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HomeMy Public PortalAboutCAFR 2018.pdfVILLAGE OF KEY BISCAYNE, FLORIDA COMPREHENSIVE ANNUAL FINANCIAL REPORT FISCAL YEAR ENDED SEPTEMBER 30, 2018 VILLAGE OF KEY BISCAYNE, FLORIDA COMPREHENSIVE ANNUAL FINANCIAL REPORT FOR THE FISCAL YEAR ENDED SEPTEMBER 30, 2018 Prepared by: THE FINANCE DEPARTMENT VILLAGE OF KEY BISCAYNE, FLORIDA COMPREHENSIVE ANNUAL FINANCIAL REPORT FOR THE FISCAL YEAR ENDED SEPTEMBER 30, 2018 TABLE OF CONTENTS Introductory Section Letter of Transmittal i-iv Village Officials v Certificate of Achievement for Excellence in Financial Reporting vi Organization Chart vii Financial Section Independent Auditors' Report 1-3 Management's Discussion and Analysis (Required Supplementary Information) 4-13 Basic Financial Statements Government -Wide Financial Statements: Statement of Net Position 14 Statement of Activities 15 Fund Financial Statements: Governmental Fund Financial Statements: Balance Sheet 16 Statement of Revenues, Expenditures and Changes in Fund Balances 17 Reconciliation of the Statement of Revenues, Expenditures and Changes in Fund Balances of Governmental Funds to the Statement of Activities 18 Proprietary Fund Financial Statements: Statement of Net Position 19 Statement of Revenues, Expenses and Changes in Net Position 20 Statement of Cash Flows 21 Fiduciary Fund Financial Statements: Statement of Fiduciary Net Position 22 Statement of Changes in Fiduciary Net Position 23 Notes to Basic Financial Statements 24-69 Required Supplementary Information (Other Than MD&A) Budgetary Comparison Schedule — General Fund 70 Budgetary Comparison Schedule — Transportation Special Revenue Fund 71 Budgetary Comparison Schedule — PROS Land Trust Special Revenue Fund 72 Notes to Budgetary Comparison Schedule 73 Schedule of Changes in the Total OPEB Liability and Related Ratios — Other Post -Employment Benefits 74 Schedule of Changes in the Village's Net Pension Liability and Related Ratios — Pension Trust Fund 75 Schedule of Village Contributions — Pension Trust Fund 76 Schedule of Investment Returns — Pension Trust Fund 77 Government Auditing Standards VILLAGE OF KEY BISCAYNE, FLORIDA COMPREHENSIVE ANNUAL FINANCIAL REPORT FOR THE FISCAL YEAR ENDED SEPTEMBER 30, 2018 TABLE OF CONTENTS Schedule of Findings and Questioned Costs 105-106 Management Letter in Accordance with the Rules of the Auditor General of the State of Florida 107-108 Independent Accountants' Report on Compliance Pursuant to Section 218.415 Florida Statutes 109 INTRODUCTORY SECTION VILLAGE OF KEY BISCAYNE Village Council Michael W. Davey, Mayor Allison McCormick, Vice Mayor Luis Lauredo June 28, 2019 Edward London Brett Moss Katie Petros Ignacio J. Segurola To the Honorable Mayor, members of the Village Council and Citizens of the Village of Key Biscayne: Florida Statutes require that all units of local government publish 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 requirement, we hereby present the Comprehensive Annual Financial Report (CAFR) of the Village of Key Biscayne for the fiscal year ended September 30, 2018. 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 the Report. To provide 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 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, 2018, are free of material misstatement. i 88 West McIntyre Street • Suite 200 • Key Biscayne, Florida 33149 • (305) 365-5506 • Fax (305) 365-8914 MISSION STATEMENT:"TO PROVIDE A SAFE, QUALITY COMMUNITY ENVIRONMENT FOR ALL ISLANDERS THROUGH RESPONSIBLE GOVERNMENT." www.keybiscayne.fl.gov The independent audit involved 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; and evaluating the overall financial statement presentation. The independent auditor concluded, based upon the audit, that there was a reasonable basis for rendering an unmodified opinion that the Village of Key Biscayne's financial statements for the fiscal year ended September 30, 2018, are fairly presented in conformity with GAAP. The independent auditors' 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 the MD&A and should be read in conjunction with it. The Village of Key Biscayne' s MD&A can be found immediately following the independent auditors' report. Profile of the Government The Village of Key Biscayne, incorporated in 1991, is located on the southernmost 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 13,301. The Village of Key Biscayne receives tax levies on real and personal property located inside its boundaries. The Village of Key Biscayne operates under the council-manager form of government. Policymaking and legislative authority are vested in a governing council consisting of the mayor and six other council members. The Council is responsible for, among other things, passing ordinances and resolutions, adopting the annual budget, appointing the Village Manager, the Village Clerk, and the Village Attorney. The Village Manager is responsible for carrying out the policies and ordinances/resolutions 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; fire and emergency medical service; public works; a full service building, planning and zoning department; parks and recreation activities; solid waste collection; and a comprehensive storm water management system. Certain other services are provided through the Miami Dade County Public Schools and through Miami -Dade County. The County provides library, water and sewer, and public transportation, among other services. 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 30th, the close of the Village's fiscal year. The appropriated budget is prepared by fund ii and department. No department may legally expend in excess of the amount appropriated for that department within an individual fund. The Village manager may make transfers of appropriations within a department. Transfers of appropriations between departments or funds require the approval of the Village Council. The Village Council approves supplemental appropriations. Budget -to -actual comparisons are provided in this report for the general fund for which an appropriated annual budget has been adopted. The General Fund, budget -to -actual report, is presented in the required supplementary information section of this report. Local Economy The Village of Key Biscayne enjoys a favorable economic environment and local indicators point 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 shopping centers. There is no industrial area in the community. Expenditures/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 modified 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. Financial Policies The Village of Key Biscayne has policies on Debt Limitation, Emergency Reserve Funds, and Commitments and Assignments of surplus funds. The allocation of surplus funds between Committed and Assigned fund balance is made at the discretion of the Village Council. Other externally restricted funds are noted as Restricted. 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, 2017. This was the twenty-fifth consecutive year that the Village received this award. In order to be awarded a Certificate of Achievement, the government published a 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. iii 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 the departments who assisted and contributed to the preparation of this report. We would also like to express our appreciation to Marcum LLP, our independent auditors, for their assistance and effort in helping the Village prepare the CAFR. Appreciation is also extended to the Mayor and the Village Council for their unfailing support for maintaining the highest standards of professionalism in the management of the Village of Key Biscayne's finances. Respectfully submitted, Andrea Agha, Village Manager Christopher Wallace, Interim CFO iv VILLAGE OF KEY BISCAYNE, FLORIDA VILLAGE OFFICIALS As of SEPTEMBER 30, 2018 VILLAGE COUNCIL Michel W. Davey, Mayor Allison McCormick, Vice Mayor Edward London, Councilman Ignacio J. Segurola, Councilman Brett G. Moss, Councilman Kathleen Petros, Councilwoman Luis Lauredo, Councilman VILLAGE MANAGER Andrea Agha VILLAGE CLERK Jennifer Medina, CMC VILLAGE ATTORNEY Weiss Serota Helfnan Pastoriza Cole & Boniske, P.A. FINANCE DIRECTOR Christopher Wallace, Acting Finance Director INDEPENDENT AUDITORS Marcum LLP v G�9 Government Finance Officers Association Certificate of Achievement for Excellence in Financial Reporting Resented to Village of Key Biscayne n Florida For its Comprehensive Annual Financial. Report for the Fiscal Year Ended September tember 30. 