HomeMy Public PortalAboutCAFR 2005.pdfCOMPREHENSIVE ANNUAL
FINANCIAL REPORT
FOR THE FISCAL YEAR
ENDED SEPTEMBER 30, 2005
VILLAGE OF KEY BISCAYNE
FLORIDA
MISSION STATEMENT 'TO PROVIDE A SAFE QUALITY COMMUNITY ENVIRONMFNI FOR AIL ISLANDERS THROUGH RESPONSIRIF GOVERNMENT"
VILLAGE OF KEY BISCAYNE, FLORIDA
COMPREHENSIVE ANNUAL FINANCIAL REPORT
FISCAL YEAR ENDED SEPTEMBER 30, 2005
Prepared by
THE FINANCE DEPARTMENT
VILLAGE OF KEY BISCAYNE, FLORIDA
COMPREHENSIVE ANNUAL FINANCIAL REPORT
FISCAL YEAR ENDED SEPTEMBER 30, 2005
TABLE OF CONTENTS
PAGE
I. INTRODUCTORY SECTION
Letter of Transmittal
Village Officials vi
Certificate of Achievement for Excellence in Financial Reporting vii
Organization Chart viii
IL FINANCIAL SECTION
REPORT OF INDEPENDENT CERTIFIED PUBLIC ACCOUNTANTS
MANAGEMENT'S DISCUSSION AND ANALYSIS (Required Supplementary Information)
BASIC FINANCIAL STATEMENTS:
Government -Wide Financial Statements:
Statement of Net Assets
Statement of Activities
1-2
3-10
11
12
Fund Financial Statements:
Governmental Fund Financial Statements:
Balance Sheet 13
Statement of Revenues, Expenditures and Changes in Fund Balances 14
Reconciliation of the Statement of Revenues, Expenditures and Changes in
Fund Balances of Governmental Funds to the Statement of Activities 15
Proprietary Fund Financial Statements:
Statement of Net Assets 16
Statement of Revenues, Expenses and Changes in Net Assets 17
Statement of Cash Flows 18
Fiduciary Fund Financial Statements:
Statement of Fiduciary Net Assets 19
Statement of Changes in Fiduciary Net Assets 20
Notes to Basic Financial Statements 21-42
REQUIRED SUPPLEMENTARY INFORMATION (OTHER THAN MD&A)
Budgetary Comparison Schedule — General Fund 43
Note to Budgetary Comparison Schedule 44
Schedule of Employer Contributions 45
VILLAGE OF KEY BISCAYNE, FLORIDA
TABLE OF CONTENTS
PAGE
III. COMBINING FINANCIAL STATEMENTS
Combining Statement of Net Assets — Nonmajor Proprietary Funds 46
Combining Statement of Revenues. Expenses and Changes in Net Assets —
Nonmajor Proprietary Funds 47
Combining Statement of Cash Flows — Nonmajor Proprietary Funds 48
IV. STATISTICAL SECTION
Government -Wide Information:
Government -Wide Expenses by Function 49
Government -Wide Revenues 50
Fund Information:
General Governmental Expenditures by Function 51
General Governmental Revenues by Source 52
Utility Tax Revenue By Source; Franchise Fee Revenue by Source 53
Property Tax Levies and Collection 54
Assessed and Estimated Actual Value of Taxable Property 55
Property Tax Rates Direct and Overlapping Governments 56
Ratio of Annual Debt Service Expenditures for Net Bonded Debt to
General Governmental Expenditures 57
Schedule of Direct and Overlapping Debt - General Obligation Bonds 58
Ratio of Net Bonded Debt to Assessed Value and Per Capita 59
Revenue Bond Coverage 60
Demographic Statistics 61
Property Value, Construction and Bank Deposits 62
Principal Taxpayers 63
Miscellaneous Statistical Data 64
COMPLIANCE SECTION
Report of Independent Certified Public Accountants on Internal Control over Financial
Reporting and on Compliance and Other Matters Based on an Audit of Financial
Statements Performed in Accordance with Government Auditing Standards
Management Letter in Accordance with the Rules of the Auditor General of the
State of Florida
65-66
67-68
Report of Independent Certified Public Accountants on Compliance and Internal
Control over Compliance Applicable to Each Major Federal Program in Accordance
with OMB Circular A-133 69-70
Schedule of Expenditures of Federal Awards 71
Notes to the Schedule of Expenditures of Federal Awards 72
Summary Schedule of Prior Audit Findings 73
Schedule of Findings and Questioned Costs 74
INTRODUCTORY SECTION
April 14, 2006
Village Council
Robert Oldakowski, Mayor
Robert L Vernon, Vice Mayor
Enrique Garcia
Steve Liedman
Jorge E. Mendia
Thomas Thornton
Patricia Weinman
Village Manager
Jacqueline R Menendez
Office of the Village Manager
To the Honorable Mayor, Members of the Village
Council and Citizens of the Village of Key Biscayne:
The Government Finance Officers Association (GFOA) recommends that all
units of local government publish, within six months of the close of each fiscal
year, a complete set of financial statements presented in conformity with
generally accepted accounting principles (GAAP) in the United States and
audited in accordance with auditing standards generally accepted in the United
States and in accordance with Government Auditing Standards by a firm of
licensed certified public accountants. Pursuant to that recommendation, we
hereby issue the comprehensive annual financial report of the Village of Key
Biscayne for the fiscal year ended September 30, 2005.
This report consists of management's representation concerning the finances of
the Village of Key Biscayne. Consequently, management assumes full
responsibility for the completeness and reliability of all of the information
presented in this report. To provide a reasonable basis for making these
representations, management of the Village of Key Biscayne has established a
comprehensive internal framework that is designed both to protect the Village's
assets from loss, theft, or misuse and to compile sufficient reliable information
for the preparation of the Village of Key Biscayne's financial statements in
conformity with GAAP. Because the cost of internal controls should not
outweigh their benefits, the Village of Key Biscayne's comprehensive
framework of internal controls has been designed to provide reasonable, rather
than absolute, assurance that the financial statements will be free from material
misstatement. As management, we assert that, to the best of our knowledge and
belief, this financial report is complete and reliable in all material respects.
The firm of Rachlin Cohen & Holtz LLP, licensed certified public accountants has
audited the Village of Key Biscayne's financial statements. The goal of the
independent audit was to provide reasonable assurance that the basic financial
statements of the Village of Key Biscayne for the fiscal year ended September 30,
2005 are free of material misstatement The independent audit involved examining,
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88 West McIntyre Street • Suite 210 • Key Biscayne, Florida 33149 • (305) 365-5500 • Fax (305) 365-8936
M1.SI0\ SI A IE MEN I TO PRO\11)1 4 SANE QUAIIT' COMMI NI II EN IRONMENT FOR All 1,1 ANDERS THROUGH RESPONSIBLE GOVFRNMEN1
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on a test basis, evidence supporting the amounts and disclosures in the financial
statements; assessing the accounting principles used and significant estimates made by
management; and evaluating the overall financial statement presentation. The
independent auditor concluded, based upon the audit, that there was a reasonable basis
for rendering an unqualified opinion that the Village of Key Biscayne's financial
statements for the fiscal year ended September 30, 2005, are fairly presented in
conformity with GAAP. The independent auditor's report is presented as the first
component of the financial section of this report.
GAAP requires that management provide a narrative introduction, overview, and analysis
to accompany the basic financial statements in the form of Management's Discussion and
Analysis (MD&A). This letter of transmittal is designed to complement MD&A and
should be read in conjunction with it. The Village of Key Biscayne's MD&A can be
found immediately following the report of the independent certified public accountants.
Profile of the Government
The Village of Key Biscayne, incorporated in 1991, is located on the southern most
barrier island of the United States, Miami -Dade County, Florida approximately 7.5 miles
off the coast of Miami, Florida. The Village of Key Biscayne occupies a land area of
1.25 square miles situated between Crandon Park and Bill Baggs State Recreation Area.
The Village serves a population of approximately 11,100. The Village of Key Biscayne
receives tax levies on real and personal property located inside its boundaries.
The Village of Key Biscayne has operated under the council-manager form of
government since incorporation. Policymaking and legislative authority are vested in a
governing council consisting of the mayor and six other council members. The Council
is responsible among other things, for passing ordinances and resolutions, adopting the
annual budget, appointing the Village Manager and Village Clerk. The Village Manager
is responsible for carrying out the policies and ordinances of the Council, for overseeing
the daily operations of the government, and for appointing the heads of various
departments.
The Village of Key Biscayne offers a wide range of services, including, police
protection, fire and emergency medical service, public works maintenance, a full service
building, planning and zoning department, parks and recreation activities, solid waste
collection, and a comprehensive stormwater management system. Certain services are
provided through the County School System and the County Library System through
Miami -Dade County.
The annual budget serves as a foundation for the Village of Key Biscayne's financial
planning and control. All departments of the Village are required to submit requests for
appropriations to the Village Manager and these requests are the initiation of developing
the proposed budget. The Village Manager then presents this proposed budget to the
Council for review. The Council is required to hold public hearings on the proposed
budget and to adopt a final budget no later than September 30, the close of the Village's
fiscal year. The appropriated budget is prepared by fund and department. No
department may legally expend in excess of the amount appropriated for that department
within an individual fund. The Village Manager may make transfers of appropriations
within a department. Transfers of appropriations between departments or funds require
the approval of the Village Council. The Village Council approves supplemental
appropriations. Budget to actual comparisons are provided in this report for the general
fund for which an appropriated annual budget has been adopted. The general fund,
budget to actual report. is presented in the required supplemental information section of
this report.
Local Economy
The Village of Key Biscayne enjoys a favorable economic environment and local
indicators to continued future stability. This exclusive community is comprised of well-
educated and involved citizens who take a genuine interest in the social, business.
cultural and governing aspects of their Village. The Village is comprised of affluent
exclusive residential housing stock and three major shopping centers. There is no
industrial area in the community.
Long -Term Financial Planning
The Village has completed all three phases of its Civic Center Project with the
completion of a new Village Hall/ Police Building, a new Fire Station, and most recently,
the third phase. the Village Community Center, opened in November 2004. Recent
completion of a new bus shelter at Crandon Blvd and Harbor Drive was the second and
largest bus shelter in the Village. Several public works projects have recently been
completed yielding new sidewalks, street improvements, park improvements, and a tree
replacement program. A new capital project is under way to improve the safety of the
major roadway through the Village on Crandon Boulevard.
The Village utilizes a comprehensive living projection five years into the future to assess
revenue trends and expenditure needs to assure a balanced stable financial program
avoiding millage rate increases while addressing the various goals and objectives of the
community.
Cash Management Policies and Practices
The Village's Cash Management strategy emphasizes immediate funds collection and
deposit into the appropriate fund utilizing ACH debit or wire transfer methods in over
90% of all funds received. Cash is transferred to a centralized clearing account for all
payments at the point of payment. The clearing account maintains a zero balance
exclusive of these transfers. Currently the Village's investment policy follows Chapter
218, Florida Statutes. Cash in any of the fund's operating accounts are swept into an
overnight repurchase agreement, properly collateralized in accordance with Chapter 280,
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Florida statutes. Surplus cash is invested in certificates of deposit with qualified
depositories, and with the State Board of Administration. Investment objectives are the
preservation of principal, liquidity in accordance with planned cash flows, and return on
investment in that order.
Risk Management
The Village is exposed to various risks of loss related to torts, theft of or damage to and
destruction of assets; errors and omissions; injuries to employees; and natural disasters.
The Village participates in the Florida League of Cities Municipal Insurance Trust for
workers' compensation, liability and property insurance. Flood insurance is provided by
the Florida State Flood Insurance Pool.
Pension Benefits
The Village of Key Biscayne sponsors a defined contribution 401(a) pension plan with
the International City/County Management Association — Retirement Corporation
(ICMA-RC). Each full time employee can contribute up to six percent (6%) of his or her
pay to the plan; the Village contributes twelve percent (12%). In addition, the Village
sponsors a 457 deferred compensation plan in which the employees may contribute on a
voluntary basis.
A defined benefit pension plan is available to all firefighters and sworn police officers.
This plan is under the direction of a separate board of trustees, two of which are police
and fire department employees. Complete details of this plan can be found in note 13 of
the basic financial statements.
Awards and Acknowledgements
The Government Finance Officers Association (GFOA) awarded a Certificate of
Achievement for Excellence in Financial Reporting to the Village of key Biscayne for its
Comprehensive Annual Financial Report (CAFR) for the fiscal year ended September 30,
2004. This was the thirteenth consecutive year that the Village received this prestigious
award. In order to be awarded a Certificate of Achievement, the government published
an easily readable and efficiently organized CAFR. This report satisfied both GAAP and
applicable legal requirements.
A Certificate of Achievement is valid for a period of one year only. We believe that our
current CAFR continues to meet the Certificate of Achievement Program's requirements
and are submitting it to the GFOA to determine its eligibility for another certificate.
In addition, the Village also received the GFOA's Distinguished Budget Presentation
Award for its annual budget document for the 2004-2005 fiscal year. This was the
thirteenth consecutive year that the Village has received this prestigious award. In order
to qualify for the Distinguished Budget Presentation Award, the Village's budget
document was judged to be proficient in several categories, including as a policy
document, a financial plan, an operations guide, and a communications device.
The preparation of this report would not have been possible without the efficient and
dedicated services of the entire staff of all departments of the Village of Key Biscayne.
We would like to express our appreciation to all members of all of the departments who
assisted and contributed to the preparation of this report. We would also like to express
our appreciation to Rachlin Cohen & Holtz LLP, our independent auditors, for their
assistance and efforts in helping the Village prepare the CAFR. Appreciation is also
extended to the Mayor and the Village Council for their unfailing support for maintaining
the highest standards of professionalism in the management of the Village of Key
Biscayne's finances.
Respectfully submitted,
acqueline R. Men rf'ez
Village Manager
Randolph G. White
Finance Director
VILLAGE OF KEY BISCAYNE, FLORIDA
VILLAGE OFFICIALS
SEPTEMBER 30, 2005
VILLAGE COUNCIL
Robert Oldakowski, Mayor
Robert Vernon, Vice -Mayor
Enrique Garcia
Steve Leidman
Jorge Mendia
Thomas Thornton
Patricia Weinman
VILLAGE MANAGER
Jacqueline R. Menendez
VILLAGE CLERK
Conchita H. Alvarez, CMC
VILLAGE ATTORNEY
Weiss Serota Helfman Pastoriza Cole & Boniske, P.A.
FINANCE DIRECTOR
Randolph G. White, P.A.
VILLAGE AUDITORS
Rachhn Cohen & Holtz LLP
Accountants • Advisors
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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, 2004
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.
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CDRPORArION /adt
President
Executive Director
VILLAGE OF KEY BISCAYNE
ORGANIZATIONAL CHART
The Village Manager, who reports directly to the Village Council, manages the Village
of Key Biscayne's day-to-day operations. The Village Manager appoints the Five
Department Heads.
VOTERS
OF
KEY BISCAYNE
Village
Council
Local Planning
Agency
Village Clerk
Special Master
Village Manages
Village Attorn31
e
Assistant to
Village Manager
Police/Fire
Retirement
Board
Department of
Building,
Zoning and
Planning
Building
Zoning
Planning
Department of
Public Safety
Fire Rescue
Police
Department of
Recreation
Special Events
Sports and
Athletics
r Programs
and Tours
Senior
Services
Department of
Public Works
Village Engineel
Contract
Supervisor
Stormwater
LI Management
I Refuse
Collection
and Recycling
Department of
Finance and
Administrative
Services
Finance/
Accounting
Personnel/
Benefits
Risk
Management
Maintenance
FINANCIAL SECTION
REPORT OF INDEPENDENT
CERTIFIED PUBLIC ACCOUNTANTS
Cohen
&Holtz
Accountants Advisors
REPORT OF INDEPENDENT CERTIFIED PUBLIC ACCOUNTANTS
Honorable Mayor, Village Council and Village Manager
Village of Key Biscayne, Florida
We have audited the accompanying financial statements of the governmental activities, the business -type
activities, each major fund and the aggregate remaining fund information of the Village of Key Biscayne,
Florida (the Village) as of September 30, 2005 and for the fiscal year then ended, which collectively
comprise the Village's basic financial statements as listed in the table of contents. These financial
statements are the responsibility of the Village's management. Our responsibility is to express opinions
on these financial statements based on our audit.
We conducted our audit in accordance with auditing standards generally accepted in the United States
and the standards applicable to financial audits contained in Government Auditing Standards, issued by
the Comptroller General of the United States. Those standards require that we plan and perform the audit
to obtain reasonable assurance about whether the financial statements are free of material misstatement.
