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Comprehensive Annual Financial Report - 2008-2009 CITY OF CLERMONT, FLORIDA COMPREHENSIVE ANNUAL FINANCIAL REPORT FOR THE YEAR ENDED SEPTEMBER 30, 2009 PREPARED BY FINANCE REGINA M. FRAZIER LACY SMITH-CASTILLO FINANCE MANAGER ACCOUNTANT i CITY OF CLERMONT COMPREHENSIVE ANNUAL FINANCIAL REPORT TABLE OF CONTENTS Year Ended September 30, 2009 Page I. Introductory Section: Table of Contents i Letter of Transmittal iii GFOA Certificate of Achievement ix List of Principal Officials xi Organizational Chart xii II. Financial Section: Independent Auditor’s Report 1 Management’s Discussion and Analysis 3 Basic Financial Statements: Government-Wide Financial Statements: Statement of Net Assets 13 Statement of Activities 14 Fund Financial Statements: Balance Sheet - Governmental Funds 15 Statement of Revenues, Expenditures and Changes in Fund Balances - Governmental Funds 16 Reconciliation of the Statement of Revenues, Expenditures and Changes in Fund Balances of Governmental Funds to the Statement of Activities 17 Statement of Revenues, Expenditures and Changes in Fund Balances - Budget and Actual - General Fund 18 Statement of Revenues, Expenditures and Changes in Fund Balances - Budget and Actual – Community Redevelopment Special Revenue Fund 21 Statement of Net Assets - Proprietary Funds 22 Statement of Revenues, Expenses and Changes in Fund Net Assets - Proprietary Funds 25 Statement of Cash Flows – Proprietary Funds 26 Statement of Fiduciary Net Assets - Fiduciary Funds 28 Statement of Changes in Fiduciary Net Assets - Fiduciary Funds 29 Notes to Financial Statements 31 Required Supplementary Information 57 Other Governmental Funds: Combining Balance Sheet – Other Governmental Funds 60 Combining Statement of Revenues, Expenditures and Changes In Fund Balances - Other Governmental Funds 62 Schedule of Revenues, Expenditures and Changes in Fund Balances – Budget and Actual: Special Revenue Funds 64 Debt Service Fund 69 Capital Project Fund 70 ii CITY OF CLERMONT COMPREHENSIVE ANNUAL FINANCIAL REPORT TABLE OF CONTENTS - Continued Year Ended September 30, 2009 Page II. Financial Section - Continued: Fiduciary Funds: Combining Statement of Fiduciary Net Assets 72 Combining Statement of Changes in Fiduciary Net Assets 73 III. Statistical Section: Net Assets by Component 76 Changes in Net Assets 78 Fund Balances of Governmental Funds 80 Changes in Fund Balances of Governmental Funds 82 Governmental Activities Tax Revenues by Source 84 Assessed Value and Estimated Actual Value of Taxable Property 85 Property Tax Rates – Direct and Overlapping Governments 86 Principal Property Taxpayers 87 Property Tax Levies and Collections 88 Ratios of Outstanding Debt by Type 89 Direct and Overlapping Governmental Activities Debt 90 Pledged-Revenue Coverage 91 Demographic and Economic Statistics 94 Principal Employers 95 Principal Water Customers 96 Principal Sewer Customers 97 Full-time Equivalent City Government Employees by Function 98 Operating Indicators by Function 100 Capital Asset Statistics by Function 102 IV. Other Reports: Report on Compliance and on Internal Control over Financial Reporting Based on an Audit of Financial Statements Performed in Accordance With Government Auditing Standards 105 Affidavit of Impact Fee Compliance 107 Report on Compliance with Requirements Applicable to the State Project and Internal Control Over Compliance 108 Schedule of Expenditures of State Financial Assistance 110 Notes to Schedule of Expenditures of State Financial Assistance 111 Schedule of Findings and Questioned Costs – State Projects 112 Management Letter 113 Status of Prior Year Comments 115 Current Year Comments 117 Response to Management Comments 118 Audit Findings 119 I N T R O D U C T O R Y S E C T I O N CITY OF CLERMONT P.O. BOX 120219 · CLERMONT, FLORIDA 34712-0219 · PHONE: 352-241-7360 · FAX: 352-394-4082 www.CityofClermontFL.com March 31, 2010 To the Honorable Mayor and City Council and Citizens of the City of Clermont, Florida: We are pleased to present the Comprehensive Annual Financial Report (CAFR) of the City of Clermont, Florida, for the fiscal year ended September 30, 2009. State law requires that every general-purpose local government publish within six months of the close of each fiscal year a complete set of audited financial statements. This report is published to fulfill that requirement for the fiscal year ended September 30, 2009. Management assumes full responsibility for the completeness and reliability of the information presented in this report. To provide a reasonable basis for making these representations, management of the City of Clermont has established a comprehensive internal control framework that is designed both to protect the government’s assets from loss, theft, or misuse and to compile sufficient reliable information for the preparation