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CAFR Year End 09-30-2011Collier County Florida Comprehensive Annual Financial Report Year Ended September 30, 2011 The Comprehensive Annual Financial Report (CAFR) is prepared each year by the office of the Clerk of the Circuit Court on behalf of Collier County government. On the cover: The Florida Everglades is a unique natural wonder and an important Part of Collier County. COMPREHENSIVE ANNUAL FINANCIAL REPORT FOR FISCAL YEAR ENDED SEPTEMBER 30, 2011 COLLIER COUNTY, FLORIDA BOARD OF COUNTY COMMISSIONERS FRED W. COYLE, CHAIRMAN — DISTRICT 4 JIM COLETTA, VICE - CHAIRMAN — DISTRICT 5 DONNA FIALA — DISTRICT 1 GEORGIA A. HILLER — DISTRICT 2 TOM HENNING — DISTRICT 3 COUNTY MANAGER LEO E. OCHS, Jr. COUNTY ATTORNEY JEFFREY A. KLATZKOW CLERK OF THE CIRCUIT COURT AND CHIEF FINANCIAL OFFICER DWIGHT E. BROCK DIRECTOR OF FINANCE AND ACCOUNTING CRYSTAL K. KINZEL Prepared by the Office of the Clerk of the Circuit Court, Finance and Accounting Department COLLIER COUNTY, FLORIDA COMPREHENSIVE ANNUAL FINANCIAL REPORT YEAR ENDED SEPTEMBER 30, 2011 TABLE OF CONTENTS INTRODUCTORY SECTION Transmittal Letter Page ............................................................................................................................................ ............................... i Certificateof Achievement ............................................................................................................................ ............................... vii OrganizationalChart ....................................................................................................................................... ............................... ix FINANCIAL SECTION Report of Independent Certified Public Accountants ................................................................................... ............................... 1 Management's Discussion and Analysis ( Unaudited) ................................................................................... ............................... 3 Basic Financial Statements: Statementof Net Assets .......................................................................................................................... .......................I....... 14 Statementof Activities ................................................................................................................................ .............................16 BalanceSheet — Governmental Funds ..................................................................................................... ............................... 18 Reconciliation of the Balance Sheet of Governmental Funds to the Statement of Net Assets ............. ............................... 19 Statement of Revenues, Expenditures and Changes in Fund Balances — Governmental Funds ............... .............................20 Reconciliation of the Statement of Revenues, Expenditures and Changes in Fund Balances of Governmental Fundsto the Statement of Activities ................................................................................................. .............................21 General Fund - Statement of Revenues, Expenditures and Changes in Fund Balances — Budget and Actual (Budgetary Basis) ............................................................................................................................ ............................... 22 Statement of Net Assets — Proprietary Funds ............................................................................................ .............................2S Statement of Revenues, Expenses and Changes in Fund Net Assets — Proprietary Funds ....................... .............................27 Statement of Cash Flows — Proprietary Funds ........................................................................................... .............................28 Statement of Fiduciary Assets and Liabilities — Agency Funds ................................................................... .............................30 Notesto the Financial Statements ............................................................................................................. .............................31 RequiredSupplementary Information ........................................................................................................... .............................74 Combining and Individual Fund Financial Statements: Nonmaior Governmental Funds CombiningBalance Sheet ................................................................................................................................ .............................80 Combining Statement of Revenues, Expenditures and Changes in Fund Balances ........................................ .............................90 Combining Schedule of Revenues, Expenditures and Changes in Fund Balances - Budget and Actual (Non- GAAP) ..............100 Nonmaior Enterprise Funds CombiningStatement of Net Assets ........................................................................................................... 124 ............................... Combining Statement of Revenues, Expenses and Changes in Fund Net Assets ....................................... ............................... CombiningStatement of Cash Flows 125 ................................................................................ ............................... ............................126 Internal Service Funds CombiningStatement of Net Assets ........................................................................................................... 128 ............................... Combining Statement of Revenues, Expenses and Changes in Fund Net Assets ....................................... ............................... CombiningStatement of Cash Flows 129 ........................................................................................................... ............................... 130 Fiduciary Funds Combining Statement of Fiduciary Assets and Liabilities ........................................................................... 132 ............................... Combining Statement of Changes in Assets and Liabilities ............................................. ............................... ............................133 Component Units CombiningStatement of Net Assets ........................................................................................................... 136 ............................... Combining Statement of Revenues, Expenditures and Changes in Net Assets .............. ............................... ............................137 COLLIER COUNTY, FLORIDA COMPREHENSIVE ANNUAL FINANCIAL REPORT YEAR ENDED SEPTEMBER 30, 2011 TABLE OF CONTENTS - CONTINUED STATISTICAL SECTION (UNAUDITED) NetAssets by Component ................................................................................................ ............................... ............................140 Changein Net Assets ................................................................................................................................... ............................... Governmental Activities Tax Revenues by Source 141 ........................................................... ............................... ............................144 FundBalances of Governmental Funds ...................................................................................................... 145 ............................... Changes in Fund Balances of Governmental Funds .................................................................................... 146 ............................... Assessed Value and Estimated Actual Value of Taxable Property .............................................................. ............................... Property Tax Rates — All Direct and Overlapping Governments 148 ................................................................. ............................... PrincipalTax Payers County- Wide 149 ............................................................................................................... ............................... 150 PropertyTax Levies and Collections ............................................................................................................ ............................... 151 Ratiosof Outstanding Debt by Type ........................................................................................................... ............................... 152 Ratios of General Bonded Debt Outstanding .............................................................................................. ............................... 153 LegalDebt Margin Information ................................................................................................................... ............................... 154 Direct and Overlapping Governmental Activities Debt ............................................................................... ............................... 154 Pledged- Revenue Coverage ......................................................................................................................... ............................... Demographicand Economic Statistics 155 ........................................................................................................ ............................... 156 PrincipalEmployers ..................................................................................................................................... ............................... 157 Full -Time Equivalent County Employees by Function ................................................................................. 158 ............................... OperatingIndicators by Function ................................................................................................................ ............................... 159 CapitalAsset Statistics by Function ............................................................................................................. ............................... 160 SINGLE AUDIT /SCHEDULE OF EXPENDITURES OF FEDERAL AWARDS AND STATE PROJECTS Report on Internal Control Over Financial Reporting and on Compliance and Other Matters Based on an Audit of the Financial Statements Performed in Accordance with Government Auditing Standards ................163 Report of Independent Certified Public Accountants on Compliance With Requirements Applicable to Each Major Federal Program and State Project and on Internal Control Over Compliance in Accordance With OMB Circular A -133, Section 215.97, Florida Statutes, and Chapter 10.550, Rules of the Auditor General ........ ............................165 Schedule of Expenditures of Federal Awards and State Projects .................................... ............................... ............................170 Notes to the Schedule of Expenditures of Federal Awards and State Projects .............. ............................... ............................176 Schedule of Findings and Questioned Costs .................................................................... ............................... ............................178 Scheduleof Prior Audit Findings ...................................................................................... ............................... ............................205 THIS PAGE INTENTIONALLY LEFT BLANK CLERK OF THE C; Dwight E. Brock COLLIER COUNTY 3299 TAMIAMI TRAIL Clerk of Courts NAPLES, FLORID March 13, 2012 To the Citizens and Members of the Board of County Commissioners, Collier County, Florida ier CUIT COURT Clerk of Courts ST, S TE #403 Accountant 4112 -5 46 { Auditor � A Y i Custodian of County Funds It is with extreme pleasure that we present to you, the citizens of Collier County and members of the Board of County Commissioners, the Comprehensive Annual Financial Report (CAFR) for the fiscal year ended September 30, 2011. Responsibility for the accuracy of the data and the completeness and fairness of the presentation, including all disclosures, rests with the Board of County Commissioners and County management. The Clerk of the Circuit Court's Finance and Accounting Department, as well as County management, is responsible for establishing and maintaining internal controls to provide reasonable, but not absolute, assurance regarding the safeguarding of assets against loss from unauthorized use or disposition, the reliability of financial records for preparing financial statements, and maintaining accountability of assets. The concept of reasonable assurance recognizes that the cost of a control should not exceed the benefits likely to be derived, and the evaluation of costs and benefits requires estimates and judgments by management. The Clerk is not capable of representing that the internal controls of the County provide reasonable assurance as his office was precluded from examining those controls for several years as a result of a dispute regarding the role of the Clerk of the Circuit Court as County Auditor. On November 10, 2010 the Florida Supreme Court dismissed the appeal of the Board of County Commissioners of Collier County v. Dwight Brock, and in doing so, reaffirmed the right of Clerk of Courts, Dwight Brock to audit all public funds used in county operations. The Florida Supreme Court upheld an earlier decision by the Florida Second District Court of Appeals issued on September 23, 2009. The Clerk reconstituted its auditing role during fiscal year 2011. Chapter 218.39 of the Florida Statutes requires an independent certified public accountant's financial audit of counties in the State. For the fiscal year ended September 30, 2011 the independent auditor, Ernst and Young LLP, issued an unqualified opinion on the financial statements. Their report is included in the Financial Section of this report. In addition to meeting the requirements set forth in State statutes, the audit was also designed to meet the requirements of the Federal 1996 Single Audit Act Amendments and the related OMB Circular A -133. The Florida Single Audit is required by Florida Statute 215.97. Information relating to the Single Audits, including the schedule of expenditures of federal awards and state projects and the independent auditors' report on compliance and internal control over compliance with requirements applicable to each major federal and state program, are included in the Federal and State Single Audit Section of this report. Phone- (239) 252 -2745 Fax- (239) 252 -2755 Website- www.colliercierk.com Email- collierclerkkcollierclerk.com Governmental accounting and auditing principles require that management provide a narrative introduction, overview and analysis to accompany the basic financial statements in the form of Management's Discussion and Analysis (MD &A). This letter of transmittal is designed to complement MD &A and the two should be read in concert. Collier County's MD &A can be found in the Financial Section immediately following the independent auditors' report. PROFILE OF THE GOVERNMENT Collier County is a Constitutional form of government and was established in 1923 under the Constitution and the laws of the State of Florida. The Board of County Commissioners is the legislative body for Collier County and is made up of five residents elected by voters. In addition to the County Commissioners, voters elect the following five constitutional officers: the Clerk of the Circuit Court, Property Appraiser, Sheriff, Supervisor of Elections and Tax Collector. The County provides its citizens with a wide range of services that include law enforcement, emergency management, fire and EMS services, animal services, library, museum and cultural services, parks and recreation operations, road maintenance and construction. Additionally, the County owns and operates a water and wastewater utility, a solid waste landfill and recycling program, and a transit system. Budgets are prepared annually. Formal budgetary integration is employed as a management control throughout the year. The Board of County Commissioners conducts budget workshops during June of each year. The Board's proposed budget is released by July 15, in accordance with Florida Statutes. The budgets of Constitutional Officers are presented to the appropriate authorizing bodies according to state statute. Public hearings are held in September to allow taxpayer input and to adopt the final budget. ECONOMIC CONDITION AND OUTLOOK Collier County, the state's largest county at 2,026 square miles, is on the southwest coast of Florida, directly west of Miami. With a 2011 population of 321,520 (a 22 percent increase over the last ten years), the County has been considered to be one of the fastest growing counties in the state over the last ten years. The County's economic base is concentrated in tourism, agriculture, fishing, ranching and forestry with a growing services economy and an emerging high technology sector. Gulf of Mexico beaches and the Everglades National Park are important attractions to this area. Taxable property market valuation for fiscal year 2011 totaled $61.4 billion, or a very high $191,080 per capita. Unemployment levels in recent years approximate, or are slightly above, the statewide average. The 2011 annual County unemployment rate stood at 11.4 %, while the statewide average is 10.6 %. Income levels are high, with a per capita personal income of $60,049. ii The County's financial operations have been managed with recurring General Fund operating surpluses contributing to historically strong cash and General Fund balance positions. This trend has been negatively impacted by property tax legislation and a general slowing of the economy. The County's millage for General Fund operations in fiscal year 2011 remained at only 35% of the statutory 10 mill limit, or $3.56 per thousand dollars of taxable value. Relevant financial policies include the appropriation of carryforward as revenue in the following year, budgeting revenues with a 5% reserve, recommended General Fund unreserved fund balance of between 10% and 15% of actual expenditures, the assessment of impact fees at such levels as allowed by law and supported by studies, and the earmarking of gas taxes for payment of debt service on the Series 2003 and 2005 Gas Tax Revenue Bonds. The Collier County Debt Policy provides for a maximum ratio of total general governmental debt service to bondable revenues from current sources of 13 %. The major focus of the Capital Improvement Plan for fiscal year 2012 will be to complete the transportation network, public service and life, health and safety related projects initiated over the past few years. Funding for road construction will be provided by remaining unspent Road Construction Fund monies and road impact fees. Water and wastewater projects will be focused on maintenance and will be funded primarily by water and wastewater user fees. LONG TERM FINANCIAL PLANNING Long term financial planning in Collier County focuses on the provisions of the Local Government Comprehensive Planning and Land Development Regulation Act. The provisions of this Act require that local government comprehensive plans include a Capital Improvement Element (CIE). The CIE is a planning document that identifies public facilities that will be required during the next five or more years. The Capital Improvement Element is the foundation of Collier County's annual Capital Improvement Program (CIP). Included in the County's current CIP for fiscal years 2012 -2016 are approximately $154 million for transportation projects and approximately $175 million for water and wastewater facilities and various replacement and rehabilitation projects. Parks and recreation projects of approximately $33 million are planned, as well as $26 million for tourist development and green space projects. Less than one percent of the fiscal year 2012 — 2016 Capital Improvement Program is funded by bond or loan proceeds. In summary, the multi -year implications of tax reform, continuing declines in property tax values, volatile state shared revenues and unpredictable construction permitting revenues have changed the priorities of Collier County. Reduction of recurring costs in ad valorem and building fees supported areas, realignment of operations for purposes of efficiency and the reduction or deferral of capital expenditure was used to offset revenue declines. The continued decrease in property taxable values was not unanticipated. New home construction has been hampered by the number of existing homes available and an increased number of foreclosures. The overall housing market remains relatively soft, however there continues to be activity in the high end real estate market. State budget issues are of further concern, competitive regional tourism coupled with sales tax volatility creates potential for unstable State revenues. iii Historically, Collier County's economy has proven to be better insulated from economic downturns than other Florida counties, or the nation. However, future years will be challenging, given the current issues in the housing market, the state budget, inflationary concerns, and revenue limitations imposed by tax reform. RELEVANT FINANCIAL POLICIES Consistent with the County's Debt Management Policy, outstanding debt is continually monitored in relation to existing conditions in the debt market. When sufficient cost savings can be realized, debt will be refinanced. Collier County took advantage of this type of savings by refunding the Series 2002 Capital Improvement Revenue Bonds with the Series 2010B Special Obligation Refunding Revenue Bonds. Collier County also prepaid the remaining outstanding balance of the Series 2008 Conservation Collier Bond during fiscal year 2011. These transactions are further described in Note 8 to the financial statements. The Finance and Accounting Department monitors the daily cash needs of the County and invests the County's portfolio in accordance with the County's written investment policy. The primary objective of the investment policy is the preservation of capital and the protection of investment principal. Authorized investments include certificates of deposit, the local Government Funds Surplus Trust Fund, U.S. treasury securities, U.S. agency securities, commercial paper and bankers' acceptances. The weighted average maturity, to first call, of the total managed portfolio was .35 years, not including overnight deposits, as of September 30, 2011. The average yield for fiscal year 2011 was .78 %, which constitutes a significant reduction from historical rates, but is consistent with current market rates for similar portfolios. Changes in the fair value of investments are recorded as part of interest income in the financial statements. AWARDS GFOA Certificate of Achievement: The Government Finance Officers Association of the United States and Canada (GFOA) awarded a Certificate of Achievement for Excellence in Financial Reporting to Collier County, Florida for its Comprehensive Annual Financial Report (CAFR) for the fiscal year ended September 30, 2010. The Certificate of Achievement is a prestigious national award, recognizing conformance with the highest standards for preparation of state and local government financial reports. In order to be awarded a Certificate of Achievement, a government unit must publish an easily readable and efficiently organized Comprehensive Annual Financial Report whose contents conform to program standards. The CAFR must satisfy both generally accepted accounting principles and applicable legal requirements. IV A Certificate of Achievement is valid for a period of one year only. Collier County has received this award for the past twenty -five years, from fiscal year 1986 to 2010. We believe our current report conforms to the Certificate of Achievement program requirements, and we are submitting it to the GFOA for consideration for an award again this year. Distinguished Budget Presentation Awards: The Government Finance Officers Association of the United States and Canada presented an award for Distinguished Presentation to Collier County for its annual budget for the fiscal year beginning October 1, 2010. In order to receive this award, a government unit must publish a budget document that meets program criteria as a policy document, as an operations guide, as a financial plan, and as a communications device. The Distinguished Budget Presentation Award is valid for a period of one year only. Collier County has received this award for the last twenty -two consecutive years. The Government Finance Officers Association of the United States and Canada presented an award for Distinguished Presentation to the Office of the Collier County Clerk of the Circuit Court for its annual budget for the fiscal year beginning October 1, 2010. In order to receive this award, a government unit must publish a budget document that meets program criteria as a policy document, as an operations guide, as a financial plan, and as a communications device. The Distinguished Budget presentation Award is valid for a period of one year only. The Clerk's Office has received this award for the last ten consecutive years. ACKNOWLEDGEMENTS The preparation and publication of this Comprehensive Annual Financial Report represents a significant effort by the Finance and Accounting Department as well as numerous County personnel who contribute to its production. In particular we would like to express our appreciation to Kelly Jones, CGFO, Edith Manuel, CPA, Precious Corrado, June Wathen, Liz Willis, Suzanne Boothby, Christine Killen, Dan Tripaldi, Ashley Pearson and Don Holder, all Accountants, along with Constance Murray, CGFO, General Operations Manager, Raymond Milum, Jr., Clerk's Fiscal Operations Manager and Nancy Fragione, Senior Financial Specialist, Jennifer Milum, Office Assistant, and all of the staff of the Finance and Accounting Department. Sincere appreciation is also expressed to Ernst and Young LLP, the Board of County Commissioners, the Constitutional Officers, the County Manager, Division Administrators and the Department Directors for their assistance throughout the year in matters pertaining to the financial affairs of the County. V We hope you find this report informative, accurate and easily readable. If you should have any questions related to this report or if additional information is desired, do not hesitate to contact Crystal K. Kinzel, Director of Finance and Accounting, at (239) 252 -6299 Re ctfully, Dwigh . Brock Clerk of the Circuit Court Chief Financial Officer Crysta Nf. i nzel Deputy Clerk Director Fi nce and Accounting rek M. Johnssen, CPA Deputy Clerk General Accounting Manager V1 Certificate of Achievement for Excellence in Financial Reporting Presented to Collier County Clerk of the Circuit Court Florida For its Comprehensive Annual Financial Report for the Fiscal Year Ended September 30, 2010 A Certificate of Achievement for Excellence in Financial Reporting is presented by the Government Finance Officers Association of the United States and Canada to government units and public employee retirement systems whose comprehensive annual financial reports (CAFRs) achieve the highest standards in government accounting and financial reporting. � ' Qf Tk:`'y�,p �&Wa STATES' 4 u3 = AhO CAWA 4 coR"NORAT,ah a President A - *4�w 4 - AWz--V Executive Director Certificate of Achievement for Excellence in Financial Reporting The Government Finance Officers Association of the United States and Canada (GFOA) awarded a Certificate of Achievement for Excellence in Financial Reporting to Collier County, Florida for its comprehensive annual financial report for the fiscal year ended September 30, 2010. This was the twenty -fifth consecutive year that the government has achieved this prestigious award. In order to be awarded a Certificate of Achievement, a government must publish an easily readable and efficiently organized comprehensive annual financial report. This report must satisfy both generally accepted accounting principles and applicable legal requirements. A Certificate of Achievement is valid for a period of one year only. We believe that our current comprehensive annual financial report continues to meet the Certificate of Achievement Program's requirements and we are submitting it to the GFOA to determine its eligibility for another certificate. Y m 3 � 3 N O u 2 w � ` N O C o D L I 6 Z O p d T N b "E6 N O ¢ d 6 `o C 1` N ~ O E m V Q N N Z H H d u � L � � 6 2 6 v E m 3 ry EQrry aN C LL C 'AO G C L � L c a c a E A Z V c o 0 N m O � m u 2 a d N N v N d U N a` c d d _ V C � V C II 0 0 c c « n a O o au3c3`d C « v o v a 0 m 2 d c d d d N Z ro m O vd A « C C — y O U O m '° C d O d _ � E m o u v may" o E o m W D d ? gn °ts ° od V c ° m 6 O O d c o a q r C C A C C C O W a q n c c C o q w CH V v O > n r' c o a u E C p C E v '« u ° E aci Av,°o'ou`E m m V o i v c E io a v� E `o W LL K C V a o E o ry mam 12 OE a N �L N x O I m d I d d a' "0 A N 3 W ifOj m m V t0 my N N p N OW C T X m W � d O L ° FwE c c n YO a o z E m o fj m= c 9 E o E D m m e v° 0 v� o 0 0 1 LL � O d o D C O L vdi c LL H O � 6 o u m a D n m _ Y o 0 y m N cG C d V o d c � c° C m mein d i s 01 E N E a O O p v L O W T a $ ] C N Q o H � N A ¢ N Y T d � C C d O L l _d I u O T o c a¢i M V a o0o d � N X N � o 0 c FE x E o o .o O p d T N b "E6 N O ¢ d 6 `o C 1` N ~ O E m V Q N N Z H H d u � L � � 6 2 6 v E m 3 ry EQrry aN C LL C 'AO G C L � L c a c a E A Z V c o 0 N m O � m u 2 a d N N v N d U N a` c d d _ V C � V C II 0 0 c c « n a O o au3c3`d C « v o v a 0 m 2 d c d d d N Z ro m O vd A « C C — y O U O m '° C d O d _ � E m o u v may" o E o m W D d ? gn °ts ° od V c ° m 6 O O d c o a q r C C A C C C O W a q n c c C o q w CH V v O > n r' c o a u E C p C E v '« u ° E aci Av,°o'ou`E m m V o i v c E io a v� E `o W LL K C THIS PAGE INTENTIONALLY LEFT BLANK FINANCIAL SECTION THIS PAGE INTENTIONALLY LEFT BLANK r !� FRNST &Y Ernst & Young LLP (I I I I I I I DUNG Suite 500 1 I I I 5100 Town Center Circle I Boca Raton, FL 33486 Tel: +1 561 55 8000 Fax: +1 561 558200 www.ey.com Report of Independent Certified Public Accountants Distinguished Members of the Board of County Commissioners Collier County, Florida: We have audited the accompanying financial statements of the governmental activities, the business -type activities, the aggregate discretely presented component units, each major fund, and the aggregate remaining fund information of Collier County, Florida (the County), as of and for the year ended September 30, 2011, which collectively comprise the County's basic financial statements as listed in the table of contents. These financial statements are the responsibility of the County's management. Our responsibility is to express opinions on these financial statements based on our audit. We conducted our audit in accordance with auditing standards generally accepted in the United States and the standards applicable to financial audits contained in Government Auditing Standards, issued by the Comptroller General of the United States. Those standards require that we plan and perform the audit to obtain reasonable assurance about whether the financial statements are free of material misstatement. We were not engaged to perform an audit of the County's internal control over financial reporting. Our audit included consideration of internal control over financial reporting as a basis for designing audit procedures that are appropriate in the circumstances, but not for the purpose of expressing an opinion on the effectiveness of the County's internal control over financial reporting. Accordingly, we express no such opinion. An audit also includes examining, on a test basis, evidence supporting the amounts and disclosures in the financial statements, assessing the accounting principles used and significant estimates made by management, and evaluating the overall financial statement presentation. We believe that our audit provides a reasonable basis for our opinions. In our opinion, the financial statements referred to above present fairly, in all material respects, the respective financial position of the governmental activities, the business -type activities, the aggregate discretely presented component units, each major fund, and the aggregate remaining fund information of the County as of September 30, 2011, and the respective changes in financial position and, where applicable, cash flows thereof, and the respective budgetary comparison information for the general fund for the year then ended in conformity with US generally accepted accounting principles. 1202- 1333029 A member firm of Ernst 9 Young Global Limited JERNST &YOUNG ����lllllllllllouun�� _� In accordance with Government Auditing Standards, we have also issued our report dated February 29, 2012 on our consideration of the County's internal control over financial reporting and on our tests of its compliance with certain provisions of laws, regulations, contracts, and grant agreements and other matters. The purpose of that report is to describe the scope of our testing of internal control over financial reporting and compliance and the results of that testing, and not to provide an opinion on the internal control over financial reporting or on compliance. That report is an integral part of an audit performed in accordance with Government Auditing Standards and should be considered in assessing the results of our audit. The Management's Discussion and Analysis on pages 3 through 13 and schedule of funding progress for the retiree health plan on page 74 are not a required part of the basic financial statements but are supplementary information required by the Governmental Accounting Standards Board. We have applied certain limited procedures, which consisted principally of inquiries of management regarding the methods of measurement and presentation of the required supplementary information. However, we did not audit the information and express no opinion on it. Our audit was conducted for the purpose of forming opinions on the financial statements that collectively comprise the County's basic financial statements. The introductory section, combining and individual nonmajor fund financial statements, and statistical section are presented for purposes of additional analysis and are not a required part of the basic financial statements. The accompanying schedule of expenditures of federal awards and state projects is presented for purposes of additional analysis as required by the U.S. Office of Management and Budget Circular A -133, Section 215.97, Florida Statutes and Chapter 10.550, Rules of the Auditor General, and is not a required part of the basic financial statements. The combining and individual nonmajor fund financial statements and the schedule of expenditures of federal awards and state projects have been subjected to the auditing procedures applied in the audit of the basic financial statements and, in our opinion, are fairly stated in all material respects in relation to the basic financial statements taken as a whole. The introductory section and statistical section have not been subjected to the auditing procedures applied in the audit of the basic financial statements and, accordingly, we express no opinion on them. f UP February 29, 2012 1202 - 1333029 2 A member firm of Ernst & Young Global Limited MANAGEMENT'S DISCUSSION AND ANALYSIS (UNAUDITED) As Clerk of the Circuit Court and chief financial officer of Collier County, Florida, 1 present the readers of the County's financial statements this narrative overview and analysis of the financial activities of Collier County for the fiscal year ended September 30, 2011. Readers are encouraged to consider the information presented in this narrative in conjunction with additional information offered in the letter of transmittal, found on pages i -vi of this report. Financial Highlights ■ Collier County's assets exceeded its liabilities as of September 30, 2011 by $2,432,895,780. Of this amount, $325,019,266 represents unrestricted net assets and may be used to meet future obligations. ■ The County's total net assets decreased by $1,649,453 when compared to fiscal year 2010, with an $18,356,829 decrease from governmental activities offset by a $16,707,376 increase resulting from business -type activities. ■ As of September 30, 2011 Collier County's governmental fund financial statements showed combined ending fund balances of $384,666,827, a decrease of $25,549,600 over the previous fiscal year. Of the total combined ending fund balance, $14,200,963 remains in the various governmental funds of Collier County as unassigned. Negative unassigned balances in various capital project funds offset the General Fund's unassigned fund balance. ■ The General Fund reported an unassigned fund balance of $54,458,662 at September 30, 2011, a decrease in unassigned General Fund balance of $5,246,578 when compared to September 30, 2010. ■ Total face value of bonded debt, notes and outstanding loans owed by Collier County decreased by $48,863,595 during fiscal year 2011, with a decrease in governmental activities debt of $36,902,855 and a decrease in the net business -type activities debt of $11,960,740. In November of 2010 the outstanding Series 2002 Capital Improvement Revenue Bonds were refinanced by the Series 20108 Special Obligation Revenue Bonds. The Series 2008 Conservation Collier Bonds were prepaid in April of 2011. Overview of the Financial Statements This discussion and analysis is intended to serve as an introduction and explanation of Collier County's basic financial statements. Collier County's basic financial statements include government wide and fund financial statements, as well as notes to the basic financial statements. There is additional supplementary information following these financial statements that may be of interest to the reader. Government Wide Financial Statements Government wide financial statements are designed to provide the reader an overview of the financial position of the County and are similar to private sector financial statements. These statements are comprised of a Statement of Net Assets and a Statement of Activities and are found on pages 14 to 17 of this report. 3 The Statement of Net Assets shows the financial position of Collier County as of September 30, 2011. The statement shows the County's assets less its liabilities, with the difference being reported as net assets. Changes in net assets are useful indicators of financial condition. The Statement of Activities follows the statement of net assets and reports the changes in net assets over the fiscal period. All changes in net assets are reported as soon as the underlying events that gave rise to the change occur, regardless of the timing of the related cash flows. Thus, revenues and expenses are reported for some items, such as accounts receivable, notes receivable or accrued unused vacation and sick leave, that will manifest themselves in cash inflows and outflows, respectively, in future fiscal periods. These statements distinguish Collier County functions that are supported by taxes and intergovernmental revenues (governmental activities), from business -type activities, which are intended to have their costs primarily recovered through user fees and charges. Governmental activities reported in the financial statements are general government, public safety, physical environment, transportation, economic environment, human services and culture and recreation. Business -type activities in Collier County include water and sewer, solid waste collections, airport operations, transit operations and emergency medical services. Fund Financial Statements A fund is a group of related accounts used to maintain control over resources that have been segregated to meet specific objectives. As dictated by generally accepted accounting principles, Collier County uses fund accounting to ensure and demonstrate compliance with financial legal requirements. The funds of the County can be divided into the following three categories: governmental, proprietary and fiduciary. Governmental funds Governmental funds, presented on pages 18 to 24, account for substantially the same functions as governmental activities reported under the government wide Statement of Net Assets and Statement of Activities. The difference is that the governmental fund financial statements focus on inflows and outflows of expendable resources, as well as balances of expendable resources available at the end of the fiscal year, on a near term basis. As such, these statements present a narrower view of financial condition, but are nonetheless useful in evaluating Collier County's near term financing requirements and available resources. Comparison between the two sets of financial statements allows the reader to better assess the future impact of the government's near term financial decisions. Both the governmental fund balance sheet and the statement of revenues, expenditures and changes in fund balances provide a reconciliation to the respective government wide financial statements to facilitate comparison. Governmental funds presented individually in Collier County's statements include two major funds, the General Fund and the Government Facilities Impact Fee Fund. While there are many smaller governmental funds under Collier County management, they are aggregated in a total column named "other governmental funds ". Combining statements for these other governmental funds have been presented elsewhere in this report. 4 Proprietary funds Collier County maintains two different types of proprietary funds, enterprise and internal service, which are reflected on pages 25 to 29 of this report. Enterprise funds report, with more detail, the same functions presented as business -type activities in the government wide financial statements for water and sewer, Goodland water, solid waste disposal, emergency medical services, transit and the airport authority. The Collier County Water and Sewer District Fund and the Solid Waste Disposal Fund are presented individually as major funds. Internal service funds are maintained to allocate and accumulate costs internally for Collier County. The County uses internal service funds to account for health insurance, worker's compensation insurance, property and casualty insurance, fleet operations and information technology. The internal service funds are presented in total in the proprietary fund financial statements, but may be viewed on a combining basis elsewhere in the report. Fiduciary funds Fiduciary funds are used to account for resources held for the benefit of parties outside of Collier County government. These funds are not presented in the government wide financial statements as they do not represent resources available to support Collier County functions. The fiduciary funds are presented on page 30 of this report. All of the County's fiduciary funds are agency funds. The accounting used for agency funds is based on the concept that assets equal liabilities when the government is acting in a fiduciary capacity. Notes to the Financial Statements The notes provide additional information essential to a full understanding of the data provided in both the government wide and fund financial statements. The notes appear on pages 32 to 72 of this report. Other Information The combining and individual nonmajor fund financial statements and schedules mentioned above present more detailed views of nonmajor governmental and enterprise funds and begin on page 80. This section contains combining balance sheets and statements of revenues, expenditures and changes in fund balance for governmental funds, including budgetary comparisons, and combining statements of net assets and statements of revenues, expenses and changes in fund net assets for enterprise funds. Also included are combining financial statements for internal service and agency funds. Additional information about the County, which may be of interest to the reader, can be found under the Statistical and Single Audit sections of this report. The statistical section has been prepared in accordance with Governmental Accounting Standards Board Statement No. 44, Economic Condition Reporting: The Statistical Section. This section contains data regarding financial trends, revenue capacity, debt capacity, demographic and economic conditions and operating indicators of the County. The Single Audit grants compliance section lists the expenditures of Federal Awards and State Financial Assistance during the fiscal year and presents grant compliance information as well as auditor reports. 5 Government Wide Financial Analysis As noted earlier, net assets may serve over time as a useful indicator of a government's financial position. Assets exceeded liabilities by $2,432,895,780 as of the fiscal year ending September 30, 2011 for Collier County. Positive balances were reported in all categories of net assets in the governmental and business -type activities for fiscal year 2011, as well as fiscal year 2010. Collier County's net assets at September 30, 2011 decreased $34,405,775 for unrestricted net assets and increased $21,612,764 for restricted net assets. Restricted net assets are resources subject to external restriction on how they may be used while unrestricted net assets may be used to meet the County's ongoing obligations. Collier County's investment in capital assets such as land, roads, buildings, parks and machinery and equipment, net of depreciation or any outstanding debt related to the asset, amounts to 74.6% of net assets as of September 30, 2011, compared to 74.1% as of September 30, 2010. The County's investment in capital assets, net of depreciation and related debt, increased by $11,143,558, when compared to fiscal year 2010. Capital assets are used to provide services to the citizens and consequently do not represent spendable resources and cannot be used to liquidate the debt incurred to purchase or construct the capital assets. Following are Collier County's net assets and changes in net assets for the fiscal years ended September 30, 2010 and 2011, shown in condensed form: Collier County's Schedule of Net Assets (in millions) Governmental Business -type Acti vi ti es Activities 2011 2010 2011 2010 Total Percentage Total Change 2011 2010 2010 -2011 Current and other assets $ 477.2 $ 513.4 $ 235.6 $ 226.4 $ 712.8 $ 739.8 r (3.6 %) Capital assets, net 1,619.8 1,651.3 887.7 891.6 2,507.5 2,542.9 (1.4 %) Total assets 2,097.0 2,164.7 1,123.3 1,118.0 3,220.3 3,282.7 (1.9 %) Long -term liabilities 436.6 471.7 233.9 246.5 670.5 718.2 (6.6 %) Current liabilities 87.2 101.4 29.7 28.5 116.9 129.9 (10.0 %) Total liabilities 523.8 573.1 263.6 275.0 787.4 848.1 (7.2 %) Net assets: Invested in capital assets, net of related debt 1,172.1 1,169.1 643.8 635.7 1,815.9 1,804.8 0.6% Restricted 254.0 232.6 37.9 37.8 291.9 270.4 8.0% Unrestricted 147.1 189.9 178.0 169.5 325.1 359.4 (9.5 %) Total net assets $1,573.2 $1,591.6 $ 859.7 $ 843.0 $2,432.9 $2,434.6 (0.1 %) 6 Collier County's Schedule of Changes in Net Assets (in millions) Total Governmental Business -type Percentage Activities Activities Total Change 2011 2010 2011 2010 2011 2010 2010 -2011 Revenues Program revenues: Charges for services $ 61.6 $ 56.3 $152.9 $149.0 $ 214.5 $ 205.3 4.5% Operati ng gra nts and contributions 19.5 31.9 4.4 4.4 23.9 36.3 r (34.2 %) Capital grants and contributions 19.4 25.8 14.3 10.4 33.7 36.2 r (6.9 %) General revenues: 81.4 76.6 - - 81.4 76.6 6.3% Property taxes 261.6 299.4 - - 261.6 299.4 F (12.6 %) Other taxes and shared revenues 78.9 76.1 - - 78.9 76.1 3.7% Interest income 3.9 4.7 1.6 1.6 5.5 6.3 F (12.7 %) Miscellaneous 11.5 8.0 0.1 0.1 11.6 8.1 43.2% Total revenues 456.4 502.2 173.3 165.5 629.7 667.7 F (5.6 %) Expenses General government 103.0 100.5 - - 103.0 100.5 2.5% Public safety 173.3 179.2 - - 173.3 179.2 F (3.3 %) Physical environment 18.3 16.8 - - 18.3 16.8 8.9% Transportation 81.4 76.6 - - 81.4 76.6 6.3% Economic environment 7.8 11.1 - - 7.8 11.1 F (29.7 %) Human services 13.9 13.0 - - 13.9 13.0 6.9% Culture and recreation 44.2 46.9 - - 44.2 46.9 F (5.8 %) Interest on long -term debt 19.8 19.5 - - 19.8 19.5 1.5% Water and sewer - - 104.3 103.3 104.3 103.3 1.0% Solid waste - - 28.0 27.4 28.0 27.4 2.2% Airport authority - - 4.5 4.4 4.5 4.4 2.3% Emergency medical services - - 22.7 23.1 22.7 23.1 F (1.7 %) Mass transit - - 10.2 9.6 10.2 9.6 6.3% Total expenses 461.7 463.6 169.7 167.8 631.4 631.4 0.0% Increase (decrease) in net assets before net transfers (5.3) 38.6 3.6 (2.3) (1.7) 36.3 (104.7 %) Transfers, net (13.1) (11.3) 13.1 11.3 - - - Change in net assets (18.4) 27.3 16.7 9.0 (1.7) 36.3 (104.7 %) Netassets - beginning 1,591.6 1,564.3 843.0 834.0 2,434.6 2,398.3 1.5% Netassets - ending $1,573.2 $1,591.6 $859.7 $843.0 $2,432.9 $2,434.6 (0.1 %) 7 Governmental Activities The current year decrease in the net assets of governmental activities amounted to $18,356,829, a decrease of 1.2% when compared to the previous year's net assets. The previous fiscal years' increase was 1.8% and this declining rate of growth is the result of a continued decline in overall governmental activities revenues. ■ Overall, revenues related to governmental activities decreased by 9.2 %, or $45,665,566. ■ Total ad valorem taxes collected in fiscal year 2011 were down $37,758,545, or 12.6 %, when compared to fiscal year 2010. The decrease in collections is primarily due to an 11.6% average reduction in countywide taxable property values. ■ Fiscal year 2010 included non - recurring operating grant revenues from a Federal Emergency Management Grant reimbursement. ■ Capital grants and contributions have declined as impact fee indexing has decreased amounts collected for governmental impact fees. ■ In total, expenses in governmental activities decreased by .4%, or $1,938,389. ■ Decreases in expenses occurred in several areas of governmental activity in fiscal year 2011, with the largest dollar value decrease in public safety, followed closely by economic environment and culture and recreation. Decreased personnel costs were a major component of the current year savings. Business -type Activities Increases in net assets related to business -type activities amounted to $16,707,376 in the aggregate, representing a 2.0% increase over the previous year's net assets. ■ The majority of the increase, or $11,170,454, can be attributed to the Collier County Water and Sewer District. Total operating revenues, including water, wastewater and reuse irrigation user fees increased $4,793,019, or 4.8 %, over the previous fiscal year primarily due to increased usage of water, effluent and irrigation water. ■ Fiscal year 2011 water and wastewater impact fee collections were $7,415,367, an increase of 2.2% over fiscal 2010. County Water and Sewer District charges water and wastewater impact fees on new construction in order to finance growth necessitated capital expansion. ■ Operating expenses increased as the Water and Sewer District's focus has shifted from capital expansion to comprehensive maintenance and optimization of existing facilities. Fiscal year 2011 personnel services expenses increased by 2.4 %, when compared to fiscal year 2010. ■ Solid waste operating revenues increased by .6% from fiscal year 2010 while operating costs, including depreciation, increased by 2.3% over the same period. The marginal increase in solid waste operating revenues can be mainly attributed to a new source of revenue from converting landfill gas to energy. Operating costs increased primarily due to maintenance costs associated with the Collier County Landfill. These factors contributed to an increase in solid waste net assets year on year of $3,626,124. 8 Fund Financial Statement Analysis As mentioned above, Collier County utilizes fund accounting to ensure compliance with finance related legal requirements. Governmental Funds Governmental funds provide information on near term inflows, outflows and balances of spendable resources. Unassigned fund balance is a useful measure of net resources available to be spent at the end of the fiscal year. Governmental funds consist of the General Fund, Special Revenue Funds, Debt Service Funds and Capital Project Funds. As of September 30, 2011 Collier County governmental funds reported combined fund balances of $384,666,827 a decrease of $25,549,600 when compared to prior year combined fund balances. The governmental funds had non - spendable fund balances of $11,805,199 consisting of inventory, prepaid items and General Fund advances to other funds. The restricted fund balance was $229,545,519 and consists of monies whose expenditure is externally constrained by grantors, creditors, binding law or enabling legislation. Of the remaining $143,316,109 in fund balance, $48,445,097 is classified as committed, $80,670,049 is recorded as assigned and $14,200,963 is recorded as unassigned. The following were noteworthy activities and changes relating to the major governmental funds for fiscal year 2011: The General Fund is the primary operating fund of Collier County. At September 30, 2011, total fund balance in the general fund was $67,377,977, of which $54,458,662 was unassigned. As a percentage of total general fund expenditures and net transfers, the unassigned portion is 19.8%. The total fund balance decreased by $3,968,634 or 5.6%, compared to the September 30, 2010 total fund balance. The decrease in total fund balance as a result of decreased property tax collections. The Government Facilities Impact Fee Fund accounts for the receipt and expenditure of government facilities impact fees collected from qualifying new construction. The impact fees must be used for the acquisition or construction of government facilities. During fiscal year 2011 the Government Facilities Impact Fee Fund spent $71,561 on the Property Appraiser's Radio Road location, $159,242 on the Courthouse Annex, $109,749 on the Emergency Services Complex and $62,910 on other government facilities. In addition, the fund made debt service related transfers of $4,176,797, impact refunds of $154,099 and paid $27,926 of interest on an interfund advance from the Solid Waste Disposal Fund. Proprietary funds Proprietary fund statements provide the same information as the business -type activities in the government wide financial statements, but in greater detail, and on a fund basis for enterprise funds. At September 30, 2011, total net assets amounted to $859,718,123 for enterprise funds, as compared to $843,010,747 as of September 30, 2010, an increase of $16.7 million. Net assets change as a result of operations, non - operating revenues and expenses, capital contributions and grants and donations. The Collier County Water and Sewer District's activities represent the majority of the increase in the business -type net assets. 9 For the year ended September 30, 2011 the Water and Sewer District reported capital grants and contributions of $9,873,756, which includes system development fees of $7,415,367, $2,011,385 in developer infrastructure contributions and other contributions of $447,004. Net Operating Income &gol 2011 2010 County Water and Sewer $ 11,200,354 $ 16,396,126 Solid Waste Disposal 5,834,741 6,264,619 Non -major enterprise funds (23,765,216) (21,584,975) Total $ (6,730,121) $ 1,075,770 The Collier County Water and Sewer Fund net operating income decreased by $5,195,772, when compared to fiscal year 2010. The decrease in net operating income was the result of an overall increase in operating costs, including depreciation and amortization, of 11.9 %. The primary reason for this increase is the ongoing focus on the maintenance of existing utilities infrastructure. County Water and Sewer payments in lieu of taxes paid to the General Fund of $3,778,100 were reclassified from operating expense to operating transfers for financial statement purposes. Personal services expense increased by 2.4 %, when compared to fiscal year 2010, as employer paid health insurance increased by 14.1 %. Capital Assets Collier County's financial statements present capital assets in two distinct groups, those that are depreciated and those not subject to depreciation. Buildings and equipment are examples of assets that are depreciated and land and construction in progress are examples of assets not depreciated. Collier County's investment in capital assets for the governmental and business -type activities amounted to $2,507,516,295, net of accumulated depreciation. This investment in capital assets, both purchased and donated, includes land, buildings and improvements, water and wastewater plants, machinery and equipment, parks, roads, beach renourishment and drainage structures. Investment in capital assets for the current fiscal year, net of depreciation, decreased by $35,344,985 when compared to the previous year. There was a decrease in the governmental activities net capital assets of $31,389,214, or 1.9 %. The proprietary fund capital assets decreased by $3,955,771, or .5% as in both the governmental and business -type activities, amounts depreciated exceeded amounts capitalized. The major factors behind these changes are as follows: • The business -type activities capitalized $26,681,874 of work in process during fiscal year 2011 including $6,925,197 for North County Water Reclamation Facility Upgrades, $3,815,051 for the Marco Airport Taxiway, $3,631,693 for South Reverse Osmosis Wellfield construction, $2,034,893 for North County Regional Water Treatment Plant Water Quality Improvements and $1,724,337 for the North Naples Recycling Center. The remaining $8,550,703 related to $6,808,413 in other County Water and Sewer projects, $1,155,947 in other Airport projects, $373,954 in other Solid Waste projects and $212,389 in Mass Transit. ■ Capitalization of construction in progress of $22,459,395 for governmental activity related costs including $12,210,474 for Oil Well Road construction, $2,184,025 for Lely Area stormwater improvements and $1,591,409 for Gateway Triangle stormwater improvements. The remaining 10 $6,473,487 related to $3,157,021 in other transportation projects, $2,082,072 in parks and recreation projects, and $1,234,394 in other capital projects. ■ Purchases of land and non - depreciable assets were $4,764,182 for fiscal year 2011, compared to $7,858,168 for fiscal year 2010. Additional information regarding Collier County's capital assets can be found in Note 5 beginning on page 48 of this report. Debt Administration At September 30, 2011, Collier County had total bonded debt, notes and loans, net of premiums, discounts and deferred losses of $690,962,471, a decrease of $49,462,555 from the previous year. The following table illustrates the balances of all outstanding long -term debt for the fiscal years ended September 30, 2011 and 2010: Outstanding Debt Limited General Obligation Bonds, net Revenue Bonds, net State Revolving Fund Loans Miscellaneous Notes Total 2011 $ 14,683,976 559, 847, 386 105,775,919 2010 $ 29,854,422 584, 371, 983 114,640,946 10, 655,190 11, 557, 675 $690,962,471 $ 740,425,026 During fiscal year 2011 Collier County prepaid all of the outstanding Conservation Collier Series 2008 Limited General Obligation Bonds in the amount of $6,919,328, plus a 3% premium. On November 30, 2010 Collier County issued the Series 2010B Special Obligation Refunding Revenue Bonds in the par amount of $24,620,000. These bonds were issued for the purpose of advance refunding all of the County's outstanding Capital Improvement Revenue Bonds, Series 2002. The refinancing of the Series 2002 Bonds, and their attendant restrictive covenants, caused the required cash reserve surety replacement relating to the Series 2002, 2003 and 2005 bonds to decrease from $19,570,777 to $15,717,300, or a $3,853,477 release of internally borrowed funds. On January 9, 2012 Collier County issued the Series 2011 Special Obligation Refunding Revenue Bonds in the par amount of $92,295,000. These bonds were issued for the purpose of advance refunding portions of the County's outstanding Capital Improvement Revenue Refunding Bonds, Series 2003 and 2005. The refinancing of the Series 2003 and 2005 Bonds, and their attendant restrictive covenants, caused the required cash reserve surety replacement relating to the 2003 and 2005 bonds to further decrease from $15,717,300 to $10,401,506, or a $5,315,794 release of internally borrowed funds. The Constitution of the State of Florida, Florida Statute 200.181 and Collier County set no legal debt limit. Further information regarding Collier County's long -term debt can be found in Note 6 beginning on page 49 of this report. 11 General Fund Budgetary Highlights During the current fiscal year, the Board of County Commissioners approved a $3,642,735 increase in appropriations between the original and the final amended budget. Significant budgetary variances between the final amended budget and actual results are listed below: ■ $1,464,686 increase in Natural Resources due to re- budgeting of lapsed appropriations from the previous fiscal year. ■ $1,478,000 increase in the Sheriffs agency related to special detail duties. ■ $792,925 decrease in the Tax Collector's agency to reduce budget to actual expenditures. ■ $460,400 increase in the Clerk's agency for internal audit and data processing equipment. ■ $400,250 increase in Transfers Out to other funds for flood plain analysis. ■ $392,203 increase in Other General Administration due to re- budgeting of lapsed appropriations from the previous fiscal year. ■ $267,500 decrease in Beach /Water Park Operations personal services to revised revenue forecasts. Significant variances between actual results and final budget amounts in the General Fund occurred during fiscal year 2011. Tax revenues were under budget by $10,075,220 primarily due to the early payment discount allowed for property taxes. The discount ranges from a maximum 4% to 1 %, depending on the date of payment. General Fund general government expenditures were under budget primarily due to $1,019,469 in unspent budget related goods and services contracted for in 2011 that had not been received as of September 30, 2011 as well as an effort to reduce spending in all departments. Sheriff's public safety expenditures were a combined $1,875,990 less than anticipated for fiscal year 2011. Economic Factors and Year 2012 Budgets and Rates The following factors were taken into account in preparing the fiscal year 2012 budget: • A 5.1% average reduction in countywide taxable property values. • Forecast ad valorem collections at 95.6% of budget. • Expected increases in sales tax and state shared revenues of 6.3% and 5.0 %, respectively. • No new or expanded programs and initiatives; all existing programs to be funded at 97% of the prior year's level. • Continuation of Board Agency hiring freeze within ad valorem funded operations and exception replacement hiring within enterprise operations. • Maintain health care program contributions at 80% employer and 20% employee across all agencies (Non- Sheriff). During fiscal year 2011, the General Fund unassigned fund balance decreased by $5,246,578 to $54,458,662. As of January 24, 2012, $48,297,400 of the fiscal year 2011 unassigned fund balance has been appropriated as carryforward for fiscal year 2012, with $17,538,716 placed in reserves. 12 Contact Information This financial report is intended to give the user a general overview of Collier County Government's finances. Any questions resulting from review of this information may be addressed to: Collier County Clerk of the Circuit Court Department of Finance and Accounting 3299 Tamiami Trail East, Suite #403 Naples, Florida 34112 -5746 Our office may also be contacted via the internet at www.colliercierk.com. 13 COLLIER COUNTY, FLORIDA STATEMENT OF NET ASSETS SEPTEMBER 30, 2011 ASSETS Current assets: Cash, cash equivalents and investments Trade receivables, net Special assessments receivable Interest receivable Unbilled receivables Due from other governments Internal balances Deposits Inventory for resale Inventory Prepaid costs Restricted assets: Cash, cash equivalents and investments Trade receivables, net Notes receivable Special assessments receivable Interest receivable Due from other governments Inventory for resale Total current assets Noncurrent assets: Restricted assets: Cash, cash equivalents and investments Notes receivable Special assessments receivable Notes receivable Deferred charges Capital assets: Land and non - depreciable capital assets Depreciable capital assets, net Total noncurrent assets Total assets 470,352,899 89,683,274 560,036,173 - 1,149,489,630 797,990,492 1,947,480,122 - 1,852,558,136 927,110,392 2,779,668,528 - 2,097,012,366 1,123,332,534 3,220,344,900 309,627 The notes to the financial statements are an integral part of this statement. 14 Primary Government Governmental Business -type Component Activities Activities Total Units $ 217,306,687 $ 149,152,275 $ 366,458,962 $ 309,627 1,410,078 9,092,882 10,502,960 - - 69,200 69,200 - 207,590 312,451 520,041 - - 5,379,173 5,379,173 - 3,585,399 98,130 3,683,529 - (20,180,857) 20,180,857 - - 429,181 - 429,181 - 268,891 - 268,891 - 230,724 3,928,564 4,159,288 - 70,405 18,957 89,362 - 12,600,153 3,218,735 15,818,888 - 1,708,123 - 1,708,123 - 1,256,690 1,256,690 - 99,571 99,571 - 252,306 - 252,306 - 7,160,889 4,770,918 11,931,807 - 18,048,400 18,048,400 244,454,230 196,222,142 440,676,372 309,627 216,470,427 37,340,089 253,810,516 - 9,442,993 - 9,442,993 - 34,503 35,680 70,183 - 1,719,607 828,945 2,548,552 - 5,048,077 1,231,912 6,279,989 - 470,352,899 89,683,274 560,036,173 - 1,149,489,630 797,990,492 1,947,480,122 - 1,852,558,136 927,110,392 2,779,668,528 - 2,097,012,366 1,123,332,534 3,220,344,900 309,627 The notes to the financial statements are an integral part of this statement. 14 15 Primary Government Governmental Business -type Component Activities Activities Total Units LIABILITIES Current liabilities: Accounts payable $ 13,763,008 $ 9,945,294 $ 23,708,302 $ - Wages payable 4,290,852 654,120 4,944,972 - Retainage payable 215,537 904,392 1,119,929 - Due to other governments 3,958,710 57,105 4,015,815 - Due to individuals 311,918 403,219 715,137 - Self- insurance claims payable 5,714,175 - 5,714,175 - Compensated absences 11,122,459 1,778,047 12,900,506 - Capital lease obligations 93,005 212,246 305,251 - Unearned revenue 268,931 - 268,931 - Interest payable 7,856,393 2,471,770 10,328,163 - Bonds and loans payable 27,083,449 9,787,165 36,870,614 - Liabilities payable from restricted assets: Accounts payable 6,472,525 76,631 6,549,156 - Wages payable 110,095 - 110,095 - Retainage payable 1,317,943 356,620 1,674,563 - Refundable deposits 1,002,515 232,082 1,234,597 - Notes payable - 69,190 69,190 - Due to other governments 1,260 - 1,260 - Due to individuals 1,656 - 1,656 - Unearned revenue 3,694,159 252,334 3,946,493 - Bonds and loans payable - 2,500,866 2,500,866 - Total current liabilities 87,278,590 29,701,081 116,979,671 - Noncurrent liabilities: Self- insurance claims payable 1,928,324 - 1,928,324 - Compensated absences 12,504,006 762,021 13,266,027 - Capital lease obligations 176,054 174,565 350,619 - Landfill post - closure liability - 1,823,934 1,823,934 - Net OPEB obligation 1,578,744 - 1,578,744 - Bonds and loans payable, net 420,368,991 231,152,810 651,521,801 - Total noncurrent liabilities 436,556,119 233,913,330 670,469,449 - Total liabilities 523,834,709 263,614,411 787,449,120 - NET ASSETS Invested in capital assets, net of related debt 1,172,121,030 643,776,924 1,815,897,954 - Restricted for: Growth related capital expansion 89,702,510 24,057,684 113,760,194 - Transportation capital projects 52,248,847 - 52,248,847 - Tourist development 39,262,323 39,262,323 - Conservation Collier 20,884,680 20,884,680 - Community redevelopment 16,095,025 16,095,025 - Grants 13,419,575 13,419,575 - Debt service 5,529,286 13,644,754 19,174,040 - Other 16,833,876 - 16,833,876 - Renewal and replacement - 300,000 300,000 - Unrestricted 147,080,505 177,938,761 325,019,266 309,627 Total net assets $1,573,177,657 $ 859,718,123 $ 2,432,895,780 $ 309,627 15 COLLIER COUNTY, FLORIDA STATEMENT OF ACTIVITIES FOR THE FISCAL YEAR ENDED SEPTEMBER 30, 2011 Business -type Activities: Program Revenues 107,089 Water and Sewer Fees, Fines and Operating Capital 9,637,765 Solid Waste Charges for Grants and Grants and FUNCTIONS /PROGRAMS Expenses Services Contributions Contributions Primary Government: Mass Transit 10,186,913 1,290,335 4,322,765 Governmental Activities: Emergency Medical Services 22,657,178 8,979,435 35,026 General government $ 103,044,550 $ 33,919,227 $ 2,280,592 $ 3,333,551 Public safety 173,286,139 15,553,313 4,803,976 1,040,044 Physical environment 18,344,396 1,125,113 861,815 1,804,427 Transportation 81,383,489 715,011 4,102,137 9,754,735 Economic environment 7,786,770 662,032 4,123,288 - Human services 13,859,403 508,615 3,039,850 - Culture and recreation 44,205,089 9,093,424 291,361 3,414,359 Interest and fiscal charges 19,796,828 - - Total governmental activities 461,706,664 61,576,735 19,503,019 19,347,116 Business -type Activities: Industrial Development Authority $ 107,089 Water and Sewer 104,332,449 105,858,391 20,072 9,637,765 Solid Waste 27,999,926 33,769,040 - 1,650 Airport Authority 4,458,059 2,938,147 - 4,432,549 Mass Transit 10,186,913 1,290,335 4,322,765 234,616 Emergency Medical Services 22,657,178 8,979,435 35,026 - Total business -type activities 169,634,525 152,835,348 4,377,863 14,306,580 Total primary government $ 631,341,189 $ 214,412,083 $ 23,880,882 $ 33,653,696 Component Units: Industrial Development Authority $ 107,089 $ 102,375 $ $ - Health Facilities Authority 359,906 213,010 Housing Finance Authority 680 2,000 - Educational Facilities Authority 189 336 - Total component units $ 467,864 $ 317,721 $ $ General revenues: Property taxes Gas taxes Sales taxes Tourist taxes Communications services tax State revenue sharing Othertaxes Interest income Miscellaneous Transfers, net Total general revenues and transfers Change in net assets Net assets - beginning Net assets - ending The notes to the financial statements are an integral part of this statement. 16 Net (Expense) Revenue and Changes in Net Assets Primary Government Governmental Business -type Component Activities Activities Total Units $ (63,511,180) $ $ (63,511,180) $ (151,888,806) - (151,888,806) (14,553,041) (14,553,041) (66,811,606) (66,811,606) (3,001,450) (3,001,450) (10,310,938) (10,310,938) (31,405,945) (31,405,945) (19,796,828) (19,796,828) (361,279,794) (361,279,794) 11,183, 779 11,183, 779 5,770,764 5,770,764 2,912,637 2,912,637 (4,339,197) (4,339,197) (13,642,717) (13,642,717) 11885,266 11885,266 (361,279,794) 1,885,266 (359,394,528) $ (4,714) (146,896) 1,320 147 (150,143) 261,630,398 261,630,398 18,311,500 18,311,500 - 28,364,419 28,364,419 - 13,883,740 13,883,740 - 5,589,726 5,589,726 - 8,309,841 8,309,841 - 4,565,112 4,565,112 - 3,888,065 1,608,386 5,496,451 338 11,497,626 96,262 11,593,888 - (13,117,462) 13,117,462 - - 342,922,965 14,822,110 357,745,075 338 (18,356,829) 16,707,376 (1,649,453) (149,805) 1,591,534,486 843,010,747 2,434,545,233 459,432 $ 1,573,177,657 $ 859,718,123 $ 2,432,895,780 $ 309,627 17 COLLIER COUNTY, FLORIDA BALANCE SHEET GOVERNMENTAL FUNDS SEPTEMBER 30, 2011 ASSETS Cash, cash equivalents and investments Receivables: Interest Trade, net Notes Special assessments Due from other funds Due from other governments Deposits Inventory for resale Inventory Advances to other funds Prepaid costs Totalassets LIABILITIES AND FUND BALANCES Liabilities: Accounts payable Wages payable Due to other funds Due to other governments Due to individuals Deferred revenue Refundable deposits Retainage payable Advances from other funds Total liabilities Fund balances (deficit): Nonspendabie Restricted Committed Assigned Unassigned Total fund balances (deficit) Total liabilities and fund balances (deficit) Government Other Total General Facilities Governmental Governmental Fund Impact Fee Funds Funds $66,656,597 $ 5,975,735 $330,804,948 $403,437,280 63,208 6,756 353,251 423,215 445,103 446 2,218,939 2,664,488 1,719,607 303,651 10,396,032 12,419,290 - - 134,074 134,074 2,810,686 - 1,912,468 4,723,154 2,264,847 21,235 7,901,428 10,187,510 4,628 - - 4,628 - - 18,317,291 18,317,291 132,251 22,277,347 - 132,251 11,647,325 22,597,807 40,017,500 51,664,825 20,995 - 20,995 $85,765,247 $ 6,307,823 $412,055,931 $504,129,001 $ 8,653,461 $ 16,809 $ 10,378,706 $ 19,048,976 3,583,249 - 717,107 4,300,356 1,569,729 2,212,746 3,782,475 3,066,856 891,156 3,958,012 310,087 3,487 313,574 278,140 303,651 14,140,521 14,722,312 925,748 - 76,767 1,002,515 - - 1,533,480 1,533,480 22,277,347 48,523,127 70,800,474 18,387,270 22,597,807 78,477,097 119,462,174 11,805,199 - - 11,805,199 - - 229,545,519 229,545,519 - - 48,445,097 48,445,097 1,114,116 - 79,555,933 80,670,049 54,458,662 (16,289,984) (23,967,715) 14,200,963 67,377,977 (16,289,984) 333,578,834 384,666,827 $85,765,247 $ 6,307,823 $412,055,931 $504,129,001 The notes to the financial statements are an integral part of this statement. 18 COLLIER COUNTY, FLORIDA RECONCILIATION OF THE BALANCE SHEET OF GOVERNMENTAL FUNDS TO THE STATEMENT OF NET ASSETS SEPTEMBER 30, 2011 Differences in amounts reported for governmental activities in the statement of net assets on pages 14 -15: Fund balances -total governmental funds Capital assets used in governmental activities are not financial resources and therefore are not reported in the funds. Those assets consist of: Land and other non - depreciable assets Construction in progress Depreciable assets, net of $558,931,908 in accumulated depreciation Certain long -term assets are not financial resources and therefore are not reported in the governmental funds. Certain revenues will be collected after year -end, but are not available to pay for the current period's expenditures, and therefore are reported as deferred revenue in the funds. Certain liabilities applicable to the County's governmental activities are not due and payable in the current period and accordingly are not reported as fund liabilities. Interest on long -term debt is not accrued in the governmental funds, but is recognized as an expenditure when due. All liabilities are reported in the statement of net assets. Balances at September 30, 2011 are: Accrued interest on bonds Bonds and notes payable Capital lease obligations Compensated absences Unamortized deferred loss Unamortized premium Unamortized discount Internal service funds are used by the County to charge self- insurance, fleet management and information technology services to individual funds. The assets and liabilities of the internal service funds are included in governmental activities in the statement of net assets. Internal service fund net assets are: Total net assets - governmental activities The notes to the financial statements are an integral part of this statement. 19 $ 384,666,827 $ 384,467,144 85,885,755 1,128,235,131 1,598,588,030 5,048,077 10,759,222 $ (7,856,393) (433,233,544) (269,059) (23,105,021) 1,826,733 (16,395,329) 349,700 (478,682,913) 52,798,414 $ 1,573,177,657 COLLIER COUNTY, FLORIDA STATEMENT OF REVENUES, EXPENDITURES AND CHANGES IN FUND BALANCES GOVERNMENTAL FUNDS FOR THE FISCAL YEAR ENDED SEPTEMBER 30, 2011 The notes to the financial statements are an integral part of this statement. 20 Government Other Total General Facilities Governmental Governmental Fund Impact Fee Funds Funds Revenues: Taxes $209,688,480 $ - $ 86,951,199 $296,639,679 Licenses, permits and impact fees 295,650 896,578 22,503,037 23,695,265 Intergovernmental 39,332,399 - 35,120,450 74,452,849 Charges for services 17,991,298 9,863,609 27,854,907 Fines and forfeitures 1,185,715 2,696,361 3,882,076 Interest income 886,889 51,831 2,663,379 3,602,099 Special assessments - - 2,725,498 2,725,498 Miscellaneous 1,488,347 21,085 9,055,245 10,564,677 Total revenues 270,868,778 969,494 171,578,778 443,417,050 Expenditures: Current: General government 55,836,207 413,819 23,249,534 79,499,560 Public safety 138,373,308 83,905 22,433,006 160,890,219 Physical environment 654,367 13,596,776 14,251,143 Transportation - 50,741,172 50,741,172 Economic environment 810,579 7,030,666 7,841,245 Human services 10,273,973 - 2,800,836 13,074,809 Culture and recreation 15,737,433 20,007,151 35,744,584 Debt service: Principal - - 36,492,892 36,492,892 Interest - 27,926 20,904,619 20,932,545 Fiscal charges - - 434,312 434,312 Capital outlay 3,785,668 59,837 34,880,355 38,725,860 Total expenditures 225,471,535 585,487 232,571,319 458,628,341 Excess (deficiency) of revenues over (under) expenditures 45,397,243 384,007 (60,992,541) (15,211,291) Other financing sources (uses): Bonds issued - - 24,620,000 24,620,000 Premiums on bonds issued 2,050,315 2,050,315 Payment to refunding bond escrow - (26,592,659) (26,592,659) Sale of capital assets 65,011 5,250 70,261 Insurance proceeds 15,989 368,099 384,088 Transfers in 9,596,990 97,569,898 107,166,888 Transfers out (59,043,867) (4,176,797) (54,816,538) (118,037,202) Total other financing sources (uses) (49,365,877) (4,176,797) 43,204,365 (10,338,309) Net change in fund balances (3,968,634) (3,792,790) (17,788,176) (25,549,600) Fund balances (deficit) at beginning of year 71,346,611 (12,497,194) 351,367,010 410,216,427 Fund balances (deficit) at end of year $ 67,377,977 $ (16,289,984) $ 333,578,834 $ 384,666,827 The notes to the financial statements are an integral part of this statement. 20 COLLIER COUNTY, FLORIDA RECONCILIATION OF THE STATEMENT OF REVENUES, EXPENDITURES AND CHANGES IN FUND BALANCES OF GOVERNMENTAL FUNDS TO THE STATEMENT OF ACTIVITIES FOR THE FISCAL YEAR ENDED SEPTEMBER 30, 2011 Differences in amounts reported for governmental activities in the statement of activities on pages 16 -17: Net change in fund balances - total governmental funds $ (25,549,600) Governmental funds report capital outlays as expenditures. However, in the statement of activities the cost of those assets is allocated over their estimated useful lives and reported as depreciation expense. Capital outlay $ 38,725,860 Depreciation expense (67,697,214) (28,971,354) Donations of capital assets are not financial resources to governmental funds, but receiving donated assets increases net assets in the statement of net assets. 2,491,525 Capital assets transferred to and from proprietary funds are not recorded in the governmental funds as there is no flow of current financial resources. (1,446,753) In the statement of activities, the loss on the sale of capital assets is reported. However, in the governmental funds the proceeds from the sale of capital assets increase financial resources. The change in net assets differs from the change in fund balance by the net book value of assets disposed. (1,754,888) Certain revenues not considered available are not recognized in the governmental funds but are included in the statement of activities. (435,802) Debt proceeds provide current financial resources to governmental funds, but issuing debt increases long -term liabilities in the statement of net assets. (24,620,000) Repayment of principal on long -term debt is an expenditure in governmental funds, but a reduction of long -term liabilities in the statement of net assets. Bond and loan principal payments $ 36,322,855 Premium on bonds issued (2,050,315) Payments to refunding escrow agent 26,592,659 Payments on capital lease obligations 170,037 61,035,236 Certain amounts reported in the statement of activities do not require the use of current financial resources and therefore are not reported as expenditures in the governmental funds. Increase in compensated absences $ (1,706,675) Accrued interest on bonds 495,413 Amortization of deferred charges (368,756) Amortization of deferred loss (267,471) Amortization of premium 1,346,977 Amortization of discount (17,934) (518,446) Certain amounts reported in the statement of activities as deferred are reported as expenditures in the governmental funds. 381,800 The net revenues of internal service funds are reported with governmental activities. 1,031,453 Change in net assets - governmental activities $ (18,356,829) The notes to the financial statements are an integral part of this statement. 21 COLLIER COUNTY, FLORIDA GENERAL FUND STATEMENT OF REVENUES, EXPENDITURES AND CHANGES IN FUND BALANCES BUDGET AND ACTUAL (BUDGETARY BASIS) FOR THE FISCAL YEAR ENDED SEPTEMBER 30, 2011 Expenditures: Variance with Current: Final Budget General government Original Final Favorable Board of County Commissioners personal services Budget Budget Actual (Unfavorable) Revenues: 96,500 96,500 73,480 23,020 Taxes $ 219,763,700 $ 219,763,700 $ 209,688,480 $ (10,075,220) Licenses, permits and impact fees 183,500 183,500 295,650 112,150 Intergovernmental 33,913,200 33,913,200 39,332,399 5,419,199 Charges for services 18,587,568 19,704,255 17,991,298 (1,712,957) Fines and forfeitures 1,184,000 1,184,000 1,185,715 1,715 Interest income 857,800 917,800 889,463 (28,337) Miscellaneous 569,800 482,321 1,488,347 1,006,026 Total revenues 275,059,568 276,148,776 270,871,352 (5,277,424) Expenditures: Current: General government Board of County Commissioners personal services 1,004,500 1,004,500 975,422 29,078 Board of County Commissioners operating 96,500 96,500 73,480 23,020 County manager administrative personal services 759,200 759,200 690,896 68,304 County manager administrative operating 54,500 54,500 34,834 19,666 Budget and management personal services 744,600 744,600 683,924 60,676 Budget and management operating 114,700 114,700 64,622 50,078 Administrative services personal services 1,841,900 1,841,900 1,723,500 118,400 Administrative services operating 138,500 139,618 126,651 12,967 Administrative services capital outlay 7,500 7,500 - 7,500 Human resources administration personal services 1,275,500 1,275,500 1,190,898 84,602 Human resources administration operating 345,500 345,500 240,549 104,951 Clerk of the Circuit Court personal services 5,604,900 5,296,500 5,247,432 49,068 Clerk of the Circuit Court operating 2,087,900 2,119,800 2,076,753 43,047 Clerk of the Circuit Court capital outlay 116,600 885,400 882,138 3,262 Property Appraiser personal services 5,175,379 4,975,425 4,873,749 101,676 Property Appraiser operating 1,435,635 1,569,018 1,625,187 (56,169) Property Appraiser capital outlay 50,000 133,171 133,171 Tax Collector personal services 9,592,600 9,095,954 9,095,954 Tax Collector operating 3,054,576 2,758,379 2,758,379 Tax Collector capital outlay 38,371 38,289 38,289 - County attorney personal services 2,507,500 2,507,500 2,387,601 119,899 County attorney operating 423,200 566,303 226,057 340,246 County attorney capital - 10,500 10,269 231 Natural resource planning operating 175,000 1,639,686 1,370,464 269,222 Circuit court costs operating 34,700 34,700 14,404 20,296 Courthouse security operating 1,359,200 1,377,352 1,331,917 45,435 Courthouse security capital outlay 20,000 20,000 19,230 770 County court cost operating 22,800 22,800 5,234 17,566 State Attorney operating 280,400 280,400 252,224 28,176 Public Defender operating 179,300 179,300 176,776 2,524 Other general administrative personal services 331,300 331,300 229,615 101,685 Other general administrative operating 677,100 1,069,303 412,998 656,305 Facilities management personal services 3,234,100 3,397,761 3,371,116 26,645 Facilities management operating 7,426,300 7,420,222 7,347,848 72,374 Facilities management capital outlay 91,000 140,000 143,094 (3,094) 22 COLLIER COUNTY, FLORIDA GENERAL FUND STATEMENT OF REVENUES, EXPENDITURES AND CHANGES IN FUND BALANCES BUDGET AND ACTUAL (BUDGETARY BASIS) FOR THE FISCAL YEAR ENDED SEPTEMBER 30, 2011 Sheriff personal services Sheriff operating Supervisor of Elections personal services Supervisor of Elections operating Supervisor of Elections capital outlay Real property management personal services Real property management operating Total general government Variance with Final Budget Original Final Favorable Budget Budget Actual (Unfavorable) 3,135,000 3,135,000 3,229,824 (94,824) 127,700 127,700 194,486 (66,786) 1,959,800 1,959,800 1,946,355 13,445 1,149,700 1,124,550 990,874 133,676 12,400 37,550 36,566 984 816,900 827,300 819,606 7,694 52,400 50,150 46,578 3,572 57,554,661 59,515,131 57,098,964 2,416,167 Public safety Sheriff personal services Sheriff operating Sheriff capital outlay Emergency management administration personal services Emergency management administration operating Emergency management administration capital Helicopter operations personal services Helicopter operations operating Helicopter operations capital Intersection safety personal services Intersection safety operating Medical examiner services operating Total public safety Physical environment Conservation and resource management personal service Conservation and resource management operating Conservation and resource management capital Immokalee cemetery operating Total physical environment Economic environment Veterans services personal services Veterans services operating Housing and urban improvement operating Total economic environment Human services Health Care Responsibility Act operating Domestic animal services personal services Domestic animal services operating Domestic animal services capital outlay Health department operating Mental health operating Client assistance personal services Client assistance operating Public services division office personal services Public services division office operating Total human services 111,371,000 112, 849,000 110,955,748 1,893, 252 25,419,300 25,487,300 23,085,864 2,401,436 - - 2,418,698 (2,418,698) 878,100 845,900 801,640 44,260 625,200 655,825 615,221 40,604 - - 7,965 (7,965) 620,300 717,500 714,656 2,844 837,100 773,956 699,222 74,734 - 2,176 2,176 - - 50,000 28,024 21,976 700,000 650,000 413,528 236,472 1,063,200 1,063,200 11059,405 3,795 141,514,200 143,094,857 140,802,147 2,292,710 570,900 596,600 528,986 67,614 147,200 143,900 122,970 20,930 - 3,300 3,300 - 4,600 2,175 2,411 (236) 722,700 745,975 657,667 88,308 247,200 247,200 235,009 12,191 68,500 57,148 27,503 29,645 787,500 787,500 548,067 239,433 1,103,200 1,091,848 810,579 281,269 50,000 50,000 - 50,000 2,011,300 2,011,300 1,876,384 134,916 714,800 699,572 638,294 61,278 5,400 22,400 20,484 1,916 1,666,400 1,666,400 1,854,902 (188,502) 899,300 899,300 1,056,104 (156,804) 451,300 463,300 450,501 12,799 3,732,800 3,738,152 4,116,736 (378,584) 329,700 323,700 265,270 58,430 20,900 20,900 15,782 5,118 9,881,900 91895,024 10,294,457 (399,433) 23 COLLIER COUNTY, FLORIDA GENERAL FUND STATEMENT OF REVENUES, EXPENDITURES AND CHANGES IN FUND BALANCES BUDGET AND ACTUAL (BUDGETARY BASIS) FOR THE FISCAL YEAR ENDED SEPTEMBER 30, 2011 Beach and water park operations personal services Beach and water park operations operating Beach and water park operations capital outlay Total culture and recreation Total expenditures Excess of revenues over expenditures Other financing sources (uses): Sale of capital assets Insurance proceeds Transfers in Transfers out Total other financing sources (uses) Net change in fund balance Fund balance at beginning of year Fund balance at end of year Reconciliation: Net change in fund balance, budgetary basis Net change in fair value of investments Advances budgeted as transfers Net change in fund balance, GAAP basis 4,805,200 4,537,700 4,372,421 Variance with 5,232,000 5,107,567 4,883,132 Final Budget 56,000 Original Final Favorable 17,164,100 Budget Budget Actual (Unfavorable) Culture and recreation 231,132,324 225,471,535 5,660,789 Library administration personal services 5,230,800 5,231,400 4,944,367 287,033 Library administration operating 1,840,100 1,841,537 1,537,513 304,024 Beach and water park operations personal services Beach and water park operations operating Beach and water park operations capital outlay Total culture and recreation Total expenditures Excess of revenues over expenditures Other financing sources (uses): Sale of capital assets Insurance proceeds Transfers in Transfers out Total other financing sources (uses) Net change in fund balance Fund balance at beginning of year Fund balance at end of year Reconciliation: Net change in fund balance, budgetary basis Net change in fair value of investments Advances budgeted as transfers Net change in fund balance, GAAP basis 4,805,200 4,537,700 4,372,421 165,279 5,232,000 5,107,567 4,883,132 224,435 56,000 71,285 70,288 997 17,164,100 16,789,489 1518071721 981,768 227,940,761 231,132,324 225,471,535 5,660,789 47,118,807 451016,452 45,399,817 383,365 275,000 275,000 65,011 (209,989) - 2,796 15,989 13,193 5,152,300 6,209,598 9,596,990 3,387,392 (69,099,407) (69,550,579) (61,373,867) 8.176,712 (63,672,107) (63,063,185) (51,695,877) 11,367,308 (16,553,300) (18,046,733) (6,296,060) 11,750,673 44,818,500 47,039,399 47,039,399 - $ 28,265,200 $ 28,992,666 $ 40,743,339 $ 11,750,673 $ (6,296,060) (2,574) 2,330,000 $ (3,968,634) The notes to the financial statements are an integral part of this statement. 