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CD CD CD rD 0• CCD n 0 0 rD 0) r+ • 0 C) 0 O m to er 0 r A ° 3 I CD a rf 3 � i - o v • v o N -• n, rt rn rI fl' D • p � r�D N co Q _ 0 o o I) ) o f1 d 3 D n 0 ra 07 5 0 O 0 3 m o • 3 or 0 13A tib s a'', amr,e.- 1 " !t I k. i N Compr ' e/A F' Repo CoVier COWIttYy Florida' Y ear eru1ed/Septe'the'r 30, 2014- 13A Photography covvrtev of D Naple,,ph.oto-cd-raph.er, Den,ndra-G000d nwvv,, fa- o-vv vta.ture and o fte w featik rem the'FlarLdai Evergia.deis,i w h i 'poirtfoUo. ��mrtt Gook PHOTOGRAPHY www.cieAmi4goofivncvnpllotography.Golly Wei wmad/Lace/to-e4cpre.si,our sl%werei gratitude/ for allow Cry,into-u hi4(photograph*. 13A COMPREHENSIVE ANNUAL FINANCIAL REPORT FOR FISCAL YEAR ENDED SEPTEMBER 30, 2014 COLLIER COUNTY, FLORIDA BOARD OF COUNTY COMMISSIONERS TOM HENNING, CHAIRMAN— DISTRICT 3 TIM NANCE, VICE-CHAIRMAN— DISTRICT 5 DONNA FIALA— DISTRICT 1 GEORGIA A. HILLER, ESQ.—DISTRICT 2 FRED COYLE— DISTRICT 4 COUNTY MANAGER LEO E. OCHS,Jr. COUNTY ATTORNEY JEFFREY A. KLATZKOW CLERK OF THE CIRCUIT COURT AND 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 1 3 A COMPREHENSIVE ANNUAL FINANCIAL REPORT YEAR ENDED SEPTEMBER 30, 2014 TABLE OF CONTENTS INTRODUCTORY SECTION Page Transmittal Letter Certificate of Achievement vii 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 Net Position 25 General Fund-Statement of Revenues, Expenditures and Changes in Fund Balances—Budget and Actual (Budgetary Basis) 26 Bayshore Gateway Community Redevelopment Agency - Statement of Revenues, Expenditures and Changes in Fund Balances—Budget and Actual(Budgetary Basis) 29 Immokalee Community Redevelopment Agency - 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 84 Combining and Individual Fund Financial Statements: Nonmaior Governmental Funds Combining Balance Sheet 90 Combining Statement of Revenues,Expenditures and Changes in Fund Balances 100 Combining Schedule of Revenues,Expenditures and Changes in Fund Balances-Budget and Actual(Non-GAAP) 110 Nonmaior Enterprise Funds Combining Statement of Net Position 134 Combining Statement of Revenues, Expenses and Changes in Net Position 135 Combining Statement of Cash Flows 136 Internal Service Funds Combining Statement of Net Position 138 Combining Statement of Revenues, Expenses and Changes Net Position 139 Combining Statement of Cash Flows 140 Fiduciary Funds Combining Statement of Fiduciary Net Position 142 Combining Statement of Changes in Fiduciary Net Position 143 COLLIER COUNTY, FLORIDA 1 3 A COMPREHENSIVE ANNUAL FINANCIAL REPORT YEAR ENDED SEPTEMBER 30, 2014 TABLE OF CONTENTS-CONTINUED Component Units Combining Statement of Net Position 146 Combining Statement of Activities 147 STATISTICAL SECTION(UNAUDITED) Net Position by Component 150 Change in Net Position 151 Governmental Activities Tax Revenues by Source 154 Fund Balances of Governmental Funds 155 Changes in Fund Balances of Governmental Funds 156 Assessed Value and Estimated Actual Value of Taxable Property 158 Property Tax Rates—All Direct and Overlapping Governments 159 Principal Tax Payers County-Wide 160 Property Tax Levies and Collections 161 Ratios of Outstanding Debt by Type 162 Ratios of General Bonded Debt Outstanding 163 Legal Debt Margin Information 164 Direct,Overlapping and Underlapping Governmental Activities Debt 164 Pledged-Revenue Coverage 165 Demographic and Economic Statistics 166 Principal Employers 167 Budgeted Full-Time Equivalent County Employees by Function 168 Operating Indicators by Function 169 Capital Asset Statistics by Function 170 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 173 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 175 Schedule of Expenditures of Federal Awards and State Financial Assistance 178 Notes to the Schedule of Expenditures of Federal Awards and State Financial Assistance 184 Schedule of Findings and Questioned Costs 185 Summary Schedule of Prior Audit Findings 191 1 3 A THIS PAGE INTENTIONALLY LEFT BLANK 13A County of Collier CLERK OF THE CIRCUIT COURT COLLIER COUNTYCOURT'HOUSE Dwight E. Brock-Clerk of Circuit Court 3315 TAMIAMI TRL E STE 102 P.O.BOX 413044 NAPLES,FL 34112-5324 NAPLES,FL 34101-3044 Clerk of Courts • Comptroller • Auditor• ustodian of County Funds February 24, 2015 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, 2014. 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 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, 2014 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 Website-www.collierclerk.com Email- collierclerk(a,collierclerk.com 1 3 A 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 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, a landfill gas to energy facility, three 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 2014 population of 339,642 (an 11 percent increase over the last ten years), Collier 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. 301,540) and three municipalities: the Cities of Naples(pop. 20,537), Marco Island (pop. 17,163) and Everglades (pop. 402). 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 2014 totaled $60.6 billion, or a very high $178,534 per capita. The County's millage for General Fund operations in fiscal year 2014 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 2014 annual County unemployment rate stood at 6.3%, while the statewide average is 6.1%. Income levels are high, with a per capita personal income of$64,872. ii LONG TERM FINANCIAL PLANNING 1 3 A 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 projects planned for fiscal years 2015-2019 is $529.3 million. Included in the County's current CIP for fiscal years 2015-2019 are approximately $229.0 million in water and wastewater projects, $126.2 million in transportation projects, $27.9 million in stormwater projects and $51.6M in government facilities projects. In addition, parks and recreation projects of approximately $28.8 million are planned, as well as $29.4 million for tourist development funded projects, $26.0 million in solid waste projects and miscellaneous projects totaling$10.4M. None of the fiscal year 2015—2019 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, 2012 and 2014 Gas Tax Revenue and Refunding 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 Collier 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. During fiscal year 2014, the County refunded a portion of the Series 2006 Water and Sewer Revenue Bonds and substantially all of the Series 2005 Gas Tax Revenue Bonds. Both of these refinancings achieved a net present value savings of over 5%. 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 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 managed portfolio, to first call or maturity, was 1.41 years as of September 30, 2014. The average yield for fiscal year 2014 was .50%, which constitutes a reduction from historical rates, but is consistent with iii 13A 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, 2013. 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-eight years, from fiscal year 1986 to 2013. 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, 2013. 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 thirty 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 Comptroller for its annual budget for the fiscal year beginning October 1, 2013. 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 twelve consecutive years. iv 13A 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. Respectfully, _ Dwig E. Brock Clerk of the Circuit Court and Comptroller f , I1. r.....44,75,e Crystal K. Kinzel Deputy Clerk Director of Finance and Accounting Drek,_MI.Johnssen,CPA Deputy Clerk Assistant Finance Director v 1 3A 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, 2013. This was the twenty-eighth 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. 13A G[) 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, 2013 *ifpe oft04.$ Executive Director/CEO Q .....mic Pr) gtm t w n m c y 5 c `o c 00 n i a d 1 m , E,7 41 rm.- - :',;,1 u O % d ?i n v° c 2 o E °N r °w g. o y ,' Em i N a E v d w o m o0 0- m D mc m O n -SS.E2 Em= p2 E c j O°t k 2 0 0 a 7 a a PO f cat °N c N o Y v't w 1 - p c l :....n N N N m ? d y c.c. c .. 0 u i fyi N w C re f c 'c'aN o o �'Z u w- N o v `v E ,?,,f,2 , c i in wary iirIi' :t co a a 0 1 � ` H w = n t O co 1\- W —`TnuzmAi uFm lIP w N ? c 9 E o m E O C W £r� U r-° m,1 V � 2 w m° o E ° E • .0 A w ° ° , o ?N m c 3 N c y lb °' N E z ` 2 a n LL u ° m H W 11 795 - G £ Ei o a E:a w' 2 «E �m o Tr 2▪-u o i op.. a o a ill H 0 N D V E V O C E O K E N N Iim6n Y T y Va m c ,..* ....§.. a Y Q 00 =. V H g:8,-!, Q 2t.,:, J X N O f .... 6 0 ls o m ; N H N v 5 « Et rialt u£cN c - ▪Q m c m 2 D mc ec F c c m . t — N yn o ?f E 1"' ?a c w F w f c Ede V '"o o, ° d2 ° yac E '411 E o 2 e c ra _ r E . H N 4‹_, ro N N J 0 0 2 gl m E • o ,,.r 1>t2 E 13A FINANCIAL SECTION I. 3 A CliftonLarsonAllen LLP CLAconnect.com Clifton Larson Allen 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 (County), as of and for the year ended September 30, 2014, 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. 1yEXIA Aniiaj, wRrtnattierctNrdaInteratimel iNTERy. 1 Ovmoi, 1 3 A 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 the County as of September 30, 2014, 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. Emphasis of a Matter During the fiscal year ended September 30, 2014, the County adopted the provisions of Governmental Accounting Standards Board Statement (GASBS) No. 65, Items Previously Reported as Assets and Liabilities. As a result of the implementation of GASBS No. 65, the County reported a restatement for the change in accounting principle (see Note 18.) The auditors' opinion was not modified with respect to the restatement. 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 84 be presented to supplement the basic financial statements. Such information, although not a part of the basic financial statements, is required by the Governmental Accounting Standards Board who considers it to be an essential part of financial reporting for placing the basic financial statements in an appropriate operational, economic, or historical context. We have applied certain limited procedures to the required supplementary information in accordance with auditing standards generally accepted in the United States of America, which consisted of inquiries of management about the methods of preparing the information and comparing the information for consistency with management's responses to our inquiries, the basic financial statements, and other knowledge we obtained during our audit of the basic financial statements. We do not express an opinion or provide any assurance on the information because the limited procedures do not provide us with sufficient evidence to express an opinion or provide any assurance. Other Information Our audit was conducted for the purpose of forming opinions on the financial statements that collectively comprise the 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. 2 13A Honorable Board of County Commissioners Collier County, Florida I directly Such information is the responsibility of management and was derivedr from and relate d ec y 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. 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 13, 2015, on our consideration of the 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 the County's internal control over financial reporting and compliance. Llama CliftonLarsonAllen LLP Naples, Florida February 13, 2015 3 1 3 A MANAGEMENT'S DISCUSSION AND ANALYSIS (UNAUDITED) As Clerk of the Circuit Court and Comptroller 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, 2014. 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, 2014 by $2,521,143,775. Of this amount, $355,053,131 represents unrestricted net position and may be used to meet future County obligations. • The County's total net position increased by $53,993,367 when compared to fiscal year 2013, with a $31,965,546 increase from governmental activities and a $22,027,821 increase resulting from business-type activities. • As of September 30, 2014 Collier County's governmental fund financial statements showed combined ending fund balances of $368,779,426, an increase of $14,918,652 over the previous fiscal year. Of the total combined ending governmental fund balance, ($4,304,659) is reported as unassigned. Negative unassigned balances in the Government Facilities Impact Fee Fund, Law Enforcement 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 $57,780,353 at September 30, 2014, an increase in unassigned General Fund balance of $1,283,617 when compared to September 30, 2013. • Total face value of bonded debt, notes and outstanding loans owed by Collier County decreased by $28,113,184 during fiscal year 2014, with a decrease in governmental activities debt of $14,167,454 and a decrease in the business-type activities debt of $13,945,730. In January of 2014, State Revolving Fund Loan proceeds of $9,922,122 were used to advance refund a portion of the Series 2006 Collier County Water and Sewer Revenue Bonds. In May of 2014,the Series 2005 Collier County Gas Tax Revenue Bonds were partially advanced refunded by the Series 2014 Collier County Gas Tax Refunding Revenue Bond. Additional information on debt activity can be found in Note 6 to the financial statements beginning on page 56. 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 1 3 A 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, 2014. The statement shows the County's assets plus deferred outflows of resources less its liabilities plus deferred inflows of resources, 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 13A Governmental funds presented individually in Collier County's statements include five major funds, the General Fund, Government Facilities Impact Fee Fund, Law Enforcement Impact Fee Fund and the Bayshore Gateway and Immokalee Community 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, 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 81 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 13A 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 $2,521,143,775 as of the fiscal year ending September 30, 2014 for Collier County. Positive balances were reported in all categories of net position in the governmental and business-type activities for fiscal year 2014, as well as fiscal year 2013. Collier County's net position at September 30, 2014 increased by $6,213,167 for unrestricted net position and decreased $2,605,909 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. 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 75.9% of net position as of September 30, 2014, compared to 75.5% as of September 30, 2013. During fiscal year 2014,the County's net investment in capital assets increased by$45,685,299. 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. The following are Collier County's net position and changes in net position for the fiscal years ended September 30, 2013 and 2014,shown in condensed form: Collier County's Schedule of Net Position (in millions) Total Governmental Business-type Percentage Activities Activities Total Change 2014 2013 2014 2013 2014 2013 2013-2014 Current and other assets $ 466.2 $ 467.2 $233.7 $251.1 $ 699.9 $ 718.3 (2.6%) Capital assets,net 1,581.9 1,587.4 919.5 887.6 2,501.4 2,475.0 1.1% Total assets 2,048.1 2,054.6 1,153.2 1,138.7 3,201.3 3,193.3 0.3% Deferred outflows of resources 14.7 - 4.8 - 19.5 - - Long-term liabilities 379.7 386.4 197.4 205.9 577.1 592.3 (2.6%) Current liabilities 82.2 94.9 40.4 34.2 122.6 129.1 5.0% Total liabilities 461.9 481.3 237.8 240.1 699.7 721.4 (3.0%) Net position: Net investment in capital assets 1,207.8 1,199.0 705.1 668.2 1,912.9 1,867.2 2.4% Restricted 223.5 221.5 29.7 34.3 253.2 255.8 (1.0%) Unrestricted 169.6 152.8 185.4 196.1 355.0 348.9 1.7% Total net position $1,600.9 $1,573.3 $920.2 $898.6 $2,521.1 $2,471.9 2.0% 7 13A Collier County's Schedule of Changes in Net Position (in millions) Total Governmental Business-type Percentage Activities Activities Total Change 2014 2013 2014 2013 2014 2013 2013-2014 Revenues Program revenues: Fines,fees and charges for services $ 68.0 $ 68.9 $157.4 $158.6 $ 225.4 $ 227.5 (0.9%) Operating grants and contributions 31.4 20.9 3.0 3.9 34.4 24.8 38.7% Capital grants and contributions 28.9 28.3 30.7 25.0 59.6 53.3 11.8% General revenues: Property taxes 244.4 249.4 - - 244.4 249.4 (2.0%) Other taxes and shared revenues 91.0 84.8 - - 91.0 84.8 7.3% Interest income 2.6 1.5 1.3 0.7 3.9 2.2 77.3% Miscellaneous 13.3 9.1 0.1 0.1 13.4 9.2 45.7% Total revenues 479.6 462.9 192.5 188.3 672.1 651.2 3.2% Expenses General government 92.2 95.9 - - 92.2 95.9 (3.9%) Public safety 177.3 171.2 - - 177.3 171.2 3.6% Physical environment 17.0 16.6 - - 17.0 16.6 2.4% Transportation 71.6 69.3 - - 71.6 69.3 3.3% Economic environment 9.3 14.5 - - 9.3 14.5 (35.9%) Human services 12.8 12.0 - - 12.8 12.0 6.7% Culture and recreation 41.6 41.5 - - 41.6 41.5 0.2% Interest on long-term debt 12.7 16.1 - - 12.7 16.1 (21.1%) Water and sewer - - 112.6 114.0 112.6 114.0 (1.2%) Solid waste - - 33.8 32.8 33.8 32.8 3.0% Airport authority - - 3.8 4.4 3.8 4.4 (13.6%) Mass transit - - 10.3 10.1 10.3 10.1 2.0% Emergency medical services - - 23.2 21.6 23.2 21.6 7.4% Total expenses 434.5 437.1 183.7 182.9 618.2 620.0 (0.3%) Increase in net position before net transfers 45.1 25.8 8.8 5.4 53.9 31.2 72.8% Transfers,net (13.2) (13.9) 13.2 13.9 - - - Change in net position 31.9 11.9 22.0 19.3 53.9 31.2 72.8% Netposition-beginning 1,573.3 1,561.4 898.6 879.3 2,471.9 2,440.7 1.3% Prior period adjustment (4.3) - (0.4) - (4.7) - - Net position-ending $1,600.9 $1,573.3 $920.2 $898.6 $2,521.1 $2,471.9 2.0% 8 13A 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 2014 200 180 160 140 120 Cc 100 80 60 40 20 MM--- 1:4#01;4, r - m M74 Feces aSe'� meow a`\oc Feces `°\`e5 ea�c ,esc �\\c5 J\soc �Qoc J\soc ec5e aecs �ece�\�o Qo ay\aec •<ac co�\`ec 'Z's) \J`eeca Qr NCO GJ ■Revenues WM 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 2014 Other Income Tourist Taxes^ 7% 4% \Sales Taxes 1 7% \ Gas Taxes 4% Property Taxes Capital Grants and 51% Contributions 6% Operating Grants and Contributions 7% Fines,Fees and Charges for Services 14% 9 13A 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 2014 140 120 100 80 3 60 40 20 I III warp EMI Pi212 WI,141 Water and Sewer Solid Waste Airport Authority Mass Transit Emergency Medical Services ■Revenues 111Expenses 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 2014 Capital Grants and Contributions 16% ?° OperatingGrants and Contributions 1% Other Income 1% Fines,Fees and Charges for Services 82% 10 1 3 A Governmental Activities The current year increase in the net position of governmental activities amounted to $31,965,546, an increase of 2.0%when compared to the previous year's net position. The previous fiscal years' increase in net position was.8%. The current years' increase is mainly due to the following: • Overall, revenues related to governmental activities increased by 3.6%, or $16,860,882 and expenses decreased by.6%,or$2,533,723. • Governmental activities revenues increased primarily due to increased operating grants and contributions received from the State of Florida related to transportation related projects within Collier County. • Half Cent Sales Tax and Tourist Development Tax collections increased a combined 13.6%over fiscal year 2013,or$6,571,666. • Total ad valorem taxes collected in fiscal year 2014 decreased $4,947,808, or 2.0%, when compared to fiscal year 2013. The decrease in collections is primarily due to the expiration of the millage associated with the Conservation Collier program relating to the purchase of environmentally sensitive lands. • Decreases in expenses occurred in the functional area of economic environment and interest and fiscal charges. Economic environment expenses decreased predominately due to a decline in amounts spent in the State Housing Initiative Partnership and Neighborhood Stabilization Programs. Interest and fiscal charges decreased due to the savings associated with the refinancing of the Series 2005 Gas Tax Revenue Bonds. • The public safety functional area had a 3.6% increase in expenses for fiscal year 2014 primarily due to an increase in Sheriff related operating expenses. Business-type Activities Increases in net position related to business-type activities amounted to $22,027,821 in the aggregate, representing a 2.5%increase over the previous year's net position. • The majority of the increase, or $13,145,806, can be attributed to the Collier County Airport Authority. The Airport Authority's net position increased due to runway rehabilitation and improvement projects completed at the Marco and Immokalee locations. These rehabilitation programs were substantially grant funded. • The Collier County Water and Sewer District's operating income increased by $1,006,848 over fiscal year 2013 primarily due to a $3,001,297, or 2.9%, increase in charges for services. User charges increased due to an increase in billed water consumption tied to a 2.4%increase in peak season water population. 11 13A • Solid waste operating income decreased by $507,338 from fiscal year 2013. User charges increased by $782,951, primarily a result of a 4.6% increase in residential and commercial municipal waste tonnage and construction and demolition waste being accepted into the Naples landfill during fiscal year 2014. Operating costs increased primarily due to an increase in landfill operating costs. These factors contributed to an increase in solid waste net position year on year of$1,105,841. Fund Financial Statement Analysis As mentioned above, Collier County utilizes fund accounting to ensure compliance with finance related legal requirements. III 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, 2014, Collier County governmental funds reported combined fund balances of $368,779,426, an increase of$14,918,652 when compared to prior year combined fund balances. The governmental funds had non-spendable fund balances of $73,387,310 consisting of inventory, prepaid items, notes receivable and General Fund and Other Governmental Fund advances to other funds. The restricted fund balance was $243,106,079 and consists of monies whose expenditure is externally constrained by grantors, creditors, binding law or enabling legislation. Of the remaining$52,286,037 in fund balance, $27,349,111 is classified as committed, $29,241,585 is recorded as assigned and ($4,304,659) is recorded as unassigned. The following were noteworthy activities and changes relating to the major governmental funds for fiscal year 2014: • The General Fund is the primary operating fund of Collier County. At September 30, 2014, total fund balance in the General Fund was $78,598,810, of which $57,780,353 was unassigned. As a percentage of total general fund expenditures and net transfers, the unassigned portion is 21.4%. The total fund balance increased by $5,449,302 or 7.4%, compared to the September 30, 2013 total fund balance. The increase in total fund balance was primarily the result of an increase in General Fund ad valorem tax revenue of$7,861,734 when compared to fiscal year 2013. • The Bayshore Gateway Community Redevelopment Agency was created to benefit blighted areas in the Bayshore Gateway Triangle. During fiscal year 2014 the Bayshore Gateway Community Redevelopment Agency collected $942,700 in tax increment revenues and sold properties to realize sales proceeds of$289,647. The sales proceeds were used to pay down related debt. Additional miscellaneous revenues of $323,321, consisting mostly of rents, were received. Operating expenditures of $1,599,365, including a loss on the sale of properties held for resale of$1,208,886, were associated with the Bayshore Gateway Triangle. 12 13A • The Immokalee Community Redevelopment Agency was created to benefit blighted areas in Immokalee. During fiscal year 2014, the Immokalee Community Redevelopment Agency collected $319,800 in tax increment revenues and was reimbursed $503,384 for improvements related to Immokalee First Street Plaza. In addition, grant revenues of $176,350 were received for water management and transportation improvements. Capital expenditures of $746,264 were made for stormwater and transportation improvements with a further $497,374 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 2014, governmental facilities impact fees totaling$1,493,527 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 2014, the Government Facilities Impact Fee Fund made debt service related transfers of $4,354,500, paid$14,125 in administrative charges,$7,690 in capital outlay and$11,215 of interest on an interfund advance from the Solid Waste Disposal Fund. • The Law Enforcement Impact Fee Fund accounts for the receipt and expenditure of law enforcement impact fees collected from qualifying new construction. During fiscal year 2014, law enforcement impact fees totaling $801,295 were collected. The impact fees must be used for the acquisition or construction of growth related capital law enforcement expenditures, or related debt service. During fiscal year 2014, the Law Enforcement Impact Fee Fund made debt service related transfers of $2,649,000, paid $9,738 in administrative charges and$9,015 in capital outlay. 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, 2014,total net position amounted to$920,233,550 for enterprise funds, as compared to $898,205,729, as restated, as of September 30, 2013, an increase of $22,027,821. Net position changes as a result of operations, non-operating revenues and expenses, capital contributions and grants and donations. The Collier County Airport Authority's activities represent the majority of the increase in the business-type net position. For the year ended September 30, 2014,the Airport Authority reported capital grants and contributions of $13,276,356, which consists of capital grants obtained for purposes of lengthening runways at the Marco Island and Immokalee Airports. 13 13A Net Operating Income/(Loss) 2014 2013 County Water and Sewer $ 748,899 $ (257,949) Solid Waste Disposal 1,420,189 1,927,527 Non-major enterprise funds (23,394,859) (21,417,533) Total $ (21,225,771) $ (19,747,955) The Collier County Water and Sewer Fund net operating income increased by $1,006,848, when compared to fiscal year 2013. The increase in net operating income was the result of a 2.9% increase in charges for services due to increased billed water consumption during fiscal year 2014. County Water and Sewer payments in lieu of taxes paid to the General Fund of $5,121,300 were reclassified from operating expense to operating transfers for financial statement purposes. These payments are reclassified pursuant to generally accepted accounting principles as the amount charged is not an approximation of services rendered. Total operating expenses, including depreciation, increased by $2,265,034,or 2.2%,when compared to fiscal year 2013. 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 $2,501,412,332, 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, increased by $26,402,539 when compared to the previous year. There was a decrease in the governmental activities net capital assets of$5,558,038, or.4%,while the business-type activities capital assets increased by $31,960,577, or 3.6%. In the governmental activities amounts depreciated exceeded amounts capitalized. The major factors behind these changes are as follows: • The business-type activities capitalized $58,507,822 of work in process during fiscal year 2014 including $4,249,757 for forcemain transmission system improvements, $4,410,525 for joint utility projects with the Florida Department of Transportation, $3,984,795 for distribution system improvements, $4,873,553 for the North County Water Reclamation Facility and $4,928,973 for lift station improvements. In addition, $6,131,165 was related to the Marco Airport Taxiway and a further $7,705,985 for the Immokalee Airport Taxiway. The remaining$22,223,069 was made up of$19,983,679 in other County Water and Sewer projects, $204,665 in other airport projects, $1,578,780 in solid waste projects, $228,473 in Emergency Medical Services projects and $227,472 in Mass Transit. 14 13A • Capitalization of construction in progress of $47,659,134 for governmental activity related costs including$9,168,966 for beach renourishment projects,$6,515,733 for the Gordon Greenway Park, $2,650,955 for Davis Boulevard widening and improvements, $6,372,140 for US 41 and Collier Boulevard intersection improvements, $2,731,435 for Lely Canal and Haldeman Creek improvements and Collier Jail renovations of $2,776,063. The remaining $17,443,842 related to $8,089,416 in other transportation projects, $4,000,439 in other physical environment projects, $2,687,144 in culture and recreation projects and$2,666,843 in other capital projects. • Total purchases of land and non-depreciable assets were $11,531,337 for fiscal year 2014,compared to$13,709,272 for fiscal year 2013. Additional information regarding Collier County's capital assets can be found in Note 5 beginning on page 55 of this report. Debt Administration At September 30, 2014, Collier County had total bonded debt, notes and loans, net of premiums of $587,551,735, a decrease of $34,133,725 from the previous year. The following table illustrates the balances of all bonds, notes and loans, net,for the fiscal years ended September 30, 2014 and 2013: Outstanding Debt 2014 2013 Limited General Obligation Bonds, net $ 3,780,677 $ 4,663,968 Revenue Bonds, net 463,677,586 497,803,049 State Revolving Fund Loans 112,943,672 111,717,317 Miscellaneous Notes 7,149,800 7,501,126 Total $ 587,551,735 $ 621,685,460 On May 29, 2014, Collier County issued the Series 2014 Gas Tax Refunding Revenue Bond in the par amount of$89,780,000. These bonds were issued for the purpose of advance refunding a portion of the County's outstanding Series 2005 Gas Tax Revenue Bonds. In November of 2013,the Collier County Water and Sewer District borrowed $9,922,122 from the State Revolving Fund Loan Program for purposes of advance refunding a portion of the District's Series 2006 Revenue Bonds. On January 21, 2014, the State Revolving Fund Loan proceeds were placed in escrow and the Series 2006 Revenue Bonds were partially defeased. In June of 2014, Fitch Ratings upgraded the Collier County Water and Sewer District's revenue bonds from AM-to AAA. 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 56 of this report. 15 13A General Fund Budgetary Highlights During the current fiscal year, the Board of County Commissioners approved an $881,407 increase in General Fund expenditure appropriations between the original and the final amended budget. Significant variances between the original budget and the final amended budget are listed below: • $410,287 decrease in the Tax Collector's agency to reduce budget to actual expenditures • $370,652 increase in County Attorney operating due to re-budgeting of lapsed appropriations from the previous fiscal year • $1,217,300 decrease in Other General Administration operating to provide additional funding to the Emergency Medical Services fund and to set aside funding for potential Veteran's home • $700,000 increase in Supervisor of Elections budget due to a Special Election • $1,355,000 increase in charges for services and Sheriff's agency personal services related to special detail duties Significant variances between actual results and final budget amounts in the General Fund occurred during fiscal year 2014. Tax revenues were under budget by $7,473,923 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 $850,262 in unspent budget related to goods and services contracted for in 2013 that had not been received as of September 30, 2014 as well as an effort to reduce spending in all departments. Economic Factors and Year 2015 Budgets and Rates The following factors were taken into account in preparing the fiscal year 2015 budget: • A 6.4% 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 2.3% and 1.9%, 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(excluding Sheriff and Tax Collector). 16 13A During fiscal year 2014, the General Fund unassigned fund balance increased by $1,283,617 to $57,780,353. As of December 12, 2014, $55,188,913 of the fiscal year 2014 unassigned fund balance has been appropriated as carryforward for fiscal year 2015,with$27,764,500 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 1 3 • ' STATEMENT OF NET POSITION SEPTEMBER 30,2014 Primary Government Governmental Business-type Component Activities Activities Total Units ASSETS Current assets: Cash,cash equivalents and investments $ 214,129,544 $ 170,980,396 $ 385,109,940 $ 203,304 Trade receivables,net 1,169,478 12,315,423 13,484,901 - Special assessments receivable - 29,800 29,800 - Interest receivable 216,365 324,615 540,980 - Due from other governments 5,723,238 884,909 6,608,147 Internal balances 1,588,830 (1,588,830) - - Deposits 55,736 1,257,950 1,313,686 - Inventory 2,274,033 5,376,255 7,650,288 - Prepaid costs 34,286 213,761 248,047 - Restricted assets: Cash,cash equivalents and investments 13,207,767 3,752,230 16,959,997 - Trade receivables,net 1,471,646 - 1,471,646 - Notes receivable 54,612 - 54,612 - Interest receivable 222,835 - 222,835 - Due from other governments 10,343,767 10,270,291 20,614,058 - Deposits 1,875 - 1,875 Inventory for resale 12,228,631 - 12,228,631 - Total current assets 262,722,643 203,816,800 466,539,443 203,304 Noncurrent assets: Restricted assets: Cash,cash equivalents and investments 196,053,290 29,639,914 225,693,204 - Notes receivable 686,747 - 686,747 - Impact fee receivable 5,099,204 - 5,099,204 - Special assessments receivable 12,762 24,565 37,327 - Notes receivable 1,634,070 - 1,634,070 - Unamortized bond insurance 24,955 179,942 204,897 - Capital assets: Land and non-depreciable capital assets 451,635,788 103,550,602 555,186,390 - Depreciable capital assets,net 1,130,259,739 815,966,203 1,946,225,942 - Total noncurrent assets 1,785,406,555 949,361,226 2,734,767,781 - Total assets 2,048,129,198 1,153,178,026 3,201,307,224 203,304 DEFERRED OUTFLOWS OF RESOURCES Deferred charges on debt refundings 14,720,325 4,829,220 19,549,545 - The notes to the financial statements are an integral part of this statement. 18 13A Primary Government Governmental Business-type Component Activities Activities Total Units LIABILITIES Current liabilities: Accounts payable $ 18,809,756 $ 14,571,755 $ 33,381,511 $ - Wages payable 8,430,331 2,555,350 10,985,681 - Retainage payable - 1,345,868 1,345,868 - Due to other governments 2,829,490 64,119 2,893,609 - Self-insurance claims payable 5,067,325 - 5,067,325 - Compensated absences 9,061,658 2,210,802 11,272,460 - Capital lease obligations 20,964 235,618 256,582 - Unearned revenue 25,404 65,450 90,854 - Interest payable 5,543,529 1,882,289 7,425,818 - I Bonds and loans payable 19,289,518 11,471,852 30,761,370 - Liabilities payable from restricted assets: Accounts payable 5,622,255 1,335,273 6,957,528 - Wages payable 429,479 - 429,479 - Retainage payable 1,651,106 1,314,744 2,965,850 - Refundable deposits 2,213,917 73,597 2,287,514 - Notes payable - 69,190 69,190 - Due to other governments 3,194,866 - 3,194,866 - Unearned revenue - 70,857 70,857 - Bonds and loans payable - 3,134,130 3,134,130 - Total current liabilities 82,189,598 40,400,894 122,590,492 - Noncurrent liabilities: Self-insurance claims payable 1,505,503 - 1,505,503 - Compensated absences 15,825,626 552,701 16,378,327 - Capital lease obligations 208,962 986,387 1,195,349 - Landfill post-closure liability - 1,925,571 1,925,571 - Net OPEB obligation 2,530,707 - 2,530,707 - Bonds and loans payable,net 359,678,902 193,908,143 553,587,045 - Total noncurrent liabilities 379,749,700 197,372,802 577,122,502 Total liabilities 461,939,298 237,773,696 699,712,994 - NET POSITION Net investment in capital assets 1,207,751,189 705,064,834 1,912,816,023 - Restricted for: Growth related capital expansion 72,465,683 19,744,068 92,209,751 - Transportation capital projects 25,948,634 - 25,948,634 - Tourist development 42,944,986 - 42,944,986 - Conservation Collier 33,714,627 - 33,714,627 - Community redevelopment 12,438,531 - 12,438,531 - Grants 8,775,868 - 8,775,868 - Debt service 1,918,243 9,705,280 11,623,523 - Nonexpendable purposes-other 1,749,242 - 1,749,242 - Special revenues-other 23,569,459 - 23,569,459 - Renewal and replacement - 300,000 300,000 - Unrestricted 169,633,763 185,419,368 355,053,131 203,304 Total net position $1,600,910,225 $ 920,233,550 $2,521,143,775 $ 203,304 19 COLLIER COUNTY,FLORIDA 1 3 A STATEMENT OF ACTIVITIES FOR THE FISCAL YEAR ENDED SEPTEMBER 30,2014 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 $ 92,175,723 $ 34,662,025 $ 892,555 $ 1,480,704 Public safety 177,267,641 21,765,014 3,910,673 2,923,496 Physical environment 17,007,819 1,171,862 6,958,245 600,274 Transportation 71,622,789 958,712 11,876,976 18,239,149 Economic environment 9,359,209 537,877 4,920,990 176,350 Human services 12,804,370 950,858 2,271,017 58,190 Culture and recreation 41,629,687 7,943,512 613,630 5,467,406 Interest and fiscal charges 12,673,927 - - - Total governmental activities 434,541,165 67,989,860 31,444,086 28,945,569 Business-type Activities: Water and sewer 112,643,132 107,924,344 600,000 14,296,804 Solid waste 33,787,279 35,368,273 100,012 - Airport authority 3,763,456 2,588,625 - 13,276,356 Mass transit 10,306,203 1,640,774 1,748,073 3,089,180 Emergency medical services 23,207,963 9,921,641 628,491 - Total business-type activities 183,708,033 157,443,657 3,076,576 30,662,340 Total primary government $ 618,249,198 $ 225,433,517 $ 34,520,662 $ 59,607,909 Component Units: Industrial Development Authority $ 75,026 $ 75,000 $ - $ - Health Facilities Authority - - - - Housing Finance Authority 200,017 8,850 - - Educational Facilities Authority 5,026 23,056 - - Total component units $ 280,069 $ 106,906 $ - $ - 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 Restatement of net position due to implementation of GASB 65 Net position-beginning,as restated Net position-ending The notes to the financial statements are an integral part of this statement. 20 13A Net(Expense)Revenue and Changes in Net Position Primary Government Governmental Business-type Component Activities Activities Total Units $ (55,140,439) $ - $ (55,140,439) $ - (148,668,458) - (148,668,458) - (8,277,438) - (8,277,438) - (40,547,952) - (40,547,952) - (3,723,992) - (3,723,992) - (9,524,305) - (9,524,305) - (27,605,139) - (27,605,139) - (12,673,927) - (12,673,927) - (306,161,650) - (306,161,650) - 10,178,016 10,178,016 - 1,681,006 1,681,006 - 12,101,525 12,101,525 - (3,828,176) (3,828,176) - (12,657,831) (12,657,831) - 7,474,540 7,474,540 - (306,161,650) 7,474,540 (298,687,110) - $ (26) (191,167) 18,030 (173,163) 244,404,255 - 244,404,255 - 18,556,425 - 18,556,425 - 35,786,084 - 35,786,084 - 19,136,960 - 19,136,960 - 5,051,603 - 5,051,603 - 9,657,324 - 9,657,324 - 2,787,845 - 2,787,845 - 2,598,528 1,300,727 3,899,255 117 13,332,653 68,073 13,400,726 - (13,184,481) 13,184,481 - - 338,127,196 14,553,281 352,680,477 117 31,965,546 22,027,821 53,993,367 (173,046) 1,573,262,374 898,588,844 2,471,851,218 376,350 (4,317,695) (383,115) (4,700,810) - 1,568,944,679 898,205,729 2,467,150,408 376,350 $ 1,600,910,225 $ 920,233,550 $ 2,521,143,775 $ 203,304 21 COLLIER COUNTY,FLORIDA 1 3 A .. BALANCE SHEET GOVERNMENTAL FUNDS SEPTEMBER 30,2014 Bayshore Gateway Immokalee Community Community Government Law Other Total General Redevelopment Redevelopment Facilities Enforcement Governmental Governmental Fund Agency Agency Impact Fee Impact Fee Funds Funds ASSETS Cash,cash equivalents and investments $65,821,303 $ 453,820 $ 200,390 $ 2,462,911 $ 665,505 $304,695,463 $ 374,299,392 Receivables: Interest 60,833 513 360 3,866 1,327 327,964 394,863 Trade,net 593,999 2,254 - - - 1,898,235 2,494,488 Notes 1,634,070 - - - - 741,359 2,375,429 Impact fee - - - 193,082 70,281 4,835,841 5,099,204 Special assessments - - - - - 12,762 12,762 Due from other funds 5,812,187 - - 970,600 600,000 8,260,429 15,643,216 Due from other governments 5,063,836 2,191 - 14,298 - 10,940,654 16,020,979 Deposits 4,628 - 625 - - 1,250 6,503 Inventory for resale - 11,828,228 - - - 400,403 12,228,631 Inventory 75,763 - - - - 1,428,607 1,504,370 Advances to other funds 18,098,725 - - - - 49,791,700 67,890,425 Prepaid costs 34,286 - - - - - 34,286 Total assets $97,199,630 $ 12,287,006 $ 201,375 $ 3,644,757 $ 1,337,113 $383,334,667 $ 498,004,548 LIABILITIES,DEFERRED INFLOWS OF RESOURCES AND FUND BALANCES Liabilities: Accounts payable $ 6,393,123 $ 1,650 $ 18,033 $ 2,500 $ 9,015 $ 17,306,339 $ 23,730,660 Wages payable 5,800,425 14,113 13,318 - - 2,674,853 8,502,709 Due to other funds 627,220 - 125,888 - - 9,033,709 9,786,817 Due to other governments 1,517,819 1,236 - - - 4,505,222 6,024,277 Unearned revenue 7,442 - - - - 8,190 15,632 Refundable deposits 2,145,582 1,500 - - - 66,835 2,213,917 Retainage payable - - - - - 1,651,106 1,651,106 Advances from other funds - - - 28,782,956 19,923,100 21,385,525 70,091,581 Total liabilities 16,491,611 18,499 157,239 28,785,456 19,932,115 56,631,779 122,016,699 Deferred inflows of resources: Unavailable revenue 2,109,209 - - 193,082 70,281 4,835,851 7,208,423 Fund balances(deficit): Nonspendable 19,842,844 - - - - 53,544,466 73,387,310 Restricted 125,351 12,268,507 44,136 - - 230,668,085 243,106,079 Committed - - - - - 27,349,111 27,349,111 Assigned 850,262 - - - - 28,391,323 29,241,585 Unassigned 57,780,353 - - (25,333,781) (18,665,283) (18,085,948) (4,304,659) Total fund balances(deficit) 78,598,810 12,268,507 44,136 (25,333,781) (18,665,283) 321,867,037 368,779,426 Total liabilities,deferred inflows of resources and fund balances(deficit) $97,199,630 $ 12,287,006 $ 201,375 $ 3,644,757 $ 1,337,113 $383,334,667 $ 498,004,548 The notes to the financial statements are an integral part of this statement. 22 COLLIER COUNTY,FLORIDA 1 3 A RECONCILIATION OF THE BALANCE SHEET OF GOVERNMENTAL FUNDS TO THE STATEMENT OF NET POSITION SEPTEMBER 30, 2014 Differences in amounts reported for governmental activities in the statement of net position on pages 18-19: Fund balances-total governmental funds $ 368,779,426 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 $ 406,357,819 Construction in progress 45,277,969 Depreciable assets,net of$740,905,087 in accumulated depreciation 1,113,490,656 1,565,126,444 Certain long-term assets are not financial resources and therefore are not reported in the governmental funds-unamortized bond insurance premium. 24,955 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 inflows in the funds. 7,208,423 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 30,2014 are: Accrued interest on bonds $ (5,543,529) Bonds and notes payable (360,690,610) Capital lease obligations (229,926) Compensated absences (24,369,295) Unamortized premium (18,277,810) (409,111,170) Unamortized deferred loss on refunding 14,720,325 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: 54,161,822 Total net position-governmental activities $1,600,910,225 The notes to the financial statements are an integral part of this statement. 23 COLLIER COUNTY, FLORIDA 13 A STATEMENT OF REVENUES, EXPENDITURES AND CHANGES IN FUND BALANCES GOVERNMENTAL FUNDS FOR THE FISCAL YEAR ENDED SEPTEMBER 30,2014 Bayshore Gateway Immokalee Community Community Government Law Other Total General Redevelopment Redevelopment Facilities Enforcement Governmental Governmental Fund Agency Agency Impact Fee Impact Fee Funds Funds Revenues: Taxes $208,221,377 $ 942,700 $ 319,800 $ - $ - $ 72,830,666 $ 282,314,543 Licenses,permits and impact fees 331,648 - - 1,493,527 801,295 38,004,260 40,630,730 Intergovernmental 47,559,237 - 176,350 - - 41,656,610 89,392,197 Charges for services 15,786,683 - 503,384 - - 18,859,443 35,149,510 Fines and forfeitures 579,772 - - - - 2,671,789 3,251,561 Interest income 644,154 3,235 1,969 20,263 9,593 1,713,687 2,392,901 Special assessments - - - - - 2,922,523 2,922,523 Miscellaneous 1,927,679 612,968 - 5,940 - 9,006,214 11,552,801 Total revenues 275,050,550 1,558,903 1,001,503 1,519,730 810,888 187,665,192 467,606,766 Expenditures: Current: General government 52,316,402 - - 14,125 - 21,408,962 73,739,489 Public safety 136,572,049 - - - 9,738 26,587,159 163,168,946 Physical environment 734,077 - - - - 10,541,732 11,275,809 Transportation 242,243 - - - - 38,546,636 38,788,879 Economic environment 913,305 1,599,365 497,374 - - 6,255,031 9,265,075 Human services 9,732,648 - - - - 2,634,086 12,366,734 Culture and recreation 13,853,676 - - - - 20,260,146 34,113,822 Debt service: Principal - - - - - 18,510,387 18,510,387 Interest - - - 11,215 - 14,165,967 14,177,182 Payment to refunding bond escrow - - - - - 2,085,806 2,085,806 Fiscal charges - - - - - 172,519 172,519 Capital outlay 2,259,580 - 746,264 7,690 9,015 60,590,786 63,613,335 Total expenditures 216,623,980 1,599,365 1,243,638 33,030 18,753 221,759,217 441,277,983 Excess(deficiency)of revenues over(under)expenditures 58,426,570 (40,462) (242,135) 1,486,700 792,135 (34,094,025) 26,328,783 Other financing sources(uses): Bonds issued - - - - - 89,780,000 89,780,000 Payment to refunding bond escrow - - - - - (89,621,832) (89,621,832) Sale of capital assets 286,155 - - - - 27,310 313,465 Insurance proceeds 26,264 8,075 - - - 282,053 316,392 Transfers in 9,607,458 136,800 76,000 - - 88,033,827 97,854,085 Transfers out (62,897,145) (1,195,347) - (4,354,500) (2,649,000) (38,956,249) (110,052,241) Total other financing sources(uses) (52,977,268) (1,050,472) 76,000 (4,354,500) (2,649,000) 49,545,109 (11,410,131) Net change in fund balances 5,449,302 (1,090,934) (166,135) (2,867,800) (1,856,865) 15,451,084 14,918,652 Fund balances(deficit)at beginning of year 73,149,508 13,359,441 210,271 (22,465,981) (16,808,418) 306,415,953 353,860,774 Fund balances(deficit)at end of year $ 78,598,810 $ 12,268,507 $ 44,136 $(25,333,781) $(18,665,283) $321,867,037 $ 368,779,426 The notes to the financial statements are an integral part of this statement. 