HomeMy Public PortalAboutComprehensive Annual Financial Report Fiscal Year Ended 09-30-2008.tifVILLAGE OF KEY BISCAYNE, FLORIDA
COMPREHENSIVE ANNUAL FINANCIAL REPORT
FISCAL YEAR ENDED SEPTEMBER 30, 2008
Prepared by:
THE FINANCE DEPARTMENT
VILLAGE OF KEY BISCAYNE, FLORIDA
COMPREHENSIVE ANNUAL FINANCIAL REPORT
FISCAL YEAR ENDED SEPTEMBER 30, 2008
TABLE OF CONTENTS
PAGE
I. INTRODUCTORY SECTION
Letter of Transmittal i
Village Officials v
Certificate of Achievement for Excellence in Financial Reporting vi
Organization Chart vii
H. FINANCIAL SECTION
REPORT OF INDEPENDENT CERTIFIED PUBLIC ACCOUNTANTS
MANAGEMENT'S DISCUSSION AND ANALYSIS (Required Supplementary Information)
BASIC FINANCIAL STATEMENTS:
Government -Wide Financial Statements:
Statement of Net Assets
Statement of Activities
Fund Financial Statements:
Governmental Fund Financial Statements:
Balance Sheet
Statement of Revenues, Expenditures and Changes in Fund Balances
Reconciliation of the Statement of Revenues, Expenditures and Changes in
Fund Balances of Governmental Funds to the Statement of Activities
1-2
3-10
11
12
13
14
15
Proprietary Fund Financial Statements:
Statement of Net Assets 16
Statement of Revenues, Expenses and Changes in Net Assets 17
Statement of Cash Flows 18
Fiduciary Fund Financial Statements:
Statement of Fiduciary Net Assets 19
Statement of Changes in Fiduciary Net Assets 20
Notes to Basic Financial Statements 21-44
REQUIRED SUPPLEMENTARY INFORMATION (OTHER THAN MD&A)
Budgetary Comparison Schedule — General Fund 45
Note to Budgetary Comparison Schedule 46
Schedule of Funding Progress 47
Schedule of Employer Contributions 48
VILLAGE OF KEY BISCAYNE, FLORIDA
TABLE OF CONTENTS
PAGE
HI. STATISTICAL SECTION
Net Assets by Component — Last Six Fiscal Years 49
Changes in Net Assets — Last Six Fiscal Years 50-51
Fund Balances of Governmental Funds — Last Six Fiscal Years 52
Changes in Fund Balances of Governmental Funds — Last Six Fiscal Years 53
General Governmental Tax Revenues by Source — Last Ten Fiscal Years 54
Net Assessed Value and Estimated Actual Value of Taxable Property —
Last Ten Fiscal Years 55
Property Tax Rates — Direct and Overlapping Governments — Last Ten Fiscal Years 56
Principal Property Taxpayers — Current and Nine Years Ago 57
Property Tax Levies and Collections — Last Ten Fiscal Years 58
Ratios of Outstanding Debt by Type — Last Ten Fiscal Years 59
Ratios of General Bonded Debt Outstanding — Last Ten Fiscal Years 60
Direct and Overlapping Governmental Activities Debt 61
Pledged Revenue Coverage — Last Ten Fiscal Years 62
Demographic and Economic Statistics — Last Ten Fiscal Years 63
Principal Employers — Current and Nine Years Ago 64
Full -Time Equivalent Village Government Employees by Function —
Last Ten Fiscal Years 65
Operating Indicators by Function/Program — Last Ten Fiscal Years 66
Capital Asset Statistics by Function/Program — Last Ten Fiscal Years 67
IV. COMPLIANCE SECTION
Report of Independent Certified Public Accountants 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
Management Letter in Accordance with the Rules of the Auditor General of the
State of Florida
68-69
70-71
Schedule of Findings and Responses 72-75
INTRODUCTORY SECTION
I-'7,1
VILLAGE OF KEY BISCAYNE
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Robert L. Vernon, _Vino
'Michael Davev, [ r(( _1hij or
Enrique Garcia
Robert Gum -nail
Michael E. hells
Jorge E. AIendt,t
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Genaro "(hip" Iglesias
Office of the Village Manager
July 30, 2009
To the Honorable Mayor, Members of the Village
Council and Citizens of the Village of Key Biscayne:
The Government Finance Officers Association (GFOA) recommends that all
units of local government publish, within six months of the close of each
fiscal year, a complete set of financial statements presented in conformity with
generally accepted accounting principles (GAAP) in the United States and
audited in accordance with auditing standards generally accepted in the United
States and in accordance with Government Auditing Standards by a firm of
licensed certified public accountants. Pursuant to that recommendation, we
hereby issue the comprehensive annual financial report of the Village of Key
Biscayne for the fiscal year ended September 30, 2008.
This report consists of management's representation concerning the finances
of the Village of Key Biscayne. Consequently, management assumes full
responsibility for the completeness and reliability of all of the information
presented in this report. To provide a reasonable basis for making these
representations, management of the Village of Key Biscayne has established a
comprehensive internal framework that is designed both to protect the
Village's assets from loss, theft, or misuse and to compile sufficient reliable
information for the preparation of the Village of Key Biscayne's financial
statements in conformity with GAAP. Because the cost of internal controls
should not outweigh their benefits, the Village of Key Biscayne's
comprehensive framework of internal controls has been designed to provide
reasonable, rather than absolute, assurance that the financial statements will be
free from material misstatement. As management, we assert that, to the best
of our knowledge and belief, this financial report is complete and reliable in
all material respects.
The firm of MarcumRachlin, a division of Marcum LLP, licensed certified
public accountants has audited the Village of Key Biscayne's financial
statements. The goal of the independent audit was to provide reasonable
assurance that the basic financial statements of the Village of Key Biscayne
for the fiscal year ended September 30, 2008 are free of material
misstatement. The independent audit involved examining, on a test basis,
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88 West McIntyre Street • Suite 210 • Key Biscayne, Florida 33149 • (305) 365-5500 • Fax (305) 365-8936
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evidence supporting the amount and disclosures in the financial statements; assessing the
accounting principles used and significant estimates made by management; and evaluating the
overall financial statement presentation. The independent auditor concluded, based upon the
audit, that there was a reasonable basis for rendering an unqualified opinion that the Village of
Key Biscayne's financial statements for the fiscal year ended September 30, 2008, are fairly
presented in conformity with GAAP. The independent auditor's report is presented as the first
component of the financial section of this report.
GAAP requires that management provide a narrative introduction, overview, and analysis to
accompany the basic financial statements in the form of Management's Discussion and Analysis
(MD&A). This letter of transmittal is designed to complement MD&A and should be read in
conjunction with it. The Village of Key Biscayne's MD&A can be found immediately following
the report of the independent certified public accountants.
Profile of the Government
The Village of Key Biscayne, incorporated in 1991, is located on the southern most barrier island
of the United States, Miami -Dade County, Florida approximately 7.5 miles off the coast of
Miami, Florida. The Village of Key Biscayne occupies a land area of 1.25 square miles situated
between Crandon Park and Bill Baggs State Recreation Area. The Village serves a population of
approximately 11,100. The Village of Key Biscayne receives tax levies on real and personal
property located inside its boundaries.
The Village of Key Biscayne has operated under the council-manager form of government since
incorporation. Policymaking and legislative authority are vested in a governing council
consisting of the mayor and six other council members. The Council is responsible among other
things, for passing ordinances and resolutions, adopting the annual budget, appointing the
Village Manager and Village Clerk. The Village Manager is responsible for carrying out the
policies and ordinances of the Council, for overseeing the daily operations of the government,
and for appointing the heads of various departments.
The Village of Key Biscayne offers a wide range of services, including, police protection, fire
and emergency medical service, public works maintenance, a full service building, planning and
zoning department, parks and recreation activities, solid waste collection, and a comprehensive
storm water management system. Certain services are provided through the County School
System and the County Library System through Miami -Dade County.
The annual budget serves as a foundation for the Village of Key Biscayne's financial planning
and control. All departments of the Village are required to submit requests for appropriations to
the Village Manager and these requests are the initiation of developing the proposed budget. The
Village Manager then presents this proposed budget to the Council for review. The Council is
required to hold public hearings on the proposed budget and to adopt a final budget no later than
September 30, the close of the Village's fiscal year. The appropriated budget is prepared by fund
and department. No department may legally expend in excess of the amount appropriated for
that department within an individual fund. The Village Manager may make transfers of
appropriations within a department. Transfers of appropriations between departments or funds
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require the approval of the Village Council. The Village Council approves supplemental
appropriations. Budget to actual comparisons are provided in this report for the general fund for
which an appropriated annual budget has been adopted. The general fund, budget to actual
report, is presented in the required supplemental information section of this report.
Local Economy
The Village of Key Biscayne enjoys a favorable economic environment and local indicators to
continued future stability. This exclusive community is comprised of well-educated and involved
citizens who take a genuine interest in the social, business, cultural and governing aspects of
their Village. The Village is comprised of affluent exclusive residential housing stock and three
major shopping centers. There is no industrial area in the community.
Long -Term Financial Planning
The Village has completed drainage improvements on Woodcrest, Buttonwood and Harbor
Drives, as well as, Phase Three of the Crandon Blvd Improvement Project. Several public works
projects have also been completed recently. Another major capital asset includes the completion
of the Monaco Fountain. Among continuing programs is the Villages Beach Renourishment
program.
The Village utilizes a comprehensive living projection five years into the future to assess revenue
trends and expenditure needs to assure a balanced stable financial program avoiding milage rate
increases while addressing the various goals and objectives of the community. Additionally, the
Village has been modifying its 5 -Year Capital Planning by prioritizing needs based on its
expected available resources determined by its 5 -Year financial forecast. This effort is also
identifying capital purchases that will be needed to continue its critical core public safety
services, as well as, other departmental needs.
Cash Management Policies and Practices
The Village's Cash Management strategy emphasizes immediate funds collection and deposit
into the appropriate fund utilizing ACH debit or wire transfer methods in over 90% of all funds
received. Cash is transferred to a centralized clearing account for all payments at the point of
payment. The clearing account maintains a zero balance exclusive of these transfers. Currently,
the Village's investment policy follows Chapter 218, Florida Statutes. Cash in any of the fund's
operating accounts are swept into an overnight repurchase agreement, properly collateralized in
accordance with Chapter 280, Florida statutes. Surplus cash is invested in certificates of deposit
with qualified depositories, and with the State Board of Administration. Investment objectives
are the preservation of principal, liquidity in accordance with planned cash flows, and return on
investment in that order.
Risk Management
The Village is exposed to various risks of loss related to torts, theft of or damage to and
destruction of assets; errors and omissions; injuries to employees; and natural disasters. The
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Village participates in the Florida League of Cities Municipal Insurance Trust for workers'
compensation, liability and property insurance. Flood insurance is provided by the Florida State
Flood Insurance Pool.
Pension Benefits
The Village of Key Biscayne sponsors a defined contribution 401(a) pension plan with the
International City Managers' Association, Retirement Corporation (ICMA). Each full time
employee can contribute up to six percent (6%) of his or her pay to the plan; the Village
contributes twelve percent (12%). In addition, the Village sponsors a 457 deferred compensation
plan in which the employees may contribute on a voluntary basis.
A defined benefit pension plan is available to all firefighters and sworn police officers. This plan
is under the direction of a separate board of trustees, two of which are police and fire department
employees. Complete details of this plan can be found in Note 13 of the basic financial
statements.
Awards and Acknowledgements
The Government Finance Officers Association (GFOA) awarded a Certificate of Achievement
for Excellence in Financial Reporting to the Village of key Biscayne for its Comprehensive
Annual Financial Report (CAFR) for the fiscal year ended September 30, 2007. This was the
sixteenth consecutive year that the Village received this prestigious award. In order to be
awarded a Certificate of Achievement, the government published an easily readable and
efficiently organized CAFR. This report satisfied both GAAP and applicable legal requirements.
A Certificate of Achievement is valid for a period of one year only. We believe that our current
CAFR continues to meet the Certificate of Achievement Program's requirements and are
submitting it to the GFOA to determine its eligibility for another certificate.
The preparation of this report would not have been possible without the efficient and dedicated
services of the entire staff of all departments of the Village of Key Biscayne. We would like to
express our appreciation to all members of all of the departments who assisted and contributed to
the preparation of this report. We would also like to express our appreciation to MarcumRachlin,
a division of Marcum LLP, our independent auditors, for their assistance and efforts in helping
the Village prepare the CAFR. Appreciation is also extended to the Mayor and the Village
Council for their unfailing support for maintaining the highest standards of professionalism in
the management of the Village of Key Biscayne's finances.
Respect ly submitted,
Genaro "Chip"' Iglesia
Village Manager
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VILLAGE OF KEY BISCAYNE, FLORIDA
VILLAGE OFFICIALS
SEPTEMBER 30, 2008
VILLAGE COUNCIL
Robert Vernon, Mayor
Michael Davey, Vice -Mayor
Jorge Mendia
Enrique Garcia
Robert Gusman
Thomas Thornton
Michael E. Kelly
VILLAGE MANAGER
Genaro "Chip" Iglesias
VILLAGE CLERK
Conchita H. Alvarez, CMC
VILLAGE ATTORNEY
Weiss Serota Helfman Pastoriza Cole & Boniske, P.A.
FINANCE DIRECTOR
Beatrice Galeano, P.A.
VILLAGE AUDITORS
MarcumRachlin, a division of Marcum LLP
Accountants • Advisors
-v-
Certificate of
Achievement
for Excellence
in Financial
Reporting
Presented to
Village of Key Biscayne
Florida
For its Comprehensive Annual
Financial Report
I'or the Fiscal Year Ended
September 30, 2007
A Certificate of'Achievement for Excellence in Financial
Reporting is presented by the Government Finance Officers
Association of the United States and Canada to
government units and public employee retirement
systems whose comprehensive annual financial
reports (CAFRs) achieve the highest
standards in government accounting
anti financial reporting.
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President
deA94.,
Executive Director
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VOTERS OF
KEY BISCAYNE
Village
Council
Local Planning
Agency
Village Clerk
Special Master
Village Manager
Village Attorney
Executive Asst
to the
Manager
I
Police/Fire
Retirement
Board
Department of
Building,
Zoning and
Planning
Building
Zoning
Planning
Code Assistance
Public Safety
Department
Fire Rescue
Police
Department of
Parks and
Recreation
Special Events
Sports and
Athletics
Programs
and Tours
Senior
Coordinator
Department of
Public
Works
Village Engineer
Contract
Supervisor
Storm water
Management
Refuse
Collection
and Recycling
Maintenance
Department of
Finance and
Administrative
Services
Finance/
Accounting
Personnel/
Benefits
Risk
Management
FINANCIAL SECTION
REPORT OF INDEPENDENT
CERTIFIED PUBLIC ACCOUNTANTS
MARCUM
RACH LI N
ACCOUNTANTS • ADVISORS
REPORT OF INDEPENDENT CERTIFIED PUBLIC ACCOUNTANTS
Honorable Mayor, Village Council and Village Manager
Village of Key Biscayne, 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 Village of Key Biscayne,
Florida (the Village) as of September 30, 2008 and for the fiscal year then ended, which collectively
comprise the Village's basic financial statements as listed in the table of contents. These financial
statements are the responsibility of the Village's management. Our responsibility is to express opinions
on these financial statements based on our audit.
We conducted our audit in accordance with auditing standards generally accepted in the United States
and the standards applicable to financial audits contained in Government Auditing Standards, issued by
the Comptroller General of the United States. Those standards require that we plan and perform the audit
to obtain reasonable assurance about whether the financial statements are free of material misstatement.
An audit includes consideration of internal control over financial reporting as a basis for designing audit
procedures that are appropriate in the circumstances, but not for the purposes of expressing an opinion on
the effectiveness of the Village's internal control over financial reporting. Accordingly, we express no
such opinion. An audit also includes examining, on a test basis, evidence supporting the amounts and
disclosures in the financial statements, assessing the accounting principles used and significant estimates
made by management, as well as evaluating the overall financial statement presentation. We believe that
our audit provides a reasonable basis for our opinions.
In our opinion, the financial statements referred to above present fairly, in all material respects, the
respective financial position of the governmental activities, the business -type activities, each major fund
and the aggregate remaining fund information of the Village of Key Biscayne, Florida as of September 30,
2008 and the respective changes in the financial position and cash flows, where applicable, thereof for
the year then ended, in conformity with accounting principles generally accepted in the United States.
In accordance with Government Auditing Standards, we have also issued a report dated July 29, 2009 on
our consideration of the Village's internal control over financial reporting and our tests of its compliance
with certain provisions of laws, regulations, contracts, and grant agreements and other matters. The
purpose of that report is to describe the scope of our testing of internal control over financial reporting
and compliance and the results of that testing, and not to provide an opinion on the internal control over
financial reporting or on compliance. That report is an integral part of an audit performed in accordance
with Government Auditing Standards and should be considered in assessing the results of our audit.
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MARCUMGROUP
MEMBER
MarcumRachlin a division of Marcum LLP ■ marcumrachlin.com
One Southeast Third Avenue • Tenth Floor • Miami, Florida 33131 • Phone 305.377.4228 • Fax 305.377.8331
FLORIDA • NEW YORK • NEW JERSEY • CONNECTICUT • GRAND CAYMAN
Honorable Mayor, Village Council and Village Manager
Village of Key Biscayne, Florida
Page Two
Management's Discussion and Analysis and the required supplementary information on pages 3 through
10 and pages 45 through 48, respectively, are not a required part of the basic financial statements but are
supplementary information required by accounting principles generally accepted in the United States.
We have applied certain limited procedures, which consisted principally of inquiries of management
regarding the methods of measurement and presentation of the required supplementary information.
However, we did not audit the information and express no opinion on it.
Our audit was conducted for the purpose of forming opinions on the financial statements that collectively
comprise the Village of Key Biscayne's basic financial statements. The introductory section and
statistical tables are presented for purposes of additional analysis and are not a required part of the basic
financial statements. The introductory section and statistical tables have not been subjected to the
auditing procedures applied in the audit of the basic financial statements and, accordingly, we express no
opinion on them.
7ii,....... 44e.....,.
a division of Marcum LLP
Miami, Florida
July 29, 2009
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MARCUM
RACH LI N
ACCOUNTANTS • ADVISORS
A division of Marcum LLP
MANAGEMENT'S DISCUSSION AND ANALYSIS
(MD&A)
Management's Discussion and Analysis
As Management of the Village of Key Biscayne, we offer readers of the Village of Key Biscayne's
(the Village) financial statements this narrative overview and analysis of the financial activities of the
Village of Key Biscayne for the fiscal year ended September 30, 2008. We encourage readers to
consider information presented here in conjunction with additional information that we have furnished
in our letter of transmittal which can be found on pages i-v of this report.
Financial Highlights
• The assets of the Village of Key Biscayne exceeded its liabilities at the close of the most recent
fiscal year by $55,313,241 (net assets).
