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HomeMy Public PortalAbout14-8845 Approve the Audited Financial Statement Ending September 30, 2013 Sponsored by: City Manager RESOLUTION NO. 14-8845 A RESOLUTION OF THE CITY OF OPA-LOCKA, FLORIDA TO APPROVE THE AUDITED FINANCIAL STATEMENT FOR THE PERIOD ENDING SEPTEMBER 30, 2013; PROVIDING FOR INCORPORATION OF RECITALS; PROVIDING FOR AN EFFECTIVE DATE. WHEREAS,the City Auditor has completed the audit of the city's Financial Statements for the Fiscal Year ending September 30, 2013; and WHEREAS,the City Commission of the City of Opa-locka desires to approve the Audited Financial Statement for the period ending September 30, 2013. NOW,THEREFORE,BE IT DULY RESOLVED BY THE CITY COMMISSION OF THE CITY OF OPA-LOCKA,FLORIDA: Section 1. The recitals to the preamble herein are incorporated by reference. Section 2. The City Commission of the City of Opa-locka hereby approves the Audited Financial Statement for the period ending September 30,2013,in the form attached hereto as Exhibit A. Section 3. This resolution shall take effect immediately upon adoption_ PASSED AND ADOPTED this 17th day of September, 2014. Resolution No. 14-8845 MYRA TAYLOR MAYOR Attest to: Approved as to form and legal sufficiency: 1 1 J na Flores Jos ph S. ' eller Ci Clerk G r ENS OON MARDER,PA i C1 Attorney Moved by: COMMISSIONER HOLMES Seconded by: COMMISSIONER JOHNSON Commission Vote: 5-0 Commissioner Holmes: YES Commissioner Johnson: YES Commissioner Santiago: YES Vice-Mayor Kelley: YES Mayor Taylor: YES AdMilk 4P City of Opa-Locka Agenda Cover Memo Commission Meeting 0911012014 Item Type: Resolution Ordinance Other Date: X (EnterX in box) Fiscal Impact: Ordinance Reading: 1st Reading god Reading (EnterX in box) Yes No (EnterXin box) X Public Hearing: Yes No Yes No (Enter X in box) Funding Source: (Enter Fund&Dept) Advertising Requirement: Yes No (Enter AcctNo.)N/A (EnterXin box) ITEM BUDGETED: YES NO Contract/P.O.Required: Yes No RFP/RFQ/Bid#: (EnterXin box) X N/A Strategic Plan Related Yes No Strategic Plan Priority Area: Strategic Plan Obj./Strategy: (list the (Enter X in box) X specific objective/strategy this item will address) Enhance Organizational p N/A Bus.&Economic Dev 0 Public Safety p Quality of Education Qual.of Life&City Image p Communcation Sponsor Name City Manager Department: Finance Short Title: A resolution of the City of Opa-locka, Florida authorizing the City Commission to approve the audited financial statements for the period ended September 30, 2013. Staff Summary: Statement reflecting City's financial information audited for fiscal year ended September 30, 2013. Agenda Cover—Commission Meeting 09/10/2014 Page 2 Proposed Action: Staff recommends approval. Attachment: Audited Financial Statement for the period ended September 30, 2013. Memorandum TO: Mayor Myra L. Taylo Vice Mayor Joseph L. K y Commissioner Timot 1 s J Commissioner Doroth n Commissioner Luis B. 'ti o �r FROM: Kelvin L. Baker, Sr., City Mana DATE: September 03, 2014 RE: Fiscal Year 2013 Audited Financial Statement Request: A Resolution of the City of Opa-locka, Florida authorizing the City Commission to approve the Audited Financial Statement for the period ended September 30, 2013. Description: Audited Financial Statement for the period ended September 30, 2013. Account Number: N/A Financial Impact: N/A Implementation Time Line: Immediately Legislative History: None Analysis: N/A Recommendation(s): Staff recommends approval. Attachments: Audited Financial Statement for the period ended September 30, 2013. Prepared by: Susan Gooding-Liburd, Finance Director. End of Memorandum 1 1 r t; eit* 4 eompwh4D t anntud j:kwwiai 9?epM Fiscal Year • • September oQP-�ock4 O � � 09 a v CRAO R A'�EO rjr I T11c City of 0� a-Locka Iv The Mission of the City of opa-Locka is to enhance the quality of life, enviroiuilent, and safety of our customers .nd employees in an atmosphere of col;1les-,, integrity, and qua ltd ` :,1'vICe. ,f r r L W y City of Opa-Locka,Florida—Comprehensive Annual Financial Report Fiscal Year Ended September 30,2013 TABLE OF CONTENTS INTRODUCTORY SECTION page Letter of Transmittal i-iii List of Principal Officials iv Organization Chart v FINANCIAL SECTION Report of Independent Certified Public Accountants 1-3 Management's Discussion and Analysis 4-13 Basic Financial Statements: Government-Wide Financial Statements: Statement of Net Position 14 Statement of Activities 15 Fund Financial Statements: Balance Sheet-Governmental Funds 10 16 Reconciliation of the Balance Sheet-Go mental ds to the Statement of Net Position 1'7 Statement of Revenues, Expendit s, an anges in Fund Balances- Governmental Funds 18 Reconciliation of the State t of nu , Expenditures, and Changes in Fund Balances Go nta unds to the Statement of Activities 19 Statement of Net Positio P Funds 20 Statement of Reven x ses, and Changes in Fund Position- Proprietary F s 21 Statement of Cas o)dules oprietary Funds 22 Notes to the Basic Financi ments 23-45 Required Supplementary Sc (Unaudited) Budgetary Comparison Schedules: General Fund 46 Peoples' Transportation Tax Fund 47 Notes to the Budgetary Comparison Schedules 48 Schedule of Funding Progress and Employer Contributions 49 Combining and Individual Fund Statements (Unaudited) Combining Balance Sheet-Nonmajor Governmental Funds 50 Combining Statement of Revenues, Expenditures and Changes in Fund Balances—Nonmajor Governmental Funds 51 Combining Statement in Net Position Balances—Nonmajor Enterprise Funds 52 Combining Statements of Revenues, Expenditures and Changes in Funds Balances-Nonmajor Enterprises 53 Combining Statement of Cash Flows—Nonmajor Enterprise 54 STATISTICAL INFORMATION Statement 1 —Net Position by Component 55 Statement 2—Changes in Net Position 56-57 Statement 3—Governmental Activities Tax Revenues by Source 58 Statement 4—Fund Balances of Governmental Funds 59 Statement 5—Changes in Fund Balances of Governmental Funds 60 Statement 6—General Governmental Tax Revenues by Source 61 Statement 7—Assessed Value of all Taxable Property 62 Statement 8—Property Tax Rates Direct and Overlapping Governments 63 Statement 9—Property Tax Levies and Collections 64 Statement 10—Ratios of Outstanding debt by Type 65 Statement 11 —Pledged Revenue Coverage 66 Statement 12—Demographic and Economic Statistics 67 Statement 13 —Principal Employers 68 Statement 14—Full Time Equivalent City Government Employees by Function/Program 69 Statement 15 —Operating Indicators by Function/Progr 70 Statement 16—Capital Assets Statistics by Functio in 71 COMPLIANCE SECTION Report of Independent Certified Public Accoun n Internal Control over Financial Reporting and on Compliance the tters Based on an Audit Performed in Accordance with Governme tandards 72-73 Report of Independent Certified lic cco tants on Compliance with Requirements Applicable to Ea c am and on Internal Control Over Compliance in Accordanc Circular A-133 74-75 Schedule of Expenditures ede Awards 76 Notes to the Schedule of Ex res 77 Schedule of Findings and Ques coned Costs 78-88 Management Letter in Accordance with the Rules of the Auditor General of the State of Florida 89-91 ii (i'lty l September 10,2014 To the Citizens,the Honorable Mayor,City Commissioners and City Manager of the City of Opa-locka: It is my pleasure to submit the Audited Financial Report for the City of Opa-locka,Florida, for the fiscal year ended September 30,2013,pursuant to Section 218.39 of the Florida Statutes, Chapter 10.550 of the Rules of the Auditor General of the State of Florida and the City Charter. The financial statements included in this report conform to accounting principles generally accepted in the United States of America as prescribed by the Governmental Accounting Standards Board (GASB). This re rt is published to fulfill that requirement for the fiscal year ended September 30,2013. Management assumes full responsibility for the complete s and bility of the information contained in this report, based upon a comprehensive framework of' rn ontro at it has established for this purpose. Because the cost of internal control should not exc icipated benefits, the objective is to provide reasonable, rather than absolute, assurance t the ancial statements are free of any material misstatements. The financial statements have been aud' HC Certified Public Accountants and Consultants, LLC, a firm of licensed certified public accou ts. endent auditors have issued an unqualified opinion on the City's financial statements for they nde ptember 30, 2013. The independent auditors' report is located at the front of the finan9be is report. Management's discussion and D&A) immediately follows the independent auditors' report and provides narrative introduction ,and is of the basic financial statements. MD&A complement this letter of transmittal and shin conjunction with it. Profile of the Government The City of Opa-locka was incorporated in 1926 and operates under a Commission/City Manager form of government. The City Commission is comprised of the Mayor and four Commissioners, who are responsible for enacting ordinances, resolutions, and regulations governing the City; and appointing the members of various advisory boards. Additionally, the City Commission appoints the City Manager, the City Attorney and the City Clerk. As Chief Administrative Officer,the City Manager is responsible for the enforcement of laws and ordinances,and the appointment and supervision of the City's department heads. The City provides a full range of services, including police, construction and maintenance of highways and streets and other infrastructure, recreational and cultural activities, water and wastewater, sanitation,planning and zoning,and general administrative services. For additional information concerning our City,please visit our website at www.opalockafl.gov. i The financial reporting entity, under which the financial statements are prepared, includes all the activities and functions for which the City is financially accountable. The City is required to prepare, approve, adopt and execute an annual budget. This annual budget serves as the foundation for the City's financial planning and control. Budgetary control is maintained at the departmental and fund level, with the finance department providing support to departments in the administration of their budgets. In accordance with the city's budget transfer policy, the city manager is authorized to transfer budgeted amounts within any fund or function; however, any supplemental appropriations or revisions that amend the total adopted budget must be approved by the City Commission. Budget to actual comparisons are provided in this report for all of the City's funds that have an appropriated annual budget. LOCAL ECONOMY The City of Opa-locka comprises approximately 4.2 square miles, has a population of approximately 16,000 and is located in the northern portion of Miami-Dade County. The City is a mix of residential, commercial and industrial zones with the Opa-locka airport, which is owned a operated by Miami-Dade County, being its best known landmark. The City of Opa-locks community is ed by twoe lementary schools. This year has been very challenging with a further declin taxab operty values and the implementation of legislative measures that have placed limits on how I g rumen can levy ad valorem taxes today and into the future. The economic decline, which began in fiscal yea t ed to negatively impact the City during fiscal year 2013. The city has been forced to om a ses in our property tax revenue. Between the sluggish economy and the voter appro c stit onal amendments, the current year taxable value has decreased from $715 million to $698 lio on of 2.3%. This reduction is on top of a reduction in property values over the past four ye s. ur ye s,the City's taxable value has reduced from $974 million to$698 million,a reduction of 2 0. The reliance on grant funds has ' en to decreases in other revenue sources. The City is aggressively applying for grants to supplement onies to fund services, especially in the area of public safety, parks and recreation and infrastructure improvement. National and state economics continue to be key factors in assessing the City's future fiscal picture. Changes in the national, state and local economies can affect both revenues and expenditures, due to the impact on tax receipts, revenue sharing, and the costs of providing city services. The 2013 census, recently completed, is anticipated to have some impact on revenue sharing for the City. LONG-TERM FINANCIAL PLANNING The City of Opa-locka's current focus related to economic growth is the creation of a community redevelopment agency (CRA) to help promote redevelopment in the City. The City has started this process by hiring an outside consultant to identify area of community redevelopment and prepare a Community Redevelopment Plan. The designs for the major repairs of the City's four pump stations have been completed and permitted and construction is ready to commence any time soon. When finished, this project will allow the City to issue business permits to new businesses whose applications are currently pending. H In compliance with the City's financial integrity ordinance, the City's annual budget is adopted with the provision of $500,000 for contingency reserve. As of September 30, 2013, the City's unreserved, undesignated general fund balance was 4.8% of general fund's fiscal year 2013 budget. The importance of monitoring the City's fund balance levels has become an integral part of the overall financial planning of the City. MAJOR INITIATIVES It is no doubt that the fiscal year 2013 is another year full of challenges. This year our priorities include major repairs of tow pump stations, improvement to the free citywide bus route to include weekend routes. The most visible initiative for this fiscal year will be the completed construction of Helen Miller Multi- Purpose Community Center. AWARDS AND ACKNOWLEDGEMENTS The Government Finance Officers Association of the United 10 �Ws and Canada(GFOA) awarded the City a Distinguished Budget Presentation Award for its FY 2011-2 et document. In order to qualify for the Distinguished Budget Presentation Award,the City's budodocum ad to be judged proficient as a policy document,a financial plan, an operations guide,and a mu ' ations evice. We wish to express our appreciation to the City er is effective leadership, all the Departments who assisted and contributed to the preparation of this c ing, without the leadership and support of the Mayor, the Commissioners, and the City age ac mplishments and future successes noted in this report would not have been possible. Respectfully submitted, Susan A. Gooding-Liburd, CPA, C Finance Director iii • CITY OF OPA-LOCKA, FLORIDA List of Principal Officials CITY COMMISSION Myra Taylor Mayor 111C Joseph Kelly Timothy Holmes Vice Mayor Commissioner Dorothy Johnson Luis Santiago Commissioner Commissioner Ty TIVE MANAGEMENT Kelvin Baker, Sr. City Manager Joanna Flores City Clerk Joseph Geller, P.A. City Attorney Susan Gooding-Liburd, CPA, CGFO Finance Director iv i ORGANIZATIONAL CHART City Co rnmissio n Committees L INDEPENDENT AUDITOR'S REPORT To the Honorable Mayor and City Commission City of Opa-Locka, Florida Report on the Financial Statements 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 City of Opa- Locka, Florida (the City) as of and for the year ended September 30, 2013 and the related notes to the financial statements, which collectively comprise the City's basic financial statements as listed in the table of contents. Management's Responsibility for the Financial Statements Management is responsible for the preparation and fair p ntation of these financial statements in accordance with accounting principles generally acc I the United States of America; this includes the design, implementation, and maintenan of inte control relevant to the preparation and fair presentation of financial statements that a re om ma trial misstatement, whether due to fraud or error. Auditor's Responsibility Our responsibility is to express opi ' on se financial statements based on our audit. We conducted our audit in accordance a ting ndards generally accepted in the United States of America and the standards applic o ncial audits contained in Government Auditing Standards, issued by the Co ral of the United States. Those standards require that we plan and perform the audit t btain so able assurance about whether the financial statements are free from material misstateme An audit involves performing pro ures to obtain audit evidence about the amounts and disclosures in the financial statements. The procedures selected depend on the auditor's judgment, including the assessment of the risks of material misstatement of the financial statements, whether due to fraud or error. In making those risk assessments, the auditor considers internal control relevant to the entity's preparation and fair presentation of the financial statements in order to design audit procedures that are appropriate in the circumstances, but not for the purpose of expressing an opinion on the effectiveness of the entity's internal control. Accordingly, we express no such opinion. An audit also includes evaluating the appropriateness of accounting policies used and the reasonableness of significant accounting estimates made by management, as well as evaluating the overall presentation of the financial statements. We believe that the audit evidence we have obtained is sufficient and appropriate to provide a basis for our audit opinions. Opinions In our opinion, the financial statements referred to above present fairly, in all material respects, the respective financial position of the governmental activities, the business-type activities, each major fund, and the aggregate remaining fund information of the City as of September 30, 2013, and the respective changes in financial position, and, where applicable, cash flows thereof for the year then ended in accordance with accounting principles generally accepted in the United States of America. Other Matters Required Supplementary Information Accounting principles generally accepted in the United States of America require that the management's discussion and analysis and budgetary comparison information on pages 4-13 and 44- 47 be presented to supplement the basic financial statements. Such information, although not a part of the basic financial statements, is required by the Governmental Accounting Standards Board, who considers it to be an essential part of financial reporting for placing the basic financial statements in an appropriate operational, economic, or historical context. We have applied certain limited procedures to the required supplementary information accordance with auditing standards generally accepted in the United States of America, w ' consisted of inquiries of management about the methods of preparing the information and c an the information for consistency with management's responses to our inquiries, the basi nancial ments, and other knowledge we obtained during our audit of the basic financial st Xe We do not express an opinion or provide any assurance on the information because th licedures do not provide us with sufficient evidence to express an opinion or provide an Other Information Our audit was conducted for the q ing opinions on the financial statements that collectively comprise the City's si cla tatements. The introductory section, combining and individual nonmajor fund fi is nts and statistical section, are presented for purposes of additional analysis and are t a re q part of the basic financial statements. The schedule of expenditures of federal award pr nted for purposes of additional analysis as required by U.S. Office of Management and Budg ircular A-133, Audits of States, Local Governments, and Non- Profit Organizations, and is also not a required part of the basic financial statements. The combining and individual nonmajor fund financial statements and the schedule of expenditures of federal awards are the responsibility of management and were derived from and relate directly to the underlying accounting and other records used to prepare the basic financial statements. Such information has been subjected to the auditing procedures applied in the audit of the basic financial statements and certain additional procedures, including comparing and reconciling such information directly to the underlying accounting and other records used to prepare the basic financial statements or to the basic financial statements themselves, and other additional procedures in accordance with auditing standards generally accepted in the United States of America. In our opinion, the combining and individual nonmajor fund financial statements and the schedule of expenditures of federal awards are fairly stated in all material respects in relation to the basic financial statements as a whole. The introductory and statistical sections have not been subjected to the auditing procedures applied in the audit of the basic financial statements and, accordingly, we do not express an opinion or provide any assurance on them. 2 Other Reporting Required by Government Auditing Standards In accordance with Government Auditing Standards, we have also issued our report dated September xx, 2014 on our consideration of the City's internal control over financial reporting and on our tests of