2017 tievt4.," Executive Direct° CEO vi ORGANIZATION CHART 2018 VOTERS OF KEY BIS A YNE Village Council Village Clerk Special Master Village Manager Loco! Prann'ng Agency Village Attorney Chief of Staff/Deputy Clerk Police/fire Retirerrrent Board Department of Building, Zoning and Planning Building Zoning Planning Departments of Public Safety Code Enforcement Public Works Fire Rescue Police Department of Recreation !Special Events Sports 1 Athletics Programs Tours Senior Services Deparbnent of finance and Administrative Services finances' Acceuntin Personae ! Benefits Risk Mane ment vii FINANCIAL SECTION INDEPENDENT AUDITORS' REPORT Report on the Financial Statements Management’s Responsibility for the Financial Statements Auditors’ Responsibility Government Auditing Standards, Opinions Other Matters Required Supplementary Information Other Information Other Reporting Required by Government Auditing Standards Government Auditing Standards Government Auditing Standards MANAGEMENT'S DISCUSSION AND ANALYSIS (MD&A) statement of net position net position statement of activities regardless of the timing of related cash flows (governmental activities) (business- type activities). primary government fund Governmental funds governmental activities near-term inflows and outflows of spendable resources balances of spendable resources governmental activities governmental funds governmental activities essential not As demonstrated in Table A-1, Summary of Net Position, the Village's Net Position increased by $3,339,001. This resulted from reductions in long-term liabilities provided for with resources from the current year, which was offset by reductions in current assets, mostly restricted cash and investments. Capital Assets increased by $12.1 million in the Governmental Activities, but decreased by a similar amount, $12.8 million, in the Business -type activities. Most of this reflects closing out the Sanitary Sewer Construction proprietary fund to Governmental Activities. The difference of $576,731 reflects ordinary depreciation of existing Capital Assets. Unrestricted Net Position increased by $5.1 million, mostly from the retirement of debt through the use of resources provided currently by the various budgets of the Village. Table A - 2 Summary of Changes in Net Position Governmental Activities Business -type Activities Total 2018 2017 2018 2017 2018 2017 Revenues Programrevenues: Charges for services $ 5,015,541 $ 4,831,115 $ Operating grants and contributions 53,210 59,412 Capital grants and contributions 1,733,691 873,734 General revenues: Property taxes 24,992,663 24,202,255 Utility taxes 2,136,221 2,110,494 Communications services tax 734,422 698,927 Franchise fees 655,599 479,194 Unrestricted intergovernmental revenue 2,595,087 1,555,215 Investment income and miscellaneous 282,153 262,932 Total Revenues 38,198,587 35,073,278 Transfers 9,545,452 Total General Revenues, Contributions, and Transfers 47,744,039 35,073,278 Expenses General government Public Safety Parks and Recreation Public Works Building, Zoning and Planning Interest on long-term debt Stormwater Solid waste collection Sanitary sewer construction Total Expenses Change in Net Position before contribution and transfers Capital Contributions Transfers Changes in Net Position Net Position, Beginning, as previously reported Prior period adjustment Net Position, Beginning, restated Net Position - Ending 5,221,656 15,309,618 6,944,248 4,188,854 2,366,496 701,558 4,536,855 13,987,646 2,901,870 2,550,733 5,839,083 894,934 1,782,803 $ 1,585,027 $ 6,798,344 $ 6,416,142 53,210 59,412 1,733,691 873,734 - 24,992,663 - 2,136,221 - 734,422 - - 655,599 - 2,595,087 23,278 24,282 305,431 24,202,255 2,110,494 698,927 479,194 1,555,215 287,214 1,806,081 1,609,309 40,004,668 36,682,587 9,545,452 1,806,081 1,609,309 49,550,120 36,682,587 1,234,916 9,545,452 698,321 1,060,705 994,042 792044 5,221,656 15,309,618 6,944,248 4,188,854 2,366,496 701,558 1,234,916 9,545,452 698,321 4,536,855 13,987,646 2,901,870 2,550,733 5,839,083 894,934 1,060,705 994,042 792,044 34,732,430 30,711,121 11,478,689 2,846,791 46,211,119 33,557,912 3,466,157 4,362,157 (9,672,608) (1,237,482) (6,206,451) 3,124,675 -- - - 221,472 - 221,472 9,545,452 31,804 (31,804) 9,545,452 13,011,609 4,393,961 (9,672,608) (1,047,814) 3,339,001 3,346,147 79,107,352 74,713,391 12,864,405 13,912,219 91,971,757 88,625,610 610,991 - 610,991 79,718,343 74,713,391 - 197,331 92,582,748 88,625,610 $ 92,729,952 $ 79,107,352 $ 3,191,797 $ 12,864,405 $ 95,921,749 $ 91,971,757 7 Business -type Activities Business -type activities decreased the Village's net position by $9,672,608, mostly because of the elimination of the Sanitary Sewer Construction fund, which was terminated as of September 30, 2018, and the Net Position transferred to Governmental Activities. Stormwater Utility System fund Net Position decreased by approximately $270,000, mostly as a result of operational losses. The Solid Waste fund increased its Net Position by about $143,000, entirely due to an increase in Operating Income. The pie charts below illustrate the various sources of revenues and expenditures: Revenues by Source - Governmental Activities Operating Grants g, Capital _Investment Earnings, $78,443 , 0% Contributions, $59,412 , 0% _ _ _ Charges for Services, _ - — - $4,531,115 , 14% Intergovernmental, _ $1,555,215 ,5% UtilityTaxes, $2,110,494 , 5% Communications5ervicesTax, _ $598,927 , 2% Franchise Fees, $479 • Ad Va lorem Taxes • Franchise Fees • Utility Taxes • Intergovernmental • Operating Grants & Capital Contributions • Investment Earnings Expenses - Governmental Activities 3uilding,Zoning and Planning, $2,550,733, 8.31%_ Parks and Recreation, $5,839,083 , 19.01% Fire, $7,106;286,23.14%. General Government • Parks and Recreation • Public Works • Police • Fire Ad Valorem Taxes, $24,202,255 , 71.15% • Communications Services Tax • Charges for Services Interest on Long Term Debt, $894,934 , 2.91% General Government, ,_ $4,536,855 , 14.77% Public Works, $2,901,870 , 9.45% • Building, Zoning and Planning • Interest on Long Term Debt Police, $6,881,360, 22.41% 8 Revenues by Source - Business -Type Activities ■ Solid Waste Charges • Storrnwater Charges Expenses - Business -Type Activities ■ Solid Waste • Sanitary Sewer • stormwater 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 spendable resources. At the end of the current fiscal year, fund balance of the General Fund was $17,222,068, a decrease of $13,624,317. The decrease result almost entirely from the transfer out from the General Fund to the newly created Parks, Recreation, and Open Space special revenue fund the amount of $7,214,656. Prior amounts had been Committed fund balance. The Village transferred $9.5 million to cover expenditures in the Capital Projects fund. A prior assignment of fund balance for Capital Projects of $6.3 million was moved to cover the prior negative fund balance and a current amount for fiscal year 2019 of $3.2 million was transferred to cover the current year's expenditures. These changes were made to make the financial statements more transparent. The Village's Assigned and Committed General Fund balances, together with the PROS Land Trust fund balances can be used by the Village in case of an emergency. Together, these fund balances amount to $22,267,267, or roughly 65% of the fiscal year 2018 General Fund expenditures. This represents almost 8 months of General Fund operating expenditures. 9 A summary of the general fund's balance sheet and statement of revenues, expenditures and changes in fund balance is presented in Table B-1 and B-2 for September 30, 2018 and 2017, is as follows: Table B-1 Summary of General Fund Balance Sheet 2018 2017 Total Assets $ 26,351,391 $ 34,691,907 Total Liabilities $ 9,129,323 $ 3,845,522 Fund Balance Nonspendable 914,616 598,249 Restricted 1,254,841 1,950,591 Committed 4,090,000 12,034,340 Assigned 10,962,611 16,263,205 Total Fund Balance 17,222,068 30,846,385 Total Liabilities and Fund Balance $ 26,351,391 $ 34,691,907 Table B-2 Summary of General Fund Statement of Revenues, Expenditures and Changes in Fund Balances 2018 2017 Total Revenues $ 36,001,337 $ 33,978,319 Total Expenditures 34,021,256 30,751,184 Excess 1,980,081 3,227,135 Total Other Financing Sources (Uses) (15,604,398) (330,718) Change in Fund Balance $(13,624,317) $ 2,896,417 Overall, total General Fund revenues in fiscal year 2018 were $36,001,337, an increase of $2,023,018, or nearly 6% more. Expenditures totaled $34,021,256 for fiscal year 2018, also increasing by $3,270,072 over the fiscal year 2017 amount of $30,751,184. This was a 10.6% increase year -over -year. The Transportation Special Revenue Fund was established to account for the construction and future maintenance of the Village's roadways. 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. In 2018, the Transportation Fund shows a fund balance of $1,831,441, of which $823,271 is restricted for future transit projects. The Capital Improvement Fund historically receives an annual budgeted transfer of surplus funds from the General Fund to pay for capital improvements. Fiscal year 2017 had reflected a negative unassigned balance of $6,305,354 which was made up of various projects detailed in the annually adopted Capital Improvement Plan. Funding for the deficit had been part of the Working Capital fund balance assignment in the General Fund. During fiscal year 2018, this funding was transferred into the Capital Improvement Fund, together with $3,162,314 of current year expenditures. The fund ended with a zero fund balance. Likewise, the General Fund assignment for Working Capital was also reduced by identical amounts. Most projects customarily span a five-year period while others are revolving. Additional detail regarding these projects is described in the Capital Asset section on the following page. 10 General Fund Budgetary Highlights The General Fund had a favorable $1,980,081 budget to actual performance, representing additional revenues over expenditures, but before operating transfers out to other funds. Notable highlights were: Revenues Utility service and communication services tax were 7.11% higher because they appear to have been underbudgeted. Electric franchise fee revenue was not expected to be 38.02% greater because the prior year had extraordinary property tax offsets applied to reduce payments and that did not recur in fiscal year 2018; building permits were about 15% less than expected, but that revenue is volatile and accurate forecasts are difficult; intergovernmental revenue was 71.42% higher, largely because state shared revenues for police and fire pensions were not budgeted and also had "catch up" contributions not made in the prior year and miscellaneous revenues