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HomeMy Public PortalAboutCAFR 2009.pdfVILLAGE OF KEY BISCAYNE, FLORIDA COMPREHENSIVE ANNUAL FINANCIAL REPORT FISCAL YEAR ENDED SEPTEMBER 30, 2009 Prepared by: THE FINANCE DEPARTMENT VILLAGE OF KEY BISCAYNE, FLORIDA COMPREHENSIVE ANNUAL FINANCIAL REPORT FISCAL YEAR ENDED SEPTEMBER 30, 2009 Prepared by: THE FINANCE DEPARTMENT VILLAGE OF KEY BISCAYNE, FLORIDA COMPREHENSIVE ANNUAL FINANCIAL REPORT FISCAL YEAR ENDED SEPTEMBER 30, 2009 TABLE OF CONTENTS Introductory Section Letter of Transmittal ..................................................................................................................... i Village Officials ............................................................................................................................v Certificate of Achievement for Excellence in Financial Reporting ............................................ vi Organization Chart ..................................................................................................................... vii Financial Section Independent Auditors’ Report .................................................................................................. 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 .................................................................................. 21-45 Required Supplementary Information (Other Than MD&A) Budgetary Comparison Schedule – General Fund ......................................................................46 Note to Budgetary Comparison Schedule ...................................................................................47 Schedule of Funding Progress ....................................................................................................48 Schedule of Employer Contributions ..........................................................................................49 VILLAGE OF KEY BISCAYNE, FLORIDA COMPREHENSIVE ANNUAL FINANCIAL REPORT FISCAL YEAR ENDED SEPTEMBER 30, 2009 TABLE OF CONTENTS Statistical Section Net Assets by Component ...........................................................................................................50 Changes in Net Assets .......................................................................................................... 51-52 Fund Balances of Governmental Funds ......................................................................................53 Changes in Fund Balances of Governmental Funds ...................................................................54 General Governmental Tax Revenues by Source .......................................................................55 Net Assessed Value and Estimated Actual Value of Taxable Property .....................................56 Property Tax Rates – Direct and Overlapping Governments .....................................................57 Principal Property Taxpayers ......................................................................................................58 Property Tax Levies and Collections ..........................................................................................59 Ratios of Outstanding Debt by Type ..........................................................................................60 Ratios of General Bonded Debt Outstanding .............................................................................61 Direct and Overlapping Governmental Activities Debt .............................................................62 Pledged Revenue Coverage ........................................................................................................63 Demographic and Economic Statistics .......................................................................................64 Principal Employers ....................................................................................................................65 Full-Time Equivalent Village Government Employees by Function .........................................66 Operating Indicators by Function/Program ................................................................................67 Capital Asset Statistics by Function/Program ............................................................................68 Compliance Section Independent Auditors’ Report 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 ................... 69-70 Management Letter in Accordance with the Rules of the Auditor General of the State of Florida ................................................................................................................... 71-73 Independent Auditors’ Report on Compliance With Requirements Applicable to Each Major Program and on Internal Control over Compliance in Accordance With OMB Circular A-133 ................................................................................................ 74-75 Schedule of Expenditures of Federal Awards ................................................................................76 Note to Schedule of Expenditures of Federal Awards ...................................................................77 Summary Schedule of Prior Audit Findings ..................................................................................78 Schedule of Findings and Questioned Costs ............................................................................ 79-80 INTRODUCTORY SECTION Village Council Robert L. Vernon, Mayor Enrique Garcia, Vice Mayor Michael W. Davey Robert Gusman Michael E. Kelly Jorge E. Mendia Thomas Thornton Village Manager Genaro "Chip" Iglesias VILLAGE OF KEY BISCAYNE Office of the Village Manager April 27, 2010 To the Honorable Mayor, Members of the Village Council and Citizens of the Village of Key Biscayne: The Government Finance Officers Association (GFOA) recommends that all units of local government publish, within six months of the close of each fiscal year, a complete set of financial statements presented in conformity with generally accepted accounting principles (GAAP) in the United States and audited in accordance with auditing standards generally accepted in the United States and in accordance with Government Auditing Standards by a firm of licensed certified public accountants. Pursuant to that recommendation, we hereby issue the comprehensive annual financial report of the Village of Key Biscayne for the fiscal year ended September 30, 2009. This report consists of management's representation concerning the finances of the Village of Key Biscayne. Consequently, management assumes full responsibility for the completeness and reliability of all of the information presented in this report. To provide a reasonable basis for making these representations, management of the Village of Key Biscayne has established a comprehensive internal framework that is designed both to protect the Village's assets from loss, theft, or misuse and to compile sufficient reliable information for the preparation of the Village of Key Biscayne's financial statements in conformity with GAAP. Because the cost of internal controls should not outweigh their benefits, the Village of Key Biscayne's comprehensive framework of internal controls has been designed to provide reasonable, rather than absolute, assurance that the financial statements will be free from material misstatement. As management, we assert that, to the best of our knowledge and belief, this financial report is complete and reliable in all material respects. The firm of MarcumRachlin, a division of Marcum LLP, licensed certified public accountants has audited the Village of Key Biscayne's financial statements. The goal of the independent audit was to provide reasonable assurance that the basic financial statements of the Village of Key Biscayne for the fiscal year ended September 30, 2009 are free of material misstatement. The independent audit involved examining, on a test basis, -i- 88 West McIntyre Street • Suite 210 • Key Biscayne, Florida 33149 • (305) 365-5500 • Fax (305) 365-8936 MISSION STATE%IENT: "TO PROVIDE A SAFE, QUALITY COMMUNITY ENVIRONMENT FOR ALL ISLANDERS THROUGH RESPONSIBLE GOVERNMENT.' www.keybiscayne.fl.gov 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, 2009, 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 11,411. The Village of Key Biscayne receives tax levies on real and personal property located inside its boundaries. The Village of Key Biscayne has operated under the council-manager form of government since incorporation. Policymaking and legislative authority are vested in a governing council consisting of the mayor and six other council members. The Council is responsible among other things, for passing ordinances and resolutions, adopting the annual budget, appointing the Village Manager and Village Clerk. The Village Manager is responsible for carrying out the policies and ordinances of the Council, for overseeing the daily operations of the government, and for appointing the heads of various departments. The Village of Key Biscayne offers a wide range of services, including, police protection, fire and emergency medical service, public works maintenance, a full service building, planning and zoning department, parks and recreation activities, solid waste collection, and a comprehensive storm water management system. Certain services are provided through the County School System and the County Library System through Miami -Dade County. The annual budget serves as a foundation for the Village of Key Biscayne's financial planning and control. All departments of the Village are required to submit requests for appropriations to the Village Manager and these requests are the initiation of developing the proposed budget. The Village Manager then presents this proposed budget to the Council for review. The Council is required to hold public hearings on the proposed budget and to adopt a final budget no later than September 30, the close of the Village's fiscal year. The appropriated budget is prepared by fund and department. No department may legally expend in excess of the amount appropriated for that department within an individual fund. The Village Manager may make transfers of appropriations within a department. Transfers of appropriations between departments or funds -ii- 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. Property values were once again lower during the past year following nationwide trends. Continuing weakness in the national and state economy will constrain the growth of property tax revenues and will likely have an unfavorable impact on many of the Village's intergovernmental revenues such as sales tax and state revenue sharing. Long -Term Financial Planning The Village utilizes a comprehensive living projection five years into the future to assess revenue trends and expenditure needs to assure a balanced stable financial program avoiding millage rate increases while addressing the various goals and objectives of the community. Additionally, the Village has been modifying its 5 -Year Capital Plan by prioritizing needs based on its expected available resources determined by its 5 -Year financial forecast. This effort is also identifying capital purchases that will be needed to continue its critical core public safety services, as well as other departmental needs. 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, 2008. This was the -iii- seventeenth consecutive year that the Village received this prestigious award. In order to be awarded a Certificate of Achievement, the government published an easily readable and efficiently organized CAFR. This report satisfied both GAAP and applicable legal requirements. A Certificate of Achievement is valid for a period of one year only. We believe that our current CAFR continues to meet the Certificate of Achievement Program's requirements and are submitting it to the GFOA to determine its eligibility for another certificate. The preparation of this report would not have been possible without the efficient and dedicated services of the entire staff of all departments of the Village of Key Biscayne. We would like to express our appreciation to all members of all of the departments who assisted and contributed to the preparation of this report. We would also like to express our appreciation to MarcumRachlin, a division of Marcum LLP, our independent auditors, for their assistance and efforts in helping the Village prepare the CAFR. Appreciation is also extended to the Mayor and the Village Council for their unfailing support for maintaining the highest standards of professionalism in the management of the Village of Key Biscayne's finances. Respect lly submitte Genaro "Chip" Iglesi Village Manager -iv- v VILLAGE OF KEY BISCAYNE, FLORIDA VILLAGE OFFICIALS SEPTEMBER 30, 2009 VILLAGE COUNCIL Robert Vernon, Mayor Enrique Garcia, Vice-Mayor Jorge Mendia Michael Davey 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 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 INDEPENDENT AUDITORS’ REPORT 1 Independent Auditors’ Report 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, 2009 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 of America and the standards applicable to financial audits contained in Government Auditing Standards, issued by the Comptroller General of the United States. Those standards require that we plan and perform the audit to obtain reasonable assurance about whether the financial statements are free of material misstatement. An audit includes consideration of internal control over financial reporting as a basis for designing audit procedures that are appropriate in the circumstances, but not for the purposes of expressing an opinion on the effectiveness of the Village’s internal control over financial reporting. Accordingly, we express no such opinion. An audit also includes examining, on a test basis, evidence supporting the amounts and disclosures in the financial statements, assessing the accounting principles used and significant estimates made by management, as well as evaluating the overall financial statement presentation. We believe that our audit provides a reasonable basis for our opinions. In our opinion, the financial statements referred to above present fairly, in all material respects, the respective financial position of the governmental activities, the business-type activities, each major fund and the aggregate remaining fund information of the Village of Key Biscayne, Florida as of September 30, 2009 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 of America. 