FY11/12 Independent AuditU
May 21, 2013
GOLDEN GATE FIRE CONTROL AND RESCUE DISTRICT
14575 Collier Boulevard • Naples, FL 34119 • (239) 348 -7540 • (239) 348 -7546 FAX
http://www.q-fire.com
Clerk of the Circuit Court
Attn: Derek Johnssen
3299 Tamiami Trail East, Suite 401
Naples, Florida 34112
The following reports required under Chapter 189, F.S. are enclosed:
1. Annual Financial Report
2. Financial Statement Packet the includes Management Letter
3. Rebuttal to Management Letter
Our Family Protecting Yours
w
f
1
c3
�r 2 9 2013
c� s°
% CD
�ty
rv)
ZND�)
� �CD
Co Z O
� 3 (D
m m
W 3 c�
�_. io
mU
v (D o
C/) - c
U)
cD
.A
C)
m 0
no
�m D ms
m
1
Cn
Y/
CJi O
o av
CD vz
W mG)
ti
n
c �
CD
v cm
Q m�
•
v �
z m
v N
Z
n
w O
r
�� tl
s �a
f
O `
z >;
m_
m
� s
'TV >
L1
GOLDEN GATE FIRE CONTROL AND RESCUE DISTRICT
FINANCIAL STATEMENTS
SEPTEMBER 30, 2012
I
1
Phillips Harve
y
GROUP
Certified Public Accountants
IGOLDEN GATE FIRE CONTROL AND RESCUE DISTRICT
TABLE OF CONTENTS
ISEPTEMBER 30, 2012
PAGE
IPART I. FINANCIAL SECTION
Independent Auditors' Report 1
Management's Discussion and Analysis (MD&A) 3
Basic Financial Statements:
Government-Wide Financial Statements:
Statement of Net Assets 11
I . Statement of Activities 12
_ Fund Financial Statements:
Balance Sheet - Governmental Funds 13
Statement of Revenues, Expenditures and Changes in
Fund Balances - Governmental Funds 14
I _ Reconciliation of the Statement of Revenues, Expenditures and
Changes in Fund Balances of Governmental Funds to the
= Statement of Activities 15
Notes to the Financial Statements 16
I - PART II. REQUIRED SUPPLEMENTARY INFORMATION OTHER THAN MD&A
I Statement of Revenues, Expenditures and Changes in
Fund Balances - Budget and Actual - Governmental Funds 38
_ PART III. OTHER REPORTS
I — Report on Internal Control Over Financial Reporting and on Compliance
and Other Matters based on an Audit of the Financial Statements Performed
in Accordance with Government Auditing Standards 39
I _ Management Letter Required by Chapter 10.550 of the Rules of the 41
Auditor General of the State of Florida
I _ Management Recommendation Letter 43
Phillips Harvey
GROUP
Nathan A.Phillips,CPA
Deborah L.Harvey,CPA
INDEPENDENT AUDITORS' REPORT Stephanie J.Feldman,CPA
Clara V.Guevara,CPA
Shannon Huber,CPA
January 11, 2013 Michelle L.Vastola,CPA
To The Board of Commissioners
- GOLDEN GATE FIRE CONTROL AND RESCUE DISTRICT
Naples, Florida
We have audited the accompanying financial statements of the governmental activities and each major fund of
GOLDEN GATE FIRE CONTROL AND RESCUE DISTRICT as of and for the year ended September 30, 2012,
which collectively comprise the District's basic financial statements as listed in the table of contents. These
financial statements are the responsibility of GOLDEN GATE FIRE CONTROL AND RESCUE DISTRICT's
management. Our responsibility is to express opinions on these financial statements based on our audit.
We conducted our audit in accordance with auditing standards generally accepted in the United States of
I - America and the standards applicable to financial audits contained in Government Auditing Standards, issued
by the Comptroller General of the United States. Those standards require that we plan and perform the audit
to obtain reasonable assurance about whether the financial statements are free of material misstatement. An
- audit includes examining, on a test basis, evidence supporting the amounts and disclosures in the financial
statements. An audit also includes assessing the accounting principles used and significant estimates made,
as well as evaluating the overall financial statement presentation. We believe that our audit provides a
reasonable basis for our opinions.
In our opinion, the financial statements referred to above present fairly, in all material respects, the respective
financial position of the governmental activities and each major fund of GOLDEN GATE FIRE CONTROL AND
RESCUE DISTRICT as of September 30, 2012 and the respective changes in financial position for the year
then ended in conformity with accounting principles generally accepted in the United States of America.
•
In accordance with Government Auditing Standards, we have also issued our report dated January 11, 2013
on our consideration of the District's internal control over financial reporting and on our tests of its compliance
with certain provisions of laws, regulations, contracts, and grants 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 result of that testing, and not to provide an opinion on the internal control over financial reporting or on
compliance. That report is an integral part of an audit performed in accordance with Government Auditing
Standards and should be considered in assessing the results of our audit.
•
- 1 -
Certified Public Accountants
801 Laurel Oak Drive,Suite 303, Naples, FL 34108
P 239 566 1600 I F 239 566 1901 I swflcpas.com
Board of Commissioners
'GOLDEN GATE FIRE CONTROL AND RESCUE DISTRICT
January 11, 2013
Page 2
- Accounting principles generally accepted in the United States of America require that the management's
discussion and analysis and budgetary comparison information on pages 3 through 10 and 38 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.
/ • gf/ , ").1/
P IL PS ARV
GR• , P.A.
Certified Public Accountants
" Naples, Florida
•
- 2 -
•
GOLDEN GATE FIRE CONTROL AND RESCUE DISTRICT
MANAGEMENT'S DISCUSSION and ANALYSIS
SEPTEMBER 30, 2012
l The Golden Gate Fire Control & Rescue District's discussion and analysis is designed to provide an overview
of the District's financial activities for the fiscal year ended September 30, 2012. In accordance with Florida
IStatutes, the District is required to have an annual audit.
FINANCIAL HIGHLIGHTS
[ • Levied taxes through the TRIM process. The millage rate was set at 1.5 mills.
• The net assets of the District decreased by $(839,684).
f • At the close of the current fiscal year, the District had a fund balance of$3,980,317 in the General
Fund.
• At the close of the current fiscal year, the District had a fund balance of$54,612 in the Special Revenue
[ Fund (Impact Fees).
• At the close of the current fiscal year, the District had debt and other obligations in the amount of
$7,789,546.
OVERVIEW OF THE FINANCIAL STATEMENTS
fGASB Statement 34 represents a monumental change from the manner in which government financial
I statements are recorded and presented. For the first time, it provides a concise "entity-wide" Statement of Net
p p Y
Assets and Statement of Activities to give the user of the financial statements a combined overview of the
District'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.
[ Additionally, this new 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 is an important change in
governmental accounting. For the first time, the impact of long-term financial decisions can be more properly
[ matched to the period in which the expense or revenue is more properly attributed. In short, more fairness in
presentation is achieved and the impacts of long-term decisions are promptly recorded as the transactions
occur, as opposed to the traditional method of recording them when the bill is paid.
I Government-wide Statements: The government-wide financial statements are designed to provide readers
9 9 P
with a broad overview of the District's finances. These statements include all assets and liabilities using the
accrual basis of accounting, which is similar to the accounting used by most private-sector companies. All of
the current year's revenues and expenses are taken into account regardless of when cash is received or paid.
The government-wide financial statements consist of a Statement of Net Assets and a Statement of Activities.
The Statement of Net Assets presents information on all of the District's assets and liabilities, with the
difference between the two reported as net assets. Over time, increases or decreases in net assets may serve
( ' as a useful indicator of whether the financial position of the District is improving or deteriorating.
i ,
i ,
- 3 -
•
GOLDEN GATE FIRE CONTROL AND RESCUE DISTRICT
MANAGEMENT'S DISCUSSION and ANALYSIS
SEPTEMBER 30, 2012
OVERVIEW OF THE FINANCIAL STATEMENTS — Continued
The Statement of Activities presents information showing how the government's net assets changed during the
most recent fiscal year. All changes in net assets are reported when the change occurs, regardless of the
timing of the related cash flows. Thus revenues and expenses are reported in this statement for some items
that will only result in cash flows in future fiscal periods (e.g., uncollected taxes and earned but unused
vacation leave).
These two statements report the Fire District's net assets and changes in them. One can think of the District's
net assets-the difference between assets and liabilities-as one way to measure the District's financial health, or
financial position.
Fund financial statements: A fund is a grouping of related accounts used to maintain control over resources
that have been segregated for specific activities or objectives. The Fire District, like other state and local
governments, uses fund accounting to ensure and demonstrate compliance with finance-related legal
requirements. The District's funds can be divided into two categories: general fund and special revenue fund
(impact fees).
I General Fund is the general operating fund of the District. It is used to account for all financial resources
except those required to be accounted for in another fund.
Special Revenue Fund is used to account for impact fees required to be used for future capital outlays in
response to growth of the community.
Notes to the financial statements: The notes provide additional information essential to a full understanding of
the data provided in the government-wide and fund financial statements. The notes to the financial statements
can be found on pages 16-37 of this report.
O7ther information: In addition to the basic financial statements and accompanying notes, this report also
presents certain required supplementary information. The individual fund statements with budget to actual are
found on page 38 of this report.
GOVERNMENT-WIDE FINANCIAL ANALYSIS
Statement of Net Assets: As noted earlier, net assets may serve over time as a useful indicator of a
government's financial position. The District's assets exceeded liabilities by $3,087,551 at the close of the
most recent fiscal year. The largest portion of the District's net assets reflects its investment in capital assets
(e.g. land, building, apparatus and equipment); less any related debt used to acquire those assets that are still
outstanding. The Golden Gate Fire District uses these capital assets to provide services to citizens;
consequently, these assets are not available for future spending. Although the District'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. The table below reflects the condensed government-wide Statement of Net Assets.
- 4-
GOLDEN GATE FIRE CONTROL AND RESCUE DISTRICT
MANAGEMENT'S DISCUSSION and ANALYSIS
SEPTEMBER 30, 2012
GOVERNMENT-WIDE FINANCIAL ANALYSIS -Continued
GOLDEN GATE FIRE CONTROL & RESCUE DISTRICT
NET ASSETS
AS OF SEPTEMBER 30, 2012
FY 2011 FY 2012
Current and Other Assets $ 4,249,501 $ 4,203,024 -1.1%
Capital Assets 8,264,939 7,319,943 -11.4%
Total Assets 12,514,440 11,522,967 -7.9% (1)
Current and Other Liabilities 537,410 645,870 20.3% (2)
Long-Term Liabilities 8,049,795 7,789,546 -3.2% (3)
- Total Liabilities 8,587,205 8,435,416 -1.8 %
Net Assets:
Invested in Capital Assets, net 658,328 4,416 -99.3%
— Restricted 68,847 54,612 -20.7%
Unrestricted 3,200,060 3,028,523 -5.4%
Total Net Asset $ 3,927,235 $ 3,087,551 -21.4%
• Net assets show the difference between the Fire District's assets and liabilities.
• The bulk of General funds and Impact Fee funds (Special Revenue Fund) are kept in separate saving
accounts at the State Board of Administration in Tallahassee until needed.
(1) During fiscal year 2012 net assets decreased due to old and beyond repair equipment being deleted
from the asset list plus the annual depreciation recording of$982,554.
(2) Current and Other Liabilities went up due to increases in derivative deferred inflows.
(3) Long term liabilities went down due to payments made on existing loans and normal debt amortization
as well as decrease in fair value of derivative financial instrument- swamp agreement.
- 5 -
1
1
GOLDEN GATE FIRE CONTROL AND RESCUE DISTRICT
MANAGEMENT'S DISCUSSION and ANALYSIS
SEPTEMBER 30, 2012
GOVERNMENT-WIDE FINANCIAL ANALYSIS - Continued C
Statement of Activities: The Fire District's net assets decreased by $839,684 during the current f isca year.
The table below compares the revenues and expenses for the two activity types for
• GOLDEN GATE FIRE CONTROL & RESCUE DISTRICT
1 CHANGES IN NET ASSETS
1 FOR THE YEAR ENDED SEPTEMBER 30, 2012
I
FY 2011 FY 2012 %
Program Revenues: $ 81,800 $ 100,654 23.0%
Charges for services 0 0
Land Trust Agreement
General Revenues:
7,429,381 6,669,577 -10.2%
Ad Valorem Taxes 12 248 14,676 19.8%
Investment Earnings 299 384 299,592 0.1%
_ Impact Fees and Other 7,822,813 7,084,499 -9.4%
Total Revenue
Expenses:
Public safety: 6,057,097 5,605,994 -7.4%
Employee costs 775,513 763,975 -1.5%
Outside services 218,365 245,582 12.5%
li Materials and supplies 1,529,015 982,554 -35.7%
Depreciation
r Debt service: 298,461 326,078 9.3%
Interest expense 0 0
Loss on disposal of capital assets
. ,. Total Expenses 8,878,451 7,924,183 -10.7%
Change in net assets (1,055,638) (839,684) -20.5%
Net Assets - Beginning of Year 4,982,873 3,927,235 -21.2%
- Deferral —swap agreement 0 0
0 0
Prior period adjustment
Net Assets— Ending of Year $ 3.927.235 $ 3.087.551 -21.4%
General Revenues
During fiscal year of 2012 the Fire District received a 10.2% decrease in Ad Valorem tax dollars over the prior
- fiscal year. Investment earnings increased 19.8°/rior f seal the ear mainly Idue interest
to sl'ghtrates
ncreasehn m prior
pact fees.
year. Other revenues-increased 0.1 /° over the p Y
' - 6 -
GOLDEN GATE FIRE CONTROL AND RESCUE DISTRICT
MANAGEMENT'S DISCUSSION and ANALYSIS
SEPTEMBER 30, 2012
- GOVERNMENT-WIDE FINANCIAL ANALYSIS - Continued
Expenses
During fiscal year of 2012 employee costs decreased by 7.4% over the prior fiscal year due to employee
resignations and not rehiring replacements. Outside services decreased by 1.5% over the prior fiscal year due
to cutting back on expenditures wherever possible. Materials and supplies increased 12.5% over the prior
fiscal year due to purchase of new protective firefighting gear. Depreciation declined 35.7% due to fully
depreciated capital assets.