its compliance with certain provisions of laws, regulations, contracts, and grant agreements and other matters. The purpose of that report is to describe the scope of our testing of internal control over financial reporting and compliance and the results of that testing, and not to provide an opinion on internal control over financial reporting or on compliance. That report is an integral part of an audit performed in accordance with Government Auditing Standards in considering City's internal control over financial reporting and compliance. Hollywood, Florida September xx, 2014 3 CITY OF OPA-LOCKA,FLORIDA Management's Discussion and Analysis For the Year Ended September 30, 2014 OVERVIEW OF THE FINANCIAL STATEMENTS The City of Opa-Locka's Management Discussion and Analysis(MD&A) is designed to provide an objective and easy to read analysis of the City's financial activities based on currently known facts, decisions, or conditions. It is intended to provide a broad overview on short-tern and long-term analyses of the City's activities based on information presented in the financial report and fiscal policies that have been adopted by the City. Specifically,this section is designed to assist the reader in focusing on significant financial issues, provide an overview of the City's financial activity, identify changes in the City's financial position (its ability to address the next and subsequent year challenges), identify any material deviations from the financial plan (the approved budget), and identify individual fund issues or concerns. The City presents its financial statements under the reporting model required by the Governmental Accounting Standards Board Statement Number 34—Basic Financial Statements — and Management's Discussion and Analysis —for State and Local Governments (Statement 34). As with other sections of this financial report, the inf rmation contained within this MD&A should be considered only a part of a greater whole. Th ader of this statement should take time to read and evaluate all sections of this report, inc i the footnotes and the other Required Supplemental Information (RSI)provided in addi ' to th D&A. Financial Highlights • The net position of the City at the th ost recent fiscal year was $27,224,607. Of this amount $629,462 is unrestri 24,156 is restricted for debt service and $22,970,989 is invested in c ss ,net of related debt. • The City's total net positio y$(339,301). The decrease is primarily attributed to a decline in prope a es due to a fall in property values as well as a decline in water and sewer nue. • At the close of the r nt fiscal year,the City's governmental funds reported combined ending fund balance o ,594,448. There is an overall unassigned deficit of$(341,009) at the fund level as $2,935,457 is non-spendable, restricted, assigned or committed. Understanding the Basic Financial Statements GASB Statement 34 represented a monumental change from the way in which government financial statements are recorded and presented. It provided for the first time a concise "entity-wide" Statement of Net Position and Statement of Activities,providing the user of the financial statements a combined overview of the City's financial position and result of operations, eliminating interfund activities and "other people's money" such as pension funds, which can mislead users when incorporated in a combined manner. The Government-Wide Financial Statements also differentiate between Governmental and Business-Type Activities, further assisting the reader in their evaluation. The reporting model requires the use of accrual accounting (which focuses on economic resources) at the top most level, while maintaining modified accrual accounting (which focuses on current financial resources—budgeted resources)at the individual fund level. This was an important change in governmental accounting. The impact of long-term financial decisions is accurately matched to the period in which the expense or revenue is attributed. In short, an accurate presentation of 4 information is achieved and the impacts of long-term decisions are promptly recorded as the transactions occurred, as opposed to the traditional method of recording them when the bill is paid. A good example of this is the recording of compensated absences such as vacation time.Previously, this time was"expensed"as paid,not when earned.As a result,employees could accrue hundreds or thousands of hours in the past without that expense being attributed to the taxpayers who benefited from those employees' services. Once the employees separate from the City it is future taxpayers who will bear the financial liability, but would not benefit from those employees' services. This is but one of many examples of"expenses" that have traditionally not been matched to the period of benefit. Users interested in "budgetary performance" will find that information available in the required supplementary information and other financial information following the notes to the financial statements.An overview discussion of the different sections of this reporting model follows. GOVERNMENT-WIDE FINANCIAL STATEMENTS The government-wide financial statements consist of a Statement of Net Position and a Statement of Activities. Both statements represent an overview of the as a whole, separating its operations between governmental and business-type activities. information is presented utilizing the economic resources measurement focus and acc b of accounting. This method better matches revenues and expenses to the period in ich the nues are earned and the expenses attributed. The focus of the Statement of Net Posit' the estricted Net Position") is designed to be similar to a bottom line for the City i e ental and business-type activities. This statement combines and consolidate ve to d's current financial resources (short-term spendable resources)with capital is d 1 -term obligations. The Statement of Activities is cu on bo the gross and net cost of various activities(including governmental, business- ent unit),which are provided by the government's general tax and program revenu s is en ed to summarize and simplify the user's analysis of cost of various governmental se s a the local taxing efforts necessary to sustain each of those activities. FUND FINANCIAL STATEMENTS Traditional users of governmental financial statements will find the Fund Financial Statements presentation more familiar. The Governmental Funds presentation is presented on a sources and uses of liquid resources basis. This is the manner in which the financial plan(the budget)is typically developed. The flow and availability of liquid resources is a clear and appropriate focus of any analysis of a government. Funds are established for various purposes and the Fund Financial Statements allow the demonstration of sources and uses and/or budgeting compliance associated therewith. The total column on the Business-Type Fund Financial Statements is the same as the Business-Type column on the Government-Wide Financial Statements, after adjusting for internal service funds, the Governmental Funds Total column requires a reconciliation because of the different measurement focus (current financial resources versus total economic resources) which is reflected on the page following each statement. The flow of current financial resources will reflect bond proceeds and interfund transfers as other financial sources as well as capital expenditures and bond principal payments as expenditures. The reconciliation will eliminate these transactions and 5 FUND FINANCIAL STATEMENTS (Continued) incorporate the capital assets and long-term obligations (bonds and others) into the Governmental Activities column(in the Government-Wide statements). ANALYSIS OF THE OVERALL FINANCIAL POSITION AND RESULTS OF OPERATIONS In evaluating the financial position and short-term financial performance of the Town, two tools are particularly valuable: The Statement of Net Position and the Statement of Activities. It is useful for the user to compare the current year with the prior year. This aids in spotting trends and other areas of concern or interest. For ease of relative comparisons, we include the percent change from one year to another(See below). NOTES TO THE BASIC FINANCIAL STATEMENTS Notes to the financial statements provide additional information that is essential for a full understanding of the information provided in the overnment-wide and fund financial statements. STATEMENT OF NET POSITION Net position of the City represents the difference een (assets) and (liabilities, net position) of the City using the economic resources m en cus and accrual basis of accounting. In general terms, the City's total i ased 9%, which includes a 16% increase in the government activities. The 16° me se government activities is primarily due to the following two items: the const t' elen Miller/Segal park facility and infrastructure improvements to Burlingto )dapital W 143rd, Rutland and NW 128. The governmental active ity's current and other assets increase 16%while the current liability of those activities 77%. The 77% increase is due mainly to accounts payable increase in the general fund projects fund of$1.5M and $722k respectively compare to $302K and $36k in prior years. The Business Type activities of the City's current and other assets decrease 24% while the other liabilities of those activities increase 44%. The 24% decrease in current assets is due to overdrawn cash and the 44% increase in liability is due to accounts payable increase of$1.566M compare to $385K in prior years. The governmental activities invested in capital assets increased by 24% and unrestricted net position now stand at negative ($2.269) million, a negative ($.0.976) million increase in the deficit from the previous year. 6 STATEMENT OF NET POSITION cont'd The business type activities invested in capital assets decreased by 24% and unrestricted net position now stand at$1.144 million, compared to $4.984 million in prior year. This represents a 336% decrease in unrestricted and is due to the transfer of funds to governmental activities to facilities in the day to day operation of the City. Net Position-Government-wide Governmental Business-type Activities Activities Total 2013 2012 Chanee 2013 202 Change 2013 2012 Change (restated) (restated) Current and other assets $ 5,550,053 $ 4,634,416 16% $ 10,003,592 $ 12,413,152 -24% $15,553,645 $ 17,047,568 -10% Capital assets,net 19,908,158 16,799,873 16% 14,379,152r 11,562,238 20% r 34,287,310r 28,362,111 17% r r Total assets 25.458211 21.434289 16% 24.382.744 23.975.390 1.7% 49.840.955 45.409.679 9% Other liabilities 3,831,186 873,989 77% 6,815,043 3,800,299 44% 10,646,229 4,674,288 56% Long-term liabilities 8,287,421 8,593,530 4% 3,682,698 4, ,953 -24% 11,970,119 13,171,483 -10% Total liabilities 12.118.607 9.467.519 22% 10.497,741 2 20% 22.616.348 4.674288 72ts Net assets: Invested in capital assets, net ofrelated debt 12,730,145 9,735,712 24% 1 844 7,793,540 24% 22,970,989 17,529,252 24% r Restricted 1,123,862 3,524,297 -214% 2,5 2,820,053 88.7% 3,624,156 6,344,350 -75% Unrestricted (514,403) (1,293 239) -151% 86 4,983,545 -336% 629,462 3,690,306 486% Total net position $ 13,339,604 $ 11,966,770 10% 1 5, $ 15,597,138 12% $27224,607 $40,735,391 50% A?*rs otal Net Position in millions) Total Net Position $30.0 $25.0 $20.0 $15.0 $10.0 $5.0 $- 2009 2010 2011 2012 2013 Fiscal Year 7 STATEMENT OF NET POSITION cont'd By far the largest portion of the City's net position (24%) reflects its investment in capital assets (e.g., land, buildings and building improvements, and equipment); less any related debt used to acquire those assets that is still outstanding. The City uses these capital assets to provide services to its citizens; consequently these assets are not available for future spending. Although the City's investment in its 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, since the capital assets themselves cannot be used to liquidate these liabilities. STATEMENT OF ACTIVITIES Activities in the City (Table 2) reflected a (1%) decrease in overall revenues compared to the prior year and total City expenses reflected a 19.46 % increase. The governmental activities represent the most significant ctivity within the City. Program revenues remained static although there was an increase ' grant activity offset by a decrease in charges for services. The business-type activities represent the wate nd ewer erations of the City which included a 17.31% decrease in total revenues. crease is primarily due to customer adjustments. The Transfers in (out) changed by appro .73%. In FY 2013, the $ 3,685,262 transfer is from the Water and Sew Lte General Fund. Total program expenses in gove ities increased by 18.72% from the previous year with significant fluctu Qived eral government, highways and streets. The table below presen ary of changes in net position for the years ended September 30, 2013 and 2 from the government-wide Statement of Activities: The rest of this page left intentionally blank 8 STATEMENT OF ACTIVITIES cont'd Changes in Net Position Governmental Business-type Activities Activities Total 2012 2013 2012 2012 Revenues: Change 2013 (Restated) Change 2013 Restated Change Program revenues: Charges for services $ 937,683 $ 1,916,190 -104.35% $ 9,722,795 $ 11,369,797 -16.94% $ 10,660,478 $13,285,987 -24.63% Operating/capital grants and coot. 2,893,977 1,916,028 33.79% General revenues: 207,031 100.00% 3,101,008 1,916,028 38,21% Property taxes 5,842,217 6,736,246 0 2,145,628 1,904,824 11.22% Other taxes 15.22% 0.00% 5,842,217 6,736,246 -15.30% Franchise fees 1,484,133 1,452,022 0.00% 2,145,628 1,904,824 11.22% Intergovernmental,unrestricted 524,198 76.38% cted 2. 8% 0.00% 1,484,133 1,452,022 2.16% Unrestricted interest earnings 0.00% 2,219,388 524,198 76.38% 84 1,909 -2172.62% 1,608 0.00% Miscellaneous 859,081 859.081 100.00% 84 3,517 4086.90% Total revenues 276,965 0.00% 859,081 276,965 67.76% 16,382191 14,451417 11.79%� 9,929,826 11,648,370 Eapensesandtransfers 17.31% 26,312,017 26,099,787 O.gl% General government 7,423,270 5,402,679 27.22% Public safety 7,028,418 5,570,149 0.00% 7,423,270 5,402,679 27.22% Highways and streets 37.11% 0.00% 7,028,418 5,570,149 2,773,221 1,744,207 37.11% _ 20.75% Culture and recreation 1,204,669 0.00% 2,773,221 1,744,207 37.11% Human services 982,440 18.45% 0.00% 1,204,669 982,440 18.45%Interest and fiscal charges _ - 0.00% 0.00% ,948 -14.30% - 0.00% 265,041 302 Water and sewer 0.00% 265,041 302,948 -14.30% Stormwater - 0.0 6,442, 5,954,797 7.57% 6,442,588 5,954,797 0 0.00 0.00/o Solidwaste 0 1,145,855 5.68% 1,214,902 1,145,855 0.00% Transfers 0.00% 29 , 362,206 -21.05% (3,685,262) 2,000,000) 73% 3,685,262 0 299,209 362,206 0.00% Total Expenses 15,009,357 12,002,4 ° 2,000,000 45.73/o - - 0.00% 3/ 1,641,961 9,462,858 18.72% 26,651,318 21,465,281 19.46% Increase(decrease)in net positions 1,372,834 2,448,99 (1,712,135) 2,185,512 227.65% (339,301) 4,634,506 1465.90%� Net position,beginning 11,966,770 9 0 046/ 15,597,138 13,874,577 1104% 28,026,860 23,392,352 16.54% Net positions,ending $ 13,339,604 966,7 0 $ 13,885,003 $ 16,060,090 -1 67% $ 27,687,559 $28,026,858 73% Sources of Revenue for Fiscal Year 2013 Miscellaneous Intergovernmental, 5% unrestricted Unrestricted 13% interest earnings Franchise fees 1111 9% Charges for services 6% Operating/capital grants and coot. Other taxes 18% 13% revenues: 0% Property taxes 36% 9 STATEMENT OF ACTIVITIES cont'd Changes in Net Position Governmental Business-type Activities Activities Total 2012 2012 2013 2012 Change 2013 (Restated) Change 2013 (Restated) Change Revenues: - Program revenues: Charges for services $ 937,683 $ 1,916,190 -104.35% $ 9,722,795 $ 11,369,797 -16.94% $ 10,660,478 $13,285,987 -24.63% Operating/capital grants and cont. 2,893,977 1,916,028 33.79% 207,031 - 100.00% 3,101,008 1,916,028 38.21% General revenues: Property taxes 5,842,217 6,736,246 -15.30% - 0.00% 5,842,217 6,736,246 -15.30% Other taxes 2,145,628 1,904,824 11.22% 0.00% 2,145,628 1,904,824 11.22% Franchise fees 1,484,133 1,452,022 2.16% 0.00% 1,484,133 1,452,022 2.16% Intergovernmental,unrestricted 2,219,388 524,198 76.38% 0.00% 2,219,388 524,198 76.38% Unrestricted interest earnings 84 1,909 -2172.62% 1,608 0.00% 84 3,517 -4086.90% Miscellaneous 859,081 100.00% 276,965 0.00% 859,081 276,965 67,76% Total rev®ues 16,382,191 14,451,417 11.79%� 9,929,826 11,648,370 -17.31% 26,312,017 26,099,787 0.81% Expenses and transfers General government 7,423,270 5,402,679 27.22% - - 0.00% 7,423,270 5,402,679 27.22% Public safety 7,028,418 5,570,149 20.75% 0.00% 7,028,418 5,570,149 20.75% Highways and streets 2,773,221 1,744,207 37.11% 0.00% 2,773,221 1,744,207 37.11% Culture and recreation 1,204,669 982,440 18.45% 0.00% 1,204,669 982,440 18.45% Human services - - 0.00% 0.00% - - 0.00% Interest and fiscal charges 265,041 302,948 -14.30% 0.00% 265,041 302,948 -14.30% Water and sewer - - 0.0 6,442, 5,954,797 7.57% 6,442,588 5,954,797 0.00% Stormwater 0.00 0 1,145,855 5.68% 1,214,902 1,145,855 0.00% Solidwaste 0.00% 29 362,206 -21.05% 299,209 362,206 0.00% Transfers (3,685,262) (2,000,000) 73% 3,685,262 2,000,000 45.73% - - 0.00% Total Expenses 15,009,357 12,002,4 30 1641,961 9,462,858 18.72% 26,651,318 21,465,281 19.46% Increase(decrease)in net positions 1,372,834 2,448,99 (1,712,135) 2,185,512 227.65% (339,301) 4,634,506 1465.90% Net position,beginning 11,966,770 9 20,46% 15,597,138 13,874,577 11.04% 28,026,860 23,392,352 16.54% Net positions,ending $ 13,339,604 1966,7 ° $ 13,885,003 $ 16,060,090 -15 67% $ 27,687,559 $28,026,858 °(8 Sources of Revenue for Fiscal Year 2013 Miscellaneous Intergovernmental, 5% unrestricted Unrestricted 13% interest earnings Franchise fees Charges for 9% services 6% Operating/capital grants and cont. Other taxes 1 g% revenues: 13% 6% Property taxes 36% 9 FINANCIAL ANALYSIS OF THE CITY'S FUNDS As noted earlier, the City uses fund accounting to ensure and demonstrate compliance with finance-related legal requirements. Governmental Funds The focus of the City's governmental funds is to provide information on near-term inflows, outflows, and balances of spendable resources. Such information is useful in assessing the City's funding requirements. In particular, unassigned fund balance may serve as a useful measure of a government's net resources available for spending at the end of the fiscal year. As of the end of fiscal year 2013, the City's governmental funds reported combined ending fund balances of$2.594 million, decrease of$1.166 million in comparison with the prior year increase of $1.272 million. Most of the fund balance is restricted to indicate that it is not available for new spending because it has already been committed or restricted to 1) pay debt service ($1.1 million), 2) pay transportation $1.3 million, or 3)various other purposes ($.472 million). General Fund The general fund is the chief operating fund of the the end of the current fiscal year, the total fund balance reached $1.225 million. The f 0 balan f the City's general fund remained relatively unchanged from the prior fiscal year Revenue in the general fund is shown in tkbfollo schedule: Increase Percent 2013 4C P t 2012 Percent (Decrease) of Increase General Fund Revenues Amount ota Amount of Total From 2012 (Decrease) Property $ 5 48% $ 6,736,246 54% $ (894,029) -13% Utility service taxes 40,076 9% 863,608 7% 176,468 20% Communication service taxes 127 4% 559,299 4% (33,172) -6% Local option,use and fuel taxes 27 2% 275,054 2% (865) 0% Franchise fees 1,484,1 12% 1,452,012 12% 32,121 2% Local business taxes 305,236 3% 206,873 2% 98,363 48% Licenses and permits 552,400 5% 624,671 5% (72,271) -12% Intergovernmental 731,061 6% 456,765 4% 274,296 60% Charges for services 73,592 1% 32,788 0% 40,804 124% Fines and forfeitures 311,346 3% 843,115 7% (531,769) -63% Interest - 0% 1,888 0% (1,888) -100% Other revenue 916,818 7% 437,914 3% 478,904 1090/0 Total Revenues $ 12,057,195 100% $ 12,490,233 100% (433,038) -3% 10 FINANCIAL ANALYSIS OF THE CITY'S FUNDS cont'd Total revenues of the general fund decreased by 3% due to decrease in Property taxes, Fines and forfeitures and Licenses and permits, which were offset by the increase in Utility service taxes, local business taxes and charges for services. Fines and forfeitures decreased by $531,769 as compared to last fiscal year. The other revenue sources mentioned above are directly related to consumer spending and the decrease could be attributed to the current economic condition of the local and national economy. Expenditures in the general fund(excluding capital outlay) are shown in the following schedule: Increase Percent 2013 Percent 2012 Percent (Decrease) oflncrease General Fund Expenditures Amount of Total Amount of Total From 2012 (Decrease) General government 6,471,131 40% 5,314,607 39% 1,156,524 22% Public safety 6,135,686 38% 5,944,172 43% 191,514 3% Highways and streets 2,266,573 14% 1,629 0 12% 636,583 39% Culture and recreation 1,126,892 7% 667 6% 298,225 36% Debt service 188,008 1% - 0% 188,008 0% Transfers 0% 0% - 0% Total expenditures 16,188,290 100°/ 13917,436 100% 2,470,854 18% Total expenditures of the general fund ' ease 18% due to increase in expenditures in general government, highways and streets r nd recreation. Increase in the expenditure of the culture and recreation is pri ly t construction of Helen Miller which is grant funded and increase in highway ree is due to improvement of several streets projects which are 50% grant funded. re ernment function is primarily due to termination and settlements payment ma City in current year. Proprietary Funds The City's proprietary fu sta ents provide the same type of information found in the government-wide financial st ents, but in more detail. The unrestricted net position of the water and sewer, stormwater, and solid waste funds at the end of the current fiscal year amounted to $1.302 million, ($158.8) thousand deficits in the stormwater and solid waste funds combined. The total increase in net position before transfers for all enterprise funds was $1.973 million. Other factors concerning the finances of these funds have already been addressed in the discussion of the City's business-type activities. 