• The Village's total net assets increased by $11,441,764, this increase is attributable to the increase
of property taxes received due to an increase in the assessed taxable values of properties in the
Village, increases in revenues from the Key Biscayne Community Center programs and increased
code compliance activities.
• At the close of the current fiscal year, the Village of Key Biscayne's governmental funds reported
an ending fund balance of $13,379,777, an increase of $3,031,804 in comparison with the prior
year. The total amount of fund balance is either reserved or designated for spending at the
Council's direction.
• The Village incurred $5,000,000 of new debt (short-term note payable) during the current fiscal
year.
Overview of the Financial Statements
This discussion and analysis are intended to serve as an introduction to the Village of Key Biscayne's
basic financial statements. The Village of Key Biscayne's basic financial statements comprise three
components: 1) government -wide financial statements, 2) fund financial statements, and 3) notes to the
financial statements. This report also contains required supplementary information in addition to the
basic financial statements themselves.
Government -wide financial statements. The government -wide financial statements are designed to
provide readers with a broad overview of the Village of Key Biscayne's finances, in a manner similar
to a private sector business.
The statement of net assets presents information on all of the Village of Key Biscayne's assets and
liabilities, with a difference between the two reported as net assets. Over time, increases or decreases
in net assets may serve as a useful indicator of whether the financial position of the Village of Key
Biscayne is improving or deteriorating.
The statement of activities presents information showing how the government's net assets changed
during the most recent fiscal year. All changes in net assets are reported as soon as the underlying
event giving rise to the change occurs, regardless of the timing of related cash flows. Thus, revenues
and expenses are reported in this statement for some items that will only result in cash flows in future
periods (e.g., uncollected taxes and earned but unused vacation leave).
Both of the government -wide financial statements distinguish functions of the Village of Key Biscayne
that are principally supported by taxes and intergovernmental revenues (governmental activities) from
other functions that are intended to recover all or a significant portion of their costs through user fees and
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charges (business -type activities). The governmental activities of the Village of Key Biscayne include
general government, police, public works, building planning & zoning, fire and parks and recreation.
The government -wide financial statements include only the Village of Key Biscayne itself (known as
the primary government).
The government -wide financial statements can be found on pages 11 and 12 of this report.
Fund Financial Statements. A fund is a grouping of related accounts that is used to maintain control
over resources that have been segregated for specific activities or objectives. The Village of Key
Biscayne, like other state and local governments, uses fund accounting to ensure and demonstrate
compliance with finance -related legal requirements. The Village of Key Biscayne has two fund
categories, the governmental funds and the 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. However, unlike the
government -wide financial statements, governmental fund financial statement focus on near -term
inflows and outflows of spend able resources as well as on balances of spend able 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 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 this
comparison between governmental funds and governmental activities.
The Village of Key Biscayne maintains three governmental funds, the general fund, a special revenue
fund and a capital projects fund.
The Village of Key Biscayne adopts an annual appropriated budget for its general fund. A budgetary
comparison statement has been provided for the general fund to demonstrate compliance with this budget.
The basic governmental fund financial statements can be found on pages 13 to 15 of this report.
Proprietary Funds. The Village maintains one type of proprietary fund. Enterprise funds are used to
report the same functions presented as business -type activities in the government -wide financial
statements. The Village uses enterprise funds to account for its Stormwater, Solid Waste Collection
and Sanitary Sewer Construction operations.
The basic proprietary fund financial statements can be found on pages 16-18 of this report.
Fiduciary Funds. Fiduciary funds are used to account for resources held for the benefit of parties
outside the Village. Fiduciary funds are not reflected in the government -wide financial statements
because the resources of those funds are not available to support the Village's own programs. The
accounting used for fiduciary funds is much like that used for proprietary funds.
The basic fiduciary fund financial statements can be found on pages 19-20 of this report.
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Notes to the basic financial statements. The notes provide additional information that is essential to
a full understanding of the data provided in the government -wide and fund financial statements. The
notes to the financial statements can be found on pages 21 to 44 of this report.
Other Information
In addition to the basic financial statements and accompanying notes, this report also presents certain
required supplementary information including budgetary comparisons and the Village's progress in
funding its obligation to provide pension benefits to its employees.
Required supplementary information can be found on pages 45 to 48 of this report.
Government -wide Financial Analysis
As noted earlier, net assets may serve over time as a useful indicator of a government's financial
position. In the case of the Village's, assets exceeded liabilities by $55,313,241 at the close of the
most recent fiscal year.
A portion of the Village's assets, $86,055,808 or 83.04%, reflects its investment in capital assets (e.g.,
land and equipment). The Village of Key Biscayne uses these capital assets to provide services to
citizens; consequently, these assets are not available for future spending.
Our analysis of the financial statements of the Village begins below. The Statement of Net Assets and
the Statement of Activities report information about the Village's activities that will help answer
questions about the position of the Village. A comparative analysis is provided.
Governmental Activities. Governmental activities increased the Village of Key Biscayne fund
balances by approximately $6,415,130. This net overall increase was attributable to an increase in
property tax revenues due to increased assessed values of Key Biscayne real estate in general and
increased code enforcement activities. All other governmental activities increased fund balance as
follows:
• Property taxes increased by $1,383,260 (7.41 percent) during the year. Most of this increase is
the product of a minor number of new units completed and on the tax roll for the first time, along
with renovated homes with increased assessed values, and residential and commercial resales.
• Most department salaries increased 9 percent due to the Village's salary step program, which in
fiscal year 2008 reflected a 5 percent increase in salaries and a 3 percent increase for a cost of
living increase. The fire department salaries increase 10 percent due to labor negotiations.
• Debt service remained fairly level compared to the prior year, with a minor addition for interest
on new debt in the prior year.
For the most part, increases in expenses closely paralleled inflation and growth in the scope of
services.
Net Assets
A summary of the Village's net assets is presented in Table A-1 and a summary of the changes in net
assets is presented in Table A-2.
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Table A - I
Summary of Net Assets
Current assets
Capital assets, net
Total assets
Current liabilities
Noncurrent liabilities
Investment in capital assets,
net of related debt
Restricted
Unrestricted
Total net assets
Governmental Activities Business -type Activities
2008
$15,152,443
70,341,556
85,493,999
4,026,890
34,118,516
2007 2008 2007
$13,162,063 $ 3,522,363 $ 510,553
67,505,258 15,714,252 8,414,889
80,667,321 19,236,615 8,925,442
5,002,055 6,116,628 447,508
35,527,705 5,155,339 5,539,920
36,139,953 31,422,358
284,639 261,813
10,924,001 8,453,390
$ 47,348,593
Revenues:
Program revenues:
Charges for services
Operating grants and contributions
Capital grants and contributions
General revenues:
Property taxes
Utility taxes
Franchise fees
Unrestricted intergovernmental revenue
Investment income and
miscellaneous
Total revenues
Expenses:
General government
Public safety
Parks and recreation
Public works
Building, zoning and planning
Interest on long-term debt
Stormwater
Solid waste collection
Sanitary sewer construction
Total expenses
Changes in net assets before transfers
Transfers
Changes in net assets after transfers
Net assets, beginning, as previously reported
Prior period adjustment
Net assets, beginning, as restated
Net assets, ending
$ 40,137,561
10,174,333 2,505,881
(2,209,685) 432,133
$ 7,964,648 $ 2,938,014
Table A - 2
Summary of Changes in Net Assets
Governmental Activities
2008 2007
Total
2008 2007
$18,674,806
86,055,808
104,730,614
$13,672,616
75,920,147
89,592,763
10,143,518 5,449,563
39,273,855 41,067,625
46,314,286
284,639
8,714,316
33,928,239
261,813
8,885,523
$ 55,313,241 $ 43,075,575
Business -type Activities
2008 2007
$ 3,234,686 $ 3.060,790 $ 1.029.904 $ 1,030,221
251.180 799,493 -
20,051,239
2,760,802
1,064,666
2.265.243
18.667.979
2.231.193
1.113.194
1,000.265
346.531 641.115
29,974,347 27.514,029
3,213,273 3.781.396
11,672.048 9,909,449
3.633.233 3.077.624
2,046.776 1,589,444
1.529.272 1,447,968
1.436,481 1,505,253
23.531.083 21.311.134
6,443,264
(28.134)
6.202.895
(28,133)
6,415.130 6.174.762
40,137,561
795.902
40,933,463
$ 47,348,593
33,962,799
33,962,799
$ 40,137,561
5,460,763
Total
2008 2007
$ 4.264.590 $ 4,091,011
251.180 799.493
5.460.763
20.051,239
2.760.802
1,064,666
2.265.243
18,667,979
2,231,193
1.113.194
1,000,265
48,202 49,086 394,733 690,201
6.538,869
1.079,307 36.513,216 28.593.336
911,500 693,135
619,823 571,246
9.046 9,454
1.540,369 1,273,835
4,998,500 (194,528)
28.134 28.133
5,026,634 (166,395)
2,938.014 3,104,409
2.938.014
$ 7,964,648
3,104,409
$ 2,938,014
3.213.273 3,781,396
11,672,048 9.909,449
3.633.233 3.077.624
2,046,776 1,589,444
1.529.272 1,447,968
1,436,481 1,505,253
911,500 693,135
619,823 571,246
9,046 9,454
25,071.452 22,584,969
11,441,764 6,008,367
11,441,764 6,008,367
43,075.575 37,067,208
795,902
43,871.477
$55,313,241
37,067,208
$ 43,075,575
The Village's net assets increased by $11,237,666 during the current fiscal year. This increase represents
the results of operations for a full 12 -month period with no capital contributions from outside sources.
-6-
Business -type Activities
Business -type activities increased the Village's net assets by $5,026,634.
• In fiscal 2008, one of the three business -type activities reflected operational profits.
• The Stormwater Utility Fund reflected a net loss of $376,824, due mainly to depreciation expense
in the amount of $273,919. Also reflected in this loss is an increase in General and
Administrative expenses due to extensive maintenance performed on the stormwater.
• The Solid Waste Collection Fund reported a net loss of $87,278, due mainly to increased
contractual costs.
• The Sanitary Sewer Construction Fund is has resumed construction activity which is currently in
progress.
Governmental Activities
Charges for Services
$3,234,686
11%
Intcrgoierrmental
$960,045
3%
L tility Taxes
$2,458,387
9%
Franchise Fees
51,064,666
4%
Revenues by Sources - Governmental Activities
Operating Grarts
and Contributions
$251,130
1%
Investment Earnings
$223,907
1%
Other
$8,003
Ad Valorem Taxes
520,1351.239
71%
Building, Zoning
and Planning
$1,529,272
7%
Parks and
Recreation
$3,633,233
15"/0
Fire
$6,399,665
27%
Program Expenses
Interest on Long
Term Debt
$1,436,481
6%
General
Government
$3,213,273
14%
Public Works
$2,046,775
Police
$5,272,383
22%
-7-
Business -type Activities
Revenues- Business Type Activities
Solid Waste Charges
5530,803
8%
Sanitary Sewer
S5,46D,76
84%
Stormwater Charges
5499 101
8%
As noted earlier, the Village of Key Biscayne uses fund accounting to ensure and demonstrate compliance with
finance -related legal requirements.
Governmental funds. The focus of the Village of Key Biscayne's governmental funds is to provide
information on near -term inflows, outflows, and balances of spend able resources. Such information is useful in
assessing the Village's financing requirements.
At the end of the current fiscal year, fund balance of the general fund was $11,298,178, an increase of
$1,422,762 in comparison with the prior year. The increase was primarily caused by an increase in property
values of 7.32% All of this is either reserved or designated for specific uses: (1) emergencies ($4,000,001), (2)
Building Inspection Costs ($554,819), (3) Compensated Absences ($595,916), (4) Law Enforcement Seizures
($284,639), (5) Playing Field Acquisitions ($416,403), (6) Fire Rescue Transport Fees ($171,839), (7) Working
Capital Reserves ($1,000,000), (8) Police/Administration Building Reserve ($13,632), (9) Fire Station Building
-8-
Reserve ($13,632), (10) Community Center Equipment Reserve ($50,000), (11) Fire Vehicles Replacement
Reserve ($50,000), (12) Master Plan Initiatives ($1,873,764), (13) Capital Lease ($298,682), (14) Prepaid Items
($261,373), (15) Roadway Improvements ($175,000), (16) Recreation Facilities ($300,000), (17) Capital
Improvement Plan ($1,130,089) and (18) Fire Rescue Reserve - Urban Area Security Initiative (UASI)
($18,389) and (19) Police Labor ($90,000).
The general fund is the chief operating fund of the Village of Key Biscayne. As a measure of the general fund's
liquidity, it may be useful to compare total fund balance to total fund expenditures. Total fund balance
represents 41.92 percent of total general fund expenditures.
A summary of the general fund's condensed balance sheet and statement of revenues, expenditures and changes
in fund balance is presented in Table B-1 and B-2 for September 30, 2008 and 2007, is shown as follows:
Table B-1
Summary of Condensed Balance Sheet
2008 2007
Total assets $12,794,042 $11,623,098
Total liabilities
Reserved or designated fund balance
Total liabilities and fund balance
$ 1,495,864 $ 1,747,682
11,298,178 9,875,416
$ 12,794,042 $11,623,098
Table B-2
Summary of Condensed Statement of Revenues,
Expenditures and Changes in Fund Balances
Total revenues
Total expenditures
Excess of revenues over expenditures
2008 2007
$28,252,113 $ 26,592,900
22,389,637 20,686,819
$ 5,862,476 $ 5,906,081
The Special Revenue Fund was established to account for the construction and future maintenance of
the Village's roadways. Bond revenue is the source of funding for construction of roadways, while the
local option gas tax funds maintenance and the transportation surtax funds debt service.
At present, the fund shows a negative fund balance due to phase three of the Crandon Boulevard
Improvement Project, which was to be corrected with the Series 2006 Roadway Improvement Revenue
Bonds, issued in late December 2006. The remainder of the negative fund balance will be eliminated
with receipt of the County bridge toll revenues and State XOXO and FDOT funds receipts.
The Capital Improvement Fund receives an annual budgeted transfer from the general fund to fund
capital construction of infrastructure at various locations on the island. All transfers are allocated to
specific projects by management and the council during the annual budgeting process. The fund
balance increased by $1,828,470 during the current fiscal period. Fund balance is comprised of funds
allocated to named projects with varied stages of completion.
-9-
General Fund Budgetary Highlights
There were three departments with significant budget to actual variances: Village Attorney, Fire and, Parks and
Recreation. These variances were cause by the following:
• Attorney - excess code enforcement litigation in addition to negotiations with both police and fire unions
• Fire — approval of the collective bargaining agreement with the fire union. As a result, all related
salaries/benefits were made whole retroactively from fiscal year 2006 through fiscal year 2008.
• Parks and Recreation - the acquisition of the sports program (Key Biscayne Athletic Club).
Capital Assets
As of September 30, 2008, the Village's capital assets net of accumulated depreciation amounted to
$86,055,808. The total increase in capital assets for the fiscal year was as follows:
Major capital asset events during the fiscal year included the following:
• Completion of drainage improvements on Woodcrest, Buttonwood and Harbor Drives.
• Completion of the Crandon Blvd Improvement. Project, phase three
• Continuation of the Beach Renourishment program
• Completion of the Monaco Fountain
Additional information on the Village's capital assets can be found in Note 7 on pages 31-32 of this report.
Debt Administration
At September 30, 2008, the Village had bonded debt outstanding of $39,527,729. Of this amount, $7,046,131
represents bonds secured solely by specified revenue sources (Transportation Tax Revenue Bonds and Road
Improvement Revenue Bonds). The remainder is special obligation bonds that are secured by non -ad Valorem
revenues through covenants to budget and appropriate.
The Village's total net debt outstanding increased by $5,000,000 due to the short-term additional borrowing
required for the Sewer Project construction.
Additional information on the Village's long-term debt can be found in Note 9 on pages 33-38 of this report.
Economic Factors and Next Year's Budgets and Rates
• The unemployment rate for Miami -Dade County is currently 5.9 percent, which is an increase from a rate
of 4.2 percent a year ago. This is favorable to the state's average unemployment rate of 10.2 percent as
well as the national average rate of 9.5 percent. The Village's average rate is current at 3.1 percent, a
decrease from a rate of 3.2 percent a year ago.
• The occupancy rate of the Village's retail rentals has remained stable for the past several years.
• Inflationary trends in the region compare favorably to national indices.
All of these factors were considered in preparing the Village of Key Biscayne's budget for the 2009 fiscal year.
Requests for Information
This financial report is designed to provide a general overview of the Village of Key Biscayne's finances for all
those with an interest in the government's finances. Questions concerning any of the information provided in
this report or requests for additional financial information should be addressed to the Office of the Village
Manager, 88 West McIntyre Street, Key Biscayne, Florida 33149
-10-
BASIC FINANCIAL STATEMENTS
VILLAGE OF KEY BISCAYNE, FLORIDA
STATEMENT OF NET ASSETS
SEPTEMBER 30, 2008
ASSETS
Cash and cash equivalents
Receivables, net
Prepaids
Internal balances
Negative net pension obligation
Other assets
Restricted assets:
Cash and cash equivalents
Investments
Capital assets not being depreciated
Capital assets being depreciated, net
Total assets
LIABILITIES
Accounts payable and accrued liabilities
Accrued interest payable
Payable to pension plan
Unearned revenue
Deposits
Short-term revenue note payable
Noncurrent liabilities:
Due within one year
Due in more than one year
Total liabilities
NET ASSETS
Invested in capital assets, net of related debt
Restricted for law enforcement
Unrestricted
Total net assets
Governmental
Activities
$ 9,358,864
2,872,081
261,373
2,126,133
121,512
20,769
65,633
326,078
34,685,349
35,656,207
85,493,999
745,690
328,080
566
561,714
20,000
2,370,840
34,118,516
38,145,406
36,139,953
284,639
10,924,001
$ 47,348,593
See notes to basic financial statements.
-11-
Business-
type
Activities
Total
$ 2,601,072 $ 11,959,936
3,047,424 5,919,505
- 261,373
(2,126,133)
8,662,321
7,051,931
19,236,615
121,512
20,769
65,633
326,078
43,347,670
42,708,138
104,730,614
702,889 1,448,579
- 328,080
- 566
29,159 590,873
20,000
5,000,000 5,000,000
384,580 2,755,420
5,155,339 39,273,855
11,271,967 49,417,373
10,174,333
(2,209,685)
$ 7,964,648
46,314,286
284,639
8,714,316
$ 55,313,241
VILLAGE OF KEY BISCAYNE, FLORIDA
STATEMENT OF ACTIVITIES
FISCAL YEAR ENDED SEPTEMBER 30, 2008
Functions/Programs
Governmental activities:
General government
Public works
Police
Fire
Parks and recreation
Building, zoning and planning
Interest on long-term debt
Total governmental activities
Business -type activities:
Stormwater
Solid waste
Sanitary sewer
Total business -type activities
Total
Charges
for
Expenses Services
$ 3,213,273
2,046,776
5,272,3 83
6,399,665
3,633,233
1,529,272
1,436,481
23,531,083
911,500
619,823
9,046
1,540,369
$ 25,071,452
Program Revenues
Operating Capital
Grants and Grants and
Contributions Contributions
$ 1,320,004 $ 18,967 $
232,213
14,203
146,588
1,620,787
133,104
3,234,686
499,101
530,803
1,029,904
$ 4,264,590
251,180
5,460,763
5,460,763
$ 251,180 $ 5,460,763
General revenues:
Property taxes
Franchise fees based on gross receipts
Utility taxes
Communications services tax
Unrestricted intergovernmental revenue
Unrestricted investment earnings
Transfers
Total general revenues
Change in net assets
Net assets - beginning, as previously reported
Prior period adjustment (see Note 16)
Net assets - beginning, as restated
Net assets, ending
See notes to basic financial statements.