Net Assets
During fiscal year 2012 net assets decreased due to equipment being deleted from the asset list as well as full
year of depreciation of$982,554. Total 2012 expenses exceeded total revenues by $839,684.
- Liabilities
Long term liabilities went down due to payments being made on existing loans.
I� -
GENERAL FUND BUDGETARY HIGHLIGHTS
_ By motion, transfers of unencumbered appropriation balances are made at midyear to reflect changes in
anticipated revenues and/or expenditures. During fiscal year of 2012, the Fire District did not adjust the
original budget at mid-year:
The following compares original general fund budget to final budget:
ORIGINAL FINAL
• Revenues $10.222.196 $10.222.196
- • Expenditures $10.222.196 $10.222.196
_ General Fund final budget revenue amounts and expenditures did not change from the original budget
amounts.
SPECIAL REVENUE FUND BUDGETARY HIGHLIGHTS
The following compares original special revenue fund budget to final budget:
ORIGINAL FINAL
• Revenues $ 150.000 $ 150.000
• Expenditures $ 150.000 $ 150.000
Special Revenue Fund final budget revenue amounts and expenditures did not change from the original
budget amounts.
- 7 -
GOLDEN GATE FIRE CONTROL AND RESCUE DISTRICT
[ MANAGEMENT'S DISCUSSION and ANALYSIS
C SEPTEMBER 30, 2012
C . CAPITAL ASSET AND DEBT ADMINISTRATION
Capital Assets: The Fire District's investment in capital assets as of September 30, 2012, amounts to
$7,319,943 (net of accumulated depreciation). The investment in capital assets includes land, buildings,
[ apparatus and equipment.
Long-term Debt: At the end of the current fiscal year, the Golden Gate Fire District had total debt outstanding
[ of$7,789,546 (including derivative financial instrument).
Long-term debt at the end of the current fiscal year included (see page 28— 31 for further details):
[ • Lease purchase agreement for Station #70.
• Loan for purchase of new fire truck (Pumper at Station #71).
• Loan for purchase of new fire truck (Pumper at Station #73).
• Construction Loan at Fifth Third Bank for$8mil for building two fire stations.
• Compensated absences.
GOVERNMENTAL FUNDS FINANCIAL ANALYSIS
Changes in General Fund Balances
PERCENT
2011 2012 CHANGE
Revenues
- Ad Valorem and County Taxes $ 7,429,381 $ 6,669,577 -10.2%
Impact and Other Fees $ 81,800 $ 100,654 23.0%
Investment Income $ 12,189 $ 14,620 19.9% (1)
_ Miscellaneous $ 184,992 $ 168,469 -8.9%
$ 7,708,362 $ 6,953,320 -9.8%
Expenses
Public Safety $ 7,241,657 $ 6,644,006 -8.3%
Capital Outlay $ 28,182 $ 37,558 33.3% (2)
Debt Service $ 435,346 $ 322,730 -25.9% (3)
- Total Expenses $ 7,705,185 $ 7,004,294 -9.1%
Other Financing Sources (Uses)
- Proceeds from Capital Lease $ 0 $ 0 0%
Change in Net Assets $ 3,177 $ (50,974) -1704.5%
Fund Balance - Beginning of Year $ 4,028,114 $ 4,031,291 0.1%
Fund Balance - End of Year $ 4.031.291 $ 3.980.317 -1.3%
(1) Investment income increased due to increased interest rates on investments in 2012.
(2) Capital Outlay increased mainly due to purchase of new SCBA air bottles, fire hose and communication
system for dive team. Communication system was funded 80% by a Federal Grant.
(3) Debt Service declined due to payments being made on existing loans and lower debt balances.
- 8 -
GOLDEN GATE FIRE CONTROL AND RESCUE DISTRICT
MANAGEMENT'S DISCUSSION and ANALYSIS
SEPTEMBER 30, 2012
GOVERNMENTAL FUNDS FINANCIAL ANALYSIS — Continued
Changes in Special Revenue (Impact Fee) Fund Balances
PERCENT
2011 2012 CHANGE
- Revenues
Impact and Other Fees $ 111,183 $ 131,126 17.9% (1)
Investment Income $ 60 $ 55 -8.3%
- $ 111,243 $ 131,181 17.9%
Expenses
Debt Service $ 90,000 $ 150,000 66.7%
Total Expenses $ 90,000 $ 150,000 66.7%
Change in Net Assets $ 21,243 $ (18,819) 11.4%
Fund Balance - Beginning of Year $ 52,188 $ 73,431 40.7%
Fund Balance - End of Year $ 73.431 $ 54.612 -25.6%
(1) Impact and other fees revenue increased due to a slow return of new construction in our area.
FUND BALANCE DISCLOSURE
- In accordance with GASB No. 54, the District classifies governmental fund balances as follows:
GENERAL SPECIAL TOTAL
FUND REVENUES FUNDS
Non-spendable $ 67,056 $ 0 $ 67,056
Restricted 121,080 54,612 175,692
. Committed 0 0 0
Assigned:
Revenue and contingency reserve 2,756,063 0 2,756,063
IUnassigned 1,036,118 0 1,036,118
Total $ 3.980.317 $ 54.612 $ 4.034.929
I .
I - - 9 -
GOLDEN GATE FIRE CONTROL AND RESCUE DISTRICT
C_ MANAGEMENT'S DISCUSSION and ANALYSIS
SEPTEMBER 30, 2012
ECONOMIC FACTORS AND NEXT YEAR'S BUDGETS AND RATES
- When preparing the fiscal year 2013 budget, the District considered the increase in cost for just doing business
and any anticipated changes in the development of our area that would make an impact on the tax dollars
received. The District obtains most of its funding from ad valorem tax dollars. -The Property Appraiser has
- forecasted a slight increase in tax rolls for FY2013. Impact fees continue to increase slightly but still not
enough to have much of an impact on the District's budget. The Fire District will still need to continue to use
general fund monies to make capital improvement purchases and most loan payments. This in turn means
- that the District will have less money to fund necessary operating expenses which includes personnel costs.
In anticipation of less tax dollars for operation of the District, during May 2009, the Golden Gate Fire District
went before the voters with a referendum to increase the millage rate from 1.0 to 1.5. The voters approved the
increased millage rate maximum of 1.5 mills. This new millage rate became effective with the FY 2010 tax roll.
The Fire Board set the millage rate at 1.2968 for fiscal year 2010. The maximum millage rate was not taken to
fulfill the promise made to taxpayers of not increasing taxes. Since tax dollars continued to decline the Fire
Board began to set the millage rate at the maximum of 1.5 for fiscal year 2011. Tax dollars continued to decline
in FY2012.
General Fund Budget: The Collier County Property Appraiser certified the preliminary FY-2013 tax roll on June
29, 2012. The District's assessed taxable value is at 4,602,997,936 an increase of 41,470,848 or 0.91% from
the prior year's final tax roll. The Fire Board approved setting the millage rate at 1.5 mills for FY 2013. The
Fire District will receive an increase in tax dollars of$62,206 or 0.91%.
Use of Prior Year General Fund Cash: The fund balance for FY 2012 is being used to fund the necessary
reserve portions of the FY 2013 General Fund Budget.
Special Revenue Fund Budget: The District is anticipating another slight increase in the amount of impact fees
to be collected in FY 2013. During FY 2011, the District started receiving a small increase in the amount of
impact fees collected after having received decreases for five years. Again during FY2012, the District
continued to see a small increase in impact fees collected. This is all due to a slow return of new construction
in our area. It is new construction that generates the impact fees.
'g741
Chief J. Nolan Sapp
Golden Gate Fire Control and Rescue District
REQUESTS FOR INFORMATION
This financial report is designed to provide Golden Gate Fire Control & Rescue District's citizens and
- taxpayers with a general overview of the District's finances and to show the District's accountability
for the money it receives. Questions concerning any of the information provided in this report or
requests for additional financial information should be addressed to the Fire Chief, Golden Gate Fire
- Control & Rescue District, 14575 Collier Blvd., Naples, FL 34119 or phone at 239-348-7540.
- 10 -
I -
I -
r,
i -
rl _
fl _
PART I. FINANCIAL STATEMENTS
I
I
[
GOLDEN GATE FIRE CONTROL AND RESCUE DISTRICT
[ STATEMENT OF NET ASSETS
SEPTEMBER 30, 2012
C GOVERNMENTAL
ACTIVITIES
ASSETS
Cash $ 189,224
Investments 3,697,812
Receivables (Note 4) 82,925
Prepaid expenses 67,056
Cash, restricted for lease interest (Note7) 121,080
Cash and investments, restricted for impact fee 44,927
Capital assets, not being depreciated:
Land 774,341
Capital assets, net of accumulated
depreciation:
Buildings and improvements 4,946,474
Autos and trucks 1,080,602
Furniture, fixtures, and equipment 518,526
Total capital assets, net (Note 5) 7,319,943
Total assets 11,522,967
LIABILITIES
Accounts payable 62,816
Salaries and benefits payable (Note 6) 249,847
Interest payable 14,712
Derivative deferred inflows (Note 7) 318,495
Compensated absences (Note 7):
Expected to be paid within one year 20,171
Expected to be paid after one year 453,848
_. Derivative financial instrument—swap agreement(Note 7) 166,338
Notes and capital leases payable (Note 7):
Portion due within one year 132,369
Portion due after one year 7,016,820
Total liabilities 8,435,416
NET ASSETS
Invested in capital assets, net
of related debt 4,416
Restricted for impact fees 54,612
Unrestricted 3,028,523
Total net assets $ 3.087.551
The accompanying notes are an integral part of these financial statements.
- 11 -
•
L.
GOLDEN GATE FIRE CONTROL AND RESCUE DISTRICT
STATEMENT OF
ACTIVITIES
1 FOR THE YEAR ENDED SEPTEMBER 30, 2012
CGOVERNMENTAL
Expenses: ACTIVITIES
Public safety-fire protection:
Personal services
Outside services $ 5,605,994
Materials and supplies 763,975
Depreciation 245,582
Interest on long-term debt and capital leases 982,554
326,078
I Total program expenses
�. 7,924,183
Program revenues:
r - Charges for services
100,654
Net program expense
7,823,529
General revenues:
Property taxes
Impact fee revenue 6,669,577
Interest income 131,126
Tower leases 14,676
Miscellaneous 147,221
21,245
Total general revenues
6,983,845
Change in net assets
(839,684)
Net assets, September 30, 2011
3,927,235
Net assets, September 30, 2012
$ 3.087.551
I_
i_
The accompanying notes are an integral part of these financial statements.
- 12 -
PI
1 '
j1 GOLDEN GATE FIRE CONTROL AND RESCUE DISTRICT
BALANCE SHEET - GOVERNMENTAL FUNDS
Ii - SEPTEMBER 30, 2012
GOVERNMENTAL FUND TYPES TOTAL
SPECIAL GOVERNMENTAL
GENERAL REVENUE FUNDS
ASSETS
• Cash (Note 3) $ 189,224 $ 40,314 $ 229,538
Cash, restricted (Note 7) 121,080 0 121,080
- Investments (Note 3) 3,697,812 4,613 3,702,425
Receivables (Note 4) 77,824 5,101 82,925
Prepaid expenses 67,056 0 67,056
- Due from the General Fund 0 4,584 4,584
Total Assets $ 4.152.996 $ 54.612 $ 4.207.608
LIABILITIES AND FUND BALANCES
Liabilities:
- Accounts payable $ 62,816 $ 0 $ 62,816
_ Accrued liabilities (Note 6) 105,279 0 105,279
Due to Special Revenue Fund 4,584 0 4,584
Total Liabilities 172,679 0 172,679
• Fund Balances (Notes 7 and 12):
Non-spendable 67,056 0 67,056
▪ Restricted 121,080 54,612 175,692
Committed 0 0 0
Assigned 2,756,063 0 2,756,063
▪ Unassigned 1,036,118 0 1,036,118
Total Fund Balances 3,980,317 54,612 4,034,929
a
Total Liabilities and Fund Balances $ 4.152.996 $ 54.612 $ 4.207.608
Amounts reported for governmental activities in the
statement of net assets are different because:
Fund balances - governmental funds 4,034,929
Capital assets used in governmental activities
are not financial resources and, therefore, are
not reported in the funds. 7,319,943
Long-term liabilities, including capital leases payable,
a promissory note obligation, related interest payable,
derivative instrument, termination benefits/other are not
due and payable in the current period and therefore are
Il not reported in the funds. (8,267,321)
Net assets of governmental activities $ 3.087.551
ii The accompanying notes are an integral part of these financial statements.