11 GENERAL FUND BUDGETARY HIGHLIGHTS During the year there was a $499,649 increase in the appropriations between the original and final amended budget excluding non-departmental expenses. Non-departmental budgeted expenses were increased by approximately $10.5m because the City had anticipated the purchase of the old administrative building. Additionally transfers in were $2.5m higher than anticipated to cover costs in the general fund. The following are the other significant components of the increase: 0 $50,000 for additional fuel costs; • $198,280 for personnel costs related to 3%COLA; • $20,000 for recreational programs and activities; • $133,335 for weed and seed grant expenditures. Actual expenditures exceeded budgeted appropriations in the aggregate for the Peoples' Transportation Tax Fund. CAPITAL ASSETS AND DEBT ADMINISTRATION Capital Assets The City's capital assets for its governmental d b iness- pe activities as of September 30, 2013 amounts to $34.287 million (net of accu d depreciation). Capital assets include land, buildings and buildings improvement, m . ery equipment, park facilities, roads and utility systems. The total increase in the City's c it for the current fiscal year was 18.9%. Major capital assets additions d g t cu t fiscal year included the following: • Construction for Se g n parks improvements; total construction costs for the current fiscal year w 1,81 , 0 • $413, 997 Ford expedi s fo ommissioners and police department • $463,529 drainage and ay improvement Burlington Street Segal and Ingram parks improvements • $657,490 drainage and roadway improvement NW 143 Street • $133,350 drainage and roadway improvement Rutland • $395,827 drainage and roadway improvement NW 128 Street Additional information on the City's capital assets can be found in Note 7 of this report. Long Term Debt At the end of the current fiscal year the city had total debt outstanding of $11.567 million, a decrease of 3.3% from prior year. Additional information on the City's long-term debt can be found on Note 9 on of this report. 12 ECONOMIC FACTORS AND NEXT YEAR'S BUDGET AND RATES In developing the Fiscal Year 2014 budget,the following economic and other factors were considered: The City's gross property taxable value for operating purposes decreased for the third consecutive year. Special programs funding were reduced. •Directive from the City Commission to preserve all full-time employees. •Freezing all salaries that are not impacted by union negotiations. The fiscal year 2014 budget approved millage rate is 9.1000. During fiscal year 2014, the City will be looking at the following programs/initiatives: Using CRA and other tools to continue redevelopment opportunities. Continue upgrades to bring the final City's pump stations out of moratorium. Complete construction on the new Helen Miller Cent and Improvement to Segal Park. Implement new revenues enhancement sources Secure funding for the City of Opa-Locka's Ad is 've Offices. All of these factors were considered in prepa t ity o Opa-Locka's budget for the 2014 fiscal year. Requests for Information This financial report is design to vid a general overview of the City of Opa-Locka's finances for all those with an inte i ances. Questions concerning any of the information provided in this report or dditional information should be addressed to The City of Opa-Locka, Finance D rtmen 34 NW 135st Opa-Locks Boulevard, Building B, Opa Locka, Florida 33054. 13 Basic Fina ia�tatements O CITY OF OPA-LOCKA,FLORIDA Statement of Net Position September 30, 2013 Governmental Proprietary ASSETS Activities Activities Total Cash and equity in pooled cash $ 323,469 $ 6,708,256 $ 7,031,725 Receivables,net 473,231 2,175,399 2,648,630 Internal balances 1,596,041 (1,596,041) - Due from other Governments 2,312,568 207,031 2,519,599 Inventories 33,435 4,652 38,087 Other assets 23,373 4,001 27,374 Restricted cash and cash equivalents 787,936 2,500,294 3,288,230 Capital assets,not being depreciated 5,043,249 2,205,353 7,248,602 Capital assets,being depreciated net 14,864,909 12,173,799 27,038,708 Total assets 25,458,211 24,382,744 49,840,955 LIABILITIES Accounts payable and accrued liabilities $ N122,444 $ 1,769,857 $ 4,603,001 Overdrawn cash 2,781,795 2,781,795 Due to other governments 1,046 123,507 Customers' deposits - 1,612,777 1,612,777 Noncurrent liabilities: Due within one year Compensated absences 324,899 - 324,899 Long term debt 550,682 649,568 1,200,250 Due in more than one year Compensated absences 946,445 171,921 1,118,366 OPEB obligation 162,963 22,037 185,000 Contingency 300,000 - 300,000 Long-term debt 6,878,013 3,488,740 10,366,753 Total liabilities 12,118,607 10,497,741 22,616,348 NET POSITION Invested in capital assets,net of related debt 12,730,145 10,240,844 22,970,989 Restricted for: Debt service 1,123,862 2,500,294 3,624,156 Unrestricted (514,403) 1,143,865 629,462 Total net position $ 13,339,604 $ 13,885,003 $27,224,607 See notes to basic financial statements. 14 r N M 'o r- QA b 00 � N o0 l� 01 00 l� Vl �c U1 o0 � M M [� 00 M 00 00 00 M O �O C!1 O O [� �D �O �--� O O� O M 00 N �--� O --� N M O I W M 00 O1 a M C\ vi N a\ M T N 7 O �D d' vi Oi C� O O� 10 N M M l� �O �c `D �O M in [� 00 of 00 N l� O v1 vi M N �D �O N 00 O vl 00 N 00 N — C\ 00 o0 O v1 N M (� 00 -1 M O e vi N N 00 N N N w O 69 69 O �O vl 00 N N M 01 W) M O cq U u , ' ' ' Q\ (2; �o cl rl vi W) N O N n W) 00 000 0 L � .V N M � ^ '•' � M C Cr � bA 69 a N 01 O1 M r 01 �D o0 N M O O r,Q C Cp M N 00 M a0 00 00 � r- N N 7 = � � vi OT O, W) vi N �o �o C� 10 7 00 7 N l- O , o0 M [- �O 'D M W o0 O t/1 00 N 00 00 00 � O Vl N M f� o0 lz N M C O� M A 4-S .. C O O N O N M MO �T I .� .fl � o � l� �O v� O� O � �.•+ 00 0 7 N O V1 O `n ~ a +-' 73 � G � O M � 00 tqU� � ��•� 'O G t � O � � M � p � � � O '7�� O 4: W a La ca W $° aLa 00 M N M M It 00 Vn 00 N N d •Q r•+ j •oo .d v] F-r bb "0 y M [- 7 v) N N O � N k � _V., �•' � � � 'O C CT, � w v M a 00 C, C14 t- W .Q . •Q z a` z z 0 00 N 7 oo0 O O Qcs1 N O W C1 b M N N r O �. R O l- � N IO 7 N N an l� [� N N b9 bq � � y ca Z c ° :a 3 ci 7 O GL Fr CTY OF OPA-LOCKA,FLORIDA Balance Sheet-Governmental Funds September 30, 2013 People's Capital Projects Safe Other Nonmajor Total General Transportation Improvement Neighborhood Governmental Governmental Fund Tax Debt Service Capital Projects Funds Funds ASSETS Cash and equity in pooled cash $ 117,068 $1,308,589 $ - $ - $ 329,086 $ 1,754,743 Receivables,net 387,823 - 85,408 - - 473,231 Other Gov't account receivables 547,075 - - 1,760,042 5,451 2,312,568 Due from other fiords 1,879,475 116,134 558,914 - 337649 2,892,172 Inventories 33,435 - - - - 33,435 Prepaid items 23,373 - - - - 23,373 Restricted cash and cash equivalents 200,698 - 520,106 67,132 - 787,936 Total assets $3,188,947 $1,424,723 $ 1,164,428 $ 1,827,174 $ 672,186 $ 8,277,458 LIABILITIES AND FUND BALANCES Liabilities: Accounts payable and accrued liabilities $1,862,113 $ 85,296 $ 0,56 841,756 $ 3,413 $ 2,833,144 Overdrawn cash - - - 1,431,274 - 1,431,274 Due to other fiords - - - 99,832 1,196,299 1,296,131 Other Govt account payables 101,524 - - - 20,937 122,461 Total liabilities 1,963,637 85, ,566 2,372,862 1,220,649 5,683,010 Fund Balance Nonspendable: Inventories 3 - - - - 33,435 Prepaid items ,37 - - - - 23,373 Restricted for: Debt Service - 1,123,862 - - 1,123,862 Assigned for: Public Safety - - - 152,348 152,348 Transportation - 1,339,427 - - 1,339,427 Capital projects fiords 263,012 263,012 Unassigned: 1,168,502 - - (545,688) (963,823) 341,009) Totalfimd balances 1,225,310 1,339,427 1,123,862 (545,688) (548,463) 2,594,448 Total liabilities and fiord balances $3,188,947 $1,424,723 $ 1,164,428 $ 1,827,174 $ 672,186 $ 8,277,458 See notes to basic financial statements. 16 CITY OF OPA LOCKA,FLORIDA Reconciliation of Balance Sheet-Governmental Funds to the Statement of Net Position September 30,2013 Fund balances- total governmental fiords $ 2,594,448 Amounts reported for govemmental activities in the statement of net assets are different because: Capital assets used in governmental activities are not financial resources and,therefore, are not reported in the governmental funds. Capital Assets Net ofAccum. Depreciation 19,908,158 Debt (7,428,695) Compensated absences and OPEB (1,271,344) Other post employment benefits (162,963) Accrued legal settlement (300,000) Net adjustment 10,745,156 Net position of governmental activities $ 13,339,604 See notes to basic financial statements. 17 CTY OF OPA-LOCKA, FLORIDA Statement of Revenues, Expenditures and Changes in Fund Balances- Governmental Funds For the Year Ended September 30, 2013 Peoples' Capital Safe OtherNonmajor Total Transportation Improvement Neighborhood Governmental Governmental General Tax Debt Service Capital Projects Funds Funds REVENUES: Taxes: Property taxes $5,842,217 $ - $ - $ - $ - $ 5,842,217 Utility taxes 1,040,076 1,040,076 Corrmninications service taxes 526,127 - - 526.127 Local option,use and fuel taxes 274,189 - - - - 274,189 Local business taxes 305,236 305,236 Franchise fees 1,484,133 - - - - 1,484,133 Permits and fees 552,400 552,400 Intergovernmental 731,061 603,115 1,602,134 2,117,587 59,468 5,113,365 Charges for Services 73,592 - - - 345 73,937 Fines and Forfeitures 311,346 - - - - 311,346 Interest - - - 84 - 84 Other 916,818 - - - 916,818 Total Revenues 12,057,195 603,115 1,602,134 117,671 59,813 16,439,928 EXPENDITURES: Current: General goverrunent 6,471,131 - - 136,393 6,607,524 Public Safety 6,135,686 - - - 138,951 6,274,637 Highways and streets 2,266,573 277,289 - - 2,543,862 Culture and recreation 1,126,892 - - - 1,126,892 Debt service: Principal 170,747 0,000 - - 560,747 Interest 17,261 - 247,780 - - 265,041 Capital outlay 837, 1 4 - 2,373,641 - 4,360,437 Total expenditures 17,02 2 6,473 637,780 2,373,641 275,344 21,739,140 Excess(deficiency)of revenues over expenditures (4,968,777) (823,288) 964,354 (255,970) (215,531) (5,299,212) OTHER FINANCING SOURCES (USES): Debt Proceeds 447,982 - - 447,982 Transfers in 4,512,120 - - 142,242 4,654,362 Transfers out - - (969,100) - - (969,100) Total other financing sources(uses) 4,960,102 (969,100) 142,242 4,133,244 Net change in fund balances (8,675) (823,288) (4,746) (255,970) (73,289) (1,165,968) Fund balances,beginning 1,233,985 2,162,715 1,128,608 (289,718) (475,174) 3,760,416 Fund balances,ending $1,225,310 1,339,427 1,123,862 (545,688) 548,463) 2,594,448 See notes to basic financial statements. 18 CITY OF OPA LOCKA,FLORIDA Reconciliation of the Statement of Revenue, Expenditures and Changes in Fund Balances- Governmental Funds to the Statement of Activities For the Year September 30, 2013 Net change in fund balances- total governmental funds $(1,165,968) Amounts reported for governmental activities in the statement of activities are different because: Governmental funds report capital outlays as expenditures. However, in the statement of activities,the cost ofthose assets is depreciated over their estimated useful lives. Expenditures for capital outlays 3,714,569 Less current depreciation (606,296) The effect of other transaction involving capital assets: Capital lease proceeds (447,982) The issuance of long term debt provides current financial reso o governmenal fiords, while the repayment of the principal of longterm debt of go s.Neither transaction, however, has any effect on net assets. Also e rrtal s report the effect of issuance costs,premiums, discounts,and s' hen debt is first issued, whereas these amounts are deferred and amort the s nt activities.This amount is the net effect of these differences in the treatme debt and related items. Principal payments of debt 390,000 Principal payments of capital lease 170,747 Some items reported in the s nt c s do not require the use of current financial resources refore e not reported in the governmental fiords.These activities consist o . Contingent liability-legal settlement (300,000) Change in other post employment benefits (162,963) Change in compensated absences (219,273) Change in net position of governmental activities $ 1,372,834 See notes to basic financial statements. 19 CTY OF OPA-LOCKA, FLORIDA Statement of Net Position-Proprietary Funds September 30, 2013 Business-type Activities -Enterprise Funds Other Nonmajor Water and Enterprise Sewer Funds Total ASSETS Current assets: Cash and equity in pooled cash $ 5,848,364 $ 859,892 $ 6,708,256 Receivables,net 1,756,107 - 1,756,107 Estimated unbilled services 411,894 7,398 419,292 Due from other governments 207,031 - 207,031 Other Assets - 4,001 4,001 Inventories 4,654 - 4,654 Due from other funds - 2,242,999 2,242,999 Total current assets 8,228,050 3,114,290 11,342,340 Noncurrent assets: Restricted cash and cash equivalents 2, - 2,500294 Non depreciable capital assets 05353 , - 2,205,353 Capital assets,net 1,9 ,488 225,311 12,173,799 Total noncurrent assets 4,135 225,311 16,879,446 Total assets 24, ,185 $ 3,339,601 $ 28,221,786 LIABILITIES Current liabilities: Accounts payable and accrued liab 1,517,024 252,833 1,769,857 Overdrawn cash - 2,781,795 2,781,795 Due to other funds 3,734,068 104,974 3,839,042 Due to other governments 1,046 - 1,046 Deposits 1,495,222 117,555 1,612,777 Current portion of long term debt 608,278 41,290 649,568 Total current liabilities 7,355,638 3,298,447 10,654,085 Noncurrent liabilities: Compensated absences 158,615 13,306 171,921 OPEB 19,393 2,644 22,037 Long term debt 3,335,168 153,572 3,488,740 Total noncurrent liabilities 3,513,176 169,522 3,682,698 Total liabilities 10,868,814 3,467,969 14,336,783 NET POSITION Invested in capital assets,net of related debt 10,210,395 30,449 10,240,844 Restricted 2,500,294 - 2,500,294 Unrestricted 1,302,682 (158,817) 1,143,865 Total net position $ 14,013,371 $ (128,368) $ 13,885,003 See notes to basic financial statements. 20 CTY OF OPA-LOCKA,FLORIDA Statement of Revenues, Expenses and Changes in Net Position-Proprietary Funds For the Year Ended September 30, 2013 Business-Type Activities-Enterprise Funds Othe r Nonmajor Water and Enterprise Sewer Funds Total Operating Revenues: Charges for services $ 7,910,472 $ 1,218,172 $ 9,128,644 Other revenues 801,182 - 801,182 Total operating revenues 8,711,654 1,218,172 9,929,826 Operating expenses: Operating,administrative and maintenance 5,655,004 1,440,519 7,095,523 Depreciation 624,152 69,647 693,799 Total operating expenses 6,279 6 1,510,166 7,789,322 Operating income (loss) 2,49 (291,994) 2,140,504 Non-operating revenues (expenses) Interest and fiscal charges 63,432) (3,945) (167,377) Total non-operating revenues (expenses) 9432) (3,945) (167,377) Income before transfers 2,269,066 (295,939) 1,973,127 Transfer in(out) (3,685,262) - (3,685,262) Change in net position (1,416,196) (295,939) (1,712,135) Net position,beginning 15,892,519 167,571 16,060,090 Prior period adjustment (462,952) - (462,952) Net position,beginning restated 15,429,567 167,571 15,597,138 Net position,ending $ 14,013,371 $ (128,368) $ 13,885,003 See notes to basic financial statements. 21 CITY OF OPA-LOCKA Statement of Cash Flows For the Year Ended June 30, 2013 Business-Type Activities-Enterprise Funds Other Nonmajor Water and Enterprise Sewer Funds Total Cash flows from operating activities: Cash received from customers $ 9,042,003 $ 1,370,100 $ 10,412,103 Cash paid to vendors (2,997,288) (86,459) (3,083,747) Cash paid to employees (1,665,570) (60,140) (1,725,710) Internal activity payments from(to)other funds,net 1,887,394 (991,959) 895,435 Net cash provided by operating activities 6,266,539 231,542 6,498,081 Cash flows from noncapital financing activities: Transfers to other funds (3,685262) (3,685,262) Net cash used in noncapital financing activities (3,685262) - (3,685,262) Cash flows from capital and related financing activities: Acquisition and construction of capital assets 5,886) (222,927) (3,378,813) Interest paid on long term debt 3,432) Proceeds from debt 43 218,925 795,468 Principal paid on debt (1,188, (24,063) (1212,978) Net cash used in capital and related financing activities (3,931,690) (28,065) (3,796,323) Net increase(decrease)in cash (1,350,413) 203,477 (1,146,936) Cash,beginning 9,699,071 656,414 10,355,485 Cash,ending 8,348,658 859,891 9,208,549 Display as: Unrestricted 5,848,364 859,892 6,708,256 Restricted 2,500,294 - 2,500,294 Total 8,348,658 859,892 9,208,550 Reconciliation of operating inco h provided by operating activities: Operating income(loss) 2,432,498 (295,939) 2,136,559 Adjustment to reconciled operating income to net cash provided by(used m)operating activities: Depreciation expenses 624,152 69,647 693,799 (Increase)decrease in: Cash drawn in excess of bank - 1,132,011 1,132,011 Accounts Receivable 148,002 151,928 299,930 Due from other Governments (7,031) - (7,031) Due from other funds - (961,820) (961,820) Other current assets 78,291 - 78,291 Increase(decrease)in: Accounts Payable and accrued liabilities 1,045,181 162,409 1,207,590 Customer deposits 111,087 - 111,087 Other liabilities 31,579 3,445 35,024 Due to other funds 1,887,394 (30,139) 1,857,255 Due to other governments (84,614) - (84,614) Net Cash Provided by Operating Activities $ 6,266,539 $ 231,542 $ 6,498,081 See notes to basic financial statements. 22 Notes to Basic Fin c'a tatements O CITY OF OPA-LOCKA,FLORIDA Notes to Basic Financial Statements Fiscal Year Ended September 30, 2013 NOTE 1. SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES The City of Opa-Locka, Florida (the "City") in Miami-Dade County, Florida (the "County") was incorporated in 1926 by the Laws of Florida Chapter 13187. The City comprises approximately 4.5 square miles of land and operates under a Commission/City Manager form of government and provides municipal services to its residents, including general government, public safety, transportation, and parks and recreation. The City also operates water, sewer, storm water, and sanitation enterprises. The accounting policies of the City conform to accounting principles generally accepted in the United States of America (GAAP) as applied to governmental units. This report, the accounting systems, and classification of accounts conform to standards of the Governmental Accounting Standards Board(GASB), which is the accepted standard-setting body for establishing governmental accounting and financial reporting principles. The more significant accounting policies of the City are described below. A. Reporting Entity The financial statements were prepared in accordance h B Statement No. 14, The Financial Reporting Entity, as amended by GASB Statement . 39, wh establishes standards for defining and reporting on the financial reporting entity. T fi cial reporting entity consists of the City, organizations for which the City is financially acc ble and other organizations for which the nature and significance of their relationship he are such that exclusion would cause the reporting entity's financial statements to be m ea incomplete. The City is financially accountabl r om nent unit if it appoints a voting majority of the organization's governing board an impose its will on that organization or there is potential for the organization vi specific financial benefits to, or impose specific financial burdens, on the City. Base( th c ria, entities were evaluated for inclusion in the City's reporting entity with the foll ' g res ts: The City passed ordinances in pri years establishing various neighborhood improvement districts. The following neighborhood improvement districts, which are considered to be component units of the City, have not been included in the financial statements because there has been no financial activity for several years and the funds have no assets, liabilities, or fund balances. 1) East-West Neighborhood Improvement District 2) Ali-Baba Neighborhood Improvement District 3) Niles Garden Neighborhood Improvement District B. Government-wide and Fund Financial Statements The government-wide financial statements (i.e., the statement of net position and statement of activities) report information on all of the activities of the City. For the most part, the effect of inter-fund activity has been removed from these statements. Governmental activities, which normally are supported by taxes and intergovernmental revenues, are reported separately from business-type activities, which rely to a significant extent on fees and charges for support. 