-12-
Governmental
Activities
$ (1,874,302) $
(1,814,563)
(5,258,180)
(6,253,077)
(2,012,446)
(1,396,168)
(1,436,481)
(20,045,217)
Net (Expense) Revenue and
Changes in Net Assets
Business -
type
Activities
(412,399)
(89,020)
5,451,717
4,950,298
(20,045,217) 4,950,298
20,051,239
1,064,666
1,534,379
1,226,423
2,265,243
346,531
(28,134)
48,202
28,134
26,460,347 76,336
6,415,130 5,026,634
40,137,561 2,938,014
795,902
40,933,463
$ 47,348,593
2,938,014
$ 7,964,648
Total
$ (1,874,302)
(1,814,563)
(5,258,180)
(6,253,077)
(2,012,446)
(1,396,168)
(1,436,481)
(20,045,217)
(412,399)
(89,020)
5,451,717
4,950,298
(15,094,919)
20,051,239
1,064,666
1,534,379
1,226,423
2,265,243
394,733
26,536,683
11,441,764
43,075,575
795,902
43,871 ,477
$ 55,313,241
VILLAGE OF KEY BISCAYNE, FLORIDA
BALANCE SHEET
GOVERNMENTAL FUNDS
SEPTEMBER 30, 2008
ASSETS
Cash and cash equivalents
Receivables, net
Due from other governments
Due from other funds
Prepaid items
Restricted cash and cash equivalents
Restricted investments
Total assets
LIABILITIES AND FUND BALANCES
Liabilities:
Accounts payable and accrued liabilities
Due to other funds
Payable to pension plan
Deposits
Deferred revenue
Total liabilities
Special
General Revenue
Capital
Improvements
Total
Governmental
Funds
$ 4,398,777 $ - $ 4,960,087 $
1,038,366 833,715
1,000,000
6,769,448
261,373
326,078
65,633
$ 12,794,042 $ 1,899,348
$ 538,185 $ 3,514
72,984 4,597,457
566
20,000
864,129
455,954
5,416,041
9,358,864
1,872,081
1,000,000
7,225,402
261,373
65,633
326,078
$ 20,109,431
$ 203,991 $
428,828
1,495,864 4,600,971 632,819
Fund balances:
Reserved (Note 12) 11,298,178
Unreserved, undesignated reported in:
Special revenue fund - (2,701,623)
Capital improvements - - 4,783,222
Total fund balances (deficit) 11,298,178 (2,701,623) 4,783,222
Total liabilities and fund balances $ 12,794,042 $ 1,899,348 $ 5,416,041
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 funds
A negative net pension obligation (NPO) is not considered to represent a financial
asset and therefore is not reported in the governmental funds
Long-term receivables are not available to pay for current period
expenditures and, therefore, are not reported in the funds
Long-term liabilities, including bonds payable, are not due and payable in the current
period and therefore not reported in the funds
Net assets of governmental activities
See notes to basic financial statements.
-13-
745,690
5,099,269
566
20,000
864,129
6,729,654
11,298,178
(2,701,623)
4,783,222
13,379,777
70,341,556
121,512
302,415
(36,796,667)
$ 47,348,593
VILLAGE OF KEY BISCAYNE, FLORIDA
STATEMENT OF REVENUES, EXPENDITURES AND CHANGES IN FUND BALANCES
GOVERNMENTAL FUNDS
FISCAL YEAR ENDED SEP I'EMBER 30, 2008
Revenues:
Property taxes
Utility taxes
Communications services tax
Franchise fees
Licenses and permits
Intergovernmental
Charges for services
Interest
Grants
Other income
Total revenues
Expenditures:
Current:
General government
Fire
Police
Public works
Building, zoning and planning
Parks and recreation
Capital outlay
Debt service:
Principal
Interest and fiscal charges
Total expenditures
Excess (deficiency) of revenues
over expenditures
Other financing sources (uses):
Transfers in
Transfers out
Total other financing
sources (uses)
Net change in fund balances
Fund balances (deficit), beginning,
as previously reported
Prior period adjustment (see Note 16)
Fund balances (deficit), beginning, as restated
Fund balances (deficit), ending
Special
General Revenue
$ 20,051,239 $
1,534,379
924,008
1,064,666
1,240,290
960,045 1,305,198
1,994,396
223,907 1,621
251,180
8,003
28,252,113 1,306,819
2,329,647
5,744,775
4,863,765
1,720,689
1,513,019
3,335,004
357,329
1,379,605
1,145,804
1,927,088
300,386
298,772
22,389,637 2,526,246
Capital
Improvements
113,000
113,000
32,634
2,459,379
2,492,013
5,862,476 (1,219,427) (2,379,013)
(4,561,228)
(4,561,228)
1,301,248 (1,219,427)
9,875,416 (2,482,196)
121,514 1,000,000
9,996,930 (1,482,196)
Total
Governmental
Funds
$ 20,051,239
1,534,379
924,008
1,064,666
1,240,290
2,265,243
1,994,396
338,528
251,180
-8,003
29,671,932
2,329,647
5,744,775
4,863,765
1,720,689
1,513,019
3,367,638
4,743,796
1,679,991
1,444,576
27,407,896
2,264,036
4,533,094 4,533,094
(4,561,228)
4,533,094 (28,134)
2,154,081 2,235,902
2,954,753 10,347,973
(325,612) 795,902
2,629,141 11,143, 875
$ 11,298,178 $ (2,701,623) $ 4,783,222 $ 13,379,777
See notes to basic financial statements.
-14-
VILLAGE OF KEY BISCAYNE, FLORIDA
RECONCILIATION OF THE STATEMENT OF REVENUES, EXPENDITURES AND CHANGES IN
FUND BALANCES OF GOVERNMENTAL FUNDS TO THE STATEMENT OF ACTIVITIES
FISCAL YEAR ENDED SEPTEMBER 30, 2008
Amounts reported for governmental activities in the statement of activities
(Page 12) are different because:
Net change in fund balances - total governmental funds (Page 14) $ 2,235,902
Governmental funds report capital outlays as expenditures. However, in the
statement of activities, the cost of those assets is allocated over their
estimated useful lives and reported as depreciation expense. This is the
amount by which capital outlays exceeded depreciation in the current period.
The details of the difference are as follows:
Capital outlay
Depreciation expense
Net adjustment
Under the modified accrual basis of accounting used in the governmental funds,
revenues are not recognized until funds are measurable and available to
finance current expenditures. In the statement of activities, however, which
is presented on the accrual basis, revenues are reported when earned.
$ 4,414,364
(1,562,118)
2,852,246
The detail of the difference is as follows:
Communications services tax proceeds 302,415
The issuance of long-term debt 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.
The detail of the differences are as follows:
Debt payments 1,881,539
Some expenses reported in the statement of activities do not require current
financial resources and, therefore, are not reported as expenditures in
governmental funds.
The details of the difference is:
Compensated absences (829,790)
Accrued interest expense (8,095)
Debt issuance cost (2,768)
Negative net pension obligation (16,319)
(856,972)
Change in net assets of governmental activities (Page 12) $ 6,415,130
See notes to basic financial statements.
-15-
VILLAGE OF KEY BISCAYNE, FLORIDA
STATEMENT OF NET ASSETS
PROPRIETARY FUNDS
SEPTEMBER 30, 2008
Business -type Activities -
Enterprise Funds
Solid
Stormwater Sanitary Waste
Utility Sewer (A Nonmajor
System Construction Fund) Totals
ASSETS
Current assets:
Cash and cash equivalents
Accounts receivables, net
Due from other funds
Total current assets
Noncurrent assets:
Capital assets not being depreciated
Capital assets being depreciated, net
Total noncurrent assets
Total assets
$ 310,976 $ 2,129,689 $ 160,407 $ 2,601,072
158,099 2,369,972 519,353 3,047,424
- 428,828 - 428,828
469,075 4,928,489 679,760 6,077,324
7,051,931
8,662,321
7,051,931 8,662,321
8,662,321
7,051,931
15,714,252
7,521,006 13,590,810 679,760 21,791,576
LIABILITIES
Current liabilities:
Accounts payable and accrued liabilities 33,146 620,432 49,311 702,889
Due to other funds 117,775 2,039,397 397,789 2,554,961
Deferred revenue - - 29,159 29,159
Short-term revenue bonds payable 5,000,000 5,000,000
Current portion of revenue bonds payable 365,000 19,580 384,580
Total current liabilities 515,921 7,679,409 476,259 8,671,589
Noncurrent liabilities:
Revenue bonds 4,835,000 - 4,835,000
Revolving loan - 320,339 - 320,339
Total noncurrent liabilities 4,835,000 320,339 - 5,155,339
Total liabilities 5,350,921 7,999,748 476,259 13,826,928
NET ASSETS
Invested in capital assets, net of related debt 1,851,931 8,322,402 - 10,174,333
Unrestricted (deficit) 318,154 (2,731,340) 203,501 (2,209,685)
Total net assets $ 2,170,085 $ 5,591,062 $ 203,501 $ 7,964,648
See notes to basic financial statements.
-16-
VILLAGE OF KEY BISCAYNE, FLORIDA
STATEMENT OF REVENUES, EXPENSES AND CHANGES IN NET ASSETS
PROPRIETARY FUNDS
FISCAL YEAR ENDED SEPTEMBER 30, 2008
Operating revenues:
Charges for services
Operating expenses:
General and administrative
Depreciation
Total operating expenses
Operating loss
Non -operating revenues (expenses):
Grants
Interest income
Other income
Interest expense
Total non -operating revenues (expenses)
Income (loss) before transfers
Transfers in
Change in net assets
Net assets, beginning
Net assets, ending
Stormwater
Utility
System
Business -type Activities -
Enterprise Funds
Solid
Sanitary Waste
Sewer (A Nonmajor
Construction Fund)
Totals
$ 499,101 $ - $ 530,803 $ 1,029,904
407,738
273,919
681,657
(182,556)
619,823
619,823
- (89,020)
5,460,763 -
35,575 5,887 1,742
- 4,998 -
(229,843) (9,046) -
(194,268) 5,462,602 1,742
1,027,561
273,919
1,301,480
(271,576)
5,460,763
43,204
4,998
(238,889)
(190,687)
(376,824) 5,462,602 (87,278) (462,263)
28,134
28,134
(376,824) 5,490,736 (87,278) (434,129)
2,546,909 100,326 290,779
2,938,014
$ 2,170,085 $ 5,591,062 $ 203,501 $ 2,503,885
See notes to basic financial statements.
-17-
VILLAGE OF KEY BISCAYNE, FLORIDA
STATEMENT OF CASH FLOWS
PROPRIETARY FUNDS
FISCAL YEAR ENDED SEPTEMBER 30, 2008
Cash flows from operating activities:
Receipts from customers and users
Payments to suppliers
Net cash used by operating activities
Cash flows from non -capital financing activities:
Transfers from other funds
Net cash provided by non -capital
financing activities
Cash flows from capital and related financing activities:
Net payments on revolving loan
Proceeds from short term revenue bonds
Grant proceeds
Payments for construction in progress
Other income
Interest paid
Net cash provided (used by) capital
and related financing activities
Cash flows from investing activities:
Interest received
Net cash provided by investing activities
Net increase (decrease) in cash and cash equivalents
Cash and cash equivalents, beginning
Cash and cash equivalents, ending
Reconciliation of operating loss to net cash
provided (used) by operating activities:
Operating loss
Adjustments to reconcile operating loss to net
cash used by operating activities:
Depreciation
Changes in operating assets and liabilities:
(Increase) decrease in:
Accounts receivable
Interest receivable
Increase (decrease) in:
Accounts payable
Deferred revenue
Due to other funds
Total adjustments
Net cash used by operating activities
Business -type Activities -
Enterprise Funds
Solid
Stormwater Sanitary Waste
Utility Sewer (A Nonmajor
System Construction Fund)
$ 484,797 $ - $ 420,796
(636,123) - (552,212)
(151,326) - (131,416)
28,134
28,134
(350,000) (19,089)
5,000,000
- 2,661,963
(5,543,158)
4,998
(229,843) (9,046)
(579,843) 2,095,668
35,575
35,575
(695,594)
1,006,570
5,887
5,887
2,129,689
$ 310,976 $ 2,129,689
$ (182,556) $
273,919
(33,813)
19,509
33,146
(261,531)
31,230
$ (151,326) $
Totals
$ 905,593
(1,188,335)
(282,742)
28,134
28,134
- (369,089)
5,000,000
- (5,543,158)
4,998
- (238,889)
- (1,146,138)
1,742
1,742
43,204
43,204
(129,674) 1,304,421
290,081 1,296,651
$ 160,407 $ 2,601,072
$ (89,020) $ (271,576)
(110,007)
1,635
2,999
62,977
(42,396)
$ (131,416)
273,919
(143,820)
19,509
34,781
2,999
(198,554)
(11,166)
$ (282,742)
See notes to basic financial statements.
-18-
VILLAGE OF KEY BISCAYNE, FLORIDA
STATEMENT OF FIDUCIARY NET ASSETS
PENSION TRUST FUND
SEPTEMBER 30, 2008
ASSETS
Contributions receivable:
Village (including State) $ 121,323
Employees 24,887
Total contributions receivable 146,210
Investments, at fair value:
Money market funds
Common stocks
Mutual funds
Total investments
Total assets
LIABILITIES AND NET ASSETS
Payables
Net assets held in trust for pension benefits
See notes to basic financial statements.
-19-
529,201
2,435,222
7,233,603
10,198,026
10,344,236
940
$ 10,343,296
VILLAGE OF KEY BISCAYNE, FLORIDA
STATEMENT OF CHANGES IN FIDUCIARY NET ASSETS
PENSION TRUST FUND
FISCAL YEAR ENDED SEPTEMBER 30, 2008
ADDITIONS
Contributions:
Plan members $ 622,972
Village (including State) 1,050,016
Total contributions 1,672,988
Investment income (losses):
Net depreciation in the fair value of investments (1,392,812)
Interest and dividends 192,040
Net investments losses (1,200,772)
Total additions 472,216
DEDUCTIONS
Benefits paid 286,158
Administrative expenses 111,994
Total deductions 398,152
Change in net assets
Net assets, beginning
Net assets, ending
74,064
10,269,232
$ 10,343,296
See notes to basic financial statements.
-20-
NOTES TO BASIC FINANCIAL STATEMENTS
VILLAGE OF KEY BISCAYNE, FLORIDA
NOTES TO BASIC FINANCIAL STATEMENTS
SEPTEMBER 30, 2008
NOTE 1. SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES
The Village of Key Biscayne, Florida (the Village), located in Miami -Dade County, is a political
subdivision of the State of Florida. The Village, which was incorporated in 1991, operates under
a Council -Manager form of government. In addition to the general government function, the
Village provides its residents with public works, public safety (police and fire), parks and
recreation, building, zoning and planning functions, sanitation and stormwater management. The
Village does not provide educational or hospital facilities; those services are provided by the
Miami -Dade County School Board and Miami -Dade County, respectively.
The financial statements of the Village have been prepared in conformity with accounting
principles generally accepted in the United States (GAAP) as applied to governmental units. The
Governmental Accounting Standards Board (GASB) is the accepted standard -setting body for
establishing governmental accounting and financial reporting principles. The more significant of
the Village's accounting policies are described below:
A. Financial Reporting Entity
The financial statements were prepared in accordance with GASB Statements related to The
Financial Reporting Entity, which establishes standards for defining and reporting on the
financial reporting entity. The definition of the financial reporting entity is based upon the
concept that elected officials are accountable to their constituents for their actions. One of
the objectives of financial reporting is to provide users of financial statements with a basis for
assessing the accountability of the elected officials. The financial reporting entity consists of
the Village, organizations for which the Village is financially accountable, and other
organizations for which the nature and significance of their relationship with the Village are
such that exclusion would cause the reporting entity's financial statements to be misleading or
incomplete. The Village is financially accountable for a component unit if it appoints a
voting majority of the organization's governing board and it is able to impose its will on that
organization or there is a potential for the organization to provide specific financial benefits
to, or impose specific financial burdens on, the Village. Based upon the application of these
criteria, there were no organizations that met the criteria described above.
B. Government -Wide and Fund Financial Statements
The government -wide financial statements (i.e., the statement of net assets and the statement
of activities) report information on all of the non -fiduciary activities of the Village. For the
most part, the effect of interfund 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.
-21-
VILLAGE OF KEY BISCAYNE, FLORIDA
NOTES TO BASIC FINANCIAL STATEMENTS
(Continued)
NOTE 1. SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES (Continued)
B. Government -Wide and Fund Financial Statements (Continued)
The statement of activities demonstrates the degree to which the direct expenses of a given
function or segment are offset by program revenues. Direct expenses are those that are
clearly identifiable with a specific function or segment. Program revenues include 1) charges
to customers or applicants who purchase, use, or directly benefit from goods, services, or
privileges provided by a given function or segment and 2) grants and contributions that are
restricted to meeting the operational or capital requirements of a particular function or
segment. Taxes and other items not properly included among program revenues are reported
instead as general revenues.
Separate financial statements are provided for governmental funds, proprietary funds, and
fiduciary funds, even though the latter are excluded from the government -wide financial
statements. Major individual governmental funds and major individual enterprise funds are
reported as separate columns in the fund financial statements.
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 and
fiduciary fund financial 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 Village considers revenues to be available if they
are collected within 60 days of the end of the current fiscal period. Expenditures 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.
Property taxes, franchise fees and other 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. Revenues for expenditure driven grants
are recognized when the qualifying expenditures are incurred. All other revenue items are
considered to be measurable and available only when cash is received by the Village.
-22-
VILLAGE OF KEY BISCAYNE, FLORIDA
NOTES TO BASIC FINANCIAL STATEMENTS
(Continued)
NOTE 1. SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES (Continued)
C. Measurement Focus, Basis of Accounting, and Financial Statement Presentation
(Continued)
The Village reports the following major governmental funds:
The General Fund is the Village's primary operating fund. It accounts for all financial
resources of the general government, except those required to be accounted for in another
fund.