- 13 -
-,,1
GOLDEN GATE FIRE CONTROL AND RESCUE DISTRICT
STATEMENT OF REVENUES, EXPENDITURES AND CHANGES
IN FUND BALANCES - GOVERNMENTAL FUNDS
FOR THE YEAR ENDED SEPTEMBER 30, 2012
GOVERNMENTAL FUND TYPES TOTAL
SPECIAL GOVERNMENTAL
GENERAL REVENUE FUNDS
Revenues:
Ad valorem and county taxes $ 6,669,577 $ 0 $ 6,669,577
Impact and other fees 100,654 131,126 231,780
- Interest and dividends 14,620 55 14,675
Tower leases and miscellaneous 168,469 0 168,469
Total Revenues 6,953,320 131,181 7,084,501
Expenditures:
- Current
Public safety:
Employee costs 5,634,449 0 5,634,449
Outside services 763,975 0 763,975
Materials and supplies 245,582 0 245,582
Capital outlay 37,558 0 37,558
Debt service:
Principal retirement 134,870 12,596 147,466
Interest and fiscal charges 187,860 137,404 325,264
Total Expenditures 7,004,294 150,000 7,154,294
(Deficiency)/excess of revenues
(under) over expenditures (50,974) (18,819) (69,793)
Other financing sources (uses):
Transfers in (out) 0 0 0
Total other financing sources and uses 0 0 0
Net change in fund balances (50,974) (18,819) (69,793)
Fund Balances, September 30, 2011 4,031,291 73,431 4,104,722
Fund Balances, September 30, 2012 $ 3.980.317 $ 54.612 $ 4.034.929
The accompanying notes are an integral part of these financial statements.
- 14 -
.
GOLDEN GATE FIRE CONTROL AND RESCUE DISTRICT
RECONCILIATION OF THE STATEMENT OF REVENUES,
EXPENDITURES AND CHANGES IN FUND BALANCES OF GOVERNMENTAL FUNDS
TO THE STATEMENT OF ACTIVITIES
FOR THE YEAR ENDED SEPTEMBER 30, 2012
Amounts reported for governmental activities in the statement of activities (page 12)
are different because:
Net change in fund balances - total governmental funds (page 14) $ (69,793)
Governmental funds report capital outlays as expenditures. However,
in the statement of activities the cost of these assets is allocated over
their estimated useful lives and reported as depreciation expense. This
is the amount by which depreciation exceeded capital outlays in the
current period. (944,996)
The issuance of long-term debt (e.g., notes, capital leases) provides
current financial resources to governmental funds, while the repayment
of the principal of long-term debt consumes the current financial resources
II of 9 overnmental funds. Neither transaction, however, has any effect on
net assets. This amount is the net effect of these differences in the
treatment of long-term debt. 127,296
Some items reported in the statement of activities including interest,
vacation/sick leave, termination benefits, and the disposal of capital assets
do not require the use of current financial resources and, therefore, are
not reported as expenditures in governmental funds. 47,809
Change in net assets of governmental activities (page 12) $ (839.684)
The accompanying notes are an integral part of these financial statements.
- 15 -
GOLDEN GATE FIRE CONTROL AND RESCUE DISTRICT
NOTES TO FINANCIAL STATEMENTS
SEPTEMBER 30, 2012
- NOTE 1 - REPORTING ENTITY AND SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES
Reporting entity
GOLDEN GATE FIRE CONTROL AND RESCUE DISTRICT (the District) is a local governmental unit created
by the Florida State Legislature to provide fire and rescue service to a certain prescribed area in Collier
_ County, Florida, and is an independent special district authorized and existing under Florida House Bill 0865.
The District is operated by a three-person board of commissioners. The government-wide balance sheet and
statement of activities and the General and Special Revenue include all of the operations and activities
relevant to the District.
During 2004, the District implemented Government Accounting Standards Board (GASB) Statement No. 34,
Basic Financial Statements—and Management's Discussion and Analysis— for State and Local Governments,
- Statement No. 37, Basic Financial Statements and Management's Discussion and Analysis -. for State and
Local Governments; Omnibus Statement No.38, Certain Financial Statement Note Disclosures, and GASB
Interpretation No. 6, Recognition and Measurement of Certain Liabilities and Expenditures in Government
Fund Financials. GASB Statement No. 34 and these related pronouncements established a new financial
reporting model for state and local governments that included the addition of management's discussion and
analysis, district-wide financial statements, required supplementary information and the elimination of the
effects of internal service activities, if any, and the use of account groups to the already required fund financial
statements and notes.
The GASB determined that fund accounting has and will continue to be essential in helping governments to
achieve fiscal accountability and should, therefore, be retained. The GASB also determined that district-wide
financial statements are needed to allow users of financial reports to assess a government's operational
accountability. The new GASB model integrates fund-based financial reporting and district-wide financial
reporting as complementary components of a single comprehensive financial reporting model.
As required by U.S.Generally Accepted Accounting Principles (GAAP), these financial statements present
- Golden Gate Fire Control and Rescue District (the primary government) as a stand-alone government. The
reporting entity for the District includes all functions of the government in which the District's Board of
Commissioners exercises oversight responsibility. Oversight responsibility includes, but is not limited to,
financial interdependency, selection of governing authority, designation of management, significant ability to
influence operations and accountability for fiscal matters.
Based upon the application of the above mentioned criteria as set forth in Governmental Accounting Standards
Board Statement Number 14, The Financial Reporting Entity, as amended by GASB No. 39, Determining
Whether Certain Organizations Are Component Units, the District has identified no component units.
- Government-wide and fund financial statements
The government-wide financial statements (i.e., the statement of net assets and the statement of activities)
report information on all activities of the primary government. Governmental activities, which normally are
supported by taxes, are reported separately from business-type activities of which the District had no such
activities during 2012.
- 16 -
•
GOLDEN GATE FIRE CONTROL AND RESCUE DISTRICT
NOTES TO FINANCIAL STATEMENTS
SEPTEMBER 30, 2012
NOTE 1 - REPORTING ENTITY AND SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES (Continued)
Government-wide and fund financial statements (continued)
The statement of activities demonstrates the degree to which the direct expenses of a given function or
segment are offset by program revenues. Direct expenses are those that are clearly identifiable with a specific
_ function or segment. Program revenues include (1) charges to customers or applicants who purchase, use, or
directly benefit from goods, services, or privileges provided by a given function or segment and (2)grants and
contributions that are restricted to meeting the operational or capital requirements of a particular function or
segment. Taxes and other items not properly included among program revenues are reported instead as
general revenues.
Separate financial statements are provided for governmental funds, even though such funds are excluded from
the government-wide financial statements. All governmental funds of the District are reported as major
individual funds.
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. Revenues are recorded when earned and expenses are recorded when a
ij 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.
i
1
Government 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. The government considers all revenues
available if they are collected within 60 days after year-end. Expenditures are recorded when the related fund
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. The
primary revenue sources that are susceptible to accrual are ad valorem taxes, impact fees, inspection fees and
interest. Other receipts and fees become measurable and available when cash is received by the District and
are recognized as revenue at that time.
iAs a general rule the effect of interfund activity has been eliminated from the government-wide financial
statements.
When both restricted and unrestricted resources are available for use, it is the District's policy to use restricted
resources first, then unrestricted resources as they are needed.
1
I
- 17 -
GOLDEN GATE FIRE CONTROL AND RESCUE DISTRICT
NOTES TO FINANCIAL STATEMENTS
SEPTEMBER 30, 2012
NOTE 1 - REPORTING ENTITY AND SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES (Continued)
Measurement focus, basis of accounting, and financial statement presentation (continued)
The District reports the following major governmental funds:
General Fund -The General Fund is the general operating fund of the District. It is used to account for
all financial resources except those required to be accounted for in another fund.
Special Revenue Fund - The Special Revenue Fund is used to account for impact fees required to be
used for future capital outlays in response to growth of the community.
Budgetary process
The budget and amendments, if any, are approved by the Commissioners. The budget is prepared on the
cash basis, which is considered not to be materially different from the modified accrual basis in accordance
with U.S. generally accepted accounting principles.
The annual budget serves as the legal authorization for expenditures. Expenditures cannot legally exceed the
total amount budgeted. All budget amendments, which change the legally adopted total appropriation, are
approved by the Commissioners.
Encumbrances
Encumbrance accounting under which purchase orders and other commitments for expenditures of monies are
recorded is not employed by the District and thus no amount has been included in these basic financial
statements for encumbrances.
Due to and from other funds
Interfund receivables and payables arise from interfund transactions and are recorded by funds affected in the
period in which the transactions are executed. There were amounts due to and from other funds at September
1. 30, 2012 in the accompanying fund statements.
Statement of Revenues, Expenditures and Changes in Fund Balances - Budget and actual -All
governmental fund types
CThe this et column of
9 is statement is prepared from the District's adopted annual budget, as amended during
the year, which reflects budgeted revenues and expenditures in total for all governmental fund types on a cash
basis which is comparable to the modified accrual basis of accounting for the year ended September 30, 2012.
Appropriations lapse at year-end.
Itl�l
- 18 -
I
GOLDEN GATE FIRE CONTROL AND RESCUE DISTRICT
NOTES TO FINANCIAL STATEMENTS
SEPTEMBER 30, 2012
NOTE 1 - REPORTING ENTITY AND SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES (Continued)
Property tax calendar
The calendar is composed of the following dates:
1. Lien date - 3rd week in May
2. Levy date - July 1
3. Due date - March 31
4. Collection dates - November through March
Total column on the Balance Sheet and the Statement of Revenues, Expenditures and Changes in
Fund Balances - Governmental Funds
The total columns on the balance sheet and the statement of revenues, expenditures and changes in fund
balances is presented only to facilitate financial analysis and also is utilized for reconciliation purposes to the
government-wide financial statements. Data in this column does not present financial position or results of
operations in conformity with U.S. generally accepted accounting principles, and such data is not comparable
to a consolidation.
Investments
Investments are reported and are equal or equivalent to market value. Florida Statutes allows the District to
invest surplus funds in:
a) the State operated Local Government Surplus Funds Trust Fund;
b) securities guaranteed by the U.S. Government or agencies of the U.S. Government; or
c) interest bearing time deposits or savings accounts in banks and savings and loans organized under
State laws or doing business in and situated in the State, provided collateral requirements are met;
d) obligations guaranteed by the Government National Mortgage Association or similarly structured and
secured associations or corporations.
Certain funds are invested with the State Board of Administration (SBA) of Florida in the Local Government
Surplus Funds Trust Fund Investment Pool. These funds are recorded at cost, which according to the State
Board of Administration of Florida is approximately equal to the fair value of the investments for financial
reporting purposes.
Taxes and fees receivable
No allowance for losses on uncollectible accounts has been recorded since the District considers all amounts
to be fully collectible.
Prepaid items
Certain payments to vendors reflect costs applicable to future accounting periods and are recorded as prepaid
items in both the government-wide and fund financial statements.
- 19 -
GOLDEN GATE FIRE CONTROL AND RESCUE DISTRICT
NOTES TO FINANCIAL STATEMENTS
SEPTEMBER 30, 2012
NOTE 1 - REPORTING ENTITY AND SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES (Continued)
Payables and accruals
Such payable and accrual amounts are recorded as expenses and liabilities when incurred in the government
wide financial statements and as expenditures and liabilities in the fund financial statements when paid and
when expected to be liquidated with available expendable financial resources.
Restricted assets
- Cash restricted for prepaid interest was established based on the Lease Agreement dated April 2011, see
Note 7. There were no such funds segregated for debt service payments at September 30, 2012 as the
following quarterly payment is not due until November 2012. Certain resources set aside for impact fee
expenditures, are classified as restricted assets on the statement of net assets because they are maintained in
separate bank accounts and their use is limited by laws and regulations. The "cash and investments restricted
for impact fees" are solely required to be used for growth capital expenditures.
Capital assets
Capital assets, which include land, buildings and improvements, autos and trucks, and furniture, fixtures, and
equipment, are reported in the government-wide financial statements. Capital assets are defined by the
District as assets with an initial, individual cost of more than $500 and an estimated useful life in excess of one
year.
In the case of initial capitalization of District capital assets and within the guidelines promulgated by GASB 34,
the District was able to use historical cost and original purchase date for all such assets. As the District
constructs or acquires additional capital assets each period, such assets are capitalized and reported at
historical cost. The reported value excludes normal maintenance and repairs which are essentially amounts
spent in relation to capital assets that do not increase the capacity or efficiency of the item or extend its useful
life. In the case of donations, the District values these capital assets at the estimated fair value of the item at
the date of donation. There were no such donated assets during 2012.
Interest on debt cannot meaningfully be associated with individual District functions and, consequently, is
reported as a separate line within governmental activities in the government-wide statement of activities. Such
treatment also applies to interest incurred on capital leases. The practical effect of capitalizing interest
incurred during the construction of capital assets used in governmental activities would be to allocate interest
cost to whatever function reported the related depreciation expense. However, the allocation of interest to
individual functions within governmental activities is not appropriate. Consequently, no such interest costs
incurred related to the construction of stations #72 and #73 were capitalized.
Capital assets of the District is depreciated using the straight line method over the following estimated useful
lives:
YEARS
Buildings and improvements 20 - 39
Autos and trucks 5 - 10
Furniture, fixtures and equipment 5 - 20
- 20 -
GOLDEN GATE FIRE CONTROL AND RESCUE DISTRICT
NOTES TO FINANCIAL STATEMENTS
SEPTEMBER 30, 2012
- NOTE 1 - REPORTING ENTITY AND SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES (Continued)
Long-term obligations
In the government-wide financial statements, long-term debt and other long-term obligations are reported as
liabilities in the Statement of Net Assets. In the fund financial statements, the face amount of debt issued and
debt principal and interest payments are reported as other financing sources and principal and interest
expenditures, respectively, in the Statement of Revenues, Expenditures and Changes in Fund Balances—
Governmental Funds.
- Compensated absences
The District's employees earn vacation which may either be taken or accumulated, up to certain amounts, until
- paid upon retirement or termination. Unused sick leave accumulates and is subject to a reduction if paid in
cash upon retirement or termination. The liability for compensated absences reflects amounts attributable to
employee services already rendered on a cumulative basis which is probable for payment.