An audit includes consideration of internal control over financial reporting as a basis for designing audit
procedures that are appropriate in the circumstances, but not for the purposes of expressing an opinion on
the effectiveness of the Village's internal control over financial reporting. Accordingly, we express no
such opinion. An audit also includes examining, on a test basis, evidence supporting the amounts and
disclosures in the financial statements, assessing the accounting principles used and significant estimates
made by management, as well as evaluating the overall financial statement presentation. We believe that
our audit provides a reasonable basis for our opinions.
In our opinion, the financial statements referred to above present fairly, in all material respects, the
respective financial position of the governmental activities, the business -type activities, each major fund
and the aggregate remaining fundinformation of the Village of Key Biscayne, Florida as of September
30, 2005 and the respective changes in the financial position and cash flows, where applicable, thereof
for the year then ended, in conformity with accounting principles generally accepted in the United States.
In accordance with Government Auditing Standards, we have also issued a report dated April 14, 2006 on
our consideration of the Village's internal control over financial reporting and our tests of its compliance
with certain provisions of laws, regulations, contracts, and grant agreements and other matters. The
purpose of that report is to describe the scope of our testing of internal control over financial reporting
and compliance and the results of that testing, and not to provide an opinion on the internal control over
financial reporting or on compliance. That report is an integral part of an audit performed in accordance
with Government Auditing Standards and should be read in conjunction with this report in considering
the results of our audit.
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Rachlin Cohen & Holtz LLP
One Southeast Third Avenue • Tenth Floor • Miami, Florida 33131 • Phone 305.377 4228 • Fax 305 377 8331 • www.rachlin.com
An Independent Member of Baker Tilly International
Honorable Mayor, Village Council and Village Manager
Village of Key Biscayne, Florida
Page Two
Management's Discussion and Analysis and the required supplementary information on pages 3 through
10 and pages 43 through 45, respectively, are not a required part of the basic financial statements but are
supplementary information required by accounting principles generally accepted in the United States.
We have applied certain limited procedures, which consisted principally of inquiries of management
regarding the methods of measurement and presentation of the required supplementary information.
However, we did not audit the information and express no opinion on it.
Our audit was conducted for the purpose of forming opinions on the financial statements that collectively
comprise the Village of Key Biscayne's basic financial statements. The introductory section, the
combining financial statements and statistical tables are presented for purposes of additional analysis and
are not a required part of the basic financial statements. Similarly, the accompanying schedule of
expenditures of federal awards is presented for purposes of additional analysis as required by U.S. Office
of Management and Budget Circular A-133, Audits of States, Local Governments, and Non -Profit
Organization, and is not a required part of the basic financial statements. The combining financial
statements and the schedule of expenditures of federal awards have been subjected to the auditing
procedures applied in the audit of the basic financial statements and in our opinion, is fairly stated, in all
material respects, in relation to the basic financial statements taken as a whole. The introductory section
and statistical tables have not been subjected to the auditing procedures applied in the audit of the basic
financial statements and, accordingly, we express no opinion on them.
449
Miami, Florida
April 14, 2006
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Cohen
&Holtz
MANAGEMENT'S DISCUSSION AND ANALYSIS
(MD8EA)
Management's Discussion and Analysis
As Management of the Village of Key Biscayne, we offer readers of the Village of Key
Biscayne's (the Village) financial statements this narrative overview and analysis of the financial
activities of the Village of Key Biscayne for the fiscal year ended September 30, 2005. We
encourage readers to consider information presented here in conjunction with additional
information that we have furnished in our letter of transmittal which can be found on pages i-v of
this report.
Financial Highlights
• The assets of the Village of Key Biscayne exceeded its liabilities at the close of the most
recent fiscal year by $34,127,090 (net assets). Of this amount, all are either reserved or
designated.
• The Village's total net assets increased by $2,553,536, this increase is attributable to the
increase of property taxes received due to an increase in the assessed taxable values of
properties in the Village, increases in revenues from the Key Biscayne Community Center
programs and activities and proceeds from a capital lease for new police vehicles.
• At the close of the current fiscal year, the Village of Key Biscayne's governmental funds
reported an ending fund balance of $6,139,545, an increase of $ 1,163,474 in comparison
with the prior year. This entire total amount is either reserved or designated for spending at
the Council's direction.
• The Village incurred $2,850,000 of new long-term debt during the current fiscal year.
Overview of the Financial Statements
This discussion and analysis are intended to serve as an introduction to the Village of Key
Biscayne's basic financial statements. The Village of Key Biscayne's basic financial statements
comprise three components: 1) government -wide financial statements, 2) fund financial
statements, and 3) notes to the financial statements. This report also contains other
supplementary information in addition to the basic financial statements themselves.
Government -wide financial statements. The government -wide financial statements are
designed to provide readers with a broad overview of the Village of Key Biscayne's finances, in
a manner similar to a private sector business.
The statement of net assets presents information on all of the Village of Key Biscayne's assets
and liabilities, with a difference between the two reported as net assets. Over time, increases or
decreases in net assets may serve as a useful indicator of whether the financial position of the
Village of Key Biscayne is improving or deteriorating.
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The statement of activities presents information showing how the government's net assets
changed during the most recent fiscal year. All changes in net assets are reported as soon as the
underlying event giving rise to the change occurs, regardless of the timing of related cash flows.
Thus, revenues and expenses are reported in this statement for some items that will only result in
cash flows in future periods (e.g., uncollected taxes and earned but unused vacation leave).
Both of the government -wide financial statements distinguish functions of the Village of Key
Biscayne that are principally supported by taxes and intergovernmental revenues (governmental
activities) from other functions that are intended to recover all or a significant portion of their
costs through user fees and charges (business type activities). The governmental activities of the
Village of Key Biscayne include general government, public safety, public works, building
planning & zoning, and parks and recreation.
The government -wide financial statements include only the Village of Key Biscayne itself
(known as the primary government).
The government -wide financial statements can be found on pages 11-12 of this report.
Fund Financial Statements. A fund is a grouping of related accounts that is used to maintain
control over resources that have been segregated for specific activities or objectives. The Village
of Key Biscayne, like other state and local governments, uses fund accounting to ensure and
demonstrate compliance with finance -related legal requirements. The Village of Key Biscayne
has two fund categories, the governmental funds and the enterprise funds.
Governmental Funds. Governmental funds are used to account for essentially the same
functions reported as governmental activities in the government -wide financial statements.
However, unlike the government -wide financial statements, governmental fund financial
statement focus on near -term inflows and outflows of spendable resources as well as on balances
of spendable resources available at the end of the fiscal year. Such information may be useful in
evaluating a government's near -term financing requirements.
Because the focus of governmental funds is narrower than that of the government -wide financial
statements, it is useful to compare the information presented for the governmental funds with
similar information presented for governmental activities in the government -wide financial
statements. By doing so, readers may better understand the long-term impact of the
government's near -term financing decisions. Both the governmental fund balance sheet and the
governmental fund statement of revenues, expenditures, and changes in fund balances provide a
reconciliation to facilitate this comparison between governmental funds and governmental
activities.
The Village of Key Biscayne maintains four governmental funds: the general fund, one special
revenue fund and two capital projects funds.
The Village of Key Biscayne adopts an annual appropriated budget for its general fund. A
budgetary comparison statement has been provided for the general fund to demonstrate
compliance with this budget.
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The basic governmental fund financial statements can be found on pages 13-15 of this report.
Proprietary Funds. The Village maintains one type of proprietary fund. Enterprise funds are
used to report the same functions presented as business -type activities in the government -wide
financial statements. The Village uses enterprise funds to account for its Stormwater, Solid
Waste Collection and Sanitary Sewer Construction operations.
The basic proprietary fund financial statements can be found on pages 16-18 of this report.
Fiduciary Funds. Fiduciary funds are used to account for resources held for the benefit of
parties outside the Village. Fiduciary funds are not reflected in the government -wide financial
statements because the resources of those funds are not available to support the Village's own
programs. The accounting used for fiduciary funds is much like that used for proprietary funds.
The basic fiduciary fund financial statements can be found on pages 19-20 of this report.
Notes to the basic financial statements. The notes provide additional information that is
essential to a full understanding of the data provided in the government -wide and fund financial
statements. The notes to the financial statements can be found on pages 21--42 of this report.
Other Information
In addition to the basic financial statements and accompanying notes, this report also presents
certain required supplementary information concerning the Village's progress in funding its
obligation to provide pension benefits to its employees.
Required supplementary information can be found on pages 43-45 of this report.
Government -wide Financial Analysis
As noted earlier, net assets may serve over time as a useful indicator of a government's financial
position. In the case of the Village's, assets exceeded liabilities by $34,127,091 at the close of
the most recent fiscal year.
A portion of the Village's net assets, $66,274,394 or 85.72 %, reflects its investment in capital
assets (e.g., land and equipment). The Village of Key Biscayne uses these capital assets to
provide services to citizens; consequently, these assets are not available for future spending.
Our analysis of the financial statements of the Village begins below. The Statement of Net
Assets and the Statement of Activities report information about the Village's activities that will
help answer questions about the position of the Village. A comparative analysis is provided.
Governmental Activities. Governmental activities increased the Village of Key Biscayne fund
balance by approximately $1,021,580. This net overall increase was attributable to an increase
in property tax revenues due to increased assessed values of Key Biscayne real estate in general
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and proceeds from a capital lease for new police cars. All other governmental activities
increased fund balance as follows:
• Property taxes increased by $622,391 (4.9 percent) during the year. Most of this increase is
the product of a minor number of new units completed and on the tax roll for the first time,
along with renovated homes with increased assessed values, and residential and
commercial resales.
• Most departments increased 8 percent due to the Village's salary step program, which in
fiscal year 2004 reflected a 5 percent increase in salaries and a 3 percent increase for a cost
of living increase.
• Debt service remained fairly level compared to the prior year, with a minor addition for
interest on new debt.
• The amount expended to the Village Attorney increased due to involvement with labor
negotiations with the Village's Fire Rescue Department that were unforeseen at budget
preparation time.
For the most part, increases in expenses closely paralleled inflation and growth in the scope of
services.
Net Assets
A summary of the Village's Net Assets is presented in Table A-1 and a summary of the changes
in net assets is presented in Table A-2.
Table A-1
Summary of Net Assets
Governmental Activities Business -type Activities Total
2005 2004 2005 2004 2005 2004
Current assets
Capital assets, net
Total assets
Current liabilities
$ 8,130,755 $ 8,635,795 $ 1,349,581 $ 1,603,753 $ 9,480,336 $ 10,239,548
57,936,791 54,533,321 8,337,603 8,611,522 66,274,394 63,144,843
66,067,546 63,169,116 9,687,184 10,215,275 75,754,730 73,384,391
2,083,737 3,629,268 68,441 349,089 2,152,178 3,978,357
Noncurrent liabilities 33,069,703 30,297,295 6,405,759 6,843,444 39,475,462 37,140,739
Investment in capital assets,
net of related debt 26,284,600 26,149,714 1,931,843 1,968,238 28,216,443 28,117,952
Restricted 326,826 283,180 326,826 283,180
Unrestricted 4,302,680 2,809,659 1,281,141 1,054,504 5,583,821 3,864,163
Total net assets $ 30,914,106 $ 29,242,553 $ 3,212,984 $ 3,022,742 $ 34,127,090 $ 32,265,295
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Table A-2
Summary of Changes in Net Assets
Governmental Activities Business -type Activities Total
2005 2004 2005 2004 2005 2004
Revenues.
Program revenues.
Charges for services $ 2,907,492 $ 1,287,091 5 1,052,444 $ 805,629 $ 3,959,936 $ 2,092,720
Operating grants and contributions 650,679 524,736 650,679 524,736
Capital grants and contributions 517,643 12,770,711 517,643 12,770,711
General revenues:
Property taxes 13,360,251 2.219,118 13,360,251 2,219,118
Utility taxes 2,234,402 677.203 - 2,234,402 677,203
Franchise taxes 705,810 821,883 - 705,810 821,883
Intergovernmental 978,304 - 978,304 -
Investment income and
miscellaneous 537,268 237,509 41,050 21,235 578,318 258,744
Total revenues 21,891,849 18,538,251 1,093,494 826,864 22,985,343 19,365,115
Expenses:
General government 2,914,734 3,614,636 - 2,914,734 3,614,636
Public safety 9,240,670 9,049,851 - - 9,240,670 9,049,851
Parks and recreation 2,614,785 1,013,741 - 2,614,785 1,013,741
Public works 2,189,673 1,103,940 - - 2.189,673 1,103,940
Building, zoning and planning 1,235,175 1,220,180 - - 1,235,175 1,220,180
Debt service 1,305,383 1,487,245 - - 1,305,383 1,487,245
Stormwater - - 454,963 971,081 454,963 971,081
Solid waste collection - - 466,162 259,173 466,162 259,173
Sanitary sewer construction - 10,262 15,732 10,262 15,732
Total expenses 19,500,420 17,489,593 931,387 1,245,986 20,431,807 18,735,579
Change in net assets before transfers 2,391,429 1,048,658 162,107 (419,122) 2,553,536 629,536
Transfers (28,135) (28,134) 28,135 28,134
Change in net assets before transfers 2,363,294 1,020,524 190,242 (390,988) 2,553,536 629,536
Net assets, beginning 28,550,812 28,222,369 3,022,742 3,413,730 31,573,554 31,636,099
Net assets, ending $ 30,914,106 $ 29,242,893 $ 3,212,984 $ 3,022,742 $ 34,127,090 $ 32,265,635
The government's net assets increased by $2,553,536 during the current fiscal year. This
increase represents the results of operations for a full 12 -month period with no capital
contributions from outside sources.
Business -type Activities
Business -type activities increased the Village's net assets by $ 149,192.
• In fiscal 2005, two of the three business -type activities reflected operational profits.
• The Stormwater Utility Fund reflected an operating profit of $ 96,597.
• The Solid Waste Collection Fund reported a profit of $ 65,511.
• The Sanitary Sewer Construction Fund was dormant awaiting a resumption of construction
activity.
-7-
Revenues & Expenses of Governmental Activities
$14,000.000
$12,000,000
$10,000,000
$8,000,000
$6,000 000
$4,000,000
$2,000,000 —7
$0
■ Property Taxes
• Charges for Services
O Franchise Fees
D Utility Taxes
• Intergovernmental Revenues
■ Capital Grants and Contnbutions
1:1 Operating Grants and Contributions
• Investment Income and Miscellaneous
13 General Government
• Public Safety
■Parks and Recreation
■ Budding, Zoning and Planning
II Public Works
■ Interest on Long Term Debt
■ Storm Water
=Solid Waste Collection
O Sanitary Sewer Construction
Revenues by Source — Governmental Activities
Property Taxes,
$13,393,102 , 58% Charges for Services,
$4,081,150 , 18%
Investment Income a
Miscellaneous, $578,318
3%
Operating Grants and
Contributions, $646,943 ,
3%
Franchise Fees,
$1,452,210 , 6%
Utility Taxes, $1,488,002 ,
6%
Intergovernmental
Revenues, $923,743 , 4%
Capital Grants and
LContrlbutlons, $517,643 ,
2%
-8-
Financial Analysis of the Government's Funds
As noted earlier, the Village of Key Biscayne uses fund accounting to ensure and demonstrate
compliance with finance -related legal requirements.
Governmental funds. The focus of the Village of Key Biscayne's governmental funds is to
provide information on near -term inflows, outflows, and balances of spend able resources. Such
information is useful in assessing the Village's financing requirements.
At the end of the current fiscal year, fund balance of the general fund was $5,754,277, an increase
of $998,543 in comparison with the prior year. All of this is either reserved or designated for
specific uses: (1) emergencies ($2,890,196), (2) Building Inspection Costs ($275,000), (3)
Compensated Absences ($334,644), (4) Law Enforcement Seizures ($326,826), (5) Special
Disaster Relief ($13,192), (6) Playing Field Acquisitions ($456,403),(7) Working Capital Reserves
($600,000) , (8) Police/Administration Building Reserve ($25,000), (9) Fire Station Building
Reserve ($25,000), (10) Community Center Equipment Reserve ($50,000), (11) Fire Vehicles
Replacement Reserve ($50,000), Capital Lease ($404,471), and Master Plan Initiatives ($500,000).
The general fund is the chief operating fund of the Village of Key Biscayne. As a measure of the
general fund's liquidity, it may be useful to compare total fund balance to total fund
expenditures. Total fund balance represents 30.48 percent of total general fund expenditures.
