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HomeMy Public PortalAboutCAFR 2000.pdfVILLAGE OF KEY BISCAYNE, FLORIDA COMPREHENSIVE ANNUAL FINANCIAL REPORT FISCAL YEAR ENDED SEPTEMBER 30, 2000 Prepared by: THE FINANCE DEPARTMENT I VILLAGE OF KEY BISCAYNE, FLORIDA COMPREHENSIVE ANNUAL FINANCIAL REPORT FISCAL YEAR ENDED SEPTEMBER 30, 2000 TABLE OF CONTENTS PAGE 1. II. INTRODUCTORY SECTION Letter of Transmittal Village Officials Certificate of Achievement for Excellence in Financial Reporting Village Organizational Chart FINANCIAL SECTION i xii xiii xiv REPORT OF INDEPENDENT CERTIFIED PUBLIC ACCOUNTANTS 1 GENERAL PURPOSE FINANCIAL STATEMENTS (COMBINED STATEMENTS - OVERVIEW): Combined Balance Sheet - All Fund Types and Account Groups 3 Combined Statement of Revenues, Expenditures and Changes in Fund Balances - All Governmental Fund Types 4 Statement of Revenues and Expenditures- Budget and Actual - General Fund 5 Combined Statement of Revenues, Expenses and Changes in Retained Earnings - Enterprise Funds 6 Combined Statement of Cash Flows - Enterprise Funds 7 Statement of Changes in Plan Net Assets - Pension Trust Fund 8 Notes to General Purpose Financial Statements 9 Required Supplementary Information 23 COMBINING, INDIVIDUAL FUND AND ACCOUNT GROUP STATEMENTS AND SCHEDULES GENERAL FUND: Comparative Balance Sheets 24 Schedule of Revenues and Expenditures - Budget and Actual 25 CAPITAL PROJECTS FUNDS: Combining Balance Sheets 27 Combining Statements of Revenues, Expenditures and Changes in Fund Balances 28 ENTERPRISE FUNDS: Combining Balance Sheets 29 Combining Statements of Revenues, Expenses and Changes in Retained Earnings 30 Combining Statements of Cash Flows 31 VILLAGE OF KEY BISCAYNE, FLORIDA TABLE OF CONTENTS II. FINANCIAL SECTION ACCOUNT GROUPS: GENERAL FIXED ASSETS ACCOUNT GROUP: Schedule of General Fixed Assets By Source Schedule of General Fixed Assets By Function and Activity Schedule of Changes in General Fixed Assets By Function and Activity GENERAL LONG-TERM DEBT ACCOUNT GROUP: Schedule of General Long-Term Debt III. STATISTICAL SECTION General Governmental Expenditures by Function General Governmental Revenues by Source Utility Tax Revenue By Source; Franchise Fee Revenue by Source Property Tax Levies and Collection Assessed and Estimated Actual Value of Taxable Property Property Tax Rates Direct and Overlapping Governments Ratio of Annual Debt Service Expenditures for Net Bonded Debt to General Governmental Expenditures Schedule of Direct and Overlapping Debt - General Obligation Bonds Ratio of Net Bonded Debt to Assessed Value and Per Capita Demographic Statistics Property Value, Construction and Bank Deposits Principal Taxpayers Miscellaneous Statistical Data IV. COMPLIANCE SECTION Report of Independent Certified Public Accountants on Compliance and on Internal Controls over Financial Reporting 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 PAGE 32 33 34 35 36 37 38 39 40 41 42 43 44 45 46 47 48 49 51 Schedule of Findings 53 INTRODUCTORY SECTION V I L L A G E OF KEY B I S C A Y N E Office of the Village Manager Village Council Joe I. Rasco, Mayor Martha Fdez-Ledn Broucek, Lice Mayor Scott Bass Alan H. Fein Mortimer Fried Gregory C. Han Robert Oldakowski Village Manager C Samuel Kissinger Honorable Mayor, Members of the Village Council and Citizens of the Village of Key Biscayne: The Comprehensive Annual Financial Report of the Village of Key Biscayne for the fiscal year ended September 30, 2000, is hereby submitted. Responsibility for both the accuracy of the data and the completeness and fairness of the presentation, including all disclosures, rests with the Village. To the best of our knowledge and belief, the enclosed data is accurate in all material respects and is reported in a manner designed to fairly present the financial position and results of operations of the various funds and account groups of the Village. All disclosures necessary to enable the reader to gain an understanding of the Village's financial activities have been included. The Comprehensive Annual Financial Report (CAFR) is presented in four sections. The introductory section includes this transmittal letter, the Village's organizational chart, a list of principal officials and the 1999 Certificate of Achievement for Excellence in Financial Reporting. The financial section includes the report of the independent certified public accountants on the general purpose financial statements and the required notes and the combining, individual fund and account group financial statements and schedules. The statistical section includes unaudited selected financial and demographic information. The compliance section contains those reports required to comply with Governmental Accounting Standards and Rules of the Auditor General of the State of Florida. Reporting Entity and its Services The Village includes, for financial reporting purposes, in conformance with Governmental Accounting Standards Board (GASB) Statement Number 14, all funds and account groups for which the Village is financially accountable. The Village currently provides services associated with the following departments: • Building, Zoning and Planning • Police • Fire Rescue • Recreation • Public Works • Finance and Administrative Services • Office of the Village Clerk • Office of the Village Manager • Office of the Village Attorney -i- 85 West McIntyre Street • Key Biscayne, Florida 33149 • (305) 365-5514 • Fact (305) 365-8936 Honorable Mayor, Village Council and Citizens Village of Key Biscayne Government Structure The Village of Key Biscayne was incorporated on June 18, 1991 and operates under a Council-Manager form of government. The Village Council is comprised of the Mayor and six members and is responsible for enacting ordinances, resolutions and regulations governing the Village as well as appointing the Village Manager, Village Clerk, Village Attorney and members of various advisory boards. As Chief Administrative Officer, the Village Manager is responsible for carrying out the policies and ordinances of the Village Council, for overseeing the day-to-day operations of the Village, and appointing and supervising the department heads of the Village. Location, Village Size, and Population The Village of Key Biscayne is located on Key Biscayne, a barrier island situated between the Atlantic Ocean to the east and Biscayne Bay to the west. The island is located just south of Virginia Key, a separate island connected to the mainland south of downtown Miami by the Rickenbacker Causeway. To the south, Bill Baggs Cape Florida State Recreation Area, a park of approximately 415 acres, borders the Village. To the north, Crandon Park, a 960-acre park administered by Miami-Dade County. The Village currently has an area of approximately 1.25 square miles and population estimated at 9,500 year-round and 4,000 seasonal residents. Major Initiatives For the Year The Village's staff, following specific directives from the Village Council, has been actively involved in a variety of projects designed to provide the Island's residents with the best environment through responsible government. During fiscal year 2000, the most notable examples of the Village's efforts included continuing improvements and additions to the Village's infrastructure, beautification projects designed to further enhance the Village's specific style and character, public safety enhancements, an improved flood insurance community rating, initiation of a community emergency response team program, adoption of a new 20 MPH. speed limit ordinance, and finally the purchase of land upon which the Village will construct a Civic Center complex. During fiscal year 2000, many improvements and additions to the Village's public infrastructure were completed. Special attention is deserving for the East Enid Drive Improvement Project, Crandon Boulevard Improvement and Lighting Project, Beautification with the addition of more Traffic Calming devices and construction of Ocean Park Phase 1. The first project, East Enid Drive, included repaving the twenty foot wide driving lanes, adding brick paver parallel parking spaces north and south of the repaved road, replacing portions of the sidewalk abutting the road on the north side of the street, and extending the in-place decorative sidewalk on the south side of the road from the Lake Park east to the future site of the Ocean Park. In addition, the -ii- Honorable Mayor, Village Council and Citizens Village of Key Biscayne project added two elevated traffic calming/ pedestrian crossing devices, installed a new drainage system, and provided accent path lighting at crosswalk areas and along the promenade east of Ocean Drive. Crandon Boulevard Improvement and Lighting Projects consisted of up-lighting for three medians at the Village entrance, installation of lighting along Ocean Lane Drive and the two Crandon Boulevard medians, as well as the Lake Park located at the intersection of East Enid Drive and Crandon Boulevard. Beautification of the Village continued with the addition of more traffic calming devices on West Heather Drive. A recent Miami Herald news article referred to Crandon Boulevard as "tastefully landscaped". A three tier illuminated fountain was approved by Council resolution and constructed at the intersection of West Mashta Drive and Harbor Drive. Key Biscayne's Beautification efforts were recognized by the national publication, 2000 Stokes Tropicals Plant Guide. Traffic calming is a simple street modification that causes a motorist to drive with increased care. Traffic calming addresses the speeding of vehicles, security and safety of pedestrians, and beautification of the street. Ocean Park Phase 1 combines the unparalleled beauty provided by the Atlantic Ocean and the Key Biscayne beach, which is undeniably the Village of Key Biscayne's greatest asset. The intent of the Beach Park Plan is to achieve simplicity by design and to provide access for Village Residents to our greatest amenity. With this understanding, the plan of the Village Beach Park concentrates most of the activity along the beach, leaving the remaining park in a passive natural design. To facilitate construction and meet state coastal permitting deadlines, the project was divided into two phases. Phase 1 consists of the palm plaza, a trellised pavilion, landscaping and retaining walls, and water and sewer hook-ups. A very positive development for the Village's residents and property owners was the verification received from the National Flood Insurance Community Rating System. The Village of Key Biscayne has now been officially notified by the Federal Emergency Management Agency, (FEMA) that it has been verified as a class 6 community in the National Flood Insurance Community Rating System. This means that flood insurance policies issued or renewed as of April 2000 have received a 20 percent discount. Key Biscayne currently stands third statewide in the rating system with only Sanibel and Juno Beach enjoying better ratings. This reflects upon the excellent design of the Village's stormwater management system. An important program instituted in prior years and during fiscal year 2000 received many improvements. The program is the Community Emergency Response Team (C.E.R.T.). A group of ten to fifteen members, C.E.R.T. is trained to prepare for and respond after a disaster. Last fall, a second team of members from the Village participated in an accelerated training program that culminated in a countywide drill with other teams from Miami Lakes and South Dade. Recently both teams participated in an eight-hour refresher course and combined training exercise. Additional courses are scheduled throughout future months. -iii- Honorable Mayor, Village Council and Citizens Village of Key Biscayne All residents and visitors to Key Biscayne will benefit with the adoption of a new speed ordinance. After investigation by the Police Department it was demonstrated that a speed of twenty-miles per hour is a reasonable speed for all local streets within the residential districts of the Village excluding Crandon Boulevard. Ordinance 2000-2 adopted March 14, 2000 established a twenty-mile per hour speed limit for the residential streets of the Village. Finally, fiscal year 2000 was also a year in which significant progress was made in the area of the Village Civic Center. The most important development that took place during the fiscal year was the purchase contract for one of two parcels of land needed for the center. The Village was successful in closing on the 560 Crandon Boulevard site for a sum of $3,207,835. Another contract for the SunTrust Bank executed in December 1998 had ended its due diligence period in April 1999, with no recommendation to terminate the agreement. Closing on that contract shall take place at the time of the new bank building's opening, presently anticipated to be in October 2001. Ground has been broken on the new bank. For the Future Village of Key Biscayne residents can be assured that during the fiscal year 2001, their government will continue to provide them with more and better services. For instance, Building, Zoning & Planning Department will prepare a landscape ordinance for new single family and duplex homes. It is envisioned that the new ordinance will create a more tropical appearance, screening between homes, and additional shade. This department will continue to improve the quality of services offered to our citizens. During fiscal year 2001, the Village intends to place the building permit system on the Internet. This will enable citizens and contractors to track the status of plans, permits and inspections. The department is storing plans on CD-ROMS. This enables retrieval of plans and printing of copies in the Building, Zoning & Planning office. Keeping with the improvement theme, the Public Works Department will also be involved in numerous infrastructure improvements in the FY 2001. Major