24 13A COLLIER COUNTY,FLORIDA RECONCILIATION OF THE STATEMENT OF REVENUES, EXPENDITURES AND CHANGES IN FUND BALANCES OF GOVERNMENTAL FUNDS TO THE STATEMENT OF NET POSITION FOR THE FISCAL YEAR ENDED SEPTEMBER 30,2014 Differences in amounts reported for governmental activities in the statement of net position on pages 20-21: Net change in fund balances-total governmental funds $ 14,918,652 Governmental funds report capital outlays as expenditures. However,in the statement of net position the cost of those assets is allocated over their estimated useful lives and reported as depreciation expense. Capital outlay $ 63,613,335 Depreciation expense (70,024,450) (6,411,115) Donations of capital assets are not financial resources to governmental funds,but receiving donated assets increases net position in the statement of net position. 3,414,746 Capital assets transferred to and from proprietary funds are not recorded in the governmental funds as there is no flow of current financial resources. (88,624) In the statement of net position,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. (1,393,611) Certain revenues not considered available are not recognized in the governmental funds but are included in the statement of activities. (1,822,532) 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 (89,780,000) 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 $ 18,417,454 Payments to refunding escrow agent 91,707,638 Payments on capital lease obligations 92,933 110,218,025 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. Decrease in compensated absences $ (1,795,419) Accrued interest on bonds and loans 846,954 Amortization of bond insurance premium (36,616) Amortization of deferred loss (864,871) Amortization of premium 1,730,307 (119,645) The net revenues of internal service funds are reported with governmental activities. 3,029,650 Change in net position-governmental activities $ 31,965,546 The notes to the financial statements are an integral part of this statement. 25 13A 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 30,2014 Variance with Final Budget Original Final Favorable Budget Budget Actual (Unfavorable) Revenues: Taxes $215,695,300 $215,695,300 $208,221,377 $ (7,473,923) Licenses,permits and impact fees 273,500 273,500 331,648 58,148 Intergovernmental 40,700,000 40,700,000 47,559,237 6,859,237 Charges for services 18,002,534 19,237,376 15,786,683 (3,450,693) Fines and forfeitures 479,000 479,000 579,772 100,772 Interest income 463,400 463,400 581,109 117,709 Miscellaneous 7,254,800 7,277,424 9,148,579 1,871,155 Total revenues 282,868,534 284,126,000 282,208,405 (1,917,595) Expenditures: Current: General government Board of County Commissioners personal services 1,057,500 1,057,500 1,007,268 50,232 Board of County Commissioners operating 86,600 86,600 52,313 34,287 County manager administrative personal services 681,400 681,400 527,039 154,361 County manager administrative operating 41,400 41,400 29,845 11,555 Budget and management personal services 663,400 663,400 630,532 32,868 Budget and management operating 67,600 67,600 57,943 9,657 Budget and management capital 9,000 9,000 - 9,000 Administrative services personal services 2,342,600 2,298,800 2,171,255 127,545 Administrative services operating 145,700 175,522 148,328 27,194 Administrative services capital outlay 2,500 2,500 1,283 1,217 Human resources administration personal services 1,183,000 1,183,000 1,074,423 108,577 Human resources administration operating 217,500 244,000 190,732 53,268 Clerk of the Circuit Court personal services 6,531,700 6,320,700 6,215,599 105,101 Clerk of the Circuit Court operating 2,292,900 2,465,900 2,090,076 375,824 Clerk of the Circuit Court capital outlay 137,300 182,300 198,347 (16,047) Property Appraiser personal services 5,088,080 5,088,080 4,591,726 496,354 Property Appraiser operating 1,458,650 1,458,650 1,861,144 (402,494) Property Appraiser capital outlay 25,000 25,000 116,843 (91,843) Tax Collector personal services 9,656,689 9,344,705 9,344,705 - Tax Collector operating 2,658,138 2,541,911 2,486,980 54,931 Tax Collector capital outlay 28,105 46,029 46,029 - County attorney personal services 2,288,300 2,288,300 2,149,672 138,628 County attorney operating 354,900 725,552 282,027 443,525 Natural resource planning operating 101,300 101,300 98,955 2,345 Circuit court costs operating 34,700 34,700 32,928 1,772 Courthouse security operating 1,291,300 1,456,687 1,385,680 71,007 Courthouse security capital outlay 28,400 28,400 28,369 31 County court cost operating 22,800 22,800 21,138 1,662 State Attorney operating 252,700 252,700 246,708 5,992 Public Defender operating 184,500 184,500 178,864 5,636 Other general administrative personal services 200,000 200,000 33,696 166,304 Other general administrative operating 7,182,600 5,965,300 4,614,666 1,350,634 26 COLLIER COUNTY, FLORIDA 13 A GENERAL FUND STATEMENT OF REVENUES, EXPENDITURES AND CHANGES IN FUND BALANCES BUDGET AND ACTUAL(BUDGETARY BASIS) FOR THE FISCAL YEAR ENDED SEPTEMBER 30,2014 Variance with Final Budget Original Final Favorable Budget Budget Actual (Unfavorable) Facilities management personal services 3,770,000 3,811,000 3,804,354 6,646 Facilities management operating 6,440,500 6,474,038 6,638,489 (164,451) Facilities management capital outlay 77,000 43,462 40,061 3,401 Sheriff personal services 2,973,600 2,973,600 3,426,559 (452,959) Sheriff operating 156,900 156,900 122,936 33,964 Sheriff capital - - 1,699 (1,699) Supervisor of Elections personal services 1,967,100 2,144,600 1,961,362 183,238 Supervisor of Elections operating 1,225,700 1,676,749 1,375,716 301,033 Supervisor of Elections capital outlay 14,000 85,451 89,819 (4,368) Real property management personal services 649,400 608,400 605,287 3,113 Real property management operating 40,900 40,900 38,698 2,202 Total general government 63,631,362 63,259,336 60,020,093 3,239,243 Public safety Sheriff personal services 105,427,200 106,782,200 109,476,190 (2,693,990) Sheriff operating 27,544,900 27,577,900 23,375,605 4,202,295 Sheriff capital outlay 369,700 384,200 1,339,253 (955,053) Emergency management administration personal services 838,000 838,000 800,425 37,575 Emergency management administration operating 529,300 529,300 466,010 63,290 Helicopter operations personal services 796,200 769,205 769,204 1 Helicopter operations operating 599,000 665,762 618,293 47,469 Helicopter operations capital outlay 35,000 21,033 21,033 - Medical examiner services operating 1,069,600 1,069,600 1,066,322 3,278 Total public safety 137,208,900 138,637,200 137,932,335 704,865 Physical environment Conservation and resource management personal services 658,700 658,700 613,263 45,437 Conservation and resource management operating 137,900 137,900 119,962 17,938 lmmokalee cemetery operating 2,500 2,500 852 1,648 Total physical environment 799,100 799,100 734,077 65,023 Transportation Alternative transportation modes personal services 229,600 229,600 228,597 1,003 Alternative transportation modes operating 18,000 18,000 13,646 4,354 Total transportation 247,600 247,600 242,243 5,357 Economic environment Veterans services personal services 230,800 231,000 230,883 117 Veterans services operating 52,500 51,100 28,671 22,429 Veterans services capital - 1,200 1,145 55 Housing and urban improvement personal services 320,900 320,900 251,171 69,729 Housing and urban improvement operating 848,000 866,000 402,580 463,420 Total economic environment 1,452,200 1,470,200 914,450 555,750 Human services Health Care Responsibility Act operating 46,100 46,100 - 46,100 Domestic animal services personal services 1,972,000 1,928,053 1,868,747 59,306 Domestic animal services operating 645,200 673,337 658,586 14,751 Domestic animal services capital outlay 135,200 202,404 189,270 13,134 Health department operating 1,569,100 1,569,100 1,303,144 265,956 Mental health operating 1,154,200 1,154,200 1,043,418 110,782 Client assistance personal services 578,500 627,500 579,789 47,711 Client assistance operating 4,479,000 4,401,027 3,824,304 576,723 Client assistance capital outlay 44,000 44,000 42,400 1,600 Public services division office personal services 378,500 467,572 430,120 37,452 Public services division office operating 29,100 28,900 24,540 4,360 Public services division office capital outlay 1,500 1,700 1,695 5 Total human services 11,032,400 11,143,893 9,966,013 1,177,880 (continued) 27 COLLIER COUNTY,FLORIDA 13 A GENERAL FUND STATEMENT OF REVENUES,EXPENDITURES AND CHANGES IN FUND BALANCES BUDGET AND ACTUAL(BUDGETARY BASIS) FOR THE FISCAL YEAR ENDED SEPTEMBER 30,2014 Variance with Final Budget Original Final Favorable Budget Budget Actual (Unfavorable) Culture and recreation Library administration personal services 5,290,500 5,215,375 5,070,599 144,776 Library administration operating 1,382,700 1,429,797 1,413,925 15,872 Library administration capital outlay 69,000 69,000 68,382 618 Beach and water park operations personal services 4,341,300 4,285,013 4,049,988 235,025 Beach and water park operations operating 3,822,900 3,524,755 3,319,164 205,591 Beach and water park operations capital outlay - 78,100 73,952 4,148 Total culture and recreation 14,906,400 14,602,040 13,996,010 606,030 Total expenditures 229,277,962 230,159,369 223,805,221 6,354,148 Excess of revenues over expenditures 53,590,572 53,966,631 58,403,184 (8,271,743) Other financing sources(uses): Sale of capital assets 125,000 125,000 286,155 (161,155) Insurance proceeds - 15,632 26,264 (10,632) Transfers in 4,328,128 3,945,298 9,659,758 (5,714,460) Transfers out (67,368,500) (69,739,178) (65,570,445) (4,168,733) Total other financing sources(uses) (62,915,372) (65,653,248) (55,598,268) (10,054,980) Net change in fund balance (9,324,800) (11,686,617) 2,804,916 (18,326,723) Fund balance at beginning of year 40,973,300 39,520,268 39,520,268 - Fund balance at end of year 5 31,648,500 5 27,833,651 $ 42,325,184 $(18,326,723) Reconciliation: Net change in fund balance,budgetary basis $ 2,804,916 Net change in fair value of investments 63,045 Ad valorem refunds not budgeted (39,659) Advances budgeted as transfers 2,621,000 Net change in fund balance,GAAP basis $ 5,449,302 The notes to the financial statements are an integral part of this statement. 28 COLLIER COUNTY, FLORIDA 13 A BAYSHORE GATEWAY COMMUNITY REDEVELOPMENT AGENCY STATEMENT OF REVENUES,EXPENDITURES AND CHANGES IN FUND BALANCES BUDGET AND ACTUAL(BUDGETARY BASIS) FOR THE FISCAL YEAR ENDED SEPTEMBER 30,2014 Variance with Final Budget Original Final Favorable Budget Budget Actual (Unfavorable) Revenues: Taxes $ 942,700 $ 942,700 $ 942,700 $ - Charges for services - 210,690 - (210,690) Interest income 5,000 5,000 2,866 (2,134) Miscellaneous 317,000 606,700 612,968 6,268 Total revenues 1,264,700 1,765,090 1,558,534 (206,556) Expenditures: Economic environment Personal services 252,400 252,400 248,351 4,049 Operating 214,900 222,291 142,128 80,163 Capital outlay - 210,690 - 210,690 Total expenditures 467,300 685,381 390,479 294,902 Excess of revenues over expenditures 797,400 1,079,709 1,168,055 88,346 Other financing sources(uses): Insurance proceeds - - 8,075 (8,075) Transfers in 136,800 136,800 136,800 - Transfers out (905,700) (1,195,400) (1,195,347) (53) Total other financing uses (768,900) (1,058,600) (1,050,472) (8,128) Net change in fund balance 28,500 21,109 117,583 80,218 Fund balance at beginning of year 354,000 361,391 361,391 - Fund balance at end of year $ 382,500 $ 382,500 $ 478,974 $ 80,218 Reconciliation: Net change in fund balance,budgetary basis $ 117,583 Net change in fair value of investments 369 Change in inventory held for resale (1,208,886) Net change in fund balance,GAAP basis $(1,090,934) The notes to the financial statements are an integral part of this statement. 29 COLLIER COUNTY,FLORIDA 13 A IMMOKALEE COMMUNITY REDEVELOPMENT AGENCY STATEMENT OF REVENUES,EXPENDITURES AND CHANGES IN FUND BALANCES BUDGET AND ACTUAL(BUDGETARY BASIS) FOR THE FISCAL YEAR ENDED SEPTEMBER 30,2014 Variance with Final Budget Original Final Favorable Budget Budget Actual (Unfavorable) Revenues: Taxes $ 319,800 $ 319,800 $ 319,800 $ - Intergovernmental - 235,000 176,350 (58,650) Charges for services - 3,194,769 503,384 (2,691,385) Interest income 1,000 1,000 1,765 765 Total revenues 320,800 3,750,569 1,001,299 (2,749,270) Expenditures: Economic environment Personal services 358,200 373,899 308,576 65,323 Operating 221,200 3,324,581 188,798 3,135,783 Capital outlay 2,000 312,689 746,264 (433,575) Total expenditures 581,400 4,011,169 1,243,638 2,767,531 Deficiency of revenues under expenditures (260,600) (260,600) (242,339) 18,261 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 (184,600) (184,600) (166,339) 18,261 Fund balance at beginning of year 215,400 215,400 215,400 - Fund balance at end of year $ 30,800 $ 30,800 $ 49,061 $ 18,261 Reconciliation: Net change in fund balance,budgetary basis $ (166,339) Net change in fair value of investments 204 Net change in fund balance,GAAP basis $ (166,135) The notes to the financial statements are an integral part of this statement. 30 COLLIER COUNTY,FLORIDA 1 3 A STATEMENT OF NET POSITION PROPRIETARY FUNDS SEPTEMBER 30,2014 Business-type Activities Enterprise Funds Governmental Activities- County Water Solid Waste Other Internal Service and Sewer Disposal Funds Total Funds ASSETS Current assets: Cash,cash equivalents and investments $ 141,463,684 $ 23,134,090 $ 6,382,622 $ 170,980,396 $ 49,091,209 Receivables: Trade,net 9,883,273 783,409 1,648,741 12,315,423 146,636 Special assessments 29,800 - - 29,800 - Interest 190,152 125,356 9,107 324,615 44,337 Due from other funds - 38,946 116,760 155,706 82,488 Due from other governments 884,498 - 411 884,909 46,026 Deposits 1,257,950 - - 1,257,950 51,108 Inventory 5,188,472 - 187,783 5,376,255 769,663 Prepaid costs 5,298 - 208,463 213,761 - Restricted assets: Cash,cash equivalents and investments 3,260,568 69,703 421,959 3,752,230 - Due from other governments - - 10,270,291 10,270,291 - Total current assets 162,163,695 24,151,504 19,246,137 205,561,336 50,231,467 Noncurrent assets: Restricted assets: Cash,cash equivalents and investments 29,639,914 - - 29,639,914 - Receivables: Special assessments 24,565 - - 24,565 - Advancestootherfunds - 2,201,156 - 2,201,156 - Unamortized bond insurance 179,942 - - 179,942 - Capital assets: Land and nondepreciable capital assets 87,938,727 7,001,761 8,610,114 103,550,602 - Depreciable capital assets,net 741,417,187 21,864,111 52,684,905 815,966,203 16,769,083 Total noncurrent assets 859,200,335 31,067,028 61,295,019 951,562,382 16,769,083 Total assets 1,021,364,030 55,218,532 80,541,156 1,157,123,718 67,000,550 DEFERRED OUTFLOWS OF RESOURCES Deferred charges on debt refundings 4,829,220 - - 4,829,220 - (Continued) 31 COLLIER COUNTY,FLORIDA 1 3 A STATEMENT OF NET POSITION 1 PROPRIETARY FUNDS SEPTEMBER 30,2014 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 $ 11,401,690 $ 2,420,153 $ 749,912 $ 14,571,755 $ 701,351 Wages payable 1,305,469 119,024 1,130,857 2,555,350 357,101 Retainage payable 1,345,868 - - 1,345,868 - Due to other funds 57,250 701,600 4,889,021 5,647,871 446,722 Due to other governments 366 751 63,002 64,119 79 Unearned revenue - - 65,450 65,450 9,772 Self-insurance claims payable - - - - 5,067,325 Compensated absences 1,436,866 137,661 636,275 2,210,802 414,391 Capital lease obligations - - 235,618 235,618 - Interest payable 1,882,289 - - 1,882,289 - Bonds and loans payable 11,471,852 - - 11,471,852 - Liabilities payable from restricted assets: Accounts payable - - 1,335,273 1,335,273 - Retainage payable - - 1,314,744 1,314,744 - Refundable deposits 57,025 - 16,572 73,597 - Unearned revenue - 69,703 1,154 70,857 - Notes payable 69,190 - - 69,190 - Bonds and loans payable 3,134,130 - - 3,134,130 - Total current liabilities 32,161,995 3,448,892 10,437,878 46,048,765 6,996,741 Noncurrent liabilities: Self-insurance claims payable - - - - 1,505,503 Compensated absences 359,217 34,415 159,069 552,701 103,598 Capital lease obligations - - 986,387 986,387 - Net OPEB obligation - - - - 2,530,707 Landfill post-closure liability - 1,925,571 - 1,925,571 - Bonds and loans payable,net 193,908,143 - - 193,908,143 - Total noncurrent liabilities 194,267,360 1,959,986 1,145,456 197,372,802 4,139,808 Total liabilities 226,429,355 5,408,878 11,583,334 243,421,567 11,136,549 NET POSITION Net investment in capital assets 618,847,857 28,375,027 57,841,950 705,064,834 16,630,323 Restricted for growth related capital expansion 19,744,068 - - 19,744,068 - Restricted for renewal and replacement 300,000 - - 300,000 - Restricted for debt service 9,705,280 - - 9,705,280 - Unrestricted 151,166,690 21,434,627 11,115,872 183,717,189 39,233,678 Total net position $ 799,763,895 $ 49,809,654 $ 68,957,822 918,531,371 $ 55,864,001 Cumulative consolidation adjustment for internal service fund activities related to enterprise funds 1,702,179 Net position of Business-type Activities $ 920,233,550 The notes to the financial statements are an integral part of this statement. 32 13A COLLIER COUNTY,FLORIDA STATEMENT OF REVENUES, EXPENSES AND CHANGES IN FUND NET POSITION PROPRIETARY FUNDS FOR THE FISCAL YEAR ENDED SEPTEMBER 30,2014 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 $ 107,021,275 $ 35,176,128 $ 13,846,345 $ 156,043,748 $ 77,552,702 Miscellaneous 903,069 192,145 304,695 1,399,909 77,820 Total operating revenues 107,924,344 35,368,273 14,151,040 157,443,657 77,630,522 Operating expenses: Personal services 24,914,860 2,225,247 20,162,004 47,302,111 6,537,084 Operating 44,795,095 30,571,066 14,118,452 89,484,613 67,195,114 Depreciation and amortization 37,465,490 1,151,771 3,265,443 41,882,704 1,813,640 Total operating expenses 107,175,445 33,948,084 37,545,899 178,669,428 75,545,838 Operating income(loss) 748,899 1,420,189 (23,394,859) (21,225,771) 2,084,684 Non-operating revenues(expenses): Operating grants and contributions 600,000 100,012 2,376,564 3,076,576 - Interest income 1,079,160 174,535 47,032 1,300,727 205,627 Insurance reimbursement 28,802 2,480 36,791 68,073 2,184,848 Interest expense (5,756,661) - (1,925) (5,758,586) - Gain(Loss)on disposal of capital assets 20,845 (69,538) 288,480 239,787 (67,614) Total non-operating revenues(expenses) (4,027,854) 207,489 2,746,942 (1,073,423) 2,322,861 Income(loss)before contributions and transfers (3,278,955) 1,627,678 (20,647,917) (22,299,194) 4,407,545 Capital grants and contributions 14,350,592 - 16,398,073 30,748,665 2,299 Transfers in 15,900 82,325 18,829,317 18,927,542 - Transfers out (5,222,224) (604,162) (3,000) (5,829,386) (900,000) Change in net position 5,865,313 1,105,841 14,576,473 21,547,627 3,509,844 Net position-beginning,as previously stated 794,281,697 48,703,813 54,381,349 52,354,157 Restatement of net position due to implementation of GASB 65 (383,115) - -Net position-beginning,as restated 793,898,582 48,703,813 54,381,349 52,354,157 Net position-ending $ 799,763,895 $ 49,809,654 $ 68,957,822 $ 55,864,001 Consolidation adjustment for internal service fund activities related to enterprise funds 480,194 Change in net position of Business-type Activities $ 22,027,821 The notes to the financial statements are an integral part of this statement. 33 COLLIER COUNTY,FLORIDA 13 A STATEMENT OF CASH FLOWS PROPRIETARY FUNDS FOR THE FISCAL YEAR ENDED SEPTEMBER 30,2014 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 $107,637,615 $ 35,279,284 $ 15,866,216 $158,783,115 $ - Cash received from other funds for services - - - - 69,872,783 Cash received from employees for services - - - - 5,966,764 Cash received from other governments for services - - - - 489,880 Cash received from refundable deposits 88,000 485,880 - 573,880 - Cash received from retirees for services - - - - 1,319,158 Cash payments on behalf of retirees - - - - (835,769) Cash payments for goods and services (36,347,303) (28,691,598) (9,638,270) (74,677,171) (66,574,873) Cash payments to employees (24,777,989) (2,181,690) (19,994,330) (46,954,009) (6,523,506) Cash payments for interfund services (7,656,577) (1,353,794) (4,413,758) (13,424,129) (749,156) Cash payments on refundable deposits (71,000) (487,194) - (558,194) - Net cash provided by(used for)operating activities 38,872,746 3,050,888 (18,180,142) 23,743,492 2,965,281 Cash flows from non-capital financing activities: Cash received from operating grants - 141,529 3,249,569 3,391,098 - Cash transfers from other funds 16,038 4,171,654 31,793,259 35,980,951 1,164,722 Cash transfers to other funds (5,168,686) (5,330,062) (10,764,289) (21,263,037) (3,597,888) Net cash provided by(used for)non-capital financing activities (5,152,648) (1,016,879) 24,278,539 18,109,012 (2,433,166) Cash flows from capital and related financing activities: System development charges 11,070,155 - - 11,070,155 - Special assessment collections 138 - - 138 - Receipts from insurance reimbursements 72,220 2,480 31,323 106,023 2,590,027 Proceeds from state loans 9,922,122 - - 9,922,122 - Proceeds from disposal of capital assets 182,072 56,523 43,699 282,294 10,167 Proceeds from capital grants - - 8,468,549 8,468,549 - Payments for capital acquisitions (40,296,212) (3,461,724) (13,508,824) (57,266,760) (693,268) Principal payments on state revolving loans (8,695,767) - - (8,695,767) - Principal payments on bonds (5,967,085) - - (5,967,085) - Payments to escrow agents (10,233,888) - - (10,233,888) - Principal payments on leases - - (297,632) (297,632) - Interest and fiscal agent fees paid (6,972,092) - (1,925) (6,974,017) - Net cash provided by(used for)capital and related financing activities (50,918,337) (3,402,721) (5,264,810) (59,585,868) 1,906,926 Cash flows from investing activities: Interest on investments 1,048,107 172,416 44,766 1,265,289 196,564 Net cash provided by investing activities 1,048,107 172,416 44,766 1,265,289 196,564 Net increase(decrease)in cash,cash equivalents and investments (16,150,132) (1,196,296) 878,353 (16,468,075) 2,635,605 Cash,cash equivalents and investments,October 1,2013 190,514,298 24,400,089 5,926,228 220,840,615 46,455,604 Cash,cash equivalents and investments,September 30,2014 $174,364,166 $ 23,203,793 $ 6,804,581 $204,372,540 $ 49,091,209 Current cash,cash equivalents and investments $141,463,684 $ 23,134,090 $ 6,382,622 $170,980,396 $ 49,091,209 Current cash,cash equivalents and investments-restricted 3,260,568 69,703 421,959 3,752,230 - Noncurrent cash,cash equivalents and investments-restricted 29,639,914 - - 29,639,914 - Cash,cash equivalents and investments,September 30,2014 $174,364,166 $ 23,203,793 $ 6,804,581 $204,372,540 $ 49,091,209 (Continued) 34 COLLIER COUNTY,FLORIDA 13 A 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 30,2014 Business-type Activities Enterprise Funds Governmental County Activities- Water Solid Waste Other Internal Service and Sewer Disposal Funds Total Funds Operating income(loss) $ 748,899 $ 1,420,189 $ (23,394,859) $ (21,225,771) $ 2,084,684 Adjustments to reconcile operating income(loss)to net cash provided by(used for)operating activities: Depreciation expense 37,004,681 1,151,771 3,265,443 41,421,895 1,813,640 Amortization of bond insurance costs 8,540 - - 8,540 - Amortization of deferred charges on debt refundings 452,269 - - 452,269 Net changes in assets and liabilities: Trade receivable (220,379) (74,214) 1,796,977 1,502,384 (103,103) Due from other funds - 624,948 (3,108) 621,840 2,558 Due from other governments (145,878) 6,991 1,627 (137,260) 5,184 Inventory (512,440) - (15,597) (528,037) 73,453 Prepaid costs 3,438 - (208,463) (205,025) - Accounts payable 1,379,837 (136,273) (21,424) 1,222,140 268,099 Wages payable 106,066 18,705 170,673 295,444 29,698 Due to other funds - 36,550 - 36,550 33,484 Due to other governments (92) 449 (22,283) (21,926) (31,895) Compensated absences 30,805 17,861 (2,999) 45,667 (16,120) Lease payable - - 258,950 258,950 - Refundable deposits 17,000 (1,314) - 15,686 - Unearned revenue - - (5,079) (5,079) 9,772 Self-insurance claims payable - - - - (1,556,050) Net OPEB obligation - - - - 351,877 Landfill post closure liability - (14,775) - (14,775) - Total adjustments 38,123,847 1,630,699 5,214,717 44,969,263 880,597 Net cash provided by(used for)operating activities $ 38,872,746 $ 3,050,888 $ (18,180,142) $ 23,743,492 $ 2,965,281 Non-cash investing,capital and financing activities: Developer infrastructure contributions $ 3,247,704 $ - $ - $ 3,247,704 $ - Change in fair value of investments 118,223 18,291 4,283 140,797 19,640 Contributed capital assets 53,788 - 329,385 383,173 2,299 The notes to the financial statements are an integral part of this statement. 35 COLLIER COUNTY, FLORIDA STATEMENT OF FIDUCIARY NET POSITION 1 3A AGENCY FUNDS SEPTEMBER 30,2014 Agency Funds ASSETS Cash,cash equivalents and investments $ 41,306,048 Receivables: Interest 8,297 Other 38,729 Total assets $ 41,353,074 LIABILITIES Due to other governments $ 7,941,784 Due to individuals 649,239 Refundable deposits 31,643,119 Due to special assessment holders 1,118,932 Total liabilities $ 41,353,074 The notes to the financial statements are an integral part of this statement. 36 COLLIER COUNTY, FLORIDA 13 A NOTES TO THE FINANCIAL STATEMENTS SEPTEMBER 30, 2014 INDEX NOTE PAGE NUMBER 1 Summary of Significant Accounting Policies 38 2 Cash, Cash Equivalents and Investments 49 3 Trade Receivables 52 4 Interfund Payables and Receivables 53 5 Capital Assets 55 6 Long-Term Debt 56 7 Conduit Debt Obligations 64 8 Defeased Debt 64 9 Pension Plan Obligations 65 10 Transfers 67 11 Net Position/Fund Balances 68 12 Risk Management 72 13 Other Postemployment Benefits 74 14 Landfill Liability 77 15 Significant Contingencies 77 16 Significant Commitments 79 17 Fund Deficits 80 18 Change in Accounting Principle 81 37 COLLIER COUNTY, FLORIDA 13 A NOTES TO THE FINANCIAL STATEMENTS SEPTEMBER 30, 2014 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 Comptroller and Supervisor of Elections. The Constitutional Officers are elected county wide. Under the direction of the Clerk of the Circuit Court and Comptroller, the 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 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. 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. 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. 38 COLLIER COUNTY, FLORIDA 1 3 A NOTES TO THE FINANCIAL STATEMENTS SEPTEMBER 30, 2014 NOTE 1—SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES—CONTINUED THE REPORTING ENTITY—CONTINUED 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". 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". 39 13A COLLIER COUNTY, FLORIDA NOTES TO THE FINANCIAL STATEMENTS SEPTEMBER 30, 2014 NOTE 1—SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES-CONTINUED THE REPORTING ENTITY—CONTINUED 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 Comptroller. Administrative Offices Collier Water and Sewer District Collier County Airport Authority 3339 East Tamiami Trail,Suite#301 2005 Mainsail Drive,Suite#1 Naples,Florida 34112 Naples, Florida 34114 Collier County Industrial Development Collier County Health Facilities Authority Authority and Educational Facilities Authority and Housing Finance Authority 3050 North Horseshoe Drive,Suite#120 5150 Tamiami Trail North,Suite#502 Naples,Florida 34104 Naples,Florida 34103 Bayshore Gateway Community Redevelopment Agency Immokalee Community Redevelopment Agency 3570 Bayshore Drive, Unit#102 1320 North 15th Street Naples, Florida 34112 Immokalee, Florida 34142 Collier County MetropolitanPlanning Organization 2885 South Horseshoe Drive 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. The internal service activity has also been eliminated from the government-wide financial statements. Aggregate internal service fund activity is reported in full as a single column in the proprietary fund 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 plus deferred outflows of resources minus liabilities plus deferred inflows of resources, 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 13A COLLIER COUNTY, FLORIDA NOTES TO THE FINANCIAL STATEMENTS SEPTEMBER 30, 2014 NOTE 1-SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES—CONTINUED GOVERNMENT-WIDE AND FUND FINANCIAL STATEMENTS—CONTINUED Direct expenses are those that are specifically associated with a service, program or department and,thus are clearly identifiable to a particular function. The effect of indirect expense allocations has been eliminated in the government-wide financial statements. Depreciation expense for capital assets that can specifically be identified with a function is recorded as a direct expense of that function. Depreciation for capital assets that serve all functions is recorded as a direct expense of the general government function on the government-wide Statement of Activities. All interest on general long term debt is considered indirect and is reported separately in the government-wide Statement of Activities. 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 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 Immokalee 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 Immokalee 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. 41 COLLIER COUNTY, FLORIDA 13 A NOTES TO THE FINANCIAL STATEMENTS SEPTEMBER 30, 2014 NOTE 1-SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES—CONTINUED BASIS OF PRESENTATION—CONTINUED Law Enforcement Impact Fee Capital Project Fund—the Law Enforcement Impact Fee fund is used to account for the receipt and expenditure of law enforcement impact fees collected from all qualifying new construction. The impact fees must be used for the acquisition and construction of law enforcement related 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. Collier County also maintains the following nonmajor fund types: Special Revenue Fund —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. Permanent Fund—Permanent funds are used to account for resources that were legally restricted to the extent that only earnings and not principal may be spent. Collier County operates a permanent fund to defray costs associated with the maintenance and management of conservation land. 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 Project 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 reports the following Internal Service Funds: Self Insurance, Sheriff's Self Insurance, Fleet Management and Information Technology. 42 COLLIER COUNTY, FLORIDA 1 3 NOTES TO THE FINANCIAL STATEMENTS SEPTEMBER 30, 2014 NOTE 1-SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES—CONTINUED BASIS OF PRESENTATION—CONTINUED 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 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. 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. 43 COLLIER COUNTY, FLORIDA 1 3 A NOTES TO THE FINANCIAL STATEMENTS SEPTEMBER 30, 2014 NOTE 1-SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES—CONTINUED 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. 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. 44 COLLIER COUNTY, FLORIDA 1 3 n NOTES TO THE FINANCIAL STATEMENTS /"1 SEPTEMBER 30, 2014 NOTE 1-SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES—CONTINUED BUDGETS AND BUDGETARY DATA—CONTINUED 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 the 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 79. 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. ACCOUNTS RECEIVABLE 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. 45 COLLIER COUNTY, FLORIDA 13 A NOTES TO THE FINANCIAL STATEMENTS SEPTEMBER 30, 2014 NOTE 1-SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES—CONTINUED INVENTORIES AND PREPAID COSTS—CONTINUED 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$12,228,631 is classified as restricted, 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. 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. 46 COLLIER COUNTY, FLORIDA 3A NOTES TO THE FINANCIAL STATEMENTS SEPTEMBER 30, 2014 NOTE 1-SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES—CONTINUED DEFERRED OUTFLOWS/INFLOWS OF RESOURCES The statement of net position includes a separate section for deferred outflows of resources. Deferred outflows of resources represent a consumption of net position that applies to a future period(s) and as such will not be recognized as an expense or expenditure in the current year. For Collier County only one item qualifies for reporting as a deferred outflow and that is the deferred charge on refunding reported in the proprietary and government wide statements of net position. A deferred charge results from the difference in the carrying value of refunded debt and its reacquisition price. This amount is deferred and amortized over the shorter of the life of the refunded or refunding debt. The statement of net position also includes a separate section for deferred inflows of resources. Deferred inflows of resources represent an acquisition of net position that applies to a future period and as a result, will not be recognized as revenue in the current year. Collier County has recorded amounts associated with long term receivables primarily related to deferred impact fee agreements. BOND PREMIUMS, LOSS ON DEFEASANCE AND ISSUANCE COSTS Bond premiums and bond insurance 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 premiums are presented as an increase to the face amount of bonds payable, while bond insurance costs are recorded as deferred charges and shown on the face of the Statement of Net Position as a component of noncurrent assets. Pursuant to GASB No. 65,Items Previously Reported as Assets and Liabilities,the gain or loss on defeasance of debt is reported as a deferred inflow or outflow of resources. The gain or loss is calculated as the difference between the reacquisition price of the refunded debt and the net carrying amount at the time of the refunding. The gain or loss is amortized on a straight line basis over the shorter of the life of the new debt or the remaining life of the old debt as a component of interest expense. In the governmental fund financials, bond premiums and issuance costs, including bond insurance costs, are recognized in the current period. The face amount of debt is reported as other financing sources. Premiums received on debt issuances are also reported as other financing sources. Issuance costs, including bond insurance costs, whether or not they have been paid from debt proceeds are reported as debt service expenditures. INTEREST COST In the proprietary funds, interest costs are expensed or capitalized as required by GASB 62, Codification of Accounting and Financial Reporting Guidance Contained in Pre-November 30, 1989 FA58 and AICPA Pronouncements. 47 13A COLLIER COUNTY, FLORIDA NOTES TO THE FINANCIAL STATEMENTS SEPTEMBER 30, 2014 NOTE 1-SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES—CONTINUED 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, 2014 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 2014 is included in the accompanying financial statements,since such taxes are collected to finance expenditures of the subsequent period. Key dates in the property tax cycle for the fiscal year ended September 30,2014 are as follows: Property Tax Cycle Date Assessment roll compiled January 1,2013 Assessment roll certified July 1,2013 Millage resolution approved Within 35 days of the certification of the assessment roll Beginning of fiscal year for tax levy October 1,2013 Taxes due and payable(levy date) November 1,2013 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 31,2014 Delinquent(lien date) April 1,2014 Tax certificates sold Prior to June 1,2014 NEW ACCOUNTING PRONOUNCEMENTS For the year ended September 30, 2014, the financial statements include the impact of adoption of Governmental Accounting Standards Board Statement (GASBS) No. 65. GASBS 65, Items Previously Reported as Assets and Liabilities, provides further guidance for the items listed in GASBS No. 63,Financial Reporting of Deferred Outflows of Resources, Deferred Inflows of Resources, and Net Position. GASBS No. 65 requires that statements avoid use of the term"deferred"except as it relates to items that are deferred inflows or outflows. The statement also addresses the calculation of a deferred outflow or inflow for refunding of debt. For nonexchange transactions like grants and property taxes, amounts received before the period of eligibility are treated as deferred inflows. Statement No. 65 also requires that debt issuance costs be expensed in the period that the debt was issued, versus amortized over the life of the debt issue. The effects of this change are required to be disclosed in the period that it is implemented. For operating leases, any initial direct costs are recognized in the period incurred versus being amortized over the life of the lease. When an asset is recorded in the governmental fund statements but the revenue is not available until a future period, a deferred inflow is reported until the revenue becomes available. 48 COLLIER COUNTY, FLORIDA 1 3 A NOTES TO THE FINANCIAL STATEMENTS SEPTEMBER 30, 2014 NOTE 1-SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES—CONTINUED 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. UNEARNED 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. Unearned revenues of the County as of September 30, 2014 are gift certificates issued and prepayments on accounts. 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 Sheriff's 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 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. 49 13A COLLIER COUNTY, FLORIDA NOTES TO THE FINANCIAL STATEMENTS SEPTEMBER 30, 2014 NOTE 2—CASH.CASH EQUIVALENTS AND INVESTMENTS—CONTINUED As of September 30, 2014,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 $ 78,762 N/A N/A N/A Demand deposits N/A 118,627,363 N/A N/A N/A State Board of Administration Pool: Florida PRIME N/A 739,414 N/A N/A AAAm Federal Home Loan Mortgage Corporation 09/04/2015 25,058,750 none N/A AA+ Federal Home Loan Mortgage Corporation 09/25/2015 50,140,500 09/25/2013 once AA+ Federal Farm Credit Bank 12/23/2015 24,944,000 12/23/2014 continuously AA+ Federal Home Loan Bank 12/30/2015 25,022,750 09/30/2014 once AA+ Federal Farm Credit Bank 02/12/2016 44,974,800 05/12/2014 continuously AA+ Federal National Mortgage Association 04/29/2016 24,992,500 10/29/2013 quarterly AA+ Federal Farm Credit Bank 05/12/2016 9,960,000 05/12/2014 continuously AA+ Federal Home Loan Mortgage Corporation 06/13/2016 49,874,500 03/13/2014 quarterly AA+ Federal Home Loan Bank 06/17/2016 24,954,250 09/17/2014 quarterly AA+ Federal Home Loan Mortgage Corporation 06/20/2016 24,984,000 12/20/2013 quarterly AA+ Federal Home Loan Mortgage Corporation 07/29/2016 24,965,250 10/29/2014 quarterly AA+ Federal Home Loan Mortgage Corporation 10/14/2016 25,105,250 none N/A AA+ Federal National Mortgage Association 11/28/2016 24,842,250 05/28/2014 quarterly AA+ Federal Home Loan Mortgage Corporation 12/05/2016 25,005,250 12/05/2014 once AA+ Federal Home Loan Mortgage Corporation 12/19/2016 25,006,500 06/19/2014 quarterly AA+ US Treasury Note 01/15/2017 59,962,800 none N/A AA+ US Treasury Note 02/15/2017 24,892,500 none N/A AA+ Federal Home Loan Bank 03/10/2017 24,956,500 09/10/2014 quarterly AA+ US Treasury Note 03/15/2017 9,981,300 none N/A AA+ Total $669,069,189 *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 investment practices are governed by Florida Statutes,Chapter 218 and the Investment Policy. The 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. 50 13A COLLIER COUNTY, FLORIDA NOTES TO THE FINANCIAL STATEMENTS SEPTEMBER 30, 2014 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, 2014, the Sheriff had $739,414 invested in the State Board of Administration's Local Government Surplus Funds Trust Fund Investment Pool. All of these funds are held in the Florida PRIME pool. Florida PRIME is fully liquid and carries a weighted average days to maturity of 39 days. 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, 2014, the County had demand deposits of $118,627,363. These demand deposits do not include discretely presented component unit deposits of $203,304. 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. 51 COLLIER COUNTY, FLORIDA A NOTES TO THE FINANCIAL STATEMENTS H SEPTEMBER 30, 2014 NOTE 2—CASH.CASH EQUIVALENTS AND INVESTMENTS—CONTINUED The portion of the County's cash, cash equivalents and investments invested in U.S. Government Instrumentalities is detailed as follows,at September 30,2014: Issuer %of Portfolio Federal Home Loan Bank 11.20% Federal Farm Credit Bank 11.94% Federal Home Loan Mortgage Corporation 37.39% Federal National Mortgage Association 7.45% Total U.S.Government Instrumentalities 67.98% Reconciliation of cash, cash equivalents and investments to the basic financial statements: Primary government: Cash,cash equivalents and investments $ 385,109,940 Restricted cash,cash equivalents and investments-current 16,959,997 Restricted cash,cash equivalents and investments-noncurrent 225,693,204 Agency funds: Cash,cash equivalents and investments 41,306,048 Total $ 669,069,189 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 $ 1,022,659 $ 428,660 $ 593,999 Bayshore Gateway Community Redevelopment Agency 14,974 12,720 2,254 Nonmajor Governmental Funds 2,508,216 609,981 1,898,235 Total receivables reported in Governmental Funds 3,545,849 1,051,361 2,494,488 Total receivables reported in Internal Service Funds 161,155 14,519 146,636 Total Governmental Activities trade receivables $ 3,707,004 $ 1,065,880 $ 2,641,124 County Water and Sewer $ 9,947,702 $ 64,429 $ 9,883,273 Solid Waste Disposal 783,409 - 783,409 Nonmajor Enterprise Funds 25,784,014 24,135,273 1,648,741 Total Business-type Activities trade receivables $36,515,125 $ 24,199,702 $12,315,423 52 COLLIER COUNTY, FLORIDA 1 3 A NOTES TO THE FINANCIAL STATEMENTS SEPTEMBER 30, 2014 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, 2014 were as follows: Advance Advance To From Governmental Activities: General Fund $ 18,098,725 $ - Government Facilities Impact Fees Fund - 28,782,956 Law Enforcement Impact Fees Fund - 19,923,100 Other governmental funds: Fire Control Districts - 711,800 County-Wide Capital Improvements Fund 49,791,700 - County-Wide Library Impact Fees Fund - 10,429,925 Correctional Facilities Impact Fees Fund - 7,027,900 Emergency Medical Services Impact Fees Fund - 3,215,900 Total Governmental Activities 67,890,425 70,091,581 Business-type Activities: Solid Waste Disposal 2,201,156 - Total Business-type Activities 2,201,156 - Total Advances $ 70,091,581 $ 70,091,581 Advances are made to funds for the purposes of capital acquisitions and improvements. Reimbursements will take place over the next several years as funds are available. 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. 53 COLLIER COUNTY, FLORIDA 1 3 A NOTES TO THE FINANCIAL STATEMENTS SEPTEMBER 30, 2014 NOTE 4-INTERFUND PAYABLES AND RECEIVABLES-CONTINUED DUE FROM AND DUE TO-CONTINUED Due from and due to other funds at September 30,2014 were as follows: Due From Due To Governmental Activities: General Fund $ 5,812,187 $ 627,220 lmmokalee Community Redevelopment Agency - 125,888 Government Facilities Impact Fee 970,600 - Law Enforcement Impact Fee 600,000 - Other Governmental Funds: Road Districts 622,064 - Unincorporated Area MSTD 400,880 4,441 Water Management and Pollution Control 38,853 2 Grants and Shared Revenues 41,679 2,743,122 Improvement Districts 30,819 - Fire Control Districts 23,909 - Lighting Districts 8,644 - 911 Enhancement Fee - 50,685 Tourist Development 141,828 1,197 State Court Administration 5,156 - Confiscated Property - 41,739 Conservation Collier 701,600 - Other Sheriff Special Revenue Funds - 269,392 Other Special Revenue Funds - 57,501 Radio Road Limited General Obligation Bonds 710 - Forest Lakes Limited General Obligation Bonds 3,643 - Special Obligation Revenue Bonds - 5,800,000 County-Wide Capital Improvements - 22,945 Parks Improvements 309,911 County Wide Library 264,000 - Correctional Facilities Impact Fee 573,500 - Water Management 59,163 29,769 Parks Impact Fee 2,491,297 - Road Construction 2,540,963 12,916 Other Capital Projects 1,810 - Total other governmental funds 8,260,429 9,033,709 Business-type Activities: County Water and Sewer - 57,250 Solid Waste 38,946 701,600 Other Business-type funds: Airport Authority 34,680 4,757,417 Collier Area Transit 82,080 131,604 Total other business-type funds 116,760 4,889,021 Internal Service Funds 82,488 446,722 Total All Funds $ 15,881,410 $ 15,881,410 54 1 3 A COLLIER COUNTY, FLORIDA NOTES TO THE FINANCIAL STATEMENTS SEPTEMBER 30, 2014 NOTE 5—CAPITAL ASSETS A summary of capital asset activity for the year ended September 30, 2014 is as follows: September 30, September 30, 2013 Additions Deductions Reclassifications 2014 Governmental Activities: Capital assets not depreciated: Land and other non-depreciable assets $ 399,451,397 $ 6,802,226 $ - $ 104,196 $ 406,357,819 Construction in progress 54,023,168 47,659,134 (146,118) (56,258,215) 45,277,969 Total capital assets not depreciated 453,474,565 54,461,360 (146,118) (56,154,019) 451,635,788 Capital assets depreciated: Buildings 435,740,542 58,007 (4,034) 2,306,739 438,101,254 Infrastructure 946,411,565 2,141,120 (74,396) 40,030,804 988,509,093 Improvements other than buildings 265,479,243 909,377 (1,965,656) 13,531,500 277,954,464 Machinery and equipment 180,206,483 10,290,706 (9,520,672) 509,896 181,486,413 Total capital assets depreciated 1,827,837,833 13,399,210 (11,564,758) 56,378,939 1,886,051,224 Less accumulated depreciation: Buildings 136,569,312 13,604,783 (2,980) - 150,171,115 Infrastructure 275,313,071 32,514,647 (27,956) (11,960) 307,787,802 Improvements other than buildings 135,708,408 13,315,545 (928,912) (25,794) 148,069,247 Machinery and equipment 146,268,042 12,403,115 (9,256,834) 348,998 149,763,321 Total accumulated depreciation 693,858,833 71,838,090 (10,216,682) 311,244 755,791,485 Total depreciable capital assets,net 1,133,979,000 (58,438,880) (1,348,076) 56,067,695 1,130,259,739 Total Governmental Activities capital assets,net $1,587,453,565 $ (3,977,520) $(1,494,194) $ (86,324) $1,581,895,527 Business-type Activities: Capital assets not depreciated: Land and other non-depreciable assets $ 26,234,157 $ 4,729,111 $ - $ 1,369,118 $ 32,332,386 Construction in progress 66,761,307 58,507,822 (335,124) (53,715,789) 71,218,216 Total capital assets not depreciated 92,995,464 63,236,933 (335,124) (52,346,671) 103,550,602 Capital assets depreciated: Buildings 135,735,810 29,679 (96,699) 165,770 135,834,560 Improvements other than buildings 1,047,401,422 4,614,054 (13,776) 50,619,503 1,102,621,203 Machinery and equipment 47,364,339 5,802,177 (3,472,508) 1,691,823 51,385,831 Total capital assets depreciated 1,230,501,571 10,445,910 (3,582,983) 52,477,096 1,289,841,594 Less accumulated depreciation: Buildings 74,202,244 3,779,383 (96,699) (1) 77,884,927 Improvements other than buildings 334,978,512 32,748,212 (8,006) 23,254 367,741,972 Machinery and equipment 26,760,051 4,894,300 (3,426,707) 20,848 28,248,492 Total accumulated depreciation 435,940,807 41,421,895 (3,531,412) 44,101 473,875,391 Total depreciable capital assets,net 794,560,764 (30,975,985) (51,571) 52,432,995 815,966,203 Total Business-type Activities capital assets,net $ 887,556,228 $32,260,948 $ (386,695) $ 86,324 $ 919,516,805 55 COLLIER COUNTY, FLORIDA 13 A NOTES TO THE FINANCIAL STATEMENTS SEPTEMBER 30, 2014 NOTE 5-CAPITAL ASSETS-CONTINUED Schedule of depreciation for fiscal year 2014: General Government $ 9,095,240 Public Safety 12,687,492 Physical Environment 6,102,916 Transportation 33,477,056 Economic Environment 210,597 Human Services 404,141 Culture and Recreation 8,047,008 Subtotal 70,024,450 Internal Service Funds 1,813,640 Total Governmental Activities $ 71,838,090 Water and Sewer $ 37,004,681 Solid Waste 1,151,771 EMS 850,531 Airport Authority 931,121 Mass Transit 1,483,791 Total Business-type Activities $ 41,421,895 NOTE 6-LONG-TERM DEBT SUMMARY OF CHANGES IN LONG-TERM OBLIGATIONS The following is a summary of changes in long-term obligations for the year ended September 30,2014: 000's Omitted October 1, Premium September 30, Due within 2013 Additions Reductions Amortized,net 2014 one year Governmental Activities: Bonds and Loans Payable $ 374,858 $ 89,780 $(103,947) $ - $ 360,691 $ 19,290 Premium 24,111 - (4,103) (1,730) 18,278 - Capital Lease Obligations 323 - (93) - 230 21 Self-Insurance Claims 8,129 44,765 (46,321) - 6,573 5,067 Net OPEB Obligation 2,179 1,913 (1,561) - 2,531 - Compensated Absences 23,108 7,979 (6,200) - 24,887 9,062 Total $432,708 $144,437 $(162,225) $ (1,730) $ 413,190 $ 33,440 Business-type Activities: Bonds and Loans Payable $221,359 $ 9,922 $ (23,867) $ - $ 207,414 $ 14,606 Premium 1,288 - (136) (52) 1,100 - Notes Payable 69 - - - 69 69 Capital Lease Obligations 40 1,480 (298) - 1,222 236 Landfill Closure Liability 1,940 - (14) - 1,926 - Compensated Absences 2,718 2,392 (2,346) - 2,764 2,211 Total $227,414 $ 13,794 $ (26,661) $ (52) $ 214,495 $ 17,122 56 COLLIER COUNTY, FLORIDA 13 A NOTES TO THE FINANCIAL STATEMENTS SEPTEMBER 30, 2014 NOTE 6-LONG-TERM DEBT-CONTINUED DESCRIPTIONS OF BONDS, LOANS AND NOTES PAYABLE Bonds,loans and notes payable at September 30,2014 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 to 4 mils. $ 3,765,000 Total Governmental Activities Limited General Obligation Bonds $ 3,765,000 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. $ 1,770,000 $38,680,000 2012 Gas Tax Refunding 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. 