IWSD Basic Financial Statements 2019/2020 IMMOKALEE WATER&SEWER DISTRICT
BASIC FINANCIAL STATEMENTS
AND SUPPLEMENTARY INFORMATION
TOGETHER WITH ADDITIONAL REPORTS
YEARS ENDED
SEPTEMBER 30,2020 AND 2019
TABLE OF CONTENTS
Page(s)
INDEPENDENT AUDITOR'S REPORT 1-4
MANAGEMENT'S DISCUSSION AND ANALYSIS(MD&A) I-VIII
BASIC FINANCIAL STATEMENTS
Statements of Net Position 5
Statements of Revenues,Expenses,and Changes in Net Position 6
Statements of Cash Flows 7
Notes to the Financial Statements 8-34
REQUIRED SUPPLEMENTARY INFORMATION OTHER THAN MD&A
Schedule of Revenues,Expenses and Changes in Net Position-Budget
(Non-GAAP Budgetary Basis)and Actual with Reconciliation to GAAP
Basis-Year Ended September 30,2020 35-40
Schedule of Expenditures of Federal Awards-
Year Ended September 30,2020 41
Notes to the Schedule of Expenditures of Federal Awards .................... 42
ADDITIONAL REPORTS
Independent Auditor's Report on Internal Control Over
Financial Reporting and on Compliance and Other Matters
Based on an Audit of Basic Financial Statements Performed
in Accordance with Government Auditing Standards 43-44
Independent Auditor's Report on Compliance for Each Major Program/Project and on
Internal Control Over Compliance Required by the Uniform Guidance 45-47
Schedule of Findings and Questioned Costs-Federal Awards 48-50
Independent Accountant's Report on Compliance with
Section 218.415, Florida Statutes 51
Independent Auditor's Report to Management 52-55
Management's Response to the Independent Auditor's Report to Management Exhibit 1
Impact Fee Affidavit Exhibit 2
TuscAN Affiliations
& �yFlorida Institute of Certified Public Accountants
American Company, r A Institute of Certified Public Accountants
Private Companies Practice Section
Certified Public Accountants&Consultants Tax Division
INDEPENDENT AUDITOR'S REPORT
Board of Commissioners
Immokalee Water& Sewer District
1020 Sanitation Road
Immokalee,Florida 34142
Report on the Financial Statements
We have audited the accompanying basic financial statements of the business-type activities of
Immokalee Water& Sewer District(an independent special district)(the "District")as of and for
the years ended September 30,2020 and 2019, and the related notes to the financial statements,
which collectively comprise the District'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.
Auditor's Responsibility
Our responsibility is to express an opinion on these financial statements based on our audits. We
conducted our audits in accordance with auditing standards generally accepted in the United States
of America and the standards applicable to financial audits contained in Government Auditing
Standards, issued by the Comptroller General of the United States of America. Those standards
require that we plan and perform the audit to obtain reasonable assurance about whether the
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,
INTEGRITY SERVICE EXPERIENCE
E
12621 World Plaza Lane, Building 55 • Fort Myers, FL 33907 • Phone: (239) 333-2090 • Fax: (239)333-2097
Board of Commissioners
Immokalee Water&Sewer District
Page 2
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.
Opinion
In our opinion,the financial statements referred to above present fairly, in all material respects,the
respective financial position of the business-type activities of Immokalee Water& Sewer District
as of September 30,2020 and 2019,and the respective changes in financial position and cash
flows thereof,for the years then ended in accordance with accounting principles generally
accepted in the United States of America.
Emphasis of Matter
During the fiscal year ended September 30,2019,the District levied a special assessment of
$496,731 on system users benefiting from system improvements on State Road 29. The District did
not record the transaction in the prior year. For the year ended September 30,2020,the District
reported a restatement of net position of$496,731 as a result of this correction of an error(see Note
N). The District utilizes a third party billing company which generates billing reports based on rate
inputs.During the year ended September 30,2019,an input error was made which resulted in the
incorrect billing of commercial accounts.As such,during the year ended September 30, 2020,the
District reported a restatement of the 2019 ending net position of$182,138 as a result of this
correction of an error. The auditor's opinion was not modified with respect to this restatement.
Other Matters
Required Supplementary Information
Accounting principles generally accepted in the United States of America require that the
management's discussion and analysis on pages I-VIII be presented to supplement the basic
financial statements. Such information, although not a part of the basic financial statements, is
required by the Governmental Accounting Standards Board who considers it to be an essential
part of financial reporting for placing the basic financial statements in an appropriate operational,
economic,or historical context. We have applied certain limited procedures to the required
supplementary information-management's discussion and analysis(MD&A)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 required supplementary information-management's
discussion and analysis(MD&A)because the limited procedures do not provide us with sufficient
Board of Commissioners
Immokalee Water& Sewer District
Page 3
evidence to express an opinion or provide any assurance.
Other Required Supplementary Information
Our audit was conducted for the purpose of forming an opinion on the financial statements that
collectively comprise Immokalee Water& Sewer District's basic financial statements. The required
supplementary information other than MD&A-budgetary comparison information- Schedule of
Revenues,Expenses and Changes in Net Position-Budget(Non-GAAP Budgetary Basis)and
Actual with Reconciliation to GAAP Basis-year ended September 30,2020 is presented for
purposes of additional analysis and is not a required part of the basic financial statements.The
required supplementary information other than MD&A-budgetary comparison information-
Schedule of Revenues,Expenses and Changes in Net Position-Budget(Non-GAAP Budgetary
Basis)and Actual with Reconciliation to GAAP Basis-year ended September 30, 2020 is the
responsibility of management and was derived from and relates directly to the underlying accounting
and other records used to prepare the basic financial statements. Such 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 required supplementary
information other than MD&A budgetary comparison information-Schedule of Revenues,Expenses
and Changes in Net Position-Budget(Non-GAAP Budgetary Basis)and Actual with Reconciliation
to GAAP Basis-year ended September 30,2020 is fairly stated, in all material respects, in relation
to the basic financial statements as a whole.
Our audit was conducted for the purpose of forming an opinion on the financial statements of
Immokalee Water&Sewer District that collectively comprise the Immokalee Water&Sewer
District's basic financial statements. The accompanying Schedule of Expenditures of Federal
Awards for the year ended September 30,2020 as required by the Title 2 U.S.Code of Federal
Regulations(CFR)Part 200, "Uniform Administrative Requirements,Cost Principles,and Audit
Requirements for Federal Awards" is presented for purposes of additional analysis and is not a
required part of the financial statements. Such information is the responsibility of management and
was derived from and relates directly to the underlying accounting and other records used to prepare
the 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 accompanying Schedule of Expenditures of Federal Awards for the year ended
September 30,2020 is fairly stated, in all material respects,in relation to the basic financial
statements as a whole.
Board of Commissioners
Immokalee Water& Sewer District
Page 4
Other Information
Our audit was conducted for the purpose of forming an opinion on the financial statements that
collectively comprise the District's basic financial statements. The Exhibit 1 -Management's
Response to Independent Auditor's Report to Management is not a required part of the basic
financial statements but are required by Government Auditing Standards and Rules of the Auditor
General. Such information has 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 Section 218.415,Florida Statutes
In accordance with Section 218.415,Florida Statutes,we have also issued a report dated May 19,
2021,on our consideration of Immokalee Water&Sewer District's compliance with provisions of
Section 218.415,Florida Statutes. The purpose of that report is to describe the scope of our testing
of compliance and the results of that testing,and to provide an opinion on compliance with the
aforementioned Statute. That report is an integral part of an audit performed in accordance with
Sections 218.39 and 218.415,Florida Statutes in considering Immokalee Water& Sewer District's
compliance with Section 218.415,Florida Statutes.
Other Reporting Required by Government Auditing Standards
In accordance with Government Auditing Standards,we have also issued our report dated May 19,
2021,on our consideration of the District's internal control over financial reporting and on our
tests of its compliance with certain provisions of laws,regulations,contract 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 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
District's internal control over financial reporting and compliance.
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TUSCAN&COMPANY,P.A.
Fort Myers,Florida
May 19,2021
MANAGEMENT'S DISCUSSION
AND ANALYSIS
(MD&A)
IMMOKALEE WATER& SEWER DISTRICT
Required Supplementary Information
Management's Discussion and Analysis
September 30, 2020
The management of the Immokalee Water& Sewer District offers readers of our
financial statements the following narrative overview and analysis of our financial
activities for the year ended September 30, 2020.
Basic Financial Statements
Our basic financial statements are prepared using proprietary fund (enterprise fund)
accounting that uses the same basis of accounting as private-sector business enterprises.
The District is operated under one enterprise fund. Under this method of accounting, an
economic resources measurement focus and an accrual basis of accounting is used.
Revenue is recorded when earned and expenses are recorded when incurred. The basic
financial statements include a statement of net position, a statement of revenues, expenses
and changes in net position, a statement of cash flows, and a reconciliation of operating
profit (loss) to net cash provided by operating activities. These financial statements are
followed by notes to the financial statements. In addition to the basic financial
statements, this report also contains required supplementary information pertaining to
budgetary reconciliations.
The statement of net position presents information on the District's assets and liabilities,
with the difference between the two reported as net position. Over time, increases or
decreases in net position may serve as a useful indicator of whether the financial position
of the District is improving or deteriorating.
The statement of revenues, expenses, and changes in net position reports the operating
revenues and expenses and nonoperating revenues and expenses of the District for the
fiscal year. The difference, the net income or loss, is combined with any capital grants to
determine the increase or decrease in net position for the fiscal year. The increase or
decrease, combined with the net position at the end of the previous year, total to the net
position at the end of the current fiscal year.
The statement of cash flows reports cash and cash equivalent activities for the fiscal year
resulting from operating activities, capital and related financing activities, noncapital and
related financing activities and investing activities. The net result of these activities added
to the beginning of the year cash balance, total to the cash and cash equivalent balance at
the end of the current fiscal year.
MDAI
IMMOKALEE WATER& SEWER DISTRICT
Required Supplementary Information
Management's Discussion and Analysis
September 30, 2020
Condensed Financial Statement
Condensed financial information from the statements of net position and revenues,expenses and changes in net position
for the years ended September 30,2020 and 2019 are as follows:
September 30,
2020 2019
Current and other assets $ 19,162,962 $ 18,283,197
Capital assets,net 57,509,486 57,690,948
Total asscts $ 76,672,448 $ 75,974,145
Current liabilities $ 3,526,538 $ 3,970,846
Long-term liabilities 31,071,201 31,846,733
Total liabilities 34,597,739 35,817,579
Net position:
Net Investment in capital assets 25,758,542 25,012,497
Restricted 3,321,903 2,182,580
Unrestricted 12,994,264 12,961,489
Total net position 42,074,709 40,156,566
Total liabilities and net position $ 76,672,448 $ 75,974,145
Operating revenue:
Water service $ 3,954,033 $ 3,730,396
Wastewater service 5,578,513 5,313,841
Meter service charges 790,679 748,565
Late fees 71,125 74,960
Reconnection/transfer fee 99,205 107,280
Miscellaneous revenue 135,117 110,627
Cross connection control fees 363,676 354,170
Total operating revenues 10,992,348 10,439,839
Operating expenses:
Water treatment and distribution expense 1,998,670 1,900,862
Wastewater treatment expense 1,851,581 1,858,641
Wastewater collection expense 801,188 718,038
Customer service and administrative expense 2,040,490 1,648,632
Maintenance 481,130 451,254
Total operating expenses,excluding depreciation 7,173,059 6,577,427
Depreciation 2,184,329 1,875,143
Total operating expenses,including depreciation 9,357,388 8',452,570
Operating profit(loss) 1,634,960 1,987,269
Net nonoperating revenue/(expense) (877,044) (655,574)
Profit(loss)before capital grants 757,916 1,331,695
Capital grants and contributions 1,160,227 1,812,132
Increase(Decrease)in net position 1,918,143 3,143,827
Beginning of year net position 40,156,566 37,012,739
End of year net position $ 42,074,709 $ 40.156,566
(Continued)
MDA II
IMMOKALEE WATER& SEWER DISTRICT
Required Supplementary Information
Management's Discussion and Analysis
September 30, 2020
The information contained in the condensed financial information table is used as the
basis for the discussion presented on the following pages, surrounding the District's
activities for the fiscal year ended September 30, 2020.
Financial Highlights
• The District completed a rate study and adopted the related rate increase of 3%
per year for FY 2020-2022. Rate increases are effective on October 1, 2019,
October 1, 2020 and October 1, 2021.
• The District ended the year September 30, 2020, with a net position of
$42,074,709 of which$25,758,542 represented the net investment in capital assets
and $12,994,264 was unrestricted. The ending net position was $1,918,143 more
than the net position at the beginning of the year. This was primarily the result of
the implementation of the previous rate increases.
• The District ended the year September 30, 2019, with a net position of
$40,156,566 of which $25,012,497 represented the net investment in capital assets
and $12,961,489 was unrestricted. The ending net position was $3,143,827 more
than the net position at the beginning of the year. This was primarily the result of
the implementation of the previous rate increases.
• The District had profit before capital contributions, for the years ended September
30, 2020 and 2019 of$757,916 and$1,331,695, respectively.
• The District has minimized interest expense, because of utilizing low interest
bonds/loans for capital projects funded through USDA Rural Development.
These interest rates range from 2.25% to 5.125%. The projects are a combination
of loans and grants with the highest grant ratio to date being at 57% of the total
project. The Series 2018 Bond had the lowest interest rate ever received by the
District at 2.25%.
• The District ended the year September 30, 2020 with cash and cash equivalents
and investments of approximately $16,971,903. However, only $12,274,927 of
this amount is available for operations, with the remainder of these assets being
restricted for specific purposes and unavailable for the District's general use.
• The District ended the year September 30, 2019 with cash and cash equivalents
and investments of approximately $15,948,815. However, only $11,852,148 of
this amount is available for operations, with the remainder of these assets being
restricted for specific purposes and unavailable for the District's general use.
• The statement of cash flows identifies the sources and uses of cash activity for the
fiscal year. For fiscal year 2020, cash and cash equivalents increased by $997,575
compared to the year ended September 30, 2019. This change resulted primarily
from the receipt of grant funds to fund the cost of a capital project. The servicing
of the District's debt resulted in the spending of cash of nearly $1,985,956.
• The statement of cash flows identifies the sources and uses of cash activity for the
fiscal year. For fiscal year 2019, cash and cash equivalents increased by
$2,312,620 compared to an increase of$2,035,541 for the year ended September
MDA III
IMMOKALEE WATER& SEWER DISTRICT
Required Supplementary Information
Management's Discussion and Analysis
September 30, 2020
30, 2018. This change resulted primarily from the receipt of grant funds to fund
the cost of a capital project. The servicing of the District's debt resulted in the
spending of nearly$1,964,872.
