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HomeMy Public PortalAboutComprehensive Annual Financial Report Fiscal Year Ended 09-30-03.tifC VILLAGE OF KEY BISCAYNE FLORIDA COMPREHENSIVE ANNUAL FINANCIAL REPORT FISCAL YEAR ENDED SEPTEMBER 30 2003 Prepared by THE FINANCE DEPARTMENT c C f-\ (t^ Th C C C C C ..v O.r VILLAGE OF KEY BISCAYNE, FLORIDA COMPREHENSIVE ANNUAL FINANCIAL REPORT FISCAL YEAR ENDED SEPTEMBER 30 2002 TABLE OF CONTENTS I INTRODUCTORY SECTION PAGE Letter of Transmittal i Village Officials vi Certificate of Achievement for Excellence in Financial Reporting vu Organization Chart vin II FINANCIAL SECTION REPORT OF INDEPENDENT CERTIFIED PUBLIC ACCOUNTANTS 1 2 MANAGEMENT S DISCUSSION AND ANALYSIS (Required Supplementary Information) 3 10 BASIC FINANCIAL STATEMENTS Government Wide Fmancial Statements Statement of Net Assets Statement of Activities 11 12 Fund Financial Statements Governmental Fund Financial Statements Balance Sheet 13 Statement of Revenues Expenditures and Changes in Fund Balances 14 Reconciliation of the Statement of Revenues Expenditures and Changes in Fund Balances of Governmental Funds to the Statement of Activities 15 Proprietary Fund Financial Statements Statement of Net Assets 16 Statement of Revenues Expenses and Changes in Net Assets 17 Statement of Cash Flows 18 Fiduciary Fund Financial Statements Statement of Fiduciary Net Assets 19 Statement of Changes m Fiduciary Net Assets 20 Notes to Basic Financial Statements 21 39 REQUIRED SUPPLEMENTARY INFORMATION (OTHER THAN MD&A) Budgetary Comparison Schedule — General Fund 40 Notes to Budgetary Comparison Schedule 41 Schedule of Employer Contributions 43 C C VILLAGE OF KEY BISCAYNE FLORIDA TABLE OF CONTENTS PAGE III COMBINING FINANCIAL STATEMENTS Combining Statement of Net Assets — Noiunal or Propnetary Funds 44 Combining Statement of Revenues Expenses and Changes in Net Assets — Nonmalor Proprietary Funds 45 Combining Statement of Cash Flows—Nonmalor Proprietary Funds 46 IV STATISTICAL SECTION Government Wide Information Government Wide Expenses by Function 47 Government Wide Revenues 48 Fund Information General Governmental Expenditures by Function 49 General Governmental Revenues by Source 50 Utility Tax Revenue By Source Franchise Fee Revenue by Source 51 Property Tax Levies and Collection 52 Assessed and Estimated Actual Value of Taxable Property 53 Property Tax Rates Direct and Overlapping Governments 54 Ratio of Annual Debt Service Expenditures for Net Bonded Debt to General Governmental Expenditures 55 Schedule of Direct and Overlapping Debt General Obligation Bonds 56 Ratio of Net Bonded Debt to Assessed Value and Per Capita 57 Revenue Bond Coverage 58 Demographic Statistics 59 Property Value Construction and Bank Deposits 60 Pnncipal Taxpayers 61 Miscellaneous Statistical Data 62 V COMPLIANCE SECTION Report of Independent Certified Public Accountants on Compliance and on Internal Controls over Financial Reporting Based on an Audit of Financial Statements Performed in Accordance with Government Audttzng Standards 63 Management Letter in Accordance with the Rules of the Auditor General of the State of Florida 65 Report of Independent Certified Public Accountants on Compliance Applicable to each Major Program and on Internal Control over Compliance in accordance with OMB Circulai A 133 67 Schedule of Expenditures of Federal Awards 69 Note to Schedule of Expenditures of Federal Awards 70 Schedule of Findings and Questioned Costs 71 Summary Schedule of Prior Audit Findings 73 00®000000000000 C 0 C C INTRODUC TORY SE CTION I f ! , / 0000U 000 0UUU Uu March 5 2004 flag C un 1 Robert Oldakowski May Jorge E Mendia V May Martha Fdez Leon Broucek ..,\ Carol thaz-Castro Mortime Fried James L Peters Robert L Vernon (w' 0 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 mformation presented m this report To provide a reasonable basis for making these representations management of the Village of Key Biscayne has estabhshed a comprehensive internal framework that is designed both to protect the Village s assets from loss theft or misuse and to compile sufficient reliable mfonuation for the preparation of the Village of Key Biscayne s financial statements in confoumty 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 matenal misstatement As management we assert that to the best of our knowledge and belief this financial report is complete and reliable in all matenal respects 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 pnnciples (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 fiiru 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 2003 The finu of Rachlin Cohen & Holtz LLP licensed certified public accountants has audited the Village of Key Biscayne s financial statements The goal of the independent audit was to provide reasonable assurance that the basic financial statements of the Village of Key Biscayne for the fiscal year ended September 30 2003 are free of material misstatement The independent audit involved examining on a test basis evidence supporting the amount and r 88 West McIntyre Street 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 Honorable Mayor Village Council and Citizens Village of Key Biscayne disclosures in the financial statements assessing the accounting pnnciples 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 rendenng an unqualified opinion that the Village of Key Biscayne s financial statements for the fiscal year ended September 30 2003 are fairly presented in conformity with GAAP The independent auditor s report is presented as the first component of the financial section of this report GAAP requires that management provide a narrative introduction overview and analysis to accompany the basic financial statements In the form of Management s Discussion and Analysis (MD&A) This letter of transmittal is designed to complement MD&A and should be read in conjunction with it The Village of Key Biscayne s MD&A can be found immediately following the report of the independent certified public accountants Profile of the Government The Village of Key Biscayne incorporated in 1991 is located on the southern most barrier island of the United States Miami Dade County Florida approximately 7 5 miles off the coast of Miami Florida The Village of Key Biscayne occupies a land area of 1 25 square miles situated between Crandon Park and Bill Baggs State Recreation Area The Village serves a population of approximately 11 100 The Village of Key Biscayne receives tax levies on real and personal property located inside its boundaries The Village of Key Biscayne has operated wider the council manager form of government since incorporation Policymaking and legislative authonty 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 zonmg 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 ire required to submit requests for appropnations to the Village Manager and these requests are the initiation of developing the proposed budget The eOOGG0©0000000000©00 S 11 T'N C )00006 )02OGOfOOO9O y i onnonano Honorable Mayor Village Council and Citizens Village of Key Biscayne Village Manager then presents this proposed budget to the Council for review The Council is required to hold public heanngs on the proposed budget and to adopt a final budget no later than September 30 the close of the Village s fiscal year The appropnated 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 appropnations between departments or between funds require the approval of the Village Council The Village Council approves supplemental appropriations Budget to actual compansons are provided in this report for the general fund for which an appropnated annual budget has been adopted The general fund budget to actual report is presented in the required supplemental information section of this report Factors Affecting Financial Condition The information presented in the financial statements is best understood when it is considered from the broader perspective of the specific environment with which the Village of Key Biscayne operates Local Economy The Village of Key Biscayne enjoys a favorable economic environment and local indicators to continued future stability This exclusive community is compnsed of well educated and involved citizens who take a genuine interest in the social business cultural and governing aspects of their Village The Village is comprised of affluent exclusive residential housing stock and three major shopping centers There is no industrial area in the community Long -Term Financial Planning The Village has recently completed the first two phases of its Civic Center Project with the completion of a new Village Hall / Police Building and a new Fire Station The third phase presently under construction will serve as the Village Community Center and is scheduled to open in the fall of 2004 Recent completion of the Beach Park serves as an outlet to the beach with a picnic shelter Several public works projects have recently been completed yielding new sidewalks street improvements park improvements and a tree replacement program Several new capital projects are under way to improve the safety of the major roadway through the Village Crandon Boulevard The Village utilizes a comprehensive living projection five years into the future to assess revenue trends and expenditure needs to assure a balanced stable financial program avoiding millage rate increases while addressing the various goals and objectives of the community 111 Honorable Mayor Village Council and Citizens Village of Key Biscayne Cash Management Policies and Practices The Village s Cash Management strategy emphasizes immediate funds collection and deposit into the appropriate fund utilizing ACH debit or wire transfer methods for over 90% of all finds received Cash is transferred to a centralized clearing account for all payments at the time of payment The clearing account maintains a zero balance exclusive of these transfers Currently the Village s investment policy follows Chapter 218 Florida Statutes Cash in any of the fund s operating accounts are swept into an overnight repurchase agreement properly collaterahzed in accordance with Chapter 280 Florida statutes Surplus cash is invested in certificates of deposit held in qualified depositones and with the State Board of Administration Investment objectives are the preservation of principal liquidity in accordance with planned cash flows and return on investment in that order Risk Management The Village is exposed to various risks of loss related to torts theft of or damage to and destruction of assets errors and omissions injuries to employees and natural disasters The Village participates in the Florida League of Cities Municipal Insurance Trust for workers compensation habihty and property insurance Flood insurance is provided by the Flonda State Flood Insurance Pool Pension and Other Post Employment Benefits The Village of Key Biscayne sponsors a 401(a) defined contnbution pension plan with the International City Managers Association Retirement Corporation (ICMA RC) Each full time employee can contribute up to six percent (6%) of his or her pay to the plan while 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 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 11 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 2002 This was the eleventh consecutive year that the Village received this prestigious award In order to be iv 080000000000000000©©© t 0 Q C C " Honorable Mayor Village Council and Citizens Village of Key Biscayne 'twarded a Certificate of Achievement the Village published an easily readable and efficiently organized CAFR This report satisfied both GAAP and applicable legal requirements The Village of Key Biscayne is presenting its first CAFR in accordance with the Governmental Accounting Standards Board Statement Number 34 more commonly known as GASB 34 a major new standud which has changed the method and content governments must report This has been the largest single revision of governmental accounting standards and represented a major effort on the part of the Village and their auditors to comply with this new standard A Certificate of Achievement is valid for a period of one year only We believe that our current CAFR continues to meet the Certificate of Achievement Program s requirements and are submitting it to the GFOA to determine its eligibility for another certificate In addition the Village also received the GFOA s Distinguished Budget presentation Award for its annual budget document for the 2002 2003 fiscal year This was the tenth consecutive year that the Village has received this prestigious award In order to qualify for the Distinguished Budget Presentation Award the Village s budget document was judged to be proficient in several categones mcludmg as a policy document a financial plan an operations guide and a commumcations device The preparation of this report would not have been possible without the efficient and dedicated services of the entire staff of all departments of the Village of Key Biscayne We would hke to express our appreciation to all members of all of the departments who assisted and contnbuted to the preparation of this report A special note of thanks and appreciation is also extended to the fu -m of Rachlm Cohen & Holtz LLP for their assistance m the preparation of this CAFR and for the professional approach and high standards in conduct of their independent audit of the Village s financial records and transactions 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 7/Villae cque iMan Menendez Manager i A_PA Randolph G White Finance Director v VILLAGE OF KEY BISCAYNE FLORIDA VILLAGE OFFICIALS SEPTEMBER 30 2003 VILLAGE COUNCIL Robert Oldakowslci Mayor Jorge Mendia Vice Mayor Martha Fdez Leon Broucek Carol Diaz Castro Mortimer Fried James L Peters Robert Vernon VILLAGE MANAGER Jacqueline R Menendez VILLAGE CLERK Conchita H Alvarez CMC VILLAGE ATTORNEY Weiss Serota Helfman Pastoriza & Guedes P A FINANCE DIRECTOR Randolph G White P A VILLAGE AUDITORS Rachhn Cohen & Holtz LLP Accountants • Advisors 900000©00000 0 0 0 0 0 U e C C C o o o vi Certificate of Achievement for hxcellence in Financial Reporting Presented to C' c� C C C C C C C C Village of Key Biscayne, Florida For its Comprehensive Annual Financial Report for the Fiscal Year Ended September 30 2002 A Certificate of Achievement for Excellence m Financial Reporting is presented by the Government Fmance Officers Association of the United States and Canada to government units and public employee retirement systems whose comprehensive annual financial reports (CAMRs) achieve the highest standards m government accounting and financial reporting President Executive Director - v 11 - O0©©©©©©b©©®00 ®©®©a©®0 0®®®®0®® ®®MiaQwww®©v FINAN CIAL SECTION 1 %� \ �l �� � 1 0 U 0 ."", > r' k, C� 1 C r C C C C C C C IC C r C C C C C C C C C C C REPORT OF INDEPENDENT CERTIFIED PUBLIC ACCOUNTANTS ,17,Cohen _LLL &tJokz () r k