Fund equity
In 2011, the District implemented GASB 54 "Fund Balance Reporting and Governmental Fund Type
1 Definitions". This statement establishes fund balance classifications that comprise a hierarchy based primarily
on the extent to which a government is bound to observe constraints imposed upon the use of resources
reported in governmental funds. Fund balance classifications, under GASB 54, are: Nonspendable, Restricted,
1 Committed,
Assigned and Unassigned. These classifications reflect not only the nature of funds, but also
provide clarity to the level of restrictions placed upon fund balance. Fund balance can have different levels of
restraint, such as external versus internal compliance requirements. Unassigned fund balance is a residual
classification within the General Fund. The General Fund should be the only fund that reports a positive
I unassigned balance. In all other funds, unassigned is limited to negative residual fund balance. For further
details of various fund balance classifications, refer to Note 12.
INet Assets in the government-wide statements are categorized as invested in capital assets, net of related
debt, restricted or unrestricted. Invested in capital assets, net of related debt, represents net assets related to
land, building and improvements, vehicles, and furniture, fixtures and equipment, net of any related debt.
Restricted net assets for impact fees are funds legally mandated to be set aside solely for growth capital
expenditures.
Risk management
The District is exposed to various risks of loss related to torts; theft, damage, and destruction of assets; errors
11 and omissions; injuries to employees; and natural disasters. Insurance coverage for such losses is purchased
from third-party carriers. The financial impact of the District's risk management activities are reported in the
general fund. For the fiscal year ended September 30, 2012, the District paid $205,958 to third-party carriers
to insure for these purposes. There has been no reduction in coverage from the prior year. Liabilities are
reported when it is probable that a loss has occurred and the amount of the loss can be reasonably estimated.
There was no such type of occurrence during fiscal 2012. No accrual has been provided for claims and
.�
incidents not reported to the insurer. Claims made have not exceeded the insurance coverage for the current
year.
- 21 -
rAm.n
GOLDEN GATE FIRE CONTROL AND RESCUE DISTRICT
NOTES TO FINANCIAL STATEMENTS
SEPTEMBER 30, 2012
NOTE 2 - RECONCILIATION OF GOVERNMENT IDE AND FUND FINANCIAL STATEMENTS
C Explanation of certain differences between the government-wide statement of net assets and the
governmental fund balance sheet
The government fund balance sheet includes a reconciliation between —tween fund balance total governmental funds
and net g
f t assets governmental activities as reported in the government-wide statement of net a
element of that reconciliation explains that "capital assets used in governmental activities are not fin anciiale
resources and, therefore, are not reported in the funds."
Capital assets:
The details of this $7,319,943 difference are as follows:
Total historical cost of fixed assets at September 30, 2012 (see Note 5) $ 19,369,974
Accumulated depreciation at September 30, 2012
(see Note 5)
12
( ,050,031)
Net adjustment to increase fund balance - total governmental funds
to arrive at net assets-governmental activities $ 7.319,943
Debt and other liabilities:
Another element of that reconciliation explains that "long term liabilities, including capital I
g p eases a abl
e a
promissory note obligation, interest payable, and termination benefits are not due and payable in a current
period and therefore are not reported in the funds."
The details of this $(8,267,321, see Notes 6 and 7) difference are as follows:
Capital lease payable -facility - Station #70 $ (142,750)
Capital lease payable -fire truck and equipment (P71) (136,352)
1
Capital lease payable - fire truck and equipment (E73) (178,175)
Promissory note obligation payable - Station #72 and #73 (6,691,912)
lDerivative financial instrument - swap agreement (166,338)
Accrued interest - swap agreement (318,495)
I.
Compensated absences (474,019)
Accrued insurance benefits - terminated employees (53,837)
[ Accrued insurance benefits - retired Chiefs (Note 6) (90,731)
Accrued interest payable (14,712)
Net adjustment to reduce fund ba lance - total governmental funds
to arrive at net assets - governmental activities $ (8.267.321)
I - 22 -
GOLDEN GATE FIRE CONTROL AND RESCUE DISTRICT
NOTES TO FINANCIAL STATEMENTS
SEPTEMBER 30, 2012
- NOTE 2 - RECONCILIATION OF GOVERNMENT-WIDE AND FUND FINANCIAL STATEMENTS
(Continued)
- Explanation of certain differences between the changes in net assets and the government-wide
statement of activities and_governmental fund statement of revenues, expenditures and changes in
fund ba lances
Capital outlay:
The governmental fund statement of revenues, expenditures, and changes in fund balances includes a
reconciliation between net change in fund balances - total governmental funds and change in net assets of
governmental activities as reported in the government-wide statement of activities. One element of that
reconciliation explains that, "Governmental funds report capital outlays as expenditures. However, in the
statement of activities the cost of these assets is allocated over their estimated useful lives and reported as
depreciation expense."
The details of this $(944,996) difference are as follows:
Capital outlay $ 37,558
Depreciation expense (Note 5) (982,554)
Net adjustment to decrease net change in fund balances—total governmental
funds to arrive at change in net assets of governmental activities $ (944.996)
Long-term debt:
Another element of that reconciliation states that, "The issuance of long-term debt (e.g., notes, capital leases)
provides current financial resources to governmental funds, while the repayment of the principal of long-term
debt consumes the current financial resources of governmental funds. Neither transaction, however, has any
effect on net assets."
The details of this $127,296 (see Note 7) difference are as follows:
Principal repayments:
Capital leases —fire truck and equipment $ 110,500
Capital lease —facility 16,796
Net adjustment to increase net change in fund ba lances— total governmental
funds to arrive at change in net assets of governmental activities $ 127.296
- 23 -
•
GOLDEN GATE FIRE CONTROL AND RESCUE DISTRICT
NOTES TO FINANCIAL STATEMENTS
SEPTEMBER 30, 2012
- NOTE 2 - RECONCILIATION OF GOVERNMENT-WIDE AND FUND FINANCIAL STATEMENTS
(Continued)
- Compensated Absences and Other Accruals:
Another element of that reconciliation states that, "some expenses reported in the statement of activities
including interest, vacation/sick leave expense, and termination benefits do not require the use of current
financial resources and, therefore, are not reported as expenditures in governmental funds."
The details of this $47,809 difference are as follows:
Net effect of differences in accounting treatment of accrued
termination benefits $ 79,461
Net compensated absences changes (see Note 7) (30,835)
Net effect of differences in accounting treatment of long-term debt
related interest and other accruals (817)
Net adjustment to increase net change in fund balances—total governmental
funds to arrive at change in net assets of governmental activities $ 47.809
NOTE 3 - CASH AND INVESTMENTS
Cash
Cash held at September 30, 2012 consisted of the following:
SPECIAL
GENERAL REVENUE
FUND FUND TOTAL
Demand Deposits $ 310,204 $ 40,314 $ 350,518
Petty Cash 100 0 100
$ 310.304 $ 40.314 $ 350.618
All deposits with banks are entirely insured by Federal Depository Insurance. All District depositories are
designated by the Florida State Treasurer as qualified public depositories. Chapter 280 of the Florida Statues
"Florida Security for Public Deposits Act" provides procedures for public depositories to ensure public monies
in banks and savings and loans are collateralized with the Treasurer as agent for the public entities.
Financial institutions qualifying as public depositories shall deposit with the Treasurer eligible collateral having
a market value equal to or in excess of the average daily balance of public deposits times the depository
collateral pledging level required pursuant to Chapter 280 as computed and reported monthly or 25 percent of
the average monthly balance, whichever is greater. The Public Deposit Security Trust Fund has a procedure
to allocate and recover losses in the event of a default or insolvency. When public deposits are made in
accordance with Chapter 280, no public depositor shall be liable for any loss thereof. Chapter 280 defines
deposits as demand deposit accounts, time deposit accounts, and certificates of deposit.
- 24 -
GOLDEN GATE FIRE CONTROL AND RESCUE DISTRICT
NOTES TO FINANCIAL STATEMENTS
SEPTEMBER 30, 2012
- NOTE 3 - CASH AND INVESTMENTS (Continued)
Cash (continued)
The District does not have a formal deposit policy that dictates deposits as a means of managing its exposure
to losses and follows the guidance stipulated by Chapter 280 of Florida Statutes.
• At September 30, 2012, the District's cash carrying amounts and bank balances were $350,618 and $431,980,
respectively.
• Investments
The District has no written policy and/or adopted formal investment policy and consequently adheres to the
investment guidelines as set forth in Section 218.415(17) of the Florida Statutes. All the District's investments
at September 30, 2012 are invested in the Local Government Surplus Funds Trust Fund (labeled as "Florida
PRIME") and the Fund B Surplus Trust Fund (the "Fund B"). These funds are not categorized because it is not
evidenced by securities that exist in physical or book entry form. All monies deposited in the surplus funds are
collateralized as required under law.
The District invests funds throughout the year with the Local Government Surplus Funds Trust Fund, which is
administered by the State Board of Administration (SBA), under the regulatory oversight of the State of Florida.
As of September 30, 2012, the investment pool closed with the total investments of approximately $6.4 billion
with the District's investment in the SBA totaling $3,702,425 of which $3,665,970 and $36,455 was invested in
Florida PRIME and Fund B.
The Local Government Surplus Funds Trust Fund is governed by Ch. 19-7.001-through 19.7.017 of the Florida
Administrative Code, which identifies the Rules of the State Board of Administration. These rules provide
guidance and establish the general operating procedures for the administration of the Local Government
Surplus Funds Trust Fund. Additionally, the Office of the Auditor General performs the operational audit of the
activities and investments of the State Board of Administration.
Florida Prime is not a registrant with the Securities and Exchange Commission (SEC); however, the Board has
adopted operating procedures consistent with the requirements for a 2a-7 like fund. Consequently, such
investments are recorded at amortized costs consistent with GASB Statement#31. In accordance with
regulations of a 2a-7 like fund, the method used to determine the participants' shares sold and redeemed is the
amortized cost method as a means to maintain a constant net asset value (NAV) of$1 per share. The Florida
PRIME account fair value equals the value in the account of$3,665,970 at September 30, 2012. The Fund B
is accounted for as a fluctuating net asset value (NAV) pool. The fair value factor at September 30, 2012 was
0.94896811. The Fund B fair value at September 30, 2012 was calculated at $34,595 ($36,455 @ .94896811)
or in essence, an unrealized loss of$1,860.
At September 30, 2012, the District's investment balance was as follows:
Florida PRIME and Fund B $ 3.702.425
Historical information showing the Local Government Surplus Funds Trust Fund's performance is presented in
the June 30, 2012 Comprehensive Annual Financial Report, which can be found at the State Board of
Administration's website.
- 25 -
GOLDEN GATE FIRE CONTROL AND RESCUE DISTRICT
NOTES TO FINANCIAL STATEMENTS
SEPTEMBER 30, 2012
- NOTE 3 - CASH AND INVESTMENTS (Continued)
Interest rate risk
The District does not have a formal investment policy that limits investment maturities as a means of managing
its exposure to fair value losses arising from increasing interest rates. The Florida PRIME weighted average
In addition,s to maturity at September 30, 2012 was 39 days. , information for the Fund B weighted average
days
life at September 30, 2012 is not available from SBA.
Credit risk
Florida Statutes Section 218.415(17) authorizes certain investment instruments that the District is permitted to
invest in since the District does not have a formal investment policy. Consequently, the District has no
investment policy that would further limit its investment choices. The Florida PRIME is rated by Standard and
Poors and is its current rating is AAAm. The Fund B is not rated by any nationally recognized statistical rating
agency.
Concentration of credit risk
The District places no limit on the amount it may invest in any one issuer. All the District investments are in the
Florida PRIME and Fund B.
1 NOTE 4 - RECEIVABLES
Receivables at September 30, 2012 consisted of the following:
1 Ad valorem taxes —general fund $ 50,074
Impact fees—special revenue fund 5,101
Property appraisal fees—general fund 14,388
Other
13,362
Total $ 82.925
I
- 26 -
GOLDEN GATE FIRE CONTROL AND RESCUE DISTRICT
NOTES TO FINANCIAL STATEMENTS
SEPTEMBER 30, 2012
NOTE 5 - CAPITAL ASSETS, NET
Capital asset activity for the year ended September 30, 2012 was as follows:
BALANCE BALANCE
SEPT. 30, OTHER/ SEPT. 30,
2011 ADDITIONS DELETIONS 2012
Capital assets, not being depreciated:
Land $ 774,341 $ 0 $ 0 $ 774,341
Construction in progress 0 0 0 0
Total capital assets, not being
depreciated 774,341 0 0 774,341
Capital assets, being depreciated:
Buildings and improvements 11,899,269 0 0 11,899,269
Autos and trucks 4,606,738 0 0 4,606,738
Furniture, fixtures and equipment 2,069,368 37,558 (17,300) 2,089,626
Total capital assets being depreciated 18,575,375 37,558 (17,300) 18,595,633
Less accumulated depreciation for:
Buildings and improvements (6,313,289) (639,506) 0 (6,952,795)
Autos and trucks (3,314,694) (211,442) 0 (3,526,136)
Furniture, fixtures and equipment (1,456,794) (131,606) 17,300 (1,571,100)
Total accumulated depreciation (11,084,777) (982,554) 17,300 (12,050,031)
Total capital assets being
depreciated, net 7,490,598 (944,996) 0 6,545,602
Total capital assets, net $ 8.264.939 $ (944.996) $ 0 $ 7.319.943
The cost of assets under capital lease arrangements totaled $2,078,641 with accumulated depreciation of
$1,266,031 at September 30, 2012.
