Year End 09/30/12 Independent AuditNORTH NAPLES FIRE CONTROL
AND RESCUE DISTRICT
BASIC FINANCIAL STATEMENTS
TOGETHER WITH REPORTS OF
INDEPENDENT AUDITOR
YEAR ENDED
SEPTEMBER 30, 2012
TABLE OF CONTENTS
Pa e s
INDEPENDENT AUDITOR'S REPORT ................................. ............................... 1 -3
MANAGEMENT'S DISCUSSION AND ANALYSIS (MD &A) .... ............................... i -xii
BASIC FINANCIAL STATEMENTS
GOVERNMENT -WIDE FINANCIAL STATEMENTS:
Statement of Net Assets .................................................... ............................... 4
Statement of Activities ..................................................... ............................... 5'
FUND FINANCIAL STATEMENTS:
Governmental Funds:
BalanceSheet .............................................................. ...............................
Reconciliation of the Balance Sheet of Governmental Funds
to the Statement of Net Assets ......................................... ............................... 7
Statement of Revenues, Expenditures and Changes
inFund Balance .......................................................... ............................... 8
Reconciliation of the Statement of Revenues, Expenditures and Changes
in Fund Balance of Governmental Funds to the Statement of Activities ........................ 9
Fiduciary Fund - Firefighters' Pension Plan:
Statement of Fiduciary Net Assets ....................................... ............................... 10
Statement of Changes in Fiduciary Net Assets ........................ ............................... 11
NOTES TO THE FINANCIAL STATEMENTS .......................... ............................... 12 -54
REQUIRED SUPPLEMENTARY INFORMATION OTHER THAN MD &A
BUDGET TO ACTUAL COMPARISON - MAJOR FUNDS (General and Special Revenue Funds)
Statement of Revenues, Expenditures and Changes in Fund Balance - Budget and Actual -
General Fund - Summary Statement .................................... ...............................
55
Statement of Revenues, Expenditures and Changes in Fund Balance - Budget and Actual -
General Fund - Detailed Statement ...................................... ...............................
56 -58
Statement of Revenues, Expenditures and Changes in Fund Balance - Budget and Actual -
Impact Fee Fund - Summary Statement ................................. ...............................
59
Statement of Revenues, Expenditures and Changes in Fund Balance - Budget and Actual -
Impact Fee Fund - Detailed Statement
60
BUDGET TO ACTUAL COMPARISON - OTHER NON -MAJOR GOVERNMENTAL FUNDS
Special Revenue Funds:
Statement of Revenues, Expenditures and Changes in Fund Balance - Budget and Actual -
Inspection Fee Fund - Summary Statement ......................... ...............................
61
Statement of Revenues, Expenditures and Changes in Fund Balance - Budget and Actual -
Inspection Fee Fund - Detailed Statement ........................... ...............................
62 -63
TABLE OF CONTENTS (CONTINUED)
Page(s)
ADDITIONAL REPORTS OF INDEPENDENT AUDITOR
Independent Auditor's Report on Internal Control
over Financial Reporting and on Compliance and Other
Matters Based on an Audit of Basic Financial
Statements Performed in Accordance with Government Auditing Standards ....................... 65 -65
Independent Auditor's Report to Management ............................. ............................... 66 -68
Management's Response to Independent Auditor's Report to Management ........................... Exhibit
TUSCAN
& Company, PA
;rtified Public Accountants & Consultants
Affiliations
Florida Institute of Certified Public Accountants
American Institute of Certified Public Accountants
INDEPENDENT AUDITOR'S REPORT
Board of Commissioners
North Naples Fire Control and Rescue District
1885 Veterans Park Drive
Naples, Florida 34109 -0492
Private Companies Practice Section
Tax Division
We have audited the accompanying basic financial statements of North Naples Fire Control. and
Rescue District (the "District ") as of September 30, 2012 and for the year then ended. These
basic financial statements are the responsibility of the District's management. Our responsibility is
to express an opinion on these basic financial statements based on our audit. We did not audit the
financial statements of North Naples Fire Control and Rescue District Firefighters' Pension Fund
( "Pension Fund "), which represent 100% of the assets, liabilities and net assets as well as 100% of
the revenue and expenses of the District's Fiduciary Fund. Those financial statements were
audited by other auditors whose report thereon has been furnished to us, and our opinion, insofar
as it relates to the amounts included for North Naples Fire Control and Rescue District
Firefighters' Pension Trust Fund, is based on the report of the other auditors.
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 of America. Those
Standards require that we plan and perform the audit to obtain reasonable assurance about
whether the basic financial statements are free of material misstatement. An audit includes
examining, on a test basis, evidence supporting the amounts and disclosures in the basic financial
statements. An audit also includes assessing the accounting principles used and significant
estimates made by management, as well as evaluating the overall basic financial statement
presentation. We believe that our audit provides a reasonable basis for our opinion.
In our opinion, based on our audit and the report of other auditors, the basic financial statements
referred to above present fairly, in all material respects, the financial position of North Naples Fire
Control and Rescue District as of September 30, 2012, and the results of its operations for the
year then ended in conformity with accounting principles generally accepted in the United States of
America.
INTEGRITY ......... SERVICE ......... EXDERIENCEO
12621 World Plaza Lane, Building 55 • Fort Myers, FL 33907 • Phone: (239) 333 -2090 • Fax: (239) 333 -2097
Board of Commissioners
North Naples Fire Control and Rescue District
Page 2
In accordance with Government Auditing Standards, we have also issued our report dated
February 14, 2013, on our consideration of the District's internal control over financial reporting and
our tests of its compliance with certain provisions of laws, regulations, contracts, grants, and other
matters. The purpose of that report is to describe the scope of our testing of the internal control
over financial reporting and compliance and the results 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.
Accounting principles generally accepted in the United States of America require that the
management's discussion and analysis (MD &A) on pages i -viii 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
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.
Our audit was conducted for the purpose of forming an opinion on the basic financial statements
that collectively comprise the North Naples Fire Control and Rescue District's financial statements.
The required supplementary information other than MD &A - budgetary comparison information is
presented for purposes of additional analysis and is not a required part of the basic financial
statements. Such information is the responsibility of management and was derived from and
relates directly to the underlying accounting and other records used to prepare the basic financial
statements. The information has been subjected to the auditing procedures applied in the audits of
the basic financial statement and certain additional procedures, including comparing and
reconciling such information directly to the underlying accounting and other records used to
prepare the financial statements or to the basic financial statements themselves, and other
additional procedures in accordance with auditing standards generally accepted in the United
States of America. In our opinion, the required supplementary information other than MD &A -
budgetary comparison information is fairly stated in all material respects in relation to the financial
statements as a whole.
Board of Commissioners
North Naples Fire Control and Rescue District
Page 3
The Exhibit - Management's Response to Independent Auditor's Report to Management, is not
a required part of the financial statements but is required by Government Auditing Standards and
State of Florida Chapter 10.550 "Rules of the Auditor General ". Such information has not
been subjected to the auditing procedures applied in the audit of the financial statements and,
accordingly, we do not express an opinion or provide any assurance on it.
,NIA& I ?, 4 .
TUSCAN & COMPANY, P.A.
Fort Myers, Florida
February 14, 2013
MANAGEMENT'S DISCUSSION
AND ANALYSIS
(MD &A)
Management's Discussion and Analysis
of Financial Statements FYE September 30, 2012
This Discussion and Analysis of the North Naples Fire Control & Rescue District's ( "The
District ") basic financial statements is provided to assist the reader in understanding the
District's financial activities and significant changes in ending financial position for the
fiscal year ended September 30, 2012. The District implemented the requirements of
GASB Statement #34 for the fiscal year ended September 30, 2004. This Statement
dramatically changed the District's annual reporting requirements, as well as the financial
statement format and presentation.
Contained within are the basic financial statements, consisting of the government -wide
financial statements, governmental fund financial statements and notes to the financial
statements. This Discussion and Analysis will also provide an analytical overview of
these statements, including comparisons of the District's financial position at September
30, 2012 versus September 30, 2011.
District Highlights
1. At the conclusion of fiscal year 2012, the District's assets exceeded its liabilities,
resulting in net assets of $33,679,420 as compared to net assets at September 30,
2011 of $34,187,500.
2. The District's total net assets decreased $508,080 during fiscal year 2012, as
compared to a decrease of $2,970,305 in total net assets during fiscal year 2011.
3. The District had $11,081,782 of unrestricted net assets at September 30, 2012,
that can be used to meet the District's ongoing obligations, as compared to
$11,193,272 at September 30, 2011. The amount of unrestricted net assets
decreased by $111,490.
4. Total revenues on the government -wide funds basis decreased, $572,794 or 2
percent, in comparison to the prior year.
5. Total expenses on the government -wide basis decreased $3,035,019, or 11
percent, in comparison to the prior year.
Government -wide Financial Statements
Government -wide financial statements (Statement of Net Assets and Statement of
Activities found on pages 4 and 5) are intended to allow a reader to assess a
government's operational accountability. Operational accountability is defined as the
extent to which the government has met its operating objectives efficiently and
effectively, using all resources available for that purpose, and whether it can continue to
meet its objectives for the foreseeable future. Government -wide financial statements
concentrate on the District as a whole and do not emphasize fund types.
The Statement of Net Assets (page 4) presents information on all of the District's assets
and liabilities, with the difference between the two reported as net assets. The District's
capital assets are included in this statement and reported net of their accumulated
depreciation.
The Statement of Activities (page 5) presents revenue and expense information showing
how the District's net assets changed during the fiscal year. Both statements are
measured and reported using the economic resource measurement focus (revenues and
BJB/bb 3 -25 -13
expenses) and the accrual basis of accounting (revenue recognized when earned and
expense recognized when incurred).
Governmental Fund Financial Statements
The accounts of the District are organized on the basis of governmental funds, each of
which is considered a separate accounting entity. The operations of each fund are
accounted for with a separate set of self - balancing accounts that comprise its assets,
liabilities, fund equity or retained earnings, revenues and expenditures. Government
resources are allocated to and accounted for in individual funds based upon the purpose
for which they are to be spent and the means by which spending activities are controlled.
Governmental fund financial statements (found on pages 6 and 8) are prepared on the
modified accrual basis using the current financial resources measurement focus. Under
the modified accrual basis of accounting, revenues are recognized when they become
measurable and available as net current assets.
Notes to the Financial Statements
The notes to the financial statements explain in detail some of the data contained in the
preceding statements and begin on page 12. These notes are essential to a full
understanding of the data provided in the government -wide and fund financial statements.
Government -Wide Financial Analysis
The government -wide financial statements are designed so that the user can determine if
the District's financial condition is better or worse than the prior year.
The following is a Condensed Summary Statement of Net Assets for the District
(Primary Government) at September 30, 2012 and 2011:
Summary Statement of Net Assets
September 30
Assets: 2012 2011
Current and Other Assets $15,400,683 $15,817,903
Capital Assets 22,572,919 22,994,228
Total Assets $37,973,02 38.812.131
Liabilities:
Current Liabilities $1,688,217 $ 2,474,542
Non - Current Liabilities 2,605,965 2,150,089
Total Liabilities 4,294,182 4,624,631
Net Assets:
Invested in Capital Assets,
Net of Related Debt 22,572,919 22,994,228
Restricted — Inspection Fee Fund 24,719 -
Unrestricted 11,081,782 11,193,272
Total Net Assets 33,679,420 34,187,500
Total Liabilities and Net Assets $37,973,02 38,812.131
BJB/bb 3 -25 -13 ii
Current and other assets represent 41 percent of total assets at September 30, 2012, as
compared to 41 percent at September 30, 2011. Current assets at September 30, 2012 are
comprised of unrestricted cash balances of $8,848,246, restricted cash of $1,206,437,
unrestricted investments of $5,019,563, due from other governments of $222,969, other
receivables of $26,935 and other assets of $76,533. The balances of unrestricted cash
represent amounts that are available for spending at the discretion of the Board of Fire
Commissioners of the District. Restricted cash balances are comprised of the impact fee
funds restricted for the purchase of capital assets, unspent inspections fee revenue
restricted to support the inspection of new construction, and funds received as donations
for the District's 50t` Anniversary in 2011.
The investment in capital assets, net of related debt, represent 59 percent of net assets at
September 30, 2012, as compared to 59 percent at September 30, 2011. These assets are
comprised of land, buildings, improvements, equipment, furniture, and vehicles, net of
accumulated depreciation, and the outstanding related debt used to purchase the assets.
The unrestricted net asset balance of $11,081,782 represents resources available for
spending at September 30, 2012.
Summary of Revenues, Expenses and Changes in Net Assets
For the Years Ended September
30, 2012 and September 30, 2011
Revenues:
2012
2011
General Revenues
Ad Valorem Taxes
$21,551,797
$22,312,426
Charges for Services
532,305
618,360
Program Revenues
Grants
34,376
30,750
Miscellaneous
Impact Fees
412,970
142,361
Investment Earnings
147,221
173,073
Gain (Loss) on Disposition of
Capital Assets
17,672
(1,596)
Other
225,519
219,280
Total Revenues
22,921,860
23,494,654
Expenses:
Public Safety —Fire/ Rescue Service
23,429,940
26,464,959
Increase (Decrease) in Net Assets
(508,080)
(2,970,305)
Net Assets - Beginning of Year
34,187,500
37,157,805
Net Assets -End of Year
$33,67 9.420
$34.187.500
BJB/bb 3 -25 -13 iii
The assessed value of the property within the District decreased 3 percent for the 2011-
2012 fiscal year as compared to the prior year's assessed value, resulting in a decrease in
Ad Valorem tax revenues. This is the fourth consecutive year that property values in the
District have decreased, resulting in a decrease in Ad Valorem revenue. The cumulative
reduction in property value for the 2008 -2009, 2009 -2010, 2010 -2011 and 2011 -2012
fiscal years resulted in a $5,505,981,773 reduction in taxable property value, and a 20
percent reduction in Ad Valorem revenue. The Board adopted a millage rate of 1 mil, or
$1.00 for every $1,000 of property value. This millage rate was 4 percent less than the
rolled back rate, or the taxing rate necessary to generate the same Ad Valorem revenue as
the 2010 -2011 fiscal year. Because the District is capped at a maximum millage rate of 1
mil, the Board could not adopt the rolled back rate.
Historically, the increase in Ad Valorem revenue resulting from the increase in property
value has been sufficient to provide adequate funds to support operational, capital and
reserve financial requirements in the District without increasing the millage rate.
However, the 2011 -2012 General Fund Budget reflects a decrease in Ad Valorem
revenue corresponding to the decrease in property value. As a result, it was anticipated
that reserves in the amount of $1,432,457 would be required to fund operations.
However, General Fund actual expenditures were less than those budgeted and revenue
was more than that budgeted; therefore, use of reserves was $174,944 which was
significantly less than originally anticipated.
The following chart identifies the change in appraised property values in the District and
the millage rate maintained by the District.
Property Values and Millage Rate Assessed
5.0000 r- $30,000,000,000
4.5000
4.0000
3.5000
3.0000
$25,000,000,000
$20,000,000,000
2.5000 1— 1 1 --F —i 1 —i - -- I 1—i— I 1- ---f $15,000,000,000
2.0000
1.5000
1.0000
0.5000
$10,000,000,000
$5,000,000,000
0.0000 2008 -2009 2009 -2010 2010 -2011 2011 -2012 $
Appraised Property Value $27,676,299,592 $25,187,603,194 $22,970,320,130 $22,170,317,819
f Millage Rate 0.9869 1.0000 1.0000 1.0000
BJB/bb 3 -25 -13 iv
Fund Balance — Governmental Fund Financial Statements
Staff has worked hard to meet the Board of Fire Commissioners' directive to maintain the
fund balance and cash reserve of the General Fund to solidify the District's financial
position. The total fund balance of the General Fund, 100 percent of which is assigned
reserves, was $13,751,629 at September 30, 2012. This fund balance represents a
decrease of $174,944 in the total fund balance of the General Fund at September 30,
2011.
In September of 2002, a comprehensive Five Year Plan for the District was developed.
This plan is reviewed and revised annually, just prior to preparation of the District's
annual budget. The Five Year Plan has become an integral tool to assist in the
identification of the financial needs for the future of the District, and as such, has assisted
the Board of Fire Commissioners in establishing comprehensive assigned reserves to
financially provide for the identified needs of the District.
The fund balance of $13,751,629 for the fiscal year ended September 30, 2012, is
comprised of 100 percent of assigned reserves. In light of the current and forecasted
economic trends and accompanying decrease in property value, the Board has established
assigned reserves identified as necessary to fund operational activities of the District in
future years. These assigned reserves were created in an effort to address anticipated
revenue reductions in the 2012 -2013 and 2013 -2014 fiscal years.
Other reserves are assigned to accommodate the future financial needs of the District as
identified in the Five Year Plan as amended in September of 2012. While assigned
reserves have been established and maintained in accordance with anticipated future
needs of the District, it must be noted that the need may arise for the Board to unassign a
portion of these reserves to fund the District's operations should property values continue
to fall. The following General Fund Assigned Reserves were approved for the fiscal year
ended September 30, 2012, in coordination with the Five Year Plan and as a result of the
anticipated reduction in future General Fund Ad Valorem revenue:
Assigned Fund Balance
Amount
Operating Reserve — First Quarter
$ 6,500,000
Projected Deficit 12 -13
2,000,000
2013 -2014 Expenses over Revenue
1,546,460
ALS Equipment
226,344
Emergency Reserve
2,223,330
Fire Apparatus
1,074,595
SCBA Replacement
160,000
Station #46 Improvements
20,900
Total Assigned Reserves
These assigned reserves have been established by the Board of Fire Commissioners to
meet the future needs of the District. As indicated in the District's Five Year Plan, one
new station is anticipated to be operational within the next five years, with funds
allocated to initial permitting and planning expenditures for three other stations. Due to
the recent and dramatic decline in impact fees, and the anticipated revenue reduction
BJB/bb 3 -25 -13 v
resulting from decreasing property values, the Five Year Plan was revised to delay the
construction in full on these three other stations. While impact fees can fund the creation
of the infrastructure required for these stations, the staffing and maintenance must be
funded by the General Fund. These assigned reserves are also created to fund the
replacement of capital assets originally funded through impact fees.