24 COLLIER COUNTY, FLORIDA STATEMENT OF NET ASSETS PROPRIETARY FUNDS SEPTEMBER 30, 2011 Noncurrent assets: Restricted assets: Cash, cash equivalents and investments 37,340,089 Business -type Activities Enterprise Funds Governmental County Activities - Water Solid Waste Other Internal Service and Sewer Disposal Funds Total Funds ASSETS Notes 828,945 - 828,945 Current assets: Deferred charges 1,231,912 - - 1,231,912 Cash, cash equivalents and investments $ 123,644,909 $ 22,589,904 $ 2,917,462 $ 149,152,275 $ 42,939,987 Receivables: Land and nondepreciable capital assets 72,438,775 3,503,524 13,740,975 89,683,274 Trade, net 5,182,824 730,116 3,179,942 9,092,882 453,713 Special assessments 69,200 - - 69,200 - Interest 191,879 115,090 5,482 312,451 36,681 Unbilled revenue 5,193,114 - 186,059 5,379,173 - Due from other funds 16,918 77,512 12,058 106,488 780,531 Due from other governments 97,237 - 893 98,130 52,506 Deposits - - - 424,553 Inventory 3,777,781 150,783 3,928,564 604,745 Prepaid costs 18,957 - - 18,957 49,410 Restricted assets: Cash, cash equivalents and investments 2,665,409 255,205 298,121 3,218,735 - Due from other governments - - 4,770,918 4,770,918 - Totai current assets 140,858,228 23,767,827 11,521,718 176,147,773 45,342,126 Noncurrent assets: Restricted assets: Cash, cash equivalents and investments 37,340,089 37,340,089 Receivables: Special assessments 35,680 - 35,680 Advances to other funds 15,717,302 3,418,347 - 19,135,649 - Notes 828,945 - 828,945 - Deferred charges 1,231,912 - - 1,231,912 - Capital assets: Land and nondepreciable capital assets 72,438,775 3,503,524 13,740,975 89,683,274 - Depreciable capital assets, net 757,078,648 17,112,536 23,799,308 797,990,492 21,254,499 Total noncurrent assets 884,671,351 24,034,407 37,540,283 946,246,041 21,254,499 Total assets 1,025,529,579 47,802,234 49,062,001 1,122,393,814 66,596,625 (Continued) 25 LIABILITIES Current liabilities: Accounts payable Wages payable Retainage payable Due to other funds Due to other governments Due to individuals Self- insurance claims payable Compensated absences Capital lease obligations Interest payable Bonds and loans payable Liabilities payable from restricted assets: Accounts payable Retainage payable Refundable deposits Unearned revenue Notes payable Bonds and loans payable Total current liabilities Noncurrent liabilities: Self- insurance claims payable Compensated absences Capital lease obligations Net OPEB obligation Landfill post - closure liability Bonds and loans payable, net Total noncurrent liabilities Total liabilities COLLIER COUNTY, FLORIDA STATEMENT OF NET ASSETS PROPRIETARY FUNDS SEPTEMBER 30, 2011 Business -type Activities Enterprise Funds Governmental Activities - County Water Solid Waste Other Internal Service and Sewer Disposal Funds Total Funds $ 5,127,228 $ 1,924,792 $ 2,893,274 $ 9,945,294 $ 1,188,515 348,459 25,259 280,402 654,120 100,591 904,392 - - 904,392 - 360 153 941,639 942,152 885,546 554 508 56,043 57,105 - 25,903 - 377,316 403,219 - - - - - 5,714,175 1,157,176 88,895 531,976 1,778,047 365,011 - - 212,246 212,246 - 2,471,770 - 2,471,770 9,787,165 9,787,165 10,067 - 66,564 76,631 - 106,714 249,906 356,620 37,002 176,849 18,231 232,082 - 78,356 173,978 252,334 69,190 - - 69,190 2,500,866 - - 2,500,866 - 22,440,132 2,401,526 51801,575 30,643,233 8,253,838 - - - - 1,928,324 495,933 38,098 227,990 762,021 156,433 - - 174,565 174,565 - 300,000 - - - 1,578,744 - 1,823,934 22,922,616 51704,399 1,823,934 - 231,152,810 _ $ 43,538,676 $ 42,857,871 857,837,251 $ 54,679,286 231,152,810 231,648,743 1,862,032 402,555 233,913,330 3,663,501 254,088,875 4,263,558 6,204,130 264,556,563 11,917,339 NET ASSETS Invested in capital assets, net of related debt 586,007,392 20,616,060 37,153,472 643,776,924 21,254,499 Restricted for growth related capital expansion 24,057,684 - - 24,057,684 - Restricted for renewal and replacement 300,000 300,000 Restricted for debt service 13,644,754 - - 13,644,754 - Unrestricted 147,430,874 22,922,616 51704,399 176,057,889 33,424,787 Total net assets $ 771,440,704 _ $ 43,538,676 $ 42,857,871 857,837,251 $ 54,679,286 Cumulative consolidation adjustment for internal service fund activities related to enterprise funds 1,880,872 Net assets of Business -type Activities The notes to the financial statements are an integral part of this statement. 26 $ 859,718,123 COLLIER COUNTY, FLORIDA STATEMENT OF REVENUES, EXPENSES AND CHANGES IN FUND NET ASSETS PROPRIETARY FUNDS FOR THE FISCAL YEAR ENDED SEPTEMBER 30, 2011 Operating revenues: Charges for services Miscellaneous Total operating revenues Operating expenses: Personal services Operating Depreciation and amortization Total operating expenses Operating income (loss) Non - operating revenues (expenses): Operating grants and contributions Interest income Insurance reimbursement Interest expense Loss on disposal of capital assets Total non- operating revenues (expenses) Income (loss) before contributions and transfers Business -type Activities Enterprise Funds Governmental County Activities - Water Solid Waste Other Internal Service and Sewer Disposal Funds Total Funds $ 104,782,230 $ 33,422,859 $ 13,542,493 $ 151,747,582 $ 72,572,327 670,264 346,181 71,321 1,087,766 112,859 105,452,494 33,769,040 13,613,814 152,835,348 72,685,186 23,672,927 1,711,265 19,612,937 44,997,129 6,420,024 36,433,622 25,411,280 14,951,818 76,796,720 64,056,436 34,145,591 811,754 21814,275 37,771,620 2,015,239 94,252,140 27,934,299 37,379,030 159,565,469 72,491,699 11,200,354 5,834,741 (23,765,216) (6,730,121) 193,487 20,072 - 4,357,791 4,377,863 - 1,330,149 231,747 46,490 1,608,386 285,966 27,228 572 68,462 96,262 580,613 (8,845,845) - (23,257) (8,869,102) - (385,603) (26,191) (11,188) (422,982) (5,190) (7,853,999) 206,128 4,438,298 (3,209,573) 861,389 3,346,355 6,040,869 (19,326,918) (9,939,694) 1,054,876 Capital grants and contributions 9,873,756 5,100 5,824,872 15,703,728 49,605 Transfers in 2,022,272 42,027 16,275,016 18,339,315 - Transfers out (4,071,929) (2,461,872) (85,200) (6,619,001) (850,000) Change in net assets 11,170,454 3,626,124 2,687,770 17,484,348 254,481 Net assets - beginning 760,270,250 39,912,552 40,170,101 54,424,805 Net assets - ending $ 771,440,704 $ 43,538,676 $ 42,857,871 $ 54,679,286 Consolidation adjustment for internal service fund activities related to enterprise funds (776,972) Change in net assets of Business -type Activities $ 16,707,376 The notes to the financial statements are an integral part of this statement. 27 COLLIER COUNTY, FLORIDA STATEMENT OF CASH FLOWS PROPRIETARY FUNDS FOR THE FISCAL YEAR ENDED SEPTEMBER 30, 2011 Cash flows from operating activities: Cash received for services Cash received from other funds for services Cash received from employees for services Cash received from other governments for services Cash received from refundable deposits Cash received from retirees for services Cash payments on behalf of retirees Cash payments for goods and services Cash payments to employees Cash payments for interfund services Cash payments on refundable deposits Net cash provided by (used for) operating activities Cash flows from non - capital financing activities: Cash received from operating grants Cash transfers from other funds Cash transfers to other funds Net cash provided by (used for) non - capital financing activities Cash flows from capital and related financing activities: System development charges Special assessment collections Receipts from insurance reimbursements Proceeds from disposal of capital assets Proceeds from capital grants Payments for capital acquisitions Principal payments on state revolving loans Principal payments on bonds Principal payments on leases Interest and fiscal agent fees paid Net cash provided by (used for) capital and related financing activities Cash flows from investing activities: Interest on investments Net cash provided by investing activities Net increase (decrease) in cash, cash equivalents and investments Business -type Activities Enterprise Funds Governmental County Activities - Water Solid Waste Other Internal Service and Sewer Disposal Funds Total Funds $105,668,701 $ 33,555,440 $ 14,376,983 $153,601,124 $ - - - - - 67,144,521 - 572 66,467 - 4,627,305 531 - 14,633 531 418,998 43,000 820,471 2,660,428 863,471 - - - (3,574,174) - 1,223,462 (6,881,681) (6,881,681) (1,067,028) (30,602,014) (24,458,987) (15,098,305) (70,159,306) (64,324,109) (24,388,771) (1,774,339) (16,225,225) (42,388,335) (6,616,984) (6,519,339) (830,129) (4,089,492) (11,438,960) (402,281) (44,000) (820,471) (72) (864,543) 44,158,108 6,491,985 (21,036,111) 29,613,982 1,003,884 26,442 - 2,852,512 2,878,954 - 4,855,670 6,845,529 21,544,316 33,245,515 (4,071,929) (7,679,266) (4,641,096) (16,392,291) - 810,183 (833,737) 19,755,732 19,732,178 7,653,433 - 7,653,433 520,826 520,826 - 27,228 572 66,467 94,267 538,710 80,605 7,770 14,633 103,008 4,356 211,500 31,398 2,660,428 2,903,326 - (21,034,611) (2,482,894) (3,574,174) (27,091,679) (267,436) (6,881,681) (6,881,681) (4,969,157) - (4,969,157) (249,535) (249,535) (9,746,786) - (23,257) (9,770,043) - (34,138,643) (2,443,154) (1,105,438) (37,687,235) 275,630 1,352,732 233,751 51,286 1,637,769 292,047 1,352,732 233,751 51,286 1,637,769 292,047 12,182,380 3,448,845 (2,334,531) 13,296,694 1,571,561 Cash, cash equivalents and investments, October 1, 2010 151,468,027 19,396,264 5,550,114 176,414,405 41,368,426 Cash, cash equivalents and investments, September 30, 2011 $163,650,407 $ 22,845,109 $ 3,215,58 $ 42,939,987 Current cash, cash equivalents and investments $123,644,909 $ 22,589,904 $ 2,917,462 $149,152,275 $ 42,939,987 Current cash, cash equivalents and investments- restricted 2,665,409 255,205 298,121 3,218,735 - Noncurrent cash, cash equivalents and investments - restricted 37,340,089 - - 37,340,089 - Cash, cash equivalents and investments, September 30, 2011 $163,650,407 $ 22,845,109 $ 3,215,583 $ 189,711,099 $ 42,939,987 (Continued) 28 COLLIER COUNTY, FLORIDA STATEMENT OF CASH FLOWS PROPRIETARY FUNDS (CONTINUED) RECONCILIATION OF OPERATING INCOME (LOSS) TO NET CASH PROVIDED BY (USED FOR) OPERATING ACTIVITIES FOR THE FISCAL YEAR ENDED SEPTEMBER 30, 2011 Operating income (loss) Adjustments to reconcile operating income (loss) to net cash provided by (used for) operating activities: Depreciation expense Amortization of bond issuance costs Amortization of utility acquisition adjustment Net changes in assets and liabilities: Trade receivable Due from other funds Due from other governments Deposits Prepaid costs Inventory Prepaid costs Accounts payable Wages payable Due to other funds Due to other governments Due to individuals Compensated absences Refundable deposits Unearned revenue Self- insurance claims payable Net OPEB obligation Landfill post closure liability Total adjustments Net cash provided by (used for) operating activities Non -cash investing, capital and financing activities: Change in fair value of investments Contributed capital assets Developer contributions Business -type Activities Enterprise Funds Governmental County Activities - Water Solid Waste Other Internal Service and Sewer Disposal Funds Total Funds $ 11,200,354 $ 5,834,741 $ (23,765,216) $ (6,730,121) $ 193,487 33,546,878 811,754 2,814,275 37,172,907 2,015,239 538,258 - - 538,258 - 60,455 - 60,455 244,789 (116,333) 795,572 924,028 (266,130) 26,032 (26,740) (12,057) (12,765) 89,466 (59,582) 5,831 (53,751) (51,455) - 93,714 (9,877) (9,877) - (348,408) - (6,618) (355,026) (36,677) - (26,368) (342,231) 159,658 (138,269) (320,842) (33,375) (703,076) (51,582) (610,449) (1,365,107) (196,170) (205) (31,523) 2,050 (29,678) 30,791 531 99 (23,142) (22,512) - 17,958 - (452) 17,506 - (12,768) (11,492) (91,331) (115,591) (790) (1,000) (72) (1,072) - - (966,501) 158,653 - (76,597) - (76,597) - 32,957,754 657,244 2,729,105 36,344,103 810,397 $ 44,158,108 $ 6,491,985 $ (21,036,111) $ 29,613,982 $ 1,003,884 $ (9,027) $ (1,367) $ (284) $ (10,678) $ (49,041) 235,991 8,144 1,392,323 1,636,458 49,606 2,011,385 - - 2,011,385 - The notes to the financial statements are an integral part of this statement. 29 COLLIER COUNTY, FLORIDA STATEMENT OF FIDUCIARY ASSETS AND LIABILITIES AGENCY FUNDS SEPTEMBER 30, 2011 Agency Funds ASSETS Cash, cash equivalents and investments $ 28,405,359 Receivables: Interest 4,064 Other 23,841 Total assets $ 28,433,264 LIABILITIES Due to other governments $ 7,621,130 Due to individuals 570,763 Refundable deposits 19,871,237 Due to special assessment holders 370,134 Total liabilities $ 28,433,264 The notes to the financial statements are an integral part of this statement. 30 COLLIER COUNTY, FLORIDA NOTES TO THE FINANCIAL STATEMENTS SEPTEMBER 30, 2011 INDEX NOTE PAGE NUMBER 1 Summary of Significant Accounting Policies 32 2 Cash, Cash Equivalents and Investments 42 3 Trade Receivables 45 4 Interfund Payables and Receivables 46 5 Capital Assets 48 6 Long -Term Obligations 49 7 Conduit Debt Obligations 56 8 Defeased Debt 57 9 Pension Plan Obligations 58 10 Transfers 59 11 Net Assets /Fund Balances 60 12 Risk Management 63 13 Other Postemployment Benefits 65 14 Landfill Liability 69 15 Significant Contingencies 69 16 Significant Commitments 70 17 Fund Deficits 71 18 Subsequent Events 72 31 COLLIER COUNTY, FLORIDA NOTES TO THE FINANCIAL STATEMENTS SEPTEMBER 30, 2011 NOTE 1- SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES THE REPORTING ENTITY The primary government consists of Collier County, a political subdivision of the State of Florida that was established in 1923 by the Florida State Legislature. The County is governed by a Board of County Commissioners which consists of five members elected within single member districts. In addition, there are five separately elected Constitutional Officers: the Tax Collector, Property Appraiser, Sheriff, Clerk of the Circuit Court and Supervisor of Elections. The Constitutional Officers are elected county wide. Under the direction of the Clerk of the Circuit Court, the Collier County Finance and Accounting Department maintains the accounting system for the operations of the Board of County Commissioners, Supervisor of Elections and the Clerk of the Circuit Court. The Tax Collector, Property Appraiser and Sheriff each maintain their own accounting systems. For financial reporting purposes the operations of the Board of County Commissioners and the Constitutional Officers are combined and presented as the primary government. Component units are legally separate agencies that the primary government is financially accountable for or organizations which should be included in the reporting entity because of the nature and significance of their relationship with the primary government. Financial accountability is determined by the primary government's ability to appoint the voting majority of the entity's board, impose its will on the organization, and the existence of a financial benefit /burden relationship or fiscal dependency. The County's blended component units consist of organizations whose respective governing Boards are composed entirely of the Board of County Commissioners serving ex- officio. These entities are legally separate, however financial support has been pledged and financial or operational policies may be significantly influenced by the County. In accordance with Governmental Accounting Standards Board (GASB) Statement No. 14, The Financial Reporting Entity (GASB 14), as amended by GASB Statement No. 39, Determining Whether Certain Organizations are Component Units (GASB 39), these organizations are reported as if they were part of the County's operations. Collier County Water and Sewer District The District was established by Chapter 88 -499, as amended by Chapter 03 -353, Laws of Florida, to provide water, sewer and effluent services to portions of the unincorporated area of Collier County. Goodland Water District The District was established by a Special Referendum Election authorized by Collier County Ordinance 75 -5 and Section 125.01(q), Florida Statutes. The District provides potable water service to the residents of Goodland. Collier County Community Redevelopment Agency (CRA) The CRA was established by Resolution 2000 -82 to benefit blighted areas in both the Immokalee Redevelopment and Bayshore /Gateway Triangle Redevelopment areas. These two redevelopment areas are geographically separate and distinct. K�� COLLIER COUNTY, FLORIDA NOTES TO THE FINANCIAL STATEMENTS SEPTEMBER 30, 2011 NOTE 1— SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES — CONTINUED THE REPORTING ENTITY— CONTINUED Collier County Airport Authoritv The Board of County Commissioners was established as the governing body of the Airport Authority by Ordinance 2010 -10. The Airport Authority is responsible for construction, improvement, equipment, development, regulation, operation and maintenance of the Marco Island, Immokalee and Everglades Airports and all related airport facilities. Collier County Metropolitan Planning Organization (MPO) The Authority was created in 1981 by Collier County Resolution 81 -222 pursuant to Section 334.215, Florida Statutes, as amended by Section 339.175, Florida Statutes. The purpose of the MPO is to provide for short-term and long -term planning for all modes of travel in order to benefit the citizens of Collier County. The MPO is reported as part of the Grants and Shared Revenue fund. The County's discretely presented component units consist of organizations whose board members are appointed by the Board of County Commissioners. The County is able to impose its will on these entities because of its ability to remove appointed members from the component units' Boards. The Authorities maintain their own financial records, but do not issue separate financial statements. GASB 14, as amended by GASB 39, requires that the financial data of the following organizations be reported in separate columns to emphasize that they are legally separate from the County. Collier County Housing Finance Authority The Authority was formed in 1980 by Collier County Ordinance 80 -66 for the purpose of stimulating the construction of residential housing for low and moderate income families through the use of public financing. Their financial position and results of operations are reported in the accompanying financial statements and the outstanding conduit debt issued by the Authority is disclosed in Note 7, "Conduit Debt Obligations ". Collier County Health Facilities Authority The Authority was established in 1979 by Collier County Ordinance 79 -75 for the purpose of assisting health facilities in the acquisition, construction and financing of projects within the County. Their financial position and results of operations are reported in the accompanying financial statements and the outstanding conduit debt issued by the Authority is disclosed in Note 7, "Conduit Debt Obligations ". Collier County Industrial Development Authority The Authority was created in 1978 by Collier County Resolution 78 -94 to facilitate the financing of projects that promote economic growth and increase opportunities for employment in the County. Their financial position and results of operations are reported in the accompanying financial statements and the outstanding conduit debt issued by the Authority is disclosed in Note 7, "Conduit Debt Obligations ". 33 COLLIER COUNTY, FLORIDA NOTES TO THE FINANCIAL STATEMENTS SEPTEMBER 30, 2011 NOTE 1— SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES - CONTINUED Collier County Educational Facilities Authoritv The Authority was created in 1999 by Collier County Resolution 99 -177 to assist institutions for higher education in the construction, financing and refinancing of projects. Their financial position and results of operations are reported in the accompanying financial statements and the outstanding conduit debt issued by the Authority is disclosed in Note 7, "Conduit Debt Obligations ". Financial information on the individual component units can be obtained from their respective administrative offices or from the Finance and Accounting Department of the Clerk of the Circuit Court. Administrative Offices Collier Water and Sewer District 3339 East Tamiami Trail, Suite #214 Naples, Florida 34112 Collier County Airport Authority 2005 Mainsail Drive, Suite #1 Naples, FL 34114 Bayshore Gateway Community Redevelopment Agency 4069 Bayshore Drive Naples, Florida 34112 Immokalee Community Redevelopment Agency 310 Alachua Street Immokalee, Florida 34142 Goodland Water District 3339 East Tamiami Trail, Suite #214 Naples, Florida 34112 Collier County Health Facilities Authority and Housing Finance Authority 5150 Tamiami Trail North, Suite 502 Naples, FL 34103 Collier County Industrial Development Authority and Educational Facilities Authority 3050 North Horseshoe Drive, Suite #120 Naples, Florida 34104 Collier County Metropolitan Planning Organization 2885 South Horseshoe Drive Naples, Florida 34104 GOVERNMENT WIDE AND FUND FINANCIAL STATEMENTS The basic financial statements are made up of the government wide financial statements and fund financial statements. Both of these sets of financial statements distinguish between the governmental and business type activities of Collier County. The government wide financial statements consist of a Statement of Net Assets and a Statement of Activities. These statements report on the financial condition of Collier County, at the reporting entity level. Internal balances represent net amounts due between the governmental and business -type activities. As a general rule, the effect of interfund activity has been eliminated from the government wide financial statements. Fiduciary funds are not included in these presentations as their assets do not represent amounts that are available for Collier County government operations. The Statement of Net Assets reports all financial and capital resources of Collier County's governmental and business -type activities. Net assets equal assets minus liabilities, and is shown in three categories: invested in capital assets, net of related debt; restricted net assets and unrestricted net assets. The Statement of Activities reports results of operations on a functional activity (program) basis and demonstrates to what degree the particular program has been self - supporting. 34 COLLIER COUNTY, FLORIDA NOTES TO THE FINANCIAL STATEMENTS SEPTEMBER 30, 2011 NOTE 1- SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES — CONTINUED GOVERNMENT WIDE AND FUND FINANCIAL STATEMENTS— CONTINUED Program revenues are reported in the following three categories: charges for services, operating grants and contributions and capital grants and contributions. Charges for services are amounts charged to customers for a particular service, and are netted against the cost of the relevant program. Internal charges for indirect services are allocated across functions as direct expenses. Grants and contributions refer to revenues restricted for capital or operational use in a particular program. The general revenue category encompasses all other revenue types and represents revenue collected to support all functions of Collier County government. The fund financial statements follow the government wide statements and report more detailed information about operations of major funds on an individual basis and nonmajor funds on an aggregate basis for the governmental and proprietary funds. Following the governmental fund balance sheet and statement of revenues, expenditures and changes in fund balances are reconciliations explaining the differences between the governmental fund presentation and the government wide presentation. BASIS OF PRESENTATION The following are reported as major governmental funds: General Fund — the General fund is the general operating fund of the County. All general tax revenues and other receipts that are not accounted for in other funds are accounted for in the General Fund. The general operating funds of the Clerk of the Circuit Court, Property Appraiser, Sheriff, Supervisor of Elections and Tax Collector are presented together with the Board of County Commissioners' general operating fund in the County's consolidated General Fund. Government Facilities Impact Fee Fund — the Government Facilities Impact Fee fund is used to account for the receipt and expenditure of government facilities impact fees collected from qualifying new construction. The impact fees must be used for the acquisition and construction of government facilities. The following are reported as major enterprise funds: County Water and Sewer Fund — the County Water and Sewer fund is used to account for the provision of water, wastewater and effluent services to certain portions of the County's unincorporated area. Solid Waste Disposal Fund — the Solid Waste Disposal fund is used to account for the provision of solid waste disposal services to users throughout the County. Collier County also maintains the following nonmajor fund types: Special Revenue Funds — Special revenue funds are used to account for the accumulation of resources set aside for a specific purpose. 35 COLLIER COUNTY, FLORIDA NOTES TO THE FINANCIAL STATEMENTS SEPTEMBER 30, 2011 NOTE 1- SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES — CONTINUED BASIS OF PRESENTATION — CONTINUED Debt Service Funds — Debt service funds are used to account for the accumulation of resources for the payment of principal, interest and other expenditures on long -term obligations, other than bonds and notes payable from the operations of business -type activities. Capital Proiect Funds — Capital project funds are used to account for the acquisition and construction of major capital facilities other than those financed by proprietary funds. Enterprise Funds — Enterprise funds are used to account for activities for which a fee is charged to external users for goods or services. Internal Service Funds — Internal service funds are used to account for the provision of goods and services by one department to other departments within the County or to other governmental units on a cost reimbursement basis. Collier County currently operates the following Internal Service Funds: Self Insurance, Sheriffs Self Insurance, Fleet Management and Information Technology. Agency Funds — Agency funds are custodial in nature and do not report the results of operations (assets equal liabilities). Agency funds are clearing accounts for assets held by the government as an agent for individuals, private organizations or other governments. The Board of County Commissioners, Sheriff, Clerk of the Circuit Court and Tax Collector all maintain agency funds. BASIS OF ACCOUNTING AND MEASUREMENT FOCUS Basis of accounting refers to when revenues and expenditures or expenses are recognized in the accounts and reported in the financial statements. Basis of accounting relates to the timing of the measurements made regardless of the measurement focus applied. The government wide financial statements, as well as the fund financial statements for the proprietary funds, are reported using the economic resources measurement focus and the accrual basis of accounting. Revenues are recognized in the period in which they are earned and expenses are recognized in the period incurred. Grant revenues are recognized when eligibility requirements are met. The intent in proprietary operations is that the costs of providing goods or services to the general public be financed primarily through user charges, or where periodic determination of revenues earned, expenses incurred, and /or net income is deemed appropriate. Proprietary funds distinguish operating revenues and expenses from non - operating items. Operating revenues and expenses generally result from providing services and producing and delivering goods in connection with a proprietary fund's principal ongoing operations. Operating expenses for enterprise funds and internal service funds include the cost of sales and services, administrative expenses and depreciation on capital assets. All revenues and expenses not meeting this definition are reported as non - operating revenues and expenses. 36 COLLIER COUNTY, FLORIDA NOTES TO THE FINANCIAL STATEMENTS SEPTEMBER 30, 2011 NOTE 1- SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES — CONTINUED BASIS OF ACCOUNTING AND MEASUREMENT FOCUS — CONTINUED Primary revenues including non -grant intergovernmental revenues, charges for services and interest are treated as susceptible to accrual under the modified accrual basis. In applying the susceptibility -to- accrual concept to grant revenues, the legal and contractual requirements of the numerous individual programs are used as guidance. In addition, grant revenues are considered available if they are expected to be collected within one year of the end of the current fiscal period. Property taxes are discussed later in this footnote. Other revenue sources are not considered measurable and available and are not treated as susceptible to accrual. Expenditures are recorded when the related fund liability is incurred. Exceptions to this general rule include accrued compensated absences and principal and interest on long -term debt. BUDGETS AND BUDGETARY DATA The following are the statutory procedures followed by the Board of County Commissioners in establishing the budgets for the County: 1) Within fifteen days after certification of the ad valorem tax roll by the Property Appraiser, the County budget officer prepares and presents to the Board a tentative budget for the ensuing fiscal year. The budget includes all estimated receipts and all estimated expenditures, reserves and balances to be carried forward at the end of the year as specified in Section 129.03, Florida Statutes. 2) Within eighty days of the certification of value, but not earlier than sixty-five days after certification, the Board holds a public hearing on the tentative budget and proposed millage rate. At this hearing the Board amends and adopts the tentative budget, recomputes the proposed millage rate, and announces publicly the percentage, if any, by which the recomputed proposed millage rate exceeds the rolled -back rate. If the millage rate tentatively adopted exceeds that proposed, each taxpayer within the jurisdiction is notified of the increase by first class mail, at the expense of the Board. 3) Within fifteen days of the meeting adopting the tentative budget, the Board advertises the County's intent to adopt a final budget and millage rate. 4) A public hearing is held by the Board to finalize the budget and adopt a millage rate. This hearing is held not less than two days and not more than five days after the day that the advertisement is first published. Prior to September 30, the millage levy is adopted by a separate vote. The millage rate adopted is not allowed to exceed the tentatively adopted millage rate, except as allowed for by emergency provision with strict public notice requirements. This is followed by the approval and ratification of the final budget. 37 COLLIER COUNTY, FLORIDA NOTES TO THE FINANCIAL STATEMENTS SEPTEMBER 30, 2011 NOTE 1- SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES— CONTINUED BUDGETS AND BUDGETARY DATA — CONTINUED 5) The resolution approved at the final hearing is forwarded to the Property Appraiser, Tax Collector and Florida Department of Revenue, not later than thirty days following the adoption of the Resolution, the Board certifies to the State of Florida, Department of Revenue, Division of Ad Valorem Tax, that it has complied with the provisions of Chapter 200, Florida Statutes. 6) The County Manager approves interdepartmental budget changes within the same fund and division of $50,000 or less that do not impact reserves or recognize revenue. All other budgetary changes must be approved by the Board of County Commissioners as matter of policy. The initial adopted budget was amended in accordance with Florida Statutes. 7) Florida State Section 129.07, as amended in 1978, provides that expenditures in excess of total fund budgets are unlawful. However, because the Board approves all budgetary changes between departments, except those approved by the County Manager, the departmental budget becomes the level of control. Formal budgetary integration is employed as a management control device during the fiscal year for all funds. Budgets have been legally adopted by the Board for all Board funds except for agency funds and the Impact Fees Escrow special revenue fund. The Property Appraiser and the Tax Collector adopt budgets for their general funds independently of the Board. The Clerk of Courts operates as a fee officer, and as such, prepares its budget in accordance with Section 218.35, Florida Statutes. The Sheriff and Supervisor of Elections prepare budgets for their general funds, which are submitted to and approved by the Board. The Clerk of Court's budget for court related functions is prepared according to Section 28.36 Florida Statutes and submitted to the Clerks of Court Operations Corporation for approval by the Florida Department of Revenue. Budgets are adopted for all governmental funds except as described in the previous paragraph. These budgets are adopted on a basis consistent with generally accepted accounting principles (GAAP) except for certain non - budgeted revenues and expenses and mark to market activity on investments. All unencumbered appropriations lapse at the end of the current year. Capital project costs are budgeted in the year they are anticipated to be obligated. In subsequent years, the unused budget is reappropriated until the project is completed. Proprietary funds are budgeted on a basis consistent with generally accepted accounting principles, except that capital related and debt transactions are based upon cash receipts and disbursements. Estimated beginning fund balances are considered in the budgetary process. For purposes of the budgetary presentation, certain transactions that have been accounted for in the governmental funds statements of revenues, expenditures and changes in fund balances have not been reflected in the budgetary financial statements. Specifically, bad debt expense and the net change in fair value of investments are not presented in the budget to actual statements. 38 COLLIER COUNTY, FLORIDA NOTES TO THE FINANCIAL STATEMENTS SEPTEMBER 30, 2011 NOTE 1- SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES — CONTINUED ACCOUNTS RECEIVABLE — UNBILLED REVENUE Unbilled charges for services are accrued in the County Water and Sewer, Emergency Medical Services and Goodland Water funds by prorating subsequent bills. INVENTORIES AND PREPAID COSTS Inventory is valued at cost using the first -in, first -out method. Inventory in the governmental funds consists of supplies held for consumption and land. The cost is recorded as an expenditure at the time inventory items are consumed rather than when purchased. Certain payments to vendors reflect costs applicable to future accounting periods and are recorded as prepaid items. Inventories and prepaid costs reported within governmental funds are classified as non - spendable, which indicates that they do not constitute available resources. Inventories and prepaid costs in the government wide and proprietary fund financial statements are reported as an expense when consumed. CAPITAL ASSETS Land, buildings, improvements and equipment are stated at cost. Capital contributions are recorded at their fair value on the date donated. Facilities constructed using system development impact fees, collected from developers and customers, are stated at cost. The County capitalizes expenditures with a cost of $1,000 or more and with a useful life in excess of one year. Expenditures for maintenance and repairs are charged to operating expenses. The cost of assets retired or sold, together with the related accumulated depreciation, is removed from the accounts and any gain or loss on disposition is credited or charged to earnings. Depreciation is calculated using the straight -line method. The estimated useful life of the various classes of depreciable capital assets is as follows: Capital Asset Class Estimated Useful Life Buildings 20 -45 years Infrastructure 3 -30 years Improvements other than buildings 4 -45 years Machinery and equipment 3 -20 years Costs incurred in the renourishment of beaches are included in the infrastructure class of capital assets and are capitalized and depreciated over three years. Infrastructure acquired prior to fiscal years ended June 30, 1980 is not reported. Effective October 1, 2009 the County adopted the provisions of GASB Statement No. 51, Accounting and Financial Reporting for Intangible Assets, which establishes accounting and financial reporting standards for intangible assets. 39 COLLIER COUNTY, FLORIDA NOTES TO THE FINANCIAL STATEMENTS SEPTEMBER 30, 2011 NOTE 1- SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES — CONTINUED CAPITAL LEASE OBLIGATIONS In the government -wide financial statements and proprietary fund financial statements capital lease obligations and the related cost of assets acquired are reflected in the Statement of Net Assets. For capital lease obligations originating in governmental funds, an expenditure for the asset and the offsetting amount of the financing source is reflected in the fund financial statements in the year of inception. BOND PREMIUMS, DISCOUNTS AND ISSUANCE COSTS Bond premiums, discounts and issuance costs for the governmental activities and the business -type activities are deferred and amortized over the term of the bonds using the straight -line method. Bond discounts are presented as a reduction of the face amount of bonds payable, premiums as an increase, while issuance costs are recorded as deferred charges, which are shown on the face of the Statement of Net Assets as a component of noncurrent assets. In the governmental fund financials, bond premiums, discounts and issuance costs are recognized in the current period. DEFEASANCE OF DEBT For refundings resulting in the defeasance of debt, generally accepted accounting principles require that the difference between the reacquisition price and the net carrying amount of the old debt be deferred and amortized over the shorter of the life of the new debt or the remaining life of the old debt as a component of interest expense. The straight -line method is used for amortization of the deferred charge. INTEREST COST In the proprietary funds, interest costs are expensed or capitalized as required by the interest Topic 835, Subtopic 20, Section 30 "Amount of Interest to be Capitalized" of the Financial Accounting Standards Board (FASB) Accounting Standards Codification. PROPERTY TAXES Property taxes become due and payable on November 1st of each year and become delinquent on April 1st of the following year. Property taxes receivable and a corresponding allowance for uncollectible property taxes are not included in the financial statements, as delinquent taxes as of September 30, 2011 are not significant. Discounts on property taxes are allowed for payments made prior to the April 1st delinquent date as follows: November - 4%, December - 3 %, January - 2 %, and February - 1 %. Tax certificates for the full amount of any unpaid taxes must be sold not later than June 1st of each year. No accrual for the property tax levy becoming due in November 2011 is included in the accompanying financial statements, since such taxes are collected to finance expenditures of the subsequent period. 40 COLLIER COUNTY, FLORIDA NOTES TO THE FINANCIAL STATEMENTS SEPTEMBER 30, 2011 NOTE 1- SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES — CONTINUED PROPERTY TAXES- CONTINUED Key dates in the property tax cycle for the fiscal year ended September 30, 2011 are as follows: Property Tax Cycle Assessment roll compiled Assessment roll certified Millage resolution approved Beginning of fiscal year for tax levy Taxes due and payable (levy date) Collection Dates Due date Delinquent (lien date) Tax certificates sold Date January 1, 2010 July 1, 2010 Within 35 days of the certification of the assessment roll October 1, 2010 November 1, 2010 By November 30: 4% discount By December 31: 3% discount By January 31: 2% discount By February 28: 1% discount March 31, 2011 April 1, 2011 Prior to June 1, 2011 APPLICATION OF FASB PRONOUNCEMENTS TO PROPRIETARY FUNDS In accordance with GASB Statement No. 20, Accounting and Financial Reporting for Proprietary Funds and Other Governmental Entities That Use Proprietary Fund Accounting, the County has elected not to apply private sector guidance issued after November 30, 1989. ACCOUNTING ESTIMATES The preparation of financial statements in conformity with generally accepted accounting principles requires management to make estimates and assumptions that affect the reported amounts of assets and liabilities and disclosure of contingent assets and liabilities at the date of the financial statements and the reported amounts of revenues and expenses during the reporting period. Actual results may differ from those estimated. UNEARNED REVENUE AND DEFERRED REVENUE In instances where assets have been received by the County for services to be rendered in future periods, asset balances are offset by an unearned revenue liability account in the financial statements. Examples of unearned revenues of the County as of September 30, 2011 are unspent State Housing Initiative Partnership (SHIP) monies and cash receipts associated with unspent advance grant agreements. Deferred revenue liabilities are reported in the governmental funds to offset receivables that do not meet the availability criterion under the modified accrual basis of accounting. Primary examples of the County's deferred revenues are amounts associated with SHIP loans made to qualifying organizations and deferred impact fee agreements made with developers and individuals. 41 COLLIER COUNTY, FLORIDA NOTES TO THE FINANCIAL STATEMENTS SEPTEMBER 30, 2011 NOTE 1- SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES — CONTINUED ACCRUED COMPENSATED ABSENCES The County follows the provisions of GASB Statement No. 16, Accounting for Compensated Absences. This statement provides for the measurement of accrued vacation leave and other compensated absences using the pay or salary rates in effect at the balance sheet date. It also requires additional amounts to be accrued for certain salary related payments associated with the payment of compensated absences. It is the Board of County Commissioners' policy to allow employees of record on August 2, 1996 a sick leave payment upon termination for any service period earned prior to August 2, 1996 and a payout of unused vacation up to 440 hours for all employees. The Sheriffs policy allows for a percentage of unused sick leave payout based upon years of service, not to exceed 1,000 hours, and up to 500 hours of unused vacation time. Both the Clerk of the Circuit Court's and Tax Collector's policies allow for a percentage of unused sick leave payout based upon years of service, and up to 240 hours of unused vacation hours. The Property Appraiser's policy allows for a percentage of unused sick leave payout based upon years of service, not to exceed 1,040 hours, and up to 200 hours of unused vacation hours. The Supervisor of Election's policy allows for a percentage of unused sick leave payout based upon years of service, and up to 440 hours of unused vacation. Payments for compensated absences are made by the respective fund. Accrued compensated absences are recorded as liabilities in the government -wide financial statements and the proprietary fund financials. A liability is reported in governmental funds only if they have matured, for example, as a result of employee resignations or retirements, and are considered due and payable as of year end. IMPLEMENTATION OF NEW GASB PRONOUNCEMENTS The County implemented GASB Statement No. 54, Fund Balance Reporting and Governmental Fund Type Definitions during the fiscal year ended September 30, 2011. This GASB statement clarifies governmental fund balance classifications and fund type definitions. The basis for the division of fund balances is the level of constraint limiting the use of the resources reported in the governmental funds. GASB Statement No. 54 became effective for financial statement periods beginning after June 15, 2010. Further information can be found in Note 11 beginning on page 60. NOTE 2 — CASH. CASH EQUIVALENTS AND INVESTMENTS The County maintains a cash and investment pool that is available for use by all funds. Each fund's portion of this pool is displayed on the balance sheet under the heading of Cash, Cash Equivalents and Investments. Investment income is allocated monthly to participating funds based on the percentage of each fund's average daily balance in the total pool. 42 COLLIER COUNTY, FLORIDA NOTES TO THE FINANCIAL STATEMENTS SEPTEMBER 30, 2011 NOTE 2 — CASH, CASH EQUIVALENTS AND INVESTMENTS - CONTINUED As of September 30, 2011, the County had the following cash, cash equivalents and investments: Investment Maturities Fair Value Call Date Call Frequency Rating Cash on hand N/A $ 93,518 N/A N/A N/A Demand deposits N/A 131,370,360 N/A N/A N/A State Board of Administration Pool: Pool A N/A 718,262 N/A N/A AAAm Pool N/A 16,165 N/A N/A N/A Certificate of Deposit 10/7/2011 50,000,000 none N/A AA+ United States Treasury Note 3/31/2012 10,044,100 none N/A AA+ Fannie Mae 6/22/2012 25,176,000 none N/A AA+ Federal Home Loan Bank 8/17/2012 50,007,500 11/4/2011 continuous AA+ Federal Home Loan Bank 9/12/2012 25,006,000 12/1/2011 continuous AA+ Federal Home Loan Bank 9/21/2012 50,000,500 10/6/2011 continuous AA+ United States Treasury Note 12/31/2012 50,263,500 none N/A AA+ Fannie Mae 9/20/2013 50,272,500 9/20/2012 once AA+ Freddie Mac 1/28/2014 25,011,500 10/28/2011 continuous AA+ Federal Home Loan Bank 5/8/2014 21,510,320 11/8/2011 continuous AA+ Freddie Mac - Multi Step Coupon 8/15/2014 50,013,000 11/15/2011 continuous AA+ Fannie Mae 8/15/2014 50,060,500 2/15/2012 continuous AA+ Fannie Mae 8/22/2014 25,033,500 2/22/2012 continuous AA+ Fannie Mae - Multi Step Coupon 9/16/2014 49,896,500 3/16/2012 continuous AA+ Total $ 664,493,725 * Standard and Poor's rating CREDIT RISK Credit risk is the risk that an issuer or other counterparty to an investment will not fulfill its obligations. The County's investment practices are governed by Florida Statutes, Chapter 218 and the County's Investment Policy. The County's Investment Policy limits credit risk by restricting authorized investments to the Florida Local Government Surplus Trust Fund (SBA), direct obligations of, or obligations backed by the full faith and credit of the United States Government, U.S. government sponsored Corporation /Instrumentalities (except for Student Loan Marketing Association), certificates of deposit collateralized by U.S. Government Securities or Agencies, fixed income mutual funds collateralized by U.S. Government Securities or Agencies, domestic bankers' acceptances rated "AA" or higher, prime commercial paper rated "A -1" and "P -1 ", tax - exempt obligations rated "AA" or higher and issued by state or local governments, NOW accounts fully collateralized in accordance with Chapter 280, Florida Statutes and qualifying repurchase agreements. The policy requires that each firm involved in a repurchase agreement must execute the County's master repurchase agreement, a third party custodian must hold collateral for all repurchase agreements with a term of more than one day and the market value of the collateral shall maintain a minimum price of 101 percent on U.S. Government securities and 104 percent on Agencies and Instrumentalities with a term over five (5) years, and must be marked to market at least weekly. The SBA is an investment pool administered by the State Board of Administration, under the regulatory oversight of the State of Florida. The SBA operates two pools, Florida PRIME and Fund B Surplus Trust Fund (Fund B), with the Fund B carrying a AAAm rating from Standard & Poor's. 43 COLLIER COUNTY, FLORIDA NOTES TO THE FINANCIAL STATEMENTS SEPTEMBER 30, 2011 NOTE 2 — CASH. CASH EQUIVALENTS AND INVESTMENTS— CONTINUED CREDIT RISK — CONTINUED At September 30, 2011, the Sheriff had $734,427 invested in the State Board of Administration's Local Government Surplus Funds Trust Fund Investment Pool. Of this amount, $718,262 is invested in the Florida PRIME and $16,165 in Fund B. The Florida PRIME investment is fully liquid and carries a weighted average days to maturity of 38.3 days. Fund B is accounted for as a fluctuating net asset value pool and the fair value factor for September 30, 2011 was .75684. Fund B has a weighted average life of 4.82 years. Fund B cash holdings continue to be distributed to participants as they become available from maturities, sales and income received. All cash deposits are held in qualified public depositories pursuant to Florida Statutes Chapter 280, "Florida Security for Public Deposits Act ". Under the Act, all qualified public depositories are required to pledge eligible collateral having a market value equal to or greater than the average daily or monthly balance of all public deposits, multiplied by the depository's collateral pledging level. The pledging level may range from 25% to 200% depending upon the depository's financial condition. Any losses to public deposits are covered by applicable deposit insurance, sale of securities pledged as collateral, and if necessary, assessments against other qualified public depositories of the same type as the depository in default. CUSTODIAL CREDIT RISK The policy requires execution of a third -party custodial safekeeping agreement for purchased securities and collateral, and requires that securities be held in the County's name. At September 30, 2011, the County had demand deposits of $131,370,360. These demand deposits do not include discretely presented component unit deposits of $309,627. All balances in excess of the Federal Depository Insurance Corporation insurance for demand deposits are fully collateralized by the multiple financial institutions' collateral pool in accordance with Florida Statutes Section 280. INTEREST RATE RISK Interest rate risk is the risk that changes in market interest rates will adversely affect the fair value of an investment. One of the primary objectives of the investment policy is to match investment cash flow and maturity with known cash needs and anticipated cash flow requirements. The County limits exposure to interest rate risk by structuring the portfolio to meet daily cash flow demands. Investments shall have an average maturity of not more than five years, except for mortgage securities. Mortgage securities will not be used to match liabilities that are reasonably definable as to amount and disbursement date and are used to invest funds associated with reserves or liabilities that are not associated with a specifically identified cash flow schedule. CONCENTRATION OF CREDIT RISK The County's investment policy establishes limitations on portfolio composition in order to control credit risk. The policy allows 100 percent of the portfolio to be invested in U.S. Government Securities, Agencies and Instrumentalities (excluding mortgage securities), 50 percent to be invested in SBA, 30 percent to be invested in certificates of deposit, 20 percent to be invested in qualifying repurchase agreements and 10 percent each in the categories of fixed income mutual funds, domestic bankers' acceptances, prime commercial paper and tax - exempt obligations. 44 COLLIER COUNTY, FLORIDA NOTES TO THE FINANCIAL STATEMENTS SEPTEMBER 30, 2011 NOTE 2 — CASH, CASH EQUIVALENTS AND INVESTMENTS — CONTINUED The portion of the County's portfolio invested in U.S. Government Instrumentalities is detailed as follows, at September 30, 2011: Percent of Issuer Portfolio Federal Home Loan Bank 22.05% Federal Home Loan Mortgage Corporation 11.29% Federal National Mortgage Association 30.16% Total U.S. Government Instrumentalities 63.50% Reconciliation of cash, cash equivalents and investments to the basic financial statements: Primary government: Cash, cash equivalents and investments $ 366,458,962 Restricted cash, cash equivalents and investments - current 15,818,888 Restricted cash, cash equivalents and investments - noncurrent 253,810,516 Agencyfunds: Cash, cash equivalents and investments 28,405,359 Total $ 664,493,725 NOTE 3 - TRADE RECEIVABLES Trade receivables for Governmental and Business -type Activities are net of an allowance for doubtful accounts as follows: General Fund Government Facilities Impact Fee Nonmajor Governmental Funds Total receivables reported in Governmental Funds Total receivables reported in Internal Service Funds Total Governmental Activities trade receivables County Water and Sewer Solid Waste Disposal Nonmajor Enterprise Funds Total Business -type Activities trade receivables Trade Allowance for Net Trade Receivables Doubtful Accounts Receivables $ 537,155 $ 92,052 $ 445,103 446 - 446 3,009,627 790,688 2,218,939 3,547,228 882,740 2,664,488 464,580 10,867 453,713 $ 4,011,808 $ 893,607 $ 3,118,201 $ 5,545,645 $ 362,821 $ 5,182,824 730,116 - 730,116 3,197,316 17,374 3,179,942 $ 9,473,077 $ 380,195 $ 9,092,882 45 COLLIER COUNTY, FLORIDA NOTES TO THE FINANCIAL STATEMENTS SEPTEMBER 30, 2011 NOTE 3 - TRADE RECEIVABLES — CONTINUED The County has multi and single - family home rehabilitation and homeownership programs funded under the Community Development Block Grant (CDBG), HOME Investment Partnership Loan Program (HOME), Disaster Recovery Initiative (DRI), Neighborhood Stabilization Program (NSP) and the State Housing Initiative Partnership Program (SHIP). The programs are generally repaid when the respective properties are transferred or sold. If the property is transferred or sold before the end of the loan period, the proceeds from the repayment including interest, if any, are then returned to the program. If the homeowners remain in their homes for the full term of the deferred loan, the loan is forgiven. A lien is placed against the property to ensure the repayment of the loan and interest, if any. As collection is uncertain on these loans, they are not recognized in the financial statements. NOTE 4 - INTERFUND PAYABLES AND RECEIVABLES ADVANCES Advances to and advances from other funds at September 30, 2011 were as follows: Governmental Activities: General Fund Government Facilities Impact Fees Fund Other governmental funds: Community Development Fund Capital Improvement Revenue Bonds Fund Parks Improvement Fund County -Wide Capital Improvements Fund County -Wide Library Impact Fees Fund Correctional Facilities Impact Fees Fund Emergency Medical Services Impact Fees Fund Law Enforcement Impact Fees Fund Total Governmental Activities Business -type Activities: County Water and Sewer Solid Waste Disposal Total Business -type Activities Total Advances Advance Advance To From $ 11,647,325 $ 22,277,347 1,150,000 15,717,302 1,150,000 38,867,500 9,715,125 4,218,800 2,333,900 15,388,000 51,664,825 70,800,474 15,717,302 - 3,418,347 - 19,135,649 - $ 70,800,474 $ 70,800,474 Advances are made to funds for the purposes of capital improvements and the funding of certain surety requirements. Reimbursements will take place over the next several years as funds are available. 46 COLLIER COUNTY, FLORIDA NOTES TO THE FINANCIAL STATEMENTS SEPTEMBER 30, 2011 NOTE 4 - INTERFUND PAYABLES AND RECEIVABLES - CONTINUED DUE FROM AND DUE TO Interfund receivables and payables generally result from recording the excess fees associated with Tax Collector and Property Appraiser services, as excess fees are allocated from the General Fund back to the funds that paid for the collection services. Excess fees are calculated after year end, and as such are interfund receivables and payables. Other outstanding balances are the result of time delays between the provision and payment of interfund services and to cover temporary cash deficits. Due from and due to other funds at September 30, 2011 were as follows: Governmental Activities: General Fund Other Governmental Funds: Road Districts Community Redevelopment Unincorporated Area MSTD Community Development Water Management and Pollution Control Grants and Shared Revenues Improvement Districts Fire Control Districts Lighting Districts 911 Enhancement Fee Tourist Development State Housing Initiative Partnership State Court Administration Conservation Collier Other Special Revenue Funds Gas Tax Revenue Bonds Stormwater Improvement Assessment Bonds Limited General Obligation Conservation Collier Bonds Forest Lakes Limited General Obligation Bonds Parks Improvements Water Management Parks Impact Districts Road Impact Districts Road Construction Other Capital Projects Total other governmental funds Business -type Activities: County Water and Sewer Solid Waste Other Business -type funds: Emergency Medical Services Airport Authority Collier Area Transit Total other business -type funds Internal Service Funds Total All Funds 11b Due From Due To $ 2,810,686 $1,569,729 - 20 79,673 18,178 321,712 16,495 - 527 40,666 - 118,346 1,820,834 34,762 42 28,842 - 7,359 - - 294,500 109,738 1,322 20,312 - 15,213 - 65,901 69 - 37,884 - 13,137 924 - 83,647 5,718 - 34,140 6,993 2,453 2,125 529 - - 56 941,593 - qan SFa 1,91Z,4b8 Z,Z1Z,74b 16,918 77,512 14 12,044 12,058 780,531 $ 5,610,173 360 153 47 941,592 941,639 885,546 $ 5,610,173 COLLIER COUNTY, FLORIDA NOTES TO THE FINANCIAL STATEMENTS SEPTEMBER 30, 2011 NOTE 5 — CAPITAL ASSETS A summary of capital asset activity for the year ended September 30, 2011 is as follows: October 1, Deductions/ September 30, 2010 Additions Reclassifications 2011 Governmental Activities: Capital assets not depreciated: Land and other non - depreciable assets $ 378,046,623 $ 3,954,275 $ 2,466,246 $ 384,467,144 Construction in progress 72,961,872 22,459,395 (9,535,512) 85,885,755 Total capital assets not depreciated 451,008,495 26,413,670 (7,069,266) 470,352,899 Capital assets depreciated: Buildings Infrastructure Improvements other than buildings Machinery and equipment Total capital assets depreciated Less accumulated depreciation: Buildings Infrastructure Improvements other than buildings Machinery and equipment Total accumulated depreciation Total depreciable capital assets, net Total Governmental Activities capital assets, net 434,415,832 243,457 (414,589) 434,244,700 895,629,713 5,407,526 76,569 901,113,808 217,837,490 848,109 (6,509,657) 212,175,942 164,243,040 9,875,567 (7,891,302) 166,227,305 1,712,126,075 16,374,659 (14,738,979) 1,713,761,755 95,676,205 13,805,896 (96,929) 109,385,172 229,632,996 29,416,624 (158,839) 258,890,781 66,319,228 11,436,819 (7,630,746) 70,125,301 120,274,398 15,053,114 (9,456,641) 125,870,871 511,902,827 69,712,453 (17,343,155) 564,272,125 1,200,223,248 (53,337,794) 2,604,176 1,149,489,630 $ 1,651,231;743 $ (26,924,124) $ (4,465,090) $ 1,619,842,529 Business -type Activities: Capital assets not depreciated: Land and other non - depreciable assets $ 24,300,821 $ 809,907 $ 621 $ 25,111,349 Construction in progress 66,259,912 26,681,874 (28,369,861) 64,571,925 Total capital assets not depreciated 90,560,733 27,491,781 (28,369,240) 89,683,274 Capital assets depreciated: Buildings Improvements other than buildings Machinery and equipment Total capital assets depreciated Less accumulated depreciation: Buildings Improvements other than buildings Machinery and equipment Total accumulated depreciation Total depreciable capital assets, net Total Business -type Activities capital assets, net 136,622,197 192,110 2,095,913 138,910,220 959,402,456 2,697,728 23,623,575 985,723,759 30,594,830 3,349,731 (81,794) 33,862,767 1,126,619,483 6,239,569 25,637,694 1,158,496,746 63,455,719 3,582,067 (4,671) 67,033,115 242,326,348 30,307,299 (1,817) 272,631,830 19,768,612 3,283,541 (2,210,844) 20,841,309 325,550,679 37,172,907 (2,217,332) 360,506,254 801,068,804 (30,933,338) 27,855,026 797,990,492 $ 891,629,537 $ (3,441,557) $ (514,214) $ 887,673,766 48 COLLIER COUNTY, FLORIDA NOTES TO THE FINANCIAL STATEMENTS SEPTEMBER 30, 2011 NOTE 5 - CAPITAL ASSETS - CONTINUED Schedule of depreciation for fiscal year 2011: General Government $ 8,697,512 Public Safety 13,789,114 Physical Environment 4,458,085 Transportation 31,484,421 Economic Environment 28,807 Human Services 760,595 Culture and Recreation 8,478,680 Subtotal 67,697,214 Internal Service Funds 2,015,239 Total Governmental Activities $ 69,712,453 Water and Sewer $ 33,603,207 Solid Waste 811,754 EMS Additions 737,284 Airport Authority Amortized, net 848,605 Mass Transit one year 1,172,057 Total Business -type Activities $ 37,172,907 NOTE 6 - LONG -TERM OBLIGATIONS SUMMARY OF CHANGES IN LONG -TERM OBLIGATIONS The following is a summary of changes in long -term obligations for the year ended September 30, 2011: 49 000's Omitted Premium or October 1, Discount /Loss September 30, Due within 2010 Additions Reductions Amortized, net 2011 one year Governmental Activities: Bonds and Loans Payable $ 470,136 $ 24,620 $ (61,522) $ - $ 433,234 $ 27,083 Premium /Discount, net 15,186 2,188 - (1,329) 16,045 - Deferred Loss (188) (1,906) - 267 (1,827) - Capital Lease Obligations 439 - (170) - 269 93 Self- Insurance Claims 8,609 - (967) - 7,642 5,714 Net OPEB Obligation 1,484 1,752 (1,657) - 1,579 - Compensated Absences 21,921 8,719 (7,014) - 23,626 11,122 Total $ 517,587 $ 35,373 $ (71,330) $ (1,062) $ 480,568 $ 44,012 Business -type Activities: Bonds and Loans Payable $ 255,420 $ - $ (11,957) $ - $ 243,463 $ 12,288 Premium 4,446 - (293) 4,153 - Deferred Loss (4,647) - - 472 (4,175) - Notes Payable 72 - (3) - 69 69 Capital Lease Obligations 636 - (249) 387 212 Landfill Closure Liability 1,901 - (77) - 1,824 - Compensated Absences 2,656 2,022 (2,138) - 2,540 1,778 Total $ 260,484 $ 2,022 $ (14,424) $ 179 $ 248,261 $ 14,347 49 COLLIER COUNTY, FLORIDA NOTES TO THE FINANCIAL STATEMENTS SEPTEMBER 30, 2011 NOTE 6 - LONG -TERM DEBT - CONTINUED DESCRIPTIONS OF BONDS LOANS AND NOTES PAYABLE Bonds, loans and notes payable at September 30, 2011 were composed of the following: Governmental Activities Limited General Obligation Bonds $32,815,000 2005A Limited General Obligation Bonds, Conservation Collier Program, due in annual installments of $3,285,000 to $4,805,000 through January 1, 2013; interest at 3.00% to 5.00 %. $ 9,380,000 $6,215,000 2007 Limited General Obligation Bonds, Forest Lakes Roadway and Drainage Municipal Service Taxing Unit, due in installments of $300,000 to $540,000 through January 1, 2022; interest at 3.75% to 4.25 %. 4,900,000 Total Governmental Activities Limited General Obligation Bonds $ 14,280,000 Governmental Activities Revenue Bonds $49,360,000 2003 Capital Improvement and Refunding Revenue Bonds due in annual installments of $1,130,000 to $2,570,000 through October 1, 2033; interest at 2.00% to 4.75 %. $167,200,000 2005 Capital Improvement and Refunding Revenue Bonds due in annual installments of $2,035,000 to $7,240,000 through October 1, 2035; interest at 2.25% to 5.00 %. $102,125,000 2003 Gas Tax Revenue Bonds, due in annual installments of $1,495,000 to $6,865,000 through June 1, 2023; interest at 2.00% to 5.25 %. $96,255,000 2005 Gas Tax Revenue Bonds, due in annual installments of $445,000 to $13,985,000 through June 1, 2025; interest at 3.00% to 5.00 %. $59,895,000 2010 Special Obligation Revenue Bonds, due in annual installments of $1,545,000 to $3,860,000 through July 1, 2034; interest at 3.00% to 4.50 %. $24,620,000 2010B Special Obligation Revenue Bonds, due in annual installments of $1,830,000 to $2,630,000 through October 1, 2021; interest at 3.00% to 5.00 %. Total Governmental Activities Revenue Bonds 35,505,000 137,820,000 53,615,000 92,130,000 58,350,000 24,620,000 $ 402,040,000 Governmental Activities Loans and Notes Payable $12,000,000 Florida Department of Transportation State Infrastructure Bank Loan, due in annual installments of $1,839,148 to $4,414,096 through October 1, 2012; interest at 2.00 %. $ 6,327,544 $13,500,000 Bayshore Gateway Community Redevelopment Agency Taxable Note, due September 1, 2014; monthly variable interest rate of 30 -Day LIBOR plus 3.75 %. Total Governmental Activities Loans and Notes Payable Total Governmental Activities Obligations 50 10,586,000 16,913,544 $ 433,233,544 COLLIER COUNTY, FLORIDA NOTES TO THE FINANCIAL STATEMENTS SEPTEMBER 30, 2011 NOTE 6 - LONG -TERM DEBT - CONTINUED DESCRIPTIONS OF BONDS LOANS AND NOTES PAYABLE — CONTINUED Unamortized Bond Premium Deferred loss on Bond Refunding Governmental Activities Obligations, Net Less Current Portion of Governmental Activities Obligations Long -Term Portion of Governmental Activities Obligations, Net BUSINESS -TYPE ACTIVITIES Business -type Activities Revenue Bonds $33,630,000 20038 County Water and Sewer Refunding Revenue Bonds due in annual installments of $1,410,000 to $4,125,000 through July 1, 2021; interest at 4.25% to 5.50 %. $110,165,000 2006 Collier County Water and Sewer Revenue Bonds due in annual installments of $2,310,000 to $8,695,000, commencing July 1, 2017 through July 1, 2036; interest at 4.00% to 5.00 %. 16,395,329 (1,826,733) 447,452,440 (27,083,449) $ 420,368,991 25,260,000 110,165,000 $11,727,489 2009 Collier County Water and Sewer Revenue Bonds due in annual installments of $1,569,324 to $1,817,005, commencing July 1, 2010 through July 1, 2016; interest at 2.97 %. 8,589,008 Total Business -type Activities Revenue Bonds Business -Type Activities Loans and Notes Payable $166,580 County Water and Sewer District agreement with private developer payable through $ 144,014,008 use of sewer system development fee credits. Non - interest bearing agreement. $ 69,190 $14,547,667 County Water and Sewer District State Revolving Fund Loan, interest payable at 4.25% payable in 20 annual payments commencing October 1, 1992. 1,017,592 $13,292,898 County Water and Sewer District State Revolving Fund Loan, interest payable at 2.65% payable in 40 semiannual payments commencing January 15, 1999. 5,619,199 $22,238,677 County Water and Sewer District State Revolving Fund Loan, interest payable at 3.05% payable in 40 semiannual payments commencing November 15, 2001. 12,521,935 $5,160,675 County Water and Sewer District State Revolving Fund Loan, interest payable at 3.05% payable in 40 semiannual payments commencing October 15, 2004. 3,696,726 $6,560,956 County Water and Sewer District State Revolving Fund Loan, interest payable at 3.05% payable in 40 semiannual payments commencing January 15, 2005. 4,696,614 $29,224,004 County Water and Sewer District State Revolving Fund Loan, interest payable at 2.95% payable in 40 semiannual payments commencing June 15, 2006. $ 22,805,130 51 COLLIER COUNTY, FLORIDA NOTES TO THE FINANCIAL STATEMENTS SEPTEMBER 30, 2011 NOTE 6 - LONG -TERM DEBT - CONTINUED DESCRIPTIONS OF BONDS LOANS AND NOTES PAYABLE — CONTINUED $5,445,223 County Water and Sewer District State Revolving Fund Loan, interest payable at 2.92% payable in 40 semiannual payments commencing December 15, 2005. 4,148,056 $5,188,500 County Water and Sewer District State Revolving Fund Loan, interest payable at 2.74% payable in 40 semiannual payments commencing November 15, 2007. 3,433,393 $7,123,496 County Water and Sewer District State Revolving Fund Loan, interest payable at 2.75% and 2.64% payable in 40 semiannual payments commencing April 15, 2008. 4,717,559 $17,577,022 County Water and Sewer District State Revolving Fund Loan, interest payable at 2.64% and 2.79% payable in 40 semiannual payments commencing August 15, 2008. 15,352,731 $11,637,070 County Water and Sewer District State Revolving Fund Loan, interest payable at 2.64% and 2.79% payable in 40 semiannual payments commencing October 15, 2009. 10,920,381 $3,294,890 County Water and Sewer District State Revolving Fund Loan, interest payable at 2.79% payable in 40 semiannual payments commencing December 15, 2009. 2,654,643 Total Business -type Activities Loans and Notes Payable $ 99,517,564 Total Business -type Activities Obligations Unamortized Bond Premium Deferred Loss on Bond Refunding Business -type Activities Obligations, Net Less Current Portion of Business -type Activities Obligations Payable from Unrestricted Assets Less Current Portion of Business -type Activities Obligations Payable from Restricted Assets Long -Term Portion of Business -type Activities Obligations, Net 52 $ 243,531,572 4,153,097 (4,174,638) $ 243,510,031 (9,787,165) (2,570,056) $ 231,152,810 COLLIER COUNTY, FLORIDA NOTES TO THE FINANCIAL STATEMENTS SEPTEMBER 30, 2011 NOTE 6 - LONG -TERM DEBT - CONTINUED SUMMARY OF DEBT SERVICE REQUIREMENTS TO MATURITY The total annual debt service requirements to maturity of long -term debt, excluding compensated absences, capitalized leases, premiums, discounts and arbitrage rebate liability, are as follows: Governmental Activities Fiscal Year Limited General Obligation Bonds Revenue Bonds Loans and Notes Payable Totals Principal Interest Principal Interest Principal Interest Principal 2012 $ 4,940,000 $ 546,994 $ 19,330,000 $ 18,378,666 $ 900,000 $ 699,343 $ 44,795,003 2013 5,185,000 298,525 19,350,000 17,548,428 900,000 637,476 43,919,429 2014 390,000 163,475 17,485,000 16,744,133 8,786,000 575,608 44,144,216 2015 410,000 147,475 17,685,000 15,942,336 - - 34,184,811 2016 425,000 130,775 18,525,000 15,094,892 - - 34,175,667 2017 -21 2,390,000 374,700 106,215,000 61,748,714 - - 170,728,414 2022 -26 540,000 11,475 107,445,000 34,873,288 - - 142,869,763 2027 -31 - - 48,455,000 17,289,016 - - 65,744,016 2032 -36 - - 47,550,000 5,181,170 - - 52,731,170 Totals $ 14,280,000 $ 1,673,419 $ 402,040,000 $ 202,800,643 $ 10,586,000 $ 1,912,427 $ 633,292,489 Business -type Activities Fiscal Loans and Year Revenue Bonds Notes Payable Totals Principal Interest Principal Interest 2012 $ 5,188,936 $ 6,494,196 $ 7,168,285 $ 2,812,095 $ 21,663,512 2013 5,422,044 6,267,614 6,256,273 2,593,262 20,539,193 2014 5,630,093 6,058,578 6,437,162 2,412,373 20,538,206 2015 5,885,930 5,792,443 6,623,299 2,226,235 20,527,907 2016 3,942,005 5,533,892 6,814,836 2,034,697 18,325,430 2017 -21 20,360,000 25,056,139 34,396,584 7,191,648 87,004,371 2022 -26 25,410,000 20,004,687 26,610,139 2,645,290 74,670,116 2027 -31 32,235,000 13,183,362 5,210,986 195,912 50,825,260 2032 -36 39,940,000 5,470,653 - - 45,410,653 Totals $ 144,014,008 $ 93,861,564 $ 99,517,564 $ 22,111,512 $ 359,504,648 LEGAL DEBT MARGIN The Constitution of the State of Florida and the Florida Statutes set no legal debt limit. RESTRICTIVE COVENANTS According to the official statements and County resolutions authorizing the issuance of the Series 2003 and 2005 Capital Improvement Revenue and Refunding Revenue Bonds, as well as the Series 2003 and 2005 Gas Tax Revenue Bonds, the issues are payable from and secured by liens on the local government half -cent sales tax and gas tax revenues, respectively. 53 COLLIER COUNTY, FLORIDA NOTES TO THE FINANCIAL STATEMENTS SEPTEMBER 30, 2011 NOTE 6 - LONG -TERM DEBT— CONTINUED RESTRICTIVE COVENANTS - CONTINUED During fiscal year 2008 insurer ratings were downgraded on the Series 2002, 2003 and 2005 Capital Improvement and Refunding Revenue Bonds. The covenants related to these issues require that in the event of a downgrade below "A ", by either Moody's or Standard and Poor's, the County must fund a cash reserve to replace the surety within twelve months. By September 30, 2009 Collier County was required to fund the reserve in the amount of $19,570,777. The County used internal loans from the County Water and Sewer fund to achieve the required reserve funding. A subsequent refinancing of the Series 2002 Capital Improvement Revenue Bonds decreased the cash reserve requirement. See Note 8, Defeased Debt for more information. The current reserve requirement of $15,717,300 is funded as of September 30, 2011. Interest earned on the reserve is assigned to the funds from which the advances were made and the reserve amount is included in non - current restricted cash, cash equivalents and investments in the Statement of Net Assets. All required principal and interest payments have been made in a timely manner on the Capital Improvement and Revenue Refunding Bonds. During fiscal year 2011, Collier County issued the Series 2010B Special Obligation Revenue Bonds. According to the official statements and County resolutions authorizing the issuance of these bonds, the County has covenanted, subject to certain restrictions and limitations, to appropriate in its annual budget, by amendment, if necessary, from non -ad valorem revenues amounts sufficient to pay the principal and interest on the Series 2010B Bonds. Tax increment revenues and a covenant to budget and appropriate from all legally available CRA non -ad valorem revenues is pledged for the repayment of the Bayshore Gateway Community Redevelopment Agency's taxable note. The average of actual receipts and cash carried forward from the previous year must cover annual debt service requirements by 125%. The agency was in compliance with this covenant for the year ended September 30, 2011. Water and sewer revenue bonds are payable solely from and secured by a first lien upon and pledge of the net revenues and certain other fees and charges derived from operation of the County's water and sewer system. The pledge of net revenues derived by the County from the operation of the system does not constitute a lien upon the system or any other property of the County. The covenants of the resolutions authorizing the County Water and Sewer District Bonds, Series 2009, Series 2006 and 2003B include an obligation for the County to fix, establish and maintain such rates and collect such fees, rentals or other charges for the services and facilities of the water and sewer system, and to revise the same whenever necessary, so as to provide in each year net revenues, as defined in the resolutions authorizing the revenue bonds, which together with system development fees and special assessment proceeds received shall be adequate to pay at least 125% of the annual debt service requirements for the Water and Sewer Bonds; provided, however, that net revenues in each fiscal year shall be adequate to pay at least 100% of the annual debt service for the bonds. In addition, bond covenants require a renewal and replacement amount equal to $300,000 to be set aside in the County Water and Sewer District Funds. The water and sewer funds were in compliance with these covenants for the year ended September 30, 2011. 54 COLLIER COUNTY, FLORIDA NOTES TO THE FINANCIAL STATEMENTS SEPTEMBER 30, 2011 NOTE 6 - LONG -TERM DEBT — CONTINUED RESTRICTIVE COVENANTS - CONTINUED The Collier County Water and Sewer District has several State Revolving Fund loans outstanding with the Florida Department of Environmental Protection. These loans are collateralized by a lien on pledged revenues consisting of net revenues from the operations of the County Water and Sewer System and system development fees. The lien shall be subordinate in all respects to liens placed upon pledged revenues established by bonded indebtedness. The County Water and Sewer District shall maintain rates and charges for services which together with system development fees sufficient to pay 115% of the annual debt service requirements on the loans, as well as satisfy the coverage requirements of all senior debt obligations. The County Water and Sewer District State Revolving funds were in compliance with these covenants for the year ended September 30, 2011. INTEREST CAPITALIZED Interest costs on the long -term debt of business -type activities, including capitalized leases, incurred and capitalized during the year ended September 30, 2011 were as follows: Total Interest Interest Cost Net Interest Cost Incurred Capitalized Expense Business -type Activities $ 9,226,492 $ 357,390 $ 8,869,102 Interest expense is shown as a direct expense of the Business -type Activities. LEASE OBLIGATIONS Capitalized leases payable at September 30, 2011 amounted to $655,870. These obligations, which are collateralized by equipment and vehicles, have total annual installments ranging from $35,231 to $329,825 including interest ranging from 4.26% to 7.21% and mature through 2015. As of year end, equipment leased under capital leases in the Governmental Activities had a historical cost of $1,341,358 and accumulated depreciation of $1,341,358. Equipment leased under capital leases in the Business - type Activities had a historical cost of $1,061,529 and accumulated depreciation of $511,864. Future minimum capital lease obligations as of September 30, 2011 were as follows: lail Governmental Business -type Activities Activities Total 2012 $ 104,821 $ 225,004 $ 329,825 2013 77,920 140,406 218,326 2014 77,920 41,575 119,495 2015 35,231 - 35,231 Total minimum lease payments 295,892 406,985 702,877 Less amount representing interest (26,833) (20,174) (47,007) Present value of minimum lease payments $ 269,059 $ 386,811 $ 655,870 lail COLLIER COUNTY, FLORIDA NOTES TO THE FINANCIAL STATEMENTS SEPTEMBER 30, 2011 NOTE 6 - LONG -TERM DEBT — CONTINUED LEASE OBLIGATIONS — CONTINUED The County also leases office space, office equipment and storage space under operating leases. These leases expire or are cancellable within the next fiscal year. In the normal course of operations these leases will be renewed or replaced by other leases. Total rental expenditures for all operating leases within the governmental activities for the year ended September 30, 2011 were $896,918. Total rental expenditures for all operating leases within business -type activities governmental activities for the year ended September 30, 2011 were $188,172. NOTE 7 - CONDUIT DEBT OBLIGATIONS COMPONENT UNIT CONDUIT DEBT The Industrial Development Authority, Housing Finance Authority, Health Facilities Authority and Educational Facilities Authority, all component units of Collier County, issue debt instruments for the purpose of providing capital financing to independent third parties. Industrial development revenue bonds have been issued to provide financial assistance to public entities for the acquisition and construction of industrial and commercial facilities. Housing revenue bonds have been issued for the purpose of financing the development of multi - family residential rental communities. The health facility revenue bonds were issued to provide financing for the construction of health park facilities. The educational facility revenue bonds were used to provide financing for the construction of educational facilities. These bonds were secured by the financed property, a letter of credit or a corporate guarantee. The primary revenues pledged to pay the debt are those revenues derived from the project or facilities constructed. Neither the issuer, nor the County, is obligated in any manner for repayment of the bonds and as such they are not reported as liabilities in the accompanying financial statements. As of September 30, 2011 the outstanding principal amount payable on all component unit conduit debt was $271,017,446 and is made up of the following: Industrial development revenue bonds $ 71,912,446 Housing finance revenue bonds 46,070,000 Health facilities revenue bonds 82,350,000 Educational facilities revenue bonds 70,685,000 Total $ 271,017,446 56 COLLIER COUNTY, FLORIDA NOTES TO THE FINANCIAL STATEMENTS SEPTEMBER 30, 2011 NOTE 8 - DEFEASED DEBT The County has defeased certain outstanding bonds by placing the proceeds of new bonds in irrevocable trusts to provide for all future debt service payments on the defeased debt. Accordingly, the trust accounts and the defeased bonds are not included in the County's financial statements. At September 30, 2011 the following issues were considered defeased: Original Debt Defeased Bonds Governmental Activities Defeased Outstanding 1986 Capital Improvement Program Revenue Bonds, $ 12,245,000 $ 3,065,000 Sub- Series 5 Mode A 2002 Capital Improvement Revenue Bonds 25,200,000 25,200,000 2003 Capital Improvement and Refunding Revenue Bonds 4,360,000 3,960,000 Total Governmental Activities Defeased Debt $ 41,805,000 $ 32,225,000 Original Debt Defeased Bonds Business -type Activities Defeased Outstanding 1983 County Water and Sewer District Refunding Bonds $ 22,000,000 $ 1,915,000 On November 30, 2010 Collier County issued the Series 2010B Special Obligation Refunding Revenue Bonds in the par amount of $24,620,000. These bonds were issued for the purpose of advance refunding all of the County's outstanding Capital Improvement Revenue Bonds, Series 2002. The final maturity of the bonds is October 1, 2021, with interest rates of 3.00% to 5.00 %. The refunding achieved a net present value savings of 5.41% on the refunded bonds. The refinancing of the Series 2002 Bonds, and their attendant restrictive covenants, caused the required cash reserve surety replacement relating to the Series 2002, 2003 and 2005 bonds to decrease from $19,570,777 to $15,717,300, or $3,853,477. The advance refunding achieved an aggregate debt service savings of $1,915,405 and an economic gain of $1,654,796. The Series 2002 bonds have a redemption date of October 1, 2011. On April 29, 2011 Collier County prepaid the remaining outstanding principal balance of the Series 2008 Conservation Collier Bond of $6,919,328, plus a 3.00% prepayment premium, and achieved an aggregate debt service savings of $131,725. The Series 2008 bonds had an original maturity of January 1, 2013. 57 COLLIER COUNTY, FLORIDA NOTES TO THE FINANCIAL STATEMENTS SEPTEMBER 30, 2011 NOTE 9 — PENSION PLAN OBLIGATIONS RETIREMENT PLAN Substantially all full time and part time employees of the County are eligible to participate in the State of Florida Retirement System (the System), a cost sharing, multiple employer program administered by the State of Florida, Division of Retirement. The System provides two retirement plans from which eligible employees can choose: the Pension Plan (defined benefit) and the Investment Plan (defined contribution). The County follows the provisions of GASB 27, Accounting for Pensions by State and Local Governmental Employers, as described in the following disclosure. PLAN DESCRIPTION Employees hired prior to July 1, 2011 participating in the Pension Plan who retire at or after age 62 with 6 years of credited service for regular risk or with 30 years of service regardless of age, are entitled to a retirement benefit, payable monthly for life, equal to 1.6% for regular employees, 2.0% for senior management, and 3.0% for county elected officials of their final average compensation for each year of credited service; and for special risk, after age 55 with 6 years or with 25 years of service regardless of age, are entitled to a retirement benefit payable monthly for life, up to 3.0% for each year of credited service times their final average compensation. Final average compensation is the employee's average of the five highest years of salary earned during credited service. Vested employees may retire before age 62 for regular risk and 55 for special risk and receive retirement benefits that are reduced 5.0% for each year prior to normal retirement age. Employees hired on July 1, 2011 or later participating in the Pension Plan who retire at or after age 65 with 8 years of credited service for regular risk or with 33 years of service regardless of age, are entitled to a retirement benefit, payable monthly for life, equal to 1.6% for regular employees, 2.0% for senior management, and 3.0% for county elected officials of their final average compensation for each year of credited service; and for special risk, after age 60 with 8 years or with 30 years of service and age 57 or after 30 years of special risk service regardless of age, or after 33 years of any creditable service are entitled to a retirement benefit payable monthly for life. Vested employees may retire before age 65 for regular risk and 60 for special risk and receive retirement benefits that are reduced 5.0% for each year prior to normal retirement age. Employees participating in the investment plan are vested after one year of service with no age requirement. The System also provides death and disability benefits. Benefits are established by Chapter 121, Florida Statutes and Chapter 228, Florida Administrative Code. The Florida Legislature has sole authority to amend benefit provisions. The Deferred Retirement Option Program (DROP) is a program that provides an alternative method for payment of retirement benefits for a specified and limited period for members of the System, effective July 1, 1998. Under this program, the employee may retire and have their benefits accumulate in the Florida Retirement System Trust Fund, earning interest, while continuing to work for a System employer. Employees enrolled in DROP prior to July 1, 2011 earn interest on accumulated benefits in the Trust Fund at 6.5 %; those enrolling on or after July 1, 2011 earn interest at 1.30%. The act of participating in the program does not change the individual employee's employment conditions. 58 COLLIER COUNTY, FLORIDA NOTES TO THE FINANCIAL STATEMENTS SEPTEMBER 30, 2011 NOTE 9 — PENSION PLAN OBLIGATIONS — CONTINUED When the DROP period ends, a maximum of 60 months, employment must be terminated. At the time of termination of employment, the employee will receive payment of the accumulated DROP benefits, and begin receiving their monthly retirement benefit (in the same amount determined at retirement, plus annual cost -of- living increases). The System publishes an annual report that provides ten -year historical trend information regarding progress made in accumulating sufficient assets to pay benefits when due. The report may be obtained by writing the Division of Retirement, Research, Education and Policy Section, 1317 Winewood Boulevard, Tallahassee, Florida 32315 -9000, or by calling (866) 738 -2366, or accessing their internet site at www.dms.mvflorida.com. FUNDING POLICY The County is required to contribute at an actuarially determined rate. Rates from October 1, 2010 through June 30, 2011 were 23.25% for special risk, 18.64% for county elected officials, 14.57% for senior management, 10.77% for regular employees and 12.25% for DROP employees based on covered payroll. The current rates, effective July 1, 2011, are 14.10% for special risk, 11.14% for county elected officials, 6.27% for senior management, 4.91% for regular employees and 4.42% for DROP employees based on covered payroll. In addition, as of July 1, 2011, employee contributions of 3.00% are required of all Pension Plan and Investment Plan members, except for those in DROP. The contributions of the County are established by the State Legislature and therefore subject to amendment. The County's contributions to the System for the years ending September 30, 2011, 2010 and 2009 are represented in the table below. The County's contributions were equal to the required contributions for each year. General Fund Nonmajor Governmental Funds County Water and Sewer Solid Waste Nonmajor Enterprise Funds Internal Service Funds Totals NOTE 10 —TRANSFERS FY -2011 FY -2010 FY -2009 $ 16,291,406 $ 18,869,604 $ 18,878,678 3,763,954 7,058,236 4,697,215 1,502,003 1,640,191 1,574,521 110,698 119,386 113,447 2,405,063 2,637,057 2,570,903 431,678 487,388 217,901 $ 24,504,802 $ 30,811,862 $ 28,052,665 Transfers between funds move unrestricted revenues collected in the General Fund to finance operating and capital programs accounted for in other funds in accordance with budgetary authorizations and to move receipts restricted to debt service from the funds collecting the receipts to the debt service fund as payments become due. 59 COLLIER COUNTY, FLORIDA NOTES TO THE FINANCIAL STATEMENTS SEPTEMBER 30, 2011 NOTE 10 — TRANSFERS — CONTINUED Transfers for the year ended September 30, 2011 were as follows: Transfers from Fund Transfers to Fund Amount Governmental Activities: General Fund 581,166 General Fund Nonmajor Governmental Funds $ 44,781,911 Nonmajor Business -type County Water and Sewer 4,266 Solid Waste Disposal 42,027 Business -type Activities: Nonmajor Business -type 14,215,663 Government Facilities Impact Fee Nonmajor Governmental Funds 4,176,797 Nonmajor Governmental Funds General Fund 4,093,895 Nonmajor Governmental Funds 48,608,190 County Water and Sewer 55,100 Nonmajor Business -type 2,059,353 Business -type Activities: County Water and Sewer General Fund 4,071,929 Solid Waste Disposal General Fund 581,166 County Water and Sewer 1,880,706 Nonmajor Business -type Nonmajor Governmental Funds 3,000 County Water and Sewer 82,200 Business -type Activities: Internal Service Funds General Fund 850,000 Totals $ 125,506,203 NOTE 11— NET ASSETS /FUND BALANCE CLASSIFICATION Net assets represent the difference between total assets and liabilities and are categorized as follows: Invested in capital assets, net of related debt: Total capital assets, net of debt issued in the acquisition of these assets and net of depreciation is reported separately in the net assets section. Restricted for growth related capital expansion: Impact fee and system development charges restricted for growth related capital expansion. Restricted for transportation capital projects: Gas taxes and other revenues restricted for transportation capital improvements. Restricted for tourist development: Tourist development tax proceeds are restricted for tourist related activities. Restricted for Conservation Collier: One quarter mill of ad valorem revenues restricted for the purchase of environmentally sensitive land. Restricted for Grants: State and federal government grant monies restricted for grant related purposes. 