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MIN ri . , a. rt -, r ''. - ' "' ...,.► .. `: . • j W et,r E�d6d T II ,, A Se, ber 30 2013 in J \ \ y� \ i r i -fi / ' ' �"f y� 7\ 1 � / —i \ \ '` ,\\,'\ } ( - \ 'l \ , \ � �f ' \ j 1 �`\; -� ' - / \ / --` - ' l l N- - \ \ . �, / 1r. � i � ti i f I• J ,j!' / ' / i \ 5 Collie% Co uA ce,6. a,4&5- 0 '�Uile5. - _ / Cover It.o-o r k coures Collie Couk-i Nuseurts,, No(,ples FL. i � � J v t i �. / 1 - ,--/ / •1. `V ,,,. e� �R �, �1t Cohtprekesive"l hu �-itlttcioil keporE (CAR 3- p d ea�.ck er�,i- -Elie off ice .o-= lite Clem o� -fie Cr�ui� C on\ b ekoil-F o= ik.e'Coll \, I 1 - � - - I COMPREHENSIVE ANNUAL FINANCIAL REPORT FOR FISCAL YEAR ENDED SEPTEMBER 30, 2013 COLLIER COUNTY, FLORIDA BOARD OF COUNTY COMMISSIONERS GEORGIA A. HILLER, ESQ., CHAIRWOMAN—DISTRICT 2 TOM HENNING,VICE CHAIRMAN—DISTRICT 3 DONNA FIALA—DISTRICT 1 FRED W.COYLE—DISTRICT 4 TIM NANCE—DISTRICT 5 COUNTY MANAGER LEO E.OCHS,Jr. COUNTY ATTORNEY JEFFREY A. KLATZKOW CLERK OF THE CIRCUIT COURT AND COUNTY COMPTROLLER CHIEF FINANCIAL OFFICER DWIGHT E. BROCK DIRECTOR OF FINANCE AND ACCOUNTING CRYSTAL K. KINZEL Prepared by the Office of the Clerk of the Circuit Court, Finance and Accounting Department COLLIER COUNTY, FLORIDA COMPREHENSIVE ANNUAL FINANCIAL REPORT YEAR ENDED SEPTEMBER 30, 2013 TABLE OF CONTENTS INTRODUCTORY SECTION Page Transmittal Letter Certificate of Achievement for Excellence in Financial Reporting vi Organizational Chart viii FINANCIAL SECTION Independent Auditors'Report 1 Management's Discussion and Analysis(Unaudited) 4 Basic Financial Statements: Statement of Net Position 18 Statement of Activities 20 Balance Sheet—Governmental Funds 22 Reconciliation of the Balance Sheet of Governmental Funds to the Statement of Net Position 23 Statement of Revenues,Expenditures and Changes in Fund Balances—Governmental Funds 24 Reconciliation of the Statement of Revenues, Expenditures and Changes in Fund Balances of Governmental Funds to the Statement of Activities 25 General Fund-Statement of Revenues,Expenditures and Changes in Fund Balances—Budget and Actual (Budgetary Basis) 26 Bayshore Gateway Community Redevelopment - Statement of Revenues, Expenditures and Changes in Fund Balances—Budget and Actual(Budgetary Basis) 29 Immokalee Community Redevelopment-Statement of Revenues, Expenditures and Changes in Fund Balances— Budget and Actual(Budgetary Basis) 30 Statement of Net Position—Proprietary Funds 31 Statement of Revenues, Expenses and Changes in Fund Net Position—Proprietary Funds 33 Statement of Cash Flows—Proprietary Funds 34 Statement of Fiduciary Net Position—Agency Funds 36 Notes to the Financial Statements 37 Required Supplementary Information 80 Combining and Individual Fund Financial Statements: Nonmaior Governmental Funds Combining Balance Sheet 86 Combining Statement of Revenues,Expenditures and Changes in Fund Balances 96 Combining Schedule of Revenues,Expenditures and Changes in Fund Balances-Budget and Actual(Budgetary Basis) 106 Nonmajor Enterprise Funds Combining Statement of Net Position 130 Combining Statement of Revenues, Expenses and Changes in Fund Net Position 131 Combining Statement of Cash Flows 132 Internal Service Funds Combining Statement of Net Position 134 Combining Statement of Revenues,Expenses and Changes in Fund Net Position 135 Combining Statement of Cash Flows 136 Fiduciary Funds Combining Statement of Fiduciary Net Position 138 Combining Statement of Changes in Fiduciary Net Position 139 COLLIER COUNTY, FLORIDA COMPREHENSIVE ANNUAL FINANCIAL REPORT YEAR ENDED SEPTEMBER 30, 2013 TABLE OF CONTENTS - CONTINUED Component Units Combining Statement of Net Position 142 Combining Statement of Revenues,Expenditures and Changes in Net Assets 143 STATISTICAL SECTION(UNAUDITED) Net Position by Component 146 Change in Net Position 147 Governmental Activities Tax Revenues by Source 150 Fund Balances of Governmental Funds 151 Changes in Fund Balances of Governmental Funds 152 Assessed Value and Estimated Actual Value of Taxable Property 154 Property Tax Rates—All Direct and Overlapping Governments 155 Principal Tax Payers County-Wide 156 Property Tax Levies and Collections 157 Ratios of Outstanding Debt by Type 158 Ratios of General Bonded Debt Outstanding 159 Legal Debt Margin Information 160 Direct and Overlapping Governmental Activities Debt 160 Pledged-Revenue Coverage 161 Demographic and Economic Statistics 162 Principal Employers 163 Full-Time Equivalent County Employees by Function 164 Operating Indicators by Function 165 Capital Asset Statistics by Function 166 SINGLE AUDIT/SCHEDULE OF EXPENDITURES OF FEDERAL AWARDS AND STATE PROJECTS Independent Auditors' Report on Internal Control Over Financial Reporting and on Compliance and Other Matters Based on an Audit of the Financial Statements Performed in Accordance with Government Auditing Standards 169 Independent Auditors'Report on Compliance With Requirements That Could Have A Direct and Material Effect on Each Major Federal Program and State Project and on Internal Control Over Compliance in Accordance With OMB Circular A-133 and Chapter 10.550,Rules of the Auditor General of the State of Florida 171 Schedule of Expenditures of Federal Awards and State Projects 174 Notes to the Schedule of Expenditures of Federal Awards and State Projects 181 Schedule of Findings and Questioned Costs 182 Summary Schedule of Prior Audit Findings 187 THIS PAGE INTENTIONALLY LEFT BLANK County of C6 Hier CLERK OF THE CIRCUIT COURT COLLIER COUNT 4 OUIthIOUSE Dwight E. Brock-Clerk of circuit Court 3315 TAMIAMI TRL E STE 102 i P.O.BOX 413044 NAPLES,FL 34112-5324 NAPLES,FL 34101-3044 Clerk of Courts • Comptroller • Auditor•Custodian of County Funds March 11, 2014 To the Citizens and Members of the Board of County Commissioners, Collier County, Florida: It is with extreme pleasure that we present to you, the citizens of Collier County and members of the Board of County Commissioners, the Comprehensive Annual Financial Report (CAFR) for the fiscal year ended September 30, 2013. Responsibility for the accuracy of the data and the completeness and fairness of the presentation, including all disclosures, rests with the Board of County Commissioners and County management. The Clerk of the Circuit Court and County Comptroller's Finance and Accounting Department, as well as County management, is responsible for establishing and maintaining internal controls to provide reasonable, but not absolute, assurance regarding the safeguarding of assets against loss from unauthorized use or disposition, the reliability of financial records for preparing financial statements, and maintaining accountability of assets. The concept of reasonable assurance recognizes that the cost of a control should not exceed the benefits likely to be derived, and the evaluation of costs and benefits requires estimates and judgments by management. Chapter 218.39 of the Florida Statutes requires an independent certified public accountant's financial audit of counties in the State. For the fiscal year ended September 30, 2013 the independent auditor, CliftonLarsonAllen LLP, issued an unmodified opinion on the financial statements. Their report is included in the Financial Section of this report. In addition to meeting the requirements set forth in State statutes, the audit was also designed to meet the requirements of the Government Auditing Standards, the U.S. Office of Management and • Budget Circular A-133, Audits of States, Local Governments and Non-Profit Organizations and the Rules of the Auditor General, Chapter 10.550. Information relating to the Single Audits, including the schedule of expenditures of federal awards and state projects and the independent auditors' report on compliance and internal control over compliance with requirements applicable to each major federal and state program, are included in the Federal and State Single Audit Section of this report. Governmental accounting and auditing principles require that management provide a narrative introduction, overview and analysis to accompany the basic financial statements in the form of Phone- (239) 252-2646 Fax- (239)252-2755 Web site- www.collierclerk.com Email-collierclerkAcollierclerk.com Management's Discussion and Analysis (MD&A). This letter of transmittal is designed to complement MD&A and the two should be read in concert. Collier County's MD&A can be found in the Financial Section immediately following the independent auditors' report. PROFILE OF THE GOVERNMENT Collier County is a Constitutional form of government and was established in 1923 under the Constitution and the laws of the State of Florida. The Board of County Commissioners is the legislative body for Collier County and is made up of five residents elected by voters. In addition to the County Commissioners, voters elect the following five constitutional officers: the Clerk of the Circuit Court and County Comptroller, Property Appraiser, Sheriff, Supervisor of Elections and Tax Collector. The County provides its citizens with a wide range of services that include law enforcement, emergency management, fire and EMS services, animal services, library, museum and cultural services, parks and recreation operations, road maintenance and construction. Additionally, the County owns and operates a water and wastewater utility, a solid waste landfill and recycling program, 3 airports and a transit system. Budgets are prepared annually. Formal budgetary integration is employed as a management control throughout the year. The Board of County Commissioners conducts budget workshops during June of each year. The Board's proposed budget is released by July 15, in accordance with Florida Statutes. The budgets of Constitutional Officers are presented to the appropriate authorizing bodies according to state statute. Public hearings are held in September to allow taxpayer input and to adopt the final budget. ECONOMIC CONDITION AND OUTLOOK Collier County, the state's largest county at 2,026 square miles, is on the southwest coast of Florida, directly west of Miami. With a 2013 population of 329,849 (a 13 percent increase over the last ten years), the County has been considered to be one of the fastest growing counties in the state over the last ten years. The resident population includes Unincorporated County (pop. 293,343) and three municipalities: the Cities of Naples (pop. 19,584), Marco Island (pop. 16,521) and Everglades (pop. 401). The County's economic base is concentrated in tourism, agriculture, fishing, ranching and forestry with a growing services economy and an emerging technology sector. Gulf of Mexico beaches and the Everglades National Park are important attractions to this area. Taxable property market valuation for fiscal year 2013 totaled $58.5 billion, or a very high $177,332 per capita. The County's millage for General Fund operations in fiscal year 2013 remained at only 36% of the statutory 10 mill limit, or $3.56 per thousand dollars of taxable value. Unemployment levels in recent years approximate, or are slightly above, the statewide average. The 2013 annual County unemployment rate stood at 7.2%, while the statewide average is 6.9%. Income levels are high, with a per capita personal income of$60,391. ii LONG TERM FINANCIAL PLANNING The County annually performs a three-year projection of major ad valorem supported funds (General Fund and the Unincorporated Area Municipal Services Taxing District Fund) prior to developing annual budget policy. On an annual basis the County prepares and adopts a five- year Capital Improvement Element (CIE). The CIE is a planning document that identifies public facilities that will be required during the next five or more years. The Capital Improvement Element is the foundation of Collier County's annual Capital Improvement Program (CIP). The total CIP for fiscal years 2014-2018 is $593.8 million. Included in the County's current CIP for fiscal years 2014-2018 are approximately $104.2 million for transportation projects and approximately $349.6 million for water and wastewater facilities and various replacement and rehabilitation projects. Parks and recreation projects of approximately $21.0 million are planned, as well as $22.9 million for tourist development funded projects and $26.5 million of Solid Waste projects. None of the fiscal year 2014 — 2018 Capital Improvement Program is currently planned to be funded by bond or loan proceeds. RELEVANT FINANCIAL POLICIES Relevant financial policies include the appropriation of carryforward as revenue in the following year, maintaining a recommended General Fund unassigned fund balance of between 10% and 15% of actual expenditures and net operating transfers, the assessment of impact fees at such levels as allowed by law and supported by studies, and the earmarking of gas taxes for payment of debt service on the Series 2005 and 2012 Gas Tax Revenue Bonds. Debt administration policies include the limitation of the debt repayment period to the useful life of the underlying assets and the establishment of a 5% benchmark for net present value savings generated by refinancing. The Collier County Debt Policy provides that a smaller net present value savings may be considered, but only on a case-by-case basis. In addition, the debt policy establishes a maximum ratio of total general governmental debt service to bondable revenues from current sources of 13%. Consistent with the County's Debt Management Policy, outstanding debt is continually monitored in relation to existing conditions in the debt market. When sufficient cost savings can be realized debt will be refinanced. The County took advantage of this type of savings by refunding a portion of the Series 2006 Water and Sewer Revenue Bonds and all of the Series 2003B Water and Sewer Refunding Revenue Bonds. In addition, the Series 2013 Special Obligation Refunding Revenue Bonds were issued for purposes of refinancing the remaining Series 2003 and 2005 Capital Improvement Bonds, thereby eliminating the cash surety requirements associated with the bonds. This refinancing also achieved a modest present value savings. These transactions are further described in Note 8 to the financial statements. The Finance and Accounting Department monitors the daily cash needs of the County and invests the County's portfolio in accordance with the County's investment policy. The primary objective of the investment policy is the preservation of capital and the protection of investment principal. Authorized investments include certificates of deposit, the Local Government Funds Surplus Trust Fund, U.S. treasury securities, U.S. agency securities, commercial paper and bankers' acceptances. The weighted average maturity of the total iii managed portfolio, to first call or maturity, was .87 years as of September 30, 2013. The average yield for fiscal year 2013 was .47%, which constitutes a reduction from historical rates, but is consistent with current market rates for similar portfolios. Changes in the fair value of investments are recorded as part of interest income in the financial statements. AWARDS GFOA Certificate of Achievement: The Government Finance Officers Association of the United States and Canada (GFOA) awarded a Certificate of Achievement for Excellence in Financial Reporting to Collier County, Florida for its Comprehensive Annual Financial Report (CAFR) for the fiscal year ended September 30, 2012. The Certificate of Achievement is a prestigious national award, recognizing conformance with the highest standards for preparation of state and local government financial reports. In order to be awarded a Certificate of Achievement, a government unit must publish an easily readable and efficiently organized Comprehensive Annual Financial Report whose contents conform to program standards. The CAFR must satisfy both generally accepted accounting principles and applicable legal requirements. A Certificate of Achievement is valid for a period of one year only. Collier County has received this award for the past twenty-seven years, from fiscal year 1986 to 2012. We believe our current report conforms to the Certificate of Achievement program requirements, and we are submitting it to the GFOA for consideration for an award again this year. Distinguished Budget Presentation Awards: The Government Finance Officers Association of the United States and Canada presented an award for Distinguished Presentation to Collier County for its annual budget for the fiscal year beginning October 1, 2012. In order to receive this award, a government unit must publish a budget document that meets program criteria as a policy document, as an operations guide, as a financial plan, and as a communications device. The Distinguished Budget Presentation Award is valid for a period of one year only. Collier County has received this award for the last twenty-nine consecutive years. The Government Finance Officers Association of the United States and Canada presented an award for Distinguished Presentation to the Office of the Collier County Clerk of the Circuit Court and County Comptroller for its annual budget for the fiscal year beginning October :1, 2012. In order to receive this award, a government unit must publish a budget document that meets program criteria as a policy document, as an operations guide, as a financial plan, and as a communications device. The Distinguished Budget Presentation Award is valid for a period of one year only. The Clerk's Office has received this award for the last eleven consecutive years. iv ACKNOWLEDGEMENTS The preparation and publication of this Comprehensive Annual Financial Report represents a significant effort by the Finance and Accounting Department as well as numerous County personnel who contribute to its production. In particular we would like to express our appreciation to Kelly Jones, CGFO, Edith Manuel, CPA, Precious Corrado, June Wathen, Leslie Miller, Suzanne Boothby, Christine Killen, Dan Tripaldi, Laura Drigotas and Don Holder, all Accountants, along with Constance Murray, CGFO, General Operations Manager, Raymond Milum, Jr., Clerk's Fiscal Operations Manager and Nancy Fragione and Vanessa Collier, Accounting Technicians,Jennifer Milum, Fiscal Technician, and all of the staff of the Finance and Accounting Department. Sincere appreciation is also expressed to CliftonLarsonAllen, the Board of County Commissioners, the Constitutional Officers, the County Manager, Division Administrators and the Department Directors for their assistance throughout the year in matters pertaining to the financial affairs of the County. We hope you find this report informative, accurate and easily readable. If you should have any questions related to this report or if additional information is desired, do not hesitate to contact Crystal K. Kinzel, Director of Finance and Accounting, at (239) 252-6299. f3espectfully, /dp6f45,64, - Dwight"Brock Clerk of the Circuit Court and County Comptroller And Chief Financial Officer 0 Crystal . Kinzel Deputy Clerk Director Finance and Accounting , rek M. Johnssen, CPA Deputy Clerk Assistant Finance Director V Certificate of Achievement for Excellence in Financial Reporting The Government Finance Officers Association of the United States and Canada (GFOA) awarded a Certificate of Achievement for Excellence in Financial Reporting to Collier County, Florida for its comprehensive annual financial report for the fiscal year ended September 30, 2012. This was the twenty-seventh consecutive year that the government has achieved this prestigious award. In order to be awarded a Certificate of Achievement, a government must publish an easily readable and efficiently organized comprehensive annual financial report. This report must satisfy both generally accepted accounting principles and applicable legal requirements. A Certificate of Achievement is valid for a period of one year only. We believe that our current comprehensive annual financial report continues to meet the Certificate of Achievement Program's requirements and we are submitting it to the GFOA to determine its eligibility for another certificate. (F, Government Finance Officers Association Certificate of Achievement for Excellence in Financial Reporting Presented to Collier County Clerk of the Circuit Court Florida For its Comprehensive Annual Financial Report for the Fiscal Year Ended September 30, 2012 *Cr"040100 Executive Director/CEO \\§ grg ,\s J; 2�% ) « .0 .y . \� t ;; : : ; +- _` � ' §f3 7 ! 2 &)3 - - -1 ,2 r ° § ;; . IP •\) � - - - , ki) k } , ) : �§ ° )!$ E) _ )" # c- i E2\ �7 , h d fl §7 \\} «{\ }! |:]&! � ,} - \ § - \ ° ) }t __ clE - ° �� E ( {(.yf} %; ! k ) - �:§0? / -J \)( - ` �� > t ) § ()//£ \®�� 4) \ u /!`# ° " � `® " --- -.. k „. /7 f + $ FE § m/ ®k�i ; ! j 72 fI1 !ƒf)FT }:. _§� �� {kq § ti j ) Ti . ¥,) ?) [{{ (kk 2= § } ,, \ &« &, § #; ! g 2 ,�\ 'E v) \\ — ƒ \\ \' k /\\ \\}) k #!! _ E ° - \ l& ) /� :; ! ,\)«\a2 \\}\ \k{) SI FINANCIAL SECTION THIS PAGE INTENTIONALLY LEFT BLANK CliftonLarsonAllen LLP CLAconnect.corn CliftonLarsonAllen INDEPENDENT AUDITORS' REPORT Honorable Board of County Commissioners Collier County, Florida Report on the Financial Statements We have audited the accompanying financial statements of the governmental activities, the business-type activities, the aggregate discretely presented component units, each major fund and the aggregate remaining fund information of Collier County, Florida (Collier County), as of and for the year ended September 30, 2013, and the related notes to the financial statements, which collectively comprise the entity's basic financial statements as listed in the table of contents. Management's Responsibility for the Financial Statements Management is responsible for the preparation and fair presentation of these financial statements in accordance with accounting principles generally accepted in the United States of America; this includes the design, implementation, and maintenance of internal control relevant to the preparation and fair presentation of financial statements that are free from material misstatement, whether due to fraud or error. Auditors'Responsibility Our responsibility is to express opinions on these financial statements based on our audit. We conducted our audit in accordance with auditing standards generally accepted in the United States of America and the standards applicable to financial audits contained in Government Auditing Standards, issued by the Comptroller General of the United States. Those standards require that we plan and perform the audit to obtain reasonable assurance about whether the financial statements are free from material misstatement. An audit involves performing procedures to obtain audit evidence about the amounts and disclosures in the financial statements. The procedures selected depend on the auditors' judgment, including the assessment of the risks of material misstatement of the financial statements, whether due to fraud or error. In making those risk assessments, the auditor considers internal control relevant to the entity's preparation and fair presentation of the financial statements in order to design audit procedures that are appropriate in the circumstances, but not for the purpose of expressing an opinion on the effectiveness of the entity's internal control. Accordingly, we express no such opinion. An audit also includes evaluating the appropriateness of accounting policies used and the reasonableness of significant accounting estimates made by management, as well as evaluating the overall presentation of the financial statements. We believe that the audit evidence we have obtained is sufficient and appropriate to provide a basis for our audit opinions. • NEX I A ct NE0413 t,lenala>d INTERNATIONAL Honorable Board of County Commissioners Collier County, Florida Opinions In our opinion, the financial statements referred to above present fairly, in all material respects, the respective financial position of the governmental activities, the business-type activities, the aggregate discretely presented component units, each major fund, and the aggregate remaining fund information of Collier County as of September 30, 2013, and the respective changes in financial position and cash flows, where applicable, thereof, and the respective budgetary comparison for the general fund, the Bayshore Gateway redevelopment agency special revenue fund, and the Immokalee redevelopment agency special revenue fund for the year then ended in conformity with accounting principles generally accepted in the United States of America. Other Matters Required Supplementary Information Accounting principles generally accepted in the United States of America require that management's discussion and analysis and the other postemployment benefits schedule of funding progress for the retiree health plan on pages 4 through 17 and 80 be presented to supplement the basic financial statements. Such information, although not a part of the basic financial statements, is required by the Governmental Accounting Standards Board who considers it to be an essential part of financial reporting for placing the basic financial statements in an appropriate operational, economic, or historical context. We have applied certain limited procedures to the required supplementary information in accordance with auditing standards generally accepted in the United States of America, which consisted of inquiries of management about the methods of preparing the information and comparing the information for consistency with management's responses to our inquiries, the basic financial statements, and other knowledge we obtained during our audit of the basic financial statements. We do not express an opinion or provide any assurance on the information because the limited procedures do not provide us with sufficient evidence to express an opinion or provide any assurance. Other Information Our audit was conducted for the purpose of forming opinions on the financial statements that collectively comprise Collier County's basic financial statements. The combining and individual nonmajor fund financial statements and budgetary comparison schedules as listed in the table of contents are presented for purposes of additional analysis and are not a required part of the basic financial statements. The schedule of expenditures of federal awards and state financial assistance is presented for purposes of additional analysis as required by the U.S. Office of Management and Budget Circular A-133, Audits of States, Local Governments, and Non-Profit Organizations and Chapter 10.550, Local Governmental Entity Audits, Rules of the Auditor General of the State of Florida, and is also not a required part of the basic financial statements. Such information is the responsibility of management and was derived from and relate 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 audit of the basic financial statements and certain additional procedures, including comparing and reconciling such information directly to the underlying accounting and other records used to prepare the basic financial statements or to the basic financial statements themselves, and other additional procedures in accordance with auditing standards generally accepted in the United States of America. In our opinion, the information is fairly stated, in all material respects, in relation to the basic financial statements as a whole. 2 Honorable Board of County Commissioners Collier County, Florida The introductory section and the statistical section have not been subjected to the auditing procedures applied in the audit of the basic financial statements, and accordingly, we do not express an opinion or provide any assurance on it. Other Reporting Required by Government Auditing Standards In accordance with Government Auditing Standards, we have also issued our report dated February 12, 2014, on our consideration of Collier County's internal control over financial reporting and on our tests of its compliance with certain provisions of laws, regulations, contracts, and grant agreements and other matters. The purpose of that report is to describe the scope of our testing of internal control over financial reporting and compliance and the result of that testing, and not to provide an opinion on internal control over financial reporting or on compliance. That report is an integral part of an audit performed in accordance with Government Auditing Standards in considering Collier County's internal control over financial reporting and compliance. &€;fi-ex/dA-d-07a/-7,0-,c.././.)/ CliftonLarsonAllen LLP Naples, Florida February 12, 2014 3 MANAGEMENT'S DISCUSSION AND ANALYSIS (UNAUDITED) As Clerk of the Circuit Court and chief financial officer of Collier County, Florida, I present the readers of the County's financial statements this narrative overview and analysis of the financial activities of Collier County for the fiscal year ended September 30, 2013. Readers are encouraged to consider the information presented in this narrative in conjunction with additional information offered in the letter of transmittal,found on pages i-v of this report. Financial Highlights • Collier County's assets exceeded its liabilities as of September 30, 2013 by $2,471,851,218. Of this amount, $348,839,964 represents unrestricted net position and may be used to meet future County obligations. • The County's total net position increased by $31,159,543 when compared to fiscal year 2012, with a $11,843,153 increase from governmental activities and a $19,316,390 increase resulting from business-type activities. • As of September 30, 2013 Collier County's governmental fund financial statements showed combined ending fund balances of$353,860,774, a decrease of$5,791,094 over the previous fiscal year. Of the total combined ending fund balance, $1,284,620 remains in the various governmental funds of Collier County as unassigned. Negative unassigned balances in the Government Facilities Impact Fee Fund and other capital project funds offset the General Fund's unassigned fund balance. • The General Fund reported an unassigned fund balance of $56,496,736 at September 30, 2013, a decrease in unassigned General Fund balance of$593,613 when compared to September 30, 2012. • Total face value of bonded debt, notes and outstanding loans owed by Collier County decreased by $30,815,686 during fiscal year 2013, with a decrease in governmental activities debt of $20,981,363 and a decrease in the business-type activities debt of $9,834,323. In April of 2013, the remaining Series 2003 and 2005 Capital Improvement Refunding Revenue Bonds were refinanced by the Series 2013 Special Obligation Refunding Revenue Bonds. In June of 2013 the Series 2003B County Water and Sewer Refunding Revenue Bonds were refinanced by the Series 2013 County Water and Sewer Refunding Revenue Bonds. In September of 2013, State Revolving Fund Loan proceeds of$25,000,000 were used to advance refund a portion of the Series 2006 County Water and Sewer Revenue Bonds. Overview of the Financial Statements This discussion and analysis is intended to serve as an introduction and explanation of Collier County's basic financial statements. Collier County's basic financial statements include government-wide and fund financial statements, as well as notes to the basic financial statements. This report also contains a statistical section, single audit and other supplementary information in addition to the basic financial statements. 4 Government-Wide Financial Statements Government-wide financial statements are designed to provide the reader an overview of the financial position of the County and are similar to private sector financial statements. These statements are comprised of a Statement of Net Position and a Statement of Activities and are found on pages 18 to 21 of this report. The Statement of Net Position shows the financial position of Collier County as of September 30, 2013. The statement shows the County's assets less its liabilities, with the difference being reported as net position. Changes in net position are useful indicators of financial condition. The Statement of Activities follows the Statement of Net Position and reports the changes in net position over the fiscal period. All changes in net position are reported as soon as the underlying events that gave rise to the change occur, regardless of the timing of the related cash flows. Thus, revenues and expenses are reported for some items, such as accounts receivable, notes receivable or accrued unused vacation and sick leave,that will manifest themselves in cash inflows and outflows, respectively, in future fiscal periods. These statements distinguish Collier County functions that are supported by taxes and intergovernmental revenues (governmental activities),from business-type activities,which are intended to have their costs primarily recovered through user fees and charges. Governmental activities reported in the financial statements are general government, public safety, physical environment, transportation, economic environment, human services and culture and recreation. Business-type activities in Collier County include water and sewer, solid waste collections, airport operations,transit operations and emergency medical services. Fund Financial Statements A fund is a group of related accounts used to maintain control over resources that have been segregated to meet specific objectives. As dictated by generally accepted accounting principles, Collier County uses fund accounting to ensure and demonstrate compliance with financial legal requirements. The funds of the County can be divided into the following three categories:governmental, proprietary and fiduciary. Governmental funds Governmental funds, presented on pages 22 to 30, account for substantially the same functions as governmental activities reported under the government-wide Statement of Net Position and Statement of Activities. The difference is that the governmental fund financial statements focus on inflows and outflows of expendable resources, as well as balances of expendable resources available at the end of the fiscal year, on a near term basis. As such, these statements present a narrower view of financial condition, but are nonetheless useful in evaluating Collier County's near term financing requirements and available resources. Comparison between the two sets of financial statements allows the reader to better assess the future impact of the government's near term financial decisions. Both the governmental fund balance sheet and the statement of revenues, expenditures and changes in fund balances provide a reconciliation to the respective government-wide financial statements to facilitate comparison. 5 Governmental funds presented individually in Collier County's statements include four major funds, the General Fund, Government Facilities Impact Fee Fund and the Bayshore Gateway and Immokalee Redevelopment Agencies. While there are many smaller governmental funds under Collier County management, they are aggregated in a total column named "other governmental funds". Combining statements for these other governmental funds have been presented elsewhere in this report. Proprietary funds Collier County maintains two different types of proprietary funds, enterprise and internal service, which are reflected on pages 31 to 35 of this report. Enterprise funds report, with more detail, the same functions presented as business-type activities in the government-wide financial statements for water and sewer, Goodland water, solid waste disposal, emergency medical services, transit and the airport authority. The Collier County Water and Sewer District Fund and the Solid Waste Disposal Fund are presented individually as major funds. Internal service funds are primarily maintained to allocate and accumulate costs internally for Collier County. The County uses internal service funds to account for health insurance, worker's compensation insurance, property and casualty insurance, fleet operations and information technology. The internal service funds are presented in total in the proprietary fund financial statements, but may be viewed on a combining basis elsewhere in the report. Fiduciary funds Fiduciary funds are used to account for resources held for the benefit of parties outside of Collier County government. These funds are not presented in the government-wide financial statements as they do not represent resources available to support Collier County functions. The fiduciary funds are presented on page 36 of this report. All of the County's fiduciary funds are agency funds. The accounting used for agency funds is based on the concept that assets equal liabilities when the government is acting in a fiduciary capacity. Notes to the Financial Statements The notes provide additional information essential to a full understanding of the data provided in both the government-wide and fund financial statements. The notes appear on pages 37 to 78 of this report. Other Information The combining and individual nonmajor fund financial statements and schedules mentioned above present more detailed views of nonmajor governmental and enterprise funds and begin on page 84. This section contains combining balance sheets and statements of revenues, expenditures and changes in fund balance for governmental funds, including budgetary comparisons, and combining statements of net position and statements of revenues, expenses and changes in fund net position for enterprise funds. Also included are combining financial statements for internal service and agency funds. Additional information about the County, which may be of interest to the reader, can be found under the Statistical and Single Audit sections of this report. The statistical section has been prepared in accordance with Governmental Accounting Standards Board Statement No. 44, Economic Condition Reporting:The Statistical Section. This section contains data regarding financial trends, revenue 6 capacity, debt capacity, demographic and economic conditions and operating indicators of the County. The Single Audit grants compliance section lists the expenditures of Federal Awards and State Financial Assistance during the fiscal year and presents grant compliance information as well as auditor reports. Government-Wide Financial Analysis As noted earlier, net position may serve over time as a useful indicator of a government's financial position. Assets exceeded liabilities by $2,471,851,218 as of the fiscal year ending September 30, 2013 for Collier County. Positive balances were reported in all categories of net position in the governmental and business-type activities for fiscal year 2013, as well as fiscal year 2012. Collier County's net position at September 30, 2013 increased by$7,263,029 for unrestricted net position and decreased $5,252,631 for restricted net position. Restricted net position consists of resources subject to external restriction on how they may be used while unrestricted net position may be used to meet the County's ongoing obligations. The decrease in restricted net position for fiscal year 2013 is mainly due to the decline in amounts required to be restricted for debt service reserves. Collier County's investment in capital assets such as land, roads, buildings, parks and machinery and equipment, net of depreciation or any outstanding debt related to the asset, amounts to 75.5% of net position as of September 30, 2013, compared to 75.3% as of September 30, 2012. The County's net investment in capital assets increased by $29,149,145, when compared to fiscal year 2012. Capital assets are used to provide services to the citizens and consequently do not represent spendable resources and cannot be used to liquidate the debt incurred to purchase or construct capital assets. Following are Collier County's net position and changes in net position for the fiscal years ended September 30, 2012 and 2013,shown in condensed form: Collier County's Schedule of Net Position (in millions) Total Business-type Percentage Governmental Activities Activities Total Change 2013 2012 2013 2012 2013 2012 2012-2013 Current and other assets $ 467.2 $ 466.1 $ 251.1 $ 247.4 $ 718.3 $ 713.5 0.7% Capital assets,net 1,587.4 1,598.5 887.6 882.3 2,475.0 2,480.8 (0.2%) Total assets 2,054.6 2,064.6 1,138.7 1,129.7 3,193.3 3,194.3 0.0% Long-term liabilities 386.4 402.9 205.9 222.3 592.3 625.2 (5.3%) Current liabilities 94.9 100.3 34.2 28.1 129.1 128.4 0.5% Total liabilities 481.3 503.2 240.1 250.4 721.4 753.6 (4.3%) Net position: Net investment in capital assets 1,199.0 1,187.3 668.2 650.7 1,867.2 1,838.0 1.6% Restricted 221.5 226.9 34.3 34.2 255.8 261.1 (2.0%) Unrestricted 152.8 147.2 196.1 194.4 348.9 341.6 2.1% Total net position $ 1,573.3 $ 1,561.4 $ 898.6 $ 879.3 $ 2,471.9 $ 2,440.7 1.3% 7 Collier County's Schedule of Changes in Net Position (in millions) Total Business-type Percentage Governmental Activities Activities Total Change 2013 2012 2013 2012 2013 2012 2012-2013 Revenues Program revenues: Fines,fees and charges for services $ 68.9 $ 63.1 $ 158.6 $ 151.7 $ 227.5 $ 214.8 5.9% Operating grants and contributions 20.9 22.9 3.9 3.0 24.8 25.9 (4.2%) Capital grants and contributions 28.3 20.3 25.0 17.8 53.3 38.1 39.9% General revenues: Property taxes 249.4 248.2 - - 249.4 248.2 0.5% Other taxes and shared revenues 84.8 81.3 - - 84.8 81.3 4.3% Interest income 1.5 2.4 0.7 1.1 2.2 3.5 (37.1%) Miscellaneous 9.1 7.4 0.1 0.1 9.2 7.5 22.7% Total revenues 462.9 445.6 188.3 173.7 651.2 619.3 5.2% Expenses General government 95.9 94.2 - - 95.9 94.2 1.8% Public safety 171.2 165.8 - - 171.2 165.8 3.3% Physical environment 16.6 24.6 - - 16.6 24.6 (32.5%) Transportation 69.3 73.0 - - 69.3 73.0 (5.1%) Economic environment 14.5 14.4 - - 14.5 14.4 0.7% Human services 12.0 12.1 - - 12.0 12.1 (0.8%) Culture and recreation 41.5 42.5 - - 41.5 42.5 (2.4%) Interest on long-term debt 16.1 16.4 - - 16.1 16.4 (1.8%) Water and sewer - - 114.0 102.6 114.0 102.6 11.1% Solid waste - - 32.8 29.6 32.8 29.6 10.8% Airport authority - - 4.4 4.6 4.4 4.6 (4.3%) Mass transit - - 10.1 9.9 10.1 9.9 2.0% Emergency medical services - - 21.6 21.8 21.6 21.8 (0.9%) Total expenses 437.1 443.0 182.9 168.5 620.0 611.5 1.4% Increase in net position before net transfers 25.8 2.6 5.4 5.2 31.2 7.8 300.0% Transfers,net (13.9) (14.4) 13.9 14.4 - - - Change in net position 11.9 (11.8) 19.3 19.6 31.2 7.8 300.0% Net position-beginning 1,561.4 1,573.2 879.3 859.7 2,440.7 2,432.9 0.3% Net position-ending $ 1,573.3 $ 1,561.4 $ 898.6 $ 879.3 $ 2,471.9 $ 2,440.7 1.3% 8 Expenses and revenues, in the form of fees, fines, grants and contributions, for governmental activities are shown graphically by function. General revenues, such as property taxes, must be used to the extent that the fee, fines, grants and contributions do not cover the cost of the governmental function. Public safety is the largest category of expenditures followed by general government. Revenues and Expenses Governmental Activities Fiscal Year 2013 180 -- — 160 V 140 /// � 120 100 0 80 �//f ,,,60 4 40 — 20 14� // ��-.� // w old-- cw c` oc c` e' oc e se e ,cam e �\c a. scF y`'a octc C:,c os Ses Ae. sa\�o�e eJ,o ea ec;`c ��cSQ \`e<s- �Je encase ■Revenues 0 Expenses Revenues for governmental activities are shown graphically by type. The largest type of revenue for governmental activities is property taxes followed by fines,fees and charges for services. Revenue by Type Governmental Activities Fiscal Year 2013 TouristTaxes Other Income 3% l 6%' Sales Taxes� 7% Gas Taxes 4% \ Capital Grants and-- Contributions Property Taxes 6% 54% Operating Grants and Contributions 5% Fines,Fees and Charges for Services 15% 9 Revenues and expenses are shown by business-type activity. The Water and Sewer system is the largest business-type activity followed by the Solid Waste system. Revenues and Expenses Business-type Activities Fiscal Year 2013 140 120 100 c 80 - o 60 40 20 --- — I I///,i iii. IIIIIII BM Water and Sewer Solid Waste Airport Authority Mass Transit Emergency Medical Services •Revenues O Expenses Revenues for business-type activities are shown graphically by type. The largest type of revenue is fines, fees and charges for services followed by capital grants and contributions. Revenue by Type Business-type Activities Fiscal Year 2013 Capital Grants and Zr— Contributions 13% Operating Grants and Contributions 2% Other Income 1% Fines,Fees and Charges for Services 84% 10 Governmental Activities The current year increase in the net position of governmental activities amounted to $11,843,153, an increase of.8%when compared to the previous year's net position. The previous fiscal years' decrease in net position was .7%. This marks a reversal of the trend over the last two years of declines in governmental activities net position. • Overall, revenues related to governmental activities increased by 3.9%, or $17,157,103 and expenses decreased by 1.3%, or$5,909,988. • Revenues increased primarily due to increased capital grants and contributions received from the State of Florida for cost sharing agreements related to transportation projects within Collier County. • Total ad valorem taxes collected in fiscal year 2013 increased $1,120,055, or .5%, when compared to fiscal year 2012. The increase in collections is primarily due to a .5% increase in countywide taxable property values. While this is a modest increase, this is the first increase in countywide taxable value since the 2008 fiscal year. • Decreases in expenses occurred in most governmental activities in fiscal year 2013, with the exceptions being general government, public safety and economic environment. Expenses for general government increased $1,713,015 mainly due to a $532,831 payment for settlement of a code enforcement issue. Expenses for public safety activities increased by $5,428,405 largely due to an increase in health claims for the Sheriff's agency. Economic environment expenditures increased $192,239 primarily as a result of an increase in expenditures for affordable housing. Physical environment expenses decreased by$7,988,025, or 32.5%, mostly due to the fiscal year 2012 impact of the Federal Emergency Management Agency's de-obligation of previously reimbursed sand replacement costs of$11,172,273. Business-type Activities Increases in net position related to business-type activities amounted to $19,316,390 in the aggregate, representing a 2.2%increase over the previous year's net position. • The majority of the increase, or$12,006,014, can be attributed to the Collier County Water and Sewer District (District). Total operating revenues, including water, wastewater and reuse irrigation user fees increased by$1,968,579, or 1.9%, over the previous fiscal year primarily due to an increase in usage. The District's fiscal year 2013 total operating expenses, including personal services and depreciation, increased by 13.8% compared to fiscal year 2012 primarily due to expenses related to system infrastructure repair and rehabilitation such as generator switch upgrades, treatment process filter replacement, plant compliance assurance and technical support. Net non-operating expenses decreased as settlement monies related to the fiscal year 2010 impairment of the South Reverse Osmosis Raw Water Wellfield of $4,475,631 were received during fiscal year 2013. • Fiscal year 2013 water and wastewater impact fee collections were $13,502,519, an increase of 54.6% over fiscal 2012. The District charges water and wastewater impact fees on new construction in order to finance growth necessitated capital expansion. 11 • Solid waste operating revenues increased by .9%from fiscal year 2012 while operating costs, including depreciation, increased by 11.3% over the same period. The marginal increase in solid waste operating revenues was a result of a 3.3% increase in residential and commercial municipal waste tonnage, offset by a decrease in construction and demolition waste being accepted into the Naples landfill during fiscal year 2013. Operating costs increased primarily due to an increase in salaries of$435,359 due to a division re-organization and an increase of$2,784,331 in operating expenses related to an increase in landfill maintenance costs. These factors contributed to an increase in solid waste net position year on year of$2,243,072. Fund Financial Statement Analysis As mentioned above, Collier County utilizes fund accounting to ensure compliance with finance related legal requirements. Governmental Funds Governmental funds provide information on near term inflows, outflows and balances of spendable resources. Unassigned fund balance is a useful measure of net resources available to be spent at the end of the fiscal year. Governmental funds consist of the General Fund, Special Revenue Funds, Debt Service Funds and Capital Project Funds. As of September 30, 2013 Collier County governmental funds reported combined fund balances of $353,860,774 a decrease of $5,791,094 when compared to prior year combined fund balances. The governmental funds had non-spendable fund balances of $61,792,526 consisting of inventory, prepaid items and General Fund and Other Governmental Fund advances to other funds. The restricted fund balance was $223,795,465 and consists of monies whose expenditure is externally constrained by grantors, creditors, binding law or enabling legislation. Of the remaining $68,272,783 in fund balance, $29,810,351 is classified as committed, $37,177,812 is recorded as assigned and $1,284,620 is recorded as unassigned. The following were noteworthy activities and changes relating to the major governmental funds for fiscal year 2013: The General Fund is the primary operating fund of Collier County. At September 30, 2013, total fund balance in the General Fund was $73,149,508, of which $56,496,736 was unassigned. As a percentage of total general fund expenditures and net transfers, the unassigned portion is 21.7%. The total fund balance increased by$2,082,870 or 2.9%, compared to the September 30, 2012 total fund balance. The increase in total fund balance was primarily the result of an increase in General Fund ad valorem tax revenue of$1,202,805 when compared to fiscal year 2012. The Bayshore Gateway Redevelopment Agency was created to benefit blighted areas in the Bayshore Gateway Triangle. During fiscal year 2013 the Bayshore Gateway Redevelopment Agency collected $906,000 in tax increment revenues and was reimbursed $1,236,768 for various stormwater improvements. Miscellaneous revenues, consisting mostly of rents, totaling $388,051 were received. Capital expenditures of $1,036,499 were made for tertiary stormwater improvements with a further $1,104,773 being spent on operating costs associated with the Bayshore Gateway Triangle. 12 The Immokalee Redevelopment Agency was created to benefit blighted areas in Immokalee. During fiscal year 2013 the Bayshore Gateway Redevelopment Agency collected $268,000 in tax increment revenues and was reimbursed $646,899 for stormwater improvements and business development purposes. In addition, grant revenues of $85,596 were received for water management and transportation improvements. Capital expenditures of $683,538 were made for stormwater and transportation improvements with a further$600,964 being spent on associated operating costs. The Government Facilities Impact Fee Fund accounts for the receipt and expenditure of government facilities impact fees collected from qualifying new construction. During fiscal year 2013 governmental facilities impact fees totaling $1,687,226 were collected. The impact fees must be used for the acquisition or construction of growth related capital government facilities, or related debt service. During fiscal year 2013 the Government Facilities Impact Fee Fund made debt service related transfers of $4,379,877, paid $5,690 in administrative charges and $12,550 of interest on an interfund advance from the Solid Waste Disposal Fund. Proprietary funds Proprietary fund statements provide the same information as the business-type activities in the government-wide financial statements, but in greater detail, and on a fund basis for enterprise funds. At September 30, 2013,total net position amounted to$898,588,844 for enterprise funds, as compared to$879,272,454 as of September 30, 2012,an increase of$19,316,390. Net position changes as a result of operations, non-operating revenues and expenses, capital contributions and grants and donations. The Collier County Water and Sewer District's activities represent the majority of the increase in the business-type net position. For the year ended September 30, 2013 the Water and Sewer District reported capital grants and contributions of $20,520,941, which includes system development fees of $13,492,489, $5,876,552 in developer infrastructure contributions and other contributions of$1,151,900. Net Operating Income/(Loss) 2013 2012 County Water and Sewer $ (257,949) $ 10,508,829 Solid Waste Disposal 1,927,527 4,924,135 Non-major enterprise funds (21,417,533) (21,683,842) Total $ (19,747,955) $ (6,250,878) 13 The Collier County Water and Sewer Fund net operating income decreased by $10,766,778, when compared to fiscal year 2012. The decrease in net operating income was the result of an increase in operating expense of 29.9%. The reason for this was the increase in spending related to maintenance. County Water and Sewer payments in lieu of taxes paid to the General Fund of $4,958,200 were reclassified from operating expense to operating transfers for financial statement purposes. Total operating expenses, including depreciation, increased by $12,735,357 when compared to fiscal year 2012. Capital Assets Collier County's financial statements present capital assets in two distinct groups, those that are depreciated and those not subject to depreciation. Buildings and equipment are examples of assets that are depreciated and land and construction in progress are examples of assets not depreciated. Collier County's investment in capital assets for the governmental and business-type activities amounted to $2,475,009,793, net of accumulated depreciation. This investment in capital assets, both purchased and donated, includes land, buildings and improvements, water and wastewater plants, machinery and equipment, parks, roads, beach renourishment and drainage structures. Investment in capital assets for the current fiscal year, net of depreciation, decreased by $5,781,877 when compared to the previous year. There was a decrease in the governmental activities net capital assets of $11,058,523, or .7%, while the business-type activities capital assets increased by $5,276,646, or .6%. In the governmental activities amounts depreciated exceeded amounts capitalized. The major factors behind these changes are as follows: • The business-type activities capitalized $35,586,912 of work in process during fiscal year 2013 including $3,484,339 for forcemain transmission system improvements, $2,729,364 for wastewater pump station enhancements and $2,982,574 for construction of pipeline at the South Reverse Osmosis Wellfield, $679,352 for the Marco Airport Taxiway, $791,150 for the Immokalee Airport Taxiway and $1,076,554 for a new landfill facility. In addition, mass transit costs of$2,222,053 related to the construction of an Intermodal Transfer Facility and $1,214,074 of solid waste costs for roadway hardening were capitalized as work in progress. The remaining $20,407,452 was made up of$18,419,375 in other County Water and Sewer projects, $395,143 in other airport projects,$1,178,012 in other solid waste projects and$414,922 in Mass Transit. • Capitalization of construction in progress of $37,746,776 for governmental activity related costs including $6,363,238 for White Boulevard bridge construction, $2,660,339 for the Gordon Greenway Park, $3,437,062 for Davis Boulevard widening, $4,812,198 for Collier Boulevard improvements and $3,902,940 for Lely stormwater improvements. In addition, $2,837,177 was spent for various intersection improvements. The remaining $13,733,822 related to $2,546,719 in other transportation projects, $2,952,641 in culture and recreation projects, $4,827,060 in other physical environment projects and $3,407,402 in other capital projects. • Total purchases of land and non-depreciable assets were $14,536,495 for fiscal year 2013,compared to$13,709,272 for fiscal year 2012. Additional information regarding Collier County's capital assets can be found in Note 5 beginning on page 54 of this report. 14 Debt Administration At September 30, 2013, Collier County had total bonded debt, notes and loans, net of premiums and deferred losses of$604,309,317, a decrease of$37,914,567 from the previous year. The following table illustrates the balances of all bonds, notes and loans, net,for the fiscal years ended September 30, 2013 and 2012: Outstanding Debt 2013 2012 Limited General Obligation Bonds, net $ 4,663,968 $ 9,993,882 Revenue Bonds, net 480,426,906 530,106,136 State Revolving Fund Loans 111,717,317 92,368,676 Miscellaneous Notes 7,501,126 9,755,190 Total $ 604,309,317 $ 642,223,884 On April 16, 2013 Collier County issued the Series 2013 Special Obligation Refunding Revenue Bonds in the par amount of $73,805,000. These bonds were issued for the purpose of advance refunding the County's remaining outstanding Capital Improvement Revenue Refunding Bonds, Series 2003 and 2005. The refinancing of the Series 2003 and 2005 Bonds, and their attendant restrictive covenants, eliminated the cash reserve surety replacement required by the Series 2003 and 2005 bonds. On June 27, 2013 the Collier County Water and Sewer District issued the Series 2013 Water and Sewer Refunding Revenue Bonds in the par amount of$17,769,080. These bonds were issued for the purpose of current refunding all of the District's outstanding Series 2003B Refunding Revenue Bonds. In August of 2013, the Collier County Water and Sewer District borrowed $25,000,000 from the State Revolving Fund Loan Program for purposes of advance refunding a portion of the District's Series 2006 Revenue Bonds. On September 19, 2013 the State Revolving Fund proceeds were placed in escrow and the Series 2006 Revenue Bonds partially defeased. The Constitution of the State of Florida, Florida Statute 200.181 and Collier County set no legal debt limit. Further information regarding Collier County's long-term debt can be found in Note 6 beginning on page 55 of this report. General Fund Budgetary Highlights During the current fiscal year, the Board of County Commissioners approved a $1,490,970 increase in General Fund expenditure appropriations between the original and the final amended budget. Significant budgetary variances between the final amended budget and actual results are listed below: • $343,000 increase in Clerk's agency for personal services for pay plan adjustment • $400,000 increase in Clerk's operating expenditure for data processing services 15 • $279,000 increase in Clerk's capital for data processing equipment • $439,771 decrease in the Tax Collector's agency to reduce budget to actual expenditures • $316,470 increase in County Attorney operating due to re-budgeting of lapsed appropriations from the previous fiscal year • $696,320 increase in Other General Administration due to re-budgeting of lapsed appropriations from the previous fiscal year • $1,390,000 increase in charges for services and Sheriff's agency personal services related to special detail duties • $300,000 increase in mental health operating to provide additional mental health resources to the community • $421,216 decrease in client assistance operating to provide additional funding for personal services and community mental health services • $1,152,213 decrease in Beach/Water Park Operations due to revised revenue forecasts Significant variances between actual results and final budget amounts in the General Fund occurred during fiscal year 2013. Tax revenues were under budget by $7,838,357 primarily due to the early payment discount allowed for property taxes. The discount ranges from a maximum 4% to 1%, depending on the date of payment. General Fund general government expenditures were under budget primarily due to $813,412 in unspent budget related to goods and services contracted for in 2013 that had not been received as of September 30, 2013 as well as an effort to reduce spending in all departments. Economic Factors and Year 2014 Budgets and Rates The following factors were taken into account in preparing the fiscal year 2014 budget: • A 3.6%increase in countywide taxable property values. • Millage neutral General Fund and Unincorporated Area General Fund tax rates. • Expected year on year increases in sales tax and state shared revenues of 8.8% and 4.7%, respectively. • No new fees or service charges to Collier County residents. • Continuation of Board Agency exception basis hiring freeze within ad valorem funded operations and enterprise operations. • Maintain health care program contributions at 80%employer and 20% employee across all agencies (Non-Sheriff). 16 During fiscal year 2013, the General Fund unassigned fund balance decreased by $593,613 to $56,496,736. As of December 15, 2013, $51,206,886 of the fiscal year 2013 unassigned fund balance has been appropriated as carryforward for fiscal year 2014,with$25,816,206 budgeted in reserves. Contact Information This financial report is intended to give the user a general overview of Collier County Government's finances. Any questions resulting from review of this information may be addressed to: Collier County Clerk of the Circuit Court Department of Finance and Accounting 3299 Tamiami Trail East,Suite#403 Naples, Florida 34112-5746 Our office may also be contacted via the internet at www.collierclerk.com. 17 COLLIER COUNTY, FLORIDA STATEMENT OF NET POSITION SEPTEMBER 30,2013 Primary Government Governmental Business-type Component Activities Activities Total Units ASSETS Current assets: Cash,cash equivalents and investments $ 202,859,730 $182,940,327 $ 385,800,057 $ 376,350 Trade receivables,net 1,602,412 9,465,205 11,067,617 - Special assessments receivable - 29,123 29,123 - Interest receivable 187,109 330,081 517,190 - Unbilled receivables - 5,328,740 5,328,740 - Due from other governments 5,150,024 187,622 5,337,646 - Internal balances (1,510,724) 1,510,724 - - Deposits 56,986 4,514,456 4,571,442 - Inventoryforresale 245,951 - 245,951 - Inventory 1,106,966 4,848,219 5,955,185 - Prepaid costs 22,351 8,736 31,087 - Restricted assets: Cash,cash equivalents and investments 25,683,649 3,685,612 29,369,261 - Trade receivables,net 957,931 - 957,931 - Notes receivable 38,574 - 38,574 - Interest receivable 208,925 - 208,925 - Due from other governments 12,062,123 3,497,174 15,559,297 - Inventory for resale 14,545,322 - 14,545,322 - Total current assets 263,217,329 216,346,019 479,563,348 376,350 Noncurrent assets: Restricted assets: Cash,cash equivalents and investments 190,268,199 34,214,676 224,482,875 - Notes receivable 7,112,133 - 7,112,133 - Special assessments receivable 19,712 24,534 44,246 - Notes receivable 1,668,563 - 1,668,563 - Deferred charges 4,878,941 594,020 5,472,961 - Capital assets: Land and non-depreciable capital assets 453,474,565 92,995,464 546,470,029 - Depreciable capital assets,net 1,133,979,000 794,560,764 1,928,539,764 - Total noncurrent assets 1,791,401,113 922,389,458 2,713,790,571 - Total assets 2,054,618,442 1,138,735,477 3,193,353,919 376,350 The notes to the financial statements are an integral part of this statement. 18 Primary Government Governmental Business-type Component Activities Activities Total Units LIABILITIES Current liabilities: Accounts payable $ 12,420,491 $ 9,781,523 $ 22,202,014 $ - Wages payable 7,698,567 2,257,814 9,956,381 - Retainage payable 370,122 767,601 1,137,723 - Due to other governments 2,958,257 848,453 3,806,710 - Due to individuals 281,158 748,995 1,030,153 - Self-insurance claims payable 6,597,641 - 6,597,641 - Compensated absences 8,522,318 2,174,269 10,696,587 - Capital lease obligations 92,933 39,651 132,584 - Unearned revenue 332,441 - 332,441 - Interest payable 6,390,483 1,819,953 8,210,436 - Bonds and loans payable 18,127,807 12,013,942 30,141,749 - Liabilities payable from restricted assets: Accounts payable 12,212,717 331,245 12,543,962 - Wages payable 405,023 - 405,023 - Retainage payable 1,831,311 238,208 2,069,519 - Refundable deposits 3,893,138 56,597 3,949,735 - Notes payable - 69,190 69,190 - Due to other governments 11,960,591 - 11,960,591 - Unearned revenue 904,919 247,392 1,152,311 - Bonds and loans payable - 2,824,489 2,824,489 - Total current liabilities 94,999,917 34,219,322 129,219,239 - Noncurrent liabilities: Self-insurance claims payable 1,531,237 - 1,531,237 - Compensated absences 14,585,667 543,567 15,129,234 - Capital lease obligations 229,926 - 229,926 - Landfill post-closure liability - 1,940,346 1,940,346 - Net OPEB obligation 2,178,830 - 2,178,830 - Bonds and loans payable,net 367,830,491 203,443,398 571,273,889 - Total noncurrent liabilities 386,356,151 205,927,311 592,283,462 - Total liabilities 481,356,068 240,146,633 721,502,701 - NET POSITION Net investment in capital assets 1,198,970,975 668,159,749 1,867,130,724 - Restricted for: Growth related capital expansion 69,472,333 23,450,002 92,922,335 - Transportation capital projects 32,046,113 - 32,046,113 - Tourist development 36,063,934 - 36,063,934 - Conservation Collier 36,778,419 - 36,778,419 - Community redevelopment 13,529,341 - 13,529,341 - Grants 11,605,382 - 11,605,382 - Debt service 970,653 10,628,810 11,599,463 - Special revenues-other 21,035,543 - 21,035,543 - Renewal and replacement - 300,000 300,000 - Unrestricted 152,789,681 196,050,283 348,839,964 376,350 Total net position $1,573,262,374 $898,588,844 $2,471,851,218 $ 376,350 19 COLLIER COUNTY, FLORIDA STATEMENT OF ACTIVITIES FOR THE FISCAL YEAR ENDED SEPTEMBER 30,2013 Program Revenues Fees,Fines and Operating Capital Charges for Grants and Grants and FUNCTIONS/PROGRAMS Expenses Services Contributions Contributions Primary Government: Governmental Activities: General government $ 95,940,609 $ 36,079,370 $ 1,227,662 $ 1,708,200 Public safety 171,210,007 19,735,168 1,866,824 2,672,758 Physical environment 16,605,341 857,905 1,680,261 2,087,286 Transportation 69,274,916 1,044,867 4,158,576 14,801,247 Economic environment 14,511,977 1,884,932 9,480,577 - Human services 11,950,165 924,047 2,124,959 155,108 Culture and recreation 41,452,974 8,416,073 382,519 6,855,529 Interest and fiscal charges 16,128,899 - - - Total governmental activities 437,074,888 68,942,362 20,921,378 28,280,128 Business-type Activities: Water and sewer 114,040,974 109,175,630 2,025 20,514,598 Solid waste 32,759,645 34,585,322 165,864 307 Airport authority 4,439,500 3,020,795 - 1,542,957 Mass transit 10,110,842 1,450,177 3,576,436 2,895,648 Emergency medical services 21,545,387 10,335,311 169,440 - Total business-type activities 182,896,348 158,567,235 3,913,765 24,953,510 Total primary government $ 619,971,236 $ 227,509,597 $ 24,835,143 $ 53,233,638 Component Units: Industrial Development Authority $ - $ 2,500 $ - $ - Health Facilities Authority 2,275 - - - Housing Finance Authority 25 - - - Educational Facilities Authority 35 49,522 - - Total component units $ 2,335 $ 52,022 $ - $ - General revenues: Property taxes Gas taxes Sales taxes Tourist taxes Communications services tax State revenue sharing Other taxes Interest income Miscellaneous Transfers,net Total general revenues and transfers Change in net position Net position-beginning Net position-ending The notes to the financial statements are an integral part of this statement. 20 Net(Expense)Revenue and Changes in Net Position Primary Government Governmental Business-type Component Activities Activities Total Units $ (56,925,377) $ - $ (56,925,377) $ - (146,935,257) - (146,935,257) - (11,979,889) - (11,979,889) - (49,270,226) - (49,270,226) - (3,146,468) - (3,146,468) - (8,746,051) - (8,746,051) - (25,798,853) - (25,798,853) - (16,128,899) - (16,128,899) - (318,931,020) - (318,931,020) - - 15,651,279 15,651,279 - - 1,991,848 1,991,848 - - 124,252 124,252 - - (2,188,581) (2,188,581) - - (11,040,636) (11,040,636) - 4,538,162 4,538,162 - (318,931,020) 4,538,162 (314,392,858) - $ 2,500 (2,275) (25) 49,487 49,687 249,352,063 - 249,352,063 - 18,228,523 - 18,228,523 - 32,168,001 - 32,168,001 - 16,183,377 - 16,183,377 - 4,872,492 - 4,872,492 - 8,792,335 - 8,792,335 - 4,530,362 - 4,530,362 - 1,495,888 712,094 2,207,982 145 9,063,401 153,865 9,217,266 - (13,912,269) 13,912,269 - - 330,774,173 14,778,228 345,552,401 145 11,843,153 19,316,390 31,159,543 49,832 1,561,419,221 879,272,454 2,440,691,675 326,518 $ 1,573,262,374 $ 898,588,844 $ 2,471,851,218 $ 376,350 21 COLLIER COUNTY,FLORIDA BALANCE SHEET GOVERNMENTAL FUNDS SEPTEMBER 30,2013 Bayshore Gateway Immokalee Government Other Total General Redevelopment Redevelopment Facilities Governmental Governmental Fund Agency Agency Impact Fee Funds Funds ASSETS Cash,cash equivalents and investments $67,685,032 $ 323,599 $ 283,772 $ 3,813,972 $300,249,599 $372,355,974 Receivables: Interest 54,755 719 479 3,773 301,034 360,760 Trade,net 414,091 28,019 - 617 1,668,904 2,111,631 Notes 1,668,563 - - 234,415 6,916,292 8,819,270 Special assessments - - - - 19,712 19,712 Due from other funds 4,392,288 - 185,411 - 5,014,303 9,592,002 Due from other governments 4,437,515 - 85,597 29,555 12,608,270 17,160,937 Deposits 4,628 - - - 1,250 5,878 Inventory for resale - 13,037,114 - - 1,754,159 14,791,273 Inventory 64,298 - - - 199,552 263,850 Advances to other funds 15,656,925 - - - 45,849,400 61,506,325 Prepaid costs 22,351 - - - - 22,351 Total assets $94,400,446 $ 13,389,451 $ 555,259 $ 4,082,332 $374,582,475 $487,009,963 LIABILITIES AND FUND BALANCES Liabilities: Accounts payable $ 7,231,434 $ 16,348 $ 156,845 $ 6,557 $ 16,905,192 $ 24,316,376 Wages payable 5,404,602 12,513 15,084 - 2,343,988 7,776,187 Due to other funds 746,274 - 173,059 - 4,280,109 5,199,442 Due to other governments 1,602,708 1,149 - - 13,283,017 14,886,874 Due to individuals 277,008 - - - 4,150 281,158 Deferred revenue 2,177,003 - - 234,415 7,856,897 10,268,315 Refundable deposits 3,811,909 - - - 81,229 3,893,138 Retainage payable - - - - 2,201,433 2,201,433 Advances from other funds - - - 26,307,341 38,018,925 64,326,266 Total liabilities 21,250,938 30,010 344,988 26,548,313 84,974,940 133,149,189 Fund balances(deficit): Nonspendable 15,743,574 - - - 46,048,952 61,792,526 Restricted 95,786 13,359,441 210,271 - 210,129,967 223,795,465 Committed - - - - 29,810,351 29,810,351 Assigned 813,412 - - - 36,364,400 37,177,812 Unassigned 56,496,736 - - (22,465,981) (32,746,135) 1,284,620 Total fund balances(deficit) 73,149,508 13,359,441 210,271 (22,465,981) 289,607,535 353,860,774 Total liabilities and fund balances(deficit) $94,400,446 $ 13,389,451 $ 555,259 $ 4,082,332 $374,582,475 $487,009,963 The notes to the financial statements are an integral part of this statement. 22 COLLIER COUNTY,FLORIDA RECONCILIATION OF THE BALANCE SHEET OF GOVERNMENTAL FUNDS TO THE STATEMENT OF NET POSITION SEPTEMBER 30,2013 Differences in amounts reported for governmental activities in the statement of net position on pages 18-19 Fund balances-total governmental funds $ 353,860,774 Capital assets used in governmental activities are not financial resources and therefore are not reported in the funds. Those assets consist of: Land and other non-depreciable assets $ 399,451,397 Construction in progress 54,023,168 Depreciable assets,net of$68,101,407 in accumulated depreciation 1,116,130,483 1,569,605,048 Certain long-term assets are not financial resources and therefore are not reported in the governmental funds. 4,878,941 Certain revenues will be collected after year-end,but are not available to pay for the current period's expenditures,and therefore are reported as deferred revenue in the funds. 9,030,955 Certain liabilities applicable to the County's governmental activities are not due and payable in the current period and accordingly are not reported as fund liabilities. Interest on long-term debt is not accrued in the governmental funds,but is recognized as an expenditure when due. All liabilities are reported in the statement of net position. Balances at September 30,2013 are: Accrued interest on bonds $ (6,390,483) Bonds and notes payable (374,858,064) Capital lease obligations (322,859) Compensated absences (22,573,876) Unamortized deferred loss 13,010,523 Unamortized premium (24,110,757) (415,245,516) Internal service funds are used by the County to charge self-insurance,fleet management and information technology services to individual funds. The assets and liabilities of the internal service funds are included in governmental activities in the statement of net position. Internal service fund net position is: 51,132,172 Total net positions-governmental activities $1,573,262,374 The notes to the financial statements are an integral part of this statement. 23 COLLIER COUNTY,FLORIDA STATEMENT OF REVENUES,EXPENDITURES AND CHANGES IN FUND BALANCES GOVERNMENTAL FUNDS FOR THE FISCAL YEAR ENDED SEPTEMBER 30,2013 Bayshore Gateway Immokalee Government Other Total General Redevelopment Redevelopment Facilities Governmental Governmental Fund Agency Agency Impact Fee Funds Funds Revenues: Taxes $200,359,643 $ 906,000 $ 268,000 $ - $ 84,231,661 $285,765,304 Licenses,permits and impact fees 292,303 - 1,130 1,687,226 33,187,486 35,168,145 Intergovernmental 42,470,088 - 85,596 - 41,111,291 83,666,975 Charges for services 16,310,979 1,236,768 646,899 - 14,240,720 32,435,366 Fines and forfeitures 868,515 - - - 2,842,963 3,711,478 Interest income 436,860 2,902 907 7,951 957,700 1,406,320 Special assessments - - - - 2,923,626 2,923,626 Miscellaneous 1,332,240 388,051 191 - 3,112,379 4,832,861 Total revenues 262,070,628 2,533,721 1,002,723 1,695,177 182,607,826 449,910,075 Expenditures: Current: General government 52,057,913 - - 5,690 23,661,053 75,724,656 Public safety 131,699,078 - - - 21,866,529 153,565,607 Physical environment 705,388 - - - 13,084,164 13,789,552 Transportation 244,472 - - - 36,925,635 37,170,107 Economic environment 565,889 1,104,773 600,964 - 12,164,848 14,436,474 Human services 9,861,689 - - - 2,392,253 12,253,942 Culture and recreation 14,507,367 - - - 19,237,113 33,744,480 Debt service: Principal - - - - 25,125,146 25,125,146 Interest - - - 12,550 17,552,711 17,565,261 Payment to refunding bond escrow - - - - 131,729 131,729 Fiscal charges - - - - 2,165,185 2,165,185 Capital outlay 5,861,479 1,036,499 683,538 - 53,696,160 61,277,676 Total expenditures 215,503,275 2,141,272 1,284,502 18,240 228,002,526 446,949,815 Excess(deficiency)of revenues over(under)expenditures 46,567,353 392,449 (281,779) 1,676,937 (45,394,700) 2,960,260 Other financing sources(uses): Bonds issued - - - - 73,805,000 73,805,000 Premiums on bonds issued - - - - 2,082,016 2,082,016 Payment to refunding bond escrow - - - - (73,746,911) (73,746,911) Sale of capital assets 176,863 - - - 56,369 233,232 Insurance proceeds 28,948 - - - 270,720 299,668 Transfers in 11,834,614 136,800 76,000 - 78,589,677 90,637,091 Transfers out (56,524,908) (1,494,900) - (4,379,877) (39,661,765) (102,061,450) Total other financing sources(uses) (44,484,483) (1,358,100) 76,000 (4,379,877) 41,395,106 (8,751,354) Net change in fund balances 2,082,870 (965,651) (205,779) (2,702,940) (3,999,594) (5,791,094) Fund balances(deficit)at beginning of 71,066,638 14,325,092 416,050 (19,763,041) 293,607,129 359,651,868 Fund balances(deficit)at end of year $ 73,149,508 $ 13,359,441 $ 210,271 $(22,465,981) $289,607,535 $353,860,774 The notes to the financial statements are an integral part of this statement. 24 COLLIER COUNTY,FLORIDA RECONCILIATION OF THE STATEMENT OF REVENUES,EXPENDITURES AND CHANGES IN FUND BALANCES OF GOVERNMENTAL FUNDS TO THE STATEMENT OF ACTIVITIES FOR THE FISCAL YEAR ENDED SEPTEMBER 30,2013 Differences in amounts reported for governmental activities in the statement of activities on pages 20-21: Net change in fund balances-total governmental funds $ (5,791,094) Governmental funds report capital outlays as expenditures. However,in the statement of activities the cost of those assets is allocated over their estimated useful lives and reported as depreciation expense. Capital outlay $ 61,277,676 Depreciation expense (68,101,407) (6,823,731) Donations of capital assets are not financial resources to governmental funds,but receiving donated assets increases net position in the statement of net position. 408,460 Capital assets transferred to and from proprietary funds are not recorded in the governmental funds as there is no flow of current financial resources. (1,564,996) In the statement of activities,the loss on the sale of capital assets is reported. However,in the governmental funds the proceeds from the sale of capital assets increase financial resources. The change in net position differs from the change in fund balance by the net book value of assets disposed. (1,535,195) Certain revenues not considered available are not recognized in the governmental funds but are included in the statement of activities. 1,771,908 Debt proceeds provide current financial resources to governmental funds,but issuing debt increases long-term liabilities in the statement of net position. Proceeds from bonds (73,805,000) Repayment of principal on long-term debt is an expenditure in governmental funds,but a reduction of long-term liabilities in the statement of net position. Bond and loan principal payments $ 25,036,363 Premium on bonds issued (2,082,016) Payments to refunding escrow agent 73,878,640 Payments on capital lease obligations 88,783 96,921,770 Certain amounts 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. Installment payment program to State of Florida $ 686,404 Increase in compensated absences 52,533 Accrued interest on bonds and loans 574,214 Amortization of deferred charges (322,442) Amortization of deferred loss (786,850) Amortization of premium 2,020,765 Amortization of discount (1,614) 2,223,010 Certain amounts reported in the statement of activities as deferred are reported as expenditures in the governmental funds. 2,117,474 The net revenues of internal service funds are reported with governmental activities. (2,079,453) Change in net position-governmental activities $ 11,843,153 The notes to the financial statements are an integral part of this statement. 