2 In accordance with Government Auditing Standards, we have also issued a report dated April 21, 2010 on our consideration of the Village's internal control over financial reporting and on 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. Management’s Discussion and Analysis and the required supplementary information on pages 3 through 10 and pages 46 through 49, 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 of America. 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. Similarly, the accompanying schedule of expenditures of federal awards is presented for purposes of additional analysis as required by OMB Circular A-133 and is not a required part of the basic financial statements. The schedule of expenditures of federal awards has been subjected to the auditing procedures applied in the audit of the basic financial statements and, in our opinion, is fairly stated, in all material respects, in relation to the basic financial statements taken as a whole. The information included in the introductory and statistical sections has not been subjected to the auditing procedures applied by us in the audit of the basic financial statements and, accordingly, we express no opinion on them. a division of Marcum LLP Miami, Florida April 21, 2010 MANAGEMENT’S DISCUSSION AND ANALYSIS (MD&A) 3 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, 2009. 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-iv 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 $68,883,100 (net assets).  The Village’s total net assets increased by $13,569,859. This is attributable to an increase in revenues from the Key Biscayne Community Center programs and capital grants for construction.  At the close of the current fiscal year, the Village of Key Biscayne’s governmental funds reported an ending fund balance of $17,695,512, an increase of $4,312,735 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 $2,067,002 of new debt during the current fiscal year. Overview of the Financial Statements This discussion and analysis are intended to serve as an introduction to the Village of Key Biscayne’s basic financial statements. The Village of Key Biscayne’s basic financial statements comprise three components: 1) government-wide financial statements, 2) fund financial statements, and 3) notes to the financial statements. This report also contains required supplementary information in addition to the basic financial statements themselves. Government-wide financial statements. The government-wide financial statements are designed to provide readers with a broad overview of the Village of Key Biscayne’s finances, in a manner similar to a private sector business. The statement of net assets presents information on all of the Village of Key Biscayne’s assets and liabilities, with a difference between the two reported as net assets. Over time, increases or decreases in net assets may serve as a useful indicator of whether the financial position of the Village of Key Biscayne is improving or deteriorating. The statement of activities presents information showing how the government’s net assets changed during the most recent fiscal year. All changes in net assets are reported as soon as the underlying event giving rise to the change occurs, regardless of the timing of related cash flows. Thus, revenues and expenses are reported in this statement for some items that will only result in cash flows in future periods (e.g., uncollected taxes and earned but unused vacation leave). Both of the government-wide financial statements distinguish functions of the Village of Key Biscayne that are principally supported by taxes and intergovernmental revenues (governmental activities) from other functions that are intended to recover all or a significant portion of their costs through user fees and charges (business-type activities). The governmental activities of the Village of Key Biscayne include general government, public works, police, fire, parks and recreation and building planning and zoning. 4 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 spendable 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. 5 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 45 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 46 to 49 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 of Key Biscayne, assets exceeded liabilities by $68,883,100 at the close of the most recent fiscal year. A portion of the Village’s assets, $93,234,475 or 82%, 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 net assets by approximately $6,497,463. This increase is attributable to the increase in revenues from the Key Biscayne Community Center programs and increased code compliance activities. All other governmental activities increased net assets as follows:  Property taxes decreased by $ 281,263 (1.40 percent) during the year. This decrease is the product of a substantial decline in the countywide taxable value of existing properties in Miami- Dade County.  Capital grants decreased due to the completion of the Crandon Boulevard project.  Most department salaries increased 10 percent due to the Village’s salary step program, which in fiscal year 2009 reflected a 5 percent increase in salaries and a 3 percent increase for a cost of living increase.  Debt service remained fairly level compared to the prior year, with a minor addition for interest on new debt. 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. 6 2009 2008 2009 2008 2009 2008 Current assets 19,648,439$ 15,152,443$ 811,128$ 3,522,363$ 20,459,567$ 18,674,806$ Capital assets, net 70,628,369 70,341,556 22,606,106 15,714,252 93,234,475 86,055,808 Total assets 90,276,808 85,493,999 23,417,234 19,236,615 113,694,042 104,730,614 Current liabilities 4,542,106 4,026,890 1,599,476 6,116,628 6,141,582 10,143,518 Noncurrent liabilities 31,888,646 34,118,516 6,780,714 5,155,339 38,669,360 39,273,855 Investment in capital assets, net of related debt 38,482,242 36,139,953 15,383,765 10,174,333 53,866,007 46,314,286 Restricted 308,813 284,639 -- -- 308,813 284,639 Unrestricted 15,055,000 10,924,001 (346,721) (2,209,685) 14,708,279 8,714,316 Total net assets 53,846,055$ 47,348,593$ 15,037,044$ 7,964,648$ 68,883,099$ 55,313,241$ Governmental Activities Business-type Activities Total Table A - 1 Summary of Net Assets 2009 2008 2009 2008 2009 2008 Revenues: Program revenues: Charges for services 3,543,116$ 3,234,686$ 1,126,894$ 1,029,904$ 4,670,010$ 4,264,590$ Operating grants and contributions 157,912 251,180 -- -- 157,912 251,180 Capital grants and contributions 1,709,481 -- 7,302,630 5,460,763 9,012,111 5,460,763 General revenues: Property taxes 19,769,976 20,051,239 -- -- 19,769,976 20,051,239 Utility taxes 2,647,482 2,760,802 -- -- 2,647,482 2,760,802 Franchise fees 992,997 1,064,666 -- -- 992,997 1,064,666 Unrestricted intergovernmental revenue 1,348,324 2,265,243 -- -- 1,348,324 2,265,243 Investment income and miscellaneous 135,969 346,531 21,303 48,202 157,272 394,733 Total revenues 30,305,257 29,974,347 8,450,827 6,538,869 38,756,084 36,513,216 Expenses: General government 2,868,728 3,213,273 -- -- 2,868,728 3,213,273 Public Safety 11,781,996 11,672,048 -- -- 11,781,996 11,672,048 Parks and Recreation 4,090,555 3,633,233 -- -- 4,090,555 3,633,233 Public Works 1,914,119 2,046,776 -- -- 1,914,119 2,046,776 Building, Zoning and Planning 1,540,507 1,529,272 -- -- 1,540,507 1,529,272 Interest on long-term debt 1,447,387 1,436,481 -- -- 1,447,387 1,436,481 Stormwater -- -- 779,856 911,500 779,856 911,500 Solid waste collection -- -- 618,155 619,823 618,155 619,823 Sanitary sewer construction -- -- 144,922 9,046 144,922 9,046 Total expenses 23,643,292 23,531,083 1,542,933 1,540,369 25,186,225 25,071,452 Changes in net assets before transfers 6,661,965 6,443,264 6,907,894 4,998,500 13,569,859 11,441,764 Transfers (164,502) (28,134) 164,502 28,134 -- -- Changes in net assets after transfers 6,497,463 6,415,130 7,072,396 5,026,634 13,569,859 11,441,764 Net assets, beginning, as previously reported 47,348,593 40,137,561 7,964,648 2,938,014 55,313,241 43,075,575 Prior period adjustment -- 795,902 -- -- -- 795,902 Net assets, beginning, as restated 47,348,593 40,933,463 7,964,648 2,938,014 55,313,241 43,871,477 Net assets, ending 53,846,056$ 47,348,593$ 15,037,044$ 7,964,648$ 68,883,100$ 55,313,241$ Table A - 2 Summary of Changes in Net Assets Governmental Activities Business-type Activities Total The Village’s net assets increased by $13,569,859 during the current fiscal year. This increase is attributable to $9,012,111 of capital contributions primarily for the Village’s sanitary sewer system project. 7 Business-type Activities Business-type activities increased the Village’s net assets by 7,072,396.  In fiscal 2009, one of the three business-type activities reflected operational profits.  The Stormwater Utility Fund reflected a net loss of $280,382, due mainly to depreciation expense in the amount of $273,919. Also reflected in this loss is a decrease in interest income due to lowered interest rates. Expenses decreased from prior year due to extensive maintenance performed in the prior year.  The Solid Waste Collection Fund reported net income of $17,755, due mainly to increased rates, compared to an operating loss of $87,278 in the prior year.  The Sanitary Sewer Construction Fund construction activity is currently ongoing and therefore there was an increase in capital grants. Governmental Activities Ad Valorem Taxes,  $19,769,976 , 65% Franchise Fees,  $992,997 , 3% Utility Taxes,  $2,647,482 , 9% Intergovernmental,  $1,348,324 , 5% Charges for  Services, $3,543,116  , 12% Operating Grants  and Contributions,  $1,867,393 , 6%Investment  Earnings, $44,737 ,  0% Other, $91,232 , 0% Revenues by Sources ‐Governmental Activities General  Government,  $2,868,728 , 12% Public Works,  $1,914,119 , 8% Police, $5,258,243  , 22% Fire, $6,523,753 ,  28% Parks and  Recreation,  $4,090,555 ,  17% Building, Zoning  and Planning,  $1,540,507 , 7% Interest on Long  Term Debt,  $1,447,387 , 6% Program Expenses 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 $12,318,533, an increase of $1,020,355 in comparison with the prior year. The increase was primarily caused by an increase in charges for services. All of this is either reserved or designated for specific uses: (1) emergencies ($4,000,001), (2) Building Inspection Costs ($566,173), (3) Compensated Absences ($450,952), (4) Law Enforcement Seizures ($308,813), (5) Fire Rescue Transport Fees ($287,913), (6) Working Capital Reserves ($1,992,064), (7) Prepaid Items ($250,693), (8) Police Labor ($90,000), (9) Fire Grant Revenue – Urban Area Security Initiative ($50,722), (10) Capital Improvement Plan ($1,130,089), (11) Playing Solid Waste Charges,  $635,580 , 56%Stormwater Charges,  $491,314 , 44% Revenues‐Business Type  Activities Solid Waste,  $618,155 , 52% Stormwater,  $565,175 , 48% Expenses‐Business Type  Activities 9 Field Acquisitions ($416,403), (12) Police/Administration Building Reserve ($13,632), (13) Fire Station Building Reserve ($13,632), (14) Community Center Equipment Reserve ($50,000), (15) Fire Vehicles Replacement Reserve ($50,000), (16) Master Plan Initiatives ($1,873,764), (17) Capital Lease ($298,682), (18) Roadway Improvements ($175,000) and (19) Recreation Facilities ($300,000). The general fund is the chief operating fund of the Village of Key Biscayne. As a measure of the general fund’s liquidity, it may be useful to compare total fund balance to total fund expenditures. Total fund balance represents 51.17 percent of total general fund expenditures. A summary of the general fund’s condensed balance sheet and statement of revenues, expenditures and changes in fund balance is presented in Table B-1 and B-2 for September 30, 2009 and 2008, is shown as follows: 2009 2008 Total assets 13,969,626$ 12,794,042$ Total liabilities 1,651,093$ 1,495,864$ Reserved or designated fund balance 12,318,533 11,298,178 Total liabilities and fund balance 13,969,626$ 12,794,042$ 2009 2008 Total revenues 28,492,608$ 28,252,113$ Total expenditures 24,071,557 22,389,637 Excess of revenues over expenditures 4,421,051$ 5,862,476$ Table B-1 Summary of Condensed Balance Sheet Table B-2 Expenditures and Changes in Fund Balances Summary of Condensed Statement of Revenues, The Special Revenue Fund was established to account for the construction and future maintenance of the Village’s roadways. Bond revenue and County bridge toll revenues are 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 revenues in subsequent years from County bridge toll revenues and County CITT revenues. 