FY13 Independent Audit Port of the Islands
Community Improvement District
ANNUAL FINANCIAL REPORT
September 30, 2013
Port of the Islands Community Improvement District
ANNUAL FINANCIAL REPORT
Fiscal Year Ended September 30, 2013
TABLE OF CONTENTS,
Page
Number
FINANCIAL SECTION
REPORT OF INDEPENDENT AUDITORS 1-2
MANAGEMENT'S DISCUSSION AND ANALYSIS 3-8
BASIC FINANCIAL STATEMENTS
Government-wide Financial Statements
Statement of Net Position 9
Statement of Activities 10
Fund Financial Statements
Balance Sheet—General Fund 11
Reconciliation of Total General Fund Balances
to Net Position of Governmental Activities 12
Statement of Revenues, Expenditures and Changes in
Fund Balances —General Fund 13
Reconciliation of the Statement of Revenues, Expenditures and
Changes in Fund Balances of General Fund to the
Statement of Activities 14
Statement of Revenues, Expenditures and Changes in Fund
Balances — Budget and Actual—General Fund 15
Statement of Net Position—Water& Sewer Fund 16
Statement of Revenues, Expenses and Changes in Fund
Net Position—Water& Sewer Fund 17
Statement of Cash Flows—Water& Sewer Fund 18
Notes to Financial Statements 19-32
INDEPENDENT AUDITOR'S REPORT ON INTERNAL CONTROL OVER
FINANCIAL REPORTING AND ON COMPLIANCE AND OTHER MATTERS
BASED ON AN AUDIT OF FINANCIAL STATEMENTS PERFORMED IN
ACCORDANCE WITH GOVERNMENT AUDITING STANDARDS 33-34
MANAGEMENT LETTER 35-36
ccec Berger, Toombs, Elam,
- Gaines & Frank
Certified Public Accountants PL
600 Citrus Avenue
Suite 200
Fort Pierce, Florida 34950
772/461-6120//461-1155
FAX: 772/468-9278
REPORT OF INDEPENDENT AUDITORS
To the Board of Supervisors
Port of the Islands Community Improvement District
Collier County, Florida
Report on the Financial Statements
We have audited the accompanying basic financial statements of Port of the Islands Community
Improvement District as of and for the year ended September 30, 2013, as listed in the table of
contents.
Management's Responsibility for the Financial Statements
Management is responsible for the preparation and fair presentation of these financial
statements in accordance with accounting principles generally accepted in the United States of
America; this includes the design, implementation, and maintenance of internal control relevant
to the preparation and fair presentation of financial statements that are free from material
misstatement, whether due to fraud or error.
Auditor's Responsibility
Our responsibility is to express an opinion on these financial statements based on our audits.
We conducted our audits in accordance with auditing standards generally accepted in the
United States of America. Those standards require that we plan and perform the audit to obtain
reasonable assurance about whether the financial statements are free from material
misstatement.
An audit involves performing procedures to obtain audit evidence about the amounts and
disclosures in the financial statements. The procedures selected depend on the auditor's
judgment, including the assessment of the risks of material misstatement of the financial
statements, whether due to fraud or error. In making those risk assessments, the auditor
considers internal control relevant to the entity's preparation and fair presentation of the
financial statements in order to design audit procedures that are appropriate in the
circumstances, but not for the purpose of expressing an opinion on the effectiveness of the
entity's internal control. Accordingly, we express no such opinion. An audit also includes
evaluating the appropriateness of accounting policies used and the reasonableness of
significant accounting estimates made by management, as well as evaluating the overall
presentation of the financial statements.
We believe that the audit evidence we have obtained is sufficient and appropriate to provide a
basis for our audit opinion. Fort Pierce/Stuart
Member AICPA Member AICPR Division For CPA Firms Member FICPA
Private Companies Practice Section
eet2 Berger, Toombs, Elam,
Ccy Gaines & Frank
To the Board of Supervisors
Port of the Islands Community Improvement District
Opinion
In our opinion, the basic financial statements referred to above present fairly, in all material
respects, the financial position of the governmental activities, the business-type activities, the
aggregate remaining fund information and each major fund of Port of the Islands Community
Improvement District as of September 30, 2013, and the respective changes in financial position
and the budgetary comparison for the General Fund for the year then ended in conformity with
accounting principles generally accepted in the United States of America.
Emphasis of Matter
As discussed in Note K to the financial statements, bond issuance costs were expensed as of
October 1, 2012 and net position was restated in accordance with Port of the Islands
Community Improvement District's implementation of Governmental Accounting Standards
Board Statement No. 65. Our opinion is not modified with respect to this matter.
Other Matters
Management's Discussion and Analysis
The Management's Discussion and Analysis is not a required part of the basic financial
statements but is supplementary information required by the Governmental Accounting
Standards Board. We have applied certain limited procedures, which consisted principally of
inquiries of management regarding the methods of measurement and presentation of the
supplementary information. However, we did not audit the information and express no opinion
on it.
Other Reporting Required by Government Auditing Standards
In accordance with Government Auditing Standards, we have also issued a report dated April
29, 2014 on our consideration of the District's internal control over financial reporting and on our
tests of its compliance with certain provisions of laws, regulations and contracts.
The purpose of that report is to describe the scope of our testing of internal control over financial
reporting and compliance and the results of that testing, and not to provide an opinion on
internal control over financial reporting or on compliance. That report is an integral part of an
audit performed in accordance with Government Auditing Standards in considering Port of the
Islands Community Improvement District's internal control over financial reporting and
compliance.
daft h }�..,t4„&de....
Berger, Toombs, Elam, Gaines & Frank
Certified Public Accountants PL
Fort Pierce, Florida
April 29, 2014
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Port of the Islands Community Improvement District
MANAGEMENT'S DISCUSSION AND ANALYSIS
For the Year Ended September 30, 2013
Management's discussion and analysis of Port of the Islands Community Improvement District
(the District) financial performance provides an objective and easily readable analysis of the
District's financial activities. The analysis provides summary financial information for the District
and should be read in conjunction with the District's financial statements.
OVERVIEW OF THE FINANCIAL STATEMENTS
The District's basic financial statements comprise three components; 1) Government-wide
financial statements, 2) Fund financial statements, and 3) Notes to financial statements. The
Government-wide financial statements present an overall picture of the District's financial
position and results of operations. The Fund financial statements present financial information
for the District's major funds. The Notes to financial statements provide additional information
concerning the District's finances.
The Government-wide financial statements are the statement of net position and the
statement of activities. These statements use accounting methods similar to those used by
private-sector companies. Emphasis is placed on the net position of governmental activities
and business-type activities and the change in net position. Governmental activities are
primarily supported by special assessments. Business-type activities are supported by charges
to the users of those activities, such as water and sewer service charges.
The statement of net position presents information on all assets and liabilities of the District,
with the difference between assets and liabilities reported as net position. Net position are
reported in three categories; 1) invested in capital assets, net of related debt, 2) restricted and
3) unrestricted. Assets, liabilities, and net position are reported for all Governmental activities
separate from the assets, liabilities, and net position of business-type activities.