60 COLLIER COUNTY, FLORIDA NOTES TO THE FINANCIAL STATEMENTS SEPTEMBER 30, 2011 NOTE 11— NET ASSETS /FUND BALANCE CLASSIFICATION Restricted for debt service: Balances are restricted in conjunction with the issuance of bonds and have been funded by operating transfers from the appropriate funds. The use of monies in the sinking fund is restricted to the payment of principal and interest on long -term debt. Restricted for renewal and replacement: Balance is restricted in conjunction with the issuance of County Water and Sewer District Bonds. The use of monies in the renewal and replacement fund is restricted to funding the cost of additions, replacement or major repair of water and wastewater capital assets. Unrestricted: Balances are not restricted for specific purposes. Governmental funds report fund balances as either spendable or non - spendable. Spendable fund balances are further classified as restricted, committed, assigned or unassigned depending upon the extent to which there are external or internal constraints on the spending of these fund balances. Non - spendable fund balance: Amounts that are not in spendable form or that are legally or contracturally required to be maintained intact. Items that are not spendable also include inventories, prepaid amounts and long term portions of loans and notes receivable, as well as property held for resale. Spendable fund balance: Restricted fund balance — Amounts that can be spent only for specific purposes through restrictions placed upon them by external resource providers such as creditors, grantors or contributors; or imposed by law through constitutional provisions or enabling legislation. Committed fund balance — Amounts that can be spent only for specific purposes determined by the County's highest decision making authority, the Board of County Commissioners. Commitments may be modified or removed only by the Board of County Commissioners through the same formal action that created the original commitment. Assigned fund balance — Amounts that are intended to be spent for specific purposes as determined by the Board of County Commissioners, but that are neither restricted nor committed to the specific purpose. Unassigned fund balance — Unassigned fund balance is the residual classification for the County's general fund. Amounts in this classification are spendable but have not been deemed restricted, committed or assigned. Unassigned fund balance may also include negative balances for any governmental fund whose expenditures have exceeded the amounts restricted, committed or assigned for those specific purposes. When both restricted and unrestricted amount are available the County spends the restricted amounts first, unless prohibited by law, grant agreements or other contractural arrangement. Further, when committed fund balance is available the County will use it first, followed by assigned fund balance and then unassigned fund balance for purposes in which any of the unrestricted fund balance classifications could be used. 61 COLLIER COUNTY, FLORIDA NOTES TO THE FINANCIAL STATEMENTS SEPTEMBER 30, 2011 NOTE 11— NET ASSETS /FUND BALANCE CLASSIFICATION - CONTINUED A detailed schedule of fund balances at September 30, 2011 is as follows: Government Other Total General Facilities Governmental Governmental Fund Impact Fee Funds Funds Nonspendable: Special districts - Advances $ 11,647,325 $ - $ - $ 11,647,325 Inventory 132,251 - - 132,251 Prepaids /deposits 25,623 - - 25,623 Total nonspendable fund balance 11,805,199 - - 11,805,199 Restricted for: Total committed fund balance - - 48,445,097 48,445,097 Community redevelopment - - 16,156,520 16,156,520 Federal and state grants - - 12,202,157 12,202,157 Bond covenants or debt service - - 5,985,773 5,985,773 Growth related capital expansion - - 66,843,919 66,843,919 Transportation capital projects - - 53,189,876 53,189,876 Tourist development - - 39,370,739 39,370,739 Conservation Collier - - 20,950,512 20,950,512 Emergency 911 - - 3,424,610 3,424,610 Public safety - - 4,124,838 4,124,838 Court functions - - 3,657,764 3,657,764 Public Records Modernization - - 3,622,745 3,622,745 Other purposes - - 16,066 16,066 Total restricted fund balance - - 229,545,519 229,545,519 Committed for: Special districts - - 35,811,389 35,811,389 Community development - - 5,120,520 5,120,520 Natural resource management - - 2,885,756 2,885,756 Utility regulation - - 721,997 721,997 Libraries - - 608,159 608,159 Other purposes - - 3,297,276 3,297,276 Total committed fund balance - - 48,445,097 48,445,097 Assigned for: Transportation operations - - 2,275,972 2,275,972 Parks and recreation - - 14,695,768 14,695,768 General buildings and improvements - - 48,768,382 48,768,382 Water management - - 10,115,960 10,115,960 Libraries - - 425,060 425,060 Court functions - - 343,683 343,683 Federal and state grants 81,160 - - 81,160 Other purposes 1,032,956 - 2,931,108 3,964,064 Total assigned fund balance 1,114,116 - 79,555,933 80,670,049 Unassigned: 54,458,662 (16,289,984) (23,967,715) 14,200,963 Total Fund Balances $ 67,377,977 $ (16,289,984) $ 333,578,834 $ 384,666,827 62 COLLIER COUNTY, FLORIDA NOTES TO THE FINANCIAL STATEMENTS SEPTEMBER 30, 2011 NOTE 12 - RISK MANAGEMENT The County is exposed to various risks of loss related to tort; theft of, damage to and destruction of assets; errors and omissions; injuries to employees and natural disasters. A self- insurance internal service fund is maintained by the County to administer insurance activities relating to workers' compensation, health and property and casualty, which covers general, property, auto, public official and crime liabilities. The County self insurance program covers operations of the Board and the constitutional officers, except for the Sheriff. Under these programs, the self- insurance fund provides coverage up to a maximum amount for each claim. The County purchases commercial insurance for claims in excess of coverage provided by the self- insurance fund and for all other covered risks of loss. Claim Type Property and casualty claims Auto liability claims Employee health claims Workers' compensation claims County's Coverage $50,000 - $500,000 (5% Named Storm) $200,000 $275,000 $500,000 Excess Carrier's Coverage $50,000 - $125,000,000 $200,000 - $1,000,000 $275,000 - Unlimited $500,000 - Statutory Settled claims have not exceeded the insurance provided by third party carriers in any of the past three years. All divisions of the County, excluding the Sheriff, participate in this program. Charges to operating departments are based upon amounts believed by management to meet the required annual payouts during the fiscal year and to pay for the estimated operating costs of the programs. For the fiscal year ended September 30, 2011 the operating departments were charged $33,481,410 for workers' compensation, health and property and casualty self - insurance programs. The claims loss reserve for workers' compensation, health and property and casualty of $5,391,499 reported at September 30, 2011 was calculated by third party actuaries based upon GASB Statement 30, Risk Financing Omnibus, which requires that a liability for claims be reported when it is probable that a loss has been incurred and the amount of that loss can be reasonably estimated. The estimated liabilities for unpaid losses related to workers' compensation and property and casualty were discounted at 3.5%. It should be noted that the discount rate is an estimate based on the expected rate of return over extended periods. The estimated liabilities for unpaid losses related to health were not discounted as their turnover period is much shorter. Claims loss reserves of $3,463,175 are recorded as current liabilities. The Sheriff participates in the Statewide Florida Sheriff's Self- Insurance Fund for its professional liability insurance. The fund is managed by representatives of the participating Sheriff offices and provides professional liability insurance to participating Sheriff agencies. The Florida Sheriff's Self- Insurance Fund provides liability insurance coverage subject to the following limitations: $3,100,000 for any claim involving a single individual, $3,200,000 for any one incident or occurrence and $10,000,000 for an annual aggregate per member. The Sheriff also participates in the Statewide Florida Sheriff's Self - insurance Fund program for workers' compensation coverage. The Florida Sheriff's Association Workers' Compensation Insurance Trust (FSAWIT) is a limited self- insurance fund providing coverage for the first $350,000 of every claim. Re- insurance is provided through a third party insurer for all claims exceeding $350,000 up to $10,000,000. 63 COLLIER COUNTY, FLORIDA NOTES TO THE FINANCIAL STATEMENTS SEPTEMBER 30, 2011 NOTE 12 - RISK MANAGEMENT - CONTINUED Settled claims have not exceeded the insurance provided by third party carriers in any of the past three years. Premiums charged to participating Sheriffs are based upon amounts believed by Fund management to meet the estimated annual payouts during the fiscal year and to pay for the estimated operating costs of the program. All liabilities associated with these self- insured risks are reported in the basic financial statements of the Statewide Florida Sheriff's Self- Insurance Fund. The Sheriff cannot be additionally assessed for claims paid by the program. The Sheriff has also established a self- funded employee health plan. An internal service fund is used to account for the activities of the plan. Excess coverage has been purchased which provides specific claim excess coverage for any one incident exceeding $200,000 up to $1,000,000. Payments to the internal service fund are based on actuarial estimates of amounts needed to pay prior year and current year claims including claims incurred but not yet reported. The claims loss reserve for health of $2,251,000 reported at September 30, 2011 was calculated by third party actuaries based upon GASB Statement 30, Risk Financing Omnibus which requires that a liability for claims be reported when it is probable that a loss has been incurred and the amount of that loss can be reasonably estimated. The entire Sheriff's health claim loss reserve is recorded as a current liability. CHANGES IN SELF - INSURANCE CLAIMS PAYABLE Changes in the self - insurance claims payable for fiscal years 2010 and 2011 were as follows for the County and Sheriff self- insurance programs: Balance at September 30, 2009 Current year claims incurred and changes in estimates Claim payments Balance at September 30, 2010 Current year claims incurred and changes in estimates Claim payments Balance at September 30, 2011 Property and Group Workers' Casualty Health Compensation Total $ 2,031,000 $ 5,274,000 $ 2,024,000 $ 9,329,000 303,958 43,710,123 318,880 44,332,961 (955,958) (43,583,123) (513,880) (45,052,961) 1,379,000 5,401,000 1,829,000 8,609,000 846,772 43,216,238 (703,435) 43,359,575 (700,920) (43,076,238) (548,918) (44,326,076) $ 1,524,852 $ 5,541,000 $ 576,647 $ 7,642,499 64 COLLIER COUNTY, FLORIDA NOTES TO THE FINANCIAL STATEMENTS SEPTEMBER 30, 2011 NOTE 13 — OTHER POSTEMPLOYMENT BENEFITS Plan Description - The Board and the Tax Collector administer a single - employer defined benefit plan (OPEB Plan) and can amend the benefit provisions. The Board offers an OPEB Plan that subsidizes the cost of health care for its retirees who have at least 60% of eligible accrued sick leave remaining at the time of retirement and have completed 15 years of continuous service with the Board. In addition, the retiree must retire from the County, be at least 55 years of age or have completed 30 years of service under the Florida Retirement System (FRS) and be eligible to receive an FRS benefit with no break in time. Such employees are eligible to receive a 50% to 100% subsidy toward the cost of coverage under the active plan. A subsidy is currently provided to six retirees. The Tax Collector offers an OPEB plan that subsidizes 100% the cost of health care for employees with 10 years of service, between the ages of 54 and 64 and who exchange 800 hours of sick leave at retirement. Additionally, in accordance with Florida Statute 112.0801, County employees who retire and immediately begin receiving benefits from the FRS have the option of paying premiums to continue in the County's health insurance plan at the same group rate as for active employees. The plan does not issue a publicly available financial report. In 2011 Board employees meeting certain eligibility requirements were offered access to a Voluntary Separation Incentive Program (VSIP). The requirements for eligibility were that the employee had to be eligible to retire without penalty under FRS. Eligible employees had three options under VSIP. Option 1: Medical and dental coverage for a period of three years, with employee enrollment in the plans as of the date the election is made. If the employee has waived coverage, the employee will be enrolled in the $500 deductible medical plan and basic dental plan at the single coverage level. The Board will cover costs including both the employer and employee portions of the medical and dental premiums during the coverage period. Option 2: Employee receives a cash incentive in lieu of three years of medical and dental benefits. The employee will receive a cash payment equivalent to 50% of the average value of three years' medical and dental plan premiums, less applicable payroll taxes. Option 3: Employee receives medical and dental benefits until they reach age 65 with a cash incentive for remaining months under the plan. The employee is enrolled in the plans as of the date the election is made. If the employee has waived coverage, the employee will be enrolled in the $500 deductible medical plan and basic dental plan at the single coverage level. The Board will cover costs including both the employer and employee portions of the medical and dental premiums during the coverage period. As of the first of the month following the date when an employee reaches age 65, the employee will be entitled to receive a one -time cash payment equivalent to 50% of the average monthly value of the medical and dental plan premiums, less applicable payroll taxes, for the remaining months in which the employee is eligible to participate under the plan. The cash incentive payments offered under the Voluntary Separation Incentive Program are considered pension benefits and are not included in the calculation of the OBEP liability. 65 COLLIER COUNTY, FLORIDA NOTES TO THE FINANCIAL STATEMENTS SEPTEMBER 30, 2011 NOTE 13 — OTHER POSTEMPLOYMENT BENEFITS — CONTINUED At September 30, 2011, the date of the latest actuarial valuation, County plan participation consisted of: OPEB plan participants 2,054 Retirees receiving benefits 122 Funding Policy - The County has the authority to establish and amend funding policy. For the year ended September 30, 2011, the County contributed $508,627 to the OPEB Plan. No trust or agency fund has been established for the plan. Annual OPEB Cost and Net OPEB Obligation - The annual cost of the County's OPEB Plan is calculated based on the Annual Required Contribution (ARC), an amount actuarially determined in accordance with the parameters of GASB Statement No. 45. The ARC represents a level of funding that, if paid on an ongoing basis, is projected to cover the normal cost each year and amortize any unfunded actuarial liability over a period not to exceed 30 years. The following table shows the components of the County's annual OPEB Plan cost for the year, the amount actually contributed, and the changes in the net OPEB Plan obligation. Annual required contribution (ARC) Interest on net OPEB obligation Adjustment to ARC Annual OPEB cost Contributions made Increase (decrease) in net OPEB obligation Net OPEB obligation - beginning of year Net OPEB obligation - end of year Fiscal Year Fiscal Year Fiscal Year 2011 2010 2009 $ 662,704 $ 661,962 $ 661,962 10,651 10,651 6,839 (17,585) (17,585) (11,293) 655,770 655,028 657,508 (508,627) (719,310) (658,599) 147,143 (64,282) (1,091) 290,738 355,020 356,111 $ 437,881 $ 290,738 $ 355,020 Funded Status and Funding Progress - The contributions made for the 2011 fiscal year were 78% of the annual OPEB cost. As of the September 30, 2010 actuarial valuation date the OPEB Plan was 0.0% funded and the actuarial accrued liability for benefits was $5,825,874, and the actuarial value of plan assets was $0, resulting in an unfunded actuarial accrued liability (UAAL) of $5,825,874. As of the September 30, 2011 actuarial valuation date the OPEB Plan was 0.0% funded and the actuarial accrued liability for benefits was $6,564,292, and the actuarial value of plan assets was $0, resulting in a UAAL of $6,564,292. The covered payroll (annual payroll of active employees covered by the OPEB Plan) was $155.4 million, and the ratio of the UAAL to the covered payroll was 4.2 %. Actuarial Methods and Assumptions - Actuarial valuations of an ongoing plan involve estimates of the value of reported amounts and assumptions about the probability of occurrence of events far into the future. Examples include assumptions about future employment, mortality, and the healthcare cost trend. Amounts determined regarding the funded status of the plan and the annual required contributions of the employer are subject to continual revision as actual results are compared with past expectations and new estimates are made about the future. 66 COLLIER COUNTY, FLORIDA NOTES TO THE FINANCIAL STATEMENTS SEPTEMBER 30, 2011 NOTE 13 — OTHER POSTEMPLOYMENT BENEFITS - CONTINUED Calculations for financial reporting purposes are based on the benefits provided under terms of the plan as understood by the employer and the plan members in effect at the time of each valuation and on the pattern of sharing of costs between the employer and plan members to that point. The projection of benefits for financial reporting purposes does not explicitly incorporate the potential effects of legal or contractual funding limitations on the pattern of cost sharing between the employer and plan members in the future. Actuarial calculations reflect a long -term perspective. Consistent with that perspective, actuarial methods and assumptions used include techniques that are designed to reduce the effects of short-term volatility in actuarial accrued liabilities and the actuarial value of assets. The actuarial methods and assumptions are: Actuarial cost method Amortization method Amortization period Investment rate of return Discount rate Healthcare cost trend rate Projected Unit Credit Actuarial Cost Level Dollar Amount 30 years, Closed 3% 3% 8% for the 2012 fiscal year grading to an ultimate rate of 5% for the 2018 fiscal year Plan Description - The Sheriff administers a single - employer defined benefit plan (OPEB Plan) and can amend the benefit provisions. The Sheriff offers an OPEB Plan that subsidizes the cost of health care for its retirees who have 6 years of creditable service with the Sheriff and who receive a monthly retirement benefit from the Florida Retirement System. The Sheriff subsidizes approximately 20% for single coverage and 21% for family coverage for qualifying individuals. Additionally, in accordance with Florida Statute 112.0801, Sheriff's employees who retire and immediately begin receiving benefits from the FRS have the option of paying premiums to continue in the Sheriffs health insurance plan at the same group rate as for active employees. The plan does not issue a publicly available financial report. At September 30, 2011, the date of the latest actuarial valuation, Sheriff plan participation consisted of: OPEB plan participants 1,188 Retirees receiving benefits 99 Fundine Policy - The Sheriff has the authority to establish and amend funding policy. For the year ended September 30, 2011, the Sheriff contributed $1,084,368 to the OPEB Plan. No trust or agency fund has been established for the plan. Annual OPEB Cost and Net OPEB Obligation - The annual cost of the Sheriff's OPEB Plan is calculated based on the Annual Required Contribution (ARC), an amount actuarially determined in accordance with the parameters of GASB Statement No. 45. The ARC represents a level of funding that, if paid on an ongoing basis, is projected to cover the normal cost each year and amortize any unfunded actuarial liability over a period not to exceed 30 years. The following table shows the components of the Sheriff's annual OPEB Plan cost for the year, the amount actually contributed, and the changes in the net OPEB Plan obligation. 67 COLLIER COUNTY, FLORIDA NOTES TO THE FINANCIAL STATEMENTS SEPTEMBER 30, 2011 NOTE 13 — OTHER POSTEMPLOYMENT BENEFITS — CONTINUED Annual required contribution (ARC) Interest on net OPEB obligation Adjustment to ARC Annual OPEB cost Contributions made Increase in net OPEB obligation Net OPEB obligation - beginning of year Net OPEB obligation - end of year Fiscal Year Fiscal Year Fiscal Year 2011 2010 2009 $ 1,117,938 $ 1,108,742 $ 1,363,461 33,881 30,794 16,496 (55,941) (50,844) (27,236) 1,095,878 1,088,692 1,352,721 (1,084,368) (985,790) (876,138) 11,510 102,902 476,583 1,129,353 1,026,451 549,868 $ 1,140,863 $ 1,129,353 $ 1,026,451 Funded Status and Funding Progress - The contributions made for the 2011 fiscal year were 91% of the annual OPEB cost. As of the September 30, 2010 actuarial valuation date, the OPEB Plan was 0.0% funded, the actuarial accrued liability for benefits was $12,148,033, and the actuarial value of assets was $0, resulting in an unfunded actuarial accrued liability (UAAL) of $12,148,033. As of the September 30, 2011 actuarial valuation date, the OPEB Plan was 0.0% funded, the actuarial accrued liability for benefits was $12,018,242, and the actuarial value of assets was $0, resulting in a UAAL of $12,018,242. The covered payroll (annual payroll of active employees covered by the OPEB Plan) was $114.2 million, and the ratio of the UAAL to the covered payroll was 10.5 %. Actuarial Methods and Assumptions - Actuarial valuations of an ongoing plan involve estimates of the value of reported amounts and assumptions about the probability of occurrence of events far into the future. Examples include assumptions about future employment, mortality, and the healthcare cost trend. Amounts determined regarding the funded status of the plan and the annual required contributions of the employer are subject to continual revision as actual results are compared with past expectations and new estimates are made about the future. Calculations for financial reporting purposes are based on the benefits provided under terms of the plan as understood by the employer and the plan members in effect at the time of each valuation and on the pattern of sharing of costs between the employer and plan members to that point. The projection of benefits for financial reporting purposes does not explicitly incorporate the potential effects of legal or contractual funding limitations on the pattern of cost sharing between the employer and plan members in the future. Actuarial calculations reflect a long -term perspective. Consistent with that perspective, actuarial methods and assumptions used include techniques that are designed to reduce the effects of short-term volatility in actuarial accrued liabilities and the actuarial value of assets. The actuarial methods and assumptions are: Actuarial cost method Amortization method Amortization period Investment rate of return Discount rate Healthcare cost trend rate Projected Unit Credit Actuarial Cost Level Dollar Amount 30 years, Closed 3% 3% 10% for the 2011 fiscal year grading to an ultimate rate of 5% for the 2021 fiscal year 68 COLLIER COUNTY, FLORIDA NOTES TO THE FINANCIAL STATEMENTS SEPTEMBER 30, 2011 NOTE 14 — LANDFILL LIABILITY On May 1, 1995 the County entered into a landfill operating agreement with a third party for the privatization of the County's landfill operations. Under the contract, the third party is responsible for the daily operations, capital improvements, closure, postclosure and financial assurance requirements of the active cells within the Naples and Immokalee landfill sites. Collier County is responsible for the postclosure costs relating to portions of the Naples and Immokalee landfill sites. None of the cells that Collier County is responsible for has accepted waste since December 1989. The County is also responsible for staffing and operating the scale house at each site. In accordance with U.S. Environmental Protection Agency rule Solid Waste Disposal and Facility Criteria and GASB Statement 18, Accounting for Municipal Solid Waste Landfill Closure and Postclosure Care Costs, a liability has been established representing amounts estimated to be spent on postclosure relating to cells for which Collier County is responsible. The County's estimated liability in connection with the landfills is included in the proprietary funds statement of net assets. The landfill liability will be reassessed on an annual basis, and any increase due to inflation, changes in technology or additional postclosure care requirements will be recorded as a current cost. The County has funded an escrow account with Fifth Third Bank in the amount of $11,532, as of September 30, 2011, to comply with Rule 62- 701.630, Florida Administrative Code for the inactive Eustis Avenue Landfill site. These funds bear interest and are restricted for the exclusive use of the Eustis Avenue Landfill site's long -term care. There were no deposits, other than interest, or withdrawals from this account in fiscal year 2011. NOTE 15 - SIGNIFICANT CONTINGENCIES LITIGATION The County is involved as defendant or plaintiff in certain litigation and claims arising in the ordinary course of operations. In the opinion of County legal counsel, the range of potential recoveries or liabilities, other than as disclosed here, will not materially affect the financial position of the County. During fiscal year 2010, the Collier County Water -Sewer District recorded an impairment of the value of its South Reverse Osmosis Raw Water Wellfield due to the failure of a raw water transmission pipeline. The pipeline was less than one year into its service life at the time of the failure. On November 19, 2010, the Water -Sewer District, through outside counsel, filed suit against the project's contractor and surety. Damages sought by the Water -Sewer District in this action are currently estimated at $9,000,000. Pending litigation involving the Clerk of the Circuit Court and the Board of County Commissioners regarding the role of the Clerk of the Circuit Court as County Auditor ended on November 10, 2010 when the Florida Supreme Court dismissed the request for review of the appeals court decision filed by the Board of County Commissioners. 69 COLLIER COUNTY, FLORIDA NOTES TO THE FINANCIAL STATEMENTS SEPTEMBER 30, 2011 NOTE 15 - SIGNIFICANT CONTINGENCIES — CONTINUED STATE AND FEDERAL GRANTS Grant monies received and disbursed by the County are for specific purposes and are subject to review by the grantor agencies. Such audits may result in requests for reimbursement due to disallowed expenditures. Based upon prior experience, the County does not believe that such disallowances, if any, would have a material effect on the financial position of the County. Subsequent to the end of the fiscal year, the Clerk's office became aware of an inquiry being conducted by one of the grantor agencies. The impact to the financial statements, if any, is unknown and therefore unable to be calculated at this time. ARBITRAGE REBATE In accordance with the Tax Reform Act of 1986, any interest earnings on borrowed construction funds in excess of the interest costs incurred are required to be rebated to the federal government. There was no arbitrage rebate liability as of September 30, 2011. NOTE 16 - SIGNIFICANT COMMITMENTS Collier County has active construction projects as of September 30, 2011. The projects include road construction, governmental facilities and utilities improvements. At year end the County's commitments with contractors includes the following: Business -type Activities: Water and Sewer Utilities 14,826,587 Solid Waste Disposal Landfill 1,106,686 Other Enterprise Funds Mass Transit 1,375,955 Airports 3,627,099 Total $ 60,292,951 70 Construction Category Commitments Governmental Activities: General Fund General Government $ 164,604 Other Governmental Funds General Government 1,215,860 Public Safety 1,518,565 Physical Environment 1,774,331 Transportation 32,147,041 Culture and Recreation 2,536,223 Business -type Activities: Water and Sewer Utilities 14,826,587 Solid Waste Disposal Landfill 1,106,686 Other Enterprise Funds Mass Transit 1,375,955 Airports 3,627,099 Total $ 60,292,951 70 COLLIER COUNTY, FLORIDA NOTES TO THE FINANCIAL STATEMENTS SEPTEMBER 30, 2011 NOTE 16 - SIGNIFICANT COMMITMENTS - CONTINUED Encumbrances represent commitments for future expenditures, based on purchase orders or contracts issued, where the goods or services have been order but not received. Encumbrance commitments do not include construction contracts, as they are included as contract commitments. Collier County has the following encumbrances as of September 30, 2011: Business -type Activities: Water and Sewer Utilities Encumbrance Solid Waste Disposal Category Commitments Governmental Activities: Emergency Medical Services 16,420 General Fund General Government $ 854,865 Total Public Safety 2,414 Human Services 4,380 Internal Service Funds Culture and Recreation 6,693 Government Facilities Impact Fee General Government 21,276 Public Safety 5,980 Other Governmental Funds General Government 873,020 Public Services 613,836 Physical Environment 1,321,426 Transportation 3,419,475 Economic Environment 5,545,083 Human Services 1,476,434 Culture and Recreation 888,721 Business -type Activities: Water and Sewer Utilities 4,460,705 Solid Waste Disposal Landfill 956,534 Other Enterprise Funds Emergency Medical Services 16,420 (1,844,875) Goodland Water 9,300 Total Airport Authority 49,983 Collier Area Transit 36,967 Internal Service Funds Risk Management 934,793 Total $ 21,498,305 NOTE 17 — FUND DEFICITS The following funds had fund balance deficits at September 30, 2011: Fund Amount Government Facilities Impact Fee $ (16,289,984) County -Wide Library Impact Fee (7,068,976) Correctional Facilities Impact Fee (2,254,910) Emergency Medical Service Impact Fee (1,844,875) Law Enforcement Impact Fee (12,798,954) Total $ (40,257,699) The fund balance deficits are primarily the result of advances from other funds made prior to September 30, 2011. These advances were recorded to ensure repayment of non - impact fee monies loaned to the impact fee fund for the construction of growth necessitated facilities. County management anticipates that the deficits will be covered by future years' impact fee revenues. 71 COLLIER COUNTY, FLORIDA NOTES TO THE FINANCIAL STATEMENTS SEPTEMBER 30, 2011 NOTE 18 — SUBSEQUENT EVENTS BOND REFINANCING On January 9, 2012 Collier County issued the Series 2011 Special Obligation Refunding Revenue Bonds in the par amount of $92,295,000. These bonds were issued for the purpose of advance refunding portions of the County's outstanding Capital Improvement and Refunding Revenue Bonds, Series 2003 and 2005. The final maturity of the Series 2011 bonds is October 1, 2029, with interest rates of 2.50% to 5.00%. The advanced refunding achieved a net present value savings of 5.05% on the refunded bonds and an aggregate debt service savings of $8,971,452. The refinancing of the Series 2003 and 2005 Bonds, and their attendant restrictive covenants, caused the required cash reserve surety replacement relating to the Series 2003 and 2005 bonds to decrease from $15,717,300 to $10,401,506, or $5,315,794. The Series 2003 and 2005 bonds have redemption dates of October 1, 2013 and October 1, 2014, respectively. UTILITY BILLING Subsequent to fiscal year end, management became aware of certain County Water and Sewer meter discrepancies. The discrepancies are primarily related to a series of two inch water meters that may be reading incorrectly. These issues were discovered during a consultant's comprehensive review of County Water and Sewer District billing processes and current estimates are that 300 meters, out of a population of approximately 56,000, may be subject to reading high or low to actual usage. Meters found to be under and over reading are being replaced immediately and potential product liability issues are being analyzed. The consultant and staffs review is ongoing and is expected to be completed during fiscal year 2012. 72 REQUIRED SUPPLEMENTARY INFORMATION REQUIRED SUPPLEMENTAL INFORMATION COLLIER COUNTY, FLORIDA OTHER POSTEMPLOYMENT BENEFITS SCHEDULE OF FUNDING PROGRESS FOR THE RETIREE HEALTH PLAN (Non - Sheriff) Sheriff 10/1/2008 Actuarial 9,354,088 0.0% 128,182,544 7.3% Sheriff 10/1/2009 Accrued 14,171,709 0.0% 123,296,677 UAAL as a Sheriff Actuarial Actuarial Liability (AAL) - 12,148,033 0.0% 117,879,632 Percentage of Sheriff Valuation Value of Unit Credit Unfunded Funded Covered Covered Agency Date Assets Actuarial Cost AAL (UAAL) Ratio Payroll Payroll Board and Constitutionals 10/1/2008 3,769,254 3,769,254 0.0% 173,538,752 2.2% (Non - Sheriff) Board and Constitutionals 10/1/2009 5,814,470 5,814,470 0.0% 164,923,591 3.5% (Non - Sheriff) Board and Constitutionals 10/1/2010 - 5,825,874 5,825,874 0.0% 159,321,900 3.7% (Non - Sheriff) Board and Constitutionals 10/1/2011 6,564,292 6,564,292 0.0% 155,365,190 4.2% (Non - Sheriff) Sheriff 10/1/2008 9,354,088 9,354,088 0.0% 128,182,544 7.3% Sheriff 10/1/2009 14,171,709 14,171,709 0.0% 123,296,677 11.5% Sheriff 10/1/2010 12,148,033 12,148,033 0.0% 117,879,632 10.3% Sheriff 10/1/2011 12,018,242 12,018,242 0.0% 114,185,572 10.5% 74 COMBINING AND INDIVIDUAL FUND FINANCIAL STATEMENTS THIS PAGE INTENTIONALLY LEFT BLANK Nonmajor Governmental Funds Special Revenue Funds ROAD DISTRICTS — To account for taxes levied and expenditures to carry on all work on roads and bridges in the County except that provided for in capital project funds. COMMUNITY REDEVELOPMENT AGENCY — To account for the activities of the Immokalee Community Redevelopment Agency and the Bayshore- Gateway Triangle Community Redevelopment Agency. UNINCORPORATED AREA MUNICIPAL SERVICES TAXING DISTRICT — To account for revenues derived from and expanded for the benefit of the unincorporated areas of the County. COMMUNITY DEVELOPMENT —To account for building permit and development fees to support licensing, permitting and inspection services. WATER MANAGEMENT AND POLLUTION CONTROL — To account for taxes levied County-wide to provide water resource management and water pollution control. GRANTS AND SHARED REVENUES — To account for the revenues received from federal, state and local grants. IMPROVEMENT DISTRICTS — To account for taxes levied within municipal service taxing districts to provide for specified improvements and /or the maintenance of such improvements. FIRE CONTROL DISTRICTS — To account for taxes levied within municipal service taxing districts for fire prevention and control. — To account for taxes levied within municipal service taxing district for street lighting. 911 ENHANCEMENT FEE — To account for fees levied on each telephone access line in the County for the enhancement of the 911 emergency telephone system. PUBLIC RECORDS MODERNIZATION — To account for the statutory surcharge on recording documents to be paid to the Clerk of the Circuit Court for the modernization of the Clerk's official records management system. TOURIST DEVELOPMENT— To account for the 4% tourist development tax. STATE HOUSING INITIATIVE PARTNERSHIP —To account for state revenues received to provide affordable residential housing for very low to moderate income persons and those who have special housing needs. 800 MHZ INTERGOVERNMENTAL RADIO COMMUNICATIONS PROGRAM FUND — To account for moving traffic violation surcharges received to fund the County's intergovernmental radio communications program. STATE COURT ADMINISTRATION —To account for County monies used to fund the operation of the court system. — To account for the accumulation and expenditure of proceeds from the sale of property confiscated by the Sheriff. GAC LAND SALES, ROADS AND CANALS — To account for principal and settlement fees received from a 1977 settlement with GAC Properties, Inc., and interest thereon to be expended for the restoration and maintenance of roads, facilities and drainage improvements in the Golden Gate Estates area. UTILITY FEE — To account for fees to be used to effectively and efficiently regulate private water and wastewater utilities operating within the unincorporated areas of Collier County and the City of Marco Island. CONSERVATION COLLIER —To account for the acquisition and management of environmentally sensitive lands. IMPACT FEE ESCROW —To account for impact fees relating to certain projects under construction until permits are issued. COURT INFORMATION TECHNOLOGY — To account for the accumulation of resources to enhance and increase access to court information. COURT SERVICES — To account for the accumulation of revenues associated with the function of the local court system. UNIVERSITY EXTENSION — To account for fund accumulation to meet the educational goals of the Collier County OF /IFAS extension. COURT FACILITIES FEE — To account for the accumulation of resources to improve court facilities. AFFORDABLE HOUSING — To account for fees to be used to provide for affordable housing related projects. OTHER SPECIAL REVENUE FUNDS —To account for the accumulation of resources for the following programs: Miscellaneous Florida Statutes Fee Collections Adoption Awareness Teen Court Animal Control Public Library Law Library Inmate Welfare County Drug Abuse Law Enforcement Training Debt Service Funds Euclid and Lakeland Assessment Legal Aid Society Federal Equitable Sharing Domestic Violence Juvenile Assessment Center Driver Education Crime Prevention Freedom Memorial GAS TAX REVENUE BONDS — To account for the accumulation of resources and payments of interest and principal on the Series 2003 and 2005 Gas Tax Bonds. CAPITAL IMPROVEMENT REVENUE BONDS — To account for the accumulation of resources, surety reserve and payment of interest and principal on the Series 2002, 2003 and 2005 Bonds. POOLED COMMERCIAL PAPER PROGRAM — To account for the accumulation of resources and payment of interest and principal on the variable rate commercial paper loan program. CARIBBEAN GARDENS LOAN — To account for the accumulation of resources and payment of interest and principal on the variable rate commercial paper incurred in the acquisition of Caribbean Gardens. STORMWATER IMPROVEMENT ASSESSMENT BONDS — To account for the accumulation of resources and payment of interest and principal on special assessment debt incurred in the Naples Park area. LIMITED GENERAL OBLIGATION BONDS CONSERVATION COLLIER — To account for the accumulation of resources and payment of interest and principal on long -term debt incurred for the acquisition of environmentally sensitive lands. COMMUNITY REDEVELOPMENT TAXABLE NOTE — To account for the accumulation of resources and payment of interest and principal on taxable long -term debt incurred for the acquisition of land in the Bayshore /Gateway Community Redevelopment Agency. FOREST LAKES LIMITED GENERAL OBLIGATION BONDS — To account for the accumulation of resources and payment of interest and principal on long -term debt incurred on the Forest Lakes Limited General Obligation Bonds. SPECIAL OBLIGATION REVENUE BONDS — To account for the accumulation of resources and payment of interest and principal on long -term debt incurred in the refinancing of various outstanding variable rate commercial paper loans. Capital Project Funds COUNTY -WIDE CAPITAL IMPROVEMENTS — To account for capital projects, designated by the Board of County Commissioners, to be funded by a County -wide one third mil levy. PARKS IMPROVEMENTS — To account for the expenditure of funds raised specifically for improvements to parks. Projects include land acquisition, design, construction and equipping of certain Community Park sites in the unincorporated areas of the County. Primary funding is ad valorem taxes. COUNTY -WIDE LIBRARY IMPACT FEES — To account for the receipt and expenditure of library impact fees collected from all qualifying new construction. These impact fees must be used for acquisition of County -wide library facilities. CORRECTIONAL FACILITIES IMPACT FEES — To account for the receipt and expenditure of correctional facilities impact fees collected from all qualifying new construction. The impact fee must be used for the acquisition /construction of correctional facilities. EMERGENCY MEDICAL SERVICES IMPACT FEES — To account for the receipt and expenditure of emergency medical service impact fees collected from all qualifying new construction. The impact fees must be used for acquisition /construction of emergency service facilities. WATER MANAGEMENT — To account for the receipt and expenditure of funds raised specifically for water management purposes. Primary funding is ad valorem taxes. PARKS IMPACT DISTRICTS — To account for the receipt and expenditure of parks impact fees collected from all qualifying new construction. The impact fees must be used for the acquisition /construction of park facilities. ROAD IMPACT DISTRICTS — To account for the receipt and expenditure of road impact fees collected from all qualifying new construction. The impact fees must be used for the acquisition /construction of roads. ROAD CONSTRUCTION — To account for the receipt and expenditure of gas taxes. Projects include, but are not limited to, right -of -way acquisition, design and construction of various transportation improvements. LAW ENFORCEMENT IMPACT FEES — To account for the receipt and expenditure of law enforcement impact fees collected from all qualifying new construction. The impact fee must be used for the acquisition /construction of law enforcement related facilities. OTHER CAPITAL PROJECTS — To account for major capital expenditure financed from resources other than proceeds from the issuance of long -term debt and the one third mil levy. COLLIER COUNTY, FLORIDA COMBINING BALANCE SHEET NONMAJOR GOVERNMENTAL FUNDS SEPTEMBER 30, 2011 See accompanying independent auditor's report 80 Special Revenue Funds Community Road Redevelopment Unincorporated Community Districts Agency Area MSTD Development ASSETS Cash, cash equivalents and investments $ 2,463,773 $ 2,653,626 $ 9,984,110 $ 7,198,544 Receivables: Interest 3,391 3,319 14,972 7,102 Trade, net 22,110 - 221,010 80,558 Notes - - - Special assessments - - Due from other funds - 79,673 321,712 - Due from other governments 179,657 - 436,757 44,524 Inventory for resale - 13,504,134 - - Advances to other funds - Prepaid costs - - - - Total assets $ 2,668,931 $ 16,240,752 $ 10,978,561 $ 7,330,728 LIABILITIES AND FUND BALANCES Liabilities: Accounts payable 247,349 50,464 958,943 93,626 Wages payable 145,500 14,330 210,544 114,536 Due to other funds 20 18,178 16,495 527 Due to other governments 50 1,260 2,724 787,903 Due to individuals - - - 1,831 Deferred revenues 40 - - Refundable deposits - 1,850 61,785 Retainage payable - - Advances from other funds - - - 1,150,000 Total liabilities 392,959 84,232 1,190,556 2,210,208 Fund balances (deficits): Restricted - 16,156,520 - - Committed - - 9,788,005 5,120,520 Assigned 2,275,972 - - Unassigned - - - - Total fund balances (deficits) 2,275,972 16,156,520 9,788,005 5,120,520 Total liabilities and fund balances $ 2,668,931 $ 16,240,752 $ 10,978,561 $ 7,330,728 See accompanying independent auditor's report 80 Special Revenue Funds Water Management Grants and Fire 911 and Pollution Shared Improvement Control Lighting Enhancement Control Revenues Districts Districts Districts Fee $ 2,834,076 $ 7,587,020 $ 26,237,900 $ 775,116 $ 266,495 $ 3,563,827 3,646 5,828 29,589 1,291 422 4,326 155 25,945 1,184 56 10,454 - - 219,000 - - - 40,666 118,346 34,762 28,842 7,359 - 100,836 3,619,125 - - - 150,957 - 4,544,266 - $ 2,979,379 $ 16,119,530 $ 26,303,435 $ 805,305 $ 284,730 $ 3,719,110 52,955 934,375 1,112,798 6,329 38,413 - 40,668 21,030 8,326 34,634 1,562 - - 1,820,834 42 - - 294,500 - 1 99,100 - 1,656 - - - 1,606,637 36,911 68,881 - 93,623 4,421,443 1,190,048 140,063 39,975 294,500 - 11,698,087 - - - 3,424,610 2,885,756 - 25,113,387 665,242 244,755 - 2,885,756 11,698,087 25,113,387 665,242 244,755 3,424,610 $ 2,979,379 $ 16,119,530 $ 26,303,435 $ 805,305 $ 284,730 $ 3,719,110 81 ASSETS Cash, cash equivalents and investments Receivables: Interest Trade, net Notes Special assessments Due from other funds Due from other governments Inventory for resale Advances to other funds Prepaid costs Total assets LIABILITIES AND FUND BALANCES COLLIER COUNTY, FLORIDA COMBINING BALANCE SHEET NONMAIOR GOVERNMENTAL FUNDS SEPTEMBER 30, 2011 Special Revenue Funds Liabilities: State 800 Public - 30,333 - Housing MHZ Records Tourist Initiative IRCP Modernization Development Partnership Fund Retainage payable $ 3,654,098 $ 39,898,375 $ 2,471,845 $ 64,063 - 43,957 2,895 114 3,622,745 39,370,739 504,070 - 650,380 - 27,079 - 1,297,092 - - 109,738 20,312 12 1,530 - 91,256 $ 3,654,110 $ 40,703,980 $ 3,792,144 $ Liabilities: Accounts payable 31,365 1,301,586 33,415 Wages payable - 30,333 - Due to other funds 1,322 Due to other governments - Due to individuals - Deferred revenues 3,288,074 Refundable deposits - Retainage payable Advances from other funds - - - - Totalliabilities 31,365 1,333,241 3,288,074 33,415 Fund balances (deficits): Restricted 3,622,745 39,370,739 504,070 - Committed - - - 57,841 Assigned Unassigned Total fund balances (deficits) 3,622,745 39,370,739 504,070 57,841 Total liabilities and fund balances $ 3,654,110 $ 40,703,980_ $ 3,792,144 $ 91,256 See accompanying independent auditor's report 82 State Court Confiscated Administration Property $ 290,977 $ 689,528 $ 419 802 85,696 - 15,213 - Special Revenue Funds GAC land Sales, Roads Utility Conservation Impact Fee 1,467,872 $ 726,156 $ 20,907,495 $ 674,386 1,625 780 24,070 999 - - 675 - 65,901 268,891 5 392,305 5 b9U,33U 5 1, /3ts,38ts 5 716,936 5 LU,998,141 5 b75,385 18,799 - - 31 42,789 29,823 - 4,908 4,771 - - - 69 - 268,891 - - 13,132 48,OLL - LGO,mu 4,737 4/,OL7 L3,13L - - - 20,950,512 - 690,330 1,469,497 721,997 - - 343,683 - - - 662,253 343,683 690,330 1,469,497 721,997 20,950,512 662,253 $ 392,305 $ 690,330 $ 1,738,388 $ 726,936 $ 20,998,141 $ 675,385 83 COLLIER COUNTY, FLORIDA COMBINING BALANCE SHEET NONMAJOR GOVERNMENTAL FUNDS SEPTEMBER 30, 2011 Special Revenue Funds See accompanying independent auditor's report 84 Court Court Information Court University Facilities Technology Services Extension Fee ASSETS Cash, cash equivalents and investments $ 417,735 $ 486,867 $ 56,534 $ 2,888,016 Receivables: Interest 657 - 62 2,984 Trade, net 47,772 100 92,888 Notes - - - Special assessments - Due from other funds - - - Due from other governments - 19,350 inventory for resale - - Advances to other funds - - Prepaid costs - - - - Total assets $ 466,164 $ 506,217 $ 56,696 $ 2,983,888 LIABILITIES AND FUND BALANCES Liabilities: Accounts payable 31,263 267,242 - - Wages payable - - - Due to other funds Due to other governments - Due to individuals Deferred revenues Refundable deposits - - Retainage payable Advances from other funds - - Total liabilities 31,263 267,242 - Fund balances (deficits): Restricted 434,901 238,975 - 2,983,888 Committed - - 56,696 - Assigned - - - Unassigned - - - - Total fund balances (deficits) 434,901 238,975 56,696 2,983,888 Total liabilities and fund balances $ 466,164 $ 506,217 $ 56,696 $ 2,983,888 See accompanying independent auditor's report 84 85 Special Revenue Funds Debt Service Funds Other Total Capital Pooled Special Special Gas Tax Improvement Commercial Affordable Revenue Revenue Revenue Revenue Paper Housing Funds Funds Bonds Bonds Program $ 627,819 $ 5,360,379 $ 144,246,632 $ 3,938,266 $ 15,840,029 $ 26,161 683 3,885 157,818 4,939 162 48 - 33,244 1,299,306 - - _ - - 1,516,092 - 842,524 - 4,552,748 18,317,291 $ 628,502 $ 5,397,508 $ 170,932,411 $ 3,943,205 $ 15,840,191 $ 26,209 46,463 5,268,205 - - - 1,125 662,090 - - 37,884 2,189,871 13,137 - 118 891,156 - - 3,487 - 5,163,642 - 76,767 - - 105,792 - - 1,150,000 15,717,302 - - 85,590 15,511,010 - 15,730,439 - 4,140,904 103,525,951 3,943,205 - 628,502 1,002,569 48,445,097 - - _ - 168,445 3,450,353 109,752 26,209 628,502 5,311,918 155,421,401 3,943,205 109,752 26,209 $ 628,502 $ 5,397,508 $ 170,932,411 $ 3,943,205 $ 15,840,191 $ 26,209 85 COLLIER COUNTY, FLORIDA COMBINING BALANCE SHEET NONMAIOR GOVERNMENTAL FUNDS SEPTEMBER 30, 2011 ASSETS Cash, cash equivalents and investments Receivables: Interest Trade, net Notes Special assessments Due from other funds Due from other governments Inventory for resale Advances to other funds Prepaid costs Total assets LIABILITIES AND FUND BALANCES Liabilities: Accounts payable Wages payable Due to other funds Due to other governments Due to individuals Deferred revenues Refundable deposits Retainage payable Advances from other funds Total liabilities Fund balances (deficits): Restricted Committed Assigned Unassigned Total fund balances (deficits) Total liabilities and fund balances See accompanying independent auditor's report Caribbean Gardens Loan Debt Service Funds Stormwater Limited General 314,630 Improvement Obligation Bonds Community Assessment Conservation Redevelopment Bond Collier Taxable Note $ 5,342 $ 45,393 $ 229,938 $ 1,584,340 - 45 565 1,741 158 - 620 - 99,571 - 924 83,647 - $ 5,500 $ 145,933 $ 314,770 $ 1,586,081 92 96,939 92 96,939 140 140 5,408 48,994 314,630 1,586,081 1,586,081 5,408 48,994 314,630 $ 5,500 $ 145,933 $ 314,770 $ 1,586,081 86 Debt Service Funds Capital Projects Funds 87 Total Forest Lakes Special State Debt County -Wide Limited General Obligation Infrastructure Service Capital Parks Obligation Bonds Revenue Bonds Bank Loan Funds Improvements Improvements $ 81,288 $ 239,594 $ 337 $ 21,990,688 $ 10,056,468 $ 13,686,499 112 208 - 7,820 11,374 14,300 - - 778 - 4,494 - 99,571 - - 5,718 90,289 34,140 38,867,500 1,150,000 $ 87,118 $ 239,802 $ 337 $ 22,189,146 $ 48,935,342 $ 14,889,433 - - - 232 166,960 186,672 13,137 6,993 96,939 15,717,302 - - - - 15,827,610 166,960 193,665 87,118 337 5,985,773 - - - 239,802 375,763 48,768,382 14,695,768 87,118 239,802 337 6,361,536 48,768,382 14,695,768 $ 87,118 $ 239,802 $ 337 $ 22,189,146 $ 48,935,342 $ 14,889,433 87 ASSETS Cash, cash equivalents and investments Receivables: Interest Trade, net Notes Special assessments Due from other funds Due from other governments Inventory for resale Advances to other funds Prepaid costs Total assets LIABILITIES AND FUND BALANCES COLLIER COUNTY, FLORIDA COMBINING BALANCE SHEET NONMAJOR GOVERNMENTAL FUNDS SEPTEMBER 30, 2011 Capital Projects Funds Emergency County -Wide Correctional Medical Library Facilities Services Water Impact Fees Impact Fees Impact Fees Management $ 2,706,465 $ 2,079,465 $ 484,388 $ 10,662,978 3,067 2,392 597 11,350 1,342 364 278 53,487 333,688 129,791 118,436 - - - - 2,453 8,685 13,425 3,762 - $ 3,053,247 $ 2,225,437 $ 607,461 $ 10,730,268 Liabilities: Accounts payable 73,410 508,642 Wages payable - - Due to other funds 2,125 Due to other governments - - Due to individuals - - - Deferred revenues 333,688 129,791 118,436 - Refundable deposits - - - - Retainage payable - 131,756 - 146,656 Advances from other funds 9,715,125 4,218,800 2,333,900 - Totalliabilities 10,122,223 4,480,347 2,452,336 657,423 Fund balances (deficits): Restricted - - - - Committed - - Assigned - - 10,072,845 Unassigned (7,068,976) (2,254,910) (1,844,875) - Total fund balances (deficits) (7,068,976) (2,254,910) (1,844,875) 10,072,845 Total liabilities and fund balances $ 3,053,247 $ 2,225,437 $ 607,461 $ 10,730,268 See accompanying independent auditor's report 88 Capital Projects Funds 89 Total Total Parks Road law Other Capital Nonmajor Impact Impact Road Enforcement Capital Projects Governmental Districts Districts Construction Impact Fees Projects Funds Funds $ 12,775,880 $ 56,557,842 $ 50,299,507 $ 2,585,905 $ 2,672,231 $ 164,567,628 $ 330,804,948 13,899 64,463 60,119 2,933 3,119 187,613 353,251 7,443 27,783 822,480 208 976 918,855 2,218,939 2,074,739 6,134,030 - 89,256 - 8,879,940 10,396,032 - - - - 34,503 34,503 134,074 - 529 941,593 940 979,655 1,912,468 459,165 96,863 2,766,780 - 3,348,680 7,901,428 - - - - - 18,317,291 40,017,500 40,017,500 $ 15,331,126 $ 62,881,510 $ 54,890,479 $ 2,678,302 $ 2,711,769 $ 218,934,374 $ 412,055,931 391,564 2,083,431 1,221,516 - 478,074 5,110,269 10,378,706 - - 39,631 - 15,386 55,017 717,107 56 564 - 9,738 2,212,746 - - - 891,156 - - - - 3,487 2,074,739 6,134,030 89,256 8,879,940 14,140,521 - - - - - - 76,767 4,422 698,293 438,892 - 7,669 1,427,688 1,533,480 - - - 15,388,000 - 31,655,825 48,523,127 2,470,725 8,915,810 1,700,603 15,477,256 501,129 47,138,477 78,477,097 12,860,401 53,965,700 53,189,876 - 17,818 120,033,795 229,545,519 - - - - - 48,445,097 2,192,822 75,729,817 79,555,933 - - - (12,798,954) - (23,967,715) (23,967,715) 12,860,401 53,965,700 53,189,876 (12,798,954) 2,210,640 171,795,897 333,578,834 $ 15,331,126 $ 62,881,510 $ 54,890,479 $ 2,678,302 $ 2,711,769 $ 218,934,374 $ 412,055,931 89 COLLIER COUNTY, FLORIDA COMBINING STATEMENT OF REVENUES, EXPENDITURES AND CHANGES IN FUND BALANCES NONMAJOR GOVERNMENTAL FUNDS FOR THE FISCAL YEAR ENDED SEPTEMBER 30, 2011 Revenues: Taxes Licenses, permits and impact fees Intergovernmental Charges for services Fines and forfeitures Interest income Special assessments Miscellaneous Total revenues Expenditures: Current: General government Public safety Physical environment Transportation Economic environment Human services Culture and recreation Debt service: Principal Interest Fiscal charges Capital outlay Total expenditures Excess (deficiency) of revenues over(under)expenditures Other financing sources (uses): Bonds issued Premiums on bonds issued Payment to refundinging bond escrow Sale of capital assets Insurance proceeds Transfers in Transfers out Total other financing sources (uses) Net change in fund balances Fund balances (deficits) at beginning of year Fund balances (deficits) at end of year See accompanying independent auditor's report Special Revenue Funds 5,989,841 2,610,902 4,139,377 6,786,365 - 768,196 279,635 18,292,554 - 10,746,659 - - 2,026,788 120,360 10,407,487 - 113,955 Community 150,110 2,300 Road Redevelopment Unincorporated Community Districts Agency Area MSTD Development (15,280,672) $ - $ 1,768,200 $ 32,224,934 $ 359,900 - 204,429 10,103,056 2,361,101 - - - 192,723 557,142 2,394,672 2,082,657 - - 237,246 - 13,575 25,668 135,309 43,913 198,538 376,949 323,607 75,793 3,125,837 2,727,959 35,520,197 12,305,419 5,989,841 2,610,902 4,139,377 6,786,365 - 768,196 279,635 18,292,554 - 10,746,659 - - 2,026,788 120,360 10,407,487 - 113,955 487,350 150,110 2,300 18,406,509 2,514,138 32,322,030 9,679,202 (15,280,672) 213,821 3,198,167 2,626,217 140,883 - 174,340 - 15,959,200 133,800 743,535 624,200 (361,900) (1,3474594) (5,088,830) (687,896) 15,738,183 (1,213,794) (4,170,955) (63,696) 457,511 (999,973) (972,788) 2,562,521 1,818,461 17,156,493 10,760,793 2,557,999 $ 2,2751972 $ 16,156,520 $ 9,788,005 $ 5,120,520 T Special Revenue Funds Water Management Grants and Fire 911 and Pollution Shared Improvement Control Lighting Enhancement Control Revenues Districts Districts Districts Fee $ 1,737,622 $ $ 3,464,268 $ 2,738,506 $ 808,489 $ 1,959,030 690 - - - - 147,575 14,634,092 - - 546,725 50,000 222,081 5,643 30,605 45,633 209,406 13,361 3,901 31,033 2,571,290 - - - - - - 968,402 1,351,659 4,272 2,135 - 5,034,507 15,698,127 5,247,414 2,761,782 814,525 1,990,063 - 850,060 - - - - - 1,552,070 - 3,064,580 2,611,451 2,991,197 336,399 667,135 - - - 1,511,779 372,909 2,080,011 811,466 - 4,417,074 - - 2,587,763 - 2,151 871,756 - - - - 63,420 - 14,500 - 62,402 4,323,391 3,172,521 17,980 - - 4,565,378 14,441,817 6,791,423 3,160,480 811,466 2,611,451 469,129 1,256,310 (1,544,009) (398,698) 3,059 (621,388) 5,250 - - - 6,265 - 2,110 2,401 16,945 - 40,667 785,314 407,862 31,842 7,359 - (562,941) - (447,091) (95,497) (104,374) - (510,759) 785,314 (37,119) (61,254) (80,070) - (41,630) 2,041,624 (1,581,128) (459,952) (77,011) (621,388) 2,927,386 9,656,463 26,694,515 1,125,194 321,766 4,045,998 $ 2,885,756 $ 11,698,087 $ 25,113,387 $ 665,242 $ 244,755 $ 3,424,610 91 COLLIER COUNTY, FLORIDA COMBINING STATEMENT OF REVENUES, EXPENDITURES AND CHANGES IN FUND BALANCES NONMAJOR GOVERNMENTAL FUNDS FOR THE FISCAL YEAR ENDED SEPTEMBER 30, 2011 Revenues: Taxes Licenses, permits and impact fees Intergovernmental Charges for services Fines and forfeitures Interest income Special assessments Miscellaneous Total revenues Expenditures: Current: General government Public safety Physical environment Transportation Economic environment Human services Culture and recreation Debt service: Principal Interest Fiscal charges Capital outlay Total expenditures Excess (deficiency) of revenues over(under)expenditures Other financing sources (uses): Bonds issued Premiums on bonds issued Payment to refunding bond escrow Sale of capital assets Insurance proceeds Transfers in Transfers out Total other financing sources (uses) Net change in fund balances Fund balances (deficits) at beginning of year Fund balances (deficits) at end of year See accompanying independent auditor's report Public Records Modernization Special Revenue Funds State Housing Tourist Initiative 800 MHZ Development Partnership ICRP Fund $ $ 13,883,740 $ $ 1,179,454 781 461,327 8,939 304,585 20,853 1,146 - 77,161 115,222 116,982 1,188,393 14,266,267 136,075 579,455 1,164,100 - - - - - 1,169,631 4,913,882 - - 466,444 7,822,221 150,720 9,732 - 5,000 1,314,820 12,745,835 466,444 1,174,631 (126,427) 1,520,432 (330,369) (595,176) 18,943 - 109,739 542,400 (560,922) - (432,240) 542,400 (126,427) 1,088,192 (330,369) (52,776) 3,749,172 38,282,547 834,439 110,617 $ 3,622,745 $ 39,370,739 $ 504,070 $ 57,841 92 Special Revenue Funds GAC Land State Court Confiscated Sales, Roads Utility Conservation Impact Fee Administration Property and Canals Fee Collier Escrow $ $ $ $ 212,881 $ 5,984,413 $ 144,530 - 160,000 - 1,145,980 34,602 - - 2,367 5,618 11,465 5,037 184,130 7,187 41,751 - - - 22,817 - 1,334,628 40,220 11,465 377,918 6,191,360 7,187 932,604 - - - 1,438,749 62,000 - - - - 327,470 1,146,126 24,404 - - - - 216,424 2,371,353 62,000 24,404 327,470 1,362,550 (1,036,725) (21,780) (12,939) 50,448 4,828,810 7,187 1,214,413 1,443,829 (5,121) (16,989) - (8,584,051) 1,209,292 (16,989) - (7,140,222) - 172,567 (38,769) (12,939) 50,448 (2,311,412) 7,187 171,116 729,099 1,482,436 671,549 23,261,924 655,066 $ 343,683 $ 690,330 $ 1,469,497 $ 721,997 $ 20,950,512 $ 662,253 93 COLLIER COUNTY, FLORIDA COMBINING STATEMENT OF REVENUES, EXPENDITURES AND CHANGES IN FUND BALANCES NONMAJOR GOVERNMENTAL FUNDS FOR THE FISCAL YEAR ENDED SEPTEMBER 30, 2011 Revenues: Taxes Licenses, permits and impact fees Intergovernmental Charges for services Fines and forfeitures Interest income Special assessments Miscellaneous Total revenues Expenditures: Current: General government Public safety Physical environment Transportation Economic environment Human services Culture and recreation Debt service: Principal Interest Fiscal charges Capital outlay Total expenditures Excess (deficiency) of revenues over(under)expenditures Other financing sources (uses): Bonds issued Premiums on bonds issued Payment to refunding bond escrow Sale of capital assets Insurance proceeds Transfers in Transfers out Total other financing sources (uses) Net change in fund balances Fund balances (deficits) at beginning of year Fund balances (deficits) at end of year See accompanying independent auditor's report Revenue Funds Court Court Information Court University Facilities Technology Services Extension Fee - 8,109,135 - 654,917 - 7,088 - - 1,113,900 4,138 - 536 18,638 6,136 - 19,835 - 665,191 8,109,135 27,459 1,132,538 518,483 8,501,034 204,034 11,880 - - - - 16,871 3,191 - 69,332 - - 89,865 602,886 8,501,034 16,871 293,899 62,305 (391,899) 10,588 838,639 62,305 (391,899) 10,588 838,639 372,596 630,874 46,108 2,145,249 $ 434,901 $ 238,975 $ 56,696 $ 2,983,888 94 95 Special Revenue Funds Debt Service Funds Other Total Pooled Special Special Gas Tax Capital Commercial Affordable Revenue Revenue Revenue Improvement Paper Housing Funds Funds Bonds Revenue Bonds Program $ - $ - $ 64,782,083 $ $ $ - 4,405 10,672,480 - - 86,581 25,338,484 - - - 1,078,895 9,738,635 - - 164,633 2,696,361 4,646 34,097 1,165,786 30,288 2,679 1,130 - - 2,571,290 - - - 20,014 413,552 4,134,825 - - - 24,660 1,782,163 121,099,944 30,288 2,679 1,130 - 153,390 20,924,448 - - - - 707,901 21,544,004 - - 11,446,911 - - 33,815,378 - - 7,030,666 209,882 2,800,836 7,807 19,135,826 - - - 63,420 7,185,000 9,760,000 - 14,500 7,398,527 8,977,533 - - - 4,837 7,118 - 77,821 8,948,903 - - - 1,156,801 125,724,892 14,588,364 18,744,651 - 24,660 625,362 (4,624,948) (14,558,076) (18,741,972) 1,130 - - (321,738) - 5,250 - - 361,887 - - - 42,231 22,086,391 14,664,600 19,073,539 14 (23,291) (17,886,497) - (3,000) (181,800) - 18,940 4,567,031 14,664,600 18,748,801 (181,786) 24,660 644,302 (57,917) 106,524 6,829 (180,656) 603,842 4,667,616 155,479,318 3,836,681 102,923 206,865 $ 628,502 $ 5,311,918 $ 155,421,401 $ 3,943,205 $ 109,752 $ 26,209 95 COLLIER COUNTY, FLORIDA COMBINING STATEMENT OF REVENUES, EXPENDITURES AND CHANGES IN FUND BALANCES NONMAIOR GOVERNMENTAL FUNDS FOR THE FISCAL YEAR ENDED SEPTEMBER 30, 2011 Revenues: Taxes Licenses, permits and impact fees Intergovernmental Charges for services Fines and forfeitures Interest income Special assessments Miscellaneous Total revenues Expenditures: Current: General government Public safety Physical environment Transportation Economic environment Human services Culture and recreation Debt service: Principal Interest Fiscal charges Capital outlay Total expenditures Excess (deficiency) of revenues over (under) expenditures Other financing sources (uses): Bonds issued Premiums on bonds issued Payment to refunding bond escrow Sale of capital assets Insurance proceeds Transfers in Transfers out Total other financing sources (uses) Net change in fund balances Fund balances (deficits) at beginning of year Fund balances (deficits) at end of year See accompanying independent auditor's report Caribbean Gardens loan Debt Service Funds Stormwater limited General 4,731 Improvement Obligation Bonds Community Assessment Conservation Redevelopment Bond Collier Taxable Note $ 9,919 $ - $ 8,838,543 $ 3,482 1,567 10,320 11,684 - 118,526 - - 13,401 120,093 8,848,863 11,684 175,000 14,531,925 900,000 4,731 1,089,070 447,594 9,788 4,837 - 189,519 15,625,832 1,347,594 13,401 (69,426) (6,776,969) (1,335,910) 96 924 8,350,447 1,347,594 (251,100) (3,985) (1,629,428) - (251,100) (3,061) 6,721,019 1,347,594 (237,699) (72,487) (55,950) 11,684 243,107 121,481 370,580 1,574,397 $ 5,408 $ 48,994 $ 314,630 $ 1,586,081 96 Debt Service Funds Capital Projects Funds Forest lakes Special Limited General Obligation Obligation Bonds Revenue Bonds $ 528,696 $ 1,171 555 529,867 555 State Total County -Wide Infrastructure Debt Service Capital Parks Bank Loan Funds Improvements Improvements $ $ 9,377,158 $ $ - - 529,381 50,000 337 63,213 77,645 87,725 118,526 - - - - 3,011 3,052,002 337 9,558,897 80,656 3,719,108 97 _ 2,205,146 - - 654,272 _ - 28,374 _ _ - - 334,548 350,000 1,545,000 1,875,930 36,322,855 106,617 205,775 2,596,696 164,070 20,883,996 6,123 - 2,652 405,080 - 434,312 - - - - - - 1,078,750 727,549 558,427 4,546,776 2,040,000 57,641,163 4,079,282 1,062,097 (28,560) (4,546,221) (2,039,663) (48,082,266) (3,998,626) 2,657,011 24,620,000 24,620,000 - - 2,050,315 - 2,050,315 (26,270,921) (26,592,659) - - - - 212 - 5,718 4,375,588 2,040,000 49,858,424 9,527,100 34,140 (16,457) - - (2,085,770) - (392,087) (10,739) 4,774,982 2,040,000 47,850,310 9,527,312 (357,947) (39,299) 228,761 337 (231,956) 5,528,686 2,299,064 126,417 11,041 - 6,593,492 43,239,696 12,396,704 $ 87,118 $ 239,802 $ 337 $ 6,361,536 $ 48,768,382 $ 14,695,768 97 COLLIER COUNTY, FLORIDA COMBINING STATEMENT OF REVENUES, EXPENDITURES AND CHANGES IN FUND BALANCES NONMAJOR GOVERNMENTAL FUNDS FOR THE FISCAL YEAR ENDED SEPTEMBER 30, 2011 Revenues: Taxes Licenses, permits and impact fees Intergovernmental Charges for services Fines and forfeitures Interest income Special assessments Miscellaneous Total revenues Expenditures: Current: General government Public safety Physical environment Transportation Economic environment Human services Culture and recreation Debt service: Principal Interest Fiscal charges Capital outlay Total expenditures Excess (deficiency) of revenues over(under)expenditures Other financing sources (uses): Bonds issued Premiums on bonds issued Payment to refunding bond escrow Sale of capital assets Insurance proceeds Transfers in Transfers out Total other financing sources (uses) Net change in fund balances Fund balances (deficits) at beginning of year Fund balances (deficits) at end of year See accompanying independent auditor's report Capital Projects Funds 57,802 36,853 - - - 1,145,309 66,042 642,357 - Emergency 3,274,363 County -Wide Correctional Medical 4,419,672 Library Facilities Services Water Impact Fees Impact Fees Impact Fees Management - 397,088 545,142 146,219 117,221 - - - 1,000,000 23,539 15,786 6,764 72,884 - - - 15 - - - 169,848 420,627 560,928 152,983 1,359,968 57,802 36,853 - - - 1,145,309 66,042 642,357 - 11,329 3,274,363 708,399 57,802 48,182 4,419,672 (287,772) 503,126 104,801 (3,059,704) - 5,684,153 (1,195,427) (1,950,600) (694,801) (1,500,864) (1,195,427) (1,950,600) (694,801) 4,183,289 (1,483,199) (1,447,474) (590,000) 1,123,585 (5,585,777) (807,436) (1,254,875) 8,949,260 $ (7,068,976) $ (2,254,910) $ (1,844,875) $ 10,072,845 98 Capital Projects Funds 99 Total Total Parks Road taw Other Capital Nonmajor Impact Impact Road Enforcement Capital Projects Governmental Districts Districts Construction Impact Fees Projects Funds Funds $ - $ - $ 12,791,958 $ - $ - $ 12,791,958 $ 86,951,199 2,879,219 6,904,293 - 303,998 7,996 11,830,557 22,503,037 276,492 - 8,505,474 - - 9,781,966 35,120,450 - 60,274 14,700 124,974 9,863,609 - - - - - - 2,696,361 93,330 471,842 527,493 26,020 31,352 1,434,380 2,663,379 - - - - 35,667 35,682 2,725,498 1,740 328,415 1,208,139 101,280 55,985 4,920,420 9,055,245 3,250,781 7,704,550 23,093,338 431,298 145,700 40,919,937 171,578,778 - - - - 119,940 2,325,086 23,249,534 139,685 390 889,002 22,433,006 - - 11004,556 2,149,865 13,596,776 3,243,434 13,653,986 - 16,925,794 50,741,172 - - - 7,030,666 - - - - 2,800,836 323,466 - 147,269 871,325 20,007,151 - - - - 106,617 36,492,892 - - 6,123 20,904,619 - - - - - 434,312 936,408 10,094,614 8,206,738 - 959,344 25,931,452 34,880,355 1,259,874 13,338,048 21,860,724 139,685 2,231,499 49,205,264 232,571,319 1,990,907 (5,633,498) 1,232,614 291,613 (2,085,799) (8,285,327) (60,992,541) - - - 24,620,000 2,050,315 - - - (26,592,659) - - - - - - 5,250 - 6,000 6,212 368,099 - 8,698,100 1,681,590 25,625,083 97,569,898 (3,116,000) (1,054,450) (22,259,353) (2,615,000) (65,689) (34,844,271) (54,816,538) (3,116,000) (1,054,450) (13,561,253) (2,615,000) 1,621,901 (9,212,976) 43,204,365 (1,125,093) (6,687,948) (12,328,639) (2,323,387) (463,898) (17,498,303) (17,788,176) 13,985,494 60,653,648 65,518,515 (10,475,567) 2,674,538 189,294,200 351,367,010 $ 12,860,401 $ 53,965,700 $ 53,189,876 $ (12,798,954) $ 2,210,640 $ 171,795,897 $ 333,578,834 99 COLLIER COUNTY, FLORIDA COMBINING SCHEDULE OF REVENUES, EXPENDITURES AND CHANGES IN FUND BALANCES BUDGET AND ACTUAL (BUDGETARY BASIS) MAJOR CAPITAL PROJECT AND NONMAJOR GOVERNMENTAL FUNDS FOR THE FISCAL YEAR ENDED SEPTEMBER 30, 2011 Revenues: Taxes Licenses, permits and impact fees Intergovernmental Charges for services Fines and forfeitures Interest Income Special assessments Miscellaneous Total revenues Expenditures: Current: General government Public safety Physical environment Transportation Economic environment Human services Culture and recreation Debt service Capital outlay Total expenditures Excess (deficit) of revenues over(under)expenditures Other financing sources (uses): Bonds Issued Premiums on bonds issued Payment to refunding bond escrow Sale of capital assets Insurance proceeds Transfers in Transfers out Total other financing sources (uses) Net change in fund balances Government Facilities Road Districts Impact Fees (Budgetary Basis) (Budgetary Basis) Budget Actual Variance Budget Actual Variance 396,596 413,819 (17,223) 86,932 83,905 453,000 896,578 443,578 438,000 359,900 (78,100) - - - 2,172,600 2,361,101 188,501 (1,786,997) 123,500 192,723 69,223 25,000 52,181 27,181 25,000 13,780 (11,220) - 21,085 21,085 3,000 198,538 195,538 478,000 969,844 491,844 2,762,100 3,126,042 363,942 396,596 413,819 (17,223) 86,932 83,905 3,027 16,100,147 16,100,147 - 19,418,709 18, 291,834 1,126,875 59,500 27,926 31,574 - - 1,423,957 59,837 1,364,120 157,910 113,955 43,955 (1,786,997) 1,966,985 585,487 1,381,498 19,576,619 18,405,789 1,170,830 (1,488,985) 384,357 1,873,342 (16,814,519) (15,279,747) 1,534,772 - - 46,000 140,883 94,883 3,019,800 3,019,800 16,100,147 16,100,147 - (4,806,797) (4,806,797) (502,847) (502,847) - (1,786,997) (1,786,997) 15,643,300 15,738,183 94,883 (3,275,982) (1,402,640) 1,873,342 (1,171,219) 458,436 1,629,655 Fund balances at beginning of year 7,457,100 7,457,100 1,414,466 1,414,466 Fund balances (deficits) at end of year $ 4,181,118 $ 6,054,460 $ 1,873,342 $ 243,247 $ 1,872,902 $ 1,629,655 See accompanying independent auditors' report. Reconciliation: Net change in fund balance, budgetary basis $ (1,402,640) $ 458,436 Change in fair value of investments (350) (205) Advances budgeted as transfers (2,389,800) - Unbudgetedfunds (720) Deferred revenues Net change In fund balance, GAAP basis $ (3,792,790) $ 457,511 100 Community Redevelopment Agency Unincorporated Area MSTD (Budgetary Basis) (Budgetary Basis) Budget Actual Variance Budget Actual Variance $ 1,768,200 $ 1,768,200 $ $ 33,878,600 $ 32,224,934 $ (1,653,666) - - 173,500 204,429 30,929 3,845,124 557,142 (3,287,982) 2,360,200 2,394,672 34,472 - - - 272,500 237,246 (35,254) 15,000 25,831 10,831 50,000 136,004 86,004 350,000 376,948 26,948 208,800 323,607 114,807 5,978,324 2,728,121 (3,250,203) 36,943,600 35,520,892 (1,422,708) - - 6,493,382 5,989,841 503,541 4,298,610 4,139,377 159,233 909,531 768,196 141,335 - - - 11,832,350 10,746,659 1,085,691 6,511,917 2,026,789 4,485,128 120,400 120,360 40 11,174,204 10,407,487 766,717 2,095,651 487,348 1,608,303 216,981 150,110 66,871 8,607,568 2,514,137 6,093,431 35,045,458 32,322,030 2,723,428 (2,629,244) 213,984 2,843,228 1,898,142 3,198,862 1,300,720 - - 75,604 174,340 98,736 133,800 133,800 - 695,100 798,635 103,535 (1,725,400) (1,347,594) 377,806 (5,477,950) (5,143,930) 334,020 (1,591,600) (1,213,794) 377,806 (4,707,246) (4,170,955) 536,291 (4,220,844) (999,810) 3,221,034 (2,809,104) (972,093) 1,837,011 5,090,944 5,090,944 - 7,562,915 7,562,915 $ 870,100 $ 4,091,134 $ 3,221,034 $ 4,753,811 $ 6,590,822 $ 1,837,011 $ (999,810) $ (972,093) (163) (695) $ (999,973) $ (972,788) 101 COLLIER COUNTY, FLORIDA COMBINING SCHEDULE OF REVENUES, EXPENDITURES AND CHANGES IN FUND BALANCES BUDGET AND ACTUAL (BUDGETARY BASIS) MAJOR CAPITAL PROJECT AND NONMAJOR GOVERNMENTAL FUNDS FOR THE FISCAL YEAR ENDED SEPTEMBER 30, 2011 Community Development Water Management and (Budgetary Basis) Pollution Control (Budgetary Basis) Budget Actual Variance Budget Actual Variance Revenues: $ 2,312,903 $ (41,454) Change in fair value of investments (382) (176) Advances budgeted as transfers - - Unbudgetedfunds Taxes $ - $ - $ - $ 1,811,900 $ 1,737,622 $ (74,278) Licenses, permits and impact fees 7,762,000 10,103,056 2,341,056 200 690 490 Intergovernmental - - - 158,500 147,575 (10,925) Charges for services 2,223,000 2,082,657 (140,343) 522,300 546,725 24,425 Fines and forfeitures - - - - - Interest income 21,000 44,295 23,295 36,500 30,781 (5,719) Special assessments - - 2,667,000 2,571,290 (95,710) Miscellaneous 92,000 75,793 (16,207) - Total revenues 10,098,000 12,305,801 2,207,801 5,196,400 5,034,683 (161,717) Expenditures: Current: General government 3,141,993 2,610,902 531,091 - Public safety 7,424,457 6,786,365 638,092 - - Physical environment 428,100 279,635 148,465 3,659,574 2,991,197 668,377 Transportation - - - 1,677,300 1,511,779 165,521 Economic environment - - - Human services Culture and recreation Debt service - - - - " Capital outlay 26,500 2,300 24,200 156,100 62,402 93,698 Total expenditures 11,021,050 9,679,202 1,341,848 5,492,974 4,565,378 927,596 Excess (deficit) of revenues over (under) expenditures (923,050) 2,626,599 3,549,649 (296,574) 469,305 765,879 Other financing sources (uses): Bonds issued - - Premiums on bonds issued Payment to refunding bond escrow - - Sale of capital assets 5,250 5,250 Insurance proceeds - - 6,265 6,265 Transfers in 774,200 774,200 40,667 40,667 Transfers out (1,087,896) (1,087,896) (647,000) (562,941) 84,059 Total other financing sources (uses) (313,696) (313,696) - (647,000) (510,759) 136,241 Net change in fund balances (1,236,746) 2,312,903 3,549,649 (943,574) (41,454) 902,120 Fund balances at beginning of year 2,357,150 2,357,150 - 2,603,074 2,603,074 Fund balances (deficits) at end of year $ 1,120,404 $ 4,670,053 $ 3,549,649 $ 1,659,500 $ 2,561,620 $ 902,120 See accompanying independent auditors' report. Reconciliation: Net change in fund balance, budgetary basis $ 2,312,903 $ (41,454) Change in fair value of investments (382) (176) Advances budgeted as transfers - - Unbudgetedfunds 250,000 Deferred revenues - Net change in fund balance, GAAP basis $ 2,562,521 $ (41,630) 102 Grants and Shared Revenues Improvement Districts (Budgetary Basis) (Budgetary Basis) Budget Actual Variance Budget Actual Variance $ $ $ $ 3,656,000 $ 3,464,268 $ (191,732) 32,462,995 11,133,242 (21,329,753) - - - 50,000 50,000 189,500 222,081 32,581 33,316 33,316 71,500 210,915 139,415 1,090,769 968,402 (122,367) 1,368,800 1,351,659 (17,141) 33,603,764 12,184,960 (21,418,804) 5,285,800 5,248,923 (36,877) 2,543,463 773,326 1,770,137 - - 3,251,999 450,729 2,801,270 - - 338,196 336,399 1,797 573,281 667,136 (93,855) 562,169 372,909 189,260 2,120,336 2,080,011 40,325 24,666,551 4,417,074 20,249,477 - - - 6,079,956 2,587,763 3,492,193 - - - 297,544 2,151 295,393 1,000,016 871,756 128,260 9,598,535 2,772,818 6,825,717 24,657,275 3,172,521 21,484,754 47,338,413 11,713,169 35,625,244 28,350,908 6,791,424 21,559,484 (13,734,649 471,791 14,206,440 (23,065,108) (1,542,501) 21,522,607 - - - 2,110 2,110 1,801,449 873,984 (927,465) 373,100 407,862 34,762 (232,145) (88,670) 143,475 (470,150) (447,090) 23,060 1,569,304 785,314 (783,990) (97,050) (37,118) 59,932 (12,165,345) 1,257,105 13,422,450 (23,162,158) (1,579,619) 21,582,539 13,414,186 13,414,186 26,425,658 26,425,658 - $ 1,248,841 $ 14,671,291 $ 13,422,450 $ 3,263,500 $ 24,846,039 $ 21,582,539 $ 1,257,105 $ (1,579,619) (327) (1,509) 784,846 $ 2,041,624 $ (1,581,128) 103 COLLIER COUNTY, FLORIDA COMBINING SCHEDULE OF REVENUES, EXPENDITURES AND CHANGES IN FUND BALANCES BUDGET AND ACTUAL (BUDGETARY BASIS) MAJOR CAPITAL PROJECT AND NONMAJOR GOVERNMENTAL FUNDS FOR THE FISCAL YEAR ENDED SEPTEMBER 30, 2011 Revenues: Taxes Licenses, permits and impact fees Intergovernmental Charges for services Fines and forfeitures Interest income Special assessments Miscellaneous Total revenues Expenditures: Current: General government Public safety Physical environment Transportation Economic environment Human services Culture and recreation Debt service Capital outlay Total expenditures Excess (deficit) of revenues over(under)expenditures Other financing sources (uses): Bonds issued Premiums on bonds issued Payment to refunding bond escrow Sale of capital assets Insurance proceeds Transfersin Transfers out Total other financing sources (uses) Net change in fund balances Fire Control Districts (Budgetary Basis) Lighting Districts Budget Actual Variance Budget Actual Variance $ 2,908,200 $ 2,738,506 $ (169,694) $ 849,700 $ 808,489 $ (41,211) 8,500 5,642 (2,858) 7,375 7,375 14,700 13,418 (1,282) 2,200 3,901 1,701 1,900 4,272 2,372 - 2,135 2,135 2,933,300 2,761,838 (171,462) 851,900 814,525 (37,375) 3,345,927 3,142,500 203,427 879,200 811,466 67,734 22,000 17,980 4,020 14,200 - 14,200 3,367,927 3,160,480 207,447 893,400 811,466 81,934 (434,627) (398,642) 35,985 (41,500) 3,059 44,559 - 2,401 2,401 16,945 16,945 167,907 164,920 (2,987) 7,375 7,375 (257,743) (228,575) 29,168 (116,400) (104,390) 12,010 (89,836) (61,254) 28,582 (116,400) (80,070) 36,330 (524,463) (459,896) 64,567 (157,900) (77,011) 80,889 Fund balances at beginning of year 1,107,527 1,107,527 - 288,300 288,300 - Fund balances (deficits) at end of year $ 583,064 $ 647,631 $ 64,567 $ 130,400 $ 211,289 $ 80,889 See accompanying independent auditors' report, Reconciliation: Net change in fund balance, budgetary basis $ (459,896) $ (77,011) Change in fair value of investments (57) Advances budgeted as transfers Unbudgeted funds - Deferred revenues Net change in fund balance, GAAP basis $ (459,953) $ (77,011) 104 911 Enhancement Fee (Budgetary Basis) Public Records Modernization Budget Actual Variance Budget Actual Variance $ 1,920,000 $ 1,959,030 $ 39,030 $ $ $ 600,000 1,179,454 579,454 58,000 31,253 (26,747) 6,000 8,939 2,939 1,978,000 1,990,283 12,283 606,000 1,188,393 582,393 - - - 1,408,000 1,164,100 243,900 4,086,476 2,611,451 1,475,025 - - - 15,000 15,000 876,500 150,720 725,780 4,101,476 2,611,451 11490,025 2,284,500 1,314,820 969,680 (2,123,476) (621,168) 1,502,308 (1,678,500) (126,427) 1,552,073 $ (621,168) $ (126,427) (220) $ (621,388) $ (126,427) 105 (126,427) 1,552,073 (2,123,476) (621,168) 1,502,308 (1,678,500) 3,432,976 3,432,976 - 2,565,258 2,565,258 $ 1,309,500 $ 2,811,808 $ 1,502,308 $ 886,758 $ 2,438,831 $ 1,552,073 $ (621,168) $ (126,427) (220) $ (621,388) $ (126,427) 105 COLLIER COUNTY, FLORIDA COMBINING SCHEDULE OF REVENUES, EXPENDITURES AND CHANGES IN FUND BALANCES BUDGET AND ACTUAL (BUDGETARY BASIS) MAJOR CAPITAL PROJECT AND NONMAJOR GOVERNMENTAL FUNDS FOR THE FISCAL YEAR ENDED SEPTEMBER 30, 2011 Revenues: Taxes Licenses, permits and impact fees Intergovernmental Charges for services Fines and forfeitures Interest income Special assessments Miscellaneous Total revenues Expenditures: Current: General government Public safety Physical environment Transportation Economic environment Human services Culture and recreation Debt service Capital outlay Total expenditures Excess (deficit) of revenues over(under)expenditures Other financing sources (uses): Bonds issued Premiums on bonds issued Payment to refunding bond escrow Sale of capital assets Insurance proceeds Transfers in Transfers out Total other financing sources (uses) Net change in fund balances Tourist Development State Housing Initiativeship (Budgetary Basis) Partnership (Budgetary Basis) Budget Actual Variance Budget Actual $ 13,112,541 $ 13,883,740 $ 771,199 2,892,000 - (2,892,000) - 781 781 205,000 306,859 101,859 20,000 77,161 57,161 12,745,660 14,213,260 799,924 466,444 333,480 16,229,541 14,268,541 (1,961,000) Variance 20,999 20,999 115,222 115,222 136,221 136,221 7,200,472 4,913,882 2,286,590 109,739 (2,166,200) (2,105,722) 799,924 466,444 333,480 8,725,620 7,822,046 903,574 11,032,828 9,732 11,023,096 - - - 26,958,920 12,745,660 14,213,260 799,924 466,444 333,480 (10,729,379) 1,522,881 12,252,260 (799,924) (330,223) 469,701 - 18,943 18,943 1,544,800 1,654,539 109,739 (2,166,200) (2,105,722) 60,478 (621,400) (432,240) 189,160 (11,350,779) 1,090,641 12,441,420 (799,924) (330,223) 469,701 Fund balances at beginning of year 28,855,252 28,855,252 799,924 799,924 Fund balances (deficits) at end of year $ 17,504,473 $ 29,945,893 $ 12,441,420 $ - $ 469,701 $ 469,701 See accompanying independent auditors' report. Reconciliation: Net change in fund balance, budgetary basis $ 1,090,641 $ (330,223) Change in fair value of investments (2,274) (146) Advances budgeted as transfers - - Unbudgetedfunds (175) Deferred revenues - Net change in fund balance, GAAP basis $ 1,088,192 $ (330,369) 106 800 MHZ IRCP Fund State Court Administration (Budgetary Basis) (Budgetary Basis) Budget Actual Variance Budget Actual Variance $ $ $ $ $ $ 474,300 461,327 (12,973) 165,000 144,530 (20,470) - - 1,112,500 1,145,980 33,480 2,200 1,152 (1,048) 1,000 2,392 1,392 118,300 116,982 (1,318) - 41,751 41,751 594,800 579,461 (15,339) 1,278,500 1,334,653 56,153 - - - 1,039,300 932,604 106,696 1,199,900 1,169,061 30,839 1,460,900 1,438,749 22,151 5,000 5,000 - 6,500 6,500 1,204,900 1,174,061 30,839 2,506,700 2,371,353 135,347 (610,100) (594,600) 15,500 (1,228,200) (1,036,700) 191,500 542,400 542,400 1,255,900 1,241,588 (14,312) (69,400) (32,296) 37,104 542,400 542,400 1,186,500 1,209,292 22,792 (67,700) (52,200) 15,500 (41,700) 172,592 214,292 97,300 97,300 115,300 115,300 $ 29,600 $ 45,100 $ 15,500 $ 73,600 $ 287,892 $ 214,292 $ (52,200) $ 172,592 (6) (25) (570) $ (52,776) $ 172,567 107 COLLIER COUNTY, FLORIDA COMBINING SCHEDULE OF REVENUES, EXPENDITURES AND CHANGES IN FUND BALANCES BUDGET AND ACTUAL (BUDGETARY BASIS) MAJOR CAPITAL PROJECT AND NONMAJOR GOVERNMENTAL FUNDS FOR THE FISCAL YEAR ENDED SEPTEMBER 30, 2011 Revenues: Taxes Licenses, permits and impact fees Intergovernmental Charges for services Fines and forfeitures Interest income Special assessments Miscellaneous Total revenues Expenditures: Current: General government Public safety Physical environment Transportation Economic environment Human services Culture and recreation Debt service Capital outlay Total expenditures Excess (deficit) of revenues over(under)expenditures Other financing sources (uses): Confiscated Property GAC Land Sales, (Budgetary Basis) Roads and Canals (Budgetary Basis) Budget Actual Variance Budget Actual Variance 34,167 34,602 435 - - - 5,659 5,659 22,300 11,548 (10,752) 151,700 (151,700) 34,167 40,261 6,094 174,000 11,548 (162,452) 62,000 62,000 301,800 24,404 277,396 62,000 62,000 301,800 24,404 277,396 (27,833) (21,739) 6,094 (127,800) (12,856) 114,944 Bonds issued Premiums on bonds issued Payment to refunding bond escrow Sale of capital assets Insurance proceeds Transfers in - Transfers out (324,000) (16,989) 307,011 Total other financing sources (uses) (324,000) (16,989) 307,011 - Net change in fund balances (351,833) (38,728) 313,105 (127,800) (12,856) 114,944 Fund balances at beginning of year 369,800 369,800 1,378,900 1,378,900 Fund balances (deficits) at end of year $ 17,967 $ 331,072 $ 313,105 $ 1,251,100 $ 1,366,044 $ 114,944 See accompanying independent auditors' report. Reconciliation: Net change in fund balance, budgetary basis $ (38,728) $ (12,856) Change in fair value of investments (41) (83) Advances budgeted as transfers - - Unbudgetedfunds Deferred revenues - Net change in fund balance, GAAP basis $ (38,769) $ (12,939) 108 Utility Fees Conservation Collier (Budgetary Basis) (Budgetary Basis) Budget Actual Variance Budget Actual Variance $ 240,000 $ 212,881 $ (27,119) $ 6,233,700 $ 5,984,413 $ (249,287) 130,000 160,000 30,000 6,000 (6,000) 1,000 5,079 4,079 275,700 185,330 (90,370) 7,500 22,817 15,317 371,000 377,960 6,960 6,522,900 6,192,560 (330,340) 369,400 327,470 41,930 3,257,236 1,146,126 2,111,110 - 438,833 216,424 222,409 369,400 327,470 41,930 3,696,069 1,362,550 2,333,519 1,600 50,490 48,890 2,826,831 4,830,010 2,003,179 5,884,900 5,637,729 (247,171) (13,273,600) (12,777,951) 495,649 (7,388,700) (7,140,222) 248,478 1,600 50,490 48,890 (4,561,869) (2,310,212) 2,251,657 600,300 600,300 - 24,120,469 24,120,469 $ 601,900 $ 650,790 $ 48,890 $ 19,558,600 $ 21,810,257 $ 2,251,657 $ 50,490 $ (2,310,212) (42) (1,200) $ 50,448 $ (2,311,412) 109 COLLIER COUNTY, FLORIDA COMBINING SCHEDULE OF REVENUES, EXPENDITURES AND CHANGES IN FUND BALANCES BUDGET AND ACTUAL (BUDGETARY BASIS) MAJOR CAPITAL PROJECT AND NONMAJOR GOVERNMENTAL FUNDS FOR THE FISCAL YEAR ENDED SEPTEMBER 30, 2011 Court Information Technology Fee (Budgetary Basis) Court Services Total expenditures Budget Actual Variance Budget Actual Variance over (under) expenditures Revenues: 62,340 199,640 (391,899) (391,899) Other financing sources (uses): Taxes $ $ $ $ $ $ Licenses, permits and impact fees Premiums on bonds issued Intergovernmental Payment to refunding bond escrow - 8,714,858 8,109,135 (605,723) Charges for services 600,000 654,917 54,917 - - Fines and forfeitures - - - Transfers in Interest income 4,173 4,173 Transfers out Special assessments - - Total other financing sources (uses) Miscellaneous - 6,136 6,136 - - 199,640 (391,899) (391,899) Fund balances at beginning of year 206,200 206,200 Total revenues 600,000 665,226 65,226 8,714,858 8,109,135 (605,723) Expenditures: Current: General government 597,294 518,483 78,811 8,714,858 8,501,034 213,824 Public safety 14,400 11,880 2,520 - - - Physical environment - - - Transportation Economic environment - - - Human services 5,000 3,191 1,809 Culture and recreation - - - Debt service - - - Capital outlay 120,606 69,332 51,274 Total expenditures 737,300 602,886 134,414 8,714,858 8,501,034 213,824 Excess (deficit) of revenues over (under) expenditures (137,300) 62,340 199,640 (391,899) (391,899) Other financing sources (uses): Bonds issued - - Premiums on bonds issued Payment to refunding bond escrow Sale of capital assets insurance proceeds - Transfers in Transfers out Total other financing sources (uses) Net change in fund balances (137,300) 62,340 199,640 (391,899) (391,899) Fund balances at beginning of year 206,200 206,200 Fund balances (deficits) at end of year $ 68,900 $ 268,540 $ 199,640 $ $ (391,899) See accompanying independent auditors' report. Reconciliation: Net change in fund balance, budgetary basis $ 62,340 $ (391,899) Change in fair value of investments (35) Advances budgeted as transfers - Unbudgetedfunds Deferred revenues - Net change in fund balance, GAAP basis $ 62,305 $ (391,899) 110 Court Facilities Fee University Extension (Budgetary Basis) Budget Actual Variance Budget Actual Variance 7,088 7,088 - - - - 1,088,000 1,113,900 25,900 536 536 9,000 18,797 9,797 10,000 19,835 9,835 - 10,000 27,459 17,459 1,097,000 1,132,697 35,697 155,243 204,034 (48,791) 20,600 16,871 3,729 1,761,079 89,865 1,671,214 20,600 16,871 3,729 1,916,322 293,899 1,622,423 (10,600) 10,588 21,188 (819,322) 838,798 1,658,120 (10,600) 10,588 21,188 (819,322) 838,798 1,658,120 39,300 39,300 - 2,086,522 2,086,522 - $ 28,700 $ 49,888 $ 21,188 $ 1,267,200 $ 2,925,320 $ 1,658,120 $ 10,588 $ 838,798 - (159) $ 10,588 $ 838,639 111 COLLIER COUNTY, FLORIDA COMBINING SCHEDULE OF REVENUES, EXPENDITURES AND CHANGES IN FUND BALANCES BUDGET AND ACTUAL (BUDGETARY BASIS) MAJOR CAPITAL PROJECT AND NONMAJOR GOVERNMENTAL FUNDS FOR THE FISCAL YEAR ENDED SEPTEMBER 30, 2011 Other Special Gas Tax Revenue Bonds Revenue Funds (Budgetary Basis) (Budgetary Basis) Budget Actual Variance Budget Actual Variance Revenues: $ 383,011 $ 106,749 Change in fair value of investments (200) (225) Advances budgeted as transfers Unbudgeted funds Taxes $ - $ - $ $ $ $ Licenses, permits and impact fees 12,000 4,405 (7,595) Intergovernmental 20,000 86,581 66,581 Charges for services 392,500 475,032 82,532 Fines and forfeitures 140,400 164,633 24,233 - Interest income 15,100 29,985 14,885 18,000 30,513 12,513 Special assessments - - - - - - Miscellaneous 77,500 342,242 264,742 - - - Total revenues 657,500 1,102,878 445,378 18,000 30,513 12,513 Expenditures: Current: General government 202,700 153,390 49,310 - - - Public safety 717,000 301,692 415,308 Physical environment - - - Transportation Economic environment - - Human services 366,422 209,882 156,540 Culture and recreation 30,800 7,807 22,993 - - - Debt service - - - 14,597,600 14,588,364 9,236 Capital outlay 236,861 66,036 170,825 Total expenditures 1,553,783 738,807 814,976 14,597,600 14,588,364 91236 Excess (deficit) of revenues over(under)expenditures (896,283) 364,071 1,260,354 (14,579,600) (14,557,851) 21,749 Other financing sources (uses): Bonds issued - - - Premiums on bonds issued Payment to refunding bond escrow Sale of capital assets Insurance proceeds - - - - Transfers in 49,810 42,231 (7,579) 14,664,600 14,664,600 Transfers out (23,291) (23,291) Total other financing sources (uses) 49,810 18,940 (30,870) 14,664,600 14,664,600 Net change in fund balances (846,473) 383,011 1,229,484 85,000 106,749 21,749 Fund balances at beginning of year 2,417,808 2,417,808 3,880,400 3,880,400 Fund balances (deficits) at end of year $ 1,571,335 $ 2,800,819 $ 1,229,484 $ 3,965,400 $ 3,987,149 $ 21,749 See accompanying independent auditors' report. Reconciliation: Net change in fund balance, budgetary basis $ 383,011 $ 106,749 Change in fair value of investments (200) (225) Advances budgeted as transfers Unbudgeted funds 261,491 Deferred revenues Net change in fund balance, GAAP basis $ 644,302 $ 106,524 112 Capital Improvement Pooled Commercial Revenue Bonds (Budgetary Basis) Paper Program Budget Actual Variance Budget Actual Variance 3,572 3,572 1,130 1,130 3,572 3,572 1,130 1,130 18,754,020 18,744,651 9,369 18,754,020 18,744,651 9,369 - - (18,754,020) (18,741,079) 12,941 1,130 1,130 (321,800) (321,738) 62 19,073,539 19,073,539 - 14 14 (3,859,476) (3,856,476) 3,000 (181,800) (181,800) 14,892,263 14,895,325 3,062 (181,800) (181,786) 14 (3,861,757) (3,845,754) 16,003 (181,800) (180,656) 1,144 19,579,081 19,579,081 - 181,800 181,800 - $ 15,717,324 $ 15,733,327 $ 16,003 $ - $ 1,144 $ 1,144 $ (3,845,754) $ (180,656) (893) 3,853,476 $ 6,829 $ (180,656) 113 COLLIER COUNTY, FLORIDA COMBINING SCHEDULE OF REVENUES, EXPENDITURES AND CHANGES IN FUND BALANCES BUDGET AND ACTUAL (BUDGETARY BASIS) MAJOR CAPITAL PROJECT AND NONMAJOR GOVERNMENTAL FUNDS FOR THE FISCAL YEAR ENDED SEPTEMBER 30, 2011 Stormwater Improvement Caribbean Gardens Loan Assessment Bond (Budgetary Basis) Budget Actual Variance Budget Actual Variance Revenues: Taxes $ 40,000 $ 9,919 $ (30,081) $ $ $ Licenses, permits and impact fees - - Intergovernmental Charges for services Fines and forfeitures - - - Interest income 2,000 3,482 1,482 1,569 1,569 Special assessments - - - 90,000 118,526 28,526 Miscellaneous - - - Total revenues Expenditures: Current: General government Public safety Physical environment Transportation Economic environment Human services Culture and recreation Debt service Capital outlay Total expenditures Excess (deficit) of revenues over(under)expenditures Other financing sources (uses): Bonds issued Premiums on bonds issued Payment to refunding bond escrow Sale of capital assets Insurance proceeds Transfers in Transfers out Total other financing sources (uses) Net change in fund balances 42,000 13,401 (28,599) 90,000 120,095 30,095 3,000 3,000 194,300 189,519 4,781 3,000 3,000 194,300 189,519 4,781 39,000 13,401 (25,599) (104,300) (69,424) 34,876 - 30,000 924 (29,076) (267,900) (251,100) 16,800 (5,500) (3,985) 1,515 (267,900) (251,100) 16,800 24,500 (3,061) (27,561) (228,900) (237,699) (8,799) (79,800) (72,485) 7,315 Fund balances at beginning of year 231,000 231,000 88,900 88,900 Fund balances (deficits) at end of year $ 2,100 $ (6,699) $ (8,799) $ 9,100 $ 16,415 $ 7,315 See accompanying independent auditors' report. Reconciliation: Net change in fund balance, budgetary basis $ (237,699) $ (72,485) Change in fair value of investments (2) Advances budgeted as transfers - Unbudgetedfunds Deferred revenues - Net change in fund balance, GAAP basis $ (237,699) 114 Limited General Obligation Bonds, Community Redevelopment Conservation Collier (Budgetary Basis) Taxable Note (Budgetary Basis) Budget Actual Variance Budget Actual Variance $ 9,226,800 $ 8,838,543 $ (388,257) $ $ $ 4,400 10,327 5,927 6,000 11,774 5,774 9,231,200 8,848,870 (382,330) 6,000 11,774 5,774 15,628,500 15,625,832 2,668 1,732,300 1,347,594 384,706 15,628,500 15,625,832 2,668 1,732,300 1,347,594 384,706 (6,397,300) (6,776,962) (379,662) (1,726,300) (1,335,820) 390,480 8,676,800 8,350,447 (326,353) 1,725,400 1,347,594 (377,806) (1,958,500) (1,629,428) 329,072 6,718,300 6,721,019 2,719 1,725,400 11347,594 (377,806) 321,000 (55,943) (376,943) (900) 11,774 12,674 140,400 140,400 1,560,900 1,560,900 - $ 461,400 $ 84,457 $ (376,943) $ 1,560,000 $ 1,572,674 $ 12,674 $ (55,943) $ 11,774 (7) (90) $ (55,950) $ 11,684 115 COLLIER COUNTY, FLORIDA COMBINING SCHEDULE OF REVENUES, EXPENDITURES AND CHANGES IN FUND BALANCES BUDGET AND ACTUAL (BUDGETARY BASIS) MAJOR CAPITAL PROJECT AND NONMAJOR GOVERNMENTAL FUNDS FOR THE FISCAL YEAR ENDED SEPTEMBER 30, 2011 Revenues: Taxes Licenses, permits and impact fees Intergovernmental Charges for services Fines and forfeitures Interest income Special assessments Miscellaneous Total revenues Expenditures: Current: General government Public safety Physical environment Transportation Economic environment Human services Culture and recreation Debt service Capital outlay Total expenditures Excess (deficit) of revenues over(under)expenditures Other financing sources (uses): Bonds issued Premiums on bonds issued Payment to refunding bond escrow Sale of capital assets Insurance proceeds Transfers in Transfers out Total other financing sources (uses) Net change in fund balances Forest Lakes Limited General Special Obligation Obligation Bonds (Budgetary Basis) Revenue Bonds (Budgetary Basis) Budget Actual Variance Budget Actual Variance $ 546,200 $ 528,696 $ (17,504) $ $ $ 20,000 1,176 (18,824) 569 569 566,200 529,872 (36,328) 569 569 560,300 558,427 1,873 4,606,288 4,546,776 59,512 560,300 558,427 1,873 4,606,288 4,546,776 59,512 5,900 (28,555) (34,455) (4,606,288) (4,546,207) 60,081 Fund balances at beginning of year 87,400 87,400 Fund balances (deficits) at end of year $ 73,600 $ 48,106 $ (25,494) $ 171,800 $ 228,775 $ 56,975 See accompanying independent auditors' report. Reconciliation: Net change in fund balance, budgetary basis $ (39,294) $ 228,775 Change in fair value of investments (5) (14) Advances budgeted as transfers - - Unbudgetedfunds Deferred revenues Net change in fund balance, GAAP basis $ (39,299) $ 228,761 116 24,620,000 24,620,000 - 2,050,400 2,050,315 (85) (26,270,900) (26,270,921) (21) 5,718 5,718 4,378,588 4,375,588 (3,000) (19,700) (16,457) 3,243 - (19,700) (10,739) 8,961 4,778,088 4,774,982 (3,106) (13,800) (39,294) (25,494) 171,800 228,775 56,975 Fund balances at beginning of year 87,400 87,400 Fund balances (deficits) at end of year $ 73,600 $ 48,106 $ (25,494) $ 171,800 $ 228,775 $ 56,975 See accompanying independent auditors' report. Reconciliation: Net change in fund balance, budgetary basis $ (39,294) $ 228,775 Change in fair value of investments (5) (14) Advances budgeted as transfers - - Unbudgetedfunds Deferred revenues Net change in fund balance, GAAP basis $ (39,299) $ 228,761 116 State Infrastructure Bank Loan County-Wide Capital Improvements (Budgetary Basis) Budget Actual Variance Budget Actual Variance 78,241 78,241 3,011 3,011 81,252 81,252 337 337 376,372 337 337 78,241 78,241 3,011 3,011 81,252 81,252 $ 337 $ 1,329,382 (596) 4,199,900 $ 337 $ 5,528,686 117 2,694,258 2,317,886 376,372 702,697 654,272 48,425 327 - 327 28,374 28,374 - 2,044,600 2,040,000 4,600 - - - - 6,257,594 1,078,750 5,178,844 2,044,600 2,040,000 4,600 9,683,250 4,079,282 5,603,968 (2,044,600) (2,039,663) 4,937 (9,683,250) (3,998,030) 5,685,220 - - - 212 212 2,044,600 2,040,000 (4,600) 9,527,100 9,527,100 - - - - (4,199,900) (4,199,900) 2,044,600 2,040,000 (4,600) 5,327,200 5,327,412 212 337 337 (4,356,050) 1,329,382 5,685,432 181,800 181,800 8,669,899 8,669,899 $ 181,800 $ 182,137 $ 337 $ 4,313,849 $ 9,999,281 $ 5,685,432 $ 337 $ 1,329,382 (596) 4,199,900 $ 337 $ 5,528,686 117 COLLIER COUNTY, FLORIDA COMBINING SCHEDULE OF REVENUES, EXPENDITURES AND CHANGES IN FUND BALANCES BUDGET AND ACTUAL (BUDGETARY BASIS) MAJOR CAPITAL PROJECT AND NONMAJOR GOVERNMENTAL FUNDS FOR THE FISCAL YEAR ENDED SEPTEMBER 30, 2011 Revenues: Taxes Licenses, permits and impact fees Intergovernmental Charges for services Fines and forfeitures Interest income Special assessments Miscellaneous Total revenues Expenditures: Current: General government Public safety Physical environment Transportation Economic environment Human services Culture and recreation Debt service Capital outlay Total expenditures Excess (deficit) of revenues over(under)expenditures Other financing sources (uses): Bonds issued Premiums on bonds issued Payment to refunding bond escrow Sale of capital assets Insurance proceeds Transfers in Transfers out Total other financing sources (uses) Net change in fund balances Parks Improvements County-Wide Library (Budgetary Basis) Impact Fees (Budgetary Basis) Budget Actual Variance Budget Actual Variance 422,200 529,381 107,181 320,000 397,088 77,088 300,000 50,000 (250,000) 80,000 88,495 8,495 9,000 23,689 14,689 3,000,000 3,052,002 52,002 3,802,200 3,719,878 (82,322) 329,000 420,777 91,777 783,974 334,548 449,426 139,915 66,042 73,873 13,542,472 727,549 12,814,923 1,429,912 642,357 787,555 Deferred revenues - Net change in fund balance, GAAP basis $ 2,299,064 14,326,446 1,062,097 13,264,349 1,569,827 708,399 861,428 (10,524,246) 2,657,781 13,182,027 (1,240,827) (287,622) 953,205 250,000 284,140 (399,500) (392,087) 34,140 7,413 (1,195,427) (1,195,427) (149,500) (107,947) 41,553 (1,195,427) (1,195,427) (10,673,746) 2,549,834 13,223,580 (2,436,254) (1,483,049) 953,205 Fund balances at beginning of year 10,852,544 10,852,544 3,986,488 3,986,488 Fund balances (deficits) at end of year $ 178,798 $ 13,402,378 $ 13,223,580 $ 1,550,234 $ 2,503,439 $ 953,205 See accompanying independent auditors' report. Reconciliation: Net change in fund balance, budgetary basis $ 2,549,834 $ (1,483,049) Change in fair value of investments (770) (150) Advances budgeted as transfers (250,000) - Unbudgetedfunds Deferred revenues - Net change in fund balance, GAAP basis $ 2,299,064 118 Correctional Facilities Emergency Medical Services Impact Fees (Budgetary Basis) Impact Fees (Budgetary Basis) Budget Actual Variance Budget Actual Variance 152,000 545,142 393,142 80,000 146,219 66,219 9,000 15,913 6,913 8,100 6,790 (1,310) 161,000 561,055 400,055 88,100 153,009 64,909 153,128 57,802 95,326 116,081 36,853 79,228 95,138 - 95,138 15,007 11,329 3,678 248,266 57,802 190,464 131,088 48,182 82,906 (87,266) 503,253 590,519 (42,988) 104,827 147,815 1,810,100 1,810,100 (1,950,600) (1,950,600) (694,801) (694,801) (140,500) (140,500) (694,801) (694,801) (227,766) 362,753 590,519 (737,789) (589,974) 147,815 1,792,937 1,792,937 - 1,040,688 1,040,688 - $ 1,565,171 $ 2,155,690 $ 590,519 $ 302,899 $ 450,714 $ 147,815 $ 362,753 $ (589,974) (127) (26) (1,810,100) $ (1,447,474) $ (590,000) 119 COLLIER COUNTY, FLORIDA COMBINING SCHEDULE OF REVENUES, EXPENDITURES AND CHANGES IN FUND BALANCES BUDGET AND ACTUAL (BUDGETARY BASIS) MAJOR CAPITAL PROJECT AND NONMAJOR GOVERNMENTAL FUNDS FOR THE FISCAL YEAR ENDED SEPTEMBER 30, 2011 Revenues: Taxes Licenses, permits and impact fees Intergovernmental Charges for services Fines and forfeitures Interest income Special assessments Miscellaneous Total revenues Expenditures: Current: General government Public safety Physical environment Transportation Economic environment Human services Culture and recreation Debt service Capital outlay Total expenditures Excess (deficit) of revenues over(under)expenditures Other financing sources (uses): Bonds issued Premiums on bonds issued Payment to refunding bond escrow Sale of capital assets Insurance proceeds Transfers in Transfers out Total other financing sources (uses) Net change in fund balances Water Management Parks Impact Districts (Budgetary Basis) (Budgetary Basis) Budget Actual Variance Budget Actual Variance 2,911,774 1,145,309 1,766,465 408,204 323,466 84,738 12,003,123 3,274,363 8,728,760 4,296,452 936,408 3,360,044 14,914,897 4,419,672 10,495,225 4,704,656 1,259,874 3,444,782 (13,565,750) (3,059,103) 10,506,647 (2,891,256) 1,991,630 4,882,886 5,681,700 5,684,153 2,453 (1,662,200) (1,500,864) 161,336 (3,116,000) (3,116,000) 4,019,500 4,183,289 163,789 (3,116,000) (3,116,000) - (9,546,250) 1,124,186 10,670,436 (6,007,256) (1,124,370) 4,882,886 Fund balances at beginning of year 9,611,650 9,611,650 13,784,551 13,784,551 Fund balances (deficits) at end of year $ 65,400 $ 10,735,836 $ 10,670,436 $ 7,777,295 $ 12,660,181 $ 4,882,886 See accompanying independent auditors' report. Reconciliation: Net change in fund balance, budgetary basis $ 1,124,186 $ (1,124,370) Change in fair value of investments (601) (723) Advances budgeted as transfers - - Unbudgetedfunds Deferred revenues - Net change in fund balance, GAAP basis $ 1,123,585 $ (1,125,093) 120 121,600 117,221 (4,379) 1,725,000 2,879,219 1,154,219 1,000,000 1,000,000 - 276,492 276,492 57,700 73,485 15,785 88,400 94,053 5,653 - 15 15 - - 169,847 169,848 1 1,740 1,740 1,349,147 1,360,569 11,422 1,813,400 3,251,504 1,438,104 2,911,774 1,145,309 1,766,465 408,204 323,466 84,738 12,003,123 3,274,363 8,728,760 4,296,452 936,408 3,360,044 14,914,897 4,419,672 10,495,225 4,704,656 1,259,874 3,444,782 (13,565,750) (3,059,103) 10,506,647 (2,891,256) 1,991,630 4,882,886 5,681,700 5,684,153 2,453 (1,662,200) (1,500,864) 161,336 (3,116,000) (3,116,000) 4,019,500 4,183,289 163,789 (3,116,000) (3,116,000) - (9,546,250) 1,124,186 10,670,436 (6,007,256) (1,124,370) 4,882,886 Fund balances at beginning of year 9,611,650 9,611,650 13,784,551 13,784,551 Fund balances (deficits) at end of year $ 65,400 $ 10,735,836 $ 10,670,436 $ 7,777,295 $ 12,660,181 $ 4,882,886 See accompanying independent auditors' report. Reconciliation: Net change in fund balance, budgetary basis $ 1,124,186 $ (1,124,370) Change in fair value of investments (601) (723) Advances budgeted as transfers - - Unbudgetedfunds Deferred revenues - Net change in fund balance, GAAP basis $ 1,123,585 $ (1,125,093) 120 Road Impact Districts Road Construction (Budgetary Basis) (Budgetary Basis) Budget Actual Variance Budget Actual Variance $ - $ - $ $ 12,543,600 $ 12,791,958 $ 248,358 10,830,000 6,904,293 (3,925,707) - - - - - 10,988,500 8,505,474 (2,483,026) 46,714 60,274 13,560 633,500 475,086 (158,414) 681,048 530,376 (150,672) 328,415 328,415 787,321 1,208,139 420,818 11,463,500 7,707,794 (3,755,706) 25,047,183 23,096,221 (1,950,962) 9,169,412 3,243,434 5,925,978 10,795,913 13,450,975 (2,655,062) 51,511,289 10,094,614 41,416,675 60,493,352 8,206,738 52,286,614 60,680,701 13,338,048 47,342,653 71,289,265 21,657,713 49,631,552 (49,217,201) (5,630,254) 43,586,947 (46,242,082) 1,438,508 47,680,590 16,998,100 8,698,100 (8,300,000) (1,054,450) (1,OS4,450) (23,912,452) (22,259,353) 1,653,099 (1,054,450) (1,054,450) - (6,914,352) (13,561,253) (6,646,901) (50,271,651) (6,684,704) 43,586,947 (53,156,434) (12,122,745) 41,033,689 59,120,350 59,120,350 68,203,825 68,203,825 $ 8,848,699 $ 52,435,646 $ 43,586,947 $ 15,047,391 $ 56,081,080 $ 41,033,689 $ (6,684,704) $ (12,122,745) (3,244) (2,883) (203,011) $ (6,687,948) $ (12,328,639) 121 COLLIER COUNTY, FLORIDA COMBINING SCHEDULE OF REVENUES, EXPENDITURES AND CHANGES IN FUND BALANCES BUDGET AND ACTUAL (BUDGETARY BASIS) MAJOR CAPITAL PROJECT AND NONMAJOR GOVERNMENTAL FUNDS FOR THE FISCAL YEAR ENDED SEPTEMBER 30, 2011 Law Enforcement Impact Fees Other Capital Projects (Budgetary Basis) (Budgetary Basis) See accompanying independent auditors' report. Reconciliation: Net change in fund balance, budgetary basis Budget Actual Variance Budget Actual Variance (1,700,000) Deferred revenues Net change in fund balance, GAAP basis $ (2,323,387) $ (463,898) Revenues: Taxes $ - $ - $ - $ - $ - $ Licenses, permits and impact fees 175,000 303,998 128,998 2,000 7,996 5,996 Intergovernmental - - - - Charges for services 14,700 14,700 Fines and forfeitures - - - - - - Interest income 9,000 26,158 17,158 13,100 31,516 18,416 Special assessments - - - 35,000 35,667 667 Miscellaneous 101,280 101,280 5,984 55,985 50,001 Total revenues 184,000 431,436 247,436 56,084 145,864 89,780 Expenditures: Current: General government - - - 952,442 119,940 832,502 Public safety 189,929 139,685 50,244 2,942 390 2,552 Physical environment - - - 1,318,019 1,004,556 313,463 Transportation - - - Economic environment Human services - - - Culture and recreation 155,434 147,269 8,165 Debt service - - - - - Capital outlay 72,036 - 72,036 1,509,763 959,344 550,419 Total expenditures 261,965 139,685 122,280 3,938,600 2,231,499 1,707,101 Excess (deficit) of revenues over(under)expenditures (77,965) 291,751 369,716 (3,882,516) (2,085,635) 1,796,881 Other financing sources (uses): Bonds issued - - Premiums on bonds issued Payment to refunding bond escrow Sale of capital assets - - insurance proceeds - - 6,000 6,000 - Transfers in 1,700,000 1,700,000 1,680,650 1,681,590 940 Transfers out (2,615,000) (2,615,000) (96,800) (65,689) 31,111 Total other financing sources (uses) (915,000) (915,000) - 1,589,850 1,621,901 32,051 Net change in fund balances (992,965) (623,249) 369,716 (2,292,666) (463,734) 1,828,932 Fund balances at beginning of year 3,053,566 3,053,566 - 2,711,668 2,711,668 fund balances (deficits) at end of year $ 2,060,601 $ 2,430,317 $ 369,716 $ 419,002 $ 2,247,934 $ 1,828,932 See accompanying independent auditors' report. Reconciliation: Net change in fund balance, budgetary basis $ (623,249) $ (463,734) Change in fair value of investments (138) (164) Advances budgeted as transfers Unbudgeted funds (1,700,000) Deferred revenues Net change in fund balance, GAAP basis $ (2,323,387) $ (463,898) 122 Nonmajor Enterprise Funds EMERGENCY MEDICAL SERVICES — To account for the provision of emergency ambulance and paramedical services to users throughout the County. GOODLAND WATER — To account for the provision of potable water services to residents of Goodland. AIRPORT AUTHORITY — To account for the provision of landing facilities and the sale of fuel at the airports. COLLIER AREA TRANSIT — To account for the provision of public transportation throughout the County. COLLIER COUNTY, FLORIDA COMBINING STATEMENT OF NET ASSETS NONMAJOR ENTERPRISE FUNDS SEPTEMBER 30, 2011 Noncurrent assets: Capital assets: Total Current liabilities: Emergency Land and nondepreciable capital assets - - 7,527,168 Collier Nonmajor Depreciable capital assets, net Medical Goodland Airport Area Enterprise 14,397,046 Services Water Authority Transit Funds ASSETS - 47 941,592 941,639 Current assets: - 1,888 54,155 56,043 Cash, cash equivalents and investments $ 1,136,357 $ 278,583 $ 1,501,284 $ 1,238 $ 2,917,462 Receivables: 477,728 46,647 7,601 531,976 Trade, net 3,148,747 14,630 16,405 160 3,179,942 Interest 2,512 358 1,962 650 5,482 Unbilled revenue 177,369 8,690 - - 186,059 Due from other funds 14 - 249,906 12,044 12,058 Due from other governments 893 - - 893 Inventory 15,764 - 135,019 - 150,783 Restricted assets: 1,454,101 4,723 2,413,441 1,929,310 5,801,575 Cash, cash equivalents and investments 76,993 151,984 69,144 298,121 Due from other governments - - 2,261,098 2,509,820 4,770,918 Total current assets 4,558,649 302,261 4,067,752 2,593,056 11,521,718 Noncurrent assets: Capital assets: Current liabilities: Land and nondepreciable capital assets - - 7,527,168 6,213,807 13,740,975 Depreciable capital assets, net 3,465,772 793,276 11,357,021 8,183,239 23,799,308 Total noncurrent assets 3,465,772 793,276 18,884,189 14,397,046 37,540,283 Total assets 8,024,421 1,095,537 22,951,941 16,990,102 49,062,001 LIABILITIES Current liabilities: Accounts payable 47,814 4,723 1,984,159 856,578 2,893,274 Wages payable 262,004 - 15,578 2,820 280,402 Due to other funds - 47 941,592 941,639 Due to other governments - 1,888 54,155 56,043 Due to individuals 377,316 - - 377,316 Compensated absences 477,728 46,647 7,601 531,976 Capital lease obligations 212,246 - - 212,246 Liabilities payable from restricted assets: Accounts payable - - 66,564 66,564 Retainage payable 249,906 - 249,906 Refundable deposits - 18,231 18,231 Unearned revenue 76,993 - 96,985 173,978 Total current liabilities 1,454,101 4,723 2,413,441 1,929,310 5,801,575 Noncurrent liabilities: Compensated absences 204,741 - 19,991 3,258 227,990 Capital lease obligations 174,565 - - 174,565 Total noncurrent liabilities 379,306 - 19,991 3,258 402,555 Total liabilities 1,833,407 4,723 2,433,432 1,932,568 6,204,130 NET ASSETS Invested in capital assets, net of related debt 3,078,961 793,276 18,884,189 14,397,046 37,153,472 Unrestricted 3,112,053 297,538 1,634,320 660,488 5,704,399 Total net assets $ 6,191,014 $ 1,090,814 $ 20,518,509 $ 15,057,534 $ 42,857,871 See accompanying independent auditors' report. 124 COLLIER COUNTY, FLORIDA COMBINING STATEMENT OF REVENUES, EXPENSES AND CHANGES IN NET ASSETS NONMAJOR ENTERPRISE FUNDS FOR THE FISCAL YEAR ENDED SEPTEMBER 30, 2011 Non - operating revenues (expenses): Total Operating grants and contributions Emergency - - Collier Nonmajor Interest income Medical Goodland Airport Area Enterprise Insurance reimbursement Services Water Authority Transit Funds Operating revenues: (22,243) - (1,014) - (23,257) Charges for services $ 8,959,199 $ 404,322 $ 2,918,202 $ 1,260,770 $ 13,542,493 Miscellaneous 20,236 1,575 19,945 29,565 71,321 Total operating revenues 8,979,435 405,897 2,938,147 1,290,335 13,613,814 Operating expenses: 5,824,872 Transfers in 11,316,100 527,000 Personal services 18,391,128 - 1,120,192 101,617 19,612,937 Operating 3,369,934 439,280 2,473,405 8,669,199 14,951,818 Depreciation 737,284 56,329 848,605 1,172,057 2,814,275 Total operating expenses 22,498,346 495,609 4,442,202 9,942,873 37,379,030 Operating loss (13,518,911) (89,712) (1,504,055) (8,652,538) (23,765,216) Non - operating revenues (expenses): Operating grants and contributions 35,026 - - 4,322,765 4,357,791 Interest income 24,067 2,759 16,067 3,597 46,490 Insurance reimbursement 62,347 1,200 2,827 2,088 68,462 Interest expense (22,243) - (1,014) - (23,257) Loss on disposal of capital assets (7,052) - (4,136) - (11,188) Total non - operating revenues (expenses) 92,145 3,959 13,744 4,328,450 4,438,298 Loss before contributions and transfers (13,426,766) (85,753) (1,490,311) (4,324,088) (19,326,918) Capital grants and contributions 2,816 4,432,549 1,389,507 5,824,872 Transfers in 11,316,100 527,000 4,431,916 16,275,016 Transfers out (3,000) (82,200) - - (85,200) Total transfers and contributions 11,315,916 (82,200) 4,959,549 5,821,423 22,014,688 Changes in net assets (2,110,850) (167,953) 3,469,238 1,497,335 2,687,770 Net assets - beginning 8,301,864 1,258,767 17,049,271 13,560,199 40,170,101 Net assets - ending $ 6,191,014 $ 1,090,814 $ 20,518,509 $ 15,057,534 $ 42,857,871 See accompanying independent auditors' report. 125 COLLIER COUNTY, FLORIDA COMBINING STATEMENT OF CASH FLOWS NONMAIOR ENTERPRISE FUNDS FOR THE FISCAL YEAR ENDED SEPTEMBER 30, 2011 Total Emergency Collier Nonmajor Medical Goodland Airport Area Enterprise Services Water Authority Transit Funds Cash flows from operating activities: 1,200 832 2,088 66,467 - Cash received for services $ 9,732,524 $ 417,125 $ 2,944,674 $ 1,282,660 $ 14,376,983 Cash payments for goods and services (1,987,816) (304,782) (2,132,103) (6,584,112) (11,008,813) Cash payments to employees (19,056,692) - (1,155,452) (102,573) (20,314,717) Cash payments for interfund services (1,433,050) (131,578) (385,008) (2,139,856) (4,089,492) Cash payments on refundable deposits 1,238 $ (72) (72) Net cash provided by (used for) operating activities (12,745,034) (19,235 ) (727,961) (7,543,881) (21,036,111) Cash flows from non - capital financing activities: 69,144 298,121 Cash, cash equivalents and investments, September 30, 2011 Cash received from operating grants 40,265 - - 2,812,247 2,852,512 Cash transfers from other funds 11,316,100 883,236 9,344,980 21,544,316 Cash transfers to other funds (3,000) (82,200 ) (356,236) 4,199,660) (4,641,096) Net cash provided by (used for) non - capital - - financing activities 11,353,365 (82,200 ) 527,000 7,957,567 19,755,732 Cash flows from capital and related financing activities: Receipts from insurance reimbursements Proceeds from disposal of capital assets Proceeds from capital grants Payments for capital acquisitions Principal payments on leases Interest and fiscal agent fees paid Net cash used for capital and related financing activities Cash flows from investing activities: Interest on investments Net cash provided by investing activities Net decrease in cash, cash equivalents and investments 62,347 1,200 832 2,088 66,467 - - 2,857 11,776 14,633 Cash, cash equivalents and investments, September 30, 2011 2,660,428 - 2,660,428 (102,481) (3,008,825) (462,868) (3,574,174) (231,106) (18,429) (249,535) (22,243) (1,014) (23,257) (293,483) 1,200 (364,151) (449,004) (1,105,438) 27,182 2,944 17,653 3,507 51,286 27,182 2,944 17,653 3,507 51,286 (1,657,970) (97,291) (547,459) (31,811) (2,334,531) Cash, cash equivalents and investments, October 1, 2010 2,871,320 375,874 2,200,727 102,193 5,550,114 Cash, cash equivalents and investments, September 30, 2011 $ 1,213,350 $ 278,583 $ 1,653,268 $ 70,382 $ 3,215,583 - 5,831 9,868 - Cash, cash equivalents and investments $ 1,136,357 $ 278,583 $ 1,501,284 $ 1,238 $ 2,917,462 Cash, cash equivalents and investments - restricted 76,993 - 151,984 69,144 298,121 Cash, cash equivalents and investments, September 30, 2011 $ 1,213,350 $ 278,583 $ 1,653,268 $ 70,382 $ 3,215,583 Operating loss Adjustments to reconcile operating loss to net cash provided by (used for) operating activities: Depreciation expense Net changes in assets and liabilities: Trade receivable Due from other funds Due from other governments Inventory Accounts payable Wages payable Due to other funds Due to other governments Due to individuals Compensated absences Refundable deposits Unearned revenue Total adjustments Net cash provided by (used for) operating activities Non -cash investing, capital and financing activities: Change in fair value of investments Contributed capital assets $ (13,518,911) $ (89,712) $ (1,504,055) $ (8,652,538) $ (23,765,216) 737,284 56,329 848,605 1,172,057 2,814,275 747,272 11,228 12,702 24,370 795,572 (14) - - (12,043) (12,057) 5,831 - 5,831 9,868 - (16,486) (6,618) (60,104) 2,920 (27,220) (53,865) (138,269) (573,026) - (34,882) (2,541) (610,449) (244) - 2,294 2,050 58 (23,200) (23,142) (452) - - (452) (92,538) (378) 1,585 (91,331) - (72) - (72) - - (6,233) - (6,233) 773,877 70,477 776,094 1,108,657 2,729,105 $ (12,745,034) $ (19,235) $ (727,961) $ (7,543,881) 1 (21,036,111) $ (138) $ (17) $ (91) $ (38) $ (284) 2,816 - - 1,389,507 1,392,323 See accompanying independent auditors' report. 126 Internal Service Funds SELF - INSURANCE — To account for the self- insurance costs of providing coverage for property, general and vehicle liability. To account for the provisions of health benefits to Board and participating constitutional officer employees and their dependents. To account for payment of workers' compensation claims, in lieu of insurance. SHERIFF'S SELF - INSURANCE — To account for the provisions of health benefits to Sheriff employees and their dependents. To account for payment of workers' compensation claims, in lieu of insurance. FLEET MANAGEMENT — To account for fuel, oil, lubricants, repairs and maintenance of County vehicles and the use of certain County owned vehicles by County employees. INFORMATION TECHNOLOGY — To account for the costs of operating the County data processing facility and telephone communication system. ASSETS Current assets: Cash, cash equivalents and investments Receivables: Trade, net Interest Due from other funds Due from other governments Deposits Inventory Prepaid costs Total current assets Noncurrent assets: Capital assets: Depreciable capital assets, net Total noncurrent assets Total assets LIABILITIES Current liabilities: COLLIER COUNTY, FLORIDA COMBINING STATEMENT OF NET ASSETS INTERNAL SERVICE FUNDS SEPTEMBER 30, 2011 Sheriff's Self- Self- Fleet Information Insurance Insurance Management Technology Total $ 26,312,066 $ 14,650,620 $ 569,253 $ 1,408,048 $ 42,939,987 254,413 151,534 647 47,119 453,713 34,511 - 561 1,609 36,681 - 780,436 95 - 780,531 - - 42,706 9,800 52,506 424,553 - - 424,553 - 604,745 - 604,745 - - - 49,410 49,410 27,025,543 15,582,590 1,218,007 1,515,986 45,342,126 305,354 12,648,312 8,300,833 21,254,499 305,354 12,648,312 8,300,833 21,254,499 27,330,897 15,582,590 13,866,319 9,816,819 66,596,625 Accounts payable 88,765 396,210 703,540 1,188,515 Wages payable 17,060 31,110 52,421 100,591 Due to other funds 850,546 - - 35,000 885,546 Self- insurance claims payable 3,463,175 2,251,000 - - 5,714,175 Compensated absences 82,792 - 107,725 174,494 365,011 Total current liabilities 4,502,338 2,251,000 535,045 965,455 8,253,838 Noncurrent liabilities: Self- insurance claims payable 1,928,324 - - - 1,928,324 Compensated absences 35,482 - 46,168 74,783 156,433 Net pension obligation 437,881 1,140,863 - 1,578,744 Total noncurrent liabilities 2,401,687 1,140,863 46,168 74,783 31663,501 Total liabilities 6,904,025 3,391,863 581,213 1,040,238 11,917,339 NET ASSETS invested in capital assets, net of related debt 305,354 - 12,648,312 8,300,833 21,254,499 Unrestricted 20,121,518 12,190,727 636,794 475,748 33,424,787 Total net assets $ 20,426,872 $ 12,190,727 $ 13,285,106 $ 8,776,581 $ 54,679,286 See accompanying independent auditors' report. 128 COLLIER COUNTY, FLORIDA COMBINING STATEMENT OF REVENUES, EXPENSES AND CHANGES IN FUND NET ASSETS INTERNAL SERVICE FUNDS FOR THE FISCAL YEAR ENDED SEPTEMBER 30, 2011 See accompanying independent auditors' report. 129 Sheriffs Self- Self- Fleet Information Insurance Insurance Management Technology Total Operating revenues: Charges for services $ 39,208,945 $ 19,579,579 $ 7,981,957 $ 5,801,846 $ 72,572,327 Miscellaneous 25,324 - 6,074 81,461 112,859 Total operating revenues 39,234,269 19,579,579 7,988,031 5,883,307 72,685,186 Operating expenses: Personal services 1,102,253 2,019,824 3,297,947 6,420,024 Operating 37,923,333 17,815,915 6,269,793 2,047,395 64,056,436 Depreciation 20,553 - 561,427 1,433,259 2,015,239 Total operating expenses 39,046,139 17,815,915 8,851,044 6,778,601 72,491,699 Operating income (loss) 188,130 1,763,664 (863,013) (895,294) 193,487 Non - operating revenues (expenses): Interest income 240,487 32,649 4,474 8,356 285,966 Insurance reimbursement 580,218 - 395 - 580,613 Loss on disposal of capital assets - - (2,527) (2,663) (5,190) Total non- operating revenues (expenses) 820,705 32,649 2,342 5,693 861,389 Income (loss) before contributions 1,008,835 1,796,313 (860,671) (889,601) 1,054,876 Capital grants and contributions - - 12,032 37,573 49,605 Transfers out (850,000) - - - (850,000) Change in net assets 158,835 1,796,313 (848,639) (852,028) 254,481 Net assets - beginning 20,268,037 10,394,414 14,133,745 9,628,609 54,424,805 Net assets - ending _$ 201426,872 $ 121190 727 $ 13,285,106 $ 8,776,581 $ 54,679,286 See accompanying independent auditors' report. 129 COLLIER COUNTY, FLORIDA COMBINING STATEMENT OF CASH FLOWS INTERNAL SERVICE FUNDS FOR THE FISCAL YEAR ENDED SEPTEMBER 30, 2011 Cash flows from operating activities: Cash received from other funds for services Cash received from employees for services Cash received from other governments for services Cash received from retirees for services Cash payments on behalf of retirees Cash payments for goods and services Cash payments to employees Cash payments for interfund services Net cash provided by (used for) operating activities Cash flows from capital and related financing activities: Receipts from insurance reimbursements Proceeds from disposal of capital assets Payments for capital acquisitions Net cash provided by (used for) capital and related financing activities Cash flows from investing activities: Interest on investments Net cash provided by investing activities Net increase (decrease) in cash, cash equivalents and investment Cash, cash equivalents and investments, October 1, 2010 Cash, cash equivalents and Investments, September 30, 2011 Operating Income (loss) Adjustments to reconcile operating income (loss) to net cash provided (used for) by operating activities: Depreciation expense Net changes in assets and liabilities: Trade receivable Due from other funds Due from other governments Deposits Inventory Prepaid costs Accounts payable Wages payable Due to other funds Compensated absences Self- insurance claims payable Net pension obligation Total adjustments Net cash provided by (used for) operating activities Non -cash investing, capital and financing activities: Change in fair value of investments Contributed capital assets See accompanying independent auditors' report. Sheriff's Self- Self- Fleet Information Insurance Insurance Management Technology Total $ 34,583,808 $19,164,973 $ 7,527,460 $ 5,868,280 $ 67,144,521 4,627,305 - - 4,627,305 - - 418,998 418,998 724,319 499,143 - 1,223,462 (726,021) (341,007) - (1,067,028) (38,759,440) (17,517,932) (6,116,002) (1,930,735) (64,324,109) (1,132,615) (2,078,811) (3,405,558) (6,616,984) (93,903) (271,600) (36,778) (402,281) (776,547) 1,805,177 (519,955) 495,209 1,003,884 538,710 - 538,710 - 4,356 4,356 (73,536) (106,955) (86,945) (267,436) 465,174 (102,599) (86,945) 275,630 247,750 32,649 4,901 6,747 292,047 247,750 32,649 4,901 6,747 292,047 (63,623) 1,837,826 (617,653) 415,011 1,571,561 26,375,689 12,812,794 1,186,906 993,037 41,368,426 $ 26,312,066 $14,650,620 $ 569,253 $ 1,408,048 $ 42,939,987 $ 188,130 $ 1,763,664 $ (863,013) $ (895,294) $ 193,487 20,553 - 561,427 1,433,259 2,015,239 (74,883) (151,534) 5,454 (45,167) (266,130) - 84,537 (71) 5,000 89,466 1,000 - (42,655) (9,800) (51,455) 93,714 93,714 1,921 - (38,598) (36,677) - - 23,042 (49,410) (26,368) (60,414) - (102,253) 129,292 (33,375) (33,454) - (60,264) (102,452) (196,170) 152 (4,301) 34,940 30,791 3,092 - 1,277 (5,159) (790) (1,063,501) 97,000 - - (966,501) 147,143 11,510 - 158,653 (964,677) 41,513 343,058 1,390,503 810,397 $ (776,547) $ 1,805,177 $ (519,955) $ 495,209 $ 1,003,884 $ (1,798) $ (10,405) $ (27) $ (36,811) $ (49,041) 12,033 37,573 49,606 130 Fiduciary Funds CLERK OF COURTS AGENCY FUND — To account for monies held in Trust by the Clerk of the Circuit Court prior to disbursement. SHERIFF AGENCY FUND — To account for monies held in a custodial capacity by the Sheriff. TAX COLLECTOR AGENCY FUND — To account for assets held by the Tax Collector prior to legal disbursement. DEPOSITS AGENCY FUND — To account for monies held by the County for businesses and individuals. PINE RIDGE AND NAPLES PRODUCTION PARK AGENCY FUND — To account for the receipt of special assessments and the payment of principal and interest on behalf of assessment holders. COLLIER COUNTY, FLORIDA COMBINING STATEMENT OF FIDUCIARY ASSETS AND LIABILITIES AGENCY FUNDS SEPTEMBER 30, 2011 LIABILITIES Due to other governments $ 2,266,815 $ 45,180 $ 5,309,135 $ - $ $ 7,621,130 Due to individuals - 427,771 142,992 - 570,763 Refundable deposits 16,639,144 - - 3,232,093 19,871,237 Due to special assessment holders - - 370,134 370,134 Total liabilities $ 18,905,959 $ 472,951 $ 5,452,127 $ 3,232,093 $ 370,134 $28,433,264 See accompanying independent auditors' report. 132 Pine Ridge Clerk Tax and Naples of Courts Sheriff Collector Deposits Production Park Agency Fund Agency Fund Agency Fund Agency Fund Agency Fund Total ASSETS Cash, cash equivalents and investments $ 18,905,959 $ 464,087 $ 5,443,691 $ 3,228,598 $ 363,024 $28,405,359 Receivables: Interest - - - 3,495 569 4,064 Other - 8,864 8,436 6,541 23,841 Total assets $ 18,905,959 $ 472,951 $ 5,452,127 $ 3,23.2 93 $ 370,134 $28,433,264 LIABILITIES Due to other governments $ 2,266,815 $ 45,180 $ 5,309,135 $ - $ $ 7,621,130 Due to individuals - 427,771 142,992 - 570,763 Refundable deposits 16,639,144 - - 3,232,093 19,871,237 Due to special assessment holders - - 370,134 370,134 Total liabilities $ 18,905,959 $ 472,951 $ 5,452,127 $ 3,232,093 $ 370,134 $28,433,264 See accompanying independent auditors' report. 132 COLLIER COUNTY, FLORIDA COMBINING STATEMENT OF CHANGES IN ASSETS AND LIABILITIES ALL AGENCY FUNDS FOR THE FISCAL YEAR ENDED SEPTEMBER 30, 2011 Balance Balance October 1 Additions Deductions September 30 Clerk of Courts Agency Fund Assets: Cash, cash equivalents and investments $ 21,474,385 $ 220,536,370 $ 223,104,796 $ 18,905,959 Total assets $ 21,474,385 $ 220,536,370 $ 223,104,796 $ 18,905,959 Liabilities: Due to other governments $ 1,471,636 $ 10,434,882 $ 9,639,703 $ 2,266,815 Refundable deposits 20,002,749 210,101,488 213,465,093 16,639,144 Total liabilities $ 21,474,385 $ 220,536,370 $ 223,104,796 $_18,905,959 Sheriff Agency Fund Assets: Cash, cash equivalents and investments $ 450,824 $ 4,375,846 $ 4,362,583 $ 464,087 Receivable: Other 8,864 - 8,864 Total assets $ 450,824 $ 4,384,710 $ 4,362,583 $ 472,951 Liabilities: Due to other governments $ 66,122 $ 342,669 $ 363,611 $ 45,180 Due to individuals 384,702 1,153,910 1,110,841 427,771 Total liabilities $ 450,824 $ 1,496,579 $ 11474,452 $ 472,951 Tax Collector Agency Fund Assets: Cash, cash equivalents and investments $ 6,584,222 $ 872,170,871 $ 873,311,402 $ 5,443,691 Receivable: Other 15,974 1,196,041 1,203,579 8,436 Total assets $ 6,600,196 $ 873,366,912 $ 874,514,981 $ 5,452,127 Liabilities: Due to other governments $ 5,098,571 $ 841,232,639 $ 841,022,075 $ 5,309,135 Due to individuals $ 1,501,625 $ 36,487,258 $ 37,845,891 $ 142,992 Total liabilities $ 6,600,196 $ 877,719,897 $ 878,867,966 $ 5,452,127 Deposits Agency Fund Assets: Cash, cash equivalents and investments $ 3,121,028 $ 359,052 $ 251,482 $ 3,228,598 Receivables: Interest 4,099 3,495 4,099 3,495 Total assets $ 3,125,127 $ 362,547 $ 255,581 $ 3,232,093 Liabilities: Refundable deposits $ 3,125,127 $ 355,854 $ 248,888 $ 3,232,093 Total liabilities $ 3,125,127 $ 355,854 $ 248,888 $ 3,232,093 (Continued) 133 COLLIER COUNTY, FLORIDA COMBINING STATEMENT OF CHANGES IN ASSETS AND LIABILITIES ALL AGENCY FUNDS FOR THE FISCAL YEAR ENDED SEPTEMBER 30, 2011 Pine Ridee and Naples Production Park Aaencv Fund Assets: Cash, cash equivalents and investments Receivables: Interest Other Total assets Liabilities: Due to special assessment holders Total liabilities Total - All Aaencv funds Assets: Cash, cash equivalents and investments Receivables: Interest Other Total assets Liabilities: Due to other governments Due to individuals Refundable deposits Due to special assessment holders Total liabilities See accompanying independent auditors' report. Balance Balance October 1 Additions Deductions September 30 $ 905,809 $ 841,436 $ 1,384,221 $ 363,024 1,299 569 1,299 569 13,783 6,541 13,783 6,541 $ 920,891 $ 848,546 $ 1,399,303 $ 370,134 $ 920,891 $ 848,546 $ 1,399,303 $ 370,134 $ 920,891 $ 848,546 $ 1,399,303 $ 370,134 $ 32,536,268 $ 1,098,283,575 $ 1,102,414,484 $ 28,405,359 5,398 4,064 5,398 4,064 29,757 11211,446 11217,362 23,841 $ 32,571,423 $ 1,099,499,085 $ 1,101637,244 $ 28,433,264 $ 6,636,329 $ 852,010,190 $ 851,025,389 $ 7,621,130 1,886,327 37,641,168 38,956,732 570,763 23,127,876 210,457,342 213,713,981 19,871,237 920,891 848,546 11399,303 370,134 $ 32,571,423 $ 1,100,957,246 $ 1,105,095,405 $ 28,433,264 134 Component Units COLLIER COUNTY HOUSING FINANCE AUTHORITY — The authority was established for the purpose of stimulating the construction of residential housing for low and moderate income families through the use of public financing. COLLIER COUNTY HEALTH FACILITIES AUTHORITY — The authority was established for the purpose of assisting health facilities in the acquisition, construction and financing of projects within the County. COLLIER COUNTY INDUSTRIAL DEVELOPMENT AUTHORITY — The authority was established for the purpose of facilitating projects that promote economic growth and opportunities for employment in Collier County. COLLIER COUNTY EDUCATIONAL FACILITIES AUTHORITY — The authority was established for the purpose of assisting institutions of higher education in the construction, financing and refinancing of projects. COLLIER COUNTY, FLORIDA COMPONENT UNITS COMBINING STATEMENT OF NET ASSETS SEPTEMBER 30, 2011 Housing Health Industrial Educational Finance Facilities Development Facilities Authority Authority Authority Authority Totals ASSETS Cash, cash equivalents and investments $ 284,552 $ 19,939 $ 2,550 $ 2,586 $ 309,627 Total Assets $ 284,552 $ 19,939 $ 2,550 $ 2,586 $ 309,627 NET ASSETS Net assets - unrestricted $ 284,552 $ 19,939 $ 2,550 $ 2,586 $ 309,627 Total Net Assets $ 284,552 $ 19,939 $ 2,550 $ 2,586 $ 309,627 See accompanying independent auditors' report. 136 COLLIER COUNTY, FLORIDA COMPONENT UNITS COMBINING STATEMENT OF ACTIVITIES FOR THE FISCAL YEAR ENDED SEPTEMBER 30, 2011 See accompanying independent auditor's report. 137 Net(Expense) Revenue and Changes Program Revenues in Net Assets Fees, Fines and Governmental FUNCTIONS /PROGRAMS Expenses Charges for Services Activities Industrial Development Authority $ 107,089 $ 102,375 $ (4,714) Health Facilities Authority 359,906 213,010 (146,896) Housing Finance Authority 680 2,000 1,320 Educational Facilities Authority 189 336 147 Total $ 467,864 $ 317,721 (150,143) General revenues: Interest income 338 Total general revenues 338 Change in net assets (149,805) Net assets - beginning 459,432 Net assets - ending $ 309,627 See accompanying independent auditor's report. 137 THIS PAGE INTENTIONALLY LEFT BLANK STATISTICAL SECTION (UNAUDITED) Statistical schedules differ from financial statements because they usually cover more than one fiscal year and may present non - accounting data. These schedules reflect social and economic data, and financial trends of Collier County, Florida. CONTENTS FINANCIAL TRENDS These schedules contain trend information to help the reader understand how the government's financial performance and wellbeing have changed over time. PAGE Net assets by component 140 Change in net assets 141 Governmental activities tax revenues by source 144 Fund balances of governmental funds 145 Changes in fund balance of governmental funds 146 REVENUE CAPACITY These schedules contain information to help the reader assess the Country's most significant local revenue source, the Property Tax. Assessed value and estimated actual value of taxable property 148 Property Tax Rates — All direct and overlapping governments 149 Principal Taxpayers County -wide 150 Property Tax levies and collections 151 DEBT CAPACITY These schedules present information to help reader assess the affordability of the County's current levels of outstanding debt and the County's ability to issue additional debt in the future. Ratios of outstanding debt by type 152 Ratios of general bonded debt outstanding 153 Legal debt margin information 154 Direct and overlapping governmental activities debt 154 Pledged- revenue coverage 155 DEMOGRAPHIC AND ECONOMIC INFORMATION These schedules offer demographic and economic indicators to help the rear understand the environment within which the County's financial activities take place. Demographic and economic statistics 156 Principal employers 157 OPERATING INFORMATION These schedules contain service and infrastructure data to help the reader understand how the information in the County's financial report relates to the services the County provides and the activities it performs. Full -time equivalent County employees by function 158 Operating indicators by function 159 Capital Asset statistics by function /program 160 Sources: Unless otherwise noted, the information in these schedules is derived from the comprehensive annual financial reports for the relevant year. The County implemented GASB 34 for fiscal year 2002. Schedules presenting government-wide information include information beginning in that fiscal year. 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F` 1C0 .�. l7 L7 F m F H U l7 m F 143 COLLIER COUNTY, FLORIDA GOVERNMENTAL ACTIVITIES TAX REVENUES BY SOURCE LAST TEN FISCAL YEARS (amounts expressed in thousands) (unaudited) Fiscal Property Gas Sales Tourist Other Year Tax Tax Tax Tax Taxes (1) Total 2002 $ 147,753 $ 17,333 $ 26,611 $ 8,184 $ 4,893 $ 204,774 2003 174,291 17,731 27,846 8,377 5,604 233,849 2004 213,353 19,887 31,323 9,720 5,796 280,079 2005 237,452 20,127 32,949 10,484 7,089 308,101 2006 293,240 20,028 34,671 13,629 9,142 370,710 2007 345,054 19,598 32,568 14,228 8,754 420,202 2008 327,245 18,860 30,004 14,796 4,051 394,956 2009 313,290 18,456 26,779 12,345 12,241 383,111 2010 299,389 18,415 26,927 12,857 10,039 367,627 2011 261,630 18,311 28,364 13,884 10,155 332,344 (1) Pursuant to the Uniform Accounting System direction from the State of Florida, the Communications Services Tax was shown with fees, fines and charges for services for fiscal year 2008, this changed in 2009. 144 0 O z C jn Q Fd- rs r 0 tYQ X,t czg O C W Q � z0 N v O m u p u, x W W U 41 i V O C Z O u g �= o C � R z n LL NN O N cn 8 N 9 N M 8 N 8 N m f0 Y N LL p O N co 8 im N 8 N N 1 N 11 1, I-I M M rn 00 n m m o rn 1- 00 M 1� m' (n N N M Ln N ulCL]I�L�C:i: cn to Ln rl alall v a 0 o v v la of r to ItAll N It/? oo w m m Ln Ln a cO10 o w a 00 m 1n rn m Ln m rl t, w a N to m to to sn to a m 00 -4 m N N to N m .-I et 1.1 ti 1-1 00 .-1 t0 M m 00 I U1 N N N m 1-1 to 1% 00 to 1-1 1l 00 m N Ln m M V1 Ln Ln 1-1 O M N N N t\ 1n ulC�ill�C��C�i: �I�I) O0 n t!1 N I ^ 1-4 m P, 00 N N N 0 I cli 14 I -II - I." 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U m d ,� Sr m 16 r- t ; 0 v c m N � � N .� a 4 > m E° °u c °° a c L a° F- w° O a F X U O a D_ F- w 2 V y a` O - ,� O U 146 Z U, J 2 O 00 W W C w a Z Z C C W Z U O u O O C C �o°l'" ,5mR Z W Luu 1• uZ-� X u W a L m y Cc J Z d 0 0 :) ~ O E U. -O Z E N W Z a x U t`o 0/ T N iZ N fV ti O Ln 9 N m n n 9 O N .4 a m N a° 00) try H 00 co O M W tD (Y1 N o l oo o l to n to n N M 'ch N Ln 00 H N tD to P m M to g CL 0° LM v m vi m N C r I I I I O C N 3 .1 O� C4 kD ° m �Ol u O N c N $ N oar tntan m N C Q 7 N O °n° l l cn m N M O a o rt°n N U9 O cn Ili W, H a = m $ W v a� m coo w 000 N a° w �' Y 01 O O H 'O A Ci C 7 y N C y v I I CML G N N rl O 88 O lm0 h Oat C CJ N Q N Ln p C , w •C 0 $ N N rq m O N N E. �' t0 VT L O i+ co r 00 tD O N O t0 O y M d 01 n � O ol N $ p opa 'V' tan lm0 N N N � v I 1 I 0 Ln Ln m $ Ln 0) w 00 •-I it m m oo H a co n .-I to w 00 m M I I rl H in T O O N n M co N co N M N N co O W N M %c rl $ lm0 ul O N ri � p N O to 1, 00 to M I- N m 00 e-1 M N N 1� m g cn `n-i a u'ni H ro m r4 ti v rn rn 0o 00 W a rn O N M M m O N O to � O I I N Ln Ch n w M M Lnn lG O to M N O M N N N N L O c d N N ` N N fV ti O Ln 9 N m n n 9 O N .4 a m N a° 00) try H 00 co O M W tD (Y1 N 147 N Y CL N U N C r O C N 3 � ° �Ol u In O1 m N C Q 7 O C C Lam' m N Z a m w f0 W w a° w �' Y 01 O O H 'O A Ci C 7 y C y v CML G N U Y CN In C CJ N Q V ` N 0 e C , w •C 0 C d E. �' t0 X L O i+ co m m 0. a u J N v0i C F- 1- y d Z p 147 COLLIER COUNTY, FLORIDA ASSESSED VALUE AND ESTIMATED ACTUAL VALUE OF TAXABLE PROPERTY LAST TEN FISCAL YEARS (amounts expressed in thousands) (unaudited) Fiscal Year Ended September 30, Residential Property Personal Property Centrally Assessed Property Less: Tax Exempt Total Taxable Assessed Value Total Direct Tax Rate Estimated Actual Taxable Value Assessed Value as a Percentage of Actual Value 2002 $ 36,089,299 $ 1,651,435 $ 110 $ 4,345,843 $ 33,395,001 13.0881 $ 37,740,844 100% 2003 42,635,220 1,770,370 113 4,915,279 39,490,424 12.8418 44,405,703 100% 2004 49,712,793 1,802,265 117 5,529,447 45,985,728 12.6800 51,515,175 100% 2005 55,370,248 1,820,777 127 5,928,339 51,262,813 12.3711 57,191,152 100% 2006 66,375,040 1,956,646 143 6,890,007 61,441,822 12.2586 68,331,829 100% 2007 82,909,061 2,156,726 202 8,023,791 77,042,198 11.5139 85,065,989 100% 2008 88,819,491 2,321,048 226 8,575,874 82,564,891 10.7366 91,140,765 100% 2009 86,949,935 2,430,996 202 10,718,166 78,662,967 10.3120 89,381,133 100% 2010 77,359,174 2,444,323 202 9,826,950 69,976,749 10.9869 79,803,699 100•/ 2011 67,947,039 2,259,654 171 8,770,667 61,436,197 11.4441 70,206,864 100% Property is assessed as of January 1, and taxes based on these assessments are levied and become due on the following November 1. Therefore, assessments and levies applicable to a certain tax year are collected in the fiscal year ending during the next succeeding calendar year. 'The basis of assessed value required by the state is 100% of actual value including tax exemptions. Source: Property Appraiser Recapitulation Report 148 COLLIER COUNTY, FLORIDA PROPERTY TAX RATES - ALL DIRECT AND OVERLAPPING GOVERNMENTS LAST TEN FISCAL YEARS (unaudited) Fiscal Year 2002 2003 2004 2005 2006 2007 2008 2009 2010 2011 Collier County Other County School Independent District Special Debt General Revenue Service 1.3813 Fund Funds Funds Total 6.5240 1.3562 12.6800 6.2200 3.8772 0.6670 0.0256 4.5698 3.8772 0.6767 0.0215 4.5754 3.8772 0.9226 0.0000 4.7998 3.8772 0.9177 0.0000 4.7949 3.8772 0.9161 0.1500 4.9433 3.5790 0.8470 0.2226 4.6486 3.1469 0.7362 0.2233 4.1064 3.1469 0.7528 0.2249 4.1246 3.5645 0.7225 0.1366 4.4236 3.5645 0.6926 0.1580 4.4151 Other County School Independent District Districts Total 7.1370 1.3813 13.0881 6.9110 1.3554 12.8418 6.5240 1.3562 12.6800 6.2200 1.3562 12.3711 5.9730 1.3423 12.2586 5.5250 1.3403 11.5139 5.3510 1.2792 10.7366 4.9090 1.2784 10.3120 5.2390 1.3243 10.9869 5.6990 1.3299 11.4440 Basis for property tax rates is 1 mill per $1,000 of assessed value. Property is assessed as of January 1 and taxes based on those assessments are levied according to the tax rate in effect that tax year and become due on November 1. Therefore, assessments and levies applicable to a certain tax year are collected in the fiscal year ending during the following calendar year. Sources: Property Appraiser Recapitulation Report Collier County 2011 Annual Budget 149 COLLIER COUNTY, FLORIDA PRINCIPAL TAXPAYERS COUNTY -WIDE 2011 TAX ROLL (amounts expressed in thousands) (unaudited) Owner/Taxpayer Property Taxes Levied 2011 Rank Percent of Total Taxes Levied Property Taxes Levied 2002 Rank Percent of Total Taxes Levied Florida Power & Light Company $ 2,514,323 1 0.34% $ 1,814,540 1 0.40% HHR Naples LLC 1,362,639 2 0.18% - - ' Century Link 912,781 3 0.12% 1,494,248 3 0.33% Lee County Electric 858,602 4 0.11% 576,303 10 0.13% City National Bank of Miami 818,982 5 0.11% 1,224,291 4 0.27% Wal -Mart Stores East LP 738,855 6 0.10% - - Naples HMA, Inc. 726,028 7 0.10% - - Coastland Center Joint Venture 677,172 8 0.09% 1,085,056 5 0.24% Collier HMA Inc 670,169 9 0.09% - - MERCATO LLP 660,539 10 0.09% - - HMC BN LTD Partnership - - 1,714,712 2 0.38% Marco Island Utilities 728,236 6 0.16% Collier Development Corporation 658,865 7 0.14% Lutgert TR, Raymond L 651,178 8 0.14% CC- Naples Inc - - 636,340 9 0.14% Total $ 9,940,090 1.33% $ 10,583,769 2.32% Total Property Taxes Levied $ 750,091,683 $ 455,219,272 Amounts for taxpayers with similar names have not been combined. Source: Property Appraiser's taxpayer listing in order of taxes levied. Property Appraiser Recapitulation Report. i Century Link was Sprint in 2002 150 COLLIER COUNTY, FLORIDA PROPERTY TAX LEVIES AND COLLECTIONS LAST TEN FISCAL YEARS (amounts expressed in thousands) (unaudited) Fiscal Year Total Tax Collected within the Ended Levy for Fiscal Year of the Levy Collections in Total Collections to Date September 30 Fiscal Year Amount Percentage of Levy Subsequent Years Amount Percentage of Levy 2002 $ 157,744 $ 146,033 92.6% $ 136 $ 146,169 92.7% 2003 185,633 174,116 93.8% 325 174,441 94.0% 2004 225,773 213,009 94.3% 240 213,249 94.5% 2005 251,772 237,184 94.2% 98 237,282 94.2% 2006 307,068 293,129 95.5% 109 293,238 95.5% 2007 362,568 344,945 95.1% 1,522 346,467 95.6% 2008 343,906 325,722 94.7% 1,191 326,913 95.1% 2009 329,070 312,096 94.8% 2,546 314,642 95.6% 2010 314,176 297,953 94.8% 1,355 299,308 95.3% 2011 275,704 260,961 94.7% - 260,961 94.7% Source: Tax Collector Annual Report 151 COLLIER COUNTY, FLORIDA RATIOS OF OUTSTANDING DEBT BY TYPE LAST TEN FISCAL YEARS (amounts expressed in thousands) (unaudited) Governmental Activities Business -type Activities General Loans and Loans and Total Percentage Fiscal Obligation Revenue Notes Capital Revenue Notes Capital Primary of Personal Per Year Bonds Bonds Payable Leases Bonds Payable Leases Government Income' Capital 2002 S 795 $ 85,185 $ 9,256 $ 791 $ 78,725 $ 40,369 $ 327 $ 215,448 2.11% 848 2003 - 176,775 8,486 279 71,505 55,335 165 312,545 2.86% 1,179 2004 - 208,980 51,649 108 66,860 74,545 73 402,215 3.47% 1,458 2005 32,815 444,375 14,030 82 62,515 113,067 25 666,909 5.61% 2,331 2006 29,530 429,735 51,546 1,029 58,060 124,629 - 694,529 5.46% 2,341 2007 25,815 409,620 57,331 897 163,630 106,932 68 764,293 5.02% 2,483 2008 27,830 394,145 103,461 752 158,885 103,903 618 789,594 4.39% 2,521 2009 36,719 377,940 89,590 599 153,980 106,935 492 766,255 3.86% 2,443 2010 29,162 421,285 19,689 439 148,983 106,509 636 726,703 3.68% 2,303 2011 14,280 402,040 16,914 269 144,014 99,518 387 677,422 3.54% 2,126 'See the Schedule of Demographic and Economic Statistics for personal income and population data. 152 COLLIER COUNTY, FLORIDA RATIOS OF GENERAL BONDED DEBT OUTSTANDING LAST TEN FISCAL YEARS (unaudited) Percentage of Estimated General Less: Amounts Actual Taxable Fiscal Obligation Available in Debt Value' of Per Year Bonds Service Fund Total Property Capital 2002 $ 795,000 $ 76,461 $ 718,539 0.002% 3 2003 - - - - - 2004 - - - - - 2005 32,815,000 21,935 32,793,065 0.057% 107 2006 29,530,000 22,576 29,507,424 0.043% 90 2007 25,815,000 4,312 25,810,688 0.030% 77 2008 27,830,000 374,496 27,455,504 0.030% 82 2009 36,719,204 451,641 36,267,563 0.041% 109 2010 29,161,925 496,997 28,664,928 0.036% 86 2011 14,280,000 401,748 13,878,252 0.020% 43 1See the Schedule of Assessed Value and Estimated Actual Value of Taxable Property for property value data. 2See the Schedule of Demographic and Economic Statistics population data. 153 COLLIER COUNTY, FLORIDA LEGAL DEBT MARGIN INFORMATION AS OF SEPTEMBER 30, 2011 (unaudited) The Constitution of the State of Florida, Florida Statute 200.181 and Collier County set no legal debt limit. DIRECT AND OVERLAPPING GOVERNMENTAL ACTIVITIES DEBT AS OF SEPTEMBER 30, 2010 (unaudited) Percentage Net Debt Applicable to This Governmental Entity Outstanding (1) Governmental Unit Direct Debt: Debt repaid with property taxes: County $ 13,878,252 100.00% Overlapping: Overlapping debt for governmental entities within Collier County is not presented. (1) Excludes amounts available in Debt Service Funds for payment of interest and principal. 154 Z Z Z Z Z Z Z Z W, 155 m m w m to m v w o v N M w tD n 0 N lO N N eri m ni 4 V v v v v m O rl M tll M O n w M ,-I N !n In M M N In M m W t M N O O sT !1 m w n V .1 M " N V1 n n t0 w M 2 � vn tm mo O a O N lO M V In n m N C v v v v v v v v Ln e dl y N n� N m N m ei n 'i � q C w w N l0 pp n M m w Z; N N N A M 'Q IN U1 in M a m in• � N o n v n m m n tD m n N m N n N t0 tO O tD m 0 an N rl N N to n n w orl ce~rm rnn m v in v v Ion p O W V? 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N v w m N to n O w 4% V m rl O V N e-I ~t .N-I 00 0) N n C6 m w v 0 to n ri n my M lD tD n w m 0 0 0 m c e rl ei q V G 3 q� 3� 88 8 888 8 00 ji Y N N N N N N N N N N v. V C O . • C f `1 q f x n H u N i w u u Ln 'n W u v 4 c u ci o c v e � o � � d C Ol i to E E u c O q U i w '10 O 3 a a 1 C ON C i p LL C 41 c L 1 Y l Cu `m C E 7 i wE y o > > v a V w 2 E v N O .2 ar v m v m � N o CQ � N � LL a � m q yNj t0 a r= a, v v 3 vl � � N u c m Ou C 7 O > C m tm, N q • Q '> m ` � U •" rm.. � .. Ln COLLIER COUNTY, FLORIDA DEMOGRAPHIC AND ECONOMIC STATISTICS LAST TEN FISCAL YEARS (unaudited) Per Capita Fiscal Personal Personal Median School Unemployment Year Population(1) Income(2) Income(2) Age(3) Enrollment(4) Rate(5) 2002 264,475 $ 10,197,520,000 $ 40,121 40.5 37,110 4.2% 2003 284,918 10,940,352,000 41,269 44.1 38,196 4.7% 2004 292,466 11,601,373,000 42,050 45.2 40,416 3.9% 2005 306,186 11,878,015,000 41,513 45.6 41,232 3.6% 2006 326,658 12,711,343,000 42,846 44.7 43,000 2.7% 2007 333,858 15,236,905,000 49,492 44.5 42,722 3.5% 2008 332,854 17,990,169,000 57,446 44.8 42,711 5.5% 2009 333,032 19,846,737,000 63,276 45.1 42,822 10.0% 2010 331,800 19,739,453,000 62,559 45.2 43,142 12.2% 2011 321,520 19,127,928,000 60,049 45.9 43,343 11.4% Sources: (1) www.fred.labormarketinfo.com (2) www.fred.labormarketinfo.com (3) Florida Statistical Abstract (Table 1.51) (4) Collier County School Board, based on full time equivalent enrollment (5) www.floridajobs.org 156 COLLIER COUNTY, FLORIDA PRINCIPAL EMPLOYERS (Unaudited) 2011 2002 Sources: www.eflorida.com Collier County Finance Department, Tax Collector, Property Appraiser and Collier County Sheriff Finance Department 2002 Collier County Adopted Budget Florida Department of labor & Employment; Bureau of Labor Market Information ES -202 report for 2002 and 2010. 157 Percent of Percent of Total County Total County Employer Employees Rank Employment Employees Rank Employment Collier County Public Schools 5,451 1 5.16% 4,908 1 4.70% NCH Healthcare System 3,007 2 2.85% 2,269 2 2.17% Publix Supermarkets 2,214 3 2.10% 2,221 3 2.13% Collier County Government (excl. Sheriff) 2,184 4 2.07% 2,091 4 2.00% Wal -Mart 1,547 5 1.47% - Collier County Sheriff's Office 1,387 6 1.31% 1,023 S 0.98% Marriott Corporation 743 7 0.70% - Fifth Third Bank 733 8 0.69% - Naples Grande Resort (Registry Resort) 605 9 0.57% 750 7 0.72% Barron Collier Partnership 600 10 0.57% - Ritz Carlton Hotel - 870 6 0.83% Winn Dixie Stores, Inc. 700 8 0.67% Bentley Resort - 550 9 0.53% Moorings Park - - 485 10 0.47% Other employers 87,114 82.51% 88,521 84.80% Totals 105,585 100.00% 104,388 100.00% Sources: www.eflorida.com Collier County Finance Department, Tax Collector, Property Appraiser and Collier County Sheriff Finance Department 2002 Collier County Adopted Budget Florida Department of labor & Employment; Bureau of Labor Market Information ES -202 report for 2002 and 2010. 157 Q 0 J LL Z D O U OG W J J O u iF C9 Q W } J L1) LL 7 = C l7 W H LA g m f0 U } l0 U LL ,p oo M ui oo un oo m v r,, o0 N w Ln V1 ri -ct M 00 N A tD O O ri 0) N m N r-I M O .-I M N N O U1 tD r-1 V1 M 0) N r-1 Ln � N O N m N ri tt O r-I r-I M N 'D t�D cT tD 14' 1-4 tmn 00 r-I N rm-I t^D Ol N ri N m M r-I tD N O 1, M 00 00 N n lD m In OO I� o� n N r-I Ln m m N r-1 oo 0^0 O r-I r-I M N 1, W L/1 * N I� V1 M N d' O0 ri 00 Ni tp N N It M M N-1 (D r-1 r-I 00 O r-I r-1 m N N M M* 1� O N tD 00 M O1 000 O tD N N Tt rl N 11 M r-I 00 C) r-I' r-I M M 1l r♦ ID i*, n lD Vl V1 Vl Ln f\ d O 00 LO N N N M T i1 IIi O M r-i -* O r-I r I M O N O_ 0) E 0o ri 00 tD m O lD t!1 V1 O 1l ri tD O N Ln N M N ri 00 N > ` 't It N m m .-I 00 O O r-I r-I 4., O E O M N � N N � 0! 01 .0 CL u E cu O N o E a.. y a� E is +� O v E c o v v v — t p C o "O o b% w t'' 4 m 7 cc .V H f0 C N C Q O f`O f0 G E @� E C `1 U V O oo t ,C to C C E Y O O C C T �'' 'a O_ N f0 O 7 7 M � C 41 U. 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THIS PAGE INTENTIONALLY LEFT BLANK ERNST & YOUNG Ernst &Young LLP =I Suite 500 5100 Town Center Circle Boca Raton, FL 33486 Tel: +1 561 955 8000 Fax: +1 561 955 8200 www.ey.com Report of Independent Certified Public Accountants on Internal Control Over Financial Reporting and on Compliance and Other Matters Based on an Audit of the Financial Statements Performed in Accordance with Government Auditing Standards Members of the Board of County Commissioners Collier County, Florida We have audited the financial statements of the governmental activities, the business -type activities, the aggregate discretely presented component units, each major fund, and the aggregate remaining fund information of Collier County, Florida (the County) as of and for the year ended September 30, 2011, which collectively comprise the County's basic financial statements and have issued our report thereon dated February 29, 2012. We conducted our audit in accordance with auditing standards generally accepted in the United States and the standards applicable to financial audits contained in Government Auditing Standards, issued by the Comptroller General of the United States. Internal control over financial reporting Management of the County is responsible for establishing and maintaining effective internal control over financial reporting. In planning and performing our audit, we considered the County's internal control over financial reporting as a basis for designing our auditing procedures for the purpose of expressing our opinion on the financial statements, but not for the purpose of expressing an opinion on the effectiveness of the County's internal control over financial reporting. Accordingly, we do not express an opinion on the effectiveness of the County's internal control over financial reporting. A deficiency in internal control exists when the design or operation of a control does not allow management or employees, in the normal course of performing their assigned functions, to prevent, or detect and correct misstatements on a timely basis. A material weakness is a deficiency, or combination of deficiencies, in internal control, such that there is a reasonable possibility that a material misstatement of the entity's financial statements will not be prevented, or detected and corrected on a timely basis. Our consideration of internal control over financial reporting was for the limited purpose described in the first paragraph of this section and was not designed to identify all deficiencies in internal control that might be deficiencies, significant deficiencies or material weaknesses. We did not identify any deficiencies in internal control over financial reporting that we consider to be material weaknesses, as defined above. 1202 - 1333029 163 A member firm of Ernst & Young Global Limited 4<<, =1 FRNST &YOUNG I III Compliance and Other Matters As part of obtaining reasonable assurance about whether the County's financial statements are free of material misstatement, we performed tests of its compliance with certain provisions of laws, regulations, contracts and grant agreements, noncompliance with which could have a direct and material effect on the determination of financial statement amounts. However, providing an opinion on compliance with those provisions was not an objective of our audit and, accordingly, we do not express such an opinion. The results of our tests disclosed no instances of noncompliance or other matters that are required to be reported under Government Auditing Standards. We noted certain matters that we reported to management of the County in a separate letter dated February 29, 2012. This report is intended solely for the information and use of management, the Board of County Commissioners, others within the entity, the Auditor General of the State of Florida, federal and state awarding agencies and pass- through entities and is not intended to be and should not be used by anyone other than these specified parties. February 29, 2012 1202 - 1333029 -f "7 UP A member firm of Ernst & Young Global Limited 164 (�Jill 11111111111 E ERN ,III S T &i N OU G Ernst & Young LLP Suite 500 5100 Town Center Circle Boca Raton, FL 33486 Tel: +1 561 955 8000 Fax: +1 561 955 8200 www.ey.com Report of Independent Certified Public Accountants on Compliance With Requirements That Could Have a Direct and Material Effect on Each Major Federal Program and State Project and on Internal Control Over Compliance in Accordance With OMB Circular A -133, Section 215.97, Florida Statutes, and Chapter 10.550, Rules of the Auditor General Members of the Board of County Commissioners Collier County, Florida Compliance We have audited Collier County, Florida's (the County) compliance with the types of compliance requirements described in the US Office of Management and Budget (OMB) Circular A -133 Compliance Supplement, and the requirements described in the Department of Financial Service's State Projects Compliance Supplement, that could have a direct and material effect on each of County's major federal programs and state projects for the year ended September 30, 2011. The County's major federal programs and state projects are identified in the summary of auditor's results section of the accompanying schedule of findings and questioned costs. Compliance with the requirements of laws, regulations, contracts and grants applicable to each of its major federal programs and state projects is the responsibility of the County's management. Our responsibility is to express an opinion on the County's compliance based on our audit. We conducted our audit of compliance in accordance with auditing standards generally accepted in the United States; the standards applicable to financial audits contained in Government Auditing Standards, issued by the Comptroller General of the United States; OMB Circular A -133, Audits of States, Local Governments, and Non - Profit Organizations; Section 215.97, Florida Statutes (Section 215.97); and Chapter 10.550, Rules of the Auditor General, State of Florida (Chapter 10.550). Those standards, OMB Circular A -133, Section 215.97 and Chapter 10.550 require that we plan and perform the audit to obtain reasonable assurance about whether noncompliance with the types of compliance requirements referred to above that could have a direct and material effect on a major federal program or state project occurred. An audit includes examining, on a test basis, evidence about the County's compliance with those requirements and performing such other procedures as we considered necessary in the circumstances. We believe that our audit provides a reasonable basis for our opinion. Our audit does not provide a legal determination of the County's compliance with those requirements. 1202 - 1333029 165 A member firm of Ernst & Young Global Limited Illlllllllllllllui�������� " " " JEaNSr &YOUNG The County did not comply with the types of compliance requirements that are applicable to each major federal program as described in the accompanying schedule of findings and questioned costs and referenced by finding number below: Compliance CFDA Number Major Program Requirement Finding Reference Community Development Block Grants/Entitlement 14.218 Grants Summer Food Service 10.559 Program for Children Cash Management 2011 -1, 2011 -6 Allowable Costs /Cost Principles 2011 -1, 2011 -8 Reporting 2011 -2 Subrecipient Monitoring 2011 -3 Special Tests and Provisions 2011 -4 Procurement, Suspension and Debarment 2011 -5 Program Income 2011 -6 Allowable Costs /Cost Principles 2011 -10 Cash Management 2011 -11 Compliance with such requirements is necessary, in our opinion, for the County to comply with the requirements applicable to those programs. In our opinion, because of the effects of the noncompliance described in the table above, the County did not comply in all material respects, with the requirements referred to above that could have a direct and material effect on the Community Development Block Grants/Entitlement Grants (CFDA No. 14.218) and the Summer Food Service Program for Children (CFDA No. 10.559) federal programs for the year ended September 30, 2011. 1202- 1333029 A member firm of Ernst & Young Global limited 166 IIIIIIIInii ^ "" JERNST &YOUNG The County did not comply with the types of compliance requirements that are applicable to each major federal program or state project as described in the accompanying schedule of findings and questioned costs and referenced by the finding numbers below: CFDA /CSFA Compliance Number Major Program Requirement Finding Reference Compliance with such requirements is necessary, in our opinion, for the County to comply with the requirements applicable to those programs. 1202 - 1333029 A member firm of Ernst & Young Global limited 167 Community Development Block 14.228 Grant /State's Program Cash Management 2011 -1 Reporting 2011 -2 Special Tests and Provisions 2011 -4 Allowable Costs /Cost Principles 2011 -8 ARRA: Homelessness Prevention and Rapid Subrecipient 14.257 Re- Housing Program Monitoring 2011 -3 Cash Management 2011 -1 State Housing Initiatives 52.901 Partnership Program Reporting 2011 -2 Allowable Costs /Cost Principles 2011 -8 Florida Boating Improvement 77.006 Program Matching 2011 -7 Reporting 2011 -9 Community Care for Allowable Costs /Cost 65.010 the Elderly Program Principles 2011 -8 Compliance with such requirements is necessary, in our opinion, for the County to comply with the requirements applicable to those programs. 1202 - 1333029 A member firm of Ernst & Young Global limited 167 I" JERNST &YOUNG Also, in our opinion, except for the noncompliance described in the table above, the County complied, in all material respects with the compliance requirements referred to above that could have a direct and material effect on the following federal programs and state projects: Community Development Block Grant/State's Program (CFDA No. 14.228), ARRA: Homelessness Prevention and Rapid Re- Housing Program (CFDA No. 14.257), State Housing Initiatives Partnership Program (CSFA No. 52.901), Florida Boating Improvement Program (CSFA No. 77.006), and Community Care for the Elderly Program (CSFA No. 65.010) for the year ended September 30, 2011. Moreover, in our opinion, the County complied, in all material respects, with the compliance requirements referred to in the first paragraph that could have a direct and material effect on each of its other major federal programs and state projects other than those referred to in the two preceding tables for the year ended September 30, 2011. Internal control over compliance The management of the County is responsible for establishing and maintaining effective internal control over compliance with the requirements of laws, regulations, contracts and grants applicable to federal programs and state projects. In planning and performing our audit, we considered the County's internal control over compliance with requirements that could have a direct and material effect on a major federal program or state project to determine the auditing procedures for the purpose of expressing our opinion on compliance and to test and report on internal control over compliance in accordance with OMB Circular A -133, Section 215.97, or Chapter 10.550, but not for the purpose of expressing an opinion on the effectiveness of internal control over compliance. Accordingly, we do not express an opinion on the effectiveness of the County's internal control over compliance. Our consideration of internal control over compliance was for the limited purpose described in the preceding paragraph and was not designed to identify all deficiencies in internal control over compliance that might be significant deficiencies or material weaknesses and therefore, there can be no assurance that all deficiencies, significant deficiencies, or material weaknesses have been identified. However, as discussed below, we identified certain deficiencies in internal control over compliance that we consider to be material weaknesses. 1202- 1333029 168 A member firm of Ernst & Young Global Limited =I ERNST & YOUNG A deficiency in internal control over compliance 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, noncompliance with a type of compliance requirement of a federal program or state project on a timely basis. A material weakness in internal control over compliance is a deficiency, or combination of deficiencies, in internal control over compliance, such that there is a reasonable possibility that material noncompliance with a type of compliance requirement of a federal program or state project will not be prevented, or detected and corrected, on a timely basis. We consider the deficiencies in internal control over compliance described in the accompanying schedule of findings and questioned costs as items 2011 -1 to 2011 -11 to be material weaknesses. The County's responses to the findings identified in our audit are described in the accompanying schedule of findings and questioned costs. We did not audit the County's responses and, accordingly, we express no opinion on the responses. This report is intended solely for the information and use of management, the Board of County Commissioners, others within the entity, the Auditor General of the State of Florida, federal and state awarding agencies, and pass - through entities and is not intended to be and should not be used by anyone other than these specified parties. February 29, 2012 1202 - 1333029 f f>� -f t"7 UP A member firm of Ernst 8 Young Global Limited 169 COLLIER COUNTY, FLORIDA SCHEDULE OF EXPENDITURES OF FEDERAL AWARDS AND STATE PROJECTS FOR THE FISCAL YEAR ENDED SEPTEMBER 30, 2011 See accompanying notes to the schedule of expenditures of federal awards and state projects. 170 CFDA #/ Transfers to Federal or State Grantor /Pass- Through Grantor Program Title CSFA # Grant/Contract Number Expenditures Subrecipients Department of Agriculture Direct Programs: Rural Development: Rural Business Enterprise Grants 10.769 09 -011- 596000558 $ 378,147 $ Indirect Programs: Florida Department of Education: Summer Food Service Program for Children 10.559 04 -0804 617,280 Florida Department of Agriculture and Consumer Services: Cooperative Forestry Assistance 10.664 16421 12,248 Cooperative Forestry Assistance 10.664 Collier County - Isle of Capri 4,680 Cooperative Forestry Assistance 10.664 Collier County - Ochopee 2,063 Total CFDA 18,991 Total Department of Agriculture 1,014,418 Department of Commerce Indirect Programs: Florida Department of Community Affairs: Public Safety Interoperable Communications Grant Program 11.555 11- DS- BD-09 -21 -01 -281 1,376,565 Total Department of Commerce 1,376,565 Department of Housina and Urban Development Direct Programs: Office of Community Planning and Development: CDBG - Entitlement Grants Cluster: Community Development Block Grants / Entitlement Grants 14.218 8 -02 -UC -12 -0016 5,160 Community Development Block Grants / Entitlement Grants 14.218 B- 04 -UC -12 -0016 2,650 - Community Development Block Grants / Entitlement Grants 14.218 B -08 -UC -12 -0016 73,234 73,200 Community Development Block Grants / Entitlement Grants 14.218 B -08 -UN -12 -0003 2,086,331 - Community Development Block Grants / Entitlement Grants 14.218 B -09 -UC -12 -0016 308,272 303,324 Community Development Block Grants / Entitlement Grants 14.218 B- 10 -UC -12 -0016 668,253 242,370 Total CFDA 3,143,900 618,894 ARRA Community Development Block Grant ARRA Entitlement Grants 14.253 ARRA B -09 -UY -12 -0016 34,930 27,000 Total CDBG - Entitlement Grants Cluster 3,178,830 645,894 Emergency Shelter Grants Program 14.231 S- 09 -UC -12 -0024 6,405 6,405 Emergency Shelter Grants Program 14.231 S- 10 -UC -12 -0024 87,684 87,684 Total CFDA 94,089 94,089 Supportive Housing Program 14.235 FL0294B413060801 231 - Supportive Housing Program 14.235 FL029484DO60802 65,617 Supportive Housing Program 14.235 FL0294B4DO61003 28,309 - Supportive Housing Program 14.235 FL029584DO60801 19,133 19,133 Supportive Housing Program 14.235 FL029504DO60802 49,383 49,383 Supportive Housing Program 14.235 FL029684DO60801 41,984 39,294 Supportive Housing Program 14.235 F1.029684D060802 31,943 29,523 Supportive Housing Program 14.235 FL0296B4D061003 156 - Total CFDA 236,756 137,333 Home Investment Partnerships Program 14.239 M- 07 -UC -12 -0217 6,954 - Home Investment Partnerships Program 14.239 M -09 -UC -12 -0217 139,333 138,710 Home Investment Partnerships Program 14.239 M- 10 -UC -12 -0217 110,249 61,673 Total CFDA 256,536 200,383 ARRA Homelessness Prevention and Rapid Re- Housing Program (HPRP) 14.257 ARRA S09 -UY -12 -0024 382,268 382,219 (Continued) See accompanying notes to the schedule of expenditures of federal awards and state projects. 170 COLLIER COUNTY, FLORIDA SCHEDULE OF EXPENDITURES OF FEDERAL AWARDS AND STATE PROJECTS FOR THE FISCAL YEAR ENDED SEPTEMBER 30, 2011 171 CFDA #/ Transfers to Federal or State Grantor /Pass - Through Grantor Program Title CSFA # Grant/Contract Number Expenditures Subrecipients Indirect Programs: Florida Department of Community Affairs: Community Development Block Grants / State's Program 14.228 07DB3VO92101Z01 $ (1,254) $ Community Development Block Grants / State's Program 14.228 08DBD3092301A03 10,088 Community Development Block Grants / State's Program 14.228 10- DB- D4- 09- 21- 01 -K09 645,610 Total CFDA 654,444 Total Department of Housing and Urban Development 4,802,923 1,459,918 Department of the Interior Direct Programs: Bureau of Land Management: Payments in Lieu of Taxes 15.226 Collier County 1,240,307 Fish and Wildlife Service: Coastal Program 15.630 4018151021 50,000 Partners for Fish and Wildlife 15.631 401815JO21 44,145 Total Department of the Interior 1,334,452 Department of Justice JAG Program Cluster: Direct Programs: ARRA Recovery Act - Edward Byrne Memorial Justice Assistance Grant (JAG) Program/ Grants to Units Of Local Government 16.804 ARRA 2009 -SB-89 -1969 8,107 Bureau of Justice Assistance: Edward Byrne Memorial Justice Assistance Grant Program 16.738 2008 -DJ -BX -0340 2,312 Edward Byrne Memorial Justice Assistance Grant Program 16.738 2009 -DJ -BX -0335 132,272 Edward Byrne Memorial Justice Assistance Grant Program 16.738 2010 -DJ -BX -0576 109,052 Indirect Programs: Florida Department of Law Enforcement: Edward Byrne Memorial Justice Assistance Grant Program 16.738 2010 -JAGC- COLL -I -4X -221 12,265 Edward Byrne Memorial Justice Assistance Grant Program 16.738 2011 - JAGC- COLL -1 -82 -213 157,202 Total CFDA 413,103 ARRA Recovery Act - Edward Byrne Memorial Justice Assistance Grant (JAG) Program/ Grants to States and Territories 16.803 ARRA 2010 - ARRC - LOLL -I -W7 36,374 Total JAG Program Cluster 457,584 Direct Programs: Office of Victims of Crime: Services for Trafficking Victims 16.320 2005 -VT -BX -0002 1,107 - Services for Trafficking Victims 16.320 2010 -VT -BX -0004 136,502 Total CFDA 137,609 Violence Against Women Office: Supervised Visitation, Safe Havens for Children 16.527 2007CWAX0007 (715) Supervised Visitation, Safe Havens for Children 16.527 2009CWAXK011 119,170 Total CFDA 118,455 Bureau of Justice Assistance: Drug Court Discretionary Grant Program 16.585 2010 -DC -BX -0016 40,632 State Criminal Alien Assistance Program 16.606 2008 -AP -BX -0859 11,900 Office of Community Oriented Policing Services: Public Safety Partnership and Community Policing Grants 16.710 2009CKWX0204 2,165 Public Safety Partnership and Community Policing Grants 16.710 2010CKWX0107 185,036 Total CFDA 187,201 Indirect Programs: Florida Office of Attorney General: Crime Victim Assistance 16.575 V10129 131,657 (Continued) 171 COLLIER COUNTY, FLORIDA SCHEDULE OF EXPENDITURES OF FEDERAL AWARDS AND STATE PROJECTS FOR THE FISCAL YEAR ENDED SEPTEMBER 30, 2011 172 CFDA #/ Transfers to Federal or State Grantor /Pass - Through Grantor Program Title CSFA If Grant/Contract Number Expenditures Subreciplents Florida Department of Children and Families: Violence Against Women Formula Grants 16.588 12- 8008 -LE $ 35,795 $ Violence Against Women Formula Grants 16.588 LN916 111,911 ARRA Violence Against Women Formula Grants 16.588 ARRA LN947 28,164 Total CFDA 175,870 Florida Department of Law Enforcement: Project Safe Neighborhoods 16.609 2008 - PMAG- COLL -I -R6 -005 10,041 Total Department of Justice 1,270,949 Department of Transportation Direct Programs: Federal Aviation Administration (FAA): Airport Improvement Program 20.106 3 -12- 0142 -006 -2009 101,741 Airport Improvement Program 20.106 3- 12- 0142 -008 -2010 3,599,931 Total CFDA 3,701,672 Federal Transit Administration (FTA): Federal Transit Cluster: Federal Transit—Capital Investment Grants 20.500 FL -03- 0264 -00 63,636 Federal Transit Capital Investment Grants 20.500 FL- 040047 -00 107,055 Federal Transit—Capital Investment Grants 20.500 FL -04- 0117 -00 26,314 Total CFDA 197,005 ARRA Federal Transit—Formula Grants 20.507 ARRA FL- 96- X019 -00 65,300 FederalTransit_Formula Grants 20.507 FL -90- X665 -00 12,047 Federal Transit—Formula Grants 20.507 FL- 90- X699 -00 166,353 FederalTransit_Formula Grants 20.507 FL -90- X731 -00 1,217,178 Total CFDA 1,460,878 Total Federal Transit Cluster 1,657,883 Indirect Programs: Florida Department of Transportation: Highway Planning and Construction 20.205 416237 -1 / AQ076 20,949 Highway Planning and Construction 20.205 420871 -1 / A4377 414,595 Highway Planning and Construction 20.205 423654 -1 / APD71 27,823 Highway Planning and Construction 20.205 423655 -1 / APM21 43,202 Highway Planning and Construction 20.205 425556 -1 / AQ382 76 Highway Planning and Construction 20.205 426836 -1 / AQ258 44,550 Highway Planning and Construction 20.205 427936 -1 / AQ383 8,757 Total CFDA 559,952 Metropolitan Transportation Planning 20.505 410113 -1 / AP031 37,964 Formula Grants for Other Than Urbanized Areas 20.509 410120 -1 / AOW89 505,749 ARRA Formula Grants for Other Than Urbanized Areas 20.509 ARRA 426772 -1 / API19 23,819 Total CFDA 529,568 Capital Assistance Program for Elderly Persons and Persons with Disabilities 20.513 FL -16 -0035 234,616 Total Department of Transportation 6,721,655 Department of Treasury Direct Programs: Department of Treasury: Federal Equitable Sharing 21.UNK Collier County Sheriff 24,300 Total Department of Treasury 24,300 (Continued) 172 COLLIER COUNTY, FLORIDA SCHEDULE OF EXPENDITURES OF FEDERAL AWARDS AND STATE PROJECTS FOR THE FISCAL YEAR ENDED SEPTEMBER 30, 2011 173 CFDA #/ Transfers to Federal or State Grantor /Pass - Through Grantor Program Title CSFA # Grant/Contract Number Expenditures Subrecipients Department of Energy Direct Programs: ARRA Energy Efficiency and Conservation Block Grant Program (EECBG) 81.128 ARRA DE- EEOD00783 $ 1,628,355 $ Total Department of Energy 1,628,355 U.S. Election Assistance Commission Indirect Programs: Florida Department of State: Help America Vote Act Requirements Payments 90.401 Collier County - FY 2006 -2007 2,439 Help America Vote Act Requirements Payments 90.401 Collier County - FY 2007 -2008 7S6 Help America Vote Act Requirements Payments 90.401 Collier County - FY 2008 -2009 53,534 Total U.S. Election Assistance Commission 56,729 Department of Health and Human Services Direct Programs: Health Resources and Services Administration: Health Care and Other Facilities 93.887 C76HF15996 46,475 - Speciaily Selected Health Projects 93.888 DlARH2O098 67,970 67,970 Specially Selected Health Projects 93.888 D181T30769 159,988 Total CFDA 227,958 67,970 Indirect Programs: Florida Department of Elder Affairs - Area Agency on Aging for Southwest Florida, Inc.: Aging Cluster: Special Programs for the Aging_Tltle III, Part B Grants for Supportive Services and Senior Centers 93.044 OAA 203.010 16,370 Special Programs for the Aging_Tltie III, Part B_Grants for Supportive Services and Senior Centers 93.044 OAA 203.2011 54,826 Total CFDA 71,196 Special Programs for the Aging_Title III, Part C_Nutrition Services 93.045 OAA 203.010 64,659 Special Programs for the Aging_Titie III, Part C Nutrition Services 93.045 OAA 203.2011 278,266 Total CFDA 342,925 Nutrition Services Incentive Program 93.053 NSIP 203.10 35 Nutrition Services Incentive Program 93.053 NSIP 203.11 30,219 Total CFDA 30,254 Total Aging Cluster 444,375 National Family Caregiver Support, Title III, Part E 93.052 OAA 203.010 2,680 National Family Caregiver Support, Title III, Part E 93.052 OAA 203.2011 41,904 Total CFDA 44,584 Florida Department of Revenue: Child Support Enforcement 93.563 CD311 200,241 Florida Department of State: Voting Access for Individuals with Disabilities—Grants to States 93.617 2010 - 2011 -0002 9,912 Florida Department of Transportation - Commission for the Transportation Disadvantaged: Medical Assistance Program 93.778 416043 -1 / BDM59 505,235 - Total Department of Health and Human Services 1,478,780 67,970 Corporation for National and Community Service Direct Programs: Retired and Senior Volunteer Program 94.002 09SRSFLO17 55,341 - Total Corporation for National and Community Service 55,341 (Continued) 173 COLLIER COUNTY, FLORIDA SCHEDULE OF EXPENDITURES OF FEDERAL AWARDS AND STATE PROJECTS FOR THE FISCAL YEAR ENDED SEPTEMBER 30, 2011 174 CFDA #/ Transfers to Federal or State Grantor /Pass- Through Grantor Program Title CSFA # Grant /Contract Number Expenditures Subrecipients Department of Homeland Security Indirect Programs: Florida Department of Community Affairs: Disaster Grants - Public Assistance (Presidentially Declared Disasters) 97.036 06- WL- &K -09 -21 -01 -692 $ 187,271 $ Disaster Grants - Public Assistance (Presidentially Declared Disasters) 97.036 08- FA- B9- 09 -21- 00-509 17,915 Total CFDA 205,186 Hazard Mitigation Grant 97.039 30HM- 88- 09 -21 -01 -008 63,550 Hazard Mitigation Grant 97.039 11HM- 3E -09 -21 -01 -005 47,082 Hazard Mitigation Grant 97.039 1OHM- 88 -09- 21 -01 -010 85,183 Hazard Mitigation Grant 97.039 11HM- 3E -09 -21 -01-004 46,943 Total CFDA 242,758 Emergency Management Performance Grants 97.042 11- FG- 7W- 09- 21 -01 -030 92,701 Homeland Security Grant Program 97.067 11- DS- 29- 09 -21 -01 -240 16,729 Florida Department of Law Enforcement: Homeland Security Grant Program 97.067 2007 - LETP - COLL -1Q4 -005 200,000 Homeland Security Grant Program 97.067 2007 - LETP - COLL -2Q4 -003 200,000 Homeland Security Grant Program 97.067 2008 -LETP- COLL -lS3 -017 114,102 Homeland Security Grant Program 97.067 2008 - SHSP - COLL -1S4 -010 25,562 Total CFDA 556,393 Total Department of Homeland Security 1,097,038 TOTAL EXPENDITURES OF FEDERAL AWARDS $ 20,861,505 $ 1,527,888 Florida Department of Environmental Protection Voluntary Cleanup Tax Credit (VCTC) Program 37.056 278 $ 25,790 $ Total Florida Department of Environmental Protection 25,790 Florida Department of State and Secretary of State State Aid to Libraries 45.030 07 -ST -12 107,291 State Aid to Libraries 45.030 08 -ST -12 179,320 State Aid to Libraries 45.030 09 -ST -10 4,750 Total Florida Department of State and Secretary of State 291,361 Florida Department of Community Affairs Emergency Management Programs 52.008 11- BG -05- 09 -21 -01 -130 77,043 Emergency Management Programs 52.008 12- BG -05- 09- 21 -01 -011 43,511 Total CFDA 120,554 Emergency Management Projects 52.023 11- CP- 03 -09 -21 -01 -221 7,300 Total Florida Department of Community Affairs 127,854 - Florida Housina Finance Corporation State Housing Initiatives Partnership (SHIP) Program 52.901 Collier County / Naples 466,690 42,701 Total Florida Housing Finance Corporation 466,690 42,701 Florida Department of Transportation Commission for the Transportation Disadvantaged (CTD) Trip and Equipment Grant Program 55.001 20724618401 /20724638401/APZ63 440,451 Commission for the Transportation Disadvantaged (CTD) Trip and Equipment Grant Program 55.001 20724618401/20724638401/AQ816 156,387 Total CSFA 596,838 (Continued) 174 COLLIER COUNTY, FLORIDA SCHEDULE OF EXPENDITURES OF FEDERAL AWARDS AND STATE PROJECTS FOR THE FISCAL YEAR ENDED SEPTEMBER 30, 2011 175 CFDA #/ Transfers to Federal or State Grantor /Pass- Through Grantor Program Title CSFA # Grant /Contract Number Expenditures Subrecipients Commission for the Transportation Disadvantaged (CTD) Planning Grant Program 55.002 20724621401 / AQB39 $ 92 $ Commission for the Transportation Disadvantaged (CTD) Planning Grant Program 55.002 20724621401 / AQ034 17,402 TotaICSFA 17,494 Aviation Development Grants 55.004 206430 -1 / A1935 6,615 Aviation Development Grants 55.004 414298 -1 / AOV99 14,481 Aviation Development Grants 55.004 414299 -1 / AOR09 37,279 Aviation Development Grants 55.004 414299 -1 / AOR09 106,775 Aviation Development Grants 55.004 425515 -1 / AQ122 400 Total CSFA 165,550 Public Transit Block Grant Program 55.010 410139 -1 / AOW93 902,706 intermodal Development Program 55.014 420353 -1 / APF60 156,209 State Infrastructure Bank 55.020 420655 -2 / EIF59 1,875,930 Transportation Regional Incentive Program (TRIP) 55.026 425477 -1 2,914,908 Total Florida Department of Transportation 6,629,635 Florida Department of Children and Families Homeless Challenge Grant 60.014 HFZ1D 25,887 10,324 Public Safety, Mental Health, and Substance Abuse Local Matching Grant 60.115 LHZ25 22,261 - Total Florida Department of Children and Families 48,148 10,324 Florida Department of Health County Grant Awards 64.005 C8011 18,936 - County Grant Awards 64.005 C9011 16,090 Total Florida Department of Health 35,026 Florida Department of Elder Affairs Area Agency on Aging for Southwest Florida, Inc: Home Care for the Elderly 65.001 HCE 203.10 2,922 Home Care for the Elderly 65.001 HCE 203.11 317 Total CSFA 3,239 Alzheimer's Respite Services 65.004 ADI 203.10 101,842 Alzheimer's Respite Services 65.004 ADI 203.11 41,356 Total CSFA 143,198 Community Care for the Elderly (CCE) 65.010 CCE 203.11 135,644 Community Care for the Elderly (CCE) 65.010 CCE 203.10 544,546 Total CSFA 680,190 Total Florida Department of Elder Affairs 826,627 Florida Fish and Wildlife Conservation Commission Florida Boating Improvement Program 77.006 08079 276,492 Florida Boating Improvement Program 77.006 10235 11,980 Total Florida Fish and Wildlife Conservation Commission 288,472 - TOTAL EXPENDITURES OF STATE FINANCIAL ASSISTANCE $ 8,739,603 $ 53,025 175 Collier County, Florida Notes to the Schedule of Expenditures of Federal Awards and State Projects Year Ended September 30, 2011 1. Basis of Presentation The accompanying Schedule of Expenditures of Federal Awards and State Projects (the Schedule) includes the Federal and State grant activity for Collier County, Florida (the County) and is presented on the modified accrual basis of accounting for expenditures accounted for in the governmental funds and the accrual basis of accounting for expenditures in proprietary funds. Under the modified accrual basis, revenue is recognized if it is both measurable and available for use during the fiscal year and expenditures are recognized in the period liabilities are incurred, if measurable. Under the accrual basis, expenditures are recognized in the period liabilities are incurred. The information in the schedule is presented in accordance with the requirements of U.S. Office of Management and Budget (OMB) Circular A -133, Audits of States, Local Governments, and Non - Profit Organizations, and Section 215.97, Florida Statutes. Therefore, some amounts presented in the Schedule may differ from amounts presented, or used in the preparation of, the basic financial statements for the fiscal year ended September 30, 2011. 2. State Infrastructure Bank Loan Collier County received a $12,000,000 State Infrastructure Bank Loan from the Florida Department of Transportation in fiscal year 2008 for construction of the I- 75 /Immokalee Road interchange. The Florida Department of Transportation included this project with their concurrent widening of I -75 and retained the loan proceeds to fund the project. Accordingly, the County's expenditures for purposes of reporting on the Schedule consist of principal loan repayments only ($1,875,930 for fiscal year 2011) as no proceeds were received under the loan and no project expenditures were incurred or paid directly by the County. The current balance of the loan as of September 30, 2011 is $6,327,545. The repayment schedule for this loan is as follows: Payment Date Principal 10/1/2008 1,957,377 10/1/2009 1,839,148 10/1/2010 1,875,930 10/1/2011 1,913,449 10/1/2012 4,414,096 $ 122000,000 Interest 82,623 200,852 164,070 126,551 88,282 $ 6622378 $ Total 2,040,000 2,040,000 2,040,000 2,040,000 4,502,378 12,662,378 1202 - 1333029 176 Collier County, Florida Notes to the Schedule of Expenditures of Federal Awards and State Projects 3. Contingency The grant revenue amounts received are subject to audit and adjustment. If any expenditures or expenses are disallowed by the grantor agencies as a result of such an audit, any claim for reimbursement to the grantor agencies would become a liability of the County. In the opinion of management, all grant expenditures are in compliance with the terms of the grant agreements and applicable federal and state laws and regulations. 4. Negative Figures on the Schedule of Expenditures Negative expenditures reported in the Schedules of Expenditures of Federal Awards and State Financial Assistance are a result of corrections which reduced expenditures in one grant and increased expenditures in another grant or funding source. Although the current expenditures on a grant may be negative, the total of all expenditures on the grant is expected to be positive over its total period of performance. 