25 COLLIER COUNTY,FLORIDA GENERAL FUND STATEMENT OF REVENUES, EXPENDITURES AND CHANGES IN FUND BALANCES BUDGET AND ACTUAL(BUDGETARY BASIS) FOR THE FISCAL YEAR ENDED SEPTEMBER 30,2013 Variance with Final Budget Original Final Favorable Budget Budget Actual (Unfavorable) Revenues: Taxes $208,198,000 $208,198,000 $200,359,643 $ (7,838,357) Licenses,permits and impact fees 253,500 253,500 292,303 38,803 Intergovernmental 37,785,000 37,785,000 42,470,088 4,685,088 Charges for services 18,397,194 19,895,889 16,310,979 (3,584,910) Fines and forfeitures 1,205,300 1,205,300 868,515 (336,785) Interest income 581,400 581,400 560,353 (21,047) Miscellaneous 6,912,200 6,927,391 7,826,640 899,249 Total revenues 273,332,594 274,846,480 268,688,521 (6,157,959) Expenditures: Current: General government Board of County Commissioners personal services 1,035,500 1,029,605 932,245 97,360 Board of County Commissioners operating 89,300 95,195 66,839 28,356 County manager administrative personal services 750,600 750,600 609,525 141,075 County manager administrative operating 43,100 43,100 31,217 11,883 Budget and management personal services 645,500 645,500 631,884 13,616 Budget and management operating 67,600 67,600 43,252 24,348 Administrative services personal services 2,108,600 2,085,306 1,875,526 209,780 Administrative services operating 108,400 136,900 100,612 36,288 Human resources administration personal services 1,185,400 1,185,400 1,107,308 78,092 Human resources administration operating 218,300 218,300 164,751 53,549 Clerk of the Circuit Court personal services 5,701,200 6,044,200 5,853,776 190,424 Clerk of the Circuit Court operating 2,213,800 2,613,800 2,375,581 238,219 Clerk of the Circuit Court capital outlay 15,500 294,500 182,144 112,356 Property Appraiser personal services 5,042,882 5,042,882 4,333,799 709,083 Property Appraiser operating 1,433,717 1,433,717 1,688,516 (254,799) Property Appraiser capital outlay 25,000 25,000 204,415 (179,415) Tax Collector personal services 9,297,186 9,026,470 9,026,470 - Tax Collector operating 2,676,336 2,507,422 2,496,472 10,950 Tax Collector capital outlay 29,491 29,350 29,350 - County attorney personal services 2,227,100 2,227,100 2,100,921 126,179 County attorney operating 358,000 674,470 215,853 458,617 Natural resource planning operating 98,200 98,200 97,156 1,044 Circuit court costs operating 34,700 34,700 31,716 2,984 Courthouse security operating 1,241,700 1,241,700 1,230,604 11,096 Courthouse security capital outlay 6,400 6,400 6,266 134 County court cost operating 22,800 22,800 16,158 6,642 State Attorney operating 258,300 261,500 247,358 14,142 Public Defender operating 184,900 183,600 178,991 4,609 Other general administrative personal services 250,000 165,000 81,785 83,215 Other general administrative operating 7,040,800 7,737,120 6,112,428 1,624,692 Other general administrative capital outlay - 23,000 21,532 1,468 26 COLLIER COUNTY,FLORIDA GENERAL FUND STATEMENT OF REVENUES,EXPENDITURES AND CHANGES IN FUND BALANCES BUDGET AND ACTUAL(BUDGETARY BASIS) FOR THE FISCAL YEAR ENDED SEPTEMBER 30,2013 Variance with Final Budget Original Final Favorable Budget Budget Actual (Unfavorable) Facilities management personal services 3,567,500 3,604,800 3,600,464 4,336 Facilities management operating 6,545,100 6,314,927 6,202,065 112,862 Facilities management capital outlay 91,000 101,271 104,565 (3,294) Sheriff personal services 2,749,900 2,749,900 3,107,855 (357,955) Sheriff operating 180,000 180,000 127,944 52,056 Supervisor of Elections personal services 1,885,600 1,920,600 1,835,790 84,810 Supervisor of Elections operating 1,370,200 1,300,217 1,207,258 92,959 Supervisor of Elections capital outlay 14,000 44,444 44,093 351 Real property management personal services 712,000 673,794 673,702 92 Real property management operating 38,600 38,600 38,411 189 Total general government 61,564,212 62,878,990 59,036,597 3,842,393 Public safety Sheriff personal services 102,161,900 103,551,900 104,096,160 (544,260) Sheriff operating 27,504,500 27,590,025 23,667,212 3,922,813 Sheriff capital outlay 2,634,600 2,634,600 5,083,169 (2,448,569) Emergency management administration personal services 813,300 808,300 795,669 12,631 Emergency management administration operating 530,100 530,100 455,259 74,841 Helicopter operations personal services 790,700 765,700 722,148 43,552 Helicopter operations operating 625,400 613,984 582,232 31,752 Helicopter operations capital outlay - 41,416 38,451 2,965 Intersection safety personal services 30,100 30,100 9,239 20,861 Intersection safety operating 696,200 696,200 295,443 400,757 Medical examiner services operating 1,077,800 1,077,800 1,075,716 2,084 Total public safety 136,864,600 138,340,125 136,820,698 1,519,427 Physical environment Conservation and resource management personal services 580,000 599,753 586,622 13,131 Conservation and resource management operating 123,200 131,200 116,365 14,835 lmmokalee cemetery operating 3,700 3,700 2,401 1,299 Total physical environment 706,900 734,653 705,388 29,265 Transportation Alternative transportation modes personal services 225,600 226,000 225,919 81 Alternative transportation modes operating 21,700 21,300 18,553 2,747 Total transportation 247,300 247,300 244,472 2,828 Economic environment Veterans services personal services 213,200 214,400 214,296 104 Veterans services operating 54,000 52,800 34,417 18,383 Housing and urban improvement personal services - 300,000 122,508 177,492 Housing and urban improvement operating 956,400 661,400 194,668 466,732 Housing and urban improvement capital outlay - 25,000 - 25,000 Total economic environment 1,223,600 1,253,600 565,889 687,711 Human services Health Care Responsibility Act operating 46,100 46,100 - 46,100 27 COLLIER COUNTY,FLORIDA GENERAL FUND STATEMENT OF REVENUES,EXPENDITURES AND CHANGES IN FUND BALANCES BUDGET AND ACTUAL(BUDGETARY BASIS) FOR THE FISCAL YEAR ENDED SEPTEMBER 30,2013 Variance with Final Budget Original Final Favorable Budget Budget Actual (Unfavorable) Domestic animal services personal services 1,939,500 1,919,500 1,818,059 101,441 Domestic animal services operating 630,300 642,250 625,049 17,201 Domestic animal services capital outlay 90,000 121,828 26,005 95,823 Health department operating 1,569,100 1,569,100 1,987,794 (418,694) Health department capital outlay - - 6,826 (6,826) Mental health operating 854,200 1,154,200 1,583,094 (428,894) Client assistance personal services 492,600 600,600 564,799 35,801 Client assistance operating 4,320,800 3,899,584 2,997,254 902,330 Client assistance capital outlay - 3,000 2,546 454 Public services division office personal services 304,000 278,000 264,518 13,482 Public services division office operating 21,900 23,000 21,122 1,878 Public services division office capital outlay 1,500 7,500 1,155 6,345 Total human services 10,270,000 10,264,662 9,898,221 366,441 Culture and recreation Library administration personal services 5,171,500 4,961,427 4,932,878 28,549 Library administration operating 1,461,600 1,460,638 1,423,512 37,126 Library administration capital outlay 61,700 61,700 61,652 48 Beach and water park operations personal services 4,670,100 4,267,700 4,179,746 87,954 Beach and water park operations operating 5,152,900 4,403,087 3,971,231 431,856 Beach and water park operations capital outlay 38,400 49,900 49,310 590 Total culture and recreation 16,556,200 15,204,452 14,618,329 586,123 Total expenditures 227,432,812 228,923,782 221,889,594 7,034,188 Excess of revenues over expenditures 45,899,782 45,922,698 46,798,927 876,229 Other financing sources(uses): Sale of capital assets 125,000 129,085 176,863 47,778 Insurance proceeds - 5,533 28,948 23,415 Transfers in 7,752,918 7,111,441 11,834,614 4,723,173 Transfers out (59,868,300) (60,969,022) (59,382,708) 1,586,314 Total other financing sources(uses) (51,990,382) (53,722,963) (47,342,283) 6,380,680 Net change in fund balance (6,090,600) (7,800,265) (543,356) 7,256,909 Fund balance at beginning of year 45,008,200 46,070,472 46,070,472 - Fund balance at end of year $ 38,917,600 $ 38,270,207 $ 45,527,116 $ 7,256,909 Reconciliation: Net change in fund balance,budgetary basis $ (543,356) Net change in fair value of investments (123,493) Ad valorem refunds not budgeted (108,081) Advances budgeted as transfers 2,857,800 Net change in fund balance,GAAP basis $ 2,082,870 The notes to the financial statements are an integral part of this statement. 28 COLLIER COUNTY,FLORIDA BAYSHORE GATEWAY REDEVELOPMENT AGENCY STATEMENT OF REVENUES,EXPENDITURES AND CHANGES IN FUND BALANCES BUDGET AND ACTUAL(BUDGETARY BASIS) FOR THE FISCAL YEAR ENDED SEPTEMBER 30,2013 Variance with Final Budget Original Final Favorable Budget Budget Actual (Unfavorable) Revenues: Taxes $ 906,000 $ 906,000 $ 906,000 $ - Charges for services - 1,496,972 1,236,768 (260,204) Interest income 10,000 10,000 4,970 (5,030) Miscellaneous 317,000 402,937 388,051 (14,886) Total revenues 1,233,000 2,815,909 2,535,789 (280,120) Expenditures: Economic environment Personal services 258,000 258,000 235,547 22,453 Operating 360,500 564,270 869,226 (304,956) Capital outlay - 1,496,972 1,036,499 460,473 Total expenditures 618,500 2,319,242 2,141,272 177,970 Excess of revenues over expenditures 614,500 496,667 394,517 (458,090) Other financing sources(uses): Transfers in 136,800 136,800 136,800 - Transfers out (1,427,800) (1,494,900) (1,494,900) - Total other financing uses (1,291,000) (1,358,100) (1,358,100) - Net change in fund balance (676,500) (861,433) (963,583) (458,090) Fund balance at beginning of year 816,300 1,001,233 1,001,233 - Fund balance at end of year $ 139,800 $ 139,800 $ 37,650 $ (458,090) Reconciliation: Excess of revenues over expenditures,budgetary basis $ (963,583) Net change in fair value of investments (2,068) Net change in fund balance,GAAP basis $ (965,651) The notes to the financial statements are an integral part of this statement. 29 COLLIER COUNTY,FLORIDA IMMOKALEE REDEVELOPMENT AGENCY STATEMENT OF REVENUES, EXPENDITURES AND CHANGES IN FUND BALANCES BUDGET AND ACTUAL(BUDGETARY BASIS) FOR THE FISCAL YEAR ENDED SEPTEMBER 30,2013 Variance with Final Budget Original Final Favorable Budget Budget Actual (Unfavorable) Revenues: Taxes $ 268,000 $ 268,000 $ 268,000 $ - Licenses,permits and impact fees - - 1,130 1,130 Intergovernmental - 261,947 85,596 (176,351) Charges for services - 3,131,363 646,899 (2,484,464) Interest income 4,000 4,000 1,743 (2,257) Miscellaneous - - 191 191 Total revenues 272,000 3,665,310 1,003,559 (2,661,751) Expenditures: Economic environment Personal services 22,000 34,000 11,147 22,853 Operating 593,700 3,378,165 589,817 2,788,348 Capital outlay - 643,621 683,538 (39,917) Total expenditures 615,700 4,055,786 1,284,502 2,771,284 Deficiency of revenues under expenditures (343,700) (390,476) (280,943) (5,433,035) Other financing sources: Transfers in 76,000 76,000 76,000 - Total other financing uses 76,000 76,000 76,000 - Net change in fund balance (267,700) (314,476) (204,943) (5,433,035) Fund balance at beginning of year 386,300 433,076 433,076 - Fund balance at end of year $ 118,600 $ 118,600 $ 228,133 $ (5,433,035) Reconciliation: Excess of revenues over expenditures,budgetary basis $ (204,943) Net change in fair value of investments (836) Net change in fund balance,GAAP basis $ (205,779) The notes to the financial statements are an integral part of this statement. 30 COLLIER COUNTY,FLORIDA STATEMENT OF NET POSITION PROPRIETARY FUNDS SEPTEMBER 30,2013 Business-type Activities Enterprise Funds Governmental County Activities- Water Solid Waste Other Internal Service and Sewer Disposal Funds Total Funds ASSETS Current assets: Cash,cash equivalents and investments $ 153,311,011 $ 24,329,072 $ 5,300,244 $ 182,940,327 $ 46,455,604 Receivables: Trade,net 4,399,205 709,195 4,356,805 9,465,205 448,712 Special assessments 29,123 - - 29,123 - Interest 200,003 123,237 6,841 330,081 35,274 Unbilled revenue 5,327,009 - 1,731 5,328,740 - Due from other funds 138 45,088 36,694 81,920 85,046 Due from other governments 138,620 48,508 494 187,622 51,210 Deposits 4,514,456 - - 4,514,456 51,108 Inventory 4,676,033 - 172,186 4,848,219 843,116 Prepaid costs 8,736 - - 8,736 - Restricted assets: Cash,cash equivalents and investments 2,988,611 71,017 625,984 3,685,612 - Due from other governments - - 3,497,174 3,497,174 - Total current assets 175,592,945 25,326,117 13,998,153 214,917,215 47,970,070 Noncurrent assets: Restricted assets: Cash,cash equivalents and investments 34,214,676 - - 34,214,676 - Receivables: Special assessments 24,534 - - 24,534 - Advances to other funds - 2,819,941 - 2,819,941 - Deferred charges 594,020 - - 594,020 - Capital assets: Land and nondepreciable capital assets 78,704,715 4,469,097 9,821,652 92,995,464 - Depreciable capital assets,net 736,825,219 20,420,438 37,315,107 794,560,764 17,848,517 Total noncurrent assets 850,363,164 27,709,476 47,136,759 925,209,399 17,848,517 Total assets 1,025,956,109 53,035,593 61,134,912 1,140,126,614 65,818,587 (Continued) 31 COLLIER COUNTY,FLORIDA STATEMENT OF NET POSITION PROPRIETARY FUNDS SEPTEMBER 30,2013 Business-type Activities Enterprise Funds Governmental Activities- County Water Solid Waste Other Internal Service and Sewer Disposal Funds Total Funds LIABILITIES Current liabilities: Accounts payable $ 7,308,268 $ 2,065,581 $ 407,674 $ 9,781,523 $ 316,832 Wages payable 1,197,311 100,319 960,184 2,257,814 327,403 Retainage payable 767,601 - - 767,601 - Due to other funds 3,712 - 2,609,410 2,613,122 1,946,404 Due to other governments 459 302 847,692 848,453 31,974 Due to individuals 366,512 - 382,483 748,995 - Self-insurance claims payable - - - - 6,597,641 Compensated absences 1,412,222 123,372 638,675 2,174,269 427,286 Capital lease obligations - - 39,651 39,651 - Interest payable 1,819,953 - - 1,819,953 - Bonds and loans payable 12,013,942 - - 12,013,942 - Liabilities payable from restricted assets: Accounts payable - - 331,245 331,245 - Retainage payable 54,274 - 183,934 238,208 - Refundable deposits 40,025 - 16,572 56,597 - Unearned revenue - 71,017 176,375 247,392 - Notes payable 69,190 - - 69,190 - Bonds and loans payable 2,824,489 - - 2,824,489 - Total current liabilities 27,877,958 2,360,591 6,593,895 36,832,444 9,647,540 Noncurrent liabilities: Self-insurance claims payable - - - - 1,531,237 Compensated absences 353,056 30,843 159,668 543,567 106,823 Net OPEB obligation - - - - 2,178,830 Landfill post-closure liability - 1,940,346 - 1,940,346 - Bonds and loans payable,net 203,443,398 - - 203,443,398 - Total noncurrent liabilities 203,796,454 1,971,189 159,668 205,927,311 3,816,890 Total liabilities 231,674,412 4,331,780 6,753,563 242,759,755 13,464,430 NET POSITION Net investment in capital assets 596,357,040 24,889,535 46,913,174 668,159,749 17,848,517 Restricted for growth related capital expansion 23,450,002 - - 23,450,002 - Restricted for renewal and replacement 300,000 - - 300,000 - Restricted for debt service 10,628,810 - - 10,628,810 - Unrestricted 163,545,845 23,814,278 7,468,175 194,828,298 34,505,640 Total net position $ 794,281,697 $ 48,703,813 $ 54,381,349 897,366,859 $ 52,354,157 Cumulative consolidation adjustment for internal service fund activities related to enterprise funds 1,221,985 Net position of Business-type Activities .,$ 898,588,844 The notes to the financial statements are an integral part of this statement. 32 COLLIER COUNTY, FLORIDA STATEMENT OF REVENUES,EXPENSES AND CHANGES IN FUND NET POSITION PROPRIETARY FUNDS FOR THE FISCAL YEAR ENDED SEPTEMBER 30,2013 Business-type Activities Enterprise Funds Governmental County Activities- Water Solid Waste Other Internal Service and Sewer Disposal Funds Total Funds Operating revenues: Charges for services $ 104,019,978 $ 34,421,997 $ 14,678,376 $ 153,120,351 $ 71,964,519 Miscellaneous 632,484 163,325 175,444 971,253 21,593 Total operating revenues 104,652,462 34,585,322 14,853,820 154,091,604 71,986,112 Operating expenses: Personal services 24,112,343 2,177,634 19,146,856 45,436,833 6,434,299 Operating 44,803,773 29,454,315 14,168,225 88,426,313 66,840,505 Depreciation and amortization 35,994,295 1,025,846 2,956,272 39,976,413 1,793,560 Total operating expenses 104,910,411 32,657,795 36,271,353 173,839,559 75,068,364 Operating income(loss) (257,949) 1,927,527 (21,417,533) (19,747,955) (3,082,252) Non-operating revenues(expenses): Operating grants and contributions 2,025 165,864 3,745,876 3,913,765 - Interest income 577,268 102,121 32,705 712,094 92,036 Insurance reimbursement 122,595 11,292 19,978 153,865 1,972,341 Interest expense (5,437,809) - (5,491) (5,443,300) - Claim settlement 4,475,631 - - 4,475,631 - Loss on disposal of capital assets (2,989,456) (62,207) (684,050) (3,735,713) (17,483) Total non-operating revenues(expenses) (3,249,746) 217,070 3,109,018 76,342 2,046,894 Income(loss)before contributions and transfers (3,507,695) 2,144,597 (18,308,515) (19,671,613) (1,035,358) Capital grants and contributions 20,520,941 635,560 5,359,362 26,515,863 3,686 Transfers in 243,499 39,775 18,119,741 18,403,015 - Transfers out (5,250,731) (576,860) (224,465) (6,052,056) (926,600) Change in net position 12,006,014 2,243,072 4,946,123 19,195,209 (1,958,272) Net position-beginning 782,275,683 46,460,741 49,435,226 54,312,429 Net position-ending $ 794,281,697 $ 48,703,813 $ 54,381,349 $ 52,354,157 Consolidation adjustment for internal service fund activities related to enterprise funds 121,181 Change in net position of Business-type Activities $ 19,316,390 The notes to the financial statements are an integral part of this statement. 33 COLLIER COUNTY, FLORIDA STATEMENT OF CASH FLOWS PROPRIETARY FUNDS FOR THE FISCAL YEAR ENDED SEPTEMBER 30,2013 Business-type Activities Enterprise Funds Governmental County Activities- Water Solid Waste Other Internal Service and Sewer Disposal Funds Total Funds Cash flows from operating activities: Cash received for services $105,146,130 $ 34,681,210 $ 14,500,536 $154,327,876 $ - Cash received from other funds for services - - - - 68,009,186 Cash received from employees for services - - - - 5,381,573 Cash received from other governments for services - - - - 436,686 Cash received from refundable deposits 59,000 749,126 - 808,126 - Cash received from retirees for services - - - - 1,204,905 Cash payments on behalf of retirees - - - - (541,199) Cash payments for goods and services (37,551,242) (28,056,332) (9,986,635) (75,594,209) (65,433,924) Cash payments to employees (23,228,171) (2,073,260) (18,412,474) (43,713,905) (6,149,297) Cash payments for interfund services (7,154,705) (1,249,464) (4,507,917) (12,912,086) (809,819) Cash payments on refundable deposits (52,000) (750,418) (792) (803,210) Net cash provided by(used for)operating activities 37,219,012 3,300,862 (18,407,282) 22,112,592 2,098,111 Cash flows from non-capital financing activities: Cash received from operating grants 252,025 124,347 5,239,653 5,616,025 - Cash transfers from other funds 10,645,005 5,499,738 28,354,379 44,499,122 - Cash transfers to other funds (5,250,731) (6,055,103) (10,013,653) (21,319,487) (926,600) Net cash provided by(used for)non-capital financing activities 5,646,299 (431,018) 23,580,379 28,795,660 (926,600) Cash flows from capital and related financing activities: System development charges 13,546,010 - - 13,546,010 - Special assessment collections 25,620 - - 25,620 - Receipts from insurance reimbursements 166,013 11,292 19,978 197,283 1,898,923 Proceeds from state loans 25,000,000 - - 25,000,000 - Proceeds from disposal of capital assets 108,573 22,742 62,629 193,944 6,349 Proceeds from capital grants 408,000 - 3,959,984 4,367,984 - Proceeds from claim settlement 4,475,631 - - 4,475,631 - Payments for capital acquisitions (24,176,115) (3,971,650) (7,202,524) (35,350,289) (286,318) Payments for construction escrow (4,514,456) - - (4,514,456) - Principal payments on state revolving loans (6,311,359) - - (6,311,359) - Principal payments on bonds (1,672,044) - - (1,672,044) - Payments to escrow agents (31,126,915) - - (31,126,915) - Principal payments on leases - - (134,914) (134,914) - Interest and fiscal agent fees paid (8,483,106) - (5,491) (8,488,597) Net cash provided by(used for)capital and related financing activities (32,554,148) (3,937,616) (3,300,338) (39,792,102) 1,618,954 Cash flows from investing activities: Interest on investments 560,144 96,328 30,628 687,100 82,941 Net cash provided by investing activities 560,144 96,328 30,628 687,100 82,941 Net increase in cash,cash equivalents and investments 10,871,307 (971,444) 1,903,387 11,803,250 2,873,406 Cash,cash equivalents and investments,October 1,2012 179,642,991 25,371,533 4,022,841 209,037,365 43,582,198 Cash,cash equivalents and investments,September 30,2013 $190,514,298 $ 24,400,089 $ 5,926,228 $220 840 615 $ 46,455,604 Current cash,cash equivalents and investments $153,311,011 $ 24,329,072 $ 5,300,244 $182,940,327 $ 46,455,604 Current cash,cash equivalents and investments-restricted 2,988,611 71,017 625,984 3,685,612 - Noncurrent cash,cash equivalents and investments-restricted 34,214,676 - - 34,214,676 - Cash,cash equivalents and investments,September 30,2013 $190,514,298 $ 24,400,089 $ 5,926,228 $220,840,615 $ 46,455,604 (Continued) 34 COLLIER COUNTY,FLORIDA STATEMENT OF CASH FLOWS PROPRIETARY FUNDS (CONTINUED) RECONCILIATION OF OPERATING INCOME(LOSS)TO NET CASH PROVIDED BY(USED FOR)OPERATING ACTIVITIES FOR THE FISCAL YEAR ENDED SEPTEMBER 30,2013 Business-type Activities Enterprise Funds Governmental County Activities- Water Solid Waste Other Internal Service and Sewer Disposal Funds Total Funds Operating income(loss) $ (257,949) $ 1,927,527 $(21,417,533) $(19,747,955) $ (3,082,252) Adjustments to reconcile operating income(loss)to net cash provided by(used for)operating activities: Depreciation expense 35,445,463 1,025,846 2,956,272 39,427,581 1,793,560 Amortization of bond issuance costs 488,377 - - 488,377 - Amortization of utility acquisition adjustment 60,455 - - 60,455 Net changes in assets and liabilities: Trade receivable 1,038,278 95,888 (350,482) 783,684 (237,674) Due from other funds 23,225 572,362 (1,855) 593,732 2,581,306 Due from other governments (28,978) (6,991) 3,532 (32,437) (10,923) Deposits - - - - 262,484 Inventory (526,519) - (33,533) (560,052) 25,427 Prepaid costs 11,096 - - 11,096 - Accounts payable 618,733 (580,159) (294,266) (255,692) (673,432) Wages payable 829,395 71,227 678,691 1,579,313 227,636 Due to other funds (29,142) 18,269 (82) (10,955) (86,085) Due to other governments 6 (200) (1,906) (2,100) 31,974 Due to individuals (515,205) - 5,214 (509,991) - Compensated absences 54,777 33,147 55,691 143,615 57,366 Refundable deposits 7,000 (1,292) (792) 4,916 - Unearned revenue - - (6,233) (6,233) - Self-insurance claims payable - - - - 728,102 Net OPEB obligation - - - - 480,622 Landfill post closure liability - 145,238 - 145,238 - Total adjustments 37,476,961 1,373,335 3,010,251 41,860,547 5,180,363 Net cash provided by(used for)operating activities $ 37,219,012 $ 3,300,862 $(18,407,282) $ 22,112,592 $ 2,098,111 Non-cash investing,capital and financing activities: Bank deposit to bond refunding escrow $ 17,769,080 $ - $ - $ 17,769,080 $ - Developer infrastructure contributions 5,876,552 - - 5,876,552 - Change in fair value of investments (327,236) (49,235) (10,533) (387,004) (56,159) Contributed capital assets 729,428 633,931 1,095,337 2,458,696 3,686 The notes to the financial statements are an integral part of this statement. 35 COLLIER COUNTY,FLORIDA STATEMENT OF FIDUCIARY NET POSITION AGENCY FUNDS SEPTEMBER 30,2013 Agency Funds ASSETS Cash,cash equivalents and investments $ 40,232,188 Receivables: Interest 5,414 Other 40,211 Total assets $ 40,277,813 LIABILITIES Due to other governments $ 7,435,658 Due to individuals 716,621 Refundable deposits 30,303,581 Due to special assessment holders 1,821,953 Total liabilities $ 40,277,813 The notes to the financial statements are an integral part of this statement. 36 COLLIER COUNTY, FLORIDA NOTES TO THE FINANCIAL STATEMENTS SEPTEMBER 30, 2013 INDEX NOTE PAGE NUMBER 1 Summary of Significant Accounting Policies 38 2 Cash,Cash Equivalents and Investments 48 3 Trade Receivables 51 4 Interfund Payables and Receivables 52 5 Capital Assets 54 6 Long-Term Obligations 55 7 Conduit Debt Obligations 63 8 Defeased Debt 63 9 Pension Plan Obligations 64 10 Transfers 66 11 Net Position/Fund Balances 66 12 Risk Management 70 13 Other Postemployment Benefits 72 14 Landfill Liability 75 15 Significant Contingencies 75 16 Significant Commitments 77 17 Fund Deficits 78 18 Subsequent Event 78 37 COLLIER COUNTY, FLORIDA NOTES TO THE FINANCIAL STATEMENTS SEPTEMBER 30, 2013 NOTE 1-SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES THE REPORTING ENTITY The primary government consists of Collier County, a political subdivision of the State of Florida that was established in 1923 by the Florida State Legislature. The County is governed by a Board of County Commissioners which consists of five members elected within single member districts. In addition, there are five separately elected Constitutional Officers: the Tax Collector, Property Appraiser, Sheriff, Clerk of the Circuit Court and County Comptroller and Supervisor of Elections. The Constitutional Officers are elected county wide. Under the direction of the Clerk of the Circuit Court and County Comptroller, the Collier County Finance and Accounting Department maintains the accounting system for the operations of the Board of County Commissioners, Supervisor of Elections and the Clerk of the Circuit Court and County Comptroller. The Tax Collector, Property Appraiser and Sheriff each maintain their own accounting systems. For financial reporting purposes the operations of the Board of County Commissioners and the Constitutional Officers are combined and presented as the primary government. Component units are legally separate agencies that the primary government is financially accountable for or organizations which should be included in the reporting entity because of the nature and significance of their relationship with the primary government. Financial accountability is determined by the primary government's ability to appoint the voting majority of the entity's board, impose its will on the organization,and the existence of a financial benefit/burden relationship or fiscal dependency. The County's blended component units consist of organizations whose respective governing Boards are composed entirely of the Board of County Commissioners serving ex-officio. These entities are legally separate, however financial support has been pledged and financial or operational policies may be significantly influenced by the County. In accordance with Governmental Accounting Standards Board (GASB) Statement No. 61, The Financial Reporting Entity: Omnibus, these organizations are reported as if they were part of the County's operations. Collier County Water and Sewer District The District was established by Chapter 88-499, as amended by Chapter 03-353, Laws of Florida,to provide water, sewer and effluent services to portions of the unincorporated area of Collier County. Goodland Water District The District was established by a Special Referendum Election authorized by Collier County Ordinance 75-5 and Section 125.01(q), Florida Statutes. The District provides potable water service to the residents of Goodland. Collier County Community Redevelopment Agency(CRA) The CRA was established by Resolution 2000-82 to benefit blighted areas in both the Immokalee Redevelopment and Bayshore/Gateway Triangle Redevelopment areas. These two redevelopment areas are geographically separate and distinct. 38 COLLIER COUNTY, FLORIDA NOTES TO THE FINANCIAL STATEMENTS SEPTEMBER 30, 2013 NOTE 1—SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES—CONTINUED THE REPORTING ENTITY—CONTINUED Collier County Airport Authority The Board of County Commissioners was established as the governing body of the Airport Authority by Ordinance 2010-10. The Airport Authority is responsible for construction, improvement, equipment, development, regulation, operation and maintenance of the Marco Island, Immokalee and Everglades Airports and all related airport facilities. Collier County Metropolitan Planning Organization (MPO) The Authority was created in 1981 by Collier County Resolution 81-222 pursuant to Section 334.215, Florida Statutes, as amended by Section 339.175, Florida Statutes. The purpose of the MPO is to provide for short-term and long-term planning for all modes of travel in order to benefit the citizens of Collier County. The MPO is reported as part of the Grants and Shared Revenues fund. The County's discretely presented component units consist of organizations whose board members are appointed by the Board of County Commissioners. The County is able to impose its will on these entities because of its ability to remove appointed members from the component units' Boards. The Authorities maintain their own financial records, but do not issue separate financial statements. GASB 14, as amended by GASB 39, requires that the financial data of the following organizations be reported in separate columns to emphasize that they are legally separate from the County. Collier County Housing Finance Authority The Authority was formed in 1980 by Collier County Ordinance 80-66 for the purpose of stimulating the construction of residential housing for low and moderate income families through the use of public financing. Their financial position and results of operations are reported in the accompanying financial statements and the outstanding conduit debt issued by the Authority is disclosed in Note 7, "Conduit Debt Obligations". Collier County Health Facilities Authority The Authority was established in 1979 by Collier County Ordinance 79-95 for the purpose of assisting health facilities in the acquisition,construction and financing of projects within the County. Their financial position and results of operations are reported in the accompanying financial statements and the outstanding conduit debt issued by the Authority is disclosed in Note 7, "Conduit Debt Obligations". Collier County Industrial Development Authority The Authority was created in 1978 by Collier County Resolution 78-94 to facilitate the financing of projects that promote economic growth and increase opportunities for employment in the County. Their financial position and results of operations are reported in the accompanying financial statements and the outstanding conduit debt issued by the Authority is disclosed in Note 7, "Conduit Debt Obligations". 39 COLLIER COUNTY, FLORIDA NOTES TO THE FINANCIAL STATEMENTS SEPTEMBER 30, 2013 NOTE 1—SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES-CONTINUED Collier County Educational Facilities Authority The Authority was created in 1999 by Collier County Resolution 99-177 to assist institutions for higher education in the construction,financing and refinancing of projects. Their financial position and results of operations are reported in the accompanying financial statements and the outstanding conduit debt issued by the Authority is disclosed in Note 7, "Conduit Debt Obligations". Financial information on the individual component units can be obtained from their respective administrative offices or from the Finance and Accounting Department of the Clerk of the Circuit Court and County Comptroller. Administrative Offices Collier Water and Sewer District Goodland Water District 3339 East Tamiami Trail,Suite#214 3339 East Tamiami Trail,Suite#214 Naples, Florida 34112 Naples, Florida 34112 Collier County Airport Authority Collier County Health Facilities Authority and 2005 Mainsail Drive,Suite#1 Housing Finance Authority Naples, Florida 34114 5150 Tamiami Trail North,Suite#502 Naples, Florida 34103 Bayshore Gateway Community Redevelopment Collier County Industrial Development Authority Agency and Educational Facilities Authority 3570 Bayshore Drive, Unit#102 3050 North Horseshoe Drive,Suite#120 Naples, Florida 34112 Naples, Florida 34104 Immokalee Community Redevelopment Agency Collier County Metropolitan Planning Organization 1320 North 15th Street 2885 South Horseshoe Drive Immokalee, Florida 34142 Naples, Florida 34104 GOVERNMENT-WIDE AND FUND FINANCIAL STATEMENTS The basic financial statements are made up of the government-wide financial statements and fund financial statements. Both of these sets of financial statements distinguish between the governmental and business-type activities of Collier County. The government-wide financial statements consist of a Statement of Net Position and a Statement of Activities. These statements report on the financial condition of Collier County, at the reporting entity level. Internal balances represent net amounts due between the governmental and business-type activities. As a general rule, the effect of interfund activity has been eliminated from the government-wide financial statements. Fiduciary funds are not included in these presentations as their assets do not represent amounts that are available for Collier County government operations. The Statement of Net Position reports all financial and capital resources of Collier County's governmental and business-type activities. Net position equals assets minus liabilities, and is shown in three categories: net investment in capital assets; restricted net position and unrestricted net position. The Statement of Activities reports results of operations on a functional activity (program) basis and demonstrates to what degree the particular program has been self-supporting. 40 COLLIER COUNTY, FLORIDA NOTES TO THE FINANCIAL STATEMENTS SEPTEMBER 30, 2013 NOTE 1-SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES—CONTINUED GOVERNMENT-WIDE AND FUND FINANCIAL STATEMENTS—CONTINUED Program revenues are reported in the following three categories: charges for services, operating grants and contributions and capital grants and contributions. Charges for services are amounts charged to customers for a particular service, and are netted against the cost of the relevant program. Internal charges for indirect services are allocated across functions as direct expenses. Grants and contributions refer to revenues restricted for capital or operational use in a particular program. The general revenue category encompasses all other revenue types and represents revenue collected to support all functions of Collier County government. The fund financial statements follow the government-wide statements and report more detailed information about operations of major funds on an individual basis and nonmajor funds on an aggregate basis for the governmental and proprietary funds. Following the governmental fund balance sheet and statement of revenues, expenditures and changes in fund balances are reconciliations explaining the differences between the governmental fund presentation and the government-wide presentation. BASIS OF PRESENTATION The following are reported as major governmental funds: General Fund—the General Fund is the general operating fund of the County. All general tax revenues and other receipts that are not accounted for in other funds are accounted for in the General Fund. The general operating funds of the Clerk of the Circuit Court and County Comptroller, Property Appraiser, Sheriff, Supervisor of Elections and Tax Collector are presented together with the Board of County Commissioners' general operating fund in the County's consolidated General Fund. Bayshore Gateway and lmmokalee Redevelopment Agency Special Revenue Funds —the Redevelopment funds are used to account for the receipt and expenditure of tax increment revenues generated by the Bayshore Gateway and lmmokalee Community Redevelopment Agencies. Government Facilities Impact Fee Capital Project Fund—the Government Facilities Impact Fee fund is used to account for the receipt and expenditure of government facilities impact fees collected from qualifying new construction. The impact fees must be used for the acquisition and construction of government facilities. The following are reported as major enterprise funds: County Water and Sewer Fund—the County Water and Sewer fund is used to account for the provision of water, wastewater and effluent services to certain portions of the County's unincorporated area. Solid Waste Disposal Fund — the Solid Waste Disposal fund is used to account for the provision of solid waste disposal services to users throughout the County. 41 COLLIER COUNTY, FLORIDA NOTES TO THE FINANCIAL STATEMENTS SEPTEMBER 30, 2013 NOTE 1-SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES—CONTINUED BASIS OF PRESENTATION—CONTINUED Collier County also maintains the following nonmajor fund types: Special Revenue Funds —Special revenue funds are used to account for the proceeds of specific revenue sources that are restricted or committed to expenditure for specific purposes other than debt service or capital projects. Debt Service Funds — Debt service funds are used to account for the accumulation of resources that are restricted, committed or assigned to expenditure for principal and interest related to long-term obligations. Capital Proiect Funds —Capital project funds are used to account for the accumulation of resources that are restricted, committed or assigned to expenditure for capital outlays including the acquisition or construction of capital facilities and other capital assets. Enterprise Funds — Enterprise funds are used to account for activities for which a fee is charged to external users for goods or services. Internal Service Funds — Internal service funds are used to account for the provision of goods and services by one department to other departments within the County or to other governmental units on a cost reimbursement basis. Collier County currently operates the following Internal Service Funds: Self Insurance, Sheriff's Self Insurance, Fleet Management and Information Technology. Agency Funds — Agency funds are custodial in nature and do not report the results of operations (assets equal liabilities). Agency funds are clearing accounts for assets held by the government as an agent for individuals, private organizations or other governments. The Board of County Commissioners, Sheriff, Clerk of the Circuit Court and County Comptroller and Tax Collector all maintain agency funds. BASIS OF ACCOUNTING AND MEASUREMENT FOCUS Basis of accounting refers to when revenues and expenditures or expenses are recognized in the accounts and reported in the financial statements. Basis of accounting relates to the timing of the measurements made regardless of the measurement focus applied. The government-wide financial statements, as well as the fund financial statements for the proprietary funds, are reported using the economic resources measurement focus and the accrual basis of accounting. Revenues are recognized in the period in which they are earned and expenses are recognized in the period incurred. Grant revenues are recognized when eligibility requirements are met. The intent in proprietary operations is that the costs of providing goods or services to the general public be financed primarily through user charges,or where periodic determination of revenues earned, expenses incurred, and/or net income is deemed appropriate. 42 COLLIER COUNTY, FLORIDA NOTES TO THE FINANCIAL STATEMENTS SEPTEMBER 30, 2013 NOTE 1-SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES—CONTINUED BASIS OF ACCOUNTING AND MEASUREMENT FOCUS—CONTINUED Proprietary funds distinguish operating revenues and expenses from non-operating items. Operating revenues and expenses generally result from providing services and producing and delivering goods in connection with a proprietary fund's principal ongoing operations. Operating expenses for enterprise funds and internal service funds include the cost of sales and services, administrative expenses and depreciation on capital assets. All revenues and expenses not meeting this definition are reported as non-operating revenues and expenses. Primary revenues including non-grant intergovernmental revenues, charges for services and interest are treated as susceptible to accrual under the modified accrual basis. In applying the susceptibility-to-accrual concept to grant revenues, the legal and contractual requirements of the numerous individual programs are used as guidance. In addition, grant revenues are considered available if they are expected to be collected within one year of the end of the current fiscal period. Property taxes are discussed later in this footnote. Other revenue sources are not considered measurable and available and are not treated as susceptible to accrual. Expenditures are recorded when the related fund liability is incurred. Exceptions to this general rule include accrued compensated absences and principal and interest on long-term debt. BUDGETS AND BUDGETARY DATA The following are the statutory procedures followed by the Board of County Commissioners in establishing the budgets for the County: 1) Within fifteen days after certification of the ad valorem tax roll by the Property Appraiser, the County budget officer prepares and presents to the Board a tentative budget for the ensuing fiscal year. The budget includes all estimated receipts and all estimated expenditures, reserves and balances to be carried forward at the end of the year as specified in Section 129.03,Florida Statutes. 2)Within eighty days of the certification of value,but not earlier than sixty-five days after certification, the Board holds a public hearing on the tentative budget and proposed millage rate. At this hearing the Board amends and adopts the tentative budget,recomputes the proposed millage rate,and announces publicly the percentage, if any, by which the recomputed proposed millage rate exceeds the rolled- back rate. If the millage rate tentatively adopted exceeds that proposed, each taxpayer within the jurisdiction is notified of the increase by first class mail,at the expense of the Board. 3)Within fifteen days of the meeting adopting the tentative budget,the Board advertises the County's intent to adopt a final budget and millage rate. 4)A public hearing is held by the Board to finalize the budget and adopt a millage rate. This hearing is held not less than two days and not more than five days after the day that the advertisement is first published. Prior to September 30, the millage levy is adopted by a separate vote. The millage rate adopted is not allowed to exceed the tentatively adopted millage rate, except as allowed for by emergency provision with strict public notice requirements. This is followed by the approval and ratification of the final budget. 43 COLLIER COUNTY, FLORIDA NOTES TO THE FINANCIAL STATEMENTS SEPTEMBER 30, 2013 NOTE 1-SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES—CONTINUED BUDGETS AND BUDGETARY DATA—CONTINUED 5)The resolution approved at the final hearing is forwarded to the Property Appraiser, Tax Collector and Florida Department of Revenue,not later than thirty days following the adoption of the Resolution, the Board certifies to the State of Florida, Department of Revenue, Division of Ad Valorem Tax, that it has complied with the provisions of Chapter 200, Florida Statutes. 6)The County Manager approves interdepartmental budget changes within the same fund and division of$50,000 or less that do not impact reserves or recognize revenue. All other budgetary changes must be approved by the Board of County Commissioners as matter of policy. The initial adopted budget was amended in accordance with Florida Statutes. 7) Florida State Section 129.07,as amended in 1978, provides that expenditures in excess of total fund budgets are unlawful. However, because the Board approves all budgetary changes between departments, except those approved by the County Manager, the departmental budget becomes the level of control. Formal budgetary integration is employed as a management control device during the fiscal year for all funds. Budgets have been legally adopted by the Board for all Board departments except for agency funds and the Impact Fees Escrow special revenue fund. The Property Appraiser and the Tax Collector adopt budgets for their general funds independently of the Board. The Clerk of Courts operates as a fee officer, and as such, prepares its budget in accordance with Section 218.35,Florida Statutes. The Sheriff and Supervisor of Elections prepare budgets for their general funds, which are submitted to and approved by the Board. The Clerk of Court's budget for court related functions is prepared according to Section 28.36 Florida Statutes and submitted to the Clerks of Court Operations Corporation for approval by the Legislative Budget Commission. Budgets are adopted for all governmental departments except as described in the previous paragraph. These budgets are adopted on a basis consistent with generally accepted accounting principles (GAAP) except for certain non-budgeted revenues and expenditures and mark to market activity on investments. All unencumbered appropriations lapse at the end of the current year. For further information regarding encumbrances, refer to Note 16 on page 77. Capital project costs are budgeted in the year they are anticipated to be obligated. In subsequent years, the unused budget is reappropriated until the project is completed. Proprietary funds are budgeted on a basis consistent with generally accepted accounting principles, except that capital related and debt transactions are based upon cash receipts and disbursements. Estimated beginning fund balances are considered in the budgetary process. For purposes of the budgetary presentation, certain transactions that have been accounted for in the governmental funds statements of revenues, expenditures and changes in fund balances have not been reflected in the budgetary financial statements. Specifically, bad debt expense and the net change in fair value of investments are not presented in the budget to actual statements. 44 COLLIER COUNTY, FLORIDA NOTES TO THE FINANCIAL STATEMENTS SEPTEMBER 30, 2013 NOTE 1-SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES—CONTINUED ACCOUNTS RECEIVABLE—UNBILLED REVENUE Unbilled charges for services are accrued in the County Water and Sewer and Emergency Medical Services by prorating subsequent bills. INVENTORIES AND PREPAID COSTS Inventory is valued at cost using the first-in, first-out method. Inventory in the governmental funds consists of supplies held for consumption. The cost is recorded as an expenditure at the time inventory items are consumed rather than when purchased. Certain payments to vendors reflect costs applicable to future accounting periods and are recorded as prepaid items. Inventories and prepaid costs reported within governmental funds are classified as non-spendable, which indicates that they do not constitute available resources. Inventories and prepaid costs in the government-wide and proprietary fund financial statements are reported as an expense when consumed. Inventory held for resale consists of real estate holdings, acquired through various programs, which the County intends to sell. The value of these properties includes the original purchase price plus the cost of any rehabilitation. Inventory held for resale of $14,545,322 is classified as restricted and $245,951 is classified as committed,which indicates that they do not constitute available resources. CAPITAL ASSETS Land, buildings, improvements and equipment are stated at cost. Capital contributions are recorded at their fair value on the date donated. Facilities constructed using impact fees, collected from developers and customers,are stated at cost. The County capitalizes expenditures with a cost of$1,000 or more and with a useful life in excess of one year. Expenditures for maintenance and repairs are charged to operating expenses. The cost of capital assets retired or sold, together with the related accumulated depreciation, is removed from the accounts and any gain or loss on disposition is credited or charged to earnings in the government-wide financial statements and proprietary fund financial statements. Depreciation is calculated using the straight-line method. The estimated useful life of the various classes of depreciable capital assets is as follows: Capital Asset Class Estimated Useful Life Buildings 20-45 years Infrastructure 3-30 years Improvements other than buildings 4-45 years Machinery and equipment 3-20 years Costs incurred in the renourishment of beaches are included in the infrastructure class of capital assets and are capitalized and depreciated over three years. Infrastructure acquired prior to fiscal years ended June 30, 1980 is not reported. 45 COLLIER COUNTY, FLORIDA NOTES TO THE FINANCIAL STATEMENTS SEPTEMBER 30, 2013 NOTE 1-SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES—CONTINUED CAPITAL LEASE OBLIGATIONS In the government-wide financial statements and proprietary fund financial statements capital lease obligations and the related cost of assets acquired are reflected in the Statement of Net Position. For capital lease obligations originating in governmental funds, an expenditure for the asset and the offsetting other financing source is reflected in the fund financial statements in the year of inception. BOND PREMIUMS, DISCOUNTS AND ISSUANCE COSTS Bond premiums, discounts and issuance costs for the governmental activities and the business-type activities are deferred and amortized over the term of the bonds using the straight-line method which approximates the effective interest method. Bond discounts are presented as a reduction of the face amount of bonds payable, premiums as an increase, while issuance costs are recorded as deferred charges, which are shown on the face of the Statement of Net Position as a component of noncurrent assets. In the governmental fund financials, bond premiums, discounts and issuance costs are recognized in the current period. DEFEASANCE OF DEBT For refundings resulting in the defeasance of debt, generally accepted accounting principles require that the difference between the reacquisition price and the net carrying amount of the old debt be deferred and amortized over the shorter of the life of the new debt or the remaining life of the old debt as a component of interest expense. The straight-line method is used for amortization of the deferred gain or loss and the unamortized portion is shown as an increase or reduction of bonds payable. INTEREST COST In the proprietary funds, interest costs are expensed or capitalized as required by GASBS 62, Codification of Accounting and Financial Reporting Guidance Contained in Pre-November 30, 1989 FASB and AICPA Pronouncements. PROPERTY TAXES Property taxes become due and payable on November 1st of each year and become delinquent on April 1st of the following year. Property taxes receivable and a corresponding allowance for uncollectible property taxes are not included in the financial statements, as delinquent taxes as of September 30, 2013 are not significant. Discounts on property taxes are allowed for payments made prior to the April 1st delinquent date as follows: November - 4%, December - 3%, January - 2%, and February - 1%. Tax certificates for the full amount of any unpaid taxes must be sold not later than June 1st of each year. No accrual for the property tax levy becoming due in November 2013 is included in the accompanying financial statements,since such taxes are collected to finance expenditures of the subsequent period. 46 COLLIER COUNTY, FLORIDA NOTES TO THE FINANCIAL STATEMENTS SEPTEMBER 30, 2013 NOTE 1-SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES—CONTINUED PROPERTY TAXES—CONTINUED Key dates in the property tax cycle for the fiscal year ended September 30,2013 are as follows: Property Tax Cycle Date Assessment roll compiled January 1,2012 Assessment roll certified July 1,2012 Millage resolution approved Within 35 days of the certification of the assessment roll Beginning of fiscal year for tax levy October 1,2012 Taxes due and payable(levy date) November 1,2012 Collection dates By November 30: 4%discount By December 31: 3%discount By January 31: 2%discount By February 28: 1%discount Due date March 31,2013 Delinquent(lien date) April 1,2013 Tax certificates sold Prior to June 1,2013 NEW ACCOUNTING PRONOUNCEMENTS For the year ended September 30, 2013, the financial statements include the impact of adoption of Governmental Accounting Standards Board Statement(GASBS)numbers 62 and 63. GASBS 62, Codification of Accounting and Financial Reporting Guidance Contained in Pre-November 30, 1989 FASB and AICPA Pronouncements, supersedes GASB20. GASBS 20 gave governments the choice to elect to follow only the authoritative literature of the Governmental Accounting Standards Board (GASB) or to follow Financial Accounting Standards Board (FASB) and American Institute of Certified Public Accountants(AICPA) pronouncements that did not conflict with GASB pronouncements. Upon adoption of GASBS62,all governmental accounting guidance is codified into the GASB literature. GASBS 63, Financial Reporting of Deferred Outflows of Resources, Deferred Inflows of Resources, and Net Position, provides guidance on reporting deferred outflows and inflows of resources. It also renames the residual of all other amounts presented in the statement of financial position from "net assets" to "net position". The financial statements include the statement of position, which reports all assets, deferred outflows of resources, liabilities,deferred inflows of resources,and net position,as applicable. ACCOUNTING ESTIMATES The preparation of financial statements in conformity with generally accepted accounting principles requires management to make estimates and assumptions that affect the reported amounts of assets and liabilities and disclosure of contingent assets and liabilities at the date of the financial statements and the reported amounts of revenues and expenses during the reporting period. Actual results may differ from those estimated. 47 COLLIER COUNTY, FLORIDA NOTES TO THE FINANCIAL STATEMENTS SEPTEMBER 30, 2013 NOTE 1-SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES—CONTINUED UNEARNED REVENUE AND DEFERRED REVENUE In instances where assets have been received by the County for services to be rendered in future periods, asset balances are offset by an unearned revenue liability account in the financial statements. Examples of unearned revenues of the County as of September 30, 2013 are unspent State Housing Initiative Partnership (SHIP) monies and cash receipts associated with unspent advance grant agreements. Deferred revenue liabilities are reported in the governmental funds to offset receivables that do not meet the availability criterion under the modified accrual basis of accounting. Primary examples of the County's deferred revenues are amounts associated with SHIP loans made to qualifying organizations and deferred impact fee agreements made with developers and individuals. ACCRUED COMPENSATED ABSENCES The County follows the provisions of GASB Statement No. 16,Accounting for Compensated Absences. This statement provides for the measurement of accrued vacation leave and other compensated absences using the pay or salary rates in effect at the balance sheet date. It also requires additional amounts to be accrued for certain salary related payments associated with the payment of compensated absences. It is the Board of County Commissioners' policy to allow employees of record on August 2, 1996 a sick leave payment upon termination for any service period earned prior to August 2, 1996 and a payout of unused vacation up to 440 hours for all employees. The Sheriffs policy allows for a percentage of unused sick leave payout based upon years of service, not to exceed 1,000 hours, and up to 500 hours of unused vacation time. Both the Clerk of the Circuit Court and County Comptroller's and Tax Collector's policies allow for a percentage of unused sick leave payout based upon years of service, and up to 240 hours of unused vacation hours. The Property Appraiser's policy allows for a percentage of unused sick leave payout based upon years of service, not to exceed 1,040 hours, and up to 200 hours of unused vacation hours. The Supervisor of Election's policy allows for a percentage of unused sick leave payout based upon years of service,and up to 440 hours of unused vacation. Payments for compensated absences are made by the respective fund. Accrued compensated absences are recorded as liabilities in the government-wide financial statements and the proprietary fund financials. A liability is reported in governmental funds only if they have matured, for example, as a result of employee resignations or retirements,and are considered due and payable as of year end. NOTE 2—CASH,CASH EQUIVALENTS AND INVESTMENTS The County maintains a cash and investment pool that is available for use by all funds. Each fund's portion of this pool is displayed on the balance sheet under the heading of Cash, Cash Equivalents and Investments. Investment income is allocated monthly to participating funds based on the percentage of each fund's average daily balance in the total pool. 48 COLLIER COUNTY, FLORIDA NOTES TO THE FINANCIAL STATEMENTS SEPTEMBER 30, 2013 NOTE 2—CASH.CASH EQUIVALENTS AND INVESTMENTS—CONTINUED As of September 30, 2013,the County had the following cash,cash equivalents and investments: Final First Investment Maturities Fair Value Call Date Call Frequency Rating* Cash on hand N/A $ 82,747 N/A N/A N/A Demand deposits N/A 134,657,505 N/A N/A N/A State Board of Administration Pool: Florida PRIME N/A 732,139 N/A N/A AAAm Pool B N/A 6,090 N/A N/A N/A Federal Home Loan Mortgage Corporation 9/4/2015 25,010,500 none N/A AA+ Federal National Mortgage Association 10/9/2015 25,013,000 10/9/2014 once AA+ Federal Farm Credit Bank 10/16/2015 25,001,000 1/16/2013 once AA+ Federal Home Loan Mortgage Corporation 2/13/2015 50,083,500 2/13/2014 once AA+ Federal National Mortgage Association 6/5/2015 25,008,500 12/5/2013 once AA+ Federal National Mortgage Association 6/24/2015 25,009,500 12/24/2013 quarterly AA+ Federal Home Loan Mortgage Corporation 12/28/2015 24,936,750 6/28/2013 quarterly AA+ Federal National Mortgage Association 12/30/2015 74,900,250 12/30/2013 quarterly AA+ Federal Home Loan Bank 1/8/2016 49,923,000 7/8/2013 quarterly AA+ Federal National Mortgage Association 7/30/2015 34,975,500 1/30/2014 quarterly AA+ Federal National Mortgage Association 8/27/2015 25,003,250 2/27/2014 quarterly AA+ Federal Home Loan Mortgage Corporation 3/18/2015 35,015,400 9/18/2013 once AA+ Federal National Mortgage Association 4/29/2016 24,867,750 10/29/2013 quarterly AA+ Federal National Mortgage Association 11/28/2016 24,734,250 5/28/2014 quarterly AA+ Federal National Mortgage Association 5/27/2016 24,898,000 11/27/2013 quarterly AA+ Federal Home Loan Mortgage Corporation 6/20/2016 24,924,250 12/20/2013 quarterly AA+ Federal Home Loan Mortgage Corporation 10/14/2016 25,101,500 none N/A AA+ Total $ 679,884,381 *Standard and Poor's rating CREDIT RISK Credit risk is the risk that an issuer or other counterparty to an investment will not fulfill its obligations. The County's investment practices are governed by Florida Statutes, Chapter 218 and the County's Investment Policy. The County's Investment Policy limits credit risk by restricting authorized investments to the Florida Local Government Surplus Trust Fund (Florida PRIME), direct obligations of, or obligations backed by the full faith and credit of the United States Government, U.S. government sponsored Corporation/Instrumentalities (except for Student Loan Marketing Association), certificates of deposit collateralized by U.S. Government Securities or Agencies,fixed income mutual funds collateralized by U.S. Government Securities or Agencies, domestic bankers' acceptances rated "AA" or higher, prime commercial paper rated "A-1" and "P-1",tax-exempt obligations rated "AA" or higher and issued by state or local governments, NOW accounts fully collateralized in accordance with Chapter 280, Florida Statutes and qualifying repurchase agreements. 49 COLLIER COUNTY, FLORIDA NOTES TO THE FINANCIAL STATEMENTS SEPTEMBER 30, 2013 NOTE 2—CASH,CASH EQUIVALENTS AND INVESTMENTS—CONTINUED CREDIT RISK—CONTINUED The policy requires that each firm involved in a repurchase agreement must execute the County's master repurchase agreement, a third party custodian must hold collateral for all repurchase agreements with a term of more than one day and the market value of the collateral shall maintain a minimum price of 101 percent on U.S. Government securities and 104 percent on Agencies and Instrumentalities with a term over five (5) years, and must be marked to market at least weekly. The Florida PRIME is an investment pool administered by the State Board of Administration (SBA), under the regulatory oversight of the State of Florida. The SBA operates two pools, Florida PRIME and Fund B Surplus Trust Fund (Fund B), with the Florida PRIME carrying a AAAm rating from Standard&Poor's. At September 30, 2013, the Sheriff had $738,229 invested in the State Board of Administration's Local Government Surplus Funds Trust Fund Investment Pool. Of this amount, $732,139 is invested in the Florida PRIME and $6,090 in Fund B. The Florida PRIME investment is fully liquid and carries a weighted average days to maturity of 44 days. Fund B is accounted for as a fluctuating net asset value pool and the fair value factor for September 30, 2013 was 1.13. Fund B has a weighted average life of 4.04 years. Fund B cash holdings continue to be distributed to participants as they become available from maturities,sales and income received. All cash deposits are held in qualified public depositories pursuant to Florida Statutes Chapter 280, "Florida Security for Public Deposits Act". Under the Act, all qualified public depositories are required to pledge eligible collateral having a market value equal to or greater than the average daily or monthly balance of all public deposits, multiplied by the depository's collateral pledging level. The pledging level may range from 25%to 200%depending upon the depository's financial condition. Any losses to public deposits are covered by applicable deposit insurance, sale of securities pledged as collateral, and if necessary, assessments against other qualified public depositories of the same type as the depository in default. CUSTODIAL CREDIT RISK The policy requires execution of a third-party custodial safekeeping agreement for purchased securities and collateral, and requires that securities be held in the County's name. At September 30, 2013, the County had demand deposits of $134,657,505. These demand deposits do not include discretely presented component unit deposits of $376,350. All balances in excess of the Federal Depository Insurance Corporation insurance for demand deposits are fully collateralized by the multiple financial institutions'collateral pool in accordance with Florida Statutes Section 280. INTEREST RATE RISK Interest rate risk is the risk that changes in market interest rates will adversely affect the fair value of an investment. One of the primary objectives of the investment policy is to match investment cash flow and maturity with known cash needs and anticipated cash flow requirements. The County limits exposure to interest rate risk by structuring the portfolio to meet daily cash flow demands. Investments shall have an average maturity of not more than five years, except for mortgage securities. Mortgage securities will not be used to match liabilities that are reasonably definable as to amount and disbursement date and are used to invest funds associated with reserves or liabilities that are not associated with a specifically identified cash flow schedule. 50 COLLIER COUNTY, FLORIDA NOTES TO THE FINANCIAL STATEMENTS SEPTEMBER 30, 2013 NOTE 2—CASH,CASH EQUIVALENTS AND INVESTMENTS—CONTINUED CONCENTRATION OF CREDIT RISK The County's investment policy establishes limitations on portfolio composition in order to control credit risk. The policy allows 100 percent of the portfolio to be invested in U.S. Government Securities, Agencies and Instrumentalities (excluding mortgage securities), 50 percent to be invested in Florida PRIME, 30 percent to be invested in certificates of deposit, 20 percent to be invested in qualifying repurchase agreements and 10 percent each in the categories of fixed income mutual funds, domestic bankers'acceptances, prime commercial paper and tax-exempt obligations. The portion of the County's portfolio invested in U.S. Government Instrumentalities is detailed as follows,at September 30, 2013: Issuer %of Portfolio Federal Home Loan Bank 7.34% Federal Farm Credit Bank 3.68% Federal Home Loan Mortgage Corporation 27.22% Federal National Mortgage Association 41.83% Total U.S.Government Instrumentalities 80.07% Reconciliation of cash, cash equivalents and investments to the basic financial statements: Primary government: Cash,cash equivalents and investments $ 385,800,057 Restricted cash,cash equivalents and investments-current 29,369,261 Restricted cash,cash equivalents and investments-noncurrent 224,482,875 Agency funds: Cash,cash equivalents and investments 40,232,188 Total $ 679,884,381 NOTE 3-TRADE RECEIVABLES Trade receivables for Governmental and Business-type Activities are net of an allowance for doubtful accounts as follows: Trade Less Allowance for Net Trade Receivables Doubtful Accounts Receivables General Fund $ 1,066,341 $ 652,250 $ 414,091 Bayshore Gateway CRA 28,019 - 28,019 Government Facilities Impact Fee 617 - 617 Nonmajor Governmental Funds 2,334,995 666,091 1,668,904 Total receivables reported in Governmental Funds 3,429,972 1,318,341 2,111,631 Total receivables reported in Internal Service Funds 474,098 25,386 448,712 Total Governmental Activities trade receivables $ 3,904,070 $ 1,343,727 $ 2,560,343 County Water and Sewer $ 4,399,648 $ 443 $ 4,399,205 Solid Waste Disposal 709,195 - 709,195 Nonmajor Enterprise Funds 27,571,918 23,215,113 4,356,805 Total Business-type Activities trade receivables $32,680,761 $ 23,215,556 $ 9,465,205 51 COLLIER COUNTY, FLORIDA NOTES TO THE FINANCIAL STATEMENTS SEPTEMBER 30, 2013 NOTE 3-TRADE RECEIVABLES-CONTINUED The County has multi and single-family home rehabilitation and homeownership loan programs funded under the Community Development Block Grant (CDBG), HOME Investment Partnership Loan Program (HOME), Disaster Recovery Initiative (DRI), Neighborhood Stabilization Program (NSP) and the State Housing Initiative Partnership Program (SHIP). If the homeowners remain in their homes for the full term of the deferred loan, the loan is forgiven. If the property is transferred or sold before the end of the loan period, the proceeds from the repayment including interest, if any, are then repaid and returned to the appropriate grant program. A lien is placed against the property to ensure the repayment of the loan and interest, if any. As collection is uncertain on these loans, they are not recognized in the financial statements. NOTE 4-INTERFUND PAYABLES AND RECEIVABLES ADVANCES Advances to and advances from other funds at September 30, 2013 were as follows: Advance Advance To From Governmental Activities: General Fund $ 15,656,925 $ - Government Facilities Impact Fees Fund - 26,307,341 Other governmental funds: Fire Control Districts - 600,000 Community Development Fund - 400,000 Parks Improvement Fund 400,000 - County-Wide Capital Improvements Fund 45,449,400 - County-Wide Library Impact Fees Fund - 9,877,625 Correctional Facilities Impact Fees Fund - 5,925,300 Emergency Medical Services Impact Fees Fund - 3,048,400 Law Enforcement Impact Fees Fund - 18,167,600 Total Governmental Activities 61,506,325 64,326,266 Business-type Activities: Solid Waste Disposal 2,819,941 - Total Business-type Activities 2,819,941 - Total Advances $ 64,326,266 $ 64,326,266 Advances are made to funds for the purposes of capital acquisitions and improvements, as well as loaning of certain surety requirements. Reimbursements will take place over the next several years as funds are available. 52 COLLIER COUNTY, FLORIDA NOTES TO THE FINANCIAL STATEMENTS SEPTEMBER 30, 2013 NOTE 4-INTERFUND PAYABLES AND RECEIVABLES-CONTINUED DUE FROM AND DUE TO Interfund receivables and payables generally result from recording the excess fees associated with Tax Collector and Property Appraiser services, as excess fees are allocated from the General Fund back to the funds that paid for the collection services. Excess fees are calculated after year end, and as such are interfund receivables and payables. Other outstanding balances are the result of time delays between the provision and payment of interfund services and to cover temporary cash deficits. Due from and due to other funds at September 30, 2013 were as follows: Due From Due To Governmental Activities: General Fund $ 4,392,288 $ 746,274 Immokalee Community Redevelopment Agency 185,411 173,059 Other Governmental Funds: Unincorporated Area MSTD 285,775 1,063 Community Development - 1,600 Water Management and Pollution Control 39,434 - Grants and Shared Revenues 206,127 3,191,710 Improvement Districts 32,682 - Fire Control Districts 25,526 - Lighting Districts 8,894 - 911 Enhancement Fee - 63,646 Tourist Development 123,900 1,851 State Court Administration 1,231 - Confiscated Property - 3,126 Conservation Collier 91,573 - Other Sheriff Special Revenue Funds - 563,578 Other Special Revenue Funds - 1,231 Conservation Collier Limited General Obligation Bonds 44,928 - Forest Lakes Limited General Obligation Bonds 3,883 - Radio Road Limited General Obligation Bonds 756 - Parks Improvements 32,436 Water Management 2,393 - Road Impact Districts 439,086 - Road Construction 3,674,024 452,304 Other Capital Projects 1,655 - Total other governmental funds 5,014,303 4,280,109 Business-type Activities: County Water and Sewer 138 3,712 Solid Waste 45,088 - Other Business-type funds: Collier Area Transit 36,694 2,609,410 Total other business-type funds 36,694 2,609,410 Internal Service Funds 85,046 1,946,404 Total All Funds $ 9,758,968 $ 9,758,968 53 COLLIER COUNTY, FLORIDA NOTES TO THE FINANCIAL STATEMENTS SEPTEMBER 30, 2013 NOTE 5—CAPITAL ASSETS A summary of capital asset activity for the year ended September 30, 2013 is as follows: September 30, Deductions/ September,30 2012 Additions Reclassifications 2013 Governmental Activities: Capital assets not depreciated: Land and other non-depreciable assets $ 386,540,604 $ 13,532,219 $ (621,426) $ 399,451,397 Construction in progress 111,547,679 37,746,776 (95,271,287) 54,023,168 Total capital assets not depreciated 498,088,283 51,278,995 (95,892,713) 453,474,565 Capital assets depreciated: Buildings 434,524,518 266,806 949,218 435,740,542 Infrastructure 859,420,975 751,971 86,238,619 946,411,565 Improvements other than buildings 261,357,766 545,142 3,576,335 265,479,243 Machinery and equipment 178,257,555 9,350,439 (7,401,511) 180,206,483 Total capital assets depreciated 1,733,560,814 10,914,358 83,362,661 1,827,837,833 Less accumulated depreciation: Buildings 122,962,192 13,610,026 (2,906) 136,569,312 Infrastructure 243,841,816 31,471,737 (482) 275,313,071 Improvements other than buildings 125,545,877 10,670,121 (507,590) 135,708,408 Machinery and equipment 140,787,124 14,143,083 (8,662,165) 146,268,042 Total accumulated depreciation 633,137,009 69,894,967 (9,173,143) 693,858,833 Total depreciable capital assets,net 1,100,423,805 (58,980,609) 92,535,804 1,133,979,000 Total Governmental Activities capital assets,net $1,598,512,088 $ (7,701,614) $ (3,356,909) $1.15.8.7.4423.156.5 Business-type Activities: Capital assets not depreciated: Land and other non-depreciable assets $ 25,219,090 $ 177,053 $ 838,014 $ 26,234,157 Construction in progress 61,947,537 35,586,912 (30,773,142) 66,761,307 Total capital assets not depreciated 87,166,627 35,763,965 (29,935,128) 92,995,464 Capital assets depreciated: Buildings 128,956,695 54,916 6,724,199 135,735,810 Improvements other than buildings 1,024,529,754 6,128,166 16,743,502 1,047,401,422 Machinery and equipment 40,665,902 4,408,742 2,289,695 47,364,339 Total capital assets depreciated 1,194,152,351 10,591,824 25,757,396 1,230,501,571 Less accumulated depreciation: Buildings 70,720,064 3,643,153 (160,973) 74,202,244 Improvements other than buildings 303,565,431 31,814,601 (401,520) 334,978,512 Machinery and equipment 24,753,901 3,969,827 (1,963,677) 26,760,051 Total accumulated depreciation 399,039,396 39,427,581 (2,526,170) 435,940,807 Total depreciable capital assets,net 795,112,955 (28,835,757) 28,283,566 794,560,764 Total Bus i ness-type Activiti es capital assets,net $ 882,279,582 $ 6,928,208 $ (1,651,562) $ 887,556,228 54 COLLIER COUNTY, FLORIDA NOTES TO THE FINANCIAL STATEMENTS SEPTEMBER 30, 2013 NOTE 5-CAPITAL ASSETS-CONTINUED Schedule of depreciation for fiscal year 2013: General Government $ 9,492,086 Public Safety 13,894,438 Physical Environment 3,243,371 Transportation 32,702,186 Economic Environment 169,070 Human Services 371,406 Culture and Recreation 8,228,850 Subtotal 68,101,407 Internal Service Funds 1,793,560 Total Governmental Activities $ 69,894,967 Water and Sewer $ 35,464,447 Solid Waste 1,025,846 EMS 683,652 Airport Authority 869,522 Mass Transit 1,384,114 Total Business-type Activities $ 39,427,581 NOTE 6-LONG-TERM OBLIGATIONS SUMMARY OF CHANGES IN LONG-TERM OBLIGATIONS The following is a summary of changes in long-term obligations for the year ended September 30,2013: 000's Omitted Premium/Discount October 1, or Deferred Charge September 30, Due within 2012 Additions Reductions Amortized,net 2013 one year Governmental Activities: Bonds and Loans Payable $ 395,839 $ 73,805 $ (94,786) $ - $ 374,858 $ 18,128 Premium/Discount,net 25,852 2,082 (1,804) (2,019) 24,111 - Deferred Charge (10,888) (2,910) - 787 (13,011) - Capital Lease Obligations 412 - (89) - 323 93 Self-Insurance Claims 7,401 48,233 (47,505) - 8,129 6,598 NetOPEBObligation 1,698 1,868 (1,387) - 2,179 - Compensated Absences 23,103 8,057 (8,052) - 23,108 8,522 Total $443,4177 $131,135 $(153,623) $ (1,232) $ 419,697 $ 33,341 Business-type Activities: Bonds and Loans Payable $231,194 $ 43,509 $ (53,344) $ - $ 221,359 $ 14,908 Premium 3,860 - (2,335) (237) 1,288 - Deferred Charge (3,703) (1,092) - 429 (4,366) - Notes Payable 69 - - - 69 69 Capital Lease Obligations 175 - (135) - 40 40 Landfill Closure Liability 1,795 145 - - 1,940 - Compensated Absences 2,574 2,571 (2,427) - 2,718 2,174 Total $235,964 $ 45,133 $ (58,241) $ 192 $ 223,048 $ 17,191 55 COLLIER COUNTY, FLORIDA NOTES TO THE FINANCIAL STATEMENTS SEPTEMBER 30, 2013 NOTE 6-LONG-TERM DEBT-CONTINUED DESCRIPTIONS OF BONDS, LOANS AND NOTES PAYABLE Bonds, loans and notes payable at September 30,2013 were composed of the following: GOVERNMENTAL ACTIVITIES Governmental Activities Limited General Obligation Bonds $6,215,000 2007 Limited General Obligation Bonds, Forest Lakes Roadway and Drainage Municipal Service Taxing Unit, due in installments of$300,000 to$540,000 through January 1, 2022; interest at 3.75%to 4.25% and collateralized by a limited ad valorem pledge of up to4mils. $ 4,155,000 Total Governmental Activities Limited General Obligation Bonds $ 4,155,000 Governmental Activities Revenue Bonds $96,255,000 2005 Gas Tax Revenue Bonds, due in annual installments of $445,000 to $13,985,000 through June 1, 2025; interest at 3.00%to 5.00%and collateralized by a pledge on the combined gas tax proceeds. $ 88,990,000 $38,680,000 2012 Gas Tax Revenue Bonds, due in annual installments of $2,700,000 to $6,605,000 through June 1, 2023; interest at 3.00% to 5.00% and collateralized by a pledge on the combined gas tax proceeds. 38,680,000 $59,895,000 2010 Special Obligation Revenue Bonds, due in annual installments of $1,545,000 to $3,860,000 through July 1, 2034; interest at 3.00%to 4.50% and collateralized by pledge on legally available non-ad valorem revenues, including but not limited to the proceeds of the local government half cent sales tax, state revenue sharing, communications services tax and charges and services generated by governmental activities. 54,915,000 $24,620,000 2010B Special Obligation Revenue Bonds, due in annual installments of $1,830,000 to $2,630,000 through October 1, 2021; interest at 3.00% to 5.00% and collateralized by pledge on legally available non-ad valorem revenues, including but not limited to the proceeds of the local government half cent sales tax,state revenue sharing, communications services tax and charges and services generated by governmental activities. 20,215,000 $92,295,000 2011 Special Obligation Revenue Bonds, due in annual installments of $1,605,000 to $8,270,000 through October 1, 2029; interest at 2.50% to 5.00% and collateralized by pledge on legally available non-ad valorem revenues, including but not limited to the proceeds of the local government half cent sales tax,state revenue sharing, communications services tax and charges and services generated by governmental activities. 86,175,000 $73,805,000 2013 Special Obligation Revenue Bonds, due in annual installments of $4,860,000 to $8,525,000 through October 1, 2035; interest at 3.50% to 4.00% and collateralized by pledge on legally available non-ad valorem revenues, including but not limited to the proceeds of the local government half cent sales tax,state revenue sharing, communications services tax and charges and services generated by governmental activities. 73,805,000 Total Governmental Activities Revenue Bonds $362,780,000 56 COLLIER COUNTY, FLORIDA NOTES TO THE FINANCIAL STATEMENTS SEPTEMBER 30, 2013 NOTE 6-LONG-TERM DEBT-CONTINUED DESCRIPTIONS OF BONDS, LOANS AND NOTES PAYABLE—CONTINUED Governmental Activities Notes Payable $7,557,900 Bayshore Gateway Community Redevelopment Agency Taxable Note, due June 1, 2018; monthly variable interest rate of 30-Day LIBOR plus 3.75% and collateralized by a pledge on all legally available non-ad valorem revenues of the Bayshore Gateway Community Redevelopment Agency. $ 7,431,936 $550,000 2012 Limited General Obligation Note, Radio Road East Municipal Service Taxing Unit, due in installments of $3,847 to $5,408 through June 1, 2022; interest at 3.44% and collateralized by a limited ad valorem pledge of up to.5 mils. 491,128 Total Governmental Activities Notes Payable $ 7,923,064 Total Governmental Activities Obligations $374,858,064 Unamortized Bond Premium $ 24,110,757 Deferred Charge on Bond Refunding $(13,010,523) Governmental Activities Obligations, Net $385,958,298 Less Current Portion of Governmental Activities Obligations $(18,127,807) Long-Term Portion of Governmental Activities Obligations,Net $367,830,491 BUSINESS-TYPE ACTIVITIES Business-type Activities Revenue Bonds $110,165,000 2006 Collier County Water and Sewer Revenue Bonds due in annual installments of $2,310,000 to $8,695,000, commencing July 1, 2017 through July 1, 2036; interest at 4.00%to 5.00% and collateralized by a lien on and a pledge of net revenues of the Collier County Water and Sewer District. $ 86,575,000 $11,727,489 2009 Collier County Water and Sewer Revenue Bonds due in annual installments of $1,569,324 to $1,817,005, commencing July 1, 2010 through July 1, 2016; interest at 2.97%and collateralized by a lien on and a pledge of net revenues of the Collier County Water and Sewer District. 5,298,028 $17,769,080 2013 Collier County Water and Sewer Refunding Revenue Bonds due in annual installments of $1,369,430 to $4,312,275, commencing July 1, 2014 through July 1, 2021; interest at 1.47%and collateralized by a lien on and a pledge of net revenues of the Collier County Water and Sewer District. 17,769,080 Total Business-type Activities Revenue Bonds $109,642,108 Business-type Activities Loans and Notes Payable $166,580 County Water and Sewer District agreement with private developer payable through use of sewer system development fee credits. Non-interest bearing agreement. $ 69,190 $13,292,898 County Water and Sewer District State Revolving Fund Loan,interest payable at 2.65% payable in 40 semiannual payments commencing January 15, 1999 and collateralized by a subordinated pledge on the net revenues of the Collier County Water and Sewer District. 4,119,954 57 COLLIER COUNTY, FLORIDA NOTES TO THE FINANCIAL STATEMENTS SEPTEMBER 30, 2013 NOTE 6-LONG-TERM DEBT-CONTINUED DESCRIPTIONS OF BONDS, LOANS AND NOTES PAYABLE—CONTINUED $22,238,677 County Water and Sewer District State Revolving Fund Loan,interest payable at 3.05% payable in 40 semiannual payments commencing November 15, 2001 and collateralized by a subordinated pledge on the net revenues of the Collier County Water and Sewer District. 10,312,550 $5,160,675 County Water and Sewer District State Revolving Fund Loan,interest payable at 3.05%payable in 40 semiannual payments commencing October 15,2004 and collateralized by a subordinated pledge on the net revenues of the Collier County Water and Sewer District. 3,218,241 $6,560,956 County Water and Sewer District State Revolving Fund Loan,interest payable at 3.05%payable in 40 semiannual payments commencingJanuary 15,2005 and collateralized by a subordinated pledge on the net revenues of the Collier County Water and Sewer District. 4,088,709 $29,224,004 County Water and Sewer District State Revolving Fund Loan,interest payable at 2.95%payable in 40 semiannual payments commencing June 15, 2006 and collateralized by a subordinated pledge on the net revenues of the Collier County Water and Sewer District. 20,204,907 $10,525,509 County Water and Sewer District State Revolving Fund Loan, interest payable at 2.90% payable in 40 semiannual payments commencing September 15, 2006 and collateralized by a subordinated pledge on the net revenues of the Collier County Water and Sewer District. 6,964,734 $5,445,223 County Water and Sewer District State Revolving Fund Loan,interest payable at 2.92% payable in 40 semiannual payments commencing December 15, 2005 and collateralized by a subordinated pledge on the net revenues of the Collier County Water and Sewer District. 3,653,412 $5,188,500 County Water and Sewer District State Revolving Fund Loan, interest payable at 2.74% payable in 40 semiannual payments commencing November 15, 2007 and collateralized by a subordinated pledge on the net revenues of the Collier County Water and Sewer District. 3,081,404 $7,123,496 County Water and Sewer District State Revolving Fund Loan,interest payable at 2.75% and 2.64% payable in 40 semiannual payments commencing April 15, 2008 and collateralized by a subordinated pledge on the net revenues of the Collier County Water and Sewer District. 4,252,347 $21,549,605 County Water and Sewer District State Revolving Fund Loan,interest payable at 2.25%,2.64%,2.71%and 2.79% payable in 40 semiannual payments commencing August 15, 2008 and collateralized by a subordinated pledge on the net revenues of the Collier County Water and Sewer District. 17,777,007 $33,235,651 County Water and Sewer District State Revolving Fund Loan,interest payable at 2.25%, 2.64% and 2.79% payable in 40 semiannual payments commencing October 15, 2009 and collateralized by a subordinated pledge on the net revenues of the Collier County Water and Sewer District. 31,636,129 58 COLLIER COUNTY, FLORIDA NOTES TO THE FINANCIAL STATEMENTS SEPTEMBER 30, 2013 NOTE 6-LONG-TERM DEBT-CONTINUED DESCRIPTIONS OF BONDS, LOANS AND NOTES PAYABLE—CONTINUED $3,294,890 County Water and Sewer District State Revolving Fund Loan, interest payable at 2.79% payable in 40 semiannual payments commencing December 15, 2009 and collateralized by a subordinated pledge on the net revenues of the Collier County Water and Sewer District. 