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VILLAGE OF KEY BISCAYNE, FLORIDA
COMPREHENSIVE ANNUAL FINANCIAL REPORT
FISCAL YEAR ENDED SEPTEMBER 30, 2008
Prepared by:
THE FINANCE DEPARTMENT
VILLAGE OF KEY BISCAYNE, FLORIDA
COMPREHENSIVE ANNUAL FINANCIAL REPORT
FISCAL YEAR ENDED SEPTEMBER 30, 2008
TABLE OF CONTENTS
PAGE
I. INTRODUCTORY SECTION
Letter of Transmittal i
Village Officials v
Certificate of Achievement for Excellence in Financial Reporting vi
Organization Chart vii
II. FINANCIAL SECTION
REPORT OF INDEPENDENT CERTIFIED PUBLIC ACCOUNTANTS 1-2
MANAGEMENT’S DISCUSSION AND ANALYSIS (Required Supplementary Information)3-10
BASIC FINANCIAL STATEMENTS:
Government-Wide Financial Statements:
Statement of Net Assets 11
Statement of Activities 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 21-44
REQUIRED SUPPLEMENTARY INFORMATION (OTHER THAN MD&A)
Budgetary Comparison Schedule – General Fund 45
Note to Budgetary Comparison Schedule 46
Schedule of Funding Progress 47
Schedule of Employer Contributions 48
VILLAGE OF KEY BISCAYNE, FLORIDA
TABLE OF CONTENTS
PAGE
III. STATISTICAL SECTION
Net Assets by Component – Last Six Fiscal Years 49
Changes in Net Assets – Last Six Fiscal Years 50-51
Fund Balances of Governmental Funds – Last Six Fiscal Years 52
Changes in Fund Balances of Governmental Funds – Last Six Fiscal Years 53
General Governmental Tax Revenues by Source – Last Ten Fiscal Years 54
Net Assessed Value and Estimated Actual Value of Taxable Property –
Last Ten Fiscal Years 55
Property Tax Rates – Direct and Overlapping Governments – Last Ten Fiscal Years 56
Principal Property Taxpayers – Current and Nine Years Ago 57
Property Tax Levies and Collections – Last Ten Fiscal Years 58
Ratios of Outstanding Debt by Type – Last Ten Fiscal Years 59
Ratios of General Bonded Debt Outstanding – Last Ten Fiscal Years 60
Direct and Overlapping Governmental Activities Debt 61
Pledged Revenue Coverage – Last Ten Fiscal Years 62
Demographic and Economic Statistics – Last Ten Fiscal Years 63
Principal Employers – Current and Nine Years Ago 64
Full-Time Equivalent Village Government Employees by Function –
Last Ten Fiscal Years 65
Operating Indicators by Function/Program – Last Ten Fiscal Years 66
Capital Asset Statistics by Function/Program – Last Ten Fiscal Years 67
IV. COMPLIANCE SECTION
Report of Independent Certified Public Accountants on Internal Control over Financial
Reporting and on Compliance and Other Matters Based on an Audit of Financial
Statements Performed in Accordance with Government Auditing Standards
68-69
Management Letter in Accordance with the Rules of the Auditor General of the
State of Florida 70-71
Schedule of Findings and Responses 72-75
INTRODUCTORY SECTION
VILLAGE OF KEY BISCAYNE
1 Vay,e C.onne//
Robert 1 .. Vernon, Mayor
Michael Davey, 1 Ire.11e9or
Enrique Garcia
Robert Gunman
Michael E. Kelly
Jorge E. MFendia
'i-hc)mas "Thornton
f W/a e .1lrzuk;,er
Genaro "Chip" Iglesias
Office of the Village Manager
July 2009
To the Honorable Mayor, Members of the Village
Council and Citizens of the Village of Key Biscayne:
The Government Finance Officers Association (GFOA) recommends that all
units of local governtnent publish, within six months of the close of each
fiscal year. a complete set of financial statements presented in conformity with
generally accepted accounting principles (GAAP) in the United States and
audited in accordance with auditing standards generally accepted in the United
States and in accordance with Government Auditing Standards by a firm of
licensed certified public accountants. Pursuant to that recommendation, we
hereby issue the comprehensive annual financial report of the Village of Key
Biscayne for the fiscal year ended September 30, 2008.
This report consists of management's representation concerning the finances
of the Village of Key Biscayne. Consequently, management assumes full
responsibility for the completeness and reliability of all of the information
presented in this report. To provide a reasonable basis for making these
representations, management of the Village of Key Biscayne has established a
comprehensive internal framework that is designed both to protect the
Village's assets from loss, theft, or misuse and to compile sufficient reliable
information for the preparation of the Village of Key Biscayne's financial
statements in conformity with GAAP. Because the cost of internal controls
should not outweigh their benefits, the Village of Key Biscayne's
comprehensive framework of internal controls has been designed to provide
reasonable, rather than absolute, assurance that the financial statements will be
free from material misstatement. As management, we assert that, to the best
of our knowledge and belief, this financial report is complete and reliable in
all material respects.
The firm of Rachlin LLP (formerly 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, 2008 are free of material
misstatement. The independent audit involved examining, on a test basis,
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88 West McIntyre Street • Suite 210 • Key Biscayne, Florida 33149 • (305) 365-5500 • Fax (305) 365-8936
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evidence supporting the amount and disclosures in the financial statements; assessing the
accounting principles used and significant estimates made by management; and evaluating the
overall financial statement presentation. The independent auditor concluded, based upon the
audit, that there was a reasonable basis for rendering an unqualified opinion that the Village of
Key Biscayne's financial statements for the fiscal year ended September 30, 2008, are fairly
presented in conformity with GAAP. The independent auditor's report is presented as the first
component of the financial section of this report.
GAAP requires that management provide a narrative introduction, overview, and analysis to
accompany the basic financial statements in the form of Management's Discussion and Analysis
(MD&A). This letter of transmittal is designed to complement MD&A and should be read in
conjunction with it. The Village of Key Biscayne's MD&A can be found immediately following
the report of the independent certified public accountants.
Profile of the Government
The Village of Key Biscayne, incorporated in 1991, is located on the southern most barrier island
of the United States, Miami -Dade County, Florida approximately 7.5 miles off the coast of
Miami, Florida. The Village of Key Biscayne occupies a land area of 1.25 square miles situated
between Crandon Park and Bill Baggs State Recreation Area. The Village serves a population of
approximately 11,100. The Village of Key Biscayne receives tax levies on real and personal
property located inside its boundaries.
The Village of Key Biscayne has operated under the council-manager form of government since
incorporation. Policymaking and legislative authority are vested in a governing council
consisting of the mayor and six other council members. The Council is responsible among other
things, for passing ordinances and resolutions, adopting the annual budget, appointing the
Village Manager and Village Clerk. The Village Manager is responsible for carrying out the
policies and ordinances of the Council, for overseeing the daily operations of the government,
and for appointing the heads of various departments.
The Village of Key Biscayne offers a wide range of services, including, police protection, fire
and emergency medical service, public works maintenance, a full service huilding, planning and
zoning department, parks and recreation activities, solid waste collection, and a comprehensive
storm water management system. Certain services are provided through the County School
System and the County Library System through Miami -Dade County.
The annual budget serves as a foundation for the Village of Key Biscayne's financial planning
and control. All departments of the Village arc 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 hudget no later than
September 30, the close of the Village's fiscal year. The appropriated budget is prepared by fund
and department. No department may legally expend in excess of the amount appropriated for
that department within an individual fund. The Village Manager may make transfers of
appropriations within a department. Transfers of appropriations between departments or funds
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require the approval of the Village Council. The Village Council approves supplemental
appropriations. Budget to actual comparisons are provided in this report for the general fund for
which an appropriated annual budget has been adopted. The general fund, budget to actual
report, is presented in the required supplemental information section of this report.
Local Economy
The Village of Key Biscayne enjoys a favorable economic environment and local indicators to
continued future stability. This exclusive community is comprised of well-educated and involved
citizens who take a genuine interest in the social, business, cultural and governing aspects of
their Village. The Village is comprised of affluent exclusive residential housing stock and three
major shopping centers. There is no industrial area in the community.
Long -Term Financial Planning
The Village has completed drainage improvements on Woodcrest. Buttonwood and Harbor
Drive, as well as, Phase Three of the Crandon Blvd lmprovctnent Project. Several public works
projects have also been completed recently. Another major capital asset includes the completion
of the Monaco Fountain. Among continuing programs is the Village's Beach Renourishment
program.
The Village utilizes a comprehensive living projection five years into the future to assess revenue
trends and expenditure needs to assure a halanced stable financial program avoiding millage rate
increases while addressing the various goals and objectives of the community. Additionally, the
Village has been modifying its 5 -Year Capital Planning by prioritizing needs hascd on its
expected available resources determined by its 5 -Year financial forecast. This effort is also
identifying capital purchases that will be needed to continue its critical core puhlic safety
services, as well, other departmental needs.
Cash Management Policies and Practices
The Village's Cash Management strategy emphasizes immediate funds collection and deposit
into the appropriate fund utilizing ACH debit or wire transfer methods in over 90% of all funds
received. Cash is transferred to a centralized clearing account for all payments at the point of
payment. The clearing account maintains a zero balance exclusive of these transfers. Currently,
the Village's investment policy follows Chapter 218, Florida Statutes. Cash in any of the fund's
operating accounts are swept into an overnight repurchase agreement, properly collateralized in
accordance with Chapter 280, Florida statutes. Surplus cash is invested in certificates of deposit
with qualified depositories, and with the State Board of Administration. Investment objectives
are the preservation of principal, liquidity in accordance with planned cash flows, and return on
investment in that order.
Risk Management
The Village is exposed to various risks of loss related to torts, theft of or damage to and
destruction of assets; errors and omissions; injuries to employees; and natural disasters. The
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Village participates in the Florida League of Cities Municipal Insurance Trust for workers'
compensation, liability and property insurance. Flood insurance is provided by the Florida State
Flood Insurance Pool.
Pension Benefits
The Village of Key Biscayne sponsors a defined contribution 401(a) pension plan with the
International City Managers' Association, Retirement Corporation (ICMA). Each full time
employee can contribute up to six percent (6%) of his or her pay to the plan; the Village
contributes twelve percent (12%). In addition, the Village sponsors a 457 deferred compensation
plan in which the employees may contribute on a voluntary basis.
A defined benefit pension plan is available to all firefighters and sworn police officers. This plan
is under the direction of a separate board of trustees, two of which are police and fire department
employees. Complete details of this plan can be found in Note 13 of the basic financial
statements.
Awards and Acknowledgements
The Government Finance Officers Association (GFOA) awarded a Certificate of Achievement
for Excellence in Financial Reporting to the Village of key Biscayne for its Comprehensive
Annual Financial Report (CAFR) for the fiscal year ended September 30, 2007. This was the
sixteenth consecutive year that the Village received this prestigious award. In order to be
awarded a Certificate of Achievement, the government published an easily readable and
efficiently organized CAFR. This report satisfied both GAAP and applicable legal requirements.
A Certificate of Achievement is valid for a period of one year only. We believe that our current
CAFR continues to meet the Certificate of Achievement Program's requirements and are
submitting it to the GFOA to determine its eligibility for another certificate.
The preparation of this report would not have been possible without the efficient and dedicated
services of the entire staff of all departments of the Village of Key Biscayne. We would like to
express our appreciation to all members of all of the departments who assisted and contributed to
the preparation of this report. We would also like to express our appreciation to Rachlin LLP.
our independent auditors, for their assistance and efforts in helping the Village prepare the
CAFR. Appreciation is also extended to the Mayor and the Village Council for their unfailing
support for maintaining the highest standards of professionalism in the management of the
Village of Key Biscayne's finances.
Respect i.illy submitted,
Genaro "Chip" Iglesias
Village Manager
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VILLAGE OF KEY BISCAYNE, FLORIDA
VILLAGE OFFICIALS
SEPTEMBER 30, 2008
VILLAGE COUNCIL
Robert Vernon, Mayor
Michael Davey, Vice-Mayor
Jorge Mendia
Enrique Garcia
Robert Gusman
Thomas Thornton
Michael E. Kelly
VILLAGE MANAGER
Genaro “Chip” Iglesias
VILLAGE CLERK
Conchita H. Alvarez, CMC
VILLAGE ATTORNEY
Weiss Serota Helfman Pastoriza Cole & Boniske, P.A.
FINANCE DIRECTOR
Beatrice Galeano, P.A.
VILLAGE AUDITORS
MarcumRachlin, a division of Marcum LLP
Accountants ▪ Advisors
-vi-
VOTERS OF
KEY BISCAYNE
Village
Council Local Planning
Agency
Village Clerk Special Master Village Manager Village Attorney
Police/Fire
Retirement
Board
Executive Asst
to the
Manager
Department of
Building,
Zoning and
Planning
Department of
Parks and
Recreation
Public Safety
Department
Department of
Public
Works
Department of
Finance and
Administrative
Services
Building
Zoning
Fire Rescue
Police
Special Events
Sports and
Athletics
Programs
Village Engineer
Contract
Supervisor
Stormwater
Finance/
Accounting
Personnel/
Benefits
RiskPlanning
Code Assistance
Programs
and Tours
Stormwater
Management
Refuse
Collection
and Recycling
Maintenance
Risk
Management
Senior
Coordinator
Maintenance
FINANCIAL SECTION
REPORT OF INDEPENDENT
CERTIFIED PUBLIC ACCOUNTANTS
MARCUM
RACH Li N
ACCOUNTANTS ® ADVISORS
REPORT OF INDEPENDENT CERTIFIED PUBLIC ACCOUNTANTS
Honorable Mayor, Village Council and Village Manager
Village of Key Biscayne, Florida
We have audited the accompanying financial statements of the governmental activities, the business -type
activities, each major fund and the aggregate remaining fund information of the Village of Key Biscayne,
Florida (the Village) as of September 30, 2008 and for the fiscal year then ended, which collectively
comprise the Village's basic financial statements as listed in the table of contents. These financial
statements are the responsibility of the Village's management. Our responsibility is to express opinions
on these financial statements based on our audit.
We conducted our audit in accordance with auditing standards generally accepted in the United States
and the standards applicable to financial audits contained in Government Auditing Standards, issue by
the Comptroller General of the United States. Those standards require that we plan and perform the audit
to obtain reasonable assurance about whether the financial statements are free of material misstatement.
An audit includes consideration of internal control over financial reporting as a basis for designing audit
procedures that are appropriate in the circumstances, but not for the purposes of expressing an opinion on
the effectiveness of the Village's internal control over financial reporting. Accordingly, we express no
such opinion. An audit also includes examining, on a test basis, evidence supporting the amounts and
disclosures in the financial statements, assessing the accounting principles used and significant estimates
made by management, as well as evaluating the overall financial statement presentation. We believe that
our audit provides a reasonable basis for our opinions.
In our opinion, the financial statements referred to above present fairly, in all material respects, the
respective financial position of the governmental activities, the business -type activities, each major fund
and the aggregate remaining fund information of the Village of Key Biscayne, Florida as of September 30,
2008 and the respective changes in the financial position and cash flows, where applicable, thereof for
the year then ended, in conformity with accounting principles generally accepted in the United States.
In accordance with Government Auditing Standards, we have also issued a report dated July 29, 2009 on
our consideration of the Village's internal control over financial reporting and our tests of its compliance
with certain provisions of laws, regulations, contracts, and grant agreements and other matters. The
purpose of that report is to describe the scope of our testing of internal control over financial reporting
and compliance and the results of that testing, and not to provide an opinion on the internal control over
financial reporting or on compliance. That report is an integral part of an audit performed in accordance
with Government Auditing Standards and should be considered in assessing the results of our audit.