projects for 2001 include: expansion of the sidewalk program to other streets around the school to be selected after a comprehensive study is completed, develop a Master Plan for Crandon Boulevard, development of the second phase of Ocean Park, and a beach renourishment project. In addition, Public Works will continue to oversee the contracts awarded for solid waste collection, street sweeping and catch basin cleaning and maintenance, as well as all Village landscaping and maintenance contractors. Important in maintaining and enhancing of the Villagers' unique lifestyle are the activities of the Recreation Department. During the fiscal 2001, the Department will continue to offer a swimming program at the Miami Rowing and Water Sports Center. Also, the department has increased efforts to meet the needs of Key Biscayne's senior population. Working with Keep Seniors on Key Biscayne Committee (KSOKB), the department is developing a program that will meet the information, recreation, and service needs of this valued population. Participation in the Key Biscayne Athletic Club activities -iv- Honorable Mayor, Village Council and Citizens Village of Key Biscayne continues to increase as well as the number of programs they provide. In fiscal year 2001, activities created in fiscal year 2000 such as basketball and flag football camp will be continued and improved. The department will also continue to host the following special events; Halloween Weekend Celebration, Key Biscayne Lighthouse Run & Walk, Concert Series, Winterfest, Spring Egg Hunt, and the Fourth of July Fireworks. The Department continues to assist civic groups with their special events as well contract with outside agencies to provide additional programs and facilities. The Department shall finalize planning for the new Community Center. Associated with the Village's recreational activities is the presence in our community of the Key Biscayne branch of the Miami-Dade Library District. Due to the Village's donation of $35,000 in FY 2000 to the library, the facility will provide an additional 25 hours per week of operation, including Sundays, between October and May. The Village's Police Department is also anticipating that fiscal year 2001 will be the most productive. A number of safety and drug abuse resistance programs are taught to students in all the Village's schools, as well as pedestrian safety. The "Stranger Danger" and bicycle helmet presentations are two of the most popular among residents. The Department recently received a national award for the video "StreetWise" which emphasized bicycle and rollerblade safety. A new gun safety program will be added to the long list of programs already offered by the Department in order to protect all residents especially the children. Patrol officers will increase the checking of businesses at night watching for unlocked doors and open windows. Community Oriented Policing (COP) officers conduct door-to-door visits of businesses and residences providing crime prevention information, hurricane preparedness pamphlets, registering bicycles, and conducting security surveys which will increase during fiscal year 2001. As always, new residents will continue to receive welcome baskets from the Chamber of Commerce delivered by police officers. Departmental Focus Each year the City will focus attention on the efforts and accomplishments of a selected department. This year, the Fire Rescue Department has been selected for this purpose. The Department is composed of a Fire Chief, a Deputy Fire Chief, an Administrative Assistant, and three shifts of Fire Rescue personnel. Each shift is comprised of a Fire Captain, a Fire Lieutenant, and eight firefighter/paramedics. All members of the Department work towards a common goal to contribute to a safe quality community environment for all citizens through responsible fire rescue services. The Fire Rescue Department's primary responsibilities are general fire suppression and emergency medical response. Honorable Mayor, Village Council and Citizens Village of Key Biscayne The Department is also responsible for citizen blood pressure monitoring, citizen CPR classes, first aid classes, dive rescue capability, and trench rescue and community fire and accident prevention public education programs. All sworn personnel under the rank of Deputy Chief are state certified paramedics, the only Department in Miami-Dade County with this distinction. On September 10, 1998, the Board of Directors for the Commission on Fire Accreditation International awarded the Village Fire and Rescue Department International Accredited Agency Status, making the Department the tenth in the world and the first in the state of Florida to achieve this recognition. On August 26, 1999, at the semi-annual commission meeting held in Kansas City Missouri, the full commission voted unanimously to accept the Department's Statement of Findings on the Annual Compliance Report thus continuing the Department's Accredited Agency Status. In addition, the Insurance Services Organization (ISO) conducted a site visit of the Village Fire Rescue Department. Following this site visit, the ISO notified the Village that upon completion of their evaluation of the public protection classification for the Village, that the protection class had been improved and upgraded from a Class 4 to a Class 3. Surveys of the community by the Chamber of Commerce, Florida International University and the Fire Department show the tremendous level of citizen satisfaction with the Department. In the survey conducted by the Department where questions were asked such as quality of care, professionalism, procedures being explained, and the level of concern and caring shown, not only to the patient but to the family as well, the results indicated a 97.2% excellent to outstanding level of customer satisfaction. FINANCIAL INFORMATION Accounting System Internal and Budgetary Control The Village's accounting records for governmental funds operations are maintained on a modified accrual basis, with revenues being recorded when available and measurable, and expenditures being recorded when the services or goods are received and the liabilities are incurred. Budgetary control is maintained at the departmental level. Expenditures that could result in an overexpended balance are not released until additional appropriations are made available. Internal accounting controls have been designed to provide reasonable, but not absolute, assurance regarding safeguarding of assets against loss from unauthorized use or disposition and the reliability of financial records for preparing financial statements and maintaining accountability. The concept of reasonable assurance recognizes that the cost of the controls should not exceed the benefits likely to be derived and the evaluation of costs and benefits requires estimates and judgment by management. All internal control evaluations occur within the above framework. We believe the Village's internal accounting controls adequately safeguard assets and provide reasonable assurance of proper recording of financial transactions. Honorable Mayor, Village Council and Citizens Village of Key Biscayne Reporting Standards The form and content of the Comprehensive Annual Financial Report and the accompanying financial statements and statistical tables were prepared in conformance with standards set forth by: 1. Governmental Accounting Standards Board (GASB) 2. Financial Accounting Standards Board (FASB) 3. Auditor General of the State of Florida 4. Charter of the Village of Key Biscayne 5. Government Finance Officers Association of the United States and Canada (GFOA) General Government Functions The General Fund is the general operating fund of the Village. General tax revenues and other receipts that are not allocated by law or contractual agreement to some other fund are accounted for in this fund. General operating expenditures, fixed charges and capital improvement costs not accounted for through other funds are accounted for in the General Fund. The amount of General Fund revenues and expenditures from various sources are shown in the following schedule: REVENUES (GAAP Basis) Sources FY 2000 FY 1999 Net Changes % Change Property Taxes $ 7,799,633 $ 7,012,714 $ 786,919 11% Utility Taxes 1,723,902 1,621,473 102,429 6 Franchise Fees 729,998 740,031 (10,033)(1) Intergovernmental 889,704 807,924 81,780 10 Licenses and Permits 1,316,641 668,672 647,969 97 Charges for Services 224,177 457,828 (233,651)(51) Other 560 22,057 (21,497)(97) Interest 315,399 231,820 83,579 36 Grants 124,375 815,116 (690,741 (85) Total Revenues $13.124.389 $12,377.635 $746 .754 6% Honorable Mayor, Village Council and Citizens Village of Key Biscayne EXPENDITURES AND TRANSFERS (GAAP Basis) Function General Government Public Works Building, Zoning & Planning Parks and Recreation Public Safety Debt Service Non-Departmental Capital Outlay Transfers to Capital Improvement Fund Capital Projects Fund FY 2000 FY 1999 Net Changes % Change $ 1,068,710 $ 914,479 $ 154,231 17% 830,360 730,521 99,839 14 1,227,696 1,058,831 168,865 16 380,502 293,664 86,838 30 6,068,147 5,644,903 423,244 7 1,530,767 1,136,327 394,440 35 694,643 672,708 21,935 3 274,078 391,650 (117,572)(30) 1,000,000 1,017,430 (17,430) $13,074,903 $11,860,513 $1,214,390 10% During fiscal year 1995, the Village Council established a Capital Improvement Fund for various infrastructure projects of a multi-year character. Funding for these projects will come from annual appropriations in the General Fund Budget. These appropriations are recorded as operating transfers from the General Fund. During fiscal year 1999, the Village Council established a Civic Center Fund to account for the land acquisition, planning, and construction of a new Village Civic Center to house Police, Fire/EMS, and administration offices for the Village of Key Biscayne. Funding for this project is from a series of Revenue Bonds, the first of which was issued July 30, 1999. Enterprise Funds Enterprise funds are established to finance and account for the acquisition, operation and maintenance of facilities and services, and the cost of providing these goods and services on a continuing basis is financed through the collection of charges from users. The three enterprise funds are: 1. Stormwater Utility System 2. Solid Waste 3. Sanitary Sewer System The Village Council established a budget for the Sanitary Sewer System during the fiscal year. A state loan was obtained from the Florida Department of Environmental Protection to finance the construction of the system. Funds for the pre-construction design phase were received and the engineering firm of Post Buckley Schuh & Jerrigan, Inc. was hired to design the system. Plans and specifications have been completed and approved by all appropriate agencies. -viii- Honorable Mayor, Village Council and Citizens Village of Key Biscayne Fiduciary Fund The Fiduciary Fund type is a Trust and Agency Fund established for the purpose of accounting for assets held in a trustee capacity or as an agent for individuals, private organizations, and other governments. As of September 30, 2000, the Pension Trust Fund is recorded as a Fiduciary Fund: Pension Trust Fund The Village Council, on October 1, 1997, established a Retirement Plan for sworn police and firefighters in compliance with Part VII, Chapter 112, Florida Statutes, and Section 14, Article X of the State Constitution. Each member is required to contribute 14% of his/her salary until September 30, 2000. This rate will be adjusted each year thereafter, based on the most recent actuarial valuation of the plan. The Plan also receives funding from the State of Florida under F.S. 175 and 185. The net assets in the Plan as of September 30, 2000 were approximately $1,400,000. Other Plans Administered by the Village A 401(a) money purchase plan is offered by the Village for its employees and was created in accordance with Internal Revenue Code Section 401. The plan is managed by independent plan administrators and permits employees to defer a portion of their salary until future years. The Village does not have a fiduciary responsibility over the Plan assets, therefore, it is not included in the Village financial statements, but is included as a footnote disclosure. The 401(a) fund had approximately $5,000,000 in net assets as of September 30, 2000. Also, employees may contribute to a Section 457 Plan, which was created in accordance with Internal Revenue Code Section 457. The Plan managed by an independent plan administrator, permits employees to defer a portion of their salary until future years. Net assets of the 457 Plan as of September 30, 2000 were approximately $2,300,000. In accordance with GASB Statement No. 32 and because the Village does not have fiduciary responsibility over the assets of this plan, the Village does not report this Plan in their financial statements and no disclosure is required. General Fixed Assets The General Fixed Assets of the Village are those assets used in the performance of general governmental functions. In accordance with generally accepted accounting principles for local governments, the Village does not record depreciation on general fixed assets nor does it record infrastructure assets such as roads, bridges, curbs and gutters, streets and sidewalks, drainage systems, and similar assets that are immovable and of value only to the Village. Assets are recorded at cost except donations, which are recorded at fair market value at the date of receipt. As of September 30, 2000, the general fixed assets acquired amount to approximately $25,110,000. Major additions for fiscal year 2000 were for public safety equipment and vehicles. -ix- Honorable Mayor, Village Council and Citizens Village of Key Biscayne Debt Administration The Village of Key Biscayne has three outstanding obligations: 1) a 10-year $9,200,000 Land Acquisition Revenue Bond which was issued on