32,330,000 $89,780,000 2014 Gas Tax Refunding Revenue Bonds, due in annual installments of $1,065,000 to $13,265,000 through June 1, 2025; interest at 2.33% and collateralized by a pledge on the combined gas tax proceeds. 89,780,000 $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. 53,120,000 $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. 18,330,000 $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. 80,710,000 57 13A COLLIER COUNTY, FLORIDA NOTES TO THE FINANCIAL STATEMENTS SEPTEMBER 30, 2014 NOTE 6-LONG-TERM DEBT-CONTINUED DESCRIPTIONS OF BONDS, LOANS AND NOTES PAYABLE—CONTINUED $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 $349,845,000 Governmental Activities Notes Payable $7,557,900 Bayshore Gateway Community Redevelopment Agency Taxable Note, due in monthly installments of $41,988 through June 1, 2018; 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. $ 6,638,433 $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. 442,177 Total Governmental Activities Notes Payable $ 7,080,610 Total Governmental Activities Obligations $360,690,610 Unamortized Bond Premium $ 18,277,810 Governmental Activities Obligations, Net $378,968,420 Less Current Portion of Governmental Activities Obligations $(19,289,518) Long-Term Portion of Governmental Activities Obligations,Net $359,678,902 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. $ 77,370,000 $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. 3,577,935 $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. 13,522,088 Total Business-type Activities Revenue Bonds $ 94,470,023 58 COLLIER COUNTY, FLORIDA 1 3 A NOTES TO THE FINANCIAL STATEMENTS SEPTEMBER 30, 2014 NOTE 6-LONG-TERM DEBT-CONTINUED DESCRIPTIONS OF BONDS,LOANS AND NOTES PAYABLE—CONTINUED Business-type Activities Loans and Notes Payable $166,580 County Water and Sewer District agreement with private developer payable through use of sewer impact fee credits. Non-interest bearing agreement. $ 69,190 $13,730,740 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. 3,339,603 $21,951,544 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. 9,156,437 $5,055,347 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. 2,967,914 $6,560,956 County Water and Sewer District State Revolving Fund Loan,interest payable at 3.05%payable in 40 semiannual payments commencing January 15,2005 and collateralized by a subordinated pledge on the net revenues of the Collier County Water and Sewer District. 3,770,673 $28,630,467 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. 18,846,559 $10,280,778 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. 6,495,089 $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. 3,395,126 $4,210,716 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. 2,898,093 $5,625,546 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. 4,010,036 $21,126,718 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. 16,751,601 59 COLLIER COUNTY, FLORIDA 1 3 A NOTES TO THE FINANCIAL STATEMENTS SEPTEMBER 30, 2014 NOTE 6-LONG-TERM DEBT-CONTINUED DESCRIPTIONS OF BONDS, LOANS AND NOTES PAYABLE-CONTINUED $42,505,652 County Water and Sewer District State Revolving Fund Loan, interest payable at 2.25%, 2.37%, 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. 39,025,884 $2,864,137 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. 2,286,657 Total Business-type Activities Loans and Notes Payable -$113,012,862 Total Business-type Activities Obligations $207,482,885 Unamortized Bond Premium $ 1,100,430 Business-type Activities Obligations, Net $208,583,315 Less Current Portion of Business-type Activities Obligations Payable from Unrestricted $(11,471,852) Less Current Portion of Business-type Activities Obligations Payable from Restricted Assets $ (3,203,320) Long-Term Portion of Business-type Activities Obligations, Net $193,908,143 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 2015 $ 410,000 $ 147,475 $ 18,325,000 $ 13,122,715 $ 554,518 $ 272,328 $ 32,832,036 2016 425,000 130,775 19,180,000 12,261,577 556,289 250,276 32,803,917 2017 440,000 113,475 19,900,000 11,529,730 558,121 228,163 32,769,489 2018 460,000 95,475 20,655,000 10,766,957 5,183,027 158,620 37,319,079 2019 475,000 76,181 21,440,000 9,961,048 58,124 6,955 32,017,308 2020-24 1,555,000 101,044 114,775,000 37,162,061 170,531 8,437 153,772,073 2025-29 - - 65,245,000 19,905,415 - - 85,150,415 2030-34 - - 57,155,000 9,243,501 - - 66,398,501 2035-39 - - 13,170,000 532,000 - - 13,702,000 Totals $3,765,000 $ 664,425 $349,845,000 $124,485,004 $ 7,080,610 $ 924,779 $486,764,818 60 COLLIER COUNTY, FLORIDA 1 3 A NOTES TO THE FINANCIAL STATEMENTS SEPTEMBER 30, 2014 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 2015 $ 6,073,205 $ 3,639,342 $ 8,601,967 $ 2,980,454 $ 21,294,968 2016 3,986,420 3,523,652 8,768,455 2,744,775 19,023,302 2017 3,679,430 3,437,796 9,010,716 2,502,514 18,630,456 2018 3,799,061 3,319,491 9,259,743 2,253,489 18,631,784 2019 3,920,480 3,196,646 8,623,257 2,003,493 17,743,876 2020-24 12,851,427 14,069,784 42,274,129 6,469,700 75,665,040 2025-29 6,460,000 13,110,200 26,474,595 1,523,743 47,568,538 2030-34 36,680,000 8,735,077 - - 45,415,077 2035-39 17,020,000 1,144,318 - - 18,164,318 Totals $ 94,470,023 $54,176,306 $113,012,862 $20,478,168 $282,137,359 CURRENT YEAR DEBT REFUNDINGS On November 21, 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 and paying associated closing costs. 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. The advance refunding achieved an aggregate debt service savings of $1,427,317 and an economic gain of$759,074. The Series 2006 bonds have a redemption date of July 1, 2016. On May 29, 2014 Collier County issued the Series 2014 Gas Tax Refunding Revenue Bond in the par amount of$89,780,000. These bonds were issued for the purpose of advance refunding a portion of the County's outstanding Series 2005 Gas Tax Revenue Bonds. The final maturity of the bonds is June 1, 2025, with an interest rate of 2.33%. The refunding achieved a net present value savings of 11.38% on the refunded bonds. The advance refunding achieved an aggregate debt service savings of$11,063,043 and an economic gain of$9,712,559. The Series 2005 bonds have a redemption date of June 1, 2015. 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. 61 COLLIER COUNTY, FLORIDA 13A NOTES TO THE FINANCIAL STATEMENTS SEPTEMBER 30, 2014 NOTE 6-LONG-TERM DEBT—CONTINUED According to County resolutions authorizing the issuance of the Series 2005 Gas Tax Revenue Bonds and the Series 2012 and 2014 Gas Tax Revenue Refunding 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 $600,000 as of the end of fiscal year 2014. The Agency was in compliance with these covenants for the year ended September 30, 2014. The County Water and Sewer District (District) has pledged future water and sewer customer revenues, net of certain operating expenses, to repay$94,470,023 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 2014 pledged revenues, net of operating expenses, were $39,804,129 and $50,854,520 when system development fees and special assessments were included. Principal and interest paid on the bonds during fiscal year 2014 totaled $9,952,972, providing coverage of 400% and 511%, 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, 2014. 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 30,2014. LEGAL DEBT MARGIN The Constitution of the State of Florida and the Florida Statutes set no legal debt limit. 62 13A COLLIER COUNTY, FLORIDA NOTES TO THE FINANCIAL STATEMENTS SEPTEMBER 30, 2014 NOTE 6-LONG-TERM DEBT—CONTINUED 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, 2014 were as follows: Total Interest Interest Cost Net Interest Cost Incurred Capitalized Expense Business-type Activities $ 6,982,277 $ 1,225,616 $ 5,756,661 Interest expense is shown as a direct expense of the Business-type Activities. LEASE OBLIGATIONS Capitalized leases payable at September 30, 2014 amounted to $1,451,931. These obligations, which are collateralized by equipment and vehicles, have total annual installments ranging from $29,702 to $322,914 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$930,656. Equipment currently leased under capital leases in the business-type activities had a historical cost of $1,731,386 and accumulated depreciation of $292,757. Future minimum capital lease obligations as of September 30, 2014 were as follows: Governmental Business-type Activities Activities Total 2015 $ 64,933 $ 257,981 $ 322,914 2016 29,703 257,981 287,684 2017 29,703 257,981 287,684 2018 29,702 257,981 287,683 2019 29,702 257,980 287,682 2020-22 89,107 - 89,107 Total minimum lease payments 272,850 1,289,904 1,562,754 Less amount representing interest (42,924) (67,899) (110,823) Present value of minimum lease payments $ 229,926 $ 1,222,005 $ 1,451,931 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, 2014 were $1,140,634. Total rental expenditures for all operating leases within business-type activities governmental activities for the year ended September 30, 2014 were$186,125. 63 COLLIER COUNTY, FLORIDA NOTES TO THE FINANCIAL STATEMENTS 13 SEPTEMBER 30, 2014 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, 2014, the outstanding principal amount payable on all component unit conduit debt was$413,360,000 and is made up of the following: Industrial development revenue bonds $ 193,240,000 Housing finance revenue bonds 14,390,000 Health facilities revenue bonds 113,605,000 Educational facilities revenue bonds 92,125,000 Total $ 413,360,000 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, 2014 the following issues were considered defeased: Original Debt Defeased Bonds Governmental Activities Defeased Outstanding 1986 Capital Improvement Program Revenue Bonds, Sub-Series 5 Mode A $ 12,245,000 $ 1,535,000 2005 Capital Improvement and Refunding Revenue Bonds 131,710,000 121,260,000 2005 Gas Tax Revenue Bonds 85,530,000 85,530,000 Total Governmental Activities Defeased Debt $229,485,000 $ 208,325,000 Original Debt Defeased Bonds Business-type Activities Defeased Outstanding 2006 County Water and Sewer Revenue Bonds $ 32,795,000 $ 32,795,000 Total Business-type Activities Defeased Debt $ 32,795,000 $ 32,795,000 64 COLLIER COUNTY, FLORIDA 1 3 A NOTES TO THE FINANCIAL STATEMENTS SEPTEMBER 30, 2014 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. 65 COLLIER COUNTY, FLORIDA 13 A NOTES TO THE FINANCIAL STATEMENTS SEPTEMBER 30, 2014 NOTE 9—PENSION PLAN OBLIGATIONS-CONTINUED PLAN DESCRIPTION—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.myflorida.com. FUNDING POLICY The County is required to contribute at an actuarially determined rate. Rates from October 1, 2013 through June 30, 2014 were 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. The current rates, effective July 1, 2014, are 19.82% for special risk, 43.24% for county elected officials, 21.14%for senior management, 7.37%for regular employees and 12.28%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, 2014, 2013 and 2012 are represented in the table below. The County's contributions were equal to the required contributions for each year. 2014 2013 2012 General Fund $15,890,424 $11,892,775 $10,489,397 Community Redevelopment 28,523 21,793 35,061 Nonmajor Governmental Funds 2,749,077 2,057,847 2,057,704 County Water and Sewer 1,323,453 989,447 832,576 Solid Waste 111,061 88,016 61,084 Nonmajor Enterprise Funds 2,322,118 1,778,873 1,547,097 Internal Service Funds 357,829 274,690 230,115 Totals $22,782,485 $17,103,441 $15,253,034 66 13A COLLIER COUNTY, FLORIDA NOTES TO THE FINANCIAL STATEMENTS SEPTEMBER 30, 2014 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, 2014 were as follows: Transfers from Fund Transfers to Fund Amount Governmental Activities: General Fund Nonmajor Governmental Funds $ 46,096,986 Solid Waste Disposal 38,925 Nonmajor Business-type 16,761,234 Bayshore Gateway Community Redevelopment Agency Nonmajor Governmental Funds 1,195,347 Government Facilities Impact Fee Nonmajor Governmental Funds 4,354,500 Law Enforcement Impact Fee Nonmajor Governmental Funds 2,649,000 Nonmajor Governmental Funds General Fund 2,981,722 Bayshore Gateway Community Redevelopment Agency 136,800 Immokalee Community Redevelopment Agency 76,000 Nonmajor Governmental Funds 33,677,744 County Water and Sewer 15,900 Nonmajor Business-type 2,068,083 Business-type Activities: County Water and Sewer General Fund 5,121,574 Nonmajor Governmental Funds 57,250 Solid Waste Disposal 43,400 Solid Waste Disposal General Fund 604,162 Nonmajor Business-type Nonmajor Governmental Funds 3,000 Internal Service Funds General Fund 900,E Total Operating Transfers $ 116,781,627 67 COLLIER COUNTY, FLORIDA 1 3 A NOTES TO THE FINANCIAL STATEMENTS SEPTEMBER 30, 2014 NOTE 11—NET POSITION/FUND BALANCE CLASSIFICATION Net position represents the difference between total assets plus deferred outflows of resources and liabilities plus deferred inflows of resources and is 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 fees are 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. Restricted for Conservation Collier: Balances generated by the former levy of one quarter mill of ad valorem revenues restricted for the maintenance and management of environmentally sensitive land. Restricted for community redevelopment: Tax increment revenues generated in the redevelopment areas are restricted for redevelopment purposes. 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 nonexpendable purposes — other: Balances are restricted in conjunction with the maintenance and management of certain conservation lands for mitigation purposes. Restricted for special revenues — other: Balances are restricted for specific uses associated with the revenue collected. 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. 68 COLLIER COUNTY, FLORIDA 13 A NOTES TO THE FINANCIAL STATEMENTS SEPTEMBER 30, 2014 NOTE 11—NET POSITION/FUND BALANCE CLASSIFICATION—CONTINUED 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 amounts 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. 69 COLLIER COUNTY, FLORIDA 13 A NOTES TO THE FINANCIAL STATEMENTS SEPTEMBER 30, 2014 NOTE 11—NET POSITION/FUND BALANCE CLASSIFICATION-CONTINUED A detailed schedule of fund balances at September 30,2014 is as follows: Bayshore Gateway Immokalee Community Community General Redevelopment Redevelopment Fund Agency Agency Nonspendable: Endowments $ - $ - $ - Advances 18,098,725 - - Notes 1,634,070 - - Inventory 75,763 - - Prepaids/deposits 34,286 - - Total nonspendable fund balance 19,842,844 - - Restricted for: Community redevelopment - 12,268,507 44,136 Federal and state grants 125,351 - - Bond covenants or debt service - - - Transportation growth related capital expansion - - - Parks growth related capital expansion - - - Transportation capital projects - - - Community development - - - Transportation operations - - - Tourist development - - - Conservation Collier - - - Emergency 911 - - - Law Enforcement - - - Court functions - - - Public Records Modernization - - - Other purposes - - - Total restricted fund balance 125,351 12,268,507 44,136 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 850,262 - - Total assigned fund balance 850,262 - - Unassigned: 57,780,353 - - Total Fund Balances $78,598,810 $ 12,268,507 $ 44,136 70 COLLIER COUNTY, FLORIDA 13 A NOTES TO THE FINANCIAL STATEMENTS SEPTEMBER 30, 2014 NOTE 11—NET POSITION/FUND BALANCE CLASSIFICATION-CONTINUED Government Law Other Total Facilities Enforcement Governmental Governmental Impact Fee Impact Fee Funds Funds $ - $ - $ 1,582,800 $ 1,582,800 49,791,700 67,890,425 - - 741,359 2,375,429 - - 1,428,607 1,504,370 - - 34,286 53,544,466 73,387,310 12,312,643 6,085,111 6,210,462 - - 9,847,530 9,847,530 - - 46,402,810 46,402,810 - - 16,108,986 16,108,986 - - 27,303,945 27,303,945 - - 24,215,922 24,215,922 - - 1,849,165 1,849,165 - - 42,514,747 42,514,747 - - 34,344,995 34,344,995 - - 4,228,178 4,228,178 - 4,174,727 4,174,727 - - 7,019,918 7,019,918 - - 4,737,583 4,737,583 - - 1,834,468 1,834,468 - - 230,668,085 243,106,079 - - 23,409,485 23,409,485 - - 2,372,241 2,372,241 - - 1,213,494 1,213,494 353,891 353,891 27,349,111 27,349,111 - - 3,846,077 3,846,077 - - 8,909,830 8,909,830 - - 13,968,185 13,968,185 - - 495,159 495,159 1,172,072 2,022,334 - - 28,391,323 29,241,585 (25,333,781) (18,665,283) (18,085,948) (4,304,659) $(25,333,781) $(18,665,283) $ 321,867,037 $368,779,426 71 COLLIER COUNTY, FLORIDA 13 A NOTES TO THE FINANCIAL STATEMENTS SEPTEMBER 30, 2014 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-$75,000,000 (5% Named Storm) Auto liability claims $300,000 $300,000-$5,000,000 Employee health claims $325,000 $325,000-Unlimited Workers'compensation claims $600,000 $600,000-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, 2014 the operating departments were charged $35,788,218 for workers'compensation, health and property and casualty self-insurance programs. The claims loss reserve for workers' compensation, health and property and casualty of $4,494,828 reported at September 30,2014 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 $2,989,325 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:$5,000,000 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 Sheriffs Association Workers' Compensation Insurance Trust (FSAWIT) is a limited self-insurance fund providing coverage for the first $500,000 of every claim. Re- insurance is provided through a third party insurer for all claims exceeding$500,000 up to$10,000,000. 72 COLLIER COUNTY, FLORIDA 1 3 A NOTES TO THE FINANCIAL STATEMENTS SEPTEMBER 30, 2014 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. 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$2,078,000 reported at September 30, 2014 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 2013 and 2014 were as follows for the County and Sheriff self-insurance programs: Property and Group Workers' Casualty Health Compensation Total 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 Current year claims incurred and changes in estimates 1,371,715 43,165,938 226,887 44,764,540 Claim payments (1,084,859) (44,748,938) (486,793) (46,320,590) Balance at September 30,2014 $ 1,108,635 $ 4,869,000 $ 595,193 $ 6,572,828 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 and Comptroller, 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 separate financial report. 73 COLLIER COUNTY, FLORIDA 1 3 A NOTES TO THE FINANCIAL STATEMENTS SEPTEMBER 30, 2014 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 October 1,2013,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, 2014, the County contributed $784,612 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. 2014 2013 2012 Annual required contribution(ARC) $ 816,457 $ 749,470 $732,713 Interest on net OPEB obligation 25,017 19,502 13,137 Adjustment to ARC (41,306) (32,200) (21,690) Annual OPEB cost 800,168 736,772 724,160 Contributions made (784,612) (552,929) (511,971) Increase (decrease) in net OPEB obligation 15,556 183,843 212,189 Net OPEB obligation-beginning of year 833,913 650,070 437,881 Net OPEB obligation-end of year $ 849,469 $ 833,913 $650,070 Percentage of annual OPEB cost contributed 98% 75% 71% Funded Status and Funding Progress - 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 an unfunded actuarial accrued liability(UAAL)of$7,093,909. As of the September 30, 2014 actuarial valuation date the OPEB Plan was 0.0% funded and the actuarial accrued liability for benefits was $6,977,743, and the actuarial value of plan assets was $0, resulting in a UAAL of$6,977,743. The covered payroll (annual payroll of active employees covered by the OPEB Plan) was$160.4 million, and the ratio of the UAAL to the covered payroll was 4.4%. 74 COLLIER COUNTY, FLORIDA 1 3 A NOTES TO THE FINANCIAL STATEMENTS SEPTEMBER 30, 2014 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 6%for the 2015 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 2010,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 2010, the subsidy was no longer made available to eligible retirees who chose to continue their health insurance coverage. Approximately 46% 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 separate financial report. At September 30, 2014,the date of the latest actuarial valuation, Sheriff plan participation consisted of: OPEB plan participants 1,155 Retirees receiving benefits 97 Funding Policy-The Sheriff has the authority to establish and amend funding policy. For the year ended September 30, 2014, the Sheriff contributed $776,332 to the OPEB Plan. No trust or agency fund has been established for the plan. 75 COLLIER COUNTY, FLORIDA 1 3A NOTES TO THE FINANCIAL STATEMENTS SEPTEMBER 30, 2014 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. 2014 2013 2012 Annual required contribution(ARC) $ 1,138,923 $1,151,695 $1,122,365 Interest on net OPEB obligation 40,348 31,444 34,226 Adjustment to ARC (66,618) (51,918) (56,511) Annual OPEB cost 1,112,653 1,131,221 1,100,080 Contributions made (776,332) (834,442) (1,192,805) Increase in net OPEB obligation 336,321 296,779 (92,725) Net OPEB obligation-beginning of year 1,344,917 1,048,138 1,140,863 Net OPEB obligation-end of year $ 1,681,238 $1,344,917 $1,048,138 Percentage of annual OPEB cost contributed 70% 73% 108% Funded Status and Funding Progress - 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 an unfunded actuarial accrued liability(UAAL) of$13,141,022. As of the September 30, 2014 actuarial valuation date, the OPEB Plan was 0.0%funded, the actuarial accrued liability for benefits was $14,207,209, and the actuarial value of assets was $0, resulting in a UAAL of $14,207,209. The covered payroll (annual payroll of active employees covered by the OPEB Plan) was $112.9 million, and the ratio of the UAAL to the covered payroll was 12.6%. 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. 76 COLLIER COUNTY, FLORIDA 13 A NOTES TO THE FINANCIAL STATEMENTS SEPTEMBER 30, 2014 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 2015 fiscal year grading to an ultimate rate of 5%for the 2025 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 2014. 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. 77 13A COLLIER COUNTY, FLORIDA NOTES TO THE FINANCIAL STATEMENTS SEPTEMBER 30, 2014 NOTE 15-SIGNIFICANT CONTINGENCIES—CONTINUED During fiscal year 2012, the Federal Emergency Management Agency (FEMA) 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 Hurricanes Katrina and Wilma. The decision to de-obligate the funding is currently under appeal by Collier County. Due to the uncertainty of an appeal, and based upon the opinion of legal counsel, a liability was recorded in the amount of $11,172,273. In fiscal year 2014, Collier County received notification of FEMA's decision to reinstate $1,853,756 of funding as a result of the first round of appeals. In addition, the liability was further offset by $6,806,817 in claims related to Tropical Storms Debby and Fay owed by the State of Florida for additional beach erosion repairs. The remaining balance of $2,511,700 is recorded as a liability in both the entity wide financial statements and the tourist development fund financial statements of Collier County. 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 seq.) 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 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 Second District Court affirmed denial of the Settlement Agreement. The Second District Court reversed dismissal of the Bert Harris Act claim and affirmed dismissal of the inverse condemnation claim. The County is currently awaiting the Second District Court of Appeal's ruling on the parties' Post Opinion Motions. Given the proposed Settlement Agreement (dated February 12, 2013), the County believes that this litigation will be concluded with no risk of liability to the County. 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. 78 13A COLLIER COUNTY, FLORIDA NOTES TO THE FINANCIAL STATEMENTS SEPTEMBER 30, 2014 NOTE 15-SIGNIFICANT CONTINGENCIES—CONTINUED STATE AND FEDERAL GRANTS—CONTINUED 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, 2014. 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, 2014: Encumbrance Category Commitments Governmental Activities: General Fund General Government $ 695,798 Public Safety 3,772 Economic Environment 95,560 Human Services 9,000 Culture and Recreation 46,132 Bayshore Gateway Community Redevelopment Agency Economic Environment 9,544 Immokalee CRA Economic Environment 18,082 Government Facilities Impact Fee General Government 53,642 Law Enforcement Impact Fee Public Safety 49,257 Other Governmental Funds General Government 977,927 Public Safety 2,153,667 Physical Environment 1,116,579 Transportation 1,962,784 Economic Environment 5,040,342 Human Services 1,657,524 Culture and Recreation 667,720 Business-type Activities: Water and Sewer Utilities 15,272,621 Solid Waste Disposal Landfill 743,705 Other Enterprise Funds Emergency Medical Services 952,303 Airports 8,481 Mass Transit 125,902 Total $ 31,660,342 79 COLLIER COUNTY, FLORIDA 1 3 A NOTES TO THE FINANCIAL STATEMENTS SEPTEMBER 30, 2014 NOTE 16-SIGNIFICANT COMMITMENTS—CONTINUED Collier County has active construction projects as of September 30, 2014. The projects include road construction, governmental facilities and utilities improvements. At year end, the County's commitments with contractors include the following: Construction Category Commitments Governmental Activities: Immokalee Community Redevelopment Agency Economic Environment $ 53,461 Law Enforcement Impact Fee Public Safety 214,700 Other Governmental Funds General Government 104,878 Physical Environment 1,723,943 Public Safety 685,619 Transportation 16,727,556 Culture and Recreation 1,639,721 Business-type Activities: Water and Sewer Utilities 17,654,170 Solid Waste Disposal Landfill 869,816 Other Enterprise Funds Airports 553,145 Mass Transit 3,750,833 Total $ 43,977,842 NOTE 17—FUND DEFICITS The following funds had fund balance deficits at September 30, 2014: Fund Amount Government Facilities Impact Fee $(25,333,781) Law Enforcement Impact Fee (18,665,283) Fire Control Districts (341,333) County-Wide Library Impact Fee (9,679,146) Correctional Facilities Impact Fee (5,286,737) Emergency Medical Service Impact Fee (2,778,732) Total $(62,085,012) The fund balance deficits are primarily the result of advances from other funds made prior to September 30, 2014. 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. 80 COLLIER COUNTY, FLORIDA 13 A NOTES TO THE FINANCIAL STATEMENTS SEPTEMBER 30, 2014 NOTE 18—CHANGE IN ACCOUNTING PRINCIPLE During the fiscal year ended September 30, 2014 the County implemented the provisions of GASBS No. 65, Items Previously Reported as Assets and Liabilities. Debt issuance costs were previously reported as an asset and recognized systematically as an expense over the life of the related debt. Debt issuance costs, except those related to prepaid bond insurance, are now recognized as an expense in the period incurred. As a result of the implementation of GASBS No. 65,the beginning net position was restated in the Governmental Activities, Business-type Activities and proprietary fund financial statements, as follows: Net Position Beginning of Net Position Year Restatement as Restated Governmental Activities $ 1,573,262,374 $ (4,317,695) $ 1,568,944,679 Business-type Activities $ 898,588,844 $ (383,115) $ 898,205,729 Enterprise Funds: County Water and Sewer $ 794,281,697 $ (383,115) $ 793,898,582 Solid Waste Disposal 48,703,813 - 48,703,813 Emergency Medical Services 9,709,264 - 9,709,264 Airport Authority 22,668,018 - 22,668,018 Collier Area Transit 22,004,067 - 22,004,067 Total Enterprise Funds $ 897,366,859 $ (383,115) $ 896,983,744 81 13A THIS PAGE INTENTIONALLY LEFT BLANK 13A REQUIRED SUPPLEMENTARY INFORMATION 13A . REQUIRED SUPPLEMENTARY 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) Board and Constitutionals 10/1/2014 - 6,977,743 6,977,743 0.0% 160,410,737 4.3% (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% Sheriff 10/1/2014 - 14,207,209 14,207,209 0.0% 112,902,749 12.6% 13A COMBINING AND INDIVIDUAL FUND FINANCIAL STATEMENTS THIS PAGE INTENTIONALLY LEFT BLANK 13A 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—To 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. 13A 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. UNIVERSITY EXTENSION —To account for fund accumulation to meet the educational goals of the Collier County UF/IFAS extension. COURT FACILITIES FEE—To account for the accumulation of resources to improve court facilities. AFFORDABLE HOUSING—To account for fees to be used to provide for affordable housing related projects. OTHER COURT SPECIAL REVENUE FUNDS—To account for the accumulation of resources for the Sheriff's Inmate Welfare and Federal Equitable Sharing programs. OTHER PUBLIC SAFETY SPECIAL REVENUE FUNDS — To account for the statutory surcharge on recording documents to be paid to the Clerk of the Circuit Court for modernization OTHER SPECIAL REVENUE FUNDS—To account for the accumulation of resources for the following programs: Miscellaneous Florida Statutes Fee Collections Euclid and Lakeland Assessment Adoption Awareness Legal Aid Society Teen Court Law Enforcement Training Animal Control Domestic Violence Public Library Juvenile Assessment Center Law Library Driver Education Freedom Memorial Crime Prevention County Drug Abuse Permanent Fund RESOURCE RECOVERY PARK ENDOWMENT—To account for the permanent endowment established for the benefit of the County's land conservation program. Debt Service Funds RADIO ROAD EAST LIMITED GENERAL OBLIGATION BONDS—To account for the accumulation of resources, surety reserve and payment of interest and principal on the Radio Road East limited general obligation bonds. CONSERVATION COLLIER LIMITED GENERAL OBLIGATION BONDS—To account for the accumulation of resources and payment of interest and principal on long-term debt incurred for the acquisition of environmentally sensitive lands. COMMUNITY REDEVELOPMENT TAXABLE NOTE —To account for the accumulation of resources and payment of interest and principal on taxable long-term debt incurred for the acquisition of land in the Bayshore/Gateway Community Redevelopment Agency. FOREST LAKES LIMITED GENERAL OBLIGATION BONDS—To account for the accumulation of resources and payment of interest and principal on long-term debt incurred on the Forest Lakes limited General Obligation Bonds. SPECIAL OBLIGATION REVENUE BONDS—To account for the accumulation of resources and payment of interest and principal on long-term debt incurred in the refinancing of various outstanding variable rate commercial paper loans. OTHER DEBT SERVICE — To account for the accumulation of resources and payment of interest and principal on variable rate commercial paper loans and special assessment debt incurred in the Naples Park area. 13A Capital Project Funds COUNTY-WIDE CAPITAL IMPROVEMENTS — To account for capital projects, designated by the Board of County Commissioners,to be funded by a County-wide one third mil levy. PARKS IMPROVEMENTS —To account for the expenditure of funds raised specifically for improvements to parks. Projects include land acquisition, design, construction and equipping of certain Community Park sites in the unincorporated areas of the County.Primary funding is ad valorem taxes. COUNTY-WIDE LIBRARY IMPACT FEES—To account for the receipt and expenditure of library impact fees collected from all qualifying new construction.These impact fees must be used for acquisition of County-wide library facilities. CORRECTIONAL FACILITIES IMPACT FEES—To account for the receipt and expenditure of correctional facilities impact fees collected from all qualifying new construction.The impact fee must be used for the acquisition/construction of correctional facilities. 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. ALL TERRAIN VEHICLE PARK—To account for the receipt and expenditure of funds for the creation of an All Terrain Vehicle park. 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. 13A COLLIER COUNTY, FLORIDA COMBINING BALANCE SHEET NONMAJOR GOVERNMENTAL FUNDS SEPTEMBER 30,2014 Special Revenue Funds Water Management Road Unincorporated Community and Pollution Districts Area MSTD Development Control ASSETS Cash,cash equivalents and investments $ 2,109,506 $ 10,042,170 $ 26,174,309 $ 2,459,718 Receivables: Interest 4,807 14,316 26,452 3,198 Trade,net 480 191,060 4,728 37,573 Notes - - - - Impact fee - - - - Special assessments - - - - Due from other funds 622,064 400,880 - 38,853 Due from other governments 24,008 409,976 159,392 20,000 Deposits - - - - Inventory for resale - - - - Inventory 1,428,607 - - - Advances to other funds - - - - Total assets $ 4,189,472 $ 11,058,402 $ 26,364,881 $ 2,559,342 LIABILITIES,DEFERRED INFLOWS OF RESOURCES AND FUND BALANCES Liabilities: Accounts payable 427,363 2,639,042 161,143 58,807 Wages payable 484,192 704,784 618,268 128,292 Due to other funds - 4,441 - 2 Due to other governments 135 3,383 1,307,763 - Unearned revenues - 6,529 - - Refundable deposits - 3,950 61,785 - Retainage payable - - - - Advances from other funds - - -Total liabilities 911,690 3,362,129 2,148,959 187,101 Deferred inflows of resources: Unavailable revenue 10 - - - Fund balances(deficits): Nonspendable 1,428,607 - - - Restricted 1,849,165 - 24,215,922 - Committed - 7,696,273 - 2,372,241 Assigned - - - - U nass igned - - - - Total fund balances(deficits) 3,277,772 7,696,273 24,215,922 2,372,241 Total liabilities,deferred inflows of resources and fund balances(deficits) $ 4,189,472 $ 11,058,402 $ 26,364,881 $ 2,559,342 See accompanying independent auditor's report 90 13A Special Revenue Funds Grants and Fire 911 Shared Improvement Control Lighting Enhancement Tourist Revenues Districts Districts Districts Fee Development $ 2,964,532 $ 16,388,358 $ 475,030 $ 879,654 $ 4,274,079 $ 45,321,143 4,194 19,721 839 1,050 4,784 49,938 274,547 322 395 59 - 993,401 41,679 30,819 23,909 8,644 - 141,828 6,568,732 - - - - 7,479 130,670 - - - - - $ 9,984,354 $ 16,439,220 $ 500,173 $ 889,407 $ 4,278,863 $ 46,513,789 2,532,306 1,260,801 11,054 66,320 - 1,349,972 106,713 26,357 118,441 5,760 - 120,317 2,743,122 - - - 50,685 1,197 54,618 - 211 - - 2,511,700 1,000 - - - - 100 502,375 256,177 - - - 15,756 - - 711,800 - - - 5,940,134 1,543,335 841,506 72,080 50,685 3,999,042 4,044,220 - - - 4,228,178 42,514,747 - 14,895,885 - 817,327 - - (341,333) - - - 4,044,220 14,895,885 (341,333) 817,327 4,228,178 42,514,747 $ 9,984,354 $ 16,439,220 $ 500,173 $ 889,407 $ 4,278,863 $ 46,513,789 91 COLLIER COUNTY,FLORIDA 1 3 A „, COMBINING BALANCE SHEET NONMAJOR GOVERNMENTAL FUNDS SEPTEMBER 30,2014 Special Revenue Funds State 800 Housing MHZ Initiative IRCP State Court Confiscated Partnership Fund Administration Property ASSETS Cash,cash equivalents and investments $ 1,987,197 $ 38,980 $ 144,688 $ 429,744 Receivables: Interest 1,954 184 317 484 Trade,net 14,809 22,618 89,005 - Notes 741,359 - - - Impact fee - - - - Special assessments - - - - Due from other funds - - 5,156 - Due from other governments - - - - Deposits - - - - Inventory for resale 40,000 - - - Inventory - - - - Advances to other funds - - - - Total assets $ 2,785,319 $ 61,782 $ 239,166 $ 430,228 LIABILITIES,DEFERRED INFLOWS OF RESOURCES AND FUND BALANCES Liabilities: Accounts payable - - 837 - Wages payable 3,069 - 99,801 Due to other funds - - - 41,739 Due to other governments - - - - Unearned revenues - - - - Refundable deposits - - - - Retainage payable - - - - Advances from other funds - - - Total liabilities 3,069 - 100,638 41,739 Deferred inflows of resources: Unavailable revenue - - - - Fund balances(deficits): Nonspendable 741,359 - - - Restricted 2,040,891 - - 388,489 Committed - 61,782 138,528 - Assigned - - - - Unassigned - - - - Total fund balances(deficits) 2,782,250 61,782 138,528 388,489 Total liabilities,deferred inflows of resources and fund balances(deficits) $ 2,785,319 $ 61,782 $ 239,166 $ 430,228 See accompanying independent auditor's report 92 13A Special Revenue Funds GAC Land Court Sales,Roads Utility Conservation Information Court University and Canals Fee Collier Technology Services Extension $ 1,098,207 $ 1,169,217 $ 33,738,116 $ 948,823 $ 802,232 $ 112,780 1,203 1,228 38,401 1,163 - 121 64,809 190 60,344 - - - - 701,600 - - - - - - 52,136 - 229,733 - - - - - $ 1,329,143 $ 1,235,254 $ 34,478,307 $ 1,010,330 $ 854,368 $ 112,901 - 307 189,601 67,057 227,386 - 21,453 17,829 3,994 - - 330 - 626,982 - - 1,661 - - - - - 90,333 - - - 21,760 299,754 71,051 854,368 - 1,329,143 - 34,178,553 939,279 - 112,901 1,213,494 - - - - 1,329,143 1,213,494 34,178,553 939,279 - 112,901 $ 1,329,143 $ 1,235,254 $ 34,478,307 $ 1,010,330 $ 854,368 $ 112,901 93 1 3 A COLLIER COUNTY, FLORIDA COMBINING BALANCE SHEET NONMAJOR GOVERNMENTAL FUNDS SEPTEMBER 30,2014 Special Revenue Funds Other Other Court Court Special Public Safety Facilities Affordable Revenue Revenue Fee Housing Funds Funds ASSETS Cash,cash equivalents and investments $ 6,008,373 $ 153,411 $ 4,770,978 $ 2,010,955 Receivables: Interest 6,477 170 - - Trade,net 75,847 - - 25,000 Notes - - - - Impact fee - - - Special assessments - - - - Due from other funds - - - Due from other governments - - - - Deposits - - Inventory for resale - - - - Inventory - - - - Advances to other funds - - - - Total assets $ 6,090,697 $ 153,581 $ 4,770,978 $ 2,035,955 LIABILITIES,DEFERRED INFLOWS OF RESOURCES AND FUND BALANCES Liabilities: Accounts payable 10,058 - 33,395 9,447 Wages payable - - - Due to other funds - - - 269,392 Due to other governments - - - - - Unearned revenues - - - - Refundable deposits - - - - Retainage payable - - - Advances from other funds - - - Total liabilities 10,058 - 33,395 278,839 Deferred inflows of resources: Unavailable revenue - - - - Fund balances(deficits): . - Nonspendable - - Restricted 6,080,639 - 4,737,583 1,757,116 Committed - 153,581 - Assigned - - - - Unassigned - - - Total fund balances(deficits) 6,080,639 153,581 4,737,583 1,757,116 Total liabilities,deferred inflows of resources and fund balances(deficits) $ 6,090,697 $ 153,581 $ 4,770,978 $ 2,035,955 See accompanying independent auditor's report 94 13A .., Special Revenue Funds Permanent Fund Debt Service Funds Other Total Conservation Special Special Resource Radio Road East Collier Revenue Revenue Recovery Park Limited General Limited General Funds Funds Endowment Obligation Bonds Obligation Bonds $ 3,544,393 $ 168,046,593 $ 1,783,361 $ 87,625 $ 144,623 3,959 184,960 376 103 152 34,569 1,889,756 - - 91 741,359 - - - - 2,015,432 - 710 - - 7,241,723 - - - - 400,403 - - - - 1,428,607 - - - $ 3,582,921 $ 181,948,833 $ 1,783,737 $ 88,438 $ 144,866 7,620 9,052,516 34,495 - - 6,057 2,465,327 - - - 57,501 3,168,079 - - - 100 4,505,222 - - - - 8,190 - - - - 66,835 - - - - 864,641 - - - 711,800 - - - 71,278 20,842,610 34,495 - - - 10 - - - 2,169,966 1,582,800 - - 2,421,546 130,838,372 166,442 88,438 144,866 - 27,349,111 - - - 1,090,097 1,090,097 - - - (341,333) - - - 3,511,643 161,106,213 1,749,242 88,438 144,866 $ 3,582,921 $ 181,948,833 $ 1,783,737 $ 88,438 $ 144,866 95 COLLIER COUNTY, FLORIDA 13 A COMBINING BALANCE SHEET NONMAJOR GOVERNMENTAL FUNDS SEPTEMBER 30,2014 Debt Service Funds Community Forest Lakes Special Redevelopment Limited General Obligation Other Taxable Note Obligation Bonds Revenue Bonds Debt Service ASSETS Cash,cash equivalents and investments $ 672,816 $ 941,038 $ 9,339,836 $ 69,721 Receivables: Interest 850 1,039 4,000 112 Trade,net - - - 73 Notes - - - - Impact fee - - - - Special assessments - - -Due from other funds - 3,643 - - Due from other governments - - - - Deposits - - - - Inventory for resale - - - - Inventory - - - - Advances to other funds - - - - Total assets $ 673,666 $ 945,720 $ 9,343,836 $ 69,906 LIABILITIES,DEFERRED INFLOWS OF RESOURCES AND FUND BALANCES Liabilities: Accounts payable - - - 1,825 Wages payable - - - Due to other funds - - 5,800,000 - Due to other governments - - -Unearned revenues - - - - Refundable deposits - - - - Retainage payable - - - - Advances from other funds - - -Total liabilities - - 5,800,000 1,825 Deferred inflows of resources: Unavailable revenue - - - - Fund balances(deficits): - - Nonspendable - - Restricted 673,666 945,720 3,543,836 68,081 Committed - - - - Assigned - - - - Unassigned - - - Total fund balances(deficits) 673,666 945,720 3,543,836 68,081 Total liabilities,deferred inflows of resources and fund balances(deficits) $ 673,666 $ 945,720 $ 9,343,836 $ 69,906 See accompanying independent auditor's report 96 13A Debt Service Funds Capital Projects Funds Total Emergency Debt County-Wide County-wide Correctional Medical Service Capital Parks Library Facilities Services Funds Improvements Improvements Impact Fees Impact Fees Impact Fees $ 11,255,659 $ 9,668,199 $ 1,121,397 $ 480,168 $ 1,156,573 $ 434,934 6,256 8,918 1,844 727 2,012 474 164 - 6,521 - - - 211,753 61,316 58,954 4,353 - 309,911 264,000 573,500 - 5,884 9,078 1,760 - 49,791,700 - - - - $ 11,266,432 $ 59,468,817 $ 1,439,673 $ 962,532 $ 1,802,479 $ 496,122 1,825 499,915 245,630 - - - 5,800,000 22,945 - - - - 244,427 323,978 - - 10,429,925 7,027,900 3,215,900 5,801,825 767,287 569,608 10,429,925 7,027,900 3,215,900 - - - 211,753 61,316 58,954 49,791,700 - - - - 5,464,607 - - - - 8,909,830 870,065 - - - - - (9,679,146) (5,286,737) (2,778,732) 5,464,607 58,701,530 870,065 (9,679,146) (5,286,737) (2,778,732) $ 11,266,432 $ 59,468,817 $ 1,439,673 $ 962,532 $ 1,802,479 $ 496,122 97 1 3 A COLLIER COUNTY,FLORIDA COMBINING BALANCE SHEET NONMAJOR GOVERNMENTAL FUNDS SEPTEMBER 30,2014 Capital Projects Funds Parks Road Water Impact Impact Road Management Districts Districts Construction ASSETS Cash,cash equivalents and investments $ 14,738,867 $ 14,011,392 $ 47,452,021 $ 30,702,716 Receivables: Interest 16,882 17,705 51,101 32,447 Trade,net - - - - Notes - - - - Impact fee - 1,268,631 3,235,187 - Special assessments - - - - Due from other funds 59,163 2,491,297 - 2,540,963 Due from other governments - 36,186 504,387 3,141,636 Deposits - 1,250 - - Inventory for resale - - - - Inventory - - - - Advances to other funds - - - - 1 Total assets $ 14,814,912 $ 17,826,461 $ 51,242,696 $ 36,417,762 I LIABILITIES,DEFERRED INFLOWS OF RESOURCES AND FUND BALANCES Liabilities: Accounts payable 894,089 336,427 1,662,678 4,510,250 Wages payable 1,854 - - 150,126 Due to other funds 29,769 - - 12,916 Due to other governments - - - - Unearned revenues - - - - Refundable deposits - - - - Retainage payable 46,782 112,417 1,259 57,602 Advances from other funds - - - Total liabilities 972,494 448,844 1,663,937 4,730,894 Deferred inflows of resources: Unavailable revenue - 1,268,631 3,235,187 - Fund balances(deficits): - - Nonspendable - Restricted - 16,108,986 46,343,572 31,686,868 Committed - - Assigned 13,842,418 - - - - Unassigned - Total fund balances(deficits) 13,842,418 16,108,986 46,343,572 31,686,868 Total liabilities,deferred inflows of resources and fund balances(deficits) $ 14,814,912 $ 17,826,461 $ 51,242,696 $ 36,417,762 See accompanying independent auditor's report 98 13A Capital Projects Funds Total Total All Terrain Other Capital Nonmajor Vehicle Capital Projects Governmental Park Projects Funds Funds $ 2,972,774 $ 870,809 $ 123,609,850 $ 304,695,463 3,238 1,024 136,372 327,964 1,794 8,315 1,898,235 - - - - 741,359 - - 4,835,841 4,835,841 