The statement of activities presents information on all revenues and expenses of the District
and the change in net position. Expenses are reported by major function and program revenues
relating to those functions are reported, providing the net cost of all functions provided by the
District. To assist in understanding the District's operations, expenses have been reported as
governmental activities or business-type activities. Governmental activities financed by the
District include physical environment and general and government. Business-type activities
financed by user charges include water and sewer services.
Fund financial statements present financial information for the governmental fund and enterprise
fund. These statements provide financial information for the major funds of the District.
Governmental fund financial statements provide information on the current assets and liabilities
of the funds, changes in current financial resources (revenues and expenditures), and current
available resources. The enterprise funds financial statements provide information on all assets
and liabilities of the funds, changes in the economic resources (revenues and expenses), and
total economic resources.
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Port of the Islands Community Improvement District
MANAGEMENT'S DISCUSSION AND ANALYSIS
For the Year Ended September 30, 2013
OVERVIEW OF THE FINANCIAL STATEMENTS (CONTINUED)
Fund financial statements include a balance sheet and a statement of revenues,
expenditures and changes in fund balances for all governmental funds. A statement of
revenues, expenditures, and changes in fund balances—budget and actual, is provided for
the District's General Fund. For the water and sewer fund, a statement of net position, a
statement of revenues, expenses, and changes in fund net position; and a statement of
cash flows are presented. Fund financial statements provide more detailed information about
the District's activities. Individual funds are established by the District to track revenues that are
restricted to certain uses or to comply with legal requirements.
The government-wide financial statements and the fund financial statements provide different
pictures of the District. The government-wide financial statements provide an overall picture of
the District's financial standing, split between Governmental Activities and Business-type
Activities. These statements are comparable to private-sector companies and give a good
understanding of the District's overall financial health and how the District paid for the various
activities, or functions, provided by the District. All assets of the District, including buildings,
land, and roads are reported in the statement of net position. All liabilities, including principal
outstanding on bond, are included. The statement of activities includes depreciation on all
long lived assets of the District, but transactions between the different functions of the District
have been eliminated in order to avoid "doubling up" the revenues and expenses. The fund
financial statements provide a picture of the major funds of the District. In the case of
governmental activities, outlays for long lived assets are reported as expenditures and long term
liabilities, such as general obligation bonds, are not included in the fund financial statements.
To provide a link from the fund financial statements to the government-wide financial
statements, a reconciliation is provided from the fund financial statements to the government-
wide financial statements.
Notes to financial statements provide additional detail concerning the financial activities and
financial balances of the District. Additional information about the accounting practices of the
District and investments of the District are some of the items included in the notes to the
financial statements.
Financial Highlights
The following are the highlights of financial activity for the year ended September 30, 2013.
♦ The District's total assets exceeded total liabilities by $9,592,102. Unrestricted net
position for Governmental Activities was $1,260,706 and for Business-type activities was
$(421,214). Invested in capital assets, net of related debt for Governmental Activities
were $836,860 and for Business-type activities were $7,915,750.
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Port of the Islands Community Improvement District
MANAGEMENT'S DISCUSSION AND ANALYSIS
For the Year Ended September 30, 2013
OVERVIEW OF THE FINANCIAL STATEMENTS (CONTINUED)
Financial Highlights (Continued)
• Governmental activities revenues totaled $400,191 while governmental activities
expenses totaled $388,476. Business-type revenues totaled $1,234,283 while business-
type expenses totaled $1,256,672.
Financial Analysis of the District
The following schedule provides a summary of the assets, liabilities and net position of the
District. It is not intended to be a complete presentation of government-wide financial activity.
Net Position
Governmental Activities Business-type Activities Total
2013 2012 2013 2012 2013 2012
Current assets $ 1,275,358 $ 1,221,535 $ (71,395) $ 392,212 $ 1,203,963 $ 1,613,747
Capital assets,net 836,860 879,493 11,725,588 12,019,801 12,562,448 12,899,294
Other non-current assets
Total Assets 2,112,218 2,101,028 11,654,193 12,412,013 13,766,411 14,513,041
Current liabilities 14,652 15,177 668,685 889,358 683,337 904,535
Non-current liabilities - - 3,490,972 4,005,730 3,490,972 4,005,730
Total Liabilities 14,652 15,177 4,159,657 4,895,088 4,174,309 4,910,265
Net Position
Investment in capital
assets, net related debt 836,860 879,493 7,915,750 8,019,596 * 8,752,610 8,899,089
Unrestricted 1,260,706 1,206,358 (421,214) (502,671) 839,492 703,687
Total Net Position $ 2,097,566 $ 2,085,851 $ 7,494,536 $ 7,516,925 " $ 9,592,102 $ 9,602,776
*Restated(Note K)
The increase in current assets for governmental activities is primarily due to increases in cash
and investments as a result of the positive changes in net position.
The decrease in current assets for business-type activities is primarily due to the amount due to
the general fund and capital activity in the current year paid from the construction fund.
The decrease in capital assets for governmental activities and business-type activities is
primarily due to depreciation expense in the current year.
The decrease in current liabilities for business-type activities is primarily due to a reduction in
payables related to construction on capital assets that was completed in the prior year.
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Port of the Islands Community Improvement District
MANAGEMENT'S DISCUSSION AND ANALYSIS
For the Year Ended September 30, 2013
OVERVIEW OF THE FINANCIAL STATEMENTS (CONTINUED)
Financial Analysis of the District(Continued)
The decrease in non-current liabilities for business-type activities is primarily due to principal
payments on bonds in the current year.
The following schedule provides a summary of the changes in net position of the District and is
presented at the government-wide level for comparison purposes. It is not intended to be a
complete presentation of District-wide financial activity.
Financial Activity
Governmental Activities Business-type Activities Total
2013 2012 2013 2012 2013 2012
Program Revenues
Charges for services $ 393,680 $ 391,027 $ 1,224,109 $ 1,208,042 $ 1,617,789 $ 1,599,069
General Revenues
Investment earnings 4,936 8,508 3,279 9,121 8,215 17,629
Miscellaneous 1,575 - 6,895 5,045 8,470 5,045
Total Revenues 400,191 399,535 1,234,283 1,222,208 1,634,474 1,621,743
Expenses
General government 119,065 132,064 - 119,065 132,064
Physical environment 269,411 271,700 - - 269,411 271,700
Water and sewer - - 1,256,672 1,313,858 * 1,256,672 1,313,858
Total Expenses 388,476 403,764 1,256,672 1,313,858 1,645,148 1,717,622
Change in Net Position 11,715 (4,229) (22,389) (91,650) (10,674) (95,879)
Net Position-
Beginning of Year 2,085,851 2,090,080 7,516,925 " 7,608,575 " 9,602,776 9,698,655
Net Position-
End of Year $ 2,097,566 $ 2,085,851 $ 7,494,536 $ 7,516,925 * $ 9,592,102 $ 9,602,776
•Restated(Note K)
The decrease in general government expenses is primarily due to a decrease in engineering
and legal fees.
