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HomeMy Public PortalAbout15-9027 Accepting the Audited Financial Statement for Year ending September 30. 2014 Sponsored by: City Manager RESOLUTION NO. 15-9027 A RESOLUTION OF THE CITY COMMISSION OF THE CITY OF OPA-LOCKA, FLORIDA, ACCEPTING THE AUDITED FINANCIAL STATEMENT FOR THE FISCAL YEAR ENDING SEPTEMBER 30TH, 2014; PROVIDING FOR INCORPORATION OF RECITALS; PROVIDING FOR AN EFFECTIVE DATE WHEREAS, The City of Opa-locka has received an audited financial statement for the fiscal year ending September 30th, 2014; and WHEREAS, this Statement is attached as Exhibit "A" and incorporated herein; and WHEREAS, the City desires to accept the Statement. 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 accepts the Attached Audited Financial Statement for the fiscal year ending September 30th, 2014. PASSED AND ADOPTED this 29th day of June, 2015. r / 1 YI A T' YLOR MAYOR Attest to: Approved as to form and legal sufficiency: i tl, \ __)_ "2.________ Jo na Flores Vincent T. Brown, Esq.City Clerk BROWN LAW GROUP, LLC City Attorney Resolution No. 15-9027 Moved by: COMMISSIONER PINDER Seconded by: COMMISSIONER SANTIAGO Commission Vote: 5-0 Commissioner Kelley: YES Commissioner Pinder: YES Commissioner Santiago: YES Vice-Mayor Holmes: YES Mayor Taylor: YES \\ ::. ,, ..7.. , , i \ \ l,,,... , t. , , „ ._. ,,,, ,,,_,.. .„„:„ 4„ , • /I t , am.. °_1.MP 1 '911 lXY/0fAXY� *04- tr ). -4 }.�{ f '1 --J - _ I. � h 00�� � I Y 3 + • Illj Ilk( ,l,1 a 22 )1., ' 4'', ,'• ' = Fit. -- 1 h ✓ •,. Qroot Cite of , r n y ' . , ---,.. ./1,,, : \ ,s: 4) r. ,,,, ' ', ,..‘\. t's 'r.,VI 2 . .. 2.' t't V•, ,,((/,'. ....,,,,,,. . ' 2,.:-- V...t."-%,'''''• ,.. City of Opa-thc&a Floriia Comprehensive Annual Financial&port For Fiscal Year Ended September 30, 2014 •,iuch n ,.. O ,( O y Oj . p e\�IaiM1' . ..! i 1' `mac 1 .4. �M y �� � ,.:; r , 0,,,,,. e. .4„, r ......_ . _____ a L 1 m- 1 11' Wa 1 9' 'f, 4 '� j 7 x r s tx it . t The City of Opa-Cocka fMission Statement The Mission of the City of Opa-Cocka is to enhance the quality of life, environment, and safety of our customers and employees in an atmosphere of courtesy, integrity, and quality service. • ,, HCT Certified Public Accountants & Consultants, LLC 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, 2014 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 presentation of these financial statements in accordance with accounting principles generally accepted in the United States of America; this includes the design, implementation, and maintenance of internal control relevant to the preparation and fair presentation of financial statements that are free from material misstatement, whether due to fraud or error. Auditor's Responsibility - Our responsibility is to express opinions on these financial statements based on our audit. We conducted our audit in accordance with auditing standards generally accepted in the United States of America and the standards applicable to financial audits contained in Government Auditing Standards, issued by the Comptroller General of the United States. Those standards require that we plan and perform the audit to obtain reasonable assurance about whether the financial statements are free from material misstatement. An audit involves performing procedures 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 statement We believe that the audit evidence we have obtained is sufficient and appropriate to provide a basis for our audit opinions.■ 1 West Palm Beach Miami Hollywood Phone(561)655-2664 Phone(305)331-8768 Phone(954)966-4435 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, 2014, 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 ask Required Supplementary Information now 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 46-49 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 in accordance with auditing standards generally accepted in the United States of America, which consisted of inquiries of management about the methods of preparing the information and comparing the information for consistency with management's responses to our inquiries, the basic financial statements, and other knowledge we obtained during our audit of the basic financial statements. We do not express an opinion or provide any assurance on the information because the limited procedures do not provide us with sufficient evidence to express an opinion or provide any assurance. Other Information Our audit was conducted for the purpose of forming opinions on the financial statements that collectively comprise the City's basic financial statements. The introductory section, combining and individual nonmajor fund financial statements and statistical section, are presented for purposes of additional analysis and are not a required part of the basic financial statements. The schedule of expenditures of federal awards is presented for purposes of additional analysis as required by U.S. Office of Management and Budget Circular A-133, Audits of States, Local Governments, and Non-Profit Organizations, and is 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. 2 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. Other Reporting Required by Government Auditing Standards In accordance with Government Auditing Standards, we have also issued our report dated June 12, 2015 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 reportin and com liance. Y{CTCertified PublicAccountants csZ Consultants, LLC Hollywood, Florida June 12,2015 ,41111°1 (1°111146<CC\ 3 City of Opa-locka,Florida—Comprehe ye Annual Financial Report Fiscal Year Ended September 30,2014 , TABLE OF CONTENTS INTRODUCTORY SECTION Page Letter of Transmittal i 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 16 Reconciliation of the Balance Sheet-Governmental Funds to the Statement of Net Position 17 Statement of Revenues, Expenditures, and Changes in Fund Balances- Governmental Funds 18 Reconciliation of the Statement of Revenues,Expenditures, and Changes in Fund Balances Governmental Funds to the Statement of Activities 19 Statement of Net Position- Proprietary Funds 20 Statement of Revenues,Expenses, and Changes in Fund Position- Proprietary Funds 21 Statement of Cash Flows-Proprietary Funds 22 Notes to the Basic Financial Statements 24-48 Required Supplementary Schedules(Unaudited) Budgetary Comparison Schedules: General Fund 49-50 Peoples'Transportation Tax Fund 51 Capital Capital 52 Notes to the Budgetary Comparison Schedules 53 Combining and Individual Fund Statements(Unaudited) Combining Balance Sheet-Nonmajor Governmental Funds 54 Combining Statement of Revenues,Expenditures and Changes in Fund Balances—Nonmajor Governmental Funds 55 Combining Statement in Net Position Balances—Nonmajor Enterprise Funds 56 Combining Statements of Revenues,Expenditures and Changes in Funds Balances- Nonmajor Enterprises 57 Combining Statement of Cash Flows—Nonmajor Enterprise 58 STATISTICAL INFORMATION Statement 1 —Net Position by Component 59 Statement 2—Changes in Net Position 60-61 Statement 3—Governmental Activities Tax Revenues by Source 62 Statement 4—Fund Balances of Governmental Funds 63 Statement 5—Changes in Fund Balances of Governmental Funds 64 Statement 6—General Governmental Tax Revenues by Source 65 Statement 7—Assessed Value of all Taxable Property 66 Statement 8—Property Tax Rates Direct and Overlapping Governments 67 Statement 9—Property Tax Levies and Collections 68 Statement 10—Ratios of Outstanding debt by Type 69 Statement 11 —Pledged Revenue Coverage 70 Statement 12—Demographic and Economic Statistics 71 Statement 13—Principal Employers 72 Statement 14—Full Time Equivalent City Government Employees by Function/Program 73 Statement 15—Operating Indicators by Function/Program 74 Statement 16—Capital Assets Statistics by Function/Program 75 COMPLIANCE SECTION Report of Independent Certified Public Accountants on Internal Control over Financial Reporting and on Compliance and Other Matters Based on an Audit 76 Performed in Accordance with Government Auditing Standards Report of Independent Certified Public Accountants on Compliance with Requirements Applicable to Each Major Program and on Internal Control Over 77 Compliance in Accordance with OMB Circular A-133 Schedule of Expenditures of Federal Awards 80 Notes to the Schedule of Expenditures 81 Schedule of Findings and Questioned Costs 82-85 Management Letter in Accordance with the Rules of the Auditor General of the State of Florida 86-88 Independent Auditors' Report on Compliance with Sec. 218.415,Florida Statute, Local Government Investment Policies 89-90 ii `` .- ekQ N., (91101, e— I,e �w - IC stA r : - ;ry �O � poacS£%9 June 26,2015 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 30,2014,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 Americaas prescribed by the Governmental Accounting Standards Board (GASB). This report is published to fulfill that requirement for the fiscal year ended September 30,2014. Management assumes full responsibility for the completeness and reliability of the information contained in this report, based upon a comprehensive framework of internal control that it has established for this purpose. Because the cost of internal control should not exceed anticipated benefits, the objective is to provide reasonable, rather than absolute, assurance that the financial statements are free of any material misstatements. The financial statements have been audited by Harvey,Covington&Thomas,LLC,a firm of licensed certified public accountants. The independent auditors have issued an unqualified opinion on the City's financial statements for the year ended September 30, 2014. The independent auditors' report is located at the front of the financial section of this report. The Management's Discussion and Analysis (MD&A) segment immediately follows the independent auditors' report and provides narrative introduction, overview, and analysis of the basic financial statements. MD&A complement this letter of transmittal and should be read in 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 and operated by Miami- Dade County, being its best known landmark. The City of Opa-locka community is served by two elementary schools. This year has been very challenging with a further decline in taxable property values and the implementation of legislative measures that have placed limits on how local governments can levy ad valorem taxes today and into the future. The economic decline, which began in fiscal year 2007, continued to negatively impact the City during fiscal year 2014. The city has been forced to accommodate losses in our property tax revenue. Between the sluggish economy and the voter approved constitutional amendments, the current year taxable value has decreased from $698 million to $660, a reduction of 5.4%. The City continues to struggle although it's surrounding sister cities have shown some increase in their property tax value. For the past five years, the City's taxable value has reduced from$974 million to$660 million, a reduction of 32.2%. The reliance on grant funds has risen due to decreases in other revenue sources. The City is aggressively applying for grants to supplement city monies to fund services, especially in the area of public safety, parks and recreation and infrastructure improvement. The City also seeks the assistance of the State Revolving loan program to assist the city with some much needed infrastructure improvements,especially in our drinking water,wastewater and storm water. 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 recently completed 2014 census 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 and annexation. The City has started this process by applying to the Miami-Dade County and is in the final stage of the annexation process,and the Community Redevelopment Plan has been prepared and received The major repairs of the City's four pump stations have been completed. With the completion of pump stations project, businesses whose applications were pending for permits are now being issued. In compliance with the City's financial integrity ordinance, the City's annual budget is adopted with the -ii- provision of $500,000 for contingency reserve. As of September 30, 2014, the City's unreserved, undesignated general fund balance was in a negative position. 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 2014 was another year full of challenges. However, the city came through with some accomplishments. Our new Helen Miller Multi-Purpose Community Center was completed, Historical City Hall began phase I of its restoration project, and new partnership was forged with City National Bank for the construction of the City's new Administrative building. The year 2015 will be synonymous to a rebirth as we embark on the most ambitious transformation of our infrastructure, which has been burdening our City for many years.Last year,Mayor Taylor and Commissioners passed a resolution to allow for the building of the "New City Hall"on an adjacent property to Historic City Hall. (Acquisition of new Building)The New City Hall and the re-birth of Old Historic City Hall will be equally connected in beauty, elegance and the Moorish Architectural Theme which will be the anchor located within steps of the futuristic Downtown Revitalization and Development plans for Opa-locka. The planning, remediation, and preparation for the iconic building foresees developing a mixed-use facility that will serve as a self-sufficient cultural and social event venue as well as a South Florida tourist destination. The City's infrastructure plans are of the largest and most intrinsic of its kind for any city of similar size and urban complexity. The dynamics of each design and planning schematic is unique in location and project-specific used to upgrade and infrastructure developments such as the drainage network, roadway improvements, water and sewer systems upgrades, and will dramatically affect City Iparks and attract recreational activities that will positively impact the residents and businesses in the City. There are great plans ahead including our vision for annexation even_ with these recent infrastructures wins for the City of Opa-locka,which will take the City of Opa-locka from great to grand. ACKNOWLEDGEMENTS The Finance department wishes to express our appreciation to the City Manager for his effective leadership, all the departments who assisted and contributed to the preparation of this report. In closing, without the leadership and support of the Mayor, the Commissioners, and the City Manager the accomplishments and anticipated future successes noted in this report would not have been possible. Respectfully submitted, Susan A.Gooding-Liburd,CPA,CGFO Finance Director -iii- (TC \ tP'i7 i b O4p OR�'<<O CITY OF OPA-LOCKA, FLORIDA List of Principal Officials CITY COMMISSION -fr -r- -1/4* 1\'' *;* ;r Iti y ilk e a - ■ Timothy Holmes Joseph Kelley Vice Mayor _ Commissioner • * ** ';`; e' Myra Taylor *** 3 *** ' "' • ‘ Mayor *.** ~_. �•, • io 1 Nn f ,/ Terence Pinder Luis Santiago Commissioner Commissioner CITY EXECUTIVE MANAGEMENT Kelvin Baker, Sr. City Manager Joanna Flores City Clerk Vincent Brown City Attorney Susan Gooding-Liburd, CPA, CGFO Finance Director ORGANIZATIONAL Cl IAIZT Citizens Mayor and I City Cu rnmiss;on 1 1 it i 1 City Attorney City Mr -e City Clerk u 0 7111s& Comlioneed Finance — DepaHment Human ... Pesolift of elm anon ... Technology E,,,, ommr( Jidr I 111,11 ,';II ....Police Dep art lia— Building and I ir.ehses Pub he l.:Vld 11:s .... Lltilitle s Parks and •—• Rca:reatton LCr rue Prevention 8: Opa-locka Youth Academy(DJJ) V HCT Certified Public Accountants & Consultants, LLC 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, 2014 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 presentation of these financial statements in accordance with accounting principles generally accepted in the United States of America; this includes the design, implementation, and maintenance of internal control relevant to the preparation and fair presentation of financial statements that are free from material misstatement, whether due to fraud or error. Auditor's Responsibility j Our responsibility is to express opinions on these financial statements based on our audit. We conducted our audit in accordance with auditing standards generally accepted in the United States of America and the standards applicable to financial audits contained in Government Auditing Standards, issued by the Comptroller General of the United States. Those standards require that we plan and perform the audit to obtain reasonable assurance about whether the financial statements are free from material misstatement. ' An audit involves performing procedures 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.