were 88.65% higher than expected because of sales of capital assets, donations, and settlement agreements. Expenditures General governmental expenditures were less than expected because of reduced lobbyist expenditures and not incurring expenditures for legal costs as a result of the boat show litigation. Police expenditures exceeded the original budget by 8.79% because the federal forfeiture, compensated absences, off -duty detail, and red light camera expenditures were not originally budgeted. Fire and police pension costs likewise were underbudgeted, but were, in large part, offset by the additional intergovernmental revenue noted above. Public Works expenditures generally had savings, but were overbudget otherwise because of Hurricane Irma expenditures, which should be largely paid back by FEMA during fiscal year 2020. Parks and recreation programming reductions saw a savings of about 24% while debt service was overbudgeted, owing to the timing of the payments ultimately made. Capital Assets As of September 30, 2018, the Village's capital assets, net of accumulated depreciation, amounted to $100,872,483, compared to $101,449,214 for the prior year. Major capital asset events during the fiscal year included the following: • 530 Crandon Boulevard improvements • Police software and CAD system • Fire Station improvements • Powerline undergrounding • Village Green improvements • Play field improvements • Computer lab Additional information on the Village's capital assets can be found in Note 7 on pages 44-45 of this report. Debt Administration At September 30, 2018, the Village had bonded debt outstanding of $31,180,008 (composed of $25,883,654 in governmental activities and $5,296,354 of business -type activities) compared to $30,339,000 as of September 30, 2017. Additional information on the Village's long-term debt can be found in Note 8 on pages 46-56 of this report. Economic Factors and Risks The Village of Key Biscayne is located on the island of Key Biscayne and is just east of the City of Miami. Because of its low elevation, it is a greater risk of storm surge from hurricanes and also for rising ocean levels. 11 The Village's median age is 44.5 years. The median household income is $119,920 and the median home value is $1,106,760. The median net worth is $323,852. The average renter's expense is $5,791 monthly and the average homeowner's monthly expense is $19,519. Nearly three -fourths of the households have college degrees and 90% of all households have some college. Seventy-seven percent of the households typically have established wealth, are well-educated and well -traveled, almost always own their own home, are married with children ranging from grade school to college. They expect quality and invest in time- saving services. They actively participate in the community and are active in sports. They tend to be enthusiastic travelers. The remaining twenty-three percent of households is characterized as prosperous married couples that are ambitious and hard-working, with 70% of them owning their own homes. They tend to be more diverse and are financially responsible. They appreciate both quality and bargains. They are active in fitness pursuits.1 The Village has 5,072 workers, with about 76% of them driving alone to work. The typical travel time to work ranging from 20-35 minutes. Most workers who live in the Village work elsewhere. Ninety-two percent of the workers are white collar and the unemployment rate is 2.4%. Ninety-six percent of the population is white and nearly 70% is of Hispanic origin. The demographics of the Village will not likely change over the next five years. The businesses that exist on the island are generally supportive retail operations or those related to tourism. The Village is not dependent upon tourism for its financial health. The Village's millage rate for fiscal year 2018 and fiscal year 2019 is 3.00 and 3.10, respectively. Undiversified Tax Base and limits on homestead property growth. The Village's tax base is roughly 95% residential and 5% commercial. This makes the Village exposed to movements in the residential property markets. Further, Florida's Constitution restricts residential homestead assessment growth to 3% per year, or less, on each home that has a homestead exemption. Commercial properties are limited to a maximum 10% annual increase on their assessment and they are not generally provided any exemptions from assessment. The Village is overwhelmingly residential in nature, but is fortunate to have a number of residential units that are not subject to this annual limitation. Further, the value of the homes that are subject to the annual assessment cap is substantial. However, the Village may be exposed to changes in the manner with which annual assessments are valued or the limit to which they may be taxed, or additional homestead exemptions granted by the Legislature. Labor Agreements. The Village's bargaining groups continue to request improvements to pay, benefits, and working conditions. Given the increasing cost of personnel, coupled with moderately increasing revenues, the Village will continue to face a structural budget issue whereas the pace of expenses exceeds revenues. During the year, the Village agreed to substantial changes in police and fire pension benefits that will impact future contributions. Reliance upon Intergovernmental Revenue. The Village received $2.3 million in revenue from other governments during fiscal year 2018, or about 6% of General Fund total revenues. Since the Village does not directly control the assessment or collection of these revenues, it is exposed to the risk that those revenues will not grow or even be available in future years. The loss of these revenues would likely require the Village to raise more money through higher local taxing efforts. The Village has the capacity to raise its tax rates to more than offset the loss of these other governmental revenues. Environmental Risks. The Village is located on an island between Biscayne Bay and the Atlantic Ocean and is exposed to significant risks caused by weather, particularly hurricanes. In addition to the potential damage to structures and infrastructure, substantial loss of beach can occur during hurricanes, hurting 'Esri Tapestry Segmentation, 2018, LifeMode Groups. 12 tourism and reducing property values. The Village is concerned with rising sea levels. Sea levels are increasing and we are concerned about the impact to our island. Mitigating the impact to sea level rise could have a considerable financial impact on the Village and its property owners. Additionally, demand for property that would be adversely affected by rising sea levels may be reduced, affecting the Village's tax base. The Village is evaluating various resiliency efforts, including undergrounding of utilities and improvements to stormwater systems. The cost of these improvements will be tens of millions of dollars but the Village believes they will be affordable to the property owners over time. 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. 13 BASIC FINANCIAL STATEMENTS The accompanying notes are an integral part of these financial statements. The accompanying notes are an integral part of these financial statements. The accompanying notes are an integral part of these financial statements. The accompanying notes are an integral part of these financial statements. The accompanying notes are an integral part of these financial statements. The accompanying notes are an integral part of these financial statements. The accompanying notes are an integral part of these financial statements. The accompanying notes are an integral part of these financial statements. The accompanying notes are an integral part of these financial statements. The accompanying notes are an integral part of these financial statements. NOTES TO BASIC FINANCIAL STATEMENTS A. FINANCIAL REPORTING ENTITY The Financial Reporting Entity B. GOVERNMENT-WIDE AND FUND FINANCIAL STATEMENTS B. GOVERNMENT-WIDE AND FUND FINANCIAL STATEMENTS (CONTINUED) Governmental activities, business-type activities, Direct expenses Program revenues general revenues. C. MEASUREMENT FOCUS,BASIS OF ACCOUNTING, AND FINANCIAL STATEMENT PRESENTATION economic resources measurement focus accrual basis of accounting current financial resources measurement focus modified accrual basis of accounting available C. MEASUREMENT FOCUS,BASIS OF ACCOUNTING, AND FINANCIAL STATEMENT PRESENTATION (CONTINUED) General Fund Sanitary Sewer Construction Fund Transportation Special Revenue Fund Parks and Recreational Open Space (PROS) Land Trust Special Revenue Fund Capital Improvement Fund Stormwater Utility System Fund Solid Waste Fund C. MEASUREMENT FOCUS,BASIS OF ACCOUNTING, AND FINANCIAL STATEMENT PRESENTATION (CONTINUED) Pension Trust Fund program revenues general revenues operating nonoperating D. IMPLEMENTATION OF GOVERNMENTAL ACCOUNTING STANDARDS BOARD STATEMENTS Accounting and Financial Reporting for Postemployment Benefit Plans Other Than Pensions Accounting and Financial Reporting by Employers for Postemployment Benefits Other Than Pensions (OPEB) OPEB Measurements by Agent Employers and Agent Multiple Employer Plans D. IMPLEMENTATION OF GOVERNMENTAL ACCOUNTING STANDARDS BOARD STATEMENTS (CONTINUED) Irrevocable Split-Interest Agreements Omnibus 2017 Certain Debt Extinguishment Issues E. ASSETS, LIABILITIES, DEFERRED OUTFLOWS/INFLOWS OF RESOURCES AND NET POSITION OR EQUITY 1. Deposits and Investments E. ASSETS, LIABILITIES, DEFERRED OUTFLOWS/INFLOWS OF RESOURCES AND NET POSITION OR EQUITY 2. Interfund Receivables and Payables 3. Receivables 4. Capital Assets