The decrease in water and sewer expenses is primarily related to the loss on disposal of capital
assets in the prior year recorded as an expense.
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Port of the Islands Community Improvement District
MANAGEMENT'S DISCUSSION AND ANALYSIS
For the Year Ended September 30, 2013
OVERVIEW OF THE FINANCIAL STATEMENTS (CONTINUED)
Capital Assets Activity
The following schedule provides a summary of the District's capital assets at September 30,
2013.
Governmental Business-Type
Description Activities Activities Total
Land and improvements $ 228,197 $ 293,061 $ 521,258
Improvements other than buildings 110,121 - 110,121
Infrastructure 1,313,611 15,409,143 16,722,754
Equipment 15,613 226,308 241,921
Construction in progress 3,090 3,090
Less: accumulated depreciation (830,682) (4,206,014) (5,036,696)
Total Capital Assets (Net) $ 836,860 $ 11,725,588 $ 12,562,448
During the year, depreciation expense was $42,633 for governmental activities. Capital assets
totaling $202,983 were added, and depreciation expense was $491,204 for business-type
activities.
General Fund Budgetary Highlights
The budget exceeded governmental expenditures primarily because of lower capital outlay
expenditures than were expected.
There were no amendments to the September 30, 2013 budget.
Debt Management
Business-type Activities debt includes the following:
• In October 2010, the District issued $5,500,000 Special Assessment Revenue, Series
2010 bonds. These bonds were issued to finance the construction of financing a potable
water treatment plant within the District. The balance outstanding at September 30, 2013
was $4,005,730.
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Port of the Islands Community Improvement District
MANAGEMENT'S DISCUSSION AND ANALYSIS
For the Year Ended September 30, 2013
OVERVIEW OF THE FINANCIAL STATEMENTS (CONTINUED)
Economic Factors and Next Year's Budget
Port of the Islands Community Improvement District does not expect any economic factors to
have any significant effect on the financial position or results of operations of the District in fiscal
year 2014.
Request for Information
The financial report is designed to provide a general overview of Port of the Islands Community
Improvement District's finances for all those with an interest. Questions concerning any of the
information provided in this report or requests for additional information should be addressed to
the District Manager, Severn Trent Management Services, 210 N. University Drive, Suite 702,
Coral Springs, Florida 33071.
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Port of the Islands Community Improvement District
STATEMENT OF NET POSITION
September 30, 2013
Governmental Business-Type
Activities Activities Total
ASSETS
Current Assets
Cash and equivalents $ 771,121 $ 196,405 $ 967,526
Cash restricted for customer deposits - 33,100 33,100
Investments 163,250 13,924 177,174
Accounts receivable 3,840 7,012 10,852
Due from other governments 3,013 7,856 10,869
Prepaid expenses 1,921 2,521 4,442
Internal balances 332,213 (332,213) -
Total Current Assets 1,275,358 (71,395) 1,203,963
Non-current Assets
Capital assets, not being depreciated
Land and improvements 228,197 293,061 521,258
Construction in progress - 3,090 3,090
Capital assets, being depreciated
Infrastructure 1,313,611 15,409,143 16,722,754
Improvements other than buildings 110,121 - 110,121
Equipment 15,613 226,308 241,921
Less: accumulated depreciation (830,682) (4,206,014) (5,036,696)
Total Non-current Assets 836,860 11,725,588 12,562,448
Total Assets 2,112,218 11,654,193 13,766,411
LIABILITIES
Current Liabilities
Accounts payable and accrued expenses 14,652 62,243 76,895
Customer deposits payable from
restricted assets - 33,100 33,100
Accrued interest - 58,584 58,584
Bonds payable - 514,758 514,758
Total Current Liabilities 14,652 668,685 683,337
Non-current Liabilities
Bonds payable - 3,490,972 3,490,972
Total Liabilities 14,652 4,159,657 4,174,309
NET POSITION
Invested in capital assets, net of related debt 836,860 7,915,750 8,752,610
Unrestricted 1,260,706 (421,214) 839,492
Total Net Position $ 2,097,566 $ 7,494,536 $ 9,592,102
See accompanying notes to financial statements.
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Port of the Islands Community Improvement District
BALANCE SHEET
GENERAL FUND
September 30, 2013
ASSETS
Cash and equivalents $ 771,121
Investments 163,250
Accounts receivable 3,840
Due from other funds 332,213
Due from other governments 3,013
Prepaid expenses 1,921
Total Assets $ 1,275,358
LIABILITIES AND FUND BALANCES
Liabilities:
Accounts payable and accrued expenses $ 14,652
Fund Balances:
Nonspendable:
Investments 7,331
Prepaid expenses 1,921
Assigned - first quarter operations 103,815
Unassigned 1,147,639
Total Fund Balances 1,260,706
Total Liabilities and Fund Balances $ 1,275,358
See accompanying notes to financial statements.
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Port of the Islands Community Improvement District
RECONCILIATION OF TOTAL GENERAL FUND BALANCES
TO NET POSITION OF GOVERNMENTAL ACTIVITIES
September 30, 2013
Total Governmental Fund Balances $ 1,260,706
Amounts reported for governmental activities in the Statement of Net Position
are different because:
Capital assets, $1,667,542, net of accumulated depreciation, $(830,682),
used in governmental activities are not financial resources and; therefore,
are not reported in the funds. 836,860
Net Position of Governmental Activities $ 2,097,566
See accompanying notes to financial statements.
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Port of the Islands Community Improvement District
STATEMENT OF REVENUES, EXPENDITURES AND CHANGES
IN FUND BALANCES -GENERAL FUND
For the Year Ended September 30, 2013
Revenues
Special assessments $ 393,680
Investment income 4,936
Miscellaneous revenues 1,575
Total Revenues 400,191
Expenditures
Current
General government 119,065
Physical environment 226,778
Total Expenditures 345,843
Net change in fund balances 54,348
Fund Balances-October 1, 2012 1,206,358
Fund Balances- September 30, 2013 $1,260,706
See accompanying notes to financial statements.
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Port of the Islands Community Improvement District
RECONCILIATION OF THE STATEMENT OF REVENUES, EXPENDITURES
AND CHANGES IN FUND BALANCES OF GENERAL FUND
TO THE STATEMENT OF ACTIVITIES
For the Year Ended September 30, 2013
Net Change in Fund Balances-Total Governmental Funds $ 54,348
Amounts reported for governmental activities in the Statement of Activities are
different because:
Governmental funds report capital outlays as expenditures. However, in the
Statement of Activities, the cost of those assets is allocated over their
estimated useful lives as depreciation expense. This is the amount
of depreciation expense. (42,633)
Change in Net Position of Governmental Activites $ 11,715
See accompanying notes to financial statements.
