial Statement Presentation (cont’d)
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.
Immaterial differences may occur due to rounding.
D. 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.
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.
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. 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.
CITY OF OPA-LOCKA, FLORIDA
NOTES TO THE BASIC FINANCIAL STATEMENTS
FISCAL YEAR ENDED SEPTEMBER 30, 2019
- 31 -
NOTE 1. SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES (Continued)
D. Assets, Deferred Outflows, Liabilities, Deferred Inflows, and Net Position/Fund Balance
(cont’d)
5. 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 a sset 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
6. 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.
CITY OF OPA-LOCKA, FLORIDA
NOTES TO THE BASIC FINANCIAL STATEMENTS
FISCAL YEAR ENDED SEPTEMBER 30, 2019
- 32 -
NOTE 1. SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES (Continued)
D. Assets, Deferred Outflows, Liabilities, Deferred Inflows, and Net Position/Fund Balance
(cont’d)
6. 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.
7. 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.
8. 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.
9. 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.
CITY OF OPA-LOCKA, FLORIDA
NOTES TO THE BASIC FINANCIAL STATEMENTS
FISCAL YEAR ENDED SEPTEMBER 30, 2019
- 33 -
NOTE 1. SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES (Continued)
D. Assets, Deferred Outflows, Liabilities, Deferred Inflows, and Net Position/Fund Balance
(cont’d)
10. 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.
11. 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.
12. 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 financial 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.
CITY OF OPA-LOCKA, FLORIDA
NOTES TO THE BASIC FINANCIAL STATEMENTS
FISCAL YEAR ENDED SEPTEMBER 30, 2019
- 34 -
NOTE 1. SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES (Continued)
D. Assets, Deferred Outflows, Liabilities, Deferred Inflows, and Net Position/Fund Balance
(cont’d)
12. 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.
13. 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.
E. 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.;
2) The allowance for doubtful accounts; and
3) 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.
CITY OF OPA-LOCKA, FLORIDA
NOTES TO THE BASIC FINANCIAL STATEMENTS
FISCAL YEAR ENDED SEPTEMBER 30, 2019
- 35 -
NOTE 2. DEFICIT FUND EQUITY
The City reported fund balance deficits of ($28,907) in the proprietary fund and ($2 million) in the
general fund, these deficit balances will be addressed through a five-year recovery plan beginning
in fiscal year 2021. In accordance with Florida Statue, 218.503 (3)(h) that clarifies the
determination of financial emergency, the City developed and submitted a proposed Five-Year
Recovery Plan to the State of Florida Governor’s office for approval of the plan, and to resolve its
financial emergency condition. In August 2020, this Five-Year Recovery Plan was approved
without modification.
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 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 of July 1, 2018, by the Miami-Dade Property Appraiser was
$887 million. For the year ended September 30, 2019, the millage rate adopted by the City Commission
of $9.8 per $1,000 of assessed taxable value results in $8.4 million of property tax, of which
approximately $381,398 was contributed to the Opa-locka Community Redevelopment Agency as it
share of the property due to it, while Miami-Dade County contributed approximately $173,890.
No accrual for the property tax levy becoming due in November 2019 is included in the
accompanying financial statements since the legal right to receive these taxes occurs on November
1, 2019, and such taxes are collected to finance expenditures of the fiscal year ending
September 30, 2019.
NOTE 4. DEPOSITS AND INVESTMENTS
As of September 30, 2019, the City’s cash are considered to be cash on hand, and 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 deposit ory, 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.
CITY OF OPA-LOCKA, FLORIDA
NOTES TO THE BASIC FINANCIAL STATEMENTS
FISCAL YEAR ENDED SEPTEMBER 30, 2019
- 36 -
NOTE 4. DEPOSITS AND INVESTMENTS (Continued)
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, 2019, the City had no investments.
NOTE 5. ACCOUNTS RECEIVABLE
Receivable balances and the allowance for doubtful accounts as of September 30, 2019, were as
follows:
Accounts Taxes
Due from
Other Agencies Others
Allowance for
Uncollectible Net
Governmental activities:
General $ - $ - $ - $ 696,994 $ (254,238) $ 442,756
Capital projects and debt service 108,372 - - - - 108,372
Total governmental activities $ 108,372 $ - $ - $ 696,994 $ (254,238) $ 551,128
Business-type activities:
Water and sewer $ 9,263,061 $ - $ - $ - $ (6,127,522) $ 3,135,540
Stormwater 1,057,027 - - - (709,242) 347,785
Total business-type activities $ 10,320,089 $ - $ - $ - $ (6,836,764) $ 3,483,324
As of September 30, 2019, the allowance for doubtful accounts was $254,238 for governmental
activities, while the allowance for doubtful accounts was $6.8 million under the business-type
activities. An allowance for doubtful accounts is a contra account that nets against the total
receivables presented on the balance sheet to reflect only the amounts expected to be paid and
estimates accounts receivable that are expected to be uncollectible.
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.
CITY OF OPA-LOCKA, FLORIDA
NOTES TO THE BASIC FINANCIAL STATEMENTS
FISCAL YEAR ENDED SEPTEMBER 30, 2019
- 37 -
NOTE 6. INTERFUND BALANCES AND TRANSFERS (Continued)
Interfund balances as of September 30, 2019, consisted of the following:
Due from Other Funds Due to Other Funds
Major governmental fund:
General Fund $ 23,981,253 $ 23,558,122
Capital improvement debt service 4,648,694 3,443,311
Non-Major governmental funds 5,397,093 5,665,100
Major enterprise fund:
Water and sewer 5,255,050 5,989,781
Non-major enterprise funds 2,396,209 3,021,985
Total $ 41,678,299 $ 41,678,299
In fiscal year ended September 30, 2019, transfers between the capital improvement debt service
fund to the general fund totaled $978,660 for current year activity.
NOTE 7. CAPITAL ASSETS
The following is a summary of changes in capital assets for the year ended September 30, 2019:
Balance
09/30/18 Increases
Decreases
Balance
09/30/19
Governmental Activities:
Capital assets not being depreciated:
Land $ 2,980,457 $ - $ - $ 2,980,457
Construction in progress 2,114,944 - - 2,114,944
Total assets not being depreciated 5,095,402 - - 5,095,402
Capital assets being depreciated:
Buildings and improvements 19,498,959 - - 19,498,959
Vehicles, Furniture, and Equipment 4,820,656 218,612 (68,099) 4,971,158
Infrastructure 21,648,028 - - 21,648,028
Total assets being depreciated 45,967,643 218,612 (68,099) 46,118,146
Less accumulated depreciation:
Buildings and improvements (4,285,338) (379,305) - (4,664,643)
Vehicles, Furniture, and Equipment (4,829,264) (23,254) 97,979 (4,754,438)
Infrastructure (16,759,409) (416,373) - (17,175,783)
Total accumulated depreciation (25,874,011) (818,831) 97,979 (26,594,863)
Total capital assets being depreciated, net 20,093,632 (600,229) 29,880 19,523,283
Governmental activities capital assets, net $ 25,189,033 $ (600,229) $ 29,880 $ 24,618,685
CITY OF OPA-LOCKA, FLORIDA
NOTES TO THE BASIC FINANCIAL STATEMENTS
FISCAL YEAR ENDED SEPTEMBER 30, 2019
- 38 -
NOTE 7. CAPITAL ASSETS (Continued)
Balance
09/30/18 Increases
Decreases
Balance
09/30/19
Business-type Activities:
Capital assets not being depreciated:
Land $ 14,762 $ - $ - $ 14,762
Construction in progress 4,084,879 705,365 - 4,790,244
Total assets not being depreciated 4,099,641 705,365 - 4,805,006
Capital assets being depreciated:
Buildings and improvements - - - -
Vehicles, Furniture, and Equipment 6,993,920 1,708,372 (39,201) 8,663,091
Infrastructure 21,899,740 - - 21,899,740
Total assets being depreciated 28,893,660 1,708,372 (39,201) 30,562,831
Less accumulated depreciation:
Buildings and improvements - - - -
Vehicles, Furniture, and Equipment (6,660,515) (64,057) 39,201 (6,685,371)
Infrastructure (15,015,638) (627,354) - (15,642,992)
Total accumulated depreciation (21,676,153) (691,411) 39,201 (22,328,363)
Total capital assets being depreciated, net 7,217,507 1,016,961 - 8,234,468
Business-type activities capital assets, net $ 11,317,148 $ 1,722,326 $ - $ 13,039,474
Depreciation expense was charged to functions/programs of the City as follows:
Governmental activities:
General government $ 266,255
Public safety 120,333
Transportation 397,260
Parks and recreation 5,103
Total $ 788,951
Business-type activities:
Water and sewer $ 691,411
Storm water -
Total $ 691,411
NOTE 8. LEASES
Capital Leases
In prior years, the City entered into lease agreements as lessee for financing the acquisition of
various vehicles. These lease agreements qualified as capital leases for accounting purpose.
However, as of fiscal year end September 30, 2019, there were no capital lease obligations
extended beyond this period.
CITY OF OPA-LOCKA, FLORIDA
NOTES TO THE BASIC FINANCIAL STATEMENTS
FISCAL YEAR ENDED SEPTEMBER 30, 2019
- 39 -
NOTE 8. LEASES (Continued)
To better meet the information needs of financial statement users, the City is reviewing GASB
Statement No. 87, related to the improving accounting and financial reporting for leases by
government agencies by requiring the 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. The City will be
evaluating future leasing contracts to determine if they meet the criteria outlined in this
Statement for recognition. A total of $5,463 was paid for lease payments as of the year ended
September 30, 2019.
NOTE 9. LONG-TERM DEBT
Long-term liability activity for the year ended September 30, 2019, was as follows:
Balance
9/30/18 Additions Reductions Adjustments
Balance
9/30/19
Due in
One Year 2020
Governmental Activities
Capital Improvement Revenue Bond
Series 2011 A&B $ 4,761,000 $ - $ (527,000) $ - $ 4,234,000 $ 545,000
Citi National Bank - - - - - -
Series 2015 7,866,334 - (243,389) 49,127 7,672,072 252,140
Construction Loan - - - - - -
Capital Lease Obligation 5,463 - (5,463) - - -
Total 12,632,797 - (775,852) 49,127 11,906,072 797,140
Compensated Balances 1,750,962 28,249 - - 1,779,211 -
OPEB 296,724 34,446 - - 331,169 -
FRS Pension Liability 9,076,099 - (134,626) - 8,941,473 -
Miami-Dade County Debt 214,236 - (6,902) - 207,334 40,472
Long Term Liability Legal 1,296,683 - (1,043,808) - 252,875 -
Total 12,634,704 62,695 (1,185,336) - 11,512,063 40,472
Total Governmental Activities $ 25,267,501 $ 62,695 $ (1,961,188) $ 49,127 $ 23,418,135 $ 837,612
Business Type Activities
State Revolving Loan CS120 80003P $ 444,775 $ - $ (93,703) $ - $ 351,072 $ 96,564
State Revolving Loan WW800050 1,166,554 - (121,856) - 1,044,698 123,728
State Revolving Loan DW130330 75,167 - (3,344) - 71,823 10,561
State Revolving Loan SW130320 162,899 - (7,856) - 155,043 9,160
State Revolving Loan WW130300 457,306 - (23,931) - 433,375 23,839
State Revolving Loan WW130301 2,637,359 498,349 (333,090) - 2,802,618 333,090
State Revolving Loan DW130331 109,607 89,401 (157,017) - 41,991 41,991
Total State Revolving Loans 5,053,667 587,750 (740,796) - 4,900,621 638,934
Other Debt:
Capital Lease Obligation - - - - - -
SunTrust Capital Lease Obligation - - - - - -
Total Leases - - - - - -
Compensated Absences 107,644 - (7,416) - 100,228 -
OPEB 45,146 790 - - 45,936 -
Long-term debt - MDC 5,356,061 1,600,000 (165,644) - 6,790,417 1,013,185
Long Term Liability Legal 70,000 1,000,000 - - 1,070,000 -
FRS Pension Liability 1,237,650 - (18,358) - 1,219,292 -
Total Other Long -term Debt 6,816,501 2,600,790 (191,418) - 9,225,873 1,013,185
Total Business Type Activities $ 11,870,168 $ 3,188,540 $ (932,214) $ - $ 14,126,494 $ 1,652,119
CITY OF OPA-LOCKA, FLORIDA
NOTES TO THE BASIC FINANCIAL STATEMENTS
FISCAL YEAR ENDED SEPTEMBER 30, 2019
- 40 -
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 2011A&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 2018 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.
City National Bank has restricted the use of excess pledged funds after debt service payments
have been made as a result of the City’s financial emergency declaration (Note 20); as of
September 30, 2019, approximately $4.4 million is unavailable for City operations.
Subsequent to September 30, 2019, City National Bank’s restrictions on excess pledged
funds, through a modification of the agreement, adopted on April 8, 2020, allowed the City
to have access and redemption options for the available funds of approximately $5,226,975.
These funds were used to pay down a portion of the 2015A series bond, legal fees and the
remaining portion transferred to the general fund for operations after being released from
restriction.
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. CS12080003P 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) 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.
CITY OF OPA-LOCKA, FLORIDA
NOTES TO THE BASIC FINANCIAL STATEMENTS
FISCAL YEAR ENDED SEPTEMBER 30, 2019
- 41 -
NOTE 9. LONG-TERM DEBT (Continued)
Long-Term Debt - Business-Type Activities (cont’d)
(d) 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.
(e) State Revolving Loan Note Project No. DW130330 – 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.
(f) 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.
(g) 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.
(h) On 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 a nd
collection of water, sanitary sewage, and stormwater utility charges, and (3) acknowledging
delinquent charges. The City will 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, 2019, the total debt outstanding was $5,397,751. Debt service payments,
which include principal & interest, are made monthly in the amount of $100,090.95. For
fiscal year ended September 30, 2019, payments totaled 200,181.90.
(i) For the fiscal year ended September 30, 2019, the County exercised the option to have water
meters replaced and installed to bring customer properties into Compliance with the City’s
Code of Ordinances. As a result, there is an estimated $1,600,000 liability for water meters
purchased on behalf of the City. The meters have been properly capitalized, see Note 7.
(j) As of September 30, 2019, the City owed the State of Florida $2,781,157 for their portion of
the Mark Wandall Traffic Safety Program, Florida Statute 316.0083, regarding the ordinance
to use a traffic infraction detector to identify a motor vehicle that fails to stop at a traffic
control signal at a red light. Remittances in FY2019 were approximately $1,076,912.