E. ASSETS, LIABILITIES, DEFERRED OUTFLOWS/INFLOWS OF RESOURCES AND NET POSITION OR EQUITY (CONTINUED) 4. Capital Assets (continued) 5. Unearned/Unavailable Revenue E. ASSETS, LIABILITIES, DEFERRED OUTFLOWS/INFLOWS OF RESOURCES, AND NET POSITION OR EQUITY (CONTINUED) 6. Compensated Absences 7. Long-Term Obligations 8. Deferred Outflows/Inflows of Resources E. ASSETS, LIABILITIES, DEFERRED OUTFLOWS/INFLOWS OF RESOURCES, AND NET POSITION OR EQUITY (CONTINUED) 8. Deferred Outflows/Inflows of Resources (continued) 9. Fund Equity Nonspendable fund balance. Restricted fund balance E. ASSETS, LIABILITIES, DEFERRED OUTFLOWS/INFLOWS OF RESOURCES, AND NET POSITION OR EQUITY (CONTINUED) 9. Fund Equity (continued) Committed fund balance Assigned fund balance Unassigned fund balance 10. Net Position E. ASSETS, LIABILITIES, DEFERRED OUTFLOWS/INFLOWS OF RESOURCES, AND NET POSITION OR EQUITY (CONTINUED) 10. Net Position (continued) 11. Use of Estimates 12. Flow Assumptions Net Position Flow Assumption Fund Balance Flow Assumption DEPOSITS Florida Security for Public Deposits Act INVESTMENTS INVESTMENTS –VILLAGE Interest Rate Risk Credit Risk INVESTMENTS –VILLAGE (CONTINUED) Custodial Credit Risk INVESTMENTS –PENSION PLAN INVESTMENTS –PENSION PLAN Interest Rate Risk Credit Risk Concentration of Credit Risk RISKS AND UNCERTAINTIES FAIR VALUE HIERARCHY FAIR VALUE HIERARCHY (CONTINUED) FAIR VALUE HIERARCHY (CONTINUED) General Limited Partnership - Mid Cap Growth. The Portfolio invests in a combination of securities of small-cap, mid-cap and large-cap companies. The Portfolio typically invests most of its assets in equity securities of U.S. companies, but may invest in foreign securities and American Depositary Receipts, including emerging market securities. Master Limited Partnership. The Fund invests primarily in master limited partnerships as well as domestic common stocks or similar equity securities of high quality, financially secure companies listed on principal exchanges. Real Estate Open-End Fund. The Fund is an open-end, commingled real estate fund established as a means for the collective investment in real estate properties and loans by funds of retirement, pension, profit sharing, and other organizations that are exempt from federal income taxes. VILLAGE OF KEY BISCAYNE, FLORIDA NOTES TO BASIC FINANCIAL STATEMENTS FOR THE FISCAL YEAR ENDED SEPTEMBER 30, 2018 NOTE 4 — RECEIVABLES Receivables as of September 30, 2018 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: Transportation PROS Land Special Trust Special Storm- Solid Pension General Revenue Revenue water Waste Trust Fund Total Customers billed $ -- $ -- $ -- $ 257,725 $ 455,914 $ $ 713,639 Contributions -- -- -- -- -- 510,216 510,216 Intergovernmental 1,260,792 215,805 828,000 2,304,597 Other -- -- -- 1,825,550 1,825,550 Gross receivables 1,260,792 215,805 828,000 257,725 455,914 2,335,766 5,354,002 Less: Allowance for uncollectibles (45,591) (45,591) Net Total Receivables $ 1,260,792 $ 215,805 $ 828,000 $ 257,725 $ 410,323 $ 2,335,766 $ 5,308,411 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 fiscal year ended September 30, 2018 was 3.00. 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, 2018, there were no material delinquent taxes. 42 VILLAGE OF KEY BISCAYNE, FLORIDA NOTES TO BASIC FINANCIAL STATEMENTS FOR THE FISCAL YEAR ENDED SEPTEMBER 30, 2018 NOTE 6 — INTERFUND RECEIVABLES, PAYABLES AND TRANSFERS The composition of interfund balances as of September 30, 2018 is as follows: Receivable Fund Payable Fund General Transportation PROS Land Trust Capital Improvements Total Capital General Improvements Stormwater $ $ 1,047,593 $ 1,468,081 20,081 5,907,266 863,179 Solid Waste $ 448,833 Total $ 2,964,507 20,081 5,907,266 863,179 $ 6,790,526 $ 1,047,593 $ 1,468,081 $ 448,833 $ 9.755,033 The outstanding balances between funds result mainly from the time lag between the dates that (1) interfund goods and services are provided or reimbursable expenditures occur, (2) transactions are recorded in the accounting system, and (3) payments between funds are made. Interfund transfers: Transfers Out General Fund General Fund Transfer In Capital Improvements PROS Land Trust Fund Amount $ 9,467,668 6,136,730 $ 15,604,398 Transfers are used to move unrestricted general fund revenues to finance various capital projects in accordance with budgetary authorizations. The transfer from the general fund to the PROS land trust fund represents a transfer of the prior year balance that was reported as committed for the open space land trust to the new fund opened for the purpose of acquiring parks and recreational lands. 43 VILLAGE OF KEY BISCAYNE, FLORIDA NOTES TO BASIC FINANCIAL STATEMENTS FOR THE FISCAL YEAR ENDED SEPTEMBER 30, 2018 NOTE 7 — CAPITAL ASSETS Capital asset activity for the year fiscal ended September 30, 2018 was as follows: Beginning Increases and Decreases and Ending Balance Transfers Transfers Balance Governmental Activities Capital Assets, Not Being Depreciated Land $ 23,941,979 $ -- $ -- $ 23,941,979 Construction in progress 11,261,263 1,463,692 (54,044) 12,670,911 Total Capital Assets, Not Being Depreciated 35,203,242 1,463,692 (54,044) 36,612,890 Capital Assets, Being Depreciated Buildings Improvements other than buildings Furniture, fixtures and equipment Sanitary Sewer system Total Capital Assets, Being Depreciated 25,701,930 36,194,988 12,986,008 433,958 546,674 833,273 18,808,259 26,135,888 36,741,662 (293,467) 13,525,814 18,808,259 74,882,926 20,622,164 (293,467) 95,211,623 Less: Accumulated Depreciation for Buildings (7,452,660) (528,222) (7,980,882) Improvements other than buildings (11,796,421) (1,485,307) -- (13,281,728) Furniture, fixtures and equipment (9,421,052) (944,157) 290,339 (10,074,870) Sanitary Sewer system (6,929,359) (6,929,359) Total Accumulated Depreciation (28,670,133) (9,887,045) 290,339 (38,266,839) Total Capital Assets, Being Depreciated, Net 46,212,793 10,735,119 (3,128) 56,944,784 Governmental Activities Capital Assets, Net Business -type Activities Capital Assets, Not Being Depreciated Construction in progress Total Capital Assets, Not Being Depreciated Capital Assets, Being Depreciated Stormwater utility system Sanitary Sewer system Total Capital Assets, Being Depreciated $ 81,416,035 $ 12,198.811 $ (57,172) $ 93,557,674 $ 695,770 $ 323,179 $ -- $ 1,018,949 695,770 323,179 12,313,943 18,808,259 1,018,949 159,504 12,473,447 (18,808,259) 31,122,202 159,504 (18,808,259) 12,473,447 Less: Accumulated Depreciation for Stormwater utility system (5,845,342) (332,245) (6,177,587) Sanitary Sewer system (5,939,451) 5,939,451 Total Accumulated Depreciation (11,784,793) (332,245) 5,939,451 (6,177,587) Total Capital Assets, Being Depreciated, Net 19,337,409 (172,741) (12,868,808) 6,295,860 Business -type Activities Capital Assets, Net $ 20.033,179 $ 150,438 $ (12,868,808) $ 7,314,809 44 VILLAGE OF KEY BISCAYNE, FLORIDA NOTES TO BASIC FINANCIAL STATEMENTS FOR THE FISCAL YEAR ENDED SEPTEMBER 30, 2018 NOTE 7 — CAPITAL ASSETS (CONTINUED) Effective October 1, 2017, the Village closed the Sanitary Sewer system fund. As a result, the fund transferred capital assets being depreciated with a cost basis of $18,808,259 and related accumulated depreciation of $5,939,451 to the Village's Governmental Activities. Depreciation expense was charged as functions/programs of the primary government as follows: Governmental Activities General government $ 1,122,163 Police 343,331 Fire 359,305 Public works 1,210,267 Building, zoning and planning 29,560 Parks and recreation 882,968 Total Depreciation Expense - Governmental Activities $ 3,947,594 Business -type Activities Stormwater $ 332,245 Total Depreciation Expense - Business -Type Activities $ 332,245 45 VILLAGE OF KEY BISCAYNE, FLORIDA NOTES TO BASIC FINANCIAL STATEMENTS FOR THE FISCAL YEAR ENDED SEPTEMBER 30, 2018 NOTE 8 — LONG-TERM DEBT The following is a summary of changes in long-term liabilities of the Village for governmental activities for the fiscal year ended September 30, 2018: Beginning Additions Ending Due Within Balance and Transfers Reductions Balance One Year Governmental Activities Bonds Payable Land acquisition and capital improvement revenue bonds, Series 1999 $ 2,330,000 $ -- $ (740,000) $ 1,590,000 $ 775,000 Capital improvement revenue refunding bonds, Series 2011A 2,970,000 (715,000) 2,255,000 735,000 Capital improvement revenue refunding bonds, Series 2011B 3,595,000 (650,000) 2,945,000 665,000 Capital improvement and land acquisition revenue refunding bonds, Series 2011 940,000 (170,000) 770,000 170,000 Transportation tax revenue refunding bonds, Series 2011 1,696,876 (150,698) 1,546,178 205,221 Road improvement revenue bonds, Series 2006 1,382,472 (298,726) 1,083,746 311,930 School improvement revenue bonds, Series 2012 4,751,889 4,751,889 281,633 School improvement revenue bonds, Series 2014 4,065,000 (535,000) 3,530,000 Sewer improvement revenue bonds, Series 2016 3,167,923 (225,856) 2,942,067 230,327 Revolving loan, 1996 143,484 (24,617) 118,867 25,252 Total Bonds Payable 21,731,237 3,311,407 (3,509,897) 21,532,747 3,399,363 Other Liabilities Capital leases Compensated absences Total Other Liabilities Governmental Activities Long - Term Liabilities 1,970,887 2,684,470 1,574,650 (531,778) (1,347,322) 1,439,109 2,911,798 472,530 727,949 4,655,357 1,574,650 (1,879,100) 4,350,907 1,200,479 $ 26386,594 $ 4,886,057 $ (5,388,997) $ 25,883,654 $ 4.599,842 Long-term obligations related to governmental activities, including pension and OPEB, are generally liquidated from the general fund. 46 LAND ACQUISITION AND CAPITAL IMPROVEMENT REVENUE BONDS,SERIES 1999 CAPITAL IMPROVEMENT REVENUE REFUNDING BONDS, SERIES 2011A