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 $2,092,139 during the current fiscal period. Fund balance is comprised of funds allocated to named projects with varied stages of completion. General Fund Budgetary Highlights There were three departments with excess of expenditures over appropriations on a GAAP basis, however, prior year reserves were established for these purposes (budget to actual variances): Village Attorney, Fire and, Parks and Recreation. These variances were cause by the following: 10  Attorney – excess code enforcement litigation in addition to negotiations with police, fire and general employee unions.  Fire – due to the implementation of the collective bargaining agreement with the fire union.  Parks and Recreation - an Athletics Division was added. Sports program revenues offset this variance. Capital Assets As of September 30, 2009, the Village’s capital assets net of accumulated depreciation amounted to $93,234,475 compared to $86,055,808 for 2008. Major capital asset events during the fiscal year included the following:  Enhancements to Channel 77, the Village’s cable channel for government access programming.  The Village initiated a planning process to determine the feasibility of establishing a municipal charter high school.  Continuation of the Beach Renourishment program.  Continuation of the Sanitary Sewer Project. Additional information on the Village’s capital assets can be found in Note 7 on pages 32-33 of this report. Debt Administration At September 30, 2009, the Village had bonded debt outstanding of $39,262,501. Of this amount, $6,635,976 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 $2,067,002 due to a revolving loan agreement with the State of Florida Department of Environmental Protection for the financing of the Sanitary Sewer Project construction. Additional information on the Village’s long-term debt can be found in Note 9 on pages 34-40 of this report. Economic Factors and Next Year’s Budgets and Rates  The unemployment rate for Miami-Dade County is currently 11.50 percent, which is an increase from a rate of 5.9 percent a year ago. This is favorable to the state’s average unemployment rate of 11.6 percent as well as the national average rate of 10.4 percent.  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.  The Village’s millage rate remained at 3.200 per $1,000 of assessed value for 2010. All of these factors were considered in preparing the Village of Key Biscayne’s budget for the 2010 fiscal year. Requests for Information This financial report is designed to provide a general overview of the Village of Key Biscayne’s finances for all those with an interest in the government’s finances. Questions concerning any of the information provided in this report or requests for additional financial information should be addressed to the Office of the Village Manager, 88 West McIntyre Street, Key Biscayne, Florida 33149. BASIC FINANCIAL STATEMENTS Business- Governmental type Activities Activities Total Assets Cash and cash equivalents 15,076,876$ 1,582,321$ 16,659,197$ Receivables, net 1,356,577 707,427 2,064,004 Due from other governments 1,000,000 -- 1,000,000 Prepaids 250,693 -- 250,693 Internal balances 1,478,620 (1,478,620) -- Negative net pension obligation 116,341 -- 116,341 Other assets 18,001 -- 18,001 Restricted assets: Cash and cash equivalents 71,365 -- 71,365 Investments 279,966 -- 279,966 Capital assets not being depreciated 35,110,097 15,828,094 50,938,191 Capital assets being depreciated, net 35,518,272 6,778,012 42,296,284 Total Assets 90,276,808 23,417,234 113,694,042 Liabilities Accounts payable and accrued liabilities 935,365 1,157,849 2,093,214 Accrued interest payable 323,434 -- 323,434 Payable to pension plan 105,880 -- 105,880 Unearned revenue 665,192 -- 665,192 Noncurrent liabilities: Due within one year 2,512,235 441,627 2,953,862 Due in more than one year 31,888,646 6,780,714 38,669,360 Total Liabilities 36,430,752 8,380,190 44,810,942 Net Assets Invested in capital assets, net of related debt 38,482,243 15,383,765 53,866,008 Restricted for law enforcement 308,813 -- 308,813 Unrestricted (deficit) 15,055,000 (346,721) 14,708,279 Total Net Assets 53,846,056$ 15,037,044$ 68,883,100$ VILLAGE OF KEY BISCAYNE, FLORIDA STATEMENT OF NET ASSETS SEPTEMBER 30, 2009 The accompanying notes are an integral part of these financial statements. 11 Charges Operating Capital Business- for Grants and Grants and Governmental type Functions/Programs Expenses Services Contributions Contributions Activities Activities Total Governmental activities General government 2,868,728$ 237,315$ --$ --$ (2,631,413)$ --$ (2,631,413)$ Police 5,258,243 38,181 -- -- (5,220,062) -- (5,220,062) Fire 6,523,753 136,433 33,447 -- (6,353,873) -- (6,353,873) Public works 1,914,119 -- 16,009 1,709,481 (188,629) -- (188,629) Building, zoning and planning 1,540,507 1,173,440 -- -- (367,067) -- (367,067) Parks and recreation 4,090,555 1,957,747 108,456 -- (2,024,352) -- (2,024,352) Interest on long-term debt 1,447,387 -- -- -- (1,447,387) -- (1,447,387) Total governmental activities 23,643,292 3,543,116 157,912 1,709,481 (18,232,783) -- (18,232,783) Business-type activities Stormwater 779,856 491,314 -- 331,319 -- 42,777 42,777 Solid waste 618,155 635,580 -- - -- 17,425 17,425 Sanitary sewer 144,922 -- -- 6,971,311 -- 6,826,389 6,826,389 Total business-type activities 1,542,933 1,126,894 -- 7,302,630 -- 6,886,591 6,886,591 Total 25,186,225$ 4,670,010$ 157,912$ 9,012,111$ (18,232,783) 6,886,591 (11,346,192) General Revenues Property taxes 19,769,976 -- 19,769,976 Franchise fees based on gross receipts 992,997 -- 992,997 Utility taxes 1,555,748 -- 1,555,748 Communications services tax 1,091,734 -- 1,091,734 Unrestricted intergovernmental revenue 1,348,324 -- 1,348,324 Unrestricted investment earnings 44,737 21,303 66,040 Miscellaneous income 26,232 -- 26,232 Gain on disposal of capital asset 65,000 -- 65,000 Transfers (164,502) 164,502 -- Total General Revenues 24,730,246 185,805 24,916,051 Change in Net Assets 6,497,463 7,072,396 13,569,859 Net Assets - Beginning 47,348,593 7,964,648 55,313,241 Net Assets - Ending 53,846,056$ 15,037,044$ 68,883,100$ Changes in Net AssetsProgram Revenues VILLAGE OF KEY BISCAYNE, FLORIDA STATEMENT OF ACTIVITIES FISCAL YEAR ENDED SEPTEMBER 30, 2009 Net (Expense) Revenue and The accompanying notes are an integral part of these financial statements. 12 Total Special Capital Governmental General Revenue Improvements Funds Assets Cash and cash equivalents 7,965,910$ --$ 7,110,966$ 15,076,876$ Receivables, net 1,237,905 95,041 23,631 1,356,577 Due from other governments -- 1,000,000 -- 1,000,000 Due from other funds 4,235,152 -- 11,333 4,246,485 Prepaid items 250,693 -- -- 250,693 Restricted cash and cash equivalents -- 71,365 -- 71,365 Restricted investments 279,966 -- -- 279,966 Total Assets 13,969,626$ 1,166,406$ 7,145,930$ 22,281,962$ Liabilities and Fund Balances Liabilities Accounts payable and accrued liabilities 664,796$ --$ 270,569$ 935,365$ Due to other funds 100,077 2,667,788 -- 2,767,865 Payable to pension plan 105,880 -- -- 105,880 Deferred revenue 780,340 -- -- 780,340 Total Liabilities 1,651,093 2,667,788 270,569 4,589,450 Fund Balances Reserved (Note 12)12,318,533 -- -- 12,318,533 Unreserved, undesignated reported in Special revenue fund (deficit)-- (1,501,382) -- (1,501,382) Capital improvements -- - 6,875,361 6,875,361 Total Fund Balances (Deficit)12,318,533 (1,501,382)6,875,361 17,692,512 Total Liabilities and Fund Balances 13,969,626$ 1,166,406$ 7,145,930$ Amounts reported for governmental activities in the statement of net assets are different becaus Capital assets used in governmental activities are not financial resources and, therefore are not reported in the funds 70,628,369 A negative net pension obligation (NPO) is not considered to represent a financia asset and therefore is not reported in the governmental fund 116,341 Long-term receivables are not available to pay for current period expenditures and, therefore, are not reported in the fund 115,148 Long-term liabilities, including bonds payable, are not due and payable in the current period and therefore not reported in the fund (34,706,314) Net Assets of Governmental Activities 53,846,056$ VILLAGE OF KEY BISCAYNE, FLORIDA BALANCE SHEET GOVERNMENTAL FUNDS SEPTEMBER 30, 2009 The accompanying notes are an integral part of these financial statements. 13 Total Special Capital Governmental General Revenue Improvements Funds Revenues Property taxes 19,769,976$ --$ --$ 19,769,976$ Utility taxes 1,555,748 -- -- 1,555,748 Communications services tax 1,279,001 -- -- 1,279,001 Franchise fees 992,997 -- -- 992,997 Licenses and permits 1,188,297 -- -- 1,188,297 Intergovernmental 1,154,946 1,892,898 -- 3,047,844 Charges for services 2,354,365 454 -- 2,354,819 Interest 39,366 -- 5,371 44,737 Grants 157,912 -- 9,961 167,873 Miscellaneous income -- -- 26,232 26,232 Total Revenues 28,492,608 1,893,352 41,564 30,427,524 Expenditures Current: General government 2,266,763 -- -- 2,266,763 Fire 6,407,770 -- -- 6,407,770 Police 5,116,158 -- -- 5,116,158 Public works 1,914,119 -- -- 1,914,119 Building, zoning and planning 1,540,507 -- -- 1,540,507 Parks and recreation 3,721,478 -- 8,606 3,730,084 Capital outlay 293,559 2,358 1,242,013 1,537,930 Debt service: Principal 1,641,152 410,155 -- 2,051,307 Interest and fiscal charges 1,170,051 280,598 -- 1,450,649 Total Expenditures 24,071,557 693,111 1,250,619 26,015,287 Excess (deficiency) of revenues over expenditures 4,421,051 1,200,241 (1,209,055) 4,412,237 Other Financing Sources (Uses) Transfers in -- -- 3,236,194 3,236,194 Transfers out (3,400,696) -- -- (3,400,696) Proceeds from sale of capital assets -- -- 65,000 65,000 Total Other Financing Sources (Uses)(3,400,696) -- 3,301,194 (99,502) Net Change in Fund Balances 1,020,355 1,200,241 2,092,139 4,312,735 Fund Balances (Deficit) - Beginning 11,298,178 (2,701,623) 4,783,222 13,379,777 Fund Balances (Deficit) - Ending 12,318,533$ (1,501,382)$ 6,875,361$ 17,692,512$ VILLAGE OF KEY BISCAYNE, FLORIDA STATEMENT OF REVENUES, EXPENDITURES AND CHANGES IN FUND BALANCES GOVERNMENTAL FUNDS FISCAL YEAR ENDED SEPTEMBER 30, 2009 The accompanying notes are an integral part of these 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) 4,312,735$ 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: Cost of assets 1,481,771$ Depreciation expense (1,187,420) Net effect of miscellaneous transactions related to capital assets (8,922) Net adjustment 285,429 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 (187,267) 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 2,051,307 Capital lease payments 107,827 Other (103,657) 2,055,477 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 32,998 Accrued interest expense 4,646 Debt issuance costs (1,384) Negative net pension obligation (5,171) 31,089 Change in net assets of governmental activities (Page 12)6,497,463$ 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, 2009 The accompanying notes are an integral part of these financial statements. 15 Stormwater Sanitary Utility Sewer Solid System Construction Waste Totals Assets Current assets Cash and cash equivalents 109,608$ 808,391$ 664,322$ 1,582,321$ Accounts receivables, net 94,342 156,510 456,575 707,427 Due from other funds 88,744 -- -- 88,744 Total Current Assets 292,694 964,901 1,120,897 2,378,492 Noncurrent Assets Capital assets not being depreciated -- 15,828,094 -- 15,828,094 Capital assets being depreciated, net 6,778,012 -- -- 6,778,012 Total Noncurrent Assets 6,778,012 15,828,094 -- 22,606,106 Total Assets 7,070,706 16,792,995 1,120,897 24,984,598 Liabilities Current Liabilities Accounts payable and accrued liabilities 14,684 1,041,661 101,504 1,157,849 Due to other funds -- 769,227 798,137 1,567,364 Current portion of revolving loans -- 56,627 -- 56,627 Current portion of revenue bonds payable 385,000 -- -- 385,000 Total Current Liabilities 399,684 1,867,515 899,641 3,166,840 Noncurrent Liabilities Revenue bonds 4,450,000 -- -- 4,450,000 Revolving loans -- 2,330,714 -- 2,330,714 Total Noncurrent Liabilities 4,450,000 2,330,714 -- 6,780,714 Total Liabilities 4,849,684 4,198,229 899,641 9,947,554 Net Assets Invested in capital assets, net of related debt 1,943,012 13,440,753 -- 15,383,765 Unrestricted (deficit)278,010 (845,987) 221,256 (346,721) Total Net Assets 2,221,022$ 12,594,766$ 221,256$ 15,037,044$ Business-type Activities - Enterprise Funds VILLAGE OF KEY BISCAYNE, FLORIDA STATEMENT OF NET ASSETS PROPRIETARY FUNDS SEPTEMBER 30, 2009 The accompanying notes are an integral part of these financial statements. 16 Stormwater Sanitary Utility Sewer Solid System Construction Waste Totals Operating Revenues Charges for services 491,314$ --$ 635,580$ 1,126,894$ Operating Expenses General and administrative 291,256 -- 618,155 909,411 Depreciation 273,919 -- -- 273,919 Total Operating Expenses 565,175 -- 618,155 1,183,330 Operating Income (Loss)(73,861) -- 17,425 (56,436) Non-Operating Revenues (Expenses) Interest income 8,160 12,813 330 21,303 Interest expense (214,681) (144,922) -- (359,603) Total Non-Operating Revenues (Expenses)(206,521) (132,109) 330 (338,300) Income (Loss) before Contributions and Transfers (280,382) (132,109) 17,755 (394,736) Capital contributions 331,319 6,971,311 -- 7,302,630 Transfers in -- 164,502 -- 164,502 Total Contributions and Transfers 331,319 7,135,813 -- 7,467,132 Change in Net Assets 50,937 7,003,704 17,755 7,072,396 Net Assets - Beginning 2,170,085 5,591,062 203,501 7,964,648 Net Assets - Ending 2,221,022$ 12,594,766$ 221,256$ 15,037,044$ 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, 2009 The accompanying notes are an integral part of these financial statements. 