HomeMy Public PortalAboutComprehensive Annual Financial Report Fiscal Year Ended 09-30-2007.tifVILLAGE OF KEY BISCAYNE, FLORIDA
COMPREHENSIVE ANNUAL FINANCIAL REPORT
FISCAL YEAR ENDED SEPTEMBER 30, 2007
Prepared by:
THE FINANCE DEPARTMENT
Rachlin
accountants. advisors
March 30, 2008
To the Honorable Mayor, Village Council, 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) for the year ended September 30, 2007, and have issued our report thereon dated March 21, 2008.
Professional standards require that we provide you with the following information related to our audit.
Our Responsibility under U.S. Generally Accepted Auditing Standards and Government AuditinM
Standards
As stated in our engagement letter dated June 6, 2005, our responsibility, as described by professional
standards, is to express opinions about whether the financial statements prepared by management with
your oversight are fairly presented, in all material respects, in conformity with U.S. generally accepted
accounting principles. Our audit of the financial statements does not relieve you or management of your
responsibilities.
As part of our audit, we considered the internal control of the Village. Such considerations were solely
for the purpose of determining our audit procedures and not to provide any assurance concerning such
internal control.
As part of obtaining reasonable assurance about whether the financial statements are free of material
misstatement, we performed test of the Village's compliance with certain provisions of laws, regulations,
contracts, and grants. However, the objective of our tests was not to provide an opinion on compliance
with such provisions.
We are responsible for communicating significant matters related to the audit that are, in our professional
judgment, relevant to your responsibilities in overseeing the financial reporting process. However, we are
not required to design procedures specifically to identify such matters.
Planned Scope and Timing of the Audit
We performed the audit according to the planned scope and timing previously communicated to your
Finance Director and Village Manager in our meeting about planning matters on October 15, 2007.
Rachlin LLP ■ One Southeast Third Avenue ■ Tenth Floor • Miami, Florida 33131 • Phone 305.377.4228 • Fax 305.377.8331 • www.rachlin.com
An Independent Member of Baker Tilly International
M IA M I • FORT LAUDERDALE • WEST PALM BEACH
To the Honorable Mayor, Village Council, Village Manager
Village of Key Biscayne, Florida
March 30, 2008
Page 2
Significant Audit Findings
Qualitative Aspects of Accounting Practices
Management is responsible for the selection and use of appropriate accounting policies. In accordance
with the terms of our engagement letter, we will advise management about the appropriateness of
accounting policies and their application. The significant accounting policies used by the Village are
described in Note 1 to the financial statements. No new accounting policies were adopted and the
application of existing policies was not changed during 2007. We noted no transactions entered into by
the Village during the year for which there is a lack of authoritative guidance or consensus. There are no
significant transactions that have been recognized in the financial statements in a different period than
when the transaction occurred.
Accounting estimates are an integral part of the financial statements prepared by management and are
based on management's knowledge and experience about past and current events and assumptions about
future events. Certain accounting estimates are particularly sensitive because of their significance to the
financial statements and because of the possibility that future events affecting them may differ
significantly from those expected. The most sensitive estimate(s) affecting the financial statements were:
Management's estimate of the allowance for uncollectible accounts is based on historical
trend information. We evaluated the key factors and assumptions used to develop the
allowance in determining that it is reasonable in relation to the financial statements taken
as a whole.
The disclosures in the financial statements are neutral, consistent and clear.
Difficulties Encountered in Performing the Audit
We encountered no significant difficulties in dealing with management in performing and completing our
audit.
Corrected and Uncorrected Misstatements
Professional standards require us to accumulate all known and likely misstatements identified during the
audit, other than those that are trivial, and communicate them to the appropriate level of management.
The attached schedule summarizes uncorrected misstatements of the financial statements. Management
has determined that their effects are immaterial, both individually and in the aggregate, to the financial
statements taken as a whole. In addition, none of the misstatements detected as a result of audit
procedures and corrected by management were material, either individually or in the aggregate, to the
financial statements taken as a whole.
Rachlin
accountants A advisors
To the Honorable Mayor, Village Council, Village Manager
Village of Key Biscayne, Florida
March 30, 2008
Page 3
Disagreements with Management
For purposes of this letter, professional standards define a disagreement with management as a financial
accounting, reporting, or auditing matter, whether or not resolved to our satisfaction, that could be
significant to the financial statements or the auditor's report. We are pleased to report that no such
disagreements arose during the course of our audit.
Management Representations
We have requested certain representations from management that are included in the management
representation letter dated March 21, 2008.
Management Consultations with Other Independent Accountants
In some cases, management may decide to consult with other accountants about auditing and accounting
matters, similar to obtaining a "second opinion" on certain situations. If a consultation involves
application of an accounting principle to the Village's financial statements or a determination of the type
of auditor's opinion that may be expressed on those statements, our professional standards require the
consulting accountant to check with us to determine that the consultant has all the relevant facts. To our
knowledge, there were no such consultations with other accountants.
Other Audit Findings or Issues
We generally discuss a variety of matters, including the application of accounting principles and auditing
standards, with management each year prior to retention as the governmental unit's auditors. However,
these discussions occurred in the normal course of our professional relationship and our responses were
not a condition to our retention.
This information is intended solely for the use of Mayor, Village Council and Village Manager and
management of the Village of Key Biscayne, Florida and is not intended to be and should not be used by
anyone other than these specified parties.
Very truly yours,
,Lx/
Rachlin
accountants advisors
5/31/2008
9:51 AM
Client: M49940 - Key Biscayne, Village of
Engagement: M49940 - 2007 VKB Audit
Period Ending: 9/30/2007
Trial Balance: TB SWU1 - Trial Balance - Stormwater Fund
Workpaper: GA 04.03 - SWU Proposed JE Report
Account Description W/P Ref Debit Credit
Proposed JE # 1 TB SWU2
To adjust cash balance per
confirmation received.
401.00.361.00349 INTEREST INCOME 3,257.15
401.00.135.00022 ACCRUED INTEREST RECEIVABLE 3,257.15
Total 3,257.15 3,257.15
1 of 1
5/31/2008
9:52 AM
Client: M49940 - Key Biscayne, Village of
Engagement: M49940 - 2007 VKB Audit
Period Ending: 9/30/2007
Workpaper. GA 04.04 - SW Proposed JE Report
Account Description W/P Ref Debit Credit
Proposed JE # 1 TB SW 02
To adjust allowance for doubtful accounts based on Village's policy.
402.00.534.49100 UNCOLLECTIBLE ACCOUNTS 3,675.00
402.00.117.00011 ALLOWANCE FOR DOUBTFUL ACCOUNTS 3,675.00
Total 3,675.00 3,675.00
1 of 1
VILLAGE OF KEY BISCAYNE, FLORIDA
COMPREHENSIVE ANNUAL FINANCIAL REPORT
FISCAL YEAR ENDED SEPTEMBER 30, 2007
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
II. FINANCIAL SECTION
REPORT OF INDEPENDENT CERTIFIED PUBLIC ACCOUNTANTS 1-2
MANAGEMENT'S DISCUSSION AND ANALYSIS (Required Supplementary Information) 3-10
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
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 21-42
REQUIRED SUPPLEMENTARY INFORMATION (OTHER THAN MD&A)
Budgetary Comparison Schedule — General Fund 43
Note to Budgetary Comparison Schedule 44
Schedule of Funding Progress 45
Schedule of Employer Contributions 46
VILLAGE OF KEY BISCAYNE, FLORIDA
TABLE OF CONTENTS
PAGE
III. STATISTICAL SECTION
Net Assets by Component — Last Ten Fiscal Years 47
Changes in Net Assets — Last Ten Fiscal Years 48-49
Fund Balances of Governmental Funds — Last Ten Fiscal Years 50
Changes in Fund Balances of Governmental Funds — Last Ten Fiscal Years 51
General Governmental Tax Revenues by Source — Last Ten Fiscal Years 52
Net Assessed Value and Estimated Actual Value of Taxable Property —
Last Ten Fiscal Years 53
Property Tax Rates — Direct and Overlapping Governments — Last Ten Fiscal Years 54
Principal Property Taxpayers — Current and Nine Years Ago 55
Property Tax Levies and Collections — Last Ten Fiscal Years 56
Ratios of Outstanding Debt by Type — Last Ten Fiscal Years 57
Ratios of General Bonded Debt Outstanding — Last Ten Fiscal Years 58
Direct and Overlapping Governmental Activities Debt 59
Pledged Revenue Coverage — Last Ten Fiscal Years 60
Demographic and Economic Statistics — Last Ten Fiscal Years 61
Principal Employers — Current and Nine Years Ago 62
Full -Time Equivalent Village Government Employees by Function —
Last Ten Fiscal Years 63
Operating Indicators by Function/Program — Last Ten Fiscal Years 64
Capital Asset Statistics by Function/Program — Last Ten Fiscal Years 65
W. 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
66-67
68-69
Schedule of Findings and Responses 70-71
INTRODUCTORY SECTION
1f
(..;•
l
VILLAGE OF KEY BISCAYNE
Village Council
Robert L. Vernon, Mayor
Jorge E. Mendia, Vice Mayor
Michael Davey
Enrique Garcia
Steve Liedman
Thomas Thornton
Patricia Weinman
Village Manager
Genaro "Chip" Iglesias
Office of the Village Manager
April 15, 2008
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, 2007.
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 Rachlin Cohen & Holtz 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, 2007 are free of material misstatement. The independent audit
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88 West McIntyre Street • Suite 210 • Key Biscayne, Florida 33149 • (305) 365-5500 • Fax (305) 365-8936
'IL' ION S1 ATFMFN I 10 PRO\ IDE A SAFE QI'AI Ely ( ()\IN!'NITY ENVIRONMENT FOR All 151 AnDFRS THROIGII RFSI'ONSIl3LI' (0\ l'RNNII nT
www.keybiscaynell.gov
VILLAGE OF KEY BISCAYNE
involved examining, on a test basis, 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, 2007, 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 require the
MISSION STATEMENT "TO PROVIDE A SAFE, QUALITY COMMUNITY ENVIRONMENT FOR ALL ISLANDERS THROUGH RESPONSIBLE GOVERNMENT."
