Comprehensive Annual Financial Report - FY2019-2020'-t
C L) C V t L U
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Al
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FINANCIAL REPORT
For Fiscal Year Ended September 30, 2020
City of Clermont, Florida
5
aA
� y r
CLE WONT
Choice of
The
Art Walk
broke
ground in
2020
and the
core,
one -block
segment was completed by the
end of 2020.
This new brick pedestrian walkway
celebrates local artists with a
covered pavilion and an open-air
grassy spacefor vendors to set up
tents.
The Art Walk encourages the
connectivity and flow of visitors
between our Waterfront and our
Downtown shops, restaurants and
breweries.
The Art Walk project is a public -
private partnership between the
Cityof Clermont and the Art Walk
LLC.
CITY OF CLERMONT
FLORIDA
Comprehensive Annual Financial Report
For The Year Ended September 30, 2020
C L E R M 0 N T
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EC
Prepared by:
Finance Department
C L E R M O N T
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G E N C Y
City of Clermont, Florida Community Redevelopment Agency
Table of Contents
Page
Financial Section
Independent Auditor's Report 1
Management's Discussion and Analysis 3
Basic Financial Statements:
Government -Wide Financial Statements:
Statement of Net Position 6
Statement of Activities 7
Fund -Financial Statements:
Balance Sheet- Governmental Funds 8
Statement of Revenues, Expenditures, and Changes in Fund Balance - Governmental Funds 9
Reconciliation of the Statement of Revenues, Expenditures, and Changes in Fund Balances
of Governmental Funds to the Statement of Activities
Statement of Revenues, Expenditures, and Changes in Fund Balance - Budget and Actual -
General Fund 10
Notes to the Financial Statements 11
Other Reports
Independent Auditor's Report on Internal Control Over Financial Reporting and on Compliance and
Other Matters Based on an Audit of Financial Statements Performed in Accordance with
Government Auditing Standards 19
Management Letter 21
Independent Auditor's Report on Compliance with the Requirements of Section 218.415, Florida
Statutes 23
C L E R M O N T
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FINANCIAL SECTION
C L E R M O N T
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McDirmit Davis
I MJ
INDEPENDENT AUDITOR'S REPORT
Honorable Mayor and Council
City of Clermont, Florida Community Redevelopment Agency
934 North Magnolia Avenue, Suite 100
Orlando, Florida 32803
407-843-5406
www.mcdirmitdavis.com
Report on the Financial Statements
We have audited the accompanying financial statements of the governmental activities, and each major fund, of the City of
Clermont, Florida Community Redevelopment Agency (the "CRA'), a component unit of the City of Clermont, as of and for the year
ended September 30, 2020, and the related notes to the financial statements, which collectively comprise the CRA's basic financial
statements as listed in the table of contents.
Management's Responsibility for the Financial Statements
The CRA's management is responsible for the preparation and fair presentation of these financial statements in accordance with
accounting principles generally accepted in the United States of America; this includes the design, implementation, and maintenance
of internal control relevant to the preparation and fair presentation of financial statements that are free from material misstatement,
whether due to fraud or error.
Auditor's Responsibility
Our responsibility is to express opinions on these financial statements based on our audit. We conducted our audit in accordance
with auditing standards generally accepted in the United States of America and the standards applicable to financial audits contained
in Government Auditing Standards, issued by the Comptroller General of the United States. Those standards require that we plan
and perform the audit to obtain reasonable assurance about whether the financial statements are free from material misstatement.
An audit involves performing procedures to obtain audit evidence about the amounts and disclosures in the financial statements. The
procedures selected depend on the auditor's judgment, including the assessment of the risks of material misstatement of the
financial statements, whether due to fraud or error. In making those risk assessments, the auditor considers internal control relevant
to the entity's preparation and fair presentation of the financial statements in order to design audit procedures that are appropriate in
the circumstances, but not for the purpose of expressing an opinion on the effectiveness of the entity's internal control. Accordingly,
we express no such opinion. An audit also includes evaluating the appropriateness of accounting policies used and the
reasonableness of significant accounting estimates made by management, as well as evaluating the overall presentation of the
financial statements.
We believe that the audit evidence we have obtained is sufficient and appropriate to provide a basis for our audit opinions.
Opinions
In our opinion, the financial statements referred to above present fairly, in all material respects, the respective financial position of the
governmental activities, and each major fund, of the City of Clermont, Florida Community Redevelopment Agency, as of September
30, 2020, and the respective changes in financial position, and the respective budgetary comparison for the General Fund, for the
year then ended in accordance with accounting principles generally accepted in the United States of America.
Other Matters
Required Supplementary Information
Accounting principles generally accepted in the United States of America require that the Management's Discussion and Analysis,
on page 3 through 5 be presented to supplement the basic financial statements. Such information, although not a part of the basic
financial statements, is required by the Governmental Accounting Standards Board who considers it to be an essential part of
financial reporting for placing the basic financial statements in an appropriate operational, economic, or historical context. We have
applied certain limited procedures to the required supplementary information in accordance with auditing standards generally
accepted in the United States of America, which consisted of inquiries of management about the methods of preparing the
information and comparing the information for consistency with management's responses to our inquiries, the basic financial
statements, and other knowledge we obtained during our audit of the basic financial statements. We do not express an opinion or
provide any assurance on the information because the limited procedures do not provide us with sufficient evidence to express an
opinion or provide any assurance.
the partner
Page 11
Other Reporting Required by Government Auditing Standards
In accordance with Government Auditing Standards, we have also issued a report dated January 12, 2022, on our consideration of
City of Clermont Community Redevelopment Agency'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 solely to
describe the scope of our testing of internal control over financial reporting and compliance and the results of that testing, and not to
provide an opinion on internal control over financial reporting or on compliance. That report is an integral part of an audit performed
in accordance with Government Auditing Standards in considering City of Clermont Community Redevelopment Agency's internal
control over financial reporting and compliance.