A summary of the general fund's condensed balance sheet and statement of revenues,
expenditures and changes in fund balance is presented in Table B-1 and B-2 for September 30,
2005 and 2004, is shown as follows:
Table B-1
Summary of Condensed Balance Sheet
2005 2004
Total assets $ 7,177,656 $ 6,139,310
Total liabilities $ 1,423,379 $ 1,187,122
Reserved or designated fund balance 5,754,277 4,952,188
Total liabilities and fund balance $ 7,177,656 $ 6,139,310
Table B-2
Summary of Condensed Statement of Revenues,
Expenditures and Changes in Fund Balance
2005 2004
Total revenues $ 21,240,012 $ 18,075,882
Total expenditures 19,568,607 16,243,868
Excess of revenues over expenditures $ 1,671,405 $ 1,832,014
-9-
General Fund Budgetary Highlights
There were no supplemental appropriations for the fiscal year ended September 30, 2005.
Capital Assets
As of September 30, 2005, the Village's investment in capital assets amounted to $40,181,469. The
total increase in capital assets for the fiscal year was as follows:
Major capital asset events during the fiscal year included the following:
• Completion of the Village Community Center
• Completion of improvements to the Community School parking lot
• Completion of improvements to the St. Agnes playing fields
• Completion of Village's evaluation and appraisal report (EAR).
Additional information on the Village's capital assets can be found in Note 8 on pages 32-33 of this
report.
Debt Administration
At September 30, 2005, the Village had bonded debt outstanding of $36,860,606. Of this amount,
$6,010,000 represents bonds secured solely by specified revenue sources (Stormwater revenue
bonds). The remainder is special obligation bonds that are secured by non -ad Valorem revenues
through covenants to budget and appropriate.
The Village's total debt increased by $2,850,000 due to the additional borrowing required to
complete the civic center site infrastructure and the initial $50,000 draw on the Crandon Blvd.
improvement project.
Additional information on the Village's long-term debt can be found in Note 9 on pages 33-38 of
this report.
Economic Factors and Next Years Budgets and Rates
• The unemployment rate for Miami -Dade County is currently 3.9 percent, which is a decrease
from a rate of 5.0 percent a year ago. This compares unfavorably to the state's average
unemployment rate of 3.5 percent, but, favorably to the national average rate of 5.1 percent. All
percentages are expressed as of September 30, 2005.
• The occupancy rate of the Village's retail rentals and hospitality service industry has remained
stable for the past several years.
• Inflationary trends in the region compare favorably to national indices.
All of these factors were considered in preparing the Village of Key Biscayne's budget for the 2006
fiscal year.
Requests for Information
This financial report is designed to provide a general overview of the Village of Key Biscayne's
finances for all those with an interest in the government's finances. Questions concerning any of the
information provided in this report or requests for additional financial information should be addressed
to the Office of the Village Manager, 88 West McIntyre Street, Key Biscayne, Florida 33149.
-10-
BASIC FINANCIAL STATEMENTS
VILLAGE OF KEY BISCAYNE, FLORIDA
STATEMENT OF NET ASSETS
SEPTEMBER 30, 2005
ASSETS
Cash and cash equivalents
Receivables, net
Interest receivable
Prepaids
Internal balances
Negative net pension obligation
Other assets
Restricted assets:
Cash and cash equivalents
Investments
Capital assets not being depreciated
Capital assets being depreciated, net
Total assets
LIABILITIES
Accounts payable and accrued liabilities
Accrued interest payable
Payable to pension plan
Unearned revenue
Noncurrent liabilities:
Due within one year
Due in more than one year
Total liabilities
NET ASSETS
Invested in capital assets, net of related debt
Restricted for law enforcement
Unrestricted
Total net assets
Governmental
Activities
Business -
type
Activities
$ 4,942,836 $ 965,047
1,366,663 351,473
18,994
409,248
(14,067) 14,067
407,399
26,303 -
657,018
335,355
24,034,473
33,902,318
66,067,546
1,407,612
387,319
23,415
268,375
1,717,276
31,349,443
35,153,440
463,915
7,873,688
Total
$ 5,907,883
1,718,136
18,994
409,248
407,399
26,303
657,018
335,355
24,498,388
41,776,006
9,687,184 75,754,730
61,509
1,469,121
387;319
23,415
6,931 275,306
18,142
6,387,617
1,735,418
37,737,060
6,474,199 41,627,639
26,284,600 1,931,844
326,826
4,302,680 1,281,141
$ 30,914,106 $3,212,985
28,216,444
326,826
5,583,821
$ 34,127,091
See notes to basic financial statements.
-11-
VILLAGE OF KEY BISCAYNE, FLORIDA
STATEMENT OF ACTIVITIES
FISCAL YEAR ENDED SEPTEMBER 30, 2005
Fun cti ons/Pro erams
Governmental activities.
General government
Public works
Police
Fire
Parks and recreation
Building, zoning and planning
Interest on long-term debt
Total governmental activities
Business -type activities.
Stormwater
Solid waste
Sanitary sewei
Total business -type activities
Total
Program Revenues
Charges Operating
for Grants and
Expenses Services Contributions
Capital
Grants and
Contributions
$ 2,914,734 $1,257,895 $ 650,679 $
2,189,673
4,373,145 212,121
4,867,525 7,120
2,614,785 1,287,806
1,235,175 142,550
1,305,383
19,500,420
2,907,492 650,679
454,963 518,812
466,162 533,632
10,261
931,386 1,052,444
$ 20,431,806 $ 3,959,936 $ 650,679 $ 517,643
517,643
517,643
General revenues:
Property taxes
Franchise fees based on gross receipts
Utility taxes
Communications services tax
Unrestricted intergovernmental revenue
Unrestricted investment earnings
Miscellaneous
Transfers
Total general revenues
Change in net assets
Net assets, beginning, as previously ieported
Prior period adjustment (see Note 14)
Net assets, beginning, as restated
Net assets, ending
See notes to basic financial statements
-12-
Net (Expense) Revenue and
Chances in Net Assets
Business -
Governmental type
Activities Activities
$ (1,006,160) $
(1,672,030)
(4,161,024)
(4,860,405)
(1,326,979)
(1,092,625)
(1,305,383)
(15,424,606)
63,849
67,470
(10,261)
121,058
(15,424,606) 121,058
13,360,251
705,810
1,488,002
746,400
978,304
255,611
281,657
(28,135)
41,050
28,135
17,787,900 69,185
2,363,294 I90,243
29,242,556 3,022,742
(691,744)
28,550,812 3,022,742
$ 30,914,106 $ 3,212,985
Total
$ (1,006,160)
(1,672,030)
(4,161,024)
(4,860,405)
(1,326,979)
(1,092,625)
(1,305,383)
(15,424,606)
63,849
67,470
(10,261)
121,058
(15,303,548)
13,360,251
705,810
1,488,002
746,400
978,304
296,661
281,657
17,857,085
2,553,537
32,265,298
(691,744)
31,573,554
$ 34,127,091
VILLAGE OF KEY BISCAYNE, FLORIDA
BALANCE SHEET
GOVERNMENTAL FUNDS
SEPTEMBER 30, 2005
ASSETS
Cash and cash equivalents
Receivables, net
Due from other funds
Prepaid items
Restncted cash and cash equivalents
Restricted investments
Total assets
LIABILITIES AND FUND BALANCES
Liabilities:
Accounts payable and
accrued liabilities
Due to other funds
Payable to pension plan
Deferred revenue
Total liabilities
Fund balances:
Reserved
Unreserved, undesignated reported in:
Special revenue fund
Capital improvements
Civic center fund
Total fund balances (deficit)
Total liabilities and fund balances
Special
General Revenue
$ 3,782,436 $ -
1,280,163 86,500
1,523,441 108,989
204,248
52,013 605,005
335,355
$ 7,177,656 $ 800,494
$ 1,056,373 $ 301,746
75,216 1,136,969
23,415 -
Capital Civic
Improvements Center
$ 1,109,011 S 51,389
205,000
$ 1,314,011
$ 49,493
384,312
$ 51,389
50,000
268,375 - -
1,423,379 1,438,715 433,805 50,000
5,754,277
- (638,221)
880,206
1,389
5,754,277 (638,221) 880,206 1,389
$ 7,177,656 $ 800,494 $ 1,314,011 $ 51,389
Amounts reported for governmental activities in the statement of net assets are different because:
Capital assets used in governmental activities are not financial resources and, therefore,
are not reported in the funds.
A negative net pension obligation (NPO) is not considered to represent a financial
asset and therefore is not reported in the governmental funds
Long-term liabilities, including bonds payable, are not due and payable in the current
period and therefore not reported in the funds
Net assets of governmental activities
Total
Governmental
Funds
$ 4,942,836
1,366,663
1,632,430
409,248
657,018
335,355
$ 9,343,550
$ 1,407,612
1,646,497
23,415
268,375
3,345,899
5,754,277
(638,221)
880,206
1,389
5,997,651
57,936,791
407,399
(33,427,735)
$ 30,914,106
See notes to basic financial statements.
-13-
VILLAGE OF KEY BISCAYNE, FLORIDA
STATEMENT OF REVENUES, EXPENDITURES AND CHANGES IN FUND BALANCES
GOVERNMENTAL FUNDS
FISCAL YEAR ENDED SEPTEMBER 30, 2005
Total
Special Capital Civic Governmental
General Revenue Improvements Center Funds
Revenues:
Property taxes $13,360,251 $ - $ - $ - $ 13.360,251
Utility taxes 1,488,002 1,488,002
Communications Services tax 746,400 - 746,400
Franchise fees 705,810 - 705,810
Licenses and permits 1,040,130 - 1.040,130
Intergovernmental 1,140,599 355,348 - l ,495,947
Charges for services 1,867,362 - 1,867,362
Interest 240,779 9,926 3,517 1,389 255,611
Grants 650,679 650,679
Other - 281,657 281,657
Total revenues 21,240,012 646.931 3,517 1,389 21,891,849
Expenditures:
Current:
General government
Fire
Police
Public works
Building, zoning and planning
Parks and recreation
Capital outlay
Debt service:
Principal
Interest and fiscal charges
Total expenditures
2,136,375
4,749,407
4,605,148
2,183,774
1,238,376
2,193,633
- 1,849,014
1,161,298
1,300,596
1,274,722 1,404,262
2,136,375
4,749,407
4,605,148
2,183,774
1,238,376
2,193,633
4,527,998
- 1,161,298
1,300,596
19,568,607 1,849,014 1,274,722 1,404,262 24,096,605
Excess (deficiency) of revenues
over expenditures 1,671,405 (1,20',083) (1,271.205) (1,402,873) (2,204,756)
Other financing sources (uses):
Transfers in 1,245,653 1,245,653
Transfers out (1,273,788) - - (1.273,788)
Bonds issued 50,000 - 2,800,000 2,850,000
Capital lease proceeds 404,471 - - 404,471
Total other financing
sources (uses)
(869,317) 50,000 1,245,653 2,800,000 3.226,336
Net change in fund balances 802,088 (1,152,083)
Fund balances (deficit), beginning 4,952,189 513,862
(25.552) 1,397,127 1,021,580
905.758 (1.395.738) 4.976,071
Fund balances (deficit), ending $ 5,754,277 $ (638.221) S 880,206 $ 1.389 $ 5,997,651
Sec notes to basic financial statements.
-14-
VILLAGE OF KEY BISCAYNE, FLORIDA
RECONCILIATION OF THE STATEMENT OF REVENUES, EXPENDITURES AND CHANGES IN
FUND BALANCES OF GOVERNMENTAL FUNDS TO THE STATEMENT OF ACTIVITIES
FISCAL YEAR ENDED SEPTEMBER 30, 2005
Amounts reported for governmental activities in the statement of activities
(Page 12) are different because:
Net change in fund balances - total governmental funds (Page 14) $1,021,580
Governmental funds report capital outlays as expenditures. However, in the
statement of activities, the cost of those assets is allocated over their
estimated useful lives and reported as depreciation expense. This is the
amount by which capital outlays exceeded depreciation in the current period.
The details of the difference are as follows:
Capital outlay
Depreciation expense
Net adjustment
The issuance of long-term debt provides current financial resources to
governmental funds, while the repayment of the principal of long-term debt
consumes the current financial resources of governmental hinds.
The detail of the differences are as follows:
Debt payments
2004 and 2005 revenue bonds issued
Capital lease proceeds
Net adjustment
Some expenses reported in the statement of activities do not require current
financial resources and, therefore, are not reported as expenditures in
governmental funds.
$ 5,770,620
(1,676,790)
1,461,903
(2,850,000)
(1,099,202)
The details of the difference is:
Compensated absences (285,112)
Accrued interest expense (4,787)
Negative net pension obligation 25,082
4,093,830
(2,487,299)
(264,817)
Change in net assets of governmental activities (Page 12) $ 2,363,294
See notes to basic financial statements.
-15-
VILLAGE OF KEY BISCAYNE, FLORIDA
STATEMENT OF NET ASSETS
PROPRIETARY FUNDS
SEPTEMBER 30, 2005
Business -type Activities -
Enterprise Funds
Stormwater
Utility Nonmajor
System Funds Totals
ASSETS
Current assets:
Cash and cash equivalents $ 839,912 $ 125,135 $ 965,047
Accounts receivables, net 129,765 221,708 351,473
Interest receivable 18,994 - 18,994
Due from other fund 14,467 14,467
Total current assets 1,003,138 346,843 1,349,981
Noncurrent assets:
Capital assets not being depreciated
Capital assets being depreciated, net
Total noncurrent assets
Total assets
- 463,915
7,873,688
463,915
7,873,688
7,873,688 463,915 8,337,603
8,876,826 810,758 9,687,584
LIABILITIES
Current liabilities:
Accounts payable and accrued liabilities 14,023 47,486 61,509
Due to other funds 400 400
Deferred revenue 6,932 6,932
Current portion of revenue bonds payable 18,142 18,142
Total current liabilities 14,023 72,960 86,983
Noncurrent liabilities:
Revenue bonds
Revolving loan
Total noncurrent liabilities
Total liabilities
6,010,000
6,010,000
377,617 377,617
6,010,000 377,617 6,387,617
6,024,023 450,577 6,474,600
NET ASSETS
Invested in capital assets, net of related debt 1,863,688 68,156 1,931,844
Unrestricted 989,115 292,026 1,281,141
Total net assets $ 2,852,803 $ 360,182 $ 3,212,985
See notes to basic financial statements.
-16-
VILLAGE OF KEY BISCAYNE, FLORIDA
STATEMENT OF REVENUES, EXPENSES AND CHANGES IN NET ASSETS
PROPRIETARY FUNDS
FISCAL YEAR ENDED SEPTEMBER 30. 2005
Business -type Activities -
Enterprise Funds
Stormwater
Utility Nonmajor
System Funds Totals
Operating revenues:
Charges for services $ 518,812 $ 533,632 $ 1.052,444
Operating expenses:
General and administrative 181,044 466,162 647,206
Depreciation 273,919 - 273,919
Total operating expenses 454,963 466,162 921,125
Operating income 63,849 67,470 131,319
Non -operating revenues (expenses):
Interest income 32,748 8,302 41,050
Interest expense (10,261) (10,261)
Total non -operating revenues (expenses) 32,748 (1,959) 30,789
Income before transfers 96,597 65,511 162,108
Transfers in 28,135 28,135
Change in net assets 96,597 93,646 190,243
Net assets, beginning 2,756,206 266,536 3,022,742
Net assets. ending $ 2,852,803 $ 360.182 $ 3.212,985
See notes to basic financial statements.
-17-
VILLAGE OF KEY BISCAYNE, FLORIDA
STATEMENT OF CASH FLOWS
PROPRIETARY FUNDS
FISCAL YEAR ENDED SEPTEMBER 30, 2005
Business -type Activities -
Enterprise Funds
Stormwater
Utility Nonmajor
System Funds Totals
Cash flows from operating activities:
Receipts from customers and users
Payments to suppliers
Net cash provided (used) by operating activities
Cash flows from non -capital financing activities:
Transfers from other funds
Net cash provided by non -capital financing activities
Cash flows from capital and related financing activities:
Net payments on revolving loan
Interest paid
Net cash used by capital and related financing activities
Cash flows from investing activities:
Interest received
Net cash provided by investing activities
Net increase (decrease) in cash and cash equivalents
Cash and cash equivalents, beginning
Cash and cash equivalents, ending
Reconciliation of operating income to net cash
provided by operating activities:
Operating income
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 funds
Increase (decrease) in:
Accounts payable
Deferred revenue
Due to other funds
Total adjustments
Net cash provided (used) by operating activities
$ 518,812 $503,128 $1,021,940
(701,001) (466,349) (1,167,350)
(182,189) 36,779 (145,410)
- 28,135
28,135
28,135
28,135
(420,000) (17,686) (437,686)
- (10,261) (10,261)
(420,000) (27,947) (447,947)
32,750
32,750
8,300 41,050
8,300 41,050
(569,439) 45,267 (524,172)
1,409,351 79,868 1,489,219
$ 839,912 $125,135 $ 965,047
$ 63,849 $ 67,470 $ 131,319
273,919 - 273,919
(32,882) (104,630)
(5,833)
(14,468)
(137,512)
- (5,833)
24,011 9,543
(330,172) 42,595
- 6,933
(136,602) 400
(246,038) (30,691)
$ (182,189) $ 36,779
(287,577)
6,933
(136,202)
(276,729)
$ (145,410)
See notes to basic financial statements.