■ 1 West Palm Beach Miami Hollywood Phone(561)655-2664 Phone(305)331-8768 Phone(954)966-4435 ' 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, 2014, 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 46-49 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 in accordance with auditing standards generally accepted in the United States of America, which consisted of inquiries of management about the methods of preparing the information and comparing the information for consistency with management's responses to our inquiries, the basic financial statements, and other knowledge we obtained during our audit of the basic financial statements. We do not express an opinion or provide any assurance on the information because the limited procedures do not provide us with sufficient evidence to express an opinion or provide any assurance. Other Information Our audit was conducted for the purpose of forming opinions on the financial statements that collectively comprise the City's basic financial statements. The introductory section, combining and individual nonmajor fund financial statements and statistical section, are presented for purposes of additional analysis and are not a required part of the basic financial statements. The schedule of expenditures of federal awards is presented for purposes of additional analysis as required by U.S. Office of Management and Budget Circular A-133, Audits of States, Local Governments, and Non-Profit Organizations, and is 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. 2 V 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. Other Reporting Required by Government Auditing Standards In accordance with Government Auditing Standards, we have also issued our report dated June 12, 2015 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. HCl'Certified Public Accountants &Consultants, EEC Hollywood,Florida June 12,2015 3 , 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-term 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 information contained within this MD&A should be considered only a part of a greater whole. The reader of this statement should take time to read and evaluate all sections of this report, including the footnotes and the other Required Supplemental Information(RSI)provided in addition to this MD&A. Financial Highlights • The net position at the close of the most recent fiscal year was $25,674,499. Of this amount $1,142,661 was restricted for debt service and$26,529,046 is invested in capital assets,net of related debt. • The City's total net position decreased by $(1,550,108). The decrease is primarily attributed to a decline in property tax revenues as well as a decline in water and sewer revenues. • At the close of the most recent fiscal year, the City's governmental funds reported combined ending fund balances of$3,195,742 which falls into the categories of non-spendable,restricted, assigned and 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 information is achieved and the impacts of long-term decisions 4 • • 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 City as a whole, separating its operations between governmental and business-type activities.All information is presented utilizing the economic resources measurement focus and accrual basis of accounting. This method better matches revenues and expenses to the period in which the revenues are earned and the expenses attributed. The focus of the Statement of Net Position(the"Unrestricted Net Position")is designed to be similar to a bottom line for the City and its governmental and business-type activities. This statement combines and consolidates governmental fund's current financial resources (short-term spendable resources) with capital assets and long- term obligations. The Statement of Activities is focused on both the gross and net cost of various activities (including governmental, business-type and component unit), which are provided by the government's general tax and program revenues.This is intended to summarize and simplify the user's analysis of cost of various governmental services and 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 reflected on the page following east 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 incorporate the capital assets and long-term obligation(bonds and others) into the Governmental Activities column(in the Government-Wide statements). 5 ANALYSIS OF THE OVERALL FINANCIAL POSITION AND RESULTS OF OPERATIONS In evaluating the financial position and short-term financial performance of the City, 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 government-wide and fund financial statements. STATEMENT OF NET POSITION Net position of the City represents the difference between (assets) and (liabilities, net position) of the City using the economic resources measurement focus and accrual basis of accounting. In general terms, the City's total assets decreased 6%, which includes a 2% increase in the government activities. The Business type activities decreased 16.4% due to the decrease of our current asset, mainly our cash balance which was used in our daily operation since our revenue continues to decrease and our expenditures also continues to increase. The governmental activities of the City's current and other assets decreased by 14%while the current liability of those activities also decreased 71%. The 71%decrease is due mainly to outstanding liabilities which were payoff during current fiscal year of the general and capital project funds. The Business Type activities of the City's current and other assets decrease 75%while the current liability of those activities also increased by 19%. The 75% decrease in current asset is due to overdrawn cash in the solid waste fund and the 19%increase in liability is due to customer deposit increase from$1.6M to$1.8M as well as the current portion of long-term debt increase$650K to$1.074M as compare to prior year. The governmental activities invested in capital assets increased by 13% and unrestricted net position now stand at negative($161,763)thousand a decrease of$353 thousand from the previous year. The business type activities invested in capital assets increased by 14% and unrestricted net position now stand at a negative $2 million, compared to $1.1 million in prior year. This represents a 132% decrease in unrestricted and is due to the transfer of funds to governmental activities to facilitate in the day to day operation of the City. 6 Net Position-Government-wide Governmental Business-type Activities Activities Total 2014 2013 Change 2014 2013 Change 2014 2013 Change Current and other assets $ 4,886,996 $ 5,550,053 -14% $ 5,704,829 $ 10,003,592 -75% $10,591,825 $ 15,553,645 -47% Capital assets,net 21,306,414 19,908,158 7% 15,425,660 14,379,152 7% 36,732,074 34,287,310 7% Total assets 26,193,410 25,458,211 3% 21,130,489 24,382,744 -15.4% 47,323,899 49,840,955 -5% Other liabilities 2,300,003 3,831,186 -67% 8,401,185 6,815,043 19% 10,701,188 10,646,229 1% Long-term liabilities 8,317,955 8,287,421 0% 2,630,257 3,682,698 -40% 10,948,212 11,970,119 -9% • Total liabilities 10,617,958 12,118,607 -14% 11,031,442 10,497,741 5% 21,649,400 22,616,348 -4% Net assets: Invested in capital assets, net of related debt 14,594,553 12,730,145 13% 11,934,493 10,240,844 14% 26,529,046 22,970,989 13% Restricted 1,142,661 1,123,862 2% - 2,500,294 F 0.0% 1,142,661 3,624,156 -217% Unrestricted (161,762) (514,403) -218% (1,835,446) 1,143,865 162% (1,997,208) 629,462 132% Total net assets $ 15,575,452 $ 13,339,604• 14% $ 10,099,047 $ 13,885,003• -37% $25,674,499 $27,224,607 -6% Five years Total Net Assets (in millions) Total Net Assets $28.0 $27.0 $ ,,,y� e $26.0 { �_. 7_ _ $25.0 1. °i h I t N M .. $24.0 1 $23.0 `v $22.0 — $21.0 r 201^ 2011 2012 2013 2014 Fiscal Year By far the largest portion of the City's net assets reflects its investment in capital assets(e.g., land,buildings and building improvements,and equipment);less any related debt used to acquire those assets that is still outstanding. The City uses these capital assets to provide services to its citizens;consequently these assets are not available for future spending. Although the City's investment in its capital assets is reported net of related debt, it should be noted that the resources needed to repay this debt must be provided from other sources, since the capital assets themselves cannot be used to liquidate these liabilities. 7 STATEMENT OF ACTIVITIES Activities in the City(Table 2)reflected a(2.75%)decrease in overall revenues compared to the prior year and total City expenses reflected a 16.50%increase. The governmental activities represent the most significant activity within the City.Program revenues charges for services increased(17.79%)in governmental activities due to increase in public safety activities. The business-type activities represent the water and sewer operations of the City which included a slight decrease in program revenues. The decrease is primarily due to customer's adjustments. The Transfers in(out)changed by approximately 11.32%. In FY 2014,the$ 3,267,927 transfer is from the Water and Sewer Fund to the General Fund. Total program expenses in governmental activities increased by only.11%from the previous year. The table below presents a summary of changes in net position for the years ended September 30,2014 and 2013, as derived from the government-wide Statement of Activities: Changes in Net Assets Governmental Business-type Activities Activities Total 2014 r 2013 Change ' 2014 r 2013 Change F. 2014 r 2013 Change Revenues: Program revenues: Charges for services $ 1,140,653 $ 937,683 17.79% $ 9,695,924 $ 9,722,795 -0.28% $ 10,836,577 $ 10,660,478 1.63% Operating/capital grants and cunt. 1,526,681 2,893,977 -89.56% 551,963 207,031 62.49% 2,078,644 3,10108 -49.18% General revenues: Property taxes 6,359,842 5,842,217 8.14% - - 0.00% 6,359,842 5,842,217 8.14% Other taxes 2,183,468 2,145,628 1.73% - 0.00% 2,183,468 2,145,628 1.73% Franchise fees 1,377,856 1,484,133 -7.71% - - 0.00% 1,377,856 1,484,133 -7.71% Intergovernmental,unrestricted 2,801,946 2,219,388 20.79% - - 0.00% 2,801,946 2,219,388 20.79% Unrestricted interest earnings 398 84 78.89% - - 0.00% 398 84 78.89% Miscellaneous 1,661,530 859,081 48.30% - - 0.00% 1,661,530 859,081 48.30% Transfers 3,267,927 3,685,262 -12.77% - - 0.00% 3,267,927 3,685,262 100.00% Total revenues 20,320,301 20,067,453 1.24% 10,247,887 9,929,826 r 3.10% 30,568,187 29,997,279 r 1.8677% Expenses and transfers General governrrent 6,254,996 7,423,270 -18.68% - - 0.00% 6,254,996 7,423,270 -18.68% Public safety 7,349,488 7,028,418 4.37% - - 0.00% 7,349,488 7,028,418 4.37% Transportation 2,901,231 2,773,221 4.41% - - 0.00% 2,901,231 2,773,221 4.41% Culture and recreation 1,299,002 1,204,669 7.26% - - 0.00% 1,299,002 1,204,669 7.26% Interest and fiscal charges 279,737 265,041 5.25% - - 0.00% 279,737 265,041 5.25% Water and sewer - - 0.00% 8,838,015 6,442,588 27.10% 8,838,015 6,442,588 0.00% Stormwater - - 0.00% 1,225,943 1,214,902 0.90% 1,225,943 1,214,902 0.00% Solidwaste - - 0.00% 701,959 299,209 57.38% 701,959 299,209 0.00% Transfers - - 0.00% 3,267,927 3,685,262 100.00% 3,267,927 3,685,262 0.00% Total Expenses 18,084,454 18,694,619 r -3.37% 14,033,844 11,641,961 r 17.04% 32,118,298 30,336,580 5.55% Increase(decrease)in net positions 2,235,848 1,372,834 38.60% (3,785,956) (1,712,135) 54.78% (1,550,108) (339,301)' 78.11% Net position,beginning adjusted 13,339,604 11,966,770 ' 1(129% 13,885,003 15,597,138 r -12.33% 27,224,607 27,563,908 -1.25% Net positions,ending $ 15,575,453 $ 13,339,604 14.35% $ 10,099,048 $ 13,885,003 ' -37.49% $ 25,674,499 $ 27,224,607 -6.04% 8 STATEMENT OF ACTIVITIES cont'd Sources of Revenue for Fiscal Year 2014 Unrestricted Charges for Transfers interest earnings services 0% 16% 6% cellaneous 416 .Intergovernmental, Operatingicapital unrestricted — grants and cont. 14% 7% Franchise fees 7% Property taxes Other taxes_ 31% 11% 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 2014, the City's governmental funds reported combined ending fund balances of$3.196 million, increase of$601 thousand in comparison with the prior year decrease of $1.166 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$1.1 million,or 3)various other purposes($.998 million). General Fund The general fund is the chief operating fund of the City. At the end of the current fiscal year, the total fund balance equals$2.092 million a slight increase from prior year. Revenue in the general fund is shown in the following schedule: Increase Percent 2014 Percent 2013 Percent (Decrease) of Increase General Fund Revenues Amount of Total Amount of Total From 2013 (Decrease) Property $ 6,359,842 37% $ 5,842,217 34% $ 517,625 9% Utility service taxes 1,186,277 7% 1,040,076 6% 146,201 14% Communication service taxes 469,614 3% 526,127 3% (56,513) -11% Local option,use and fuel taxes 279,767 2% 274,189 2% 5,578 2% Franchise fees 1,377,856 8% 1,484,133 9% (106,277) -7% Local business taxes 247,810 1% 305,236 2% (57,426) -19% Permits and fees 590,480 3% 552,400 3% 38,080 7% Intergovernmental 413,104 2% 731,061 4% (317,957) -43% Charges for services 112,013 1% 73,592 0% 38,421 52% Fines and forfeitures 413,678 2% 311,346 2% 102,332 33% Interest 314 0% - 0% 314 0% Other revenue 1,577,530 9% 916,818 5% 660,712 72% Other financing sources 4,182,275 24% 4,960,102 29% (777,827) -16% Total Revenues $ 17,210,560 ' 100% $ 17,017,297 100% 193,263 1% 10 FINANCIAL ANALYSIS OF THE CITY'S FUNDS cont'd Total expenditures of the general fund decrease slightly due to decrease in expenditures in general government, although public safety, culture and recreation and debt service increased. Increase in the expenditure of the debt service primarily due to closing cost in the construction loan for the New City Hall administrative building. Expenditures in the general fund are shown in the following schedule: Increase Percent 2014 Percent 2013 Percent (Decrease) of Increase General Fund Expenditures Amount of Total Amount of Total From 2012 (Decrease) General government 5,531,282 34% 6,471,131 40% (939,849) -15% Public safety 6,753,392 42% 6,135,686 38% 617,706 10% Highways and streets 2,293,973 14% 2,266,573 14% 27,400 1% Culture and recreation 1,204,208 8% 1,126,892 7% 77,316 7% Debt service 262,493 2% 188,008 1% 74,485 40% Transfers - 0% - 0% - 0% Total expenditures 16,045,348 100% 16,188,290 100% (142,942) -1% Proprietary Funds The City's proprietary fund statements provide the same type of information found in the government-wide financial statements,but in more detail. The unrestricted net assets (deficit) of the water and sewer, stormwater, and solid waste funds at the end of the current fiscal year amounted to($1.535)million,($641)thousand deficits in the stormwater and solid waste funds combine. The total decrease in net assets for all enterprise funds was $3.8 million. Other factors concerning the finances of these funds have already been addressed in the discussion of the City's business-type activities. GENERAL FUND BUDGETARY HIGHLIGHTS During the year there were no adjustments to the appropriations between the original and final amended budget. However, the General fund actual expenditures amounted to $15,985,746 which represents $2,102,072 over the original and final budget. This resulted in transfers to the General fund of approximately $2.2 million over the budgeted amount. The following departments significantly exceeded their budgets; • Public safety($1.134m) • Public works($684k) • Non departmental($425K) CAPITAL ASSETS AND DEBT ADMINISTRATION Capital Assets The City's investment in capital assets for its governmental and business-type activities as of September 30,2014 amounted to $37.443 million (net of accumulated depreciation). This investment in capital assets includes land, buildings and buildings improvement, machinery and equipment, park facilities, roads and utility systems infrastructure. The total increase in the City's investment in capital assets for the current fiscal year was 6.85%. 11 Capital Assets cont'd Major capital assets additions during the current fiscal year included the following: • Gateway construction$400 thousand • Lift station 11C$1.4 million • Final completion of Helen Miller • Road improvement(sidewalks) City of Opa-locka's Capital Assets (net of accumulated depreciation) Governmental Business-type Activities Activities Total 2014 2013 2014 2013 2013 2014 Land $ 3,042,475 $ 3,042,475 $ 14,762 $ 14,762 $ 3,057,237 $ 3,057,237 Construction in progresss 1,042,228 2,000,774 3,216,395 2,190,590 4,191,364 4,258,623 Buildings and building improvements 8,859,353 5,908,768 - - 5,908,768 8,859,353 Utility plant and systems - - - - - Furniture and equipment 1,398,959 1,642,039 - - 1,642,039 1,398,959 Infrastructure 6,957,205 7,314,102 12,911,994 12,928,609 20,242,711 19,869,199 • • r • Total $21,300,220 $ 19,908,158 $ 16,143,151 $ 15,133,961 $35,042,119 $37,443,371 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.10% from prior year.Additional information on the City's long-term debt can be found on Note 9 of this report. Outstanding Debt Governmental Business-type Activities Activities Total • 2014 r 2013 • 2014 r 2013 r 2014 2,013 Revenue Bonds $ 6,562,000 $ 6,965,000 $ - $ - $ 6,562,000 $ 6,965,000 Capital Leases 317,418 463,695 255,532 320,062 572,950 783,757 Loans 84,000 - 2,428,062 2,621,598 2,512,062 2,621,598 Liability to Suntrust - - 807,177 1,186,398 807,177 1,186,398 Liability to FDOT - - - 10,250 - 10,250 Total $ 6,963,418 $ 7,428,695 $ 3,490,771 $ 4,138,308 $ 10,454,189 $ 11,567,003 12 ECONOMIC FACTORS AND NEXT YEAR'S BUDGET AND RATES During fiscal year 2015,the City will be looking at the following programs/initiatives: • Continue upgrades to bring all of the City's pump stations out of moratorium and other improvements to the utility system that will increase the opportunities for economic development and bring compliance to the City's consent agreement with DERM. • Complete the Capital Improvement Master Plan to present to City voters in a referendum in order to obtain approval for bond funding. • Fully deploy the CRA program, beginning in the Magnolia North community. The CRA will not only bring physical improvements to the City but also economic development and empowerment to the residents. • Expand our online services. • Develop a destination plan to attract more visitors to the City. • Complete the annexing of unincorporated areas adjacent to the City. • Begin Historic City Hall renovations. All of these factors were considered in preparing the City of Opa-locka's budget for the 2015 fiscal year. Requests for Information This financial report is designed to provide a general overview of the City of Opa-locka's finances for all those with an interest in its finances.Questions concerning any of the information provided in this report or requests for additional information should be addressed to The City of Opa-locka,Finance Department, 780 Fisherman Street, 4th Floor,Opa-locka,Florida 33054. 