CAPITAL IMPROVEMENTS REVENUE REFUNDING BONDS, SERIES 2011B CAPITAL IMPROVEMENT AND LAND ACQUISITION REVENUE REFUNDING BONDS, SERIES 2011 CAPITAL IMPROVEMENT AND LAND ACQUISITION REVENUE REFUNDING BONDS, SERIES 2011(CONTINUED) TRANSPORTATION TAX REVENUE REFUNDING BONDS,SERIES 2011 ROAD IMPROVEMENT REVENUE BONDS,SERIES 2006 SCHOOL IMPROVEMENT REVENUE BONDS,SERIES 2012 SCHOOL IMPROVEMENT REVENUE BONDS,SERIES 2012(CONTINUED) SCHOOL IMPROVEMENT REVENUE BONDS,SERIES 2014 SCHOOL IMPROVEMENT REVENUE BONDS,SERIES 2014(CONTINUED) * SEWER IMPROVEMENT REVENUE BONDS,SERIES 2016 SCHOOL IMPROVEMENT REVENUE BONDS,SERIES 2016(CONTINUED) STATE REVOLVING FUND LOAN,1996 CAPITAL LEASES STORMWATER UTILITY REFUNDING AND IMPROVEMENT REVENUE BONDS,SERIES 2016 VILLAGE OF KEY BISCAYNE, FLORIDA NOTES TO BASIC FINANCIAL STATEMENTS FOR THE FISCAL YEAR ENDED SEPTEMBER 30, 2018 NOTE 8 — LONG-TERM DEBT (CONTINUED) Debt service requirements to maturity are as follows: Principal Fiscal Year Ending September 30 2019 2020 2021 2022 2023 2024-2028 2029-2031 NOTE 9 — FUND BALANCE CLASSIFICATIONS Interest Total $ 354,619 362,952 371,482 380,212 389,147 2,087,282 1,350,660 $ 120,842 $ 475,461 112,410 475,362 103,780 475,262 94,948 475,160 85,908 475,055 286,329 2,373,611 48,927 1,399,587 $ 5,296,354 $ 853,144 $ 6,149,498 As of September 30, 2018, fund balances in the governmental funds have been set aside for the following purposes. The Village, by its charter, cannot have any unassigned fund balance, therefore, many of the committed and assigned balances are established to fund current operations, such as working capital. Nonspendable Prepaid items Restricted Building inspections Fire code violations Fire grant revenue (UASI) Law enforcement seizures Committed Emergencies Labor negotiations Subtotal (Forward) $ 914,616 575,880 331,238 45,689 302,034 1,254,841 4,000,000 90,000 4,090,000 $ 6,259,457 56 VILLAGE OF KEY BISCAYNE, FLORIDA NOTES TO BASIC FINANCIAL STATEMENTS FOR THE FISCAL YEAR ENDED SEPTEMBER 30, 2018 NOTE 9 — FUND BALANCE CLASSIFICATIONS (CONTINUED) Subtotal (Forward) $ 6,259,457 Assigned Compensated absences 727,949 Fire rescue transport fees 1,995,851 Working capital (surplus) 8,238,811 10,962,611 Total Fund Balance - General Fund $ 17,222,068 Restricted Transportation surtax Assigned $ 823,271 1,008,170 Total Fund Balance - Transportation Special Revenue $ 1,831.441 Committed Open space land trust Total Fund Balance - PROS Land Trust NOTE 10 — DEFINED CONTRIBUTION PLANS $ 7,214,656 $ 7,214,656 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 the first Plan, which is available to general employees, the Village contributes 12% and the employees contribute 6%. Under the second Plan, which is available only to the Village Manager, the Village contributes 12% and Village Manager contributions are not required. Under the third plan, which is available only to sworn or certified police officers and firefighters, there are currently no employee or employer contributions. Original participants still have vested funds deposited in the third Plan. Total employer contributions into the general employees and the Village Manager's plan were approximately $26,000 and $26,000 for the year ended September 30, 2018 and 2017, respectively. Amendments to the Plans must be authorized by the Village Council. 57 PLAN DESCRIPTION PLAN DESCRIPTION (CONTINUED) FUNDING POLICY FUNDING POLICY (CONTINUED) SHARE PLAN DROPPLAN VILLAGE OF KEY BISCAYNE, FLORIDA NOTES TO BASIC FINANCIAL STATEMENTS FOR THE FISCAL YEAR ENDED SEPTEMBER 30, 2018 NOTE 12 —NET PENSION LIABILITY OF THE VILLAGE As of September 30, 2018, the Village reported a net pension liability (NPL) of $1,652,935, which was measured as of September 30, 2017 (GASB 68 measurement date). In accordance with GASB 67, information related to the PERS as of September 30, 2018 has also been disclosed. 2018 2017 Total pension liability $ 44,714,321 $ 38,994,690 Plan fiduciary net position (a) (41,703,184) (37,341,755) Net pension liability $ 3,011,137 $ 1,652,935 Plan fiduciary net position as a percentage of total pension liability 93.27% 95.76% (a) The 2018 plan fiduciary net position disclosed above does not agree to the pension trust statement of fiduciary net position due to the timing of recognition of the deferred inflow of resources reported in prior year for actuarial purposes in the amount of $295,305. Changes in the Village's net pension liability for the fiscal year ended September 30, 2018 is as follows: Beginning Balances Changes for the Year: Service cost Interest Differences between actual and expected experience Assumption changes Benefit payments Refunds Contributions - employer (from Village) Contributions - employer (from State) Contributions - employee (including buyback contributions) Net investment income Administrative expense Net Changes Police Officers and Firefighters Total Pension Liability $ 35,667,966 982,149 2,815,914 17,729 608,244 (1,060,547) (36,765) 3,326,724 Plan Net Fiduciary Pension Net Position Liability $ 32,871,931 $ 2,796,035 982,149 2,815,914 17,729 608,244 (1,060,547) -- (36,765) 937,715 (937,715) 599,086 (599,086) 4,090,514 (4,090,514) (60,179) 60,179 4,469,824 (1,143,100) Ending Balances $ 38,994,690 $ 37,341,755 $ 1,652,935 61 SIGNIFICANT ACTUARIAL ASSUMPTIONS LONG-TERM EXPECTED RATE OF RETURN LONG-TERM EXPECTED RATE OF RETURN (CONTINUED) RATE OF RETURN DISCOUNT RATE SENSITIVITY OF THE NET PENSION LIABILITY TO CHANGES IN THE DISCOUNT RATE PENSION EXPENSE AND DEFERRED OUTFLOWS OF RESOURCES AND DEFERRED INFLOWS OF RESOURCES RELATED TO PENSIONS PENSION EXPENSE AND DEFERRED OUTFLOWS OF RESOURCES AND DEFERRED INFLOWS OF RESOURCES RELATED TO PENSIONS (CONTINUED) PLAN DESCRIPTION ACTUARIAL METHODS AND ASSUMPTIONS TOTAL OPEB LIABILITY AND CHANGES IN TOTAL OPEB LIABILITY TOTAL OPEB LIABILITY AND CHANGES IN TOTAL OPEB LIABILITY (CONTINUED) SENSITIVITY OF TOTAL OPEB LIABILITY TO CHANGES IN THE DISCOUNT RATE OR HEALTHCARE COST TREND RATE OPEB EXPENSE AND DEFERRED INFLOWS/OUTFLOWS OF RESOURCES RELATED TO OPEB LITIGATION GRANTS CONTINGENCY Accounting and Financial Reporting for Post-employment Benefits Other Than Pensions REQUIRED SUPPLEMENTARY INFORMATION See notes to budgetary comparison schedule. See notes to budgetary comparison schedule. See notes to budgetary comparison schedule. VILLAGE OF KEY BISCAYNE, FLORIDA REQUIRED SUPPLEMENTARY INFORMATION NOTES TO BUDGETARY COMPARISON SCHEDULE FOR THE FISCAL YEAR ENDED SEPTEMBER 30, 2018 NOTE 1— BUDGETS AND BUDGETARY ACCOUNTING An annual appropriated budget is prepared for the General Fund. The Village prepares a budget for its capital projects fund; however, this budget is prepared as a project budget and not as annually appropriated budget. The Village follows these procedures in establishing the budgetary data reflected in the financial statements: (a) The Village Manager submits to 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. Public hearings are conducted to obtain taxpayer comments. (b) Prior to October 1, the budget is legally enacted through passage of an ordinance. (c) 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, 2018, there were supplemental appropriations of $1,915,466. (d) Formal budgetary integration is employed as a management control device for the General Fund. (e) The budget for the general fund, the Transportation and PROS Land Trust special revenue funds are adopted on a basis consistent with generally accepted accounting principles (GAAP), except for certain unbudgeted expenditures of prior year reserves. (f) The Village Manager is authorized to transfer part or all of an encumbered appropriation balance within departments within a fund; however, any revisions that alter the total appropriations of any department or fund must be approved by the Village Council. The classification detail at which expenditures may not legally exceed appropriations is at the department level. 73 This schedule is presented as required by accounting principles generally accepted in the United States of America, however, until a full 10-year trend is compiled, information is presented for those years available. This schedule is presented as required by accounting principles generally accepted in the United States of America, however, until a full 10-year trend is compiled, information is presented for those years available. This schedule is presented as required by accounting principles generally accepted in the United States of America, however, until a full 10-year trend is compiled, information is presented for those years available. This schedule is presented as required by accounting principles generally accepted in the United States of America, however, until a full 10-year trend is compiled, information is presented for those years available. STATISTICAL SECTION 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: These schedules contain information to help the reader assess the Village's most significant local revenue source, the property tax. 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. These schedules offer demographic and economic indicators to help the reader understand the environment within which the Village's financial activities take place. 