12,762 12,762 12,762 - 1,810 6,240,644 8,260,429 - - - 3,698,931 10,940,654 - - 1,250 1,250 - - 400,403 - - - 1,428,607 49,791,700 49,791,700 - - $ 2,976,012 $ 888,199 $ 188,335,665 $ 383,334,667 68,514 8,217,503 17,306,339 - - 57,546 209,526 2,674,853 - - 65,630 9,033,709 - - 4,505,222 - - - 8,190 - - - 66,835 - - 786,465 1,651,106 - - 20,673,725 21,385,525 - 126,060 29,952,849 56,631,779 - - 4,835,841 4,835,851 - - 49,791,700 53,544,466 59,238 94,198,664 230,668,085 - - - 27,349,111 2,976,012 702,901 27,301,226 28,391,323 - - (17,744,615) (18,085,948) 2,976,012 762,139 153,546,975 321,867,037 $ 2,976,012 $ 888,199 $ 188,335,665 $ 383,334,667 99 1 3 A COLLIER COUNTY, FLORIDA COMBINING STATEMENT OF REVENUES,EXPENDITURES AND CHANGES IN FUND BALANCES NONMAJOR GOVERNMENTAL FUNDS FOR THE FISCAL YEAR ENDED SEPTEMBER 30,2014 Special Revenue Funds Water Management Road Unincorporated Community and Pollution Districts Area MSTD Development Control Revenues: Taxes $ - $ 31,298,754 $ - $ 1,721,652 Licenses,permits and impact fees 422,625 237,587 19,925,687 900 Intergovernmental 1,552,305 - - - Charges for services 325,066 2,812,739 3,016,207 323,516 Fines and forfeitures - 466,800 -Interest income 21,816 85,729 112,857 19,916 Special assessments - - 2,589,754 Miscellaneous 63,971 214,437 67,576 - Total revenues 2,385,783 35,116,046 23,122,327 4,655,738 Expenditures: Current: General government - 5,723,466 4,132,710 - Public safety - 3,938,627 9,207,836 - Physical environment - 597,983 576,017 2,630,239 Transportation 13,837,569 10,894,347 - 1,670,010 Economic environment - 81,573 - - Human services - - - - Culture and recreation - 10,308,827 - - Debt service: Principal - - - - Interest - - - - Payment to refunding bond escrow - - - - Fiscal charges - - - - Capital outlay 2,216,666 75,493 487,068 56,878 Total expenditures 16,054,235 31,620,316 14,403,631 4,357,127 Excess(deficiency)of revenues over(under)expenditures (13,668,452) 3,495,730 8,718,696 298,611 Other financing sources(uses): Bonds issued - - - - Payment to refunding bond escrow - - - - Sale of capital assets 10,200 - 12,045 - Insurance proceeds 197,809 49,830 195 1,506 Transfers in 15,762,600 768,998 825,290 38,853 Transfers out (1,189,300) (3,488,818) (652,300) (399,310) Total other financing sources(uses) 14,781,309 (2,669,990) 185,230 (358,951) Net change in fund balances 1,112,857 825,740 8,903,926 (60,340) Fund balances(deficits)at beginning of year 2,164,915 6,870,533 15,311,996 2,432,581 Fund balances(deficits)at end of year $ 3,277,772 $ 7,696,273 $ 24,215,922 $ 2,372,241 See accompanying independent auditor's report 100 13A Special Revenue Funds Grants and Fire 911 Shared Improvement Control lighting Enhancement Tourist Revenues Districts Districts Districts Fee Development $ - $ 3,331,986 $ 2,591,903 $ 1,051,609 $ - $ 19,136,960 18,819,839 - 10,567 - 1,766,357 5,906,503 432,901 218,848 9,775 - - 484,941 25,370 105,155 5,795 5,777 23,975 250,532 1,131,212 772,910 4,218 15,986 - 2,225,719 20,409,322 4,428,899 2,622,258 1,073,372 1,790,332 28,004,655 790,701 - - - - - 4,148,876 - 3,093,087 - 1,618,703 - 87,406 722,741 - - - 2,012,906 93,336 1,023,171 - 875,933 - - 5,821,991 - - - - - 2,462,836 - - - - - 96,060 844,046 - - - 8,469,600 - - 92,933 - - - - - 14,689 - - - 11,348,561 4,257,508 84,738 1,000 - 10,464,543 24,849,767 6,847,466 3,285,447 876,933 1,618,703 20,947,049 (4,440,445) (2,418,567) (663,189) 196,439 171,629 7,057,606 - 4,815 - - - 29,654 - - - - 632,984 407,119 490,509 8,644 - 141,828 (491,574) (1,495,727) (79,310) (26,771) - (610,739) 141,410 (1,058,954) 416,014 (18,127) - (468,911) (4,299,035) (3,477,521) (247,175) 178,312 171,629 6,588,695 8,343,255 18,373,406 (94,158) 639,015 4,056,549 35,926,052 $ 4,044,220 $ 14,895,885 $ (341,333) $ 817,327 $ 4,228,178 $ 42,514,747 101 COLLIER COUNTY, FLORIDA 1 3 A COMBINING STATEMENT OF REVENUES, EXPENDITURES AND CHANGES IN FUND BALANCES NONMAJOR GOVERNMENTAL FUNDS FOR THE FISCAL YEAR ENDED SEPTEMBER 30,2014 Special Revenue Funds State Housing Initiative 800 MHZ State Court Confiscated Partnership ICRP Fund Administration Property Revenues: Taxes $ - $ - $ - $ Licenses,permits and impact fees - - - - Intergovernmental 1,301,657 - - - Charges for services - 420,321 155,835 - Fines and forfeitures - - 935,695 107,752 Interest income 8,477 530 1,520 2,462 Special assessments - - - - Miscellaneous 1,020,269 161,675 7,469 - Total revenues 2,330,403 582,526 1,100,519 110,214 Expenditures: Current: General government - - 844,638 - Public safety - 1,170,528 1,481,142 77,000 Physical environment - - - - Transportation - - - - Economic environment 297,678 - - - - Human services - - Culture and recreation - - - - Debt service: Principal - - - Interest - - - - Payment to refunding bond escrow - - - - Fiscal charges - - Capital outlay - 28,364 - Total expenditures 297,678 1,198,892 2,325,780 77,000 Excess(deficiency)of revenues over(under)expenditures 2,032,725 (616,366) (1,225,261) 33,214 Other financing sources(uses): Bonds issued - - - - Payment to refunding bond escrow - - - - Sale of capital assets - 250 - - Insurance proceeds - - Transfers in - 576,400 1,246,356 - Transfers out - - (17,000) (42,586) Total other financing sources(uses) - 576,650 1,229,356 (42,586) Net change in fund balances 2,032,725 (39,716) 4,095 (9,372) Fund balances(deficits)at beginning of year 749,525 101,498 134,433 397,861 Fund balances(deficits)at end of year $ 2,782,250 $ 61,782 $ 138,528 $ 388,489 See accompanying independent auditor's report 102 13A Special Revenue Funds GAC land Court Sales,Roads Utility Conservation Impact Fee Information Court and Canals Fee Collier Escrow Technology Services $ - $ 373,941 $ 32,151 $ - $ - $ - 37,119 720 - 770,294 7,221,719 - 6,133 5,862 201,807 794 5,531 8,216 229,733 - 1,534,560 - - - 235,866 416,922 1,769,238 794 775,825 7,229,935 - - - - 616,346 7,229,935 26,344 - 355,861 870,364 - - - - - - - - 5,627 - - - 1,674,516 - 93,120 - - 355,861 2,544,880 - 741,437 7,229,935 235,866 61,061 (775,642) 794 34,388 - - - 1,106 - - - - 100,000 35,233 - - - - - (1,915,734) (670,326) - - - 100,000 (1,879,395) (670,326) - - 235,866 161,061 (2,655,037) (669,532) 34,388 - 1,093,277 1,052,433 36,833,590 669,532 904,891 - $ 1,329,143 $ 1,213,494 $ 34,178,553 $ - $ 939,279 $ - 103 COLLIER COUNTY, FLORIDA 1 3 A COMBINING STATEMENT OF REVENUES,EXPENDITURES AND CHANGES IN FUND BALANCES NONMAJOR GOVERNMENTAL FUNDS FOR THE FISCAL YEAR ENDED SEPTEMBER 30,2014 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 11,278 - - 1,394,089 Fines and forfeitures - 1,013,318 - - Interest income 600 31,272 918 8,331 Special assessments - - - - Miscellaneous 18,505 - - - Total revenues 30,383 1,044,590 918 1,402,420 Expenditures: Current: General government - 265 - 1,214,099 Public safety - - - - Physical environment 23,199 - - - Transportation - - - - Economic environment - - 53,789 - Human services - - - - Culture and recreation - - - - Debt service: Principal - - - - 'Interest - - - - Payment to refunding bond escrow - - - Fiscal charges - - - - Capital outlay - 140,992 - - Total expenditures 23,199 141,257 53,789 1,214,099 Excess(deficiency)of revenues over(under)expenditures 7,184 903,333 (52,871) 188,321 Other financing sources(uses): 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 7,184 903,333 (52,871) 188,321 Fund balances(deficits)at beginning of year 105,717 5,177,306 206,452 4,549,262 Fund balances(deficits)at end of year S 112,901 $ 6,080,639 $ 153,581 $ 4,737,583 See accompanying independent auditor's report 104 13A Special Revenue Funds Permanent Fund Debt Service Funds Other Other Total Public Safety Special Special Resource Radio Road East Revenue Revenue Revenue Recovery Park Limited General Funds Funds Funds Endowment Obligation Bonds $ - $ - $ 59,538,956 $ - $ 76,379 4,936 20,591,735 - - 29,357,228 - - 693,278 430,877 18,759,523 - - 148,224 2,671,789 - - 5,120 20,918 965,413 1,448 572 2,589,754 - - 42,988 196,607 7,707,835 - - 741,386 801,562 142,182,233 1,448 76,951 145,595 20,697,755 - - 761,163 356,799 25,880,105 - - - 7,876,716 79,606 - 28,394,366 - - 6,255,031 - - 165,623 2,634,086 - - 61,488 19,780,021 - - 92,933 - 48,951 - - 14,689 - 16,128 - - - - - 2,506 10,980 251,894 31,192,321 - - 772,143 981,399 142,818,023 79,606 67,585 (30,757) (179,837) (635,790) (78,158) 9,366 27,310 - - 280,100 - - - 426,264 21,461,078 1,827,400 710 - (5,156) (11,084,651) - (2,357) - 421,108 10,683,837 1,827,400 (1,647) (30,757) 241,271 10,048,047 1,749,242 7,719 1,787,873 3,270,372 151,058,166 - 80,719 $ 1,757,116 $ 3,511,643 $ 161,106,213 $ 1,749,242 $ 88,438 105 13A COLLIER COUNTY, FLORIDA COMBINING STATEMENT OF REVENUES, EXPENDITURES AND CHANGES IN FUND BALANCES NONMAJOR GOVERNMENTAL FUNDS FOR THE FISCAL YEAR ENDED SEPTEMBER 30,2014 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 $ 34,711 $ - $ 355,801 $ - Licenses,permits and impact fees - - - - Intergovernmental - - - - Charges for services - - - - Fines and forfeitures - - - - Interest income 703 3,523 5,955 17,233 Special assessments - - - - Miscellaneous - - - 540 Total revenues 35,414 3,523 361,756 17,773 Expenditures: Current: General government 908 - 55 - Public safety - - - - Physical environment - - - - Transportation - - - - Economic environment - - - - Human services - - - - Culture and recreation - - - - Debt service: Principal - 793,503 390,000 9,145,000 Interest - 279,849 163,475 9,673,870 Payment to refunding bond escrow - - - - Fiscal charges - - 2,878 8,530 Capital outlay - - - - Total expenditures 908 1,073,352 556,408 18,827,400 Excess(deficiency)of revenues over(under)expenditures 34,506 (1,069,829) (194,652) (18,809,627) Other financing sources(uses): Bonds issued - - - - Payment to refunding bond escrow - - - - Sale of capital assets - - - - Insurance proceeds - - - - Transfers in - 1,195,347 976,843 18,990,400 Transfers out (80,324) - (11,909) - Total other financing sources(uses) (80,324) 1,195,347 964,934 18,990,400 Net change in fund balances (45,818) 125,518 770,282 180,773 Fund balances(deficits)at beginning of year 190,684 548,148 175,438 3,363,063 Fund balances(deficits)at end of year $ 144,866 $ 673,666 $ 945,720 $ 3,543,836 See accompanying independent auditor's report 106 13A 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 $ 1,456 $ 468,347 $ - $ - $ - $ - - - - 519,032 536,572 946,349 728 28,714 45,866 25,822 5,191 8,965 540 4,771 385,222 - - 2484 497,601 50,637 930,076 541,763 955,314 68 1,031 710,176 - - - 681,030 - - 6,128 - - 16,436 - - - - - 839 393,574 3,401 - 8,040,000 18,417,454 - - - - 4,017,956 14,151,278 - - - - 2,085,806 2,085,806 - - - - 158,605 172,519 - - - - 3,787,690 5,111,257 117,357 - 14,302,435 34,828,088 5,196,171 5,504,831 120,758 6,128 (14,300,251) (34,330,487) (5,145,534) (4,574,755) 421,005 949,186 89,780,000 89,780,000 - - - - (89,621,832) (89,621,832) - - - - 14,117,600 35,280,900 10,183,700 31,085 - - (3,900) (98,490) - (3,297,311) (1,162,600) (1,886,500) 14,271,868 35,340,578 10,183,700 (3,266,226) (1,162,600) (1,886,500) (28,383) 1,010,091 5,038,166 (7,840,981) (741,595) (937,314) 96,464 4,454,516 53,663,364 8,711,046 (8,937,551) (4,349,423) $ 68,081 $ 5,464,607 $ 58,701,530 $ 870,065 $ (9,679,146) $ (5,286,737) 107 COLLIER COUNTY, FLORIDA 13 A COMBINING STATEMENT OF REVENUES,EXPENDITURES AND CHANGES IN FUND BALANCES NONMAJOR GOVERNMENTAL FUNDS FOR THE FISCAL YEAR ENDED SEPTEMBER 30, 2014 Capital Projects Funds Emergency Medical Parks Road Services Water Impact impact Impact Fees Management Districts Districts Revenues: Taxes $ - $ - $ - $ - Licenses,permits and impact fees 227,632 - 5,114,586 10,062,300 Intergovernmental - - 65,015 2,699,362 Charges for services - - - - Fines and forfeitures - - - - Interest income 2,787 86,047 88,289 267,226 Special assessments - 203,659 - - Miscellaneous - 7,250 - 152,081 Total revenues 230,419 296,956 5,267,890 13,180,969 Expenditures: Current: General government - - - - Public safety 8,666 - - - Physical environment - 1,257,875 - - Transportation - - - 122,706 Economic environment - - - - Human services - - - - Culture and recreation - - 81,612 - Debt service: Principal - - - - Interest - - - - Payment to refunding bond escrow - - - - Fiscal charges - - - - Capital outlay - 3,881,309 1,550,820 6,463,272 Total expenditures 8,666 5,139,184 1,632,432 6,585,978 Excess(deficiency)of revenues over(under)expenditures 221,753 (4,842,228) 3,635,458 6,594,991 Other financing sources(uses): Bonds issued - - - - Payment to refunding bond escrow - - - - Sale of capital assets - - - - Insurance proceeds - - 1,953 - Transfers in - 6,298,843 - - Transfers out (443,900) (1,263,800) (2,940,200) - Total other financing sources(uses) (443,900) 5,035,043 (2,938,247) - Net change in fund balances (222,147) 192,815 697,211 6,594,991 Fund balances(deficits)at beginning of year (2,556,585) 13,649,603 15,411,775 39,748,581 Fund balances(deficits)at end of year $ (2,778,732) $ 13,842,418 $ 16,108,986 $ 46,343,572 See accompanying independent auditor's report 108 13A Capital Projects Funds Total Total All Terrain Other Capital Nonmajor Road Vehicle Capital Projects Governmental Construction Park Projects Funds Funds $ 12,823,363 $ - $ - $ 12,823,363 $ 72,830,666 6,054 17,412,525 38,004,260 9,535,005 - - 12,299,382 41,656,610 99,920 - - 99,920 18,859,443 - - - - 2,671,789 171,232 11,440 5,247 718,112 1,713,687 129,110 332,769 2,922,523 748,515 - - 1,297,839 9,006,214 23,378,035 11,440 140,411 44,983,910 187,665,192 - - - 710,176 21,408,962 - - 11,230 707,054 26,587,159 - - 1,311,099 2,585,410 10,541,732 10,029,564 - - 10,152,270 38,546,636 - - - 6,255,031 - - - - 2,634,086 - 699 - 480,125 20,260,146 - - - - 18,510,387 14,165,967 - - - - 2,085,806 - - - - 172,519 8,409,539 - 77,221 29,398,465 60,590,786 18,439,103 699 1,399,550 44,033,500 221,759,217 4,938,932 10,741 (1,259,139) 950,410 (34,094,025) - - - - 89,780,000 - - - - (89,621,832) - - - - 27,310 - - 1,953 282,053 8,768,800 2,965,271 1,216,750 29,464,449 88,033,827 (16,324,781) - (454,016) (27,773,108) (38,956,249) (7,555,981) 2,965,271 762,734 1,693,294 49,545,109 (2,617,049) 2,976,012 (496,405) 2,643,704 15,451,084 34,303,917 - 1,258,544 150,903,271 306,415,953 $ 31,686,868 $ 2,976,012 $ 762,139 $ 153,546,975 $ 321,867,037 109 13A 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 30,2014 Government Facilities Law Enforcement Impact Fees Impact Fees(Budgetary Basis) (Budgetary Basis)_ Budget Actual Variance Budget Actual Variance Revenues: Taxes $ - $ - $ - $ - $ - $ - Licenses,permits and impact fees 1,239,400 1,493,527 254,127 616,500 801,295 184,795 Intergovernmental - - - - - - Chargesforservices - - - - - - Fines and forfeitures - - - - - - Interest income 10,400 18,169 7,769 5,200 8,551 3,351 Special assessments - - - - - - Miscellaneous - 5,940 5,940 - - - Total revenues 1,249,800 1,517,636 267,836 621,700 809,846 188,146 Expenditures: Current: General government 212,738 14,125 198,613 - - - Public safety - - - 108,230 9,738 98,492 Physical environment - - - - - - Transportation - - - - - - Economic environment - - - - - - Human services - - - - - - Culture and recreation - - - - - - Debt service 12,000 11,215 785 - - - Capital outlay 17,740 7,690 10,050 223,000 9,015 213,985 Total expenditures 242,478 33,030 209,448 331,230 18,753 312,477 Excess(deficit)of revenues over(under)expenditures 1,007,322 1,484,606 477,284 290,470 791,093 500,623 Other financing sources(uses): Bonds issued - - - - - - Premiums on bonds issued - - - - - - Payment to refunding bond escrow - - - - - - Sale of capital assets - - - - - - Insurance proceeds - - - - - - Transfers in 3,094,400 3,094,400 - 1,755,500 1,755,500 - Transfers out (4,984,500) (4,984,500) - (2,649,000) (2,649,000) - Total other financing sources(uses) (1,890,100) (1,890,100) - (893,500) (893,500) - Net change in fund balances (882,778) (405,494) 477,284 (603,030) (102,407) 500,623 Fund balances at beginning of year 3,606,478 3,606,478 - 946,630 946,630 - Fund balances(deficits)at end of year $ 2,723,700 $ 3,200,984 $ 477,284 $ 343,600 $ 844,223 $ 500,623 See accompanying independent auditor's report Reconciliation: Net change in fund balance,budgetary basis $ (405,494) $ (102,407) Change in fair value of investments 2,094 1,042 Ad valorem refunds not budgeted - (1,755,500) Change in inventory held for resale - - Advances budgeted as transfers (2,464,400) - Unbudgeted funds - - Net change in fund balance,GAAP basis $ (2,867,800) $ (1,856,865) 110 13A Road Districts Unincorporated Area MSTD (Budgetary Basis) (Budgetary Basis) _ Budget Actual Variance Budget Actual Variance $ - $ - $ - $ 31,842,300 $ 31,298,754 $ (543,546) 345,000 422,625 77,625 192,000 237,587 45,587 1,542,200 1,552,305 10,105 - - - 238,000 325,066 87,066 2,807,689 2,812,739 5,050 355,000 466,800 111,800 8,100 20,200 12,100 50,000 76,741 26,741 30,900 63,971 33,071 164,500 214,437 49,937 2,164,200 2,384,167 219,967 35,411,489 35,107,058 (304,431) - - 6,267,375 5,719,482 547,893 - - - 4,173,425 3,938,627 234,798 - - - 720,200 597,983 122,217 15,964,359 13,837,569 2,126,790 11,612,406 10,894,347 718,059 - 92,700 81,573 11,127 - - - 11,167,573 10,308,827 858,746 2,246,198 2,216,666 29,532 97,711 75,493 22,218 18,210,557 16,054,235 2,156,322 34,131,390 31,616,332 2,515,058 (16,046,357) (13,670,068) 2,376,289 1,280,099 3,490,726 2,210,627 10,200 10,200 - - - 119,500 197,809 78,309 23,302 49,830 26,528 15,762,600 15,762,600 - 817,900 887,798 69,898 (1,189,300) (1,189,300) - (3,929,376) (3,607,618) 321,758 14,692,800 14,781,309 88,509 (3,088,174) (2,669,990) 418,184 (1,353,557) 1,111,241 2,464,798 (1,808,075) 820,736 2,628,811 1,556,357 1,556,357 - 5,268,996 5,268,996 - $ 202,800 $ 2 667 598 $ 2,464,798 $® $ 2,628,811■ $ 1,111,241 $ 820,736 1,616 8,988 (3,984) $ 1,112,857 $ 825,740 111 13A 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 30,2014 Community Development Water Management and (Budgetary Basis) Pollution Control(Budgetary Basis) Budget Actual Variance Budget Actual Variance Revenues: Taxes $ - $ - $ - $ 1,779,200 $ 1,721,652 $ (57,548) Licenses,permits and impact fees 10,973,300 19,925,687 8,952,387 200 900 700 Intergovernmental - - - - - - Charges for services 2,195,800 3,016,207 820,407 355,000 323,516 (31,484) Fines and forfeitures - - - - -Interest income 22,700 102,400 79,700 21,600 17,622 (3,978) Special assessments - - - 2,689,600 2,589,754 (99,846) Miscellaneous 8,900 67,576 58,676 - - - Total revenues 13,200,700 23,111,870 9,911,170 4,845,600 4,653,444 (192,156) Expenditures: Current: General government 4,959,843 4,132,710 827,133 - - - Public safety 10,616,095 9,207,836 1,408,259 - - - Physical environment 639,600 576,017 63,583 3,074,156 2,629,911 444,245 Transportation - - - 1,730,100 1,670,010 60,090 Economic environment - - - - - Human services - - - - - - Culture and recreation - - - - - - Debt service - - - - - - Capital outlay 491,500 487,068 4,432 61,244 56,878 4,366 Total expenditures 16,707,038 14,403,631 2,303,407 4,865,500 4,356,799 508,701 Excess(deficit)of revenues over(under)expenditures (3,506,338) 8,708,239 12,214,577 (19,900) 296,645 316,545 Other financing sources(uses): Bonds issued - - - - - - Premiums on bonds issued - - - - - - Payment to refunding bond escrow - - - - - - Sale of capital assets - 12,045 12,045 - - - Insurance proceeds - 195 195 - 1,506 1,506 Transfers in 902,600 900,290 (2,310) - 38,853 38,853 Transfers out (1,127,300) (1,127,300) - (462,000) (399,310) 62,690 Total other financing sources(uses) (224,700) (214,770) 9,930 (462,000) (358,951) 103,049 Net change in fund balances (3,731,038) 8,493,469 12,224,507 (481,900) (62,306) 419,594 Fund balances at beginning of year 9,632,838 9,632,838 - 2,104,700 2,104,700 - Fund balances(deficits)at end of year $ 5,901,800 $ 18,126,307 $ 12,224,507 $ 1,622,800 $ 2,042,394 $ 419,594 See accompanying independent auditor's report Reconciliation: Net change in fund balance,budgetary basis $ 8,493,469 $ (62,306) Change in fair value of investments 10,457 2,294 Ad valorem refunds not budgeted 400,000 (328) Change in inventory held for resale - - Advances budgeted as transfers - _ Unbudgeted funds - - Net change in fund balance,GAAP basis $ 8,903,926 $ (60,340) 112 13A Grants and Shared Revenues Improvement Districts (Budgetary Basis) (Budgetary Basis) Budget Actual Variance Budget Actual Variance $ - $ - $ - $ 3,450,500 $ 3,331,986 $ (118,514) 62,966,655 17,977,537 (44,989,118) - - - 556,809 432,901 (123,908) 235,100 218,848 (16,252) 17,501 17,501 25,700 93,239 67,539 958,376 1,131,212 172,836 700,000 772,910 72,910 64,481,840 19,559,151 (44,922,689) 4,411,300 4,416,983 5,683 2,454,425 748,332 1,706,093 - - - 2,370,694 369,028 2,001,666 - - - 116,863 87,406 29,457 5,952,733 721,732 5,231,001 2,020,454 93,336 1,927,118 2,144,867 1,019,533 1,125,334 16,527,373 4,444,453 12,082,920 - - - 4,933,581 2,462,836 2,470,745 - - - 760,457 96,060 664,397 949,800 844,038 105,762 48,408,017 10,427,353 37,980,664 9,952,025 4,257,508 5,694,517 77,591,864 18,728,804 58,863,060 18,999,425 6,842,811 12,156,614 (13,110,024) 830,347 13,940,371 (14,588,125) (2,425,828) 12,162,297 52,798 - (52,798) - - - - 29,654 29,654 9,140,226 632,984 (8,507,242) 376,300 407,119 30,819 (565,707) (491,574) 74,133 (1,517,300) (1,495,727) 21,573 8,627,317 141,410 (8,485,907) (1,141,000) (1,058,954) 82,046 (4,482,707) 971,757 5,454,464 (15,729,125) (3,484,782) 12,244,343 12,012,091 12,012,091 - 16,491,025 16,491,025 - $ 7,529,384 $ 12,983,848 $ 5,454,464 $ 761,900 $ 13,006,243 $ 12,244,343 $ 971,757 $ (3,484,782) 2,221 11,916 (4,655) (1,377,538) - (3,895,475) - $ (4,299,035) 1____(.3,,477,521) 113 COLLIER COUNTY,FLORIDA 1 3 A 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 30,2014 Fire Control Districts(Budgetary Basis) Lighting Districts(Budgetary Basis) Budget Actual Variance Budget Actual Variance Revenues: Taxes $ 2,655,000 $ 2,591,903 $ (63,097) $ 1,090,800 $ 1,051,609 $ (39,191) Licenses,permits and impact fees - - - - - Intergovernmental - 10,567 10,567 - - - Charges for services 10,200 9,775 (425) - - - Fines and forfeitures - - - - - - Interest income 4,000 5,120 1,120 9,200 5,171 (4,029) Special assessments - - - - - - Miscellaneous 6,039 4,218 (1,821) - 15,986 15,986 Total revenues 2,675,239 2,621,583 (53,656) 1,100,000 1,072,766 (27,234) Expenditures: Current: General government - - - - - - Public safety 3,282,500 3,092,117 190,383 - - - Physical environment - - - - - - Transportation - - - 889,500 875,820 13,680 Economic environment - - - - - Human services - - - - - - Culture and recreation - - - - - Debt service 110,000 107,622 2,378 - - - Capital outlay 87,639 84,738 2,901 1,000 1,000 -, Total expenditures 3,480,139 3,284,477 195,662 890,500 876,820 13,680 Excess(deficit)of revenues over(under)expenditures (804,900) (662,894) 142,006 209,500 195,946 (13,554) Other financing sources(uses): Bonds issued - - - - - - Premiums on bonds issued - - - - - - Payment to refunding bond escrow - - - - - Sale of capital assets - 4,815 4,815 - - - Insurance proceeds - - - - - - Transfers in 742,600 616,460 (126,140) - 8,644 8,644 Transfers out (226,900) (205,261) 21,639 (43,400) (26,771) 16,629 Total other financing sources(uses) 515,700 416,014 (99,686) (43,400) (18,127) 25,273 Net change in fund balances (289,200) (246,880) 42,320 166,100 177,819 11,719 Fund balances at beginning of year 386,029 386,029 - 628,400 628,400 - Fund balances(deficits)at end of year $ 139,149 $ $ 794,500 $ $ 11,719 See accompanying independent auditor's report Reconciliation: Net change in fund balance,budgetary basis $ (246,880) $ 177,819 Change in fair value of investments 675 606 Ad valorem refunds not budgeted (970) (113) Change in inventory held for resale - - Advances budgeted as transfers - - Unbudgeted funds - - Net change in fund balance,GAAP basis $ (247,175) $ 178,312 114 13A Tourist Development 911 Enhancement Fee(Budgetary Basis) (Budgetary Basis) Budget Actual Variance Budget Actual Variance $ - $ - $ - $ 15,498,700 $ 19,136,960 $ 3,638,260 1,825,500 1,766,357 (59,143) - 5,906,503 5,906,503 - 484,941 484,941 16,400 21,347 4,947 205,600 222,002 16,402 92,500 2,225,719 2,133,219 - 1,841,900 1,787,704 (54,196) 15,796,800 27,976,125 12,179,325 3,268,947 1,618,703 1,650,244 - - - - 3,078,147 2,012,906 1,065,241 11,376,591 8,469,600 2,906,991 - 120,000 - 120,000 16,070,193 10,464,543 5,605,650 3,388,947 1,618,703 1,770,244 30,524,931 20,947,049 9,577,882 (1,547,047) 169,001 1,716,048 (14,728,131) 7,029,076 21,757,207 1,319,000 1,917,503 598,503 - (1,734,700) (2,386,414) (651,714) - - - - - (415,700) (468,911) (53,211) (1,547,047) 169,001 1,716,048 (15,143,831) 6,560,165 21,703,996 3,889,347 3,889,347 - 44,384,356 44,384,356 - $ 2,342,300 $ 4,058,348 $ 1,716,048 $ 29,240,525 $ 50,944,521 $ 21,703,996 $ 169,001 $ 6,560,165 2,628 28,530 $ 171,629 $ 6,588,695 115 COLLIER COUNTY,FLORIDA 13 A 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 30,2014 State Housing Initiativeship 800 MHZ IRCP Fund Partnership(Budgetary Basis) (Budgetary Basis) Budget Actual Variance Budget Actual Variance Revenues: Taxes $ - $ - $ - $ - $ - $ - Licenses,permits and impact fees - - - - - - Intergovernmental 2,874,918 1,301,657 (1,573,261) - - - Chargesforservices - - - 431,000 420,321 (10,679) Fines and forfeitures - - - - -Interest income 22,299 7,642 (14,657) 200 509 309 Special assessments - - - - - - Miscellaneous 279,939 980,269 700,330 127,000 161,675 34,675 Total revenues 3,177,156 2,289,568 (887,588) 558,200 582,505 24,305 Expenditures: Current: General government - - - - - - Public safety - - - 1,175,586 1,170,528 5,058 Physical environment - - - - - - Transportation - - - - - Economic environment 3,177,756 297,678 2,880,078 - - - Human services - - - - - - Culture and recreation - - - - - - Debt service - - - - - - Capital outlay - - - 28,114 28,364 (250) Total expenditures 3,177,756 297,678 2,880,078 1,203,700 1,198,892 4,808 Excess(deficit)of revenues over(under)expenditures (600) 1,991,890 1,992,490 (645,500) (616,387) 29,113 Other financing sources(uses): Bonds issued - - - - - - Premiums on bonds issued - - - - - - Payment to refunding bond escrow - - - - - - Sale of capital assets - - - - 250 250 Insurance proceeds - - - - -Transfers in 600 600 - 576,400 576,400 - Transfers out (600) (600) - - - - Total other financing sources(uses) - - - 576,400 576,650 250 Net change in fund balances (600) 1,991,890 1,992,490 (69,100) (39,737) 29,363 Fund balances at beginning of year 77,342 77,342 - 90,800 90,800 - Fund balances(deficits)at end of year $ 76,742 $ 2,069,232 $ 1,992,490 $ 21,700 $ 51,063 $ 29,363 See accompanying independent auditor's report Reconciliation: Net change in fund balance,budgetary basis $ 1,991,890 $ (39,737) Change in fair value of investments 835 21 Ad valorem refunds not budgeted - - Change in inventory held for resale 40,000 - Advances budgeted as transfers - - Unbudgeted funds - - Net change in fund balance,GAAP basis $ 2,032,725 $ (39,716) 116 13A State Court Administration Confiscated Property (Budgetary Basis) (Budgetary Basis) Budget Actual Variance Budget Actual Variance $ - $ - $ - $ - $ - $ - 145,000 155,835 10,835 - - - 1,013,000 935,695 (77,305) 75,630 107,752 32,122 1,900 1,383 (517) 1,100 2,196 1,096 - 7,469 7,469 - - - 1,159,900 1,100,382 (59,518) 76,730 109,948 33,218 879,100 844,638 34,462 - - - 1,553,100 1,481,142 71,958 77,000 77,000 - 5,000 - 5,000 - - - 2,437,200 2,325,780 111,420 77,000 77,000 - (1,277,300) (1,225,398) 51,902 (270) 32,948 33,218 1,356,800 1,361,956 5,156 - - - (132,600) (132,600) - (181,900) (42,586) 139,314 1,224,200 1,229,356 5,156 (181,900) (42,586) 139,314 (53,100) 3,958 57,058 (182,170) (9,638) 172,532 78,900 78,900 - 227,900 227,900 - $ 25,800 $ 82,858 $ 57,058 $ 45,730 $ 218,262 $ 172,532 $ 3,958 $ (9,638) 137 266 $ 4,095 $ (9,372) 117 13A 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 30,2014 GAC Land Sales, Utility Fee Roads and Canals(Budgetary Basis) (Budgetary Basis) Budget Actual Variance Budget Actual Variance Revenues: Taxes $ - $ - $ - $ 230,000 $ 373,941 $ 143,941 Licenses,permits and impact fees - - - - - - Intergovernmental - - - - - - Charges for services - - - 130,000 37,119 (92,881) Fines and forfeitures - - - - - - Interest income 5,700 5,439 (261) - 5,239 5,239 Special assessments - - - - - - Miscellaneous 16,500 229,733 213,233 - - - Total revenues 22,200 235,172 212,972 360,000 416,299 56,299 Expenditures: Current: General government - - - - - - Public safety - - - - - Physical environment - - - 422,435 355,861 66,574 Transportation 400 - 400 - - - Economicenvironment - - - - - - Human services - - - - - - Culture and recreation 212,700 - 212,700 - - - Debt service - - - - - - Capital outlay - - - - - - Total expenditures 213,100 - 213,100 422,435 355,861 66,574 Excess(deficit)of revenues over(under)expenditures (190,900) 235,172 426,072 (62,435) 60,438 122,873 Other financing sources(uses): Bonds issued - - - - - - Premiums on bonds issued - - - - - - Payment to refunding bond escrow - - - - - - Sale of capital assets - - - - - - Insurance proceeds - - - - - - Transfers in - - - 100,000 100,000 - Transfers out - - - - - - Total other financing sources(uses) - - - 100,000 100,000 - Net change in fund balances (190,900) 235,172 426,072 37,565 160,438 122,873 Fund balances at beginning of year 1,099,500 1,099,500 - 943,435 943,435 - Fund balances(deficits)at end of year $ 908,600 $ 1,334,672 $ 426,072 $ 981,000 $ 1,103,873 $ 122,873■ See accompanying independent auditor's report Reconciliation: Net change in fund balance,budgetary basis $ 235,172 $ 160,438 Change in fair value of investments 694 623 Ad valorem refunds not budgeted - - Change in inventory held for resale - - Advances budgeted as transfers - - Unbudgeted funds - - Net change in fund balance,GAAP basis $ 235,866 $ 161,061 118 13A Conservation Collier Court Information Technology (Budgetary Basis) (Budgetary Basis) Budget Actual Variance Budget _ Actual Variance $ - $ 32,151 $ 32,151 $ 750,000 $ 770,294 $ 20,294 - 720 720 - - - 187,100 178,565 (8,535) 3,000 4,962 1,962 5,200 1,534,560 1,529,360 - - - 192,300 1,745,996 1,553,696 753,000 775,256 22,256 734,855 616,346 118,509 - - - 33,700 26,344 7,356 1,696,159 868,984 827,175 - - - 5,700 5,627 73 - - - 2,187,748 1,674,516 513,232 109,445 93,120 16,325 3,883,907 2,543,500 1,340,407 883,700 741,437 142,263 (3,691,607) (797,504) 2,894,103 (130,700) 33,819 164,519 1,106 1,106 - - - 5,557,100 4,765,433 (791,667) - - - (6,854,700) (6,645,934) 208,766 - - - (1,297,600) (1,879,395) (581,795) - - - (4,989,207) (2,676,899) 2,312,308 (130,700) 33,819 164,519 35,002,607 35,002,607 - 627,100 627,100 - $ 30,013,400 $ 32,325,708 $ 2,312,308 X919 $ 164 519 $ (2,676,899) $ 33,819 23,242 569 (1,380) - $ (2,655,037) $ 34,388 119 13A 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 30,2014 Court Services University Extension(Budgetary Basis) Budget Actual Variance Budget Actual Variance Revenues: Taxes $ - $ - $ - $ - $ - $ - Licenses,permits and impact fees - - - - - - Intergovernmental - - - - - - Charges for services 7,964,538 7,221,719 (742,819) 13,700 11,278 (2,422) Fines and forfeitures - - - - -Interest income 8,200 8,216 16 - 534 534 Special assessments - - - - - - Miscellaneous - - - - 18,505 18,505 Total revenues 7,972,738 7,229,935 (742,803) 13,700 30,317 16,617 Expenditures: Current: General government 7,972,738 7,229,935 742,803 - - - Public safety - - - - - - Physical environment - - - 46,400 23,199 23,201 Transportation - - - - - - Economic environment - - - - - - Human services - - - - - - Culture and recreation - - - - - - Debt service - - - - - - Capital outlay - - - - - - Total expenditures 7,972,738 7,229,935 742,803 46,400 23,199 23,201 Excess(deficit)of revenues over(under)expenditures - - - (32,700) 7,118 39,818 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 - - - (32,700) 7,118 39,818 Fund balances at beginning of year - - - 72.800 72,800 - Fund balances(deficits)at end of year $ - $ - $ - $ 40,100 $ 79,918 $ 39,818 See accompanying independent auditor's report Reconciliation: Net change in fund balance,budgetary basis $ - $ 7,118 Change in fair value of investments - 66 Ad valorem refunds not budgeted - - Change in inventory held for resale - - Advances budgeted as transfers - - Unbudgeted funds - - Net change in fund balance,GAAP basis $ - $ 7,184 120 13A Court Facilities Fee (Budgetary Basis) Affordable Housing(Budgetary Basis) Budget Actual Variance Budget Actual Variance $ - $ - $ - $ - $ - $ 1,090,000 1,013,318 (76,682) - - - 15,000 27,990 12,990 3,000 797 (2,203) 1,105,000 1,041,308 (63,692) 3,000 797 (2,203) 3,700 265 3,435 - - - - - - 189,000 53,789 135,211 383,682 140,992 242,690 - - - 387,382 141,257 246,125 189,000 53,789 135,211 717,618 900,051 182,433 (186,000) (52,992) 133,008 717,618 900,051 182,433 (186,000) (52,992) 133,008 5,162,505 5,162,505 - 186,200 186,200 - $ 5,880,123 $ 6,062,556 $ 182,433 $ 200 $ 133,208 $ 133,008 $ 900,051 $ (52,992) 3,282 121 $ 903,333 $ (52,871) 121 13A 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 30,2014 Other Special Other Court Special Revenue Funds Revenue Funds(Budgetary Basis) Budget Actual Variance Budget Actual Variance Revenues: Taxes $ - $ - $ - $ - $ - $ - Licenses,permits and impact fees - - - 4,500 4,936 436 Intergovernmental - - - - - - Charges for services 1,425,000 1,394,089 (30,911) 441,900 430,877 (11,023) Fines and forfeitures - - - 156,000 148,224 (7,776) Interest income 2,500 8,331 5,831 13,100 18,539 5,439 Special assessments - - - - - - Miscellaneous - - - 133,200 196,607 63,407 Total revenues 1,427,500 1,402,420 (25,080) 748,700 799,183 50,483 Expenditures: Current: General government 2,435,900 1,214,099 1,221,801 216,300 145,595 70,705 Public safety - - - 1,077,800 356,799 721,001 Physical environment - - - - - - Transportation - - - - - - Economic environment - - - - - - Human services - - - 182,356 165,623 16,733 Culture and recreation - - - 110,100 61,488 48,612 Debt service - - - - - - Capital outlay 432,600 - 432,600 339,400 251,894 87,506 Total expenditures 2,868,500 1,214,099 1,654,401 1,925,956 981,399 944,557 Excess(deficit)of revenues over(under)expenditures (1,441,000) 188,321 1,629,321 (1,177,256) (182,216) 995,040 Other financing sources(uses): Bonds issued - - - - - - Premiums on bonds issued - - - - - - Payment to refunding bond escrow - - - - - - Sale of capital assets - - - - - - Insurance proceeds - - - - - - Transfers in - - - 428,600 426,264 (2,336) Transfers out - - - - (5,156) (5,156) Total other financing sources(uses) - - - 428,600 421,108 (7,492) Net change in fund balances (1,441,000) 188,321 1,629,321 (748,656) 238,892 987,548 Fund balances at beginning of year 4,180,743 4,180,743 - 2,993,700 2,993,700 - Fund balances(deficits)at end of year $ 2 739 743 $ 4,369,064 $ 1,629,321 $ 2,245,044 $ 3,232,592 $ 987,548 See accompanying independent auditor's report Reconciliation: Net change in fund balance,budgetary basis $ 188,321 $ 238,892 Change in fair value of investments - 2,379 Ad valorem refunds not budgeted - - Change in inventory held for resale - - Advances budgeted as transfers - - Unbudgeted funds - - Net change in fund balance,GAAP basis $ 188,321 $ 241,271 122 13A Resource Recovery Park Radio Road East Limited General Endowment(Budgetary Basis) Obligation Bonds(Budgetary Basis) Budget Actual Variance Budget Actual Variance $ - $ - $ - $ 79,100 $ 76,379 $ (2,721) 10,400 1,309 (9,091) - 238 238 10,400 1,309 (9,091) 79,100 76,617 (2,483) 100,100 79,606 20,494 - - - 71,000 67,585 3,415 100,100 79,606 20,494 71,000 67,585 3,415 (89,700) (78,297) 11,403 8,100 9,032 932 1,827,400 1,827,400 - - 710 710 - (3,900) (2,357) 1,543 1,827,400 1,827,400 - (3,900) (1,647) 2,253 1,737,700 1,749,103 11,403 4,200 7,385 3,185 75,300 75,300 - $ 1,737,700 $ 1,749,103 $ 11,403 $ 79,500 $ 82,685 $ 3,185 $ 1,749,103 $ 7,385 139 334 $ 1,749,242 $ 7,719 123 COLLIER COUNTY,FLORIDA 1 3 A 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 30,2014 Conservation Collier Limited General Community Redevelopment Obligation Bonds(Budgetary Basis) Taxable Note(Budgetary Basis) Budget Actual Variance Budget Actual Variance Revenues: Taxes $ - $ 34,711 $ 34,711 $ - $ - $ - Licenses,permits and impact fees - - - - - - Intergovernmental - - - - - - Charges for services - - - - - - Fines and forfeitures - - - - - - Interest income - 617 617 4,100 3,245 (855) Special assessments - - - - - - Miscellaneous - - - - - - Total revenues - 35,328 35,328 4,100 3,245 (855) Expenditures: Current: General government - - - - - - Public safety - - - - - - Physical environment - - - - - - Transportation - - - - - - Economic environment - - - - - - Human services - - - - - - Culture and recreation - - - - - - Debt service - - - 1,119,700 1,073,352 46,348 Capital outlay - - - - - - Total expenditures - - - 1,119,700 1,073,352 46,348 Excess(deficit)of revenues over(under)expenditures - 35,328 35,328 (1,115,600) (1,070,107) 45,493 Other financing sources(uses): Bonds issued - - - - - - Premiums on bonds issued - - - - - Payment to refunding bond escrow - - - - - - Sale of capital assets - - - - - - Insurance proceeds - - - - - - Transfers in - - - 1,195,400 1,195,347 (53) Transfers out (110,900) (80,324) 30,576 - - - Total other financing sources(uses) (110,900) (80,324) 30,576 1,195,400 1,195,347 (53) Net change in fund balances (110,900) (44,996) 65,904 79,800 125,240 45,440 Fund balances at beginning of year 110,900 110,900 - 545,600 545,600 - Fund balances(deficits)at end of year $ - $ 65,904 $ 65,904 $ 625,400 $ 670,840 $ 45,440 See accompanying independent auditor's report Reconciliation: Net change in fund balance,budgetary basis $ (44,996) $ 125,240 Change in fair value of investments 86 278 Ad valorem refunds not budgeted (908) - Change in inventory held for resale - - Advances budgeted as transfers - - Unbudgeted funds - - Net change in fund balance,GAAP basis $ (45,818) $ 125,518 124 13A Forest Lakes Limited General Special Obligation Obligation Bonds(Budgetary Basis) Revenue Bonds(Budgetary Basis) Budget Actual Variance Budget Actual Variance $ 369,200 $ 355,801 $ (13,399) $ - $ - $ - 1,000 5,222 4,222 - 15,682 15,682 - - 540 540 370,200 361,023 (9,177) - 16,222 16,222 558,000 556,353 1,647 18,851,000 18,827,400 23,600 558,000 556,353 1,647 18,851,000 18,827,400 23,600 (187,800) (195,330) (7,530) (18,851,000) (18,811,178) 39,822 973,200 976,843 3,643 18,990,400 18,990,400 - (15,700) (11,909) 3,791 - - - 957,500 964,934 7,434 18,990,400 18,990,400 - 769,700 769,604 (96) 139,400 179,222 39,822 159,400 159,400 - 203,600 203,600 - $ 929,100 $ 929,004 $ (96) $ 343,000 $ 382,822 $ 39,822 $ 769,604 $ 179,222 733 1,551 (55) - $ 770,282 $ 180,773 125 COLLIER COUNTY,FLORIDA 1 3 A 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 30,2014 County-Wide Capital Improvememts Other Debt Service(Budgetary Basis) (Budgetary Basis) Budget Actual Variance Budget Actual Variance Revenues: Taxes $ 1,000 $ 1,456 $ 456 $ - $ - $ - Licenses,permits and impact fees - - - - - - Intergovernmental - - - - - - Charges for services - - - - - - Fines and forfeitures - - - - - - Interest income 1,300 683 (617) 25,000 41,046 16,046 Special assessments - - - - - - Miscellaneous - - - - 4,771 4,771 Total revenues 2,300 2,139 (161) 25,000 45,817 20,817 Expenditures: Current: General government - - - 1,110,236 710,176 400,060 Public safety - - - 781,875 681,030 100,845 Physical environment - - - 98,638 16,436 82,202 Transportation - - - - - - Economic environment - - - - - - Human services - - - - - - Culture and recreation - - - - 839 (839) Debt service 14,343,900 14,302,367 41,533 - - - Capital outlay - - - 9,903,619 3,787,690 6,115,929 Total expenditures 14,343,900 14,302,367 41,533 11,894,368 5,196,171 6,698,197 Excess(deficit)of revenues over(under)expenditures (14,341,600) (14,300,228) 41,372 (11,869,368) (5,150,354) 6,719,014 Other financing sources(uses): Bonds issued 89,795,000 89,780,000 (15,000) - - - Premiums on bonds issued - - - - - - Payment to refunding bond escrow (89,621,700) (89,621,832) (132) - - - Sale of capital assets - - - - - - Insurance proceeds - - - - - - Transfers in 14,117,600 14,117,600 - 11,683,700 10,183,700 (1,500,000) Transfers out (3,900) (3,900) - (4,342,300) - 4,342,300 Total other financing sources(uses) 14,287,000 14,271,868 (15,132) 7,341,400 10,183,700 2,842,300 Net change in fund balances (54,600) (28,360) 26,240 (4,527,968) 5,033,346 9,561,314 Fund balances at beginning of year 54,700 54,700 - 8,058,726 8,058,726 - Fund balances(deficits)at end of year $ 100 $ 26,340 $ 26,240 $ 3,530,758 $ 13,092,072 $ 9,561,314 See accompanying independent auditor's report Reconciliation: Net change in fund balance,budgetary basis $ (28,360) $ 5,033,346 Change in fair value of investments 45 4,820 Ad valorem refunds not budgeted (68) - Changeininventory held for resale - - Advances budgeted as transfers - - Unbudgeted funds - - Net change in fund balance,GAAP basis $ (28,383) $ 5,038,166 126 13A Parks Improvements County-Wide Library (Budgetary Basis) Impact Fees(Budgetary Basis) Budget Actual Variance Budget Actual Variance $ - $ - $ - $ - $ - $ 412,000 519,032 107,032 525,300 536,572 11,272 37,900 20,438 (17,462) 4,000 4,616 616 1,280,615 385,222 (895,393) - - - 1,730,515 924,692 (805,823) 529,300 541,188 11,888 618,278 393,574 224,704 100,523 3,401 97,122 6,622,604 5,111,257 1,511,347 117,873 117,357 516 7,240,882 5,504,831 1,736,051 218,396 120,758 97,638 (5,510,367) (4,580,139) 930,228 310,904 420,430 109,526 400,000 431,085 31,085 552,300 552,300 - (3,299,070) (3,297,311) 1,759 (1,162,600) (1,162,600) - (2,899,070) (2,866,226) 32,844 (610,300) (610,300) - (8,409,437) (7,446,365) 963,072 (299,396) (189,870) 109,526 9,012,832 9,012,832 - 712,896 712,896 - $ 603,395 $ 1,566,467 $ 963,072 $ 413,500 $ 523,026 $ 109,526 $ (7,446,365) $ (189,870) 5,384 575 (400,000) (552,300) $ (7,840,981) $ (741,595) 127 COLLIER COUNTY,FLORIDA 13 A 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 30,2014 Correctional Facilities Emergency Medical Services Impact Fees(Budgetary Basis) Impact Fees(Budgetary Basis) Budget Actual Variance Budget Actual Variance Revenues: Taxes $ - $ - $ - $ - $ - $ - Licenses,permits and impact fees 835,600 946,349 110,749 199,700 227,632 27,932 Intergovernmental - - - - - - Charges for services - - - - - - Fines and forfeitures - - - - - - Interest income 5,200 8,199 2,999 1,400 2,498 1,098 Special assessments - - - - - - Miscellaneous - - - - - - Total revenues 840,800 954,548 113,748 201,100 230,130 29,030 Expenditures: Current: General government - - - - - - Public safety 191,373 6,128 185,245 43,082 8,666 34,416 Physical environment - - - - - - Transportation - - - - - - Economic environment - - - - - - Human services - - - - - - Culture and recreation - - - - - - Debt service - - - - - - Capital outlay - - - 101,503 - 101,503 Total expenditures 191,373 6,128 185,245 144,585 8,666 135,919 Excess(deficit)of revenues over(under)expenditures 649,427 948,420 298,993 56,515 221,464 164,949 Other financing sources(uses): Bonds issued - - - - - - Premiums on bonds issued - - - - - - Payment to refunding bond escrow - - - - - - Sale of capital assets - - - - - - Insurance proceeds - - - - - - Transfers in 1,102,600 1,102,600 - 167,500 167,500 - Transfers out (1,886,500) (1,886,500) - (443,900) (443,900) - Total other financing sources(uses) (783,900) (783,900) - (276,400) (276,400) - Net change in fund balances (134,473) 164,520 298,993 (219,885) (54,936) 164,949 Fund balances at beginning of year 1,528,273 1,528,273 - 430,585 430,585 - Fund balances(deficits)at end of year $ 1,393,800 $ 1,692,793 $ 298,993 $ 210,700 $ 375,649 $ 164,949 See accompanying independent auditor's report Reconciliation: Net change in fund balance,budgetary basis $ 164,520 $ (54,936) Change in fair value of investments 766 289 Ad valorem refunds not budgeted (1,102,600) (167,500) Change in inventory held for resale - - Advances budgeted as transfers - - Unbudgeted funds -Net change in fund balance,GAAP basis $ (937,314) $ (222,147) 128 13A Water Management Parks Impact Districts (Budgetary Basis) (Budgetary Basis) Budget Actual Variance Budget Actual Variance $ - $ - $ - $ - $ - $ - 4,906,200 5,114,586 208,386 - 117,600 65,015 (52,585) 60,800 76,757 15,957 39,800 79,372 39,572 209,100 203,659 (5,441) - - - - 7,250 7,250 - - - 269,900 287,666 17,766 5,063,600 5,258,973 195,373 2,904,211 1,257,875 1,646,336 - - - 458,671 81,612 377,059 15,907,416 3,881,309 12,026,107 6,042,887 1,550,820 4,492,067 18,811,627 5,139,184 13,672,443 6,501,558 _ 1,632,432 4,869,126 (18,541,727) (4,851,518) 13,690,209 (1,437,958) 3,626,541 5,064,499 - 1,953 1,953 6,240,100 6,298,843 58,743 - - - (1,423,304) (1,263,800) 159,504 (2,940,200) (2,940,200) - 4,816,796 5,035,043 218,247 (2,940,200) (2,938,247) 1,953 (13,724,931) 183,525 13,908,456 (4,378,158) 688,294 5,066,452 13,771,431 13,771,431 - 14,180,535 14,180,535 - $ 46,500 $ 13,954,956 $ 13,908,456 $ 9,802,377 $ 14,868,829 $ 5,066,452 $ 183,525 $ 688,294 9,290 8,917 $ 192,815 $ 697,211 129 13A 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 30,2014 Road Impact Districts Road Construction (Budgetary Basis) (Budgetary Basis) Budget Actual Variance Budget Actual Variance Revenues: Taxes $ - $ - $ - $ 13,173,800 $ 12,823,363 $ (350,437) Licenses,permits and impact fees 5,596,200 10,062,300 4,466,100 - - - Intergovernmental 3,300,000 2,699,362 (600,638) 10,326,200 9,535,005 (791,195) Charges for services - - - 6,400 99,920 93,520 Fines and forfeitures - - - - - - Interest income 172,000 238,034 66,034 152,000 151,783 (217) Special assessments - - - - - - Miscellaneous 150,000 152,081 2,081 842,681 748,515 (94,166) Total revenues 9,218,200 13,151,777 3,933,577 24,501,081 23,358,586 (1,142,495) Expenditures: Current: General government - - - - - - Public safety - - - - - - Physical environment - - - - - - Transportation 4,154,982 122,706 4,032,276 11,596,568 10,029,564 1,567,004 Economic environment - - - - - - Human services - - - _ - - Culture and recreation - - - - - - Debt service - - - - - - Capital outlay 25,478,511 6,463,272 19,015,239 33,290,805 8,409,539 24,881,266 Total expenditures 29,633,493 6,585,978 23,047,515 44,887,373 18,439,103 26,448,270 Excess(deficit)of revenues over(under)expenditures (20,415,293) 6,565,799 26,981,092 (20,386,292) 4,919,483 25,305,775 Other financing sources(uses): Bonds issued - - - - - - Premiums on bonds issued - - - - - Payment to refunding bond escrow - - - - - - Sale of capital assets - - - - - - Insurance proceeds - - - - - - Transfers in - - - 11,424,600 11,424,600 - Transfers out (4,873,930) - 4,873,930 (22,721,418) (18,980,581) 3,740,837 Total other financing sources(uses) (4,873,930) - 4,873,930 (11,296,818) (7,555,981) 3,740,837 Net change in fund balances (25,289,223) 6,565,799 31,855,022 (31,683,110) (2,636,498) 29,046,612 Fund balances at beginning of year 37,169,622 37,169,622 - 37,685,945 37,685,945 - Fund balances(deficits)at end of year $ 11,880,399 $ 43,735,421 $ 31,855,022 $ 6,002,835 $ 35,049,447 $ 29,046,612 See accompanying independent auditor's report Reconciliation: Net change in fund balance,budgetary basis $ 6,565,799 $ (2,636,498) Change in fair value of investments 29,192 19,449 Ad valorem refunds not budgeted - - Change in inventory held for resale - - Advances budgeted as transfers - - Unbudgeted funds - - Net change in fund balance,GAAP basis $ 6,594,991 $ (2,617,049) 130 13A All Terrain Vehicle Park Other Capital Projects (Budgetary Basis) (Budgetary Basis) Budget Actual Variance Budget Actual Variance $ - $ - $ - $ - $ - $ 2,000 6,054 4,054 - 11,101 11,101 7,200 4,715 (2,485) - - - 133,200 129,110 (4,090) - 11,101 11,101 142,400 139,879 (2,521) - - 130,125 - 130,125 - - - 15,907 11,230 4,677 - - - 1,429,353 1,311,099 118,254 - 699 (699) - - - 2,965,271 - 2,965,271 127,363 77,221 50,142 2,965,271 699 2,964,572 1,702,748 1,399,550 303,198 (2,965,271) 10,402 2,975,673 (1,560,348) (1,259,671) 300,677 2,965,271 2,965,271 - 1,215,800 1,216,750 950 - (460,900) (454,016) 6,884 2,965,271 2,965,271 - 754,900 762,734 7,834 2,975,673 2,975,673 (805,448) (496,937) 308,511 - - 1,281,693 1,281,693 - $ $ 2,975,673 $ 2,975,673 $ 476,245 $ 784,756 $ 308,511 $ 2,975,673 $ (496,937) 339 532 $ 2,976,012 $ (496,405) 131 13A THIS PAGE INTENTIONALLY LEFT BLANK 13A ' Nonmajor Enterprise Funds EMERGENCY MEDICAL SERVICES — To account for the provision of emergency ambulance and paramedical services to users throughout the County. 