2,407,923 Total Business-type Activities Loans and Notes Payable $111,786,507 Total Business-type Activities Obligations $221,428,615 Unamortized Bond Premium $ 1,288,024 Deferred Charge on Bond Refunding (4,365,620) Business-type Activities Obligations, Net $218,351,019 Less Current Portion of Business-type Activities Obligations Payable from Unrestricted $(12,013,942) Less Current Portion of Business-type Activities Obligations Payable from Restricted Assets (2,893,679) Long-Term Portion of Business-type Activities Obligations, Net $203,443,398 SUMMARY OF DEBT SERVICE REQUIREMENTS TO MATURITY The total annual debt service requirements to maturity of long-term debt, excluding compensated absences,capitalized leases,premiums,discounts and arbitrage rebate liability,are as follows: Governmental Activities Fiscal Limited General Year Obligation Bonds Revenue Bonds Notes Payable Totals Principal Interest Principal Interest Principal Interest 2014 $ 390,000 $ 163,475 $ 17,185,000 $ 15,777,633 $ 552,807 $ 822,976 $ 34,891,891 2015 410,000 147,475 17,260,000 15,190,831 554,518 800,065 34,362,889 2016 425,000 130,775 18,080,000 14,366,131 556,289 777,093 34,335,288 2017 440,000 113,475 18,940,000 13,497,043 558,121 754,061 34,302,700 2018 460,000 95,475 19,840,000 12,585,758 5,472,674 552,440 39,006,347 2019-23 2,030,000 177,225 111,490,000 47,787,431 228,655 15,392 161,728,703 2024-28 - - 79,585,000 23,461,815 - - 103,046,815 2029-33 - - 54,845,000 11,486,738 - - 66,331,738 2034-38 - - 25,555,000 1,422,300 - - 26,977,300 Totals $4,155,000 $ 827,900 $362,780,000 $155,575,680 $ 7,923,064 $3,722,027 $534,983,671 59 COLLIER COUNTY, FLORIDA NOTES TO THE FINANCIAL STATEMENTS SEPTEMBER 30, 2013 NOTE 6-LONG-TERM DEBT-CONTINUED SUMMARY OF DEBT SERVICE REQUIREMENTS TO MATURITY-CONTINUED Business-type Activities Fiscal Loans and Year Revenue Bonds Notes Payable Totals Principal Interest Principal Interest 2014 $ 5,967,085 $ 4,216,012 $ 8,940,536 $ 2,806,208 $ 21,929,841 2015 6,073,205 4,099,592 8,938,876 2,738,678 21,850,351 2016 3,986,420 3,983,902 9,184,348 2,493,204 19,647,874 2017 3,679,430 3,898,046 9,436,663 2,240,890 19,255,029 2018 3,799,061 3,779,741 9,696,010 1,981,543 19,256,355 2019-23 21,591,907 16,945,640 44,924,031 6,104,718 89,566,296 2024-28 4,385,000 13,329,450 20,482,290 1,050,105 39,246,845 2029-33 35,170,000 10,245,062 183,753 3,854 45,602,669 2034-38 24,990,000 2,256,373 - - 27,246,373 Totals $109,642,108 $62,753,818 $111,786,507 $19,419,200 $303,601,633 CURRENT YEAR DEBT REFUNDINGS On April 16, 2013 Collier County issued the Series 2013 Special Obligation Refunding Revenue Bonds in the par amount of $73,805,000. These bonds were issued for the purpose of advance refunding the County's outstanding Capital Improvement and Refunding Revenue Bonds, Series 2003 and 2005. The final maturity of the bonds is October 1, 2035, with interest rates of 3.50% to 4.00%. The refunding achieved a net present value savings of 2.96% on the refunded bonds. The refinancing of the Series 2003 and 2005 Bonds, and their attendant restrictive covenants, eliminated the required cash reserve surety replacement relating to the Series 2003 and 2005 bonds. The advance refunding achieved an aggregate debt service savings of$1,979,454 and an economic gain of$2,062,440. The Series 2003 and 2005 bonds have redemption dates of October 1,2013 and October 1, 2014,respectively. On June 27, 2013 the Collier County Water and Sewer District issued the Series 2013 Water and Sewer Refunding Revenue Bonds in the par amount of$17,769,080. These bonds were issued for the purpose of financing a current refunding of the County Water and Sewer District's outstanding Series 2003B Bonds. The final maturity of the bonds is July 1, 2021, with an interest rate of 1.47%. The current refunding achieved a net present value savings of 9.99% on the refunded bonds. The refunding also achieved an aggregate debt service savings of $2,618,908 and an economic gain of $2,455,512. The Series 2003B bonds had a redemption date of July 29,2013. In August of 2013,the Collier County Water and Sewer District borrowed $25,000,000 from the State of Florida Department of Environmental Protection's State Revolving Fund Loan Program for purposes of advance refunding a portion of the Water and Sewer District's Series 2006 Revenue Bonds. On September 19, 2013 the State Revolving Fund proceeds, together with other available monies, were placed in escrow. The final maturity of the loans is April 15, 2029, with an interest rate of 2.25%. The refunding achieved a net present value savings of 17.23% on the refunded bonds. The refunding also achieved an aggregate debt service savings of $9,775,853 and an economic gain of $5,576,336. The Series 2006 bonds have a redemption date of July 1, 2016. 60 COLLIER COUNTY, FLORIDA NOTES TO THE FINANCIAL STATEMENTS SEPTEMBER 30, 2013 NOTE 6-LONG-TERM DEBT—CONTINUED RESTRICTIVE COVENANTS According to County resolutions authorizing the issuance of the Series 2010, 2010B, 2011 and 2013 Special Obligation Refunding Revenue Bonds, the County has covenanted, subject to certain restrictions and limitations, to appropriate in its annual budget, by amendment if necessary, from non-ad valorem revenues amounts sufficient to pay principal and interest on the combined Special Obligation Bonds. According to County resolutions authorizing the issuance of the Series 2005 and 2012 Gas Tax Revenue Bonds,the issues are payable from and secured by liens on gas tax revenues. Bayshore Gateway Community Redevelopment Agency(Agency)tax increment revenues are pledged for the repayment of the Agency's Series 2013 taxable note. The Agency has additionally covenanted to budget and appropriate from all legally available non-ad valorem revenues of the Agency to pay the Series 2013 note to the extent the tax increment revenues are insufficient. The Series 2013 note does not constitute an indebtedness of the County and is payable solely from the security provided by the Agency. The Agency is required to have a debt service reserve balance of $400,000 as of the end of fiscal year 2013. The Agency was in compliance with these covenants for the year ended September 30, 2013. The County Water and Sewer District (District) has pledged future water and sewer customer revenues, net of certain operating expenses,to repay$109,642,108 in Series 2006, 2009 and 2013 revenue bonds. Proceeds from the bonds were used for rehabilitation or expansion of the District's water and sewer systems. Principal and interest are payable through July 1, 2036, solely from the net revenues and certain other fees and charges derived from operation of the County's Water and Sewer District (District). The pledge of net revenues by the District from the operation of the system does not constitute a lien upon the system or any other property of the County. The resolutions authorizing the revenue bonds include an obligation for the District to fix, establish and maintain such rates and collect such fees so as to provide in each year net revenues, as defined in the bond resolutions, which together with system development fees (impact fees) and special assessment proceeds received shall be at least 125% of the annual debt service requirements for the bonds; provided, however, that net revenues in each fiscal year shall be adequate to pay at least 100% of the annual debt service on the bonds. Fiscal year 2013 pledged revenues, net of operating expenses, were $36,765,472 and $50,293,611 when system development fees and special assessments were included. Principal and interest paid during fiscal year 2013 totaled $11,689,791, providing coverage of 315% and 430%, respectively. In addition, bond covenants require a renewal and replacement amount equal to$300,000 in the District funds. The District was in compliance with these covenants for the year ended September 30, 2013. The District has several State Revolving Fund loans outstanding with the Florida Department of Environmental Protection. These loans are collateralized by a lien on pledged revenues consisting of net revenues from the operations of the County Water and Sewer System and system development fees. The lien is subordinate in all respects to the liens placed upon pledged revenues established by bonded indebtedness. The District must maintain rates and charges for services which together with system development fees are sufficient to pay 115%to 125%, depending upon the individual loan agreement,of the annual debt service requirements on the loans, as well as satisfy the coverage requirements of all senior debt obligations. The District's State Revolving Fund loans were in compliance with these covenants for the year ended September 30, 2013. 61 COLLIER COUNTY, FLORIDA NOTES TO THE FINANCIAL STATEMENTS SEPTEMBER 30, 2013 NOTE 6-LONG-TERM DEBT—CONTINUED LEGAL DEBT MARGIN The Constitution of the State of Florida and the Florida Statutes set no legal debt limit. INTEREST CAPITALIZED Interest costs on the long-term debt of business-type activities, including capitalized leases, incurred and capitalized during the year ended September 30, 2013 were as follows: Total Interest Interest Cost Net Interest Cost Incurred Capitalized Expense Business-type Activities $ 8,969,906 $ 3,526,606 $ 5,443,300 Interest expense is shown as a direct expense of the Business-type Activities. LEASE OBLIGATIONS Capitalized leases payable at September 30, 2013 amounted to $362,510. These obligations, which are collateralized by equipment and vehicles, have total annual installments ranging from $29,702 to $149,198 including interest ranging from 4.45% to 4.85% and mature through 2022. As of year-end, equipment currently leased under capital leases in the governmental activities had a historical cost of $1,114,847 and accumulated depreciation of$906,097. Equipment currently leased under capital leases in the business-type activities had a historical cost of $182,751 and accumulated depreciation of $59,394. Future minimum capital lease obligations as of September 30, 2013 were as follows: Governmental Business-type Activities Activities Total 2014 $ 107,622 $ 41,576 $ 149,198 2015 64,933 - 64,933 2016 29,702 - 29,702 2017 29,702 - 29,702 2018 29,702 - 29,702 2019-23 118,810 - 118,810 Total minimum lease payments 380,471 41,576 422,047 Less amount representing interest (57,612) (1,925) (59,537) Present value of minimum lease payments $ 322,859 $ 39,651 $ 362,510 The County also leases office space, office equipment and storage space under operating leases. These leases expire or are cancellable within the next fiscal year. In the normal course of operations these leases will be renewed or replaced by other leases. Total rental expenditures for all operating leases within the governmental activities for the year ended September 30, 2013 were $836,643. Total rental expenditures for all operating leases within business-type activities governmental activities for the year ended September 30, 2013 were$185,382. 62 COLLIER COUNTY, FLORIDA NOTES TO THE FINANCIAL STATEMENTS SEPTEMBER 30, 2013 NOTE 7-CONDUIT DEBT OBLIGATIONS COMPONENT UNIT CONDUIT DEBT The Industrial Development Authority, Housing Finance Authority, Health Facilities Authority and Educational Facilities Authority, all component units of Collier County, issue debt instruments for the purpose of providing capital financing to independent third parties. Industrial development revenue bonds have been issued to provide financial assistance to public entities for the acquisition and construction of industrial and commercial facilities. Housing revenue bonds have been issued for the purpose of financing the development of multi-family residential rental communities. The health facility revenue bonds were issued to provide financing for the construction of health park facilities. The educational facility revenue bonds were used to provide financing for the construction of educational facilities. These bonds were secured by the financed property, a letter of credit or a corporate guarantee. The primary revenues pledged to pay the debt are those revenues derived from the project or facilities constructed. Neither the issuer, nor the County, is obligated in any manner for repayment of the bonds and as such they are not reported as liabilities in the accompanying financial statements. As of September 30, 2013 the outstanding principal amount payable on all component unit conduit debt was$230,271,446 and is made up of the following: Industrial development revenue bonds $ 17,396,446 Housing finance revenue bonds 22,570,000 Health facilities revenue bonds 113,945,000 Educational facilities revenue bonds 76,360,000 Total $230,271,446 NOTE 8-DEFEASED DEBT The County has defeased certain outstanding bonds by placing the proceeds of new bonds in irrevocable trusts to provide for all future debt service payments on the defeased debt. Accordingly, the trust accounts and the defeased bonds are not included in the County's financial statements. At September 30, 2013 the following issues were considered defeased: Original Debt Defeased Bonds Governmental Activities Defeased Outstanding 1986 Capital Improvement Program Revenue Bonds, $ 12,245,000 $ 2,045,000 Sub-Series 5 Mode A 2003 Capital Improvement and Refunding Revenue Bonds 38,415,000 36,300,000 2005 Capital Improvement and Refunding Revenue Bonds 131,710,000 125,290,000 Total Governmental Activities Defeased Debt $182,370,000 $ 163,635,000 Original Debt Defeased Bonds Business-type Activities Defeased Outstanding 2006 County Water and Sewer Revenue Bonds $ 23,590,000 $ 23,590,000 Total Business-type Activities Defeased Debt $ 23,590,000 $ 23,590,000 63 COLLIER COUNTY, FLORIDA NOTES TO THE FINANCIAL STATEMENTS SEPTEMBER 30, 2013 NOTE 9—PENSION PLAN OBLIGATIONS RETIREMENT PLAN Substantially all full time and part time employees of the County are eligible to participate in the State of Florida Retirement System (the System), a cost sharing, multiple employer program administered by the State of Florida, Division of Retirement. The System provides two retirement plans from which eligible employees can choose: the Pension Plan (defined benefit)and the Investment Plan(defined contribution). The County follows the provisions of GASB 27,Accounting for Pensions by State and Local Governmental Employers,as described in the following disclosure. PLAN DESCRIPTION Employees hired prior to July 1, 2011 participating in the Pension Plan who retire at or after age 62 with 6 years of credited service for regular risk or with 30 years of service regardless of age, are entitled to a retirement benefit, payable monthly for life, equal to 1.6% for regular employees, 2.0% for senior management, and 3.0%for county elected officials of their final average compensation for each year of credited service; and for special risk, after age 55 with 6 years or with 25 years of service regardless of age, are entitled to a retirement benefit payable monthly for life, up to 3.0%for each year of credited service times their final average compensation. Final average compensation is the employee's average of the five highest years of salary earned during credited service. Vested employees may retire before age 62 for regular risk and 55 for special risk and receive retirement benefits that are reduced 5.0%for each year prior to normal retirement age. Employees hired on July 1, 2011 or later participating in the Pension Plan who retire at or after age 65 with 8 years of credited service for regular risk or with 33 years of service regardless of age, are entitled to a retirement benefit, payable monthly for life, equal to 1.6% for regular employees, 2.0% for senior management, and 3.0%for county elected officials of their final average compensation for each year of credited service; and for special risk, after age 60 with 8 years or with 30 years of service and age 57 or after 30 years of special risk service regardless of age, or after 33 years of any creditable service are entitled to a retirement benefit payable monthly for life.Vested employees may retire before age 65 for regular risk and 60 for special risk and receive retirement benefits that are reduced 5.0%for each year prior to normal retirement age. Employees participating in the investment plan are vested after one year of service with no age requirement. The System also provides death and disability benefits. Benefits are established by Chapter 121, Florida Statutes and Chapter 228, Florida Administrative Code. The Florida Legislature has sole authority to amend benefit provisions. The Deferred Retirement Option Program (DROP) is a program that provides an alternative method for payment of retirement benefits for a specified and limited period for members of the System, effective July 1, 1998. Under this program, employees may retire and have their benefits accumulate in the Florida Retirement System Trust Fund, earning interest,while continuing to work for a System employer. Employees enrolled in DROP prior to July 1, 2011 earn interest on accumulated benefits in the Trust Fund at 6.5%; those enrolling on or after July 1, 2011 earn interest at 1.30%. The act of participating in the program does not change the individual employee's employment conditions. 64 COLLIER COUNTY, FLORIDA NOTES TO THE FINANCIAL STATEMENTS SEPTEMBER 30, 2013 NOTE 9—PENSION PLAN OBLIGATIONS-CONTINUED When the DROP period ends, maximum of 60 months, employees must terminate employment. Elected Officials participating in DROP may continue to serve in office without voiding DROP or retirement benefits as long as the Elected Official continues in that term of office or successive terms of office. At the time of termination of employment, the employee or Elected Official will receive payment of the accumulated DROP benefits, and begin receiving their monthly retirement benefit (in the same amount determined at retirement, plus annual cost-of-living increases). Investment Plan members are not eligible to participate in the DROP program, but Pension Plan members are eligible to roll their DROP lump sum into the Investment Plan as one of the distribution methods under the Pension Plan. The System publishes an annual report that provides ten-year historical trend information regarding progress made in accumulating sufficient assets to pay benefits when due. The report may be obtained by writing the Division of Retirement, Research, Education and Policy Section, 1317 Winewood Boulevard, Tallahassee, Florida 32315-9000, or by calling (866) 738-2366, or accessing their internet site at www.dms.mvflorida.com. FUNDING POLICY The County is required to contribute at an actuarially determined rate. Rates from October 1, 2012 through June 30, 2013 were 14.90%for special risk, 10.23%for county elected officials, 6.30% for senior management, 5.18%for regular employees and 5.44%for DROP employees based on covered payroll. The current rates, effective July 1, 2013,are 19.06%for special risk, 33.03%for county elected officials, 18.31% for senior management, 6.95%for regular employees and 12.84%for DROP employees based on covered payroll. In addition, as of July 1, 2011, employee contributions of 3.00% are required of all Pension Plan and Investment Plan members,except for those in DROP. The contributions of the County are established by the State Legislature and therefore subject to amendment. The County's contributions to the System for the years ending September 30, 2013, 2012 and 2011 are represented in the table below. The County's contributions were equal to the required contributions for each year. 2013 2012 2011 General Fund $ 1,167,594 $10,489,397 $16,291,406 Community Redevelopment 21,793 35,061 51,214 Nonmajor Governmental Funds 2,057,847 2,057,704 3,712,740 County Water and Sewer 989,447 832,576 1,502,003 Solid Waste 88,016 61,084 110,698 Nonmajor Enterprise Funds 1,778,873 1,547,097 2,405,063 Internal Service Funds 274,690 230,115 431,678 Totals $ 6,378,260 $15,253,034 $24,504,802 65 COLLIER COUNTY, FLORIDA NOTES TO THE FINANCIAL STATEMENTS SEPTEMBER 30, 2013 NOTE 10—TRANSFERS Transfers between funds were used to (1) move revenues from the fund that statute or budget requires they be collected in to the fund that statute or budget requires they be expended from (2) move receipts restricted to debt service to the debt service fund as payments become due, or (3) use unrestricted revenues collected in the General Fund to finance operating and capital programs accounted for in other funds in accordance with budgetary authorizations. Transfers for the year ended September 30, 2013 were as follows: Transfers from Fund Transfers to Fund Amount Governmental Activities: General Fund Nonmajor Governmental Funds $ 41,468,460 County Water and Sewer 139 Solid Waste Disposal 39,775 Nonmajor Business-type 15,016,534 Bayshore Gateway Redevelopment Agency Nonmajor Governmental Funds 1,494,900 Government Facilities Impact Fee Nonmajor Governmental Funds 4,379,877 Nonmajor Governmental Funds General Fund 5,079,223 Bayshore Gateway Redevelopment Agency 136,800 Immokalee Redevelopment Agency 76,000 Nonmajor Governmental Funds 31,243,440 County Water and Sewer 23,095 Nonmajor Business-type 3,103,207 Business-type Activities: County Water and Sewer General Fund 5,250,731 Solid Waste Disposal General Fund 576,860 Nonmajor Business-type General Fund 1,200 Nonmajor Governmental Funds 3,000 County Water and Sewer 220,265 Internal Service Funds General Fund 926,600 Total Operating Transfers $ 109,040,106 NOTE 11—NET POSITION/FUND BALANCE CLASSIFICATION Net position represents the difference between total assets and liabilities and are categorized as follows: Net investment in capital assets: Total capital assets, net of debt issued in the acquisition of these assets and net of depreciation is reported separately in the net position section. Restricted for growth related capital expansion: Impact fee and system development charges restricted for growth related capital expansion. Restricted for transportation capital projects: Gas taxes and other revenues restricted for transportation capital improvements. Restricted for tourist development: Tourist development tax proceeds are restricted for tourist related activities. 66 COLLIER COUNTY, FLORIDA NOTES TO THE FINANCIAL STATEMENTS SEPTEMBER 30, 2013 NOTE 11—NET POSITION/FUND BALANCE CLASSIFICATION-CONTINUED Restricted for Conservation Collier: One quarter mill of ad valorem revenues restricted for the purchase of environmentally sensitive land. Restricted for Grants: State and federal government grant monies restricted for grant related purposes. Restricted for debt service: Balances are restricted in conjunction with the issuance of bonds and have been funded by operating transfers from the appropriate funds. The use of monies in the sinking fund is restricted to the payment of principal and interest on long-term debt. Restricted for renewal and replacement: Balance is restricted in conjunction with the issuance of County Water and Sewer District Bonds. The use of monies in the renewal and replacement fund is restricted to funding the cost of additions, replacement or major repair of water and wastewater capital assets. Unrestricted: Balances are not restricted for specific purposes. Governmental funds report fund balances as either spendable or non-spendable. Spendable fund balances are further classified as restricted, committed, assigned or unassigned depending upon the extent to which there are external or internal constraints on the spending of these fund balances. Non-spendable fund balance: Amounts that are not in spendable form or that are legally or contractually required to be maintained intact. Items that are not spendable also include inventories, prepaid amounts and long term portions of advances, loans and notes receivable. Spendable fund balance: Restricted fund balance — Amounts that can be spent only for specific purposes through restrictions placed upon them by external resource providers such as creditors, grantors or contributors;or imposed by law through constitutional provisions or enabling legislation. Committed fund balance—Amounts that can be spent only for specific purposes determined by the County's highest decision making authority, the Board of County Commissioners, via ordinance. Commitments may be modified or removed by the Board of County Commissioners only by amending the ordinance that created the original commitment. Assigned fund balance — Amounts that are intended to be spent for specific purposes as determined by the Board of County Commissioners, but that are neither restricted nor committed to the specific purpose. Unassigned fund balance—Unassigned fund balance is the residual classification for the County's general fund. Amounts in this classification are spendable but have not been deemed restricted, committed or assigned. Unassigned fund balance may also include negative balances for any governmental fund whose expenditures have exceeded the amounts restricted, committed or assigned for those specific purposes. When both restricted and unrestricted amount are available the County spends the restricted amounts first, unless prohibited by law, grant agreements or other contractural arrangement. Further, when committed fund balance is available the County will use it first, followed by assigned fund balance and then unassigned fund balance for purposes in which any of the unrestricted fund balance classifications could be used. 67 COLLIER COUNTY, FLORIDA NOTES TO THE FINANCIAL STATEMENTS SEPTEMBER 30, 2013 NOTE 11—NET POSITION/FUND BALANCE CLASSIFICATION-CONTINUED A detailed schedule of fund balances at September 30, 2013 is as follows: Bayshore Gateway Immokalee Community Community General Redevelopment Redevelopment Fund Agency Agency Nonspendable: Advances $ 15,656,925 $ - $ - Inventory 64,298 - - Prepaids/deposits 22,351 - - Total nonspendable fund balance 15,743,574 - - Restricted for: Community redevelopment - 13,359,441 210,271 Federal and state grants 95,786 - - Bond covenants or debt service - - - Growth related capital expansion - - - Transportation capital projects - - - Community development - - - Transportation operations - - - Tourist development - - - Conservation Collier - - - Emergency 911 - - - Public safety - - - Court functions - - - Public Records Modernization - - - Other purposes - - - Total restricted fund balance 95,786 13,359,441 210,271 Committed for: Special districts - - - Natural resource management - - - Utility regulation - - - Other purposes - - - Total committed fund balance - - - Assigned for: Parks and recreation - - - General buildings and improvements - - - Water management - - - Libraries - - - Other purposes 813,412 - - Total assigned fund balance 813,412 - - Unassigned: 56,496,736 - - Total Fund Balances $ 73,149,508 $ 13,359,441 $ 210,271 68 COLLIER COUNTY, FLORIDA NOTES TO THE FINANCIAL STATEMENTS SEPTEMBER 30, 2013 NOTE 11—NET POSITION/FUND BALANCE CLASSIFICATION-CONTINUED Government Other Total Facilities Governmental Governmental Impact Fee Funds Funds $ - $ 45,849,400 $ 61,506,325 - 199,552 263,850 - - 22,351 - 46,048,952 61,792,526 - - 13,569,712 - 9,092,780 9,188,566 - 1,014,594 1,014,594 - 55,186,989 55,186,989 - 34,303,917 34,303,917 - 15,311,996 15,311,996 - 1,965,363 1,965,363 - 35,926,052 35,926,052 - 36,833,590 36,833,590 - 4,056,549 4,056,549 - 4,206,535 4,206,535 - 6,082,197 6,082,197 - 4,549,262 4,549,262 - 1,600,143 1,600,143 - 210,129,967 223,795,465 - 25,882,954 25,882,954 - 2,432,581 2,432,581 - 1,052,433 1,052,433 - 442,383 442,383 - 29,810,351 29,810,351 - 8,311,046 8,311,046 - 8,213,964 8,213,964 - 13,752,220 13,752,220 - 704,383 704,383 - 5,382,787 6,196,199 - 36,364,400 37,177,812 (22,465,981) (32,746,135) 1,284,620 $ (22,465,981) $ 289,607,535 $ 353,860,774 69 COLLIER COUNTY, FLORIDA NOTES TO THE FINANCIAL STATEMENTS SEPTEMBER 30, 2013 NOTE 12-RISK MANAGEMENT The County is exposed to various risks of loss related to tort;theft of,damage to and destruction of assets; errors and omissions; injuries to employees and natural disasters. A self-insurance internal service fund is maintained by the County to administer insurance activities relating to workers'compensation, health and property and casualty, which covers general, property, auto, public official and crime liabilities. The County self-insurance program covers operations of the Board and the constitutional officers, except for the Sheriff. Under these programs, the self-insurance fund provides coverage up to a maximum amount for each claim. The County purchases commercial insurance for claims in excess of coverage provided by the self-insurance fund and for all other covered risks of loss. Claim Type County's Coverage Excess Carrier's Coverage Property and casualty claims $50,000-$500,000 $50,000-$125,000,000 (5%Named Storm) Auto liability claims $200,000 $200,000-$1,000,000 Employee health claims $325,000 $325,000-Unlimited Workers'compensation claims $500,000 $500,000-Statutory Settled claims have not exceeded the insurance provided by third party carriers in any of the past three years. All divisions of the County, excluding the Sheriff, participate in this program. Charges to operating departments are based upon amounts believed by management to meet the required annual payouts during the fiscal year and to pay for the estimated operating costs of the programs. For the fiscal year ended September 30, 2013 the operating departments were charged $35,146,638 for workers'compensation, health and property and casualty self-insurance programs. The claims loss reserve for workers' compensation, health and property and casualty of $4,528,878 reported at September 30, 2013 was calculated by third party actuaries based upon GASB Statement 30, Risk Financing Omnibus, which requires that a liability for claims be reported when it is probable that a loss has been incurred and the amount of that loss can be reasonably estimated. The estimated liabilities for unpaid losses related to workers' compensation and property and casualty were discounted at 3.5%. It should be noted that the discount rate is an estimate based on the expected rate of return over extended periods. The estimated liabilities for unpaid losses related to health were not discounted as their turnover period is much shorter. Claims loss reserves of $2,997,641 are recorded as current liabilities. The Sheriff participates in the Statewide Florida Sheriff's Self-Insurance Fund for its professional liability insurance. The fund is managed by representatives of the participating Sheriff offices and provides professional liability insurance to participating Sheriff agencies. The Florida Sheriff's Self-Insurance Fund provides liability insurance coverage subject to the following limitations: $3,200,000 for any claim involving a single individual, $3,300,000 for any one incident or occurrence and $10,000,000 for an annual aggregate per member. The Sheriff also participates in the Statewide Florida Sheriff's Self-Insurance Fund program for workers' compensation coverage. The Florida Sheriff's Association Workers' Compensation Insurance Trust (FSAWIT) is a limited self-insurance fund providing coverage for the first $350,000 of every claim. Re- insurance is provided through a third party insurer for all claims exceeding$350,000 up to$10,000,000. 70 COLLIER COUNTY, FLORIDA NOTES TO THE FINANCIAL STATEMENTS SEPTEMBER 30, 2013 NOTE 12-RISK MANAGEMENT-CONTINUED Settled claims have not exceeded the insurance provided by third party carriers in any of the past three years. Premiums charged to participating Sheriffs are based upon amounts believed by Fund management to meet the estimated annual payouts during the fiscal year and to pay for the estimated operating costs of the program. All liabilities associated with these self-insured risks are reported in the basic financial statements of the Statewide Florida Sheriff's Self-Insurance Fund. The Sheriff cannot be additionally assessed for claims paid by the program. The Sheriff has also established a self-funded employee health plan. An internal service fund is used to account for the activities of the plan. Excess coverage has been purchased which provides specific claim excess coverage for any one incident exceeding $200,000 up to $1,000,000. Payments to the internal service fund are based on actuarial estimates of amounts needed to pay prior year and current year claims including claims incurred but not yet reported. The claims loss reserve for health of$3,600,000 reported at September 30, 2013 was calculated by third party actuaries based upon GASB Statement 30, Risk Financing Omnibus, which requires that a liability for claims be reported when it is probable that a loss has been incurred and the amount of that loss can be reasonably estimated. The entire Sheriff's health claim loss reserve is recorded as a current liability. CHANGES IN SELF-INSURANCE CLAIMS PAYABLE Changes in the self-insurance claims payable for fiscal years 2012 and 2013 were as follows for the County and Sheriff self-insurance programs: Property and Group Workers' Casualty Health Compensation Total Balance at September 30,2011 $ 1,524,852 $ 5,541,000 $ 576,647 $ 7,642,499 Current year claims incurred and changes in estimates 388,230 47,775,374 418,745 48,582,349 Claim payments (739,084) (47,618,374) (466,614) (48,824,072) Balance at September 30,2012 $ 1,173,998 $ 5,698,000 $ 528,778 $ 7,400,776 Current year claims incurred and changes in estimates 521,227 46,908,366 803,702 48,233,295 Claim payments (873,446) (46,154,366) (477,381) (47,505,193) Balance at September 30,2013 $ 821,779 $ 6,452,000 $ 855,099 $ 8,128,878 Plan Description—The County provides post employment healthcare benefits for retirees through a single employer defined benefit plan. The participants of this plan include retirees of the Board of County Commissioners,the Clerk of the Circuit Court,the Property Appraiser,the Tax Collector and the Supervisor of Elections. In accordance with Florida Statute 112.0801, employees who retire and immediately begin receiving benefits from the FRS have the option of paying premiums to continue in the County's health insurance plan at the same group rate as for active employees. The plan does not issue a publicly available financial report. 71 COLLIER COUNTY, FLORIDA NOTES TO THE FINANCIAL STATEMENTS SEPTEMBER 30, 2013 NOTE 13—OTHER POSTEMPLOYMENT BENEFITS The Board of County Commissioners and the Tax Collector administer an additional single-employer defined benefit plan (OPEB Plan) and can amend the benefit provisions. The Board offers an OPEB Plan that subsidizes the cost of health care for its retirees who have at least 60%of eligible accrued sick leave remaining at the time of retirement and have completed 15 years of continuous service with the Board. In addition,the retiree must retire from the Board, be at least 55 years of age or have completed 30 years of service under the Florida Retirement System (FRS) and be eligible to receive an FRS benefit with no break in time. Such employees are eligible to receive a 50%to 100%subsidy toward the cost of coverage under the active plan. A subsidy is currently provided to fourteen retirees. The Tax Collector offers an OPEB plan that subsidizes 100%the cost of health care for employees with 10 years of service, between the ages of 54 and 64 and who exchange 800 hours of sick leave at retirement. At September 30, 2013,the date of the latest actuarial valuation, County plan participation consisted of: OPEB plan participants 2,070 Retirees receiving benefits 73 Funding Policy-The County has the authority to establish and amend funding policy. For the year ended September 30, 2013, the County contributed $552,929 to the OPEB Plan. No trust or agency fund has been established for the plan. Annual OPEB Cost and Net OPEB Obligation - The annual cost of the County's OPEB Plan is calculated based on the Annual Required Contribution (ARC),an amount actuarially determined in accordance with the parameters of GASB Statement No. 45. The ARC represents a level of funding that, if paid on an ongoing basis, is projected to cover the normal cost each year and amortize any unfunded actuarial liability over a period not to exceed 30 years. The following table shows the components of the County's annual OPEB Plan cost for the year, the amount actually contributed, and the changes in the net OPEB Plan obligation. 2013 2012 2011 Annual required contribution (ARC) $ 749,470 $ 732,713 $662,704 Interest on net OPEB obligation 19,502 13,137 10,651 Adjustment to ARC (32,200) (21,690) (17,585) Annual OPEB cost 736,772 724,160 655,770 Contributions made (552,929) (511,971) (508,627) Increase (decrease)in net OPEB obligation 183,843 212,189 147,143 Net OPEB obligation-beginning of year 650,070 437,881 290,738 Net OPEB obligation-end of year $ 833,913 $ 650,070 $437,881 Funded Status and Funding Progress -The contributions made for the 2013 fiscal year were 75% of the annual OPEB cost. Contributions as a percentage of OPEB cost for fiscal years 2011 and 2012 were 78% and 71%, respectively. As of the September 30, 2012 actuarial valuation date the OPEB Plan was 0.0% funded and the actuarial accrued liability for benefits was $6,650,672, and the actuarial value of plan assets was $0, resulting in an unfunded actuarial accrued liability (UAAL) of $6,650,672. As of the September 30, 2013 actuarial valuation date the OPEB Plan was 0.0%funded and the actuarial accrued liability for benefits was $7,093,909, and the actuarial value of plan assets was$0, resulting in a UAAL of $7,093,909. The covered payroll (annual payroll of active employees covered by the OPEB Plan) was $153.8 million,and the ratio of the UAAL to the covered payroll was 4.6%. 72 COLLIER COUNTY, FLORIDA NOTES TO THE FINANCIAL STATEMENTS SEPTEMBER 30, 2013 NOTE 13—OTHER POSTEMPLOYMENT BENEFITS—CONTINUED Actuarial Methods and Assumptions - 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 the healthcare cost trend. Amounts determined regarding the funded status of the plan and the annual required contributions of the employer are subject to continual revision as actual results are compared with past expectations and new estimates are made about the future. Calculations for financial reporting purposes are based on the benefits provided under terms of the plan as understood by the employer and the plan members in effect at the time of each valuation and on the pattern of sharing of costs between the employer and plan members to that point. The projection of benefits for financial reporting purposes does not explicitly incorporate the potential effects of legal or contractual funding limitations on the pattern of cost sharing between the employer and plan members in the future. Actuarial calculations reflect a long-term perspective. Consistent with that perspective, actuarial methods and assumptions used include techniques that are designed to reduce the effects of short-term volatility in actuarial accrued liabilities and the actuarial value of assets. The actuarial methods and assumptions are: Actuarial cost method Projected Unit Credit Actuarial Cost Amortization method Level Dollar Amount Amortization period 30 years,Closed Investment rate of return 3% Discount rate 3% Inflation rate 3% Healthcare cost trend rate 7%for the 2014 fiscal year grading to an ultimate rate of 5%for the 2020 fiscal year Plan Description - The Sheriff administers a single-employer defined benefit plan (OPEB Plan) and can amend the benefit provisions. Prior to 2012,the Sheriff offered an OPEB Plan that subsidizes the cost of health care for its retirees who have 6 years of creditable service with the Sheriff and who receive a monthly retirement benefit from the Florida Retirement System. The Sheriff subsidizes approximately 20% for both single and family coverage for qualifying individuals. In 2012, the subsidy was no longer made available to eligible retirees who chose to continue their health insurance coverage. Approximately 73% of retirees receive the subsidy. Additionally, in accordance with Florida Statute 112.0801, Sheriff's employees who retire and immediately begin receiving benefits from the FRS have the option of paying premiums to continue in the Sheriff's health insurance plan at the same group rate as for active employees. The plan does not issue a publicly available financial report. At September 30, 2013,the date of the latest actuarial valuation, Sheriff plan participation consisted of: OPEB plan participants 1,092 Retirees receiving benefits 97 Funding Policy-The Sheriff has the authority to establish and amend funding policy. For the year ended September 30, 2013, the Sheriff contributed $834,442 to the OPEB Plan. No trust or agency fund has been established for the plan. 73 COLLIER COUNTY, FLORIDA NOTES TO THE FINANCIAL STATEMENTS SEPTEMBER 30, 2013 NOTE 13—OTHER POSTEMPLOYMENT BENEFITS-CONTINUED Annual OPEB Cost and Net OPEB Obligation - The annual cost of the Sheriff's OPEB Plan is calculated based on the Annual Required Contribution (ARC), an amount actuarially determined in accordance with the parameters of GASB Statement No. 45. The ARC represents a level of funding that, if paid on an ongoing basis, is projected to cover the normal cost each year and amortize any unfunded actuarial liability over a period not to exceed 30 years. The following table shows the components of the Sheriff's annual OPEB Plan cost for the year, the amount actually contributed, and the changes in the net OPEB Plan obligation. 2013 2012 2011 Annual required contribution(ARC) $ 1,151,695 $1,122,365 $1,117,938 Interest on net OPEB obligation 31,444 34,226 33,881 Adjustment to ARC (51,918) (56,511) (55,941) Annual OPEB cost 1,131,221 1,100,080 1,095,878 Contributions made (834,442) (1,192,805) (1,084,368) Increase in net OPEB obligation 296,779 (92,725) 11,510 Net OPEB obligation-beginning of year 1,048,138 1,140,863 1,129,353 Net OPEB obligation-end of year $ 1,344,917 $1,048,138 $1,140,863 Funded Status and Funding Progress -The contributions made for the 2013 fiscal year were 73% of the annual OPEB cost. Contributions as a percentage of OPEB cost for fiscal years 2011 and 2012 were 99% and 108%, respectively. As of the September 30, 2012 actuarial valuation date,the OPEB Plan was 0.0% funded,the actuarial accrued liability for benefits was$13,291,909,and the actuarial value of assets was $0, resulting in an unfunded actuarial accrued liability (UAAL) of$13,291,909. As of the September 30, 2013 actuarial valuation date,the OPEB Plan was 0.0%funded,the actuarial accrued liability for benefits was $13,141,022, and the actuarial value of assets was $0, resulting in a UAAL of $13,141,022. The covered payroll (annual payroll of active employees covered by the OPEB Plan) was $107.2 million, and the ratio of the UAAL to the covered payroll was 12.2%. Actuarial Methods and Assumptions - 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 the healthcare cost trend. Amounts determined regarding the funded status of the plan and the annual required contributions of the employer are subject to continual revision as actual results are compared with past expectations and new estimates are made about the future. Calculations for financial reporting purposes are based on the benefits provided under terms of the plan as understood by the employer and the plan members in effect at the time of each valuation and on the pattern of sharing of costs between the employer and plan members to that point. The projection of benefits for financial reporting purposes does not explicitly incorporate the potential effects of legal or contractual funding limitations on the pattern of cost sharing between the employer and plan members in the future. Actuarial calculations reflect a long-term perspective. Consistent with that perspective, actuarial methods and assumptions used include techniques that are designed to reduce the effects of short-term volatility in actuarial accrued liabilities and the actuarial value of assets. 74 COLLIER COUNTY, FLORIDA NOTES TO THE FINANCIAL STATEMENTS SEPTEMBER 30, 2013 NOTE 13—OTHER POSTEMPLOYMENT BENEFITS—CONTINUED The actuarial methods and assumptions are: Actuarial cost method Projected Unit Credit Actuarial Cost Amortization method Level Dollar Amount Amortization period 30 years,Closed Investment rate of return 3% Discount rate 3% Inflation rate 3% Healthcare cost trend rate 10%for the 2014 fiscal year grading to an ultimate rate of 5%for the 2024 fiscal year NOTE 14—LANDFILL LIABILITY On May 1, 1995 the County entered into a landfill operating agreement with a third party for the privatization of the County's landfill operations. Under the contract, the third party is responsible for the daily operations, capital improvements,closure, postclosure and financial assurance requirements of the active cells within the Naples and Immokalee landfill sites. Collier County is responsible for the postclosure costs relating to portions of the Naples and Immokalee landfill sites. None of the cells that Collier County is responsible for has accepted waste since December 1989. The County is also responsible for staffing and operating the scale house at each site. In accordance with U.S. Environmental Protection Agency rule Solid Waste Disposal and Facility Criteria and GASBS 18, Accounting for Municipal Solid Waste Landfill Closure and Postclosure Care Costs, a liability has been established representing amounts estimated to be spent on postclosure relating to cells for which Collier County is responsible. The County's estimated liability in connection with the landfills is included in the proprietary funds statement of net position. The landfill liability will be reassessed on an annual basis, and any increase due to inflation, changes in technology or additional postclosure care requirements will be recorded as a current cost. The County held an escrow account with Fifth Third Bank in the amount of $11,563, as of October 31, 2012, to comply with Rule 62-701.630, Florida Administrative Code for the exclusive use for the long term care of the inactive Eustis Avenue Landfill site. There were no deposits, other than interest, from this account in fiscal year 2013. The Florida Department of Environmental Protection (FDEP) inspected the closed Class I, Eustis Landfill, on May 17, 2012, under Closure Permit#SF11-102604.The facility was in compliance at that time. Upon inspection,the site has stabilized. The Certification of Long Term Care letter, signed and sealed by a Professional Engineer, as required, was submitted to the FDEP on August 2, 2012. The funds in the escrow account with Fifth Third Bank were transferred to the BOCC concentration account and the account was closed November 1, 2012. NOTE 15-SIGNIFICANT CONTINGENCIES LITIGATION The County is involved as defendant or plaintiff in certain litigation and claims arising in the ordinary course of operations. In the opinion of County legal counsel, the range of potential recoveries or liabilities,other than as disclosed here,will not materially affect the financial position of the County. 75 COLLIER COUNTY, FLORIDA NOTES TO THE FINANCIAL STATEMENTS SEPTEMBER 30, 2013 NOTE 15-SIGNIFICANT CONTINGENCIES—CONTINUED During fiscal year 2012, the Federal Emergency Management Agency (Agency) made a decision to de- obligate $11,172,273 in sand replacement costs previously reimbursed by the Agency to Collier County. The reimbursed costs were related to a project to repair beach erosion due to Hurricane Wilma. The decision to de-obligate the funding is currently under appeal by Collier County. In the opinion of County legal counsel, Collier County is unlikely to prevail. As such,a liability has been recorded in the amount of $11,172,273 in both the entity wide financial statements and the fund financial statements of Collier County. On January 10, 2014 the eminent domain case of Collier County, Florida versus RTG, LLC, et al.,was tried in the Twentieth Judicial Circuit. The case involved the taking of property from a CVS Pharmacy at the corner of Collier Boulevard and US 41 in preparation for intersection improvements. The landowner, RTG, LLC, claimed $4,178,200 in land and damages and CVS alleged loss of business with damages of another $3,151,534. The owners' claims were based on the loss of parking places along Collier Boulevard. Collier County's estimate of the total value of the property to be taken was $878,600 and this amount was deposited in the Court Registry during fiscal year 2013. The jury returned a verdict of $3,483,000 for RTG, the landowner, $1,933,000 for CVS, the business owner and $986,480 in legal fees. The total estimated cost of settlement is$6,402,480,with appeal not currently recommended by County legal staff. A liability for $5,524,050, the balance of the settlement and court service fees, has been recorded in the entity wide financial statements as well as the Road Impact Fees Fund in the fund financial statements. The Board has been named as a defendant in three related lawsuits, styled Francis Hussey, et al v. Collier County, Case No. 08-6933-CA; Board of County Commissioners v. Francis D. Hussey, et al., Case No. 08- 6988-CA consolidated with 08-6933-CA; and Sean Hussey, et al. v. Collier County, et al., Case No. 08- 7025-CA. On September 11, 2008,the Plaintiffs, Francis D. Hussey,Jr. and Mary P. Hussey, husband and wife, and Winchester Lakes Corporation, a Florida corporation, filed an inverse condemnation suit seeking monetary damages from Collier County, Florida, the Honorable Charlie Crist, the Governor of the State of Florida and the Florida Department of Community Affairs. The Husseys contend that the designation of certain real property owned by them through a growth management plan amendment adopted in 2002 had the effect of precluding mining activities on their property, thereby resulting in a substantial diminution in value of the real estate, which the Plaintiffs contend to be compensable under Florida law. The complaint alleges current damage claims in the amount of$91,500,000. The Plaintiffs have also presented a claim for "inverse condemnation based on a regulatory taking of plaintiffs' property," in an amount not specified in the complaint. The Wildlife Federation and Collier County Audubon Society were granted leave to intervene in the suit by the Court on April 29, 2009. On July 9, 2009, the Florida Wildlife Federation and Collier County Audubon Society served upon defendants Francis and Mary Hussey a Notice of Intent to Sue over violations of the Endangered Species Act of 1973 (16 U.S.C. 1531 et sea.) The initial cases were dismissed with prejudice in February 2011 by the trial court and are now on appeal to the Second District Court of Appeals. Pending the outcome of the first appeal, the parties recently entered into a Settlement Agreement with no costs to be incurred by the County. The Bert Harris Act statute requires Court approval of the Settlement Agreement which approval was denied by the Circuit Court Judge. The denial of this Settlement Agreement is now also on appeal at the Second District Court of Appeal. The briefings in both appellate cases are closed, and the parties are awaiting a decision from the Court. Given the Settlement Agreement, the County believes that this litigation will be concluded with no risk of liability to the County. 76 COLLIER COUNTY, FLORIDA NOTES TO THE FINANCIAL STATEMENTS SEPTEMBER 30, 2013 NOTE 15-SIGNIFICANT CONTINGENCIES—CONTINUED STATE AND FEDERAL GRANTS Grant monies received and disbursed by the County are for specific purposes and are subject to review by the grantor agencies. Such audits may result in requests for reimbursement due to disallowed expenditures. Based upon prior experience,the County does not believe that such disallowances, if any, would have a material effect on the financial position of the County. The Clerk's office is aware of inquiries being conducted by various grantor agencies. The impact to the financial statements, if any, is unknown and therefore unable to be calculated at this time. ARBITRAGE REBATE In accordance with the Tax Reform Act of 1986, any interest earnings on borrowed construction funds in excess of the interest costs incurred are required to be rebated to the federal government. There was no arbitrage rebate liability as of September 30, 2013. NOTE 16-SIGNIFICANT COMMITMENTS Encumbrances represent commitments for future expenditures, based on purchase orders or contracts issued,where the goods or services have been order but not received. Encumbrance commitments do not include construction contracts,as they are included as contract commitments. Collier County has the following encumbrances as of September 30, 2013: Encumbrance Category Commitments Governmental Activities: General Fund General Government $ 681,975 Economic Environment 18,000 Human Services 95,341 Culture and Recreation 18,096 Bayshore CRA Economic Environment 7,391 Immokalee CRA Economic Environment 108,690 Government Facilities Impact Fee General Government 4,878 Other Governmental Funds General Government 672,924 Public Safety 200,819 Physical Environment 2,042,313 Transportation 3,022,665 Economic Environment 3,696,852 Human Services 1,162,575 Culture and Recreation 631,079 Business-type Activities: Water and Sewer Utilities 13,082,723 Solid Waste Disposal Landfill 1,097,880 Other Enterprise Funds Airports 39,716 Mass Transit 1,406,666 Total $ 27,990,583 77 COLLIER COUNTY, FLORIDA NOTES TO THE FINANCIAL STATEMENTS SEPTEMBER 30, 2013 NOTE 16-SIGNIFICANT COMMITMENTS—CONTINUED Collier County has active construction projects as of September 30,2013. The projects include road construction,governmental facilities and utilities improvements. At year end the County's commitments with contractors includes the following: Construction Category Commitments Governmental Activities: Other Governmental Funds Public Safety $ 659,681 Physical Environment 3,656,946 Transportation 12,717,810 Economic Environment 306,771 Human Services 556,809 Culture and Recreation 603,061 Business-type Activities: Water and Sewer Utilities 33,151,638 Other Enterprise Funds Mass Transit 138,045 Total $ 51,790,761 NOTE 17—FUND DEFICITS The following funds had fund balance deficits at September 30, 2013: Fund Amount Government Facilities Impact Fee $(22,465,981) Fire Control Districts (94,158) County-Wide Library Impact Fee (8,937,551) Correctional Facilities Impact Fee (4,349,423) Emergency Medical Service Impact Fee (2,556,585) Law Enforcement Impact Fee (16,808,418) Total $(55,212,116) The fund balance deficits are primarily the result of advances from other funds made prior to September 30, 2013. These advances were recorded to ensure repayment of non-impact fee monies loaned to the impact fee fund for the construction of growth necessitated facilities. County management anticipates that the deficits will be covered by future years' impact fee revenues. NOTE 18—SUBSEQUENT EVENT In November of 2013,the Collier County Water and Sewer District borrowed $9,922,122 from the State of Florida Department of Environmental Protection's State Revolving Fund Loan Program for purposes of advance refunding a portion of the Water and Sewer District's Series 2006 Revenue Bonds. On January 21, 2014 the State Revolving Fund proceeds, together with other available monies, were placed in escrow. The final maturity of the loan is April 15, 2029, with an interest rate of 2.37%. The refunding achieved a net present value savings of 9.63% on the refunded bonds and an aggregate debt service savings of$2,879,103. The Series 2006 bonds have a redemption date of July 1, 2016. 78 REQUIRED SUPPLEMENTARY INFORMATION REQUIRED SUPPLEMENTAL INFORMATION COLLIER COUNTY,FLORIDA OTHER POSTEMPLOYMENT BENEFITS SCHEDULE OF FUNDING PROGRESS FOR THE RETIREE HEALTH PLAN Actuarial Accrued UAAL as a Actuarial Actuarial Liability(AAL)- Percentage of Valuation Value of Unit Credit Unfunded Funded Covered Covered Agency Date Assets Actuarial Cost AAL(UAAL) Ratio Payroll Payroll Board and Constitutionals 10/1/2009 $ - $ 5,814,470 $5,814,470 0.0% $ 164,923,591 3.5% (Non-Sheriff) Board and Constitutionals 10/1/2010 - 5,825,874 5,825,874 0.0% 159,321,900 3.7% (Non-Sheriff) Board and Constitutionals 10/1/2011 - 6,564,292 6,564,292 0.0% 155,365,190 4.2% (Non-Sheriff) Board and Constitutionals 10/1/2012 - 6,650,672 6,650,672 0.0% 150,761,054 4.4% (Non-Sheriff) Board and Constitutionals 10/1/2013 - 7,093,909 7,093,909 0.0% 153,771,967 4.6% (Non-Sheriff) Sheriff 10/1/2009 - 14,171,709 14,171,709 0.0% 123,296,677 11.5% Sheriff 10/1/2010 - 12,148,033 12,148,033 0.0% 117,879,632 10.3% Sheriff 10/1/2011 - 12,018,242 12,018,242 0.0% 114,185,572 10.5% Sheriff 10/1/2012 - 13,291,909 13,291,909 0.0% 108,390,240 12.3% Sheriff 10/1/2013 - 13,141,022 13,141,022 0.0% 107,204,015 12.3% 80 COMBINING AND INDIVIDUAL FUND FINANCIAL STATEMENTS THIS PAGE INTENTIONALLY LEFT BLANK Nonmajor Governmental Funds Special Revenue Funds ROAD DISTRICTS —To account for taxes levied and expenditures to carry on all work on roads and bridges in the County except that provided for in capital project funds. UNINCORPORATED AREA MUNICIPAL SERVICES TAXING DISTRICT — To account for revenues derived from and expanded for the benefit of the unincorporated areas of the County. COMMUNITY DEVELOPMENT—To account for building permit and development fees to support licensing,permitting and inspection services. WATER MANAGEMENT AND POLLUTION CONTROL — To account for taxes levied County-wide to provide water resource management and water pollution control. GRANTS AND SHARED REVENUES account for the revenues received from federal,state and local grants. IMPROVEMENT DISTRICTS — To account for taxes levied within municipal service taxing districts to provide for specified improvements and/or the maintenance of such improvements. FIRE CONTROL DISTRICTS—To account for taxes levied within municipal service taxing districts for fire prevention and control. LIGHTING DISTRICTS—To account for taxes levied within municipal service taxing district for street lighting. 911 ENHANCEMENT FEE — To account for fees levied on each telephone access line in the County for the enhancement of the 911 emergency telephone system. TOURIST DEVELOPMENT—To account for the 4%tourist development tax. STATE HOUSING INITIATIVE PARTNERSHIP—To account for state revenues received to provide affordable residential housing for very low to moderate income persons and those who have special housing needs. 800 MHZ INTERGOVERNMENTAL RADIO COMMUNICATIONS PROGRAM FUND — To account for moving traffic violation surcharges received to fund the County's intergovernmental radio communications program. STATE COURT ADMINISTRATION—To account for County monies used to fund the operation of the court system. CONFISCATED PROPERTY—To account for the accumulation and expenditure of proceeds from the sale of property confiscated by the Sheriff. GAC LAND SALES, ROADS AND CANALS — To account for principal and settlement fees received from a 1977 settlement with GAC Properties, Inc., and interest thereon to be expended for the restoration and maintenance of roads,facilities and drainage improvements in the Golden Gate Estates area. UTILITY FEE —To account for fees to be used to effectively and efficiently regulate private water and wastewater utilities operating within the unincorporated areas of Collier County and the City of Marco Island. CONSERVATION COLLIER—To account for the acquisition and management of environmentally sensitive lands. IMPACT FEE ESCROW—To account for impact fees relating to certain projects under construction until permits are issued. COURT INFORMATION TECHNOLOGY — To account for the accumulation of resources to enhance and increase access to court information. COURT SERVICES —To account for the accumulation of revenues associated with the function of the local court system. EMERGENCY MEDICAL SERVICES IMPACT FEES—To account for the receipt and expenditure of emergency medical service impact fees collected from all qualifying new construction. The impact fees must be used for acquisition/construction of emergency service facilities. WATER MANAGEMENT — To account for the receipt and expenditure of funds raised specifically for water management purposes. Primary funding is ad valorem taxes. PARKS IMPACT DISTRICTS — To account for the receipt and expenditure of parks impact fees collected from all qualifying new construction.The impact fees must be used for the acquisition/construction of park facilities. ROAD IMPACT DISTRICTS — To account for the receipt and expenditure of road impact fees collected from all qualifying new construction.The impact fees must be used for the acquisition/construction of roads. ROAD CONSTRUCTION — To account for the receipt and expenditure of gas taxes. Projects include, but are not limited to,right-of-way acquisition,design and construction of various transportation improvements. LAW ENFORCEMENT IMPACT FEES —To account for the receipt and expenditure of law enforcement impact fees collected from all qualifying new construction. The impact fee must be used for the acquisition/construction of law enforcement related facilities. OTHER CAPITAL PROJECTS—To account for major capital expenditure financed from resources other than proceeds from the issuance of long-term debt and the one third mil levy. COLLIER COUNTY,FLORIDA COMBINING BALANCE SHEET NONMAJOR GOVERNMENTAL FUNDS SEPTEMBER 30,2013 Special Revenue Funds Water Management Road Unincorporated Community and Pollution Districts Area MSTD Development Control ASSETS Cash,cash equivalents and investments $ 2,946,776 $ 7,436,735 $ 17,391,333 $ 2,480,903 Receivables: Interest 4,165 9,869 16,853 2,788 Trade,net 13,624 220,022 98,149 871 Notes - - - - Special assessments - - - - Due from other funds - 285,775 - 39,434 Due from other governments 83,803 383,803 125,150 68,543 Deposits - - - - Inventory for resale - - - - Inventory 199,552 - - - Advances to other funds - - - - Total assets $ 3,247,920 $ 8,336,204 $ 17,631,485 $ 2,592,539 LIABILITIES AND FUND BALANCES Liabilities: Accounts payable 646,252 803,053 85,001 45,298 Wages payable 436,711 650,793 457,027 114,660 Due to other funds - 1,063 1,600 - Due to other governments 22 3,145 1,309,926 - Due to individuals - - 4,150 - Deferred revenues 20 4,305 - - Refundable deposits - 3,312 61,785 - Retainage payable - - - - Advances from other funds - - 400,000 - Total liabilities 1,083,005 1,465,671 2,319,489 159,958 Fund balances(deficits): Nonspendable 199,552 - - - Restricted 1,965,363 - 15,311,996 - Committed - 6,870,533 - 2,432,581 Assigned - - - - Unassigned - - - - Total fund balances(deficits) 2,164,915 6,870,533 15,311,996 2,432,581 Total liabilities and fund balances $ 3,247,920 $ 8,336,204 $ 17,631,485 $ 2,592,539 See accompanying independent auditor's report 86 Special Revenue Funds Grants and Fire 911 Shared Improvement Control Lighting Enhancement Tourist Revenues Districts Districts Districts Fee Development $ 6,543,049 $ 18,636,751 $ 599,799 $ 675,918 $ 4,115,961 $ 47,178,458 4,117 19,387 880 749 4,234 48,799 18,923 3,379 1,903 154 - 642,968 206,333 - - - - - 206,127 32,682 25,526 8,894 - 123,900 5,552,284 - - - - 954,952 1,508,208 - - - - - $ 14,039,041 $ 18,692,199 $ 628,108 $ 685,715 $ 4,120,195 $ 48,949,077 1,429,341 253,910 850 41,242 - 1,328,021 119,566 27,988 111,029 5,458 - 104,099 3,191,710 - - - 63,646 1,851 4,105 - 10,387 - - 11,329,123 758,918 - - - - - 3,000 - - - - - 189,146 36,895 - - - 259,931 - 600,000 - - - 5,695,786 318,793 722,266 46,700 63,646 13,023,025 8,343,255 - - - 4,056,549 35,926,052 18,373,406 - 639,015 - - - (94,158) - - 8,343,255 18,373,406 (94,158) 639,015 4,056,549 35,926,052 $ 14,039,041 $ 18,692,199 $ 628,108 $ 685,715 $ 4,120,195 $ 48,949,077 87 COLLIER COUNTY, FLORIDA COMBINING BALANCE SHEET NONMAJOR GOVERNMENTAL FUNDS SEPTEMBER 30,2013 Special Revenue Funds State 800 Housing MHZ Initiative IRCP State Court Confiscated Partnership Fund Administration Property ASSETS Cash,cash equivalents and investments $ 830,453 $ 92,079 $ 137,767 $ 400,600 Receivables: Interest 1,128 280 333 387 Trade,net - 22,297 93,298 - Notes 846,571 - - - Special assessments - - - - Duefrom other funds - - 1,231 - Due from other governments - - - - Deposits - - - - Inventory for resale - - - - Inventory - - - - Advances to other funds - - - - Total assets $ 1,678,152 $ 114,656 $ 232,629 $ 400,987 LIABILITIES AND FUND BALANCES Liabilities: Accounts payable 168 13,158 213 - Wages payable 8,207 - 97,983 - Due to other funds - - - 3,126 Due to other governments - - - - Due to individuals - - - - Deferred revenues 920,252 - - - Refundable deposits - - - - Retainage payable - - - - Advances from other funds - - - - Total liabilities 928,627 13,158 98,196 3,126 Fund balances(deficits): Nonspendable - - - - Restricted 749,525 - - 397,861 Committed - 101,498 134,433 - Assigned - - - - Unassigned - - - - Total fund balances(deficits) 749,525 101,498 134,433 397,861 Total liabilities and fund balances $ 1,678,152 $ 114,656 $ 232,629 $ 400,987 See accompanying independent auditor's report 88 Special Revenue Funds GAC Land Court Sales,Roads Utility Conservation Impact Fee Information Court and Canals Fee Collier Escrow Technology Services $ 1,168,597 $ 1,005,419 $ 36,941,283 $ 681,743 $ 842,233 $ 827,098 1,180 935 37,489 921 926 - 62,881 7,278 - 63,224 - - 91,573 - - - - - - - - 87,372 245,951 - - - - - $ 1,415,728 $ 1,069,235 $ 37,077,623 $ 682,664 $ 906,383 $ 914,470 76,500 18 188,971 - 1,057 226,418 16,784 16,435 - 435 - 626,214 245,951 - 2,225 - - 61,838 13,132 - - 36,402 - - 322,451 16,802 244,033 13,132 1,492 914,470 1,093,277 - 36,833,590 - 904,891 - 1,052,433 - - - - - - 669,532 - - 1,093,277 1,052,433 36,833,590 669,532 904,891 - $ 1,415,728 $ 1,069,235 $ 37,077,623 $ 682,664 $ 906,383 $ 914,470 89 COLLIER COUNTY,FLORIDA COMBINING BALANCE SHEET NONMAJOR GOVERNMENTAL FUNDS SEPTEMBER 30,2013 Special Revenue Funds Other Court Court Special University Facilities Affordable Revenue Extension Fee Housing Funds ASSETS Cash,cash equivalents and investments $ 106,688 $ 5,099,920 $ 206,090 $ 4,579,714 Receivables: Interest 111 5,067 362 - Trade,net 100 81,753 - - Notes - - - - Special assessments - - - - Due from other funds - - - - Due from other governments - - - - Deposits - - - - Inventory for resale - - - - Inventory - - - - Advances to other funds - - - Total assets $ 106,899 $ 5,186,740 $ 206,452 $ 4,579,714 LIABILITIES AND FUND BALANCES Liabilities: Accounts payable 1,182 9,434 - 30,452 Wages payable - - - - Due to other funds - - - - Due to other governments - - - - Due to individuals - - - - Deferred revenues - - - - Refundable deposits - - - - Retainage payable - - -Advances from other funds - - - Total liabilities 1,182 9,434 - 30,452 Fund balances(deficits): Nonspendable - - - - Restricted 105,717 5,177,306 - 4,549,262 Committed - - 206,452 - Assigned - - - - Unassigned - - - - Total fund balances(deficits) 105,717 5,177,306 206,452 4,549,262 Total liabilities and fund balances $ 106,899 $ 5,186,740 $ 206,452 $ 4,579,714 See accompanying independent auditor's report 90 Special Revenue Funds Debt Service Funds Other Other Total Capital Public Safety Special Special Improvement Radio Road East Revenue Revenue Revenue Revenue Limited General Funds Funds Funds Bonds Obligation Bonds $ 2,334,175 $ 3,245,810 $ 166,505,352 $ 76,849 $ 79,896 - 3,419 164,379 10 67 25,000 33,111 1,388,935 - - - - 1,052,904 - - - - 815,142 - 756 - 7,255,907 - - - - 1,754,159 - - - - 199,552 - - $ 2,359,175 $ 3,282,340 $ 179,136,330 $ 76,859 $ 80,719 7,724 5,178 5,193,441 - - 5,464 2,172,639 - - 563,578 1,231 3,827,805 - - - 95 13,283,017 - - - - 4,150 - - - 1,993,509 - - - - 81,229 - - 522,374 - - - - 1,000,000 - - 571,302 11,968 28,078,164 - - - - 199,552 - - 1,787,873 2,421,950 119,624,467 - 80,719 - - 29,810,351 - - - 848,422 1,517,954 76,859 - - - (94,158) - - 1,787,873 3,270,372 151,058,166 76,859 80,719 $ 2,359,175 $ 3,282,340 $ 179,136,330 $ 76,859 $ 80,719 91 COLLIER COUNTY,FLORIDA COMBINING BALANCE SHEET NONMAJOR GOVERNMENTAL FUNDS SEPTEMBER 30,2013 Debt Service Funds Conservation Collier Community Forest Lakes Special Limited General Redevelopment Limited General Obligation Obligation Bonds Taxable Note Obligation Bonds Revenue Bonds ASSETS Cash,cash equivalents and investments $ 144,921 $ 547,684 $ 170,756 $ 3,361,132 Receivables: Interest 164 464 185 1,931 Trade,net 671 - 614 - Notes - - - - Special assessments - - - - Due from other funds 44,928 - 3,883 - Due from other governments - - - - Deposits - - - - Inventory for resale - - - - Inventory - - - - Advances to other funds - - - - Total assets $ 190,684 $ 548,148 $ 175,438 $ 3,363,063 LIABILITIES AND FUND BALANCES Liabilities: Accounts payable - - - - Wages payable - - - - Due to other funds - - - - Due to other governments - - - - Due to individuals - - - - Deferred revenues - - - - Refundable deposits - - - - Retainage payable - - - Advances from other funds - - - - Total liabilities - - - - Fund balances(deficits): Nonspendable - - - - Restricted 190,684 548,148 175,438 - Committed - - - - Assigned - - - 3,363,063 Unassigned - - - - Total fund balances(deficits) 190,684 548,148 175,438 3,363,063 Total liabilities and fund balances $ 190,684 $ 548,148 $ 175,438 $ 3,363,063 See accompanying independent auditor's report 92 Debt Service Funds Capital Projects Funds Total Debt County-Wide County-Wide Correctional Other Service Capital Parks Library Facilities Debt Service Funds Improvements Improvements Impact Fees Impact Fees $ 19,384 $ 4,400,622 $ 8,357,938 $ 10,324,184 $ 950,795 $ 1,555,029 155 2,976 8,013 10,578 889 1,674 66 1,351 181,440 5,757 1,439 575 - - - - 249,381 68,040 - 49,567 - 32,436 - - - - - - 12,239 18,599 - - 45,449,400 400,000 - - $ 19,605 $ 4,454,516 $ 53,996,791 $ 10,772,955 $ 1,214,743 $ 1,643,917 - - 330,801 1,884,490 25,288 - - - - 249,381 68,040 - - 2,626 177,419 - - - - - - 9,877,625 5,925,300 - 333,427 2,061,909 10,152,294 5,993,340 - - 45,449,400 400,000 - - 19,605 1,014,594 - - - - - 3,439,922 8,213,964 8,311,046 - - - - - (8,937,551) (4,349,423) 19,605 4,454,516 53,663,364 8,711,046 (8,937,551) (4,349,423) $ 19,605 $ 4,454,516 $ 53,996,791 $ 10,772,955 $ 1,214,743 $ 1,643,917 93 COLLIER COUNTY,FLORIDA COMBINING BALANCE SHEET NONMAJOR GOVERNMENTAL FUNDS SEPTEMBER 30,2013 Capital Projects Funds Emergency Medical Parks Road Services Water Impact Impact Impact Fees Management Districts Districts ASSETS Cash,cash equivalents and investments $ 487,295 $ 14,241,440 $ 15,311,518 $ 43,687,963 Receivables: Interest 467 14,637 14,613 44,005 Trade,net 303 - 8,124 20,715 Notes 69,632 - 1,515,002 3,873,653 Special assessments - - -Due from other funds - 2,393 - 439,086 Due from other governments 3,750 - 115,043 1,790,628 Deposits - - 1,250 - Inventory for resale - - - - Inventory - - - - Advances to other funds - - - - Total assets $ 561,447 $ 14,258,470 $ 16,965,550 $ 49,856,050 LIABILITIES AND FUND BALANCES Liabilities: Accounts payable - 492,087 27,151 5,827,120 Wages payable - - - - Due to other funds - - - - Due to other governments - - - - Due to individuals - - - - Deferred revenues 69,632 - 1,515,002 3,873,653 Refundable deposits - - - - Retainage payable - 116,780 11,622 406,696 Advances from other funds 3,048,400 -Total liabilities 3,118,032 608,867 1,553,775 10,107,469 Fund balances(deficits): Nonspendable - - - - Restricted - - 15,411,775 39,748,581 Committed - - - - Assigned - 13,649,603 - - Unassigned (2,556,585) - -Total fund balances(deficits) (2,556,585) 13,649,603 15,411,775 39,748,581 Total liabilities and fund balances $ 561,447 $ 14,258,470 $ 16,965,550 $ 49,856,050 See accompanying independent auditor's report 94 Capital Projects Funds Total Total Law Other Capital Nonmajor Road Enforcement Capital Projects Governmental Construction Impact Fees Projects Funds Funds $ 31,607,867 $ 1,357,543 $ 1,462,053 $ 129,343,625 $ 300,249,599 35,770 1,364 1,669 133,679 301,034 58,602 275 1,388 278,618 1,668,904 - 87,680 - 5,863,388 6,916,292 19,712 19,712 19,712 3,674,024 - 1,655 4,149,594 5,014,303 3,412,104 - - 5,352,363 12,608,270 - - - 1,250 1,250 - - - - 1,754,159 - - - - 199,552 - - - 45,849,400 45,849,400 $ 38,788,367 $ 1,446,862 $ 1,486,477 $ 190,991,629 $ 374,582,475 2,939,546 - 185,268 11,711,751 16,905,192 128,684 - 42,665 171,349 2,343,988 452,304 - - 452,304 4,280,109 - - - 13,283,017 - - - - 4,150 - 87,680 - 5,863,388 7,856,897 - - - - 81,229 963,916 - - 1,679,059 2,201,433 - 18,167,600 - 37,018,925 38,018,925 4,484,450 18,255,280 227,933 56,896,776 84,974,940 - - - 45,849,400 46,048,952 34,303,917 - 26,633 89,490,906 210,129,967 - - - - 29,810,351 - - 1,231,911 31,406,524 36,364,400 - (16,808,418) - (32,651,977) (32,746,135) 34,303,917 (16,808,418) 1,258,544 134,094,853 289,607,535 $ 38,788,367 $ 1,446,862 $ 1,486,477 $ 190,991,629 $ 374,582,475 95 COLLIER COUNTY,FLORIDA COMBINING STATEMENT OF REVENUES, EXPENDITURES AND CHANGES IN FUND BALANCES NONMAJOR GOVERNMENTAL FUNDS FOR THE FISCAL YEAR ENDED SEPTEMBER 30,2013 Special Revenue Funds Water Management Road Unincorporated Community and Pollution Districts Area MSTD Development Control Revenues: Taxes $ - $ 30,183,119 $ - $ 1,656,019 Licenses,permits and impact fees 318,900 210,887 16,528,784 755 Intergovernmental 684,375 11,770 - 5,557 Charges for services 194,256 2,569,762 2,834,766 396,021 Fines and forfeitures - 542,968 - - Interest income 11,291 44,316 40,452 10,687 Special assessments - - - 2,480,385 Miscellaneous 40,875 215,820 1,878 220 Total revenues 1,249,697 33,778,642 19,405,880 4,549,644 Expenditures: Current: General government - 6,670,165 3,187,669 - Public safety - 4,028,386 7,627,018 - Physical environment - 596,086 404,992 2,407,006 Transportation 15,047,849 10,188,403 - 1,608,041 Economic environment - 109,523 - - Human services - - - - Culture and recreation - 9,984,275 - - Debt service: Principal - - - - Interest - - - - Payment to refunding bond escrow - - - - Fiscal charges - - - - Capital outlay 26,189 60,960 131,348 133,651 Total expenditures 15,074,038 31,637,798 11,351,027 4,148,698 Excess(deficiency)of revenues over(under)expenditures (13,824,341) 2,140,844 8,054,853 400,946 Other financing sources(uses): Bonds issued - - - - Premiums on bonds issued - - - - Payment to refunding bond escrow - - - - Sale of capital assets - 1,700 25,982 5,561 Insurance proceeds 192,019 42,891 361 23,897 Transfers in 13,817,500 695,806 732,200 39,005 Transfers out (334,811) (4,705,395) (2,375,000) (585,673) Total other financing sources(uses) 13,674,708 (3,964,998) (1,616,457) (517,210) Net change in fund balances (149,633) (1,824,154) 6,438,396 (116,264) Fund balances(deficits)at beginning of year 2,314,548 8,694,687 8,873,600 2,548,845 Fund balances(deficits)at end of year $ 2,164,915 $ 6,870,533 $ 15,311,996 $ 2,432,581 See accompanying independent auditor's report 96 Special Revenue Funds Grants and Fire 911 Shared Improvement Control Lighting Enhancement Tourist Revenues Districts Districts Districts Fee Development $ - $ 3,306,495 $ 2,538,181 $ 1,023,758 $ 1,851,638 $ 16,183,377 16,577,714 - - - - 998,842 322,535 211,316 17,080 - - 323 24,378 61,461 3,665 2,478 12,320 139,573 641,987 6,785 3,395 12,812 - 91,867 17,566,614 3,586,057 2,562,321 1,039,048 1,863,958 17,413,982 902,216 747 - - - - 1,810,041 - 2,913,501 - 1,632,910 - 92,375 1,949,857 - - - 4,352,360 334,357 1,037,372 - 776,846 - - 9,752,542 - - - - - 2,236,248 - - - - - 116,188 893,114 - - - 6,984,651 88,783 - - - - - - - 18,839 - - - 4,333,065 2,815,417 7,353 - - 2,793,727 19,577,032 6,696,507 3,028,476 776,846 1,632,910 14,130,738 (2,010,418) (3,110,450) (466,155) 262,202 231,048 3,283,244 22,826 - - - - 300 2,252 - - - - 221,224 388,940 459,637 8,776 - 123,900 (574,023) (690,647) (26,168) - (743,979) 244,050 (182,831) (231,010) (17,392) - (619,779) (1,766,368) (3,293,281) (697,165) 244,810 231,048 2,663,465 10,109,623 21,666,687 603,007 394,205 3,825,501 33,262,587 $ 8,343,255 $ 18,373,406 $ (94,158) $ 639,015 $ 4,056,549 $ 35,926,052 97 COLLIER COUNTY,FLORIDA COMBINING STATEMENT OF REVENUES,EXPENDITURES AND CHANGES IN FUND BALANCES NONMAJOR GOVERNMENTAL FUNDS FOR THE FISCAL YEAR ENDED SEPTEMBER 30,2013 Special Revenue Funds State Housing Initiative 800 MHZ State Court Confiscated Partnership ICRP Fund Administration Property Revenues: Taxes $ - $ - $ - $ - Licenses,permits and impact fees - - - - Intergovernmental 1,439,312 - - - Charges for services - 485,998 145,150 - Fines and forfeitures - - 990,297 51,145 Interest income 4,575 499 1,293 1,304 Special assessments - - - - Miscellaneous 241,139 128,060 17,940 - Total revenues 1,685,026 614,557 1,154,680 52,449 Expenditures: Current: General government - - 874,112 - Public safety - 1,149,026 1,452,524 56,000 Physical environment - - - - Transportation - - - - Economic environment 1,856,948 - - - Human services - - - - Culture and recreation - - - - Debt service: Principal - - - - Interest - - - - Payment to refunding bond escrow - - - - Fiscal charges - - - - Capital outlay 1,162 - 1,019 - Total expenditures 1,858,110 1,149,026 2,327,655 56,000 Excess(deficiency)of revenues over(under)expenditures (173,084) (534,469) (1,172,975) (3,551) Other financing sources(uses): Bonds issued - - - - Premiums on bonds issued - - - - Payment to refunding bond escrow - - - - Sale of capital assets - - - - Insurance proceeds - - - - Transfers in - 576,400 956,831 - Transfers out - - (6,980) (70,952) Total other financing sources(uses) - 576,400 949,851 (70,952) Net change in fund balances (173,084) 41,931 (223,124) (74,503) Fund balances(deficits)at beginning of year 922,609 59,567 357,557 472,364 Fund balances(deficits)at end of year $ 749,525 $ 101,498 $ 134,433 $ 397,861 See accompanying independent auditor's report 98 Special Revenue Funds GAC Land Court Sales,Roads Utility Conservation Impact Fee Information Court and Canals Fee Collier Escrow Technology Services $ - $ 300,838 $ 9,327,111 $ - $ - $ - - - - - - 6,365,715 134,361 500 - 910,580 2,273,168 3,982 2,614 106,535 2,749 2,319 4,279 - - 8,088 58_ - 3,982 437,813 9,442,234 2,749 912,957 8,643,162 - - - - 529,485 8,922,210 - - - - 16,433 - 356,161 679,501 - - - - - - - 4,818 - 311,040 - - - - - 76,500 2,325 817,287 - 67,385 - 387,540 358,486 1,496,788 - 618,121 8,922,210 (383,558) 79,327 7,945,446 2,749 294,836 (279,048) 70,000 918,990 - - - - - (1,095,287) - - - 70,000 (176,297) - - - (383,558) 149,327 7,769,149 2,749 294,836 (279,048) 1,476,835 903,106 29,064,441 666,783 610,055 279,048 $ 1,093,277 $ 1,052,433 $ 36,833,590 $ 669,532 $ 904,891 $ - 99 COLLIER COUNTY,FLORIDA COMBINING STATEMENT OF REVENUES,EXPENDITURES AND CHANGES IN FUND BALANCES NONMAJOR GOVERNMENTAL FUNDS FOR THE FISCAL YEAR ENDED SEPTEMBER 30,2013 Special Revenue Funds Other Court Court Special University Facilities Affordable Revenue Extension Fee Housing Funds Revenues: Taxes $ - $ - $ - $ - Licenses,permits and impact fees - - - - Intergovernmental - - - - Charges for services 1,787 - - 1,934,596 Fines and forfeitures - 1,107,455 - - Interest income 239 13,951 1,778 7,539 Special assessments - - - - Miscellaneous 69,669 - - - Total revenues 71,695 1,121,406 1,778 1,942,135 Expenditures: Current: General government - 35,116 - 859,793 Public safety - - - - Physical environment 31,268 - - - Transportation - - - - Economic environment - - 445,835 - Human services - - - - Culture and recreation - - - - Debt service: Principal - - - - Interest - - - - Payment to refunding bond escrow - - - - Fiscal charges - - - - Capital outlay - 63,360 - - Total expenditures 31,268 98,476 445,835 859,793 Excess(deficiency)of revenues over(under)expenditures 40,427 1,022,930 (444,057) 1,082,342 Other financing sources(uses): Bonds issued - - - - Premiums on bonds issued - - - - Payment to refunding bond escrow - - - - Sale of capital assets - - - - Insurance proceeds - - - - Transfers in - - - - Transfers out - - Total other financing sources(uses) - - -Net change in fund balances 40,427 1,022,930 (444,057) 1,082,342 Fund balances(deficits)at beginning of year 65,290 4,154,376 650,509 3,466,920 Fund balances(deficits)at end of year $ 105,717 $ 5,177,306 $ 206,452 $ 4,549,262 See accompanying independent auditor's report 100 Special Revenue Funds Debt Service Funds Other Other Total Capital Public Safety Special Special Improvement Radio Road East Revenue Revenue Revenue Revenue Limited General Funds Funds Funds Bonds Obligation Bonds $ - $ - $ 66,370,536 $ - $ 76,028 5,105 17,064,431 - - 26,083,285 - - 626,788 453,004 13,511,991 - - 151,098 2,842,963 - - 6,132 10,621 521,030 754 160 2,480,385 - - 124,376 59,569 1,664,538 - - 757,296 679,397 130,539,159 754 76,188 169,664 22,151,177 - 650 782,276 343,851 21,811,966 - - 10,869,606 - - 28,992,868 - - 12,164,848 - - - - 151,187 2,392,253 - - 35,200 18,324,468 - - 88,783 - 47,299 - - 18,839 3,161,506 17,781 - - - - - 131,729 - - - - 5,264 3,180 436,676 299,457 12,066,881 - - 1,218,952 999,359 128,881,689 3,298,499 68,910 (461,656) (319,962) 1,657,470 (3,297,745) 7,278 56,369 - - 261,420 - - 36,112 19,045,321 3,308,988 50,756 (1,251) (11,210,166) (9,696) (956) 