23 CITY OF OPA-LOCKA,FLORIDA Notes to Basic Financial Statements Fiscal Year Ended September 30, 2013 NOTE 1. SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES (Continued) B. Government-wide and Fund Financial Statements (Continued) The statement of activities demonstrates the degree to which the direct expenses of a given function are offset by program revenues. Direct expenses are those that are clearly identifiable with a specific function. Amounts reported as program revenues include 1) charges to customers or applicants who purchase, use of directly benefit from goods, services, or privileges provided by a given function, and 2) grants and contributions that are restricted to meeting the operational or capital requirements of a particular function. Taxes and other items not included among program revenues are reported as general revenues. Separate financial statements are provided for governmental funds and proprietary funds. Major individual governmental funds and major individual enterprise funds are reported as separate columns in the fund financial statements. All remaining governmental funds are aggregated and reported as nonmajor funds. C. Measurement Focus, Basis of Accounting, and Fina I Statement Presentation The government-wide financial statements are repo2ft using economic resources measurement focus and the accrual basis of accounting, as ar a opriet fund statements. Revenues are recorded when earned and expenses are recorde a liability is incurred, regardless of the timing of related cash flows. Propert y taxes a eco d as revenues in the year for which they are levied. Grants and similar items are recogm v e as soon as all eligibility requirements imposed by the provider have been met. Governmental fund financial sta en ported using the current financial resources measurement focus and the modi ied a is of accounting. Revenues are recognized as soon as they are both measurable a evenues are considered to be available when they are collectible within the curre eriod o oo enough thereafter to pay liabilities of the current period. For this purpose, the City co ' ers enues to be available if they are collected within sixty (60) days of the end of the cu fiscal period, with the exception of expenditure driven (reimbursements)grants, for which he availability period is one year. Expenditures generally 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. General capital asset acquisitions are reported as expenditures in governmental funds. Proceeds of general long-term debt and acquisitions under capital leases are reported as other financing sources. Property taxes, sales taxes, utility taxes, franchise taxes, licenses, and interest associated with the current fiscal period are all considered to be susceptible to accrual and so have been recognized as revenues of the current fiscal period. All other revenue items are considered to be measurable and available only when cash is received by the City The City reports the following major governmental funds: The General Fund is the general operation fund of the City. It accounts for all financial resources of the general government, except those required to be accounting for in another fund. 24 CITY OF OPA-LOCKA,FLORIDA Notes to Basic Financial Statements Fiscal Year Ended September 30, 2013 NOTE 1. SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES (Continued) C. Measurement Focus, Basis of Accounting, and Financial Statement Presentation The Peoples Transportation Tax Fund accounts for the City's prorated share of the Charter County Transit System Surtax proceeds used toward projects and programs such as public transportation operations. The Capital Improvement Debt Service Fund is used to account for the sinking fund requirements of the Series 2011 A and B Capital Improvement Revenue Bonds. The Safe Neighborhood Capital Projects Fund accounts for revenue and expenditures of the CDBG and General Obligation Bonds funds from Miami-Dade County. The City reports the following major proprietary funds: The Water and Sewer Fund is used to account for operation and maintenance of the City's water and sewer system. As a general rule the effect of inter-fund activity h een eli ted from the government-wide financial statements. Exceptions to this general ar ayments and other charges between the City's water and sewer function and various other ctions of the government. Elimination of these charges would distort the direct cos p am revenues reported for the various functions concerned. Proprietary funds distinguish op e mg eve es and expenses from non-operating items. Operating revenues and expenses It from providing services and producing and delivering goods in connecti th proprietary fund's principal ongoing operations. The principal operating revenue the ater and sewer, solid waste and stormwater enterprise funds, are charges to custo for es and services. Operating expenses for enterprise funds include the cost of sales and se a dministrative expenses, and depreciation on capital assets. All revenues and expenses not m ng this definition are reported as non-operating revenues and expenses. When both restricted and unrestricted resources are available for use, it is the City's policy to use restricted resources first, then unrestricted resources as they are needed. The preparation of financial statements in conformity with accounting principles generally accepted in the United States of America requires management to make estimates and assumptions that affect amounts reported in the financial statements and accompanying notes. Although these estimates are based on management's knowledge of current events and actions it may undertake in the future, they may ultimately differ from actual results. 25 CITY OF OPA-LOCKA,FLORIDA Notes to Basic Financial Statements Fiscal Year Ended September 30, 2013 NOTE 1. SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES (Continued) D. Assets,Liabilities, and Net Position or Fund Balance 1. Encumbrances Encumbrances accounting, under which purchase orders, contracts and other commitments for the expenditure of monies are recorded in order to serve that portion of the applicable appropriation, is employed in the General and Capital Projects Funds. Encumbrances outstanding at the balance sheet date are canceled. 2. Deposits and Investments The City considers cash on hand, cash with fiscal agents, demand deposits, and certificates of deposit with and original maturity of(90)ninety days or less to be cash and cash equivalents. For purposes of the statement of cash flows for proprie fund types fund, all highly liquid investments (including restricted assets) with maturity o e months or less when purchased are considered to be cash equivalents. �r N Investments, consisting of U.S. Government sec tie nd certificates of deposit with financial institutions, are stated at cost plus accrued interest. 3. Receivables The City recognizes receivables in ' var' s f s based on the accounting basis for that fund. In the government-wide state a 'vables consist of all revenues earned at year-end and not yet received. The City cal tes it 11 ance for uncollectible using historical collection data, specific account analysis, ma ement's judgment. Major receivables balances for the governmental activities inclu r hise fees and utility taxes, and amounts due from other governments. Business-type activ to report utility billings as major receivables. 4. Inventories Inventories are valued at cost, which approximates market, using the first-in, and first-out method. Inventories in the General and Enterprise Funds consist of fuel and expendable supplies held for consumption In the governmental funds, reported inventories are offset by a fund balance reserve which indicates that they do not constitute available spendable resources. 5. Restricted Assets Restricted assets include cash and cash equivalents of the governmental and enterprise funds that are legally restricted as to their use. Cash and cash equivalents are restricted for debt service, customers' deposits, revenue bond requirement, and sewer system improvements. 26 CITY OF OPA-LOCKA,FLORIDA Notes to Basic Financial Statements Fiscal Year Ended September 30, 2013 NOTE 1. SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES (Continued) D. Assets, Liabilities, and Net Position or Fund Balance (Continued) 6. Capital Assets Capital assets, including land, buildings, improvements, infrastructure, and equipment assets, are reported in the applicable governmental or business-type activities columns in the government- wide financial statements. Capital assets are defined by the City as assets with an initial, individual cost of more than $500 and an initial useful life of one year or greater. Such assets are recorded at historical cost if purchased or constructed. Donated capital assets are recorded at estimated fair value at the date of donation. The costs of normal maintenance and repairs that do not add to the value of the asset or materially extended the life of the asset are not capitalized. Major outlays for capital assets and improvements are Sotalized as projects are constructed. Interest incurred during the construction phase of ca assets of business-type activities is included as part of the capitalized value of the assets nst ed. Buildings, improvements, infrastructure and eq a ssets are depreciated using the straight- line method over the following estimated useful li Assets Years Buildings and Building Impro en 10-50 Infrastructure Systems 30 Equipment 3-10 Vehicles 3-10 7. Inter-fund Transaction Activities between funds that are representative of lendingiborrowing arrangements at the end of the fiscal year are referred to as "due to/from other funds" or "advances 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". Non-current portions of long-term inter-fund loan receivables are reported as advances within the governmental funds, and are offset equally by a fund balance reserve account which indicates that they do not constitute expendable available financial resources, and therefore, are not available for appropriation. Transactions among City funds that would be treated as revenues and expenditures or expenses if they involve organizations external to City government are accounted for as revenues and expenditures or expenses in the funds involved. Transactions that constitute reimbursements to a fund for expenditures initially made from it, which are properly applicable to another fund, are recorded as expenditures in the reimbursing fund and as reductions of expenditures in the reimbursed fund. Transactions, which constitute 27 CITY OF OPA-LOCKA,FLORIDA Notes to Basic Financial Statements Fiscal Year Ended September 30, 2013 NOTE 1. SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES (Continued) D. Assets, Liabilities,and Net Position or Fund Balance(Continued) 7. Inter-fund Transactions (Continued) the transfer of resources from a fund receiving revenues to a fund through which the revenues are to be expended, are separately reported in the respective funds' operating statements. 8. Deferred and Unearned Revenues Deferred revenues in the governmental funds represent amounts due, which are measurable, but not available. In the statement of net assets, deferred revenues represent grants and similar items received; however,the City has not met all eligibility requirements imposed by the provider. 9. Compensated Absences It is the City's policy to permit employees to accumulat ith certain limits, earned but unused vacation time and sick leave hours for subsequent usW fo ment upon termination, death or retirement. For government-wide statements and prrietary types, these accumulations are recorded as expenses and liabilities of the ap r' fund in the fiscal year earned. For governmental fund types, the amount of accumu unpaid vacation and sick leave that is payable from available resources is recorded abi of the respective fund only if they have matured, for example, as a result of employee ti and resignations. 10. Net Position and Fund Balanc Net position in the governmen a roprietary funds is categorized as net investment in capital assets; restricted or unrestri . Net e ent in capital assets is the difference between the cost of capital assets, less accumulat epre tion, reduced by the outstanding balances of any borrowings used for the acquisition, constru r improvement of those assets plus unspent bond proceeds. Restricted consists of net position with constraints placed on their use by external parties (creditors, grantors, contributors, or laws or regulations of other governments) or imposed by law through constitutional provisions or enabling legislation. Unrestricted indicates that portion of net position that is available to fund future operations. Sometimes the government will fund outlays for a particular purpose from both restricted (e.g., restricted bond or grant proceeds) and unrestricted resources. In order to calculate the amounts to report as restricted — net position and unrestricted — net position in the government-wide and proprietary fund financial statements, a flow assumption must be made about the order in which the resources are considered to be applied. It is the government's policy to consider restricted — net position to have been depleted before unrestricted—net position is applied. In the fund financial statements, governmental funds report fund classifications that comprise a hierarchy based primarily on the extent to which the City is bound to honor constraints on the specific purposes for which amounts in those funds can be spent. Amounts that are restricted to specific purposes either by a) constraints placed on the use of resources by creditors, grantors, 28 CITY OF OPA-LOCKA,FLORIDA Notes to Basic Financial Statements Fiscal Year Ended September 30, 2013 NOTE 1. SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES (Continued) D. Assets, Liabilities,and Net Position or Fund Balance(Continued) 10. Net Position and Fund Balance(Continued) contributors, or laws or regulations of other governments or b) imposed by law through constitutional provisions or enabling legislation are classified as restricted fund balances. Amounts that can only be used for specific purposes pursuant to constraints imposed by the City Commission through an ordinance or resolution are classified as committed fund balances. Amounts that are constrained by the City's intent to be used for specific purposes but are neither restricted nor committed are classified as assigned fund balances. Assignments are made by City management based on Commission direction. Non-spendable fund balances include amounts that cannot be spent because they are either (a) not in spendable form or (b) legally or contractually required to be maintained intact. Unassigned fund balance represents fund balance that has not been assigned to other funds and that has not been restricted, committed, or assigned to specific purposes within the general fund. 11. Deferred Compensation Plan The City offers its employees a deferred compen on n (the `Plan") created in accordance with Internal Revenue Code Section 457. The Plan, avai to all City employees, allows them to defer a portion of their salary to future years. T 's ect involvement in the Plan is limited to remitting the amounts withheld from em ?nci!1 the Plan's administrator. The deferred compensation plan is not included in t 's statements. NOTE 2. DEFICIT FUND EQUI The City reported fund b ce is of ($762,192), ($545,688), ($344,328), ($383,016), ($151,738) and ($102,136), its S id Waste, Safe Neighborhood Capital Project, Opa-locka Police Youth Academy, Crim ev ion, STOPNAWA and CRA. The City will correct these fund balance deficits by way of a opriating funds from the general fund in its fiscal year 2014- 2015 budget. NOTE 3. PROPERTY TAXES Property taxes are levied on November 1St of each year, at which time taxes become an enforceable lien on property assessed as of the previous January 1St. Tax bills are payable upon receipt with discounts rates of one to four percent allowed if paid prior to March 1 of the following calendar year. Taxes become delinquent on April 1 of the year following the year of assessment and State law provides for enforcement of collection of property taxes by the sale of interest-bearing tax certificates and the seizure of personal property to satisfy unpaid property taxes. Miami-Dade County bills and collects all property taxes for the City, and sells tax certificates for delinquent taxes. The gross taxable value of property, as established by the Miami-Dade County Property Appraiser, at July 1, 2012 upon which the 2012-2013 levy, was approximately $6.1 million. For the year ended September 30, 2013, the millage rate to finance general government services was 9.1000 ($9.1000 per$1,000 of assessed taxable value). The City is permitted by the State to levy a maximum of 10.00 mills ($10 per$1,000 of assessed taxable value) for general government services. 29 CITY OF OPA-LOCKA,FLORIDA Notes to Basic Financial Statements Fiscal Year Ended September 30,2013 NOTE 3. PROPERTY TAXES (Continued) No accrual for the property tax levy becoming due in November 2013 is included in the accompanying financial statements since the legal right to receive these taxes occurs on November 1, 2013, and such taxes are collected to finance expenditures of the fiscal year ending September 30, 2013. NOTE 4. DEPOSITS AND INVESTMENTS As of September 30, 2013 the City's cash are considered to be cash on hand and demand deposits. Deposits All deposits with financial institutions are fully insured or collateralized as required by the City Commission. The deposits are covered by federal depository insurance and, for the amount in excess of such federal depository insurance, by the State of Florida's Public Deposits Act ("the Act"). Provisions of the Act require that public deposits may only made at qualified public depositories. The Act requires each qualified public depository to sit with the State Treasurer eligible collateral equal to or in excess of the required collate as dNArmined by the provisions of the Act. In the event of a failure by a qualified public de story, los , in excess of federal depository insurance and proceeds from the sale of the se 'ti ledged by the defaulting depository, are assessed against the other qualified public depositori f the same type as the depository in default. Investments The City is authorized to make eZtes ves ents in U.S. government, federal agency, and instrumentality obligations at a pn eed the market price at the time of purchase. In addition, the City may inve ' of financial institutions insured by the United States government or agencies these agreements. As of September 30, 2013 the investments. NOTE 5. RECEIVABLES Account Receivables balances as of September 30, 2013,were as follows: Due From Other Governmental Activities Account Taxes Agencies Others Allowance Net General Fund $284,084 $96,974 $547,075 $6,765 $- $934,898 Safe Neighborhood - - 1,760,042 - - 1,760,042 Nonmajor Funds 85,408 5,451 - 90,859 Total $369,492 $96,974 $2,312,569 $6,765 $- $2,785,799 30 CITY OF OPA-LOCKA, FLORIDA Notes to Basic Financial Statements Fiscal Year Ended September 30, 2013 NOTE 5. RECEIVABLES (Continued) Due From Other Business-Type Activities Account Taxes Agencies Others Allowance Net Water and Sewer $1,851,778 $ - $207,031 $411,895 $(95,672) $2,375,032 Solid Waste 16,298 - - (8,900) 7,398 Total $1,868,076 $ - $207,031 $411,895 $(104,572) $2,382,430 NOTE 6. INTERFUND BALANCES AND TRANSFERS Transfers are used to (1)move revenues from the fund that statute or budget requires collecting them to the fund that statute or budget requires to expend them or (2) use unrestricted revenues collected in the General Fund to finance various programs accounted for in other funds in accordance with budgetary authorizations. These transfers are eliminated in the consolidation, by column, for the Governmental Activities. Inter-fund balances result from the time lag between the dates that (1) inter-fund goods and services are provided or reimbursablS&*penditures occur, (2) transactions are recorded in the accounting system and (3)payments betty unds are made. Interfund balances as of September 30, 2013 con ' ed of t ollowing: Due Fro Due to Other Ot nds Funds Major Governmental Funds: General ,5 31 $ 6,708,255 Safe Neighborhood Capital Project 413 86 1,418,013 Nonmajor ,276 3,304,122 Major Business-Type Activ' ' Water and Sewer ,841,103 4,533,524 Nonmajor enterprise funds 1,775,594 594,876 Total $ 16,558,790 $ 16,558,790 Interfund Transfers as of September 30, 2013 consisted of the following: Transfers In Transfers Out General Fund $ 4,512,120 $ - CIP Debt Service Fund - (969,100) Crime prevention Fund 38,075 - CRA 104,167 - Water and Sewer Fund - (3,685,262) Total $ 4,654,362 $ (49654,362) Transfers were used to cover excess expenditures that occurred in the general fund. 31 CITY OF OPA-LOCKA,FLORIDA Notes to Basic Financial Statements Fiscal Year Ended September 30, 2013 NOTE 7. CAPITAL ASSETS The following is a summary of changes in capital assets for the year ended September 30, 2013: 10/1/2012 Additions Disposals 9/30/2013 Governmental Activities: Capital assets not being depreciated: Land $ 3,042,475 $ - - $ 3,042,475 Construction in progress 438,132 1,981,024 (418,382) 2,000,774 Total assets not being depreciated 3,480,607 1,981,024 (418,382) 5,043,249 Capital assets being depreciated: Buildings and improvements 8,675,049 - 8,675,049 Furniture and equipment 4,531,045 501,741 - 5,032,786 Infrastructure 20,058,501 ,650,197 - 21,708,698 Total assets being depreciated 33,264,595 d251515938 - 35,416,533 Less accumulated depreciation for: Buildings and improvemens (2,7 , 57 ,324) - (2,766,281) Furniture