The Special Revenue Fund accounts for the revenues received from the transportation
surtax and expenditures for related transportation costs.
The Capital Improvement Fund accounts for the acquisition or construction of various
major capital projects.
The Village reports the following major proprietary funds in the basic financial statements:
The Stormwater Utility Fund accounts for the construction and maintenance of the
Village's stormwater system.
The Sanitary Sewer Fund accounts for the development and construction of a municipal
sanitary sewer system to the unsewered areas of the community.
Additionally, the Village reports the following fund types:
The Pension Trust Fund is used to account for the Village's single -employer defined
benefit pension plan covering substantially all of its police officers and firefighters.
Private -sector standards of accounting and financial reporting issued prior to December 1,
1989, generally are followed in both the government -wide and proprietary fund financial
statements to the extent that those standards do not conflict with or contradict guidance of the
Governmental Accounting Standards Board. The Village has the option of following
subsequent private -sector guidance for their business -type activities and enterprise funds,
subject to this same limitation. The Village has elected not to follow subsequent private -
sector guidance.
As a general rule, the effect of interfund activity has been eliminated from the government -
wide financial statements. Exceptions to this general rule are payments -in -lieu of taxes and
other charges between the Village's various utility functions and various other functions.
Elimination of these charges would distort the direct costs and program revenues reported for
the various functions concerned.
Amounts reported as program revenues include 1) charges to customers or applicants for
goods, services, or privileges provided, 2) operating grants and contributions, and 3) capital
grants and contributions. Internally dedicated resources are reported as general revenues
rather than as program revenues. Likewise, general revenues include all taxes.
-23-
VILLAGE OF KEY BISCAYNE, FLORIDA
NOTES TO BASIC FINANCIAL STATEMENTS
(Continued)
NOTE 1. SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES (Continued)
C. Measurement Focus, Basis of Accounting, and Financial Statement Presentation
(Continued)
Proprietary funds distinguish operating revenues and expenses from nonoperating 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 Village's stormwater utility, solid waste services and
sanitary sewer construction funds are charges to customers for services. Operating expenses
for enterprise funds include the costs of services, administrative expenses, and depreciation
on capital assets. All revenues and expenses not meeting this definition are reported as
nonoperating revenues and expenses.
When both restricted and unrestricted resources are available for use, it is the Village's policy
to use restricted resources first, then unrestricted resources as they are needed.
D. Assets, Liabilities, and Net Assets or Equity
1. Deposits and Investments
The Village's cash and cash equivalents include cash on hand, and certificates of deposit
with original maturities of three months or less from the date of acquisition and a
repurchase agreement. All other investments, including pension investments, are recorded
at fair value. Fair value is determined by quoted market prices.
2. Receivables and Payables
Activity between funds that are representative of lending/borrowing arrangements
outstanding at the end of the fiscal year are referred to as "due to/from other funds". Any
residual balances outstanding between the governmental activities and business -type
activities are reported in the government -wide financial statements as "internal balances".
3. Capital assets
Capital assets, which include property, plant and equipment, and infrastructure assets (e.g.,
utility plant, roads, bridges, sidewalks, and similar items), are reported in the applicable
governmental or business -type activities columns in the government -wide financial
statements. Capital assets are defined by the Village as assets with an initial, individual
cost of more than $750 and an estimated useful life in excess of one year. Such assets are
recorded at historical cost or estimated historical cost if purchased or constructed.
Donated capital assets are recorded at estimated fair market value at the date of donation.
All infrastructure assets have been capitalized since inception of the Village.
-24-
VILLAGE OF KEY BISCAYNE, FLORIDA
NOTES TO BASIC FINANCIAL STATEMENTS
(Continued)
NOTE 1. SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES (Continued)
D. Assets, Liabilities, and Net Assets or Equity (Continued)
3. Capital assets (Continued)
The costs of normal maintenance and repairs that do not add to the value of the asset or
materially extend asset lives 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 asset constructed. No such costs were capitalized in 2008.
Capital assets of the Village are depreciated using the straight line method over the
following estimated useful lives:
Assets Years
Buildings 25-50
Improvements other than buildings 10-50
Furniture, fixtures and equipment 10
Stormwater utility system 50
4. Compensated absences
It is the Village's policy to permit employees to accumulate within certain limits, earned
but unused vacation time and sick leave, which will be paid to employees upon separation
from Village service. All vacation and sick leave pay is accrued when incurred in the
government -wide and proprietary fund financial statements. In the governmental funds, a
liability is recorded only for vacation and sick leave payouts for employee separations that
occurred prior to September 30, 2008 and were subsequently paid with current available
financial resources. The general fund typically is used to liquidate the liability for
compensated absences.
5. Long-term obligations
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 assets. Bond premiums and discounts, as well as issuance costs,
are deferred and amortized over the life of the bonds using the straight-line amortization
method. The results of using this method do not differ significantly from the effective
interest method. Bonds payable are reported net of the applicable bond premium or
discount.
In the fund financial statements, governmental fund types recognize bond premiums and
discounts, as well as bond issuance costs, during the current period. The face amount of
debt issued is reported as other financing sources. Premiums received on debt issuances
-25-
VILLAGE OF KEY BISCAYNE, FLORIDA
NOTES TO BASIC FINANCIAL STATEMENTS
(Continued)
NOTE 1. SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES (Continued)
D. Assets, Liabilities, and Net Assets or Equity (Continued)
5. Long -Term Obligations (Continued)
are reported as other financing sources while discounts on debt issuances are reported as
other financing uses. Issuance costs, whether or not withheld from the actual debt
proceeds received, are reported as debt service expenditures.
6. 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 of assets, liabilities, disclosures of contingent liabilities, revenues and
expenditures/expenses reported in the financial statements and accompanying notes.
These estimates include assessing the collectability of receivables, the realization of
pension obligations and the useful lives of capital assets. Although these estimates as well
as all 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.
7. Fund Equity
In the fund financial statements, governmental funds report reservations of fund balance
for amounts that are not available for appropriation or are legally restricted by outside
parties for use for a specific purpose. Designations of fund balance, where noted,
represent tentative management plans that are subject to change.
NOTE 2. EXPLANATION OF CERTAIN DIFFERENCES BETWEEN THE GOVERNMENTAL
FUND BALANCE SHEET AND THE GOVERNMENT -WIDE STATEMENT OF NET
ASSETS
The governmental fund balance sheet includes a reconciliation between fund balance — total
governmental funds and net assets — governmental activities as reported in the government -wide
statement of net assets. One element of that reconciliation explains that long-term liabilities,
including bonds payable, are not due and payable in the current period and therefore are not
reported in the funds. The details of this $36,796,667 difference are as follows:
Bonds payable $ 33,987,810
Debt issuance cost (20,769)
Capital leases payable 213,793
Compensated absences 2,287,753
Accrued interest payable 328,080
$ 36,796,667
-26-
VILLAGE OF KEY BISCAYNE, FLORIDA
NOTES TO BASIC FINANCIAL STATEMENTS
(Continued)
NOTE 3. DEPOSITS AND INVESTMENTS
Deposits
In addition to insurance provided by the Federal Depository Insurance Corporation, all
deposits are held in banking institutions approved by the State Treasurer of the State of
Florida to hold public funds. Under Florida Statutes Chapter 280, Florida Security for Public
Deposits Act, the State Treasurer requires all Florida qualified public depositories to deposit
with the Treasurer or another banking institution eligible collateral. In the event of a failure
of a qualified public depository, the remaining public depositories would be responsible for
covering any resulting losses. Accordingly, all amounts reported as deposits are insured or
collateralized with securities held by the entity or its agent in the entity's name.
Investments
The Village is authorized to invest in obligations of the U.S. Treasury, its agencies,
instrumentalities and the Local Government Surplus Funds Trust Fund administered by the State
Board of Administration. The investments follow the investment rules defined in Florida
Statutes Chapter 218.415. The investment policy defined in the statutes attempts to promote,
through state assistance, the maximization of net interest earnings on invested surplus funds of
local units of governments while limiting the risk to which the funds are exposed.
Investments — Village
As of September 30, 2008, the Village had the following investments with its corresponding
maturities in its portfolio:
Investment Maturities
(In Years)
Investments
Fair Less
Value Than 1
Repurchase agreements $ 3,414,174 3,414,174
Interest Rate Risk
Interest rate risk refers to the portfolio's exposure to fair value losses arising from
increasing interest rates. The Village does not have a formal investment policy that limits
investment maturities as a means of managing its exposure to market value losses arising
from increasing interest rates.
Credit Risk
State law and the Village's investment policy limits investments in bonds, U.S. treasuries
and agency obligations, or other evidences of indebtedness to the top ratings issued by
nationally recognized statistical rating organizations (NRSRO) of the United States. The
Village's repurchase agreements are collateralized by U.S. agency obligations and were all
rated AAA under Standard & Poor's ratings and AAA under Moody's ratings.
-27-
VILLAGE OF KEY B►ISCAYNE, FLORIDA
NOTES TO BASIC FINANCIAL STATEMENTS
(Continued)
NOTE 3. DEPOSITS AND INVESTMENTS (Continued)
Investments — Village (Continued)
Concentration of Credit Risk
As of September 30, 2008, the value of each position held in the Village's portfolio
comprised less than 5% of the Village investment assets.
Investments — Pension Plan
As of September 30, 2008, the Village's Defined Benefit Pension Plan had the following
investments with its corresponding maturities in its portfolio:
Investment Maturities (In Years)
Investments
Fair Less
Value Than 1 1-5 6-10 10+
Bond mutual funds $ 3,530,729 $ 88,268 $ 2,333,812 $ 688,492 $ 420,157
Interest Rate Risk
Interest rate risk refers to the portfolio's exposure to fair value losses arising from
increasing interest rates. The Plan does not have a formal investment policy that limits
investment maturities as a means of managing its exposure to market value losses arising
from increasing interest rates.
Credit Risk
State law and the Plan's investment policy limits investments in bonds, stocks, or other
evidences of indebtedness_issued or guaranteed by a corporation organized under the laws
of the United States, any state or organized territory of the United States, or the District of
Columbia, provided the corporation is listed on any one or more of the recognized national
stock exchanges or on the National Market System of the NASDAQ Stock Market and in
the case of bonds only, holds a rating in one of the three highest classifications by a major
rating service. The Plan's investment policy limits fixed income investments to a rating no
lower than Standard & Poor's BBB or Moody's BAA.
The Plan's bond mutual funds were all rated "A" or better under Standard & Poor's ratings
and at least "A" under Moody's ratings.
-28-
VILLAGE OF KEY BISCAYNE, FLORIDA
NOTES TO BASIC FINANCIAL STATEMENTS
(Continued)
NOTE 3.
DEPOSITS AND INVESTMENTS (Continued)
Investments — Pension Plan (Continued)
Concentration of Credit Risk
The Plan's investment policy prohibits equity and fixed income securities concentrations
greater than 5% and 10%, respectively, in any one issuer with the exception of U.S.
government or agency issues. As of September 30, 2008, the value of each position held
in the Plan's portfolio comprised less than 5% of Plan investment assets.
Risks and Uncertainties
The Plan invests in various investment securities. Investment securities are exposed to
various risks such as interest rate, market, and credit risks. Due to the level of risk
associated with certain investment securities, it is at least reasonably possible that changes
in the values of investment securities will occur in the near term and that such changes
could materially affect the amounts reported in the statement of plan net assets. The Plan,
through its investment advisor, monitors the Plan's investment and the risks associated
therewith on a regular basis which the Plan believes minimizes these risks.
Plan contributions are made and the actuarial present value of accumulated plan benefits are
reported based on certain assumptions pertaining to interest rates, inflation rates and employee
demographics, all of which are subject to change. Due to uncertainties inherent in the
estimations and assumptions process, it is at least reasonably possible that changes in these
estimates and assumptions in the near term would be material to the financial statements.
NOTE 4. RECEIVABLES
Receivables as of September 30, 2008 for the Village's individual major funds, nonmajor funds and
fiduciary fund in the aggregate, including the allowances for uncollectible accounts, are as follows:
Customers billed
Contributions
Property taxes
Interest
Intergovernmental
Other
Due from other governments
Gross receivables
Less allowance for uncollectibles
Net total receivables
$
General
311,391
2,495
144,117
580,363
1,000,000
2,038,366
$ 2,038,366
Special
Revenue
$
833,715
833,715
Storm -
water
158,099
Sanitary
Sewer
Solid Pension
Waste Trust Fund
- 540,993 $ -
- 146,210
2,369,972
158,099 2,369,972
$ 833,715 $ 158,099 $ 2,369,972
540,993
(21,640)
$ 519,353
146,210
$ 146,210
Total
$ 699,092
146,210
311,391
2,495
977,832
2,950,335
1,000,000
6,087,355
(21,640)
$ 6,065,715
-29-
VILLAGE OF KEY BISCAYNE, FLORIDA
NOTES TO BASIC FINANCIAL STATEMENTS
(Continued)
NOTE 5. PROPERTY TAXES
Property values are assessed on a county -wide basis by the Miami -Dade County Property
Appraiser as of January 1, the lien date, of each year and are due the following November 1.
Taxable value of property within the Village is certified by the Property Appraiser and the
Village levies a tax millage rate upon the taxable value, which will provide revenue required for
the fiscal year beginning October 1.
Property taxes levied each November 1, by the Village and all other taxing authorities within the
County, are centrally billed and collected by Miami -Dade County, with remittances to the
Village of their proportionate share of collected taxes. Taxes for the fiscal year beginning
October 1 are billed in the month of November, subject to a 1% per month discount for the
period November through February, and are due no later than March 31. On April 1, unpaid
amounts become delinquent with interest and penalties added thereafter. Beginning June 1, tax
certificates representing delinquent taxes with interest and penalties are sold by Miami -Dade
County, with remittance to the Village for its share of those receipts. At September 30, 2008,
there were no material delinquent taxes.
NOTE 6. INTERFUND RECEIVABLES, PAYABLES, AND TRANSFERS
The composition of interfund balances as of September 30, 2008 is as follows:
Due from/to other funds:
Receivable Fund
General
Capital improvement
Sanitary Sewer
Payable Fund
Special revenue
Sanitary sewer
Solid Waste
Stormwater utility
Sanitary sewer
General
Capital Improvement
Amount
$ 4,597,457
1,656,427
397,789
117,775
382,970
72,984
428,828
$ 7,654,230
The outstanding balances between funds result mainly from the time lag between the dates that
(1) interfund goods and services are provided or reimbursable expenditures occur, (2)
transactions are recorded in the accounting system, and (3) payments between funds are made.
Interfund transfers:
Transfers In
General Capital Sanitary
Fund Improvement Sewer
Transfers out:
General fund $ - $ 4,533,094 $ 28,134
Total
$ 4,561,228
-30-
VILLAGE OF KEY BISCAYNE, FLORIDA
NOTES TO BASIC FINANCIAL STATEMENTS
(Continued)
NOTE 6. INTERFUND RECEIVABLES, PAYABLES, AND TRANSFERS (Continued)
Transfers are used to move unrestricted general fund revenues to finance various capital
projects in accordance with budgetary authorizations.
NOTE 7. CAPITAL ASSETS
Capital asset activity for the year ended September 30, 2008 was as follows:
Governmental activities:
Capital assets, not being depreciated:
Land
Construction in progress
Total capital assets, not being depreciated
Capital assets, being depreciated:
Buildings
Improvements other than buildings
Furniture, fixtures and equipment
Total capital assets, being depreciated
Less accumulated depreciation for:
Buildings
Improvements other than buildings
Furniture, fixtures and equipment
Total accumulated depreciation
Total capital assets, being depreciated, net
Governmental activities capital assets, net
Business -type activities:
Capital assets, not being depreciated:
Construction in progress
Total capital assets, not being depreciated
Capital assets, being depreciated:
Stormwater utility system
Total capital assets, being depreciated
Less accumulated depreciation for:
Stormwater utility system
Total accumulated depreciation
Total capital assets, being depreciated, net
Business -type activities capital assets, net
Beginning
Balance
Ending
Increases Decreases Balance
$ 21,833,837 $ - $
10,711,571 2,139,941
32,545,408 2,139,941
23,727,322 498,386
14,878,443 1,264,066
5,151,754 593,280
43,757,519 2,355,732
(2,417,570)
(3,322,438)
(3,057,661)
(8,797,669)
34,959,850
$ 67,505,258
- $ 21,833,837
- 12,851,512
- 34,685,349
- 24,225,708
- 16,142,509
(97,257) 5,647,777
(97,257) 46,015,994
(479,571) - (2,897,141)
(334,005) - (3,656,443)
(748,542) - (3,806,203)
(1,562,118)
(10,359,787)
793,614 (97,257) 35,656,207
$ 2,933,555 $ (97,257) $70,341 556
$ 1,089,039 $ 7,573,282 $
1,089,039 7,573,282
10,056,660
10,056,660
(2,730,810)
(2,730,810)
7,325,850
$ 8,414,889
(273,919)
(273,919)
(273,919)
$ 7,299,363
- $ 8,662,321
- 8,662,321
- 10,056,660
- 10,056,660
- (3,004,729)
- (3,004,729)
- 7,051,931
$ - $15,714,252
-31-
VILLAGE OF KEY BISCAYNE, FLORIDA
NOTES TO BASIC FINANCIAL STATEMENTS
(Continued)
NOTE 7. CAPITAL ASSETS (Continued)
Depreciation expense was charged as functions/programs of the primary government as follows:
Governmental activities:
General government $ 323,126
Police 305,649
Fire 325,408
Public works 326,087
Building, zoning and planning 16,253
Parks 265,595
Total depreciation expense - governmental activities $ 1,562,118
Business -type activities:
Stormwater $ 273,919
NOTE 8. SHORT-TERM DEBT INSTRUMENTS AND LIQUIDITY
On August 15, 2008, the Village issued a short-term water and sewer revenue note in an
aggregate principal amount not to exceed $5,000,000 for the purpose of financing a portion of
the costs of sewer system improvements within the Village, financing architectural, engineering,
environmental, legal, and other planning costs related thereto, and paying costs of issuance of the
note. The note is secured by a covenant to budget and appropriate from legally available non -ad
valorem revenues of the Village and is expected to be repaid over one year. Interest will accrue
on the outstanding principal balance from its date of issuance payable on February 12, 2009 and
upon maturity, August 12, 2009, at an interest rate equal to 2.69% per annum. Total interest paid
over the life of note will be $136,368.