December 20, 1995 at 4.36% from Northern Trust Bank to purchase land for the Village Green. The outstanding balance at September 30, 2000 was $4,155,000; 2) $7,200,000 in Stormwater Utility Notes were issued January 26, 1999 from Bank of America at 4.13% for 20 years. The outstanding balance at September 30, 2000 was $6,940,000; 3) a $10,000,000 Land Acquisition and Capital Improvement Revenue Bond, Series 1999 at 4.715% for 20 years to purchase land and construct the Village Civic Center. The bond was issued through Bank of America. The outstanding balance September 30, 2000 was $10,000,000. Cash Management The Village has several cash management vehicles and investment accounts or money market accounts in SunTrust and Northern Trust Banks under agreements which provided for overnight investments of both the investment accounts and the operating accounts to maximize earnings potential. The Village also has an investment with the Florida Local Government Trust Fund administered by the State Board of Administration, which as of September 30, 2000 had a balance of $192,879 in the General Fund and $344,512 for the Law Enforcement Trust Fund, $3,795 in the Capital Improvement fund, $1,677,618 in the Civic Center Fund, $922,004 in the Stormwater Fund, $25,930 in the Solid Waste Fund. Risk Management The Village is insured with the Florida Municipal Insurance Trust for liability and property coverage and with the Florida Municipal Self-Insurance Fund for Workers Compensation coverage. The liability limit under the policy is $5,000,000. Employee life insurance is with Standard Insurance Company. Certificate Of Achievement For Excellence In Financial Reporting The Government Finance Officers Association of the United States and Canada (GFOA) awarded a Certificate of Achievement for Excellence in Financial Reporting to the Village for its Comprehensive Annual Financial Report for the fiscal year ended September 30, 1999. The Village has received this award each year since its first published CAFR in 1992. The Government Finance Officers Association of the United States and Canada (GFOA) also presented an award for Distinguished Budget Presentation to the Village of Key Biscayne for its annual budget for the fiscal year beginning October 1, 1999. This award has been received since 1993. In order to receive these awards, a governmental unit must publish an easily readable and efficiently organized CAFR and a budget document that meets program criteria as a policy document, as an operations guide, as a financial plan and as a communications device. -x- Honorable Mayor, Village Council and Citizens Village of Key Biscayne The awards are valid for a period of one year only. We believe our current CAFR and budget continue to conform to program requirements and we have submitted them to the GFOA to determine their eligibility for fiscal year ended September 30, 2000. Acknowledgments The preparation of this report could not have been accomplished without the efficient and dedicated services of the staff of the Village. We express our appreciation to all members of the staff who assisted and contributed to the preparation of this report. A special note of thanks and appreciation is also extended to the firm of Rachlin Cohen & Holtz LLP for their professional approach and high standards in conduct of their independent audit of the Village's financial records and transactions. Respectfully submitted, C. Samuel Kis ~ifiger Village Manag/ VILLAGE OF KEY BISCAYNE, FLORIDA VILLAGE OFFICIALS SEPTEMBER 30, 2000 VILLAGE COUNCIL Joe I. Rasco, Mayor Martha Fdez-Leon Broucek, Vice Mayor Scott Bass Gregory C. Han Alan H. Fein Mortimer Fried Robert Oldakowski VILLAGE MANAGER C. Samuel Kissinger VILLAGE CLERK Conchita H. Alvarez, CMC VILLAGE ATTORNEY Weiss, Serota & Helfman, P.A. FINANCE DIRECTOR Moyer & Associates/Severn Trent Services VILLAGE AUDITORS Rachlin Cohen & Holtz LLP Certified Public Accountants & Consultants VILLAGE OF KEY BISCAYNE, FLORIDA 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, 1999 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. WDirector liAtiVAI :A`l,+r r•:4; R.s r:o.1 11;11i11pi1 Organizational Chart RESIDENTS OF KEY BISCAYNE Village Clerk (1.5) I Special Master (3) Village C ouncil (7) Village Manager (2) Local Planning Agency Village Attorney Police/Fire Retirement Board (5) Assistant to the Manager (1) Department of Building, Zoning and Planning (11) Building Zoning Planning Code Assistance Department of Emergency Services (71.5) Fire Rescue Police Department of Recreation (3) Special Events Sports and Athletics Programs and Tours Department of Public Works (2) Village Engineer Contract Supervisor Stormwater Management Refuse Collection and Recycling Department of Finance and Administrative Services (2) Finance/ Accountin Personnel/ Benefits Maintenance Rachlin Cohen & Holtz LLP Certified Public Accountants & Consultants REPORT OF INDEPENDENT CERTIFIED PUBLIC ACCOUNTANTS Honorable Mayor, Village Council and Village Manager Village of Key Biscayne, Florida We have audited the accompanying general purpose financial statements of the Village of Key Biscayne, Florida (the Village) as of and for the year ended September 30, 2000, as listed in the table of contents. These general purpose financial statements are the responsibility of the Village's management. Our responsibility is to express an opinion on these general purpose financial statements based on our audit. We conducted our audit in accordance with generally accepted auditing standards 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 general purpose financial statements are free of material misstatement. An audit includes examining, on a test basis, evidence supporting the amounts and disclosures in the financial statements. An audit also includes 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 opinion. In our opinion, the general purpose financial statements referred to above present fairly, in all material respects, the financial position of the Village as of September 30, 2000, and the results of its operations and the cash flows of its proprietary fund type for the year then ended in conformity with generally accepted accounting principles. In accordance with Government Auditing Standards, we have also issued a report dated December 8, 2000 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 grants. That report is an integral part of an audit performed in accordance with Government Auditing Standards and should be read in conjunction with this report in considering the results of our audit. Our audit was conducted for the purpose of forming an opinion on the general purpose financial statements taken as a whole. The accompanying combining, individual fund and account group statements and schedules as listed in the table of contents and the required supplementary information on page 23 are presented for purposes of additional analysis and are not a required part of the general purpose financial statements. Such information has been subjected to the auditing procedures applied in the audit of the general purpose financial statements and, in our opinion, is fairly presented in all material respects in relation to the general purpose financial statements taken as a whole. -1- One Southeast Third Av emte, Tenth Floor, ,Miami, Florida 33131 • Tel 305-377-4228 • Fay 305-377-8331 Offices in Miami • Ft Lauderdale • Boca Raton • West Palm Beach @ Stuart i~ ice rchcpa com Member nr tiummd Intel 11 arinn II lssoeiatvs Inc m ith nttice, in prim upaI atres throughout the r%orld Honorable Mayor, Village Council and Village Manager Village of Key Biscayne, Florida Page Two The information shown in the statistical section listed in the table of contents has not been subjected to the auditing procedures applied in the audit of the general purpose financial statements and, accordingly, we express no opinion thereon. A, - e-- to4ej Miami, Florida December 8, 2000 GENERAL PURPOSE FINANCIAL STATEMENTS (Combined Statements - Overview) VILLAGE OF KEY BISCAYNE, FLORIDA COMBINED BALANCE SHEET ALL FUND TYPES AND ACCOUNT GROUPS SEPTEMBER 30, 2000 (WITH COMPARATIVE TOTALS FOR SEPTEMBER 30, 1999) Governmental Fund Tye Proprietary Fund Types Fiduciary Account Fund Type Groups Trust General G neral Totals Capital e and Fixed Long-Term (Memorandum Only) General Projects Enterrse Agency Assets D-ch 2&U 1999 ASSETS AND OTHER DEBITS Cash and cash equivalents $ 3,208,836 $ 1,750,315 $ 1,435,420 $ 361 $$ 6,394,932 $ 5,781,531 Investments 884,890 8,324,145 -1,305,020 10,514,055 14,099,629 Due from other funds 83,978 83,978 318,792 19 241 19 241 29955Property taxes receivable ,,, Other receivables 385,899 370,768 122,747 128,398 1,007,812 559,972 Capitalized loan fees and interest --186,018 -186,018 43,962 Fixed assets, net -9,616,532 - 25,151,069 34, 767,601 29,819, 736 Amount to be provided for retirement of general long-term debt 15,387,589 15,387,589 16,138,654 Total assets and other debits $ 4,582,844 $ 10,445,228 $ 11,360,717 $ 1,433,779 $ 25,151,069 $ 15,387,589 $ 68,361,226 $ 66,817,575 LIABILITIES, EQUITY AND OTHER CREDITS Liabilities: Accounts payable and accrued liabilities $ 366,563 $ 195,515 $ 4,189 $ - $ - $$ 566,267 $ 580,573 Retainage payable -45,293 Deposits and performance bonds 46,454 46,454 5,915 Due to other funds 50,490 33,488 83,978 318,792 Revolving loan -865,818 865,818 723,762 Rebatable arbitrage 97,165 97,165 - Compensated absences payable 1,135,424 1,135,424 1,048,654 Revenue bonds payable --6,940,000 - 14,155,000 21,095,000 22,290,000 Total liabilities 413,017 246,005 7,843,495 - - 15,387,589 23,890,106 25,012,989 Equity and other credits: Investment in general fixed assets 25,151,069 25,151,069 19,949,285 Contributed capital -2,682,901 - - -2,682,901 2,682,901 Retained earnings 834,321 - - -834,321 880,962 Fund balance: Reserved 3,854,827 10,199,223 -1,433,779 15,487,829 17,891,333 Unreserved: Designated 315,000 --- - -315,000 400,105 Total equity and other credits 4,169,827 10,199,223 3,517,222 1,433,779 25,151,069 -44,471,120 41,804,586 Total liabilities, equity and other credits $ 4,582,844 $ 10,445,228 $ 11,360,717 $ 1,433,779 $ 25,151,069 $ 15,387,589 $ 68,361,226 $ 66,817,575 See notes to general purpose financial statements. -3- VILLAGE OF KEY BISCAYNE, FLORIDA COMBINED STATEMENT OF REVENUES, EXPENDITURES AND CHANGES IN FUND BALANCES ALL GOVERNMENTAL FUND TYPES FISCAL YEAR ENDED SEPTEMBER 30, 2000 (WITH COMPARATIVE TOTALS FOR FISCAL YEAR ENDED SEPTEMBER 30, 1999) General Capital Projects Totals (Memorandum Only) E1uld Funds ZM 1999 Revenues: Property taxes $ 7,799,633 $ - $ 7,799,633 $ 7,012,714 Utility taxes 1,723,902 -1,723,902 1,621,473 Franchise fees 729,998 -729,998 740,031 Intergovernmental 889,704 -889,704 807,924 Licenses and permits 1,316,641 -1,316,641 668,672 Charges for services 224,177 -224,177 457,828 Other ---227,633 Interest 315,959 849,962 1,165,921 524,205 Grants 124,375 -124,375 903,116 Total revenues 13,124,389 849,962 13,974,351 12,963,596 Expenditures: Current: General government 1,068,710 -1,068,710 914,479 Public works 830,360 -830,360 730,521 Building, zoning, and planning 1,227,696 -1,227,696 1,058,831 Parks and recreation 380,502 -380,502 293,664 Public safety 6,068,147 -6,068,147 5,644,903 Non-departmental 694,643 -694,643 672,708 Capital outlay 274,078 4,899,093 5,173,171 2,881,125 Debt Service: Principal 935,000 -935,000 895,000 Interest 595,767 -595,767 241,327 Total expenditures 12,074,903 4,899,093 16,973,996 13,332,558 Excess (deficiency) of revenues over expenditures 1,049,486 (4,049,131)(2,999,645)(368,962) Other financing sources (uses): Operating transfers in -1,000,000 1,000,000 1,017,430 Operating transfers out (1,000,000)-(1,000,000)(1,017,430) Bond proceeds ---10,000,000 Total other financing sources (uses) (1,000,000)1,000,000 -10,000,000 Excess (deficiency) of revenues and other financing sources over expenditures and other financing uses 49,486 (3,049,131)(2,999,645)9,631,038 Fund balances, beginning 4,120,341 13,248,354 17,368,695 7,737,657 Fund balances, ending $ 4,169,827 $ 10,199,223 $ 14,369,050 $ 17,368,695 See notes to general purpose financial statements. VILLAGE OF KEY BISCAYNE, FLORIDA STATEMENT OF REVENUES AND EXPENDITURES BUDGET AND ACTUAL - GENERAL FUND FISCAL YEAR ENDED SEPTEMBER 30, 2000 Budget Budgetary Basis Actual Variance Favorable (Unfavorable) Revenues: Property taxes $ 7,677,766 $ 7,799,633 $ 121,867 Utility taxes 1,700,000 1,723,902 23,902 Franchise fees 843,425 729,998 (113,427) Intergovernmental 900,000 889,704 (10,296) Licenses and permits 531,304 1,316,641 785,337 Charges for services 103,020 224,177 121,157 Interest 494,600 315,959 (178,641) Grants 118,750 124,375 5,625 Total revenues 12,368,865 13,124,389 755,524 Expenditures: Current: General government 934,575 950,710 (16,135) Public works 588,739 712,892 (124,153) Building, zoning and planning 1,232,662 1,233,476 (814) Parks and recreation 399,000 398,068 932 Public safety 6,261,217 6,296,461 (35,244) Non-departmental 854,046 716,529 137,517 Debt Service: Principal 935,000 935,000 - Interest 603,626 595,767 7,859 Total expenditures 11,808,865 11,838,903 (30,038) Excess of revenues over expenditures 560,000 1,285,486 725,486 Other financing sources (uses): Appropriation of prior years' fund balance - expenditures of prior year reserves 440,000 (236,000)(676,000) Excess of revenues and other financing sources over expenditures and other financing uses $ 1,000,000 $ 1,049,486 $ 49,486 See notes to general purpose financial statements. VILLAGE OF KEY BISCAYNE, FLORIDA COMBINED STATEMENT OF REVENUES, EXPENSES AND CHANGES IN RETAINED EARNINGS ENTERPRISE FUNDS FISCAL YEAR ENDED SEPTEMBER 30, 2000 (WITH COMPARATIVE TOTALS FOR FISCAL YEAR ENDED SEPTEMBER 30, 1999) 2000 1999 Operating revenue $ 781,477 $ 750,040 Operating expenses: General and administrative costs 345,595 298,769 Depreciation 273,919 269,729 Total operating expenses 619,514 568,498 Operating income 161,963 181,542 Non-operating revenue (expense): Interest income 84,194 63,160 Interest expense (292,798)(301,499) Total non-operating expense (208,604)(238,339) Net loss (46,641)(56,797) Retained earnings, beginning 880,962 937,759 Retained earnings, ending $ 834,321 $ 880,962 See notes to general purpose financial statements. VILLAGE OF KEY BISCAYNE, FLORIDA COMBINED STATEMENT OF CASH FLOWS ENTERPRISE FUNDS FISCAL YEAR ENDED SEPTEMBER 30, 2000 (WITH COMPARATIVE TOTALS FOR FISCAL YEAR ENDED SEPTEMBER 30, 1999) Cash flows from operating activities: Operating income 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 Due from other governments Increase (decrease) in: Accounts payable and accrued liabilities Retainage payable Due to other funds Total adjustments Net cash provided by operating activities Cash flows from capital and related financing activities: Payments for construction in progress Proceeds from revenue bonds Retirement of bond anticipation notes Payments on revenue bonds Net proceeds from revolving loan Interest paid Net cash used by capital and related financing activities Cash flows from investing activities: Interest received Net decrease in cash and cash equivalents Cash and cash equivalents, beginning Cash and cash equivalents, ending 2000 1999 $ 161,963 $ 181,542 273,919 269,729 (10,097) 517,902 (142,056) 8,562 (77,991) (182,491) (11,750) - 33,488 (470,237) 65,513 143,465 227,476 325,007 (20,000) (279,762) - 7,200,000 - (7,200,000) (260,000) 142,056 (292,798) (301,499) (430,742) (581,261) 84,194 63,160 (119,072) (193,094) 1,554,492 1,747,586 $ 1,435,420 $ 1,554,492 See notes to general purpose financial statements. 