and equipment (3,1 (230,927) - (3,390,746) Infrastructure 083, (311,044) - (14,394,597) Total accumulated depreciation 99 (6065295) - (20,551,624) Total capital assets being depreciated,net 195266 1,5455643 - 14,864,909 Governmental activities capital assets, 99,873 $ 3,526,667 (418,382) $19,9085158 Business-Type Activities: Capital Assets not being deprec' Land $ 14,762 $ - - $ 14,762 Construction in progress 88,312 2,102,279 - 2,190,591 Total assets not being depreciated 103,074 2,102,279 - 2,205,353 Capital assets being depreciated: Buildings and improvements - - - - Furniture and Equipment 19,071,513 577,588 (15,565,941) 4,083,160 Infrastructure 4,725,098 368,030 16,032,331 21,125,459 Total assets being depreciated 23,796,611 945,618 466,390 25,208,619 Less accumulated depreciation for: Building and improvements - - - Fumiture and Equipment (8,239,161) (640,737) 4,0415928 (4,837,970) Infrastructure (35635,338) (53,063) (4,508,449) (8,196,850) Total accumulated depreciation (11,874,498) (693,800) (466,521) (13,034,820) Total capital assets being depreciated,net 11,922,113 251,818 (132) 12,173,799 Business-type activities capital assets,net $ 12,0259187 $ 2,985,995 $ (132) $14,379,152 32 CITY OF OPA-LOCKA,FLORIDA Notes to Basic Financial Statements Fiscal Year Ended September 30, 2013 NOTE 7. CAPITAL ASSETS (Continued) Depreciation expense was charged as a function/program to the various departments of the City as follows: Government Activities: General Government $185,610 Public Safety 123,046 Highways and Streets 293,377 Culture and Recreation 4,262 $606,295 NOTE 8. LEASES Operating Leases The City leases building and office facilities under W-canc ble operating leases. Total costs for such leases were $815,480 for the year ended a er 3 2013. The future minimum lease payments for the leases are as follows: Year Ending Governmental sin p September 30, Activities cti 'es Total 2014 $ 250,204 $ 286,204 2015 250 36,000 286,204 2016 ,024 _ 81,024 2017 24 - 81,024 2018 81 - 81,024 Total $ 743,480 $ 72,000 $ 815,480 Capital Leases The City has entered into lease agreements as lessee for financing the acquisition of various vehicles. The City also financed the acquisition of water meter reading equipment. These lease agreements qualify as capital leases for accounting purposes and, therefore, have been recorded at the present value of their future minimum lease payments as of the inception dates. Future minimum payments under the lease agreements and the present value of minimum payments as of September 30, 2013 are as follows: 33 CITY OF OPA-LOCKA,FLORIDA Notes to Basic Financial Statements Fiscal Year Ended September 30, 2013 NOTE 8. LEASES (Continued) Governmental Activities: Governmental Business-type Year Ending September 30, Activities Activities 2014 $ 166,020 $ 498,442 2015 150,325 500,937 2016 117,293 500,937 2017 60,182 77,958 2018 12,382 39,971 Total minimum lease payments 506,202 1,618,245 Less: Amounts representing interest (42,507) (111,785) Total $ 4 , 95 $ 1,506,460 NOTE 9. LONG-TERM DEBT Long-term liability activity for the year ended Septe 0, 2013was as follows: Balance Balance Due in 930/2012 o Reductions 9/30/2013 One year Governmental activites Capital improvement Revenue Bond, Series 2011 0 $ - $ (390,000) $ 6,965,000 $ 403,000 Other liabilities: Capital leases obligation 61459 447,983 (170,747) 463,695 147,682 41,459 447,983 (560,747) 7,428,695 550,682 Compensated absences 1,052,071 292,300 (73,027) 1,271,344 324,899 Total $ 8,593,530 $ 7409283 $ (633,774) $ 8,700,039 $ 875,581 Business-type activities: State Revolving Loan C S 120800020 $ 31,113 $ - $ (31,113) $ - $ - State Revolving Loan CS 12080003P 951,487 - (78,233) 873,254 80,621 State Revolving Loan WW800050 1,814,068 - (65,724) 197489344 1129915 Total loans payable 2,796,668 - (175,070) 2,621,598 193,536 Other Debt: Capital Lease Obligation - 354,863 (34,801) 320,062 66,601 Suntrust Capital lease Obligation 195499367 - (362,969) 1,186,398 378,881 Liability to FDOT 73,845 - (63,595) 10,250 10,550 4,419,880 354,863 (636,775) 4,138,308 6499568 Compensated absences 158,073 17,632 (3,784) 171,921 56,400 Total $ 4,577,953 $ 372,495 $ (638,669) $ 4,310,229 $ 705,968 34 CITY OF OPA-LOCKA,FLORIDA Notes to Basic Financial Statements Fiscal Year Ended September 30, 2013 NOTE 9. LONG-TERM DEBT (Continued) For governmental activities,compensated absences are generally liquidated by the General Fund. Long-Term Debt—Governmental Activities Long-term debt of the City's governmental activities, excluding compensated absences and capital leases, include the Series 2011A&B Capital Improvement Revenue bonds, bearing annual interest rates on the Series A and Series B bonds range from approximately 3.31% to 3.89%, and are payable from a pledge of Grantee Entitlement Revenues which must be shared by the State of Florida, in annual principal installments ranging from $390,000 in 2013 to $670,000 through 2026. Long-Term Debt-Business-Type Activities Long-term debt of the City's business-type activities, excluding compensated absences and capital leases, consists of the following: a) State Revolving Loan Note Project No. CS 1208000 for $480,816, bearing interest at rates ranging from 2.89% to 3.75% due in 20 annual e f$32,365, including interest, from July 31, 1994 through July 31, 2013, secured a lien on dge Revenues as defined by the State Revolving Fund loan agreement. b) State Revolving Loan Note Project No. 00 as amended - for $1.827 million, bearing interest at a rate of 2.56% and 1.54%, d i mi-annual payments of$53,240, including interest, from June 15, 2003 throu ce r 15, 2022, secured by a lien on Pledge Revenues as defined by the State Revolvi u loan Bement. c) State Revolving Loan No reo. 800050 - for $2.375 million, bearing i nterest at a rate of 1.53%, due in 4 mts of$71,143, including interest, secured by a lien on Pledge Revenues as evolving Fund loan agreement. d) Settlement with the Florida ransportation (FDOT) - for $632,954, bearing an implied interest rate of 4.11%, due in 119 monthly payments of$5,319, including interest, from January 2001 through December 2013. In accordance with an agreement between FDOT and the City, payments were temporarily suspended on August 1, 2002 and commenced again on October 1, 2005. e) Capital lease agreement dated May 30, 2006 with a bank in the original amount of$3,400,000 for meter reading equipment. Interest payable 4.219% with principal and interest payments of approximately $105,745 payable monthly beginning December 1 , 2006 through September 1, 2016. f) Various Capital lease agreements with the Ford Motor Company in the original total amount of $354,863 commencing March 15, 2013 and June 14, 2013. Interest payable at 3.79% and 4.00% respectively. Principle and interest payments due monthly in the amounts of approximately$4,001 and $3,119 through May and February 2018, respectively. 35 CITY OF OPA-LOCKA,FLORIDA Notes to Basic Financial Statements Fiscal Year Ended September 30, 2013 NOTE 9. LONG-TERM DEBT (Continued) Annual debt service requirements to maturity for debt outstanding, other than the capital leases, are as follows: Fiscal Year ending Governmental Activities Business-type Activities September 30, Principal Interest Principal Interest 2014 $ 403,000 $ 236,624 $ 582,966 $ 96,282 2015 416,000 222,852 592,852 75,847 2016 430,000 208,619 614,085 54,614 2017 445,000 193,890 206,430 39,290 2018 510,000 177,679 210,939 34,781 2019-2023 2,822,000 610,179 1,008,058 96,886 Thereafter 1,939,000 113,478 602, 23,310 $6,965,000 $1,763,321 $ 3,8J0,2_06 421,010 Summary of Debt Covenants Series 2011A and Series 2011B Capital Impro in enue Bonds —Debt service is provided by a pledge of guaranteed state revenue sha ' nd cal option gas tax revenues, and the half-cent sales tax. Reserves must be maintained a to e in imum bond service requirement. At September 30, 2012 the City had on deposit with r these bonds, a reserve account insurance policy which unconditionally and irrev rantees the full and complete payment required to be made by or on the behalf of the Cit Pledge Revenues - the City's e t under the State of Florida Revolving Loan Fund Program requires the City to generate PI d Revenues, as defined by the agreement, from the services furnished by its water and sewer systems equal to or exceeding 1.15 times the sum of the semiannual loan payments. As of September 30, 2013 the City is in compliance with this requirement. The amount of long-term debt that can be incurred by the City is limited by the charter of the City. Total general obligation bond of the City outstanding in any one fiscal year can be no greater than 15% of the assessed value of taxable property as of the beginning of the fiscal year. As of September 30, 2012 the amount of bonds outstanding and notes payable exclusively from the revenues of a municipal project was less than 5%of property assessments as of September 30,2013. Bonds payable exclusively from the revenue of a municipal project may be issued and outstanding without regard to the 15% limitation; however, such an issue would be subject to the limitations imposed by the City's charter with respect to restrictions on bonds parity with or junior to the Series 2011 A and Series 2011 B Capital Improvement Revenue Bonds. 36 CITY OF OPA-LOCKA,FLORIDA Notes to Basic Financial Statements Fiscal Year Ended September 30, 2013 NOTE 10. DEFINED CONTRIBUTION PENSION PLAN Florida Retirement Systems Plans - The City participates in the State of Florida Retirement System (the "System"), a cost-sharing multiple-employer defined contribution retirement plan which covers substantially all of the City's full-time employees. The FRS was established in 1970, by consolidating several employee retirement systems. All eligible employees as defined by the State who were hired after 1970 and those employed prior to 1970 that elect to be enrolled, are covered by the System. Benefit provisions and all other requirements are established by Chapter 121, Florida Statutes and any amendments thereto can be made only by an act of the Florida Legislature. Employees of the FRS may participate in either the Public Employee Optional Retirement Program (the "Investment Plan"), a defined contribution retirement program or in the defined benefit retirement plan (the "Pension Plan"). Eligible members of the Investment Plan are vested after one year of service and are directed to choose their investment product with a third party administrator selected by the State Board of Administration. Employees participating in the Pension Plan have their bene computed on the basis of age, average final compensation and service credit. Benefits under the ion Plan vest after six years of service. Employees who retire at or after age 62, with ten yea f c ted service, are entitled to an annual retirement benefit, payable monthly for life. A -retirem health insurance subsidy is also provided to eligible retired employees through the S ned benefits retirement plan. Summary of Florida Retirement Sy o utions, Covered Payroll and Percentage ov ed roll 201 2012 2011 Covered payroll 7 05 $8,628,421 $8,329,221 Contributions 71,084 1,064,057 1,074,327 %of Covered Payroll 11.25% 13.00% 13.00% The City is required to contribute amounts necessary to pay benefits when due as defined by State Statute. Such contribution requirements ranged between approximately 5% and 14% of gross salaries during fiscal year 2013. For the fiscal years ended September 30, 2013, 2012, and 2011 the City contributed 100% of the required contributions. All employees are also required to contribute a total of 3%. A copy of the System's annual report can be obtained by writing to the Division of Retirement, Cedars Executive Center, 2639-C North Monroe Street, Tallahassee, Florida 32399-1560 or by calling (850)488-5706. 37 CITY OF OPA-LOCKA, FLORIDA Notes to Basic Financial Statements Fiscal Year Ended September 30, 2013 NOTE 11. RELATIONSHIP WITH THE COUNTY In 1955, the Florida Legislature approved and submitted to a general election a constitutional amendment designed to give a new form of government to the County of Miami-Dade. The County is, in effect, a municipality with governmental powers effective upon more than 29 cities, including the City, and the unincorporated areas. It has not displaced or replaced the cities, but supplements them. The County can take over particular activities of the City's operations if(1) the services fall below minimum standards set by the County Commission, or (2) with the consent of the governing body of the City. Since its inception, the County has assumed responsibility for a number of functions, including countywide police services, complementing county-wide fire protection; consolidated two-tier court system; creation of the various surface transportation programs; installation of a central traffic control computer system; merging all public transportation systems into a county system; and centralization of the property appraiser and tax collector functions. NOTE 12. COMMITMENTS AND CONNGENCIES Commitments Water Supply and Sewer Services Contract In February 1985, the City entered into an a nt Miami-Dade Water and Sewer Authority (the "Authority") for the purpose of providin o t all of its potable water supply and sewer services for a period of thirty (30) yea ec termination at any time by operation of law or by mutual consent of the City and the or . F the year ended September 30, 2013 and 2012, the City purchased water and sewer se a $3,082,282 and $2,814,054 respectively, from the Authority under the terms of t1iliginge t. Commitments (Continued) Solid Waste Collection and Dispo Contract On September 25, 2013, the City entered into a Residential Solid Waste Collection and Disposal Agreement (the Agreement) with a third party contractor. The Agreement is for a period of three years terminating on September 16, 2016. The contract maybe renewed for additional one (1) year period unless either the contractor or the City notify the other of its desire not to extend at least sixty (60) days prior to the termination date of the original contract term or any renewal term. The Contractor is to pay a franchise fee to the City in the amount of 28% of the gross revenue billed on a monthly basis. Fees vary from a minimum of approximately $55 to a maximum of$1,207 depending on container size and the number of pickups per week. 38 CITY OF OPA-LOCKA,FLORIDA Notes to Basic Financial Statements Fiscal Year Ended September 30, 2013 NOTE 12. COMMITMENTS AND CONNGENCIES (Continued) Contingencies On April 3, 2013, an Opa-Locka police officer, initiated pursuit of a vehicle that made an illegal right turn. That vehicles occupant, failed to stop and attempted to flee from the Officer While doing so, he was observed discarding a gun. The occupant of the vehicle entered the highway, exited and then re- entered the highway the wrong way going against traffic. While traveling on the highway in the wrong direction, he struck a vehicle head-on, resulting in four(4) fatalities. Based upon the circumstances surrounding this accident, it is likely that the City of Opa-locks will be found liable for the subject accident and damages to four Estates. While an amount of damages is difficult to predict at the present time, it is anticipated that judgments well in excess of$2,000,000 per Estate will be entered against the City of Opa-Locka. However, the City's financial exposure is limited by Florida Statutes to $300,000, pursuant to section 768.28 unless a claims bill is approved by the Florida Legislature. The amount of a claims bill that may l aased for each estate is unknown and highly unpredictable. As such the City has recorded a li of$300,000 in line with its maximum financial exposure. ,W, N The City participates in a number of Federal and t programs. These programs are subject to financial and compliance audits by the grantors or th representatives. The possible disallowance of any item charged to the program or requ th turn of already collected funds may be disallowed by the grantor agency. Any poten 1 wed amounts cannot be determined at this time.No provision for any liability tha es as been made in the financial statements. The City expects such amounts, if any,to be i ate 1. Various other claims and laws c ose in the normal course of operations, are pending against the City. In the opinion of agem ed on the advice of the City's Attorney, the outcome of these actions is not anticipa to h e a material effect on the financial position and results of operations of the City. NOTE 13. OTHER POST EMPLOYMENT BENEFITS Pursuant to Section 112.08 1, Florida Statutes, the City is required to permit eligible retirees and their eligible dependents to participate in the City's health insurance program at a cost to the retiree that is no greater than the cost at which coverage is available for active employees. The City does not rovide retirees with any subsidy for this benefit. Based on GASB Statement 45 which sets forth the guidelines and a future implementation timetable for reporting and disclosure of Other Post-Employment Benefits ("OPEB"), the City had an actuary calculate future funding requirements for fiscal year 2013. The actuary's estimate, using the projected unit credit cost method, included other actuarial assumptions as classified below. The City elected to implement the provisions of GASB 45 prospectively. 39 CITY OF OPA-LOCKA,FLORIDA Notes to Basic Financial Statements Fiscal Year Ended September 30, 2013 NOTE 13. OTHER POST EMPLOYMENT BENEFITS Actuarial Methods and Assumptions The actuarial valuation of the calculation of OPEB involves estimates of the value of reported amounts and assumptions about the probability of events in the future. Amounts determined regarding the funded status of the plan and the annual required contributions of the employer are subject to continual revision as actual results are compared to past expectations and new estimates are made about the future. The required schedule of funding progress presented as required supplementary information is designed to provide multi-year trend information to show whether the actuarial value of plan assets is increasing or decreasing over time relative to the actuarial accrued liability for benefits. However, the City has not contributed assets to the plan at this time and has elected to fund the plan on a pay-as-you go method. Projections of benefits are based on the substantive plan (the plan as understood by the employer and plan members) and include the types of benefits in force at the valuation date and the pattern of sharing benefit costs between the City and the plan me rs to that point. Actuarial calculations reflect a long- term perspective and employ methods umptions that are designed to reduce short-term volatility in actuarial liabilities and the act al val f assets. Actuarial Methods and Assumptions Valuation date April 1, 2014 Actuarial cost metho Projected Unit Credit Amortization metho 15 year open period; level dollar payment investment ret 4.00%per annum (includes inflation at 2.75%per annum) Healthcare co end te(s) Insurance Premiums Selected rates 8.50%for 2014/15 graded to 5.50%for 2020/21 Ultimate rate 5.00%per annum Funding Policy The City does not directly make a contribution to the plan on behalf of retirees. Retirees and their beneficiaries pay the same group rates as are charged to the City for active employees by its healthcare provider. However, the City's actuaries, in their actuarial valuation, calculate an offset to the cost of these benefits as an Employer Contribution, based upon an implicit rate subsidy. This offset equals the total age- based costs paid by the City or its active employees for coverage of the retirees and their dependents for the year net of the retiree's own payments for the year. 40 CITY OF OPA-LOCKA,FLORIDA Notes to Basic Financial Statements Fiscal Year Ended September 30, 2013 NOTE 13. OTHER POST EMPLOYMENT BENEFITS (Continued) Annual OPEB cost and Net OPEB obligation The annual OPEB cost is calculated based on the annual required contribution of the employer, an amount actuarially determined in accordance with GASB Statement No. 45. The annual required contribution represents a level of funding that, if paid on an ongoing basis, is projected to cover normal cost each year and to amortize any unfunded actuarial liabilities over a period not to exceed twenty years. Required Contribution rates: Employer Pay-as-you-go Plan Members N/A ARC $205,000 Interest on net OPEB Obligation - Adjustments to the ARC Annual OPEB cost 720 , 0 Interest on Employer Contributions - Employer Contributions * 20,000) Increase in net OPEB obligation (asset) 185,000 Net OPEB obligation (asset) -beginning of - Net OPEB obligation(asset) - end of $185,000 The $20,000 represents an actuarial e e and does not represent a physical contribution. Trend information gives a dicatio o e progress made in accumulating sufficient assets to pay benefits when due. Two ye info ation (three year is not available) for fiscal years ended September 30, is presented as fo Percentage of Annual Net OPEB Fiscal Year Ended Annual OPEB Cost Obligation September 30, OPEB Cost Contributed (Asset) 2013 $205,000 10% $185,000 2014 $210,000 10% $375,000 41 CITY OF OPA-LOCKA,FLORIDA Notes to Basic Financial Statements Fiscal Year Ended September 30, 2013 NOTE 13. OTHER POST EMPLOYMENT BENEFITS (Continued) As of October 1, 2013, employee membership data related to the OPEB Plan was as follows: Current retirees: Under age 65 0 Over age 65 0 Total current retirees 0 Active employees: Active employees fully eligible for benefits 13 Active employees not yet fully eligible for benefits 212 225 Total active employees 225 Total number of participants 225 Funded Status and Funding progress The funded status of the plan as of Ap ' 14 UAAL A arial as a Actuarial Acc Unfunded Percentage Actuarial Value Liabili AAL Funded Covered of Covered Valuation of Assets (AAL) (UAAL) Ratio Payroll Payroll Date (a) (b) (b)- (a) (a)/(b) (c) (b-a)/c) 4/1/2014 $0 $766,000 $766,000 0.00% $913,900 8.40% NOTE 14. DEFERRED COMPENSATION PLAN The City offers its employees a deferred compensation plan (the "Plan"), which is administered by two administrators. The portion of the plan administered by the International City Management Association Retirement Corporation ("ICMA") was created in accordance with Internal Revenue Code Section 457 (a qualified plan). The other portion constitutes a nonqualified plan benefit and is administered by the Equitable Life Assurance Society ("Equitable"). The Plan, available to all City employees, permits them to defer a portion of their salary until future years. Participation in this plan is optional. The deferred compensation is not available to employees until termination, retirement, death or unforeseeable emergency. 