Orlando, FL
January 12, 2022
Page 12
MANAGEMENT'S DISCUSSION AND
ANALYSIS
C L E R M O N T
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City of Clermont, Florida Community Redevelopment Agency
Management's Discussion and Analysis
As management of the City of Clermont, Florida Community Redevelopment Agency (the "CRA") we offer readers of the CRA's
financial statements this narrative overview and analysis of the financial activities of the CRA for the fiscal year ended September 30,
2020.
Financial Highlights
• The assets of the CRA exceeded its liabilities at September 30, 2020 by $471,896 (net position). All of this amount is
restricted for community redevelopment.
• The CRA's total net position decreased by $44,294 (or 8.6%).
• At September 30, 2020, the CRA's governmental funds reported ending fund balances of $471,896. Of this amount
$468,672 is restricted for the purpose of community redevelopment.
Overview of the Financial Statements
This discussion and analysis are intended to serve as an introduction to the CRA's basic financial statements. The CRA's basic
financial statements are comprised of three components: 1) government -wide financial statements, 2) fund financial statements, and
3) notes to the financial statements.
Government -wide financial statements
The government -wide financial statements are designed to provide readers with a broad overview of the CRA's financial position, in
a manner similar to a private -sector business. They include a Statement of Net Position and a Statement of Activities.
The Statement of Net Position presents information on all of the CRA's assets and liabilities and deferred inflows/outflows of
resources, with the difference reported as net position. Over time, increases or decreases in net position may serve as a useful
indicator of whether the financial position of the CRA is improving or deteriorating.
The Statement of Activities presents information showing how the CRA's net position changed during the most recent fiscal year. All
changes in net position are reported as soon as the underlying event giving rise to the change occurs, regardless of the timing of
related cash flows. Thus, revenues and expenses are reported in this statement for some items that will only result in cash flows in
future fiscal periods (e.g., uncollected taxes and earned but unused vacation leave).
The government -wide financial statements distinguish functions of the CRA that are principally supported by taxes and
intergovernmental revenues (governmental activities).
The government -wide financial statements include only the CRA itself (known as the primary government).
Fund financial statements.
A fund is a grouping of related accounts that is used to maintain control over resources that have been segregated for specific
activities or objectives. The CRA, like other state and local governments, uses fund accounting to ensure and demonstrate
compliance with finance -related legal requirements. The general fund of the CRA is categorized as a governmental fund.
Governmental Funds
Governmental funds are used to account for essentially the same functions reported as governmental activities in the government -
wide financial statements. However, unlike the government -wide financial statements, governmental fund financial statements focus
on near -term inflows and outflows of spendable resources, as well as on balances of spendable resources available at the end of the
fiscal year. Such information may be useful in evaluating the CRA's near -term financing requirements.
Because the focus of governmental funds is narrower than that of the government -wide financial statements, it is useful to compare
the information presented for governmental funds with similar information presented for governmental activities in the government -
wide financial statements. By doing so, readers may better understand the long-term impact of the government's near -term financing
decisions. Both the governmental fund balance sheet and the governmental fund statement of revenues, expenditures, and changes
in fund balances provide a reconciliation to facilitate this comparison between governmental funds and governmental activities.
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City of Clermont, Florida Community Redevelopment Agency
Management's Discussion and Analysis
The CRA adopts an annual appropriated budget for the general fund. A budgetary comparison statement has been provided for the
General Fund to demonstrate compliance with the budget.
The basic governmental fund financial statements can be found on pages 8 -10 of this report.
Notes to the Financial Statements.
The notes provide additional information that is essential to a full understanding of the data provided in the government -wide and fund
financial statements. The notes to financial statements can be found on pages 11 -18 of this report.
Government -Wide Financial Analysis
Statement of Net Position
As noted earlier, net position may serve over time as a useful indicator of a government's financial position. In the case of the CRA,
assets exceeded liabilities by $471,896 at the close of the most recent fiscal year. All of the CRA's net position is subject to external
restrictions as to how it may be used.
The following table reflects the condensed statement of net position for the current and prior year. For more detail see the Statement
of Net Position on page 6.
As of September 30,
Assets:
Current and other assets
Capital assets
Total assets
Liabilities:
Long-term liabilities outstanding
Other liabilities
Total liabilities
Net Position:
Net investment in capital assets
Restricted
Unrestricted
Total net position
Governmental Activities
2020 2019
$ 610,508 $ 523,205
610,508 523,205
138,612 7,015
138,612 7,015
471,896 516,190
$ 471,896 $ 516,190
Statement of Activities
The following table reflects the condensed Statement of Activities for the current year and prior year. For more detailed information see
the Statement of Activities on page 7. Note that the government's total net position decreased by $44,294 or 8.6% in fiscal year 2020.
For the previous fiscal year, net position increased by $119,535.
Page 14
City of Clermont, Florida Community Redevelopment Agency
Management's Discussion and Analysis
For the Year Ended September 30,
Governmental
Activities
2019-20
2018-19
Revenues:
Program revenues -
Capital grants and contributions
$ 80,000 $
-
General revenues -
Taxes
383,119
296,596
Intergovernmental
-
-
Investmentincomeand miscellaneous
12,106
12,553
Total revenues
475,225
309,149
Expenses:
Economic environment
519,519
189,614
Total expenses
519,519
189,614
Increase in Net Position
(44,294)
119,535
Net Position - Beginning
516,190
396,655
Net Position - Ending
$ 471,896 $
516,190
Revenues increased by $166,076 from the previous year and total expenses increased $329,905. The increased revenues were
primarily caused by increased capital grants and property values and the increase in expenses was caused by additional capital
outlay expenditures related to the Art Walk project.