7 VILLAGE OF KEY BISCAYNE, FLORIDA STATEMENT OF CHANGES IN PLAN NET ASSETS PENSION TRUST FUND FISCAL YEAR ENDED SEPTEMBER 30, 2000 (WITH COMPARATIVE TOTALS FOR FISCAL YEAR ENDED SEPTEMBER 30, 1999) 2000 1222 ADDITIONS Contributions: Plan member $ 479,749 $ 446,789 State 110,700 60,949 Total contributions 590,449 507,738 Investment earnings 74,462 59,353 Total additions 664,911 567,091 DEDUCTIONS Distributions 116,846 44,899 Refunds -5,877 Administrative expenses 37,029 17,799 Total deductions 153,875 68,575 Net increase 511,036 498,516 Net assets held in trust for pension benefits: Beginning of year 922,743 424,227 End of year $ 1,433,779 $ 922,743 See notes to general purpose financial statements. -8- NOTES TO GENERAL PURPOSE FINANCIAL STATEMENTS VILLAGE OF KEY BISCAYNE, FLORIDA NOTES TO GENERAL PURPOSE FINANCIAL STATEMENTS SEPTEMBER 30, 2000 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 accounting policies of the Village conform to generally accepted accounting principles (GAAP) as applied to governmental units. This report, the accounting systems and classification of accounts conform to the standards of the Governmental Accounting Standards Board (GASB), which is the accepted standard-setting body for establishing governmental accounting and financial reporting principles. The more significant of the Village's accounting policies are described below to assist the reader in interpreting the general purpose financial statements and other data in this report. These policies are considered essential and should be read in conjunction with the accompanying general purpose financial statements. 1. Financial Reporting Entity The financial statements were prepared in accordance with GASB Statement No. 14, The Financial Reporting Entity, which establishes standards for defining and reporting on the financial reporting entity. The definition of the financial reporting entity is based upon the concept that elected officials are accountable to their constituents for their actions. One of the objectives of financial reporting is to provide users of financial statements with a basis for assessing the accountability of the elected officials. The financial reporting entity consists of the Village, organizations for which the Village is financially accountable, and other organizations for which the nature and significance of their relationship with the Village are such that exclusion would cause the reporting entity's financial statements to be misleading or incomplete. The Village is financially accountable for a component unit if it appoints a voting majority of the organization's governing board and it is able to impose its will on that organization or there is a potential for the organization to provide specific financial benefits to, or impose specific financial burdens on, the Village. Based upon the application of these criteria, there were no organizations that met the criteria described above. 2. Measurement Focus, Basis of Accounting and Basis of Presentation The accounts of the Village are organized and operated on the basis of funds and account groups. A fund is an independent fiscal and accounting entity with a self-balancing set of accounts. Fund accounting segregates funds according to their intended purpose and is used to aid management in demonstrating compliance with finance-related legal and contractual provisions. The minimum number of funds is maintained consistent with legal and managerial requirements. Account groups are a reporting device to account for certain assets and liabilities of the governmental funds not recorded directly in those funds. VILLAGE OF KEY BISCAYNE, FLORIDA NOTES TO GENERAL PURPOSE FINANCIAL STATEMENTS (Continued) NOTE 1. SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES (Continued) 2. Measurement Focus, Basis of Accounting and Basis of Presentation (Continued) The Village has the following fund types and account groups: Governmental Fund Types Governmental funds are used to account for the Village's general governmental activities. Governmental fund types use the flow of current financial resources measurement focus and the modified accrual basis of accounting. Under the modified accrual basis of accounting, revenues are recognized when susceptible to accrual (i.e., when they are measurable and available). Measurable means the amount of the transaction can be determined and available means collectible within the current period or soon enough thereafter to pay liabilities of the current period. The Village considers all revenues available if they are collected within 60 days after year end. Expenditures are recorded when the related fund liability is incurred, except for unmatured principal and interest on general long-term debt which is recognized when due, and certain compensated absences which are recognized when the obligations are expected to be liquidated with expendable available financial resources. Taxes, intergovernmental revenue, licenses and interest are susceptible to accrual. Sales taxes collected and held by the State at fiscal year end on behalf of the Village are also recognized as revenue. Other receipts and fees become measurable and available when cash is received by the Village and recognized as revenue at that time. Cost reimbursement type grant revenues are considered earned and are accrued simultaneously with the grant expenditures unless such expenditures are prohibited by the grant agreements. The general fund is the Village's primary operating fund. It accounts for all financial resources of the Village, except those required to be accounted for in another fund. Resources are derived primarily from property and utility taxes and intergovernmental revenues. Expenditures are incurred to provide general government, public safety, public works, building, zoning and planning and recreation services. The capital projects funds account for the acquisition or construction of major capital projects not being financed by proprietary funds. The Village has two capital projects funds; the capital improvement fund and the civic center fund. Proprietary Fund Type Proprietary funds are accounted for on the flow of economic resources measurement focus and use the accrual basis of accounting. Under this method, revenues are recorded when earned and expenses are recorded at the time liabilities are incurred. The Village applies all applicable Financial Accounting Standards Board (FASB) statements issued on or before November 30, 1989 except those that are contradicted 1 n VILLAGE OF KEY BISCAYNE, FLORIDA NOTES TO GENERAL PURPOSE FINANCIAL STATEMENTS (Continued) NOTE 1. SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES (Continued) 2. Measurement Focus, Basis of Accounting and Basis of Presentation (Continued) Proprietary Fund Type (Continued) by a Governmental Accounting Standards Board (GASB) pronouncement in accounting and reporting for its proprietary operations. The proprietary fund includes the following fund type: The enterprise funds are used to account for those operations that are financed and operated in a manner similar to a private business or where the Council has decided that the determination of revenues earned, costs incurred (including depreciation) and/or net income is necessary for management accountability. The Village has three enterprise funds; a stormwater utility fund, a solid waste fund and a sanitary sewer construction fund. Fiduciary Fund Type The fiduciary fund accounts for assets held by the Village in a trustee capacity or as an agent on behalf of others. Fiduciary funds include the following fund type: Trust funds are custodial in nature and do not present results of operations or have a measurement focus. Trust funds are accounted for in a manner similar to proprietary fund types. Trust funds are used to account for assets held by the Village in a trustee capacity for individuals, private organizations, other governments, and/or other funds. The Village has one trust fund; a pension trust fund that accounts for a defined benefit pension plan. Account Groups The general fixed assets account group is used to account for fixed assets not accounted for in proprietary funds. The general long-term debt account group is used to account for general long-term obligations including compensated absences that are not specific liabilities of the proprietary fund. 3. Budgets and Budgetary Accounting An annual appropriated budget is prepared for the general fund. 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. VILLAGE OF KEY BISCAYNE, FLORIDA NOTES TO GENERAL PURPOSE FINANCIAL STATEMENTS (Continued) NOTE 1. SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES (Continued) 3. Budgets and Budgetary Accounting (Continued) (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, 2000, 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. The classification detail at which expenditures may not legally exceed appropriations is at the department level. (h) Unencumbered appropriations lapse at year end. Encumbered amounts are not reappropriated in the following year's budget. (i) Budgeted amounts are as originally adopted. There were no budget amendments during the year. 4. Deposits and Investments The Village's cash and cash equivalents are considered to be cash on hand and short-term investments with original maturities of three months or less from the date of acquisition. Deposits include cash on hand and certificates of deposit. Village administration is authorized to invest in those instruments authorized by the Florida Statutes. Investments, which consist of funds held with the State Board of Administration Investment Pool (2A7-Pool), are reported at its fair value of its position in the pool, which is the same as the value of the pool shares. All other investments are reported at fair value. 5. Fixed Assets Fixed assets used in governmental fund type operations are accounted for in the general fixed assets account group, rather than in the governmental funds. General fixed assets purchased are initially reported as expenditures in the general and capital projects funds and are -12- VILLAGE OF KEY BISCAYNE, FLORIDA NOTES TO GENERAL PURPOSE FINANCIAL STATEMENTS (Continued) NOTE 1. SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES (Continued) 5. Fixed Assets (Continued) capitalized at historical cost or estimated cost if actual historical cost is not available in the general fixed assets account group, except for certain infrastructure assets which include streets, alleys, sidewalks, drainage and lighting systems which are immovable and of value only to the Village. Depreciation is not required and has not been provided on general fixed assets. Proprietary fund fixed assets currently consists of assets capitalized for the stormwater utility system project and the sanitary sewer construction project. The fixed assets are stated at cost and depreciated based on the straight-line method over the estimated useful lives, which range between 20 and 45 years. 6. Interfund Receivables/Payables Transactions between funds that are representative of lending/borrowing arrangements at the end of the fiscal year are reported as due to/from other funds. 7. Compensated Absences It is the Village's policy to permit employees to accumulate earned but unused vacation and sick pay and compensatory time within specified limits. The accumulated unpaid vacation and sick leave and compensatory time is reported in the general long-term debt account group. 8. Long-Term Obligations The Village reports long-term debt of governmental funds in the general long-term debt account group. Certain other governmental fund obligations not expected to be financed with current available financial resources are also reported in the general long-term debt account group. Long-term debt and other obligations financed by proprietary funds are reported as liabilities of those funds. 