- 27 -
T
GOLDEN GATE FIRE CONTROL AND RESCUE DISTRICT
NOTES TO FINANCIAL STATEMENTS,
SEPTEMBER 30, 2012
NOTE 6 - ACCRUED LIABILITIES
Accrued liabilities at September 30, 2012, were comprised of the following:
I
Accrued wages payable $ 89,158
Payroll taxes payable 6,821
Retirement contribution payable 9,651
Other miscellaneous (351)
Total Accrued Liabilities - General Fund 105,279
a
Termination benefits and insurance obligations
Accrued insurance benefits -terminated employees 53,837
Accrued insurance benefits - retired Chiefs 90,731
144,568
Total Accrued Liabilities - Statement of Net Assets $ 249.847
NOTE 7 - LEASES AND OTHER LONG-TERM DEBT
Capital Lease Obligations
The District is committed to three capital leases: (1) Station #70 Collier County lease, (2) Oshkosh Capital
firefighter truck lease, (3) Leasing 2 velocity custom pumpers lease. Capital leases are generally defined as
leases which transfer benefits and risks of ownership to the lessees.
(1) Station #70 Collier County Lease
The District and Collier County have a lease agreement for the facility previously constructed by Collier County
to be shared by the District, the Sheriffs Department and Emergency Medical Services. Based on the lease
'G agreement, the lease has been recorded as a non-interest bearing capital lease in the accompanying financial
statements.
7. Following is a schedule of the future minimum lease payments on the facility capital lease as of September 30,
L 2012:
YEAR ENDED
SEPTEMBER 30, 16,794
2013 16,794
2014 16,794
2015 16,794
2016 16,794
2017
2018 - 2021 58,780
R.. $ 142.750
- 28 -
GOLDEN GATE FIRE CONTROL AND RESCUE DISTRICT
NOTES TO FINANCIAL STATEMENTS
SEPTEMBER 30, 2012
NOTE 7 - LEASES AND OTHER LONG-TERM DEBT (Continued)
(2) Oshkosh Capital Firefighter Truck Lease
- In January 2006, the District entered into a capital lease agreement with Oshkosh Capital for the purchase of
one firefighter truck including related equipment totaling $299,200. Following is a schedule of the present
value of the net future minimum lease payments on this lease obligation at September 30, 2012:
YEAR ENDED
SEPTEMBER 30,
2013 $ 38,185
2014 38,185
2015 38,185
2016 38,185
152,740
Less: Amount representing interest (16,388)
Present value of net minimum lease payments $ 136.352
(3) Leasing 2 Velocity Custom Pumpers Lease
p
_ In March 2007, the District entered into a seven year capital lease agreement with Leasing 2 for the purchase
of a Pierce velocity custom pumper including related equipment totaling $538,750. Following is a schedule of
the present value of the net future minimum lease payments on this lease obligation at September 30, 2012:
YEAR ENDED
SEPTEMBER 30,
2013 $ 91,599
2014 91,599
183,198
Less: Amount representing interest (5,023)
Present value of net minimum lease payments $ 178,175
Promissory Note Obligation
In August 2003, the District entered into a promissory note with Fifth Third Bank totaling $8,000,000. Pursuant
to the loan agreement, the District is required to use the loan proceeds for the purpose of constructing two fire
station facilities (known as "Station #72" and "Station #73") located in the Golden Gate Fire District. The loan
is unsecured and interest is being charged at the sum of 90 day Libor interest rate plus 1.65%. The District's
operating funds and impact fees received each year are used as the source of debt service for such loan.
- 29 -
GOLDEN GATE FIRE CONTROL AND RESCUE DISTRICT
NOTES TO FINANCIAL STATEMENTS
SEPTEMBER 30, 2012
NOTE 7 - LEASES AND OTHER LONG-TERM DEBT (Continued)
Promissory Note Obliaation (Continued)
On April 1, 2011, the District entered into a Lease Purchase Agreement with Fifth Third Bank as a means to
refinanced the original $8M Promissory Note with a current outstanding principal balance of $6,691,912 the
proceeds of which were originally used to finance the construction and equipping of two fire stations #72 and
#73. Pursuant to the Agreement, the District provided the Bank a leasehold interest in the real property and
related improvements and equipment of these two specific fire stations as defined, and agreed to pay the Bank
quarterly base rent amounts (consisting of principal and interest) for the use of these leased properties as
defined in the Agreement. The interest component of the base rent is due quarterly on the 20th of each month
°' commencing May 20, 2011 bearing interest at the three month Libor plus 1.65% (defined as "adjusted rate")
r and the principal component of the base rent totaling $83,649 is due quarterly on 20th of each month
commencing November 20, 2013 with a final balloon payment of$5,939,071 due on February 20, 2016.
The District agreed to maintain certain required insurance policies and amounts as defined in the Agreement.
As of April 1, 2011, the District was required to establish and initially fund an "Interest Account" held by the
Bank totaling $124,680 representing the first 12 months of the respective interest component of the base rent.
Annually thereafter, the District is required to fund 12 months of the estimated interest component of the base
rent. As of September 30, 2012, the cash balance in this Interest Account was $121,080 and was reflected as
a restricted fund balance, see Note 12.
Derivative Financial Instrument- Swap Agreement
In conjunction with the above respective loan agreement with Fifth Third Bank, the District entered into a ten
• year (20 year amortization period) interest rate swap agreement (the "swap agreement") for$8,000,000.
Based on the swap agreement, the District owes quarterly interest calculated at a fixed rate of 3.44% to the
counterparty to the swap. In return, the counterparty owes the District interest based on 0.29% of the three
month (90 day) Libor rate. The District uses the swap agreement to minimize fluctuations in cash flows caused
by interest rate volatility and to effectively convert its floating rate debt to fixed-rate debt. Fifth Third Bank, the
- counterparty, has a current credit rating of BBB+/A2.
Only the net difference in interest payments is actually exchanged with the counterparty. The notional amount
of$8,000,000 is not exchanged; it is only the basis on which interest payments are calculated quarterly.
Amounts to be paid or received under the swap agreement are recognized as increases or reductions in
• interest expense in the periods in which they accrue.
During the term of the swap agreement, the District effectively pays a fixed rate on the loan. The debt service
requirements (as presented below based on the new lease agreement dated 4/1/2011 above) to maturity for
' this loan arrangement are based on that fixed rate at 3.44% and 90 day Libor spread (0.359% at September
30, 2012). The District will be exposed to variable rates if the counterparty to the interest swap defaults or if
the interest swap is terminated. A termination of the interest swap agreement may also result in the District's
• making or receiving a termination payment or benefit amount. Based on Fifth Third Bank's Mark-to-Market
Report as of September 30, 2012, the District would owe the bank approximately $166,838 if the interest swap
agreement was terminated. The swap agreement provides a hedge against changes in the amount of cash
• flows associated with the District's long-term debt. Accordingly, the swap agreement is reflected at fair value in
the statements of net assets and the effective portion of the related gains or losses on the agreement is
recognized as a component of the change in net assets. The net effect of this accounting on the District's
operating results is that interest expense on the variable rate debt being hedged is recorded based on a fixed
interest rate. In 2011, the Bank approved to delay principal payments for fiscal 2009, 2010, and 2011 until
November 2013 (see above) as means to help the District with cash flow needs from fiscal 2009 through 2013.
- 30 -
i
GOLDEN GATE FIRE CONTROL AND RESCUE DISTRICT
NOTES TO FINANCIAL STATEMENTS
SEPTEMBER 30, 2012
NOTE 7 - LEASES AND OTHER LONG-TERM DEBT (Continued)
[ Pursuant to GASB Statement No. 53, the District reflected the change in the fair value of the interest swap
agreement between fiscal 2012 and 2011 totaling $163,791 as "derivative deferred inflows" in the
accompanying statement of net assets. The total cumulative "derivative deferred inflows" as of September 30,
2012 was $318,495.
Following is a schedule of future principal debt service payments (per 4/1/2011 Lease Agreement denoted
above) as of September 30, 2012 based on an overall synthetic rate of 3.81% (3.44 fixed plus Libor rate spread
of 0.374%):
•
I, 0 YEAR ENDED
SEPTEMBER 30, PRINCIPAL INTEREST
2013 $ 0 $ 296,171
2014 334,596 133,328
2015 334,596 126,535
2016 6,022,720 61,215
7
$ 6.691.912 $ 617.249
"r Long-term liability activity for the year ended September 30, 2012 was as follows: DUE
BALANCE BALANCE WITHIN
SEPT. 30, PAYMENTS/ SEPT. 30, ONE
r2011 ADDITIONS OTHER 2012 YEAR
r
Capitalized lease - Station #70 building $ 159,544 $ 0 $ (16,794) $ 142,750 $ 16,794
rCapital lease @ 4.7% w/Oshkosh Capital, 166,702 0 (30,350) 136,352 31,777
principal and interest due annually,
P.' secured and matures February 2016.
Capital lease @ 4.55% w/Leasing 2, 258,324 0 (80,149) 178,175 83,798
r, principal and interest due annually,
secured and matures March 2014.
Promissory note payable, interest
paid quarterly at Libor plus
1.65%, secured, source of
repayment-impact fees, matures 0 6,691,912 0
r August 2016. 6,691,912 0
7,276,482 0 (127,293) 7,149,189 132,369
Derivative financial instrument—
swap agreement 330,129 0 (163,791) 166,338 0
Compensated absences
443,184 51,006 (20,171) 474,019 20,171
[I $ 8.049.795 $ 51.006 $ (311.755) $ 7.789.046 $ 152.540
- 31 -
f
GOLDEN GATE FIRE CONTROL AND RESCUE DISTRICT
NOTES TO FINANCIAL STATEMENTS
SEPTEMBER 30, 2012
NOTE 8 - PENSION PLAN OBLIGATIONS
All paid District employees are participants in the Florida Retirement System (System), a defined benefit non-
contributory multiple-employer, cost-sharing public retirement system, which is controlled by the State
Legislature and administered by the State of Florida, Department of Administration, Division of Retirement.
The plan covers a total of approximately 980,000 employees of various governmental units within the State of
Florida.
• The System provides for vesting of benefits after 6 years of creditable service. Normal retirement benefits are
available to employees who retire at or after age 62 with 6 or more years of service with a 5% reduction of
'' benefits for each year prior to the normal retirement age. Retirement benefits are based upon age, average
f' compensation and years-of-service credit, where average compensation is computed as the average of an
individual's defined highest fiscal years' earnings ( i.e., either five or eight years) depending on enrollment
- date.
Participating employer contributions are based upon State-wide rates established by the State of Florida.
• These rates effective July 1, 2012 are applied to employee salaries as follows: regular employees — 8.18% and
special risk employees — 17.90% of which the employee contribution rate of 3% is included in these rates.
The funding policy provides for monthly employer contributions at actuarially determined rates that are
determined using the entry age actuarial cost method.
The District's contribution to the plan for the year ended September 30, 2012 was $544,105 and was paid by
" the due date for the contribution. This represents approximately 14% of the District's 2012 covered payroll of
$3,779,462. The total payroll for fiscal 2011 was $4,153,073. In addition, the District's contribution to the plan
for fiscal 2011 was $784,096.
The pension benefit obligation for the System as a whole, determined through an actuarial valuation was
$127.9 billion at July 1, 2012, the date of the most recent actuarial report. The report also indicates that the
System had total actuarial accrued liability of approximately $147.2 billion at that date resulting in an
underfunded pension obligation of$19.3 billion. The pension benefit obligation is a standardized disclosure
measure of the present value of plan benefits, adjusted for the effects of projected salary increases and step-
r rate benefits estimated to be payable in the future as a result of employee service to date. A variety of
I significant actuarial assumptions are used to determine the standardized measure of the pension benefit
obligation and these assumptions are summarized below:
a) a rate of return on the investment of present and future assets of 7.75% per year compounded
annually;
b) projected salary increases of 4.% per year compounded annually, attributable to inflation of 3%; and
c) cost-of-living adjustments of 3% or as defined in the Plan based on certain timeframes,
- 32 -
r
w .
GOLDEN GATE FIRE CONTROL AND RESCUE DISTRICT
NOTES TO FINANCIAL STATEMENTS
SEPTEMBER 30, 2012
NOTE
8 -
PENSION PLAN OBLIGATIONS (Continued)
The measure is intended to help users assess the System's funding status on a going concern basis, assess
progress made in accumulating sufficient assets to pay benefits when due, and make comparisons among
retirement systems and among employers. The System does not make separate measurements of assets and
pension benefit obligations for individual employers. Significant assumptions used to compute pension
contribution requirements are the same as those used to determine the standardized measure of the pension
obligation.
Ten year historical trend information showing the System's progress in accumulating sufficient assets to pay
benefits when due is presented in the System's June 30, 2012 Comprehensive Annual Financial Report.
NOTE 9 - LEASE AND CONSTRUCTION AGREEMENTS
In June 1999, the District entered into a lease and construction agreement with Sprint Spectrum, L.P. (SSLP)
for an initial five-year term. The District agreed to allow SSLP to construct a certain communications tower on
a portion of the District's property. Upon completion of the construction of the tower, SSLP agreed to transfer
title to the tower and all related rights to the District. Upon title transfer, SSLP would lease such tower space to
maintain and operate at SSLP's sole expense a personal communication service system facility. In
consideration of this arrangement, the District agreed to charge an annual rent of$10,800. Such annual rent
was waived for the initial term and for four additional terms of five years each since SSLP paid for all
construction costs associated with construction of the tower.
In August 2000, the District entered into a lease agreement with Omnipoint Holdings, Inc., presently T-Mobile
USA, Inc. ("T-Mobile"), for an initial five-year period. The District agreed to lease tower antenna space located
11 at the Golden Gate Fire Station to T-Mobile. As consideration for this arrangement, T-Mobile agreed to pay the
District annual rent of$22,800 plus applicable sales tax. This lease agreement has a renewable clause for
four additional terms of five-years each with certain defined annual rent adjustments. The lease was renewed
for an additional term with a 20% increase during fiscal year 2005, resulting in an annual rental payment of
$27,360. This lease was renewed for a second additional term in fiscal year 2010. The rent was increased by
20%, resulting in an annual rental payment of$32,832 received by the District in August 2012.