13 BASIC FINANCIAL STATEMENT CITY OF OPA-LOCKA,FLORIDA STATEMENT OF NET POSITION SEPTEMBER 30,2014 Governmental Proprietary ASSETS Activities Activities Total Cash and equity in pooled cash $ 578,686 $ 3,540,909 $ 4,119,595 Receivables,net 514,534 1,713,360 2,227,894 Internal balances 2,017,999 (2,017,999) - Due from other Governments 1,296,473 6,995 1,303,468 Inventories 23,195 (2) 23,193 Other assets 144,444 190,996 335,440 Restricted cash and cash equivalents 311,665 1,718,773 2,030,438 Capital assets,not being depreciated 4,090,598 3,231,158 7,321,756 Capital assets,being depreciated net 17,215,816 12,194,502 29,410,318 Total assets 26,193,410 20,578,692 46,772,102 LIABILITIES Accounts payable and accrued liabilities $ 1,211,351 $ 1,545,128 $ 2,756,479 Overdrawn cash - 3,956,545 3,956,545 Due to other governments 479,895 567,889 1,047,784 Customers'deposits - 1,824,322 1,824,322 Noncurrent liabilities: Due within one year Compensated absences 57,200 - 57,200 Long term debt 551,557 1,074,144 1,625,701 Due in more than one year Compensated absences 1,276,094 168,234 1,444,328 OPEB obligation 330,000 45,000 375,000 Contingency 300,000 - 300,000 Long-term debt 6,411,861 2,417,023 8,828,884 Total liabilities 10,617,958 11,598,285 22,216,243 NET POSITION Invested in capital assets, net of related debt 14,594,553 11,934,493 26,529,046 Restricted for: Debt service 1,142,661 - 1,142,661 Unrestricted (161,762) (2,954,086) (3,115,848) Total net position $ 15,575,452 $ 8,980,407 $ 24,555,859 14 0 0 / F c3 E\ ER r, N tO, 00 O, N ■0 h h O ,0 00 O pQ cQt 0000 N N V 00 b N --+ S O ON 00 0000 0000 N ,0 N- 00 ON M L, O ' O N SO 0� N V1 .N-- N h 00 DD 7 V1 C N h ' O M N 00 ,40 Phi d' O N N N &r1 .'� C tD 00 v d' �--; [P N N 00 V1 M N N V1 v N N N N a F `. � . 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P.- e v H a f °-' 0 0 Wo F 15 CITY OF OPA-LOCKA,FLORIDA BALANCE SHEET GOVERNMENTAL FUNDS SEPTEMBER 30,2014 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 $ 3,450,072 $ 716,750 $ 1 $ 67,216 $ 288,384 $ 4,522,423 Receivables,net 421,453 - 93,081 - - 514,534 Other Gov't account receivables 878,239 - - 412,783 5,451 1,296,473 Due from other funds - 395,537 1,087,887 2,895,537 370,504 4,749,465 Inventories 23,195 - - - - 23,195 Prepaid items 144,444 - - - - 144,444 Restricted cash and cash equivalents 244,448 - - - - 244,448 Total assets $ 5,161,851 $ 1,112,287 $ 1,180,969 $ 3,375,536 $ 664,339 $ 11,494,982 LIABILITIES AND FUND BALANCES Liabilities: Accounts payable and accrued liabilities $ 1,032,041 $ 57,344 $ 38,308 $ 80,912 $ 2,746 $ 1,211,351 Overdrawn cash - - - 3,876,969 - 3,876,969 Due to other funds 1,578,561 - - - 1,152,454 2,731,015 Other Gov't account payables 458,958 - - - 20,937 479,895 Deferred revenues - - - - - - Total liabilities 3,069,560 57,344 38,308 3,957,881 1,176,137 8,299,230 Fund Balance Nonspendable: Inventories 23,195 - - - - 23,195 Prepaid items 144,444 - - - - 144,444 Restricted for: Debt Service - - 1,142,661 - - 1,142,661 Committed for: Public Safety - - - 222,494 222,494 Transportation - 1,054,943 - - - 1,054,943 Unassigned: Capital projects funds - .. - - - General Fund 1,924,652 - - (582,345) (734,292) 608,015 Total fund balances 2,092,291 1,054,943 1,142,661 (582,345) (511,798) 3,195,752 Total liabilities and fund balances $ 5,161,851 $ 1,112,287 $ 1,180,969 $ 3,375,536 $ 664,339 $ 11,494,982 16 CITY OF OPA-LOCKA,FLORIDA RECONCILIATION OF THE BALANCE SHEET-GOVERNMENTAL FUNDS TO THE STATEMENT OF NET POSITION SEPTEMBER 30, 2014 Fund balances - total governmental funds $ 3,195,752 Amounts reported for governmental activities in the statement of net assets are different because: Capital assets used in governmental activities are not financial resources and,therefore,are not reported in the governmental funds. Capital Assets Net of Accum. Depreciation 21,306,413 Debt (6,963,419) Compensated absences (1,333,294) Other post employment benefits (330,000) Accrued legal settlement (300,000) Net adjustment 12,379,700 Net position of governmental activities $ 15,575,452 17 CITY OF OPA-LOCKA,FLORIDA STATEMENT OF REVENUES,EXPENDITURES AND CHANGES IN FUND BALANCES GOVERNMENTAL FUNDS FOR THE YEAR ENDED SEPTEMBER 30,2014 Peoples' Capital Safe Other Nonmajor Total Transportation Improvement Neighborhood Governmental Governmental General Tax Debt Service Capital Projects Funds Funds REVENUES: Taxes: Property taxes $ 6,359,842 $ - $ - $ - $ - $ 6,359,842 Utility taxes 1,186,277 - - - - 1,186,277 Communications service taxes 469,614 - - - - 469,614 Local option,use and fuel taxes 279,767 - - - - 279,767 Local business taxes 247,810 - - - - 247,810 Franchise fees 1,377,856 - - - - 1,377,856 Permits and fees 590,480 - - - - 590,480 Intergovernmental 413,104 572,297 1,656,055 1,588,390 98,782 4,328,628 Charges for Services 112,013 - - - - 112,013 Fines and Forfeitures 413,678 - - - 4,000 417,678 Interest 314 - - 84 - 398 Other 1,577,530 - - - - 1,577,530 Total Revenues 13,028,285 572,297 1,656,055 1,588,474 102,782 16,947,893 EXPENDITURES: Current: General government 5,531,282 - - - 139,576 5,670,858 Public Safety 6,753,392 - - - 43,037 6,796,429 Transportation 2,293,973 393,268 - - - 2,687,241 Culture and recreation 1,204,208 - - - - 1,204,208 Debt service: Principal 243,842 - 403,000 - 646,842 Interest 18,651 - 261,086 - - 279,737 Capital outlay 298,481 463,514 - 1,625,132 26,324 2,413,451 Total expenditures 16,343,829 856,782 664,086 1,625,132 208,937 19,698,766 Excess(deficiency)of revenues over expenditures (3,315,544) (284,485) 991,969 (36,658) (106,155) (2,750,873) OTHER FINANCING SOURCES(USES): Debt Proceeds - - 84,000 - - 84,000 Transfers in 4,182,275 - - - 142,820 4,325,095 Transfers out - - (1,057,169) - - (1,057,169) Total other financing sources(uses) 4,182,275 - (973,169) - 142,820 3,351,926 Net change in fund balances 866,731 (284,485) 18,800 (36,658) 36,665 601,053 Fund balances,beginning 1,225,560 1,339,427 1,123,862 (545,688) (548,463) 2,594,698 Adjusted beginning balance 1,225,560 1,339,427 1,123,862 (545,688) (548,463) 2,594,698 Fund balances,ending $ 2,092,291 1,054,943 1,142,661 (582,345) (511,798) 3,195,752 18 CITY OF OPA-LOCKA,FLORIDA RECONCILIATION OF THE BALANCE SHEET TO THE STATEMENT OF NET POSIT YON GOVERNMENTAL FUNDS SEPTEMBER 30,2014 Net change in fund balances -total governmental funds $ 601,053 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 of those assets is depreciated over their estimated useful lives. Expenditures for capital outlays 2,926,215 Less current depreciation (700,213) The effect of other transaction involving capital assets: Capital lease proceeds - The issuance of long-term debt provides current financial resources to governmental funds, while the repayment of the principal of long-term debt of governmental funds. Neither transaction, however, has any effect on net assets. Also, governmental funds report the effect of issuance costs,premiums,discounts, and similar items when debt is first issued, whereas these amounts are deferred and amortized in the statement activities. This amount is the net effect of these differences in the treatment of long-term debt and related items. Principal payments of debt 193,536 Principal payments of capital leases 64,530 Some items reported in the statement of activities do not require the use of current financial resources and,therefore, are not reported in the governmental funds. These activities consist of: Contingent liability-legal settlement (300,000) Change in other post employment benefits (330,000) Change in compensated absences (219,273) Change in net position of governmental activities $ 2,235,848 19 CITY OF OPA-LOCKA,FLORIDA STATEMENT OF NET POSITION PROPRIETARY FUNDS SEPTEMBER 30,2014 Business-type Activities-Enterprise Funds Other Nonmajor Water and Enterprise Sewer Funds Total ASSETS Current assets: Cash and equity in pooled cash $ 2,886,680 $ 654,229 $ 3,540,909 Receivables, net 1,718,773 - 1,718,773 Estimated unbilled services - (5,413) (5,413) Due from other governments 6,995 - 6,995 Other Assets 187,802 3,194 190,996 - Inventories Due from other funds - 3,252,592 3,252,592 Total current assets 4,800,250 3,904,602 8,704,852 Noncurrent assets: Restricted cash and cash equivalents 1,718,773 - 1,718,773 Non depreciable capital assets 3,231,158 - 3,231,158 Capital assets,net 12,050,715 143,787 12,194,502 Total noncurrent assets 17,000,646 143,787 17,144,433 Total assets $ 21,800,896 $ 4,048,389 $ 25,849,285 LIABILITIES Current liabilities: Accounts payable and accrued liabilities 1,266,801 278,327 1,545,128 Overdrawn cash - 3,956,545 3,956,545 Due to other funds 5,090,268 180,325 5,270,593 Due to other governments 567,889 - 567,889 Deposits 1,710,921 113,401 1,824,322. Current portion of long term debt 1,031,250 42,894 1,074,144 Total current liabilities 9,667,129 4,571,492 14,238,621 Noncurrent liabilities: Compensated absences 155,371 12,863 168,234 OPEB 41,250 3,750 45,000 Long term debt 2,306,345 110,678 2,417,023 Total noncurrent liabilities 2,502,966 127,291 2,630,257 Total liabilities 12,170,095 4,698,783 16,868,878 NET POSITION Invested in capital assets,net of related debt 11,944,278 (9,785) 11,934,493 Unrestricted (2,313,477) (640,609) (2,954,086) Total net position $ 9,630,801 $ (650,394) $ 8,980,407 20 CITY OF OPA-LOCKA,FLORIDA STATEMENT OF NET POSITION PROPRIETARY FUNDS SEPTEMBER 30,2014 Business-type Activities-Enterprise Funds Other Nonmajor Water and Enterprise Sewer Funds Total ASSETS Current assets: Cash and equity in pooled cash $ 2,886,680 $ 654,229 $ 3,540,909 Receivables,net 1,718,773 - 1,718,773 Estimated unbilled services - (5,413) (5,413) Due from other governments 6,995 - 6,995 Other Assets 187,802 3,194 190,996 Inventories - - Due from other funds - 3,252,592 3,252,592 Total current assets 4,800,250 3,904,602 8,704,852 Noncurrent assets: Restricted cash and cash equivalents 1,718,773 - 1,718,773 Non depreciable capital assets 3,231,158 - 3,231,158 Capital assets, net 12,050,715 143,787 12,194,502 Total noncurrent assets 17,000,646 143,787 17,144,433 Total assets $ 21,800,896 $ 4,048,389 $ 25,849,285 LIABILITIES Current liabilities: Accounts payable and accrued liabilities 1,266,801 278,327 1,545,128 Overdrawn cash - 3,956,545 3,956,545 Due to other funds 5,090,268 180,325 5,270,593 Due to other governments 567,889 - 567,889 Deposits 1,710,921 113,401 1,824,322 Current portion of long term debt 1,031,250 42,894 1,074,144 Total current liabilities 9,667,129 4,571,492 14,238,621 Noncurrent liabilities: Compensated absences 155,371 12,863 168,234 OPEB 41,250 3,750 45,000 Long term debt 2,306,345 110,678 2,417,023 Total noncurrent liabilities 2,502,966 127,291 2,630,257 Total liabilities 12,170,095 4,698,783 16,868,878 NET POSITION Invested in capital assets,net of related debt 11,944,278 (9,785) 11,934,493 Unrestricted (2,313,477) (640,609) (2,954,086) Total net position $ 9,630,801 $ (650,394) $ 8,980,407 21 CITY OF OPA-LOCKA,FLORIDA STATEMENT OF CASH FLOWS PROPRIETARY FUNDS FOR THE YEAR ENEDED SEPTEMBER 30,2014 Business-Type Activities-Enterprise Funds Other Nonmajor Water and Enterprise Sewer Funds Total Cash flows from operating activities: Cash received from customers $ 7,967,760 $ 1,418,686 $ 9,386,446 Cash paid to vendors (5,029,629) (467,014) (5,496,643) Cash paid to employees (1,760,762) (69,873) (1,830,635) Internal activity payments from(to)other funds,net 1,296,078 (934,242) 361,836 Net cash provided by operating activities 2,473,447 (52,443) 2,421,004 Cash flows from noncapital financing activities: Transfers to other funds (3,267,927) (3,267,927) Net cash used in noncapital financing activities (3,267,927) - (3,267,927) Cash flows from capital and related financing activities: Acquisition and construction of capital assets (2,692,934) (155,655) (2,848,589) Interest paid on long term debt (83,275) Proceeds from debt 576,543 - 576,543 Principal paid on debt (1,188,915) 6,726 (1,182,189) Net cash used in capital and related financing activities (3,388,581) (148,929) (3,454,235) Cash flows from investing activities: Interest income (18,284) - (18,284) Net cash provided by investing activities (18,284) - (18,284) Net increase(decrease)in cash (4,201,345) (201,372) (4,402,717) Cash,beginning 9,699,071 859,892 10,558,963 Cash,ending 5,497,726 658,520 6,156,246 Display as: Unrestricted 2,886,680 654,229 3,540,909 Restricted 1,718,773 - 1,718,773 Total 4,605,453 654,229 5,259,682 Reconciliation of operating income to cash provided by operating activities: Operating income(loss) (1,031,367) (408,627) (1,439,994) Adjustment to reconciled operating income to net cash provided by(used in)operating activities: Depreciation expenses 634,042 81,524 715,566 (Increase)decrease in: Cash drawn in excess of bank - 1,174,750 1,174,750 Accounts Receivable (1,718,773) 12,811 (1,705,962) Due from other Governments (6,995) - (6,995) Due from other funds - (1,009,593) (1,009,593) Other current assets (276,222) - (276,222) Increase(decrease)in: Accounts Payable and accrued liabilities 1,219,080 25,495 1,244,575 Customer deposits 1,697,818 - 1,697,818 Other liabilities 18,613 (4,154) 14,459 Bad debt others 73,284 Due to other funds 1,296,078 75,351 1,371,429 Due to other governments 567,889 - 567,889 Net Cash Provided by Operating Activities $ 2,473,447 $ (52,443) $ 2,347,720 21 2 cr . 1 •N hi'' �f • • .,..._ , .... . „ ..,.. , . .... ° 7}` � � .V -. °yam :,,_,...4,4_127F-r.%t ., � .•:a.r. M 2 +-:.. 'ty�j*�7 \ \' y `ti + �^-; y .'•If C � r s { y1. ",?it� / -',1.` '�--- --- .'4-1a t' 1- .N \ ,S 0. ",+/,4,}1 o a 'lot": u. S `.. Y NOTES TO BASIC FINANCIAL STATEMENTS . , CITY OF OPA-LOCKA,FLORIDA Notes to Basic Financial Statements Fiscal Year Ended September 30, 2014 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 with GASB Statement No. 14, The Financial Reporting Entity, as amended by GASB Statement No. 39, which establishes standards for defining and reporting on the financial reporting entity. The financial reporting entity consists of the City, organizations for which the City is financially accountable and other organizations for which the nature and significance of their relationship with the City are such that exclusion would cause the reporting entity's financial statements to be misleading or incomplete. The City is financially accountable for a component unit if it appoints a voting majority of the organization's governing board and it is able to impose its will on that organization or there is potential for the organization to provide specific financial benefits to, or impose specific financial burdens, on the City. Based on these criteria, entities were evaluated for inclusion in the City's reporting entity with the following results: The City passed ordinances in prior 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 assets 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. 24 • CITY OF OPA-LOCKA,FLORIDA Notes to Basic Financial Statements Fiscal Year Ended September 30, 2014 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 fmancial statements. All remaining governmental funds are aggregated and reported as non- major funds. C.Measurement Focus,Basis of Accounting,and Financial Statement Presentation The government-wide financial statements are reported using the economic resources measurement focus and the accrual basis of accounting, as are the proprietary fund statements. Revenues are recorded when earned and expenses are recorded when a liability is incurred, regardless of the timing of related cash flows. Property taxes are recognized as revenues in the year for which they are levied. Grants and similar items are recognized as revenue as soon as all eligibility requirements imposed by the provider have been met. Governmental fund financial statements are reported using the current financial resources measurement focus and the modified accrual basis of accounting. Revenues are recognized as soon as they are both measurable and available. Revenues are considered to be available when they are collectible within the current period or soon enough thereafter to pay liabilities of the current period. For this purpose,the City considers revenues to be available if they are collected within sixty(60) days of the end of the current fiscal period,with the exception of expenditure driven(reimbursements)grants, for which the 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. 