CITY OF OPA-LOCKA, FLORIDA
NOTES TO THE BASIC FINANCIAL STATEMENTS
FISCAL YEAR ENDED SEPTEMBER 30, 2019
- 42 -
NOTE 9. LONG-TERM DEBT (Continued)
Long-Term Debt - Business-Type Activities (cont’d)
Annual debt service requirements to maturity for debt outstanding are as follows:
Governmental Activities Business - Type Activities
Fiscal Year Ending September 30, Principal Interest Principal Interest
2020 $ 836,897 $ 412,708 $ 1,652,119 $ 219,271
2021 825,221 384,676 1,817,423 180,019
2022 853,646 355,653 1,857,804 139,638
2023 883,429 325,601 1,801,042 93,125
2024-2029 8,496,820 568,188 4,422,483 219,993
Thereafter 217,393 - 140,167 89,667
$ 12,113,406 $ 2,046,826 $ 11,691,038 $ 941,713
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, 2019, 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, 2019, 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, 2019, 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, 2019.
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.
CITY OF OPA-LOCKA, FLORIDA
NOTES TO THE BASIC FINANCIAL STATEMENTS
FISCAL YEAR ENDED SEPTEMBER 30, 2019
- 43 -
NOTE 10. RETIREMENT PLANS
All of the City’s employees participate in the Florida Retirement System (FRS). As provided by
Chapters 121 and 112, Florida Statutes, the FRS provides two cost sharing, multiple employer
defined benefit plans administered by the Florida Department of Management Services, Division
of Retirement, including the 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.
The plan administrator for FRS prepares and publishes its own stand-alone comprehensive annual
financial 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%.
CITY OF OPA-LOCKA, FLORIDA
NOTES TO THE BASIC FINANCIAL STATEMENTS
FISCAL YEAR ENDED SEPTEMBER 30, 2019
- 44 -
NOTE 10. RETIREMENT PLANS (Continued)
A. Pension Plan - Florida Retirement System (FRS) (cont’d)
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.
Class, Initial Enrollment, and Retirement Age/Years of Service
% Value
(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.
CITY OF OPA-LOCKA, FLORIDA
NOTES TO THE BASIC FINANCIAL STATEMENTS
FISCAL YEAR ENDED SEPTEMBER 30, 2019
- 45 -
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 2017-2018 are as
follows:
Class
Employee
Contribution Rate
Employer
Contribution Rate*
Total
Contribution Rate
Regular 3.00% 6.54% 9.54%
Senior Management 3.00% 22.34% 25.34%
Special Risk 3.00% 22.78% 25.78%
DROP N/A 12.37% 12.37%
*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, 2019, contributions, including employee contributions, to
the Pension Plan for the City totaled $969,476.
Pension Liabilities, Pension Expense, and Deferred Outflows of Resources and Deferred Inflows
of Resources Related to Pensions. At September 30, 2019, the City reported a liability of
$7,949,247 for its proportionate share of the Pension Plan’s net pension liability. The net pension
liability was measured as of June 30, 2019, and the total pension liability used to calculate the net
pension liability was determined by an actuarial valuation as of July 1, 2019. The City’s
proportionate share of the net pension liability was based on its share of the City’s 2018-2019 fiscal
year contributions relative to the 2017-2018 fiscal year contributions of all participating members.
The FRS Actuarial Assumption Conference is responsible for setting the assumptions used in the
valuations of the defined benefit pension plans pursuant to Section 215.136(10) Florida Statutes.
The 6.90 percent return assumption used in the June 30, 2019 calculations were determined by
Plan’s consulting actuary to be reasonable and appropriate per Actuarial Standards of Practice. The
6.90 percent reported investment return assumption differs from the 7.20 percent investment return
assumption chosen by the 2019 FRS Actuarial Assumption Conference for funding policy
purposes, as allowable under governmental accounting and reporting standards.
CITY OF OPA-LOCKA, FLORIDA
NOTES TO THE BASIC FINANCIAL STATEMENTS
FISCAL YEAR ENDED SEPTEMBER 30, 2019
- 46 -
NOTE 10. RETIREMENT PLANS (Continued)
A. Pension Plan - Florida Retirement System (FRS) (cont’d)
For the fiscal year ended September 30, 2019, the City recognized pension expense of $1,761,126.
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 $ 471,493 $ (4,933)
Change of Assumptions 2,041,709 -
Net difference between projected and actual earnings on Pension Plan
investments - (439,794)
Changes in proportion and differences between Pension Plan contributions
and proportionate share of contributions 217,950 (1,375,710)
Pension Plan contributions subsequent to the measurement date 181,183 -
Total $ 2,912,335 $ (1,820,437)
The deferred outflows of resources related to the Pension Plan, totaling $181,183 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, 2019. 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
2020 $ 330,279
2021 99,635
2022 240,728
2023 181,596
2024 46,833
Thereafter 11,644
Total $ 910,715
Actuarial Assumptions – The total pension liability in the June 30, 2019, actuarial valuation was
determined using the following actuarial assumptions:
Inflation 2.60%
Salary Increases 3.25% average, including inflation
Investment Rate of Return 6.9%, net of pension plan investment expense, including inflation
Mortality rates were based on the Generational RP-2000 with Projection Scale BB tables.
CITY OF OPA-LOCKA, FLORIDA
NOTES TO THE BASIC FINANCIAL STATEMENTS
FISCAL YEAR ENDED SEPTEMBER 30, 2019
- 47 -
NOTE 10. RETIREMENT PLANS (Continued)
A. Pension Plan - Florida Retirement System (FRS) (cont’d)
The actuarial assumptions used in the July 1, 2019, valuation were based on the results of an
actuarial experience study for the period July 1, 2013, through June 30, 2018.
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:
Asset Class Target Allocation*
Annual
Arithmetic
Return
Compound Annual
(Geometric) Return
Standard
Deviation
Cash 1.00% 3.3% 3.3% 1.2%
Fixed Income 18.00% 4.1% 4.1% 3.5%
Global Equity 54.00% 8.0% 6.8% 16.5%
Real Estate (Property) 10.00% 6.7% 6.1% 11.7%
Private Equity 11.00% 11.2% 8.4% 25.8%
Strategic Investments 6.00% 5.9% 5.7% 6.7%
Total 100.00%
Assumed Inflation – Mean 2.6% 1.7%
*As outlined in the Pension Plan’s investment policy.
Discount Rate – The discount rate used to measure the total pension liability was 6.9%. 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 6.9%, 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 (5.9%) or
one percentage point higher (7.9%) than the current rate:
1%
Decrease
6.9%
Current
Discount Rate
5.9%
1%
Increase
7.9%
City's proportionate share of the net pension liability $13,741,601 $7,949,247 $3,111,651
CITY OF OPA-LOCKA, FLORIDA
NOTES TO THE BASIC FINANCIAL STATEMENTS
FISCAL YEAR ENDED SEPTEMBER 30, 2019
- 48 -
NOTE 10. RETIREMENT PLANS (Continued)
A. Pension Plan - Florida Retirement System (FRS) (cont’d)
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, 2019, 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, 2019.
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, 2019, 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, 2019, the HIS contribution
rate for the period October 1, 2016 through September 30, 2019, 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, 2019, contributions to the HIS Plan for the City totaled
$142,377.
Pension Liabilities, Pension Expense, and Deferred Outflows of Resources and Deferred Inflows
of Resources Related to Pensions - At September 30, 2019, the City reported a liability of
$2,211,518 for its proportionate share of the HIS Plan’s net pension liability. The net pension
liability was measured as of June 30, 2019, and the total pension liability used to calculate the net
pension liability was determined by an actuarial valuation as of July 1, 2019. The City’s
proportionate share of the net pension liability was based its share of the City’s 2018 -2019 fiscal
year contributions relative to the 2017-2018 fiscal year contributions of all participating members.
CITY OF OPA-LOCKA, FLORIDA
NOTES TO THE BASIC FINANCIAL STATEMENTS
FISCAL YEAR ENDED SEPTEMBER 30, 2019
- 49 -
NOTE 10. RETIREMENT PLANS (Continued)
B. Retiree Health Insurance Subsidy Program (HIS) (cont’d)
For the fiscal year ended September 30, 2019, the City recognized pension expense of
$131,135. In addition, the City reported deferred outflows of resources and deferred in flows
of resources related to pensions from the following sources:
Deferred Outflows
of Resources
Deferred Inflows
of Resources
Differences between expected and actual experience $ 26,861 $ (2,708
Change of Assumptions 256,073 (180,751)
Net difference between projected and actual earnings on Pension Plan
investments 1,427 -
Changes in proportion and differences between Pension Plan
contributions and proportionate share of contributions 240,537 (755,065)
Pension Plan contributions subsequent to the measurement date 25,857 -
Total $ 550,755 $ (938,524)
The deferred outflows of resources related to the HIS Plan, totaling $25,857 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, 2019. 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
2019 $ (176,271)
2020 (141,075)
2021 (77,224)
2022 56,077
2023 (10,186)
Thereafter (64,946)
Total $ (413,626)
Actuarial Assumptions – Actuarial valuations for the HIS plan are conducted biennially. The July
1, 2017 HIS valuation is the most recent actuarial valuation and was used to develop the liabilities
for June 30, 2019.
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.
CITY OF OPA-LOCKA, FLORIDA
NOTES TO THE BASIC FINANCIAL STATEMENTS
FISCAL YEAR ENDED SEPTEMBER 30, 2019
- 50 -
NOTE 10. RETIREMENT PLANS (Continued)
B. Retiree Health Insurance Subsidy Program (HIS) (cont’d)
The total pension liability as of June 30, 2019 was determined using the following actuarial
assumptions:
Inflation 2.60%
Salary Increases 3.25% average, including inflation
Investment Rate of Return 3.50%, 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, 2019 were based
on the results of an actuarial experience study for the period July 1, 2013 through June 30, 2018.
Discount Rate - The discount rate used to measure the total pension liability at June 30, 2019 was
3.50%. 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 2019 valuation was updated from 3.87% to 3.50% reflecting the change in the Bond Buyer
General Obligation 20-Bond municipal Bond Index as of June 30, 2019.
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 3.50%, 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 (2.50%) or
one percentage point higher (4.50%) than the current rate:
1%
Decrease
2.50%
Current
Discount Rate
3.50%
1%
Increase
4.50%
City's proportionate share of the net pension liability $2,524,561 $2,211,518 $1,950,788
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.
CITY OF OPA-LOCKA, FLORIDA
NOTES TO THE BASIC FINANCIAL STATEMENTS
FISCAL YEAR ENDED SEPTEMBER 30, 2019
- 51 -
NOTE 10. RETIREMENT PLANS (Continued)
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.
Allocations to the investment member's accounts during the 2018-19 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, 2019, 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.
CITY OF OPA-LOCKA, FLORIDA
NOTES TO THE BASIC FINANCIAL STATEMENTS
FISCAL YEAR ENDED SEPTEMBER 30, 2019
- 52 -
NOTE 10. RETIREMENT PLANS (Continued)
C. Investment Plan (cont’d)
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 Investme nt Plan and rely upon
that account balance for retirement income.
The Investment Plan pension expense for the City totaled $185,025 for the fiscal year ended
September 30, 2019.
At September 30, 2019, the City has no outstanding contributions to the Investment Plan required
for the fiscal year ended September 30, 2019.
NOTE 11. RELATIONSHIP WITH THE COUNTY
In November 6, 1956, the Florida Legislature adopted the Miami-Dade County Home Rule for a
general election to amend the Florida State Constitution designed to provide a centralized form of
government to the County of Miami-Dade (the “County”). The County is, in effect, a municipality
with governmental powers effective with 34 cities, towns and villages in the County, including the
City, and the unincorporated areas. The County does not displace or replace cities, but can
supplement them. The County can take over particular services 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 the inception of the City, the County has assumed responsibility for a number of functions,
including county-wide police services, complementing county-wide fire protection; consolidated
two-tier court systems; creation of the various surface transportation programs; installation of a
central traffic control computer system; merging public transportation systems into a county
system; and centralization of the property appraiser and tax collector functions.
In addition to county-wide services provided by Miami-Dade County in the City, the City has a
Memorandums of Understanding (MOU), with the County to provide waste collection services and
water utility billing services. The MOU dated February 17, 2017, for waste collection and waste
hauler services was agreed after the City’s vendor provided notification that they would no longer
provide those services.
CITY OF OPA-LOCKA, FLORIDA
NOTES TO THE BASIC FINANCIAL STATEMENTS
FISCAL YEAR ENDED SEPTEMBER 30, 2019
- 53 -
NOTE 11. RELATIONSHIP WITH THE COUNTY (Continued)
The MOU for transitioning water utility billing services, collection services and meter replacements
city-wide to Miami-Dade County Water & Sewer Department was agreed to on August 4, 2017.
Since the agreement, Miami-Dade County began the utility billing of the City’s customers along
with the installation, replacement, and repair of over 5,000 water meters which currently represents
an estimated cost ranging from approximately $1.5 million to $2.2 million to the County per the
agreement, however as of September 30, 2019, approximately $1.6 million is recognized as
capitalized meter replacements with the corresponding liability associated with the cost of the
meters. A majority of the utility customer accounts have successfully transitioned to Miami-Dade
County with the customers receiving their bills direction by Miami-Dade County Water & Sewer,
and now having the ability to visit the newly opened Miami-Dade County Customer Services
Center located in the City Hall at 780 Fisherman Street in Opa-locka.
NOTE 12. COMMITMENTS 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, 2019 and 2018,
the City purchased water and sewer services totaling $3,832,428 and $3,857,673 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
being handled by the City Attorney’s office, in addition to third party Attorneys. A number of cases
remain outstanding. In some cases, the City anticipates that its insurance carrier will cover the damages.
Please consult with the City Attorney and Risk Manager for further information regarding such claims
and lawsuits which arose in the normal course of operations, and are pending against the City. In the
opinion of management and based on the advice of the City’s Attorney, the outcome of some of these
actions is not yet known. However, provision for liability has been accrued on the financial position and
results of operations of the City for those cases where the outcome is known.
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 requested 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.