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Port of the Islands Community Improvement District
STATEMENT OF REVENUES, EXPENDITURES AND CHANGES IN
FUND BALANCES - BUDGET AND ACTUAL-GENERAL FUND
For the Year Ended September 30, 2013
Variance with
Final Budget
Original Final Positive
Budget Budget Actual (Negative)
Revenues
Special assessments $ 417,984 $ 417,984 $ 393,680 $ (24,304)
Investment income 2,177 2,177 4,936 2,759
Miscellaneous revenues - 1,575 1,575
Total Revenues 420,161 420,161 400,191 (19,970)
Expenditures
Current
General government 120,827 120,827 119,065 1,762
Physical environment 223,540 223,540 226,778 (3,238)
Capital outlay 70,894 70,894 - 70,894
Total Expenditures 415,261 415,261 345,843 69,418
Net change in fund balances 4,900 4,900 54,348 49,448
Fund Balances-October 1, 2012 1,293,898 1,293,898 1,206,358 (87,540)
Fund Balances-September 30, 2013 $1,298,798 $1,298,798 $1,260,706 $ (38,092)
See accompanying notes to financial statements.
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Port of the Islands Community Improvement District
STATEMENT OF NET POSITION -WATER&SEWER FUND
September 30, 2013
ASSETS
Current Assets
Cash and equivalents $ 196,405
Cash restricted for customer deposits 33,100
Investments 13,924
Accounts receivable 7,012
Due from other governments 7,856
Prepaid expenses 2,521
Total Current Assets 260,818
Non-Current Assets
Land and improvements 293,061
Improvements other than buildings 15,409,143
Equipment 226,308
Construction in progress 3,090
Less: Accumulated depreciation (4,206,014)
Total Non-Current Assets 11,725,588
Total Assets 11,986,406
LIABILITIES
Current Liabilities
Accounts payable and accrued expenses 62,243
Due to other funds 332,213
Customer deposits payable from restricted assets 33,100
Accrued interest 58,584
Bonds payable 514,758
Total Current Liabilities 1,000,898
Non-current Liabilities
Bonds payable 3,490,972
Total Liabilities 4,491,870
NET POSITION 7,915,750
Invested in capital assets, net of related debt
Unrestricted (421,214)
Total Net Position $ 7,494,536
See accompanying notes to financial statements.
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Port of the Islands Community Improvement District
STATEMENT OF REVENUES, EXPENSES AND CHANGES IN FUND NET POSITION -
WATER &SEWER FUND
September 30, 2013
Operating Revenues:
Charges for services
Water $ 41,561
Sewer 64,573
Irrigation 91,707
Special assessments 1,026,268
Miscellaneous revenues 6,895
Total Operating Revenues 1,231,004
Operating Expenses:
General and administrative 135,850
Plant operations 478,836
Depreciation 491,203
Total Operating Expenses 1,105,889
Operating Income(Loss) 125,115
Non-Operating Revenues (Expenses):
Interest earnings 3,279
Interest expense (150,783)
Total non-operating revenues/(expenses) (147,504)
Change in Net Position (22,389)
Net Position - October 1, 2012 7,516,925
Net Position - September 30, 2013 $ 7,494,536
See accompanying notes to financial statements.
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Port of the Islands Community Improvement District
STATEMENT OF CASH FLOWS-WATER&SEWER FUND
September 30, 2013
CASH FLOWS FROM OPERATING ACTIVITIES
Receipts from customers $ 199,968
Receipts from special assessments 1,026,268
Payments to suppliers for goods and services (747,267)
Net Cash Provided by Operating Activities 478,969
CASH FLOWS FROM CAPITAL AND
RELATED FINANCING ACTIVITIES
Investment in capital assets (196,991)
Principal payments on long-term debt (497,303)
Interest paid on long-term debt (158,056)
Net Cash Used by Financing Activities (852,350)
CASH FLOWS FROM INVESTING ACTIVITIES
Sale of investments 17,597
Purchase of investments (2,950)
Interest on pooled cash and investments 3,279
Net Cash Provided by Investing Activities 17,926
Net Decrease in Cash and Cash Equivalents (355,455)
Cash and equivalents-Ocotober 1, 2012 584,960
Cash and equivalents- September 30, 2013 $ 229,505
RECONCILIATION OF OPERATING INCOME TO NET
CASH PROVIDED BY OPERATING ACTIVITIES
Operating income $ 125,115
Adjustments to reconcile operating income to net cash
provided by operating activities:
Depreciation expense 491,204
Increase in accounts receivable (4,889)
Increase in due from other governments (129)
Increase in prepaid expenses (80)
Increase in due to other funds 98,603
Decrease in accounts payable and accrued expenses (214,232)
Decrease in retainage payable (16,873)
Increase in customer deposits 250
Net Cash Provided by Operating Activities $ 478,969
See accompanying notes to financial statements.
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Port of the Islands Community Improvement District
NOTES TO FINANCIAL STATEMENTS
September 30, 2013
NOTE A—SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES
The financial statements of Port of the Islands Community Improvement District (the District)
have been prepared in conformity with generally accepted accounting principles (GAAP) as
applied to governmental units. The Governmental Accounting Standards Board (GASB) is the
accepted standard-setting body for establishing governmental accounting and financial reporting
principles. The District's more significant accounting policies are described below.
1. Reporting Entity
The District is a local unit of special purpose government located in Collier County,
Florida, (the "County") which was established pursuant to Ordinance No. 86-64 (Act)
enacted by the County Commission effective September 16, 1986. The District was
established for the purpose of establishing and maintaining a water and sewer system,
road and drainage systems, and other systems and facilities as provided in Section 190
of the Florida Statutes.
The District is governed by a five-member Board of Supervisors ("the Board"). The
District operates within the criteria established by Chapter 190. The Board has the final
responsibility for. 1) assessing and levying maintenance taxes and special assessments,
2) approving budgets, 3) exercising control over facilities and properties, 4)' controlling
the use of funds generated by the District, 5) approving the hiring and firing of key
personnel, and 6)financing improvements.
As required by GAAP, these financial statements present the Port of the Islands
Community Improvement District (the primary government), as a stand-alone
government. The reporting entity for the District includes all functions of government in
which the District's Board exercises oversight responsibility which includes, but is not
limited to, financial interdependency, selection of governing authority, designation of
management, significant ability to influence operations and accountability for fiscal
matters.
Based upon the application of the above-mentioned criteria, as set forth by the
Governmental Accounting Standards Board, the District has identified no component
units.
2. Measurement Focus and Basis of Accounting
The basic financial statements of the District are composed of the following:
• Government-wide financial statements
• Fund financial statements
• Notes to financial statements
- 19 -
Port of the Islands Community Improvement District
NOTES TO FINANCIAL STATEMENTS
September 30, 2013
NOTE A—SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES (CONTINUED)
2. Measurement Focus and Basis of Accounting (Continued)
a. Government-wide Financial Statements
Government-wide financial statements report all non-fiduciary information about the
reporting government as a whole. These statements include separate columns for
the governmental and business-type activities of the primary government. For the
most part, the effect of interfund activity has been removed from these statements.
Governmental activities which normally are supported by special assessments and
interest, are reported separately from business-type activities. Program revenues
include charges for services and special assessments. Program revenues are
netted with program expenses in the Statement of Activities to present the net cost of
each program
Amounts paid to acquire capital assets are capitalized as assets, rather than
reported as an expenditure. Proceeds of long-term debt are recorded as liabilities in
the government-wide financial statements, rather than as an other financial source.