Financial Analysis of the CRA's Funds
As noted earlier, the CRA uses fund accounting to ensure and demonstrate compliance with finance -related requirements.
Governmental Funds.
The focus of the CRA's governmental funds is to provide information on near -term inflows, outflows, and balances of spendable
resources. Such information is useful in assessing the CRA's financing requirements. In particular, unassigned fund balance may
serve as a useful measure of a government's net resources available for spending at the end of the fiscal year.
As of September 30, 2020, the CRA's governmental fund reported an ending fund balance of $471,896 a decrease of $44,294 in
comparison with the prior year.
General Fund Budgetary Highlights
During the year revenues were higher than budgetary estimates by $87,606, primarily due to grant revenues received.
Expenditures were less than budgetary estimates by $138,993 primarily due to grants not awarded and events not held as a
result of COVID-19.
The original general fund appropriations increased $311,282 due to funding the construction of the Art Walk.
The comparison of budgeted results to actual results for the general fund is shown on page 10.
Requests for Information
This financial report is designed to provide a general overview of the CRA of Clermont's finances for all those with an interest in
the government's finances. Questions concerning any of the information should be addressed to the office of the Finance
Director, City of Clermont, P.O. Box 120219, Clermont, Florida 34712.
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C L E R M O N T
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BASIC FINANCIAL STATEMENTS
C L E R M O N T
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City of Clermont, Florida Community Redevelopment Agency
Statement of Net Position
September 30, 2020
Assets:
Cash and cash equivalents
Investments
Receivables, net
Prepaid costs
Total assets
Liabilities:
Accounts payable and accrued expenses
Total liabilities
Net Position:
Restricted for community redevelopment
Unrestricted
Total net position
Governmental Activities
$ 284,625
322,064
595
3,224
610,508
138,612
138,612
471,896
$ 471,896
The accompanying Notes to Financial Statements are an integral part of this statement. Page 16
City of Clermont, Florida
Statement of Activities
Year Ended September 30, 2020
Functions/Programs:
Governmental Activities:
Economic environment
Total governmental activities
Total primary government
Expenses
Net (Expense) Revenue and
Program Revenue Changes in Net Position
Operating Grants Capital Grants and
and Contributions Contributions Governmental Activities
$ 519,519 $ $ 80,000 $
(439,519)
519,519 80,000
(439,519)
$ 519,519 $ $ 80,000 $
(439,519)
General Revenues:
Taxes
383,119
Miscellaneous and investment income
12,106
Total general revenues
395,225
Change in net position
(44,294)
Net Position - beginning
516,190
Net Position - ending $
471,896
The accompanying Notes to Financial Statements are an integral part of this statement. Page 17
City of Clermont, Florida
Balance Sheet
Governmental Funds
September 30, 2020
Assets:
Cash and cash equivalents
Investments
Receivables, net
Prepaid costs
Total assets
Liabilities:
Accounts payable
Accrued liabilities
Total liabilities
Fund Balances:
Nonspendable
Restricted
Unassigned
Total fund balances
Total liabilities, and fund balances
General
$ 284,625
322,064
595
3,224
$ 610,508
$ 132,486
6,126
138,612
3,224
468,672
471,896
$ 610,508
The accompanying Notes to Financial Statements are an integral part of this statement. Page 18
City of Clermont, Florida
Statement of Revenues, Expenditures and Changes in Fund Balances
Governmental Funds
Year Ended September 30, 2020
Revenues:
Taxes
Intergovernmental revenues
Investment earnings
Miscellaneous
Total revenues
Expenditures:
Current:
Economic environment
Total expenditures
Net Change in Fund Balances
Fund Balances - beginning
Fund Balances - ending
General
$ 383,119
80,000
9,550
2,556
475,225
519,519
519,519
(44,294)
516,190
$ 471,896
The accompanying Notes to Financial Statements are an integral part of this statement. Page 19
City of Clermont, Florida
Statement of Revenues, Expenditures and Changes in Fund Balance - Budget and Actual
General
Year ended September 30, 2020
Revenues:
Taxes
Intergovernmental revenues
Investment earnings
Miscellaneous
Total revenues
Expenditures:
Current:
Economic environment
Total expenditures
Excess (deficiency) of revenues over
expenditures
Fund Balance - beginning
Fund Balance - ending
Variance with
Final Budget -
Actual Amounts, Positive
Budgeted Amounts Budgetary Basis (Negative)
Original Final
$ 334,793 $ 383,119 $ 383,119 $ -
- - 80,000 80,000
4,500 4,500 9,550 5,050
- - 2,556 2,556
339,293 387,619 475,225 87,606
347,230 658,512 519,519 138,993
347,230 658,512 519,519 138,993
(7,937) (270,893) (44,294) 226,599
516,190 516,190 516,190 -
$ 508,253 $ 245,297 $ 471,896 $ 226,599
The accompanying Notes to Financial Statements are an integral part of this statement. Page 110
C L E R M O N T
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NOTES TO FINANCIAL STATEMENTS
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City of Clermont, Florida Community Redevelopment Agency
Notes to Financial Statements
Year Ended September 30, 2020
NOTE 1 SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES
Reporting Entity
The City of Clermont, Florida (the "City") created the Community Redevelopment Agency (CRA) in May of 1997. This is a dependent
taxing district established in accordance with Chapter 163, Part III, Florida Statutes. Notification to affected taxing agency was done in
compliance with Chapter 163.346, Part III, Florida Statutes. The incremental annual increase in tax over the base years will be used to
fund projects designed to enhance and improve the described area. The purpose of the CRA is to carry out the community
redevelopment programs and plans within the area. In 2015, the City expanded the CRA and passed Ordinance No. 2015-77 and
modification of the Community Redevelopment Plan was approved. The CRA is governed by a board of seven- the five members of
the Clermont City Council and two individuals appointed by the City Council.