Revenue
As in previous years, the wastewater service revenues make up more than half of the
revenues, accounting for 51% in 2020 and 51% in 2019. Water revenue accounted for
36% in 2020 and 36% in 2019. Meter service charges, late fee charges, reconnection
fees, and miscellaneous revenues also remained constant between the two years. Cross
connection control fees remained at 3 % in 2020 and 2019.
The District was successful in receiving an increase in the District boundaries by the
Florida Legislature, during the Spring 2005 session. This change in the boundaries is
expected to result in increased opportunities for new users, in future years. We will be
working on a revised capital improvement plan, in conjunction with the Immokalee
Master Plan,to identify the needs within the next fiscal year.
Expenses
Due to the significant investments the District has in capital assets, depreciation
continues to be one the largest operating expenses at 23-26% of total operating expenses
per year. Unlike the other expenses listed, depreciation is not a cash expense.
The second largest department, by expenses, at 21% and 23% of total expenses is for
wastewater treatment, which remained constant between 2020 and 2019, respectively.
This department is one of the largest, with eight full time employees and one part-time
employee. One of the largest expenses, excluding salaries and benefits, in this department
is electric, which accounted for over $167,000 and $218,000 in expenses in 2020 and
2019, respectively.
The third highest department by expenses is the water treatment and distribution
department with twelve full time employees. The related expenses of 20% and 22% were
2020 and 2019,respectively. We are replacing meters that are under registering,with new
Neptune auto-read meters. In addition, all new residential services are required to use the
Neptune auto-read meters. This will reduce the need for additional meter readers in the
water department and will improve the efficiency and accuracy of the meter reading
process. 100% of the meters are now automated.
The first largest department is the administration department, which consists of nine full
time employees and one part-time employee. The related expenses remained constant at
22% and 19% of total expenses in 2020 and 2019, respectively. The largest expense in
this department, other than salaries and benefits is engineering fees.
MDA IV
IMMOKALEE WATER& SEWER DISTRICT
Required Supplementary Information
Management's Discussion and Analysis
September 30, 2020
The next largest department by expenses is the wastewater collection department, which
consists of five full time employees. The related expenses remained constant at 8% in
2020 compared to 2019.
The smallest department is the maintenance department, which was created in fiscal year
2004 to reduce maintenance-related expenses from third-party vendors. It consists of six
full time employees. It accounts for 5% of total expenses in 2020 and 2019, respectively.
Labor costs in this department, except for those relating to the supervisor, are charged to
the appropriate departments,based on the maintenance projects they are working on.
Wages and benefits account for 42% and 39% of the expenses in 2020 and 2019, making it
the largest expense category. Depreciation expense accounts for 23% and 20%, for 2020
and 2019,respectively.
The District continues to monitor costs. The District considers cost of living increases
during the budget cycle and provides merit increases based upon performance evaluations.
The District follows best practices for water and wastewater systems in promoting
employees who meet specified criteria for certification and licensing. The District bids out
contracts for major expenses, such as health insurance, property insurance, residuals
management and chemicals. The District has an arrangement with Collier County Fleet
Management allowing the District to access their fuel tanks, located in Immokalee, to take
advantage of bulk-usage savings.
General Fund Budgetary Highlights
Over the course of the 2020 fiscal year, the Board of Commissioners amended the District
budget. These budget amendments were done primarily to a) increase operating revenue,
and to b) increase operating expenses and capital funding primarily related to the District's
projects, and adjust designated funds.
Original to Final Budget Variance
For the fiscal year 2020 total operating revenues were increased by $410,000 more than
originally budgeted, and total operating expenses, excluding depreciation expense, were
decreased by over$700,000.
Capital outlay—capital outlay was increased by$1,000,000.
MDA V
IMMOKALEE WATER& SEWER DISTRICT
Required Supplementary Information
Management's Discussion and Analysis
September 30, 2020
Final Budget to Actual Variance
For the fiscal year 2020 total operating revenue was approximately $162,000 less than
budgeted.
Capital Assets
The District's net capital assets as of September 30, 2020 and 2019 amounted to
$57,509,486 and $57,690,948 (net of accumulated depreciation), respectively. This
investment in capital assets includes land, construction in progress, buildings and
improvements,water and wastewater plants and systems, and machinery and equipment.
Net capital asset additions included the following for the years ended September 30:
2020 2019
Construction in progress $ 1,390,104 $ 1,189,315
Buildings and improvements - 47,313
Water and wastewater plants and systems 589,848 214,364
Machinery and equipment 22,915 375,095
$ 2,002,867 $ 1,826,087
Construction in progress for 2020 was primarily for the clarifier project, Lift Station H and
Master Lift Station X8 and line relocation projects.
Construction in progress for 2019 was primarily for the AC Water Main and Undersized
Replacement Project funded through USDA.
The District primarily acquires its assets with the proceeds from federal capital grants and
revenue bonds, supplemented by user fees. USDA Rural Development is the primary
source of proceeds, because they offer low interest loans for capital improvements. We
also received contributed capital in the form of new water and sewer infrastructure from
developers. New equipment purchases and a system expansion are part of the District's
capital improvement program. Capital purchases are acquired using bids, or Florida State
Contract prices.
MDA VI
IMMOKALEE WATER& SEWER DISTRICT
Required Supplementary Information
Management's Discussion and Analysis
September 30, 2020
Debt
As of September 30, 2020, the District had $31,080,969 of revenue bonds outstanding. The
total amount outstanding for these categories of debt decreased, to reflect the principal
payments by the District of$901,000.
As of September 30, 2019, the District had $31,981,969 of revenue bonds outstanding. The
total amount outstanding for these categories of debt decreased, to reflect the principal
payments by the District of$868,000.
Unrestricted Net Assets
As of September 30, 2020, the District had designated $10,155,999 in unrestricted net
assets, as recommended by the auditor. The District designated $841,000 for emergencies,
$4,138,975 for operations, $464,495 for vehicle replacement, $337,557 for capital
equipment, and$4,373,972 for maintenance reserve.
As of September 30, 2019, the District had designated $8,625,177 in unrestricted net assets,
as recommended by their auditor. The District designated $761,000 for emergencies,
$3,308,656 for operations, $527,483 for vehicle replacement, $546,416 for capital
equipment, and$3,481,622 for maintenance reserve.
Upcoming Significant Changes or Impacts
Rate Increase: In fiscal year 2015, the District hired a rate consultant, PRMG, to determine
what rate increase was needed. The Board adopted rate increases of 3% on water and for
wastewater to go into effect on October 1, 2019, October 1, 2020 and October 1, 2021.
Residential - There are several residential developments that are expected to impact the
revenues of the District during the next fiscal year.
Arrowhead PUD, which will consist of over 1,200 residential units at completion, has
completed the first phase of their water and wastewater infrastructure. The Crestview
Apartments Phase I & II (304 units) were completed and connected. The first and second
phase of approximately 125 single-family units were also completed. Building on these
homes had been delayed due to the impact of the nationwide housing market.
Habitat for Humanity continues to build homes in Immokalee. In December 2006, they
completed the infrastructure in the Independence Subdivision Phases II, with 167 homes.
Liberty PUD, with 162 single family homes has also been connected, to our system. They
have completed the work for the Faith PUD, which included an additional 175 homes; and
the Kaicasa PUD, which will consist of 280 homes.
MDA VII
IMMOKALEE WATER& SEWER DISTRICT
Required Supplementary Information
Management's Discussion and Analysis
September 30, 2020
Other Residential:
The nearby Ave Maria University campus is expected to eventually impact Immokalee
with increased demand for low cost residential homes for workers. Discussions were held
in previous years with Lennar Homes regarding the possibility of 5,000 to 6,000 homes in
the Serenoa subdivision, however, that did not materialize following the nationwide slump
in housing prices. Barron Collier has since acquired that property, and they have not yet
indicated what they plan to use the property for. Collier Enterprises has withdrawn their
plans to build 400 homes near the Florida Tradeport.
Commercial
The EDC continues to market the Florida Tradeport, but has been unable to secure a key
industry for that location. Plans were previously approved for the CCAA USDA
Manufacturing Building at the airport, and that building is complete. Collier County Public
Schools completed construction on the new Bethune Education Center. Collier County
Parks completed the upgrade of their South Park Community Center. Immokalee continues
to attract economically viable businesses within its boundaries. IWSD installed water and
wastewater infrastructure to accommodate larger retail uses. Family Dollar has completed
a new building on New Market Road. IWSD continues to provide water and wastewater
services to the Seminole Tribe's casino and is working on an emergency interconnect
agreement for the residential component of the reservation. New commercial development
continues to be planned along the fringes of downtown Immokalee. Saint Matthews House
replaced their Thrift Store on Main Street. First Bank built a new facility on North 15`"
Street.
IWSD continues to evaluate our wastewater operations. The District has just begun the
rehabilitation of three clarifiers.
The District continues to manufacture our own fertilizer branded "Organi Kalee" and
markets to agricultural uses.
The A/C and Undersized Water Lines Replacement project replace and upgraded over 50
miles of water lines within Immokalee. The cost of the project was over $20,000,000 and
funded through the USDA.
Request For Information
This financial report is intended to provide an overview of the finances of the District for
those with an interest in this organization. Questions concerning any information within
this report, may be directed to the Executive Director of the District, 1020 Sanitation Road,
Immokalee, Florida 34142.
MDA VIII
IMMOKALEE WATER& SEWER DISTRICT
STATEMENTS OF NET POSITION
September 30, 2020 and 2019
2020 2019
ASSETS
CURRENT ASSETS
Cash $ 11,138,928 $ 10,741,662
Investments -CDs 1,135,999 1,110,486
Accounts receivable, net 641,044 710,825
Other receivables 36,956 18,283
Inventory 374,786 336,700
Prepaid expenses 1,200 53,081
TOTAL CURRENT ASSETS 13,328,913 12,971,037
RESTRICTED ASSETS
Cash 4,696,976 4,096,667
Grant and assessment receivables 1,137,073 1,215,493
TOTAL RESTRICTED ASSETS 5,834,049 5,312,160
CAPITAL ASSETS
Capital assets not being depreciated:
Land 2,645,941 2,645,941
Construction in progress 964,893 21,923,826
Capital assets being depreciated:
Buildings and improvements 1,670,776 1,805,024
Water and wastewater plants and systems 86,800,068 63,726,935
Machinery and equipment 3,536,228 3,513,313
Less:
Accumulated depreciation (38,108,420) (35,924,091)
57,509,486 57,690,948
TOTAL ASSETS $ 76,672,448 $ 75,974,145
The accompanying notes are an integral part of this statement.
Page 5 of 55
2020 2019
LIABILITIES AND NET POSITION
CURRENT LIABILITIES
Accounts and contracts payable $ 840,224 $ 668,335
Other accrued expenses 130,307 129,070
Capital lease payable, current portion 43,861 43,861
TOTAL CURRENT LIABILITIES 1,014,392 841,266
CURRENT LIABILITIES (Payable from Restricted Assets)
Revenue bonds payable, current portion 769,000 901,000
Loans payable- SRF, current portion 36,866 35,931
Accrued revenue bond interest 81,322 81,322
Retainage payable 178,509 747,945
Customer deposits 1,446,449 1,363,382
TOTAL CURRENT LIABILITIES
(Payable from Restricted Assets) 2,512,146 3,129,580
LONG-TERM LIABILITIES
Line of Credit(LOC) - -
Revenue bonds payable,net of current portion 30,311,969 31,080,969
Loans payable - SRF, net of current portion 426,093 463,175
Capital lease payable, net of current portion 109,654 153,515
Bond anticipation note 53,501 -
Accrued compensated absences 169,984 149,074
TOTAL LONG-TERM LIABILITIES 31,071,201 31,846,733
Commitments - -
TOTAL LIABILITIES 34,597,739 35,817,579
NET POSITION
Net investment in capital assets 25,758,542 25,012,497
Restricted 3,321,903 2,182,580
Unrestricted 12,994,264 12,961,489
TOTAL NET POSITION 42,074,709 40,156,566
TOTAL LIABILITIES AND NET POSITION $ 76,672,448 $ 75,974,145
IMMOKALEE WATER& SEWER DISTRICT Page 6 of 55
STATEMENTS OF REVENUES, EXPENSES AND CHANGES IN NET POSITION
Years ended September 30, 2020 and 2019
2020 2019
OPERATING REVENUES
Water service $ 3,954,033 $ 3,730,396
Wastewater service 5,578,513 5,313,841
Meter service charge 790,679 748,565
Late fees 71,125 74,960
Reconnect and transfer fees 99,205 107,280
Miscellaneous charges,fees and other income 135,117 110,627
Cross connection control fee 363,676 354,170
TOTAL OPERATING REVENUES 10,992,348 10,439,839
OPERATING EXPENSES
Water treatment and distribution 1,998,670 1,900,862
Wastewater treatment 1,851,581 1,858,641
Wastewater collection 801,188 718,038
Customer service and administrative 2,040,490 1,648,632
Maintenance 481,130 451,254
TOTAL OPERATING EXPENSES
PRIOR TO DEPRECIATION 7,173,059 6,577,427
Depreciation 2,184,329 1,875,143
TOTAL OPERATING EXPENSES 9,357,388 8,452,570
OPERATING PROFIT(LOSS) 1,634,960 1,987,269
NON-OPERATING REVENUES(EXPENSES)
Interest income 144,795 149,616
Gain(loss)on disposal of fixed assets - 39,191
Interest expense (1,004,948) (1,040,450)
Bad debt expense adjustment (19,370) (12,361)
Covid 19 expense (33,166) -
Other income including FEMA hurricane reimbursement 35,645 208,430
NET NON-OPERATING EXPENSES (877,044) (655,574)
PROFIT(LOSS)BEFORE CAPITAL
CONTRIBUTIONS 757,916 1,331,695
CAPITAL CONTRIBUTIONS
USDA-grants 778,792 1,243,688
Customers 55,765 568,444
Developers 325,670 -
TOTAL CAPITAL CONTRIBUTIONS 1,160,227 1,812,132
INCREASE(DECREASE)IN NET POSITION 1,918,143 3,143,827
NET POSITION-Beginning of the year as restated 40,156,566 37,012,739
NET POSITION-End of the year $ 42,074,709 $ 40,156,566
The accompanying notes are an integral part of this statement.