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. Sources: Unless otherwise noted, the information in these schedules is derived from the comprehensive annual financial reports for the relevant year. VILLAGE OF KEY BISCAYNE, FLORIDA NET POSITION BY COMPONENT LAST TEN FISCAL YEARS (ACCRUAL BASIS OF ACCOUNTING) 2009 2010 2011 2012 2013 2014 2015 2016 2017 2018 Governmental activities Net investment in capital assets $ 38,482,243 $ 41,377,118 $ 43,428,433 $ 44,373,229 $ 43,714,666 $ 51,426,773 $ 54,854,783 $ 51,961,356 $ 62,100,873 $ 70,944,473 Restricted 308,813 -- 1,170,247 500,137 3,138,445 3,455,654 2,405,158 3,425,433 2,665,724 2,078,112 Unrestricted 15,055,000 16,540,883 16,491,371 19,598,291 16,968,354 6,195,833 14,490,922 19,326,602 14,340,755 19,707,367 Total governmental activities net position 53,846,056 57,918,001 61,090,051 64,471,657 63,821,465 61,078,260 71,750,863 74,713,391 79,107,352 92,729,952 Business -type activities Net investment in capital assets 15,383,765 16,680,711 16,970,470 16,462,270 15,884,955 13,788,293 12,995,027 13,260,222 13,463,710 4,080,025 Unrestricted (346,721) 1,116,111 1,133,034 706,195 439,166 1,477,416 719,861 651,997 (599,305) (888,228) Total business -type activities net position 15,037,044 17,796,822 18,103,504 17,168,465 16,324,121 15,265,709 13,714,888 13,912,219 12,864,405 3,191,797 Total government Net investment in capital assets 53,866,008 58,057,829 60,398,903 60,835,499 59,599,621 65,215,066 67,849,810 65,221,578 75,564,583 75,024,498 Restricted 308,813 1,170,247 500,137 3,138,445 3,455,654 2,405,158 3,425,433 2,665,724 2,078,112 Unrestricted 14,708,279 17,656,994 17,624,405 20,304,486 17,407,520 7,673,249 15,210,783 19,978,599 13,741,450 18,819,139 Total Government Net Position $ 68,883,100 S 75,714,823 S 79,193,555 $ 81,640,122 S 80.145,586 S 76,343,969 $ 85,465 751 S 88.625,610 S 91 971,757 $ 95,921,749 79 VILLAGE OF KEY BISCAYNE, FLORIDA CHANGES IN NET POSITION LAST TEN FISCAL YEARS (ACCRUAL BASIS OF ACCOUNTING) 2009 2010 2011 2012 2013 2014 2015 2016 2017 2018 Expenses Governmental activities: General government $ 2,868,728 $ 2,751,697 $ 2,830,412 $ 3,379,954 $ 9,344,606 $ 8,526,705 $ 4,100,859 $ 7,579,355 $ 4,536,855 $ 6,211,564 Police 5,258,243 5,360,548 6,853,329 5,818,890 6,065 025 6,362,729 4,103,543 6,240,840 6,881,360 7,681,000 Fire 6,523,753 6,762,228 5,685,278 7,299,320 7,024,661 7,823,159 5,345,543 7,149,458 7,106,286 7,628,618 Public works 1,914,119 1,614,443 1,719,526 1,736,803 2,221,905 1,798,163 1,823,897 2,078,721 2,901,870 4,188,854 Building, zoning and planning 1,540,507 1,611,119 1,714,303 1,808,574 2,306,446 2,153,954 2,075,416 2,165,717 2,550,733 2,366,496 Parks and recreation 4,090,555 4,134,830 4,232,147 4,201,578 4,175,408 4,623,868 4,850,623 5,388,588 5,839,083 5,954,340 Interest on long-term debt 1,447,387 1,366,437 1,217,874 843,965 935,242 962,167 816,313 796,152 894,934 701,558 Total governmental activities 23,643,292 23,601,302 24,252,869 25,089,084 32,073,293 32,250,745 23,116,194 31,398,831 30,711,121 34,732,430 Business -type activities: Stormwater 779,856 603,262 815,402 689,287 715,836 1,109,510 1,783,865 934,223 1,060,705 1,234,916 Sanitary sewer 144,922 39,178 197,474 1,234,279 1,133,209 1,126,907 1,120,166 1,137,592 994,042 9,545,452 Solid waste 618,155 585,927 546,534 563,995 574,686 583,083 582,943 840,730 792,044 698,321 Total business -type activities 1,542,933 1,228,367 1,559,410 2,487,561 2,423,731 2,819,500 3,486,974 2,912,545 2,846,791 11,478,689 Total goverment expenses $ 25,186,225 $ 24,829,669 $ 25,812,279 $ 27,576,645 $ 34,497,024 $ 35,070,245 $ 26,603,168 $ 34,311,376 $ 33,557,912 $ 46,211,119 Program revenues Governmental activities: Charges for services: General government $ 237,315 $ 181,992 $ 169,307 $ 177,574 $ 140,587 $ 160,800 $ 157,868 $ 147,693 $ 183,901 $ 161,527 Police 38,181 (1,479) 1,763 375 1,455 4,700 20,011 -- 3,571 68,809 Fire 136,433 158,975 1.90,989 145,544 188,169 210,678 193,442 165,106 162,683 191,529 Building, zoning and planning 1,173,440 1,247,715 2,184,127 2,347,092 2,744,711 2,256,151 3,136,916 2,714,085 1,338,485 1,216,539 Parks and recreation 1,957,747 2,107,397 2,287,983 2,614,034 2,622,554 2,805,925 2,710,396 3,033,636 3,142,475 3,377,137 Operating grants and contributions 157,912 163,752 77,638 6,629 426,917 97,970 85,315 54,331 59,412 53,210 Capital grants and contributions 1,709,481 959,360 730,492 783,886 803,620 826,282 7,854,679 867,197 873,734 1,733,691 Total governmental activities program revenues 5,410,509 4,817,712 5,642,299 6,075,134 6,928,013 6,362,506 14,158,627 6,982,048 5,764,261 6,802,442 Business -type activities: Charges for services: Stormwater Solid waste Capital grants and contributions: Stormwater 331,319 172,164 -- Sanitary sewer 6,971,311 2,501,287 258,500 Operating grants and contributions: Stormwater - 164,176 Total business -type activities program revenues Total program revenues 491.314 484,932 979,865 935,352 958,114 907,324 939,798 908,269 933,683 941,302 635,580 615,480 597,431 588,449 592,480 591,079 600,688 652,455 651,344 841,501 47,872 8,429,524 3,773,863 1,835,796 1,523,801 1,550,594 1,498,403 1,588,358 1,724,900 1,585,027 1,782,803 $ 13,840,033 $ 8,591.575 $ 7,478,095 $ 7.598,935 5 8,478,607 $ 7,860,909 $ 15,746,985 $ 8,706,948 $ 7,349,288 $ 8,585,245 (Continued) 80 VILLAGE OF KEY BISCAYNE, FLORIDA CHANGES IN NET POSITION (Continued) LAST TEN FISCAL YEARS (ACCRUAL BASIS OF ACCOUNTING) 2009 2010 2011 2012 2013 2014 2015 2016 2017 2018 Net (expense) revenue Governmental activities $ (18,232,783) $ (18,783,590) $ (18,610,570) $ (19,013,950) $ (25,145,280) $ (25,888,239) $ (8,957,567) $ (24,416,783) $ (24,946,860) $ (27,929,988) Business -type activities 6,886,591 2,545,496 276,386 (963,760) (873,137) (1,321,097) (1,898,616) (1,187,645) (1,261,764) (9,695,886) Total net expense $ (11,346,192) $ (16,238,094) $ (18,334,184) $ (19,977,710) $ (26,018,417) $ (27,209,336) $ (10,856,183) $ (25,604,428) $ (26,208,624) $ (37,625,874) General revenues Governmental activities: Taxes: Property taxes $ 19,769,976 $ 17,832,874 $ 16,646,040 $ 16,985,109 $ 17,499,835 $ 17,857,711 $ 19,353,288 $ 22,249,642 $ 24,202,255 $ 24,992,663 Utility taxes 1,555,748 1,655032 1,705,238 1,727,651 1,789,909 1,967,061 1,979,733 2,007,095 2,110,494 2,136,221 Franchise fees 992,997 1,006,415 735,519 846,252 780,245 574,639 595,196 603,889 479,194 655,599 Communications services tax 1,091,734 1,029,087 964,324 946,399 1,010,931 917,449 862,165 753,385 698,927 734,422 Intergovernmental 1,348,324 1,391,242 1,575,314 1,667,597 1,772,208 1,902,177 1,901,774 1,955,183 1,555,215 2,595,087 Investment earnings 44,737 21,346 37,254 37,985 16,722 34,991 47,004 111,484 78,443 37,503 Miscellaneous 91,232 131,847 147,065 212,697 1,627,479 148,140 139,196 81,516 184,489 244,650 Transfers (164,502) (212,308) (28,134) (28,134) (28,134) (257,134) (343,884) (382,883) 31,804 9,545,452 Total governmental activities 24,730,246 22,855,535 21,782,620 22,395,556 24,469,195 23,145,034 24,534,472 27,379,311 29,340,821 40,941,597 Business -type activities: Investment earnings 21,303 1,974 2,162 587 659 5,551 3,911 5,986 24,282 23,278 Capital Contributions from General Fund - -- - - - - - - 221,472 -- Transfers 164,502 212,308 28,134 28,134 28,134 257,134 343,884 382,883 (31,804) Total business -type activities 185,805 214,282 30,2% 28,721 28,793 262,685 347,795 388,869 213,950 23,278 Total general revenues $ 24,916,051 $ 23,069,817 $ 21,812,916 $ 22,424,277 $ 24,497,988 $ 23,407,719 $ 24,882,267 $ 27,768,180 $ 29,554,771 $ 40,964,875 Change in Net Position Governmental activities $ 6,497,463 $ 4,071,945 $ 3,172,050 $ 3,381,606 $ (676,085) $ (2,743,205) $ 15,576,905 $ 2,962,528 $ 4,393,961 $ 13,011,609 Business -type activities 7,072,396 2,759,778 306,682 (935,039) (844,344) (1,058,412) (1,550,821) (798,776) (1,047,814) (9,672,608) Total change in Net Position $ 13,569,859 $ 6,831,723 $ 3,478,732 $ 2,446,567 $ (1,520,429) $ (3,801,617) $ 14,026,084 $ 2,163,752 $ 3,346,147 $ 3,339,001 81 VILLAGE OF KEY BISCAYNE, FLORIDA FUND BALANCES OF GOVERNMENTAL FUNDS LAST TEN FISCAL YEARS (MODIFIED ACCRUAL BASIS OF ACCOUNTING) 2009 2010 2011 2012 2013 2014 2015 2016 2017 2018 General fund Non -spendable Restricted Committed Assigned Reserved Unreserved Total General Fund 12,318,533 $ — $ 305,730 1,170,247 12,039,224 4,028,870 15,286,689 $ 303,918 1,054,070 4,858,269 8,178,544 $ 272,330 1,466,704 5,065,439 10,852,640 $ 353,823 $ 268,176 $ 443,084 $ 598,248 $ 914,616 1,574,817 1,875,857 2,795,695 1,950,591 1,254,841 5,214,654 13,538,053 11,606,197 12,034,340 4,090,000 11,756,540 11, 870,006 13,104,992 16,263,027 10,962,611 179 12,318,533 15,286,689 17,544,071 14,394,801 17,657,113 18,899,834 27,552,092 27,949,968 30,846,385 17,222,068 All other governmental funds Committed 3,665,259 6,060,286 4,240,104 4,371,204 3,188,871 629,740 7,214,656 Unassigned (1,077,816) (690,343) (278,254) (314,462) -- -- -- — Restricted -- -- 573,701 1,671,741 470,334 529,301 -- 715,133 823,271 Assigned 59,404 414,264 - 1,008,170 Unreserved, reported in: Special revenue fund (1,501,382) (1,299,432) -- 825,896 Capital projects funds 6,875,361 5,195,557 (2,114,581) (6,305,354) Total Other Governmental Funds 5,373,979 3,896,125 2,587,443 5,943,644 5,633,591 4,527,076 3,777,576 (1,070,577) (4,764,325) 9,046,097 Total Governmental Funds $ 17,692,512 $ 19,182,814 $ 20,131,514 $ 20,338,445 $ 23,290,704 $ 23,426,911 $ 31,329,668 $ 26,879,391 $ 26,082,060 $ 26,268,165 Note: The Village implemented GASB Statement No. 54 for the fiscal year ended September 30, 2011. 