T)000() C' C 0000000 Accountants Advisors REPORT OF INDEPENDENT CERTIFIED PUBLIC ACCOUNTANTS Honorable Mayor Village Council and Village Manager Village of Key Biscayne Flonda 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 Flonda (the Village) as of September 30 2003 and for the 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 Villages 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 Umted States and the standards applicable to financial audits contained in Government Auditing Standards issued by the Compti oiler 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 matenal misstatement An audit includes examining on a test basis evidence supporting the amounts and disclosures in the financial statements An audit also includes assessing the accounting pnnciples 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 opinions the financial statements referred to above present fairly m 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 Flonda at September 30 2003 and the respective changes m the financial position and cash flows where applicable thereof for the year then ended in conformity with accounting pnnciples generally accepted m the United States As described in Note I to the basic financial statements the Village adopted the provisions of Governmental Accounting Standards Board Statement No 34 Basic Financial Statements —and Management s Discussion and Analysis —For State and Local Governments This results in a change m the format and content of the basic financial statements In accordance with Govei nment Auditing Standards we have also issued a report dated December 26 2003 on om consideration of the Village s internal control over financial reporting and our tests of its compliance with certain provisions of laws regulations contracts and grants That report is an integral part of an audit performed in accordance with Government Auditing Standards and should be read in conjunction with this report in considering the results of our audit 1 Rachlm Cohen & Holtz LLP One Southeast Third Avenue • Tenth Floor • Miami Florida 33131 • Phone 305 377 4228 • Fax 305 377 8331 • WWW rachhn coin An Independent Member of Baker Tilly International MIAMI FORT LAUDERDALE WEST PALM BEACH STUART TAMPA NEW JERSEY N C C )00000000000F C C c Honoi able Mayor Village Council and Village Manager Village of Key Biscayne Flonda Page Two The Management s Discussion and Analysis and the other required supplementary information on pages 3 through 10 and pages 40 through 43 respectively are not a required part of the basic financial statements but are supplementary information iequired by the Governmental Accounting Standards Board We have applied certain hinted procedures which consisted principally of inquiries of management regarding the methods of measurement and presentation of the requned 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 fmancial statements that collectively compnse the Village of Key Biscayne s basic financial statements The accompanying combining financial statements listed in the table of contents are presented for purposes of additional analysis and ale not a requned part of the basic financial statements of the Village Similarly the accompanying schedule of expenditures of federal awards is presented for purposes of additional analysis as required by U S Office of Management and Budget Circular A 133 Audits of States Local Governments and Non Profit Organizations and is not a required part of the basic financial statements Such information has been subjected to the auditing procedures applied in the audit of the basic financial statements and m our opinion is fairly stated in all material respects in relation to the basic financial statements taken as a whole The information shown in the statistical section listed in the table of contents has not been subjected to the auditing procedures applied in the audit of the basic financial statements and accordingly we express no opinion thereon teasielca. - Ads, Miami Flonda December 26 2003 2 �ac i__S2[10/152" Accountants Advisors VI r-+ a z A Z 44 Z 0 -- U AA M A Et n E z W 2 W 0 z 44 2 6 e 6 F ( ,f 0 0U0CI 000000000 0C0 C,000o0 0 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 2003 Financial Highhghts • In the government wide financial statements the assets of the Village of Key Biscayne exceeded its liabilities at the close of the most recent fiscal year by $31 636 099 (net assets) • In the government wide financial statements the Village s total net assets decreased by $2 394 537 This decrease is attributable to the spending of cash on vanous construction related projects and the implementation of Governmental Accounting Standards Board (GASB) Statement No 34 Basic Financial Statements — and Management s Discussion and Analysis — for State and Local Governments • At the close of the current fiscal year the Village of Key Biscayne s governmental funds reported an ending fund balance of $5 071 733 a decrease of $2 052 786 in comparison with the pnor year This entire amount is either reserved or designated for spending at the Council s direction • The Village incurred $1 660 090 of new long term debt during the current fiscal year Overview of the Financial Statements This discussion and analysis are intended to serve as an introduction to the Village of Key Biscayne s basic financial statements The Village of Key Biscayne s basic financial statements compnse three components 1) government wide financial statements 2) find financial statements and 3) notes to the financial statements This report also contains other supplementary information in addition to the basic financial statements themselves Government -wide financial statements The government wide financial statements are designed to provide readers with a broad overview of the Village of Key Biscayne s finances in a manner similar to a pnvate 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 Village 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 m future penods (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 pnncipally 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 3 XreTieloalipa general government public safety public works buildmg planning & zoning and parks and recreation The government wide financial statements include only the Village of Key Biscayne itself as the Village does not have any component units that it is financially accountable for (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 find accounting to ensure and demonstrate compliance with finance related legal requirements The Village of Key Biscayne has two fund categories the governmental fluids and the enterprise finds Governmental Funds Governmental funds are used to account for essentially the same functions reported as governmental activities in the government wide financial statements However unlike the government wide financial statements, governmental fund financial statement focus on near term inflows and outflows of spend able resources as well as on balances of spendable resources available at the end of the fiscal year Such information maybe useful in evaluating a government s near term financmg 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 sunilar information presented for governmental activities in the government -wide financial statements By doing so readers may better understand the long term impact of the Village s near term financing decisions Both the governmental fund balance sheet and the governmental fund statement of revenues expenditures and changes in fund balances provide a reconciliation to facilitate this comparison between_ governmental funds and governmental activities. The Village of Key Biscayne maintains four governmental funds the general fund a special revenue fund and two capital projects funds The Village of ley 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 mamtams one type of propnetary 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 Stonnwater Solid Waste Collection and Sanitary Sewer Construction operations The basic proprietary fund financial statements can be found on pages 16 to 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 enterprise funds The Village maintains one fiduciary fund to account for the enterprise operation of its Police Officers and Firefighters Defined Benefit Pension Plan The basic fiduciary fund financial statements can be found on pages 19 and 20 of this report Notes to the basic financial statements The notes provide additional information that is essential to a full understanding of the data provided in the government wide and fund financial statements The notes to the financial statements can be found on pages 21 to 39 of this report 4 000000000 C to C 8 IL r a S CD C Cr C C Other Information In addition to the basic financial statements and accompanymg notes this report also presents certain required supplementary information concerning the Village s progress in funding its obligation to provide pension benefits to its employees Required supplementary mformation can be found on pages 40 to 43 of this report Government wide Financial Analysis As noted earlier net assets may serve over time as a useful indicator of a government s financial position In the case of the Village s assets exceeded liabilities by $31 636 099 at the close of the most recent fiscal year A portion of the Village s net assets $25 913 756 or 82 7 % reflects its investment in capital assets (e g land and equipment) less any related debt to acquire those assets that is still outstanding The Village of Key Biscayne uses these capital assets to provide services to citizens consequently these assets are not ( available for future spending Although the Village s investment in capital assets is reported net of related debt it should be noted that the resources needed to repay this debt must be provided from other sources f.r...� since the capital assets themselves cannot be used to liquidate these liabilities C 4w 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 As this is the first year that the Village is presenting government wide statements no comparison to the pnor year is being shown A comparative analysis will be provided when pnor year information is available Net Assets A summary of the Village's net assets is presented m Table A 1 and a summary of the changes m net assets is presented m Table A-2 Table A 1 Summary of net assets Current Assets Capital assets net Total assets Governmental Business type Total Activities Activities 2003 $ 7 086 983 $ 1 392 139 $ 8 479 122 46 299 091 8 885 441 55 184 532 53 386 074 10 277 580 63 663 654 Current liabilities 3 495 250 3 164 3 498 414 Noncurrent liabilities 21 994 322 6 843 444 28 837 766 Investment in capital assets net of related debt 23 889 001 2 024 755 25 913 756 Restricted 171 680 171 680 Unrestricted 3 835 821 1 388 975 5 224 796 Total net assets $ 27 896 502 $ 3 413 730 $ 31 310 232 5 Table A 2 Summary of changes in net assets Revenues Program Revenues Charges for services Operating grants and contributions Capital grants and contributions General Revenues Property taxes Utility taxes Pranduse taxes Intergovernmental Investment income and miscellaneous Total Revenues Expenses General government Public safety Parks and recreation Public works Building zoning and planning Debt Service Stormwater Solid Waste Collection Sanitary Sewer Construction Total Expenses Change in net assets before transfers Transfers Change in net assets before transfers Net Assets September 30 2002 Net Assets September 30 2003 Governmental Business type Total Activities Activities 2003 $ 1 297 724 99 830 421 085 11 317 161 2 251 876 611 502 776 869 282 847 17 058 894 5 825 199 9 608 735 826 695 963 676 1 252 012 1 064 028 19 540 345 (2 481 451) (9 737) (2 491 188) 30 387 690 $ 27 896 502 $ 844656 $ 2 142 380 99 830 421 085 11 317 161 2 251 876 611 502 776 869 22 163 305 010 866 819 17 925 713 634 361 273 076 6 288 5 825 199 9 608 735 826 695 963 676 1 252 012 1 064 028 634 361 273 076 6288 913 725 20 454 070 (46 906) (2 528 357) 9 737 (37 169) (2 528 357) 3 450 899 33 838 589 $ 3 413 730 $ 31 310 232 The Village s net assets decreased by $2 394 537 during the current fiscal year This decrease represents the results of operations for a full 12 month period with no capital contributions from outside sources Key elements of this decrease illustrated in the summary above 0000©©000000000000 Q 4 4I 41 41 4 1 6 r C" ea' LT LT r Revenues &Expenses Governmental Activ ties $18 000 000 $16 000 000 $14 000 000 $12 000 000 $10 000 000 $8 000 000 $6 000 000 $4 000 000 $2 000 000 $0 i � .J4.» ia. —,Yi3 kl'rl. xc � � k'���}' 4^ tW .£� n��'� � rv"'"V�'v $k. t✓ �3 od' e" ass es 51 y6 ys n o °% 4�',r ; 4s%9 yc1` e��'�t' 9` ,ol spa �}4 `oS�S� 602 s� .,3‘. .s Gds Gz ��z Revenues by Source — Governmental Activities 14/ Business -type Activities Busmess-type activities decreased the Village s net assets by $37 169 accountmg for 1 47 percent of the total reduction m the Village s net assets • In fiscal 2003 two of the three busmess type activities reflected operational profits • The Stormwater Utility Fund reflected an operating loss of $82 586 due mainly to depreciation expense m the atuount of $273 919 • The Solid Waste Collection Fund reported a profit of $41 320 • The Sanitary Sewer Construction Fund was dormant awaitmg a resumption of construction activity 7 Financial Analysis of the Government's Funds As noted earlier the Village of Key Biscayne uses fund accounting to ensure and demonstrate compliance with finance -related legal requirements Governmental funds The focus of the Village of key Biscayne s governmental funds is to provide information on near term inflows outflows and balances of spendable resources Such information is useful in assessinathe Village s financing requirements At the end of the current fiscal year fund balance of the general fund was $3 967 559, an increase of $36 851 in comparison with the pnor year All of this is either reserved or designated for specific uses (1) emergencies ($2 200,000) (2) building inspection costs ($275,000) (3) compensated absences ($334 644) (4) law enforcement seizures ($462 540) (5) special disaster relief ($135 000) (6) playing field acquisitions ($200,000) (7) additional fire position ($79 766) (8) working capital reserve ($126 058) and (9) community center equipment ($154 551) The general fund is the chief operating fund of the Village of Key Biscayne As a measure of the general fund s liquidity it maybe useful to compare total fund balance to total fund expenditures Total fund balance represents 25 4 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 2003 and 2002 is shown as follows Summary of condensed balance sheet 2003 2002 Total assets $ 4 789 294 $ 4 403 385 Total liabilities Fund balance Total liabilities and fund balance 821 735 $ 3 967 559 472 677 3 930 708 4 789 294 $ 4 403 385 Table B 2 Summary of condensed statement of revenues expenditures and changes in fund