-18-
VILLAGE OF KEY BISCAYNE, FLORIDA
STATEMENT OF FIDUCIARY NET ASSETS
PENSION TRUST FUND
SEPTEMBER 30, 2005
ASSETS
Contributions receivable:
Village (including State) $ 441.293
Employees 23.415
Total contributions receivable 464,708
Investments, at fair value:
Money market funds
Common stocks
Mutual funds
Total investments
Total assets
LIABILITIES AND NET ASSETS
Liabilities
Net assets held in trust for pension benefits
92,275
2,811,276
2,742,731
5,646,282
6,110,990
$ 6,110,990
See notes to basic financial statements.
-19-
VILLAGE OF KEY BISCAYNE, FLORIDA
STATEMENT OF CHANGES IN FIDUCIARY NET ASSETS
PENSION TRUST FUND
FISCAL YEAR ENDED SEPTEMBER 30, 200.5
ADDITIONS
Contributions:
Plan members
Village (including State)
Total contributions
Investment earnings:
Net increase in the fair value of investments
Interest and dividends
Total investments earnings
Total additions
DEDUCTIONS
Benefits paid
Administrative expenses
Total deductions
Change in net assets
Net assets, beginning
Net assets, ending
$ 520,857
893,859
1,414,716
440,974
59,054
500,028
1,914,744
225,259
65,849
291,108
1,623,636
4,487,3.54
$6,110,990
See notes to basic financial statements.
-20-
NOTES TO BASIC FINANCIAL STATEMENTS
VILLAGE OF' KEY BISCAYNE, FLORIDA
NOTES TO BASIC FINANCIAL STATEMENTS
FISCAL YEAR ENDED SEPTEMBER 30, 2005
NOTE 1. SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES
The Village of Key Biscayne, Flonda (the Village), located in Miami -Dade County, is a political
subdivision of the State of Florida. The Village, which was incorporated in 1991, operates under
a Council -Manager form of government. In addition to the general government function, the
Village provides its residents with public works, public safety (police and fire), parks and
recreation, building, zoning and planning functions, sanitation and stormwater management. The
Village does not provide educational or hospital facilities; those services are provided by the
Miami -Dade County School Board and Miami -Dade County, respectively.
The financial statements of the Village have been prepared in conformity with accounting
principles generally accepted in the United States (GAAP) as applied to governmental units. The
Governmental Accounting Standards Board (GASB) is the accepted standard -setting body for
establishing governmental accounting and financial reporting pnnciples. The more significant of
the Village's accounting policies are described below:
A. Financial Reporting Entity
The financial statements were prepared in accordance with GASB Statements related to The
Financial Reporting Entity, which establishes standards for defining and reporting on the
financial reporting entity. The definition of the financial reporting entity is based upon the
concept that elected officials are accountable to their constituents for their actions. One of
the objectives of financial reporting is to provide users of financial statements with a basis for
assessing the accountability of the elected officials. The financial reporting entity consists of
the Village, organizations for which the Village is financially accountable, and other
organizations for which the nature and significance of their relationship with the Village are
such that exclusion would cause the reporting entity's financial statements to be misleading or
incomplete. The Village is financially accountable for a component unit if it appoints a
voting majority of the organization's governing board and it is able to impose its will on that
organization or there is a potential for the organization to provide specific financial benefits
to, or impose specific financial burdens on, the Village. Based upon the application of these
criteria, there were no organizations that met the criteria described above.
B. Government -Wide and Fund Financial Statements
The government -wide financial statements (i.e., the statement of net assets and the statement
of activities) report information on all of the non -fiduciary activities of the Village. For the
most part, the effect of mterfund activity has been removed from these statements.
Governmental activities, which normally are supported by taxes and intergovernmental
revenues, are reported separately from business -type activities, which rely to a significant
extent on fees and charges for support.
-21-
VILLAGE OF KEY BISCAYNE, FLORIDA
NOTES TO BASIC FINANCIAL STATEMENTS
(Continued)
NOTE 1. SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES (Continued)
B. Government -Wide and Fund Financial Statements (Continued)
The statement of activities demonstrates the degree to which the direct expenses of a given
function or segment are offset by program revenues. Direct expenses are those that are
clearly identifiable with a specific function or segment. Program revenues include 1) charges
to customers or applicants who purchase, use, or directly benefit from goods, services, or
privileges provided by a given function or segment and 2) grants and contributions that are
restricted to meeting the operational or capital requirements of a particular function or
segment. Taxes and other items not properly included among program revenues are reported
instead as general revenues.
Separate financial statements are provided for governmental funds, proprietary funds, and
fiduciary funds, even though the latter are excluded from the government -wide financial
statements. Major individual governmental funds and major individual enterprise funds are
reported as separate columns in the fund financial statements.
C. Measurement Focus, Basis of Accounting, and Financial Statement Presentation
The government -wide financial statements are reported using the economic resources
measurement focus and the accrual basis of accounting, as are the proprietary fund and
fiduciary fund financial statements. Revenues are recorded when earned and expenses are
recorded when a liability is incurred, regardless of the timing of related cash flows. Property
taxes are recognized as revenues in the year for which they are levied. Grants and similar
items are recognized as revenue as soon as all eligibility requirements imposed by the
provider have been met.
Governmental fund financial statements are reported using the current financial resources
measurement focus and the modified accrual basis of accounting. Revenues are recognized
as soon as they are both measurable and available. Revenues are considered to be available
when they are collectible within the current period or soon enough thereafter to pay liabilities
of the current period. For this purpose, the Village considers revenues to be available if they
are collected within 60 days of the end of the current fiscal period. Expenditures are recorded
when a liability is incurred, as under accrual accounting. However, debt service expenditures,
as well as expenditures related to compensated absences and claims and judgments, are
recorded only when payment is due.
Property taxes, franchise fees and other taxes, licenses, and interest associated with the
current fiscal period are all considered to be susceptible to accrual and so have been
recognized as revenues of the current fiscal period. Revenues for expenditure driven grants
are recognized when the qualifying expenditures are incurred. All other revenue items are
considered to be measurable and available only when cash is received by the Village.
VILLAGE OF KEY BISCAYNE, FLORIDA
NOTES TO BASIC FINANCIAL STATEMENTS
(Continued)
NOTE 1. SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES (Continued)
C. Measurement Focus, Basis of Accounting, and Financial Statement Presentation
(Continued)
The Village reports the following major governmental funds:
The General Fund is the Village's primary operating fund. It accounts for all financial
resources of the general government, except those required to be accounted for in another
fund.
The Capital Improvement Fund accounts for the acquisition or construction of various
major capital projects.
The Civic Center Fund accounts for the construction of the Village's civic center which
includes administrative offices, fire and police facilities and a community center.
The Special Revenue Fund accounts for the revenues received from the transportation
surtax and expenditures for related transportation costs.
The Village reports the following major proprietary fund in the basic financial statements:
The Stormwater Utility Fund accounts for the construction and maintenance of the
Village's stoiniwater system.
Additionally, the Village reports the following fund types:
The Pension Trust Fund is used to account for the Village's single -employer defined
benefit pension plan covering substantially all of its police officers and firefighters.
Private -sector standards of accounting and financial reporting issued prior to December 1,
1989, generally are followed in both the government -wide and proprietary fund financial
statements to the extent that those standards do not conflict with or contradict guidance of the
Governmental Accounting Standards Board. The Village has the option of following
subsequent private -sector guidance for their business -type activities and enterprise funds,
subject to this same limitation. The Village has elected not to follow subsequent private -
sector guidance.
As a general rule, the effect of interfund activity has been eliminated from the government -
wide financial statements. Exceptions to this general rule are payments -in -lieu of taxes and
other charges between the Village's various utility functions and various other functions.
Elimination of these charges would distort the direct costs and program revenues reported for
the various functions concerned.
Amounts reported as program revenue include 1) charges to customers or applicants for
goods. services, or privileges provided. 2) operating grants and contributions, and 3) capital
grants and contributions Internally dedicated resources are reported as general revenues
rather than as program revenues Likewise, general revenues include all taxes.
-23-
VILLAGE OF KEY BISCAYNE, FLORIDA
NOTES TO BASIC FINANCIAL STATEMENTS
(Continued)
NOTE 1. SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES (Continued)
C. Measurement Focus, Basis of Accounting, and Financial Statement Presentation
(Continued)
Proprietary funds distinguish operating revenues and expenses from nonoperating items.
Operating revenues and expenses generally result from providing services and producing and
delivering goods in connection with a proprietary fund's principal ongoing operations. The
principal operating revenues of the Village's stormwater utility, solid waste services and
sanitary sewer construction funds are charges to customers for services. Operating expenses
for enterprise funds include the costs of services, administrative expenses, and depreciation
on capital assets. All revenues and expenses not meeting this definition are reported as
nonoperating revenues and expenses.
When both restricted and unrestricted resources are available for use, it is the Village's policy
to use restricted resources first, then unrestricted resources as they are needed.
D. Assets, Liabilities, and Net Assets or Equity
1. Deposits and Investments
The Village's cash and cash equivalents include cash on hand, and certificates of deposit
with original maturities of three months or less from the date of acquisition and
investments with the State Board Investment Pool. The Investment Pool is recorded at its
value of the pool shares (2A-7 Pool) which is fair value. All other investments, including
pension investments, are recorded at fair value. Fair value is determined by quoted market
prices.
2. Receivables and Payables
Activity between funds that are representative of lending/borrowing arrangements
outstanding at the end of the fiscal year are referred to as "due to/from other funds". Any
residual balances outstanding between the governmental activities and business -type
activities are reported in the government -wide financial statements as "internal balances".
3. Capital assets
Capital assets, which include property, plant and equipment, and infrastructure assets (e.g.,
utility plant, roads, bridges, sidewalks, and similar items), are reported in the applicable
governmental or business -type activities columns in the government -wide financial
statements. Capital assets are defined by the Village as assets with an initial, individual
cost of more than $750 and an estimated useful life in excess of one year. Such assets are
recorded at historical cost or estimated historical cost if purchased or constructed.
Donated capital assets are recorded at estimated fair market value at the date of donation.
All infrastructure assets have been capitalized since inception of the Village.
-, A
VILLAGE OF KEY BISCAYNE, FLORIDA
NOTES TO BASIC FINANCIAL STATEMENTS
(Continued)
NOTE 1. SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES (Continued)
D. Assets, Liabilities, and Net Assets or Equity (Continued)
3. Capital assets (Continued)
The costs of normal maintenance and repairs that do not add to the value of the asset or
materially extend asset lives are not capitalized. Major outlays for capital assets and
improvements are capitalized as projects are constructed. Interest incurred during the
construction phase of capital assets of business -type activities is included as part of the
capitalized value of the asset constructed. No such costs were capitalized in 2005.
Capital assets of the Village are depreciated using the straight line method over the
following estimated useful lives:
Assets Years
Buildings 25-50
Improvements other than buildings 10-50
Furniture, fixtures and equipment 10
Stormwater utility system 50
4. Compensated absences
It is the Village's policy to permit employees to accumulate within certain limits, earned
but unused vacation time and sick leave, which will be paid to employees upon separation
from Village service. All vacation and sick leave pay is accrued when incurred in the
government -wide and proprietary fund financial statements. In the governmental funds, a
liability is recorded only for vacation and sick leave payouts for employee separations that
occurred prior to September 30, 2005 and were subsequently paid with current available
financial resources.
5. Long-term obligations
In the government -wide financial statements, and proprietary fund types in the fund
financial statements, long-term debt and other long-term obligations are reported as
liabilities in the applicable governmental activities, business -type activities, or proprietary
fund type statement of net assets. Bond premiums and discounts, as well as issuance costs,
are deferred and amortized over the life of the bonds using the straight-line amortization
method. The results of using this method do not differ significantly from the effective
interest method. Bonds payable are reported net of the applicable bond premium or
discount.
In the fund financial statements, governmental fund types recognize bond premiums and
discounts, as well as bond issuance costs, during the current period. The face amount of
debt issued is reported as other financing sources. Premiums received on debt issuances
VILLAGE OF KEY BISCAYNE, FLORIDA
NOTES TO BASIC FINANCIAL STATEMENTS
(Continued)
NOTE 1. SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES (Continued)
D. Assets, Liabilities, and Net Assets or Equity (Continued)
5. Long -Term Obligations (Continued)
are reported as other financing sources while discounts on debt issuances are reported as
other financing uses. Issuance costs, whether or not withheld from the actual debt
proceeds received, are reported as debt service expenditures.
6. Use of Estimates
The preparation of financial statements in conformity with accounting principles generally
accepted in the United States requires management to make estimates and assumptions that
affect the amounts of assets, liabilities, disclosures of contingent liabilities, revenues and
expenditures/expenses reported in the financial statements and accompanying notes.
These estimates include assessing the collectibility of receivables, the realization of
pension obligations and the useful lives of capital assets. Although these estimates as well
as all estimates are based on management's knowledge of current events and actions it
may undertake in the future, they may ultimately differ from actual results.
7. Fund Equity
In the fund financial statements, governmental funds report reservations of fund balance
for amounts that are not available for appropriation or are legally restricted by outside
parties for use for a specific purpose. Designations of fund balance, where noted,
represent tentative management plans that are subject to change.
NOTE 2. EXPLANATION OF CERTAIN DIFFERENCES BETWEEN THE GOVERNMENTAL
FUND BALANCE SHEET AND THE GOVERNMENT -WIDE STATEMENT OF NET
ASSETS
The governmental fund balance sheet includes a reconciliation between fund balance — total
governmental funds and net assets — governmental activities as reported in the government -wide
statement of net assets. One element of that reconciliation explains that long-teini liabilities,
including bonds payable, are not due and payable in the current period and therefore are not
reported in the funds. The details of this $33,427,735 difference are as follows:
Bonds payable
Debt issuance cost
Capital leases payable
Compensated absences
Accrued interest payable
$ 30,850,606
(23,319)
798,598
1,417,515
384,335
$ 33,427,735
-26-
VILLAGE OF KEY BISCAYNE, FLORIDA
NOTES TO BASIC FINANCIAL STATEMENTS
(Continued)
NOTE 3. EXCESS OF EXPENDITURES OVER APPROPRIATIONS
The classification detail at which expenditures may not legally exceed appropriations is at the
depaitnient level. For the year ended September 30, 2005, expenditures exceeded appropriations
in the Village Attorney department by $83,791, in the Fire Department by $21,967, and in the
Parks and Recreation Depaitinent by $175,964, as presented in the budgetary comparison
schedule following the notes to the basic financial statements. It is the policy of the Village that
all related revenues generated by each department be applied to that department in determining if
any department exceeds its appropriations in total. In applying all related revenues to each
department for fiscal year 2005, it was determined that no function resulted in a deficit situation,
except for the Village Attorney Department.
NOTE 4. DEPOSITS AND INVESTMENTS
In March 2003, the GASB issued Statement No. 40 Deposits and Investment Risks Disclosures
(GASB Statement No. 40), which amends GASB No. 3, Deposits with Financial Institutions,
Investments (including Repurchase Agreements), and Reverse Purchase Agreements and
addresses additional risks to which governments are exposed. GASB 40 is designed to inform
financial statement users about deposit and investment risks that could affect a government's
ability to provide services and meets it obligations as they become due.
GASB 40 addresses common deposit and investment risks related to credit risk, custodial credit
risk, concentration of credit risk, interest rate risk, and foreign currency risk and requires that
deposit and investment policies related to the risks be disclosed, as applicable.
This statement is effective for financial statements for periods beginning after June 15, 2004, and
has been adopted for the fiscal year ended September 30, 2005. The adoption of GASB 40 has
resulted in changes to the form and content of the deposit and investment note to the financial
statements and did not have an impact on the City's financial position and results of operations.
The following disclosures represents the adoption of GASB 40:
Deposits
In addition to insurance provided by the Federal Depository Insurance Corporation, all
deposits are held in banking institutions approved by the State Treasurer of the State of
Florida to hold public funds. Under Florida Statutes Chapter 280, Florida Security for Public
Deposits Act, the State Treasurer requires all Florida qualified public depositories to deposit
with the Treasurer or another banking institution eligible collateral. In the event of a failure
of a qualified public depository, the remaining public depositories would be responsible for
covering any resulting losses. Accordingly, all amounts reported as deposits are insured or
collateralized with securities held by the entity or its agent in the entity's name.