42 CITY OF OPA-LOCKA,FLORIDA Notes to Basic Financial Statements Fiscal Year Ended September 30, 2013 NOTE 14. DEFERRED COMPENSATION PLAN (Continued) All assets and income of the Plan are held in trust for the exclusive benefits of the participants. The City makes no investment decisions and has no fiduciary responsibilities regarding the Plan; therefore, the assets and liabilities of the Plan are not included in the City's financial statements as September 30, 2013. NOTE 15. RISK MANAGEMENT The government is exposed to various risks of loss related to torts; theft of, damage to, and destruction of assets; errors and omissions; injuries to employees; and natural disasters for which the City carries commercial insurance. The City has not had a significant reduction in insurance coverage from coverage in the prior year by major categories of risk, and settled claims have not exceeded the City's retention and excess coverage in force for each of the past three years. NOTE 16. MANAGEMENT'S REVIEW In preparing these financial statements, the Or anizatio evaluated events and transactions for potential recognition or disclosure through he date the financial statements were available to be issued. There were no other sign' ant even hat management believed require disclosure. NOTE 17. PRIOR PERIOD ADUSTTME In 2011 a lift station in the water Jan er d was repaired by a local small business with a provision that the City would reimb at ost of$140,000. In 2012 the City paid the business the cost of the repair but did not cost as they should have done. As a result, the City recorded the asset in 2013 and ' et position by$140,000. The City had been carrying a it bal ce, which should have been expensed each year in the amount of $602,592 which had been in g since 2006, relating to Miami-Dade water permitting. As a result, the City wrote off the Bala ce against net position in the water and sewer fund in the said amount and recognized the 2013 expense correctly. The net effect of the prior period adjustments was a$462,592 reduction to net position. NOTE 18. PRONOUNCEMENTS ISSUED, BUT NOT YET EFFECTIVE The Governmental Accounting Standards Board (GASB) has issued several pronouncements that have effective dates in the future that may impact future financial presentations. Management has not currently determined what, if any, effect implementation of the following statements may have on the financial statements of the City. 43 CITY OF OPA-LOCKA,FLORIDA Notes to Basic Financial Statements Fiscal Year Ended September 30, 2013 NOTE 17. PRONOUNCEMENTS ISSUED BUT NOT YET EFFECTIVE (Continued) GASB Statement No. 66, Technical Corrections-2012—an amendment of GASB Statements No. 10 and No. 62, was issued March 2012. The objective of this Statement is to improve accounting and financial reporting by state and local governmental entities by resolving conflicting guidance that resulted from the issuance of two pronouncements—Statements No. 54, Fund Balance reporting and Governmental Fund Type Definitions, and No. 62, Codification of Accounting and Financial Reporting Guidance Contained in Pre-November 30, 1989 FASB and AICPA Pronouncements. The provisions of this Statement will be effective for the fiscal year ending September 30, 2014. GASB Statement No. 67, Financial Reporting for Pension Plans—an amendment of GASB Statement No. 25 was issued June 2012. The objective of this Statement is to improve financial reporting by state and local governmental pension plans. This Statement results from a comprehensive review of the effectiveness of existing standards of accounting and financi 1 reporting for pensions with regard to providing decision-useful information, supporting asses nts of accountability and inter-period equity, and creating additional transparency. This State laces the requirements of Statements No. 25, Financial Reporting for Defined Benefit Pon Pl and Note Disclosures for Defined Contribution Plans, and No. 50, Pension Discl re s as the relate to pension plans that are administered through trusts or equivalent arrange (hereafter jointly referred to as trusts) that meet certain criteria. The provisions of this me ill be effective for the fiscal year ending September 30, 2014. GASB Statement No. 68,Accountin nd an l Reporting for Pensions—an amendment of GASB Statement No. 27, was issued June primary objective of this Statement is to improve accounting and financial repo ' t nd local governments for pensions. This Statement results from a comprehensive revi of the fec iveness of existing standards of accounting and financial reporting for pensions with re to viding decision-useful information, supporting assessments of accountability and inter-period e ' , and creating additional transparency. This Statement replaces the requirements of Statement No. 27, Accounting for Pensions by State and Local Governmental Employers, as well as the requirements of Statement No. 50, Pension Disclosures, as they relate to pensions that are provided through pension plans administered as trusts or equivalent arrangements (hereafter jointly referred to as trusts) that meet certain criteria. The provisions of this Statement will be effective for the fiscal year ending September 30, 2015. GASB Statement No. 69, Government Combinations and Disposals of Government Operations, was issued January 2013. This Statement establishes accounting and financial reporting standards related to government combinations and disposals of government operations. As used in this Statement, the term government combinations include a variety of transactions referred to as mergers, acquisitions, and transfers of operations. The provisions of this Statement will be effective for the fiscal year ending September 30, 2015. 44 CITY OF OPA-LOCKA,FLORIDA Notes to Basic Financial Statements Fiscal Year Ended September 30, 2013 NOTE 17. PRONOUNCEMENTS ISSUED BUT NOT YET EFFECTIVE (Continued) GASB Statement No. 70, Accounting and Financial Reporting for Non-Exchange Financial Guarantees, was issued April 2013. The objective of this Statement is to improve accounting and financial reporting by state and local governments that extend and receive non-exchange financial guarantees. The provisions of this Statement will be effective for the fiscal year ending September 30, 2014. GASB Statement No. 71, Pension Transition for Contributions Made Subsequent to the Measurement Date — an amendment of the GASB Statement No. 68, was issued November 2013. The objective of this Statement is to address an issue regarding application of the transition provisions of Statement No. 68, Accounting and Financial Reporting for Pensions. The issue relates to amounts associated with contributions, if any, made by a state or local government employer or nonemployer contributing entity to a defined benefit pension plan after the measurement date of the government's beginning net pension liability. The provisions of this Statement will b effective for the fiscal year ending September 30,2015. The City's management has not yet determined the ect th Statements will have on the City's financial statements. 45 Required Supplemen Information P O CITY OF OPA-LOCKA Schedule of Revenues, Expenditures, and Changes in Fund Balance -Budget to Actual-General Fund For the Year Ended September 30,2013 (Unaudited) Variance With Final Budget Budgeted Amounts Positive Revenues: Original Final Actual (Negative) Taxes: Property taxes $ 6,032,745 $ 6,032,745 $ 5,842,217 $ (190,528) Utility taxes 881,900 1,021,900 1,040,076 18,176 Communications service taxes 605,000 605,000 526,127 (78,873) Local option gas tax 276,090 276,090 274,189 (1,901) Local business tams 215,000 215,000 305,236 90,236 Franchise fees 1,408,200 1,493,200 1,484,133 (9,067) Permits and fees 662,401 579,901 552,400 (27,501) Intergovernmental 708,534 650,534 731,061 80,527 Charges for services 293,600 248,600 73,592 (175,008) Fines and forfeitures 353,500 523,500 311,346 (212,154) Interest 8,000 8,000 - (81000) Other 351,805 436,805 916,818 480,013 Total revenues 11,796,775 12,091,275 12,057,195 (34,080) Expenditures: General government: City cornrnission 125,340 ,159 735,634 (556,475) City manager 732,740 759,557 (80,552) City clerk 457, 428, 467,468 (39,078) City attorney 533, 763,300 1,068,031 (304,731) Finance/Utility billing 555, 521,835 638,465 (116,630) Information technology ,825 309,960 285,642 24,318 Human resources 326,065 359,145 (33,080) Building licenses 9, 342,020 346,943 (4,923) Community development 550,831 515,794 35,037 Total general government 3 91%W 4,100,565 5,176,679 (1,076,114) Public safety: 1p Police ,313 5,496,437 5,755,893 (259,456) Code enforcement 277245 280,800 350,056 (69,256) Total public safety 5 600 558 5,777,237 6,105,949 (328,712) Public works: Administration 272,900 273,615 402,421 (128,806) Street maintenance 238,840 242,395 698,507 (456,112) Building maintenance 587,315 630,606 394,718 235,888 Vehicle maintenance 734,890 767,730 944,565 (176,835) Total public works 1,833,945 1,914,346 2,440,211 (525,865) Parks and recreation: Par16 801,190 837,883 1,042,723 (204,840) special events 30,000 49,991 84,169 (34,178) Total parks and recreation 831,190 887,874 1,126,892 (239,018) Non-departmental* 771,682 11,317,904 2,176,241 9,141,663 Total non-departmental 771,682 11,317,904 2,176,241 9,141,663 Total expenditures 12,952,055 23,997,926 17,025,972 6,971,954 Excess ofrevenues over expenditures (1,155,280) (11,906,651) (4,968,777) 6,937,874 Other fmancing sources(uses): Capital lease proceeds - - 447,982 - Transfers in 1,836,660 2,023,030 4,512,120 2,489,090 Transfers out (116,380) (116,380) 116,380 Net change in fund balance $ 565,000 $ (10,000,001) (8,675) $ 9,543,344 1,233,985 $ 1,225,310 -Won-departmental is split out for budgetary purposes but is included in other departments,primarily general govcrnment on the financial statements. See notes to budgetary comparison schedules. 46 CITY OF OPA-LOCKA Schedule of Revenues, Expenditures, and Changes in Fund Balance -Budget to Actual—General Fund For the Year Ended September 30, 2013 (Unaudited) Peoples' Transportation Tax Fund Variance With Final Budget Budgeted Amounts Positive Original Final Actual (Negative) Revenues: Taxes: Intergovernmental $ 465,000 $ 465,000 $ 603,115 $ 138,115 Total revenues 465,000 465,000 603,115 138,115 Expenditures: Current: Public Works Highways and streets 1,130, 1,130,456 1,426,403 (295,947) Total expenditures 1, 0,456 1,130,456 1,426,403 (295,947) Excess (deficiency)of revenues over expenditures (66 6) (665,456) (823,288) (157,832) Net change in fund balance (665,456) $ (665,456) (823,288) $ (157,832) Fund balance- beginning 2,162,715 Fund balance -ending $ 1,339,427 See notes to budgetary comparison schedules. 47 CITY OF OPA-LOCKA Notes to the budgetary comparison schedules For the Year Ended September 30, 2013 NOTE 1. BUDGETS AND BUDGETARY ACCOUNTING Chapter 166, Florida Statutes, requires that all municipalities prepare, approve, adopt and execute an annual budget for funds as may be required by law or by sound financial practices and generally accepted accounting principles. The budgets control the levy and the expenditure of money for City purposes in the ensuing fiscal year. The budgeting process is based on estimates of revenues and expenditures. The City budgets are prepared on a modified-accrual basis or accrual basis of accounting in accordance with generally accepted accounting principles. The City follows these procedures in establishing the budgetary data reflected in the financial statements. 1. Prior to August 1, the City Manager submits to the City Commission a proposed operating budget for the fiscal year commencing the following October 1. The operating budget includes proposed expenditures and the means of financing them. 2. Public hearings are conducted to obtain taxpayer comments. 3. Prior to October 1,the budget is legally enacted throu sage of an ordinance. 4. Budgetary control is maintained at the departure and fun el, with finance department providing support to departments in the administration the' udgets. In accordance with the City's budget transfer policy, the City Manager is authorize transfer budgeted amounts within any fund or functions; however, any supplemental a atio r revisions that amend the total expenditure of any fund must be approved by the Ci Co n. The City also maintains an encumbrance accounting system as one techniqu cco is budgetary control. Encumbrances outstanding at the balance sheet date are cance 5. Annual operating budgets a adopted for the General, Special Revenue, Debt Service, Capital Projects, and Enter r dgets are on a basis consistent with accounting principles generally accepted in Untates of America. The legal level of budgetary control is the department level. This is which expenditures may not exceed appropriations. 6. All annual appropriations lapse at fiscal year end. NOTE 2. BUDGETARY EXPENDITURES IN EXCESS OF APPROPRIATIONS For the year ended September 30, 2013 expenditures exceeded appropriations in the city commission, city manager, city clerk, city attorney, finance, human resources, building, police, code enforcement, public works, special events, and parks departments of the general fund by $108,493, $80,552, $39,078, $304,731, $1 16,630, $33,080, $4,923, $259,456, $69,256, $525,865, $34,178 and $204,840. The over expenditures were funded by available fund balance in the case of the general fund. For the year ended September 30, 2013 expenditures exceeded appropriations in the People Transportation Tax fund$295,947. The over expenditures were funded by available fund balance. 48 CITY OF OPA-LOCKA Schedules of Funding Progress and Employer Contributions For the Year Ended September 30, 2014 (Unaudited) Other Post Employment Benefits Schedule of Funding Proaress UAAL Actuarial as a Actuarial Accrued Unfunded Percentage Actuarial Value Liability AAL Funded Covered of Covered Valuation of Assets (AAL) (UAAL) Ratio Payroll Payroll Date (a) (b) (b) - (a) (a)/(b) (c) ((b-a)/c) 4/1/2014 $0 $766,000 $766,000 0.00% $913,900 8.40% Schedule of Employers Contributions Percentage of Annua Net B Fiscal Year Ended Annual OPEB t bligat n September 30, OPEB Cost Contribu (Asset) 2013 $205,000 $185,000 2014 $210,000 0 $375,000 49 Supplementary I rmation P O 00 Vet• 00 M O\ M I- I'll N N 00 O 7 N cl �C M O 00 p O1 k(?- N M klp O O N M M 00 N F M M � 01 N N cq N d1 t.� �10 69 69 64 ^" 69 p y U N O N N N U ¢ O O O O 69 69 69 � bq k M M U IN N N N N a � 1 w69 69 64 69 N N N N N 69 69 64 bg 00 00 00 00 69 69 q 69 . y9 03 o `o M o r In cv U y 'n M M 00 00 kf) N 0^O 0000 N ON N N (71 M I I M M 01 cz U 00 00 M u Q �O Q 69 69 69 M `M-� 69 ke) r.+ 00 M 00 (31, w k r- O O V 64 69 69 yg 0.1 0 Q � M1 M M M M r r- 69 ~ 64 64 64 E O N N ' CD ' ON ' O O O W69 69 69 bq M cd C cC p0 "p Cl C 0 �" w ¢ ; C, U a R U c U W R aza ~ v A bZ;3 :. d E-p a Fp- fs, U 7 Ep- F 00 W) M. M .- N N 0 M vl 00 0 O M N N M V'i 00 64 .-y 69 CA � O N O b9 O N N V] 64 E y w � I k U � o I �y M 0\- ¢ ' ' ' ' N N N N 7 O ° yg s� c aa, p a� o 't oo v o 00 00 M M o00 ,n �O COL. Qq 604 y t, i i N N M N M � w u o V') N N O O, sOU• � �oq � w s9 v, s. a� y 'c y U CI U U y . t CITY OF OPA-LOCKA Combining Statement of Net Position Nonmajor Proprietary Funds September 30, 2013 ASSETS Stormwater Solid Waste Total Current assets: Cash and equity in pooled cash $ 859,892 $ - $ 859,892 Estimated unbilled services 7,398 - 7,398 Prepaids and other 4,001 - 4,001 Due from other funds - 2,242,999 2,242,999 Total current assets 871,291 2,242,999 3,114,290 Noncurrent assets: Capital assets,net 225,311 - 225,311 Total noncurrent assets 225,311 - 225,311 Total assets $1,096,602 ,242,999 $3,339,601 LIABILITIES Current liabilities: Accounts payable and accrued liabilities $ ,99 $ 10 ,842 $ 252,833 Overdrawn cash 2,781,795 2,781,795 Due to other funds 9 - 104,974 Customers' deposits 117,554 117,555 Current portion of long term debt 41,290 - 41,290 Total current liabilities 93,256 39005,191 3,298,447 Long term debt Compensated absences 13,306 - 13,306 OPEB Obligation 2,644 - 2,644 Notes and capital leases payable 153,572 - 153,572 Total long term debt 169,522 - 169,522 Total liabilities 462,778 3,005,191 3,467,969 NET POSITION Invested in capital assets,net of related debt 225,311 - 225,311 Unrestricted 408,513 (762,192) (353,679) Total net position $ 633,824 $ (762,192) $ (128,368) 52 CITY OF OPA-LOCKA Combining Statement of Revenues, Expenses and Changes in Net Position Nonmajor Proprietary Funds For the Year Ended September 30, 2013 Stormwater Solid Waste Total Operating revenues: Charges for services $ 242,628 $ 975,544 $ 1,218,172 Total operating revenues 242,628 975,544 1,218,172 Operating expenses: Operating,administrative and maintenance 225,617 1,214,902 1,440,519 Interest and other debt costs 3,945 - 3,945 Depreciation 69,647 - 69,647 Total operating expenses 299,209 1,214,902 1,514,111 Change in net position (56,581 (239,358) (295,939) Net position,beginning 6 5 (522,834) 167,571 Net position, ending $ $ (762,192) $ (128,368) 53 CITY OF OPA-LOCKA Combining Statement of Cash Flows Nonmajor Proprietary Funds For the Year Ended September 30, 2013 Stormwater Solid Waste Total Cash flows from operating activities: Cash received from customers $ 340,756 $ 1,029,344 $ 1,370,100 Cash paid to vendors (18,935) (67,524) (86,459) Cash paid to employees (60,140) - (60,140) Payments from(to)other funds,net (30,139) (961,820) (991,959) Net cash provided by operating activities 231,542 - 231,542 Cash flows from capital and related financing activities: Acquisition on construction of capital assets (222,927) - (222,927) Proceeds from compensated absences and OPEB - - Proceeds from debt 218,925 - 218,925 Payments made on debt (24,063 - (24,063) Net cash used in capital and related financing activities ( - (28,065) Net decrease in cash 20 77 - 203,477 Cash,beginning 6,414 - 656,414 Cash,ending 9,891 - 859,891 Display as: Unrestricted 859,892 - 859,892 Restricted _ Total $ 859,892 $ - $ 859,892 Reconciliation of operating income t sh provided by operating activities: Operating(loss) $ (56,581) $ (239,358) $ (295,939) Adjustment to reconciled operating income to net cash provided by(used in)operating activities: Depreciation expenses 69,647 - 69,647 (Increase)decrease in: Cash drawn in excess of bank - 1,132,011 1,132,011 Accounts receivable 98,128 53,800 151,928 Due from other funds - (961,820) (961,820) Increase (decrease)in: Accounts payable and accrued liabilities 146,181 16,228 162,409 Due to other funds (30,139) - (30,139) Other liabilities 4,306 (861) 3,445 Net cash provided by operating activities $ 231,542 $ - $ 231,542 54 Statistical In kition P O � �O V � .�• �W)f1 N pp M Vl � l� Vi N �n aD D\ n wry' 69 69 69 65 �p � c+N� a s p � N M n M N M 'O f h O n O � 00 M 'D 00 W 00 N r_ 00 69 6s 69 6s 69 6A 00� Opp 00 n vi 00 M ppp��� p� 00 M In M O� O ool V 00 N N 69 69 6r9 69 69 pp�� 6Nr9 �D n OMO M OMO � O h 7 N In 5 M O Yl n I 69 6A 69 69 69 69 000 N cc �O m n � 'NMy N R cq M NMR N N GyL � N 4 a 4 69 6s 69 69 6A T }W� Y�'1 m M � M VNl � C, U �" V1 h0 � 7 � h vl N M � � M •� W Ftr oo ri " o ^M e+i vi M M N _ a -o pO„ VF] cq � M N oOiO M h V] l� 0 o0 's. N M N 00 V] V r rn 00 N n 00 cal O M 00 M O N CC y 6s 6M.11 69 69 b9 6r9 C. •-•9 n � � M N o � 0�0 ON1 AND ENO N �'. ONI `� M O fV M fJ M N u (V y 3 6s ds fsj & s a 0 b b b w° � � b � a � h w � � RS t1..1 •� � y U v, .U. y y Y. ti i y y ? cc cC }a 1 � N Q� oo -. 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W) fr) W) tn Obi tn W)� �O ~ 7 O a CL MO M ❑C.' ppppp� Y G C O W N M C 0000 C, w! w O C7 ONO 00 M N O b „�•, N 00 V1 V'i Q; N n O m W CL cNC M �N ^C N W)i 00 N M S U ¢ z a U o s Q yzw o W 3 Q F y bO N Obi N .�. �p O W , CL O wi N M� � N u1 GL O N OO I N N O S a 0 IV � 73 z w a o 0 ti M 00 O vi � O, 3111 V1 rn M ii .r .