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MARCUMGROUP
MEMBER
MarcumRachiin a division of Marcum I.L' ' marcumrachlin-com
One Southeast Third Avenue Q Tenth Floor o Miami, Florida 33131 tio Phone 305,377.4228 n Fax 305.377.8331
FLORIDA o NEW YORK a NEW JERSEY " CONNECTICUT zi GRAND CAYMAN
Honorable Mayor, Village Council and Village Manager
Village of Key Biscayne, Florida
Page Two
Management's Discussion and. Analysis and the required supplementary information on pages 3 through
10 and pages 45 through 48, respectively, are not a required part of the basic financial statements but are
supplementary information required by accounting principles generally accepted in the United States.
We have applied certain limited procedures, which consisted principally of inquiries of management
regarding the methods of measurement and presentation of the required supplementary information.
However, we did not audit the information and express no opinion on it.
Our audit was conducted for the purpose of forming opinions on the financial statements that collectively
comprise the Village of Key Biscayne's basic financial statements. The introductory section and
statistical tables are presented for purposes of additional analysis and are not a required part of the basic
financial statements. The introductory section and statistical tables have not been subjected to the
auditing procedures applied in the audit of the basic financial statements and, accordingly, we express no
opinion on them.
a division of Marcum LLP
Miami, Florida
July 29, 2009
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MARCUM
RACH LI N
ACCOUNTANTS a ADVISORS
A division of Marcum rra
MANAGEMENT’S DISCUSSION AND ANALYSIS
(MD&A)
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Management’s Discussion and Analysis
As Management of the Village of Key Biscayne, we offer readers of the Village of Key Biscayne’s
(the Village) financial statements this narrative overview and analysis of the financial activities of the
Village of Key Biscayne for the fiscal year ended September 30, 2008. We encourage readers to
consider information presented here in conjunction with additional information that we have furnished
in our letter of transmittal which can be found on pages i-v of this report.
Financial Highlights
The assets of the Village of Key Biscayne exceeded its liabilities at the close of the most recent
fiscal year by $55,313,241 (net assets).
The Village’s total net assets increased by $11,441,764, this increase is attributable to the increase
of property taxes received due to an increase in the assessed taxable values of properties in the
Village, increases in revenues from the Key Biscayne Community Center programs and increased
code compliance activities.
At the close of the current fiscal year, the Village of Key Biscayne’s governmental funds reported
an ending fund balance of $13,379,777, an increase of $3,031,804 in comparison with the prior
year. The total amount of fund balance is either reserved or designated for spending at the
Council’s direction.
The Village incurred $5,000,000 of new debt (short-term note payable) during the current fiscal
year.
Overview of the Financial Statements
This discussion and analysis are intended to serve as an introduction to the Village of Key Biscayne’s
basic financial statements. The Village of Key Biscayne’s basic financial statements comprise three
components: 1) government-wide financial statements, 2) fund financial statements, and 3) notes to the
financial statements. This report also contains required supplementary information in addition to the
basic financial statements themselves.
Government-wide financial statements. The government-wide financial statements are designed to
provide readers with a broad overview of the Village of Key Biscayne’s finances, in a manner similar
to a private sector business.
The statement of net assets presents information on all of the Village of Key Biscayne’s assets and
liabilities, with a difference between the two reported as net assets. Over time, increases or decreases
in net assets may serve as a useful indicator of whether the financial position of the Village of Key
Biscayne is improving or deteriorating.
The statement of activities presents information showing how the government’s net assets changed
during the most recent fiscal year. All changes in net assets are reported as soon as the underlying
event giving rise to the change occurs, regardless of the timing of related cash flows. Thus, revenues
and expenses are reported in this statement for some items that will only result in cash flows in future
periods (e.g., uncollected taxes and earned but unused vacation leave).
Both of the government-wide financial statements distinguish functions of the Village of Key Biscayne
that are principally supported by taxes and intergovernmental revenues (governmental activities) from
other functions that are intended to recover all or a significant portion of their costs through user fees and
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charges (business-type activities). The governmental activities of the Village of Key Biscayne include
general government, police, public works, building planning & zoning, fire and parks and recreation.
The government-wide financial statements include only the Village of Key Biscayne itself (known as
the primary government).
The government-wide financial statements can be found on pages 11 and 12 of this report.
Fund Financial Statements. A fund is a grouping of related accounts that is used to maintain control
over resources that have been segregated for specific activities or objectives. The Village of Key
Biscayne, like other state and local governments, uses fund accounting to ensure and demonstrate
compliance with finance-related legal requirements. The Village of Key Biscayne has two fund
categories, the governmental funds and the proprietary funds.
Governmental Funds. Governmental funds are used to account for essentially the same functions
reported as governmental activities in the government-wide financial statements. However, unlike the
government-wide financial statements, governmental fund financial statement focus on near-term
inflows and outflows of spend able resources as well as on balances of spend able resources available
at the end of the fiscal year. Such information may be useful in evaluating a government’s near-term
financing requirements.
Because the focus of governmental funds is narrower than that of the government-wide financial
statements, it is useful to compare the information presented for the governmental funds with similar
information presented for governmental activities in the government-wide financial statements. By
doing so, readers may better understand the long-term impact of the government’s near-term financing
decisions. Both the governmental fund balance sheet and the governmental fund statement of
revenues, expenditures, and changes in fund balances provide a reconciliation to facilitate this
comparison between governmental funds and governmental activities.
The Village of Key Biscayne maintains three governmental funds, the general fund, a special revenue
fund and a capital projects fund.
The Village of Key Biscayne adopts an annual appropriated budget for its general fund. A budgetary
comparison statement has been provided for the general fund to demonstrate compliance with this budget.
The basic governmental fund financial statements can be found on pages 13 to 15 of this report.
Proprietary Funds. The Village maintains one type of proprietary fund. Enterprise funds are used to
report the same functions presented as business-type activities in the government-wide financial
statements. The Village uses enterprise funds to account for its Stormwater, Solid Waste Collection
and Sanitary Sewer Construction operations.
The basic proprietary fund financial statements can be found on pages 16-18 of this report.
Fiduciary Funds. Fiduciary funds are used to account for resources held for the benefit of parties
outside the Village. Fiduciary funds are not reflected in the government-wide financial statements
because the resources of those funds are not available to support the Village’s own programs. The
accounting used for fiduciary funds is much like that used for proprietary funds.
The basic fiduciary fund financial statements can be found on pages 19-20 of this report.
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Notes to the basic financial statements. The notes provide additional information that is essential to
a full understanding of the data provided in the government-wide and fund financial statements. The
notes to the financial statements can be found on pages 21 to 44 of this report.
Other Information
In addition to the basic financial statements and accompanying notes, this report also presents certain
required supplementary information including budgetary comparisons and the Village’s progress in
funding its obligation to provide pension benefits to its employees.
Required supplementary information can be found on pages 45 to 48 of this report.
Government-wide Financial Analysis
As noted earlier, net assets may serve over time as a useful indicator of a government’s financial
position. In the case of the Village’s, assets exceeded liabilities by $55,313,241 at the close of the
most recent fiscal year.
A portion of the Village’s assets, $86,055,808 or 83.04%, reflects its investment in capital assets (e.g.,
land and equipment). The Village of Key Biscayne uses these capital assets to provide services to
citizens; consequently, these assets are not available for future spending.
Our analysis of the financial statements of the Village begins below. The Statement of Net Assets and
the Statement of Activities report information about the Village’s activities that will help answer
questions about the position of the Village. A comparative analysis is provided.
Governmental Activities. Governmental activities increased the Village of Key Biscayne fund
balances by approximately $6,415,130. This net overall increase was attributable to an increase in
property tax revenues due to increased assessed values of Key Biscayne real estate in general and
increased code enforcement activities. All other governmental activities increased fund balance as
follows:
Property taxes increased by $1,383,260 (7.41 percent) during the year. Most of this increase is
the product of a minor number of new units completed and on the tax roll for the first time, along
with renovated homes with increased assessed values, and residential and commercial resales.
Most department salaries increased 9 percent due to the Village’s salary step program, which in
fiscal year 2008 reflected a 5 percent increase in salaries and a 3 percent increase for a cost of
living increase. The fire department salaries increase 10 percent due to labor negotiations.
Debt service remained fairly level compared to the prior year, with a minor addition for interest
on new debt in the prior year.
For the most part, increases in expenses closely paralleled inflation and growth in the scope of
services.
Net Assets
A summary of the Village’s net assets is presented in Table A-1 and a summary of the changes in net
assets is presented in Table A-2.
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The Village’s net assets increased by $11,237,666 during the current fiscal year. This increase represents
the results of operations for a full 12-month period with no capital contributions from outside sources.
2008 2007 2008 2007 2008 2007
Current assets 15,152,443$ 13,162,063$ 3,522,363$ 510,553$ 18,674,806$ 13,672,616$
Capital assets, net 70,341,556 67,505,258 15,714,252 8,414,889 86,055,808 75,920,147
Total assets 85,493,999 80,667,321 19,236,615 8,925,442 104,730,614 89,592,763
Current liabilities 4,026,890 5,002,055 6,116,628 447,508 10,143,518 5,449,563
Noncurrent liabilities 34,118,516 35,527,705 5,155,339 5,539,920 39,273,855 41,067,625
Investment in capital assets,
net of related debt 36,139,953 31,422,358 10,174,333 2,505,881 46,314,286 33,928,239
Restricted 284,639 261,813 - - 284,639 261,813
Unrestricted 10,924,001 8,453,390 (2,209,685) 432,133 8,714,316 8,885,523
Total net assets 47,348,593$ 40,137,561$ 7,964,648$ 2,938,014$ 55,313,241$ 43,075,575$
Governmental Activities Business-type Activities Total
Table A - 1
Summary of Net Assets
2008 2007 2008 2007 2008 2007
Revenues:
Program revenues:
Charges for services 3,234,686$ 3,060,790$ 1,029,904$ 1,030,221$ 4,264,590$ 4,091,011$
Operating grants and contributions 251,180 799,493 - - 251,180 799,493
Capital grants and contributions - - 5,460,763 - 5,460,763 -
General revenues:
Property taxes 20,051,239 18,667,979 - - 20,051,239 18,667,979
Utility taxes 2,760,802 2,231,193 - - 2,760,802 2,231,193
Franchise fees 1,064,666 1,113,194 - - 1,064,666 1,113,194
Unrestricted intergovernmental revenue 2,265,243 1,000,265 - - 2,265,243 1,000,265
Investment income and
miscellaneous 346,531 641,115 48,202 49,086 394,733 690,201
Total revenues 29,974,347 27,514,029 6,538,869 1,079,307 36,513,216 28,593,336
Expenses:
General government 3,213,273 3,781,396 - - 3,213,273 3,781,396
Public safety 11,672,048 9,909,449 - - 11,672,048 9,909,449
Parks and recreation 3,633,233 3,077,624 - - 3,633,233 3,077,624
Public works 2,046,776 1,589,444 - - 2,046,776 1,589,444
Building, zoning and planning 1,529,272 1,447,968 - - 1,529,272 1,447,968
Interest on long-term debt 1,436,481 1,505,253 - - 1,436,481 1,505,253
Stormwater - - 911,500 693,135 911,500 693,135
Solid waste collection - - 619,823 571,246 619,823 571,246
Sanitary sewer construction - - 9,046 9,454 9,046 9,454
Total expenses 23,531,083 21,311,134 1,540,369 1,273,835 25,071,452 22,584,969
Changes in net assets before transfers 6,443,264 6,202,895 4,998,500 (194,528) 11,441,764 6,008,367
Transfers (28,134) (28,133) 28,134 28,133 - -
Changes in net assets after transfers 6,415,130 6,174,762 5,026,634 (166,395) 11,441,764 6,008,367
Net assets, beginning, as previously reported 40,137,561 33,962,799 2,938,014 3,104,409 43,075,575 37,067,208
Prior period adjustment 795,902 - - - 795,902 -
Net assets, beginning, as restated 40,933,463 33,962,799 2,938,014 3,104,409 43,871,477 37,067,208
Net assets, ending 47,348,593$ 40,137,561$ 7,964,648$ 2,938,014$ 55,313,241$ 43,075,575$
Table A - 2
Summary of Changes in Net Assets
Governmental Activities Business-type Activities Total
-7-
Business-type Activities
Business-type activities increased the Village’s net assets by $5,026,634.
In fiscal 2008, one of the three business-type activities reflected operational profits.
The Stormwater Utility Fund reflected a net loss of $376,824, due mainly to depreciation expense
in the amount of $273,919. Also reflected in this loss is an increase in General and
Administrative expenses due to extensive maintenance performed on the stormwater.
The Solid Waste Collection Fund reported a net loss of $87,278, due mainly to increased
contractual costs.
The Sanitary Sewer Construction Fund is has resumed construction activity which is currently in
progress.
Governmental Activities
-8-
Business-type Activities
As noted earlier, the Village of Key Biscayne uses fund accounting to ensure and demonstrate compliance with
finance-related legal requirements.
Governmental funds. The focus of the Village of Key Biscayne’s governmental funds is to provide
information on near-term inflows, outflows, and balances of spend able resources. Such information is useful in
assessing the Village’s financing requirements.
At the end of the current fiscal year, fund balance of the general fund was $11,298,178, an increase of
$1,422,762 in comparison with the prior year. The increase was primarily caused by an increase in property
values of 7.32% All of this is either reserved or designated for specific uses: (1) emergencies ($4,000,001), (2)
Building Inspection Costs ($554,819), (3) Compensated Absences ($595,916), (4) Law Enforcement Seizures
($284,639), (5) Playing Field Acquisitions ($416,403), (6) Fire Rescue Transport Fees ($171,839), (7) Working
Capital Reserves ($1,000,000), (8) Police/Administration Building Reserve ($13,632), (9) Fire Station Building
-9-
Reserve ($13,632), (10) Community Center Equipment Reserve ($50,000), (11) Fire Vehicles Replacement
Reserve ($50,000), (12) Master Plan Initiatives ($1,873,764), (13) Capital Lease ($298,682), (14) Prepaid Items
($261,373), (15) Roadway Improvements ($175,000), (16) Recreation Facilities ($300,000), (17) Capital
Improvement Plan ($1,130,089) and (18) Fire Rescue Reserve - Urban Area Security Initiative (UASI)
($18,389) and (19) Police Labor ($90,000).
The general fund is the chief operating fund of the Village of Key Biscayne. As a measure of the general fund’s
liquidity, it may be useful to compare total fund balance to total fund expenditures. Total fund balance
represents 41.92 percent of total general fund expenditures.
A summary of the general fund’s condensed balance sheet and statement of revenues, expenditures and changes
in fund balance is presented in Table B-1 and B-2 for September 30, 2008 and 2007, is shown as follows:
The Special Revenue Fund was established to account for the construction and future maintenance of
the Village’s roadways. Bond revenue is the source of funding for construction of roadways, while the
local option gas tax funds maintenance and the transportation surtax funds debt service.
At present, the fund shows a negative fund balance due to phase three of the Crandon Boulevard
Improvement Project, which was to be corrected with the Series 2006 Roadway Improvement Revenue
Bonds, issued in late December 2006. The remainder of the negative fund balance will be eliminated
with receipt of the County bridge toll revenues and State XOXO and FDOT funds receipts.
The Capital Improvement Fund receives an annual budgeted transfer from the general fund to fund
capital construction of infrastructure at various locations on the island. All transfers are allocated to
specific projects by management and the council during the annual budgeting process. The fund
balance increased by $1,828,470 during the current fiscal period. Fund balance is comprised of funds
allocated to named projects with varied stages of completion.