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 13 A COMBINING STATEMENT OF NET POSITION NONMAIOR ENTERPRISE FUNDS SEPTEMBER 30,2014 Total Emergency Collier Nonmajor Medical Airport Area Enterprise Services Authority Transit Funds ASSETS Current assets: Cash,cash equivalents and investments $ 6,218,054 $ 111,558 $ 53,010 $ 6,382,622 Receivables: Trade,net 1,459,866 39,204 149,671 1,648,741 Interest 7,910 478 719 9,107 Due from other funds - 34,680 82,080 116,760 Due from other governments 411 - - 411 Inventory 40,484 147,299 - 187,783 Prepaid costs 208,463 - - 208,463 Restricted assets: Cash,cash equivalents and investments 117,730 101,382 202,847 421,959 Due from other governments - 7,419,432 2,850,859 10,270,291 Total current assets 8,052,918 7,854,033 3,339,186 19,246,137 Noncurrent assets: Capital assets: Land and nondepreciable capital assets 228,473 1,805,421 6,576,220 8,610,114 Depreciable capital assets,net 5,596,068 33,324,536 13,764,301 52,684,905 Total noncurrent assets 5,824,541 35,129,957 20,340,521 61,295,019 Total assets 13,877,459 42,983,990 23,679,707 80,541,156 LIABILITIES Current liabilities: Accounts payable 390,594 95,185 264,133 749,912 Wages payable 1,068,741 43,835 18,281 1,130,857 Due to other funds - 4,757,417 131,604 4,889,021 Due to other governments 48 2,295 60,659 63,002 Unearned revenue - 65,450 - 65,450 Compensated absences 601,716 28,530 6,029 636,275 Capital lease obligations 235,618 - - 235,618 Liabilities payable from restricted assets: Accounts payable - 848,188 487,085 1,335,273 Retainage payable - 1,304,407 10,337 1,314,744 Refundable deposits - 16,572 - 16,572 Unearned revenue - 1,154 - 1,154 Total current liabilities 2,296,717 7,163,033 978,128 10,437,878 Noncurrent liabilities: Compensated absences 150,429 7,133 1,507 159,069 Capital lease obligations 986,387 - - 986,387 Total noncurrent liabilities 1,136,816 7,133 1,507 1,145,456 Total liabilities 3,433,533 7,170,166 979,635 11,583,334 NET POSITION Net investment in capital assets 4,602,536 32,967,926 20,271,488 57,841,950 Unrestricted 5,841,390 2,845,898 2,428,584 11,115,872 Total net position $ 10,443,926 $ 35,813,824 $ 22,700,072 $ 68,957,822 See accompanying independent auditor's report 134 COLLIER COUNTY, FLORIDA 1 3 A COMBINING STATEMENT OF REVENUES, EXPENSES AND CHANGES IN NET POSITION NON MAJOR ENTERPRISE FUNDS FOR THE FISCAL YEAR ENDED SEPTEMBER 30,2014 Total Emergency Collier Nonmajor Medical Airport Area Enterprise Services Authority Transit Funds Operating revenues: Charges for services $ 9,837,700 $ 2,580,586 $ 1,428,059 $ 13,846,345 Miscellaneous 83,941 8,039 212,715 304,695 Total operating revenues 9,921,641 2,588,625 1,640,774 14,151,040 Operating expenses: Personal services 19,028,316 821,406 312,282 20,162,004 Operating 3,645,093 1,983,335 8,490,024 14,118,452 Depreciation 850,531 931,121 1,483,791 3,265,443 Total operating expenses 23,523,940 3,735,862 10,286,097 37,545,899 Operating loss (13,602,299) (1,147,237) (8,645,323) (23,394,859) Non-operating revenues(expenses): Operating grants and contributions 628,491 - 1,748,073 2,376,564 Interest income 35,824 2,384 8,824 47,032 Insurance reimbursement 13,294 - 23,497 36,791 Interest expense (1,925) - - (1,925) Gain(loss)on disposal of capital assets 338,077 (49,037) (560) 288,480 Total non-operating revenues(expenses) 1,013,761 (46,653) 1,779,834 2,746,942 Loss before contributions and transfers (12,588,538) (1,193,890) (6,865,489) (20,647,917) Capital grants and contributions - 13,276,356 3,121,717 16,398,073 Transfers in 13,326,200 1,063,340 4,439,777 18,829,317 Transfers out (3,000) - - (3,000) Total transfers and contributions 13,323,200 14,339,696 7,561,494 35,224,390 Changes in net position 734,662 13,145,806 696,005 14,576,473 Net position-beginning 9,709,264 22,668,018 22,004,067 54,381,349 Net position-ending $ 10,443,926 $ 35,813,824 $ 22,700,072 $ 68,957,822 See accompanying independent auditor's report 135 COLLIER COUNTY, FLORIDA 13 A COMBINING STATEMENT OF CASH FLOWS NONMAJOR ENTERPRISE FUNDS FOR THE FISCAL YEAR ENDED SEPTEMBER 30,2014 Total Emergency Collier Nonmajor Medical Airport Area Enterprise Services Authority Transit Funds Cash flows from operating activities: Cash received for services $ 11,719,389 $ 2,670,457 $ 1,476,370 $ 15,866,216 Cash payments for goods and services (2,156,111) (1,639,715) (5,842,444) (9,638,270) Cash payments to employees (18,846,627) (842,811) (304,892) (19,994,330) Cash payments for interfund services (1,432,462) (350,083) (2,631,213) (4,413,758) Net cash used for operating activities (10,715,811) (162,152) (7,302,179) (18,180,142) Cash flows from non-capital financing activities: Cash received from operating grants 681,090 - 2,568,479 3,249,569 Cash transfers from other funds 13,326,200 5,916,628 12,550,431 31,793,259 Cash transfers to other funds (3,000) (130,551) (10,630,738) (10,764,289) Net cash provided by non-capital financing activities 14,004,290 5,786,077 4,488,172 24,278,539 Cash flows from capital and related financing activities: Receipts from insurance reimbursements 12,802 - 18,521 31,323 Proceeds from disposal of capital assets 16,185 6,640 20,874 43,699 Proceeds from capital grants - 6,294,874 2,173,675 8,468,549 Payments for capital acquisitions (362,226) (11,903,556) (1,243,042) (13,508,824) Principal payments on leases (297,632) - - (297,632) Interest and fiscal agent fees paid (1,925) - - (1,925) Net cash provided by(used for)capital and related financing activities (632,796) (5,602,042) 970,028 (5,264,810) Cash flows from investing activities: Interest on investments 32,532 2,248 9,986 44,766 Net cash provided by investing activities 32,532 2,248 9,986 44,766 Net increase(decrease)in cash,cash equivalents and investments 2,688,215 24,131 (1,833,993) 878,353 Cash,cash equivalents and investments,October 1,2013 3,647,569 188,809 2,089,850 5,926,228 Cash,cash equivalents and investments,September 30,2014 $ 6,335,784 $ 212,940 $ 255,857 $ 6,804,581 Cash,cash equivalents and investments $ 6,218,054 $ 111,558 $ 53,010 $ 6,382,622 Cash,cash equivalents and investments-restricted 117,730 101,382 202,847 421,959 Cash,cash equivalents and investments,September 30,2014 $ 6,335,784 $ 212,940 $ 255,857 $ 6,804,581 Operating loss $ (13,602,299) $ (1,147,237) $ (8,645,323) $ (23,394,859) Adjustments to reconcile operating loss to net cash provided by(used for)operating activities: Depreciation expense 850,531 931,121 1,483,791 3,265,443 Net changes in assets and liabilities: Trade receivable 1,855,567 88,730 (147,320) 1,796,977 Due from other funds governments - (1,508) (3,108) Due from other g 83 - 1,544 1,627 Inventory (30,904) 15,307 - (15,597) Prepaid costs (208,463) - - (208,463) Accounts payable (21,013) (16,778) 16,367 (21,424) Wages payable 174,925 (11,116) 6,864 170,673 Due to other governments 48 (6,811) (15,520) (22,283) Compensated absences 6,764 (10,289) 526 (2,999) Lease payable 258,950 - - 258,950 Unearned revenue - (5,079) - (5,079) Total adjustments 2,886,488 985,085 1,343,144 5,214,717 Net cash used for operating activities $ (10,715,811) $ (162,152) $ (7,302,179) $ (18,180,142) Non-cash investing,capital and financing activities: Change in fair value of investments $ 2,522 $ 239 $ 1,522 $ 4,283 Contributed capital assets - - 329,385 329,385 See accompanying independent auditor's report 136 13A 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 13 A COMBINING STATEMENT OF NET POSITION INTERNAL SERVICE FUNDS SEPTEMBER 30,2014 Sheriffs Self- Self- Fleet Information Insurance Insurance Management Technology Total ASSETS Current assets: Cash,cash equivalents and investments $ 34,509,557 $ 11,220,827 $ 1,317,419 $ 2,043,406 $ 49,091,209 Receivables: Trade,net 38,096 105,399 3,141 - 146,636 Interest 41,012 - 826 2,499 44,337 Due from other funds 11,704 - 70,784 - 82,488 1 Due from other governments - - 46,026 - 46,026 Deposits 51,108 - - - 51,108 Inventory 300 - 755,431 13,932 769,663 Total current assets 34,651,777 11,326,226 2,193,627 2,059,837 50,231,467 Noncurrent assets: Capital assets: Depreciable capital assets,net 240,658 - 11,253,449 5,274,976 16,769,083 Total noncurrent assets 240,658 - 11,253,449 5,274,976 16,769,083 Total assets 34,892,435 11,326,226 13,447,076 7,334,813 67,000,550 LIABILITIES Current liabilities: Accounts payable 97,349 - 439,488 164,514 701,351 Wages payable 63,037 - 103,340 190,724 357,101 Due to other funds 39,300 407,422 - - 446,722 Due to other governments - - 79 - 79 Unearned revenue 9,772 - - - 9,772 Self-insurance claims payable 2,989,325 2,078,000 - - 5,067,325 Compensated absences 110,088 - 102,759 201,544 414,391 Total current liabilities 3,308,871 2,485,422 645,666 556,782 6,996,741 Noncurrent liabilities: Self-insurance claims payable 1,505,503 - - - 1,505,503 Compensated absences 27,522 - 25,690 50,386 103,598 Net pension obligation 849,469 1,681,238 - - 2,530,707 Total noncurrent liabilities 2,382,494 1,681,238 25,690 50,386 4,139,808 Total liabilities 5,691,365 4,166,660 671,356 607,168 11,136,549 NET POSITION Net investment in capital assets 240,658 - 11,245,202 5,144,463 16,630,323 Unrestricted 28,960,412 7,159,566 1,530,518 1,583,182 39,233,678 Total net position $ 29,201,070 $ 7,159,566 $ 12,775,720 $ 6,727,645 $ 55,864,001 See accompanying independent auditor's report 138 COLLIER COUNTY,FLORIDA l 3 A COMBINING STATEMENT OF REVENUES, EXPENSES AND CHANGES IN FUND NET POSITION INTERNAL SERVICE FUNDS FOR THE FISCAL YEAR ENDED SEPTEMBER 30,2014 Sheriffs Self- Self- Fleet Information Insurance Insurance Management Technology Total Operating revenues: Charges for services $ 43,575,840 $ 19,531,057 $ 9,347,226 $ 5,098,579 $ 77,552,702 j Miscellaneous 30,262 - 29,344 18,214 77,820 i Total operating revenues 43,606,102 19,531,057 9,376,570 5,116,793 77,630,522 Operating expenses: Personal services 1,150,576 - 1,992,064 3,394,444 6,537,084 Operating 38,481,632 20,248,709 6,820,011 1,644,762 67,195,114 Depreciation 25,627 - 565,835 1,222,178 1,813,640 Total operating expenses 39,657,835 20,248,709 9,377,910 6,261,384 75,545,838 Operating income(loss) 3,948,267 (717,652) (1,340) (1,144,591) 2,084,684 Non-operating revenues(expenses): Interest income 188,698 (181) 3,304 13,806 205,627 Insurance reimbursement 2,180,328 - 3,141 1,379 2,184,848 Gain(Loss)on disposal of capital assets (1) - 10,167 (77,780) (67,614) Total non-operating revenues(expenses) 2,369,025 (181) 16,612 (62,595) 2,322,861 Income(loss)before contributions and transfers 6,317,292 (717,833) 15,272 (1,207,186) 4,407,545 Capital grants and contributions 1,637 - 662 - 2,299 Transfers out (900,000) - - - (900,000) Change in net position 5,418,929 (717,833) 15,934 (1,207,186) 3,509,844 Net position-beginning 23,782,141 7,877,399 12,759,786 7,934,831 52,354,157 Net position-ending $ 29,201,070 $ 7,159,566 $ 12,775,720 $ 6,727,645 $ 55,864,001 See accompanying independent auditor's report 139 13A COLLIER COUNTY, FLORIDA COMBINING STATEMENT OF CASH FLOWS INTERNAL SERVICE FUNDS FOR THE FISCAL YEAR ENDED SEPTEMBER 30,2014 Sheriffs Self- Self- Fleet Information Insurance Insurance Management Technology Total Cash flows from operating activities: Cash received from other funds for services $ 37,068,278 $18,792,578 $ 8,895,134 $ 5,116,793 $ 69,872,783 Cash received from employees for services 5,966,764 - - - 5,966,764 Cash received from other governments for services - - 489,880 - 489,880 Cash received from retirees for services 580,679 738,479 - - 1,319,158 Cash payments on behalf of retirees (835,769) - - - (835,769) Cash payments for goods and services (37,179,013) (21,538,040) (6,224,315) (1,633,505) (66,574,873) Cash payments to employees (1,133,676) - (2,003,419) (3,386,411) (6,523,506) Cash payments for interfund services (451,982) - (253,425) (43,749) (749,156) Net cash provided by(used for)operating activities 4,015,281 (2,006,983) 903,855 53,128 2,965,281 Cash flows from non-capital financing activities: Cash transfers from other funds - 407,422 - 757,300 1,164,722 Cash transfers to other funds (900,000) (1,940,588) - (757,300) (3,597,888) Net cash used for non-capital financing activities (900,000) (1,533,166) - - (2,433,166) Cash flows from capital and related financing activities: Receipts from insurance reimbursements 2,588,648 - - 1,379 2,590,027 Proceeds from disposal of capital assets - - 10,167 - 10,167 Payments for capital acquisitions (7,655) - (133,909) (551,704) (693,268) Net cash provided by(used for)capital and related financing activities 2,580,993 - (123,742) (550,325) 1,906,926 Cash flows from investing activities: Interest on investments 179,622 (181) 2,887 14,236 196,564 Net cash provided by(used for)investing activities 179,622 (181) 2,887 14,236 196,564 Net increase(decrease)in cash,cash equivalents and investments 5,875,896 (3,540,330) 783,000 (482,961) 2,635,605 Cash,cash equivalents and investments,October 1,2013 28,633,661 14,761,157 534,419 2,526,367 46,455,604 Cash,cash equivalents and investments,September 30,2014 $ 34,509,557 $11,220,827 $ 1,317,419 $ 2,043,406 $ 49,091,209 Operating income(loss) $ 3,948,267 $ (717,652) $ (1,340) $ (1,144,591) $ 2,084,684 Adjustments to reconcile operating income(loss)to net cash provided(used for)by operating activities: Depreciation expense 25,627 - 565,835 1,222,178 1,813,640 Net changes in assets and liabilities: Trade receivable (5,265) (103,652) 5,814 - (103,103) Due from other funds 5,112 - (2,554) - 2,558 Due from other governments - - 5,184 - 5,184 Inventory 1,648 - 68,805 3,000 73,453 Accounts payable (7,584) - 311,175 (35,492) 268,099 Wages payable 8,608 - 6,234 14,856 29,698 Due to other funds 39,298 - (5,814) - 33,484 Due to other governments - - (31,895) - (31,895) Compensated absences 8,292 - (17,589) (6,823) (16,120) Unearned revenue 9,772 - 9,772 - Self-insurance claims payable (34,050) (1,522,000) - - (1,556,050) Net pension obligation 15,556 336,321 351,877 Total adjustments 67,014 (1,289,331) 905,195 1,197,719 880,597 Net cash provided by(used for)operating activities $ 4,015,281 $ (2,006,983) $ 903,855 $ 53,128 $ 2,965,281 Non-cash investing,capital and financing activities: Change in fair value of investments $ 17,721 $ - $ 333 $ 1,586 $ 19,640 Contributed capital assets 1,637 - 662 - 2,299 See accompanying independent auditor's report 140 13A 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. 13A COLLIER COUNTY, FLORIDA COMBINING STATEMENT OF FIDUCIARY NET POSITION AGENCY FUNDS SEPTEMBER 30,2014 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 $ 26,166,962 $ 600,082 $ 6,817,938 $ 6,603,422 $ 1,117,644 $41,306,048 Receivables: Interest - - - 7,009 1,288 8,297 Other - 23,827 14,902 - - 38,729 Total assets $ 26,166,962 $ 623,909 $ 6,832,840 $ 6,610,431 $ 1,118,932 $41,353,074 LIABILITIES Due to other governments $ 1,134,274 $ 60,129 $ 6,747,383 $ - $ - $ 7,941,786 Due to individuals - 563,780 85,457 - - 649,237 Refundable deposits 25,032,688 - - 6,610,431 - 31,643,119 Due to special assessment holders - - - - 1,118,932 1,118,932 Total liabilities $ 26,166,962 $ 623,909 $ 6,832,840 $ 6,610,431 $ 1,118,932 $41,353,074 See accompanying independent auditor's report 142 13A COLLIER COUNTY,FLORIDA COMBINING STATEMENT OF CHANGES IN FIDUCIARY NET POSITION ALL AGENCY FUNDS FOR THE FISCAL YEAR ENDED SEPTEMBER 30,2014 Balance Balance October 1 Additions Deductions September 30 Clerk of Courts Agency Fund Assets: Cash,cash equivalents and investments $ 28,029,618 $ 196,001,397 $ 197,864,053 $ 26,166,962 Total assets $ 28,029,618 $ 196,001,397 $ 197,864,053 $ 26,166,962 Liabilities: Due to other governments $ 1,308,003 $ 16,346,756 $ 16,520,485 $ 1,134,274 Refundable deposits 26,721,615 179,654,641 181,343,568 25,032,688 Total liabilities $ 28,029,618 $ 196,001,397 $ 197,864,053 $ 26,166,962 Sheriff Agency Fund Assets: Cash,cash equivalents and investments $ 631,218 $ 4,076,414 $ 4,107,550 $ 600,082 Receivable: Other 16,453 23,827 16,453 23,827 Total assets $ 647,671 $ 4,100,241 $ 4,124,003 $ 623,909 Liabilities: Due to other governments $ 63,765 $ 266,957 $ 270,593 $ 60,129 Due to individuals 583,906 • 799,793 819,919 563,780 Total liabilities $ 647,671 $ 1,066,750 $ 1,090,512 $ 623,909 Tax Collector Agency Fund Assets: Cash,cash equivalents and investments $ 6,178,291 $ 832,545,452 $ 831,905,805 $ 6,817,938 Receivable: Other 18,314 2,002,884 2,006,296 14,902 Total assets $ 6,196,605 $ 834,548,336 $ 833,912,101 $ 6,832,840 Liabilities: Due to other governments $ 6,063,890 $ 821,072,048 $ 820,388,555 $ 6,747,383 Due to individuals 132,715 15,992,020 16,039,278 85,457 Total liabilities $ 6,196,605 $ 837,064,068 $ 836,427,833 $ 6,832,840 Deposits Agency Fund Assets: Cash,cash equivalents and investments $ 3,578,407 $ 3,425,330 $ 400,315 $ 6,603,422 Receivables: Interest 3,559 7,009 3,559 7,009 Total assets $ 3,581,966 $ 3,432,339 $ 403,874 $ 6,610,431 Liabilities: Refundable deposits $ 3,581,966 $ 3,413,780 $ 385,315 $ 6,610,431 Total liabilities $ 3,581,966 $ 3,413,780 $ 385,315 $ 6,610,431 (Continued) 143 1 3 A COLLIER COUNTY,FLORIDA COMBINING STATEMENT OF CHANGES IN FIDUCIARY NET POSITION ALL AGENCY FUNDS FOR THE FISCAL YEAR ENDED SEPTEMBER 30,2014 Balance Balance October 1 Additions Deductions September 30 Pine Ridge and Naples Production Park Agency Assets: Cash,cash equivalents and investments $ 1,814,654 $ 13,966 $ 710,976 $ 1,117,644 Receivables: Interest 1,855 1,288 1,855 1,288 Other 5,444 - 5,444 - Total assets $ 1,821,953 $ 15,254 $ 718,275 $ 1,118,932 Liabilities: Due to special assessment holders $ 1,821,953 $ 7,955 $ 710,976 $ 1,118,932 Total liabilities $ 1,821,953 $ 7,955 $ 710,976 $ 1,118,932 Total -All Agency Funds Assets: Cash,cash equivalents and investments $ 40,232,188 $ 1,036,062,559 $ 1,034,988,699 $ 41,306,048 Receivables: Interest 5,414 8,297 5,414 8,297 Other 40,211 2,026,711 2,028,193 38,729 Total assets $ 40,277,813 $ 1,038,097,567 $ 1,037,022,306 $ 41,353,074 Liabilities: Due to other governments $ 7,435,658 $ 837,685,761 $ 837,179,633 $ 7,941,786 Due to individuals 716,621 16,791,813 16,859,197 649,237 Refundable deposits 30,303,581 183,068,421 181,728,883 31,643,119 Due to special assessment holders 1,821,953 7,955 710,976 1,118,932 Total liabilities $ 40,277,813 $ 1,037,553,950 $ 1,036,478,689 $ 41,353,074 See accompanying independent auditor's report 144 13A 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. 13A . COLLIER COUNTY, FLORIDA COMPONENT UNITS COMBINING STATEMENT OF NET POSITION SEPTEMBER 30,2014 Housing Health Industrial Educational Finance Facilities Development Facilities Authority Authority Authority Authority Totals ASSETS Cash,cash equivalents and investments $ 93,061 $ 17,678 $ 22,508 $ 70,057 $ 203,304 Total Assets $ 93,061 $ 17,678 $ 22,508 $ 70,057 $ 203,304 NET POSITION Net position-unrestricted $ 93,061 $ 17,678 $ 22,508 $ 70,057 $ 203,304 Total Net Position $ 93,061 $ 17,678 $ 22,508 $ 70,057 $ 203,304 See accompanying independent auditor's report 146 COLLIER COUNTY, FLORIDA 1 3 A COMPONENT UNITS COMBINING STATEMENT OF ACTIVITIES FOR THE FISCAL YEAR ENDED SEPTEMBER 30,2014 Net(Expense) Revenue and Changes Program Revenues in Net Position Fees,Fines and Governmental FUNCTIONS/PROGRAMS Expenses Charges for Services Activities Housing Finance Authority $ 200,017 $ 8,850 $ (191,167) Health Facilities Authority - - - Industrial Development Authority 75,026 75,000 (26) Educational Facilities Authority 5,026 23,056 18,030 Total $ 280,069 $ 106,906 (173,163) General revenues: Interest income 117 Total general revenues 117 Change in net position (173,046) Net position-beginning 376,350 Net position-ending $ 203,304 See accompanying independent auditor's report 147 13A THIS PAGE INTENTIONALLY LEFT BLANK 13A 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 150 Change in net position 151 Governmental activities tax revenues by source 154 Fund balances of governmental funds 155 Changes in fund balance of governmental funds 156 REVENUE CAPACITY These schedules contain information to help the reader assess the County's most significant local revenue source,the Property Tax. Assessed value and estimated actual value of taxable property 158 Property tax rates—All direct and overlapping governments 159 Principal tax payers County-wide 160 Property tax levies and collections 161 DEBT CAPACITY These schedules present information to help the 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 162 Ratios of general bonded debt outstanding 163 Legal debt margin information 164 Direct,overlapping and underlapping governmental activities debt 164 Pledged-revenue coverage 165 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 166 Principal employers 167 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. Budgeted full-time equivalent County employees by function 168 Operating indicators by function 169 Capital Asset statistics by function/program 170 Sources: Unless otherwise noted,the information in these schedules is derived from the comprehensive annual financial reports for the relevant year. The County implemented GASB 34 for fiscal year 2002. Schedules presenting government-wide information include information beginning in that fiscal year. 13A N M lO V M 00 Ui CO 0 m (0 00 .i (D N Cr 0 N m CO N o) O (n 00 7 (n N (D a lD 00 Q CO 0 .-I' 00 ✓/ U) N .-1 O a M of (D 0) NN VI .�'1 N 0 (n N lD .N-1 . m (0 .4 .4 .4 VT N to tn. V? to co m 0N) (4)) N 0000 O .I (OD 0) 0) 0) N V 0 N N 0 N 0 V C N N LO 8 N Ui 00(0 n 06 N 00 M ! oo O .i O 0) N I-, 0 N CO 0) 0 N (D N m N V) N N N M 0) .4 .4 .4 An V) V) V) V} V) .-( (0 .i CO (f) W. 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S r It 0 U 3 ?i LL a u 0 3 3 v°1 169 13A N. 0 N Ol n CO O N CO m n Ol n N u1 CO N e-1 O a N 01 00 a a m l0 CO 1--1 0 01 N a-1 CO N a n n l0 c-1 00 m SY1 Ln Li-) a N N Ol . m N N N N 0 0 N N N N 00 01 Cl a N 0 00 m N a N O N a a 01 O CO 0 al 0 N c-1 tO N Ln LO O lO 0 N M ay 11'1 1-1. .-i n M N A Ln N O O a m n 111 N N N O O LA N IA 00 01 N N 0 LA .-1 M N a 00 .--1 M Vl a a-1 Ln O N n 0 N N 01 N a N N CO N CO M N 1- M 01 O O in .--1 N N c"1 O m n t l N a n a o lO n Ln CO 01 a 0 0 c-1 m M N CO tO N a V1 a co m n tO LO 0 co N N N N a a .--1 00 N O m 8 - M .-1 n O 1 N tO Ol O m N LA M a to M M 01 CO to 00 O 00 01 O u1 .-1 M N CO CO 00 N LA a .-1 N O1 00 O 00 O N e-1 a N Cr 01 a 00 00 0 M on O .-i 1 3 A 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. 13A THIS PAGE INTENTIONALLY LEFT BLANK 13A 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 (County), as of and for the year ended September 30, 2014, and the related notes to the financial statements, which collectively comprise the County's basic financial statements, and have issued our report thereon dated February 13, 2015. Internal Control Over Financial Reporting In planning and performing our audit of the financial statements, we considered the 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 the County's internal control. Accordingly, we do not express an opinion on the effectiveness of the 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. NEXTA A,independent tierber d We a Irtenvilarl 173 INTERNATIONAL 13A Honorable Board of County Commissioners Collier County, Florida Compliance and Other Matters As part of obtaining reasonable assurance about whether the 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 13, 2015 174 13A CliftonLarsonAllen LLP 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 (County) compliance with the types of compliance requirements described in OMB Circular A-133 Compliance Supplement and in Florida Department of Financial Services State Projects Compliance Supplement, that could have a direct and material effect on each of the County's major federal programs and state projects for the year ended September 30, 2014. The 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 the 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 the 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 the County's compliance. NEXTirdependert mEnter d Nemo Irternaknel 175 INTERNATIONAL 1 3 A Honorable Board of County Commissioners Collier County, Florida Opinion on Each Major Federal Program and State Project In our opinion, the 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, 2014. Other Matters The results of our auditing procedures disclosed instances of noncompliance, which are required to be reported in accordance with OMB Circular A-133 and Rule 10.550 and which are described in the accompanying schedule of findings and questioned costs as items 2014-001 and 2014-002. Our opinion on each major federal program is not modified with respect to these matters. The County's responses to the noncompliance findings identified in our audit are described in the accompanying schedule of findings and questioned costs. The County's responses were not subjected to the auditing procedures applied in the audit of compliance and, accordingly, we express no opinion on the responses. Report on Internal Control Over Compliance Management of the 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 the 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 the 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. 176 13A 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 certain deficiencies in internal control over compliance, as described in the accompanying schedule of findings and questioned costs as items 2014-001 and 2014-002 that we consider to be significant deficiencies. The County's responses to the internal control over compliance findings identified in our audit are described in the accompanying schedule of findings and questioned costs. The County's responses were 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. LLB CliftonLarsonAllen LLP Naples, Florida February 13, 2015 177 COLLIER COUNTY,FLORIDA 1 3 A SCHEDULE OF EXPENDITURES OF FEDERAL AWARDS AND STATE FINANCIAL ASSISTANCE FOR THE FISCAL YEAR ENDED SEPTEMBER 30,2014 CFDA#/ Transfers to Federal or State Grantor/Pass-Through Grantor Program Title CSFA# Grant/Contract Number Expenditures Subrecipients Department of Agriculture Indirect Programs: Florida Department of Agriculture and Consumer Services: Summer Food Service Program for Children 10.559 04-0804 $ 115,134 $ - Total Department of Agriculture 115,134 - Department of Housing and Urban Development Direct Programs: Office of Community Planning and Development: Community Development Block Grants/Entitlement Grants 14.218 B-04-UC-12-0016 140,401 - Community Development Block Grants/Entitlement Grants 14.218 B-08-UN-12-0003 228,819 - Community Development Block Grants/Entitlement Grants 14.218 B-09-UC-12-0016 39,312 39,312 Community Development Block Grants/Entitlement Grants 14.218 B-10-UC-12-0016 547,248 19,118 Community Development Block Grants/Entitlement Grants 14.218 B-11-UN-12-0003 620,249 - Community Development Block Grants/Entitlement Grants 14.218 B-11-UC-12-0016 662,881 215,878 Community Development Block Grants/Entitlement Grants 14.218 B-12-UC-12-0016 1,171,406 1,090,134 Community Development Block Grants/Entitlement Grants 14.218 B-13-UC-12-0016 685,107 349,367 Total CFDA 4,095,423 1,713,809 Emergency Solutions Grant Program 14.231 S-12-UC-12-0024E 112,453 104,178 Emergency Solutions Grant Program 14.231 E-13-UC-12-0024 15,589 6,778 Total CFDA 128,042 110,956 Home Investment Partnerships Program 14.239 M-09-UC-12-0217 38,576 - Home Investment Partnerships Program 14.239 M-11-UC-12-0217 148,173 148,498 Home Investment Partnerships Program 14.239 M-13-UC-12-0217 42,615 - Total CFDA 229,364 148,498 Economic Development Initiative-Special Project,Neighborhood Initiative and Miscellaneous Grants 14.251 B-08-SP-FL-0168 59,172 - Indirect Programs: Florida Department of Economic Opportunity: Community Development Block Grants/State's Program and Non-Entitlement Grants in Hawaii 14.228 07DB-3V-09-21-01-Z01 1,870 - Community Development Block Grants/State's Program and Non-Entitlement Grants in Hawaii 14.228 08DB-03-09-21-01-A03 2,402 - Community Development Block Grants/State's Program and Non-Entitlement Grants in Hawaii 14.228 1008-D4-09-21-01-K09 68,909 3,000 Community Development Block Grants/State's Program and Non-Entitlement Grants in Hawaii 14.228 12DB-P5-09-21-01-K39 53,931 - Total CFDA 127,112 3,000 Total Department of Housing and Urban Development 4,639,113 1,976,263 Department of the Interior Direct Programs: Office of the Secretary Payments in Lieu of Taxes 15.226 Collier County 1,323,192 - Fish and Wildlife Service: National Wildlife Refuge Fund 15.659 Collier County 166,656 - Total Department of the Interior 1,489,848 - Department of Justice Direct Programs: Violence Against Women Office: Supervised Visitation,Safe Havens for Children 16.527 2009-CW-AX-K011 99,532 - (Continued) See accompanying notes to the schedule of expenditures of federal awards and state projects. 178 COLLIER COUNTY,FLORIDA 1 3 A SCHEDULE OF EXPENDITURES OF FEDERAL AWARDS AND STATE FINANCIAL ASSISTANCE FOR THE FISCAL YEAR ENDED SEPTEMBER 30,2014 CFDA it/ Transfers to Federal or State Grantor/Pass-Through Grantor Program Title CSFA g Grant/Contract Number Expenditures Subrecipients Bureau of Justice Assistance: State Criminal Alien Assistance Program 16.606 2000-AP-BX-0483 $ 2,074 $ - State Criminal Alien Assistance Program 16.606 2006-AP-BX-0188 520,857 - State Criminal Alien Assistance Program 16.606 2007-AP-BX-0296 1,452,327 - State Criminal Alien Assistance Program 16.606 2008-AP-BX-0859 212,617 - State Criminal Alien Assistance Program 16.606 2009-AP-BX-0489 156,630 - State Criminal Alien Assistance Program 16.606 2010-AP-BX-0164 799,739 - State Criminal Alien Assistance Program 16.606 2011-AP-BX-0510 474,915 - State Criminal Alien Assistance Program 16.606 2012-AP-BX-0307 281,547 - State Criminal Alien Assistance Program 16.606 2013-AP-BX-0503 331,739 - Total CFDA 4,232,445 - Office of Community Oriented Policing Services: Public Safety Partnership and Community Policing Grants 16.710 2012ULWX0008 12,529 - Public Safety Partnership and Community Policing Grants 16.710 2013ULWX0047 23,970 - Total CFDA 36,499 - Criminal Division: Equitable Sharing Program 16.922 Collier County Sheriff 58,224 - Bureau of Justice Assistance: Edward Byrne Memorial Justice Assistance Grant Program 16.738 2012-D1-BX-0156 10,304 - Edward Byrne Memorial Justice Assistance Grant Program 16.738 2013-DJ-BX-0132 57,796 - Indirect Programs: Florida Department of Law Enforcement: Edward Byrne Memorial Justice Assistance Grant Program 16.738 2013-JAGC-COLL-1.-D7-098 10,544 - Edward Byrne Memorial Justice Assistance Grant Program 16.738 2014-JAGC-COLL-1-E5-247 86,801 - Total CFDA 165,445 - Florida Office of Attorney General: Crime Victim Assistance 16.575 V13129 121,681 - Florida Department of Children and Families-Florida Coalition Against Domestic Violence: Violence Against Women Formula Grants 16.588 14-8008-LE-INV 95,120 - Violence Against Women Formula Grants 16.588 15-8008-LE-INV 22,344 - Total CFDA 117,464 - Total Department of Justice 4,831,290 - Department of Transportation Direct Programs: Federal Aviation Administration(FAA): Airport Improvement Program 20.106 3-12-0031-010-2012 215 - - Airport Improvement Program 20.106 3-12-0142-009-2012 4,352 Airport Improvement Program 20.106 3-12-0021-003-2013 231,262 - . Airport Improvement Program 20.106 3-12-0031-008-2013 6,378,216 - Airport Improvement Program 20.106 3-12-0142-010-2013 5,505,968 - , Total CFDA 12,120,013 - Federal Transit Administration(FTA): Federal Transit Cluster: - Federal Transit_Capital Investment Grants 20.500 FL-03-0264-00 40,020 Federal Transit_Capital Investment Grants 20.500 FL-04-0117-00 64,900 - Total CFDA 104,920 Federal Transit_Formula Grants 20.507 FL-90-X699-00 150,009 - Federal Transit_Formula Grants 20.507 FL-90-X731-00 5,612 - Federal Transit_Formula Grants 20.507 FL-90-X766-00 20,411 Federal Transit_Formula Grants 20.507 FL-90-X784-00 1,295,332 - Federal Transit_Formula Grants 20.507 FL-90-X816-00 1,100,026 - Federal Transit_Formula Grants 20.507 FL-95-X069-00 45,684 Total CFDA 2,617,074 - Total Federal Transit Cluster 2,721,994 (Continued) 179 COLLIER COUNTY,FLORIDA 1 3 A SCHEDULE OF EXPENDITURES OF FEDERAL AWARDS AND STATE FINANCIAL ASSISTANCE FOR THE FISCAL YEAR ENDED SEPTEMBER 30,2014 CFDA 9/ Transfers to Federal or State Grantor/Pass-Through Grantor Program Title CSFA it Grant/Contract Number Expenditures Subrecipients Indirect Programs: Florida Department of Transportation: Highway Planning and Construction 20.205 423645-1/A4377 $ 444,762 $ - Highway Planning and Construction 20.205 425670-1/A4377 103,446 - Highway Planning and Construction 20.205 429897-1/ARF41 51 - Highway Planning and Construction 20.205 429901-1/AQX51 253,962 - Highway Planning and Construction 20.205 429902-1/AQT91 39,161 - Highway Planning and Construction 20.205 429903-1/AQX89 235,608 - Highway Planning and Construction 20.205 429915-1/AQU96 138,561 - Highway Planning and Construction 20.205 430868-1/AR481 63 - Highway Planning and Construction 20.205 430870-1/AQV67 599,932 - Highway Planning and Construction 20.205 430872-1/ARD89 385,639 - Highway Planning and Construction 20.205 430874-1/ARD88 303,660 - Total CFDA 2,504,845 - Metropolitan Transportation Planning and State and Non-Metropolitan Planning and Research 20.505 410113-1/APO31 25,766 - Metropolitan Transportation Planning and State and Non-Metropolitan Planning and Research 20.505 410113-1/AQR14 129,624 - Total CFDA 155,390 - Formula Grants for Rural Areas 20.509 410120-1/AQR01 295,600 - ARRA Formula Grants for Rural Areas 20.509 ARRA 426772-1/API19 15,758 - Total CFDA 311,358 - Enhanced Mobility of Seniors and Individuals with Disabilities 20.513 FL-16-0036 51,458 - Enhanced Mobility of Seniors and Individuals with Disabilities 20.513 FL-16-0037 245,390 - Total CFDA 296,848 - Total Department of Transportation 18,110,448 - Environmental Protection Agency 1 Indirect Programs: Florida Department of Environmental Protection: Capitalization Grants for Drinking Water State Revolving Funds 66.468 DW1111 040 9,922,122 - Total Environmental Protection Agency 9,922,122 - 1 U.S,Election Assistance Commission Indirect Programs: Florida Department of State: Help America Vote Act Requirements Payments 90.401 2013-2014-0001 30,259 - Total U.S.Election Assistance Commission 30,259 - Department of Health and Human Services 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 203.13 11,518 - Special Programs for the Aging_Title III,Part B_Grants for Supportive Services and Senior Centers 93.044 OM 203.14 37,685 - Total CFDA 49,203 - Special Programs for the Aging_Title III,Part C_Nutrition Services 93.045 OAA 203.13 107,559 - Special Programs for the Aging_Title III,Part C_Nutrition Services 93.045 OAA 203.14 445,878 - Total CFDA 553,437 - . Nutrition Services Incentive Program 93.053 NSIP 203.13 10,053 - Nutrition Services Incentive Program 93.053 NSIP 203.14 42,340 - Total CFDA 52,393 - Total Aging Cluster 655,033 - (Continued) 180 13A ,...-4- COLLIER COUNTY,FLORIDA SCHEDULE OF EXPENDITURES OF FEDERAL AWARDS AND STATE FINANCIAL ASSISTANCE FOR THE FISCAL YEAR ENDED SEPTEMBER 30,2014 CFDA#/ Transfers to Federal or State Grantor/Pass-Through Grantor Program title CSFA# Grant/Contract Number Expenditures Subrecipients National Family Caregiver Support,Title Ill,Part E 93.052 OAA 203.13 $ 11,934 $ - National Family Caregiver Support,Title III,Part E 93.052 OAA 203.14 _ 92,436 Total CFDA 104,370 - Florida Department of Revenue: Child Support Enforcement 93.563 CD311 310,198 - Child Support Enforcement 93.563 COC11 27,392 - Total CFDA 337,590 - Florida Department of State: Voting Access for Individuals with Disabilities_Grants to States 93.617 2013-2014-0003 7,571 - Total Department of Health and Human Services 1,104,564 - Corporation for National and Community Service Direct Programs: Retired and Senior Volunteer Program 94.002 09SRSFLO17 3,781 - Retired and Senior Volunteer Program 94.002 12SRSFLO12 64,741 - Total Corporation for National and Community Service 68,522 - Department of Homeland Security Indirect Programs: Executive Office of the Governor: Disaster Grants-Public Assistance(Presidentially Declared Disasters) 97.036 08-FA-B9-09-21-00-509 5,029,829 - Disaster Grants-Public Assistance(Presidentially Declared Disasters) 97.036 13-DB-73-09-21-02-530 62,362 - Total CFDA 5,092,191 - Hazard Mitigation Grant 97.039 11HM-3E-09-21-01-004 339,267 - Emergency Management Performance Grants 97.042 14-FG-I M-09-21-01-078 97,081 - Emergency Management Performance Grants 97.042 15-FG-40-09-21-01-078 1,719 - Total CFDA 98,800 i Homeland Security Grant Program 97.067 12DS-20-09-21-23-435 47,768 - Homeland Security Grant Program 97.067 13DS-97-09-21-23-451 24,104 - Homeland Security Grant Program 97.067 1405-C2-09-21-01-179 13,187 - Homeland Security Grant Program 97.067 14DS-C2-09-21-01-443 492,563 - Homeland Security Grant Program 97.067 14DS-L5-09-21-01-343 6,450 - Homeland Security Grant Program 97.067 14DS-L5-09-21-23-369 41,125 - Total CFDA 625,197 - Total Department of Homeland Security 6,155,455 - TOTAL EXPENDITURES OF FEDERAL AWARDS $ 46,466,755 $=,976263 (Continued) 181 COLLIER COUNTY,FLORIDA 13 A SCHEDULE OF EXPENDITURES OF FEDERAL AWARDS AND STATE FINANCIAL ASSISTANCE FOR THE FISCAL YEAR ENDED SEPTEMBER 30,2014 CFDA 8/ Transfers to Federal or State Grantor/Pass-Through Grantor Program Title CSFA# Grant/Contract Number Expenditures Subrecipients Executive Office of the Governor Emergency Management Programs 31.063 14-BG-83-09-21-01-011 $ 63,258 $ - Emergency Management Programs 31.063 15-BG-83-09-21-01-011 30,512 - Total CSFA 93,770 - Emergency Management Projects 31.067 14-CP-11-09-21-01-245 8,669 - Total Florida Executive Office of the Governor 102,439 - Florida Department of State and Secretary of State State Aid to Libraries 45.030 08-ST-12 5,116 - State Aid to Libraries 45.030 09-ST-10 97 - State Aid to Libraries 45.030 10-ST-10 759 - State Aid to Libraries 45.030 11-ST-09 780 - State Aid to Libraries 45.030 12-ST-08 107,210 - State Aid to Libraries 45.030 14-ST-08 41,946 - Total Florida Department of State and Secretary of State 155,908 - Florida Housing Finance Corporation State Housing Initiatives Partnership(SHIP)Program 52.901 Collier County/Naples 297,995 - Total Florida Housing Finance Corporation 297,995 - Florida Department of Transportation Commission for the Transportation Disadvantaged(CTD)Trip and Equipment Grant Program 55.001 410656-1/AR768 86,434 - Commission for the Transportation Disadvantaged(CTD)Trip and Equipment Grant Program 55.001 432027-1/432028-1/AR160 618,454 - Commission for the Transportation Disadvantaged(CTD)Trip and Equipment Grant Program 55.001 432027-1/432028-1/ARF15 65,345 - Total CSFA 770,233 - Commission for the Transportation Disadvantaged(CTD) Planning Grant Program 55.002 432029-1/AR247 3,843 - Commission for the Transportation Disadvantaged(CTD) Planning Grant Program 55.002 432029-1/ARH55 7,004 - Total CSFA 10,847 Aviation Development Grants 55.004 432901-1 I AQR22 44,623 - Aviation Development Grants 55.004 432900-1/AQR24 3,434 - Aviation Development Grants 55.004 430969-1/AR519 804,859 - Aviation Development Grants 55.004 430983-1/AR513 305,718 - Total CSFA 1,158,634 - Public Transit Block Grant Program 55.010 410139-1/AQQ16 792,171 - Alligator Alley Mile Marker 63 Fire Station 55.036 435389-1/ARF81 120,381 - Total Florida Department of Transportation 2,852,266 - Florida Department of Children and Families Public Safety,Mental Health,and Substance Abuse Local Matching Grant 60.115 LHZ25 226,172 203,905 Public Safety,Mental Health,and Substance Abuse Local Matching Grant 60.115 LHZ46 29,118 23,209 Total Florida Department of Children and Families 255,290 227,114 Florida Department of Health Emergency Medical Services(EMS)Matching Awards 64.003 M2010 14,881 - County Grant Awards 64.005 C9011 11,761 - County Grant Awards 64.005 C1011 39,224 - Total CSFA 50,985 - Total Florida Department of Health 65,866 - (Continued) 182 COLLIER COUNTY,FLORIDA 1 3 A SCHEDULE OF EXPENDITURES OF FEDERAL AWARDS AND STATE FINANCIAL ASSISTANCE FOR THE FISCAL YEAR ENDED SEPTEMBER 30,2014 CFDA#1 Transfers to Federal or State Grantor/Pass-Through Grantor Program Title CSFA# Grant/Contract Number Expenditures Subrecipients 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 203.12 $ 13,366 $ - Home Care for the Elderly 65.001 HCE 203.14 5,582 - Total CSFA 18,948 - Alzheimer's Respite Services 65.004 ADI 203.12 113,778 - Alzheimer's Respite Services 65.004 ADI 203.14 36,367 - Total CSFA 150,145 - Community Care for the Elderly 65.010 CCE 203.12 619,551 - Community Care for the Elderly 65.010 CCE 203.14 187,634 - Total CSFA 807,185 - Total Florida Department of Elder Affairs 976,278 - TOTAL EXPENDITURES OF STATE FINANCIAL ASSISTANCE $ 4,706,042 $ 227,114 183 13A Collier County, Florida Notes to the Schedule of Expenditures of Federal Awards and State Financial Assistance Year Ended September 30, 2014 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, 2014. 2. 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 unless addressed in schedule of findings. 184 COLLIER COUNTY, FLORIDA A 13 Schedule of Findings and Questioned Costs Federal Awards Programs and State Financial Assistance Projects Year Ended September 30, 2014 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 Yes weakness(es) Type of auditors' report issued on compliance for major programs: Unmodified Any audit findings disclosed that are required to be reported in accordance with Yes OMB Circular A-133, Section 510 (a) Identification of major federal programs: CFDA Number Name of Federal Program or Cluster 14.218 CDBG -Community Development Block Grants/Entitlement Grants 14.239 Home Investment Partnerships Program 16.606 State Criminal Alien Assistance Program 20.106 Airport Improvement Program 20.205 Highway Planning and Construction 97.036 Disaster Grants - Public Assistance Dollar threshold used to determine Type A Federal programs $1,394,000 Auditee qualified as low-risk auditee? No 185 13A . COLLIER COUNTY, FLORIDA Schedule of Findings and Questioned Costs Federal Awards Programs and State Financial Assistance Projects Year Ended September 30, 2014 State Financial Assistance Section Internal control over compliance: Material weakness(es) identified? No Were significant deficiency(ies) identified not considered to be a material Yes 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 55.004 Aviation Development Grants 55.010 Public Transit Block Grant Program 60.115 Public Safety, Mental Health, and Substance Abuse Local Matching Grant Dollar threshold used to determine Type A State projects $300,000 186 COLLIER COUNTY, FLORIDA Schedule of Findings and Questioned Costs Federal Awards Programs and State Financial Assistance Projects Year Ended September 30, 2014 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. 2014-001 Timeliness of Cash Management Federal Program/State Project Information U.S. Department of Transportation CFDA 20.106 Airport Improvement Program Award No. 3-12-031-010-2012, Award Year—2012 Award No. 3-12-0142-010-2013, Award Year—2013 U.S. Department of Homeland Security CFDA 97.036 Disaster Grants- Public Assistance (Presidentially Declared Disasters) Award No.PA-04-FL-1785-PW-01146, Award Year—2009 Criteria In accordance with OMB Circular A-102 Common Rule, the County's methods and procedures for transferring funds should minimize the time elapsing between when a qualifying expenditure was paid by the County and the related transfer of grant funds to the County. Condition Based on our testing of cash drawdowns in fiscal year 2014, there were instances of significant time lag between when the County paid for grant expenditures and the date of the related drawdowns for CFDA 20.106, the Airport Improvement Program, and CFDA 97.036, Disaster Grants - Public Assistance. Context For CFDA 20.106, the Airport Improvement Program, auditors noted that both drawdowns tested were not considered timely, as there was 203 days of lag time between the payment of the oldest related invoice and the date of the related drawdown made in May of 2014 and 133 days of lag time for a drawdown made in December of 2013. For CFDA 97.036, Disaster Grants - Public Assistance, auditors noted that one of the two drawdowns tested was not considered timely, as there was 174 days of lag time between the payment of the oldest related invoice and the date of the related drawdown made in January of 2014. 