-,i OO, V1 N V d M M b d' M N N 7 C� •� y UO w U Q c�0 CCOa� N ONO O M N y eq oz 'b t N h ci O W W C- W) w Ca �QQ 4 \ ► L. \ ► Zi ;E s E N N C O O O\ en l� y � Q q O 7 S O 000 7 N N M M N U O N N y U �Q O eNF O� M 00 00000 O ca Q N ,� N M N $ ��• 7 Z ca > N M N -+ N N > 7 ON N d M w m O N � N 00 [- M w O h �o N R y, WW)) 00 ' N y C'n 00 V'1 M �O N 0\ O N N N. 0 �O o0" �D l� l� � oo" ¢ W sIC .o p� N N vNi H > V (V f`1 fV fV fJ fV o rA � a bc a v v s M O M S 00 Q1 N 0^O 00 O j s 00 �O en N 00 l� Obi Q N M N � O� 17, b b O R M M N QO 000 N h O p+ Q U — — N N N h M M y vj U w N 00 \O M V1 M Qom. � �aJf cn Ol\, vOOi vii 7M M N �C7 C7 > N is c O Uj _T U ho �pO [pper 0p0 Opp O •-r .N. M N W N 8 N 8 N N N N N CITY OF OPA-LOCKA,FLORIDA DEMO©tAPI-BC AND ECONOMIC STATISTICS LAST TEN CALENDAR YEARS (2)(6) Personal Per r r Income Capita (3)(7) (4) (5) Calendar (1)(6) (thousands Personal Median School Unemployment Year Population o dollars) Income Age Enrollment Rate 2004 14,951 19,631 9,538 27.3 369,578 17.5 2005 14,951 19,631 9,538 27.3 361,550 17.5 2006 14,951 19,631 9,538 27.3 365,784 17.5 2007 14,951 19,631 9,538 27.3 353,283 17.5 2008 14,951 19,631 9,538 27 385,655 17.5 2009 14,951 19,631 9,538 385,655 17.5 2010 14,951 19,631 9,538 27.3 341,051 17.5 2011 15,219 19,631 9,53 7.3 368,453 17.5 2012 15,718 20,757 11,375 31.5 349,945 17.5 2013 15,967 20,757 31.5 352,790 17.5 (1)University of Florida,Bureau of Economic ;jseasearch (2)U.S.Census Bureau,Census 2000.Dat rl sus Bureau,Census 1990. (3)U.S.Census Bureau,Census 2000. a -U.S.Census Bureau,Census 1990. (4)Source:Miami-Dade County S of Bo is for Miami-Dade County. (5)U.S.Census Bureau,Census 2 Data fo 999-U.S.Census Bureau,Census 1990. (6)U.S.Census Bureau,Census 2010. (7)American Community Survey 2008-20 .(5 year estimate) Statement 12 67 CITY OF OPA-LOCKA,FLORIDA PRINCIPAL EMPLOYERS FISCAL YEAR 2013 AND NINE YEARS AGO 2013 2004 Percentage Percentage of Total City of Total City to e Employees Rank Employment F=loyees Rank Employment Master North America 200 1 4% N/A N/A N/A Aramark 160 2 3% N/A N/A N/A Sherwood Food Dist FKA Don Greene Poultr 140 3 3% N/A N/A N/A American Fruit 105 4 2% N/A N/A N/A Combined Services 98 5 2°/ N/A N/A N/A Republic Metals 95 6 ° N/A N/A N/A Miami Offset 75 7 2 N/A N/A N/A Choice Environmental 75 7 2% N/A N/A N/A Florida International Academy 75 2% N/A N/A N/A Robert B.Ingram Elementary 73 8 1% N/A N/A N/A Nathan B.Young Elementary 66 1% N/A N/A N/A Total 2 22% Source:City Community Development and Plan N/A-Not Available Statement 13 68 CITY OF OPALOCKA,FLORIDA FULL-TIME EQUIVALENT CITY GOVERNMENT EMPLOYEES BY FUNCTION/PROGRAM LAST TEN FISCAL YEARS Function 2004 2005 2006 2007 2008 2009 2010 2011 2012 2013 Governmental activities: General Government 41 45 48 56 49 48 49 64 43 39 Public Safety 83 76 80 88 59 65 62 73 68 79 Highways&Streets 15 19 22 27 26 29 29 6 21 29 Culture&Recreation 6 6 14 7 11 11 15 14 12 18 Human services(1) 0 0 0 0 0 8 8 4 4 4 Business-type activities: Water&sewer utility 11 15 15 17 15 12 17 21 22 Solid waste(2) 0 0 0 0 0 0 0 0 1 Stormwater 2 2 2 4 4 4 3 3 3 Total 158 163 181 97 164 180 179 181 172 195 Source: City Finance/Payroll/Human Resources art (1)The City's Opa-locks Youth Academy a programs are classified under the Human Services function starting in fiscal year (2)The City's solidwaste services w ont d tarting in 2004. Statement 14 69 CITY OF OPA-LOCKA,FLORIDA OPERATING INDICATORS BY FUNCTION LAST FOUR FISCAL YEARS Function 2013 2012 2011 2010 Police(1) Physical arrests 1,332 1,428 1,500 1,138 Parking violations 139 142 519 519 Traffic violations 9,298 9,105 1,400 14,000 No.of calls for s ery ice 14,492 14,259 14,109 14,109 So lidwaste(2) Street resurfacing(miles) 0 0 0 0 Potholes repaired 300 275 400 450 Parks and recreation(4) Youth athletic program participants 350 300 225 225 Adults athletic program participants 2 35 24 24 Senior's program average monthly participants 75 53 49 49 Special events 2 16 16 16 Water(3) New connections 5 4 3 3 Water main breaks 2 3 4 4 Average daily consumption( s ofga s) 2.25 2.5 2.5 2.5 Peak daily consumption millions lions) 3 3 3 3 (1) Source:City ofOpa-locka Police Department (2) Solidwaste collection is contracted out by the City. (3) Source: City of Opa-locka Public Works Department. (4) Source: City of Opa-locks Parks and Recereation Department. Statement 15 70 CITY OF OPA-LOCKA,F LoRIDA CAPITAL ASSETS STATISTICS BY FUNCTION/PROGRAM LAST TIN FISCAL YEARS 2004 2005 2006 2007 2008 2009 2010 2011 2012 2013 Function/Program Police Stations 1 1 1 1 1 1 1 1 1 1 Patrol Units 22 22 22 22 22 22 22 22 22 22 Other Public Works Miles of Streets 36 36 36 36 36 36 36 36 36 36 Number of Street Lights 625 625 625 625 625 625 625 625 625 625 Water Miles of water mains 71 71 71 71 71 71 71 71 71 71 Number of service connections 6,500 6,500 6,500 6,500 6,500 6,500 6,500 6,500 6,500 6,500 Number fire hdrants 363 363 363 363 363 363 363 363 363 363 Daily average consumption in gallons(millions) 3.8 3.8 3.8 3.8 3.8 3.8 3.8 3.8 Wastewater Miles of sanitary sewers 77 77 77 77 77 77 77 77 77 77 Miles of storm sewers 14 14 14 14 14 14 14 14 14 Number of service connections 3,675 3,675 3,675 ,6 31675 3,765 3,765 3,675 3,675 3,675 Culture&Recreation Number of community centers 1 1 1 1 1 1 1 1 1 Number ofparks 3 3 3 3 3 3 3 3 3 Number of libraries(1) 0 0 1 1 1 1 1 1 1 Number oftennis courts I 1< 1 1 1 1 1 1 1 Source: Various City Departments (1) The City stopped its library services in fiscal year 2003 qt. 3pa r 2007 Miami-Dade County opened and operated a library in the City. The City contributes to the library's ying the ope rating lease of the library location. Statement 16 71 ante Z4--IV INDEPENDENT AUDITOR'S REPORT ON INTERNAL CONTROL OVER FINANCIAL REPORTING AND ON COMPLIANCE AND OTHER MATTERS BASED ON AN AUDIT OF FINANCIAL STATEMENTS PERFORMED IN ACCORDANCE WITH GOVERNMENT AUDITING STANDARDS To the Honorable Mayor and City Commission City of Opa-Locka, Florida We have audited, in accordance with the auditing standards generally accepted in the United States of America and the standards applicable to financial audits contained in Government Auditing Standards issued by the Comptroller General of the United States, the financial statements of the governmental activities, the business-type activities, each major fund, and the aggregate remaining fund information of City of Opa-Locka, Florida (the City), as of and for the year ended September 30, 2013, and the related notes to the financial statements, which collectively comprise the City's basic financial statements d have issued our report thereon dated September xx, 2014. Internal Control Over Financial Reporting In planning and performing our audit of the fit ci tatements, we considered the City's internal control over financial reporting (internal co ) to determine the audit procedures that are appropriate in the circumstances for the o pressing our opinions on the financial statements, but not for the purpose of expres inion on the effectiveness of the City's internal control. Accordingly, we do pr an opinion on the effectiveness of the City's internal control. Our consideration of internal s for the limited purpose described in the preceding paragraph and was not des' ed to e y all deficiencies in internal control that might be material weaknesses or sigm nt de iencies and therefore, material weaknesses or significant deficiencies may exist that we identified. However, as described in the accompanying schedule of findings and question costs, we identified certain deficiencies in internal control that we consider to be material weaknesses and significant deficiencies. A deficiency in internal control exists when the design or operation of a control does not allow management or employees, in the normal course of performing their assigned functions, to prevent, or detect and correct, misstatements on a timely basis. A material weakness is a deficiency, or a combination of deficiencies, in internal control such that there is a reasonable possibility that a material misstatement of the entity's financial statements will not be prevented, or detected and corrected on a timely basis. We consider the deficiencies described in the accompanying schedule of findings and questioned costs to be material weaknesses. 2013-01; 2013-02; 2013-03. A significant deficiency is a deficiency, or a combination of deficiencies, in internal control that is less severe than a material weakness, yet important enough to merit attention by those charged with governance. We consider the deficiencies described in the accompany schedule of findings and questioned costs to be significant deficiencies. 2013-04; 2013-05; 2013-06; 2013-07; 2013- 08; 2013-09. 72 Compliance and Other Matters As part of obtaining reasonable assurance about whether the City's financial statements are free from material misstatement, we performed tests of its compliance with certain provisions of laws, regulations, contracts, and grant agreements, noncompliance with which could have a direct and material effect on the determination of financial statement amounts. However, providing an opinion on compliance with those provisions was not an objective of our audit, and accordingly, we do not express such an opinion. The results of our tests disclosed instances of noncompliance or other matters that are required to be reported under Government Auditing Standards and which are described in the accompanying schedule of findings and questioned costs as items 2013-08; 2013-09. The City's Response to Findings The City's response to the findings identified in our audit is described in the accompanying schedule of findings and questioned costs. The City's response was not subjected to the auditing procedures applied in the audit of the financial statements and, accordingly, we express no opinion on it. Purpose of this Report The purpose of this report is solely to describe the pe o N esting of internal control and compliance and the results of that testing, and not pr idpinion on the effectiveness of the entity's internal control or on compliance. eport is an integral part of an audit performed in accordance with Governmej diti tandards in considering the entity's internal control and compliance. According) unication is not suitable for any other purpose. Hollywood, Florida September xx, 2014 73 INDEPENDENT AUDITOR'S REPORT ON COMPLIANCE FOR EACH MAJOR PROGRAM AND ON INTERNAL CONTROL OVER COMPLIANCE REQUIRED BY OMB CIRCULAR A-133 To the Honorable Mayor and City Commission City of Opa-Locka, Florida Report on Compliance for Each Major Federal Program We have audited City's compliance with the types of compliance requirements described in the OMB Circular A-133 Compliance Supplement that could have a direct and material effect on each of City of Opa-Locka, Florida's (the City) major federal programs for the year ended September 30, 2013. The City's major federal programs are identified in the summary of auditor's results section of the accompanying schedule of findings and questioned costs. Management's Responsibility Management is responsible for compliance with the requirements of laws, regulations, contracts, and grants applicable to its federal programs. Auditor's Responsibility Our responsibility is to express an opinion on compnce ach of the City's major federal programs based on our audit of the types of co ian requ ments referred to above. We conducted our audit of compliance in accordance diting standards generally accepted in the United States of America; the stand ap ble to financial audits contained in Government Auditing Standards, issued by t ler General of the United States; and OMB Circular A-133, Audits of Stat oc ove nments, and Non-Profit Organizations. Those standards and OMB Circular_ 3 teq that we plan and perform the audit to obtain reasonable assurance about whethe ce with the types of compliance requirements referred to above that could a ect and material effect on a major federal program occurred. An audit include amin a test basis, evidence about the City's compliance with those requirements and ormi such other procedures as we considered necessary in the circumstances. We believe that our audit provides a reasonable basis for our opinion on compliance for each major federal program. However, our audit does not provide a legal determination of the City's compliance. Opinion on Each Major Federal Program In our opinion, the City, complied, in all material respects, with the types of compliance requirements referred to above that could have a direct and material effect on each of its major federal programs for the year ended September 30, 2013 Other Matters The results of our auditing procedures disclosed instances of noncompliance, which are required to be reported in accordance with OMB Circular A-133 and which are described in the accompanying schedule of findings and questioned costs as items 2013-08; 2013-09. Our opinion on each major federal program is not modified with respect to these matters. The City's response to the noncompliance findings identified in our audit is described in the accompanying schedule of findings and questioned costs. The City's response was not subjected 74 to the auditing procedures applied in the audit of compliance and, accordingly, we express no opinion on the response. Report on Internal Control Over Compliance Management of the City is responsible for establishing and maintaining effective internal control over compliance with the types of compliance requirements referred to above. In planning and performing our audit of compliance, we considered the City's internal control over compliance with the types of requirements that could have a direct and material effect on each major federal program to determine the auditing procedures that are appropriate in the circumstances for the purpose of expressing an opinion on compliance for each major federal program and to test and report on internal control over compliance in accordance with OMB Circular A-133, but not for the purpose of expressing an opinion on the effectiveness of internal control over compliance. Accordingly, we do not express an opinion on the effectiveness of the City's internal control over compliance. A deficiency in internal control over compliance exists when the design or operation of a control over compliance does not allow management or employees, the normal course of performing their assigned functions, to prevent, or detect and co noncompliance with a type of compliance requirement of a federal program on a time A material weakness in internal control over compliance is a deficiency, or combina N de 'encies, in internal control over compliance, such that there is a reasonable possibi ' Ctihn: ateri noncompliance with a type of compliance requirement of a federal program will n vented, or detected and corrected, on a timely basis. A significant deficiency in in co ver compliance is a deficiency, or a combination of deficiencies, in internal con Timpliance with a type of compliance requirement of a federal program that ' s s e than a material weakness in internal control over compliance, yet important enc to rit ention by those charged with governance. Our consideration of internal c of r compliance was for the limited purpose described in the first paragraph of this s on not designed to identify all deficiencies in internal control over compliance th ight b material weaknesses or significant deficiencies. We did not identify any deficiencies in a control over compliance that we consider to be material weaknesses. However, material w esses may exist that have not been identified. The purpose of this report on internal control over compliance is solely to describe the scope of our testing of internal control over compliance and the results of that testing based on the requirements of OMB Circular A-133. Accordingly, this report is not suitable for any other purpose. Hollywood, Florida September xx, 2014 75 CITY OF OPA LOCKA, FLORIDA Schedule of Expenditures of Federal Awards For the Year Ended September 30,2013 Federal Federal Grantor/Pass-through Granter/Program or CFDA Contract or Identifying Federal Cluster Title Number Number Expenditures U.S.Department of Justice Direct Programs: ARRA Community Oriented Policing Services (COPS)-Hiring Grant 16.710 2009RKWX0214 50,876 Community Oriented Policing Services(COPS)- Hking Grant 16.710 2008UMWX0031 68,478 Total U.S Department of Justice 119,354 U.S.Department of Transportation Pass Through programs: Job Access&Reverse Commute(JARC)and New Freedom Grant Pass through- South Florida Regional Transportation Authority 20.516 7X05200 75,374 Total U.S Department of Transportation 75,374 U.S.Department of Housing and Urban Development Direct Programs: Community Challenge Grant 14. CCPFL0050-11 179,923 Total U.S Department of Housing and Urban Development Direct programs 179,923 Passthrough Programs: Miami Dade County Public Housing Co Development-Non-Housing Co Development Block Grant 14.218 83111823 2,562,831 Total U.S Department of using and an Development Pass-Tbrough 2,562,831 Total U.S Department of Ho rban Development 2,742,754 TOTAL EXPENDITURES OF FEDERAL AWARDS 2,937,482 76 CITY OF OPA LOCKA,FLORIDA Notes to the Schedule of Expenditures of Federal Awards For the Year Ended September 30,2013 NOTE 1 —BASIS OF PRESENTATION The accompanying Schedule of Expenditures of Federal Awards (the "Schedule") includes the federal grant activity of the City of Opa Locka, Florida (the "City"). The information in this schedule is presented in accordance with the requirements of the Office of Management and Budget (OMB) Circular A-133, Audits of States, Local Governments, and Non-Profit Organizations. For purposes of the Schedule, federal awards include all grants and contracts entered into directly between the City and agencies and departments of the federal government and pass-through agencies, as applicable. The City did not transfer awards to subrecipients during the fiscal year ended September 30, 2013. NOTE 2—SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES Expenditures reported on the Schedule are reported he accrual basis of accounting. Such expenditures are recognized following th To'st inciples contained in OMB Circular A-87, Cost principles for State, Local Indian 'bal Governments wherein certain types of expenditures are not allowable ar mited as to reimbursement. 77 CITY OF OPA-LOCKA,FLORIDA Schedule of Findings and Questioned Costs For the Year Ended September 30, 2013 SECTION 1 —SUMMARY OF AUDITORS RESULTS 1. The auditor's report expresses an unmodified opinion on the financial statements of the City of Opa-Locka. 2. Twelve (12) significant deficiencies disclosed during the audit of the financial statements are reported in the report on internal control over financial reporting and on compliance and other matters based on an audit of financial statements performed in accordance with government auditing standards. Two (2) material weaknesses are reported. 3. No instances of noncompliance material to the financial statements of the City of Opa- Locka were disclosed during the audit. 4. No significant deficiencies in internal control over in 'or federal award programs are reported in the report on compliance for each major pr am and on internal control over compliance required by OMB circular a-133.No in i eaknesses are reported. 5. The auditor's report on compliance for the or eral a and programs for the City of Opa-Locka expresses an unmodified opinion major federal programs. 6. Audit findings that are required to be o accordance with Section 510(a) of OMB Circular A-133 are reported ' ' Sc ule. 7. The programs tested as major in re: CFDA 16.710 lic Sa P nership and Community policing Grants CFDA 14.218 Co unit evelopment Block Grants/Entitlement Grants 8. The threshold for distinguishing Types A and B programs was $300,000 9. The City of Opa-Locka was not determined to be a low-risk auditee. 78 CITY OF OPA-LOCKA, FLORIDA Schedule of Findings and Questioned Costs For the Year Ended September 30, 2013 SECTION II- PRIOR YEAR FINANCIALSTATEMENT FINDINGS 2012-01 Utility Billings—Matter is not fully resolved and will be repeated 2012-02 Interim Reporting.—Matter was not resolved and will be repeated 2012-03 Other Post Employment benefits (OPEB)—Matter was resolved and will not be repeated. 2012-04 Account reconciliations—Matter was not resolved and will be repeated. 2012-05 Payroll Documentation—Matter was resolved and will not be repeated. 2012-06 Building License and Permits Cash receipts—Matter was not resolved and will be repeated. SECTION III—CURRENT YEAR FINANCIAL STATEMENT FINDINGS Material Weaknesses 2013-01-Journal Entries and Account Reconciliatio Condition: Management failed to reconcile al Ast all he balance sheet accounts including interfund balances and transfers, r ncilia ons, accounts receivables, payables, capital expenditures on a timely basis. Criteria: All balance sheet accounts shou b ciled on a monthly basis to ensure that balances are correct to ensure cy in reporting purposes. Cause: The underlying cause w nagement being multiple months behind in the accounting and bookk o e City. This was primarily due to a change in key management personnel th littl ve sight during the transition process and a lack of resources. Effect: As a result, the auditor's received in excess of Sixty-Five (65) adjusting journal entries during fieldwork, in addition to several more entries that the auditor's proposed resulting in more than Seventy (70) adjusting entries to the trial balance. With such significant adjustments being made,the City does not have accurate financial information to make informed financial decisions. As a result, the City may make a decision predicated on a certain balance sheet item when in reality that decision may be incorrect and could have adverse consequences. Recommendation: We recommend that the City develop new procedures to ensure monthly financial reporting is completed accurately and timely. This may be implemented via checklists designed to assist in capturing all relevant accruals, prepaid expense, bank reconciliations etc. In addition we recommend that the Assistant finance director and/or the finance director review the month end closings to ensure that balances are all correctly stated. 