2008 2007
Total assets 12,794,042$ 11,623,098$
Total liabilities 1,495,864$ 1,747,682$
Reserved or designated fund balance 11,298,178 9,875,416
Total liabilities and fund balance 12,794,042$ 11,623,098$
2008 2007
Total revenues 28,252,113$ 26,592,900$
Total expenditures 22,389,637 20,686,819
Excess of revenues over expenditures 5,862,476$ 5,906,081$
Table B-1
Summary of Condensed Balance Sheet
Table B-2
Expenditures and Changes in Fund Balances
Summary of Condensed Statement of Revenues,
-10-
General Fund Budgetary Highlights
There were three departments with significant budget to actual variances: Village Attorney, Fire and, Parks and
Recreation. These variances were cause by the following:
Attorney - excess code enforcement litigation in addition to negotiations with both police and fire unions
Fire – approval of the collective bargaining agreement with the fire union. As a result, all related
salaries/benefits were made whole retroactively from fiscal year 2006 through fiscal year 2008.
Parks and Recreation - the acquisition of the sports program (Key Biscayne Athletic Club).
Capital Assets
As of September 30, 2008, the Village’s capital assets net of accumulated depreciation amounted to
$86,055,808. The total increase in capital assets for the fiscal year was as follows:
Major capital asset events during the fiscal year included the following:
Completion of drainage improvements on Woodcrest, Buttonwood and Harbor Drives.
Completion of the Crandon Blvd Improvement. Project, phase three
Continuation of the Beach Renourishment program
Completion of the Monaco Fountain
Additional information on the Village’s capital assets can be found in Note 7 on pages 31-32 of this report.
Debt Administration
At September 30, 2008, the Village had bonded debt outstanding of $39,527,729. Of this amount, $7,046,131
represents bonds secured solely by specified revenue sources (Transportation Tax Revenue Bonds and Road
Improvement Revenue Bonds). The remainder is special obligation bonds that are secured by non-ad Valorem
revenues through covenants to budget and appropriate.
The Village’s total net debt outstanding increased by $5,000,000 due to the short-term additional borrowing
required for the Sewer Project construction.
Additional information on the Village’s long-term debt can be found in Note 9 on pages 33-38 of this report.
Economic Factors and Next Year’s Budgets and Rates
The unemployment rate for Miami-Dade County is currently 5.9 percent, which is an increase from a rate
of 4.2 percent a year ago. This is favorable to the state’s average unemployment rate of 10.2 percent as
well as the national average rate of 9.5 percent. The Village’s average rate is current at 3.1 percent, a
decrease from a rate of 3.2 percent a year ago.
The occupancy rate of the Village’s retail rentals has remained stable for the past several years.
Inflationary trends in the region compare favorably to national indices.
All of these factors were considered in preparing the Village of Key Biscayne’s budget for the 2009 fiscal year.
Requests for Information
This financial report is designed to provide a general overview of the Village of Key Biscayne’s finances for all
those with an interest in the government’s finances. Questions concerning any of the information provided in
this report or requests for additional financial information should be addressed to the Office of the Village
Manager, 88 West McIntyre Street, Key Biscayne, Florida 33149
BASIC FINANCIAL STATEMENTS
Business-
Governmental type
Activities Activities Total
ASSETS
Cash and cash equivalents 9,358,864$ 2,601,072$ 11,959,936$
Receivables, net 2,872,081 3,047,424 5,919,505
Prepaids 261,373 - 261,373
Internal balances 2,126,133 (2,126,133) -
Negative net pension obligation 121,512 - 121,512
Other assets 20,769 - 20,769
Restricted assets:
Cash and cash equivalents 65,633 - 65,633
Investments 326,078 - 326,078
Capital assets not being depreciated 34,685,349 8,662,321 43,347,670
Capital assets being depreciated, net 35,656,207 7,051,931 42,708,138
Total assets 85,493,999 19,236,615 104,730,614
LIABILITIES
Accounts payable and accrued liabilities 745,690 702,889 1,448,579
Accrued interest payable 328,080 - 328,080
Payable to pension plan 566 - 566
Unearned revenue 561,714 29,159 590,873
Deposits 20,000 - 20,000
Short-term revenue note payable - 5,000,000 5,000,000
Noncurrent liabilities:
Due within one year 2,370,840 384,580 2,755,420
Due in more than one year 34,118,516 5,155,339 39,273,855
Total liabilities 38,145,406 11,271,967 49,417,373
NET ASSETS
Invested in capital assets, net of related debt 36,139,953 10,174,333 46,314,286
Restricted for law enforcement 284,639 - 284,639
Unrestricted 10,924,001 (2,209,685) 8,714,316
Total net assets 47,348,593$ 7,964,648$ 55,313,241$
VILLAGE OF KEY BISCAYNE, FLORIDA
STATEMENT OF NET ASSETS
SEPTEMBER 30, 2008
See notes to basic financial statements.
-11-
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General Revenue Improvements Funds
ASSETS
Cash and cash equivalents 4,398,777$ -$ 4,960,087$ 9,358,864$
Receivables, net 1,038,366 833,715 - 1,872,081
Due from other governments 1,000,000 - 1,000,000
Due from other funds 6,769,448 - 455,954 7,225,402
Prepaid items 261,373 - - 261,373
Restricted cash and cash equivalents - 65,633 - 65,633
Restricted investments 326,078 - - 326,078
Total assets 12,794,042$ 1,899,348$ 5,416,041$ 20,109,431$
LIABILITIES AND FUND BALANCES
Liabilities:
Accounts payable and accrued liabilities 538,185$ 3,514$ 203,991$ 745,690$
Due to other funds 72,984 4,597,457 428,828 5,099,269
Payable to pension plan 566 - - 566
Deposits 20,000 - - 20,000
Deferred revenue 864,129 - - 864,129
Total liabilities 1,495,864 4,600,971 632,819 6,729,654
Fund balances:
Reserved (Note 12) 11,298,178 - - 11,298,178
Unreserved, undesignated reported in:
Special revenue fund - (2,701,623) - (2,701,623)
Capital improvements - - 4,783,222 4,783,222
Total fund balances (deficit) 11,298,178 (2,701,623) 4,783,222 13,379,777
Total liabilities and fund balances 12,794,042$ 1,899,348$ 5,416,041$
Amounts reported for governmental activities in the statement of net assets are different because:
Capital assets used in governmental activities are not financial resources and, therefore,
are not reported in the funds 70,341,556
A negative net pension obligation (NPO) is not considered to represent a financial
asset and therefore is not reported in the governmental funds 121,512
Long-term receivables are not available to pay for current period
expenditures and, therefore, are not reported in the funds 302,415
Long-term liabilities, including bonds payable, are not due and payable in the current
period and therefore not reported in the funds (36,796,667)
Net assets of governmental activities 47,348,593$
VILLAGE OF KEY BISCAYNE, FLORIDA
BALANCE SHEET
GOVERNMENTAL FUNDS
SEPTEMBER 30, 2008
See notes to basic financial statements.
-13-
Total
Special Capital Governmental
General Revenue Improvements Funds
Revenues:
Property taxes 20,051,239$ -$ -$ 20,051,239$
Utility taxes 1,534,379 - - 1,534,379
Communications services tax 924,008 - - 924,008
Franchise fees 1,064,666 - - 1,064,666
Licenses and permits 1,240,290 - - 1,240,290
Intergovernmental 960,045 1,305,198 - 2,265,243
Charges for services 1,994,396 - - 1,994,396
Interest 223,907 1,621 113,000 338,528
Grants 251,180 - - 251,180
Other income 8,003 - - 8,003
Total revenues 28,252,113 1,306,819 113,000 29,671,932
Expenditures:
Current:
General government 2,329,647 - - 2,329,647
Fire 5,744,775 - - 5,744,775
Police 4,863,765 - - 4,863,765
Public works 1,720,689 - - 1,720,689
Building, zoning and planning 1,513,019 - - 1,513,019
Parks and recreation 3,335,004 - 32,634 3,367,638
Capital outlay 357,329 1,927,088 2,459,379 4,743,796
Debt service:
Principal 1,379,605 300,386 - 1,679,991
Interest and fiscal charges 1,145,804 298,772 - 1,444,576
Total expenditures 22,389,637 2,526,246 2,492,013 27,407,896
Excess (deficiency) of revenues
over expenditures 5,862,476 (1,219,427) (2,379,013) 2,264,036
Other financing sources (uses):
Transfers in - - 4,533,094 4,533,094
Transfers out (4,561,228) - - (4,561,228)
Total other financing
sources (uses) (4,561,228) - 4,533,094 (28,134)
Net change in fund balances 1,301,248 (1,219,427) 2,154,081 2,235,902
Fund balances (deficit), beginning,
as previously reported 9,875,416 (2,482,196) 2,954,753 10,347,973
Prior period adjustment (see Note 16) 121,514 1,000,000 (325,612) 795,902
Fund balances (deficit), beginning, as restated 9,996,930 (1,482,196) 2,629,141 11,143,875
Fund balances (deficit), ending 11,298,178$ (2,701,623)$ 4,783,222$ 13,379,777$
VILLAGE OF KEY BISCAYNE, FLORIDA
STATEMENT OF REVENUES, EXPENDITURES AND CHANGES IN FUND BALANCES
GOVERNMENTAL FUNDS
FISCAL YEAR ENDED SEPTEMBER 30, 2008
See notes to basic financial statements.
-14-
Amounts reported for governmental activities in the statement of activities
(Page 12) are different because:
Net change in fund balances - total governmental funds (Page 14)2,235,902$
Governmental funds report capital outlays as expenditures. However, in the
statement of activities, the cost of those assets is allocated over their
estimated useful lives and reported as depreciation expense. This is the
amount by which capital outlays exceeded depreciation in the current period.
The details of the difference are as follows:
Capital outlay 4,414,364$
Depreciation expense (1,562,118)
Net adjustment 2,852,246
Under the modified accrual basis of accounting used in the governmental funds,
revenues are not recognized until funds are measurable and available to
finance current expenditures. In the statement of activities, however, which
is presented on the accrual basis, revenues are reported when earned.
The detail of the difference is as follows:
Communications services tax proceeds 302,415
The issuance of long-term debt provides current financial resources to
governmental funds, while the repayment of the principal of long-term debt
consumes the current financial resources of governmental funds.
The detail of the differences are as follows:
Debt payments 1,881,539
Some expenses reported in the statement of activities do not require current
financial resources and, therefore, are not reported as expenditures in
governmental funds.
The details of the difference is:
Compensated absences (829,790)
Accrued interest expense (8,095)
Debt issuance cost (2,768)
Negative net pension obligation (16,319)
(856,972)
Change in net assets of governmental activities (Page 12) 6,415,130$
VILLAGE OF KEY BISCAYNE, FLORIDA
RECONCILIATION OF THE STATEMENT OF REVENUES, EXPENDITURES AND CHANGES IN
FUND BALANCES OF GOVERNMENTAL FUNDS TO THE STATEMENT OF ACTIVITIES
FISCAL YEAR ENDED SEPTEMBER 30, 2008
See notes to basic financial statements.
-15-
Solid
Stormwater Sanitary Waste
Utility Sewer (A Nonmajor
System Construction Fund)Totals
ASSETS
Current assets:
Cash and cash equivalents 310,976$ 2,129,689$ 160,407$ 2,601,072$
Accounts receivables, net 158,099 2,369,972 519,353 3,047,424
Due from other funds - 428,828 - 428,828
Total current assets 469,075 4,928,489 679,760 6,077,324
Noncurrent assets:
Capital assets not being depreciated - 8,662,321 - 8,662,321
Capital assets being depreciated, net 7,051,931 - - 7,051,931
Total noncurrent assets 7,051,931 8,662,321 - 15,714,252
Total assets 7,521,006 13,590,810 679,760 21,791,576
LIABILITIES
Current liabilities:
Accounts payable and accrued liabilities 33,146 620,432 49,311 702,889
Due to other funds 117,775 2,039,397 397,789 2,554,961
Deferred revenue - - 29,159 29,159
Short-term revenue bonds payable - 5,000,000 - 5,000,000
Current portion of revenue bonds payable 365,000 19,580 - 384,580
Total current liabilities 515,921 7,679,409 476,259 8,671,589
Noncurrent liabilities:
Revenue bonds 4,835,000 - - 4,835,000
Revolving loan - 320,339 - 320,339
Total noncurrent liabilities 4,835,000 320,339 - 5,155,339
Total liabilities 5,350,921 7,999,748 476,259 13,826,928
NET ASSETS
Invested in capital assets, net of related debt 1,851,931 8,322,402 - 10,174,333
Unrestricted (deficit)318,154 (2,731,340) 203,501 (2,209,685)
Total net assets 2,170,085$ 5,591,062$ 203,501$ 7,964,648$
Business-type Activities -
Enterprise Funds
VILLAGE OF KEY BISCAYNE, FLORIDA
STATEMENT OF NET ASSETS
PROPRIETARY FUNDS
SEPTEMBER 30, 2008
See notes to basic financial statements.
-16-
Solid
Stormwater Sanitary Waste
Utility Sewer (A Nonmajor
System Construction Fund)Totals
Operating revenues:
Charges for services 499,101$ -$ 530,803$ 1,029,904$
Operating expenses:
General and administrative 407,738 - 619,823 1,027,561
Depreciation 273,919 - - 273,919
Total operating expenses 681,657 - 619,823 1,301,480
Operating loss (182,556) - (89,020) (271,576)
Non-operating revenues (expenses):
Grants - 5,460,763 - 5,460,763
Interest income 35,575 5,887 1,742 43,204
Other income - 4,998 - 4,998
Business-type Activities -
Enterprise Funds
VILLAGE OF KEY BISCAYNE, FLORIDA
STATEMENT OF REVENUES, EXPENSES AND CHANGES IN NET ASSETS
PROPRIETARY FUNDS
FISCAL YEAR ENDED SEPTEMBER 30, 2008
See notes to basic financial statements.
-17-
Other income 4,998 4,998
Interest expense (229,843) (9,046) - (238,889)
Total non-operating revenues (expenses) (194,268) 5,462,602 1,742 (190,687)
Income (loss) before transfers (376,824) 5,462,602 (87,278) (462,263)
Transfers in - 28,134 - 28,134
Change in net assets (376,824) 5,490,736 (87,278) (434,129)
Net assets, beginning 2,546,909 100,326 290,779 2,938,014
Net assets, ending 2,170,085$ 5,591,062$ 203,501$ 2,503,885$
See notes to basic financial statements.
-17-
Solid
Stormwater Sanitary Waste
Utility Sewer (A Nonmajor
System Construction Fund)Totals
Cash flows from operating activities:
Receipts from customers and users 484,797$ -$ 420,796$ 905,593$
Payments to suppliers (636,123) - (552,212) (1,188,335)
Net cash used by operating activities (151,326) - (131,416) (282,742)
Cash flows from non-capital financing activities:
Transfers from other funds - 28,134 - 28,134
Net cash provided by non-capital
financing activities - 28,134 - 28,134
Cash flows from capital and related financing activities:
Net payments on revolving loan (350,000) (19,089) - (369,089)
Proceeds from short term revenue bonds - 5,000,000 - 5,000,000
Grant proceeds - 2,661,963
Payments for construction in progress - (5,543,158) - (5,543,158)
Other income - 4,998 4,998
Interest paid (229,843) (9,046) - (238,889)
Net cash provided (used by) capital
and related financing activities (579,843) 2,095,668 - (1,146,138)
Cash flows from investing activities:
Interest received 35,575 5,887 1,742 43,204
Net cash provided by investing activities 35,575 5,887 1,742 43,204
Net increase (decrease) in cash and cash equivalents (695,594) 2,129,689 (129,674) 1,304,421
Cash and cash equivalents, beginning 1,006,570 - 290,081 1,296,651
Cash and cash equivalents, ending 310,976$ 2,129,689$ 160,407$ 2,601,072$
Reconciliation of operating loss to net cash
provided (used) by operating activities:
Operating loss (182,556)$ -$ (89,020)$ (271,576)$
Adjustments to reconcile operating loss to net
cash used by operating activities:
Depreciation 273,919 - - 273,919
Changes in operating assets and liabilities:
(Increase) decrease in:
Accounts receivable (33,813) - (110,007) (143,820)
Interest receivable 19,509 - - 19,509
Increase (decrease) in:
Accounts payable 33,146 - 1,635 34,781
Deferred revenue - - 2,999 2,999
Due to other funds (261,531) - 62,977 (198,554)
Total adjustments 31,230 - (42,396) (11,166)
Net cash used by operating activities (151,326)$ -$ (131,416)$ (282,742)$
Business-type Activities -
Enterprise Funds
VILLAGE OF KEY BISCAYNE, FLORIDA
STATEMENT OF CASH FLOWS
PROPRIETARY FUNDS
FISCAL YEAR ENDED SEPTEMBER 30, 2008
See notes to basic financial statements.