In August 2000, the District entered into a lease and construction agreement with Verizon Wireless ("Verizon")
for an initial five-year term. The District agreed to lease to Verizon certain tower antenna space located at the
Golden Gate Fire Station. Pursuant to the agreement, Verizon agreed to pay to the District annual rent during
the initial five-year term of$16,800 plus applicable sales tax. As consideration separate from and in addition to
the mentioned annual rent, Verizon agreed to pay for the installation of VHF cabling in Station #71 costing
$50,000, in lieu of installing a certain shelter, generator and antennas as defined in the original agreement. At
September 30, 2001, such installation had been completed. This lease agreement has a renewable clause for
four additional terms of five-years each with certain defined annual rent adjustments. The lease was renewed
for an additional term with a 20% increase during fiscal year 2005, resulting in an annual rental payment of
$20,160. This lease was renewed for a second additional term in fiscal year 2010. The rent was increased by
20%, resulting in an annual rental payment of$24,192 received by the District in July 2012.
- 33 -
I
GOLDEN GATE FIRE CONTROL AND RESCUE DISTRICT
NOTES TO FINANCIAL STATEMENTS
SEPTEMBER 30, 2012
NOTE 9 - LEASE AND CONSTRUCTION AGREEMENTS (Continued)
In August 2005, the District entered into a communications site lease agreement related to the communications
. tower located at Golden Gate Fire Station #71 with Alltel Communications, presently known as Verizon, for an
initial five-year term. The lessee is granted five additional five-year renewal terms following the initial five-year
term. Pursuant to the agreement, Alltel agreed to pay the District monthly rent totaling $2,500 plus applicable
sales tax. The rent will be increased each year thereafter by four percent. A first amendment to the lease
agreement was entered into on December 11, 2008, in order to reduce the tenants rent. This amendment
commences on January 1, 2009, and expires on December 31, 2013. On January 1, 2009, the rent was
decreased to $2,200 per month. The rent shall be increased by 2% every anniversary thereafter. Alltel,
presently known as Verizon, will pay all utility charges applicable to the tower. In April 2011, the monthly rent
was increased an additional $556 per month due to improvements made to their antenna holdings on the
communication tower. The prior year monthly rent of$2,845 was increased by 2% to $2,902 in January 2012.
In September 2005, the District entered into a communications site lease agreement related to the
communications tower located at Golden Gate Fire Station #71 with Metro PCS for an initial five-year term.
T The lessee is granted five additional five-year renewal terms following the initial five year term. Pursuant to the
agreement, Metro PCS agreed to pay the District monthly rent totaling $2,500 plus applicable sales tax. The
rent will be increased each year thereafter by four percent. Metro PCS will pay all utility charges applicable to
the tower. The prior year monthly rent was increased by 4% to $3,290 in September 2012.
NOTE 10 - IMPLEMENTATION OF GASB STATEMENT NO. 45
The Governmental Accounting Standards Board has issued Statement No. 45, "Accounting and Financial
Reporting by Employers for Post-Employment Benefits Other Than Pensions." This Statement changes the
manner in which the District funds and records its post retirement benefit cost other than pension ("OPEB").
During 2010, the District implemented the standard and had to accrue and fund costs rather than fund them on
a pay-as-you-go basis. The District had less than 100 employees at September 30, 2010 and met the criteria
r for the simplified "Alternative Measurement Method", which excuses the District from obtaining an actuarial
L valuation for the post-employment benefit liability and allows the District to perform a simple present value
calculation.
The following significant assumptions and methods were used in updating the 2012 present value calculation
of the post-employment benefit liability under the "Alternative Measurement Method" for these retired chiefs:
a) Two participants in the program (retired chiefs), one receiving benefits for approximately 14 years and
the other receiving benefits for approximately 21 years;
b) Cost of benefits are approximately $261 per month for the first recipient and approximately $571 per
month for the second recipient;
c) Long-term growth rate estimated to equal long-term inflation estimate of approximately 3.0%;
' d) Estimated discount rate of 2% which is the yield on a 10-year Treasury security at September 30, 2012;
e) Discounted on a monthly basis.
f) Future healthcare coverage provided solely pursuant to COBRA was not included in the OPEB
1 valuation.
At September 30, 2012, total accrued insurance benefits-retired chiefs was $90,731, see Note 6.
1
- 34 -
GOLDEN GATE FIRE CONTROL AND RESCUE DISTRICT
NOTES TO FINANCIAL STATEMENTS
SEPTEMBER 30, 2012
NOTE 11 - TERMINATION BENEFITS
During the year ended September 30, 2010, the District adopted the buyout and separation resolution #10-3
("Early Retirement Incentive Package"). This permits the District to offer an Early Retirement Incentive
Package to all employees who were in the 15th year of service or greater in an effort to reduce the long term
operating expenses of the District. Eligible employees were allowed to make a one-time irrevocable decision
to accept the Early Retirement Incentive Package.
The Package offered one year's base salary and professional pay incentives, and payout of the balance of
accrued unused sick, vacation, and holiday pay where applicable. Additionally, each eligible employee that
• chose the Early Retirement Incentive Package would receive the same health insurance as bargaining unit
employees paid one hundred percent(100%) by the District for three (3) years from the beginning of each
employee's early retirement incentive package effective date. The District would also continue to provide life
insurance for the employee for twelve (12) months immediately following the employee's early retirement
incentive package effective date.
Each eligible employee selecting the early retirement incentive option could choose to receive the payout of
the base salary and professional incentives in one (1) lump sum payment, or to receive the amount bi-weekly
over twenty six (26) pay periods.
Four(4) District employees elected to accept the early retirement incentive package. One (1) of the four(4)
employees chose a single lump sum payment and the remaining three (3) chose to be paid incrementally over
twenty six (26) pay periods. The total cost of the termination benefits is estimated to be $477,628 which is
included in full in the salaries and benefits payable at September 30, 2010. Final payments relating to the
early retirement incentive package will occur during fiscal year 2013.
The estimated cost for fiscal years 2011, 2012, and 2013 is based on current rates for health and life insurance
coverage for 2011, with a 3.0% increase per year beginning in 2011 through 2012. In addition, we used an
annual discount rate of 3.2% (10-year Treasury security at September 30, 2010) to calculate the present value
of the termination benefit liability.
The estimated cost for the four(4) participants that elected to accept the early retirement incentive package
after adjusting for fiscal 2012 payment activity relating to the remaining one year(see Note 6) is as follows:
YEAR ENDED
SEPTEMBER 30, Amounts
2013 $ 53.837
- 35 -
17- _ _
GOLDEN GATE FIRE CONTROL AND RESCUE DISTRICT
NOTES TO FINANCIAL STATEMENTS
SEPTEMBER 30, 2012
NOTE 12 - FUND BALANCE DISCLOSURE
In accordance with GASB No. 54, the District classifies governmental fund balances (as applicable) as follows:
• Non-spendable - includes fund balance amounts that cannot be spent either because they are not in
spendable form or because of legal or contractual requirements (i.e., prepaid items)
• Restricted - includes fund balance amounts that are constrained for specific purposes which are
externally imposed by providers, such as creditors, lenders or amounts constrained due to
constitutional provisions or enabling legislation.
• • Committed - includes fund balance amounts that are constrained for specific purposes that are
internally imposed by the District through a formal action of the highest level of decision making
authority.
• Assigned - includes fund balance amounts that are intended to be used for specific purposes that are
neither considered restricted or committed. Fund balance may be assigned through the following: (1)
the District's Chief is authorized by the Commissioners to assign amounts for specific purpose as
denoted in the annual budget; (2) the Commissioners have authorized the District's Chief, in
coordination with the District's auditors, to recapture excess fund balance that isn't restricted or
committed.
• Unassigned - includes residual positive fund balance within the General Fund which has not been
classified within the other above mentioned
nexpenditures fund balance
negative balances for any governmental fund is exceed amounts restricted, committed, or
assigned for those specific purposes.
p
The District uses restricted amounts to
be spent first when both restricted and unrestricted fund balance is
available unless there are legal documents and /or contracts that prohibit doing this, such as grant agreements
II requiring certain dollars spent. Additionally, the District would first use committed, then assigned, and lastly
unassigned amounts of unrestricted fund balance when expenditures are made, with the exception of the
emergency reserve established by the Commissioners. Under normal circumstances, the District would first
Ielect to utilize the Operating Reserve (Unassigned fund balance in the General Fund) before considering use
of its Emergency Reserve.
The District does not have a formal minimum f balance
ess andlcalculates targets Didtactuals to report the various
targeted reserve balances via the a budget process
results to the Commissioners annually.
I
( - 36 -
L
GOLDEN GATE FIRE CONTROL AND RESCUE DISTRICT
NOTES TO FINANCIAL STATEMENTS
` SEPTEMBER 30, 2012
1.-:
NOTE 12 - FUND BALANCE DISCLOSURE (Continued)
A schedule of the District's fund balances at September 30, 2012 is as follows:
MAJOR FUNDS
GENERAL SPECIAL TOTAL
FUND REVENUES FUNDS
Non-spendable $ 67,056 $ 0 $ 67,056
Restricted 121,080 54,612 175,692
I
Committed 0 0 0
Assigned:
Fiscal year start-up operations 1,478,000 0 1,478,000
' Construction loan reserve 334,596 0 334,596
- Capital and fleet reserves 190,000 0 190,000
Leave credits reserve 150,000 0 150,000
FRS reserves 110,000 0 110,000
GASB reserves 98,000 0 98,000
Other reserves 395,467 0 395,467
Total revenue and contingency reserves 2,756,063 0 2,756,063
IA
Unassigned 1,036,118 0 1,036,118
Total $ 3.980.317 $ 54.612 $ 4.034.929
I
NOTE 13 - SUBSEQUENT EVENTS
IIn preparing the financial statements, the District has evaluated events and transactions for potential
recognition or disclosure through January 11, 2013, the date that the financial statements were available to be
Iissued.
There was a subsequent event identified as follows:
On January 9, 2013, the District's Fire Chief gave his letter of resignation to be effective on February 10, 2013.
1 As a result, the District's Fire Chief exercised his option for severance payments as denoted in his Employment
Contract dated February 13, 2008 and based on certain District's pay policies pursuant to its 2011-2012
Administrative Handbook.
I
I - 37 -
PART II. REQUIRED SUPPLEMENTARY INFORMATION OTHER THAN MD&A
r
C
1
I
I
I
t
GOLDEN GATE FIRE CONTROL AND RESCUE DISTRICT
GOVERNMENTAL FUNDS
STATEMENT OF REVENUES, EXPENDITURES AND CHANGES
IN FUND BALANCES - BUDGET AND ACTUAL
FOR THE YEAR ENDED SEPTEMBER 30, 2012
GENERAL FUND
VARIANCE
WITH FINAL
BUDGET
BUDGETED AMOUNTS ACTUAL POSITIVE
ORIGINAL FINAL AMOUNT (NEGATIVE)
Revenues:
Ad valorem and county taxes $ 6,918,291 $ 6,918,291 $ 6,669,577 $ (248,714)
Impact and other fees 183,435 183,435 100,654 (82,781)
Interest and dividends 11,000 11,000 14,620 3,620
Tower lease and miscellaneous 3,109,470 3,109,470 168,469 (2,941,001)
Total Revenues 10,222,196 10,222,196 6,953,320 (3,268,876)
Expenditures
Current
Public safety:
Employee costs 5,774,010 5,774,010 5,634,449 139,561
Outside services 960,734 960,734 763,975 196,759
Materials and supplies 293,650 293,650 245,582 48,068
Reserves 2,765,542 2,765,542 0 2,765,542
Capital outlay 107,000 107,000 37,558 69,442)
Debt service:
Principal retirement 114,699 114,699 134,870 (20,171)
Interest and fiscal charges 206,561 206,561 187,860 18,701
Total Expenditures 10,222,196 10,222,196 7,004,294 3,217,902
Excess (deficiency) of revenues
over (under) expenditures 0 0 (50,974) (50,974)
Other financing sources (uses):
Transfers in (out) 0 0 0 0
Total other financing
sources and uses 0 0 0 0
Net change in fund balances $ 0 $ 0 (50,974) $ (50,974)
Fund Balances, September 30, 2011 $ 4,031,291
Fund Balances, September 30, 2012 $ 3,980,317
SPECIAL REVENUE FUND
VARIANCE
WITH FINAL
BUDGETED AMOUNTS BUDGET
ACTUAL POSITIVE
ORIGINAL FINAL AMOUNT (NEGATIVE)
� c $ 150,000 $ 150,000 $ 131 120 $ 0
6 (18,874)
0 0 55 55
0 0 0 0
150,000 150,000 131,181 (18,819)
r
1 0 0 0
0
0
0 0 0
0 0 0 0
I 0 0 0 0
0 0 0 0
12,596 12,596 12,596 0
137,404 137,404 137,404 0
150,000 150,000 150,000 0
0 0 (18,819) (18,819)
0 0 0 0
0 0 0 0
$ 0 $ 0 (18,819) $ (18.819)
$ 73,431
$ 54.612
i
The accompanying notes are an integral part of these financial statements.
i
- 38 -
PART III. OTHER REPORTS
Phillips Harvey
GROUP
Nathan A.Phillips,CPA
■ INDEPENDENT AUDITORS' REPORT ON INTERNAL Deborah L.Harvey,CPA
CONTROL OVER FINANCIAL REPORTING
AND ON COMPLIANCE AND OTHER MATTERS BASED Stephanie J.Feldman,CPA
ON AN AUDIT OF THE FINANCIAL STATEMENTS PERFORMED
IN ACCORDANCE WITH GOVERNMENT AUDITING STANDARDS Clara V.Guevara,CPA
Shannon Huber,CPA
Michelle L.Vastola,CPA
January 11, 2013
To the Board of Commissioners
GOLDEN GATE FIRE CONTROL AND RESCUE DISTRICT
Naples, Florida
We have audited the financial statements of the governmental activities and each major fund of GOLDEN
GATE FIRE CONTROL AND RESCUE DISTRICT (the "District") as of and for the year ended September 30,
2012, which collectively comprise the District's basic financial statements and have issued our report thereon
dated January 11, 2013. We conducted our audit in accordance with auditing standards generally accepted in
the United States of America and the standards applicable to financial audits contained in Government
Auditing Standards, issued by the Comptroller General of the United States.