-27-
VILLAGE OF KEY BISCAYNE, FLORIDA
NOTES TO BASIC FINANCIAL STATEMENTS
(Continued)
NOTE 4. DEPOSITS AND INVESTMENTS (Continued)
Investments
The Village is authorized to invest in obligations of the U.S. Treasury, its agencies,
instrumentalities and the Local Government Surplus Funds Trust Fund administered by the State
Board of Administration. The investments follow the investment rules defined in Florida
Statutes Chapter 218.415. The investment policy defined in the statutes attempts to promote,
through state assistance, the maximization of net interest earnings on invested surplus funds of
local units of governments while limiting the risk to which the funds are exposed.
The Local Government Surplus Funds Trust Fund is governed by Ch. 19-7 of the Florida
Administrative Code, which identifies the Rules of the State Board of Administration (SBA).
These rules provide guidance and establish the general operating procedures for the
administration of the Local Government Surplus Funds Trust Fund. Additionally, the Office
of the Auditor General performs the operational audit of the activities and investments of the
State Board of Administration. The Local Government Surplus Funds Trust Fund is not a
registrant with the Securities sand Exchange Commission (SEC); however, the Board has
adopted operating procedures consistent with the requirements for a 2a-7 fund.
Investments — Village
As of September 30, 2005, the Village had the following investments with its corresponding
maturities in its portfolio:
Investment Maturities
(In Years)
Fair Less
Investments Value Than 1
Repurchase agreements $ 3,530,334 $ 3,530,334
Interest Rate Risk
Interest rate risk refers to the portfolio's exposure to fair value losses arising from
increasing interest rates. The Village does not have a formal investment policy that limits
investment maturities as a means of managing its exposure to market value losses arising
from increasing interest rates.
Credit Risk
State law limits investments in bonds, U.S. treasuries and agency obligations, or other
evidences of indebtedness to the top ratings issued by nationally recognized statistical
rating organizations (NRSRO) of the United States. The Village's repurchase agreements
are collateralized by U.S. agency obligations and were all rated AAA under Standard &
Poor's ratings and AAA under Moody's ratings. Excess funds are also sent to the Local
Government Surplus Funds Trust Fund administered by the SBA. The SBA does not have
a rating from a NSRO.
-28-
VILLAGE OF KEY BISCAYNE, FLORIDA
NOTES TO BASIC FINANCIAL STATEMENTS
(Continued)
NOTE 4. DEPOSITS AND INVESTMENTS (Continued)
Investments — Village (Continued)
Concentration of Credit Risk
As of September 30, 2005, the value of each position held in the Village's portfolio
comprised less than 5% of the Village investment assets.
Investments —Pension Plan
As of September 30, 2005, the Village's Defined Benefit Pension Plan had the following
investments with its corresponding maturities in its portfolio:
Investment Maturities (In Years)
Fair Less
Investments Value Than 1 1-5 6-10
Bond mutual funds $1,563,739 $ - $ - $1,563,739
Interest Rate Risk
Interest rate risk refers to the portfolio's exposure to fair value losses arising from
increasing interest rates. The Plan does not have a formal investment policy that limits
investment maturities as a means of managing its exposure to market value losses arising
from increasing interest rates.
Credit Risk
State law and the Plan's investment policy limits investments in bonds, stocks, or other
evidences of indebtedness issued or guaranteed by a corporation organized under the laws
of the United States, any state or organized territory of the United States, or the District of
Columbia, provided the corporation is listed on any one or more of the recognized national
stock exchanges or on the National Market System of the NASDAQ Stock Market and in
the case of bonds only, holds a rating in one of the three highest classifications by a major
rating service. The Plan's investment policy limits fixed income investments to a rating no
lower than Standard & Poor's BBB or Moody's BAA
The Plan's bond mutual funds were all rated "A" or better under Standard & Poor's ratings
and at least "A" under Moody's ratings.
Concentration of Credit Risk
The Plan's investment policy prohibits equity and fixed income securities concentrations
greater than 5% and 10%, respectively, in any one issuer with the exception of U S.
government or agency issues. As of September 30, 2005, the value of each position held
in the Plan's portfolio comprised less than 5% of Plan investment assets
-29-
VILLAGE OF KEY BISCAYNE, FLORIDA
NOTES TO BASIC FINANCIAL STATEMENTS
(Continued)
NOTE 4. DEPOSITS AND INVESTMENTS (Continued)
Risks and Uncertainties
The Plan has investments in a combination of stocks, bonds, government securities and other
investment securities. Investment securities are exposed to various risks, such as interest rate,
market and credit risk. Due to the level of risk associated with certain investment securities
and the level of uncertainty related to changes in the value of investment securities, it is at
least reasonably possible that changes in risks in the near term would materially affect
balances and the amounts reported in the statement of plan net assets and the statement of
changes in plan net assets. The Plan, through its investment advisors, monitors the Plan's
investments and the risks associated therewith on a regular basis, which the Plan believes
minimizes these risks.
NOTE 5. RECEIVABLES
Receivables as of September 30, 2005 for the Village's individual major funds, nonmajor funds
and fiduciary fund in the aggregate, including the allowances for uncollectible accounts, are as
follows:
Storm- Nonmajor Pension
General water Funds Trust Fund Total
Customers billed $ - $129,765 $ 241,595 $ - $ 371,360
Contributions - 464,708 464,708
Property taxes 146,903 - - 146,903
Interest 18,994 18,994
Intergovernmental 940,170 86,500 1,026,670
Other 189,354 - 189,354
Gross receivables 1,276,427 148,759 328,095 464,708 2,217,989
Less allowance for uncollectibles (19,887) - (19,887)
Net total receivables $1,276.427 $148,759 $ 308,208 $464,708 $2,198,102
NOTE 6. 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
-30-
VILLAGE OF KEY BISCAYNE, FLORIDA
NOTES TO BASIC FINANCIAL STATEMENTS
(Continued)
NOTE 6. 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, 2005,
there were no material delinquent taxes.
NOTE 7. INTERFUND RECEIVABLES, PAYABLES, AND TRANSFERS
The composition of interfund balances as of September 30, 2005 is as follows:
Due from/to other funds:
Receivable Fund Payable Fund Amount
General Special revenue $1,136,969
Capital improvement 384,312
Clearing 2,159
Special revenue General Fund 58,989
Civic center 50,000
Stounwater utility General Fund 14,067
Solid waste 400
$1,646,896
The outstanding balances between funds result mainly from the time lag between the dates
that (1) interfund goods and services are provided or reimbursable expenditures occur, (2)
transactions are recorded in the accounting system, and (3) payments between funds are
made.
Interfund transfers:
Transfers In
Capital Nonmajor
Improvement Business -type Total
Transfers out:
General fund
$ 1,245,653 $ 28,135 $ 1,273,788
Transfers are used to move unrestricted general fund revenues to finance various capital
projects in accordance with budgetary authorizations.
-31-
VILLAGE OF KEY BISCAYNE, FLORIDA
NOTES TO BASIC FINANCIAL STATEMENTS
(Continued)
NOTE 8. CAPITAL ASSETS
Capital asset activity for the year ended September 30, 2005 was as follows:
Beginning Ending
Balance Increases Decreases Balance
Governmental activities:
Capital assets, not being depreciated:
Land $21,833,837 $ - $ - $21,833,837
Construction in progress 10,101,484 2,200,636 (10,101,484) 2,200,636
Total capital assets, not being depreciated 31,935,321 2,200,636 (10,101,484) 24,034,473
Capital assets, being depreciated:
Buildings 12, 517,211 11,210,111
Improvements other than buildings 11,269,398 662,903
Furniture, fixtures and equipment 3,419,829 1,149,241
Total capital assets, being depreciated 27,206,438 13,022,255
Less accumulated depreciation for:
Buildings (509,357) (949,092) - (1,458,449)
Improvements other than buildings (2,433,686) (255,890) - (2,689,576)
Furniture, fixtures and equipment (1,665,395) (471,808) 6,077 (2,131,126)
Total accumulated depreciation (4,608,438) (1,676,790) 6,077 (6,279,151)
Total capital assets, being depreciated, net 22,816,006 11,345,465 (41,147) 33,902,318
Governmental activities capital assets, net $54,751,327 $13,546,101 $ (10,142,631) $57,936,791
(47,224)
23,727,322
11,932,301
4,521,846
(47,224) 40,181,469
Business -type activities:
Capital assets, not being depreciated:
Construction in progress
Total capital assets, not being depreciated
Capital assets, being depreciated:
Stormwater utility system
Total capital assets, being depreciated
$ 463,915 $
463,915
$ 463,915
463,915
10,056,660 10,056,660
10,056,660 10,056,660
Less accumulated depreciation for:
Stormwater utility system (1,909,053) (273,919) (2,182,972)
Total accumulated depreciation (1,909,053) (273,919) - (2,182,972)
Total capital assets, being depreciated, net 8,147,607 (273,919) 7,873,688
Business -type activities capital assets, net $ 8,611,522 $ (273,919) $ - $ 8,337,603
-32-
VILLAGE OF KEY BISCAYNE, FLORIDA
NOTES TO BASIC FINANCIAL STATEMENTS
(Continued)
NOTE 8. CAPITAL ASSETS (Continued)
Depreciation expense was charged as functions/programs of the primary government as follows:
Governmental activities:
General government $ 526,243
Police 323,910
Fire 371,815
Public works 5,899
Building, zoning and planning 8,392
Parks 440,531
Total depreciation expenses - governmental activities $1,676,790
Business -type activities:
Stormwater $ 273,919
NOTE 9. LONG-TERM DEBT
The following is a summary of changes in long-term liabilities of the Village for governmental
activities for the year ended September 30, 2005:
Beginning Ending Due Within
Balance Additions Reductions Balance One Year
Governmental Activities
Bonds payable
Land acquisition and capital improvement
revenue bonds, Series 1999 S 9,270,000 S - $ (390,000) S 8,880,000 $ 410,000
Land acquisition and capital improvement
revenue bonds, Series 2000 10,000,000 - (380,000) 9,620,000 400,000
Capital improvement bonds, Series 2002 9,894,892 (394,286) 9,500,606 405,523
Land acquisition and capital improvement
revenue bonds, Series 2004 - 2,800,000 - 2,800,000 144,449
Transportation tax revenue bonds,
Series 2005 - 50,000 50,000 625
Total bonds payable 29,164,892 2,850,000 (1,164,286) 30,850,606 1,360,597
Other liabilities
Capital leases 691,744 (1) 404,471 (297,617) 798,598 214,928
Compensated absences 1,132,403 318,648 (33,536) 1,417,515 141,751
Total other liabilities 1,824,147 723,1 19 (331,153) 2,216,113 356,679
Governmental activities long-term liabilities $30,989,039 $3,573,119 $(1,495,439) $33,066,719 $ 1,717,276
(1) The beginning balance does not agree with the ending balance indicated in the
Comprehensive Annual Financial Report for the fiscal year ended September 30, 2004 as a result
of a prior penod adjustment relating to the capital lease not being recorded in prior year.
_"11_
VILLAGE OF KEY BISCAYNE, FLORIDA
NOTES TO BASIC FINANCIAL STATEMENTS
(Continued)
NOTE 9. LONG-TERM DEBT (Continued)
Land Acquisition and Capital Improvement Revenue Bonds
On July 23, 1999, the Village issued $10,000,000 Land Acquisition and Capital Improvement
Revenue Bonds, Series 1999, the proceeds of which were used for the acquisition of property
and financing of the construction of the Civic Center project. The bonds mature on July 23,
2019. The Village has pledged non -ad valorem revenues to secure payment of the principal
and interest on the bonds. The bonds are due in annual principal installments. Interest
accrues at 4.715% per annum.
Debt service requirements to maturity are as follows:
Principal Interest Total
Fiscal year ending September 30:
2006 $ 410,000 $ 409,026 $ 819,026
2007 430,000 389,223 819,223
2008 455,000 368,359 823,359
2009 475,000 346,435 821,435
2010 500,000 323,449 823,449
2011-2015 2,905,000 2,281,454 5,186,454
2016-2020 3,705,000 453,701 4,158,701
$8,880,000 $4,571,648 $13,451,648
Capital Improvement Revenue Bonds
On July 11, 2000, the Village issued a second series of $10,000,000 Capital Improvement
Revenue Bonds, Series 2000, the proceeds of which were used for the acquisition of property
and financing of the construction of the Civic Center project. The bonds mature on July 11,
2020. The Village has pledged non -ad valorem revenues to secure payment of the principal
and interest on the bonds. The bonds are due in annual principal installments. Interest
accrues at 5.24% per annum.
Debt service requirements to maturity are as follows:
Principal Interest Total
Fiscal year ending September 30:
2006 $ 400,000 $ 493,608 $ 893,608
2007 420,000 472,124 892,124
2008 440,000 449,592 889,592
2009 465,000 425,88E 890,881
2010 490,000 400,860 890,860
2011-2015 2,855,000 1,581,301 4,436,301
2016-2020 3,690,000 728,360 4,418,360
2021 860,000 22,532 882,532
$ 9,620,000 $ 4,574,258 $14,194,258
-34-
VILLAGE OF KEY BISCAYNE, FLORIDA
NOTES TO BASIC FINANCIAL STATEMENTS
(Continued)
NOTE 9. LONG-TERM DEBT (Continued)
Capital Improvement Revenue Bonds (Continued)
On November 1, 2002, the Village issued Capital Improvement Revenue Bonds, Series 2002 for
the purpose of financing a portion of the cost of construction and equipping of a community
center including a parking garage and swimming pool. The bonds mature on November 1, 2022.
Interest is due quarterly at a rate of 3.95% up to November 1, 2012. From November 1, 2012 to
maturity, the interest rate will become a variable rate based on certain indices.
Debt service to maturity is as follows:
Pnncipal Interest Total
Fiscal year ending September 30:
2006 $ 405,523 $ 335,653 $ 741,176
2007 420,279 320,898 741,177
2008 435,571 305,605 741,176
2009 451,420 289,756 741,176
2010 467,860 273,339 741,199
2011-2015 2,607,384 1,098,610 3,705,994
2016-2020 3,117,548 588,447 3,705,995
2021-2022 1,595,021 72,440 1,667,461
$ 9,500,606 $ 3,284,748 $12,785,354
Land Acquisition and Capital Improvement Revenue Bonds
On December 12, 2004, the Village issued $2,800,000 of capital improvement and land
acquisition revenue bonds, Series 2004 for the purpose of completing the road construction
associated with the new administration, fire and community center buildings. The bonds
mature on November 1, 2022. The Village has pledged non -ad valorem revenues to secure
payment of the principal and interest on the bonds. The bonds are due in quarterly principal
installments. Interest accrues at 3.83% per annum.
Debt service requirements to maturity are as follows:
Principal Interest Total
Fiscal year ending September 30:
2006 $ 144,449 $ 103,681 $ 248,130
2007 `120,579 99,206 219,785
2008 125,226 94,559 219,785
2009 130,053 89,732 219,785
2010 135,066 84.719 219.785
2011-2015 757,554 341,371 1,098,925
2016-2020 915,250 183,674 1,098,924
2021-2023 471,823 22.694 494,517
$2,800,000 $1,019,636 $3,819,636
-35-
VILLAGE OF KEY BISCAYNE, FLORIDA
NOTES TO BASIC FINANCIAL STATEMENTS
(Continued)
NOTE 9. LONG-TERM DEBT (Continued)
Transportation Tax Revenue Bonds
On July 15, 2005, the Village issued Transportation Tax Revenue Bonds, Series 2005, for the
purpose of financing a portion of the costs of road improvements within the Village (Crandon
Boulevard Improvements - Phase II). The issuance was established similar to bond
anticipation notes where the principal amount is the lesser of $3,500,000 or the advances
made under the bond. Only the amount advanced becomes an obligation of the Village. The
entire $3,500,000 is expected to be advanced by June 30, 2006. As of September 30, 2005,
$50,000 had been drawn. The bonds mature on July 1, 2025. The bonds are due in quarterly
principal installments. Interest accrues at 4.09% per annum.
Debt service requirements to maturity are as follows:
Principal Interest Total
Fiscal year ending September 30:
2006 $ 625 $ 1,977 $ 2,602
2007 2,500 1,981 4,481
2008 2,500 1,879 4,379
2009 2,500 1,777 4,277
2010 2,500 1,674 4,174
2011-2015 12,500 6,838 19,338
2016-2020 12,500 4,282 16,782
2021-2025 12,500 1,725 14,225
2026 1,875 38 1,913
$ 50,000 $ 22,171 $ 72,171
Capital Leases
On June 16, 2003, the Village entered into a Master Lease agreement, with a local financial
institution as lessee for financing the acquisition of Village vehicles and equipment for the
Fire -Rescue Department with a fair value of $880,963. The amount of the lease obligation is
$691,744 and final payment is due on November 15, 2009. Lease payments are due annually.