Additionally, significant increases in health insurance, and other personnel and operating
expenses require that funds be set aside, or assigned, to prepare for the funding of future
expenditures. This is especially necessary in light of the current economic situation and
the impact of the decline in property values statewide, and the resulting revenue reduction
resulting from such decline.
As evidenced by the chart below, the District's General Fund fund balance has increased
$13,268,549 since 2002. While the growth in fund balance is significant, it is by no
means an unnecessarily high accumulation of funds. Not only has it become evident that
the District must be able to provide for operating and personnel expenses in the event of a
serious hurricane or other natural disaster, it has become essential for future planning to
ensure the financial stability of the District by increasing designated reserves to provide
for the future needs of the District in anticipation of revenue reductions. It is also
designed to allow for replacement of capital assets without a planned increase in millage.
It should also be noted that the 2011 -2012 fiscal year General Fund utilized $174,944 of
reserves to fund operations during the fiscal year due to the decline in property value and
accompanying decrease in Ad Valorem revenue. This is the second year since 2001 that
the District had to use reserves to fund operations. While significant reserves still
remain, it is by no means sustainable to continue to rely on reserves to fund operations.
BJB/bb 3 -25 -13 A
$18,000,000
$16,000,000
$14,000,000
$12,000,000
$10,000,000
$8,000,000
$6,000,000
$4,000,000
$2,000,000
General Fund
Fund Balance 2002 - 2012
2002 2003 2004 2005 2006 2007 2008 2009 2010 2011 2012
Impact Fees
Actual impact fees received for the year ended September 30, 2012 was $360,328, a
decrease of $36,925, or 9 percent, as compared to the prior fiscal year. However, because
of the decline in impact fees over the course of the last few fiscal years, the amount
received exceeded budgeted impact fees by $60,328, or 20 percent. Staff continues to
conservatively estimate impact fee revenue for future years and limit planned impact fee
expenditures due to the trend in declining revenue.
The Board of Fire Commissioners recognized that the growth in the District was
significant in the late 1990s and early 2000s, and anticipated the District would reach a
point where the growth and resulting impact fees would substantially decrease.
Therefore, the Five Year Plan has reflected decreasing impact fees. However, the decline
in impact fees occurred much quicker and at a more substantial rate than originally
anticipated. As a result, the Five Year Plan has been amended to reflect the reduction in
receipts.
BJB/bb 3 -25 -13
Vll
Inspection Fees
Inspection fee revenue for the year ended September 30, 2012 was $428,911 and
represents a decrease of $73,396 or 15 percent as compared to revenue in the prior fiscal
year, as compared to an increase of $11,035, or 2 percent over the inspection fee revenue
for fiscal year 2011 vs. 2010. These inspection fees are received by the District for
inspections performed on new construction, and are therefore a function of the number of
new structures built and completed in the District. Following three consecutive years of
decreasing inspection fee fund receipts, the 2009 -2010 fiscal year was the first year to
recognize an increase in inspection fees revenue since the fiscal year ended September
30, 2006. The trend continued in the fiscal year ended 2011, with inspection fees
received increasing as compared to the prior fiscal year, but then again declined in 2012.
The overall reduction in fees since 2006 has resulted in the inability of the revenues of
the fund to support the full operating budget. As a result, the General Fund has provided
financial assistance to support the Inspection Fee Fund. This fund will continue to
require close monitoring in the future to determine if the General Fund will be required to
continue to provide financial assistance to support the Inspection Fee Fund operating
costs.
Budgetary Highlights
Budget versus actual comparisons are reported in the required supplementary information
other than management's discussion and analysis on pages 55 through 63. General Fund
expenditures were less than those budgeted, with Personnel Expenditures reflecting
$1,140,162 or 6 percent less than budgeted, Operating Expenditures reflecting $88,715 or
3 percent less than budgeted, and Capital Outlay reflecting $16,785 or 10 percent less
than budgeted. Differences between the final amended budget and actual expenditures in
the General Fund were largely due to fewer non - essential purchases being made, and the
serious effort exerted to control expenditures as tightly as possible faced with current and
anticipated decrease in property (Ad Valorem) tax revenue.
The amendments to General Fund revenue were necessary to reflect an increase in Ad
Valorem tax revenue received resulting in collection above the 95 percent subject to
budget requirements and to reflect a reduction in interest revenue earned due to the
decline in interest rates available on the District's Certificates of Deposit.
The amendments to the General Fund expenditures were a result of several factors.
Budgeted personnel expenses were decreased by $69,000 due to a reduction in
operational overtime resulting from the hiring of three replacement firefighters to address
staffing shortages and offset overtime expenditures. Budgeted capital expenses were
increased by $69,000 to reflect the required but unanticipated replacement of bunker gear
which failed safety inspection. It should be noted that amendments to reallocate General
Fund expenditures resulted in no increase to expenses, and actual General Fund
expenditures were still $1.2 million under budget.
BJB/bb 3 -25 -13 viii
Capital Assets
Non - depreciable capital assets include land and construction in progress. Depreciable
assets include buildings, improvements other than buildings, equipment, furniture and
vehicles.
The following is a schedule of the District's capital assets as of September 30, 2012 and
2011.
Capital Assets
September 30:
Capital Assets
2012
2011
Land
$11,182,814
$11,182,814
Construction in Progress
1,102,570
720,146
Total Capital Assets not Depreciated
12,285,384
11,902,960
Buildings
12,428,865
12,428,865
Vehicles
7,165,848
7,698,797
Office Equipment
692,437
706,380
Equipment & Machinery
2,725,609
2,741,134
Total Capital Assets Being Depreciated
23,012,759
23,575,176
Accumulated Depreciation
Buildings
( 4,561,857)
( 4,157,543)
Vehicles
( 5,604,642)
( 5,811,504)
Office Equipment
(486,961)
( 456,120)
Equipment & Machinery
2 071 764
( 2,058,741)
Total Accumulated Depreciation
(12,725,224)
(12,483,908)
Total Capital Assets being Depreciated,
10,287,535 11,091,268
Net
Capital Assets — Net of Depreciation 22,572,919 22,994,228
Less: Related Debt - -
Net Assets Invested in Capital Assets
Net of Related Debt $22,572,919 $22,994,228
The purchases of capital assets were significantly reduced during the 2011 -2012 fiscal
year in an effort to control costs. Only those assets deemed absolutely necessary were
purchased. Significant capital asset purchases made during the fiscal year ended
September 30, 2012 include:
1. Medical equipments utilized by the District's paramedics performing Advanced
Life Support ( "ALS ") services totaling $14,128;
BJB/bb 3 -25 -13 1X
2. Replacement computers and associated computer hardware for use in the
apparatus totaling $44,100;
3. Hurst hydraulic tools totaling $10,560;
4. New Squad quick response vehicle totaling $67,789;
5. 49 Sets of replacement Bunker Gear totaling $90,585; and
6. Payment of architecture, engineering, permitting and site preparation costs and
fees for future Station #48 located on Livingston Road in the amount of $382,485
from the Impact Fee Fund.
For additional information on the District's capital assets, see Note E on pages 30 and 31.
Debt Administration
As of September 30, 2012, the District had long term obligations of $2,669,847, as
compared to $2,820,261 at September 30, 2011, a decrease of $150,414 or 5 percent.
That debt consists of:
1. Compensated absences (accrued vacation liability) in the amount of $1,917,976,
as compared to $1,602,209 at September 30, 2011. The increase in this liability is
due to hourly rate changes resulting from promotions to replace vacated positions
due to retirements and the Early Retirement Incentive programs, and a Collective
Bargaining Agreement one year provision providing paid days off.
2. Termination benefits in the amount of $112,333, as compared to $777,131 at
September 30, 2011. These termination benefits consist of health, dental and
vision insurance benefits through 2012 for those employees participating in the
District's first early retirement incentive program, and health insurance benefits
payable in 2012, 2013 and 2014 related to the second early retirement incentive
program.
3. OPEB obligation of $639,538, representing post employment health insurance
obligations pursuant to GASB No. 45.
Economic Facts and Next Year's Budget Millage Rates
The following factors were taken into consideration when the budget for the fiscal year
ending September 30, 2013 was prepared:
1. Appraised taxable property values increased by $68,433,215, or less than 1
percent for tax year 2012 (FY2013) as compared to a decrease of 3 percent in
2011. This is the first year since the multi -year decline in taxable property value
that the property value in the District has increased, although only slightly. The
cumulative effect of the last five years' property value has resulted in an
anticipated reduction in Ad Valorem revenue of approximately $6.6 million, or 23
percent since 2008. Staff did not anticipate any increase in taxable property value
for the 2012 -2013 fiscal year and, under the Board's direction, has worked hard to
control expenditures and maintain the level of service without depleting reserves.
Preliminary estimates indicate the property value in Collier County is expected to
increase at least 3 percent for the 2013 year. Historically, the District has faired
far better than the County as a whole, so it is anticipated that new growth within
the District will offset any decline in property value, so value should either remain
BJB/bb 3 -25 -13 x
unchanged in a worse -case scenario for the 2013 -2014 fiscal year, or might even
realize up to a 3 percent increase in a best case scenario. The District must
continue to consider ways to fund operating expenses without reducing the level
of service and without depleting reserves. Staff will continue to monitor financial
projections to provide the Board with current and updated information regarding
the future financial needs of the District.
2. The District did not increase its millage rate from 1 mill ($1.00 for each $1,000
of appraised property value) for the fiscal year ending September 30, 2013. The
rolled -back millage rate, that is, the rate that would need to be levied to generate
the same revenue for the 2012 -2013 fiscal year as was generated during the 2011-
2012 fiscal year, was not levied because it exceeded the maximum millage rate
the District is authorized to levy pursuant to its enabling act. The District's
millage cap, combined with declining property values, makes it impossible to
generate the same revenue as in prior years. Therefore, the District must fund
operations with less revenue, while continuing to attempt to maintain service
levels.
3. The District had planned to open Stations #48, #49, #410 and #411 within the
next two to five years. However, due to the reduction in revenue resulting from
the anticipated and realized decline in property value, and the reduction in impact
fees received, all construction of new station sites, except for the site preparation
for Station #48, has been halted.
4. No new positions are provided for in the General Fund Budget for 2012 -2013.
Thirteen employees participated in the early retirement incentive program
established by the Board for the 2008 -2009 fiscal year, resulting in 9 shift
positions being vacated. An additional seven employees participated in a second
early retirement incentive program offered between August 1, 2010 and July 31,
2011. This resulted in an additional 5 shift positions being vacated. In May of
2011, three replacement firefighters were hired to address the 14 shift positions
vacated as a result of the two early retirement incentive programs. In August of
2012, three more replacement firefighters were hired, and another three in
November of 2012 to address another three vacancies resulting from retirements.
Staff continues to monitor the cost benefit of overtime versus filling replacement
positions .
5. Capital purchases have been limited to only those essential items, including the
replacement of fire equipment as needed in the total amount of $25,000, the
purchase of replacement protective equipment in the amount of $51,697, the
replacement of computers for the apparatus used to provide call response
information in the total amount of $15,000, and station improvements in the
amount of $20,000.
Request for Information
This financial report is designed to provide the reader an overview of the District.
Questions regarding any information provided in this report should be directed to: Becky
Bronsdon, Assistant Chief of Administrative Services, North Naples Fire Control &
Rescue District, 1885 Veteran's Park Drive, Naples, FL 34109, 239 -597 -3222, e-mail:
bbronsdon(2northnaplesfire.com.
BJB/bb 3 -25 -13 xi
NORTH NAPLES FIRE CONTROL AND RESCUE DISTRICT
STATEMENT OF NET ASSETS
September 30, 2012
Noncurrent assets:
Capital assets:
Land 11,182,814
Construction in progress 1,102,570
Depreciable buildings, equipment, and vehicles
(net of $12,725,224 accumulated depreciation) 10,287,535
Total noncurrent assets 22,572,919
TOTAL ASSETS $ 37,973,602
LIABILITIES
Current liabilities:
Accounts payable and accrued expenses $ 650,151
Contract deposits 7,500
Deferred revenue 966,684
Current portion of long -term obligations 63,882
Total current liabilities 1,688,217
Noncurrent liabilities:
Noncurrent portion of long -term obligations 2,605,965
TOTAL LIABILITIES 4,294,182
NET ASSETS
Invested in capital assets, net of related debt 22,572,919
Restricted 24,719
Unrestricted 11,081,782
TOTAL NET ASSETS 33,679,420
TOTAL LIABILITIES AND NET ASSETS $ 37,973,602
The accompanying notes are an integral part of this statement.
Page 4 of 68
Governmental
Activities
ASSETS
Current assets:
Cash and cash equivalents
$ 8,848,246
Restricted cash and cash equivalents
1,206,437
Investments
5,019,563
Due from other governments
222,969
Other receivables
26,935
Other assets
76,533
Total current assets
15,400,683
Noncurrent assets:
Capital assets:
Land 11,182,814
Construction in progress 1,102,570
Depreciable buildings, equipment, and vehicles
(net of $12,725,224 accumulated depreciation) 10,287,535
Total noncurrent assets 22,572,919
TOTAL ASSETS $ 37,973,602
LIABILITIES
Current liabilities:
Accounts payable and accrued expenses $ 650,151
Contract deposits 7,500
Deferred revenue 966,684
Current portion of long -term obligations 63,882
Total current liabilities 1,688,217
Noncurrent liabilities:
Noncurrent portion of long -term obligations 2,605,965
TOTAL LIABILITIES 4,294,182
NET ASSETS
Invested in capital assets, net of related debt 22,572,919
Restricted 24,719
Unrestricted 11,081,782
TOTAL NET ASSETS 33,679,420
TOTAL LIABILITIES AND NET ASSETS $ 37,973,602
The accompanying notes are an integral part of this statement.
Page 4 of 68
NORTH NAPLES FIRE CONTROL AND RESCUE DISTRICT
STATEMENT OF ACTIVITIES
Year Ended September 30, 2012
Governmental
Activities
EXPENSES
Governmental Activities
Public Safety - Fire Protection
Personnel services $ 19,345,440
Operating expenses 3,044,074
Depreciation 1,040,426
Interest and fiscal charges -
TOTAL EXPENSES - GOVERNMENTAL ACTIVITIES 23,429,940
PROGRAM REVENUES
Charges for services 532,305
Operating grants and contributions 34,376
NET PROGRAM EXPENSES 22,863,259
GENERAL REVENUES
Ad Valorem taxes 21,551,797
Impact fees 412,970
Interest 147,221
Gain on disposition of capital assets 17,672
Other 225,519
TOTAL GENERAL REVENUES 22,355,179
DECREASE IN NET ASSETS (508,080)
NET ASSETS - Beginning of the year 34,187,500
NET ASSETS - End of the year $ 33,679,420
The accompanying notes are an integral part of this statement.
Page 5 of 68
NORTH NAPLES FIRE CONTROL AND RESCUE DISTRICT
Page 6 of 68
BALANCE SHEET - GOVERNMENTAL FUNDS
September 30, 2012
Total
General Impact Fee Inspection Fee
Governmental
Fund Fund
Fund
Funds
ASSETS
Cash and cash equivalents
$ 8,848,246 $ - $
-
$ 8,848,246
Restricted cash and cash equivalents
3,668 972,427
230,342
1,206,437
Investments
5,019,563 -
-
5,019,563
Due from other governments
163,575 24,085
35,309
222,969
Due from other funds
274,067 -
-
274,067
Other receivables
26,935 -
-
26,935
Other assets
76,533 -
-
76,533
TOTAL ASSETS
$ 14,412,587 $ 996,512 $
265,651
$ 15,674,750
LIABILITIES AND FUND BALANCE
LIABILITIES
Accounts payable and accrued expenses $ 649,790 $ 361 $ - $ 650,151
Due to other funds - 33,135 240,932 274,067
Contract deposits 7,500 - - 7,500
Deferred revenue 3,668 963,016 - 966,684
TOTAL LIABILITIES 660,958 996,512 240,932 1,898,402
FUND BALANCE
Restricted - - 24,719 24,719
Assigned 13,751,629 - - 13,751,629
Unassigned - - - -
TOTAL FUND BALANCE 13,751,629 - 24,719 13,776,348
TOTAL LIABILITIES AND
FUND BALANCE $ 14,412,587 $ 996,512 $ 265,651 $ 15,674,750
The accompanying notes are an integral part of this statement.
NORTH NAPLES FIRE CONTROL AND RESCUE DISTRICT
RECONCILIATION OF THE BALANCE SHEET OF GOVERNMENTAL
FUNDS TO THE STATEMENT OF NET ASSETS
September 30, 2012
Amount
Total fund balance of governmental funds $ 13,776,348
Amounts reported for governmental activities in the
Statement of Net Assets are different because:
Capital assets used in governmental activities are not financial resources
and therefore are not reported in the governmental funds.
Capital assets not being depreciated:
Land 11,182,814
Construction in progress 1,102,570
12,285,384
Governmental capital assets being depreciated:
Building, equipment and vehicles 23,012,759
Less accumulated depreciation (12,725,224)
10,287,535
Long -term obligations are not due and payable in the current period
and therefore are not reported in the funds.