VILLAGE OF KEY BISCAYNE
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 all three phases of its Civic Center Project with the completion of a new
Village Hall/ Police Building, a new Fire Station, and most recently, the third phase, the Village
Community Center, opened in November 2004. Recent completion of a new bus shelter at Crandon
Boulevard and Harbor Drive was the second and largest bus shelter in the Village. Several public
works projects have recently been completed yielding new sidewalks, street improvements, park
improvements, and a tree replacement program. A capital project has been completed to improve
the safety of the major roadway through the Village on Crandon Boulevard.
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 millage rate
increases while addressing the various goals and objectives of the community.
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 Village
participates in the Florida League of Cities Municipal Insurance Trust for workers' compensation,
MISSION STATEMENT "TO PROVIDE A SAFE, QUALITY COMMUNITY ENVIRONMENT FOR ALL ISLANDERS THROUGH RESPONSIBLE GOVERNMENT."
VILLAGE OF KEY BISCAYNE
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, 2006. This was the fifteenth
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 Rachlin 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.
Respectfully submitted,
tQk,k----,
Genaro "Chip" Igle ias
Village Manager Finance Director "
Randolph G. White
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MISSION STATEMENT "TO PROVIDE A SAFE, QUALITY COMMUNITY ENVIRONMENT FOR ALL ISLANDERS THROUGH RESPONSIBLE GOVERNMENT."
VILLAGE OF KEY BISCAYNE, FLORIDA
VILLAGE OFFICIALS
SEPTEMBER 30, 2007
VILLAGE COUNCIL
Robert Vernon, Mayor
Jorge Mendia, Vice -Mayor
Michael Davey
Enrique Garcia
Steve Leidman
Thomas Thornton
Patricia Weineman
VILLAGE MANAGER
Genaro "Chip" Iglesias
VILLAGE CLERK
Conchita H. Alvarez, CMC
VILLAGE ATTORNEY
Weiss Serota Helfman Pastoriza Cole & Boniske, P.A.
FINANCE DIRECTOR
Randolph G. White, P.A.
VILLAGE AUDITORS
Ruchlin 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
for the Fiscal Year Ended
September 30, 2006
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
and financial reporting.
QP„.....c. eir).,
President
de0401.
Executive Director
VILLAGE OF KEY BISCAYNE
ORGANIZATIONAL CHART
The Village Manager, who reports directly to the Village Council, manages the Village
of Key Biscayne's day-to-day operations, The Village Manager appoints the Five
Department Heads.
pecial , etaster
MOVANNW
:mom moo
Local Planning
Agency
aArifila
Police/Fire
Retirement
Board
.
FINANCIAL SECTION
REPORT OF INDEPENDENT
CERTIFIED PUBLIC ACCOUNTANTS
Rachlin
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, 2007 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,
2007 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 May 21, 2008 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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Rachlin LLP ■ One Southeast Third Avenue • Tenth Floor • Miami, Florida 33131 • Phone 305.377.4228 • Fax 305.377.8331 • www.rachlin.com
An Independent Member of Baker Tilly International
MIAMI • FO RT LAU DERDAL E • WEST PALM BEACH
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 43 through 46, 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.
� GAP
Miami, Florida
May 21, 2008
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Rachlin
accountants advisors
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, 2007. 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 $43,075,575 (net assets).
• The Village's total net assets increased by $6,008,367, 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 $10,347,973, an increase of $3,550,788 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 $4,000,000 of new long-term debt 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
charges (business -type activities). The governmental activities of the Village of Key Biscayne include
general government, public safety, public works, building planning & zoning, and parks and recreation.
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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.
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 42 of this report.
-4-
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 43 to 46 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 $43,075,575 at the close of the
most recent fiscal year.
A portion of the Village's assets, $75,920,147 or 84.74 %, 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 $3,550,788. 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 $3,837,741 (25.88 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 8 percent due to the Village's salary step program, which in
fiscal year 2007 reflected a 5 percent increase in salaries and a 3 percent increase for a cost of
living increase.
• Debt service remained fairly level compared to the prior year, with a minor addition for interest
on new debt.
• The amount expended to the Village Attorney increased due to involvement with labor
negotiations with the Village's Fire Rescue Department that were unforeseen at budget
preparation time.
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.
-5-
Table A - 1
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
Governmental Activities
2007 2006
$13,162,063
67,505,258
80,667,321
5,002,055
35,527,705
31,422,358
261,813
8,453,390
$ 8,155,986
62,377,577
70,533,563
3,561,695
33,009,069
28,676,266
359,899
4,926,634
Total net assets $40,137,561 $33,962,799
Revenues:
Program revenues:
Charges for services
Operating grants and contributions
Capital grants and contributions
General revenues:
Property taxes
Utility taxes
Franchise fees
Intergovernmental
Investment income and
miscellaneous
Total revenues
Expenses:
General government
Public safety
Parks and recreation
Public works
Building, zoning and planning
Debt service
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
Net assets, ending
Business -type Activities
2007 2006
$ 510,553
8,414,889
8,925,442
447,508
5,539,920
$ 809,571
8,488,706
9,298,277
284,860
5,909,008
2,505,881 2,326,089
432,133 778,320
$ 2,938,014 $ 3,104,409
Table A - 2
Summary of Changes in Net Assets
Governmental Activities
2007 2006
Business -type Activities
2007 2006
Total
2007
$13,672,616
75,920,147
89,592,763
5,449,563
41,067,625
33,928,239
261,813
8,885,523
2006
$ 8,965,557
70,866,283
79,831,840
3,846,555
38,918,077
31,002,355
359,899
5,704,954
$ 43,075,575 $ 37,067,208
2007
Total
2006
$ 3,060,790 $ 3,238,022 $ 1,030,221 $ 1,049,332 $ 4,091,011 $ 4,287,354
799,493 3,559,753 - 799,493 3,559,753
18,667,979
2,231,193
1,113,194
1,000,265
641,115
27,514,029
14,830,238
2,346,655
1,088,929
996,092
306,339
26,366,028
3,781,396 4,252,037
9,909,449 9,222,766
3,077,624 2,849,434
1,589,444 4,004,651
1,447,968 1,547,042
1,505,253 1,413,272
21,311,134
6,202,895
(28,133)
6,174,762
33,962,799
$ 40,137,561
23,289,202
3,076,826
(28,133)
3,048,693
30,914,106
$ 33,962,799
49,086
1,079,307
693,135
571,246
9,454
1,273,835
(194,528)
28,133
(166,395)
3,104,409
$ 2,938,014
- 18,667,979
- 2,231,193
- 1,113,194
1,000,265
45,527
1,094,859
720,158
501,417
9,992
1,231,567
(136,708)
28,133
(108,575)
3,212,984
$ 3,104,409
690,201
28,593,336
3,781,396
9,909,449
3,077,624
1,589,444
1,447,968
1,505,253
693,135
571,246
9,454
22,584,969
6,008,367
6,008,367
37,067,208
$ 43,075,575
14,830,238
2,346,655
1,088,929
996,092
351,866
27,460,887
4,252,037
9,222,766
2,849,434
4,004,651
1,547,042
1,413,272
720,158
501,417
9,992
24,520,769
2,940,1 18
2,940,1 18
34,127,090
$ 37,067,208
The Village's net assets increased by $6,008,367 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 decreased the Village's net assets by $166,395.
• In fiscal 2007, one of the three business -type activities reflected operational profits.
• The Stormwater Utility Fund reflected a net loss of $139,534, due mainly to depreciation expense
in the amount of $273,919.
• The Solid Waste Collection Fund reported a net loss of $45,540, due mainly to increased
contractual costs.
• The Sanitary Sewer Construction Fund was dormant awaiting a resumption of construction activity.
Governmental Activities
Revenues by Sources - Governmental Activities
Charges for
Services,
$3,060,790 , 11%
Intergovernmental,
$1,000,265 , 4%
Utility Taxes,
$2,231,193 , 8%
Franchise Fees,
$1,113,194 , 4%
Operating Grants
and Contributions, Investment
$799,493 , 3% Earnings,
$641,115,2%
Grants, $206,040
,1%
Ad Valorem
Taxes,
$18,667,979 ,
67%
Program Expenses
Interest on Long
Term Debt, —
$1,505,253 , 7%
Building, Zoning
and Planning,
$1,447,968 , 7%
Parks and
Recreation,
$3,077,624 , 14%
Fire, $5,257,789 ,
25%
General
Government,
$3,781,396 , 18%
Public Works,
$1,589,444 , 7%
Police, $4,651,660
,22%
-7-
Business -type Activities
Revenues- Business Type Activities
Stormwater Charges,
$509,571 , 49% Solid Waste Charges,
% $520,650 , 51%
Financial Analysis of the Government's Funds
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 $9,875,416, an increase of
$3,001,107 in comparison with the prior year. All of this is either reserved or designated for specific
uses: (1) emergencies ($4,000,000), (2) Building Inspection Costs ($275,000), (3) Compensated
Absences ($338,539), (4) Law Enforcement Seizures ($261,813), (5) Playing Field Acquisitions
-8-
($416,403), (7) Working Capital Reserves ($1,000,000), (8) Police/Administration Building Reserve
($13,632), (9) Fire Station Building 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 ($198,990), (15) Roadway
Improvements ($175,000), (16) Recreation Facilities ($300,000),(17) Police Labor Costs ($90,000),
(18) Fire Labor Costs ($155,000) and (19) Capital Improvement Plan ($341,017).
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 47.74 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, 2007 and 2006, is shown
as follows:
Table B-1
Summary of Condensed Balance Sheet
2007 2006
Total assets $ 11,623,098 $ 8,045,610
Total liabilities
Reserved or designated fund balance
Total liabilities and fund balance
$ 1,747,682 $ 1,171,300
9,875,416 6,874,310
$11,623,098 $ 8,045,610
Table B-2
Summary of Condensed Statement of Revenues,
Expenditures and Changes in Fund Balances
Total revenues
Total expenditures
Excess of revenues over expenditures
2007 2006
$ 26,592,900 $ 25,264,190
20,686,819 22,554,700
$ 5,906,081 $ 2,709,490
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 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 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 $1,533,738 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 no supplemental appropriations or budget amendments for the fiscal year ended
September 30, 2007.