17 Stormwater Sanitary Utility Sewer Solid System Construction Waste Totals Cash Flows from Operating Activities Receipts from customers and users 555,071$ --$ 698,358$ 1,253,429$ Payments to suppliers (427,493) -- (194,773) (622,266) Net Cash Provided by Operating Activities 127,578 -- 503,585 631,163 Cash Flows from Non-Capital Financing Activities Transfers from other funds -- 164,502 -- 164,502 Net Cash Provided by Non-Capital Financing Activities -- 164,502 -- 164,502 Cash Flows from Capital and Related Financing Activities Capital contributions 242,575 9,613,601 -- 9,856,176 Proceeds from revolving loan -- 2,067,002 -- 2,067,002 Payment on short-term revenue bonds -- (5,000,000) -- (5,000,000) Payments for construction of capital assets -- (8,014,714) -- (8,014,714) Payments on revenue bonds (365,000) -- -- (365,000) Payments on revolving loans -- (19,580) -- (19,580) Interest paid (214,681) (144,922) -- (359,603) Net Cash Used by Capital and Related Financing Activities (337,106) (1,498,613) -- (1,835,719) Cash Flows from Investing Activities Interest received 8,160 12,813 330 21,303 Net Cash Provided by Investing Activities 8,160 12,813 330 21,303 Net Increase (Decrease) in Cash and Cash Equivalents (201,368) (1,321,298) 503,915 (1,018,751) Cash and Cash Equivalents - Beginning 310,976 2,129,689 160,407 2,601,072 Cash and Cash Equivalents - Ending 109,608$ 808,391$ 664,322$ 1,582,321$ Reconciliation of Operating Income (Loss) to Net Cash Provided by Operating Activities Operating income (loss)(73,861)$ --$ 17,425$ (56,436)$ Adjustments to reconcile operating income (loss) to net cash provided by operating activities: Depreciation 273,919 -- -- 273,919 Changes in operating assets and liabilities: Increase in: Accounts receivable 63,757 -- 62,778 126,535 Increase (decrease) in: Accounts payable and accrued liabilities (18,462) -- 52,193 33,731 Deferred revenue -- -- (29,159) (29,159) Due to other funds (117,775) -- 400,348 282,573 Total adjustments 201,439 -- 486,160 687,599 Net Cash Provided by Operating Activities 127,578$ --$ 503,585$ 631,163$ Business-type Activities - Enterprise Funds VILLAGE OF KEY BISCAYNE, FLORIDA STATEMENT OF CASH FLOWS PROPRIETARY FUNDS FISCAL YEAR ENDED SEPTEMBER 30, 2009 The accompanying notes are an integral part of these financial statements. 18 Assets Investments Money market funds 944,108$ Common stocks 4,111,089 Mutual funds 6,978,035 Total Investments 12,033,232 Contributions Receivable Village (including State) 113,737 Total Assets 12,146,969 Liabilities Payables -- Net Assets Net Assets Held in Trust for Pension Benefits 12,146,969$ VILLAGE OF KEY BISCAYNE, FLORIDA STATEMENT OF FIDUCIARY NET ASSETS PENSION TRUST FUND SEPTEMBER 30, 2009 The accompanying notes are an integral part of these financial statements. 19 Additions Contributions Plan members 665,920$ Village (including State) 1,019,457 Total Contributions 1,685,377 Investment Income Net appreciation in the fair value of investments 443,688 Interest and dividends 105,983 549,671 Less investment expenses (77,018) Net Investment Income 472,653 Total Additions 2,158,030 Deductions Benefits paid 260,182 Administrative expenses 94,175 Total Deductions 354,357 Change in Net Assets 1,803,673 Net Assets - Beginning 10,343,296 Net Assets - Ending 12,146,969$ VILLAGE OF KEY BISCAYNE, FLORIDA STATEMENT OF CHANGES IN FIDUCIARY NET ASSETS PENSION TRUST FUND FISCAL YEAR ENDED SEPTEMBER 30, 2009 The accompanying notes are an integral part of these financial statements. 20 NOTES TO BASIC FINANCIAL STATEMENTS VILLAGE OF KEY BISCAYNE, FLORIDA NOTES TO BASIC FINANCIAL STATEMENTS FISCAL YEAR ENDED SEPTEMBER 30, 2009 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 of America (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. NOTE 1 – SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES (CONTINUED) VILLAGE OF KEY BISCAYNE, FLORIDA NOTES TO BASIC FINANCIAL STATEMENTS FISCAL YEAR ENDED SEPTEMBER 30, 2009 22 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. NOTE 1 – SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES (CONTINUED) VILLAGE OF KEY BISCAYNE, FLORIDA NOTES TO BASIC FINANCIAL STATEMENTS FISCAL YEAR ENDED SEPTEMBER 30, 2009 23 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. The Solid Waste Fund accounts for the provision of solid waste disposal services to Village residents and businesses. 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. VILLAGE OF KEY BISCAYNE, FLORIDA NOTES TO BASIC FINANCIAL STATEMENTS FISCAL YEAR ENDED SEPTEMBER 30, 2009 24 NOTE 1 – SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES (CONTINUED) C. MEASUREMENT FOCUS, BASIS OF ACCOUNTING, AND FINANCIAL STATEMENT PRESENTATION (CONTINUED) 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. 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, 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. Interfund Receivables and Payables Activities 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”. VILLAGE OF KEY BISCAYNE, FLORIDA NOTES TO BASIC FINANCIAL STATEMENTS FISCAL YEAR ENDED SEPTEMBER 30, 2009 25 NOTE 1 – SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES (CONTINUED) D. ASSETS, LIABILITIES, AND NET ASSETS OR EQUITY (CONTINUED) 3. Receivables Receivables include amounts due from other governments and others for services provided by the Village. Receivables are recorded and revenues are recognized as earned or as specific program expenditures/expenses are incurred. Allowances, if any, for uncollectible receivables are based upon historical trends and the periodic aging of receivables. 4. 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. 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 2009. 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 5. Unearned/Deferred Revenue Inflows that do not yet meet the criteria for revenue recognition are recorded as unearned revenue in the government-wide statements and as deferred revenue in the fund financial statements. Unearned/deferred revenue consists primarily of community center membership dues. VILLAGE OF KEY BISCAYNE, FLORIDA NOTES TO BASIC FINANCIAL STATEMENTS FISCAL YEAR ENDED SEPTEMBER 30, 2009 26 NOTE 1 – SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES (CONTINUED) D. ASSETS, LIABILITIES, AND NET ASSETS OR EQUITY (CONTINUED) 6. 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, 2009 and were subsequently paid with current available financial resources. The general fund typically is used to liquidate the liability for compensated absences. 7. 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 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. 8. Use of Estimates The preparation of financial statements in conformity with accounting principles generally accepted in the United States of America 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. VILLAGE OF KEY BISCAYNE, FLORIDA NOTES TO BASIC FINANCIAL STATEMENTS FISCAL YEAR ENDED SEPTEMBER 30, 2009 27 NOTE 1 – SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES (CONTINUED) D. ASSETS, LIABILITIES, AND NET ASSETS OR EQUITY (CONTINUED) 9. 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. 10. Net Assets Net assets of the government-wide and proprietary funds are categorized as invested in capital assets, net of related debt; restricted or unrestricted. Investment in capital assets, net of related debt, is that portion of net assets that relates to the Village’s capital assets reduced by accumulated depreciation and by any outstanding debt incurred to acquire, construct or improve those assets, excluding unexpended proceeds. Restricted net assets is that portion of net assets that has been restricted for general use by external parties (creditors, grantors, contributors, or laws or regulations of other governments) or imposed by law through constitutional provisions or enabling legislation. Unrestricted net assets consist of all net assets that do not meet the definition of either of the other two components. 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 $34,706,314 difference are as follows: Bonds Payable 32,040,160$ Debt Issuance Costs (18,001) Capital Leases Payable 105,966 Compensated Absences 2,254,755 Accrued Interest Payable 323,434 34,706,314$ VILLAGE OF KEY BISCAYNE, FLORIDA NOTES TO BASIC FINANCIAL STATEMENTS FISCAL YEAR ENDED SEPTEMBER 30, 2009 28 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 Florida PRIME (formerly known as the Local Government Surplus Funds Trust Fund (LGIP)) 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, 2009, the Village had the following investments with its corresponding maturities in its portfolio: Fair Less Investments Value Than 1 Repurchase agreements 4,574,508$ 4,574,508$ (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. Custodial Credit Risk For an investment, custodial credit risk is the risk that, in the event of the failure of the counterparty, the Village will not be able to recover the value of its investments or collateral VILLAGE OF KEY BISCAYNE, FLORIDA NOTES TO BASIC FINANCIAL STATEMENTS FISCAL YEAR ENDED SEPTEMBER 30, 2009 29 NOTE 3 – DEPOSITS AND INVESTMENTS (CONTINUED) INVESTMENTS – VILLAGE (CONTINUED) Custodial Credit Risk (Continued) securities that are in the possession of an outside party. The Village’s $4.6 million investment in repurchase agreements is held by the investment’s counterparty, not in the name of the Village. The Village’s investment policy does not have a limit on holding of securities by counterparties. INVESTMENTS – PENSION PLAN As of September 30, 2009, the Village’s Defined Benefit Pension Plan had the following investments with its corresponding maturities in its portfolio: Fair Less Investments Value Than 1 1-5 6-10 10+ Bond Mutual Funds 3,835,672$ 533,158$ 1,791,259$ 932,068$ 579,186$ 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. 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, 2009, the value of each position held in the Plan’s portfolio comprised less than 5% of Plan investment assets. NOTE 3 – DEPOSITS AND INVESTMENTS (CONTINUED) VILLAGE OF KEY BISCAYNE, FLORIDA NOTES TO BASIC FINANCIAL STATEMENTS FISCAL YEAR ENDED SEPTEMBER 30, 2009 30 RISKS AND UNCERTAINTIES The Village and the Plan invest 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 financial statements. The Village and the Plan, through its investment advisor, monitors the investments and the risks associated therewith on a regular basis which the Village and 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, 2009 for the Village’s individual major funds, non-major funds and fiduciary fund in the aggregate, including the allowances for uncollectible accounts, are as follows: Special Capital Storm- Sanitary Solid Pension General Revenue Improvements water Sewer Waste Trust Fund Total Customers Billed --$ --$ --$ 94,342$ --$ 478,215$ --$ 572,557$ Contributions -- -- -- -- -- -- 113,737 113,737 Property Taxes 380,366 -- -- -- -- -- -- 380,366 Intergovernmental 250,048 95,041 23,631 -- 156,510 -- -- 525,230 Other 607,491 -- -- -- -- -- -- 607,491 Due from Other Governments -- 1,000,000 -- -- -- -- -- 1,000,000 Gross Receivables 1,237,905 1,095,041 23,631 94,342 156,510 478,215 113,737 3,199,381 Less Allowance for Uncollectibles -- -- -- -- -- (21,640) -- (21,640) Net Total Receivables 1,237,905$ 1,095,041$ 23,631$ 94,342$ 156,510$ 456,575$ 113,737$ 3,177,741$ 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. The millage rate assessed by the Village for the year ended September 30, 2009 was 3.200. NOTE 5 – PROPERTY TAXES (CONTINUED) VILLAGE OF KEY BISCAYNE, FLORIDA NOTES TO BASIC FINANCIAL STATEMENTS FISCAL YEAR ENDED SEPTEMBER 30, 2009 31 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, 2009, there were no material delinquent taxes. NOTE 6 – INTERFUND RECEIVABLES, PAYABLES AND TRANSFERS The composition of interfund balances as of September 30, 2009 is as follows: Due from/to other funds: Receivable Fund Payable Fund Amount General Special Revenue 2,667,788$ Sanitary Sewer 769,227 Solid Waste 798,137 Capital Improvement General 11,333 Stormwater General 88,744 4,335,229$ 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 Im provement Sewer Total Transfers Out: General fund --$ 3,236,194$ 164,502$ 3,400,696$ Transfers In Transfers are used to move unrestricted general fund revenues to finance various capital projects in accordance with budgetary authorizations. VILLAGE OF KEY BISCAYNE, FLORIDA NOTES TO BASIC FINANCIAL STATEMENTS FISCAL YEAR ENDED SEPTEMBER 30, 2009 32 NOTE 7 – CAPITAL ASSETS Capital asset activity for the year ended September 30, 2009 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 12,851,512 424,748 -- 13,276,260 Total Capital Assets, Not Being Depreciated 34,685,349 424,748 -- 35,110,097 Capital Assets, Being Depreciated Buildings 24,225,708 341,094 -- 24,566,802 Improvements other than buildings 16,142,508 319,756 -- 16,462,264 Furniture, fixtures and equipment 5,647,777 396,173 (132,447) 5,911,503 Total Capital Assets, Being Depreciated 46,015,993 1,057,023 (132,447) 46,940,569 Less accumulated depreciation for: Buildings (2,897,141) (496,476) -- (3,393,617) Improvements other than buildings (3,656,443) (370,503) -- (4,026,946) Furniture, fixtures and equipment (3,806,293) (320,441) 125,000 (4,001,734) Total Accumulated Depreciation (10,359,877) (1,187,420) 125,000 (11,422,297) Total Capital Assets, Being Depreciated, Net 35,656,116 (130,397) (7,447) 35,518,272 Governmental Activities Capital Assets, Net 70,341,465$ 294,351$ (7,447)$ 70,628,369$ Business-type Activities Capital Assets, Not Being Depreciated Construction in progress 8,662,321$ 7,165,773$ --$ 15,828,094$ Total Capital Assets, Not Being Depreciated 8,662,321 7,165,773 -- 15,828,094 