balance 2003 2002 Total revenues $ 16 632 613 $ 14 995 454 Total expenditures 15 647 703 14 497 752 Transfers Net (948 059) Net change m fund balance $ 36 851 $ 497 702 ®0®0®©©04040 0 Governmental funds decreased the Village of Key Biscayne fund balance by approximately $2 052 786 qr This net overall decrease was attributable to cash used to construct various components of the Village s Civic Center capital project All other governmental activities increased fund balance as follows 8 IIN ICI • Property taxes increased by $1 598 478 (16 7%) during the year Most of this increase is the product of additional luxury condominium umts completed and on the tax roll for the first time along with renovated homes with increased assessed values • Most departments increased 7 percent due to the Village s salary step program which m fiscal year 2003 reflected a 5 percent increase in salanes and a 2 percent increase for a cost of living increase • Debt service remamed fairly level compared to the pnor year 4a Fa, Taan r • The amount expended to the village Attorney decreased due to fewer costly lawsuits that were reflected m the fiscal 2002 statements For the most part increases m expenses closely paralleled mflation and growth m the scope of services General Fund Budgetary Highlights There were no differences between the ongmal and final budgeted amounts as the budget did not require any amendments There were also no supplemental appropnations for the fiscal year ended September 30 2003 Capital Assets As of September 30 2003 the Village s investment in capital assets for both governmental activities and business type activities amounted to $55 184 532 ($46 299 091 m governmental activities and $8 885 441 m busmess type activities) The total increase in capital assets for the fiscal year was as follows Major capital asset events during the fiscal year for governmental activities included the following • Completion of the Fire Station and Village Hall / Police Department Buildmgs • Completion of the Beach Park • Numerous street improvement programs • Completion of the Village Green Gazebo See Note 6 on page 30 of the notes to the basic financial statements for a detailed breakdown of capital assets by classification Long-term Debt At September 30 2003 the Village had bonded debt outstanding of $29 270 776 ($22 410 090 for governmental activities and $6 860 686 for business type activities) Of this amount $6 430 000 represents bonds secured solely by specified revenue sources (stormwater revenue bonds) The remainder are special obligation bonds that are secured by non ad Valorem revenues through covenants to budget and appropnate The Village s governmental activities debt increased by $245 090 from 2002 to 203 due to the additional borrowing required to construct the new community center facility Additional information on the Village s long term debt can be found m Note 7 on pages 31 to 35 of this report Economic Factors and Next Years Budgets and Rates • The unemployment rate for Miami Dade County is currently 7 3 percent which is a decrease from a rate of 7 4 percent a year ago This compares unfavorably to the state s average unemployment rate of 5 1 percent and the national average rate of 6 1 percent The Village s average rate remained unchanged at 3 2 percent • The occupancy rate of the Village s retail rentals and hospitality service industry has remained stable for the past several years • Inflationary trends in the region compare favorably to national indices All of these factors were considered in prepanng the Village of Key Biscayne s budget for the 2004 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 Village s finances Questions concerning any of the information provided m 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 ®0®6©©®©0004©0 • III III IJ D a a a 10 000 0Of)C) `) 00 000 0 CM > BASIC FINANCIAL STATEMENTS VILLAGE OF KEY BISCAYNE FLORIDA STATEMENT OF NET ASSETS SEPTEMBER 30 2003 Business Governmental type Activities Activities Total ASSETS Cash and cash equivalents $ 5 977 025 $ 154 574 $ 6 1 i 1 599 Investments 181 094 1023 927 1 205 021 Property taxes receivable 41 570 41 570 Other receivables 868 115 221 757 1 089 872 Interest receivable 11 060 11 060 Internal balances 19 179 (19 179) Net pension asset 325 867 325 867 Capital assets not being depreciated 23 919 097 463 915 24 383 012 Capital assets net of accumulated depreciation 22 379 994 8 421 526 30 801 520 Total assets 53 711 941 10 277 580 63 989 521 k)ono)<)3fo LIABILITIES Accounts payable and accrued liabilities Retamage payable Deferred revenue Noncurrent liabilities Due within one year Due in more than one year Total liabilities 1 478 235 502 162 13 134 3 164 1 481 399 502 162 13 134 1,501 719 17 242 1 518 961 21 994 322 6 843 444 28 837 766 25 489 572 6 863 850 32 353 422 NET ASSETS Invested in capital assets net of related debt 23 889 001 2 024 755 25 913 756 Restricted for law enforcement 171 680 171 680 Unrestricted 4 161 688 1 388 975 5 550 663 Total net assets $ 28 222 369 $ 3 413 730 $31 636 099 See notes to basic financial statements 11 VILLAGE OF KE Y BISCA YNE, 1{ L ORI DA STATEMENT OF ACTI VITIES FISC AL YE AR ENDED SEPTEMBER 30 2003 Functio ns/Programs Go vernmental activities G ene ral government Pu blic woiks Police Fire Parks and recreation Buildin g zon ing an d plan ning Interest on long term debt Total gov ernmental activ ities Busmess type activities Stonnwater Solid waste Sanitary sewer Total business type activ ities Total Pr ogram Revenues Charges Operati ng Capital for Giants a nd Giants and E xpenses Ser vices C ontributions Co ntributio ns $ 5 691 379 $1 034 247 $ 83 830 $ 963 676 4 787 090 110 215 16000 4 821 645 5 805 826 695 29 752 1 252 012 117705 1 064 028 19 406 525 1 297 724 99 830 634 361 273 076 6 288 913 725 $ 20 320 250 531 164 313 492 844 656 $2 142 380 421 085 421 085 Net (Expe nse) Reven ue and Cri ng es in Net Assets B usiness Gover nme ntal type Activities Activities Total $ (4 573 302) $ (542 591) (4 660 875) (4 815 840) (796 943) (1 134 307) (1 964 028) (17 587 886) $ 99 830 $ 421 085 (17 587 886) G en eral revenues Pro perty taxes Franchise fees based on gross receipts U tility taxes Intergovernmental Urnestrrcted inv estment earnings Miscellaneous Transfers Total genei al rev en ues Chan ge in n et assets Net assets begin nin g Net assets en ding See notes to basic finan cial statements 12 11 317 161 611 502 2 251 876 776 869 82 286 200 561 (9 737) 15 230 518 (2 357 368) 30 579 737 $ 28 222 369 (103 197) 40 416 (6 288) $ (4 573 302) (542 591) (4 660 875) (4 815 840) (796 943) (1 134 307) (1 064 028) (17 587 886) (103 197) 40 416 (6 288) (69 069) (69 069) (69 069) (17 656 955) 22 163 11 317 161 611 502 2 251 876 776 869 104 449 200 561 9 737 31 900 15 262 418 (37 169) (2 394 537) 3 450 899 34 030 636 $3 413 730 $31 636 099 eee ee eeee eeee ee eee eee eee ®eeoO Q000000©oc 0000 C trN C C r C C C- C C C C C C C C C C eTh C C ASSETS Cash and cash equivalents Investments Property taxes receivable Other receivables net Due from other funds Total assets LIABILITIES AND FUND BALANCES Liabilities Accounts payable and accrued habihries Retainage payable VILLAGE OF KEY BISCAYNE FLORIDA BALANCE SHEET GOVERNMENTAL FUNDS SEPTEMBER 30 2003 Capital Civic General Improvements Center $4 075 414 $ 1 803 49c $ 15 195 181 094 41 570 467 221 306 876 23 995 875 781 $4 789 294 $ 2 110 371 $ 890 976 Special Revenue (a nonmalor fund) $ 82 921 94 018 21 624 $ 198 563 $ 765 258 $ 31 316 $ 681 662 $ 502 161 Due to other funds 21 624 880 597 Deferred revenue 13 134 Compensated absences 21 719 Total liabilities 821 735 911 913 1 183 823 Fund balances Reserved Unreserved reported in Civic center fund General fund designated Total fund balances Total liabilities and fund balances 2 967 382 1 000 177 1 198 458 198 563 (292 847) 3 967 559 1 198 458 (292 847) 198 563 $ 4 789 294 $ 2 110 i71 $ 890 976 $ 198 563 Amounts reported for governmental activities m the statement of net assets are different because Capital assets used in governmental activities are not financial resources and therefore ai e not reported in the funds A negative (NPO) net pension obligation is not considered to represent a financial asset and therefore is not reported m the governmental funds Long term liabilities mcludmg bonds payable are not due and payable in the current period and therefore not reported in the funds Net assets of governmental activities See notes to basic financial statements 13 Total Governmental Funds $ 5 977 025 181 094 41 570 868 115 921 400 7 989 204 $ 1 478 236 502 161 902 221 13 134 21 719 2 917 471 4 364 403 (292 847) 1 000 177 5 071 733 46 299 091 325 867 (23 474 322) $ 28 222 369 VILLAGE OF KEY BISCAYNE FLORIDA STATEMENT OF REVENUES EXPENDITURES AND CHANGES IN FUND BALANCES GOVERNMENTAL FUNDS FISCAL YEAR ENDED SEPTEMBER 30 2000 Capital General Improvements Special Revenue Total Civic (a nonmajor Governmental Center fund) Funds Revenues Property taxes $11 317 161 $ $ $ Utility taxes 2 251 876 Franchise fees 611 502 Licenses and permits 970 001 Intergovernmental 999 391 Charges for services 327 723 Interest 55 129 12 031 15 126 Grants 99 830 Other 200 000 561 198 563 Total revenues 16 632 613 212 031 15 687 198 563 17 058 894 $ 11 317 161 2 251 876 611 502 970 001 999 391 327 723 82 286 99 830 399 124 Expenditures Current General government 1 829 501 Fire Rescue 4 046 269 Police 4 305 474 Public works 963 247 Building zoning and planning 1 245 119 Parks and recreation 782 065 Capital outlay Debt service Principal 1 415 000 Interest and fiscal charges 1 061 028 Total expenditures 15 647 703 Excess (deficiency) of revenues over expenditures 984 910 461 303 4 647 027 3 000 461 303 4 650 027 1 829 501 4 046 269 4 305 474 963 247 1 245 119 782 065 5 108 330 1 415 000 1 064 028 20 759 033 (249 272) (4 634 340) 198 563 (3 700 139) Other financing sources (uses) Transfers in 330 938 322 Transfers out (948 389) Bonds issued Total other financing sources (uses) Net change in fund balances Fund balances begmnmg Fund balances ending 1 657 090 (948 059) 938 322 1 657 090 938 652 (948 389) 1 657 090 1 647 353 36 851 689 050 (2 977 250) 198 563 (2 052 786) 3 930 708 509 408 2 684 403 7 124 519 $ 3 967 559 $ 1 198 458 $ (292 847) $ 198 563 $ 5 071 733 See notes to basic financial statements 14 ail • Q Q Q 0 0 C m 0 0 0 0 0 0 6 0 0 0 0 0 1 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 2003 Amounts reported for governmental activities in the statement of activities (Page 8) are different because Net change in fund balances total governmental funds (Page 14) $ (2 052 786) Governmental funds report capital outlays as expenditures However in the statement of activities the cost of those assets is allocated over their estimated useful lives and reported as depreciation expense This is the amount by which capital outlays exceeded depreciation in the current period The details of the difference are as follows Capital outlay Depreciation expense Net adjustment The issuance of long term debt provides current financial resources to governmental funds while the repayment of the pnncipal of long term debt consumes the current financial resources of governmental funds The detail of the differences me as follows Debt payments 2002 revenue bonds issued Net adjustment Some expenses reported in the statement of activities do not require current financial resources and therefore are not reported as expenditures in governmental funds $ 1 650 867 (779 947) 1 41 D 000 $ (1 660 090) 870 920 (245 090) The details of the difference is Compensated absences (1 064 232) Change in net assets of governmental activities (Page 12) $ (2 491 188) See notes to basic financial statements 15 VILLAGE OF KEY BISCAYNE FLORIDA STATEMENT OF NET ASSETS PROPRIETARY FUNDS SEP'EMBER 30 200D ASSETS Busmess type Activities Enterprise Funds Stormwater Utility Nonmajor System Funds Totals Current assets Cash and cash equivalents $ 81 116 $ 73 458 $ 154 574 Investments 1 023 927 1 023 927 Receivables net 101 109 120 648 221 757 Interestieceivable 11 060 11 060 Total current assets 1 217 212 194 106 1 411 318 Noncurrent assets Capital assets not being depreciated Capital assets net of accumulated depreciation Total noncurrent assets Total assets LIABILITIES Current liabilities Accounts payable and accrued liabilities Due to other funds Current portion of revenue bonds payable Total current liabilities Noncurrent liabilities Revenue bonds Revolving loan Total noncurrent liabilities Total liabilities 463 915 463 915 8,421,526 8,421,526 8 421 526 463 915 8 885 441 9 638 738 658021 10 296 759 3 164 19 179 17 242 3 164 19 179 17 242 22 343 17 242 39 585 6 430 000 - 6 430 000 413 444 413 444 6 430 000 413444 6 843 444 6 452 343 430 686 6 883 029 NET ASSETS Invested m capital assets net of related debt 1 991 526 33 229 2 024 755 Unrestricted 1 194 869 194 106 1 388 975 Total net assets $ 3 186 395 $ 227 335 $ 3 413 730 See notes to basic financial statements 16 Q®0000000000000 S • r t C 6 C 11 VILLAGE OF KEY BISCAYNE FLORIDA STA I EMENT OF REVENUES EXPENSES AND CHANGES IN NET ASSETS PROPRIETARY FUNDS FISCAL YEAR ENDED SEPTEMBER 30 2003 Business type Activities Enterprise Funds Stormwater Utility Nonmalor System Funds Totals Operating revenues Charges for services $ 531 164 $ 313 492 $ 844 656 Operating expenses General and administrative 86 828 273 076 359 904 Depreciation 273 920 273 920 Total operating expenses 360 748 273 076 633 824 Operating income 170 416 40 416 210 832 onoonc)on ik Non operating revenues (expenses) Interest income 20 612 1 551 22 163 Interest expense (273 613) (6 288) (279 901) Total non operating revenues (expenses) (253 001) (4 737) (257 738) Income (loss) before transfers (82 585) 3D 679 (46 906) Transfers in 10 067 10 067 Transfers out (330) (330) Net mcome (82 585) 45 416 (37 169) Net assets beginning 3 268 980 181 919 3 450 899 Net assets ending $ 3 186 395 $ 227 335 $ 3 413 730 See notes to basic financial statements 17 VILLAGE OF KEY BISCAYNE FLORIDA STATEMENT OF CASH FLOWS PROPRIETARY FUNDS FISCAL YEAR ENDED SEP 1 EMBER 30 2003 Cash flows from operating activities Receipts from customers and users Payments to suppliers Net cash provided (used) by operating activities Cash flows from non capital financing activities Transfers from other funds Transfers to other funds Net cash provided by non capital financing activities Cash flows film capital and related financing activities Net payments from revolving loan Prmcipal paid on capital debt Interest paid on capital debt Net cash used by capital and related financing activities Cash flows from investing activities Purchase of investments Interest received Net cash provided by investing activities Net increase (decrease) in cash and cash equivalents Cash and cash equivalents beginning Cash and cash equivalents ending Reconciliation of operating income to net cash provided by operating activities Operating income Adjustments to reconcile