-18-
ASSETS
Contributions receivable:
Village (including State) 121,323$
Employees 24,887
Total contributions receivable 146,210
Investments, at fair value:
Money market funds 529,201
Common stocks 2,435,222
Mutual funds 7,233,603
Total investments 10,198,026
Total assets 10,344,236
LIABILITIES AND NET ASSETS
Payables 940
Net assets held in trust for pension benefits 10,343,296$
VILLAGE OF KEY BISCAYNE, FLORIDA
STATEMENT OF FIDUCIARY NET ASSETS
PENSION TRUST FUND
SEPTEMBER 30, 2008
See notes to basic financial statements.
-19-
ADDITIONS
Contributions:
Plan members 622,972$
Village (including State) 1,050,016
Total contributions 1,672,988
Investment income (losses):
Net depreciation in the fair value of investments (1,392,812)
Interest and dividends 192,040
Net investments losses (1,200,772)
Total additions 472,216
DEDUCTIONS
Benefits paid 286,158
Administrative expenses 111,994
Total deductions 398,152
Change in net assets 74,064
Net assets, beginning 10,269,232
Net assets, ending 10,343,296$
VILLAGE OF KEY BISCAYNE, FLORIDA
STATEMENT OF CHANGES IN FIDUCIARY NET ASSETS
PENSION TRUST FUND
FISCAL YEAR ENDED SEPTEMBER 30, 2008
See notes to basic financial statements.
-20-
NOTES TO BASIC FINANCIAL STATEMENTS
VILLAGE OF KEY BISCAYNE, FLORIDA
NOTES TO BASIC FINANCIAL STATEMENTS
SEPTEMBER 30, 2008
-21-
NOTE 1. SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES
The Village of Key Biscayne, Florida (the Village), located in Miami-Dade County, is a political
subdivision of the State of Florida. The Village, which was incorporated in 1991, operates under
a Council-Manager form of government. In addition to the general government function, the
Village provides its residents with public works, public safety (police and fire), parks and
recreation, building, zoning and planning functions, sanitation and stormwater management. The
Village does not provide educational or hospital facilities; those services are provided by the
Miami-Dade County School Board and Miami-Dade County, respectively.
The financial statements of the Village have been prepared in conformity with accounting
principles generally accepted in the United States (GAAP) as applied to governmental units. The
Governmental Accounting Standards Board (GASB) is the accepted standard-setting body for
establishing governmental accounting and financial reporting principles. The more significant of
the Village’s accounting policies are described below:
A. Financial Reporting Entity
The financial statements were prepared in accordance with GASB Statements related to The
Financial Reporting Entity, which establishes standards for defining and reporting on the
financial reporting entity. The definition of the financial reporting entity is based upon the
concept that elected officials are accountable to their constituents for their actions. One of the
objectives of financial reporting is to provide users of financial statements with a basis for
assessing the accountability of the elected officials. The financial reporting entity consists of
the Village, organizations for which the Village is financially accountable, and other
organizations for which the nature and significance of their relationship with the Village are
such that exclusion would cause the reporting entity’s financial statements to be misleading or
incomplete. The Village is financially accountable for a component unit if it appoints a voting
majority of the organization’s governing board and it is able to impose its will on that
organization or there is a potential for the organization to provide specific financial benefits
to, or impose specific financial burdens on, the Village. Based upon the application of these
criteria, there were no organizations that met the criteria described above.
B. Government-Wide and Fund Financial Statements
The government-wide financial statements (i.e., the statement of net assets and the statement
of activities) report information on all of the non-fiduciary activities of the Village. For the
most part, the effect of interfund activity has been removed from these statements.
Governmental activities, which normally are supported by taxes and intergovernmental
revenues, are reported separately from business-type activities, which rely to a significant
extent on fees and charges for support.
VILLAGE OF KEY BISCAYNE, FLORIDA
NOTES TO BASIC FINANCIAL STATEMENTS
(Continued)
-22-
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)
-23-
NOTE 1. SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES (Continued)
C. Measurement Focus, Basis of Accounting, and Financial Statement Presentation
(Continued)
The Village reports the following major governmental funds:
The General Fund is the Village’s primary operating fund. It accounts for all financial
resources of the general government, except those required to be accounted for in another
fund.
The Special Revenue Fund accounts for the revenues received from the transportation
surtax and expenditures for related transportation costs.
The Capital Improvement Fund accounts for the acquisition or construction of various
major capital projects.
The Village reports the following major proprietary funds in the basic financial statements:
The Stormwater Utility Fund accounts for the construction and maintenance of the
Village’s stormwater system.
The Sanitary Sewer Fund accounts for the development and construction of a municipal
sanitary sewer system to the unsewered areas of the community.
Additionally, the Village reports the following fund types:
The Pension Trust Fund is used to account for the Village’s single-employer defined
benefit pension plan covering substantially all of its police officers and firefighters.
Private-sector standards of accounting and financial reporting issued prior to December 1,
1989, generally are followed in both the government-wide and proprietary fund financial
statements to the extent that those standards do not conflict with or contradict guidance of the
Governmental Accounting Standards Board. The Village has the option of following
subsequent private-sector guidance for their business-type activities and enterprise funds,
subject to this same limitation. The Village has elected not to follow subsequent private-
sector guidance.
As a general rule, the effect of interfund activity has been eliminated from the government-
wide financial statements. Exceptions to this general rule are payments-in-lieu of taxes and
other charges between the Village’s various utility functions and various other functions.
Elimination of these charges would distort the direct costs and program revenues reported for
the various functions concerned.
Amounts reported as program revenues include 1) charges to customers or applicants for
goods, services, or privileges provided, 2) operating grants and contributions, and 3) capital
grants and contributions. Internally dedicated resources are reported as general revenues
rather than as program revenues. Likewise, general revenues include all taxes.
VILLAGE OF KEY BISCAYNE, FLORIDA
NOTES TO BASIC FINANCIAL STATEMENTS
(Continued)
-24-
NOTE 1. SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES (Continued)
C. Measurement Focus, Basis of Accounting, and Financial Statement Presentation
(Continued)
Proprietary funds distinguish operating revenues and expenses from nonoperating items.
Operating revenues and expenses generally result from providing services and producing and
delivering goods in connection with a proprietary fund’s principal ongoing operations. The
principal operating revenues of the Village’s stormwater utility, solid waste services and
sanitary sewer construction funds are charges to customers for services. Operating expenses
for enterprise funds include the costs of services, administrative expenses, and depreciation on
capital assets. All revenues and expenses not meeting this definition are reported as
nonoperating revenues and expenses.
When both restricted and unrestricted resources are available for use, it is the Village’s policy
to use restricted resources first, then unrestricted resources as they are needed.
D. Assets, Liabilities, and Net Assets or Equity
1. Deposits and Investments
The Village’s cash and cash equivalents include cash on hand, and certificates of deposit
with original maturities of three months or less from the date of acquisition and a
repurchase agreement. All other investments, including pension investments, are recorded
at fair value. Fair value is determined by quoted market prices.
2. Receivables and Payables
Activity between funds that are representative of lending/borrowing arrangements
outstanding at the end of the fiscal year are referred to as “due to/from other funds”. Any
residual balances outstanding between the governmental activities and business-type
activities are reported in the government-wide financial statements as “internal balances”.
3. Capital assets
Capital assets, which include property, plant and equipment, and infrastructure assets (e.g.,
utility plant, roads, bridges, sidewalks, and similar items), are reported in the applicable
governmental or business-type activities columns in the government-wide financial
statements. Capital assets are defined by the Village as assets with an initial, individual
cost of more than $750 and an estimated useful life in excess of one year. Such assets are
recorded at historical cost or estimated historical cost if purchased or constructed. Donated
capital assets are recorded at estimated fair market value at the date of donation. All
infrastructure assets have been capitalized since inception of the Village.
VILLAGE OF KEY BISCAYNE, FLORIDA
NOTES TO BASIC FINANCIAL STATEMENTS
(Continued)
-25-
NOTE 1. SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES (Continued)
D. Assets, Liabilities, and Net Assets or Equity (Continued)
3. Capital assets (Continued)
The costs of normal maintenance and repairs that do not add to the value of the asset or
materially extend asset lives are not capitalized. Major outlays for capital assets and
improvements are capitalized as projects are constructed. Interest incurred during the
construction phase of capital assets of business-type activities is included as part of the
capitalized value of the asset constructed. No such costs were capitalized in 2008.
Capital assets of the Village are depreciated using the straight line method over the
following estimated useful lives:
Assets Years
Buildings 25-50
Improvements other than buildings 10-50
Furniture, fixtures and equipment 10
Stormwater utility system 50
4. Compensated absences
It is the Village’s policy to permit employees to accumulate within certain limits, earned
but unused vacation time and sick leave, which will be paid to employees upon separation
from Village service. All vacation and sick leave pay is accrued when incurred in the
government-wide and proprietary fund financial statements. In the governmental funds, a
liability is recorded only for vacation and sick leave payouts for employee separations that
occurred prior to September 30, 2008 and were subsequently paid with current available
financial resources. The general fund typically is used to liquidate the liability for
compensated absences.
5. Long-term obligations
In the government-wide financial statements, and proprietary fund types in the fund
financial statements, long-term debt and other long-term obligations are reported as
liabilities in the applicable governmental activities, business-type activities, or proprietary
fund type statement of net assets. Bond premiums and discounts, as well as issuance costs,
are deferred and amortized over the life of the bonds using the straight-line amortization
method. The results of using this method do not differ significantly from the effective
interest method. Bonds payable are reported net of the applicable bond premium or
discount.
In the fund financial statements, governmental fund types recognize bond premiums and
discounts, as well as bond issuance costs, during the current period. The face amount of
debt issued is reported as other financing sources. Premiums received on debt issuances
VILLAGE OF KEY BISCAYNE, FLORIDA
NOTES TO BASIC FINANCIAL STATEMENTS
(Continued)
-26-
NOTE 1. SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES (Continued)
D. Assets, Liabilities, and Net Assets or Equity (Continued)
5. Long-Term Obligations (Continued)
are reported as other financing sources while discounts on debt issuances are reported as
other financing uses. Issuance costs, whether or not withheld from the actual debt proceeds
received, are reported as debt service expenditures.
6. Use of Estimates
The preparation of financial statements in conformity with accounting principles generally
accepted in the United States requires management to make estimates and assumptions that
affect the amounts of assets, liabilities, disclosures of contingent liabilities, revenues and
expenditures/expenses reported in the financial statements and accompanying notes. These
estimates include assessing the collectability of receivables, the realization of pension
obligations and the useful lives of capital assets. Although these estimates as well as all
estimates are based on management’s knowledge of current events and actions it may
undertake in the future, they may ultimately differ from actual results.
7. Fund Equity
In the fund financial statements, governmental funds report reservations of fund balance
for amounts that are not available for appropriation or are legally restricted by outside
parties for use for a specific purpose. Designations of fund balance, where noted, represent
tentative management plans that are subject to change.
NOTE 2. EXPLANATION OF CERTAIN DIFFERENCES BETWEEN THE GOVERNMENTAL
FUND BALANCE SHEET AND THE GOVERNMENT-WIDE STATEMENT OF NET
ASSETS
The governmental fund balance sheet includes a reconciliation between fund balance – total
governmental funds and net assets – governmental activities as reported in the government-wide
statement of net assets. One element of that reconciliation explains that long-term liabilities,
including bonds payable, are not due and payable in the current period and therefore are not
reported in the funds. The details of this $36,796,667 difference are as follows:
Bonds payable 33,987,810$
Debt issuance cost (20,769)
Capital leases payable 213,793
Compensated absences 2,287,753
Accrued interest payable 328,080
36,796,667$
VILLAGE OF KEY BISCAYNE, FLORIDA
NOTES TO BASIC FINANCIAL STATEMENTS
(Continued)
-27-
NOTE 3. DEPOSITS AND INVESTMENTS
Deposits
In addition to insurance provided by the Federal Depository Insurance Corporation, all
deposits are held in banking institutions approved by the State Treasurer of the State of
Florida to hold public funds. Under Florida Statutes Chapter 280, Florida Security for Public
Deposits Act, the State Treasurer requires all Florida qualified public depositories to deposit
with the Treasurer or another banking institution eligible collateral. In the event of a failure of
a qualified public depository, the remaining public depositories would be responsible for
covering any resulting losses. Accordingly, all amounts reported as deposits are insured or
collateralized with securities held by the entity or its agent in the entity’s name.
Investments
The Village is authorized to invest in obligations of the U.S. Treasury, its agencies,
instrumentalities and the Local Government Surplus Funds Trust Fund administered by the State
Board of Administration. The investments follow the investment rules defined in Florida
Statutes Chapter 218.415. The investment policy defined in the statutes attempts to promote,
through state assistance, the maximization of net interest earnings on invested surplus funds of
local units of governments while limiting the risk to which the funds are exposed.
Investments – Village
As of September 30, 2008, the Village had the following investments with its corresponding
maturities in its portfolio:
Fair Less
Investments Value Than 1
Repurchase agreements 3,414,174$ 3,414,174
(In Years)
Investment Maturities
Interest Rate Risk
Interest rate risk refers to the portfolio's exposure to fair value losses arising from
increasing interest rates. The Village does not have a formal investment policy that limits
investment maturities as a means of managing its exposure to market value losses arising
from increasing interest rates.
Credit Risk
State law and the Village’s investment policy limits investments in bonds, U.S. treasuries
and agency obligations, or other evidences of indebtedness to the top ratings issued by
nationally recognized statistical rating organizations (NRSRO) of the United States. The
Village’s repurchase agreements are collateralized by U.S. agency obligations and were all
rated AAA under Standard & Poor's ratings and AAA under Moody's ratings.
VILLAGE OF KEY BISCAYNE, FLORIDA
NOTES TO BASIC FINANCIAL STATEMENTS
(Continued)
-28-
NOTE 3. DEPOSITS AND INVESTMENTS (Continued)
Investments – Village (Continued)
Concentration of Credit Risk
As of September 30, 2008, the value of each position held in the Village’s portfolio
comprised less than 5% of the Village investment assets.
Investments – Pension Plan
As of September 30, 2008, the Village’s Defined Benefit Pension Plan had the following
investments with its corresponding maturities in its portfolio:
Fair Less
Investments Value Than 1 1-5 6-10 10+
Bond mutual funds 3,530,729$ 88,268$ 2,333,812$ 688,492$ 420,157$
Investment Maturities (In Years)
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.
VILLAGE OF KEY BISCAYNE, FLORIDA
NOTES TO BASIC FINANCIAL STATEMENTS
(Continued)
-29-
NOTE 3. DEPOSITS AND INVESTMENTS (Continued)
Investments – Pension Plan (Continued)
Concentration of Credit Risk
The Plan's investment policy prohibits equity and fixed income securities concentrations
greater than 5% and 10%, respectively, in any one issuer with the exception of U.S.
government or agency issues. As of September 30, 2008, the value of each position held in
the Plan’s portfolio comprised less than 5% of Plan investment assets.