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 (3,004,729) (273,919) -- (3,278,648) Total Accumulated Depreciation (3,004,729) (273,919) -- (3,278,648) Total Capital Assets, Being Depreciated, Net 7,051,931 (273,919) -- 6,778,012 Business-type Activities Capital Assets, Net 15,714,252$ 6,891,854$ --$ 22,606,106$ VILLAGE OF KEY BISCAYNE, FLORIDA NOTES TO BASIC FINANCIAL STATEMENTS FISCAL YEAR ENDED SEPTEMBER 30, 2009 33 NOTE 7 – CAPITAL ASSETS (CONTINUED) Depreciation expense was charged as functions/programs of the primary government as follows: Governmental Activities General government 461,054$ Police 146,941 Fire 218,954 Public works -- Building, zoning and planning -- Parks 360,471 Total Depreciation Expense - Governmental Activities 1,187,420$ Business-type Activities Stormwater 273,919$ NOTE 8 – SHORT-TERM DEBT INSTRUMENTS 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 was secured by a covenant to budget and appropriate from legally available non-ad valorem revenues of the Village and was expected to be repaid over one year. Interest accrued 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. The note was paid off during the fiscal year ended September 30, 2009. Total interest paid for the note was $136,368. VILLAGE OF KEY BISCAYNE, FLORIDA NOTES TO BASIC FINANCIAL STATEMENTS FISCAL YEAR ENDED SEPTEMBER 30, 2009 34 NOTE 9 – LONG-TERM DEBT The following is a summary of changes in long-term liabilities of the Village for governmental activities for the year ended September 30, 2009: Beginning Ending Due Within Balance Additions Reductions Balance One Year Governmental Activities Bonds Payable Land acquisition and capital improvement revenue bonds, Series 1999 7,585,000$ --$ (475,000)$ 7,110,000$ 500,000$ Land acquisition and capital improvement revenue bonds, Series 2000 8,360,000 -- (465,000) 7,895,000 490,000 Capital improvement bonds, Series 2002 8,370,265 -- (414,676) 7,955,589 467,860 Land acquisition and capital improvement revenue bonds, Series 2004 2,730,071 -- (286,476) 2,443,595 297,607 Transportation tax revenue bonds, Series 2005 3,404,044 -- (197,361) 3,206,683 204,001 Transportation tax revenue bonds, Series 2006 3,642,087 -- (212,794) 3,429,293 221,325 Total Bonds Payable 34,091,467 -- (2,051,307) 32,040,160 2,180,793 Other Liabilities Capital leases 213,793 -- (107,827) 105,966 105,966 Compensated absences 2,287,753 299,839 (332,837) 2,254,755 225,476 Total Other Liabilities 2,501,546 299,839 (440,664) 2,360,721 331,442 Governmental Activities Long-Term Liabilities 36,593,013$ 299,839$ (2,491,971)$ 34,400,881$ 2,512,235$ LAND ACQUISITION AND CAPITAL IMPROVEMENT REVENUE BONDS On July 23, 1999, the Village issued $10,000,000 Land Acquisition and Capital Improvement Revenue Bonds, Series 1999, the proceeds of which were used for the acquisition of property and financing of the construction of the Civic Center project. The bonds mature on July 23, 2019 with final payment due on December 1, 2019. The Village has pledged non-ad valorem revenues to secure payment of the principal and interest on the bonds. The bonds are due in annual principal installments. Interest accrues at 4.715% per annum. Debt service requirements to maturity are as follows: Principal Interest Total Fiscal Year Ending September 30: 2010 500,000$ 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 610,000 219,247 829,247 2015-2019 3,530,000 624,266 4,154,266 2020 815,000 19,214 834,214 7,110,000$ 2,006,704$ 9,116,704$ VILLAGE OF KEY BISCAYNE, FLORIDA NOTES TO BASIC FINANCIAL STATEMENTS FISCAL YEAR ENDED SEPTEMBER 30, 2009 35 NOTE 9 – LONG-TERM DEBT (CONTINUED) CAPITAL IMPROVEMENT REVENUE BONDS On July 11, 2000, the Village issued a second series of $10,000,000 Capital Improvement Revenue Bonds, Series 2000, the proceeds of which were used for the acquisition of property and financing of the construction of the Civic Center project. The bonds mature on July 11, 2020. The Village has pledged non-ad valorem revenues to secure payment of the principal and interest on the bonds. The bonds are due in annual principal installments. Interest accrues at 5.24% per annum. Debt service requirements to maturity are as follows: Principal Interest Total Fiscal Year Ending September 30: 2010 490,000$ 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 600,000 287,152 887,152 2015-2019 3,505,000 916,869 4,421,869 2020 1,675,000 88,949 1,763,949 7,895,000$ 2,733,053$ 10,628,053$ 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: 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 539,762 201,437 741,199 2015-2019 3,008,095 697,900 3,705,995 2020-2023 2,431,652 144,784 2,576,436 7,955,589$ 2,032,837$ 9,988,426$ NOTE 9 – LONG-TERM DEBT (CONTINUED) VILLAGE OF KEY BISCAYNE, FLORIDA NOTES TO BASIC FINANCIAL STATEMENTS FISCAL YEAR ENDED SEPTEMBER 30, 2009 36 LAND ACQUISITION AND CAPITAL IMPROVEMENT REVENUE BONDS On December 12, 2004, the Village issued $2,800,000 of capital improvement and land acquisition revenue bonds, Series 2004 for the purpose of completing the road construction associated with the new administration, fire and community center buildings. The bonds mature on November 1, 2022. The Village has pledged non-ad valorem revenues to secure payment of the principal and interest on the bonds. The bonds are due in quarterly principal installments. Interest accrues at 3.83% per annum. Debt service requirements to maturity are as follows: Principal Interest Total Fiscal Year Ending September 30: 2010 297,607$ 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 157,081 63,221 220,302 2015-2019 881,836 219,676 1,101,512 2020-2023 670,207 45,776 715,983 2,443,595$ 642,064$ 3,085,659$ 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. Total principal and interest remaining on the bonds is $4,357,526. For the current year, debt service and pledged revenues were $285,864 and $334,520, respectively. The bonds mature on July 1, 2025 and are due in quarterly principal installments. Interest accrues at 4.09% per annum. VILLAGE OF KEY BISCAYNE, FLORIDA NOTES TO BASIC FINANCIAL STATEMENTS FISCAL YEAR ENDED SEPTEMBER 30, 2009 37 NOTE 9 – LONG-TERM DEBT (CONTINUED) TRANSPORTATION TAX REVENUE BONDS (CONTINUED) Debt service requirements to maturity are as follows: Principal Interest Total Fiscal Year Ending September 30: 2010 204,001$ 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 165,667 100,191 265,858 2015-2019 734,389 391,854 1,126,243 2020-2024 1,103,143 177,036 1,280,179 2025 456,720 11,592 468,312 3,206,683$ 1,150,843$ 4,357,526$ 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. Total principal and interest remaining on the bonds is $4,363,342. For the current year, debt service and pledged revenues were $357,125 and $365,000, respectively. The bonds are due in quarterly principal installments. Interest accrues at 4.05% per annum. Debt service requirements to maturity are as follows: Principal Interest Total Fiscal Year Ending September 30: 2010 221,325$ 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 260,035 97,090 357,125 2015-2019 1,469,630 315,995 1,785,625 2020-2021 758,213 33,880 792,093 3,429,293$ 934,049$ 4,363,342$ VILLAGE OF KEY BISCAYNE, FLORIDA NOTES TO BASIC FINANCIAL STATEMENTS FISCAL YEAR ENDED SEPTEMBER 30, 2009 38 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 $105,966 and final payment is due on November 15, 2009. Lease payments are due annually. Interest accrues at 2.994% per annum. On January 10, 2005, the Village entered into a Master Lease agreement for financing the acquisition of a Village vehicle and equipment for the Police Department with a fair value of $23,744. The final payment was made on January 10, 2009. The future minimum lease obligations and the net present value of the minimum lease payments as of September 30, 2009 were as follows: Fiscal Year Ending September 30: 2010 109,139$ Total Minimum Lease Payments 109,139 Less Amount Representing Interest (3,173) Present Value of Minimum Lease Payments 105,966$ The following is a summary of changes in long-term liabilities of the Village for business- type activities for the year ended September 30, 2009: Due Beginning Ending Within Balance Additions Reductions Balance One Year Business-type Activities Bonds and Loans Payable Stormwater utility revenue bonds 5,200,000$ --$ (365,000)$ 4,835,000$ 385,000$ Revolving loan 339,919 -- (19,580) 320,339 20,085 Revolving loan 2009 -- 2,067,002 -- 2,067,002 36,542 Total bonds and loans payable 5,539,919 2,067,002 (384,580) 7,222,341 441,627 Business-type Activities Long-Term Liabilities 5,539,919$ 2,067,002$ (384,580)$ 7,222,341$ 441,627$ VILLAGE OF KEY BISCAYNE, FLORIDA NOTES TO BASIC FINANCIAL STATEMENTS FISCAL YEAR ENDED SEPTEMBER 30, 2009 39 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 $7,200,000 Bond Anticipation Notes, Series 1995. The bonds mature on January 26, 2019. The Village has pledged stormwater utility fees and non-ad valorem revenues to secure payment of the principal and interest on the bonds. The bonds are due in annual principal installments on October 1st. Interest accrues at 4.13% per annum. Debt service requirements to maturity are as follows: Principal Interest Total Fiscal Year Ending September 30: 2010 385,000$ 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 465,000 131,128 596,128 2015-2019 2,710,000 346,714 3,056,714 4,835,000$ 1,177,877$ 6,012,877$ STATE REVOLVING FUND LOAN In June 1996, the Village entered into a loan agreement in the amount of $887,983 for the financing of the planning and engineering of the proposed sanitary sewer construction project under a State Revolving Fund Loan. The proceeds were received in fiscal year 1998. The loan is payable in semi-annual payments over 20 years beginning on April 15, 2003 at an interest rate of 2.56% per annum. The loan matures on October 15, 2022. Debt service requirements to maturity are as follows: Principal Interest Total Fiscal Year Ending September 30: 2010 20,085$ 8,050$ 28,135$ 2011 20,602 7,532 28,134 2012 21,133 7,001 28,134 2013 21,677 6,457 28,134 2014 22,236 5,898 28,134 2015-2019 120,991 20,597 141,588 2020-2023 93,615 4,854 98,469 320,339$ 60,389$ 380,728$ VILLAGE OF KEY BISCAYNE, FLORIDA NOTES TO BASIC FINANCIAL STATEMENTS FISCAL YEAR ENDED SEPTEMBER 30, 2009 40 NOTE 9 – LONG-TERM DEBT (CONTINUED) 2009 STATE REVOLVING FUND LOAN In June 2009, the Village entered into a revolving loan agreement with the State of Florida Department of Environmental Protection in an amount up to $5,150,000 for the financing of the sanitary sewer construction project. Proceeds in the amount of $2,067,002 were received during the 2009 fiscal year. The loan is payable in semi-annual payments over 20 years beginning on August 15, 2010 at an interest rate of 3.39% per annum. The loan matures on February 15, 2030. Debt service requirements to maturity are as follows: Principal Interest Total Fiscal Year Ending September 30: 2010 36,542$ 35,036$ 71,578$ 2011 74,953 68,203 143,156 2012 77,516 65,640 143,156 2013 80,166 62,990 143,156 2014 82,906 60,250 143,156 2015-2019 459,035 256,744 715,779 2020-2024 543,052 172,727 715,779 2025-2029 642,447 73,332 715,779 2030 70,385 1,193 71,578 2,067,002$ 796,114$ 2,863,117$ 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. VILLAGE OF KEY BISCAYNE, FLORIDA NOTES TO BASIC FINANCIAL STATEMENTS FISCAL YEAR ENDED SEPTEMBER 30, 2009 41 NOTE 10 – COMMITMENTS AND CONTINGENCIES (CONTINUED) CONSTRUCTION COMMITMENT The Village has outstanding construction commitments of approximately $2.7 million for its sanitary sewer project. NOTE 11 – DEFICIT FUND BALANCE The Special Revenue Fund has a deficit fund balance of $1,501,382 which is being funded from the General Fund and from revenues derived from an interlocal agreement with Miami-Dade County over a period of approximately 12 years. NOTE 12 – RESERVED FUND BALANCES As of September 30, 2009, fund balances in the general fund have been reserved for the following purposes. The Village, by its charter, cannot have any unreserved fund balance, therefore, many of the reserves are established to fund current operations, such as working capital. Emergencies 4,000,001$ Working Capital 1,992,064 Compensated Absences 450,952 Building Inspections 566,173 Law Enforcement Seizures 308,813 Prepaids 250,693 Police Labor 90,000 Fire Grant Revenue (UASI) 50,722 Fire Rescue Transport Fees 287,913 Capital Improvement Plan 1,130,089 Playing Fields 416,403 Police/Admin. Bldg. Reserve 13,632 Fire Station Bldg. Reserve 13,632 Community Center Equip Resv. 50,000 Fire Vehicle Replacements 50,000 Master Plan Initiatives 1,873,764 Capital Lease 298,682 Roadway Improvements 175,000 Recreation Facilities 300,000 12,318,533$ VILLAGE OF KEY BISCAYNE, FLORIDA NOTES TO BASIC FINANCIAL STATEMENTS FISCAL YEAR ENDED SEPTEMBER 30, 2009 42 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). The plans are administered by a third party administrator. 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, 2009 were $490,917 while the employee contributions were $154,439. 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, 2008. 