82 VILLAGE OF KEY BISCAYNE, FLORIDA CHANGES IN FUND BALANCES OF GOVERNMENTAL FUNDS LAST TEN FISCAL YEARS (MODIFIED ACCRUAL BASIS OF ACCOUNTING) Revenues Ad valorem taxes Franchise fees Utility taxes/communication services tax Licenses and permits Intergovernmental revenue Charges for services Grants Investment income Contributions Miscellaneous Total revenues Expenditures Current: General government Fire Police Public works Building, planning and zoning Parks and recreation Capital outlay Intergovernmental: Payment under interlocal agreement Debt service: Principal Interest and other fiscal charges Total expenditures Excess (deficiency) of revenues over expenditures Other financing sources (uses) Transfers in Transfers out Bonds issued Payment for interlocal agreement Refunding bonds issued Debt service - principal Proceeds from sale of capital assets Capital lease proceeds Total other financing sources (uses) Net Change in Fund Balances Debt service as a percentage of non -capital expenditures 2009 2010 2011 2012 2013 2014 2015 2016 2017 2018 $ 19,769,976 $ 17,832,874 $ 16,646,040 992,997 1,006,415 735,519 2,834,749 2,731,766 2,717,209 1,188,297 1,329,823 1,948,820 3,047,844 2,089,015 2,305,806 2,354,819 2,364,777 2,885 349 167,873 425,339 77,638 44,737 21,346 37,254 26,232 131,848 147,065 30,427,524 27,933,203 27,500,700 $ 16,985,109 $ 17,499,835 846,252 780,245 2,709,498 2,800,840 2,383,500 2,542,103 2,451,483 2,575,828 2,901,119 3,155,373 6,629 426,917 37,985 16,722 212,697 1,627,479 $ 17,857,711 574,639 2,884,510 2,090,916 2,728,459 3,347,338 97,970 34,991 148,140 28,534,272 31,425,342 29,764,674 $ 19,353,288 $ 22,249,642 $ 24,202,255 $ 24,992,663 595,196 603,889 479,194 655,599 2,841,898 2,760,480 2,809,421 2,870,643 3,076,414 2,484,872 1,239,116 1,211,159 2,756,453 2,822,380 2,428,949 3,462,454 3,142,219 3,548,985 3,591999 3,804,382 85,315 54,331 59,412 881,210 47,004 111,484 78,443. 37,503 7,000,000 -- -- 38,325 139,196 81,516 184,489 244,650 39,036,983 34,717,579 35,073,278 38,198,588 2,266,763 1,934,341 1,929,153 6,407,770 6,584,784 6,557,442 5,116,158 5,093,601. 5,312,977 1,914,119 1,608,193 1,711,868 1,540,507 1,602,651 1,702,541 3,730,084 3,717,935 3,799,408 1,537,930 2,349,935 1,963,219 2,066,501 7,056,020 5,453,853 1,727,203 1,777,349 3,764,570 3,793,179 2,255,188 7,014,382 5,750,069 1,826,782 1,842,175 4,092,835 2,294,068 2,468,672 7,574,576 6,018,581 1,732,554 2,064,687 4,170,205 1,769,634 - 4,574,703 2,051,307 2,140,684 2,348,506 2,436,139 2,531,116 1,450, 649 1,3 86,913 1,520,433 828,393 913,409 2,716,772 2,884,740 3,783,031 6,726,873 6,895,590 6,077,940 5,957,079 1,752,803 1,873,594 1,982,159 2,074,777 4,258,750 4,754,626 3,334,821 6,938,850 8,545 2,390,330 2,920,699 3,294,521 875,949 973,012 822,575 3,265,030 3,755,605 6,882,673 7,499,587 6,621,521 7,603,393 2,683,504 3,968,495 2,476,950 2,336,937 5,073,774 5,071,372 6,567,150 3,278,569 3,459,733 3,771,867 777,099 726,658 26,015,287 26,419,037 26,845,547 28,903,207 28,520,024 33,966,333 30,920,342 38,784,973 37,807,434 38,012,483 4,412,237 1,514,166 655,153 3,236,194 -- -- (3,400,696) (212,308) (28,134) - - 18,693,952 -- -- (18,693,952) 65,000 - - - 188,444 321,681 (99,502) (23,864) 293,547 $ 4,312,735 $ 1,490,302 $ 948,700 $ (368,935) 2,905,318 (4,201,659) 8,116,641 (4,067,394) (2,734,156) 186,105 5,816,222 (5,844,356) 604,000 575,866 46,941 4,337,866 (28,134) 5,575,075 (5,500,000) 904,093 (1,161,227) 4,575,000 20,000 1,855,623 (2,199,507) 130,000 4,260,203 (4,643,086) 2,327,481 15,604,398 (2,295,677) (15,604,398) - - 1,905,021 (213,884) (382,883) 1,936,825 206,931 $ 2,952,259 $ 136,207 $ 7,902,757 $ (4,450,277) $ (797,331) $ 186,105 14% 15% 16% 13% 13% 11% 14% 14% 14% 13% 83 VILLAGE OF KEY BISCAYNE, FLORIDA GENERAL GOVERNMENTAL TAX REVENUES BY SOURCE LAST TEN FISCAL YEARS (MODIFIED ACCRUAL BASIS OF ACCOUNTING) Fiscal Year Ad Valorem Taxes Franchise Utility Taxes Taxes Inter- governmental Communications Services Tax Total 2009 2010 2011 2012 2013 2014 2015 2016 2017 2018 17,832,874 17,832,874 16,646,040 16,985,109 17,499,835 17,857,711 19,353,288 22,249,642 24,202,255 24,992,663 1,006,415 1,655,032 1,006,415 2,731,766 735,519 1,705,238 846,252 1,727,651 780,245 1,789,909 574,639 1,967,061 595,196 1,979,733 603,889 2,007,095 479,194 2,110,494 655,599 2,136,221 Source: Village of Key Biscayne Finance Department. 2,089,015 1,203,221 1,358,573 2,451,483 2,575,828 2,728,459 2,756,453 2,822,380 2,428,949 3,462,454 1,029,087 1,029,087 1,011,971 981,847 1,010,931 917,449 862,165 753,385 698,927 734,422 23,612,423 23,803,363 21,457,341 22,992,342 23,656,748 24,045,319 25,546,835 28,436,391 29,919,819 31,981,359 84 VILLAGE OF KEY BISCAYNE, FLORIDA NET ASSESSED VALUE AND ESTIMATED ACTUAL VALUE OF TAXABLE PROPERTY LAST TEN FISCAL YEARS Fiscal Year Ended Tax Roll September 30, Year Real Property Residential Property Commercial Property Total Total Net Direct Personal Assessed Tax Property Value Rate 2009 2008 2010 2009 2011 2010 2012 2011 2013 2012 2014 2013 2015 2014 2016 2015 2017 2016 2018 2017 6,068,439,146 5,593,947,239 5,114,029,641 5,458,639,449 5,445,595,704 5,800,745,002 6,306,477,954 7,291,699,676 7,875,742,931 8,148,976,226 328,171,098 302,747,017 276,917,774 281,666,505 294,710,250 313,747,054 353,222,413 393,809,175 425,303,529 445,692,829 38,117,174 6,434,727,418 3.200 39,521,761 5,936,216,017 3.200 38,812,865 5,429,760,280 3.200 41,574,020 5,522,872,647 3.200 38,326,390 5,778,632,344 3.200 37,410,973 6,151,903,029 3.000 37,956,862 6,697,657,229 3.000 36,239,673 7,721,748,524 3.000 38,238,417 8,339,284,877 3.000 39,913,640 8,634,582,695 3.000 Note: Property in the Village is reassessed each year. Property is assessed at actual value, therefore, the assessed values are equal to actual value. Tax rates are per $1,000 of assessed value. Source: Miami -Dade County Property Appraiser's Office. 85 VILLAGE OF KEY BISCAYNE, FLORIDA PROPERTY TAX RATES - DIRECT AND OVERLAPPING GOVERNMENTS LAST TEN FISCAL YEARS Village of Key Biscayne Overlapping Rates (1) Miami -Dade County Miami -Dade Schools 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 2009 2008 3.200 3.200 4.838 0.285 5.123 7.533 0.264 7.797 0.035 0.535 0.893 17.582 2010 2009 3.200 3.200 4.838 0.285 5.123 7.698 0.297 7.995 0.035 0.535 0.972 17.859 2011 2010 3.200 3.200 5.428 0.445 5.873 7.864 0.385 8.249 0.035 0.535 0.873 18.764 2012 2011 3.200 3.200 4.805 0.285 5.090 7.765 0.240 8.005 0.035 0.374 0.742 17.445 2013 2012 3.200 3.200 4.704 0.285 4.989 7.765 0.233 7.998 0.035 0.368 0.734 17.322 2014 2013 3.000 3.000 4.704 0.422 5.126 7.644 0.333 7.977 0.035 0.352 0.731 17.221 2015 2014 3.000 3.000 4.667 0.450 5.117 7.775 0.199 7.974 0.035 0.158 1.011 17.294 2016 2015 3.000 3.000 4.667 0.450 5.117 7.413 0.199 7.612 0.032 0.146 0.993 16.900 2017 2016 3.000 3.000 4.667 0.400 5.067 7.138 0.184 7.322 0.032 0.136 0.979 16.536 2018 2017 3.000 3.000 4.667 0.400 5.067 6.774 0.220 6.994 0.032 0.128 0.934 16.154 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. (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). 86 VILLAGE OF KEY BISCAYNE, FLORIDA PRINCIPAL PROPERTY TAXPAYERS CURRENT YEAR AND TEN YEARS AGO 2018 Taxpayer Net Taxable Value Percent of Total Village Net Assessed Rank Value 2009 Taxpayer Percent of Total Net Village Net Taxable Assessed Value Rank Value GB JT Hotel Partners LP Red Dragon's Sands LTD Galleria of Key Biscayne Inc Timothy Bryan United Real East Ventures Inc Edgardo DeFortuna 240 Crandon Investments LLC Boca Breeze LLC Atlantic USA Bruno Bich Trs $ 70,200,000 31,228,584 28,000,000 22,565,090 21,159,478 19,906,254 16,500,000 16,265,234 15,962,203 14,775,462 $ 256.562.305 1 0.84% 2 0.37% 3 0.34% 4 0.27% 5 0.25% 6 0.24% 7 0.20% 8 0.20% 9 0.19% 10 0.18% 3.08% SBR Fortune Associates Galleria of Key Biscayne Inc Key Biscayne Properties LLC Red Dragon's Sands LTD United Real Estate Ventures Inc 260 Cape FLA LLC Teasurus Holdings Inc Ocean Club Community Assoc 500 Bay LN LLC Atlantic USA $ 44,568,400 1 0.69% 19,300,000 2 0.30% 15,134,130 3 0.24% 14,568,368 4 0.23% 13,010,965 5 0.20% 12,995,950 6 0.20% 12,851,673 7 0.20% 12,500,000 8 0.19% 12,211,803 9 0.19% 12,088,150 10 0.19% $ 169.229.439 2.63% 87 VILLAGE OF KEY BISCAYNE, FLORID] PROPERTY TAX LEVIES AND COLLECTION LAST TEN FISCAL YEAR.' Collected within Total Taxes the Fiscal Year Total Collections Fiscal Year Levied for of the Levy Collections in to Date Ended Fiscal Percent Subsequent Percent September 30, Year Amount of Levy Year's Amount of Levy 2009 20,591,128 19,389,610 94.16% 380,366 19,769,976 96.01% 2010 18,995,891 17,635,675 92.84% 197,199 17,832,874 93.88% 2011 17,375,233 16,305,810 93.85% 340,230 16,646,040 95.80% 2012 17,673,192 16,915,884 95.71% 69,225 16,985,109 96.11% 2013 18,491,624 17,418,348 94.20% 81,487 17,499,835 94.64% 2014 19,686,090 17,857,711 90.71% -- 17,857,711 90.71% 2015 20,092,972 19,353,288 96.32% 19,353,288 96.32% 2016 23,165,246 22,249,642 96.05% 22,249,642 96.05% 2017 25,017,855 24,202,255 96.74% 24,202,255 96.74% 2018 25,940,310 24,992,663 96.35% 24,992,663 96.35% Source: Village of Key Biscayne Finance Department and Miami -Dade County Tax Collector's Office 88 VILLAGE OF KEY BISCAYNE, FLORIDA RATIOS OF OUTSTANDING DEBT BY TYPE LAST TEN FISCAL YEARS Governmental Activities Business -type Activities Fiscal Year General Percent of Debt Ended Obligation Revenue Loans Revenue Loans Household Per September 30, Bonds Bonds Payable Bonds Payable Total Income (1) Capita 2009 32,040,160 4,835,000 2,387,341 39,262,501 0.25% 3,737 2010 29,950,678 4,450,000 4,695,812 39,096,490 0.26% 3,167 2011 27,757,222 4,130,000 4,497,388 36,384,610 0.29% 2,948 2012 25,543,132 3,655,000 4,254,706 33,452,838 0.33% 2,710 2013 28,759,034 3,170,000 4,148,944 36,077,978 0.31% 2,923 2014 30,897,605 6,255,000 3,946,308 41,098,913 0.28% 3,329 2015 28,101,157 5,955,000 3,736,933 37,793,090 0.32% 2,961 2016 24,969,498 9,135,000 167,484 34,271,982 0.43% 2,659 2017 21,731,237 8,464,278 143,485 30,339,000 0.43% 2,347 2018 21,532,747 5,296,354 -- 26,829,101 0.45% 2,082 (1) household income amounts are disclosed on page 83 on the demographic schedule 89 VILLAGE OF KEY BISCAYNE, FLORIDA RATIOS OF GENERAL BONDED DEBT OUTSTANDING LAST TEN FISCAL YEARS The Village does not have general obligation debt. 90 