IMMOKALEE WATER& SEWER DISTRICT
STATEMENTS OF CASH FLOWS
Years ended September 30, 2020 and 2019
2020 2019
CASH FLOWS FROM(USED IN)OPERATING ACTIVITIES:
Cash received from customers $ 11,107,153 $ 10,603,364
Cash payments to suppliers and employees (6,965,228) (6,631,149)
NET CASH PROVIDED BY
OPERATING ACTIVITIES 4,141,925 3,972,215
CASH FLOWS FROM(USED IN)NONCAPITAL FINANCING:
Other income received 32,187 33,715
Other expenses paid(Covid 19) (33,166)NET CASH PROVIDED BY(USED IN)
NONCAPITAL FINANCING (979) 33,715
CASH FLOWS FROM(USED IN)CAPITAL AND
RELATED FINANCING ACTIVITIES:
Acquisition and construction of capital assets (2,572,303) (2,050,514)
Proceeds from sale of capital assets(gain) - 39,191
Principal paid on revenue bonds (901,000) (868,000)
FEMA 3,458 174,715
Principal paid on loans-SRF (36,147) (34,491)
Interest paid on bonds and other obligations (1,004,948) (1,040,450)
Proceeds from special assessment collections 78,420 71,513
Proceeds from bond anticipation note(BAN) 53,501 -
Proceeds capital lease - 219,307
Principal paid on capital lease (43,861) (21,931)
Capital contributions-USDA 778,792 1,534,421
Membership/customer/developer connection fees/assessment 381,435 143,226
NET CASH PROVIDED BY(USED IN)CAPITAL
AND RELATED FINANCING ACTIVITIES (3,262,653) (1,833,013)
CASH FLOWS FROM(USED IN)
INVESTING ACTIVITIES:
Interest earned on investments 119,282 139,703
Purchase of certificate of deposit NET CASH PROVIDED BY(USED IN)
INVESTING ACTIVITIES 119,282 139,703
NET INCREASE(DECREASE)IN
CASH AND CASH EQUIVALENTS 997,575 2,312,620
CASH AND CASH EQUIVALENTS-
BEGINNING OF YEAR 14,838,329 12,525,709
CASH AND CASH EQUIVALENTS-
END OF YEAR $ 15,835,904 $ 14,838,329
The accompanying notes are an integral part of this statement.
Page 7 of 55
2020 2019
RECONCILIATION OF OPERATING PROFIT TO
NET CASH PROVIDED BY OPERATING ACTIVITIES:
OPERATING PROFIT(LOSS) $ 1,634,960 $ 1,987,269
Adjustments to reconcile operating profit to
net cash provided by operating activities:
Depreciation(non cash) 2,184,329 1,875,143
Increase(decrease)in accrued compensated absences(non cash) 20,910 21,264
(Increase)decrease in accts.receivable,net of bad debt expense 50,411 (102,128)
(Increase)decrease in other receivables (18,673) (5,019)
(Increase)decrease in inventory (38,086) 59,877
(Increase)decrease in prepaid expenses 51,881 (6,455)
Increase(decrease)in accounts and contracts payable 171,889 39,516
Increase(decrease)in other accrued expenses 1,237 14,214
Increase(decrease)in customer deposits 83,067 88,534
TOTAL ADJUSTMENTS 2,506,965 1,984,946
NET CASH PROVIDED BY
OPERATING ACTIVITIES $ 4,141,925 $ 3,972,215
IMMOKALEE WATER& SEWER DISTRICT Page 8 of 55
NOTES TO THE FINANCIAL STATEMENTS
September 30, 2020 and 2019
NOTE A- ORGANIZATION AND SUMMARY OF SIGNIFICANT ACCOUNTING
POLICIES
Organization
Immokalee Water& Sewer District(the "District") was created by Laws of Florida,
(Section) Chapter 78-494 on July 5, 1978,under the provisions of Florida Statute,
Chapter 153.53 and 189.031 for the purpose of providing water and sewer services
to Immokalee, an unincorporated area of eastern Collier County, Florida. The
District's enabling legislation was repealed, updated, reenacted, and codified by Laws
of Florida, Chapter 98-495 on May 28, 1998. On July 1, 2005, Laws of Florida,
Chapter 2005-298 amended Laws of Florida, Chapter 98-495 by expanding the
District's boundaries. On June 10, 2015, Laws of Florida, Chapter 2015-205
amended Laws of Florida, Chapter 98-495 to provide for salaries/honorariums for
elected District Board of Commissioner members up to $250 each per month.
The District owns, operates,maintains and regulates its water and sewer plants and
systems as an independent special district of the State of Florida. The District is
governed by a seven(7) member Board of Commissioners appointed by the
Governor of the State of Florida. The Board of Commissioners (the "Board")
administer the District, independent from any other local governing body and serve
staggered four(4)year terms.
Reporting Entity
Immokalee Water& Sewer District is financially independent of all other units of
government. It is responsible for financing its own activities and the payment of its
own debt. The Board of Commissioners (the "Board")has the responsibility to
employ management that is responsible for the day-to-day operations of the District.
The Board has absolute authority over all funds included in the entity. Immokalee
Water& Sewer District is not a component unit of any other governmental unit.
The District adheres to Statement of Governmental Accounting Standards Board
(GASB) Statement No. 14, "Financial Reporting Entity", as amended by GASB
Statement Number 39, "Determining Whether Certain Organizations Are Component
Units" and GASB Statement No. 61, "The Financial Reporting Entity: Omnibus -An
Amendment of GASB Statements No. 14 and No. 34". These Statements require
the financial statements of the District (the primary government)to include its
component units, if any. A component unit is a legally separate agency for which the
IMMOKALEE WATER& SEWER DISTRICT Page 9 of 55
NOTES TO THE FINANCIAL STATEMENTS
September 30, 2020 and 2019
NOTE A- ORGANIZATION AND SUMMARY OF SIGNIFICANT ACCOUNTING
POLICIES, CONTINUED
Reporting Entity, continued
primary government is financially accountable or organizations whose exclusion would
cause the financial statements to be misleading 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
District's board, impose its will on the organization,the existence of a financial
benefit/burden relationship or fiscal dependency. Based on this criteria,there are no
component units included or required to be included in the District's financial
statements.
The Immokalee Water& Sewer District adheres to the requirements of
Governmental Accounting Standards Board Statement Number 33 "Accounting and
Financial Reporting for Non-Exchange Transactions." As such, capital related grant
revenue is recorded as non-operating revenue and is reflected on the Statements of
Revenues, Expenses and Changes in Net Position.
The following is a summary of the significant accounting polices used in the
preparation of these financial statements:
The District adheres to the requirements of Governmental Accounting Standards
Board Statement Number 34, "Basic Financial Statement and Management's
Discussion and Analysis for State and Local Governments" (GASB 34). The
government-wide financial statements along with the notes to the financial statements
and the RSI, as noted below comprise the basic financial statements.
The basic financial statements of the District are comprised of the following:
-Government-wide financial statements
-Notes to the financial statements
-Required supplementary information other than MD&A
IMMOKALEE WATER& SEWER DISTRICT Page 10 of 55
NOTES TO THE FINANCIAL STATEMENTS
September 30, 2020 and 2019
NOTE A- ORGANIZATION AND SUMMARY OF SIGNIFICANT ACCOUNTING
POLICIES, CONTINUED
Government-Wide Financial Statements
The government-wide financial statements (i.e., the Statements of Net Position and
the Statements of Revenues, Expenses and Changes in Net Position) report
information on all of the activities of the District and do not emphasize fund types.
These business-type activities comprise the primary government. Business-type
activities rely on user fees and charges to support its activities rather than taxes and
intergovernmental revenues. The purpose of the government-wide financial
statements is to allow the user to be able to determine if the District is in a better or
worse financial position than the prior year. The District uses only one fund.
Government-wide financial statements are reported using the economic resources
measurement focus and the accrual basis of accounting. Under the accrual basis of
accounting, revenues, expenses, gains, losses, assets, and liabilities resulting from
exchange and exchange-like transactions are recognized when the exchange takes
place. Revenues, expenses, gains, losses, assets, and liabilities resulting from
nonexchange transactions are recognized in accordance with the requirements of
GASB Statement Number 33 "Accounting and Financial Reporting for Nonexchange
Transactions."
Amounts paid to acquire capital assets are capitalized as assets in the
government-wide financial statements, rather than reported as expenditures.
Proceeds of long-term debt are recorded as liabilities in the government-wide
financial statements, rather than as other financing sources. Amounts paid to reduce
long-term indebtedness of the reporting government are reported as a reduction of
the related liability in the government-wide financial statements, rather than as
expenditures.
The Statements of Revenues, Expenses and Changes in Net Position demonstrates
the degree to which the direct expenses of a given function are offset by program
revenues. Direct expenses are those that are clearly identifiable with a specific
function or segment. Program revenues include: 1) charges to customers or
applicants who purchase,use or directly benefit from goods, services, or privileges
provided by a given function and 2) grants and contributions that are restricted to
meeting the operational or capital improvements of a particular function.
IMMOKALEE WATER& SEWER DISTRICT Page 11 of 55
NOTES TO THE FINANCIAL STATEMENTS
September 30, 2020 and 2019
NOTE A- ORGANIZATION AND SUMMARY OF SIGNIFICANT ACCOUNTING
POLICIES, CONTINUED
Government-Wide Financial Statements, continued
Operating revenues are considered to be revenues generated by services performed
and/or by fees charged such as water and sewer usage, connection, inspection fees
and flow testing.
Budgetary Information
As required,the District uses only one fund to account for its activities and,therefore,
it is considered a major fund. The District has elected to report budgetary
comparison of its major fund as required supplementary information(RSI).
Fund Accounting
The District's financial practices are based upon fund accounting concepts. A fund is
defined as a fiscal and accounting entity with a self-balancing set of accounts,
recording cash and other financial resources, together with all related liabilities and net
assets (fund equity balances) and changes therein.
The accompanying financial statements reflect Business -Type Activities and are
classified as a single Proprietary Fund Type -Enterprise Fund. This fund accounts
for the cost of services provided by the District as well as the revenues earned by the
District.
Business -Type Activities - Proprietary Fund Type
Enterprise Fund-An enterprise fund is used to account for operations (1)that are
financed and operated in a manner similar to private business enterprises where the
intent of the governing body is that the costs (expenses, including depreciation) of
providing goods or services to the general public on a continuing basis be financed or
recovered primarily through user charges; or(2)where the governing body has
decided that periodic determination of revenues earned, expenses incurred, and/or
net income is appropriate for capital maintenance,public policy,management control,
accountability, or other purposes.
IMMOKALEE WATER& SEWER DISTRICT Page 12 of 55
NOTES TO THE FINANCIAL STATEMENTS
September 30, 2020 and 2019
NOTE A- ORGANIZATION AND SUMMARY OF SIGNIFICANT ACCOUNTING
POLICIES, CONTINUED
Measurement Focus
Proprietary funds are accounted for on a flow of economic resources measurement
focus. With this measurement focus, assets and liabilities associated with the
operation of these funds are included on the statements of net position. Proprietary
fund-type operating statements present increases (i.e. revenues) and decreases (i.e.
expenses) in total net position. Operating revenues and expenses result from
providing water distribution as well as wastewater collection and treatment to
members within the District's boundaries. Generally, other revenues and expenses
are treated as non-operating revenues and expenses.
When both restricted and unrestricted resources are available for use, it is the
District's policy to use restricted resources first,then unrestricted resources as they
are needed.
Basis of Accounting
The proprietary fund type is presented on the accrual basis of accounting. Under the
accrual basis of accounting, revenues are recorded in the period earned and expenses
are recorded in the period the liability is incurred.
Budgetary Process
The District operates under a fixed budget for control purposes. The budget and
amendments, if any, are approved by the Board of Commissioners. The budget is
prepared on a Non-GAAP accrual basis,whereby items such as capital expenditures
and debt principal payments are budgeted as expenses.
The annual budget serves as the legal authorization for expenditures. Expenditures
cannot legally exceed the total amount budgeted. All budget amendments, which
change the legally adopted total appropriation, are approved by the Board.
The District follows these procedures in establishing budgetary data.
1. During the summer of each year, management submits to the Board of
Commissioners a proposed operating budget for the fiscal year commencing on
October 1. The operating budget includes proposed expenditures and the means
of financing them.
IMMOKALEE WATER& SEWER DISTRICT Page 13 of 55
NOTES TO THE FINANCIAL STATEMENTS
September 30,2020 and 2019
NOTE A- ORGANIZATION AND SUMMARY OF SIGNIFICANT ACCOUNTING
POLICIES, CONTINUED
Budgetary Process, continued
2. Public hearings are conducted to obtain citizen comments.
3. The budget is adopted by approval of the Board of Commissioners.
4. Budget amounts, as shown in these financial statements, are as originally adopted
or as amended by the Board of Commissioners.
5. The budget is adopted on a basis consistent with accounting principles generally
accepted in the United States of America, except as reflected in the
supplementary information and as noted above.
6. The level of control for appropriations is exercised at the fund level.
7. Appropriations lapse at year-end.
The Board of Commissioners did amend the budget during the fiscal year ended
September 30, 2020 to increase total budgeted net revenue by $230,481 and an
increase in budgeted expenses (including net non-operating revenue and expense)by
$230,481.
Cash
For the purpose of the Statements of Cash Flows, the District considers all highly
liquid investments, including both unrestricted and restricted,with a maturity of three
months or less,when purchased,to be a cash equivalent, in accordance with District
policy.
Accounts Receivable/Allowance for Doubtful Accounts
Receivables include user fees for water and wastewater services provided as part of
the operations by the District. The accounts receivable are recorded net of the
estimated allowance for doubtful accounts. The District operates using an allowance
and collection policy that ultimately provides for discontinuance of water service due
to nonpayment by the user. The policy also provides for application of the respective
user's security deposit upon certain criteria. Additionally, the policy requires a user
landlord to satisfy any outstanding user fees (tenant)prior to allowing services to a
future tenant for that landlord.
IMMOKALEE WATER& SEWER DISTRICT Page 14 of 55
NOTES TO THE FINANCIAL STATEMENTS
September 30, 2020 and 2019
NOTE A- ORGANIZATION AND SUMMARY OF SIGNIFICANT ACCOUNTING
POLICIES, CONTINUED
Inventory
Inventory consists of utility system parts and hardware supplies at year end. The
inventories are valued at cost,which approximates market. The method used to
determine the value of the inventory is the FIFO (first in-first out)method.
Capital Assets and Depreciation
Capital assets acquired by proprietary funds are reported in those funds at historical
cost or estimated historical cost if actual historical cost is not available.
Donated assets are reported at estimated fair market value at the time received.