-32-
VILLAGE OF KEY BISCAYNE, FLORIDA
NOTES TO BASIC FINANCIAL STATEMENTS
(Continued)
NOTE 9. LONG-TERM DEBT
The following is a summary of changes in long-term liabilities of the Village for governmental
activities for the year ended September 30, 2008:
Governmental Activities
Bonds payable:
Land acquisition and capital improvement
revenue bonds, Series 1999
Land acquisition and capital improvement
revenue bonds, Series 2000
Capital improvement bonds, Series 2002
Land acquisition and capital improvement
revenue bonds, Series 2004
Transportation tax revenue bonds,
Series 2005
Transportation tax revenue bonds,
Series 2006
Total bonds payable
Other liabilities:
Capital leases
Compensated absences
Total other liabilities
Governmental activities long-term liabilities
Beginning
Balance
Additions Reductions
$ 8,040,000 $
8,800,000
8,681,284
2,800,000
3,500,000
3,846,275
35,667,559
415,341
1,457,963
1,873,304
$ 37,540,863
$ 922,343
Land Acquisition and Capital Improvement Revenue Bonds
Ending Due Within
Balance One Year
$ (455,000) $ 7,585,000
- (440,000)
(414,676)
(69,929)
(95,956)
(204,188)
- (1,679,749)
8,360,000
8,266,608
2,730,071
3,404,044
3,642,087
33,987,810
- (201,548) 213,793
922,343 (92,553) 2,287,753
922,343 (294,101) 2,501,546
$ (1,973,850) $ 36,489,356
$ 475,000
465,000
451,434
286,476
147,645
212,583
2,03 8,13 8
114,287
218,415
332,702
$ 2,370,840
On July 23, 1999, the Village issued $10,000,000 Land Acquisition and Capital Improvement
Revenue Bonds, Series 1999, the proceeds of which were used for the acquisition of property
and financing of the construction of the Civic Center project. The bonds mature on July 23,
2019. The Village has pledged non -ad valorem revenues to secure payment of the principal
and interest on the bonds. The bonds are due in annual principal installments. Interest
accrues at 4.715% per annum.
Debt service requirements to maturity are as follows:
Fiscal year ending September 30:
2009
2010
2011
2012
2013
2014-2018
2019
Principal
$ 475,000
500,000
525,000
550,000
580,000
3,400,000
1,555,000
$ 7,585,000
Interest
$ 346,435
323,449
299,285
273,942
247,302
786,715
75,809
$ 2,352,937
Total
$ 821,435
823,449
824,285
823,942
827,302
4,186,715
1,630,809
$9,937,937
-33-
VILLAGE OF KEY BISCAYNE, FLORIDA
NOTES TO BASIC FINANCIAL STATEMENTS
(Continued)
NOTE 9. LONG-TERM DEBT (Continued)
Capital Improvement Revenue Bonds
On July 11, 2000, the Village issued a second series of $10,000,000 Capital Improvement
Revenue Bonds, Series 2000, the proceeds of which were used for the acquisition of property
and financing of the construction of the Civic Center project. The bonds mature on July 11,
2020. The Village has pledged non -ad valorem revenues to secure payment of the principal
and interest on the bonds. The bonds are due in annual principal installments. Interest
accrues at 5.24% per annum.
Debt service requirements to maturity are as follows:
Fiscal year ending September 30:
2009
2010
2011
2012
2013
2014-2018
2019-2020
Principal
$ 465,000
490,000
515,000
540,000
570,000
3,330,000
2,450,000
$ 8,360,000
Interest
$ 425,881
400,860
374,529
346,888
317,806
1,095,946
197,027
$3,158,937
Total
$ 890,881
890,860
889,529
886,888
887,806
4,425,946
2,647,027
$11,518,937
On November 1, 2002, the Village issued Capital Improvement Revenue Bonds, Series 2002
for the purpose of financing a portion of the cost of construction and equipping of a
community center including a parking garage and swimming pool. The bonds mature on
November 1, 2022. The Village has pledged non -ad valorem revenues to secure payment of
the principal and interest on the bonds. Interest is due quarterly at a rate of 3.95% up to
November 1, 2012. From November 1, 2012 to maturity, the interest rate will become a
variable rate based on certain indices.
Debt service to maturity is as follows:
Fiscal year ending September 30:
2009
2010
2011
2012
2013
2014-2018
2019-2023
Principal
$ 451,434
467,860
484,883
502,526
520,811
2,902,485
2,936,609
$ 8,266,608
Interest Total
$ 289,765
273,339
256,316
238,673
220,388
803,510
242,259
$ 2,324,250
$ 741,199
741,199
741,199
741,199
741,199
3,705,995
3,178,868
$ 10,590,858
-34-
VILLAGE OF KEY BISCAYNE, FLORIDA
NOTES TO BASIC FINANCIAL STATEMENTS
(Continued)
NOTE9. LONG-TERM DEBT (Continued)
Land Acquisition and Capital Improvement Revenue Bonds
On December 12, 2004, the Village issued $2,800,000 of capital improvement and land
acquisition revenue bonds, Series 2004 for the purpose of completing the road construction
associated with the new administration, fire and community center buildings. The bonds
mature on November 1, 2022. The Village has pledged non -ad valorem revenues to secure
payment of the principal and interest on the bonds. The bonds are due in quarterly principal
installments. Interest accrues at 3.83% per annum.
Debt service requirements to maturity are as follows:
Fiscal year ending September 30:
2009
2010
2011
2012
2013
2014-2018
2019-2023
Transportation Tax Revenue Bonds
Principal
$ 286,476
297,607
140,107
145,551
151,206
848,315
860,809
$ 2,730,071
Interest Total
$ 100,480
89,349
80,195
74,751
69,096
252,657
76,016
$ 742,544
$ 386,956
386,956
220,302
220,302
220,302
1,100,972
936,825
$ 3,472,615
On July 15, 2005, the Village issued Transportation Tax Revenue Bonds, Series 2005, for the
purpose of financing a portion of the costs of road improvements within the Village (Crandon
Boulevard Improvements — Phase II). The issuance was established similar to bond
anticipation notes where the principal amount is the lesser of $3,500,000 or the advances
made under the bond. Only the amount advanced becomes an obligation of the Village.
During the fiscal year ended September 30, 2006, the Village drew down the remaining
$3,450,000. The Village has pledged Transportation Tax Revenues to secure payment of the
principal and interest on the bonds. For the fiscal year ended September 30, 2008, debt
service represents approximately 78% of the pledged revenue. The bonds mature on July 1,
2025 and are due in quarterly principal installments. Interest accrues at 4.09% per annum.
-35-
VILLAGE OF KEY BISCAYNE, FLORIDA
NOTES TO BASIC FINANCIAL STATEMENTS
(Continued)
NOTE 9. LONG-TERM DEBT (Continued)
Transportation Tax Revenue Bonds (Continued)
Debt service requirements to maturity are as follows:
Fiscal year ending September 30:
2009
2010
2011
2012
2013
2014-2018
2019-2023
2024-2025
Road Improvement Revenue Bonds
Principal
$ 147,645
204,001
212,474
169,602
160,687
900,424
1,103,593
505,618
$ 3,404,044
Interest
$ 138,219
130,084
121,612
113,313
105,161
428,860
225,698
26,115
$ 1,289,062
Total
$ 285,864
334,085
334,086
282,915
265,848
1,329,284
1,329,291
531,733
$ 4,693,106
On December 14, 2006, the Village issued Road Improvement Revenue Bonds, Series 2006,
for the purpose of financing a portion of the costs of road improvements within the Village
(Crandon Boulevard Improvements - Phase Ill), financing architectural, engineering,
environmental, legal, and other planning costs. The bonds mature on December 1, 2021. The
Village has pledged toll revenues to secure payment of the principal and interest on the bonds.
For the fiscal year ended September 30, 2008, debt service represents approximately 49% of
the pledged revenue. The bonds are due in quarterly principal installments. Interest accrues
at 4.05% per annum.
Debt service requirements to maturity are as follows:
Fiscal year ending September 30:
2009
2010
2011
2012
2013
2014-2018
2019-2022
Principal
$ 212,583
221,325
230,425
239,900
249,765
1,411,587
1,076,502
$ 3,642,087
Interest Total
$ 144,542
135,800
126,700
117,224
107,360
374,039
72,927
$ 1,078,592
$ 357,125
357,125
357,125
357,124
357,125
1,785,626
1,149,429
$ 4,720,679
-36-
VILLAGE OF KEY BISCAYNE, FLORIDA
NOTES TO BASIC FINANCIAL STATEMENTS
(Continued)
NOTE 9. LONG-TERM DEBT (Continued)
Capital Leases
On June 16, 2003, the Village entered into a Master Lease agreement, with a local financial
institution as lessee for financing the acquisition of Village vehicles and equipment for the
Fire -Rescue Department with a fair value of $880,963. The amount of the lease obligation is
$691,744 and final payment is due on November 15, 2009. Lease payments are due annually.
Interest accrues at 2.994% per annum.
On December 15, 2004, the Village entered into a Master Lease agreement for financing the
acquisition of Village vehicles and equipment for the Police Department with a fair value of
$378,413. The amount of the lease obligation was $380,726 and the final payment was made
in December 2007.
On January 10, 2005, the Village entered into a Master Lease agreement for financing the
acquisition of a Village vehicle and equipment for the Police Department with a fair value of
$23,744. The amount of the lease obligation is $23,744 and final payment is due on January
10, 2009. Lease payments are due annually. Interest accrues at 4.20% per annum.
The future minimum lease obligations and the net present value of the minimum lease
payments as of September 30, 2008 were as follows:
Fiscal year ending September 30:
2009 $114,287
2010 109,137
Total minimum lease payments 223,424
Less amount representing interest (9,631)
Present value of minimum lease payments $ 213,793
The following is a summary of changes in long-term liabilities of the Village for business -
type activities for the year ended September 30, 2008:
Due
Beginning Ending Within
Balance Additions Reductions Balance One Year
Business -type Activities
Bonds and loan payable:
Stormwater utility revenue bonds $ 5,550,000 $ - $ (350,000) $ 5,200,000 $ 365,000
Revolving loan 359,008 - (19,089) 339,919 19,580
Total bonds and loan payable 5,909,008 - (369,089) 5,539,919 384,580
Business -type activities
long-term liabilities $ 5,909,008 $ - $ (369,089) $ 5,539,919 $ 384,580
-37-
VILLAGE OF KEY BISCAYNE, FLORIDA
NOTES TO BASIC FINANCIAL STATEMENTS
(Continued)
NOTE 9. LONG-TERM DEBT (Continued)
Stormwater Utility Revenue Bonds
On January 26, 1999, the Village issued $7,200,000 Stormwater Utility Revenue Bonds,
Series 1999, the proceeds of which were used to pay the principal of the $7,200,000 Bond
Anticipation Notes, Series 1995. The bonds mature on January 26, 2019. The Village has
pledged stormwater utility fees and non -ad valorem revenues to secure payment of the
principal and interest on the bonds. The bonds are due in annual principal installments on
October 1St. Interest accrues at 4.13% per annum.
Debt service requirements to maturity are as follows:
Fiscal year ending September 30:
2009
2010
2011
2012
2013
2014-2018
2019
State Revolving Fund Loan
Principal
$ 365,000
385,000
405,000
425,000
445,000
2,580,000
595,000
$ 5,200,000
Interest
$ 214,760
199,686
183,785
167,058
149,506
453,269
24,573
$ 1,392,637
Total
$ 579,760
584,686
588,785
592,058
594,506
3,033,269
619,573
$ 6,592,637
In June 1996, the Village entered into a loan agreement in the amount of $887,983 for the
financing of the planning and engineering of the proposed sanitary sewer construction project
under a State Revolving Fund Loan. The proceeds were received in fiscal year 1998. The
loan is payable in semi-annual payments over 20 years beginning on April 15, 2003 at an
interest rate of 2.56% per annum. The loan matures on October 15, 2022.
Fiscal year ending September 30:
2009
2010
2011
2012
2013
2014-2018
2019-2023
Principal Interest Total
$ 19,580
20,084
20,602
21,133
21,677
117,058
119,786
$ 339,920
$ 8,554
8,050
7,532
7,001
6,457
23,613
7,736
$ 68,943
$ 28,134
28,134
28,134
28,134
28,134
140,671
127,522
$ 408,863
-38-
VILLAGE OF KEY BISCAYNE, FLORIDA
NOTES TO BASIC FINANCIAL STATEMENTS
(Continued)
NOTE 10. COMMITMENTS AND CONTINGENCIES
Litigation
The Village is involved in several lawsuits incidental to its operations, the outcome of which,
in the opinion of management and legal counsel, would not have a material adverse effect on
the financial condition of the Village.
Grants Contingency
Federal and State programs in which the Village participates are subject to audit by grantor
agencies. Any disallowed claims, including amounts already collected, may constitute a liability of
the applicable funds. In the opinion of management, future disallowances of grant expenditures, if
any, would not have a material adverse effect on the financial condition of the Village.
Construction Commitment
The Village has outstanding construction commitments of approximately $6,000,000 for its
sanitary sewer project.
NOTE 11. DEFICIT FUND BALANCE
The Special Revenue Fund has a deficit fund balance of $3,701,623 which is being funded from
the General Fund and from revenues derived from an interlocal agreement with Miami -Dade
County over a period of approximately 12 years.
NOTE 12. RESERVED FUND BALANCES
As of September 30, 2008, fund balances in the general fund have been reserved for the
following purposes:
Emergencies $ 4,000,001
Master Plan initiatives 1,873,764
Working capital 1,000,000
Playing fields 416,403
Capital Improvement Plan 1,130,089
Compensated absences 595,916
Recreation facilities 300,000
Capital lease 298,682
Building inspections 554,819
Law enforcement seizures 284,639
Prepaids 261,373
Roadway improvements 175,000
Police Labor 90,000
Fire Grant Revenue (UASI) 18,389
Community Center equipment 50,000
Fire vehicle replacements 50,000
Fire Rescue Transport Fees 171,839
Police/Administration building 13,632
Fire Station building 13,632
$11,298,178
-39-
VILLAGE OF KEY BISCAYNE, FLORIDA
NOTES TO BASIC FINANCIAL STATEMENTS
(Continued)
NOTE 13. DEFINED CONTRIBUTION PLANS
The Village as a single -employer contributes to the Village of Key Biscayne Money Purchase
Plans, which are defined contribution plans created in accordance with Internal Revenue Code
Section 401(a). Under one Plan, which is available to Village employees, the Village contributes
12% and the employees contribute 6%. Under the second plan, which is available only to sworn
or certified police officers and firefighters, the Village contributes 12% and there is no employee
contribution. Beginning October 1, 1997, the police officers and firefighters, which elected to
participate in the defined benefit pension plan (see Note 14), were no longer eligible to
contribute to the 401(a) plan. Employer contributions for the fiscal year ended September 30,
2008 were $446,750 while the employee contributions were $140,735. Amendments to the Plan
must be authorized by the Village Council.
NOTE 14. DEFINED BENEFIT PENSION PLAN
Plan Description
Effective October 1, 1997, the Village established a single -employer Public Employee
Retirement System (PERS) to provide pension benefits for its police officers and firefighters.
The PERS is considered to be part of the Village's financial reporting entity and is included in
the Village's financial reports as a pension trust fund. The Plan was created under Village
Ordinance 97-21. The latest available actuarial valuation is as of October 1, 2007. The PERS
does not issue a stand-alone financial report for the Plan.
Under this plan, all full-time police officers and firefighters employed by the Village are
eligible to participate. The monthly retirement benefit is equal to 3% of the average final
compensation for each year of service. The calculation for the average final compensation is
computed as one -twelfth of the average salary of the five highest years within the last ten
years of credited service. Credited service is determined by the total number of years
employed by the Village since August 1, 1993. Amendments to the Plan must be authorized
by the Village Council.
Members are vested after 5 years of service. Vested employees may retire at the earlier of age
55 and the completion of five years of credited service or the age of 52 and the completion of
25 years of credited service, or at age 50 with 5 years of service with the benefit discounted
3% for each year under age 55.
Administrative costs of the plan are financed through investment earnings. Benefits and
refunds are recognized when due and payable in accordance with the terms of the plan.
Benefits and funds are recorded when paid.
-40-
VILLAGE OF KEY BISCAYNE, FLORIDA
NOTES TO BASIC FINANCIAL STATEMENTS
(Continued)
NOTE 14. DEFINED BENEFIT PENSION PLAN (Continued)
Plan Description (Continued)
At October 1, 2007 (date of the latest actuarial valuation), Plan membership consisted of the
following:
Retirees and beneficiaries currently receiving benefits and terminated employees
entitled to benefits but not yet receiving them
Current employees:
Vested
Non -vested
Total
Funding Policy
16
33
32
65
The Village's contribution rate is adjusted each year to an amount equal to the total pension
cost for the year, as determined by the most recent actuarial valuation, less the amount of
revenue received from the State of Florida pursuant to Chapters 175 and 185 of the Florida
Statutes. The Village's contribution rate was 11.48% of covered payroll for the year ended
September 30, 2008 which was determined by the October 1, 2006 actuarial valuation. The
participant contribution rate which is fixed by ordinance is 10.5%. This funding_ policy is
designed to limit the Village's exposure to contribute to the Plan. State contributions are
recognized as a revenue and expenditure in the general fund.
Funding Status and Funding Progress
The funded status of the plan as of October 1, 2007, the most recent actuarial valuation date,
is as follows:
Actuarial
Accrued UAAL
Actuarial Liability Unfunded As % of
Actual Value of (AAL) - AAL Funded Covered Covered
Valuation Assets Entry Age (UAAL) Ration Payroll Payroll
Date Laj (b) - (a) (a) / (b) (c) (b - a) / c
10/1/07 $ 9,017,393 $12,335,707 $ 3,318,314 73.1% $ 5,740,991 58%
The schedule of funding progress, presented as required supplementary information (RSI)
following the notes to the financial statements, presents multiyear trend information about
whether the actuarial value of plan assets are increasing or decreasing over time relative to the
AAL for benefits.
-41-
VILLAGE OF KEY BISCAYNE, FLORIDA
NOTES TO BASIC FINANCIAL STATEMENTS
(Continued)
NOTE 14. DEFINED BENEFIT PENSION PLAN (Continued)
Funding Status and Funding Progress (Continued)
Additional information as of the latest actuarial valuation follows:
Valuation date
Contribution Rates:
Employer
Plan members
Actuarial cost method
Amortization method
Remaining amortization
Asset valuation method
Actuarial assumptions:
Investment rate of return*
Projected salary increases*
Cost of living adjustments
*Includes inflation and other general increases at 4%
Annual Pension Cost and Net Pension Asset
The annual pension cost and net pension obligation (asset) for the current year was as
follows:
10/1/07
13.11%
10.50%
Entry age normal
Level percent of pay, closed
30 years
5 year Smoothed Market value
8.5% per year compounded annually,
net of investment related expenses
9.4% to 3.5% variable
N/A
Annual required contribution
Interest on net pension asset
Adjustment to annual required contribution
Annual pension cost
Contributions made
Decrease in net pension asset
Net pension asset, beginning of year
Net pension asset, end of year
$ 839,400
(10,680)
14,818
843,538
839,400
4,138
(125,650)
$ (121,512)
-42-
VILLAGE OF KEY BISCAYNE, FLORIDA
NOTES TO BASIC FINANCIAL STATEMENTS
(Continued)
NOTE 14. DEFINED BENEFIT PENSION PLAN (Continued)
Annual Pension Cost and Net Pension Asset (Continued)
The annual required contribution for the current year was determined as part of the October 1,
2006 actuarial valuation using the entry age normal funding method. The actuarial
assumptions included (a) 8.5% investment rate of return (net of investment related expenses)
and (b) projected salary increases of 9.4% to 3.5% variable per year. Both (a) and (b)
included an inflation component of 4%. The actuarial value of assets was determined using
the difference between actual and expected return recognized over five years.