187 COLLIER COUNTY, FLORIDA 13A Schedule of Findings and Questioned Costs Federal Awards Programs and State Financial Assistance Projects Year Ended September 30, 2014 2014-001 Timeliness of Cash Management (Continued) Question Costs None Cause There appears to be a lack of a process to minimize the time between disbursements and reimbursement requests in certain departments. Also, for grants allowing the reimbursement of certain costs incurred before the related grant agreements are executed, the County does not have a policy in place to immediately request reimbursement for qualifying grant expenditures incurred before the execution of the related grant agreements. Effect Drawdowns or reimbursement requests were submitted to grantors significantly past the time the County paid for the related qualifying expenditures and did not follow the County's Office of Management and Budget (OMB) Department's internal control protocol to target execution of draws within 30-45 days after quarter end unless the grantor agency contracts explicitly state otherwise. This could lead to issues with the monitoring of the timeliness of carrying out projects in applicable programs, could adversely affect County cash flows, and could result in the grantor not reimbursing the County for reimbursements not requested within a reasonable period of time. Recommendation The County should implement procedures to minimize the time lag between the request for cash drawdown and the time that the disbursements are paid by the County by ensuring the County's Office of Management and Budget (OMB) Department's internal control protocol to target execution of draws within 30-45 days after quarter-end is being followed by all departments. Also, the County should develop policies and procedures to ensure the County immediately requests reimbursement for qualifying grant expenditures incurred before the related grant agreement. Views of Responsible Officials and Corrective Action Plan Timeliness: OMB, Department Management and Project Managers continually review project timelines as part of required quarterly grantor reporting. Cash Flow: Collier County by budget policy maintains at a minimum 10% of annual expenditures as unrestricted cash and cash equivalents in the General Fund. Over the last four years, the General Fund's beginning cash position has averaged approximately 20% of General Fund expenses. At year ending September 30, 2014, the General Fund cash position totaled $59.8 million or 20.9% of annual expenditures for the year ending September 30, 2014. This cash position is more than adequate to support grantor expenditures due reimbursement. Collier County maintains an excellent investment quality credit rating which was most recently reaffirmed by Standard and Poor's (S&P) in November of 2014 where this rater elevated the County's issuer rating to AAA, the highest rating available in the industry. 188 13A COLLIER COUNTY, FLORIDA Schedule of Findings and Questioned Costs Federal Awards Programs and State Financial Assistance Projects Year Ended September 30, 2014 Circumstance: The Federal Emergency Management Administration (FEMA) Program (97.036) for beach renourishment largely incurred older expenditures due to garnering the grantors concurrency on the method of allocation of design expenditures between storm related and normal erosion before submitting the first draw for reimbursement. Letting a single contract for both grant and non-eligible grant activity is an allowable and efficient practice. Current contract scopes let during FY14 forward include additional detail that creates documentation without question and thus a quicker turn around to request reimbursement. The Airport Improvement Program (20.106) largely incurred older expenditures due to the invoicing of allowable pre-award expenditures. Capital airport projects require an independent third party to prepare a cost estimate prior to application of a grant capital project. The cost estimate is a required document within the application. Expenditures are eligible for reimbursement until the grant application is submitted, the grantor awards the project and a grant contract is fully executed. This process is several months long. In addition, the estimate was not submitted for reimbursement until the construction phase produced the first invoice. This created a significant time delay. Corrective Action: The Office of Management and Budget (OMB) internal control protocol will be updated to expand the protocol to address the identification of pre-award expenditure and target a draw request within 30-45 days after grant award execution. Estimated Corrective Acton Date: September 30, 2015 County Contact and Telephone Number: Therese Stanley, 239-252-2959 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. 2014-002 Use of E-Verifv State of Florida, Department of Transportation CSFA 55.010 Public Transit Block Grant Award No. AQQ16, Award Year—2012 Criteria The Vendor/Contractor is required to utilize U.S. Department of Homeland Security's E-Verify system to verify the employment eligibility of all new employees hired by the Vendor/Contractor during the term of the contract. Condition The Vendor/Contractor did not use the E-Verify system for employees hired during the County's 2014 fiscal year. 189 COLLIER COUNTY, FLORIDA Schedule of Findings and Questioned Costs 13A Federal Awards Programs and State Financial Assistance Projects Year Ended September 30, 2014 Context The Vendor/Contractor hired 13 employees during the County's 2014 fiscal year. While the E- Verify system was not used, the Vendor/Contractor has a policy requiring a properly completed and signed Form 1-9 be provided prior to employment. All 13 employees hired during the County's 2014 fiscal year submitted signed 1-9 Forms. Vendor/Contractor personnel reviewed acceptable forms of identification and signed the forms as well. Questioned Costs None Cause The Vendor/Contractor did not comply with the terms of the agreement to utilize E-Verify and the County's monitoring procedures did not identify this issue. Effect The use of E-Verify is a more effective tool for determining the eligibility of a person for employment and would decrease the chance of hiring an ineligible person leading to questioned/unallowable costs. Recommendation County grant personnel should understand and become familiar with the terms and conditions of their vendor/contractor agreements and develop tools to assist in the effective monitoring of compliance requirements. Views of Responsible Officials and Corrective Action Plan Circumstance: The County currently has protocols in place to require use of E-Verify in all vendor contracts as well as obtain verification the vendor is registered to use the E-Verify system. In this case, the vendor was assumed by another company and proof of registration by the new company was inadvertently overlooked. Corrective Action: OMB partners with Purchasing to coordinate and review grant solicitations and contracts for compliance including E-Verify. Management has instituted protocols to review assumption agreements to include proof the new company is registered to use E-Verify. The managing Department of the vendor contract immediately instituted a control with the transit operator vendor. Standard procedure requires each employee that supports transit system operations hired by the vendor to be issued a Collier County security badge in order to access allowed County facilities. This badge is no longer approved for issuance by Collier County's Public Transit Manager until the E-Verify proof of the new hire is provided. Estimated Corrective Acton Date: September 30, 2015 County Contact and Telephone Number: Therese Stanley, 239-252-2959 190 13A COLLIER COUNTY, FLORIDA Summary Schedule of Prior Audit Findings Year Ended September 30, 2014 Prior-Year Findings and Questioned Costs - Finding 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 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. Fiscal 2013 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 had 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 CSFA 55.010, there was a 254 day time lag between the earliest invoice posting date and the actual reimbursement date. Current Status Based on our testing of cash drawdowns in fiscal year 2014, it appears further improvements have been made with regard to timely reimbursement requests for the two programs noted to still have issues in fiscal year 2013, CFDA 20.205 and CSFA 55.010. However, for CSFA 55.010, auditors noted that one of the two drawdown requests tested had a 500 day time lag between the payment earliest invoice and the related drawdown request date. While some improvement was noted, we identified excessive lag times for one sample selection for CSFA 55.010. This finding is considered partially cleared. 191 13A COLLIER COUNTY, FLORIDA Summary Schedule of Prior Audit Findings Year Ended September 30, 2014 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. 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 Corrective action was taken. 2013-001 Timely Expenditure Requirements Federal Program Information U.S. Department of Housing and Urban Development CFDA 14.218 CDBG— Community Development Block Grants/Entitlement Grants Condition The County's 60 day drawdown ratios measured on August 2, 2012 and 2013 were 2.06 and 2.65, respectively. Recommendation We recommend that the 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 the 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. Current Status Corrective action was taken. 192 13A CliftonLarsonAllen LLP 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 (County) as of and for the fiscal year ended September 30, 2014, and have issued our report thereon dated February 13, 2015. Auditors' Responsibility We conducted our audit in accordance with auditing standards generally accepted in the United States of America; the standards applicable to financial audits contained in Government Auditing Standards, issued by the Comptroller General of the United States; OMB Circular A-133, Audits of States, Local Governments, and Non-Profit Organizations; and Chapter 10.550, Rules of the Auditor General. Other Reports and Schedule We have issued our Independent Auditors' 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 Auditors' Report on Compliance for Each Major Federal Program and State Project and Report on Internal Control over Compliance; Schedule of Findings and Questioned Costs; and Independent Accountants' Report on an examination conducted in accordance with AICPA Professional Standards, Section 601, regarding compliance requirements in accordance with Chapter 10.550, Rules of the Auditor General. Disclosures in those reports and schedule, which are dated February 13, 2015, should be considered in conjunction with this management letter. Prior Audit Findings 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. Official Title and Legal Authority Section 10.554(1)(i)4., Rules of the Auditor General, requires that the name or official title and legal authority for the primary government and each component unit of the reporting entity be disclosed in this management letter, unless disclosed in the notes to the financial statements. This information has been included in the notes to the basic financial statements. NE1 A independent msrba d N308Irtergwrel INTERNATIONAL 13A Honorable Board of County Commissioners Collier County, Florida Financial Condition Section 10.554(1)(i)5.a., Rules of the Auditor General, requires that we report the results of our determination as to whether or not the County has met one or more of the conditions described in Section 218.503(1), Florida Statutes, and identification of the specific condition(s) met. In connection with our audit, we determined that the County did not meet any of the conditions described in Section 218.503(1), Florida Statutes. Pursuant to Sections 10.554(1)(i)5.c. and 10.556(8), Rules of the Auditor General, we applied financial condition assessment procedures. It is management's responsibility to monitor the 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. Annual Financial Report Section 10.554(1)(i)5.b., Rules of the Auditor General, requires that we report the results of our determination as to whether the annual financial report for the County for the fiscal year ended September 30, 2014, filed with the Florida Department of Financial Services pursuant to Section 218.32(1)(a), Florida Statutes, is in agreement with the annual financial audit report for the fiscal year ended September 30, 2014. In connection with our audit, we determined that these two reports were in agreement. Special District Component Units Section 10.554(1)(i)5.d., Rules of the Auditor General, requires that we determine whether or not a special district that is a component unit of a county, municipality, or special district, provided the financial information necessary for proper reporting of the component unit, within the audited financial statements of the county, municipality, or special district in accordance with Section 218.39(3)(b), Florida Statutes. In connection with our audit, we determined that all special district component units provided the necessary information for proper reporting in accordance with Section 218.39(3)(b), Florida Statutes. Other Matters Section 10.554(1)(i)2., 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)3., 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. 2 13A Honorable Board of County Commissioners Collier County, Florida Purpose of this Letter 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, the Board of County Commissioners, and applicable management, and is not intended to be and should not be used by anyone other than these specified parties. aLL97 CliftonLarsonAllen LLP Naples, Florida February 13, 2015 3 13A COLLIER COUNTY, FLORIDA BOARD OF COUNTY COMMISSIONERS Appendix A—Status of Prior Year's Findings and Recommendations Year Ended September 30, 2014 Prior Year Findings and Current Year Status Recommendations Cleared Partially Cleared Not Cleared 2012-02 Significant X Deficiency 2012-03 Material X Weakness 2013-001 Significant X Deficiency 2013-002 Management X Letter Comment 4 13A CliftonLarsonAllen LLP CLAconnect.corn CliftonLarsonAllen INDEPENDENT ACCOUNTANTS' REPORT Honorable Board of County Commissioners Collier County, Florida We have examined Collier County, Florida's (County) compliance with Section 218.415, Florida Statutes, regarding the investment of public funds during the year ended September 30, 2014. Management is responsible for the County's compliance with those requirements. Our responsibility is to express an opinion on the County's compliance based on our examination. Our examination was conducted in accordance with attestation standards established by the American Institute of Certified Public Accountants and, accordingly, included examining, on a test basis, evidence about the County's compliance with those requirements and performing such other procedures as we considered necessary in the circumstances. We believe that our examination provides a reasonable basis for our opinion. Our examination does not provide a legal determination on the County's compliance with specified requirements. In our opinion, the County complied, in all material respects, with the aforementioned requirements for the year ended September 30, 2014. This report is intended solely for the information and use of the County 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. Zd't 4114-7t //97 CliftonLarsonAllen LLP Naples, Florida February 13, 2015 NEXTAindepeldert neateraFNagaaktematimal INTERNATIONAL 1 3 A 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 13A TABLE 1 Calculation of Collier County General Governmental Debt Ratio For the Fiscal Year Ended September 30,2014 Bondable revenues,as defined by Collier County Debt Policy: Current Ad Valorem Taxes $ 242,767,050 Governmental Impact Fees 19,188,316 Half Cent Sales Tax 35,786,084 Developmental Fees 21,953,187 State Revenue Sharing 9,166,152 5th Cent Local Option Gas Tax 4,969,910 6th Cent Local Option Gas Tax 6,483,494 Constitutional Gas Tax 4,005,482 Seventh Cent Gas Tax 1,727,580 Ninth Cent Gas Tax 1,369,959 Parks and Recreation Fees 6,758,751 Tourist Development Tax 19,136,960 Court Facilities Fees 1,013,318 Communications Services Tax 5,051,603 Total bondable revenues $ 379,377,846 Fiscal 2014 governmental debt service requirements: Series 2005 Gas Tax Bonds Principal: 1,690,000 Interest: 2,258,806 Series 2012 Gas Tax Bonds Principal: 6,350,000 Interest: 1,759,150 Series 2010 Special Obligation Bonds Principal: 1,795,000 Interest: 2,255,263 Series 2010B Special Obligation Bonds Principal: 1,885,000 Interest: 838,700 Series 2011 Special Obligation Bonds Principal: 5,465,000 Interest: 3,851,556 Series 2013 Special Obligation Bonds Principal: - Interest: 2,728,351 Total fiscal 2014 governmental debt service requirements $ 30,876,826 Governmental debt ratio of fiscal year 2014 debt service requirements to total bondable revenues(13.0%maximum allowed by County policy) 8.1% Notes: Debt service is based upon current amortization tables for the fiscal year indicated. Debt prepayments are not included as debt service requirements. 1 13A TABLE 2 Calculation of Collier County Enterprise Debt Ratios For the Fiscal Year Ended September 30,2014 Collier County Water and Sewer District: Total Sales Revenue $ 104,921,033 Allowance for Funds Prudently Invested - Miscellaneous Revenue 3,003,311 Total Operating Revenue 107,924,344 Non-Operating Revenue 1,589,740 Gross Revenue 109,514,084 Less:Operation and Maintenance Expense(excluding Depreciation and Amortization) 69,709,955 Net Revenue Available for Debt Service(1) $ 39,804,129 Total Fiscal Year 2014 Debt Service on Bonds(2) $ 9,952,972 Net Revenue Debt Service Coverage on Bonded Debt (100%Required)-(1/2) 400% Other Pledged Funds: System Development Fees(Impact Fees) $ 11,050,253 Special Assessment Proceeds 138 Total Pledged Funds Available for Debt Service(3) $ 50,854,520 Total Fiscal Year 2013 Debt Service on Bonds(4) $ 9,952,972 Total Pledged Funds Debt Service Coverage on Bonded Debt (125%Required)-(3/4) 511% Total Pledged Funds Available for Debt Service After Payment of Bonds(5) $ 40,901,548 Total Fiscal Year 2014 Debt Service on Subordinated Indebtedness(6) $ 11,595,393 Calculated Coverage on Subordinated Indebtedness-(5/6) 353% Total Pledged Funds Available for System Purposes $ 29,306,155 2 13A Summary Debt Statement for Fiscal Year 2014 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 9.4%, as of September 30, 2013, to 8.1% for the fiscal year ended September 30, 2014. The decrease in the debt ratio for FY-2014 is primarily the result of an overall decline in annual debt service payments of 10.3%. The decrease in annual debt service payments is primarily a result of the refinancing of the remaining portions of the Series 2005 Gas Tax Revenue Bonds. Within the bondable revenues, developmental fee collections increased by 19.4%, tourist development tax receipts increased by 18.3% and half cent sales tax revenues increased by 11.2%. Overall,recent debt restructurings, coupled with the stabilization of general governmental revenues, will likely produce a decrease in the general governmental debt ratio for the fiscal year ending 2015, assuming no new debt issuance. In May of 2014, Collier County refinanced substantially all of its outstanding Series 2005 Gas Tax Revenue Bonds with the Series 2014 Gas Tax Refunding Revenue Bond. The Series 2014 bonds have a fixed interest rate of 2.3%and achieved a net present value savings on the refunded bonds of 11.4%. Governmental Debt Ratings Table: Current Ratings (as of 2/10/2015) 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 A 1 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. 3 13 Qr In November of 2014, Standard and Poor's upgraded Collier County's Special Obligation Bonds from AA to AA+. 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 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 2014 gas tax revenues covered the current year debt service payments on all outstanding Gas Tax Revenue bonds at 154%. 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 impact fees and special assessments must cover bonded debt at 125%. Net revenue coverage on bonded debt was 400% and total pledged funds coverage on bonded debt was 511% for fiscal year 2014, up from 315%and 430%, respectively, for FY-2013. Bonded debt coverages increased due to the decrease in bonded debt service achieved through State Revolving Fund funded refinancing. Conversely, the District's calculated coverage on subordinated debt, all in the form of State Revolving Fund Loans, decreased from 429% to 353% as a result of the refinancing. The total pledged funds coverage required by the subordinated loan agreements varies between 115% and 125%, depending upon the individual loan agreement. Net revenue available for debt service increased during fiscal year 2014, mainly due to an increase in charges for services due to increased billed water consumption. 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. 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 2.4%. The advance refunding achieved a net present value savings of 9.6%on the refunded bonds. 4 13A Enterprise Debt Ratings Table: Current Ratings (as of 2/10/2015) Fitch Moody's Standard & Poor's* Water and Sewer Revenue Bonds AAA Aa2 - *-Standard&Poor's does not currently rate County Water and Sewer Revenue Bonds. In June of 2014, Fitch Ratings upgraded the District's Water and Sewer Revenue Bonds to AAA. A rating of AAA is an indication by Fitch Ratings of an investment grade instrument with very little credit risk. 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. Water, wastewater and irrigation quality water user rates and miscellaneous revenues are used to recover system operating, maintenance and capital costs as well as pay debt service. In order to ensure adequate funding a rate study was recently conducted by an independent rate consultant. During September 2014 the District's governing board approved phased rate increases. The District's water and sewer user rates increased by 9.0%, effective 10/01/2014 with subsequent increases of 5.0% effective 10/01/2015 and 10/01/2016. Over recent years the District has operated on a pay as you go basis, avoided borrowing and maintained financial stability. The District's current focus is the optimization of resources and risk based prioritization of capital projects within the current rate structure. 5 Collier County, Florida Clerk of the Circuit Court Financial Statements and Supplemental Reports Year Ended September 30, 2014 CliftonLarsonAllen 13A Collier County, Florida Clerk of the Circuit Court Financial Statements and Other Reports Year Ended September 30, 2014 Contents Independent Auditors'Report 1 Financial Statements Balance Sheet—Governmental Funds 4 Statement of Revenues, Expenditures, and Changes in Fund Balance— Governmental Funds 5 Statement of Revenues, Expenditures, and Changes in Fund Balance—Budget and Actual—General Fund 6 Statement of Revenues, Expenditures, and Changes in Fund Balance—Budget and Actual—Court Services Fund 7 Statement of Revenues, Expenditures, and Changes in Fund Balance—Budget and Actual—Other Special Revenue Fund 8 Statement of Fiduciary Net Position—Agency Fund 9 Notes to Financial Statements 10 Supplementary Information Combining 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 Independent Accountants' Report 30 13A CliftonLarsonAllen LLP CLAconnect.com CliftonLarsonAllen INDEPENDENT AUDITORS'REPORT Honorable Dwight E. Brock Clerk of the Circuit Court Collier County,Florida Report on the Financial Statements We have audited the accompanying 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, 2014, and the related notes to the fmancial statements, which collectively comprise the Clerk's fmancial 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 fmancial 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 fmancial statements that are free from material misstatement,whether due to fraud or error. Auditors'Responsibility Our responsibility is to express opinions on these fmancial 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 fmancial 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 fmancial 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 fmancial statements. We believe that the audit evidence we have obtained is sufficient and appropriate to provide a basis for our audit opinions. N E11 I A Anifdeepeldertndrls uF Naga klemati0mal 1 INTERNATIONAL 1 3 A Honorable Dwight E. Brock Clerk of the Circuit Court Opinions In our opinion, the 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 for the Clerk as of September 30, 2014, 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 accounting principles generally accepted in the United States of America. Emphasis of Matter As discussed in Note 1 to the financial statements, the financial statements referred to above were prepared solely for the purpose of complying with the Rules of the Auditor General of the State of Florida. In conformity with the Rules, the accompanying financial statements are intended to present the financial position and changes in financial position of each major fund, and the aggregate remaining fund information, only for that portion of the major funds, and the aggregate remaining fund information, of Collier County, Florida that is attributable to the Clerk. They do not purport to,and do not,present fairly the financial position of Collier County as of September 30, 2014, and the changes in its financial position for the fiscal year then ended in conformity with accounting principles generally accepted in the United States of America. Our opinion is not modified with respect to these matters. Other Matters Required Supplementary Information Management has omitted management's discussion and analysis that accounting principles generally accepted in the United States of America require to be presented to supplement the basic financial statements. Such missing 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 fmancial reporting for placing the basic financial statements in an appropriate operational, economic, or historical context. Our opinion on the basic financial statements is not affected by this missing information. Supplementary Information Our audit was conducted for the purpose of forming opinions on the financial statements that collectively comprise the Clerk's financial statements. The combining statement, as listed in the table of contents, is presented for purposes of additional analysis and is not a required part of the financial statements. The combining statement is the responsibility of management and was derived from and relate directly to the underlying accounting and other records used to prepare the fmancial statements. Such information has been subjected to the auditing procedures applied in the audit of the fmancial statements and certain additional procedures, including comparing and reconciling such information directly to the underlying accounting and other records used to prepare the financial statements or to the 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 statement is fairly stated in all material respects in relation to the financial statements as a whole. 2 13A Honorable Dwight E. Brock Clerk of the Circuit Court Other Reporting Required by Government Auditing Standards In accordance with Government Auditing Standards, we have also issued a report dated January 20, 2015 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 included under the heading 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. The purpose of that report is to describe the scope of our testing of internal control over fmancial 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 the Clerk's internal control over financial reporting and compliance. LLB CliftonLarsonAllen LLP Naples,Florida January 20, 2015 3 13A Collier County, Florida Clerk of the Circuit Court Balance Sheet— Governmental Funds September 30, 2014 Other Total Court Special Governmental General Services Revenue Funds Assets Cash and cash equivalents $ 3,140,630 $ 802,232 $ 4,770,978 $ 8,713,840 Accounts receivable 113,436 - - 113,436 Due from other governments 8,606 52,136 - 60,742 Total assets $ 3,262,672 $ 854,368 $ 4,770,978 $ 8,888,018 Liabilities and fund balances Liabilities: Vouchers payable and accrued liabilities $ 537,310 $ 227,386 $ 33,395 $ 798,091 Due to Collier County,Florida Board of County Commissioners 652,108 - - 652,108 Due to other governments - 626,982 - 626,982 Deposits 2,073,254 - - 2,073,254 Total liabilities 3,262,672 854,368 33,395 4,150,435 Fund balance: Restricted - - 4,737,583 4,737,583 Total fund balance - - 4,737,583 4,737,583 Total liabilities and fund balance $ 3,262,672 $ 854,368 $ 4,770,978 $ 8,888,018 See accompanying Notes to Financial Statements. 4 13A Collier County, Florida Clerk of the Circuit Court Statement of Revenues, Expenditures, and Changes in Fund Balance Governmental Funds Year Ended September 30, 2014 Total Court Other Special Governmental General Services Revenue Funds Revenues: Intergovernmental $ - $ 439,682 $ - $ 439,682 Charges for services 2,882,760 6,782,037 1,394,089 11,058,886 Miscellaneous 73,388 - - 73,388 Interest income 16,916 8,216 8,331 33,463 Total revenues 2,973,064 7,229,935 1,402,420 11,605,419 Expenditures: General government: Personal services 6,215,599 6,267,170 818,956 13,301,725 Operating 1,644,181 289,439 395,143 2,328,763 Capital outlay 180,746 - - 180,746 Total expenditures 8,040,526 6,556,609 1,214,099 15,811,234 Excess(deficiency)of revenues over(under)expenditures (5,067,462) 673,326 188,321 (4,205,815) Other financing sources(uses): Transfers in: Collier County,Florida Board of County Commissioners appropriations 5,719,500 - - 5,719,500 Transfers out: Distribution of excess fees to State of Florida - (673,326) - (673,326) Distribution of excess appropriations to Collier County,Florida Board of County Commissioners (652,038) - - (652,038) Total other financing sources(uses) 5,067,462 (673,326) - 4,394,136 Net change in fund balance - - 188,321 188,321 Fund balances—beginning of year - - 4,549,262 4,549,262 Fund balances—end of year $ - $ - $ 4,737,583 $ 4,737,583 See accompanying Notes to Financial Statements. 5 13A Collier County, Florida Clerk of the Circuit Court Statement of Revenues, Expenditures, and Changes in Fund Balance— Budget and Actual General Fund Year Ended September 30, 2014 Variance With Final Budget Budget Positive Original Final Actual (Negative) Revenues: Charges for services $ 2,649,400 $ 2,656,400 $ 2,882,760 $ 226,360 Miscellaneous - - 73,388 (73,388) Interest income 21,000 21,000 16,916 (4,084) Total revenues 2,670,400 2,677,400 2,973,064 148,888 Expenditures: General government: Personal services 6,531,700 6,320,700 6,215,599 105,101 Operating expenditures 1,720,900 1,893,900 1,644,181 249,719 Capital outlay 137,300 182,300 180,746 1,554 Total expenditures 8,389,900 8,396,900 8,040,526 356,374 Excess(deficiency)of revenues over(under)expenditures (5,719,500) (5,719,500) (5,067,462) 652,038 Other financing sources(uses): Transfers in: Collier County,Florida Board of County Commissioners appropriations 5,719,500 5,719,500 5,719,500 - Transfers out: Distribution of excess appropriations to Collier County,Florida Board of County Commissioners - - (652,038) (652,038) Total other financing sources(uses) 5,719,500 5,719,500 5,067,462 (652,038) Net change in fund balance - - - - Fund balance—beginning of year - - - - Fund balance—end of year $ - $ - $ - $ - See accompanying Notes to Financial Statements. 6 13A Collier County, Florida Clerk of the Circuit Court Statement of Revenues, Expenditures, and Changes in Fund Balances —Budget and Actual Court Services Fund Year Ended September 30, 2014 Variance With Final Budget Budget Positive Original Final Actual (Negative) Revenues: Intergovernmental $ 219,000 $ 280,838 $ 439,682 $ 158,844 Charges for services 7,683,700 7,683,700 6,782,037 (901,663) Interest income 8,200 8,200 8,216 16 Total revenues 7,910,900 7,972,738 7,229,935 (742,803) Expenditures: General government: Personal services 7,245,705 7,307,543 6,267,170 1,040,373 Operating expenditures 619,342 619,342 289,439 329,903 Total expenditures 7,865,047 7,926,885 6,556,609 1,370,276 Excess of revenues over expenditures 45,853 45,853 673,326 627,473 Other financing(uses): Transfers out: Distribution of excess fees to State of Florida (45,853) (45,853) (673,326) 627,473 Total other financing(uses) (45,853) (45,853) (673,326) 627,473 Net change in fund balance - - - - Fund balance—beginning of year - - - - Fund balance—end of year $ - $ - $ - $ - See accompanying Notes to Financial Statements. 7 13A Collier County, Florida Clerk of the Circuit Court Statement of Revenues, Expenditures, and Changes in Fund Balance— Budget and Actual Other Special Revenue Fund Year Ended September 30, 2014 Variance With Final Budget Budget Positive Original Final Actual (Negative) Revenues: Charges for services $ 1,425,000 $ 1,425,000 $ 1,394,089 $ (30,911) Interest income 2,500 2,500 8,331 5,831 Total revenues 1,427,500 1,427,500 1,402,420 (25,080) Expenditures: General government: Personal services 973,200 973,200 818,956 154,244 Operating expenditures 1,462,700 1,462,700 395,143 1,067,557 Capital outlay 432,600 432,600 - 432,600 Total expenditures 2,868,500 2,868,500 1,214,099 1,654,401 Net change in fund balance (1,441,000) (1,441,000) 188,321 1,629,321 Fund balance—beginning of year 2,766,3% 4,180,743 4,549,262 368,519 Fund balance—end of year $ 1,325,396 $ 2,739,743 $ 4,737,583 $ 1,997,840 See accompanying Notes to Financial Statements. 8 13A Collier County, Florida Clerk of the Circuit Court Statement of Fiduciary Net Position Agency Fund September 30, 2014 Assets Cash and cash equivalents $ 26,166,962 Liabilities Due to the Collier County, Florida Board of County Commissioners $ 334,138 Due to other governments 800,136 Deposits 25,032,688 Total liabilities $ 26,166,962 See accompanying Notes to Financial Statements. 9 13A Collier County, Florida Clerk of the Circuit Court Notes to Financial Statements September 30, 2014 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 financial statements presented include the general fund, special revenue funds,and agency funds of the Clerk's office. The accompanying financial statements were prepared for the purpose of complying with Section 218.39(2), Florida Statutes, and Chapter 10.550, Rules of the Auditor General - Local Governmental Entity Audits, which allows the Clerk to only present fund financial statements. These financial statements present only the portion of the funds of Collier County, Florida that are attributable to the Clerk. They are not intended to present fairly the financial position and results of operations of Collier County, Florida 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. There are no separate legal entities (component units)for which the Clerk is considered to be financially accountable. 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 collection of fines, fees costs and service charges and a child support grant. Any surplus of revenues after expenditures in this fund is remitted to the State in January of the next year. Special revenue funds are retained by the Clerk and budgeted according to requirements of each source. 10 13A Collier County, Florida Clerk of the Circuit Court Notes to Financial Statements September 30, 2014 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 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 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— 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 1 3 A Collier County, Florida Clerk of the Circuit Court Notes to Financial Statements September 30, 2014 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 operations are funded by the collection of fines, fees costs and service charges and a child support grant. Any surplus of revenues after expenditures in this fund is remitted to the State in January of the next year. 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 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 1 3 A Collier County, Florida Clerk of the Circuit Court Notes to Financial Statements September 30, 2014 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 financial resources for these un-matured 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 13A Collier County, Florida Clerk of the Circuit Court Notes to Financial Statements September 30, 2014 1. Summary of Significant Accounting Policies (continued) Use of Estimates The preparation of these 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 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 30,2014. 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 13A Collier County, Florida Clerk of the Circuit Court Notes to Financial Statements September 30, 2014 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 June 1 (for the period starting the next October 1 through September 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. 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 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. 15 13A Collier County, Florida Clerk of the Circuit Court Notes to Financial Statements September 30, 2014 2.Budgetary Process(continued) 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, 2014,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 34,873,202 N/A Total cash and cash equivalents $ 34,880,802 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 financial statements. Interest income is allocated to each fund based on its proportionate balance in the pool. 16 13A Collier County, Florida Clerk of the Circuit Court Notes to Financial Statements September 30, 2014 3. Cash and Cash Equivalents(continued) Cash and cash equivalents as of September 30, 2014, are reported as $8,713,840 and $26,166,962 in the governmental funds and fiduciary funds, respectively. Custodial Credit Risk At September 30, 2014, 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 Financial Statements September 30, 2014 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$16,916 is reported in the general fund for the year ended September 30, 2014,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 financial statements. However, depreciation expense on these assets is recorded in the basic financial statements of Collier County, Florida. 18 13A Collier County, Florida Clerk of the Circuit Court Notes to Financial Statements September 30, 2014 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, Transfer- September 30, 2013 Additions Deductions out 2014 Capital assets depreciated: Machinery and equipment $ 7,512,391 $ 198,347 $ (295,982) $ (4,236) $ 7,410,520 Less accumulated depreciation (4,363,878) (854,884) 270,841 4,236 (4,943,685) Total capital assets depreciated 3,148,513 (656,537) (25,141) - 2,466,835 Total capital assets,net $ 3,148,513 $ (656,537) $ (25,141) $ - $ 2,466,835 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 1,2013 Additions Deletions September 30,2014 Accrued compensated absences $ 1,920,527 $ 833,650 $ 806,230 $ 1,947,947 Of these liabilities, $817,748 is expected to be paid during the fiscal year ending September 30, 2015. These long-term liabilities are not reported in the financial statements of the Clerk since they have not matured. 19 13A Collier County, Florida Clerk of the Circuit Court Notes to Financial Statements September 30, 2014 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 outline 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 13A Collier County, Florida Clerk of the Circuit Court Notes to Financial Statements September 30, 2014 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, 2013 through June 30, 2014, were 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. The current rates, effective July 1, 2014, are 43.24% for County Elected Officials, 21.14% for senior management, 7.37% for regular employees and 12.28% 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, 2014, 2013 and 2013, were $738,661, $562,051 and $452,954,respectively, equal to the required contributions for each year. 21 13A Collier County, Florida Clerk of the Circuit Court Notes to Financial Statements September 30, 2014 8.Related Party Transactions The Board provided funding for the Clerk in the amount of$5,719,500. The Supervisor of Elections provided funding in the amount of a $45,000 fee for financial services performed by the Clerk. At September 30,2014,the Clerk had a payable due to the Board of$986,246, comprised as follows: Distribution of excess fees $ 652,038 Amounts due for various services 70 Agency funds due 334,138 Total due to Board of County Commissioners $ 986,246 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, 2014, the Clerk was charged $2,639,081 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 $300,000 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% named storm 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. 22 13A Collier County, Florida Clerk of the Circuit Court Notes to Financial Statements September 30, 2014 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$39,865 as of September 30, 2014. 23 13A Collier County, Florida Clerk of the Circuit Court Notes to Financial Statements September 30, 2014 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, 2014, the Clerk was involved in approximately 98,722 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 351 bond forfeiture actions. Those cases involve collecting forfeitures of criminal appearance bonds. There are approximately 17 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 trial court staged the case in Collier County pending the outcome of a case in Hillsborough County based upon very similar facts and involving the same issues. The Second District has ruled in favor of the Clerk in the Hillsborough case and the plaintiff sought reconsideration. The reconsideration has been denied but the time for mandate to issue has not expired, so the case is not final. 