Certain infrastructure-type fixed assets consisting of certain improvements such as
roads, curbs, gutters and lighting systems have not been capitalized, as the District
does not generally incur such expenditures. However, the systems' distribution and
collection lines and pumps are capitalized and depreciated as part of the overall
system. Assets acquired with a cost or fair value of$5,000 or more and a useful life
of 1 year or more are capitalized. Maintenance,repairs and minor renovations are
not capitalized. The acquisition of land and construction projects utilizing resources
received from Federal and State agencies are capitalized when the related
expenditure is incurred.
The capital assets are depreciated using the straight-line method of depreciation over
the following estimated useful lives:
Asset Years
Buildings/Plant and Plant Equipment 10-40
Capital Improvements, Distribution Lines 5-40
Furniture, Fixtures and Equipment 3-20
Vehicles 3-7
Restricted Assets
These monies are restricted by the applicable debt covenants and grant agreements or
as customer deposits.
IMMOKALEE WATER& SEWER DISTRICT Page 15 of 55
NOTES TO THE FINANCIAL STATEMENTS
September 30, 2020 and 2019
NOTE A- ORGANIZATION AND SUMMARY OF SIGNIFICANT ACCOUNTING
POLICIES, CONTINUED
Vacation Leave
Accumulated unpaid vacation pay is accrued when incurred in the proprietary fund.
The method of accrual is in accordance with Statement of Governmental Accounting
Standards Board Number 16, "Accounting for Compensated Absences" (GASB
16). This Standard provides for the measurement of accrued vacation leave 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 such as FICA and retirement benefits only.
Accrued unused vacation is accrued and paid at termination. Accrued unused sick
time is not paid at termination.
Encumbrances
Encumbrance accounting,under which purchase orders, contracts and other
commitments for the expenditure of monies are recorded in order to reserve that
portion of the applicable appropriation, is not employed by the District because at
present it is not considered necessary to assure budgetary control or to facilitate
effective cash planning and control.
Membership (Connection) Fees
Water(connection) service installation fees are dedicated for the system expansion
and are treated as contributed capital but recognized as revenue when received(due
to the District)by the District.
Income Taxes
The District, as a governmental unit, is exempt from income taxes under current
provisions of the Internal Revenue Code and Florida State Law.
Fund Equity
Grants, entitlements or shared revenues which are externally restricted for capital
acquisition or construction are treated as contributed capital but recorded as revenue
when due to the District. Contributed or donated fixed assets are also treated as
contributed capital but recorded as revenue when due the District. Reserved retained
earnings represent those portions of fund equity legally restricted by debt covenants
for current and future debt service.
IMMOKALEE WATER& SEWER DISTRICT Page 16 of 55
NOTES TO THE FINANCIAL STATEMENTS
September 30, 2020 and 2019
NOTE A- ORGANIZATION AND SUMMARY OF SIGNIFICANT ACCOUNTING
POLICIES, CONTINUED
Use of Estimates
The preparation of basic financial statements in conformity with accounting principles
generally accepted in the United States of America requires management to make
estimates and assumptions that affect the reported amounts of assets, liabilities and
disclosure of contingent assets and liabilities at the date of the financial statements and
the reported amounts of revenues and expenses during the reporting period. Actual
results could differ from those estimates.
Reclassifications
Certain amounts in the financial statements have been reclassified to conform with the
current year presentation. These reclassifications had no effect on the results of
operations or net assets.
Subsequent Events
Subsequent events have been evaluated through May 19, 2021, which is the date
the basic financial statements were available to be issued.
Application of FASB Pronouncements to Proprietary Funds
In accordance with Governmental Accounting Standards Board(GASB) Statement
No. 20, "Accounting and Financial Reporting for Proprietary Funds and Other
Governmental Entities That Use Proprietary Fund Accounting", the District has
elected not to apply those FASB Statements and Interpretations issued after
November 30, 1989. Only GASB pronouncements issued after this date will be
adopted by the District.
Accounting Pronouncement GASB Statement No. 42
The District adheres to Government Accounting Standards Board Statement No. 42,
"Accounting and Financial Reporting for Impairment of Capital Assets and for
Insurance Recoveries" (GASB Statement No. 42). GASB Statement No. 42
establishes accounting and financial reporting standards for impairment of capital
assets.
IMMOKALEE WATER& SEWER DISTRICT Page 17 of 55
NOTES TO THE FINANCIAL STATEMENTS
September 30, 2020 and 2019
NOTE A- ORGANIZATION AND SUMMARY OF SIGNIFICANT ACCOUNTING
POLICIES, CONTINUED
Accounting Pronouncement GASB Statement No. 42, continued
A capital asset is considered impaired when its service utility has declined significantly
and unexpectedly. Governments are required to evaluate prominent events or
changes in circumstances affecting capital assets to determine whether impairment of
a capital asset has occurred. Such events or changes in circumstances that may be
indicative of impairment include evidence of physical damage, enactment or approval
of laws or regulations or other changes in environmental factors, technological
changes or evidence of obsolescence, changes in the manner or duration of a capital
asset, and construction stoppage. A capital asset generally should be considered
impaired if both(a) the decline in service utility of the capital asset is large in
magnitude and(b)the event or change in circumstance is outside the normal life cycle
of the capital asset.
The District incurred no capital asset impairment activity for the years ended
September 30, 2020 and 2019.
NOTE B- CASH AND INVESTMENTS
At September 30, 2020 and 2019, cash and cash equivalents (including both
restricted and unrestricted cash and cash equivalents)were $15,835,904 and
$14,838,329 respectively, including unrestricted cash on hand of$3,400 and
$3,400, respectively.
Deposits
The District's deposit policy allows deposits to be held in demand deposits, savings
accounts, certificates of deposit, direct obligations of the U.S. Treasury, Local
Government Surplus Trust Funds, direct obligations of Federal agencies and
instrumentalities and money market accounts. All cash deposits are held in qualified
public depositories pursuant to Florida Statutes Chapter 280, "Florida Security for
Public Deposits Act."
IMMOKALEE WATER& SEWER DISTRICT Page 18 of 55
NOTES TO THE FINANCIAL STATEMENTS
September 30, 2020 and 2019
NOTE B - CASH AND INVESTMENTS, CONTINUED
Deposits, continued
Insured/ Bank Carrying
Collateralized Balance Amount
September 30, 2020
Unrestricted
Depository accounts $ 763,039 $ 763,039 $ 779,310
Money market 10,356,218 10,356,218 10,356,218
11,119,257 11,119,257 11,135,528
Restricted
Depository accounts 1,460,184 1,460,184 1,460,184
Money market 3,236,792 3,236,792 3,236,792
4,696,976 4,696,976 4,696,976
$ 15,816,233 $ 15,816,233 $ 15,832,504
September 30, 2019
Unrestricted
Depository accounts $ 696,192 $ 696,192 $ 708,259
Money market 10,030,003 10,030,003 10,030,003
10,726,195 10,726,195 10,738,262
Restricted
Depository accounts 1,355,957 1,355,957 1,355,957
Money market 2,755,710 2,755,710 2,740,710
4,111,667 4,111,667 4,096,667
$ 14,837,862 $ 14,837,862 $ 14,834,929
Unrestricted and Restricted Deposits
The District's deposits were categorized to give an indication of the level of risk
assumed by the District at year-end. All deposits were fully insured by Federal
Depository Insurance or collateral pursuant to the Public Depository Act(Florida
Statute 280). As such, the District resolved to abide by Florida Statute 218.415(17).
IMMOKALEE WATER& SEWER DISTRICT Page 19 of 55
NOTES TO THE FINANCIAL STATEMENTS
September 30, 2020 and 2019
NOTE B- CASH AND INVESTMENTS, CONTINUED
Restricted Deposits
Restricted deposits are required by the District's outstanding debt agreements as well
as grant and other agreements. Restricted deposits also include customer deposits.
Restricted deposits (carrying amounts) consist of the following at September 30:
2020 2019
Construction account $ 112,310 $ 51,234
Bond sinking fund reserve 2,422,057 2,075,595
Department of Environmental Protection-
Deep Well Injection Reserve 239,737 237,687
Customer deposits 1,457,684 1,353,457
Loan debt service 29,397 25,184
Special assessment-ArrowHead 409,735 353,510
Special assessment- SR 29 26,056 -
$ 4,696,976 $ 4,096,667
Investments
Florida Statutes and the District's investment policy authorize investments in
certificates of deposit(CD's). Certificates of deposit whose values exceed the
amount of the Federal Depository Insurance are collateralized pursuant to the Public
Depository Security Act of the State of Florida. The District had$1,135,999 and
$1,110,486 (bank and book balance)invested in certificates of deposit at September
30, 2020 and 2019, respectively. The CDs carried interest rates of 1.51% and
2.96% at September 30, 2020. The CDs mature on July 17, 2021 and December 4,
2022, respectively.
NOTE C - ACCOUNTS RECEIVABLE,NET
Accounts receivable,net, consist of the following at September 30:
2020 2019
Customer receivables (water/sewer) $ 710,787 $ 780,568
Less allowance for doubtful accounts (69,743) (69,743)
Net receivables $ 641,044 $ 710,825
IMMOKALEE WATER& SEWER DISTRICT Page 20 of 55
NOTES TO THE FINANCIAL STATEMENTS
September 30, 2020 and 2019
NOTE D - GRANT AND ASSESSMENT RECEIVABLES
Grant and assessment receivables consisted of the following at September 30:
2020 2019
Grants receivable $ - $ -
Special Assessments 1,137,073 1,215,493
$ 1,137,073 $ 1,215,493
The District levied a special assessment of$1,060,900 on system users benefiting
from the system improvements (ArrowHead) funded by the $4,932,000 Series 2013
Revenue Bonds during the year ended September 30, 2014. The assessment
collections are restricted to principal reduction of the Series 2013 Revenue Bonds.
The assessment was initially levied through the Collier County Tax Collector on
November 1, 2013. The assessment is a one time assessment payable in full or over
20 years by the affected system users. The special assessment had the following
activity for the years ended September 30:
2020 2019
Balance, October 1, as restated $ 743,756 $ 790,275
Assessment levied - -
Collections (53,426) (46,519)
$ 690,330 $ 743,756
The District levied a special assessment of$496,731 on system users benefiting from
system improvements on State Road 29 during the year ended September 30, 2019.
The assessment was initially levied through the Collier County Tax Collector on
November 1, 2018. The assessment is a one time assessment payable in full or over
20 years by the affected system users. The special assessment had the following
activity for the years ended September 30:
2020 2019
Balance, October 1, as restated $ 471,737 $ -
Assessment levied - 496,731
Collections (24,994) (24,994)
$ 446,743 $ 471,737
IMMOKALEE WATER& SEWER DISTRICT Page 21 of 55
NOTES TO THE FINANCIAL STATEMENTS
September 30, 2020 and 2019
NOTE E - CAPITAL ASSET ACTIVITY
The following is a summary of changes in capital asset activity for the year ended
September 30, 2020:
Balance Balance
October 1 Adjustments/ September 30
2019 Additions Retirements Reclassifications 2020
Capital Assets Not
Being Depreciated:
Land $ 2,645,941 $ - $ - $ - $ 2,645,941
Construction in Progress 21,923,826 1,390,104 - (22,349,037) 964,893
Total Capital Assets Not
Being Depreciated 24,569,767 1,390,104 - (22,349,037) 3,610,834
Capital Assets
Being Depreciated:
Buildings&Improvements 1,805,024 - - (134,248) 1,670,776
Water and Wastewater
Plant and Systems 63,726,935 589,848 - 22,483,285 86,800,068
Machinery&Equipment 3,513,313 22,915 - - 3,536,228
Total Capital Assets
Being Depreciated 69,045,272 612,763 - 22,349,037 92,007,072
Less Accumulated
Depreciation:
Buildings&Improvements (894,945) (44,210) - 15,765 (923,390)
Plant and Systems (31,941,307) (1,908,062) - (925,811) (34,775,180)
Machinery&Equipment (3,087,839) (232,057) - 910,046 (2,409,850)
Total Accumulated Depreciation (35,924,091) (2,184,329) - - (38,108,420)
Capital Assets,Net $ 57,690,948 $ (181,462) $ - $ - 57,509,486
Related debt (31,750,944)
Net Investment in Capital Assets $ 25,758,542
IMMOKALEE WATER& SEWER DISTRICT Page 22 of 55
NOTES TO THE FINANCIAL STATEMENTS
September 30, 2020 and 2019
NOTE E - CAPITAL ASSET ACTIVITY, CONTINUED
The depreciation expense for the years ended September 30, 2020 and 2019 was
$2,184,329 and$1,875,143,respectively. During the years ended September 30,
2020 and 2019, the District continued construction on its system-wide
improvements.
During the year ended September 30, 2018,the District early implemented GASB
Statement No. 89, "Accounting for Interest Cost Incurred Before the End of a
Construction Period". The implementation of the pronouncement requires the interest
cost incurred before the end of a construction period be recognized as an expense in
the period in which the cost is incurred for financial statement prepared using the
economic resources measurement focus. As a result,no interest costs were
capitalized on the project for fiscal years ended September 30, 2020 and 2019.
NOTE F- RETIREMENT PLANS
Plan Description and Provisions
Section 401(a) Plan
The District historically offered all its employees the opportunity to participate in an
individual government employer-sponsored defined contribution 414(h) Money
Purchase Pick-Up Retirement Plan and Trust(the "Plan"). Effective January 1, 2009,
the District restated its retirement plan. As such, the restated plan qualifies as a
401(a) Money Purchase defined contribution plan. The Plan is administered by a
third party administrator. The employer funds substantially all the administrative costs
of the Plan.
The Plan allows all employees to participate after three (3) months creditable
employment. Employees who elect to participate must contribute three (3%)percent
of their gross wages, excluding overtime compensation,up to $3,000. If the
employee desires to defer more than$3,000 they can defer those amounts into the
available IRC Section 457 Plan. The employer is required to contribute six(6%)
percent of the respective participating employees' gross wages, excluding overtime
compensation. Employer contributions into the 401(a) Plan are only required for
those participating employees who contribute three (3%) of their gross wages, as
defined. During the years ended September 30, 2020, 2019, and 2018, the District
contributed 100% of its required contributions.
IMMOKALEE WATER& SEWER DISTRICT Page 23 of 55
NOTES TO THE FINANCIAL STATEMENTS
September 30, 2020 and 2019
NOTE F- RETIREMENT PLANS, CONTINUED
Plan Description and Provisions, continued
Section 401(a) Plan
The District's gross contributions (employer portion) to the Plan for the years ended
September 30, 2020, 2019 and 2018 were $157,046, $142,584, and$132,710
respectively. Employee contributions to the Plan were $78,363, $73,939 and
$61,450, respectively for the years ended September 30, 2020, 2019, and 2018,
respectively. There were no forfeitures used to reduce employer contributions.