Risks and Uncertainties
The Plan invests in various investment securities. Investment securities are exposed to
various risks such as interest rate, market, and credit risks. Due to the level of risk
associated with certain investment securities, it is at least reasonably possible that changes
in the values of investment securities will occur in the near term and that such changes
could materially affect the amounts reported in the statement of plan net assets. The Plan,
through its investment advisor, monitors the Plan’s investment and the risks associated
therewith on a regular basis which the Plan believes minimizes these risks.
Plan contributions are made and the actuarial present value of accumulated plan benefits are
reported based on certain assumptions pertaining to interest rates, inflation rates and employee
demographics, all of which are subject to change. Due to uncertainties inherent in the
estimations and assumptions process, it is at least reasonably possible that changes in these
estimates and assumptions in the near term would be material to the financial statements.
NOTE 4. RECEIVABLES
Receivables as of September 30, 2008 for the Village’s individual major funds, nonmajor funds and
fiduciary fund in the aggregate, including the allowances for uncollectible accounts, are as follows:
Special Storm- Sanitary Solid Pension
General Revenue water Sewer Waste Trust Fund Total
Customers billed -$ -$ 158,099 - 540,993 -$ 699,092$
Contributions - - - - - 146,210 146,210
Property taxes 311,391 - - - - - 311,391
Interest 2,495 - - - - - 2,495
Intergovernmental 144,117 833,715 - - - - 977,832
Other 580,363 - - 2,369,972 - - 2,950,335
Due from other governments 1,000,000 - - - - - 1,000,000
Gross receivables 2,038,366 833,715 158,099 2,369,972 540,993 146,210 6,087,355
Less allowance for uncollectibles - - - - (21,640) - (21,640)
Net total receivables 2,038,366$ 833,715$ 158,099$ 2,369,972$ 519,353$ 146,210$ 6,065,715$
VILLAGE OF KEY BISCAYNE, FLORIDA
NOTES TO BASIC FINANCIAL STATEMENTS
(Continued)
-30-
NOTE 5. PROPERTY TAXES
Property values are assessed on a county-wide basis by the Miami-Dade County Property
Appraiser as of January 1, the lien date, of each year and are due the following November 1.
Taxable value of property within the Village is certified by the Property Appraiser and the
Village levies a tax millage rate upon the taxable value, which will provide revenue required for
the fiscal year beginning October 1.
Property taxes levied each November 1, by the Village and all other taxing authorities within the
County, are centrally billed and collected by Miami-Dade County, with remittances to the Village
of their proportionate share of collected taxes. Taxes for the fiscal year beginning October 1 are
billed in the month of November, subject to a 1% per month discount for the period November
through February, and are due no later than March 31. On April 1, unpaid amounts become
delinquent with interest and penalties added thereafter. Beginning June 1, tax certificates
representing delinquent taxes with interest and penalties are sold by Miami-Dade County, with
remittance to the Village for its share of those receipts. At September 30, 2008, there were no
material delinquent taxes.
NOTE 6. INTERFUND RECEIVABLES, PAYABLES, AND TRANSFERS
The composition of interfund balances as of September 30, 2008 is as follows:
Due from/to other funds:
Receivable Fund Payable Fund Amount
General Special revenue 4,597,457$
Sanitary sewer 1,656,427
Solid Waste 397,789
Stormwater utility 117,775
Capital improvement Sanitary sewer 382,970
General 72,984
Sanitary Sewer Capital Improvement 428,828
7,654,230$
The outstanding balances between funds result mainly from the time lag between the dates that
(1) interfund goods and services are provided or reimbursable expenditures occur, (2)
transactions are recorded in the accounting system, and (3) payments between funds are made.
Interfund transfers:
General Capital Sanitary
Fund Improvement Sewer Total
Transfers out:
General fund -$ 4,533,094$ 28,134$ 4,561,228$
Transfers In
VILLAGE OF KEY BISCAYNE, FLORIDA
NOTES TO BASIC FINANCIAL STATEMENTS
(Continued)
-31-
Transfers are used to move unrestricted general fund revenues to finance various capital
projects in accordance with budgetary authorizations.
NOTE 7. CAPITAL ASSETS
Capital asset activity for the year ended September 30, 2008 was as follows:
Beginning Ending
Balance Increases Decreases Balance
Governmental activities:
Capital assets, not being depreciated:
Land 21,833,837$ -$ -$ 21,833,837$
Construction in progress 10,711,571 2,139,941 - 12,851,512
Total capital assets, not being depreciated 32,545,408 2,139,941 - 34,685,349
Capital assets, being depreciated:
Buildings 23,727,322 498,386 - 24,225,708
Improvements other than buildings 14,878,443 1,264,066 - 16,142,509
Furniture, fixtures and equipment 5,151,754 593,280 (97,257) 5,647,777
Total capital assets, being depreciated 43,757,519 2,355,732 (97,257) 46,015,994
Less accumulated depreciation for:
Buildings (2,417,570) (479,571) - (2,897,141)
Improvements other than buildings (3,322,438) (334,005) - (3,656,443)
Furniture, fixtures and equipment (3,057,661) (748,542) - (3,806,203)
Total accumulated depreciation (8,797,669) (1,562,118) - (10,359,787)
Total capital assets, being depreciated, net 34,959,850 793,614 (97,257) 35,656,207
Governmental activities capital assets, net 67,505,258$ 2,933,555$ (97,257)$ 70,341,556$
Business-type activities:
Capital assets, not being depreciated:
Construction in progress 1,089,039$ 7,573,282$ -$ 8,662,321$
Total capital assets, not being depreciated 1,089,039 7,573,282 - 8,662,321
Capital assets, being depreciated:
Stormwater utility system 10,056,660 - - 10,056,660
Total capital assets, being depreciated 10,056,660 - - 10,056,660
Less accumulated depreciation for:
Stormwater utility system (2,730,810) (273,919) - (3,004,729)
Total accumulated depreciation (2,730,810) (273,919) - (3,004,729)
Total capital assets, being depreciated, net 7,325,850 (273,919) - 7,051,931
Business-type activities capital assets, net 8,414,889$ 7,299,363$ -$ 15,714,252$
VILLAGE OF KEY BISCAYNE, FLORIDA
NOTES TO BASIC FINANCIAL STATEMENTS
(Continued)
-32-
NOTE 7. CAPITAL ASSETS (Continued)
Depreciation expense was charged as functions/programs of the primary government as follows:
Governmental activities:
General government 323,126$
Police 305,649
Fire 325,408
Public works 326,087
Building, zoning and planning 16,253
Parks 265,595
Total depreciation expense - governmental activities 1,562,118$
Business-type activities:
Stormwater 273,919$
NOTE 8. SHORT-TERM DEBT INSTRUMENTS AND LIQUIDITY
On August 15, 2008, the Village issued a short-term water and sewer revenue note in an
aggregate principal amount not to exceed $5,000,000 for the purpose of financing a portion of the
costs of sewer system improvements within the Village, financing architectural, engineering,
environmental, legal, and other planning costs related thereto, and paying costs of issuance of the
note. The note is secured by a covenant to budget and appropriate from legally available non-ad
valorem revenues of the Village and is expected to be repaid over one year. Interest will accrue
on the outstanding principal balance from its date of issuance payable on February 12, 2009 and
upon maturity, August 12, 2009, at an interest rate equal to 2.69% per annum. Total interest paid
over the life of note will be $136,368.
VILLAGE OF KEY BISCAYNE, FLORIDA
NOTES TO BASIC FINANCIAL STATEMENTS
(Continued)
-33-
NOTE 9. LONG-TERM DEBT
The following is a summary of changes in long-term liabilities of the Village for governmental
activities for the year ended September 30, 2008:
Beginning Ending Due Within
Balance Additions Reductions Balance One Year
Governmental Activities
Bonds payable:
Land acquisition and capital improvement
revenue bonds, Series 1999 8,040,000$ -$ (455,000)$ 7,585,000$ 475,000$
Land acquisition and capital improvement
revenue bonds, Series 2000 8,800,000 - (440,000) 8,360,000 465,000
Capital improvement bonds, Series 2002 8,681,284 - (414,676) 8,266,608 451,434
Land acquisition and capital improvement
revenue bonds, Series 2004 2,800,000 - (69,929) 2,730,071 286,476
Transportation tax revenue bonds,
Series 2005 3,500,000 - (95,956) 3,404,044 147,645
Transportation tax revenue bonds,
Series 2006 3,846,275 - (204,188) 3,642,087 212,583
Total bonds payable 35,667,559 - (1,679,749) 33,987,810 2,038,138
Other liabilities:
Capital leases 415,341 - (201,548) 213,793 114,287
Compensated absences 1,457,963 922,343 (92,553) 2,287,753 218,415
Total other liabilities 1,873,304 922,343 (294,101) 2,501,546 332,702
Governmental activities long-term liabilities 37,540,863$ 922,343$ (1,973,850)$ 36,489,356$ 2,370,840$
Land Acquisition and Capital Improvement Revenue Bonds
On July 23, 1999, the Village issued $10,000,000 Land Acquisition and Capital Improvement
Revenue Bonds, Series 1999, the proceeds of which were used for the acquisition of property
and financing of the construction of the Civic Center project. The bonds mature on July 23,
2019. The Village has pledged non-ad valorem revenues to secure payment of the principal
and interest on the bonds. The bonds are due in annual principal installments. Interest accrues
at 4.715% per annum.
Debt service requirements to maturity are as follows:
Principal Interest Total
Fiscal year ending September 30:
2009 475,000$ 346,435$ 821,435$
2010 500,000 323,449 823,449
2011 525,000 299,285 824,285
2012 550,000 273,942 823,942
2013 580,000 247,302 827,302
2014-2018 3,400,000 786,715 4,186,715
2019 1,555,000 75,809 1,630,809
7,585,000$ 2,352,937$ 9,937,937$
VILLAGE OF KEY BISCAYNE, FLORIDA
NOTES TO BASIC FINANCIAL STATEMENTS
(Continued)
-34-
NOTE 9. LONG-TERM DEBT (Continued)
Capital Improvement Revenue Bonds
On July 11, 2000, the Village issued a second series of $10,000,000 Capital Improvement
Revenue Bonds, Series 2000, the proceeds of which were used for the acquisition of property
and financing of the construction of the Civic Center project. The bonds mature on July 11,
2020. The Village has pledged non-ad valorem revenues to secure payment of the principal
and interest on the bonds. The bonds are due in annual principal installments. Interest accrues
at 5.24% per annum.
Debt service requirements to maturity are as follows:
Principal Interest Total
Fiscal year ending September 30:
2009 465,000$ 425,881$ 890,881$
2010 490,000 400,860 890,860
2011 515,000 374,529 889,529
2012 540,000 346,888 886,888
2013 570,000 317,806 887,806
2014-2018 3,330,000 1,095,946 4,425,946
2019-2020 2,450,000 197,027 2,647,027
8,360,000$ 3,158,937$ 11,518,937$
On November 1, 2002, the Village issued Capital Improvement Revenue Bonds, Series 2002
for the purpose of financing a portion of the cost of construction and equipping of a
community center including a parking garage and swimming pool. The bonds mature on
November 1, 2022. The Village has pledged non-ad valorem revenues to secure payment of
the principal and interest on the bonds. Interest is due quarterly at a rate of 3.95% up to
November 1, 2012. From November 1, 2012 to maturity, the interest rate will become a
variable rate based on certain indices.
Debt service to maturity is as follows:
Principal Interest Total
Fiscal year ending September 30:
2009 451,434$ 289,765$ 741,199$
2010 467,860 273,339 741,199
2011 484,883 256,316 741,199
2012 502,526 238,673 741,199
2013 520,811 220,388 741,199
2014-2018 2,902,485 803,510 3,705,995
2019-2023 2,936,609 242,259 3,178,868
8,266,608$ 2,324,250$ 10,590,858$
VILLAGE OF KEY BISCAYNE, FLORIDA
NOTES TO BASIC FINANCIAL STATEMENTS
(Continued)
-35-
NOTE9. LONG-TERM DEBT (Continued)
Land Acquisition and Capital Improvement Revenue Bonds
On December 12, 2004, the Village issued $2,800,000 of capital improvement and land
acquisition revenue bonds, Series 2004 for the purpose of completing the road construction
associated with the new administration, fire and community center buildings. The bonds
mature on November 1, 2022. The Village has pledged non-ad valorem revenues to secure
payment of the principal and interest on the bonds. The bonds are due in quarterly principal
installments. Interest accrues at 3.83% per annum.
Debt service requirements to maturity are as follows:
Principal Interest Total
Fiscal year ending September 30:
2009 286,476$ 100,480$ 386,956$
2010 297,607 89,349 386,956
2011 140,107 80,195 220,302
2012 145,551 74,751 220,302
2013 151,206 69,096 220,302
2014-2018 848,315 252,657 1,100,972
2019-2023 860,809 76,016 936,825
2,730,071$ 742,544$ 3,472,615$
Transportation Tax Revenue Bonds
On July 15, 2005, the Village issued Transportation Tax Revenue Bonds, Series 2005, for the
purpose of financing a portion of the costs of road improvements within the Village (Crandon
Boulevard Improvements – Phase II). The issuance was established similar to bond
anticipation notes where the principal amount is the lesser of $3,500,000 or the advances made
under the bond. Only the amount advanced becomes an obligation of the Village. During the
fiscal year ended September 30, 2006, the Village drew down the remaining $3,450,000. The
Village has pledged Transportation Tax Revenues to secure payment of the principal and
interest on the bonds. For the fiscal year ended September 30, 2008, debt service represents
approximately 78% of the pledged revenue. The bonds mature on July 1, 2025 and are due in
quarterly principal installments. Interest accrues at 4.09% per annum.
VILLAGE OF KEY BISCAYNE, FLORIDA
NOTES TO BASIC FINANCIAL STATEMENTS
(Continued)
-36-
NOTE 9. LONG-TERM DEBT (Continued)
Transportation Tax Revenue Bonds (Continued)
Debt service requirements to maturity are as follows:
Principal Interest Total
Fiscal year ending September 30:
2009 147,645$ 138,219$ 285,864$
2010 204,001 130,084 334,085
2011 212,474 121,612 334,086
2012 169,602 113,313 282,915
2013 160,687 105,161 265,848
2014-2018 900,424 428,860 1,329,284
2019-2023 1,103,593 225,698 1,329,291
2024-2025 505,618 26,115 531,733
3,404,044$ 1,289,062$ 4,693,106$ Road Improvement Revenue Bonds
On December 14, 2006, the Village issued Road Improvement Revenue Bonds, Series 2006,
for the purpose of financing a portion of the costs of road improvements within the Village
(Crandon Boulevard Improvements – Phase III), financing architectural, engineering,
environmental, legal, and other planning costs. The bonds mature on December 1, 2021. The
Village has pledged toll revenues to secure payment of the principal and interest on the bonds.
For the fiscal year ended September 30, 2008, debt service represents approximately 49% of
the pledged revenue. The bonds are due in quarterly principal installments. Interest accrues at
4.05% per annum.