Interest accrues at 2.994% per annum.
On December 15, 2004, the Village entered into a Master Lease agreement for financing the
acquisition of Village vehicles and equipment for the Police Department with a fair value of
$378,413. The amount of the lease obligation is $380,726 and final payment is due on
December 15, 2007. Lease payments are due annually. Interest accrues at 3.85% per annum.
On January 10, 2005, the Village entered into a Master Lease agreement for financing the
acquisition of a Village vehicle and equipment for the Police Department with a fair value of
$23,744. The amount of the lease obligation is $23,744 and final payment is due on January
10, 2009. Lease payments are due annually. Interest accrues at 4.20% per annum.
VILLAGE OF KEY BISCAYNE, FLORIDA
NOTES TO BASIC FINANCIAL STATEMENTS
(Continued)
NOTE 9. LONG-TERM DEBT (Continued)
Capital Leases (Continued)
The future minimum lease obligations and the net present value of the minimum lease
payments as of September 30, 2005 were as follows:
Fiscal year ending September 30:
2006 $ 209,781
2007 214,928
2008 214,928
2009 114,287
2010 114,287
Total minimum lease payments 868,211
Less: amount representing interest (69,613)
Present value of minimum lease payments $ 798,598
The following is a summary of changes in long-term liabilities of the Village for business -
type activities for the year ended September 30, 2005:
Due
Beginning Ending Within
Balance Additions Reductions Balance One Year
Business -type Activities
Bonds and loan payable:
Stormwater utility revenue bonds
Revolving loan
Total bonds and loan payable
Business -type activities:
Long-term liabilities
Storm water Utility Revenue Bonds
$ 6,430,000 $ - $ (420,000) $ 6,010,000 $
413,444 - (17,686) 395,758 18,142
6,843,444 - (437,686) 6,405,758 18,142
$ 6,843,444 $ - $ (437,686) $ 6,405,758 $ 18,142
On January 26, 1999, the Village issued $7,200,000 Stormwater Utility Revenue Bonds,
Series 1999, the proceeds of which were used to pay the principal of the $7,200,000 Bond
Anticipation Notes, Series 1995. The bonds mature on January 26, 2019. The Village has
pledged stormwater utility fees to secure payment of the principal and interest on the bonds.
The bonds are due in annual principal installments on October 1st. Interest accrues at 4.13%
per annum.
-37-
VILLAGE OF KEY BISCAYNE, FLORIDA
NOTES TO BASIC FINANCIAL STATEMENTS
(Continued)
NOTE 9. LONG-TERM DEBT (Continued)
Storm water Utility Revenue Bonds (Continued)
Debt service requirements to maturity are as follows:
Principal
Fiscal year ending September 30:
2006
2007
2008
2009
2010
2011-2015
2016-2020
$ - (1) $
225,000
235,000
350,000
365,000
2,125,000
2,710,000
$ 6,010,000
Interest Total
248,213 473,213
238,921 473,921
229,215 579,215
214,760 579,760
831,163 2,956,163
346,714 3,056,714
$ 2,108,985 $ 8,118,985
(1) Debt service requirement for the fiscal year 2006 was paid in 2005.
Revolving Loan
In June 1996, the Village entered into a loan agreement in the amount of $887,983 for the
financing of the planning and engineering of the proposed sanitary sewer construction project
under a State Revolving Fund Loan. The proceeds were received in fiscal year 1998. The
loan is payable in semi-annual payments over 20 years beginning on April 15, 2003 at an
interest rate of 2.56% per annum. The loan matures on October 15, 2022.
Fiscal year ending September 30:
2006
2007
2008
2009
2010
2011-2015
2016-2020
2021-2022
NOTE 10. COMMITMENTS AND CONTINGENCIES
Construction Commitments
Principal Interest Total
$ 18,142
18,609
19,088
19,580
20,084
108,457
123,167
68,631
$ 395,758
$ 9,993
9,525
9,046
8,554
8,050
32,213
17,503
2,622
$ 97,506
$ 28,135
28,134
28,134
28,134
28,134
140,670
140,670
71,253
$ 493,264
As of September 30, 2005, the Village had outstanding construction commitments of
approximately $4,508,000 to complete the Phase II of the Crandon Boulevard project.
-38-
VILLAGE OF KEY BISCAYNE, FLORIDA
NOTES TO BASIC FINANCIAL STATEMENTS
(Continued)
NOTE 10. COMMITMENTS AND CONTINGENCIES (Continued)
Litigation
The Village is involved in several lawsuits incidental to its operations, the outcome of which,
in the opinion of management and legal counsel, would not have a material adverse effect on
the financial condition of the Village.
Risk Management
The Village is exposed to various risks of loss related to torts, theft of, damage to and
destruction of assets, errors and omissions and natural disasters for which the Village carries
commercial insurance. There was no reduction in insurance coverage from coverages in the
prior year and there were no settlements that exceeded insurance coverage for each of the past
three years.
Grants Contingency
Federal and State programs in which the Village participates are subject to audit by grantor
agencies. Any disallowed claims, including amounts already collected, may constitute a
liability of the applicable funds. In the opinion of management, future disallowances of grant
expenditures, if any, would not have a material adverse effect on the financial condition of the
Village.
NOTE 11. RESERVED/DESIGNATED FUND BALANCES
As of September 30, 2005, fund balances in the general fund have been reserved for the
following purposes:
Prepaids $ 204,248
Special disaster relief 13,192
Law enforcement services 326,826
Compensated absences 334,644
Police/Administration building maintenance 25,000
Fire Station building maintenance 25,000
Community Center equipment 50,000
Master Plan initiatives 500,000
Fire vehicle replacements 50,000
Playing fields 456,403
Emergencies 2,489,493
Capital lease 404,471
Working capital 600,000
Inspector fees 275,000
$ 5,754,277
-39-
VILLAGE OF KEY BISCAYNE, FLORIDA
NOTES TO BASIC FINANCIAL STATEMENTS
(Continued)
NOTE 11. RESERVED/DESIGNATED FUND BALANCES (Continued)
The Special Revenue Fund has a deficit fund balance of $638,221 which will be funded from the
General Fund.
NOTE 12. DEFINED CONTRIBUTION PLANS
The Village as a single -employer contributes to the Village of Key Biscayne Money Purchase
Plans, which are defined contribution plans created in accordance with Internal Revenue Code
Section 401(a). Under one Plan, which is available to Village employees, the Village contributes
12% and the employees contribute 6%. Under the second plan, which is available only to sworn
or certified police officers and firefighters, the Village contributes 12% and there is no employee
contribution. Beginning October 1, 1997, the police officers and firefighters, which elected to
participate in the defined benefit pension plan (see Note 13), were no longer eligible to
contribute to the 401(a) plan. Employer contributions for the fiscal year ended September 30,
2005 were $359,900 while the employee contributions were $1 18,404. Amendments to the Plan
must be authorized by the Village Council.
NOTE 13. DEFINED BENEFIT PENSION PLAN
Plan Description
Effective October 1, 1997, the Village established a single -employer Public Employee
Retirement System (PERS) to provide pension benefits for its police officers and firefighters.
The PERS is considered to be part of the Village's financial reporting entity and is included in
the Village's financial reports as a pension trust fund. The Plan was created under Village
Ordinance 97-21. The latest available actuarial valuation is as of October 1, 2004. The PERS
does not issue a stand-alone financial report for the Plan.
Under this plan, all full-time police officers and firefighters employed by the Village are
eligible to participate. The monthly retirement benefit is equal to 3% of the average final
compensation for each year of service. The calculation for the average final compensation is
computed as one -twelfth of the average salary of the five highest years within the last ten
years of credited service. Credited service is determined by the total number of years
employed by the Village since August 1, 1993. Amendments to the Plan must be authorized
by the Village Council.
Members are vested after 5 years of service. Vested employees may retire at the earlier of age
55 and the completion of five years of credited service or the age of 52 and the completion of
25 years of credited service.
Administrative costs of the plan are financed through investment earnings. Benefits are
recorded when paid.
-40-
VILLAGE OF KEY BISCAYNE, FLORIDA
NOTES TO BASIC FINANCIAL STATEMENTS
(Continued)
NOTE 13. DEFINED BENEFIT PENSION PLAN (Continued)
Plan Description (Continued)
At October 1, 2004 (date of the latest actuarial valuation), Plan membership consisted of the
following:
Retirees and beneficiaries currently receiving benefits and terminated employees
entitled to benefits but not yet receiving them
11
Current employees:
Vested 29
Non -vested 37
Total 66
Funding Policy
The Village's contribution rate is adjusted each year to an amount equal to the total pension
cost for the year, as determined by the most recent actuarial valuation, less the amount of
revenue received from the State of Florida pursuant to Chapters 175 and 185 of the Florida
Statutes. The participant contribution rate for the year ended September 20, 2005 was 10.5%.
The minimum participant contribution rate is 9% of base salary. This funding policy is
designed to limit the Village's exposure to contribute to the Plan.
Annual Pension Cost and Net Pension Obligation
The annual pension cost and net pension obligation (asset) for the current year was as
follows:
Annual required contribution
Interest on net pension obligation (asset)
Adjustment to annual required contribution
Annual pension cost
Contributions made
Increase in net pension obligation (asset)
Net pension obligation (asset), beginning of year
Net pension obligation (asset), end of year
$ 596,741
(13,495)
17,806
601,052
626.134
(25,082)
(382,317)
$ (407,399)
-41-
VILLAGE OF KEY BISCAYNE, FLORIDA
NOTES TO BASIC FINANCIAL STATEMENTS
(Continued)
NOTE 13. DEFINED BENEFIT PENSION PLAN (Continued)
Annual Pension Cost and Net Pension Obligation (Continued)
The annual required contribution for the current year was determined as part of the October 1,
2004 actuanal 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 of 6% per year. Both (a) and
(b) included an inflation component of 4%. The actuanal value of assets was determined
using the difference between actual and expected return recognized over five years.
Trend Information
Annual Percentage Net Pension
Fiscal Year Pension of APC Obligation
Ended Cost (APC) Contributed (Asset)
9/30/2003 $ 465,562 129.0% $ (325,867)
9/30/2004 517,715 110.9% (382,317)
9/30/2005 601,052 104.2% (407,399)
NOTE 14. PRIOR PERIOD ADJUSTMENT
The Village entered into a Master Lease Agreement (a capital lease) for financing the acquisition
of vehicles and equipment for the Fire -Rescue Department in fiscal year 2003 which was not
recorded. Accordingly, a prior period adjustment in the amount of $691,744 was recorded to
reflect this capital lease obligation. The Statement of Activities reflects the restatement of
beginning net assets that would have been reported had the transaction been recorded in the
proper period. The Statement of Revenues, Expenditures, and Changes in Fund Balance —
Governmental Funds is not affected by the prior period adjustment as debt obligations are not
reported in governmental funds.
-42-
REQUIRED SUPPLEMENTARY INFORMATION
VILLAGE OF KEY BISCAYNE, FLORIDA
REQUIRED SUPPLEMENTARY INFORMATION
BUDGETARY COMPARISON SCHEDULE
GENERAL FUND
FISCAL YEAR ENDED SEPTEMBER 30, 2005
Revenues:
Property taxes
Utility taxes
Franchise fees
Licenses and permits
Intergovernmental
Charges for services
Grants
Interest
Total revenues
Expenditures:
Current:
General government:
Elected officials
Village Clerk
Administration
Village Attorney
Total general government
Public safety:
Police
Fire
Total public safety
Public works
Building, zoning and planning
Parks and recreation
Debt service:
Principal
Interest and fiscal charges
Total expenditures
Excess (deficiency) of revenues over expenditures
Other financing uses:
Appropriation of prior years' fund balance
Transfers out
Total other financing uses
Net change in fund balances
Budgeted Amounts
Original Final
$ 13,275,737
2,122,500
688,600
964,922
997,500
1,048,245
7,500
58,000
19,163,004
$ 13,275,737
2,122,500
688,600
964,922
997,500
1,048,245
7,500
58,000
19,163,004
Variance
with Final
Budget -
Actual Positive
Amounts (Negative)
$ 13,360,251 $ 84,514
2,234,402 111,902
705,810 17,210
1,040,130 75,208
1,140,599 143,099
1,867,362 819,117
650,679 643,179
240,779 182,779
21,240,012 2,077,008
222,383 222,383 222,383
344,699 344,699 299,129 45,570
1,232,400 1,232,400 1,198,071 34,329
333,000 333,000 416,791 (83,791)
2,132,482 2,132,482 2,136,374 (3,892)
4,238,184 4,238,184 4,200,677 37,507
4,727,440 4,727,440 4,749,407 (21,967)
8,965,624 8,965,624 8,950,084 15,540
2,181,657 2,181,657 2,183,774 (2,117)
1,322,119 1,322,119 1,238,376 83,743
2,017,669 2,017,669 2,193,633 (175,964)
1,179,198 1,179,198 1,161,298 17,900
1,400,593 1,400,593 1,300,596 99,997
19,199,342 19,199,342 19,164,135 35,207
(36,338)
1,086,338
(1,050,000)
(36,338) 2,075,877 2,112,215
1,086.338
(1,050,000)
36,338 36,338
$
- (1,086,338)
(1,273,788) (223,788)
(1,273,788) (1,310,126)
$ - $ 802,089 $ 802,089
See note to budgetary comparison schedule.
-43-
VILLAGE OF KEY BISCAYNE, FLORIDA
REQUIRED SUPPLEMENTARY INFORMATION
NOTE TO BUDGETARY COMPARISON SCHEDULE
FISCAL YEAR ENDED SEPTEMBER 30, 2005
NOTE 1. 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.
(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,
2005, 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 and for hurricane related expenditures.
(g) The Village Manager is authorized to transfer part or all of an encumbered appropriation
balance within departments within a fund; however, any revisions that alter the total
appropriations of any department or fund must be approved by the Village Council.
(h) There were no budget amendments during fiscal year ended September 30, 2005.
(i) Excess of expenditures over appropriations are described in the notes to the basic financial
statements.
(j) The original and final budgeted amounts include prior year appropriations which were
reserved but not reappropriated during the current year.
VILLAGE OF KEY BISCAYNE, FLORIDA
REQUIRED SUPPLEMENTARY INFORMATION
PENSION TRUST FUND
SCHEDULE OF EMPLOYER CONTRIBUTIONS
Year Annual
Ended Required Percentage
September 30, Contribution Contributed
2000 $ 2,626 0%
2001 45.199 296%
2002 377,777 88%
2003 465,562 100%
2004 515,437 l 11%
2005 596,741 99%
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. Since the Plan uses the aggregate actuarial cost method, a schedule of
funding progress is not required and has not been provided.
Valuation date 10/1/04
Actuarial cost method Aggregate
Amortization method N/A
Remaining amortization N/A
Asset valuation method 5 year Smoothed 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%
-45-
COMBINING STATEMENTS
NONMAJOR 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.
■ 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
COMBINING BALANCE SHEET
NONMAJOR ENTERPRISE FUNDS
SEPTEMBER 30, 2005
Total
Sanitary Nonmajor
Solid Sewer Enterprise
Waste Construction Funds
ASSETS
Current assets:
Cash and cash equivalents
Accounts receivables, net
Total current assets
Noncurrent assets:
Capital assets not being depreciated
125,135 $
221,708
346,843
- $ 125,135
- 221,708
346,843
463,915 463,915
Total noncurrent assets - 463,915 463,915
Total assets 346,843 463,915 810,758
LIABILITIES
Current liabilities:
Accounts payable and accrued liabilities 42,834 4,652 47,486
Due to other fund 400 400
Deferred revenues 6,932 - 6,932
Current portion of revolving loan 18,142 18,142
Total current liabilities 50,166 22,794 72,960
Noncurrent liabilities:
Revolving loan - 377,617 377,617
Total liabilities 50,166 400,411 450,577
NET ASSETS
Invested in capital assets, net of related debt - 68,156 68,156
Unrestricted (deficit) 296,677 (4,651) 292,026
Total net assets $ 296,677 $ 63,505 $ 360,182
-46-
VILLAGE OF KEY BISCAYNE, FLORIDA
COMBINING STATEMENTS OF REVENUES, EXPENSES AND CHANGES IN NET ASSETS
NONMAJOR ENTERPRISE FUNDS
FISCAL YEAR ENDED SEPTEMBER 30, 2005
Total
Sanitary Nonmajor
Solid Sewer Enterprise
Waste Construction Funds
Operating revenues:
Charges for services
$ 533,632 $ - $ 533,632
Operating expenses:
General and administrative 466,162 - 466,162
Operating income
Non -operating revenues (expense):
Interest income
Interest expense
Total non -operating revenues (expenses)
Income (loss) before transfers
Transfers in
Change in net assets
Net assets, beginning
Net assets, ending
67,470 67,470
8,302 - 8,302
(10,261) (10,261)
8,302 (10,261) (1,959)
75,772 (10,261) 65,511
28,135 28,135
75,772 17,874 93,646
220,905 45,631 266,536
$ 296,677 $ 63,505 $ 360,182
-47-
VILLAGE OF KEY BISCAYNE, FLORIDA
COMBINING STATEMENTS OF CASH FLOWS
NONMAJOR ENTERPRISE FUNDS
FISCAL YEAR ENDED SEPTEMBER 30, 2005
Cash flows from operating activities:
Receipts from customers and users
Payments to suppliers
Net cash provided (used) by operating activities
Cash flows from non -capital financing activities:
Transfers from other funds
Cash flows from capital and relating financing activities:
Net payments from revolving loan
Interest paid
Net cash used by capital and related
financing activities
Cash flows from investing activities:
Interest received
Net cash provided by investing activities
Net increase in cash and cash equivalents
Cash and cash equivalents, beginning
Cash and cash equivalents, ending
Reconciliation of operating income to net cash
provided (used) by operating activities:
Operating income
Adjustments to reconcile operating income to
net cash provided (used) by operating activities.