CITY OF OPA-LOCKA, FLORIDA
NOTES TO THE BASIC FINANCIAL STATEMENTS
FISCAL YEAR ENDED SEPTEMBER 30, 2019
- 54 -
NOTE 12. COMMITMENTS AND CONTINGENCIES (Continued)
Grant Contingency
The City receives financial assistance from federal, state and local governmental agencies in the form
of grants. The disbursement of funds received under these programs generally requires compliance
with terms and conditions specified in the grant agreement and may be subject to audit by the grantor
agencies. In accordance with Title 2 U.S. Code of Federal Regulations, Part 200, Uniformed
Administrative Requirements, Cost Principals, and Audit Requirement for Federal Awards (Uniform
Guidance) and the Florida Single Audit Act, the City is required to conduct “single audits” when the
required thresholds of $750,000 in grant expenditures from either source is exceeded. For the year
ended September 30, 2019, a Federal single audit in accordance with the Uniform Guidance was
required, however a state single audit in accordance with the Florida Single Audit Act was not.
NOTE 13. OTHER POST-EMPLOYMENT BENEFITS
Effective October 1, 2017, the City implemented GASB Statement No. 75, Accounting and
Reporting for Post-Employment Benefits Other Than Pensions, for certain post-employment
healthcare benefits provided by the City. The implementation of this statement resulted in a
restatement of the City’s government-wide statements as discussed in Note 13.
Plan Description
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 the coverage is available for active employees. The City
does not provide retirees with any subsidy for this benefit.
On September 17, 2008, the City established the OPEB Trust, a single employer defined benefit health
care plan to all of its employees except part-time employees and full-time employees who either
resign or are terminated. They 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.
Benefits Provided
The OPEB Plan provides healthcare insurance benefits for retirees and their dependents.
Funding Policy
The City’s funding policy is to pay post-retirement medical benefits from general funds. A trust
has not been established to pre-fund these benefits.
CITY OF OPA-LOCKA, FLORIDA
NOTES TO THE BASIC FINANCIAL STATEMENTS
FISCAL YEAR ENDED SEPTEMBER 30, 2019
- 55 -
NOTE 13. OTHER POST-EMPLOYMENT BENEFITS (Continued)
Plan Membership
At October 1, 2017, the date of the latest actuarial valuation, plan participation consisted of the
following:
Active plan members 119
Inactive plan members -
119
Total OPEB Liability
The City’s total OPEB liability of $377,107* was measured as of September 30, 2019, and was
determined by an actuarial valuation as of October 1, 2017.
* This amount has been rolled forward from October 1, 2017.
Actuarial Assumptions and Other Inputs
Valuation Date: October 1, 2017
Measurement Date: September 30, 2019
Roll-forward Disclosure The Total OPEB Liability was rolled forward from the valuation
date to the measurement date using standard actuarial techniques.
Methods and Assumptions Used to Determine Total OPEB Liability:
Actuarial Cost Method Entry Age Normal
Inflation 2.2%
Discount Rate 3.58%
Salary Increases 3% per annum
Retirement Age Retirement rate assumptions are based on the Florida Retirement
System, retirement rates based on those used in the July 1, 2016
actuarial valuation of Florida Retirement System.
Mortality
Sex-distinct rates set forth in the PUB-2010 Mortality Table (without
income adjustments) for general and public safety employees, with
full generational improvements in mortality using Scale MP-2017
Retirees Share of Benefit
Related Costs
Premium contributions are required from retirees.
The Plan is unfunded; as such no projection of Fiduciary Net Position is required.
Demographic assumptions mirror those used for the Florida Retirement System pension plans.
The discount rate used to determine the liabilities under GASB 75 is based on the return on the
S&P Municipal Bond 20-year High Grade Index as of the measurement date. The discount rate is
3.58% per annum.
CITY OF OPA-LOCKA, FLORIDA
NOTES TO THE BASIC FINANCIAL STATEMENTS
FISCAL YEAR ENDED SEPTEMBER 30, 2019
- 56 -
NOTE 13. OTHER POST-EMPLOYMENT BENEFITS (Continued)
Actuarial Assumptions and Other Inputs (cont’d)
Changes in the OPEB liability for the fiscal year ended September 30, 2019, were as follow:
Balance at September 30, 2018 -as restated $ 341,870
Changes for the year
Service cost 28,827
Expected interest growth 13,113
Changes in assumptions -
Differences between expected and actual experience 2,184
Total change in OPEB liability for 9/30/19 385,994
Estimated employer contributions/ benefits payments (8,887)
Total OPEB Liability - September 30, 2019 $ 377,107
Sensitivity of the total OPEB liability to changes in the discount rate:
Regarding the sensitivity of the total OPEB liability to changes in the discount rate, the following
presents the plan’s total OPEB liability, calculated using a discount rate of 3.58%, as well as what
the plan’s total OPEB liability would be if it were calculated using a discount rate that is one percent
lower or one percent higher:
Discount Rate
1% Decrease
2.58%
Discount Rate
3.58%
1% Increase
4.58%
Total OPEB Liability $ 417,763 $ 377,107 $ 341,432
Net OPEB Liability $ 417,763 $ 377,107 $ 341,432
Sensitivity of the total OPEB liability to the healthcare cost trend rate:
The following table illustrates the impact of healthcare cost trend sensitivity on the Net OPEB
Liability for fiscal year ending September 30, 2019.
Ultimate Trend
1% Decrease
4.00%
Medical Trend
7.00% graded
down to 5.00%
1% Increase
6.00%
Total OPEB Liability $ 326,443 $ 377,107 $ 438,148
Net OPEB Liability $ 326,443 $ 377,107 $ 438,148
CITY OF OPA-LOCKA, FLORIDA
NOTES TO THE BASIC FINANCIAL STATEMENTS
FISCAL YEAR ENDED SEPTEMBER 30, 2019
- 57 -
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 Life Insurance Company of Southwest. 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, 2019.
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. COMPENSATED ABSENCES
It is the City’s policy to permit employees to accumulate within certain limits, earned but unused
personal-time-off, which will be paid to employees upon separation from City service. All personal
time-off is accrued when incurred in the government-wide financial statements. In the
governmental funds, a liability is recorded only for paid time off payouts for employee separations
that occurred within 60 days after the fiscal year ended September 30, 2019. The General Fund and
Enterprise Fund have been used in prior years to liquidate the liability for compensated absences.
CITY OF OPA-LOCKA, FLORIDA
NOTES TO THE BASIC FINANCIAL STATEMENTS
FISCAL YEAR ENDED SEPTEMBER 30, 2019
- 58 -
NOTE 18. RESTATEMENT - PRIOR PERIOD ADJUSTMENTS
The September 30, 2018, beginning net asset position of the Government Activities and Business-
Type Activities were restated as a result of the prior period correction of errors. The City’s net
position increased by $797,348 over the prior fiscal year ended September 30, 2018. This is
because the prior period adjustments had a greater amount of credits to the net position than the
debit charges that were made to record the corrections.
Restatement of net position at September 30, 2018, due to prior period corrections of an error.
Restatement of Net Position
Governmental
Activities
Business-Type
Activities Total
Net position September 30, 2018, previously stated and reported $ 6,358,459 $ 1,785,876 $ 8,144,335
Prior period adjustment:
Net effect of Correction of errors, effect of adjustment to revenue,
expenditure and other 2,302 795,046 797,348
Net Position, September 30, 2018 $ 6,360,761 $ 2,580,922 $ 8,941,683
Government Activities – The City’s net position of Government Activities as of September 30,
2018, has been restated for prior period adjustments. The net position increased by $2,302 resulting
from net adjustments associated with the correction of errors relate to prior periods.
• Prior period corrections in the general fund in the amount of $2 million, were related to a
combination of transfers of capital improvement debt service funds released from restrictions
from prior years to be transferred to the general funds of more than $1.8 million as an increase,
and adjustments to the due to/due from other funds associated with these transactions. In
addition to other miscellaneous transactions associated with the City’s portion of funds due to
the State of Florida in accordance with Florida Statute 316.0083, regarding the ordinance to
use a traffic infraction detector to identify a motor vehicle that fails to stop at a traffic control
signal for a red light.
• The City corrected errors in reporting of the capital improvement debt service fund related to
prior years in order to transfer $1.8 million in unrestricted amounts not transferred for fiscal
years 2011 to 2018 released from restriction.
• As a result of the City becoming compliant with past due compliance audits related to its share
of transportation and transit surtax funding for the fiscal year ended September 30, 2018, there
were adjustments totaling ($227,441).
Governmental Activities
General fund $ 2,043,855
Capital improvement debt service (1,814,112)
People's transportation tax (227,441)
Total $ 2,302
CITY OF OPA-LOCKA, FLORIDA
NOTES TO THE BASIC FINANCIAL STATEMENTS
FISCAL YEAR ENDED SEPTEMBER 30, 2019
- 59 -
NOTE 18. RESTATEMENT - PRIOR PERIOD ADJUSTMENTS (cont’d)
Business-Type Activities – The City’s net position of Business-Type Activities as of September
30, 2018, has been restated for prior period adjustments. The net position increased by $795,046
resulting from net adjustments to due to/from other funds, cash, revenue, expenditures, and other
errors related to prior year.
• The prior period adjustments related to the water and sewer fund totaled $652,662, this was
related to adjustments in the ‘Unapplied Credits” account related to prior periods beginning in
2009 through 2016, totaling $741,881. In addition to other adjustments related to prior year
sewer true up credits for wholesale customers for wastewater services for the City’s water and
sewer operations, to correct errors related to charges associated with collection in accordance
with Section 24-34 of the Code of Miami-Dade County for the Department of Environmental
Resource Management (DERM) recorded as a liability for prior year billings, and for other
miscellaneous adjustments to correct prior period errors.
• For the storm water, adjustments are related to liabilities associated with contractor retainage
and other contracted services, totaling $142,384.
Business-type Activities
Water and sewer $ 652,662
Stormwater 142,384
Total $ 795,046
NOTE 19. NEW ACCOUNTING PRONOUNCEMENTS ISSUED
Accounting Pronouncements -- Adopted and Unadopted
GASB Statement No. 87, Leases. The objective of this Statement is to increase the usefulness of
governments’ financial statements and establish 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 effective data was for reporting periods beginning after December 15, 2019, for
fiscal years beginning after June 15, 2021, and all reporting periods thereafter.
GASB Statement No. 88, Majority Equity Interests – an amendment of GASB Statements No.
14 and No. 1. The objective of this Statement is to improve the consistency and comparability of
reporting a government’s majority equity interest in a legally separate organization and to improve
the relevance of financial statement information for certain component units. The requirements for
this Statement are effective for reporting periods beginning after December 31, 2019.
GASB Statement No. 89, Accounting for Interest Cost Incurred before the End of a
Construction Period. The objectives of this Statement are (1) to enhance the relevance and
comparability of information about capital assets and the cost of borrowing for a reporting period
and (2) to simplify accounting for interest cost incurred before the end of a construction period.
CITY OF OPA-LOCKA, FLORIDA
NOTES TO THE BASIC FINANCIAL STATEMENTS
FISCAL YEAR ENDED SEPTEMBER 30, 2019
- 60 -
NOTE 19. NEW ACCOUNTING PRONOUNCEMENTS ISSUED (Continued)
Accounting Pronouncements -- Adopted and Unadopted (cont’d)
GASB Statement No. 89, Accounting for Interest Cost Incurred before the End of a
Construction Period. (cont’d)
This Statement establishes accounting requirements for interest cost incurred before the end of a
construction period. Such interest cost includes all interest that previously was accounted for in accordance
with the requirements of paragraphs 5−22 of Statement No. 62, Codification of Accounting and Financial
Reporting Guidance Contained in Pre-November 30, 1989, FASB and AICPA Pronouncements, which
are superseded by this Statement. This Statement requires that interest cost incurred before the end of a
construction period be recognized as an expense in the period in which the cost is incurred for financial
statements prepared using the economic resources measurement focus. As a result, interest cost incurred
before the end of a construction period will not be included in the historical cost of a capital asset reported
in a business-type activity or enterprise fund.
This Statement also reiterates that in financial statements prepared using the current financial
resources measurement focus, interest cost incurred before the end of a construction period should
be recognized as an expenditure on a basis consistent with governmental fund accounting
principles. The provisions of this Statement are effective for reporting periods beginning after
December 15, 2019. Earlier application is encouraged. The requirements of this Statement should
be applied prospectively. However, based on GASB Statement No. 95, Postponement of the
Effective Dates of Certain Authoritative Guidance, the requirements of this statements were
postponed to after December 15, 2020.
GASB Statement No. 90, Majority Equity Interest, an amendment of GASB Statements No. 14
and No. 61. The primary objectives of this Statement are to improve the consistency and
comparability of reporting a government’s majority equity interest in a legally separate
organization and to improve the relevance of financial statement information for certain component
units. It defines a majority equity interest and specifies that a majority equity interest in a legally
separate organization should be reported as an investment if a government’s holding of the equity
interest meets the definition of an investment. A majority equity interest that meets the definition
of an investment should be measured using the equity method, unless it is held by a special-purpose
government engaged only in fiduciary activities, a fiduciary fund, or an endowment (including
permanent and term endowments) or permanent fund. Those governments and funds should
measure the majority equity interest at fair value.
For all other holdings of a majority equity interest in a legally separate organization, a government
should report the legally separate organization as a component unit, and the government or fund
that holds the equity interest should report an asset related to the majority equity interest using the
equity method. This Statement establishes that ownership of a majority equity interest in a legally
separate organization results in the government being financially accountable for the legally
separate organization and, therefore, the government should report that organization as a
component unit.
CITY OF OPA-LOCKA, FLORIDA
NOTES TO THE BASIC FINANCIAL STATEMENTS
FISCAL YEAR ENDED SEPTEMBER 30, 2019
- 61 -
NOTE 19. NEW ACCOUNTING PRONOUNCEMENTS ISSUED (Continued)
Accounting Pronouncements -- Adopted and Unadopted (cont’d)
GASB Statement No. 90, Majority Equity Interest, an amendment of GASB Statements No. 14
and No. 61. (cont’d)
This Statement also requires that a component unit in which a government has a 100 percent equity
interest account for its assets, deferred outflows of resources, liabilities, and deferred inflows of
resources at acquisition value at the date the government acquired a 100 percent equity interest in
the component unit. Transactions presented in flows statements of the component unit in that
circumstance should include only transactions that occurred subsequent to the acquisition.
The provisions of this Statement are effective for reporting periods beginning afte r December 15,
2018. Earlier application is encouraged. The requirements should be applied retroactively, except
for the provisions related to (1) reporting a majority equity interest in a component unit and (2)
reporting a component unit if the government acquires a 100 percent equity interest. However,
based on GASB Statement No. 95, Postponement of the Effective Dates of Certain Authoritative
Guidance, the requirements of this statements were postponed to December 15, 2019.
Those provisions should be applied on a prospective basis.