Debt service requirements to maturity are as follows:
Principal Interest Total
Fiscal year ending September 30:
2009 212,583$ 144,542$ 357,125$
2010 221,325 135,800 357,125
2011 230,425 126,700 357,125
2012 239,900 117,224 357,124
2013 249,765 107,360 357,125
2014-2018 1,411,587 374,039 1,785,626
2019-2022 1,076,502 72,927 1,149,429
3,642,087$ 1,078,592$ 4,720,679$
VILLAGE OF KEY BISCAYNE, FLORIDA
NOTES TO BASIC FINANCIAL STATEMENTS
(Continued)
-37-
NOTE 9. LONG-TERM DEBT (Continued)
Capital Leases
On June 16, 2003, the Village entered into a Master Lease agreement, with a local financial
institution as lessee for financing the acquisition of Village vehicles and equipment for the
Fire-Rescue Department with a fair value of $880,963. The amount of the lease obligation is
$691,744 and final payment is due on November 15, 2009. Lease payments are due annually.
Interest accrues at 2.994% per annum.
On December 15, 2004, the Village entered into a Master Lease agreement for financing the
acquisition of Village vehicles and equipment for the Police Department with a fair value of
$378,413. The amount of the lease obligation was $380,726 and the final payment was made
in December 2007.
On January 10, 2005, the Village entered into a Master Lease agreement for financing the
acquisition of a Village vehicle and equipment for the Police Department with a fair value of
$23,744. The amount of the lease obligation is $23,744 and final payment is due on January
10, 2009. Lease payments are due annually. Interest accrues at 4.20% per annum.
The future minimum lease obligations and the net present value of the minimum lease
payments as of September 30, 2008 were as follows:
Fiscal year ending September 30:
2009 114,287$
2010 109,137
Total minimum lease payments 223,424
Less amount representing interest (9,631)
Present value of minimum lease payments 213,793$
The following is a summary of changes in long-term liabilities of the Village for business-type
activities for the year ended September 30, 2008:
Due
Beginning Ending Within
Balance Additions Reductions Balance One Year
Business-type Activities
Bonds and loan payable:
Stormwater utility revenue bonds 5,550,000$ -$ (350,000)$ 5,200,000$ 365,000$
Revolving loan 359,008 - (19,089) 339,919 19,580
Total bonds and loan payable 5,909,008 - (369,089) 5,539,919 384,580
Business-type activities
long-term liabilities 5,909,008$ -$ (369,089)$ 5,539,919$ 384,580$
VILLAGE OF KEY BISCAYNE, FLORIDA
NOTES TO BASIC FINANCIAL STATEMENTS
(Continued)
-38-
NOTE 9. LONG-TERM DEBT (Continued)
Stormwater Utility Revenue Bonds
On January 26, 1999, the Village issued $7,200,000 Stormwater Utility Revenue Bonds,
Series 1999, the proceeds of which were used to pay the principal of the $7,200,000 Bond
Anticipation Notes, Series 1995. The bonds mature on January 26, 2019. The Village has
pledged stormwater utility fees and non-ad valorem revenues to secure payment of the
principal and interest on the bonds. The bonds are due in annual principal installments on
October 1st. Interest accrues at 4.13% per annum.
Debt service requirements to maturity are as follows:
Principal Interest Total
Fiscal year ending September 30:
2009 365,000$ 214,760$ 579,760$
2010 385,000 199,686 584,686
2011 405,000 183,785 588,785
2012 425,000 167,058 592,058
2013 445,000 149,506 594,506
2014-2018 2,580,000 453,269 3,033,269
2019 595,000 24,573 619,573
5,200,000$ 1,392,637$ 6,592,637$
State Revolving Fund Loan
In June 1996, the Village entered into a loan agreement in the amount of $887,983 for the
financing of the planning and engineering of the proposed sanitary sewer construction project
under a State Revolving Fund Loan. The proceeds were received in fiscal year 1998. The
loan is payable in semi-annual payments over 20 years beginning on April 15, 2003 at an
interest rate of 2.56% per annum. The loan matures on October 15, 2022.
Principal Interest Total
Fiscal year ending September 30:
2009 19,580$ 8,554$ 28,134$
2010 20,084 8,050 28,134
2011 20,602 7,532 28,134
2012 21,133 7,001 28,134
2013 21,677 6,457 28,134
2014-2018 117,058 23,613 140,671
2019-2023 119,786 7,736 127,522
339,920$ 68,943$ 408,863$
VILLAGE OF KEY BISCAYNE, FLORIDA
NOTES TO BASIC FINANCIAL STATEMENTS
(Continued)
-39-
NOTE 10. COMMITMENTS AND CONTINGENCIES
Litigation
The Village is involved in several lawsuits incidental to its operations, the outcome of which,
in the opinion of management and legal counsel, would not have a material adverse effect on
the financial condition of the Village.
Grants Contingency
Federal and State programs in which the Village participates are subject to audit by grantor
agencies. Any disallowed claims, including amounts already collected, may constitute a liability
of the applicable funds. In the opinion of management, future disallowances of grant
expenditures, if any, would not have a material adverse effect on the financial condition of the
Village.
Construction Commitment
The Village has outstanding construction commitments of approximately $6,000,000 for its
sanitary sewer project.
NOTE 11. DEFICIT FUND BALANCE
The Special Revenue Fund has a deficit fund balance of $3,701,623 which is being funded from
the General Fund and from revenues derived from an interlocal agreement with Miami-Dade
County over a period of approximately 12 years.
NOTE 12. RESERVED FUND BALANCES
As of September 30, 2008, fund balances in the general fund have been reserved for the following
purposes:
Emergencies 4,000,001$
Master Plan initiatives 1,873,764
Working capital 1,000,000
Playing fields 416,403
Capital Improvement Plan 1,130,089
Compensated absences 595,916
Recreation facilities 300,000
Capital lease 298,682
Building inspections 554,819
Law enforcement seizures 284,639
Prepaids 261,373
Roadway improvements 175,000
Police Labor 90,000
Fire Grant Revenue (UASI)18,389
Community Center equipment 50,000
Fire vehicle replacements 50,000
Fire Rescue Transport Fees 171,839
Police/Administration building 13,632
Fire Station building 13,632
11,298,178$
VILLAGE OF KEY BISCAYNE, FLORIDA
NOTES TO BASIC FINANCIAL STATEMENTS
(Continued)
-40-
NOTE 13. DEFINED CONTRIBUTION PLANS
The Village as a single-employer contributes to the Village of Key Biscayne Money Purchase
Plans, which are defined contribution plans created in accordance with Internal Revenue Code
Section 401(a). Under one Plan, which is available to Village employees, the Village contributes
12% and the employees contribute 6%. Under the second plan, which is available only to sworn
or certified police officers and firefighters, the Village contributes 12% and there is no employee
contribution. Beginning October 1, 1997, the police officers and firefighters, which elected to
participate in the defined benefit pension plan (see Note 14), were no longer eligible to contribute
to the 401(a) plan. Employer contributions for the fiscal year ended September 30, 2008 were
$446,750 while the employee contributions were $140,735. Amendments to the Plan must be
authorized by the Village Council.
NOTE 14. DEFINED BENEFIT PENSION PLAN
Plan Description
Effective October 1, 1997, the Village established a single-employer Public Employee
Retirement System (PERS) to provide pension benefits for its police officers and firefighters.
The PERS is considered to be part of the Village’s financial reporting entity and is included in
the Village’s financial reports as a pension trust fund. The Plan was created under Village
Ordinance 97-21. The latest available actuarial valuation is as of October 1, 2007. The PERS
does not issue a stand-alone financial report for the Plan.
Under this plan, all full-time police officers and firefighters employed by the Village are
eligible to participate. The monthly retirement benefit is equal to 3% of the average final
compensation for each year of service. The calculation for the average final compensation is
computed as one-twelfth of the average salary of the five highest years within the last ten
years of credited service. Credited service is determined by the total number of years
employed by the Village since August 1, 1993. Amendments to the Plan must be authorized
by the Village Council.
Members are vested after 5 years of service. Vested employees may retire at the earlier of age
55 and the completion of five years of credited service or the age of 52 and the completion of
25 years of credited service, or at age 50 with 5 years of service with the benefit discounted
3% for each year under age 55.
Administrative costs of the plan are financed through investment earnings. Benefits and
refunds are recognized when due and payable in accordance with the terms of the plan.
Benefits and funds are recorded when paid.
VILLAGE OF KEY BISCAYNE, FLORIDA
NOTES TO BASIC FINANCIAL STATEMENTS
(Continued)
-41-
NOTE 14. DEFINED BENEFIT PENSION PLAN (Continued)
Plan Description (Continued)
At October 1, 2007 (date of the latest actuarial valuation), Plan membership consisted of the
following:
Retirees and beneficiaries currently receiving benefits and terminated employees
entitled to benefits but not yet receiving them 16
Current employees:
Vested 33
Non-vested 32
Total 65
Funding Policy
The Village’s contribution rate is adjusted each year to an amount equal to the total pension
cost for the year, as determined by the most recent actuarial valuation, less the amount of
revenue received from the State of Florida pursuant to Chapters 175 and 185 of the Florida
Statutes. The Village’s contribution rate was 11.48% of covered payroll for the year ended
September 30, 2008 which was determined by the October 1, 2006 actuarial valuation. The
participant contribution rate which is fixed by ordinance is 10.5%. This funding policy is
designed to limit the Village’s exposure to contribute to the Plan. State contributions are
recognized as a revenue and expenditure in the general fund.
Funding Status and Funding Progress
The funded status of the plan as of October 1, 2007, the most recent actuarial valuation date, is
as follows:
Actuarial
Accrued UAAL
Actuarial Liability Unfunded As % of
Actual Value of (AAL) - AAL Funded Covered Covered
Valuation Assets Entry Age (UAAL) Ration Payroll Payroll
Date (a)(b)(b) - (a)(a) / (b)(c)(b - a) / c
10/1/07 9,017,393$ 12,335,707$ 3,318,314$ 73.1% 5,740,991$ 58%
The schedule of funding progress, presented as required supplementary information (RSI)
following the notes to the financial statements, presents multiyear trend information about
whether the actuarial value of plan assets are increasing or decreasing over time relative to the
AAL for benefits.
VILLAGE OF KEY BISCAYNE, FLORIDA
NOTES TO BASIC FINANCIAL STATEMENTS
(Continued)
-42-
NOTE 14. DEFINED BENEFIT PENSION PLAN (Continued)
Funding Status and Funding Progress (Continued)
Additional information as of the latest actuarial valuation follows:
Valuation date 10/1/07
Contribution Rates:
Employer 13.11%
Plan members 10.50%
Actuarial cost method Entry age normal
Amortization method Level percent of pay, closed
Remaining amortization 30 years
Asset valuation method 5 year Smoothed Market value
Actuarial assumptions:
Investment rate of return*8.5% per year compounded annually,
net of investment related expenses
Projected salary increases*9.4% to 3.5% variable
Cost of living adjustments N/A
*Includes inflation and other general increases at 4%
Annual Pension Cost and Net Pension Asset
The annual pension cost and net pension obligation (asset) for the current year was as follows:
Annual required contribution 839,400$
Interest on net pension asset (10,680)
Adjustment to annual required contribution 14,818
Annual pension cost 843,538
Contributions made 839,400
Decrease in net pension asset 4,138
Net pension asset, beginning of year (125,650)
Net pension asset, end of year (121,512)$
VILLAGE OF KEY BISCAYNE, FLORIDA
NOTES TO BASIC FINANCIAL STATEMENTS
(Continued)
-43-
NOTE 14. DEFINED BENEFIT PENSION PLAN (Continued)
Annual Pension Cost and Net Pension Asset (Continued)
The annual required contribution for the current year was determined as part of the October 1,
2006 actuarial valuation using the entry age normal funding method. The actuarial
assumptions included (a) 8.5% investment rate of return (net of investment related expenses)
and (b) projected salary increases of 9.4% to 3.5% variable per year. Both (a) and (b)
included an inflation component of 4%. The actuarial value of assets was determined using
the difference between actual and expected return recognized over five years.
Annual Percentage Net
Fiscal Year Pension of APC Obligation
Ended Cost (APC)Contributed (Asset)
9/30/2006 $ 733,878 99.5% $ (142,067)
9/30/2007 777,937 99.5% (125,650)
9/30/2008 843,538 99.5% (121,512)
Trend Information
NOTE 15. RISK MANAGEMENT
The Village is exposed to various risks of loss related to torts, theft of, damage to and destruction
of assets, errors and omissions and natural disasters for which the Village carries commercial
insurance. There was no reduction in insurance coverage from coverages in the prior year and
there were no settlements that exceeded insurance coverage for each of the past three years.
NOTE 16. PRIOR PERIOD ADJUSTMENT
Government-Wide
Governmental Activities:
Net assets of the governmental activities, as of October 1, 2007, were restated to correct errors
noted in the prior year as follows:
Net assets - beginning, as previously reported 40,137,561$
Correction of accrued benefits payable 121,514$
Correction of accounts payable (325,612)
Correction of accounts r eceivable 1,000,000
Total adjustment 795,902
Net assets - beginning, as restated 40,933,463$
VILLAGE OF KEY BISCAYNE, FLORIDA
NOTES TO BASIC FINANCIAL STATEMENTS
(Continued)
-45-
NOTE 16. PRIOR PERIOD ADJUSTMENT (Continued)
Governmental Funds
General Fund:
Fund balance of the General Fund, as of October 1, 2007, was restated to reflect the
adjustment to add the accrued benefits payable incorrectly expensed in the year ended
September 30, 2007:
Fund balance - beginning, as previously reported 9,875,416$
Correction of accrued benefits payable 121,514
9,996,930$
Capital Improvement Fund:
Fund balance of the Capital Improvement Fund, as of October 1, 2007, was restated to reflect
the adjustment to add the receivable for grant funds related to a cost reimbursement grant in
which the funds were expended in the year ended September 30, 2007, and therefore the
revenues were to be recognized in that year:
Fund balance - beginning, as previously reported 2,954,753$
Correction of accounts payable (325,612)
2,629,141$
Special Revenue Fund:
Fund balance of the Special Revenue Fund, as of October 1, 2007, was restated to reflect the
adjustment to add the accounts payable incorrectly expensed in the year ended September 30,
2007:
Fund balance - beginning, as previously reported (2,482,196)$
Correction of accounts r eceivable 1,000,000
(1,482,196)$
REQUIRED SUPPLEMENTARY INFORMATION
Actual Variance
Actual Amounts with Final
Amounts Prior on a Budget -
on a GAAP Year Budgetary Positive
Original Final Basis Reserves Basis (Negative)
Revenues:
Property taxes 19,802,903$ 19,802,903$ 20,051,239$ -$ 20,051,239$ 248,336$
Utility taxes 2,365,095 2,365,095 2,458,388 - 2,458,388 93,293
Franchise fees 860,000 860,000 1,064,666 - 1,064,666 204,666
Licenses and permits 1,075,000 1,075,000 1,240,290 - 1,240,290 165,290
Intergovernmental 999,000 999,000 960,045 - 960,045 (38,955)
Charges for services 1,647,968 1,647,968 1,994,396 - 1,994,396 346,428
Grants 7,500 7,500 251,180 - 251,180 243,680
Interest - - 223,907 - 223,907 223,907
Other income 388,500 388,500 8,003 - 8,003 (380,497)
Total revenues 27,145,966 27,145,966 28,252,114 - 28,252,114 1,106,148
Expenditures:
Current:
General government:
Elected officials 468,963 468,963 429,974 - 429,974 38,989
Village Clerk 451,276 451,276 312,383 - 312,383 138,893
Administration 938,822 938,822 852,940 - 852,940 85,882
Village Attorney 383,000 383,000 734,351 (351,351) 383,000 -
Total general government 2,242,061 2,242,061 2,329,648 (351,351) 1,978,297 263,764
Public safety:
Police 5,104,248 5,104,248 4,863,765 - 4,863,765 240,483
Fire 5,568,523 5,568,523 5,744,775 (176,252) 5,568,523 -
Total public safety 10,672,771 10,672,771 10,608,540 (176,252) 10,432,288 240,483
Public works 1,921,489 1,921,489 1,720,689 - 1,720,689 200,800
Building, zoning and planning 1,640,675 1,640,675 1,513,019 (379,001) 1,134,018 506,657
Parks and recreation 2,956,003 2,956,003 3,335,004 - 3,335,004 (379,001)
Debt service:
Principal 1,586,219 1,586,219 1,379,605 - 1,379,605 206,614
Interest and fiscal charges 1,593,683 1,593,683 1,145,804 - 1,145,804 447,879
Total expenditures 22,612,901 22,612,901 22,032,309 (906,604) 21,125,705 1,487,196
Excess of revenues over
expenditures 4,533,065 4,533,065 6,219,805 906,604 7,126,409 2,593,344
Other financing uses:
Appropriation of prior years'
reserves - - - (906,604) (906,604) (906,604)
Transfers out (4,533,065) (4,533,065) (4,561,228) - (4,561,228) (28,163)
Total other financing uses (4,533,065) (4,533,065) (4,561,228) (906,604) (5,467,832) (934,767)
Net change in fund balances -$ -$ 1,658,577$ -$ 1,658,577$ 1,658,577$
Budgeted Amounts
VILLAGE OF KEY BISCAYNE, FLORIDA
BUDGETARY COMPARISON SCHEDULE
GENERAL FUND
FISCAL YEAR ENDED SEPTEMBER 30, 2008
REQUIRED SUPPLEMENTARY INFORMATION
See note to budgetary comparison schedule.