of the City of Clermont’s financial statements in conformity with accounting principles generally accepted in the United States of America (GAAP). Because the cost of internal controls should not outweigh their benefits, the City of Clermont’s comprehensive framework of internal controls has been designed to provide reasonable rather than absolute assurance that the financial statements will be free from material misstatement. As management, we assert that, to the best of our knowledge and belief, this financial report is complete and reliable in all material respects. The City of Clermont’s financial statements have been audited by McDirmit Davis & Company, LLC, a firm of licensed certified public accountants. The goal of the independent audit was to provide reasonable assurance that the financial statements of the City of Clermont for the fiscal year ended September 30, 2009, are free of material misstatement. The independent audit involved 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. The independent auditor concluded, based upon the audit, that there was a reasonable basis for rendering an unqualified opinion that the City of Clermont’s financial statements for the fiscal year ended September 30, 2009, are fairly presented in conformity with accounting principles generally accepted in the United States of America. The independent auditor’s report is presented as the first component of the financial section of this report. Management’s discussion and analysis (MD&A) immediately follows the independent auditor’s report and provides narrative introduction, overview, and analysis of the basic financial statements. The MD&A provides “financial highlights” and interprets the financial reports by analyzing trends and by explaining changes, fluctuations and variances in the financial data. In addition, the MD&A is intended to disclose any known significant events or decisions that affect the financial condition of the City. This letter of iv transmittal is designed to complement the MD&A and should be read in conjunction with it. Profile of the City of Clermont The City was founded in 1884 and incorporated in 1916. The City currently has a land area of 14.43 square miles and population of approximately 24,199. The City is located in south Lake County, approximately twenty-two miles west of the City of Orlando and about twenty-five miles northwest of Walt Disney World. Clermont, known as “The Gem of the Hills”, is truly the crossroads of Florida, at the intersection of State Road 50 that runs east and west across the state and U.S. Highway 27, which runs north and south through the center of the state. Clermont is on a chain of 15 lakes connected by the winding Palatlakaha River in the Ocklawaha Basin of tributaries of the St. Johns River, the only river system in the United States of America that flows north. The lakes offer residents the opportunity for excellent fishing, boating, swimming and other water sports including competitive skiing and wakeboarding offered by world-class instructional schools. The City of Clermont is known for its scenic beauty, relaxed lifestyle, recreational facilities and temperate climate. Residents have a wide variety of housing and property ownership opportunities, including lakefront and lake access property, golf course communities, homes in existing neighborhoods, residential retirement communities and new subdivisions. The City of Clermont Parks and Recreation Department operates 22 parks, 5.7 miles of scenic paved trails, 4 piers measuring a total of 840 feet, 1-612 foot boardwalk, 4 special purpose buildings and a boat ramp. The City of Clermont provides a full range of services as directed by its charter. These include police and fire protection; streets and sidewalk maintenance, planning and development, code enforcement, mosquito control, recreational facilities and programs, cemetery and general administrative functions. The City also provides potable water, wastewater collection and treatment, reclaimed water production and distribution, stormwater treatment, solid waste collection and recycling services. The City operates according to a Council/Manager form of government, with an appointed City Manager, four elected City Council members and an elected Mayor. The governing body has legislative responsibilities including setting policy, passing ordinances, adopting the budget, appointing committees, and hiring the City’s Manager. The City Manager is responsible for carrying out the policies and ordinances of the governing body, for overseeing the day-to-day operations of the government, and for hiring the directors of the various departments. The annual budget serves as the foundation the City of Clermont’s financial planning and control. All departments of the City of Clermont are required to submit requests for appropriations to the City