Benefits available are limited to the value of the respective employee's individual
account. Individuals direct the investment of their individual account. Benefits vest at
a rate of twenty(20%)percent per year of creditable service and vest in full after five
years of creditable service. A creditable year of service is defined as a year in which
an eligible participant completes 1,000 hours of service. Employees immediately vest
in their contributions. Normal retirement shall be considered to be attainment of age
55 and completion of five(5) creditable years of service. Employees who fail to
complete five(5)years creditable service vest in their respective accounts at twenty
(20%)percent per completed year of creditable service. The Plan requires
retirement at April 1 following the date the participant reaches age 70 1/2. The Plan
provides that forfeitures of employer contributions by non-vested terminated
employees are to be used to offset future employer contributions. Therefore,
employer contributions made to employee accounts who fail to complete the
respective year revert back to the employer. Benefits available to the employee
from the Plan are those generated from the respective employees account. The
employees account may lose principal. The District has no liability for losses, if
any, incurred by the plan. Loans to participants are permitted from the participant's
specific account. Participants should refer to the complete plan document for
specific detail of the Plan.
Section 457 Plan
Effective November 1, 2012, the District approved a resolution to establish a
Deferred Compensation Plan to be made available to all eligible District employees
pursuant to Section 457 of the Internal Revenue Code (IRC). The Plan is
administered by a third party administrator. The employer funds substantially all
administrative costs of the Plan. All contributions made to the Plan are voluntary
deductions from employees' wages,with no contributions to the Plan made by the
District. Employees are eligible to participate after 3 months employment and
attainment of age 18. Deferral amounts are limited per IRS Code Section
457(e)(15). For the year ended September 30, 2020 the deferral limit to the Plan
was $19,500. Employees are immediately vested in their salary deferral amounts.
IMMOKALEE WATER& SEWER DISTRICT Page 24 of 55
NOTES TO THE FINANCIAL STATEMENTS
September 30, 2020 and 2019
NOTE G- REVENUE BONDS PAYABLE
The following is a summary of the District's revenue bonds payable for the years
ended September 30:
Amount
Balances-September 30,2018 $ 32,849,969
Principal retired (868,000)
Bonds issued -
Balances-September 30,2019 31,981,969
Principal retired (901,000)
Bonds issued -
Balances-September 30,2020 $ 31,080,969
Revenue Bonds payable is comprised of the following at September 30:
2020 2019
$5,300,000 Series A,Water and Sewer Revenue Bonds,
issued July 1981,through USDA Rural Development.
Principal is payable annually beginning September 1,
1983 through September 1,2020;interest payable
annually at the rate of 5%;collateralized by the gross
operating revenues of the system and assessments
levied on the lands benefited by the system. $ - $ 120,000
$722,715 Series B,Water and Sewer Revenue Bonds,
issued July 1981,through USDA Rural Development.
Principal is payable annually beginning September 1,
1983 through September 1,2020;interest payable
annually at the rate of 5%;collateralized by the gross
operating revenues of the system and assessments
levied on the lands benefited by the system. - 43,000
$635,000 Series 1985,Water and Sewer Revenue
Bonds,issued May 1987,through USDA Rural
Development. Principal is payable annually beginning
September 1, 1989 through September 1,2026;interest
payable annually at the rate of 5%;collateralized by
the gross operating revenues of the system and
assessments levied on the lands benefited by the
system. 165,969 191,969
IMMOKALEE WATER& SEWER DISTRICT Page 25 of 55
NOTES TO THE FINANCIAL STATEMENTS
September 30,2020 and 2019
NOTE G- REVENUE BONDS PAYABLE, CONTINUED
2020 2019
$3,750,000 Series 1989,Water and Sewer Revenue
Bonds,issued October 1991,through USDA Rural
Development. Principal is payable annually beginning
September 1, 1994 through September 1,2031;interest
payable annually at the rate of 5%;collateralized by
the gross operating revenues of the system and
assessments levied on the lands benefited by the
system. 1,846,000 1,970,000
$250,000 Series 1990,Water and Sewer Revenue
Bonds,issued October 1991,through USDA Rural
Development. Principal is payable annually beginning
September 1, 1994 through September 1,2031;interest
payable annually at the rate of 5%;collateralized by
the gross operating revenues of the system and
assessments levied on the lands benefited by the
system. 123,000 131,000
$4,313,200 Series 1996,Water and Sewer Revenue
Bonds,issued August 1996,through USDA Rural
Development. Principal is payable annually beginning
September 1, 1998 through September 1,2035;interest
payable annually at the rate of 5.125%;collateralized
by the gross operating revenues of the system and
assessments levied on the lands benefited by the
system. 2,674,000 2,791,000
$802,000 Series 1998,Water and Sewer Revenue
Bonds,issued October 1998,through USDA Rural
Development. Principal is payable annually beginning
September 1,2001 through September 1,2038;interest
payable annually at the rate of 4.5%;collateralized by
the gross operating revenues of the system and
assessments levied on the lands benefited by the
system. 541,000 560,000
IMMOKALEE WATER& SEWER DISTRICT Page 26 of 55
NOTES TO THE FINANCIAL STATEMENTS
September 30,2020 and 2019
NOTE G- REVENUE BONDS PAYABLE, CONTINUED
2020 2019
$2,252,000 Series 2001,Water and Sewer Refunding
Bonds,issued December 2001,through USDA Rural
Development. Principal is payable annually beginning
September 1,2004 through September 1,2041;interest
payable annually at the rate of 4.5%;collateralized by
the gross operating revenues of the system and
assessments levied on the lands benefited by the
system. 1,673,000 1,720,000
$3,366,200 Series 2008,Water and Sewer Revenue
Bonds,issued March 28,2008 through USDA Rural
Development. Principal is payable annually beginning
September 1,2008 through September 1,2047;interest
payable annually at the rate of 4.375%;collateralized
by the gross operating revenues of the system and
assessments levied on the lands benefited by the
system. 2,869,000 2,924,000
$4,932,000 Series 2013,Water and Sewer Revenue
Bonds,issued March 1,2013,through USDA Rural
Development. Principal and interest are payable
annually beginning September 1,2016 through
September 1,2052;interest payable annually at the rate
of 2.5%;collateralized by the gross operating revenues
of the system and a special assessment levied on the
lands benefited by the system. 4,619,000 4,676,000
$17,134,000 Series 2018 A&B,Water and Sewer
Revenue Bonds,issued May 3,2018,through USDA
Rural Development. Interest only due September 1,
2018,then principal and interest are payable annually
beginning September 1,2019 through September 1,
2057;interest payable annually at the rate of 2.25%;
collateralized by the gross operating revenues of the
system and a special assessments levied on the lands
benefited by the system. 16,570,000 16,855,000
31,080,969 31,981,969
Less: current portion
(due in one year) (769,000) (901,000)
Long-term portion $ 30,311,969 $ 31,080,969
IMMOKALEE WATER& SEWER DISTRICT Page 27 of 55
NOTES TO THE FINANCIAL STATEMENTS
September 30, 2020 and 2019
NOTE G- REVENUE BONDS PAYABLE, CONTINUED
Bond Resolutions
The bond resolutions established certain accounts and determined the order in
which certain revenues are to be deposited into those accounts. In addition, there
are various other covenants established by the official statements and District
resolutions, including such items as debt service coverage, reporting requirements,
and maintenance of facilities. Management believes that it has complied, in all
material respects,with these covenants. All required Reserve balances at
September 30, 2020 and 2019,were maintained and are reflected as restricted
deposits within these financial statements.
A summary of revenue bond debt service requirements to maturity is as follows
September 30:
Years Ending
September 30 Principal Interest Total
2021 $ 769,000 $ 957,240 $ 1,726,240
2022 798,000 928,853 1,726,853
2023 828,000 899,305 1,727,305
2024 859,000 868,496 1,727,496
2025 892,000 836,410 1,728,410
2026 - 2030 4,815,969 3,667,640 8,483,609
2031 - 2035 5,847,000 2,721,295 8,568,295
2036 - 2040 3,932,000 1,893,116 5,825,116
2041 - 2045 3,908,000 1,319,329 5,227,329
2046 -2050 3,807,000 791,511 4,598,511
2051 -2055 3,339,000 362,188 3,701,188
2056 -2057 1,286,000 43,560 1,329,560
$ 31,080,969 $ 15,288,943 $ 46,369,912
Revenue bond debt interest expense was $992,500 and$1,026,345 for the years
ended September 30, 2020 and 2019,respectively. No revenue bond debt interest
expense was capitalized in either year.
IMMOKALEE WATER& SEWER DISTRICT Page 28 of 55
NOTES TO THE FINANCIAL STATEMENTS
September 30, 2020 and 2019
NOTE H- LOANS PAYABLE - SRF
The following is a summary of the District's loans payable activity for the year
ended September 30:
DEP.SRF DEP.SRF
DW110120 DW110121 Total
Balance-September 30,2018 $ 297,668 $ 235,929 $ 533,597
Principal retired (18,855) (15,636) (34,491)
Balance-September 30,2019 278,813 220,293 499,106
Principal retired (20,129) (16,018) (36,147)
Balance-September 30,2020 $ 258,684 $ 204,275 $ 462,959
The loans payable- SRF activity for the year ended September 30 is as follows:
2020 2019
$419,681 loan payable representing 15%of a grant/loan payable to Florida
Department of Environmental Protection.The maximum amount of the loan is
$2,735,112,in which the FDEP has forgiven$2,324,845 of the note. The loan
also required the District to capitalize interest of$9,414 during the year
ended September 30,2011. Interest accrues at 2.71%.Principal and interest is
payable in forty(40)semi-annual payments of$13,660 in May and November
beginning November 15,2011. Final payment due May 2031.The loan is
collateralized by the gross operating revenues of the system and
assessments levied on the lands benefited by the system. $ 258,684 $ 278,813
$335,504 loan payable to Florida Department of Environmental Protection.
The loan requires forty(40)semi-annual payments of$10,637 in November
and May beginning November 15,2011.The loan required the District to
capitalize interest of$7,346 during the year ended September 30,2011. Final
payment date May 2031. Interest accrues at 2.43%. The loan is collateralized
by the gross operating revenues of the system and assessments levied on
the lands benefited by the system. 204,275 220,293
Total loans payable 462,959 499,106
Less current portion: (36,864) (35,931)
$ 426,093 $ 463,175
IMMOKALEE WATER& SEWER DISTRICT Page 29 of 55
NOTES TO THE FINANCIAL STATEMENTS
September 30, 2020 and 2019
NOTE H- LOANS PAYABLE - SRF, CONTINUED
Years Ending
September 30 Principal Interest Total
2021 $ 36,866 $ 11,729 $ 48,595
2022 37,825 10,770 48,595
2023 38,810 9,785 48,595
2024 39,820 8,775 48,595
2025 40,856 7,738 48,594
2026-2030 220,799 22,177 242,976
2031 47,983 612 48,595
S 462,959 $ 71,586 $ 534,545
Loans payable - SRF related interest expense was $12,448 and$14,105 for the
years ended September 30, 2020 and 2019,respectively. No loan interest costs
were capitalized in either year.
NOTE I- CAPITAL LEASE
On October 31, 2018,the District entered into a sixty(60)month, 0% interest
capital lease agreement , for the lease of eight(8)vehicles, in the amount of
$219,307. Monthly payments are $3,655 plus monthly maintenance fees.
Payments began in April, 2019 with final payment due in March 2024. The lease
agreement is collateralized by the respective eight(8)vehicles.
The following is a summary of the District's capital lease payable for the years
ended September 30:
Amount
Balances-September 30,2018 $ -
Proceeds 219,307
Principal payments (21,931)
Balances-September 30,2019 197,376
Proceeds -
Principal payments (43,861)
Balances-September 30,2020 $ 153,515
The cost of capital assets under lease was $219,307 at September 30, 2020. The
accumulated depreciation was $65,792 and the current year depreciation expense
was $25,586 on those capital assets.
IMMOKALEE WATER& SEWER DISTRICT Page 30 of 55
NOTES TO THE FINANCIAL STATEMENTS
September 30, 2020 and 2019
NOTE I- CAPITAL LEASE, CONTINUED
A summary of capital lease debt service requirements to maturity is as follows at
September 30:
Years Ending
September 30 Principal Interest Total
2021 $ 43,861 $ - $ 43,861
2022 43,861 - 43,861
2023 43,861 - 43,861
2024 21,932 21,932
$ 153,515 S - $ 153,515
Interest expense related to the capital lease was $0 and$0 for the years ended
September 30, 2020 and 2019,respectively.
NOTE J- LINE OF CREDIT
On October 15, 2018, the District renewed an agreement with a financial institution
to establish an uncollateralized $1 million revolving Line of Credit(LOC)to be used
for emergency situations. The LOC is available, although the District had not
borrowed any funds from the LOC for the years ended September 30, 2020 or
2019. The LOC required interest paid quarterly and principal at maturity. Interest
accrues at Prime Rate plus .50%with a floor rate of 3.75%. The LOC was due in
full on October 15, 2020 but was renewed through October 15, 2022. Interest rate
at September 30, 2020 was 3.75%.
NOTE K- BOND ANTICIPATION NOTE
On May 4, 2020 the District entered into a Bond Anticipation Note (BAN)with a
financial institution to provide interim construction financing for improvements to
water facilities, clarifier project, in the amount of$944,000. Interest payable at
2.15% is due every six months. The BAN requires accrued interest and principal
payable every six(6)months and upon maturity. The note is collateralized by a
commitment from the USDA Rural Development Program. At September 30, 2020
and 2019,the BAN payable balance was $53,501 and$0,respectively. Interest
expense for the years ended September 30, 2020 and 2019 was $0 and $0 and no
loan interest costs were capitalized. Upon completion of the related construction
project, the BAN will be replaced by permanent financing from USDA by the
$944,000 Series 2021,Water and Sewer Revenue Bonds.
IMMOKALEE WATER& SEWER DISTRICT Page 31 of 55
NOTES TO THE FINANCIAL STATEMENTS
September 30, 2020 and 2019
NOTE L - ACCRUED COMPENSATED ABSENCES
Employees of the District are entitled to paid vacation based on length of service and
job classification at termination. Unused accrued sick time is not paid at termination.
Accrued compensated absences had the following activity for the year ended
September 30:
Amount
Accrued compensated absences,
September 30,2018 $ 127,810
Net Increase 21,264
Accrued compensated absences,
September 30,2019 149,074
Net Increase 20,910
Accrued compensated absences,
September 30,2020 $ 169,984
NOTE M-CONTINGENCIES
Litigation
The District, from time to time, is involved as a defendant or a plaintiff in certain
litigation and claims arising in the ordinary course of operations. As such,the District
maintains third party insurance coverages. In the opinion of legal counsel, the range
of potential recoveries or liabilities will not materially affect the financial position of the
District. The District intends to vigorously defend all claims unless first settled.