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. NOTE 14 – DEFINED BENEFIT PENSION PLAN (CONTINUED) VILLAGE OF KEY BISCAYNE, FLORIDA NOTES TO BASIC FINANCIAL STATEMENTS FISCAL YEAR ENDED SEPTEMBER 30, 2009 43 PLAN DESCRIPTION (CONTINUED) At October 1, 2008 (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 40 Non-vested 26 Total 66 FUNDING POLICY The Village’s contribution rate is adjusted each year to an amount equal to the total pension cost for the year, as determined by the most recent actuarial valuation, less the amount of revenue received from the State of Florida pursuant to Chapters 175 and 185 of the Florida Statutes. The Village’s contribution rate was 10.51% of covered payroll for the year ended September 30, 2009 which was determined by the October 1, 2007 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. FUNDED STATUS AND FUNDING PROGRESS The funded status of the plan as of October 1, 2008, 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 10/1/08 10,682,895$ 16,049,481$ 5,366,586$ 66.6% 6,365,246$ 84% 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 FISCAL YEAR ENDED SEPTEMBER 30, 2009 44 NOTE 14 – DEFINED BENEFIT PENSION PLAN (CONTINUED) FUNDED STATUS AND FUNDING PROGRESS (CONTINUED) Additional information as of the latest actuarial valuation follows: Valuation Date 10/1/08 Contribution Rates: Employer (and State)15.32% 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 Not Applicable *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 920,120$ Interest on Net Pension Asset (10,329) Adjustment to Annual Required Contribution 15,500 Annual Pension Cost 925,291 Contributions Made 920,120 Decrease in Net Pension Asset 5,171 Net Pension Asset - Beginning of Year (121,512) Net Pension Asset - End of Year (116,341)$ The annual required contribution for the current year was determined as part of the October 1, 2008 actuarial valuation using the entry age normal funding method. VILLAGE OF KEY BISCAYNE, FLORIDA NOTES TO BASIC FINANCIAL STATEMENTS FISCAL YEAR ENDED SEPTEMBER 30, 2009 45 NOTE 14 – DEFINED BENEFIT PENSION PLAN (CONTINUED) ANNUAL PENSION COST AND NET PENSION ASSET (CONTINUED) Annual PercentageNet Pension Fiscal Year Pension of APC Obligation Ended Cost (APC)Contributed (Asset) 9/30/2007 $ 777,937 99.5% $ (125,650) 9/30/2008 843,538 99.5% (121,512) 9/30/2009 925,291 99.5%(116,341) 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 – SUBSEQUENT EVENTS NEW DEBT On November 10, 2009, the Village issued Water and Sewer Revenue Bonds, Series 2009 in the amount of $1.2 million for the purpose of financing a portion of the costs of Water and Sewer system Improvements within the Village. TRANSFER Under a conveyance process, the new water distribution systems installed within zones 2 and 3 of phase 1 which includes water mains, valves, fire hydrants, water services and water meters has been transferred to the Miami-Dade Water & Sewer Department (MDWASD). The total transfer approximated $9 million. Via this process, these facilities are now under the ownership and are the responsibility of MDWASD. Under a lease agreement process, the new sanitary sewer facilities within this zone/phase which include sewer pipes, manholes, service laterals and a pumping station has been turned over to MDWASD for their exclusive operation and maintenance. The facilities remain the property of the Village for the 20 year term of the lease at a rate of $1 per year. At the end of the lease term, all of these facilities become the property of MDWASD. This arrangement has been set up since the sanitary sewer system cannot be conveyed until the state revolving loan funds are paid off. REQUIRED SUPPLEMENTARY INFORMATION Actual Variance Actual Amounts with Final Amounts Prior on a Budget - on a GAAP Year Budgetary Positive Original Final Basis Reserves Basis (Negative) Revenues Property taxes 19,561,571$ 19,561,571$ 19,769,976$ --$ 19,769,976$ 208,405$ Utility taxes 2,584,530 2,584,530 2,834,749 -- 2,834,749 250,219 Franchise fees 1,065,000 1,065,000 992,997 -- 992,997 (72,003) Licenses and permits 1,075,200 1,075,200 1,188,297 -- 1,188,297 113,097 Intergovernmental 937,638 937,638 1,154,946 -- 1,154,946 217,308 Charges for services 2,140,150 2,140,150 2,354,365 -- 2,354,365 214,215 Grants 7,500 7,500 157,912 -- 157,912 150,412 Interest -- -- 39,366 -- 39,366 39,366 Other income 351,550 351,550 -- -- -- (351,550) Total Revenues 27,723,139 27,723,139 28,492,608 -- 28,492,608 769,469 Expenditures Current: General government: Elected officials 474,688 474,688 390,688 -- 390,688 84,000 Village Clerk 452,826 452,826 335,070 -- 335,070 117,756 Administration 1,079,553 1,079,553 910,241 -- 910,241 169,312 Village Attorney 483,000 483,000 656,420 (173,420) 483,000 -- Total general government 2,490,067 2,490,067 2,292,419 (173,420) 2,118,999 371,068 Public safety: Police 5,368,708 5,368,708 5,315,573 -- 5,315,573 53,135 Fire 6,160,922 6,160,922 6,432,219 (271,297) 6,160,922 - Total public safety 11,529,630 11,529,630 11,747,792 (271,297) 11,476,495 53,135 Public works 1,977,947 1,977,947 1,924,339 -- 1,924,339 53,608 Building, zoning and planning 1,687,548 1,687,548 1,542,531 -- 1,542,531 145,017 Parks and recreation 3,466,300 3,466,300 3,753,273 (286,973) 3,466,300 -- Debt service: Principal 1,762,012 1,762,012 1,641,152 -- 1,641,152 120,860 Interest and fiscal charges 1,573,445 1,573,445 1,170,051 -- 1,170,051 403,394 Total Expenditures 24,486,949 24,486,949 24,071,557 (731,690) 23,339,867 1,147,082 Excess of Revenues over Expenditures 3,236,190 3,236,190 4,421,051 731,690 5,152,741 1,916,551 Other Financing Uses Appropriation of prior years' reserves -- -- -- (731,690) -- -- Transfers out (3,236,190) (3,236,190) (3,400,696) -- (3,400,696) (164,506) Total Other Financing Uses (3,236,190) (3,236,190) (3,400,696) (731,690) (3,400,696) (164,506) Net Change in Fund Balances --$ --$ 1,020,355$ --$ 1,752,045$ 1,752,045$ Budgeted Amounts VILLAGE OF KEY BISCAYNE, FLORIDA BUDGETARY COMPARISON SCHEDULE GENERAL FUND FISCAL YEAR ENDED SEPTEMBER 30, 2009 REQUIRED SUPPLEMENTARY INFORMATION See note to budgetary comparison schedule. 46 VILLAGE OF KEY BISCAYNE, FLORIDA REQUIRED SUPPLEMENTARY INFORMATION NOTE TO BUDGETARY COMPARISON SCHEDULE FISCAL YEAR ENDED SEPTEMBER 30, 2008 47 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, 2009, 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, 2009. (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 10/1/03 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% 10/1/08 10,682,895 16,049,481 5,366,586 66.6% 6,365,246 84% VILLAGE OF KEY BISCAYNE, FLORIDA PENSION TRUST FUND REQUIRED SUPPLEMENTARY INFORMATION SCHEDULE OF FUNDING PROGRESS 48 Year Annual Ended Required Percentage September 30, Contribution Contributed 2004 515,437$ 100% 2005 764,420 100% 2006 729,857 100% 2007 773,701 100% 2008 839,400 100% 2009 797,802 115% REQUIRED SUPPLEMENTARY INFORMATION VILLAGE OF KEY BISCAYNE, FLORIDA PENSION TRUST FUND SCHEDULE OF EMPLOYER CONTRIBUTIONS 49 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: 50-54 Revenue Capacity These schedules contain information to help the reader assess the Village's most significant local revenue source, the property tax. 55-59 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. 60-63 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. 64-66 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. 67-68 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. 2003 2004 2005 2006 2007 2008 2009 Governmental activities Invested in capital assets, net of related debt 23,889,001$ 26,149,714$ 26,284,600$ 28,676,266$ 31,422,358$ 36,139,953$ 38,482,243$ Restricted 171,680 283,180 326,826 359,899 261,813 284,639 308,813 Unrestricted 4,161,688 2,809,659 4,302,680 4,926,634 8,453,390 10,924,001 15,055,000 Total governmental activities net assets 28,222,369 29,242,553 30,914,106 33,962,799 40,137,561 47,348,593 53,846,056 Business-type activities Invested in capital assets, net of related debt 2,024,755 1,768,078 1,931,844 2,326,089 2,505,881 10,174,333 15,383,765 Unrestricted 1,388,975 1,254,664 1,281,141 778,320 432,133 (2,209,685) (346,721) Total business-type activities net assets 3,413,730 3,022,742 3,212,985 3,104,409 2,938,014 7,964,648 15,037,044 Total government Invested in capital assets, net of related debt 25,913,756 27,917,792 28,216,444 31,002,355 33,928,239 46,314,286 53,866,008 Restricted 171,680 283,180 326,826 359,899 261,813 284,639 308,813 Unrestricted 5,550,663 4,064,323 5,583,821 5,704,954 8,885,523 8,714,316 14,708,279 Total government net assets 31,636,099$ 32,265,295$ 34,127,091$ 37,067,208$ 43,075,575$ 55,313,241$ 68,883,100$ Note: The Village implemented GASB Statement No. 34 for the fiscal year ended September 30, 2003. VILLAGE OF KEY BISCAYNE, FLORIDA NET ASSETS BY COMPONENT LAST SEVEN FISCAL YEARS (ACCRUAL BASIS OF ACCOUNTING) Fiscal Year 50 2003 2004 2005 2006 2007 2008 2009 Expenses Governmental activities: General government 5,691,379$ 3,614,636$ 2,914,734$ 4,252,037$ 3,781,396$ 3,213,273$ 2,868,728$ Fire 4,821,645 4,738,402 4,867,525 4,947,149 5,257,789 6,399,665 6,523,753 Police 4,787,090 4,311,449 4,373,145 4,275,617 4,651,660 5,272,383 5,258,243 Building, zoning and planning 1,252,012 1,220,180 1,235,175 1,547,042 1,447,968 1,529,272 1,540,507 Public works 963,676 1,103,940 2,189,673 4,004,651 1,589,444 2,046,776 1,914,119 Parks and recreation 826,695 1,013,741 2,614,785 2,849,434 3,077,624 3,633,233 4,090,555 Interest on long-term debt 1,064,028 1,487,245 1,305,383 1,413,272 1,505,253 1,436,481 1,447,387 Total governmental activities 19,406,525 17,489,593 19,500,420 23,289,202 21,311,134 23,531,083 23,643,292 Business-type activities: Stormwater system 634,361 971,081 454,963 720,158 693,135 911,500 779,856 Solid waste collection 273,076 259,173 466,162 501,417 571,246 619,823 618,155 Sanitary sewer 6,288 15,732 10,261 9,993 9,454 9,046 144,922 Total business-type activities 913,725 1,245,986 931,386 1,231,568 1,273,835 1,540,369 1,542,933 Total government expenses 20,320,250$ 18,735,579$ 20,431,806$ 24,520,770$ 22,584,969$ 25,071,452$ 25,186,225$ Program revenues Governmental activities: Charges for services: General government 1,034,247$ 961,100$ 1,257,895$ 1,466,186$ 1,389,163$ 1,320,004$ 237,315$ Police 110,215 197,244 212,121 40,719 21,385 14,203 38,181 Fire 5,805 6,505 7,120 50,392 40,144 146,588 136,433 Parks and recreation 29,752 35,787 1,287,806 1,512,923 1,416,707 1,620,787 1,957,747 Building, zoning and planning 117,705 86,455 142,550 167,802 193,391 133,104 1,173,440 Operating grants and contributions 99,830 -- 650,679 3,559,753 799,493 251,180 157,912 Capital grants and contributions 421,085 524,736 517,643 -- -- -- 1,709,481 Total governmental activities program revenues 1,818,639 1,811,827 4,075,814 6,797,775 3,860,283 3,485,866 5,410,509 Business-type activities: Charges for services: Stormwater system 531,164 520,729 518,812 517,365 509,571 499,101 491,314 Solid waste collection 313,492 284,900 533,632 531,967 520,650 530,803 635,580 Capital grants and contributions: Stormwater system -- -- -- -- -- - 331,319 Sanitary sewer -- -- -- -- -- 5,460,763 6,971,311 Total business-type activities program revenues 844,656 805,629 1,052,444 1,049,332 1,030,221 6,490,667 8,429,524 Total program revenues 2,663,295$ 2,617,456$ 5,128,258$ 7,847,107$ 4,890,504$ 9,976,533$ 13,840,033$ VILLAGE OF KEY BISCAYNE, FLORIDA CHANGES IN NET ASSETS LAST SEVEN FISCAL YEARS (ACCRUAL BASIS OF ACCOUNTING) Fiscal Year 51 (Continued) 2003 2004 2005 2006 2007 2008 2009 Net (expense) revenue Governmental activities (17,587,886)$ (15,677,766)$ (15,424,606)$ (16,491,427)$ (17,450,851)$ (20,045,217)$ (18,232,783)$ Business-type activities (69,069) (440,357) 121,058 (182,236) (243,614) 4,950,298 6,886,591 Total net expense (17,656,955)$ (16,118,123)$ (15,303,548)$ (16,673,663)$ (17,694,465)$ (15,094,919)$ (11,346,192)$ General revenues Governmental activities: Taxes: Property taxes 11,317,161$ 12,770,711$ 13,360,251$ 14,830,238$ 18,667,979$ 20,051,239$ 19,769,976$ Utility taxes 2,251,876 2,219,118 1,488,002 1,549,601 1,467,392 1,534,379 1,555,748 Franchise fees 611,502 677,203 705,810 1,088,929 1,113,194 1,064,666 992,997 Communications services tax -- -- 746,400 797,054 763,801 1,226,423 1,091,734 Intergovernmental 776,869 821,883 978,304 996,092 1,000,265 2,265,243 1,348,324 Investment earnings 82,286 110,562 255,611 306,339 641,115 346,531 44,737 Miscellaneous 200,561 126,607 281,657 -- -- -- 91,232 Transfers (9,737) (28,134) (28,135) (28,133) (28,133) (28,134) (164,502) Total governmental activities 15,230,518 16,697,950 17,787,900 19,540,120 23,625,613 26,460,347 24,730,246 Business-type activities: Investment earnings 22,163 21,235 41,050 45,527 49,086 48,202 21,303 Transfers 9,737 28,134 28,135 28,133 28,133 28,134 164,502 Total business-type activities 31,900 49,369 69,185 73,660 77,219 76,336 185,805 Total general revenues 15,262,418$ 16,747,319$ 17,857,085$ 19,613,780$ 23,702,832$ 26,536,683$ 24,916,051$ Change in net assets Governmental activities (2,357,368)$ 1,020,184$ 2,363,294$ 3,048,693$ 6,174,762$ 6,415,130$ 6,497,463$ Business-type activities (37,169) (390,988) 190,243 (108,576) (166,395) 5,026,634 7,072,396 Total change in net assets (2,394,537)$ 629,196$ 2,553,537$ 2,940,117$ 6,008,367$ 11,441,764$ 13,569,859$ Note: The Village implemented GASB Statement No. 34 for the fiscal year ended September 30, 2003. Fiscal Year VILLAGE OF KEY BISCAYNE, FLORIDA CHANGES IN NET ASSETS (Continued) LAST SEVEN FISCAL YEARS (ACCRUAL BASIS OF ACCOUNTING) 52 2003 2004 2005 2006 2007 2008 2009 General fund Reserved 2,967,382$ 4,677,188$ 5,754,277$ 6,874,310$ 9,875,416$ 11,298,178$ 12,318,533$ Unreserved 1,000,177 275,000 -- -- -- -- -- Total general fund 3,967,559 4,952,188 5,754,277 6,874,310 9,875,416 11,298,178 12,318,533 All other governmental funds Reserved -- -- -- -- -- -- -- Unreserved, reported in: Special revenue fund 198,563 513,862 (638,221) (1,496,749) (2,482,196) (2,701,623) (1,501,382) Capital projects funds 905,611 (489,979) 881,595 1,421,014 2,954,753 4,783,222 6,875,361 Total all other governmental funds 1,104,174 23,883 243,374 (75,735) 472,557 2,081,599 5,373,979 Total governmental funds 5,071,733$ 4,976,071$ 