The CRA's financial statements are prepared in accordance with Generally Accepted Accounting Principles (GAAP). The
governmental Accounting Standards Board (GASB) is responsible for establishing GAAP for state and local governments through its
pronouncements (Statements and Interpretations). The more significant accounting policies established in GAAP and used by the
CRA are discussed below. The financial statements have also been prepared in accordance with GASB Statement 34, Basic Financial
Statements and Management Discussion and Analysis for State and Local Governments.
In evaluating how to define the government, for financial reporting purposes, the CRA has considered all potential component units.
The definition of the reporting entity is based primarily on the notion of financial accountability. A primary government is financially
accountable for the organizations that make up its legal entity. It is also financially accountable for legally separate organizations if its
officials appoint a voting majority of an organization's governing body, and either it is able to impose its will on that organization or
there is a potential for the organization to provide specific financial benefits to, or to impose specific financial burdens on, the primary
government. A primary government may also be financially accountable for governmental organizations that are fiscally dependent on
A primary government has the ability to impose its will on an organization if it can significantly influence the programs, projects or
activities of, or the level of services performed or provided by, the organization. A financial benefit or burden relationship exists if the
primary government (a) is entitled to the organizations' resources; (b) is legally obligated or has otherwise assumed the obligation to
finance the deficits of, or provide financial support to, the organization; or (c) is obligated in some manner for the debt of the
organization. In applying the above criteria, the CRA is a component unit of the City.
Government -Wide and Fund Financial Statements
The government -wide financial statements (i.e., the statement of net position and the statement of activities) report information
on all of the nonfiduciary activities of the CRA. For the most part, the effect of interfund activity has been removed from these
statements. Governmental activities, which normally are supported by taxes and intergovernmental revenues, are reported
separately from business -type activities, which rely to a significant extent on fees and charges for support.
The statement of activities demonstrates the degree to which the direct expenses of a given function or segment is offset by
program revenues. Direct expenses are those that are clearly identifiable with a specific function or segment. Program revenues
include 1) charges to customers or applicants who purchase, use, or directly benefit from goods, services, or privileges provided
by a given function or segment and 2) grants and contributions that are restricted to meeting the operational or capital
requirements of a particular function or segment. Taxes and other items not properly included among program revenues are
reported instead as general revenues.
Measurement Focus, Basis of Accounting, and Financial Statement Presentation
The government -wide financial statements are reported 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. Property taxes are recognized as revenues in the year for which they are levied. Grants and similar
items are recognized as revenue as soon as all eligibility requirements imposed by the provider have been met.
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City of Clermont, Florida Community Redevelopment Agency
Notes to Financial Statements
Year Ended September 30, 2020
NOTE 1 SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES (CONTINUED)
Governmental fund financial statements are reported using the current financial resources measurement focus and the modified
accrual basis of accounting. Revenues are recognized as soon as they are both measurable and available. Revenues are
considered to be available when they are collectible within the current period or soon enough thereafter to pay liabilities of the
current period. For this purpose, the government considers revenues to be available if they are collected within 60 days of the
end of the current fiscal period. Expenditures generally are recorded when a liability is incurred, as under accrual accounting.
However, debt service expenditures, as well as expenditures related to compensated absences and claims and judgments, are
recorded only when payment is due.
Property taxes, franchise taxes, licenses, and interest associated with the current fiscal period are all considered to be
susceptible to accrual and so have been recognized as revenues of the current fiscal period. Only the portion of special
assessments receivable due within the current fiscal period is considered to be susceptible to accrual as revenue of the current
period. All other revenue items are considered to be measurable and available only when cash is received by the CRA.
The government reports the following funds:
The General Fund is the government's primary operating fund and was established as a dependent taxing district. The
incremental annual increase in tax over the base years will be used to fund projects designed to enhance and improve the
described area.
Amounts reported as program revenues include 1) charges to customers or applicants for goods, services, or privileges
provided, 2) operating grants and contributions, and 3) capital grants and contributions, including special assessments. Internally
dedicated resources are reported as general revenues rather than as program revenues. Likewise, general revenues include all
taxes.
When both restricted and unrestricted resources are available for use, it is the government's policy to use restricted resources
first, then unrestricted resources as they are needed.
Assets, Liabilities, Deferred Outflowsllnf lows and Net Position/Fund Balance:
Deposits and Investments
The government's cash and cash equivalents are considered to be cash on hand, demand deposits, and short-term investments
with original maturities of three months or less from the date of acquisition.
Investments of the CRA are reported at fair value and are categorized within the fair value hierarchy established in accordance
with GASB Statement No. 72, Fair Value Measurement and Application. The CRA's investments consist of investments
authorized per their investment policy adopted in accordance with Section 218.415, Florida Statutes.
Receivables and Payables
All receivables are shown net of an allowance for uncollectibles.
The CRA's primary source of revenue is tax -increment funds. This revenue is computed by applying the respective operating tax
rates for the City, County and Lake County Water Authority, multiplied by increased value of property located within the
boundaries of the redevelopment areas of the CRA in excess of the base property value, minus 5%. The City, County and Lake
County Water Authority are required to fund this amount annually without regard to tax collections or other obligations.
Inventories and Prepaid Items
All inventories are valued at cost using the first-in/first-out (FIFO) method. Inventories of governmental funds are recorded as
expenditures when consumed rather than when purchased.