GASB Statement No. 91, Conduit Debt Obligations. The primary objectives of this Statement are
to provide a single method of reporting conduit debt obligations by issuers and eliminate diversity
in practice associated with (1) commitments extended by issuers, (2) arrangements associated with
conduit debt obligations, and (3) related note disclosures. This Statement achieves those objectives
by clarifying the existing definition of a conduit debt obligation; establishing that a conduit debt
obligation is not a liability of the issuer; establishing standards for accounting and financial
reporting of additional commitments and voluntary commitments extended by issuers and
arrangements associated with conduit debt obligations; and improving required note disclosures. A
conduit debt obligation is defined as a debt instrument having all of the following characteristics:
▪ There are at least three parties involved: (1) an issuer, (2) a third -party obligor, and (3) a debt
holder or a debt trustee.
▪ The issuer and the third-party obligor are not within the same financial reporting entity.
▪ The debt obligation is not a parity bond of the issuer, nor is it cross -collateralized with other
debt of the issuer.
▪ The third-party obligor or its agent, not the issuer, ultimately receives the proceeds from the
debt issuance.
▪ The third-party obligor, not the issuer, is primarily obligated for the payment of all amounts
associated with the debt obligation (debt service payments).
CITY OF OPA-LOCKA, FLORIDA
NOTES TO THE BASIC FINANCIAL STATEMENTS
FISCAL YEAR ENDED SEPTEMBER 30, 2019
- 62 -
NOTE 19. NEW ACCOUNTING PRONOUNCEMENTS ISSUED (Continued)
Accounting Pronouncements -- Adopted and Unadopted (cont’d)
GASB Statement No. 91, Conduit Debt Obligations. (cont’d)
All conduit debt obligations involve the issuer making a limited commitment. Some issuers extend
additional commitments or voluntary commitments to support debt service in the event the third
party is, or will be, unable to do so. An issuer should not recognize a conduit debt obligation as a
liability. However, an issuer should recognize a liability associated with an additional commitment
or a voluntary commitment to support debt service if certain recognition criteria are
met. As long as a conduit debt obligation is outstanding, an issuer that has made an additional
commitment should evaluate at least annually whether those criteria are met. An issuer that has
made only a limited commitment should evaluate whether those criteria are met when an event
occurs that causes the issuer to reevaluate its willingness or ability to support the obligor’s debt
service through a voluntary commitment.
This Statement also addresses arrangements—often characterized as leases—that are associated
with conduit debt obligations. In those arrangements, capital assets are constructed or acquired with
the proceeds of a conduit debt obligation and used by third-party obligors in the course of their
activities. Payments from third-party obligors are intended to cover and coincide with debt service
payments. During those arrangements, issuers retain the titles to the capital assets. Those titles may
or may not pass to the obligors at the end of the arrangements.
Issuers should not report those arrangements as leases, nor should they recognize a liability for the
related conduit debt obligations or a receivable for the payments related to those arrangements. In
addition, the following provisions apply:
▪ If the title passes to the third-party obligor at the end of the arrangement, an issuer should not
recognize a capital asset. If the title does not pass to the third-party obligor and the third party
has exclusive use of the entire capital asset during the arrangement, the issuer should not
recognize a capital asset until the arrangement ends.
▪ If the title does not pass to the third-party obligor and the third party has exclusive use of only
portions of the capital asset during the arrangement, the issuer, at the inception of the
arrangement, should recognize the entire capital asset and a deferred inflow of resources. The
deferred inflow of resources should be reduced, and an inflow recognized, in a systematic and
rational manner over the term of the arrangement.
This Statement requires issuers to disclose general information about their conduit debt obligations,
organized by type of commitment, including the aggregate outstanding principal amount of the
issuers’ conduit debt obligations and a description of each type of commitment. Issuers that
recognize liabilities related to supporting the debt service of conduit debt obligations also should
disclose information about the amount recognized and how the liabilities changed during the
reporting period. The requirements of this Statement are effective for reporting periods beginning
after December 15, 2020. Earlier application is encouraged. However, based on GASB Statement
No. 95, Postponement of the Effective Dates of Certain Authoritative Guidance, the requirements
of this statements were postponed to after December 15, 2021.
CITY OF OPA-LOCKA, FLORIDA
NOTES TO THE BASIC FINANCIAL STATEMENTS
FISCAL YEAR ENDED SEPTEMBER 30, 2019
- 63 -
NOTE 19. NEW ACCOUNTING PRONOUNCEMENTS ISSUED (Continued)
Accounting Pronouncements -- Adopted and Unadopted (cont’d)
GASB Statement No. 92, Omnibus 2020. The objectives of this Statement are to enhance
comparability in accounting and financial reporting and to improve the consistency of authoritative
literature by addressing practice issues that have been identified during implementation and
application of certain GASB Statements. This Statement addresses a variety of topics and includes
specific provisions about the following:
▪ The effective date of Statement No. 87, Leases, and Implementation Guide No. 2019-3, Leases,
for interim financial reports
▪ Reporting of intra-entity transfers of assets between a primary government employer and a
component unit defined benefit pension plan or defined benefit other postemployment benefit
(OPEB) plan
▪ The applicability of Statements 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 Statements 67 and 68, as amended, and No. 74, Financial
Reporting for Postemployment Benefit Plans Other Than Pension Plans, as amended, to
reporting assets accumulated for postemployment benefits
▪ The applicability of certain requirements of Statement No. 84, Fiduciary Activities, to
postemployment benefit arrangements
▪ Measurement of liabilities (and assets, if any) related to asset retirement obligations (AROs) in
a government acquisition
▪ Reporting by public entity risk pools for amounts that are recoverable from reinsurers or excess
insurers
▪ Reference to nonrecurring fair value measurements of assets or liabilities in authoritative
literature
▪ Terminology used to refer to derivative instruments
The requirements of this Statement are effective as follows:
▪ The requirements related to the effective date of Statement 87 and Implementation Guide 2019-
3, reinsurance recoveries, and terminology used to refer to derivative instruments are effective
upon issuance.
▪ The requirements related to intra-entity transfers of assets and those related to the applicability of
Statements 73 and 74 are effective for fiscal years beginning after June 15, 2020.
▪ The requirements related to application of Statement 84 to postemployment benefit
arrangements and those related to nonrecurring fair value measurements of assets or liabilities
are effective for reporting periods beginning after June 15, 2020.
CITY OF OPA-LOCKA, FLORIDA
NOTES TO THE BASIC FINANCIAL STATEMENTS
FISCAL YEAR ENDED SEPTEMBER 30, 2019
- 64 -
NOTE 19. NEW ACCOUNTING PRONOUNCEMENTS ISSUED (Continued)
Accounting Pronouncements -- Adopted and Unadopted (cont’d)
GASB Statement No. 92, Omnibus 2020. (cont’d)
▪ The requirements related to the measurement of liabilities (and assets, if any) associated with
AROs in a government acquisition are effective for government acquisitions occurring in
reporting periods beginning after June 15, 2020. Earlier application is encouraged and is
permitted by topic.
• However, based on GASB Statement No. 95, Postponement of the Effective Dates of Certain
Authoritative Guidance, the requirements of this statement were mostly postponed to fiscal
years beginning after June 15, 2021.
GASB Statement No. 93, Replacement of Interbank Offered Rate. The objective of this
Statement is to address the accounting and financial reporting effects that result from the
replacement of IBORs (Interbank Offered Rate) with other reference rates in order to preserve the
reliability, relevance, consistency, and comparability of reported information.
The standard, designed to address the accounting implications of the replacement of an IBOR,
establishes that agreements that maintain an existing hedging arrangement continue to be accounted
for in the same manner as before the replacement of a reference rate. Indeed, as a result of global
reference rate reform, LIBOR is expected to cease to exist in its current form after December 31,
2021. Governments will need to amend or replace financial instruments that are tied to LIBOR. It
should be noted that Statement No. 53, Accounting and Financial Reporting for Derivative
Instruments, previously required a government to terminate hedge accounting when it changes the
reference rate of a hedging derivative’s variable payment. Statement No. 87, Leases, previously
required a government that replaced the rate on which variable payments depend in a lease contract
to apply the provisions for lease modifications.
The requirements of this Statement, except for paragraphs 11b, 13, and 14 are effective for reporting
periods beginning after June 15, 2020. The requirement in paragraph 11b is effective for reporting
periods ending after December 31, 2021. The requirements in paragraphs 13 and 14 are effective
for fiscal years periods beginning after June 15, 2021, and all reporting periods thereafter. Earlier
application is encouraged.
GASB Statement No. 94, Public-Private and Public-Public Partnerships and Availability
Payment Arrangements. The objective of this Statement is to improve financial reporting by
addressing issues related to public-private and public-public partnership arrangements (PPPs).
CITY OF OPA-LOCKA, FLORIDA
NOTES TO THE BASIC FINANCIAL STATEMENTS
FISCAL YEAR ENDED SEPTEMBER 30, 2019
- 65 -
NOTE 19. NEW ACCOUNTING PRONOUNCEMENTS ISSUED (Continued)
Accounting Pronouncements -- Adopted and Unadopted (cont’d)
GASB Statement No. 94, Public-Private and Public-Public Partnerships and Availability
Payment Arrangements. (cont’d)
This Statement provides guidance for accounting and financial reporting for availability payment
arrangements (APAs). The statement provides uniform guidance on accounting and financial
reporting for transactions that meet the definitions of PPP and APAs. That uniform guidance will
provide more relevant and reliable information for financial statement users and create greater
consistency in practice. This Statement will enhance the decision usefulness of a government’s
financial statements by requiring governments to report assets and liabilities related to PPPs
consistently and disclose important information about PPP transactions. The required disclosures
will allow users to understand the scale and important aspects of a government’s PPPs and evaluate
a government’s future obligations and assets resulting from PPPs.
This Statement requires that PPPs that meet the definition of a lease apply the guidance in Statement
No. 87, Leases, as amended, if existing assets of the transferor that are not required to be improved
by the operator as part of the PPP arrangement are the only underlying PPP assets and the PPP does
not meet the definition of an SCA (Service Concessions Arrangements).
This Statement provides accounting and financial reporting requirements for all other PPPs: those
that either (1) meet the definition of an SCA or (2) are not within the scope of Statement 87, as
amended (as clarified by this Statement).
This Statement also provides specific guidance in financial statements prepared using the economic
resources measurement focus for a government that is an operator in a PPP that either (1) meets the
definition of an SCA or (2) is not within the scope of Statement 87, as amended (as clarified in this
Statement).
This Statement also requires a government to account for PPP and non-PPP components of a PPP
as separate contracts. If a PPP involves multiple underlying assets, a transferor and an operator in
certain cases should account for each underlying PPP asset as a separate PPP.
This Statement also requires an amendment to a PPP to be considered a PPP modification, unless
the operator’s right to use the underlying PPP asset decreases, in which case it should be considered
a partial or full PPP termination.
The requirements of this Statement are effective for fiscal years beginning after June 15, 2022, and
all reporting periods thereafter. Earlier application is encouraged.
CITY OF OPA-LOCKA, FLORIDA
NOTES TO THE BASIC FINANCIAL STATEMENTS
FISCAL YEAR ENDED SEPTEMBER 30, 2019
- 66 -
NOTE 19. NEW ACCOUNTING PRONOUNCEMENTS ISSUED (Continued)
Accounting Pronouncements -- Adopted and Unadopted (cont’d)
GASB Statement No. 95, Postponement of the Effective Dates of Certain Authoritative
Guidance. The primary objective of this Statement is to provide temporary relief to governments
and other stakeholders in light of the COVID-19 pandemic. Consequently, the statement will
improve Financial Reporting providing governments with sufficient time to apply the authoritative
guidance addressed in this Statement. Also, it will help to safeguard the reliability of the financial
statements, which in turn will benefit the users of those financial statements.
That objective is accomplished by postponing the effective dates of certain provisions in Statements
and Implementation Guides that first became effective or are scheduled to become effective for
periods beginning after June 15, 2018, and later. The effective dates of certain provisions contained
in the following pronouncements are postponed by one year. The requirements of this Statement
are effective immediately.
GASB Statement No. 96, Subscription-Based Information Technology Arrangements. The
objective of this Statement is to better meet the information needs of financial statement users by
(a) establishing uniform accounting and financial reporting requirements for SBITAs; (b)
improving the comparability of financial statements among governments that have entered into
SBITAs; and (c) enhancing the understandability, reliability, relevance, and consistency of
information about SBITAs.
This Statement (1) defines a SBITA; (2) establishes that a SBITA results in a right-to-use
subscription asset—an intangible asset—and a corresponding subscription liability; (3) provides
the capitalization criteria for outlays other than subscription payments, including implementation
costs of a SBITA; and (4) requires note disclosures regarding a SBITA. To the extent relevant, the
standards for SBITAs are based on the standards established in Statement No. 87, Leases, as
amended. The requirements of this Statement are effective for fiscal years beginning after June 15,
2022, and all reporting periods thereafter. Earlier application is encouraged.
GASB Statement No. 97, Certain Component Unit Criteria, and Accounting and Financial
Reporting for Internal Revenue Code Section 457 Deferred Compensation Plans. The primary
objectives of this Statement are to (1) increase consistency and comparability related to the
reporting of fiduciary component units in circumstances in which a potential component unit does
not have a governing board and the primary government performs the duties that a governing board
typically would perform; (2) mitigate costs associated with the reporting of certain defined
contribution pension plans, defined contribution other postemployment benefit (OPEB) plans, and
employee benefit plans other than pension plans or OPEB plans (other employee benefit plans) as
fiduciary component units in fiduciary fund financial statements; and (3) enhance the relevance,
consistency, and comparability of the accounting and financial reporting for Internal Revenue Code
(IRC) Section 457 deferred compensation plans (Section 457 plans) that meet the definition of a
pension plan and for benefits provided through those plans.
CITY OF OPA-LOCKA, FLORIDA
NOTES TO THE BASIC FINANCIAL STATEMENTS
FISCAL YEAR ENDED SEPTEMBER 30, 2019
- 67 -
NOTE 19. NEW ACCOUNTING PRONOUNCEMENTS ISSUED (Continued)
Accounting Pronouncements -- Adopted and Unadopted (cont’d)
GASB Statement No. 97, Certain Component Unit Criteria, and Accounting and Financial
Reporting for Internal Revenue Code Section 457 Deferred Compensation Plans. (cont’d)
This Statement requires that for purposes of determining whether a primary government is
financially accountable for a potential component unit, except for a potential component unit that
is a defined contribution pension plan, a defined contribution OPEB plan, or another employee
benefit plan (for example, certain Section 457 plans), the absence of a governing board should be
treated the same as the appointment of a voting majority of a governing board if the primary
government performs the duties that a governing board typically would perform.