-45-
VILLAGE OF KEY BISCAYNE, FLORIDA
REQUIRED SUPPLEMENTARY INFORMATION
NOTE TO BUDGETARY COMPARISON SCHEDULE
FISCAL YEAR ENDED SEPTEMBER 30, 2008
-46-
NOTE 1. BUDGETS AND BUDGETARY ACCOUNTING
An annual appropriated budget is prepared for the general fund. The Village prepares a budget
for its special revenue fund and its capital projects fund, however, these budgets are prepared as
project budgets and not as annually appropriated budgets.
The Village follows these procedures in establishing the budgetary data reflected in the financial
statements:
(a) The Village Manager submits to the Council a proposed operating budget for the ensuing
fiscal year. The operating budget includes appropriations and the means of financing them
with an explanation regarding each expenditure that is not of a routine nature.
(b) Public hearings are conducted to obtain taxpayer comments.
(c) Prior to October 1, the budget is legally enacted through passage of an ordinance.
(d) The Village Council, by motion, may make supplemental appropriations for the year up to the
amount of revenues in excess of those estimated. During fiscal year ended September 30,
2008, there were no supplemental appropriations.
(e) Formal budgetary integration is employed as a management control device for the general
fund.
(f) The budget for the general fund is adopted on a basis consistent with generally accepted
accounting principles (GAAP), except for certain unbudgeted expenditures of prior year
reserves.
(g) The Village Manager is authorized to transfer part or all of an encumbered appropriation
balance within 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, 2008.
(i) The classification detail at which expenditures may not legally exceed appropriations is at the
department level.
Actuarial
Accrued UAAL
Actuarial Liability Unfunded As % of
Actual Value of (AAL) - AAL Funded Covered Covered
Valuation Assets Entry Age (UAAL) Ration Payroll Payroll
Date (a)(b)(b) - (a)(a) / (b)(c)(b - a) / c
10/1/02 2,360,957$ 5,430,198$ 3,069,241$ 43.5% 3,984,900$ 77.0%
10/1/03 3,309,812 6,678,603 3,368,791 49.6% 4,278,629 78.7%
10/1/04 4,400,914 8,021,413 3,620,499 54.9% 4,960,542 73.0%
10/1/05 5,703,772 9,379,732 3,675,960 60.8% 5,320,018 69.1%
10/1/06 7,255,221 10,782,826 3,527,605 67.3% 5,355,088 65.9%
10/1/07 9,017,393 12,335,707 3,318,314 73.1% 5,740,991 58%
VILLAGE OF KEY BISCAYNE,FLORIDA
PENSION TRUST FUND
REQUIRED SUPPLEMENTARY INFORMATION
SCHEDULE OF FUNDING PROGRESS
-47-
VILLAGE OF KEY BISCAYNE,FLORIDA
REQUIRED SUPPLEMENTARY INFORMATION
PENSION TRUST FUND
SCHEDULE OF EMPLOYER CONTRIBUTIONS
Year Annual
Ended Required Percentage
September 30,Contribution Contributed
2003 465,562$ 100%
2004 515,437 100%
2005 764,420 100%
2006 729,857 100%
2007 773,701 100%
2008 810,021 100%
-48-
STATISTICAL SECTION
Contents Page
Financial Trends
These schedules contain trend information to help the reader understand how the Village's
financial performance and well-being have changed over time. These schedules include:
49-53
Revenue Capacity
These schedules contain information to help the reader assess the Village's most significant local
revenue source, the property tax.
54-58
Debt Capacity
These schedules present information to help the reader assess the affordability of the Village's
current levels of outstanding debt and the Village's ability to issue additional debt in the future.
59-62
Demographic and Economic Information
These schedules offer demographic and economic indicators to help the reader understand the
environment within which the Village's financial activities take place.
63-65
Operating Information
These schedules contain service and infrastructure data to help the reader understand how the
information in the Village's financial report relates to the services the Village provides and the
activities it performs.
66-67
STATISTICAL SECTION
This part of the Village of Key Biscayne's comprehensive annual financial report presents detailed
information as a context for understanding what the information in the financial statements, note
disclosures, and required supplementary information says about the Village's overall financial health.
Sources: Unless otherwise noted, the information in these schedules is derived from the comprehensive
annual financial reports for the relevant year.
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2003 2004 2005 2006 2007 2008
Revenues:
Ad valorem taxes 11,317,161$ 12,770,711$ 13,360,251$ 14,830,238$ 18,667,979$ 20,051,239$
Franchise fees 611,502 677,203 1,452,210 1,885,983 1,113,194 1,064,666
Utility taxes 2,251,876 2,219,118 1,488,002 1,549,601 2,231,193 1,534,379
Licenses and permits 970,001 961,100 1,040,130 1,196,853 1,298,133 1,240,290
Intergovernmental revenue 999,391 1,031,805 1,495,947 1,756,083 1,593,718 3,189,251
Charges for services 327,723 325,651 1,867,362 2,041,169 1,762,657 1,994,396
Grants 99,830 - 650,679 2,799,762 206,040 251,180
Investment income 82,286 110,562 255,611 306,339 632,355 338,528
Miscellaneous 399,124 441,761 281,657 - 8,762 8,003
Total revenues 17,058,894 18,537,911 21,891,849 26,366,028 27,514,031 29,671,932
Expenditures:
Current:
General government 1,829,501 1,712,899 2,136,375 2,239,052 2,543,134 2,329,647
Fire 4,046,269 4,462,601 4,749,407 5,117,176 5,122,699 5,744,775
Police 4,305,474 4,113,946 4,605,148 4,388,362 4,590,962 4,863,765
Public works 963,247 1,098,250 2,183,774 4,002,609 1,587,460 1,720,689
Building, planning and zoning 1,245,119 1,212,290 1,238,376 1,544,696 1,455,193 1,513,019
Parks and recreation 782,065 952,261 2,193,633 2,634,887 2,830,020 3,367,638
Capital outlay 5,108,330 10,664,348 4,527,998 6,432,271 6,830,844 4,743,796
Debt service:
Principal retirement 1,415,000 1,583,924 1,161,298 1,214,646 1,418,401 1,679,991
Interest and other fiscal charges 1,064,028 1,135,384 1,300,596 1,413,272 1,556,396 1,444,576
Total expenditures 20,759,033 26,935,903 24,096,605 28,986,971 27,935,109 27,407,896
Excess (deficiency) of revenues
over expenditures (3,700,139) (8,397,992) (2,204,756) (2,620,943) (421,078) 2,264,036
Other financing sources (uses):
Transfers in 938,652 819,251 1,245,653 1,731,583 6,697,854 4,533,094
Transfers out (948,389) (847,385) (1,273,788) (1,759,716) (6,725,988) (4,561,228)
Bonds issued 1,657,090 8,330,462 2,850,000 3,450,000 4,000,000 -
Capital lease proceeds - - 404,471 - - -
Total other financing sources (uses) 1,647,353 8,302,328 3,226,336 3,421,867 3,971,866 (28,134)
Net change in fund balances (2,052,786)$ (95,664)$ 1,021,580$ 800,924$ 3,550,788$ 2,235,902$
Debt service as a percentage
of non-capital expenditures 11.94% 10.10% 10.22% 9.07% 10.65% 9.21%
Note: The Village implemented GASB Statement No. 34 for the fiscal year ended September 30, 2003.
VILLAGE OF KEY BISCAYNE, FLORIDA
CHANGES IN FUND BALANCES OF GOVERNMENTAL FUNDS
LAST SIX FISCAL YEARS
(MODIFIED ACCRUAL BASIS OF ACCOUNTING)
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Total
Fiscal Year Total Net Direct
Ended Residential Commercial Personal Assessed Tax
September 30,Property Property Property Value Rate
1999 2,137,666,293$ 67,704,896$ 27,086,715$ 2,232,457,904$ 3.606
2000 2,394,282,542 75,832,533 28,934,086 2,499,049,161 3.606
2001 2,618,160,883 82,923,284 30,749,478 2,731,833,645 3.606
2002 3,128,872,469 99,098,715 31,948,797 3,259,919,981 3.606
2003 3,506,812,044 111,068,946 43,233,556 3,661,114,546 3.606
2004 3,713,841,630 117,626,058 43,867,688 3,875,335,376 3.606
2005 4,115,175,292 130,346,736 41,852,920 4,287,374,948 3.606
2006 5,421,393,923 166,638,240 47,020,078 5,635,052,241 3.606
2007 6,173,257,097 294,540,559 46,315,146 6,514,112,802 3.450
2008 6,040,318,378 326,676,816 38,432,567 6,405,427,760 3.200
Source: Miami-Dade County Property Appraiser's Office.
Note: Property in the Village is reassessed each year. Property is assessed at actual value, therefore, the
assessed values are equal to actual value. Tax rates are per $1,000 of assessed value.
Real Property
VILLAGE OF KEY BISCAYNE, FLORIDA
NET ASSESSED VALUE AND ESTIMATED ACTUAL VALUE OF TAXABLE PROPERTY
LAST TEN FISCAL YEARS
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-
VILLAGE OF KEY BISCAYNE, FLORIDA
RATIOS OF GENERAL BONDED DEBT OUTSTANDING
LAST TEN FISCAL YEARS
The Village does not have general obligation debt.
-60-
Percentage Amount
Net Applicable to Applicable to
Debt the Village of the Village of
Government Unit Outstanding Key Biscayne (1)Key Biscayne
Direct:
Village of Key Biscayne 44,527,731$ 100.00%44,527,731$
Overlapping debt:
Miami-Dade County 507,316,000 2.98%15,118,017
Miami-Dade County School Board 560,574,000 2.98%16,705,105
Subtotal, Overlapping Debt 31,823,122
Village of Key Biscayne Direct Debt 44,527,731
Total Direct and Overlapping Debt 76,350,853$
(1) For debt repaid with property taxes, the percentage of overlapping debt applicable is estimated using taxable
assessed property values. Value that is within the Village's boundaries and dividing it by the County's and School
Board's total taxable assessed value. This approach was also used for the other debt.
2008
VILLAGE OF KEY BISCAYNE, FLORIDA
DIRECT AND OVERLAPPING GOVERNMENTAL ACTIVITIES DEBT
SEPTEMBER 30, 2008
Note: Overlapping governments are those that coincide, at least in part, with the geographic boundaries of the
Village. This schedule estimates the portion of the outstanding debt of those overlapping governments that is borne
by the residents and businesses of the Village of Key Biscayne. This process recognizes that, when considering the
Village's ability to issue and repay long-term debt, the entire debt burden borne by the residents and businesses
should be taken into account. However, this does not imply that every taxpayer is a resident, and therefore
responsible for repaying the debt, of each overlapping government.
Sources: Data provided by the Miami-Dade County Finance Department and the Miami-Dade County School
Board.
-61-
Fiscal Year Non-
Ended Ad Valorem
September 30,Revenues Principal Interest Coverage
1999 5,364,921$ 895,000$ 241,329$ 4.72
2000 5,324,756 935,000 595,767 3.48
2001 5,777,408 975,000 631,875 3.60
2002 5,426,424 1,015,000 1,420,845 2.23
2003 5,315,452 1,415,000 590,737 2.65
2004 5,305,171 1,583,924 1,107,696 1.97
2005 7,879,761 1,161,298 1,300,596 3.20
2006 10,433,952 1,350,001 1,351,729 3.86
2007 7,924,921 1,283,285 1,302,200 3.07
2008 9,620,693 1,679,991 1,444,576 3.81
Source: Village of Key Biscayne Finance Department
VILLAGE OF KEY BISCAYNE, FLORIDA
PLEDGED REVENUE COVERAGE
LAST TEN FISCAL YEARS
Debt Service
-62-
Personal
Income
(Amounts Per Capita
Expressed in Personal Unemployment
Year Population (1)Thousands) (2)Income (3)Rate (4)
1999 --$ -$ 5.9%
2000 10,317 - 86,599 5.6%
2001 10,317 - 86,599 5.7%
2002 10,317 - 86,599 7.4%
2003 10,317 - 86,599 7.3%
2004 10,317 - 86,599 5.0%
2005 10,317 - 89,400 3.9%
2006 10,317 - 89,400 3.8%
2007 10,317 - 89,400 3.8%
2008 10,507 - 86,599 3.1%
Sources:
(1) United States Census Bureau, 2000 Census data. Prior to 2000, data not available.
(2) Information not available.
(3) Years 2000-2004, U.S. Census 2000, Year 2005 City Data.com.
(4) U.S. Department of Labor. Rates are for Miami-Dade County.
VILLAGE OF KEY BISCAYNE, FLORIDA
DEMOGRAPHIC AND ECONOMIC STATISTICS
LAST TEN FISCAL YEARS
Note: Population is based on surveys conducted during the last quarter of the calendar year. Personal
income information is a total for the year. Unemployment rate information is an adjusted yearly average.
-63-
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1999 2000 2001 2002 2003 2004 2005 2006 2007 2008
Number of employees:
General government 8 7 7 7 5 6 7 6 6 6
Public safety 71 72 72 72 74 76 79 79 79 78
Building, planning & zoning 10 16 16 16 12 12 13 13 14 13
Public works 2 3 3 3 5 5 5 5 4 4
Parks and recreation 3 4 3 4 4 4 6 6 7 7
Total number of employees 94 102 101 102 100 103 110 109 110 108
Source: Village of Key Biscayne Finance Department.
VILLAGE OF KEY BISCAYNE, FLORIDA
FULL-TIME EQUIVALENT VILLAGE GOVERNMENT EMPLOYEES BY FUNCTION
LAST TEN FISCAL YEARS
-65-
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COMPLIANCE SECTION
-68-
Report of Independent Certified Public Accountants on Internal Control over
Financial Reporting and on Compliance and Other Matters Based on an Audit of
Financial Statements Performed in Accordance with Government Auditing Standards
Honorable Mayor, Village Council and Village Manager
Village of Key Biscayne, Florida
We have audited the financial statements of the governmental activities, the business-type activities, each
major fund, and the aggregate remaining fund information of the Village of Key Biscayne, Florida (the
Village) as of and for the fiscal year ended September 30, 2008, and have issued our report thereon
dated July 29, 2009. We conducted our audit in accordance with auditing standards generally accepted in
the United States and the standards applicable to financial audits contained in Government Auditing
Standards, issued by the Comptroller General of the United States.