Manager. The City Manager then uses these requests as the starting point for developing a proposed budget. The City Manager then presents this proposed budget to the Council for review. The City Council is required to hold public hearings on the proposed budget and to adopt a final budget by no later than September 30, the close of the City of Clermont’s fiscal year. The appropriated budget is prepared by fund (e.g. general fund), and department (e.g. fire department). The City Manager may make transfers of appropriations within departments; however, any revisions that alter the total appropriations of a department must be approved by City Council. Original v and final amended budget-to-actual comparisons are provided in this report for each individual governmental fund. The General Fund is presented on pages 18-19, the Community Redevelopment Special Revenue fund is presented on page 21 as part of the basic financial statements for the governmental funds. For other governmental funds, these comparisons are presented in the other governmental funds subsection of this report, which starts on page 59. The information presented in the financial statements is perhaps best understood when it is considered from the broader perspective of the specific environment within which the City of Clermont operates. Local economy. The City of Clermont is essentially residential in character and its economy is centered in retail, real estate, personal services and healthcare. At September 30, 2009, Lake County’s unemployment rate was 12.3%. This is an increase of 5.2% over 2008 and is slightly higher than the state’s average of 11.2% and the national average of 9.8%. Educational institutions in Clermont such as Lake-Sumter Community College and the University of Central Florida assist in supplying a skilled labor force. The cost of living for the region is below the national average. There is no personal income tax, either locally or state-wide. Sales tax, currently at 7%, is not charged on food or medicine. One cent of the sales tax charged within the county is limited to $50 per transaction (1% of $5,000). As discussed in the MD&A, this additional penny sales tax must be used for infrastructure including roads, buildings, land, land improvements and certain equipment. The national housing market decline affected Clermont during Fiscal Year 2009 in the form of reduced building permits and impact fee collections. The total of these collections decreased over 5.2% from Fiscal Year 2008. The decrease in these collections is continuing in Fiscal Year 2010. Major initiatives. The following items are capital projects that are currently planned for the City: • The planning/design phase for the expansion of the existing Police Station. The project consists of expanding the existing Police Station and demolishing the building currently occupied by the Lake County Sheriff’s office. The expansion is anticipated to cost $3,000,000 and will be funded from police impact fees. • The planning/design phase for improvements to West Park. The park will be reconstructed from one softball and one baseball field to two baseball fields, pitching/batting cages, bathrooms, concession area and parking. The improvements are anticipated to cost $800,000 and will be funded from infrastructure sales taxes, recreation impact fees and grants. • The planning/design phase for the construction of a pavilion at Waterfront Park. The project will include construction of a pavilion with a performance stage and a building to replace the Highlander Hut. The construction is anticipated to cost $750,000 and will be funded from infrastructure sales taxes and recreation impact fees. vi • The planning/design phase for the replacement of Jenkins Auditorium. The replacement building will be built on vacant City owned property and will include meeting space, kitchen area and office area. The new facility is anticipated to cost $2,000,000 and is proposed to be funded from infrastructure sales taxes. • The planning/design phase of the construction of the West Water Treatment Plant. The plant will include a one million gallon ground storage tank, a sodium hypochlorite feed system for disinfection and a bank of high service pumps to deliver potable water to the distribution system. The construction is anticipated to cost $9,000,000 and will be funded from water utility reserves. Long-term financial planning. The City uses an extensive water and sewer master plan to manage growth in the water and sewer utility systems. The plan outlines water and sewer line size requirements for planned development with rough cost estimates. The plan also has benchmarks for plant expansions and additional well requirements. Slowed building permits and declining home values are being monitored closely since they are directly impacted by the current recession. The recession also affects