9. Reserves and Designations Fund balances are reserved to indicate that a portion of fund equity is not available for appropriation or are legally segregated for a specific future use. The description of each reserve indicates the purpose for which each was intended. Designated fund balances indicate that a portion of fund equity has been segregated based on tentative plans of the Village administration. Such plans or intent are subject to change. Unreserved, undesignated fund balance is the portion of fund equity available for any lawful use. VILLAGE OF KEY BISCAYNE, FLORIDA NOTES TO GENERAL PURPOSE FINANCIAL STATEMENTS (Continued) NOTE 1. SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES (Continued) 10. Use of Estimates The preparation of financial statements in conformity with generally accepted accounting principles requires management to make estimates and assumptions that affect the amounts reported in the financial statements and accompanying notes. Although these estimates are based on management's knowledge of current events and actions it may undertake in the future, they may ultimately differ from actual results. 11. Comparative Data/Reclassifications Comparative total data for the prior year has been presented in selected sections of the accompanying financial statements in order to provide an understanding of changes in Village's financial position and operations. Certain amounts presented in the prior year data have been reclassified to be consistent with current year's presentation. 12. Memorandum Only - Total Columns Total columns on the combined statements which are captioned "memorandum only" aggregate the columnar amounts presented by fund type and account group and are presented only to facilitate financial analysis. Data in these columns do not present financial position or results of operations in conformity with generally accepted accounting principles; neither is such data comparable to a consolidation. Interfund eliminations have not been made in the aggregation of this data. NOTE 2. 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 Securityfor 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 Trust Fund administered by the State Board of Administration. The investments follow the investment rules defined in Florida Statutes Chapter 215. 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. VILLAGE OF KEY BISCAYNE, FLORIDA NOTES TO GENERAL PURPOSE FTNANCIAL STATEMENTS (Continued) NOTE 2. DEPOSITS AND INVESTMENTS (Continued) Investments (Continued) 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. 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 is not a registrant with the Securities sand Exchange Commission (SEC); however, the Board has adopted operating procedures consistent with the requirements for a 2a-7 fund. At September 30, 2000, the Village's investment balances, which are carried at fair value, were classified as credit risk category 1; insured or registered, or securities held by the entity or its agent in the entity's name, were as follows: Category 1 Repurchase agreements $3,122,688 Bonds 382,969 Common stocks 807,056 4,312,713 Investments not subject to categorization: Mutual funds 114,995 State Board of Administration investment pool 2,795,410 $7,223118 A reconciliation of cash and investments as shown on the combined balance sheet is as follows: Carrying amount of deposits $ 9,685,869 Carrying amount of investments 7,223,118 $16,908,987 Cash and cash equivalents $ 6,394,932 Investments 10,514,055 $16.908,987 NOTE 3. 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. 1 G VILLAGE OF KEY BISCAYNE, FLORIDA NOTES TO GENERAL PURPOSE FINANCIAL STATEMENTS (Continued) NOTE 3. PROPERTY TAXES (Continued) 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, 2000, there were no significant delinquent taxes. NOTE 4. FIXED ASSETS The following is a summary of changes in general fixed assets: Balance September 30, 1999 Additions Balance September 30, Deletions 2000 Land $13,240,657 $3,331,216 $ - $16,571,873 Buildings 730,717 -- 730,717 Improvements other than buildings 2,957,733 992,020 - 3,949,753 Equipment 2,702,361 268,131 - 2,970,492 Furniture and fixtures 128,272 5,947 - 134,219 Construction in progress 189,545 604,470 - 794,015 Total $19.949,285 $5,201,784 $ - $25,151.069 Depreciation is not required and has not been provided on general fixed assets. The following is a summary of proprietary fund type fixed assets: Balance September 30, 1999 Additions Balance September 30, Deletions 2000 Stormwater utility system $10,056,660 $ -$ - $10,056,660 Construction in progress 353,249 20,000 - 373,249 10,409,909 20,000 - 10,429,909 Less accumulated depreciation 539,458 273,919 - 813,377 $__9 870.451 $ 253 919 $ - $ 9 616,532 VILLAGE OF KEY BISCAYNE, FLORIDA NOTES TO GENERAL PURPOSE FINANCIAL STATEMENTS (Continued) NOTE 5. LONG-TERM DEBT The following is a summary of changes in general long-term debt account group: Balance September 30, 1999 Additions Payments Balance September 30, 2000 Revenue bonds payable $15,090,000 $ -$935,000 $14,155,000 Compensated absences payable 1,048,654 86,770 -1,135,424 Rebatable arbitrage -97,165 -97,165 $16,138,654 $1935 $935,000 $15387,589 Revenue Bonds Land Acquisition Revenue Bonds During the fiscal year ended September 30, 1994, the Village issued land acquisition revenue bonds of $9,200,000, the proceeds of which were used for the acquisition of the Village Green property. The Village has pledged public service tax revenues to secure payment of the principal and interest on the bonds. The bonds are due in annual principal installments ranging from $975,000 in fiscal year 2001 to $1,105,000 in fiscal year 2004. Interest accrues at 4.36% per annum. Debt service requirements to maturity are as follows: Principal Interest Total Fiscal year ending September 30: 2001 $ 975,000 $159,903 $1,134,903 2002 1,015,000 116,521 1,131,521 2003 1,060,000 71,286 1,131,286 2004 1,105,000 24,089 1,129,089 $415 $371,799 $4,526,799 Land Acquisition and Capital Improvement Revenue Bonds During the fiscal year ended September 30, 1999, the Village issued land acquisition and capital improvement revenue bonds of $10,000,000, the proceeds of which were used for the acquisition of property and financing of the construction of the Civic Center project. 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 ranging from $355,000 in fiscal year 2003 to $815,000 in fiscal year 2020. Interest accrues at 4.715% per annum. VILLAGE OF KEY BISCAYNE, FLORIDA NOTES TO GENERAL PURPOSE FINANCIAL STATEMENTS (Continued) NOTE 5. LONG-TERM DEBT (Continued) Revenue Bonds (Continued) Land Acquisition and Capital Improvement Revenue Bonds (Continued) Debt service requirements to maturity are as follows: Principal Interest Total Fiscal year ending September 30: 2001 $ -$ 471,500 $ 471,500 2002 -471,500 471,500 2003 355,000 463,131 818,131 2004 375,000 445,921 820,921 2005 390,000 427,886 817,886 2006-2020 8,880,000 3,523,676 12,403,676 $10,000,000 $5103,614 $15,803,614 Stormwater Utility Revenue Bonds During the fiscal year ended September 30, 1999, the Village issued stormwater utility revenue bonds of $7,200,000, the proceeds of which were used to pay the principal of the $7,200,000 Bond Anticipation Notes, Series 1995. 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 I", ranging from $125,000 in fiscal year 2001 to $595,000 in fiscal year 2020. However, the payment due on October 1, 2000 of $125,000 was paid on September 30, 2000. Interest accrues at 4.13% per annum. Debt service requirements to maturity are as follows: Principal Interest Total Fiscal year ending September 30: 2001 $ - $ 218,239 $ 218,239 2002 130,000 286,622 416,622 2003 185,000 281,253 466,253 2004 195,000 273,612 468,612 2005 205,000 265,559 470,559 2006-2020 6,225,000 2,366,077 8,591,077 $6,940,000 $3,691,362 $10,631,362 Revolving Loan During the fiscal year ended September 30, 1998, the Village obtained financing for the planning and engineering of the proposed sanitary sewer construction project under a State Revolving Fund Loan. A loan agreement in the amount of $865,818, including capitalized interest and prepaid loan fees, was entered into in June 1996, but the proceeds were received in fiscal year 1998. The loan is payable in semi-annual payments over 20 years beginning on the earlier of the commencement of the construction project or February 15, 2003 at an interest rate of 2.56% per annum. Therefore, annual debt service payments have not yet been determined. 1 4 VILLAGE OF KEY BISCAYNE, FLORIDA NOTES TO GENERAL PURPOSE FINANCIAL STATEMENTS (Continued) NOTE 5. LONG-TERM DEBT (Continued) Revolving Loan: (Continued) In November 1999, the Village was awarded an additional $6,798,000 under the State Revolving Fund Loan which has not yet been disbursed to the Village. NOTE 6. COMMITMENTS AND CONTINGENCIES Commitments The Village was obligated under a non-cancelable operating lease for office space until October 1, 1998. Subsequent to October 1, 1998, the Village leases their office space on a month-to-month basis. Rent expense was approximately $97,000 for the fiscal year 2000. Construction Commitments The Village issued land acquisition and capital improvement revenue bonds totaling $10,000,000 in fiscal year 1999 for the acquisition of the property and construction of the Village Civic Center. During the year, the Civic Center project incurred expenditures for the acquisition of land of approximately $3,300,000. Approximately $6,700,000 will be expended on the Civic Center and various other construction projects for street repairs and maintenance and Village beautification. 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. Grant Contingency Federal and State programs in which the Village participates were audited in accordance with the provision of regulatory requirements and grantor agencies. Pursuant to those provisions, certain programs were tested for compliance with applicable grant requirements. While no matters of noncompliance were disclosed by the audit, government agencies may subject grant programs to additional compliance tests that may result in disallowed costs. 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. VILLAGE OF KEY BISCAYNE, FLORIDA NOTES TO GENERAL PURPOSE FINANCIAL STATEMENTS (Continued) NOTE 7. RESERVED/DESIGNATED FUND BALANCES As of September 30, 2000, fund balances in the governmental funds have been reserved or designated for the following purposes: Reserved Fund Balances General fund: Special disaster relief $ 100,000 Recreation facilities 99,860 Law enforcement 344,512 Community center 30,100 Beach park and walk 572,738 Compensated absences 503,617 Subsequent year's budget 204,000 Emergencies 2,000,000 $_ 3.854,827 Capital project funds: ital improvementsCa $10,199,223p Pension Trust Fund: ees pension benefitsloEm $ 1,433,779yp Designated Fund Balances General fund: Inspector fees $ 275,000 Police/fire equipment and building 40,000 $ 315.000 NOTE 8. SEGMENT INFORMATION FOR ENTERPRISE FUNDS The City maintains three enterprise funds the purpose of which is to account for stormwater, solid waste and sanitary sewer construction services. Selected financial data for the individual funds are presented below: Stormwater Utili Solid Waste Utili Sanitary Sewer Construction Total Operating revenues $ 494,955 $ 286,522 $ - $ 781,477 Depreciation 273,919 -- 273,919 Operating income (loss)187,583 (19,430)(6,190) 161,963 Interest expense 292,798 -- 292,798 Net income (loss)(45,187)(13,828)12,374 (46,641) Fixed assets additions --20,000 20,000 Net working capital 1,098,124 100,848 321,518 1,520,490 Total assets 10,343,012 136,615 881,090 11,360,717 Bonds payable/loans payable 6,940,000 -865,818 7,805,818 Total equity 3,401,407 100,848 14,967 3,517,222 VILLAGE OF KEY BISCAYNE, FLORIDA NOTES TO GENERAL PURPOSE FINANCIAL STATEMENTS (Continued) NOTE 9. 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 11% and the employees contribute 6%. Under the second plan, which is available only to sworn or cert ified police officers and firefighters, the Village contributes 11% and there is no employee contribution. Beginning October 1, 1997, the police officers and firefighters, which elected to participate in the defined benefit plan (see Note 10), were no longer eligible to contribute to the 401(a) plan. Employer contributions for the fiscal year ended September 30, 2000 were approximately $472,000 while the employee contributions were approximately $134,000. Amendments to the Plan must be authorized by the Village Council. NOTE 10. 