Capital Assets
As of September 30, 2007, the Village's capital assets net of accumulated depreciation amounted to
$75,920,147. The total increase in capital assets for the fiscal year was as follows:
Major capital asset events during the fiscal year included the following:
• Continuation of the Village Tree Replacement Program
• Completion of drainage improvements on Woodcrest and Buttonwood Drives.
• Completion of the Crandon Blvd Improvement. Project, phase two
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, 2007, the Village had bonded debt outstanding of $41,819,708. Of this amount,
$5,550,000 represents bonds secured solely by specified revenue sources (Stormwater 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 $4,000,000 due to the additional borrowing
required for Crandon Blvd. Phase 3 construction.
Additional information on the Village's long-term debt can be found in Note 8 on pages 33-37 of this
report.
Economic Factors and Next Years Budgets and Rates
• The unemployment rate for Miami -Dade County is currently 4.2 percent, which is a decrease
from a rate of 4.5 percent a year ago. This compares exactly to the state's average
unemployment rate of 4.2 percent but favorable to the national average rate of 4.6 percent. The
Village's average rate remained unchanged at 3.2 percent.
• The occupancy rate of the Village's retail rentals and hospitality service industry 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 2008
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, 2007
ASSETS
Cash and cash equivalents
Receivables, net
Interest receivable
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
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
Business -
type
Activities
Total
$ 10,100,283 $1,296,651 $11,396,934
908,228 533,632 1,441,860
- 19,509 19,509
198,990
198,990
1,339,239
137,831
23,537
178,325
275,630
32,545,408
34,959,850
80,667,321
(1,339,239)
1,089,039
7,325,850
8,925,442
137,831
23,537
178,325
275,630
33,634,447
42,285,700
89,592,763
2,025,005 52,260 2,077,265
336,175 336,175
150,113 150,113
477,604 26,160 503,764
2,013,158 369,088 2,382,246
35,527,705 5,539,920 41,067,625
40,529,760 5,987,428 46,517,188
31,422,358
261,813
8,453,390
$ 40,137,561
See notes to basic financial statements.
-11-
2,505,881
432,133
$2,938,014
33,928,239
261,813
8,885,523
$ 43,075,575
VILLAGE OF KEY BISCAYNE, FLORIDA
STATEMENT OF ACTIVITIES
FISCAL YEAR ENDED SEPTEMBER 30, 2007
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
$ 3,781,396
1,589,444
4,651,660 21,385
5,257,789 40,144
3,077,624 1,416,707
1,447,968 193,391
1,505,253
21,311,134 3,060,790 799,493
Program Revenues
Operating Capital
Grants and Grants and
Contributions Contributions
$ 1,389,163 $ 600,985 $
198,508
693,135 509,571
571,246 520,650
9,454
1,273,835 1,030,221
$ 22,584,969 $ 4,091,011 $ 799,493 $
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
Net assets, ending
See notes to basic financial statements.
-12-
Net (Expense)
Changes in
Governmental
Activities
$ (1,791,248)
(1,390,936)
(4,630,275)
(5,217,645)
(1,660,917)
(1,254,577)
(1,505,253)
(17,450,851)
(17,450,851)
Revenue and
Net Assets
Business -
type
Activities
18,667,979
1,113,194
1,467,392
763,801
1,000,265
641,115
(28,133)
23,625,613
6,174,762
33,962,799
$ 40,137,561
$
(183,564)
(50,596)
(9,454)
(243,614)
(243,614)
49,086
28,133
77,219
(166,395)
3,104,409
$2,938,014
Total
$ (1,791,248)
(1,390,936)
(4,630,275)
(5,217,645)
(1,660,917)
(1,254,577)
(1,505,253)
(17,450,851)
(183,564)
(50,596)
(9,454)
(243,614)
(17,694,465)
18,667,979
1,113,194
1,467,392
763,801
1,000,265
690,201
23,702,832
6,008,367
37,067,208
$ 43,075,575
VILLAGE OF KEY BISCAYNE, FLORIDA
BALANCE SHEET
GOVERNMENTAL FUNDS
SEPTEMBER 30, 2007
ASSETS
Cash and cash equivalents
Receivables, net
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
Deferred revenue
Total liabilities
Fund balances:
Reserved (Note 11)
Unreserved, undesignated reported in:
Special revenue fund
Capital improvements
Total fund balances (deficit)
Total liabilities and fund balances
Special
General Revenue
$ 7,165,598 $
805,061 103,167
3,135,908
198,990
41,911 136,414
275,630
$11,623,098 $ 239,581
Capital
Improvements
$ 2,934,685
- 450,189
$ 3,384,874
$ 1,119,966 $ 848,574 $
- 1,873,203
150,113
477,604
56,465
373,655
1,747,683 2,721,777 430,120
9,875,416
- (2,482,196)
- - 2,954,753
9,875,416 (2,482,196) 2,954,753
$11,623,099 $ 239,581 $ 3,384,873
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 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-
Total
Governmental
Funds
$ 10,100,283
908,228
3,586,097
198,990
178,325
275,630
$ 15,247,553
$ 2,025,005
2,246,858
150,113
477,604
4,899,580
9,875,416
(2,482,196)
2,954,753
10,347,973
67,505,258
137,831
(37,853,501)
$ 40,137,561
VILLAGE OF KEY BISCAYNE, FLORIDA
STATEMENT OF REVENUES, EXPENDITURES AND CHANGES IN FUND BALANCES
GOVERNMENTAL FUNDS
FISCAL YEAR ENDED SEPTEMBER 30, 2007
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
Bonds issued
Total other financing
sources (uses)
Net change in fund balances
Fund balances (deficit), beginning
Fund balances (deficit), ending
Special Capital
General Revenue Improvements
$18,667,979 $
1,467,392
763,801
1,113,194
1,298,133
1,000,265 593,453
1,762,657 -
313,389 136,950
206,040
50
26,592,900 730,403
2,543,134
5,122,699
4,590,962
1,587,460
1,455,193
2,830,020
1,264,676
1,292,675
5,297,014
153,725
263,721
$
182,016
8,712
Total
Governmental
Funds
$ 18,667,979
1,467,392
763,801
1,113,194
1,298,133
1,593,718
1,762,657
632,355
206,040
8,762
190,728 27,514,031
- 2,543,134
- 5,122,699
- 4,590,962
1,587,460
- 1,455,193
- 2,830,020
1,533,830 6,830,844
- 1,418,401
1,556,396
20,686,819 5,714,460 1,533,830 27,935,109
5,906,081 (4,984,057) (1,343,102) (421,078)
1,910,507
(4,815,481)
- 4,000,000
4,787,347 6,697,854
(1,910,507) (6,725,988)
- 4,000,000
(2,904,974) 4,000,000 2,876,840
3,001,107 (984,057) 1,533,738
6,874,309 (1,498,139) 1,421,015
$ 9,875,416 $ (2,482,196) $ 2,954,753 $ 10,347,973
See notes to basic financial statements.
-14-
3,971,866
3,550,788
6,797,185
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, 2007
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) $ 3,550,788
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 $ 6,224,242
Depreciation expense (1,329,350)
Net adjustment
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 1,618,207
Revenue bonds issued (4,000,000)
Net adjustment
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 166,254
Accrued interest expense (51,143)
Negative net pension obligation (4,236)
4,894,892
(2,381,793)
110,875
Change in net assets of governmental activities (Page 12) $ 6,174,762
See notes to basic financial statements.
-15-
VILLAGE OF KEY BISCAYNE, FLORIDA
STATEMENT OF NET ASSETS
PROPRIETARY FUNDS
SEPTEMBER 30, 2007
Business -type Activities -
Enterprise Funds
Solid
Stormwater Sanitary Waste
Utility Sewer (A Nonmajor
System Construction Fund) Totals
ASSETS
Current assets:
Cash and cash equivalents $1,006,570 $ $ 290,081 $1,296,651
Accounts receivables, net 124,286 - 409,346 533,632
Interest receivable 19,509 - 19,509
Total current assets 1,150,365 699,427 1,849,792
Noncurrent assets:
Capital assets not being depreciated
Capital assets being depreciated, net
Total noncurrent assets
Total assets
7,325,850
1,089,039
7,325,850 1,089,039
- 1,089,039
- 7,325,850
- 8,414,889
8,476,215 1,089,039 699,427 10,264,681
LIABILITIES
Current liabilities:
Accounts payable and accrued liabilities - 4,584 47,676 52,260
Due to other funds 379,306 625,121 334,812 1,339,239
Deferred revenue - - 26,160 26,160
Current portion of revenue bonds payable 350,000 19,088 369,088
Total current liabilities 729,306 648,793 408,648 1,786,747
Noncurrent liabilities:
Revenue bonds 5,200,000 - - 5,200,000
Revolving loan - 339,920 339,920
Total noncurrent liabilities 5,200,000 339,920 5,539,920
Total liabilities 5,929,306 988,713 408,648 7,326,667
NET ASSETS
Invested in capital assets, net of related debt 1,775,850 730,031 - 2,505,881
Unrestricted 771,059 (629,705) 290,779 432,133
Total net assets $ 2,546,909 $ 100,326 $ 290,779 $2 93 8,014
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, 2007
Operating revenues:
Charges for services
Operating expenses:
General and administrative
Depreciation
Total operating expenses
Operating income (loss)
Non -operating revenues (expenses):
Interest income
Interest expense
Total non -operating revenues (expenses)
Loss before transfers
Transfers in
Change in net assets
Net assets, beginning
Net assets, ending
Stormwater
Utility
System
$ 509,571
180,423
273,919
454,342
55,229
44,030
(238,793)
(194,763)
(139,534)
(139,534)
2,686,443
Sanitary
Sewer
Construction
$
Business -type Activities -
Enterprise Funds
Solid
Waste
(A Nonmajor
Fund)
$ 520,650
- 571,246
Totals
$1,030,221
751,669
273,919
571,246 1,025,588
- (50,596)
- 5,056
(9,454)
(9,454) 5,056
(9,454) (45,540)
28,133
18,679
81,647
4,633
49,086
(248,247)
(199,161)
(194,528)
28,133
(45,540) (166,395)
336,319 3,104,409
$ 2,546,909 $ 100,326 $ 290,779 $2,938,014
See notes to basic financial statements.