Potential losses, if any, may be recoverable through insurance coverages.
Federal Grants
Grant monies received by the District 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 District does not
believe that such disallowances, if any,would have a material effect on the financial
position of the District.
The operations of the District are dependent upon the condition of the District's
facilities. These facilities are currently being rehabilitated and improved substantially
through the receipt of federal funding. Loss or reduction of such funding would have
a material effect on the operations of the District.
IMMOKALEE WATER& SEWER DISTRICT Page 32 of 55
NOTES TO THE FINANCIAL STATEMENTS
September 30, 2020 and 2019
NOTE N- PRIOR PERIOD ADJUSTMENT
Restatement of Net Position
The ending net position of the District for the year ended September 30, 2019 was
adjusted as follows:
Amount
Net Position,September 30,2019 as originally stated $ 39,841,973
Adjustment to include refund payable for prior year billing error (182,138)
Adjustment to include receivable for assessment made in the prior year 496,731
Net Position,September 30,2019,as restated $ 40,156,566
A correction was posted for a fiscal year 2019 billing system error.
A special assessment levied on system users for the year ended September 30, 2019
was not originally recorded during the year ended September 30, 2019. The effect of
the prior period adjustment is to increase assets and capital contributions for the fiscal
year ended September 30, 2019.
NOTE O- NET POSITION (NET ASSETS)
Restricted net assets consist of the following at September 30:
2020 2019
Restricted assets $ 5,834,049 $ 5,312,160
Less:liabilities payable from restricted cash (2,512,146) (3,129,580)
$ 3,321,903 $ 2,182,580
Unrestricted net assets consist of the following at September 30:
2020 2019
Designated for emergencies $ 841,000 $ 761,000
Designated for operations 4,138,975 3,308,656
Designated for vehicle replacement 464,495 527,483
Designated for capital equipment 337,557 546,416
Designated for maint.reserve-wastewater 3,549,492 3,069,382
Designated for maint.reserve-water 824,480 412,240
Total Designated 10,155,999 8,625,177
Undesignated 2,838,265 4,336,312
Total unrestricted net assets $ 12,994,264 $ 12,961,489
IMMOKALEE WATER& SEWER DISTRICT Page 33 of 55
NOTES TO THE FINANCIAL STATEMENTS
September 30, 2020 and 2019
NOTE P- RISK MANAGEMENT
The District is exposed to various risks of loss related to torts; theft of, damage to
and destruction of assets; errors and omissions; injuries to employees, and natural
disasters.
Insurance programs for general/professional liability, automobile, and property are
through commercial insurance. The District retains the risk of loss, on insured claims,
up to a deductible amount(ranging from 0% to 5% of total insured value depending
on the type of loss) with the risk of loss in excess of this amount transferred to the
insurance carrier. Limits of general liability are $1,000,000 per occurrence. The
District is third party insured for employee health as well as workers' compensation.
NOTE Q - COMMITMENT
On July 23, 2019, the USDA obligated funds to the District for a$2,760,236
Clarifier Rehabilitation Project to be funded with a$944,000 Series 2021 Water and
Sewer Revenue bonds and a$765,000 grant. The remaining funds will be provided
by the District. The project began in June 2020 and is estimated to be completed in
December 2021. The Project is to be funded initially by the $944,000 BAN.
As of September 30, 2020, $53,501 was expended for this project.
NOTE R- SUBSEQUENT EVENT
Subsequent to year end, the District approved and submitted a proposed local bill
(HB1637)to the State of Florida Legislature to amend the Laws of Florida, Chapter
98-495 to clarify that existing Board members whose term has expired may serve
until a successor Board member is appointed.
IMMOKALEE WATER& SEWER DISTRICT Page 34 of 55
NOTES TO THE FINANCIAL STATEMENTS
September 30, 2020 and 2019
NOTE S- COVID 19
In early March 2020,the World Health Organization classified the coronavirus
outbreak "COVID-19" as a global pandemic, and it,unfortunately, continues to
spread. Business continuity, including supply chains and consumer demand across a
broad range of industries and countries,have been severely impacted, as
governments and their citizens take significant and unprecedented measures to
mitigate the consequences of the pandemic. On April 1, 2020, Florida Governor,
Ron DeSantis ordered all Floridians to stay home, to lock down the State against the
Coronavirus. Certain governmental activity was cancelled and/or severely limited.
The District has adapted its operations to accommodate the current environment.
However, the full impact of the COVID-19 outbreak continues to evolve as of the
date of this report. This pandemic has adversely affected global economic activity and
greatly contributed to instability in financial markets. Management is actively
monitoring the local situation on its financial condition, liquidity, operations, donors,
industry, and workforce. Given the daily evolution of COVID-19 and the global and
local responses to curb its spread, the District is not able to estimate the future
effects of COVID-19 on its results of operation, financial condition, or liquidity for
fiscal year 2020-21.
REQUIRED SUPPLEMENTARY
INFORMATION
OTHER THAN MD&A
IMMOKALEE WATER& SEWER DISTRICT Page 35 of 55
SCHEDULE OF REVENUES, EXPENSES AND CHANGES IN
NET POSITION-BUDGET (NON-GAAP BUDGETARY BASIS)AND
ACTUAL WITH RECONCILIATION TO GAAP BASIS
Year ended September 30, 2020
Original Final
Budget Budget Actual Variance
OPERATING REVENUES
Water service $ 3,857,743 $ 4,033,420 $ 3,954,033 $ (79,387)
Wastewater service 5,526,180 5,635,837 5,578,513 (57,324)
Meter service charge 768,334 790,679 790,679 -
Late fees 73,012 71,125 71,125 -
Reconnect and transfer fees 111,173 99,205 99,205 -
Miscellaneous charges,fees and other income 83,873 161,171 135,117 (26,054)
Cross connection control fee 325,004 363,676 363,676 -
TOTAL OPERATING REVENUES 10,745,319 11,155,113 10,992,348 (162,765)
OPERATING EXPENSES
WATER PLANTS/DISTRIBUTION
Salaries and wages 781,568 700,109 699,674 435
Overtime 98,990 15,215 15,215 -
FICA 67,363 56,828 56,828 -
Unemployment taxes 800 796 796 -
Employer pension contribution 46,894 41,221 41,221 -
Health/life insurance 283,115 224,373 210,215 14,158
Workers'compensation 41,711 23,668 23,668 -
Travel and training 26,000 13,958 13,958 -
Telephone and fax 7,954 11,432 11,432 -
Electric 184,488 173,365 167,121 6,244
General liability insurance 21,635 22,046 22,046 -
Comprehensive auto insurance 10,667 8,685 8,685 -
Other insurance 84,459 79,191 79,191 -
Repairs and maintenance 161,522 154,999 156,234 (1,235)
Water meter and register replacements - - 127,509 (127,509)
Other contract services 38,433 33,703 29,668 4,035
Vehicle fuel 29,722 29,980 29,980 -
Vehicle maintenance 28,020 7,396 7,396 -
Vehicle Lease 3,355 6,271 283 5,988
Licenses and permits 300 5,035 5,035 -
Chemicals 93,207 90,452 90,452 -
Other materials 84,200 176,329 176,329 -
Laboratory fees 30,148 21,005 21,005 -
Uniforms/clothing allowance 3,900 2,633 2,633 -
Memberships/periodicals/books 3,487 2,096 2,096 -
SUB-TOTAL WATER PLANTS/DISTRIBUTION 2,131,938 1,900,786 1,998,670 (97,884)
The accompanying notes are an integral part of this statement.
IMMOKALEE WATER& SEWER DISTRICT Page 36 of 55
SCHEDULE OF REVENUES,EXPENSES AND CHANGES IN
NET POSITION-BUDGET (NON-GAAP BUDGETARY BASIS)AND
ACTUAL WITH RECONCILIATION TO GAAP BASIS, CONTINUED
Year ended September 30, 2020
Original Final
Budget Budget Actual Variance
WASTEWATER PLANT
Salaries and wages 610,279 650,583 650,583 -
Overtime 28,549 10,439 10,439 -
FICA 48,870 50,048 50,048 -
Unemployment taxes 760 684 648 36
Employer pension contribution 36,617 32,188 32,188 -
Health/life insurance 186,289 162,522 151,686 10,836
Workers'compensation 20,324 12,706 12,706 • -
Travel and training 18,000 2,551 2,551 -
Telephone and fax 4,177 1,863 1,863 -
Electric 238,300 202,416 208,667 (6,251)
Section 8 electric 7,410 3,893 3,893 -
General liability insurance 21,635 22,046 22,046 -
Comprehensive auto insurance 4,572 3,722 3,722 -
Other insurance 79,204 74,680 74,680 -
Section 8 field maintenance 18,066 - - -
Repairs and maintenance 236,011 156,224 188,083 (31,859)
Section 8 repairs 39,749 8,400 8,400 -
Other contract services 13,288 16,771 25,444 (8,673)
Vehicle fuel 8,854 9,303 9,303 -
Vehicle maintenance 8,055 1,555 1,555 -
Vehicle Lease 2,460 4,570 260 4,310
Licenses and permits 14,003 1,225 1,225 -
Chemicals 126,803 104,284 104,284 -
Other materials 56,338 32,805 32,805 -
Laboratory fees 52,075 50,105 50,105 -
Residuals management 241,421 200,042 200,457 (415)
Uniforms/clothing allowance 2,400 2,154 2,154 -
Memberships/periodicals/books 3,464 1,786 1,786 -
SUB-TOTAL WASTEWATER PLANT 2,127,973 1,819,565 1,851,581 (32,016)
The accompanying notes are an integral part of this statement.
IMMOKALEE WATER& SEWER DISTRICT Page 37 of 55
SCHEDULE OF REVENUES, EXPENSES AND CHANGES IN
NET POSITION-BUDGET (NON-GAAP BUDGETARY BASIS)AND
ACTUAL WITH RECONCILIATION TO GAAP BASIS, CONTINUED
Year ended September 30, 2020
Original Final
Budget Budget Actual Variance
WASTEWATER COLLECTION
Salaries and wages 394,063 373,109 372,884 225
Overtime 38,867 25,130 25,130 -
FICA 33,119 30,370 30,370 -
Unemployment taxes 325 307 307 -
Employer pension contribution 23,644 21,811 21,811 -
Health/life insurance 110,785 109,376 102,383 6,993
Workers'compensation 13,774 7,822 7,822 -
Travel and training 12,000 8,741 8,741 -
Telephone and fax 2,009 5,000 5,000 -
Electric 34,343 36,059 36,059 -
General liability insurance 21,633 22,045 22,045 -
Comprehensive auto insurance 6,095 4,963 4,963 -
Other insurance 3,227 1,545 1,545 -
Repairs and maintenance 105,031 86,781 90,981 (4,200)
Other contract services 10,487 8,945 7,265 1,680
Vehicle fuel 15,627 8,294 8,294 -
Vehicle maintenance 14,793 4,848 4,848 -
Vehicle Lease 8,270 15,415 307 15,108
Licenses and permits 4,000 559 559 -
Chemicals - 14,208 14,208 -
Other materials 52,879 33,215 33,368 (153)
Uniforms/clothing allowance 1,800 1,028 1,028 -
Memberships/periodicals/books 718 1,270 1,270 -
SUB-TOTAL WASTEWATER COLLECTION 907,489 820,841 801,188 19,653
The accompanying notes are an integral part of this statement.
IMMOKALEE WATER& SEWER DISTRICT Page 38 of 55
SCHEDULE OF REVENUES, EXPENSES AND CHANGES IN
NET POSITION-BUDGET (NON-GAAP BUDGETARY BASIS)AND
ACTUAL WITH RECONCILIATION TO GAAP BASIS, CONTINUED
Year ended September 30, 2020
Original Final
Budget Budget Actual Variance
CUSTOMER SERVICE/ADMIN
Salaries and wages 968,905 781,984 781,984 -
Overtime 4,927 8,158 8,158 -
FICA 74,498 57,790 57,790 -
Unemployment taxes 956 1,061 1,061 -
Employer pension contribution 56,874 39,764 39,764 -
Health/life insurance 196,553 189,427 176,617 12,810
Workers'compensation 2,262 1,142 1,142 -
Legal services 43,000 354,422 354,422 -
Legal services-sewer assessments - - - -
Other professional services 1,500 14,258 14,258 -
Accounting/auditing 49,000 50,435 50,435 -
Engineering services 137,155 192,842 192,842 -
Travel and training 36,000 6,764 7,126 (362)
Telephone and fax 4,634 8,312 8,312 -
Postage and freight 38,997 33,815 33,815 -
General liability insurance 4,526 5,514 4,894 620
Comprehensive auto insurance 762 - 620 (620)
Other insurance 45,641 59,211 59,211 -
Other contract services 5,329 99,457 66,230 33,227
Repairs and maintenance 39,650 494 494 -
Vehicle fuel 308 106 106 -
Vehicle maintenance 50 - - -
Vehicle Lease 2,146 4,105 260 3,845
Office supplies 32,081 22,823 23,940 (1,117)
Miscellaneous office expense 59,831 117,180 117,256 (76)
Miscellaneous bank fees 11,831 4,618 12,651 (8,033)
Miscellaneous expense 5,330 5,630 5,630 -
Arrowhead assessment exp. 3,000 - - -
Advertising 3,676 11,141 11,141 -
Licenses and permits 1,707 175 175 -
Memberships/periodicals/books 13,710 10,156 10,156 -
SUB-TOTAL CUSTOMER SERVICE/ADMIN 1,844,839 2,080,784 2,040,490 40,294
The accompanying notes are an integral part of this statement.