Changes in operating assets and liabilities:
(Increase) decrease in:
Accounts receivable
Due from other funds
Increase (decrease) in:
Accounts payable
Due to other funds
Deferred revenues
Total adjustments
Net cash provided (used) by operating activities
Solid
Waste
Sanitary
Sewer
Construction
Total
Nonmaj or
Enterprise
Funds
$ 503,128 $ - $ 503,128
(466,161) (188) (466,349)
36,967 (188) 36,779
8,300
8,300
45,267
79,868
28,135 28,135
(17,686)
(10,261)
(17,686)
(10,261)
(27,947) (27,947)
S 125,135 $
8,300
8,300
45,267
79,868
- $ 125,135
67,470 $ - $ 67,470
(104,630)
24,011
42,782
400
6,933
(104,630)
24,011
(187) 42,595
400
6,933
(30,504) (187) (30,691)
$ 36,966 $ (187) $ 36,779
-48-
_
STATISTICAL SECTION
VILLAGE OF KEY BISCAYNE, FLORIDA
GOVERNMENT -WIDE EXPENSES BY FUNCTION
LAST TEN FISCAL YEARS
Governmental Activities Business -type Activities
Building, Interest
Parks Zoning on
Fiscal General Public and and Long -Term Solid Sanitary
Year Government Works Police Fire Recreation Planning Debt Stormwater Waste Sewer Total
2003 $5,691,379 $ 963,676 $4,787,090 $4,821,645 $ 826,695 $1,252,012 $1,064,028 $ 634,361 $273,076 $6,288 $20,320,250
2004 3,614,636 1,103,940 4,31 1,449 4,738,402 1,013,741 1,220,180 1,487,245 971,081 259,173 15,732 18,735,579
2005 2,914,734 2,189,673 4,373,145 4,867,525 2,614,785 1,235,175 1,305,383 454,963 466,162 10,261 20,431,806
(1) Info'illation for fiscal yeas end 1994 - 2002 is unavailable in this format.
-49-
VILLAGE OF KEY BISCAYNE, FLORIDA
GOVERNMENT -WIDE REVENUES
LAST TEN FISCAL YEARS (I )
Program Revenues
Charges
Fiscal for
Year Services
2003 $2,142,380
2004 2,092,720
2005 3,959,936
Operating
Grants and
Contributions
$ 99,830
650,679
Capital
Grants and
Contributions
$ 421,085
524,736
517,643
General Revenues
Taxes
(2)
$14,957,408
16,488,915
17,278,767
(I) Information for fiscal year end 1994 - 2002 is unavailable in this format.
Unrestricted
Investment
Earnings
$ 104,449
131,797
296,661
(2) Includes property taxes, utility taxes, franchise fees and intergovernmental revenue.
-50-
Miscellaneous
$ 200,561
126,947
281,657
Total
$ 17,925,713
19,365,115
22,985,343
VILLAGE OF KEY BISCAYNE, FLORIDA
GENERAL GOVERNMENTAL EXPENDITURES BY FUNCTION
LAST TEN FISCAL YEARS
Fiscal General Public Parks and Public
Year Government Safety Recreation Works Total
1995 $5,524,305 $ 4,294,606 $ 211,159 $ 573,844 $10,603,914
1996 3,124,384 4,634,385 234,154 753,823 8,746,746
1997 3,577,170 5,017,882 239,029 660,780 9,494,861
1998 3,671,970 5,278,315 255,704 828,287 10,034,276
1999 4,173,995 5,644,903 293,664 730,521 10,843,083
2000 4,795,894 6,068,147 380,502 830,360 12,074,903
2001 5,015,845 6,172,932 452,804 933,096 12,574,677
2002 6,230,222 6,926,254 539,058 802,218 14,497,7.52
2003 5,550,648 8,351,743 782,065 963.247 15,647,703
2004 5,616,810 8,576,547 952,261 1,098,250 16,243,868
2005 5,836,645 9,354,555 2.193,633 2,183,774 19,568,607
Note: Includes general fund only (GAAP basis).
Note. General government includes economic development, building, zoning and planning, debt service.
capital outlay and non -departmental expenditures.
-51-
VILLAGE OF KEY BISCAYNE, FLORIDA
GENERAL GOVERNMENTAL REVENUES BY SOURCE
LAST TEN FISCAL YEARS
Licenses
Fiscal Property and Inter- Utility Franchise
Year Taxes Permits Governmental Taxes Fees Other (1) Interest Total
1996 $ 6,486,019 $ 430,208 $ 791,403 $ 1,294,486 $ 638,096 $1,495,521 $ 280,570 $ 11,416,303
1997 6,495,465 531,401 766,638 1,555,812 667,815 463,171 248,646 10,728,948
1998 6,963,900 1,003,768 843,812 1,514,697 709,067 392,975 233,654 11,661,873
1999 7,012,714 668,672 807,924 1,621,473 740,031 1,295,001 231,820 12,377,635
2000 7,799,633 1,316,641 889,704 1,723,902 729,998 348,552 315,959 13,124,389
2001 8,738,608 1,308,229 930,169 1,772,208 738,513 736,881 291,408 14,516,016
2002 9,569,030 859,435 971,136 2,258,931 639,072 608,012 89,838 14,995,454
2003 11,317,161 970,001 999,391 2,251,876 611,502 427,553 55,129 16,632,613
2004 12,770,711 961,100 1,031,805 2,219,118 677,203 325,651 90,294 18,075,882
2005 13,360,251 1,040,130 1,140,599 2,234,402 705,810 1,867,362 891,458 21,240,012
Note: Includes general fund only (GAAP basis).
(1) Includes charges for services, grants, contributions and other.
-52-
VILLAGE OF KEY BISCAYNE, FLORIDA
UTILITY TAX REVENUE BY SOURCE
LAST TEN FISCAL YEARS
Fiscal
Year
Telecom -
Electricity nunications
1996 $ 888,651 S 199,746
1997 1,032,445 274,768
1998 989,535 288,581
1999 992,319 380,934
2000 1,000,553 454,101
2001 1,018,973 492,442
2002 1,097,566 904,475
2003 1,162,030 825,739
2004 1,123,288
2005 1,160,977 -
Fiscal
Year
1996
1997
1998
1999
2000
2001
2002
2003
2004
2005
Fuel
Gas Oil Water Total
S 37,034 S 3,885 5 165,169 $ 1,294,485
42,066 3,616 202,918 1,555,813
36,427 3,883 196,271 1,514,697
35,121 4,262 208,837 1,621,473
52,016 2,169 215,063 1,723,902
62,833 245 197,715 1,772,208
(i) 52,360 318 203,612 2,258,331
61,137 486 202,394 2,251,786
75,466 80 249,647 1,448,481
83,057 53 243,914 1,488,001
FRANCHISE FEE REVENUE BY SOURCE
LAST TEN FISCAL YEARS
Cable
Electricity Television
$ 571,093
578,195
631,323
653,799
646,000
678,316
639,072
611,502
677,203
702,735
$ 46,824
62,342
53,728
56,997
59,548
67,855
(1)
Telephone
S 20,179
27,277
24,016
29,235
24,450
37,342
Total
$638,096
667,814
709,067
740,031
729,998
783,513
(1) 639,072
611,502
677,203
702,735
(1) Simplified communications services tax effective October 1, 2001 replaced the utility tax and
franchise fees on telecommunications and cable television
-53-
VILLAGE OF KEY BISCAYNE, FLORIDA
PROPERTY TAX LEVIES AND COLLECTIONS
LAST TEN FISCAL YEARS
Tax Fiscal Assessed Tax Total Percent
Year" Year Value Levy Collected(2) Collected
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 6,49.5,465 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%
2000 2001 2,499,049,161 9,011,571 8,738,608 97.0%
2001 2002 2,731,833,645 9,850,992 9,515,138 96.6%
2002 2003 3,259,919,981 11,755,271 11,317,160 96.3%
2003 2004 3,661,114,546 13,201,979 12,869,711 97.5%
2004 2005 3,875,335,514 13,974,460 13,360,251 95.6%
(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.
(2) Collections reflect timely payment discounts of up to 4% and other adjustments.
-54
VILLAGE OF KEY BISCAYNE, FLORIDA
ASSESSED AND ESTIMATED ACTUAL VALUE OF TAXABLE PROPERTY
LAST TEN FISCAL YEARS
Net
Assessed
Tax Real Personal Property
Year Property Property Value
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
2001 2,701,084,167 30,749,478 2,731,833,645
2002 3,227,971,184 31,948,797 3,259,919,981
2003 3,617,880,990 43,233,556 3,661,114,546
2004 3,831,467,688 43,867,688 3,875,335,376
2005 4,245,822,028 41,852,920 4,287,674,948
Source: Miami -Dade County Property Appraiser's Office
Note: Assessed values equal the estimated actual value.
-55-
VILLAGE OF KEY BISCAYNE, FLORIDA
PROPERTY TAX RATES
DIRECT AND OVERLAPPING GOVERNMENTS
LAST TEN FISCAL YEARS
Village of
Key Biscayne
Fiscal Village
Year Millage
Miami -Dade County
Debt Total
Operating Service County
Millage Millage Millage
1996 3.606 6.469
1997 3.606 6.023
1998 3.606 6.023
1999 3.606 5.809
2000 3.606 5.751
2001 3.606 5.713
2002 3.606 5.889
2003 3.606 5.969
2004 3.606 5.935
2005 3.606 5.835
0.774 7.243
0.929 6.952
0.837 6.860
0.816 6.625
0.652 6.403
0.552 6.265
0.390 6.279
0.285 6.254
0.285 6.220
0.285 6.120
Source: Miami -Dade County Property Appraiser's Office
State
Total
SFWMD FIND State
Millage Millage Millage
School District
Debt Total
Operating Service School
Millage Millage Millage Other Total
0.572 0.038 0.610 9.356 1.010 10.366 0.439 22.264
0.597 0.050 0.647
0.597 0.047 0.644
0.597 0.044 0.641
0.597 0.041 0.638
0.697 0.039 0.736
0.697 0.039 0.736
0.597 0.039 0.636
0.597 0.039 0.636
0.597 0.039 0.636
-56-
9.356 1.106 10.462 0.416 22.083
9.182 0.978 10.160 0.434 21.704
8.654 0.990 9.644 0.421 20.937
8.702 0.915 9.617 0.451 20.715
8.528 0.848 9.376 0.451 20.434
8.482 0.770 9.252 0.451 20.324
8.418 0.682 9.100 1.086 20.682
8.090 0.597 8.687 1.030 20.179
7.947 0.491 8.438 1.014 19.814
VILLAGE OF KEY BISCAYNE, FLORIDA
RATIO OF ANNUAL DEBT SERVICE EXPENDITURES FOR NET
BONDED DEBT TO GENERAL GOVERNMENTAL EXPENDITURES
LAST TEN FISCAL YEARS
Ratio of Debt
Total Service to
Total General General
Fiscal Debt Governmental Governmental
Year Principal Interest (1) Service (2) Expenditures Expenditures
1996 $ 785,000 $ 351,089 $1,136,089 $ 8,746.746 13.0%
1997 820,000 315,901 1,135,901 9,494,861 12.0%
1998 855,000 277,825 1,132,825 10,034,276 11.3%
1999 895,000 241,329 1.136,329 10,843,083 10.5%
2000 935,000 595,767 1,_5 30,767 12,074,903 12.7%
2001 975,000 631,875 1,606,875 12,574,677 12.8%
2002 1,015,000 1,420,845 2,435,845 14,497,752 16.8%
2003 1,415,000 590,737 2,005,737 15,647,703 12.8%
2004 1,583,924 1,107,696 2,691,620 16,143,204 16.7%
2005 1,161,298 1,300,596 2,461,894 19,522,481 12.6%
Note. Includes general fund only.
(1) Excludes bond issuance and other costs
(2) Debt service on revenue bonds
-57-
VILLAGE OF KEY BISCAYNE, FLORIDA
SCHEDULE OF DIRECT AND OVERLAPPING BONDED DEBT
GENERAL OBLIGATION BONDS
(IN THOUSANDS)
SEPTEMBER 30, 2005
Jurisdiction
Direct:
Village of Key Biscayne
Overlapping,::
Miami -Dade County
Miami -Dade County Schools
Net
General Percentage Amount
Obligation Applicable Applicable
Taxable Bonded to to
Property Debt Key Key
Value (1) Outstanding Biscayne Biscayne
$ 3,875,335 $ 30,800 100.00% $ 30,800
130,106,101 $ 147,593 (2) 2.98% (3) $ 4,396
131,120,085 127,196 (2) 2.96% (3) 3,759
$ 274,789 $ 8,155
(1) Source: Miami -Dade County Property Appraiser's Office - Taxable Property Value reflects
January 1, 2005 amounts.
(2) Source: Miami -Dade County Finance Depaititient - Net General Obligation Bonded Debt
outstanding figures are as of September 30, 2005.
(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.
-58-
VILLAGE OF KEY BISCAYNE, FLORIDA
RATIO OF NET BONDED DEBT
TO ASSESSED VALUE AND PER CAPITA
LAST TEN FISCAL YEARS
Ratio
of Net Net
Bonded Bonded
Net Debt to Debt
Fiscal Assessed Bonded Assessed Per
Year Population Value (1) Debt (2) Value Capita
1996 8,886 $1,767,457,005 $7,660,000 0.43% $ 862
1997 8,937 1,861,243,132 6,840,000 0.37% 765
1998 9,471 2,003,049,232 5,985,000 0.30% 632
1999 9,689 2,028,174,208 22,290,000 1.10% 2,300
2000 10,507 2,223,956,515 21,220,000 0.95% 2,190
2001 10,607 2,499,049,161 30,120,000 1.21% 7,8-'3
2002 10,698 2,731,833,645 29,935,000 1.10% 2,798
2003 11,100 3,259,919,981 29,271,000 0.90% 2,637
2004 11,100 (3) 3,661,114,546 29,164,892 0.80% 2,627
2005 11,100 3,875,335,376 30,850,606 0.80% 2,779
(1) Net bonded assessed actual value of taxable property
(2) Net bonded debt represents revenue bonds
(3) Estimated
-59-
VILLAGE OF KEY BISCAYNE, FLORIDA
REVENUE BOND COVERAGE
STORMWATER REVENUE BONDS (SERIES 1999)
LAST TEN FISCAL YEARS
Net
Revenue
Gross Available
Stormwater for Debt Service Requirements
Fiscal Fee Operating Debt
Year Revenue Expenses Service Principal Interest Total Coverage
1999 $ 480,586 $ 42,773 $ 437,813 $ - $ 335,412 $ 335,412 130.53%
2000 494,955 33,453 461,502 135,000 281,875 416,875 110.71%
2001 518,961 79,708 439,253 125,000 291,622 416,622 105.43%
2002 559,239 85,091 474,148 130,000 336,253 466,253 101.69%
2003 551,774 86,829 464,945 195,000 273,613 468,613 99.22%
2004 520,858 165,315 355,543 205,000 265,559 470,559 75.56%
2005 551,560 181,044 370,516 215,000 257,092 472,092 78.48%
(1) Stormwater debt was issued in fiscal year 1999
-60-
VILLAGE OF KEY BISCAYNE, FLORIDA
DEMOGRAPHICS STATISTICS
POPULATION
Estimates of Population by Age
Year
2000
Estimates of Population by Race
2000
INCOME*
Average Hosehold Income
2000
UNEMPLOYMENT RATES (Percent)
Miami -Dade County*
Village of Key Biscayne
* Source: U.S. Census Bureau.