operating income to net cash provided (used) by operating activities Depreciation Changes in operating assets and liabilities (Increase) decrease in Accounts receivable Interest receivable Increase (decrease) in Accounts payable Due to other funds Total adjustments Net cash provided (used) by operating activities Business type Activities Enterprise Funds Stormwater Utility Nonmalor System Funds Totals $ 632 864 $ 261 528 $ 894 392 (86 828) (273 076) (359 904) 546 036 (11 548) 534 488 10067 10067 (330) (330) 9 737 9 737 (339 780) (339 780) (195 000) (195 000) {273 613) (6 288) (279 901) (468 613) (346 068) (814 681) (16 941) (16 941) 20 611 1 551 22 162 3 670 1 551 5 221 81 093 (346 328) (265 235) 23 419786 419809 $ 81 116 $ 73 458 $ 154 574 $ 170416 $ 40416 $ 210 832 273 920 273 920 126 035 (72 276) 53 759 (1 948) (1 948) 3 164 3 164 (25 551) 20 312 (5 239) 375 620 (51 964) 323 656 $ 546 036 $ (1 1 548) $ 534 488 See notes to basic financial statements 18 0000000000000 C VILLAGE OF KEY BISCAYNE FLORIDA STATEMENT OF FIDUCIARY NET ASSETS PENSION TRUST FUND SEPTEMBER 30 2003 ASSETS t ^ Mutual fund investments $ 3 0I5 954 Other assets 283 802 Total assets 3 299 756 LIABILITIES r' Liabilities NET ASSETS O Held in trust for pension benefits $ 3 299 756 C C 00000000020 See notes to basic financial statements 19 VILLAGE OF KEY BISCAYNE FLORIDA STATEMENT OF CHANGES IN FIDUCIARY NET ASSETS PENSION TRUST FUND FISCAL YEAR ENDED SEPTEMBER DO 2003 ADDITIONS Contributions Plan members $ 830 411 State 199 273 Total contributions 1 029 684 Investment earnings Interest and dividends Net increase in the fair value of investments Total investments earnings Total additions DEDUCTIONS Distributions Administrative expenses Total deductions Change in net assets Net assets beginning Net assets ending See notes to basic financial statements 20 6 909 307 939 314 848 1 344 532 109 418 43 160 152 578 1 191 954 2 107 802 $ 3 299 756 ®©©©©©0©©©0 4, 4, 4, 4, 3 • 3 3 3 C a II 1 `J NOT ES TO BASIC FINANCIAL STATEMENTS 7- 6 f "\ C C C 0 000000000 C VILLAGE OF KEY BISCAYNE FLORIDA NOTES TO BASIC FINANCIAL STATEMENTS FISCAL YEAR ENDED SEPTEMBER i0 2003 NOTE 1 SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES The Village of Key Biscayne Flonda (the Village) located in Miami Dade County is a political subdivision of the State of Florida The Village which was incorporated in 1991 operates under a Council Manager form of government In addition to the general government function the Village provides its residents with public works public safety (police and fire) parks and recreation building zoning and planning functions sanitation and stoimwater management The Village does not provide educational of hospital facilities those services are provided by the Miami Dade County School Board and Miami Dade County respectively The financial statements of the Village have been prepared in conformity with accounting principles generally accepted in the United States (GAAP) as applied to governmental units The Governmental Accounting Standards Board (GASB) is the accepted standard setting body for establishing governmental accounting and financial reporting principles For the fiscal year ended September 30 2003 the Village adopted the new accounting and financial reporting requirements of GASB Statement No 34 Basic Financial Statements — and Management s Discussion and Analysis — for State and Local Governments Statement No 37 Basic Financial Statements — and Management s Discussion and Analysis — for State and Local Governments Omnibus an amendment of GASB Statements No 21 and 34 Statement No 38 Certain Financial Statement Note Disclosures and Interpretation No 6 Recognition and Measurement of Certain Liabilities and Expenditures in Governmental Fund Financial Statements Statement No 34 (as amended by Statement No 37) represents a very significant change in the financial reporting model used by state and local governments As a result an entirely new financial presentation format has been provided 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 Statement No 14 The Financial Reporting Entity which establishes standards for defining and reporting on the financial reporting entity The definition of the financial reporting entity is based upon the concept that elected officials are accountable to their constituents for their actions One of the objectives of financial reporting is to provide users of financial statements with a basis for assessing the accountability of the elected officials The financial reporting entity consists of the Village organizations for which the Village is financially accountable and other organizations for which the nature and significance of their relationship with the Village are such that exclusion would cause the reporting entity s financial statements to be misleading or incomplete The Village is financially accountable for a component unit if it appoints a voting majority of the organization s governing board and it is able to impose its will on that organization or there is a potential for the organization to provide specific financial benefits to or impose specific financial burdens on the Village Based upon the application of these cnteria 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 21 VILLAGE OF KEY BISCAYNE FLORIDA NOTES TO BASIC FINANCIAL STAIEMENTS (Continued) NOTE 1 SUNLMARY OF SIGNIFICANT ACCOUNTING POLICIES (Continued) B Government Wide and Fund Financial Statements (Contmued) 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 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 pnvileges provided by a given function or segment and 2) grants and contributions that are restncted 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 All remaining nonmajor governmental funds are aggregated and reported as other governmental funds The Village has only one nonmaj or governmental fund (the Special Revenue Fund) 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 propnetary 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 penod 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 penod are all considered to be susceptible to accrual and so have been recognized as revenues of the current fiscal period All other revenue items are considered to be measurable and available only when cash is received by the Village 22 ®eeeeeee®®eeeeee®o©Oo©o©oo©Q 4D C r (^ C 0 C C r C C C C C C VILLAGE OF KEY BISCAYNE FLORIDA NOTES TO BASIC FINANCIAL STATEMENTS (Continued) NOTE 1 SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES (Continued) C Measurement Focus Basis of Accounting and Financial Statement Presentation (Continued) The Village reports the following major governmental funds The General Fund is the Village s primary operating fund It accounts for all financial resources of the general government except those required to be accounted for in another fund The Capital Improvement Fund accounts for the acquisition or construction of various major capital projects The Civic Center Fund accounts for the construction of the Village s civic center which includes administrative offices fire and police facilities and a community center The Village also reports the following nonmajor government fund The Special Revenue Fund accounts for the revenues received from the transportation surtax and expenditures for related transportation costs The Village reports the following major propnetary fund in the basic financial statements The Stormwater Utility Fund accounts for the construction and maintenance of the Village s stormwater system Additionally the Village reports the following fund types The Pension Trust Fund is used to account for the Village s single employer defined benefit pension plan covering substantially all of its police officers and firefighters Private sector standards of accounting and financial reporting issued prior to December 1 1989 generally are followed in both the government wide and proprietary fund financial statements to the extent that those standards do not conflict with or contradict guidance of the Governmental Accounting Standards Board The Village has the option of following subsequent private sector guidance for their business type activities and enterprise funds subject to this same limitation The Village has elected not to follow subsequent private sector guidance As a general vile the effect of mterfund 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 of the Village Elimination of these charges would distort the direct costs and program revenues reported for the various functions concerned 23 s VILLAGE OF KEY BISCAYNE FLORIDA NOTES TO BASIC FINANCIAL STATEMENTS (Continued) NOTE 1 SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES (Continued) C Measurement Focus Basis of Accounting and Financial Statement Presentation (Continued) 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 non operating items Operating revenues and expenses generally result from providing services and producing and delivering goods in connection with a proprietary fund s prmcipal 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 D Assets Liabilities and Net Assets or Equity 1 Deposits and Investments The Village s cash and cash equivalents include cash on hand time and demand deposits and short term investments with original maturities of three months or less from the date of acquisition and investments with the State Board Investment Pool Short term investments except the State Board Investment Pool are reported at cost which approximates fair value The Investment Pool is recorded at its value of the pool shares (2A 7 Pool) which is fair value The nature of investments is governed by the provisions of Flonda Statutes Section 218 Under this statute authorized investments are limited unless otherwise authorized by law or ordinance to the local government surplus funds trust fund, money market funds direct or unconditionally guaranteed obligations of the United States Government obligations of certain govs-iumental agencies interest bearing time deposits or savings accounts 2 Receivables and Payables Activity between funds that are representative of lending/borrowing arrangements outstanding at the end of the fiscal year are referred to as due to/from other funds Any residual balances outstanding between the governmental activities and business type activities are reported in the government wide financial statements as internal balances 24 ®®©©e®©©©©Qo4©©©a o 0 ®®00®060 0 4D C+ C C a C VILLAGE OF KEY BISCAYNE FLORIDA NOTES TO BASIC FINANCIAL STATEMENTS (Continued) f' f l r I' NOTE 1 SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES (Continued) D Assets Liabilities and Net Assets or Equity (Continued) 3 Capital assets Capital assets which include property plant and equipment and certain 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 5750 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 The costs of normal maintenance and repairs that do not add to the value of the asset or matenally extend assets lives are not capitalized Major outlays for capital assets and improvements are capitalized as pro] ects are - constructed Interest mcurred 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 2003 Capital assets of the Village are depreciated using the straight line method over the following estimated useful lives v J Assets Years rte^ o Buildings 25 50 Improvements other than buildings 10 50 Equipment 10 o Furniture and fixtures 10 )02000( 4 Compensated absences It is the Village s policy to permit employees to accumulate within certain limits earned but unused vacation time and sick leave which will be paid to employees upon separation from Village service All vacation and sick leave pay is accrued when incurred in the government wide and proprietary fund financial statements In the governmental funds a liability is recorded only for vacation and sick leave payouts for employee separations occurring within 60 days subsequent to the year end 25 VILLAGE OF KEY BISCAYNE FLORIDA NOTES TO BASIC FINANCIAL STATEMENTS (Continued) NOTE 1 SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES (Continued) D Assets Liabilities and Net Assets or Equity (Continued) 5 Long term obligations In the government wide financial statements and propnetary 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 propnetary 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 stiaight 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 penod 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 6 Use of Estimates The preparation of financial statements in conformity with accounting principles generally accepted in the United States requires management to make estimates and assumptions that affect the amounts of assets liabilities disclosures of contingent liabilities revenues and expenditures/expenses reported in the financial statements and accompanying notes These estimates include assessing the collectibility of receivables the realization of pension obligations and the useful lives of capital assets Although these estimates as well as all estimates are based on management s Imowledge of current events and actions it may undertake in the future they may ultimately differ from actual results 7 Fund Equity In the fund financial statements govemmental funds report reservations of fund balance for amounts that are not available for appropnation 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 26 Q00000000©000C VILLAGE OF KEY BISCAYNE FLORIDA NO 1 ES TO BASIC FINANCIAL STATEMENTS (Continued) NOTE 2 DEPOSITS AND INVESTMENTS Deposits In addition to insurance provided by the Federal Depository Insurance Corporation all deposits are held in banking institutions approved by the State Treasurer of the State of Florida to hold public funds Under Flonda 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 depositones would be responsible for covenng any resulting losses Accordingly all amounts reported as deposits are insured or collateralized with secunties held by the entity or its agent in the entity s name Investments The Village is authonzed to invest in obligations of the U S Treasury its agencies instrumentalities and the Local Government Surplus Funds Trust Fund administered by the State Board of Administration The investments follow the investment rules defined in Florida Statutes Chapter 215 The mvestment 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 nsk to which the funds are exposed The Local Government Surplus Funds Trust Fund is governed by Ch 19 7 of the Florida Administrative Code which identifies the Rules of the State Board of Administration These rules provide guidance and establish the general operating procedures for the administration of the Local Government Surplus Funds Trust Fund Additionally the Office of the Auditor General performs the operational audit of the activities and investments of the State Board of Administration The Local Government Surplus Funds Trust Fund is not a registrant with