34,861 8,152,944 3,299,292 49,800 (461,656) (285,101) 9,810,414 1,547 57,078 2,249,529 3,555,473 141,247,752 75,312 23,641 $ 1,787,873 $ 3,270,372 $ 151,058,166 $ 76,859 $ 80,719 101 COLLIER COUNTY,FLORIDA COMBINING STATEMENT OF REVENUES, EXPENDITURES AND CHANGES IN FUND BALANCES NONMAJOR GOVERNMENTAL FUNDS FOR THE FISCAL YEAR ENDED SEPTEMBER 30,2013 Debt Service Funds Conservation Collier Community Forest Lakes Special Limited General Redevelopment Limited General Obligation Obligation Bonds Taxable Note Obligation Bonds Revenue Bonds Revenues: Taxes $ 4,802,449 $ - $ 357,992 $ - Licenses,permits and impact fees - - - - Intergovernmental - - - - Charges for services - - Fines and forfeitures - - -Interest income 2,791 4,198 894 1,746 Special assessments - - - - Miscellaneous - - - - Total revenues 4,805,240 4,198 358,886 1,746 Expenditures: Current: General government 3,454 - - - Public safety - - - - Physical environment - - - - Transportation - - - - Economic environment - - - - Human services - - - - Culture and recreation - - - - Debt service: Principal 4,805,000 2,254,064 380,000 9,695,000 Interest 120,125 354,730 178,400 7,248,819 Payment to refunding bond escrow - - -Fiscal charges 275 22,007 2,865 2,125,645 Capital outlay - - - - Total expenditures 4,928,854 2,630,801 561,265 19,069,464 Excess(deficiency)of revenues over(under)expenditures (123,614) (2,626,603) (202,379) (19,067,718) Other financing sources(uses): Bonds issued - - - 73,805,000 Premiums on bonds issued - - - 2,082,016 Payment to refunding bond escrow - - - (73,746,911) Sale of capital assets - - - - Insurance proceeds - - - - Transfers in 834,829 1,494,900 3,770 20,034,087 Transfers out (969,570) - (11,894) (738) Total other financing sources(uses) (134,741) 1,494,900 (8,124) 22,173,454 Net change in fund balances (258,355) (1,131,703) (210,503) 3,105,736 Fund balances(deficits)at beginning of year 449,039 1,679,851 385,941 257,327 Fund balances(deficits)at end of year $ 190,684 $ 548,148 $ 175,438 $ 3,363,063 See accompanying independent auditor's report 102 Debt Service Funds Capital Projects Funds Total County-Wide County-Wide Correctional Other Debt Service Capital Parks Library Facilities Debt Service Funds Improvements Improvements Impact Fees Impact Fees $ 4,118 $ 5,240,587 $ - $ - $ - $ - - - - 555,019 633,332 1,089,677 - - - 300,000 - - 7,952 18,495 22,780 34,411 3,209 4,593 - - 941,440 267,727 - - 12,070 5,259,082 964,220 1,157,157 636,541 1,094,270 1,879 5,983 1,329,393 - - - - - 10,719 - - 35,097 - - 11,945 - - - - - - 531,645 35,320 - 7,855,000 25,036,363 - - - - 6,452,511 17,533,872 - - - - - 131,729 - - - - 5,949 2,165,185 - - - - 418,597 3,089,137 118,754 - 14,315,339 44,873,132 1,770,654 3,620,782 154,074 35,097 (14,303,269) (39,614,050) (806,434) (2,463,625) 482,467 1,059,173 - 73,805,000 - - - - - 2,082,016 - - - - (73,746,911) - - - - 9,300 - - - 11,734,900 37,462,230 6,470,300 32,436 - - (55,089) (1,047,943) - (2,612,045) (1,164,200) (1,892,477) 11,679,811 38,554,392 6,479,600 (2,579,609) (1,164,200) (1,892,477) (2,623,458) (1,059,658) 5,673,166 (5,043,234) (681,733) (833,304) 2,643,063 5,514,174 47,990,198 13,754,280 (8,255,818) (3,516,119) $ 19,605 $ 4,454,516 $ 53,663,364 $ 8,711,046 $ (8,937,551) $ (4,349,423) 103 COLLIER COUNTY,FLORIDA COMBINING STATEMENT OF REVENUES,EXPENDITURES AND CHANGES IN FUND BALANCES NONMAJOR GOVERNMENTAL FUNDS FOR THE FISCAL YEAR ENDED SEPTEMBER 30,2013 Capital Projects Funds Emergency Medical Parks Road Services Water Impact Impact Impact Fees Management Districts Districts Revenues: Taxes $ - $ - $ - $ - Licenses,permits and impact fees 255,703 - 6,232,882 6,458,955 Intergovernmental - 1,000,000 52,585 3,518,038 Charges for services - - - - Fines and forfeitures - - - - Interest income 1,262 44,560 39,561 148,718 Special assessments - 312,715 - - Miscellaneous - 17,995 - 5,702 Total revenues 256,965 1,375,270 6,325,028 10,131,413 Expenditures: Current: General government - - - - Public safety 4,466 - - - Physical environment - 704,060 - - Transportation - - - 495,893 Economic environment - - - - Human services - - - - Culture and recreation - - 329,885 - Debt service: Principal - - - - Interest - - - - Payment to refunding bond escrow - - - - Fiscal charges - - - - Capital outlay - 4,745,680 823,326 16,622,880 Total expenditures 4,466 5,449,740 1,153,211 17,118,773 Excess(deficiency)of revenues over(under)expenditures 252,499 (4,074,470) 5,171,817 (6,987,360) Other financing sources(uses): Bonds issued - - - - Premiums on bonds issued - - - - Payment to refunding bond escrow - - - - Sale of capital assets - - - - Insurance proceeds - - - - Transfers in - 4,819,794 - - Transfers out (447,454) (880,083) (2,674,207) - Total other financing sources(uses) (447,454) 3,939,711 (2,674,207) - Netchangeinfund balances (194,955) (134,759) 2,497,610 (6,987,360) Fund balances(deficits)at beginning of year (2,361,630) 13,784,362 12,914,165 46,735,941 Fund balances(deficits)at end of year $ (2,556,585) $ 13,649,603 $ 15,411,775 $ 39,748,581 See accompanying independent auditor's report 104 Capital Projects Funds Total Total Law Other Capital Nonmajor Road Enforcement Capital Projects Governmental Construction Impact Fees Projects Funds Funds $ 12,620,538 $ - $ - $ 12,620,538 $ 84,231,661 895,435 2,052 16,123,055 33,187,486 10,457,383 - - 15,028,006 41,111,291 428,729 - - 728,729 14,240,720 - - 2,842,963 109,306 5,140 4,635 418,175 957,700 - - 130,526 443,241 2,923,626 214,974 - 3 1,447,841 3,112,379 23,830,930 900,575 137,216 46,809,585 182,607,826 174,500 1,503,893 23,661,053 - 4,281 - 54,563 21,866,529 - 1,498,553 2,214,558 13,084,164 7,436,874 - - 7,932,767 36,925,635 12,164,848 - - - 2,392,253 15,795 912,645 19,237,113 - - - - - - 25,125,146 17,552,711 - - - - - - 131,729 - - - - 2,165,185 15,669,677 - 141,228 41,629,279 53,696,160 23,106,551 4,281 1,830,076 54,247,705 228,002,526 724,379 896,294 (1,692,860) (7,438,120) (45,394,700) - 73,805,000 2,082,016 - - - - - (73,746,911) - - - - 56,369 - - - 9,300 270,720 9,221,905 - 1,537,691 22,082,126 78,589,677 (15,071,347) (2,657,251) (4,592) (27,403,656) (39,661,765) (5,849,442) (2,657,251) 1,533,099 (5,312,230) 41,395,106 (5,125,063) (1,760,957) (159,761) (12,750,350) (3,999,594) 39,428,980 (15,047,461) 1,418,305 146,845,203 293,607,129 $ 34,303,917 $ (16,808,418) $ 1,258,544 $ 134,094,853 $ 289,607,535 105 COLLIER COUNTY,FLORIDA COMBINING SCHEDULE OF REVENUES, EXPENDITURES AND CHANGES IN FUND BALANCES BUDGET AND ACTUAL(BUDGETARY BASIS) MAJOR CAPITAL PROJECT AND NONMAJOR GOVERNMENTAL FUNDS FOR THE FISCAL YEAR ENDED SEPTEMBER 30,2013 Government Facilities Road Districts Impact Fees(Budgetary Basis) (Budgetary Basis) Budget Actual Variance Budget Actual Variance Revenues: Taxes $ - $ - $ - $ - $ - $ - Licenses,permits and impact fees 860,000 1,687,226 827,226 325,000 318,900 (6,100) Intergovernmental - - - 474,900 684,375 209,475 Charges for services - - - 212,500 194,256 (18,244) Fines and forfeitures - - - - -Interest income 30,000 14,000 (16,000) 8,100 17,890 9,790 Special assessments - - - - - - Miscellaneous - - - 20,200 40,875 20,675 Total revenues 890,000 1,701,226 811,226 1,040,700 1,256,296 215,596 Expenditures: Current: General government 259,237 5,690 253,547 - - - Public safety - - - - - - Physical environment - - - - - Transportation - - - 15,847,000 15,047,849 799,151 Economic environment - - - - - - Human services - - - - - Culture and recreation - - - - - - Debt service 13,000 12,550 450 - - - Capital outlay - - - 275,600 26,189 249,411 Total expenditures 272,237 18,240 253,997 16,122,600 15,074,038 1,048,562 Excess(deficit)of revenues over(under)expenditures 617,763 1,682,986 1,065,223 (15,081,900) (13,817,742) 1,264,158 Other financing sources(uses): Bonds issued - - - - - - Premiums on bonds issued - - - - - - Payment to refunding bond escrow - - - - - - Sale of capital assets - - - - - - Insurance proceeds - - - 119,500 192,019 72,519 Transfers in 3,932,000 3,932,000 - 13,918,500 13,817,500 (101,000) Transfers out (5,009,877) (5,009,877) - (334,811) (334,811) - Total other financing sources(uses) (1,077,877) (1,077,877) - 13,703,189 13,674,708 (28,481) Net change in fund balances (460,114) 605,109 1,065,223 (1,378,711) (143,034) 1,235,677 Fund balances at beginning of year 3,248,435 3,248,435 - 1,613,300 1,613,300 - Fund balances(deficits)at end of year $ 2,788,321 $ 3,853,544 $ 1,065,223 $ 234,589 $ 1,470,266 $ 1,235,677 See accompanying independent auditor's report Reconciliation: Net change in fund balance,budgetary basis $ 605,109 $ (143,034) Change in fair value of investments (6,049) (6,599) Ad valorem refunds not budgeted - - Advances budgeted as transfers (3,302,000) - Unbudgeted funds - - Deferred revenues -Net change in fund balance,GAAP basis $ (2,702,940) $ (149,633) 106 Unincorporated Area MSTD Community Development (Budgetary Basis) (Budgetary Basis) Budget Actual Variance Budget Actual Variance $ 31,038,400 $ 30,183,119 $ (855,281) $ - $ - $ - 181,000 210,887 29,887 9,262,600 16,528,784 7,266,184 11,770 11,770 - - - 2,356,500 2,569,762 213,262 1,924,600 2,834,766 910,166 151,000 542,968 391,968 - - - 50,000 66,957 16,957 33,700 64,490 30,790 161,524 215,820 54,296 100 1,878 1,778 33,938,424 33,801,283 (137,141) 11,221,000 19,429,918 8,208,918 6,980,575 6,648,192 332,383 3,581,975 3,187,669 394,306 4,131,166 4,028,386 102,780 8,488,706 7,627,018 861,688 699,000 596,086 102,914 412,600 404,992 7,608 10,624,221 10,188,403 435,818 - - - 129,500 109,523 19,977 - - - 10,583,676 9,984,275 599,401 - - 72,964 60,960 12,004 152,000 131,348 20,652 33,221,102 31,615,825 1,605,277 12,635,281 11,351,027 1,284,254 717,322 2,185,458 1,468,136 (1,414,281) 8,078,891 9,493,172 1,700 1,700 - 25,982 25,982 16,573 42,891 26,318 - 361 361 771,700 845,806 74,106 882,200 882,200 - (5,120,472) (4,855,395) 265,077 (3,025,000) (3,025,000) - (4,332,199) (3,964,998) 367,201 (2,142,800) (2,116,457) 26,343 (3,614,877) (1,779,540) 1,835,337 (3,557,081) 5,962,434 9,519,515 6,490,683 6,490,683 - 6,912,073 6,912,073 - $ 2,875,806 $ 4,711,143 $ 1,835,337 $ 3,354,992 $ 12,874,507 $ 9,519,515 $ (1,779,540) $ 5,962,434 (22,641) (24,038) (21,973) - 500,000 $ (1,824,154) $ 6,438,396 107 COLLIER COUNTY,FLORIDA COMBINING SCHEDULE OF REVENUES,EXPENDITURES AND CHANGES IN FUND BALANCES BUDGET AND ACTUAL(BUDGETARY BASIS) MAJOR CAPITAL PROJECT AND NONMAJOR GOVERNMENTAL FUNDS FOR THE FISCAL YEAR ENDED SEPTEMBER 30,2013 Water Management and Grants and Shared Revenues Pollution Control(Budgetary Basis) (Budgetary Basis) Budget Actual Variance Budget Actual Variance Revenues: Taxes $ 1,716,900 $ 1,656,019 $ (60,881) $ - $ - $ - Licenses,permits and impact fees 200 755 555 - - - Intergovernmental - 5,557 5,557 49,228,789 15,574,387 (33,654,402) Charges for services 376,400 396,021 19,621 775,016 322,535 (452,481) Fines and forfeitures - - - - -Interest income 26,600 16,307 (10,293) 1,148 19,469 18,321 Special assessments 2,573,800 2,480,385 (93,415) - - - Miscellaneous - 220 220 2,065,157 641,987 (1,423,170) Total revenues 4,693,900 4,555,264 (138,636) 52,070,110 16,558,378 (35,511,732) Expenditures: Current: General government - - - 2,397,792 902,216 1,495,576 Public safety - - - 983,299 376,360 606,939 Physical environment 3,036,575 2,406,027 630,548 131,457 92,375 39,082 Transportation 1,681,400 1,608,041 73,359 128,657 334,357 (205,700) Economic environment - - - 25,930,702 9,752,542 16,178,160 Human services - - - 4,903,681 2,236,248 2,667,433 Culture and recreation - - - 368,795 116,188 252,607 Debt service - - - - - - Capital outlay 145,396 133,651 11,745 22,102,313 4,179,416 17,922,897 Total expenditures 4,863,371 4,147,719 715,652 56,946,696 17,989,702 38,956,994 Excess(deficit)of revenues over(under)expenditures (169,471) 407,545 577,016 (4,876,586) (1,431,324) 3,445,262 Other financing sources(uses): Bonds issued - - - - - - Premiums on bonds issued - - - - - Payment to refunding bond escrow - - - - - - Sale of capital assets - 5,561 5,561 - 22,826 22,826 Insurance proceeds - 23,897 23,897 - - - Transfers in - 39,005 39,005 7,751,496 348,958 (7,402,538) Transfers out (648,700) (585,673) 63,027 (219,637) (127,734) 91,903 Total other financing sources(uses) (648,700) (517,210) 131,490 7,531,859 244,050 (7,287,809) Net change in fund balances (818,171) (109,665) 708,506 2,655,273 (1,187,274) (3,842,547) Fund balances at beginning of year 2,072,771 2,072,771 - 5,359,448 5,359,448 - Fund balances(deficits)at end of year $ 1,254,600 $ 1,963,106 $ 708,506 $ 8,014,721 $ 4,172,174 $ (3,842,547) See accompanying independent auditor's report Reconciliation: Net change in fund balance,budgetary basis $ (109,665) $ (1,187,274) Change in fair value of investments (5,620) (6,822) Ad valorem refunds not budgeted (979) - Advances budgeted as transfers - - Unbudgeted funds - (572,272) Deferred revenues - - Net change in fund balance,GAAP basis $ (116,264) $ (1,766,368) 108 Improvement Districts (Budgetary Basis) Fire Control Districts(Budgetary Basis) Budget Actual Variance Budget Actual Variance $ 3,412,200 $ 3,306,495 $ (105,705) $ 2,623,200 $ 2,538,181 $ (85,019) 253,200 211,316 (41,884) 6,200 17,080 10,880 40,800 96,762 55,962 4,300 5,652 1,352 6,785 6,785 2,900 3,395 495 3,706,200 3,621,358 (84,842) 2,636,600 2,564,308 (72,292) 3,160,789 2,909,216 251,573 5,214,657 1,948,622 3,266,035 - - - 2,500,458 1,036,352 1,464,106 - - - 971,856 891,229 80,627 - - - - 110,900 107,622 3,278 12,988,995 2,815,417 10,173,578 11,149 7,353 3,796 21,675,966 6,691,620 14,984,346 3,282,838 3,024,191 258,647 (17,969,766) (3,070,262) 14,899,504 (646,238) (459,883) 186,355 2,252 2,252 - - - 357,000 388,940 31,940 1,176,100 577,389 (598,711) (595,000) (574,023) 20,977 (815,167) (808,399) 6,768 (238,000) (182,831) 55,169 360,933 (231,010) (591,943) (18,207,766) (3,253,093) 14,954,673 (285,305) (690,893) (405,588) 19,973,066 19,973,066 - 435,245 435,245 - $ 1,765,300 $ 16,719,973 $ 14,954,673 $ 149,940 $ (255,648) $ (405,588) $ (3,253,093) $ (690,893) (35,301) (1,987) (4,887) (4,285) $ (3,293,281) $ (697,165) 109 COLLIER COUNTY,FLORIDA COMBINING SCHEDULE OF REVENUES,EXPENDITURES AND CHANGES IN FUND BALANCES BUDGET AND ACTUAL(BUDGETARY BASIS) MAJOR CAPITAL PROJECT AND NONMAJOR GOVERNMENTAL FUNDS FOR THE FISCAL YEAR ENDED SEPTEMBER 30,2013 Lighting Districts 911 Enhancement Fee(Budgetary Basis) Budget Actual Variance Budget Actual Variance Revenues: Taxes $ 1,062,000 $ 1,023,758 $ (38,242) $ 2,200,300 $ 1,851,638 $ (348,662) Licenses,permits and impact fees - - - - - - Intergovernmental - - - - - - Charges for services - - - - - - Fines and forfeitures - - - - -Interest income 7,000 3,784 (3,216) 36,200 19,421 (16,779) Special assessments - - - - - - Miscellaneous - 12,812 12,812 - - - Total revenues 1,069,000 1,040,354 (28,646) 2,236,500 1,871,059 (365,441) Expenditures: Current: General government - - - - - - Public safety - - - 3,368,434 1,632,910 1,735,524 Physical environment - - - - - - Transportation 838,200 776,398 61,802 - - - Economic environment - - - - - - Human services - - - - - - Culture and recreation - - - - - - Debt service - - - - - - Capital outlay 1,000 - 1,000 23,500 - 23,500 Total expenditures 839,200 776,398 62,802 3,391,934 1,632,910 1,759,024 Excess(deficit)of revenues over(under)expenditures 229,800 263,956 34,156 (1,155,434) 238,149 1,393,583 Other financing sources(uses): Bonds issued - - - - - - Premiums on bonds issued - - - - - - Payment to refunding bond escrow - - - - - - Sale of capital assets - - - - - - Insurance proceeds - - - - - - Transfers in - 8,776 8,776 - - - Transfers out (40,600) (26,168) 14,432 - - - Total other financing sources(uses) (40,600) (17,392) 23,208 - - - Net change in fund balances 189,200 246,564 57,364 (1,155,434) 238,149 1,393,583 Fund balances at beginning of year 398,500 398,500 - 4,250,034 4,250,034 - Fund balances(deficits)at end of year $ 587,700 $ 645,064 $ 57,364 $ 3,094,600 $ 4,488,183 $ 1,393,583 See accompanying independent auditor's report Reconciliation: Net change in fund balance,budgetary basis $ 246,564 $ 238,149 Change in fair value of investments (1,306) (7,101) Ad valorem refunds not budgeted (448) - Advances budgeted as transfers - - Unbudgetedfunds - - Deferred revenues Net change in fund balance,GAAP basis $ 244,810 $ 231,048 110 Tourist Development State Housing Initiativeship (Budgetary Basis) Partnership(Budgetary Basis) Budget Actual Variance Budget Actual Variance $ 14,355,200 $ 16,183,377 $ 1,828,177 $ - $ - $ - 1,000,000 998,842 (1,158) 902,378 1,439,312 536,934 323 323 - - - 234,000 219,559 (14,441) 22,617 7,230 (15,387) 26,000 91,867 65,867 257,975 241,139 (16,836) 15,615,200 17,493,968 1,878,768 1,182,970 1,687,681 504,711 5,171,429 4,352,360 819,069 - - - - - - 2,723,366 1,856,948 866,418 8,914,785 6,984,651 1,930,134 - - - 19,155,468 2,793,727 16,361,741 - 1,162 (1,162) 33,241,682 14,130,738 19,110,944 2,723,366 1,858,110 865,256 (17,626,482) 3,363,230 20,989,712 (1,540,396) (170,429) 1,369,967 300 300 - - - 1,200 - (1,200) - - - 1,318,100 1,831,145 513,045 - - - (2,092,911) (2,451,224) (358,313) - - - (773,611) (619,779) 153,832 - - - (18,400,093) 2,743,451 21,143,544 (1,540,396) (170,429) 1,369,967 44,166,899 44,166,899 - 1,540,396 1,540,396 - $ 25,766,806 $ 46,910,350 $ 21,143,544 $ - $ 1,369,967 $ 1,369,967 $ 2,743,451 $ (170,429) (79,986) (2,655) $ 2,663,465 $ (173,084) 111 COLLIER COUNTY,FLORIDA COMBINING SCHEDULE OF REVENUES, EXPENDITURES AND CHANGES IN FUND BALANCES BUDGET AND ACTUAL(BUDGETARY BASIS) MAJOR CAPITAL PROJECT AND NONMAJOR GOVERNMENTAL FUNDS FOR THE FISCAL YEAR ENDED SEPTEMBER 30,2013 800 MHZ IRCP Fund State Court Administration (Budgetary Basis) (Budgetary Basis) Budget Actual Variance Budget Actual Variance Revenues: Taxes $ - $ - $ - $ - $ - $ - Licenses,permits and impact fees - - - - - - Intergovernmental - - - - - - Chargesforservices 474,400 485,998 11,598 155,000 145,150 (9,850) Fines and forfeitures - - - 1,120,500 990,297 (130,203) Interest income 600 910 310 1,600 2,016 416 Special assessments - - - - - - Miscellaneous 129,000 128,060 (940) - 17,940 17,940 Total revenues 604,000 614,968 10,968 1,277,100 1,155,403 (121,697) Expenditures: Current: General government - - - 974,500 874,112 100,388 Public safety 1,176,500 1,149,026 27,474 1,521,100 1,452,524 68,576 Physical environment - - - - - - Transportation - - - - - - Economic environment - - - - - - Human services - - - - - Culture and recreation - - - - - - Debt service - - - - - - Capital outlay - - - 5,000 1,019 3,981 Total expenditures 1,176,500 1,149,026 27,474 2,500,600 2,327,655 172,945 Excess(deficit)of revenues over(under)expenditures (572,500) (534,058) 38,442 (1,223,500) (1,172,252) 51,248 Other financing sources(uses): Bonds issued - - - - - - Premiums on bonds issued - - - - - - Payment to refunding bond escrow - - - - - - Sale of capital assets - - - - - - Insurance proceeds - - - - - - Transfers in 576,400 576,400 - 1,083,200 1,076,226 (6,974) Transfers out - - - (135,800) (126,375) 9,425 Total other financing sources(uses) 576,400 576,400 - 947,400 949,851 2,451 Net change in fund balances 3,900 42,342 38,442 (276,100) (222,401) 53,699 Fund balances at beginning of year 23,800 23,800 - 334,400 334,400 - Fund balances(deficits)at end of year $ 27,700 $ 66,142 $ 38,442 $ 58,300 $ 111,999 $ 53,699 See accompanying independent auditor's report Reconciliation: Net change in fund balance,budgetary basis $ 42,342 $ (222,401) Change in fair value of investments (411) (723) Ad valorem refunds not budgeted - - Advances budgeted as transfers - - Unbudgetedfunds - - Deferred revenues - Net change in fund balance,GAAP basis $ 41,931 $ (223,124) 112 Confiscated Property GAC Land Sales, (Budgetary Basis) Roads and Canals(Budgetary Basis) Budget Actual Variance Budget Actual Variance $ - $ - $ - $ - $ - $ 51,145 51,145 - - - 3,700 2,106 (1,594) 8,100 6,142 (1,958) - - - 16,500 - (16,500) 3,700 53,251 49,551 24,600 6,142 (18,458) 56,000 56,000 - - - - 311,724 311,040 684 - - 76,500 76,500 - - - 56,000 56,000 - 388,224 387,540 684 (52,300) (2,749) 49,551 (363,624) (381,398) (17,774) (213,000) (70,952) 142,048 - - - (213,000) (70,952) 142,048 - - - (265,300) (73,701) 191,599 (363,624) (381,398) (17,774) - - - 1,154,300 1,154,300 - $ (265,300) $ (73,701) $ 191,599 $ 790,676 $ 772,902 $ (17,774) $ (73,701) $ (381,398) (802) (2,160) $ (74,503) $ (383,558) 113 COLLIER COUNTY,FLORIDA COMBINING SCHEDULE OF REVENUES, EXPENDITURES AND CHANGES IN FUND BALANCES BUDGET AND ACTUAL(BUDGETARY BASIS) MAJOR CAPITAL PROJECT AND NONMAJOR GOVERNMENTAL FUNDS FOR THE FISCAL YEAR ENDED SEPTEMBER 30,2013 Utility Fees Conservation Collier (Budgetary Basis) (Budgetary Basis) Budget Actual Variance Budget Actual Variance Revenues: Taxes $ 240,000 $ 300,838 $ 60,838 $ 9,674,700 $ 9,327,111 $ (347,589) Licenses,permits and impact fees - - - - - - Intergovernmental - - - - - - Charges for services 130,000 134,361 4,361 - 500 500 Fines and forfeitures - - - - - - Interest income - 4,081 4,081 265,800 165,912 (99,888) Special assessments - - - - - - Miscellaneous - - - 5,300 8,088 2,788 Total revenues 370,000 439,280 69,280 9,945,800 9,501,611 (444,189) Expenditures: Current: General government - - - - - - Public safety - - - - - - Physical environment 402,775 356,161 46,614 956,373 674,620 281,753 Transportation - - - - - - Economic environment - - - - - - Human services - - - - - - Culture and recreation - - - - - - Debt service - - - - - Capital outlay 2,325 2,325 - 3,010,294 817,287 2,193,007 Total expenditures 405,100 358,486 46,614 3,966,667 1,491,907 2,474,760 Excess(deficit)of revenues over(under)expenditures (35,100) 80,794 115,894 5,979,133 8,009,704 2,030,571 Other financing sources(uses): Bonds issued - - - - - - Premiums on bonds issued - - - - - - Payment to refunding bond escrow - - - - - - Sale of capital assets - - - - - - Insurance proceeds - - - - - - Transfers in 70,000 70,000 - 11,431,200 11,388,190 (43,010) Transfers out - - - (11,682,545) (11,564,487) 118,058 Total other financing sources(uses) 70,000 70,000 - (251,345) (176,297) 75,048 Net change in fund balances 34,900 150,794 115,894 5,727,788 7,833,407 2,105,619 Fund balances at beginning of year 786,900 786,900 - 28,784,312 28,784,312 - Fund balances(deficits)at end of year $ 821,800 $ 937,694 $ 115,894 $ 34,512,100 $ 36,617,719 $ 2,105,619 See accompanying independent auditor's report Reconciliation: Net change in fund balance,budgetary basis $ 150,794 $ 7,833,407 Change in fair value of investments (1,467) (59,377) Ad valorem refunds not budgeted - (4,881) Advances budgeted as transfers - - Unbudgetedfunds - - Deferred revenues - - Net change in fund balance,GAAP basis $ 149,327 $ 7,769,149 114 Court Information Technology Fee(Budgetary Basis) Court Services Budget Actual Variance Budget Actual Variance $ - $ - $ - $ - $ - $ 6,385,234 6,365,715 (19,519) 600,000 910,580 310,580 1,909,412 2,273,168 363,756 3,200 3,693 493 2,100 4,279 2,179 58 58 - - - 603,200 914,331 311,131 8,296,746 8,643,162 346,416 630,733 529,485 101,248 8,575,794 8,922,210 (346,416) 20,900 16,433 4,467 - - - 6,000 4,818 1,182 - - - 107,767 67,385 40,382 - - - 765,400 618,121 147,279 8,575,794 8,922,210 (346,416) (162,200) 296,210 458,410 (279,048) (279,048) - (162,200) 296,210 458,410 (279,048) (279,048) - 362,700 362,700 - 279,048 279,048 - $ 200,500 $ 658,910 $ 458,410 $ - $ - $ - $ 296,210 $ (279,048) (1,374) - $ 294,836 $ (279,048) 115 COLLIER COUNTY,FLORIDA COMBINING SCHEDULE OF REVENUES, EXPENDITURES AND CHANGES IN FUND BALANCES BUDGET AND ACTUAL(BUDGETARY BASIS) MAJOR CAPITAL PROJECT AND NONMAJOR GOVERNMENTAL FUNDS FOR THE FISCAL YEAR ENDED SEPTEMBER 30,2013 Court Facilities Fee University Extension (Budgetary Basis) Budget Actual Variance Budget Actual Variance Revenues: Taxes $ - $ - $ - $ - $ - $ - Licenses,permits and impact fees - - - - - - Intergovernmental - - - - - - Charges for services 2,300 1,787 (513) - - - Fines and forfeitures - - - 1,090,000 1,107,455 17,455 Interest income - 397 397 15,000 21,736 6,736 Special assessments - - - - - - Miscellaneous 50,631 69,669 19,038 - - - Total revenues 52,931 71,853 18,922 1,105,000 1,129,191 24,191 Expenditures: Current: General government - - - 127,500 35,116 92,384 Public safety - - - - - - Physical environment 42,800 31,268 11,532 - - - Transportation - - - - - - Economic environment - - - - - - Human services - - - - - - Culture and recreation - - - - - - Debt service - - - - - - Capital outlay - - - 1,489,781 63,360 1,426,421 Total expenditures 42,800 31,268 11,532 1,617,281 98,476 1,518,805 Excess(deficit)of revenues over(under)expenditures 10,131 40,585 30,454 (512,281) 1,030,715 1,542,996 Other financing sources(uses): Bonds issued - - - - - - Premiums on bonds issued - - - - - - Payment to refunding bond escrow - - - - - - Sale of capital assets - - - - - - Insurance proceeds - - - - - - Transfers in - - - - - - Transfers out - - - - - - Total other financing sources(uses) - - - - - - Net change in fund balances 10,131 40,585 30,454 (512,281) 1,030,715 1,542,996 Fund balances at beginning of year 47,200 47,200 - 4,072,881 4,072,881 - Fund balances(deficits)at end of year $ 57,331 $ 87,785 $ 30,454 $ 3,560,600 $ 5,103,596 $ 1,542,996 See accompanying independent auditor's report Reconciliation: Net change in fund balance,budgetary basis $ 40,585 $ 1,030,715 Change in fair value of investments (158) (7,785) Ad valorem refunds not budgeted - - Advances budgeted as transfers - - Unbudgeted funds - - Deferred revenues - - Net change in fund balance,GAAP basis $ 40,427 $ 1,022,930 116 Affordable Housing Other Court Special Revenue Funds Budget Actual Variance Budget Actual Variance $ - $ - $ - $ - $ - $ - - - - 1,166,000 1,934,596 768,596 2,689 2,689 8,100 7,539 (561) 2,689 2,689 1,174,100 1,942,135 768,035 - - - 2,186,600 859,793 1,326,807 445,835 445,835 - - - - - - - 408,400 - 408,400 445,835 445,835 - 2,595,000 859,793 1,735,207 (445,835) (443,146) 2,689 (1,420,900) 1,082,342 2,503,242 (445,835) (443,146) 2,689 (1,420,900) 1,082,342 2,503,242 650,509 650,509 - 3,582,382 3,582,382 - $ 204,674 $ 207,363 $ 2,689 $ 2,161,482 $ 4,664,724 $ 2,503,242 $ (443,146) $ 1,082,342 (911) - $ (444,057) $ 1,082,342 117 COLLIER COUNTY,FLORIDA COMBINING SCHEDULE OF REVENUES,EXPENDITURES AND CHANGES IN FUND BALANCES BUDGET AND ACTUAL(BUDGETARY BASIS) MAJOR CAPITAL PROJECT AND NONMAJOR GOVERNMENTAL FUNDS FOR THE FISCAL YEAR ENDED SEPTEMBER 30,2013 Other Special Capital Improvement Revenue Funds(Budgetary Basis) Revenue Bonds(Budgetary Basis) Budget Actual Variance Budget Actual Variance Revenues: Taxes $ - $ - $ - $ - $ - $ - Licenses,permits and impact fees 4,500 5,105 605 - - - Intergovernmental - - - - - - Charges for services 367,500 453,004 85,504 - - - Fines and forfeitures 138,000 151,098 13,098 - - - Interest income 23,300 16,615 (6,685) - 943 943 Special assessments - - - - - - Miscellaneous 95,000 59,569 (35,431) - - - Total revenues 628,300 685,391 57,091 - 943 943 Expenditures: Current: General government 184,580 169,664 14,916 - - - Public safety 727,800 343,851 383,949 - - - Physical environment - - - - - - Transportation - - - - - - Economic environment - - - - - - Human services 179,800 151,187 28,613 - - - Culture and recreation 75,900 35,200 40,700 - - - Debt service - - - 3,308,250 3,298,499 9,751 Capital outlay 475,020 299,457 175,563 - - - Total expenditures 1,643,100 999,359 643,741 3,308,250 3,298,499 9,751 Excess(deficit)of revenues over(under)expenditures (1,014,800) (313,968) 700,832 (3,308,250) (3,297,556) 10,694 Other financing sources(uses): Bonds issued - - - - - - Premiums on bonds issued - - - - - - Payment to refunding bond escrow - - - - - - Sale of capital assets - - - - - - Insurance proceeds - - - - - - Transfers in 47,200 36,112 (11,088) 3,308,250 3,308,988 738 Transfers out - (1,251) (1,251) (10,401,508) (10,401,508) - Total other financing sources(uses) 47,200 34,861 (12,339) (7,093,258) (7,092,520) 738 Net change in fund balances (967,600) (279,107) 688,493 (10,401,508) (10,390,076) 11,432 Fund balances at beginning of year 2,848,700 2,848,700 - 10,401,508 10,401,508 - Fund balances(deficits)at end of year $ 1,881,100 $ 2,569,593 $ 688,493 $ - $ 11,432 $ 11,432 See accompanying independent auditor's report Reconciliation: Net change in fund balance,budgetary basis $ (279,107) $ (10,390,076) Change in fair value of investments (5,994) (189) Ad valorem refunds not budgeted - - Advances budgeted as transfers - 10,391,812 Unbudgeted funds - - Deferred revenues - - Net change in fund balance,GAAP basis $ (285,101) $ 1,547 118 Radio Road East Limited General Conservation Collier Limited General Obligation Bonds(Budgetary Basis) Obligation Bonds(Budgetary Basis) Budget Actual Variance Budget Actual Variance $ 79,300 $ 76,028 $ (3,272) $ 4,975,000 $ 4,802,449 $ (172,551) - 238 238 4,200 3,504 (696) 79,300 76,266 (3,034) 4,979,200 4,805,953 (173,247) 71,300 68,260 3,040 4,930,600 4,925,400 5,200 71,300 68,260 3,040 4,930,600 4,925,400 5,200 8,000 8,006 6 48,600 (119,447) (168,047) 50,000 50,756 756 900,000 834,829 (65,171) (3,900) (956) 2,944 (1,055,800) (969,570) 86,230 46,100 49,800 3,700 (155,800) (134,741) 21,059 54,100 57,806 3,706 (107,200) (254,188) (146,988) 16,400 16,400 - 356,200 356,200 - $ 70,500 $ 74,206 $ 3,706 $ 249,000 $ 102,012 $ (146,988) $ 57,806 $ (254,188) (78) (713) (650) (3,454) $ 57,078 $ (258,355) 119 COLLIER COUNTY,FLORIDA COMBINING SCHEDULE OF REVENUES,EXPENDITURES AND CHANGES IN FUND BALANCES BUDGET AND ACTUAL(BUDGETARY BASIS) MAJOR CAPITAL PROJECT AND NONMAJOR GOVERNMENTAL FUNDS FOR THE FISCAL YEAR ENDED SEPTEMBER 30,2013 Community Redevelopment Forest Lakes Limited General Taxable Note(Budgetary Basis) Obligation Bonds(Budgetary Basis) Budget Actual Variance Budget Actual Variance Revenues: Taxes $ - $ - $ - $ 369,200 $ 357,992 $ (11,208) Licenses,permits and impact fees - - - - - - Intergovernmental - - - - - - Charges for services - - - - - - Fines and forfeitures - - - - - Interest income 10,500 5,620 (4,880) 1,000 1,292 292 Special assessments - - - - - - Miscellaneous - - - - - - Total revenues 10,500 5,620 (4,880) 370,200 359,284 (10,916) Expenditures: Current: General government - - - - - - Public safety - - - - - - Physical environment - - - - - - Transportation - - - - - - Economic environment - - - - - - Human services - - - - - Culture and recreation - - - - - - Debt service 2,697,300 2,630,801 66,499 562,900 561,265 1,635 Capital outlay - - - - - - Total expenditures 2,697,300 2,630,801 66,499 562,900 561,265 1,635 Excess(deficit)of revenues over(under)expenditures (2,686,800) (2,625,181) 61,619 (192,700) (201,981) (9,281) Other financing sources(uses): Bonds issued - - - - - - Premiums on bonds issued - - - - - - Payment to refunding bond escrow - - - - - - Sale of capital assets - - - - - - Insurance proceeds - - - - - - Transfers in 1,494,900 1,494,900 - - 3,770 3,770 Transfers out - - - (15,700) (11,894) 3,806 Total other financing sources(uses) 1,494,900 1,494,900 - (15,700) (8,124) 7,576 Net change in fund balances (1,191,900) (1,130,281) 61,619 (208,400) (210,105) (1,705) Fund balances at beginning of year 1,592,400 1,592,400 - 397,700 .397,700 - Fund balances(deficits)at end of year $ 400,500 $ 462,119 $ 61,619 $ 189,300 $ 187,595 $ (1,705) See accompanying independent auditor's report Reconciliation: Net change in fund balance,budgetary basis $ (1,130,281) $ (210,105) Change in fair value of investments (1,422) (398) Ad valorem refunds not budgeted - - Advances budgeted as transfers - - Unbudgeted funds - - Deferred revenues -Net change in fund balance,GAAP basis $ (1,131,703) $ (210,503) 120 Special Obligation Revenue Bonds(Budgetary Basis) Other Debt Service(Budgetary Basis) Budget Actual Variance Budget Actual Variance $ - $ - $ - $ 1,000 $ 4,118 $ 3,118 3,565 3,565 1,100 7,999 6,899 8,000 - (8,000) - 3,565 3,565 10,100 12,117 2,017 19,129,200 19,069,464 59,736 14,328,500 14,313,460 15,040 19,129,200 19,069,464 59,736 14,328,500 14,313,460 15,040 (19,129,200) (19,065,899) 63,301 (14,318,400) (14,301,343) 17,057 73,805,000 73,805,000 - - - - 2,082,100 2,082,016 (84) - - - (73,746,900) (73,746,911) (11) - - - 20,010,200 20,034,087 23,887 11,734,900 11,734,900 - - (738) (738) (33,100) (55,089) (21,989) 22,150,400 22,173,454 23,054 11,701,800 11,679,811 (21,989) 3,021,200 3,107,555 86,355 (2,616,600) (2,621,532) (4,932) 203,600 203,600 - 2,617,100 2,617,100 - $ 3,224,800 $ 3,311,155 $ 86,355 $ 500 $ (4,432) $ (4,932) $ 3,107,555 $ (2,621,532) (1,819) (47) (1,879) $ 3,105,736 $ (2,623,458) 121 COLLIER COUNTY,FLORIDA COMBINING SCHEDULE OF REVENUES, EXPENDITURES AND CHANGES IN FUND BALANCES BUDGET AND ACTUAL(BUDGETARY BASIS) MAJOR CAPITAL PROJECT AND NONMAJOR GOVERNMENTAL FUNDS FOR THE FISCAL YEAR ENDED SEPTEMBER 30,2013 County Wide Capital Improvememts Parks Improvements (Budgetary Basis) (Budgetary Basis) Budget Actual Variance Budget Actual Variance Revenues: Taxes $ - $ - $ - $ - $ - $ - Licenses,permits and impact fees - - - 412,000 555,019 143,019 Intergovernmental - - - - - - Charges for services - - - 300,000 300,000 - Fines and forfeitures - - - - - - Interest income 60,000 36,965 (23,035) 40,000 53,610 13,610 Special assessments - - - - - - Miscellaneous - 941,440 941,440 1,379,960 267,727 (1,112,233) Total revenues 60,000 978,405 918,405 2,131,960 1,176,356 (955,604) Expenditures: Current: General government 726,497 1,329,393 (602,896) - - - Public safety 305,317 10,719 294,598 - - - Physical environment 61,995 11,945 50,050 - - - Transportation - - - - - - Economic environment - - - - - - Human services - - - - - - Culture and recreation - - - 431,784 531,645 (99,861) Debt service - - - - - - Capital outlay 7,267,293 418,597 6,848,696 11,989,478 3,089,137 8,900,341 Total expenditures 8,361,102 1,770,654 6,590,448 12,421,262 3,620,782 8,800,480 Excess(deficit)of revenues over(under)expenditures (8,301,102) (792,249) 7,508,853 (10,289,302) (2,444,426) 7,844,876 Other financing sources(uses): Bonds issued - - - - - - Premiums on bonds issued - - - - - - Payment to refunding bond escrow - - - - - - Sale of capital assets - - - - - - Insurance proceeds - 9,300 9,300 - - - Transfers in 6,470,300 6,470,300 - 500,000 532,436 32,436 Transfers out (4,312,900) (4,312,900) - (2,616,198) (2,612,045) 4,153 Total other financing sources(uses) 2,157,400 2,166,700 9,300 (2,116,198) (2,079,609) 36,589 Net change in fund balances (6,143,702) 1,374,451 7,518,153 (12,405,500) (4,524,035) 7,881,465 Fund balances at beginning of year 6,946,702 6,946,702 - 12,647,736 12,647,736 - Fund balances(deficits)at end of year $ 803,000 $ 8,321,153 $ 7,518,153 $ 242,236 $ 8,123,701 $ 7,881,465 See accompanying independent auditor's report Reconciliation: Net change in fund balance,budgetary basis $ 1,374,451 $ (4,524,035) Change in fair value of investments (14,185) (19,199) Ad valorem refunds not budgeted - - Advances budgeted as transfers 4,312,900 (500,000) Unbudgeted funds - - Deferred revenues - Net change in fund balance,GAAP basis $ 5,673,166 $ (5,043,234) 122 County-Wide Library Correctional Facilities Impact Fees(Budgetary Basis) Impact Fees(Budgetary Basis) Budget Actual Variance Budget Actual Variance $ - $ - $ - $ - $ - $ 340,000 633,332 293,332 500,000 1,089,677 589,677 13,000 5,210 (7,790) 8,000 7,384 (616) 353,000 638,542 285,542 508,000 1,097,061 589,061 - - - 226,470 35,097 191,373 139,690 35,320 104,370 - - - 132,780 118,754 14,026 - - - 272,470 154,074 118,396 226,470 35,097 191,373 80,530 484,468 403,938 281,530 1,061,964 780,434 162,500 162,500 - 560,800 560,800 - (1,164,200) (1,164,200) - (1,892,477) (1,892,477) - (1,001,700) (1,001,700) - (1,331,677) (1,331,677) - (921,170) (517,232) 403,938 (1,050,147) (269,713) 780,434 - - - 1,842,970 1,842,970 - $ (921,170) $ (517,232) $ 403,938 $ 792,823 $ 1,573,257 $ 780,434 $ (517,232) $ (269,713) (2,001) (2,791) (162,500) (560,800) $ (681,733) $ (833,304) 123 COLLIER COUNTY,FLORIDA COMBINING SCHEDULE OF REVENUES, EXPENDITURES AND CHANGES IN FUND BALANCES BUDGET AND ACTUAL(BUDGETARY BASIS) MAJOR CAPITAL PROJECT AND NONMAJOR GOVERNMENTAL FUNDS FOR THE FISCAL YEAR ENDED SEPTEMBER 30,2013 Emergency Medical Services Water Management Impact Fees(Budgetary Basis) (Budgetary Basis) Budget Actual Variance Budget Actual Variance Revenues: Taxes $ - $ - $ - $ - $ - $ - Licenses,permits and impact fees 125,000 255,703 130,703 324,400 - (324,400) Intergovernmental - - - 1,000,000 1,000,000 - Chargesforservices - - - - - - Fines and forfeitures - - - - - - Interest income 2,500 1,989 (511) 58,700 68,748 10,048 Special assessments - - - - 312,715 312,715 Miscellaneous - - - - 17,995 17,995 Total revenues 127,500 257,692 130,192 1,383,100 1,399,458 16,358 Expenditures: Current: General government - - - - - - Public safety 145,373 4,466 140,907 - - - Physical environment - - - 3,493,522 704,060 2,789,462 Transportation - - - - - - Economic environment - - - - - - Human services - - - - - - Culture and recreation - - - - - - Debt service - - - - - - Capital outlay 3,678 - 3,678 15,129,382 4,745,680 10,383,702 Total expenditures 149,051 4,466 144,585 18,622,904 5,449,740 13,173,164 Excess(deficit)of revenues over(under)expenditures (21,551) 253,226 274,777 (17,239,804) (4,050,282) 13,189,522 Other financing sources(uses): Bonds issued - - - - - - Premiums on bonds issued - - - - - - Payment to refunding bond escrow - - - - - - Sale of capital assets - - - - - - Insurance proceeds - - - - -Transfers in 287,600 287,600 - 4,817,400 4,819,794 2,394 Transfers out (447,454) (447,454) - (1,154,595) (880,083) 274,512 Total other financing sources(uses) (159,854) (159,854) - 3,662,805 3,939,711 276,906 Net change in fund balances (181,405) 93,372 274,777 (13,576,999) (110,571) 13,466,428 Fund balances at beginning of year 368,251 368,251 - 13,783,335 13,783,335 - Fund balances(deficits)at end of year $ 186,846 $ 461,623 $ 274,777 $ 206,336 $ 13,672,764 $ 13,466,428 See accompanying independent auditor's report Reconciliation: Net change in fund balance,budgetary basis $ 93,372 $ (110,571) Change in fair value of investments (727) (24,188) Ad valorem refunds not budgeted - - Advances budgeted as transfers (287,600) - Unbudgeted funds - - Deferred revenues - - Net change in fund balance,GAAP basis $ (194,955) $ (134,759) 124 Parks Impact Districts Road Impact Districts (Budgetary Basis) (Budgetary Basis) Budget Actual Variance Budget Actual Variance $ - $ - $ - $ - $ - $ 2,250,000 6,232,882 3,982,882 4,500,000 6,458,955 1,958,955 52,585 52,585 3,600,000 3,518,038 (81,962) 52,900 62,253 9,353 406,000 228,400 (177,600) - - - - 5,702 5,702 2,302,900 6,347,720 4,044,820 8,506,000 10,211,095 1,705,095 - - - 4,457,676 495,893 3,961,783 509,585 329,885 179,700 - - - 3,506,488 823,326 2,683,162 36,662,739 16,622,880 20,039,859 4,016,073 1,153,211 2,862,862 41,120,415 17,118,773 24,001,642 (1,713,173) 5,194,509 6,907,682 (32,614,415) (6,907,678) 25,706,737 (2,674,207) (2,674,207) - (6,807,700) - 6,807,700 (2,674,207) (2,674,207) - (6,807,700) - 6,807,700 (4,387,380) 2,520,302 6,907,682 (39,422,115) (6,907,678) 32,514,437 11,876,351 11,876,351 - 47,894,610 47,894,610 - $ 7,488,971 $ 14,396,653 $ 6,907,682 $ 8,472,495 $ 40,986,932 $ 32,514,437 $ 2,520,302 $ (6,907,678) (22,692) (79,682) $ 2,497,610 $ (6,987,360) 125 COLLIER COUNTY,FLORIDA COMBINING SCHEDULE OF REVENUES, EXPENDITURES AND CHANGES IN FUND BALANCES BUDGET AND ACTUAL(BUDGETARY BASIS) MAJOR CAPITAL PROJECT AND NONMAJOR GOVERNMENTAL FUNDS FOR THE FISCAL YEAR ENDED SEPTEMBER 30,2013 Road Construction Law Enforcement Impact Fees (Budgetary Basis) (Budgetary Basis) Budget Actual Variance Budget Actual Variance Revenues: Taxes $ 12,792,000 $ 12,620,538 $ (171,462) $ - $ - $ - Licenses,permits and impact fees - - - 400,000 895,435 495,435 Intergovernmental 9,919,500 10,457,383 537,883 - - - Chargesforservices 223,195 428,729 205,534 - - - Fines and forfeitures - - - - - - Interest income 302,900 178,271 (124,629) 12,900 8,213 (4,687) Special assessments - - - - - - Miscellaneous 672,600 214,974 (457,626) - - - Total revenues 23,910,195 23,899,895 (10,300) 412,900 903,648 490,748 Expenditures: Current: General government 6,737,265 7,436,874 (699,609) - - - Public safety - - - 162,511 4,281 158,230 Physical environment - - - - - - Transportation - - - - - - Economic environment - - - - - - Human services - - - - - - Culture and recreation - - - - - - Debt service - - - - - - Capital outlay 49,770,697 15,669,677 34,101,020 - - - Total expenditures 56,507,962 23,106,551 33,401,411 162,511 4,281 158,230 Excess(deficit)of revenues over(under)expenditures (32,597,767) 793,344 33,391,111 250,389 899,367 648,978 Other financing sources(uses): Bonds issued - - - - - - Premiums on bonds issued - - - - - - Payment to refunding bond escrow - - - - - - Sale of capital assets - - - - - - Insurance proceeds - - - - - - Transfers in 13,797,200 11,768,205 (2,028,995) 1,700,000 1,700,000 - Transfers out (18,567,880) (17,617,647) 950,233 (2,657,251) (2,657,251) - Total other financing sources(uses) (4,770,680) (5,849,442) (1,078,762) (957,251) (957,251) - Net change in fund balances (37,368,447) (5,056,098) 32,312,349 (706,862) (57,884) 648,978 Fund balances at beginning of year 41,583,415 41,583,415 - - - - Fund balances(deficits)at end of year $ 4,214,968 $ 36,527,317 $ 32,312,349 $ (706,862) $ (57,884) $ 648,978 See accompanying independent auditor's report Reconciliation: Net change in fund balance,budgetary basis $ (5,056,098) $ (57,884) Change in fair value of investments (68,965) (3,073) Ad valorem refunds not budgeted - - Advances budgeted as transfers - (1,700,000) Unbudgeted funds - - Deferred revenues - - Net change in fund balance,GAAP basis $ (5,125,063) $ (1,760,957) 126 Other Capital Projects (Budgetary Basis) Budget Actual Variance $ - S - $ 2,000 2,052 52 7,600 7,714 114 134,400 130,526 (3,874) 3 3 144,000 140,295 (3,705) 249,500 174,500 75,000 3,853 - 3,853 1,728,968 1,498,553 230,415 15,795 (15,795) 248,386 141,228 107,158 2,230,707 1,830,076 400,631 (2,086,707) (1,689,781) 396,926 1,536,700 1,537,691 991 (6,900) (4,592) 2,308 1,529,800 1,533,099 3,299 (556,907) (156,682) 400,225 1,565,425 1,565,425 - $ 1,008,518 $ 1,408,743 $ 400,225 $ (156,682) (3,079) $ (159,761) 127 THIS PAGE INTENTIONALLY LEFT BLANK Nonmajor Enterprise Funds EMERGENCY MEDICAL SERVICES — To account for the provision of emergency ambulance and paramedical services to users throughout the County. GOODLAND WATER — To account for the provision of potable water services to residents of Goodland. AIRPORT AUTHORITY—To account for the provision of landing facilities and the sale of fuel at the airports. COLLIER AREA TRANSIT — To account for the provision of public transportation throughout the County. COLLIER COUNTY,FLORIDA COMBINING STATEMENT OF NET POSITION NONMAJOR ENTERPRISE FUNDS SEPTEMBER 30,2013 Total Emergency Collier Nonmajor Medical Airport Area Enterprise Services Authority Transit Funds ASSETS Current assets: Cash,cash equivalents and investments $ 3,547,950 $ 172,237 $ 1,580,057 $ 5,300,244 Receivables: Trade,net 4,226,520 127,934 2,351 4,356,805 Interest 4,618 342 1,881 6,841 Unbilled revenue 1,731 - - 1,731 Due from other funds - - 36,694 36,694 Due from other governments 494 - - 494 Inventory 9,580 162,606 - 172,186 Restricted assets: Cash,cash equivalents and investments 99,619 16,572 509,793 625,984 Due from other governments - 443,023 3,054,151 3,497,174 Total current assets 7,890,512 922,714 5,184,927 13,998,153 Noncurrent assets: Capital assets: Land and nondepreciable capital assets - 3,450,361 6,371,291 9,821,652 Depreciable capital assets,net 4,769,918 18,620,072 13,925,117 37,315,107 Total noncurrent assets 4,769,918 22,070,433 20,296,408 47,136,759 Total assets 12,660,430 22,993,147 25,481,335 61,134,912 LIABILITIES Current liabilities: Accounts payable 29,124 113,930 264,620 407,674 Wages payable 893,816 54,951 11,417 960,184 Due to other funds - - 2,609,410 2,609,410 Due to other governments 761,092 9,106 77,494 847,692 Due to individuals 382,483 - - 382,483 Compensated absences 596,305 36,762 5,608 638,675 Capital lease obligations 39,651 - - 39,651 Liabilities payable from restricted assets: Accounts payable - 7,862 323,383 331,245 Retainage payable - - 183,934 183,934 Refundable deposits - 16,572 - 16,572 Unearned revenue 99,619 76,756 - 176,375 Total current liabilities 2,802,090 315,939 3,475,866 6,593,895 Noncurrent liabilities: Compensated absences 149,076 9,190 1,402 159,668 Total noncurrent liabilities 149,076 9,190 1,402 159,668 Total liabilities 2,951,166 325,129 3,477,268 6,753,563 NET POSITION Net investment in capital assets 4,730,267 22,070,433 20,112,474 46,913,174 Unrestricted 4,978,997 597,585 1,891,593 7,468,175 Total net position $ 9,709,264 $ 22,668,018 $ 22,004,067 $ 54,381,349 See accompanying independent auditor's report 130 COLLIER COUNTY,FLORIDA COMBINING STATEMENT OF REVENUES,EXPENSES AND CHANGES IN NET POSITION NONMAJOR ENTERPRISE FUNDS FOR THE FISCAL YEAR ENDED SEPTEMBER 30,2013 Total Emergency Collier Nonmajor Medical Goodland Airport Area Enterprise Services Water Authority Transit Funds Operating revenues: Charges for services $ 10,207,585 $ 47,431 $ 2,991,397 $ 1,431,963 $ 14,678,376 Miscellaneous 127,726 106 29,398 18,214 175,444 Total operating revenues 10,335,311 47,537 3,020,795 1,450,177 14,853,820 Operating expenses: Personal services 17,846,178 - 1,081,730 218,948 19,146,856 Operating 3,147,519 53,397 2,500,083 8,467,226 14,168,225 Depreciation 683,652 18,984 869,522 1,384,114 2,956,272 Total operating expenses 21,677,349 72,381 4,451,335 10,070,288 36,271,353 Operating loss (11,342,038) (24,844) (1,430,540) (8,620,111) (21,417,533) Non-operating revenues(expenses): Operating grants and contributions 169,440 - - 3,576,436 3,745,876 Interest income 27,410 227 1,993 3,075 32,705 Insurance reimbursement 6,863 - 2,341 10,774 19,978 Interest expense (5,491) - - - (5,491) Gain(loss)on disposal of capital assets 18,878 (720,714) (1,741) 19,527 (684,050) Total non-operating revenues(expenses) 217,100 (720,487) 2,593 3,609,812 3,109,018 Loss before contributions and transfers (11,124,938) (745,331) (1,427,947) (5,010,299) (18,308,515) Capital grants and contributions - - 1,739,982 3,619,380 5,359,362 Transfers in 12,133,100 - 527,800 5,458,841 18,119,741 Transfers out (3,000) (221,465) - - (224,465) Total transfers and contributions 12,130,100 (221,465) 2,267,782 9,078,221 23,254,638 Changes in net position 1,005,162 (966,796) 839,835 4,067,922 4,946,123 Net position-beginning 8,704,102 966,796 21,828,183 17,936,145 49,435,226 Net position-ending $ 9,709,264 $ - $ 22,668,018 $ 22,004,067 $ 54,381,349 See accompanying independent auditor's report 131 COLLIER COUNTY,FLORIDA COMBINING STATEMENT OF CASH FLOWS NONMAJOR ENTERPRISE FUNDS FOR THE FISCAL YEAR ENDED SEPTEMBER 30,2013 Total Emergency Collier Nonmajor Medical Goodland Airport Area Enterprise Services Water Authority Transit Funds Cash flows from operating activities: Cash received for services $ 10,072,519 $ 73,577 $ 2,913,807 $ 1,440,633 $ 14,500,536 Cash payments for goods and services (1,770,464) (48,885) (2,035,726) (6,131,560) (9,986,635) Cash payments to employees (17,150,964) - (1,052,972) (208,538) (18,412,474) Cash payments for interfund services (1,476,992) (5,125) (411,524) (2,614,276) (4,507,917) Cash payments on refundable deposits - - (792) - (792) Net cash used for operating activities (10,325,901) 19,567 (587,207) (7,513,741) (18,407,282) Cash flows from non-capital financing activities: Cash received from operating grants 89,895 - - 5,149,758 5,239,653 Cash transfers from other funds 12,133,100 - 527,800 15,693,479 28,354,379 Cash transfers to other funds (3,000) (215,932) - (9,794,721) (10,013,653) Net cash provided by(used for)non-capital financing activities 12,219,995 (215,932) 527,800 11,048,516 23,580,379 Cash flows from capital and related financing activities: Receipts from insurance reimbursements 6,863 - 2,341 10,774 19,978 Proceeds from disposal of capital assets 20,127 - - 42,502 62,629 Proceeds from capital grants - - 1,224,793 2,735,191 3,959,984 Payments for capital acquisitions (887,110) - (1,872,933) (4,442,481) (7,202,524) Principal payments on leases (134,914) - - - (134,914) Interest and fiscal agent fees paid (5,491) - - - (5,491) Net cash used for capital and related financing activities (1,000,525) - (645,799) (1,654,014) (3,300,338) Cash flows from investing activities: Interest on investments 26,097 434 2,549 1,548 30,628 Net cash provided by investing activities 26,097 434 2,549 1,548 30,628 Net increase(decrease)in cash,cash equivalents and investments 919,666 (195,931) (702,657) 1,882,309 1,903,387 Cash,cash equivalents and investments,October 1,2012 2,727,903 195,931 891,466 207,541 4,022,841 Cash,cash equivalents and investments,September 30,2013 $ 3,647,569 $ - $ 188,809 $ 2,089,850 $ 5,926,228 Cash,cash equivalents and investments $ 3,547,950 $ - $ 172,237 $ 1,580,057 $ 5,300,244 Cash,cash equivalents and investments-restricted 99,619 - 16,572 509,793 625,984 Cash,cash equivalents and investments,September 30,2013 $ 3,647,569 $ - $ 188,809 $ 2,089,850 $ 5,926,228 Operating loss $ (11,342,038) $ (24,844) $ (1,430,540) $ (8,620,111) $ (21,417,533) Adjustments to reconcile operating loss to net cash provided by(used for)operating activities: Depreciation expense 683,652 18,984 869,522 1,384,114 2,956,272 Net changes in assets and liabilities: Trade receivable (271,513) 26,040 (102,865) (2,144) (350,482) Due from other funds - - 1,529 (3,384) (1,855) Due from other governments 3,532 - - - 3,532 Inventory 8,173 - (41,706) - (33,533) Accounts payable (108,053) (613) 93,010 (278,610) (294,266) Wages payable 628,928 - 40,378 9,385 678,691 Due to other funds (82) - - - (82) Due to other governments - - 2,110 (4,016) (1,906) Due to individuals 5,214 - - - 5,214 Compensated absences 66,286 - (11,620) 1,025 55,691 Refundable deposits - - (792) - (792) Unearned revenue - - (6,233) - (6,233) Total adjustments 1,016,137 44,411 843,333 1,106,370 3,010,251 Net cash provided by(used for)operating activities $ (10,325,901) $ 19,567 $ (587,207) $ (7,513,741) $ (18,407,282) Non-cash investing,capital and financing activities: Change in fair value of investments $ (7,363) $ - $ (1,215) $ (1,955) $ (10,533) Contributed capital assets 820 - 197,025 897,492 1,095,337 See accompanying independent auditor's report 132 Internal Service Funds SELF-INSURANCE — To account for the self-insurance costs of providing coverage for property, general and vehicle liability. To account for the provisions of health benefits to Board and participating constitutional officer employees and their dependents. To account for payment of workers' compensation claims, in lieu of insurance. SHERIFF'S SELF-INSURANCE — To account for the provisions of health benefits to Sheriff employees and their dependents. To account for payment of workers' compensation claims, in lieu of insurance. FLEET MANAGEMENT — To account for fuel, oil, lubricants, repairs and maintenance of County vehicles and the use of certain County owned vehicles by County employees. INFORMATION TECHNOLOGY—To account for the costs of operating the County data processing facility and telephone communication system. COLLIER COUNTY, FLORIDA COMBINING STATEMENT OF NET POSITION INTERNAL SERVICE FUNDS SEPTEMBER 30,2013 Sheriff's Self- Self- Fleet Information Insurance Insurance Management Technology Total ASSETS Current assets: Cash,cash equivalents and investments $ 28,633,661 $ 14,761,157 $ 534,419 $ 2,526,367 $ 46,455,604 Receivables: Trade,net 441,151 1,747 5,814 - 448,712 Interest 31,936 - 409 2,929 35,274 Due from other funds 16,816 - 68,230 - 85,046 Due from other governments - - 51,210 - 51,210 Deposits 51,108 - - - 51,108 Inventory 1,948 - 824,236 16,932 843,116 Total current assets 29,176,620 14,762,904 1,484,318 2,546,228 47,970,070 Noncurrent assets: Capital assets: Depreciable capital assets,net 256,994 - 11,676,466 5,915,057 17,848,517 Total noncurrent assets 256,994 - 11,676,466 5,915,057 17,848,517 Total assets 29,433,614 14,762,904 13,160,784 8,461,285 65,818,587 LIABILITIES Current liabilities: Accounts payable 104,933 - 120,066 91,833 316,832 Wages payable 54,429 - 97,106 175,868 327,403 Due to other funds 2 1,940,588 5,814 - 1,946,404 Due to other governments - - 31,974 - 31,974 Self-insurance claims payable 2,997,641 3,600,000 - - 6,597,641 Compensated absences 103,454 - 116,830 207,002 427,286 Total current liabilities 3,260,459 5,540,588 371,790 474,703 9,647,540 Noncurrent liabilities: Self-insurance claims payable 1,531,237 - - - 1,531,237 Compensated absences 25,864 - 29,208 51,751 106,823 Net pension obligation 833,913 1,344,917 - - 2,178,830 Total noncurrent liabilities 2,391,014 1,344,917 29,208 51,751 3,816,890 Total liabilities 5,651,473 6,885,505 400,998 526,454 13,464,430 NET POSITION Net Investment in capital assets 256,994 - 11,676,466 5,915,057 17,848,517 Unrestricted 23,525,147 7,877,399 1,083,320 2,019,774 34,505,640 Total net position $ 23,782,141 $ 7,877,399 $ 12,759,786 $ 7,934,831 $ 52,354,157 See accompanying independent auditor's report 134 COLLIER COUNTY, FLORIDA COMBINING STATEMENT OF REVENUES, EXPENSES AND CHANGES IN FUND NET POSITION INTERNAL SERVICE FUNDS FOR THE FISCAL YEAR ENDED SEPTEMBER 30,2013 Sheriffs Self- Self- Fleet Information Insurance Insurance Management Technology Total Operating revenues: Charges for services $ 42,555,045 $ 14,832,087 $ 9,255,285 $ 5,322,102 $ 71,964,519 Miscellaneous 11,388 - 10,179 26 21,593 Total operating revenues 42,566,433 14,832,087 9,265,464 5,322,128 71,986,112 Operating expenses: Personal services 1,081,445 - 2,037,280 3,315,574 6,434,299 Operating 38,539,682 19,428,999 6,900,840 1,970,984 66,840,505 Depreciation 25,051 - 561,615 1,206,894 1,793,560 Total operating expenses 39,646,178 19,428,999 9,499,735 6,493,452 75,068,364 Operating income(loss) 2,920,255 (4,596,912) (234,271) (1,171,324) (3,082,252) Non-operating revenues(expenses): Interest income 81,009 2,468 1,468 7,091 92,036 Insurance reimbursement 1,972,146 - 195 - 1,972,341 Loss on disposal of capital assets (2,757) - (12,421) (2,305) (17,483) Total non-operating revenues(expenses) 2,050,398 2,468 (10,758) 4,786 2,046,894 Income(loss)before contributions 4,970,653 (4,594,444) (245,029) (1,166,538) (1,035,358) Capital grants and contributions - - 3,686 - 3,686 Transfers out (926,600) - - - (926,600) Change in net position 4,044,053 (4,594,444) (241,343) (1,166,538) (1,958,272) Net position-beginning 19,738,088 12,471,843 13,001,129 9,101,369 54,312,429 Net position-ending $ 23,782,141 $ 7,877,399 $ 12,759,786 $ 7,934,831 $ 52,354,157 See accompanying independent auditor's report 135 COLLIER COUNTY,FLORIDA COMBINING STATEMENT OF CASH FLOWS INTERNAL SERVICE FUNDS FOR THE FISCAL YEAR ENDED SEPTEMBER 30,2013 Sheriff's Self- Self- Fleet Information Insurance Insurance Management Technology Total Cash flows from operating activities: Cash received from other funds for services $ 37,301,758 $16,600,000 $ 8,753,956 $ 5,353,472 $ 68,009,186 Cash received from employees for services 5,381,573 - - - 5,381,573 Cash received from other governments for services - - 436,686 - 436,686 Cash received from retirees for services 532,230 672,675 - - 1,204,905 Cash payments on behalf of retirees (541,199) - - - (541,199) Cash payments for goods and services (38,613,348) (17,873,967) (6,963,166) (1,983,443) (65,433,924) Cash payments to employees (1,024,051) - (1,967,832) (3,157,414) (6,149,297) Cash payments for interfund services (447,748) - (308,669) (53,402) (809,819) Net cash provided by(used for)operating activities 2,589,215 (601,292) (49,025) 159,213 2,098,111 Cash flows from non-capital financing activities: Cash transfers to other funds (926,600) - - - (926,600) Net cash used for non-capital financing activities (926,600) - - - (926,600) Cash flows from capital and related financing activities: Receipts from insurance reimbursements 1,898,728 - 195 - 1,898,923 Proceeds from disposal of capital assets - - 6,349 - 6,349 Payments for capital acquisitions - - (144,402) (141,916) (286,318) Net cash provided by(used for)capital and related financing activities 1,898,728 - (137,858) (141,916) 1,618,954 Cash flows from investing activities: Interest on investments 72,403 2,468 1,487 6,583 82,941 Net cash provided by(used for)investing activities 72,403 2,468 1,487 6,583 82,941 Net increase(decrease)in cash,cash equivalents and 3,633,746 (598,824) (185,396) 23,880 2,873,406 Cash,cash equivalents and investments,October 1,2012 24,999,915 15,359,981 719,815 2,502,487 43,582,198 Cash,cash equivalents and investments,September 30,2013 $ 28,633,661 $14,761,157 $ 534,419 $ 2,526,367 $ 46,455,604 Operating income(loss) $ 2,920,255 $(4,596,912) $ (234,271) $ (1,171,324) $ (3,082,252) Adjustments to reconcile operating income(loss)to net cash provided(used for)by operating activities: Depreciation expense 25,051 - 561,615 1,206,894 1,793,560 Net changes in assets and liabilities: Trade receivable (271,453) (1,747) 4,226 31,300 (237,674) Due from other funds 117,293 2,440,588 (68,125) 91,550 2,581,306 Due from other governments - - (10,923) - (10,923) Deposits 262,484 - - - 262,484 Inventory (1,948) - 44,307 (16,932) 25,427 Accounts payable (171,413) - (453,090) (48,929) (673,432) Wages payable 38,149 - 65,017 124,470 227,636 Due to other funds (393) - 5,814 (91,506) (86,085) Due to other governments - - 31,974 - 31,974 Compensated absences 19,245 - 4,431 33,690 57,366 Self-insurance claims payable (531,898) 1,260,000 - - 728,102 Net pension obligation 183,843 296,779 - - 480,622 Total adjustments (331,040) 3,995,620 185,246 1,330,537 5,180,363 Net cash provided by(used for)operating activities $ 2,589,215 $ (601,292) $ (49,025) $ 159,213 $ 2,098,111 Non-cash investing,capital and financing activities: Change in fair value of investments $ (50,961) $ - $ (742) $ (4,456) $ (56,159) Contributed capital assets - - 3,686 - 3,686 See accompanying independent auditor's report 136 Fiduciary Funds CLERK OF COURTS AGENCY FUND—To account for monies held in Trust by the Clerk of the Circuit Court prior to disbursement. SHERIFF AGENCY FUND—To account for monies held in a custodial capacity by the Sheriff. TAX COLLECTOR AGENCY FUND —To account for assets held by the Tax Collector prior to legal disbursement. DEPOSITS AGENCY FUND — To account for monies held by the County for businesses and individuals. PINE RIDGE AND NAPLES PRODUCTION PARK AGENCY FUND — To account for the receipt of special assessments and the payment of principal and interest on behalf of assessment holders. ICI COLLIER COUNTY,FLORIDA COMBINING STATEMENT OF FIDUCIARY NET POSITION AGENCY FUNDS SEPTEMBER 30,2013 Pine Ridge Clerk Tax and Naples of Courts Sheriff Collector Deposits Production Park Agency Fund Agency Fund Agency Fund Agency Fund Agency Fund Total ASSETS Cash,cash equivalents and investments $28,029,618 $ 631,218 $ 6,178,291 $ 3,578,407 $ 1,814,654 $40,232,188 Receivables: Interest - - - 3,559 1,855 5,414 Other - 16,453 18,314 - 5,444 40,211 Total assets $28,029,618 $ 647,671 $ 6,196,605 $ 3,581,966 $ 1,821,953 $40,277,813 LIABILITIES Due to other governments $ 1,308,003 $ 63,765 $ 6,063,890 $ - $ - $ 7,435,658 Due to individuals - 583,906 132,715 - - 716,621 Refundable deposits 26,721,615 - - 3,581,966 - 30,303,581 Due to special assessment holders - - - - 1,821,953 1,821,953 Total liabilities $28,029,618 $ 647,671 $ 6,196,605 $ 3,581,966 $ 1,821,953 $40,277,813 See accompanying independent auditor's report 138 COLLIER COUNTY,FLORIDA COMBINING STATEMENT OF CHANGES IN FIDUCIARY NET POSITION ALL AGENCY FUNDS FOR THE FISCAL YEAR ENDED SEPTEMBER 30,2013 Balance Balance October 1 Additions Deductions September 30 Clerk of Courts Agency Fund Assets: Cash,cash equivalents and investments $ 21,872,332 $ 199,770,228 $ 193,612,942 $ 28,029,618 Total assets $ 21,872,332 $ 199,770,228 $ 193,612,942 $ 28,029,618 Liabilities: Due to other governments $ 996,765 $ 12,561,347 $ 12,250,109 $ 1,308,003 Refundable deposits 20,875,567 187,208,881 181,362,833 26,721,615 Total liabilities $ 21,872,332 $ 199,770,228 $ 193,612,942 $ 28,029,618 Sheriff Agency Fund Assets: Cash,cash equivalents and investments $ 476,968 $ 3,812,446 $ 3,658,196 $ 631,218 Receivable: Other 20,637 16,453 20,637 16,453 Total assets $ 497,605 $ 3,828,899 $ 3,678,833 $ 647,671 Liabilities: Due to other governments $ 70,101 $ 63,765 $ 70,101 $ 63,765 Due to individuals 427,504 583,906 427,504 583,906 Total liabilities $ 497,605 $ 647,671 $ 497,605 $ 647,671 Tax Collector Agency Fund Assets: Cash,cash equivalents and investments $ 5,660,404 $ 818,920,874 $ 818,402,987 $ 6,178,291 Receivable: Other 15,004 2,008,904 2,005,594 18,314 Total assets $ 5,675,408 $ 820,929,778 $ 820,408,581 $ 6,196,605 Liabilities: Due to other governments $ 5,462,210 $ 996,100,545 $ 995,498,865 $ 6,063,890 Due to individuals 213,198 23,804,344 23,884,827 132,715 Total liabilities $ 5,675,408 $ 1,019,904,889 $ 1,019,383,692 $ 6,196,605 Deposits Agency Fund Assets: Cash,cash equivalents and investments $ 3,197,324 $ 641,638 $ 260,555 $ 3,578,407 Receivables: Interest 2,798 3,559 2,798 3,559 Total assets $ 3,200,122 $ 645,197 $ 263,353 $ 3,581,966 Liabilities: Refundable deposits $ 3,200,122 $ 636,619 $ 254,775 $ 3,581,966 Total liabilities $ 3,200,122 $ 636,619 $ 254,775 $ 3,581,966 (Continued) 139 COLLIER COUNTY,FLORIDA COMBINING STATEMENT OF CHANGES IN FIDUCIARY NET POSITION ALL AGENCY FUNDS FOR THE FISCAL YEAR ENDED SEPTEMBER 30,2013 Balance Balance October 1 Additions Deductions September 30 Pine Ridge and Naples Production Park Agency Assets: Cash,cash equivalents and investments $ 1,118,960 $ 710,215 $ 14,521 $ 1,814,654 Receivables: Interest 983 1,855 983 1,855 Other 5,832 5,444 5,832 5,444 Total assets $ 1,125,775 $ 717,514 $ 21,336 $ 1,821,953 Liabilities: Due to special assessment holders $ 1,125,775 $ 717,514 $ 21,336 $ 1,821,953 Total liabilities $ 1,125,775 $ 717,514 $ 21,336 $ 1,821,953 Total -All Agency Funds Assets: Cash,cash equivalents and investments $ 32,325,988 $ 1,023,855,401 $ 1,015,949,201 $ 40,232,188 Receivables: Interest 3,781 5,414 3,781 5,414 Other 41,473 2,030,801 2,032,063 40,211 Total assets $ 32,371,242 $ 1,025,891,616 $ 1,017,985,045 $ 40,277,813 Liabilities: Due to other governments $ 6,529,076 $ 1,008,725,657 $ 1,007,819,075 $ 7,435,658 Due to individuals 640,702 24,388,250 24,312,331 716,621 Refundable deposits 24,075,689 187,845,500 181,617,608 30,303,581 Due to special assessment holders 1,125,775 717,514 21,336 1,821,953 Total liabilities $ 32,371,242 $ 1,221,676,921 $ 1,213,770,350 $ 40,277,813 See accompanying independent auditor's report 140 Component Units COLLIER COUNTY HOUSING FINANCE AUTHORITY — The authority was established for the purpose of stimulating the construction of residential housing for low and moderate income families through the use of public financing. COLLIER COUNTY HEALTH FACILITIES AUTHORITY — The authority was established for the purpose of assisting health facilities in the acquisition, construction and financing of projects within the County. COLLIER COUNTY INDUSTRIAL DEVELOPMENT AUTHORITY — The authority was established for the purpose of facilitating projects that promote economic growth and opportunities for employment in Collier County. COLLIER COUNTY EDUCATIONAL FACILITIES AUTHORITY—The authority was established for the purpose of assisting institutions of higher education in the construction, financing and refinancing of projects. COLLIER COUNTY, FLORIDA COMPONENT UNITS COMBINING STATEMENT OF NET POSITION SEPTEMBER 30,2013 Housing Health Industrial Educational Finance Facilities Development Facilities Authority Authority Authority Authority Totals ASSETS Cash,cash equivalents and investments $ 284,114 $ 17,674 $ 22,534 $ 52,028 $ 376,350 Total Assets $ 284,114 $ 17,674 $ 22,534 $ 52,028 $ 376,350 NET POSITION Net position-unrestricted $ 284,114 $ 17,674 $ 22,534 $ 52,028 $ 376,350 Total Net Position $ 284,114 $ 17,674 $ 22,534 $ 52,028 $ 376,350 See accompanying independent auditor's report 142 COLLIER COUNTY,FLORIDA COMPONENT UNITS COMBINING STATEMENT OF ACTIVITIES FOR THE FISCAL YEAR ENDED SEPTEMBER 30,2013 Net(Expense) Pro ram Revenues Revenue and Changes in Net Position FUNCTIONS/PROGRAMS Fees,Fines and Ex enses Charges for Services Governmental Housing Finance Authority Activities $ 25 $ - Health Facilities Authority - Industrial Development Authority 2,275 $ (25) Educational Facilities Authority (2,275) 2,500 Total 35 9,522 49,487 2,500 $ 8 2,335 $ 52,022 49,687 General revenues: Interest income Total general revenues Change in net position 145 Net position- 145 beginning 49,832 begin Net position-ending $ 326,518 376,350 See accompanying independent auditor's report 143 THIS PAGE INTENTIONALLY LEFT BLANK STATISTICAL SECTION (UNAUDITED) Statistical schedules differ from financial statements because they usually cover more than one fiscal year and may present non-accounting data.These schedules reflect social and economic data, and financial trends of Collier County, Florida. CONTENTS PAGE FINANCIAL TRENDS These schedules contain trend information to help the reader understand how the government's financial performance and wellbeing have changed over time. Net position by component 146 Change in net position 147 Governmental activities tax revenues by source 150 Fund balances of governmental funds 151 Changes in fund balance of governmental funds 152 REVENUE CAPACITY These schedules contain information to help the reader assess the Country's most significant local revenue source,the Property Tax. Assessed value and estimated actual value of taxable property 154 Property Tax Rates—All direct and overlapping governments 155 Principal Taxpayers County-wide 156 Property Tax levies and collections 157 DEBT CAPACITY These schedules present information to help reader assess the affordability of the County's current levels of outstanding debt and the County's ability to issue additional debt in the future. Ratios of outstanding debt by type 158 Ratios of general bonded debt outstanding 159 Legal debt margin information 160 Direct and overlapping governmental activities debt 160 Pledged-revenue coverage 161 DEMOGRAPHIC AND ECONOMIC INFORMATION These schedules offer demographic and economic indicators to help the reader understand the environment within which the County's financial activities take place. Demographic and economic statistics 162 Principal employers 163 OPERATING INFORMATION These schedules contain service and infrastructure data to help the reader understand how the information in the County's financial report relates to the services the County provides and the activities it performs. Full-time equivalent County employees by function 164 Operating indicators by function 165 Capital Asset statistics by function/program 166 Sources: Unless otherwise noted,the information in these schedules is derived from the comprehensive annual financial reports for the relevant year. 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LA CO CO 00 CO .--I H 00 LA 00 O 01 CO O .--I lA ^ CO CO m N CO Cr e-I N CCOO 00 CO OM N e--1 e-1 a .--1 N V1 O .4 p 0■ N N N CO •"I O CO an C O N co P 00 -V O 0 at 1n ..y co co C co 0 (0 4 O 4?", C ` •V N 0 C ` N N N N o a E C v i0 N eti E 0 u O T.C 4- N .n V N O ,n U O 0 .� O1 a$1 N f0 .0 0 C E .c 000 U `1 4-000 0 •C O O N E y v N c n > > C N N 7 ? N 00 r,„ N = 01 01 N o t U d �_ .,24 B. E • 0 L- C ii 00 h h I- 0 0 0 H I- 0 • Z fO Z 3 2 f0 Vml tl uL• a it i u 3 3 SINGLE AUDIT/FEDERAL AND STATE SCHEDULE OF FINANCIAL ASSISTANCE The Single Audit/Federal and State schedule of financial assistance section presents Grants compliance reports filed by Collier County with Federal government and State government, respectively. THIS PAGE INTENTIONALLY LEFT BLANK CliftonLarsonAllen LLP CLAconnect.com CliftonLarsonAllen INDEPENDENT AUDITORS' REPORT ON INTERNAL CONTROL OVER FINANCIAL REPORTING AND ON COMPLIANCE AND OTHER MATTERS BASED ON AN AUDIT OF FINANCIAL STATEMENTS PERFORMED IN ACCORDANCE WITH GOVERNMENT AUDITING STANDARDS Honorable Board of County Commissioners Collier County, Florida We have audited, in accordance with the auditing standards generally accepted in the United States of America and the standards applicable to financial audits contained in Government Auditing Standards issued by the Comptroller General of the United States, the financial statements of the governmental activities, the business-type activities, the aggregate discretely presented component units, each major fund, and the aggregate remaining fund information of Collier County, Florida (Collier County), as of and for the year ended September 30, 2013, and the related notes to the financial statements, which collectively comprise Collier County's basic financial statements, and have issued our report thereon dated February 12, 2014. Internal Control Over Financial Reporting In planning and performing our audit of the financial statements, we considered Collier County's internal control over financial reporting (internal control) to determine the audit procedures that are appropriate in the circumstances for the purpose of expressing our opinions on the financial statements, but not for the purpose of expressing an opinion on the effectiveness of Collier County's internal control. Accordingly, we do not express an opinion on the effectiveness of Collier County's internal control. A deficiency in internal control exists when the design or operation of a control does not allow management or employees, in the normal course of performing their assigned functions, to prevent, or detect and correct misstatements on a timely basis. A material weakness is a deficiency, or a combination of deficiencies, in internal control such that there is a reasonable possibility that a material misstatement of the entity's financial statements will not be prevented, or detected and corrected on a timely basis. A significant deficiency is a deficiency, or a combination of deficiencies, in internal control that is less severe than a material weakness, yet important enough to merit attention by those charged with governance. Our consideration of internal control was for the limited purpose described in the first paragraph of this section and would not necessarily identify all deficiencies in internal control that might be material weaknesses or significant deficiencies. Given these limitations, during our audit we did not identify any deficiencies in internal control that we consider to be material weaknesses. However, material weakness may exist that have not been identified. NE X I A An il,a ,ae,t rrenter cr Nlaa Interraticnal 169 INTERNATIONAL Honorable Board of County Commissioners Collier County, Florida Compliance and Other Matters As part of obtaining reasonable assurance about whether Collier County's financial statements are free from material misstatement, we performed tests of its compliance with certain provisions of laws, regulations, contracts, and grant agreements, noncompliance with which could have a direct and material effect on the determination of financial statement amounts. However, providing an opinion on compliance with those provisions was not an objective of our audit, and accordingly, we do not express such an opinion. The results of our tests disclosed no instances of noncompliance or other matters that are required to be reported under Government Auditing Standards. Purpose of this Report The purpose of this report is solely to describe the scope of our testing of internal control and compliance and the result of that testing, and not to provide an opinion on the effectiveness of the entity's internal control or on compliance. This report is an integral part of an audit performed in accordance with Government Auditing Standards in considering the entity's internal control and compliance. Accordingly, this communication is not suitable for any other purpose. CliftonLarsonAllen LLP Naples, Florida February 12, 2014 170 CliftonLarsonAllen LLP er CLAconnect.com CliftonLarsonAllen INDEPENDENT AUDITORS' REPORT ON COMPLIANCE WITH REQUIREMENTS THAT COULD HAVE A DIRECT AND MATERIAL EFFECT ON EACH MAJOR FEDERAL PROGRAM AND STATE PROJECT AND ON INTERNAL CONTROL OVER COMPLIANCE IN ACCORDANCE WITH OMB CIRCULAR A-133 AND CHAPTER 10.550, RULES OF THE AUDITOR GENERAL OF THE STATE OF FLORIDA Honorable Board of County Commissioners Collier County, Florida Report on Compliance for Each Major Federal Program and State Project We have audited Collier County, Florida's (Collier County) compliance with the types of compliance requirements described in OMB Circular A-133 Compliance Supplement and the requirements described in the Florida Department of Financial Services State Projects Compliance Supplement, that could have a direct and material effect on each of Collier County's major federal programs and state projects for the year ended September 30, 2013. Collier County's major federal programs and state projects are identified in the summary of auditors' results section of the accompanying schedule of findings and questioned costs. Management's Responsibility Management is responsible for compliance with the requirements of laws, regulations, contracts, and grants applicable to its federal programs and state projects. Auditors'Responsibility Our responsibility is to express an opinion on compliance for each of Collier County's major federal programs and state projects based on our audit of the types of compliance requirements referred to above. We conducted our audit of compliance in accordance with auditing standards generally accepted in the United States of America; the standards applicable to financial audits contained in Government Auditing Standards, issued by the Comptroller General of the United States; OMB Circular A-133, Audits of States, Local Governments, and Non-Profit Organizations and Chapter 10.550, Rules of the Auditor General. Those standards, OMB Circular A-133 and Chapter 10.550 require that we plan and perform the audit to obtain reasonable assurance about whether noncompliance with the types of compliance requirements referred to above that could have a direct and material effect on a major federal program or state project occurred. An audit includes examining, on a test basis, evidence about Collier County's compliance with those requirements and performing such other procedures as we considered necessary in the circumstances We believe that our audit provides a reasonable basis for our opinion on compliance for each major federal program and state project. However, our audit does not provide a legal determination of Collier County's compliance. NEXIA trldepexlei miter 171 INTERNATIONAL Honorable Board of County Commissioners Collier County, Florida Opinion on Each Major Federal Program and State Project In our opinion, Collier County complied, in all material respects, with the types of compliance requirements referred to above that could have a direct and material effect on each of its major federal programs and state projects for the year ended September 30, 2013. Other Matters The results of our auditing procedures disclosed an instance of noncompliance, which is required to be reported in accordance with OMB Circular A-133 and which is described in the accompanying schedule of findings and questioned costs as item 2013-001. Our opinion on each major federal program is not modified with respect to these matters. Collier County's response to the noncompliance finding identified in our audit is described in the accompanying schedule of findings and questioned costs. Collier County's response was not subjected to the auditing procedures applied in the audit of compliance and, accordingly, we express no opinion on the response. Report on Internal Control Over Compliance Management of Collier County is responsible for establishing and maintaining effective internal control over compliance with the types of compliance requirements referred to above. In planning and performing our audit of compliance, we considered Collier County's internal control over compliance with the types of requirements that could have a direct and material effect on each major federal program or state project to determine the auditing procedures that are appropriate in the circumstances for the purpose of expressing an opinion on compliance for each major federal program and state project and to test and report on internal control over compliance in accordance with OMB Circular A-133 and Chapter 10.550 but not for the purpose of expressing an opinion on the effectiveness of internal control over compliance. Accordingly, we do not express an opinion on the effectiveness of Collier County's internal control over compliance. A deficiency in internal control over compliance exists when the design or operation of a control over compliance does not allow management or employees, in the normal course of performing their assigned functions, to prevent, or detect and correct, noncompliance with a type of compliance requirement of a federal program or state project on a timely basis. A material weakness in internal control over compliance is a deficiency, or combination of deficiencies, in internal control over compliance, such that there is a reasonable possibility that material noncompliance with a type of compliance requirement of a federal program or state project will not be prevented, or detected and corrected, on a timely basis. A significant deficiency in internal control over compliance is a deficiency, or a combination of deficiencies, in internal control over compliance with a type of compliance requirement of a federal program or state project that is less severe than a material weakness in internal control over compliance, yet important enough to merit attention by those charged with governance. 172 Honorable Board of County Commissioners Collier County, Florida Our consideration of internal control over compliance was for the limited purpose described in the first paragraph of this section and was not designed to identify all deficiencies in internal control over compliance that might be material weaknesses or significant deficiencies and therefore, material weaknesses or significant deficiencies may exist that were not identified. We did not identify any deficiencies in internal control over compliance that we consider to be material weaknesses. However, we identified a certain deficiency in internal control over compliance, as described in the accompanying schedule of findings and questioned costs as item 2013-001, that we consider to be a significant deficiency. Collier County's response to the internal control over compliance finding identified in our audit is described in the accompanying schedule of findings and questioned costs. Collier County's response was not subjected to the auditing procedures applied in the audit of compliance and, accordingly, we express no opinion on the response. The purpose of this report on internal control over compliance is solely to describe the scope of our testing of internal control over compliance and the result of that testing based on the requirements of OMB Circular A-133 and Chapter 10.550. Accordingly, this report is not suitable for any other purpose. Q "e''k _Z.Z. CliftonLarsonAllen LLP Naples, Florida February 12, 2014 173 COLLIER COUNTY,FLORIDA SCHEDULE OF EXPENDITURES OF FEDERAL AWARDS AND STATE PROJECTS FOR THE FISCAL YEAR ENDED SEPTEMBER 30,2013 CFDA#/ Transfers to Federal or State Grantor/Pass-Through Grantor Program Title CSFA# Grant/Contract Number Expenditures Subrecipients Department of Agriculture Direct Programs: Rural Business-Cooperative Service: Rural Business Enterprise Grants 10.769 09-011-596000558 $ 99,844 $ - Indirect Programs: Florida Department of Agriculture and Consumer Services: Summer Food Service Program for Children 10.559 04-0804 115,274 - Cooperative Forestry Assistance 10.664 Isles of Capri Fire District 6,138 - Cooperative Forestry Assistance 10.664 Ochopee Fire District 1,050 - Total CFDA 7,188 - Total Department of Agriculture 222,306 - Department of Housing and Urban Development Direct Programs: Office of Community Planning and Development: CDBG-Entitlement Grants Cluster: Community Development Block Grants/Entitlement Grants 14.218 B-04-UC-12-0016 500,000 500,000 Community Development Block Grants/Entitlement Grants 14.218 B-08-UN-12-0003 263,904 - Community Development Block Grants/Entitlement Grants 14.218 B-09-UC-12-0016 241,407 257,877 Community Development Block Grants/Entitlement Grants 14.218 B-10-UC-12-0016 211,989 116,527 Community Development Block Grants/Entitlement Grants 14.218 8-11-UN-12-0003 2,859,899 - Community Development Block Grants/Entitlement Grants 14.218 B-11-UC-12-0016 701,050 368,725 Community Development Block Grants/Entitlement Grants 14.218 B-12-UC-12-0016 611,094 218,929 Community Development Block Grants/Entitlement Grants 14.218 B-13-UC-12-0016 5,766 - Total CFDA 5,395,109 1,462,058 ARRA Community Development Block Grant ARRA Entitlement Grants 14.253 ARRA B-09-UY-12-0016 45 - Total CDBG-Entitlement Grants Cluster 5,395,154 1,462,058 Emergency Solutions Grant Program 14.231 S-11-UC-12-0024 1,578 1,578 Emergency Solutions Grant Program 14.231 E-12-UC-12-0024E 47,423 43,300 Emergency Solutions Grant Program 14.231 E-13-UC-12-0024 258 - Total CFDA 49,259 44,878 Supportive Housing Program 14.235 FL0294B4D061003 3,451 - Supportive Housing Program 14.235 FL0294B4D061104 79,829 - Supportive Housing Program 14.235 FL0296B4D061003 82,184 82,184 Total CFDA 165,464 82,184 Home Investment Partnerships Program 14.239 M-09-UC-12-0217 7,325 (10,425) Home Investment Partnerships Program 14.239 M-11-UC-12-0217 72,625 53,404 Home Investment Partnerships Program 14.239 M-12-UC-12-0217 45,488 - Home Investment Partnerships Program 14.239 M-13-UC-12-0217 2,576 - Total CFDA 128,014 42,979 Economic Development Initiative-Special Project,Neighborhood Initiative and Miscellaneous Grants 14.251 B-08-SP-FL-0168 58,428 - Indirect Programs: Florida Department of Economic Opportunity: Community Development Block Grants/State's Program and Non-Entitlement Grants in Hawaii 14.228 10DB-D4-09-21-01-K09 2,881,839 1,172,149 Community Development Block Grants/State's Program and Non-Entitlement Grants in Hawaii 14.228 12DB-P5-09-21-01-1(39 221,602 26,192 Total CFDA 3,103,441 1,198,341 Total Department of Housing and Urban Development 8,899,760 2,830,440 (Continued) See accompanying notes to the schedule of expenditures of federal awards and state projects. 