5,997,651$ 6,798,575$ 10,347,973$ 13,379,777$ 17,692,512$ Note: The Village implemented GASB Statement No. 34 for the fiscal year ended September 30, 2003. Fiscal Year VILLAGE OF KEY BISCAYNE, FLORIDA FUND BALANCES OF GOVERNMENTAL FUNDS LAST SEVEN FISCAL YEARS (MODIFIED ACCRUAL BASIS OF ACCOUNTING) 53 2003 2004 2005 2006 2007 2008 2009 Revenues Ad valorem taxes 11,317,161$ 12,770,711$ 13,360,251$ 14,830,238$ 18,667,979$ 20,051,239$ 19,769,976$ Franchise fees 611,502 677,203 1,452,210 1,885,983 1,113,194 1,064,666 992,997 Utility taxes 2,251,876 2,219,118 1,488,002 1,549,601 2,231,193 1,534,379 2,834,749 Licenses and permits 970,001 961,100 1,040,130 1,196,853 1,298,133 1,240,290 1,188,297 Intergovernmental revenue 999,391 1,031,805 1,495,947 1,756,083 1,593,718 3,189,251 3,047,844 Charges for services 327,723 325,651 1,867,362 2,041,169 1,762,657 1,994,396 2,354,819 Grants 99,830 -- 650,679 2,799,762 206,040 251,180 167,873 Investment income 82,286 110,562 255,611 306,339 632,355 338,528 44,737 Miscellaneous 399,124 441,761 281,657 -- 8,762 8,003 26,232 Total revenues 17,058,894 18,537,911 21,891,849 26,366,028 27,514,031 29,671,932 30,427,524 Expenditures Current: General government 1,829,501 1,712,899 2,136,375 2,239,052 2,543,134 2,329,647 2,266,763 Fire 4,046,269 4,462,601 4,749,407 5,117,176 5,122,699 5,744,775 6,407,770 Police 4,305,474 4,113,946 4,605,148 4,388,362 4,590,962 4,863,765 5,116,158 Public works 963,247 1,098,250 2,183,774 4,002,609 1,587,460 1,720,689 1,914,119 Building, planning and zoning 1,245,119 1,212,290 1,238,376 1,544,696 1,455,193 1,513,019 1,540,507 Parks and recreation 782,065 952,261 2,193,633 2,634,887 2,830,020 3,367,638 3,730,084 Capital outlay 5,108,330 10,664,348 4,527,998 6,432,271 6,830,844 4,743,796 1,537,930 Debt service: Principal retirement 1,415,000 1,583,924 1,161,298 1,214,646 1,418,401 1,679,991 2,051,307 Interest and other fiscal charges 1,064,028 1,135,384 1,300,596 1,413,272 1,556,396 1,444,576 1,450,649 Total expenditures 20,759,033 26,935,903 24,096,605 28,986,971 27,935,109 27,407,896 26,015,287 Excess (deficiency) of revenues over expenditures (3,700,139) (8,397,992) (2,204,756) (2,620,943) (421,078) 2,264,036 4,412,237 Other financing sources (uses) Transfers in 938,652 819,251 1,245,653 1,731,583 6,697,854 4,533,094 3,236,194 Transfers out (948,389) (847,385) (1,273,788) (1,759,716) (6,725,988) (4,561,228) (3,400,696) Bonds issued 1,657,090 8,330,462 2,850,000 3,450,000 4,000,000 -- -- Proceeds from sale of capital assets 1,657,090 8,330,462 2,850,000 3,450,000 4,000,000 -- 65,000 Capital lease proceeds -- -- 404,471 -- -- -- -- Total other financing sources (uses)3,304,443 16,632,790 6,076,336 6,871,867 7,971,866 (28,134) (99,502) Net change in fund balances (395,696)$ 8,234,798$ 3,871,580$ 4,250,924$ 7,550,788$ 2,235,902$ 4,312,735$ Debt service as a percentage of non-capital expenditures 15.84% 16.71% 12.58% 11.65% 14.10% 13.59% 14.27% 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 SEVEN FISCAL YEARS (MODIFIED ACCRUAL BASIS OF ACCOUNTING) Fiscal Year 54 Fiscal Ad Valorem Franchise Utility Inter- Communications Year Taxes Taxes Taxes governmental* Services Tax** Total 2000 7,799,633$ 729,998$ 1,723,902$ 889,704$ --$ 11,143,237$ 2001 8,737,608 738,513 1,772,208 930,169 -- 12,178,498 2002 9,569,030 639,072 2,258,931 971,136 904,475 14,342,644 2003 11,317,161 611,502 2,251,876 999,391 825,739 16,005,669 2004 12,770,711 677,203 2,219,118 1,031,805 770,637 17,469,474 2005 13,360,125 705,810 2,234,402 1,140,599 746,400 18,187,336 2006 14,830,238 1,088,929 1,549,601 1,756,083 797,054 20,021,905 2007 18,667,979 1,113,194 1,467,392 1,593,718 763,801 23,606,084 2008 20,051,239 1,064,666 610,371 3,189,251 924,008 25,839,535 2009 19,769,976 992,997 1,555,748 3,047,844 1,091,734 26,458,299 **Communications services tax became effective October 1, 2001, replacing utility taxes and franchise fees on telephone and cable TV. VILLAGE OF KEY BISCAYNE, FLORIDA GENERAL GOVERNMENTAL TAX REVENUES BY SOURCE LAST TEN FISCAL YEARS (MODIFIED ACCRUAL BASIS OF ACCOUNTING) Source: Village of Key Biscayne Finance Department. *Includes half-cent sales tax and state revenue sharing. 55 Total Fiscal Year Total Net Direct Ended Residential Commercial Personal Assessed Tax September 30, Property Property Property Value Rate 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 2009 5,597,851,704 302,747,017 35,617,296 5,936,216,017 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 56 Florida South Total Debt Total Debt Total Inland Florida Direct and Fiscal Tax Roll General Debt Total Operating Service County Operating Service School Navigation Water Overlapping Year Year Operations Service Village Millage Millage Millage Millage Millage Millage District Management Other Rates 2000 1999 3.606 -- 3.606 5.809 0.816 6.625 8.654 0.990 9.644 0.044 0.597 0.421 20.937 2001 2000 3.606 -- 3.606 5.751 0.652 6.403 8.702 0.915 9.617 0.041 0.597 0.451 20.715 2002 2001 3.606 -- 3.606 5.713 0.552 6.265 8.528 0.848 9.376 0.039 0.697 0.451 20.434 2003 2002 3.606 -- 3.606 5.889 0.390 6.279 8.482 0.770 9.252 0.039 0.697 0.451 20.324 2004 2003 3.606 -- 3.606 5.969 0.285 6.254 8.418 0.682 9.100 0.039 0.597 1.086 20.682 2005 2004 3.606 -- 3.606 5.935 0.285 6.220 8.090 0.597 8.687 0.039 0.597 1.030 20.179 2006 2005 3.606 -- 3.606 5.835 0.285 6.120 7.947 0.491 8.438 0.039 0.597 1.014 19.814 2007 2006 3.450 -- 3.450 5.615 0.285 5.900 7.691 0.414 8.105 0.039 0.597 1.008 19.099 2008 2007 3.200 -- 3.200 5.220 0.285 5.505 7.533 0.264 7.797 0.035 0.535 0.511 17.582 2009 2008 3.200 -- 3.200 4.838 0.285 5.123 7.698 0.297 7.995 0.035 0.535 0.972 17.860 (1) Overlapping rates are those of local and county governments that apply to property owners within the Village of Key Biscayne. Not all overlapping rates apply to all Village of Key Biscayne property owners (i.e. the rates for special districts apply only to the proportion of the government's property owners whose property is located within the geographic boundaries of the special district). VILLAGE OF KEY BISCAYNE, FLORIDA PROPERTY TAX RATES - DIRECT AND OVERLAPPING GOVERNMENTS LAST TEN FISCAL YEARS Miami-Dade County Overlapping Rates (1)Village of Key Biscayne Miami-Dade Schools Note: All millage rates are based on $1 for every $1,000 of assessed value. Sources: Village of Key Biscayne Finance Department and Miami-Dade County Property Appraiser's Office. 57 Percent of Percent of Total Total Net Village Net Net Village Net Assessed Assessed Assessed Assessed Taxpayer Value Rank Value Taxpayer Value Rank Value SBR Fortune Associates 44,568,400$ 1 0.75% Ocean Club Key Biscayne 39,590,009$ 1 1.80% Galleria if Key Biscayne Inc.19,300,000 2 0.33% Sonesta Beach Hotel 28,700,000 2 1.30% Key Biscayne Properties LLC 15,134,130 3 0.25% GB Hotel Partners LTD 23,341,830 3 1.06% Red Dragon's Sands LTD 14,568,368 4 0.25% Grand Bay Tower Association 12,855,305 4 0.58% Atlantic USA Inc. 13,229,323 5 0.22% Key Biscayne Shopping Center 8,672,526 5 0.39% United Real Estate Ventures Inc. 13,010,965 6 0.22% Galleria of Key Biscayne 7,369,463 6 0.33% 260 Cape FLA LLC 12,995,950 7 0.22% PITI, Inc 5,251,313 7 0.24% Tesaurus Holdings Inc. 12,851,673 8 0.22% Red Dragon's Sands, LTD 4,977,558 8 0.23% Ocean Club Community Assoc. 12,500,000 9 0.21% Fininvest Investment, et al (Key Colony)4,193,744 9 0.19% 500 Bay Lane LLC 12,211,803 10 0.21%Caroline T. Perkins 3,547,661 10 0.16% 138,499,409$ 6.28% 170,370,612$ 2.87% Source: Tax roll provided by Miami-Dade County Property Appraisers Office. 2009 2000 VILLAGE OF KEY BISCAYNE, FLORIDA PRINCIPAL PROPERTY TAXPAYERS CURRENT YEAR AND NINE YEARS AGO 58 Total Taxes Fiscal Year Levied for Collections in Ended Fiscal Percent Subsequent Percent September 30, Year Amount of Levy Year's Amount of Levy 2000 8,050,243$ 7,799,633$ 96.89% 11,699$ 7,811,332$ 97.03% 2001 9,011,571 8,738,608 96.97% 13,108 8,751,716 97.12% 2002 9,850,992 9,515,138 96.59% 14,273 9,529,411 96.74% 2003 11,755,271 11,317,160 96.27% 16,976 11,334,136 96.42% 2004 13,201,979 12,869,711 97.48% 19,305 12,889,016 97.63% 2005 13,974,460 13,360,251 95.60% 20,040 13,380,291 95.75% 2006 15,461,356 14,830,238 95.92% 22,245 14,852,483 96.06% 2007 19,423,659 18,667,979 96.11% 28,002 18,695,981 96.25% 2008 19,802,903 19,739,848 99.68% 311,392 20,051,240 101.25% 2009 19,561,571 19,389,610 99.12% 380,366 19,769,976 101.07% VILLAGE OF KEY BISCAYNE, FLORIDA PROPERTY TAX LEVIES AND COLLECTIONS LAST TEN FISCAL YEARS the Fiscal Year Source: Village of Key Biscayne Finance Department and Miami-Dade County Tax Collector's Office. of the Levy to Date Total Collections Collected within 59 Business-Type Activities Fiscal Year General Percent of Ended Obligation Revenue Capital Loans Revenue Personal Per September 30, Bonds Bonds Leases Payable Bonds Total Income (2) Capita (1) 2000 --$ 21,220,000$ --$ --$ 7,065,000$ 28,285,000$ 0.00% 2,742$ 2001 -- 30,120,000 -- -- 6,940,000 37,060,000 0.00% 3,592 2002 -- 29,935,000 -- -- 6,810,000 36,745,000 0.00% 3,562 2003 -- 29,271,000 -- -- 6,625,000 35,896,000 0.00% 3,479 2004 -- 29,164,892 691,744 -- 6,430,000 35,594,892 0.00% 3,450 2005 -- 30,850,606 798,598 -- 6,010,000 36,860,606 0.00% 3,573 2006 -- 33,085,960 615,347 -- 5,785,000 38,870,960 0.00% 3,768 2007 -- 31,695,102 415,341 -- 5,200,000 36,895,102 0.00% 3,576 2008 -- 33,987,811 213,793 5,000,000 5,539,919 44,741,524 0.00% 4,258 2009 -- 32,040,160 105,966 -- 7,222,341 39,368,467 0.00% 3,441 (2) Not Available (1) See the Schedule of Demographic and Economic Statistics on page 61 for personal income and population data. Governmental Activities VILLAGE OF KEY BISCAYNE, FLORIDA RATIOS OF OUTSTANDING DEBT BY TYPE LAST TEN FISCAL YEARS Note: Details regarding the Village's outstanding debt can be found in the notes to the financial statements. 60 VILLAGE OF KEY BISCAYNE, FLORIDA RATIOS OF GENERAL BONDED DEBT OUTSTANDING LAST TEN FISCAL YEARS The Village does not have general obligation debt. 61 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 32,040,160$ 100.00% 32,040,160$ Overlapping debt: Miami-Dade County 523,596,000 0.0285%149,225 Miami-Dade County School Board 560,574,000 0.0297%166,490 Subtotal, Overlapping Debt 315,715 Village of Key Biscayne Direct Debt 32,040,160 Total Direct and Overlapping Debt 32,355,875$ (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. 2009 VILLAGE OF KEY BISCAYNE, FLORIDA DIRECT AND OVERLAPPING GOVERNMENTAL ACTIVITIES DEBT SEPTEMBER 30, 2009 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. 62 Fiscal Year Non- Ended Ad Valorem September 30,Revenues Principal Interest Coverage 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 3.08 2009 10,657,548 2,051,307 1,450,649 3.04 VILLAGE OF KEY BISCAYNE, FLORIDA PLEDGED REVENUE COVERAGE LAST TEN FISCAL YEARS Debt Service Source: Village of Key Biscayne Finance Department 63 Personal Income (Amounts Per Capita Expressed in Personal Unemployment Year Population (1) Thousands) (2) Income (3) Rate (4) 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% 2009 11,411 -- 86,599 3.0% 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. 64 Percentage of Percentage of Total Village Total Village Employer Employees (1) Rank Employment Employees Rank Employment Ritz Carlton Key Biscayne 1,500 1 not known Winn Dixie Stores, Inc. 250 3 not known Village of Key Biscayne 116 4 not known All remaining employers are of an extremely small number Total 1,866 Notes: (1) All amounts are estimated for timely inclusion in report. Requests for information received no response. VILLAGE OF KEY BISCAYNE, FLORIDA PRINCIPAL EMPLOYERS Information not available 2009 2,000 CURRENT YEAR AND NINE YEARS AGO 65 2000 2001 2002 2003 2004 2005 2006 2007 2008 2009 Number of employees: General government 7 7 7 5 6 7 6 6 6 8 Public safety 72 72 72 74 76 79 79 79 78 81 Building, planning and zoning 16 16 16 12 12 13 13 14 13 13 Public works 3 3 3 5 5 5 5 4 4 4 Parks and recreation 4 3 4 4 4 6 6 7 7 10 Total number of employees 102 101 102 100 103 110 109 110 108 116 VILLAGE OF KEY BISCAYNE, FLORIDA FULL-TIME EQUIVALENT VILLAGE GOVERNMENT EMPLOYEES BY FUNCTION LAST TEN FISCAL YEARS Source: Village of Key Biscayne Finance Department. 66 Function/Program 2000 2001 2002 2003 2004 2005 2006 2007 2008 2009 Public safety: Police: Police personnel and officers 40 40 40 40 41 40 40 40 39 42 Police calls for service 21,127 20,659 21,127 20,660 19,004 16,510 13,006 35,412 36,190 37,002 Parking violations 789 639 789 639 628 682 801 996 776 824 Traffic violations 2,875 2,433 2,875 2,433 3,035 1,397 1,468 1,104 946 975 Fire: Fire personnel 33 33 33 34 35 39 39 39 39 39 Fire incidents 1,051 485 1,050 1,114 1,148 1,403 1,103 998 1,006 1,012 Fire inspections performed 565 470 476 840 307 332 269 220 305 229 Planning and development: Business permits issued 2,408 1,803 2,313 2,581 3,061 3,045 3,000 3,504 3,620 3,520 Occupational licenses issued 598 625 729 668 428 433 475 914 1,224 1,324 Culture and recreation: Number of building users -- -- -- -- 1,250 1,600 1,400 1,400 1,300 1,325 Solid waste: Residential accounts 1,200 1,200 1,200 1,200 1,200 1,200 1,200 1,200 1,299 1,298 VILLAGE OF KEY BISCAYNE, FLORIDA OPERATING INDICATORS BY FUNCTION/PROGRAM LAST TEN FISCAL YEARS Sources: Various Village Departments. Note: Indicators are not available for the general government function. 