Internal Control Over Financial Reporting
Management of GOLDEN GATE FIRE CONTROL AND RESCUE DISTRICT is responsible for establishing
and maintaining effective internal control over financial reporting. In planning and performing our audit, we
considered GOLDEN GATE FIRE CONTROL AND RESCUE DISTRICT'S internal control over financial
reporting as a basis for designing our auditing procedures for the purpose of expressing our opinion on the
financial statements, but not for the purpose of expressing an opinion on the effectiveness of GOLDEN GATE
FIRE CONTROL AND RESCUE DISTRICT'S internal control over financial reporting. Accordingly, we do not
express an opinion on the effectiveness of GOLDEN GATE FIRE CONTROL AND RESCUE DISTRICT'S
internal control over financial reporting.
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 combination of deficiencies, in
internal control such that there is a reasonable possibility that a material misstatement of the District's financial
statements will not be prevented, or detected and corrected on a timely basis.
Our consideration of internal control over financial reporting 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 financial
reporting that might be deficiencies, significant deficiencies, or material weaknesses. We did not identify any
deficiencies in internal control over financial reporting that we consider to be material weaknesses, as defined
above. However, we identified certain deficiencies in internal control over financial reporting, that we consider
to be significant deficiencies in internal control over financial reporting as denoted in recommendation #1 as
described in our recommendation letter dated January 11, 2013 on pages 43 through 48. 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.
Certified Public Accountants
- 39 -
801 Laurel Oak Drive,Suite 303, Naples, FL 34108
P 239 566 1600 I F 239 566 1901 I swflcnas.com
To the Board of Commissioners
GOLDEN GATE FIRE CONTROL AND RESCUE DISTRICT
January 11, 2013
Page 2
Compliance and Other Matters
As part of obtaining reasonable assurance about whether the District's financial statements are free of material
misstatement, we performed tests of its compliance with certain provisions of laws, regulations, contracts and
grant agreements, noncompliance with which could have a direct and material effect on the determination of
financial statement amounts. However, providing an opinion on compliance with those provisions was not an
objective of our audit, and, accordingly, we do not express such an opinion. The results of our tests disclosed
no instances of noncompliance or other matters that are required to be reported under Government Auditing
Standards.
We noted certain matters that we reported to management of GOLDEN GATE FIRE CONTROL AND RESCUE
DISTRICT, in a separate letter dated January 11, 2013, on page 43.
This report is intended solely for the information and use of the Board of Commissioners, management and
Auditor General and is not intended to be and should not be used by anyone other than these specified parties
H r
ILL ' HARV 446, P.A.
Certified Public ccountants
Naples, Florida
- 40 -
Phillips Harvey
GROUP
Nathan A.Phillips,CPA
Deborah L.Harvey,CPA
MANAGEMENT LETTER - LOCAL GOVERNMENT ENTITIES
Stephanie J.Feldman,CPA
Clara V.Guevara,CPA
January 11, 2013 Shannon Huber,CPA
Michelle L.Vastola,CPA
To the Board of Commissioners
GOLDEN GATE FIRE CONTROL AND RESCUE DISTRICT
Naples, Florida
Board of Commissioners:
We have audited the financial statements of the governmental activities and each major fund of GOLDEN
GATE FIRE CONTROL AND RESCUE DISTRICT as of and for the year ended September 30, 2012 which
comprise the District's basic financial statements and have issued our report thereon dated January 11, 2013.
We conducted our audit in accordance with United States generally accepted auditing standards and the
standards applicable to financial audits contained in Government Auditing Standards, issued by the
Comptroller General of the United States. We have issued our Independent Auditor's Report on Internal
Control over Financial Reporting and on Compliance and Other Matters based on an audit of the financial
statements performed in accordance with Government Auditing Standards. Disclosures in those reports, which
are dated January 11, 2013, 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 government entity audits performed in the State of Florida. Those rules (Section
10.554(1)(i)(1) require that we address in the management letter, if not already addressed in the auditor's
reports on internal controls and compliance or schedule of findings and questioned costs, whether findings
and/or recommendations reported in the preceding annual financial audit report have been corrected. There
were recommendations in the prior fiscal audit year 2008 that have not been implemented at this time, see
pages 43-48 and please refer to District's rebuttal letter for the their explanations.
As required by the Rules of the Auditor General (Section 10.554(1)(i)(2), the scope of our audit included 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 GOLDEN GATE FIRE CONTROL AND RESCUE DISTRICT
complied with Section 218.415, Florida Statutes.
The Rules of Auditor General (Section 10.554(1)(i)(3) require that we address recommendations to improve
the local governmental entity's internal controls. There was one significant deficiency in the year carried
forward from prior year as follows:
(1) Designate a qualified person to be responsible for implementation of all applicable Government
Accounting Standards Board's new rules and regulations on an annual basis.
Also, see our recommendation letter dated January 11, 2013 for additional general comments on pages 43
through 48.
- 41 -
Certified Public Accountants
801 Laurel Oak Drive,Suite 303, Naples, FL 34108
P 239 566 1600 I F2395661901 I swflcnac.rnm
To the Board of Commissioners
GOLDEN GATE FIRE CONTROL AND RESCUE DISTRICT
January 11, 2013
Page 2
The Rules of Auditor General (Section 10.554(1)(i)(4) require disclosure in the management letter of the
following matters if not already addressed in the auditor's reports on internal controls and compliance or
schedule of findings and questioned costs ,violations of provisions of contracts or grant agreements, or abuse
that occurred, or are likely to have occurred, that have an effect on the financial statement amounts that is less
than material but more than inconsequential. There were no instances to report in the current year.
The Rules of Auditor General (Section 10.554(1)(i)(5) for matters that are inconsequential effect on the
financial statements, considering both quantitative and qualitative factors the following may need to be
reported based on professional judgment: (a) violations of provisions of contracts and grant agreements; (b)
deficiencies in internal control that are not significant deficiencies. Our audit did not identified any matters
required to be disclosed other than as denoted in our recommendation letter dated January 11, 2013 at pages
43 through 48.
IAs required by the Rule of the Auditor General (Section 10.554(1)(i)(7)(a), the scope of our audit included a
review of the provisions of Section 218.503(1), Florida Statutes, regarding financial emergencies. In
connection with our audit, we determined that the GOLDEN GATE FIRE CONTROL AND RESCUE DISTRICT
is not in a state of financial emergency as a consequence of the conditions described in Section 218.503(1),
Florida Statutes.
As required by the Rules of the Auditor General (Section 10.554(1)(i)(7)(b), we determined that the annual
financial report for the GOLDEN GATE FIRE CONTROL AND RESCUE DISTRICT for the fiscal year ended
September 30, 2012, filed with the Department of Banking and Finance 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,
2012.
iAs required by the Rules of the Auditor General (Sections 10.554(i)(7)(c)(1) and 10.556(7)), we applied
financial condition assessment procedures. It is management's responsibility to monitor the District'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.
This report is intended solely for the information of the GOLDEN GATE FIRE CONTROL AND RESCUE
DISTRICT, the State of Florida Office of the Auditor General, the Florida Department of Banking and Finance,
and is not intended to be and should not be used by anyone other than these specified parties.
P4
'HILL P4
'HILL 'S ARV GRO , P.A.
Certified Public countants
Naples, Florida
- 42 -
I, Phillips Harvey
GROUP
• MANAGEMENT RECOMMENDATION LETTER Nathan A.Phillips,CPA
Deborah L.Harvey,CPA
• Stephanie J.Feldman,CPA
January 11, 2013 Clara V.Guevara,CPA
Shannon Huber,CPA
Michelle L.Vastola,CPA
Board of Commissioners
GOLDEN GATE FIRE CONTROL AND RESCUE DISTRICT
Naples, Florida
Commissioners:
In planning and performing our audit of the financial statements of the governmental activities and each major
fund of GOLDEN GATE FIRE CONTROL AND RESCUE DISTRICT as of and for the year ended September
30, 2012, in accordance with auditing standards generally accepted in the United States of America, we
considered GOLDEN GATE FIRE CONTROL AND RESCUE DISTRICT's internal control over financial
reporting (internal control) as a basis for designing our auditing procedures for the purpose of expressing our
opinions on the financial statements, but not for the purpose of expressing an opinion on the effectiveness of
the GOLDEN GATE FIRE CONTROL AND RESCUE DISTRICT's internal control. Accordingly, we do not
express an opinion on the effectiveness of the GOLDEN GATE FIRE CONTROL AND RESCUE DISTRICT'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 discussed below, we identified certain deficiencies in internal control that we consider to be
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 combination of deficiencies in
internal control, such that there is a reasonable possibility that a material misstatement of the District's financial
statements will not be prevented, or detected and corrected on a timely basis. We did not identify any
deficiencies in internal control that we consider to be material weaknesses.
A significant deficiency is a deficiency, or 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 following deficiencies in GOLDEN GATE FIRE CONTROL AND RESCUE DISTRICT's internal control to
be significant deficiencies:
- 43 - Certified Public Accountants
801 Laurel Oak Drive,Suite 303,Naples, FL 34108
P 239 566 1600 I F 239 566 1901 I swflcpas.com
GOLDEN GATE FIRE CONTROL AND RESCUE DISTRICT
January 11, 2013
rg Page 2
Fiscal 2008 Audit Recommendations Not Implemented Yet:
L, Significant Deficiency 1: District needs to designate a qualified individual to be responsible for
implementation of all applicable Government Accounting Standards Board's new rules and regulations
' on an annual basis.
The controller position is a key position for an organization but over the last few years the District has used a
variety of skill set individuals with certain accounting experience and knowledge. The District has experienced
many challenges as the District continues to grow and requires higher levels of accounting competencies.
Since the District reports in its financial statements on a basis in accordance with generally accepted
accounting principles and the District presently does not have on its staff a person with the accounting and
reporting skills and knowledge to apply generally accepted accounting principles in recording the District
financial transactions or preparing its financial statements, we recommend that the District hire a controller to
fulfill these duties and responsibilities and other items previously mentioned.
During our audit, we noted certain matters involving the internal control and other operational matters that are
presented for your consideration. This letter does not affect our report dated January 11, 2013 on the financial
statements of GOLDEN GATE FIRE CONTROL AND RESCUE DISTRICT. We will review the status of these
comments during our next audit engagement. Our comments and recommendations, all of which have been
discussed with appropriate members of management, are intended to improve the internal control or result in
other operating efficiencies. We will be pleased to discuss these comments in further detail at your
convenience, perform any additional study of these matters, or assist you in implementing the
recommendations. Our comments are summarized as follows:
General Comment 1: Consider the Commissioners as a Monitor of Internal Control.
It is very difficult to separate duties of key employees in smaller organizations. The District has been achieving
this by having the Treasurer take the lead to perform an oversight function. While the current Treasurer has
taken on this responsibility, it is inevitable that these positions will turn over from Commissioner to
Commissioner several times as the District proceeds into the future. It is our recommendation that the
Commissioners review the monitoring activities listed below and put procedures in place to ensure that these
oversight functions will continue to be performed.
1. Have the capability to understand and review the financial statements prepared in accordance with
auditing standards generally accepted in the United States of America.
2. Review with management the policies and procedures with respect to officers, key employees
(executive director, general manager, chief operating officer), expense accounts, and perks,
including excess benefit transactions, ensure written policies and procedures exist, etc.
3. Inquire of management, and the independent auditors about significant risks or exposures facing
the organization; assess the steps management has taken or proposes to take to minimize such
risks to the organization; and periodically review compliance with such steps.
- 44 -
IGOLDEN GATE FIRE CONTROL AND RESCUE DISTRICT
January 11, 2013
Page 3
I
General Comment 1: Consider the Commissioners as a Monitor of Internal Control (Continued).
4. Review key internal controls with management team, and understand how these controls will be
• tested, maintained and monitored during the year.
5. Report to the Commissioners on issues relating to internal controls, with emphasis on
management's ability to override controls and the monitoring and testing relating to this capacity.
6. Review all material written of communications between the independent auditors and
management, such as any management letter or schedule of unadjusted differences.
7. Periodically review the organization's code of conduct/ethics to ensure that it is adequate and up-
to-date.
8. Review procedures for the confidential, anonymous submission by employees of the organization
of concerns regarding questionable accounting or auditing matters (i.e. whistleblower policy).
General Comment 2: Utilize Cash Flow Statements and Cash Flow Projections as a planning tool.
Cash is essential to the success of any business. Cash flow considerations become even more important as
the economy struggles and businesses need to tighten all financial controls. A monthly cash-flow projection
helps to identify and eliminate deficiencies or surpluses in cash and to compare actual figures to past months.
When cash-flow deficiencies are found, business financial plans must be altered to provide more cash. When
excess cash is revealed, it might indicate excessive borrowing or idle money that could be invested. The
objective is to develop a plan that will provide a well-balanced cash flow plan for the current and coming
months.
General Comment 3: Increase awareness of antifraud culture.
Recent publicity has indicated that fraud is rapidly growing in the United States. A proven and effective
deterrent to fraud and abuse is the establishment of an antifraud culture within the organization. We would
suggest the following:
• Defining the role of the Commissioners as they relate to fraud and abuse
• Establish a written corporate code of conduct and implement a policy on misconduct
• Management and supervisory staff should be aware of fraud risks and indicators
• Internal controls should be given high priority
• Fraud-related policies should be enforced
• Reports of potential fraud and abuse should be investigated promptly
I
- 45 -
I
—.