25 1 . CITY OF OPA-LOCKA,FLORIDA Notes to Basic Financial Statements Fiscal Year Ended September 30, 2014 NOTE 1.SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES(Continued) C.Measurement Focus,Basis of Accounting,and Financial Statement Presentation(Continued) 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. 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 the operation and maintenance of the City's water and sewer system. As a general rule the effect of inter-fund activity has been eliminated from the government-wide financial statements. Exceptions to this general rule are payments and other charges between the City's water and sewer function and various other functions of the government. Elimination of these charges would distort the direct costs and program revenues reported for the various functions concerned. Proprietary funds distinguish operating revenues and expenses from non-operating items. Operating revenues and expenses generally result from providing services and producing and delivering goods in connection with a proprietary fund's principal ongoing operations. The principal operating revenues of the City's water and sewer, solid waste and stormwater enterprise funds, are charges to customers for sales and services. Operating expenses for enterprise funds include the cost of sales and services, administrative expenses, and depreciation on capital assets. All revenues and expenses not meeting 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. 26 CITY OF OPA-LOCKA,FLORIDA Notes to Basic Financial Statements Fiscal Year Ended September 30, 2014 NOTE 1.SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES(Continued) D.Assets,Liabilities,and Net Assets or Fund Equity 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 proprietary fund types fund, all highly liquid investments (including restricted assets) with maturity of three months or less when purchased are considered to be cash equivalents. Investments, consisting of U.S. Government securities, and certificates of deposit with financial institutions,are stated at cost plus accrued interest. 3. Receivables In the government-wide statements, receivables consist of all revenues earned at year-end and not yet received. The City calculates its allowance for uncollectible using historical collection data, specific account analysis, and management's judgment. Major receivables balances for the governmental activities include franchise fees and utility taxes,and amounts due from other governments.Business-type activities 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. The costs of Governmental Fund type inventories are recorded as expenditures when consumed rather than when purchased. 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. 27 CITY OF OPA-LOCKA,FLORIDA Notes to Basic Financial Statements Fiscal Year Ended September 30, 2014 NOTE 1.SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES(Continued) D.Assets,Liabilities,and Net Assets or Fund Equity Cont'd 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 capitalized as projects are constructed. Interest incurred during the construction phase of capital assets of business-type activities is included as part of the capitalized value of the assets constructed. Buildings, improvements, infrastructure and equipment assets are depreciated using the straight-line method over the following estimated useful lives: Assets Years Buildings and Building Improvements 10-50 Infrastructure Systems 30 Equipment 3-10 Vehicles 3-10 7. Inter-fund Transactions Activities between funds that are representative of lending/borrowing 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 fmancial 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. 28 CITY OF OPA-LOCKA,FLORIDA Notes to Basic Financial Statements Fiscal Year Ended September 30,2014 NOTE 1.SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES(Continued) D. Assets,Liabilities,and Net Assets or Fund Equity Cont'd 7. Inter-fund Transactions(Continued) 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 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. S. 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 accumulate, with certain limits, earned but unused vacation time and sick leave hours for subsequent use or for payment upon termination, death or retirement. For government-wide statements and proprietary fund types, these accumulations are recorded as expenses and liabilities of the appropriate fund in the fiscal year earned. For governmental fund types, the amount of accumulated unpaid vacation and sick leave that is payable from available resources is recorded as a liability of the respective fund only if they have matured, for example,as a result of employee retirements and resignations. 10.Net Position and Fund Balance Net position in the government-wide and proprietary funds is categorized as net investment in capital assets; restricted or unrestricted. Net investment in capital assets is the difference between the cost of capital assets,less accumulated depreciation,reduced by the outstanding balances of any borrowings used for the acquisition,construction or improvement of those assets plus unspent bond proceeds. Restricted balances consists of net position with constraints placed on their use by external parties (creditors, grantors, contributors, laws or regulations of other governments) or imposed by law through constitutional provisions or enabling legislation. Unrestricted balances indicate the 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. 29 CITY OF OPA-LOCKA,FLORIDA Notes to Basic Financial Statements Fiscal Year Ended September 30, 2014 NOTE 1.SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES(Continued) 10.Net Position and Fund Balance(Continued) 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 constraints placed on the use of resources by(a) creditors, grantors, contributors, 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 compensation plan (the "Plan") created in accordance with Internal Revenue Code Section 457. The Plan, available to all City employees, allows them to defer a portion of their salary to future years. The City's direct involvement in the Plan is limited to remitting the amounts withheld from employees to the Plan's administrator. The deferred compensation plan is not included in the City's financial statements. NOTE 2. DEFICIT FUND EQUITY The City reported fund balance deficit of($343,872),($419,509),($151,738),and($99,580),for the Opa- locka Police Youth Academy, Crime Prevention, STOPNAWA,and CRA funds. 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. 30 CITY OF OPA-LOCKA,FLORIDA Notes to Basic Financial Statements Fiscal Year Ended September 30, 2014 NOTE 3. PROPERTY TAXES(Continued) The gross taxable value of property,as established by the Miami-Dade County Property Appraiser,at July 1,2013 upon which the 2013-2014 levy, was approximately$5.8 million. For the year ended September 30, 2014, the millage rate to finance general government services was 9.0890 ($9.0890 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. No accrual for the property tax levy becoming due in November 2014 is included in the accompanying financial statements since the legal right to receive these taxes occurs on November 1, 2014, and such taxes are collected to finance expenditures of the fiscal year ending September 30,2014. NOTE 4. DEPOSITS AND INVESTMENTS As of September 30,2014 the City's cash are considered to be cash on hand,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 be made at qualified public depositories. The Act requires each qualified public depository to deposit with the State Treasurer eligible collateral equal to or in excess of the required collateral as determined by the provisions of the Act. In the event of a failure by a qualified public depository,losses,in excess of federal depository insurance and proceeds from the sale of the securities pledged by the defaulting depository, are assessed against the other qualified public depositories of the same type as the depository in default. Investments The City is authorized to make direct investments in U.S. government, federal agency, and instrumentality obligations at a price not to exceed the market price at the time of purchase. In addition, the City may invest in certificates of financial institutions insured by the United States government or agencies thereof and repurchase agreements. As of September 30,2014 the City has no investments. 31 CITY OF OPA-LOCKA,FLORIDA Notes to Basic Financial Statements Fiscal Year Ended September 30, 2014 NOTE 5. DISAGGREGATION OF RECEIVABLES AND ACCOUNTS PAYABLE BALANCES Receivable balances as of September 30,2014,were as follows: Due from Allowance for Governmental activities: Accounts Taxes Other Agencies Others uncollectbles Net General $ 295,319 $ 102,902 $ 1,234,093 $ 23,234 $ - $ 1,655,548 Safe neighborhood - - - - - - Nonmajor funds 93.081 - 5.452 - - 98.533 Total governmental activities $ 388.400 $ -_-LQ2,902 $ 1239.545 $ _ A234 -- $ 1.7501 Business-type activities: Water and sewer $ 2219,851 $ - $ - $ 219,675 $ (168,956) $ 2,270,570 Stormwater - - - - - - Soliddwaste 3.080 - - - (15.717) (12.637) Total business-type activities $ 2.222.931 $ - $ - $ 219.675 $ (184.673) $ 2.257.933 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 reimbursable expenditures occur, (2) transactions are recorded in the accounting system and (3) payments between funds are made. Interfund balances as of September 30,2014 consisted of the following: Due From Other Due to Other Funds Funds Major governmental fund: General fund $ 12,560,930 $ 14,139,940 Safe Neighborhood capital projects 3,994,946 1,507,270 Nonmajor governmental funds 5,870,084 4,846,000 Major enterprise fund: Water and sewer 2,767,530 6,815,690 Nonmajor enterprise funds 2,913,468 798,506 Total $ 28,106,958 $ 28,107,406 32 CITY OF OPA-LOCKA,FLORIDA Notes to Basic Financial Statements Fiscal Year Ended September 30, 2014 Interfund transfers for the year ended September 30,2014, consisted of the following: Transfers In Transfers Out General Fund 4,182,275.00 - CIP Debt Service Fund - (1,057,169.00) Crime Prevention Fund - - CRA 142,820.00 - Water and Sewer Fund - (3,267,927.00) Total 4,325,095.00 (4,325,096.00) Transfers were used to cover excess expenditures that occurred in the general fund. 33 CITY OF OPA-LOCKA,FLORIDA Notes to Basic Financial Statements Fiscal Year Ended September 30, 2014 NOTE 7. CAPITAL ASSETS The following is a summary of changes in capital assets for the year ended September 30,2014: 09/30/13 Increases Decreases 09/30/14 Governmental Activities: Capital assets not being depreciated: Land $ 3,042,475 $ 3,042,475 Construction in progress 2,000,774 869,484 (1,828,030) $ 1,042,228 Total assets not being depreciated 5,043,249 869,484 (1,828,030) $ 4,084,703 Capital assets being depreciated: Buildings and improvements 8,675,049 3,015,213 $ 11,690,262 Furniture and equipment 5,032,787 35,609 $ 5,068,396 Infrastructure 21,708,698 $ 21,708,698 Total assets being depreciated 35,416,534 3,050,822 - $ 38,467,356 Less accumulated depreciation: Buildings and improvements (2,766,281) (64,627) $ (2,830,908) Furniture and equipment (3,390,748) (278,690) $ (3,669,438) Infrastructure (14,394,597) (356,897) $ (14,751,494) Total accumulated depreciation (20,551,625) (700,213) • $ (21,251,838) Total capital assets being depreciated,net 14,864,909 2,350,609 - 17,215,518 Governmental activities capital assets,net $ 19,908,157 $ 3,220,093 $ (1,828,030) $ 21,300,221 Business-type Activities: Capital assets not being depreciated: Land $ 14,762 $ 14,762 Construction in progess 2,190,590 1,598,673 (572,868) $ 3,216,395 Total assets not being depreciated 2,205,352 1,598,673 (572,868) $ 3,231,157 Capital assets being depreciated: Buildings and improvements - $ - Furniture and equipment 4,083,160 163,402 $ 4,246,562 Infrastructure 21,125,459 572,868 $ 21,698,327 Total assets being depreciated 25,208,619 736,270 - $ 25,944,889 Less accumulated depreciation: Buildings and improvements - $ - Furniture and equipment (4,837,970) (126,083) (4,964,053) Infrastructure (8,196,850) (589,483) (8,786,333) Total accumulated depreciation (13,034,820) (715,566) - $ (13,750,386) Total capital assets being depreciated,net 12,173,799 20,704 - 12,194,503 Business-type activities capital assets,net $ 14,379,151 $ 1,619,377 $ (572,868) $ 15,425,660 34 • CITY OF OPA-LOCKA,FLORIDA Notes to Basic Financial Statements Fiscal Year Ended September 30, 2014 NOTE 7. CAPITAL ASSETS Continued Depreciation expense was charged to functions/programs of the city as follows: Govermental activities: General government 214,361.85 Public safety 142,106.39 Transportation 338,822.45 Parks and recreation 4,922.20 Total 700,212.90 Busniess-type activities: Water and sewer 634,041.76 Stormwater 81,523.87 Total 715,565.63 NOTE 8. LEASES Operating Leases The City leases building and office facilities under non-cancelable operating leases. Total costs for such leases were$529,275.96 for the year ended September 30,2014. The future minimum lease payments for the leases are as follows: Year Ending Governmental Business-Type September 30 Activities Activities Total 2015 $ 250,203.96 $ 36,000.00 $ 286,203.96 2016 81,024.00 - 81,024.00 2017 81,024.00 - 81,024.00 2018 81,024.00 - 81,024.00 r 2019 - - Total 493,275.96 36,000.00 $ 529,275.96 35 CITY OF OPA-LOCKA,FLORIDA NOTES TO BASIC FINANCIAL STATEMENTS SEPTEMBER 30,2014 NOTE 8. LEASES cont'd 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: Governmental Activities: Governmental Business-type Year Ending September 30, Activities Activities Total 2015 150,325 77,958 228,283 2016 117,293 77,958 195,251 2017 60,182 77,958 138,140 2018 12,382 39,971 52,353 2019 0 0 - Total minimum lease payments $ 340,182 $ 273,845 $ 027 Less:amount representing interest (19,671) (18,311) (37,982) Present value of minimum lease payments $ 359,853 $ 292,156 $652,009.00 36 CITY OF OPA-LOCKA,FLORIDA NOTES TO BASIC FINANCIAL STATEMENTS SEPTEMBER 30,2014 NOTE 9. LONG-TERM DEBT Long-term liability activity for the year ended September 30,2014 was as follows: Balance Balance Due in 9/30/2013 Additions Reductions 9/30/2014 One year Governmental activites Capital improvement Revenue Bond, Series 2011 6,965,000 - (403,000) 6,562,000 416,000 City National Bank, City Hall Construction Loan - 84,000 - 84,000 Other liabilities: Capital leases obligation 467,115 - (149,697) 317,418 135,557 7,432,115 84,000 (552,697) 6,963,418 551,557 Compensated absences 1,271,344 177,120 (115,169) 1,333,295 333,324 OPEB Obligation 162,963 167,037 - 330,000 - Total 8,866,422 428,157 (667,866) 8,626,712 884,881 (112,059) Business-type activities: State Re olving Loan CS12080003P 873,254 - (80,621) 792,633 83,082 State Rewlving Loan WW800050 1,748,344 - (112,915) 1,635,429 114,649 Total loans payable 2,621,598 - (193,536) 2,428,062 197,731 Other Debt: Capital lease obligation 320,062 - (64,530) 255,532 69,237 Suntrust Capital Lease Obiligation 1,186,058 - (378,881) 807,177 395,121 Liability to FDOT 10,550 - (10,550) - - 4,138,268 - (647,497) 3,490,771 662,089 Compensated absences 171,921 11,555 (15,242) 168,234 57,200 OPEB Obligation 22,037 22,963 - 45,000 - Total 4,332,226 34,518 (662,739) 3,704,005 719,288 37 CITY OF OPA-LOCKA,FLORIDA NOTES TO BASIC FINANCIAL STATEMENTS SEPTEMBER 30,2014 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 (a) 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 $403,000 in 2014 to $670,000 through 2026. (b) Series 2014 Capital Improvement Revenue Note - qualified tax exempt loan — for $8,500,000, bearing interest at a rate of 3.12%,with a maturity date of June 1,2024,and are payable by a lien on Pledge Revenues as defined by the terms of the Series 2014 Note agreement. 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. CS12080003P as amended- for$1.827 million, bearing interest at a rate of 2.56% and 1.54%, due in 40 semi-annual payments of$53,240, including interest, from June 15, 2003 through December 15, 2022, secured by a lien on Pledge Revenues as defined by the State Revolving Fund loan agreement. b) State Revolving Loan Note Project No. WW800050-for$2.375 million,bearing interest at a rate of 1.53%, due in 40 semi-annual payments of$71,143, including interest, secured by a lien on Pledge Revenues as defined by the State Revolving Fund loan agreement. c) Settlement with the Florida Department of Transportation (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. d) 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. 