67 Function/Program 2000 2001 2002 2003 2004 2005 2006 2007 2008 2009 General government: Number of general government buildings 1 1 1 1 1 1 1 1 1 1 Public safety: Police: Police stations 1 1 1 1 1 1 1 1 1 1 Patrol units 3 3 3 3 3 3 3 3 3 3 Fire: Fire stations 1 1 1 1 1 1 1 1 1 1 Transportation: Miles of streets 22.4 22.4 22.4 22.4 22.4 22.4 22.4 22.4 22.4 22.4 Number of street lights 250 250 300 300 300 300 300 300 300 300 Number of traffic signals 4 4 4 4 4 4 4 4 4 4 Culture and recreation: Parks 3 3 3 3 3 3 3 3 3 3 Parks acreage 9 9 9 9 9 9 9 9 9 9 Community center -- -- -- -- -- 1 1 1 1 1 Swimming pools -- -- -- -- -- 1 1 1 1 1 Sources: Various Village Departments. VILLAGE OF KEY BISCAYNE, FLORIDA CAPITAL ASSET STATISTICS BY FUNCTION/PROGRAM LAST TEN FISCAL YEARS 68 COMPLIANCE SECTION 69 Independent Auditors’ Report 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, 2009, and have issued our report thereon dated April 21, 2010. We conducted our audit in accordance with auditing standards generally accepted in the United States of America 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 opinions on the financial statements, but not for the purpose of expressing an opinion on the effectiveness of the Village’s internal control over financial reporting. Accordingly, we do not express an opinion on the effectiveness of the Village’s internal control over financial reporting. A control deficiency exists when the design or operation of a control does not allow management or employees, in the normal course of performing their assigned functions, to prevent or detect misstatements on a timely basis. A significant deficiency is a control deficiency, or combination of control deficiencies, that adversely affects the Village’s ability to initiate, authorize, record, process, or report financial data reliably in accordance with generally accepted accounting principles such that there is more than a remote likelihood that a misstatement of the Village’s financial statements that is more than inconsequential will not be prevented or detected by the Village’s internal control. A material weakness is a significant deficiency, or combination of significant deficiencies, that results in more than a remote likelihood that a material misstatement of the financial statements will not be prevented or detected by the Village’s internal control. 70 Our consideration of internal control over financial reporting was for the limited purpose described in the first paragraph of this section and would not necessarily identify all deficiencies in internal control that might be significant deficiencies or material weaknesses. We did not identify any deficiencies in internal control over financial reporting that we consider to be material weaknesses, as defined above. Compliance and Other Matters As part of obtaining reasonable assurance about whether the Village of Key Biscayne’s financial statements are free of material misstatement, we performed tests of its compliance with certain provisions of laws, regulations, contracts and grant agreements, noncompliance with which could have a direct and material effect on the determination of financial statement amounts. However, providing an opinion on compliance with those provisions was not an objective of our audit and, accordingly, we do not express such an opinion. The results of our tests disclosed no instances of noncompliance or other matters that are required to be reported under Government Auditing Standards. 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 April 21, 2010 71 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, 2009, and have issued our report thereon dated April 21, 2010. We conducted our audit in accordance with auditing standards generally accepted in the United States of America; the standards applicable to financial audits contained in Government Auditing Standards, issued by the Comptroller General of the United States; and OMB Circular A-133, Audits of States, Local Governments, and Non-Profit Organizations. We have issued our Independent Auditors’ Report on Internal Control over Financial Reporting and on Compliance and Other Matters based on an audit of financial statements, Independent Auditor’s Report on Compliance With Requirements Applicable to Each Major Program and on Internal Control Over Compliance in Accordance With OMB Circular A-133 and Schedule of Findings and Questioned Costs. Disclosures in those reports and schedule, which are dated April 21, 2010, 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. 72  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, we did not have any such recommendations.  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, we did not have any such findings.  Section 10.554(1)(i)5., Rules of the Auditor General, provides that the auditor may, based on professional judgment, report the following matters that have an inconsequential effect on financial statements, considering both quantitative and qualitative factors: (1) violations of provisions of contracts or grant agreements, fraud, illegal acts, or abuse, and (2) control deficiencies that are not significant deficiencies. In connection with our audit, there were no 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, 2009, 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, 2009. 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. 73 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 of America 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 April 21, 2010 74 Independent Auditors’ Report on Compliance With Requirements Applicable to Each Major Program and on Internal Control over Compliance in Accordance With OMB Circular A-133 Honorable Mayor, Village Council and Village Manager Village of Key Biscayne, Florida Compliance We have audited the compliance of the Village of Key Biscayne, Florida (the Village) with the types of compliance requirements described in the U.S. Office of Management and Budget (OMB) Circular A-133 Compliance Supplement that are applicable to its major federal awards program for the fiscal year ended September 30, 2009. The Village’s major federal awards program is identified in the summary of auditor’s results section of the accompanying schedule of findings and questioned costs. Compliance with the requirements of laws, regulations, contracts and grants applicable to each of its major federal programs is the responsibility of the Village’s management. Our responsibility is to express an opinion on the Village’s compliance based on our audit. We conducted our audit of compliance in accordance with auditing standards generally accepted in the United States of America; the standards applicable to financial audits contained in Government Auditing Standards, issued by the Comptroller General of the United States; and OMB Circular A-133, Audits of States, Local Governments, and Non-Profit Organizations. Those standards and OMB Circular A-133 require that we plan and perform the audit to obtain reasonable assurance about whether noncompliance with the types of compliance requirements referred to above that could have direct and material effect on a major federal program occurred. An audit includes examining, on a test basis, evidence about the Village’s compliance with those requirements and performing such other procedures as we considered necessary in the circumstances. We believe that our audit provides a reasonable basis for our opinion. Our audit does not provide a legal determination on the Village’s compliance with those requirements. In our opinion, the Village complied, in all material aspects, with the requirements referred to above that are applicable to its major federal program for the fiscal year ended September 30, 2009. 75 Internal Control over Compliance The management of the Village is responsible for establishing and maintaining effective internal control over compliance with requirements of laws, regulations, contracts and grants applicable to federal programs. In planning and performing our audit, we considered the Village’s internal control over compliance with requirements that could have a direct and material effect on a major federal program in order to determine our auditing procedures for the purpose of expressing our opinion on compliance, but not for the purpose of expressing an opinion on the effectiveness of internal control over compliance. Accordingly, we do not express an opinion on the effectiveness of the Village’s internal control over compliance. A control deficiency in an entity’s internal control over compliance 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 noncompliance with a type of compliance requirement of a federal program on a timely basis. A significant deficiency is a control deficiency, or combination of control deficiencies, that adversely affects the entity’s ability to administer a federal program such that there is more than a remote likelihood that noncompliance with a type of compliance requirement of a federal program that is more than inconsequential will not be prevented or detected by the entity’s internal control. A material weakness is a significant deficiency, or combination of significant deficiencies, that results in more than a remote likelihood that material noncompliance with a type of compliance requirement of a federal program will not be prevented and detected by the Village’s internal control. Our consideration of internal control over compliance was for the limited purpose described in the first paragraph of this section and would not necessarily identify all deficiencies in the Village’s internal control that might be significant deficiencies or material weaknesses. We did not identify any deficiencies in internal control over compliance that we consider to be material weaknesses, as defined above. This report is intended solely for the information and use of the Mayor, Village Council, management, and specific legislative or regulatory bodies and federal awarding agencies and pass-through entities and is not intended to be and should not be used by anyone other than these specified parties. a division of Marcum LLP Miami, Florida April 21, 2010 Federal Pass-Through CFDA Entity Identifying Federal Federal Grantor/Pass-Through Grantor/Program Title Number Number Expenditures U.S. Department of Homeland Security Urban Area Security Initiative 97.067 N/A 36,519$ U.S. Environmental Protection Agency EPA Sewer Grant 66.202 XP-96461606 124,060 Pass-Through Program from: State of Florida Department of Environmental Protection - State Revolving Loan Fund 66.458 A ON 86 2,067,002 Total U.S. Environmental Protection Agency 2,191,062 U.S. Department of Justice Federal Equitable Sharing N/A N/A 38,323 Pass-Through Program from: State of Florida Department of Law Enforcement - Edward Byrne Memorial Justice Assistance 16.738 2009-JAGD-DADE- 10-T8-179 2,000 Total U.S. Department of Justice 40,323 Total Expenditures of Federal Awards 2,267,904$ VILLAGE OF KEY BISCAYNE, FLORIDA SCHEDULE OF EXPENDITURES OF FEDERAL AWARDS FISCAL YEAR ENDED SEPTEMBER 30, 2009 See note to schedule of expenditures of federal awards. 76 77 VILLAGE OF KEY BISCAYNE, FLORIDA NOTE TO THE SCHEDULE OF EXPENDITURES OF FEDERAL AWARDS FISCAL YEAR ENDED SEPTEMBER 30, 2009 NOTE 1 – BASIS OF PRESENTATION The accompanying schedule of expenditures of federal awards includes the federal grant activity of the Village of Key Biscayne and is presented on the accrual basis of accounting. The information in this schedule is presented in accordance with the requirements of OMB Circular A-133, Audits of States, Local Governments, and Non-Profit Organizations. Therefore, some amounts presented in this schedule may differ from amounts presented in, or used in the preparation of, the basic financial statements. 78 VILLAGE OF KEY BISCAYNE, FLORIDA SUMMARY SCHEDULE OF PRIOR AUDIT FINDINGS FISCAL YEAR ENDED SEPTEMBER 30, 2009 PRIOR YEAR FINANCIAL STATEMENT FINDINGS Matters that are not repeated in the accompanying Schedule of Findings and Questioned Costs  08-01 – Internal Controls over Accounting and Financial Reporting  08-02 – Report Filing and Federal and Florida Single Audit Identification PRIOR YEAR FEDERAL AWARDS FINDINGS AND QUESTIONED COSTS Matters that are not repeated in the accompanying Schedule of Findings and Questioned Costs  08-02 – Report Filing and Federal Single Audit Identification PRIOR YEAR STATE FINANCIAL ASSISTANCE FINDINGS AND QUESTIONED COSTS Matters that are not repeated in the accompanying Schedule of Findings and Questioned Costs  08-02 – Report Filing and Florida Single Audit Identification 79 VILLAGE OF KEY BISCAYNE, FLORIDA SCHEDULE OF FINDINGS AND QUESTIONED COSTS FISCAL YEAR ENDED SEPTEMBER 30, 2009 SECTION I - SUMMARY OF AUDITOR’S RESULTS Financial Statements Type of auditor’s report issued: Unqualified Opinion Internal control over financial reporting: Material weakness(es) identified? yes X no Significant deficiency(ies) identified not considered to be material weakness(es)? yes X none reported Noncompliance material to financial statements noted? yes X no Federal Awards Programs Internal control over major programs: Material weakness(es) identified? yes X no Significant deficiency(ies) identified not considered to be material weakness(es)? yes X none reported Type of auditor’s report issued on compliance for major programs: Unqualified Opinion Any audit findings disclosed that are required to be reported in accordance with Circular A-133, Section .510(a)? yes X no Identification of major programs: Federal Program CFDA No. State Revolving Loan Fund 66.458 Dollar threshold used to distinguish between Type A and Type B programs: $300,000 Auditee qualified as low-risk auditee for federal awards programs? yes X no 80 VILLAGE OF KEY BISCAYNE, FLORIDA SCHEDULE OF FINDINGS AND QUESTIONED COSTS FISCAL YEAR ENDED SEPTEMBER 30, 2009 SECTION II – FINANCIAL STATEMENT FINDINGS None. SECTION III – FEDERAL AWARD FINDINGS AND QUESTIONED COSTS None.