This Statement also requires that the financial burden criterion in paragraph 7 of Statement No. 84,
Fiduciary Activities, be applicable to only defined benefit pension plans and defined benefit OPEB
plans that are administered through trusts that meet the criteria in paragraph 3 of Statem ent No. 67,
Financial Reporting for Pension Plans, or paragraph 3 of Statement No. 74, Financial Reporting for
Postemployment Benefit Plans Other Than Pension Plans, respectively.
This Statement (1) requires that a Section 457 plan be classified as either a pension plan or another
employee benefit plan depending on whether the plan meets the definition of a pension plan and (2)
clarifies that Statement 84, as amended, should be applied to all arrangements organized under IRC
Section 457 to determine whether those arrangements should be reported as fiduciary activities.
The requirements of the Statement that are related to the accounting and financial reporting for
Section 457 plans are effective for fiscal years beginning after June 15, 2021; whereas the
requirements of the other parts of the statement are effective immediately.
NOTE 20. 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 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.
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 em ergency. 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.
One element of exiting from a state of financial emergency is the development of a Five-Year
Recovery Plan by the City, demonstrating the City’s ability to satisfy the requirements necessary
for restoration of the City’s fiscal integrity. The City submitted a proposed Five-Year Recovery
Plan to the State of Florida, which was approved in August 2020 without modification.
CITY OF OPA-LOCKA, FLORIDA
NOTES TO THE BASIC FINANCIAL STATEMENTS
FISCAL YEAR ENDED SEPTEMBER 30, 2019
- 68 -
NOTE 21. MANAGEMENT’S REVIEW
In preparing these financial statements, the Organization has evaluated events and transactions for
potential recognition or disclosure through June 28, 2021, the date the financial statements were
available to be issued. There were no other significant events that management believed require
disclosure.
NOTE 22. SUBSEQUENT EVENTS
In December 2019, COVID-19 (Coronavirus) surfaced in Wuhan, China, and has spread around
the Globe resulting in social and business disruption. The Coronavirus was declared a Public Health
Emergency of International Concern by the World Health Organization on January 30, 2020. The
operations and business results of the City could be significantly adversely affected. The extent to
which the Coronavirus may impact governmental activity will depend on future developments,
which are highly uncertain and cannot be predicted, including new information which may emerge
concerning the severity of the Coronavirus and the actions required to contain it and to treat its
impact. The duration of these uncertainties and the ultimate financial effects cannot be reasonably
estimated at this time.
The City recouped $901,927 from Miami-Dade County in March 2020, as a result of completing a
three year backlog of the Charter County Transportation System Surtax Review. This amount is
the City’s portion of Surtax proceeds used in compliance with the Interlocal Agreement for
Distribution, Use and Reporting of Charge County Transit System Surtax Proceeds levied by
Miami Dade County after completing its annual surtax audit for the fiscal years ended September
30, 2017, September 30, 2016, and September 30, 2015.
In addition, the City recouped $261,546 in May 2021, as a result of completing its annual surtax
audit for fiscal year ended September 30, 2018.
REQUIRED SUPPLEMENTARY INFORMATION
(Other than MD&A)
CITY OF OPA-LOCKA, FLORIDA
REQUIRED SUPPLEMENTARY INFORMATION
BUDGETARY COMPARISON SCHEDULE
GENERAL FUND
(NON-GAAP BUDGETARY BASIS – UNAUDITED)
FOR THE YEAR ENDED SEPTEMBER 30, 2019
- 69 -
Budgeted Amounts
Actual
Difference from
Final Budget
Positive (Negative) Original Final
Revenues:
Taxes:
Property taxes $ 8,092,596 $ 8,092,596 $ 7,984,161 $ (108,435)
Utility taxes 62,749 62,749 77,475 14,726
Communications service taxes - - - -
Local option gas tax - - - -
Local business taxes 191,574 191,574 284,844 93,270
Franchise fees 1,497,041 1,497,041 1,962,804 465,763
Permits and fees 568,201 568,201 693,714 125,513
Intergovernmental 40,703 40,703 117,711 77,008
Charges for services 80,236 80,236 178,402 98,166
Fines and forfeitures 1,200,534 350,534 662,776 312,242
Interest - - - -
Other 180,100 180,100 460,559 280,459
Total revenues 11,913,734 11,063,734 12,422,446 1,358,712
Expenditures:
General government:
City commission 257,886 167,874 182,358 (14,484)
City manager 1,863,653 1,572,545 1,088,338 484,212
City clerk 425,589 425,589 398,005 27,584
City attorney 507,874 507,874 712,159 (204,285)
Finance 805,070 805,070 788,675 16,395
Information technology - - - -
Human resources 309,821 301,908 317,093 (15,185)
Building licenses 507,303 507,303 413,073 94,230
Community development 379,668 348,695 520,571 (171,876)
Town center 707,188 707,188 312,564 394,624
Total general government 5,764,052 5,344,046 4,732,830 611,216
Public safety:
Police 6,849,668 6,372,100 6,235,397 136,703
Code enforcement 497,680 455,199 432,847 22,352
Total public safety 7,347,348 6,827,299 6,668,245 159,054
Public works:
Administration 280,654 276,940 315,886 (38,946)
Sanitation 120,000 120,000 127,977 (7,977)
Street maintenance 910,946 960,849 884,621 76,228
Building maintenance 493,405 424,006 420,042 3,964
Vehicle maintenance - - - -
Total public works 1,805,005 1,781,795 1,748,526 33,269
Parks and recreation:
Parks 633,826 591,521 543,626 47,895
Total parks and recreation 633,826 591,521 543,626 47,895
Non-departmental 595,000 595,000 - 595,000
Total non-departmental 595,000 595,000 - 595,000
Total expenditures 16,145,231 15,139,661 13,693,232 1,446,434
Excess of revenues over expenditures (4,231,497) (4,075,927) (1,270,785) (87,722)
Other financing sources (uses):
Transfer in 978,660
Total other financing sources (uses) 978,660
Net change in fund balance (292,125)
Fund balance, beginning (3,964,529)
Prior period adjustment 2,043,855
Fund balances, beginning restated (1,920,674)
Fund balance, ending $ (2,212,800)
CITY OF OPA-LOCKA, FLORIDA
REQUIRED SUPPLEMENTARY INFORMATION
BUDGETARY COMPARISON SCHEDULE
CAPITAL IMPROVEMENT DEBT SERVICE
(NON-GAAP BUDGETARY BASIS – UNAUDITED)
FOR THE YEAR ENDED SEPTEMBER 30, 2019
- 70 -
Budgeted Amounts
Actual
Variance with
Final Budget
Positive (Negative) Revenues: Original Final
Taxes: $ 1,244,098 $ 1,244,098 $ 1,463,590 $ 219,492
Intergovernmental 2,251,269 2,251,269 2,065,062 (186,207)
Interest - - 33 33
Total revenues 3,495,367 3,495,367 3,528,685 33,285
Expenditures:
Current:
General government:
General government - - 8,007 (8,007)
Debt service:
Principal 770,390 770,390 771,488 (1,098)
Interest 439,780 439,780 438,682 1,098
Reserves - - - -
Total debt service 1,210,170 1,210,170 1,218,177 (8,007)
Total expenditures 1,210,170 1,210,170 1,218,177 (8,007)
Excess of revenues over expenditures 2,285,197 2,285,197 2,310,508 41,292
Other financing sources (uses):
Transfer in -
Transfer out (978,660)
Total other financing sources (uses) (978,660)
Net change in fund balance 1,331,848
Fund balance, beginning 6,583,852
Prior period adjustment (1,814,112)
Fund balance, restated 4,769,740
Fund balance, ending $ 6,101,588
CITY OF OPA-LOCKA, FLORIDA
NOTES TO BUDGETARY SCHEDULE
REQUIRED SUPPLEMENTARY INFORMATION
FOR THE YEAR ENDED SEPTEMBER 30, 2019
- 71 -
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, 2019, expenditures exceeded appropriations in, general government, under
city commission, city attorney, human resources, and community development of the general fund. Overall,
general fund increased its revenues positively by $1.36 million and reduced its budgeted expenses by $1.4
million.
For the year ended September 30, 2019, the City had funds withheld by the State of Florida, as a result of the
City’s noncompliance with Section 11.40(2)(a), Florida Statues, which authorized the Joint Legislative Audit
Committee to direct the Department of Revenue and the Department of Finance Services to withhold selected
state revenues from municipalities that have failed to file an Annual Financial Report (AFR) and an annual
financial audit report (if required), revenues were reduced overall by ($33,285) in total pledged revenue for
this fund, while actual debt service and expenditures increased by $8,007 over budget, however overall the
change in fund balance was a positive $1,331,848 reported as of September 30, 2019.
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, 2019
- 72 -
2019 2018 2017 2016 2015
City of Opa-locka’s proportion of the net pension liability 0.0231% 0.0266% 0.0259% 0.0343% 0.0357%
City of Opa-locka’s proportionate share of the net pension liability $ 7,949,247 $ 8,031,493 $ 7,654,405 $ 8,653,259 $ 4,610,060
City of Opa-locka’s covered-employee payroll $ 6,716,687 $ 7,134,236 $ 6,394,032 $ 7,395,338 $ 9,279,820
City of Opa-locka’s proportionate share of the net pension liability
(asset) as a percentage of its covered-employee payroll 118.35% 112.58% 119.67% 117.01% 49.68%
Plan fiduciary net position as a percentage of the total pension liability 82.61% 84.26% 83.89% 84.88% 92.00%
Note: The amounts presented for each fiscal year were determined as of June 30th.
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 .
CITY OF OPA-LOCKA, FLORIDA
REQUIRED SUPPLEMENTARY INFORMATION
SCHEDULE OF THE CITY’S CONTRIBUTIONS –
FLORIDA RETIREMENT SYSTEM PENSION PLAN
SEPTEMBER 30, 2019
- 73 -
2019 2018 2017 2016 2015
Contractually required contribution $ 896,903 $ 926,137 $ 852,437 $ 983,512 $ 1,086,534
Contributions in relation to the contractually required
contribution 896,903 926,137 852,437 983,512 1,086,534
Contribution deficiency (excess) $ - $ - $ - $ - $ -
City of Opa-locka’s covered-employee payroll $ 6,716,687 $ 7,134,236 $ 6,394,032 $ 7,395,338 $ 9,279,820
Contributions as a percentage of covered-employee payroll 13.35% 12.98% 13.33% 13.30% 11.71%
Note: The amounts presented for each fiscal year were determined as of September 30th.
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 wh ich the required supplementary information is available.
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, 2019
- 74 -
2019 2018 2017 2016 2015
City of Opa-locka’s proportion of the net pension liability (asset) 0.0198% 0.0215% 0.0195% 0.0270% 0.0309%
City of Opa-locka’s proportionate share of the net pension liability (asset) $ 2,211,518 $ 2,282,255 $ 2,082,612 $ 3,144,569 $ 3,151,008
City of Opa-locka’s covered-employee payroll $ 6,716,687 $ 7,134,236 $ 6,394,032 $ 7,395,338 $ 9,279,820
City of Opa-locka’s proportionate share of the net pension liability (asset)
as a percentage of its covered-employee payroll 32.93% 31.99% 32.57% 42.52% 33.96%
Plan fiduciary net position as a percentage of the total pension liability 2.63% 2.15% 1.64% 0.97% 0.50%
Note: The amounts presented for each fiscal year were determined as of June 30th.
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.
CITY OF OPA-LOCKA, FLORIDA
REQUIRED SUPPLEMENTARY INFORMATION
SCHEDULE OF THE CITY’S CONTRIBUTIONS –
HEALTH INSURANCE SUBSIDY PENSION PLAN
SEPTEMBER 30, 2019
- 75 -
2019 2018 2017 2016 2015
Contractually required contribution $ 135,611 $ 141,785 $ 129,528 $ 161,304 $ 156,110
Contributions in relation to the contractually required
contribution 135,611 141,785 129,528 161,304 156,110
Contribution deficiency (excess) $ - $ - $ - $ - $ -
City of Opa-locka’s covered-employee payroll $ 6,716,687 $ 7,134,236 $ 6,394,032 $ 7,395,338 $ 9,279,820
Contributions as a percentage of covered-employee payroll 2.02% 1.99% 2.03% 2.18% 1.68%
Note: The amounts presented for each fiscal year were determined as of September 30th.
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.
CITY OF OPA-LOCKA, FLORIDA
REQUIRED SUPPLEMENTARY INFORMATION
SCHEDULE OF CHANGES IN THE CITY’S TOTAL –
OTHER POST EMPLOYMENT BENEFITS LIABILITY AND RELATED RATIOS
SEPTEMBER 30, 2019
- 76 -
Total OPEB Liability
Service cost $ 28,827
Interest 13,113
Changes in assumptions 2,184
Benefit payments (8,887)
Net change in Total OPEB liability 35,237
Total OPEB liability -beginning as restated 341,870
Total OPEB liability -ending $ 377,107
Covered employer payroll N/A
Total OPEB liability as a % of covered employee payroll N/A
Notes to schedule
1. Changes of assumptions – Discount rate was changed as follows:
Discount Rate
9/30/2018 3.64%
9/30/2019 3.58%
2. The information in this schedule is not required to be presented retroactively. Therefore, years will be added to this schedule in future
years until ten years of information are available.