Trend Information
Annual Percentage Net Pension
Fiscal Year Pension of APC Obligation
Ended Cost (APC) Contributed (Asset)
9/30/2006 $ 733,878 99.5% $ (142,067)
9/30/2007 777,937 99.5% (125,650)
9/30/2008 843,538 99.5% (121,512)
NOTE 15. RISK MANAGEMENT
The Village is exposed to various risks of loss related to torts, theft of, damage to and destruction
of assets, errors and omissions and natural disasters for which the Village carries commercial
insurance. There was no reduction in insurance coverage from coverages in the prior year and
there were no settlements that exceeded insurance coverage for each of the past three years.
NOTE 16. PRIOR PERIOD ADJUSTMENT
Government -Wide
Governmental Activities:
Net assets of the governmental activities, as of October 1, 2007, were restated to correct
errors noted in the prior year as follows:
Net assets - beginning, as previously reported $ 40,137,561
Correction of accrued benefits payable $ 121,514
Correction of accounts payable (325,612)
Correction of accounts receivable 1,000,000
Total adjustment 795,902
Net assets - beginning, as restated $40,933,463
-43-
VILLAGE OF KEY BISCAYNE, FLORIDA
NOTES TO BASIC FINANCIAL STATEMENTS
(Continued)
NOTE 16. PRIOR PERIOD ADJUSTMENT (Continued)
Governmental Funds
General Fund:
Fund balance of the General Fund, as of October 1, 2007, was restated to reflect the
adjustment to add the accrued benefits payable incorrectly expensed in the year ended
September 30, 2007:
Fund balance - beginning, as previously reported
Correction of accrued benefits payable
Capital Improvement Fund:
$ 9,875,416
121,514
$ 9,996,930
Fund balance of the Capital Improvement Fund, as of October 1, 2007, was restated to reflect
the adjustment to add the receivable for grant funds related to a cost reimbursement grant in
which the funds were expended in the year ended September 30, 2007, and therefore the
revenues were to be recognized in that year:
Fund balance - beginning, as previously reported
Correction of accounts payable
Special Revenue Fund:
$ 2,954,753
(325,612)
$ 2,629,141
Fund balance of the Special Revenue Fund, as of October 1, 2007, was restated to reflect the
adjustment to add the accounts payable incorrectly expensed in the year ended September 30,
2007:
Fund balance - beginning, as previously reported
Correction of accounts receivable
$ (2,482,196)
1,000,000
$ (1,482,196)
-44-
REQUIRED SUPPLEMENTARY INFORMATION
VILLAGE OF KEY BISCAYNE, FLORIDA
REQUIRED SUPPLEMENTARY INFORMATION
BUDGETARY COMPARISON SCHEDULE
GENERAL FUND
FISCAL YEAR ENDED SEPTEMBER 30, 2008
Revenues:
Property taxes
Utility taxes
Franchise fees
Licenses and permits
Intergovernmental
Charges for services
Grants
Interest
Other income
Total revenues
Expenditures:
Current:
General government:
Elected officials
Village Clerk
Administration
Village Attorney
Total general government
Public safety:
Police
Fire
Total public safety
Public works
Building, zoning and planning
Parks and recreation
Debt service:
Principal
Interest and fiscal charges
Total expenditures
Excess of revenues over
expenditures
Other financing uses:
Appropriation of prior years'
reserves
Transfers out
Total other financing uses
Net change in fund balances
Budgeted Amounts
Original Final
$19,802,903
2,365,095
860,000
1,075,000
999,000
1,647,968
7,500
388,500
27,145,966
468,963
451,276
938,822
383,000
2,242,061
Actual
Amounts
on a GAAP
Basis
$ 19,802,903 $ 20,051,239 $
2,365,095 2,458,388
860,000 1,064,666
1,075,000 1,240,290
999,000 960,045
1,647,968 1,994,396
7,500 251,180
223,907
388,500 8,003
27,145,966 28,252,114
468,963
451,276
938,822
383,000
429,974
312,383
852,940
734,351
2,242,061 2,329,648
5,104,248 5,104,248 4,863,765
5,568,523 5,568,523 5,744,775
10,672,771 10,672,771 10,608,540
1,921,489 1,921,489 1,720,689
1,640,675 1,640,675 1,513,019
2,956,003 2,956,003 3,335,004
1,586,219 1,586,219 1,379,605
1,593,683 1,593,683 1,145,804
22,612,901 22,612,901 22,032,309
4,533,065
(4,533,065)
(4,533,065)
4,533,065 6,219,805
(4,533,065) (4,561,228)
Prior
Year
Reserves
Actual
Amounts
on a
Budgetary
Basis
$ 20,051,239
2,458,388
1,064,666
- 1,240,290
- 960,045
1,994,396
251,180
- 223,907
8,003
(351,351)
28,252,114
429,974
312,383
852,940
383,000
(351,351) 1,978,297
(176,252)
(176,252)
(379,001)
Variance
with Final
Budget -
Positive
(Negative)
$ 248,336
93,293
204,666
165,290
(38,955)
346,428
243,680
223,907
(380,497)
1,106,148
38,989
138,893
85,882
263,764
4,863,765 240,483
5,568,523 -
10,432,288 240,483
1,720,689 200,800
1,134,018 506,657
3,335,004 (379,001)
1,379,605 206,614
1,145,804 447,879
(906,604) 21,125,705 1,487,196
906,604 7,126,409
2,593,344
(906,604) (906,604) (906,604)
- (4,561,228) (28,163)
(4,533,065) (4,561,228) (906,604) (5,467,832) (934,767)
$ - $
1,658,577 $ - $ 1,658,577 $ 1,658,577
See note to budgetary comparison schedule.
-45-
VILLAGE OF KEY BISCAYNE, FLORIDA
REQUIRED SUPPLEMENTARY INFORMATION
NOTE TO BUDGETARY COMPARISON SCHEDULE
FISCAL YEAR ENDED SEPTEMBER 30, 2008
NOTE 1. BUDGETS AND BUDGETARY ACCOUNTING
An annual appropriated budget is prepared for the general fund. The Village prepares a budget
for its special revenue fund and its capital projects fund, however, these budgets are prepared as
project budgets and not as annually appropriated budgets.
The Village follows these procedures in establishing the budgetary data reflected in the financial
statements:
(a) The Village Manager submits to the Council a proposed operating budget for the ensuing
fiscal year. The operating budget includes appropriations and the means of financing them
with an explanation regarding each expenditure that is not of a routine nature.
(b) Public hearings are conducted to obtain taxpayer comments.
(c) Prior to October 1, the budget is legally enacted through passage of an ordinance.
(d) The Village Council, by motion, may make supplemental appropriations for the year up to
the amount of revenues in excess of those estimated. During fiscal year ended September 30,
2008, there were no supplemental appropriations.
(e) Formal budgetary integration is employed as a management control device for the general
fund.
(f) The budget for the general fund is adopted on a basis consistent with generally accepted
accounting principles (GAAP), except for certain unbudgeted expenditures of prior year
reserves.
(g) The Village Manager is authorized to transfer part or all of an encumbered appropriation
balance within depai laments within a fund; however, any revisions that alter the total
appropriations of any department or fund must be approved by the Village Council.
(h) There were no budget amendments during fiscal year ended September 30, 2008.
(i) The classification detail at which expenditures may not legally exceed appropriations is at
the depai lucent level.
-46-
VILLAGE OF KEY BISCAYNE, FLORIDA
REQUIRED SUPPLEMENTARY INFORMATION
PENSION TRUST FUND
SCHEDULE OF FUNDING PROGRESS
Actual
Valuation
Date
10/1/02
10/1/03
10/1/04
10/1/05
10/1/06
10/1/07
Actuarial
Value of
Assets
$ 2,360,957
3,309,812
4,400,914
5,703,772
7,255,221
9,017,393
Actuarial
Accrued
Liability Unfunded
(AAL) - AAL
Entry Age (UAAL)
(b) - (a)
$ 5,430,198 $ 3,069,241
6,678,603 3,368,791
8,021,413 3,620,499
9,379,732 3,675,960
10,782,826 3,527,605
12,335,707 3,318,314
Funded
Ration
(a) / (b)
43.5%
49.6%
54.9%
60.8%
67.3%
73.1%
Covered
Payroll
$ 3,984,900
4,278,629
4,960,542
5,320,018
5,355,088
5,740,991
UAAL
As%of
Covered
Payroll
(b - a) / c
77.0%
78.7%
73.0%
69.1%
65.9%
58%
-47-
VILLAGE OF KEY BISCAYNE, FLORIDA
REQUIRED SUPPLEMENTARY INFORMATION
PENSION TRUST FUND
SCHEDULE OF EMPLOYER CONTRIBUTIONS
Year Annual
Ended Required Percentage
September 30, Contribution Contributed
2003 $ 465,562 100%
2004 515,437 100%
2005 764,420 100%
2006 729,857 100%
2007 773,701 100%
2008 810,021 100%
-48-
STATISTICAL SECTION
STATISTICAL SECTION
This part of the Village of Key Biscayne's comprehensive annual financial report presents detailed information
as a context for understanding what the information in the financial statements, note disclosures, and required
supplementary information says about the Village's overall financial health.
Contents Page
Financial Trends
These schedules contain trend information to help the reader understand how the Village's 49-53
financial performance and well-being have changed over time. These schedules include:
Revenue Capacity
These schedules contain information to help the reader assess the Village's most significant local 54-58
revenue source, the property tax.
Debt Capacity
These schedules present information to help the reader assess the affordability of the Village's 59-62
current levels of outstanding debt and the Village's ability to issue additional debt in the future.
Demographic and Economic Information
These schedules offer demographic and economic indicators to help the reader understand the 63-65
environment within which the Village's financial activities take place.
Operating Information
These schedules contain service and infrastructure data to help the reader understand how the
information in the Village's financial report relates to the services the Village provides and the
activities it performs.
66-67
Sources: Unless otherwise noted, the information in these schedules is derived from the comprehensive
annual financial reports for the relevant year.
VILLAGE OF KEY BISCAYNE, FLORIDA
NET ASSETS BY COMPONENT
LAST SIX FISCAL YEARS
(ACCRUAL BASIS OF ACCOUNTING)
Fiscal Year
Governmental activities:
Invested in capital assets, net of related debt
Restricted
Unrestricted
Total governmental activities net assets
Business -type activities:
Invested in capital assets, net of related debt
Restricted
Unrestricted
Total business -type activities net assets
Total government:
Invested in capital assets, net of related debt
Restricted
Unrestricted
Total government net assets
2003
$ 23,889,001
171,680
4,161,688
28,222 369
2004
$ 26,149,714
283,180
2,809,659
29 242 553
2005
$ 26,284,600
326,826
4,302,680
30 914 106
2006
$ 28,676,266
359,899
4,926,634
33 962 799
7 7 7 7 7 7
2,024,755
1,388,975
3,413,730
25,913,756
171,680
5,550,663
$ 31,636,099
1,768,078
1,254,664
3,022,742
27,917,792
283,180
4,064,323
$ 32,265,295
1,931,844
1,281,141
3,212,985
28,216,444
326,826
5,583,821
$ 34,127,091
Note: The Village implemented GASB Statement No. 34 for the fiscal year ended September 30, 2003.
-49-
2,326,089
778,320
3,104,409
31,002,355
359,899
5,704,954
$ 37,067,208
2007
$ 31,422,358
261,813
8,453,390
40,137,561
2,505,881
432,133
2,93 8,014
2008
$ 36,139,953
284,639
10,924,001
47,348,593
10,174,333
(2,209,685)
7,964,648
33,928,239 46,314,286
261,813 284,639
8,885,523 8,714,316
$ 43,075,575 $ 55,313,241
VILLAGE OF KEY BISCAYNE, FLORIDA
CHANGES IN NET ASSETS
LAST SIX FISCAL YEARS
(ACCRUAL BASIS OF ACCOUNTING)
Fiscal Year
Expenses:
Governmental activities:
General government
Fire
Police
Building, zoning and planning
Public works
Parks and recreation
Interest on long-term debt
Total governmental activities
Business -type activities:
Stormwater system
Solid waste collection
Sanitary sewer
Total business -type activities
Total government expenses
Program revenues:
Governmental activities:
Charges for services:
General government
Police
Fire
Parks and recreation
Building, zoning and planning
Operating grants and contributions
Capital grants and contributions
Total governmental activities program revenues
Business -type activities:
Charges for services:
Stormwater system
Solid waste collection
Capital grants and contributions:
Sanitary sewer
Total business -type activities program revenues
Total program revenues
2003
$ 5,691,379
4,821,645
4,787,090
1,252,012
963,676
826,695
1,064,028
19,406,525
634,361
273,076
6,288
913,725
$ 20,320,250
$ 1,034,247
110,215
5,805
29,752
117,705
99,830
421,085
1,818,639
531,164
313,492
2004 2005
$ 3,614,636
4,738,402
4,311,449
1,220,180
1,103,940
1,013,741
1,487,245
17,489,593
$ 2,914,734
4,867,525
4,373,145
1,235,175
2,189,673
2,614,785
1,305,383
19,500,420
971,081 454,963
259,173 466,162
15,732 10,261
1,245,986 931,386
18,735,579 $ 20,431,806
$ 961,100
197,244
6,505
35,787
86,455
524,736
1,811,827
520,729
284,900
$ 1,257,895
212,121
7,120
1,287,806
142,550
650,679
517,643
4,075,814
518,812
533,632
2006
$ 4,252,037
4,947,149
4,275,617
1,547,042
4,004,651
2,849,434
1,413,272
23,289,202
720,158
501,417
9,993
1,231,568
$ 24,520,770
$ 1,466,186
40,719
50,392
1,512,923
167,802
3,559,753
6,797,775
517,365
531,967
2007
$ 3,781,396
5,257,789
4,651,660
1,447,968
1,589,444
3,077,624
1,505,253
21,311,134
693,135
571,246
9,454
1,273,835
$ 22,584,969
$ 1,389,163
21,385
40,144
1,416,707
193,391
799,493
3,860,283
509,571
520,650
2008
$ 3,213,273
6,399,665
5,272,383
1,529,272
2,046,776
3,633,233
1,436,481
23,531,083
911,500
619,823
9,046
1,540,369
$ 25,071,452
$ 1,320,004
14,203
146,588
1,620,787
133,104
251,180
3,485,866
499,101
530,803
5,460,763
844,656 805,629 1,052,444 1,049,332 1,030,221 6,490,667
$ 2,663,295 $ 2,617,456 $ 5,128,258 $ 7,847,107 $ 4,890,504 $ 9,976,533
-50-
(Continued)
VILLAGE OF KEY BISCAYNE, FLORIDA
CHANGES IN NET ASSETS
(Continued)
LAST SIX FISCAL YEARS
(ACCRUAL BASIS OF ACCOUNTING)
Fiscal Year
Net (expense) revenue:
Governmental activities
Business -type activities
Total net expense
General revenues:
Governmental activities:
Taxes:
Property taxes
Utility taxes
Franchise fees
Communications services tax
Intergovernmental
Investment earnings
Miscellaneous
Transfers
Total governmental activities
Business -type activities:
Investment earnings
Transfers
Total business -type activities
Total general revenues
Change in net assets:
Governmental activities
Business -type activities
Total change in net assets
2003
2004
2005
2006
2007
2008
$ (17,587,886) $ (15,677,766) $ (15,424,606) $ (16,491,427) $ (17,450,851) $ (20,045,217)
(69,069) (440,357) 121,058 (182,236) (243,614) 4,950,298
$ (17,656,955) $ (16,118,123) $ (15,303,548) $ (16,673,663) $ (17,694,465) $ (15,094,919)
$ 11,317,161
2,251,876
611,502
776,869
82,286
200,561
(9,737)
$ 12,770,711
2,219,118
677,203
821,883
110,562
126,607
(28,134)
15,230,518 16,697,950
22,163
9,737
31,900
$ 15,262,418
$ 13,360,251 $
1,488,002
705,810
746,400
978,304
255,611
281,657
(28,135)
17,787,900
14,830,238
1,549,601
1,088,929
797,054
996,092
306,339
(28,133)
19,540,120
21,235 41,050 45,527
28,134 28,135 28,133
49,369 69,185 73,660
16,747,319 $ 17,857,085 $ 19,613,780
$ 18,667,979
1,467,392
1,113,194
763,801
1,000,265
641,115
(28,133)
23,625,613
$ 20,051,239
1,534,379
1,064,666
1,226,423
2,265,243
346,531
(28,134)
26,460,347
49,086 48,202
28,133 28,134
77,219 76,336
23,702,832 $ 26,536,683
$ (2,357,368) $ 1,020,184 $ 2,363,294 $ 3,048,693 $ 6,174,762 $ 6,415,130
(37,169) (390,988) 190,243 (108,576) (166,395) 5,026,634
$ (2,394,537) $ 629,196 $ 2,553,537 $ 2,940,117 $ 6,008,367 $ 11,441,764
Note: The Village implemented GASB Statement No. 34 for the fiscal year ended September 30, 2003.
-51-
VILLAGE OF KEY BISCAYNE, FLORIDA
FUND BALANCES OF GOVERNMENTAL FUNDS
LAST SIX FISCAL YEARS
(MODIFIED ACCRUAL BASIS OF ACCOUNTING)
Fiscal Year
General fund:
Reserved
Unreserved
Total general fund
All other governmental funds:
Reserved
Unreserved, reported in:
Special revenue fund
Capital projects funds
Total all other governmental funds
Total governmental funds
2003 2004 2005
2006 2007 2008
$ 2,967,382 $ 4,677,188 $ 5,754,277 $ 6,874,310 $ 9,875,416 $ 11,298,178
1,000,177 275,000
3,967,559 4,952,188 5,754,277 6,874,310 9,875,416 11,298,178
198,563 513,862 (638,221) (1,496,749) (2,482,196)
905,611 (489,979) 881,595 1,421,014 2,954,753
1,104,174 23,883 243,374 (75,735) 472,557 2,081,599
$ 5,071,733 $ 4,976,071 $ 5,997,651 $ 6,798,575 $ 10,347,973 $ 13,379,777
(2,701,623)
4,783,222
Note: The Village implemented GASB Statement No. 34 for the fiscal year ended September 30, 2003.