38 CITY OF OPA-LOCKA,FLORIDA NOTES TO BASIC FINANCIAL STATEMENTS SEPTEMBER 30,2014 NOTE 9. LONG-TERM DEBT(Continued) e) Various Capital 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. Principal and interest payments due monthly in the amounts of approximately $4,001 and$3,119 through May and February 2018,respectively. f) State Revolving Loan Note Project No. WW130300—for$512,806, bearing interest at a rate of 1.63%, due in 40 semi-annual payments of$15,644, including interest, secured by a lien on Pledge Revenues as defined by the State Revolving Fund loan agreement. g) State Revolving Loan Note Project No. SW130320—for $197,035, bearing interest at a rate of 1.63%,due in 40 semi-annual payments of$6,011, including interest,secured by a lien on Pledge Revenues as defined by the State Revolving Fund loan agreement. h) State Revolving Loan Note Project No. DW130330 —for$240,000, bearing interest at a rate of 2.53%,due in 40 semi-annual payments of$6,011,including interest,secured by a lien on Pledge Revenues as defined by the State Revolving Fund loan agreement. Annual debt service requirements to maturity for debt outstanding, other than the capital leases, are as follows: Fiscal Year Governmental Activities Business-type Activities ending September 30, Principal Interest Principal Interest 2015 416,000 222,854 592,852 75,847 2016 430,000 208,621 614,085 54,614 2017 445,000 193,890 206,430 39,290 2018 510,000 177,679 210,939 34,781 2019 527,000 159,957 215,559 30,161 2020-2024 2,919,000 512,054 989,010 79,870 Thereafter 1,315,000 51,640 1,213,938 49,741 $6,562,000 $1,526,695 $4,042,813 $364,303 Summary of Debt Covenants Series 2011A and Series 2011B Capital Improvement Revenue Bonds—Debt service is provided by a pledge of guaranteed state revenue sharing funds, local option gas tax revenues, and the half-cent sales tax. Reserves must be maintained equal to the maximum bond service requirement. At September 30, 2014 the City had on deposit with the trustee for these bonds, a reserve account insurance policy which unconditionally and irrevocably guarantees the full and complete payment required to be made by or on the behalf of the City. 39 CITY OF OPA-LOCKA,FLORIDA NOTES TO BASIC FINANCIAL STATEMENTS SEPTEMBER 30,2014 NOTE 9. LONG-TERM DEBT(Continued) On June 3, 2014 - as authorized by City Ordinance No. 13-40 - the City entered into an agreement with City National Bank of Florida for the issuance of the Series 2014 Capital Improvement Revenue Note for the purpose of acquiring, construction, installation and equipping an administration building. Debt service is provided by a pledge of guaranteed state communications services tax revenues, public service tax revenues and all investment income except for Rebate fund. Pledge Revenues - the City's agreement under the State of Florida Revolving Loan Fund Program requires the City to generate Pledged 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, 2014 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, 2013 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 30,2014. 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 2011A and Series 2011B Capital Improvement Revenue Bonds. NOTE 10. DEFINED BENEFIT PENSION PLAN Florida Retirement Systems Plans - The City participates in the State of Florida Retirement System (the "System"), a cost-sharing multiple-employer defined benefit plan or 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"). 40 CITY OF OPA-LOCKA,FLORIDA NOTES TO BASIC FINANCIAL STATEMENTS SEPTEMBER 30,2014 NOTE 10. DEFINED BENEFIT PENSION PLAN(Continued) Effective July 1, 2011, employees participating in either the Investment Plan or the Pension Plan are required to make contributions to establish service credit for work performed in a regularly established position. The uniform rates for Fiscal year 2012-2013 as it applies to the City are as follows: Employer Total Employee Contribution Contribution Class Contribution Rate Rate* Rate Regular 3.00% 4.91% 7.91% Special Risk(Police) 3.00% 14.10% 17.10% City, Elected Officers 3.00% 11.14% 14.14% Senior Management (SMSC) 3.00% 6.27% 9.27% *These rates include the 1.11 percent contribution for the Retiree Health Insurance Subsidy, the fee of 0.03 percent for administration of the Florida Retirement System Investment Plan and provision of educational tools for both plans, and any applicable unfunded actuarial liability rates. Source: Florida Retirement System Employer Handbook, July 2011 General Reporting of Wages and Retirement Contributions,page 2- 17 Eligible members enrolled in 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 benefits computed on the basis of age, average final compensation and service credit. Prior to July 1, 2011, benefits under the Pension Plan are vested after six years of service. Enrollment on or after July 1, 2011 are vested after eight years of creditable service. Employees who retire at or after age 62, with ten years of credited service, are entitled to an annual retirement benefit, payable monthly for life. A post- retirement health insurance subsidy is also provided to eligible retired employees through the FRS defined benefits retirement plan. Summary ofFlorida Retirement System Contributions,Covered Payroll and Percentage of Covered Payroll 2014 2013 2012 Covered payroll $ 7,959,304 $7,739,705 $8,628,421 Contributions 1,082,447 871,084 1,064,057 %of Covered Payroll 13.60% 11.25% 13.00% 41 , CITY OF OPA-LOCKA,FLORIDA NOTES TO BASIC FINANCIAL STATEMENTS SEPTEMBER 30,2014 NOTE 10. DEFINED BENEFIT PENSION PLAN(Continued) The City is required to contribute amounts necessary to pay benefits when due as defined by State Statute. Such contribution requirements ranged between 12% and 22% of gross salaries during fiscal year 2012. For the fiscal years ended September 30, 2012 2011, and 2010 the City contributed 100% of the required contributions. 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. 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 CONTINGENCIES Water Supply and Sewer Services Contract In February 1985, the City entered into an agreement with Miami-Dade Water and Sewer Authority (the "Authority") for the purpose of providing to the City all of its potable water supply and sewer services for a period of thirty (30) years subject to termination at any time by operation of law or by mutual consent of the City and the Authority. For the year ended September 30, 2014 and 2013, the City purchased water and sewer services totaling $3,036,697 and$4,461,438 respectively, from the Authority under the terms of this agreement. 42 CITY OF OPA-LOCKA,FLORIDA NOTES TO BASIC FINANCIAL STATEMENTS SEPTEMBER 30,2014 NOTE 12. COMMITMENTS AND CONTINGENCIES cont'd Solid Waste Collection and Disposal Contract Cont'd. On November 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 30, 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. Contingencies The City participates in a number of Federal and State grant programs. These programs are subject to financial and compliance audits by the grantors or their representatives. The possible disallowance of any item charged to the program or request for the return of already collected funds may be disallowed by the grantor agency. Any potential disallowed amounts cannot be determined at this time. No provision for any liability that may result has been made in the financial statements. The City expects such amounts, if any,to be immaterial. Various other claims and lawsuits, which arose in the normal course of operations, are pending against the City. In the opinion of management, based on the advice of the City's Attorney, the outcome of these actions is not anticipated to have a material effect on the financial position and results of operations of the City. NOTE 13. OTHER POST-EMPLOYMENT BENEFITS Pursuant to Section 112.081, 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 provide retirees with any subsidy for this benefit. The City elected to establish an irrevocable other post-employment benefit ("OPEB") trust and began funding the obligation during fiscal year 2009, leaving no unfunded obligation. Plan Description: On September 17, 2008, the City established the OPEB Trust, a single employer defined benefit health care plan to all of its employees except for part-time employees and full-time employees who either resign or are terminated. The City is authorized to establish and amend benefit levels, subject to minimum requirements set forth by Florida Statutes, and to approve the actuarial assumptions used in the determination of contribution levels. The plan does not issue a separate financial report. 43 • CITY OF OPA-LOCKA,FLORIDA NOTES TO BASIC FINANCIAL STATEMENTS SEPTEMBER 30,2014 NOTE 13. OTHER POST-EMPLOYMENT BENEFITS(continued) 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 2014. 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. 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 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 for financial reporting purposes are based on the substantive plan (the plan as understood by the City and plan members) and include the types of benefits in force at the valuation date and the historical pattern of sharing benefit costs between the City and the plan members to that point. Actuarial calculations reflect a long-term perspective and employ methods and assumptions that are designed to reduce short-term volatility in actuarial accrued liabilities and the actuarial value of assets. Significant methods and assumptions were as follows: Actuarial valuation date April 1,2014 Actuarial cost method Projected unit credit Amortization method Level-dollar payment Remaining amortization period 15-year,open period;level-dollar payment Investment Return 4.00%per annum (includes 2.75%inflation) Healthcare cost trend rate(s) Insurance Premiums Select rates 8.50%for 2014/15 graded to 5.50%for 2020/21 Ultimate rate 5.00%per annum 44 CITY OF OPA-LOCKA,FLORIDA NOTES TO BASIC FINANCIAL STATEMENTS SEPTEMBER 30,2014 NOTE 13. OTHER POST-EMPLOYMENT BENEFITS cont'd 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-adjusted 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. Annual OPEB Cost and Net OPEB Obligation The annual other post-employment benefit (OPEB) cost is calculated based on the annual required contribution ("ARC") 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 Member N/A Annual Required Contribution(ARC) $ 219,000 Interest on net OPEB Obligation 7,000 Adjustments to the ARC (16,000) Annual OPEB cost $ 210,000 Interest on Employer Contributions - Employer Contributions * (20,000) Increase in net OPEB obligation(asset) $ 190,000 Net OPEB obligation(asset)-beginning of year 185,000 Net OPEB obligation(asset)-end of year $ 375,000 The $20,000 represents an actuarial estimate only and does not represent a physical contribution. Trend information gives an indication of the progress made in accumulating sufficient assets to pay benefits when due. Two year information (three year is not available) for fiscal years ended September 30, is presented as follows: 45 CITY OF OPA-LOCKA,FLORIDA NOTES TO BASIC FINANCIAL STATEMENTS SEPTEMBER 30,2014 NOTE 13. OTHER POST-EMPLOYMENT BENEFITS(Continued) Fiscal Year Percentage of Annual Ended OPEB Cost Net OPEB Obligation September 30, Annual OPEB Cost Contributed (Asset) 2013 $ 205,000 10% $ 185,000 2014 $ 210,000 10% $ 375,000 Funded Status and Funding Progress: The schedule of funding progress, presented as RSI following the notes to the financial statements, presents multiyear trend information about whether the actuarial value of plan assets are increasing or decreasing over time relative to the actuarial accrued liability for benefits. An analysis of funding progress (the last plan year valuation date)is as follows: UAAL Actuarial as a Actuarial Accrued Unfunded Percentag Actuarial Value Liability AAL Funded Covered of Valuation of Assets (AAL) (UAAL) Ratio Payroll Payroll Date (a) (b) (b)-(a) (a)/(b) (c) ((b-a)/c) 1-Apr-14 $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. 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 30,2014. 46 CITY OF OPA-LOCKA,FLORIDA NOTES TO BASIC FINANCIAL STATEMENTS SEPTEMBER 30,2014 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. REQUIRED SUPPLEMENTARY INFORMATION Under GASB Statement No. 34, budgetary comparison information is required to be presented for the general fund and each major special revenue fund with a legally adopted budget. The City adopts annual operating budgets for the general fund and all special revenue funds. Budget and actual comparison for the General Fund is presented in the Required Supplementary Information section of the report. Budget and actual comparisons for other funds are reflected in the Combining Statements section. NOTE 17. PRIOR PERIOD ADJUSTMENT There were no material prior period adjustments. NOTE 18. PRONOUNCEMENTS ISSUED,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. GASB Statement 68, Accounting and Financial Reporting for Pensions an amendment of GASB Statement No. 27 was issued June 2012. The primary objective of this Statement is to improve accounting and financial reporting by state and local governments for pensions. It also improves information provided by state and local governmental employers about financial support for pensions that is provided by other entities. This Statement results from a comprehensive review of the effectiveness of existing standards of accounting and financial reporting for pensions with regard to providing decision-useful information, supporting assessments of accountability and interperiod equity, 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 47 CITY OF OPA-LOCKA,FLORIDA NOTES TO BASIC FINANCIAL STATEMENTS SEPTEMBER 30,2014 criteria. The provisions of this Statement will be effective for the City beginning with its year ending September 30,2015. NOTE 18. PRONOUNCEMENTS ISSUED,NOT YET EFFECTIVE(Continued) 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. 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 non-employer 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 be effective for the fiscal year ending September 30,2015. The City's management has not yet determined the effect these Statements will have on the City's financial statements. NOTE 19. SUBSEQUENT EVENTS The City by way of Ordinance 15-07 authorized the issuance of$8,600,000 Series 2015 Note which is composed of Series 2015A Capital Improvement Revenue and Refunding Note and Series 2015B Capital Improvement Revenue Note-for the purpose of acquiring, installation and equipping the City's administration building(City Hall). Debt service is provided by a pledge of guaranteed state communications services tax revenues, public service tax revenues and all investment income except for Rebate fund. Series 2014 Capital Improvement Revenue Note was refunded and the agreement satisfied. Series 2015 took effect May 30,2015. NOTE 20. MANAGEMENT'S REVIEW In preparing these financial statements, the Organization has evaluated events and transactions for potential recognition or disclosure through June 30, 2015, the date the financial statements were available to be issued. There were no other significant events that management believed require disclosure. 