24 13A Collier County, Florida Clerk of the Circuit Court Combining Statements of Fiduciary Net Position All Agency Funds September 30, 2014 Jury and Clerk's Court Ordinary Agency Registry Witness Total Assets Cash and cash equivalents $ 4,679,422 $ 21,472,964 $ 14,576 $ 26,166,962 Liabilities Due to Collier County,Florida Board of County Commissioners $ 334,138 $ - $ - $ 334,138 Due to other governments 785,560 - 14,576 800,136 Deposits 3,559,724 21,472,964 - 25,032,688 Total liabilities $ 4,679,422 $ 21,472,964 $ 14,576 $ 26,166,962 25 13A 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 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, 2014, and the related notes to the financial statements,which collectively comprise the Clerk's basic financial statements, and have issued our report thereon dated January 20, 2015. Internal Control Over Financial Reporting In planning and performing our audit of the fmancial 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 fmancial 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 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. J ■ MInd�ndentMEr adNaaakBS>�iord 26 1�EXIA INTERNATIONAL 13A Honorable Dwight E. Brock Clerk of the Circuit Court Compliance and Other Matters As part of obtaining reasonable assurance about whether the Clerk's fmancial 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. e%/44-7(ZdA41t-itAlZ/0-0c_ZZ.)e CliftonLarsonAllen LLP Naples,Florida January 20,2015 27 13A CliftonLarsonAllen LLP CLAconnect.com CliftonLarsonAllen MANAGEMENT LETTER Honorable Dwight E.Brock Clerk of the Circuit Court Collier County,Florida Report on the Financial Statements We have audited the financial statements of the Collier County, Florida Clerk of the Circuit Court(Clerk),as of and for the fiscal year ended September 30,2014 and have issued our report thereon dated January 20,2015. Auditors'Responsibility We conducted our audit in accordance with auditing standards generally accepted in the United States of America; the standards applicable to fmancial 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. Other Reports and Schedule 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 Independent Accountants' Report on an examination conducted in accordance with AICPA Professional Standards, Section 601, regarding compliance requirements in accordance with Chapter 10.550, Rules of the Auditor General. Disclosures in those reports, which are dated January 20,2015, should be considered in conjunction with this management letter. Prior Audit Findings 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 fmancial audit report. There were no findings or recommendations made in the preceding annual financial audit report. Official Title and Legal Authority Section 10.554(1)(i)4.,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 fmancial statements. See Note 1 in the notes to the financial statements. r 1 ,:a Mindeperdert,u,brrdNelahterrEticnal 28 INTERNATIONAL 13A Honorable Dwight E. Brock Clerk of the Circuit Court Other Matters Section 10.554(1)(i)2., 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)3.,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 fmancial 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 fmdings. Purpose of this Letter 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 the Clerk and applicable management, and is not intended to be and should not be used by anyone other than these specified parties. CliftonLarsonAllen LLP Naples,Florida January 20,2015 29 13A CliftonLarsonAllen LLP CLAconnect.com CliftonLarsonAllen INDEPENDENT ACCOUNTANTS'REPORT Honorable Dwight E.Brock Clerk of the Circuit Court Collier County,Florida We have examined the Collier County, Florida Clerk of the Circuit Court (Clerk) compliance with Section 218.415, Florida Statutes, regarding the investment of public funds, and Sections 28.35 and 28.36, Florida Statutes, regarding budget requirements and expenditures, during the year ended September 30, 2014. Management is responsible for Clerk's compliance with those requirements. Our responsibility is to express an opinion on the Clerk's compliance based on our examination. Our examination was conducted in accordance with attestation standards established by the American Institute of Certified Public Accountants and,accordingly,included examining,on a test basis,evidence about the Clerk's compliance with those requirements and performing such other procedures as we considered necessary in the circumstances. We believe that our examination provides a reasonable basis for our opinion. Our examination does not provide a legal determination on the Clerk's compliance with specified requirements. In our opinion,the Clerk complied, in all material respects,with the aforementioned requirements for the year ended September 30, 2014. This report is intended solely for the information and use of 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. //)1 CliftonLarsonAllen LLP Naples,Florida January 20,2015 NEXI A Muldepedent!a se' Neaahte ationa 30 INTERN Al ION AL Collier County, Florida Property Appraiser Financial Statements and Supplemental Reports Year Ended September 30, 2014 CliftonLarsonAllen 13A Collier County, Florida Property Appraiser Financial Statements and Other Reports Year Ended September 30, 2014 Contents Independent Auditors' Report 1 Financial Statements Balance Sheet—General Fund 3 Statement of Revenues, Expenditures, and Changes in Fund Balance—General Fund 4 Statement of Revenues, Expenditures, and Changes in Fund Balance—Budget and Actual—General Fund—Budgetary Basis 5 Notes to 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 Financial Statements Performed in Accordance with Government Auditing Standards 18 Management Letter 20 Schedule of Findings and Responses 22 Independent Accountants' Report 23 13A CliftonLarsonAllen LLP CLAconnect.com CliftonLarsonAllen INDEPENDENT AUDITORS'REPORT Honorable Abe Skinner Property Appraiser Collier County,Florida Report on the Financial Statements We have audited the accompanying financial statements of the general fund of the Collier County, Florida Property Appraiser (Property Appraiser), as of and for the year ended September 30, 2014, and the related notes to the financial statements,which collectively comprise the Property Appraiser'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 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 an opinion 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 opinion. Nl \1 f"1 anir>.i�cla+rraibsa Nmdainareliaiel 1 I NTtR NATI NT AI. Honorable Abe Skinner 13 A Property Appraiser Opinion In our opinion, the 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, 2014, and the changes in financial position and budgetary comparison of its general fund for the year then ended in accordance with accounting principles generally accepted in the United States of America. Emphasis of Matter As discussed in Note 1 to the financial statements, the financial statements referred to above were prepared solely for the purpose of complying with the Rules of the Auditor General of the State of Florida.In conformity with the Rules, the accompanying financial statements are intended to present the financial position and changes in financial position of each major fund, only for that portion of the major funds of Collier County, Florida that is attributable to the Property Appraiser. They do not purport to, and do not, present fairly the financial position of Collier County,Florida as of September 30,2014,and the changes in its financial position for the fiscal year then ended in conformity with accounting principles generally accepted in the United States of America. Our opinion is not modified with respect to these matters. Other Matters Required Supplementary Information Management has omitted management's discussion and analysis that accounting principles generally accepted in the United States of America require to be presented to supplement the basic financial statements. Such missing 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 fmancial reporting for placing the basic financial statements in an appropriate operational, economic, or historical context. Our opinion on the basic financial statements is not affected by this missing information. Other Reporting Required by Government Auditing Standards In accordance with Government Auditing Standards,we have also issued our report 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 included under the heading 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. 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 Property Appraiser's internal control over financial reporting and compliance. e/e/ei C-ZOA 41/7(- 1/1. ZZ CliftonLarsonAllen LLP Naples,Florida January 7,2015 2 1 3 A Collier County, Florida Property Appraiser Balance Sheet— General Fund September 30, 2014 Assets Cash and cash equivalents $ 1,083,059 Total assets $ 1,083,059 Liabilities and fund balance Liabilities: Accounts payable and accrued expenses $ 150,211 Due to Collier County,Florida Board of County Commissioners 838,892 Due to other taxing districts 93,956 Total liabilities 1,083,059 Fund balance - Total liabilities and fund balance $ 1,083,059 See accompanying Notes to Financial Statements. 3 1 3 A Collier County, Florida Property Appraiser Statement of Revenues, Expenditures, and Changes in Fund Balance General Fund Year Ended September 30, 2014 Revenues: Commissions and fees $ 6,478,410 Miscellaneous 811,608 Interest 5,472 Total revenues 7,295,490 Expenditures: General government: Personal services 4,591,726 Operating 1,654,073 Capital outlay 116,843 Distribution of excess fees to other taxing districts 93,956 Total expenditures 6,456,598 Excess ofrevenues over expenditures 838,892 Other financing uses: Distribution of excess fees to Collier County, Florida Board of County Commissioners (838,892) Total other financing uses (838,892) Net change in fund balance - Fund balance,beginning of year - Fund balance, end of year $ - See accompanying Notes to Financial Statements. 4 13A Collier County, Florida Property Appraiser Statement of Revenues, Expenditures, and Changes in Fund Balance— Budget and Actual General Fund (Budgetary Basis) Year Ended September 30, 2014 Variance With Final Budget Budget Positive Original Final Actual (Negative) Revenues: Commissions and fees $ 6,423,130 $ 6,423,130 $ 6,478,410 $ 55,280 Interest Revenue - - 5,472 5,472 Miscellaneous - - 811,608 811,608 Total revenues 6,423,130 6,423,130 7,295,490 872,360 Expenditures: General government: Personal services 5,088,080 5,088,080 4,591,726 496,354 Operating 1,310,050 1,310,050 1,654,073 (344,023) Capital outlay 25,000 25,000 116,843 (91,843) Total expenditures 6,423,130 6,423,130 6,362,642 60,488 Excess of revenues over expenditures - - 932,848 932,848 Other financing uses: Distribution of excess fees to Collier County,Florida Board of County Commissioners - - (838,892) (838,892) Distribution of excess commissions and fees to other governmental agencies - - (93,956) (93,956) Total other financing uses - - (932,848) (932,848) Net change in fund balance - - - - Fund balance,beginning of year - - - - Fund balance,end of year $ - $ - $ - $ - See accompanying Notes to Financial Statements. 5 13A Collier County, Florida Property Appraiser Notes to Financial Statements September 30, 2014 1. Summary of Significant Accounting Policies The following is a summary of significant accounting principles and policies used in the preparation of the financial statements of the Collier County,Florida Property Appraiser(Property Appraiser). Reporting Entity The Property Appraiser is an elected official of the County, pursuant to the Constitution of the State of Florida, Article VIII, Section 1(d). The Property Appraiser is part of the primary government of the County. Although the Board and the Florida Department of Revenue approve the Property Appraiser's total operating budget, the Property Appraiser is responsible for the administration and the operation of the Property Appraiser's office. The Property Appraiser's financial statements include only the funds of the Property Appraiser's office. There are no separate legal entities (component units) for which the Property Appraiser is considered to be financially accountable. The financial 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 fmancial statements have been prepared for the purpose of complying with Section 218.39(2), Florida Statutes, and Chapter 10.550, Rules of the Auditor General — Local Governmental Entity Audits, which allows the Property Appraiser to only present fund financial statements. These financial statements present only the portion of the funds of Collier County, Florida that are attributable to the Property Appraiser. They are not intended to present fairly the financial position and results of operations of Collier County, Florida in conformity with accounting principles generally accepted in the United States of America. The financial activities of the Property Appraiser, as a constitutional officer, are included in the Collier County, Florida Comprehensive Annual Financial Report. These 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 1 3 A Collier County, Florida Property Appraiser Notes to Financial Statements September 30, 2014 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 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 13A Collier County, Florida Property Appraiser Notes to Financial Statements September 30, 2014 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 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 13A Collier County, Florida Property Appraiser Notes to Financial Statements September 30, 2014 1. Summary of Significant Accounting Policies (continued) Use of Estimates The preparation of the 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 financial statements and the reported amounts of revenues and expenditures during the period. Actual results could differ from those estimates. 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 13A Collier County, Florida Property Appraiser Notes to Financial Statements September 30, 2014 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, 2014, from the budgetary basis of accounting to the GAAP basis of accounting are as follows: Miscellaneous Revenues Budgetary Basis $ - Revenues not budgeted: Miscellaneous 811,608 Interest 5,472 GAAP Basis $ 817,080 During the year,the Property Appraiser exceeded the budgeted amount for operating expenditures and capital outlay mainly as a result of computer equipment, office equipment, vehicles, contractual services and aerial photography 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 13A Collier County, Florida Property Appraiser Notes to Financial Statements September 30, 2014 3. Cash and Cash Equivalents At September 30, 2014, the carrying value of the Property Appraiser's cash and cash equivalents was as follows: Carrying Type Value Cash on hand $ 125 Demand deposits 1,082,934 Total cash and cash equivalents $ 1,083,059 Custodial Credit Risk At September 30, 2014, 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 13A Collier County, Florida Property Appraiser Notes to Financial Statements September 30, 2014 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 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, 2014: October 1 September 30 2013 Additions Deductions 2014 Improvements other than buildings $ 15,332 $ - $ - $ 15,332 Machinery and equipment 1,568,340 116,843 (124,355) 1,560,828 Total capital assets 1,583,672 116,843 (124,355) 1,576,160 Less accumulated depreciation (1,273,811) (121,412) 124,355 (1,270,868) Total capital assets,net $ 309,861 $ (4,569) $ - $ 305,292 12 13A Collier County, Florida Property Appraiser Notes to Financial Statements September 30, 2014 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 2013 Increase Decrease 2014 Accrued compensated absences $ 257,708 $ 57,374 $ 15,183 $ 299,899 Of these liabilities, approximately $150,000 is expected to be paid during the fiscal year ending September 30, 2015, which will be included in the operating costs of the general fund when expended. These long-term liabilities are not reported in the 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 13A Collier County, Florida Property Appraiser Notes to Financial Statements September 30, 2014 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, 2013 through June 30, 2014 were 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. The current rates, effective July 1, 2014, are 43.24% for county elected officials, 21.14% for senior management, 7.37% for regular employees and 12.28% 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 13A Collier County, Florida Property Appraiser Notes to Financial Statements September 30, 2014 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 30,2014,2013 and 2012,were$315,882,$203,538, and$161,054,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$29,170 as of September 30, 2014. 15 13A Collier County, Florida Property Appraiser Notes to Financial Statements September 30, 2014 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, 2014, the Board paid fees to the Property Appraiser that amounted to$5,774,663. At September 30, 2014,the Property Appraiser had a payable due to the Board of$838,892, respectively, comprised as follows: Distribution of excess commissions and fees $ 838,892 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 year ended September 30, 2014, the Property Appraiser was charged $871,880 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 $300,000 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 13A Collier County, Florida Property Appraiser Notes to Financial Statements September 30, 2014 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 13A (to 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 financial statements of the general fund of the Collier County, Florida Property Appraiser (Property Appraiser), as of and for the year ended September 30, 2014, and the related notes to the financial statements, which collectively comprise the Property Appraiser's financial statements,and have issued our report thereon dated January 7, 2015.. Internal Control Over Financial Reporting In planning and performing our audit of the fmancial statements, we considered the 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 financial statements,but not for the purpose of expressing an opinion on the effectiveness of the Property Appraiser's internal control. Accordingly,we do not express an opinion on the effectiveness of the Property Appraiser'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 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. NEXIAFo a Nue Irterrettonel 18 IN IF RN AT I ON AI 13A Honorable Abe Skinner Property Appraiser Compliance and Other Matters As part of obtaining reasonable assurance about whether the Property Appraiser'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. i z LLB CliftonLarsonAllen LLP Naples, Florida January 7,2015 19 13A CliftonLarsonAllen LLP CLAconnect.com CliftonLarsonAllen MANAGEMENT LETTER Honorable Abe Skinner Property Appraiser Collier County, Florida Report on the Financial Statements We have audited the financial statements of the general fund of the Collier County,Florida Property Appraiser (Property Appraiser)as of and for the year ended September 30,2014,and have issued our report thereon dated January 7,2015. Auditors'Responsibility 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. Other Reports and Schedule 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 Independent Accountants' Report on an examination conducted in accordance with AICPA Professional Standards, Section 601, regarding compliance requirements in accordance with Chapter 10.500, Rules of the Auditor General. Disclosures in those reports which are dated January 7,2015 should be considered in conjunction with this management letter. Prior Audit Findings 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. Official Title and Legal Authority Section 10.554(1)(i)4.,Rules of the Auditor General,requires that the name or official title and legal authority for the primary government and each component unit of the reporting entity be disclosed in this management letter,unless disclosed in the notes to the financial statements. See Note 1 in the notes to financial statements. • Nl:X 1; A,i del+i*eA d%Wriar1.rd 20 INTENhATIONAL Honorable Abe Skinner 13A Property Appraiser Other Matters Section 10.554(1)(i)2., 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)3.,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. Purpose of this Letter 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 the Property Appraiser and applicable management, and is not intended to be and should not be used by anyone other than these specified parties. eVa C Zd'I 1Z/0-0 ZZ CliftonLarsonAllen LLP Naples,Florida January 7,2015 21 13A Collier County, Florida Property Appraiser Schedule of Findings and Responses September 30, 2014 Prior Year Findings and Recommendations Current Year Status Partially Not Prior Year Findings Cleared Cleared Cleared Material IC 2012-01 Financial Statement Close Process Weakness X • Material IC 2013-001 Invoice Approvals Weakness X 22 13A CliftonLarsonAllen LLP CLAconnect.com CliftonLarsonAllen INDEPENDENT ACCOUNTANTS' REPORT Honorable Abe Skinner Property Appraiser Collier County, Florida We have examined the Collier County, Florida Property Appraiser's (Property Appraiser) compliance with Section 218.415, Florida Statutes, regarding the investment of public funds during the year ended September 30, 2014. Management is responsible for the Property Appraiser's compliance with those requirements. Our responsibility is to express an opinion on the Property Appraiser's compliance based on our examination. Our examination was conducted in accordance with attestation standards established by the American Institute of Certified Public Accountants and, accordingly, included examining, on a test basis, evidence about the Property Appraiser's compliance with those requirements and performing such other procedures as we considered necessary in the circumstances. We believe that our examination provides a reasonable basis for our opinion. Our examination does not provide a legal determination on the Property Appraiser's compliance with specified requirements. In our opinion, the Property Appraiser complied, in all material respects, with the aforementioned requirements for the year ended September 30,2014. This report is intended solely for the information and use of 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. eZed7C/4144°-7C-mi-ZZA■c_ LLB CliftonLarsonAllen LLP Naples,Florida January 7, 2015 NF,XIA a„ °e lad Nana Irt9rci 23 Collier County, Florida Sheriff Financial Statements and Supplemental Reports Year Ended September 30, 2014 ■M■MillIMMINN CliftonLarsonAllen 13A Collier County, Florida Sheriff Financial Statements and Other Reports Year Ended September 30, 2014 Contents Independent Auditors' Report 1 Financial Statements Balance Sheet—Governmental Funds 4 Statement of Revenues, Expenditures, and Changes in Fund Balances— Governmental Funds 5 Statement of Revenues, Expenditures, and Changes in Fund Balances— Budget and Actual General Fund 6 Statement of Net Position—Internal Service Fund 7 Statement of Revenues, Expenses, and Changes in Net Position— Internal Service Fund 8 Statement of Cash Flows—Internal Service Fund 9 Statement of Fiduciary Net Position—Agency Funds 10 Notes to Financial Statements 11 Required Supplementary Information Schedule of Funding Progress for the Retiree Health Plan 32 Combining Financial Information Combining Statement of Fiduciary Net Position—Agency Funds 33 Combining Statement of Changes in Assets and Liabilities—Agency Funds 34 13A Collier County, Florida Sheriff Financial Statements and Other Reports Year Ended September 30, 2014 Contents (cont.) 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 35 Management Letter 37 Schedule of Findings and Responses 39 Independent Accountants' Report 45 Report on Agreed-Upon Procedures Applied to Investigative Funds 46 13A CliftonLarsonAllen LLP CLAconnect.com CliftonLarsonAllen INDEPENDENT AUDITORS' REPORT Honorable Kevin Rambosk Sheriff Collier County,Florida Report on the Financial Statements We have audited the accompanying 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, 2014, and the related notes to the financial statements, which collectively comprise the Sheriff'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 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 fmancial 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 fmancial 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. NFX I A M indepeidan neater d Neva kRemalimal 1 INTERNATIONAL 13A Honorable Kevin Rambosk Sheriff Opinions In our opinion, the 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 for the Sheriff as of September 30, 2014, and the respective changes in financial position and, where applicable, cash flows and budgetary comparison thereof for the year then ended in accordance with accounting principles generally accepted in the United States of America. Emphasis of Matter As discussed in Note 1 to the financial statements, the financial statements referred to above were prepared solely for the purpose of complying with the Rules of the Auditor General of the State of Florida. In conformity with the Rules, the accompanying financial statements are intended to present the financial position and changes in financial position of each major fund, and the aggregate remaining fund information, only for that portion of the major funds, and the aggregate remaining fund information, of Collier County that is attributable to the Sheriff. They do not purport to, and do not, present fairly the financial position of Collier County as of September 30, 2014, and the changes in its financial position for the fiscal year then ended in conformity with accounting principles generally accepted in the United States of America. Our opinion is not modified with respect to these matters. Other Matters Required Supplementary Information Accounting principles generally accepted in the United States of America require that the Schedule of Funding Progress for the Retiree Health Plan, as listed in the table of contents, be presented to supplement the financial statements. Such information, although not a required part of the financial statements, is required by the Governmental Accounting Standards Board who considers it to be an essential part of financial reporting for placing the 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 financial statements, and other knowledge we obtained during our audit of the fmancial 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. Management has omitted management's discussion and analysis that accounting principles generally accepted in the United States of America require to be presented to supplement the basic financial statements. Such missing 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. Our opinion on the basic financial statements is not affected by this missing information. 2 13A Honorable Kevin Rambosk Sheriff Supplementary Information Our audit was conducted for the purpose of forming opinions on the financial statements that collectively comprise the Sheriff's financial statements. The combining statements, as listed in the table of contents, are presented for purposes of additional analysis and are not a required part of the 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 financial statements. Such information has been subjected to the auditing procedures applied in the audit of the financial statements and certain additional procedures, including comparing and reconciling such information directly to the underlying accounting and other records used to prepare the financial statements or to the 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 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 January 14, 2015 on our consideration of the Sheriff'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 included under the heading 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. 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. 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" O� a' r [� Cg E- Q ° .0 ..0 Ya a) �, c' c c 2- OLI E-o r S H Zww 13A Collier County, Florida Sheriff Statement of Revenues, Expenditures and Changes in Fund Balances — Budget and Actual General Fund Year Ended September 30, 2014 Variance With Budget Budget Positive Original Final Actual (Negative) Revenues: Charges for services $ — $ 1,402,500 $ 1,579,633 $ 177,133 Expenditures: General government: Personal services 2,973,600 2,973,600 3,426,559 (452,959) Operating expenditures 156,900 156,900 123,136 33,764 Capital outlay — — 1,699 (1,699) Public safety: Personal services 105,427,200 106,782,200 109,476,190 (2,693,990) Operating expenditures 24,618,200 24,665,700 20,631,134 4,034,566 Capital outlay 369,700 369,700 1,214,062 (844,362) Total expenditures 133,545,600 134,948,100 134,872,780 75,320 Excess of expenditures over revenues (133,545,600) (133,545,600) (133,293,147) 252,453 Other financing sources(uses): Transfers in: Collier County,Florida Board of County Commissioners appropriations 133,545,600 133,545,600 133,545,600 — Transfers out: Distribution of excess appropriations to Collier County,Florida Board of County Commissioners — — (252,453) (252,453) Total other financing sources 133,545,600 133,545,600 133,293,147 (252,453) Net change in fund balance — — — — Fund balance—beginning of year — — — — Fund balance—end of year $ — $ — $ — $ — See accompanying Notes to Financial Statements. 6 13A di Collier County, Florida Sheriff Statement of Net Position— Internal Service Fund September 30, 2014 Assets Cash and cash equivalents $ 3,277,440 Investments 7,943,387 Other receivable 105,399 Total assets 11,326,226 Liabilities: Self insurance claims payable 2,078,000 Due to other funds 407,422 Net other postemployment benefit obligation 1,681,238 Total liabilities 4,166,660 Net position: Unrestricted 7,159,566 Total net position $ 7,159,566 See accompanying Notes to Financial Statements. 7 13A Collier County, Florida Sheriff Statement of Revenues, Expenses, and Changes in Net Position— Internal Service Fund Year Ended September 30, 2014 Operating revenues: Charges for services $ 19,531,057 Operating expenses: Claims and claims expenses 18,876,458 Reinsurance premiums 836,167 Net other postemployment benefit expense 336,321 Administrative and other expenses 199,763 Total operating expenses 20,248,709 Operating income (loss) (717,652) Nonoperating revenues: Interest income 46,895 Decrease in fair value of investments (47,076) Total nonoperating revenues (181) Change in net position (717,833) Net position—beginning of year 7,877,399 Net position—end of year $ 7,159,566 See accompanying Notes to Financial Statements. 8 13A Collier County, Florida Sheriff Statement of Cash Flows — Internal Service Fund Year Ended September 30, 2014 Operating activities Cash payments for claims and claims related services $ (20,502,110) Cash payments for reinsurance premiums (836,167) Cash payments for administrative services and supplies (199,763) Cash received from other funds for services 18,792,578 Cash received from retirees for services 738,479 Net cash used by operating activities (2,006,983) Noncapital and Related Financing Activities Amounts received from other funds 407,422 Amounts repaid to other funds (1,940,588) Net cash used by noncapital and related financing activities (1,533,166) Investing activities Investment income 46,895 Sales of securities 1,918,037 Net cash provided by investing activities 1,964,932 Net decrease in cash,cash equivalents,and investments (1,575,217) Cash,cash equivalents,and investments—beginning of year 4,852,657 Cash,cash equivalents,and investments—end of year $ 3,277,440 Reconciliation of operating loss to net cash used by operating activities Operating loss $ (717,652) Adjustments to reconcile operating loss to net cash used by operating activities: Increase in receivables (103,652) Decrease in due to/from other funds Increase in net other postemployment benefit obligation 336,321 Decrease in self-insurance claims payable (1,522,000) Net cash provided by operating activities $ (2,006,983) See accompanying Notes to Financial Statements. 9 13A Collier County, Florida Sheriff Statement of Fiduciary Net Position— Agency Funds September 30, 2014 Assets Cash and cash equivalents $ 600,082 Due from individuals and businesses 23,827 Total assets $ 623,909 Liabilities Due to other governments $ 33,110 Due to Collier County,Florida Board of County Commissioners 27,019 Due to individuals and businesses 563,780 Total liabilities $ 623,909 See accompanying Notes to Financial Statements. 10 13A Collier County, Florida Sheriff Notes to Financial Statements September 30, 2014 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 financial statements include the general fund, special revenue funds,proprietary fund(internal service fund), and agency funds of the Sheriff's office. The accompanying financial statements were prepared for the purpose of complying with Section 218.39(2),Florida Statutes, and Chapter 10.550, Rules of the Auditor General - Local Governmental Entity Audits, which allows the Sheriff to only present fund financial statements. These financial statements present only the portion of the funds of Collier County, Florida that are attributable to the Sheriff. They are not intended to present fairly the financial positions and results of operations of Collier County, Florida in conformity with accounting principles generally accepted in the United States of America. There are no separate legal entities(component units) for which the Sheriff is financially accountable. 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 financial statements do not constitute a complete presentation of the financial position of the Sheriff as of September 30, 2014 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 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. 11 13A Collier County, Florida Sheriff Notes to Financial Statements September 30, 2014 1. Summary of Significant Accounting Policies (continued) Measurement Focus,Basis of Accounting, and Basis of Presentation 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. The 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 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. 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. 12 13A Collier County, Florida Sheriff Notes to Financial Statements September 30, 2014 1. Summary of Significant Accounting Policies (continued) Governmental Funds (continued) 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. 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 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. 13 13A Collier County, Florida Sheriff Notes to Financial Statements September 30, 2014 1. Summary of Significant Accounting Policies (continued) Governmental Funds (continued) 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. 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. 14 13A Collier County, Florida Sheriff Notes to Financial Statements September 30, 2014 1. Summary of Significant Accounting Policies (continued) Compensated Absences All full-time employees of the Sheriff are allowed to accumulate an unlimited number of hours of unused sick time and up to 500 hours of unused vacation leave. Upon termination, employees receive 100%of allowable accumulated vacation hours. If the member leaves in good standing they will also receive 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 the Sheriff 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 for the County. Use of Estimates The preparation of the 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 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, 2014. 15 13A Collier County, Florida Sheriff Notes to Financial Statements September 30, 2014 1. Summary of Significant Accounting Policies (continued) Fund Balance Reporting and Governmental Fund-Type Definitions (continued) Spendable fund balances are classified based on a hierarchy of the Sheriffs 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. 2. Budgetary Process Florida Statutes govern the preparation, adoption, and administration of the Sheriff's annual budget. The Sheriff prepares a budget for the general fund and submits it to the Board for approval. The budget is prepared on a basis consistent with accounting principles generally accepted in the United States of America. Any subsequent amendments to the budget must be approved by the Board. 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 13A Collier County, Florida Sheriff Notes to Financial Statements September 30, 2014 3. Cash, Cash Equivalents and Investments At September 30, 2014, 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 $ 18,743 N/A Demand deposits N/A 12,385,067 N/A Local government surplus funds trust fund: Florida Prime N/A 739,414 AAAm Total cash and cash equivalents 13,143,224 Money Market N/A 183,526 Not rated Federal National Mortgage Association 11/20/2014 2,295,894 AA+ Federal Farm Credit Bank 11/26/2014 350,056 AA+ Federal Home Loan Mortgage Corp. Discount Note 12/10/2014 499,985 A-1+ Federal Home Loan Bank Discount Note 03/20/2015 2,999,580 A-1+ Federal Home Loan Bank 06/12/2015 254,760 AA+ Federal Home Loan Bank 12/11/2015 509,255 AA+ Federal Home Loan Bank 02/19/2016 850,331 AA+ Total Investments 7,943,387 Total cash,cash equivalents and investments $ 21,086,611 17 13A Collier County, Florida Sheriff Notes to Financial Statements September 30, 2014 3. Cash, Cash Equivalents and Investments (continued) The total cash, cash equivalent and investments balances at September 30, 2014, were as follows: General fund $ 7,254,747 Grant special revenue fund — Prisoner welfare fund 1,234,340 Federal equitable sharing fund 776,615 Internal service fund 11,220,827 Agency funds 600,082 $ 21,086,611 Custodial Credit Risk At September 30, 2014, 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. 18 1 3 A Collier County, Florida Sheriff Notes to Financial Statements September 30, 2014 3. Cash,Cash Equivalents and Investments (continued) Credit Risk The Sheriff's policy is to follow the guidance in Sections 218.415 and 219.075,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. 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. During the fiscal year there were two separate pools. Pool A (Florida PRIME) consisted 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. At September 30, 2014, the Sheriff had$739,414 invested in the Pool, all of which was invested in Florida Prime. Florida Prime is rated "AAAm" by Standard & Poor's Ratings Services. In September 2014, all remaining funds in the Fund B Surplus Funds Trust Fund were transferred to Florida Prime, thereby dissolving the Fund B Surplus Trust Fund. Interest Rate Risk The Sheriff has no specific investment policy regarding interest rate risk. 19 13A p Collier County, Florida Sheriff Notes to Financial Statements September 30, 2014 3. Cash, Cash Equivalents and Investments (continued) 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 investments for 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. The portion of the Sheriff's portfolio invested in FSMET is detailed as follows, at September 30, 2014: % of Portfolio Money Market 1% Federal National Mortgage Association 11% Federal Farm Credit Bank 2% Federal Home Loan Bank 8% Federal Home Loan Bank Discount Note 14% Federal Home Loan Mortgage Corp. Discount Note 2% Total 38% 20 13A Collier County, Florida Sheriff Notes to Financial Statements September 30, 2014 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 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: September 30, Deductions/ September 30, 2013 Additions Reclassifications 2014 Governmental Activities: Capital assets not depreciated: Construction in progress $ 46,516 $ 691,071 $ (46,516) $ 691,071 Total capital assets not depreciated 46,516 691,071 (46,516) 691,071 Capital assets depreciated: M achinery and equipment 69,351,148 2,604,399 (4,704,057) 67,251,490 Total capital assets depreciated 69,351,148 2,604,399 (4,704,057) 67,251,490 Less accumulated depreciation: Machinery and equipment (57,926,433) (4,921,787) 4,667,575 (58,180,645) Total accumulated depreciation (57,926,433) (4,921,787) 4,667,575 (58,180,645) Total depreciable capital assets,net 11,424,715 (2,317,388) (36,482) 9,070,845 Total Governmental Activities capital assets,net $ 11,471,231 $ (1,626,317) $ (82,998) $ 9,761,916 The October 1, 2013 balances have been adjusted from the amounts reported for September 30, 2013. Total machinery and equipment, net is the same as the amount reported in the fiscal year 2013 Notes to the Financial Statements. The adjustment was needed to correct the beginning balances and adjust for assets that were reactivated but were not previously included in the totals. 21 1 3 A Collier County, Florida Sheriff Notes to Financial Statements September 30, 2014 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, 2013 Increases Retirements 2014 Accrued compensated absences $ 13,142,943 $2,177,226 ($836,716) $14,483,453 Of these liabilities, approximately $660,000 is expected to be paid during the fiscal year ending September 30, 2015. These long-term liabilities are not reported in the 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, 2014, were as follows: Due From Due To General fund $ 806,116 $ — Grant special revenue fund — 129,302 Prisoner welfare fund — 263,982 Federal equitable sharing — 5,410 Internal service fund — 407,422 $ 806,116 $ 806,116 Interfund receivables and payables generally represent recurring activities between funds. 22 13A Collier County, Florida Sheriff Notes to Financial Statements September 30, 2014 7. Related-Party Transactions The Board provided funding for the Sheriff for the year of $133,545,600. At September 30, 2014, the Sheriff had a payable due to the Board of$289,254 comprised of the following: General fund: Distribution of excess appropriations $ 252,453 Distribution of interest collected 8,713 Miscellaneous payables 1,069 Agency funds 27,019 Total $ 289,254 Additionally, the Sheriff had a receivable from the Board related to services provided to the County of$215,530 at September 30, 2014. Agency Funds The Sheriff's Office administers funds for the Collier County Sheriff's 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. 23 13A Collier County, Florida Sheriff Notes to Financial Statements September 30, 2014 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 Sheriff'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 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 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. 24 13A Collier County, Florida Sheriff Notes to Financial Statements September 30, 2014 8. Employee Retirement Plan (continued) 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. 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. 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 (844) 377-1888, or accessing the division's Internet site at www.dms.MyFlorida.com. 25 13A Collier County, Florida Sheriff Notes to Financial Statements September 30, 2014 8. Employee Retirement Plan (continued) The Sheriff is required to contribute an actuarially determined rate. Rates from October 1, 2013 through June 30, 2014 were 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. The current rates, effective July 1, 2014, are 19.82% for special risk employees, 7.37% for regular employees, 21.14% for senior management and 12.28% 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. From October 1, 2013 through June 30, 2014 rates were 8.03% for special risk employees, and 3.39% for regular employees. As of July 1, 2014 the rates are 8.77% for special risk and 3.80% for regular risk. As of September 30, 2014, there were eleven special risk employees and three regular risk employees 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, 2014, 2013, and 2012 were $12,494,042, $10,162,432, and $8,817,709, 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. 26 13A Collier County, Florida Sheriff Notes to Financial Statements September 30, 2014 9. Other Postemployment 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 postemployment benefits (OPEB). 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 46% 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. At September 30, 2014, the date of the latest actuarial valuation, the Sheriff's plan participation consisted of: OPEB plan participants 1,155 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, 2014, the Sheriff contributed$776,332 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, 2014. 27 13A Collier County, Florida Sheriff Notes to Financial Statements September 30, 2014 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 Sheriffs annual OPEB Plan cost for the year ended September 30, 2014, the amount actually contributed, and the changes in the net OPEB Plan obligation. Annual required contribution $ 1,138,923 Interest on net OPEB obligation 40,348 Adjustment to annual required contribution (66,618) Annual OPEB cost(expense) 1,112,653 Contributions made (776,332) Increase in net OPEB obligation(asset) 336,321 Net OPEB obligation—beginning of year 1,344,917 Net OPEB obligation(asset)—end year $ 1,681,238 No trust or agency fund has been established for the plan. The Sheriffs annual OPEB cost, the percentage of annual OPEB cost contributed to the plan, and the net OPEB obligation for the year ended September 30, 2014 and the preceding years were as follows: Percentage of Annual Annual OPEB Net OPEB Fiscal Year Ended OPEB Cost Cost Contributed Obligation September 30,2014 $ 1,112,653 70% $ 1,681,238 September 30,2013 $ 1,131,221 73% $ 1,344,917 September 30,2012 $ 1,100,080 108% $ 1,048,138 Funded Status and Funding Progress As of the September 30, 2014 actuarial valuation date, the OPEB Plan was 0% funded, the actuarial accrued liability for benefits was $14,207,209, and the actuarial value of assets was $0, resulting in an unfunded actuarial accrued liability(UAAL) of$14,207,209. The covered payroll (annual payroll of active employees covered by the OPEB Plan) was approximately $112.9 million, and the ratio of the UAAL to the covered payroll was 12.6%. 28 1 3 Collier County, Florida Sheriff Notes to Financial Statements September 30, 2014 9. Other Post Employment Benefits (continued) Funded Status and Funding Progress (continued) The schedule of funding progress, presented as required supplementary information following the notes to the financial statements,presents multiyear trend information that shows whether the actuarial value of plan assets is increasing or decreasing over time relative to the actuarial liabilities for benefits. 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 2015 fiscal year grading to an ultimate rate of 5% for the 2025 fiscal year 29 13A Collier County, Florida Sheriff Notes to Financial Statements September 30, 2014 10. Self-Insurance Program The Sheriff's 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 fmancial 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. The maximum annual individual stop loss payment amount is unlimited. 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 Sheriff's Office uses a Third Party Administrator(TPA)to administer and pay claims for the health plan. Meritain Health, Inc. has been the TPA since July 1, 2013. 30 13A Collier County, Florida Sheriff Notes to Financial Statements September 30, 2014 10. Self-Insurance Program (continued) Changes in the balance of estimated insurance claims payable for the fiscal year ended September 30,2014 and 2013 is as follows: New Claims Balance and Changes Claim Balance Fiscal year ending: October 1 in Estimates Payments September 30 2013 $ 2,340,000 $ 21,404,560 $(20,144,560) $3,600,000 2014 $ 3,600,000 $ 17,354,458 $(18,876,458) $2,078,000 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. 31 13A Collier County, Florida Sheriff Schedule of Funding Progress for the Retiree Health Plan September 30, 2014 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 10/1/2011 $ — $ 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% 10/1/2014 $ — $ 14,207,209 $14,207,209 0.0% $ 112,902,749 12.6% 32 1 3 A n rn Q % 2 E E _ o CO - G 7 § 2 ƒ Q q 2 % q % E„ 2 _ m m _ \ 2 2 2 ( m r £ ckfl crs 69 _ % % G - 00 2 G $ _ o N - S N \ § N 5 2 I _ m m En. _ Mt _ # o 8 1 9 9 9 / 3 J » N. - 2 2 N N N N W / 40 ci) Z o m m m _ m 0 .4 '\ q q G / 6 $ / N / / 0 40 u C/) & m m 69 m = / & 1 Q G F / V Cl, w . $ 7 & S \ 7 m Q § '= m E 2 U \ / k & .k / k \ .2 .4 § k 7 ƒ f ¥ ] '\ 2 % / / k/ .a . 