Under 20 Years 20 to 64 Years 65 Years or Older
Number Percent Number Percent Number Percent Total
906 8.6 7,964 75.8 1,637 15.6 10,507
Anglo Black Hispanic Total
5,058 28 5,231 10,317
Average
Per
Household
$ 86,241
1996 1997 1998 1999 2000 2001 2002 2003 2004 2005
7.8 7.1 6.7 5.9 5.6 5.7 7.4 7.3 5.0 3.9
3.6 3.3 3.1 2.7 2.6 2.8 3.2 3.2 2.9 3.9
-61-
VILLAGE OF KEY BISCAYNE, F LORIDA
PROPERTY VALUE, CONSTRUCTION AND BANK DEPOSITS
LAST TEN FISCAL YEARS
Residential Commercial (000s Omitted)
Total Total County Village
Fiscal Permits # of # of of Bank Bank
Year Issued Permits Valuation Permits Valuation Constriction Deposits (1) (2) Deposits (2.1
1995 2,857 2,568 $33,820,503 289 $ 2,099,661 $35,920,164 $ 17,938,762 (1) $
1996 3,171 3,060 65,318,655 111 1,231,097 66,549,752 14,561,654 (1) -
1997 3,570 3,402 82,481,700 168 667,328 83,149,028 34,664,829 (1) -
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
2001 749 667 59,607,528 82 10,485,477 70,093,005 45,064,000 328,602
2002 856 769 23,206,296 87 1,101,721 24,308,017 51,297,000 311,837
2003 1,324 1,178 22,695,672 146 12,454,140 35,149,812 56,263,926 328,303
2004 452 419 16,601,825 33 3,444,057 20,045,882 62,368,000 377,855
2005 469 441 20,250,641 28 5,014,006 25,264,647 70,221,796 439,706
(1) State of Florida, Division of Financial Services, as of June 30 of each respective year.
Information is for Miami -Dade County, which the Village of Key Biscayne was a part of
(2) Deposits within Village of Key Biscayne limits. Information for all years presented was
not available from Federal Deposit Insurance Corporation
-62-
VILLAGE OF KEY BISCAYNE, FLORIDA
PRINCIPAL TAXPAYERS
SEPTEMBER 30, 2005
Taxpayer
Sonesta Beach Resort, LP
GB Hotel Partners, Ltd.
United Real Estate Ventures
Galleria of Key Biscayne, Inc.
Ocean Club Community Association
Red Dragon Sands, LTD
Sidney W Witter
Claudio and Yvonne Alvarez
Aurelio and Berta Fernandez
Roger & Susana Khouri
Source: Miami -Dade County Appraiser's Office
Taxable
Valuation
$ 42,737,620
30,800,000
20,273,758
12,798,725
12,500,000
11,858,160
10,689,702
8,933,819
7,585,429
7,218,458
$ 165,395,671
% of
Total
Assessed
Valuation
1.10%
0.79%
0.52%
0.33%
0.32%
0.31%
0.28%
0.23%
0.20%
0.19%
4.27%
-63-
VILLAGE OF KEY BISCAYNE, FLORIDA
MISCELLANEOUS STATISTICAL DATA
SEPTEMBER 30, 2005
Date of Incorporation 1991
Form of Government Council -Manager
Area L25 Square Miles
Miles of Street 22.4 Linear Miles
Fire Protection:
Number of Stations 1
Police Protection:
Number of Stations 1
Education:
Attendance Centers 2
Number of Students 1,442
Number of Teachers 110
Miami -Dade County Water & Sewer Authority
Number of Customers
Average Daily Consumption
1,771
3,018,384 gallons
Sewers:
Number of Customers 1,023
Fire Hydrants 249
Building Permits Issued 469
Recreation and Culture:
Number of Parks 3
Number of Libraries I (Operated by Miami -Dade County)
Number of Tennis Centers I
Number of Recreational Centers 1
Employees:
Full Time
103
-64-
COMPLIANCE SECTION
Cohen
&Holt. -
Accountants Advisors
Report of Independent Certified Public Accountants on Internal Control Over
Financial Reporting and on Compliance and Other Matters Based on an Audit of
Financial Statements Performed in Accordance with Government Auditint Standards
Honorable Mayor, Village Council and Village Manager
Village of Key Biscayne, Florida
We have audited the financial statements of the governmental activities, the business -type activities, each
major fund, and the aggregate remaining fund information of the Village of Key Biscayne, Florida (the
Village) as of September 30, 2005 and for the year then ended which collectively comprise the Village's
basic financial statements, and have issued our report dated April 14, 2006. We conducted our audit in
accordance with auditing standards generally accepted in the United States and the standards applicable to
financial audits contained in Government Auditing Standards, issued by the Comptroller General of the
United States.
Internal Control over Financial Reporting
In planning and performing our audit, we considered the Village's internal control over financial reporting in
order to determine our auditing procedures for the purpose of expressing our opinions on the basic financial
statements and not to provide an opinion 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 reportable
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 caused by error or fraud 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. However, we noted one matter that we have reported to management in the schedule of
findings and questioned costs accompanying this report.
Compliance and Other Matters
As part of obtaining reasonable assurance about whether the Village's basic financial statements are free of
material misstatement, we performed tests of its compliance with certain provisions of laws, regulations,
contracts and grant agreements, noncompliance with which could have a direct and material effect on the
determination of financial statement amounts. However, providing an opinion on compliance with those
provisions was not an objective of our audit and, accordingly, we do not express such an opinion. The
results of our tests disclosed no instances of noncompliance that are required to be reported under
Government Auditing Standards.
-65-
Rachlin Cohen & Holtz Lip
One Southeast Third Avenue • Tenth Floor • Miami, Florida 33131 • Phone 305.377.4228 • Fax 305 377.8331 • www.rachlin.com
An Independent Member of Baker Tilly International
Honorable Mayor, Village Council and Village Manager
Village of Key Biscayne, Florida
Page Two
This report is intended solely for the infouuiation and use of the Mayor, Village Council, management
and regulatory agencies and is not intended to be and should not be used by anyone other than these
specified parties.
dotA,.. /24/-# 4A -P
Miami, Florida
April 14, 2006
-66-
Cohen
&Holtz
Cohen
&Holtz
Accountants Advisors
Management Letter in Accordance with the Rules of the Auditor General of the State of Florida
Honorable Mayor, Village Council and Village Manager
Village of Key Biscayne, Florida
We have audited the financial statements of the governmental activities, the business -type activities, each
major fund, and the aggregate remaining fund information of the Village of Key Biscayne, Flonda (the
Village) as of and for the year ended September 30, 2005 which collectively comprise the Village's basic
financial statements, and have issued our report thereon dated April 14, 2006.
We conducted our audit in accordance with auditing standards generally accepted in the United States
and the standards applicable to financial audits contained in Government Auditing Standards, issued by
the Comptroller General of the United States; and OMB Circular A-133, Audits of States, Local
Governments, and Non -Profit Organizations. We have issued our Report of Independent Certified
Public Accountants on Internal Control over Financial Reporting and on Compliance and Other Matters
Based on an Audit of Financial Statements and our Report of Independent Certified Public Accountants
on Compliance and Internal Control over Compliance Applicable to Each Major Federal Program in
Accordance with OMB Circular A-133. Disclosures in these reports, which are dated April 14, 2006,
should be considered in conjunction with this management letter.
In connection with our audit of basic financial statements of the Village for the year ended September 30,
2005, 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)(h):
1. There were no significant findings or recommendations made in the preceding annual financial
audit.
2. The Village was in compliance with Section 218.415, Florida Statutes, regarding the investment
of public funds.
3. There was one recommendation to improve the Village's present financial management and
accounting procedures.
4. During the course of our audit, other than matters that are clearly inconsequential considenng
both quantitative and qualitative factors, nothing came to our attention that caused us to believe
that the Village:
a. Was in violation of any laws, rules or regulations and contractual provisions or abuse that have
occurred, or were likely to have occurred, or were discovered within the scope of the audit.
-67-
Rachlin Cohen & Holtz LLP
One Southeast Third Avenue • Tenth Floor • Miami, Honda 33131 • Phone 305 377 4228 • Fax 305 377 8331 • www.rachlin.com
An Independent Member of Baker Tilly International
Honorable Mayor, Village Council and Village Manager
Village of Key Biscayne, Florida
Page Two
b. Made any illegal or improper expenditures that were discovered within the scope of the audit
that may materially affect the financial statements.
c. Had deficiencies in internal control that are reportable conditions including but not limited
to:
(1) Improper or inadequate accounting procedures
(2) Failures to properly record financial transactions
(3) Other inaccuracies, shortages, defalcations, and instances of fraud discovered by, or that
came to the attention of the auditor.
5. The Village was incorporated by Laws of Florida 90-142. There were no component units
related to the Village.
6. a. The Village, during fiscal year 2005, did not meet any of the conditions described in Florida
Statutes 218.503(1).
b. The annual financial report for the year ended September 30, 2005 has been filed with the
Department of Financial Services pursuant to Section 218.32(1)(a), Florida Statutes and is in
agreement with the audited financial statements for the fiscal year ended September 30,
2005.
c. During the course of our audit, we applied financial condition assessment procedures
pursuant to Rule 10.566(7). It is management's responsibility to monitor the Village's
financial condition, and our financial condition assessment, which was performed as of the
Village's fiscal year end, was based on representations made by management and the review
of financial information provided by the Village. There were no findings that identified
deteriorating financial conditions.
This report is intended solely for the information and use of the Mayor, Village Council, management,
and the Auditor General of the State of Flonda and is not intended to be and should not be used by
anyone other than these specified parties.
Miami, Florida
April 14, 2006
-68-
Cohen
&Holtz
Cohen
a2Holtz
Accountants Advisors
Report of Independent Certified Public Accountants on
Compliance and Internal Control over Compliance Applicable to
Each Major Federal Program in Accordance with OMB Circular A-133
Honorable Mayor, Village Council and Village Manager
Village of Key Biscayne, Florida
Compliance
We have audited the compliance of the Village of Key Biscayne, Florida (the Village) with the types of
compliance requirements described in the U.S. Office of Management and Budget (OMB) Circular A-133
Compliance Supplement, that are applicable to its major federal program for the year ended September 30,
2005. The Village's major federal program is identified in the summary of auditor's results section of
the accompanying Schedule of Findings and Questioned Costs. Compliance with the requirements of
laws, regulations, contracts and grants applicable to its major federal program is the responsibility of the
Village's management. Our responsibility is to express an opinion on the Village's compliance based on
our audit.
We conducted our audit of compliance in accordance with auditing standards generally accepted in the
United States; the standards applicable to financial audits contained in Government Auditing Standards,
issued by the Comptroller General of the United States; and OMB Circular A-133, Audits of States, Local
Governments, and Non -Profit Organizations. Those standards and OMB Circular A-133 require that we
plan and perform the audit to obtain reasonable assurance about whether noncompliance with the types of
compliance requirements referred to above that could have direct and material effect on a major federal
program occurred. An audit includes examining, on a test basis, evidence about the Village's compliance
with those requirements and performing such other procedures as we considered necessary in the
circumstances. We believe that our audit provides a reasonable basis for our opinion. Our audit does not
provide a legal determination on the Village's compliance with those requirements.
In our opinion, the Village complied, in all material aspects, with the requirements referred to above that
are applicable to its major federal program for the year ended September 30, 2005.
Internal Control over Compliance
The management of the Village is responsible for establishing and maintaining effective internal control
over compliance with the requirements of laws, regulations,contracts and grants applicable to federal
programs. In planning and performing our audit, we considered the Village's internal control over
compliance with requirements that could have a direct and material effect on a major federal program
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Rachlin Cohen & Holtz tip
One Southeast Third Avenue • Tenth Floor • Miami, Florida 33131 • Phone 305.377.4228 • Fax 305 377 8331 • www.rachlin.com
An Independent Member of Baker Tilly International
Honorable Mayor, Village Council and Village Manager
Village of Key Biscayne, Florida
Page Two
in order to determine our auditing procedures for the purpose of expressing our opinion on compliance
and to test and report on internal control over compliance in accordance with OMB Circular A-133.
Our consideration of the internal control over compliance would not necessarily disclose all matters in
the internal control that might be material weaknesses. A material weakness is a reportable 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 noncompliance with applicable requirements of laws, regulations,
contracts and grants caused by error or fraud that would be material in relation to a major federal
program 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
compliance and its operation that we consider to be material weaknesses.
This report is intended solely for the information and use of the Mayor, Village Council, management
and federal awarding agencies and pass -through entities and is not intended to be and should not be used
by anyone other than these specified parties.
,e4teJizze.,- oo<4°
Miami, Florida
April 14, 2006
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Cohen
&Holtz
VILLAGE OF KEY BISCAYNE, FLORIDA
SCHEDULE OF EXPENDITURES OF FEDERAL AWARDS
FISCAL YEAR ENDED SEPTEMBER 30. 2005
Grant/
CFDA Contract
Federal Grantor/Pass Through Grantor Programs Number Number
Expenditures
U.S. Department of Treasury
Federal Equitable Sharing Program N/A N/A $ 143.866
Department of Homeland Security
Federal Emergency Management Agency
Pass through State of Florida
Department of Community Affairs
Disaster Relief Funding Agreement
97.036 06 -KT -B&-1 1-23-02-541 656.112
Total Expenditures of Federal Awards $ 799,978
N/A - Not available
See note to the schedule of expenditures of federal awards.
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VILLAGE OF KEY BISCAYNE, FLORIDA
NOTE TO THE SCHEDULE OF EXPENDITURES OF FEDERAL AWARDS
FISCAL YEAR ENDED SEPTEMBER 30, 2005
NOTE 1. BASIS OF PRESENTATION
The accompanying schedule of expenditures of federal awards includes the federal grant activity
of the Village of Key Biscayne and is presented on the accrual basis of accounting. The
information in this schedule is presented in accordance with the requirements of OMB Circular
A-133, Audits of States. Local Governments, and Non -Profit Organiation. Therefore, some
amounts presented in this schedule may differ from amounts presented in, or used in the
preparation of the financial statements.
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VILLAGE OF KEY BISCAYNE, FLORIDA
SUMMARY SCHEDULE OF PRIOR AUDIT FINDINGS
FISCAL YEAR ENDED SEPTEMBER 30, 2005
PRIOR AUDIT FINDINGS AND STATUS
No financial statement findings were reported in the pnor year. The Village was not subject to the
Federal Single Audit Act and OMB Circular A-133 for the fiscal year ended September 30, 2004.
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VILLAGE OF KEY BISCAYNE, FLORIDA
SCHEDULE OF FINDINGS AND QUESTIONED COSTS
FISCAL YEAR ENDED SEPTEMBER 30, 2005
SECTION I - SUMMARY OF AUDITOR'S RESULTS
Financial Statements
Type of auditor's report issued: Unqualified Opinion
Internal control over financial reporting:
Material weakness(es) identified? yes X no
Reportable condition(s) identified not considered to be
material weakness? yes X none reported
Noncompliance material to financial statements noted? yes X no
Federal Awards Programs
Internal control over the major programs:
Material weakness(es) identified? yes X no
Reportable condition(s) identified not considered to be
material weakness? yes X none reported
Type of auditor's report issued on compliance for the major
programs: Unqualified Opinion
Any audit findings disclosed that are required to be reported
in accordance with Circular A-133, Section .510(a)?
Identification of major federal awards program:
Federal Awards Program
Disaster Relief Funding Agreement
yes X no
CFDA No.
97.036
Dollar threshold used to distinguish between Type A and
Type B programs: $300,000
Auditee qualified as low risk auditee for audit of federal awards
programs? yes X no
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VILLAGE OF KEY BISCAYNE, FLORIDA
SCHEDULE OF FINDINGS AND QUESTIONED COSTS
(Continued )
SECTION II — FINANCIAL STATEMENT FINDING
Other Matter
2005-1 Capital Assets
Observation
The Village currently maintains its tracking of capital assets using excel spreadsheets. During the past
few years, the Village has greatly increased its acquisition and construction of capital assets.
Recommendation
We recommend that the Village acquire a capital asset software system that will allow the Village to
more effectively and efficiently track and maintain their acquired and constructed capital assets.
Management Response
Management is obtaining the fixed assets module to the current general ledger software system and will
implement it during fiscal 2006.
SECTION III — FEDERAL AWARDS FINDINGS AND QUESTIONED COSTS
None.
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