Internal Control Over Financial Reporting
In planning and performing our audit, we considered the Village’s internal control over financial
reporting as a basis for designing our auditing procedures for the purpose of expressing our opinion on
the financial statements, but not for the purpose of expressing an opinion on the effectiveness of the
Village’s internal control over financial reporting. Accordingly, we do not express an opinion on the
effectiveness of the Village's internal control over financial reporting.
Our consideration of internal control over financial reporting was for the limited purpose described in the
preceding paragraph and would not necessarily identify all deficiencies in internal control over financial
reporting that might be significant deficiencies or material weaknesses. However, as discussed below, we
identified certain deficiencies in internal control over financial reporting that we consider to be significant
deficiencies.
A control deficiency exists when the design or operation of a control does not allow management or
employees, in the normal course of performing their assigned functions, to prevent or detect
misstatements on a timely basis. A significant deficiency is a control deficiency, or combination of
control deficiencies, that adversely affects the Village's ability to initiate, authorize, record, process, or
report financial data reliably in accordance with generally accepted accounting principles such that there
is more than a remote likelihood that a misstatement of the Village's financial statements that is more than
inconsequential will not be prevented or detected by the Village's internal control. We consider the
deficiencies described in the accompanying schedule of findings and responses as item 08-01 to be
significant deficiencies in internal control over financial reporting.
Honorable Mayor, Village Council and Village Manager
Village of Key Biscayne, Florida
Page Two
-69-
A material weakness is a significant deficiency, or combination of significant deficiencies, that results in
more than a remote likelihood that a material misstatement of the financial statements will not be
prevented or detected by the Village's internal control.
Our consideration of internal control over financial reporting was for the limited purpose described in the
first paragraph of this section and would not necessarily identify all deficiencies in internal control that
might be significant deficiencies and, accordingly, would not necessarily disclose all significant
deficiencies that are also considered to be material weaknesses. However, we consider item 08-01 in the
accompanying schedule of findings and responses to be a material weakness.
Compliance and Other Matters
As part of obtaining reasonable assurance about whether the Village's financial statements are free of
material misstatement, we performed tests of its compliance with certain provisions of laws, regulations,
contracts, grant agreements and other matters, noncompliance with which could have a direct and material
effect on the determination of financial statement amounts. However, providing an opinion on
compliance with those provisions was not an objective of our audit, and accordingly, we do not express
such an opinion. The results of our tests disclosed instances of noncompliance that are required to be
reported under Government Auditing Standards and which are described in the accompanying schedule of
findings and responses as item 08-02.
The Village’s responses to the findings identified in our audit are described in the accompanying schedule
of findings and responses. We did not audit the Village’s responses and, accordingly, we express no
opinion on it.
This report is intended solely for the information and use of the Mayor, Village Council, Village Manager
and regulatory agencies, and is not intended to be and should not be used by anyone other than these
specified parties.
a division of Marcum LLP
Miami, Florida
July 29, 2009
-70-
Management Letter in Accordance with the Rules of the Auditor General of the State of Florida
Honorable Mayor, Village Council and Village Manager
Village of Key Biscayne, Florida
We have audited the financial statements of the Village of Key Biscayne, Florida (the Village) as of and for
the fiscal year ended September 30, 2008, and have issued our report thereon dated July 29, 2009.
We conducted our audit in accordance with auditing standards generally accepted in the United States; the
standards applicable to financial audits contained in Government Auditing Standards, issued by the
Comptroller General of the United States. We have issued our Report of Independent Certified Public
Accountants on Internal Control over Financial Reporting and on Compliance and Other Matters based on an
audit of financial statements and schedule of findings and responses. Disclosures in that report and schedule,
which are dated July 29, 2009, should be considered in conjunction with this management letter.
Additionally, our audit was conducted in accordance with the provisions of Chapter 10.550, Rules of the
Auditor General, which governs the conduct of local governmental entity audits performed in the State of
Florida. This letter includes the following information, which is not included in the aforementioned auditor’s
reports or schedule:
Section 10.554(1)(i)1., Rules of the Auditor General, requires that we determine whether or not
corrective actions have been taken to address significant findings and recommendations made in the
preceding annual financial audit report. Corrective actions have been taken to address significant
findings and recommendations made in the preceding annual financial audit report.
Section 10.554(1)(i)2., Rules of the Auditor General, requires our audit to include a review of the
provisions of Section 218.415, Florida Statutes, regarding the investment of public funds. In connection
with our audit, we determined that the Village complied with Section 218.415, Florida Statutes.
Section 10.554(1)(i)3., Rules of the Auditor General, requires that we address in the management letter
any recommendations to improve financial management. In connection with our audit,
recommendations accompany this report in the schedule of findings and responses.
Section 10.554(1)(i)4., Rules of the Auditor General, requires that we address violations of laws,
regulations, contracts or grant agreements, or abuse that have occurred, or are likely to have occurred,
that have an effect on the determination of financial statement amounts that is less than material but
more than inconsequential. In connection with our audit, our findings accompany this report in the
schedule of findings and responses.
Section 10.554(1)(i)5., Rules of the Auditor General, requires, based on professional judgment, the
reporting of the following matters that are inconsequential to the financial statements, considering both
quantitative and qualitative factors: (1) violations of laws, rules, regulations, and contractual provisions
or abuse that have occurred, or were likely to have occurred, and would have an immaterial effect
Honorable Mayor, Village Council and Village Manager
Village of Key Biscayne, Florida
Page Two
-71-
on the financial statements; (2) improper expenditures or illegal acts that would have an immaterial
effect on the financial statements; and (3) control deficiencies that are not significant deficiencies,
including, but not limited to; (a) improper or inadequate accounting procedures (e.g., the omission
of required disclosures from the financial statements); (b) failures to properly record financial
transactions; and (c) other inaccuracies, shortages, defalcations, and instances of fraud discovered
by, or that come to the attention of, the auditor. In connection with our audit, we did not have any
such findings.
Section 10.554(1)(i)6., Rules of the Auditor General, requires that the name or official title and
legal authority for the primary government and each component unit of the reporting entity be
disclosed in this management letter, unless disclosed in the notes to the financial statements.
Village of Key Biscayne was incorporated by the Laws of Florida, Act of 1955. There are no
component units related to the Village.
Section 10.554(1)(i)7.a., Rules of the Auditor General, requires a statement be included as to
whether or not the local governmental entity has met one or more of the conditions described in
Section 218.503(1), Florida Statutes, and identification of the specific condition(s) met. In
connection with our audit, we determined that the Village did not meet any of the conditions
described in Section 218.503(1), Florida Statutes.
Section 10.554(1)(i)7.b., Rules of the Auditor General, requires that we determine whether the
annual financial report for the Village for the fiscal year ended September 30, 2008, filed with the
Florida Department of Financial Services pursuant to Section 218.32(1)(a), Florida Statutes, is in
agreement with the annual financial audit report for the fiscal year ended September 30, 2008. In
connection with our audit, we determined that these two reports were in agreement.
Pursuant to Sections 10.554(l)(i)7.c. and 10.556(7), Rules of the Auditor General, we applied
financial condition assessment procedures. It is management’s responsibility to monitor the Village
of Key Biscayne’s financial condition, and our financial condition assessment was based in part on
representations made by management and the review of financial information provided by same.
Pursuant to Chapter 119, Florida Statutes, this management letter is a public record and its distribution is
not limited. Auditing standards generally accepted in the United States require us to indicate that this
letter is intended solely for the information and use of management, and the Florida Auditor General, and
is not intended to be and should not be used by anyone other than these specified parties.
a division of Marcum LLP
Miami, Florida
July 29, 2009
MARCUM
RACH LI N
ACCOUNTANTS ® ADVISORS
August 10, 2009
Honorable Mayor, Village Council and Village Manager
Village of Key Biscayne
88 West McIntyre Street
Key Biscayne, Florida 33149
This letter serves as an addendum to the "Management Letter in Accordance with the Rules of the
Auditor General of the State of Florida" dated July 29, 2009, and covering the Village of Key Biscayne's
(the Village) fiscal year ended September 30, 2008.
The following comment is hereby added to and incorporated in the above -referenced management letter:
Although the Village reported a deficit unreserved and unrestricted fund balance of
$(2,701,623) as of September 30, 2008 in its special revenue fund which is used for some of
its capital improvement programs (specifically its Crandon Boulevard Improvement Project),
the Village bad reserved fund balances in the general fund to more than cover the deficit.
The Village Charter requires the Village to reserve all of the general fund unreserved fund
balance on an annual basis. Of the $11,298,178 reserved fund balance, $1,000,000 is
reserved for working capital, $1,130,089 is reserved for the Capital Improvement Plan and
$4,000,000 is reserved for emergencies. Therefore, it appears that the Village would have
sufficient funds to cover any overall deficit.
a division of Marcum LLP
Miami, Florida
MARCUM GROUP
MEMBER
MarcumRachlin a division of Marcum to La marcumrachlin.com
One Southeast Third Avenue ® Tenth Floor in Miami, Florida 33131 Lm Phone 305.377.4228 El Fax 305.377.8331
FLORIDA 13 NEW YORK a NEW JERSEY m CONNECTICUT Q GRAND CAYMAN
VILLAGE OF KEY BISCAYNE, FLORIDA
SCHEDULE OF FINDINGS AND RESPONSES
FISCAL YEAR ENDED SEPTEMBER 30, 2008
-72-
PRIOR YEAR FINDING AND STATUS
The following addresses the status of financial statement finding reported in the fiscal year ended
September 30, 2007 schedule of findings and responses:
Matters that are not repeated in the accompanying schedule of findings and responses:
06-01 – Village Credit Cards
CURRENT YEAR FINDINGS AND RECOMMENDATIONS
Material Weakness
08-01 Internal Controls Over Accounting and Financial Reporting
Criteria
Sound financial policies dictate that a formal closing process be in place for the review of transactions
and balances recorded on a monthly and annual basis. Accounting tasks such as monthly reconciliations,
cross-checks, and reviews play a key role in proving the accuracy of accounting data and financial
information that comprise interim and year-end financial statements. A designated management
individual such as the finance director must review all general ledger accounts and ensure that all
supporting schedules agree to the general ledger and be at least fairly knowledgeable on the GASB
pronouncements such as GASB 34 in order to be able to prepare or review and approve the year end
financial statements in accordance with generally accepted accounting principles (GAAP).
Condition
Our audit procedures included the performance of various procedures on the amounts recorded as assets,
liabilities, revenues, expenditures/expenses and fund balances/net assets among the various funds of the
Village. During the audit process we noted the following:
Approximately 25 journal entries in total were booked throughout the funds from the original trial
balance received by the auditors including 3 prior period adjustments including several material
journal entries which were identified and proposed by the auditor:
Entries were necessary to correct cash, accounts payable and capital assets.
A prior period adjustment was recorded in order to include receivables and revenues for grant
funds expended in the prior year.
Prior period adjustments were also recorded to correct accounts payable and accrued liabilities
balances.
VILLAGE OF KEY BISCAYNE, FLORIDA
SCHEDULE OF FINDINGS AND QUESTIONED COSTS
(Continued)
-73-
CURRENT YEAR FINDINGS AND RECOMMENDATIONS (Continued)
Cause
The lack of a formal closing process that incorporates a thorough review by finance department personnel
of the general ledger accounts by checking the balances against the subsidiary ledger, reviewing the
detail, and ensuring that all accruals have been included.
Effect
The lack of adequate internal controls over a formal closing process, which includes the thorough review
of account balances by finance department personnel, resulted in misstatements in the financial
statements, prepared in accordance with GAAP, which are the responsibility of management.
Recommendation
We recommend the Village, on a monthly basis, review and evaluate the transactions recorded in order to
ensure the validity of amounts recorded. We recommend a detailed general ledger account analysis be
performed on a monthly basis to ensure accurate recording of transactions including recording and
tracking of all grants to ensure compliance with federal and/or state laws, rules or regulations.
The Village should consider developing written monthly and year end closing procedures. These
procedures should include timetables outlining appropriate due dates and instructions for schedules that
should be prepared. The closing procedures should be documented in a formal checklist. We also
recommend that the finance department perform an analytical review of account balances with the prior
year balances and budgets prior to closing the year end books and records to facilitate determining if
adjustments are required.
The benefit of written procedures is that it would assist personnel in discharging their responsibilities
consistently and in accordance with Village guidelines. This becomes more important as new personnel
are hired by the Village to replace terminating or retiring personnel and also provides guidance for
personnel when they have to assume other functions resulting from personnel vacations or other personal
leave instances.
In addition, the Village should also consider engaging the services of an individual who can oversee the
financial reporting process with the ability to prepare or review and approve financial statements prepared
in accordance with generally accepted accounting principles. This can be a person responsible for
overseeing the operations and internal controls of the finance department.
Views of Responsible Officials and Planned Corrective Actions
The Village has a written formal closing process that is designated and managed by the Finance Director.
The year-end process normally takes place during the month of December for the preceding fiscal year.
For fiscal year 2008 the original trial balance presented to the auditors was not fully adjusted due to the
untimely death of the Village Finance Director. Therefore, the closing process was not fully completed,
an uncommon occurrence. To date the financial statements are being reviewed monthly to ensure that all
proper accruals are being included. The Village is currently assessing the finance department and
evaluating all possible options, including obtaining additional support if necessary.
VILLAGE OF KEY BISCAYNE, FLORIDA
SCHEDULE OF FINDINGS AND QUESTIONED COSTS
(Continued)
-74-
CURRENT YEAR FINDINGS AND RECOMMENDATIONS (Continued)
Material Noncompliance
08-02 Report Filing and Federal and Florida Single Audit Identification
Criteria
Prudent practices dictate that controls be in place to insure compliance with laws, rules, and regulations
including the controls to identify federal and state grants to determine if a Federal or Florida single audit
is required. Also, Circular A-133, Part C - §320 requires the completion of the audit and submission of
the data collection form and reporting package within the earlier of 30 days after receipt of the auditor’s
report or nine months after the end of the audit period. Controls must be in place to ensure compliance
with laws rules and regulations.
Condition
Prior to the start of the audit, financial management stated that the Village was not subject to the Federal
or Florida Single Audit for the fiscal year ended September 30, 2008. It was later noted through our
procedures that there were Federal and State grant funds expended in the current and prior year which
were subject to the Single Audit. In the prior year, financial management had asserted that the Village
was not subject to single audit act requirements.
The Village did not submit the reporting package for the Federal Single Audit for the year ended
September 30, 2007 by the due date of June 30, 2008.
Cause
Lack of adequate controls over grant accounting and reporting of the Federal and Florida Single Audit
Requirements.
Effect
This caused the Village to not be in compliance with grant requirements and laws, rules, and regulations
surrounding those grants which could potentially result in the loss of future grant funds.
Recommendation
We recommend that the Village implement controls to identify the grant programs that are subject to the
Federal and Florida Single Audits in order to comply with the Federal and State compliance requirements
and also to be able to the meet filing requirement and submit the required reports in a timely manner. In
order to achieve this, we recommend the Village designate an individual to track all grants and the
requirements of each.
VILLAGE OF KEY BISCAYNE, FLORIDA
SCHEDULE OF FINDINGS AND QUESTIONED COSTS
(Continued)
-75-
CURRENT YEAR FINDINGS AND RECOMMENDATIONS (Continued)
Views of Responsible Officials and Planned Corrective Actions
In previous years, grants received by the Village have not exceeded the $500,000 threshold set by the
Federal and Florida Single Audit Acts. Currently the Village is in the process of completing the Sanitary
Sewer Project which is being funded through various revenue sources. The majority of the grant funds
have been received throughout the current fiscal year and therefore thought to be subject to a single audit
in FY2009 not when the expenses were incurred. In light of this finding, the Village has designated an
individual to track all grants and their requirements.