Page 7 of 68
Net OPEB obligation
(639,538)
Early termination benefits
(112,333)
Compensated absences
(1,917,976)
(2,669,847)
Elimination of interfund amounts:
Due to other funds
(274,067)
Due from other funds
274,067
Total net assets of governmental activities
$ 33,679,420
The accompanying notes are an integral part of this statement.
NORTH NAPLES FIRE CONTROL AND RESCUE DISTRICT
STATEMENT OF REVENUES, EXPENDITURES AND
CHANGES IN FUND BALANCE - GOVERNMENTAL FUNDS
Year Ended September 30, 2012
REVENUES
Ad Valorem taxes
Intergovernmental revenue:
Firefighter Supplemental
Charges for services:
Inspection fees and other
Impact fees
Miscellaneous:
Interest
Other
TOTAL REVENUES
EXPENDITURES
Current
Public safety
Personnel services
Operating expenditures
Capital outlay
Debt service
Principal reduction
Interest and fiscal charges
TOTAL EXPENDITURES
General Impact Fee
Fund Fund
$ 21,551,797 $
34,376
103,394
Page 8 of 68
Total
Inspection Fee Governmental
Fund Funds
- $ - $ 21,551,797
- 428,911
412,970 -
34,376
532,305
412,970
138,501 7,993 727 147,221
225,519 - - 225,519
22,053,587 420,963 429,638 22,904,188
19,003,975 -
3,038,671 5,403
216,215 415,560
491,879 19,495,854
- 3,044,074
631,775
22,258,861 420,963 491,879 23,171,703
EXCESS OF REVENUES
OVER (UNDER) EXPENDITURES (205,274)
OTHER FINANCING SOURCES
Proceeds from disposition of capital assets 30,330
TOTAL OTHER FINANCING SOURCES 30,330
EXCESS OF REVENUES AND
OTHER FINANCING SOURCES
OVER (UNDER) EXPENDITURES (174,944)
FUND BALANCE - Beginning of the year
FUND BALANCE - End of the year
(62,241) (267,515)
30,330
30,330
(62,241) (237,185)
13,926,573 - 86,960 14,013,533
$ 13,751,629 $ - $ 24,719 $ 13,776,348
The accompanying notes are an integral part of this statement.
NORTH NAPLES FIRE CONTROL AND RESCUE DISTRICT
RECONCILIATION OF THE STATEMENT OF REVENUES,
EXPENDITURES, AND CHANGES IN FUND BALANCE
OF GOVERNMENTAL FUNDS TO THE STATEMENT
OF ACTIVITIES
Year Ended September 30, 2012
Net change (expenditures and other financing uses over revenues and
other financing sources) in fund balance - total governmental funds
The decrease (change) in net assets reported for governmental activities
in the Statement of Activities is different because:
Governmental funds report capital outlays as expenditures.
In the Statement of Activities, however, the cost of those assets
is allocated over their estimated useful lives and reported as
depreciation expense. The gain on disposition of capital assets
increases the net assets.
Expenditures for capital assets 631,775
Less: proceeds on disposition of capital assets (30,330)
Plus: gain on disposition of capital assets 17,672
Less: current year depreciation (1,040,426)
The issuance of debt is reported as a financing source in governmental
funds and thus contributes to the change in fund balance. In the
Statement of Net Assets, however, issuing debt increases long -term
liabilities and does not affect the Statement of Activities.
Similarly, repayment of principal is an expenditure in the
governmental funds but reduces the liability in the Statement of
Net Assets.
Borrowings (proceeds from issuance):
Capital lease
Repayments (principal retirement):
Capital lease
Some expenses reported in the Statement of Activities do not require the
use of current financial resources and therefore are not reported as
expenditures in the governmental funds.
Decrease in accrued interest payable on long term debt -
Increase in Net OPEB obligation (198,617)
Decrease in termination benefits ERIP 1 76,597
Decrease in termination benefits ERIP 2 588,201
Increase in compensated absences (315,767)
Decrease in net assets of governmental activities
The accompanying notes are an integral part of this statement.
Page 9 of 68
Amount
$ (237,185)
(421,309)
150,414
$ (508,080)
NORTH NAPLES FIRE CONTROL AND RESCUE DISTRICT
STATEMENT OF FIDUCIARY NET
ASSETS - FIDUCIARY FUND
September 30, 2012
ASSETS
Investments, at fair value:
Money market funds
Mutual funds
Common stocks
U.S. Government securities
Corporate bonds
Real estate
Due from other governments - State
Due from District
Accrued investment income
TOTAL ASSETS
LIABILITIES AND NET ASSETS
LIABILITIES
Accounts payable
TOTAL LIABILITIES
NET ASSETS
Held in trust for pension benefits and other purposes
TOTAL NET ASSETS
The accompanying notes are an integral part of this statement.
Page 10 of 68
Firefighters'
Pension
Fund
$ 601,519
5,020,248
14,286,958
5,377,746
4,910,627
2,722,609
427,291
584,442
105,958
34,037,398
51,962
51,962
33,985,436
$ 33,985,436
NORTH NAPLES FIRE CONTROL AND RESCUE DISTRICT
STATEMENT OF CHANGES IN FIDUCIARY
NET ASSETS - FIDUCIARY FUND
Year Ended September 30, 2012
ADDITIONS
Contributions:
Employer
Plan members
Buybacks
State of Florida, insurance premiums
Total contributions
Page I I of 68
Firefighters'
Pension
Fund
$ 2,166,240
246,871
48,676
1,214,214
3,676,001
Investment income:
Net appreciation (depreciation) including realized gains /losses
3,623,463
Interest and dividends
743,880
4,367,343
Less: investment expenses
(173,545)
Net investment income (loss)
4,193,798
Other income
-
TOTAL ADDITIONS
7,869,799
DEDUCTIONS
Refunds of contributions
1,282
Benefits paid
13,263
Administrative expenses
65,962
TOTAL DEDUCTIONS
80,507
NET INCREASE IN NET ASSETS
7,789,292
NET ASSETS - BEGINNING
26,196,144
NET ASSETS - ENDING
$ 33,985,436
The accompanying notes are an integral part of this statement.
NORTH NAPLES FIRE CONTROL AND RESCUE DISTRICT Page 12 of 68
NOTES TO THE FINANCIAL STATEMENTS
September 30, 2012
NOTE A - SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES
Organization
North Naples Fire Control and Rescue District (the "District ") is an independent
special taxing district located in northern Collier County, Florida. The District was
originally established on April 22, 1961 by Laws of Florida, Chapter 61 -2032, then
reestablished by Laws of Florida Chapter 84 -416, as amended. The District has the
general and special powers prescribed by Florida Statute Chapters 189, 191 and
633.15. The District's governing legislation was recreated, reenacted and codified by
Laws of Florida, Chapter 99 -450 on July 13, 1999 and amended by Laws of
Florida, Chapter 2006 -353 on June 23, 2006. The District is governed by a five (5)
member elected Board of Commissioners. Commissioners serve on a staggered four
(4) year term basis.
The District provides fire control and protection services, fire safety, inspections,
code enforcement, fire hydrant maintenance, firefighter training, and crash and fire
rescue services as well as basic life support services. In providing these services, the
District operates and maintains seven (7) stations and the related equipment and
employs approximately 145 full -time professional firefighters and administrative staff.
During the year ended September 30, 2009, the District entered into a joint venture
agreement with Edison State College (ESC) for the operation of the North Naples
Fire Training Center ( NNFTC) to educate and train students as State Certified
Firefighters. The District is licensed to operate the NNFTC and ESC is the program
coordinator. The District provides the training room and training facilities for the
NNFTC. ESC, as program coordinator, is responsible for the operations of the
NNFTC including but not limited to the screening and enrolling of students and for
screening and engaging instructors. Therefore, the activities of the NNFTC are not
included in the District's basic financial statements.
Reporting Entity
The District adheres to Governmental Accounting Standards Board (GASB)
Statement Number 14, "Financial Reporting Entity," (GASB 14) as amended by
GASB Statement Number 39, "Determining Whether Certain Organizations Are
Component Units" (GASB 39). This Statement requires the basic financial
statements of the District (the primary government) to include its component units, if
any. A component unit is a legally separate organization for which the elected
officials of the primary government are financially accountable. Based on the criteria
established in GASB 14, as amended, there are no component units required to be
included in the District's basic financial statements.
NORTH NAPLES FIRE CONTROL AND RESCUE DISTRICT Page 13 of 68
NOTES TO THE FINANCIAL STATEMENTS
September 30, 2012
NOTE A - SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES, CONTINUED
Government -wide Financial Statements
The government -wide financial statements (i.e., the Statement of Net Assets and the
Statement of Activities) report information on all of the activities of the District and do
not emphasize fund types. These governmental activities comprise the primary
government. General governmental and intergovernmental revenues support the
governmental activities. The purpose of the government -wide financial statements is
to allow the user to be able to determine if the District is in a better or worse financial
position than the prior year. The effect of all interfund activity between governmental
funds has been removed from the government -wide financial statements.
Government -wide financial statements are reported using the economic resources
measurement focus and the accrual basis of accounting, as are the pension fund
financial statements. Under the accrual basis of accounting, revenues, expenses,
gains, losses, assets, and liabilities resulting from exchange and exchange -like
transactions are recognized when the exchange takes place. Revenues, expenses,
gains, losses, assets, and liabilities resulting from nonexchange transactions are
recognized in accordance with the requirements of GASB Statement Number 33,
"Accounting and Financial Reporting for Nonexchange Transactions" (GASB 33).
Amounts paid to acquire capital assets are capitalized as assets in the
government -wide financial statements rather than reported as expenditures.
Proceeds of long -term debt are recorded as liabilities in the government -wide
financial statements rather than as other financing sources. Amounts paid to reduce
long -term indebtedness of the reporting government are reported as a reduction of
the related liability in the government -wide financial statements rather than as
expenditures.
The Statement of Activities demonstrates the degree to which the direct expenses of
a given function are offset by program revenues. Direct expenses are those that are
clearly identifiable with a specific function 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, and 2) grants and
contributions that are restricted to meeting the operational or capital improvements of
a particular function. Taxes and other items not properly included among program
revenues are reported instead as general revenues.
NORTH NAPLES FIRE CONTROL AND RESCUE DISTRICT Page 14 of 68
NOTES TO THE FINANCIAL STATEMENTS
September 30, 2012
NOTE A - SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES, CONTINUED
Government -wide Financial Statements, continued
Program revenues are considered to be revenues generated by services performed
and/or by fees charged such as inspection fees, burn permits, and hydrant tests.
Fund Financial Statements
The District adheres to GASB Number 54, "Fund Balance Reporting and
Governmental Fund Type Definitions" that required a change in the reporting format
of fund balances in the governmental fund statements. Essentially, the implementation
resulted in adoption of a fund balance policy and reclassification of the components
within fund balance.
The accounts of the District are organized on the basis of funds, each of which is
considered a separate accounting entity. The operations of each fund are accounted
for with a separate set of self - balancing accounts that comprise its assets, liabilities,
fund equity or retained earnings, revenues, and expenditures or expenses, as
appropriate. Government resources are allocated to and accounted for in individual
funds based upon the purpose for which they are to be spent and the means by
which spending activities are controlled.
Fund financial statements for the District's governmental and fiduciary funds are
presented after the government -wide financial statements. These statements display
information about major funds individually and nonmajor funds in aggregate for
governmental funds. The fiduciary statement includes financial information for the
firefighters' pension fund. The fiduciary fund represents assets held by the District in
a custodial capacity for the benefit of other individuals.
Governmental Funds
When both restricted and unrestricted resources are combined in a fund,
expenditures are considered to be paid first from restricted resources, as appropriate,
and then from unrestricted resources. Governmental fund financial statements are
reported using the current financial resources measurement focus and the modified
accrual basis of accounting. Revenues are considered to be available when they are
collected within the current period or soon thereafter to pay liabilities of the current
period.
NORTH NAPLES FIRE CONTROL AND RESCUE DISTRICT Page 15 of 68
NOTES TO THE FINANCIAL STATEMENTS
September 30, 2012
NOTE A - SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES, CONTINUED
Governmental Funds, continued
The District's major funds are presented in separate columns on the governmental
fund financial statements. The definition of a major fund is one that meets certain
criteria set forth in GASB Statement Number 34, "Basic Financial Statements - and
Management's Discussion and Analysis - for State and Local Governments" (GASB
34). The funds that do not meet the criteria of a major fund are considered
non -major funds and are combined into a single column on the governmental fund
financial statements.
Separate financial statements are provided for governmental funds. Major individual
governmental funds are reported in separate columns on the fund financial statements.
Fiduciary Fund
The pension trust fund accounts for the activities of the Firefighters' Pension Plan,
which accumulates resources for the pension benefit payments to qualified firefighters.
The net assets of this fund are not considered to be net assets of the District and not
available to the District's creditors.
Measurement Focus and Basis of Accounting
Basis of accounting refers to when revenues and expenditures or expenses are
recognized in the accounts and reported in the basic financial statements. Basis of
accounting relates to the timing of the measurements made, regardless of the
measurement focus applied.
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 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 have been met.
Governmental fund financial statements are reported using the current financial
resources measurement focus and the modified accrual basis of accounting.
Revenues are recognized as soon as they are both measurable and available.
NORTH NAPLES FIRE CONTROL AND RESCUE DISTRICT Page 16 of 68
NOTES TO THE FINANCIAL STATEMENTS
September 30, 2012
NOTE A - SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES, CONTINUED
Measurement Focus and Basis of Accounting, continued
Revenues are considered to be available when they are collectible within the current
period and soon enough thereafter to pay liabilities of the current period. For this
purpose, the District considers tax revenues to be available if they are collected
within sixty days of the end of the current fiscal period.
Revenues susceptible to accrual are property taxes, interest on investments, and
intergovernmental revenues. Property taxes are recorded as revenues in the fiscal
year in which they are levied, provided they are collected in the current period or
within sixty days thereafter. Interest on invested funds is recognized when earned.
Intergovernmental revenues that are reimbursements for specific purposes or projects
are recognized when all eligibility requirements are met.
Expenditures are generally recognized under the modified accrual basis of accounting
when the related fund liability is incurred. Exceptions to this general rule include: (1)
principal and interest on long -term debt, if any, is recognized when due; and (2)
expenditures are generally not divided between years by the recording of prepaid
expenditures.
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.
Separate financial statements are provided for governmental funds and fiduciary
funds, even though the latter are excluded from the government -wide financial
statements.
Non - current Government Assets/Liabilities
GASB 34 requires non - current governmental assets, such as land and buildings, and
non - current governmental liabilities, such as notes payable and capital leases, to be
reported in the governmental activities column in the government -wide Statement of
Net Assets.
NORTH NAPLES FIRE CONTROL AND RESCUE DISTRICT Page 17 of 68
NOTES TO THE FINANCIAL STATEMENTS
September 30, 2012
NOTE A - SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES, CONTINUED
Maior Funds
The District reports the following major governmental funds:
The General Fund is the District's primary operating fund. It accounts for all financial
resources of the District, except those required to be accounted for in another fund.
The Impact Fee Fund consists of fees imposed and collected by Collier County based
on new construction within the District. The fees are restricted and can only be used
for certain capital expenditures associated with growth within the District.
Non - Maior Fund
The District reports the following non -major fund:
The Inspection Fee Fund is used by the District to account for the receipt and
expenditures of its Inspection Fee Program. Fees are charged for the inspection of
new building construction. The fees are collected by Collier County and are
distributed by the East Naples Fire Control and Rescue District to the other
participating Districts.
Fiduciary Fund
Fiduciary funds are excluded in the government -wide financial statements because
the resources of those funds are not available to support the District's programs. The
only type of fiduciary funds the District maintains is a Firefighters' Pension Fund,
which accounts for retirement assets held by the Plan that are payable to qualified
firefighters upon retirement.
Budeetary Information
The District has elected to report budgetary comparisons of its major funds and its
non -major fund as required supplementary information (RSI).
NORTH NAPLES FIRE CONTROL AND RESCUE DISTRICT Page 18 of 68
NOTES TO THE FINANCIAL STATEMENTS
September 30, 2012
NOTE A - SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES, CONTINUED
Investments
The District adheres to the requirements of GASB Statement Number 31,
"Accounting and Financial Reporting for Certain Investments and for External
Investment Pools," (GASB 31) in which all investments are reported at fair value.
Investments, including restricted investments, consist of certificates of deposit, U.S.
Government securities, corporate debt and equity securities, and securities of
government agencies unconditionally guaranteed by the U.S. Government.
Capital Assets
Capital assets, which include land, construction in progress, buildings, equipment and
vehicles, are reported in the government -wide Statement of Net Assets.
The District follows a capitalization policy which calls for capitalization of all capital
assets that have a cost or donated value of $1,000 or more and have a useful life in
excess of one year.
All capital assets are valued at historical cost, or estimated historical cost if actual
historical cost is not available. Donated capital assets are valued at their estimated
fair market value on the date donated. Public domain (infrastructure) capital assets
consisting of certain improvements other than building, including curbs, gutters and
drainage systems, are not capitalized, as the District generally does not acquire such
assets. No debt - related interest expense is capitalized as part of capital assets in
accordance with GASB 34.
Maintenance, repairs and minor renovations are not capitalized. The acquisition of
land and construction projects utilizing resources received from Federal and State
agencies are capitalized when the related expenditure is incurred.
Expenditures that materially increase values, change capacities or extend useful lives
are capitalized. Upon sale or retirement, the cost is eliminated from the respective
accounts.