-52-
VILLAGE OF KEY BISCAYNE, FLORIDA
CHANGES IN FUND BALANCES OF GOVERNMENTAL FUNDS
LAST SIX FISCAL YEARS
(MODIFIED ACCRUAL BASIS OF ACCOUNTING)
Fiscal Year
Revenues:
Ad valorem taxes
Franchise fees
Utility taxes
Licenses and permits
Intergovernmental revenue
Charges for services
Grants
Investment income
Miscellaneous
Total revenues
Expenditures:
Current:
General government
Fire
Police
Public works
Building, planning and zoning
Parks and recreation
Capital outlay
Debt service:
Principal retirement
Interest and other fiscal charges
Total expenditures
Excess (deficiency) of revenues
over expenditures
Other financing sources (uses):
Transfers in
Transfers out
Bonds issued
Capital lease proceeds
Total other financing sources (uses)
Net change in fund balances
Debt service as a percentage
of non -capital expenditures
2003
$11,317,161
611,502
2,251,876
970,001
999,391
327,723
99,830
82,286
399,124
17,058,894
1,829,501
4,046,269
4,3 05,474
963,247
1,245,119
782,065
5,108,330
2004
$12,770,711
677,203
2,219,118
961,100
1,031,805
325,651
110,562
441,761
18,537,911
2005 2006
2007 2008
$ 13,360,251 $ 14,830,238 $ 18,667,979 $ 20,051,239
1,452,210 1,885,983 1,113,194 1,064,666
1,488,002 1,549,601 2,231,193 1,534,379
1,040,130 1,196,853 1,298,133 1,240,290
1,495,947 1,756,083 1,593,718 3,189,251
1,867,362 2,041,169 1,762,657 1,994,396
650,679 2,799,762 206,040 251,180
255,611 306,339 632,355 338,528
281,657 - 8,762 8,003
21,891,849 26,366,028 27,514,031 29,671,932
1,712,899 2,136,375 2,239,052 2,543,134 2,329,647
4,462,601 4,749,407 5,117,176 5,122,699 5,744,775
4,113,946 4,605,148 4,388,362 4,590,962 4,863,765
1,098,250 2,183,774 4,002,609 1,587,460 1,720,689
1,212,290 1,238,376 1,544,696 1,455,193 1,513,019
952,261 2,193,633 2,634,887 2,830,020 3,367,638
10,664,348 4,527,998 6,432,271 6,830,844 4,743,796
1,415,000 1,583,924
1,064,028 1,135,384
20,759,033 26,935,903
1,161,298 1,214,646 1,418,401 1,679,991
1,300,596 1,413,272 1,556,396 1,444,576
24,096,605 28,986,971 27,935,109 27,407,896
(3,700,139) (8,397,992) (2,204,756) (2,620,943)
938,652
(948,389)
1,657,090
1,647,353
$ (2,052,786)
11.94%
819,251
(847,385)
8,330,462
8,302,328
$ (95,664)
10.10%
1,245,653
(1,273,788)
2,850,000
404,471
1,731,583
(1,759,716)
3,450,000
3,226,336 3,421,867
(421,078) 2,264,036
6,697,854 4,533,094
(6,725,988) (4,561,228)
4,000,000
3,971,866 (28,134)
$ 1,021,580 $ 800,924 $ 3,550,788 $ 2,235,902
10.22% 9.07% 10.65% 9.21%
Note: The Village implemented GASB Statement No. 34 for the fiscal year ended September 30, 2003.
-53-
VILLAGE OF KEY BISCAYNE, FLORIDA
GENERAL GOVERNMENTAL TAX REVENUES BY SOURCE
LAST TEN FISCAL YEARS
(MODIFIED ACCRUAL BASIS OF ACCOUNTING)
Fiscal Ad Valorem
Year Taxes
1999 $ 7,012,714
2000 7,799,633
2001 8,737,608
2002 9,569,030
2003 11,317,161
2004 12,770,711
2005 13,360,125
2006 14,830,238
2007 18,667,979
2008 20,051,239
Franchise
Taxes
$ 740,031
729,998
738,513
639,072
611,502
677,203
705,810
1,088,929
1,113,194
1,064,666
Utility
Taxes
$ 1,621,473
1,723,902
1,772,208
2,258,931
2,251,876
2,219,118
2,234,402
1,549,601
1,467,392
610,371
Inter-
governmental*
Communications
Services Tax**
$ 807,924 $
889,704
930,169
971,136
999,391
1,031,805
1,140,599
1,756,083
1,593,718
3,189,251
Total
$ 10,182,142
11,143,237
12,178,498
904,475 14,342,644
825,739 16,005,669
770,637 17,469,474
746,400 18,187,336
797,054 20,021,905
763,801 23,606,084
924,008 25,839,535
Source: Village of Key Biscayne Finance Department.
*Includes half -cent sales tax and state revenue sharing.
**Communications services tax became effective October 1, 2001, replacing utility taxes and franchise fees on telephone
and cable TV.
-54-
i
VILLAGE OF KEY BISCAYNE, FLORIDA
NET ASSESSED VALUE AND ESTIMATED ACTUAL VALUE OF TAXABLE PROPERTY
LAST TEN FISCAL YEARS
Fiscal Year
Ended
September 30,
1999
2000
2001
2002
2003
2004
2005
2006
2007
2008
Real Property
Residential
Property
$ 2,13 7,666,293
2,394,282,542
2,618,160,883
3,128,872,469
3,506,812,044
3,713,841,630
4,115,175,292
5,421,393,923
6,173,257,097
6,040,318,378
Commercial
Property
$ 67,704,896
75,832,533
82,923,284
99,098,715
111,068,946
117,626,058
130,346,736
166,638,240
294,540,559
326,676,816
Personal
Property
$ 27,086,715
28,934,086
30,749,478
31,948,797
43,233,556
43,867,688
41,852,920
47,020,078
46,315,146
38,432,567
Total Net
Assessed
Value
$ 2,232,457,904
2,499,049,161
2,731,833,645
3,259,919,981
3,661,114,546
3,875,335,376
4,287,374,948
5,635,052,241
6,514,112,802
6,405,427,760
Total
Direct
Tax
Rate
3.606
3.606
3.606
3.606
3.606
3.606
3.606
3.606
3.450
3.200
Note: Property in the Village is reassessed each year. Property is assessed at actual value, therefore, the
assessed values are equal to actual value. Tax rates are per $1,000 of assessed value.
Source: Miami -Dade County Property Appraiser's Office.
-55-
VILLAGE OF KEY BISCAYNE, FLORIDA
PROPERTY TAX RATES - DIRECT AND OVERLAPPING GOVERNMENTS
LAST TEN FISCAL YEARS
Village of Key Biscayne Overlapping Rates (1)
Miami -Dade County Miami -Dade Schools Florida South Total
Debt Total Debt Total Inland Florida Direct and
Fiscal Tax Roll General Debt Total Operating Service County Operating Service School Navigation Water Overlapping
Year Year Operations Service Village Millage Millage Millage Millage Millage Millage District Management Other Rates
1999 1998 3.606 3.606 6.023 0.837 6.860 9.182 0.978 10.160 0.047 0.597 0.434 21.704
2000 1999 3.606 3.606 5.809 0.816 6.625 8.654 0.990 9.644 0.044 0.597 0.421 20.937
2001 2000 3.606 - 3.606 5.751 0.652 6.403 8.702 0.915 9.617 0.041 0.597 0.451 20.715
2002 2001 3.606 3.606 5.713 0.552 6.265 8.528 0.848 9.376 0.039 0.697 0.451 20.434
2003 2002 3.606 - 3.606 5.889 0.390 6.279 8.482 0.770 9.252 0.039 0.697 0.451 20.324
2004 2003 3.606 3.606 5.969 0.285 6.254 8.418 0.682 9.100 0.039 0.597 1.086 20.682
2005 2004 3.606 - 3.606 5.935 0.285 6.220 8.090 0.597 8.687 0.039 0.597 1.030 20.179
2006 2005 3.606 - 3.606 5.835 0.285 6.120 7.947 0.491 8.438 0.039 0.597 1.014 19.814
2007 2006 3.450 - 3.450 5.615 0.285 5.900 7.691 0.414 8.105 0.039 0.597 1.008 19.099
2008 2007 3.200 - 3.200 5.220 0.285 5.505 7.533 0.264 7.797 0.035 0.535 0.511 17.582
Note: All millage rates are based on $1 for every $1,000 of assessed value.
Sources: Village of Key Biscayne Finance Department and Miami -Dade County Property Appraiser's Office.
(1) Overlapping rates are those of local and county governments that apply to property owners within the Village of Key Biscayne. Not all overlapping rates apply to
all Village of Key Biscayne property owners (i.e. the rates for special districts apply only to the proportion of the government's property owners whose property is
located within the geographic boundaries of the special district).
-56-
1
VILLAGE OF KEY BISCAYNE, FLORIDA
PRINCIPAL PROPERTY TAXPAYERS
CURRENT YEAR AND NINE YEARS AGO
2008
Taxpayer
SBR Fortune Associates
GB Hotel Partners LTD
EDW A McCarthy - Archbishop
Galleria if Key Biscayne Inc
Red Dragon's Sands LTD
United Real Estate Ventures Inc
Key Biscayne Properties LLC
260 Cape FLA LLC
500 Bay Lane LLC
Tesaurus Holdings Inc
Net
Assessed
Value
Percent of
Total
Village Net
Assessed
Rank Value
$ 48,975,240 1
46,000,000 2
23,587,659 3
20,342,084 4
16,262,248 5
13,852,526 6
13,758,300 7
13,470,750 8
13,229,323 9
12,770,650 10
$ 222,248,780
0.76%
0.72%
0.37%
0.32%
0.25%
0.22%
0.21%
0.21%
0.21%
0.20%
3.47%
Source: Tax roll provided by Miami -Dade County Property Appraisers Office.
1999
Taxpayer
Ocean Club Key Biscayne
Sonesta Beach Hotel
GB Hotel Partners LTD
Grand Bay Tower Association
Key Biscayne Shopping Center
Galleria of Key Biscayne
PITI, Inc
Red Dragon's Sands, LTD
Fininvest Investment, et al (Key Colony)
Caroline T. Perkins
-57-
Percent of
Total
Net Village Net
Assessed Assessed
Value Rank Value
$ 39,590,009 1 1.80%
28,700,000 2 1.30%
23,341,830 3 1.06%
12,855,305 4 0.58%
8,672,526 5 0.39%
7,369,463 6 0.33%
5,251,313 7 0.24%
4,977,558 8 0.23%
4,193,744 9 0.19%
3,547,661 10 0.16%
$ 13 8,499,409
6.28%
VILLAGE OF KEY BISCAYNE, FLORIDA
PROPERTY TAX LEVIES AND COLLECTIONS
LAST TEN FISCAL YEARS
Fiscal Year
Ended
September 30,
1999
2000
2001
2002
2003
2004
2005
2006
2007
2008
Total Taxes
Levied for
Fiscal
Year
$ 7,313,596
8,050,243
9,011,571
9,850,992
11,755,271
13,201,979
13,974,460
15,461,356
19,423,659
20,591,128
Collected within
the Fiscal Year
of the Levy
Amount
$ 7,012,714
7,799,633
8,738,608
9,515,138
11,317,160
12,869,711
13,360,251
14,830,238
18,667,979
20,013,549
Collections in
Percent Subsequent
of Levy Year's
95.89% $ 10,519
96.89% 11,699
96.97% 13,108
96.59% 14,273
96.27% 16,976
97.48% 19,305
95.60% 20,040
95.92% 22,245
96.11% 28,002
97.20% 37,690
Total Collections
to Date
Amount
$ 7,023,233
7,811,332
8,751,716
9,529,411
11,334,136
12,889,016
13,3 80,291
14,852,483
18,695,981
20,051,239
Percent
of Levy
96.03%
97.03%
97.12%
96.74%
96.42%
97.63%
95.75%
96.06%
96.25%
97.38%
Source: Village of Key Biscayne Finance Department and Miami -Dade County Tax Collector's Office.
-58-
VILLAGE OF KEY BISCAYNE, FLORIDA
RATIOS OF OUTSTANDING DEBT BY TYPE
LAST TEN FISCAL YEARS
Governmental Activities
Business -Type
Activities
Fiscal Year General Percent of
Ended Obligation Revenue Loans Revenue Personal Per
September 30., Bonds Bonds Payable Bonds Total Income (1) Capita (1)
1999 $ - $ 22,290,000 $ - $ 7,200,000 $ 29,490,000 0.00% $ -
2000 - 21,220,000 - 7,065,000 28,285,000 0.00% 2,742
2001 30,120,000 - 6,940,000 37,060,000 0.00% 3,592
2002 - 29,935,000 - 6,810,000 36,745,000 0.00% 3,562
2003 - 29,271,000 6,625,000 35,896,000 0.00% 3,479
2004 - 29,164,892 6,430,000 35,594,892 0.00% 3,450
2005 30,850,606 6,010,000 36,860,606 0.00% 3,573
2006 33,085,960 - 5,785,000 38,870,960 0.00% 3,768
2007 - 31,695,102 - 5,200,000 36,895,102 0.00% 3,576
2008 - 33,987,811 5,000,000 5,539,919 44,527,731 0.00% 4,238
Note: Details regarding the Village's outstanding debt can be found in the notes to the financial statements.
(1) See the Schedule of Demographic and Economic Statistics on page 61 for personal income and population data.
-59-
VILLAGE OF KEY BISCAYNE, FLORIDA
RATIOS OF GENERAL BONDED DEBT OUTSTANDING
LAST TEN FISCAL YEARS
The Village does not have general obligation debt.
VILLAGE OF KEY BISCAYNE, FLORIDA
DIRECT AND OVERLAPPING GOVERNMENTAL ACTIVITIES DEBT
SEPTEMBER 30, 2008
2008
Government Unit
Direct:
Village of Key Biscayne
Percentage Amount
Net Applicable to Applicable to
Debt the Village of the Village of
Outstanding Key Biscayne (1) Key Biscayne
$ 44,527,731 100.00% $ 44,527,731
Overlapping debt:
Miami -Dade County 507,316,000 2.98% 15,118,017
Miami -Dade County School Board 560,574,000 2.98% 16,705,105
Subtotal, Overlapping Debt
Village of Key Biscayne Direct Debt
31,823,122
44,527,731
Total Direct and Overlapping Debt $ 76,350,853
Sources: Data provided by the Miami -Dade County Finance Department and the Miami -Dade County School
Board.
Note: Overlapping governments are those that coincide, at least in part, with the geographic boundaries of the
Village. This schedule estimates the portion of the outstanding debt of those overlapping governments that is borne
by the residents and businesses of the Village of Key Biscayne. This process recognizes that, when considering the
Village's ability to issue and repay long-term debt, the entire debt burden borne by the residents and businesses
should be taken into account. However, this does not imply that every taxpayer is a resident, and therefore
responsible for repaying the debt, of each overlapping government.
(1) For debt repaid with property taxes, the percentage of overlapping debt applicable is estimated using taxable
assessed property values. Value that is within the Village's boundaries and dividing it by the County's and School
Board's total taxable assessed value. This approach was also used for the other debt.
-61-
VILLAGE OF KEY BISCAYNE, FLORIDA
PLEDGED REVENUE COVERAGE
LAST TEN FISCAL YEARS
Fiscal Year Non -
Ended Ad Valorem Debt Service
September 30, Revenues Principal Interest Coverage
1999 $ 5,364,921 $ 895,000 $ 241,329 4.72
2000 5,324,756 935,000 595,767 3.48
2001 5,777,408 975,000 631,875 3.60
2002 5,426,424 1,015,000 1,420,845 2.23
2003 5,315,452 1,415,000 590,737 2.65
2004 5,305,171 1,583,924 1,107,696 1.97
2005 7,879,761 1,161,298 1,300,596 3.20
2006 10,433,952 1,350,001 1,351,729 3.86
2007 7,924,921 1,283,285 1,302,200 3.07
2008 9,620,693 1,679,991 1,444,576 3.81
Source: Village of Key Biscayne Finance Department
-62-
VILLAGE OF KEY BISCAYNE, FLORIDA
DEMOGRAPHIC AND ECONOMIC STATISTICS
LAST TEN FISCAL YEARS
Personal
Income
(Amounts Per Capita
Expressed in Personal Unemployment
Year Population (1) Thousands) (2) Income (3) Rate (4)
1999 - $ - $ - 5.9%
2000 10,317 - 86,599 5.6%
2001 10,317 86,599 5.7%
2002 10,317 - 86,599 7.4%
2003 10,317 86,599 7.3%
2004 10,317 - 86,599 5.0%
2005 10,317 - 89,400 3.9%
2006 10,317 - 89,400 3.8%
2007 10,317 - 89,400 3.8%
2008 10,507 - 86,599 3.1%
Sources:
(1) United States Census Bureau, 2000 Census data. Prior to 2000, data not available.
(2) Information not available.
(3) Years 2000-2004, U.S. Census 2000, Year 2005 City Data.com.
(4) U.S. Department of Labor. Rates are for Miami -Dade County.
Note: Population is based on surveys conducted during the last quarter of the calendar year. Personal
income information is a total for the year. Unemployment rate information is an adjusted yearly average.
-63-
VILLAGE OF KEY BISCAYNE, FLORIDA
PRINCIPAL EMPLOYERS
CURRENT YEAR AND NINE YEARS AGO
2008 1999
Employer
Percentage of Percentage of
Total Village Total Village
Employees (1) Rank Employment Employees Rank Employment
Ritz Carlton Key Biscayne 1,500 1 not known
Winn Dixie Stores, Inc. 250 3 not known
Village of Key Biscayne 105 4 not known
All remaining employers are of an extremely small number Information not available
Total 1,855
Notes: (1) All amounts are estimated for timely inclusion in report. Requests for information received no response.
-64-
VILLAGE OF KEY BISCAYNE, FLORIDA
FULL-TIME EQUIVALENT VILLAGE GOVERNMENT EMPLOYEES BY FUNCTION
LAST TEN FISCAL YEARS
1999 2000 2001 2002 2003 2004 2005 2006 2007 2008
Number of employees:
General government
Public safety
Building, planning & zoning
Public works
Parks and recreation
8 7 7 7 5 6 7 6 6 6
71 72 72 72 74 76 79 79 79 78
10 16 16 16 12 12 13 13 14 13
2 3 3 3 5 5 5 5 4 4
3 4 3 4 4 4 6 6 7 7
Total number of employees 94 102 101 102 100 103 110 109 110 108
Source: Village of Key Biscayne Finance Department.