1202- 1333029 177 Collier County, Florida Schedule of Findings and Questioned Costs For the Year Ended September 30, 2011 Part I — Summary of Auditor's Results Financial Statements Section Type of auditor's report issued: Unqualified Internal control over financial reporting: Material weakness(es) identified? Significant deficiency(ies) identified that are not considered to be material weaknesses? Noncompliance material to financial statements noted? Federal Awards and State Projects Section Internal control over major programs: Material weakness(es) identified? Significant deficiency(ies) identified that are not considered to be material weaknesses? Type of auditor's report issued on compliance for major programs: Yes X No Yes X None reported Yes X No X Yes No Yes X None reported Adverse for the Community Development Block Grants/Entitlement Grants (CFDA# 14.218) and the Summer Food Service Program for Children (CFDA# 10.559); Qualified for the Community Development Block Grant/State's Program (CFDA# 14.228), the ARRA: Homelessness Prevention and Rapid Re- Housing Program (CFDA# 14.257), the State Housing Initiatives Partnership Program (CSFA# 52.901), the Florida Boating Improvement Program (CSFA #77.006), and the Community Care for the Elderly Program (CSFA #65.010); and Unqualified for all other major federal programs and state projects 1202 - 1333029 178 Collier County, Florida Schedule of Findings and Questioned Costs (continued) Any audit findings disclosed that are required to be reported in accordance with section .510(a) of OMB Circular A -133, Section 215.97, Florida Statutes, and Chapter 10.550, Rules of the Auditor General, State of Florida? X Yes No Identification of major federal programs: Federal Programs CFDA Number Federal Agency/Name of Federal Program U.S. Department of Housing and Urban Development: 14.218, 14.253 CDBG — Entitlement Grants Cluster Community Development Block Grant / State's 14.228 Program (DRI) ARRA: Homelessness Prevention and Rapid Re- housing Program (HPRP) (Recovery Act 14.257 Funded) U.S. Department of the Interior Bureau of Land Management: 15.226 Payment in Lieu of Taxes U.S. Department of Commerce: Public Safety Interoperable Communications 11.555 Grant Program U.S. Department of Transportation: 20.106 Airport Improvement Program U.S. Department of Homeland Security: 97.067 Homeland Security Grant Program U.S. Department of Agriculture: 10.559 Summer Food Service Program for Children 1202 - 1333029 179 Collier County, Florida Schedule of Findings and Questioned Costs (continued) Identification of major state projects: State Projects CSFA Number State Agency/Name of State Project Florida Housing Finance Corporation: 52.901 State Housing Initiatives Partnership Program (SHIP) Florida Department of Transportation: Commission for the Transportation Disadvantaged 55.001 (CTD) Trip and Equipment Grant Program 55.020 55.026 65.010 77.006 Dollar threshold used to distinguish between Type A and Type B programs: • Federal Programs • State Projects Auditee qualified as low -risk auditee? State Infrastructure Bank Loan Program Transportation Regional Incentive Program (TRIP) Florida Department of Elder Affairs: Community Care for the Elderly Florida Fish and Wildlife Conservation Commission: Florida Boating Improvement Program $623,238 $300,000 Yes X No 1202 - 1333029 180 Collier County, Florida Schedule of Findings and Questioned Costs (continued) Part II — Financial Statement Findings Section This section identifies the significant deficiencies, material weaknesses, fraud, illegal acts, violations of provisions of contracts and grant agreements, and abuse related to the financial statements for which Government Auditing Standards require reporting. No such matters were identified. Part III — Federal Awards and State Projects Findings and Questioned Costs Section This section identifies the audit findings required to be reported by Circular A -133 section .510(a), Section 215.97, Florida Statutes, and Chapter 10.550, Rules of the Auditor General, State of Florida, such as material weaknesses, significant deficiencies, and material instances of noncompliance, including questioned costs, as well as any abuse findings involving federal awards or state projects that are material to a major program. Finding 2011 -1 Federal Program Information U.S. Department of Housing and Urban Development Community Development Block Grants/Entitlement Grants (CDBG) CFDA No. 14.218 Community Development Block Grant/State's Program (DRI) CFDA No. 14.228 U.S. Department of Housing and Urban Development ARRA: Homelessness Prevention and Rapid Re- Housing Program (HPRP) CFDA No. 14.257 Criteria Allowable Costs; Cash Management: In accordance with OMB Circular A -102 Common Rule, the County's methods and procedures for transferring funds should minimize the time elapsing between the transfer to the County of grant funds and when the disbursement was paid by the County. In addition, when awards are funded on a reimbursement basis, costs for which reimbursement was requested should be paid prior to the date of the reimbursement request. 1202- 1333029 181 Collier County, Florida Schedule of Findings and Questioned Costs (continued) Condition /Context For the "Community Development Block Grants /Entitlement Grants (CDBG) "program and the "Community Development Block/Grant State's Program (DRI) ", we noted several instances listed below where there was a significant time lag between when the County paid for disbursements and when the disbursement was requested for reimbursement. Grant Amount of Cash Drawdown Date of Request for Cash Drawdown Date of Oldest Expenditure Paid by County in Cash Drawdown Difference in Days NSP CDBG 1,052,304.06 6/2/2011 1/31/2010 487 NSP (CDBG) 818,750.63 7/1/2011 6/24/2010 372 NSP (CDBG) 179,100.35 7/l/2011 7/8/2010 358 CDBG 233,839.26 2/24/2011 7/9/2010 230 CDBG 125,762.40 2/15/2011 9/28/2010 140 CDBG 319,009.64 2/15/2011 9/28/2010 140 CDBG 74,448.22 2/24/2011 4/24/2009 671 CDBG 55,000.00 2/15/2011 11/18/2010 89 CDBG 100,427.62 9/21/2011 4/28/2011 146 CDBG 103,474.00 9/23/2011 4/13/2011 163 DRI 40,741.48 3/3/2011 7/9/2010 237 Further for the CDBG grant program, we noted items were certified to be 100% complete by contractors, were requested for full payment in signed affidavits, and authorized for full payment by Housing, Human & Veteran Services (HHVS) staff, who certified on the disbursement authorization form that a site inspection was conducted and the work was 100% complete, without all work having been completed for 24 homes, as observed during physical inspections of the NSP properties by the Internal Audit Department of the Clerk of the Circuit Court. The bid line value for incomplete work ranged from $1,038 to $12,101 across all findings, and was not specific to one contractor. 1202- 1333029 182 Collier County, Florida Schedule of Findings and Questioned Costs (continued) Also, upon Internal Audit's review of new air conditioning systems installed versus the bid specifications, it was noted that four systems did not conform to the bid requirements and one could not be verified. The systems in question required SEER and/or heat kilowatt ratings that were higher than the actual ratings of the systems installed by the contractors. The purpose of using certain minimum Energy Star and SEER ratings for A/C systems used in the rehabilitation process is to ensure the utility bills will remain affordable for the homeowner, as required by HUD grant guidelines. Other substitutions were also noted, for example: a sink base cabinet was not removed and replaced per specifications in order to save the granite counter top from being damaged. The project manager and contractor decided to install a new tub in one of the bathrooms as a substitute for the work not performed in the kitchen, but a change order was never completed; therefore, the substitution was not approved. In addition, Internal Audit noted in their investigation report that five homeowners received lawn care services for three months after their purchase of an NSP property with a value of $1,380. The HHVS department found the error and requested the funds be reimbursed to the county for the services from each homeowner in letters dated February 4, 2011. To date, no funds have been reimbursed to the County from the homeowners; however, it was further noted that the contractor was never paid for these services by the County. During our compliance testing over the activities allowed or unallowed/allowable costs /costs principles attributes, we noted 10 expenditures that were for rehabilitation work for properties that were physically inspected by Internal Audit where the work was not completed or unapproved substitutions were made. Also, we noted per review of the details for the cash draw downs, that part of the request for reimbursement were for rehabilitation expenditures on properties that were investigated by Internal Audit and determined to have questioned costs associated with them for work that was paid for, but was not complete. Finally, for the "ARRA: Homelessness Prevention and Rapid Re- Housing Program (HPRP) ", we noted that for one drawdown request dated July 5, 2011, the drawdown request was made prior to the check date of the initial expenditure, which was July 6, 2011. As such, the funds were not expended prior to the drawdown request. 1202 - 1333029 183 Collier County, Florida Schedule of Findings and Questioned Costs (continued) Questioned Costs For the CDBG program, we noted total questioned costs of $158,559 Further, for the HPRP grant program, we noted total questioned costs of $16,370. Cause /Effect Drawdown or reimbursement requests were submitted to the grantor significantly past the time that the County paid for the qualifying expenditures. There is a lack of a process to minimize the time between disbursement and reimbursement request. In addition, drawdown or reimbursement requests were submitted to the grantor prior to the County incurring and paying for qualifying expenditures. This could result in reimbursement for unallowable or unsupported costs. Overall, these resulted in non - compliance with the cash management requirements of the grant programs. In addition, expenditures were paid by the County for rehabilitation work that was incomplete. Internal controls over rehabilitation activities and the related approval process were not designed or operating effectively. Signing statements saying that work is 100% complete when it is not could result in funds being dispersed and requested for reimbursement for work that is not completed. Recommendation The County should implement procedures that minimize the time elapsing between the request for a cash drawdown and the time that the disbursements are paid by the County and that the personnel administering the grant program comply with the County's established process, whereby qualifying expenditures are incurred and paid for prior to requesting reimbursement from the grantor. Also, the County should implement internal control procedures to inspect all work prior to authorizing any payment requests to ensure that contractors have completed all work according to the bid specifications. Views of Responsible Officials and Planned Corrective Action Management concurs with the recommendation of the auditors. In light of continuing audit findings, internal audit review and other actions management was made aware of, the County replaced the prior Director in Housing, Human and Veteran Services (HHVS) with a top management team member in late August 2011 to restructure the entire HHVS Department and implement effective controls, processes and procedures. 1202 - 1333029 184 Collier County, Florida Schedule of Findings and Questioned Costs (continued) Realizing that this alone was not enough and wanting to effect changes throughout the entire organization, County Manager, Leo Ochs, submitted a grants reorganization plan to the Board of County Commissioners on January 30, 2012. In effect, all administrative grant compliance functions were centralized at the corporate level under the Office of Management and Budget (OMB). This centralization will allow the entire organization to benefit from the substantial grants accounting and compliance expertise that exist within that operation. While responsibilities for grant program management and service delivery will remain with the operating units, the key areas of grant compliance such as cash management, procurement, monitoring, reconciliation, and reporting will be centrally managed and monitored across the agency. OMB will implement this centralized grants management model in several phases over time. The immediate focus is bringing obvious noncompliant activities, such as identified in this Single Audit Report and prior years' reports back into adherence with grantor requirements. OMB staff will become fully imbedded in the Agency's day to day administrative grant functions and existing grants accountants serving under the Administrative Services Division will be reassigned to the OMB. These employees will be deployed in key operating units to implement consistent business processes and internal controls and carry out corrective actions. With specific reference to the CDBG -NSP program, on December 14, 2011, agenda item l0A the Board of County Commissioners approved a NSP strategy and associated implementation action plan presented by HHVS. The purpose of this process is to extract Collier County from the day -to -day operations of the NSP program by outsourcing the remaining homes to a local agency for continuance of the program by a qualified agent. On February 28, 2012, revised Action Plans will be submitted to the Board for approval and subsequent submittal to the U.S. Department of Housing and Urban Development. OMB internal controls will be developed to monitor that draws are completed on a timely basis, no less than quarterly with a documented review of the draw amount and backup to verify that checks have cleared prior to drawing federal funds, the draw amount reconciles to the general ledger, work has been completed with no outstanding concerns by the Clerk, and appropriate program income has been applied if applicable. The authorization form which verifies that work is 100% completed will include additional backup of photos to document the work as complete and a second attestation that the verification of work completed is true and accurate by support of photos. 1202 - 1333029 185 Collier County, Florida Schedule of Findings and Questioned Costs (continued) Finding 2011 -2 Federal Program Information U.S. Department of Housing and Urban Development Community Development Block Grants/Entitlement Grants (CDBG) CFDA No. 14.218 U.S. Department of Housing and Urban Development Community Development Block Grant/State's Program (DRI) CFDA No. 14.228 Florida Housing Finance Corporation (the Corporation) State Housing Initiatives Partnership Program (SHIP) CSFA No. 52.901 Criteria Reporting. For the "Community Development Block Grants /Entitlement Grants (CDBG) "program, per the NSP program regulations contained in the Federal Register, each grantee must submit a quarterly performance report, as HUD prescribes, no later than 30 days following the end of each quarter, beginning 30 days after the completion of the first full calendar quarter after grant award and continuing until the end of the 15th month after initial receipt of grant funds. In addition to this quarterly performance reporting, each grantee will report monthly on its NSP obligations and expenditures beginning 30 days after the end of the 15th month following receipt of funds, and continuing until reported total obligations are equal to or greater than the total NSP grant. After HUD has accepted a report from a grantee showing such obligation of funds, the monthly reporting requirement will end and quarterly reports will continue until all NSP funds (including program income) have been expended and those expenditures are included in a report to HUD. The compliance supplement requires that performance reports be complete and accurate. The County received Federal program funds as a subgrantee of the State under the "Community Development Block/Grant State's Program (DRI) ". Per review of the State's reporting guidelines, the subgrantee is required to submit a monthly status report. The compliance supplement requires that performance reports are complete and accurate, which includes a requirement that amounts reported be in agreement with accounting records that support the audited financial statements and the SEFA. 1202- 1333029 186 Collier County, Florida Schedule of Findings and Questioned Costs (continued) For the "State Housing Initiatives Partnership Program (SHIP) ", we noted the following reporting requirements: • In accordance with Section 420.9075(10), Florida Statutes, each county or eligible municipality shall submit to the Corporation by September 15 of each year a report of its affordable housing programs and accomplishments through June 30, immediately preceding submittal of the report. • Annual report for the Closeout Fiscal Year (2010/2011). • The local SHIP administrator's tracking system and annual reports must exactly match the information recorded in the local city or county's general ledger. • SHIP administrators, therefore, are required to regularly reconcile their tracking system with the local finance department's general ledger. They should meet with the director of their finance department to create a process that will ensure compliance with the single audit act. Condition/Context For the CDBG grant program, we selected quarterly reports for the NSP program to test and noted that the reports were submitted by the County and then rejected to be modified as the amounts reported did not agree to the County's general ledger, therefore, the reports could not be audited. We noted that for 6 of our testing selections for the DRI grant program, which were for months prior to July 2011, the monthly status reports were not reconciled to the general ledger and a reconciliation was not provided. Subsequent to July 2011 we noted that these reports were reconciled to the general ledger. Finally, for the SHIP grant program, the County received a letter from the Florida Housing Finance Corporation stating that the County was not in compliance with SHIP statutory guidelines as the Annual Report was not submitted by the deadline. Further, we obtained a copy of the Annual Report and noted that the financial information included in the report was not reconciled to the County's general ledger. Accordingly, we were unable to validate the amount of expenditures reported in the Annual Report. 1202 - 1333029 187 Collier County, Florida Schedule of Findings and Questioned Costs (continued) Questioned Costs M`�1% Cause /Effect The reports submitted were not subjected to a thorough supervisory review to ensure accuracy and completeness, including verification that amounts reported agreed to the accounting records or were appropriately reconciled, if necessary. This could result in incorrect and/or inconsistent information between the reports filed and the underlying financial records and indicates that the County may not be in compliance with the provisions of the grant programs. Further, the SHIP grant program Annual Report was not submitted by the deadline. Internal controls with respect to reporting were not operating effectively. Recommendation The County should implement internal control procedures that require that reports be reconciled to the general ledger and reviewed and approved prior to being filed with the grantor. In addition, procedures should be in place to ensure that the reports are submitted by the deadline. Views of Responsible Officials and Planned Corrective Action Management concurs with this recommendation. With specific reference to the SHIP program, under the direction of the newly placed Director in HHVS, one of our grant accountants worked closely with the SHIP Technical Advisor to complete, revise and re- submit annual reports for Fiscal Years 2006/2007, 2007/2008, and 2008/2009. These reports were presented to and approved by the Board of County Commissioners on February 14, 2012. HHVS will continue the use of the Technical Advisor as directed by HUD in conjunction with the Office of Management and Budget. With respect to the NSP program, all prior reports have been resubmitted and are awaiting review by the grantor agency. Overall, centralization of our key areas of grant compliance, internal controls, general ledger reconciliations and reporting will be implemented by the County through our newly revamped Grants Management Office under the Office of Management and Budget. See Finding 2011 -1 for complete action plan. 1202 - 1333029 188 Collier County, Florida Schedule of Findings and Questioned Costs (continued) Finding 2011 -3 Federal Program Information U.S. Department of Housing and Urban Development Community Development Block Grants /Entitlement Grants (CDBG) CFDA No. 14.218 ARRA: Homelessness Prevention and Rapid Re- Housing Program (HPRP) CFDA No. 14.257 Criteria Subrecipient Monitoring: OMB Circular A -133 requires that the County maintain internal controls over subrecipients to ensure that subrecipient activities are monitored, audit findings are resolved, and the impact of any noncompliance on the County is evaluated. Additionally, the County should perform procedures to provide reasonable assurance that the subrecipient obtained required audits and takes appropriate corrective action on audit findings. Condition /Context Per review of two subrecipient files under the CDBG grant program, we noted that the 2009 audits had been obtained that showed that both subrecipients had findings in their Single Audits, however, the County did not address management responses and corrective actions related to the audit findings and how they may impact the funding that the County subawards them under the grant program. In addition, we noted that other audits since the 2009 audits had either not been obtained or disclosed findings that were not appropriately addressed. For the HPRP grant program, the County was not obtaining and reviewing audits of subrecipients, although, the subrecipient stated that they had audited financial statements as part of their application for the grant subaward. Therefore, the County did not comply with the subrecipient monitoring requirements of OMB Circular A -133 and did not have proper internal controls in place over the process. Questioned Costs N/A 1202- 1333029 189 Collier County, Florida Schedule of Findings and Questioned Costs (continued) Cause /Effect County personnel administering the grant program were not aware of the specific subrecipient monitoring requirements of OMB Circular A -133. Failure to perform proper monitoring activities can result in non - compliance with subrecipient monitoring requirements of OMB Circular A -133 and misuse /misappropriation of grant funding. Recommendation We recommend that the County implement internal control policies and procedures to ensure that proper monitoring of subrecipients occur on an on -going basis including the timely submission of audit reports and resolution of any audit findings. Views of Responsible Officials and Planned Corrective Action Management concurs with this recommendation. An internal control for subrecipient monitoring will be developed and implemented by OMB. This will include a master schedule of all subrecipients' fiscal year end dates to assess the appropriate times to request single audit reports. Collection of reports will be monitored by OMB through an electronic file system no less than quarterly to ensure subrecipient audit reports have been collected and reviewed. Reviews will be documented through the development of a review form completed by HHVS staff to assess the need for further action including any corrective actions plans and a timeline. The follow -up timeline will become part of the master subrecipient master schedule. Finding 2011 -4 Federal Program Information U.S. Department of Housing and Urban Development Community Development Block Grants/Entitlement Grants (CDBG) CFDA No. 14.218 Community Development Block/Grant State's Program (DRI) CFDA No. 14.228 1202 - 1333029 190 Collier County, Florida Schedule of Findings and Questioned Costs (continued) Criteria Special Tests and Provisions: When CDBG funds or CDBG -R funds are used for rehabilitation, the grantee must ensure that work is properly completed per 24 CFR section 570.506. Any NSP- assisted rehabilitation of a foreclosed -upon home or residential property shall be completed to the extent necessary to comply with applicable laws, codes and other requirements relating to housing safety, quality, or habitability, in order to sell, rent or redevelop such homes and properties. Condition /Context We noted for one of the properties in our testing, that there was no evidence that a pre - rehabilitation inspection was conducted describing the deficiencies to be corrected. Further we noted 11 additional properties in our testing, that were certified to be 100% complete by contractors, were requested for full payment in signed affidavits, and authorized for full payment by Housing, Human & Veteran Services staff, who certified on the disbursement authorization form that a site inspection was conducted and the work was 100% complete, without all work having been completed, as observed during physical inspections of the properties by the Internal Audit Department of the Clerk of the Circuit Court. Questioned Costs N/A Cause /Effect County personnel did not thoroughly inspect all work prior to authorizing any payment requests, therefore, did not have effective internal controls in place over this process Signing statements certifying that work is 100% complete without having performed a sufficient inspection could result in funds being dispersed and requested for reimbursement for work not performed. Recommendation The County should implement internal control procedures to inspect all work prior to authorizing any payment requests to ensure that contractors completed all work according to the bid specifications, contract specifications, and carried out the work in accordance with rehabilitation standards per 24 CFR section 570.506. 1202- 1333029 191 Collier County, Florida Schedule of Findings and Questioned Costs (continued) Views of Responsible Officials and Planned Corrective Action Management concurs with this recommendation. This finding was brought to our attention during the review by our Internal Auditors. Management took immediate action and internal control procedures have been implemented within HHVS to address the payments to contractors. We believe future payments pertaining to the NSP program will be in compliance with special tests and provisions clauses. The primary procedural change is to require photos of the components of work being invoiced. The second signatory will utilize these photographs and proofs of inspections as evidence on every request for payment, and also, periodically, will perform unscheduled site inspections to further verify. Additionally, there will be another layer of oversight due to the centralization of grant compliance functions under the OMB. See Finding 2011 -1 for full corrective action plan. Finding 2011 -5 Federal Program Information U.S. Department of Housing and Urban Development Community Development Block Grants/Entitlement Grants (CDBG) CFDA No. 14.218 Criteria Procurement, Suspension and Debarment: Verify that procurements provide full and open competition pursuant to the requirements of OMB Circular A -133. Condition /Context We noted one of our testing selections was part of a group bidding process for the rehabilitation of five homes where draft specifications were given to contractors for bidding, and then later revised after the bids were awarded to one contractor. These were titled "pencil bids" by the Housing Department Rehabilitation Specialist who later made revisions to bid specifications and allowed the winning contractor to adjust its line item pricing. It was further noted that the winning contractor increased certain line items within the bid even when the specifications on the final bid were unchanged from the first set. The bid totals for the jobs did not increase or decrease, only line items within the bid were changed. Further, this was also found by the 1202- 1333029 192 Collier County, Florida Schedule of Findings and Questioned Costs (continued) Internal Audit Department of the Clerk of the Circuit Court in their investigation over 24 NSP properties owned by the County to rehabilitate as there were instances of invoices that were paid for work that was not complete (see finding 2011 -2). Questioned Costs N/A Cause /Effect This process is considered to be in violation of the County's procurement policy and not in compliance with the procurement, suspension and debarment requirements of OMB Circular A -133 since all contractors were not given the opportunity to competitively bid on the same set of specifications. If all interested parties were given the opportunity to re -bid on the final specifications, the job(s) may have been awarded to a different contractor at a lower cost. Therefore, internal controls over the procurement, suspension, and debarment requirement were not operating effectively. Recommendation We recommend that the County implement proper internal controls to ensure that the bid process is competitive and fair to all interested parties by allowing them to bid on the same specifications as required by the County's procurement policy and OMB Circular A -133. Views of Responsible Officials and Planned Corrective Action Management concurs with this recommendation. This finding was brought to our attention during the review by our Internal Auditors. Management took immediate action and internal control procedures have been implemented within HHVS to address proper procurement procedures. Additionally, OMB and the County Purchasing Department has begun development of a coordination plan for all grant procurements which includes OMB review of all formal solicitations and further rollout of the Grants Requisition process to HHVS. The Grants Requisition process serves as an additional review by OMB staff versed in grant compliance against grants agreements to ensure any special grantor procurement requirements have been met. 1202 - 1333029 193 Collier County, Florida Schedule of Findings and Questioned Costs (continued) Finding 2011 -6 Federal Program Information U.S. Department of Housing and Urban Development Community Development Block Grants/Entitlement Grants (CDBG) CFDA No. 14.218 Criteria Program Income and Cash Management: Revenue received by a state, unit of general local government, or subrecipient (as defined at 24 CFR 570.500(c)) that is directly generated from the use of CDBG funds (which term includes NSP grant funds) constitutes CDBG program income. To ensure consistency of treatment of such revenue, the definition of program income at 24 CFR 570.500(a) shall be applied to amounts received by states, units of general local government, and subrecipients. However, Section 2301(d)(4) imposes certain limitations and requirements that necessitate an alternative requirement to govern the use of program income generated by activities carried out pursuant to Section 2301(c). The limitations and requirements are based on the NSP activity that generated the program income and on the date the income is received. In addition, Section 2301(d)(4) requires any revenue from the sale, rental, redevelopment, rehabilitation or any other eligible use of NSP funds to be provided to and used by the state or unit of local general government. This includes revenue received by a private individual or other entity that is not a subrecipient. Program income received before July 30, 2013, may be retained by the state or unit of general local government if it is treated as additional CDBG funds and used in accordance with the requirements of Section 2301. Furthermore, as provided under 24 CFR 85.21 for entitlements, grantees and subrecipients shall disburse program income before requesting additional cash withdrawals from the U.S. Treasury. Condition/Context At the end of FY 2010 there was a total of $725,320.37 of program income that had not been considered and adjusted against future cash draws that was generated from NSP grant program activities. During FY 2011, we noted there were three NSP grant program cash drawdowns that occurred during FY 2011. Per review of the first draw, the date of the request for reimbursement was on June 2, 2011. Based on this date and review of the program income population for the NSP grant program, we noted additional program income received during FY 2011 as of 6/2/11 of $259,378.63, resulting in a total amount of program income (FY 2010 & FY 2011) prior to this cash draw of $984,699.00. We noted per review of the cash drawdown details that the County only applied $725,315.86 of program income to the request as oppose to the whole 1202- 1333029 194 Collier County, Florida Schedule of Findings and Questioned Costs (continued) amount reflected in the general ledger of $984,699.00. Further, the last two cash draws related to the NSP grant program during FY 2011 were requested on July 1, 2011 and did not have any program income that was drawn against. Questioned Costs $259,378.63 Cause /Effect It appears that NSP program income not adjusted from (reduced) future cash draws. Internal controls with respect to program income were not operating effectively. Recommendation We recommend that the County implement procedures to verify that program income received is properly adjusted to future cash draw downs. Views of Responsible Officials and Planned Corrective Action Management concurs with the recommendation. As of February 1, 2012 the Office of Management and Budget has been expanded to oversee grants compliance countywide. Standardized project to date tracking protocols and forms will be implemented to support accurate general ledger reconciliations and application of program income prior to reimbursement (draw down) requests in a manner which supports a successful audit trail including proper backup that any grantor system failures are consistently documented and if possible acknowledged by the grantor agency. Finding 2011 -7 State Program Information Florida Fish and Wildlife Conservation Commission Florida Boating Improvement Program CSFA No. 77.006 1202- 1333029 195 Collier County, Florida Schedule of Findings and Questioned Costs (continued) Criteria Matching: Per Florida Boating Improvement Program guidelines, applicants must furnish some form of non -cash match (in -kind service) to the project. Non -cash match may include the cost of administrative /contract management, engineering/construction management, labor, materials, and equipment provided through in -house resources of the Applicant. Applicants may not provide more than 5% of the total project cost for project administration and 10% of the total project cost for project engineering /construction management. Condition /Context We noted that there were in -kind contributions of $20,000 and $60,000 for administration and project management, respectively, included in the final submitted report for the FBIP grant program. However, we were unable to obtain evidence to substantiate the valuation and calculation of the in -kind contributions. Questioned Costs $80,000 Cause /Effect The final report submitted was not adequately reviewed to ensure accuracy and completeness, including verification that in -kind contribution amounts reported were appropriately substantiated by accounting records. Internal controls with respect to matching were not operating effectively. Recommendation The County should implement internal control procedures that require that amounts included in final submitted reports be adequately substantiated and reconciled to the accounting records and reviewed and approved prior to being filed with the grantor. Views of Responsible Officials and Planned Corrective Action Management concurs with this recommendation. The Coastal Zone Management office is preparing a revised invoice for reimbursement and assistance will be provided to staff by our Grants Management Office to facilitate their understanding correct substantiation and reconciliation of accounting records prior to submission of the revised invoice. 1202 - 1333029 196 Collier County, Florida Schedule of Findings and Questioned Costs (continued) Specifically, OMB will implement the use of standard in -kind tracking forms and protocols (consistent with the payroll calendar schedule) for staff to document staff time used as in -kind. OMB will meet with CZM staff to develop roles and responsibilities as well as central electronic file location to monitor no less than quarterly that appropriate documentation is completed for staff time, materials and supplies. Finding 2011 -8 Federal /State Program Information Federal Agencies/Program: U.S. Department of Housing and Urban Development Community Development Block Grants /Entitlement Grants (CDBG) CFDA No. 14.218 Community Development Block Grant/State's Program (DRI) CFDA No. 14.228 State Agencies /Programs: Florida Department of Elder Affairs Community Care for the Elderly (CCE) CSFA No. 65.010 Florida Housing Finance Corporation State Housing Initiatives Partnership Program (SHIP) CSFA No. 52.901 1202 - 1333029 197 Collier County, Florida Schedule of Findings and Questioned Costs (continued) Criteria Allowable Costs: Compensation for personnel services rendered in connection with Federal awards must be documented and supported as described in OMB Circular A -87, Cost Principles for State, Local and Indian Tribal Governments (A -87). Additionally, pursuant to the SHIP Program Manual and the State of Florida's Part Four Compliance Supplement for the CCE program, administrative costs for the SHIP and CCE state programs should also be in conformance with A -87. According to A -87, the standards regarding time distribution are in addition to the payroll documentation and require the following: • Charges to Federal awards for salaries and wages, whether treated as direct or indirect costs, will be based on payrolls documented in accordance with the generally accepted practice of the governmental unit and approved by responsible official(s) of the governmental unit. Where employees are expected to work solely on a single Federal award or cost objective, charges for their salaries and wages will be supported by periodic certifications that the employees worked solely on the program for the period covered by the certification. These certifications will be prepared at least semi - annually and will be signed by the employee or supervisory official having first -hand knowledge of the work performed by the employee. Where employees work on multiple activities or cost objectives, a distribution of their salaries or wages will be supported by personnel activity reports or equivalent documentation which meets the following standards (unless a statistical system or other substitute system has been approved by the cognizant Federal agency): a) must reflect an after - the -fact distribution of the actual activity of each employee, b) must account for the total activity for which each employee is compensated, c) must be prepared at least monthly and must coincide with one or more pay periods, and d) must be signed by the employee. e) Budget estimates or other distribution percentages determined before the services are performed do not qualify as support for charges to Federal awards but may be used for interim accounting purposes. 1202 - 1333029 198 Collier County, Florida Schedule of Findings and Questioned Costs (continued) Condition /Context During our testing over payroll, we could not obtain sufficient evidence that the time allocated towards grant programs per time sheets was actual time the employee spent working on the grant programs. Questioned Costs Total salaries and related costs for the FY 2011 time period are summarized as follows: CDBG (CFDA No. 14.218) $ 577,627 DRI (CFDA No. 14.228) $ 162,652 SHIP (CSFA N0.52.901) $ 37,822 CCE (CSFA No. 65.010) $ 251,771 Cause /Effect Payroll allocations to grant programs were not supported by detailed time records. As such, these payroll costs are unsupported. This could result in reimbursement for unallowable or unsubstantiated costs. Recommendation We recommend that the County implement effective internal controls to ensure that actual time worked by an employee is charged to the grant programs. Views of Responsible Officials and Planned Corrective Action HHVS continues to follow the procedure for charging grants staff time via biweekly timesheets, signed by the employee and management, and reflecting actual time spent on the grants. However, it was determined by this finding that the procedures were not working as some of the staff were changing formulas within the spreadsheets and estimating their time. The department has implemented one spreadsheet that will be used by all staff members and the account strings will be verified by the accounting supervisor prior to forwarding to Human Resources for entry into SAP. Additionally, assistance will be provided by OMB via review of the current processes and procedures and the tools used by staff to perform their grant payroll reporting. 1202- 1333029 199 Collier County, Florida Schedule of Findings and Questioned Costs (continued) Finding 2011 -9 State Program Information Florida Fish and Wildlife Conservation Commission Florida Boating Improvement Program CSFA No. 77.006 Criteria Reporting: Per review of the State's reporting guidelines, the subgrantee is required to submit monthly progress reports from the award date of the grant until such time as the Contractor's Certification of Completion is signed by the contractor and submitted to the Florida Fish and Wildlife Conservation Commission. The compliance supplement requires that performance reports are complete and accurate, which includes a requirement that amounts reported be in agreement with accounting records that support the audited financial statements and the SEFA. Condition /Context We noted during our review and testing of the final invoice that the Contractor's Certification of Completion, which was signed by the contractor, was submitted to the Florida Fish and Wildlife Conservation Commission on November 9, 2011, however, no progress reports were submitted after January 2011, during which month construction was completed. As such, no monthly progress reports were submitted for approximately 10 months. Questioned Costs N/A Cause /Effect Failure to submit the required monthly progress reports resulted in non - compliance with the reporting requirements of the grant program. Internal controls with respect to reporting were not operating effectively. 1202 - 1333029 200 Collier County, Florida Schedule of Findings and Questioned Costs (continued) Recommendation The County should establish policies and procedures necessary to ensure that all required reports are prepared and fled in a timely manner including developing a checklist of required reports and due dates. Views of Responsible Officials and Planned Corrective Action Management concurs with this recommendation. A centralized electronic file system will be put into place that will serve as a monitoring tool by OMB staff. A master report schedule will outline all reporting requirements by grantor program and grant contract. Reminders will be sent to CZM staff to draft required reports. Standard protocol will implement that all reports receive a documented review by OMB staff prior to submission to the grantor agency. This internal control will serve to ensure reports are fled timely and that the audit trail includes a copy of the final submission and documented review. Finding 2011 -10 Federal Program Information Florida Department of Education Summer Food Service Program for Children CFDA No. 10.559 Criteria Allowable Costs: Compensation for personnel services rendered in connection with Federal awards must be documented and supported as described in OMB Circular A -87, Cost Principles for State, Local, and Indian Tribal Governments (A -87). Condition /Context We noted upon review of payroll timecards from the Parks and Recreation Department, the County Clerk's Finance Department identified and investigated an error noted in the computation and data entry of overtime hours worked by Summer Food Program personnel. We note that the fiscal technician that was inputting the time for the Summer Food Program was responsible for entering the hours worked by each employee. The fiscal technician would enter and approve in the SAP general ledger system for payroll processing and payment, the data provided by the manual time card signed by the employee and supervisor of the program. The fiscal technician, 1202 - 1333024 201 Collier County, Florida Schedule of Findings and Questioned Costs (continued) when entering overtime hours into the system, multiplied all overtime hours by 1.5, as they were unaware that the County's payroll system automatically calculated the increase in rate for hours classified as overtime hours. Additionally, we noted that an overpayment for the time resulted in additional employer taxes and Florida Retirement System contributions, as these expenditures are calculated as a percentage of total pay. Questioned Costs $8,517 Cause /Effect The cause is due to a clerical error going undetected due to the lack of effective supervisory oversight, which resulted in overcharge of payroll costs to the program. As such, unallowable costs were charged to the grant program. In addition, permissions for both entering data and approving time in the SAP system was granted to this employee. Recommendation We recommend an additional level of review, to compare the hours per the manual timecards to the timekeeper's entry into the system, and that the timekeeper's access to the payroll module should not also include approval of time entry. We also recommend proper training of payroll personnel. Views of Responsible Officials and Planned Corrective Action Management concurs with this recommendation. The Human Resource Department (HR) has implemented additional training to staff entering payroll and supervisors. The content of the first session included review of federal laws (Fair Labor Standards Act), Compensation CMA, Leaves of Absence CMA, deadlines, best practices, productive vs. non - productive time, holidays, compensatory time and overtime. In addition to the training, HR has reviewed all time entries for the Summer Food Program and is working with the Clerk of Court to resolve the overpayments. 1202- 1333029 202 Collier County, Florida Schedule of Findings and Questioned Costs (continued) Finding 2011 -11 Federal Program Information Florida Department of Education Summer Food Service Program for Children CFDA No. 10.559 Criteria Cash Management: In accordance with OMB Circular A -102 Common Rule, the related expenditures should be in compliance with the applicable funding techniques as described in the agreement and when awards are funded on a reimbursement basis, the costs for which reimbursement was requested were paid prior to the date of the reimbursement request. Condition /Context We note that the meals served on a daily basis are tracked manually at each meal site, and the manual tracking sheets are sent to the Parks & Recreation Administration Office. Personnel at the office enter the manual data into an excel spreadsheet, which is then used to summarize the total meals served and to prepare the cash drawdown requests. We obtained the excel tracking spreadsheet for the month of June 2011, and while clerically testing it, we noted that the total number of meals served, plus the total number of meals left over, was more than the total number of meals delivered for the Naples locations. Additionally, we noted that the total number of meals left over for both locations were not equal to the total number of meals delivered during the period, less the number of meals served. As such, we were unable to determine whether the excel tracking spreadsheet appropriately reflected the number of meals delivered or the number of meals served. Further, we were unable to obtain sufficient evidence to verify the number of meals served and reported, and therefore reimbursed, during July 2011 and August 2011. Questioned Costs Unable to determine. Cause /Effect Drawdown or reimbursement requests were submitted to the grantor that could not be fully substantiated with evidence that they were qualifying paid expenditures. This could result in reimbursement for unsubstantiated meals served. 1202 - 1333029 203 Collier County, Florida Schedule of Findings and Questioned Costs (continued) Recommendation We recommend that the personnel administering the grant program implement procedures to ensure that reimbursement requests are supported by actual meals served. Views of Responsible Officials and Planned Corrective Action Management concurs with the recommendation. Deficiencies in the operation of this program were brought to our attention during the summer of 2011. Management took immediate action and implemented a very detailed corrective action plan. A summation of the plan is as follows: Staff has been re- trained to ensure that an understanding of the requirements of the program and delivery of these requirements to participants are carried out in accordance with United States Department of Agriculture Summer food Service Program guidelines without exception. Subsequent training will be held routinely. 2. As mentioned previously, staff are assigned to count the amount of food coming back to correspond with the POS forms for left -over meals. 3. All meals will contain the required elements for lunch and breakfast and no other foods will be substituted or added. 4. Current program manager was removed immediately and his responsibilities were reassigned to his supervisor. 5. The supervisor will be the contact person for all future contacts between the Parks and Recreation Department and representatives of the Florida Department of Education and the Director of Collier County Parks and Recreation will be added to all future communications between the Collier County Parks and Recreation Department and the Florida Department of Education. 1202- 1333029 204 Collier County, Florida Schedule of Prior Audit Findings For the Year Ended September 30, 2011 The current status of findings reported for the years ended September 30, 2010 and 2009 related to major federal programs and state projects is as follows: Finding 2010 -1 State Program Information Florida Housing Finance Corporation (the Corporation) State Housing Initiatives Partnership Program (SHIP) CSFA No. 52.901 Compliance Requirement: Reporting Condition /Context The financial information included in the submitted Annual Report was not reconciled to the County's general ledger. Accordingly, we were unable to validate the amount of expenditures and program income reported in the Annual Report. Recommendation The County should implement procedures that require that the statutory reports be reconciled to the general ledger and reviewed and approved prior to being filed with the State. Views of Responsible Officials and Planned Corrective Action Management concurs with the recommendations of the auditors. On July 1, 2010, Collier County entered into a contract with the Florida Housing Coalition, the technical assistance provider for Florida Housing Finance Corporation. The purpose was to receive assistance in reconciling the annual reports to the general ledger and establishing best practices to capture, reconcile, and report data. 1202 -1 333029 205 Collier County, Florida Schedule of Findings and Questioned Costs (continued) Current Status The previously submitted Annual Reports for 06/07 07/08 and 08/09 were voided and have been revised and resubmitted with the assistance of the Florida Housing Corporation's Technical Advisor. The Technical Advisor determined that the historical practice of maintaining separate projects in our accounting system created problems when attempting to reclassify expenditures to a previous period. She suggested we no longer attempt to reconcile to SAP, but rather use the SHIP tracking forms as the basis for recording the date of SHIP transactions and SAP to support that the expenditures occurred. Consequently, HHVS staff is in the process of creating "bridge" reports to tie the information provided in the Annual Reports to SAP. These bridge reports would be analogous with a request for reclassifications, showing where expenditures currently reside in SAP and where they are in the Annual Report. SHIP funding for 11/12 will be placed in a new fund/project and maintained for the duration of the SHIP program. Staff is reviewing various options for maintaining and tracking future SHIP funds to ensure the integrity of the data in SAP and to make reconciliations to the SHIP tracking forms possible and help ensure the integrity of Annual Reports. As of February 1, 2012 the Office of Management and Budget has been expanded to oversee grants compliance countywide and will serve to assist in proper reconciliation and tracking of SHIP funding. 1202 - 1333029 206 Collier County, Florida Schedule of Prior Audit Findings (continued) Finding 2010 -2 Federal Program Information U.S. Department of the Interior Payments in Lieu of Taxes (PILT) CFDA No. 15.226 Compliance Requirement: Reporting Condition /Context The County was not aware of the requirement noted in (d) above and did not certify to the Department that it had made an appropriate distribution of the funds within 120 days of receiving payments. Recommendation The County should implement procedures to identify all types of reporting requirements indicated in the federal regulations and to ensure all such reports or certifications are submitted as required and on a timely basis. Views of Responsible Officials and Planned Corrective Action The Clerk's Department of Finance and Accounting (Finance) determined that this program was considered a Federal grant in July 2010. At that time, Finance contacted the Department of Interior and was told that there were no reporting requirements for this program. All funds were properly distributed. Upon reviewing CFR 44.5(d) with the auditors, it was determined that a certification confirming the appropriate distribution of funds was required. The confirmation was sent and this requirement had been added to the PILT procedures for future years. Current Status The procedures for processing the PILT receipt and subsequent distributions have been updated. All funds were properly distributed. The certification confirming the appropriate distribution of funds was submitted to the Department of the Interior as required. 1202 - 1333029 207 Collier County, Florida Schedule of Prior Audit Findings (continued) Finding 2010 -3 Federal Program Information U.S. Department of Homeland Security Disaster Grants — Public Assistance (Presidentially Declared Disasters) CFDA No. 97.036 Compliance Requirement: Procurement, Suspension and Debarment Condition /Context We selected the largest vendor included in the population which comprised the majority of the expenditures incurred under the Federal program for testing. The expenditures were incurred during prior years although the Federal reimbursement was sought and received in the current year. We noted no documentation evidencing that the County had checked the EPLS, and a certification from the vendor was not collected or clause or condition included in the contract. We noted that the County's current policy it to document the EPLS check; however, as this vendor contract pertained to prior years, there was no documentation of the EPLS check being performed. Recommendation The County should perform the required verification by checking the EPLS (and documenting evidence of the verification, when it was performed and by whom), collecting a certification from the entity, or adding a clause or condition to the contract with that entity in accordance with the Federal requirements. 1202 - 1333029 208 Collier County, Florida Schedule of Prior Audit Findings (continued) Views of Responsible Officials and Planned Corrective Action Management concurs with and has successfully implemented the procedure of performing EPLS checks on all vendors associated with grant activities. This contract was procured in July of 2005, prior to any damage done to Naples beaches and initial submission to FEMA for reimbursement. This contract bid process was intended for payment under non -grant revenue sources and accordingly, our procurement procedures do not require debarment checks for non- grant related vendors. The bid process did include the following language with regards to Public Entity Crimes: `By its submitting a Bid, Bidder acknowledges and agrees to and represents it is in compliance with the terms of Section 287.133(2)(a) of the Florida Statutes." Said statute prohibits a vendor from bidding on a contract when they have been convicted of a public entity crime. An after - the -fact EPLS check was performed on this vendor for the period of January 1, 2005 through and including September 30, 2010 and was found to be in good standing. At the time the County submits their second request for scope change with FEMA regarding the increased beach costs, all vendors submitted for reimbursement will be checked after - the -fact. Current Status The County continues to educate staff on EPLS checks as well as other grant procurement procedures to ensure compliance. On this particular item, EPLS checks were performed on all vendors associated with the grant. As of February 1, 2012 the Office of Management and Budget has been expanded to oversee grants compliance countywide. Additional controls will be implemented during FY 2012 including a grants requisition system that will allow grants compliance staff to verify an EPLS check has been completed prior to execution of a purchase orders against a contract funded with federal or state funds. In addition, grants compliance staff in coordination with Purchasing will review grant related procurements at several control points. Prior to advertisement to review procurement packages for required grantor provisional language, at the time of Board approval by way of the SIRE agenda system, and again at the time of purchase order execution. 1202 - 1333029 209 Collier County, Florida Schedule of Prior Audit Findings (continued) Finding 20104 Federal Program Information U.S. Department of Homeland Security Disaster Grants — Public Assistance (Presidentially Declared Disasters) CFDA No. 97.036 Compliance Requirement: Reporting Condition /Context For one of the two quarterly reports selected for testing on a large project we noted amounts were not reported accurately for the anticipated final amount and the amount expended to date. The accounting records reflected a total amount of $12.9 million whereas the report reflected $3.1 million. Further, we selected the next quarterly report and noted that the amounts reported were the same and had not been updated to reflect the actual activity based on the County's accounting records. Recommendation We recommend that all reports submitted to grantor agencies be subjected to a thorough supervisory review for accuracy and completeness prior to submission. Views of Responsible Officials and Planned Corrective Action The Florida Public Assistance quarterly reporting is done electronically without any intermittent check points for review. Management will work around this by having staff create a spreadsheet prior to quarterly reporting submission and submit to Management for approval. Staff inquired about submitting revised quarterly reports for the periods in question and was advised that there are no options for doing this within the system. Current Status Staff generates a spreadsheet from the Florida Public Assistance system quarterly and it is reviewed and approved by Management prior to submission in the actual Florida Public Assistance portal. Additionally, staff monitoring each of the on -going projects is responsible for reporting the amounts to the employees who perform the report preparation and submission. 1202 - 1333029 210 Collier County, Florida Schedule of Prior Audit Findings (continued) Finding 2010 -5 Federal Program Information U.S. Department of Homeland Security Disaster Grants — Public Assistance (Presidentially Declared Disasters) CFDA No. 97.036 Compliance Requirement: Allowable Activities /Costs Condition /Context The large project PW that was finalized during fiscal year 2010 and which set forth the allowable activities and costs for the project included approximately $10.5 million for costs associated with one vendor and $2.2 million related to various other vendor related costs. The County was reimbursed under the Federal program for the full amount of the approved PW (approximately $3.1 million was collected in prior years and approximately $9.7 million was collected during fiscal year 2010). For the other vendors included in the PW totaling $2.2 million, we selected three of the largest vendors to test covering over 60% of the other vendor total amount. We noted that for one of the vendors selected, the amount billed by the vendor and paid by the County was less than the amount in the PW by $27,997, which at the Federal reimbursable share per the PW of 55% equates to $15,398. Recommendation We recommend that the County implement procedures to ensure that amounts reimbursed are based upon actual expenditures incurred. Views of Responsible Officials and Planned Corrective Action As discussed in previous meetings, this Project Worksheet 2700 (PW) was the scope change and Collier County was allowed a much larger reimbursement for the damages done to Collier County Beaches. This is an on -going process and involves three Named Events (Tropical Storm Gabrielle on 9/12/2001; Hurricane Katrina on 8/29/2005; and Hurricane Wilma on 10/24/2005). At 9/30/2010, Collier County was half -way through this process. 1202- 1333029 211 Collier County, Florida Schedule of Prior Audit Findings (continued) The invoice selected for testing on this project was incorrectly referenced in the written discussion on PW 2700 by State personnel at $682,000, the PO amount. There is a spreadsheet that FEMA, State personnel and Collier personnel are working with for the entire $33.9 million dollar scope change. The actual invoice amount of $654,002.73 is included on the spreadsheet. Current Status As of February 1, 2012 the Office of Management and Budget has been expanded to oversee grants compliance countywide. Standardized report submission forms and protocols will be implemented to support segregation of duties as well as accurate reporting to ensure the general ledger reconciles to any financial activity within the report prior to submission. Finding 2010 -6 Federal Program Information U.S. Department of Housing and Urban Development Community Development Block Grants /Entitlement Grants (CDBG) CFDA No. 14.218 Compliance Requirement: Program Income Condition /Context We noted a total of approximately $732,000 of program income generated during fiscal year 2010 under the Neighborhood Stabilization Program (NSP) which is part of the CDBG program. Per review of the general ledger expenditure detail provided, we noted that the program income had been applied against specific program expenditures in determining the net amount of program expenditures reported in the SEFA. From the detail of program income provided, we selected a sample of specific program income transactions for testing and the first selection of approximately $66,000 was recorded in May 2010. The remaining five selections included in our sample were recorded during September 2010. There were no NSP program cash draws made subsequent to the receipt of the program income recorded in September 2010. We attempted to ascertain whether the amounts received as program income in May 2010 were properly offset against program expenditures in determining the amount of federal funds drawn for the next draw request occurring subsequent to the date the program income was received in order to satisfy the requirement that program income is used before requesting additional cash draws. However, we were informed that the May 2010 program income of $66,000 had not been deducting in subsequent cash draw requests made during fiscal year 2010. 1202 - 1333029 212 Collier County, Florida Schedule of Prior Audit Findings (continued) Recommendation We recommend that the County implement procedures to verify that program income received is properly offset against expenditures incurred when making draw requests under the federal program. Views of Responsible Officials and Planned Corrective Action Collier County concurs with the recommendation. Prior to making a request to draw new funds under NSP, County fiscal staff will submit evidence to the program administrator that all program income received will be, or has been, offset against expenditures. This requirement will apply regardless of what NSP activity generated the program income or what activity Collier County seeks to draw down against available program funds. Current Status As determined by the auditors in Finding 2011 -6, Collier County was still incorrectly drawing program income. As of February 1, 2012 the Office of Management and Budget has been expanded to oversee grants compliance countywide. Standardized project to date tracking protocols and forms will be implemented to support accurate general ledger reconciliations and application of program income prior to reimbursement (draw down) requests in a manner which supports a successful audit trail. Finding 2010 -7 Federal Program Information U.S. Department of Housing and Urban Development Community Development Block Grants/Entitlement Grants (CDBG) CFDA No. 14.218 Compliance Requirement: Reporting Condition /Context We selected two quarterly reports for the NSP program to test and noted that amounts reported for expenditures did not agree to the County's general ledger and a reconciliation was not provided. 1202- 1333029 213 Collier County, Florida Schedule of Prior Audit Findings (continued) Recommendation The County should implement procedures that require that the NSP reports be reconciled to the general ledger and reviewed and approved prior to being filed with the grantor. Views of Responsible Officials and Planned Corrective Action Collier County concurs with the recommendation. Program staff will ensure expenditures and program income have been reconciled to the general ledger. This item has been corrected and appropriate controls and procedures have been implemented to reconcile to the general ledger before submitting future Quarterly Performance Reports (QPR) to the grantor agency. Furthermore, future reports will be approved by the program administrator and appropriate documentation will be maintained prior to being filed with the grantor agency. Current Status Collier County received authorization from HUD to modify and correct past reports. To do so, HUD rejected all previously submitted QPRs on October 25, 2011. HHVS staff has completed modification of the six rejected QPRs from 2009 and 2010 and prepared and submitted the four QPRs for 2011. All QPRs will be reviewed and approved by a grants accountant and supervisor prior to the reports being submitted to the grantor. Also, see action plan submitted in finding 2011 -1. Finding 2009 -1 Federal /State Program Information Federal Agencies/Programs: U.S. Department of Housing and Urban Development (HUD) Home Investment Partnerships Program (HOME) — CFDA No. 14.239 Community Development Block Program (CDBG) — CFDA No. 14.218 U.S. Department of Health and Human Services Aging Cluster (AC) — CFDA No.'s 93.044, 93.045, 93.053, 93.705, 93.707 1202- 1333029 214 Collier County, Florida Schedule of Prior Audit Findings (continued) State Agencies /Programs: Florida Department of Elder Affairs Community Care for the Elderly (CCE) — CSFA No. 65.010 Florida Housing Finance Corporation State Housing Initiatives Partnership Program (SHIP) — CSFA No. 52.901 Compliance Requirement: Allowable Costs Condition /Context We noted that from the beginning of the fiscal year through January 2009, the County's documentation supporting payroll allocations for employees that work on multiple grants did not meet federal standards as described in OMB Circular A -87 above. The County has used a Personnel Activity Report (PAR) to allocate payroll salaries for employees who work on multiple activities. These reports are prepared annually, at the beginning of each fiscal year, based on an estimate of the time the employees are expected to work on a grant. The PAR does not show the total activity for which an employee is compensated and does not require the employee's signature. The County's Department of Housing and Human Services initiated a timesheet process in fiscal year 2006 whereby employees in the department indicate the projects to which their time relates each week. These timesheets are signed by the employees and supervisors and kept in the department for internal control purposes. For the first part of fiscal year 2009, these timesheets were not provided to the County's payroll department to adjust the allocation of payroll costs from the estimate as indicated in the annual PAR form to actual time spent. Thus, there is not an "after the fact" accounting based on actual activity. We noted that the HOME program had no payroll expenditures charged to the program during the period noted above (although there should have been), and therefore, no question costs have been reported for this program. The payroll charges related to the HOME program were instead charged to other housing programs as a result of the lack of an after the fact accounting for the period noted above. 1202- 1333029 215 Collier County, Florida Schedule of Prior Audit Findings (continued) Recommendation The County should ensure that an effective and consistent process is in place to record payroll charges to grant programs throughout the entire fiscal year. The process should entail providing the timesheets to the payroll department on a periodic basis to match the related payroll allocated to each grant (as based on the PAR), to the actual time spent working on the federal /state grant based on the after -the -fact timesheet, and any adjustments necessary to true -up the estimated payroll charged to the grant (based on the PAR) to the actual amount (based on the timesheets) should be made. Alternatively, the payroll department could charge payroll costs to the grants based on actual timesheets submitted weekly as opposed to using the budgeted PAR percentage as the basis for allocating costs each pay period. PAR reports should be signed by the employee and completed at least semi - annually for those employees who work solely on one grant. Views of Responsible Officials and Planned Corrective Action The finding in question occurred during the 1" quarter of FY09. The time was tracked correctly; however, a manual step was missed. Effective January 17, 2009, the Human Resources Department began processing bi- weekly time and effort entries for all Housing and Human Services grant staff. Staff submits timesheets that are signed by the employee and management to fiscal staff for review. The timesheets are forwarded to Human Resources to enter the actual percentage of time and effort into SAP prior to payroll expenses actually posting to SAP. This allows for "real time" charges directly to the appropriate grant in SAP, thereby eliminating the need to process journal entries at all. Current Status HHVS continues to follow the procedure for charging grants staff time via biweekly timesheets, signed by the employee and management, and reflecting actual time spent on the grants. However, it was determined by finding 2011 -8 that the procedures were not working as some of the staff were changing formulas within the spreadsheets and estimating their time. The department has implemented one spreadsheet that will be used by all staff members and the account strings will be verified by the accounting supervisor prior to forwarding to Human Resources for entry into SAP. 1202 - 1333029 216 Collier County, Florida Schedule of Prior Audit Findings (continued) Finding 2009 -2 Federal Program Information Federal Agency/Program: U.S. Department of Housing and Urban Development (HUD): Community Development Block Grant / State's Program (DRI) — CFDA No. 14.228 U.S. Department of Agriculture: Summer Food Service Program for Children— CFDA No. 10.559 U.S. Department of Justice: Public Safety Partnership and Community Policing Grants — CFDA No. 16.710 U.S. Department of Homeland Security: Homeland Security Cluster — CFDA No. 97.004, 97.067 U.S. Department of Transportation: Airport Improvement Program— CFDA No. 20.106 Compliance Requirement: Procurement, Suspension and Debarment Condition /Context Although the County indicated that its practice is to check the EPLS system, no documentation evidencing that it had checked the EPLS was maintained, and a certification from the entity was not collected or clause or condition included in the agreements, as applicable, for certain sample transactions selected for testing. Recommendation The County should perform the required verification by checking the EPLS (and documenting evidence of the verification, when it was performed and by whom), collecting a certification from the entity, or adding a clause or condition to the contract with that entity in accordance with the Federal requirements. Views of Responsible Officials and Planned Corrective Action Collier County will apply currently enacted controls and measures operating effectively in one division agency -wide to ensure compliance. 1202 - 1333029 217 Collier County, Florida Schedule of Prior Audit Findings (continued) The Grants Coordinator for the Collier County Sheriff's Office will be responsible for checking EPLS and documenting the verification as recommended above for all Sheriff's grants with this requirement. Current Status HHVS staff is responsible for ensuring all sub recipients, vendors and contractors are not debarred by checking the EPLS web site and printing a copy of the screen indicating that the party is not on file. Said screen prints proving verification and are included in the file. The Fiscal Technician for Parks and Recreation working with the Food Grant staff checks that EPLS documentation is present and includes it in file for corresponding purchase orders and invoices. The Collier County Department of Emergency Management's Sr. Administrative Assistant checks the EPLS website, prints out the verification, and places it in the project files. Airport Authority personnel check the EPLS web site ( https : / /www.epls.gov /epls /search.do) and print documentation as verification for each vendor. This documentation is initialed, scanned and attached to the requisition electronically within the county's accounting system. The Grants Coordinator for the Collier County Sheriff's Office checks EPLS and documents the verification as required for all Sheriff's grants. Finding 2009 -3 State Program Information Florida Housing Finance Corporation (the Corporation) State Housing Initiatives Partnership Program (SHIP) CSFA No. 52.901 Criteria: Reporting Condition /Context The financial information included in the submitted Annual Report was not reconciled to the County's general ledger. Accordingly, we were unable to validate the amount of expenditures and program income reported in the Annual Report. 1202 - 1333029 218 Collier County, Florida Schedule of Prior Audit Findings (continued) Additionally, we noted approximately $192,000 of reversal entries appearing in the detail we were provided of SHIP projects completed during fiscal year 2009 and we were informed that these credits represented prior period corrections dating back as far as 2003. Recommendation The County should implement procedures that require that the statutory reports be reconciled to the general ledger and reviewed and approved prior to being filed with the State. Additionally, should corrections to prior period expenditures be necessary, a process should be in place to ensure that such items are identified and captured on a timely basis. Views of Responsible Officials and Planned Corrective Action Management concurs with the recommendations. Recognizing that internal attempts at completing this difficult reconciliation have fallen short of the requirement, Housing and Human Services has budgeted SHIP grant funds to receive onsite and offsite technical assistance (TA) from the Florida Housing Coalition (FHC). FHC is the technical advisor designated by the grantor agency, Florida Housing Finance Corporation. The TA will consist of reviewing current reconciliation procedures, reports and data collection and maintenance. Any suggested improvements will be implemented. As of this writing, the contract for TA is being review by Housing and Human Services and the County Attorney's Office for form and legal sufficiency. Current Status HHVS staff and one of the grants accountants have worked closely with the SHIP technical advisor to complete and resubmit Annual Reports for Fiscal Years 2006/2007, 2007/2008, and 2008/2009. See Current Status for Finding 2010 -1 above. Finding 20094 State Program Information Florida Housing Finance Corporation (the Corporation) State Housing Initiatives Partnership Program (SHIP) CSFA No. 52.901 1202- 1333029 219 Collier County, Florida Schedule of Prior Audit Findings (continued) Criteria: Special Tests and Provisions Condition /Context No advertisement was made for fiscal year 2009. Recommendation The County should adhere to the established SHIP rules with respect to advertising SHIP funds. Views of Responsible Officials and Planned Corrective Action The County will adhere to the established SHIP rules. Current Status Collier County received $431,868 in SHIP Funding for fiscal year 2009/10; however, it was not advertised for the following reasons: 1. The funds were required to be used exclusively for loans of not more than $8,000 to provide purchase assistance to applicants eligible to receive the federal first -time homebuyer tax credit created through the American Recovery and Reinvestment Act of 2009 for the first year of funding; 2. The loans were intended to front the applicants the tax credit and were intended to be paid back once the tax credit was received by the applicant; HHVS staff determined that recapturing these funds would be difficult and would put the County at risk of non- compliance if funds were not repaid; 3. SHIP guidelines allowed these funds to be used for all approved strategies once the tax credit program expired, and assuming all loans were recaptured for the remaining two years of the grant; 4. Since Collier County was already providing purchase assistance through SHIP in excess of $8,000 per applicant, it was determined that another purchase assistance program would be redundant, and coupled with the inability to guarantee recapturing the funds from tax credit rebates, staff decided to leave the grant in the Trust Fund unused for FY 2009/10; 1202- 1333029 220 Collier County, Florida Schedule of Prior Audit Findings (continued) 5. Since the funds would not be used for FY 2009/10 (no applications would be taken for assistance), there were no new funds to advertise for this period; therefore, per the SHIP Program Manual rules, no advertisement was published. Finding 2009 -5 State Program Information Florida Department of Transportation (FDOT) State Infrastructure Bank (SIB) Loan Program CSFA No. 55.020 Criteria: Reporting Condition /Context The State compliance supplement for this program and the loan agreement require the submission to FDOT of semi - annual progress reports on program and financial activities that occur each year following the award. We noted that reports for December 2008 and June 2009 were not completed or submitted to the FDOT until the time of our testing (September 2009). Recommendation The County should review agreements for reporting requirements and if questions arise as to parry responsible for completion, the County should promptly seek written clarification from the grantor agency. Also, the County should ensure that reports are reviewed for accuracy and completeness by someone other than the preparer. Views of Responsihle Officials and Planned Corrective Action Originally the SIB agreement was for road construction considered to be a local Collier County project. After the SIB agreement was executed, Federal Highway Administration (FHWA) determined that the project would become a state project due to the procurement for a Design Build Finance of I -75 (IROX). Collier's original local project became part of larger state IROX project. 1202 - 1333029 221 Collier County, Florida Schedule of Prior Audit Findings (continued) The Grants Coordinator made a verbal inquiry to Florida Department of Transportation (FDOT) during calendar year 2008 regarding the reporting requirements cited in the SIB agreement and was advised the report was not Collier's responsibility since the project was not let by Collier nor would any portion of the project be managed by Collier as originally anticipated. Subsequently, a report was requested by FDOT for only the most recent six month period. Collier explained to FDOT that if the report was now required, all reports due during the fiscal year 2009 would need to be drafted and submitted as due diligence. All reports submitted were reviewed by the Transportation Administrator though not formally documented as such. Subsequent report reviews by the Transportation Administrator are documented before submission. Collier has no access to FDOT's financial activity or financial system which is needed to complete the report, nor does Collier receive any project status reports on a routine basis. Collier only has access to the data on the amount of loan payback which Collier disburses. This loan payment information can be populated by FDOT as well. Collier must request financial activity and project status information proactively. Requests for data from the grantor on prior year single audit reporting and CAFR data such as loan amortization schedules and project statuses to capture asset valuation has proven to be cumbersome and difficult. Future financial activity requests will be made within 10 business days after the semi - annual report period end to FDOT in order to verify and obtain correct data by the submission date. The Division will prepare the report based on the information provided by FDOT. Prior to submission, the Transportation Administrator will perform a documented review. Current Status The Growth Management Division (formerly Transportation Division) continues to follow the corrective action plan as outlined above. The Acting Grants Accountant continues to draft the SIB report on a biannual basis as required. The report is first submitted for review and approval to the Division Administrator prior to final submission to FDOT by the required deadline. Written procedures are in place to support any staff changes. Staff deems the internal controls put in place have proven successful to resolve the audit concern. 1202- 1333029 222 Collier County, Florida Schedule of Prior Audit Findings (continued) Finding 2009 -6 Federal Program Information Federal Agency /Program: U.S. Department of Transportation: Airport Improvement Program— CFDA No. 20.106 Criteria: Davis -Bacon Act Condition /Context We noted a project during fiscal year 2009 that was subject to the Davis -Bacon requirements. We noted that the required prevailing wage clauses were not included in the contract and the weekly certified payrolls had not been submitted as required. We were informed that the County planned to obtain the certified payrolls upon project completion; however, the requirements dictate that weekly certified payrolls are to be submitted during the course of the project. Recommendation The County should ensure that the required prevailing wage clauses are included in all contracts subject to the Davis -Bacon Act and that the required weekly certified payrolls are obtained. Views of Responsible Officials and Planned Corrective Action In order to rectify this deficiency Airport Authority personnel will review payroll submittals and provide documentation to assure compliance with the Davis -Bacon Act. Additionally personnel will work with any consultants and purchasing to include proper language in bids and contracts. In addition our procedure manual will be updated. Current Status The proper contract language regarding Davis -Bacon is included in bids and contracts. The Airport Authority performs an examination, determination and documentation by noting on each payroll statement that the wages paid by the contractor have been reviewed and that they are /are not in compliance. A log is maintained for the payroll submitted each week by the vendors to document compliance. 1202- 1333029 223 THIS PAGE INTENTIONALLY LEFT BLANK IF ERNST &Y YOUNG Ernst & Young LLP Suite 500 5100 Town Center Circle Boca Raton, Florida 33486 Tel: +1 561 955 8000 Fax: +1 561 955 8200 www.ey.com Management Letter and State Reporting Requirements Members of the Board of County Commissioners Collier County, Florida: We have audited the financial statements of the governmental activities, the business -type activities, the aggregate discretely presented component units, each major fund, and the aggregate remaining fund information of Collier County, Florida as of and for the year ended September 30, 2011, which collectively comprise Collier County, Florida's basic financial statements and have issued our report thereon dated February 29, 2012. We conducted our audit in accordance with auditing standards generally accepted in the United States of America; the standards applicable to financial audits contained in Government Auditing Standards, issued by the Comptroller General of the United States; and OMB Circular A -1 33, Audits of States, Local Governments, and Non - Profit Organizations. We have issued our Report of Independent Certified Public Accountants 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, Report of Independent Certified Public Accountants on Compliance with Requirements That Could Have a Direct and Material Effect on each Major Federal Program and State Project and on Internal Control over Compliance in Accordance with OMB Circular A -133, Section 215.97, Florida Statutes and Chapter 10.550, Rules of the Auditor General, and Schedule of Findings and Questioned Costs. Disclosures in those reports and schedule, which are dated February 29, 2012, should be considered in conjunction with this management letter. Additionally, our audit was conducted in accordance with the provisions of Chapter 10.550, Rules of the Auditor General, which govern the conduct of local governmental entity audits performed in the State of Florida. We have the following suggestions for improvement in accounting procedures and controls. 1202- 1334456 A member firm of Ernst & Young Global Limited III III IIIIIIIIIIIIIIIIIDUi� " "' "� JERNSr &YOUNG Single Audit Related ML Comments 2011 -1 Grant Compliance Observation During our testing of the County's various federal and state grant programs, we noted non- compliance over the management of several grant programs in the following areas: P. Payroll allocation and processing errors P. Subrecipient documentation and monitoring ► Eligibility ► Treatment of change orders ► General reporting ► ARRA Section 1512 reporting ► Period of availability Recommendation We recommend enhanced training of employees in grant compliance and more thorough supervisory review of grant transactions, documentation and reporting. We also recommend the County consider implementing a central grant management or grant compliance office of individuals to more effectively monitor grant compliance. Management's response Management concurs with the recommendation of the auditors. In light of continuing audit findings, internal audit review and other actions management was made aware of, the County replaced the prior Director in Housing, Human and Veteran Services (HHVS) with a top management team member in late August 2011 to restructure the entire HHVS Department and implement effective controls, processes and procedures. 1202 - 1334456 A member firm of Ernst & Young Global Limited 2 l ERN . Ili IIIII�II ST &YOUNG i 1 Realizing that this alone was not enough and wanting to effect changes throughout the entire organization, County Manager, Leo Ochs, submitted a grants reorganization plan to the Board of County Commissioners on January 30, 2012. In effect, all administrative grant compliance functions were centralized at the corporate level under the Office of Management and Budget (OMB). This centralization will allow the entire organization to benefit from the substantial grants accounting and compliance expertise that exist within that operation. While responsibilities for grant program management and service delivery will remain with the operating units, the key areas of grant compliance such as cash management, procurement, monitoring, reconciliation, and reporting will be centrally managed and monitored across the agency. OMB will implement this centralized grants management model in several phases over time. The immediate focus is bringing obvious noncompliant activities, such as identified in this Single Audit Report and prior years' reports, back into adherence with grantor requirements. OMB staff will become fully imbedded in the Agency's day to day administrative grant functions and existing grants accountants serving under the Administrative Services Division will be reassigned to the OMB. These employees will be deployed in key operating units to implement consistent business processes and internal controls and carry out corrective actions. A. Status of Prior Year Recommendations 2010 -1 Grant Reporting Controls (Sheriff s Office) Observation During our single audit testing over reporting requirements for the "Recovery Act — Edward Byrne Memorial Justice Assistance Grant (JAG) Program/Grants to States and Territories" federal program, we noted that for one of the quarterly performance reports during fiscal year 2010 sampled that the expenditures were overstated by approximately $2,850. The report covered the three month period ended June 30, 2010 and erroneously included March 2010 expenditures, which had been previously reported in the performance report covering the prior three months ended March 31, 2010. We also noted that there was no evidence of reports submitted to the grantor agency being reviewed prior to submission by someone other than the preparer for accuracy and completeness. 