the Securities sand Exchange Commission (SEC) however the Board has adopted operating procedures consistent with the requirements for a 2a 7 fund C C C C C C The Villages investment balances which are camed at fair value are classified as credit risk category 1 insured or registered or securities held by the entity or its agent in the entity s name were as follows Category 1 Repurchase agreements $ 2 724 484 Investments not subject to categonzation Mutual funds 3 015 954 State Board of Administration investment pool 173 608 $5914046 27 I i VILLAGE OF KEY BISCAYNE FLORIDA NOTES TO BASIC FINANCIAL STATEMENTS (Continued) NOTE 2 DEPOSITS AND INVESTMENTS (Continued) Investments (Continued) A reconciliation of cash and investments as shown on the statement of net assets is as follows Deposits (including cash and certificates of deposit) $ 4 438 528 Investments 5 914 046 Total deposits and investments $10 352 574 Cash and cash equivalents pnmary government Investments primary government Total pnmary government Investments fiduciary funds Grand total NOTE 3 RECEIVABLES $ 6 131 599 1 205 021 7 336 620 3 015 954 $10 352 574 Receivables as of September 30 2003 for the Village s individual major funds nonmajor funds internal service funds and fiduciary funds in the aggregate including the allowances for uncollecttble accounts are as follows Nonmaj or Capital Stol ut and Other General Improvements water Funds Total Customers billed $ $ 101 109 140 535 $ 241 644 Property taxes 41 570 41 570 Intergovernmental 467 221 306 876 94 018 868 115 Gross receivables 508 791 306 876 101 109 234 553 1 151 329 Less allowance for uncollectibles 19 887 I9 887 Net total receivables $ 508 791 $ 306 876 $ 101 109 $ 214 666 $1 131 442 10®400©000000©C) 0 0 0 C 28 VILLAGE OF KEY BISCAYNE FLORIDA tea, 00000000000070.' OGOOC NO1 ES TO BASIC FINANCIAL STATEMENTS (Continued) NOTE 4 PROPERTY TAXES Property values are assessed on a county wide basis by the Miami Dade County Pioperty Appraiser as of January 1 the hen date of each year and are due the following November 1 Taxable value of property within the Village is certified by the Property Appraiser and the Village levies a tax millage rate upon the taxable value which will provide revenue required for the fiscal year beginning October 1 Property taxes levied each November 1 by the Village and all other taxing authorities within the County are centrally billed and collected by Miami Dade County with remittances to the Village of their proportionate share of collected taxes Taxes for the fiscal year beginning October 1 are billed in the month of November subject to a 1% per month discount for the period November through February and are due no later than March 31 On Apnl 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 2003 there were no matenal delinquent taxes NOTE 5 INTERFUND RECEIVABLES PAYABLES AND 1'RANSFERS The composition of mterfund balances as of September 30 2002 is as follows Receivable Fund Due from/to other funds General Civic Center Nonmajor governmental Interfund transfers Transfers out General fund Nomnalor funds Total transfers out Payable Fund Storm water utility Capital Improvement Capital Improvement General Fund Tiansfers In Amount $ 19 179 4 816 875 781 21 624 $ 921 400 General Capital Fund Improvement Nonmai or Total $ $ 938 322 $ 10 067 $ 948 389 330 330 $ 330 $ 938 322 $ 10 067 $ 948 719 29 VILLAGE OF KEY BISCAYNE FLORIDA NOTES TO BASIC FINANCIAL STATEMENTS (Continued) NOTE 6 CAPITAL ASSETS Capital asset activity for the year ended September 30 2003 was as follows Beginning Balance Increases Ending Decreases Balance Governmental activities Capital assets not being depreciated Land $21 833 837 $ $ $21 833 837 Construction in progress 12 266 787 2 085 260 12 266 787 2 085 260 Total capital assets not being depreciated 34 100 624 2 085 260 12 266 787 23 919 097 Capital assets being depreciated Buildings 814 668 12 266 787 627 500 12 453 955 Improvements other than buildings 10 994 376 10 994 376 Furniture fixtures and equipment 2 788 522 1 165 009 971 902 2 981 629 Total capital assets being depreciated 14 597 566 13 431 796 1 599 402 26 429 960 Less accumulated depreciation for Buildings Improvements Furniture fixtures and equipment Total accumulated depreciation Total capital assets being depreciated net 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 Total capital assets being depreciated Less accumulated depreciation for Stormwater utility system Total accumulated depreciation Total capital assets being depreciated net Business type activities capital assets net 29 946 224 058 1 972 186 227 074 1 267 887 328 815 3 270 019 779 947 11 327 547 12 651 849 1 599 402 $45 428 I71 $14 737 109 $13 866 189 $ 373 249 $ 90 666 $ 373 249 90 666 10 056 660 10 056 660 1 361 214 1 361 214 8 695 446 $ 9 068 695 273 920 273 920 (273 920) $ (183 254) $ 254 004 2 199 260 1 596 702 4 049 966 22 379 994 $ 46 299 091 $ 463 915 463 915 10 056 660 10 056 660 1 635 134 1 635 134 8 421 526 $ 8 885 441 00000000000000 S C ®00®00® 30 VILLAGE OF KEY BISCAYNE, FLORIDA C NOTES TO BASIC FINANCIAL STATEMENTS (Continued) ( r NOTE 6 CAPITAL ASSETS (Continued) Depreciation expense was charged as functions/programs of the pnmary government as follows Governmental activities General government Police Fire Public works Building zoning and planning Parks Total depreciation expenses Business type activities Stonnwater Sanitary sewer NOTE 7 LONG PERM DEBT governmental activities $ 296 927 176 888 254 180 429 6 89i 44 630 $ 779 947 $ 273 920 $ 273 920 The following is a summary of changes in long term liabilities of the Village for governmental activities for the year ended September 30 2003 Beginning Ending Due Within Balance Additions Reductions Balance One Year Governmental Activities Bonds payable Land acquisition revenue bonds Senes 1993 $ 2 165 000 $ $1 060 000 $ 1 105 000 $1 105 000 Land acquisition and capital improvement revenue bonds Senes 1999 10 000 000 355 000 9 645 000 375 000 Land acquisition and capital improvement revenue bonds Senes 2000 10 000 000 10 000 000 Capital improvement bonds Senes 2002 1 660 090 1 660 090 Total bonds payable 22 165 000 I 660 090 1 415 000 22 410 090 1 480 000 Other liabilities Compensated absences 1 312 108 226 157 1 085 951 21 719 Total other liabilities 1 312 108 226 157 1 085 951 21 719 Governmental activities long term liabilities $23 477 108 $1 660090 $ 1 641 157 $23 496 041 $ 1 501 719 31 VILLAGE OF KEY BISCAYNE FLORIDA NOTES TO BASIC FINANCIAL STATEMENTS (Continued) NOTE 7 LONG TERM DEBT (Continued) Revenue Bonds Land Acquisition Revenue Bonds On December 14 1993 the Village issued $9 200 000 Land Acquisition Revenue Bonds Series 1993 the proceeds of which were used for the acquisition of the Village Green property The bonds matured on December 15 2003 The Village has pledged public service tax revenues to secure payment of the prmcipal and interest on the bonds The bonds are due in annual principal mstallments Interest accrues at 4 36% per amwum Debt service requirements to maturity are as follows Principal Interest Total Fiscal year ending September 30 2004 $1 I05 000 $ 24 089 $1 129 089 Land Acquisition and Capital Improvement Revenue Bonds On July 23 1999 the Village issued $10 000 000 Land Acquisition and Capital Improvement Revenue Bonds Series 1999 the proceeds of which were used for the acquisition of property and financing of the construction of the Civic Center project The bonds mature on July 23 2019 The Village has pledged non ad valorem revenues to secure payment of the principal and interest on the bonds The bonds are due in annual pnncipal installments ranging from $355 000 in fiscal year 2004 to $815 000 in fiscal year 2020 Interest accrues at 4 715 /o per annum Debt service requirements to maturity are as follows Principal Interest Total Fiscal year ending September 30 2004 $ 375 000 $ 445 921 $ 820 921 2005 390 000 427 886 817 886 2006 410 000 409 026 819 026 2007 430 000 389 223 819 223 2008 455 000 368 359 823 359 2009 2013 2 630 000 1490 412 4 120 412 2014 2018 3 365 000 786 816 4 151 816 2019 2020 1 590 000 75 912 1 665 912 $ 9 645 000 $4 393 556 $14 038 556 00000000©©00 S • 0 • S S C C 32 VILLAGE OF KEY BISCAYNE FLORIDA r e eTh ty C C C 0 0 I- o C C C' NOTES TO BASIC FINANCIAL STATEMENTS (Continued) NOTE 7 LONG TERM DEBT (Continued) Revenue Bonds (Continued) Capital Improvement Revenue Bonds On July 11 2000 the Village issued a second senes of $10 000 000 Capital Improvement Revenue Bonds Senes 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 pnncipal and interest on the bonds The bonds are due in annual principal installments iangmg from $380 000 in fiscal year 2005 to $860 000 in fiscal year 2021 Interest accrues at 5 24% per annum Debt service requirements to maturity are as follows Principal Interest Total Fiscal year ending September 30 2004 $ $ 524 000 $ 524 000 2005 380 000 514 044 894 044 2006 400 000 493 608 893 608 2007 420 000 472 124 892 124 2008 440 000 449 592 889 592 2009 2013 2 580 000 1 865 964 4 445 964 2014 2018 3 330 000 1 095 946 4 425 946 2019 2021 2 450 000 197 024 2 647 024 $10000000 $5 612 302 $15 612 302 Capital Improvement Revenue Bonds On November I 2002 the Village issued Capital Improvement Revenue Bonds Senes 2002 The issuance was established similar to bond anticipation notes where the principal amount is the lesser of $9 987 551 or the advances made under the bond Only the amount advanced becomes an obligation of the Village The entire $9 987 551 is expected to be advanced by May 1 2004 as the civic center project will be near completion As of September 30 2003 $1 660 090 had been drawn As of issuance of these financial statements $4 152 993 had been drawn down Therefore we have presented the debt service amortization schedule for the entire amount of the bonds as this provides relevant data on the Village s obligation The bonds mature on November 1 2022 Interest is due quarterly at a rate of 3 95°/ up to November 1 2012 From November 1 2012 to maturity the interest rate will become a variable rate based on certain indices 33 VILLAGE OF KEY BISCAYNE FLORIDA NOTES TO BASIC FINANCIAL STATEMENTS (Continued) NOTE 7 LONG-TERM DEBT (Continued) Revenue Bonds (Continued) Capital Improvement Revenue Bonds (Continued) Debt service to maturity is as follows Pnncipal Interest Total Fiscal year ending September 30 2004 $ 95 659 $ 152 226 $ 247 885 2005 391,298 349 901 741 199 2006 405 536 335 663 741 199 2007 420 292 320 907 741 199 2008 435 584 305 615 741 199 2009 2013 2 427 514 1 278 480 3 705 994 2014 2018 2 902 484 803 510 3 705 994 2019 2022 2 909 484 240 611 3 150 095 $ 9 987 851 $ 3 786 913 $13 774 764 The following is a summary of changes in long term liabilities of the Village for business type activities for the yeas ended September 30 2003 Due Beginning Ending Within Balance Additions Reductions Balance One Year Business type Activities Bonds and loan payable Stormwater utility revenue bonds $ 6 625 000 $ $ 195 000 $ 6 430 000 $ Revolvmg loan 770 466 339 780 430 686 17 242 Total bonds and loan payable 7 395 466 534 780 6 860 686 17 242 Business type activities Long term liabilities $7 395 466 $ $ 534 780 $ 6 860 686 $ 17 242 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 to secure payment of the pnncipal and interest on the bonds The bonds are due in annual pnncipal installments on October 1 ` ranging from $195 000 in fiscal year 2004 to $595 000 in fiscal year 2020 The payment due on October 1 2003 of $185 000 was paid on September 30 2002 Interest accrues at 4 13°/ per annum 34 000©©©©©00©0©© 0 0 C C Q C VILLAGE OF KEY BISCAYNE FLORIDA i NOTES TO BASIC FINANCIAL STATEMENTS (Continued) NOTE 7 LONG-TERM DEBT (Continued) Revenue Bonds (Continued) Stormwater Utility Revenue Bonds (Continued) Debt service requirements to maturity are as follows Principal Interest Total Fiscal year ending September 30 2004 $ $ 273 613 $ 273 613 2005 205 000 265 558 470 558 2006 215 000 257 093 472 093 2007 225 000 248 213 473 213 2008 235 000 238 921 473 921 2009 2013 1 930 000 994 D04 2 924 504 2014 2018 2 45D 000 554 659 3 009 659 2019 2020 1 165 000 72 688 1 237 688 $ 6 430 000 $ 2 905 248 $ 9 335 248 Revolving Loan In June 1996 the Village entered into a loan agreement in the amount of $887 983 for the financing of the planning and engineenng of the proposed sanitary sewer construction project under a State Revolving Fund Loan The proceeds were received m 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 Pnncipal outstanding as of September 30 2002 is $770 466 In November 2002 the Village prepaid approximately $373 000 of its revolving loan with the State of Flonda for its sanitary sewer construction project which brought the outstanding balance to $437 548 prior to the first required payment on April 15 2003 Principal Interest Total Fiscal year ending September 30 2004 $ 17 242 $ 10 892 $ 28 134 2005 17 686 10 448 28 134 2006 18 142 9 993 28 135 2007 18 609 9 525 28 134 2008 19 088 9 046 28 134 2009 2013 103 077 37 593 140 670 2014 2018 117 058 23 613 140 671 2019 2022 119 784 7 736 127 520 $ 430 686 $ 118 846 $ 549 532 35 VILLAGE OF KEY BISCAYNE FLORIDA NOTES TO BASIC FINANCIAL STATEMENTS (Continued) NOTE 8 COMMITMENTS AND CONTINGENCIES Construction Commitments As of September 30 2003 the Village had outstanding construction commitments of approximately $11 579 270 to complete the civic center project 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 matenal adverse effect on the financial condition of the Village Risk Management The Village is exposed to vanous risks of loss related to torts theft of damage to and destruction of assets errors and omissions and natural disasters for which the Village carves commercial insurance There was no reduction in insurance coverage from coverages in the pnor year and there were no settlements that exceeded insurance coverage for each of the past three years Grants Contingency Federal and State programs in which the Village participates were audited in accordance with the provision of regulatory requirements and grantor agencies Pursuant to those provisions certain programs were tested for compliance with applicable grant requirements While no matters of noncompliance were disclosed by the audit government agencies may subject grant programs to additional compliance tests that may result in disallowed costs In the opinion of management future disallowances of grant expenditures if any would not have a material adverse effect on the financial condition of the Village NOTE 9 RESERVED/DESIGNATED FUND BALANCES As of September 30 2003 fund balances in the governmental funds have been reserved or designated for the following purposes Reserved Fund Balances General fund Special disaster relief $ 135 000 Law enforcement services 171 680 Compensated absences 334 644 Emergencies 2 200 000 Working capital 126 058 $ 2 967 382 36 000000000000 o a t V S e a 4 S S S I It S C C C C Q Q VILLAGE OF