OTHER SUPPLEMENTARY INFORMATION
CITY OF OPA-LOCKA, FLORIDA
COMBINING BALANCE SHEET
NON-MAJOR GOVERNMENTAL FUNDS
SEPTEMBER 30, 2019
- 77 -
Special
Law
Enforcement
People's
Transportation Tax
Community
Redevelopment
Agency
Safe
Neighborhood
Capital Projects Total
ASSETS
Current assets:
Cash and cash equivalents $ 264,734 $ 105,100 $ 628,608 $ 134,553 $ 1,132,994
Due from other funds 410,529 2,038,094 342,502 2,605,968 5,397,093
Due from other governments - 2,071,694 - 100,000 2,171,694
Restricted cash and cash equivalents - - - 69,104 69,104
Total current assets 675,263 4,214,888 971,110 2,909,625 8,770,885
Total assets $ 675,263 $ 4,214,888 $ 971,110 $ 2,909,625 $ 8,770,885
LIABILITIES
Current liabilities:
Accounts payable and accrued liabilities $ 4,406 $ 53,314 $ 70,204 $ 240,114 $ 368,039
Due to other funds 126 3,030,918 121,006 2,513,049 5,665,100
Total current liabilities 4,532 3,084,232 191,210 2,753,163 6,033,138
Total liabilities 4,532 3,084,232 191,210 2,753,163 6,033,138
NET POSITION
Restricted for:
CRA - - 779,900 - 779,900
Public safety 670,731 - - - 670,731
Transportation - 1,130,655 - - 1,130,655
Capital projects - - - 156,461 156,461
Total Fund Balances 670,731 1,130,655 779,900 156,461 2,737,747
Total Liabilities and Fund Balances $ 675,263 $ 4,214,888 $ 971,110 $ 2,909,625 $ 8,770,885
CITY OF OPA-LOCKA, FLORIDA
COMBINING STATEMENT OF REVENUES, EXPENDITURES
AND CHANGES IN FUND BALANCES
NON-MAJOR GOVERNMENTAL FUNDS
SEPTEMBER 30, 2019
- 78 -
Special
Law
Enforcement
People's
Transportation Tax
Community
Redevelopment
Agency
Safe
Neighborhood
Capital Projects Total
REVENUES
Property Taxes $ - $ - $ 555,288 $ - $ 555,288
Local option, use and fuel taxes - - - 316,921 316,921
Intergovernmental 2,395 1,012,246 - - 1,014,641
Charges for services 9,310 - - - 9,310
Total revenues 11,705 1,012,246 555,288 316,921 1,896,159
EXPENSES
Current:
General government $ - $ - $ 66,660 $ - $ 66,660
Public safety 4,406 - - - 4,406
Transportation - 998,090 - 57,070 1,055,160
Total expenses 4,406 998,090 66,660 57,070 1,126,226
Excess (deficiency) of revenues
over expenditures 7,299 14,156 488,628 259,851 769,933
Net change in fund balances 7,299 14,156 488,628 259,851 769,933
Fund balances, beginning 663,432 1,343,940 291,272 (103,389) 2,195,254
Prior period adjustment - (227,441) - - (227,440)
Fund balances, beginning restated 663,432 1,116,499 291,272 (103,389) 1,967,814
Fund balances, ending $ 670,731 $ 1,130,655 $ 779,900 $ 156,461 $ 2,737,747
CITY OF OPA-LOCKA, FLORIDA
COMBINING STATEMENT OF NET POSITION BALANCES
NON-MAJOR ENTERPRISE FUNDS
SEPTEMBER 30, 2019
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Solid Waste Storm Water Total
ASSETS
Current assets:
Cash and cash equivalents $ - $ 2,022,257 $ 2,022,257
Accounts receivable, net - 347,785 347,785
Due from other funds 1,690,264 705,945 2,396,209
Due from other governments - 38,514 38,514
Restricted cash and cash equivalents - 110,000 110,000
Total current assets 1,690,264 3,224,501 4,914,765
Non-current assets:
Capital assets, non-depreciable - 289,056 289,056
Capital assets, depreciable (1) 31,990 31,990
Total non-current assets (1) 321,046 321,046
Total assets $ 1,690,263 $ 3,545,547 $ 5,235,810
LIABILITIES
Current liabilities:
Accounts payable and accrued liabilities $ - $ 264,764 $ 264,764
Due to other funds 1,649,066 1,372,918 3,021,985
Customer deposits 64,144 1 64,145
Total current liabilities 1,713,210 1,637,683 3,350,893
Non-current liabilities:
Compensated absences - 28,311 28,311
OPEB obligation - 3,996 3,996
Other long term debt - 530,972 530,972
Total non-current liabilities - 563,278 563,278
Total liabilities 1,713,210 2,200,961 3,914,171
NET POSITION
Invested in capital assets, net of related debt (1) 321,046 321,046
Unrestricted (22,946) 1,023,540 1,000,594
Total Net Position $ (22,947) $ 1,344,586 $ 1,321,639
CITY OF OPA-LOCKA, FLORIDA
COMBINING STATEMENT OF REVENUES, EXPENDITURES, AND CHANGES IN
NET POSITION―NON-MAJOR ENTERPRISE FUNDS
SEPTEMBER 30, 2019
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Stormwater Solid Waste Total
Operating revenues:
Charges for services $ 1,535,691 $ - $ 1,535,691
Total operating revenues 1,535,691 - 1,535,691
Operating expenses:
Operating, administrative and maintenance 703,709 - 703,709
Depreciation - - -
Bad debts and other 691,979 - 691,979
Total operating expenses 1,395,688 - 1,395,688
Non-operating revenues (expenses):
Interest and other debt costs 2,764 - 2,764
Total non-operating revenues (expenses) 2,764 - 2,764
Change in net position 137,240 - 137,240
Net position, beginning 1,064,962 (22,947) 1,042,015
Prior period adjustment 142,384 - 142,384
Net position, beginning restated 1,207,346 (22,947) 1,184,399
Net position, ending $ 1,344,586 $ (22,947) $ 1,321,639
CITY OF OPA-LOCKA, FLORIDA
COMBINING STATEMENT OF CASH FLOWS
NON-MAJOR ENTERPRISE FUNDS
SEPTEMBER 30, 2019
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Stormwater Solid Waste Total
Cash flows from operating activities:
Cash received from customers $ 1,132,107 $ - $ 1,132,107
Cash paid to vendors (619,661) - (619,661)
Cash paid to employees (84,047) - (84,047)
Receipts from other governments 5,924 - 5,924
Net cash provided by operating activities 434,323 - 434,323
Cash flows from noncapital financing activities:
Transfer from (to) other funds 398,864 - 398,864
Net cash provided by noncapital financing activities 398,864 - 398,864
Cash flows from capital and related financing activities:
Interest paid on long term debt (2,764) - (2,764)
Net cash used in capital and related financing activities (2,764) - (2,764)
Net increase (decrease) in cash 830,423 - 830,423
Cash, beginning 1,301,834 - 1,301,834
Cash, ending 2,132,257 - 2,132,257
Display as:
Unrestricted 2,022,257 - 2,022,257
Restricted 110,000 - 110,000
Total $ 2,132,257 $ - $ 2,132,257
Reconciliation of operating income to cash provided by
operating activities:
Operating (loss) $ 137,240 $ - $ 137,240
Adjustment to reconciled operating income to net cash
provided by (used in) operating activities:
Depreciation - - -
Increase (decrease) in:
Accounts receivable 180,025 - 180,025
Due from other governments 5,924 - 5,924
Due from other funds (164,414) 727 (163,687)
Increase (decrease) in:
Accounts payable and accrued liabilities 43,148 - 43,148
Customer deposits - (727) (727)
Compensated absences (11,408) - (11,408)
Other liabilities and pension (16,921) - (16,921)
Due to other funds 260,729 - 260,729
Other - - -
Net cash provided by operating activities $ 434,323 $ - $ 434,323
COMPLIANCE SECTION
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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 were engaged to audit, 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, 2019, and the related
notes to the financial statements, which collectively comprise Opa-locka’s basic financial statements and
have issued our report thereon dated June 28, 2021.
Internal Control over Financial Reporting
In connection with our engagement to audit the financial statements of Opa-locka, we considered Opa-
locka’s internal control over financial reporting (internal control) to determine the audit procedures that are
appropriate in the circumstances for the purpose of expressing our opinions on the financial statements, but
not for the purpose of expressing an opinion on the effectiveness of Opa -locka’s internal control.
Accordingly, we do not express an opinion on the effectiveness of Opa-locka’s internal control.
A deficiency in internal control exists when the design or operation of a control does not allow management
or employees, in the normal course of performing their assigned functions, to prevent, or detect and correct,
misstatements on a timely basis. A material weakness is a deficiency, or a combination of deficiencies, in
internal control such that there is a reasonable possibility that a material misstatement of the entity’s financial
statements will not be prevented, or detected and corrected on a timely basis. We consider the deficiencies
described in the accompanying schedule of findings and questioned costs to be material weaknesses. 2019-
01, 2019-02, 2019-03, 2017-01, 2017-02, 2017-03, 2017-04, 2017-05, 2015-01, and 2015-03.
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, 2015-02, and 2014-01.
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 findings and questioned costs,
we identified certain deficiencies in internal control that we consider to be material weaknesses and
significant deficiencies.
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Compliance and Other Matters
In connection with our engagement to audit the financial 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 instances of
noncompliance or other matters that are required to be reported under Government Auditing Standards and
which are described in the accompanying schedule of findings and questioned costs as item 2015-05.
Additionally, if the scope of our work had been sufficient to enable us to express opinions on the basic
financial statements, other instances of noncompliance or other matters may have been identified and
reported herein.
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 findings and questioned costs. Opa-locka’s response was not subjected to the auditing
procedures applied in the engagement to audit the financial 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.
Miami, Florida
June 28, 2021
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INDEPENDENT AUDITOR’S REPORT ON COMPLIANCE FOR EACH
MAJOR FEDERAL PROGRAM AND REPORT ON INTERNALCONTROL
OVER COMPLIANCE IN ACCORDANCE WITH THE UNIFORM GUIDANCE
To the Honorable Mayor and Members of the City Council
City of Opa-locka, Florida
Report on Compliance for Each Major Federal Program
We have audited City of Opa-locka, (the “City”) Florida’s compliance with the types of compliance
requirements described in the U.S. Office of Management and Budget (“OMB”) Compliance Supplement that
could have a direct and material effect on each of the City’s major federal programs for the year ended
September 30, 2019. The City’s major federal programs are identified in the summary of auditor’s results
section of the accompanying Schedule of Findings and Questioned Costs.
Management’s Responsibility
Management is responsible for compliance with federal regulations, and the terms and conditions of its federal
awards applicable to its federal programs.
Auditor’s Responsibility
Our responsibility is to express an opinion on compliance for each of the City’s major federal programs based
on our audit of the types of compliance requirements referred to above. We conducted our audit of compliance
in accordance with auditing standards generally accepted in the United States of America; the standards
applicable to financial audits contained in Government Auditing Standards, issued by the Comptroller General
of the United States; and the audit requirements of Title 2 U.S. Code of Federal Regulations Part 200, Uniform
Administrative Requirements, Cost Principles, and Audit Requirements for Federal Awards (“Uniform
Guidance”); Those standards and the Uniform Guidance , require that we plan and perform the audit to obtain
reasonable assurance about whether noncompliance with the types of compliance requirements referred to above
that could have a direct and material effect on a major federal program occurred. An audit includes examining,
on a test basis, evidence about the City’s compliance with those requirements and performing such other
procedures as we considered necessary in the circumstances.
We believe that our audit provides a reasonable basis for our opinion on compliance for each major federal
program. However, our audit does not provide a legal determination of the City’s compliance.
Opinion on Each Major Federal Program
In our opinion, the City complied, in all material respects, with the types of compliance requirements referred to
above that could have a direct and material effect on each of its major federal programs for the year ended
September 30, 2019.
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Report on Internal Control over Compliance
Management of the City is responsible for establishing and maintaining effective internal control over compliance
with the types of compliance requirements referred to above. In planning and performing our audit of compliance,
we considered the City’s internal control over compliance with the types of requirements that could have a direct
and material effect on each major federal program to determine the auditing procedures that are appropriate in the
circumstances for the purpose of expressing an opinion on compliance for each major federal program and state
project, and to test and report on internal control over compliance in accordance with Uniform Guidance, but not
for the purpose of expressing an opinion on the effectiveness of internal control over compliance. Accordingly, we
do not express an opinion on the effectiveness of the City’s internal control over compliance.
A deficiency in internal control over compliance exists when the design or operation of a control over compliance
does not allow management or employees, in the normal course of performing their assigned functions, to
prevent, or detect and correct, noncompliance with a type of compliance requirement of a federal program on a
timely basis. A material weakness in internal control over compliance is a deficiency, or combination of
deficiencies, in internal control over compliance, such that there is a reasonable possibility that material
noncompliance with a type of compliance requirement of a federal program will not be prevented, or detected
and corrected, on a timely basis. A significant deficiency in internal control over compliance is a deficiency, or
a combination of deficiencies, in internal control over compliance with a type of compliance requirement of a
federal program that is less severe than a material weakness in internal control over compliance, yet important
enough to merit attention by those charged with governance.
Our consideration of internal control over compliance was for the limited purpose described in the first paragraph
of this section and was not designed to identify all deficiencies in internal control over compliance that might be
material weaknesses or significant deficiencies. We did not identify any deficiencies in internal control over
compliance that we consider to be material weaknesses. However, material weaknesses may exist that have not
been identified.
Report on Schedule of Expenditures of Federal Awards Required by the Uniform Guidance
We have audited the financial statements of the governmental activities, the business-type activities, each major
fund, and the aggregate remaining fund information of the City, as of and for the year ended September 30, 2019,
and the related notes to the financial statements, which collectively comprise the City’s basic financial
statements. We issued our report thereon dated June 28, 2021, which contained unmodified opinions on those
financial statements. Our audit was conducted for the purpose of forming opinions on the financial statements
that collectively comprise the basic financial statements. The accompanying Schedule of Expenditures of Federal
Awards is presented for purposes of additional analysis as required by the Uniform Guidance, and is not a
required part of the basic financial statements. Such information is the responsibility of management and was
derived from and relates directly to the underlying accounting and other records used to prepare the basic
financial statements. The information has been subjected to the auditing procedures applied in the audit of the
financial statements and certain additional procedures, including comparing and reconciling such information
directly to the underlying accounting and other records used to prepare the basic financial statements or to the
basic financial statements themselves, and other additional procedures in accordance with auditing standards
generally accepted in the United States of America. In our opinion, the Schedule of Expenditures of Federal
Awards is fairly stated in all material respects in relation to the basic financial statements as a whole.
The purpose of this report on internal control over compliance is solely to describe the scope of our testing of
internal control over compliance and the results of that testing based on the requirements of the Uniform
Guidance. Accordingly, this report is not suitable for any other purpose.