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, 1999. The PERS does not issue a separate financial report of the Plan. Under this plan, all full-time police officers and firefighters employed by the Village are eligible for participation. The monthly retirement benefit is equal to 2% 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 best years of 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. At October 1, 1999 (the latest actuarial valuation date), Plan membership consisted of the following: Retirees and beneficiaries currently receiving benefits and terminated employees entitled to benefits but not yet receiving them 3 Current employees: Vested 35 Non-vested 18 Total 53 VILLAGE OF KEY BISCAYNE, FLORIDA NOTES TO GENERAL PURPOSE FINANCIAL STATEMENTS (Continued) NOTE 10. DEFINED BENEFIT PENSION PLAN (Continued) Funding Policy From the effective date of the Plan, October 1, 1997 through September 30, 2000, the contribution by each member of the Plan is 14%. The rate will be adjusted each year thereafter to an amount equal to the total 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 minimum member contribution rate is 8%. The Plan is designed to limit the Village's exposure to contribute to the Plan. Annual Pension Cost and Net Pension Asset The annual pension cost and net pension asset as of October 1, 1999 was as follows: Annual required contribution $ 1,497 Interest on net pension asset - Adjustment to annual required contribution - Annual pension cost 1,497 Contributions made 32,525 Increase in net pension asset 31,028 Net pension asset, beginning of year - Net pension asset, end of year S31,=028 The annual required contribution for the current year was determined as part of the October 1, 1999 actuarial valuation using the aggregate actuarial cost method. This method does not identify and separately amortize unfunded actuarial liabilities. When a plan uses the aggregate actuarial cost method, a schedule of funding progress is not required to be presented. The actuarial assumptions included (a) 9% investment rate of return (net of investment related expenses) and (b) projected salary increases ranging from 6% per year. Both (a) and (b) included an inflation component of 4%. The assumptions did not include post-retirement benefit increases. The actuarial value of assets was determined using the difference between actual and expected return recognized over five years. Trend Information Fiscal Year Annual Pension Percentage of Net Pension Ended Cost APC APC Contributed Asset 9/30/98 $ -N/A $ - 9/30/99 1,497 100%+31,028 REQUIRED SUPPLEMENTARY INFORMATION VILLAGE OF KEY BISCAYNE, FLORIDA REQUIRED SUPPLEMENTARY INFORMATION PENSION TRUST FUND SCHEDULE OF EMPLOYER CONTRIBUTIONS Year Annual Ended Required Actual Percentage September 30. Contribution Contribution Contributed 1998 1999 2000 1,497 $ 32,525 100%+ 60,949 100%+ 110,700 100%+ The information presented in the required supplemental schedule was determined as part of the actuarial valuation at the date indicated. Additional information as of the latest actuarial valuation follows. Valuation date 10/1/99 Actuarial cost method Aggregate actuarial cost method Amortization method N/A Remaining amortization period N/A Asset valuation method Market value Actuarial assumptions: Investment rate of return* 9% per year compounded annually, net of investment related expenses Projected salary increases* 6% Cost of living adjustments N/A *Includes inflation at 4% COMBINING, INDIVIDUAL FUND AND ACCOUNT GROUP STATEMENTS AND SCHEDULES GENERAL FUND The general fund is the principal operating fund of the Village and is used to account for resources traditionally associated with governments, which are not required to be accounted for in another fund. VILLAGE OF KEY BISCAYNE, FLORIDA GENERAL FUND COMPARATIVE BALANCE SHEETS SEPTEMBER 30, 2000 (WITH COMPARATIVE TOTALS FOR SEPTEMBER 30, 1999) 2000 1999 ASSETS Cash and cash equivalents $ 3,208,836 $ 1,836,469 Investments 884,890 2,105,664 Due from other funds 83,978 198,216 Property taxes receivable 19,241 55,299 Accounts receivable 385,899 359,322 Total assets $ 4,582,844 $ 4,554,970 LIABILITIES AND FUND BALANCES Liabilities: Accounts payable and accrued liabilities $ 366,563 $ 308,138 Deposits and performance bonds 46,454 5,915 Due to other funds -120,576 Total liabilities 413,017 434,629 Fund balances: Reserved for: Special relief disaster 100,000 100,000 Recreation facilities 99,860 99,860 Law enforcement 344,512 262,352 Community center 30,100 30,100 Beach park and walk 572,738 572,738 Compensated absences 503,617 565,586 Subsequent year's budget 204,000 440,000 Emergencies 2,000,000 1,500,000 Supplemental fire aid -125,000 Beach improvements -24,600 3,854,827 3,720,236 Unreserved: Designated for: Police/fire equipment and building 40,000 40,000 Inspector fees 275,000 275,000 Community grants, maintenance and improvements -51,000 Professional fees 34,105 315,000 400,105 Total fund balances 4,169,827 4,120,341 Total liabilities and fund balances $ 4,582,844 $ 4,554,970 VILLAGE OF KEY BISCAYNE, FLORIDA GENERAL FUND SCHEDULE OF REVENUES AND EXPENDITURES - BUDGET AND ACTUAL FISCAL YEAR ENDED SEPTEMBER 30, 2000 uB dget Budgetary Basis Actual Variance Favorable (Unfavorable) Revenues: Property taxes $ 7,677,766 $ 7,799,633 $ 121,867 Utility taxes 1,700,000 1,723,902 23,902 Franchise fees 843,425 729,998 (113,427) Intergovernmental: State shared revenue 900,000 889,704 (10,296) Licenses and permits: Occupational licenses 38,304 57,605 19,301 Building permits 493,000 1,259,036 766,036 531,304 1,316,641 785,337 Charges for services 103,020 224,177 121,157 Interest 494,600 315,959 (178,641) Grants 118,750 124,375 5,625 Total revenue $ 12,368,865 $ 13,124,389 $ 755,524 (Continued) V ILLAGE OF KEY BISCAYNE, FLORIDA GENERAL FUND SCHEDULE OF REVENUES AND EXPENDITURES - BUDGET AND ACTUAL (Continued) FISCAL YEAR ENDED SEPTEMBER 30, 2000 Budget Budgetary Basis Actual Variance Favorable (Unfavorable) Expenditures: General government: Elected officials $ 26,500 $ 21,866 $ 4,634 Administration 695,075 727,305 (32,230) Village attorney 213,000 201,539 11,461 Total general government 934,575 950,710 (16,135) Public works 588,739 712,892 (124,153) Building, planning and zoning 1,232,662 1,233,476 (814) Parks and recreation 399,000 398,068 932 Public safety 6,261,217 6,296,461 (35,244) Non-departmental 854,046 716,529 137,517 Debt service: Principal 935,000 935,000 - Interest 603,626 595,767 7,859 1,538,626 1,530,767 7,859 Total expenditures $ 11,808,865 $ 11,838,903 $ (30,038) CAPITAL PROJECTS FUNDS Capital Projects funds are used to account for the acquisition or construction of major capital projects not being financed by proprietary funds. ^ Capital Improvement Fund - The capital improvement fund accounts for the acquisition or construction of various major capital projects. ^ Civic Center Fund - The civic center fund was established to account for the construction of the Village civic center, which will include administrative offices, fire and police facilities, and a Village community center. VILLAGE OF KEY BISCAYNE, FLORIDA CAPITAL PROJECTS FUNDS COMBINING BALANCE SHEETS SEPTEMBER 30, 2000 (WITH COMPARATIVE TOTALS FOR SEPTEMBER 30, 1999) Capital Improvement Civic nter Totals 2000 1999 ASSETS Cash and cash equivalents $ 104,594 $ 1,645,721 $ 1,750,315 $ 2,361,021 Investments 3,173,261 5,150,884 8,324,145 11,100,771 Due from other funds ---120,576 Receivables 90,862 279,906 370,768 88,000 Total assets $ 3,368,717 $ 7,076,511 $ 10,445,228 $ 13,670,368 LIABILITIES AND FUND BALANCES Liabilities: Accounts payable and accrued liabilities $ 138,057 $ 57,458 $ 195,515 $ 190,255 Retainage payable ---33,543 Due to other funds 50,490 -50,490 198,216 Total liabilities 188,547 57,458 246,005 422,014 Fund balance: Reserved for capital improvements 3,180,170 7,019,053 10,199,223 13,248,354 Total liabilities and fund balances $ 3,368,717 $ 7,076,511 $ 10,445,228 $ 13,670,368 VILLAGE OF KEY BISCAYNE, FLORIDA CAPITAL PROJECTS FUNDS COMBINING STATEMENT OF REVENUES, EXPENDITURES AND CHANGES IN FUND BALANCES FISCAL YEAR ENDED SEPTEMBER 30, 2000 (WITH COMPARATIVE TOTALS FOR FISCAL YEAR ENDED SEPTEMBER 30, 1999) Capital Civic Totals Improvement enter 2000 199 Revenues: Interest $ 266,361 $ 583,601 $ 849,962 $ 292,385 Other ---293,576 Total revenues 266,361 583,601 849,962 585,961 Expenditures: Capital outlay 1,326,209 3,572,884 4,899,093 2,489,475 Total expenditures 1,326,209 3,572,884 4,899,093 2,489,475 Deficiency of revenues over expenditures (1,059,848)(2,989,283)(4,049,131)(1,903,514) Other financing sources: Operating transfers in 1,000,000 -1,000,000 1,017,430 Bond proceeds ---10,000,000 Total other financing sources 1,000,000 -1,000,000 11,017,430 Excess (deficiency) of revenues and other financing sources over expenditures (59,848)(2,989,283)(3,049,131)9,113,916 Fund balances, beginning 3,240,018 10,008,336 13,248,354 4,134,438 Fund balances, ending $ 3,180,170 $ 7,019,053 $ 10,199,223 $ 13,248,354 10 ENTERPRISE FUNDS Enterprise funds are used to account for operations that are financed and operated in a manner similar to private business enterprises where the intent is that the costs of providing goods or services be financed or recovered primarily through user charges. ^ Stormwater Utility System Fund - The stormwater utility system accounts for the construction and maintenance of the stormwater system. ^ Solid Waste Fund - The solid waste fund provides collection service for trash removal. Solid waste expenses are primarily for curbside collections. ^ Sanitary Sewer Construction Fund - The sanitary sewer construction fund accounts for the development and construction of a sanitary sewer system to the unsewered areas of the community. VILLAGE OF KEY BISCAYNE, FLORIDA ENTERPRISE FUNDS COMBINING BALANCE SHEETS SEPTEMBER 30, 2000 (WITH COMPARATIVE TOTALS FOR SEPTEMBER 30, 1999) Stormwater Sanitary Utility Solid Sewer Totals System Waste Construction 2M 1999 ASSETS Current assets: Cash and cash equivalents $ 1,000,329 $ 113,268 $ 321,823 $ 1,435,420 $ 1,554,492 Accounts receivable, net 99,400 23,347 -122,747 112,650 Total current assets 1,099,729 136,615 321,823 1,558,167 1,667,142 Fixed assets, net 9,243,283 -373,249 9,616,532 9,870,451 Capitalized loan fees and interest --186,018 186,018 43,962 Total assets $ 10,343,012 $ 136,615 $ 881,090 $ 11,360,717 $ 11,581,555 LIABILITIES AND FUND EQUITY Current liabilities: Accounts payable and accrued liabilities $ 1,605 $ 2,279 $ 305 $ 4,189 $ 82,180 Retainage payable ----11,750 Due to other funds -33,488 -33,488 - Current portion of revenue bonds payable ----135,000 Total current liabilities 1,605 35,767 305 37,677 228,930 Long-term debt: Revolving loan --865,818 865,818 723,762 Revenue bonds payable 6,940,000 --6,940,000 7,065,000 Total liabilities 6,941,605 35,767 866,123 7,843,495 8,017,692 Fund equity: Contributed capital 2,682,901 --2,682,901 2,682,901 Retained earnings 718,506 100,848 14,967 834,321 880,962 Total fund equity 3,401,407 100,848 14,967 3,517,222 3,563,863 Total liabilities and fund equity $ 10,343,012 $ 136,615 $ 881,090 $ 11,360,717 $ 11,581,555 VILLAGE OF KEY BISCAYNE, FLORIDA ENTERPRISE FUNDS COMBINING STATEMENTS OF REVENUES, EXPENSES AND CHANGES IN RETAINED EARNINGS FISCAL YEAR ENDED SEPTEMBER 30, 2000 (WITH COMPARATIVE TOTALS FOR FISCAL YEAR ENDED SEPTEMBER 30, 1999) Stormwater Utility Solid Sanitary Sewer Totals System Waste Construction 22000 1999 Operating revenue $ 494,955 $ 286,522 $ - $ 781,477 $ 750,040 Operating expenses: General and administrative costs 33,453 305,952 6,190 345,595 298,769 Depreciation 273,919 --273,919 269,729 Total operating expenses 307,372 305,952 6,190 619,514 568,498 Operating income (loss)187,583 (19,430)(6,190)161,963 181,542 Non-operating revenues (expense): Interest income 60,028 5,602 18,564 84,194 63,160 Interest expense (292,798)--(292,798)(301,499) Total non-operating revenues (expenses)(232,770)5,602 18,564 (208,604)(238,339) Net income (loss)(45,187)(13,828)12,374 (46,641)(56,797) Retained earnings, beginning 763,693 114,676 2,593 880,962 937,759 Retained earnings, ending $ 718,506 $ 100,848 $ 14,967 $ 834,321 $ 880,962 VILLAGE OF KEY BISCAYNE, FLORIDA ENTERPRISE FUNDS COMBINING STATEMENTS OF CASH FLOWS FISCAL YEAR ENDED SEPTEMBER 30, 2000 (WITH COMPARATIVE TOTALS FOR FISCAL YEAR ENDED SEPTEMBER 30, 1999) Stormwater Sanitary Utility System Solid Waste Sewer Construction Totals 2000 1999 Cash flows from operating activities: Operating income (loss)S 187,583 $ (19,430)$ (6,190) S 161,963 $ 181,542 Adjustments to reconcile operating income (loss) to net cash provided (used) by operating activities: Depreciation 273,919 273,919 269,729 Change in operating assets and liabilities: (Increase) decrease in: Accounts receivable (4,884)(5,213)-(10,097)517,902 Interest receivable (142,056)(142,056)- Due from other governments 8,562 Increase (decrease) in: Accounts payable (80,575)2,279 305 (77,991)(182,491) Retainage payable (11,750)-(11,750)- Due to other funds 33,488 -33,488 (470,237) Total adjustments 176,710 30,554 (141,751)65,513 143,465 Net cash provided (used) by operating activities 364,293 11,124 (147,941)227,476 325,007 Cash flows from capital and relating financing activities: Payments for construction in progress (20,000)(20,000)(279,762) Proceeds from revenue bonds -7,200,000 Retirement of bond anticipation notes --(7,200,000) Principal payment for revenue bonds (260,000)(260,000)- Net proceeds from revolving loan 142,056 142,056 Interest paid (292,798)-(292,798)(301,499) Net cash provided (used) by capital and related financing activities (552,798)122,056 (430,742)(581,261) Cash flows from investing activities: Interest received 60,028 5,602 18,564 84,194 63,160 Net increase (decrease) in cash and cash equivalents (128,477)16,726 (7,321)(119,072)(193,094) Cash and cash equivalents, beginning 1,128,806 96,542 329,144 1,554,492 1,747,586 Cash and cash equivalents, ending $ 1,000,329 $ 113,268 S 321,823 $ 1,435,420 S 1,554,492 GENERAL FIXED ASSETS ACCOUNT GROUP To account for fixed assets not accounted for in proprietary fund operations. VILLAGE OF KEY BISCAYNE, FLORIDA SCHEDULE OF GENERAL FIXED ASSETS BY SOURCE SEPTEMBER 30, 2000 (WITH COMPARATIVE TOTALS FOR SEPTEMBER 30, 1999) 2000 1999 General fixed assets: Land $ 16,571,873 $ 13,240,657 Buildings 730,717 730,717 Improvements other than buildings 3,949,753 2,957,733 Equipment 2,970,492 2,702,361 Furniture and fixtures 134,219 128,272 Construction in progress 794,015 189,545 Total general fixed assets $ 25,151,069 $ 19,949,285 Investment in general fixed assets by source: General fund $ 13,733,888 $ 13,459,810 Capital project funds 7,417,181 2,489,475 Donations 4,000,000 4,000,000 Total investment in general fixed assets $ 25,151,069 $ 19,949,285 z~ VILLAGE OF KEY BISCAYNE, FLORIDA SCHEDULE OF GENERAL FIXED ASSETS BY FUNCTION AND ACTIVITY SEPTEMBER 30, 2000 Land Building Improvements Other Than Buildingg Equipment Furniture and Fixtures Construction in Progress Total General government $ 4,000,000 S -S 2,661,153 S 316,006 S 76,365 S 794,015 S 7,847,539 Parks and recreation 9,240,657 143,641 1,267,427 154,842 8,207 10,814,774 Public safety 3,331,216 587,076 21,173 2,499,644 49,647 6,488,756 S 16,571,873 S 730,717 S 3,949,753 S 2,970,492 S 134,219 S 794,015 S 25,151,069 VILLAGE OF KEY BISCAYNE, FLORIDA SCHEDULE OF CHANGES IN GENERAL FIXED ASSETS BY FUNCTION AND ACTIVITY FISCAL YEAR ENDED SEPTEMBER 30, 2000 Balance September 30, 1999 Balance September 30, Additions Deletions 2000 General government $ 6,547,756 $ 1,299,783 $ - $ 7,847,539 Parks and recreation 10,472,302 342,472 - 10,814,774 Public safety 2,929,227 3,559,529 - 6,488,756 $ 19,949,285 $ 5,201,784 $ - $ 25,151,069 GENERAL LONG-TERM DEBT ACCOUNT GROUP To account for the Village's unmatured principal and long-term portion of compensated absences. VILLAGE OF KEY BISCAYNE, FLORIDA SCHEDULE OF GENERAL LONG-TERM DEBT SEPTEMBER 30, 2000 (WITH COMPARATIVE TOTALS FOR SEPTEMBER 30, 1999) 2000 1999 Amount to be provided for retirement of general long-term debt $ 15,387,589 $ 16,138,654 General long-term debt payable: Rebatable arbitrage $ 97,165 $ - Compensated absences payable 1,135,424 1,048,654 Revenue bonds payable 14,155,000 15,090,000 Total general long-term debt payable $ 15,387,589 $ 16,138,654 STATISTICAL SECTION VILLAGE OF KEY BISCAYNE, FLORIDA GENERAL GOVERNMENTAL EXPENDITURES BY FUNCTION Fiscal Year General Government Public Safe Parks and Recreation Public Works Total 1992 $ 1,468,000 $ 13,511 $ 11,779 $ 86,580 $ 1,579,870 1993 2,848,857 2,790,379 240,794 185,257 6,065,287 1994 4,126,094 (2)4,453,539 9,601,922 782,001 18,963,556 1995 5,524,305 121 4,294,606 211,159 573,844 10,603,914 1996 3,124,384 121 4,634,385 234,154 753,823 8,746,746 1997 3,577,170 121 5,017,882 239,029 660,780 9,494,861 1998 3,671,970 121 5,278,315 255,704 828,287 10,034,276 1999 4,173,995 121 5,644,903 293,664 730,521 10,843,083 2000 4,795,894 "'6,068,147 380,502 830,360 12,074,903 (1) Includes acquisition of land for $9,238,317 for the Village Green. (2) General government includes economic development, building, zoning and planning, debt service, capital outlay and non-departmental expenditures. Notes: The Village's first year of operation was fiscal year 1992. Includes general fund only (GAAP basis). VILLAGE OF KEY BISCAYNE, FLORIDA GENERAL GOVERNMENTAL REVENUES BY SOURCE Licenses Fiscal Property and Inter- Utility Franchise Year Taxes Permits Governmental Taxes Em Other Interest Total 1992 S - 1993 3,536,480 1994 6,640,045 1995 6,820,807 1996 6,486,019 1997 6,495,465 1998 6,963,900 1999 7,012,714 2000 7,799,633 S 15,766 S 934,018 S 979,236 S 151,392 S 23,276 S 4,480 S 2,108,168 1,458,733 2,485,979 1,212,084 625,815 169,429 121,676 9,610,196 629,246 997,501 1,268,428 668,020 115,664 288,978 10,607,882 351,152 788,062 1,257,179 652,844 665,086 369,540 10,904,670 430,208 791,403 1,294,486 638,096 1,495,521 280,570 11,416,303 531,401 766,638 1,555,812 667,815 463,171 248,646 10,728,948 1,003,768 843,812 1,514,697 709,067 392,975 233,654 11,661,873 668,672 807,924 1,621,473 740,031 1,295,001 231,820 12,377,635 1,316,641 889,704 1,723,902 729,998 348,552 315,959 13,124,389 (1) Includes charges for services, grants and other. Notes: The Village's first year of operation was fiscal year 1992. Includes general fund only (GAAP basis). VILLAGE OF KEY BISCAYNE, FLORIDA UTILITY TAX REVENUE BY SOURCE Fiscal Telecom- Fuel Year Electricity munications as Oil Water Total 1992 $ 676,919 $ 157,887 $ 35,552 $ 3,548 $ 105,830 $ 979,736 1993 857,002 199,308 24,184 4,708 126,882 1,212,084 1994 888,752 202,702 26,925 4,331 145,719 1,268,429 1995 875,704 186,780 38,130 3,920 152,645 1,257,179 1996 888,651 199,746 37,034 3,885 165,169 1,294,485 1997 1,032,445 274,768 42,066 3,616 202,918 1,555,813 1998 989,535 288,581 36,427 3,883 196,271 1,514,697 1999 992,319 380,934 35,121 4,262 208,837 1,621,473 2000 1,000,553 454,101 52,016 2,169 215,063 1,723,902 FRANCHISE FEE REVENUE BY SOURCE Fiscal Cable Year Electricity Television Telephone Total 1992 $ 112,658 $ 38,734 $ -$ 151,392 1993 570,605 39,821 15,389 625,815 1994 603,638 43,877 20,505 668,020 1995 589,031 43,899 19,914 652,844 1996 571,093 46,824 20,179 638,096 1997 578,195 62,342 27,277 667,814 1998 631,323 53,728 24,016 709,067 1999 653,799 56,997 29,235 740,031 2000 646,000 59,548 24,450 729,998 VILLAGE OF KEY BISCAYNE, FLORIDA PROPERTY TAX LEVIES AND COLLECTIONS Tax Year"' Fiscal Year Assessed Value Tax Leyy Total Collected 2) Percent Collected 1992 1993 $ 1,617,141,088 $ 3,687,082 $ 3,536,480 95.9% 1993 1994 1,560,057,130 6,925,094 6,640,045 95.9 1994 1995 1,741,921,584 7,143,620 6,820,807 95.5 1995 1996 1,767,457,005 6,716,337 6,418,864 95.6 1996 1997 1,861,243,132 6,711,642 6,495,465 96.8 1997 1998 2,003,049,232 7,222,995 6,948,521 96.2 1998 1999 2,028,174,208 7,313,596 7,012,714 95.9 1999 2000 2,232,457,904 8,050,243 7,799,633 96.9 (1) Assessments as of January 1 of the year listed; bills mailed in October of that year; taxes become delinquent at the end of April of the subsequent year. Initial property tax levy by the Village October, 1992. (2) Collections reflect timely payment discounts of up to 4% and other adjustments. 10 VILLAGE OF KEY BISCAYNE, FLORIDA ASSESSED AND ESTIMATED ACTUAL VALUE OF TAXABLE PROPERTY Tax Year Real Pr e Personal Pr e Net Assessed Property Value 1992 $ 1,601,826,518 $ 15,314,570 $ 1,617,141,088 1993 1,543,711,468 16,345,662 1,560,057,130 1994 1,715,626,471 26,295,113 1,741,921,584 1995 1,744,363,535 23,093,470 1,767,45 7,005 1996 1,837,939,078 23,304,054 1,861,243,132 1997 1,978,219,125 24,830,107 2,003,049,232 1998 2,004,007,700 24,166,508 2,028,174,208 1999 2,205,371,189 27,086,715 2,232,457,904 2000 2,470,115,075 28,934,086 2,499,049,161 Source: Miami-Dade County Property Appraiser's Office Note: Assessed values equal the estimated actual value. AA VILLAGE OF KEY BISCAYNE, FLORIDA PROPERTY TAX RATES DIRECT AND OVERLAPPING GOVERNMENTS Village of Key Biscayne Miami-Dade County State School District Fiscal Year Village Operating Mil a e illa a Debt Service Milaee Total County iM llagg SFWMD FIND Millaize MillaQe Total State lla a Operating Millaee Debt Service Millaee Total School lla e the Total 1992 2.280 7.305 1.139 8.444 0.547 0.052 0.599 9.023 0.505 9.528 3.445 24.296 1993 4.439 7.305 0.830 8.135 0.597 0.052 0.649 9.283 0.640 9.923 1.101(1)24.247 1994 4.101 7.253 0.817 8.070 0.497 0.049 0.546 9.503 0.842 10.345 0.443 23.505 1995 3.800 6.828 0.789 7.617 0.547 0.040 0.587 9.373 1.016 10.389 0.429 22.822 1996 3.606 6.469 0.774 7.243 0.572 0.038 0.610 9.356 1.010 10.366 0.439 22.264 1997 3.606 6.023 0.929 6.952 0.597 0.050 0.647 9.356 1.106 10.462 0.416 22.083 1998 3.606 6.023 0.837 6.860 0.597 0.047 0.644 9.182 0.978 10.160 0.434 21.704 1999 3.606 5.809 0.816 6.625 0.597 0.044 0.641 8.654 0.990 9.644 0.421 20.937 2000 3.606 5.751 0.652 6.403 0.597 0.041 0.638 8.702 0.915 9.617 0.451 20.715 (1) Village established its own fire district effective October 1, 1993 Source: Miami-Dade County Property Appraiser's Office -41- VILLAGE OF KEY BISCAYNE, FLORIDA RATIO OF ANNUAL DEBT SERVICE EXPENDITURES FOR NET BONDED DEBT TO GENERAL GOVERNMENTAL EXPENDITURES Fiscal Year Principal Interest (1) Total Debt Service 2 Total General Governmental Expenditures Ratio of Debt Service to General Governmental Ex endituresp 1994 $ -$ 194,989 $ 194,989 $ 19,053,562 1.0% 1995 755,000 384,661 1,139,661 10,603,914 10.7 1996 785,000 351,089 1,136,089 10,610,366 10.7 1997 820,000 315,901 1,135,901 10,836,011 10.5 1998 855,000 277,825 1,132,825 10,034,276 11.3 1999 895,000 241,329 1,136,329 13,332,558 8.5 2000 935,000 595,767 1,530,767 12,028,995 12.7 (1) Excludes bond issuance and other costs (2) Debt service on revenue bonds Includes general fund only VILLAGE OF KEY BISCAYNE, FLORIDA SCHEDULE OF DIRECT AND OVERLAPPING BONDED DEBT GENERAL OBLIGATION BONDS (IN THOUSANDS) SEPTEMBER 30, 2000 Jurisdiction Taxable Property Value 1 Net General Obligation Bonded Debt Outstandine (2) Percentage Applicable to Key Biscayne Amount Applicable to Key Biscayne Village of Key Biscayne $ 2,499,049 $ 21,220 100.00%$ 21,220 Miami-Dade County 97,042,641 328,426 2.58%8,473 Miami-Dade County Schools 97,829,365 945,745 2.55%24,116 $ 1,295,391 $ 53,809 (1) Source: Miami-Dade County Property Appraiser's Office - Taxable Property Value reflects January 1, 2000 amounts (2) Source: Miami-Dade County Finance Department - Net General Obligation Bonded Debt outstanding figures are as of September 30, 2000 . (3) Based on the percentage of the County's and School Board's tax roll valuation comprised of real and personal property situated in the Village of Key Biscayne. VILLAGE OF KEY BISCAYNE, FLORIDA RATIO OF NET BONDED DEBT TO ASSESSED VALUE AND PER CAPITA Fiscal Assessed Net Bonded Ratio of Net Bonded Debt to Assessed Net Bonded Debt Per Year Population Value 1 Debt 2 Value Capita 1994 8,887 S 1,560,057,130 S 9,200,000 0.59%S 1,035 1995 8,894 1,741,921,584 8,445,000 0.48 949 1996 8,886 1,767,457,005 7,660,000 0.43 862 1997 8,937(3)1,861,243,132 6,840,000 0.37 765 1998 9,471(4)2,003,049,232 5,985,000 0.30 632 1999 9,689(5)2,028,174,208 22,290,000 1.1 2,300 2000 9,689(6)2,232,457,904 21,220,000 0.95 2,190 (1) Net bonded assessed actual value of taxable property (2) Net bonded debt represents revenue bonds (3) As of April 1997 - University of Florida Economic and Business Research (4) As of April 1998 - University of Florida Economic and Business Research (5) As of July 1999 - University of Florida Economic and Business Research (6) Same as prior year, number not available until 2000 census is released in April 2001 VILLAGE OF KEY BISCAYNE, FLORIDA DEMOGRAPHICS STATISTICS POPULATION Estimates of Population by Age Under 18 Years 18 to 64 Years 65 Years or Older Year Number Percent Number Percent Number Percent Total 1990 1,646 19 5,684 64 1,524 14 8,854 Estimates of Population by Race Anelo Black Hispanic Total 1990 5,028 36 3,790 8,854 INCOME* Per Capita Income Average Per nglo Black Hispanic Capita 1990 $ 44,615 $ 24,577 $ 28,341 $ 37,629 UNEMPLOYMENT RATES** (Percent) 1224 122 122 122 122$ 1222 2000 Miami-Dade County 7.9 6.8 7.8 7.1 6.7 5.9 5.6 Village of Key Biscayne 3.6 3.1 3.6 3.3 3.1 2.7 2.6 * Source: Bureau of Census, Income Division, 2000 Census Not Available Until April 2001 ** Source: State Department of Labor VILLAGE OF KEY BISCAYNE, FLORIDA PROPERTY VALUE, CONSTRUCTION AND BANK DEPOSITS Residential Commercial (000s Omitted) Fiscal Y= Total Permits Issued # of Permits Valuation # of Pen-nits Valuation Total of Construction County Village Bank Bank Deposits (1) Deposits (2) 1992 35 25 $ 638,483 10 $ 401,058 $ 1,039,541 $ 20,282,998 $ - 1993 1,737 1,633 26,822,424 104 4,383,673 31,206,097 18,146,647 - 1994 2,205 2,081 25,410,312 124 45,567,390 70,977,702 17,524,140 - 1995 2,857 2,568 33,820,503 289 2,099,661 35,920,164 17,938,762 - 1996 3,171 3,060 65,318,655 111 1,231,097 66,549,752 14,561,654 - 1997 3,570 3,402 82,481,700 168 667,328 83,149,028 34,664,829 - 1998 3,002 2,879 129,200,900 106 3,176,031 132,376,931 36,659,805 347,178 1999 2,711 2,416 94,287,095 295 56,792,994 151,080,089 39,633,149 377,060 2000 1,793 1,641 85,244,371 152 9,359,770 94,604,141 38,539,107 364,973 (1) State of Florida, Division of Banking, as of June 30 of each respective year. Information is for Miami-Dade County, which the Village of Key Biscayne is a part of. Information is not available for the Village of Key Biscayne alone. (2) Deposits within Village of Key Biscayne limits. Information for all years presented was not available. Note: Village began operations during fiscal year 1992. VILLAGE OF KEY BISCAYNE, FLORIDA PRINCIPAL TAXPAYERS SEPTEMBER 30, 2000 Taxpaye r Taxable Valuation % of Total Assessed Valuation Sonesta Beach Resort, LP $ 40,447,828 1.81% Grand Bay Tower Associates 26,192,000 1.17% GB Hotel Partners, Ltd.23,341,830 1.05% Key Biscayne Shopping Center 8,672,526 0.39% Galleria of Key Biscayne 7,467,541 0.33% Florida Power and Light Company 6,503,744 0.29% Ocean Club, Inc.5,920,230 0.27% BellSouth 5,917,426 0.26% Pitu, Inc.5,798,964 0.26% Charles G. Rebozo, Trust 5,701,062 0.25% $ 135,963,151 6.08% Source: Miami-Dade County Appraiser's Office VILLAGE OF KEY BISCAYNE, F LORIDA MISCELLANEOUS STATISTICAL DATA SEPTEMBER 30, 2000 Date of Incorporation Form of Government Area Miles of Street Fire Protection: 1991 Council-Manager 1.2 Square Miles 20.2 Linear Miles Number of Stations 1 Police Protection: Number of Stations 1 Education: Attendance Centers 2 Number of Students 1,360 Number of Teachers 92 Miami-Dade County Water & Sewer Authority Number of Customers 1,926 Average Daily Consumption 650,000 gallons Sewers: Number of Customers 969 Fire Hydrants 209 Building Permits Issued 1,955 Recreation and Culture: Number of Parks 3 Number of Libraries 1 (Operated by Miami-Dade County) Number of Tennis Centers 1 Number of Recreational Centers 1 Employees: Full Time 99 COMPLIANCE SECTION RCH Rachlin Cohen & Holtz LLP Certified Public Accountants & Consultants Report of Independent Certified Public Accountants on Compliance and on Internal Control over Financial Reporting Based on an Audit of Financial Statements Performed in Accordance with Government Auditing Standards Honorable Mayor, Village Council and Village Manager Village of Key Biscayne, Florida We have audited the general purpose financial statements of the Village of Key Biscayne, Florida (the Village) as of September 30, 2000 and for the year then ended, and have issued our report dated December 8, 2000. We conducted our audit in accordance with generally accepted auditing standards and the standards applicable to financial audits contained in Government Auditing Standards, issued by the Comptroller General of the United States. Compliance 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 and grants, non-compliance 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 non-compliance that are required to be reported under Government Auditing Standards. Internal Control over Financial Reporting In planning and performing our audit, we considered the Village's internal control over financial reporting in order to determine our auditing procedures for the purpose of expressing our opinion on the financial statements and not to provide assurance on the internal control over financial reporting. Our consideration of the internal control over financial reporting would not necessarily disclose all matters in the internal control over financial reporting that might be material weaknesses. A material weakness is a condition in which the design or operation of one or more of the internal control