IMMOKALEE WATER& SEWER DISTRICT Page 39 of 55
SCHEDULE OF REVENUES, EXPENSES AND CHANGES IN
NET POSITION-BUDGET (NON-GAAP BUDGETARY BASIS)AND
ACTUAL WITH RECONCILIATION TO GAAP BASIS, CONTINUED
Year ended September 30, 2020
Original Final
Budget Budget Actual Variance
MAINTENANCE
Salaries and wages 439,588 225,450 225,210 240
Overtime 29,849 128 128 -
FICA 35,912 16,996 16,996 -
Unemployment taxes 285 213 213 -
Employer pension contribution 26,375 22,062 22,062 -
Health/life insurance 141,192 127,758 120,369 7,389
Workers'compensation 14,935 8,507 8,507 -
Travel and training 14,000 2,329 2,329 -
Telephone and fax 1,923 4,603 4,603 -
General liability insurance 2,685 2,457 2,457 -
Comprehensive auto insurance 9,143 7,446 7,446 -
Repairs and maintenance 23,706 8,846 20,751 (11,905)
Other contract services 4,971 6,399 4,719 1,680
Vehicle fuel 13,520 6,804 6,804 -
Vehicle maintenance 9,998 19,299 19,299 -
Vehicle lease 8,227 15,728 1,118 14,610
Licenses and permits 1,460 - - -
Other materials 28,685 15,464 15,624 (160)
Uniforms/clothing allowance 2,100 1,547 1,547 -
Memberships/periodicals/books 1,944 948 948 -
SUB-TOTAL MAINTENANCE 810,498 492,984 481,130 11,854
DEPRECIATION
Depreciation 1,925,341 1,925,344 2,184,329 (258,985)
SUB-TOTAL DEPRECIATION 1,925,341 1,925,344 2,184,329 (258,985)
TOTAL OPERATING EXPENSES 9,748,078 9,040,304 9,357,388 (317,084)
OPERATING PROFIT $ 997,241 $ 2,114,809 $ 1,634,960 $ (479,849)
The accompanying notes are an integral part of this statement.
IMMOKALEE WATER& SEWER DISTRICT Page 40 of 55
SCHEDULE OF REVENUES,EXPENSES AND CHANGES IN
NET POSITION-BUDGET (NON-GAAP BUDGETARY BASIS)AND
ACTUAL WITH RECONCILIATION TO GAAP BASIS, CONTINUED
Year ended September 30, 2020
Original Final
Budget Budget Actual Variance
OPERATING PROFIT,
BROUGHT FORWARD $ 997,241 $ 2,114,809 $ 1,634,960 $ (479,849)
NON-OPERATING REVENUES(EXPENSES)
Interest income 151,161 127,063 144,795 17,732
Contributed capital-grant-FDEP/EPA - - - -
Contributed capital-grant-USDA/FHA 765,000 765,000 778,792 13,792
Contributed capital-customers 59,671 59,671 55,765 (3,906)
Contributed capital-developers 70,000 167,300 325,670 158,370
Debt proceeds-Capital lease - - - -
Hurricane Irma - 3,458 3,458 -
Covid 19 expenses - (16,366) (33,166) (16,800)
Bond proceeds-USDA 944,000 944,000 53,501 (890,499)
Other non-operating revenue 41,072 6,133 32,187 26,054
Capital outlay (1,838,671) (2,801,190) (2,002,867) 798,323
Principal retirement-bonds (936,931) (936,931) (901,000) 35,931
Principal retirement-SRF - - (36,147) (36,147)
Principal retirement-capital lease - - (43,861) (43,861)
Net Assets-brought forward 7,151,081 6,930,047 - (6,930,047)
Net Assets-carryforward (6,335,002) (6,335,002) - 6,335,002
Maintenance reserve - - - -
Interest expense (1,008,622) (1,008,622) (1,004,948) 3,674
Bad debt expense (35,000) (19,370) (19,370) -
Gain(Loss)on disposal of assets (25,000) - - -
NET NON-OPERATING
REVENUES(EXPENSES) (997,241) (2,114,809) (2,647,191) (532,382)
NET PROFIT(LOSS) $ - $ - $ (1,012,231) $ (1,012,231)
Reconciliation:
Net profit(loss)(Non-GAAP Budgetary Basis) $ (1,012,231)
Debt proceeds-BAN (53,501)
Capital outlay 2,002,867
Principal retirement-bonds 901,000
Principal retirement-SRF 36,147
Principal retirement-Capital lease 43,861
Increase in Net Position(GAAP Basis) 1,918,143
Net position-beginning of the year,as restated 40,156,566
Net position-end of the year $ 42,074,709
The accompanying notes are an integral part of this statement.
IMMOKALEE WATER& SEWER DISTRICT
SCHEDULE OF EXPENDITURES OF FEDERAL AWARDS
Year ended September 30, 2020
Grantor's Program/
Federal Agency/Pass Through Contract Award
State Agency/Program Title CFDA# Number Amount
FEDERAL AWARDS
U.S.Department of Agriculture-Rural Development
MAJOR(TYPE A)
Water and Waste Disposal Systems for Rural
Communities Grant Portion-Water lines 10.760 Grant#26 $ 4,063,900
Water and Waste Disposal Systems for Rural
Communities Grant Portion-Water lines 10.760 Grant#27 1,547,200
Water and Waste Disposal Systems for Rural
Communities Grant Portion-clarifier-
Bond Anticipation Loan(BAN) 10.760 Loan#28 BAN 944,000
Water and Waste Disposal Systems for Rural
Communities Loan Portion-Clarifier 10.760 Grant#29 765,000
7,320,100
U.S.Department of Homeland Security
NONMAJOR(TYPE B)
Disaster Grants-Public Assistance-Hurricane Irma 97.036 3,458
TOTAL FEDERAL FINANCIAL AWARDS $ 7,323,558
*This amount is reflected as a loan addition and outstanding loan rather than as a revenue since the District is
accounted for as an enterprise fund.
Page 41 of 55
Receipts/
Revenue Disbursements/
Recognized Expenditures Subrecipients
$ - $ - None
778,792 778,792 None
53,501 53,501 * None
- None
832,293 832,293
3,458 3,458 None
$ 835,751 $ 835,751
IMMOKALEE WATER& SEWER DISTRICT Page 42 of 55
NOTES TO THE SCHEDULE OF EXPENDITURES OF FEDERAL AWARDS
Year ended September 30, 2020
NOTE A- BASIS OF PRESENTATION
The Schedule of Expenditures of Federal Awards has been prepared on an accrual
basis of accounting in conformity with accounting principles generally accepted in the
United States of America and is in accordance with the provisions of the Uniform
Guidance less any unpaid disputed retainage.
Expenditures reported on the Schedule of Expenditures of Federal Awards include
cash disbursements,whether capitalized or expensed, during the fiscal year as well as
loan and grant related amounts recorded as payable at year end. Revenues reported
on the Schedule of Expenditures of Federal Awards include income recognized
including loan and grant receivables recorded at year end. Cash receipts that were
deferred are footnoted as such.
NOTE B - INDIRECT COSTS
The District did not routinely allocate costs to Federal Awards. Costs charged to
such programs were direct costs unless specifically incurred for the program and
allowed and indicated as such.
The District has elected not to use the 10% de minimus indirect cost rate allowed
under the Uniform Guidance.
ADDITIONAL REPORTS
TAT S CAN Affiliations
{� Florida Institute of Certified Public Accountants
onipall�'t PA American Institute of Certified Public Accountants
Private Companies Practice Section
Certified Public Accountants&Consultants Tax Division
Page 43 of 55
INDEPENDENT AUDITOR'S REPORT ON INTERNAL
CONTROL OVER FINANCIAL REPORTING AND ON COMPLIANCE
AND OTHER MATTERS BASED ON AN AUDIT OF
BASIC FINANCIAL STATEMENTS PERFORMED IN ACCORDANCE
WITH GOVERNMENT AUDITING STANDARDS
Board of Commissioners
Immokalee Water& Sewer District
1020 Sanitation Road
Immokalee, Florida 34142
We have audited, in accordance with auditing standards generally accepted in the United States of
America and the standards applicable to financial audits contained in Government Auditing
Standards issued by the Comptroller General of the United States of America,the basic financial
statements of the business-type activities of Immokalee Water& Sewer District(the "District")
which comprise the statement of net position as of September 30, 2020,and the related
statements of revenues, expenses and changes in net position and cash flows for the year then
ended and the related notes to the financial statements and have issued our report thereon dated
May 19, 2021.
Internal Control Over Financial Reporting
In planning and performing our audit of the financial statements,we considered Immokalee Water
& Sewer District's internal control over financial reporting (internal control) as a basis for designing
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 Immokalee Water& Sewer District's internal control. Accordingly,we do not
express an opinion on the effectiveness of the Immokalee Water& Sewer District'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
combination of deficiencies, in internal control such that there is a reasonable possibility that a
material misstatement of the basic financial statements will not be prevented or detected and
INTEGRITY SERVICE EXPERIENCE
12621 World Plaza Lane, Building 55 •Fort Myers, FL 33907 • Phone: (239) 333-2090• Fax: (239) 333-2097
Page 44 of 55
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 and therefore, material weaknesses or significant
deficiencies in internal control may exist that have not been identified. We did,however,identify
certain deficiencies in internal control,described in the accompanying Schedule of Findings and
Questioned Costs,identified as item 2018-1 that we consider to be material weaknesses, as
defined previously.
Further,we also noted certain other matters that we have reported in our Report to Management
dated May 19,2021.
Compliance and Other Matters
As part of obtaining reasonable assurance about whether Immokalee Water& Sewer District's
financial statements are free from material misstatement, we performed tests of its compliance with
certain provisions of laws,regulations, contracts and grants, noncompliance with which could have
a direct and material effect on the financial statements. 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 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 internal control and
compliance and the results of that testing, and not to provide an opinion on the effectiveness of the
District'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 District's internal control and
compliance. Accordingly,this communication is not suitable for any other purpose.
A •
\--4,tAittaii) p
, )
TUSCAN& COMPANY, P.A.
Fort Myers,Florida
May 19,2021
v 7� .___ \
Affiliations
Il Florida Institute of Certified Public Accountants
Company, PAAmerican Institute of Certified Public Accountants
Private Companies Practice Section
Certified Public Accountants&Consultants Tax Division
Page 45 of 55
Independent Auditor's Report on Compliance for Each Major
Program/Project and on Internal Control Over Compliance Required by
the Uniform Guidance
Board of Commissioners
Immokalee Water& Sewer District
1020 Sanitation Road
Immokalee,Florida 34142
Report on Compliance for Each Major Federal Program
We have audited Immokalee Water& Sewer District's compliance with the types of compliance
requirements described in the OMB Compliance Supplement as applicable, that could have a
direct and material effect on each of Immokalee Water& Sewer District's major federal programs
for the year ended September 30, 2020. Immokalee Water& Sewer District's major federal
programs are identified in the summary of auditor's 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 major federal programs.
Auditor's Responsibility
Our responsibility is to express an opinion on compliance for each of Immokalee Water& Sewer
District's major federal programs 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 of America; and the audit requirements of Title 2 U.S. Code of Federal Regulations Part 200,
"Uniform Administrative Requirements, Cost Principles, and Audit Requirements for Federal
Awards" ("Uniform Guidance"). Those standards and the Uniform Guidance 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 occurred. An audit includes examining, on a test basis, evidence about
Immokalee Water& Sewer District's compliance with those requirements and performing such
other procedures as we considered necessary in the circumstances.
IN"I ECRITY SERVICE EXPERIENCE
12621 World Plaza Lane, Building 55 •Fort Myers, FL 33907 • Phone: (239)333-2090• Fax: (239)333-2097
Page 46 of 55
We believe that our audit provides a reasonable basis for our opinion on compliance for each
major federal program. However, our audit does not provide a legal determination of Immokalee
Water& Sewer District's compliance with those requirements.
Opinion on Each Major Federal Program
In our opinion, Immokalee Water& Sewer District 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 for the year ended September 30, 2020.
Report on Internal Control Over Compliance
Management of Immokalee Water& Sewer District 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 Immokalee
Water& Sewer District's internal control over compliance with the types of requirements that
could have a direct and material effect on each major federal program 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 to test and report on internal control over
compliance in accordance with the Uniform Guidance,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 Immokalee Water& Sewer District'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 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 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 that is less severe than a material weakness in internal control
over compliance,yet important enough to merit attention by those charged with governance.
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 deficiencies,material weaknesses or significant deficiencies. We did
not identify any deficiencies in internal control over compliance that we consider to be material
weaknesses. However,material weaknesses may exist that have not been identified.
Page 47 of 55
Purpose of the Report
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 results of that testing based on the
requirements of the Uniform Guidance. Accordingly,this report is not suitable for any other
purpose.
"1 4,1 4 4 4) 4 4444p1
TUSCAN& COMPANY, P.A.
Fort Myers, Florida
May 19, 2021
IMMOKALEE WATER& SEWER DISTRICT Page 48 of 55
SCHEDULE OF FINDINGS AND QUESTIONED COSTS-FEDERAL
AWARDS
Year ended September 30, 2020
Section I—Summary of Auditor's Results
Financial Statements
Type of auditor's report issued Unmodified
Internal control over financial reporting:
Control deficiency(ies) identified? Yes X No
Significant deficiency(ies) identified? Yes X No
Material weakness(es) identified? X Yes None reported
Noncompliance material to financial statements
noted? Yes X No
Federal Awards
Internal control over major programs:
Control deficiency(ies) identified? Yes X No
Significant deficiency(ies) identified? Yes X No
Material weakness(es) identified? Yes X None reported
Type of auditors report issued on compliance for
major programs Unmodified
Any audit findings disclosed that are required to be
reported in accordance with 2 CFR,
Section 200.516(a)? Yes X No
Identification of major programs (Type A):
CFDA
Number(s) Name of Federal Program or Cluster
10.760 U.S. Department of Agriculture
-Loan
-Grants
Dollar threshold used to distinguish between
Type A and Type B programs Threshold used was $750,000.
Auditee qualified as low-risk auditee? Yes X No
Listing of Subrecipients and matching amounts passed-through:
None -not applicable
IMMOKALEE WATER& SEWER DISTRICT Page 49 of 55
SCHEDULE OF FINDINGS AND QUESTIONED COSTS-FEDERAL
AWARDS, CONTINUED
Year ended September 30, 2020
Section II-Financial Statement Findings
2018-1 Condition: The financial reporting of the District related to the construction
project and payable was deficient and did not allow for sufficient review of
account balances and supervision of data entry.
Questioned Costs: None
Criteria: Accurate monthly and annual financial information should
be prepared and provided to management and the Board on a timely basis.
Context: Significant adjustments to the account balances as of and for
the year ended September 30, 2018 were required during the audit of
the financial statements.
The initial trial balance provided for the audit contained incorrect balances
for accounts payable,retainage payable, contributed capital, net assets and
fixed asset additions.
Cause: Turnover of administrative staff and increase in the volume and
complexity of financial transaction postings are beyond the experience and
training of the current staff.
Effect: Material weakness. Financial information provided to stakeholders
during the fiscal year ended September 30, 2018 did not accurately reflect the
District's financial position as significant adjustments were proposed during the
audit process. These adjustments caused the audit process to be more time
consuming and therefore delayed. It also makes audit issuance difficult to
meet the Federal Single Audit reporting deadlines.
Recommendation: We recommend that the District obtain or designate a
qualified individual to provide assistance to review monthly account balances
and prepare month-end closing adjustments.