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Internal Control Over Financial Reporting In planning and performing our audit of the 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 financial statements,but not for the purpose of expressing an opinion on the effectiveness of the Sheriff's 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 2014-001, 2014-002 and 2014-003 in the accompanying schedule of findings and responses to be material weaknesses. ■ Pnirrlqudn R venter Neaa lntaretmal 35 1�'T:XI:-� IN TER NATIONAL 13A Honorable Kevin Rambosk Sheriff Compliance and Other Matters As part of obtaining reasonable assurance about whether the Sheriff'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. Collier County,Florida Sheriff's 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 Sheriffs 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. a. 7L LLB CliftonLarsonAllen LLP Naples,Florida January 14,2015 36 1 3 CliftonLarsonAllen LL P CLAconnect.com CliftonLarsonAllen MANAGEMENT LETTER Honorable Kevin Rambosk Sheriff Collier County,Florida Report on the Financial Statements We have audited the financial statements of the Collier County, Florida Sheriff(Sheriff), as of and for the fiscal year ended September 30,2014 and have issued our report thereon dated January 14,2015. Auditors'Responsibility We conducted our audit in accordance with auditing standards generally accepted in the United States of America;the standards applicable to financial audits contained in Government Auditing Standards, issued by the Comptroller General of the United States; and Chapter 10.550,Rules of the Auditor General. Other Reports and Schedule 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; Schedule of Findings and Responses; and Independent Accountants' Report on an examination conducted in accordance with AICPA Professional Standards, Section 601, regarding compliance requirements in accordance with Chapter 10.550, Rules of the Auditor General. Disclosures in those reports and schedule, which are dated January 14, 2015, should be considered in conjunction with this management letter. Prior Audit Findings 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 fmancial audit report. Corrective actions have been taken to address findings and recommendations made in the preceding annual financial audit report, except as noted in the Prior Year Findings section of the Schedule of Findings and Responses. Official Title and Legal Authority Section 10.554(1)(i)4., Rules of the Auditor General, requires that the name or official title and legal authority for the primary government and each component unit of the reporting entity be disclosed in this management letter, unless disclosed in the notes to the financial statements. See Note 1 in the notes to the financial statements. N F X 1A m IntlepadaM nrnbei d Noma trteretl«,el 37 INTERNATIONAL 13A Honorable Kevin Rambosk Sheriff Other Matters Section 10.554(1)(i)2., 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)3., 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. Purpose of this Letter 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 the Sheriff and applicable management, and is not intended to be and should not be used by anyone other than these specified parties. a LLB CliftonLarsonAllen LLP Naples,Florida January 14,2015 38 13A Collier County, Florida Sheriff Schedule of Finding and Responses September 30, 2014 Prior Year Findings and Recommendations Current Year Status Prior Year Findings Partially Not Cleared Cleared Cleared IC2013-001 General Ledger Recording and Material X Account Reconciliations. See 2014-001 Weakness Material IC2013-002 Journal Entries. See 2014-002 X Weakness IC2013-003 Information Technology. See 2014- Material X 003 Weakness Control ML2013-004 Investment Policy X Deficiency Current Year Findings and Recommendations 2014-001 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. 39 13A 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. 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. Current Status: The finding was partially cleared. All funds have been entered into the general ledger system; however, in several funds only summary data is posted to the general ledger. The daily transactions are processed 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. All other recommendations were implemented. Views of Responsible Officials and Planned Corrective Action: Monthly details will be entered into the general ledger for funds which do not have details recorded in other systems. Inmate Trust transactions are recorded in an accounting system which is part of the inmate commissary process and Flexible Spending is administered by a third party administrator. Because these two funds each have systems which record details of the transactions, monthly totals will continue to be entered into the general ledger for these funds. 40 13A 2014-002 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. 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. Current Status: The finding was partially cleared. Finance members began reconciling reports containing journal entries posted to the accounting system to the journal entries manually keyed. The finance department completed a review of all members' access to the finance system, and changes were made to ensure members only have access to functions necessary to perform their duties. Access to post journal entries was removed from members who are outside of the finance office functions. 41 13A During the current year, finance staff members were unable to provide supporting documentation for one journal entry in the sequence of journal entries used. There was no record of the item in the general ledger or other reports. Views of Responsible Officials and Planned Corrective Action: Staff at the management level will continue to review manually entered journal entries. Additionally, procedures will be developed to try and detect any gap in the sequence of journal entries based on reporting capabilities of the finance system. It should be noted that all funds are reconciled to the general ledger and these reconciliations would disclose if the one missing journal entry number was posted to the general ledger. 42 13A 2014-003 Information Technology Criteria: Information technology is a key component of the Sheriffs 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 Sheriffs 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 modern 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. Current Status: During 2014 members began the process of assessing software needs and exploring software options. A portion of the cost of the project was budgeted by the Board of County Commissioners in the 2015 Collier County budget. 43 13A Views of Responsible Officials and Planned Corrective Action: During Fiscal Year 2014, the process began for the implementation of a new fmance system. Staff from the IT Division worked with members of the Finance Division to start documenting a process analysis of the different components of the current system. In Fiscal Year 2015, additional steps will be taken to advance this project including the development of a Scope of Work to prepare a Request for Proposal. It is anticipated that this will be a 2-3 year project. 44 13A CliftonLarsonAllen LLP CLAconnect.com CliftonLarsonAllen INDEPENDENT ACCOUNTANTS' REPORT Honorable Kevin Rambosk Sheriff Collier County, Florida We have examined the Collier County, Florida Sheriff's (Sheriff) compliance with Section 218.415, Florida Statutes,regarding the investment of public funds during the year ended September 30,2014.Management is responsible for the Sheriffs compliance with those requirements. Our responsibility is to express an opinion on the Sheriffs compliance based on our examination. Our examination was conducted in accordance with attestation standards established by the American Institute of Certified Public Accountants and, accordingly, included examining, on a test basis, evidence about the Sheriff's compliance with those requirements and performing such other procedures as we considered necessary in the circumstances. We believe that our examination provides a reasonable basis for our opinion. Our examination does not provide a legal determination on the Sheriff's compliance with specified requirements. In our opinion, the Sheriff complied, in all material respects, with the aforementioned requirements for the year ended September 30,2014. This report is intended solely for the information and use of 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. &I/el ge CliftonLarsonAllen LLP Naples, Florida January 14, 2015 • M ii�quuat rraitie d Neda lrten3imal NEXIA 45 IN[LIZ..Al IU\AI. 1 3 A CliftonLarsonAllen LLP CLAconnect.c om 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(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, 2014. 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, 2014 (the population sampled from included transactions from October 1, 2013 through September 30, 2014), 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 and observed that the form was properly completed and authorized by appropriate personnel. 2. We obtained the "Purchase of Evidence/Information Voucher" and observed 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 observed that the unused funds returned, if applicable, agreed to the corresponding deposit and bank statement detail and observed that the amount deposited agreed to the amount returned per the "Receipt for Funds Received" form detail. NEXTAArm ntz vau=t rrrsLer d Nano UiHnalimal 46 INTL R N AT IO N AL 13A 0 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- -�1'Z1.,(_LLB CliftonLarsonAllen LLP Naples,Florida January 14, 2015 47 Collier County, Florida Supervisor of Elections Financial Statements and Supplemental Reports Year Ended September 30, 2014 CliftonLarsonAllen 13A Collier County, Florida Supervisor of Elections Financial Statements and Other Reports Year Ended September 30, 2014 Contents Independent Auditors' Report 1 Financial Statements Balance Sheet—Governmental Funds 3 Statement of Revenues, Expenditures, and Changes in Fund Balances— Governmental Funds 4 Statement of Revenues, Expenditures, and Changes in Fund Balances - Budget and Actual—General Fund 5 Notes to 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 Financial Statements Performed in Accordance With Government Auditing Standards 18 Management Letter 20 Independent Accountants' Report 22 13A CliftonLarsonAllen LLP CLAconnect.com CliftonLarsonAllen INDEPENDENT AUDITORS'REPORT Honorable Jennifer J. Edwards Supervisor of Elections Collier County,Florida Report on the Financial Statements We have audited the accompanying financial statements of each major fund of the Collier County, Florida Supervisor of Elections (Supervisor), as of and for the year ended September 30, 2014, and the related notes to the 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 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 fmancial 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. NE/:I A Mirtlepe�i rrertis d Ne.IrtErre 1 INTERN A I'ION AL Honorable Jennifer J. Edwards 1 3 A A.7; Supervisor of Elections Opinions In our opinion, the 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, 2014, and the respective changes in financial position and budgetary comparison of its general fund thereof for the year then ended in accordance with accounting principles generally accepted in the United States of America. Emphasis of Matter As discussed in Note 1 to the financial statements, the financial statements referred to above were prepared solely for the purpose of complying with the Rules of the Auditor General of the State of Florida. In conformity with the Rules, the accompanying financial statements are intended to present the financial position and changes in financial position of each major fund, only for that portion of the major funds of Collier County, Florida that is attributable to the Supervisor. They do not purport to, and do not, present fairly the financial position of Collier County, Florida as of September 30, 2014, and the changes in its financial position for the fiscal year then ended in conformity with accounting principles generally accepted in the United States of America. Our opinion is not modified with respect to these matters. Other Matters Required Supplementary Information Management has omitted management's discussion and analysis that accounting principles generally accepted in the United States of America require to be presented to supplement the basic financial statements. Such missing 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. Our opinion on the basic financial statements is not affected by this missing information. Other Reporting Required by Government Auditing Standards In accordance with Government Auditing Standards, we have also issued a report dated January 21, 2015 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 included under the heading 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. 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 the Supervisors' internal control over financial reporting and compliance. O't417-76A1 LLB CliftonLarsonAllen LLP Naples,Florida January 21, 2015 2 13A Collier County, Florida Supervisor of Elections Balance Sheet— Governmental Funds September 30, 2014 Grant General Special Total Fund Revenue 2014 Assets Cash and cash equivalents $ 537,867 $ 1,034 $ 538,901 Due from Collier County, Florida Board of County Commissioners 300 - 300 Total assets $ 538,167 $ 1 034 $ 539,201 Liabilities and fund balance Liabilities: Accounts payable $ 18,766 $ - $ 18,766 Accrued liabilities 59,151 - 59,151 Due to Collier County, Florida Board of County Commissioners 460,250 - 460,250 Total liabilities 538,167 - 538,167 Fund balances: Restricted - 1,034 1,034- Unassigned - - Total fund balances - 1,034 1,034 Total liabilities and fiord balance $ 538,167 $ 1,034_ $ 539,201 See accompanying Notes to Financial Statements 3 1 3 A Collier County, Florida Supervisor of Elections Statement of Revenues, Expenditures and Changes in Fund Balances— Governmental Funds Year Ended September 30, 2014 Grant General Special Total Fund Revenue 2014 Revenues: Intergovernmental $ - $ 37,830 $ 37,830 Interest - 33 33 Total revenues - 37,863 37,863 Expenditures: General government: Personal services 1,961,362 - 1,961,362 Operating expenditures 1,336,620 42,368 1,378,988 Capital oirtlay 89,819 - 89,819 Total expenditures 3,387,801 42,368 3,430,169 Excess of expenditures over revenues (3,387,801) (4,505) (3,392,306) Other financing sources(uses): Transfers in: Collier County, Florida Board of County Commissioners appropriations 3,841,600 - 3,841,600 Operating transfers out: Distribution of excess appropriations: Collier County, Florida Board of County Commissioners (453,799) - (453,799) Total other financing sources 3,387,801 - 3,387,801 Deficiency of revenues and other financing sources under expenditures - (4,505) (4,505) Fund balance—October 1,2013 - 5,539 5,539 Fund balance—September 30,2014 $ - $ 1,034 $ 1,034 See accompanying Notes to Financial Statements 4 13A Collier County, Florida Supervisor of Elections Statement of Revenues, Expenditures and Changes in Fund Balances — Budget and Actual General Fund Year Ended September 30, 2014 Variance With Final Budget Budget Positive Original Final Actual (Negative) Revenues $ - $ - $ - $ Expenditures: General government: Personal services 1,967,100 2,144,600 1,961,362 183,238 Operating 1,160,500 1,611,549 1,336,620 274,929 Capital outlay 14,000 85,451 89,819 (4,368) Total expenditures 3,141,600 3,841,600 3,387,801 453,799 Excess of expenditures over revenues (3,141,600) (3,841,600) (3,387,801) 453,799 Other financing sources(uses): Operating transfers in: Collier County,Florida Board of County Commissioners appropriations 3,141,600 3,841,600 3,841,600 - Operating transfers out: Distribution of excess appropriations: Collier County,Florida Board of County Commissioners - - (453,799) (453,799) Total other financing sources 3,141,600 3,841,600 3,387,801 (453,799) Net change in fund balance - - - Fund balance—October 1,2013 - - Fund balance— September 30,2014 $ - $ - $ - $ - See accompanying Notes to Financial Statements 5 13A Collier County, Florida Supervisor of Elections Notes to Financial Statements September 30, 2014 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 financial statements presented include the general fund and grant special revenue fund of the Supervisor's office. The accompanying 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. 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. Measurement Focus,Basis of Accounting, and Basis of Presentation These financial statements have been prepared for the purpose of complying with Section 218.39(2), Florida Statutes, and Chapter 10.550, Rules of the Auditor General — Local Governmental Entity Audits, which allows the Supervisor to only present fund financial statements. These financial statements present only the portion of the funds of Collier County, Florida that are attributable to the Supervisor. They are not intended to present fairly the financial position and results of operations of Collier County, Florida in conformity with accounting principles generally accepted in the United States of America. The financial activities of the Supervisor, as a constitutional officer, are included in the Collier County, Florida Comprehensive Annual Financial Report. These 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. 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 13A Collier County, Florida Supervisor of Elections Notes to Financial Statements September 30, 2014 1. Summary of Significant Accounting Policies and Practices (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 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 13A Collier County, Florida Supervisor of Elections Notes to Financial Statements September 30, 2014 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 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, 2014,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 13A Collier County, Florida Supervisor of Elections Notes to Financial Statements September 30, 2014 1. Summary of Significant Accounting Policies and Practices (continued) Use of Estimates The preparation of the 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 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, 2014. 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. 9 13A Collier County, Florida Supervisor of Elections Notes to Financial Statements September 30, 2014 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, 2014, 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 538,701 N/A Total cash and cash equivalents $ 538,901 10 13A Collier County, Florida Supervisor of Elections Notes to Financial Statements September 30, 2014 3. Cash and Cash Equivalents(continued) Custodial Credit Risk At September 30, 2014, 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 13A Collier County, Florida Supervisor of Elections Notes to Financial Statements September 30, 2014 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 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 30, 2013 Additions Deductions 2014 Machinery and equipment $ 1,115,597 $ 89,819 $ (28,540) $ 1,176,876 Less accumulated depreciation (982,302) (56,483) 27,805 $ (1,010,980) Machinery and equipment,net $ 133,295 $ 33,336 $ (735) $ 165,896 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, 2013 Increase Retirement 2014 Accrued compensated absences $ 175,315 $ 98,474 $ 77,684 $ 196,105 Of these liabilities, approximately $86,286 is expected to be paid during the fiscal year ending September 30, 2015, which will be included in the operating costs of the general fund when expended. These long-term liabilities are not reported in the financial statements of the Supervisor since they have not matured. 12 13A Collier County, Florida Supervisor of Elections Notes to Financial Statements September 30, 2014 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 13A Collier County, Florida Supervisor of Elections Notes to Financial Statements September 30, 2014 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, 2013 through June 30, 2014 were 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. The current rates, effective July 1, 2014, are 43.24% for county elected officials, 21.14% for senior management, 7.37% for regular employees and 12.28% 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, 2014, 2013 and 2012, were $103,864, $76,386, and $63,016, 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 13A Collier County, Florida Supervisor of Elections Notes to Financial Statements September 30, 2014 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, 2014. 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 13A Collier County, Florida Supervisor of Elections Notes to Financial Statements September 30, 2014 8. Related-Party Transactions For the year ended September 30, 2014, the Board provided funding for the Supervisor that amounted to $3,232,100. At September 30, 2014, the Supervisor had a payable due to the Board of$460,250 comprised as follows: Distribution of excess appropriations $ 453,799 Distribution of interest earnings 1,731 Amounts due for various services 4,720 Total due to Board of County Commissioners $ 460,250 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, 2014, the Supervisor was charged $267,015 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 $300,000 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 13A Collier County, Florida Supervisor of Elections Notes to Financial Statements September 30, 2014 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.No transfers were required for the year ending September 30, 2014. 17 13A 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 financial statements of each major fund of the Collier County, Florida Supervisor of Elections (Supervisor), as of and for the year ended September 30, 2014, and the related notes to the financial statements, which collectively comprise the Supervisor's financial statements,and have issued our report thereon dated January 21,2015. Internal Control Over Financial Reporting In planning and performing our audit of the 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 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 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 I Nordeperdert molter of Ne.airternaborel 18 i::1ERN ATION AL Honorable Jennifer J. Edwards 1 3 A Supervisor of Elections Compliance and Other Matters As part of obtaining reasonable assurance about whether the Supervisor'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. Vel Za '0-7 04///, LLB CliftonLarsonAllen LLP Naples,Florida January 21,2015 19 CliftonLarsonAllen LLP 13A CLAconnect.com CliftonLarsonAllen MANAGEMENT LETTER Honorable Jennifer J. Edwards Supervisor of Elections Collier County,Florida Report on the Financial Statements We have audited the financial statements of the each major fund of the Collier County, Florida Supervisor of Elections (Supervisor) as of and for the year ended September 30, 2014, and have issued our report thereon dated January 21, 2015. Auditors'Responsibility 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. Other Reports and Schedule 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 Independent Accountants' Report on an examination conducted in accordance with AICPA Professional Standards, Section 601, regarding compliance requirements in accordance with Chapter 10.550, Rules of the Auditor General. Disclosures in that report which is dated January 21, 2015 should be considered in conjunction with this management letter. Prior Audit Findings 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 findings and recommendations reported in the preceding annual financial audit report. Official Title and Legal Authority Section 10.554(1)(i)4., Rules of the Auditor General, requires that the name or official title and legal authority for the primary government and each component unit of the reporting entity be disclosed in this management letter, unless disclosed in the notes to the financial statements. See Note 1 in the notes to the financial statements. NEXI A MiMglerder,member dNezetrier/Wog 20 I,TERN Al WON\L r 1 nnif r Edwards 13 Hono ab e Je e J. Supervisor of Elections Other Matters Section 10.554(1)(i)2., 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)3., 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. Purpose of this Letter 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 the Supervisor and applicable management, and is not intended to be and should not be used by anyone other than these specified parties. LLB CliftonLarsonAllen LLP Naples,Florida January 21, 2015 21 13A CliftonLarsonAllen LLP CLAconnect.com CliftonLarsonAllen INDEPENDENT ACCOUNTANTS' REPORT Honorable Jennifer J. Edwards Supervisor of Elections Collier County, Florida We have examined the Collier County, Florida Supervisor of Elections' (Supervisor) compliance with Section 218.415, Florida Statutes, regarding the investment of public funds during the year ended September 30, 2014. Management is responsible for the Supervisor's compliance with those requirements. Our responsibility is to express an opinion on the Supervisor's compliance based on our examination. Our examination was conducted in accordance with attestation standards established by the American Institute of Certified Public Accountants and, accordingly, included examining, on a test basis, evidence about the Supervisor's compliance with those requirements and performing such other procedures as we considered necessary in the circumstances. We believe that our examination provides a reasonable basis for our opinion. Our examination does not provide a legal determination on the Supervisor's compliance with specified requirements. In our opinion, the Supervisor complied, in all material respects, with the aforementioned requirements for the year ended September 30, 2014. This report is intended solely for the information and use of 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. eVei-7C/a' '17--7012/A - CliftonLarsonAllen LLP Naples,Florida January 21, 2015 NEXT 22 Collier County, Florida Tax Collector Financial Statements and Supplemental Reports Years Ended September 30, 2014 and 2013 CliftonLarsonAllen 13A Collier County, Florida Tax Collector Financial Statements and Other Reports Years Ended September 30, 2014 and 2013 Contents Independent Auditors' Report 1 Financial Statements Balance Sheets—General Fund 3 Statements of Revenues, Expenditures, and Changes in Fund Balance—General Fund 4 Statement of Revenues, Expenditures, and Changes in Fund Balance—Budget and Actual—General Fund—Budgetary Basis 5 Statements of Fiduciary Net Position—Agency Funds 6 Notes to 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 Financial Statements Performed in Accordance with Government Auditing Standards 21 Management Letter 23 Independent Accountant's Report .25 13A CliftonLarsonAllen LLP CLAconnect.com CliftonLarsonAllen INDEPENDENT AUDITORS'REPORT Honorable Larry H. Ray Tax Collector Collier County,Florida Report on the Financial Statements We have audited the accompanying 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 years ended September 30, 2014 and 2013, and the related notes to the financial statements, which collectively comprise the Tax Collector'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 financial statements in accordance with accounting principles generally accepted in the United States of America; this includes the design, implementation, and maintenance of internal control relevant to the preparation and fair presentation of financial statements that are free from material misstatement,whether due to fraud or error. Auditor's Responsibility Our responsibility is to express opinions on these financial statements based on our audits.We conducted our audits in accordance with auditing standards generally accepted in the United States of America and the standards applicable to financial audits contained in Government Auditing Standards, issued by the Comptroller General of the United States.Those standards require that we plan and perform the audit to obtain reasonable assurance about whether the financial statements are free from material misstatement. An audit involves performing procedures to obtain audit evidence about the amounts and disclosures in the financial statements. The procedures selected depend on the auditor's judgment, including the assessment of the risks of material misstatement of the financial statements, whether due to fraud or error. In making those risk assessments,the auditor considers internal control relevant to the entity's preparation and fair presentation of the financial statements in order to design audit procedures that are appropriate in the circumstances,but not for the purpose of expressing an opinion on the effectiveness of the entity's internal control. Accordingly, we express no such opinion.An audit also includes evaluating the appropriateness of accounting policies used and the reasonableness of significant accounting estimates made by management,as well as evaluating the overall presentation of the financial statements. We believe that the audit evidence we have obtained is sufficient and appropriate to provide a basis for our audit opinions. N!. ,\ nxirrber of Naga IlernsWel 1 INTER N AT ION AI. 13A Honorable Larry H.Ray Tax Collector Opinions In our opinion,the 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 30,2014 and 2013,and the respective changes in financial position for the years then ended and the budgetary comparison for the general fund thereof for the year ended September 30,2014, in accordance with accounting principles generally accepted in the United States of America. Emphasis of Matter As discussed in Note 1 to the financial statements, the financial statements referred to above were prepared solely for the purpose of complying with the Rules of the Auditor General of the State of Florida.In conformity with the Rules, the accompanying financial statements are intended to present the financial position and changes in financial position of each major fund, and the aggregate remaining fund information, only for that portion of the major funds, and the aggregate remaining fund information, of Collier County, Florida that is attributable to the Tax Collector. They do not purport to, and do not, present fairly the fmancial position of Collier County, Florida as of September 30, 2014 and 2013, and the changes in its financial position for the fiscal years then ended in conformity with accounting principles generally accepted in the United States of America. Our opinion is not modified with respect to these matters. Other Matters Required Supplementary Information Management has omitted management's discussion and analysis that accounting principles generally accepted in the United States of America require to be presented to supplement the basic financial statements. Such missing 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. Our opinion on the basic financial statement is not affected by this missing information. Other Reporting Required by Government Auditing Standards In accordance with Government Auditing Standards, we have also issued a report 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 included under the heading 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. 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 the Tax Collector's internal control over financial reporting and compliance. eVelf7(- °4. d LLB CliftonLarsonAllen LLP Naples,Florida December 16, 2014 2 13A Collier County, Florida Tax Collector Balance Sheets — General Fund September 30 2014 2013 Assets Cash and cash equivalents $ 6,383,588 $ 6,501,784 Due from other funds 73,087 69,889 Accounts Receivable - 660 Prepaid rent 23,079 22,351 Security deposit 4,628 4,628 Total assets $ 6,484,382 $ 6,599,312 Liabilities and fund balance Liabilities: Accounts payable $ 25,922 $ 23,912 Due to Collier County, Florida Board of County Commissioners 5,725,702 5,825,759 Due to other governmental agencies 732,758 749,641 Total liabilities 6,484,382 6,599,312 Fund balance — — Total liabilities and fund balance $ 6,484,382 $ 6,599,312 See accompanying Notes to Financial Statements. 3 13A Collier County, Florida Tax Collector Statements of Revenues, Expenditures, and Changes in Fund Balance General Fund Year Ended September 30, 2014 2013 Revenues: Commissions and fees $ 17,201,400 $ 16,910,326 Miscellaneous 234,947 272,075 Total revenues 17,436,347 17,182,401 Expenditures: General government: Personal services 9,344,705 9,026,470 Operating 1,587,153 1,551,181 Capital outlay 46,029 29,350 Distrbution of excess commissions and fees to other governmental agencies 732,758 749,641 Total expenditures 11,710,645 11,356,642 Excess of revenues over expenditures 5,725,702 5,825,759 Other financing uses: Distribution of excess commissions and fees to Collier County, Florida Board of County Commissioners 5,725,702 5,825,759 Total other financing uses 5,725,702 5,825,759 Net change in fiord balance — — Fund balance,beginning of year — — Fund balance, end of year $ — $ — See accompanying Notes to Financial Statements. 4 13A Collier County, Florida Tax Collector Statement of Revenues, Expenditures, and Changes in Fund Balance— Budget and Actual General Fund (Budgetary Basis) Year Ended September 30, 2014 Variance With Final Budget Budget Positive Original Final Actual (Negative) Revenues: Commissions and fees $ 17,180,104 $ 17,201,400 $ 17,201,400 $ — Miscellaneous 250,000 234,947 234,947 — Total revenues 17,430,104 17,436,347 17,436,347 — Expenditures: General government: Personal services 9,656,689 9,344,705 9,344,705 — Operating 1,846,230 1,587,153 1,587,153 — Capital outlay 28,105 46,029 46,029 — Total expenditures 11,531,024 10,977,887 10,977,887 — Excess of revenues over expenditures 5,899,080 6,458,460 6,458,460 — Other financing uses: Distribution of excess commissions and fees to Collier County,Florida Board of County Commissioners (5,309,172) (5,725,702) (5,725,702) — Distribution of excess commissions and fees to other governmental agencies (589,908) (732,758) (732,758) — Total other financing uses (5,899,080) (6,458,460) (6,458,460) — Net change in fund balance — — — — Fund balance,beginning of year — — — — Fund balance,end of year $ — $ — $ — $ — See accompanying Notes to Financial Statements. 5 13A Collier County, Florida Tax Collector Statements of Fiduciary Net Position Agency Fund September 30, 2014 and 2013 September 30 2014 2013 Assets Cash and cash equivalents $ 6,817,938 $ 6,178,291 Accounts receivable 14,902 18,314 Total assets $ 6,832,840 $ 6,196,605 Liabilities Due to other funds $ 73,087 $ 69,889 Due to Collier County, Florida Board of County Commissioners 1,138,080 812,397 Due to other governmental agencies 5,536,216 5,181,603 Due to individuals and businesses 85,457 132,716 Total liabilities $ 6,832,840 $ 6,196,605 See accompanying Notes to Financial Statements. 6 13A Collier County, Florida Tax Collector Notes to Financial Statements September 30, 2014 and 2013 1. Summary of Significant Accounting Policies Reporting Entity The Tax Collector is an elected official of the County,pursuant to the Constitution of the State of Florida, Article VIII, Section 1(d). The Tax Collector is part of the primary government of the County. Although the Florida Department of Revenue approves the Tax Collector's operating budget, the Tax Collector is responsible for the administration and the operation of the Tax Collector's office. Upon approval,the operating budget is provided to the Collier County Board of County Commissioners (Board). The Tax Collector's financial statements include only the funds of the Tax Collector's office. There are no separate legal entities(component units) for which the Tax Collector is considered to be financially accountable. Measurement Focus,Basis of Accounting, and Basis of Presentation These financial statements have been prepared for the purpose of complying with Section 218.39(2), Florida Statutes, and Chapter 10.550, Rules of the Auditor General — Local Governmental Entity Audits, which allows the Tax Collector to only present fund fmancial statements. These fmancial statements present only the portion of the funds of Collier County, Florida that are attributable to the Tax Collector. They are not intended to present fairly the fmancial position and results of operations of Collier County, Florida 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. These 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 13A Collier County, Florida Tax Collector Notes to Financial Statements September 30, 2014 and 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 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 13A Collier County, Florida Tax Collector Notes to Financial Statements September 30, 2014 and 2013 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 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 13A Collier County, Florida Tax Collector Notes to Financial Statements September 30, 2014 and 2013 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 January 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 13A Collier County, Florida Tax Collector Notes to Financial Statements September 30, 2014 and 2013 1. Summary of Significant Accounting Policies (continued) Use of Estimates The preparation of these 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 financial statements and the reported amounts of revenues and expenditures during the period. Actual results could differ from those estimates. 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. 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. 11 13A Collier County, Florida Tax Collector Notes to Financial Statements September 30, 2014 and 2013 3. Cash and Cash Equivalents At September 30, 2014 and 2013, the carrying value of the Tax Collector's cash and cash equivalents were as follows: 2014 2013 Carrying Carrying Credit Type Value Value Rating Cash on hand $ 32,700 $ 32,700 N/A Demand deposits 13,168,826 12,647,375 N/A Total cash and cash equivalents $ 13,201,526 $ 12,680,075 Such amounts are reported as$6,383,588 and$6,817,938 for 2014 and$6,501,784 and$6,178,291 for 2013 in the general and agency funds,respectively. Custodial Credit Risk At September 30, 2014, 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. 12 13A Collier County, Florida Tax Collector Notes to Financial Statements September 30, 2014 and 2013 3. Cash and Cash Equivalents (continued) 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 13A Collier County, Florida Tax Collector Notes to Financial Statements September 30, 2014 and 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 Tax Collector maintains custodial responsibility for the capital assets used by the office. No depreciation expense has been provided on capital assets in these 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, 2014: October 1 September 30 2013 Additions Deletions 2014 Infrastructure $ 11,735 $ - $ - $ 11,735 Improvements other than buildings 111,914 - - 111,914 Machinery and equipment 2,313,698 46,029 (108,144) 2,251,583 Total capital assets 2,437,347 46,029 (108,144) 2,375,232 Less accumulated depreciation (2,064,019) (149,546) 108,143 (2,105,422) Total capital assets,net $ 373,328 $ (103,517) $ (1) $ 269,810 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 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 14 13A Collier County, Florida Tax Collector Notes to Financial Statements September 30, 2014 and 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 2013 Increase Decrease 2014 Accrued compensated absences $ 1,110,288 $ 450,850 $ 408,260 $ 1,152,878 October 1 September 30 2012 Increase Decrease 2013 Accrued compensated absences $ 1,091,839 $ 452,996 $ 434,547 $ 1,110,288 Of these liabilities, approximately $460,000 is expected to be paid during the fiscal year ending September 30, 2015, which will be included in the operating costs of the general fund when expended. These long-term liabilities are not reported in the 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 13A Collier County, Florida Tax Collector Notes to Financial Statements September 30, 2014 and 2013 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 13A Collier County, Florida Tax Collector Notes to Financial Statements September 30, 2014 and 2013 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, 2013 through June 30, 2014 were 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. The current rates, effective July 1, 2014, are 43.24% for county elected officials, 21.14% for senior management, 7.37% for regular employees and 12.28% 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, 2014, 2013 and 2012, were $545,011, $359,211 and $291,878, 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 13A Collier County, Florida Tax Collector Notes to Financial Statements September 30, 2014 and 2013 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$14,077 as of September 30, 2014. 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 fmancial 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 30,2014 and 2013,the Board paid commissions and fees to the Tax Collector that amounted to $15,458,070 and$15,223,495, respectively. 18 13A Collier County, Florida Tax Collector Notes to Financial Statements September 30, 2014 and 2013 8. Related-Party Transactions (continued) At September 30, 2014 and 2013, the Tax Collector had a payable due to the Board of$6,863,782 and $6,638,156, respectively, comprised as follows: 2014 2013 Distribution of excess commissions and fees $ 5,725,702 $ 5,825,759 Agency funds due to the Board 1,138,080 812,397 $ 6,863,782 $ 6,638,156 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, 2014 and 2013, the Tax Collector was charged $2,800,412 and $2,744,000, 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 $300,000 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 13A Collier County, Florida Tax Collector Notes to Financial Statements September 30, 2014 and 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. 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 2014. The three current leases include options for 5-year renewals, and contain annual escalation clauses ranging from 1-5% annually. The following is a schedule of future minimum lease payments under the operating leases: Fiscal year ending September 30: 2015 $ 261,209 2016 237,277 2017 78,675 2018 81,043 2019 83,469 Rental expense for all operating leases in the aggregate was $359,126 and $344,327 for the years ended September 30, 2014 and 2013, respectively. There were no contingent rentals or sublease rentals associated with leases in effect at September 30, 2014 or 2013. 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 13A 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 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, 2014, and the related notes to the financial statements,which collectively comprise the Tax Collector's financial statements, and have issued our report thereon dated December 16,2014. Internal Control Over Financial Reporting In planning and performing our audit of the fmancial statements, we considered the Tax Collector's internal control over financial reporting(internal control)to determine the audit procedures that are appropriate in the circumstances for the purpose of expressing our opinions on the financial statements,but not for the purpose of expressing an opinion on the effectiveness of the Tax Collector's internal control. Accordingly, we do not express an opinion on the effectiveness of the 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 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. Antrdeprdel Imam.cfNeosstriernEtiorel 21 1 NT C RN ATI UN.AI. Honorable Larry H. Ray 13A Tax Collector Compliance and Other Matters As part of obtaining reasonable assurance about whether the Tax Collector'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. dif/d4 7 /.4'441"f- °1/-7-AK_L .Z.) CliftonLarsonAllen LLP Naples,Florida December 16,2014 22 13A CliftonLarsonAllen LLP CLAconnect.com CliftonLarsonAllen MANAGEMENT LETTER Honorable Larry H. Ray Tax Collector Collier County,Florida Report on the Financial Statements We have audited the 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 30,2014,and have issued our report thereon dated December 16,2014. Auditor's Responsibility 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. Other Reports and Schedule 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 Independent Accountants' Report on an examination conducted in accordance with AICPA Professional Standards, Section 601, regarding compliance requirements in accordance with Chapter 10.500, Rules of the Auditor General. Disclosures in that report which is dated December 16,2014 should be considered in conjunction with this management letter. Prior Audit Findings Section 10.554(1)(1)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 fmdings and recommendations reported in the preceding annual financial audit report. Official Title and Legal Authority Section 10.554(1)(i)4.,Rules of the Auditor General,requires that the name or official title and legal authority for the primary government and each component unit of the reporting entity be disclosed in this management letter, unless disclosed in the notes to the financial statements. See Note 1 in the notes to the financial statements. Nl \f;\ Art Itileperliert rqrrINV a NEM frt.:,113110rd 23 I NT LRN AT ION AI. 13A Honorable Larry H. Ray Tax Collector Other Matters Section 10.554(1)(i)2., 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)3.,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. Purpose of this Letter 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, the Tax Collector and applicable management, and is not intended to be and should not be used by anyone other than these specified parties. eVi4.7(-/dA44-7e-Al1/4-,<-L. CliftonLarsonAllen LLP Naples,Florida December 16,2014 24 13A CliftonLarsonAllen LLP CLAconnect.com CliftonLarsonAllen INDEPENDENT ACCOUNTANT'S REPORT The Honorable Larry Ray Tax Collector Collier County, Florida We have examined the Collier County Tax Collector, Collier County, Florida's (Tax Collector) compliance with Section 218.415, Florida Statutes, regarding the investment of public funds during the year ended September 30, 2014. Management is responsible for the Tax Collector's compliance with those requirements. Our responsibility is to express an opinion on the Tax Collector's compliance based on our examination. Our examination was conducted in accordance with attestation standards established by the American Institute of Certified Public Accountants and, accordingly, included examining,on a test basis, evidence about the Tax Collector's compliance with those requirements and performing such other procedures as we considered necessary in the circumstances. We believe that our examination provides a reasonable basis for our opinion. Our examination does not provide a legal determination on the Tax Collector's compliance with specified requirements. In our opinion,the Tax Collector complied,in all material respects,with the aforementioned requirements for the year ended September 30,2014. This report is intended solely for the information and use of 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. Z'f;,-17C r°i'je'--"( 1/0->t LLB CliftonLarsonAllen LLP Naples,Florida December 16, 2014 25 1 3 A bL . . . .