Amounts paid to reduce long-term indebtedness of the reporting government are
reported as a reduction of the related liability, rather than as an expenditure.
b. Fund Financial Statements
The underlying accounting system of the District is organized and operated on the
basis of separate funds, each of which is considered to be a separate accounting
entity. The operations of each fund are accounted for with a separate set of self-
balancing accounts that comprise its assets, liabilities, fund equity, revenues and
expenditures or expenses, as appropriate. Governmental resources are allocated to
and accounted for in individual funds based upon the purposes for which they are to
be spent and the means by which spending activities are controlled.
Fund financial statements for the primary government's governmental funds are
presented after the government-wide financial statements. These statements display
information about major funds individually.
Governmental Funds
The District classifies fund balance according to Governmental Accounting
Standards Board Statement 54 - Fund Balance Reporting and Governmental Fund
Type Definitions. The Statement requires the fund balance for governmental funds to
be reported in classifications that comprise a hierarchy based primarily on the extent
to which the government is bound to honor constraints on the specific purposes for
which amounts in those funds can be spent. The classifications include non-
spendable, restricted, committed, assigned and unassigned.
- 20-
Port of the Islands Community Improvement District
NOTES TO FINANCIAL STATEMENTS
September 30, 2013
NOTE A—SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES (CONTINUED)
2. Measurement Focus and Basis of Accounting (Continued)
b. Fund Financial Statements(Continued)
Governmental Funds (Continued)
The District has various policies governing the fund balance classifications.
Nonspendable Fund Balance—This classification consists of amounts that cannot be
spent because they are either not in spendable form or are legally or contractually
required to be maintained intact.
Restricted Fund Balance — This classification includes amounts that can be spent
only for specific purposes stipulated by constitution, external resource providers, or
through enabling legislation.
Assigned Fund Balance — This classification consists of the Board of Supervisors'
intent to be used for specific purposes, but are neither restricted nor committed.
Unassigned Fund Balance — This classification is the residual classification for the
government's general fund and includes all spendable amounts not contained in the
other classifications. Unassigned fund balance is considered to be utilized first when
an expenditure is incurred for purposes for which amounts in any of those
unrestricted fund balance classifications could be used.
Fund Balance Spending Hierarchy - For all governmental funds except special
revenue funds, when restricted, committed, assigned, and unassigned fund balances
are combined in a fund, qualified expenditures are paid first from restricted or
committed fund balance, as appropriate, then assigned and finally unassigned fund
balances.
Expenditures generally are recorded when a liability is incurred, as under accrual
accounting. Interest associated with the current fiscal period is considered to be an
accrual item and so has been recognized as revenue of the current fiscal period.
Under the current financial resources measurement focus, only current assets and
current liabilities are generally included on the balance sheet. The reported fund
balance is considered to be a measure of "available spendable resources".
Governmental fund operating statements present increases (revenues) and
decreases (expenditures) in net current assets. Accordingly, they are said to present
a summary of sources and uses of"available spendable resources" during a period.
- 21 -
Port of the Islands Community Improvement District
NOTES TO FINANCIAL STATEMENTS
September 30, 2013
NOTE A—SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES (CONTINUED)
2. Measurement Focus and Basis of Accounting (Continued)
b. Fund Financial Statements (Continued)
Governmental Funds (Continued)
Because of their spending measurement focus, expenditure recognition for
governmental fund types excludes amounts represented by non-current liabilities.
Since they do not affect net current assets, such long-term amounts are not
recognized as governmental fund type expenditures or fund liabilities.
Amounts expended to acquire capital assets are recorded as expenditures in the
year that resources were expended, rather than as fund assets. The proceeds of
long-term debt are recorded as an other financing source rather than as a fund
liability.
Debt service expenditures, as well as expenditures related to compensated
absences, are recorded only when payment is due.
Enterprise Funds
In the fund financial statements, the Enterprise Fund is presented using the accrual
basis of accounting. Revenues are recognized when they are earned and expenses
are recognized when the related goods or services are delivered. In the fund
financial statements, the Enterprise Fund is presented using the economic resources
measurement focus. This means that all assets and all liabilities (whether current or
non-current) associated with their activity are included on their balance sheets.
Enterprise Fund operating statements present increases (revenues) and decreases
(expenses) in total net position. The District applies all GASB pronouncements as
well as all FASB and AICPA pronouncements, issued on or before November 30,
1989, which do not conflict with, or contradict, GASB pronouncements.
Enterprise Fund operating revenues, such as charges for services, result from
exchange transactions associated with the principal activity of the fund. Exchange
transactions are those in which each party receives and gives up essentially equal
values. Non-operating revenues, such as investment earnings, result from non-
exchange transactions or ancillary activities. Amounts paid to acquire capital assets
are capitalized as assets in the fund financial statements, rather than reported as
expenditures. Proceeds of long-term debt are recorded as a liability in the fund
financial statements, rather than as other financing sources.
Amounts paid to reduce long-term indebtedness are reported as a reduction of the
related liabilities, rather than as an expense.
- 22-
Port of the Islands Community Improvement District
NOTES TO FINANCIAL STATEMENTS
September 30, 2013
NOTE A—SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES (CONTINUED)
3. Basis of Presentation
a. Governmental Major Funds
General Fund - The General Fund is the District's primary operating fund. It
accounts for all financial resources of the general government, except those required
to be accounted for in another fund.
b. Enterprise Major Fund
Water and Sewer Fund - The Water and Sewer Fund accounts for the operations of
the water and sewer plant, which are funded by proceeds from operations of these
facilities, including special assessments, user fees, meter fees and connection fees.
c. Non-Current Governmental Assets/Liabilities
GASB Statement 34 requires that non-current governmental assets, such as land
and buildings, and non-current governmental liabilities, such as general obligation
bonds, due to developer and accrued compensated absences be reported in the
governmental activities column in the government-wide Statement of Net Position.
4. Assets, Liabilities, and Net Position or Equity
a. Cash and Investments
Florida Statutes require state and local governmental units to deposit monies with
financial institutions classified as "Qualified Public Depositories," a multiple financial
institution pool whereby groups of securities pledged by the various financial
institutions provide common collateral from their deposits of public funds. This pool
is provided as additional insurance to the federal depository insurance and allows for
additional assessments against the member institutions, providing full insurance for
public deposits.
The District is authorized to invest in those financial instruments as established by
Section 218.415, Florida Statutes. The authorized investments consist of:
1. Direct obligations of the United States Treasury;
2. The Local Government Surplus Funds Trust or any intergovernmental investment
pool authorized pursuant to the Florida Interlocal Cooperative Act of 1969;
3. Interest-bearing time deposits or savings accounts in authorized qualified public
depositories;
-23-
Port of the Islands Community Improvement District
NOTES TO FINANCIAL STATEMENTS
September 30, 2013
NOTE A— SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES (CONTINUED)
4. Assets, Liabilities, and Net Position or Equity (Continued)
a. Cash and Investments (Continued)
4. Securities and Exchange Commission, registered money market funds with the
highest credit quality rating from a nationally recognized rating agency.