-17-
VILLAGE OF KEY BISCAYNE, FLORIDA
STATEMENT OF CASH FLOWS
PROPRIETARY FUNDS
FISCAL YEAR ENDED SEPTEMBER 30, 2007
Cash flows from operating activities:
Receipts from customers and users
Payments to suppliers
Net cash provided by operating activities
Cash flows from non -capital financing activities:
Transfers from other funds
Net cash provided by non -capital
fmancing activities
Cash flows from capital and related financing activities:
Net payments on revolving loan
Payments for construction in progress
Interest paid
Net cash used by capital and related
financing activities
Cash flows from investing activities:
Interest received
Net cash provided by investing activities
Net increase in cash and cash equivalents
Cash and cash equivalents, beginning
Cash and cash equivalents, ending
Reconciliation of operating income to net cash
provided by operating activities:
Operating income (loss)
Adjustments to reconcile operating income to net
cash provided 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 provided by operating activities
Stormwater
Utility
System
$ 725,190
(180,423)
544,767
(235,000)
(238,793)
(473,793)
44,030
44,030
115,004
891,566
$ 1,006,570
Business -type Activities -
Enterprise Funds
Solid
Sanitary Waste
Sewer (A Nonmajor
Construction Fund)
Totals
$ 200,032 $ 537,238 $ 1,462,460
(291,957) (472,380)
200,032 245,281 990,080
28,133
28,133
(18,609)
(200,102)
(9,454)
(228,165)
$
$ 55,229 $
273,919
5,096
(5,394)
(8,607)
224,524
489,538
$ 544,767
28,133
28,133
(253,609)
(200,102)
(248,247)
(701,958)
5,056 49,086
5,056 49,086
250,337 365,341
39,744 931,310
$ 290,081 $ 1,296,651
- $ (50,596) $ 4,633
273,919
- (94,779) (89,683)
(5,394)
(67) 47,676 39,002
8,168 8,168
200,099 334,812 759,435
200,032 295,877 985,447
$ 200,032 $ 245,281 $ 990,080
See notes to basic financial statements.
-18-
VILLAGE OF KEY BISCAYNE, FLORIDA
STATEMENT OF FIDUCIARY NET ASSETS
PENSION TRUST FUND
SEPTEMBER 30, 2007
ASSETS
Contributions receivable:
Village (including State) $ 259,233
Employees 37,501
Total contributions receivable 296,734
Investments, at fair value:
Money market funds 430,509
Common stocks 3,698,270
Mutual funds 5,843,719
Total investments 9,972,498
Total assets 10,269,232
LIABILII7ES AND NET ASSETS
Liabilities
Net assets held in trust for pension benefits
See notes to basic fmancial statements.
-19-
$10,269,232
VILLAGE OF KEY BISCAYNE, FLORIDA
STATEMENT OF CHANGES IN FIDUCIARY NET ASSETS
PENSION TRUST FUND
FISCAL YEAR ENDED SEPTEMBER 30, 2007
ADDITIONS
Contributions:
Plan members $ 553,045
Village (including State) 1,075,659
Total contributions 1,628,704
Investment earnings:
Net increase in the fair value of investments 1,102,748
Interest and dividends 101,757
Total investments earnings 1,204,505
Total additions 2,833,209
DEDUCTIONS
Benefits paid 319,510
Administrative expenses 99,325
Total deductions 418,835
Change in net assets
Net assets, beginning
Net assets, ending
See notes to basic financial statements.
-20-
2,414,374
7,854,858
$10,269,232
NOTES TO BASIC FINANCIAL STATEMENTS
VILLAGE OF KEY BISCAYNE, FLORIDA
NOTES TO BASIC FINANCIAL STATEMENTS
SEPTEMBER 30, 2007
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 fmancial 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 fmancial 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 fmancial
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 fmancial 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 defmition 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
investments with the State Board Investment Pool. The Investment Pool is recorded at its
value of the pool shares (2a-7 like pool) which is fair value. 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 fmancial
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 2007.
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 fmancial 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, 2007 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 collectibility 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 $37,853,501 difference are as follows:
Bonds payable $ 35,667,559
Debt issuance cost (23,537)
Capital leases payable 415,341
Compensated absences 1,457,963
Accrued interest payable 336,175
$37 853,501
-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.
The Local Government Surplus Funds Trust Fund is governed by Ch. 19-7 of the Florida
Administrative Code, which identifies the Rules of the State Board of Administration (SBA).
These rules provide guidance and establish the general operating procedures for the
administration of the Local Government Surplus Funds Trust Fund. Additionally, the Office of
the Auditor General performs the operational audit of the activities and investments of the
State Board of Administration. The Local Government Surplus Funds Trust Fund is not a
registrant with the Securities and Exchange Commission (SEC); however, the Board has
adopted operating procedures consistent with the requirements for a 2a-7 fund. See Note 14
for subsequent event relative to the SBA.
Investments — Village
As of September 30, 2007, the Village had the following investments with its corresponding
maturities in its portfolio:
Investment Maturities
(In Years)
Investments
Repurchase agreements
Interest Rate Risk
Fair Less
Value Than 1
$2 193 473 $ 2,193,473
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.
-27-
VILLAGE OF KEY BISCAYNE, FLORIDA
NOTES TO BASIC FINANCIAL STATEMENTS
(Continued)
NOTE 3. DEPOSITS AND INVESTMENTS (Continued)
Investments — Village (Continued)
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. Excess
funds are also sent to the Local Government Surplus Funds Trust Fund administered by
the SBA. The SBA does not have a rating from a NRSRO.
Concentration of Credit Risk
As of September 30, 2007, 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, 2007, the Village's Defined Benefit Pension Plan had the following
investments with its corresponding maturities in its portfolio:
Investment Maturities (In Years)
Investments
Bond mutual funds
Interest Rate Risk
Fair Less
Value Than 1 1-5 6-10 10+
$ 2,720,242 $ 92,488 $1,719,193 $ 590,293 $ 318,268
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.
-28-
VILLAGE OF KEY BISCAYNE, FLORIDA
NOTES TO BASIC FINANCIAL STATEMENTS
(Continued)
NOTE 3. DEPOSITS AND INVESTMENTS (Continued)
Investments — Pension Plan (Continued)
Credit Risk (Continued)
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.
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, 2007, 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 fmancial statements.
NOTE 4. RECEIVABLES
Receivables as of September 30, 2007 for the Village's individual major funds, nonmajor funds and
fiduciary fund in the aggregate, including the allowances for uncollectible accounts, are as follows:
Special Storm- Solid
General Revenue water Waste
Customers billed $ $ $ 124,286 $ 422,575
Contributions
Property taxes 309,967
Interest 2,700
Intergovernmental 26,013 103,167
Other 466,381
Gross receivables 805,061 103,167 124,286 422,575
Less allowance for uncollectibles - (13,229)
Net total receivables $ 805,061 $ 103,167 $ 124,286 $ 409,346
Pension
Trust Fund Total
$ - $ 546,861
296,734 296,734
309,967
2,700
129,180
466,381
296,734 1,751,823
(13,229)
$ 296,734 $ 1,738,594
-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, 2007,
there were no material delinquent taxes.
NOTE 6. INTERFUND RECEIVABLES, PAYABLES, AND TRANSFERS
The composition of interfund balances as of September 30, 2007 is as follows:
Due from/to other funds:
Receivable Fund
General
Capital improvements
Payable Fund
Special revenue
Capital improvement
Stormwater utility
Sanitary sewer
Solid Waste
Stormwater utility
Sanitary sewer
Amount
$1,873,204
373,656
312,086
242,150
334,812
67,219
382,970
$ 3,586,097
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 out:
General fund
Capital improvement
Transfers In
General
Fund
Capital Sanitary
Improvement Sewer
$ - $ 4,787,347 $ 28,134
1,910,507
$1,910,507 $ 4,787,347 $ 28,134
-30-
Total
$ 4,815,481
1,910,507
$ 6,725,988
VILLAGE OF KEY BISCAYNE, FLORIDA
NOTES TO BASIC FINANCIAL STATEMENTS
(Continued)
NOTE 6.