IMMOKALEE WATER& SEWER DISTRICT Page 50 of 55
SCHEDULE OF FINDINGS AND QUESTIONED COSTS- FEDERAL
AWARDS, CONTINUED
Year ended September 30, 2020
Section II-Financial Statement Findings, continued
Fiscal Year 2019 Addendum
During fiscal year ended September 30, 2019, the District contracted an
accounting professional experienced in governmental accounting to assist
in the monthly and annual closing and reconciliation process. As a result
significant improvements were made,however not all areas were
addressed due to the timing of implementation. As such, several audit
adjustments were still proposed. The reconciliations and adjustments
caused the audit process to be delayed and time consuming. The District,
with the assistance of the contracted accounting professional,has
proceeded to implement a systematic process of closing and reconciling
and is committed to continuing this service.
Current Year Addendum
During fiscal year ended September 30, 2020,the District continued to
experience turnover in administrative staff. A new Executive Director was
hired during the fiscal year ended September 30, 2020 and a Finance Director
was hired subsequent to year end. Efforts are being focused to systematically
review the accounting and operations of the District to improve the closing and
reconciling process however, significant audit adjustments were proposed due
to the timing of the implementation.
Section III-Federal Award Findings and Questioned Costs
There were no audit findings related to Federal Awards required to be reported by 2 CFR,
Section 200.516(a).
Section IV-Status of Federal Prior Year Findings
The current status is noted above in Section II.
Affiliations
A S CAN Florida Institute of Certified Public Accountants
American Institute of Certified Public Accountants
Company, PA
Private Companies Practice Section
Certified Public Accountants&Consultants Tax Division
Page 51 of 55
INDEPENDENT ACCOUNTANT'S REPORT ON COMPLIANCE
WITH SECTION 218.415,FLORIDA STATUTES
Board of Commissioners
Immokalee Water& Sewer District
1020 Sanitation Road
Immokalee, Florida 34142
We have examined Immokalee Water& Sewer District's compliance with Section 218.415,
Florida Statutes, regarding the investment of public funds during the year ended September 30,
2020. Management is responsible for Immokalee Water& Sewer District's compliance with
those requirements. Our responsibility is to express an opinion on Immokalee Water& Sewer
District'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 Immokalee Water& Sewer District'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 Immokalee Water& Sewer District's compliance with
specified requirements.
In our opinion,Immokalee Water& Sewer District complied,in all material respects,with the
aforementioned requirements for the year ended September 30, 2020.
This report is intended solely for the information and use of the Immokalee Water& Sewer
District 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.
7,1AA.,P.0:44) 16`144f*--447
TUSCAN& COMPANY, P.A.
Fort Myers, Florida
May 19, 2021
INTEGRITY SERVICE EXPERIENCE
12621 World Plaza Lane, Building 55 • Fort Myers, FL 33907 • Phone: (239) 333-2090• Fax: (239) 333-2097
Affiliations
�' d l Florida Institute of Certified Public Accountants
& CniTiiail y' t American Institute of Certified Public Accountants
Private Companies Practice Section
Certified Public Accountants&Consultants Tax Division
Page 52 of 55
INDEPENDENT AUDITOR'S REPORT TO MANAGEMENT
Board of Commissioners
Immokalee Water& Sewer District
1020 Sanitation Road
Immokalee, Florida 34142
We have audited the accompanying basic financial statements of Immokalee Water& Sewer
District (the "District") as of and for the year ended September 30, 2020 and have issued our
report thereon dated May 19, 2021.
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 of America and Chapter
10.550, Rules of the Florida Auditor General. We have issued our Independent Auditor's Report
on Internal Control over Financial Reporting and Compliance and Other Matters based on an
Audit of the Financial Statements Performed in Accordance with Government Auditing Standards.
Disclosures in that report,which is dated May 19, 2021, should be considered in conjunction
with this report to management.
Additionally, our audit was conducted in accordance with Chapter 10.550, Rules of the Auditor
General, which governs the conduct of local governmental entity audits performed in the State of
Florida. This letter included the following information, which is not included in the aforementioned
auditor's report:
• Section 10.554(1)(i)1., Rules of the Auditor General,requires that we determine whether
or not corrective actions have been taken to address findings and recommendations
made in the preceding annual financial audit report. Prior year comments that have not
been resolved are repeated and updated below.
• 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. No such
recommendations were noted to improve financial management except as noted below.
INTEGR]IY SERVICE ... EXPERIENCE
12621 World Plaza Lane,Building 55 • Fort Myers, FL 33907 • Phone: (239)333-2090• Fax: (239)333-2097
Page 53 of 55
• 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 an
effect on the financial statements that is less than material but more than inconsequential.
In connection with our audit,we did not have any such findings.
• Section 10.554(1)(i)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 the management letter,unless disclosed in the notes to the financial
statements. The District discloses this information in the notes to the financial statements.
• Section 10.554(1)(i)5.a., Rules of the Auditor General,requires a statement be included
as to whether or not the local government entity has met one or more of the conditions
described in Section 218.503(1), Florida Statutes, and identification of the specific
condition(s)met. In connection with our audit, we determined that the District did not
meet any of the conditions described in Section 218.503(1), Florida Statutes.
• Pursuant to Sections 10.554(1)(i)5.b. and 10.556(7), Rules of the Auditor General,we
have applied financial condition assessment procedures. It is management's responsibility
to monitor the District's financial condition, and our financial condition assessment was
based in part on representations made by management and the review of financial
information provided by same. In connection with our audit,we determined that the
District did not meet any of the criteria of a deteriorating financial condition as
described in Auditor General Rule Section 10.554(1)(i)(6).c.
• Pursuant to Section 10.544(1)(i)5.b.2., Rules of the Auditor General, if a deteriorating
financial condition(s) is noted then a statement is so required along with the conditions
causing the auditor to make such a conclusion. No such conditions were noted.
• Pursuant to Section 10.554(1)(i)5.c., Rules of the Auditor General, requires a statement
indicating a failure, if any, of a component unit special district to provide financial
information necessary to a proper reporting of the component unit within the audited
financial statements of this entity(F.S. Section 218.39(3)(b)). There are no known
component special districts required to report within these financial statements.
• Section 10.556(10)(a), Rules of the Auditor General, requires that the scope of our audit
to determine the entity's compliance with the provisions of Section 218.415, Florida
Statutes, regarding the investment of public funds. In connection with our audit, we
determined that the District complied with Section 218.415, Florida Statutes as
reported in our Independent Accountant's Report on Compliance with Section 218.415,
Florida Statutes dated May 19, 2021, included herein.
• Section 10.557(3)(m), Rules of the Auditor General,requires a notarized affidavit,
related to impact fees, signed and sworn to be the Chief Financial Officer be included
in the audit report. No such affidavit is included as the District has not implemented any
Impact Fees.
Page 54 of 55
PRIOR YEAR COMMENTS:
2018-1 See finding 2018-1 noted in the Schedule of Findings and Questioned Costs - Federal
Awards - Material Weakness.
2018-3 Fixed Asset Schedules Should be Complete and Maintained Accurately
During the audit, it was noted that the depreciation schedule's beginning accumulated
depreciation balance did not reconcile to prior year audited financial statements. It was
also noted that the depreciation method used was not consistent between all fixed assets.
The District was utilizing straight line and bonus depreciation methods. We recommend
the District correct the fixed asset schedule beginning accumulated depreciation and
strictly use only the straight line depreciation method for all fixed assets.
Fiscal Year 2019 Addendum:
The District continued to utilize two different depreciation methods during fiscal year
ended September 30, 2019 and the beginning accumulated depreciation did not
reconcile to the prior year ending balance. Therefore,the prior year comment is
repeated.
Current Year Addendum:
During the fiscal year ended September 30, 2020, the fixed asset schedule was
reconciled and adjusted to agree to the prior year ending balance. In addition, the
depreciation methods of all assets were adjusted to the straight line method, therefore
the comment is resolved.
CURRENT YEAR COMMENTS:
2020-1 Reconciliation of Account Balances Should Be Performed Routinely and Timely
During the audit, it was noted that the District was unable to provide an accounts payable
listing and fixed asset reconciliation that agreed to the balances recorded at fiscal
year-end.
We recommend that the accounting staff reconcile all account balances on a monthly
basis, ensuring that all balance sheet accounts agree to subsidiary ledgers. These
reconciliations should be performed on a monthly basis and any differences or
discrepancies investigated and corrected.
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2020-2 Recalculation of Billing Rates Should Be Performed
During the billing procedures performed, it was noted that eight(8)of the twenty-five
(25)commercial accounts selected for testing contained an incorrect billing rate. The
error was not discovered for several months as the District did not perform a
recalculation of billings for all customer types to verify rates. Upon discovery,the error
was corrected by the third party billing company. We recommend that the District
recalculate and test billings for all customer types upon implementation of approved rate
changes.
2020-3 SR 29 Special Assessment not Recorded
During the year ended September 30, 2019,the District levied special assessments on
system users benefiting from system improvements on State Road(SR)29. The
assessment was initially levied through the Collier County Tax Collector on November 1,
2018. The original assessment was not recorded as a receivable by the District at the
time. This resulted in the understatement of net position for the fiscal year ended
September 30,2019 and, consequently, a restatement of the ending net position was
recorded for the fiscal year ended September 30, 2019 in the amount of$496,731
during the year ended September 30,2020.
Pursuant to Chapter 119, Florida Statutes,this management letter is a public record and its
distribution is not limited. Auditing standards generally accepted in the United States of America
require us to indicate that this letter is intended solely for the information and use of the Board of
Commissioners,management,the Auditor General of the State of Florida and other federal and
state agencies. This report is not intended to be and should not be used by anyone other than
these specified parties.
74:44614) 41 t\i, A�
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TUSCAN & COMPANY, P.A.
Fort Myers,Florida
May 19, 2021
EXHIBIT
Immokalee Water &Sewer District
1020 Sanitation Road
Immokalee, Florida 34142
(239) 658-3630
FAX(239) 658-3634
Immokalee Water & Sewer District
June 10, 2021
Sherrill F. Norman, CPA
Auditor General, State of Florida
Claude Denson Pepper Building
111 West Madison Street
Tallahassee, Florida 32399-1450
Dear Ms. Norman:
This letter is in response to the Management Letter in the Immokalee Water and Sewer District's Year
Ending September 30, 2020 audit, performed by Tuscan & Company, P.A.; which was presented to and
accepted by the Board on June 9, 2021.
PRIOR YEAR COMMENTS:
2018-1 See finding 2018-I and related 2019 addendum noted in the Schedule of Findings and
Questioned Costs— Federal Awards.
2019 IWSD Response: The District has determined that a full-time accounting professional is
necessary to perform balance sheet, revenue, expense, and payroll account reconciliations, as well as
executing accounts payable and accounts receivable processes. During the April 15, 2020 meeting,
the Board directed the Executive Director to initiate the hiring process of a full-time accounting
professional. The hiring of a full-time employee with experience in accounting and governmental
accounting practices will address this issue.
2020 1WSD Response: The District established a new position, Finance Director, and hired Mr. Brian
Stewart in January 2021. Even though Mr. Stewart did not participate in the initial audit request for
data and reports made in September 2020, he reviewed, corrected, and coordinated many issues,
comments, and questions between February and May 2021 related to FY2019-20.
2018-3 Fixed Asset Schedules Should be Complete and Maintained Accurately
During the audit, it was noted that the depreciation schedule's beginning accumulated
depreciation balance did not reconcile to prior year audited financial statements. It was also
noted that the depreciation method used was not consistent between all fixed assets. The
District was using a straight line and bonus depreciation methods. We recommend the District
correct fixed asset schedule beginning accumulated depreciation and strictly use only the
straight-line depreciation method for all fixed assets.
June 4, 2021
lmmokalee Water and Sewer District Response to Management Letter
Audit for Year Ended September 30, 2020
Page 2
2019 Addendum:
The District continued to utilize two different depreciation methods during the fiscal year
ended September 30, 2019 and the beginning accumulated depreciation did not reconcile to
the prior year ending balance. Therefore, the prior year comment is repeated.
Current Year Addendum:
During the fiscal year ended September 30, 2020, the fixed asset schedule was reconciled and
adjusted to agree to the prior year ending balance. In addition, the depreciation methods of
all assets were adjusted to the straight-line method, therefore the comment is resolved.
CURRENT YEAR COMMENTS:
2020-1 Reconciliation of Account Balances Should Be Performed Routinely and Timely
During the audit, it was noted that the District was unable to provide an accounts payable listing and
fixed asset reconciliation that agreed to the balances recorded at fiscal year-end. We recommend that
the accounting staff reconcile all account balances on a monthly basis, ensuring that all balance sheet
accounts agree to subsidiary ledgers.These reconciliations should be performed on a monthly basis
and any differences or discrepancies investigated and corrected.
2020 IWSD Response: The District is working to implement processes which will ensure balance sheet
accounts agree to subsidiary ledgers.
2020-2 Recalculation of Billing Rates Should Be Performed
During the billing procedures performed, it was noted that eight(8) of the twenty-five (25) commercial
accounts selected for testing contained an incorrect billing rate. The error was not discovered for
several months as the District did not perform a recalculation of billings for all customer types to verify
rates. Upon discovery, the error was corrected by the third-party billing company. We recommend that
the District recalculate and test billings for all customer types upon implementation of approved rate
changes.
2020 IWSD Response: The District is currently correcting commercial customer accounts for prior year
incorrect billings. In the future, new billing rates will be tested prior to implementation.
June 4, 2021
Immokalee Water and Sewer District Response to Management letter
Audit J<>r Year Ended September 30, 2020
Page 3
2020-3 SR 29 Special Assessment not Recorded
During the year ended September 30, 2019, the District levied special assessments on system users
benefiting from system improvements on State Road (SR) 29. The assessment was initially levied
through the Collier County Tax Collector on November 1, 2018. The original assessment was not
recorded as a receivable by the District at the time. This resulted in the understatement of net position
for the fiscal year ended September 30, 2019 and, consequently, a restatement of the ending net
position was recorded for the fiscal year ended September 30, 2019 in the amount of$496,731 during
the year ended September 30, 2020.
2020 IWSD Response: SR 29 assessments will be recorded in the correct account.
The District continues to appreciate the performance of Tuscan & Company staff during the audit to
obtain reasonable assurance about the District's basic financial statements as well as their evaluation
of the presentation of those statements.
Sincerely,
Sarah Catala, Executive Director
Immokalee Water and Sewer District
1020 Sanitation Road I Immokalee, FL 34142
Phone: 239.658.3630 I Mobile: 239.651.9990
Email: SarahCatalaPiw-sd.com
Web: www.iw-sd.com