NORTH NAPLES FIRE CONTROL AND RESCUE DISTRICT Page 19 of 68
NOTES TO THE FINANCIAL STATEMENTS
September 30, 2012
NOTE A - SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES, CONTINUED
Capital Assets, continued
Expenditures for capital assets are recorded in the fund statements as current
expenditures. However, such expenditures are not reflected as expenditures in the
government -wide statements, but rather are capitalized and depreciated.
Depreciable capital assets are depreciated using the straight -line method over the
following estimated useful lives:
Capital Asset
Years
Buildings
15 -30
Capital Assets acquired under Capital Lease
10
Office Equipment
3 -30
Vehicles
3 -10
Equipment and Machinery
3 -15
BudEets and Budgetary Accounting
The District adopted an annual budget for the General Fund.
The District adopted annual budgets for the Special Revenue Funds - Impact Fee
Fund and the Inspection Fee Fund.
No budget was adopted or required to be adopted for the Firefighters' Pension Trust
Fund.
NORTH NAPLES FIRE CONTROL AND RESCUE DISTRICT Page 20 of 68
NOTES TO THE FINANCIAL STATEMENTS
September 30, 2012
NOTE A - SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES, CONTINUED
Budgets and Budgetary Accounting, continued
The District follows these procedures in establishing budgetary data for the General
Fund, the Impact Fee Fund, and the Inspection Fee Fund:
1. During the summer of each year, the District Fire Chief submits to the Board of
Commissioners a proposed operating budget for the fiscal year commencing on
the upcoming October 1. The operating budget includes proposed
expenditures and the means of financing them.
2. Public hearings are conducted to obtain citizen comments.
3. The budget is adopted by approval of the Board of Commissioners.
4. Budget amounts, as shown in these basic financial statements, are as originally
adopted or as amended by the Board of Commissioners.
5. The budget is adopted on a basis consistent with accounting principles generally
accepted in the United States of America.
6. The level of control for appropriations is exercised at the fund level.
7. Appropriations lapse at year -end.
Several budget amendments were approved by the Board of Commissioners during
the fiscal year ended September 30, 2012 for the General Fund. Budgeted revenues
and reserves in the General Fund were increased by $831,777. No budget
amendments were approved for the Impact Fee Fund or for the Inspection Fee Fund.
Impact Fees/Deferred Revenue
The District levies an impact fee on new construction within the District. The intent of
the fee is for growth within the District to pay for capital improvements needed due to
the growth. The fee is imposed and collected by Collier County and remitted to the
District. The fee is refundable if not expended by the District within six (6) years from
the date of collection. The District, therefore, records this fee as restricted cash and
deferred revenue until the date of expenditure, at which time it is recognized as
revenue and charged to capital outlay in the fund financial statements and capital
assets in the government -wide financial statements.
NORTH NAPLES FIRE CONTROL AND RESCUE DISTRICT Page 21 of 68
NOTES TO THE FINANCIAL STATEMENTS
September 30, 2012
NOTE A - SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES, CONTINUED
Net Assets
In governmental fund statements net assets are identified as restricted when there are
externally imposed constraints as to their use, such as through debt covenants, by
grantors, or by law.
Fund Balances
The governmental fund financial statements the District maintains include
nonspendable, restricted, assigned, and unassigned fund balances. Nonspendable
fund balances are those that cannot be spent because the are either (a) not in
spendable form or (b) legally or contractually required to be maintained intact.
Criteria include items that are not expected to be converted into cash, for example
prepaid expenses.
Restricted fund balances are those that are restricted by a third party. Restricted fund
balances can only be spent for the stipulated purposes.
The District's assigned fund balances are a result of the actions of the District's Board.
The District's intent is to maintain a minimum assigned fund balance level of three (3)
months of budgeted total expenditures. The assigned fund balance includes the
District's operational and capital reserves as well as its disaster reserve. At
September 30, 2012, fund balance is also assigned for a variety of specific items by
District Board action. Any use of the assigned fund balance requires the District's
Board approval.
Due To/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.
Due From Other Governments
No allowance for losses on uncollectible accounts has been recorded since the
District considers all amounts to be fully collectible.
NORTH NAPLES FIRE CONTROL AND RESCUE DISTRICT Page 22 of 68
NOTES TO THE FINANCIAL STATEMENTS
September 30, 2012
NOTE A - SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES, CONTINUED
Compensated Absences
The District's employees accumulate annual leave based on the number of years of
continuous service. Upon termination of employment, employees can receive
payment of accumulated annual leave if certain criteria are met. The costs of
accumulated annual leave benefits (compensated absences) are expended in the
respective operating funds when payments are made to employees. However, the
liability for all accrued vacation and personal leave benefits is recorded in the
government -wide Statement of Net Assets.
Encumbrances
Encumbrance accounting, under which purchase orders, contracts and other
commitments for the expenditure of monies are recorded in order to reserve that
portion of the applicable appropriation, is not employed by the District because, at
present, it is not necessary in order to assure effective budgetary control or to
facilitate effective cash planning and control.
M_ anagement Estimates
The preparation of financial statements in conformity with accounting principles
generally accepted in the United States of America requires management to make
estimates and assumptions that affect the reported amounts of assets, liabilities and
disclosure of contingent assets and liabilities at the date of the financial statements,
and the reported amounts of revenues and expenditures during the reporting period.
Actual results could differ from those estimates.
Interfund Transactions
The District considers interfund receivables (due from other funds) and interfund
payables (due to other funds) to be loan transactions to and from other funds to cover
temporary (three months or less) cash needs. Transactions that constitute
reimbursements to a fund for expenditures /expenses initially made from it that are
properly applicable to another fund are recorded as expenditures /expenses in the
reimbursing funds and as reduction of expenditures /expenses in the fund that is
reimbursed. Such amounts are eliminated in the Government -wide Financial
Statements.
NORTH NAPLES FIRE CONTROL AND RESCUE DISTRICT Page 23 of 68
NOTES TO THE FINANCIAL STATEMENTS
September 30, 2012
NOTE A - SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES, CONTINUED
Subsequent Events
Subsequent events have been evaluated through February 14, 2013, which is the date
the basic financial statements were available to be issued.
NOTE B - CASH AND CASH EQUIVALENTS
Cash and cash equivalents of the primary government (exclusive of the Firefighters'
Pension Trust Fund) were $10,054,683, of which $1,206,437 was restricted. Total
cash and cash equivalents included cash on hand of $1,150 at September 30, 2012.
Deposits
The District's deposit policy allows deposits to be held in demand deposit, money
market accounts and the Florida State Board of Administration - Local Government
Surplus Trust Fund (SBA). All District depositories are institutions designated as
qualified depositories by the State Treasurer at September 30, 2012.
The District adheres to GAS13 Statement Number 31, "Accounting and Financial
Reporting for Certain Investments and for External Investment Pools." Under this
Statement, the District has elected to show all investments at fair value, with the
exception of the Local Government Surplus Funds Investment Pool Fund PRIME
(State Board of Administration), an external 2a7 - like investment pool. The Local
Government Surplus Funds Investments Pool Trust Fund's shares are stated at
amortized cost, which approximates fair value. These investments are subject to the
risk that the market value of an investment, collateral protecting a deposit or securities
underlying a repurchase agreements, will decline.
NORTH NAPLES FIRE CONTROL AND RESCUE DISTRICT
NOTES TO THE FINANCIAL STATEMENTS
September 30, 2012
NOTE B - CASH AND CASH EQUIVALENTS, CONTINUED
Deposits, continued
Deposits consist of the following at September 30, 2012:
District
Unrestricted
General Fund
Depository Accounts
Money Market
SBA
Total General Fund
Restricted
General Fund
Depository Accounts
Special Revenue Funds
Impact Fee
Depository Accounts
Inspection Fee
Depository Accounts
Total Special Revenue Funds
Carrying
Amount
$ 1,242,518
7,603,940
638
$ 8,847,096
$ 3,668
972,427
Page 24 of 68
Bank
Balance
$ 2,304,066
7,603,940
638
$ 9,908,644
$ 7,225
972,661
230,342 230,342
$ 1,206,437 $ 1,210,228
The District's deposits were entirely covered by federal depository insurance or by
collateral pursuant to the Public Depository Security Act (Florida Statute 280) of the
State of Florida except for the $638 held in the SBA. Bank balances approximate
market value.
The District held no other types of deposits during the year ended September 30,
2012. The local Government Surplus Funds Trust Fund is not required to be
categorized because the investments are not evidenced by securities that exist in
physical or book entry form.
NORTH NAPLES FIRE CONTROL AND RESCUE DISTRICT Page 25 of 68
NOTES TO THE FINANCIAL STATEMENTS
September 30, 2012
NOTE B - CASH AND CASH EQUIVALENTS, CONTINUED
Restricted Cash and Equivalents
The following is a brief description of the restrictions on cash and cash equivalents:
The General fund account is used to segregate all funds received and disbursed for
activities in relation to the District's 50th Anniversary.
The Impact Fee account is used to account for the deposit of impact fees received
and is restricted for certain capital asset acquisition associated with growth within the
District. Impact fees are collected by Collier County for the District pursuant to
County ordinance and District resolution.
The Inspection Fee account is used to account for inspection fees collected by the
District for performing fire inspections within the District. Such revenue is
restricted for inspection service related costs.
NOTE C - INVESTMENTS
District - Investments
Investments of the District (primary government) (exclusive of the Firefighters'
Pension Trust Fund) was $5,019,563 (market value) and $5,019,563 (bank
balance) at September 30, 2012 and consisted of certificates of deposit which were
designated as public funds with a qualified public depository, and were, therefore,
entirely collateralized pursuant to the Public Depository Security Act (Florida Statute
280) of the State of Florida.
Firefighters Pension Plan - Investments
Investments held in the Firefighters' Pension Trust Fund totaled $32,919,707
(including $601,519 in money market funds, $5,020,248 in equity mutual funds,
$14,286;958 in equity securities, $10,288,373 in fixed income securities, and
$2,722,609 in real estate) at September 30, 2012. Such investments are
administered by Firefighters' Pension Board policy. This policy provides for
investments in money markets, mutual funds, treasury notes, federal agency
guaranteed securities, corporate bonds, notes and/or equities and real estate.
NORTH NAPLES FIRE CONTROL AND RESCUE DISTRICT Page 26 of 68
NOTES TO THE FINANCIAL STATEMENTS
September 30, 2012
NOTE C - INVESTMENTS, CONTINUED
Firefi titers Pension Plan - Investments, continued
The Firefighters' Pension Trust Fund accounts for resources held to fund the
respective firefighter employee pension benefits.
The Firefighters' Pension Trust Fund investments were held by a financial and
investment institution and are subject to certain insurances up to limits specific to the
trustee /custodian institution and retirement trust funds. These assets are subject to
loss of principal.
Investment Authorization:
The Plan's investment policy is determined by the Plan's Board of Trustees. The
policy has been designed by the Board to conduct the operations of the Plan in a
manner so that the assets will provide the pension and other benefits provided under
applicable laws. As such, the policy is designed by the Board to maximize the Plan's
asset value, while assuming risk that is consistent with the Board's risk tolerance. The
Trustees are authorized to acquire and retain every kind of property (real, personal or
mixed) and every kind of investment specifically including, but not by way of
limitation, money markets, mutual funds, bonds, debentures, stocks (preferred or
common) and other corporate obligations. Investments are carried at fair value at
September 30, 2012. Interest and dividend revenues are recorded as earned.
Purchases and sales of investments are recorded on the trade -date basis.
Unrealized gains and losses are presented as net appreciation (depreciation) in fair
value of investments on the statement of changes in plan net assets along with gains
and losses realized on sales of investments.
Given the inherent nature of investments, it is reasonably possible that changes in the
value of those investments will occur in the near term and that such changes could
materially affect the amounts reported (loss of principal) in the statement of plan net
assets.
Investment in all equity securities shall be limited to those listed on a major U.S. stock
exchange and limited to no more than 70% (at market) of the Plan's total asset
value. The equity position in any one company shall not exceed 5% of the Plan's total
assets at market. Investments in stock of foreign companies shall be limited to 25%
of the value of the Plan's total assets at market.
NORTH NAPLES FIRE CONTROL AND RESCUE DISTRICT Page 27 of 68
NOTES TO THE FINANCIAL STATEMENTS
September 30, 2012
NOTE C - INVESTMENTS, CONTINUED
Firefi hters Pension Plan - Investments, continued
Investment Authorization, continued:
The fixed income portfolio shall be compromised of securities with a quality rating of
investment grade or higher by a major rating service. Except for Treasury and
Agency obligations, the debt portion of the Fund shall contain no more than 3% of a
given issuer irrespective of the number of differing issues.
The current target allocation of these investments at market is as follows:
Authorized
Target % of
Investments
Portfolio
Domestic Equities
45%
Fixed Income
40%
International Equities
15%
Interest Rate Risk:
Interest rate risk is the risk that changes in market interest rates will adversely
affect the fair value of an investment. Generally, the longer the maturity of an
investment, the greater the sensitivity of its fair value to change in market interest
rates. As a means of limiting its exposure to interest rate risk, the Plan diversifies its
investments by security type and institution, and limits holdings in any one type of
investment with any one issuer with various durations of maturities.
Information about the sensitivity of the fair values of the Plan's fixed income
investments to market interest rate fluctuations is provided by the following table that
shows the distribution of the Plan's investment by maturity at September 30, 2012:
Investment Tyne
Corporate bonds
U.S. Agencies
U.S. Treasuries
Investment Maturities (in years)
Fair Value Less than 1 1 to 5 6 to 10 More than 10
$ 4,910,627 $ 608,739 $ 1,695,998 $ 1,731,824 $ 874,066
3,416,103 - 320,831 - 3,095,272
1,961,643 - - 1,625,158 336,485
$ 10,288,373 $ 608,739 $ 2,016,829 $ 3,356,982 $ 4,305,823
NORTH NAPLES FIRE CONTROL AND RESCUE DISTRICT Page 28 of 68
NOTES TO THE FINANCIAL STATEMENTS
September 30, 2012
NOTE C - INVESTMENTS, CONTINUED
Firefighters Pension Plan - Investments, continued
Credit Risk:
Credit risk is the risk that a security or a portfolio will lose some or all of its value due
to a real or perceived change in the ability of the issuer to repay its debt. The Plan's
investment policy utilizes portfolio diversification in order to control this risk.
The following table discloses credit rating by fixed income investment type at
September 30, 2012, if applicable:
Fair Percentage of
Value Portfolio
U.S. government guaranteed* $ 5,377,746 16.34 %
Quality rating of credit risk debt securities
Al
$ 1,148,295
3.49 %
A2
1,147,889
3.49
A3
861,088
2.62
Aal
21,603
0.07
Aa2
500,347
1.52
Aa3
325,899
0.99
Aaa
285,052
0.87
gaa2
506,058
1.54
Unrated
114,396
0.35
Total credit risk debt securities
$ 4,910,627
14.94 %
* Obligations of the U.S. government or obligations explicitly guaranteed by the U.S.
government are not considered to have credit risk and do not have purchase limitations.
Concentration of Credit Risk:
The investments policy of the Plan contains limitations on the amount that can be
invested in any one equity issuer as well maximum portfolio allocation percentages.
There were no individual equity investments that represented 5% or more of Plan net
assets at September 30, 2012. In addition, the Plan contains limitations on the
amount that can be invested in any one debt issuer, except for the debt securities
issued by the U.S. Government. There were no investments in non -U.S. Government
debt securities that represented 10% or more of Plan net assets at September 30,
2012.
Custodial Credit Risk:
This is the risk that in the event of the failure of the counterparty, the plan will not be
able to recover the value of its investments or collateral securities that are in the
possession of an outside party. This risk is generally measured by the assignment of a
NORTH NAPLES FIRE CONTROL AND RESCUE DISTRICT Page 29 of 68
NOTES TO THE FINANCIAL STATEMENTS
September 30, 2012
NOTE C - INVESTMENTS, CONTINUED
Firefighters Pension Plan - Investments, continued
Custodial Credit Risk, continued:
rating by a nationally recognized statistical rating organization. Consistent with the
Plan's investment policy, the investments are held by Plan's custodial bank and
registered in the Plan's name.
Foreign Currency Risk:
This is the risk that fluctuations in currency exchange rate may affect transactions
conducted in currencies other than US Dollars and the carrying value of foreign
investments. The Plan's exposure to foreign currency risk is derived mainly from its
investments in international equity and fixed income funds. The Plan owns shares in
international equity funds and does not own the individual securities. The investment
policy limits the foreign investments to no more than 25% of the Fund's investment
balance in equities and no more than 10% in fixed income. As of September 30,
2012, the foreign investments in these investment types were 17% of total
investments which was in compliance with Board policy. The Plan's exposure to
foreign currency risk related to foreign equity funds is as follows:
Fair Percentage of
Value Portfolio
International equity funds and fixed income (bonds) $ 5,020,248 iiN
NOTE D - DUE TO/FROM OTHER FUNDS
Interfund receivables and payables at September 30, 2012, are as follows:
Fund
General Fund:
Impact Fee Fund
Inspection Fee Fund
Total General Fund
Special Revenue Funds:
Impact Fee Fund
General Fund
Inspection Fee Fund
General Fund
Total Special Revenue Funds
Total
Due from Due to
Other Funds Other Funds
$ 33,135 $
240,932
274,067
$ 274,067
33,135
240,932
274,067
$ 274,067
Interfund receivables and payables were eliminated for presentation purposes in the
Statement of Net Assets at September 30, 2012.