1202- 1334456 3 A member firm of Ernst & Young Global Limited -'J� ENNST &YOUNG Recommendation We recommend that all reports submitted to grantor agencies be subjected to a supervisory review for accuracy and completeness prior to submission. The preparer and the reviewer should sign -off on the report and a copy should be retained in the file to provide evidence that the report was properly reviewed. Management's response The expenditures on the quarterly reports are a compilation of the monthly claims which have been submitted to the grantor. Monthly claims are reviewed and approved by the Finance Director prior to submission. The report for the period ended June 30, 2010 inadvertently included one expenditure from the prior reporting period. It should be noted that all expenditures were accurately reported in the final closeout report for the grant. A spreadsheet is maintained which details expenditures for the grant claims and provides documentation for what is submitted on the quarterly reports. Because all required reports are directly submitted online, the spreadsheet will serve as a review document for the input for the submitted expenditure information. The preparer and the reviewer will sign -off on the spreadsheet. The submitted report will be compared to the spreadsheet to ensure correct information was reported to the grantor. Current year status Spreadsheets are maintained for expenditures for each individual grant. The spreadsheets are used to input required information for online reports. All spreadsheets are reviewed and signed off on by the preparer and the Finance Director prior to any claims being submitted. The Grants Coordinator compares the information reported to the grantor to the appropriate spreadsheet to ensure correct information was reported. 2010 -2 Subrecipient Agreements — ARRA Requirements Observation OMB Circular A -133 guidelines require that pass- through entities separately identify to each subrecipient, and document at the time of the subaward and disbursement of funds, the Federal award number, CFDA number, and the amount of American Recovery and Reinvestment Act (ARRA) funds; and require their subrecipients to provide appropriate identification in their Schedule of Expenditures of Federal Awards (SEFA) and Data Collection Form (SF -SAC). For certain ARRA federal programs tested during our single audit (i.e., Community Development Block Grant ARRA Entitlement Grants and Homelessness Prevention and Rapid Re- Housing Program) for which the County made awards to subrecipient organizations, we noted that the agreements with the subrecipients provided the required information regarding the awards and 1202- 1334456 A member firm of Ernst d Young Global Limited 0 II IIIIIIIIIIIIIIIIIIIIIIIIIUii� " " "� JERNST &YouNc indicated that "the subrecipient shall maintain all records required by ARRA." However, they did not explicitly indicate that the subrecipients are to appropriately identify the ARRA funds in their SEFA and SF -SAC. Recommendation We recommend that the County update its standard form of subrecipient agreement to explicitly state the requirement to provide appropriate identification of ARRA funds in the SEFA and SF- SAC. Management's response The Collier County Department of Housing, Human & Veteran Services (HHVS) concurs with this audit observation and agrees to amend its American Recovery and Re- Investment Act (ARRA) grants to more specifically outline the Schedule of Expenditures of Federal Awards (SEFA) and the Data Collection Form (SF -SAC) reporting requirement for its sub recipients. The amendment will be made to all Homelessness Prevention and Rapid Re- Housing Program (HPRP) and Community Development Block Grant - Recovery (CDBG -R) sub recipient grant agreements. Current year status Existing subrecipient agreements were approved by the Board of County Commissioners on May 24, 2011 to amend them and incorporate additional American Recover and Reinvestment Act of 2009 (ARRA) reporting requirements. All future subrecipient agreements will contain the proper reporting requirements as well. C. Other Required Communications The Rules of the Auditor General, Section 10.554 (1)(i)(1), require that we address in the management letter whether or not corrective actions have been taken to address significant findings and recommendations made in the preceding annual financial audit report. The status of recommendations made in the preceding annual financial audit is included above. In connection with our audit, we noted no instances of noncompliance with Section 218.415, Florida Statutes regarding the investment of public funds. The Rules of the Auditor General, Section 10.554(1)(i)(3), require that we address in a management letter any recommendations to improve Collier County, Florida's financial management, accounting procedures, and internal controls. Current year recommendations to improve Collier County, Florida's financial management, accounting procedures, or internal controls are included above. 1202 - 1334456 A member firm of Ernst & Young Global Limited k JERNSrsYouNc The Rules of the Auditor General, Section 10.554(1)(i)(4), require that we address in a management letter any violations of provisions of contracts and grant agreements or abuse that have an effect on the financial statements that is less than material but more than inconsequential. The results of our audit disclosed no violations of provisions or contracts and grant agreement or abuse that would have an effect on the financial statement that is less than material but more than inconsequential. The Rules of the Auditor General, Section 10.554(l)(i)(5), require disclosure in the management letter of the following matters, if not addressed in the auditor's report on internal control over financial reporting and on compliance and other matters or in the schedule of findings and questioned costs, and are not clearly inconsequential: (a) Violations of laws, rules, regulations, and contractual provisions or abuse that have occurred, or are likely to have occurred, would have an immaterial effect on the financial statements, and were discovered within the scope of the audit; (b) Control deficiencies that are not significant deficiencies, including, but not limited to: (1) Improper or inadequate accounting procedures (e.g., the omission of required disclosures from the annual financial statements); (2) Failures to properly record financial transactions; and (3) Other inaccuracies, shortages, defalcations, and instances of fraud discovered by, or that come to the attention of, the auditor. The results of our audit disclosed no violations of laws, rules, regulations, and contractual provisions or abuse, no improper or illegal expenditures, and no control deficiencies other than the internal control recommendations included above. The Rules of the Auditor General, Section 10.554(1)(i)(6), also require 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. In that regard, Collier County, Florida was established under Chapter 107, Section 1, Florida Statutes. The legal authority for Collier County and its component units are discussed in Note 1 to the financial statements. During the course of our audit of the County, nothing came to our attention that would cause us to believe that the County was in a state of financial emergency, as defined by Section 218.503(1), Florida Statutes. As required by the Rules of the Auditor General, Section 10.554(1)(i)(7)(b), the County filed its report pursuant to Section 218.32(1)(a), Florida Statutes. Based on our review of the financial information contained in this report, no material differences were found in comparing this information to that of the basic financial statements. 1202 - 1334456 A member firm of Ernst & Young Global Limited G JEaNSrsYOUNc As required by the Rules of the Auditor General, Sections 10.554(1)(i)(7)(c) and 10.556(7), we applied financial condition assessment procedures. It is management's responsibility to monitor the County's financial condition, and our financial condition assessment was based in part on representations made by management and the review of financial information provided by same. This report is intended solely for the information and use of the Board of County Commissioners, management and the Auditor General of the State of Florida, and is not intended to be and should not be used by anyone other than these specified parties. February 29, 2012 1202- 1334456 t ��n+eyui' U � A member firm of Ernst & Young Global Limited 7 THIS PAGE INTENTIONALLY LEFT BLANK ANNUAL DEBT REPORT (UNAUDITED) Pursuant to the Collier County Debt Policy the following Tables were prepared for the fiscal year ended September 30, 2011. Table 1. Calculation of Collier County General Governmental Debt Ratio Table 2. Calculation of Collier County Enterprise Debt Ratios TABLE 1 Calculation of Collier County General Governmental Debt Ratio For the Fiscal Year Ended September 30, 2011 Bondable revenues, as defined by Collier County Debt Policy: Current Ad Valorem Taxes $ 251,606,665 Governmental Impact Fees 12,080,534 Half Cent Sales Tax 28,364,419 Developmental Fees 11,415,425 State Revenue Sharing 7,723,015 5th Cent Local Option Gas Tax 4,937,121 6th Cent Local Option Gas Tax 6,477,711 Constitutional Gas Tax 3,841,658 Seventh Cent Gas Tax 1,677,884 Ninth Cent Gas Tax 1,377,126 Parks and Recreation Fees 7,051,590 Tourist Development Tax 13,883,740 Court Facilities Fees 1,113,900 Communications Services Tax 5,589,726 Total bondable revenues $ 357,140,514 Fiscal 2011 governmental debt service requirements: Series 2002 Capital Improvement Bonds Principal: $ 2,540,000 Interest: 659,401 Series 2003 Capital Improvement Bonds Principal: 1,405,000 Interest: 1,586,238 Series 2005 Capital Improvement Bonds Principal: 5,815,000 Interest: 6,731,894 Series 2003 Gas Tax Bonds Principal: 5,725,000 Interest: 2,823,915 Series 2005 Gas Tax Bonds Principal: 1,460,000 Interest: 4,574,612 Series 2010 Special Obligation Bonds Principal: 1,545,000 Interest: 2,257,711 Series 2010B Special Obligation Bonds Principal: _ Interest: 338,985 State Infrastructure Bank Loan Principal: 1,875,930 Interest: 164,070 Total fiscal 2011 governmental debt service requirements $ 39,502,756 Governmental debt ratio of fiscal year 2011 debt service requirements to total bondable revenues (13.0% maximum allowed by County policy) 11.1% Notes: All revenues are GAAP based accrual and debt service is based upon current amortization tables for the fiscal year indicated. Debt prepayments are not included as debt service requirements. TABLE 2 Calculation of Collier County Enterprise Debt Ratios For the Fiscal Year Ended September 30, 2011 Collier County Water and Sewer District: Total Sales Revenue $ 101,960,419 Allowance for Funds Prudently Invested 1,235,636 Miscellaneous Revenue 2,256,439 Total Operating Revenue 105,452,494 Non - Operating Revenue 1,386,476 Gross Revenue 106,838,970 Less: Operation and Maintenance Expense (excluding Depreciation and Amortization) 60,106,549 Net Revenue Available for Debt Service (1) $ 46,732,421 Total Fiscal Year 2011 Debt Service on Bonds (2) $ 11,679,957 Net Revenue Debt Service Coverage on Bonded Debt (100% Required) - (1/2) 400% Other Pledged Funds: System Development Fees $ 7,415,367 Special Assessment Proceeds 520,826 Total Pledged Funds Available for Debt Service (3) $ 54,668,614 Total Fiscal Year 2011 Debt Service on Bonds (4) $ 11,679,957 Total Pledged Funds Debt Service Coverage on Bonded Debt (125% Required) - (3/4) 468% Total Pledged Funds Available for Debt Service After Payment of Bonds (5) $ 42,988,657 Total Fiscal Year 2011 Debt Service on Subordinated Indebtedness (6) $ 9,911,370 Calculated Coverage on Subordinated Indebtedness - (5/6) 434% Total Pledged Funds Available for System Purposes $ 33,077,287 Summary Debt Statement for Fiscal Year 2011 General Governmental Debt: Collier County's Debt Policy sets the maximum allowable governmental debt ratio at 13.0 %, and the County continues to operate below this self - imposed maximum. The Constitution of the State of Florida and the Florida Statutes set no legal debt limit. The governmental debt ratio is the ratio of debt service requirements to total bondable revenues, as defined by Collier County's Debt Policy. It should be noted that while ad valorem taxes are bondable for purposes of the governmental debt ratio calculation, they may only be pledged pursuant to voter referendum. The governmental debt ratio increased from 9.3 %, as of September 30, 2010, to 11.1% for the fiscal year ended September 30, 2011. The increase in the debt ratio is primarily the result of an overall decline in bondable revenues of 9.3 %. Within the bondable revenues, current ad valorem taxes decreased by 12.1 % due to decreases in taxable assessed value and governmental impact fees declined by 35.4% as impact fee rates charged have been indexed downward. Offsetting these decreases was a 13.3% increase in developmental fees, a 5.3% increase in sales tax revenues and an 8.0% increase in tourist development tax revenues over fiscal year 2010. Total governmental debt service requirements increased by 8.3% from fiscal year 2010 to fiscal year 2011 due to the refinancing of the County's variable rate commercial paper loans in July of 2010. The variable rate commercial paper loans, paying interest only, were replaced by the Series 2010 Special Obligation Bonds that pay semi - annual principal and interest. A recent payoff of the subordinate State Infrastructure Bank loan, coupled with continued pay down of principal and what is projected to be stabilizing general governmental revenue, will likely produce a decrease in the general governmental debt ratio for fiscal year ending 2012. Assuming no new debt issuance, this downward trend should continue. In November of 2010, Collier County refinanced all of its outstanding Series 2002 Capital Improvement Revenue Bonds with the Series 2010B Special Obligation Revenue Bonds. The Series 2010 bonds have a fixed interest rate and an all in true interest cost of 3.1%. The refinancing of the Series 2002 bonds achieved a net present value savings on the refunded bonds of 5.4 %. There were no other general governmental debt borrowings for fiscal year 2011. Governmental Debt Ratings Table: Current Ratings (as of 3/3/2012) Fitch Moody's Standard & Poor's Capital Improvement Revenue Bonds AA- Al AA- Gas Tax Revenue Bonds AA- A2 A Special Obligation Bonds AA Aa2 AA A rating of AA is an indication by Fitch Ratings of an investment grade instrument, but one which carries a slightly higher risk than a AAA rated bond. Fitch also uses intermediate +/- modifiers for each AA category. A rating of Aa2 is an indication by Moody's Investors Service of a high quality investment grade instrument with very low credit risk, but "their susceptibility to long -term risks appears somewhat greater" than a Aaa rated bond. A rating of Al is an indication by Moody's of an investment grade instrument with low credit risk but the bond has elements present that suggest a higher susceptibility to impairment over the long term than a Aa investment. Moody's uses intermediate modifiers of 1 (higher) to 3 (lower) within the Aa and A ranges. A rating of AA is an indication by Standard and Poor's of an investment grade instrument issued by a "quality borrower" but with slightly more risk than a AAA grade investment. A rating of A is an indication by Standard and Poor's of an investment grade instrument but one more susceptible to adverse changes in circumstances and economic conditions than AAA or AA instruments. Standard and Poor's also uses intermediate +/- modifiers for each AA category. The County's half cent sales tax revenues are pledged for the payment of all outstanding Capital Improvement Revenue bonds. Fiscal year 2011 sales tax revenues covered the current year debt service payments on all outstanding Capital Improvement Revenue bonds at 151%. The combined gas tax revenues are pledged for the payment of all the Gas Tax Revenue bonds. Fiscal year 2011 gas tax revenues covered the current year debt service payments on all outstanding Gas Tax Revenue bonds at 126 %. Collier County Enterprise Debt: Currently, the Collier County Water and Sewer District (District) is the only County enterprise activity with bonded debt outstanding. The Collier County Debt Policy does not set a maximum allowable enterprise debt ratio, but coverage requirements are set by bond covenants. Net revenues, defined as operating revenues plus non - operating revenues less operating expenses, excluding depreciation, must cover bonded debt service at 100 %. Total pledged funds, defined as net revenues plus system development fees and special assessments must cover bonded debt at 125 %. Net revenue coverage on bonded debt was 400% and total pledged funds coverage on bonded debt was 468% for fiscal year 2011. Net revenue available for debt service decreased during fiscal year 2010 by 8.3 %, mainly due to an 18.1% increase in operating and maintenance expenses, excluding depreciation. Operating expenses increased as the Water and Sewer District's focus has shifted from capital expansion to maintenance and optimization of existing facilities. Total pledged funds coverage on bonded debt decreased during fiscal year 2011 mainly due to the decrease in net revenue available for debt service discussed above. Bonded debt service payments decreased by 3.6% when compared to fiscal year 2010. The District's calculated coverage on subordinated debt, all in the form of State Revolving Fund Loans, is 434 %. The total pledged funds coverage required by the loan agreements varies between 115% and 125 %, depending upon the individual loan agreement. The Collier County Water and Sewer District issued no debt during fiscal year 2011. se Debt Ratings Table: Current Ratings (as of 3/3/2012) Fitch Moody's Standard & Poor's* Water and Sewer Revenue Bonds AA+ Aa2 - *- Standard & Poor's does not currently rate County Water and Sewer bonds. A rating of AA is an indication by Fitch Ratings of an investment grade instrument, but one which carries a slightly higher risk than a AAA rated bond. Fitch also uses intermediate +/- modifiers for each AA category. A rating of Aa2 is an indication by Moody's Investors Service of a high quality investment grade instrument, but "their susceptibility to long -term risks appears somewhat greater" than a Aaa rated bond. Moody's uses intermediate modifiers of 1 (higher) to 3 (lower) within the Aa and A ranges. The District maintains a single renewal and replacement reserve for water and sewer, for its capital spending program. The District's continued strategy of revenue - centric, cost - contained, risk based capital program management toward integrated Asset Management Program, and its decisions against measured operational risk, were deliberately designed to manage deferral of capital construction. This, together with the "pay as you go" approach, maintains the District's financial sustainability. The District has chosen to avoid pre- approved State Revolving Fund loan drawdowns to preserve the "pay as you go" approach, thus avoiding additional outstanding debt. Since FY07, the District, operating in an uncertain cost and revenue market environment, deferred with measured operational risk significant levels of spending in capital improvement projects. The deferral of significant capital rehabilitation projects over this time period maintained the District's liquidity and financial flexibility. These decisions protected the District's favorable bond rating; avoided the potential of future user -fee rate spikes, and negated costly borrowing with the associated increases in annual debt service. District management believes this approach improved financial stability in the face of the uncertainties in the local economy, and allowed for the appropriate response to economic recovery. This deferral of capital spending, however, has elevated the risk level of everyday operations within the utility; the deferrals cannot be considered avoided cost as the deferred costs for the next 5, 10, and 20 year planning horizons will be a part of a more specific execution timeline within the Asset Management process. In the latter part of FY10, through FY11, management re- evaluated previously deferred projects, and directed execution on projects that maintained minimally acceptable levels of risk in compliance, while meeting customer demands. Through aggressive and proactive operational management, Water and Sewer District management believes that this risk level is currently acceptable in the balance of the overall mission to stay in operational and regulatory compliance, meet customer demand, and posture for a best -value future. SPECIAL - PURPOSE FINANCIAL STATEMENTS Collier County, Florida Clerk of the Circuit Court Year Ended September 30, 2011 With Report of Independent Certified Public Accountants Ernst & Young LLP =1 ERNST & YOUNG Collier County, Florida Clerk of the Circuit Court Special - Purpose Financial Statements Year Ended September 30, 2011 Contents Report of Independent Certified Public Accountants ........................................ ..............................1 Special - purpose Financial Statements Special - Purpose Balance Sheet — Governmental Funds .................................... ..............................3 Special - Purpose Statement of Revenues, Expenditures, and Changes in Fund Balances — Governmental Funds .................................................................... ..............................4 Special - Purpose Statement of Revenues, Expenditures, and Changes in Fund Balance — Budget and Actual — General Fund ................................................ ..............................5 Special - Purpose Statement of Revenues, Expenditures, and Changes in Fund Balance — Budget and Actual — Court Services Fund (Budgetary Basis) ....... ..............................6 Special - Purpose Statement of Revenues, Expenditures, and Changes in Fund Balance — Budget and Actual — Public Records Modernization Fund ............ ..............................7 Special - Purpose Balance Sheet — Agency Funds .................................. ............................... Notes to Special - Purpose Financial Statements ................................................. ..............................9 Combining Information Combining Balance Sheet — Agency Funds ................................................... ............................... .23 Statement of Changes in Assets and Liabilities — Agency Funds ..................... .............................24 Other Reports Report of Independent Certified Public Accountants on Internal Control Over Financing Reporting and on Compliance and Other Matters Based on an Audit of Special - Purpose Financial Statements Performed in Accordance With Government AuditingStandards ........................................................................................ .............................25 ManagementLetter ........................................................................................... .............................27 1112 - 1316003 IIIIIii� " "� JERNST &YOUNG Ernst 11 You q LLP Suite 500 5100 Town nter Circle Boca Raton, loricla 33486 Tel: +1561055 8000 Fax: +1561 55 8200 www.ey.com Report of Independent Certified Public Accountants Honorable Dwight E. Brock, Clerk of the Circuit Court Collier County, Florida We have audited the accompanying special - purpose financial statements of each major fund and the aggregate remaining fund information of the Collier County, Florida Clerk of the Circuit Court (the Clerk of the Circuit Court), as of and for the year ended September 30, 2011, as listed in the table of contents. These special - purpose financial statements are the responsibility of the Clerk of the Circuit Court's management. Our responsibility is to express opinions on these special - purpose financial statements based on our audit. The prior year summarized comparative financial information has been derived from the Clerk's special - purpose financial statements for the year ended September 30, 2010, and in our report dated January 10, 2011, we expressed unqualified opinions on the respective financial statements of each major fund and the aggregate remaining fund information. We conducted our audit in accordance with auditing standards generally accepted in the United States and the standards applicable to financial audits contained in Government Auditing Standards, issued by the Comptroller General of the United States. Those standards require that we plan and perform the audit to obtain reasonable assurance about whether the special - purpose financial statements are free of material misstatement. We were not engaged to perform an audit of the Clerk of the Circuit Court's internal control over financial reporting. Our audit included consideration of internal control over financial reporting as a basis for designing audit procedures that are appropriate in the circumstances, but not for the purpose of expressing an opinion on the effectiveness of the Clerk of the Circuit Court's internal control over financial reporting. Accordingly, we express no such opinion. An audit also includes examining, on a test basis, evidence supporting the amounts and disclosures in the special - purpose financial statements, assessing the accounting principles used and significant estimates made by management, as well as evaluating the overall special - purpose financial statement presentation. We believe that our audit provides a reasonable basis for our opinions. As discussed in Note 1, the accompanying special - purpose financial statements referred to above were prepared for the purpose of complying with Section 218.39, Florida Statutes, and Chapter 10.557(3), Rules of the Auditor General for Local Governmental Entity Audits. These special - purpose financial statements are not intended to be a complete presentation of the Clerk of the Circuit Court's financial position and its changes in financial position, where applicable, therefore, for the years then ended, in conformity with accounting principles generally accepted in the United States. Additionally, the special - purpose statements present only the Clerk of the 1112- 1316003 A member firm of Ernst & Young Global Limited MERNST & YOUNG Circuit Court and do not purport to, and do not, present fairly the financial position of Collier County, Florida, as of September 30, 2011, and the changes in its financial position, where applicable, for the year then ended, in conformity with accounting principles generally accepted in the United States. In our opinion, the special - purpose financial statements referred to above present fairly, in all material respects, the respective financial position of each major fund and the aggregate remaining fund information of the Clerk of the Circuit Court as of September 30, 2011, and the respective changes in financial position thereof, and the budgetary comparison for the general fund, the court services fund, and the public records modernization fund for the year then ended, in conformity with accounting principles generally accepted in the United States. As discussed in Note 1, the Clerk of the Circuit Court changed its method of accounting and reporting for governmental fund balances effective October 1, 2010 as a result of the adoption of Governmental Accounting Standards Boards Statement No. 54, Fund Balance Reporting and Governmental Fund Type Definitions. In accordance with Government Auditing Standards, we have also issued our report dated December 19, 2011 on our consideration of the Clerk of the Circuit Court's internal control over financial reporting and on our tests of its compliance with certain provisions of laws, regulations, contracts, and grant agreements and other matters. The purpose of that report is to describe the scope of our testing of internal control over financial reporting and compliance and the results of that testing, and not to provide an opinion on the internal control over financial reporting or on compliance. That report is an integral part of an audit performed in accordance with Government Auditing Standards and should be considered in assessing the results of our audit. This report is intended solely for the information and use of the Clerk of the Circuit Court, management, the Board of County Commissioners of Collier County, Florida, and the Auditor General of the State of Florida, and is not intended to be and should not be used by anyone other than these specified parties. f UP December 19, 2011 1112 - 1316003 2 A member firm of Ernst & Young Global Limited C O U v U �x o � U a' U b w r� C� 7 rFO V N >n 0 a a _O O N .� 442 � y N ^-' O O M +' N COO O v .; h A O E. a " a � t O � U c M 00 O 't ki) I �c rn O V v �o �cd C� E y N 0000 � C7 Obi �D O � N N �D �O lr V vl 1 N_ O� N vl CO U UCC N W U O �O M O10 O 00 °= 00 0. — .-• M 69 > a Q Q Cf3 w <O U 3 J d U Q A A F- 69 ° [— w F. NNr N 00 110 140 V V 00 IT �D M 00 N O �D M V'1 t^ M O 0000 M M M N r N 69 EA 00 N O v7 to O M M V1 l!) M M M M °� C4 C4 00 M N N N ao d' v1 N N rs3 "oo sA �O M 00 00 O M In O O� O �o 0000 N l— U N - N Gq G4�j M O M o v �o �cd C� E y U C7 U U. 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T o v �o N h 7 rn 7 o v1 V O 7 M l � 00 00 Ct M M 0 7 0 0 00 try O� b I� v N vl K a rn M oyti — c o h v� M 7 P 0• M � 7 [�, ONO V � h ^ M M M N N h O 00 OC OC v`oi N V�1 N � o�c � � N O• h N N vl b y ul h ml� ° a c o � G m 'O N N G X O n a E c 2 ° s u a$ CJ c o s° E v o ° O G ^ y O C D N N •p O C v .o w 5B v C u n O •T u O U u O U y Z ° o o° o e c . e E E � an n � ° ° � ❑ F z 0 o ni y 2 Vie, n. o• o w y U G w 'r y n eca on� > aXi c o u p •a y l c e y Q' F W t% cn O M N Collier County, Florida Clerk of the Circuit Court Special - Purpose Statement of Revenues, Expenditures, and Changes in Fund Balance — Budget and Actual — General Fund Year Ended September 30, 2011 Revenues: Charges for services [nterest income Total revenues Expenditures: General government: Personal services Operating expenditures Capital outlay Total expenditures Excess (deficiency) of revenues over (under) expenditures Other financing sources (uses): Transfers in: Collier County, Florida Board of County Commissioners appropriations Transfers out: Collier County, Florida Board of County Commissioners: Distribution of excess appropriations Total other financing sources (uses) Excess of revenues and other financing sources over expenditures Fund balance — beginning of year Fund balance — end of year See accompanying notes. Variance With Final Budget Budget Positive Original Final Actual (Negative) $ 2,287,100 $ 2,456,100 $ 2,565,607 $ 109,507 30,000 90,000 21,101 (68,899) 2,317,100 2,546,100 2,586,708 40,608 5,604,900 5,296,500 5,247,432 49,068 1,605,500 1,637,400 1,635,724 1,676 116,600 885,400 882,138 3,262 7,327,000 7,819,300 7,765,294 54,006 (5,009,900) (5,273,200) (5,178,586) 94,614 5,009,900 5,273,200 5,273,200 — — — (94,614) (94,614) 5,009,900 5,273,200 5,178,586 (94,614) $ — $ — $ — $ — 1112 - 1316003 5 Collier County, Florida Clerk of the Circuit Court Special - Purpose Statement of Revenues, Expenditures, and Changes in Fund Balance — Budget and Actual — Court Services Fund (Budgetary Basis) Year Ended September 30, 2011 Variance With Final Budget Budget Positive Original Final Actual (Negative) Revenues: Intergovernmental $ 6,564,275 $ 8,714,858 $ 8,109,135 $ (605,723) Total revenues 6,564,275 8,714,858 8,109,135 (605,723) Expenditures: General government: Personal services 6,046,468 7,156,787 6,983,219 173,568 Operating expenditures 517,807 519,555 479,299 40,256 Total expenditures 6,564,275 7,676,342 7,462,518 213,824 Excess of revenues over expenditures — 1,038,516 646,617 (391,899) Other financing uses: Transfers out: Distribution of excess court revenue to the State — (1,038,516) (1,038,516) — Total other financing uses — (1,038,516) (1,038,516) — Deficiency of revenues and other financing uses under expenditures — — (391,899) (391,899) Fund balance — beginning of year — — 630,874 630,874 Fund balance — end of year $ — $ — $ 238,975 $ 238,975 See accompanying notes 1112- 1316003 6 Collier County, Florida Clerk of the Circuit Court Special - Purpose Statement of Revenues, Expenditures, and Changes in Fund Balance — Budget and Actual — Public Records Modernization Fund Revenues: Charges for services Interest income Total revenues Expenditures: General government: Personal services Operating expenditures Capital outlay Total expenditures Deficiency of revenues under expenditures Other financing sources (uses): Transfers in from the Collier County, Florida Board of County Commissioners Transfers out to other fiords Total other financing sources (uses) Deficiency of revenues and other financing sources (uses) under expenditures Fund balance — beginning of year Fund balance — end of year See accompanying notes. Year Ended September 30, 2011 Variance With Final Budget Budget Positive Original Final Actual (Negative) $ 600,000 $ 600,000 $ 1,179,454 $ 579,454 6,000 6,000 8,939 2,939 606,000 606,000 1,188,393 582,393 799,200 799,200 781,649 17,551 459,400 608,800 382,451 226,349 1,025,900 876,500 150,720 725,780 2,284,500 2,284,500 1,314,820 969,680 (1,678,500) (1,678,500) (126,427) 1,552,073 (1,678,500) (1,678,500) (126,427) 1,552,073 2,565,258 2,565,258 3,749,172 1,183,914 $ 886,758 $ 886,758 $ 3,622,745 $ 2,735,987 1112 - 1316003 7 Collier County, Florida Clerk of the Circuit Court Special - Purpose Balance Sheet — Agency Funds Assets Cash and cash equivalents Total assets Liabilities Due to the Collier County, Florida Board of County Commissioners Due to other governments Deposits Total liabilities See accompanying notes. 1112 - 1316003 September 30 2011 2010 $ 18,905,959 $ 21,474,385 $ 18,905,959 $ 21,474,385 $ 349,252 $ 408,708 1,917,563 1,062,928 16,639,144 20,002,749 $ 18,905,959 $ 21,474,385 Collier County, Florida Clerk of the Circuit Court Notes to Special - Purpose Financial Statements Year Ended September 30, 2011 1. Summary of Significant Accounting Policies Reporting Entity The Collier County, Florida Clerk of the Circuit Court (the Clerk) is an elected constitutional officer as provided for by the Constitution of the State of Florida. The Clerk's budget is presented pursuant to Chapter 218, Florida Statutes. Additionally, a budget is submitted to the Florida Clerks of Court Operations Corporation for the court services fund. The Clerk's budget including the public records modernization fund and the juvenile assessment center fund is approved by the Clerk. The special - purpose financial statements presented include the general fund, special revenue funds, and agency funds of the Clerk's office. The accompanying special - purpose financial statements were prepared for the purpose of complying with Section 218.39, Florida Statutes, and Section 10.557(3), Rules of the Auditor General for Local Governmental Entity Audits. Section 10.556(4), Rules of the Auditor General for Local Governmental Entity Audits, requires the Clerk to only present fund financial statements. Accordingly, due to the omission of government -wide financial statements and related disclosures including a management's discussion and analysis, these special - purpose financial statements do not constitute a complete presentation of the financial position of the Clerk as of September 30, 2011 and the changes in its financial position for the year then ended in conformity with Governmental Accounting Standards Board (GASB) Statement No. 34, Basic Financial Statements — and Management's Discussion and Analysis — for State and Local Governments, but otherwise constitute special - purpose financial statements prepared in conformity with accounting principles generally accepted in the United States. The financial activities of the Clerk, as a constitutional officer, are included in the Collier County, Florida Comprehensive Annual Financial Report. The general operations of the Clerk are funded by fees from third parties, appropriations from the Collier County, Florida Board of County Commissioners (Board), appropriations from the State of Florida (since July 1, 2009) and interest income. Pursuant to Section 218.32(2) Florida Statutes, funds remaining in the general fund, at fiscal year -end in excess of amounts expended, are returned to the Board. Excess revenues returned to the Board are reflected as transfers out in the Clerk's general fund. Court- related operations are funded by the State via appropriations from the State of Florida (since July 1, 2009) and a small child support grant; any surplus is returned to the State. 1112 - 1316003 9 Collier County, Florida Clerk of the Circuit Court Notes to Special - Purpose Financial Statements (continued) 1. Summary of Significant Accounting Policies (continued) Measurement Focus, Basis of Accounting, and Basis of Presentation These special - purpose fund financial statements report detailed information about the Clerk. The focus of governmental fund financial statements is on major funds rather than reporting funds by type. Each major fund is reported in a separate column. Governmental Funds Governmental funds are accounted for using the flow of current financial resources measurement focus. Only current assets and current liabilities, generally, are included on the special - purpose balance sheet. Operating statements for these funds present increases (i.e., revenues and other financing sources) and decreases (i.e., expenditures and other financing uses) in net current assets. The Clerk reports the following major governmental funds: General Fund — The general fund is used to account for all revenue and expenditures applicable to the general operations of the Clerk, which are not accounted for in another fund. All operating revenue not specifically restricted or designated as to use, is recorded in the general fund. Court Services Fund — This fund was established to account for court- related filing fees, service charges, fines, court costs, appropriations and expenses of the Clerk as mandated by Section 28.35, Florida Statutes. Public Records Modernization Fund — This fund is mandated by Section 28.24(12)(d), Florida Statutes, to be held in trust by the Clerk and used exclusively for equipment and maintenance of equipment, personnel training, and technical assistance in modernizing the public records system of the office. Effective July 1, 2004, an additional amount is collected pursuant to Section 28.24 (12) (e), Florida Statutes, and used exclusively for funding court- related technology needs. 1112 - 1316003 10 Collier County, Florida Clerk of the Circuit Court Notes to Special - Purpose Financial Statements (continued) 1. Summary of Significant Accounting Policies (continued) With the implementation of Revision 7 to Article V on July 1, 2004, the Clerk's activities are classified as court- related and non - court- related. The Clerk's general fund activity, which is classified as non - court- related, is funded through service charges for recording instruments and documents into the official records, interest income and through transfers in from the Board. Court- related activities were funded by the fees charged by the Clerk as authorized by Florida Statutes, for maintaining the County and Circuit Court records, and collecting the fines and fees assessed by the courts through June 30, 2009. As of July 1, 2009, the Clerk is funded through an appropriation from the State of Florida and a small child support grant. These court fees and appropriations are to be used exclusively for funding court- related operations of the Clerk. The excess of revenues collected over expenditures is returned to the Florida Clerks of Court Operations Corporation. The modified accrual basis of accounting is used by governmental funds. Under the modified accrual basis of accounting, revenues are recognized when susceptible to accrual (i.e., when they become measurable and available to finance current liabilities of the fiscal year). For this purpose, the Clerk considers revenues to be available if they are collected within 60 days after year -end. Expenditures are recorded when the related fund liability is incurred, except for certain compensated absences, which are recognized as expenditures to the extent they have matured. Charges for services, interest income, and other revenues are recognized as they are earned and become measurable and available to pay liabilities of the current period. Florida Statutes provide that the amount by which revenues and transfers exceed annual expenditures for the general fund be remitted to the Board immediately following the fiscal year for which the funding was provided or following the fiscal year during which other revenues were recognized. The amount of this distribution is recorded as a liability and as other financing use in the accompanying special - purpose financial statements. Section 28.37, Florida Statutes, provides that all court related revenues are considered State revenue effective July 1, 2009, and are to be remitted monthly to the Department of Revenue. Prior to this law change the Clerk remitted to the Department of Revenue the cumulative excess of all fees, service charges, court costs, and fines retained by the Clerk over the amount needed to meet the approved budget amounts established by Section 28.36, Florida Statutes for the period from October 1, 2008 through June 30, 2009. 1112- 1316003 11 Collier County, Florida Clerk of the Circuit Court Notes to Special - Purpose Financial Statements (continued) 1. Summary of Significant Accounting Policies (continued) Capital outlays expended in governmental funds are capitalized in the basic financial statements of Collier County, Florida rather than in the governmental funds of the Clerk. Additionally, the Clerk reports the following fund type: Fiduciary Funds — Agency Funds — These funds are used to account for assets held by the Clerk in a trustee capacity or as an agent for individuals, private organizations, other governments, and other funds. The agency funds are custodial in nature (assets equal liabilities), and do not involve measurement of results of operations or have a measurement focus. Agency funds are accounted for using the full accrual basis of accounting. Cash Equivalents Cash equivalents are defined as highly liquid investments with original maturities of three months or less. The Clerk does not currently hold investments. Compensated Absences Full -time employees of the Clerk are allowed to accumulate an unlimited number of hours of unused sick leave and up to 240 hours of unused vacation leave (with limited exceptions per the employee manual). Upon termination, employees receive 100% of allowable accumulated vacation hours and a percentage of unused sick leave, depending on years of service. Vacation leave and sick leave are included in operating costs of the general fund when the payments are made to employees. The Clerk is not legally required to accumulate financial resources for these unmatured obligations. Accordingly, the liability for compensated absences is not reported in the general fund, but rather is reported in the basic financial statements of Collier County, Florida. Prepaid Expenses The Clerk has elected to follow GASB Codification 1600.127 Other Expenditure Recognition Alternatives and expends maintenance costs as they are incurred and does not allocate the cost between periods. 1112- 1316003 12 Collier County, Florida Clerk of the Circuit Court Notes to Special - Purpose Financial Statements (continued) 1. Summary of Significant Accounting Policies (continued) Use of Estimates The preparation of these special - purpose financial statements requires management of the Clerk to make a number of estimates and assumptions relating to the reported amounts of assets and liabilities and the disclosure of contingent assets and liabilities at the date of the special - purpose financial statements and the reported amounts of revenues and expenditures during that period. Actual results could differ from those estimates. Comparative Data The special - purpose financial statements include certain prior year summarized comparative information in total but not at the level of detail required for a complete presentation in conformity with generally accepted accounting principles. Accordingly, such information should be read in conjunction with the Clerk's special - purpose financial statements for the year ended September 30, 2011, from which the summarized information was derived. New Fund Balance Reporting and Governmental Fund -Type Definitions The Clerk adopted GASB Statement No. 54, Fund Balance Reporting and Governmental Fund Type Definitions (GASB Statement No. 54) effective October 1, 2010. This GASB Statement clarifies governmental fund balance classifications and fund -type definitions. Fund balances are classified either as non - spendable or as spendable. Spendable fund balances are further classified in a hierarchy based on the extent to which there are external and/or internal constraints in how fund balance amounts may be spent. Non - spendable fund balances include amounts that cannot be spent because they are not in spendable form or are legally or contractually required to be maintained intact. There were no non - spendable fund balances at the Clerk as of September 30, 2011. Spendable fund balances are classified based on a hierarchy of the Clerk's ability to control the spending of these fund balances and are reported in the following categories: restricted, committed, assigned and unassigned. The Clerk's fund balances for the Court Services and Public Records Modernization fall into this category. 1112 - 1316003 13 Collier County, Florida Clerk of the Circuit Court Notes to Special - Purpose Financial Statements (continued) 1. Summary of Significant Accounting Policies (continued) The adoption of GASB Statement No. 54 did not have an impact on the Clerk's general fund financial statements at September 30, 2011, since the Clerk does not maintain fund balances in the general fund. Fund balances maintained in the Court Services fund and Public Records Modernization fund are restricted pursuant to certain Florida Statutes and have been presented, as restricted fund balances in the fund financial statements in accordance with GASB Statement No. 54. 2. Budgetary Process Florida Statutes govern the preparation, adoption, and administration of the Clerk's annual budget. The Clerk prepares and approves the budget for the Clerk's non -court functions, including public records modernization fund and the budget related to the recording function based on anticipated fees. The budget of the Clerk for the general fund transfer from the Board is submitted to and approved by the Board. Pursuant to Section 28.36, Florida Statutes, a balanced court- related budget must be prepared on or before October 1 (for the period starting the next July 1 through June 30) and submitted to the Florida Clerks of Court Operations Corporation (the Corporation). If the Clerk estimates that projected revenues are insufficient to meet anticipated expenditures, the Clerk must report the revenue deficit to the Corporation. Once the Corporation verifies the revenue deficit, the Clerk can increase fees up to the maximum amounts specified by law to resolve the deficit. If a revenue deficit is still projected, a request can be submitted to release funds from the Department of Revenue Clerks of the Court Trust Fund. Effective July 1, 2009, all revenues in the court fund are State revenues and remitted monthly to the State of Florida. The court functions are funded through a State appropriation based on the budget submittal to the Corporation. The budget is prepared on a basis consistent with accounting principles generally accepted in the United States, except for the classification and presentation of the distribution of excess court revenue to the State for the Court Services Fund, which is treated as an other financing use (transfer out) for budgetary purposes and as an expenditure in the special - purpose statement of revenues, expenditures, and changes in fund balance in the court services fund. The annual budget serves as the legal authorization for expenditures. Any subsequent amendments to the Clerk's transfer budget funded by the Board must be approved by the Board, amendments to the Clerk's fee budget are at the discretion of the Clerk, and any amendments of the court budget must be approved by the Corporation for the court services fund. Expenditures may not legally 1112- 1316003 14 Collier County, Florida Clerk of the Circuit Court Notes to Special - Purpose Financial Statements (continued) 2. Budgetary Process (continued) exceed appropriations at the fund level. Appropriations lapse at year end. Budgetary control is maintained at the departmental major object expenditure level. Budgetary changes within major object expenditure categories are made at the discretion of the Clerk. The original budget is the first complete appropriated budget. The final budget is the original budget adjusted by all reserves, transfers, allocations, supplemental appropriations, and other legally authorized changes applicable to the fiscal year, whenever legally authorized. 3. Cash and Cash Equivalents At September 30, 2011, the carrying value of the Clerk's cash and cash equivalents was as follows: Carrying T pe Maturity Value Credit Rating Cash on hand Demand deposits Total cash and cash equivalents N/A $ 7,600 N/A N/A 25,006,983 N/A $ 25,014,583 The Clerk maintains a cash pool for the deposits of all governmental and agency funds. Each fund type's portion of these balances is presented as cash and cash equivalents in the accompanying special - purpose financial statements. Interest income is allocated to each fund based on its proportionate balance in the pool. Cash and cash equivalents as of September 30, 2011, are reported as $6,108,624 and $18,905,959 in the governmental funds and fiduciary funds, respectively. Custodial Credit Risk At September 30, 2011, the Clerk's deposits were entirely covered by federal depository insurance or by collateral pledged with the State Treasurer pursuant to Chapter 280, Florida Statutes. Under this Chapter, in the event of default by a participating financial institution (a qualified public depository), all participating institutions are obligated to reimburse the governmental entity for the loss. 1112 - 1316003 15 Collier County, Florida Clerk of the Circuit Court Notes to Special - Purpose Financial Statements (continued) 3. Cash and Cash Equivalents (continued) Credit Risk The Clerk's policy is to follow the guidance in Section 219.075, Florida Statutes, regarding the deposit of funds received and the investment of surplus funds. Sections 219.075 and 218.415, Florida Statutes, authorize the Clerk to invest in Florida Prime (formerly the Local Government Surplus Funds Trust Fund) or any intergovernmental investment pool authorized pursuant to the Florida Inter -local Cooperation Act; Securities and Exchange Commission registered money market funds with the highest credit quality rating from a nationally recognized rating agency; direct obligations of the United States Treasury, federal agencies and instrumentalities, or interest - bearing time deposits or savings accounts in banks organized under the laws of the United States and doing business and situated in the State of Florida, savings and loan associations which are under state supervision, or in federal savings and loan associations located in the State of Florida and organized under federal law and federal supervision, provided that any such deposits are secured by collateral as may be prescribed by law. Additionally, Florida Statutes allow local governments to place public funds with institutions that participate in a collateral pool under the Florida Security for Public Deposits Act. The pool is administered by the State Treasurer, who may make additional assessments to ensure that no public funds will be lost. Interest Rate Risk The Clerk has no specific investment policy regarding interest rate risk and does not currently hold any investments. 4. Interest Income and Investment of County Funds Pursuant to Florida Statutes, Section 28.33, the Clerk invests all County funds in excess of those required to meet expenses. Through June 30, 2009 interest revenue from funds invested was recorded as income of the office of the Clerk and any excess interest earnings were returned to the Board at year -end as described in Note 1. Effective July 1, 2009, Florida Statutes, Section 28.33 was amended and interest income became revenue to the Board. Interest income is allocated to each fund based on its proportionate balance in the pool. Interest income of $21,101 is reported in the general fund for the year ended September 30, 2011, as the portion of interest earned on Clerk funds. 1112 - 1316003 16 Collier County, Florida Clerk of the Circuit Court Notes to Special - Purpose Financial Statements (continued) 5. Capital Assets Capital assets used by the governmental fund type operations are capitalized in the basic financial statements of Collier County, Florida rather than in the governmental funds of the Clerk. Upon acquisition, such assets are recorded as expenditures in the governmental funds of the Clerk and capitalized at cost in the basic financial statements of Collier County, Florida. Capital assets are valued at historical cost, or estimated historical cost if actual historical cost is not available. Donated capital assets are valued at their estimated fair value on the date received. The Cleric maintains custodial responsibility for the capital assets used by the office. No depreciation has been provided on capital assets in the accompanying special - purpose financial statements. However, depreciation expense on these assets is recorded in the basic financial statements of Collier County, Florida. 6. Long -Term Liabilities The following is a summary of changes in general long -term liabilities which are reflected in the basic financial statements of Collier County, Florida: October 1, 2010 Additions Deletions September 30, 2011 Accrued compensated absences $ 1,696,383 $ 766,169 $ 750,589 $ 1,711,963 Of these obligations, approximately $757,544 is expected to be paid during the fiscal year ending September 30, 2012. These long -term liabilities are not reported in the special - purpose financial statements of the Clerk since they have not matured. 7. Employee Retirement Plan Substantially all full -time employees of the Clerk of the Circuit Court filling regularly established positions are eligible to participate in the State of Florida Retirement System (System), a cost- sharing multiple- employer defined benefit plan administered by the State of Florida, Division of Retirement. The System is a defined benefit plan for all state, and participating county, district school board, community college and university employees (Pension Plan). The System also offers eligible employees participation in an alternative defined 1112-1316003 17 Collier County, Florida Clerk of the Circuit Court Notes to Special - Purpose Financial Statements (continued) 7. Employee Retirement Plan (continued) contribution plan (Investment Plan). The Clerk of the Circuit Court participates in the Elected State Officers' Class. The plan is administered by the State of Florida. Contribution rates are established statewide for all participating governmental units. Accordingly, the actuarial information and related disclosures attributable to the Clerk of the Circuit Court's employees are not determinable. Employees enrolled in the plan prior to July 1, 2011, who retire at or after age 62 with 6 years of credited service, or with 30 years of service regardless of age, are entitled to a retirement benefit, payable monthly for life, equal to 1.60% for regular employees, 2% for senior management and 3.00% for county elected officials for each year of credited service times the final average compensation. Employees enrolled on or after July 1, 2011, who retire at or after age 65 with 8 years of credited service or 33 years of service regardless of age, are entitled to the retirement benefits as outlined above. Final average compensation is the employee's average of the five highest fiscal years of salary earned during credited service for those enrolled prior to July 1, 2011, and the eight highest fiscal years of salary for those hired on or after July 1, 2011. Vested employees may retire before age 62 and receive benefits that are reduced 5% for each year prior to normal retirement age. Employees participating in the Investment Plan are vested after one year of service with no age requirement. The System also provides death and disability benefits. Benefits are established by Chapter 121, Florida Statutes, and Chapter 22B, Florida Administrative Code. The Deferred Retirement Option Program (DROP) is a program that provides an alternative method for payment of retirement benefits for a specified and limited period for members of the System, effective July 1, 1998. Under this program, the employee may participate as of their normal retirement date and have their benefits accumulated in the Florida Retirement System Trust Fund, earning interest, while continuing to work for a System employer. Employees enrolled in DROP prior to July 1, 2011, earn interest on accumulated benefits in the Trust Fund at 6.5 %, those enrolling on or after July 1, 2011, earn interest at 1.3 %. The participation in the program does not change conditions of employment. When the DROP period ends, maximum of 60 months, employment must be terminated. At the time of termination of employment, the employee will receive payment of the accumulated DROP benefits, and begin receiving their monthly retirement benefit (in the same amount determined at retirement, plus annual cost -of- living increases). Investment Plan members are not eligible to participate in the DROP program, but Pension Plan members are eligible to roll their DROP lump sum into the Investment Plan as one of the distribution methods under the Pension Plan. 1112- 1316003 18 Collier County, Florida Clerk of the Circuit Court Notes to Special - Purpose Financial Statements (continued) 7. Employee Retirement Plan (continued) The System publishes an annual report that provides ten -year historical trend information about progress made in accumulating sufficient assets to pay benefits when due. This report may be obtained by writing to the Division of Retirement Research Education and Policy Section 1317 Winewood Boulevard, Building 8, Tallahassee, Florida 32399 -1560, or by calling (877) 377 -1737, or accessing their Internet site at www.dms.MyFlorida.com. The Clerk of the Circuit Court is required to contribute an actuarially determined rate. Rates from October 1, 2010 through June 30, 2011, were 18.64% for county elected officials, 14.57% for senior management, 10.77% for regular employees and 12.25% for DROP employees based on covered payroll. The current rates, effective July 1, 2011, are 11.14% for county elected officials, 6.27% for senior management, 4.91 % for regular employees and 4.42% for DROP employees based on covered payroll. In addition, as of July 1, 2011, employee contributions of 3.00% are required of all Pension Plan and Investment Plan members, except for those in DROP. The contribution requirements of the Clerk of the Circuit Court are established and may be amended by the State of Florida. The Clerk of the Circuit Court's employer contributions to the plan for the years ended September 30, 2011, 2010 and 2009, were $928,246, $925,351 and $1,127,280, respectively, equal to the required contributions for each year. 8. Related Party Transactions The Board provided funding for the Clerk in the amount of $5,273,200. The Supervisor of Elections provided funding in the amount of a $37,000 fee for financial services performed by the Clerk. At September 30, 2011, the Clerk had a payable due to the Board of $479,588 comprised as follows: Distribution of excess fees $ 94,614 Amounts due for various services 35,722 Agency funds due 349,252 Total due to Board of County Commissioners $ 479,588 1112 - 1316003 19 Collier County, Florida Clerk of the Circuit Court Notes to Special - Purpose Financial Statements (continued) 8. Related Party Transactions (continued) At September 30, 2011, the Board had a payable due to the Clerk of $9,858 comprised as follows: Amounts due from various services $ 9,858 Total due from Board of County Commissioners $ 9,858 9. Risk Management Collier County, Florida (the County) is exposed to various risks of loss, including, but not limited to general liability, health and life, property and casualty, auto and physical damage, and workers' compensation. The County is substantially self - insured and accounts for and finances its risk of uninsured losses through an internal service fund. All liabilities associated with these self - insured risks are reported in the basic financial statements of the County. During the year ended September 30, 2011, the Clerk was charged $2,449,957 by the County for participation in the risk management program. The County retains the first $500,000 per claim for workers' compensation, and has purchased outside excess coverage for up to the statutory limits for each injury and illness. The County also provides coverage for $200,000 per occurrence for general liability and auto liability coverage and has purchased outside excess coverage for up to $1 million per claim. Negligence claims in excess of the statutory limits set in Section 768.28, Florida Statutes, which provide for limited sovereign immunity of $100,000/$200,000 per occurrence can only be recovered through an act of the State Legislature. Property claims are subject to a 5% wind deductible and a $50,000 deductible for all other perils. The County retains the first $100,000 per claim/$200,000 per occurrence for public official errors and omissions and crime coverage and has purchased outside excess coverage for up to $5 million per claim. There have been no significant reductions in insurance coverage in the last year. Settled claims have not exceeded the insurance provided by third party carriers in any of the last three years. The County is self - insured for health claims covering all of its employees and their eligible dependents. The County retains the first $275,000 per covered member and has purchased outside excess coverage for all claims exceeding this amount. An actuarial valuation is performed each year to estimate the amounts needed to pay prior and future claims and to establish reserves. 1112- 1316003 20 Collier County, Florida Clerk of the Circuit Court Notes to Special - Purpose Financial Statements (continued) 10. Other Postemployment Healthcare Benefits (OPEB) Plan The County follows GASB Statement 45, Accounting and Financial Reporting by Employers for Postemployment Benefits other than Pensions in accounting for its post employment benefits. Plan Description The Clerk of the Circuit Court participates in a group health care plan that covers eligible retirees, and their dependents, of the Board and all Constitutional Officers with the exception of the Sheriff. The Board administers the plan and establishes the benefits. The healthcare plan does not issue a stand -alone financial report, however additional actuarial information regarding the plan as a whole is disclosed in the notes to the financial statements of Collier County, Florida. Under Florida Statutes, retirees originally hired prior to July 1, 2011, are eligible to participate in the active medical plan by paying the active rate if they have attained age 62 and have 6 years of service or have at least 30 years of service. Employees hired on or after July 1, 2011 are eligible to participate in the active medical plan by paying the active rate if they have attained age 65 and have 8 years of service or have at least 33 years of service. Employees eligible for a reduced benefit under the Florida Retirement System prior to age 62 (65 if hired on or after July 1, 2011) are also eligible to participate in the medical plan. The Clerk of the Circuit Court provides no subsidy to the retiree, or their dependents, for group health care. Funding Policy The contribution requirements of the plan members and the employers are established and may be amended by the County. The plans are financed by the participating agencies on a pay as you go basis through the County's self - insurance internal service fund. Participating agencies contribute an additional amount per each active employee to fund retiree health care. The Clerk's agency had an actuarial accrued liability of $17,492 as of September 30, 2011. The annual other postemployment benefit cost is calculated based on the annual required contribution (ARC) of the employer, an amount actuarially determined in accordance with GASB Statement 45. The ARC represents a level of funding that, if paid by on an ongoing basis, is projected to cover normal cost each year and amortize any unfunded actuarial liabilities over a period not to exceed thirty years. An actuarial valuation on the plan as a whole was performed in November 2011. The notes to the financial statements of the County disclose additional information regarding the other post- employment benefit plan as a whole. 1112- 1316003 21 Collier County, Florida Clerk of the Circuit Court Notes to Special - Purpose Financial Statements (continued) 11. Claims and Contingencies Litigation The Clerk of the Circuit Court is routinely involved as defendant, plaintiff and as a "party in interest" in carrying out its statutorily and constitutionally assigned tasks. During the year ended September 30, 2011, the Clerk was involved in approximately 88,067 collection cases. These are court actions designed to collect fees and costs imposed by the courts in criminal cases. The Clerk was involved in approximately 520 bond forfeiture actions. Those cases involve collecting forfeitures of criminal appearance bonds. There are approximately 99 actions for foreclosure of property in which the Clerk has been a named defendant. The Clerk is involved in a class action involving the constitutionality of a Florida statute relating to ownership of interest earned on monies paid into the registry of the court and an inverse condemnation allegation asserting that the Clerk has improperly retained interest accruing on funds in the court's registry. The Clerk filed a Motion to Dismiss, which was denied and which the Clerk has petitioned the Second District Court of Appeals to review. Collier County Litigation For the past several years the Clerk has been involved in certain litigation with Collier County. All litigation with the County was resolved through mutual agreement at the end of fiscal year 2009 with the lone exception of case #2D07 -4549: L.T. #04- 941 -CA reaffirming that the Clerk of Courts is accountant, auditor and custodian of all county funds and is entitled to audit the county for purposes of determining legality of payment. The Board of County Commissioners elected to go forward with this case before the Florida Supreme Court. On September 2, 2010 the case was presented before the Florida Supreme Court. On November 10, 2010 the Florida Supreme Court dismissed the appeal of the Board of County Commissioners of Collier County v. Dwight Brock, and in doing so reaffirmed the right of Clerk of Courts, Dwight Brock to audit all public funds used in county operations. The Florida Supreme Court upheld an earlier decision by The Florida Second District Court of Appeals issued on September 23, 2009. The Clerk will be proceeding to prosecute this lawsuit, for which a Final Judgment to Conform with Appellate Decision has recently been entered. 1112 - 1316003 22 Combining Information 1112- 1316003 Collier County, Florida Clerk of the Circuit Court Combining Balance Sheet — Agency Funds Assets Cash and cash equivalents Total assets Liabilities Due to the Collier County, Florida Board of County Commissioners Due to other governments Deposits Total liabilities September 30, 2011 Jury and Clerk's Court Ordinary Agency Registry Witness Total $ 6,149,855 $ 12,740,261 $ 15,843 $ 18,905,959 $ 6,149,855 $ 12,740,261 $ 15,843 $ 18,905,959 349,252 $ - $ - $ 349,252 1,901,720 - 15,843 1,917,563 3,898,883 12,740,261 - 16,639,144 $ 6,149,855 $ 12,740,261 $ 15,843 $ 18,905,959 1112- 1316003 23 Collier County, Florida Clerk of the Circuit Court Statement of Changes in Assets and Liabilities — Agency Funds Year Ended September 30, 2011 Balance Balance October 1, September 30, 2010 Additions Deletions 2011 Assets Cash and cash equivalents $ 21,474,385 $ 220,536,370 $ 223,104,796 $ 18,905,959 Total assets $ 21,474,385 $ 220,536,370 $ 223,104 796 $ 18,905,959 Liabilities Due to the Collier County, Florida Board of County Commissioners $ 408,708 $ 349,252 $ 408,708 349,252 Due to other governments 1,062,928 10,085,630 9,230,995 1,917,563 Deposits 20,002,749 210,101,488 213,465,093 16,639,144 Total liabilities $ 21,474,385 $ 220,536,370 $ 223,104 796 $ 18,905,959 1112 - 1316003 24 Other Reports 1112 - 1316003 ERNSMYOUNG Suitet&OOYoungLLP -� I 5100 Town Center Circle Boca Raton, Florida 33486 Tel: +1561 955 8000 Fax: +1561 955 8200 www.ey.com Report of Independent Certified Public Accountants on Internal Control Over Financial Reporting and on Compliance and Other Matters Based on an Audit of Special - Purpose Financial Statements Performed in Accordance with Government Auditing Standards Honorable Dwight E. Brock, Clerk of the Circuit Court Collier County, Florida We have audited the special - purpose financial statements of each major fund and the aggregate remaining fund information of the Collier County, Florida Clerk of the Circuit Court (the Clerk of the Circuit Court) as of and for the years ended September 30, 2011, and have issued our report thereon dated December 19, 2011, which describes that such special - purpose financial statements have been prepared for the purpose of complying with Section 218.39, Florida Statutes, and Chapter 10.577(3), Rules of the Auditor General for Local Governmental Entity Audits. We conducted our audit in accordance with auditing standards generally accepted in the United States and the standards applicable to financial audits contained in Government Auditing Standards, issued by the Comptroller General of the United States. Internal Control Over Financial Reporting In planning and performing our audit, we considered the Clerk of the Circuit Court's internal control over financial reporting as a basis for designing our auditing procedures for the purpose of expressing our opinion on the special - purpose financial statements, but not for the purpose of expressing an opinion on the effectiveness of the Clerk of the Circuit Court's internal control over financial reporting. Accordingly, we do not express an opinion on the effectiveness of the Clerk of the Circuit Court's internal control over financial reporting. A deficiency in internal control exists when the design or operation of a control does not allow management or employees, in the normal course of performing their assigned functions, to prevent or detect and correct misstatements on a timely basis. A material weakness is a deficiency, or combination of deficiencies, in internal control, such that there is a reasonable possibility that a material misstatement of the entity's financial statements will not be prevented, or detected and corrected on a timely basis. Our consideration of internal control over financial reporting was for the limited purpose described in the first paragraph of this section and was not designed to identify all deficiencies in internal control that might be deficiencies, significant deficiencies or material weaknesses. We did not identify any deficiencies in internal control over financial reporting that we consider to be material weaknesses, as defined above. 1112 - 1316003 A member firm of Ernst $ Young Global Limited 25 IIIIIUUii " " " "' JEaysTSYOUNG Compliance and Other Matters As part of obtaining reasonable assurance about whether the Clerk of the Circuit Court's special - purpose financial statements are free of material misstatement, we performed tests of its compliance with certain provisions of laws, regulations, contracts, and grant agreements, noncompliance with which could have a direct and material effect on the determination of special - purpose financial statement amounts. However, providing an opinion on compliance with those provisions was not an objective of our audit and, accordingly, we do not express such an opinion. The results of our tests disclosed no instances of noncompliance or other matters that are required to be reported under Government Auditing Standards. This report is intended solely for the information and use of the Clerk of the Circuit Court, management, others within the entity, the Board of County Commissioners of Collier County, Florida and the Auditor General of the State of Florida, and is not intended to be and should not be used by anyone other than these specified parties. -f "I LLP December 19, 2011 1112- 1316003 26 A member firm of Ernst & Young Global Limited Suet & Young LLP f" = ERNST &YOUNG on I I 5100 Town Center Circle Boca Raton, Florida 33486 Tel: +1561 955 8000 Fax: +1561 955 8200 www.ey.com Management Letter Honorable Dwight E. Brock, Clerk of the Circuit Court Collier County, Florida We have audited the special - purpose financial statements of the general fund and the aggregate remaining fund information of the Collier County, Florida Clerk of the Circuit Court (the Clerk of the Circuit Court) as of and for the year ended September 30, 2011, and have issued our report thereon dated December 19, 2011. We conducted our audit in accordance with auditing standards generally accepted in the United States and the standards applicable to financial audits contained in Government Auditing Standards, issued by the Comptroller General of the United States. Additionally, our audit was conducted in accordance with the provisions of Chapter 10.550, Rules of the Auditor General, which govern the conduct of local governmental audits performed in the state of Florida and require that certain items be addressed in this letter. We have also issued our report dated December 19, 2011, on internal control over financial reporting and on compliance and other matters based on an audit of special - purpose financial statements performed in accordance with Government Auditing Standards. Disclosures in that report should be considered in conjunction with this management letter. We have the following suggestions for improvement in accounting procedures and controls. Current Year Findings and Recommendations There were no findings or recommendations as a result of our current year audit. Prior Year Findings and Recommendations There were no findings or recommendations made in the prior year financial audit. Other Required Communications No matters of noncompliance with Section 218.415, Florida Statutes, regarding the investment of public funds were identified within the scope of our audit. The results of our audit disclosed no violations of laws, rules, regulations or contractual provisions or abuse, no improper or illegal expenditures, and no control deficiencies. 1112 - 1316003 A member firm of Ernst & Young Global Limited 27 IF ERNST i &YOUNG The Clerk of the Circuit Court was established by the Constitution of the State of Florida, Article VIII, Section 1(d). Section 10.554(1)(i)8., Rules of the Auditor General, requires a statement as to whether or not the Clerk complied with Section 28.35 and 28.36, Florida Statutes, regarding the budget and performance standards certified by the Florida Clerk of Courts Operations Corporation. The results of our audit did not identify any instances of noncompliance that are required to be reported. This management letter is intended solely for the information and use of the Clerk of the Circuit Court, management, the Board of County Commissioners of Collier County, Florida, and the Auditor General of the State of Florida, and is not intended to be and should not be used by anyone other than these specified parties. 16� f "7 kk 1' December 19, 2011 1112- 1316003 28 Ernst & WWig LIP Assurance I Tax I Transactions I Advisory About Ernst & Young h Ym! lq ii x. �ji : r I '-IJ SPECIAL- PURPOSE FINANCIAL STATEMENTS Collier County, Florida Property Appraiser Year Ended September 30, 2011 With Report of Independent Certified Public Accountants Ernst & Young LLP °1 ERNST & YOUNG Collier County, Florida Property Appraiser Special - Purpose Financial Statements Year Ended September 30, 2011 Contents Report of Independent Certified Public Accountants ........................................ ..............................1 Special - Purpose Financial Statements Special - Purpose Balance Sheet - General Fund ................................................ ..............................3 Special - Purpose Statement of Revenues, Expenditures, and Changes in Fund Balance -- GeneralFund ................................................................................................... ..............................4 Special - Purpose Statement of Revenues, Expenditures, and Changes in Fund Balance - Budget and Actual - (Budgetary Basis) - General Fund ................................ ..............................5 Notes to Special - Purpose Financial Statements ................................................. ..............................6 Report of Independent Certified Public Accountants on Internal Control Over Financial Reporting and on Compliance and Other Matters Based on an Audit of Special - Purpose Financial Statements Performed in Accordance with Government AuditingStandards ........................................................................................ .............................16 ManagementLetter ........................................................................................... .............................19 1112- 1315720 = Ernst &Young LLP Suite 500 � ERNST & YOUNG 5100 Town (enter Circle Boca Raton, rlorida 33486 Tel: +1 561 955 8000 Fax: +1 561 955 8200 www.ey.com Report of Independent Certified Public Accountants Honorable Abe Skinner, Property Appraiser Collier County, Florida We have audited the accompanying special - purpose financial statements of the general fund of the Collier County, Florida Property Appraiser (the Property Appraiser), as of and for the year ended September 30, 2011. These special - purpose financial statements are the responsibility of the Property Appraiser's management. Our responsibility is to express an opinion on these special - purpose financial statements based on our audit. We conducted our audit in accordance with auditing standards generally accepted in the United States and the standards applicable to financial audits contained in Government Auditing Standards, issued by the Comptroller General of the United States. Those standards require that we plan and perform the audit to obtain reasonable assurance about whether the special - purpose financial statements are free of material misstatement. We were not engaged to perform an audit of the Property Appraiser's internal control over financial reporting. Our audit included consideration of internal control over financial reporting as a basis for designing audit procedures that are appropriate in the circumstances, but not for the purpose of expressing an opinion on the effectiveness of the Property Appraiser's internal control over financial reporting. Accordingly, we express no such opinion. An audit also includes examining, on a test basis, evidence supporting the amounts and disclosures in the special - purpose financial statements, assessing the accounting principles used and significant estimates made by management, as well as evaluating the overall special - purpose financial statement presentation. We believe that our audit provides a reasonable basis for our opinion. As discussed in Note 1, the accompanying special - purpose financial statements referred to above were prepared for the purpose of complying with Section 218.39, Florida Statutes, Chapter 10.557(3), Rules of the Auditor General for Local Governmental Entity Audits. These special - purpose financial statements are not intended to be a complete presentation of the Property Appraiser's financial position and its changes in financial position, where applicable, thereof, for the year then ended in conformity with accounting principles generally accepted in the United States. Additionally, the special - purpose statements present only the Property Appraiser and do not purport to, and do not, present fairly the financial position of Collier County, Florida, as of September 30, 2011, and the changes in its financial position, where applicable, for the year then ended, in conformity with accounting principles generally accepted in the United States. 1112- 1315720 A member firm of Ernst 8 Young Global Limited I I I I I I I I i i i�� " "' •" J Ex N5T s YouN c In our opinion, the special - purpose financial statements referred to above present fairly, in all material respects, the financial position of the general fund of the Property Appraiser as of September 30, 2011, and the changes in financial position thereof and the budgetary comparison for the general fund for the year then ended in conformity with accounting principles generally accepted in the United States. In accordance with Government Auditing Standards, we have also issued our report dated December 19, 2011 on our consideration of the Property Appraiser's internal control over financial reporting and on our tests of its compliance with certain provisions of laws, regulations, contracts, and grant agreements and other matters. The purpose of that report is to describe the scope of our testing of internal control over financial reporting and compliance and the results of that testing, and not to provide an opinion on the internal control over financial reporting or on compliance. That report is an integral part of an audit performed in accordance with Government Auditing Standards and should be considered in assessing the results of our audit. This report is intended solely for the information and use of the Property Appraiser, management, the Board of County Commissioners of Collier County, Florida, and the Auditor General of the State of Florida, and is not intended to be and should not be used by anyone other than these specified parties. i�lntio f LLi' December 19, 2011 1112- 1315720 2 A member firm of Ernst 8 Young Global Limited Collier County, Florida Property Appraiser Special - Purpose Balance Sheet — General Fund September 30, 2011 Assets Cash and cash equivalents $ 1,088,618 Total assets $ 1,088,618 Liabilities and fund balance Liabilities: Accrued liabilities $ 106,188 Due to Collier County, Florida Board of County Commissioners 872,555 Due to other taxing districts 109,875 Total liabilities 1,088,618 Fund balance _ Total liabilities and fund balance $ 1,088,618 See accompanying notes. 1112- 1315720 3 Collier County, Florida Property Appraiser Special - Purpose Statement of Revenues, Expenditures, and Changes in Fund Balance — General Fund Year Ended September 30, 2011 Revenues: Commissions and fees $ 6,564,314 Miscellaneous 830,936 Total revenues 7,395,250 Expenditures: General government: Personal services 4,873,749 Operating 1,405,900 Capital outlay 133,171 Distribution of excess fees to other taxing districts 109,875 Total expenditures 6,522,695 Excess of revenues over expenditures 872,555 Other financing uses: Distribution of excess fees to Collier County, Florida Board of County Commissioners 872,555 Total other financing uses 872,555 Excess of revenues over expenditures and other financing uses — Fund balance, beginning of year _ Fund balance, end of year $ _ See accompanying notes. 11 12-1315720 4 Collier County, Florida Property Appraiser Special - Purpose Statement of Revenues, Expenditures, and Changes in Fund Balance — Budget and Actual — (Budgetary Basis) — General Fund Year Ended September 30, 2011 Revenues: Commissions and fees Miscellaneous Total revenues Expenditures: General government: Personal services Operating Capital outlay Total expenditures Excess of revenues over expenditures Other financing uses: Distribution of excess fees to Collier County, Florida Board of County Commissioners Distribution of excess fees to other taxing districts Total other financing uses Excess of revenues over expenditures and other financing uses Fund balance, beginning of year Fund balance, end of year See accompanying notes. Variance With Final Budget Budget Positive Original Final Actual (Negative) S 6,564,314 S 6,564,314 S 6,564,314 S - - — 830,936 830,936 6,564,314 6,564,314 7,395,250 830,936 5,175,379 4,975,425 4,873,749 101,676 1,338,935 1,455,718 1,405,900 49,818 50,000 133,171 133,171 — 6,564,314 6,564,314 6,412,820 151,494 — — 982,430 982,430 872,555 (872,555) 109,875 (109,875) 982,430 (982,430) 1112- 1315720 5 Collier County, Florida Property Appraiser Notes to Special - Purpose Financial Statements September 30, 2011 1. Summary of Significant Accounting Policies Reporting Entity The Collier County, Florida Property Appraiser (the Property Appraiser) is an elected constitutional officer as provided for by the Constitution of the State of Florida. Pursuant to Chapter 129, Florida Statutes, the Property Appraiser's budget is submitted to the Florida Department of Revenue for approval, and a copy is forwarded to the Collier County, Florida Board of County Commissioners (Board). The special - purpose financial statements presented include the general fund of the Property Appraiser's office. The accompanying special - purpose financial statements were prepared for the purpose of complying with Section 218.39, Florida Statutes, and Section 10.557(3), Rules of the Auditor General for Local Governmental Entity Audits. Section 10.556(4), Rules of the Auditor General for Local Governmental Entity Audits, requires the Collier County, Florida Property Appraiser financial statements to only present fund financial statements. Accordingly, due to the omission of government -wide financial statements and related disclosures, including a management's discussion and analysis, these special - purpose financial statements do not constitute a complete presentation of the financial position of the Collier County, Florida Property Appraiser as of September 30, 2011, and the changes in its financial position for the year then ended, in conformity with Governmental Accounting Standards Board (GASB) Statement No. 34, Basic Financial Statements — and Management's Discussion and Analysis —for State and Local Governments, but otherwise constitute financial statements prepared in conformity with U.S. generally accepted accounting principles. The financial activities of the Property Appraiser, as a constitutional officer, are included in the Collier County, Florida Comprehensive Annual Financial Report. Measurement Focus, Basis of Accounting, and Basis of Presentation These special - purpose fund financial statements report detailed information about the Property Appraiser. The focus of governmental fund financial statements is on major funds rather than reporting funds by type. Each major fund is reported in a separate column. 1112 - 1315720 6 Collier County, Florida Property Appraiser Notes to Special - Purpose Financial Statements (continued) 1. Summary of Significant Accounting Policies (continued) Governmental Funds Governmental funds are accounted for using the flow of current financial resources measurement focus. Only current assets and current liabilities, generally, are included on the special - purpose balance sheet. Operating statements of these funds present increases (i.e., revenues and other financing sources) and decreases (i.e., expenditures and other financing uses) in net current assets. The Property Appraiser's only governmental fund is the general fund. The general fund is used to account for the general operations of the Property Appraiser. The modified accrual basis of accounting is used by governmental funds. Under the modified accrual basis of accounting, revenues are recognized when susceptible to accrual (i.e., when they become measurable and available to finance current liabilities of the fiscal year). For this purpose, the Property Appraiser considers revenues to be available if they are collected within 60 days after year end. Expenditures are recorded when the related fund liability is incurred, except for compensated absences, which are recognized as expenditures to the extent they have matured. Substantially all of the Property Appraiser's revenue is received from taxing authorities. These moneys are virtually unrestricted and are revocable only for failure to comply with prescribed compliance requirements. These resources are reflected as revenue at the time of receipt; earlier if the "susceptible to accrual" criteria are met. Miscellaneous revenue is recognized as it is earned and becomes measurable and available to pay liabilities of the current period. Florida Statutes provide that the amount by which revenues exceed annual expenditures be remitted to each governmental agency or the Board immediately following the fiscal year for which the funding was provided or following the fiscal year during which other revenue was recognized. Capital outlays expended in the general fund operations are capitalized in the basic financial statements of Collier County, Florida rather than in the governmental funds of the Property Appraiser. 