174 COLLIER COUNTY,FLORIDA SCHEDULE OF EXPENDITURES OF FEDERAL AWARDS AND STATE PROJECTS FOR THE FISCAL YEAR ENDED SEPTEMBER 30,2013 CFDA#/ Transfers to Federal or State Grantor/Pass-Through Grantor Program Title CSFA# Grant/Contract Number Expenditures Subrecipients Department of the Interior Direct Programs: Bureau of Land Management: Payments in Lieu of Taxes 15.226 Collier County $ 1,236,784 $ - Fish and Wildlife Service: National Wildlife Refuge Fund 15.659 Collier County 142,002 - Total Department of the Interior 1,378,786 - Department of Justice JAG Program Cluster: Direct Programs: Bureau of Justice Assistance: ARRA Recovery Act-Edward Byrne Memorial Justice Assistance Grant (JAG)Program/Grants To Units Of Local Government 16.804 ARRA 2009-SB-B9-1969 320,289 - Edward Byrne Memorial Justice Assistance Grant Program 16.738 2011-DJ-BX-2520 11,621 - Edward Byrne Memorial Justice Assistance Grant Program 16.738 2012-D1-BX-0156 59,405 - Indirect Programs: Florida Department of Law Enforcement: Edward Byrne Memorial Justice Assistance Grant Program 16.738 2012-JAGC-COLL-1-C4-125 7,468 - Edward Byrne Memorial Justice Assistance Grant Program 16.738 2013-JAGC-COLL-1-D7-098 95,465 - Total CFDA 173,959 - Total JAG Program Cluster 494,248 - Direct Programs: Violence Against Women Office: Supervised Visitation,Safe Havens for Children 16.527 2009-CW-AX-K011 105,937 - Bureau of Justice Assistance: Drug Court Discretionary Grant Program 16.585 2010-DC-BX-0016 110,953 103,311 State Criminal Alien Assistance Program 16.606 2008-AP-BX-0316 483,281 - State Criminal Alien Assistance Program 16.606 2008-AP-BX-0859 361,779 - Total CFDA 845,060 - Office of Community Oriented Policing Services: Public Safety Partnership and Community Policing Grants 16.710 2010-CK-WX-0107 367,445 - Criminal Division: Equitable Sharing Program 16.922 Collier County Sheriff 302,131 - Indirect Programs: Florida Office of Attorney General: Crime Victim Assistance 16.575 V12129 115,887 - Florida Department of Children and Families-Florida Coalition Against Domestic Violence: Violence Against Women Formula Grants 16.588 13-8008-LE 132,335 - Violence Against Women Formula Grants 16.588 14-8008-LE-INV 23,651 - Total CFDA 155,986 - Total Department of Justice 2,497,647 103,311 Department of Transportation Direct Programs: Federal Aviation Administration(FAA): Airport Improvement Program 20.106 3-12-0031-010-2012 713,350 - Airport Improvement Program 20.106 3-12-0142-009-2012 617,915 - Total CFDA 1,331,265 - (Continued) 175 COLLIER COUNTY,FLORIDA SCHEDULE OF EXPENDITURES OF FEDERAL AWARDS AND STATE PROJECTS FOR THE FISCAL YEAR ENDED SEPTEMBER 30,2013 CFDA Cl Transfers to Federal or State Grantor/Pass-Through Grantor Program Title CSFA X Grant/Contract Number Expenditures Subrecipients Federal Transit Administration(FTA): Federal Transit Cluster: Federal Transit Capital Investment Grants 20.500 FL-03-0264-00 $ 343,178 $ - Federal Transit_Capital Investment Grants 20.500 FL-04-0117-00 634 - Federal Transit_Capital Investment Grants 20.500 FL-04-0047-00 (524) - Total CFDA 343,288 - Federal Transit_Formula Grants 20.507 FL-90-X665-00 8,999 - Federal Transit_Formula Grants 20.507 FL-90-X699-00 175,217 - Federal Transit_Formula Grants 20.507 FL-90-X731-00 17,051 - Federal Transit_Formula Grants 20.507 FL-90-X766-00 1,034,726 - Federal Transit_Formula Grants 20.507 FL-90-X784-00 1,117,287 - Federal Transit_Formula Grants 20.507 FL-95-X023-00 375,000 - Federal Transit_Formula Grants 20.507 FL-95-X051-00 220,000 - ARRA Federal Transit_Formula Grants 20.507 ARRA FL-96-X019-00 533,542 - Total CFDA 3,481,822 - Total Federal Transit Cluster 3,825,110 - Indirect Programs: Florida Department of Transportation: Highway Planning and Construction 20.205 416237-1/AQ076 64,532 - Highway Planning and Construction 20.205 420871-1/A4377 (1,656) - Highway Planning and Construction 20.205 423645-1/A4377 559,154 - Highway Planning and Construction 20.205 425556-1/AQ382 156,798 - Highway Planning and Construction 20.205 426836-1/AQ258 850,831 - Highway Planning and Construction 20.205 427934-1/AQG31 250,936 - Highway Planning and Construction 20.205 427936-1/AQ383 74 - Highway Planning and Construction 20.205 429901-1/AQX51 71 - Highway Planning and Construction 20.205 429902-1/AQT91 761,466 - Highway Planning and Construction 20.205 429903-1/AQX89 71 - Highway Planning and Construction 20.205 429915-1/AQU96 68 - Highway Planning and Construction 20.205 430870-1/AQV67 68 - Total CFDA 2,642,413 - Metropolitan Transportation Planning 20.505 410113-1/AP031 132,887 - Metropolitan Transportation Planning 20.505 410113-1/AQR14 500 - Total CFDA 133,387 - Formula Grants for Rural Areas 20.509 410120-1/AOW89 6 - Formula Grants for Rural Areas 20.509 410120-1/AQR01 309,454 - ARRA Formula Grants for Rural Areas 20.509 ARRA 426772-1/API19 133,267 - Total CFDA 442,727 - Enhanced Mobility of Seniors and Individuals with Disabilities 20.513 413360-1-94-01 157,230 - Total Department of Transportation 8,532,132 - Department of Treasury Direct Programs: Federal Equitable Sharing 21.UNKOWN Collier County Sheriff 27,656 - Total Department of Treasury 27,656 - Institute of Museum and Library Services Indirect Programs: Florida Department of State: Grants to States 45.310 12-ISTA-D-01 27,154 - Total Institute of Museum and Library Services 27,154 - (Continued) 176 COLLIER COUNTY,FLORIDA SCHEDULE OF EXPENDITURES OF FEDERAL AWARDS AND STATE PROJECTS FOR THE FISCAL YEAR ENDED SEPTEMBER 30,2013 CFDA 8/ Transfers to Federal or State Grantor/Pass-Through Grantor Program Title CSFA 8 Grant/Contract Number Expenditures Subrecipients Environmental Protection Agency Indirect Programs: Florida Department of Environmental Protection: Capitalization Grants for Drinking Water State Revolving Funds 66.468 DW1111 030 $ 4,000,000 $ - Capitalization Grants for Drinking Water State Revolving Funds 66.468 DW 1111040 21,000,000 - Total Environmental Protection Agency 25,000,000 - Department of Energy Direct Programs: ARRA Energy Efficiency and Conservation Block Grant Program(EECBG) 81.128 ARRA DE-EE0000783 3,827 - Total Department of Energy 3,827 - U.S.Election Assistance Commission Indirect Programs: Florida Department of State: Help America Vote Act Requirements Payments 90.401 2011-2012-0001 115 - Help America Vote Act Requirements Payments 90.401 2012-2013-0001 45,597 - Total U.S.Election Assistance Commission 45,712 - Department of Health and Human Services Direct Programs: Health Resources and Services Administration: Specially Selected Health Projects 93.888 D1ARH20098 (1,825) - Indirect Programs: Florida Department of Elder Affairs-Area Agency on Aging for Southwest Florida,Inc.dba Senior Choices of Southwest Florida: Aging Cluster: Special Programs for the Aging_Title III,Part B_Grants for Supportive Services and Senior Centers 93.044 OAA 203.11 12,043 - Special Programs for the Aging_Title III,Part B_Grants for Supportive Services and Senior Centers 93.044 OAA 203.12 29,134 - Special Programs for the Aging_Title III,Part B_Grants for Supportive Services and Senior Centers 93.044 OM 203.13 49,384 - Total CFDA 90,561 - Special Programs for the Aging_Title III,Part C_Nutrition Services 93.045 OAA 203.12 105,722 - Special Programs for the Aging_Title III,Part C_Nutrition Services 93.045 OAA 203.12 301,070 - Total CFDA 406,792 - Nutrition Services Incentive Program 93.053 NSIP 203.12 879 - Nutrition Services Incentive Program 93.053 NSIP 203.13 33,457 - Total CFDA 34,336 - Total Aging Cluster 531,689 - National Family Caregiver Support,Title III,Part E 93.052 OAA 203.12 13,397 - National Family Caregiver Support,Title III,Part E 93.052 OM 203.13 72,340 - Total CFDA 85,737 - Florida Department of Revenue: Child Support Enforcement 93.563 CD311 323,000 - Florida Department of State: Voting Access for Individuals with Disabilities Grants to States 93.617 2012-2013-0003 11,316 - Total Department of Health and Human Services 949,917 - (Continued) 177 COLLIER COUNTY,FLORIDA SCHEDULE OF EXPENDITURES OF FEDERAL AWARDS AND STATE PROJECTS FOR THE FISCAL YEAR ENDED SEPTEMBER 30,2013 CFDA#/ Transfers to Federal or State Grantor/Pass-Through Grantor Program Title CSFA# Grant/Contract Number Expenditures Subrecipients Corporation for National and Community Service Direct Programs: Retired and Senior Volunteer Program 94.002 09SRSFL017 $ (1,409) $ - Retired and Senior Volunteer Program 94.002 12SRSFL012 44,118 - Total Corporation for National and Community Service 42,709 - Department of Homeland Security Direct Programs: Assistance to Firefighters Grant 97.044 EMW-2012-FO-00966 82,669 - Indirect Programs: Executive Office of the Governor: Disaster Grants-Public Assistance(Presidentially Declared Disasters) 97.036 OS-FA-89-09-21-00-509 781,376 - Disaster Grants-Public Assistance(Presidentially Declared Disasters) 97.036 13-DB-73-09-21-02-530 6,718 - Disaster Grants-Public Assistance(Presidentially Declared Disasters) 97.036 13-IS-3S-09-21-15-569 40,152 - Total CFDA 828,246 - Hazard Mitigation Grant 97.039 10HM-88-09-21-01-012 1,650 - Hazard Mitigation Grant 97.039 11HM-3E-09-21-01-005 (6,012) - Hazard Mitigation Grant 97.039 11HM-3E-09-21-01-026 41,517 - Total CFDA 37,155 - Emergency Management Performance Grants 97.042 13-FG-86-09-21-01-078 96,846 - Homeland Security Grant Program 97.067 11-DS-9Z-09-21-01-394 56,972 - Homeland Security Grant Program 97.067 11-DS-9Z-09-21-01-395 11,033 - Homeland Security Grant Program 97.067 12-DS-9Z-09-21-01-473 15,285 - Homeland Security Grant Program 97.067 12-DS-20-09-21-23-435 34,814 - Homeland Security Grant Program 97.067 13-DS-97-09-21-23-451 8,374 - Total CFDA 126,478 - Total Department of Homeland Security 1,171,394 - TOTAL EXPENDITURES OF FEDERAL AWARDS $ 48,799,000 $ 2,933,751 (Continued) 178 COLLIER COUNTY,FLORIDA SCHEDULE OF EXPENDITURES OF FEDERAL AWARDS AND STATE PROJECTS FOR THE FISCAL YEAR ENDED SEPTEMBER 30,2013 CFDA 8/ Transfers to Federal or State Grantor/Pass-Through Grantor Program Title CSFA is Grant/Contract Number Expenditures Subrecipients Executive Office of the Governor Emergency Management Programs 31.063 13-8G-83-09-21-01-011 $ 79,406 $ - Emergency Management Programs 31.063 14-BG-83-09-21-01-011 42,492 - Total CSFA 121,898 - Emergency Management Projects 31.067 13-CP-11-09-21-01.-237 8,336 - Total Florida Executive Office of the Governor 130,234 - Florida Department of Environmental Protection Beach Erosion Control Program 37.003 12C01 47,159 - GAC Properties,Inc.Consent Order#15-Restricted Funds Projects: City of Cape Coral-Rotary Park and Other Future Projects 37.049 S0539 20,101 - Voluntary Cleanup Tax Credit(VCTC)Program 37.056 287 28,169 - Total Florida Department of Environmental Protection 95,429 - Florida Department of State and Secretary of State State Aid to Libraries 45.030 09-ST-10 43,954 - State Aid to Libraries 45.030 10-ST-10 17,775 - State Aid to Libraries 45.030 11-ST-09 140,803 - State Aid to Libraries 45.030 12-ST-08 88,478 - Total Florida Department of State and Secretary of State 291,010 - Florida Housing Finance Corporation State Housing Initiatives Partnership(SHIP)Program 52.901 Collier County/Naples 1,858,110 - Total Florida Housing Finance Corporation 1,858,110 - Florida Department of Transportation Commission for the Transportation Disadvantaged(CTD)Trip and Equipment Grant Program 55.001 432027-1/432028-1/AQ087 509,877 - Commission for the Transportation Disadvantaged(CTD)Trip and Equipment Grant Program 55.001 432027-1/432028-1/AR160 213,549 - Total CSFA 723,426 - Commission for the Transportation Disadvantaged(CTD) Planning Grant Program 55.002 193630-1/AQP39 11,875 - Commission for the Transportation Disadvantaged(CTD) Planning Grant Program 55.002 432029-1/AR247 22,053 - Total CSFA 33,928 - Aviation Development Grants 55.004 206430-1/A1935 6,210 - Aviation Development Grants 55.004 414299-1/AOR09 25,920 - Aviation Development Grants 55.004 425515-1/AQ122 8,963 - Aviation Development Grants 55.004 432900-1/AQR24 30,719 - Aviation Development Grants 55.004 432901-1/AQR22 39,642 - Total CSFA 111,454 - Public Transit Block Grant Program 55.010 410139-1/AOW93 1 - Public Transit Block Grant Program 55.010 410139-1/AQQ16 888,278 - Total CSFA 888,279 - Intermodal Development Program 55.014 420353-1/APF60 38,684 - Transportation Regional Incentive Program(TRIP) 55.026 429815-1/AQE89 1,100,400 - Total Florida Department of Transportation 2,896,171 - (Continued) 179 COLLIER COUNTY,FLORIDA SCHEDULE OF EXPENDITURES OF FEDERAL AWARDS AND STATE PROJECTS FOR THE FISCAL YEAR ENDED SEPTEMBER 30,2013 CFDA g/ Transfers to Federal or State Grantor/Pass-Through Grantor Program Title CSFA ft Grant/Contract Number Expenditures Subrecipients Florida Department of Children and Families Public Safety,Mental Health,and Substance Abuse Local Matching Grant 60.115 LHZ25 $ 140,707 $ 127,251 Total Florida Department of Children and Families 140,707 127,251 Florida Department of Health County Grant Awards 64.005 C9011 19,556 - County Grant Awards 64.005 01011 5,102 - Total Florida Department of Health 24,658 - Florida Department of Elder Affairs Area Agency on Aging for Southwest Florida,Inc dba Senior Choices of Southwest Florida: Home Care for the Elderly 65.001 HCE 203.11 (74) - Home Care for the Elderly 65.001 HCE 203.12 17,537 - Total CSFA 17,463 - Alzheimer's Respite Services 65.004 ADI 203.12 106,521 - Community Care for the Elderly(CCE) 65.010 CCE 203.11 (582) - Community Care for the Elderly(CCE) 65.010 CCE 203.12 645,167 - Total CSFA 644,585 - Total Florida Department of Elder Affairs 768,569 - TOTAL EXPENDITURES OF STATE FINANCIAL ASSISTANCE $ 6,204,888 $ 127,251 180 Collier County, Florida Notes to the Schedule of Expenditures of Federal Awards and State Projects Year Ended September 30, 2013 1. Basis of Presentation The accompanying Schedule of Expenditures of Federal Awards and State Projects (the Schedule) includes the Federal and State grant activity for Collier County, Florida (the County) and is presented on the modified accrual basis of accounting for expenditures accounted for in the governmental funds and the accrual basis of accounting for expenditures in proprietary funds. Under the modified accrual basis, revenue is recognized if it is both measurable and available for use during the fiscal year and expenditures are recognized in the period liabilities are incurred, if measurable. Under the accrual basis, expenditures are recognized in the period liabilities are incurred. The information in the schedule is presented in accordance with the requirements of U.S. Office of Management and Budget (OMB) Circular A-133, Audits of States, Local Governments, and Non-Profit Organizations, and Section 215.97, Florida Statutes. Therefore, some amounts presented in the Schedule may differ from amounts presented, or used in the preparation of, the basic financial statements for the fiscal year ended September 30, 2013. 2.Summer Food Service Program Summer Food Service Program revenue in the amount of $101,324.79 was returned to the Florida Department of Agriculture after it was determined that some of the meals claimed in FY09 and FY10 were ineligible. 3.Contingency The grant revenue amounts received are subject to audit and adjustment. If any expenditures or expenses are disallowed by the grantor agencies as a result of such an audit, any claim for reimbursement to the grantor agencies would become a liability of the County. In the opinion of management, all grant expenditures are in compliance with the terms of the grant agreements and applicable federal and state laws and regulations. 4. Negative Figures on the Schedule of Expenditures Negative expenditures reported in the Schedules of Expenditures of Federal Awards and State Financial Assistance are a result of corrections which reduced expenditures in one grant and increased expenditures in another grant or funding source. Although the current expenditures on a grant may be negative, the total of all expenditures on the grant is expected to be positive over its total period of performance. 181 COLLIER COUNTY, FLORIDA Schedule of Findings and Questioned Costs Federal Awards Programs and State Financial Assistance Projects Year Ended September 30, 2013 Part I—Summary Auditors' Results Financial Statement Section Type of auditors' report issued: Unmodified Internal control over financial reporting: Material weakness(es)identified? No Significant deficiencies identified not considered to be a material weakness(es) None Reported Noncompliance material to financial statements noted? No Federal Awards Section Internal control over compliance: Material weakness(es)identified? No Were significant deficiency(ies)identified not considered to be a material weakness(es) Yes Type of auditors' report issued on compliance for major programs: Unmodified Any audit findings disclosed that are required to be reported in accordance with OMB Yes Circular A-133 section 510(a) Identification of major federal programs: CFDA Number Name of Federal Program or Cluster 14.218, ARRA-14.253 CDBG-Entitlement Gants Cluster 14.228 Community Development Block Grant/State's Program 16.922 Equitable Sharing of Federally Forfeited Property 20.205 Highway Planning and Construction 66.468 Capitalization Grants for Drinking Water State Rewlving Funds Dollar threshold used to determine Type A Federal programs $1,463,970 Auditee qualified as low-risk auditee? No 182 COLLIER COUNTY, FLORIDA Schedule of Findings and Questioned Costs Federal Awards Programs and State Financial Assistance Projects Year Ended September 30, 2013 State Financial Assistance Section Internal control over compliance: Material weakness(es)identified? No Were significant deficiency(ies)identified not considered to be a material No weakness(es) Type of auditors' report issued on compliance for major projects: Unmodified Identification of major State projects: CSFA Number Name of State Project 52.901 State Housing Initiative Partnership(SHIP)Program 55.010 Public Transit Block Grant Program 55.026 Transportation Regional Incentive Program (TRIP) 65.010 Community Care for the Elderly Dollar threshold used to determine Type A State projects $300,000 183 COLLIER COUNTY, FLORIDA Schedule of Findings and Questioned Costs Federal Awards Programs and State Financial Assistance Projects Year Ended September 30, 2013 Part II - Financial Statement Findings This section identifies the significant deficiencies, material weaknesses, fraud, illegal acts, violations of provisions of contracts and grant agreements and abuse related to the financial statements for which Government Auditing Standards requires reporting in a Circular A-133 and Section 215.97, Florida Statutes, audit. There were no such findings required to be reported. Part III - Findings and Questioned Costs—Major Federal Programs This section identifies the audit findings required to be reported by Section .501(a) of Circular A- 133 as well as any abuse findings involving federal awards that is material to a major program. 2013-001 Timely Expenditure Requirements U.S. Department of Housing and Urban Development CFDA 14.218 CDBG— Entitlement Grants Cluster Criteria Management is responsible for ensuring that Collier County complies with the timely expenditure requirement under 24 CFR 570.902, which requires that the grant recipient carry out CDBG-funded activities in a timely manner. Pursuant to this regulation, a grantee is considered to be carrying out its CDBG program in a timely manner if, sixty (60) days prior to the end of its program year, the grantee has a balance in its line of credit no greater than one and one-half(1.5)times its annual grant. Condition Collier County's 60 day drawdown ratios measured on August 2, 2012 and 2013 were 2.06 and 2.65, respectively. Questioned Costs None Cause Drawdowns on Collier County's available grant-funded resources were delayed primarily due to the following: • Eagle Lakes Voluntary Pre-Kindergarten Activity ($775,000) — The project was not located in a low-moderate income area. Obtaining the beneficiary information needed to meet at CDBG national objective proved to be an excessive burden. 184 COLLIER COUNTY, FLORIDA Schedule of Findings and Questioned Costs Federal Awards Programs and State Financial Assistance Projects Year Ended September 30, 2013 • David Lawrence Center Crosswalk Expansion Activity ($208,000) — The subrecipient was not able to provide a cost allocation plan to meet Federal requirements for allocating staff time. • CRA Crosswalk Activity ($140,000) — The lengthy procurement process extended the projected timeframe for completion of the activity to an unacceptable time period. • Youth Haven Rehabilitation Activity($735,000)— It was determined that the rehabilitation was insufficient for the intended use of the structure, and the building would have to be demolished. The developer did not have sufficient funds to proceed with new construction. Effect As a result of non-compliance with this regulation, Collier County's fiscal year 2013 CDBG grant was reduced by $158,862. Recommendation We recommend that Collier County should continually monitor its ongoing and planned housing rehabilitation, development, and other CDBG-related projects funded to ensure that grant funds are being consistently spent according to plan. When unexpected project delays arise, we recommend that Collier County have a contingency plan in place to accelerate the commencement of future projects so that the line of credit remains under the required threshold at all times. Views of Responsible Officials and Corrective Action Plan Collier County has been focused on all the aspects of meeting the timeliness requirement; this process includes a proactive evaluation from project selection to the development of a contingency plan. Project Selection and Agreement Start Dates Project selection was revised with the application round for FY 13-14 funds to emphasize readiness. The upcoming application for FY 14-15 funding will be further revised to require a detailed project plan that demonstrates ability to spend the funds timely. Historically, a number of contracts have not been in place at the beginning of the funding year. For FY 14-15, the intent is to have the agreements approved by the Board at the beginning of the award period (October 1). Project Review Proactive steps are taken to identify and overcome anticipated or actual bottlenecks or issues regarding the timely execution of projects. The grant manager and grant coordinator provide on-going review of the status of all active projects. The director and staff meet every other month to review the active projects statuses to identify projects lagging behind and discuss opportunities to resolve issues. The director and staff meet every quarter with each active subrecipient to review project statuses. If warranted, corrective measures are developed and/or a detailed project plan is developed and monitored closely by all parties. 185 COLLIER COUNTY, FLORIDA Schedule of Findings and Questioned Costs Federal Awards Programs and State Financial Assistance Projects Year Ended September 30, 2013 Funding Review Each CDBG project is tracked individually through the development and use of a tracking tool called the CDBG Workout plan. This tool is maintained by the lead accountant and summarizes the actual and projected draws which results in a projected timeliness ratio. The values within the workout plan are verified against the County's Financial System Budget to Actual Reports and to the grantors Timeliness Ratio Report (PR056). Monthly, the workout plan is updated by the lead accountant and the grant operations manager which is then reviewed two times per month by the management team and the lead accountant to determine the progress toward meeting timeliness; taking corrective actions as needed. Contingency Planning HHVS is in the process of developing a contingency plan for meeting timeliness. It is likely to include the following elements: award of any un-awarded funds from prior years, consideration of an increase of active awards not fully funded, and exploration of additional opportunities presented by subrecipients or partners that were not in the official funding round. Part IV- Findings and Questioned Costs—Major State Projects This section identifies the audit findings required to be reported under Rule 10.554(1)(1)4, Rules of the Auditor General. There were no such instances required to be reported. Part V—Other Matters See Corrective Action Plan within the finding reported under Part III above. 186 COLLIER COUNTY, FLORIDA Summary Schedule of Prior Audit Findings Year Ended September 30, 2013 Prior-Year Findings and Questioned Costs - Findinq 2012-01 Federal Program/State Project Information U.S. Department of Housing and Urban Development CFDA 14.218, ARRA-14.253 CDBG — Entitlement Grants Cluster CFDA 14.228 Community Development Block Grant/State's Program (DRI) CFDA ARRA-14.257 ARRA Homelessness Prevention and Rapid RE-Housing Program (HPRP) U.S. Department of Agriculture Passed through the Florida Department of Agriculture and Consumer Services CFDA 10.559 Summer Food Service Program Florida Department of Elder Affairs CSFA 65.010: Community Care for the Elderly Condition During testing over payroll, the auditor could not obtain sufficient evidence that the time allocated toward grant programs per time sheets was actual time the employee spent working on the grant programs. There were multiple cases where the time recorded by the employee did not agree to the expenditure recorded. Auditor Recommendation The auditor recommended that the County implement effective internal control processes to confirm that actual time worked by an employee is charged to the grant program. Current Status Corrective action was taken. Findincl 2012-02 Federal Program/State Project Information U.S. Department of Housing and Urban Development CFDA 14.218, ARRA-14.253 CDBG—Entitlement Grants Cluster CFDA 14.228 Community Development Block Grant/State's Program (DRI) U.S. Department of Transportation CFDA 20.205 Highway Planning and Construction (Federal-Aid Highway Program) Florida Department of Transportation CSFA 55.010 Public Transit Block Grant Program 187 COLLIER COUNTY, FLORIDA Summary Schedule of Prior Audit Findings Year Ended September 30, 2013 Condition Upon selecting 60 cash drawdowns, the auditor noted several instances where there was a significant time lag between when Collier County paid for grant expenditures and when the disbursement was requested for reimbursement. There was a lack of a process to minimize the time between disbursement and reimbursement request. This could adversely affect County cash flows as well as result in the grantor not reimbursing Collier County for reimbursements requested within a reasonable time frame. Auditor Recommendation The County should implement procedures that minimize the time elapsing between the request for a cash drawdown and the time that the disbursements are paid by the County. Current Status Collier County's Office of Management and Budget (OMB) Department has developed an internal control protocol to target execution of draws within 30-45 days after quarter end unless the grantor agency contract explicitly states otherwise. Based on our testing of cash drawdowns in fiscal year 2013, it appears improvements have been made since the prior year with regard to timely reimbursement requests. However, for CFDA 20.205, we noted a drawdown that occurred on June 20, 2013 for $253,350. The initial disbursement within the time period pertaining to this drawdown was incurred 155 days prior to this reimbursement request. For CFDA 55.010 there was a 254 day time lag between the earliest invoice posting date and the actual reimbursement date. While some improvement was noted, we identified excessive lag times for two sample selections. This finding is considered partially cleared. Finding 2012-03 Federal Program Information U.S. Department of Agriculture Passed through the Florida Department of Education CFDA 10.559 Summer Food Service Program for Children Condition The auditor noted meals served on a daily basis are tracked at each site, and the daily manual tracking sheets are sent to the Parks and Recreation Administration office. Personnel at office then entered the manual data into a monthly manual tracking spreadsheet, which was then used to summarize the total meals served to prepare monthly reimbursement requests. The auditors selected the daily tracking sheets from two sites from a population of 11 sites for the months of June 2012 and July 2012, the Park and Recreation's manual tracking sheets for the months selected above and the reimbursement requests. The auditors noted that the amounts recorded on the daily tracking sheets did not agree to the monthly manual tracking sheets held by the Parks and Recreation office. Also, the amounts on the monthly tracking sheets did not trace to the reimbursement request submitted to the Florida Department of Agriculture. Therefore, reimbursement requests were submitted to the grantor that could not be fully substantiated with evidence that they were qualifying meals served. 188 COLLIER COUNTY, FLORIDA Summary Schedule of Prior Audit Findings Year Ended September 30, 2013 Auditor Recommendation The auditor recommended that the personnel administering the grant program implement procedures to ensure that reimbursement requests are supported by actual meals served. Current Status Collier County's OMB Department has worked with the identified Grants Controller (Operations Analyst) and the lead program management staff to develop appropriate protocols and tools for the administration of the Summer Food Program. A Quick Compliance Guide was drafted by the OMB Department and distributed to appropriate staff as an internal guide to assign responsibilities and review typical areas of compliance. Protocols included establishment of appropriate source documentation for reimbursement requests, development of summary worksheets to audit daily meal counts, review responsibilities prior to submission and management of revisions after submittal. A worksheet was established to track daily site meal counts into weekly and monthly summaries used to audit against original source documentation. Any discrepancies identified by the Grants Controllers and resolved and documented with program staff prior to reimbursement. A final summary meal count is drafted and reconciled to the actual counts requested on the reimbursement. Based on the major grant determination criteria for fiscal 2013, this grant was not determined to be a major program and therefore was not tested as such. To evaluate current year status of the prior year finding, we obtained a request for reimbursement for July of 2013 and one day in August of 2013 along with the supporting detail including the source documents, and the weekly and monthly summary worksheets and the related daily manual tracking sheets that reconciled to the summary worksheets. For the time periods noted preciously, we were able to reconcile the daily manual tracking sheets to the weekly and monthly summary worksheets without exception and we noted that no reimbursement requests were processed until the summary sheets were properly reconciled to the daily manual tracking sheets. We did note two internal control issues during our review. It was noted that three of the thirty-eight daily meal counts were not dated. We also noted that one of thirty-eight daily meal counts wasn't properly signed. Therefore, this finding is considered partially cleared. Finding 2012-04 State Project Information Florida Housing Finance Corporation CSFA 52.901 State Housing Initiatives Partnership Program (SHIP) Condition The auditor noted that Collier County calculated the applicant's net worth inaccurately. Instead of averaging the checking account balance over the six months preceding the application, Collier County used only the last three months to perform the calculation for three applicants. For another applicant, the auditor noted that Collier County did not average the last six months but instead added them. 189 COLLIER COUNTY, FLORIDA Summary Schedule of Prior Audit Findings Year Ended September 30, 2013 Auditor Recommendation We recommend that the County implement a second level of review to confirm that errors and inconsistencies are caught on time and that all program participants are eligible. Current Status Corrective action was taken. Finding 2012-05 Federal Program Information U.S Department of Agriculture Passed through the Florida Department of Education CFDA 10.559 Summer food Service Program for Children Condition The auditor selected 9 expenditures for testing from a population of 52, noting that two expenditures were incurred and paid in June 2012 and July 2012, which was outside the period of availability. Auditor Recommendation The County should implement procedures that require that expenditures are reviewed timely to confirm that they are incurred within the period of availability. Current Status Corrective action was taken. Finding 2012-06 Federal Program U.S. Department of Housing and Urban Development CFDA 14.218, ARRA-14.253 CDBG— Entitlement Grants Cluster Condition During testing, the auditor noted that there was a contract modification related to one of the 11 vendors selected from a population of 33 vendors. The document provided by Collier County was dated the day of the request. 190 COLLIER COUNTY, FLORIDA Summary Schedule of Prior Audit Findings Year Ended September 30, 2013 The auditor, therefore, could not ascertain whether the required review and approval was conducted prior to the procurement. In addition, the auditor noted no documentation evidencing that Collier County had checked the EPLS for one of the vendors selected for testing (GA Food Service of Pinellas County). The auditor further noted that a certification from the vendor was not collected or clause or condition included in the contract. Auditor Recommendation The County should perform the required verification by checking the EPLS (and documenting evidence of the verification, when it was performed and by whom), collecting a certification from the entity, or adding a clause or condition to the contract with that entity in accordance with the federal requirements. Also, the County should keep proper documentation on file to support all procurements were approved properly and in a timely fashion. Current Status Corrective action was taken. Finding 2012-07 State Project Information Florida Department of Elder Affairs CSFA 65.010: Community Care for the Elderly Condition The auditor noted that Collier County failed to submit a service cost report during the entire 2012 fiscal year. Auditor Recommendation The County should establish policies and procedures to confirm that all required reports are prepared and filed in a timely manner, including developing a checklist of required reports and due dates. Current Status Corrective action was taken. 191 THIS PAGE INTENTIONALLY LEFT BLANK CliftonLarsonAllen LLP el, CLAconnect.com Clifton Larson Allen MANAGEMENT LETTER Honorable Board of County Commissioners Collier County, Florida We have audited the financial statements of Collier County, Florida (Collier County) as of and for the fiscal year ended September 30, 2013, and have issued our report thereon dated February 12, 2014. We conducted our audit in accordance with auditing standards generally accepted in the United States of America; the standards applicable to financial audits contained in Government Auditing Standards, issued by the Comptroller General of the United States; OMB Circular A- 133, Audits of States, Local Governments, and Non-Profit Organizations; and Chapter 10.550, Rules of the Florida Auditor General. We have issued our Independent Auditor's Report on Internal Control over Financial Reporting and Compliance and Other Matters Based on an Audit of the Financial Statements Performed in Accordance with Government Auditing Standards, Independent Auditor's Report on Compliance with Requirements That Could Have a Direct and Material Effect on Each Major Federal Program and State Project and on Internal Control over Compliance in Accordance with OMB Circular A-133 and Chapter 10.550 Rules of the Florida Auditor General; and Schedule of Findings and Questioned Costs. Disclosures in those reports and schedule, which are dated February 12, 2014, should be considered in conjunction with this management letter. Additionally, our audit was conducted in accordance with Chapter 10.550, Rules of the Auditor General, which governs the conduct of local governmental entity audits performed in the State of Florida. This letter includes the following information, which is not included in the aforementioned auditor's reports or schedule: ➢ Section 10.554(1)(i)1., Rules of the Auditor General, requires that we determine whether or not corrective actions have been taken to address findings and recommendations made in the preceding annual financial audit report. Corrective actions have been taken to address findings and recommendations made in the preceding annual financial audit report. See Appendix A. ➢ Section 10.554(1)(i)2., Rules of the Auditor General, requires our audit to include a review of the provisions of Section 218.415, Florida Statutes, regarding the investment of public funds. In connection with our audit, we determined that Collier County complied with Section 218.415, Florida Statutes. ➢ Section 10.554(1)(i)3., Rules of the Auditor General, requires that we address in the management letter any recommendations to improve financial management. Refer to Appendix B for recommendations to improve financial management. • NEX I A Ar,I d Naaa Intematicrnl INTERNATIONAL. Honorable Board of County Commissioners Collier County, Florida ➢ Section 10.554(1)(i)4., Rules of the Auditor General, requires that we address noncompliance with provisions of contracts or grant agreements, or abuse, that have occurred, or are likely to have occurred, that have an effect on the financial statements that is less than material but which warrants the attention of those charged with governance. In connection with our audit, we did not have any such findings. ➢ Section 10.554(1)(i)5., Rules of the Auditor General, requires that the name or official title and legal County for the primary government and each component unit of the reporting entity be disclosed in this management letter, unless disclosed in the notes to the financial statements. This information has been included in the notes to the basic financial statements. ➢ Section 10.554(1)(i)6.a., Rules of the Auditor General, requires a statement be included as to whether or not the local governmental entity has met one or more of the conditions described in Section 218.503(1), Florida Statutes, and identification of the specific condition(s) met. In connection with our audit, we determined that Collier County did not meet any of the conditions described in Section 218.503(1), Florida Statutes. ➢ Section 10.554(1)(i)6.b., Rules of the Auditor General, requires that we determine whether the annual financial report for Collier County for the fiscal year ended September 30, 2013, filed with the Florida Department of Financial Services pursuant to Section 218.32(1)(a), Florida Statutes, is in agreement with the annual financial audit report for the fiscal year ended September 30, 2013. In connection with our audit, we determined that these two reports were in agreement. ➢ Pursuant to Sections 10.554(1)(i)6.c. and 10.556(7), Rules of the Auditor General, we applied financial condition assessment procedures. It is management's responsibility to monitor Collier County's financial condition, and our financial condition assessment was based in part on representations made by management and the review of financial information provided by same. Our management letter is intended solely for the information and use of the Legislative Auditing Committee, members of the Florida Senate and the Florida House of Representatives, the Florida Auditor General, Federal and other granting agencies, and applicable management, and is not intended to be and should not be used by anyone other than these specified parties. d V° (- A.�,�lea L.L. CliftonLarsonAllen LLP Naples, Florida February 12, 2014 2 COLLIER COUNTY, FLORIDA BOARD OF COUNTY COMMISSIONERS Appendix A—Status of Prior Year's Findings and Recommendations Year Ended September 30, 2013 Prior Year Findings and Current Year Status Recommendations Cleared Partially Cleared Not Cleared 2012-01 Material X Weakness 2012-02 Significant X Deficiency 2012-03 Material X Weakness 2012-04 Significant X Deficiency 2012-05 Material X Weakness 2012-06 Significant X Deficiency 2012-07 Material X Weakness 3 COLLIER COUNTY, FLORIDA BOARD OF COUNTY COMMISSIONERS Appendix B— Recommendations to Improve Financial Management Year Ended September 30, 2013 2013-002 Time Entry Internal Controls Criteria Management is responsible for ensuring that time derived from manual timesheets that is entered into the County's payroll system is complete and accurate. Condition Timesheets are entered into Collier County's payroll system by a designated "timekeeper" and approved by a designated time approver. During our testing of internal controls over the payroll process, we noted several instances in which the same individual served as both timekeeper and time approver. Cause For a period of time, several employees in the Emergency Medical Services (EMS) department were assigned multiple roles in the SAP system that allowed them to both enter and approve payroll entries. In most payroll periods, these functions were separated, with one employee performing the keying of worked time, and another approving the times entered. In review of the circumstances, it appears that the employee regularly assigned to approve times was absent on the date(s) when payroll approval was due. This resulted in the same employee entering and approving worked times. In another situation, the individual regularly assigned to enter the times was absent, resulting in the regular time approver both entering the times and approving the entries. Effect Time entered into the payroll system could be inaccurate, which could lead to employees not being compensated for the proper number of hours worked. Recommendation We recommend that management strengthen this internal control to ensure that the process to approve time entered in the payroll system is performed by a separate individual without exception. Management's Response The issue of employees with dual roles throughout the agency was reviewed and resolved in September 2013. Steps were taken to notify employees who had access to both enter and approve times that their responsibilities would change, other resources to either enter time or approve payroll entries were indentified and trained, and the dual roles that were assigned to these employees have been removed, leaving them with either timekeeping or time approval only. There are a select group of system users who have been allowed to retain both timekeeping and time approval access due to specific department characteristics (small staff being the primary reason). 4 COLLIER COUNTY, FLORIDA Summary Schedule of Prior Audit Findings Year Ended September 30, 2013 Following time entry and approval, the Clerk of Courts audits these entries against County CMAs on a bi-weekly basis to ensure time entries or leaves are in accordance with the provisions of these practices. Any discrepancies are reported to the HR department for follow up with the appropriate department prior to payroll processing. 5 THIS PAGE INTENTIONALLY LEFT BLANK ANNUAL DEBT REPORT (UNAUDITED) Pursuant to the Collier County Debt Policy the following Tables were prepared for the fiscal year ended September 30, 2012. Table 1. Calculation of Collier County General Governmental Debt Ratio Table 2. Calculation of Collier County Enterprise Debt Ratios TABLE 1 Calculation of Collier County General Governmental Debt Ratio For the Fiscal Year Ended September 30,2013 Bondable revenues,as defined by Collier County Debt Policy: Current Ad Valorem Taxes $ 243,582,299 Governmental Impact Fees 17,255,264 Half Cent Sales Tax 32,168,001 Developmental Fees 18,380,912 State Revenue Sharing 8,478,704 5th Cent Local Option Gas Tax 4,862,412 6th Cent Local Option Gas Tax 6,397,135 Constitutional Gas Tax 3,890,636 Seventh Cent Gas Tax 1,717,349 Ninth Cent Gas Tax 1,360,991 Parks and Recreation Fees 6,733,756 Tourist Development Tax 16,183,377 Court Facilities Fees 1,107,455 Communications Services Tax 4,872,492 Total bondable revenues $ 366,990,783 Fiscal 2013 governmental debt service requirements: Series 2003 Capital Improvement Bonds Principal: $ - Interest: 408,737 Series 2005 Capital Improvement Bonds Principal: Interest: 2,752,769 Series 2003 Gas Tax Bonds Principal: 6,245,000 Interest: 287,795 Series 2005 Gas Tax Bonds Principal: 1,610,000 Interest: 4,425,112 Series 2012 Gas Tax Bonds Principal: Interest: 1,739,604 Series 2010 Special Obligation Bonds Principal: 1,745,000 I nterest: 2,307,613 Series 2010B Special Obligation Bonds Principal: 1,830,000 Interest: 903,850 Series 2011 Special Obligation Bonds Principal: 6,120,000 I nterest: 4,037,356 Total fiscal 2013 governmental debt service requirements $ 34,412,836 Governmental debt ratio of fiscal year 2013 debt service requirements to total bondable revenues(13.0%maximum allowed by County policy) 9.4% Notes: Debt service is based upon current amortization tables for the fiscal year indicated. Debt prepayments are not included as debt service requirements. TABLE 2 Calculation of Collier County Enterprise Debt Ratios For the Fiscal Year Ended September 30,2013 Collier County Water and Sewer District: Total Sales Revenue $ 101,823,385 Allowance for Funds Prudently Invested 516,920 Miscellaneous Revenue 2,312,157 Total Operating Revenue 104,652,462 Non-Operating Revenue 1,029,126 Gross Revenue 105,681,588 Less:Operation and Maintenance Expense(excluding Depreciation and Amortization) 68,916,116 Net Revenue Available for Debt Service(1) $ 36,765,472 Total Fiscal Year 2013 Debt Service on Bonds(2) $ 11,689,791 Net Revenue Debt Service Coverage on Bonded Debt (100%Required)-(1/2) 315% Other Pledged Funds: System Development Fees(Impact Fees) $ 13,502,519 Special Assessment Proceeds 25,620 Total Pledged Funds Available for Debt Service(3) $ 50,293,611 Total Fiscal Year 2013 Debt Service on Bonds(4) $ 11,689,791 Total Pledged Funds Debt Service Coverage on Bonded Debt (125%Required)-(3/4) 430% Total Pledged Funds Available for Debt Service After Payment of Bonds(5) $ 38,603,820 Total Fiscal Year 2013 Debt Service on Subordinated Indebtedness(6) $ 8,990,494 Calculated Coverage on Subordinated Indebtedness-(5/6) 429% Total Pledged Funds Available for System Purposes $ 29,613,326 Summary Debt Statement for Fiscal Year 2013 General Governmental Debt: Collier County's Debt Policy sets the maximum allowable governmental debt ratio at 13.0%, and the County continues to operate below this self-imposed maximum. The Constitution of the State of Florida and the Florida Statutes set no legal debt limit. The governmental debt ratio is the ratio of debt service requirements to total bondable revenues, as defined by Collier County's Debt Policy. It should be noted that while ad valorem taxes are bondable for purposes of the governmental debt ratio calculation, they may only be pledged pursuant to voter referendum. The governmental debt ratio decreased from 10.7%, as of September 30, 2012, to 9.4% for the fiscal year ended September 30, 2013. The decrease in the debt ratio is primarily the result of an overall decline in annual debt service payments of 10.3%. The decrease in annual debt service payments is a result of the refinancing of the remaining portions of the Capital Improvement Bonds by the Series 2013 Special Obligation Refunding Revenue Bonds and the final maturity of the State Infrastructure Bank in FY-2012. Within the bondable revenues, developmental fees increased by 40.8%, tourist development tax receipts increased by 8.6% and half cent sales tax revenues increased by 8.3%. The fiscal year 2012 payoff of the State Infrastructure Bank loan and recent debt restructurings, coupled with the apparent stabilization of general governmental revenues, will likely produce a decrease in the general governmental debt ratio for the fiscal year ending 2014. Assuming no new debt issuance, this downward trend should continue. In April of 2013, Collier County refinanced the remaining portions of its outstanding Series 2003 and 2005 Capital Improvement Revenue Bonds with the Series 2013 Special Obligation Refunding Revenue Bonds. The Series 2013 bonds have fixed interest rates and an all in true interest cost of 3.8%. The partial refinancing of the Series 2003 and 2005 bonds achieved a net present value savings on the refunded bonds of 3.0%. The defeasance of the remaining Series 2003 and 2005 Capital Improvement Revenue Bonds extinguished the requirement for Collier County to set aside a cash reserve for the payment of debt service on the Series 2003 and 2005 Bonds. Governmental Debt Ratings Table: Current Ratings(as of 1/16/2014) Fitch Moody's Standard&Poor's Gas Tax Revenue Bonds AA- A2 A Special Obligation Bonds AA Aa2 AA A rating of AA is an indication by Fitch Ratings of an investment grade instrument, but one which carries a slightly higher risk than a AAA rated bond. Fitch also uses intermediate +/- modifiers for each AA category. A rating of Aa2 is an indication by Moody's Investors Service of a high quality investment grade instrument with very low credit risk, but "their susceptibility to long-term risks appears somewhat greater" than a Aaa rated bond. A rating of Al is an indication by Moody's of an investment grade instrument with low credit risk but the bond has elements present that suggest a higher susceptibility to impairment over the long term than a Aa investment. Moody's uses intermediate modifiers of 1 (higher) to 3 (lower)within the Aa and A ranges. A rating of AA is an indication by Standard and Poor's of an investment grade instrument issued by a"quality borrower"but with slightly more risk than a AAA grade investment. A rating of A is an indication by Standard and Poor's of an investment grade instrument but one more susceptible to adverse changes in circumstances and economic conditions than AAA or AA instruments. Standard and Poor's also uses intermediate+/-modifiers for each AA category. The County's Special Obligation Revenue Bonds are secured by a covenant to appropriate in the annual budget, by amendment, if necessary, from Non-Ad Valorem Revenues amounts sufficient pay debt service on the Special Obligation Bonds. The combined gas tax revenues are pledged for the payment of all the Gas Tax Revenue bonds. Fiscal year 2013 gas tax revenues covered the current year debt service payments on all outstanding Gas Tax Revenue bonds at 127%. Collier County Enterprise Debt: Currently, the Collier County Water and Sewer District (District) is the only County enterprise activity with bonded debt outstanding. The Collier County Debt Policy does not set a maximum allowable enterprise debt ratio, but coverage requirements related to the District's debt are set by bond covenants. Net revenues, defined as operating revenues plus non-operating revenues less operating expenses, excluding depreciation, must cover bonded debt service at 100%. Total pledged funds, defined as net revenues plus system development fees and special assessments must cover bonded debt at 125%. Net revenue coverage on bonded debt was 315% and total pledged funds coverage on bonded debt was 430% for fiscal year 2013. Net revenue available for debt service decreased during fiscal year 2013, mainly due to an 18.5% increase in operating expenses. Operating expenses increased due to expenses related to system infrastructure repair and rehabilitation such as generator switch upgrades, treatment process filter replacement, plant compliance assurance and technical support. The decrease in total pledged funds coverage on bonded debt was mitigated due to a 54.6% increase in water and wastewater impact fees collected during fiscal year 2013 versus fiscal year 2012. The District's calculated coverage on subordinated debt, all in the form of State Revolving Fund Loans, is 429%. The total pledged funds coverage required by the loan agreements varies between 115% and 125%, depending upon the individual loan agreement. In June of 2013 the Collier County Water and Sewer District issued the Series 2013 Water and Sewer Refunding Revenue Bonds in the par amount of$17,769,080. These bonds were issued for the purpose of refunding the District's Series 2003B Bonds. The Series 2013 bonds have a fixed interest rate and an all in true interest cost of 1.5%. The current refunding achieved a net present value savings of 10.0% on the refunded bonds. In August of 2013, the Collier County Water and Sewer District borrowed $25,000,000 from the State of Florida Department of Environmental Protection's State Revolving Fund Loan Program for purposes of refunding a portion of the Water and Sewer District's Series 2006 Revenue Bonds. The State Revolving Fund proceeds, together with other available monies, were placed in escrow. The State Revolving Fund loan has a fixed interest rate and an all in true interest cost of 2.3%. The advance refunding achieved a net present value savings of 17.2% on the refunded bonds. Enterprise Debt Ratings Table: Current Ratings (as of 1/16/2014) Fitch Moody's Standard &Poor's* Water and Sewer Revenue Bonds AA+ Aa2 - *-Standard&Poor's does not currently rate County Water and Sewer Revenue Bonds. A rating of AA is an indication by Fitch Ratings of an investment grade instrument, but one which carries a slightly higher risk than a AAA rated bond. Fitch also uses intermediate +/- modifiers for each AA category. Fitch Ratings recently reaffirmed the rating of AA+ attached to the Collier County Water and Sewer District's Revenue Bonds and revised the outlook from stable to positive. A rating of Aa2 is an indication by Moody's Investors Service of a high quality investment grade instrument, but "their susceptibility to long-term risks appears somewhat greater" than a Aaa rated bond. Moody's uses intermediate modifiers of 1 (higher) to 3 (lower) within the Aa and A ranges. The District's current focus is the maximization of revenues within the existing rate structure, containment of operating costs and risk based prioritization of capital projects. Over recent years this strategy has allowed the District to operate on a pay as you go basis, avoid additional borrowing and maintain financial stability. The District remains committed to high priority asset maintenance. Collier County, Florida Clerk of the Circuit Court Special-Purpose Financial Statements and Supplemental Reports Year Ended September 30, 2013 Collier County, Florida Clerk of the Circuit Court Special-Purpose Financial Statements and Other Reports Year Ended September 30, 2013 Contents Independent Auditors'Report 1 Special-Purpose Financial Statements Special-Purpose Balance Sheet—Governmental Funds 4 Special-Purpose Statement of Revenues, Expenditures, and Changes in Fund Balance —Governmental Funds 5 Special-Purpose Statement of Revenues, Expenditures, and Changes in Fund Balance —Budget and Actual—General Fund 6 Special-Purpose Statement of Revenues,Expenditures and Changes in Fund Balance —Budget and Actual—Court Services Fund 7 Special-Purpose Statement of Revenues,Expenditures and Changes in Fund Balance —Budget and Actual—Other Special Revenue Fund 8 Special-Purpose Statement of Fiduciary Net Position—Agency Fund 9 Notes to Special-Purpose Financial Statements 10 Combining Information Combining Special-Purpose Statements of Fiduciary Net Position—All Agency Funds 25 Other Reports Independent Auditors' Report on Internal Control Over Financial Reporting and on Compliance and Other Matters based on an audit of financial statements performed in accordance with Government Auditing Standards 26 Management Letter 28 CliftonLarsonAllen LLP CLAconnect.com CliftonLarsonAllen INDEPENDENT AUDITORS' REPORT Honorable Dwight E. Brock Clerk of the Circuit Court Collier County, Florida Report on the Special-Purpose Financial Statements We have audited the accompanying special-purpose financial statements of each major fund and the aggregate remaining fund information of the Collier County, Florida Clerk of the Circuit Court(Clerk), as of and for the year ended September 30, 2013, and the related notes to the special-purpose financial statements, which collectively comprise the entity's financial statements as listed in the table of contents. Management's Responsibility for the Financial Statements Management is responsible for the preparation and fair presentation of these special-purpose financial statements in accordance with the basis of accounting practices specified by the Rules of the Auditor General, State of Florida for financial statements of constitutional officers. Management is also responsible for the design, implementation, and maintenance of internal control relevant to the preparation and fair presentation of special-purpose financial statements that are free from material misstatement, whether due to error or fraud. Auditors'Responsibility Our responsibility is to express opinions on these special-purpose financial statements based on our audit. We conducted our audit in accordance with auditing standards generally accepted in the United States of America and the standards applicable to financial audits contained in Government Auditing Standards,issued by the Comptroller General of the United States. Those standards require that we plan and perform the audit to obtain reasonable assurance about whether the special-purpose financial statements are free from material misstatement. An audit involves performing procedures to obtain audit evidence about the amounts and disclosures in the special-purpose financial statements. The procedures selected depend on the auditors' judgment, including the assessment of the risks of material misstatement of the special-purpose financial statements, whether due to fraud or error. In making those risk assessments, the auditor considers internal control relevant to the entity's preparation and fair presentation of the special-purpose financial statements in order to design audit procedures that are appropriate in the circumstances,but not for the purpose of expressing an opinion on the effectiveness of the entity's internal control. Accordingly, we express no such opinion. An audit also includes evaluating the appropriateness of accounting policies used and the reasonableness of significant accounting estimates made by management, as well as evaluating the overall presentation of the special- purpose financial statements. We believe that the audit evidence we have obtained is sufficient and appropriate to provide a basis for our audit opinions. 1 NE XI A indeperdat miter d Naga Irtanahard INTERNATIONAL Honorable Dwight E. Brock Clerk of the Circuit Court Opinion In our opinion, the special-purpose financial statements referred to above present fairly, in all material respects, the respective financial position of each major fund and the aggregate remaining fund information of the Clerk as of September 30, 2013, and the respective changes in financial position and budgetary comparisons for the general fund, court services fund, and other special revenue fund thereof for the year then ended in accordance with the financial reporting provisions of the Rules of the Auditor General, State of Florida as described in Note 1. Basis of Accounting We draw attention to Note 1 of the special-purpose financial statements, which describes the basis of accounting. The special-purpose financial statements are prepared on the basis of the financial reporting provisions of the Rules of the Auditor General, State of Florida, which is a basis of accounting other than accounting principles generally accepted in the United States of America,to comply with the requirements of the Rules of the Auditor General, State of Florida. Our opinion is not modified with respect to that matter. Other Matters Combining Information Our audit was conducted for the purpose of forming opinions on the special-purpose financial statements that collectively comprise the Clerk's financial statements. The combining statements are presented for purposes of additional analysis and are not a required part of the special-purpose financial statements. The combining statements are the responsibility of management and were derived from and relate directly to the underlying accounting and other records used to prepare the special-purpose financial statements. Such information has been subjected to the auditing procedures applied in the audit of the special-purpose financial statements and certain additional procedures, including comparing and reconciling such information directly to the underlying accounting and other records used to prepare the special-purpose financial statements or the special-purpose financial statements themselves, and other additional procedures in accordance with auditing standards generally accepted in the United States of America. In our opinion, the combining statements are fairly stated in all material respects in relation to the special-purpose financial statements as a whole. Other Reporting Required by Government Auditing Standards In accordance with Government Auditing Standards, we have also issued our report dated December 23, 2013, on our consideration of the Clerk's internal control over financial reporting and on our tests of its compliance with certain provisions of laws, regulations, contracts, and grant agreements and other matters. The purpose of that report is to describe the scope of our testing of internal control over financial reporting and compliance and the result of that testing, and not to provide an opinion on internal control over financial reporting or on compliance. That report is an integral part of an audit performed in accordance with Government Auditing Standards in considering the Clerk's internal control over financial reporting and compliance. 2 Honorable Dwight E. Brock Clerk of the Circuit Court Restriction on Use This report is intended solely for the information and use of the Clerk and the Auditor General, State of Florida, and is not intended to be and should not be used by anyone other than these specified parties. CliftonLarsonAllen LLP Naples,Florida December 23, 2013 3 Collier County, Florida Clerk of the Circuit Court Special-Purpose Balance Sheet— Governmental Funds September 30, 2013 Other Total Court Special Governmental General Services Revenue Funds Assets Cash and cash equivalents $ 5,128,728 $ 827,098 $ 4,579,714 $ 10,535,540 Accounts receivable 109,579 - - 109,579 Due from other governments 10,654 87,372 - 98,026 Total assets $ 5,248,961 $ 914,470 $ 4,579,714 $ 10,743,145 Liabilities and fund balances Liabilities: Vouchers payable and accrued liabilities $ 767,163 $ 226,418 $ 30,452 $ 1,024,033 Due to Collier County,Florida Board of County Commissioners 674,889 - - 674,889 Due to other governments - 626,214 - 626,214 Unearned revenue - 61,838 - 61,838 Deposits 3,806,909 - - 3,806,909 Total liabilities 5,248,961 914,470 30,452 6,193,883 Fund balance: Spendable-Restricted - - 4,549,262 4,549,262 Total fund balance - - 4,549,262 4,549,262 Total liabilities and fund balance $ 5,248,961 $ 914,470 $ 4,579,714 $ 10,743,145 See accompanying Notes to Special-Purpose Financial Statements. 4 Collier County, Florida Clerk of the Circuit Court Special-Purpose Statement of Revenues, Expenditures, and Changes in Fund Balance Governmental Funds Year Ended September 30, 2013 Total Court Other Special Governmental General Services Revenue Funds Revenues: Intergovernmental $ - $6,365,715 $ - $ 6,365,715 Charges for services 3,098,875 2,273,168 1,934,596 7,306,639 Interest income 27,342 4,279 7,539 39,160 Total revenues 3,126,217 8,643,162 1,942,135 13,711,514 Expenditures: General government: Personal services 5,853,776 6,798,343 819,859 13,471,978 Operating 1,890,721 427,125 39,934 2,357,780 Capital outlay 182,144 - - 182,144 Total expenditures 7,926,641 7,225,468 859,793 16,011,902 Excess(deficiency)of revenues over(under)expenditures (4,800,424) 1,417,694 1,082,342 (2,300,388) Other financing sources(uses): Transfers in: Collier County,Florida Board of County Commissioners appropriations 5,475,200 - - 5,475,200 Transfers out: Distribution of excess fees to State of Florida - (1,696,742) - (1,696,742) Distribution of excess appropriations to Collier County,Florida Board of County Commissioners (674,776) - - (674,776) Total other fmancing sources(uses) 4,800,424 (1,696,742) - 3,103,682 Net change in fund balance - (279,048) 1,082,342 803,294 Fund balances—beginning of year - 279,048 3,466,920 3,745,968 Fund balances—end of year $ - $ - $ 4,549,262 $ 4,549,262 See accompanying Notes to Special-Purpose Financial Statements. 5 Collier County, Florida Clerk of the Circuit Court Special-Purpose Statement of Revenues, Expenditures, and Changes in Fund Balance —Budget and Actual General Fund Year Ended September 30, 2013 Variance With Final Budget Budget Positive Original Final Actual (Negative) Revenues: Charges for services $ 2,257,800 $ 2,937,800 $ 3,098,875 $ 161,075 Interest income 21,000 21,000 27,342 6,342 Total revenues 2,278,800 2,958,800 3,126,217 167,417 Expenditures: General government: Personal services 5,701,200 6,044,200 5,853,776 190,424 Operating expenditures 1,695,300 2,095,300 1,890,721 204,579 Capital outlay 15,500 294,500 182,144 112,356 Total expenditures 7,412,000 8,434,000 7,926,641 507,359 Excess(deficiency)of revenues over (under)expenditures (5,133,200) (5,475,200) (4,800,424) 674,776 Other financing sources(uses): Transfers in: Collier County,Florida Board of County Commissioners appropriations 5,133,200 5,475,200 5,475,200 - Transfers out: Distribution of excess appropriations to Collier County,Florida Board of County Commissioners - - (674,776) (674,776) Total other financing sources(uses) 5,133,200 5,475,200 4,800,424 (674,776) Net change in fund balance - - - - Fund balance—beginning of year - - - - Fund balance—end of year $ - $ - $ - $ - See accompanying Notes to Special-Purpose Financial Statements. 6 Collier County, Florida Clerk of the Circuit Court Special-Purpose Statement of Revenues, Expenditures, and Changes in Fund Balances —Budget and Actual Court Services Fund Year Ended September 30, 2013 Variance With Final Budget Budget Positive Original Final Actual (Negative) Revenues: Intergovernmental $ 6,169,630 $ 6,385,234 $ 6,365,715 $ (19,519) Charges for services - 1,909,412 2,273,168 363,756 Interest income - 2,100 4,279 2,179 Total revenues 6,169,630 8,296,746 8,643,162 346,416 Expenditures: General government: Personal services 5,706,330 6,999,756 6,798,343 201,413 Operating expenditures 463,300 505,510 427,125 78,385 Total expenditures 6,169,630 7,505,266 7,225,468 279,798 Excess of revenues over expenditures - 791,480 1,417,694 626,214 Other financing(uses): Transfers out: Distribution of excess fees to State of Florida - (1,070,528) (1,696,742) 626,214 Total other financing(uses) - (1,070,528) (1,696,742) 626,214 Net change in fund balance - (279,048) (279,048) - Fund balance—beginning of year - 279,048 279,048 - Fund balance—end of year $ - $ - $ - $ - See accompanying Notes to Special-Purpose Financial Statements. 7 Collier County, Florida Clerk of the Circuit Court Special-Purpose Statement of Revenues, Expenditures, and Changes in Fund Balance— Budget and Actual Other Special Revenue Fund Year Ended September 30, 2013 Variance With Final Budget Budget Positive Original Final Actual (Negative) Revenues: Charges for services $ 1,166,000 $ 1,166,000 $ 1,934,596 $ 768,596 Interest income 8,100 8,100 7,539 (561) Total revenues 1,174,100 1,174,100 1,942,135 768,035 Expenditures: General government: Personal services 800,100 825,100 819,859 5,241 Operating expenditures 1,386,500 1,361,500 39,934 1,321,566 Capital outlay 258,400 408,400 - 408,400 Total expenditures 2,445,000 2,595,000 859,793 1,735,207 Net change in fund balance (1,270,900) (1,420,900) 1,082,342 2,503,242 Fund balance—beginning of year 2,504,665 3,582,382 3,466,920 (115,462) Fund balance—end of year $ 1,233,765 $ 2,161,482 $ 4,549,262 $ 2,387,780 See accompanying Notes to Special-Purpose Financial Statements. 8 Collier County, Florida Clerk of the Circuit Court Special-Purpose Statement of Fiduciary Net Position Agency Fund September 30, 2013 Assets Cash and cash equivalents $ 28,029,618 Liabilities Due to the Collier County, Florida Board of County Commissioners $ 330,721 Due to other governments 977,282 Deposits 26,721,615 Total liabilities $ 28,029,618 See accompanying Notes to Special-Purpose Financial Statements. 9 Collier County, Florida Clerk of the Circuit Court Notes to Special-Purpose Financial Statements September 30, 2013 1. Summary of Significant Accounting Policies Reporting Entity The Collier County, Florida Clerk of the Circuit Court(Clerk) is an elected constitutional officer as provided for by the Constitution of the State of Florida. The Clerk's budget is presented pursuant to Chapter 218, Florida Statutes. Additionally, a budget is submitted to the Florida Clerks of Court Operations Corporation for the Court Services Fund. The special-purpose financial statements presented include the general fund, special revenue funds, and agency funds of the Clerk's office. The accompanying special-purpose financial statements were prepared for the purpose of complying with Section 218.39, Florida Statutes, and Chapter 10.550,Rules of the Auditor General-Local Governmental Entity Audits. Chapter 10.550, Rules of the Auditor General - Local Governmental Entity Audits, requires the Clerk to only present fund financial statements. Accordingly, due to the omission of government- wide financial statements and related disclosures including a management's discussion and analysis, these special-purpose financial statements do not constitute a complete presentation of the financial position of the Clerk as of September 30, 2013 and the changes in its financial position for the year then ended in conformity with Governmental Accounting Standards Board (GASB) Statement No. 34, Basic Financial Statements— and Management's Discussion and Analysis—for State and Local Governments, but otherwise constitute special-purpose financial statements prepared in conformity with accounting principles generally accepted in the United States of America. The financial activities of the Clerk, as a constitutional officer, are included in the Collier County,Florida Comprehensive Annual Financial Report. The general operations of the Clerk are funded by: fees from third parties, appropriations from the Collier County, Florida Board of County Commissioners (Board), appropriations from the State of Florida, and interest income. Pursuant to Chapter 218 Florida Statutes, funds remaining in the general fund at fiscal year-end, in excess of amounts expended, are returned to the Board. Excess revenues returned to the Board are reflected as transfers out in the Clerk's general fund. Court-related operations are funded by the State via appropriations from the State of Florida and a child support grant. Any surplus state funding is returned to the State in August of each year. Special revenue funds are retained by the Clerk and budgeted according to requirements of each source. 10 Collier County, Florida Clerk of the Circuit Court Notes to Special-Purpose Financial Statements September 30, 2013 1. Summary of Significant Accounting Policies (continued) The State transitioned the Clerk in July, 2013 to be self-funded from fees and fines. Pursuant to Section 28.37, Florida Statute, any surplus revenues over expenditures will be returned to the State. Measurement Focus,Basis of Accounting, and Basis of Presentation These special-purpose fund financial statements report detailed information about the Clerk. The focus of governmental fund financial statements is on major funds rather than reporting funds by type. Each major fund is reported in a separate column. Governmental Funds Governmental funds are accounted for using the flow of current financial resources measurement focus. Only current assets and current liabilities, generally, are included on the special-purpose balance sheet. Operating statements for these funds present increases (i.e., revenues and other financing sources) and decreases (i.e., expenditures and other financing uses) in net current assets. The Clerk reports the following major governmental funds: General Fund—The general fund is used to account for all revenue and expenditures applicable to the general operations of the Clerk, which are not accounted for in another fund. All operating revenue not specifically restricted or designated as to use, is recorded in the general fund. Court Services Fund— The court services fund is a special revenue fund established to account for court-related filing fees, service charges, fines, court costs, appropriations and expenses of the Clerk as mandated by Section 28.35,Florida Statutes. Other Special Revenue Fund— (formerly the Public Records Modernization Fund) The other special revenue fund is a special revenue fund used to account for revenues mandated by Section 28.24(12)(d), Florida Statutes, to be held in trust by the Clerk and used exclusively for equipment and maintenance of equipment, personnel training, and technical assistance in modernizing the public records system of the office; and revenues mandated by Section 28.24(12)(e),Florida Statutes,to be used exclusively for funding court-related technology needs. This fund also accounts for revenues and expenditures pursuant to Section 28.37, Florida Statutes. 11 Collier County, Florida Clerk of the Circuit Court Notes to Special-Purpose Financial Statements September 30, 2013 1. Summary of Significant Accounting Policies (continued) The modified accrual basis of accounting is used by governmental funds. Under the modified accrual basis of accounting, revenues are recognized when susceptible to accrual (i.e., when they become measurable and available to finance liabilities of the current fiscal year). For this purpose, the Clerk considers revenues to be available if they are collected within 60 days after year-end. Expenditures are recorded when the related fund liability is incurred, except for certain compensated absences, which are recognized as expenditures to the extent they have matured. Charges for services, interest income, and other revenues are recognized as they are earned and become measurable and available to pay liabilities of the current period. With the implementation of Revision 7 to Article V on July 1, 2004, the Clerk's activities are classified as court-related and non-court-related. The Clerk's general fund activity, which is classified as non-court-related, is funded through service charges for recording instruments and documents into the official records, interest income and through transfers in from the Board of County Commissioners. Court-related activities are funded through an appropriation from the State of Florida and a child support grant. These revenues are to be used exclusively for funding court-related operations of the Clerk. Section 28.37,Florida Statutes,provides that all court related revenues are considered State revenue effective July 1, 2009, and are to be remitted monthly to the Department of Revenue. Beginning July 1, 2013 the requirement that all revenues received by the Clerk from fines, fees, costs, and service charges were removed. Excess of revenues over expenditures will be remitted to the State. Florida Statutes provide that the amount by which revenues and transfers exceed annual expenditures for the general fund be remitted to the Board immediately following the fiscal year for which the funding was provided or following the fiscal year during which other revenues were recognized. The amount of this distribution is recorded as a liability and as other financing use in the accompanying special-purpose financial statements. Capital outlays expended in governmental funds are capitalized in the basic financial statements of Collier County,Florida rather than in the governmental funds of the Clerk. 12 Collier County, Florida Clerk of the Circuit Court Notes to Special-Purpose Financial Statements September 30, 2013 1. Summary of Significant Accounting Policies (continued) Additionally,the Clerk reports the following fund type: Fiduciary Funds— Agency Funds— Agency funds are used to account for assets held by the Clerk in a trustee capacity or as an agent for individuals, private organizations, other governments, and other funds. The agency funds are custodial in nature (assets equal liabilities), and do not involve measurement of results of operations or have a measurement focus. Agency funds are accounted for using the full accrual basis of accounting. Cash Equivalents Cash equivalents are defined as highly liquid investments with original maturities of three months or less. The Clerk does not currently hold investments. Compensated Absences All full-time employees of the Clerk are allowed to accumulate an unlimited number of hours of unused sick leave and up to 240 hours of unused vacation leave (with limited exceptions per the employee manual). Upon termination, employees receive 100% of allowable accumulated vacation hours and a percentage of unused sick leave, depending on years of service. Vacation leave and sick leave are included in governmental funds when the payments are made to employees. The Clerk is not legally required to accumulate fmancial resources for these unmatured obligations. Accordingly,the liability for compensated absences is not reported in the Clerk's funds,but rather is reported in the basic financial statements of Collier County, Florida. Prepaid Expenses The Clerk has elected to follow GASB Codification 1600.127 Other Expenditure Recognition Alternatives and expends maintenance costs as they are incurred and does not allocate the cost between periods. 13 Collier County, Florida Clerk of the Circuit Court Notes to Special-Purpose Financial Statements September 30, 2013 1. Summary of Significant Accounting Policies (continued) Use of Estimates The preparation of these special-purpose financial statements requires management of the Clerk to make a number of estimates and assumptions relating to the reported amounts of assets and liabilities and the disclosure of contingent assets and liabilities at the date of the special-purpose financial statements and the reported amounts of revenues and expenditures during the period. Actual results could differ slightly from those estimates. Fund Balance Reporting and Governmental Fund-Type Definitions Fund balances are classified either as non-spendable or as spendable. Spendable fund balances are further classified in a hierarchy based on the extent to which there are external and/or internal constraints in how fund balance amounts may be spent. Non-spendable fund balances include amounts that cannot be spent because they are not in spendable form or are legally or contractually required to be maintained intact. There were no non-spendable fund balances at the Clerk as of September 30, 2013. Spendable fund balances are classified based on a hierarchy of the Clerk's ability to control the spending of these fund balances and are reported in the following categories: restricted, committed, assigned and unassigned. The Clerk's fund balances for the special revenue funds fall into the spendable restricted category. Fund balances maintained in the special revenue funds are restricted pursuant to certain Florida Statutes and have been presented as restricted fund balances in the fund financial statements in accordance with GASB Statement No. 54. When an expenditure is incurred for purposes for which both restricted and unrestricted fund balance is available,the Clerk considers restricted funds to have been spent first. When an expenditure is incurred for which committed, assigned, or unassigned fund balances are available, the Clerk considers amounts to have been spent first out of committed funds, then assigned funds, and finally unassigned funds, as needed, unless the Clerk has provided otherwise in its commitment or assignment actions. 