For purposes of the statement of cash flows, cash equivalents include time deposits,
certificates of deposit and all highly liquid debt instruments with original maturities of
three months or less and held in a qualified public depository as defined by Section
280.02, Florida Statutes.
b. Receivables and Payables
Activity between funds that are representative of lending/borrowing arrangements
outstanding at the end of the fiscal year are referred to as "due to/from other funds".
Any residual balances outstanding between the governmental activities and
business-type activities are reported as "internal balances".
c. Restricted Assets
Certain assets of the District and a corresponding liability or portion of net position is
classified as restricted on the statement of net position because their use is limited
either by law through constitutional provisions or enabling legislation; or by
restrictions imposed externally by creditors. In a fund with both restricted and
unrestricted assets, qualified expenses are considered to be paid first from restricted
net position and then from unrestricted net position.
d. Capital Assets
Capital assets, which include land, buildings, infrastructure, equipment and
construction in progress, are reported in the applicable governmental or business-
type activities column.
The District defines capital assets as assets with an initial, individual cost of $5,000
or more and an estimated useful life in excess of one year. The valuation basis for
all assets is historical cost.
The costs of normal maintenance and repairs that do not add to the value of the
asset or materially extend its useful life are not capitalized.
Major outlays for capital assets and improvements are capitalized as projects are
constructed.
- 24-
Port of the Islands Community Improvement District
NOTES TO FINANCIAL STATEMENTS
September 30, 2013
NOTE A—SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES (CONTINUED)
4. Assets, Liabilities, and Net Position or Equity(Continued)
d. Capital Assets (Continued)
Depreciation of capital assets is computed and recorded by utilizing the straight-line
method. Estimated useful lives of the various classes of depreciable capital assets
are as follows:
Improvements other than buildings 5-48 years
Equipment 5-15 years
Infrastructure 15-30 years
e. Budgets
Budgets are prepared and adopted after public hearings for the governmental funds,
pursuant to Chapter 190 and Section 200.065, Florida Statutes. The District utilizes
the same basis of accounting for budgets as it does for revenues and expenditures in
its various funds. The legal level of budgetary control is at the fund level. All
budgeted appropriations lapse at year end. Formal budgets are adopted for the
general and debt service funds. As a result, deficits in the budget columns of the
accompanying financial statements may occur.
NOTE B — RECONCILIATION OF GOVERNMENT-WIDE AND FUND FINANCIAL
STATEMENTS
1. Explanation of Differences.Between the Governmental Fund Balance Sheet and
the Government-wide Statement of Net Position
"Total fund balances" of the District's governmental funds, $1,260,706, differs from "net
position" of governmental activities, $2,097,566, reported in the Statement of Net
Position. This difference primarily results from the long-term economic focus of the
Statement of Net Position versus the current financial resources focus of the
governmental fund balance sheet. The effect of the differences is illustrated below.
-25-
Port of the Islands Community Improvement District
NOTES TO FINANCIAL STATEMENTS
September 30, 2013
NOTE B — RECONCILIATION OF GOVERNMENT-WIDE AND FUND FINANCIAL
STATEMENTS (CONTINUED)
1. Explanation of Differences Between the Governmental Fund Balance Sheet and
the Government-wide Statement of Net Position-(Continued)
Capital related items
When capital assets (land, buildings, infrastructure and equipment that are to be used in
governmental activities) are purchased or constructed, the cost of those assets is
reported as expenditures in governmental funds. However, the Statement of Net
Position included those capital assets among the assets of the District as a whole.
Improvements $ 228,197
Infrastructure 1,313,611
Equipment 15,613
Improvements other than buildings 110,121
Accumulated depreciation (830,682)
Total
2. Explanation of Differences Between the Governmental Fund Operating Statements
and the Statement of Activities
The u net changes in fund balances" for government funds, $54,348, differs from the"change in net position" for governmental activities, $11,715, reported in the Statement
of Activities. The differences arise primarily from the long-term economic focus of the
Statement of Activities versus the current financial resources focus of the governmental
funds. The effect of the differences is illustrated as follows.
Capital related items
When capital assets that are to be used in governmental activities are purchased or
constructed, the resources expended for those assets are reported as expenditures in
governmental funds. However, in the Statement of Activities, the costs of those assets
are allocated over their estimated useful lives and reported as depreciation expense. As
a result, fund balances decrease by the amount of financial resources expended,
whereas, net position decrease by the amount of depreciation expense charged for the
year.
Depreciation expense $ (42,633)
- 26-
Port of the Islands Community Improvement District
NOTES TO FINANCIAL STATEMENTS
September 30, 2013
NOTE C -CASH AND INVESTMENTS
All deposits are held in qualified public depositories and are included on the accompanying
balance sheet as cash and investments.
Custodial Credit Risk- Deposits
Custodial credit risk is the risk that in the event of a bank failure, the District's deposits may not
be returned to it. The District does not have a formal deposit policy for custodial credit risk. The
District does, however, follow the provisions of Chapter 280, Florida Statutes regarding deposits
and investments. As of September 30, 2013, the District's bank balance was $1,049,539 and
the carrying value was $1,000,626. Exposure to custodial credit risk was as follows. The District
maintains all deposits in a qualified public depository in accordance with the provisions of
Chapter 280, Florida Statutes, which means that all deposits are fully insured by Federal
Depositors Insurance or collateralized under Chapter 280, Florida Statutes.
As of September 30, 2013, the District had the following investments and maturities:
Investment Maturities Fair Value
Certificate of Deposit 03/13/15 $ 152,763
Florida State Board of Administration
Florida Prime N/A 3,429
Fund B N/A 20,982
Total $ 177,174
Investments
The District's investment policy allows management to invest funds in investments permitted
under Section 218.415, Florida Statutes. Among other investments, the policy allows the
District to invest in the State Board of Administration Local Government Surplus Trust Funds.
Cash placed with the State Board of Administration represents the District's participation in the
Local Government Surplus Trust Funds Investment Pool and is reported at fair value. As a pool
participant the District invests in pools of investments in which shares are owned in the pool
rather than the underlying investments. These funds are divided into the Florida Prime and Fund
B.
The District had investments reported at fair value of$20,982 at September 30, 2013 in Fund B.
Fund B is not rated by any nationally recognized rating agency. Fund B consists of assets
transferred from the Florida Prime in December 2007 that represented securities that had
defaulted or are in default, or have extended payout times or are subject to potentially elevated
credit risk. These funds are not subject to withdrawal, but will be paid as they mature. Fair
market value is determined and reported as disclosed by the State Board of Administration.
The calculation of the net change in the fair value of investments is independent of the
calculation of realized gains and losses.
- 27 -
Port of the Islands Community Improvement District
NOTES TO FINANCIAL STATEMENTS
September 30, 2013
NOTE C -CASH AND INVESTMENTS (CONTINUED)
Interest Rate Risk
The District does not have a formal investment policy that limits investment maturities as a
means of managing its exposure to fair value losses arising from increasing interest rates.