INTERFUND RECEIVABLES, PAYABLES, AND TRANSFERS
Interfund 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, 2007 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
Increases
Ending
Decreases Balance
$21,833,837 $ - $ - $21,833,837
5,191,965 6,307,375 (787,769) 10,711,571
27,025,802 6,307,375 (787,769) 32,545,408
23,727,322
14,090,674
5,002,098
42,820,094
(1,938,015)
(2,994,391)
(2,535,913)
(7,468,319)
35,351,775
$ 62,377,577
787,769
153,021
- 23,727,322
- 14,878,443
(3,365) 5,151,754
940,790 (3,365) 43,757,519
(479,555)
(328,047)
(521,748)
(1,329,350)
(388,560) (3,365) 34,959,850
$ 5,918,815 $ (791,134) $ 67,505,258
$ 888,937 $ 200,102 $
888,937 200,102
10,056,660
10,056,660
(2,456,891)
(2,456,891)
7,599,769
$ 8,488,706
(273,919)
(273,919)
(273,919)
$ (73,817)
(2,417,570)
(3,322,438)
(3,057,661)
(8,797,669)
- $ 1,089,039
- 1,089,039
$
10,056,660
10,056,660
(2,730,810)
(2,730,810)
- 7,325,850
- $ 8,414,889
-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
Police
Fire
Public works
Building, zoning and planning
Parks
Total depreciation expense - governmental activities
Business -type activities:
Stormwater
NOTE 8. LONG-TERM DEBT
$ 464,631
329,377
269,969
1,984
9,522
253,867
$1,329,350
$ 273,919
The following is a summary of changes in long-term liabilities of the Village for governmental
activities for the year ended September 30, 2007:
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
$ 8,470,000 $
9,220,000
9,095,960
2,800,000
3,500,000
33,085,960
615,347
1,291,709
1,907,056
$ 34,993,016
Ending
Balance
Due Within
One Year
- $ (430,000) $ 8,040,000 $ 455,000
(420,000)
(414,676)
4,000,000 (153,725)
4,000,000 (1,418,401)
193,203
193,203
$ 4,193,203
(200,006)
(26,949)
(226,955)
$ (1,645,356)
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
440,000
435,584
69,929
47,734
204,187
1,652,434
214,928
145,796
360,724
$2,013,158
-32-
VILLAGE OF KEY BISCAYNE, FLORIDA
NOTES TO BASIC FINANCIAL STATEMENTS
(Continued)
NOTE 8. LONG-TERM DEBT (Continued)
Land Acquisition and Capital Improvement Revenue Bonds
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:
2008
2009
2010
2011
2012
2013-2017
2018-2019
Capital Improvement Revenue Bonds
Principal
$ 455,000
475,000
500,000
525,000
550,000
3,205,000
2,330,000
$ 8,040,000
Interest
$ 368,359
346,435
323,449
299,285
273,942
941,603
168,223
$ 2,721,296
Total
$ 823,359
821,435
823,449
824,285
823,942
4,146,603
2,498,223
$ 10,761,296
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:
2008
2009
2010
2011
2012
2013-2017
2018-2020
Principal
$ 440,000
465,000
490,000
515,000
540,000
3,165,000
3,185,000
$ 8,800,000
Interest
$ 449,592
425,881
400,860
374,529
346,888
1,330,698
280,474
$3 608,922
Total
$ 889,592
890,881
890,860
889,529
886,888
4,495,698
3,465,474
$12,408,922
-33-
VILLAGE OF KEY BISCAYNE, FLORIDA
NOTES TO BASIC FINANCIAL STATEMENTS
(Continued)
NOTE 8. LONG-TERM DEBT (Continued)
Capital Improvement Revenue Bonds (Continued)
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. 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:
2008
2009
2010
2011
2012
2013-2017
2018-2022
2023
Principal
$ 435,584
451,434
467,860
484,883
502,526
2,800,582
3,348,547
189,868
$ 8,681,284
Land Acquisition and Capital Improvement Revenue Bonds
Interest
$ 305,615
289,765
273,339
256,316
238,673
905,413
359,096
1,648
$2,629 865
Total
$ 741,199
741,199
741,199
741,199
741,199
3,705,995
3,707,643
191,516
$11,311,149
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:
2008
2009
2010
2011
2012
2013-2015
2016-2022
2023
Principal
$ 69,929
286,476
297,607
140,107
145,551
817,107
988,669
54,554
$ 2,800,000
Interest
$ 26,810
100,480
89,349
80,195
74,751
284,404
112,843
522
$ 769,354
Total
$ 96,739
386,956
386,956
220,302
220,302
1,101,511
1,101,512
55,076
$ 3,569,354
-34-
VILLAGE OF KEY BISCAYNE, FLORIDA
NOTES TO BASIC FINANCIAL STATEMENTS
(Continued)
NOTE 8. LONG-TERM DEBT (Continued)
Transportation Tax Revenue Bonds
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 bonds mature on July 1, 2025 and are due in quarterly principal
installments. Interest accrues at 4.09% per annum.
Debt service requirements to maturity are as follows:
Principal Interest Total
Fiscal year ending September 30:
2008
2009
2010
2011
2012
2013-2017
2018-2022
2023-2025
Road Improvement Revenue Bonds
$ 47,734
195,867
204,001
212,474
169,602
864,166
1,059,155
747,001
$ 3,500,000
$ 35,788
138,219
130,084
121,612
113,313
465,107
270,136
50,591
$1,324,850
$ 83,522
334,086
334,085
334,086
282,915
1,329,273
1,329,291
797,592
$4 824 850
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 III), financing architectural, engineering,
environmental, legal, and other planning costs. The bonds mature on December 1, 2021. The
Village has pledged toll revenues and 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 4.05% per annum.
Debt service requirements to maturity are as follows:
Principal Interest Total
Fiscal year ending September 30:
2008
2009
2010
2011
2012
2013-2017
2018-2022
$ 204,187
212,583
221,325
230,425
239,900
1,355,836
1,382,018
$ 3,846,274
$ 152,938
144,542
135,800
126,700
117,224
429,790
124,536
$1,231,530
$ 357,125
357,125
357,125
357,125
357,124
1,785,626
1,506,554
$ 5,077,804
-35-
VILLAGE OF KEY BISCAYNE, FLORIDA
NOTES TO BASIC FINANCIAL STATEMENTS
(Continued)
NOTE 8. 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 Depai tuient with a fair value of
$378,413. The amount of the lease obligation is $380,726 and final payment is due on
December 15, 2007. Lease payments are due annually. Interest accrues at 3.85% per annum.
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, 2007 were as follows:
Fiscal year ending September 30:
2008 $ 214,928
2009 114,287
2010 109,137
Total minimum lease payments 438,352
Less amount representing interest (23,011)
Present value of minimum lease payments $ 415,341.
The following is a summary of changes in long-term liabilities of the Village for business -
type activities for the year ended September 30, 2007:
Due
Beginning Ending Within
Balance Additions Reductions Balance One Year
Business -type Activities
Bonds and loan payable:
Stormwater utility revenue bonds $ 5,785,000 $ - $ (235,000) $ 5,550,000 $ 350,000
Revolving loan 377,617 - (18,609) 359,008 19,088
Total bonds and loan payable 6,162,617 - (253,609) 5,909,008 369,088
Business -type activities
long-term liabilities $ 6,162,617 $ - $ (253,609) $5 909 008 $ 369,088
-36-
VILLAGE OF KEY BISCAYNE, FLORIDA
NOTES TO BASIC FINANCIAL STATEMENTS
(Continued)
NOTE 8. 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 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:
2008
2009
2010
2011
2012
2013-2017
2018-2019
Revolving Loan
Principal
$ 350,000
365,000
385,000
405,000
425,000
2,455,000
1,165,000
$ 5,550,000
Interest
$ 229,215
214,760
199,686
183,785
167,058
554,660
72,688
$ 1,621,852
Total
$ 579,215
579,760
584,686
588,785
592,058
3,009,660
1,237,688
$ 7,171,852
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:
2008
2009
2010
2011
2012
2013-2017
2018-2022
2023
Principal Interest Total
$ 19,088
19,580
20,084
20,602
21,133
114,118
129,596
14,807
$ 359,008
$ 9,046
8,554
8,050
7,532
7,001
26,553
11,075
178
$ 77,989
$ 28,134
28,134
28,134
28,134
28,134
140,671
140,671
14,985
$ 436,997
-37-
VILLAGE OF KEY BISCAYNE, FLORIDA
NOTES TO BASIC FINANCIAL STATEMENTS
(Continued)
NOTE 9. COMMITMENTS AND CONTINGENCIES
Construction Commitments
As of September 30, 2007, the Village had outstanding construction commitments of
$1,857,481 to complete Phase II of the Crandon Boulevard project.
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.
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.
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.
NOTE 10. DEFICIT FUND BALANCE
The Special Revenue Fund has a deficit fund balance of $2,482,196 which is being funded from
the General Fund.
-38-
VILLAGE OF KEY BISCAYNE, FLORIDA
NOTES TO BASIC FINANCIAL STATEMENTS
(Continued)
NOTE 11. RESERVED FUND BALANCES
As of September 30, 2007, fund balances in the general fund have been reserved for the following
purposes:
Emergencies $ 4,000,000
Master Plan initiatives 1,873,764
Working capital 1,000,000
Playing fields 416,403
Capital Improvement Plan 341,017
Compensated absences 338,589
Recreation facilities 300,000
Capital lease 298,680
Building inspections 275,000
Law enforcement seizures 261,813
Prepaids 198,990
Roadway improvements 175,000
Fire Labor 155,000
Police Labor 90,000
Community Center equipment 50,000
Fire vehicle replacements 50,000
Fire Rescue Transport Fees 23,896
Police/Administration building 13,632
Fire Station building 13,632
$ 9,875,416
NOTE 12. 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 13), were no longer eligible to contribute
to the 401(a) plan. Employer contributions for the fiscal year ended September 30, 2007 were
$421,947 while the employee contributions were $553,045. Amendments to the Plan must be
authorized by the Village Council.
-39-
VILLAGE OF KEY BISCAYNE, FLORIDA
NOTES TO BASIC FINANCIAL STATEMENTS
(Continued)
NOTE 13. 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, 2006. 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.
At October 1, 2006 (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 14
Current employees:
Vested 33
Non -vested 31
Total 64
Funding Policy
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 10.74% of covered payroll for the year ended
September 30, 2007 which was determined by the October 1, 2005 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.
-40-
VILLAGE OF KEY BISCAYNE, FLORIDA
NOTES TO BASIC FINANCIAL STATEMENTS
(Continued)
NOTE 13. DEFINED BENEFIT PENSION PLAN (Continued)
Annual Pension Cost and Net Pension Obligation
The annual pension cost and net pension obligation (asset) for the current year was as
follows:
Annual required contribution $ 773,701
Interest on net pension asset (11,040)
Adjustment to annual required contribution 15,276
Annual pension cost 777,937
Contributions made 773,701
Decrease in net pension asset 4,236
Net pension asset, beginning of year (142,067)
Net pension asset, end of year $ (137,831)
The annual required contribution for the current year was determined as part of the October 1,
2005 actuarial valuation using the entry age normal funding method. This method does not
identify and separately amortize unfunded actuarial liabilities. 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)
9/30/2005 $ 768,274 99.5% $ (146,088)
9/30/2006 733,878 99.5% (142,067)
9/30/2007 777,937 99.5% (137,831)
NOTE 14. SUBSEQUENT EVENT
State Board of Administration (SBA) Investment Pool
As discussed in Note 3, at September 30, 2007, the Village had $130,954 invested in the State
Board of Administration's Local Government Surplus Funds Trust Fund Investment Pool
(Pool). On November 29, 2007, the State Board of Administration implemented a temporary
freeze on the assets held in the Pool due to an unprecedented amount of withdrawals from the
Fund coupled with the absence of market liquidity for certain securities within the Pool. The
significant amount of withdrawals followed reports that the Pool held asset -backed
commercial paper that was subject to sub prime mortgage risk. On December 4, 2007, based
-41-
VILLAGE OF KEY BISCAYNE, FLORIDA
NOTES TO BASIC FINANCIAL STATEMENTS
(Continued)
NOTE 14. SUBSEQUENT EVENT (Continued)
State Board of Administration (SBA) Investment Pool (Continued)
on recommendations from an outside financial advisor, the State Board of Administration
restructured the Pool into two separate pools. Pool A consisted of all money market
appropriate assets, which was approximately $12 billion or 86% of Pool assets. Pool B
consisted of assets that either defaulted on a payment, paid more slowly than expected, and/or
had any significant credit and liquidity risk, which was approximately $2 billion or 14% of
Pool assets. At the time of the restructuring, all current pool participants had their existing
balances proportionately allocated into Pool A and Pool B.