48 REQUIRED SUPPLEMENTAL INFORMATION CITY OF OPA-LOCKA,FLORIDA BUDGETARY COMPARISON SCHEDULE GENERAL FUND FOR THE YEAR ENDED SEPTEMBER 30,2014 Variance With Final Budget Budgeted Amounts Positive Revenues: Original Final Actual (Negative) Taxes: Property taxes $ 5,696,300 $ 5,696,300 $ 6,359,842 $ 663,542 Utility taxes 1,021,900 1,021,900 1,186,277 164,377 Communications service taxes 502,790 502,790 469,614 (33,176) Local option gas tax 271,205 271,205 279,767 8,562 Local business taxes 216,315 216,315 247,810 31,495 Franchise fees 1,526,790 1,526,790 1,377,856 (148,934) Permits and fees 664,625 664,625 590,480 (74,145) Intergovernmental 705,534 705,534 413,104 (292,430) Charges for services 165,300 165,300 112,013 (53,287) Fines and forfeitures 953,500 953,500 413,678 (539,822) Interest 8,000 8,000 314 (7,686) Other 151,800 151,800 1,577,530 _ 1,425,730 Total revenues 11,884,059 11,884,059 13,028,285 1,144,226 Expenditures: General government: City commission 167,920 167,920 171,106 3,186 City manager 1,284,495 1,284,495 880,095 (404,400) City clerk 434,315 434,315 400,609 (33,706) City attorney 690,035 690,035 603,316 (86,719) Finance/Utility billing 527,055 527,055 660,401 133,346 Information technology 277,655 277,655 304,100 26,445 Human resources 325,625 325,625 397,004 71,379 Building licenses 430,020 430,020 307,620 (122,400) Community development 582,985 582,985 505,607 _ (77,378) Total general government 4,720,105 4,720,105 4,229,858 (490,247) Public safety: Police 5,230,155 5,230,155 6,274,593 1,044,438 Code enforcement 261,895 261,895 351,485 89,590 Total public safety 5,492,050 5,492,050 6,626,078 1,134,028 Public works: Administration 282,995 282,995 514,847 231,852 Street maintenance 570,135 570,135 620,921 50,786 Building maintenance 204,745 204,745 331,440 126,695 Vehicle maintenance 693,340 693,340 968,010 274,670 Total public works 1,751,215 1,751,215 2,435,218 684,003 Parks and recreation: Parks 956,420 956,420 1,095,728 139,308 Special events 30,000 30,000 108,480 78,480 49 Total parks and recreation 986,420 986,420 1,204,208 217,788 Non-departmental 933,884 933,884 1,359,427 _ 425,543 Total non-departmental 933,884 933,884 1,359,427 425,543 Total expenditures 13,883,674 13,883,674 15,854,789 1,971,115 Excess of revenues over expenditures (1,999,615) (1,999,615) (2,826,504) (826,889) Other financing sources(uses): Loan/Capital lease proceeds - - - - Transfers in 1,999,615 1,999,615 4,182,275 2,182,660 Transfers out - - - - Net change in fund balance - - 1,355,771 Fund balance,beginning 1,225,310 Fund balance,ending $ 2,581,081 50 CITY OF OPA-LOCKA,FLORIDA BUDGETARY COMPARISON SCHEDULE PEOPLE TRANSPORTATION TAX FUND FOR THE YEAR ENDED SEPTEMBER 30,2014 Variance with Final Budget Budgeted Amounts Positive Revenues: Original Final Actual (Negative) Taxes: Intergovernmental 420,000 420,000 572,297 152,297 Total revenues 420,000 420,000 572,297 152,298 Expenditures: Current: General government: Public works: Administration - - - - Street maintenance 725,000 725,000 856,782 (131,782) Building maintenance - - - Vehicle maintenance - - - - Total public works 725,000 725,000 856,782 (131,782) Total expenditures 725,000 725,000 856,782 (131,782) Excess of revenues over expenditures (305,000) (305,000) (284,485) 20,515 Other financing sources(uses): Capital lease proceeds - -. - _ Transfers in 305,000 305,000 - (305,000) Transfers out - - - - Net change in fund balance - - (284,485) Fund balance,beginning 1,339,427 Fund balance,ending $ 1,054,942 Checking: 51 CITY OF OPA-LOCKA, FLORIDA BUDGETARY COMPARISON SCHEDULE CAPITAL IMPROVEMENT DEBT SERVICE FOR THE YEAR ENDED SEPTEMBER 30,2014 Variance With Final Budget Budgeted Amounts Positive Revenues: Original Final Actual (Negative) Intergovernmental 1,563,030 1,563,030 1,656,055 $ 93,025 - Interest - - - Total revenues 1,563,030 1,563,030 1,656,055 93,025 Expenditures: Capital outlay - _ - - Debt service Principal 403,000 403,000 403,000 - Interest 236,625 236,625 261,086 24,461 Other debt service costs 1,345 1,345 - (1,345) Bond issuance costs - - - Total expenditures 640,970 640,970 664,086 23,116 Excess of revenues over expenditures 922,060 922,060 991,969 69,909 Other financing sources(uses): Debt proceeds - - 84,000 84.000 - Transfers in - - - Transfers out (922,060) (922,060) (1,057,169) (135,109) Net change in fund balance - - 18,800 18,800 Fund balance, beginning - _ Fund balance, ending $ 18,800 $ 18.800 52 CITY OF OPA-LOCKA Notes to the budgetary comparison schedules For the Year Ended September 30, 2014 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 through passage of an ordinance. 4. Budgetary control is maintained at the departmental and fund level, with 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 functions; however, any supplemental appropriations or revisions that amend the total expenditure of any fund must be approved by the City Commission. The City also maintains an encumbrance accounting system as one technique of accomplishing budgetary control. Encumbrances outstanding at the balance sheet date are canceled. 5. Annual operating budgets are legally adopted for the General, Special Revenue, Debt Service, Capital Projects, and Enterprise Funds. All budgets are on a basis consistent with accounting principles generally accepted in the United States of America. The legal level of budgetary control is the department level.This is the level at 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 30,2014 expenditures exceeded appropriations in the finance/UB,public safety, public works, parks and recreation, and non-departments of the general fund by $133,346, $1,134,028, $684,003, $217,788, and $425544. Interfund transfer exceeded the budget by $2,182,660. Overall, General Fund exceeded its budget by approximately$2.0 million. For the year ended September 30, 2014 expenditures exceeded appropriations in the People Transportation Tax fund by approximately$132,000.The over expenditures were funded by available fund balance. 53 SUPPLEMENTAL INFORMATION .4. --- O en ‘o d' r-- N. 4 0r0 .n O N N O b N M i` .7 H N rN'1 ,n N N N \O O` 'PO N N ° 69 69 69 y3 1- M O C ON co 00 O CO 00 00 4) N T as a, O 4) Ucc ¢ 69 69 69 69 5 c G In to en to h ,3 3 E , , i , , en , N� I I I , , en ' , en en w W 69 691 69 b) G. s, , , N , N N N_ N y , , p p , , 1 , 1 , O , O O M M C3 N N N N N 69 613 69 69 00 00 00 000 en F. a' O h ,r'1 Yl V1 en > a..., .-. .... .... 6A K I 69 64I 4) Q O O , , O IN GL f4 GL a > O �O N NN Oi CT O ,n GL W f"' O 69 69 bq U Z N 4 M ,� 7 T d• V, N N pNp�� 0 a �" O }' y , , , p, 00 I 0000 I 0�p^ co p O� • d W y 'C In 00 M M M M 00 pry W m O.•V V -d- M M 0. z O W O d ¢ 69 69 V3 0 r a 69 Z cg Oat4 Q © rnl en o � , o 00 O 1L h N N ,en In N U U Z °' O `�' 69, 69 69 I Z S.O s ro a Oi rn M ' M I I Cot M M M rs-T ^ 1^ .--� .-. - 0 Qa 69 6A 69 4, 5 00 in en 1 en en en h , .-. 3 N M , t 00 N , , , I I N. , , N N O. 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CO N \D 00 a N O■ M 4O 0. 4O N N �.6 op .-: o CT, O en N 0 0 7 en .- N i V1 69 0 00 �' 7 O O s.o Co i U , , i , , , , h i i , , , , \D N N ONO I CO N h .M-■ U 04 Q `., - ,-. dN' ^ `v o ON M 6 W _ e° v en vi en U 3 y 1 , 1 1 , , , , , 1 1 , , , , , , , , 1 , N Z o < ,-a '4 t "' d w ds co Ca N N nr Z , i , , , , I , , , , , , , , , , , , , , _O E. e �V Z I N N M fiel 00 /�WC., 2 Z a ' G , , , 1 , , , , , , , 1 , , , , I I I , , 0 o a I7 = ch N f�i. vni vvli 69 aAZ � vii = 4 g --.., ...] 1111111 11111 1111 I C):1 In O F W ca O ¢ o o z en ^ 0: 111110 0, 1 ,1. 111 ON TT 0 VI Q,• wOZ v 0 n M ° en > .. en °°en Tr O u' � W a` 44 '4 f.. W OG Q 0 L4 9.' 1e e^ ^ v, '^c v 1.11 oSo Z A 0 b •ei en 040E a " v es Th en M O z p O ° ¢ '4 O. F ' Z a W 0 , , , , , , , � , , 0 0' XM � � , , , , , en en W > N. F-. m 4 EA—I en y G 0, , , , O , , , M en i . 'O NO ..o- . ■ , N Z y A V N ' '0 vi O 0 O N _ 7 :c T O N M N N O' �' (. d9 6A 7 O U o d r U L U C. ti > C 1.. a 7 OA A G O C 0 y y v, >-. N e = 'O QO C 60 7 Go ' o' Z> o c• _• .e e .' a..Y C a s a�i u v, e L 0 2 2 a • U V O a U O U 4 > u F- H o -Q a ii C u o Yt p k L asn O y 6 a A F W �- W O �- Z 55 CITY OF OPA-LOCKA,FLORIDA • COMBINING STATEMENT OF NET POSITION NONMAJOR PROPRIETARY FUNDS SEPTEMBER 30,2014 ASSETS Stormwater Solid Waste Total Current assets: Cash and equity in pooled cash $ 654,229 $ - $ 654,229 Estimated unbilled services (5,413) - (5,413) Prepaids and other 3,194 - 3,194 Due from other funds - 3,252,592 3,252,592 Total current assets 652,010 3,252,592 3,904,602 Noncurrent assets: Capital assets,net 143,787 - 143,787 Total noncurrent assets 143,787 - 143,787 Total assets $ 795,797 $3,252,592 $4,048,389 LIABILITIES Current liabilities: Accounts payable and accrued liabilities $ 245,420 $ 32,907 $ 278,327 Overdrawn cash - 3,956,545 3,956,545 Due to other funds 180,325 - 180,325 Customers'deposits 1 113,400 113,401 Current portion of long term debt 42,894 - 42,894 Total current liabilities 468,640 4,102,852 4,571,492 Long term debt Compensated absences 12,863 - 12,863 OPEB Obligation 3,750 - 3,750 Notes and capital leases payable 110,678 - 110,678 Total long term debt 127,291 - 127,291 Total liabilities 595,931 4,102,852 4,698,783 NET POSITION Invested in capital assets,net of related debt 143,787 - 143,787 Unrestricted 56,079 (850,260) (794,181) Total net position $ 199,866 $ (850,260) $ (650,394) 56 CITY OF OPA-LOCKA, FLORIDA COMBINING STATEMENT OF REVENUES,EXPENDITURES AND CHANGES IN NET POSITION NONMAJOR PROPRIETARY FUNDS FOR THE YEAR ENDED SEPTEMBER 30, 2014 Stormwater Solid Waste Total Operating revenues: Charges for services $ 268,001 $ 1,137,874 $ 1,405,875 Total operating revenues 268,001 1,137,874 1,405,875 Operating expenses: Operating,administrative and maintenance 606,892 1,225,943 1,832,835 Interest and other debt costs 13,543 - 13,543 Bad debts and Other (113,400) (113,400) Depreciation 81,524 - 81,524 Total operating expenses 701,959 1,112,543 1,814,502 Change in net position (433,958) 25,331 (408,627) Net position,beginning Prior period adjustment - - Net position,beginning 633,824 (875,591) (241,767) Net position,ending $ 199,866 $ (850,260) $ (650,394) 57 CITY OF OPA-LOCKA,FLORIDA COMBINING STATEMENT OF CASH FLOWS NONMAJOR PROPRIETARY FUNDS SEPTEMBER 30,2014 Stormwater Solid Waste Total Cash flows from operating activities: Cash received from customers $ 280,812 $ 1,137,874 $ 1,418,686 Cash paid to vendors (459,976) (7,038) (467,014) Cash paid to employees (62,030) (7,843) (69,873) Payments from(to)other funds,net 75,351 (1,009,593) (934,242) Net cash provided by operating activities (165,843) 113,400 (52,443) Cash flows from capital and related financing activities: Acquisition on construction of capital assets (28,949) (126,706) (155,655) Proceeds from compensated absenses and OPEB - 13,306 13,306 Proceeds from debt - - - Payments made on debt 6,726 - 6,726 Net cash used in capital and related financing activities (22,223) (113,400) (135,623) Net decrease in cash (188,066) - (188,066) Cash,beginning 859,892 - 859,892 Cash,ending 671,826 - 671,826 Display as: Unrestricted 654,229 - 654,229 Restricted - - - Total $ 654,229 $ - $ 654,229 Reconciliation of operating income to cash provided by operating activities: Operating(loss) $ (433,958) $ 25,331 $ (408,627) Adjustment to reconciled operating income to net cash provided by(used in)operating activities: Depreciation expenses 81,524 - 81,524 (Increase)decrease in: Cash drawn in excess of bank - 1,174,750 1,174,750 Accounts receivable 12,811 - 12,811 Due from other funds - (1,009,593) (1,009,593) Increase(decrease)in: Accounts payable and accrued liabilities 98,429 (72,934) 25,495 Due to other funds 75,351 - 75,351 Other liabilities - (4,154) (4,154) Net cash provided by operating activities $ (165,843) $ 113,400 $ (52,443) 58 STATISTICAL SECTION CITY OF OPA-LOCKA,FLORIDA NET ASSETS BY COMPONENT LAST EIGHT FISCAL YEARS (accrual basis of accounting) Fiscal Year 2014 2013 2012 2011 2010 2009 2008 2007 (Restated) Governmental activities Invested in capital assets,net of related debt $ 14,594,553 $ 12,730,145 $ 9,735,712 $ 8,402,867 $ 6,412,870 8 5,647,558 $ 5,509,644 $ 1,856,232 Restricted 1,142,662 2,878,649 3,524,297 2,651,381 3,028,572 1,455,562 1,618,813 1,648,369 Unrestricted (161,763) (2,269,190) (1,293,239) (1,536,472) 1,427,083 3,735,623 3,337,336 5,451,619 Total govememntal activities net assets $ 15,575,452 $ 13,339,604 $ 11,966,770 $ 9,517,776 $ 10,868,525 $ 10,838,743 $ 10,465,793 $ 8,956,220 Business-type activities Invested in capital assets,net of related debt $ 11,934,493 $ 10,240,844 $ 8,256,492 $ 6,733,269 $ 5;719,464 $ 5,422,334 $ 5,098,389 $ 6,559,594 Restricted - - 411,671 411,671 397,355 396,472 393,842 1,344,966 Unrestricted (1,835,446) 3,644,159 7,391,926 6,729,636 6,279,180 5,835,374 5,499,567 1,958,057 Total business-type activities net assets $ 10,099,047 $ 13,885,003 $ 16,060,089 $ 13,874,576 $ 12,395,999 $ 11,654,180 $ 10,991,798 $ 9,862,617 Primary government Invested in capital assets,net of related debt $ 26,529,046 $ 22,970,989 $ 17,992,204 $ 15,136,136 $ 12,132,334 $ 11,069,892 $ 10,608,033 $ 8,415,826 Restricted 1,142,662 2,878,649 3,935,968 3,063,052 3,425,927 1,852,034 2,012,655 2,993,335 Unrestricted (1,997,209) 1,374,969 6,098,687 5,193,164 7,706,263 9,570,997 8,836,903 7,409,676 Total primary government net assets $ 25,674,499 $ 27,224,607 $ 28,026,859 $ 23,392,352 $ 23,264,524 $ 22,492,923 $ 21,457,591 $ 18,818,837 Note: The City began to report accrual information when it implemented GASB Statement 34 in fiscal year 2001 59 • CITY OF OPA-LOCKA,FLORIDA CHANGES IN NET ASSETS LAST EIGHT FISCAL YEARS (accrual basis of accounting) Fiscal Year Expenses 2914 2412 on oil 2412 2442 2446 2441 Governmental activities: (Restated) General government $ 6,254,996 S 7,009,819 $ 5,402,679 $ 5,258,247 $ 4,109,593 $ 4,690,986 S 4,603,861 S 4,221,761 Public safety 7,349,488 6,636,968 5,570,149 5,856,372 6,708,963 5,565,672 6,062,394 5,746,353 Economic environment _ - - - - - - - Highwaysandstreets 2,901,231 2,567,979 1,744,207 3,000,577 3,045,651 3,084,070 2,664,432 3,079,201 Human services - - - 278,733 260,737 535,075 - - Cultureandrecreation 1,299,002 1,137,575 982,440 1,179,470 1,190,536 939,357 892,599 889,461 Interest on long-teens debt 279,737 432,419 302,948 361,712 377,528 388,244 389,219 408,438 Total governmental activities expenses 18,084,454 17,784,760 14,002,423 15,935,111 . 15,693,008 15,203,404 14,612,505 14,345,214 Business-type activities: Water and sewer 8,838,015 6,442,588 5,954,797 5,446,235 6,244,689 6,460,679 5,342,491 10,699,290 Solid waste 1,225,943 1,214,902 1,145,855 1,203,020 1,070,098 1,047,524 1,207,689 873,783 Stosmwater 701,959 299,209 362,205 291,418 508,494 388,804 534,378 1,716,944 Total Business-type activities expenses 10,765,917 7,956,699 7462,857 6,940,673 7,823,281 7,897,007 7,084,558 13,290,017 Total primary government expenses $ 28,850,371 $ 25 741,459 $ 21 465,280 $ 22,875,784 $ 23,516,289 $ 23,100,411 $ 21 697,063 $ 27,635,231 Program Revenues Governmental activities: Charges for services: General government S 632,500 $ 193,686 S 831,545 $ 333,549 $ 193,686 S 392,263 $ 404,826 S 811,121 Public safety S 472,796 32,937 1,069,226 523,110 192,370 442,823 220,846 Highways and streets - Culture and recreation 35,357 17,822 15,419 14,575 17,822 14,607 12,585 5,858 Operating grants and contributions 409,621 571,048 968,586 780,437 775,112 779,371 435,019 Capital grants and contributions 1,117,060 2,322,929 947,442 1,025,134 1,599,910 717,540 1,599,939 4,691,815 Total governmental activities program revenues 2,667,334 3,138,422 3,832,218 2,676,805 2,778,900 2,346,604 2,673,215 5,508,794 Business-type Activities Charges for services: Water and sewer 8,290,049 8,504,623 9,849,295 7,256,189 7,217,522 7,206,735 6,963,170 5,996,478 Solid waste 1,137,874 975,544 1,260,520 1,142,852 1,014,622 885,964 793,534 729,062 Stormwater 268,001 242,628 259,982 235,423 234,934 283,731 271,277 303,308 Operating grants and contributions Capital grants and contributions 551,963 207,031 - - - - - 4,307,851 Total Business-type activities program revenues 10,247,887 9,929,826 11,369,797 8,634,464 8,467,078 8,376,430 8,027,981 11,336,699 Total primary government program revenues $ 12 915 1 S 13 068 248 $ 15 02 015 S 11 311 269 $ 11 245 978 S 10,723,034 S 10 701,196 $ 16,845,493 continue. 60 CITY OF OPA-LOCKA,FLORIDA CHANGES IN NET ASSETS LAST EIGHT FISCAL YEARS (accrual basis of accounting) (Continued) Fiscal Year 2213 2413 2213 2411 22(4 2942 2948 2992 Net(expense)/revenue Restated Governmental activities $ (15,417,119) $ (14,816,846) $ (14,646,338) $ (10,170,205) $ (13,258,306) $ (12,914,108) $ (12,856,800) $ (9,474,688) Business-type activities (518,029) 1,973,127 9,912,748 1,693,791 1,693,791 643,797 479,423 (1,953,318) Total primary government net expense 5 (15,935,149) $ (12,843,719) $ 1733,590) $ (8,476,414) $ (11,564,515) $ (12,270,311) $ (12,377,377) $ (11,428,006) General Revenues and Other Changes in Net Assets Governmental Activities: Taxes Property taxes $ 6,359,842 $ 5,842,217 $ 6,736,248 $ 6,429,836 $ 7,184,822 $ 7,667,287 $ 7,441,927 $ 7,207,046 Utility taxes 1,186,277 1,040,076 863,608 1,100,645 870,185 741,164 894,359 1,544,532 Communications service taxes(I) 469,614 526,127 559,299 611,700 654,141 717,858 637,712 - Local option gas tax 279,767 274,189 275,054 284,901 261,644 281,095 295,194 -308,170 Franchise fees 1,377,856 1,484,133 1,452,012 1,499,291 1,487,057 1,656,094 1,540,751 1,919,542 Local business taxes 247,810 305,236 206,873 223,949 215,477 229,627 281,975 327,326 Intergovernmental revenue 2,801,946 2,219,388 524,198 1,606,396 1,678,883 1,884,800 2,092,307 1,764,906 Investment earrings 398 84 1,908 8,761 8,345 18,043 131,469 283,431 Miscellaneous 1,577,530 812,977 - 198,704 120,939 156,067 133,169 397,185 Gain on disposal of capital assets - - - - 628 - - - Debt proceeds 84,000 3,685,262 2,000,000 275,000 - (122,285) - Transfer 3,267,927 Total governmental activities 17,652,967 16,189,689 12,619,200 12,239,183 12,482,121 13,229,750 13,448,863 13,752,138 Business Type Activities: Investment earnings - - 1,608 22,501 20,890 42,914 185,758 304,702 Miscellaneous - - 276,966 37,283 78,314 17,760 - - Loss on disposal of capital assets - - - - (1,182) - - - Transfer (3,267,927) (3,685,262) (2,000,000) (275,000) - 122,285 - - Total business-type activities (3,267,927) (3,685,262) (1,721,426) (215,216) 98,022 182,959 185,758 304,702 Total primary government $ 14 385.040 $ 12 504 427 5 10 897 774 $ 12 023 967 $ 12 580 143 $ 13 412 709 $ 13 634 621 $ 14 056 840 Change in Net Assets Governmental activities $ 2,235,848 $ 1,372,834 5 (2,027,138) $ 2,068,978 $ (776,185) $ 315.642 $ 592,063 $ 4,277,450 Business-type activities (3,785,956) (1,712,135) 8,191,322 1,478,575 1,791,813 826,756 665,181 (1,648,616) Total primary government $ (1,550,109) $ (339,301) $ 6,164,184 $ 3,547,553 $ 1,015,628 $ 1.142,398 $ 1,257,244 $ 2,_628,834 Note:The Coy began to report accrual information when it implemented GASB Statement 34 in fiscal year 2003. 