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City of Clermont, Florida Community Redevelopment Agency
Notes to Financial Statements
Year Ended September 30, 2020
NOTE 1 SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES (CONTINUED)
Certain payments to vendors reflect costs applicable to future accounting periods and are recorded as prepaid items in both
government -wide and fund financial statements. These are recorded as expenditures when consumed rather than when
purchased.
Capital Assets
Capital assets, which include property, plant, equipment, intangible and infrastructure assets (e.g., roads, bridges, sidewalks,
and similar items), are reported in the applicable governmental or business -type activities columns in the government -wide
financial statements. Capital assets are defined by the CRA as assets with an initial, individual cost of $1,000 or more and an
estimated useful life in excess of one year. Such assets are recorded at historical cost or estimated historical cost if purchased or
constructed. Donated capital assets are recorded at acquisition value at the date of donation. Any assets purchased with CRA
funds are conveyed to the City for ownership and maintenance. As a result, the CRA does not own any capital assets at
September 30, 2020.
The costs of normal maintenance and repairs that do not add to the value of the asset or materially extend asset lives are not
capitalized.
Long -Term Obligations
In the government -wide financial statements, long-term debt and other long-term obligations are reported as liabilities in the
applicable governmental activities statement of net position.
Deferred Outflows/Inflows of Resources
In addition to assets, the statement of financial position will sometimes report a separate section for deferred outflows of
resources. This separate financial statement element, deferred outflows of resources, represents a consumption of net position
that applies to a future period(s) and so will not be recognized as an outflow of resources (expense/expenditure) until then. The
CRA does not have any item that qualifies for reporting in this category.
In addition to liabilities, the statement of financial position will sometimes report a separate section for deferred inflows of
resources. This separate financial statement element, deferred inflows of resources, represents an acquisition of net position that
applies to a future period(s) and so will not be recognized as an inflow of resources (revenue) until that time. The CRA does not
have any item that qualifies for reporting in this category.
Net Position Flow Assumptions
Sometimes the CRA will fund outlays for a particular purpose from both restricted (e.g., restricted bond or grant proceeds) and
unrestricted resources. In order to calculate the amounts to report as restricted net position and unrestricted net position in the
government -wide statements, a flow assumption must be made about the order in which the resources are considered to be
applied. It is the CRA's policy to consider restricted net position to have been depleted before unrestricted net position is applied.
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City of Clermont, Florida Community Redevelopment Agency
Notes to Financial Statements
Year Ended September 30, 2020
NOTE 1 SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES (CONTINUED)
Fund Balance Flow Assumptions
Sometimes the CRA will fund outlays for a particular purpose from both restricted and unrestricted resources (the total of
committed, assigned, and unassigned fund balance). In order to calculate the amounts to report as restricted, committed,
assigned, and unassigned fund balance in the governmental fund financial statements a flow assumption must be made about
the order in which the resources are considered to be applied. It is the government's policy to consider restricted fund balance to
have been depleted before using any of the components of unrestricted fund balance. Further, when the components of
unrestricted fund balance can be used for the same purpose, committed fund balance is depleted first, followed by assigned fund
balance. Unassigned fund balance is applied last.
Fund Balance Policies
Fund balance of governmental funds is reported in various categories based on the nature of any limitations requiring the use of
resources for specific purposes. The CRA itself can establish limitations on the use of resources through either a commitment
(committed fund balance) or an assignment (assigned fund balance).
The committed fund balance classification includes amounts that can be used only for the specific purposes determined by a
formal action of the CRA's highest level of decision -making authority. The Council is the highest level of decision -making
authority for the CRA that can, by adoption of a resolution prior to the end of the fiscal year, commit fund balance. Once adopted,
the limitation imposed by the resolution remains in place until a similar action is taken (the adoption of another resolution) to
remove or revise the limitation.
Amounts in the assigned fund balance classification are intended to be used by the CRA for specific purposes but do not meet
criteria to be classified as committed. The Council has maintained authority to assign fund balance.
The Council may also assign fund balance as it does when appropriating fund balance to cover a gap between estimated
revenue and appropriations in the subsequent year's appropriated budget. Unlike commitments, assignments generally only exist
temporarily. In other words, an additional action does not normally have to be taken for the removal of an assignment.
Conversely, as discussed above, an additional action is essential to either remove or revise a commitment.
Estimates
The preparation of financial statements in conformity with GAAP requires management to make estimates and assumptions that
affect the reported amounts of assets, liabilities and disclosures of contingent assets and liabilities as of the financial statement
date and the reported amounts of revenues and expenses or expenditures during the reporting period. Actual results could differ
from those estimates.
New GASB Statements Implemented
In fiscal year 2020, the CRA implemented GASB Statement No. 95, Postponement of Effective Dates of Certain Authoritative
Guidance. This statement postpones the effective dates on certain authoritative guidance. There was no effect on beginning balances
of the CRA.
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City of Clermont, Florida Community Redevelopment Agency
Notes to Financial Statements
Year Ended September 30, 2020
NOTE 2 STEWARDSHIP, COMPLIANCE, AND ACCOUNTABILITY
Budgetary Information
The CRA follows these procedures in establishing the budgetary data reflected in the financial statements:
• Prior to the end of the fiscal year, the City Manager submits to the City Council a proposed operating budget for the fiscal
year commencing the following October 1. The operating budget includes proposed expenditures and the means of
financing them.
• Budget workshops are scheduled as needed.
• The general summary of the budget and notice of public hearing is published in the local newspaper.
• Public hearings are conducted to obtain taxpayer comments.
• Prior to October 1, the budgets are legally enacted through passage of a resolution.
• A separate CRA board meeting is also held to approve the budget.