Currently, Pool A participants may withdraw 15% of their balance or $2 million, whichever is
greater, without penalty. Withdrawals from Pool A in excess of the above limit are subject to a
2% redemption fee. New investments in Pool A are not subject to the redemption fee or
withdrawal restrictions. Future withdrawal provisions from Pool A will be subject to further
evaluation based on the maturities of existing investments and the liquidity requirements of the
Pool. On December 21, 2007, Standard and Poor's Ratings Services assigned its "AAAM"
principal stability fund rating to Pool A.
Currently, Pool B participants are prohibited from withdrawing any amount from the Pool and
a formal withdrawal policy has not yet been developed. Market valuations of the assets held in
Pool B are not readily available. In addition, full realization of the principal value of Pool B
assets is not readily determinable.
As of January 9, 2008, the Village no longer had any investments in Pool A or B, respectively.
Additional information regarding the Local Government Surplus Funds Trust Fund may be
obtained from the State Board of Administration.
-42-
REQUIRED SUPPLEMENTARY INFORMATION
VILLAGE OF KEY BISCAYNE, FLORIDA
REQUIRED SUPPLEMENTARY INFORMATION
BUDGETARY COMPARISON SCHEDULE
GENERAL FUND
FISCAL YEAR ENDED SEPTEMBER 30, 2007
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'
fund balance
Transfers in
Transfers out
Total other fmancing uses
Net change in fund balances
Budgeted Amounts
Original Final
Actual
Amounts
on a GAAP
Basis
$18,452,476 $18,452,476 $18,667,979
2,397,099 2,397,099 2,231,193
855,000 855,000 1,113,194
1,054,126 1,054,126 1,298,133
1,028,483 1,028,483 1,000,265
1,515,625 1,515,625 1,762,657
7,500 7,500 206,040
239,247 239,247 313,389
50
25,549,556 25,549,556 26,592,900
458,424 458,424 444,666
415,070 415,070 379,420
1,236,051 1,236,051 1,258,787
383,000 383,000 460,261
2,492,545 2,492,545 2,543,134
4,716,391
5,115,576
9,831,967
1,597,881
1,522,196
2,617,180
1,409,467
1,290,976
20,762,212
4,787,344
4,716,391
5,115,576
9,831,967
1,597,881
1,522,196
2,617,180
1,409,467
1,290,976
20,762,212
4,787,344
(4,787,347) (4,787,347)
(4,787,347) (4,787,347)
$
4,590,962
5,122,699
9,713,661
1,587,460
1,455,193
2,830,020
1,264,676
1,292,675
20,686,819
Prior
Year
Reserves
$ -
Actual
Amounts
on a
Budgetary
Basis
$18,667,979
2,231,193
1,113,194
1,298,133
1,000,265
1,762,657
206,040
313,389
50
- 26,592,900
(38,220)
(78,000)
(116,220)
444,666
379,420
1,220,567
382,261
2,426,914
- 4,590,962
(7,200) 5,115,499
Variance
with Final
Budget -
Positive
(Negative)
$ 215,503
(165,906)
258,194
244,007
(28,218)
247,032
198,540
74,142
50
1,043,344
13,758
35,650
15,484
739
65,631
125,429
77
(7,200) 9,706,461 125,506
- 1,587,460
- 1,455,193
- 2,830,020
- 1,264,676
- 1,292,675
(123,420)
5,906,081 123,420
10,421
67,003
(212, 840)
144,791
(1,699)
20,563,399 198,813
6,029,501
- (123,420) -
1,910,507 - 1,910,507
(4,815,481) - (4,815,481)
(2,904,974) (123,420) (2,904,974)
$ 3,001,107 $ - $ 3,124,527
See note to budgetary comparison schedule.
-43-
1,242,157
1,910,507
(28,134)
1,882,373
$3,124,530
VILLAGE OF KEY BISCAYNE, FLORIDA
REQUIRED SUPPLEMENTARY INFORMATION
NOTE TO BUDGETARY COMPARISON SCHEDULE
FISCAL YEAR ENDED SEPTEMBER 30, 2007
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,
2007, 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 departments 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, 2007.
(i) The classification detail at which expenditures may not legally exceed appropriations is at
the department level. There is no overexpenditure in debt service as the principal and
interest are combined in preparation of the Village's budget. There is no overexpenditure
subject to the Village's legal requirements in the parks and recreation department as the
Village Council allows for up to $250,000 of overexpenditure without considering this a
violation of the budget.
-44-
VILLAGE OF KEY BISCAYNE, FLORIDA
REQUIRED SUPPLEMENTARY INFORMATION
PENSION TRUST FUND
SCHEDULE OF FUNDING PROGRESS
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 (a) (1� (b) - (a) (a) / (b) (c) (b - a) / c
10/1/01 $1,824,306 $ 4,394,237 $ 2,569,931 41.5% $ 3,732,996 68.8%
10/1/02 2,360,957 5,430,198 3,069,241 43.5% 3,984,900 77.0%
10/1/03 3,309,812 6,678,603 3,368,791 49.6% 4,278,629 78.7%
10/1/04 4,400,914 8,021,413 3,620,499 54.9% 4,960,542 73.0%
10/1/05 5,703,772 9,379,732 3,675,960 60.8% 5,320,018 69.1%
10/1/06 7,255,221 10,782,826 3,527,605 67.3% 5,355,088 65.9%
VILLAGE OF KEY BISCAYNE, FLORIDA
REQUIRED SUPPLEMENTARY INFORMATION
PENSION TRUST FUND
SCHEDULE OF EMPLOYER CONTRIBUTIONS
Year Annual
Ended Required Percentage
September 30, Contribution Contributed
2002 $ 377,777 88%
2003 465,562 100%
2004 515,437 100%
2005 764,420 100%
2006 729,857 100%
2007 773,701 100%
The information presented in the required supplemental schedule was determined as part of the actuarial
valuation at the date indicated.
Valuation date 10/1/05
Actuarial cost method Entry age normal
Amortization method Level percent of pay, closed
Remaining amortization 30 years
Asset valuation method 5 year Smoothed Market value
Actuarial assumptions:
Investment rate of return* 8.5% per year compounded annually,
net of investment related expenses
Projected salary increases* 9.4% to 3.5% variable
Cost of living adjustments N/A
*Includes inflation at 4%
-46-
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 47-51
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
revenue source, the property tax.
52-56
Debt Capacity
These schedules present information to help the reader assess the affordability of the Village's 57-60
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 61-63
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 64-65
information in the Village's financial report relates to the services the Village provides and the
activities it performs.
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 TEN 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
2,024,755
1,388,975
3,413,730
25,913,756
171,680
5,550,663
$ 31,636,099
2004
$ 26,149,714
283,180
2,809,659
29 242 553
2005
$ 26,284,600
326,826
4,302,680
30 914 106
7 7 7 ,
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
2006
$ 28,676,266
359,899
4,926,634
33 962 799
2007
$ 31,422,358
261,813
8,453,390
40 137 561
7 7 7 7
2,326,089
778,320
3,104,409
31,002,355
359,899
5,704,954
$ 37,067,208
Note: The Village implemented GASB Statement No. 34 for the fiscal year ended September 30, 2003.
-47-
2,505,881
432,133
2,938,014
33,928,239
261,813
8,885,523
$ 43,075,575
VILLAGE OF KEY BISCAYNE, FLORIDA
CHANGES IN NET ASSETS
LAST TEN 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
Total business -type activities program revenues
Total program revenues
2003 2004
$ 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
844,656
$ 2,663,295
-48-
$ 3,614,636
4,73 8,402
4,311,449
1,220,180
1,103,940
1,013,741
1,487,245
17,489,593
971,081
259,173
15,732
1,245,986
$ 18,735,579
$ 961,100
197,244
6,505
35,787
86,455
2005
$ 2,914,734
4,867,525
4,373,145
1,235,175
2,189,673
2,614,785
1,305,383
19,500,420
454,963
466,162
10,261
931,386
$ 20,431,806
$ 1,257,895
212,121
7,120
1,287,806
142,550
- 650,679
524,736 517,643
1,811,827 4,075,814
520,729
284,900
805,629
$ 2,617,456
518,812
533,632
1,052,444
$ 5,128,258
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
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
517,365 509,571
531,967 520,650
1,049,332 1,030,221
7,847,107 $ 4,890,504
(Continued)
VILLAGE OF KEY BISCAYNE, FLORIDA
CHANGES IN NET ASSETS
(Continued)
LAST TEN 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
$ (17,587,886) $ (15,677,766) $ (15,424,606) $ (16,491,427) $ (17,450,851)
(69,069) (440,357) 121,058 (182,236) (243,614)
$ (17,656,955) $ (16,118,123) $ (15,303,548) $ (16,673,663) $ (17,694,465)
$ 11,317,161 $ 12,770,711 $ 13,360,251
2,251,876 2,219,118 1,488,002
611,502 677,203 705,810
- - 746,400
776,869 821,883 978,304
82,286 110,562 255,611
200,561 126,607 281,657
(9,737) (28,134) (28,135)
15,230,518 16,697,950 17,787,900
22,163
9,737
31,900
21,235
28,134
41,050
28,135
49,369 69,185
$ 15,262,418 $ 16,747,319 $ 17,857,085
$ 14,830,238
1,549,601
1,088,929
797,054
996,092
306,339
(28,133)
19,540,120
45,527
28,133
73,660
$ 19,613,780
$ 18,667,979
1,467,392
1,113,194
763,801
1,000,265
641,115
(28,133)
23,625,613
49,086
28,133
77,219
$ 23,702,832
$ (2,357,368) $ 1,020,184 $ 2,363,294 $ 3,048,693 $ 6,174,762
(37,169) (390,988) 190,243 (108,576) (166,395)
$ (2,394,537) $ 629,196 $ 2,553,537 $ 2,940,117 $ 6,008,367
Note: The Village implemented GASB Statement No. 34 for the fiscal year ended September 30, 2003.