14 Collier County, Florida Clerk of the Circuit Court Notes to Special-Purpose Financial Statements September 30,2013 1. Summary of Significant Accounting Policies (continued) Implementation of New Accounting Standards During the year the Clerk implemented GASBS 62, Codification of Accounting and Financial Reporting Guidance Contained in Pre-November 30, 1989 FASB and AICPA Pronouncements, supersedes GASBS 20. GASBS 20 gave governments the choice to elect to follow only GASB's authoritative literature, or to follow FASB and AICPA pronouncements that did not conflict with GASB pronouncements. Upon adoption of GASBS 62, all governmental accounting guidance is codified into the GASB literature. During the year the Clerk implemented GASBS 63, Financial Reporting of Deferred Outflows of Resources, Deferred Inflows of Resources, and Net Position. GASBS 63 provides guidance on deferred outflows and inflows of resources. It also renames the residual amounts from "net assets" to "net position". These financial statements include the statement of net position, which reports all assets, deferred outflows of resources, liabilities, deferred inflows of resources, and net position. 2. Budgetary Process Florida Statutes govern the preparation, adoption, and administration of the Clerk's annual budget. The Clerk prepares and approves the budget for the Clerk's non-court functions, including special revenue fund and the budget related to the recording function based on anticipated fees. The budget of the Clerk for the general fund transfer from the Board is submitted to and approved by the Board. Pursuant to Section 28.36,Florida Statutes, a balanced court-related budget must be prepared on or before October 1 (for the period starting the next July 1 through June 30) and submitted to the Florida Clerks of Court Operations Corporation(Corporation). If the Clerk estimates that projected revenues are insufficient to meet anticipated expenditures, the Clerk must report the revenue deficit to the Corporation. Once the Corporation verifies the revenue deficit, the Clerk can increase fees up to the maximum amounts specified by law to resolve the deficit. If a revenue deficit is still projected, a request can be submitted to release funds from the Department of Revenue Clerks of the Court Trust Fund. From July 1, 2009 through June 30, 2013, all revenues in the court fund are State revenues and remitted monthly to the State of Florida. Beginning July 1, 2013 the courts will be funded by charging fines and fees and any surplus will be remitted to the State. 15 Collier County, Florida Clerk of the Circuit Court Notes to Special-Purpose Financial Statements September 30,2013 2. Budgetary Process (continued) The budget is prepared on a basis consistent with accounting principles generally accepted in the United States of America, except for the classification and presentation of the distribution of excess court revenue to the State for the court services fund, which is treated as other financing use (transfer out) for budgetary purposes and as an expenditure in the special-purpose statement of revenues, expenditures, and changes in fund balance in the court services fund. The annual budget serves as the legal authorization for expenditures. Any subsequent amendments to the Clerk's transfer budget funded by the Board must be approved by the Board, amendments to the Clerk's fee budget are at the discretion of the Clerk, and any amendments of the court budget must be approved by the Corporation for the court services fund. Expenditures may not legally exceed appropriations at the fund level. Appropriations lapse at year end. Budgetary control is maintained at the departmental major object expenditure level. Budgetary changes within major object expenditure categories are made at the discretion of the Clerk. The original budget is the first complete appropriated budget. The final budget is the original budget adjusted by all reserves, transfers, allocations, supplemental appropriations, and other legally authorized changes applicable to the fiscal year. 3. Cash and Cash Equivalents At September 30, 2013, the carrying value of the Clerk's cash and cash equivalents was as follows: Carrying Type Maturity Value Credit Rating Cash on hand N/A $ 7,600 N/A Demand deposits N/A 38,557,558 N/A Total cash and cash equivalents $38,565,158 The Clerk maintains a cash pool for the deposits of all governmental and agency funds. Each fund type's portion of these balances is presented as cash and cash equivalents in the accompanying special-purpose financial statements. Interest income is allocated to each fund based on its proportionate balance in the pool. 16 Collier County, Florida Clerk of the Circuit Court Notes to Special-Purpose Financial Statements September 30, 2013 3. Cash and Cash Equivalents (continued) Cash and cash equivalents as of September 30, 2013, are reported as $10,535,540 and $28,029,618 in the governmental funds and fiduciary funds, respectively. Included in cash reported in the general fund is a $2 million deposit per an agreement for road development impact fees received from the developer, which is payable to the Collier County Board in 2014. Custodial Credit Risk At September 30, 2013, the Clerk's deposits were entirely covered by Federal Depository Insurance or by collateral pledged with the State Treasurer pursuant to Chapter 280, Florida Statutes. Under this Chapter, in the event of default by a participating financial institution (a qualified public depository), all participating institutions are obligated to reimburse the governmental entity for the loss. Credit Risk The Clerk's policy is to follow the guidance in Section 219.075, Florida Statutes, regarding the deposit of funds received and the investment of surplus funds. Sections 219.075 and 218.415, Florida Statutes, authorize the Clerk to invest in Florida PRIME (formerly the Local Government Surplus Funds Trust Fund) or any intergovernmental investment pool authorized pursuant to the Florida Inter-local Cooperation Act; Securities and Exchange Commission registered money market funds with the highest credit quality rating from a nationally recognized rating agency; direct obligations of the United States Treasury, federal agencies and instrumentalities, or interest-bearing time deposits or savings accounts in banks organized under the laws of the United States and doing business and situated in the State of Florida, savings and loan associations which are under state supervision, or in federal savings and loan associations located in the State of Florida and organized under federal law and federal supervision, provided that any such deposits are secured by collateral as may be prescribed by law. Additionally, Florida Statutes allow local governments to place public funds with institutions that participate in a collateral pool under the Florida Security for Public Deposits Act. The pool is administered by the State Treasurer, who may make additional assessments to ensure that no public funds will be lost. 17 Collier County, Florida Clerk of the Circuit Court Notes to Special-Purpose Financial Statements September 30, 2013 3. Cash and Cash Equivalents (continued) Interest Rate Risk The Clerk has no specific investment policy regarding interest rate risk and does not currently hold any investments. 4. Interest Income and Investment of County Funds Pursuant to Florida Statutes, Section 28.33, the Clerk invests all County funds in excess of those required to meet expenses. Interest income is allocated to each fund based on its proportionate balance in the pool. Interest income of$27,342 is reported in the general fund for the year ended September 30, 2013, as the portion of interest earned on Clerk funds. 5. Capital Assets Capital assets used by the governmental fund type operations are capitalized in the basic financial statements of Collier County, Florida rather than in the governmental funds of the Clerk. Upon acquisition, such assets are recorded as expenditures in the governmental funds of the Clerk and are capitalized at cost in the basic financial statements of Collier County, Florida. 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 value on the date received. The Clerk maintains custodial responsibility for the capital assets used by the office. No depreciation expense has been provided on capital assets in these special-purpose financial statements. However, depreciation expense on these assets is recorded in the basic financial statements of Collier County, Florida. 18 Collier County, Florida Clerk of the Circuit Court Notes to Special-Purpose Financial Statements September 30,2013 5. Capital Assets (continued) The following is a summary of changes in capital assets, which are reported in the basic financial statements of Collier County, Florida: October 1, Reclas- September 30, 2012 Additions Deductions sifications 2013 Capital assets not depreciated: Construction in progress $ 146,000 $ 74,525 $ - $(220,525) $ - Capital assets depreciated: Machinery and equipment 8,064,373 129,410 (901,917) 220,525 7,512,391 Less accumulated depreciation (4,108,950) (898,432) 643,504 - (4,363,878) Total capital assets depreciated 3,955,423 (769,022) (258,413) 220,525 3,148,513 Total capital assets,net $ 4,101,423 $(694,497) $ (258,413) $ - $ 3,148,513 6. Long-Term Liabilities The following is a summary of changes in long-term liabilities which are reported in the basic financial statements of Collier County, Florida: October 1, September 30, 2012 Additions Deletions 2013 Accrued compensated absences $ 1,760,636 $ 935,597 $ 775,706 $ 1,920,527 Of these liabilities, $846,184 is expected to be paid during the fiscal year ending September 30, 2014. These long-term liabilities are not reported in the special-purpose financial statements of the Clerk since they have not matured. 19 Collier County, Florida Clerk of the Circuit Court Notes to Special-Purpose Financial Statements September 30, 2013 7. Employee Retirement Plan Substantially all full-time employees of the Clerk filling regularly established positions are eligible to participate in the State of Florida Retirement System (System), a cost-sharing multiple-employer defined benefit plan administered by the State of Florida, Division of Retirement. The System is a defined benefit plan for all state, and participating county, district school board, community college and university employees (Pension Plan). The System also offers eligible employees participation in an alternative defined Employee Retirement Plan contribution plan (Investment Plan). The Clerk participates in the Elected State Officers' Class. The plan is administered by the State of Florida. Contribution rates are established statewide for all participating governmental units. Accordingly, the actuarial information and related disclosures attributable to the Clerk's employees are not determinable. Employees enrolled in the plan prior to July 1, 2011, who retire at or after age 62 with 6 years of credited service, or with 30 years of service regardless of age, are entitled to a retirement benefit, payable monthly for life, equal to 1.6% for regular employees, 2% for senior management and 3% for County Elected Officials for each year of credited service times the final average compensation. Employees enrolled on or after July 1, 2011, who retire at or after age 65 with 8 years of credited service or 33 years of service regardless of age, are entitled to the retirement benefits as outlined above. Final average compensation is the employee's average of the five highest fiscal years of salary earned during credited service for those enrolled prior to July 1, 2011, and the eight highest fiscal years of salary for those hired on or after July 1, 2011. Vested employees may retire before age 62 and receive benefits that are reduced 5% for each year prior to normal retirement age. Employees participating in the Investment Plan are vested after one year of service with no age requirement. The System also provides death and disability benefits. Benefits are established by Chapter 121, Florida Statutes, and Chapter 22B, Florida Administrative Code. The Deferred Retirement Option Program (DROP) is a program that provides an alternative method for payment of retirement benefits for a specified and limited period for members of the System, effective July 1, 1998. Under this program, employees may participate as of their normal retirement date and have their benefits accumulated in the Florida Retirement System Trust Fund, earning interest, while continuing to work for a System employer. Employees enrolled in DROP prior to July 1, 2011, earn interest on accumulated benefits in the Trust Fund at 6.5%, those enrolling on or after July 1, 2011, earn interest at 1.3%. The participation in the program does not change conditions of employment. When the DROP period ends, maximum of 60 months, employees must terminate employment. 20 Collier County, Florida Clerk of the Circuit Court Notes to Special-Purpose Financial Statements September 30, 2013 7. Employee Retirement Plan (continued) Elected Officials participating in DROP may continue to serve in office without voiding DROP or retirement benefits as long as the Elected Official continues in that term of office or successive terms of office. At the time of termination of employment, the employee or Elected Official will receive payment of the accumulated DROP benefits, and begin receiving their monthly retirement benefit (in the same amount determined at retirement, plus annual cost-of- living increases). Investment Plan members are not eligible to participate in the DROP program, but Pension Plan members are eligible to roll their DROP lump sum into the Investment Plan as one of the distribution methods under the Pension Plan. The System publishes an annual report that provides ten-year historical trend information about progress made in accumulating sufficient assets to pay benefits when due. This report may be obtained by writing to the Division of Retirement Research Education and Policy Section 1317 Winewood Boulevard, Building 8, Tallahassee, Florida 32399-1560, or by calling (877) 377-1737, or accessing their Internet site at www.dms.MyFlorida.com. The Clerk is required to contribute an actuarially determined rate. Rates from October 1, 2012 through June 30, 2013, were 10.23% for County Elected Officials, 6.3% for senior management, 5.18% for regular employees and 5.44% for DROP employees based on covered payroll. The current rates, effective July 1, 2013, are 33.03% for county elected officials, 18.31% for senior management, 6.95% for regular employees and 12.84% for DROP employees based on covered payroll. In addition, as of July 1, 2011, employee contributions of 3% are required of all Pension Plan and Investment Plan members, except for those in DROP. The contribution requirements of the Clerk are established and may be amended by the State of Florida. The Clerk's employer contributions to the plan for the years ended September 30, 2013, 2012 and 2011, were $562,051, $452,954 and $853,455, respectively, equal to the required contributions for each year. 21 Collier County, Florida Clerk of the Circuit Court Notes to Special-Purpose Financial Statements September 30, 2013 8. Related Party Transactions The Board provided funding for the Clerk in the amount of $5,475,200. The Supervisor of Elections provided funding in the amount of a $37,000 fee for financial services performed by the Clerk. At September 30, 2013, the Clerk had a payable due to the Board of $1,005,610 comprised as follows: Distribution of excess fees $ 674,776 Amounts due for various services 113 Agency funds due 330,721 Total due to Board of County Commissioners $ 1,005,610 9. Risk Management Collier County, Florida (County) is exposed to various risks of loss, including,but not limited to, general liability, health and life, property and casualty, auto and physical damage, and workers' compensation. The County is substantially self-insured and accounts for and finances its risk of uninsured losses through an internal service fund. All liabilities associated with these self- insured risks are reported in the basic financial statements of the County. During the year ended September 30, 2013, the Clerk was charged $2,805,310 by the County for participation in the risk management program. The County retains the first $500,000 per claim for workers' compensation, and has purchased outside excess coverage for up to the statutory limits for each injury and illness. The County also provides coverage for $200,000 per occurrence for general liability and auto liability coverage and has purchased outside excess coverage for up to $5 million per claim. Negligence claims in excess of the statutory limits set in Section 768.28, Florida Statutes, which provide for limited sovereign immunity of$200,000/$300,000 per occurrence can only be recovered through an act of the State Legislature. Property claims are subject to a 5% wind deductible and a $50,000 deductible for all other perils. The County retains the first $1 00,000 per claim/$200,000 per occurrence for public official errors and omissions and crime coverage and has purchased outside excess coverage for up to $5 million per claim. There have been no significant reductions in insurance coverage in the last year. Settled claims have not exceeded the insurance provided by third party carriers in any of the last three years. 22 Collier County, Florida Clerk of the Circuit Court Notes to Special-Purpose Financial Statements September 30, 2013 9. Risk Management(continued) The County is self-insured for health claims covering all of its employees and their eligible dependents. The County retains the first $325,000 per covered member and has purchased outside excess coverage for all claims exceeding this amount. An actuarial valuation is performed each year to estimate the amounts needed to pay prior and future claims and to establish reserves. 10. Other Postemployment Healthcare Benefits (OPEB) Plan The Clerk follows GASB Statement 45, Accounting and Financial Reporting by Employers for Postemployment Benefits other than Pensions in accounting for its post-employment benefits. Plan Description The Clerk participates in a group health care plan that covers eligible retirees, and their dependents, of the Board and all Constitutional Officers with the exception of the Sheriff. The Board administers the plan and establishes the benefits. The healthcare plan does not issue a stand-alone financial report, however additional actuarial information regarding the plan as a whole is disclosed in the notes to the financial statements of Collier County, Florida. Under Florida Statutes, retirees originally hired prior to July 1, 2011, are eligible to participate in the active medical plan by paying the active rate if they have attained age 62 and have 6 years of service or have at least 30 years of service. Employees hired on or after July 1, 2011 are eligible to participate in the active medical plan by paying the active rate if they have attained age 65 and have 8 years of service or have at least 33 years of service. Employees eligible for a reduced benefit under the Florida Retirement System prior to age 62 (65 if hired on or after July 1, 2011) are also eligible to participate in the medical plan. The Clerk provides no subsidy to the retiree, or their dependents, for group health care. Funding Policy The contribution requirements of the plan members and the employers are established and may be amended by the County. The plans are financed by the participating agencies on a pay as you go basis through the County's self-insurance internal service fund. Participating agencies contribute an additional amount per each active employee to fund retiree health care. The Clerk had a net OPEB obligation of$39,055 as of September 30, 2013. 23 Collier County, Florida Clerk of the Circuit Court Notes to Special-Purpose Financial Statements September 30, 2013 10. Other Postemployment Healthcare Benefits (OPEB) Plan (continued) The annual other postemployment benefit cost is calculated based on the annual required contribution of the employer (ARC), an amount actuarially determined in accordance with GASB Statement 45. The ARC represents a level of funding that, if paid by on an ongoing basis, is projected to cover normal cost each year and amortize any unfunded actuarial liabilities over a period not to exceed thirty years. An actuarial valuation on the plan as a whole was performed in November 2013. The notes to the financial statements of the County disclose additional information regarding the other post employment benefit plan as a whole. 11. Claims and Contingencies Litigation The Clerk is routinely involved as defendant, plaintiff and as a"party in interest" in carrying out its statutorily and constitutionally assigned tasks. During the year ended September 30, 2013, the Clerk was involved in approximately 95,610 collection cases. These are court actions designed to collect fees and costs imposed by the courts in criminal cases. The Clerk was involved in approximately 335 bond forfeiture actions. Those cases involve collecting forfeitures of criminal appearance bonds. There are approximately 29 actions for foreclosure of property in which the Clerk has been a named defendant. The Clerk is involved in a class action involving the constitutionality of a Florida Statute relating to ownership of interest earned on monies paid into the registry of the court and an inverse condemnation allegation asserting that the Clerk has improperly retained interest accruing on funds in the court's registry. The Clerk filed a Motion to Dismiss, which was denied. The Clerk has petitioned the Second District Court of Appeals to review. Review by that Court was denied. The Clerk has filed various motions for summary judgment. Hearings have been held but a written order has not yet been entered. The trial court has not yet ruled on the viability of a class action in this matter. The Clerk has and will continue to vigorously defend this action The Clerk is also involved in a matter involving Collier County Board of County Commissioners, the Clerk and a private individual asserting the individual is owed approximately $15,000 for work performed in a housing rehabilitation program. Due to irregularities in the housing program and questions to the legality of paying the plaintiff on behalf of the Commissioners, the Clerk did not pay the plaintiff. The Clerk is vigorously defending this action. 24 Collier County, Florida Clerk of the Circuit Court Combining Special-Purpose Statements of Fiduciary Net Position All Agency Funds September 30, 2013 Jury and Clerk's Court Ordinary Agency Registry Witness Total Assets Cash and cash equivalents $ 9,399,723 $ 18,603,655 $ 26,240 $ 28,029,618 Liabilities Due to Collier County,Florida Board of County Commissioners $ 330,721 $ - $ - $ 330,721 Due to other governments 951,042 - 26,240 977,282 Deposits 8,117,960 18,603,655 - 26,721,615 Total liabilities $ 9,399,723 $ 18,603,655 $ 26,240 $ 28,029,618 25 111160Ak CliftonLarsonAllen LLP / CLAconnect.com CliftonLarsonAllen INDEPENDENT AUDITORS' REPORT ON INTERNAL CONTROL OVER FINANCIAL REPORTING AND ON COMPLIANCE AND OTHER MATTERS BASED ON AN AUDIT OF FINANCIAL STATEMENTS PERFORMED IN ACCORDANCE WITH GOVERNMENT AUDITING STANDARDS Honorable Dwight E. Brock Clerk of the Circuit Court Collier County,Florida We have audited, in accordance with the auditing standards generally accepted in the United States of America and the standards applicable to financial audits contained in Government Auditing Standards issued by the Comptroller General of the United States, the special-purpose financial statements of each major fund and the aggregate remaining fund information of the Collier County, Florida Clerk(Clerk), as of and for the year ended September 30, 2013, and the related notes to the special-purpose financial statements, which collectively comprise the Clerk's financial statements, and have issued our report thereon dated December 23,2013. Internal Control Over Financial Reporting In planning and performing our audit of the special-purpose financial statements, we considered the Clerk's internal control over financial reporting (internal control) to determine the audit procedures that are appropriate in the circumstances for the purpose of expressing our opinions on the special-purpose financial statements, but not for the purpose of expressing an opinion on the effectiveness of the Clerk's internal control.Accordingly, we do not express an opinion on the effectiveness of the Clerk's internal control. A deficiency in internal control exists when the design or operation of a control does not allow management or employees, in the normal course of performing their assigned functions, to prevent, or detect and correct, misstatements on a timely basis. A material weakness is a deficiency, or a combination of deficiencies, in internal control, such that there is a reasonable possibility that a material misstatement of the entity's special- purpose fmancial statements will not be prevented, or detected and corrected on a timely basis. A significant deficiency is a deficiency, or a combination of deficiencies, in internal control that is less severe than a material weakness,yet important enough to merit attention by those charged with governance. Our consideration of internal control was for the limited purpose described in the first paragraph of this section and was not designed to identify all deficiencies in internal control that might be material weaknesses or significant deficiencies. Given these limitations, during our audit we did not identify any deficiencies in internal control that we consider to be material weaknesses. However, material weaknesses may exist that have not been identified. NF x 1 A Pro i^ narbsdNaiaYtenetimel 26 INTERNATIONAL Honorable Dwight E. Brock Clerk of the Circuit Court Compliance and Other Matters As part of obtaining reasonable assurance about whether the Clerk's special-purpose financial statements are free from material misstatement, we performed tests of its compliance with certain provisions of laws, regulations, contracts, and grant agreements, noncompliance with which could have a direct and material effect on the determination of financial statement amounts. However, providing an opinion on compliance with those provisions was not an objective of our audit, and accordingly, we do not express such an opinion. The results of our tests disclosed no instances of noncompliance or other matters that are required to be reported under Government Auditing Standards. Purpose of this Report The purpose of this report is solely to describe the scope of our testing of internal control and compliance and the result of that testing, and not to provide an opinion on the effectiveness of the entity's internal control or on compliance. This report is an integral part of an audit performed in accordance with Government Auditing Standards in considering the entity's internal control and compliance. Accordingly, this communication is not suitable for any other purpose. CliftonLarsonAllen LLP Naples,Florida December 23,2013 27 41144P III LLP / CLAconnect.com CliftonLarsonAllen MANAGEMENT LETTER Honorable Dwight E. Brock Clerk of the Circuit Court Collier County,Florida We have audited the special-purpose financial statements of the Collier County, Florida Clerk of the Circuit Court(Clerk), as of and for the fiscal year ended September 30, 2013 and have issued our report thereon dated December 23,2013. 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 and Chapter 10.550 Rules of the Florida Auditor General. We have issued our Independent Auditors' Report on Internal Control over Financial Reporting and Compliance and Other Matters based on an Audit of Financial Statements Performed in Accordance with Government Auditing Standards. Disclosures in that report which is dated December 23, 2013, should be considered in conjunction with this management letter. Additionally, our audit was conducted in accordance with the Chapter 10.550, Rules of the Auditor General, which govern the conduct of local governmental entity audits performed in the State of Florida. This letter includes the following information,which is not included in the aforementioned auditors' 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. Corrective actions have been taken to address findings and recommendations made in the preceding annual financial audit report. ➢ Section 10.554(1)(i)2., Rules of the Auditor General, requires our audit to include a review of the provisions of Section 218.415, Florida Statutes, regarding the investment of public funds. In connection with our audit, we determined that the Clerk complied with Section 218.415, Florida Statutes. ➢ Section 10.554(1)(i)3., Rules of the Auditor General, requires that we address in the management letter any recommendations to improve financial management. In connection with our audit, we did not have any such recommendations. ➢ Section 10.554(1)(i)4., Rules of the Auditor General, requires that we address noncompliance with the provisions of contracts or grant agreements, or abuse, that have occurred, or are likely to have occurred, that have an effect on the financial statements that is less than material but which warrants the attention of those charged with governance. In connection with our audit, we did not have any such findings. NEXIA M n d aK 28 INTERNATIONAL Honorable Dwight E.Brock Clerk of the Circuit Court ➢ Section 10.554(1)(i)5., Rules of the Auditor General, requires that the name or official title and legal authority for the primary government and each component unit of the reporting entity be disclosed in this management letter, unless disclosed in the notes to the special-purpose fmancial statements. See Note 1 in the notes to special-purpose financial statements. ➢ Section 10.554(1)(i)7., Rules of the Auditor General, requires a statement as to whether or not the Clerk of the Courts complied with the requirements of Sections 28.35 and 28.36, Florida Statues. In connection with our audit,we determined that the Clerk complied with such requirements. Our management letter is intended solely for the information and use of the Legislative Auditing Committee, members of the Florida Senate and the Florida House of Representatives, the Florida Auditor General, Federal and other granting agencies, and applicable management and is not intended to be and should not be used by anyone other than these specified parties. ele;fid7e-ZdA4.0-7&1//0-,<_ LLB CliftonLarsonAllen LLP Naples,Florida December 23, 2013 29 Collier County, Florida Property Appraiser Special-Purpose Financial Statements and Supplemental Reports Year Ended September 30, 2013 Collier County, Florida Property Appraiser Special-Purpose Financial Statements and Other Reports Year Ended September 30,2013 Contents Independent Auditors' Report 1 Special-Purpose Financial Statements Special-Purpose Balance Sheets—General Fund 3 Special-Purpose Statements of Revenues, Expenditures, and Changes in Fund Balance—General Fund 4 Special-Purpose Statement of Revenues, Expenditures, and Changes in Fund Balance—Budget and Actual—General Fund—Budgetary Basis 5 Notes to Special-Purpose Financial Statements 6 Other Reports Independent Auditors' Report on Internal Control Over Financial Reporting and on Compliance and Other Matters Based on an Audit of Special-Purpose Financial Statements Performed in Accordance with Government Auditing Standards 18 Management Letter 20 Schedule of Findings and Responses 22 CliftonLarsonAllen LLP CLAconnect.com CliftonLarsonAllen INDEPENDENT AUDITORS'REPORT Honorable Abe Skinner Property Appraiser Collier County,Florida Report on the Special-Purpose Financial Statements We have audited the accompanying special-purpose financial statements of the general fund of the Collier County,Florida Property Appraiser(Property Appraiser),as of and for the year ended September 30,2013,and the related notes to the special-purpose financial statements, which collectively comprise the entity's financial statements as listed in the table of contents. Management's Responsibility for the Financial Statements Management is responsible for the preparation and fair presentation of these special-purpose financial statements in accordance with the basis of accounting practices specified by the Rules of the Auditor General, State of Florida for financial statements of constitutional officers. Management is also responsible for the design,implementation,and maintenance of internal control relevant to the preparation and fair presentation of special-purpose financial statements that are free from material misstatement,whether due to error or fraud. Auditors'Responsibility Our responsibility is to express an opinion on these special-purpose financial statements based on our audit. We conducted our audit in accordance with auditing standards generally accepted in the United States of America and the standards applicable to financial audits contained in Government Auditing Standards, issued by the Comptroller General of the United States.Those standards require that we plan and perform the audit to obtain reasonable assurance about whether the special-purpose financial statements are free from material misstatement. An audit involves performing procedures to obtain audit evidence about the amounts and disclosures in the special-purpose financial statements.The procedures selected depend on the auditors'judgment,including the assessment of the risks of material misstatement of the special-purpose financial statements, whether due to fraud or error. In making those risk assessments,the auditor considers internal control relevant to the entity's preparation and fair presentation of the special-purpose financial statements in order to design audit procedures that are appropriate in the circumstances,but not for the purpose of expressing an opinion on the effectiveness of the entity's internal control.Accordingly,we express no such opinion.An audit also includes evaluating the appropriateness of accounting policies used and the reasonableness of significant accounting estimates made by management,as well as evaluating the overall presentation of the special-purpose financial statements. We believe that the audit evidence we have obtained is sufficient and appropriate to provide a basis for our audit opinion. NE\i \ PnotepaniertnerrterdNexelrternatical 0+7E11NA110NAL 1 Honorable Abe Skinner Property Appraiser Opinion In our opinion, the special-purpose financial statements referred to above present fairly, in all material respects,the financial position of the general fund of the Property Appraiser as of September 30,2013,and the respective changes in financial position and the budgetary comparison for the general fund thereof for the year then ended in accordance with the financial reporting provisions of the Rules of the Auditor General, State of Florida as described in Note 1. Basis of Accounting We draw attention to Note 1 of the special-purpose financial statements, which describes the basis of accounting. The special-purpose financial statements are prepared on the basis of the financial reporting provisions of the Rules of the Auditor General, State of Florida, which is a basis of accounting other than accounting principles generally accepted in the United States of America,to comply with the requirements of the Rules of the Auditor General, State of Florida. Our opinion is not modified with respect to that matter. Other Reporting Required by Government Auditing Standards In accordance with Government Auditing Standards,we have also issued our report dated December 27,2013, on our consideration of the Property Appraiser's internal control over financial reporting and on our tests of its compliance with certain provisions of laws, regulations, contracts, and grant agreements and other matters. The purpose of that report is to describe the scope of our testing of internal control over financial reporting and compliance and the result of that testing, and not to provide an opinion on internal control over financial reporting or on compliance. That report is an integral part of an audit performed in accordance with Government Auditing Standards in considering Property Appraiser's internal control over financial reporting and compliance. Restriction on Use This report is intended solely for the information and use of the Property Appraiser and the Auditor General, State of Florida,and is not intended to be and should not be used by anyone other than these specified parties. 0-at l.(a,c LLB CliftonLarsonAllen LLP Naples,Florida December 27, 2013 2 Collier County, Florida Property Appraiser Special-Purpose Balance Sheet— General Fund September 30, 2013 Assets Cash and cash equivalents $ 1,330,552 Total assets $ 1,330,552 Liabilities and fund balance Liabilities: Accounts payable and accrued expenses $ 158,350 Due to Collier County, Florida Board of County Commissioners 1,053,859 Due to other taxing districts 118,343 Total liabilities 1,330,552 Fund balance - Total liabilities and fiord balance $ 1,330,552 See accompanying Notes to Special-Purpose Financial Statements. 3 Collier County, Florida Property Appraiser Special-Purpose Statement of Revenues, Expenditures, and Changes in Fund Balance General Fund Year Ended September 30, 2013 Revenues: Commissions and fees $ 6,354,001 Miscellaneous 808,198 Interest 1,591 Total revenues 7,1 63,790 Expenditures: General government: Personal services 4,333,799 Operating 1,529,200 Capital outlay 128,589 Distribution of excess fees to other taxing districts 118,343 Total expenditures 6,109,931 Excess of revenues over expenditures 1,053,859 Other financing uses: Distribution of excess fees to Collier County, Florida Board of County Commissioners (1,053,859) Total other financing uses (1,053,859) Net Change in Fund Balance - Fund balance,beginning of year - Fund balance, end of year $ - See accompanying Notes to Special-Purpose Financial Statements. 4 Collier County, Florida Property Appraiser Special-Purpose Statements of Revenues, Expenditures, and Changes in Fund Balance—Budget and Actual General Fund (Budgetary Basis) Year Ended September 30, 2013 Variance With Final Budget Budget Positive Original Final Actual (Negative) Revenues: Commissions and fees $ 6,381,799 $ 6,381,799 $ 6,354,001 $ (27,798) Interest Revenue - - 1,591 1,591 Miscellaneous - - 808,198 808,198 Total revenues 6,381,799 6,381,799 7,163,790 781,991 Expenditures: General government: Personal services 5,042,882 5,042,882 4,333,799 709,083 Operating 1,313,917 1,313,917 1,529,200 (215,283) Capital outlay 25,000 25,000 128,589 (103,589) Total expenditures 6,381,799 6,381,799 5,991,588 390,211 Excess of revenues over expenditures - - 1,172,202 1,172,202 Other financing uses: Distribution of excess fees to Collier County,Florida Board of County Commissioners - - 1,053,859 1,053,859 Distribution of excess commissions and fees to other governmental agencies - - 118,343 118,343 Total other financing uses - - 1,172,202 1,172,202 Net Change in Fund Balance - - - Fund balance,beginning of year - - - - Fund balance,end of year $ - $ - $ - $ - See accompanying Notes to Special-Purpose Financial Statements. 5 Collier County, Florida Property Appraiser Notes to Special-Purpose Financial Statements September 30, 2013 1. Summary of Significant Accounting Policies Reporting Entity The Collier County, Florida Property Appraiser (Property Appraiser) is an elected constitutional officer as provided for by the Constitution of the State of Florida.Pursuant to Chapter 129,Florida Statutes, the Property Appraiser's budget is submitted to the Florida Department of Revenue for approval, and a copy is forwarded to the Collier County,Florida Board of County Commissioners (Board). The special-purpose financial statements presented include the general fund of the Property Appraiser's office. The accompanying special-purpose financial statements were prepared for the purpose of complying with Section 218.39, Florida Statutes, and Chapter 10.550, Rules of the Auditor General Local- Governmental Entity Audits. Chapter 10.550, Rules of the Auditor General - Local Governmental Entity Audits, requires the Property Appraiser to only present fund financial statements. Accordingly, due to the omission of government-wide financial statements and related disclosures, including a management's discussion and analysis, these special-purpose financial statements do not constitute a complete presentation of the financial position of the Property Appraiser as of September 30, 2013 and the changes in its financial position for the year then ended, in conformity with Governmental Accounting Standards Board (GASB) Statement No. 34, Basic Financial Statements— and Management's Discussion and Analysis— for State and Local Governments, but otherwise constitute special-purpose financial statements prepared in conformity with accounting principles generally accepted in the United States of America. The fmancial activities of the Property Appraiser, as a constitutional officer, are included in the Collier County, Florida Comprehensive Annual Financial Report. Measurement Focus,Basis of Accounting, and Basis of Presentation These special-purpose fund financial statements report detailed information about the Property Appraiser. The focus of governmental fund financial statements is on major funds rather than reporting funds by type. Each major fund is reported in a separate column. 6 Collier County, Florida Property Appraiser Notes to Special-Purpose Financial Statements September 30, 2013 1. Summary of Significant Accounting Policies (continued) Governmental Funds Governmental funds are accounted for using the flow of current financial resources measurement focus. Only current assets and current liabilities, generally, are included on the special-purpose balance sheet. Operating statements for these funds present increases (i.e., revenues and other financing sources) and decreases(i.e., expenditures and other financing uses)in net current assets. The Property Appraiser's only governmental fund is the general fund. The general fund is used to account for the general operations of the Property Appraiser and includes all transactions not accounted for in another fund. The modified accrual basis of accounting is used by governmental funds. Under the modified accrual basis of accounting, revenues are recognized when susceptible to accrual (i.e., when they become measurable and available to finance liabilities of the current fiscal year). For this purpose, the Property Appraiser considers revenues to be available if they are collected within 60 days after year-end. Expenditures are recorded when the related fund liability is incurred, except for certain compensated absences, which are recognized as expenditures to the extent they have matured. Interest revenue and miscellaneous revenue are recognized as they are earned and become measurable and available to pay liabilities of the current period. Substantially all of the Property Appraiser's revenue is received from taxing authorities. These monies are virtually unrestricted and are revocable only for failure to comply with prescribed compliance requirements. These resources are reflected as revenue at the time of receipt; earlier if the"susceptible to accrual"criteria are met. Florida Statutes provide that the amount by which revenues exceed annual expenditures be remitted to each governmental agency or the Board immediately following the fiscal year for which the funding was provided or following the fiscal year during which other revenue was recognized. Capital outlays expended in the general fund operations are capitalized in the basic financial statements of Collier County, Florida rather than in the governmental funds of the Property Appraiser. 7 Collier County, Florida Property Appraiser Notes to Special-Purpose Financial Statements September 30, 2013 1. Summary of Significant Accounting Policies (continued) Refund of"Excess Fees" Florida Statutes further provide that the excess of revenues over expenditures held by the Property Appraiser be distributed to each governmental agency or the Board in the same proportion as the fees paid by each governmental agency bear to total fee revenues. The amount of this distribution is recorded as a liability and as either an expenditure or other financing use-transfer out, respectively, in the accompanying special-purpose financial statements. Cash and Cash Equivalents Cash and cash equivalents are highly liquid investments with original maturities of three months or less. Compensated Absences All full-time employees of the Property Appraiser are allowed to accumulate an unlimited number of hours of unused sick leave and up to 200 hours of unused vacation leave. Upon termination, employees receive 100%of allowable accumulated vacation hours and a percentage of unused sick leave,depending on years of service,not to exceed 1,040 hours. Vacation and sick leave payments are included in operating costs of the general fund when the payments are made to the employees. The Property Appraiser does not, nor is legally required to, accumulate financial resources for these unmatured obligations. Accordingly, the liability for compensated absences is not reported in the general fund of the Property Appraiser, but rather is reported in the basic financial statements of Collier County, Florida. Prepaid Expenses The Property Appraiser has elected to follow GASB Codification 1600.127 Other Expenditure Recognition Alternatives and expends maintenance costs as they are incurred and does not allocate the cost between periods. 8 Collier County, Florida Property Appraiser Notes to Special-Purpose Financial Statements September 30, 2013 1. Summary of Significant Accounting Policies (continued) Use of Estimates The preparation of the special-purpose financial statements requires management of the Property Appraiser to make a number of estimates and assumptions relating to the reported amounts of assets and liabilities and the disclosure of contingent assets and liabilities at the date of the special-purpose financial statements and the reported amounts of revenues and expenditures during the period. Actual results could differ from those estimates. Implementation of New Accounting Standards During the year,the Property Appraiser implemented GASBS 62, Codification of Accounting and Financial Reporting Guidance Contained in Pre-November 30, 1989 FASB and AICPA Pronouncements, supersedes GASBS 20. GASBS 20 gave governments the choice to elect to follow only GASB's authoritative literature, or to follow FASB and AICPA pronouncements that did not conflict with GASB pronouncements. Upon adoption of GASBS 62, all governmental accounting guidance is codified into the GASB literature. 2.Budgetary Process Florida Statutes govern the preparation, adoption, and administration of the Property Appraiser's annual budget. The Property Appraiser prepares a budget for the general fund to the Florida Department of Revenue for approval.A copy of the approved budget is provided to the Board. Any subsequent amendments to the Property Appraiser's total budget must be approved by the Florida Department of Revenue. The budget for the general fund is prepared on a basis consistent with accounting principles generally accepted in the United States of America. The annual budget serves as the legal authorization for expenditures. Expenditures may not legally exceed appropriations at the fund level. Appropriations lapse at year end. Budget control is maintained at the departmental major object expenditure level. Budgetary changes within major object expenditure categories are made at the discretion of the Property Appraiser. The original budget is the first complete appropriated budget. The final budget is the original budget adjusted by all reserves, transfers, allocations, supplemental appropriations, and other legally authorized changes applicable to the fiscal year, whenever legally authorized. 9 Collier County, Florida Property Appraiser Notes to Special-Purpose Financial Statements September 30, 2013 2.Budgetary Process (continued) The Property Appraiser's budget is prepared under a budgetary basis of accounting that differs from generally accepted accounting principles (GAAP). Certain revenues received from non ad valorem commissions and other sources and expenditures paid for from these revenues are not recognized under the budgetary basis of accounting;however,the revenues and expenditures have been recognized under GAAP. Additionally, there is a difference between the budgetary basis of accounting and GAAP in the treatment of excess fee distributions to entities outside of the County's reporting entity. On a budgetary basis, distributions of excess fees are reported as other financing uses. On a GAAP basis,these distributions are reported as expenditures because there is a reduction in financial resources of the County. The actual results of operations in the statement of revenues and expenditures,and changes in fund balance — budget to actual — general fund are presented on a budgetary basis. Adjustments to convert the results of operations for the year ended September 30, 2013, from the budgetary basis of accounting to the GAAP basis of accounting are as follows: Miscellaneous Revenues Budgetary Basis $ - Revenues not budgeted: Miscellaneous 808,198 Interest 1,581 GAAP Basis $ 809,779 During the year,the Property Appraiser exceeded the budgeted amount for operating expenditures and capital outlay mainly as a result of equipment, professional services and contractual services related expenditures which were not expected at the time of the budget preparation. These budget overages were offset by budget savings in the personnel services category, and the recognition of unbudgeted revenues, such that overall, total expenditures were less than the total budgeted expenditure amount. 10 Collier County, Florida Property Appraiser Notes to Special-Purpose Financial Statements September 30, 2013 3. Cash and Cash Equivalents At September 30, 2013, the carrying value of the Property Appraiser's cash and cash equivalents was as follows: Carrying Type Value Cash on hand $ 125 Demand deposits 1,330,427 Total cash and cash equivalents $ 1,330,552 Custodial Credit Risk At September 30, 2013, the Property Appraiser's deposits were entirely covered by Federal Depository Insurance or by collateral pledged with the State Treasurer pursuant to Chapter 280, Florida Statutes. Under this Chapter, in the event of default by a participating financial institution (a qualified public depository), all participating institutions are obligated to reimburse the governmental entity for the loss. Credit Risk The Property Appraiser's policy is to follow the guidance in Section 219.075, Florida Statutes, regarding the deposit of funds received and the investment of surplus funds. Sections 219.075 and 218.415,Florida Statutes, authorize the Property Appraiser to invest in Florida PRIME(formerly the Local Government Surplus Funds Trust)or any intergovernmental investment pool authorized pursuant to the Florida Interlocal Cooperation Act; Securities and Exchange Commission registered money market funds with the highest credit quality rating from a nationally recognized rating agency; direct obligations of the United States Treasury; federal agencies and instrumentalities or interest-bearing time deposits or savings accounts in banks organized under the laws of the United States and doing business and situated in the State of Florida, savings and loan associations which are under state supervision, or in federal savings and loan associations located in the State of Florida and organized under federal law and federal supervision, provided that any such deposits are secured by collateral as may be prescribed by law. The pool is administered by the State Treasurer, who may make additional assessments to ensure that no public funds will be lost. 11 Collier County, Florida Property Appraiser Notes to Special-Purpose Financial Statements September 30, 2013 3. Cash and Cash Equivalents (continued) Interest Rate Risk The Property Appraiser has no specific investment policy regarding interest rate risk. 4. Capital Assets Capital assets used by the Property Appraiser are capitalized in the basic financial statements of Collier County, Florida rather than in the governmental funds of the Property Appraiser. Upon acquisition,such assets are recorded as expenditures in the general fund of the Property Appraiser, and are capitalized at cost in the basic financial statements of Collier County, Florida. 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 value on the date received. The Property Appraiser maintains custodial responsibility for the capital assets used by the office. No depreciation expense has been provided on capital assets in these special-purpose financial statements. However, depreciation expense on these assets is recorded in the basic financial statements of Collier County, Florida. The following is a summary of changes in capital assets for the year ended September 30,2013: October 1 September 30 2012 Additions Deductions 2013 Improvements other than buildings $ 1,432 $ 13,900 $ - $ 15,332 Machinery and equipment 1,582,293 114,689 (128,642) 1,568,340 Total capital assets 1,583,725 128,589 (128,642) 1,583,672 Less accumulated depreciation (1,263,744) (138,709) 128,642 (1,273,811) Total capital assets,net $ 319,981 $ (10,120) $ - $ 309,861 12 Collier County, Florida Property Appraiser Notes to Special-Purpose Financial Statements September 30,2013 5. Long-Term Liabilities The following is a summary of changes in long-term liabilities, which are reported in the basic financial statements of Collier County, Florida: October 1 September 30 2012 Increase Decrease 2013 Accrued compensated absences $ 265,141 $ 45,707 $ 53,140 $ 257,708 Of these liabilities, approximately $150,000 is expected to be paid during the fiscal year ending September 30, 2014, which will be included in the operating costs of the general fund when expended. These long-term liabilities are not reported in the special-purpose financial statements of the Property Appraiser since they have not matured. 6. Employee Retirement Plans Substantially all full-time employees of the Property Appraiser are eligible to participate in the State of Florida Retirement System (System), a cost-sharing multiple-employer defined benefit plan administered by the State of Florida, Division of Retirement. The System is a defined benefit plan for all state,and participating county,district school board,community college and university employees (Pension Plan). The System also offers eligible employees participation in an alternative defined contribution plan(Investment Plan). The Property Appraiser participates in the Elected State Officers' Class. The plan is administered by the State of Florida. Contribution rates are established statewide for all participating governmental units. Accordingly, the actuarial information and related disclosures attributable to the Property Appraiser's employees are not determinable. Employees enrolled in the plan prior to July 1, 2011 who retire at or after age 62 with 6 years of credited service, or with 30 years of service regardless of age, are entitled to a retirement benefit, payable monthly for life, equal to 1.6%for regular employees,2%for senior management and 3% for county elected officials for each year of credited service times the final average compensation. Employees enrolled on or after July 1, 2011 who retire at or after age 65 with 8 years of credited service or 33 years of service regardless of age, are entitled to the retirement benefits as outlined above. Final average compensation is the employee's average of the five highest fiscal years of salary earned during credited service for those enrolled prior to July 1, 2011 and the eight highest fiscal years of salary for those hired on or after July 1, 2011. 13 Collier County, Florida Property Appraiser Notes to Special-Purpose Financial Statements September 30, 2013 6. Employee Retirement Plans (continued) Vested employees may retire before age 62 (65 years of age if hired on or after July 1, 2011) and receive benefits that are reduced 5% for each year prior to normal retirement age. Employees participating in the Investment Plan are vested after one year of service with no age requirement. The System also provides death and disability benefits. Benefits are established by Chapter 121, Florida Statutes, and Chapter 22B,Florida Administrative Code. The Deferred Retirement Option Program (DROP) is a program that provides an alternative method for payment of retirement benefits for a specified and limited period for members of the System, effective July 1, 1998. Under this program, employees may participate as of their normal retirement date and have their benefits accumulate in the Florida Retirement System Trust Fund, earning interest, while continuing to work for a System employer. Employees enrolled in DROP prior to July 1, 2011 earn interest on accumulated benefits in the Trust Fund at 6.5%, those enrolling on or after July 1, 2011 earn interest at 1.3%. The participation in the program does not change conditions of employment. When the DROP period ends, maximum of 60 months, employees must terminate employment. Elected Officials participating in DROP may continue to serve in office without voiding DROP or retirement benefits as long as the Elected Official continues in that term of office or successive terms of office. At the time of termination of employment, the employee or Elected Official will receive payment of the accumulated DROP benefits, and begin receiving their monthly retirement benefit(in the same amount determined at retirement, plus annual cost-of-living increases). Investment Plan members are not eligible to participate in the DROP program,but Pension Plan members are eligible to roll their DROP lump sum into the Investment Plan as one of the distribution methods under the Pension Plan. The System publishes an annual report that provides ten-year historical trend information about progress made in accumulating sufficient assets to pay benefits when due. This report may be obtained by writing to the Division of Retirement Research Education and Policy Section 1317 Winewood Boulevard,Building 8,Tallahassee,Florida 32399-1560,or by calling(877)377-1737, or accessing their Internet site at www.dms.MyFlorida.com. The Property Appraiser is required to contribute an actuarially determined rate. Rates from October 1,2012 through June 30,2013 were 10.23%for County Elected Officials,6.3%for senior management, 5.18% for regular employees and 5.44% for DROP employees based on covered payroll. The current rates, effective July 1, 2013, are 33.03% for county elected officials, 18.31% for senior management, 6.95% for regular employees and 12.84% for DROP employees based on covered payroll. In addition, as of July 1, 2011, employee contributions of 3% are required of all Pension Plan and Investment Plan members, except for those in DROP. 14 Collier County, Florida Property Appraiser Notes to Special-Purpose Financial Statements September 30, 2013 6. Employee Retirement Plans (continued) The contribution requirements of the Property Appraiser are established and may be amended by the State of Florida. The Property Appraiser's employer contributions to the plan for the years ended September 30, 2013, 2012 and 2011, were$203,538, $161,054 and$348,722,respectively, equal to the required contributions for each year. 7. Other Postemployment Healthcare Benefits (OPEB) Plan The Property Appraiser follows GASB Statement 45, Accounting and Financial Reporting by Employers for Postemployment Benefits other than Pensions in accounting for postemployment benefits. Plan Description The Property Appraiser participates in a group health care plan that covers eligible retirees, and their dependents,of the Board and all Constitutional Officers with the exception of the Sheriff.The Board administers the plan and establishes the benefits. The healthcare plan does not issue a stand-alone financial report, however additional actuarial information regarding the plan as a whole is disclosed in the notes to the financial statements of Collier County, Florida. Under Florida Statutes, retirees originally hired prior to July 1, 2011 are eligible to participate in the active medical plan by paying the active rate if they have attained age 62 and have 6 years of service or have at least 30 years of service. Employees hired on or after July 1,2011 are eligible to participate in the active medical plan by paying the active rate if they have attained age 65 and have 8 years of service or have at least 33 years of service. Employees eligible for a reduced benefit under the Florida Retirement System prior to age 62 (65 years of age if hired on or after July 1,2011)are also eligible to participate in the medical plan. In addition,the Property Appraiser provides no subsidy to the retiree, or their dependents, for group health care. Funding Policy The contribution requirements of the plan members and the employers are established and may be amended by the County. The plans are financed by the participating agencies on a pay as you go basis through the County's self insurance internal service fund. Participating agencies contribute an additional amount per each active employee to fund retiree health care. The Property Appraiser had a net OPEB obligation of$28,606 as of September 30, 2013. 15 Collier County, Florida Property Appraiser Notes to Special-Purpose Financial Statements September 30, 2013 7. Other Postemployment Healthcare Benefits (OPEB)Plan (Continued) The annual other postemployment benefit cost is calculated based on the annual required contribution of the employer(ARC), an amount actuarially determined in accordance with GASB Statement 45. The ARC represents a level of funding that, if paid by on an ongoing basis, is projected to cover normal cost each year and amortize any unfunded actuarial liabilities over a period not to exceed thirty years. An actuarial valuation on the plan as a whole was performed in November 2013. The notes to the financial statements of the County disclose additional information regarding the other post employment benefit plan as a whole. 8. Related-Party Transactions During the fiscal year ended September 30, 2013, the Board paid fees to the Property Appraiser that amounted to$5,735,280. At September 30,2013,the Property Appraiser had a payable due to the Board of$1,053,859, respectively, comprised as follows: Distribution of excess commissions and fees $ 1,053,859 9.Risk Management Collier County, Florida (County) is exposed to various risks of loss including but not limited to, general liability, health and life, property and casualty, auto and physical damage, and workers' compensation. The County is substantially self-insured and accounts for and finances its risk of uninsured losses through an internal service fund. All liabilities associated with these self-insured risks are reported in the basic financial statements of the County. The Property Appraiser participates in the County's self-insurance program. During the years ended September 30, 2013, the Property Appraiser was charged $864,268 by the County for participation in the risk management program. The County retains the first $500,000 per claim for workers' compensation, and has purchased outside excess coverage for up to the statutory limits for each injury or illness. The County also provides coverage for up to $200,000 per occurrence for general liability and auto liability coverage and has purchased outside excess coverage for up to $5 million per claim. Negligence claims in excess of the statutory limits set in Section 768.20,Florida Statutes, which provide for limited sovereign immunity of$200,000/$300,000 per occurrence can only be recovered through an act of the State Legislature. 16 Collier County, Florida Property Appraiser Notes to Special-Purpose Financial Statements September 30, 2013 9. Risk Management(continued) Property claims are subject to a 5% wind deductible and a$50,000 deductible for all other perils. The County retains the first$100,000 per claim/$200,000 per occurrence for public official errors and omissions and crime coverage and has purchased outside excess coverage for up to$5 million per claim. There have been no significant reductions in insurance coverage in the last year. Settled claims have not exceeded the insurance provided by third party carriers in any of the last three years. The County is self-insured for health claims covering all of its employees and their eligible dependents. The County retains the first$325,000 per covered member and has purchased outside excess coverage for all claims exceeding this amount. An actuarial valuation is performed each year to estimate the amounts needed to pay prior and future claims and to establish reserves. 10. Commitments and Contingencies Litigation The Property Appraiser is involved as a defendant or plaintiff in certain litigation and claims arising from the ordinary course of operations. In the opinion of the Property Appraiser and legal counsel, the range of potential recoveries or liabilities will not materially affect the financial position of the Property Appraiser. 17 CliftonLarsonAllen LLP �' CLAconnect.com CliftonLarsonAllen INDEPENDENT AUDITORS' REPORT ON INTERNAL CONTROL OVER FINANCIAL REPORTING AND ON COMPLIANCE AND OTHER MATTERS BASED ON AN AUDIT OF FINANCIAL STATEMENTS PERFORMED IN ACCORDANCE WITH GOVERNMENT AUDITING STANDARDS Honorable Abe Skinner Property Appraiser Collier County,Florida We have audited,in accordance with the auditing standards generally accepted in the United States of America and the standards applicable to financial audits contained in Government Auditing Standards issued by the Comptroller General of the United States, the special-purpose financial statements of the general fund of the Collier County Property Appraiser(Property Appraiser),as of and for the year ended September 30,2013,and the related notes to the special-purpose fmancial statements, which collectively comprise the Collier County Property Appraiser's financial statements,and have issued our report thereon dated December 27, 2013. Internal Control Over Financial Reporting In planning and performing our audit of the special-purpose financial statements, we considered Collier County Property Appraiser's internal control over financial reporting(internal control)to determine the audit procedures that are appropriate in the circumstances for the purpose of expressing our opinion on the special-purpose financial statements, but not for the purpose of expressing an opinion on the effectiveness of Collier County Property Appraiser's internal control. Accordingly, we do not express an opinion on the effectiveness of Collier County Property Appraiser's internal control. Our consideration of internal control was for the limited purpose described in the preceding paragraph and was not designed to identify all deficiencies in internal control that might be material weaknesses or significant deficiencies and therefore, material weaknesses or significant deficiencies may exist that were not identified. However, as described in the accompanying schedule of findings and responses, we identified certain deficiencies in internal control that we consider to be material weaknesses. A deficiency in internal control exists when the design or operation of a control does not allow management or employees, in the normal course of performing their assigned functions, to prevent, or detect and correct, misstatements on a timely basis. A material weakness is a deficiency, or a combination of deficiencies, in internal control, such that there is a reasonable possibility that a material misstatement of the entity's special-purpose financial statements will not be prevented, or detected and corrected on a timely basis. We consider the deficiencies described in the accompanying schedule of findings and responses as items IC 2012-01 and IC 2013-001 to be material weaknesses. NF.\i \ Pnindepvtlert mRnterd NsielflentwEd 18 INTERNATIONAL Honorable Abe Skinner Property Appraiser Compliance and Other Matters As part of obtaining reasonable assurance about whether Collier County Property Appraiser's special-purpose financial statements are free from material misstatement, we performed tests of its compliance with certain provisions of laws, regulations, contracts, and grant agreements, noncompliance with which could have a direct and material effect on the determination of financial statement amounts.However,providing an opinion on compliance with those provisions was not an objective of our audit,and accordingly,we do not express such an opinion. The results of our tests disclosed no instances of noncompliance or other matters that are required to be reported under Government Auditing Standards. Collier County,Florida Property Appraiser's Response to Findings The Property Appraiser's responses to the findings identified in our audit are described in the accompanying schedule of findings and responses. The Property Appraiser's response was not subjected to the auditing procedures applied in the audit of the financial statements and, accordingly,we express no opinion on it. Purpose of this Report The purpose of this report is solely to describe the scope of our testing of internal control and compliance and the result of that testing,and not to provide an opinion on the effectiveness of the entity's internal control or on compliance. This report is an integral part of an audit performed in accordance with Government Auditing Standards in considering the entity's internal control and compliance. Accordingly,this communication is not suitable for any other purpose. CliftonLarsonAllen LLP Naples,Florida December 27, 2013 19 %-' CliftonLarsonAllen LLP CLAconnect.com Clifton Larson Allen MANAGEMENT LETTER Honorable Abe Skinner Property Appraiser Collier County,Florida We have audited the special-purpose financial statements of the general fund of the Collier County, Florida Property Appraiser(Property Appraiser)as of and for the year ended September 30, 2013, and have issued our report thereon dated December 27, 2013. We conducted our audit in accordance with auditing standards generally accepted in the United States of America and the standards applicable to financial audits contained in Government Auditing Standards, issued by the Comptroller General of the United States and Chapter 10.550,Rules of the Florida Auditor General.We have issued our Independent Auditors' Report on Internal Control over Financial Reporting and Compliance and Other Matters Based on an Audit of Financial Statements Performed in Accordance with Government Auditing Standards and Schedule of Findings and Responses.Disclosures in that report and schedule which are dated December 27, 2013 should be considered in conjunction with this management letter. Additionally, our audit was conducted in accordance with the Chapter 10.550,Rules of the Auditor General, which govern the conduct of local governmental entity audits performed in the State of Florida. This letter includes the following information,which is not included in the aforementioned auditor's 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 fmdings and recommendations made in the preceding annual financial audit report. See the Schedule of Finding and Responses for the corrective actions that have been taken to address findings and recommendations made in the preceding annual financial audit report. ➢ Section 10.554(1)(i)2., Rules of the Auditor General, requires our audit to include a review of the provisions of Section 218.415, Florida Statutes, regarding the investment of public funds. In connection with our audit,we determined that the Property Appraiser complied with Section 218.415, Florida Statutes. ➢ Section 10.554(1)(i)3.,Rules of the Auditor General,requires that we address in the management letter any recommendations to improve financial management.In connection with our audit,we did not have any such recommendations. \1 \ I \ Anud INNONtmN6ertiNE ElaNTEMad 20 INTERNATIONAL Honorable Abe Skinner Property Appraiser ➢ Section 10.554(1)(i)4.,Rules of the Auditor General,requires that we address noncompliance with the provisions of contracts or grant agreements, or abuse, that have occurred, or are likely to have occurred, that have an effect on the financial statements that is less than material but which warrants the attention of those charged with governance.In connection with our audit,we did not have any such findings. > Section 10.554(1)(i)5., Rules of the Auditor General, requires that the name or official title and legal authority for the primary government and each component unit of the reporting entity be disclosed in this management letter, unless disclosed in the notes to the special-purpose financial statements. See Note 1 in the notes to special-purpose financial statements. Our management letter is intended solely for the information and use of the Legislative Auditing Committee, members of the Florida Senate and the Florida House of Representatives,the Florida Auditor General,Federal and other granting agencies, and applicable management and is not intended to be and should not be used by anyone other than these specified parties. ./Z.>" CliftonLarsonAllen LLP Naples,Florida December 27,2013 21 Collier County, Florida Property Appraiser Schedule of Findings and Responses September 30, 2013 Prior Year Findings and Recommendations Current Year St atus Partially Not Prior Year Findings Cleared Cleared Cleared Material IC 2012-01 Financial Statement Close Process Weakness X Control ML 2012-01 Compensated Absences Deficiency X Current Year Findings and Recommendations IC 2012-01 Financial Statement Close Process Criteria: The financial statement close process is defined as the process where the results of various transactions are summarized, reviewed, consolidated, edited, and prepared into a variety of regulatory and management financial reports. The boundaries of this process may begin with the preparation of the preliminary trial balance and end with the preparation of the financial statements and related disclosures. The process includes closing the general ledger and preparing the financial statements and disclosures. Condition: We noted the following items related to the Property Appraiser's financial statement close process that,when considered in the aggregate,we consider to be a material weakness: • No evidence of the review and approval of journal entries for proper recording in the general ledger. • Internal controls were lacking that would enable the proper cutoff and timely recording of liabilities under the modified accrual basis of accounting. Expenditures that should have been accrued at fiscal year-end were not recorded, and an expenditure related to the following year was accrued. 22 Collier County, Florida Property Appraiser Schedule of Findings and Responses September 30, 2013 IC 2012-01 Financial Statement Close Process (continued) Effect: There is a reasonably possibility that a material misstatement to the annual financial statements could occur and not be prevented or detected by the Property Appraiser's controls in a timely manner. Cause: There is a very small staff in the accounting department of the Property Appraiser which limits the Property Appraiser's ability to segregate duties and allow for proper approvals of journal entries and for the second review of year-end accruals. Recommendation: We recommend that management review its current procedures for key processes, including the financial statement closing process, and determine the appropriateness of those processes for preventing and detecting misstatements and for preparing reliable accurate financial statements. Management's response: All journal entries will be reviewed and initialed by the MS Director. IC 2013-001 Invoice Approvals Criteria: Invoices are received and entered into the accounting system for payment. Condition: Some invoices that we examined were processed and paid without evidence of approval by anyone outside of the accounting department. Context: Numerous invoices are received and processed for payment on an annual basis. The majority of invoices are entered manually. 23 Collier County, Florida Property Appraiser Schedule of Findings and Responses September 30, 2013 Effect: Invoices may be paid to unauthorized vendors or for incorrect amounts, resulting in the financial statements being misstated. IC 2013-001 Invoice Approvals (continued) Cause: Evidence of approval of invoices is lacking. Recommendation: Invoices should not be processed for payment without evidence of approval, such as a manual signature or initials of the responsible person. Management Response: Stricter enforcement of"Signed/Approved" invoices has been implemented. 