61 CITY OF OPA-LOCKA,FLORIDA GOVERNMENTAL ACTIVITIES TAX REVENUES BY SOURCE LAST TEN FISCAL YEARS (accrual basis of accounting) Communications Local Fiscal Service Business Year Property Utility Taxes(1) Sales and Use Tax(2) Franchise Total 2005 4,877,060 1,794,845 - 1,479,783 - 1,313,694 9,465,382 2006 5,802,009 1,224,316 599,654 356,931 200,837 1,941,938 10,125,685 2007 7,207,046 892,002 652,530 308,170 327,326 1,919,542 11,306,616 2008 7,441,927 894,359 637,712 295,194 281,975 1,540,751 11,091,918 2009 7,667,287 741,164 717,858 281,095 229,627 1,656,094 11,293,125 2010 7,184,822 870,185 654,141 261,644 215,477 1,487,057 10,673,326 2011 6,429,836 1,100,645 611,700 284,901 223,949 1,499,291 10,150,322 2012 6,736,248 863,608 559,299 275,054 206,873 1,452,012 10,093,094 2013 5,842,217 1,040,076 526,127 274,189 305,236 1,484,133 9,471,978 2014 1,377,856 469,614 279,767 247,810 2,801,946 1,186,277 6,363,270 (1)Effective Oct.1,2001.Reported as part of Utility taxes from 2002 to 2005. (2)Reported as part of permits,licenses and fees prior to 2006. 62 • CITY OF OPA-LOCKA,FLORIDA FUND BALANCES OF GOVERNMENTAL FUNDS LAST TEN FISCAL YEARS (modified accrual basis of accounting) Fiscal Year 2014 2013 2012 2011, 2010 2009 2008 2007 2006 2005 General Fund Reserved $ - $ - $ - $ 256,751 $ 247,330 $ 340,679 $ 380,380 $ 389,118 $ 386,120 Unreserved - - - 3,316,289 4,414,425 4,908,350 6,772,228 4,653,301 3,884,621 Nonspendable 167,639 56,808 142,100 200,065 - - - - - - Resteicted _ _ _ _ - - - - - Committed - - - - _ - - - - Unassigned 1,924,642 1,168,502 1,091,885 2,048,947 - - - - - - Total General Fund $ 2,092,281 $ 1,225,310 $ 1,233,985 $ 2.249,012 $ 3,573,040 $ 4,661,755 $ 5,249,029 $ 7,152,608 $ 5,042,419 $ 4,270,741 All Other Governmental Funds Reserved $ - $ - I - $ - S 3,028,572 S 2,134,292 $ 1,636,464 $ 1,648,369 $ 340,785 $ - Unreserved,reported in: Special revenue funds - - - - (320,786) (397,395) (289,336) (308,288) (117,431) 935,287 Capital projects fiords - - - - (347,729) (8,841) (664,346) (417,272) 98,078 385,320 Nonspendable - - - - - - - - _ _ Restricted 1,142,662 1,123,862 1,128,608 2,651,381 - - - - - Committed 1,277,436 1,491,775 2,295,494 - - - - - - - Assigned - - _ - - _ - - - - Unassigned (1,316,637) (1,246,499) (897,670) (2,383,253) - - - - - _ Total all other governmental funds $ 1,103,461 $ 1,369,138 5 2,526,432 $ 268,128 $ 2,360,057 $ 1,728,056 $ 682,782 $ 922,809 5 321,432 $ 1,320,607 Note:Fund balances for fiscal year 2011 have been reclassified per G.ASB Statement 54 new fund balance reporting standards.Prior year amounts have not been restated. 63 CITY OF OPA-LOCKA,FLORIDA ASSESSED VALUE OF ALL TAXABLE PROPERTY(1) LAST TEN FISCAL YEARS Centrally Total Gross Total Net Fiscal Real Personal Assessed Assessed Real Estate Assessed Total Direct Year Property Property Property Value Adjustments Value Tax Rate 2005 434,282,541 88,332,831 1,948,311 524,563,683 13,277,720 511,285,963 9.8000 2006 514,575,250 93,121,243 1,363,003 609,059,496 18,622,416 590,437,080 9.8000 2007 668,025,734 102,636,497 1,343,829 772,006,060 25,512,624 746,493,436 9.8000 2008 827,093,363 108,948,153 1,591,662 937,633,178 13,163,594 924,469,584 8.0084 2009 868,952,536 94,569,260 1,604,574 965,126,370 15,691,078 949,435,292 8.2084 2010 838,488,465 92,214,175 1,459,694 932,162,334 18,800,415 913,361,919 8.5467 2011 702,596,703 80,421,361 1,599,166 784,617,230 1,919,397 782,697,833 9.1052 2012 628,398,430 84,895,159 1,384,071 714,677,660 364,113 714,313,547 9.1000 2013 608,102,734 88,324,301 1,403,115 697,830,150 846,258 696,983,892 9.1000 2014 569,275,327 $ 88,907,381 1,527,144 659,709,852 $ 268,158 659,441,694 9.0890 Source: Miami-Dade County Property Appraiser's Office (1) The basis of assessed value is approximately one hundred percent(100%)of actual value. For each fiscal year ended September 30,property is valued as of January 1st of the preceding year. Tax rates are per$1,000 of assessed value. 66 CITY OF OPA-LOCKA,FLORIDA PROPERTY TAX RATES DIRECT AND OVERLAPPING GOVERNMENTS (PER$1,000 OF ASSESSED VALUATION) LAST TEN FISCAL YEARS City of Opa-locka,Florida Overlapping Rates Debt Miami- Fiscal Operating Service Total Dade School Year Millage Millage Millage Coun District State Total 2005 9.8000 - 9.8000 9.325 8.687 0.736 28.548 2006 9.8000 - 9.8000 9.210 8.438 0.736 28.184 2007 9.8000 - 9.8000 9.459 8.105 0.736 28.100 2008 8.0084 - 8.0084 7.920 7.948 0.659 24.535 2009 8.2084 - 8.2084 8.153 7.797 0.659 24.817 2010 8.3000 - 8.3000 8:232 7.995 0.658 25.185 2011 9.1052 - 9.1052 8.232 8.005 0.471 25.813 2012 9.1526 - 9.1526 7.732 8.476 0.500 25.861 2013 9.1000 - 9.1000 8.461 7.624 0.500 25.685 2014 9.0890 - 9.0890 8.206 7.977 0.500 25.772 Source:Miami-Dade County Property Appraiser 67 CITY OF OPA-LOCKA,FLORIDA PROPERTY TAX LEVIES AND COLLECTIONS LAST TEN FISCAL YEARS Ratio of Total Tax Collections Total Current Percent of Delinquent to Total Fiscal Tax Tax Current Tax Tax Total Tax Tax Year Levy Collected Collected Collections Collections Levy 2005 5,140,724 4,680,089 91.04 26,647 4,706,736 91.56 2006 5,968,783 5,802,009 97.21 - 5,802,009 97.21 2007 7,565,659 7,207,046 95.26 - 7,207,046 95.26 2008 7,508,942 7,425,461 98.89 16,466 7,441,927 99.11 2009 8,050,942 7,454,906 92.60 212,380 7,667,286 95.23 2010 7,966,912 7,071,305 88.75 113,517 7,184,822 90.18 2011 7,144,097 6,429,836 90.00 74,349 6,504,185 90.04 2012 6,541,159 6,656,167 100.02 80,081 6,736,248 102.98 2013 6,032,745 5,721,217 95.00 121,000 5,842,217 96.84 2014 5,696,300 6,092,128 107.00 267,714 6,359,842 112.00 Source:Miami Dade County Property Appraiser and internally generated data. 68 t , ■ CITY OF OPA-LOCKA,FLORIDA RATIOS OF OUSTANDING DEBT BY TYPE LAST TEN FISCAL YEARS Governmental Activities Business-type Activities Total Fiscal Revenue Notes Capital Revenue Revolving Notes Capital Primary Per Year Bonds(4) Payable Leases Bonds Loans Payable Leases Government Population(1x3) Camta 2005 6,625,000 203,822 343,578 - 1,042,197 772,650 35,143 9,022,390 14,951 603 2006 6,445,000 15,679 619,110 - 1,574,754 458,892 3,425,681 12,539,116 14,951 839 2007 6,250,000 - 496,145 - 1,805,723 395,596 3,169,436 12,116,900 14,951 810 2008 6,040,000 - 391,951 - 3,645,900 327,026 2,864,166 13,269,043 14,951 888 2009 5,815,000 - 298,517 - 3,423,405 269,185 2,552,129 12,358,236 14,951 827 2010 5,575,000 - 247,227 - 3,231,219 205,710 2,231,801 11,490,957 14,951 769 2011 7,713,000 - 96,679 - 3,016,463 137,140 1,897,743 12,86151125 15,219 845 2012 7,355,000 - 186,458 - 2,796,668 73,845 1,549,367 11,961,338 15,718 761 2013 6,965,000 - 468,191 - 2,621,598 10,550 1,508,192 11,573,531 15,967 725 2014 6,562,000 84,000 317,418 - 2,428,062 - 1,062,709 10,454,189 15,967 655 Note:Details about the City's outstanding debt can be found in Note 8 in the notes to basic financial statements. (1)U.S.Census Bureau,Census 2000.Data for 1999-U.S.Census Bureau,Census 1990. (2)From page 74 Demographic and Economic Statistics for personal income and population data. (3)American Community Survey 2008-2012.(5 year estimate) 69 } M• CITY OF OPA-LOCKA,FLORIDA PLEDGED REVENUE COVERAGE LAST TEN FISCAL YEARS Capital Improvement Revenue Refunding Bonds State Revolving Loan State Shared Water and Revenue/ Coverage Sewer Less: Net Coverage Fiscal 1/2 Cent Debt Service Ratio Gross Operating Available Debt Service Ratio Year Sales Tax Principal Interest Other Cost Percentage Revenue Expenses Revenue Principal Interest Percentage 2005 1,479,783 170,000 429,830 2.47 7,648,557 4,503,524 3,145,033 191,413 25,334 14.51 2006 1,790,593 180,000 418,600 2.99 8,084,583 8,188,860 (104,277) 103,445 35,400 (0.75) 2007 1,582,930 195,000 408,438 2.62 5,996,478 6,094,397 (97,919) 92,149 47,807 (0.70) 2008 1,558,282 210,000 389,219 2.60 6,963,170 4,682,851 2,280,319 211,847 34,519 9.26 2009 1,346,542 225,000 379,042 2.23 7,224,495 5,843,011 1,381,484 222,495 171,588 • 3.50 2010 1,303,988 240,000 362,818 2.16 7,295,836 6,050,962 1,244,874 193,725 92,415 4.35 2011 1,295,853 5,575,000 361,712 45,417 0.22 7,293,472 5,293,421 2,000,051 152,814 - 7.64 2012 1,463,342 358,000 302,948 2.21 10,126,261 5,954,798 4,171,463 - - n/a 2013 1,606,880 390,000 247,780 2.52 8,711,654 6,279,156 2,432,498 161,690 1,742 6.72 2014 1,656,055 403,000 236,626 2.59 8,823,729 8,921,440 (97,711) 193,535 50,967 (0.40) Source: City of Opa-locka Finance Department. 70 CITY OF OPA-LOCKA,FLORIDA DEMOGRAPHIC AND ECONOMIC STATISTICS LAST TEN CALENDAR YEARS (2)(6) Personal Per Income Capita (3)(7) (4) (5) Calendar (1)(6) (thousands Personal Median School Unemployment Year Population of dollars) Income Age Enrollment Rate 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 27.3 385,655 17.5 2009 14,951 19,631 9,538 27.3 385,655 17.5 2010 14,951 19,631 9,538 27.3 341,051 17.5 2011 15,219 19,631 9,538 27.3 368,453 17.5 2012 15,718 20,757 11,375 31.5 349,945 17.5 2013 15,967 20,757 11,375 31.5 352,790 17.5 2014 15,967 20,757 11,375 31.5 355,268 17.5 (1)University of Florida,Bureau of Economic&Business Reasearch (2)U.S.Census Bureau,Census 2000.Data for1999-U.S.Census Bureau,Census 1990. (3)U.S.Census Bureau,Census 2000.Data for1999-U.S.Census Bureau,Census 1990. (4)Source:Miami-Dade County School Board. Data is for Miami-Dade County. (5)U.S.Census Bureau,Census 2000.Data for1999-U.S.Census Bureau,Census 1990. (6)U.S.Census Bureau,Census 2010. (7)American Community Survey 2008-2012.(5 year estimate) 71 000888 CITY OF OPA-LOCKA,FLORIDA PRINCIPAL EMPLOYERS FISCAL YEAR 2013 AND NINE YEARS AGO 2014 2005 Percentage Percentage of Total City of Total City Employer Employees Rank Employment Employees Rank Employment Master North America 200 1 4% N/A N/A N/A City of Opa-locka 191 2 4% N/A N/A N/A Sherwood Food Dist FKA Don Greene Poultry 150 3 3% N/A N/A N/A Republic Metals 140 4 2% N/A N/A N/A Ecological Services 120 5 2% N/A N/A N/A American Fruit 100 6 2% N/A N/A N/A Combined Servies 100 7 2% N/A N/A N/A Atlantic Hosiery 93 8 2% N/A N/A N/A Cigarette Racing 93 9 2% N/A N/A N/A Ter Prints 75 10 2% N/A N/A N/A Ingram Elementary 73 11 1% N/A N/A N/A Total 1,335 25% Source:City Community Development and Planning N/A-Not Available 72 CITY OF OPALOCKA,FLORIDA FULL-TIME EQUIVALENT CITY GOVERNMENT EMPLOYEES BY FUNCTION/PROGRAM LAST TEN FISCAL YEARS Function 2005 2006 2007 2008 2009 2010 2011 2012 2013 2014 Governmental activities: General Government 45 48 56 49 48 49 64 43 39 59 Public Safety 76 80 88 59 65 62 73 68 79 83 Highways&Streets 19 22 27 26 29 29 6 21 29 32 Culture&Recreation 6 14 7 11 11 15 14 12 18 22 Human services(1) 0 0 0 0 8 8 4 4 4 1 Business-type activities: Water&sewer utility 15 15 17 15 15 12 17 21 22 42 Solid waste(2) 0 0 0 0 0 0 0 0 1 1 Stormwater 2 2 2 4 4 4 3 3 3 2 Total 163 181 197 164 180 179 181 172 195 242 Source: City Finance/Payroll/Human Resources Department (1)The City's Opa-locka Youth Academy and Crime Prevention programs are classified under the Human Services function starting in fiscal year 2009. (2)The City's solidwaste services was contracted out starting in 2004. 73 CITY OF OPA-LOCKA,FLORIDA OPERATING INDICATORS BY FUNCTION LAST FOUR FISCAL YEARS Function 2014 2013 2012 2011 Police(1) Physical arrests 1,252 1,332 1,428 1,500 Parking violations 125 139 142 519 Traffic violations 9,025 9,298 9,105 1,400 No.of calls for service 13,485 14,492 14,259 14,109 Solidwaste(2) Street resurfacing(miles) 15 0 0 0 Potholes repaired 172 300 275 400 Parks and recreation(4) Youth athletic program participants 375 350 300 225 Adults athletic program participants 51 52 35 24 Senior's program average monthly participants 73 75 53 49 Special events 12 12 16 16 Water(3) New connections 7 5 4 3 Water main breaks 13 2 3 4 Average daily consumption(millions of gallons) 2.45 2.25 2.5 2.5 Peak daily consumption millions of gallons) 3 3 3 3 (1) Source:City of Opa-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-locka Parks and Recereation Department. 74 CITY OF OPA-LOCKA,FLORIDA CAPITAL ASSETS STATISTICS BY FUNCTION/PROGRAM LAST TEN FISCAL YEARS 2005 2006 2007 2008 2009 2010 2011 2012 2013 2014 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 89 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 363 363 363 363 363 363 363 363 363 500 Daily average consumption in gallons(millions) 3.8 3.8 3.8 3.8 3.8 3.8 3.8 2.45 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 14 Number of service connections 3,675 3,675 3,675 3,675 3,765 3,765 3,675 3,675 3,675 3,675 Culture&Recreation Number of community centers 1 1 1 1 1 1 1 1 1 2 Number of parks 3 3 3 3 3 3 3 3 3 3 Number of libraries(1) 0 0 1 1 1 1 1 1 1 1 Number of tennis courts 1 1 1 1 1 1 1 1 1 2 Source: Various City Departments (1) The City stopped its library services in fiscal year 2003. During the fiscal year 2007 Miami-Dade County opened and operated a library in the City. The City contributes to the library's operating expenses by paying the operating lease of the library location. 75 COMPLIANCE HCT Certified Public Accountants & Consultants, LLC 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, 2014, and the related notes to the financial statements, which collectively comprise the City's basic financial statements and have issued our report thereon dated June 12, 2015. Internal Control Over Financial Reporting In planning and performing our audit of the financial statements, we considered the City's internal control over financial reporting (internal control) to determine the audit procedures that are appropriate in the circumstances for the purpose of expressing our opinions on the financial statements, but not for the purpose of expressing an opinion on the effectiveness of the City's internal control. Accordingly, we do not express an opinion on the effectiveness of the City's internal control. Our consideration of internal control was for the limited purpose described in the preceding paragraph and was not designed to identify all deficiencies in internal control that might be material weaknesses or significant deficiencies and therefore, material weaknesses or significant deficiencies may exist that were not identified. However, as described in the accompanying schedule of findings and questioned 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. 2014-01. 76 West Palm Beach Miami Hollywood Phone(561)655-2664 Phone(305)331-8768 Phone(954)966-4435 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 2014-01. 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 2014-01. 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 scope of our testing of internal control and compliance and the results of that testing, and not to provide an opinion on the effectiveness of the entity's internal control or on compliance. This report is an integral part of an audit performed in accordance with Government Auditing Standards in considering the entity's internal control and compliance. Accordingly, this communication is not suitable for any other purpose. Hollywood, Florida June 12, 2015 77 HCT Certified Public Accountants & Consultants, LLC 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, 2014. 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, contacts, and grants applicable to its federal programs. Auditor's Responsibility Our responsibility is to express an opinion on compliance for each of the City's major federal programs based on our audit of the types of compliance requirements referred to above. We conducted our audit of compliance in accordance with auditing standards generally accepted in the United States of America; the standards applicable to financial audits contained in Government Auditing Standards, issued by the Comptroller General of the United States; and OMB Circular A-133,Audits of States, Local Governments, and Non-Profit Organizations. Those standards and OMB Circular A-133 require that we plan and perform the audit to obtain reasonable assurance about whether noncompliance with the types of compliance requirements referred to above that could have a direct and material effect on a major federal program occurred. An audit includes examining, on a test basis, evidence about the City's compliance with those requirements and performing such other procedures as we considered necessary in the circumstances. We believe that our audit provides a reasonable basis for our opinion 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, 2014. 78 West Palm Beach Miami Hollywood Phone(561)655-2664 Phone(305)331-8768 Phone(954)966-4435 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 2014-02. 