Miami, Florida
June 28, 2021
CITY OF OPA-LOCKA, FLORIDA
SCHEDULE OF FINDINGS AND QUESTIONED COSTS
FOR THE YEAR ENDED SEPTEMBER 30, 2019
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Section I - Summary of Auditors’ Results
Financial Statements
Type of Auditors’ Report Issued Unmodified
Internal control over financial reporting:
• Material weaknesses identified? X Yes No
• Significant deficiency identified that are not considered
to be material weaknesses? X Yes No
• Non-compliance material to financial statements noted? Yes X No
Federal Awards
Internal control over major programs:
• Material weaknesses identified? Yes X No
• Significant deficiency identified that are not considered to be
material weaknesses? Yes X None Reported
Type of Auditors’ Report Issued on Compliance for Major Program: Unmodified
Any audit findings disclosed that are required to be reported in
accordance with Section 200.516 the Uniform Guidance Yes X No
Identification of Major Programs:
CFDA Numbers Name of Federal Program or Cluster
66.458 Capitalization Grants for Clean Water State Revolving Funds
66.468 Capitalization Grants for Drinking Water State Revolving Funds
Dollar threshold used to distinguish between
Type A and Type B programs: $750,000
Auditee qualified as low-risk auditee? Yes X No
CITY OF OPA-LOCKA, FLORIDA
SCHEDULE OF FINDINGS AND QUESTIONED COSTS
FOR THE YEAR ENDED SEPTEMBER 30, 2019
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Section II – Current Year - Financial Statement Findings
Material Weakness
2019-01 Support for Water and Sewer Consumption
Condition
We were not able to obtain and review the source documentation for water and sewer
consumption calculations used in the utility billing process.
Criteria
Pertinent accounting records should be secured and retained as a standard business practice.
Cause of Condition
The computer housing, Itron MV-RS meter reading software used to record consumption for
water and sewer was reprioritized by IT for other uses, and a backup of the consumption data
records was not retained. In addition, records to show the basis for calculation of consumption
estimates used in the billing process were not retained.
Potential effect of Conditions
Water and sewer revenues recorded for the year cannot be re-calculated, and the revenue balance
may be misstated.
Recommendation
The City should retain all pertinent documentation and records that support their account activity
and balances pursuant to Florida statutes record retention policy.
View of Responsible Officials and Planned Corrective Actions
It should be clarified that pursuant to Florida Statute’s record retention policy, all pertinent
documentation and records that support the City’s revenue activity and accounts receivable
balances are maintained on the City’s server within the Utility Billing system referred to as
SunGard (e-Community).
It is also notated that when estimated billings are used, the basis for calculation of consumption
in the billing process is a procedure authorized by City Ordinance Section 21-93. This Ordinance
states that in the event any meter has been damaged, destroyed or required repair, or in the event
any meter is found to be defective or has ceased to register, said meter will be adjusted, repaired,
or changed and the department will estimate the bill for the period, either by adopting and using
the registration of a correct meter or by comparison with the amount charged during the
corresponding period of the previous year, taking into account the capacity of the installation.
CITY OF OPA-LOCKA, FLORIDA
SCHEDULE OF FINDINGS AND QUESTIONED COSTS
FOR THE YEAR ENDED SEPTEMBER 30, 2019
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Section II – Current Year - Financial Statement Findings (Continued)
Material Weakness (cont’d)
2019-01 Support for Water and Sewer Consumption (cont’d)
View of Responsible Officials and Planned Corrective Actions (cont’d)
Furthermore, the Itron MV-RS meter reading software (also known as handheld computer)
previously used to record consumption is a device that served the purpose of reading each
customers’ meter and then transferring the resulting consumption data to the City’s Utility
Billing system (UB) known as SunGard (e-Community).
Once the consumption data was transferred from the Itron MV-RS meter reader to the City’s
server, it was saved and is presently retained on the City’s server to this date. The utility billing
consumption data for FY2019 is still currently being viewed and relied upon on the server by
authorized City staff. The FY2019 utility billing consumption data includes those customer
accounts that were not yet transferred to the management of Miami -Dade County Water and
Sewer Department (the “County” or “WASD”) through the agreement ratified by both the City
and the County on August 4, 2017. Sample reports from the server, such as monthly
consumption data for each customer and their respective payment log per customer were
generated as of this writing and are available for review by the external auditor.
It is also clarified that although more than 5,000 customer utility billing accounts were
transferred to WASD for outsourced management of the utility billing process on behalf of the
City, the data for the City’s utility billing customers currently being billed by WASD are
available upon request by the City.
CITY OF OPA-LOCKA, FLORIDA
SCHEDULE OF FINDINGS AND QUESTIONED COSTS
FOR THE YEAR ENDED SEPTEMBER 30, 2019
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Section II – Current Year - Financial Statement Findings (Continued)
Material Weakness
2019-02 Untimely Recognition of Half Cent Tax Revenue
Condition
The City did not deposit checks sent by the State of Flori da in FY2019 for Half Cent Tax
revenue, a part of the Capital Projects Debt Service revenue for July 2019 and August 2019
amounting to approximately $231,000. Per the City, the checks were never received and thus
never deposited. As a result, these funds were recorded by the State of Florida as unclaimed
property. The State subsequently deposited the funds into the City’s bank account in September
2020, and because the City did not know what these funds were for, proceeds were recorded as
miscellaneous income in FY2020.
Criteria
Comprehensive review and reconciliation of revenue accounts should be performed timely to
ensure the completeness and accuracy of cash proceeds.
Cause of Condition
The City did not fully investigate the source of proceeds prior to its revenue recognition.
Potential effect of Conditions
The inability to determine completeness of revenue may increase the City’s exposure to fraud
and the potential for misappropriation of resources. In addition, it impedes efficient cashflow
management and may result in improper revenue recognition and potential loss of income.
Recommendation
Management should enhance its control environment over the revenue and receivables process
to ensure timely and proper recognition of revenue.
View of Responsible Officials and Planned Corrective Actions
The City concurs that it should enhance its control environment over the revenue and receivables
process to ensure timely and proper recognition of revenue. The corrective actions taken to
address this includes but are not limited to the following:
• Active recruitment within the Finance Department; and management’s review of a necessary
budget revision to hire additional resources such as a Finance Director, Senior Accountants
with the knowledge, experience, and capability to perform a comprehensive review and
reconciliation of revenue and receivable accounts on a timely basis. The City’s Finance
Department has not been operating at full capacity on an ongoing basis and lacks sufficient
staffing to address all of the following: (1) day to day operations, (2) back log of financial and
compliance audits, (3) reconciliation of all governmental and business type activity accounts,
(4) addressing research and correction of errors related to the prior periods, (5) complex and
ongoing assignments and special projects.
CITY OF OPA-LOCKA, FLORIDA
SCHEDULE OF FINDINGS AND QUESTIONED COSTS
FOR THE YEAR ENDED SEPTEMBER 30, 2019
- 90 -
Section II – Current Year - Financial Statement Findings (Continued)
Material Weakness (cont’d)
2019-02 Untimely Recognition of Half Cent Tax Revenue (cont’d)
View of Responsible Officials and Planned Corrective Actions (cont’d)
• At such time, that the hiring is completed, continued use of temporary staff persons to monitor,
analyze, and prepare journal entries to record the revenue and accounts receivable activity
will be done, along with a schedule of routine and monthly transactions. Training on
accounting policies and procedures and the City’s revenue budget will be provided as a guide
to assure that proper recording of revenues expected are timely posted. The use of the budget
will alert staff to perform research and make inquiries when certain revenue is not received
as scheduled.
Management expects that implementation of the corrective action stated above will enhance its
control environment over the revenue and receivables process.
CITY OF OPA-LOCKA, FLORIDA
SCHEDULE OF FINDINGS AND QUESTIONED COSTS
FOR THE YEAR ENDED SEPTEMBER 30, 2019
- 91 -
Section II – Current Year - Financial Statement Findings (Continued)
Material Weakness
2019-03 Inaccurate Calculation and Accrual of Department of Environmental Resources
Management (DERM) Revenue
Condition
The DERM service fee revenue was accrued at 8% but paid to Miami Dade County at 6%.
Although the rate changed from 8% to 6% effective October 1, 2017, the City continued to
accrue the DERM at the old rate. As a result, there is more revenue accrued compared to the
actual DERM payment to Miami-Dade County for the same period overstating revenue by
approximately $182,000.
Criteria
Per Section 24-34 of the Code of Miami-Dade County (the County), “Each water or sewer utility
shall collect from its customers and pay to the County a County service fee equal to eight dollars
($8.00) per each one hundred dollars ($100.00) of the receipts of said utilit y derived from its
water and/or sewer utility operations conducted within the County to cover the cost of providing
certain environmental services to and certain environmental regulation of said water or sewer
utilities. Effective October 1, 2017, the service fee shall be reduced to $6.00 per each $100.00
of the receipts of each water or sewer utility derived from its water and/or sewer utility
operations conducted within the County.”
Cause of Condition
The City is accruing DERM revenue at a higher rate than is required by or remitted to the
County.
Potential effect of Conditions
This results in the overstatement of DERM revenue.
Recommendation
The City must accrue for DERM revenue at the rate stipulated by the County’s Code.
View of Responsible Officials and Planned Corrective Actions
This condition has been resolved. In addition, the City is taking corrective action, to review
customer’s accounts for adjustment of the two (2) percent difference.
CITY OF OPA-LOCKA, FLORIDA
SCHEDULE OF FINDINGS AND QUESTIONED COSTS
FOR THE YEAR ENDED SEPTEMBER 30, 2019
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Section III – Prior Year - Financial Statement Findings and Status
Material Weakness
2017-01 Florida Auditor General Report Findings
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.
Criteria
Prudent accounting practices include policies, procedures, and controls over the safeguarding,
recording, processing, and reporting of the City’s financial Operations and transactions.
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.
Current Year Status
The Auditor General report dated May 23, 2019, contained 99 findings and related
recommendations. Many items prescribed in the proposed corrective action plan were
addressed; however, several items remain open.
View of Responsible Officials and Planned Corrective Actions
The City has undertaken a rigorous program of correcting prior issues where pract ical and is
developing documented policies and procedures where appropriate to establish guidance and
checks and balances to avoid a recurrence of these problems in the future. At this time, 30
findings have been deemed as satisfactorily completed, with work underway on the remainder.
The Government Finance Officers Association (GFOA) recommends that every government
should consider the feasibility of establishing a formal internal audit function to help
management maintain a comprehensive framework of internal controls and that if not feasible,
the local government is encouraged to consider (1) assigning internal audit responsibilities to its
regular employees or (2) obtaining the services of an accounting firm (other than the
independent auditor) for the purposes;
• The internal audit function should be established formally by charter, enabling resolution,
or other appropriate legal means, which should include the scope of work, who the internal
auditor reports to (i.e. top management and/or the audit committee/governing body),
submission of an annual report, and the auditing standard(s) to follow;
CITY OF OPA-LOCKA, FLORIDA
SCHEDULE OF FINDINGS AND QUESTIONED COSTS
FOR THE YEAR ENDED SEPTEMBER 30, 2019
- 93 -
Section III – Prior Year - Financial Statement Findings and Status (Continued)
Material Weakness (cont’d)
2017-01 Florida Auditor General Report Findings (cont’d)
View of Responsible Officials and Planned Corrective Actions (cont’d)
• It is recommended that internal auditors of state and local governments conduct their work
in accordance with the professional standards relevant to internal auditing contained in the
U.S. General Accounting Office’s publication Government Auditing Standards, including
those applicable to the independence of internal auditors;
• At a minimum, the head of the internal audit function should possess a college degree and
appropriate relevant experience. It also is highly desirable that the head of the internal audit
function hold some appropriate form of professional certification (e.g., certified internal
auditor, certified public accountant, certified information systems auditor); and
• All reports of internal auditors, as well as the annual internal audit work plan, should be
made available to the government’s audit committee or its equivalent.
In review of the City’s Five-Year Financial Recovery Plan produced by the City in fiscal year
2020-2021, there is limited capacity for additional staffing and an internal auditor is not
envisioned at this time. The City believes based on operational and financial data known at this
time, that it is not feasible to establish a separate internal audit function at this time. However,
it is considering assigning internal audit responsibilities to its regular employees by creating an
Internal Audit Committee to brief the City Manager on an advisory basis internally in the near
future.
CITY OF OPA-LOCKA, FLORIDA
SCHEDULE OF FINDINGS AND QUESTIONED COSTS
FOR THE YEAR ENDED SEPTEMBER 30, 2019
- 94 -
Section III – Prior Year - Financial Statement Findings and Status (Continued)
Material Weakness
2017-02 Strengthen Staff Resources in the Finance and Accounting Department
Condition
In performing the City’s audits, we noted conditions of personnel turnover as well as a lack of full-
time employees who possess the skills, knowledge, and experience in the governmental industry.
Criteria
The City should have available finance and/or accounting staff members who understand and have
experience in the accounting and financial reporting requirements of the governmental industry.
Recommendation
We recommend that 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.
Current Year Status
An initial working trial balance (WTB) was received from the City’s Finance and Accounting
department on March 24, 2021, for the fiscal year ended September 30, 2019. During field work
for this engagement, 52 audit adjustments with approximately 1,350 data entry lines
cumulatively adding to $51,984,500, were required to correct the original WTB submission. A
complete assessment of the skillset and knowledge of the City’s team is required to address
required daily tasks.
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 has assessed and identified
areas of weakness in the Finance Department to make corrective action, and provide the
necessary resources and tools to further strengthen the department. The City has added an
additional resource consultant to assist with providing the government accounting experience
on an interim basis. Lastly, the City has had improvements in the audit adjustments, by reducing
audit adjustments from more than 150 to 52 in the current fiscal year, which demonstrates the
City’s methods are being enhanced.
CITY OF OPA-LOCKA, FLORIDA
SCHEDULE OF FINDINGS AND QUESTIONED COSTS
FOR THE YEAR ENDED SEPTEMBER 30, 2019
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Section III – Prior Year - Financial Statement Findings and Status (Continued)
Material Weakness
2017-03 There is No Physical Inventory of Infrastructure and Fixed Assets
Condition
The City has not performed a physical inventory of infrastructure assets or other capital assets
owned by the City.
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.
Recommendation
We recommend that the City perform a physical inventory of its infrastructure and capital assets
and soon as time permits.
Current Year Status
On April 21, 2021, the City received an appraisal and physical inventory report for the
infrastructure and fixed assets of the City. Hence, item is no longer applicable.
View of Responsible Officials and Planned Corrective Actions
Since this corrective action was taken as soon as time permitted, management recommends that
this Finding be closed and will budget the performance of a physical inventory count.
CITY OF OPA-LOCKA, FLORIDA
SCHEDULE OF FINDINGS AND QUESTIONED COSTS
FOR THE YEAR ENDED SEPTEMBER 30, 2019
- 96 -
Section III – Prior Year - Financial Statement Findings and Status (Continued)
Material Weakness
2017-04 Reconciliation of Cash Accounts
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.
Criteria
Timely preparation of complete and accurate bank reconciliations is a key to maintaining
adequate control over both cash receipts and disbursements.
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.
Current Year Status
Bank reconciliations were not fully completed for the fiscal year ended September 30, 2019,
until the month of March 2021.