-49-
VILLAGE OF KEY BISCAYNE, FLORIDA
FUND BALANCES OF GOVERNMENTAL FUNDS
LAST TEN 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
$2,967,382 $4,677,188 $5,754,277 $6,874,310 $ 9,875,416
1,000,177 275,000
3,967,559 4,952,188 5,754,277 6,874,310
198,563
905,611
1,104,174
$ 5,071,733
513,862
(489,979)
23,883
$4,976,071
(638,221)
881,595
243,374
$ 5,997,651
(1,496,749)
1,421,014
(75,735)
$ 6,798,575
9,875,416
(2,482,196)
2,954,753
472,557
$10,347,973
Note: The Village implemented GASB Statement No. 34 for the fiscal year ended September 30, 2003.
VILLAGE OF KEY BISCAYNE, FLORIDA
CHANGES IN FUND BALANCES OF GOVERNMENTAL FUNDS
LAST TEN 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
Deficiency of revenues over expenditures
Other fmancing sources (uses):
Transfers in
Transfers out
Bonds issued
Capital lease proceeds
Total other fmancing 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
4,305,474
963,247
1,245,119
782,065
5,108,330
1,415,000
1,064,028
20,759,033
(3,700,139)
938,652
(948,389)
1,657,090
2004
$12,770,711
677,203
2,219,118
961,100
1,031,805
325,651
110,562
441,761
18,537,911
1,712,899
4,462,601
4,113,946
1,098,250
1,212,290
952,261
10,664,348
1,583,924
1,135,384
26,935,903
(8,397,992)
819,251
(847,385)
8,330,462
1,647,353 8,302,328
2005
$ 13,360,251
1,452,210
1,488,002
1,040,130
1,495,947
1,867,362
650,679
255,611
281,657
21,891,849
2,136,375
4,749,407
4,605,148
2,183,774
1,238,376
2,193,633
4,527,998
1,161,298
1,300,596
24,096,605
(2,204,756)
1,245,653
(1,273,788)
2,850,000
404,471
3,226,336
2006
$ 14,830,238
1,885,983
1,549,601
1,196,853
1,756,083
2,041,169
2,799,762
306,339
26,366,028
2,239,052
5,117,176
4,388,362
4,002,609
1,544,696
2,634,887
6,432,271
1,214,646
1,413,272
28,986,971
(2,620,943)
1,731,583
(1,759,716)
3,450,000
2007
$ 18,667,979
1,113,194
2,231,193
1,298,133
1,593,718
1,762,657
206,040
632,355
8,762
27,514,031
2,543,134
5,122,699
4,590,962
1,587,460
1,455,193
2,830,020
6,830,844
1,418,401
1,556,396
27,935,109
(421,078)
6,697,854
(6,725,988)
4,000,000
3,421,867
3,971,866
$ (2,052,786) $ (95,664) $ 1,021,580 $ 800,924 $ 3,550,788
11.94%
10.10%
10.22%
9.07%
Note: The Village implemented GASB Statement No. 34 for the fiscal year ended September 30, 2003.
10.65%
-51-
VILLAGE OF KEY BISCAYNE, FLORIDA
GENERAL GOVERNMENTAL TAX REVENUES BY SOURCE
LAST TEN FISCAL YEARS
(MODIFIED ACCRUAL BASIS OF ACCOUNTING)
Fiscal Ad Valorem Franchise Utility Inter- Communications
Year Taxes Taxes Taxes governmental* Services Tax**
Total
1998 $ 6,963,900 $ 709,067 $1,514,697 $ 843,812 $ $10,031,476
1999 7,012,714 740,031 1,621,473 807,924 10,182,142
2000 7,799,633 729,998 1,723,902 889,704 11,143,237
2001 8,737,608 738,513 1,772,208 930,169 12,178,498
2002 9,569,030 639,072 2,258,931 971,136 904,475 14,342,644
2003 11,317,161 611,502 2,251,876 999,391 825,739 16,005,669
2004 12,770,711 677,203 2,219,118 1,031,805 770,637 17,469,474
2005 13,360,125 705,810 2,234,402 1,140,599 746,400 18,187,336
2006 14,830,238 1,088,929 1,549,601 1,756,083 797,054 20,021,905
2007 18,667,979 1,113,194 1,467,392 1,593,718 763,801 23,606,084
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.
-52-
VILLAGE OF KEY BISCAYNE, FLORIDA
NET ASSESSED VALUE AND ESTIMATED ACTUAL VALUE OF TAXABLE PROPERTY
LAST TEN FISCAL YEARS
Fiscal Year
Ended
September 30,
1998
1999
2000
2001
2002
2003
2004
2005
2006
2007
Real Property
Residential
Property
$1,941,484,664
2,137,666,293
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
Commercial
Property
$ 62,523,036
67,704,896
75,832,533
82,923,284
99,098,715
111,068,946
117,626,058
130,346,736
166,63 8,240
294,540,559
Personal
Property
$ 24,166,508
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
Total Net
Assessed
Value
$2,028,174,208
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
Total
Direct
Tax
Rate
3.606
3.606
3.606
3.606
3.606
3.606
3.606
3.606
3.606
3.450
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.
-53-
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
Debt Total Debt Total
Fiscal Tax Roll General Debt Total Operating Service County Operating Service School
Year Year Operations Service Village Millage Millage Millage Millage Millage Millage
1998 1997 3.606
1999 1998 3.606
2000 1999 3.606
2001 2000 3.606
2002 2001 3.606
2003 2002 3.606
2004 2003 3.606
2005 2004 3.606
2006 2005 3.606
2007 2006 3.450
3.606
3.606
3.606
3.606
- 3.606
3.606
3.606
3.606
3.606
3.450
6.023 0.929 6.952
6.023 0.837 6.860
5.809 0.816 6.625
5.751 0.652 6.403
5.713 0.552 6.265
5.889 0.390 6.279
5.969 0.285 6.254
5.935 0.285 6.220
5.835 0.285 6.120
5.615 0.285 5.900
Note: All millage rates are based on $1 for every $1,000 of assessed value.
9.356
9.182
8.654
8.702
8.528
8.482
8.418
8.090
7.947
7.691
1.106
0.978
0.990
0.915
0.848
0.770
0.682
0.597
0.491
0.414
10.462
10.160
9.644
9.617
9.376
9.252
9.100
8.687
8.438
8.105
Sources: Village of Key Biscayne Finance Department and Miami -Dade County Property Appraiser's Office.
Florida South
Inland Florida
Navigation Water
District Management
0.050
0.047
0.044
0.041
0.039
0.039
0.039
0.039
0.039
0.039
0.597
0.597
0.597
0.597
0.697
0.697
0.597
0.597
0.597
0.597
Total
Direct and
Overlapping
Other Rates
0.416
0.434
0.421
0.451
0.451
0.451
1.086
1.030
1.014
1.008
22.083
21.704
20.937
20.715
20.434
20.324
20.682
20.179
19.814
19.099
(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).
-54-
1
VILLAGE OF KEY BISCAYNE, FLORIDA
PRINCIPAL PROPERTY TAXPAYERS
CURRENT YEAR AND NINE YEARS AGO
2007
Taxpayer
Sonesta Beach Resort
United Real Estate Ventures
GB Hotel Partners LTD
260 Cape Florida LLC
Ocean Club Community Assoc.
Claudio & Yvonne Alvarez
Aurelio & Berta Fernandez
Garflo Investments
Roger & Susana Khouri
CSM Key Biscayne Equities LLC
Net
Assessed
Value
$ 44,568,400
42,064,691
34,700,000
12,663,250
12,500,000
9,202,584
7,813,741
7,361,525
6,979,000
6,438,569
$ 184,291,760
Percent of
Total
Village Net
Assessed
Rank Value
1 0.79%
2 0.75%
3 0.62%
4 0.22%
5 0.22%
6 0.16%
7 0.14%
8 0.13%
9 0.12%
10 0.00%
3.15%
Source: Tax roll provided by Miami -Dade County Property Appraisers Office.
1998
Taxpayer
Ocean Club Key Biscayne
Sonesta Beach Hotel
GB Hotel Partners LTD
Key Biscayne Shopping Center
Grand Bay Tower Association
Florida Power & Light
Red Dragon Sands, Ltd.
Bellsouth Telecommunications, Inc.
Fininvest Investment, et al (Key Colony)
Valley Forge, Ltd.
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Net
Assessed
Value
$ 53,074,332
30,905,066
16, 842,465
9,320,894
8,660,416
5,623,841
4,977,558
4,447,716
4,163,139
2,889,623
$ 140,905,050
Percent of
Total
Village Net
Assessed
Rank Value
1 2.38%
2 1.38%
3 0.75%
4 0.42%
5 0.39%
6 0.25%
7 0.22%
8 0.20%
9 0.19%
10 0.13%
6.31%
VILLAGE OF KEY BISCAYNE, FLORIDA
PROPERTY TAX LEVIES AND COLLECTIONS
LAST TEN FISCAL YEARS
Total Taxes
Fiscal Year Levied for
Ended Fiscal
September 30., Year
1998 $ 7,222,995
1999 7,313,596
2000 8,050,243
2001 9,011,571
2002 9,850,992
2003 11,755,271
2004 13,201,979
2005 13,974,460
2006 15,461,356
2007 19,423,659
Collected within
the Fiscal Year
of the Levy
Collections in
Percent Subsequent
Amount of Levy Year's
$ 6,948,521
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
96.20% $ 10,423
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
Total Collections
to Date
Percent
Amount of Levy
$6,958,944
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
96.34%
96.03%
97.03%
97.12%
96.74%
96.42%
97.63%
95.75%
96.06%
96.25%
Source: Village of Key Biscayne Finance Department and Miami -Dade County Tax Collector's Office.
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1
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)
1997 $ - $7,675,000 $ $ $7,675,000 0.00% $
1998 - 6,850,000 - - 6,850,000 0.00%
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
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.
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VILLAGE OF KEY BISCAYNE, FLORIDA
RATIOS OF GENERAL BONDED DEBT OUTSTANDING
LAST TEN FISCAL YEARS
The Village has never had general obligation debt.