NORTH NAPLES FIRE CONTROL AND RESCUE DISTRICT Page 30 of 68
NOTES TO THE FINANCIAL STATEMENTS
September 30, 2012
NOTE E - CAPITAL ASSETS ACTIVITY
The following is a summary of changes in capital assets activity for the year ended
September 30, 2012:
Capital Assets
Being Depreciated:
Buildings
Balance
-
Balance
Office Equipment
October 1
Increases/ Decreases/
Adjustments/ September 30
Vehicles
2011
Additions Retirements
Reclassifications 2012
Capital Assets Not
2,741,134
130,444
(145,969)
Being Depreciated:
Land
$ 11,182,814
$ - $ -
$ - $ 11,182,814
Construction in Progress
720,146
382,424 -
- 1,102,570
Total Capital Assets Not
Depreciation:
Being Depreciated
11,902,960
382,424 -
- 12,285,384
Capital Assets
Being Depreciated:
Buildings
12,428,865
-
-
Office Equipment
706,380
51,118
(65,061)
Vehicles
7,698,797
67,789
(600,738)
Equipment & Machinery
2,741,134
130,444
(145,969)
Total Capital Assets
Being Depreciated
23,575,176
249,351
(811,768)
Less Accumulated
Depreciation:
Buildings
(4,157,543)
(404,314)
-
Office Equipment
(456,120)
(92,593)
61,752
Vehicles
(5,811,504)
(393,488)
600,350
Equipment & Machinery
(2,058,741)
(50,031)
137,008
Total Accumulated Depreciation
(12,483,908)
1,040,426
799,110
Total Capital Assets being
Depreciated, Net 11,091,268 791,075 (12,658)
- 12,428,865
- 692,437
- 7,165,848
- 2,725,609
- 23,012,759
(4,561,857)
(486,961)
(5,604,642)
(2,071,764)
(12,725,224)
- 10,287,535
Capital Assets, Net $ 22,994,228 $ 408,651 $ (12,658 $ - 22,572,919
Net assets invested in capital
assets, net of related debt $ 22,572,919
NORTH NAPLES FIRE CONTROL AND RESCUE DISTRICT Page 31 of 68
NOTES TO THE FINANCIAL STATEMENTS
September 30, 2012
NOTE E - CAPITAL ASSETS ACTIVITY, CONTINUED
Depreciation expense was charged to the following functions during the year
ended September 30, 2012:
Amount
General Government
Total Depreciation Expense $1,040,426
NOTE F - LONG -TERM OBLIGATIONS
The following is a summary of changes in long -term obligations for the year ended September
30, 2012:
$ 2,820,261 $ 514,384 $ (664,798) $ 2,669,847 1 63,882
The following is a summary of long -term obligations at September 30, 2012:
Amount
Net OPEB obligation. Cumulative difference between annual
OPEB cost and District payments toward the cost of post
employment benefits other than pensions since GASB No. 45
transition date of October 1, 2009. $ 639,538
Early termination benefits (ERIP 1). During the year ended
September 30, 2009, the District approved an early retirement
incentive package to all sworn employees (see Note M). The
ERIP Ibenefits were payable over a three (3) year period which -
ended September, 2012.
Early termination benefits (ERIP 2). During the year ended
September 30, 2010, the District approved an early retirement
incentive package to all sworn employees (see Note M). The
early retirement benefits are payable over a three (3) year period
ending September, 2014. 112,333
Balance
Retirements
Balance
Amounts
October 1
And
September 30
Due Within
2011
Additions Adjustments
2012
One Year
Net OPEB obligation
$ 440,921
$ 198,617 $ -
$ 639,538
$ -
Termination Benefits ERIP 1
76,597
- (76,597)
-
-
Termination Benefits ERIP 2
700,534
- (588,201)
112,333
63,882
Compensated Absences
1,602,209
315,767 -
1,917,976
-
$ 2,820,261 $ 514,384 $ (664,798) $ 2,669,847 1 63,882
The following is a summary of long -term obligations at September 30, 2012:
Amount
Net OPEB obligation. Cumulative difference between annual
OPEB cost and District payments toward the cost of post
employment benefits other than pensions since GASB No. 45
transition date of October 1, 2009. $ 639,538
Early termination benefits (ERIP 1). During the year ended
September 30, 2009, the District approved an early retirement
incentive package to all sworn employees (see Note M). The
ERIP Ibenefits were payable over a three (3) year period which -
ended September, 2012.
Early termination benefits (ERIP 2). During the year ended
September 30, 2010, the District approved an early retirement
incentive package to all sworn employees (see Note M). The
early retirement benefits are payable over a three (3) year period
ending September, 2014. 112,333
NORTH NAPLES FIRE CONTROL AND RESCUE DISTRICT Page 32 of 68
NOTES TO THE FINANCIAL STATEMENTS
September 30, 2012
NOTE F - LONG -TERM OBLIGATIONS, CONTINUED
Non - current portion of compensated absences. Employees of the
District are entitled to paid vacation based on length of service and
job classification. 1,917,976
$ 2,669,847
Interest expense for the year ended September 30, 2012, was $0.
NOTE G - RETIREMENT PLANS
The following two retirement plans have been established by the District:
Plan 1 - Florida Retirement System (FRS)
Plan 2 - Firefighter's Pension Trust Fund (Florida Statute 175)
Employee participation in a specific plan is based on the respective
employee's original hire date.
Plan 1 - Plan Description and Provisions - Florida Retirement System
All District personnel employed prior to January 1, 1996 and all other District
personnel (other than certified firefighters) including the Board of Commissioners,
hired on or after January 1, 1996, are participants in the statewide Florida Retirement
System (FRS) under the Authority of Article X, Section 14 of the State Constitution
and Florida Statutes, Chapters 112 and 121. The FRS Plan (the "Plan") was
noncontributory prior to July 1, 2011. Beginning July 1, 2011, FRS required a 3% of
eligible compensation employee contribution for all classes of employees except for
those enrolled in the DROP program, which requires no employee contribution. The
FRS is totally administered by the State of Florida. The District contributed 100% of
the required contributions for the years ended September 30, 2012, 2011, and 2010.
The District's covered payroll for the years ended September 30, 2012, 2011, and
2010 was $4,706,793, $5,078,230 and $5,500,663, respectively. The District's
contributions to the Plan were $556,815, $941,412, and $1,062,265 for the years
ended September 30, 2012, 2011 and 2010, respectively, which represents 12 %,
19% and 19 %, respectively, of covered payroll. Pension costs for the District
ranged between 4.91% to 14.90% for the year ended September 30, 2012.
NORTH NAPLES FIRE CONTROL AND RESCUE DISTRICT Page 33 of 68
NOTES TO THE FINANCIAL STATEMENTS
September 30, 2012
NOTE G - RETIREMENT PLANS, CONTINUED
Plan 1- Plan Description and Provisions - Florida Retirement System, continued
Employees, enrolled prior to July 1, 2011, who retire at or after age 62 with 6 years
of creditable service (6 years for elected state officials), 6 years of senior
management service and age 62, 6 years of special risk service and age 55, or 30
years of service (25 for special risk) regardless of age, are entitled to a retirement
benefit, payable for life, equal to 1.6% to 3.0% per year of creditable service,
depending on the class of employee (regular, special risk, etc.) based on average final
compensation of the five (5) highest fiscal years' compensation. Benefit cannot
exceed 100% of average final compensation.
Employees, enrolled on or after July 1, 2011, who retire at or after age 65 with 8
years of creditable service, 8 years of senior management service and age 65, 8 years
of special risk service and age 60, or 33 years of service (30 for special risk)
regardless of age, are entitled to a retirement benefit, payable for life, equal to 1.6%
to 3.0% per year of creditable service, depending on the class of employee (regular,
special risk, etc.) based on average final compensation of the eight (8) highest fiscal
years' compensation. Benefit cannot exceed 100% of average final compensation.
Benefits vest after six years of creditable service for those enrolled prior to July 1,
2011, and after eight years for those enrolled on or after July 1, 2011. Vested
employees may retire anytime after vesting and incur a 5% benefit reduction for each
year prior to normal retirement age.
Early retirement, disability, death and survivor benefits are also offered. Benefits are
established by State Statute. The Plan provides for a constant 3% cost -of- living
adjustment for retirees.
The Plan also provides several other Plan and/or investment options that may be
elected by the employee. Each offers specific contribution and benefit options. The
Plan documents should be referenced for complete detail.
Description of Funding Policy - This is a cost sharing, multi - employer plan
available to governmental units within the State. Actuarial information with respect to
an individual participating entity is not available. Participating employers are required,
by Statute, to pay monthly contributions at actuarially determined rates that,
expressed as percentages of annual covered payroll, are adequate to accumulate
sufficient assets to pay benefits when due.
NORTH NAPLES FIRE CONTROL AND RESCUE DISTRICT Page 34 of 68
NOTES TO THE FINANCIAL STATEMENTS
September 30, 2012
NOTE G - RETIREMENT PLANS, CONTINUED
Plan 1 - Plan Description and Provisions - Florida Retirement System, continued
Trend Information - A copy of the FRS's June 30, 2012 annual report can be
obtained by writing the Florida Division of Retirement, Cedars Executive Center,
2639 -C North Monroe Street, Tallahassee, Florida 32399 -1560, or by calling (850)
488 -5706.
Plan 2 - Plan Description and Provisions - Firefighters' Pension Trust Fund
The following brief description of the North Naples Fire Control and Rescue District
Firefighters' Pension Plan (the "Plan") is provided for general information purposes
only. Participants should refer to the plan agreement for a more complete description
of the Plan. On July 11, 1996, under the authority of Florida Statute 175 and Laws
of Florida, Chapter 95 -338, the District's Board of Commissioners passed
Resolutions 96 -004 and 96 -005, providing for the establishment and funding of a
single employer defined benefit retirement plan and trust for newly hired fire
suppression personnel. The resolutions establish that certified firefighters hired
on or after January 1, 1996 are to become participants in the District's Firefighters'
Pension Trust Fund. The Plan is totally administered, including all investment
management, by a third party administrator and the Plan's appointed Pension Board.
During the year ended September 30, 2009, the Plan adopted Governmental
Accounting Standards Board (GASB) Statement Number 50 "Pension Disclosures"
(GASB 50) which amends GASB Statements Number 25 "Financial Reporting for
Defined Benefit Pension Plans and Note Disclosures for Defined Contribution Plans ",
and Number 27 "Accounting for Pensions by State and Local Government
Employers ". GASB 50 requires disclosure in the notes to the financial statements of
pension plans and certain employer governments of the current funded status of the
plan and other actuarial information. The adoptions of GASB 50 had an impact on
the presentation of the notes to the financial statements but had no impact on the
Plan's net assets available for Plan benefits.
Effective October 1, 2011, employee participants were required to contribute 3% of
compensation (an increase from .5% of compensation) per Resolution 11 -031.
During the years ended September 30, 2012, 2011, and 2010, there were employee
contributions in the amounts of $48,676, $42,021 and $62,549, respectively. These
NORTH NAPLES FIRE CONTROL AND RESCUE DISTRICT Page 35 of 68
NOTES TO THE FINANCIAL STATEMENTS
September 30, 2012
NOTE G - RETIREMENT PLANS, CONTINUED
Plan 2 - Plan Description and Provisions - Firefighters' Pension Trust Fund,
continued
employee contributions were for the buyback of military service time for certain
employees. There were no employee contributions to the Plan during the years
ended September 30, 2005 or 2004, as the District funded the scheduled employee
required contributions. The employer contributed 100% of its required contributions,
as well as those required contributions of the participating firefighters (0.5% pick -up).
The Plan provides for full -time firefighting personnel to become eligible to participate
in the Plan immediately upon hire. Under District resolution 96 -005, the District
elected to pay the 0.5% (1% prior to December 9, 2004) employee required
contribution on behalf of the employee. Effective December 9, 2004 the employee
contribution was reduced to 0.5% (employee pick up). Effective July 1, 2001 (per
resolution 0l -01), benefits under the Plan vest after six years of creditable service.
Employees who elect normal retirement at or after age 55 with 6 years of creditable
service, or 25 years of service regardless of age, are entitled to a retirement benefit.
Effective Octber 1, 2011, required employee contributions increased to 3% of
compensation. Employees may elect early retirement after 6 years of creditable
service with a reduction in benefit not to exceed 3% for each year before normal
retirement. The Plan also includes certain disability and death benefits.
Contributions - Contributions to the Plan are derived from three sources:
the plan's participants are required to contribute to the plan in the amount of 3% of
their covered wages and pursuant to resolution 11 -03 1 the District has elected to
increase the affected employees' salary by 0.5% (employer pick -up), State funds
(fire [hazard] insurance premium tax per Florida Statute Chapter 175) and employer
(remaining amount necessary to meet actuarial requirement). For the period from
January 1, 1996 through September 30, 1996, no employer contributions were
required. Employer contributions were required beginning October 1, 1996. The
State contributions under Chapter 175 began in June 1997. This revenue is based on
property fire insurance premiums paid within the District and is applied up to an
approved "frozen" limit of $1,746,716. The District (employer) is required to fund
the difference each year between the total contributions from all other sources for the
year and the total cost for the year pursuant to the most recent actuarial valuation of
the Plan. The total cost for any year equals total normal cost plus the additional
amounts sufficient to amortize the unfunded past service liability over a 30 year period
commencing the first year of the Plan's inception.
NORTH NAPLES FIRE CONTROL AND RESCUE DISTRICT Page 36 of 68
NOTES TO THE FINANCIAL STATEMENTS
September 30, 2012
NOTE G - RETIREMENT PLANS, CONTINUED
Plan 2 - Plan Description and Provisions - Firefighters' Pension Trust Fund,
continued
Pursuant to the actuarial study dated October 1, 2011, the District's fiscal year 2012
contribution (District only) requirement was 26.24% of the actuarially determined
covered payroll. Actual District contributions to the Plan for the year ended
September 30, 2012, were $2,166,240. The State contributions for the year ended
September 30, 2012 were $1,214,214. Employees contributed (3 %) $246,871 to
the Plan for the year ended September 30, 2012. At October 1, 2012,
$33,985,436 of the Plan's total net assets were restricted for future benefits
increases.
Pension Benefits - Effective July 1, 2001, employees with 6 or more years of
service are entitled to monthly pension benefits, beginning at the earlier of age 55 with
6 years of credited service or 25 years credited service regardless of age. Benefit is
equal to 3.53% of their average final compensation (AFC) times credited service
prior to October 1, 2010 plus 3% of average final compensation times credited
service on and after October 1, 2010. Maximum benefit is 100% of AFC. The plan
permits early retirement at age 50 with 6 years of credited service. Employees may
elect to receive their pension benefits in the form of a 10 year certain and life annuity.
If employees terminate before rendering 6 years of credited service, they forfeit the
right to receive the portion of their accumulated plan benefits.
All retirement benefits are annually increased for cost of living at 3 %.
Death and Disability Benefits - Upon the death of any vested member,
whether or not still in active employment, a survivor benefit is payable to the
beneficiary starting when the member would have reached retirement age. The
benefit is equal to the vested pension benefit and is payable for 10 years. A spousal
and/or minor benefit is provided for line of duty death is equal to a minimum of one
half of the members salary for life (spouse) or age 18 (child).
Employees who become totally disabled with at least 8 years of credited service
receive the greater of the accrued pension benefit or 25% of AFC, if non - service
incurred, or 42% of AFC, if active service incurred. Effective December 9, 2004,
the active service related benefit was increased to 65 %.
NORTH NAPLES FIRE CONTROL AND RESCUE DISTRICT Page 37 of 68
NOTES TO THE FINANCIAL STATEMENTS
September 30, 2012
NOTE G - RETIREMENT PLANS, CONTINUED
Plan 2 - Plan Description and Provisions - Firefighters' Pension Trust Fund,
continued
Supplemental Benefits - Effective December 31, 2004, each service and
disability retiree and their joint pensioners or beneficiaries and vested terminated
members shall receive a supplemental payment to be used as a health insurance
subsidy payment. The amount shall be five dollars ($5) for each full year of credited
service for life. The maximum monthly supplement is one hundred fifty dollars ($150)
and the minimum thirty dollars ($30).
Income Recognition - Interest income is recorded on the accrual basis. Investments
are reported at market value. Short-term investments are reported at cost, which
approximates market value.
Actuarial Present Value of Accumulated Plan Benefits - Accumulated plan
benefits are those future periodic payments, including lump -sum distributions, that
are attributable under the Plan's provisions to the service employees have rendered.
Accumulated plan benefits include benefits expected to be paid to (a) retired or
terminated employees or their beneficiaries, (b) beneficiaries of employees who have
died, and (c) present employees or their beneficiaries. Benefits under the Plan are
based on employees' age at entry to the Plan and are based upon the current starting
salary for firefighters at entry level. Benefits payable under all circumstances,
retirement, death, disability and termination of employment, are included, to the
extent they are deemed attributable to employee service rendered to the valuation
date.
The actuarial present value of accumulated plan benefits is determined by an actuary
and is the amount that results from applying actuarial assumptions to adjust the
accumulated plan benefits to reflect the time value of money (through discounts for
interest) and the probability of payment (by means of decrements such as for death,
disability, withdrawal, or retirement) between the valuation date and the expected
date of payment. The significant actuarial assumptions used in the valuations as of
October 1, 2010 were (a) life expectancy of participants - RP 2000 (combined
healthy, sex distinct) Mortality Table was used, (b) retirement age assumptions (the
assumed average retirement age was 55), and (c) annual investment return of 8 %.
The October 1, 2011 actuarial valuation reflected assumed average rates of return of
8 %. The foregoing actuarial assumptions are based on the presumption that the Plan
NORTH NAPLES FIRE CONTROL AND RESCUE DISTRICT Page 38 of 68
NOTES TO THE FINANCIAL STATEMENTS
September 30, 2012
NOTE G - RETIREMENT PLANS, CONTINUED
Plan 2 - Plan Description and Provisions - Firefighters' Pension Trust Fund,
continued
will continue. If the Plan terminated, different actuarial assumptions and other factors
might be applicable in determining the actuarial present value of accumulated plan
benefits.