KEY BISCAYNE, FLORIDA NOTES TO BASIC FINANCIAL STATEMENTS (Continued) NOTE 9 RESERVED/DESIGNATED FUND BALANCES (Continued) 000000000 Designated Fund Balances General fund Inspector fees Recreation center equipment Playing fields Additioal fire position Law enforcement activities NOTE 10 DEFINED CONTRIBUTION PLANS $ 275 000 154 551 200 000 79 766 290 860 $1 000 177 The Village as a single employer contributes to the Village of Key Biscayne Money Purchase Plans which are defined contribution plans created in accordance with Internal Revenue Code Section 401(a) Under one Plan which is available to Village employees the Village contributes 12% and the employees contribute 6% Under the second plan which is available only to sworn 01 certified pohce 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 10) were no longer eligible to contribute to the 401(a) plan Employer contributions for the fiscal year ended September 30 2003 were approxunately $209 000 while the employee contributions were approximately $103 600 Amendments to the Plan must be authonzed by the Village Council NOTE 11 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 2001 The PERS does not issue a separate audited 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 /o (changed from 2°/ in the prior year) 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 authonzed by the Village Council 37 VILLAGE OF KEY BISCAYNE FLORIDA NOTES TO BASIC FINANCIAL STATEMENTS (Continued) NOTE 11 DEFINED BENEFIT PENSION PLAN (Continued) Plan Description (Continued) Members are vested after 5 years of service Vested employees may retire at the earlier of age 55 and the completion of five years of credited service or the age of 52 and the completion of 25 years of credited service Administrative costs of the plan are financed through investment earnings Benefits are recorded when paid At October 12002 (date of the latest actuarial valuation) Plan membership consisted of the following Retirees and beneficiaries currently i eceiving benefits and terminated employees entitled to benefits but not yet receiving them 4 Current employees Vested 40 Non vested 17 Total 57 Funding Policy From the effective date of the Plan October 1 1997 through September 30 2000 the contribution rate by each member of the Plan is 14% The rate will be adjusted each year thereafter to an amount equal to the total cost for the year as determined by the most recent actuarial valuation less the amount of revenue received from the State of Florida pursuant to Chapters 175 and 185 of the Florida Statutes The participant contribution rate for the year ended September 20 2002 was 14% The minimum member contribution rate is 9% of base salary This funding policy is designed to limit the Village s exposure to contribute to the Plan Annual Pension Cost and Net Pension Obligation The annual pension cost and net pension obligation (asset) as of October 1 2002 was as follows Annual required contribution Interest on net pension obligation Adjustment to annual required contribution Annual pension cost Contributions made Increase in net pension obligation Net pension obligation beginning of year Net pension obligation end of year 3.8 $ 465 562 (8 633) 11 068 467 997 601 817 (133 820) (192 047) $ (325 867) 00000000000 0 0 dPM C C C C VILLAGE OF KEY BISCAYNE FLORIDA F »000000 C C C C NOTES TO BASIC FINANCIAL STATEMENTS (Continued) NOTE 11 DEFINED BENEFIT PENSION PLAN (Continued) Annual Pension Cost and Net Pension Obligation (Continued) The annual required contribution for the current year was determined as part of the October 1 2002 actuarial valuation using the aggregate actuarial cost method This method does not identify and separately amortize unfunded actuarial liabilities When a plan uses the aggregate actuarial cost method a schedule of funding progress is not required to be presented The actuarial assumptions included (a) 9% investment rate of return (net of investment related expenses) and (b) projected salary increases of 6% per year Both (a) and (b) included an inflation component of 4% The actuanal value of assets was determined using the difference between actual and expected return recognized over five years Ti end Information Annual Percentage Net Pension Fiscal Year Pension of APC Obligation Ended Cost (APC) Contributed (Asset) 9/30/2001 $ 46 934 284 6/0 $ (144 611) 9/30/2002 381 591 112 44 (192 047) 9/30/2003 467 997 129 0°/ (325 867) C 0 39 0000000000000 00 00®00000® ®®0 000®0 0000 ®®eni®®® VILLAGE OF KEY BISCAYNE FLORIDA REQUIRED SUPPLEMENTARY INFORMATION NOTES TO BUDGETARY COMPARISON SCHEDULE (Continued) NOTE 2 RECONCILIATION OF BUDGETED AND ACTUAL RESULTS The following adjustments were necessary to reconcile the budgetary comparison schedule prepared on the budgetary basis to the statement of revenues expenditures and changes in fund balances prepared in accordance with generally accepted accounting principles General Fund l '-K Net change in fund balance (GAAP) Federal expenditures not budgeted m 2003 Compensated absences not budgeted in 2003 State grant revenue not budgeted m 2003 State grant expenditures not budgeted in 2003 Net change in fund balance (budgetary basis) S 36 851 498 216 168 973 (73 456) 73 456 S 704 040 -42 VILLAGE OF KEY BISCAYNE FLORIDA REQUIRED SUPPLEMENTARY INFORMATION PENSION 1RUST FUND SCHEDULE OF EMPLOYER CONTRIBUTIONS Year Annual Ended Required Percentage September 30 Contribution Contributed 1998 $ 0 % 1999 1 497 2173% 2000 2 636 4199% 2001 45 199 296% 2002 377 777 114% 2003 465 562 129% The information presented in the required supplemental schedule was determined as part of the actuarial valuation at the date indicated Additional information as of the latest actuarial valuation follows Since the Plan uses the aggregate actuanal cost method a schedule of funding progress is not required and has not been provided Valuation date 10/1/02 Actuarial cost method Aggregate Amortization method N/A Remaining amortization N/A Asset valuation method Market value Actuanal assumptions Investment rate of return" 9 /o per year compounded annually net of investment related expenses Projected salary increases F 6°/ Cost of living adjustments N/A *Includes inflation at 4% 0000000©00 • • • • Pi IL C C C m a 43 REQUIRED SUPPLE MEN TARY INFORMATION 4 VILLAGE OF KEY BISCAYNE FLORIDA REQUIRED SUPPLEMENTARY INFORMATION BUDGETARY COMPARISON SCHEDULE GENERAL FUND FISCAL YEAR ENDED SEPTEMBER 30 2003 r1 r C C C C C Variance with Final Budget Budgeted Amounts Actual Positive Ongmal Final Amounts (Negative) Revenues Property taxes $11 167 508 $ 11 167 508 $ 11 317 161 $ 149 653 Utility taxes 2 25$ 000 2 255 000 2 251 876 (J 124) Franchise fees 690 000 690 000 611 502 (78 498) Licenses and permits 954 185 954 185 970 001 15 816 Intergovernmental 964 900 964 900 999 391 34 491 Charges for services 129 780 129 780 i27 723 197 943 Grants 128 300 128 300 99 830 (28 470) Interest 111 400 111 400 55129 (56271) Total revenues 16 401 073 16 401 073 16 632 613 231 540 Expenditures Current General government Elected officials 321 306 321 306 267 225 54 081 Village Clerk 305 643 305 643 303 469 2 174 Administration 964 7$1 964 751 942 728 22 023 Village Attorney 333 000 333 000 302 038 30 962 Total general government 1 924 700 1 924 700 181$ 460 109 240 Public safety Pohce 3 645 134 3 645 134 3 638 285 6 849 File 4 051 685 4 051 685 4 046 269 5 416 Total public safety 7 696 819 7 696 819 7 684 554 12 265 Public works 913 s01 913 301 963 247 (49 946) Building zoning and planning 1 250 330 1 250 330 1 245 119 5 211 Parks and recreation 732 604 732 604 782 065 (49 461) Debt service Principal 1 410 000 1 410 000 1 415 000 (5 000) Interest and fiscal charges 1 534 997 1 534 997 1 075 069 459 928 Total expenditures 15 462 751 15 462 7$1 14 980 514 482 237 C of revenues over expenditures 938 322 938 322 1 652 099 713 777 C c Other financing sources (uses) Transfers in 330 330 o Transfers out (938 322) (938 322) (948 s89) (10 067) C Total other financing sources and uses (938 322) (938 322) (948 059) (9 737) A'1 Net change in fund balances $ $ $ 704 040 $ 704 040 See notes to budgetary comparison schedule 40 VILLAGE OF KEY BISCAYNE FLORIDA REQUIRED SUPPLEMENTARY INFORMATION NOTES TO BUDGETARY COMPARISON SCHEDULE FISCAL YEAR ENDED SEPTEMBER 30 2003 NOTE 1 BUDGETS AND BUDGETARY ACCOUNTING An annual appropriated budget is prepared for the general fund The Village follows these procedures in establishing the budgetary data reflected in the financial statements (a) The Village Manager submits to the Council a proposed operating budget for the ensuing fiscal year The operating budget includes appropriations and the means of financing them with an explanation regarding each expenditure that is not of a routine nature (b) Public hearings are conducted to obtain taxpayer comments (c) Prior to October 1 the budget is legally enacted through passage of an ordinance (d) The Village Council by motion may make supplemental appropriations for the year up to the amount of revenues in excess of those estimated During fiscal year ended September 30 2003 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 of fund must be approved by the Village Council The classification detail at which expenditures may not legally exceed appropriations is at the depaituient level For the year ended September 30 200.1 expenditures exceeded appropriations in public works by $49 946 m parks and recreation by $49 461 and in debt service principal by $5 000 as presented in the budgetary comparison schedule on the preceding page It is the policy of the Village that all related revenues generated by each department be applied to that department in detemmning if any depaitiuent exceeds its appropriations in total In applying all related revenues to each department for fiscal year 2003 it was determmed that no department resulted in a deficit situation (h) Budget amendments were not significant in relation to the ongmal appropriations -41 eceee®©000sooa©©o C C C c C Q C x NONMAJOR ENTERPRISE FUNDS Enterpnse funds are used to account for operations that are financed and operated in a manner similar to pnvate business enterpnses where the intent is that the costs of providing goods or services be financed or recovered pnmanly through user charges • Solid Waste Fund The solid waste fund provides collection service for trash removal Solid waste expenses are primanly for curbside collections • Sanitary Sewer Construction Fund The sanitary sewer construction fund accounts for the development and construction of a sanitary sewer system to the unsewered areas of the commumty 0000000 VILLAGE OF KEY BISCAYNE FLORIDA COMBINING BALANCE SHEET NONMAJOR ENTERPRISE FUNDS SEPTEMBER 30 2003 C Total Sanitary Nonmajor C Solid Sewer Enterprise Waste Construction Funds ASSETS Current assets i' Cash and cash equivalents $ 73 458 $ $ 73 458 O Receivables net 120 648 120 648 O Total current assets 194 106 194 106 C Noncurrent assets C^ Capital assets not being depreciated 463 91) 463 915 Total noncurrent assets 463 915 463 915 Total assets 194 106 463 915 658 021 LIABILITIES Current liabilities Current portion of revolving loan 17 242 17 242 Noncurrent liabilities Revolvmg loan 413 444 413 444 Total liabilities 430 686 430 686 NET ASSETS Invested in capital assets net of related debt 33 229 33 229 Unrestricted 194 106 194 106 Total net assets $194 106 $ 33 229 $ 227 335 44 VILLAGE OF KEY BISCAYNE FLORIDA COMBINING STATEMENTS OF REVENUES EXPENSES AND CHANGES IN NET ASSETS NONMAJOR ENTERPRISE FUNDS FISCAL YEAR ENDED SEPTEMBER 30 2003 Total Sanitary Nonmaj or Solid Sewer Enterpnse Waste Construction Funds Operating revenues Charges for services $ 313 492 $ $ 313 492 Operating expenses General and administrative 273 076 273 076 Total operating expenses 273 076 273 076 Operating income 40 416 40 416 Non operating revenues (expense) Interest income 903 648 1 551 Interest expense (6 288) (6 288) Total non operating revenues (expenses) 903 (5 640) (4 737) Income (loss) before transfers 41 319 (5 640) 35 679 Transfers in 10 067 10 067 Transfers out (330) (330) Net income 41 319 4 097 45 416 Net assets beginning 152 787 29 132 181 919 Net assets ending $194 106 $ 33 229 $227 335 0®6®ea©0©©©Q®®04©©©©©©©©© a 3 4 4 a a a 45 VILLAGE OF KEY BISCAYNE FLORIDA 1 w r' ra n ra• eNI COMBINING STATEMENTS OF CASH FLOWS NONMAJOR ENTERPRISE FUNDS FISCAL YEAR ENDED SEPTEMBER 30 2003 Total Sanitary Nonmaj or Solid Sewer Enterpnse Waste Construction Funds Cash flows from operating activities Receipts from customers and users $ 261 528 $ $ 261 528 Payments to suppliers (273 076) (273 076) Net cash used by operating activities (11 548) (11 548) Cash flows from non capital financing activities Transfers from other funds 10 067 10 067 Transfers to other funds (330) (330) Net cash provided by non capital financing activities 9 737 9 737 Cash flows from capital and relating financing activities Net payments from revolving loan (339 780) (339 780) Interest paid (6 288) (6 288) Net cash used by capital and related financing activities (346 068) (346 068) Cash flows from investing activities Interest received 903 648 1 551 Net cash provided by investing activities 903 648 1 551 Net decrease in cash and cash equivalents (10 645) (335 683) (346 328) Cash and cash equivalents beginning 84 103 335 683 419 786 Cash and cash equivalents ending $ 73 458 $ $ 73 458 Reconciliation of operating income to net cash provided by operating activities Operating income $ 40 416 $ $ 40 416 Adjustments to reconcile operating income to net cash used by operating activities Changes in operating assets and liabilities (Increase) decrease in Accounts receivable (72 276) (72 276) Increase (decrease) in Due to other funds 20 312 20 312 Total adjustments (51 964) (51 964) Net cash used by operating activities $ (11 548) $ $ (11 548) 46 Q®®0®®O©©©O® ®®©©O ©©© n©© ©©OQ Q© ©©©©O©©c)© ©®O® © DO" NOILDOS 11VOLLSIIV IS Ott?ee00000 ©©®®© ©©©QQ ©©Q QO©O©©© ©OO OOOO® O© OO )000rl 00000Chi 00000 00 Fiscal General Public Y ear Go vernment Woiks VILL AGE OF KEY 1)ISCAYNE FLORI DA GOVER NMENT WIDE E XPENSES BY FUNCTIO N L AST TEN FISCAL YEARS Governme ntal Activities Business type Acti vities Police B uildi ng Interest Packs Zo ni ng on and a nd Long Term Solid S anitary Fn e Reci eation Plamung Debt Sto rmwatei Waste Sewei 2003 $ 5 691 379 $ 963 676 $ 4 787 090 $4 821 645 $ 826 695 $ 1 252 012 $ 1 064 028 (1) Infomratton fo r fiscal year end 1994 2002 is u navailable in this format $ 634 361 Total $ 273 076 $ 6 288 $ 20 320 250 47 VI LLAGE OF KE Y BISCAY NE F LORI DA GOVERNMENT WIDE RE VENUES LAST TE N FISCAL YEARS (1) Fiscal Year Program Re ve nues Charges for Services Operating Grants and Co nti !b utto ns 2003 $ 2 142 380 $ 99 830 Capital Gra nts and Co nti ibutions $ 421 085 General Re ve nues Ta xes f21 Umestncted In vestment Earnings $ 14 180 539 $ 104 449 (1) Info rmation for fiscal yeas end 1994 2002 is unavailable in this format Miscellaneous Total $ 977 430 $ 17 