79 CITY OF OPA-LOCKA,FLORIDA Schedule of Findings and Questioned Costs For the Year Ended September 30, 2013 SECTION III—CURRENT YEAR FINANCIAL STATEMENT FINDINGS (Continued) Material Weaknesses (Continued) 2013-01-Journal Entries and Account Reconciliations (Continued) View of Responsible Officials and Planned Corrective Actions: Management concurs with the comment for the period under audit. Since then the department has been fully staffed with key personnel in place. Management has instituted monthly reconciliations of all accounts. 2013-02 Utility Billings and Receivables Condition: All Activity in the utility billing system does t appear to be posting properly to the general ledger. Additionally customers are bille estimated amount because the electronic meter readers are not working correctly.4rn lances are then trued up at a later date. Criteria: The Utility billing system should in e with the general ledger to allow accurate recording of the bills to custom we any other adjustments. The Utility billings should also be performed on an ac 1 estimated basis. Cause: It appears that manage t d' not ceive adequate training on the integration of the two systems and softwa e ve not been address relating to the meter readers. Effect: As a result, the sys s do not reconcile as there appear to have been mispostings to the general le . naccurate bills are being sent out and management are also unable to come up with an effective allowance for bad and doubtful accounts. Recommendation: We recommend that management perform a full reconciliation process between the utility billing system and the general ledger once they have implemented training on how the two systems should work with one another. We also recommend that management be able to create a detailed aging report to allow an adequate review for the allowance account. Additionally management should hire a consultant who understands how the electronic water meter readers work and can integrate them with the City's utility billing system and provide the necessary training to the City's officials. View of Responsible Officials and Planned Corrective Actions: Recommendation noted. Processes have been put in place to ensure that monthly reconciliation of the utility billing system and the general ledger reflect the same information. The department has established monthly aging of the utility billing effective October 2013. 80 CITY OF OPA-LOCKA, FLORIDA Schedule of Findings and Questioned Costs For the Year Ended September 30, 2013 SECTION III — CURRENT YEAR FINANCIAL STATEMENT FINDINGS (Continued) Material Weaknesses (Continued) 2013-03 Interim Reporting Condition: Financial information should be presented to management and those charged with governance on an interim basis to help in financial decisions and planning. Criteria: Once account reconciliations have been completed as addressed in finding 2013-01, the appropriate financial statements should be provided to management for meeting and discussion purposes. Cause: A complete set of financial reports are not be rovided to management on an interim basis. Effect: Without proper interim financial info do mans ment may not be able to make prudent financial decisions or plans. Recommendation: We recommend that rn er reconciliation procedures have been adopted as noted in finding - ncial reports be prepared and made available for management's mee ' s on an interim basis. View of Responsible O�ci nee Actions: Effective fiscal year 2014, quarterly financial repo re bei p iagement. The rest of this page left intentionally blank. 81 CITY OF OPA-LOCKA,FLORIDA Schedule of Findings and Questioned Costs For the Year Ended September 30, 2013 SECTION III—FINANCIAL STATEMENT FINDINGS (Continued) Significant Deficiencies 2013-04 Licenses and Permits Condition: Code enforcement, Building licenses and permits policies and procedures require a copy of the invoice be provided to the customer and a copy to the finance department. However, none of these are being processed electronically. Criteria: the cash receipt process needs to be tracked for receivable or deferred inflow follow up in case of any disputes that may arise. Invoices should support the receivable balances. Cause: The finance department is not provided with the oper documentation so cannot tell if the receipt is an advanced payment or the payme f a receivable. Effect: Without the proper documentation made ilable t e finance department, any customer issues may result in an adverse decis' to City. Recommendation: We recommend that t nc partment be more involved in the cash receipts documentation process and 1 ith those responsible for providing the documents. The documents sh en e kept in a more accessible manner as well as being provided in an electro o o t t they may easily be reconciled. View of Responsible Off nned Corrective Actions: Management concurs with this recommendati Trains was provided to the Code Enforcement, Building & Licensing and permits diva S. 1 permits and receipts are now done electronically for easy accessibility of all users, d reconciliation of receipts can be done by the finance staff. The rest of this page left intentionally blank. 82 CITY OF OPA-LOCKA,FLORIDA Schedule of Findings and Questioned Costs For the Year Ended September 30, 2013 SECTION III—FINANCIAL STATEMENT FINDINGS (Continued) Significant Deficiencies 2013-05 Capital Leases Condition: Capital leases were recorded as rent expense and were not split between principal and interest portions. Additionally Capital leases entered into during the year were not recorded correctly at inception to record the long-term debt as well as capital acquisition and the related proceeds. Criteria: Capital leases should be tracked for government wide reporting purposes as well as splitting out principle and interest as is required under generally accepted accounting principles. The proceeds should be shown as other financing sources at the fund level and principle and interest should be recorded separately. Cause: Staff is not being adequately trained to be a t ntify a capital lease and therefore account for it appropriately. Effect: Financial reporting as a result is not ompliance with generally accepted accounting principles. Recommendation: We recomme 6at ital leases are identified before they are recorded so that staff will be al d t ey are and can be informed how to record them correctly in the general ledg View of Responsible ON* ls an lan ned Corrective Actions: Management has updated this process to be in coe generally accepted accounting principles. The rest of this page left intentionally blank. 83 CITY OF OPA-LOCKA,FLORIDA Schedule of Findings and Questioned Costs For the Year Ended September 30, 2013 SECTION III—FINANCIAL STATEMENT FINDINGS (Continued) Significant Deficiencies 2013-06 Accrued Compensated Absences Condition: Accrued compensated absences were calculated without the consideration of the 1,000 hour limit as mandated by the cities policies and procedures for employees not under any other employment agreements other than with the City. Criteria: Employee's should not be allowed to incur more than 1000 hours of sick and vacation time. Cause: Staff hours were not being tracked according to the City's policies and procedures due to insufficient monitoring. Effect: As a result of this failure the City could be40K[a significant overpayments in benefits to its employees. Recommendation: We recommend that the City ugh it's human resource and finance departments track all employee's vacatio is e to ensure that no one goes over the 1,000 hour limit. View of Responsible Officials lb P e orrective Actions: Management concurs. Policies and procedures have p a Payroll responsibilities have since been assigned to the Finance d low for consistent monitoring of personnel hours 2013-07 Budgets Condition: Budgets are not being adhered to, properly balanced and amended or being utilized by management as they should be. As a result expenditures have exceeded appropriations in certain cases. Criteria: The budget is an important legal requirement for the City and is a public document. City management and officials are held accountable for any budget overages or amendments, since the budget demonstrates how the City is going to spend its tax payers money. Cause: Staff is not being held accountable for the budget and there is no monitoring from budget to actual expenditures. 84 CITY OF OPA-LOCKA,FLORIDA Schedule of Findings and Questioned Costs For the Year Ended September 30, 2013 SECTION III—FINANCIAL STATEMENT FINDINGS (Continued) Significant Deficiencies (Continued) 2013-07 Budgets (Continued) Effect: The City may be out of compliance with the Florida Statutes if expenditures exceed budgeted amendments and poor decisions may be made if budgets are not being followed correctly which cause place the City in financial difficulty. Recommendation: We recommend that the City appoint someone within the finance department to take responsibility for the budget and to track budget to actual expenditures on a monthly basis in order to make informed financial decisions as well as any necessary budget amendments.. View of Responsible Officials and Planned Correcti Actions: Department Heads are provided a copy of their budget to actual balanc o monthly basis. The Budget Administrator will work more closely with the artmen ads and the City Manager to ensure budgets stay within approved guideli 2013-08 Deteriorating Financial Condi Condition: Based upon a review a ancial statements we noted the following issues: There has been a lack i rmation available relating to financial reporting requirements. Accounti ecord ave had to be recreated; the budgeting process was not monitored properly ca out effectively. Additionally the City has been experiencing decreasing pro values, extremely high unemployment (17.5%) and static household incomes over the past ten years. Significant funds were transferred from a proprietary fund to the general fund. Criteria: The City needs to be able keep its expenditures in line with its revenue sources and cannot rely on revenues from its utility funds to fund general government operations. The factors discussed above, potentially indicate fiscal stress and a deteriorating financial condition. Cause: There have been significant staff turnovers at the highest level, which has disrupted continuity and has caused ineffective training for finance staff as well as a general lack of experience with specific matters related to the City. Property values continue to decline which causes a loss in property tax assessments and a reduction of a significant revenue stream. 85 CITY OF OPA-LOCKA,FLORIDA Schedule of Findings and Questioned Costs For the Year Ended September 30, 2013 SECTION III—FINANCIAL STATEMENT FINDINGS (Continued) 2013-08 Deteriorating Financial Condition (Continued) Effect: If financial conditions continue to deteriorate, the City may require state assistance which would then be deemed a financial emergency pursuant to Section 218.503(1), Florida Statutes. Recommendation: We recommend that management develop a five year plan to address its financial condition and stabilize the City before financial emergency conditions could potentially take effect. View of Responsible Officials and Planned Corrective Actions: SECTION IV- FEDERAL AWARD FINDIN Significant Deficiencies Control 2013-09—Grant file documen Ri *ned Condition: Grant files we o on a regular basis. Several quarterly files that were tested for expendi s and in ursements had missing documentation and needed to be reconstructed as info do as missing Criteria: All grant files should be maintained on a monthly basis and information reported should be complete and accurate. Cause: The City has a lack of resources in this department and staff is stretched due to the problems with maintaining the City's books and records on a timely basis as noted above. Effect: Incorrect reports could be submitted to the Federal agencies, expenses may not be properly tracked and therefore not reimbursed. Recommendation: We recommend that the City hire a grant compliance specialist or appoint someone in this area to ensure that all files are properly maintained. View of Responsible Officials and Planned Corrective Actions: Management concurs. The City will address this personnel issue accordingly. 86 CITY OF OPA-LOCKA,FLORIDA Schedule of Findings and Questioned Costs For the Year Ended September 30, 2013 SECTION IV-FEDERAL AWARD FINDINGS (Continued) Significant Deficiencies (Continued) Compliance(Continued) 2013-10 —Federal Clearing House Submissions and Submission to the Auditor General Condition: The City had failed to file its single audit packet including the Data Collection Form in a timely manner as required by the Federal Clearinghouse as well as report by timely to the Auditor General of the State of Florida. Criteria: The City is required to file its data collection form and audited financial statements the earlier of thirty (30) days after the receipt f the Auditor's Report or Nine (9) months after the year end (June 30) as well as fi ith the Auditor general by the same date. Cause: The City has failed to complete its fin ial temen audits in a timely manner, which has lead to late submissions being late. Effect: Failure to comply with the rules o e Clearing House rules and the rules of the Auditor General of the Stat for could have an adverse effect on the city's future ability to receive Federal and nd to funding Recommendation: The Cit o ensure that its audits are completed prior to June 30, each year in order be in m iance with the Federal Clearing House and the Auditor General of the Sta f Fl da. View of Responsible Officials and Planned Corrective Actions: It is the City's goal to complete its audit by June 30 each year to be in compliance with the Federal Clearing House and the Auditor General of the State of Florida. The rest of this page left intentionally blank 87 CITY OF OPA-LOCKA,FLORIDA Schedule of Findings and Questioned Costs For the Year Ended September 30, 2013 SECTION V-OTHER MATTERS 2013-11 Statistical Information Condition: There appears to be certain statistical information missing in relation to debt such as legal debt limits and overlapping debt information as well as inconsistencies in capital assets statistics by function/program and operating indicators by function/program. Criteria: Statistical information should be complete and up to date if the City wants to submit its Comprehensive Annual Financial report (CAFR) for the Governmental Finance Officers Association(GFOA) Certificate of excellence in financial reporting. Cause: It appears that relevant information was not pro rly updated in the past and is not being monitored by finance staff. Effect: The City is not presenting complete and + rate i ation to the readers of its CAFR. Recommendation: We recommend that em follow up and update the required information on a monthly basis from th va ternal and external sources where possible and to use the GFOA disc ch list as a guide line. View of Responsible Officials an n rrective Actions: 88 MANAGEMENT LETTER IN ACCORDANCE WITH THE RULES OF THE AUDITOR GENERAL OF THE STATE OF FLORIDA To the Honorable Mayor and City Commission, City of Opa-Locka, Florida. We have audited the financial statements of the City of Opa-Locka Florida (the City), as of and for the fiscal year ended September 30, 2013, and have issued our report thereon dated September xx, 2014. We conducted our audit in accordance with auditing standards generally accepted in the United States of America; the standards applicable to financial audits contained in Government Auditing Standards, issued by the Comptroller General of the United States; OMB Circular A-133, Audits of States, Local Governments, and Non-Profit Organizations; and Chapter 10.550, Rules of the Florida Auditor General. We have issued our Independent Auditor's Report on Internal Control over Financial Reporting and Compliance and Other Matters Based on an A of the Financial Statements performed in Accordance with Government Auditi ndards, Independent Auditor's Report on Compliance with Requirements That C d Ha a Direct and Material Effect on Each Major Federal Program and State Proj as pplic e) and on Internal Control over Compliance in Accordance with OMB Ci -133 and Chapter 10.550 Rules of the Florida Auditor General; and Schedul Fin s and Questioned Costs. Disclosures in those reports and schedule, which are e e er 30, 2013, should be considered in conjunction with this manageme tter. Additionally, our audit was co t rdance with Chapter 10.550, Rules of the Auditor General, which e conduct of local governmental entity audits performed in the State o orida. hi tter includes the following information, which is not included in the afore tione uditor's reports or schedule: ❑ Section 10.554(1)(i)1., RU s of the Auditor General, requires that we determine whether or not corrective actions have been taken to address findings and recommendations made in the preceding annual financial audit report. Corrective actions have been taken to address findings and recommendations made in the preceding annual financial audit report except as noted below under the heading Prior Year Findings and Recommendations. 89 Tabulation of Uncorrected Audit Findings Current Year 2011-12 FY 2010-11 FY Finding# Finding# Finding# 2013-01 2012-04 2011-02 2013-02 (modified) 2012-01 2011-01 2013-03 2012-02 2013-04 2012-06 ❑ Section 10.554(1)(i)2., Rules of the Auditor General, requires our audit to include a review of the provisions of Section 218.415, Florida Statutes, regarding the investment of public funds. In connection with our audit, we determined that the City complied with Section 218.415, Florida Statutes. ❑ Section 10.554(1)(i)3., Rules of the Auditor G ral, wires that we address in the management letter any recommendations im rove ancial management. In connection with our audit, we had several rec dations as noted in the Schedule of Findings and Questioned Costs listed ab and bered from 2013-01 through 2013- 10 ❑ Section 10.554(1)(i)4., Rule f e ditor General, requires that we address noncompliance with provision or grant agreements, or abuse, that have occurred, or are likely to c ed, that have an effect on the financial statements that is less than mate ' but i warrants the attention of those charged with governance. In connectio ith ou udit, we had one finding noted above at 2013-10. ❑ Section 10.554(l)(i)5., Rule of the Auditor General, requires that the name or official title and legal authority for the primary government and each component unit of the reporting entity be disclosed in this management letter, unless disclosed in the notes to the financial statements. (See Note 1 of the financial statements). ❑ Section 10.554(l)(i)6.a., Rules of the Auditor General, requires a statement be included as to whether or not the local governmental entity has met one or more of the conditions described in Section 218.503(1), Florida Statutes, and identification of the specific condition(s) met. In connection with our audit, we determined that the City did not meet any of the conditions described in Section 218.503(1), Florida Statutes. 90 ❑ Section 10.554(1)(i)6.b., Rules of the Auditor General, requires that we determine whether the annual financial report for the City for the fiscal year ended September 30, 2013, filed with the Florida Department of Financial Services pursuant to Section 218.32(1)(a), Florida Statutes, is in agreement with the annual financial audit report for the fiscal year ended September 30, 2013. In connection with our audit, we determined that these two reports were in agreement. ❑ Pursuant to Sections 10.554(1)(i)6.c. and 10.556(7), Rules of the Auditor General, we applied financial condition assessment procedures. It is management's responsibility to monitor the City's financial condition, and our financial condition assessment was based in part on representations made by management and the review of financial information provided by same. Our assessment indicated that the City's financial conditions are deteriorating as of September 30, 2013. See management letter comment 2013-08 above. Our management letter is intended solely for the information and use of the Legislative Auditing Committee, members of the Florida Senate and the Florida House of representatives, the Florida Auditor General, Federal At other granting agencies and applicable management, and is not intended to be an Id not be used by anyone other than these specified parties. We wish to thank the City of Opa-Locka, Flori he personnel associated with it for the opportunity to be of service to them i is en ment as well as engagements in the future and the courtesies extended to us. HCT Certified Public Acco s Consultants, LLC September xx, 2014 91