VILLAGE OF KEY BISCAYNE, FLORIDA
DIRECT AND OVERLAPPING GOVERNMENTAL ACTIVITIES DEBT
SEPTEMBER 30, 2007
Government Unit
Net
Debt
Outstanding
Direct:
Village of Key Biscayne $ 36,895,102
Overlapping debt:
Miami -Dade County
Miami -Dade County School Board
Subtotal, Overlapping Debt
Village of Key Biscayne Direct Debt
Total Direct and Overlapping Debt
507,316,000
560,574,000
2007
Percentage
Applicable to
the Village of
Key Biscayne (1)
100.00%
2.98%
2.98%
Amount
Applicable to
the Village of
Key Biscayne
$ 36,895,102
15,118,017
16,705,105
31,823,122
36,895,102
$ 68,718,224
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.
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VILLAGE OF KEY BISCAYNE, FLORIDA
PLEDGED REVENUE COVERAGE
LAST TEN FISCAL YEARS
Fiscal Year Non -
Ended Ad Valorem Debt Service
September 301 Revenues Principal Interest Coverage
1998 $ 4,697,973 $ 855,000 $ 277,825 4.15
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
Source: Village of Key Biscayne Finance Department
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)
1998 - $ - $ 6.7%
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%
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.
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VILLAGE OF KEY BISCAYNE, FLORIDA
PRINCIPAL EMPLOYERS
CURRENT YEAR AND NINE YEARS AGO
2007 1998
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
Sonesta Beach Resort 1,500 2 not known
Winn Dixie Stores, Inc. 250 3 not known
Village of Key Biscayne 100 4 not known
All remaining employers are of an extremely small number Information not available
Total 3,350
Notes: (1) All amounts are estimated for timely inclusion in report. Requests for information received no response.
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VILLAGE OF KEY BISCAYNE, FLORIDA
FULL-TIME EQUIVALENT VILLAGE GOVERNMENT EMPLOYEES BY FUNCTION
LAST TEN FISCAL YEARS
1998 1999 2000 2001 2002 2003 2004 2005 2006 2007
Number of employees:
General government
Public safety
Building, planning & zoning
Public works
Parks and recreation
8 8 7 7 7 5 6 7 6 6
70 71 72 72 72 74 76 79 79 79
8 10 16 16 16 12 12 13 13 14
2 2 3 3 3 5 5 5 5 4
2 3 4 3 4 4 4 6 6 7
Total number of employees 90 94 102 101 102 100 103 110 109 110
Source: Village of Key Biscayne Finance Department.
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VILLAGE OF KEY BISCAYNE, FLORIDA
OPERATING INDICATORS BY FUNCTION/PROGRAM
LAST TEN FISCAL YEARS
Function/Program 1998 1999 2000 2001 2002 2003 2004 2005 2006 2007
Public safety:
Police:
Police personnel and officers 37 38 40 40 40 40 41 40 40 40
Police calls for service 21,982 20,846 21,127 20,659 21,127 20,660 19,004 16,510 13,006 35,412
Parking violations 703 901 789 639 789 639 628 682 801 996
Traffic violations 1,779 2,737 2,875 2,433 2,875 2,433 3,035 1,397 1,468 1,104
Fire:
Fire personnel 33 33 33 33 33 34 35 39 39 39
Fire incidents 760 868 1,051 485 1,050 1,114 1,148 1,403 1,103 998
Fire inspections performed 2,250 197 565 470 476 840 307 332 269 220
Planning and development:
Business permits issued
Occupational licenses issued
Culture and recreation:
Number of building users
Solid waste:
Residential accounts
Sources: Various Village Departments.
3,457 2,851 2,408 1,803 2,313 2,581 3,061 3,045 3,000 3,504
409 576 598 625 729 668 428 433 475 914
- - 1,250 1,600 1,400 1,400
1,200 1,200 1,200 1,200 1,200 1,200 1,200 1,200 1,200 1,200
Note: Indicators are not available for the general government function.
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I
VILLAGE OF KEY BISCAYNE, FLORIDA
CAPITAL ASSET STATISTICS BY FUNCTION/PROGRAM
LAST TEN FISCAL YEARS
Function/Program 1998 1999 2000 2001 2002 2003 2004 2005 2006 2007
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
250 250 250 250 300 300 300 300 300 300
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
Swimming pools - 1 1 1
Sources: Various Village Departments.
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MOM
COMPLIANCE SECTION
Rachlin
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 Auditinj 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, 2007, and have issued our report thereon
dated May 21, 2008. 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.
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.
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 or material weaknesses. We did not identify any deficiencies in internal
control over financial reporting that we consider to be material weaknesses, as defined above.
-66-
Rachlin LLP ■ One Southeast Third Avenue • Tenth Floor • Miami, Florida 33131 • Phone 305.377.4228 • Fax 305.377.8331 • www.rachlin.com
An Independent Member of Baker Tilly International
M I AM I • FORT LAUD ERDALE • WEST PALM BEACH
Honorable Mayor, Village Council and Village Manager
Village of Key Biscayne, Florida
Page Two
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 no instances of noncompliance that are required to be
reported under Government Auditing Standards.
However, we noted an other matter that we have reported to management in the accompanying schedule
of findings and responses.
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.
cfaddAlt'i LLP
Miami, Florida
May 21, 2008
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Rachlin
accountants - advisors
Rachlin
accountants • 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, 2007, and have issued our report thereon dated May 21, 2008.
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.
Disclosures in that report, which is dated May 21, 2008, 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 govern the conduct of local governmental entity audits performed in the State of
Florida and, unless otherwise required to be reported in the report on compliance and internal controls
this letter is required to include the following information.
• 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, except as noted
in the schedule of findings and responses.
• 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, accounting procedures, and internal
controls. 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
provisions of contracts and grant agreements or abuse that have an effect on the financial statements
that is less than material but more than inconsequential. In connection with our audit, we did not
have any such findings.
• 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
-68-
• • •
Rachlin LLP ■ One Southeast Third Avenue • Tenth Floor • Miami, Florida 33131 • Phone 305.377.4228 • Fax 305.377.8331 • www.rachlin.com
An Independent Member of Baker Tilly International
M I AM I • FORT LAUDERDALE • WEST PALM BEACH
Honorable Mayor, Village Council and Village Manager
Village of Key Biscayne, Florida
Page Two
effect 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, 2007, 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, 2007. In
connection with our audit, we determined that these two reports were in agreement.
• Sections 10.554(1)(i)7.c. and 10.556(7), Rules of the Auditor General, require that we apply
financial condition assessment procedures. In connection with our audit, we applied financial
condition assessment procedures. It is management's responsibility to monitor the entity'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. The assessment was done
as of the fiscal year end. There were no findings that identified deteriorating financial conditions.
This management letter is intended solely for the information of the Honorable Mayor, Village Council,
Village Manager and the Auditor General of the State of Florida and is not intended to be and should not
be used by anyone other than these specified parties.
`iaufziw La
Miami, Florida
May 21, 2008
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Rachlin
accountants -advisors
VILLAGE OF KEY BISCAYNE, FLORIDA
SCHEDULE OF FINDINGS AND RESPONSES
FISCAL YEAR ENDED SEPTEMBER 30, 2007
PRIOR YEAR FINDING NOT IMPLEMENTED
Control Deficiency
06-01 Village Credit Cards
Condition
When performing a test over the process of the Village personnel and their use of Village issued credit
cards, we noted in various instances that there was no support attached or in adequate support attached to
the credit card statement identifying the business purpose of the transaction. In those instances, sign offs
of responsible officials were noted on the credit card statement. This is a repeat comment from the prior
year. Subsequent to the reporting of this matter in the prior year's audit, we were provided a written
policy prepared by the Village, however, we noted during our audit for the fiscal year ended September 30,
2007, that the credit card policy was not properly communicated to Village personnel.
Criteria
The Village has the responsibility to safeguard their assets from loss or misuse.
Cause
Lack of adequate internal controls over credit card practices stemming from lack of a written policy
communicated to Village personnel.
Effect
Inadequately supported transactions of expenses paid with the Village credit cards.
Recommendation
We recommend that the Village communicate written policies and procedures for the proper
safeguarding and usage of the Village credit cards. Examples of what the written policy may include are
as follows: adequate oversight and internal controls should include safeguarding the actual credit card;
ensuring only authorized personnel have access to the credit card; sufficient documentation of all credit
cards purchases should be maintained in the form of invoices and/or receipts and in the rare instance
where a receipt is lost or cannot be obtained, s sign off by a responsible Village official; monthly credit
cards statements should be reconciled to the receipts on hand by a person other than the individual who
are authorized to use the credit card and documentation should support a valid business purpose;
payments should be remitted to the credit card vendor in a timely fashion to avoid late fees and charges.
Views of Responsible Officials and Planned Corrective Actions
The Village has adopted a written credit policy approved by the Village Manager. It states that all
purchases shall be accompanied by complete receipt documentation. The monthly statements are not
paid until 100% compliance with this provision is accomplished. At times credit privileges are
suspended until payment is received. There is no exception to this policy.
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VILLAGE OF KEY BISCAYNE, FLORIDA
SCHEDULE OF FINDINGS AND QUESTIONED COSTS
(Continued)
CURRENT YEAR FINDINGS AND RECOMMENDATIONS
None.
NEW PRONOUNCEMENT
Governmental Accounting Standards Board Statement No. 45 — Accounting and Financial Reporting
by Employers for Post Employment Benefits Other than Pensions
The GASB has issued Statement No. 45, "Accounting and Financial Reporting by Employers for
Postemployment Benefits Other Than Pensions," which provides guidance on all aspects of OPEB
reporting by employers. The requirements of this statement are effective for fiscal periods beginning
after December 15, 2006, for governments with annual revenues of $100 million or more; for fiscal
periods beginning after December 15, 2007, for governments with total annual revenues of $10 million or
more but less than $100 million; and for fiscal periods beginning after December 15, 2008, for
governments with total annual revenues of less than $10 million. The Village will be required to
implement this pronouncement for the fiscal year ended September 30, 2009.
Recommendation
The contents of this statement are highly complex and will require significant lead time to implement on
the respective implementation date. We would suggest that the Village obtain a thorough understanding
of the requirements and initiate planning for implementation in a prudent manner.
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