• The City Manager is authorized to transfer budgeted amounts within departments; however, any revisions that alter the total
appropriations of any department must be approved by the City Council.
• The level of classification detail at which expenditures may not legally exceed appropriations is the department level.
• Appropriations lapse at the close of the fiscal year to the extent they have not been expended. Encumbrance accounting is
employed in governmental funds. Encumbrances (e.g., purchase orders and contracts) outstanding at year end are reported
as assigned fund balances and do not constitute expenditures or liabilities because the commitments will be re -appropriated
and honored during the subsequent year.
• Budgets are adopted for the general fund on a basis consistent with generally accepted accounting principles, except as
described below under Budget Basis of Accounting. Budgets are also adopted for the enterprise funds: however, budgetary
comparisons are not presented since they are not required under generally accepted accounting principles.
• The City Council, by Ordinance or Resolution, may make supplemental appropriations in excess of those originally
estimated for the year up to the amount of available revenues. Budgeted amounts presented in the accompanying financial
statements have been adjusted for legally authorized revisions.
Budgetary Basis of Accounting
The CRA includes a portion of the prior year's fund balances represented by unappropriated liquid assets remaining in the fund as
budgeted revenue in the succeeding year. The results of operations on a GAAP basis do not recognize the fund balance allocation as
revenue as it represents prior periods' excess of revenues over expenditures. The CRA does not budget for capital outlay
expenditures and other financing sources related to the acquisition of assets through notes payable.
NOTE 3 CASH AND INVESTMENTS
Deposits
All bank deposits were fully covered by federal depository insurance or by collateral held in banks that are members of the State of
Florida's Collateral Pool as specified under Florida law. Florida Statutes provide for collateral pooling by banks and savings and loans.
This limits local government deposits to "authorized depositories".
Investments
Investments in all fund types are stated at fair value, which is the amount for which an investment could be exchanged in a current
transaction between willing parties, other than in a forced liquidation sale. Fair value is based on quoted market prices. Changes in the
fair value of investments are recognized as revenue and included in investment income.
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City of Clermont, Florida Community Redevelopment Agency
Notes to Financial Statements
Year Ended September 30, 2020
NOTE 3 CASH AND INVESTMENTS (CONTINUED)
The CRA's investment policies are governed by state statute and city ordinance. Authorized investments are:
• The Local Government Surplus Funds Trust (SBA).
• SEC registered money market funds.
• Interest -bearing time deposits or savings accounts in qualified public depositories.
• Direct obligations of the U.S. Treasury.
• Federal agencies and instrumentalities.
• Securities of, or other interests in, any open-end or closed -end management -type investment company or investment trust
registered under the Investment Company Act of 1940.
• Repurchase Agreements.
• Other investments authorized by ordinance.
Investments made by the CRA of Clermont at September 30, 2020 are summarized below.
Weighted Average
Investment Type
Value
Credit Rating
Maturity
Federal Agency Bond $
34,814
AA+
2.48 years
Federal Agency Mortgage -Backed Securities
6,787
AA+
9.13 years
Federal Agency Collateralized Mortgage Obligation
12,627
AA+
3.43 years
US Treasury Notes
46,629
AA+
1.74 years
Supra -National Agency Bond/Note
5,083
AAA
2.33 years
Corporate Note
46,445
BBB+/AA
1.95 years
Asset Backed Security
30,721
AAA/NR
3.3 years
Municipal Bonds
7,236
AAA
2.75 years
FL Palm
131,722
AAAm
N/A
$ 322,064
Credit Risk
The CRA's investment policy limits credit risk by restricting authorized investments to those described above.
Custodial Credit Risk:
In the case of deposits, this is the risk that in the event of a bank failure, the CRA's deposits may not be returned to it. The CRA's
investment policy requires that bank deposits be secured as provided by Chapter 280, Florida Statutes. This law requires local
governments to deposit funds only in financial institutions designated as qualified public depositories by the Chief Financial Officer of
the State of Florida, and creates the Public Deposits Trust Fund, a multiple financial institution pool with the ability to assess its
member financial institutions for collateral shortfalls if a default or insolvency has occurred. At September 30, 2020, all of the CRA's
bank deposits were in qualified public depositories.
For an investment, this is the risk that, in the event of the failure of the counterparty, the government will not be able to recover the
value of its investments or collateral securities that are in the possession of an outside party. At September 30, 2020, none of the
investments listed are exposed to custodial credit risk because their existence is not evidenced by securities that exist in physical or
book entry form.
Concentration of Credit Risk:
The CRA's investment policy requires diversification but does not specify limits on types of investments.
Interest Rate Risk:
The CRA's investment policy does not specifically address interest rate risk, however the general investment policy is to apply the
prudent -person rule: Investments are made as a prudent person would be expected to act, with discretion and intelligence, to seek
reasonable income, preserve capital, and in general, avoid speculative investments. The CRA manages its exposure to declines in fair
values by investing primarily in pooled investments that have a weighted average maturity of less than three months.
Page116
City of Clermont, Florida Community Redevelopment Agency
Notes to Financial Statements
Year Ended September 30, 2020
NOTE 3 CASH AND INVESTMENTS (CONTINUED)
Fair Value
The CRA categorizes its fair value measurements within the fair value hierarchy established by generally accepted accounting
principles. The fair value is the price that would be received to sell an asset, or paid to transfer a liability, in an orderly transaction
between market participants at the measurement date. The hierarchy is based on the valuation inputs used to measure the fair value
of the asset. The CRA uses a market approach in measuring fair value that uses prices and other relevant information generated by
market transactions involving identical or similar assets liabilities, or groups of assets and liabilities.