Payment of Benefits - Benefit payments to participants are recorded upon
distribution. The District contributed 100% of the required contributions. A summary
of certain Plan details and trend information is included below.
A copy of the Plan and Plan audit for September 30, 2012 can be obtained by
writing the District at 1885 Veterans Park Drive, Naples, Florida 34109 -0492, or by
calling (239) 597 -3222.
The following is a summary of the Single Employer - Defined Benefits Plan (Florida
Statutes Chapter #175), including funding policies, contribution methods, benefit
provisions and trend information:
Year established and
governing authority
Governing body
Determination of contribution
requirements:
Employer (District)
Plan members
Firefighters' Pension
Trust Fund - Plan 2
District Resolution 96- 004 (July 11,
1996)
Board of Trustees of Plan
Actuarially determined
Amount required in excess of
Member and applicable State
contributions needed in order to pay
current costs and amortize any
unfunded past service cost over 30
years
3.0% of covered payroll
NORTH NAPLES FIRE CONTROL AND RESCUE DISTRICT Page 39 of 68
NOTES TO THE FINANCIAL STATEMENTS
September 30, 2012
NOTE G - RETIREMENT PLANS, CONTINUED
Plan 2 - Plan Description and Provisions - Firefighters' Pension Trust Fund,
continued
Firefighters' Pension
Trust Fund - Plan 2
Funding of administrative
costs Employer
Period required to vest 6 years
Annual salary increase 6%
Post retirement benefit
increase
Cost of living increase of of 3%
each year
Eligibility for distribution
(Normal retirement)
Earlier of 55 with 6 years of credited
service or 25 years credited service
regardless of age
Provisions for:
Disability benefits
Yes
Death benefits
Yes
Early retirement
Yes
NORTH NAPLES FIRE CONTROL AND RESCUE DISTRICT Page 40 of 68
NOTES TO THE FINANCIAL STATEMENTS
September 30, 2012
NOTE G - RETIREMENT PLANS, CONTINUED
Plan 2 - Plan Description and Provisions - Firefighters' Pension Trust Fund,
continued
Memberships of the Plan consisted of the following at October 1, 2011:
Firefighters' Pension
Trust Fund - Plan 2
Active plan participants
Vested 58
Non - vested 42
Retirees and beneficiaries
receiving benefits 0
Terminated Plan members entitled
to but not yet receiving benefits 6
Total 106
Number of participating employers 1
Number of participating state agencies 1
Annual Pension Cost, Net Pension Obligation and Reserves
Current year annual pension costs for the Firefighters' Pension Trust Fund are shown
in the trend information provided. The Firefighters' Pension Trust Fund had a net
unfunded actuarial accrued liability at October 1, 2011 of ($42,199).
The Plan assets are legally reserved for the payment of the respective plan member
benefits within the Plan. There are no assets legally restricted for plan benefits other
than these assets within the Plan. The Firefighters' Pension Trust Fund held certain
investments at year end.
NORTH NAPLES FIRE CONTROL AND RESCUE DISTRICT Page 41 of 68
NOTES TO THE FINANCIAL STATEMENTS
September 30, 2012
NOTE G - RETIREMENT PLANS, CONTINUED
Plan 2 - Plan Description and Provisions - Firefighters' Pension Trust Fund
continued
Trend Information
Pension Trust Required Supplementary Information
Schedule of Funding_
Progress Firefighters'
Pension Plan:
Firefighters' Pension Trust Fund
Total (1)
Unfunded
Required
Actuarial
Actuarial
Net
UAAL as a
Annual
District
State
State (2)
Accrued
Pension
Fiscal
Pension
Required
Required
Frozen
Actual
Percentage Obligation
Year
Contribution
Contribution
Contribution
Contribution
Contribution
Contributed (NPO)
2011
$ 3,473,598
$ 2,333,799
$ 1,139,799
$1,746,716
$ 3,626,125
104% -
2010
$ 3,190,997
$ 2,170,443
$ 1,020,554
$1,746,716
$ 3,200,901
100% -
2009
$ 2,796,158
$ 1,756,228
$ 1,039,931
$1,746,716
$ 3,079,738
110% -
2008
$ 2,211,933
$ 1,009,715
$ 1,485,798
$1,485,798
$ 2,495,513
113% -
2007
$ 2,132,248
$ 2,019,430
$ 1,390,449
$ 112,818
$ 2,132,248
100% -
2006
$ 1,178,959
$ 1,066,141
$ 733,516
$ 112,818
$ 1,178,959
100% -
2005
$ 1,000,009
$ 887,191
$ 608,709
$ 112,818
$ 1,000,009
100% -
2004
$ 792,577
$ 679,759
$ 527,004
$ 112,818
$ 792,577
100% -
(1)
The District considers its annual pension cost to be its actuarially
determined required
10/01/05
annual pension contribution including the employer and state contribution.
(2)
The Plan's State frozen limit for 2011, 2010 and 2009 was
$1,746,716.
93.2%
Pension Trust Required Supplementary Information
Schedule of Funding_
Progress Firefighters'
Pension Plan:
Unfunded
Actuarial
Actuarial
Actuarial
UAAL as a
Value of
Accrued
Accrued
Annual
Percentage of
Actuarial
Assets
Liability (AAL)
Liability
Funded
Covered
Covered
Valuation
(AVA)
-Entry Age
(UAAL)
Ratio
Payroll
Payroll
Date
(a)
(b)
(b -a)
(alb)
(c)
(b -a)/c
10 /01 /11
$26,196,164
$26,153,965
$
(42,199)
100.2%
$ 8,291,830
-0.5%
10 /01 /10
$22,990,534
$23,284,830
$
294,296
98.7%
$ 7,737,940
3.8%
10/01/09
$17,833,111
$18,108,267
$
275,156
98.5%
$ 7,522,834
3.7%
10/01/08
$16,719,426
$16,890,153
$
170,727
99.0%
$ 7,082,194
2.4%
10/01/07
$12,904,948
$12,884,785
$
(20,163)
100.2%
$ 7,276,954
-0.3%
10/01/06
$ 8,572,161
$ 9,025,001
$
452,840
95.0%
$ 5,960,908
7.6%
10/01/05
$ 6,322,176
$ 6,783,798
$
461,622
93.2%
$ 3,815,952
12.1%
10/01/04
$ 4,063,514
$ 4,991,512
$
927,998
81.4%
$ 3,300,680
28.1%
NORTH NAPLES FIRE CONTROL AND RESCUE DISTRICT Page 42 of 68
NOTES TO THE FINANCIAL STATEMENTS
September 30, 2012
NOTE G - RETIREMENT PLANS, CONTINUED
Plan 2 - Plan Description and Provisions - Firefighters' Pension Trust Fund,
continued
Valuation date
Actuarial cost method
Amortization method
Mortality table
Remaining amortization period
Actuarial asset valuation method
Actuarial assumptions:
Investment rate
Projected salary increase*
*Includes inflation at
Post retirement cost of living
adjustment
Firefighters' Pension
Trust Fund
10 /01 /11
Frozen Entry Age
Level dollar, closed
RP2000
27 years (as of 10/1/09)
Market
8%
6%
3%
3%
NOTE H - POST - EMPLOYMENT BENEFITS OTHER THAN PENSION BENEFITS (OPEB)
The District formally established two (2) OPEB Plans to provide its retirees the
opportunity to obtain insurance (health, dental, life and vision) benefits. The year
ended September 30, 2010, was the District's transition year. As such, the District
implemented GASB No. 45 on a prospective basis. All retired full -time employees
are eligible for OPEB benefits if actively employed by the District immediately before
retirement. As such, active employees with at least twenty five (25) years of service
as of September 30, 2010 were allowed to elect to remain in the Defined Benefit
Plan or to enter the Post Employment Health Plan (PEHP) a defined contribution
plan. All retirees and Early Retirement Incentive Program (ERIP) participants, who
were eligible, remained in the Defined Benefit Plan. All other active employees at
that time, September 30, 2010, as well as future employees entered the PEHP.
The benefits are provided both with and without contractual or labor agreements.
The benefits may require contribution from the retirees, depending on certain
specified criteria and, in particular, length of creditable employment. The District
finances the benefits on a pay -as- you -go basis and recognizes expenditures at the
time the premiums are due for both Plans.
NORTH NAPLES FIRE CONTROL AND RESCUE DISTRICT Page 43 of 68
NOTES TO THE FINANCIAL STATEMENTS
September 30, 2012
NOTE H - POST - EMPLOYMENT BENEFITS OTHER THAN PENSION BENEFITS
(OPEB), CONTINUED
Defined Benefit Plan
Specifically, the Defined Benefit Plan provides that the District will pay a portion of
medical and dental premiums for retirees depending on their years of credited service
starting with the completion of fifteen (15) years of credited service. As such, the
District pays 50% of the employee's premium and 25% of the spouse's premium at
15 years of service progressing to 100% of the employee's premium and 50% of the
spouse's premium upon completion of 25 years of service. The District also pays the
premium associated with a $5,000 life insurance benefit and offers access to a vision
plan for which the retiree is expected to pay the full premium.
During fiscal years 2009 and 2010, the District offered two (2) separate Early
Retirement Incentive Programs (ERIP) to a number of active employees. A portion
of the programs includes full payment of premiums associated with medical, dental,
vision and life insurance coverage, including dependent coverage for a period of 3
years. After the 3 year period ends, the ERIP participants will receive the Defined
Benefit Plan benefits they had been eligible for at termination.
Note that the projected premiums for the dental, vision and life benefits are assumed
to cover the entire cost of the program.
Post Employment Health Plan (PEHP)
The PEHP is a defined contribution plan administered by the District.
All current employees who did not elect to remain in the Defined Benefit Plan, and all
future active employees will be participants in the PEHP.
Participants in the PEHP have $7,000 deposited on their behalf into a trust account
on the 20th anniversary of their date of hire and on each subsequent anniversary.
Additionally, those participants who have over 20 years of credited service at their
date of retirement will also receive a $30,000 deposit on their behalf at date of
separation. Effective October 1, 2012, the Plan was changed to limit District
contributions to $50,000 per employee.
The PEHP is designed to offer similar benefits to those offered under the Defined
Benefit Plan.
NORTH NAPLES FIRE CONTROL AND RESCUE DISTRICT Page 44 of 68
NOTES TO THE FINANCIAL STATEMENTS
September 30, 2012
NOTE H - POST - EMPLOYMENT BENEFITS OTHER THAN PENSION BENEFITS
(OPEB), CONTINUED
Post Employment Health Plan (PEHP), continued
The District, as part of the PEHP, entered a group variable annuity contract. As
such, the PEHP Plan's asset custodian and third party administrator is the insurance
company through which the annuity is contracted.
General - Funding Policy
The District paid $221,717 for retiree's and ERIP participants' health care premiums
as part of the Defined Benefit Plan on a pay -as- you -go basis for the year ended
September 30, 2012.
The District also contributed $154,000 to the PEHP Plan for the year ended
September 30, 2012.
No separate trust has been established for either Plan. No separate financial
statement is issued for either OPEB Plan. All required disclosures are presented
herein. The District obtained an actuarial valuation for its OPEB Plans to measure the
current year's subsidies and project these subsidies into the future, making an
allocation of that cost to different years. The following schedule of funding progress
presents multi -year trend information about whether the actuarial value of plan assets
is increasing or decreasing over time relative to the actuarial accrued liability for
benefits.
NORTH NAPLES FIRE CONTROL AND RESCUE DISTRICT Page 45 of 68
NOTES TO THE FINANCIAL STATEMENTS
September 30, 2012
NOTE H - POST - EMPLOYMENT BENEFITS OTHER THAN PENSION BENEFITS
(OPEB), CONTINUED
General - Funding
Policy, continued
Actual
Percentage of
Schedule of Funding Progress
- Defined Benefit Plan
Annual Cash
Cash
Annual OPEB
Net OPEB
Ended
Unfunded
Payment
Cost
Obligation
9/30/2012
Actuarial
$
Actuarial
60.8%
$ 639,538
UAAL as a
(1)
Value of
Actuarial
Accrued
$ 440,921
Annual
Percentage of
Actuarial
Assets
Accrued
Liability
Funded
Covered
Covered
Valuation
(AVA)
Liability (AAL)
(UAAL)
Ratio
Payroll
Payroll
Date
(a) (b)
(b -a)
(a/b)
(c)
(b -a) /c
10 /01 /11
$
- $ 6,882,021
$6,882,021
0.0%
$ 1,057,211
651.0%
10/01/10
$
- $ 6,787,805
$6,787,805
0.0%
$ 1,057,211
642.0%
10/01/09
$
- $ 6,677,408
$6,677,408
0.0%
$ 1,057,211
631.6%
(1) - Initial actuarial valuation dated 10/1/09 (transition year)
Schedule of Contributions from Employer - Three Year Trend - Defined Benefit Plan
Expected
Actual
Percentage of
Year
Annual Cash
Cash
Annual OPEB
Net OPEB
Ended
OPEB Cost Payment
Payment
Cost
Obligation
9/30/2012
$ 506,731 $ 308,114
$
221,717
60.8%
$ 639,538
9/30/2011
$ 497,105 $ 281,789
$
227,483
56.7%
$ 440,921
09/30/10
$ 493,106 $ 263,804
$
267,501
53.5%
$ 225,605
Note: Actuarial projection for the PEHP is N/A
NORTH NAPLES FIRE CONTROL AND RESCUE DISTRICT Page 46 of 68
NOTES TO THE FINANCIAL STATEMENTS
September 30, 2012
NOTE H - POST - EMPLOYMENT BENEFITS OTHER THAN PENSION BENEFITS
(OPEB), CONTINUED
Annual OPEB Cost and Net OPEB Obligation
The annual OPEB cost is the amount that was expensed in the current year. Since
the District's Defined Benefit Plan is unfunded, the offset to that expense comes from
subsidies paid on behalf of the current retirees and their dependents for the current
year. This offset is called the expected cash payment. The cumulative difference
between the annual OPEB cost for the year and the expected cash payment is called
the net OPEB obligation (NOO). The net OPEB obligation is reflected as a liability
in the Statement of Net Assets. The following table shows the components of the
District's annual OPEB cost for the year and the net OPEB obligation.
Fiscal year ended September 30, 2012
Annual required contribution (ARC)
Adjustment to ARC
Plus interest on NOO
Annual OPEB cost
Annual Net contribution made
Expected cash payment
Defined
Benefit
Plan
$513,414
(26,524)
19,841
506,731
221,717
PEHP
$ 154,000
154,000
Total
$667,414
(26,524)
$ 19,841
660,731
221,717
(308,114 154,000 (462,114
Yearly change in OPEB obligation 198,617 - 198,617
Net OPEB obligation - beginning of year 440,921 - 440,921
Net OPEB obligation - end of year $639,538 $ - $639,538
Actuarial valuations of an ongoing plan involve estimates of the value of reported
amounts and assumptions about the probability of occurrence of events far into the
future. Examples include assumptions about future employment, mortality, and
healthcare cost trend. Amounts determined regarding the funding status of a plan and
the annual required contributions of the employer are subject to continual revision as
actual results are compared with past expectations and new estimates are made
about the future.
NORTH NAPLES FIRE CONTROL AND RESCUE DISTRICT Page 47 of 68
NOTES TO THE FINANCIAL STATEMENTS
September 30, 2012
NOTE H - POST - EMPLOYMENT BENEFITS OTHER THAN PENSION BENEFITS
(OPEB), CONTINUED
Actuarial Methods and Assumptions
Projections of benefits for financial reporting purposes are based on the substantive
plans (the plans as understood by the employer and plan members) and include the
types of benefits provided at the time of the valuation and the historical pattern of
sharing of benefit costs between the employer and plan members. The actual
methods and assumptions used include techniques that are designed to reduce the
effects of short-term volatility in actuarial accrued liabilities and the actuarial valuation
of assets, consistent with the long -term perspective of the calculations.
In the October 1, 2011 actuarial valuation, the projected credit unit cost method with
linear pro- ration to assumed benefit commencement was used. The actuarial
assumptions included a 4.5 percent investment rate of return. Since there are no
invested plan assets held in trust to finance the Defined Benefit Plan - OPEB
obligations, the investment return discount rate is the long -term expectation of
investment return on assets held in District funds pursuant to its investment policy.
The assumptions also included an annual healthcare cost trend using 6% in 2012
declining by 1% per year to 5% in 2013. Dental care at 6% per year. Life insurance
at 0% per year. The unfunded actuarial accrued liability, as calculated, is being
amortized over a closed period of 30 years as a level percent of payroll. The
assumed rate of payroll growth is 6.0 percent. The funding method is the entry age
normal actuarial cost method (level percent of pay).
NOTE I - RISK MANAGEMENT
The District began participating in a self - insurance program for health and dental
insurance claims beginning January 1, 2005 and continued to do so through
December 31, 2008.
Beginning January 1, 2009, the District converted to a fully funded third party insured
health plan; however, dental remained a self - insurance plan. Maximum benefit per
participant was $1,500 per year, which included employees, spouses, and family.
NORTH NAPLES FIRE CONTROL AND RESCUE DISTRICT Page 48 of 68
NOTES TO THE FINANCIAL STATEMENTS
September 30, 2012
NOTE I - RISK MANAGEMENT, CONTINUED
Vision insurance was added to the benefits offered and was not a self - insurance plan.
In addition, the District added a policy for reimbursement of the cost of certain
over - the - counter medications in lieu of prescriptions. There is no stated maximum
amount that will be reimbursed for prescriptions.