I
GOLDEN GATE FIRE CONTROL AND RESCUE DISTRICT
January 11, 2013
I Page 4
General Comment 4: A fraud risk policy and assessment procedures are needed by the District.
r *
I A fraud risk policy would assist employees in knowing what to do if they should become aware of or suspect
fraud being committed against the District. The policy would also make it clear that employees are obligated
' and required to report fraud as dictated in the policy. It has been learned that often fraud is not reported
because no one asked them (the employees) about it. This policy should be pro-active and require the
employee not to wait until someone asks.
Assessment procedures should be developed by the District so that it can learn where it is vulnerable to fraud.
Upon learning of its vulnerabilities, the District could implement procedures and controls to help mitigate or
eliminate such risks. An example is the fact that background checks are performed on employees to reduce
the risk of hiring undesirable employees.
General Comment 5: Perform and document risk assessment of operations and develop mitigating
- controls to reduce identified risks.
- We recommend that the staff of District review their procedures for collecting funds, distributing monies, and
accounting for transactions in the accounting software to determine areas that are susceptible to fraud, abuse
or risk due to error. These procedures should be documented and mitigating procedures should be
implemented for all risk areas.
For example, establish an oversight committee to perform and document internal control inspections
throughout the year.
General Comment 6: Establish and adopt a formal written accounting policies and procedures manual.
The District's accounting policies and procedures have been informally established and perpetuated due to the
size of the Organization and the limited personnel. Although some efforts have been focused on documenting
certain aspects of the financial matters, we suggest that a formal, accounting policies and procedures manual
be adopted.
The principal advantages of such a manual are:
The promotion of consistency and uniformity in the treatment of accounting transactions,
Guidance and reference for all personnel performing accounting and oversight functions, and
The promotion of greater opportunity for constructive improvements of accounting procedures by the
periodic critical reviews of the existent procedures prescribed by a manual.
Use as a tool for monitoring critical accounting transaction cycles and to assess overall risks
associated with the District's operations.
J
- 46 -
I
GOLDEN GATE FIRE CONTROL AND RESCUE DISTRICT
January 11, 2013
Page 5
General Comment 6: Establish and ado•t a formal written accountin• .olicies and •rocedures manual
(Continued)
The accountin g policies and procedures manual should include, but not necessarily be limited to, the following:
Policy regarding receipts and disbursements; method to properly identify such transactions;
Policy regarding purchase of services and formal quotes and bids;
A list of accounting policies followed in the recording of transactions and preparation of the financial
statements;
The nature and source of all entries to accounts as well as supervisory required su
q p ry a pprovals;
Organization charts supplemented by job descriptions and employee performance evaluation
standards;
Exhibits of all accounting records, forms and reports with instructions for their preparation
distributions; p and
r
Narratives and flowcharts of accounting procedures; and
Due dates for financial statements and other reports.
General Comment 7: Establish a cross trainin• •ro•ram to handle critical •eneral le
financial
statements reporting d er functions and
statement
We noted that written documentation of the accounting procedures, for example, the general ledger accountin
functions: i.e., reconciling the general ledger and monthly financial reports, generating monthly financial g
statements is not currently in place. In the event the bookkeeper is absent for an extended period of time the
District's has no other adequately trained employee to handle such general ledger functions. Therefore, we
recommend implementing an accounting procedures manual (as noted above) to provide documentation for
accounting procedures, which would require explanation in order to be performed by an individual other than
the regular bookkeeper. In addition, we recommend certain designated individuals be trained to handle certain
critical general ledger functions to avoid an interruption in operations
General Comment 8: Develo• a corn•rehensive three ear fleet maintenance •Ian.
During our audit, we noted that the District had no formal comprehensive fleet maintenance lan to a ddress
adequate funding of new firefighter vehicles and related equipment and to ensure proper operation of such
p
assets are maintained and addressed. The idea of such a plan positions the District into being proactive;
managing its fleet maintenance costs, and helps mitigate unexpected problems and emergencies.
- 47 -
illimmml.•111....1111■1111/111=1111111MIMIMIllq---
GOLDEN GATE FIRE CONTROL AND RESCUE DISTRICT
January 11, 2013
Page 6
General Comment 9: A capitalization policy needs to be implemented and adhere to.
During our audit, we noted that the District has no formal policy for capitalization of property and equipment
purchases. This leaves the District open to the possibility that fixed assets will not be appropriately recorded,
depreciated, or reported for accounting purposes and in compliance with laws and regulations. Therefore, we
recommend that the District implement a written policy that would designate expenditures over a certain dollar
value and incompliance with required regulations to be capitalized and depreciated over the assets' useful
lives.
General Comment 10: Develop and adopt a methodology plan of funding reserves in the future.
As a means to maintain financial integrity of the District, adequate funding for contingencies and the annual
cash flow needs to be established. It is critical for any on-going organization to have the ability to provide for
emergencies and unanticipated financial needs. This especially true for the District given the volatile swings in
estimation of ad valorem taxes and impact fees and the overall depressed real estate market in Collier County.
Therefore, we recommend the District adopts a reserve funding methodology that carries in perpetual in the
future to mitigate the risks of these unexpected financial impacts.
r
We believe that the implementation of these recommendations will provide GOLDEN GATE FIRE CONTROL
CAND RESCUE DISTRICT with a stronger system of internal control and make its operations more efficient.
We will be happy to discuss the details of these recommendations with you and assist in any way possible with
their implementations. This report is intended solely for the information and use of the management and the
Board of Commissioners of GOLDEN GATE FIRE CONTROL AND RESCUE DISTRICT and is not intended to
I be and should not be used by anyone other than these specified parties. Thank you for the opportunity of
serving you.
I
t
HIL PS Or fAMP,.P.A.
Certified Public countants
i
i
I
- 48 -
•
`SVE GOLDEN GATE FIRE CONTROL AND RESCUE DISTRICT
14575 Collier Boulevard•Naples, FL 34119•(239) 348-7540•(239)348-7546 FAX
FIRE http://www.ggfire.com
RESCUE
May 8, 2013
Auditor General's Office
Local Government Audits/342
Claude Pepper Building, Room 401
111 West Madison Street ca r c'
Tallahassee, Florida 32399-1450
r-- rn
Dear Sir/Madam: `
5 ;r O
r—
The firm of Phillips Harvey Group recently did a 2011/2012 fiscal year audl't for_.the%0
Golden Gate Fire Control & Rescue District. The Fire District receivedF.he comlil�ted 4
audit report on May 7, 2013.
As a matter of record, the Golden Gate Fire Control & Rescue District intends to comply
with the Rules of the Auditor General Chapter 10.550.
As required by the Rules of the Auditor General (Section 10.554(g) (6) c. and 10.556),
the Golden Gate Fire Control & Rescue District intends to monitor its financial condition.
REGARDING PRIOR YEAR RECOMMENDATIONS NOT IMPLEMENTED
YET:
SIGNIFICANT DEFICIENCY 1: DISTRICT NEEDS TO DESIGNATE A QUALIFIED
INDIVIDUAL TO BE RESPONSIBLE FOR IMPLEMENTATION OF ALL
APPLICABLE GOVERNMENT ACCOUNTING STANDARDS BOARD'S NEW
RULES AND REGULATIONS ON AN ANNUAL BASIS. — Because of budget
constraints and the downsizing of administrative staff this has not been implemented.
The auditor listed ten different general comments for consideration. The District will
take these ten comments under advisement and work towards implementing them as
follows:
Our Family Protecting Yours
Auditor General's Office
Page 2
May 8, 2013
• General Comment 1: Consider the Commissioners as a Monitor of Internal
Control. — A Monitoring of Internal Controls policy was approved on 12/14/11.
The Board of Fire Commissioners assigned the task to its Secretary/Treasurer.
This new procedure was partially implemented during FY 2011/12.
• General Comment 2: Utilize Cash Flow Statements and Cash Flow Projections
as a planning tool. —One of the projects for FY 2012/13 is to develop a cash flow
statement to be provided to the fire commissioners in their monthly meeting
packet.
• General Comment 3: Increase awareness of antifraud culture. — Will work
towards developing a policy on this during the current fiscal year.
• General Comment 4: A fraud risk policy and assessment procedures are needed
by the District. - Will work towards developing a policy on this during the
current fiscal year. Currently background checks are required on all new hires.
• General Comment 5: Perform and document risk assessment of operations and
develop mitigating controls to reduce identified risks. - Will work towards
implementing over the next two years.
• General Comment 6: Establish and adopt a formal written accounting policies
and procedures manual. - A written policy has been started. Limited staff has
prevented its completion. Additional sections were worked on during FY
2011/12.
• General Comment 7: Establish a cross training program to handle critical general
ledger functions and financial statements reporting.. — An additional secretary
was hired and cross training is being done. This is an ongoing project with
additional functions being dealt with each year.
• General Comment 8: Develop a comprehensive three year fleet maintenance
plan. — Will work towards implementing, as time permits, over the next two
years.
• General Comment 9: A capitalization policy needs to be implemented and adhere
to. — Will work towards developing a policy on this during the current fiscal
year.
Auditor General's Office
Page 3
May 8, 2013
• General Comment 10: Develop and adopt a methodology plan of funding
reserves in the future. — Will work towards implementing, as time permits, over
the next two years.
The District tried but was unable to correct most of these general comments due to not
having enough administrative staff for dealing with ten general comments and needing to
concentrate most of our efforts operating the Fire District with less revenue to enable
keeping current firefighters employed. The administrative staff continued to decrease
during fiscal year 2011/2012, remaining staff members needed to fill the void.
All of these comments will be discussed further in future Commissioner Meetings to
assess follow-up action plans.
Sincerely,
David B. Stedman, Chairman
Board of Fire Commissioners
DBS/pm
C ,
rn
W
CD a) A a v 3' m C 0.C C
3 in �' N N m cn co g 6'Z p ES(D
--< _I Z T O '' CO N O 7 C 3 —
N 0-' — m 3 m 0 w (D m r `•D• o
v
N N O C p_ N < 0 CD A W CO H A <. O c a co
co o
n O CD o u, (D n a, CO C C° N Z d
w T G7 I (D <. g C A v • .� cD CD m m cD
O < CD 7 m m G) -1, a o c m 7 m
CD C CD Et—; O CD CD N 7 M T
C CD —xi C , CD 0 _
9. (n 7J C 0 7 C 7 -I CD
CD S'O CD 0 o D 0 n
an0 n CD C1 7
• (D
N n D O Q O
_ .4 3 ll D O
(D• CZ(D C
-' 7 CD n
K C * O 5 n -, P
O m 5(n cn 1 C N m C
X N S A n m ... C N =
<N (D — ?' N CD a)0 co N C—
7 C C S j (13 a -0 O' y,
C 0- 7 7 N O
N m a in "I n m a
S) a, o 5 _I Z Zp n m m nZi n co�
Q"CO N 0 CV •: N O -0 01 it CD 3 `< _�
X O 7-O TI N (D 3 3 (D v (D S2. 7 CD O
m s v v ° CD a' 0 n T a (•" 17 m K CDO 3
77100- 0) (u Am w m' n (D
m CO 3 7 0 D
��� N 7 �_ 3 CD CC Cr CAD C C-). O
? m CD < CO U m C n CD
J 3 (D a (@ n o 0) m ,
c �
(v
CD j
d m (s 0
-< O O 3
X N 3 y
ci 0
X o 7
a)C CO Q > > C CDT T CD-p O �C1 Q C1 0 r w a > >
m m r-m o. (D M to
1p WO C co Z m (fl N (cD CD •N
mow o Cu o a al CD 0 m `<<' D.
m 3 " 3 c a n w
a n CD D 3 v o 0-
co a s o a c (D CD `D• ° (v 3
s) 3 a a Cr m m D
N
CD ON - (�' O N .�-r
0 W (n pCj O C1 (a T C)
.0 .. m N
cc p O
_.._. :5 , U 3 =
Q t :Qt J �• OH
v 'i091800-1:2').0131q111102 ---11
(v
co
rn
I--,
O
-n
(n
W W W!W'W W C) a
co O C
C O O O O O O O
O7 7 N 3 .
fD
Q 92. co D? p
3 3 n o m m
O) n o CD
3
N N 7 N C N
N d CD :U x fD
o m a T a CD CD 0
N O g o_ O
No o CD CD
CD
w a C5 p
m o d v
G7 c co C <
7 N O g a-
3 C m
o m N
✓ < m'
co N
0
ci
CD
N
a) O) fD
co O co A Co cO' O� d
W N N O) W W ? —
O CNT) O Cr) - CT
<L
� N
W Ca C CCl.•
CD
b Cn N
CD O)
A
Cr
eT
n
A
9n
2.1:1
CD d
G CD
CD
d
A
0
K
m
m
0
CD.+
K
S'3
d
CD
A
N
0
1
n
0
c3
a
Co v rn 0
NJ O - ! O a
co o) W o
O) W A W CO
O -J N V N
O) O N
� V (J) (7■ (A V O) (Cl
N N N N 8
c1 O w C
O O O O
r- 141
fl
Q
cu
0 00 o o E
3 > > Q
0 0 0 0 c y
✓ a C
0 0 O -0 (D
N m m -o CD CD
r Q 7 m m CA
d m g CD z 0,5 '°— CD
In 0
(A) CD
'< 0 Z
CD 8
N N O
6) N .�
N
N
Gf
CD
o w o w
rvo
A N V (O A CD
N v in N A —
A O 01 (.71 V (0
N in
< A N
fD
O o C GI
O 0
0
CD
rt
m
a.
m
a
m
rt
m
rt
CD
I
7
CD et
n
Ao)
0
-1
2
Cy
° O
0
CU
la
rt
(D V cn O
w (n v w o w 5i
O A N.�I (O A
lJl 01 r �W V (O