Assets or liabilities are classified into one of three levels. Level 1 is the most reliable and is based on quoted price for identical
assets, or liabilities, in an active market. Level 2 uses significant other observable inputs when obtaining quoted prices for
identical or similar assets, or liabilities, in markets that are not active. Level 3 is the least reliable, and uses significant
unobservable inputs that uses the best information available under the circumstances, which includes the CRA's own data in
measuring unobservable inputs.
The CRA has the following recurring fair value measurements as of September 30, 2020:
Investments Valued by Fair Value Level
Federal Agency Bond
Federal Agency Collateralized Mortgage Obligation
Federal Agency Mortgage -Backed Securities
US Treasury Notes
Supra -National Agency Bond/Note
Corporate Note
Asset Backed Security
Municipal Bonds
Quoted Prices in
Active Markets for Significant Other
Identical Assets Observable Inputs
(Level1) (Level2)
34,814 $ - $ 34,814
12,627
6,787
46,629
5,083
46,445
30,721
7,236
$ 190,342
46,629
12,627
6,787
5,083
46,445
30,721
7,236
46,629 $ 143,713
NOTE 4 RELATED PARTY TRANSACTIONS
The CRA is a component unit of the City of Clermont, Florida. For the year ended September 30, 2020, the CRA's tax increment
revenues include $159,762 received from the City. In addition, the CRA reimbursed the City for services performed on behalf of the
CRA such as payroll and payroll benefits, paid during the year.
During 2020, the City transferred $2,556 to the CRA to support operations related to COVID-19.
NOTE 5 RISK MANAGEMENT
The CRA is exposed to various risks of loss related to torts; theft of, damage to and destruction of assets; errors and omissions;
and natural disasters for which the CRA carries commercial insurance. The CRA has obtained excess insurance coverage with
varying retentions and limits to further limit exposure to large losses. There have been no significant reductions in insurance
coverage from the prior year and settlements have not exceeded insurance coverage during the past three years.
NOTE 6 COMMITMENTS AND CONTINGENCIES
Litigation
The CRA is engaged in various liability claims incidental to the conduct of its general government operations at September 30,
2020. While the ultimate outcome of the litigation cannot be determined at this time, management believes that any amounts not
covered by insurance, if any, resulting from these lawsuits would not materially affect the financial position of the CRA.
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City of Clermont, Florida Community Redevelopment Agency
Notes to Financial Statements
Year Ended September 30, 2020
NOTE 7 SOURCE OF DEPOSITS AND PURPOSE OF WITHDRAWALS
Pursuant to Florida Statute 163.387, listed below is a summary of the sources and amounts of deposits to, and the purpose and
amounts of withdrawals from the CRA Funds for the fiscal year ended September 30, 2020:
Source of Deposit:
Tax increment $ 383,119
Grants 80,000
Investment income 9,550
Contribution from city 2,556
Total sources $ 475,225
Purpose of Withdrawal:
Capital outlay
Salaries and benefits
Rentals
Professional services
Miscellaneous
Utilities
Insurance
Sponsored events
Repairs and maintenance
Total withdrawals
$ 338,516
54,276
52,541
31,942
17,757
13,705
6,395
3,250
1,137
$ 519,519
Page118
OTHER REPORTS
C L E R M O N T
0MM(JNITY
(DE DEVELOPMENT
G E N C Y
McDirmit Davis
934 North Magnolia Avenue, Suite 100
Orlando, Florida 32803
407-843-5406
www.mcdirmitdavis.com
INDEPENDENT AUDITOR'S REPORT ON INTERNAL CONTROL OVER FINANCIAL REPORTING AND ON COMPLIANCE
AND OTHER MATTERS BASED ON AN AUDIT OF FINANCIAL STATEMENTS PERFORMED IN ACCORDANCE WITH
GOVERNMENT AUDITING STANDARDS
Honorable Mayor and Council
City of Clermont, Florida Community Redevelopment Agency
We have audited, in accordance with auditing standards generally accepted in the United States of America and the standards
applicable to financial audits contained in Government Auditing Standards issued by the Comptroller General of the United
States, the financial statements of the governmental activities, and each major fund of the City of Clermont, Florida Community
Redevelopment Agency (the "CRA"), as of and for the year ended September 30, 2020, and the related notes to the financial
statements, which collectively comprise the CRA's basic financial statements and have issued our report thereon dated January
12, 2022.
Internal Control Over Financial Reporting
In planning and performing our audit of the financial statements, we considered the CRA's internal control over financial reporting
(internal control) as a basis for designing audit procedures that are appropriate in the circumstances for the purpose of
expressing our opinions on the financial statements, but not for the purpose of expressing an opinion on the effectiveness of
CRA's internal control. Accordingly, we do not express an opinion on the effectiveness of the CRA'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 a combination of deficiencies, in internal control, such that there is a reasonable possibility
that a material misstatement of the entity's financial statements will not be prevented, or detected and corrected on a timely
basis. A significant deficiency is a deficiency, or a combination of deficiencies, in internal control that is less severe than a
material weakness, yet important enough to merit attention by those charged with governance.
Our consideration of internal control 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 over financial reporting that might be material
weaknesses or significant deficiencies. Given these limitations, during our audit we did not identify any deficiencies in internal
control over financial reporting that we consider to be material weaknesses. However, material weaknesses may exist that have
not been identified.
Compliance and Other Matters
As part of obtaining reasonable assurance about whether the CRA's financial statements are free from material misstatement,
we performed tests of its compliance with certain provisions of laws, regulations, contracts and grant agreements,
noncompliance with which could have a direct and material effect on the determination of financial statement amounts. However,
providing an opinion on compliance with those provisions was not an objective of our audit and, accordingly, we do not express
such an opinion. The result of our tests disclosed instances of noncompliance, or other matters that are required to be reported
under Government Auditing Standards, and which are described below.