components does not reduce to a relatively low level the risk that misstatements in amounts that would be material in relation to the financial statements being audited may occur and not be detected within a timely period by employees in the normal course of performing their assigned functions. We noted no matters involving the internal control over financial reporting and its operation that we consider to be material weaknesses. -49- One Southeast Third Avenue, Tenth Floor, Miami, Florida 33131 • Tel 305-377-4228 • Fax 305-377 8331 Offices in Nhami • Ft Lauderdale , Boca Raton • West Palm Beach • Stuart i w % rchcpa com %lember of Summit International A,sociates, Inr m ith ofh,es in pnmpal cities throughout the W orld Honorable Mayor, Village Council and Village Manager Village of Key Biscayne, Florida Page Two However, we noted other matters that we have reported to management in the schedule of findings accompanying this report. This report is intended solely for the information and use of the Mayor, Village Council, management 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. However, this report is a matter of public record and its distribution is not limited. Miami, Florida December 8, 2000 OUR Rachlin Cohen & Holtz LLP Certified Public Accountants & Consultants 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 general purpose financial statements of the Village of Key Biscayne, Florida (the Village) as of and for the year ended September 30, 2000, and have issued our report thereon dated December 8, 2000. We conducted our audit in accordance with generally accepted auditing standards and the standards applicable to financial audits contained in Government Auditing Standards, issued by the Comptroller General of the United States. In connection with our audit of general purpose financial statements of the Village for the year ended September 30, 2000, we report the following in accordance with Chapter 10.550 Rules of the Auditor General, Local Government Entity Audits, which requires that this report specifically address but not be limited to the matters outlined in Rule 10.554(1)(e): 1. No inaccuracies, shortages, defalcations, fraud and violations of laws, rules, regulations and contractual provisions were reported in the preceding annual financial audit. 2. Recommendations made in the preceding annual financial audit have been implemented except as reported in the schedule of findings accompanying this report. 3. The Village, during fiscal year 2000, was not in a state of financial emergency as defined by Florida Statutes 218.503(1). The Village has no deficit fund balances. 4. Recommendations to improve the Village's present financial management and accounting procedures are accompanying this report in the schedule of findings. 5. The Village was in compliance with Section 218.415, Florida Statutes (1999), regarding the investment of public funds. 6. During the course of our audit, nothing came to our attention that caused us to believe that the Village: a. Was in violation of any laws, rules or regulations. b. Made any illegal or improper expenditures. -51- One Southeast Third Avenue, Tenth Floor, Miami, Florida 33131 • Tel 305-377-4228 • Fax 303-377-8331 Offices in Miami • Ft Lauderdale • Boca Raton • west Palm Beach • Stuart wki ~,N rchcpa corn \1cmhui It Iumnvt International \-ouata,, Ins ~%it In oth~e~ in principal atie. throu,hout the ~+orld Honorable Mayor, Village Council and Village Manager Village of Key Biscayne, Florida Page Two c. Had improper or inadequate accounting procedures, other than those noted in the schedule of findings accompany this report. d. Failed to record financial transactions, which could have a material effect on the Village's general purpose financial statements. e. Had other inaccuracies, shortages, defalcations or instances of fraud. 7. The annual financial report for the year ended September 30, 2000 has been filed with the Department of Banking and Finance pursuant to Section 218.32 Florida Statutes and is in agreement with the audited financial statements of the same period. 8. The Village was incorporated by Laws of Florida 90-142. This report is intended solely for the information and use of the Mayor, Village Council, management, 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. However, this report is a matter of public record and its distribution is not limited. Miami, Florida December 8, 2000 VILLAGE OF KEY BISCAYNE, FLORIDA SCHEDULE OF FINDINGS FISCAL YEAR ENDED SEPTEMBER 30, 2000 I. CURRENT YEAR COMMENTS AND RECOMMENDATIONS Other Matters 1. Inactive Bank Accounts At September 30, 2000, the Village maintained bank accounts that have not had any activity in the past few years. Inactive bank accounts can increase the risk and be susceptible to misuse by someone seeking to misappropriate cash. Recommendation We recommend that the Village evaluate the need for the inactive bank accounts and close any account that the Village has no intention of utilizing. Management's Response During the fiscal year 1999-2000, numerous bank accounts and investments were closed and funds consolidated into instruments paying higher rates of return. There were no inactive bank accounts at September 30, 2000. 2. Fixed Asset /Property Records The Village currently does not maintain detailed fixed asset / property records. The Village should maintain detailed property records for all fixed assets, which at a minimum shall include the following: ^ Description, asset number, and location. ^ Acquisition cost and date of acquisition. ^ Assigned life and method of depreciation (will be applicable under GASB Statement No. 34). ^ Depreciation taken on an annual basis with accumulation thereof (will be applicable under GASB Statement No. 34). Detailed property records aid in the accounting for property additions, disposals, substantiate insurance claims for lost or damaged items and provides controls to safeguard the assets. Recommendation The Village needs to create and maintain a detailed fixed asset / property records system and ensure that the general ledger of the Village is adjusted in a timely manner to reflect the activity of the Village's property as it relates to acquisitions and disposals during the year. Safeguarding assets is a primary concern for the Village. Secondarily, the Village will be required to implement GASB Statement No. 34 for the fiscal year ending September 30, 2004. Therefore, some of the detail that is currently not maintained will be required. VILLAGE OF KEY BISCAYNE, FLORIDA SCHEDULE OF FINDINGS (Continued) 1. CURRENT YEAR COMMENTS AND RECOMMENDATIONS (Continued) 2. Fixed Asset/ Property Records (Continued) Management's Response During fiscal year 1999-2000, a detailed physical inventory of all Village fixed assets was undertaken. This project is at present coinciding with the accreditation process of the Police Department. Expected completion is March 15, 2001. 3. New Pronouncement Governmental Accounting Standards Board Statement No. 34, Basic Financial Statements - and Management's Discussion and Analysis -for State and Local Governments, establishes new financial reporting requirements for state and local governments throughout the United States. When implemented, it will create new information and will restructure much of the information that governments have presented in the past. These new requirements were developed to make annual financial reports more comprehensive and easier to understand and use. The new reporting model will include government-wide financial statements, as well as fund financial statements, as well as management's discussion and analysis section. Implementation will be required for the fiscal year ending September 30, 2004. However, many of the reporting requirements need to be addressed several years before the required implementation date. Recommendation We recommend that the Village review the new requirements and plan accordingly. Management's Response The Village is currently reviewing the requirements and initiating a plan. 4. New Florida Investment Law for Public Funds On October 1, 2000, the new Investments of Public Funds Act goes became effective. Senate Bill 372 (the Bill) creates uniform investment policy guidelines, limitations, and conditions for the investment of assets of local retirement plans and of other funds available to units of local government. In addition, the Bill authorizes the Department of Revenue and the Department of Banking and Finance to withhold certain funds from local governments, which fail to meet certain reporting requirements. Section 218.415, Florida Statutes, relating to local government excess funds investment policies is amended. Recommendation: We recommend that the Village and the administration review the new requirements for investment of public funds. 5d VILLAGE OF KEY BISCAYNE, FLORIDA SCHEDULE OF FINDINGS (Continued) 1. CURRENT YEAR COMMENTS AND RECOMMENDATIONS (Continued) 4. New Florida Investment Laiv for Public Funds (Continued) Management's Response The Village is currently reviewing the requirements of the new law. II. PRIOR YEAR RECOMMENDATIONS NOT IMPLEMENTED IN CURRENT YEAR 1. Compensated Absences The recordkeeping function for compensated absences (vacation, sick and compensatory time) is handled by the responsible departments (general employees, police and fire). Each year that we perform our audit procedures on compensated absences, we noted that the Village incurred recordkeeping difficulties. This is primarily caused by the decentralized recordkeeping (i.e., each department maintains their own records and their own format). Additionally, due to the size of the Village, formal approval of leave requests was not always evident. There is a significant liability recorded by the Village for compensated absences, which will continue to increase over the years, therefore, accurate records and procedures are essential to monitor these activities. Recommendation We recommend that the recordkeeping function for compensated absences for all departments be centralized. The Village's policies and procedures to accumulate earned compensated absences should be revised so that centralized recordkeeping can properly control and account for compensated absences. Management's Response and Current Status As a result of all payroll functions transferred to Moyer & Associates on October 15, 2000, the process of recordkeeping of compensated absences has been significantly changed. The individual departments will continue to keep detailed records of time as it is used. This is due to the fact that all time used must be approved by department heads and that certain departments have other legal requirements requiring them to maintain such records. All information and current accruals are at present time shown on each employee's paycheck stub with records centralized at Moyer & Associates. 2. Pension Accounting Effective October 1, 1997, the Village established a defined benefit pension plan for eligible police officers and firefighters. This pension plan is required to be reported by the Village as a pension trust fund in its Comprehensive Annual Financial Report. The recording of transactions, the monthly reconciliation of contributions and other accounting and recordkeeping functions were not maintained during the year. To properly safeguard assets from potential loss or misuse, these procedures should be performed in a timely manner. This matter was reported in the prior year. VILLAGE OF KEY BISCAYNE, FLORIDA SCHEDULE OF FINDINGS (Continued) II. PRIOR YEAR RECOMMENDATIONS NOT IMPLEMENTED IN CURRENT YEAR (Continued) 2. Pension Accounting (Continued) Recommendation We recommend that the Pension Board monitor the financial activities of the plan and ensure that either the Village's finance department or an outside accountant perform the accounting and recording of transactions of the Plan in a timely manner and report the monthly or quarterly results to the Pension Board. Managentent's Response and Current Status Contact has been made between the Finance Department and the Pension Board. Monthly accounting procedures are being put into place. Village of Key Biscayne, Florida I ~ ~ ~ North Miami Y~ e ':Y=y LET] Hall i4 u : 5'W cV7 ° =DADE -COUNTY Jf ~ 'G - n % il( Mi- ""h-ami eacB r ..1!II' ;~' r i f1 4'fC'T ~ JI Biscayne Bay 2 Miles 4 Village Seal Description One of the oldest and most recognizable landmarks in South Florida, the lighthouse was first constructed in 1825. It has a colorful. well-documented history. It stands in the Bill Baggs Cape Florida State Recreation Area. Like all lighthouses, it is a symbol of familiar homecom- ing to sailors, fishermen, and landlubbers alike. It also represents man-made structures of lasting quality, strength and safety in an uncertain world. The coconut palm, threatened by disease in Florida in recent years, has been a popular symbol of peaceful nature for many tropical areas around the world. Key Biscayne was once a plantation for this versatile tree. The two sea birds, against the backdrop of the moon, stand for the animals with whom we share our environment. The sun, sustainer of life, which figures prominently in many municipal emblems around the state, usually depicted at high noon, has just disappeared below the horizon, creating one of those sunsets that occur every once in a while. This kind of mood and feeling evoke a universal human reaction - a powerful visual reminder of the potential beauty and transi- tory nature of all things. The moon is shown on our seal not just to be different from other communities, not only for its magical qualities, but also because we have been told that one of the earliest local Indian dialects contained a word-picture phrase, "Bischiyano," meaning, simply - "Favorite Path of the Rising Moon." Adoption of the Village Seal took place on June 8, 1993 and adoption of the description of the Village Seal took place on August 10, 1993.