24 Collier County, Florida Sheriff Special-Purpose Financial Statements and Supplemental Reports Year Ended September 30, 2013 Collier County, Florida Sheriff Special-Purpose Financial Statements and Other Reports Year Ended September 30, 2013 Contents Independent Auditors' Report 1 Special-Purpose Financial Statements Special-Purpose Balance Sheet—Governmental Funds 4 Special-Purpose Statement of Revenues, Expenditures, and Changes in Fund Balances— Governmental Funds 5 Special-Purpose Statement of Revenues, Expenditures, and Changes in Fund Balance— Budget and Actual—General Fund 6 Special-Purpose Statement of Net Position—Internal Service Fund 7 Special-Purpose Statement of Revenues, Expenses, and Changes in Net Position— Internal Service Fund 8 Special-Purpose Statement of Cash Flows—Internal Service Fund 9 Special-Purpose Statement of Fiduciary Net Position—Agency Funds 10 Notes to Special-Purpose Financial Statements 11 Supplementary Information Schedule of Funding Progress for the Retiree Health Plan 30 Combining Financial Information Special-Purpose Combining Statement of Fiduciary Net Position—Agency Funds 31 Special-Purpose Combining Statement of Changes in Assets and Liabilities — Agency Funds 32 Collier County, Florida Sheriff Special-Purpose Financial Statements and Other Reports Year Ended September 30, 2013 Contents (cont.) Other Reports Independent Auditors' Report on Internal Control Over Financial Reporting and on Compliance and Other Matters Based on an Audit of Special-Purpose Financial Statements Performed in Accordance With Government Auditing Standards 33 Management Letter 35 Schedule of Findings and Responses 37 Report on Agreed-Upon Procedures Applied to Investigative Funds 42 CliftonLarsonAllen LLP CLAconnect.com CliftonLarsonAllen INDEPENDENT AUDITORS' REPORT Honorable Kevin Rambosk Sheriff Collier County,Florida Report on the Special-Purpose Financial Statements We have audited the accompanying special-purpose financial statements of each major fund and the aggregate remaining fund information of the Collier County, Florida Sheriff(Sheriff), as of and for the year ended September 30, 2013, and the related notes to the special-purpose financial statements, which collectively comprise the entity's financial statements as listed in the table of contents. Management's Responsibility for the Financial Statements Management is responsible for the preparation and fair presentation of these special-purpose financial statements in accordance with the basis of accounting practices specified by the Rules of the Auditor General, State of Florida for financial statements of constitutional officers. Management is also responsible for the design, implementation, and maintenance of internal control relevant to the preparation and fair presentation of special-purpose financial statements that are free from material misstatement, whether due to error or fraud. Auditors'Responsibility Our responsibility is to express opinions on these special-purpose financial statements based on our audit. We conducted our audit in accordance with auditing standards generally accepted in the United States of America and the standards applicable to financial audits contained in Government Auditing Standards, issued by the Comptroller General of the United States. Those standards require that we plan and perform the audit to obtain reasonable assurance about whether the special-purpose financial statements are free from material misstatement. An audit involves performing procedures to obtain audit evidence about the amounts and disclosures in the special-purpose financial statements. The procedures selected depend on the auditors' judgment, including the assessment of the risks of material misstatement of the special-purpose financial statements, whether due to fraud or error. In making those risk assessments, the auditor considers internal control relevant to the entity's preparation and fair presentation of the special-purpose financial statements in order to design audit procedures that are appropriate in the circumstances, but not for the purpose of expressing an opinion on the effectiveness of the entity's internal control. Accordingly, we express no such opinion. An audit also includes evaluating the appropriateness of accounting policies used and the reasonableness of significant accounting estimates made by management, as well as evaluating the overall presentation of the special- purpose financial statements. We believe that the audit evidence we have obtained is sufficient and appropriate to provide a basis for our audit opinions. NF X I A An indepeda l ma rber of Ngta ttematicnd 1 INTERN AT 10 N AL Honorable Kevin Rambosk Sheriff Opinion In our opinion, the special-purpose financial statements referred to above present fairly, in all material respects, the respective financial position of each major fund and the aggregate remaining fund information of the Sheriff as of September 30, 2013, and the respective changes in financial position and, where applicable, cash flows thereof and budgetary comparison of the general fund for the year then ended in accordance with the financial reporting provisions of the Rules of the Auditor General, State of Florida as described in Note 1. Basis of Accounting We draw attention to Note 1 of the special-purpose financial statements, which describes the basis of accounting. The special-purpose financial statements are prepared on the basis of the financial reporting provisions of the Rules of the Auditor General, State of Florida, which is a basis of accounting other than accounting principles generally accepted in the United States of America,to comply with the requirements of the Rules of the Auditor General, State of Florida. Our opinion is not modified with respect to that matter. Other Matters Supplementary Information Our audit was conducted for the purpose of forming opinions on the special-purpose financial statements that collectively comprise the Sheriff's financial statements. The schedule of funding progress for the retiree health plan, special-purpose combining statement of fiduciary net position — agency funds and the special- purpose combining statement of changes in assets and liabilities—agency funds are presented for purposes of additional analysis and are not a required part of the special-purpose fmancial statements. The schedule of funding progress for the retiree health plan, special-purpose combining statement of fiduciary net position—agency funds and the special-purpose combining statement of changes in assets and liabilities—agency funds are the responsibility of management and were derived from and relate directly to the underlying accounting and other records used to prepare the special-purpose financial statements. Such information has been subjected to the auditing procedures applied in the audit of the special-purpose financial statements and certain additional procedures, including comparing and reconciling such information directly to the underlying accounting and other records used to prepare the special-purpose financial statements or the special-purpose fmancial statements themselves, and other additional procedures in accordance with auditing standards generally accepted in the United States of America. In our opinion, the schedule of funding progress for the retiree health plan, special-purpose combining statement of fiduciary net position — agency funds and the special-purpose combining statement of changes in assets and liabilities — agency funds are fairly stated in all material respects in relation to the special-purpose financial statements as a whole. Other Reporting Required by Government Auditing Standards In accordance with Government Auditing Standards, we have also issued our report dated December 27, 2013, on our consideration of the Sheriffs internal control over financial reporting and on our tests of its compliance with certain provisions of laws, regulations, contracts, and grant agreements and other matters. The purpose of that report is to describe the scope of our testing of internal control over financial reporting and compliance and the result of that testing, and not to provide an opinion on internal control over financial reporting or on compliance. That report is an integral part of an audit performed in accordance with Government Auditing Standards in considering the Sheriff's internal control over financial reporting and compliance. 2 Honorable Kevin Rambosk Sheriff Restriction on Use This report is intended solely for the information and use of the Sheriff and the Auditor General, State of Florida, and is not intended to be and should not be used by anyone other than these specified parties. d/i/Z$7CZ/ 'kl,o-oc ZZ,z 7 CliftonLarsonAllen LLP • Naples,Florida December 27,2013 3 mo 00 - N oo O O O N N 00 ,40 M N .0 .0 00 Np —c�: 00 l— 0,... 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F- F. u 6 I- Z w w Collier County, Florida Sheriff Special-Purpose Statement of Revenues, Expenditures and Changes in Fund Balances —Budget and Actual General Fund Year Ended September 30, 2013 Variance With Budget Budget Positive Original Final Actual (Negative) Revenues: Charges for services $ — $ 1,470,000 $ 1,565,956 $ 95,956 Expenditures: General government: Personal services 2,749,900 2,749,900 3,107,855 (357,955) Operating expenditures 180,000 180,000 127,944 52,056 Public safety: Personal services 102,161,900 103,551,900 104,096,160 (544,260) Operating expenditures 24,246,900 24,326,900 20,777,783 3,549,117 Capital outlay 2,634,600 2,634,600 5,003,061 (2,368,461) Total expenditures 131,973,300 133,443,300 133,112,803 330,497 Excess of expenditures over revenues (131,973,300) (131,973,300) (131,546,847) 426,453 Other financing sources(uses): Transfers in: Collier County,Florida Board of County Coinnirissioners appropriations 131,973,300 131,973,300 131,973,300 — Transfers out: Distribution of excess appropriations to Collier County,Florida Board of County Commissioners — — (426,453) (426,453) Total other financing sources 131,973,300 131,973,300 131,546,847 (426,453) Net change in fund balance — — — — Fund balance—beginning of year — — — — Fund balance—end of year $ — $ — $ — $ — See accompanying Notes to Special-Purpose Financial Statements. 6 Collier County, Florida Sheriff Special-Purpose Statement of Net Position— Internal Service Fund September 30, 2013 Assets Cash and cash equivalents $ 4,852,657 Investments 9,908,500 Other receivable 1,747 Total assets 14,762,904 Liabilities: Self insurance claims payable 3,600,000 Due to other funds 1,940,588 Net other postemployment benefit obligation 1,344,917 Total liabilities 6,885,505 Net position: Unrestricted 7,877,399 Total net position $ 7,877,399 See accompanying Notes to Special-Purpose Financial Statements. 7 Collier County, Florida Sheriff Special-Purpose Statement of Revenues, Expenses, and Changes in Net Position— Internal Service Fund Year Ended September 30, 2013 Operating revenues: Charges for services $ 14,832,087 Operating expenses: Claims and claims expenses 18,193,720 Reinsurance premiums 690,206 Net other post employment benefit expense 296,779 Administrative and other expenses 248,294 Total operating expenses 19,428,999 Operating income (4,596,912) Nonoperating revenues: Interest income 20,301 Increase in fair value of investments (17,833) Total nonoperating revenues 2,468 Change in net position (4,594,444) Net position—beginning of year 12,471,843 Net position—end of year $ 7,877,399 See accompanying Notes to Special-Purpose Financial Statements. 8 Collier County, Florida Sheriff Special-Purpose Statement of Cash Flows —Internal Service Fund Year Ended September 30, 2013 Operating activities Cash payments for claims and claims related services $ (16,935,467) Cash payments for reinsurance premiums (690,206) Cash payments for administrative services and supplies (248,294) Cash received from other funds for services 16,600,000 Cash received from retirees for services 672,675 Net cash provided by operating activities (601,292) Investing activities Investment income 20,301 Purchases of securities (46,302) Net cash provided by investing activities (26,001) Net decrease in cash,cash equivalents,and investments (627,293) Cash,cash equivalents,and investments—beginning of year 5,479,950 Cash,cash equivalents,and investments—end of year $ 4,852,657 Reconciliation of operating income to net cash provided by operating activities Operating income $ (4,596,912) Adjustments to reconcile operating income to net cash provided by operating activities: Decrease in receivables (1,747) Decrease in due to/from other funds 2,440,588 Increase in net other postemployment benefit obligation 296,779 Increase in self-insurance claims payable 1,260,000 Net cash provided by operating activities $ (601,292) See accompanying Notes to Special-Purpose Financial Statements. 9 Collier County, Florida Sheriff Special-Purpose Statement of Fiduciary Net Position — Agency Funds September 30, 2013 Assets Cash and cash equivalents $ 631,218 Due from individuals and businesses 16,453 Total assets $ 647,671 Liabilities Due to other governments $ 36,240 Due to Collier County,Florida Board of County Commissioners 27,525 Due to individuals and businesses 583,906 Total liabilities $ 647,671 See accompanying Notes to Special-Purpose Financial Statements. 10 Collier County, Florida Sheriff Notes to Special-Purpose Financial Statements September 30, 2013 1. Summary of Significant Accounting Policies Reporting Entity The Collier County, Florida Sheriff(Sheriff) is an elected constitutional officer as provided for by the Constitution of the State of Florida. Pursuant to Chapter 129, Florida Statutes, the Sheriff's budget is submitted to the Collier County, Florida Board of County Commissioners (Board) for approval. The Sheriff is the chief law enforcement officer of Collier County, Florida (County) and is responsible for operating the County's corrections facilities. The special-purpose financial statements include the general fund, special revenue funds, proprietary fund (internal service fund), and agency funds of the Sheriff's office. The accompanying special-purpose financial statements were prepared for the purpose of complying with Section 218.39, Florida Statutes, and Chapter 10.550, Rules of the Auditor General -Local Governmental Entity Audits. Chapter 10.550 Rules of the Auditor General - Local Governmental Entity Audits requires the Sheriff to only present fund financial statements. Accordingly, due to the omission of government-wide financial statements and related disclosures, including a management's discussion and analysis, these special-purpose financial statements do not constitute a complete presentation of the financial position of the Sheriff as of September 30, 2013 and the changes in its financial position and its cash flows, where applicable, for the year then ended, in conformity with Governmental Accounting Standards Board (GASB) Statement No. 34, Basic Financial Statements— and Management's Discussion and Analysis—for State and Local Governments, but otherwise constitute special-purpose financial statements prepared in conformity with accounting principles generally accepted in the United States of America. As a result of the budgetary oversight by the Board and the financial dependency on the Board, the financial activities of the Sheriff are included in the Collier County, Florida Comprehensive Annual Financial Report. Transfers are provided by appropriations from the Board pursuant to law. Estimated receipts and budgeted fund balances must equal appropriations. The Sheriff is required to refund to the Board all excess appropriations annually; therefore, no unappropriated general fund balance is carried forward. 11 Collier County, Florida Sheriff Notes to Special-Purpose Financial Statements September 30,2013 1. Summary of Significant Accounting Policies (continued) Measurement Focus, Basis of Accounting, and Basis of Presentation The special-purpose fund financial statements report detailed information about the Sheriff. The focus of governmental fund financial statements is on major funds rather than reporting funds by type. Each major fund is reported in a separate column. Governmental Funds Governmental funds are accounted for using the flow of current financial resources measurement focus. Only current assets and current liabilities, generally, are included on the special-purpose balance sheet. Operating statements for these funds present increases (i.e., revenues and other financing sources) and decreases (i.e., expenditures and other financing uses) in net current assets. The modified accrual basis of accounting is used by governmental funds. Under the modified accrual basis of accounting, revenues are recognized when susceptible to accrual (i.e., when they become measurable and available to finance liabilities of the current fiscal year). For this purpose, the Sheriff considers revenues to be available if they are collected within 60 days after year-end with the exception of grants, which have a period of availability of one year. Grants are recognized as revenue as soon as all eligibility requirements have been met, except for the State Criminal Alien Assistance Program (SCAAP) (a federal grant administered by the U.S. Department of Justice). The SCAAP grant awards are calculated based on information provided to the U.S. Department of Justice regarding overtime expenses in corrections and inmate population, for a specified time frame. Awarded funds are used for future expenditures within grant guidelines. Expenditures are recorded when the related fund liability is incurred, except for compensated absences, which are recognized as expenditures to the extent they have matured. Substantially all of the Sheriff's funding is appropriated by the Board. In applying the susceptible to accrual concept to intergovernmental revenue, there are essentially two types of revenue. In one, money must be expended on the specific purpose or project before any amounts will be paid to the Sheriff; therefore, revenue is recognized based upon the expenditures incurred. In the other, money is virtually unrestricted and is revocable only for failure to comply with prescribed compliance requirements. These resources are reflected as revenue at the time of receipt, or earlier, if the "susceptible to accrual" criteria are met. 12 Collier County, Florida Sheriff Notes to Special-Purpose Financial Statements September 30,2013 1. Summary of Significant Accounting Policies (continued) Other revenue is recognized as earned and becomes measurable and available to pay liabilities of the current period. Florida Statutes provide that the amount by which revenues and transfers exceed annual expenditures be remitted to the Board immediately following the fiscal year for which the funding was provided or following the fiscal year during which other revenue was recognized. The amount of this distribution is recorded as a liability and as another financing use in the accompanying special-purpose financial statements. Capital outlays expended in governmental fund operations are capitalized in the basic financial statements of Collier County, Florida rather than in the governmental funds of the Sheriff. The Sheriff has three major governmental funds: General Fund— The general fund is used to account for the general operations of the Sheriff and includes all transactions which are not accounted for in another fund. Grant Special Revenue Fund— This fund is used to account for the proceeds of federal and state grant revenues that are legally restricted to specified purposes. Prisoner Welfare Fund— This fund is used to account for the proceeds of inmate related services and is legally restricted to specified purposes, which benefit the inmate population. The Sheriff also has one non-major fund: Federal Equitable Sharing Fund— The revenue from this fund is the result of joint investigations with federal agencies that result in the equitable sharing of the net proceeds of the forfeiture. Fund balances reported in these funds are to be used for the specified purpose of the respective fund. 13 Collier County, Florida Sheriff Notes to Special-Purpose Financial Statements September 30,2013 1. Summary of Significant Accounting Policies (continued) Fiduciary Funds Fiduciary Funds—Agency Funds—These funds are used to account for assets held by the Sheriff as an agent for individuals, private organizations, and other governments. Agency funds are custodial in nature (assets equal liabilities), and do not involve measurement of results of operations or have a measurement focus. Agency funds are accounted for using the accrual basis of accounting. Proprietary Fund Internal Service Fund—This fund is used to account for the health and dental insurance services provided to departments and retirees of the Sheriff on a cost-reimbursement basis. Proprietary funds are accounted for 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. Cash Equivalents and Investments Cash equivalents are defined as highly liquid investments with original maturities of three months or less. Cash equivalents also include amounts deposited in Florida PRIME administered by the State Board of Administration, a 2a-7 like investment pool. Shares of the investment pool are based on the pool's share price, which approximates fair value. All investments are stated at fair value. Compensated Absences All full-time employees of the Sheriff are allowed to accumulate an unlimited number of hours of unused sick leave and up to 500 hours of unused vacation leave. Upon termination, employees receive 100% of allowable accumulated vacation hours and a percentage of unused sick leave, depending on years of service, not to exceed 1,000 hours. Vacation time and sick leave are included in operating costs when the payments are made to the employees. The Sheriff does not, nor is legally required to accumulate expendable financial resources for these unmatured obligations. Accordingly, the liability for compensated absences is not reported in the governmental funds, but rather is reported in the basic financial statements of Collier County, Florida. 14 Collier County, Florida Sheriff Notes to Special-Purpose Financial Statements September 30, 2013 1. Summary of Significant Accounting Policies (continued) Use of Estimates The preparation of the special-purpose financial statements requires management of the Sheriff to make a number of estimates and assumptions relating to the reported amounts of assets and liabilities and the disclosure of contingent assets and liabilities at the date of the special-purpose financial statements and the reported amounts of revenues and expenditures during the period. Significant items subject to such estimates and assumptions include the self-insurance claims payable. Actual results could differ from those estimates. Fund Balance Reporting and Governmental Fund-Type Definitions Fund balances are classified either as non-spendable or as spendable. Spendable fund balances are further classified in a hierarchy based on the extent to which there are external and/or internal constraints in how fund balance amounts may be spent. Non-spendable fund balances include amounts that cannot be spent because they are not in spendable form or are legally or contractually required to be maintained intact. The Sheriff did not have any non-spendable fund balances as of September 30, 2013. Spendable fund balances are classified based on a hierarchy of the Sheriff's ability to control the spending of these fund balances and are reported in the following categories: restricted, committed, assigned and unassigned. The Sheriff's fund balances for the grant special revenue fund,prisoner welfare fund and federal equitable sharing fund fall into this category. Fund balances maintained in the Grant Special Revenue Fund, Prisoner Welfare Fund and the Federal Equitable Sharing Fund are constrained for specific purposes that are externally imposed by grantors, laws, or regulations or imposed by law through constitutional provisions or enabling legislation, and are reports as restricted fund balances. Implementation of New Accounting Standards During the year, the Sheriff implemented GASBS 62, Codification of Accounting and Financial Reporting Guidance Contained in Pre-November 30, 1989 FASB and AICPA Pronouncements, supersedes GASBS 20.GASBS 20 gave governments the choice to elect to follow only GASB's authoritative literature, or to follow FASB and AICPA pronouncements that did not conflict with GASB pronouncements. 15 Collier County, Florida Sheriff Notes to Special-Purpose Financial Statements September 30, 2013 1. Summary of Significant Accounting Policies (continued) Upon adoption of GASBS 62, all governmental accounting guidance is codified into the GASB literature. During the year the Sheriff implemented GASBS 63, Financial Reporting of Deferred Outflows of Resources, Deferred Inflows of Resources, and Net Position. GASBS 63 provides guidance on deferred outflows and inflows of resources. It also renames the residual amounts from "net assets" to "net position". These financial statements include the statement of net position, which reports all assets, deferred outflows of resources, liabilities, deferred inflows of resources, and net position, as applicable. 2.Budgetary Process Florida Statutes govern the preparation, adoption, and administration of the Sheriff's annual budget. The Sheriff submits a budget for the general fund to the Board for approval. The budget is prepared on a basis consistent with accounting principles generally accepted in the United States of America. The annual budget serves as the legal authorization for expenditures. Any subsequent amendments to the budget must be approved by the Board. Expenditures may not legally exceed appropriations at the fund level. Appropriations lapse at year-end. Budgetary control is maintained at the departmental major object expenditure level. Budgetary changes within the major object expenditure categories are made at the discretion of the Sheriff. The Sheriff does not budget for the grant special revenue fund as it is funded by federal and state grants and is governed by those documents. Additionally, the prisoner welfare and federal equitable sharing funds do not have legally adopted budgets. The original budget is the first complete appropriated budget. The final budget is the original budget adjusted by all reserves, transfers, allocations, supplemental appropriations, and other legally authorized changes applicable to the fiscal year,whenever legally authorized. 16 Collier County, Florida Sheriff Notes to Special-Purpose Financial Statements September 30, 2013 3. Cash, Cash Equivalents and Investments At September 30, 2013, the carrying value of the Sheriff's cash, cash equivalents and investments was as follows: Average Carrying Credit Type Maturity Value Rating Cash on hand N/A $ 18,912 N/A Demand deposits N/A 16,724,607 N/A Local government surplus funds trust fund: Florida Prime 44.0 days 732,139 AAAm Fund B 4.04 years 6,090 Unrated Total cash and cash equivalents 17,481,748 Money Market 1,437,231 Not rated Treasury Bill 2/27/2014 4,899,804 Not rated Federal National Mortgage Association Note 4/15/2014 30,650 AA+ Federal National Mortgage Association Note 6/20/2014 250,120 AA+ Federal Farm Credit Bank 8/27/2014 85,065 AA+ Federal Farm Credit Bank 8/27/2014 350,291 AA+ Federal National Mortgage Association Note 1/26/2016 750,255 AA+ Federal National Mortgage Association Note 2/22/2016 749,595 AA+ Federal Home Loan Mortgage Corporation Note 2/28/2017 601,536 AA+ Federal Home Loan Mortgage Corporation Note 3/28/2017 753,953 AA+ Total Investments 9,908,500 Total cash,cash equivalents and investments $ 27,390,248 17 Collier County, Florida Sheriff Notes to Special-Purpose Financial Statements September 30,2013 3. Cash, Cash Equivalents and Investments(continued) The total cash, cash equivalent and investments balances at September 30, 2013, were as follows: General fund $ 5,801,457 Grant special revenue fund 3,862,241 Prisoner welfare fund 1,288,099 Federal equitable sharing fund 1,046,076 Internal service fund 14,761,157 Agency funds 631,218 $ 27,390,248 Custodial Credit Risk At September 30, 2013, the Sheriff's demand deposits were entirely covered by Federal Depository Insurance or by collateral pledged with the State Treasurer pursuant to Chapter 280, Florida Statutes. Under this Chapter, in the event of default by a participating financial institution (a qualified public depository), all participating institutions are obligated to reimburse the government entity for the loss. The investments in the Internal Service Fund are part of the Florida Sheriffs Multiple Employers Trust (FSMET) and are administered by Hunt Insurance Group/Willis Pooling Practice. FMSET's policy required execution of a third-party custodial safekeeping agreement for purchased securities and collateral, and requires that securities be held in the Sheriff's name. Credit Risk The Sheriff's policy is to follow the guidance in Sections 219.075 and 218.415, Florida Statutes, regarding the deposit of funds received and the investment of surplus funds. The Sheriff's Investment Policy authorizes investments in Florida PRIME (formerly the Local Government Surplus Funds Trust Fund), or any intergovernmental investment pool authorized pursuant to the Florida Interlocal Cooperation Act, as provided in s. 163.01, F.S.; Securities and Exchange Commission registered money market funds with the highest credit quality rating from a nationally recognized rating agency; interest-bearing time deposits or savings accounts in qualified public depositories, as defined in s. 280.02, F.S.; and direct obligations of the US Treasury. 18 Collier County, Florida Sheriff Notes to Special-Purpose Financial Statements September 30, 2013 3. Cash, Cash Equivalents and Investments (continued) Additionally, Florida Statutes allow local governments to place public funds with institutions that participate in a collateral pool under the Florida Security for Public Deposits Act. The pool is administered by the state treasurer, who may make additional assessments to ensure that no public funds will be lost. Florida PRIME (the Pool) is administered by the State Board of Administration and consists of two separate pools. Pool A (Florida PRIME) consists of money market appropriate assets, and Pool B (Fund B Surplus Trust Fund) consisted of assets that pay more slowly than expected, and/or have significant credit and liquidity risk. In addition, full realization of the principle value of Fund B assets is not readily determinable. At September 30, 2013, the Sheriff had $738,229 invested in the Pool. Of this amount, $732,139 is invested in the Florida Prime, which is rated "AAAm"by Standard &Poor's Ratings Services, and $6,090 in the Fund B Surplus Funds Trust Fund, which is not rated by a nationally recognized statistical rating agency. The LGIP investment is fully liquid and carries a weighted average days to maturity of 44 days. Fund B is accounted for as a fluctuating NAV (net asset value)pool and the fair value factor for September 30, 2013, was 1.13262284. The Fund B amount has a weighted average life of 4.04 years. Fund B cash holdings continue to be distributed to participants as they become available from maturities, sales and received income. Interest Rate Risk The Sheriff has no specific investment policy regarding interest rate risk. Concentration of Credit Risk The Sheriff's investments are included in the internal service fund which is used to account for the Sheriff's self-insured health plan. The Florida Sheriff's Multiple Employer Trust administers the Sheriff's self-insured health plan and has an investment policy that allows for the investment of funds that exceed one month's required funding by more than $100,000. Investments can be made in government securities. The Sheriff's portfolio managed by the self-insurance trust includes investments in U.S. government instrumentalities, and demand deposits. There are also demand deposits which are not managed by the self-insurance trust, which are available dollars managed by the Sheriff to cover daily operations. 19 Collier County, Florida Sheriff Notes to Special-Purpose Financial Statements September 30, 2013 3. Cash, Cash Equivalents and Investments (continued) Below details all investments, at September 30, 2013: Percent of Portfolio Federal National Mortgage Association Note 7% Federal Farm Credit Bank 2 Federal Home Loan Mortgage Corporation Note 5 U.S.Treasury Bill 20 Demand Deposits 66 Total 100% 4. Capital Assets Capital assets used by the Sheriff are capitalized in the basic financial statements of Collier County, Florida rather than in the governmental funds of the Sheriff. Upon acquisition, such assets are recorded as expenditures in the governmental funds of the Sheriff and are capitalized at cost in the basic financial statements of the County. 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 value on the date received. The Sheriff maintains custodial responsibility for the capital assets used by his office. No depreciation expense has been provided on capital assets in these special-purpose financial statements. However, depreciation expense on these assets is recorded in the basic financial statements of Collier County, Florida. The following is a summary of changes in capital assets which are reported in the basic financial statements of Collier County, Florida: Balance Balance October 1, September 30, 2012 Additions Retirements 2013 Machinery and equipment $ 66,464,009 $ 6,569,609 ($ 4,037,819) $ 68,995,799 Less accumulated depreciation (55,616,067) (5,957,740) 4,002,723 (57,571,084) Machinery and equipment,net $ 10,847,942 $ 611,869 ($ 35,096) $ 11,424,715 20 Collier County, Florida Sheriff Notes to Special-Purpose Financial Statements September 30,2013 5. Long-Term Liabilities The following is a summary of changes in long-term liabilities, which are reported in the basic financial statements of Collier County, Florida: October 1, September 30, 2012 Increases Retirements 2013 Accrued compensated absences $ 13,388,844 $1,756,715 ($2,002,616) $13,142,943 Of these liabilities, approximately $360,000 is expected to be paid during the fiscal year ending September 30, 2014. These long-term liabilities are not reported in the special-purpose financial statements of the Sheriff since they have not matured. 6.Interfund Balances and Transfers Due from and due to other funds at September 30, 2013, were as follows: Due From Due To General Fund $2,504,166 $ - Prisoner Welfare Fund - 300,047 Internal Service Fund - 1,940,588 Federal Equitable Sharing - 263,531 $2,504,166 $2,504,166 Interfund receivables and payables generally represent recurring activities between funds. 7. Related-Party Transactions The Board provided funding for the Sheriff for the year of $131,973,300. At September 30, 2013, the Sheriff had a payable due to the Board of$461,293 comprised of the following: General fund: Distribution of excess appropriations $ 426,453 Distribution of interest collected 6,543 Miscellaneous payables 772 Agency funds 27,525 Total $ 461,293 21 Collier County, Florida Sheriff Notes to Special-Purpose Financial Statements September 30,2013 7.Related-Party Transactions (continued) Additionally, the Sheriff had a receivable from the Board related to services provided to the County of$113,716 at September 30, 2013. Agency Funds The Sheriffs Office administers funds for the Collier County Sheriffs Office Explorers Program. The program is funded by donations from employees through payroll deduction and donations from outside organizations. The program is designed for students to explore the opportunity to learn about and interact with law enforcement and to help stimulate further interest in the possibility of a law enforcement career. The Sheriffs Office collects donations, through payroll deduction, for The Collier County Sheriffs Office Benefit Fund Committee, Inc. (Benefit Fund Committee), a separate, non-profit 501(c)3 organization. The Benefit Fund Committee provides emergency funds for major catastrophic events such as death, serious illness, or travel due to a family crisis. Funds are available as an interest free loan to eligible employees upon a written request and approval of the Benefit Fund Committee. 8. Employee Retirement Plan Substantially all full-time and part-time employees of the Sheriff are eligible to participate in the State of Florida Retirement System (System), a cost-sharing multiple-employer defined benefit plan administered by the State of Florida, Division of Retirement. The System is a defined benefit plan for all state, and participating county, district school board, community college, and university employees (Pension Plan). The System also offers eligible employees participation in an alternative defined contribution plan (Investment Plan). The Sheriff, certified deputies and eligible civilian deputy positions participate in the Special Risk Class. The plan is administered by the State of Florida. Contribution rates are established statewide for all participating governmental units. Accordingly, the actuarial information and related disclosures attributable to the Sheriffs employees are not determinable. Employees enrolled in the plan prior to July 1, 2011, who retire at or after age 62 with 6 years of credited service for regular risk or with 30 years of service regardless of age, are entitled to a retirement benefit, payable monthly for life, equal to 1.6% for regular employees, 2% for senior management, and 3% for county elected officials for each year of credited services times the final average compensation; and for special risk, after age 55 with 6 years or with 25 years of 22 Collier County, Florida Sheriff Notes to Special-Purpose Financial Statements September 30,2013 8.Employee Retirement Plan (continued) service regardless of age, are entitled to a retirement benefit payable monthly for life, up to 3% for each year of credited service times their final average compensation. Final average compensation is the employee's average of the five highest years of salary earned during credited service. Vested employees may retire before age 62 for regular risk and 55 for special risk and receive retirement benefits that are reduced 5% for each year prior to normal retirement age. Employees participating in the Investment Plan are vested after one year of service with no age requirement. Employees hired on July 1, 2011, or later participating in the Pension Plan who retire at or after age 65 with 8 years of credited service for regular risk or with 33 years of service regardless of age, are entitled to a retirement benefit, payable monthly for life, equal to 1.6% for regular employees, 2% for senior management, and 3% for county elected officials of their final average compensation for each year of credited service; for special risk, after age 60 with 8 years or with 30 years of service and age 57 or after 30 years of special risk service regardless of age, or after 33 years of any creditable service, retirement benefits are payable monthly for life. Vested employees may retire before age 65 for regular risk and 60 for special risk and receive retirement benefits that are reduced 5% for each year prior to normal retirement age. The System also provides death and disability benefits. Benefits are established by Chapter 121, Florida Statutes, and Chapter 22B,Florida Administrative Code. The Deferred Retirement Option Program (DROP) is a program that provides an alternative method for payment of retirement benefits for a specified and limited period for members of the System, effective July 1, 1998. Under this program, employees may participate as of their normal retirement date and have their benefits accumulate in the Florida Retirement System Trust Fund, earning interest, while continuing to work for a System employer. Employees enrolled in DROP prior to July 1, 2011 earn interest on accumulated benefits in the Trust Fund at 6.5%, those enrolling on or after July 1, 2011 earn interest at 1.3%. The participation in the program does not change conditions of employment. When the DROP period ends, maximum of 60 months, employees must terminate employment. Elected Officials participating in DROP may continue to serve in office without voiding DROP or retirement benefits as long as the Elected Official continues in that term of office or successive terms of office. At the time of termination of employment, the employee or Elected Official will receive payment of the accumulated DROP benefits and begin receiving their monthly retirement benefit (in the same amount determined at retirement,plus annual cost-of-living increases). Investment Plan members are not eligible to 23 Collier County, Florida Sheriff Notes to Special-Purpose Financial Statements September 30, 2013 8.Employee Retirement Plan (continued) participate in the DROP program, but Pension Plan members are eligible to roll their DROP lump sum into the Investment Plan as one of the distribution methods under the Pension Plan. The System publishes an annual report that provides ten-year historical trend information about progress made in accumulating sufficient assets to pay benefits when due. That report may be obtained by writing to the Division of Retirement Research Education and Policy Section, 1317 Winewood Boulevard, Building 8, Tallahassee, Florida 32399-1560, or by calling (877) 377-1737, or accessing the division's Internet site at www.dms.MyFlorida.com. The Sheriff is required to contribute an actuarially determined rate. Rates from October 1, 2012 through June 30, 2013 were 14.90% for special risk employees, 5.18% for regular employees, 6.30% for senior management and 5.44% for DROP employees based on covered payroll. The current rates, effective July 1, 2013, are 19.06% for special risk employees, 6.95% for regular employees, 18.31% for senior management and 12.84% for DROP employees based on covered payroll. Effective July 1, 2011, employees hired who are already collecting retirement through the Florida Retirement System are not eligible to receive additional retirement benefits based on their current employment. The Sheriff is still required to contribute for these employees. Rates are 8.03% for special risk employees, and 3.39% for regular employees. As of September 30, 2013, there were seven special risk employees and one regular risk employee in these categories. The contribution requirements of the Sheriff are established and may be amended by the State of Florida. The Sheriff's contributions to the plan for the years ended September 30, 2013, 2012, and 2011 were $10,162,432, $8,817,709, and $13,153,722, respectively, equal to the required contributions for each year. Effective July 1, 2011 participating employees are required to contribute 3% of eligible wages to the Florida Retirement System. Employees hired on July 1, 2011 or later who are already collecting retirement benefits through the Florida Retirement System, and employees enrolled in DROP are not required to make this contribution. 24 Collier County, Florida Sheriff Notes to Special-Purpose Financial Statements September 30, 2013 9. Other Post Employment Benefits The Sheriff follows the provisions of GASB Statement No. 45 Accounting and Financial Reporting by Employers for Postemployment Benefits Other Than Pensions, for its other post- employment benefits. Plan Description The Sheriff administers a single-employer defined benefit plan (OPEB Plan) and can amend the benefit provisions. Prior to 2010, the Sheriff offered an OPEB Plan that subsidized the cost of health care for of retirees who have six years of creditable service with the Sheriff and who receive a monthly retirement benefit from the Florida Retirement System. The Sheriff subsidizes approximately 20% for both single coverage and family coverage for qualifying individuals. In 2010, the subsidy was no longer made available to eligible retirees who chose to continue their health insurance coverage. Approximately 73% of retirees receive the subsidy. Additionally, in accordance with Florida Statute 112.0801, Sheriffs employees who retire and immediately begin receiving benefits from the FRS have the option of paying premiums to continue in the Sheriffs health insurance plan at the same group rate as for active employees. At September 30, 2013, the date of the latest actuarial valuation, the Sheriffs plan participation consisted of: OPEB plan participants 1,092 Retirees receiving benefits 97 Funding Policy The Sheriff has the authority to establish and amend funding policy. The OPEB Plan is currently being funded on a pay as you go basis. For the year ended September 30, 2013, the Sheriff contributed$834,442 to the OPEB Plan. The annual other postemployment benefit cost for the plan is calculated based on the annual required contribution of the employer (ARC), an amount actuarially determined in accordance with GASB Statement 45. The ARC represents a level of funding that, if paid on an ongoing basis, is projected to cover normal cost each year and amortize any unfunded actuarial liabilities over a period not to exceed thirty years. An actuarial valuation on the plan as a whole was performed as of October 1, 2013. 25 Collier County, Florida Sheriff Notes to Special-Purpose Financial Statements September 30,2013 9. Other Post Employment Benefits(continued) Annual OPEB Cost and Net OPEB Obligation The annual cost (expense) of the Sheriff's OPEB Plan is calculated based on the ARC. The following table shows the components of the Sheriff's annual OPEB Plan cost for the year ended September 30, 2013, the amount actually contributed, and the changes in the net OPEB Plan obligation. Annual required contribution $ 1,151,695 Interest on net OPEB obligation 31,444 Adjustment to annual required contribution (51,918) Annual OPEB cost(expense) 1,131,221 Contributions made (834,442) Increase in net OPEB obligation(asset) 296,779 Net OPEB obligation—beginning of year 1,048,138 Net OPEB obligation(asset)—end year $ 1,344,917 No trust or agency fund has been established for the plan. The Sheriff's annual OPEB cost, the percentage of annual OPEB cost contributed to the plan, and the net OPEB obligation for the year ended September 30, 2013 and the preceding years were as follows. Percentage of Annual Annual OPEB Net OPEB Fiscal Year Ended OPEB Cost Cost Contributed Obligation September 30,2013 $ 1,131,221 73% $ 1,344,917 September 30,2012 $ 1,100,080 1.08% $ 1,048,138 September 30,2011 $ 1,095,878 99% $ 1,140,863 Funded Status and Funding Progress As of the September 30, 2013 actuarial valuation date, the OPEB Plan was 0% funded, the actuarial accrued liability for benefits was $13,141,022, and the actuarial value of assets was $0, resulting in an unfunded actuarial accrued liability(UAAL) of$13,141,022. The covered payroll (annual payroll of active employees covered by the OPEB Plan) was approximately $107.2 million, and the ratio of the UAAL to the covered payroll was 12.2%. 26 Collier County, Florida Sheriff Notes to Special-Purpose Financial Statements September 30, 2013 9. Other Post Employment Benefits (continued) Actuarial Methods and Assumptions 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 the healthcare cost trend. Amounts determined regarding the funded status of the plan and the annual required contributions of the employer are subject to continual revision as actual results are compared with past expectations and new estimates are made about the future. Calculations for financial reporting purposes are based on the benefits provided under terms of the plan as understood by the employer and the plan members in effect at the time of each valuation and on the pattern of sharing of costs between the employer and plan members to that point. The projection of benefits for financial reporting purposes does not explicitly incorporate the potential effects of legal or contractual funding limitations on the pattern of cost sharing between the employer and plan members in the future. Actuarial calculations reflect a long-term perspective. Consistent with that perspective, actuarial methods and assumptions used include techniques that are designed to reduce the effects of short-term volatility in actuarial accrued liabilities and the actuarial value of assets. The actuarial methods are: Actuarial cost method Projected Unit Credit Method Amortization method Closed Amortization period 30 years, Level Dollar Amount The actuarial assumptions are: Investment rate of return 3% Discount rate 3% Healthcare cost trend rate 10% for the 2014 fiscal year grading to an ultimate rate of 5% for the 2024 fiscal year 27 Collier County, Florida Sheriff Notes to Special-Purpose Financial Statements September 30, 2013 10. Self-Insurance Program The Sheriffs Office participates in the Statewide Florida Sheriffs Self-Insurance Fund (the Fund) for its professional liability insurance. The Fund is managed by representatives of the participating Sheriff offices and provides professional liability insurance to participating agencies. The Fund provides liability insurance coverage subject to the following limitations: $5,000,000 for any one incident, and $10,000,000 for an annual aggregate. The Sheriff also participates in the Fund for workers' compensation coverage. The Florida Sheriffs Workers' Compensation Self Insurance Program is a self-insurance program providing coverage for the first $500,000 ($350,000 for policy years 2002/2003 —2006/2007) of every claim. Reinsurance is purchased by the Program to cover claims exceeding$500,000 (or$350,000 where applicable) up to $10,000,000. Reinsurance coverage up to $20,000,000 any one person on a catastrophic basis is available when applicable. Settled claims have not exceeded the insurance provided by third-party carriers in any of the past three years. Premiums charged to participating Sheriffs are based upon amounts believed by the Fund management to meet the estimated annual payout during the fiscal year and to pay for the estimated operating costs of the program. All liabilities associated with these self-insured risks are reported in the basic financial statements of the Fund. The Sheriff has also established a self-funded employee health plan for active employees and retirees. An internal service fund is used to account for the activities of the plan. Excess coverage has been purchased which provides specific claim excess coverage for any one incident exceeding $200,000 up to $1,000,000. Payments to the internal service fund are based on actuarial estimates of amounts needed to pay prior year and current year claims including claims incurred but not yet reported. The Sheriffs Office uses a Third Party Administrator(TPA)to administer and pay claims for the health plan. During the fiscal year, the Sheriff deemed it necessary to change TPAs. The agreement with MedSave USA ended, for cause, as of June 30, 2013. A new agreement was signed with Meritain Health, Inc. which was effective July 1, 2013. 28 Collier County, Florida Sheriff Notes to Special-Purpose Financial Statements September 30, 2013 10. Self-Insurance Program (continued) Changes in the balance of estimated insurance claims payable for the fiscal year ended September 30, 2013 and 2012 is as follows: New Claims Balance and Changes Claim Balance Fiscal year ending: October 1 in Estimates Payments September 30 2012 $ 2,251,000 $ 17,273,541 $(17,184,541) $2,340,000 2013 $ 2,340,000 $ 21,404,560 $(20,144,560) $3,600,000 11. Claims and Contingencies Litigation The Sheriff is involved in various claims and legal actions arising in the ordinary course of operations. In the opinion of management, the ultimate disposition of these matters will not have a material adverse effect on the Sheriff. Federal and State Grants Grant funds received by the Sheriff are subject to audit by grantor agencies. Audits of these grants may result in disallowed costs, which may constitute a liability of the Sheriff. In the opinion of management, disallowed costs, if any, would be immaterial to the financial position of the Sheriff. 29 Collier County, Florida Sheriff Schedule of Funding Progress for the Retiree Health Plan September 30, 2013 Actuarial Accrued UAAL as a Actuarial Actuarial Liability(AAL)— Percentage of Valuation Value of Projected Unfunded Funded Covered Covered Date Assets Unit Credit AAL Ratio Payroll Payroll 10/1/2010 $ — $ 12,148,033 $12,148,033 0.0% $117,879,632 10.3% 10/1/2011 $ — $ 12,018,242 $12,018,242 0.0% $114,185,572 10.5% 10/1/2012 $ — $ 13,291,909 $13,291,909 0.0% $108,390,240 12.3% 10/1/2013 $ — $ 13,141,022 $13,141,022 0.0% $107,204,015 12.2% 30 00 n - o In m - 2 N, cl / \ % / 3 / $ % k / a - m m' _ . 2 - - — r ,- ,- — — t b R 2 2 CU 0 2 0 64 m 0 / / 2 / f S / I _ —' _ # % ƒ q $ 2 2 q / § '0 � b4 b.) _ f:.? t. CT f / f CC Z _ # 3 J 7 7 •7 m m / 2 N N N N 0 '§ \ WO CI' ›, C m 69 m m q 2 '4 o / _ $ I ƒ I $ s u _ �' V F k ƒ 2 2 2 q q k E 7 § M G G M •Il 0 @ . U m m. m q 9 00 N 2 9 '2 � o -0 = % %� - - G § L) U 0 m m m .s o Elq Ch 2 co a e 1 .k \ m - < ? ( © 7 2 0 2 -4 ( f ' k / J° 3 / ° U 0 • « ƒ 2 § 8 = o / § f / -• 2 / 2 » 2 2 U / 2 0 « 7 a) u w u % co▪ / / ƒ 2 / / 0 / / N M ono t() N 0 U "0 en VD I M N 00 Nat E. OA W V] b 6■ 69 64 69 0 w O I O I I O C .--1 . O 0 0 O R. bA W 69 69 69 bs �; p N e�O`l, O r • o o vn - ° -.0 C - Ill M N • = F 6s 69 69 69 C,) M C I C I I rn o, Cd VN] O A'i C 4 71- ,-, ,4-, �} N .. o 00 00 'b 2 "CI 00 00 00 00 Li O = N N N N N W CA 0. En an 69 69 69 69 N 0 N p„ c I o I I O .� 4 "0 0 y N N N N 0 b i E N (-4 N N ' W W UO a) 69 64 69 69 ii-- 0) cu 000 1co I N C 0000 M M M O M M M 0.0 ., H U • 69 69 69 69 0 m -d U a) o cn a) cr4 cn v2 Cl) O `ty a) rn CA p y Cl). ,,,, P it i "2 • v, 5 U 'C U as O b " U .. " z 0d a) 0 O O U O c. 21 U A H a A A A H CliftonLarsonAllen LLP / CLAconnectcom CliftonLarsonAllen INDEPENDENT AUDITORS' REPORT ON INTERNAL CONTROL OVER FINANCIAL REPORTING AND ON COMPLIANCE AND OTHER MATTERS BASED ON AN AUDIT OF FINANCIAL STATEMENTS PERFORMED IN ACCORDANCE WITH GOVERNMENT AUDITING STANDARDS Honorable Kevin Rambosk Sheriff Collier County,Florida We have audited, in accordance with the auditing standards generally accepted in the United States of America and the standards applicable to financial audits contained in Government Auditing Standards issued by the Comptroller General of the United States, the special-purpose financial statements of each major fund and the aggregate remaining fund information of the Collier County, Florida Sheriff(Sheriff), as of and for the year ended September 30, 2013, and the related notes to the special-purpose financial statements, which collectively comprise the Sheriffs financial statements, and have issued our report thereon dated December 27,2013. Internal Control Over Financial Reporting In planning and performing our audit of the special-purpose financial statements, we considered the Sheriffs internal control over financial reporting (internal control) to determine the audit procedures that are appropriate in the circumstances for the purpose of expressing our opinions on the special-purpose financial statements, but not for the purpose of expressing an opinion on the effectiveness of the Sheriffs internal control. Accordingly,we do not express an opinion on the effectiveness of Sheriff's internal control. Our consideration of internal control was for the limited purpose described in the preceding paragraph and was not designed to identify all deficiencies in internal control that might be material weaknesses or significant deficiencies and therefore, material weaknesses or significant deficiencies may exist that were not identified. However, as described in the accompanying schedule of findings and responses, we identified certain deficiencies in internal control that we consider to be material weaknesses. A deficiency in internal control exists when the design or operation of a control does not allow management or employees, in the normal course of performing their assigned functions, to prevent, or detect and correct, misstatements on a timely basis. A material weakness is a deficiency, or a combination of deficiencies, in internal control, such that there is a reasonable possibility that a material misstatement of the entity's financial statements will not be prevented, or detected and corrected on a timely basis. We consider the deficiencies described as IC2013-001, IC2013-002 and IC2013-003 in the accompanying schedule of findings and responses to be material weaknesses. NF,X1A m indEp.d.t nalter ct Nem klemeticnil 33 INTERNATIONAL Honorable Kevin Rambosk Sheriff Compliance and Other Matters As part of obtaining reasonable assurance about whether the Sheriffs special-purpose financial statements are free from material misstatement, we performed tests of its compliance with certain provisions of laws, regulations, contracts, and grant agreements, noncompliance with which could have a direct and material effect on the determination of financial statement amounts. However, providing an opinion on compliance with those provisions was not an objective of our audit, and accordingly, we do not express such an opinion. The results of our tests disclosed no instances of noncompliance or other matters that are required to be reported under Government Auditing Standards. Collier County,Florida Sheriffs Response to Findings The Sheriff's responses to the findings identified in our audit are described in the accompanying schedule of findings and responses. The Sheriff's response was not subjected to the auditing procedures applied in the audit of the financial statements and, accordingly,we express no opinion on it. Purpose of this Report The purpose of this report is solely to describe the scope of our testing of internal control and compliance and the result of that testing, and not to provide an opinion on the effectiveness of the entity's internal control or on compliance. This report is an integral part of an audit performed in accordance with Government Auditing Standards in considering the entity's internal control and compliance. Accordingly, this communication is not suitable for any other purpose. d/e/a X Zia 4.0") Z. CliftonLarsonAllen LLP Naples,Florida December 27, 2013 34 CliftonLarsonAllen LLP / CLAconnect.c om CliftonLarsonAllen MANAGEMENT LETTER Honorable Kevin Rambosk Sheriff Collier County, Florida We have audited the special-purpose financial statements of the Collier County, Florida, Sheriff(Sheriff), as of and for the fiscal year ended September 30, 2013 and have issued our report thereon dated December 27,2013. 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 and Chapter 10.550 Rules of the Florida Auditor General. We have issued our Independent Auditors' Report on Internal Control over Financial Reporting and Compliance and Other Matters Based on an Audit of Financial Statements Performed in Accordance with Government Auditing Standards and Schedule of Findings and Responses. Disclosures in that report and schedule, which are dated December 27, 2013, should be considered in conjunction with this management letter. Additionally, our audit was conducted in accordance with the Chapter 10.550, Rules of the Auditor General, which govern the conduct of local governmental entity audits performed in the State of Florida. This letter includes the following information,which is not included in the aforementioned auditor's 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. Corrective actions have been taken to address findings and recommendations made in the preceding annual financial audit report. > Section 10.554(1)(i)2., Rules of the Auditor General, requires our audit to include a review of the provisions of Section 218.415, Florida Statutes, regarding the investment of public funds. In connection with our audit, we determined that the Sheriff was not in compliance with Section 218.415, Florida Statutes. Please see ML2013-004 in the accompanying schedule of findings and response. > 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. In connection with our audit, we did not have any such recommendations. NEX I A MniePerdalt^ dNemha'et1Qe' 35 INTERNATIONAL Honorable Kevin Rambosk Sheriff ➢ Section 10.554(1)(i)4., Rules of the Auditor General, requires that we address noncompliance with the provisions of contracts or grant agreements, or abuse, that have occurred, or are likely to have occurred, that have an effect on the financial statements that is less than material but which warrants the attention of those charged with governance. In connection with our audit, we did not have any such findings. ➢ Section 10.554(1)(i)5., Rules of the Auditor General, requires that the name or official title and legal authority for the primary government and each component unit of the reporting entity be disclosed in this management letter, unless disclosed in the notes to the special-purpose financial statements. See Note 1 in the notes to special-purpose financial statements. Our management letter is intended solely for the information and use of the Legislative Auditing Committee, members of the Florida Senate and the Florida House of Representatives, the Florida Auditor General, Federal and other granting agencies, and applicable management and is not intended to be and should not be used by anyone other than these specified parties. 14/-47C-ZdA'J'"01/-i.ac_ZZ.)/ CliftonLarsonAllen LLP Naples,Florida December 27,2013 36 Collier County, Florida Sheriff Schedule of Finding and Responses September 30,2013 Prior Year Findings and Recommendations Current Year Status Prior Year Findings Partially Not Cleared Cleared Cleared Control ML 2012-1 Financial Statement Preparation Deficiency X Current Year Findings and Recommendations IC2013-001 General Ledger Recording and Account Reconciliations Criteria: The Sheriff's office is responsible for accumulating financial data each fiscal year and for compiling a set of financial statements capturing the activity. Account reconciliations are an integral part of that process so that management can quickly identify errors and needed corrections to the general ledger. Condition: We noted the following during the course of our audit: • Several of the Sheriff's funds are accounted for outside of the general ledger system. Internal controls over accounts outside of the system may be easily overridden, making the accounts more susceptible to fraud or error. • A reconciliation of the allocation of pooled cash balances to the amount held in each fund is not performed monthly. • Capital asset balances are not reconciled to the total cost on the capital assets subsidiary ledger. Although the net book value of capital assets is reconciled, errors in the total cost of capital assets may not be identified. • Several revenue items are posted directly to the revenue control accounts. Revenue transactions should be posted to the appropriate revenue accounts rather than the control accounts. Context: Account reconciliations focus on the transactions posted to the account rather than on reconciling the ending balances to the general ledger. Effect: Fraud or errors may not be detected in a timely manner. 37 Collier County, Florida Sheriff Schedule of Finding and Responses September 30,2013 Cause: The accounting software used by the Sheriff is out-of-date, making routine reconciliations burdensome. In addition, several funds are accounted for outside of the general ledger system using spreadsheets. Information from the general ledger must be combined with the manual accounting to reconcile the account balances. Recommendation: We recommend the following procedures to improve the internal control over financial reporting: • All funds and account balances should be maintained in the general ledger system. • A cash reconciliation that reconciles from the bank balance to the general ledger balance for all funds should be prepared each month to determine that all cash transactions have been recorded properly and to discover bank errors. • Capital assets should be reconciled so that the total cost and total accumulated depreciation per the capital assets subsidiary ledgers can be reconciled to the detail reported in the capital assets financial statement disclosure. • All revenue transactions should be posted to a revenue detail account. Management Response: Historically, not all funds have been maintained in the general ledger system. They have, however, been monitored and all relative bank accounts are reconciled on a monthly basis. All funds will be set up in the general ledger system and all bank balances will be reconciled each month to the appropriate fund(s). Procedures will be revised to reconcile capital assets to the detail reported in the capital assets financial statement disclosure. Procedures will be revised so that revenue transactions will be posted to the appropriate revenue detail account. 1C2013-002 Journal Entries Criteria: Journal entries are posted to the general ledger to record transactions and to make corrections to the account balances. Condition: Finance staff members prepare journal entries, submit entries to a supervisor for review and approval, and post entries; however, entries are not reviewed against the actual posting in the general ledger by the reviewer or another independent member. There is also a lack of segregation of duties over journal entries in that the same person can prepare an entry and enter it in the system. 38 Collier County, Florida Sheriff Schedule of Finding and Responses September 30, 2013 A gap in the sequence of journal entries posted during the current fiscal year was not accounted for and an explanation could not be provided by management because there is no system of control over individual entries. We also noted that individuals outside of the finance department have system access to post journal entries. Context: Thousands of journal entries are posted to the general ledger annually. The majority of the entries are system generated entries; however, there are many manual entries posted on a monthly basis. Effect: Incorrect or unauthorized journal entries may be posted without detection, resulting in misstated account balances. Cause: Journal entries are not reviewed after posting to the general ledger. Members outside of the finance department have access to post journal entries. Recommendation: After a journal entry is posted, the member who approved the entry should verify that the entry was accurately posted in the general ledger. A log of all manual journal entries should be maintained and reconciled to system reports to ensure only approved entries are posted in the general ledger. Access to post journal entries should be removed from individuals outside of the finance department. Management Response: While there is no formal process in place to monitor the entry of journal entries, those that are manually keyed are tracked as funds are reconciled. The gap in the sequence of journal entries posted during the current fiscal year for which there was no explanation was for one journal entry with a zero dollar value. Procedures will be implemented to develop a tracking system for all manually entered journal entries. Additionally, segregation of duties will be evaluated and procedures will be implemented to ensure that the appropriate staff are entering approved journal entries into the general ledger. Staff at the management level will review manually entered journal entries on at least a monthly basis to verify that only approved entries are posted. Access to post journal entries will be removed for the individuals outside of the finance department. 39 Collier County, Florida Sheriff Schedule of Finding and Responses September 30, 2013 IC2013-003 Information Technoloav Criteria: Information technology is a key component of the Sheriff's internal control over financial reporting. Maintaining an accurate and reliable accounting software package is essential to ensure data is captured accurately for financial reporting. Condition: The Sheriff's accounting software is no longer supported by a software vendor. One member has responsibility for application changes and updates. Based on our review, we noted there is not another internal employee with the knowledge of the application to make changes. Additionally, an independent review of IT has not been performed to address exposures and risks of the information technology environment. An IT risk assessment should be completed by an independent party to identify potential control weaknesses. Context: One Sheriff's Office member is responsible for application updates and changes. A single outside vendor has been identified to provide support in the absence of this member. Effect: Data may be incorrectly processed or lost if the system is not properly updated and supported. In addition, many accounting processes that are currently performed manually by the finance department staff are integrated into modem accounting systems, creating increased efficiency and effectiveness of the accounting process. Cause: The accounting software is outdated and no longer supported by the vendor. Recommendation: The Sheriff should update the accounting software to a system that is vendor supported. Consideration should be given to implementing the SAP system used by the Clerk of Courts to promote consistency among County agencies. Additionally, a succession plan should be created for the IT department to ensure application changes and updates are not vested with a single employee. Management Response: The Sheriff's accounting software is continuously maintained and updated. While one agency member has responsibility for changes and updates, his supervisor previously had that responsibility and is fully versed on the system and can make changes and updates, if required. All application changes and updates are reviewed by the programmer's supervisor before being implemented. Additionally, an outside vendor is available to provide support, if needed. 40 Collier County, Florida Sheriff Schedule of Finding and Responses September 30, 2013 The Sheriff is reviewing technology throughout the agency and recognizes that one component which needs upgrading is the accounting system. Initial steps have been taken to evaluate what is needed for a new system and to move forward with replacing the current system. A full evaluation will be completed to determine what products are available which will meet the needs of the Sheriff's finance office. This will include consultation with the Clerk of Courts regarding the SAP system to explore the option of implementing this system. Currently, there is a succession plan as there are two members versed in the details of the finance system. As a new system is implemented, a succession plan will also be part of the process. ML2013-004 Investment Policy Criteria: Florida Statute 218.415 allows local governments to adopt an investment policy to allow for greater diversification of the government's portfolio. The Sheriff adopted an investment policy that specifically identifies the types of investments allowed. Condition: The internal service fund's investments are held in an account with the Florida Sheriffs Multiple Employer Trust (FSMET). The individual investments held in the FSMET account are outside of the investments authorized by the Sheriff's investment policy. Context: Florida statutes and the Sheriff's investment policy establish compliance requirements for investments. Effect: Investments held in the FSMET account are not in compliance with the Sheriff's investment policy. Cause: The investment policy has not been updated since 2002 and no longer accurately reflects the investment account relationships held by the Sheriff. Recommendation: The Sheriff should either 1) restructure the investments held in FSMET to comply with the policy or 2) amend the policy to align with the investment activities. Management Response: The Sheriff's investment policy will be revised to align with investment activities. 41 CliftonLarsonAllen LLP CLAconnect.com CliftonLarsonAllen INDEPENDENT ACCOUNTANTS'REPORT ON APPLYING AGREED-UPON PROCEDURES Honorable Kevin Rambosk Sheriff Collier County,Florida We have performed the procedures enumerated below, which were agreed to by management of the Collier County, Florida Sheriff(the Sheriff), solely to assist you in evaluating the procedures and policies as defined by the Sheriff over its investigative funds for the year ended September 30, 2013. The Sheriff's management is responsible for the Sheriff's compliance with those procedures and policies. This agreed-upon procedures engagement was conducted in accordance with attestation standards established by the American Institute of Certified Public Accountants. The sufficiency of these procedures is solely the responsibility of the party specified in this report. Consequently, we make no representation regarding the sufficiency of the procedures described below either for the purpose for which this report has been requested or for any other purpose. The procedures we performed and our findings are summarized as follows: We randomly selected 25 investigative fund disbursements during the fiscal year ended September 30, 2013 (the population sampled from included transactions from October 01, 2012 through September 30, 2013), and performed the following procedures with respect to the Sheriff's policies and procedures over investigative funds: 1. We obtained the "Disbursement for Investigation" form noting that the form was properly completed and authorized by appropriate personnel. 2. We obtained the "Purchase of Evidence/Information Voucher" noting that the form was properly completed to reflect the expenses incurred within the investigation procedures, that the investigative expenditures were properly supported, and that the use of funds was for authorized purposes. No exceptions were noted. 3. We noted that the unused funds returned, if applicable, agreed to the corresponding deposit and bank statement detail and noted that the amount deposited agreed to the amount returned per the "Receipt for Funds Received"form detail. NE X I A rrerrbad Phis her>at 42 INTERNATIONAL Honorable Kevin Rambosk Sheriff We were not engaged to, and did not, conduct an audit or examination, the objective of which would be the expression of an opinion on compliance.Accordingly,we do not express such an opinion. Had we performed additional procedures, other matters might have come to our attention that would have been reported to you. This report is intended solely for the information and use of the management of the Sheriff and is not intended to be and should not be used by anyone other than this specified party. a" io-ot_//97 CliftonLarsonAllen LLP Naples,Florida December 27, 2013 43 Collier County, Florida Supervisor of Elections Special-Purpose Financial Statements and Supplemental Reports Year Ended September 30, 2013 Collier County, Florida Supervisor of Elections Special-Purpose Financial Statements and Other Reports Year Ended September 30, 2013 Contents Independent Auditors' Report 1 Special-Purpose Financial Statements Special-Purpose Balance Sheet 3 Special-Purpose Statement of Revenues, Expenditures, and Changes in Fund Balances 4 Special-Purpose Statement of Revenues, Expenditures, and Changes in Fund Balances- Budget and Actual—General Fund 5 Notes to Special-Purpose Financial Statements 6 Other Reports Independent Auditors' Report of Independent Certified Public Accountants on Internal Control Over Financial Reporting and on Compliance and Other Matters Based on an Audit of the Special-Purpose Financial Statements Performed in Accordance With Government Auditing Standards 18 Management Letter 20 CliftonLarsonAllen LLP CLAconnect.com CliftonLarsonAllen INDEPENDENT AUDITORS' REPORT Honorable Jennifer J. Edwards Supervisor of Elections Collier County, Florida Report on the Special-Purpose Financial Statements We have audited the accompanying special-purpose financial statements of each major fund of the Collier County, Florida Supervisor of Elections (Supervisor), as of and for the year ended September 30, 2013, and the related notes to the special-purpose financial statements, which collectively comprise the entity's financial statements as listed in the table of contents. Management's Responsibility for the Financial Statements Management is responsible for the preparation and fair presentation of these special-purpose financial statements in accordance with the basis of accounting practices specified by the Rules of the Auditor General, State of Florida for financial statements of constitutional officers. Management is also responsible for the design, implementation, and maintenance of internal control relevant to the preparation and fair presentation of special-purpose financial statements that are free from material misstatement, whether due to error or fraud. Auditors'Responsibility Our responsibility is to express opinions on these special-purpose financial statements based on our audit. We conducted our audit in accordance with auditing standards generally accepted in the United States of America and the standards applicable to financial audits contained in Government Auditing Standards, issued by the Comptroller General of the United States. Those standards require that we plan and perform the audit to obtain reasonable assurance about whether the special-purpose financial statements are free from material misstatement. An audit involves performing procedures to obtain audit evidence about the amounts and disclosures in the special-purpose financial statements. The procedures selected depend on the auditors' judgment, including the assessment of the risks of material misstatement of the special-purpose financial statements, whether due to fraud or error. In making those risk assessments, the auditor considers internal control relevant to the entity's preparation and fair presentation of the special-purpose financial statements in order to design audit procedures that are appropriate in the circumstances, but not for the purpose of expressing an opinion on the effectiveness of the entity's internal control. Accordingly, we express no such opinion. An audit also includes evaluating the appropriateness of accounting policies used and the reasonableness of significant accounting estimates made by management, as well as evaluating the overall presentation of the special- purpose financial statements. We believe that the audit evidence we have obtained is sufficient and appropriate to provide a basis for our audit opinions. ally',tabard Nemhordkrel I N1'ENNA'1'ION AL 1 Honorable Jennifer J. Edwards Supervisor of Elections Opinion In our opinion, the special-purpose financial statements referred to above present fairly, in all material respects,the respective financial position of each major fund of the Supervisor as of September 30,2013, and the respective changes in financial position and budgetary comparison of its general fund thereof for the year then ended in accordance with the financial reporting provisions of the Rules of the Auditor General, State of Florida as described in Note 1. Basis of Accounting We draw attention to Note 1 of the special-purpose financial statements, which describes the basis of accounting. The special-purpose financial statements are prepared on the basis of the financial reporting provisions of the Rules of the Auditor General, State of Florida, which is a basis of accounting other than accounting principles generally accepted in the United States of America,to comply with the requirements of the Rules of the Auditor General, State of Florida. Our opinion is not modified with respect to that matter. Other Reporting Required by Government Auditing Standards In accordance with Government Auditing Standards, we have also issued our report dated January 16, 2014, on our consideration of the Supervisor's' internal control over financial reporting and on our tests of its compliance with certain provisions of laws, regulations, contracts, and grant agreements and other matters. The purpose of that report is to describe the scope of our testing of internal control over financial reporting and compliance and the result of that testing, and not to provide an opinion on internal control over financial reporting or on compliance. That report is an integral part of an audit performed in accordance with Government Auditing Standards in considering Supervisor's internal control over financial reporting and compliance. Restriction on Use This report is intended solely for the information and use of the Supervisor and the Auditor General, State of Florida, and is not intended to be and should not be used by anyone other than these specified parties. 0—irde-loK._LLB CliftonLarsonAllen LLP Naples,Florida January 16, 2014 2 Collier County, Florida Supervisor of Elections Special-Purpose Balance Sheet— Governmental Funds September 30, 2013 Grant General Special Total Fund Revenue 2013 Assets Cash and cash equivalents $ 266,361 $ 5,539 $ 271,900 Liabilities and fund balance Liabilities: Accounts payable $ 19,722 $ - $ 19,722 Accrued liabilities 65,488 - 65,488 Due to Collier County, Florida Board of County Commissioners 181,151 - 181,151 Total liabilities 266,361 - 266,361 Fund balances: Restricted - 5,539 5,539 Unassigned - - - Total fund balances - 5,539 5,539 Total liabilities and find balance $ 266,361 $ 5,539 $ 271,900 See accompanying Notes to Special-Purpose Financial Statements 3 Collier County, Florida Supervisor of Elections Special-Purpose Statement of Revenues, Expenditures and Changes in Fund Balances Governmental Funds Year Ended September 30, 2013 Grant General Special Total Fund Revenue 2013 Revenues: Intergovernmental $ - $ 56,965 $ 56,965 Interest - 14 14 Total revenues - 56,979 56,979 Expenditures: General government: Personal services 1,835,790 - 1,835,790 Operating expenditures 1,171,926 63,871 1,235,797 Capital outlay 44,093 - 44,093 Total expenditures 3,051,809 63,871 3,115,680 Excess of expenditures over revenues (3,051,809) (6,892) (3,058,701) Other financing sources(uses): Transfers in: General Fund - 4,539 4,539 Collier County, Florida Board of County Commissioners appropriations 3,232,100 - 3,232,100 Operating transfers out: Special revenue find (4,539) - (4,539) Distribution of excess appropriations: Collier County, Florida Board of County Commissioners (175,752) (175,752) Total other financing sources 3,051,809 4,539 3,056,348 Deficiency of revenues and other financing sources under expenditures - (2,353) (2,353) Fund balance—October 1, 2012 - 7,892 7,892 Fund balance—September 30,2013 $ - $ 5,539 $ 5,539 See accompanying Notes to Special-Purpose Financial Statements 4 Collier County, Florida Supervisor of Elections Special-Purpose Statement of Revenues, Expenditures and Changes in Fund Balances —Budget and Actual General Fund Year Ended September 30, 2013 Variance With Final Budget Budget Positive Original Final Actual (Negative) Revenues $ 1,500 $ 1,500 $ - $ (1,500) Expenditures: General government: Personal services 1,885,600 1,920,600 1,835,790 84,810 Operating 1,334,000 1,264,017 1,171,926 92,091 Capital outlay 14,000 44,444 44,093 351 Total expenditures 3,233,600 3,229,061 3,051,809 177,252 Excess of expenditures over revenues (3,232,100) (3,227,561) (3,051,809) 175,752 Other financing sources(uses): Operating transfers in: Collier County,Florida Board of County Commissioners appropriations 3,232,100 3,232,100 3,232,100 - Operating transfers out: Special Revenue Fund - (4,539) (4,539) - Distribution of excess appropriations: Collier County,Florida Board of County Commissioners - - (175,752) (175,752) Total other financing sources 3,232,100 3,227,561 3,051,809 (175,752) Net change in fund balance - - - - Fund balance—October 1,2012 - - - - Fund balance— September 30,2013 $ - $ - $ - $ - See accompanying Notes to Special-Purpose Financial Statements 5 Collier County, Florida Supervisor of Elections Notes to Special-Purpose Financial Statements September 30, 2013 1. Summary of Significant Accounting Policies and Practices Reporting Entity The Collier County, Florida Supervisor of Elections (Supervisor) is an elected constitutional officer as provided for by the Constitution of the State of Florida. Pursuant to Chapter 129, Florida Statutes, the Supervisor of Elections' budget is submitted to the Collier County, Florida Board of County Commissioners(Board) for approval. The special-purpose financial statements presented include the general fund and grant special revenue fund of the Supervisor's office. The accompanying special-purpose financial statements were prepared for the purpose of complying with Section 218.39, Florida Statutes, and Chapter 10.550,Rules of the Auditor General-Local Governmental Entity Audits. Chapter 10.550, Rules of the Auditor General - Local Governmental Entity Audits, requires the Supervisor to only present fund financial statements. Accordingly, due to the omission of government-wide financial statements and related disclosures, including a management's discussion and analysis, these special-purpose financial statements do not constitute a complete presentation of the financial position of the Supervisor as of September 30, 2013 and the changes in its financial position for the year then ended, in conformity with Governmental Accounting Standards Board (GASB) Statement No. 34, Basic Financial Statements — and Management's Discussion and Analysis —for State and Local Governments, but otherwise constitute special- purpose financial statements prepared in conformity with accounting principles generally accepted in the United States of America. As a result of the budgetary oversight by the Board and financial dependency on the Board, the financial activities of the Supervisor are included in the Collier County, Florida Comprehensive Annual Financial Report. Transfers are provided by appropriations from the Board pursuant to law. Estimated receipts and budgeted general fund balances must equal appropriations. The Supervisor is required to refund to the Board all excess appropriations annually; therefore, no unappropriated general fund balance is carried forward. 