1112- 1315720 7 Collier County, Florida Property Appraiser Notes to Special- Purpose Financial Statements (continued) 1. Summary of Significant Accounting Policies (continued) Refund of "Excess Fees" Florida Statutes further provide that the excess of revenues over expenditures held by the Property Appraiser be distributed to each governmental agency or the Board in the same proportion as the fees paid by each governmental agency bear to total fee revenues. The amount of this distribution is recorded as a liability and as either an expenditure or other financing use - transfer out, respectively, in the accompanying special - purpose financial statements. Cash Equivalents Cash equivalents are defined as highly liquid investments with original maturities of three months or less. Compensated Absences All full -time employees of the Property Appraiser are allowed to accumulate an unlimited number of hours of unused sick time and up to 200 hours of unused vacation leave. Upon termination, employees receive 100% of allowable accumulated vacation hours and a percentage of unused sick leave, depending on years of service, not to exceed 1,040 hours. Vacation time and sick leave are included in the operating costs of the general fund when the payments are made to employees. The Property Appraiser does not, nor is legally required to accumulate financial resources for these unmatured obligations. Accordingly, the liability for compensated absences is not reported in the general fund, but rather is reported in the basic financial statements of Collier County, Florida. Prepaid Expenses The Property Appraiser has elected to follow GASB Codification 1600.127 Other Expenditure Recognition Alternatives and expends maintenance costs as they are incurred and does not allocate the cost between periods. 1112 - 1315720 Collier County, Florida Property Appraiser Notes to Special - Purpose Financial Statements (continued) 1. Summary of Significant Accounting Policies (continued) Use of Estimates The preparation of the special - purpose financial statements requires management of the Property Appraiser to make a number of estimates and assumptions relating to the reported amounts of assets and liabilities and the disclosure of contingent assets and liabilities at the date of the financial statements and the reported amounts of revenues and expenditures during the period. Actual results could differ from those estimates. New Fund Balance Reporting and Governmental Fund -Type Definitions The Property Appraiser adopted GASB Statement No. 54, Fund Balance Reporting and Governmental Fund -Type Definitions (GASB Statement No. 54), effective October 1, 2010. This GASB statement clarifies governmental fund balance classification and fund -type definitions. Fund balances are reported in classifications based on whether the amounts are spendable or non - spendable. Spendable amounts are further classified as restricted, committed, assigned or unassigned based on the extent to which there are external and /or internal constraints in how fund balance amounts may be spent. The adoption of GASB Statement No. 54 did not have an impact on the Property Appraiser's financial statements at September 30, 2011 since the Property Appraiser does not maintain fund balances. 2. Budgetary Process Florida Statutes govern the preparation, adoption, and administration of the Property Appraiser's annual budget. The Property Appraiser prepares a budget for the general fund and submits it to the Florida Department of Revenue for approval. A copy of the approved budget is provided to the Board. Any subsequent amendments to the Property Appraiser's total budget must be approved by the Florida Department of Revenue. The annual budget serves as the legal authorization for expenditures. Expenditures may not legally exceed appropriations at the fund level. Appropriations lapse at year end. Budget control is maintained at the departmental major object expenditure level. Budgetary changes within major object expenditure categories are made at the discretion of the Property Appraiser. The original budget is the first complete appropriated budget. The final budget is the original budget adjusted by all reserves, transfers, allocations, supplemental appropriations, and other legally authorized changes applicable to the fiscal year, whenever legally authorized. 1112 - 1315720 9 Collier County, Florida Property Appraiser Notes to Special - Purpose Financial Statements (continued) 2. Budgetary Process (continued) The Property Appraiser's budget is prepared under a budgetary basis of accounting that differs from generally accepted accounting principles (GAAP). Certain revenues received from non ad valorem commissions and other sources and expenditures paid for from these revenues are not recognized under the budgetary basis of accounting; however, the revenues and expenditures have been recognized under GAAP. Additionally, there is a difference between the budgetary basis of accounting and GAAP in the treatment of excess fee distributions to entities outside of the County's reporting entity. On a budgetary basis, distributions of excess fees are reported as other financing uses. On a GAAP basis, these distributions are reported as expenditures because there is a reduction in financial resources of the County. The actual results of operations in the statement of revenues, expenditures, and changes in fund balance — budget to actual -- general fund are presented on a budgetary basis. Adjustments to convert the results of operations for the year ended September 30, 2011, from the budgetary basis of accounting to the GAAP basis of accounting are as follows: Miscellaneous Revenues Budgetary basis $ _ Revenues and expenditures not budgeted 830,936 GAAP basis $ 830,936 3. Cash and Cash Equivalents At September 30, 2011, the carrying value of the Property Appraiser's cash and cash equivalents was as follows: Carrying Type Value Cash on hand $ 125 Deposit accounts 1,881,285 Total cash and cash equivalents $ 1,088,618 1112- 1315720 10 Collier County, Florida Property Appraiser Notes to Special - Purpose Financial Statements (continued) 3. Cash and Cash Equivalents (continued) Custodial Credit Risk At September 30, 2011, the Property Appraiser's deposits were entirely covered by federal depository insurance or by collateral pledged with the state treasurer pursuant to Chapter 280, Florida Statutes. Under this chapter, in the event of default by a participating financial institution (a qualified public depository), all participating institutions are obligated to reimburse the governmental entity for the loss. Interest Rate Risk The Property Appraiser has no specific investment policy regarding interest rate risk. Credit Risk The Property Appraiser's policy is to follow the guidance in Section 219.075, Florida Statutes, regarding the deposit of funds received and the investment of surplus funds. Sections 219.075 and 218.415, Florida Statutes, authorize the Property Appraiser to invest in Florida PRIME (formerly the Local Government Surplus Funds Trust Fund) or any intergovernmental investment pool authorized pursuant to the Florida Interlocal Cooperation Act; Securities and Exchange Commission registered money market funds with the highest credit quality rating from a nationally recognized rating agency; direct obligations of the United States Treasury; federal agencies and instrumentalities, or interest - bearing time deposits or savings accounts in banks organized under the laws of the United States and doing business and situated in the State of Florida, savings and loan associations which are under state supervision, or in federal savings and loan associations located in the State of Florida and organized under federal law and federal supervision, provided that any such deposits are secured by collateral as may be prescribed by law. 4. Capital Assets Capital assets used by the Property Appraiser are reported in the basic financial statements of Collier County, Florida rather than in the general fund of the Property Appraiser. Upon acquisition, such assets are recorded as expenditures in the general fund of the Property Appraiser, and are capitalized at cost in the basic financial statements of Collier County, Florida. Capital assets are valued at historical cost or estimated historical cost if actual historical cost is not 1112 - 1315720 11 Collier County, Florida Property Appraiser Notes to Special - Purpose Financial Statements (continued) 4. Capital Assets (continued) available. Donated capital assets are valued at their estimated fair value on the date received. The Property Appraiser maintains custodial responsibility for the capital assets used by the office. No depreciation expense has been provided on capital assets in these special - purpose financial statements. However, depreciation expense is recorded in the basic financial statements of Collier County, Florida. 5. Long -Term Liabilities The following is a summary of changes in general long -term liabilities which are reported in the basic financial statements of Collier County, Florida: October 1, September 30, 2010 Increase Decrease 2011 Accrued compensated absences $ 369,272 $ 302,716 $ 362,902 $ 309,086 Of these liabilities, approximately $350,000 is expected to be paid during the fiscal year ending September 30, 2011. These long -term liabilities are not reported in the special - purpose financial statements of the Property Appraiser since they have not matured. 6. Employee Retirement Plan Substantially all full -time employees of the Property Appraiser filling regularly established positions are eligible to participate in the State of Florida Retirement System (System), a cost - sharing multiple- employer public retirement system administered by the State of Florida, Division of Retirement. The System is a defined benefit plan for all state, and participating county, district school board, community college, and university employees (Pension Plan). The System also offers eligible employees participation in an alternative defined contribution plan (Investment Plan). The Property Appraiser participates in the Elected State Officers' Class. The plan is administered by the State of Florida. Contribution rates are established statewide for all participating governmental units. Accordingly, the actuarial information and related disclosures attributable to the Property Appraisers' employees are not determinable. 1112- 1315720 12 Collier County, Florida Property Appraiser Notes to Special - Purpose Financial Statements (continued) 6. Employee Retirement Plan (continued) Employees enrolled in the plan prior to July 1, 2011 who retire at or after age 62 with 6 years of credited service, or with 30 years of service regardless of age, are entitled to a retirement benefit, payable monthly for life, equal to 1.60% for regular employees, 2.00% for senior management and 3.00% for county elected officials for each year of credited service times the final average compensation. Employees enrolled on or after July 1, 2011 who retire at or after age 65 with 8 years of credited service or 33 years of service regardless of age, are entitled to the retirement benefits as outlined above. Final average compensation is the employee's average of the five highest fiscal years of salary earned during credited service for those enrolled prior to July 1, 2011 and the eight highest fiscal years of salary for those hired on or after July 1, 2011. Vested employees may retire before age 62 and receive benefits that are reduced 5.00% for each year prior to normal retirement age (65 years of age if hired on or after July 1, 2011). Employees participating in the Investment Plan are vested after one year of service with no age requirement. The System also provides death and disability benefits. Benefits are established by Chapter 121, Florida Statutes, and Chapter 22B, Florida Adn2inistrative Code. The Deferred Retirement Option Program (DROP) is a program that provides an alternative method for payment of retirement benefits for a specified and limited period for members of the System, effective July 1, 1998. Under this program, the employee may participate as of their normal retirement date and have their benefits accumulate in the Florida Retirement System Trust Fund, earning interest, while continuing to work for a System employer. Employees enrolled in DROP prior to July 1, 2011 earn interest on accumulated benefits in the Trust Fund at 6.50 %, those enrolling on or after July 1, 2011 earn interest at 1.30 %. The participation in the program does not change conditions of employment. When the DROP period ends, maximum of 60 months, employment must be terminated. At the time of termination of employment, the employee will receive payment of the accumulated DROP benefits, and begin receiving their monthly retirement benefit (in the same amount determined at retirement, plus annual cost -of- living increases). Investment Plan members are not eligible to participate in the DROP program, but Pension Plan members are eligible to roll their DROP lump sum into the Investment Plan as one of the distribution methods under the Pension Plan. The System publishes an annual report that provides ten -year historical trend information about progress made in accumulating sufficient assets to pay benefits when due. This report may be obtained by writing to the Division of Retirement Research Education and Policy Section 1317 Winewood Boulevard, Building 8, Tallahassee, Florida 32399 -1560, or by calling (877) 377 -1737, or accessing their Internet site at www.dms.MyFlorida.com. 1112 - 1315720 13 Collier County, Florida Property Appraiser Notes to Special - Purpose Financial Statements (continued) 6. Employee Retirement Plan (continued) The Property Appraiser is required to contribute an actuarially determined rate. Rates from October 1, 2010 through June 30, 2011 were 18.64% for county elected officials, 14.57% for senior management, 10.77% for regular employees and 12.25% for DROP employees based on covered payroll. The current rates, effective July 1, 2011, are 11.14% for county elected officials, 6.27% for senior management, 4.91% for regular employees and 4.42% for DROP employees based on covered payroll. In addition, as of July 1, 2011, employee contributions of 3.00% are required of all Pension Plan and Investment Plan members, except for those in DROP. The contribution requirements of the Property Appraiser and may be amended by the State of Florida. The Property Appraiser's employer contributions to the plan for the years ended September 30, 2011, 2010 and 2009, were $348,722, $375,663 and $377,053, respectively, equal to the required contributions for each year. 7. Other Postemployment Healthcare Benefits (OPEB) Plan The County reports its obligations for OPEB pursuant to GASB Statement No. 45, Accounting and Financial Reporting by Employers for Postemployment Benefits Other Than Pensions. Plan Description. The Property Appraiser participates in a group health care plan that covers eligible retirees, and their dependents, of the Board and all Constitutional Officers with the exception of the Sheriff. The Board administers the plan and establishes the benefits. The healthcare plan does not issue a stand -alone financial report, however additional actuarial information regarding the plan as a whole is disclosed in the notes to the financial statements of Collier County. Under Florida Statutes, retirees originally hired prior to July 1, 2011 are eligible to participate in the active medical plan by paying the active rate if they have attained age 62 and have 6 years of service or have at least 30 years of service. Employees hired on or after July 1, 2011 are eligible to participate in the active medical plan by paying the active rate if they have attained age 65 and have 8 years of service or have at least 33 years of service. Employees eligible for a reduced benefit under the Florida Retirement System prior to age 62 (65 years of age if hired on or after July 1, 2011) are also eligible to participate in the medical plan. The Property Appraiser provides no subsidy to the retiree, or their dependents, for group health care. 1112- 1315720 14 Collier County, Florida Property Appraiser Notes to Special - Purpose Financial Statements (continued) 7. Other Postemployment Healthcare Benefits (OPEB) Plan Funding Policy. The contribution requirements of the plan members and the employers are established and may be amended by the County. The plans are financed by the participating agencies on a pay as you go basis through the County's self insurance internal service fund. Participating agencies contribute an additional amount per each active employee to fund retiree health care. The Appraiser's agency had an actuarial accrued liability of $10,463 as of September 30, 2011. The annual other postemployment benefit cost is calculated based on the annual required contribution of the employer (ARC), an amount actuarially determined in accordance with GASB Statement 45. The ARC represents a level of funding that, if paid by on an ongoing basis, is projected to cover normal cost each year and amortize any unfunded actuarial liabilities over a period not to exceed thirty years. An actuarial valuation on the plan as a whole was performed in November 2011. The notes to the financial statements of the County disclose additional information regarding the other post employment benefit plan as a whole. 8. Related -Party Transactions For the year ended September 30, 2011, the Board paid fees to the Property Appraiser that amounted to $5,830,163. At September 30, 2011, the Property Appraiser had a payable due to the Board of County Commissioners of $872,555, representing the distribution of excess fees. 9. Risk Management Collier County, Florida (the County) is exposed to various risks of loss including, but not limited to general liability, health and life, property and casualty, auto and physical damage, and workers' compensation. The County is substantially self - insured and accounts for and finances its risk of uninsured losses through an internal service fund. All liabilities associated with these self - insured risks are reported in the basic financial statements of the County. During the year ended September 30, 2011, the Property Appraiser was charged $869,160 by the County for participation in the risk management program. The County provides coverage for up to $500,000 per claim for workers' compensation, and has purchased outside excess coverage for up to the statutory limit for each injury or illness. The County also provides coverage for up to $100,000 per person/$200,000 per occurrence for auto and other liability claims, and has purchased outside excess coverage for up to $1,000,000 per 1112 - 1315720 15 Collier County, Florida Property Appraiser Notes to Special - Purpose Financial Statements (continued) 9. Risk Management (continued) claim. Negligence claims in excess of the statutory limits set in Section 768.20, Florida Statutes, which provide for limited sovereign immunity of $100,000 per person/$200,000 per occurrence can only be recovered through an act of the State Legislature. The County also provides coverage for up to $100,000 per person/$200,000 per occurrence for public official's errors and omissions claims and has purchased outside excess coverage for up to $5,000,000 per claim. There have been no significant reductions in insurance coverage in the last year. Settled claims have not exceeded the insurance provided by third party carriers in any of the last three years. The County is also self - insured for health claims covering all of its employees and their eligible dependents. The County retains the first $275,000 in losses per calendar year per covered member and purchases excess coverage with no lifetime limit. As required by Section 112.081, Florida Statutes, retirees and their eligible dependents are provided the same health care coverage as is offered to active employees at the same premium cost (borne by the retiree) applicable to active employees. An actuarial valuation is performed each year to estimate the amounts needed to pay prior and future claims and to establish reserves. 10. Litigation The Property Appraiser is involved as defendant or plaintiff in certain litigation and claims arising from the ordinary course of operations. In the opinion of the Property Appraiser and legal counsel, the range of potential recoveries or liabilities will not materially affect the financial position of the Property Appraiser. 1112- 1315720 16 II IIIIIIIII�IIIIIIIIII�������� WERNST &YOUNG Ernst & Young LLP Suite 500 5100 Town Center Circle Boca Raton, Florida 33486 Tel: +1 561 955 8000 Fax. +1 561 955 8200 www.ey.com Report of Independent Certified Public Accountants on Internal Control Over Financial Reporting and on Compliance and Other Matters Based on an Audit of Special - Purpose Financial Statements Performed in Accordance with Government Auditing Standards Honorable Abe Skinner, Property Appraiser Collier County, Florida We have audited the special- purpose financial statements of the general fund of the Collier County, Florida Property Appraiser (the Property Appraiser) as of and for the year ended September 30, 2011, and have issued our report thereon dated December 19, 2011, which describes that such special - purpose financial statements have been prepared for the purpose of complying with Section 218.39, Florida Statutes, and Chapter 10.577(3), Rules of the Auditor General for Local Governmental Entity Audits. We conducted our audit in accordance with auditing standards generally accepted in the United States and the standards applicable to financial audits contained in Government Auditing Standards, issued by the Comptroller General of the United States. Internal Control Over Financial Reporting In planning and performing our audit, we considered the Property Appraiser's internal control over financial reporting as a basis for designing our auditing procedures for the purpose of expressing our opinion on the special - purpose financial statements, but not for the purpose of expressing an opinion on the effectiveness of the Property Appraiser's internal control over financial reporting. Accordingly, we do not express an opinion on the effectiveness of the Property Appraiser's internal control over financial reporting. A deficiency in internal control exists when the design or operation of a control does not allow management or employees, in the normal course of performing their assigned functions, to prevent or detect and correct misstatements on a timely basis. A material weakness is a deficiency, or combination of deficiencies, in internal control such that there is a reasonable possibility that a material misstatement of the entity's financial statements will not be prevented, or detected and corrected on a timely basis. Our consideration of internal control over financial reporting was for the limited purpose described in the first paragraph of this section and was not designed to identify all deficiencies in internal control that might be deficiencies, significant deficiencies or material weaknesses. We did not identify any deficiencies in internal control over financial reporting that we consider to be material weaknesses, as defined above. 1112 - 1315720 17 A member firm of Ernst & Young Global Limited =J ERNST & YOUNG Compliance and Other Matters As part of obtaining reasonable assurance about whether the Property Appraiser's special - purpose financial statements are free of material misstatement, we performed tests of its compliance with certain provisions of laws, regulations, contracts, and grant agreements, noncompliance with which could have a direct and material effect on the determination of special - purpose financial statement amounts. However, providing an opinion on compliance with those provisions was not an objective of our audit and, accordingly, we do not express such an opinion. The results of our tests disclosed no instances of noncompliance or other matters that are required to be reported under Government Auditing Standards. This report is intended solely for the information and use of the Property Appraiser, management, the Board of County Commissioners of Collier County, Florida and the Auditor General of the State of Florida, and is not intended to be and should not be used by anyone other than these specified parties. December 19, 2011 1112 - 1315720 19� -f �7 UP A member firm of Ernst 8 Young Global limited 18 1111111111111 -H ERNST &YOUNG Ernst 5100 Town Center Circle Boca Raton, Florida 33486 Tel: +1 561 955 8000 Fax: +1 561 955 8200 www.ey.com Management Letter Honorable Abe Skinner, Property Appraiser Collier County, Florida We have audited the special - purpose financial statements of the general fund of the Collier County, Florida Property Appraiser (the Property Appraiser) as of and for the year ended September 30, 2011, and have issued our report thereon dated December 19, 2011. We conducted our audit in accordance with auditing standards generally accepted in the United States and the standards applicable to financial audits contained in Government Auditing Standards, issued by the Comptroller General of the United States. Additionally, our audit was conducted in accordance with the provisions of Chapter 10.550, Rules of the Auditor General, which govern the conduct of local governmental audits performed in the State of Florida and require that certain items be addressed in this letter. We have also issued our report dated December 19, 2011 on internal control over financial reporting and on compliance and other matters based on an audit of special - purpose financial statements performed in accordance with Government Auditing Standards. Disclosures in that report should be considered in conjunction with this management letter. Current Year Findings and Recommendations There were no findings or recommendations as a result of our current year audit. Prior Year Findings and Recommendations 2010 -01 Calculation of Compensated Absences Observation The Property Appraiser is responsible for calculating the accrual for compensated absences annually. This amount is currently only a financial statement disclosure within the Property Appraiser's financial statement. However, this amount is provided to the Board of Collier County to be recorded and disclosed within the government wide financials. We note that the accrual provided by management was incorrect due to the omission of an accrual for compensated absences earned for the last seven days of fiscal 2010, which were not reflected in the off -time report used to calculate the accrued compensated absences balance, as the off time report was for the pay period ending September 21, 2010. We note that the disclosure was adjusted to reflect the additional accrual. 1112- 1315720 19 A member firm of Ernst & Young Global Limited JEuNSrxYouNc Status For the year ended September 30, 2011, the Property Appraiser has included an additional accrual for the last eight days of fiscal 2011, as suggested. This calculation has been included in the spreadsheet for future years, in order to ensure that it is included annually. Other Required Communications No matters of noncompliance with Section 218.415, Florida Statutes, regarding the investment of public funds were identified within the scope of our audit. The results of our audit disclosed no violations of laws, rules, regulations or contractual provisions or abuse, no improper or illegal expenditures, and no control deficiencies other than the internal control recommendations included above. The Property Appraiser was established by the Constitution of the State of Florida, Article VIII, Section 1(d). This management letter is intended solely for the information and use of the Property Appraiser, management, the Board of County Commissioners of Collier County, Florida, and the Auditor General of the State of Florida, and is not intended to be and should not be used by anyone other than these specified parties. . f UP December 19, 2011 1112 - 1315720 20 A member firm of Ernst 8 Young Global Limited Ernst Ist & Yot 11 Iq 1-1,1-1 Assurance I Tax I Transactions I Advisory About Ernst & Young h,dfw;q 011; fA;; Y, & Y, j i � r )l 1 i IV L SPECIAL- PURPOSE FINANCIAL STATEMENTS Collier County, Florida Sheriff Year Ended September 30, 2011 With Reports of Independent Certified Public Accountants Ernst & Young LLP °1 ERNST & YOUNG Collier County, Florida Sheriff Special - Purpose Financial Statements Year Ended September 30, 2011 Contents Report of Independent Certified Public Accountants ........................................ ..............................1 Special - Purpose Financial Statements Special - Purpose Balance Sheet — Governmental Funds .................................... ..............................3 Special - Purpose Statement of Revenues, Expenditures, and Changes in Fund Balances — Governmental Funds .................................................................... ..............................4 Special- Purpose Statement of Revenues, Expenditures, and Changes in Fund Balance — Budget and Actual — General Fund ................................................ ..............................5 Special - Purpose Statement of Net Assets — Internal Service Fund ................... ..............................6 Special - Purpose Statement of Revenues, Expenses, and Changes in Net Assets — InternalService Fund ...................................................................................... ..............................7 Special - Purpose Statement of Cash Flows — Internal Service Fund .................. ..............................8 Special - Purpose Balance Sheet — Agency Funds ............................................... ..............................9 Notes to Special - Purpose Financial Statements ................................................ .............................10 Required Supplementary Information Schedule of Funding Progress for the Retiree Health Plan ............................... .............................29 Combining Financial Information Special - Purpose Combining Balance Sheet — Agency Funds ........................... .............................30 Special - Purpose Statement of Changes in Assets and Liabilities — Agency Funds .......................31 Other Reports Report of Independent Certified Public Accountants on Internal Control Over Financial Reporting and on Compliance and Other Matters Based on an Audit of Special - Purpose Financial Statements Performed in Accordance With Government Auditing Standards ...........32 Report on Agreed -Upon Procedures Applied to Investigative Funds .............. .............................34 ManagementLetter ........................................................................................... .............................36 1112 - 1314152 :� ERNST & YOUNG Suite OOounq LLP 5100 Town Center Circle II I ( Boca Raton, Florida 33486 Tel: +1 561 955 8000 Fax: +1 561 955 8200 www.ey.com Report of Independent Certified Public Accountants Honorable Kevin Rambosk, Sheriff Collier County, Florida We have audited the accompanying special - purpose financial statements of each major fund and the aggregate remaining fund information of the Collier County, Florida, Sheriff (the Sheriff) as of and for the year ended September 30, 2011, as listed in the table of contents. These special - purpose financial statements are the responsibility of the Sheriff's management. Our responsibility is to express opinions on these special - purpose financial statements based on our audit. We conducted our audit in accordance with auditing standards generally accepted in the United States and the standards applicable to financial audits contained in Government Auditing Standards, issued by the Comptroller General of the United States. Those standards require that we plan and perform the audit to obtain reasonable assurance about whether the special - purpose financial statements are free of material misstatement. We were not engaged to perform an audit of the Sheriff's internal control over financial reporting. Our audit included consideration of internal control over financial reporting as a basis for designing audit procedures that are appropriate in the circumstances, but not for the purpose of expressing an opinion on the effectiveness of the Sheriff's internal control over financial reporting. Accordingly, we express no such opinion. An audit also includes examining, on a test basis, evidence supporting the amounts and disclosures in the special - purpose financial statements, assessing the accounting principles used and significant estimates made by management, and evaluating the overall special - purpose financial statement presentation. We believe that our audit provides a reasonable basis for our opinions. As discussed in Note 1, the accompanying special- purpose financial statements referred to above were prepared for the purpose of complying with Section 218.39, Florida Statutes, and Chapter 10.557(3), Rules of the Auditor General for Local Governmental Entity Audits. These special - purpose financial statements are not intended to be a complete presentation of the Sheriff's financial position as of September 30, 2011, and the changes in its financial position, where applicable, for the year then ended, in conformity with accounting principles generally accepted in the United States. Additionally, the special - purpose financial statements present only the Sheriff and do not purport to, and do not, present fairly the financial position of Collier County, Florida, as of September 30, 2011, and the changes in its financial position, where applicable, for the year then ended, in conformity with accounting principles generally accepted in the United States. 1112- 1314152 1 A member firm of Ernst & Young Global Limited 11111 lllllllllllllllm������� " " " " "" J ERNST &YOUNG In our opinion, the special - purpose financial statements referred to above present fairly, in all material respects, the respective financial position of each major fund and the aggregate remaining fund information of the Sheriff as of September 30, 2011, and the respective changes in financial position and, where applicable, cash flows thereof and the budgetary comparison for the general fund for the year then ended in conformity with accounting principles generally accepted in the United States. In accordance with Government Auditing Standards, we have also issued our report dated December 22, 2011, on our consideration of the Sheriff's internal control over financial reporting and on our tests of its compliance with certain provisions of laws, regulations, contracts and grant agreements, and other matters. 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 the internal control over financial reporting or on compliance. That report is an integral part of an audit performed in accordance with Government Auditing Standards and should be considered in assessing the results of our audit. The schedule of funding progress for the retiree health plan on page 29 is not a required part of the special - purpose financial statements but is supplementary information required by the Governmental Accounting Standards Board (GASB). We have applied certain limited procedures, which consisted principally of inquiries of management regarding the methods of measurement and presentation of the required supplementary information. However, we did not audit the information and express no opinion on it. Our audit was conducted for the purpose of forming opinions on the special - purpose financial statements. The combining financial information is presented for the purpose of additional analysis and is not a required part of the special - purpose financial statements. The combining financial information has been subjected to the auditing procedures applied in the audit of the special - purpose financial statements and, in our opinion, is fairly stated in all material respects in relation to the special - purpose financial statements taken as a whole. As discussed in Note 1, the Sheriff changed its method of accounting and reporting for governmental fund balances as a result of the adoption of GASB Statement No. 54, Fund Balance Reporting and Governmental Fund Type Definitions. This report is intended solely for the information and use of the Sheriff, management, the Board of County Commissioners of Collier County, Florida, and the Auditor General of the State of Florida and is not intended to be and should not be used by anyone other than these specified parties. 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O O U 2 ^ m v°' c 4 ° a e° u i c o v 0 U 4U. 0 O y .5 >+ y � � • � a0i v a0i ° w k" °' � °° cONV fi .0 0 v, ti • aCi '" n 0q ti c o m w En a lu bOA h > v° t � y . d ❑ w w 'ks ° OC w b cU eC aai L �'- aai aaia0 ari0U Via° aa� C7U�O� wC7 a ° �F, F. :° Q u o 0 m F A O F°- W W U. "I M N 00 O OOi N N ON O o0 �° .� .--, N O O1 O Oi rt ON O, �O ON ON IT N N - o0 O op - O^ O �O M O M �D N 'IT Cl) M NO I I 00 00 I N O O t- N N Tt M OD N C5 N M N 00 ol DD M 00 N Vl N O� l . 01 M C'4- M N _M N - chi N N N C O O M c M Vl M N '-' M 1n O\ h O O C O N h to M 6A I M 000 -- M h ,It N P 1 I N M M 00 ON ( I I 7 M r- q- �O O to N P- �O - O 00 d' vi v� to v) O� to 00 t-- ty 00 00 N 0000 to t` 00 r- O O ON O .--� 00 t- ON M D1 h M tl- tkn r- t- N O� O O O� M O O N M M M ^ M t- r- I � kn r- C M l M aD C N 00 C � � d c•ri d I I I .Q � a o o v o O C/] U o w U ° > 7 . 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"I Collier County, Florida Sheriff Special - Purpose Statement of Revenues, Expenditures, and Changes in Fund Balance — Budget and Actual — General Fund Year Ended September 30, 2011 Revenues: Charges for services Expenditures: General government: Personal services Operating expenditures Public safety: Personal services Operating expenditures Capital outlay Total expenditures Excess of expenditures over revenues Other financing sources (uses): Transfers in: Collier County, Florida, Board of County Commissioners appropriations Transfers out: Distribution of excess appropriations to Collier County, Florida, Board of County Commissioners Total other financing sources Excess of revenues and other financing sources over expenditures Fund balance — beginning of year Fund balance — end of year See accompanying notes. Variance With Budget Budget Positive Original Final Actual (Negative) — $ 1,546,000 $ 1,887,682 $ 341,682 3,135,000 3,135,000 3,229,824 (94,824) 127,700 127,700 194,486 (66,786) 111,371,000 112,849,000 110,955,748 1,893,252 21,421,200 21,489,200 20,189,158 1,300,042 — — 2,293 771 (2,293 771) 136,054,900 137,600,900 136,862,987 737.913 (136,054,900) (136,054,900) (134,975,305) 1,079,595 136,054,900 136,054,900 136,054,900 — — (1,079 595) (1,079,595) 136,054,900 136,054,900 134,975 305 (1,079,595) 1112- 1314152 5 Collier County, Florida Sheriff Special - Purpose Statement of Net Assets — Internal Service Fund September 30, 2011 Assets Cash and cash equivalents $ 6,914,054 Investments 7,736,566 Due from other funds 780,436 Other receivable 151,534 Total assets 15,582,590 Liabilities and net assets Liabilities: Self - insurance claims payable 2,251,000 Net other post - employment benefit obligation 1,140,863 Total liabilities 3,391,863 Net assets: Unrestricted $ 12,190,727 See accompanying notes. 1112- 1314152 6 Collier County, Florida Sheriff Special - Purpose Statement of Revenues, Expenses, and Changes in Net Assets — Internal Service Fund Year Ended September 30, 2011 Operating revenues: Charges for services $ 19,579,579 Operating expenses: Claims and claims expenses 16,804,112 Reinsurance premiums 659,286 Net other post - employment benefit expense 11,510 Administrative and other expenses 341,007 Total operating expenses 17,815,915 Operating income 1,763,664 Nonoperating revenues (expenses): Interest income 43,054 Decrease in fair value of investments (10,405) Change in net assets 1,796,313 Net assets — beginning of year 10,394,414 Net assets — end of year $ 12,190,727 See accompanying notes. 1112 - 1314152 7 Collier County, Florida Sheriff Special - Purpose Statement of Cash Flows — Internal Service Fund Year Ended September 30, 2011 Operating activities Cash payments for claims and claims- related services $ (16,858,646) Cash payments for reinsurance premiums (659,286) Cash payments for administrative services and supplies (341,007) Cash received from other funds for services 19,164,973 Cash received from retirees for services 499,143 Net cash provided by operating activities 1,805,177 Investing activities Investment earnings 32,649 Increase in investments (3,066,801) Net cash used in investing activities (3,034,152) Net change in cash and cash equivalents (1,228,975) Cash and cash equivalents — beginning of year 8,143,029 Cash and cash equivalents — end of year $ 6.914,054 Reconciliation of operating income to net cash provided by operating activities Operating income $ 1,763,664 Adjustments to reconcile operating income to net cash provided by operating activities: Increase in receivables (151,534) Decrease in due from other funds 84,537 Increase in net other post - employment benefit obligation 11,510 Increase in self - insurance claims payable 97,000 Net cash used in operating activities $ 1.805.177 See accompanying notes. 11.12- 1314152 8 Collier County, Florida Sheriff Special - Purpose Balance Sheet — Agency Funds September 30, 2011 Assets Cash and cash equivalents $ 464,087 Due from individuals and businesses 8,864 Total assets $ 472,951 Liabilities Due to other governments $ 13,917 Due to Collier County, Florida, Board of County Commissioners 31,263 Due to individuals and businesses 427,771 Total liabilities $ 472,951 See accompanying notes. 1112 - 1314152 9 Collier County, Florida Sheriff Notes to Special - Purpose Financial Statements September 30, 2011 1. Summary of Significant Accounting Policies Reporting Entity The Collier County, Florida, Sheriff (the Sheriff) is an elected constitutional officer as provided for by the Constitution of the State of Florida. Pursuant to Chapter 129, Florida Statutes, the Sheriff's budget is submitted to the Collier County, Florida, Board of County Commissioners (the Board) for approval. The Sheriff is the chief law enforcement officer of Collier County, Florida (the County), and is responsible for operating the County's corrections facilities. The special - purpose financial statements include the general fund, special revenue funds, proprietary fund (internal service fund), and agency funds of the Sheriff's office. The accompanying special - purpose financial statements were prepared for the purpose of complying with Section 218.39, Florida Statutes, and Section 10.557(3), Rules of the Auditor General for Local Governmental Entity Audits. Section 10.556(4), Rules of the Auditor General for Local Governmental Entity Audits, requires the Sheriff to only present fund financial statements. Accordingly, due to the omission of government -wide financial statements and related disclosures, including a management's discussion and analysis, these special - purpose financial statements do not constitute a complete presentation of the financial position of the Sheriff as of September 30, 2011, and the changes in its financial position and its cash flows, where applicable, for the year then ended, in conformity with Governmental Accounting Standards Board (GASB) Statement No. 34, Basic Financial Statements — and Management's Discussion and Analysis —for State and Local Governments, but otherwise constitute financial statements prepared in conformity with U.S. generally accepted accounting principles. As a result of the budgetary oversight by the Board and the financial dependency on the Board, the financial activities of the Sheriff are included in the Collier County, Florida, Comprehensive Annual Financial Report. Transfers are provided by appropriations from the Board pursuant to law. Estimated receipts and budgeted fund balances must equal appropriations. The Sheriff is required to refund to the Board all excess appropriations annually; therefore, no unappropriated general fund balance is carried forward. 1112- 1314152 10 Collier County, Florida Sheriff Notes to Special - Purpose Financial Statements (continued) 1. Summary of Significant Accounting Policies (continued) Measurement Focus, Basis of Accounting, and Basis of Presentation The special - purpose fund financial statements report detailed information about the Sheriff. The focus of governmental fund financial statements is on major funds rather than reporting funds by type. Each major fund is reported in a separate column. Governmental Funds Governmental funds are accounted for using the flow of current financial resources measurement focus. Only current assets and current liabilities, generally, are included on the special - purpose balance sheet. Operating statements for these funds present increases (i.e., revenues and other financing sources) and decreases (i.e., expenditures and other financing uses) in net current assets. The modified accrual basis of accounting is used by governmental funds. Under the modified accrual basis of accounting, revenues are recognized when susceptible to accrual (i.e., when they become measurable and available to finance current liabilities of the fiscal year). For this purpose, the Sheriff considers revenues to be available if they are collected within 60 days after year -end with the exception of grants, which have a period of availability of one year. Grants are recognized as revenue as soon as all eligibility requirements have been met. Expenditures are recorded when the related fund liability is incurred, except for compensated absences, which are recognized as expenditures to the extent they have matured. Substantially all of the Sheriff's funding is appropriated by the Board. In applying the susceptible -to- accrual concept to intergovernmental revenue, there are essentially two types of revenue. In one, moneys must be expended on the specific purpose or project before any amounts will be paid to the Sheriff, therefore, revenue is recognized based upon the expenditures incurred. Most grant revenue is recorded in this manner. In the other, moneys are virtually unrestricted and are revocable only for failure to comply with prescribed compliance requirements. These resources are reflected as revenue at the time of receipt, or earlier, if the susceptible -to- accrual criteria are met. Other revenue is recognized as earned and becomes measurable and available to pay liabilities of the current period. 1112- 1314152 11 Collier County, Florida Sheriff Notes to Special - Purpose Financial Statements (continued) 1. Summary of Significant Accounting Policies (continued) Florida Statutes provide that the amount by which revenues and transfers exceed annual expenditures be remitted to the Board immediately following the fiscal year for which the funding was provided or following the fiscal year during which other revenue was recognized. The amount of this distribution is recorded as a liability and as another financing use in the accompanying special - purpose financial statements. Capital outlays expended in governmental fund operations are recorded as capital assets in the basic financial statements of Collier County, Florida, rather than in the governmental funds of the Sheriff. The Sheriff has three major governmental funds: General Fund — The general fund is used to account for the general operations of the Sheriff and includes all transactions that are not accounted for in another fund. Grant Special Revenue Fund — This fund is used to account for the proceeds of federal and state grant revenues that are legally restricted to specified purposes. Prisoner Welfare Fund— This fund is used to account for the proceeds of inmate- related services and is legally restricted to specified purposes that benefit the inmate population. The Sheriff also has one non -major fund: Federal Equitable Sharing Fund— The revenue from this fund is the result of joint investigations with federal agencies that result in the equitable sharing of the net proceeds of the forfeiture. Fund balances reported in these funds are restricted for the specified purpose of the respective fund. 1112- 1314152 12 Collier County, Florida Sheriff Notes to Special - Purpose Financial Statements (continued) 1. Summary of Significant Accounting Policies (continued) Fiduciary Funds Fiduciary Funds — Agency Funds — These funds are used to account for assets held by the Sheriff as an agent for individuals, private organizations, and other governments. Agency funds are custodial in nature (assets equal liabilities), and do not involve measurement of results of operations or have a measurement focus. Agency funds are accounted for using the accrual basis of accounting. Proprietary Fund Internal Service Fund — This fund is used to account for the health and dental insurance services provided to departments and retirees of the Sheriff on a cost - reimbursement basis. Proprietary funds are accounted for using the economic resources measurement focus and the accrual basis of accounting. Revenues are recorded when earned, and expenses are recorded when a liability is incurred, regardless of the timing of related cash flows. Cash Equivalents and Investments Cash equivalents are defined as highly liquid investments with maturities of three months or less. Cash equivalents also include amounts deposited in Florida PRIME (formerly the Local Government Surplus Trust Fund) administered by the State Board of Administration, a 2a -7 like investment pool. Shares of the investment pool are based on the pool's share price, which approximates fair value. All investments are stated at fair value. Compensated Absences All full -time employees of the Sheriff are allowed to accumulate an unlimited number of hours of unused sick time and up to 500 hours of unused vacation leave. Upon termination, employees receive 100% of allowable accumulated vacation hours and a percentage of unused sick leave, depending on years of service, not to exceed 1,000 hours. Vacation time and sick leave are included in operating costs when the payments are made to the employees. The Sheriff does not, nor is the Sheriff legally required to, accumulate expendable financial resources for these unmatured obligations. Accordingly, the liability for compensated absences is not reported in the governmental funds, but rather is reported in the basic financial statements for the County. 1112- 1314152 13 Collier County, Florida Sheriff Notes to Special - Purpose Financial Statements (continued) 1. Summary of Significant Accounting Policies (continued) Use of Estimates The preparation of the special - purpose financial statements requires management of the Sheriff to make a number of estimates and assumptions relating to the reported amounts of assets and liabilities and the disclosure of contingent assets and liabilities at the date of the special - purpose financial statements and the reported amounts of revenues and expenditures during that period. Significant items subject to such estimates and assumptions include the self - insurance claims payable. Actual results could differ from those estimates. New Fund Balance Reporting and Governmental Fund -Type Definitions The Sheriff adopted GASB Statement No. 54, Fund Balance Reporting and Governmental Fund Type Definitions, effective October 1, 2010. This GASB Statement clarifies governmental fund balance classifications and fund -type definitions. Fund balances are classified either as non - spendable or as a spendable. Spendable fund balances are further classified in a hierarchy based on the extent to which there are external and/or internal constraints in how fund balance amounts may be spent. Non - spendable fund balances include amount that cannot be spent because they are not in spendable form or are legally or contractually required to be maintained intact. The Sheriff did not have any non - spendable fund balances as of September 30, 2011. Spendable fund balances are classified based on a hierarchy of the Sheriff's ability to control the spending of these fund balances and are reported in the following categories: restricted, committed, assigned and unassigned. The Sheriff's fund balances for the grant special revenue fund, prisoner welfare fund and federal equitable sharing fund fall into this category. The adoption of GASB Statement No. 54 did not have an effect on the Sheriff's general fund financial statements at September 30, 2011, since the Sheriff does not maintain fund balances in the general fund. Fund balances are maintained in the grant special revenue fund, prisoner welfare fund, and the federal equitable sharing fund: are constrained for specific purposes that are externally imposed by grantors, laws, or regulations or imposed by law through constitutional provisions or enabling legislation, and are reported as restricted fund balances in accordance with GASB Statement No. 54. 1112- 1314152 14 Collier County, Florida Sheriff Notes to Special - Purpose Financial Statements (continued) 2. Budgetary Process Florida Statutes govern the preparation, adoption, and administration of the Sheriff's annual budget. The Sheriff prepares a budget for the general fund and submits it to the Board for approval. The budget is prepared on a basis consistent with U.S. generally accepted accounting principles. Any subsequent amendments to the budget must be approved by the Board. The annual budget serves as the legal authorization for expenditures. Expenditures may not legally exceed appropriations at the fund level. Appropriations lapse at year -end. Budgetary control is maintained at the departmental major object expenditure level. Budgetary changes within the major object expenditure categories are made at the discretion of the Sheriff. The Sheriff does not budget for the grant special revenue fund as it is funded by federal and state grants and is governed by those documents. Additionally, the prisoner welfare and federal equitable sharing funds do not have legally adopted budgets. The original budget is the first complete appropriated budget. The final budget is the original budget adjusted by all reserves, transfers, allocations, supplemental appropriations, and other legally authorized changes applicable to the fiscal year, whenever legally authorized. 1112- 1314152 15 Collier County, Florida Sheriff Notes to Special - Purpose Financial Statements (continued) 3. Cash, Cash Equivalents, and Investments At September 30, 2011, the carrying value of the Sheriff's cash, cash equivalents, and investments was as follows: Average Maturity/ Carrying Credit Type Maturity Value Rating Cash and cash equivalents Cash on hand N/A $ 16,249 N/A Demand deposits N/A 20,632,584 N/A Local government surplus funds trust fund: 3/13/2015 597,883 Aaa Pool A 38.3 days 718,262 AAAm Pool B 4.82 years 16,165 Unrated Federated Government Obligation Fund N/A 304,777 N/A Treasury Bill 10/20/2011 499,996 AAA Treasury Bill 12/15/2011 499,985 AAA Total cash and cash equivalents 8/10/2015 $ 22,688,018 Aaa Investments Treasury Note 2/29/2012 501,620 AAA Federal Home Loan Bank 9/16/2013 698,573 Aaa Federal Home Loan Bank 3/13/2015 597,883 Aaa Federal Home Loan Bank 9/16/2016 697,485 Aaa Federal Farm Credit Bank 9/1/2015 698,574 Aaa Federal National Mortgage Assoc Note 9/9/2014 597,754 Aaa Federal National Mortgage Assoc Note 9/9/2014 698,601 Aaa Federal National Mortgage Assoc Note 9/14/2015 598,081 Aaa Federal Home Loan Bank 8/10/2015 500,626 Aaa Federal Home Loan Mortgage Corp Note 3/15/2015 350,929 Aaa Federal National Mortgage Assoc Note 7/27/2016 502,529 Aaa Federal Home Loan Bank 12/14/2015 597,118 Aaa Federal Home Loan Bank 3/21/2016 696,793 Aaa Total investments $ 7,736,566 Total cash, cash equivalents, and investments $ 30,424,584 1112 - 1314152 16 Collier County, Florida Sheriff Notes to Special - Purpose Financial Statements (continued) 3. Cash, Cash Equivalents, and Investments (continued) The total cash, cash equivalent, and investments balances at September 30, 2011, were as follows: General fund $ 8,699,086 Grant special revenue fund 4,773,081 Prisoner welfare fund 1,058,289 Federal equitable sharing fund 779,421 Internal service fund 14,650,620 Agency funds 464,087 $ 30,424,584 Custodial Credit Risk At September 30, 2011, the Sheriff deposits were entirely covered by federal depository insurance or by collateral pledged with the State Treasurer pursuant to Chapter 280, Florida Statutes. Under this Chapter, in the event of default by a participating financial institution (a qualified public depository), all participating institutions are obligated to reimburse the government entity for the loss. Interest Rate Risk The Sheriff has no specific investment policy regarding interest rate risk. Credit Risk The Sheriff's policy is to follow the guidance in Section 219.075, Florida Statutes, regarding the deposit of funds received and the investment of surplus funds. Sections 219.075 and 218.415, Florida Statutes, authorize the Sheriff to invest in the local government surplus funds trust fund; obligations of the United States Treasury; federal agencies and instrumentalities, or any intergovernmental pool authorized pursuant to the Florida Interlocal Corporation Act; money market funds registered with the Securities and Exchange Commission with the highest credit quality rating from a nationally recognized rating agency; direct interest - bearing time deposits or savings accounts in banks organized under the laws of the United States and doing business and 1112 - 1314152 17 Collier County, Florida Sheriff Notes to Special - Purpose Financial Statements (continued) 3. Cash, Cash Equivalents, and Investments (continued) situated in the state of Florida, savings and loan associations, that are under state supervision, or federal savings and loan associations located in the state of Florida and organized under federal law and federal supervision, provided that any such deposits are secured by collateral as may be prescribed by law. Additionally, Florida Statutes allow local governments to place public funds with institutions that participate in a collateral pool under the Florida Security for Public Deposits Act. The pool is administered by the State Treasurer, who may make additional assessments to ensure that no public funds will be lost. Florida PRIME (formerly the Local Government Surplus Funds Trust Fund Investment Pool) (the Pool) is administered by the State Board of Administration and consists of two separate pools. Pool A (LGIP) primarily consists of money market appropriate assets, and Pool B (Fund B Surplus Trust Fund) consists of assets that pay more slowly than expected and/or have significant credit and liquidity risk. In addition, full realization of the principle value of Pool B assets is not readily determinable. At September 30, 2011, the Sheriff had $734,427 invested in the Pool. Of this amount, $718,262 is invested in the LGIP, which is rated "AAAm" by Standard & Poor's Ratings Services, and $16,165 in the Fund B Surplus Funds Trust Fund, which is not rated by a nationally recognized statistical rating agency. The LGIP investment is fully liquid and carries a weighted- average days to maturity of 38.3 days. Fund B is accounted for as a fluctuating NAV (net asset value) pool, and the fair value factor for September 30, 2011, was 0.7568386. The Fund B amount has a weighted- average life of 4.82 years. Fund B cash holdings continue to be distributed to participants as they become available from maturities, sales, and received income. 1112.1314152 18 Collier County, Florida Sheriff Notes to Special - Purpose Financial Statements (continued) 3. Cash, Cash Equivalents, and Investments (continued) Concentration of Credit Risk The Sheriff's investments are included in the internal service fund, which is used to account for the Sheriff's self - insured health plan. The Florida Sheriff's Multiple Employer Trust administers the Sheriff's self - insured health plan and has an investment policy that allows for the investment of funds that exceed one month's required funding by more than $100,000. Investments can be made in government securities. The Sheriff's portfolio managed by the self - insurance trust includes investments in U.S. government instrumentalities, money market funds, and demand deposits, detailed as follows, at September 30, 2011: Percent of Portfolio U.S. Treasury Bills 7% Federal Home Loan Mortgage Corporation 2 Federal Home Loan Bank 26 Federal National Mortgage Association 17 Federal Farm Credit Bank 5 U.S. Treasury Notes 3 Money market funds — Federated Government Obligation 2 Demand Deposits 38 Total 100% 4. Capital Assets Capital assets used by the Sheriff are capitalized in the basic financial statements of the County, rather than in the governmental funds of the Sheriff. Upon acquisition, such assets are recorded as expenditures in the governmental funds of the Sheriff, and are capitalized at cost in the basic financial statements of the County. Capital assets are valued at historical cost or estimated historical cost if actual historical cost is not available. Donated capital assets are valued at their estimated fair value on the date received. The Sheriff maintains custodial responsibility for the capital assets used by his office. No depreciation has been provided on capital assets in these special - purpose financial statements. However, depreciation expense on these assets is recorded in the basic financial statements of the County. 1112 - 1314152 19 Collier County, Florida Sheriff Notes to Special - Purpose Financial Statements (continued) 4. Capital Assets (continued) A summary of changes in capital assets, which are reported in the basic financial statements of the County follows: Balance October 1, 2010 Additions Balance September 30, Retirements 2011 Machinery and equipment $ 63,962,409 $ 5,045,920 $ (4,074,521) $ 64,933,808 Less accumulated depreciation (49,918,327) (6,463,450) 3,946,736 (52,435,041) Machinery and equipment, net $ 14,044,082 $ (1,417,530) $ (127,785) $ 12,498,767 5. Long -Term Liabilities The following is a summary of changes in long -term liabilities, which are reported in the basic financial statements of the County: October 1, September 30, 2010 Increases Retirements 2011 Accrued compensated absences $ 11,730,470 $ 3,266,702 $ (1,457,006) $ 13,540,166 Of these liabilities, approximately $360,000 is expected to be paid during the fiscal year ending September 30, 2012. These long -term liabilities are not reported in the special - purpose financial statements of the Sheriff since they have not matured. 6. Interfund Balances and Transfers Due from and due to other funds at September 30, 2011, were as follows: General fund Prisoner welfare fund Internal service fund Federal equitable sharing Due From Due To $ 22,161 $ 780,436 — 21,393 780,436 - - 768 $ 802,597 $ 802,597 Interfund receivables and payables generally represent recurring activities between funds. 1112- 1314152 20 Collier County, Florida Sheriff Notes to Special - Purpose Financial Statements (continued) 7. Related -Party Transactions The Board provided funding for the Sheriff for the year of $136,054,900. At September 30, 2011, the Sheriff had a payable due to the Board of $1,132,040 comprising of the following: General fund: Distribution of excess appropriations $ 1,079,595 Distribution of interest collected 14,261 Miscellaneous payables 6,921 Agency funds 31,263 Total $ 1,132,040 Additionally, the Sheriff had a receivable from the Board related to services provided to the County of $451,743 at September 30, 2011. Agency Funds The Sheriff's Office administers funds for the Collier County Sheriff's Office Explorers Program. The program is funded by donations from employees through payroll deduction and donations from outside organizations. The program is designed for students to explore the opportunity to learn about and interact with law enforcement and to help stimulate further interest in the possibility of a law enforcement career. The Sheriff's Office collects donations, through payroll deduction, for the Collier County Sheriff's Office Benefit Fund Committee, Inc. (the Benefit Fund Committee), a separate, nonprofit 501(c)(3) organization. The Benefit Fund Committee provides emergency funds for major catastrophic events such as death, serious illness, or travel due to a family crisis. Funds are available as an interest free loan to eligible employees upon a written request and approval of the Benefit Fund Committee. 8. Employee Retirement Plan Substantially all full -time and part -time employees of the Sheriff are eligible to participate in the State of Florida Retirement System (the System), a cost - sharing multiple - employer defined benefit plan administered by the State of Florida, Division of Retirement. The System is a 1112- 1314152 21 Collier County, Florida Sheriff Notes to Special - Purpose Financial Statements (continued) 8. Employee Retirement Plan (continued) defined benefit plan for all state, and participating county, district school board, community college, and university employees (the Pension Plan). The System also offers eligible employees participation in an alternative defined contribution plan (the Investment Plan). The Sheriff and deputies participate in the special risk class. The plan is administered by the State of Florida. Contribution rates are established statewide for all participating governmental units. Accordingly, the actuarial information and related disclosures attributable to the Sheriff's employees are not determinable. Employees hired prior to July 1, 2011, participating in the Pension Plan who retire at or after age 62 with 6 years of credited service for regular risk or with 30 years of service regardless of age, are entitled to a retirement benefit, payable monthly for life, equal to 1.6% for regular employees, 2% for senior management, and 3% for county elected officials of their final average compensation for each year of credited service; for special risk, after age 55 with 6 years or with 25 years of service regardless of age, retirement benefits are payable monthly for life, up to 3% for each year of credited service times their final average compensation. Final average compensation is the employee's average of the 5 highest years of salary earned during credited service. Vested employees may retire before age 62 for regular risk and 55 for special risk and receive retirement benefits that are reduced 5% for each year prior to normal retirement age. Employees hired on July 1, 2011, or later participating in the Pension Plan who retire at or after age 65 with 8 years of credited service for regular risk or with 33 years of service regardless of age are entitled to a retirement benefit, payable monthly for life, equal to 1.6% for regular employees, 2% for senior management, and 3% for county elected officials of their final average compensation for each year of credited service; for special risk, after age 60 with 8 years or with 30 years of service and age 57 or after 30 years of special risk service regardless of age or after 33 years of any creditable service, retirement benefits are payable monthly for life. Vested employees may retire before age 65 for regular risk and 60 for special risk and receive retirement benefits that are reduced 5% for each year prior to normal retirement age. Employees participating in the Investment Plan are vested after one year of service with no age requirement. The System also provides death and disability benefits. Benefits are established by Chapter 121, Florida Statutes, and Chapter 22B, Florida Administrative Code. 1112 - 1314152 22 Collier County, Florida Sheriff Notes to Special - Purpose Financial Statements (continued) 8. Employee Retirement Plan (continued) The Deferred Retirement Option Program (DROP) is a program that provides an alternative method for payment of retirement benefits for a specified and limited period for members of the System, effective July 1, 1998. Under this program, the employee may retire and have benefits accumulate in the Florida retirement system trust fund, earning interest, while continuing to work for a System employer. The participation in the program does not change conditions of employment. When the DROP period ends, maximum of 60 months, employment must be terminated. At the time of termination of employment, the employee will receive payment of the accumulated DROP benefits and begin receiving monthly retirement benefit (in the same amount determined at retirement, plus annual cost -of- living increases). The System publishes an annual report that provides ten -year historical trend information about progress made in accumulating sufficient assets to pay benefits when due. That report may be obtained by writing to the Division of Retirement, Department of Management Services, 1317 Winewood Boulevard, Building 8, Tallahassee, Florida 32399: by calling (850) 488 -5706; or by accessing the division's internet site at www.frs.state.fl.us. The Sheriff is required to contribute an actuarially determined rate. Rates from October 1, 2010 through June 30, 2011, were 23.25% for special risk employees, 10.77% for regular employees, 14.57% for senior management, and 12.25% for DROP employees based on covered payroll. The current rates, effective July 1, 2011, are 14.10% for special risk employees, 4.91% for regular employees, 6.27% for senior management, and 4.42% for DROP employees based on covered payroll. The contribution requirements of the Sheriff are established and may be amended by the State of Florida. The Sheriff's contributions to the plan for the years ended September 30, 2011, 2010, . and 2009, were $13,153,722, $14,482,279, and $14,955,868, respectively, equal to the required contributions for each year. Effective July 1, 2011, participating employees are required to contribute 3% of eligible wages to the System. Employees enrolled in DROP are not required to make this contribution. 9. Other Post - Employment Benefits The Sheriff follows the provisions of GASB Statement No. 45, Accounting and Financial Reporting by Employers for Postemployment Benefits Other Than Pensions, for its other post - employment benefits. 1112- 1314152 23 Collier County, Florida Sheriff Notes to Special - Purpose Financial Statements (continued) 9. Other Post - Employment Benefits (continued) Plan Description The Sheriff administers a single - employer defined benefit plan (OPEB Plan) and can amend the benefit provisions. The Sheriff offers an OPEB Plan that subsidizes the cost of health care for its retirees who have six years of creditable service with the Sheriff and who receive a monthly retirement benefit from the System. The Sheriff subsidizes approximately 20% for single coverage and 21% for family coverage for qualifying individuals. Additionally, in accordance with Florida Statute 112.0801, Sheriff's employees who retire and immediately begin receiving benefits from the System have the option of paying premiums to continue in the Sheriff's health insurance plan at the same group rate as for active employees. At September 30, 2010, the date of the latest actuarial valuation, Sheriff plan participation consisted of. OPEB plan participants Retirees receiving benefits Funding Policy The Sheriff has the authority to establish and amend funding policy. The OPEB Plan is currently being funded on a pay -as- you -go basis. For the year ended September 30, 2011, the Sheriff contributed $1,084,368 to the OPEB Plan. The other post - employment benefit cost for the plan is calculated based on the annual required contribution (ARC) of the employer, an amount actuarially determined in accordance with GASB Statement 45. The ARC represents a level of funding that, if paid on an ongoing basis, is projected to cover normal costs each year and amortize any unfunded actuarial liabilities over a period not to exceed 30 years. An actuarial valuation on the OPEB Plan as a whole was performed as of October 1, 2010. 1112 - 1314152 24 Collier County, Florida Sheriff Notes to Special - Purpose Financial Statements (continued) 9. Other Post - Employment Benefits (continued) Annual OPEB Cost and Net OPEB Obligation The annual cost (expense) of the Sheriff's OPEB Plan is calculated based on the ARC. The following table shows the components of the Sheriff's annual OPEB Plan cost for the year ended September 30, 2011, the amount actually contributed, and the changes in the net OPEB Plan obligation. Annual required contribution $ 1,117,938 Interest on net OPEB Plan obligation 33,881 Adjustment to annual required contribution (55,941) Annual OPEB Plan cost (expense) 1,095,878 Contributions made (1,084,368) Increase in net OPEB Plan obligation (asset) 11,510 Net OPEB Plan obligation — beginning of year 1,129,353 Net OPEB Plan obligation (asset) — end of year $ 1,140,863 No trust or agency fund has been established for the OPEB Plan. The Sheriff's annual OPEB Plan cost, the percentage of annual OPEB Plan cost contributed to the plan, and the net OPEB Plan obligation for the year ended September 30, 2011, and the preceding years were as follows: Fiscal year ended: September 30, 2011 September 30, 2010 September 30, 2009 1112- 1314152 25 Percentage of Annual OPEB Annual OPEB Plan Cost Net OPEB Plan Cost Contributed Plan Obligation $ 1,095,878 99% $ 1,140,863 $ 1,088,692 91% $ 1,129,353 $ 1,352,721 65% $ 1,026,451 1112- 1314152 25 Collier County, Florida Sheriff Notes to Special - Purpose Financial Statements (continued) 9. Other Post - Employment Benefits (continued) Funded Status and Funding Progress As of the September 30, 2011, actuarial valuation date, the OPEB Plan was 0% funded, the actuarial accrued liability for benefits was $12,018,242, and the actuarial value of assets was $0, resulting in an unfunded actuarial accrued liability (UAAL) of $12,018,242. The covered payroll (annual payroll of active employees covered by the OPEB Plan) was approximately $114.2 million, and the ratio of the UAAL to the covered payroll was 10.5 %. Actuarial Methods and Assumptions Actuarial valuations of an ongoing plan involve estimates of the value of reported amounts and assumptions about the probability of occurrence of events far into the future. Examples include assumptions about future employment, mortality, and the health care cost trend. Amounts determined regarding the funded status of the plan and the annual required contributions of the employer are subject to continual revision as actual results are compared with past expectations and new estimates are made about the future. Calculations for financial reporting purposes are based on the benefits provided under terms of the plan as understood by the employer and the plan members in effect at the time of each valuation and on the pattern of sharing of costs between the employer and plan members to that point. The projection of benefits for financial reporting purposes does not explicitly incorporate the potential effects of legal or contractual funding limitations on the pattern of cost sharing between the employer and plan members in the future. Actuarial calculations reflect a long -term perspective. Consistent with that perspective, actuarial methods and assumptions used include techniques that are designed to reduce the effects of short-term volatility in actuarial accrued liabilities and the actuarial value of assets. The actuarial methods are: Actuarial cost method Amortization method Amortization period Projected unit credit method Closed 30 years, Level Dollar Amount 1112- 1314152 26 Collier County, Florida Sheriff Notes to Special - Purpose Financial Statements (continued) 9. Other Post - Employment Benefits (continued) The actuarial assumptions are: Investment rate of return 3% Discount rate 3% Healthcare cost trend rate 10% for the 2011 fiscal year grading to an ultimate rate of 5% for the 2021 fiscal year 10. Self- Insurance Program The Sheriff's Office participates in the Statewide Florida Sheriff's Self- Insurance Fund (the Fund) for its professional liability insurance. The Fund is managed by representatives of the participating sheriff offices and provides professional liability insurance to participating agencies. The Fund provides liability insurance coverage subject to the following limitations: $3,100,000 for any claim involving a single individual, $3,200,000 for any one incident or occurrence, and $10,000,000 for an annual aggregate per member. The Sheriff also participates in the Fund program for workers' compensation coverage. The Florida Sheriffs' Association Workers' Compensation Insurance Trust is a limited self - insurance fund providing coverage for the first $350,000 of every claim. Reinsurance is provided through a third party for all claims exceeding $350,000 up to $10,000,000. Settled claims have not exceeded the insurance provided by third -parry carriers in any of the past three years. Premiums charged to participating sheriffs are based upon amounts believed by the Fund's management to meet the estimated annual payout during the fiscal year and to pay for the estimated operating costs of the program. All liabilities associated with these self - insured risks are reported in the basic financial statements of the Fund. The Sheriff has also established a self - funded employee health plan for active employees and retirees. An internal service fund is used to account for the activities of the plan. Excess coverage has been purchased that provides specific claim excess coverage for any one incident exceeding $200,000 up to $1,000,000. Payments to the internal service fund are based on actuarial estimates of amounts needed to pay prior year and current year claims, including claims incurred but not yet reported. 1112- 1314152 27 Collier County, Florida Sheriff Notes to Special - Purpose Financial Statements (continued) 10. Self - Insurance Program (continued) Changes in the balance of estimated insurance claims payable for the fiscal year ended September 30, 2011, is as follows: Fiscal year ending: 2010 2011 11. Claims and Contingencies Litigation New Claims Balance as of and Changes Claim Balance as of October 1 in Estimates Payments September 30 $ 2,121,000 $ 16,758,796 $(16,725,796) $ 2,154,000 $ 2,154,000 $ 16,901,112 $(16,804,112) $ 2,251,000 The Sheriff is involved in various claims and legal actions arising in the ordinary course of operations. In the opinion of management, the ultimate disposition of these matters will not have a material adverse effect on the Sheriff. Federal and State Grants Grant funds received by the Sheriff are subject to audit by grantor agencies. Audits of these grants may result in disallowed costs, which may constitute a liability of the Sheriff. In the opinion of management, disallowed costs, if any, would not have a significant effect on the financial position of the Sheriff. 1112- 1314152 28 Required Supplementary Information 1112 - 1314152 Collier County, Florida Sheriff Schedule of Funding Progress for the Retiree Health Plan 1112 - 1314152 29 Actuarial Accrued UAAL as a Actuarial Actuarial Liability (AAL) - Percentage of Valuation Value of Projected Unfunded Funded Covered Covered Date Assets Unit Credit AAL Ratio Payroll Payroll 10/1/2008 $ - $ 9,354,088 $ 9,354,088 0.0% $128,182,544 7.3% 10/1/2009 $ - $ 14,171,709 $ 14,171,709 0.0% $123,296,676 11.5% 10/1/2010 $ - $ 12,148,033 $ 12,148,033 0.0% $117,879,632 10.3% 10/1/2011 $ - $ 12,018,242 $ 12,018,242 0.0% $114,185,572 10.5% 1112 - 1314152 29 Combining Financial Information 1112- 1314152 O M N h M r- Nt -- r- M � rA 00 1.0 "Cl r-ti >, y O 00 U a1 N ..i C N bA ,b I cti b � � F Fi G) •- b 3 cn ds N t • cd O M 0 1 t y C) ~ o o to U U o a o .. u AC o 0 i4 cd W •U U 69 O M N h M r- Nt -- r- M � rA 00 1.0 "Cl r-ti >, y O 00 a1 N ..i C ��� ,b CI MN F Fi G) •- b 3 cn ds v' �7 � •� 60S > cd U l 0 1 t y C) ~ o N N N o a o .. u AC o o o i4 W 69 4{3 6R *10 4w 4w 00 1-0 00 N M 59 69 00 1 00 I 100 y � qt N"t a 00 00 00 C4 .? �t �r 110 00 0l 00 M d "~ v' O O O� •-y U H W) W M O M N h M 69 GOS 6s V. rA "Cl c� N ,b G) •- b 3 cn �, ti v' �7 � •� > cd U O O O y " ~ o a o .. u AC o o o O M N h M Cd O w v O = UU� v cn b v I v cd a v v bA U 0 a on a 0 0 a U v O N O M N N b v b 0 w v iso O t— "I — r-- M � M O � r- 6 ol N ., b p M N c b y N o-b v '> >° o ° (� Os 609 Cd M I M Q\ N -- o 00 .0 0 Q o oU Z~ .�`�� Vi Cd Q Cd Q 5 0 ° 5 Q QU(�E -{ �1AA AF-+ y M M M •-+ A 6A Os 69 � � o rn rn O Vi 00 d- en 00 fn r- 00 . - N N M M M 6A 69 os N N O O ^{ 00 00 O y p O V> O tn r-1 O It It V) 00 M p N � O 6H b9 M- M N V M 0 � Ell Cd b w o a c b cdCd o-b v '> >° o ° Cd co wn �. j = � o .0 0 Q o oU Z~ .�`�� Vi Cd Q Cd Q 5 0 ° 5 Q QU(�E -{ �1AA AF-+ M N V M Other Reports 1112 - 1314152 J Ex nsT s YOUNG Ernst & Young LLP Suite 500 5100 Town Center Circle Boca Raton, Florida 33486 Tel: +1 561 955 8000 Fax: +1 561 955 8200 www.ey.com Report of Independent Certified Public Accountants on Internal Control Over Financial Reporting and on Compliance and Other Matters Based on an Audit of Special - Purpose Financial Statements Performed in Accordance With Government Auditing Standards Honorable Kevin Rambosk, Sheriff Collier County, Florida We have audited the special- purpose financial statements of each major fund and the aggregate remaining fund information of the Collier County, Florida, Sheriff (the Sheriff) as of and for the year ended September 30, 2011, and have issued our report thereon dated December 22, 2011, which describes that such special - purpose financial statements have been prepared for the purpose of complying with Section 218.39, Florida Statutes, and Chapter 10.577(3), Rules of the Auditor General for Local Governmental Entity Audits. We conducted our audit in accordance with auditing standards generally accepted in the United States and the standards applicable to financial audits contained in Government Auditing Standards, issued by the Comptroller General of the United States. Internal Control Over Financial Reporting In planning and performing our audit, we considered the Sheriff's internal control over financial reporting as a basis for designing our auditing procedures for the purpose of expressing our opinions on the special - purpose financial statements, but not for the purpose of expressing an opinion on the effectiveness of the Sheriff's internal control over financial reporting. Accordingly, we do not express an opinion on the effectiveness of the Sheriff's internal control over financial reporting. A deficiency in internal control exists when the design or operation of a control does not allow management or employees, in the normal course of performing their assigned functions, to prevent, or detect and correct misstatements on a timely basis. A material weakness is a deficiency, or combination of deficiencies, in internal control, such that there is a reasonable possibility that a material misstatement of the entity's financial statements will not be prevented, or detected and corrected, on a timely basis. Our consideration of internal control over financial reporting was for the limited purpose described in the first paragraph of this section and was not designed to identify all deficiencies in internal control that might be deficiencies, significant deficiencies, or material weaknesses. We did not identify any deficiencies in internal control over financial reporting that we consider to be material weaknesses, as defined above. 1112- 1314152 32 A member firm of Ernst & Young Global Limited JExNSrsYOUNG Compliance and Other Matters As part of obtaining reasonable assurance about whether the Sheriff's special - purpose financial statements are free of material misstatement, we performed tests of its compliance with certain provisions of laws, regulations, contracts and grant agreements, noncompliance with which could have a direct and material effect on the determination of special - purpose financial statement amounts. However, providing an opinion on compliance with those provisions was not an objective of our audit, and accordingly, we do not express such an opinion. The results of our tests disclosed no instances of noncompliance or other matters that are required to be reported under Government Auditing Standards. We noted certain matters that we reported to management of the Sheriff in a separate letter dated December 22, 2011. This report is intended solely for the information and use of the Sheriff, management, others within the entity, the Board of County Commissioners of Collier County, Florida, and the Auditor General of the State of Florida and is not intended to be and should not be used by anyone other than these specified parties. December 22, 2011 1112 - 1314152 -f U 7 UP A member firm of Ernst 8 Young Global Limited 33 I 1,11,1 1 I I I I (I ( =� ERNST & YOUNG Ernst &Young LLP Suite 500 I 5100 Town Center Circle Boca Raton, Florida 33486 Tel: +1 561 955 8000 Fax: +1 561 955 8200 www.ey.com Report on Agreed -Upon Procedures Applied to Investigative Funds Honorable Kevin Rambosk, Sheriff Collier County, Florida We have performed the procedures enumerated below, which were agreed to by management of the Collier County, Florida, Sheriff (the Sheriff), solely to assist you in evaluating the procedures and policies as defined by the Sheriff over its investigative funds for the year ended September 30, 2011. The Sheriff's management is responsible for the Sheriff's compliance with those procedures and policies. This agreed -upon procedures engagement was conducted in accordance with attestation standards established by the American Institute of Certified Public Accountants. The sufficiency of these procedures is solely the responsibility of the party specified in this report. Consequently, we make no representation regarding the sufficiency of the procedures described below either for the purpose for which this report has been requested or for any other purpose. The procedures we performed and our findings are summarized as follows: We randomly selected 25 investigative fund disbursements during the fiscal year ended September 30, 2011 (the population sampled from included transactions from October 1, 2010 through August 10, 2011) and performed the following procedures with respect to the Sheriff's policies and procedures over investigative funds. We obtained the "Disbursement for Investigation" form, noting that the form was properly completed and authorized by appropriate personnel. We obtained the "Purchase of Evidence/Information Voucher," noting that the form was properly completed to reflect the expenses incurred within the investigation procedures, that the investigative expenditures were properly supported, and that the use of funds was for authorized purposes. No exceptions were noted. 1112- 1314152 34 A member firm of Ernst & Young Global Limited JEkNST &YOUNG We noted that the unused funds returned, if applicable, were properly deposited per review of the corresponding deposit and bank statement detail and noted that the amount deposited agreed to the amount returned per the "Receipt for Funds Received" form detail. We were not engaged to and did not conduct an examination, the objective of which would be the expression of an opinion on compliance. Accordingly, we do not express such an opinion. Had we performed additional procedures, other matters might have come to our attention that would have been reported to you. This report is intended solely for the information and use of the management of the Sheriff and is not intended to be and should not be used by anyone other than this specified party. December 22, 2011 1112- 1314152 35 A member firm of Ernst 8 Young Global limited I ���III�I�IIIIIIfI�litt, / ERN YOUNG Ernst & Young LLP _ I 111, I 11 ST & Suite 500 III !!! 5100 Town Center Circle I Boca Raton, Florida 33486 Tel: +1 561 955 8000 Fax: +1 561 955 8200 www.ey.com Management Letter Honorable Kevin Rambosk, Sheriff Collier County, Florida We have audited the special - purpose financial statements of each major fund and the aggregate remaining fund information of the Collier County, Florida, Sheriff (the Sheriff) as of and for the year ended September 30, 2011, and have issued our report thereon dated December 22, 2011. We conducted our audit in accordance with auditing standards generally accepted in the United States and the standards applicable to financial audits contained in Government Auditing Standards, issued by the Comptroller General of the United States. Additionally, our audit was conducted in accordance with the provisions of Chapter 10.550, Rules of the Auditor General, which govern the conduct of local governmental audits performed in the state of Florida and require that certain items be addressed in this letter. We have also issued our report dated December 22, 2011, on internal control over financial reporting and on compliance and other matters based on an audit of special - purpose financial statements performed in accordance with Government Auditing Standards. Disclosures in that report should be considered in conjunction with this management letter. We have the following suggestions for improvement in accounting procedures and controls. Current Year Findings and Recommendations None reported. Prior Year Findings and Recommendations None reported. 