-65-
VILLAGE OF KEY BISCAYNE, FLORIDA
OPERATING INDICATORS BY FUNCTION/PROGRAM
LAST TEN FISCAL YEARS
Function/Program 1999 2000 2001 2002 2003 2004 2005 2006 2007 2008
Public safety:
Police:
Police personnel and officers 38 40 40 40 40 41 40 40 40 39
Police calls for service 20,846 21,127 20,659 21,127 20,660 19,004 16,510 13,006 35,412 36,190
Parking violations 901 789 639 789 639 628 682 801 996 776
Traffic violations 2,737 2,875 2,433 2,875 2,433 3,035 1,397 1,468 1,104 946
Fire:
Fire personnel 33 33 33 33 34 35 39 39 39 39
Fire incidents 868 1,051 485 1,050 1,114 1,148 1,403 1,103 998 1,006
Fire inspections performed 197 565 470 476 840 307 332 269 220 305
Planning and development:
Business permits issued 2,851 2,408 1,803 2,313 2,581 3,061 3,045 3,000 3,504 3,620
Occupational licenses issued 576 598 625 729 668 428 433 475 914 1,224
Culture and recreation:
Number of building users - - - - 1,250 1,600 1,400 1,400 1,300
Solid waste:
Residential accounts 1,200 1,200 1,200 1,200 1,200 1,200 1,200 1,200 1,200 1,299
Sources: Various Village Departments.
Note: Indicators are not available for the general government function.
-66-
VILLAGE OF KEY BISCAYNE, FLORIDA
CAPITAL ASSET STATISTICS BY FUNCTION/PROGRAM
LAST TEN FISCAL YEARS
Function/Program 1999 2000 2001 2002 2003 2004 2005 2006 2007 2008
General government:
Number of general government buildings 1 1 1 1 1 1 1 1 1 1
Public safety:
Police:
Police stations 1 1 1 1 1 1 1 1 1 1
Patrol units 3 3 3 3 3 3 3 3 3 3
Fire:
Fire stations 1 1 1 1 1 1 1 1 1 1
Transportation:
Miles of streets
Number of street lights
Number of traffic signals
22.4 22.4 22.4 22.4 22.4 22.4 22.4 22.4 22.4 22.4
250 250 250 300 300 300 300 300 300 300
4 4 4 4 4 4 4 4 4 4
Culture and recreation:
Parks 3 3 3 3 3 3 3 3 3 3
Parks acreage 9 9 9 9 9 9 9 9 9 9
Community center - - - - - - 1 1 1 1
Swimming pools - - - - - 1 1 1 1
Sources: Various Village Departments.
-67-
COMPLIANCE SECTION
MARCUM
RACH LI N
ACCOUNTANTS ♦ ADVISORS
Report of Independent Certified Public Accountants 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
Honorable Mayor, Village Council and Village Manager
Village of Key Biscayne, Florida
We have audited the financial statements of the governmental activities, the business -type activities, each
major fund, and the aggregate remaining fund information of the Village of Key Biscayne, Florida (the
Village) as of and for the fiscal year ended September 30, 2008, and have issued our report thereon
dated July 29, 2009. We conducted our audit in accordance with auditing standards generally accepted
in the United States and the standards applicable to financial audits contained in Government Auditing
Standards, issued by the Comptroller General of the United States.
Internal Control Over Financial Reporting
In planning and performing our audit, we considered the Village's internal control over financial
reporting as a basis for designing our auditing procedures for the purpose of expressing our opinion on
the financial statements, but not for the purpose of expressing an opinion on the effectiveness of the
Village's internal control over financial reporting. Accordingly, we do not express an opinion on the
effectiveness of the Village's internal control over financial reporting.
Our consideration of internal control over financial reporting was for the limited purpose described in the
preceding paragraph and would not necessarily identify all deficiencies in internal control over financial
reporting that might be significant deficiencies or material weaknesses. However, as discussed below,
we identified certain deficiencies in internal control over financial reporting that we consider to be
significant deficiencies.
A control deficiency 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
misstatements on a timely basis. A significant deficiency is a control deficiency, or combination of
control deficiencies, that adversely affects the Village's ability to initiate, authorize, record, process, or
report financial data reliably in accordance with generally accepted accounting principles such that there
is more than a remote likelihood that a misstatement of the Village's financial statements that is more
than inconsequential will not be prevented or detected by the Village's internal control. We consider the
deficiencies described in the accompanying schedule of findings and responses as item 08-01 to be
significant deficiencies in internal control over financial reporting.
-68-
MARCUMGROUP
MEMBER
MarcumRachlin a division of Marcum LLP ■ marcumrachlin.com
One Southeast Third Avenue • Tenth Floor • Miami, Florida 33131 • Phone 305.377.4228 • Fax 305.377.8331
FLORIDA • NEW YORK • NEW JERSEY • CONNECTICUT • GRAND CAYMAN
Honorable Mayor, Village Council and Village Manager
Village of Key Biscayne, Florida
Page Two
A material weakness is a significant deficiency, or combination of significant deficiencies, that results in
more than a remote likelihood that a material misstatement of the financial statements will not be
prevented or detected by the Village's internal control.
Our consideration of internal control over financial reporting was for the limited purpose described in the
first paragraph of this section and would not necessarily identify all deficiencies in internal control that
might be significant deficiencies and, accordingly, would not necessarily disclose all significant
deficiencies that are also considered to be material weaknesses. However, we consider item 08-01 in the
accompanying schedule of findings and responses to be a material weakness.
Compliance and Other Matters
As part of obtaining reasonable assurance about whether the Village's financial statements are free of
material misstatement, we performed tests of its compliance with certain provisions of laws, regulations,
contracts, grant agreements and other matters, 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 that are required to be
reported under Government Auditing Standards and which are described in the accompanying schedule
of findings and responses as item 08-02.
The Village's responses to the findings identified in our audit are described in the accompanying
schedule of findings and responses. We did not audit the Village's responses and, accordingly, we
express no opinion on it.
This report is intended solely for the information and use of the Mayor, Village Council, Village
Manager and regulatory agencies, and is not intended to be and should not be used by anyone other than
these specified parties.
-#2'17a4.,..... 1.el,/...
a division of Marcum LLP
Miami, Florida
July 29, 2009
-69-
MARCUM
RACH LI N
ACCOUNTANTS A ADVISORS
A division of Marcum LLP
MARCUM
RACH LI N
ACCOUNTANTS A ADVISORS
Management Letter in Accordance with the Rules of the Auditor General of the State of Florida
Honorable Mayor, Village Council and Village Manager
Village of Key Biscayne, Florida
We have audited the financial statements of the Village of Key Biscayne, Florida (the Village) as of and for
the fiscal year ended September 30, 2008, and have issued our report thereon dated July 29, 2009.
We conducted our audit in accordance with auditing standards generally accepted in the United States; the
standards applicable to financial audits contained in Government Auditing Standards, issued by the
Comptroller General of the United States. We have issued our Report of Independent Certified Public
Accountants on Internal Control over Financial Reporting and on Compliance and Other Matters based on
an audit of financial statements and schedule of findings and responses. Disclosures in that report and
schedule, which are dated July 29, 2009, should be considered in conjunction with this management letter.
Additionally, our audit was conducted in accordance with the provisions of Chapter 10.550, Rules of the
Auditor General, which governs the conduct of local governmental entity audits performed in the State of
Florida. This letter includes the following information, which is not included in the aforementioned
auditor's reports or schedule:
• Section 10.554(1)(i)1., Rules of the Auditor General, requires that we determine whether or not
corrective actions have been taken to address significant findings and recommendations made in the
preceding annual financial audit report. Corrective actions have been taken to address significant
findings and recommendations made in the preceding annual financial audit report.
• Section 10.554(1)(i)2., Rules of the Auditor General, requires our audit to include a review of the provisions
of Section 218.415, Florida Statutes, regarding the investment of public funds. In connection with our audit,
we determined that the Village complied with Section 218.415, Florida Statutes.
• Section 10.554(1)(i)3., Rules of the Auditor General, requires that we address in the management
letter any recommendations to improve financial management. In connection with our audit,
recommendations accompany this report in the schedule of findings and responses.
• Section 10.554(1)(i)4., Rules of the Auditor General, requires that we address violations of laws,
regulations, contracts or grant agreements, or abuse that have occurred, or are likely to have occurred,
that have an effect on the determination of financial statement amounts that is less than material but
more than inconsequential. In connection with our audit, our findings accompany this report in the
schedule of findings and responses.
• Section 10.554(1)(i)5., Rules of the Auditor General, requires, based on professional judgment, the
reporting of the following matters that are inconsequential to the financial statements, considering both
quantitative and qualitative factors: (1) violations of laws, rules, regulations, and contractual provisions
or abuse that have occurred, or were likely to have occurred, and would have an immaterial effect
-70-
MARCUMGROUP
MEMBER
MarcumRachlin a division of Marcum LLP ■ marcumrachlin.com
One Southeast Third Avenue • Tenth Floor • Miami, Florida 33131 • Phone 305.377.4228 • Fax 305.377.8331
FLORIDA • NEW YORK • NEW JERSEY • CONNECTICUT • GRAND CAYMAN
Honorable Mayor, Village Council and Village Manager
Village of Key Biscayne, Florida
Page Two
on the financial statements; (2) improper expenditures or illegal acts that would have an immaterial
effect on the financial statements; and (3) control deficiencies that are not significant deficiencies,
including, but not limited to; (a) improper or inadequate accounting procedures (e.g., the omission
of required disclosures from the financial statements); (b) failures to properly record financial
transactions; and (c) other inaccuracies, shortages, defalcations, and instances of fraud discovered
by, or that come to the attention of, the auditor. In connection with our audit, we did not have any
such findings.
■ Section 10.554(1)(i)6., Rules of the Auditor General, requires that the name or official title and
legal authority for the primary government and each component unit of the reporting entity be
disclosed in this management letter, unless disclosed in the notes to the financial statements.
Village of Key Biscayne was incorporated by the Laws of Florida, Act of 1955. There are no
component units related to the Village.
• Section 10.554(1)(i)7.a., Rules of the Auditor General, requires a statement be included as to
whether or not the local governmental entity has met one or more of the conditions described in
Section 218.503(1), Florida Statutes, and identification of the specific condition(s) met. In
connection with our audit, we determined that the Village did not meet any of the conditions
described in Section 218.503(1), Florida Statutes.
• Section 10.554(1)(i)7.b., Rules of the Auditor General, requires that we determine whether the
annual financial report for the Village for the fiscal year ended September 30, 2008, 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, 2008. In
connection with our audit, we determined that these two reports were in agreement.
■ Pursuant to Sections 10.554(1)(i)7.c. and 10.556(7), Rules of the Auditor General, we applied
financial condition assessment procedures. It is management's responsibility to monitor the
Village of Key Biscayne's financial condition, and our financial condition assessment was based in
part on representations made by management and the review of financial information provided by
same.
Pursuant to Chapter 119, Florida Statutes, this management letter is a public record and its distribution is
not limited. Auditing standards generally accepted in the United States require us to indicate that this
letter is intended solely for the information and use of management, and the Florida Auditor General, and
is not intended to be and should not be used by anyone other than these specified parties.
71e2o.ce.41044
Z.,/,....;
a division of Marcum LLP
Miami, Florida
July 29, 2009
-71-
MMRCUM
RACH LI N
ACCOUNTANTS • ADVISORS
A division of Marcum LLP
MARCUM
R A C H LI N
ACCOUNTANTS a ADVISORS
August 10, 2009
Honorable Mayor, Village Council and Village Manager
Village of Key Biscayne
88 West McIntyre Street
Key Biscayne, Florida 33149
This letter serves as an addendum to the "Management Letter in Accordance with the Rules of the
Auditor General of the State of Florida" dated July 29, 2009, and covering the Village of Key Biscayne's
(the Village) fiscal year ended September 30, 2008.
The following comment is hereby added to and incorporated in the above -referenced management letter:
Although the Village reported a deficit unreserved and unrestricted fund balance of
$(2,701,623) as of September 30, 2008 in its special revenue fund which is used for some of
its capital improvement programs (specifically its Crandon Boulevard Improvement Project),
the Village had reserved fund balances in the general fund to more than cover the deficit.
The Village Charter requires the Village to reserve all of the general fund unreserved fund
balance on an annual basis. Of the $11,298,178 reserved fund balance, $1,000,000 is
reserved for working capital, $1,130,089 is reserved for the Capita] Improvement Plan and
$4,000,000 is reserved for emergencies. Therefore, it appears that the Village would have
sufficient funds to cover any overall deficit.
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rez
MARCUIVIGROUP
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MarcumRachlin a division of Marcum up 0 marcumrachlin.conl
One Southeast Third Avenue B Tenth Floor la Miami, Florida 33131 E Phone 305.377.4228 w Fax 305.377.8331
FLORIDA a NEW YORK e NEW JERSEY ■ CONNECTICUT 0 GRAND CAYMAN
VILLAGE OF KEY BISCAYNE, FLORIDA
SCHEDULE OF FINDINGS AND RESPONSES
FISCAL YEAR ENDED SEPTEMBER 30, 2008
PRIOR YEAR FINDING AND STATUS
The following addresses the status of financial statement finding reported in the fiscal year ended
September 30, 2007 schedule of findings and responses:
Matters that are not repeated in the accompanying schedule of findings and responses:
• 06-01 — Village Credit Cards
CURRENT YEAR FINDINGS AND RECOMMENDATIONS
Material Weakness
08-01 Internal Controls Over Accounting and Financial Reporting
Criteria
Sound financial policies dictate that a formal closing process be in place for the review of transactions
and balances recorded on a monthly and annual basis. Accounting tasks such as monthly reconciliations,
cross-checks, and reviews play a key role in proving the accuracy of accounting data and financial
information that comprise interim and year-end financial statements. A designated management
individual such as the finance director must review all general ledger accounts and ensure that all
supporting schedules agree to the general ledger and be at least fairly knowledgeable on the GASB
pronouncements such as GASB 34 in order to be able to prepare or review and approve the year end
financial statements in accordance with generally accepted accounting principles (GAAP).
Condition
Our audit procedures included the performance of various procedures on the amounts recorded as assets,
liabilities, revenues, expenditures/expenses and fund balances/net assets among the various funds of the
Village. During the audit process we noted the following:
• Approximately 25 journal entries in total were booked throughout the funds from the original trial
balance received by the auditors including 3 prior period adjustments including several material
journal entries which were identified and proposed by the auditor:
• Entries were necessary to correct cash, accounts payable and capital assets.
• A prior period adjustment was recorded in order to include receivables and revenues for grant
funds expended in the prior year.
• Prior period adjustments were also recorded to correct accounts payable and accrued liabilities
balances.
-72-
VILLAGE OF KEY BISCAYNE, FLORIDA
SCHEDULE OF FINDINGS AND QUESTIONED COSTS
(Continued)
CURRENT YEAR FINDINGS AND RECOMMENDATIONS (Continued)
Cause
The lack of a formal closing process that incorporates a thorough review by finance department
personnel of the general ledger accounts by checking the balances against the subsidiary ledger,
reviewing the detail, and ensuring that all accruals have been included.
Effect
The lack of adequate internal controls over a formal closing process, which includes the thorough review
of account balances by finance department personnel, resulted in misstatements in the financial
statements, prepared in accordance with GAAP, which are the responsibility of management.
Recommendation
We recommend the Village, on a monthly basis, review and evaluate the transactions recorded in order to
ensure the validity of amounts recorded. We recommend a detailed general ledger account analysis be
performed on a monthly basis to ensure accurate recording of transactions including recording and
tracking of all grants to ensure compliance with federal and/or state laws, rules or regulations.
The Village should consider developing written monthly and year end closing procedures. These
procedures should include timetables outlining appropriate due dates and instructions for schedules that
should be prepared. The closing procedures should be documented in a formal checklist. We also
recommend that the finance department perform an analytical review of account balances with the prior
year balances and budgets prior to closing the year end books and records to facilitate determining if
adjustments are required.
The benefit of written procedures is that it would assist personnel in discharging their responsibilities
consistently and in accordance with Village guidelines. This becomes more important as new personnel
are hired by the Village to replace terminating or retiring personnel and also provides guidance for
personnel when they have to assume other functions resulting from personnel vacations or other personal
leave instances.
In addition, the Village should also consider engaging the services of an individual who can oversee the
financial reporting process with the ability to prepare or review and approve financial statements
prepared in accordance with generally accepted accounting principles. This can be a person responsible
for overseeing the operations and internal controls of the finance departmment.
Views of Responsible Officials and Planned Corrective Actions
The Village has a written formal closing process that is designated and managed by the Finance Director.
The year-end process normally takes place during the month of December for the preceding fiscal year.
For fiscal year 2008 the original trial balance presented to the auditors was not fully adjusted due to the
untimely death of the Village Finance Director. Therefore, the closing process was not fully completed,
an uncommon occurrence. To date the financial statements are being reviewed monthly to ensure that all
proper accruals are being included. The Village is currently assessing the finance department and
evaluating all possible options, including obtaining additional support if necessary.
-73-
VILLAGE OF KEY BISCAYNE, FLORIDA
SCHEDULE OF FINDINGS AND QUESTIONED COSTS
(Continued)
CURRENT YEAR FINDINGS AND RECOMMENDATIONS (Continued)
Material Noncompliance
08-02 Report Filing and Federal and Florida Single Audit Identification
Criteria
Prudent practices dictate that controls be in place to insure compliance with laws, rules, and regulations
including the controls to identify federal and state grants to determine if a Federal or Florida single audit
is required. Also, Circular A-133, Part C - §320 requires the completion of the audit and submission of
the data collection form and reporting package within the earlier of 30 days after receipt of the auditor's
report or nine months after the end of the audit period. Controls must be in place to ensure compliance
with laws rules and regulations.
Condition
Prior to the start of the audit, financial management stated that the Village was not subject to the Federal
or Florida Single Audit for the fiscal year ended September 30, 2008. It was later noted through our
procedures that there were Federal and State grant funds expended in the current and prior year which
were subject to the Single Audit. In the prior year, financial management had asserted that the Village
was not subject to single audit act requirements.
The Village did not submit the reporting package for the Federal Single Audit for the year ended
September 30, 2007 by the due date of June 30, 2008.
Cause
Lack of adequate controls over grant accounting and reporting of the Federal and Florida Single Audit
Requirements.
Effect
This caused the Village to not be in compliance with grant requirements and laws, rules, and regulations
surrounding those grants which could potentially result in the loss of future grant funds.
Recommendation
We recommend that the Village implement controls to identify the grant programs that are subject to the
Federal and Florida Single Audits in order to comply with the Federal and State compliance requirements
and also to be able to the meet filing requirement and submit the required reports in a timely manner. In
order to achieve this, we recommend the Village designate an individual to track all grants and the
requirements of each.
-74-
VILLAGE OF KEY BISCAYNE, FLORIDA
SCHEDULE OF FINDINGS AND QUESTIONED COSTS
(Continued)
CURRENT YEAR FINDINGS AND RECOMMENDATIONS (Continued)
Views of Responsible Officials and Planned Corrective Actions
In previous years, grants received by the Village have not exceeded the $500,000 threshold set by the
Federal and Florida Single Audit Acts. Currently the Village is in the process of completing the Sanitary
Sewer Project which is being funded through various revenue sources. The majority of the grant funds
have been received throughout the current fiscal year and therefore thought to be subject to a single audit
in FY2009 not when the expenses were incurred. In light of this finding, the Village has designated an
individual to track all grants and their requirements.
-75-