6 Collier County, Florida Supervisor of Elections Notes to Special-Purpose Financial Statements September 30, 2013 1. Summary of Significant Accounting Policies and Practices (continued) Measurement Focus, Basis of Accounting, and Basis of Presentation These special-purpose fund financial statements report detailed information about the Supervisor. The focus of governmental fund financial statements is on major funds rather than reporting funds by type. Each major fund is reported in a separate column. Governmental Funds Governmental funds are accounted for using the flow of current financial resources measurement focus. Only current assets and current liabilities, generally, are included on the special-purpose balance sheet. Operating statements for these funds present increases (i.e., revenues and other financing sources) and decreases (i.e., expenditures and other financing uses) in net current assets. The Supervisor has the following major governmental funds: General Fund — The general fund is used to account for the general operations of the Supervisor, and includes all revenues and expenditures which are not accounted for in another fund. Grant Special Revenue Fund — The grants fund is used to account for the activities of voter education and poll worker training grants from the State of Florida. The modified accrual basis of accounting is used by governmental funds. Under the modified accrual basis of accounting, revenues are recognized when susceptible to accrual (i.e., when they become measurable and available to finance liabilities of the current fiscal year). For this purpose, the Supervisor considers revenues to be available if they are collected within 60 days after year-end. Expenditures are recorded when the related fund liability is incurred, except for compensated absences, which are recognized as expenditures to the extent they have matured. The appropriations from the Board are the primary source of funds considered to be susceptible to accrual. Intergovernmental revenues are recognized when eligibility requirements are met and related amounts are available from the grantor. 7 Collier County, Florida Supervisor of Elections Notes to Special-Purpose Financial Statements September 30, 2013 1. Summary of Significant Accounting Policies Practices (continued) Interest income and other revenues are recognized as they are earned and become measurable and available to pay liabilities of the current period. Florida Statutes provide that the amount by which revenues and transfers exceed annual expenditures be remitted to the Board immediately following the fiscal year for which the funding was provided or following the fiscal year during which other revenue was recognized. The amount of this distribution is recorded as a liability and as another financing use in the accompanying special-purpose financial statements. Capital outlays expended in general fund operations are capitalized in the basic financial statements of Collier County, Florida rather than in the governmental funds of the Supervisor. Cash Equivalents Cash equivalents are defined as highly liquid investments with original maturities of three months or less. Cash equivalents in the Local Government Surplus Funds Trust Fund are administered by the State Board of Administration (SBA), a 2a-7 like investment pool. Shares of the investment pool are based on the pool's share price, which approximates fair value. At September 30,2013,the Supervisor had no amounts on deposit in the SBA. Compensated Absences All full-time employees of the Supervisor are allowed to accumulate an unlimited number of hours of unused sick time and up to 440 hours of unused vacation leave. Effective October 1, 2007, the vacation leave limit was increased to 480 hours, with Supervisor approval. Upon termination, employees receive 100% of allowable accumulated vacation hours and a percentage of unused sick leave, depending on years of service. Vacation time and sick leave are included in operating costs of the general fund when the payments are made to employees. The Supervisor does not, nor is legally required to accumulate financial resources for these unmatured obligations. Accordingly, the liability for compensated absences is not reported in the general fund of the Supervisor, but rather is reported in the basic financial statements of Collier County, Florida. 8 Collier County, Florida Supervisor of Elections Notes to Special-Purpose Financial Statements September 30, 2013 1. Summary of Significant Accounting Policies and Practices (continued) Use of Estimates The preparation of the special-purpose financial statements requires management of the Supervisor to make a number of estimates and assumptions relating to the reported amounts of assets and liabilities and the disclosure of contingent assets and liabilities at the date of the special-purpose financial statements and the reported amounts of revenues and expenditures during the period. Actual results could differ from those estimates. Fund Balance Reporting and Governmental Fund-Type Definitions Fund balances are classified either as non-spendable or as spendable. Spendable fund balances are further classified in a hierarchy based on the extent to which there are external and/or internal constraints in how fund balance amounts may be spent. Non-spendable fund balances include amounts that cannot be spent because they are not in spendable form or are legally or contractually required to be maintained intact. The Supervisor did not have any non-spendable fund balances as of September 30, 2013. Spendable fund balances are classified based on a hierarchy of the Supervisor's ability to control the spending of these fund balances and are reported in the following categories: restricted, committed, assigned and unassigned. The Supervisor's fund balances for the Grant Special Revenue Fund fall into the spendable restricted category. Fund balances maintained in the Grant Special Revenue Fund are restricted pursuant to specific grant agreements, and have been presented in the fund financial statements in accordance with GASB Statement No. 54. Implementation of New Accounting Standards During the year, the Supervisor implemented GASBS 62, Codification of Accounting and Financial Reporting Guidance Contained in Pre-November 30, 1989 FASB and AICPA Pronouncements, supersedes GASBS 20. GASBS 20 gave governments the choice to elect to follow only GASB's authoritative literature, or to follow FASB and AICPA pronouncements that did not conflict with GASB pronouncements. Upon adoption of GASBS 62, all governmental accounting guidance is codified into the GASB literature. 9 Collier County, Florida Supervisor of Elections Notes to Special-Purpose Financial Statements September 30, 2013 2. Budgetary Process Florida Statutes govern the preparation, adoption and administration of the Supervisor's annual budget. The Supervisor submits a budget for the general fund to the Board for approval. The budget is prepared on a basis consistent with accounting principles generally accepted in the United States of America. The annual budget serves as the legal authorization for expenditures. Any subsequent amendments to the Supervisor's total budget must be approved by the Board. Expenditures may not legally exceed appropriations at the fund level. Appropriations lapse at year end. Budgetary control is maintained at the departmental major object expenditure level. Budgetary changes within major object expenditure categories are made at the discretion of the Supervisor. The Supervisor does not budget for the grant special revenue fund as it is funded by State grants and is governed by those documents. The original budget is the first complete appropriated budget. The final budget is the original budget adjusted by all reserves, transfers, allocations, supplemental appropriations, and other legally authorized changes applicable to the fiscal year, whenever legally authorized. 3. Cash and Cash Equivalents At September 30, 2013, the carrying value of the Supervisor's cash and cash equivalents was as follows: Carrying Credit Type Value Rating Cash on hand $ 200 N/A Demand deposits 271,700 N/A Total cash and cash equivalents $ 271,900 10 Collier County, Florida Supervisor of Elections Notes to Special-Purpose Financial Statements September 30, 2013 3. Cash and Cash Equivalents (continued) Custodial Credit Risk At September 30, 2013, the Supervisor's deposits were entirely covered by Federal Depository Insurance or by collateral pledged with the State Treasurer pursuant to Chapter 280, Florida Statutes. Under this Chapter, in the event of default by a participating financial institution (a qualified public depository), all participating institutions are obligated to reimburse the governmental entity for the loss. Credit Risk The Supervisor's policy is to follow the guidance in Section 219.075, Florida Statutes, regarding the deposit of funds received and the investment of surplus funds. Sections 219.075 and 218.415, Florida Statutes, authorize the Supervisor to invest in Florida PRIME (formerly the Local Government Surplus Funds Trust Fund) or any intergovernmental investment pool authorized pursuant to the Florida Interlocal Cooperation Act; Securities and Exchange Commission registered money market funds with the highest credit quality rating from a nationally recognized rating agency; direct obligations of the United States Treasury; federal agencies and instrumentalities or interest-bearing time deposits or savings accounts in banks organized under • the laws of the United States and doing business and situated in the State of Florida, savings and loan associations which are under state supervision, or in federal savings and loan associations located in the State of Florida and organized under federal law and federal supervision, provided that any such deposits are secured by collateral as may be prescribed by law. The pool is administered by the State Treasurer, who may make additional assessments to ensure that no public funds will be lost. Interest Rate Risk The Supervisor has no specific investment policy regarding interest rate risk. 4. Capital Assets Capital assets used by the Supervisor are capitalized in the basic financial statements of Collier County, Florida rather than in the governmental funds of the Supervisor. Upon acquisition, such assets are recorded as expenditures in the general fund of the Supervisor and are capitalized at cost in the basic financial statements of Collier County, Florida. 11 Collier County, Florida Supervisor of Elections Notes to Special-Purpose Financial Statements September 30, 2013 4. Capital Assets (continued) 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 value on the date received. The Supervisor maintains custodial responsibility for the capital assets used by the office. No depreciation expense has been provided on capital assets in these special-purpose financial statements. However, depreciation expense is recorded in the basic financial statements of Collier County, Florida. The following is a summary of changes in capital assets, which are reported in the basic financial statements of Collier County, Florida: October 1, September 2012 Additions Deductions 2013 Machinery and equipment $ 1,182,181 $ 44,093 $ (110,677) $ 1,115,597 Less accumulated depreciation (1,039,245) (52,107) 109,050 (982,302) Machinery and equipment,net $ 142,936 $ (8,014) $ (1,627) $ 133,295 5. Long-Term Liabilities The following is a summary of changes in long-term liabilities, which are reported in the basic financial statements of Collier County, Florida: September October 1, 30, 2012 Increase Retirement 2013 Accrued compensated absences $ 180,294 $ 115,504 $ 120,483 $ 175,315 Of these liabilities, approximately $122,720 is expected to be paid during the fiscal year ending September 30, 2014, which will be included in the operating costs of the general fund when expended. These long-term liabilities are not reported in the special-purpose financial statements of the Supervisor since they have not matured. 12 Collier County, Florida Supervisor of Elections Notes to Special-Purpose Financial Statements September 30, 2013 6. Employee Retirement Plans Substantially all full-time employees of the Supervisor filling regularly established positions are eligible to participate in the State of Florida Retirement System (System), a cost-sharing multiple-employer defined benefit plan administered by the State of Florida, Division of Retirement. The System is a defined benefit plan for all state, and participating county, district school board, community college and university employees (Pension Plan). The System also offers eligible employees participation in an alternative defined contribution plan (Investment Plan). The plan is administered by the State of Florida. Contribution rates are established statewide for all participating governmental units. Accordingly, the actuarial information and related disclosures attributable to the Supervisor's employees are not determinable. Employees enrolled in the plan prior to July 1, 2011 who retire at or after age 62 with 6 years of credited service, or with 30 years of service regardless of age, are entitled to a retirement benefit, payable monthly for life, equal to 1.6% for regular employees, 2% for senior management and 3% for county elected officials for each year of credited service times the final average compensation. Employees enrolled on or after July 1, 2011 who retire at or after age 65 with 8 years of credited service or 33 years of service regardless of age, are entitled to the retirement benefits as outlined above. Final average compensation is the employee's average of the five highest fiscal years of salary earned during credited service for those enrolled prior to July 1, 2011 and the eight highest fiscal years of salary for those hired on or after July 1, 2011. Vested employees may retire before age 62 and receive benefits that are reduced 5% for each year prior to normal retirement age. Employees participating in the Investment Plan are vested after one year of service with no age requirement. The System also provides death and disability benefits. Benefits are established by Chapter 121, Florida Statutes, and Chapter 22B, Florida Administrative Code. The Deferred Retirement Option Program (DROP) is a program that provides an alternative method for payment of retirement benefits for a specified and limited period for members of the System, effective July 1, 1998. Under this program, employees may participate as of their normal retirement date and have their benefits accumulate in the Florida Retirement System Trust Fund, earning interest, while continuing to work for a System employer. Employees enrolled in DROP prior to July 1, 2011 earn interest on accumulated benefits in the Trust Fund at 6.5%; those enrolling on or after July 1, 2011 earn interest at 1.3%. The participation in the program does not change conditions of employment. When the DROP period ends, maximum of 60 months, employees must terminate employment. Elected Officials participating in DROP may continue to serve in office without voiding DROP or retirement benefits as long as the Elected Official continues in that term of office or successive terms of office. 13 Collier County, Florida Supervisor of Elections Notes to Special-Purpose Financial Statements September 30, 2013 6. Employee Retirement Plans (continued) At the time of termination of employment,the employee or Elected Official will receive payment of the accumulated DROP benefits, and begin receiving their monthly retirement benefit (in the same amount determined at retirement, plus annual cost-of-living increases). Investment Plan members are not eligible to participate in the DROP program, but Pension Plan members are eligible to roll their DROP lump sum into the Investment Plan as one of the distribution methods under the Pension Plan. The System publishes an annual report that provides ten-year historical trend information about progress made in accumulating sufficient assets to pay benefits when due. This report may be obtained by writing to the Division of Retirement Research Education and Policy Section 1317 Winewood Boulevard, Building 8, Tallahassee, Florida 32399-1560, or by calling (877) 377- 1737, or accessing their Internet site at www.dms.MyFlorida.com. The Supervisor is required to contribute an actuarially determined rate. Rates from October 1, 2012 through June 30, 2013 were 10.23% for County Elected Officials, 6.3% for senior management, 5.18% for regular employees and 5.44% for DROP employees based on covered payroll. The current rates, effective July 1, 2013, are 33.03% for county elected officials, 18.31% for senior management, 6.95% for regular employees and 12.84% for DROP employees based on covered payroll. In addition, as of July 1, 2011, employee contributions of 3% are required of all Pension Plan and Investment Plan members, except for those in DROP. The contribution requirements of the Supervisor are established and may be amended by the State of Florida. The Supervisor's employer contributions to the plan for the years ended September 30, 2013, 2012 and 2011, were $76,386, $63,016, and $125,995, respectively, equal to the required contributions for each year. 7.Other Postemployment Healthcare Benefits (OPEB)Plan The Supervisor follows GASB Statement 45,Accounting and Financial Reporting by Employers for Postemployment Benefits other than Pensions in accounting for postemployment benefits. 14 Collier County, Florida Supervisor of Elections Notes to Special-Purpose Financial Statements September 30, 2013 7. Other Postemployment Healthcare Benefits (OPEB) Plan (continued) Plan Description The Supervisor participates in a group health care plan that covers eligible retirees, and their dependents, of the Board and all Constitutional Officers with the exception of the Sheriff. The Board administers the plan and establishes the benefits. The healthcare plan does not issue a stand-alone financial report, however additional actuarial information regarding the plan as a whole is disclosed in the notes to the financial statements of Collier County, Florida. Under Florida Statutes, retirees originally hired prior to July 1, 2011 are eligible to participate in the active medical plan by paying the active rate if they have attained age 62 and have 6 years of service or have at least 30 years of service. Employees hired on or after July 1, 2011 are eligible to participate in the active medical plan by paying the active rate if they have attained age 65 and have 8 years of service or have at least 33 years of service. Employees eligible for a reduced benefit under the Florida Retirement System prior to age 62 (65 years of age if hired on or after July 1, 2011) are also eligible to participate in the medical plan. The Supervisor provides no subsidy to the retiree, or their dependents, for group health care. Funding Policy The contribution requirements of the plan members and the employers are established and may be amended by the County. The plans are financed by the participating agencies on a pay as you go basis through the County's self insurance internal service fund. Participating agencies contribute an additional amount per each active employee to fund retiree health care. The Supervisor had a net OPEB obligation of$9,901 as of September 30, 2013. The annual other postemployment benefit cost is calculated based on the annual required contribution of the employer (ARC), an amount actuarially determined in accordance with GASB Statement 45. The ARC represents a level of funding that, if paid for on an ongoing basis, is projected to cover normal cost each year and amortize any unfunded actuarial liabilities over a period not to exceed thirty years. An actuarial valuation on the plan as a whole was performed in November 2013. The notes to the financial statements of the County disclose additional information regarding the other post employment benefit plan as a whole. 15 Collier County, Florida Supervisor of Elections Notes to Special-Purpose Financial Statements September 30, 2013 8. Related-Party Transactions For the year ended September 30, 2013, the Board provided funding for the Supervisor that amounted to $3,232,100. At September 30, 2013, the Supervisor had a payable due to the Board of$181,151 comprised as follows: Distribution of excess appropriations $ 175,752 Distribution of interest earnings 978 Amounts due for various services 4,421 Total due to Board of County Commissioners $ 181,151 9. Risk Management Collier County, Florida (County) is exposed to various risks of loss including, but not limited to, general liability, health and life, property and casualty, auto and physical damage and workers' compensation. The County is substantially self-insured and accounts for and finances its risk of uninsured losses through an internal service fund. All liabilities associated with these self- insured risks are reported in the basic financial statements of the County. The Supervisor participates in the County's self-insurance program. During the year ended September 30, 2013, the Supervisor was charged $265,315 by the County for participation in the risk management program. The County retains the first $500,000 per claim for workers' compensation, and has purchased outside excess coverage for up to statutory limit for each injury or illness. The County also provides coverage for up to $200,000 per occurrence for general liability and auto liability coverage and has purchased outside excess coverage for up to $5 million per claim. Negligence claims in excess of the statutory limits set in Section 768.28,Florida Statutes, which provide for limited sovereign immunity of$200,000/$300,000 per occurrence can only be recovered through an act of the State Legislature. Property claims are subject to a 5% wind deductible and a $50,000 deductible for all other perils. The County retains the first$100,000 per claim/$200,000 per occurrence for public official errors and omissions and crime coverage and has purchased outside excess coverage for up to $5 million per claim. There have been no significant reductions in insurance coverage in the last year. Settled claims have not exceeded the insurance provided by third party carriers in any of the last three years. 16 Collier County, Florida Supervisor of Elections Notes to Special-Purpose Financial Statements September 30, 2013 9. Risk Management(continued) The County is self-insured for health claims covering all of its employees and their eligible dependents. The County retains the first $325,000 per covered member and has purchased outside excess coverage for all claims exceeding this amount. An actuarial valuation is performed each year to estimate the amounts needed to pay prior and future claims and to establish reserves. 10. Contingencies Grant funds received by the Supervisor are subject to audit by grantor agencies. Audits of these grants may result in disallowed costs, which may constitute a liability of the office of the Supervisor. In the opinion of management, disallowed costs, if any, would not have a significant impact on the financial position of the Supervisor. 11.Transfers Transfers between funds are for the purpose of providing matching funds to the Supervisor's grants. For the 2013 fiscal year, the amount of matching funds required was $4,539. 17 � ® CliftonLarsonAllen LLP ►/ CLAconnect.com CliftonLarsonAllen INDEPENDENT AUDITORS' REPORT ON INTERNAL CONTROL OVER FINANCIAL REPORTING AND ON COMPLIANCE AND OTHER MATTERS BASED ON AN AUDIT OF FINANCIAL STATEMENTS PERFORMED IN ACCORDANCE WITH GOVERNMENT AUDITING STANDARDS Honorable Jennifer J.Edwards Supervisor of Elections Collier County, Florida We have audited, in accordance with the auditing standards generally accepted in the United States of America and the standards applicable to financial audits contained in Government Auditing Standards issued by the Comptroller General of the United States, the special-purpose financial statements of each major fund of the Collier County, Florida Supervisor of Elections (Supervisor), as of and for the year ended September 30, 2013, and the related notes to the special-purpose financial statements, which collectively comprise the Supervisor's financial statements,and have issued our report thereon dated January 16, 2014. Internal Control Over Financial Reporting In planning and performing our audit of the special-purpose financial statements, we considered the Supervisor's internal control over financial reporting(internal control)to determine the audit procedures that are appropriate in the circumstances for the purpose of expressing our opinions on the special-purpose financial statements,but not for the purpose of expressing an opinion on the effectiveness of the Supervisor's internal control. Accordingly, we do not express an opinion on the effectiveness of the Supervisor's internal control. A deficiency in internal control exists when the design or operation of a control does not allow management or employees, in the normal course of performing their assigned functions, to prevent, or detect and correct, misstatements on a timely basis. A material weakness is a deficiency, or a combination of deficiencies, in internal control, such that there is a reasonable possibility that a material misstatement of the entity's special- purpose financial statements will not be prevented, or detected and corrected on a timely basis. A significant deficiency is a deficiency, or a combination of deficiencies, in internal control that is less severe than a material weakness,yet important enough to merit attention by those charged with governance. Our consideration of internal control was for the limited purpose described in the first paragraph of this section and was not designed to identify all deficiencies in internal control that might be material weaknesses or significant deficiencies. Given these limitations, during our audit we did not identify any deficiencies in internal control that we consider to be material weaknesses. However, material weaknesses may exist that have not been identified. N F\l;' hurdepmdatn.,trdNmieldemtiimel 18 INTERNATIONAL 2 Honorable Jennifer J. Edwards Supervisor of Elections Compliance and Other Matters As part of obtaining reasonable assurance about whether the Supervisor's special-purpose financial statements are free from material misstatement, we performed tests of its compliance with certain provisions of laws, regulations, contracts, and grant agreements, noncompliance with which could have a direct and material effect on the determination of financial statement amounts. However, providing an opinion on compliance with those provisions was not an objective of our audit, and accordingly, we do not express such an opinion. The results of our tests disclosed no instances of noncompliance or other matters that are required to be reported under Government Auditing Standards. Purpose of this Report The purpose of this report is solely to describe the scope of our testing of internal control and compliance and the result of that testing, and not to provide an opinion on the effectiveness of the entity's internal control or on compliance. This report is an integral part of an audit performed in accordance with Government Auditing Standards in considering the entity's internal control and compliance. Accordingly, this communication is not suitable for any other purpose. CliftonLarsonAllen LLP Naples,Florida January 16, 2014 19 CliftonLarsonAllen LLP CLAconnect.com CliftonLarsonAllen MANAGEMENT LETTER Honorable Jennifer J. Edwards Supervisor of Elections Collier County,Florida We have audited the special-purpose financial statements of each major fund of the Collier County, Florida Supervisor of Elections (Supervisor) as of and for the year ended September 30, 2013, and have issued our report thereon dated January 16, 2014. We conducted our audit in accordance with auditing standards generally accepted in the United States and the standards applicable to financial audits contained in Government Auditing Standards, issued by the Comptroller General of the United States. We have issued our Independent Auditors' Report on Internal Control over Financial Reporting and Compliance and Other Matters based on an Audit of Financial Statements Performed in Accordance with Government Auditing Standards. Disclosures in that report which is dated January 16, 2014 should be considered in conjunction with this management letter. Additionally, our audit was conducted in accordance with the Chapter 10.550, Rules of the Auditor General, which govern the conduct of local governmental entity audits performed in the State of Florida. This letter includes the following information, which is not included in the aforementioned auditor's 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. There were no such findings reported in the preceding annual financial audit report. ➢ Section 10.554(1)(i)2., Rules of the Auditor General, requires our audit to include a review of the provisions of Section 218.415, Florida Statutes, regarding the investment of public funds. In connection with our audit, we determined that the Supervisor complied with Section 218.415,Florida Statutes. ➢ Section 10.554(1)(i)3., Rules of the Auditor General, requires that we address in the management letter any recommendations to improve financial management. In connection with our audit, we did not have any such recommendations. I\1 il':\ kordepedaloirterd Nedeklenailyd 20 INTERNATIONAL Honorable Jennifer J. Edwards Supervisor of Elections ➢ Section 10.554(1)(i)4., Rules of the Auditor General, requires that we address noncompliance with the provisions of contracts or grant agreements, or abuse, that have occurred, or are likely to have occurred, that have an effect on the financial statements that is less than material but which warrants the attention of those charged with governance. In connection with our audit, we did not have any such findings. ➢ Section 10.554(1)(i)5., Rules of the Auditor General, requires that the name or official title and legal authority for the primary government and each component unit of the reporting entity be disclosed in this management letter, unless disclosed in the notes to the special-purpose financial statements. See Note 1 in the notes to special-purpose financial statements. Our management letter is intended solely for the information and use of the Legislative Auditing Committee, members of the Florida Senate and the Florida House of Representatives, the Florida Auditor General, Federal and other granting agencies, and applicable management and is not intended to be and should not be used by anyone other than these specified parties. dZe./e0 7 C.ZdA 4.07C A 1/,/,‘..K._.ZZ:)/- CliftonLarsonAllen LLP Naples,Florida January 16, 2014 21 Collier County, Florida Tax Collector Special-Purpose Financial Statements and Supplemental Reports Years Ended September 30, 2013 and 2012 Collier County, Florida Tax Collector Special-Purpose Financial Statements and Other Reports Years Ended September 30, 2013 and 2012 Contents Independent Auditors' Report 1 Special-Purpose Financial Statements Special-Purpose Balance Sheets—General Fund 3 Special-Purpose Statements of Revenues, Expenditures, and Changes in Fund Balance—General Fund 4 Special-Purpose Statement of Revenues, Expenditures, and Changes in Fund Balance—Budget and Actual—General Fund—Budgetary Basis 5 Special-Purpose Statements of Fiduciary Net Position—Agency Funds 6 Notes to Special-Purpose Financial Statements 7 Other Reports Independent Auditors' Report on Internal Control Over Financial Reporting and on Compliance and Other Matters Based on an Audit of Special-Purpose Financial Statements Performed in Accordance with Government Auditing Standards 21 Management Letter 23 CliftonLarsonAllen LLP ® CLAconnect.com CliftonLarsonAllen INDEPENDENT AUDITORS'REPORT Honorable Larry H.Ray Tax Collector Collier County,Florida Report on the Special-Purpose Financial Statements We have audited the accompanying special-purpose fmancial statements of the general fund and the aggregate remaining fund information of the Collier County,Florida Tax Collector(Tax Collector),as of and for the year ended September 30,2013,and the related notes to the special-purpose financial statements,which collectively comprise the entity's financial statements as listed in the table of contents. Management's Responsibility for the Financial Statements Management is responsible for the preparation and fair presentation of these special-purpose financial statements in accordance with the basis of accounting practices specified by the Rules of the Auditor General, State of Florida for financial statements of constitutional officers. Management is also responsible for the design,implementation,and maintenance of internal control relevant to the preparation and fair presentation of special-purpose financial statements that are free from material misstatement,whether due to error or fraud. Auditors'Responsibility Our responsibility is to express opinions on these special-purpose financial statements based on our audit.We conducted our audit in accordance with auditing standards generally accepted in the United States of America and the standards applicable to financial audits contained in Government Auditing Standards, issued by the Comptroller General of the United States.Those standards require that we plan and perform the audit to obtain reasonable assurance about whether the special-purpose financial statements are free from material misstatement. An audit involves performing procedures to obtain audit evidence about the amounts and disclosures in the special-purpose financial statements.The procedures selected depend on the auditors'judgment,including the assessment of the risks of material misstatement of the special-purpose fmancial statements, whether due to fraud or error. In making those risk assessments, the auditor considers internal control relevant to the entity's preparation and fair presentation of the special-purpose financial statements in order to design audit procedures that are appropriate in the circumstances,but not for the purpose of expressing an opinion on the effectiveness of the entity's internal control.Accordingly,we express no such opinion.An audit also includes evaluating the appropriateness of accounting policies used and the reasonableness of significant accounting estimates made by management, as well as evaluating the overall presentation of the special-purpose financial statements. We believe that the audit evidence we have obtained is sufficient and appropriate to provide a basis for our audit opinions. tiFXt:\ M irdepeniwit n Eater d NEM Irtardiomi 1 INTERNATIONAL Honorable Larry H. Ray Tax Collector Opinions In our opinion, the special-purpose financial statements referred to above present fairly, in all material respects,the respective financial position of the general fund and the aggregate remaining fund information of the Tax Collector as of September 30,2013,and the respective changes in financial position and the budgetary comparison for the general fund thereof for the year then ended in accordance with the financial reporting provisions of the Rules of the Auditor General, State of Florida as described in Note 1. Prior Period Financial Statements The financial statements of the Tax Collector as of and for the year ended September 30,2012,were audited by other auditors whose report dated December 14, 2012, expressed an unmodified opinion on those statements. Basis of Accounting We draw attention to Note 1 of the special-purpose financial statements, which describes the basis of accounting. The special-purpose financial statements are prepared on the basis of the financial reporting provisions of the Rules of the Auditor General, State of Florida, which is a basis of accounting other than accounting principles generally accepted in the United States of America, to comply with the requirements of the Rules of the Auditor General, State of Florida. Our opinion is not modified with respect to that matter. Other Reporting Required by Government Auditing Standards In accordance with Government Auditing Standards,we have also issued our report dated December 16,2013, on our consideration of the Tax Collector's internal control over financial reporting and on our tests of its compliance with certain provisions of laws, regulations, contracts, and grant agreements and other matters. The purpose of that report is to describe the scope of our testing of internal control over financial reporting and compliance and the result of that testing, and not to provide an opinion on internal control over financial reporting or on compliance. That report is an integral part of an audit performed in accordance with Government Auditing Standards in considering Tax Collector's internal control over financial reporting and compliance. Restriction on Use This report is intended solely for the information and use of the Tax Collector and the Auditor General, State of Florida, and is not intended to be and should not be used by anyone other than these specified parties. d/f/17(-Z°A-'J'ct-)td1/-1.0-0t- CliftonLarsonAllen LLP Naples, Florida December 16, 2013 2 Collier County, Florida Tax Collector Special-Purpose Balance Sheets— General Fund September 30 2013 2012 Assets Cash and cash equivalents $ 6,501,784 $ 6,406,172 Due from other fiords 69,889 60,906 Accounts Receivable 660 - Prepaid rent 22,351 20,995 Security deposit 4,628 4,628 Total assets $ 6,599,312 $ 6,492,701 Liabilities and fund balance Liabilities: Accounts payable $ 23,912 $ 19,860 Due to Other Funds - 2 Due to Collier County, Florida Board of County Commissioners 5,825,759 5,730,320 Due to other governmental agencies 749,641 742,519 Total liabilities 6,599,312 6,492,701 Fund balance Total liabilities and fiord balance $ 6,599,312 $ 6,492,701 See accompanying Notes to Special-Purpose Financial Statements. 3 Collier County, Florida Tax Collector Special-Purpose Statements of Revenues, Expenditures, and Changes in Fund Balance General Fund Year Ended September 30, 2013 2012 Revenues: Commissions and fees $ 16,910,326 $ 16,750,055 Miscellaneous 272,075 264,002 Total revenues 17,182,401 17,014,057 Expenditures: General government: Personal services 9,026,470 8,899,366 Operating 1,551,181 1,602,079 Capital outlay 29,350 39,773 Distribution of excess commissions and fees to other governmental agencies 749,641 742,519 Total expenditures 11,356,642 11,283,737 Excess of revenues over expenditures 5,825,759 5,730,320 Other financing uses: Distribution of excess commissions and fees to Collier County,Florida Board of County Commissioners (5,825,759) (5,730,320) Total other financing uses (5,825,759) (5,730,320) Excess of revenues over expenditures and other financing uses — — Fund balance,beginning of year — — Fund balance, end of year $ — $ — See accompanying Notes to Special-Purpose Financial Statements. 4 Collier County, Florida Tax Collector Special-Purpose Statements of Revenues, Expenditures, and Changes in Fund Balance—Budget and Actual General Fund (Budgetary Basis) Year Ended September 30, 2013 Variance With Final Budget Budget Positive Original Final Actual (Negative) Revenues: Commissions and fees $ 16,702,695 $ 16,910,326 $ 16,910,326 $ — Miscellaneous 275,000 272,075 272,075 — Total revenues 16,977,695 17,182,401 17,182,401 — Expenditures: General government: Personal services 9,297,186 9,026,470 9,026,470 — Operating 1,894,038 1,551,181 1,551,181 — Capital outlay 29,491 29,350 29,350 — Total expenditures 11,220,715 10,607,001 10,607,001 — Excess of revenues over expenditures 5,756,980 6,575,400 6,575,400 Other financing uses: Distribution of excess commissions and fees to Collier County,Florida Board of County Commissioners (5,181,282) (5,825,759) (5,825,759) — Distribution of excess commissions and fees to other governmental agencies (575,698) (749,641) (749,641) — Total other financing uses (5,756,980) (6,575,400) (6,575,400) — Excess of revenues over expenditures and other financing uses — Fund balance,beginning of year — — — — Fund balance,end of year $ — $ — $ — $ — See accompanying Notes to Special-Purpose Financial Statements. 5 Collier County, Florida Tax Collector Special-Purpose Statements of Fiduciary Net Position Agency Fund Years Ended September 30, 2013 and 2012 September 30 2013 2012 Assets Cash and cash equivalents $ 6,178,291 $ 5,660,404 Accounts receivable 18,314 15,002 Due from other fiords — 2 Total assets $ 6,196,605 $ 5,675,408 Liabilities Due to other funds $ 69,889 $ 60,906 Due to Collier County, Florida Board of County Commissioners 812,397 792,000 Due to other governmental agencies 5,181,603 4,609,304 Due to individuals and businesses 132,716 213,198 Total liabilities $ 6,196,605 $ 5,675,408 See accompanying Notes to Special-Purpose Financial Statements. 6 Collier County, Florida Tax Collector Notes to Special-Purpose Financial Statements September 30, 2013 and 2012 1. Summary of Significant Accounting Policies Reporting Entity The Collier County, Florida Tax Collector (Tax Collector) is an elected constitutional officer as provided for by the Constitution of the State of Florida. Pursuant to Chapter 195.087, Florida Statutes, the Tax Collector's budget is submitted to the Florida Department of Revenue for approval, and a copy is forwarded to the Collier County,Florida Board of County Commissioners (Board). The special-purpose financial statements presented include the general fund and agency funds of the Tax Collector's office. The accompanying special-purpose financial statements were prepared for the purpose of complying with Section 218.39,Florida Statutes, and Chapter 10.550,Rules of the Auditor General Local Governmental Entity Audits. Chapter 10.550,Rules of the Auditor General Local Governmental Entity Audits,requires the Tax Collector to only present fund financial statements. Accordingly, due to the omission of government-wide financial statements and related disclosures, including a management's discussion and analysis, these special-purpose financial statements do not constitute a complete presentation of the financial position of the Tax Collector as of September 30,2013 and 2012, and the changes in its financial position for the years then ended, in conformity with Governmental Accounting Standards Board (GASB) Statement No. 34, Basic Financial Statements— and Management's Discussion and Analysis— for State and Local Governments, but otherwise constitute special-purpose financial statements prepared in conformity with accounting principles generally accepted in the United States of America. The financial activities of the Tax Collector, as a constitutional officer, are included in the Collier County, Florida Comprehensive Annual Financial Report. Measurement Focus,Basis of Accounting, and Basis of Presentation These special-purpose fund financial statements report detailed information about the Tax Collector. The focus of governmental fund financial statements is on major funds rather than reporting funds by type. Each major fund is reported in a separate column. 7 Collier County, Florida Tax Collector Notes to Special-Purpose Financial Statements September 30, 2013 and 2012 1. Summary of Significant Accounting Policies (continued) Governmental Funds Governmental funds are accounted for using the flow of current financial resources measurement focus. Only current assets and current liabilities, generally, are included on the special-purpose balance sheet. Operating statements for these funds present increases (i.e., revenues and other financing sources)and decreases(i.e.,expenditures and other financing uses)in net current assets. The Tax Collector's only governmental fund is the general fund. The general fund is used to account for the general operations of the Tax Collector and includes all transactions not accounted for in another fund. The modified accrual basis of accounting is used by governmental funds. Under the modified accrual basis of accounting, revenues are recognized when susceptible to accrual (i.e., when they become measurable and available to finance liabilities of the current fiscal year). For this purpose, the Tax Collector considers revenues to be available if they are collected within 60 days after year-end. Expenditures are recorded when the related fund liability is incurred, except for certain compensated absences, which are recognized as expenditures to the extent they have matured. Interest income and other revenue are recognized as they are earned and become measurable and available to pay liabilities of the current period. Substantially all of the Tax Collector's revenue is received from taxing authorities. These monies are virtually unrestricted and are revocable only for failure to comply with prescribed compliance requirements. These resources are reflected as revenue at the time of receipt; earlier if the "susceptible to accrual"criteria are met. Florida Statutes provide that the amount by which revenues exceed annual expenditures be remitted to each governmental agency or the Board immediately following the fiscal year for which the funding was provided or following the fiscal year during which other revenue was recognized. Capital outlays expended in the general fund operations are capitalized in the basic financial statements of Collier County, Florida rather than in the governmental funds of the Tax Collector. 8 Collier County, Florida Tax Collector Notes to Special-Purpose Financial Statements September 30, 2013 and 2012 1. Summary of Significant Accounting Policies(continued) Fiduciary Funds Agency Funds— Fiduciary funds are used to account for assets held by the Tax Collector in a trustee capacity or as an agent for individuals, private organizations, and other governments. Agency funds are custodial in nature(assets equal liabilities), and do not involve measurement of results of operations or have a measurement focus. Agency funds are accounted for using the accrual basis of accounting. Refund of"Excess Fees" Florida Statutes further provide that the excess of revenues over expenditures held by the Tax Collector be distributed to each governmental agency or the Board in the same proportion as the fees paid by each governmental agency bear to total fee revenues. The amount of this distribution is recorded as a liability and as either an expenditure or other financing use-transfer out, respectively, in the accompanying special-purpose financial statements. Cash and Cash Equivalents Cash and cash equivalents are highly liquid investments with original maturities of three months or less. Compensated Absences All full-time employees of the Tax Collector are allowed to accumulate an unlimited number of hours of unused sick leave and up to 240 hours of unused vacation leave. Upon termination, employees receive 100%of allowable accumulated vacation hours and a percentage of unused sick leave, depending on years of service. Vacation and sick leave payments are included in operating costs of the general fund when the payments are made to the employees. The Tax Collector does not, nor is legally required to, accumulate financial resources for these unmatured obligations. Accordingly, the liability for compensated absences is not reported in the general fund of the Tax Collector, but rather is reported in the basic financial statements of Collier County, Florida. 9 Collier County, Florida Tax Collector Notes to Special-Purpose Financial Statements September 30, 2013 and 2012 1. Summary of Significant Accounting Policies(continued) Property Taxes Property taxes in Collier County are levied by the Board and other taxing authorities. The millage levies are determined on the basis of estimates of revenue needs and the total taxable valuations within the jurisdiction of the Board and other taxing authorities. No aggregate ad valorem tax millage in excess of 10 mills on the dollar can be levied by the Board against property in the County as specified in Florida Statutes Section 200.071. Each year the total taxable property valuation is established by the Collier County, Florida Property Appraiser, and the list of property assessments is submitted to the State Department of Revenue for approval. Taxes, assessed as of December 1 of each year, are due and payable on November 1 of each year or as soon thereafter as the assessment roll is opened for collection. Pursuant to Florida law, all owners of property have the responsibility of ascertaining the amount due and paying it before April 1 of the year following the year in which the tax was assessed. Chapter 197,Florida Statutes, governs property tax collections as follows: Current Taxes All property taxes become due and payable on November 1, and are delinquent on April 1 of the following year. Discounts are allowed for early payment of 4% in November; 3% in December; 2% in January; and 1% for payment in February. Unpaid Taxes—Sale of Tax Certificates The Tax Collector advertises, as required by Florida Statutes, and sells tax certificates on all real property for unpaid taxes. The taxes assessed on the property are struck off the tax roll to the purchaser of the tax certificate. Certificates not sold are struck off to the County. The Tax Collector must receive payment before the certificates are delivered. Any person owning land upon which a tax certificate has been sold may redeem the tax certificate by paying the Tax Collector the face amount of the tax certificate plus interest and other costs. Tax Deeds Two years after the purchase of a tax certificate the owner may file an application for tax deed sale. The County, as a certificate owner, exercises similar procedures. Tax deeds are issued to the highest bidder for the property which is sold at public auction. The Clerk of the Circuit Court administers these sales. 10 Collier County, Florida Tax Collector Notes to Special-Purpose Financial Statements September 30, 2013 and 2012 1. Summary of Significant Accounting Policies (continued) Use of Estimates The preparation of these special-purpose financial statements requires management of the Tax Collector to make a number of estimates and assumptions relating to the reported amounts of assets and liabilities and the disclosure of contingent assets and liabilities at the date of the special-purpose financial statements and the reported amounts of revenues and expenditures during the period. Actual results could differ from those estimates. Implementation of New Accounting Standards During the year the Tax Collector implemented GASBS 62, Codification of Accounting and Financial Reporting Guidance Contained in Pre-November 30, 1989 FASB and AICPA Pronouncements, supersedes GASBS 20. GASBS 20 gave governments the choice to elect to follow only GASB's authoritative literature, or to follow FASB and AICPA pronouncements that did not conflict with GASB pronouncements. Upon adoption of GASBS 62, all governmental accounting guidance is codified into the GASB literature. During the year the Tax Collector implemented GASBS 63, Financial Reporting of Deferred Outflows of Resources, Deferred Inflows of Resources, and Net Position. GASBS 63 provides guidance on deferred outflows and inflows of resources. It also renames the residual amounts from "net assets" to "net position". These financial statements include the statement of net position, which reports all assets, deferred outflows of resources, liabilities, deferred inflows of resources, and net position, as applicable. 2. Budgetary Process Florida Statutes govern the preparation, adoption, and administration of the Tax Collector's annual budget. The Tax Collector submits a budget for the general fund to the Florida Department of Revenue for approval.A copy of the approved budget is provided to the Board.Any subsequent amendments to the Tax Collector's total budget must be approved by the Florida Department of Revenue. The budget for the general fund is prepared on a basis consistent with accounting principles generally accepted in the United States of America. The annual budget serves as the legal authorization for expenditures. 11 Collier County, Florida Tax Collector Notes to Special-Purpose Financial Statements September 30, 2013 and 2012 2.Budgetary Process (continued) Expenditures may not legally exceed appropriations at the fund level. Appropriations lapse at year-end. Budget control is maintained at the departmental major object expenditure level. Budgetary changes within major object expenditure categories are made at the discretion of the Tax Collector. The original budget is the first complete appropriated budget. The final budget is the original budget adjusted by all reserves, transfers, allocations, supplemental appropriations, and other legally authorized changes applicable to the fiscal year, whenever legally authorized. There is a difference between the budgetary basis of accounting and GAAP in the treatment of excess fee distributions to entities outside of the County's reporting entity. On a budgetary basis, distributions of excess fees through this fund are reported as other financing uses. On a GAAP basis, these distributions are reported as expenditures because there is a reduction in the financial resources of the County. 3. Cash and Cash Equivalents At September 30, 2013 and 2012, the carrying value of the Tax Collector's cash and cash equivalents were as follows: 2013 2012 Carrying Carrying Cre dit Type Value Value Rating Cash on hand $ 32,700 $ 32,600 N/A Demand deposits 12,647,375 12,033,976 N/A Total cash and cash equivalents $ 12,680,075 $ 12,066,576 Such amounts are reported as$6,501,784 and$6,178,291 for 2013 and$6,406,172 and$5,660,404 for 2012 in the general and agency funds,respectively. 12 Collier County, Florida Tax Collector Notes to Special-Purpose Financial Statements September 30, 2013 and 2012 3. Cash and Cash Equivalents (continued) Custodial Credit Risk At September 30, 2013, the Tax Collector's deposits were entirely covered by Federal Depository Insurance or by collateral pledged with the State Treasurer pursuant to Chapter 280, Florida Statutes. Under this Chapter, in the event of default by a participating financial institution (a qualified public depository), all participating institutions are obligated to reimburse the governmental entity for the loss. Credit Risk The Tax Collector's policy is to follow the guidance in Section 219.075, Florida Statutes, regarding the deposit of funds received and the investment of surplus funds. Sections 219.075 and 218.415, Florida Statutes, authorize the Tax Collector to invest in Florida PRIME (formerly the Local Government Surplus Funds Trust Fund) or any intergovernmental investment pool authorized pursuant to the Florida Interlocal Cooperation Act; Securities and Exchange Commission registered money market funds with the highest credit quality rating from a nationally recognized rating agency; direct obligations of the United States Treasury; federal agencies and instrumentalities or interest-bearing time deposits or savings accounts in banks organized under the laws of the United States and doing business and situated in the State of Florida, savings and loan associations which are under state supervision, or in federal savings and loan associations located in the state of Florida and organized under federal law and federal supervision, provided that any such deposits are secured by collateral as may be prescribed by law. The pool is administered by the State Treasurer, who may make additional assessments to ensure that no public funds will be lost. Interest Rate Risk The Tax Collector has no specific investment policy regarding interest rate risk. 4. Capital Assets Capital assets used by the Tax Collector are capitalized in the basic financial statements of Collier County,Florida rather than in the governmental funds of the Tax Collector.Upon acquisition,such assets are recorded as expenditures in the general fund of the Tax Collector, and are capitalized at cost in the basic financial statements of Collier County, Florida. 13 Collier County, Florida Tax Collector Notes to Special-Purpose Financial Statements September 30, 2013 and 2012 4. Capital Assets (continued) 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 value on the date received. The Tax Collector maintains custodial responsibility for the capital assets used by the office. No depreciation expense has been provided on capital assets in these special-purpose financial statements. However, depreciation expense on these assets is recorded in the basic financial statements of Collier County,Florida. The following is a summary of changes in capital assets for the year ended September 30, 2013 was as follows: October 1 September 30 2012 Additions Deductions 2013 Infrastructure $ 11,735 $ - $ - $ 11,735 Improvements other than buildings 111,914 - - 111,914 Machinery and equipment 2,705,324 29,350 (420,976) 2,313,698 Total capital assets 2,828,973 29,350 (420,976) 2,437,347 Less accumulated depreciation (2,304,265) (179,739) 419,985 (2,064,019) Total capital assets,net $ 524,708 $ (150,389) $ (991) $ 373,328 The following is a summary of changes in capital assets for the year ended September 30, 2012 was as follows: October 1 September 30 2011 Additions Deductions 2012 Infrastructure $ 11,735 $ - $ - $ 11,735 Improvements other than buildings 111,914 - - 111,914 Machinery and equipment 2,856,311 39,773 (190,760) 2,705,324 Total capital assets 2,979,960 39,773 (190,760) 2,828,973 Less accumulated depreciation (2,280,794) (180,170) 156,699 (2,304,265) Total capital assets,net $ 699,166 $ (140,397) $ (34,061) $ 524,708 14 Collier County, Florida Tax Collector Notes to Special-Purpose Financial Statements September 30, 2013 and 2012 5. Long-Term Liabilities The following is a summary of changes in long-term liabilities which are reported in the basic financial statements of Collier County, Florida: October 1 September 30 2012 Increase Decrease 2013 Accrued compensated absences $ 1,091,839 $ 452,996 $ 434,547 $ 1,110,288 October 1 September 30 2011 Increase Decrease 2012 Accrued compensated absences $ 1,091,122 $ 457,430 $ 456,713 $ 1,091,839 Of these liabilities, approximately $450,000 is expected to be paid during the fiscal year ending September 30, 2014, which will be included in the operating costs of the general fund when expended. These long-term liabilities are not reported in the special-purpose financial statements of the Tax Collector since they have not matured. 6. Employee Retirement Plans Substantially all full-time employees of the Tax Collector are eligible to participate in the State of Florida Retirement System (System), a cost-sharing multiple-employer defined benefit plan administered by the State of Florida,Division of Retirement. The System is a defined benefit plan for all state, and participating county, district school board, community college and university employees (Pension Plan). The System also offers eligible employees participation in an alternative defined contribution plan (Investment Plan). The Tax Collector participates in the Elected State Officers' Class. The plan is administered by the State of Florida. Contribution rates are established statewide for all participating governmental units. Accordingly, the actuarial information and related disclosures attributable to the Tax Collector's employees are not determinable. 15 Collier County, Florida Tax Collector Notes to Special-Purpose Financial Statements September 30, 2013 and 2012 6.Employee Retirement Plans (continued) Employees enrolled in the plan prior to July 1, 2011 who retire at or after age 62 with 6 years of credited service, or with 30 years of service regardless of age, are entitled to a retirement benefit, payable monthly for life,equal to 1.6%for regular employees,2%for senior management and 3% for county elected officials for each year of credited service times the final average compensation. Employees enrolled on or after July 1, 2011 who retire at or after age 65 with 8 years of credited service or 33 years of service regardless of age, are entitled to the retirement benefits as outlined above. Final average compensation is the employee's average of the five highest fiscal years of salary earned during credited service for those enrolled prior to July 1,2011 and the eight highest fiscal years of salary for those hired on or after July 1, 2011. Vested employees may retire before age 62 (65 years of age if hired on or after July 1, 2011) and receive benefits that are reduced 5% for each year prior to normal retirement age. Employees participating in the Investment Plan are vested after one year of service with no age requirement. The System also provides death and disability benefits. Benefits are established by Chapter 121, Florida Statutes, and Chapter 22B, Florida Administrative Code. The Deferred Retirement Option Program (DROP) is a program that provides an alternative method for payment of retirement benefits for a specified and limited period for members of the System, effective July 1, 1998. Under this program, employees may participate as of their normal retirement date and have their benefits accumulate in the Florida Retirement System Trust Fund, earning interest, while continuing to work for a System employer. Employees enrolled in DROP prior to July 1, 2011 earn interest on accumulated benefits in the Trust Fund at 6.5%, those enrolling on or after July 1, 2011 earn interest at 1.3%. The participation in the program does not change conditions of employment. When the DROP period ends, maximum of 60 months, employees must terminate employment. Elected Officials participating in DROP may continue to serve in office without voiding DROP or retirement benefits as long the Elected Official continues in that term of office or successive terms of office. At the time of termination of employment, the employee or Elected Official will receive payment of the accumulated DROP benefits, and begin receiving their monthly retirement benefit (in the same amount determined at retirement, plus annual cost-of-living increases). Investment Plan members are not eligible to participate in the DROP program, but Pension Plan members are eligible to roll their DROP lump sum into the Investment Plan as one of the distribution methods under the Pension Plan. 16 Collier County, Florida Tax Collector Notes to Special-Purpose Financial Statements September 30, 2013 and 2012 6. Employee Retirement Plans (continued) The System publishes an annual report that provides ten-year historical trend information about progress made in accumulating sufficient assets to pay benefits when due. This report may be obtained by writing to the Division of Retirement Research Education and Policy Section 1317 Winewood Boulevard,Building 8,Tallahassee,Florida 32399-1560,or by calling(877)377-1737, or accessing their Internet site at www.dms.MyFlorida.com. The Tax Collector is required to contribute an actuarially determined rate. Rates from October 1, 2012 through June 30, 2013 were 10.23% for county elected officials, 6.3% for senior management, 5.18% for regular employees and 5.44% for DROP employees based on covered payroll. The current rates, effective July 1, 2013, are 33.03% for county elected officials, 18.31% for senior management, 6.95% for regular employees and 12.84% for DROP employees based on covered payroll. In addition, as of July 1, 2011, employee contributions of 3% are required of all Pension Plan and Investment Plan members, except for those in DROP. The contribution requirements of the Tax Collector are established and may be amended by the State of Florida.The Tax Collector's employer contributions to the plan for the years ended September 30, 2013, 2012 and 2011, were $359,211, $291,878 and $574,044, respectively, equal to the required contributions for each year. 7. Other Postemployment Healthcare Benefits (OPEB)Plan The Tax Collector follows GASB Statement 45, Accounting and Financial Reporting by Employers for Postemployment Benefits other than Pensions in accounting for postemployment benefits. Plan Description. The Tax Collector participates in a group health care plan that covers eligible retirees, and their dependents, of the Board and all Constitutional Officers with the exception of the Sheriff. The Board administers the plan and establishes the benefits. The healthcare plan does not issue a stand-alone financial report, however additional actuarial information regarding the plan as a whole is disclosed in the notes to the financial statements of Collier County, Florida. 17 Collier County, Florida Tax Collector Notes to Special-Purpose Financial Statements September 30, 2013 and 2012 7. Other Postemployment Healthcare Benefits (OPEB)Plan (continued) Under Florida Statutes, retirees originally hired prior to July 1, 2011 are eligible to participate in the active medical plan by paying the active rate if they have attained age 62 and have 6 years of service or have at least 30 years of service. Employees hired on or after July 1,2011 are eligible to participate in the active medical plan by paying the active rate if they have attained age 65 and have 8 years of service or have at least 33 years of service. Employees eligible for a reduced benefit under the Florida Retirement System prior to age 62 (65 years of age if hired on or after July 1, 2011) are also eligible to participate in the medical plan. In addition, the Tax Collector provides a 100% subsidy for retirees between the ages of 55 and 65 with more than 10 years of service and 800 hours of accumulated sick leave to remit at the time of retirement. Funding Policy The contribution requirements of the plan members and the employers are established and may be amended by the County. The plans are financed by the participating agencies on a pay as you go basis through the County's self insurance internal service fund. Participating agencies contribute an additional amount per each active employee to fund retiree health care. The Tax Collector's agency had a net OPEB obligation of$13,803 as of September 30, 2013. The annual other postemployment benefit cost is calculated based on the annual required contribution of the employer(ARC), an amount actuarially determined in accordance with GASB Statement 45. The ARC represents a level of funding that, if paid by on an ongoing basis, is projected to cover normal cost each year and amortize any unfunded actuarial liabilities over a period not to exceed thirty years. An actuarial valuation on the plan as a whole was performed in November 2013. The notes to the financial statements of the County disclose additional information regarding the other postemployment benefit plan as a whole. 8. Related-Party Transactions During the fiscal years ended September 30,2013 and 2012,the Board paid commissions and fees to the Tax Collector that amounted to $15,223,495 and$15,062,312, respectively. 18 Collier County, Florida Tax Collector Notes to Special-Purpose Financial Statements September 30, 2013 and 2012 8. Related-Party Transactions (continued) At September 30, 2013 and 2012,the Tax Collector had a payable due to the Board of$6,638,156 and$6,522,320, respectively, comprised as follows: 2013 2012 Distribution of excess commissions and fees $ 5,825,759 $ 5,730,320 Agency funds due to the Board 812,397 792,000 $ 6,638,156 $ 6,522,320 9. Risk Management Collier County, Florida (County) is exposed to various risks of loss including but not limited to, general liability, health and life, property and casualty, auto and physical damage, and workers' compensation. The County is substantially self-insured and accounts for and finances its risk of uninsured losses through an internal service fund. All liabilities associated with these self-insured risks are reported in the basic financial statements of the County. The Tax Collector participates in the County's self-insurance program. During the years ended September 30, 2013 and 2012, the Tax Collector was charged $2,744,000 and $2,681,342, respectively, by the County for participation in the risk management program. The County provides coverage for up to $500,000 per claim for workers' compensation, and has purchased outside excess coverage for up to the statutory limits for each injury or illness. The County also provides coverage for up to $200,000 per occurrence for general liability and auto liability coverage and has purchased outside excess coverage for up to $5 million per claim. Negligence claims in excess of the statutory limits set in Section 768.20,Florida Statutes, which provide for limited sovereign immunity of $200,000/$300,000 per occurrence can only be recovered through an act of the State Legislature. Property claims are subject to a 5% wind deductible and a$50,000 deductible for all other perils. The County retains the first$100,000 per claim/$200,000 per occurrence for public official errors and omissions and crime coverage and has purchased outside excess coverage for up to $5 million per claim. There have been no significant reductions in insurance coverage in the last year. Settled claims have not exceeded the insurance provided by third party carriers in any of the last three years. 19 Collier County, Florida Tax Collector Notes to Special-Purpose Financial Statements September 30, 2013 and 2012 9. Risk Management(continued) The County is self-insured for health claims covering all of its employees and their eligible dependents.The County retains the first$325,000 per covered member and has purchased outside excess coverage for all claims exceeding this amount. An actuarial valuation is performed each year to estimate the amounts needed to pay prior and future claims and to establish reserves. 10. Commitments and Contingencies Leases The Tax Collector has noncancelable operating leases for certain office facilities that were utilized solely by the Tax Collector for fiscal year 2013.The three current leases include options for 5-year renewals, and contain annual escalation clauses ranging from 3-5% annually. The following is a schedule of future minimum lease payments under the operating leases: Fiscal year ending September 30: 2014 $ 253,942 2015 211,505 2016 160,409 Rental expense for all operating leases in the aggregate was $344,327 and $339,177 for the years ended September 30, 2013 and 2012, respectively. There were no contingent rentals or sublease rentals associated with leases in effect at September 30, 2013 or 2012. Litigation The Tax Collector is involved as a defendant or plaintiff in certain litigation and claims arising from the ordinary course of operations. In the opinion of the Tax Collector and legal counsel, the range of potential recoveries or liabilities will not materially affect the financial position of the Tax Collector. 20 CliftonLarsonAllen LLP CLAconnect.com CliftonLarsonAllen INDEPENDENT AUDITORS'REPORT ON INTERNAL CONTROL OVER FINANCIAL REPORTING AND ON COMPLIANCE AND OTHER MATTERS BASED ON AN AUDIT OF FINANCIAL STATEMENTS PERFORMED IN ACCORDANCE WITH GOVERNMENT AUDITING STANDARDS Honorable Larry H. Ray Tax Collector Collier County,Florida We have audited,in accordance with the auditing standards generally accepted in the United States of America and the standards applicable to financial audits contained in Government Auditing Standards issued by the Comptroller General of the United States,the special-purpose financial statements of the general fund and the aggregate remaining fund information of Collier County,Florida Tax Collector(Tax Collector), as of and for the year ended September 30, 2013, and the related notes to the special-purpose financial statements, which collectively comprise Tax Collector's financial statements,and have issued our report thereon dated December 16,2013. Internal Control Over Financial Reporting In planning and performing our audit of the special-purpose financial statements, we considered Tax Collector's internal control over fmancial reporting(internal control)to determine the audit procedures that are appropriate in the circumstances for the purpose of expressing our opinions on the special-purpose financial statements, but not for the purpose of expressing an opinion on the effectiveness of Tax Collector's internal control. Accordingly, we do not express an opinion on the effectiveness of Tax Collector's internal control. A deficiency in internal control exists when the design or operation of a control does not allow management or employees, in the normal course of performing their assigned functions, to prevent, or detect and correct, misstatements on a timely basis. A material weakness is a deficiency, or a combination of deficiencies, in internal control, such that there is a reasonable possibility that a material misstatement of the entity's special-purpose financial statements will not be prevented, or detected and corrected on a timely basis. A significant deficiency is a deficiency, or a combination of deficiencies, in internal control that is less severe than a material weakness, yet important enough to merit attention by those charged with governance. Our consideration of internal control was for the limited purpose described in the first paragraph of this section and was not designed to identify all deficiencies in internal control that might be material weaknesses or significant deficiencies. Given these limitations, during our audit we did not identify any deficiencies in internal control that we consider to be material weaknesses.However,material weaknesses may exist that have not been identified. NF k I;A MIMepstlert nentetdNenelrterAlarel 21 INTERNATIONAL Honorable Larry H. Ray Tax Collector Compliance and Other Matters As part of obtaining reasonable assurance about whether Tax Collector's special-purpose financial statements are free from material misstatement, we performed tests of its compliance with certain provisions of laws, regulations,contracts,and grant agreements,noncompliance with which could have a direct and material effect on the determination of financial statement amounts.However,providing an opinion on compliance with those provisions was not an objective of our audit,and accordingly,we do not express such an opinion.The results of our tests disclosed no instances of noncompliance or other matters that are required to be reported under Government Auditing Standards. Purpose of this Report The purpose of this report is solely to describe the scope of our testing of internal control and compliance and the result of that testing,and not to provide an opinion on the effectiveness of the entity's internal control or on compliance. This report is an integral part of an audit performed in accordance with Government Auditing Standards in considering the entity's internal control and compliance.Accordingly,this communication is not suitable for any other purpose. CliftonLarsonAllen LLP Naples,Florida December 16, 2013 22 ttAii i CliftonLarsonAllen LLP �• CLAconnect.com CliftonLarsonAllen MANAGEMENT LETTER Honorable Larry H. Ray Tax Collector Collier County,Florida We have audited the special-purpose financial statements of the general fund and the aggregate remaining fund information of the Collier County,Florida Tax Collector(Tax Collector)as of and for the year ended September 30,2013,and have issued our report thereon dated December 16, 2013. We conducted our audit in accordance with auditing standards generally accepted in the United States of America and the standards applicable to financial audits contained in Government Auditing Standards, issued by the Comptroller General of the United States Chapter 10.550, Rules of the Florida Auditor General. We have issued our Independent Auditors' Report on Internal Control over Financial Reporting and Compliance and Other Matters based on an Audit of Financial Statements Performed in Accordance with Government Auditing Standards. Disclosures in that report which is dated December 16, 2013 should be considered in conjunction with this management letter. Additionally, our audit was conducted in accordance with the Chapter 10.550, Rules of the Auditor General, which govern the conduct of local governmental entity audits performed in the State of Florida. This letter includes the following information,which is not included in the aforementioned auditor's 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. Corrective actions have been taken to address findings and recommendations made in the preceding annual financial audit report. ➢ Section 10.554(1)(i)2., Rules of the Auditor General, requires our audit to include a review of the provisions of Section 218.415, Florida Statutes, regarding the investment of public funds. In connection with our audit, we determined that the Tax Collector complied with Section 218.415, Florida Statutes. > Section 10.554(1)(i)3.,Rules of the Auditor General,requires that we address in the management letter any recommendations to improve financial management.In connection with our audit,we did not have any such recommendations. �.X I,\ Paindepetart 23 INTER M1 ATIU N Al. Honorable Larry H.Ray Tax Collector ➢ Section 10.554(1)(i)4.,Rules of the Auditor General,requires that we address noncompliance with the provisions of contracts or grant agreements, or abuse, that have occurred, or are likely to have occurred, that have an effect on the financial statements that is less than material but which warrants the attention of those charged with governance.In connection with our audit,we did not have any such findings. ➢ Section 10.554(1)(i)5., Rules of the Auditor General, requires that the name or official title and legal authority for the primary government and each component unit of the reporting entity be disclosed in this management letter, unless disclosed in the notes to the special-purpose financial statements. See Note 1 in the notes to special-purpose financial statements. Our management letter is intended solely for the information and use of the Legislative Auditing Committee, members of the Florida Senate and the Florida House of Representatives,the Florida Auditor General,Federal and other granting agencies, and applicable management and is not intended to be and should not be used by anyone other than these specified parties. dV1 '7(-Z0f44)-7&1-//40.0<-ZZ.) CliftonLarsonAllen LLP Naples,Florida December 16, 2013 • 24 •_ . = _ J �r ,t � : . / —L. ! ) ! \l, ,.\,.s.'•\ �/` .Vi : ;: , ! 1 �, it \ ` `\ � C d" ,N 'I‘ ,.---- : filt / ‘,`' r ,. fly . is t `� 1 \—L—.—'K .. \ ��.. Co«ler Coup-v�, -.orido�, _`, ' \ r , f� e51-ocb(iskal Nl , IgZ3 .� :,1 f / V 1•_y� . i __-r % - i �� _ r I I �' �, ; \ r • J \ —I J 1 t . r 1 ""1 — ‘ \ \ ;_\ \ _ \ ''''-'7.W T\`-4—_— • —