Credit Risk
The District has no investment policy that would further limit its investment choices. The Local
Government Surplus Funds Trust is an authorized investment under Section 218.415, Florida
Statutes. The District's investments in the state investment pool and government loans are
limited by state statutory requirements and bond compliance. The District has monies invested
with the Local Government Surplus Funds Trust Fund (the "Fund"), at September 30, 2013.
This fund met the requirements of a "2a7-like pool" as defined in Government Accounting
Standards Board, Statement 31.
Concentration of Credit Risk
The District places no limit on the amount it may invest in any one fund. The investment in the
certificate of deposit represents 86% of the District's investments. The investment in Local
Government Surplus Funds Trust represents 14% of the District's investments.
The types of deposits and investments and their level of risk exposure as of September 30,
2013 were typical.
NOTE D—SPECIAL ASSESSMENT REVENUES
Special assessment revenues recognized for the 2012-2013 fiscal year were levied in October
2012. All taxes are due and payable on November 1 or as soon as the assessment roll is
certified and delivered to the Tax Collector. Per Section 197.162, Florida Statutes, discounts
are allowed for early payment at the rate of 4% in November, 3% in December, 2% in January,
and 1% in February. Taxes paid in March are without discount.
All unpaid taxes become delinquent as of April 1. Virtually all unpaid taxes are collected via the
sale of tax certificates on or prior to, June 1; however, the District had $478,529 in special
assessments receivable at September 30, 2013 which were offset by an allowance for doubtful
accounts in the same amount.
-28-
Port of the Islands Community Improvement District
NOTES TO FINANCIAL STATEMENTS
September 30, 2013
NOTE E— RECEIVABLE AND PAYABLE BALANCES
Accounts Receivable
Accounts receivable in the Enterprise Fund at September 30, 2013 consisted of trade
receivables. Receivables are recorded at their net realizable value.
Accounts Payable
Accounts payable and accrued expenses in the General Fund consisted of vendor payables due
in the amount of$14,652.
Accounts payable and accrued expenses in the Enterprise Fund consisted of vendor payables
in the amount of$62,243.
NOTE F —CAPITAL ASSETS
Capital asset activity for governmental activities for the year ended September 30, 2013
was as follows:
Balance Balance
October 1, September 30,
2012 Additions Deletions 2013
Governmental Activities:
Capital assets, not being depreciated:
Land and improvements $ 228,197 $ $ $ 228,197
Capital assets, being depreciated:
Infrastructure 1,313,611 - - 1,313,611
Improvements other than buildings 110,121 - - 110,121
Equipment
15,613 - - 15,613
Total Capital Assets, Being Depreciated 1,439,345 - - 1,439,345
Total Capital Assets 1,667,542 - 1,667,542
Less accumulated depreciation for:
Infrastructure (673,638) (41,742) - (715,380)
Buildings and improvements (98,798) (891) - (99,689)
Equipment (15,613) - - (15,613)
Total Accumulated Deprecitation (788,049) (42,633) - (830,682)
Total Capital Assets Being Depreciated, Net 651,296 (42,633) 608,663
Governmental Activities Capital Assets $ 879,493 $ (42,633) $ - $ 836,860
Depreciation expense of$42,633 was charged to physical environment.
-29-
•
Port of the Islands Community Improvement District
NOTES TO FINANCIAL STATEMENTS
September 30, 2013
NOTE F—CAPITAL ASSETS (CONTINUED)
The following is a summary of changes in the Water& Sewer Fund fixed assets for the year
ended September 30, 2013.
Balance Balance
October 1, September 30,
2012 Additions Deletions 2013
Business-type Activities:.
Capital assets, not being depreciated:
Land and improvements $ 293,061 $ - $ - $ 293,061
Construction in progress 9,079 - (5,989) 3,090
Total Capital Assets, Not Depreciated 302,140 - (5,989) 296,151
Capital assets,being depreciated:
Improvements other than buildings 15,208,163 202,980 - 15,409,143
Equipment 226,308 - - 226,308
Total Capital Assets, Being Depreciated 15,432,471 202,980 - 15,635,451
Less accumulated depreciation for:
Improvements other than buildings (3,632,961) (480,234) - (4,113,195)
Equipment (81,849) (10,970) (92,819)
Total Accumulated Depreciation (3,714,810) (491,204) (4,206,014)
Total Capital Assets Depreciated, Net 11,717,661 (288,224) - 11,429,437
Business-Type Activities Capital Assets $ 12,019,801 $ (288,224) $ (5,989) $ 11,725,588
Depreciation expense of$491,204 was charged to water and sewer.
NOTE G— LONG TERM DEBT
The following is a summary of activity in the long-term debt of the District for the year ended
September 30, 2013:
Business-type Activities
Long-term debt at October 1, 2012 $ 4,503,033
Principal payments (497,3031
Long-term debt at September 30, 2013 $ - 4 005.730
- 30-
Port of the Islands Community Improvement District
NOTES TO FINANCIAL STATEMENTS
September 30, 2013
NOTE G —LONG TERM DEBT (CONTINUED)
Long-term debt is comprised of the following:
$5,500,000 Series 2010 Special Assessment Revenue Bonds, due in
annual principal installments, beginning May 2011. interest is due
semi-annually on May 1 and November 1 at a rate of 3.510%. $ 4,005,730
The annual requirements to amortize the principal and interest of bonded debt outstanding as of
September 30, 2013 are as follows:
Year Ending
September 30, Principal Interest Total
2014 $ 514,758 $ 140,601 $ 655,359
2015 532,827 122,533 655,360
2016 551,529 103,831 655,360
2017 570,887 84,472 655,359
2018 590,925 64,434 655,359
2019-2020 1,244,804 65,916 1,310,720
Totals $ 4,005,730 $ 581,787 $ 4,587,517
NOTE H — RISK MANAGEMENT
The government is exposed to various risks of loss related to torts; theft of, damage to and
destruction of assets; errors and omissions; and natural disasters for which the government
carries commercial insurance.
NOTE I —LITIGATION
The District is involved in litigation with a landowner related to the non-payment of fiscal year
2010 through 2013 special assessments. In total, the District has not received $478,529 of
assessments. During 2010, the landowner filed for Chapter 11 Bankruptcy; however, the
bankruptcy was dismissed by the Judge. An allowance account has been established related to
outstanding assessments. Subsequent to year end, the District received a ruling by the Judge in
the District's favor regarding the legality of assessments; however, the District has not received
any payment for the special assessment balance noted above.
NOTE J— NET POSITION
The District adopted Governmental Accounting Standards Board Statement (GASB) No. 63,
which amends net asset reporting by establishing deferred outflows and deferred inflows of
resources and renamed the residual measure net position. No changes to the financial
statements were required as a result of GASB 63 except for renaming net assets to net position.