In addition, as a result of reconciling discrepancies, audit adjustments amounting to
approximately $1.1 million were posted to adjust the cash balances at year end.
CITY OF OPA-LOCKA, FLORIDA
SCHEDULE OF FINDINGS AND QUESTIONED COSTS
FOR THE YEAR ENDED SEPTEMBER 30, 2019
- 97 -
Section III – Prior Year - Financial Statement Findings and Status (Continued)
Material Weakness
2017-04 Reconciliation of Cash Accounts (cont’d)
View of Responsible Officials and Planned Corrective Actions
For multiple years, the City’s Finance Department was functioning without the required staffing
levels and supervisory oversight. However, in recent years, the City has implemented corrective
action to reconcile cash activity on a monthly basis and has created policies and procedures to
improve the preparation and monitoring controls over the bank reconciliation process.
Additionally, the City has hired two Staff Accountants to be responsible for completing the bank
reconciliations and applicable journal entries on a monthly basis and has demonstrated progress
in this area.
To strengthen the timeliness of these reconciliations, the City’s Consultant began holding weekly
briefing meetings with these Staff Accountants to ensure that the bank reconciliation process is
being properly completed as planned. These weekly meetings provide structure and enhance the
Finance Department’s ability to produce bank reconciliation of cash on a timely basis, and creates
a plan to get current on producing bank reconciliations.
CITY OF OPA-LOCKA, FLORIDA
SCHEDULE OF FINDINGS AND QUESTIONED COSTS
FOR THE YEAR ENDED SEPTEMBER 30, 2019
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Section III – Prior Year - Financial Statement Findings and Status (Continued)
Material Weakness
2017-05 Internal Control Over Payroll Processing and Personnel File Maintenance
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 pro perly
reviewed and approved prior to posting to the general ledger
Criteria
Prudent accounting practices include policies, procedures and controls over the recording,
processing, and reporting of accounting events and transactions.
Cause of Condition
Failure to design and implement adequate internal controls over payroll and personnel file
maintenance.
Potential 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.
CITY OF OPA-LOCKA, FLORIDA
SCHEDULE OF FINDINGS AND QUESTIONED COSTS
FOR THE YEAR ENDED SEPTEMBER 30, 2019
- 99 -
Section III – Prior Year - Financial Statement Findings and Status (Continued)
Material Weakness
2017-05 Internal Control Over Payroll Processing and Personnel File Maintenance (cont’d)
Current Year Status
The City appears to have addressed many of the findings noted above. However, certain record
retention and employment file documentation issues remain.
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 the following procedures have been implemented during the subsequent period.
• 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 is currently reviewed by the Finance Director or
designated personnel to perform this supervisory function with a signature as evidence of
review to demonstrate reasonableness of the payroll process.
• The policies and procedures for payroll processing and personnel file maintenance are
available for review upon request.
With the auditor’s confirmation that the above internal control items are currently in effect at
the City, management requests that this finding be closed.
CITY OF OPA-LOCKA, FLORIDA
SCHEDULE OF FINDINGS AND QUESTIONED COSTS
FOR THE YEAR ENDED SEPTEMBER 30, 2019
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Section III – Prior Year - Financial Statement Findings and Status (Continued)
Significant Deficiency
2017-06 Pension Plan Remittance
Condition
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.
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.
Cause of Condition
Failure of the City design and implement adequate controls.
Potential Effect of Condition
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.
Current Year Status
This comment remains relevant for FY 2019. The City failed to remit funds in a timely manner
as outlined in the DOL regulations for all 12 months.
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. This staff person uses
the following steps to ensure timely processing of the pension plan payments due monthly:
• Monitors the City’s receipt of the monthly invoice and records the receipt date and the amount
due.
• Should an invoice not be received during a certain month, the staff person will follow-up
with a phone call to the company to inquire of the invoice and request a duplicate copy to
prevent a delay in processing the payment.
CITY OF OPA-LOCKA, FLORIDA
SCHEDULE OF FINDINGS AND QUESTIONED COSTS
FOR THE YEAR ENDED SEPTEMBER 30, 2019
- 101 -
Section III – Prior Year - Financial Statement Findings and Status (Continued)
Significant Deficiency (cont’d)
2017-06 Pension Plan Remittance (cont’d)
View of Responsible Officials and Planned Corrective Actions (cont’d)
• Prepares the Requisition for payment and track the length of time taken to have it approved
as a Purchase Order (PO).
• Follows up on the time taken for PO to be received in Accounts Payable from the City
Manager’s Office.
• Follows up on the time taken for the wire transfer to be processed and sent to Pension Plan
Agent.
• To document the pension plan file, HR’s staff person will obtain a copy of the monthly wire
transfer confirmation and attach it to copy of the invoice and Requisition request.
In addition to the procedures above, there will be oversight and monitoring by both the Human
Resources Director and staff within the Finance Department.
With the auditor’s confirmation that the above internal control items are currently in effect at
the City, management requests that this finding be closed.
CITY OF OPA-LOCKA, FLORIDA
SCHEDULE OF FINDINGS AND QUESTIONED COSTS
FOR THE YEAR ENDED SEPTEMBER 30, 2019
- 102 -
Section III – Prior Year - Financial Statement Findings and Status (Continued)
Material weakness
2015-01 Timeliness of Recording Individual 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 an d reliable
financial statements.
Criteria
Prudent accounting practices include policies, procedures and controls over the recording,
processing, and reporting of accounting events and transactions.
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
This condition still exists in FY2019. For example, several accounts payable, accruals, other
liabilities related to payroll benefits expenses were materially misstated as of the year end due
to multiple incorrect and incomplete entries posted to the accounts over many years.
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. To
enhance the accuracy and reliability of these events and transactions, Management has
implemented the following procedures:
• The City has developed the necessary policies and accounting procedures to address this
finding.
• The City has made plans to give group/and or individual training sessions to Finance
Department staff in the areas of journal entry preparation; closing a fiscal month in order to
begin activity in a new month; reviewing the importance of obtaining sufficient, competent
evidential matter to support transaction.
• The City is actively reconciling accounts to produce relevant and accurate financial data.
• Additionally, the City is in the process of recruiting a seasoned Finance Director to provide
financial management, oversight, staff supervision and to continually monitor and improve
the Finance Department’s financial reporting system.
CITY OF OPA-LOCKA, FLORIDA
SCHEDULE OF FINDINGS AND QUESTIONED COSTS
FOR THE YEAR ENDED SEPTEMBER 30, 2019
- 103 -
Section III – Prior Year - Financial Statement Findings and Status (Continued)
Significant Deficiency
2015-02 Upgrade the Accounting System
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. For example, during our audit, we noted that the City was not able
to provide an accounts payable aging report or an alternate report to support the accounts payable
balance in the general ledger 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.
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
The condition still exists in current year.
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.
In assessing and evaluating the operational and financial needs of the City, such as the
referenced accounts payable aging report or an alternate report to support the accounts payable
balance in the general ledger system, management will consider the use of the budgetary process
to cover the cost of vitally needed financial system enhancements.
An intense analysis by the IT Director of the City’s financial system needs, has revealed the
need for a new enterprise resource planning (ERP) software system that can provide integrated
management of the City’s main business processes, to include financial management and
accounting system needs, along with other core business processes for the City.
CITY OF OPA-LOCKA, FLORIDA
SCHEDULE OF FINDINGS AND QUESTIONED COSTS
FOR THE YEAR ENDED SEPTEMBER 30, 2019
- 104 -
Section III – Prior Year - Financial Statement Findings and Status (Continued)
2015-03 Financial Reporting Policies and Procedures Manual and Reconciliation of General
Ledger Accounts to Supporting Documents
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.
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.
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
A similar condition is still applicable for FY 2019.
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).
In addition to developing and updating its existing financial reporting policies and procedures,
the City found it necessary to perform an intense analysis of projected financial system needs
which revealed that the hiring of senior staff with government accounting and financial reporting
experience would begin to strengthen the financial capabilities and reporting reliability of the
Finance Department. It is recommended that the Finance Director and two additional Senior
Accountants would have shared duties in the areas of general ledger accounting, knowledge of
generally accepted accounting principles (GAAP) and financial reporting.
The additional Senior Accountant staff would have the experience and knowledge to be able to
implement procedures that would identify errors and irregularities on a timely basis in the general
ledger and accounting records, and would have the ability to correct such errors on a monthly
basis.
CITY OF OPA-LOCKA, FLORIDA
SCHEDULE OF FINDINGS AND QUESTIONED COSTS
FOR THE YEAR ENDED SEPTEMBER 30, 2019
- 105 -
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 of Condition
The City did not perform complete monthly bank reconciliation.
Potential Effect of Condition
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.
Prior Year Status
The City has reviewed this issue and has voided all stale dated checks through the current period.
The City has developed management review and internal control processes to review and approve
journal entries posted in the general ledger system for voided and stale dated checks.
Current Year Status
This condition is still applicable in current year.
View of Responsible Officials and Planned Corrective Actions
The City has resolved this finding by implementing corrective action that entailed enhancing its policies
and procedure by development an unclaimed property policy to address staled checks. This policy
adheres to the State of Florida Governing Statue – Chapter 717 for Unclaimed Property.
In addition, the City has submitted to the State of Florida staled dated checks that met the abandoned
property criteria for previous years where applicable.
Unclaimed Property is a financial asset that has been left inactive, unclaimed, or abandoned by its
owner; most often consisting of uncashed checks. These unclaimed assets are held by the reporting
entity (City of Opa-locka) for a set period of time, vendor checks are held for five years and payroll
checks are held for a year. If the holder is unable to locate and re-establish contact with the owner, the
asset is reported and remitted to the Florida Department of Financial Services, Bureau of Unclaimed
Property.
CITY OF OPA-LOCKA, FLORIDA
SCHEDULE OF FINDINGS AND QUESTIONED COSTS
FOR THE YEAR ENDED SEPTEMBER 30, 2019
- 106 -
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 of Condition
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.
Potential Effect of Condition
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.
Prior Year Status
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 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).
Current Year Status
The proprietary funds are not being used by the governmental funds for operations, this has been
resolved and significant progress has occurred to spend under budget. In addition, the City
presented their Five-Year Recovery Plan to the State in August 2020, which was approved and
implemented effective fiscal year 2021.
Section IV - Current Year Findings - Federal Award - Major Programs
No current year findings.
CITY OF OPA-LOCKA, FLORIDA
SCHEDULE OF EXPENDITURES OF FEDERAL AWARDS
FOR THE YEAR ENDED SEPTEMBER 30, 2019
- 107 -
Federal Grantor /Pass-Through Grantor/Program Title
Federal CFDA /
CSFA Number
Contract or
Identifying
Number
Total
Expenditures
Special Law Enforcement Funds
U.S. Department of Justice 16.922 $ 58,752
U.S. Department of Treasury 21.016 39,709
Total Special Law Enforcement Funds 98,462
Environmental Protection Agency
Brownfields Assessment and Cleanup Cooperative Agreements 66.818 BF00D321150 65,901
Environmental Protection Agency
Passed-though:
Florida Department of Environmental Protection
Capitalization Grants for Clean Water State Revolving Funds 66.458 CS-12000114-0 684,562
Capitalization Grants For Drinking Water State Revolving Funds 66.468 FS984522-140 5,052
Total Environmental Protection Agency 755,515
TOTAL EXPENDITURES OF FEDERAL AWARDS $ 853,977
CITY OF OPA-LOCKA, FLORIDA
NOTES TO THE SCHEDULE OF EXPENDITURES OF FEDERAL AWARDS
FOR THE YEAR ENDED SEPTEMBER 30, 2019
- 108 -
NOTE 1 GENERAL
The accompanying Schedules of Expenditures of Federal Awards presents the activity of all federal
awards programs of City of Opa-locka, Florida, (the “City”) for the year ended September 30, 2019.
All federal awards expended from federal agencies are included in this Schedule
NOTE 2 BASIS OF PRESENTATION
The accompanying Schedule of Expenditures of Federal Awards include the federal grant activities
of the City and is presented on the accrual basis of accounting. The information in these Schedule
is presented in accordance with the requirements of Title 2 U.S. Code of Federal Regulations Part
200, Uniform Administrative Requirements, Cost Principles, and Audit Requirements for Federal
Awards (Uniform Guidance), Audits of States, Local Governments, and Non-Profit Organizations.
Therefore, some amounts presented in these Schedules may differ from amounts presented in, or
used in the preparation of, the financial statements.
NOTE 3 INDIRECT COST RATE
The City has elected to use the 10 percent de minimus cost rate. However, this has not been applied
to any federal grants.
- 109 -
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, 2019, and have issued our report thereon dated, June 28, 2021.
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, the audit requirements of Title 2 U.S. Code of Federal
Regulations Part 200, Uniform Administrative Requirements, Cost Principles, and Audit Requirements for
Federal Awards (“Uniform Guidance”), and Chapter 10.550, Rules of the Florida Auditor General.
Other Reports and Schedule
We have issued our Independent Auditors’ Report on Internal Control over Financial Reporting and on
Compliance and Other Matters Based on an Audit of the Financial Statements Performed in Accordance with
Government Auditing Standards; Independent Auditors’ Report on Compliance for Each Major Federal
Program; Report on Internal Control over Compliance; Schedule of Findings and Questioned Costs; and
Independent Accountant’s Report 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 Florida Auditor General. Disclosures in those reports and schedule, which are dated, June 28, 2021,
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 financial audit
report. Corrective actions have been taken to address findings and recommendations made in the preceding
annual financial 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 financial statements.
- 110 -
Financial Condition and Management
Sections 10.554(1)(i)5.a. and 10.556(7), Rules of the Auditor General, require us to apply appropriate
procedures and communicate 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 to identify the specific
condition(s) met.
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 Statues. The State of Florida, Office of the
Governor, issued Executive Order 16-135, signed by Florida Governor Rick Scott.
The City submitted its Five-Year Recovery Plan in accordance with Florida Statue, 218.503 (3)(h) in
August 2020.
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 financial report for the City
for the fiscal year ended September 30, 2019, 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, 2019.
Additional Matters
Section 10.554(1)(i)2., Rules of the Auditor General, requires us to communicate noncompliance with
provisions of contracts or grant agreements, or abuse, that have occurred, or are likely to have occurred, that
have an effect on the financial statements that is less than material but warrants the attention of those charged
with governance. Findings are identified in the 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.
Miami, Florida
June 28, 2021
- 111 -
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, 2019. 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, 2019.
Miami, Florida
June 28, 2021