Beginning October 1, 2010, the District changed to a high deductible health plan and
eliminated the dental and vision plans offered to employees and retirees. The District
also established a flexible spending plan for its employees. The District contributes
$3,000 per eligible participant to the plan annually. Participants may also elect to
contribute to the plan on a pre -tax basis. Participant contributions that are not utilized
by the grace period following the year end are forfeited. District contributions that are
not utilized by the grace period following the year end are divided evenly among the
participants and added to the District's contribution for the subsequent year. The
District has recorded $60,130, as part of accrued liabilities for flexible spending
owed to employees.
The District incurred $1,738,107 in claims, third party administration costs, premiums
and reinsurance premiums during the fiscal year ending September 30, 2012, for the
self - insurance and fully- funded insurance programs.
It is the policy of the District to purchase third party commercial insurance for other
remaining forms of potential risks to which it is exposed. The District's risk
management activities are reported in the General Fund. No accrual has been
recorded for claims and incidents not reported to the insurer. The District had no
significant reductions in insurance coverage from the prior year. Reported claims
have not exceeded the insurance coverage for the years ended September 30, 1998
through September 30, 2012.
NOTE J - PROPERTY TAXES
Property taxes are levied after formal adoption of the District's budget and become
due and payable on November 1 of each year and are delinquent on April 1 of the
following year. Discounts on property taxes are allowed for payments made prior to
the April 1 delinquent date. Tax certificates are sold to the public for the full amount
of any unpaid taxes and must be sold not later than June 1 of each year. The billing,
NORTH NAPLES FIRE CONTROL AND RESCUE DISTRICT Page 49 of 68
NOTES TO THE FINANCIAL STATEMENTS
September 30, 2012
NOTE J - PROPERTY TAXES, CONTINUED
collection, and related record keeping of all property taxes is performed for the
District by the Collier County Tax Collector. No accrual for the property tax levy
becoming due in November 2012 is included in the accompanying basic financial
statements, since such taxes are collected to finance expenditures of the subsequent
period.
Procedures for collecting delinquent taxes, including applicable tax certificate sales
and tax deed sales, are provided for by Florida Statutes. The enforceable lien date is
approximately two years after taxes become delinquent and occurs only upon request
of a holder of a delinquent tax certificate. As of September 30, 2012, $163,575 was
recorded in the General Fund and was due from the Collier County Tax Collector to
the District for ad valorem taxes and excess fees, and interest.
Important dates in the property tax cycle are as follows:
Assessment roll certified
Millage resolution approved
Taxes due and payable (Levy date)
Property taxes payable - maximum
discount (4 percent)
Beginning of fiscal year for which
taxes have been levied
Due date
Taxes become delinquent (lien date)
Tax certificates sold by the Collier
County Tax Collector
July 1
No later than 93 days following
certification of assessment roll.
November /with various discount
provisions through March 31.
30 days after levy date
October 1
March 31
April 1
Prior to June 1
For the year ended September 30, 2012, the Board of Commissioners of the District
levied ad valorem taxes at a millage rate of $1.00 per $1,000 (1.00 mill) of the 2011
net taxable value of real property located within the District.
NORTH NAPLES FIRE CONTROL AND RESCUE DISTRICT Page 50 of 68
NOTES TO THE FINANCIAL STATEMENTS
September 30, 2012
NOTE K - ASSIGNED AND /OR RESERVED FUND BALANCE/NET ASSETS
Fund Balance/Net Assets were assigned/reserved for the following purposes at
September 30, 2012:
Assigned fund balance - General Fund Amount
General Fund - 2012 - Expenses- Oct- Dec $ 6,500,000
General Fund - 2012 -2013 Expenditures over revenue 2,000,000
General Fund - 2013 -2014 Expenditures over revenue 1,546,460
General Fund - Emergency Reserve 2,223,330
General Fund - Fire Apparatus 1,074,595
General Fund - SCBA replacement 160,000
General Fund - ALS 226,344
General Fund - Station #46 improvements 20,900
Total General Fund $ 13,751,629
Reserved Net Assets Amount
Firefighters' Pension Fund - firefighters' retirement benefits $ 33,985,436
NOTE L - IMPACT FEE FUND ACTIVITY
During the year ended September 30, 2012, the Impact Fee Fund had the following
activity:
Amount
Deferred revenue, October 1, 2011 $ 1,015,658
Impact fee receipts (1) 360,328
Interest income 7,993
Operating fees - collection fees (5,403)
Capital outlay (415,560)
Deferred revenue, September 30, 2012 $ 963,016
(1) Including Impact fee receipts due from other governments of $24,085.
NORTH NAPLES FIRE CONTROL AND RESCUE DISTRICT Page 51 of 68
NOTES TO THE FINANCIAL STATEMENTS
September 30, 2012
NOTE M - TERMINATION BENEFITS
During the year ended September 30, 2009, the District offered an Early Retirement
Incentive Package (ERIP 1) to all sworn employees 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 effective
date, as selected by each employee, was to be no later than ninety (90) days after the
employee's anniversary date occurring between October 1, 2008 and September 30,
2009 but under no circumstances could the effective date be later than September
30, 2009.
The ERIP1 package offered one (1) year's base salary and professional pay
incentives, and payout of the balance of accrued unused sick, vacation, and holiday
pay where applicable. The ERIP 1 package also allowed for the use of any unused
personal and/or Column D time, provided the use of such time was completed prior
to the commencement of the Early Retirement Incentive option, no later than ninety
days after the employee's anniversary date, or no later than September 30, 2009,
whichever was the earliest.
Additionally, each eligible employee that chose the ERIP 1 option received the
same health, vision and dental insurance as bargaining unit employees for employee,
spouse, and their dependents, paid one hundred percent (100 %) by the District for
three (3) years from the beginning of the each employee's Early Retirement Incentive
Package effective date. The District also continued 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 ERIP 1 option could choose to receive the payout
of the base salary and professional incentives in one (1) or two (2) lump sum
payments, or to receive the amount incrementally over twenty four (24) pay periods.
If the incremental payout was selected, the payment of the balance of accrued,
unused sick, vacation, and holiday pay would be paid on the twenty fourth (24th)
incremental payment. If the lump sum payment option was chosen, the payment of
the balance of the accrued, unused sick, vacation, and holiday pay was paid on dates
selected by each employee between their Early Retirement Incentive option effective
date and September 30, 2009.
NORTH NAPLES FIRE CONTROL AND RESCUE DISTRICT Page 52 of 68
NOTES TO THE FINANCIAL STATEMENTS
September 30, 2012
NOTE M - TERMINATION BENEFITS, CONTINUED
Employees selecting the incremental payout were also credited one (1) year of service
to be included in the calculation of the retiree health insurance benefit pursuant to
District Policy Section 14.05.
Thirteen (13) District employees elected to accept the ERIP1 package. Two (2) of
the thirteen (13) employees chose a single lump sum payment, two (2) chose two (2)
lump sum payments, and the remaining nine (9) chose to be paid incrementally over
twenty four (24) pay periods (twelve (12) months). The total cost of the ERIP1
benefits was estimated to be $2,157,471 consisting of $76,597 paid during the year
ended September 30, 2012 which represents the final payments due by the District.
During the year ended September 30, 2010, the District offered an additional Early
Retirement Incentive Package (ERIP2) to all sworn employees 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
effective date, as selected by each employee, was to be no later than ninety (90) days
after the employee's anniversary date occurring between August 31, 2010 and July
July 31, 2011.
The ERIP2 package offered one (1) year's base salary and professional pay
incentives, and payout of the balance of accrued unused sick, vacation, and holiday
pay where applicable. The ERIP2 package also allowed for the use of any unused
personal and/or Column D time, provided the use of such time was completed prior to
the commencement of the Early Retirement Incentive option, no later than ninety days
after the employee's anniversary date, or no later than July 31, 2011, whichever was
the earliest.
Additionally, each eligible employee that chose the ERIP2 option received the same
health, vision and dental insurance benefits as bargaining unit employees for
employee, spouse, and their dependents, for three (3) years from the beginning of the
each employees' Early Retirement Incentive Package effective date. The District also
continued to provide life insurance for the employee for twelve (12) months
immediately following the employee's Early Retirement Incentive Package effective
date.
NORTH NAPLES FIRE CONTROL AND RESCUE DISTRICT Page 53 of 68
NOTES TO THE FINANCIAL STATEMENTS
September 30, 2012
NOTE M - TERMINATION BENEFITS, CONTINUED
Each eligible employee selecting the ERIP2 option could choose to receive the
payout of the base salary and professional incentives in one (1) or two (2) lump sum
payments, or to receive the amount incrementally over twenty four (24) pay periods.
If the incremental payout was selected, the payment of the balance of accrued,
unused sick, vacation, and holiday pay would be paid on the twenty fourth (24th)
incremental payment or upon entry into the FRS DROP. If the lump sum payment
option was chosen, the payment of the balance of the accrued, unused sick, vacation,
and holiday pay was paid on dates selected by each employee between their Early
Retirement Incentive option effective date and July 31, 2011.
Employees selecting the incremental payout were also credited one (1) year of
service to be included in the calculation of the retiree health insurance benefit
pursuant to District Policy Section 14.05.
Employees selecting the incremental payout could, at anytime during the payment of
the incremental pay periods, elect to receive the balance of payments due in one
remaining lump sum. If such elections were made, at the time the lump sum payment
was made, all further monies due to the employee were be paid.
As of September 30, 2010, no employees had elected to take the Early Retirement
Incentive package.
During the year ended September 30, 2011, seven (7) District employees elected to
accept the ERIP2 package. One (1) employee chose a single lump sum payment,
two (2) chose two (2) lump sum payment, and the remaining four (4) chose to be
paid incrementally over twenty -four (24) pay periods (twelve (12) months). The total
cost of the ERIP2 benefits was estimated to be $1,212,382 and consisted of $588,201 paid
during the year ended September 30, 2012, $63,882 included in the
government -wide statements as current portion of long term debt, and $48,451
included in non - current portion of long term debt. Final payment of benefits relating
to ERIP2 will occur during July 2014. The estimated cost for fiscal years 2012,
2013 and 2014 are based on current rates for health insurance coverages and do
not include any rate increases as any increase cannot be readily estimated.
NORTH NAPLES FIRE CONTROL AND RESCUE DISTRICT Page 54 of 68
NOTES TO THE FINANCIAL STATEMENTS
September 30, 2012
NOTE M - TERMINATION BENEFITS, CONTINUED
The estimated cost for the seven (7) participants that elected to accept the ERIP2
package over the next three (3) years is as follows:
Year Ending
9/30/2013
9/30/2014
Estimated Cost
$ 63,882
48,451
$ 112,333
NOTE N - COMMITMENTS AND CONTINGENCIES
The District is involved from time to time in certain routine litigation, the substance
of which either as liabilities or recoveries, would not materially affect the financial
position of the District. Although the final outcome of the lawsuits, assertions, and
claims or the exact amount of costs and/or potential recovery is not presently
determinable, in the opinion of the District's legal counsel, the resolution of these
matters will not have a materially adverse affect on the financial condition of the
District. As a general policy, the District plans to vigorously contest any such
matters.
NOTE O - SUBSEQUENT EVENT
The District elected to waive assessment and collection of impact fees for fiscal year
2013 in an effort to stimulate construction within the District.
REQUIRED SUPPLEMENTARY
INFORMATION
OTHER THAN MD &A
NORTH NAPLES FIRE CONTROL AND RESCUE DISTRICT
Page 55 of 68
STATEMENT OF REVENUES, EXPENDITURES AND CHANGES IN
FUND BALANCE - BUDGET AND
ACTUAL - GENERAL FUND -
SUMMARY STATEMENT
Year Ended September 30, 2012
General Fund
Variance
Original
Final
Favorable
Budget
Budget
Actual
(Unfavorable)
REVENUES
Ad Valorem taxes $
21,085,731 $
21,551,549
$ 21,551,797
$ 248
Intergovernmental revenue
-
-
34,376
34,376
Charges for services
85,000
85,000
103,394
18,394
Miscellaneous:
Interest
185,000
172,261
138,501
(33,760)
Other
250,517
263,257
225,519
(37,738)
Subtotal - revenues
21,606,248
22,072,067
22,053,587
(18,480)
Cash brought forward
13,560,615
13,926,573
-
(13,926,573)
TOTAL REVENUES
35,166,863
35,998,640
22,053,587
(13,945,053)
EXPENDITURES
Current
Public safety
Personnel services
20,213,137
20,144,137
19,003,975
1,140,162
Operating expenditures
3,127,386
3,127,386
3,038,671
88,715
Capital outlay
164,000
233,000
216,215
16,785
Debt service
Principal reduction
-
-
-
-
Interest and fiscal charges
-
-
-
-
Reserves
11,662,340
12,494,117
-
12,494,117
TOTAL EXPENDITURES
35,166,863
35,998,640
22,258,861
13,739,779
EXCESS OF REVENUES
OVER (UNDER) EXPENDITURES
-
-
(205,274)
(205,274)
OTHER FINANCING SOURCES
Proceeds from disposition of capital assets - - 30,330 30,330
Proceeds from capital lease - - - -
TOTAL OTHER FINANCING SOURCES - - 30,330 30,330
EXCESS OF REVENUES AND
OTHER FINANCING SOURCES
OVER (UNDER) EXPENDITURES $ - $ - (174,944) $ (174,944
FUND BALANCE - Beginning 13,926,573
FUND BALANCE - Ending $ 13,751,629
The accompanying notes are an integral part of this statement.
NORTH NAPLES FIRE CONTROL AND RESCUE DISTRICT
STATEMENT OF REVENUES, EXPENDITURES AND
CHANGES IN FUND BALANCE - BUDGET AND ACTUAL
GENERAL FUND - DETAILED STATEMENT
Year Ended September 30, 2012
REVENUES
Ad Valorem taxes
Intergovernmental revenue
Charges for services
Miscellaneous:
Interest
Other
Subtotal - revenues
Cash brought forward
General Fund
Page 56 of 68
185,000
172,261
138,501
Variance
Original
Final
225,519
Favorable
Budget
Budget
Actual
(Unfavorable)
$ 21,085,731 $
21,551,549 $
21,551,797
$ 248
-
-
34,376
34,376
85,000
85,000
103,394
18,394
185,000
172,261
138,501
(33,760)
250,517
263,257
225,519
(37,738)
21,606,248
22,072,067
22,053,587
(18,480)
13,560,615
13,926,573
-
(13,926,573)
TOTAL REVENUES 35,166,863
35,998,640
22,053,587
(13,945,053)
EXPENDITURES
Current
Public safety
Personnel services:
Salaries
Firefighters & Admin.
11,558,313
11,558,313
11,419,795
138,518
Commissioners
30,000
30,000
30,000
-
Overtime
718,146
674,146
677,127
(2,981)
Vacation
59,000
34,000
46,734
(12,734)
Sick leave
527,000
527,000
465,432
61,568
Incentives and holiday pay
463,866
463,866
461,683
2,183
Payroll taxes
Social Security
1,023,875
1,023,875
951,737
72,138
Benefits
Retirement
3,195,117
3,195,117
2,723,279
471,838
Health insurance
1,977,820
1,977,820
1,738,107
239,713
Disability insurance
45,000
45,000
42,482
2,518
Unemployment insurance
5,000
5,000
-
5,000
Workers compensation
390,000
390,000
289,715
100,285
Employee physicals
35,000
35,000
3,024
31,976
Post employment health plan
184,000
184,000
154,000
30,000
Retirement recognition
1,000
1,000
860
140
Subtotal - Personnel services
20,213,137
20,144,137
19,003,975
1,140,162
The accompanying notes are an integral part of this statement.
NORTH NAPLES FIRE CONTROL AND RESCUE DISTRICT Page 57 of 68
STATEMENT OF REVENUES, EXPENDITURES AND
CHANGES IN FUND BALANCE - BUDGET AND ACTUAL
GENERAL FUND - DETAILED STATEMENT (CONTINUED)
Year Ended September 30, 2012
The accompanying notes are an integral part of this statement.
General Fund
Variance
Original
Final
Favorable
Operating expenditures:
Budget
Budget
Actual
(Unfavorable)
Insurance
265,000
265,000
267,527
(2,527)
Uniforms
40,000
40,000
59,328
(19,328)
Communications
10,300
10,300
14,783
(4,483)
Telephone
176,400
176,400
155,744
20,656
Utilities
200,000
200,000
190,876
9,124
Maintenance
Vehicle
360,000
410,000
423,379
(13,379)
Equipment
36,700
36,700
43,579
(6,879)
Computer
116,565
116,565
156,682
(40,117)
Hydrant
90,000
90,000
101,160
(11,160)
Building
266,500
266,500
172,016
94,484
Supplies
Office
28,000
28,000
31,344
(3,344)
Protective gear
39,000
39,000
64,295
(25,295)
Station
30,000
30,000
29,217
783
Emergency medical
63,600
63,600
71,598
(7,998)
Hurricane /emergency
5,000
5,000
2,079
2,921
Equipment
Office
41,350
41,350
24,044
17,306
Fire
55,000
55,000
54,964
36
Shop
7,000
7,000
15,053
(8,053)
Warehouse /logistics
1,000
1,000
225
775
Professional and other fees
Legal and professional
230,000
230,000
187,812
42,188
Property appraiser fees
195,010
195,010
164,679
30,331
Tax collector fees
424,915
424,915
431,171
(6,256)
Accounting
60,000
60,000
53,030
6,970
Miscellaneous
Travel
5,000
5,000
8,693
(3,693)
Water /sewer fee St. 44
5,000
5,000
5,025
(25)
Public information officer
1,000
1,000
241
759
Public education officer
15,000
15,000
11,972
3,028
Fuel and oil
220,000
220,000
214,442
5,558
Legal advertisements
5,000
5,000
3,798
1,202
Dues and subscriptions
7,896
7,896
5,672
2,224
CERT team
3,000
3,000
2,759
241
Dive team
5,300
5,300
5,080
220
Fire prevention
5,400
5,400
3,879
1,521
Training
41,200
41,200
43,106
(1,906)
Hazardous materials
4,000
4,000
538
3,462
Technical rescue
2,950
2,950
142
2,808
Boat team
5,300
5,300
7,244
(1,944)
K -9 search and rescue
-
-
-
-
Honor guard
-
-
-
OPS
-
-
-
-
Peer fitness
-
-
-
Miscellaneous
10,000
10,000
11,495
(1,495)
Operational Reserves
-
Contingency
50,000
-
-
-
Subtotal - Operating expenditures
3,127,386
3,127,386
3,038,671
88,715
The accompanying notes are an integral part of this statement.