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 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, in the normal course of performing their assigned functions, to prevent, or detect and correct, noncompliance with a type of compliance requirement of a federal program on a timely basis. A material weakness in internal control over compliance is a deficiency, or combination of deficiencies, in internal control over compliance, such that there is a reasonable possibility that material noncompliance with a type of compliance requirement of a federal program will not be prevented, or detected and corrected, on a timely basis. A significant deficiency in internal control over compliance is a deficiency, or a combination of deficiencies, in internal control over compliance with a type of compliance requirement of a federal program that is less severe than a material weakness in internal control over compliance, yet important enough to merit attention by those charged with governance. Our consideration of internal control over compliance was for the limited purpose described in the first paragraph of this section and was not designed to identify all deficiencies in internal control over compliance that might be material weaknesses or significant deficiencies. We did not identify any deficiencies in internal control over compliance that we consider to be material weaknesses. However, material weaknesses 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 June 12, 2015 79 CM OF OPA LOCKA,FLORIDA Schedule of Expenditures of Federal Awards For the Year Ended September 30, 2014 CFDA/CSFA Contract or 9/30/2014 Agency/Pass-Through Grantor/Program Title Number Identifying Number Total Award Expenditures U.S.Department of Justice Community Oriented Policing Services(COPS)-Hiring 16.710 2013UMWX0070 250,000.00 66,566.55 Grant US Department of Justice(JAG) 16.595 2011 DJBX2993 36,097.00 36,097.00 16.595 2013DJBX0680 27,704.00 27,704.00 US Department of Justice(JAG) US Department of Justice(JAG) 16.595 2014DJBX0521 32,647.00 32,647.00 U.S.Department of Transportation Job Access&Reverse Commute(JARC)and New 20.516 FL37X06500 169,223.00 74,214.40 Freedom Grant Pass through-South Florida Regional Transportation Authority U.S.Department of Housing and Urban Development Community Challenge Grant 14.704 CCPFL0050-11 624,479.00 138,386.83 Miami Dade County Public Housing and Community 14.218 083111823 2,777,474.93 966,643.79 Development-Non-Housing Community Development Block Grant U.S.Department of Environmental Protection Agency Pass Through: Florida Department of Enviornmental bb.468 1-5984b22-01c 240,000.00 11,700.00 Protection Capitalization Grants for Drinking Water Uw 13033 National Endownment of the Arts Arts Works:Community Planning and Design 45.024 13-4200-7022 30,000.00 7,906.55 TOTAL EXPENDITURES OF FEDERAL $4,b23,39b.93$1,3b1,8bb.12 AWARDS/LOAN BALANCE Florida Department of Environmental Protection Florida Department of Enviornmental Protection Bureau 37.077 SW 13032 197,035.00 28,930.40 of Water Facilities Wastewater Treatment and Stormwater Management Florida Department of Enviornmental Protection Bureau 37.077 WW130300 512,806.00 71,404.15 of Water Facilities Wastewater Treatment and Stormwater Management TOTAL EXPENDITURES OF STATE FINANCIAL $ 7u9,84 i.u0 $ 100,ss4.oa ASSISTANCE Miami Dade County Historic City Hall Restoration Project 293.3-76677 2,000,000.00 402,882.72 TOTAL EXPENDITURES FROM LOCAL AGENCIES $2,000,UUU.OU$4:882./2 GRAND TOTAL $7,233,239.93$1,865,083.39 80 Cf TY OF OPA LOCKA,FLORIDA Notes to the Schedule of Expenditures of Federal Awards For the Year Ended September 30,2014 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, 2014. NOTE 2-SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES Expenditures reported on the Schedule are reported on the accrual basis of accounting. Such expenditures are recognized following the cost principles contained in OMB Circular A-87, Cost principles for State, Local and Indian Tribal Governments wherein certain types of expenditures are not allowable or are limited as to reimbursement. 81 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. There were no 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. There were no 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 major federal award programs are reported in the report on compliance for each major program and on internal control over compliance required by OMB circular a-133. No material weaknesses are reported. 5. The auditor's report on compliance for the major federal award programs for the City of Opa-locka expresses an unmodified opinion on all major federal programs. 6. Audit findings that are required to be reported in accordance with Section 510(a) of OMB Circular A-133 are reported in this Schedule. 7. The programs tested as major programs were: CFDA 16.710 Public Safety Partnership and Community policing Grants CFDA 14.218 Community Development 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. 82 , • CITY OF OPA-LOCKA,FLORIDA CHANGES IN FUND BALANCES OF GOVERNMENTAL FUNDS LAST TEN FISCAL YEARS (modified accrual basis of accounting) Pineal Year Revalues. t1{ 2414 2412 au 202 2.M 2 227 26 20,1 Taxes $ 9,921,166 $ 9,471,978 S 10,093,094 S 10,150322 S 10,673,326 $ 11,293,124 $ 11,091,918 S 11,306,616 $ 9,567,917 $ 6,653,005 Licenses and permits $ 590,480 552,400 624,671 317,689 188,692 378,086 385,123 638,268 813,503 503,181 Fines and forefeitures $ 417,678 311,346 843,115 478,417 178,391 438,123 216,124 27,065 31,584 123,479 Intergovernmental $ 4,328,628 5,113,365 3,390,820 3,411,967 4,053,904 3,381,713 4,127,265 6,456,721 8,457,245 20,284,816 Charges for services $ 112,013 73,937 32,788 75,128 36,795 33,483 37,010 178,711 104,535 41,280 Interest $ 398 84 1,908 8,761 8,345 18,043 131,469 283,431 89,567 47,667 Miscellaneous S 1,577,530 916,818 459,094 198,704 144,982 156,067 133,169 370,120 209,409 2,550,203 Total revalues 16,947,893 16,439,928 15,445,490 14,640,988 15,284,435 15,698,639 16,122,078 19,260,932 19,273,760 30,203,631 Ecpendituren General government $ 5,670,868 6,619,886 5,384,514 5,570,801 4,012,365 4,604,911 4,520,068 3,951,414 3,813,756 6,523,196 Public safety $ • 6,796,429 6,274,637 6,108,005 5,680,424 6,331,246 5,269,093 5,966,913 5,458,602 5,153,511 3,898,324 Highways and streets $ 2,687,241 2,543,862 1,751,208 2,433,842 2,379,870 2,279,406 1,937,045 2,573,422 8,768,977 16,977,785 Culture and recreation $ 1,204,208 1,126,892 1,029,359 1,147,780 1,132,959 900,056 881,189 868,588 758,395 496,612 Human services $ - - - 277,663 263,618 504,425 - - -Capital outlay $ 2,413,451 3,912,455 1,148,728 4,934,410 1,414,042 853,785 4,257,057 3,004,588 513,766 288,043 Debt service:Principal 8 646,842 548,385 358,000 - 440,894 373,168 349,699 416,514 492,762 170,000 Debt Service:Interest I 279,737 265,041 302,948 361,712 377,528 388,244 401,364 408,438 421,563 437,718 Bond issuance cost $ - - - 63,314 - - - -Total expenditures $ 19,698,776 21,291,158 16,082,762 20,469,946 16,352,522 15,173,088 18,313,335 16,681,566 19,922,730 28,791,678 Excess(deficiency)of revenues over expenditures $ (2,750,883) (4,851,230) (637,272) (5,828,958) (1,068,087) 525,551 (2,191,257) 2,579,366 (648,970) 1,411,953 Other Financing Sources(Uses) Issuance of debt $ - - 212,176 7,713,000 - - - - - - Payment to refunded bond escrow $ - - - (5,575,000) - - - _ Capital lease proceeds $ 84,000 - - - 149,604 54,734 47,650 132,200 421,470 16,844 Transfers in $ 4,325,095 4,654,362 2,000,000 1,998,799 699,359 1,140,550 3,280,569 874,259 1,259,709 949,083 Transfers out $ (1,057,169) (969,100) - (1,723,799) (699,359) (1,262,834) (3,280,568) (874,259) (1,259,709) (949,083) Total other financing sources(uses) $ 3,351,926 3,685,262 2,212,176 2,413,000 149,604 (67,550) 47,651 132,200 421,470 16,844 Net change in fund balances $ 601,043 $ (1,165,968) S 1,574,904 5 (3.415,958) I (918,483) $ 458,001 S (2,143,606) S 2,711,566 8 (227,500) 1 428,797 Debt service as a percentage of noncapitat expenditures 5% 5% 4% 5% 5% 5% 6% 64 �% CITY OF OPA-LOCKA,FLORIDA GENERAL GOVERNMENTAL TAX REVENUES BY SOURCE LAST TEN FISCAL YEARS (modified accrual basis) Communications Local Fiscal Service Business Year Property Sales and Use Franchise Utility Taxes(1) Tax(2) Total 2005 4,877,060 1,479,783 1,313,694 1,794,845 - - 9,465,382 2006 5,802,009 356,931 1,941,938 1,224,316 599,654 200,837 10,125,685 2007 7,207,046 308,170 1,919,542 892,002 652,530 327,326 11,306,616 2008 7,441,927 295,194 1,540,751 894,359 637,712 281,975 11,091,918 2009 7,667,287 281,095 1,656,093 741,164 717,858 229,627 11,293,124 2010 7,184,822 261,644 1,487,057 870,185 654,141 215,477 10,673,326 2011 6,429,836 284,901 1,499,291 1,100,645 611,700 223,949 10,150,322 2012 6,736,248 275,054 1,452,012 863,608 559,299 206,873 10,093,094 2013 5,842,217 274,189 1,484,133 1,040,076 526,127 305,236 9,471,978 2014 6,359,842 279,767 1,377,856 1,186,277 469,614 247,810 9,921,166 (1)Effective Oct.1,2001.Reported as part of Utility taxes from 2002 to 2005. (2)Reported as part of permits,licenses and fees prior to 2006. 65 CITY OF OPA-LOCKA,FLORIDA Schedule of Findings and Questioned Costs For the Year Ended September 30, 2013 SECTION II-PRIOR YEAR FINANCIALSTATEMENT FINDINGS 2013-01 Journal Entries and Account Reconciliations (Repeat finding from FY2012) Status—Implemented 2013-02 Utility Billings and Receivables(Repeat finding from FY2012) Status—Implemented 2013-03 Interim Reporting(Repeat finding from FY2012) Status—Implemented 2013-04 Licenses and Permits(Repeat finding from FY2012) Status—Implemented 2013-05 Capital Leases Status—Implemented 2013-06 Accrued Compensated Absences Status—Implemented 2013-07 Budgets Status—Not Implemented 2013-08 Deteriorating Financial Condition Status—Not Implemented 2013-09 Grant File Documentation Status—Implemented 2013-10 Federal Clearing House Submissions and Submission to the Auditor General Status—Not Implemented 2013-11 Statistical Information Status—Not Implemented 83 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 2014-01- Checks outstanding from prior year Condition: Stale checks dating to the prior fiscal year are still being tracked in monthly bank reconciliations Criteria: While performing its monthly bank reconciliations, the City should monitor old outstanding checks as required by the City's policies and procedures Cause: The City did not perform a complete monthly bank reconciliation. Effect: Cash balances are not accurately stated to reflect the true cash balance at the reported date. Recommendation: We recommend the City to research stale checks dating over a year and follow the City's policies and procedures regarding stale checks. Management Response: Management concurs. The value of these checks is about 1% of the total value of checks issued by the City during a fiscal year. Staff will continue to research and address. SECTION IV- FEDERAL AWARD FINDINGS None noted. 84 CITY OF OPA-LOCKA,FLORIDA Schedule of Findings and Questioned Costs For the Year Ended September 30, 2013 SECTION V-OTHER MATTERS 2014-02 Statistical Information (Repeat finding from FY2013) 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 properly updated in the past and is not being monitored by finance staff. Effect: The City is not presenting complete and accurate information to the readers of its CAFR. Recommendation: We recommend that management follow up and update the required information on a monthly basis from the various internal and external sources where possible and to use the GFOA disclosure checklist as a guide line. View of Responsible Officials and Planned Corrective Actions: Management will follow up and update the required information in order to submit the City's Comprehensive Annual Financial report (CAFR) for the Governmental Finance Officers Association (GFOA) Certificate of excellence in financial reporting. 85 HCT Certified Public Accountants & Consultants, LLC • 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, 2014, and have issued our report thereon dated June 12, 2015. 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 Audit of the Financial Statements performed in Accordance with Government Auditing Standards, Independent Auditor's Report on Compliance with Requirements That Could Have a Direct and Material Effect on Each Major Federal Program and State Project (as applicable) and on Internal Control over Compliance in Accordance with OMB Circular A-133 and Chapter 10.550 Rules of the Florida Auditor General; and Schedule of Findings and Questioned Costs. Disclosures in those reports and schedule, which are dated September 30, 2014, should be considered in conjunction with this management letter. Additionally, our audit was conducted in accordance with Chapter 10.550, Rules of the Auditor General, which governs the conduct of local governmental entity audits performed in the State of Florida. This letter includes the following information, which is not included in the aforementioned auditor's reports or schedule: Section 10.554(1)(i)1., Rules of the Auditor General, requires that we determine whether or not corrective actions have been taken to address 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. 86 West Palm Beach Miami Hollywood Phone(561)655-2664 Phone(305)331-8768 Phone(954)966-4435 Tabulation of Uncorrected Audit Findings Current Year 2012-13 FY 2011-12 FY Finding# Finding# Finding# 2014-01 2013-01 2012-04 2013-02 2012-01 (modified) 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 General, requires that we address in the management letter any recommendations to improve financial management. Section 10.554(1)(i)4., Rules of the Auditor General, requires that we address noncompliance with provisions of contracts or grant agreements, or abuse, that have occurred, or are likely to have occurred, that have an effect on the financial statements that is less than material but which warrants the attention of those charged with governance. Section 10.554(1)(i)5., Rules of the Auditor General, requires that the name or official title and legal authority for the primary government and each component unit of the reporting entity be disclosed in this management letter, unless disclosed in the notes to the financial statements. (See Note 1 of the financial statements). Section 10.554(1)(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. 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, 2014, 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. 87 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 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 and other granting agencies and applicable management, and is not intended to be and should not be used by anyone other than these specified parties. We wish to thank the City of Opa-locka,Florida and the personnel associated with it for the opportunity to be of service to them in this engagement as well as engagements in the future and the courtesies extended to us. HCT Certified Public Accountants and Consultants, LLC June 12, 2015 88 HCT Certified Public Accountants & Consultants, LLC INDEPENDENT AUDITORS' REPORT ON COMPLIANCE WITH SECTION 218.415,FLORIDA STATUTES,LOCAL GOVERNMENT INVESTMENT POLICIES 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 year ended September 30, 2014, and have issued our report thereon dated June 12, 2015. Auditor's Responsibility 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; (if applicable) OMB Circular A-133, Audits of States, Local Governments, and Non-Profit Organizations; and Chapter 10.550, Rules of the Florida Auditor General. Other Reports and Schedule We have issued our Independent Auditor's Report on Internal Control over Financial Reporting and Compliance and Other Matters Based on an Audit of the Financial Statements Performed in Accordance with Government Auditing Standards, Independent Auditor's Report on Compliance for Each Major Federal Program and State Project and Report on Internal Control over Compliance; (as applicable) Schedule of Findings and Questioned Costs; the Independent Accountant's Report on an examination conducted in accordance with AICPA Professional Standards, Section 601, regarding compliance requirements in accordance with Chapter 10.550, Rules of the Auditor General and the management letter in accordance with the rules of the Auditor General of the State of Florida. Disclosures in those reports and schedule, which are dated June 12, 2015, should be considered in conjunction with this report. Local Government Investment Policies We have examined the City's compliance with the requirements of Section 218.415, Florida Statutes, Local Government Investment Policies, during the year ended September 30, 2014. Management is responsible for City's compliance with those requirements. Our responsibility is to express an opinion on the City's compliance based on our examination. West Palm Beach Miami Hollywood Phone(561)655-2664 Phone(305)331-8768 Phone(954)966-4435 Our examination was conducted in accordance with attestation standards established by the American Institute of Certified Public Accountants and, accordingly, included examining, on a test basis, evidence about the City's compliance with those requirements and performing such other procedures as we considered necessary in the circumstances. We believe that our examination provides a reasonable basis for our opinion. Our examination does not provide a legal determination on the City's compliance with specified requirements. In our opinion, the City complied, in all material respects, with the aforementioned requirements for the year ended September 30, 2014. This report is intended solely for the information and use of management and the State of Florida Auditor General and is not intended to be and should not be used by anyone other than these specified parties. Hollywood,Florida June 12, 2015 90