- 31 -
•
Port of the Islands Community Improvement District
NOTES TO FINANCIAL STATEMENTS
September 30, 2013
NOTE K— PRIOR PERIOD ADJUSTMENT
Governmental Accounting Standards Board Statement No. 65 altered accounting for bond
issuance costs by requiring such cost be expensed in the period incurred. Bond issuance costs
were previously capitalized and amortized over the life of the bond. Net position was restated to
reflect this change in accounting principles. The effect on net position is illustrated below.
Business-type Activites
Net position, October 1, 2012 as previously reported $ 7,548,546
Prior period adjustment- removal of bond issuance costs (31,621)
Net position, October 1, 2012 restated $ 7,516,925
- 32-
cec Berger, Toombs, Elam,
Gaines & Frank
Certified Public Accountants PL
600 Citrus Avenue
Suite 200
Fort Pierce, Florida 34950
772/461-6120//461-1155
FAX: 772/468-9278
INDEPENDENT AUDITOR'S REPORT ON INTERNAL CONTROL OVER FINANCIAL
REPORTING AND ON COMPLIANCE AND OTHER MATTERS BASED ON AN AUDIT
OF FINANCIAL STATEMENTS PERFORMED IN ACCORDANCE WITH
GOVERNMENT AUDITING STANDARDS
To the Board of Supervisors
Port of the Islands Community Improvement District
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 Port of the Islands Community Improvement District, as of and for the year ended
September 30, 2013, and the related notes to the financial statements, and have issued our
report thereon dated April 29, 2014.
Internal Control Over Financial Reporting
In planning and performing our audit, we considered Port of the Islands Community
Improvement District's internal control over financial reporting 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
Port of the Islands Community Improvement District's internal control. Accordingly, we do not
express an opinion on the effectiveness of Port of the Islands Community Improvement District's
internal control over financial reporting.
A deficiency in internal control exists when the design or operation of a control does not allow
management or employees, in the normal course of performing their assigned functions, to
prevent, or detect and correct misstatements on a timely basis. A material weakness is a
deficiency, or combination of deficiencies, in internal control, such that there is a reasonable
possibility that a material misstatement of the 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 over financial reporting was for the limited purpose
described in the first paragraph of this section and was not designed to identify all deficiencies
in internal control 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.
Fort PierrrP/Stuart
Member AICPA Member AICPA Division For CPA Firms Member FICPA
Private Companies Practice Section
ere Berger, Toombs, Elam,
c Gaines & Frank
Board of Supervisors
Port of the Islands Community Improvement District
Compliance and Other Matters
As part of obtaining reasonable assurance about whether Port of the Islands Community
Improvement District's financial statements are free of material misstatement, we performed
tests of its compliance with certain provisions of laws, regulations, contracts, and grant
agreements, noncompliance with which could have a direct and material effect on the
determination of financial statement amounts. However, providing an opinion on compliance
with those provisions was not an objective of our audit, and accordingly, we do not express such
an opinion. The results of our tests disclosed no instances of noncompliance or other matters
that are required to be reported under Government Auditing Standards.
Purpose of this Report
The purpose of this report is solely to describe the scope of our testing of internal control and
compliance and the results of that testing, and not to provide an opinion on the effectiveness of
the entity's internal control or on compliance. This report is an integral part of an audit
performed in accordance with Government Auditing Standards in considering the entity's
internal control and compliance. Accordingly, this communication is not suitable for any other
purpose.
ja0t64),
Berger, Toombs, Elam, Gaines & Frank
Certified Public Accountants
Fort Pierce, Florida
April 29, 2014
- 34 -
crc Berger, Toombs, Elam,
- Gaines & Frank
Certified Public Accountants PL
600 Citrus Avenue
Suite 200
Fort Pierce, Florida 34950
772/461-6120//461-1155
FAX: 772/466-9278
MANAGEMENT LETTER
To the Board of Supervisors
Port of the Islands Community Improvement District
Collier County, Florida
We have audited the financial statements of the Port of the Islands Community Improvement
District, Florida as of and for the year ended September 30, 2013, and have issued our report
thereon dated April 29, 2014.
We conducted our audit in accordance with auditing standards generally accepted in the United
States; 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 Auditor's Report on Internal
Control over Financial Reporting and on Compliance and Other Matters Based on an Audit of
Financial Statements Performed in Accordance with Government Auditing Standards.
Disclosures in that report which is dated April 29, 2014 should be considered in conjunction with
this Management Letter.
Additionally, our audit was conducted in accordance with the provisions of Chapter 10.550,
Rules of the Auditor General, which governs the conduct of local entity audits performed in the
State of Florida.
The Rules of the Auditor General (Section 10.554(1)(i)1.) require that we address in the
Management Letter, if not already addressed in the auditor's report on compliance and internal
controls, whether or not recommendations made in the preceding annual financial report have
been followed. There were no recommendations made in the preceding audit report.
As required by the Rules of the Auditor General (Section 10.554(1)(1)2.) the scope of our audit
included a review of the provisions of Section 218.415, Florida Statutes regarding the
investment of public funds. In connection with our audit, we determined that Port of the Islands
Community Improvement District complied with Section 218.415, Florida Statutes.
The Rules of the Auditor General (Section 10.554(1)(i)3, 4 and 5.) require that we address in the
Management Letter, if not already addressed in the auditor's report on compliance and internal
controls: improvements in financial management and violations of contracts or grant
agreements, fraud, illegal acts or abuse and deficiencies in internal control that are not
significant deficiencies, other inaccuracies, shortages, defalcations, and instances of fraud
discovered by, or that come to the attention of the auditor. Our audit did not discover any of the
above items that require to be disclosed.
Fort Pierccecc/Stuart
Member AICPA Member AICPA OiJis`i'on For CPA Firms Member FICPA
Private Companies Practice Section
Cc Berger, Toombs, Elam,
_ry Gaines & Frank
To the Board of Supervisors
Port of the Islands Community Improvement District
As required by the Rules of the Auditor General (Section 10.554(1)(i)7.c and Section 10.556(7)),
we applied financial conditions assessment procedures. It is Management's responsibility to
monitor the entity's financial condition; our financial condition assessment was based in part on
the representations made by management and the review of the financial information provided
by the same.
Port of the Islands Community Improvement District has not met one or more of the conditions
described in Section 218.503(1), Florida Statutes.
As required by the Rules of the Auditor General (Section 10.554(1)(i)7.b.), we determined that
the annual financial report for the District for the fiscal year ended September 30, 2013, filed
with the Department of Financial Services pursuant to Section 218.32(1)(a), Florida Statutes, is
in agreement with our annual financial audit report for the fiscal year ended September 30,
2013.
Pursuant to Chapter 119, Florida Statutes, this Management Letter is a public record and its
distribution is not limited. However, in accordance with auditing standards generally accepted in
the United States of America, this Management Letter is intended solely for the information of
Port of the Islands Community Improvement District and Management, and the State of Florida
Office of the Auditor General, and is not intended to be and should not be used by anyone other
than these specified parties.
j 0, -ti t.
Berger, Toombs, Elam, Gaines & Frank
Certified Public Accountants PL
Fort Pierce, Florida
April 29, 2014
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