VILLAGE OF KEY BISCAYNE, FLORIDA DIRECT AND OVERLAPPING GOVERNMENTAL ACTIVITIES DEBT 2018 Government Unit Net Debt Outstanding Percentage Applicable to the Village of Key Biscayne (1) Amount Applicable to the Village of Key Biscayne Direct: Village of Key Biscayne $ 21,731,237 Overlapping debt: Miami -Dade County Miami -Dade County School Board Subtotal, Overlapping Debt Total Direct and Overlapping Debt 1,837,515,000 902,981,000 100.00% 2.94% 2.65% $ 21,731,237 54,048,683 23,913,612 77,962,295 $ 99,693,532 Sources: Data provided by the Miami -Dade County Finance Department and the Miami -Dade County School Board. Note: Overlapping governments are those that coincide, at least in part, with the geographic boundaries of the Village. This schedule estimates the portion of the outstanding debt of those overlapping governments that is borne by the residents and businesses of the Village of Key Biscayne. This process recognizes that, when considering the Village's ability to issue and repay long. term debt, the entire debt burden borne by the residents and businesses should be taken into account. However, this does not imply that every taxpayer is a resident, and therefore responsible for repaying the debt, of each overlapping government. (1) For debt repaid with property taxes, the percentage of overlapping debt applicable is estimated using taxable assessed property values. Value that is within the Village's boundaries and dividing it by the County's and School Board's total taxable assessed value. This approach was also used for the other debt. 91 VILLAGE OF KEY BISCAYNE, FLORIDA PLEDGED REVENUE COVERAGE LAST TEN FISCAL YEARS Fiscal Year Non - Ended Ad Valorem Debt Service September 30, Revenues Principal Interest Coverage 2009 10,100,329 2,140,684 1,386,913 2.86 2010 10,854,660 2,348,506 1,520,433 2.81 2011 11,549,163 2,436,139 828,393 3.54 2012 13,925,507 2,531,116 913,409 4.04 2013 19,683,695 2,716,772 875,949 5.48 2014 19,683,695 2,920,699 973,012 5.06 2015 19,683,695 2,920,699 973,012 5.06 2016 12,467,937 3,294,521 822,575 3.03 2017 10,871,023 3,459,733 777,099 2.57 2018 13,205,925 3,771,867 726,658 2.53 Source: Village of Key Biscayne Finance Department. 92 VILLAGE OF KEY BISCAYNE, FLORIDA DEMOGRAPHIC AND ECONOMIC STATISTICS LAST TEN FISCAL YEARS Median Per Capita Household Personal Unemployment Year Population (1) Income (1) Income (1) Rate (2) 2009 10,507 99,796 40,961 11.6% 2010 12,344 102,790 42,190 13.2% 2011 12,344 105,874 43,456 9.4% 2012 12,344 109,050 44,759 8.5% 2013 12,344 112,321 46,102 6.8% 2014 12,344 115,691 47,485 6.1% 2015 12,762 119,241 48,910 6.0% 2016 12,888 145,723 50,377 5.2% 2017 12,924 129,321 83,093 4.7% 2018 12,887* 119,920 ** 63,614 ** 3.6% Sources: (1) City-data.com; *Bureau of Economic & Business Research, University of Florida ** ESRI estimates for 2018 (2) United States Bureau of Labor Statistics 93 VILLAGE OF KEY BISCAYNE, FLORIDA PRINCIPAL EMPLOYERS CURRENT YEAR AND NINE YEARS AGO 2018 2009 Percentage of Percentage of Total Village Total Village Employer Employees (l) Rank Employment Employees Rank Employment Ritz Carlton Key Biscayne 1,500 1 not known 1,500 1 not known Winn Dixie Stores, Inc. 142 3 not known 250 3 not known Village of Key Biscayne 179 2 not known 116 4 not known All remaining employers are of an extremely small number Total 1,821 Notes: (1) All amounts are estimated for timely inclusion in report. Requests for information received no response. Source: Village of Key Biscayne Finance Department. 94 VILLAGE OF KEY BISCAYNE, FLORIDA FULL-TIME EQUIVALENT VILLAGE GOVERNMENT EMPLOYEES BY FUNCTION LAST TEN FISCAL YEARS 2009 2010 2011 2012 2013 2014 2015 2016 2017 2018 Number of Employees General government 8 7 7 7 7 7 9 10 19 9 Public safety 69 70 68 69 74 74 77 78 76 85 Building, planning and zoning 13 13 13 15 17 17 14 14 14 16 Public works 4 4 4 4 4 4 5 4 5 5 Parks and recreation 10 10 10 10 12 10 9 10 11 10 Total Number of Employees 104 104 102 105 114 112 114 116 125 125 Source: Village of Key Biscayne Finance 95 VILLAGE OF KEY BISCAYNE, FLORIDA OPERATING INDICATORS BY FUNCTION/PROGRAM LAST TEN FISCAL YEARS Function/Pronram 2009 2010 2011 2012 2013 2014 2015 2016 2017 2018 Public safety: Police: Police personnel and officers 31 32 30 30 33 34 36 38 35 36 Police calls for service 37,002 34,935 37,646 31,214 26,836 24,556 30,475 29,427 32,031 * Parking violations 824 523 563 638 676 440 506 552 2,287 * Traffic violations 975 1,425 1,269 1,542 1,875 846 939 956 1,531 * Fire: Fire personnel 38 38 38 39 41 40 41 40 41 42 Fire incidents 1,012 1,556 1,841 1,369 1,896 1,763 1,490 1,908 1,529 1,884 Fire inspections performed 229 267 469 323 469 739 667 770 995 991 Planning and development: Building permits issued 3,650 4,371 3,723 3,402 3,885 3,876 3,684 3,501 3,746 2,935 Business tax receipts issued 1,095 1,129 1,165 1,187 937 987 1,097 1,219 1,088 1,896 Culture and recreation: Number of building users 4,268 3,990 4,127 4,338 4,251 4,041 4,110 4,179 4,274 4.693 Solid waste: Residential accounts 1,298 1.302 1,292 1,264 1,254 1.250 1,272 1,260 1,251 1,341 Sources: Various Village Departments. * Data unavailable as the Police Department installed a new software in September 2018 and old data was inaccessible 96 VILLAGE OF KEY BISCAYNE, FLORIDA CAPITAL ASSET STATISTICS BY FUNCTION/PROGRAM LAST TEN FISCAL YEARS Function/Program 2009 2010 2011 2012 2013 2014 2015 2016 2017 2018 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/divisions 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 22 22 22 22 22 22 22 22 24.8 Number of street lights 300 300 300 300 300 300 300 300 300 300 Number of traffic signals 4 4 4 4 4 4 4 4 4 6 Culture and recreation: Parks 3 3 3 3 3 3 3 4 4 4 Parks acreage 9 9 9 9 9 9 9 10 10 14.5 Community center 1 1 1 1 1 1 1 1 1 1 Swimming pools 1 1 1 1 1 1 1 I 1 1 Sources: Various Village Departments. 97 REPORTING SECTION GOVERNMENT AUDITING STANDARDS Government Auditing Standards Internal Control Over Financial Reporting deficiency in internal control material weakness significant deficiency Compliance and Other Matters Government Auditing Standards Purpose of this Report Government Auditing Standards Report on Compliance for Major State Project Florida Department of Financial Services’ Management’s Responsibility Auditors’ Responsibility Government Auditing Standards Opinion on Major State Project Report on Internal Control Over Compliance deficiency in internal control over compliance material weakness in internal control over compliance significant deficiency in internal control over compliance Report on Schedule of Expenditures of State Financial Assistance Required by Chapter 10.550, Rules of the Auditor General State of Florida Department of Environmental Protection Total State of Florida Department of Environmental Protection Total Expenditures of State Financial Assistance See notes to Schedule of State Financial Assistance. . Financial Statements Unmodified Opinion State Project Unmodified Opinion VILLAGE OF KEY BISCAYNE, FLORIDA SCHEDULE OF FINDINGS AND QUESTIONED COSTS FOR THE FISCAL YEAR ENDED SEPTEMBER 30, 2018 SECTION II — FINANCIAL STATEMENT FINDINGS None. SECTION III — STATE FINANCIAL ASSISTANCE FINDINGS AND QUESTIONED COSTS None. SECTION IV — PRIOR AUDIT FINDINGS There were no prior year financial statement findings. The Village was not subject to a single audit during the fiscal year ended September 30, 2017. 106 Auditors’ Responsibility Government Auditing Standards, Other Reporting Requirements Government Auditing Standards AICPA Professional Standards Prior Audit Findings Official Title and Legal Authority Financial Condition and Management Additional Matters Purpose of this Letter MARCUM ACCOUNTANTS ADVISORS INDEPENDENT ACCOUNTANTS' REPORT ON COMPLIANCE PURSUANT TO SECTION 218.415 FLORIDA STATUTES To the Honorable Mayor, Village Council and Village Manager Village of Key Biscayne, Florida We have examined the Village of Key Biscayne, Florida's (the Village) compliance with Section 218.415 Florida Statutes, Local Government Investment Policies, for the fiscal year ended September 30, 2018. Management of the Village is responsible for the Village's compliance with the specified requirements. Our responsibility is to express an opinion on the Village's compliance based on our examination. Our examination was conducted in accordance with attestation standards established by the American Institute of Certified Public Accountants. Those standards require that we plan and perform the examination to obtain reasonable assurance about whether the Village complied, in all material respects, with the specified requirements referenced above. An examination involves performing procedures to obtain evidence about whether the Village complied with the specified requirements. The nature, timing, and extent of the procedures selected depend on our judgment, including an assessment of the risks of material noncompliance, whether due to fraud or error. We believe that the evidence we obtained is sufficient and appropriate to provide a reasonable basis for our opinion. Our examination does not provide a legal determination on the Village's compliance with specified requirements. In our opinion, the Village complied, in all material respects, with Section 218.415 Florida Statutes for the fiscal year ended September 30, 2018. This report is intended to describe our testing of compliance with Section 218.415 Florida Statutes and it is not suitable for any other purpose. `7/162 ,cr4xc, L L P Miami, FL June 28, 2019 109 MARCUMGROUP MEMBER Marcum LLP One Southeast Third Avenue Suite 1100 • Miami, Florida 33131 • Phone 305.995.9600 • Fax 305.995.9601 • www.marcumllp.com