ML20-01 Timely Completion of Annual Audit
Florida Statutes require the annual audit to be submitted no later than nine months after the CRA's fiscal year end. Due to
staffing issues, the audit was not able to be completed in a timely manner. We recommend the CRA implement procedures to
ensure annual audits are completed in a timely manner.
Management Response
Procedures are in place to ensure the completion of the audit in compliance with Florida Statutes.
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CRA's Response to Findings
The CRA's response to the findings identified in our annual audit are included in this report. The CRA's response was not
subjected to the auditing procedures applied in the audit of the financial statements and, accordingly, we express no opinion on
it.
Purpose of this Report
The purpose of this report is solely to describe the scope of our testing of internal control and compliance and the results of that
testing, and not to provide an opinion on the effectiveness of the entity's internal control or on compliance. This report is an
integral part of an audit performed in accordance with Government Auditing Standards in considering the entity's internal control
and compliance. Accordingly, this communication is not suitable for any other purpose.
Orlando, FL
January 12, 2022
Page 120
McDirmit Davis
I MJ
MANAGEMENT LETTER
Honorable Mayor and Council
City of Clermont, Florida Community Redevelopment Agency
934 North Magnolia Avenue, Suite 100
Orlando, Florida 32803
407-843-5406
www.mcdirmitdavis.com
Report on the Financial Statements
We have audited the financial statements of the City of Clermont, Florida Community Redevelopment Agency (the "CRA"), as of
and for the fiscal year ended September 30, 2020, and have issued our report thereon dated January 12, 2022.
Auditor's Responsibility
We conducted our audit in accordance with auditing standards generally accepted in the United States of America; the standards
applicable to financial audits contained in Government Auditing Standards, issued by the Comptroller General of the United
States; and Chapter 10.550, Rules of the Florida Auditor General.
Other Reporting Requirements
We have issued our Independent Auditor's Report on Internal Control over Financial Reporting and on Compliance and Other
Matters Based on an Audit of the Financial Statements Performed in Accordance with Government Auditing Standards; and
Independent Auditor's Report on an examination conducted in accordance with ACIPA Professional Standards, AT-C Section
315, regarding compliance requirements in accordance with Chapter 10.550, Rules of the Auditor General. Disclosures in those
reports and schedule, which are dated January 12, 2022, should be considered in conjunction with this management letter.
Prior Audit Findings
Section 10.554(1)(i.)l ., Rules of the Auditor General, require that we determine whether or not corrective actions have been taken to
address findings and recommendations made in the preceding annual financial audit report. There was no preceding annual
financial audit report.
Official Title and Legal Authority
Section 10.554(1)(i)4., Rules of the Auditor General, requires that the name or official title and legal authority for the primary
government and each component unit of the reporting entity be disclosed in this management letter, unless disclosed in the notes to
the financial statements. This information has been disclosed in the notes to the financial statements.
Financial Condition and Management
Section 10.554(1)(i)5.a. and 10.556(7), Rules of the Auditor General, require us apply appropriate procedures and report the results
of our determination as to whether or not the CRA has met one or more of the conditions described in Section 218.503(1), Florida
Statutes, and identification of the specific condition(s) met. In connection with our audit, we determined that the CRA did not meet
any of the conditions described in Section 218.503(1), Florida Statutes.
Pursuant to Sections 10.554(1)(i)5.b. and 10.556(8), Rules of the Auditor General, we applied financial condition assessment
procedures for the CRA. It is management's responsibility to monitor the CRA'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.
Section 10.554(1)(i)2., Rules of the Auditor General, requires that we communicate any recommendations to improve financial
management. In connection with our audit, we did not have any such recommendations.
the partner
Page 121
Additional Matters
Section 10.554(1)(i)3., Rules of the Auditor General, requires that we address noncompliance with provisions of contracts or grant
agreements, or abuse, that have occurred, or are likely to have occurred, that have an effect on the financial statements that is less
than material but which warrants the attention of those charged with governance. In connection with our audit, we did not have any
such findings.
Purpose of This Letter
Our management letter is intended solely for the information and use of the Legislative Auditing Committee, members of the Florida
Senate and the Florida House of Representatives, the Florida Auditor General, Federal and other granting agencies, the council, and
applicable management, and is not intended to be and should not be used by anyone other than these specified parties.
Orlando, Florida
January 12, 2022
Page 122
934 North Magnolia Avenue, Suite 100
McDirmit Davis Orlando, Florida 32803
407-843-5406
www.mcdirmitdavis.com
mj
INDEPENDENT AUDITOR'S REPORT ON COMPLIANCE WITH
THE REQUIREMENTS OF SECTION 218.415, FLORIDA STATUTES
The Honorable Mayor and City Council
City of Clermont, Florida Community Redevelopment Agency
We have examined City of Clermont, Florida Community Redevelopment Agency's (the CRA) compliance with the requirements of
Section 218.415, Florida Statutes, during the year ended September 30, 2020. Management is responsible for the CRA's compliance
with those requirements. Our responsibility is to express an opinion on the CRA's compliance based on our examination.
Our examination was conducted in accordance with attestation standards established by the American Institute of Certified Public
Accountants and the standards applicable to attestation engagements contained in Government Auditing Standards issued by the
Comptroller General of the United States and, accordingly, included examining, on a test basis, evidence about the CRA's compliance
with those requirements and performing such other procedures as we considered necessary in the circumstances. We believe that our
examination provides a reasonable basis for our opinion. Our examination does not provide a legal determination on the CRA's
compliance with specified requirements.
In our opinion, the CRA complied, in all material respects, with the aforementioned requirements for the year ended September 30,
2020.
Orlando, Florida
January 12, 2022
the partner
Page 123