925 713 (2) Inclu des property taxes utility taxes fianclnse fees an d intergovernmental +*� 48 ©®O©O©OQ©©QOO©O® O®©©o ©oo®®00000e000Qo% 00 VILLAGE OF KEY BISCAYNE FLORIDA GENERAL GOVERNMENTAL EXPENDITURES BY FUNCTION LAST TEN FISCAL YEARS Fiscal Genial Public Parks and Public Year Government Safety Recreation Works Total 1994 $4 126 094 $ 4 4D3 539 $ 9 601 922 (1) $782 001 $ 18 963 556 1995 5 524 305 4 294 606 211 159 573 844 10 603 914 1996 3 124 384 4 634 385 234 154 753 823 8 746 746 1997 3 D77 170 5 017 882 239 029 660 780 9 494 861 1998 3 671 970 5 278 315 255 704 828 287 10 034 276 1999 4 173 995 5 644 903 293 664 730 521 10 843 083 2000 4 795 894 6 068 147 380 502 830 360 12 074 903 2001 ) 015 845 6 172 932 452 804 933 096 12 574 677 2002 6 230 222 6 926 2)4 539 058 802 218 14 497 752 2003 5 550 648 8 3)1 743 782 065 963 247 15 647 703 Note Includes general fund only (GAAP basis) Note General government includes economic development building zoning and planning debt service capital outlay and non departmental expenditures (1) Includes acquisition of land foe $9 238 317 for the Village Green 000000000 49 C VILLAGE OF KEY BISCAYNE FLORIDA GENERAL GOVERNMENTAL REVENUES BY SOURCE LAST TEN FISCAL YEARS Licenses Fiscal Property and Inter Utility Franchise Year Taxes Permits Governmental Taxes Fees Other (1) Interest Total 1994 $ 6 640 045 $ 629 246 $ 997 501 $1 268 428 $ 668 020 $ 115 664 $288 978 $10 607 882 1995 6 820 807 351 152 788 062 1 257 179 652 844 665 086 369 540 10 904 670 1996 6 486 019 430 208 791 403 1 294 486 638 096 1 495 521 280 570 11 416 303 1997 6 495 465 5a 1401 766 638 1 555 812 667 815 463 171 248 646 10 728 948 1998 6 96a 900 1 003 768 843 812 I 514 697 709 067 392 975 233 654 11 661 873 1999 7 012 714 668 672 807 924 1 621 473 740 031 1 295 001 231 820 12 377 635 2000 7 799 633 1 316 641 889 704 1 723 902 729 998 348 552 315 959 13 124 389 2001 8 738 608 1 308 229 930 169 1 772 208 738 513 736 881 291 408 14 516 016 2002 9 569 030 859 435 971 136 2 258 931 639 072 608 012 89 838 14 995 454 2003 11 317 161 970 001 999 391 2 251 876 611 502 427 553 55 129 16 632 6I3 Note Includes general fund only (GAAP basis) (1) Includes charges for services grants contributions and other 50 co C C C C' C C CI C ci o a o o o o o o o 0 0 0 0 0 0 0 0 0 C C 0 VILLAGE OF KEY BISCAYNE FLORIDA UTILITY TAX REVENUE BY SOURCE LAST TEN FISCAL YEARS F-, O Fiscal Telecom Fuel F-, Year Electricity mtuncations Gas Oil Water Total 1 "' 1994 $ 888 752 $ 202 702 $ 26 925 $ 4 331 $ 145 719 $ 1 268 429 - 1995 870 704 186 780 38 130 3 920 152 645 1 257 179 1996 888 651 199 746 37 034 3 885 165 169 1 294 480 n 1997 1 032 445 274 768 42 066 3 616 202 918 1 555 813 1998 989 535 288 581 36 427 3 883 196 271 1 0l4 697 1999 992 319 380 934 35 121 4 262 208 837 1 621 473 2000 1 000 503 404 101 52 016 2 169 215 063 1 723 902 2001 1 018 973 492 442 62 833 245 197 715 1 772 208 2002 1 097 566 904 475 10 52 360 318 203 612 2 258 331 2003 1 162 030 825 739 61 137 486 202 394 2 251 786 C 0 C C IC C C C {pC C fC c ) C FRANCHISE FEE REVENUE BY SOURCE LAST TEN FISCAL YEARS Fiscal Cable Year Electricity Television Telephone Total 1994 $ 603 638 $ 43 877 1995 589 031 43 899 1996 571 093 46 824 1997 578 195 62 342 1998 631 323 53 728 1999 653 799 56 997 2000 646 000 59 548 2001 678 316 67 805 2002 639 072 2003 611 502 (I) $ 20 505 19 914 20 179 27 277 24 016 29 235 24 450 37 342 $668 020 652 844 638 096 667 814 709 067 740 031 729 998 783 513 639 072 611 502 (1) Simplified communications tax effective October 1 200I replaced the utility tax and fianchtse fees on telecommunications and cable television 51 VILLAGE OF KEY BISCAYNE FLORIDA PROPERTY TAX LEVIES AND COLLECTIONS LAST TEN FISCAL YEARS Tax Fiscal Assessed Tax Total Percent Year') Year Value Levy Collected21 Collected 1994 1995 $ 1 741 921 584 $ 7 143 620 $ 6 820 807 90 5% 199) 1996 1 767 457 005 6 716 337 6 418 864 95 6°/ 1996 1997 1 861 243 132 6 711 642 6 495 465 96 8°/ 1997 1998 2 003 049 232 7 222 99) 6 948 521 96 2% 1998 1999 2 028 174 208 7 313 596 7 012 714 959% 1999 2000 2 232 457 904 8 050 243 7 799 633 96 9% 2000 2001 2 499 049 161 9 011 571 8 738 608 97 0% 2001 2002 2 731 833 645 9 850 992 9 515 138 96 6% 2002 2003 3 259 919 981 11 755 271 11 317 160 96 3% (1) Assessments as of January 1 of the year listed bills mailed in October of that year taxes become delmquent at the end of Apnl of the subsequent yeas Initial property tax levy by the Village Octobei 1992 (2) Collections i eflect timely payment discounts of up to 4/0 and other adjustments 52 )OOOOCO®©©OOQ©©©000000©©o®©oo©©000ee an C a 0 r C t�. i 0 VILLAGE OF KEY BISCAYNE FLORIDA ASSESSED AND ESTIMATED ACTUAL VALUE OF TAXABLE PROPERTY LAST TEN FISCAL YEARS Net Assessed Tax Real Personal Property Year Property Property Value 1994 $1 7b 626 471 $ 26 29a 113 $1 741 921 a84 1995 1 744 363 535 23 093 470 1 767 4D7 00a 1996 1 837 939 078 23 304 0a4 1 861 243 132 1997 1 978 219 125 24 830 107 2 003 049 232 1998 2 004 007 700 24 166 508 2 028 174 208 1999 2 205 371 189 27 086 715 2 232 457 904 2000 2 470 115 075 28 934 086 2 499 049 161 2001 2 701 084 167 30 749 478 2 731 833 645 2002 3 227 971 184 31 948 797 3 259 919 981 2003 3 617 880 990 43 233 D56 3 661 114 546 Source Miami Dade County Property Appraisers Office Note Assessed values equal the estimated actual value C 53 VILL AGE OF KEY IiISCAY NE FLORIDA PROPE RTY TAX RATES DI RECT AND OVE RL APPIN G G OVERNMENTS LAST TE N FISCAL YEA RS Village of Key Biscayne Miami Dade County State School District Debt Total Total Debt Total Fiscal Village Opeiating Service Cou nty SFWMD FIND State Opeiating Service School Y ear Millage Millage Millage Millage Millage Millage Mrllage Millage Millage Mrllage Other Total 1994 4 101 7 253 0 817 8 070 0 497 0 049 0 546 9 503 0 842 10 345 0 443 23 505 1995 3 800 6 828 0 789 7 617 0 547 0 040 0 587 9 373 1 016 10 389 0 429 22 822 1996 3 606 6 469 0 774 7 243 0 572 0 038 0 610 9 356 1 010 10 366 0 439 22 264 1997 3 606 6 023 0 929 6 952 0 597 0 050 0 647 9 356 1 106 10 462 0 416 22 083 1998 3 606 6 023 0 837 6 860 0 597 0 047 0 644 9 182 0 978 10 160 0 434 21 704 1999 3 606 5 809 0 816 6 625 0 597 0 044 0 641 8 654 0 990 9 644 0 421 20 937 2000 3 606 5 751 0 652 6 403 0 597 0 041 0 638 8 702 0 915 9 617 0 451 20 715 2001 3 606 5 713 0 552 6 265 0 697 0 039 0 736 S 528 0 848 9 376 0 451 20 434 2002 3 606 5 889 0 390 6 279 0 697 0 039 0 736 8 482 0 770 9 252 0 451 20 324 2003 3 606 5 969 0 285 6 254 0 597 0 039 0 636 8 418 0 682 9 100 1 086 20 682 (1) Village estabhshed its own fire district effective October 1 1993 Source Miami Dade Coun ty Property Appraisers Office 54 ©©© G 0 0 ©© ©0 0 0 0 ©©0 ©©0 0 ©0 0 0 ©0 0 ©®©® ©©©©©©®e ®l am VILLAGE OF KEY BISCAYNE FLORIDA RATIO OF ANNUAL DEBT SERVICE EXPENDITURES FOR NET BONDED DEBT TO GENERAL GOVERNMENTAL EXPENDITURES LAST TEN FISCAL YEARS r-^ Ratio of Debt C Total Service to C Total General General ,a en, Fiscal Debt Governmental Governmental ,r- Year Principal Interest (1) Service (2) Expenditures Expenditures 1994 $ $ 194 989 $ 194 989 $ 19 053 562 01 0% C 1995 755 000 384 661 1 139 661 10 603 914 10 7% C 1996 785 000 351 089 1 136 089 8 746 746 13 0% C' 1997 820 000 315 901 1 135 901 9 494 861 12 0% C 1998 855 000 277 825 1 132 825 10 034 276 11 3 /o o., C 1999 895 000 241 329 1 136 329 10 843 083 10 5% C 2000 935 000 595 767 1 530 767 12 074 903 12 7% 2001 975 000 631 875 1 606 875 12 574 677 12 8/0 C O 2002 1 015 000 1 420 845 2 435 845 14 497 752 16 8°/ r; 2003 1 415 000 590 737 2 005 737 15 647 703 12 8% C C Note Includes general fiord only No debt prior to 1994 (1) Excludes bond issuance and other costs C (2) Debt service on revenue bonds C C C C C C C C 55 VILLAGE OF KEY BISCAYNE FLORIDA SCHEDULE OF DIRECT AND OVERLAPPING BONDED DEBT GENERAL OBLIGATION BONDS (IN THOUSANDS) SEPTEMBER 30 2003 Jurisdiction Duect Village of Key Biscayne Overlapping Miami Dade County Mimi Dade County Schools Net General Percentage Amount Obligation Applicable Applicable Taxable Bonded to to Pioperty Debt Key Key Value (1) Outstanding Biscayne Biscayne $ 3 661 115 $ 28 840 100 00% $ 28 840 130 106 101 247 541 (2) 131 120 085 790 200 (2) $ 1 037 741 2 81% (3) 6 966 2 79% (3) 22 064 $ 29 030 (1) Source Miami Dade County Property Appraises s Office Taxable Property Value reflects January 1 2003 amounts (2) Source Miami Dade County Finance Department Net General Obligation Bonded Debt outstanding figures are as of September 30 2003 (3) Based on the percentage of the County s and School Boaid s tax roll valuation comprised of real and personal property situated in the Village of Key Biscayne 56 C a C C C C O 0 0 0 0 0 6 VILLAGE OF KEY BISCAYNE FLORIDA RATIO OF NET BONDED DEBT TO ASSESSED VALUE AND PER CAPITA LAST TEN FISCAL YEARS Ratio fiTh of Net Net Bonded Bonded Net Debt to Debt Fiscal Assessed Bonded Assessed Pei ra. Year Population Value (1) Debt (2) Value Capita F-, 1994 8 887 $1 560 007 130 $9 200 000 0 59% 51 030 C { 1995 8 894 1 741 921 084 8 440 000 0 48% 949 1996 8 886 1 767 407 005 7 660 000 0 43% 862 1997 8 937 1 861 243 132 6 840 000 0 37% 765 � 1998 9 471 2 003 049 232 5 985 000 0 30% 632 C 1999 9 689 2 028 174 208 22 290 000 1 10% 2 300 r- 2000 10 507 2 223 956 515 21 220 000 0 95 /0 2 190 o 2001 10 607 2 499 049 161 30 120 000 1 21% 2 823 C o 2002 10 698 2 731 833 645 29 935 000 1 10% 2 798 C 2003 11 100 3 259 919 981 29 271 000 0 90% 2 637 C Note Village had no debt pnoi to 1994 (1) Net bonded assessed actual value of taxable property (2) Net bonded debt i epresents revenue bonds C C C C C C C 57 VILLAGE OF KEY BISCAYNE FLORIDA REVENUE BOND COVERAGE STORMWATER REVENUE BONDS (SERIES 1999) (1) LAST TEN FISCAL YEARS Net Revenue Gross Available Stormwater for Debt Service Requirements Fiscal Fee Operating Debt Year Revenue Expenses Service Pnncipal Interest Total Coverage 1999 $ 480 586 $ 42 773 $ 437 813 $ $ 335 412 $ 335 412 130 53% 2000 494 955 33 453 461 502 135 000 281 875 416 875 110 71% 2001 518 961 79 708 439 253 125 000 291 622 416 622 105 43% 2002 559 239 85 091 474 148 130 000 336 253 466 253 101 69% 2003 551 774 86 829 464 945 195 000 273 613 468 613 99 22% 58 a a C ci 0 8 0 0 0 0 0 0 0 0 Q 0 0 0 0 0 0 0 0 co co 0 co 90 00 000 00000 000 On0 00000000 Do ) E VI LLA CF OF KEY BISCA YNE FL ORIDA DEM OGRAPIIICS ST ATIST ICS POPULATION Estimates of Pop ulati on by Age Year 2000 Estimates of Population by Race 2000 INCOME* Pet Capita In come U ndei 20 Yeats 20 to 64 Veal 65 Yeats oi Older Number Perce nt Number Percent N umber Percent Total 2 697 26 6 176 59 1 634 15 10 507 Anglo Black Hispanic Total 5 228 48 5 231 10 507 Ave] . age Per An glo Black Hispanic Capita 2000 $ 62 542 $13 417 $ 46 682 $ 54 612 U NEMPE OYMENT RATES (Percent) Miami Dade Coun ty* Village of Ke y Biscayne * Source U S Bureau of Labor Statistics 1994 1995 1996 1997 1998 1999 2000 2001 2002 2003 79 68 78 71 67 59 56 57 74 73 36 31 36 33 31 27 26 28 32 32 59 VILLAGE OF KEY BISCAYNE F LORIDA PROPERTY VALUE CONSTRUCTION AND BANK DEPOSITS LAST TEN FISCAL YEARS Residential Commercial (000s Omitted) Total Total County Village Fiscal Penmts # of # of of Bank Bank Year Issued Permits Valuation Permits Valuation Construction Deposits (1) (2) Deposits (2) 1994 2 205 2 081 $25 410 312 124 $45 567 390 $ 70 977 702 $ 17 524 140 (1) $ 1995 2 857 2 568 33 820 503 289 2 099 661 35 920 164 17 938 762 (I) 1996 3 171 3 060 65 318 655 111 1 231 097 66 549 752 14 561 654 (1) 1997 3 570 3 402 82 481 700 168 667 328 83 149 028 34 664 829 (1) 1998 3 002 2 879 129 200 900 106 3 176 031 132 376 931 36 6)9 805 347 178 1999 2 711 2 416 94 287 095 295 56 792 994 151 080 089 39 633 149 377 060 2000 1 793 1 641 8) 244 371 152 9 359 770 94 604 141 38 539 107 364 973 2001 749 667 59 607 528 82 10 485 477 70 093 005 45 064 000 328 602 2002 856 769 23 206 296 87 1 101 721 24 308 017 51 297 000 311 837 2003 1 324 1 178 22 695 672 146 12 454 140 149 812 56263 926 328 303 (1) State of Flonda Division of Financial Services as of Time 30 of each respective year through fiscal year 2002 Information is for Miami Dade County which the Village of Key Biscayne was a part of (2) Deposits within Village of Key Biscayne limits Information for all years presented was not available from Federal Deposit Insurance Corporation from fiscal year 2003 and forward 60 c a a a a 00000000000000000000000000000000000QQ VILLAGE OF KEY BISCAYNE FLORIDA PRINCIPAL TAXPAYERS SEPTEMBER 30 2003 Taxpayer Sonesta Beach Resort LP GB Hotel Partners Ltd Key Biscayne Ocean Club Ltd Partners Ocean Club Community Association PITU Inc Galleria of Key Biscayne Inc Claudio Alvarez Red Dragon Sands LTD John Dashing Yoyot Realty Inc Source Miami Dade County Appraisers Office 0 0 r r % of Total Taxable Assessed Valuation Valuation $ 39 921 710 1 22% 26 929 342 0 83 /o 17 486 700 0 54% 12 500 000 038% 9 657 016 0 30% 8 741 107 0 27 /o 8 505 544 0 26% 8 470 400 0 26% 6 828 983 0 21% 5 849 394 0 18% $ 144 890 196 4 45% I C C L 61 VILLAGE OF KEY BISCAYNE FLORIDA MISCELLANEOUS STATISTICAL DATA SEPTEMBER 30 2003 Date of Incorporation 1991 Faun of Government Council Manager Area 1 25 Square Miles Miles of Street 22 4 Linear Miles Fire Protection Number of Stations Police Protection Numbei of Stations Education Attendance Centers 2 Number of Students 1 480 Number of Teachers 90 Miami Dade County Watei & Sewer Authority Number of Customeis Average Daily Consumption 1 957 12 434 314 gallons Sewers Numbei of Customers 926 Fue Hydiants 249 Building Permits Issued 856 Recreation and Culture Numbei of Parks 3 Numbei of Libiaries 1 (Operated by Miami Dade County) Number of Tennis Centeis 1 Number of Recreational Centers 1 Employees Full Time 62 96 C C C ci EL rna C C C C C Q Q C C C C C C C C 0 Q Q a 0 Q 0 COMPLIANCE SE CTION 0 0O ( O OOOOOO000 00 0000 0000 000U wito®®‘aWQQQQc3QQQ QQ QQ ®©000000000 000®© ao©©©(3o©© o°* 7 P I��T 2Yl F '&Holtz Accountants = Advisors Report of Independent Certified Public Accountants on Compliance and on Internal Control over Financial Reporting Based on an Audit of Financial Statements Performed in Accordance with GovernmentAudztzng Standards Honorable Mayor Village Council and Village Manager Village of Key Biscayne Florida We ha\ e audited the financial statements of the governmental activities the business type activities each major fund and the aggregate remaining fund information of the Village of Key Biscayne Florida (the Village) as of September 30 2003 and for the year then ended which collectively comprise the Village s basic financial statements and have issued our ieport dated December 26 2003 We conducted our audit in accordance with auditing standards generally accepted in the United States and the standards applicable to financial audits contained in Goverment Auditing Standal ds issued by the Comptroller Genei al of the United States Compliance As part of obtammg reasonable assurance about whether the Village s basic financial statements are free of material imsstatement we performed tests of its compliance