NORTH NAPLES FIRE CONTROL AND RESCUE DISTRICT Page 58 of 68
STATEMENT OF REVENUES, EXPENDITURES AND
CHANGES IN FUND BALANCE - BUDGET AND ACTUAL
GENERAL FUND - DETAILED STATEMENT (CONTINUED)
Year Ended September 30, 2012
Debt service:
Principal reduction - -
Interest and fiscal charges - - -
Subtotal - Debt service - - -
Reserves:
Assigned reserves 11,662,340 12,494,117 - 12,494,117
TOTAL EXPENDITURES 35,166,863 35,998,640 22,258,861 13,739,779
EXCESS OF REVENUES
OVER (UNDER) EXPENDITURES - (205,274) (205,274)
OTHER FINANCING SOURCES
Proceeds from disposition of capital assets - 30,330 30,330
Proceeds from capital lease - - - -
TOTAL OTHER FINANCING SOURCES - - 30,330 30,330
EXCESS OF REVENUES AND
OTHER FINANCING SOURCES
OVER (UNDER) EXPENDITURES $ $ - (174,944) $ (174,944)
FUND BALANCE - Beginning 13,926,573
FUND BALANCE - Ending $ 13,751,629
The accompanying notes are an integral part of this statement.
General Fund
Variance
Original
Final
Favorable
Capital outlay:
Budget
Budget Actual
(Unfavorable)
Land
-
_
_
_
Station improvements
25,000
25,000
7,018
17,982
Fire & rescue equipment
25,000
25,000
21,861
3,139
Protective gear
22,000
91,000
90,589
411
Communication equipment
5,000
5,000
3,865
1,135
Medical equipment
15,000
15,000
14,128
872
Computers
42,000
42,000
44,100
(2,100)
Technical rescue equipment
-
-
-
_
Boat team
-
-
-
_
Vehicle Purchase
30,000
30,000
34,654
(4,654)
Training equipment
-
-
-
-
Shop equipment
-
-
-
Logistics/warehouse
-
-
Hazardous materials equip.
-
-
-
Fire apparatus
-
-
-
Dive equipment
-
-
-
Fire prevention
-
-
-
-
Subtotal - Capital outlay
164,000
233,000
216,215
16,785
Debt service:
Principal reduction - -
Interest and fiscal charges - - -
Subtotal - Debt service - - -
Reserves:
Assigned reserves 11,662,340 12,494,117 - 12,494,117
TOTAL EXPENDITURES 35,166,863 35,998,640 22,258,861 13,739,779
EXCESS OF REVENUES
OVER (UNDER) EXPENDITURES - (205,274) (205,274)
OTHER FINANCING SOURCES
Proceeds from disposition of capital assets - 30,330 30,330
Proceeds from capital lease - - - -
TOTAL OTHER FINANCING SOURCES - - 30,330 30,330
EXCESS OF REVENUES AND
OTHER FINANCING SOURCES
OVER (UNDER) EXPENDITURES $ $ - (174,944) $ (174,944)
FUND BALANCE - Beginning 13,926,573
FUND BALANCE - Ending $ 13,751,629
The accompanying notes are an integral part of this statement.
NORTH NAPLES FIRE CONTROL AND RESCUE DISTRICT
STATEMENT OF REVENUES, EXPENDITURES AND CHANGES IN
FUND BALANCE - BUDGET AND ACTUAL - IMPACT FEE FUND -
SUMMARY STATEMENT
Year Ended September 30, 2012
Page 59 of 68
Impact Fee Fund
Variance
Original Final Favorable
Budget Budget Actual (Unfavorable)
REVENUES
Fees:
Impact fees $ 300,000 $ 300,000 $ 412,970 $ 112,970
Miscellaneous:
Proceeds from Sale of Land - - - -
Interest 6,000 6,000 7,993 1,993
Other - - - -
Subtotal - revenues 306,000 306,000 420,963 114,963
Cash brought forward 799,000 799,000 - (799,000)
TOTAL REVENUES 1,105,000 1,105,000 420,963 (684,037)
EXPENDITURES
Current
Public safety
Operating expenditures 5,000
Capital outlay 1,100,000
Reserves -
5,000 5,403 (403)
1,100,000 415,560 684,440
TOTAL EXPENDITURES 1,105,000 1,105,000 420,963 684,037
EXCESS OF REVENUES
OVER EXPENDITURES $ - $ - - $ -
FUND BALANCE - Beginning -
FUND BALANCE - Ending $
The accompanying notes are an integral part of this statement.
NORTH NAPLES FIRE CONTROL AND RESCUE DISTRICT
STATEMENT OF REVENUES, EXPENDITURES AND
CHANGES IN FUND BALANCE - BUDGET AND ACTUAL
IMPACT FEE FUND - DETAILED STATEMENT
Year Ended September 30, 2012
REVENUES
Fees:
Impact fees
Miscellaneous:
Proceeds from sale of land
Interest
Other
Subtotal - revenues
Cash brought forward
Page 60 of 68
Impact Fee Fund
Variance
Original Final Favorable
Budget Budget Actual (Unfavorable)
$ 300,000 $
300,000 $
412,970
$ 112,970
6,000
6,000
7,993
1,993
306,000
306,000
420,963
114,963
799,000
799,000
-
(799,000)
TOTAL REVENUES 1,105,000
1,105,000
420,963
(684,037)
EXPENDITURES
Miscellaneous:
Refunds - - - -
Impact fee collection 5,000 5,000 5,403 (403)
Subtotal - Operating expenditures 5,000 5,000 5,403 (403)
Capital outlay:
Emergency traffic device - St. 42
New Vehicles 50,000
50,000
33,135 16,865
Station 48 engineering 1,000,000
1,000,000
382,425 617,575
Medical Equipment 50,000
50,000
- 50,000
Subtotal - Capital outlay 1,100,000
1,100,000
415,560 684,440
Reserves:
TOTAL EXPENDITURES 1,105,000 1,105,000 420,963 684,037
EXCESS OF REVENUES
OVER EXPENDITURES $ - $ - - $ -
FUND BALANCE - Beginning
FUND BALANCE - Ending $ -
The accompanying notes are an integral part of this statement.
NORTH NAPLES FIRE CONTROL AND RESCUE DISTRICT Page 61 of 68
STATEMENT OF REVENUES, EXPENDITURES AND CHANGES IN
FUND BALANCE - BUDGET AND ACTUAL - INSPECTION FEE FUND -
SUMMARY STATEMENT
Year ended September 30, 2012
Inspection Fee Fund
Variance
Original Final Favorable
Budget Budget Actual (Unfavorable)
REVENUES
Charges for services $
480,000 $
480,000 $
428,911
$ (51,089)
Miscellaneous:
Interest
1,000
1,000
727
(273)
Subtotal - revenues
481,000
481,000
429,638
(51,362)
Cash brought forward
-
-
-
-
TOTAL REVENUES
481,000
481,000
429,638
(51,362)
EXPENDITURES
Current
Public safety
Personnel services 477,711 477,711 491,879 (14,168)
Operating expenditures - - - -
Capital outlay - - - -
Reserves 3,289 3,289 - 3,289
TOTAL EXPENDITURES 481,000 481,000 491,879 (10,879)
EXCESS OF REVENUES
OVER (UNDER) EXPENDITURES $ - $ - (62,241) $ (62,241)
FUND BALANCE - Beginning 86,960
FUND BALANCE - Ending $ 24,719
The accompanying notes are an integral part of this statement.
NORTH NAPLES FIRE CONTROL AND RESCUE DISTRICT Page 62 of 68
STATEMENT OF REVENUES, EXPENDITURES AND
CHANGES IN FUND BALANCE - BUDGET AND ACTUAL
INSPECTION FEE FUND - DETAILED STATEMENT
Year ended September 30, 2012
The accompanying notes are an integral part of this statement.
Inspection Fee Fund
Variance
Original
Final
Favorable
Budget
Budget
Actual
(Unfavorable)
REVENUES
Charges for services:
Inspection fees $
480,000 $
480,000 $
428,911
$ (51,089)
Miscellaneous:
Interest
1,000
1,000
727
(273)
Subtotal - revenues
481,000
481,000
429,638
(51,362)
Cash brought forward
-
-
-
-
TOTAL REVENUES
481,000
481,000
429,638
(51,362)
EXPENDITURES
Current
Public safety
Personnel services:
Salaries
Regular
434,163
434,163
444,624
(10,461)
Overtime
-
-
-
Professional/Incentives and holiday pay
9,600
9,600
12,300
(2,700)
Payroll taxes
Social Security
33,948
33,948
34,955
(1,007)
Benefits
Retirement
-
-
-
-
Health insurance
-
-
-
Disability insurance
-
-
-
-
Vacation
-
-
-
-
Sick leave
-
-
-
-
Unemployment compensation
-
-
-
-
Workers compensation
- _
-
-
-
Subtotal - Personnel services
477,711
477,711
491,879
(14,168)
The accompanying notes are an integral part of this statement.
NORTH NAPLES FIRE CONTROL AND RESCUE DISTRICT
STATEMENT OF REVENUES, EXPENDITURES AND
CHANGES IN FUND BALANCE - BUDGET AND ACTUAL -
INSPECTION FEE FUND - DETAILED STATEMENT (CONTINUED)
Year ended September 30, 2012
Operating expenditures:
Uniforms
Telephone
Utilities
Maintenance
Contract labor
Hydrant
Supplies
Office
Miscellaneous
Employee physicals
Dues & subscriptions
Fire prevention
Training
Miscellaneous
Subtotal - Operating expenditures
Page 63 of 68
Inspection Fee Fund
Variance
Original Final Favorable
Budget Budget Actual (Unfavorable)
Capital outlay:
Office facility - -
Vehicles - -
Subtotal - Capital outlay - - -
Debt service:
Principal reduction - - -
Interest and fiscal charges - - -
Subtotal - Debt service - - - -
Reserves: 3,289 3,289 - 3,289
TOTAL EXPENDITURES 481,000 481,000 491,879 (10,879)
EXCESS OF REVENUES
OVER (UNDER) EXPENDITURES $ - $ - (62,241) $ (62,241)
FUND BALANCE - Beginning 86,960
FUND BALANCE - Ending $ 24,719
The accompanying notes are an integral part of this statement.
ADDITIONAL REPORTS OF
INDEPENDENT AUDITOR
Page 65 of 68
A significant deficiency is a deficiency, or a combination of deficiencies, in internal control that
adversely affect the entity's ability to initiate, authorize, record, process, or report financial data
reliably in accordance with accounting principles generally accepted in the United States of
America, such that there is more than a remote likelihood that a misstatement of the financial
statements that is more than inconsequential will not be prevented or detected and corrected 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 basic 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.
Compliance and Other Matters
As part of obtaining reasonable assurance about whether North Naples Fire Control and Rescue
District's basic 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 basic
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.
This report is intended solely for the information and use of the Board of Commissioners,
management, the Auditor General of the State of Florida, and other federal and state audit
agencies. This report is not intended to be, and should not be, used by anyone other than these
specified parties.
TUSCAN & COMPANY, P.A.
Fort Myers, Florida
February 14, 2013
TUSCAN
& Company, PA
Affiliations
Florida Institute of Certified Public Accountants
American Institute of Certified Public Accountants
Private Companies Practice Section
Tax Division
Certified Public Accountants & Consultants
Page 66 of 68
INDEPENDENT AUDITOR'S REPORT TO MANAGEMENT
Board of Commissioners
North Naples Fire Control and Rescue District
1885 Veterans Park Drive
Naples, Florida 34109 -0492
We have audited the accompanying basic financial statements of North Naples Fire Control and
Rescue District (the "District ") as of and for the year ended September 30, 2012 and have issued
our report thereon dated February 14, 2013.
We conducted our audit in accordance with auditing standards generally accepted in the United
States of America; the standards applicable to financial audits contained in Government Auditing
Standards, issued by the Comptroller General of the United States. We have issued our Report
on Internal Control over Financial Reporting and Compliance and Other Matters. Disclosures in
that report, which is dated February 14, 2013, should be considered in conjunction with this
report to management.
Additionally, our audit was conducted in accordance with Chapter 10.550, Rules of the Auditor
General, which governs the conduct of local governmental entity audits performed in the State of
Florida. This letter included the following information, which is not included in the aforementioned
auditor's report:
Section 10.554(1)(i)1., Rules of the Auditor General, requires that we determine
whether or not corrective actions have been taken to address findings and
recommendations made in the preceding annual financial audit report. The prior year
report contained no comments.
Section 10.554(1)(1)2., Rules of the Auditor General, requires our audit to include a
review of the provisions of Section 218.415, Florida Statutes, regarding the investment
of public funds. In connection with our audit, we determined that the District complied
with Section 218,415, Florida Statutes.
INTEGRITY ......... SERVICE ......... EXIPERIENCE*
12621 World Plaza Lane, Building 55 • Fort Myers, FL 33907 • Phone: (239) 333 -2090 • Fax: (239) 333 -2097
Page 67 of 68
Section 10.554(1)(i)3., Rules of the Auditor General, requires that we address in the
management letter any recommendations to improve financial management. No such
recommendations were noted to improve financial management.
Section 10.554(1)(i)4., Rules of the Auditor General, requires that we address
violations of provisions of contracts or grant agreements, or abuse, that have an effect
on the financial statements that is less than material but more than inconsequential. In
connection with our audit, we did not have any such findings.
Section 10.554(1)(i)5., Rules of the Auditor General, provides that the auditor may,
based on professional judgment, report the following matters that have an
inconsequential effect on financial statements, considering both quantitative and
qualitative factors: (1) violations of provisions of contracts or grant agreements, fraud,
illegal acts, or abuse, and (2) control deficiencies that are not significant deficiencies.
In connection with our audit, we did not have any such findings.
Section 10.554(l)(i)6., Rule of the Auditor General, requires that the name or official
title and legal authority for the primary government and each component unit if the
reporting entity be disclosed in the management letter, unless disclosed in the notes to
the financial statements. The District discloses this information in the notes to the
financial statements.
Section 10.554(1)(i)7.a., Rules of the Auditor General, requires a statement be
included as to whether or not the local government entity has met one or more of the
conditions described in Section 218.503(1), Florida Statutes, and identification of the
specific condition(s) met. In connection with our audit, we determined that the District
did not meet any of the conditions described in Section 218.503(1), Florida Statutes.
Section 10.554(1)(i)7.b., Rules of the Auditor General, requires that we determine
whether the annual financial report for the District for the fiscal year ended September
30, 2012, filed with the Florida Department of Financial Services pursuant to Section
218.32(1)(a) Florida Statutes, is in agreement with the annual financial audit report for
the fiscal year ended September 30, 2012. In connection with our audit, we
determined that these two reports were in agreement.
Pursuant to Sections 10.554(1)(i)7.c. and 10.556(7), Rules of the Auditor General,
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 management.
Page 68 of 68
PRIOR YEAR COMMENTS:
There were no financially significant prior year comments.
CURRENT YEAR COMMENTS:
No financially significant comments noted.
Pursuant to Chapter 119, Florida Statutes, this management letter is a public record and its
distribution is not limited. Auditing standards generally accepted in the United States of America
require us to indicate that this letter is intended solely for the information and use of the Board of
Commissioners, management, the Auditor General of the State of Florida and other federal and
state agencies. This report is not intended to be and should not be used by anyone other than
these specified parties.
/' , a�'I' �- 4,
TUSCAN & COMPANY, P.A.
Fort Myers, Florida
February 14, 2013
EXHIBIT
J. Christopher Lombardo, Chairman
John O. McGowan, Vice Chairman
Norman E. Feder, Treasurer
Margaret Hanson, Commissioner
James Burke, Commissioner
North Naple
April 3, 2013
�0,iVv1NAA FS
R
i S 1885 Veterans Park Drive
E �« Naples, FL 34109
� X FL� (239) 597 -3222
Fax (239) 597 -7082
i Fire Control and Rescue District
Auditor General's Office
Local Government Audits /342
Claude Pepper Building, Room 401
111 West Madison Street
Tallahassee, FL 32399 -1450
We are pleased to note that the audit report for the fiscal year 2011/2012 reflected no
current year or prior comments which require management's response.
The Board of Fire Commissioners and management staff of the North Naples Fire
Control & Rescue District have worked diligently to resolve past audit comments and
address deficiencies in internal controls, and policy and procedures to insure the
financial stability of the District.
The audit report for the fiscal year ended September 30, 2012 reflects the commitment
of the Board and staff to successfully resolve prior year issues.
Sincerely,
NORTH NAPLES FIRE CONTROL & RESCUE DISTRICT
ORGY C. STAMl'S
Fire Chie
REBECAH BRONSDON
Assistant Chief of Administrative Services