1112 - 1314152 A member firm of Ernst & Young Global Limited 36 JERNST &YOUNG Other Required Communications No matters of noncompliance with Section 218.415, Florida Statutes, regarding the investment of public funds were identified within the scope of our audit. The results of our audit disclosed no violations of laws, regulations, or contractual provisions or abuse; no improper or illegal expenditures; and no control deficiencies that are not significant deficiencies other than the internal control recommendations included above. The Sheriff was established by the Constitution of the State of Florida, Article VIII, Section I(d). This management letter is intended solely for the information and use of the Sheriff, management, the Board of County Commissioners of Collier County, Florida, and the Auditor General of the State of Florida and is not intended to be and should not be used by anyone other than these specified parties. 16� f "7 U December 22, 2011 11 12- 1314152 37 A member firm of Ernst 8 Young Global limited Ernst Ist & Yom ig LLP Assurance I Tax I Transactions I Advisory About Ernst & Young F.f I "t & Yo two is rI (flobal W,)[1d"%r,Id,, m4 V,1101""Irld wl unvmwf inq cornmitment to For & i ol v I tWv "'t 'UK i i,j if jjj' '(j III �f� f if t I. �t ")I, :t to f"t i 1 y flh"; LLB ll' 11w, SPECIAL - PURPOSE FINANCIAL STATEMENTS AND OTHER REPORTS Collier County, Florida Supervisor of Elections Year Ended September 3 0, 2011 With Report of Independent Certified Public Accountants Er nst R Young LLP °J ERNST & YOUNG Collier County, Florida Supervisor of Elections Special - Purpose Financial Statements and Other Reports Year Ended September 30, 2011 Contents Report of Independent Certified Public Accountants ........................................ ..............................1 Special - Purpose Financial Statements Special - Purpose Balance Sheet .......................................................................... ..............................3 Special - Purpose Statement of Revenues, Expenditures, and Changes in Fund Balance .................4 Special - Purpose Statement of Revenues, Expenditures, and Changes in Fund Balance — Budget and Actual — General Fund ................................................ ..............................5 Notes to Special - Purpose Financial Statements ................................................. ..............................6 Other Reports Report of Independent Certified Public Accountants on Internal Control Over Financial Reporting and on Compliance and Other Matters Based on an Audit of the Special - Purpose Financial Statements Performed in Accordance With Government Auditing Standards .................................................................... .............................17 ManagementLetter ........................................................................................... .............................19 1112- 1315575 lll�rl�ttr.. =1 ERNST &YOUNG Sute 500 5100 I I I t I 5100 Town Center Circle (I Boca Raton, Florida 33486 Tel: +1 561 955 8000 Fax: +1 561 955 8200 www.ey.com Report of Independent Certified Public Accountants The Honorable Jennifer J. Edwards, Supervisor of Elections Collier County, Florida We have audited the accompanying special - purpose financial statements of each major fund of the Collier County, Florida Supervisor of Elections (the Supervisor of Elections), as of and for the year ended September 30, 2011 as listed in the table of contents. These financial statements are the responsibility of the Supervisor of Elections' management. Our responsibility is to express opinions on these financial statements based on our audit. We conducted our audit in accordance with auditing standards generally accepted in the United States and the standards applicable to financial audits contained in Government Auditing Standards, issued by the Comptroller General of the United States. Those standards require that we plan and perform the audit to obtain reasonable assurance about whether the financial statements are free of material misstatement. We were not engaged to perform an audit of the Supervisor of Elections' internal control over financial reporting. Our audit included consideration of internal control over financial reporting as a basis for designing audit procedures that are appropriate in the circumstances, but not for the purpose of expressing an opinion on the effectiveness of the Supervisor of Elections' internal control over financial reporting. Accordingly, we express no such opinion. An audit also includes examining, on a test basis, evidence supporting the amounts and disclosures in the special - purpose financial statements, assessing the accounting principles used and significant estimates made by management and evaluating the overall special - purpose financial statement presentation. We believe that our audit provides a reasonable basis for our opinions. As discussed in Note 1, the accompanying special - purpose financial statements referred to above were prepared for the purpose of complying with Section 218.39, Florida Statutes, and Chapter 10.577(3), Rules of the Auditor General for Local Governmental Entity Audits. These special - purpose financial statements are not intended to be a complete presentation of the Supervisor of Elections' financial position and its changes in financial position, where applicable, thereof, for the year then ended in conformity with accounting principles generally accepted in the United States. Additionally, the special - purpose statements present only the Supervisor of Elections and do not purport to, and do not, present fairly the financial position of Collier County, Florida, as of September 30, 2011, and the changes in its financial position, where applicable, for the year then ended, in conformity with accounting principles generally accepted in the United States. 1112- 1315575 1 A member firm of Ernst & Young Global Limited VIIIIllluuuii " " " "" =WERNST & YOUNG In our opinion, the special - purpose financial statements referred to above present fairly, in all material respects, the financial position of each major fund of the Supervisor of Elections as of September 30, 2011, and the changes in financial position thereof and the budgetary comparison for the general fund for the year then ended in conformity with accounting principles generally accepted in the United States. In accordance with Government Auditing Standards, we have also issued our report dated December 19, 2011, on our consideration of the Supervisor of Elections' internal control over financial reporting and on our tests of its compliance with certain provisions of laws, regulations, contracts, and grant agreements and other matters. The purpose of that report is to describe the scope of our testing of internal control over financial reporting and compliance and the results of that testing, and not to provide an opinion on the internal control over financial reporting or on compliance. That report is an integral part of an audit performed in accordance with Government Auditing Standards and should be considered in assessing the results of our audit. This report is intended solely for the information and use of the Supervisor of Elections, management, the Board of County Commissioners of Collier County, Florida, and the Auditor General of the State of Florida, and is not intended to be and should not be used by anyone other than these specified parties. i&� f LO December 19, 2011 1112 - 1315575 2 A member firm of Ernst 8 Young Global Limited Collier County, Florida Supervisor of Elections Special - Purpose Balance Sheet Assets Cash and cash equivalents Due from other funds Total assets Liabilities and fund balance Liabilities: Accounts payable Accrued liabilities Due to Collier County, Florida Board of County Commissioners Due to other funds Deferred revenue Total liabilities Fund balances: Spendable - restricted Unassigned Total fund balances Total liabilities and fund balance See accompanying notes. September 30, 2011 Grant General Special Total Fund Revenue 2011 $ 213,963 $ 89,372 $ 303,335 - 44 44 $ 213,963 $ 89,416 $ 303,379 $ 12,318 $ - $ 12,318 51,642 - 51,642 149,959 - 149,959 44 - 44 74,442 74,442 213,963 74,442 288,405 14,974 14,974 - 14,974 14,974 $ 213,963 $ 89,416 $ 303,379 1112 - 1315575 3 Collier County, Florida Supervisor of Elections Special - Purpose Statement of Revenues, Expenditures and Changes in Fund Balance For the Year Ended September 30, 2011 Revenues: Intergovernmental Interest Total revenues Expenditures: General government: Personal services Operating expenditures Capital outlay Total expenditures Excess of expenditures over revenues Other financing sources (uses): Transfers in: Collier County, Florida Board of County Commissioners appropriations Distribution of excess appropriations: Collier County, Florida Board of County Commissioners Total other financing sources Deficiency of revenues and other financing sources under expenditures Fund balance — October 1, 2010 Fund balance — September 30, 2011 See accompanying notes. Grant General Special Total Fund Revenue 2011 S 66,641 $ 66,641 220 220 66,861 66,861 1,946,355 — 1,946,355 955,174 76,734 1,031,908 36,566 — 36,566 2,938,095 76,734 3,014,829 (2,938,095) (9,873) (2,947,968) 3,082,300 — 3,082,300 (144,205) — (144,205) 2,938,095 — 2,938,095 (9,873) (9,873) 24,847 24,847 S — $ 14,974 S 14,974 1112 - 1315575 4 Collier County, Florida Supervisor of Elections Special - Purpose Statement of Revenues, Expenditures and Changes in Fund Balance — Budget and Actual — General Fund For the Year Ended September 30, 2011 Revenues Expenditures: General government: Personal services Operating Capital outlay Total expenditures Excess of expenditures over revenues Other financing sources (uses): Operating transfers in: Collier County, Florida Board of County Commissioners appropriations Operating transfers out: Distribution of excess appropriations: Collier County, Florida Board of County Commissioners Total other financing sources Excess of revenues and other financing sources over expenditures Fund balance — October 1, 2010 Fund balance — September 30, 2011 See accompanying notes. 1112 - 1315575 Variance With Final Budget Budget Positive Original Final Actual (Negative) $ 2,800 $ 2,800 S — $ (2,800) 1,959,800 1,959,800 1,946,355 13,445 1,112,900 1,087,750 955,174 132,576 12,400 37,550 36,566 984 3,085,100 3,085,100 2,938,095 147,005 (3,082,300) (3,082,300) (2,938,095) 144,205 3,082,300 3,082,300 3,082,300 - - - (144,205) (144,205) 3,082,300 3,082,300 2,938,095 (144,205) S — $ — S — $ — Collier County, Florida Supervisor of Elections Notes to Special - Purpose Financial Statements September 30, 2011 1. Summary of Significant Accounting Policies and Practices Reporting Entity The Collier County, Florida Supervisor of Elections (Supervisor of Elections) is an elected constitutional officer as provided for by the Constitution of the State of Florida. Pursuant to Chapter 129, Florida Statutes, the Supervisor of Elections' budget is submitted to the Collier County, Florida Board of County Commissioners (Board) for approval. The financial statements presented include the general fund and grant special revenue fund of the Supervisor of Elections' office. The accompanying financial statements were prepared for the purpose of complying with Section 218.39, Florida Statutes, and Section 10.557(3), Rules of the Auditor General for Local Governmental Entity Audits. Section 10.556(4), Rules of the Auditor General for Local Governmental Entity Audits, requires the Collier County, Florida Supervisor of Elections financial statements to only present fund financial statements. Accordingly, due to the omission of government -wide financial statements and related disclosures, including a management's discussion and analysis, these financial statements do not constitute a complete presentation of the financial position of the Collier County, Florida Supervisor of Elections as of September 30, 2011, and the changes in its financial position for the year then ended, in conformity with Governmental Accounting Standards Board (GASB) Statement No. 34, Basic Financial Statements — and Management's Discussion and Analysis —_for State and Local Governments, but otherwise constitute financial statements prepared in conformity with accounting principles generally accepted in the United States of America. As a result of the budgetary oversight by the Board and financial dependency on the Board, the financial activities of the Supervisor of Elections are included in the Collier County, Florida Comprehensive Annual Financial Report. Transfers are provided by appropriations from the Board pursuant to law. Estimated receipts and budgeted general fund balances must equal appropriations. The Supervisor of Elections is required to refund to the Board all excess appropriations annually; therefore, no unappropriated general fund balance is carried forward. 1112- 1315575 6 Collier County, Florida Supervisor of Elections Notes to Special- Purpose Financial Statements (continued) 1. Summary of Significant Accounting Policies and Practices (continued) Measurement Focus, Basis of Accounting, and Basis of Presentation Fund financial statements report detailed information about the Supervisor of Elections. The focus of governmental fund financial statements is on a major fund rather than reporting by type. Each major fund is reported in a separate column. Governmental Funds Governmental funds are accounted for using the flow of current financial resources measurement focus. Only current assets and current liabilities, generally, are included on the balance sheet. Operating statements for this fund present increases (i.e., revenues and other financing sources) and decreases (i.e., expenditures and other financing uses) in net current assets. The Supervisor of Elections has the following major governmental funds: General Fund — The general fund is used to account for the general operations of the Supervisor of Elections, and includes all revenues and expenditures which are not accounted for in another fund. Grant Special Revenue Fund — The grants fund is used to account for the activities of voter education and poll worker training grants from the State of Florida. The modified accrual basis of accounting is used by governmental funds. Under the modified accrual basis of accounting, revenues are recognized when susceptible to accrual (i.e., when they become measurable and available to finance liabilities of the current fiscal year). For this purpose, the Supervisor of Elections considers revenues to be available if they are collected within 60 days after year end. Expenditures are recorded when the related fund liability is incurred, except for compensated absences, which are recognized as expenditures to the extent they have matured. The appropriations from the Board are the primary source of funds considered to be susceptible to accrual. Intergovernmental revenues are recognized when eligibility requirements are met and related amounts are available from the grantor. 1112 - 1315575 7 Collier County, Florida Supervisor of Elections Notes to Special - Purpose Financial Statements (continued) 1. Summary of Significant Accounting Policies Practices (continued) Interest income and other revenues are recognized as they are earned and become measurable and available to pay liabilities of the current period. Florida Statutes provide that the amount by which revenues and transfers exceed annual expenditures be remitted to the Board immediately following the fiscal year for which the funding was provided or following the fiscal year during which other revenues were recognized. The amount of this distribution is recorded as a liability and as another financing use in the accompanying financial statements. Capital outlays expended in general fund operations are capitalized in the basic financial statements of Collier County, Florida rather than in the governmental funds of the Supervisor of Elections. Cash Equivalents Cash equivalents are defined as highly liquid investments with original maturities of three months or less. Cash equivalents in the Local Government Surplus Funds Trust Fund are administered by the State Board of Administration (SBA), a 2a -7 like investment pool. Shares of the investment pool are based on the pool's share price, which approximates fair value. At September 30, 2011, the Supervisor of Elections had no amounts on deposit in the SBA. Compensated Absences All full -time employees of the Supervisor of Elections are allowed to accumulate an unlimited number of hours of unused sick time and up to 440 hours of unused vacation leave. Effective October 1, 2007, the vacation leave limit was increased to 480 hours, with Supervisor approval. Upon termination, employees receive 100% of allowable accumulated vacation hours and a percentage of unused sick leave, depending on years of service. Vacation time and sick leave are included in operating costs of the general fund when the payments are made to employees. The Supervisor of Elections does not, nor is legally required to accumulate financial resources for these unmatured obligations. Accordingly, the liability for compensated absences is not reported in the general fund, but rather is reported in the basic financial statements of Collier County, Florida. 1112 - 1315575 8 Collier County, Florida Supervisor of Elections Notes to Special - Purpose Financial Statements (continued) 1. Summary of Significant Accounting Policies and Practices (continued) Use of Estimates The preparation of the financial statements requires management of the Supervisor of Elections to make a number of estimates and assumptions relating to the reporting of assets and liabilities and the disclosure of contingent assets and liabilities at the date of the financial statements and the reported amounts of revenues and expenditures during the period. Actual results could differ from those estimates. New Fund Balance Reporting and Governmental Fund -Type Definitions The Supervisor of Elections adopted GASB Statement No. 54, Fund Balance Reporting and Governmental Fund -Type Definitions (GASB Statement No. 54) effective October 1, 2010. This GASB statement clarifies governmental fund balance classification and fund -type definitions. Fund balances are reported in classifications based on whether the amounts are spendable or non - spendable. Spendable amounts are further classified as restricted, committed, assigned or unassigned based on the extent to which there are external and/or internal constraints in how fund balance amounts may be spent. Non - spendable fund balances include amounts that cannot be spent because they are not in spendable form or are legally or contractually required to be maintained intact. At September 30, 2011, the Supervisor of Elections does not have any non - spendable fund balances. Spendable fund balances are classified based on a hierarchy of the Supervisor of Elections ability to control the spending of these fund balances and are reported in the following categories: restricted, committed, assigned and unassigned. The Supervisor of Elections' fund balances for the Grant Special Revenue Fund fall into this category. The adoption of GASB Statement No. 54 did not have an impact on the Supervisor of Elections' general fund financial statements at September 30, 2011 since the Supervisor of Elections does not maintain fund balances in the general fund. Fund balances maintained in the grant special revenue fund are restricted pursuant to specific grant agreements, and have been presented in the fund financial statements in accordance with GASB Statement No. 54. 1112- 1315575 9 Collier County, Florida Supervisor of Elections Notes to Special - Purpose Financial Statements (continued) 2. Budgetary Process Florida Statutes govern the preparation, adoption and administration of the Supervisor of Elections' annual budget. The Supervisor of Elections submits a budget for the general fund to the Board for approval. The budget is prepared on a basis consistent with accounting principles generally accepted in the United States of America. The annual budget serves as the legal authorization for expenditures. Any subsequent amendments to the Supervisor's total budget must be approved by the Board. Expenditures may not legally exceed appropriations at the fund level. Appropriations lapse at year end. Budgetary control is maintained at the departmental major object expenditure level. Budgetary changes within major object expenditure categories are made at the discretion of the Supervisor of Elections. The Supervisor does not budget for the grant special revenue fund as it is funded by State grants and is governed by those documents. The original budget is the first complete appropriated budget. The final budget is the original budget adjusted by all reserves, transfers, allocations, supplemental appropriations and other legally authorized changes applicable to the fiscal year, whenever legally authorized. 3. Cash and Cash Equivalents At September 30, 2011, the carrying value of the Supervisor of Elections' cash and cash equivalents was as follows: Carrying Credit Type Value Rating Cash on hand $ 200 N/A Demand deposits 303,135 N/A Total cash and cash equivalents $ 303,335 Custodial Credit Risk At September 30, 2011, the Supervisor of Elections' deposits were entirely covered by federal depository insurance or by collateral pledged with the State Treasurer pursuant to Chapter 280, Florida Statutes. Under this chapter, in the event of default by a participating financial institution (a qualified public depository), all participating institutions are obligated to reimburse the governmental entity for the loss. 1112 - 1315575 10 Collier County, Florida Supervisor of Elections Notes to Special - Purpose Financial Statements (continued) 3. Cash and Cash Equivalents (continued) Credit Risk The Supervisor of Elections' policy is to follow the guidance in Section 219.075, Florida Statutes, regarding the deposit of funds received and the investment of surplus funds. Sections 219.075 and 218.415, Florida Statutes, authorize the Supervisor of Elections to invest in the Local Government Surplus Funds Trust Fund or any intergovernmental investment pool authorized pursuant to the Florida Interlocal Cooperation Act; Securities and Exchange Commission registered money market funds with the highest credit quality rating from a nationally recognized rating agency; direct obligations of the United States Treasury; federal agencies and instrumentalities or interest - bearing time deposits or savings accounts in banks organized under the laws of the United States and doing business and situated in the State of Florida, savings and loan associations which are under state supervision, or in federal savings and loan associations located in the State of Florida and organized under federal law and federal supervision, provided that any such deposits are secured by collateral as may be prescribed by law. Interest Rate Risk The Supervisor of Elections has no specific investment policy regarding interest rate risk. 4. Capital Assets Capital assets used by the Supervisor of Elections are reported in the basic financial statements of Collier County, Florida rather than in the governmental funds of the Supervisor of Elections. Upon acquisition, such assets are recorded as expenditures in the general fund of the Supervisor of Elections, and are capitalized at cost in the basic financial statements of the Board. Capital assets are valued at historical cost or estimated historical cost if actual historical cost is not available. Donated capital assets are valued at their estimated fair value on the date received. The Supervisor of Elections maintains custodial responsibility for the capital assets used by the office. No depreciation expense has been provided on capital assets in these financial statements. However, depreciation expense is recorded in the basic financial statements of Collier County, Florida. 1112- 1315575 11 Collier County, Florida Supervisor of Elections Notes to Special - Purpose Financial Statements (continued) 5. Long -Term Liabilities The following is summary of changes in long -term liabilities which are reported in the basic financial statements of Collier County, Florida: October 1, September 30, 2010 Increase Retirement 2011 Accrued compensated absences $ 231,956 $ 86,638 $ 131,949 $ 186,645 Of these liabilities, approximately $130,652 is expected to be paid during the fiscal year ending September 30, 2011. These long -term liabilities are not reported in the financial statements of the Supervisor of Elections since they have not matured. 6. Employee Retirement Plans Substantially all full -time employees of the Supervisor of Elections filling regularly established positions are eligible to participate in the State of Florida Retirement System (System), a cost - sharing multiple - employer defined benefit plan administered by the State of Florida, Division of Retirement. The System is a defined benefit plan for all state, and participating county, district school board, community college and university employees (Pension Plan). The System also offers eligible employees participation in an alternative defined contribution plan (Investment Plan). The Supervisor of Elections participates in the Elected State Officers' Class. The plan is administered by the State of Florida. Contribution rates are established statewide for all participating governmental units. Accordingly, the actuarial information and related disclosures attributable to the Supervisor of Elections' employees are not determinable. Employees enrolled in the plan prior to July 1, 2011 who retire at or after age 62 with 6 years of credited service, or with 30 years of service regardless of age, are entitled to a retirement benefit, payable monthly for life, equal to 1.60% for regular employees, 2.00% for senior management and 3.00% for county elected officials for each year of credited service times the final average compensation. Employees enrolled on or after July 1, 2011 who retire at or after age 65 with 8 years of credited service or 33 years of service regardless of age, are entitled to the retirement benefits as outlined above. Final average compensation is the employee's average of the five highest fiscal years of salary earned during credited service for those enrolled prior to July 1, 2011 and the eight highest fiscal years of salary for those hired on or after July 1, 2011. 1112 - 1315575 12 Collier County, Florida Supervisor of Elections Notes to Special - Purpose Financial Statements (continued) 6. Employee Retirement Plans (continued) Vested employees may retire before age 62 and receive benefits that are reduced 5.00% for each year prior to normal retirement age (65 years of age if hired on or after July 1, 2011). Employees participating in the Investment Plan are vested after one year of service with no age requirement. The System also provides death and disability benefits. Benefits are established by Chapter 121, Florida Statutes, and Chapter 22B, Florida Administrative Code. The Deferred Retirement Option Program (DROP) is a program that provides an alternative method for payment of retirement benefits for a specified and limited period for members of the System, effective July 1, 1998. Under this program, the employee may participate as of their normal retirement date and have their benefits accumulate in the Florida Retirement System Trust Fund, earning interest, while continuing to work for a System employer. Employees enrolled in DROP prior to July 1, 2011 earn interest on accumulated benefits in the Trust Fund at 6.50 %; those enrolling on or after July 1, 2011 earn interest at 1.30 %. The participation in the program does not change conditions of employment. When the DROP period ends, maximum of 60 months, employment must be terminated. At the time of termination of employment, the employee will receive payment of the accumulated DROP benefits, and begin receiving their monthly retirement benefit (in the same amount determined at retirement, plus annual cost -of- living increases). Investment Plan members are not eligible to participate in the DROP program, but Pension Plan members are eligible to roll their DROP lump sum into the Investment Plan as one of the distribution methods under the Pension Plan. The System publishes an annual report that provides ten -year historical trend information about progress made in accumulating sufficient assets to pay benefits when due. This report may be obtained by writing to the Division of Retirement Research Education and Policy Section 1317 Winewood Boulevard, Building 8, Tallahassee, Florida 32399 -1560, or by calling (877) 377 -1737, or accessing their Internet site at www.dms.MyFlorida.com. The Supervisor of Elections is required to contribute an actuarially determined rate. Rates from October 1, 2010 through June 30, 2011 were 18.64% for county elected officials, 14.57% for senior management, 10.77% for regular employees and 12.25% for DROP employees based on covered payroll. The current rates, effective July 1, 2011, are 11.14% for county elected officials, 6.27% for senior management, 4.91% for regular employees and 4.42% for DROP employees based on covered payroll. In addition, as of July 1, 2011, employee contributions of 3.00% are required of all Pension Plan and Investment Plan members, except for those in DROP. 1112- 1315575 13 Collier County, Florida Supervisor of Elections Notes to Special - Purpose Financial Statements (continued) 6. Employee Retirement Plans (continued) The contribution requirements of the Supervisor of Elections are established and may be amended by the State of Florida. The Supervisor of Elections' employer contributions to the plan for the years ended September 30, 2011, 2010 and 2009, were $125,995, $135,823 and $130,784, respectively, equal to the required contributions for each year. 7. Other Postemployment Healthcare Benefits (OPEB) Plan The County reports its obligations for OPEB pursuant to GASB Statement No. 45, Accounting and Financial Reporting by Employers for Postemployment Benefits Other Than Pensions. Plan Description. The Supervisor of Elections participates in a group health care plan that covers eligible retirees, and their dependents, of the Board of County Commissioners and all Constitutional Officers with the exception of the Sheriff. The Board administers the plan and establishes the benefits. The healthcare plan does not issue a stand -alone financial report, however additional actuarial information regarding the plan as a whole is disclosed in the notes to the financial statements of Collier County, Florida. Under Florida Statutes, retirees originally hired prior to July 1, 2011 are eligible to participate in the active medical plan by paying the active rate if they have attained age 62 and have 6 years of service or have at least 30 years of service. Employees hired on or after July 1, 2011 are eligible to participate in the active medical plan by paying the active rate if they have attained age 65 and have 8 years of service or have at least 33 years of service. Employees eligible for a reduced benefit under the Florida Retirement System prior to age 62 (65 years of age if hired on or after July 1, 2011) are also eligible to participate in the medical plan. The Supervisor of Elections provides no subsidy to the retiree, or their dependents, for group health care. Funding Policy. The contribution requirements of the plan members and the employers are established and may be amended by the County. The plans are financed by the participating agencies on a pay as you go basis through the County's self insurance internal service fund. Participating agencies contribute an additional amount per each active employee to fund retiree health care. The Supervisor of Elections had an actuarial accrued liability of $6,255 as of September 30, 2011. 1112- 1315575 14 Collier County, Florida Supervisor of Elections Notes to Special - Purpose Financial Statements (continued) 7. Other Postemployment Healthcare Benefits (OPEB) Plan (continued) The annual other postemployment benefit cost is calculated based on the annual required contribution of the employer (ARC), an amount actuarially determined in accordance with GASB Statement 45. The ARC represents a level of funding that, if paid by on an ongoing basis, is projected to cover normal cost each year and amortize any unfunded actuarial liabilities over a period not to exceed thirty years. An actuarial valuation on the plan as a whole was performed in November 2011. The notes to the financial statements of the County disclose additional information regarding the other post employment benefit plan as a whole. 8. Related -Party Transactions For the year ended September 30, 2011, the Board provided funding for the Supervisor of Elections that amounted to 3,082,300. At September 30, 2011, the Supervisor of Elections had a payable due to the Board of $149,959 comprised as follows: Distribution of excess appropriations $ 144,205 Distribution of interest earnings 1,177 Amounts due for various services 4,577 Total due to Board of County Commissioners $ 149,959 9. Risk Management Collier County, Florida (the County) is exposed to various risks of loss including, but not limited to, general liability, health and life, property and casualty, auto and physical damage and workers' compensation. The County is substantially self - insured and accounts for and finances its risk of uninsured losses through an internal service fund. All liabilities associated with these self - insured risks are reported in the basic financial statements of the County. During the year ended September 30, 2011, the Supervisor was charged $265,533 by the County for participation in the risk management program. The County provides coverage for up to $500,000 per claim for workers' compensation, and has purchased outside excess coverage for up to the statutory limit for each injury or illness. The County also provides coverage for up to $100,000 per person /$200,000 per occurrence for auto and other liability claims, and has purchased outside excess coverage for up to $1,000,000 per claim. Negligence claims in excess of the statutory limits set in Section 768.20, Florida Statutes, 1112 - 1315575 15 Collier County, Florida Supervisor of Elections Notes to Special- Purpose Financial Statements (continued) 9. Risk Management (continued) which provide for limited sovereign immunity of $100,000 per person/$200,000 per occurrence can only be recovered through an act of the State Legislature. The County also provides coverage for up to $100,000 per person/$200,000 per occurrence for public official's errors and omissions claims and has purchased outside excess coverage for up to $5,000,000 per claim. There have been no significant reductions in insurance coverage in the last year. Settled claims have not exceeded the insurance provided by third party carriers in any of the last three years. The County is also self - insured for health claims covering all of its employees and their eligible dependents. The County retains the first $275,000 in losses per calendar year per covered member and purchases excess coverage with no maximum lifetime limit. As required by Section 112.081, Florida Statutes, retirees and their eligible dependents are provided the same health care coverage as is offered to active employees at the same premium cost (borne by the retiree) applicable to active employees. An actuarial valuation is performed each year to estimate the amounts needed to pay prior and future claims and to establish reserves. 10. Contingencies Grant funds received by the Supervisor of Elections are subject to audit by grantor agencies. Audits of these grants may result in disallowed costs, which may constitute a liability of the office of the Supervisor of Elections. In the opinion of management, disallowed costs, if any, would not have a significant impact on the financial position of the Supervisor of Elections. 1112 - 1315575 16 Other Reports 1112 - 1315575 JERNST &YOUNG Ernst & Young LLP Suite 500 5100 Town Center Circle Boca Raton, Florida 33486 Tel: +1 561 955 8000 Fax: +1 561 955 8200 www.ey.com Report of Independent Certified Public Accountants on Internal Control Over Financial Reporting and on Compliance and Other Matters Based on an Audit of the Special- Purpose Financial Statements Performed in Accordance With Government Auditing Standards The Honorable Jennifer J. Edwards, Supervisor of Elections Collier County, Florida We have audited the special - purpose financial statements of each major fund of the Collier County, Florida Supervisor of Elections (the Supervisor of Elections) as of and for the year ended September 30, 2011, and have issued our report thereon dated December 19, 2011, which describes that such special - purpose financial statements have been prepared for the purpose of complying with Section 218.39, Florida Statutes, and Chapter 10.557(3), Rules of the Auditor General for Local Governmental Entity Audits. We conducted our audit in accordance with auditing standards generally accepted in the United States and the standards applicable to financial audits contained in Government Auditing Standards, issued by the Comptroller General of the United States. Internal control over financial reporting In planning and performing our audit, we considered the Supervisor of Elections' internal control over financial reporting as a basis for designing our auditing procedures for the purpose of expressing our opinion on the special - purpose financial statements, but not for the purpose of expressing an opinion on the effectiveness of the Supervisor of Elections' internal control over financial reporting. Accordingly, we do not express an opinion on the effectiveness of the Supervisor of Elections' internal control over financial reporting. A deficiency in internal control exists when the design or operation of a control does not allow management or employees, in the normal course of performing their assigned functions, to prevent, or detect and correct misstatements on a timely basis. A material weakness is a deficiency, or combination of deficiencies, in internal control, such that there is a reasonable possibility that a material misstatement of the entity's financial statements will not be prevented, or detected and corrected on a timely basis. Our consideration of internal control over financial reporting was for the limited purpose described in the first paragraph of this section and was not designed to identify all deficiencies in internal control that might be deficiencies, significant deficiencies or material weaknesses. We did not identify any deficiencies in internal control over financial reporting that we consider to be material weaknesses, as defined above. 1112 - 1315575 17 A member firm of Ernst & Young Global Limited IN ERN IIII�I�I ST &YOUNG I I I Compliance and other matters As part of obtaining reasonable assurance about whether the Supervisor of Elections' special - purpose financial statements are free of material misstatement, we performed tests of its compliance with certain provisions of laws, regulations, contracts and grant agreements, noncompliance with which could have a direct and material effect on the determination of special - purpose financial statement amounts. However, providing an opinion on compliance with those provisions was not an objective of our audit and, accordingly, we do not express such an opinion. The results of our tests disclosed no instances of noncompliance or other matters that are required to be reported under Government Auditing Standards. We noted certain matters that we reported to management of the Supervisor of Elections in a separate letter dated December 19, 2011. This report is intended solely for the information and use of the Supervisor of Elections, management, the Board of County Commissioners of Collier County, Florida, and the Auditor General of the State of Florida, and is not intended to be and should not be used by anyone other than these specified parties. fgtirw� f UP 19, 2011 1112- 1315575 18 A member firm of Ernst 8 Young Global Limited III iiiiiiiiiiiiiiiiiiiiiilljllllllllllllI I I =f ERNST & YOUNG Management Letter Honorable Jennifer J. Edwards, Supervisor of Elections Collier County, Florida Ernst & Young LLP Suite 500 5100 Town Center Circle Boca Raton, Florida 33486 Tel: +1561 955 8000 Fax: +1561955 8200 www.ey.com' We have audited the special - purpose financial statements of each major fund of the Collier County, Florida Supervisor of Elections (the Supervisor) as of and for the year ended September 30, 2011, and have issued our report thereon dated December 19, 2011. We conducted our audit in accordance with auditing standards generally accepted in the United States and the standards applicable to financial audits contained in Government Auditing Standards, issued by the Comptroller General of the United States. Additionally, our audit was conducted in accordance with the provisions of Chapter 10.550, Rules of the Auditor General, which govern the conduct of local governmental audits performed in the state of Florida and require that certain items be addressed in this letter. We have also issued our report dated December 19, 2011 on internal control over financial reporting and on compliance and other matters based on an audit of special - purpose financial statements performed in accordance with Government Auditing Standards. Disclosures in that report should be considered in conjunction with this management letter. We have the following suggestions for improvement in accounting procedures and controls. Current Year Findings and Recommendations 2011 -01 Elected Official & Employee Expense Reimbursements Observation The Supervisor of Elections (Supervisor) and the employees of the office submit expense reports for any expenses incurred in conjunction with any travel undertaken in the normal course of business. The Supervisor has elected to follow the per diem expense reimbursement amounts and policies set by the United States General Services Administration (GSA). During our audit, we noted that the per diem amounts reimbursed to the Supervisor and employees were calculated and submitted for reimbursement incorrectly, whereby the total expense reimbursements for all employees for the year were less than the allowable amount. Additionally, we note that certain of the original reports reviewed in our testing lacked certain documentation as to the appropriate business purpose. 1112 - 1315575 19 A member firm of Ernst & Young Global Limited JERNST &YOUNG Recommendation We suggest that the Supervisor of Elections perform a review of all expense reports prepared by the employees and signoff as to the reports' accuracy, appropriate business purpose, and ensure that the related documentation is attached. Management's response: Management concurs with Ernst & Young's recommendations. The Supervisor of Elections' Office has implemented procedures to ensure that each expense report is reviewed as to the report's accuracy, appropriate business purpose, compliance with policies, and that the related documentation is attached. This review by the Supervisor of Elections is evidenced by her signoff on the expense reports. Prior Year Findings and Recommendations There were no findings or recommendations made in the prior year financial audit. Other Required Communications No matters of noncompliance with Section 218.415, Florida Statutes, regarding the investment of public funds were identified within the scope of our audit. The results of our audit disclosed no violations of laws, rules, regulations or contractual provisions or abuse, no improper or illegal expenditures, and no control deficiencies. The Supervisor of Elections was established by the Constitution of the State of Florida, Article VIII, Section 1(d). This management letter is intended solely for the information and use of the Supervisor of Elections, management, the Board of County Commissioners of Collier County, Florida, and the Auditor General of the State of Florida, and is not intended to be and should not be used by anyone other than these specified parties. December 19, 2011 1112 - 1315575 O 7 UP A member firm of Ernst 8 Young Global Limited 20 L1,11st & yomm LLP Assurance I Tax I Transactions I Advisory About Ernst & Young A q ly i,y SPECIAL- PURPOSE FINANCIAL STATEMENTS Collier County, Florida Tax Collector Years Ended September 30, 2011 and 2010 With Report of Independent Certified Public Accountants Ernst & Young LLP =� ERNST & YOUNG Collier County, Florida Tax Collector Special - Purpose Financial Statements Years Ended September 30, 2011 and 2010 Contents Report of Independent Certified Public Accountants ........................................ ..............................1 Special - Purpose Financial Statements Special - Purpose Balance Sheets — General Fund .............................................. ..............................3 Special - Purpose Statements of Revenues, Expenditures, and Changes in Fund Balance— General Fund .................................................................................. ..............................4 Special - Purpose Statement of Revenues, Expenditures, and Changes in Fund Balance — Budget and Actual — General Fund — Budgetary Basis ................. ..............................5 Special - Purpose Statements of Fiduciary Assets and Liabilities — Agency Funds ..........................6 Notes to Special- Purpose Financial Statements ................................................. ..............................7 Report of Independent Certified Public Accountants on Internal Control Over Financial Reporting and on Compliance and Other Matters Based on an Audit of Special - Purpose Financial Statements Performed in Accordance with Government AuditingStandards ........................................................................................ .............................20 ManagementLetter ........................................................................................... .............................22 1112- 1315667 I����I����IIIIIIIIIIIIIIIII���1111111" " " JERNST &YOUNG Ernst & Young LLP Suite 500 5100 Town Center Circle Boca Raton, Florida 33486 Tel: +1 561 955 8000 Fax: +1 561 555 8200 www.ey.com' Report of Independent Certified Public Accountants Honorable Lamy H. Ray, Tax Collector Collier County, Florida We have audited the accompanying special - purpose financial statements of the general fund and the aggregate remaining fund information of the Collier County, Florida Tax Collector (the Tax Collector), as of and for the years ended September 30, 2011 and 2010, as listed in the table of contents. These special - purpose financial statements are the responsibility of the Tax Collector's management. Our responsibility is to express opinions on these special - purpose financial statements based on our audits. We conducted our audits in accordance with auditing standards generally accepted in the United States and the standards applicable to financial audits contained in Government Auditing Standards, issued by the Comptroller General of the United States. Those standards require that we plan and perform the audit to obtain reasonable assurance about whether the special - purpose financial statements are free of material misstatement. We were not engaged to perform an audit of the Tax Collector's internal control over financial reporting. Our audits included consideration of internal control over financial reporting as a basis for designing audit procedures that are appropriate in the circumstances, but not for the purpose of expressing an opinion on the effectiveness of the Tax Collector's internal control over financial reporting. Accordingly, we express no such opinion. An audit also includes examining, on a test basis, evidence supporting the amounts and disclosures in the special - purpose financial statements, assessing the accounting principles used and significant estimates made by management, as well as evaluating the overall special - purpose financial statement presentation. We believe that our audits provide a reasonable basis for our opinions. As discussed in Note 1, the accompanying special - purpose financial statements referred to above were prepared for the purpose of complying with Section 218.39, Florida Statutes, and Chapter 10.557(3), Rules of the Auditor General for Local Governmental Entity Audits. These special - purpose financial statements are not intended to be a complete presentation of the Tax Collector's financial position and its changes in financial position, where applicable, therefore, for the years then ended, in conformity with accounting principles generally accepted in the United States. Additionally, the special - purpose statements present only the Tax Collector and do not purport to, and do not, present fairly the financial position of Collier County, Florida, as of September 30, 2011 and 2010, and the changes in its financial position, where applicable, for the years then ended, in conformity with accounting principles generally accepted in the United States. 1112- 1315667 1 A member firm of Ernst & Young Global Limited JEeNSr &YouNc In our opinion, the special - purpose financial statements referred to above present fairly, in all material respects, the respective financial position of the general fund and the aggregate remaining fund information of the Tax Collector as of September 30, 2011 and 2010, and the respective changes in financial position, thereof for the years then ended, and the budgetary comparison for the general fund for the year ended September 30, 2011 in conformity with accounting principles generally accepted in the United States. In accordance with Government Auditing Standards, we have also issued our report dated December 19, 2011, on our consideration of the Tax Collector's internal control over financial reporting and on our tests of its compliance with certain provisions of laws, regulations, contracts, and grant agreements and other matters. The purpose of that report is to describe the scope of our testing of internal control over financial reporting and compliance and the results of that testing, and not to provide an opinion on the internal control over financial reporting or on compliance. That report is an integral part of an audit performed in accordance with Government Auditing Standards and should be considered in assessing the results of our audit. This report is intended solely for the information and use of the Tax Collector, management, the Board of County Commissioners of Collier County, Florida, and the Auditor General of the State of Florida, and is not intended to be and should not be used by anyone other than these specified parties. �iiVi�� f UP 19, 2011 1112- 1315667 2 A member firm of Ernst 8 Young Global Limited Collier County, Florida Tax Collector Special - Purpose Balance Sheets — General Fund September 30 2011 2010 Assets Cash and cash equivalents $ 7,509,504 $ 8,916,768 Due from other funds 50,437 48,581 Prepaid rent 20,995 20,367 Security deposit 4,628 4,628 Total assets $ 7,585,564 $ 8,990,344 Liabilities and fund balance Liabilities: Accounts payable $ 9,027 $ 11,348 Due to Collier County, Florida Board of County Commissioners 6,692,537 7,935,116 Due to other governmental agencies 884,000 1,043,880 Total liabilities 7,585,564 8,990,344 Fund balance — — Total liabilities and fund balance $ 7,585,564 $ 8,990,344 See accompanying notes. 1112 - 1315667 3 Collier County, Florida Tax Collector Special - Purpose Statements of Revenues, Expenditures, and Changes in Fund Balance — General Fund Revenues: Commissions and fees Miscellaneous Total revenues Expenditures: General government: Personal services Operating Capital outlay Distribution of excess commissions and fees to other governmental agencies Total expenditures Excess of revenues over expenditures Other financing uses: Distribution of excess commissions and fees to Collier County, Florida Board of County Commissioners Total other financing uses Excess of revenues over expenditures and other financing uses Fund balance, beginning of year Fund balance, end of year See accompanying notes. Year Ended September 30, 2011 2010 $ 18,092,412 $ 19,792,647 297,709 456,531 18,390,121 20,249,178 9,095,954 9,467,219 1,679,341 1,753,251 38,289 49,712 884,000 1,043,880 11,697,584 12,314,062 6,692,537 7,935,116 (6,692,537) (7,935,116) (6,692,537) (7,935,116) 1112 - 1315667 4 Collier County, Florida Tax Collector Special - Purpose Statement of Revenues, Expenditures, and Changes in Fund Balance — Budget and Actual — General Fund (Budgetary Basis) Year Ended September 30, 2011 Variance With Final Budget Budget Positive Original Final Actual (Negative) Revenues: Commissions and fees S 18,872,054 $ 18,092,412 $18,092,412 $ — Miscellaneous 424,500 297,709 297,709 — Total revenues 19,296,554 18,390,121 18,390,121 — Expenditures: General government: Personal services 9,592,600 9,095,954 9,095,954 — Operating 2,106,353 1,679,341 1,679,341 — Capital outlay 38,371 38,289 38,289 — Total expenditures 11,737,324 10,813,584 10,813,584 — Excess of revenues over expenditures 7,559,230 7,576,537 7,576,537 — Other financing uses: Distribution of excess commissions and fees to Collier County, Florida Board of County Commissioners (6,803,307) (6,692,537) (6,692,537) — Distribution of excess commissions and fees to other governmental agencies (755,923) (884,000) (884,000) — Total other financing uses (7,559,230) (7,576,537) (7,576,537) — Excess of revenues over expenditures and other financing uses Fund balance, beginning of year Fund balance, end of year $ — $ _ $ _ $ _ See accompanying notes. 1112- 1315667 5 Collier County, Florida Tax Collector Special - Purpose Statements of Fiduciary Assets and Liabilities — Agency Funds September 30 2011 2010 Assets Cash and cash equivalents $ 5,443,691 $ 6,584,222 Accounts receivable 8,436 10,572 Due from other funds -- 5,402 Total assets $ 5,452,127 $ 6,600,196 Liabilities Due to other funds $ 50,437 $ 53,983 Due to Collier County, Florida Board of County Commissioners 785,320 744,528 Due to other governmental agencies 4,473,378 4,300,060 Due to individuals and businesses 142,992 1,501,625 Total liabilities $ 5,452,127 $ 6,600,196 See accompanying notes. 1112 - 1315667 6 Collier County, Florida Tax Collector Notes to Special - Purpose Financial Statements September 30, 2011 1. Summary of Significant Accounting Policies Reporting Entity The Collier County, Florida Tax Collector (Tax Collector) is an elected constitutional officer as provided for by the Constitution of the State of Florida. Pursuant to Chapter 195.087, Florida Statutes, the Tax Collector's budget is submitted to the Florida Department of Revenue for approval, and a copy is forwarded to the Collier County, Florida Board of County Commissioners (Board). The special - purpose financial statements presented include the general fund and agency funds of the Tax Collector's office. The accompanying special - purpose financial statements were prepared for the purpose of complying with Section 218.39, Florida Statutes, and Section 10.557(3), Rules of the Auditor General for Local Governmental Entity Audits. Section 10.556(4), Rules of the Auditor General for Local Governmental Entity Audits, requires the Collier County, Florida Tax Collector to only present fund financial statements. Accordingly, due to the omission of government -wide financial statements and related disclosures, including a management's discussion and analysis, these special - purpose financial statements do not constitute a complete presentation of the financial position of the Collier County, Florida Tax Collector as of September 30, 2011 and 2010, and the changes in its financial position for the years then ended, in conformity with Governmental Accounting Standards Board (GASB) Statement No. 34, Basic Financial Statements — and Management's Discussion and Analysis —for State and Local Governments, but otherwise constitute special - purpose financial statements prepared in conformity with U.S. generally accepted accounting principles (GAAP). The financial activities of the Tax Collector, as a constitutional officer, are included in the Collier County, Florida Comprehensive Annual Financial Report. Measurement Focus, Basis of Accounting, and Basis of Presentation These special - purpose fund financial statements report detailed information about the Tax Collector. The focus of governmental fund financial statements is on major funds rather than reporting funds by type. Each major fund is reported in a separate column. 1112- 1315667 7 Collier County, Florida Tax Collector Notes to Special - Purpose Financial Statements (continued) 1. Summary of Significant Accounting Policies (continued) Governmental Funds Governmental funds are accounted for using the flow of current financial resources measurement focus. Only current assets and current liabilities, generally, are included on the special - purpose balance sheets. Operating statements for these funds present increases (i.e., revenues and other financing sources) and decreases (i.e., expenditures and other financing uses) in net current assets. The Tax Collector's only governmental fund is the general fund. The general fund is used to account for the general operations of the Tax Collector and includes all transactions not accounted for in another fund. The modified accrual basis of accounting is used by governmental funds. Under the modified accrual basis of accounting, revenues are recognized when susceptible to accrual (i.e., when they become measurable and available to finance current liabilities of the fiscal year). For this purpose, the Tax Collector considers revenues to be available if they are collected within 60 days after the end of the current period. Expenditures are recorded when the related fund liability is incurred, except for certain compensated absences, which are recognized as expenditures to the extent they have matured. Interest income and other revenue are recognized as they are earned and become measurable and available to pay liabilities of the current period. Substantially all of the Tax Collector's revenue is received from taxing authorities. These monies are virtually unrestricted and are revocable only for failure to comply with prescribed compliance requirements. These resources are reflected as revenue at the time of receipt; earlier if the "susceptible to accrual" criteria are met. Florida Statutes provide that the amount by which revenues exceed annual expenditures be remitted to each governmental agency or the Board immediately following the fiscal year for which the funding was provided or following the fiscal year during which other revenue was recognized. Capital outlays expended in the general fund operations are capitalized in the basic financial statements of Collier County, Florida (the County) rather than in the governmental funds of the Tax Collector. 1112 - 1315667 8 Collier County, Florida Tax Collector Notes to Special - Purpose Financial Statements (continued) 1. Summary of Significant Accounting Policies (continued) Fiduciary Funds Agency Funds — Fiduciary funds are used to account for assets held by the Tax Collector in a trustee capacity or as an agent for individuals, private organizations, and other governments. Agency funds are custodial in nature (assets equal liabilities), and do not involve measurement of results of operations or have a measurement focus. Agency funds are accounted for using the accrual basis of accounting. Refund of "Excess Fees" Florida Statutes further provide that the excess of revenues over expenditures held by the Tax Collector be distributed to each governmental agency or the Board in the same proportion as the fees paid by each governmental agency bear to total fee revenues. The amount of this distribution is recorded as a liability and as either an expenditure or other financing use - transfer out, respectively, in the accompanying special - purpose financial statements. Cash and Cash Equivalents Cash and cash equivalents are highly liquid investments with original maturities of three months or less. Compensated Absences All full -time employees of the Tax Collector are allowed to accumulate an unlimited number of hours of unused sick time and up to 240 hours of unused vacation leave. Upon termination, employees receive 100% of allowable accumulated vacation hours and a percentage of unused sick leave, depending on years of service. Vacation and sick leave payments are included in operating costs of the general fund when the payments are made to the employees. The Tax Collector does not, nor is he legally required to, accumulate financial resources for these unmatured obligations. Accordingly, the liability for compensated absences is not reported in the general fund, but rather is reported in the basic financial statements of Collier County, Florida. 1112- 1315667 9 Collier County, Florida Tax Collector Notes to Special- Purpose Financial Statements (continued) 1. Summary of Significant Accounting Policies (continued) Property Taxes Property taxes in Collier County are levied by the Board and other taxing authorities. The millage levies are determined on the basis of estimates of revenue needs and the total taxable valuations within the jurisdiction of the Board and other taxing authorities. No aggregate ad valorem tax millage in excess of 10 mills on the dollar can be levied by the Board against property in the County as specified in Florida Statutes Section 200.071. Each year the total taxable property valuation is established by the Collier County, Florida Property Appraiser, and the list of property assessments is submitted to the State Department of Revenue for approval. Taxes, assessed as of December 1 of each year, are due and payable on November 1 of each year or as soon thereafter as the assessment roll is opened for collection. Pursuant to Florida law, all owners of property have the responsibility of ascertaining the amount due and paying it before April 1 of the year following the year in which the tax was assessed. Chapter 197, Florida Statutes, governs property tax collections as follows: Current Taxes All property taxes become due and payable on November 1, and are delinquent on April 1 of the following year. Discounts are allowed for early payment of 4% in November; 3% in December; 2% in January; and I% for payment in February. Unpaid Taxes — Sale of Tax Certificates The Tax Collector advertises, as required by Florida Statutes, and sells tax certificates on all real property for unpaid taxes. The taxes assessed on the property are struck off the tax roll to the purchaser of the tax certificate. Certificates not sold are struck off to the County. The Tax Collector must receive payment before the certificates are delivered. Any person owning land upon which a tax certificate has been sold may redeem the tax certificate by paying the Tax Collector the face amount of the tax certificate plus interest and other costs. Tart Deeds Two years after the purchase of a tax certificate the owner may file an application for tax deed sale. The County, as a certificate owner, exercises similar procedures. Tax deeds are issued to the highest bidder for the property which is sold at public auction. The Clerk of the Circuit Court administers these sales. 1112 - 1315667 10 Collier County, Florida Tax Collector Notes to Special - Purpose Financial Statements (continued) 1. Summary of Significant Accounting Policies (continued) Use of Estimates The preparation of these special - purpose financial statements requires management of the Tax Collector to make a number of estimates and assumptions relating to the reported amounts of assets and liabilities and the disclosure of contingent assets and liabilities at the date of the financial statements and the reported amounts of revenues and expenditures during the period. Actual results could differ from those estimates. New Fund Balance Reporting and Governmental Fund -Type Definitions The Tax Collector adopted GASB Statement No. 54, Fund Balance Reporting and Governmental Fund -Type Definitions (GASB Statement No. 54) effective October 1, 2010. This GASB statement clarifies governmental fund balance classification and fund -type definitions. Fund balances are reported in classifications based on whether the amounts are spendable or non - spendable. Spendable amounts are further classified as restricted, committed, assigned or unassigned based on the extent to which there are external and /or internal constraints in how fund balance amounts may be spent. The adoption of GASB Statement No. 54 did not have an impact on the Tax Collector's financial statements at September 30, 2011 since the Tax Collector does not maintain fund balances. 2. Budgetary Process Florida Statutes govern the preparation, adoption, and administration of the Tax Collector's annual budget. The Tax Collector submits a budget for the general fund to the Florida Department of Revenue for approval. A copy of the approved budget is provided to the Board. Any subsequent amendments to the Tax Collector's total budget must be approved by the Florida Department of Revenue. The budget for the general fund is prepared on a basis consistent with U.S. generally accepted accounting principles. The annual budget serves as the legal authorization for expenditures. Expenditures may not legally exceed appropriations at the fund level. Appropriations lapse at year end. Budget control is maintained at the departmental major object expenditure level. Budgetary changes within major object expenditure categories are made at the discretion of the Tax Collector. The original budget is the first complete appropriated budget. The final budget is the original budget adjusted by all reserves, transfers, allocations, supplemental appropriations, and other legally authorized changes applicable to the fiscal year, whenever legally authorized. 1112- 1315667 11 Collier County, Florida Tax Collector Notes to Special - Purpose Financial Statements (continued) 2. Budgetary Process (continued) There is a difference between the budgetary basis of accounting and GAAP in the treatment of excess fee distributions to entities outside of the County's reporting entity. On a budgetary basis, distributions of excess fees through this fund are reported as other financing uses. On a GAAP basis, these distributions are reported as expenditures because there is a reduction in the financial resources of the County. 3. Cash and Cash Equivalents At September 30, 2011 and 2010, the carrying value of the Tax Collector's cash and cash equivalents were as follows: 2011 2010 Carrying Carrying Credit Type Value Value Rating Cash on hand $ 43,650 $ 39,370 N/A Demand deposits 12,909,545 15,461,620 NIA Total cash and cash equivalents $ 12,953,195 $ 15,500,990 Such amounts are reported as $7,509,504 and $5,443,691 for 2011 and $8,916,768 and $6,584,222 for 2010 in the general and agency funds, respectively. Custodial Credit Risk At September 30, 2011, the Tax Collector's deposits were entirely covered by federal depository insurance or by collateral pledged with the State Treasurer pursuant to Chapter 280, Florida Statutes. Under this Chapter, in the event of default by a participating financial institution (a qualified public depository), all participating institutions are obligated to reimburse the governmental entity for the loss. Interest Rate Risk The Tax Collector has no specific investment policy regarding interest rate risk. 1112 - 1315667 12 Collier County, Florida Tax Collector Notes to Special - Purpose Financial Statements (continued) 3. Cash and Cash Equivalents (continued) Credit Risk The Tax Collector's policy is to follow the guidance in Section 219.075, Florida Statutes, regarding the deposit of funds received and the investment of surplus funds. Sections 219.075 and 218.415, Florida Statutes, authorize the Tax Collector to invest in Florida PRIME (formerly the Local Government Surplus Funds Trust) or any intergovernmental investment pool authorized pursuant to the Florida Interlocal Cooperation Act; Securities and Exchange Commission registered money market funds with the highest credit quality rating from a nationally recognized rating agency; direct obligations of the United States Treasury; federal agencies and instrumentalities or interest - bearing time deposits or savings accounts in banks organized under the laws of the United States and doing business and situated in the state of Florida, savings and loan associations which are under state supervision, or in federal savings and loan associations located in the state of Florida and organized under federal law and federal supervision, provided that any such deposits are secured by collateral as may be prescribed by law. 4. Capital Assets Capital assets used by the Tax Collector are capitalized in the basic financial statements of Collier County, Florida rather than in the governmental funds of the Tax Collector. Upon acquisition, such assets are recorded as expenditures in the general fund of the Tax Collector, and are capitalized at cost in the basic financial statements of the Collier County, Florida. Capital assets are valued at historical cost or estimated historical cost if actual historical cost is not available. Donated capital assets are valued at their estimated fair value on the date received. The Tax Collector maintains custodial responsibility for the capital assets used by the office. No depreciation expense has been provided on capital assets in these special - purpose financial statements. However, depreciation expense on these assets is recorded in the basic financial statements of Collier County, Florida. 1112- 1315667 13 Collier County, Florida Tax Collector Notes to Special - Purpose Financial Statements (continued) 5. Long -Term Liabilities The following is a summary of changes in long -term liabilities which are reported in the basic financial statements of Collier County, Florida: October 1 September 30 2010 Increase Decrease 2011 Accrued compensated absences $ 1,101,850 $ 469,541 $ 480,269 $ 1,091,122 October 1 September 30 2009 Increase Decrease 2010 Accrued compensated absences $ 1,150,777 $ 466,176 $ 515,103 $ 1,101,850 Of these liabilities, approximately $500,000 is expected to be paid during the fiscal year ending September 30, 2011, which will be included in the operating costs of the general fund when expended. These long -term liabilities are not reported in the special - purpose financial statements of the Tax Collector since they have not matured. 6. Employee Retirement Plans Substantially all full -time employees of the Tax Collector are eligible to participate in the State of Florida Retirement System (System), a cost - sharing multiple - employer defined benefit plan administered by the State of Florida, Division of Retirement. The System is a defined benefit plan for all state, and participating county, district school board, community college and university employees (Pension Plan). The System also offers eligible employees participation in an alternative defined contribution plan (Investment Plan). The Tax Collector participates in the Elected State Officers' Class. The plan is administered by the State of Florida. Contribution rates are established statewide for all participating governmental units. Accordingly, the actuarial information and related disclosures attributable to the Tax Collector's employees are not determinable. Employees enrolled in the plan prior to July 1, 2011 who retire at or after age 62 with 6 years of credited service, or with 30 years of service regardless of age, are entitled to a retirement benefit, payable monthly for life, equal to 1.60% for regular employees, 2% for senior management and 3.00% for county elected officials for each year of credited service times the final average 1112- 1315667 14 Collier County, Florida Tax Collector Notes to Special - Purpose Financial Statements (continued) 6. Employee Retirement Plans (continued) compensation. Employees enrolled on or after July 1, 2011 who retire at or after age 65 with 8 years of credited service or 33 years of service regardless of age, are entitled to the retirement benefits as outlined above. Final average compensation is the employee's average of the five highest fiscal years of salary earned during credited service for those enrolled prior to July 1, 2011 and the eight highest fiscal years of salary for those hired on or after July 1, 2011. Vested employees may retire before age 62 (65 years of age if hired on or after July 1, 2011) and receive benefits that are reduced 5.00% for each year prior to normal retirement age. Employees participating in the Investment Plan are vested after one year of service with no age requirement. The System also provides death and disability benefits. Benefits are established by Chapter 121, Florida Statutes, and Chapter 22B, Florida Administrative Code. The Deferred Retirement Option Program (DROP) is a program that provides an alternative method for payment of retirement benefits for a specified and limited period for members of the System, effective July 1, 1998. Under this program, the employee may participate as of their normal retirement date and have their benefits accumulate in the Florida Retirement System Trust Fund, earning interest, while continuing to work for a System employer. Employees enrolled in DROP prior to July 1, 2011 earn interest on accumulated benefits in the Trust Fund at 6.50 %, those enrolling on or after July 1, 2011 earn interest at 1.30 %. The participation in the program does not change conditions of employment. When the DROP period ends, maximum of 60 months, employment must be terminated. At the time of termination of employment, the employee will receive payment of the accumulated DROP benefits, and begin receiving their monthly retirement benefit (in the same amount determined at retirement, plus annual cost -of- living increases). Investment Plan members are not eligible to participate in the DROP program, but Pension Plan members are eligible to roll their DROP lump sum into the Investment Plan as one of the distribution methods under the Pension Plan. The System publishes an annual report that provides ten -year historical trend information about progress made in accumulating sufficient assets to pay benefits when due. This report may be obtained by writing to the Division of Retirement Research Education and Policy Section 1317 Winewood Boulevard, Building 8, Tallahassee, Florida 32399 -1560, or by calling (877) 377 -1737, or accessing their Internet site at www.dms.MyFlorida.com. The Tax Collector is required to contribute an actuarially determined rate. Rates from October 1, 2010 through June 30, 2011 were 18.64% for county elected officials, 14.57% for senior management, 10.77% for regular employees and 12.25% for DROP employees based on covered 1112- 1315667 15 Collier County, Florida Tax Collector Notes to Special - Purpose Financial Statements (continued) 6. Employee Retirement Plans (continued) payroll. The current rates, effective July 1, 2011, are 11.14% for county elected officials, 6.27% for senior management, 4.91% for regular employees and 4.42% for DROP employees based on covered payroll. In addition, as of July 1, 2011, employee contributions of 3.00% are required of all Pension Plan and Investment Plan members, except for those in DROP. The contribution requirements of the Tax Collector are established and may be amended by the State of Florida. The Tax Collector's employer contributions to the plan for the years ended September 30, 2011, 2010 and 2009, were $574,044, $661,722 and $667,905, respectively, equal to the required contributions for each year. 7. Other Postemployment Healthcare Benefits (OPEB) Plan Plan Description. The Tax Collector participates in a group health care plan that covers eligible retirees, and their dependents, of the Board and all Constitutional Officers with the exception of the Sheriff. The Board administers the plan and establishes the benefits. The healthcare plan does not issue a stand -alone financial report, however additional actuarial information regarding the plan as a whole is disclosed in the notes to the financial statements of Collier County. Under Florida Statutes, retirees originally hired prior to July 1, 2011 are eligible to participate in the active medical plan by paying the active rate if they have attained age 62 and have 6 years of service or have at least 30 years of service. Employees hired on or after July 1, 2011 are eligible to participate in the active medical plan by paying the active rate if they have attained age 65 and have 8 years of service or have at least 33 years of service. Employees eligible for a reduced benefit under the Florida Retirement System prior to age 62 (65 years of age if hired on or after July 1, 2011) are also eligible to participate in the medical plan. In addition, the Tax Collector provides a 100% subsidy for retirees between the ages of 55 and 65 with more than 10 years of service and 800 hours of accumulated sick leave to remit at the time of retirement. Funding Policy. The contribution requirements of the plan members and the employers are established and may be amended by the County. The plans are financed by the participating agencies on a pay as you go basis through the County's self insurance internal service fund. Participating agencies contribute an additional amount per each active employee to fund retiree health care. The Tax Collector's agency had an actuarial accrued liability of $8,261 as of September 30, 2011. 1112 - 1315667 16 Collier County, Florida Tax Collector Notes to Special - Purpose Financial Statements (continued) 7. Other Postemployment Healthcare Benefits (OPEB) Plan (continued) The annual other postemployment benefit cost is calculated based on the annual required contribution of the employer (ARC), an amount actuarially determined in accordance with GASB Statement 45. The ARC represents a level of funding that, if paid by on an ongoing basis, is projected to cover normal cost each year and amortize any unfunded actuarial liabilities over a period not to exceed thirty years. An actuarial valuation on the plan as a whole was performed in November 2011. The notes to the financial statements of the County disclose additional information regarding the other post employment benefit plan as a whole. 8. Related -Party Transactions During the fiscal years ended September 30, 2011 and 2010, the Board paid commissions and fees to the Tax Collector that amounted to $16,244,429 and $17,895,031, respectively. At September 30, 2011 and 2010, the Tax Collector had a payable due to the Board of $7,477,857 and $8,679,644 respectively, comprised as follows: 2011 2010 Distribution of excess commissions and fees $ 6,692,537 $ 7,935,116 Agency funds due to the Board 785,320 744,528 $ 7,477,857 $ 8,679,644 9. Risk Management Collier County, Florida (the County) is exposed to various risks of loss including but not limited to general liability, health and life, property and casualty, auto and physical damage, and workers' compensation. The County is substantially self - insured and accounts for and finances its risk of uninsured losses through an internal service fund. All liabilities associated with these self - insured risks are reported in the basic financial statements of the County. The Tax Collector participates in the County's self- insurance program. During the years ended September 30, 2011 and 2010, the Tax Collector was charged $2,423,426 and $2,251,828, respectively, by the County for participation in the risk management program. The County provides coverage for up to $500,000 per claim for workers' compensation, and has purchased outside excess coverage for up to the statutory limits for each injury or illness. The County also provides coverage for up to $200,000 per claim for auto and other liability 1112- 1315667 17 Collier County, Florida Tax Collector Notes to Special - Purpose Financial Statements (continued) 9. Risk Management (continued) claims, and has purchased outside excess coverage for up to $2 million per claim. Negligence claims in excess of the statutory limits set in Section 768.20, Florida Statutes, which provide for limited sovereign immunity of $100,000/$200,000 per occurrence can only be recovered through an act of the State Legislature. There have been no significant reductions in insurance coverage in the last year. Settled claims have not exceeded the insurance provided by third party carriers in any of the last three years. The County is also self - insured for health claims covering all of its employees and their eligible dependents. The County retains the first $275,000 in losses per calendar year per covered member and purchases excess coverage with no lifetime limit. As required by Section 112.081, Florida Statutes, retirees and their eligible dependents are provided the same health care coverage as is offered to active employees at the same premium cost (borne by the retiree) applicable to active employees. An actuarial valuation is performed each year to estimate the amounts needed to pay prior and future claims and to establish reserves (see Note 7). 10. Commitments and Contingencies Leases The Tax Collector has noncancelable operating leases for certain office facilities that were utilized solely by the Tax Collector for fiscal year 2011. The three current leases include options for 5 year renewals, and contain annual escalation clauses ranging from 3 -5% annually. The following is a schedule of future minimum lease payments under the operating leases: Fiscal year ending September 30: 2012 $ 292,611 2013 305,569 2014 253,942 2015 211,505 2016 160,409 Rental expense for all operating leases in the aggregate was $329,414 and $325,766 for the years ended September 30, 2011 and 2010, respectively. There were no contingent rentals or sublease rentals associated with leases in effect at September 30, 2011 or 2010. 1112 - 1315667 18 Collier County, Florida Tax Collector Notes to Special - Purpose Financial Statements (continued) 10. Commitments and Contingencies (continued) Litigation The Tax Collector is involved as a defendant or plaintiff in certain litigation and claims arising from the ordinary course of operations. In the opinion of the Tax Collector and legal counsel, the range of potential recoveries or liabilities will not materially affect the financial position of the Tax Collector. 1112 - 1315667 19 r N Ernst & Young LLP -� ERNST &Y Ov v Suite 500 I I I I 5100 Town Center Circle Boca Raton, Florida 33486 Tel: +1 561 955 8000 Fax: +1 561 955 8200 www.ey.cbm Report of Independent Certified Public Accountants on Internal Control Over Financial Reporting and on Compliance and Other Matters Based on an Audit. of Special - Purpose Financial Statements Performed in Accordance with Government Auditing Standards Honorable Larry H. Ray, Tax Collector Collier County, Florida We have audited the special - purpose financial statements of the general fund and the aggregate remaining fund information of the Collier County, Florida Tax Collector (the Tax Collector) as of and for the years ended September 30, 2011 and 2010, and have issued our report thereon dated December 19, 2011, which describes that such special - purpose financial statements have been prepared for the purpose of complying with Section 218.39, Florida Statutes, and Chapter 10.577(3), Rules of the Auditor General . for Local Governmental Entity Audits. We conducted our audit in accordance with auditing standards generally accepted in the United States and the standards applicable to financial audits contained in Government Auditing Standards, issued by the Comptroller General of the United States. Internal Control Over Financial Reporting In planning and performing our audit, we considered the Tax Collector's internal control over financial reporting as a basis for designing our auditing procedures for the purpose of expressing our opinion on the special - purpose financial statements, but not for the purpose of expressing an opinion on the effectiveness of the Tax Collector's internal control over financial reporting. Accordingly, we do not express an opinion on the effectiveness of the Tax Collector's internal control over financial reporting. A deficiency in internal control exists when the design or operation of a control does not allow management or employees, in the normal course of performing their assigned functions, to prevent or detect and correct misstatements on a timely basis. A material weakness is a deficiency, or combination of deficiencies, in internal control such that there is a reasonable possibility that a material misstatement of the entity's financial statements will not be prevented, or detected and corrected on a timely basis. Our consideration of internal control over financial reporting was for the limited purpose described in the first paragraph of this section and was not designed to identify all deficiencies in internal control that might be deficiencies, significant deficiencies or material weaknesses. We did not identify any deficiencies in internal control over financial reporting that we consider to be material weaknesses, as defined above. 1112- 1315667 20 A member firm of Ernst & Young Global Limited =W ERN T s &YovNc Compliance and Other Matters As part of obtaining reasonable assurance about whether the Tax Collector's special - purpose financial statements are free of material misstatement, we performed tests of its compliance with certain provisions of laws, regulations, contracts, and grant agreements, noncompliance with which could have a direct and material effect on the determination of special - purpose financial statement amounts. However, providing an opinion on compliance with those provisions was not an objective of our audit and, accordingly, we do not express such an opinion. The results of our tests disclosed no instances of noncompliance or other matters that are required to be reported under Government Auditing Standards. This report is intended solely for the information and use of the Tax Collector, management, others within the entity, the Board of County Commissioners of Collier County, Florida and the Auditor General of the State of Florida, and is not intended to be and should not be used by anyone other than these specified parties. December 19, 2011 1112- 1315667 19�* "7 UP A member firm of Ernst & Young Global Limited 21 ERNST &YOUNG Ernst &YoungLLP I I (III E Suite 500 I I 5100 Town Center Circle I Boca Raton, Florida 33486 Tel: +1 561 955 8000 Fax: +1 561 955 8200 www.ey.com Management Letter Honorable Larry H. Ray, Tax Collector Collier County, Florida We have audited the special - purpose financial statements of the general fund and the aggregate remaining fund information of the Collier County, Florida Tax Collector (the Tax Collector) as of and for the year ended September 30, 2011, and have issued our report thereon dated December 19, 2011. We conducted our audit in accordance with auditing standards generally accepted in the United States and the standards applicable to financial audits contained in Government Auditing Standards, issued by the Comptroller General of the United States. Additionally, our audit was conducted in accordance with the provisions of Chapter 10.550, Rules of the Auditor General, which govern the conduct of local governmental audits performed in the state of Florida and require that certain items be addressed in this letter. We have also issued our report dated December 19, 2011, on internal control over financial reporting and on compliance and other matters based on an audit of special - purpose financial statements performed in accordance with Government Auditing Standards. Disclosures in that report should be considered in conjunction with this management letter. We have the following suggestions for improvement in accounting procedures and controls. Current Year Findings and Recommendations There were no findings or recommendations as a result of our current year audit. Prior Year Findings and Recommendations There were no findings or recommendations made in the prior year financial audit. Other Required Communications No matters of noncompliance with Section 218.415, Florida Statutes, regarding the investment of public funds were identified within the scope of our audit. 1112- 1315667 22 A member firm of Ernst a Young Global Limited =I ERNST & YOUNG The results of our audit disclosed no violations of laws, rules, regulations or contractual provisions or abuse, no improper or illegal expenditures, and no control deficiencies other than the internal control recommendations included above. The Tax Collector was established by the Constitution of the State of Florida, Article VIII, Section 1(d). This management letter is intended solely for the information and use of the Tax Collector, management, the Board of County Commissioners of Collier County, Florida, and the Auditor General of the State of Florida, and is not intended to be and should not be used by anyone other than these specified parties. December 19, 2011 1112- 1315667 �.vr�at-F t7 W A member firm of Ernst & Young Global Limited 23 ht I'St & youl Iq 1-1-P, Assurance I Tax I Transactions I Advisory About Ernst & Young i I 1 1 T '.II I IT t ili THIS PAGE INTENTIONALLY LEFT BLANK