with certain provisions of laws regulations contracts and grants non compliance with which could have a direct and material effect on the detennmation of financial statement amounts However providing an opinion on compliance with those provisions was not an objective of our audit and accordingly we do not express such an opinion The results of our tests disclosed no instances of non compliance that are required to be reported under z ` Government Auditing Standards Internal Control over Financial Reporting In planning and performing our audit we considered the Village s internal control over financial reporting in order to deteiurme our auditing procedures for the purpose of expressing our opinion on the basic financial statements and not to provide assurance on the internal control over financial reporting Our consideration of the mtemal control over financial reporting would not necessanly disclose all matters m the internal control over financial reporting that might be material weaknesses A material weakness is a condition m which the design or operation of one or more of the mtemal control components does not reduce to a relatively low level the nsk that misstatements rn amounts that would be material m relation to the financial statements being audited may occur and not be detected within a timely period by employees in the normal course of performing their assigned functions We noted no matters mvolvmg the internal control over financial reporting and its operation that we consider to be matenal weaknesses n 000)000c 63 Rachlin Cohen & Holtz uP One Southeast Third Avenue • Tenth Floor • Miami Honda 33131 • Phone 305 377 4228 • Fax 305 377 8331 • www rachhn com An Independent Member of Baker Tilly International MIAMI FORT LAUDERDALE WEST PALM BEACH STUART TAMPA NEW JERSEY Wee®®eOOO O®© aa©Q QQ©©O©0 ©©©©©©©©©d©©O O© O®©© es1 C y ArTh 1 C i2 Honorable Mayor Village Council and Village Manager Village of Key Biscayne Florida Page Two However we noted one matte' that we have reported to management in the schedule of findings and questioned costs accompanying this report This report is intended solely for the information and use of the Mayor Village Council management and regulatory agencies and is not intended to be and should not be used by anyone other than these specified parties Miami Florida December 26 2003 dic..,. • get x4P 64 en Accountants Advisors e®®eeeOOUU OQOQQQQ®® 4O ®OO® ®® O©OO©a©b© O©O ©OO© k �^ f ! W en afHOliz Accountants Advisors IT 1 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 Flonda r-� r 0 c s m r ^ 0 0 65 We have audited the financial statements of the governmental activities the business type activities each major fund and the aggregate 1emammg fund information of the Village of Key Biscayne Flonda (the Village) as of and for the year ended September 30 2003 which collectively comprise the Village s basic financial statements and have issued our report thereon dated December 26 2003 We conducted our audit in accordance with auditmg standards generally accepted in the United States and the standards apphcable to financial audits contained m Govei nment Auditing Standards issued by the Comptroller General of the United States and OMB Circular A 133 Audits of States Local Governments and Non Profit Organizations We have issued our Report of Independent Certified Public Accountants on Compliance and on Internal Control over Financial Reporting a Report of Independent Certified Public Accountants on Compliance Applicable to Each Major Program and Internal Control over Compliance in Accordance with OMB Circular A 133 and a Schedule of Findings and Questioned Costs Disclosures in those reports which are dated December 26 2003 should be considered m conjunction with this management letter In connection with our audit of basic financial statements of the Village for the year ended September 30 2003 we report the following in accordance with Chapter 10 550 Rules of the Auditor General Local Government Entity Audits which requires that this report specifically address but not be limited to the matters outlined m Rule 10 554(1)(g) 1 No inaccuracies shortages defalcations fraud and/or violations of laws rules regulations and contractual provisions were reported in the preceding annual financial audit 2 Recommendations made in the preceding annual financial audit have been addressed 3 The Village during fiscal year 2003 was not in a state of financial emergency as defined by Florida Statutes 218 5030) The Village has no deficit fund balances for two consecutive years 4 Recommendations to improve the Village s present financial management and accounting pi ocedures are accompanying this report in the schedule of findings and questioned costs 5 The Village was in compliance with Section 218 415 Flonda Statutes regarding the investment of public funds Rachliu Cohen & Holtz LLP One Southeast Third Avenue • Tenth Floor • Miami Ronda 33131 • Phone 305 377 4228 • Fax 305 377 8331 • WWW rachlm Com t,,., An Independent Member of Baker Tilly International MIAMI FORT LAUDERDALE WEST PALM BEACH STUART TAMPA NEW JERSEY 4 Q.-)wcouo®©©000®0© 0©0©©©00©©0000000©© ©© ©©©© 0©0© r r1 l ('4 i Honorable Mayor Village Council and Village Manager Village of Key Biscayne Florida Page Tii o 6 During the course of' our audit nothing came to our attention that caused us to believe that the Village a Was in violation of any laws iules 01 iegulations and contractual provisions b Made any illegal or improper expenditures c Had improper or inadequate accounting procedures kw d Failed to record financial transactions e Had other inaccuracies shortages defalcations or instances of fraud 7 The annual financial report for the year ended September 30 2003 has been filed with the Department of Financial Services pursuant to Section 218 32(1)(a) Flonda Statutes and is m agreement with the audited financial statements for the fiscal year ended September 30 2003 8 The Village was incorporated by Laws of Honda 90 142 There were no component units 1 0 related to the Village 0 9 Durmg the course of our audit we applied financial condition assessment procedures pursuant to 0 Rule 10 566(8) It is management s responsibility to monitor the Village s financial condition and our financial condition assessment which was performed as of the Village s fiscal year end c was based on representations made by management and the review of financial mformation provided by the Village There were no findings that identified detenorating financial conditions 0 This report is intended solely for the information and use of the Mayor Village Council management and the Auditor General of the State of Florida and is not intended to be and should not be used by anyone other than these specified parties SttA- o at.. i%t' it, C' Miami Florida December 26 2003 0 0 c 0 66 ac I oltz Accountants Advisors uu®o©00©0a©0© d0©©©© ©©©©0 0d©0 ©©b©© 0© ©©©a0000 u r,, CO en «_firI_LbL Oltz Accountants Advisors fT's A C C C C C C C (a' ww C C C C r C C C C Report of Independent Certified Public Accountants on Comphance Applicable to Each Major Program and Internal Control over Compliance in Accordance with OMB Circular A 133 Honoi able Mayol 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 US 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 2003 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 giants applicable to its major fedei al awards program is the responsibility of the Village s management Our responsibility is to express an opinion on the Village s compliance based on our audit We conducted our audit of compliance in accordance with auditing standards generally accepted in the United States the standards applicable to financial audits contained in Government Auditing Standards issued by the Comptroller General of the United States OMB Circular A 133 Audits of States Local Governments and Non Profit Organizations Those standards and OMB Circular A I33 requires that we plan and perform the audit to obtain reasonable assurance about whether non compliance with the types of compliance requirements referred to above that could have direct and material effect on a major federal awards 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 its major federal awards program and state financial assistance project for the year ended September 30 2003 Internal Control over Compliance The management of the Village is responsible for establishing and maintaining effective internal control ovei compliance with requnements of laws regulations contracts and grants applicable to federal awards programs In planning and performing our audit we consideied the Village s internal control over compliance with requnements that could have a direct and matenal effect on each major federal awards programs in order to determine our auditing procedures for the purpose of expressing our opinion on compliance and to test and report on internal control over compliance in accordance with OMB Cncular A 133 67 Rachlin Cohen & Holtz LIP One Southeast Third Avenue • Tenth Floor • Miami Florida 33131 • Phone 305 377 4228 • Fax 305 377 8331 • www rachhn coin An Independent Member of Baker Tilly International MIAMI FORT LAUDERDALE WEST PALM BEACH STUART TAMPA NEW JERSEY °w®cDO©©©©©O© ©d©O©O® Q©O©© O©©Q©© Q©©© ©© ©©© od®o f r r"- 0 0 0 0 0 0 0 Th .p, I 0 e Honorable Mayor Village Council and Village Manager Village of Key Biscayne Florida Page Two Our consideration of the internal control over compliance would not necessarily disclose all matters in the mtemal control that might be material w ealmesses A material weakness is a condition in which the design of operation of one or more of the internal control components does not reduce to a relatively low le\ el the risk that non compliance with applicable requirements of laws regulations contracts and grants that would be material in relation to a major fedei al awards program being audited may occur and not be detected within a timely period by employees in the normal course of performing their assigned functions We noted no matters involving the mtemal control over compliance and its operation that we consider to be mateiial weaknesses This report is intended solely for the information and use of the Mayor Village Council management and specific legislative or regulatory bodies and is not intended to be and should not be used by anyone other than these specified parties Lid., w 444, ,c.c.s Miami Florida December 26 2003 68 WW€00004.? OQQQQQ QQ QQO Q©®©©Q© on ©o ©a© o©© ©®©© aoa 3 C C C N VILLAGE OF KEY B ISCAYNE FLORIDA SCHEDULE OF EXPENDITURES OF FEDERAL AWARDS FISCAL YEAR ENDED SEPTEMBER 30 2003 Federal Grantor/Pass Through Grantor Programs Federal Federal Grant/ CFDA Contract Federal Number Number Expenditures U S Department of Treasury Federal Equitable Sharing Program N/A N/A S 498 216 f U S Department of Justice Pass through Miami Dade County Byrne Grant 16 579 HSB423 86 Pass through the Florida Department of Law Enforcement Law Enforcement Block Grant 16 592 03 CT 2Q 11 12 02 094 10 000 Total US Department of Justice 10086 Total Expenditures of Federal Awards S 508 02 N/A Not available See note to schedule of expenditures of federal awards 69 Uw®eO®Q®Q©Q©QQ ©© ®©© ©©©© 00000 0©©©o ©o ©© d©®o©d I VILLAGE OF KEY BISCAYNE FLORIDA C� NOTE TO SCHEDULE OF EXPENDITURES OF FEDERAL AWARDS FISCAL YEAR ENDED SEPTEMBER 30 2003 C' NOTE 1 BASIS OF PRESENTATION r' P`, The accompanying schedule of expenditures of federal awards includes the federal grant activity of the Village of Key Biscayne and is presented on the modified accrual basis of accounting The information in this schedule is presented in accordance with the requirements of OMB (-3 Circular A 1s3 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 C; C C C 70 (a) tvWWLUUQUQQQQQQQQ©a4 ©©©© O©Q o© ooao©odo©©bd®© c rr� 0 rte* -444 r r F r- ,„„ C C VILLAGE OF KEY BISCAYNE FLORIDA SCHEDULE OF FINDINGS AND QUESTIONED COSTS FISCAL YEAR ENDED SEPTEMBER 30 2003 SECTION I SUMMARY OF AUDITOR S RESULTS Financial Statements Type of auditor s report issued Unqualified Opinion Internal control over financial reporting Material wealmess(es) identified? yes X no Reportable condition(s) identified not considered to be material weakness? yes X none reported Non compliance material to financial statements noted? yes X no Federal Awards Programs Internal control over major awards programs Material wealmess(es) identified? yes X no Reportable condition(s) identified not considered to be material wealmess9 yes X none reported Type of auditor s report issued on compliance for major federal awards program Unqualified Opinion Any audit findings disclosed that are required to be reported in accordance with Circular A 133 Section 510(a)9 yes X no Identification of federal major awards program Federal Program Federal CFDA No Federal Equitable Sharing Program N/A Dollar threshold used to distinguish between Type A and Type B programs $300 000 Auditee qualified as low risk auditee for audit of federal awards program? yes X no 71 wdcagcciUGUOU000©00©©0©U0© d0000000 a©©®0©©©0d ©©0 VILLAGE OF KEY BISCAYNE FLORIDA C C C I f 0 0 C 0 C C C rC C 0 C SCHEDULE OF FINDINGS AND QUESTIONED COSTS (Continued) SECTION II - FINANCIAL STATEMENT FINDINGS Other Matter 03 1 Accounting Treatment for Expenditures At the end of each fiscal year Village Council and Management establish reservations of fund balance that are presented in the financial statements In the ensuing year expenditures are generally made against those reserves We noted that the Village has on occasion charged the expenditure directly against the reserve rather than presenting the expenditure as such in the financial statements which has the effect of flowing into and reducing the established reserves Without this methodology all expenditures of the Village would not be properly accounted for and presented in accordance with generally accepted accounting principles Recommendation We recommend as it relates to reservations of fund balance that m order to properly reflect revenues and expenditures of the Village in the financial statements and in accordance with generally accepted accounting principles charges against reserves should first be presented as an expenditure which will then have the effect of reducing the related reserve Management Response The Village will continue to record items previously reserved and designated in the manner established in prior years directly against those reserves/designations A reconciliation process to preserve the proper methodology of flowing such items into and out of respective departments will be reviewed annually SECTION HI - FEDERAL AWARD FINDINGS AND QUESTIONED COSTS None 72 ® o4®o© ©Q©®oo©o®o ©oo©Q©©©a0 000ennnnnnnnmmrimr r 0 0 I t., 0 0 I VILLAGE OF KEY BISCAYNE FLORIDA SUMMARY SCHEDULE OF PRIOR AUDIT FINDINGS FISCAL YEAR ENDED SEPTEMBER a0 2003 PRIOR YEAR COMMENTS AND STATUS None 73 t-ftstjuciouUUUUQQQQ O© ®©©© OQ® ©O©©© ©QO©O©© OO©cfd d