the growth of impact fees, ad valorem taxes, utility service taxes and franchise fee revenues in future years. Due to these circumstances, the City is actively monitoring all expansion projects and limiting any costs that will require multi-year funding commitments. The Clermont City Council and management through careful short and long range planning and sound management practices are committed to budgeting and managing all resources in the most cost effective manner. Relevant financial policies. The City regularly reviews revenues and expenditures throughout the fiscal year. During the course of the year, if actual revenues are expected to fall short of the budgeted amount, expenditures are reduced to ensure that a shortage of funds or a significant use of fund balance does not occur. The City administers a cash management and investment program that seeks to maximize, in order of priority, the preservation of funds, liquidity and interest earnings over its cash and investments. Cash resources of the individual funds are combined to form a pool of cash and investments. The average cash and investment pool balance during the year (not including pension funds) was $48,614,522 and the average investment earnings rate was 5.15%. Investment income includes the change in the fair value of investments. During the year monies were invested in accordance with the City’s investment policy. Pension fund assets were invested in accordance with the City’s Investment Policy for Retirement Funds. The total pension fund assets at year end were $13,080,119 and the average investment income was 2.2%. Awards and Acknowledgements The Government Finance Officers Association of the United States and Canada (GFOA) awarded a Certificate of Achievement for Excellence in Financial Reporting to the City of Clermont for its comprehensive annual financial report for the fiscal year ended September 30, 2008. This was the twenty-first consecutive year that the City has received 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. xi CITY OF CLERMONT, FLORIDA LIST OF ELECTED AND APPOINTED OFFICIALS SEPTEMBER 30, 2009 ELECTED OFFICIALS Mayor Harold Turville, Jr. Mayor Pro-Tem Keith Mullins Council Member Ray Goodgame Council Member Jack Hogan Council Member Robert Thompson APPOINTED OFFICIALS City Manager Wayne Saunders Assistant City Manager Darren Gray City Attorney Dan Mantzaris Administrative Services Director Joseph Van Zile City Clerk Tracy Ackroyd Engineering Director Tamara Richardson Fire Chief Carle Bishop Planning Director James Hitt Police Chief Stephen Graham Public Services Director Preston Davis Utilities Director James Kinzler xii F I N A N C I A L S E C T I O N 1 2 MANAGEMENT’S DISCUSSION AND ANALYSIS MANAGEMENT’S DISCUSSION AND ANALYSIS As management of the City of Clermont, Florida we offer readers of the City of Clermont’s (the City) financial statements this narrative overview and analysis of the financial activities of the City of Clermont for the fiscal year ended September 30, 2009. We encourage readers to consider the information presented here in conjunction with additional information that we have furnished in our letter of transmittal, which can be found on pages iii through vii of this report. Financial Highlights • The City of Clermont’s assets exceeded its liabilities at September 30, 2009 by $137,143,844 (net assets). Of this amount, $31,409,129 (unrestricted net assets) may be used to meet the City’s ongoing obligations to citizens and creditors. • The City’s total net assets increased by $10,205,980 (or 8%) over the previous fiscal year. • At September 30, 2009, the City of Clermont’s governmental funds reported combined ending fund balances of $20,759,197 a decrease of $743,639 over the previous fiscal year. Of this amount $18,278,423 (unreserved fund balance) is available for spending at the government’s discretion. • The General Fund, the City’s primary operating fund, reported an unreserved fund balance of $10,860,489, which represents 48% of total General Fund expenditures. Overview of the Financial Statements This discussion and analysis are intended to serve as an introduction to the City of Clermont’s basic financial statements. The City’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. This report also contains other supplementary information in addition to the basic financial statements themselves. Government-wide financial statements. The government-wide financial statements are designed to provide readers with a broad overview of the City of Clermont’s financial position, in a manner similar to a private-sector business. They include a Statement of Net Assets and a Statement of Activities. These statements appear on pages 13 and 14 of the report. The Statement of Net Assets presents information on all of the City’s assets and liabilities, with the difference between the two reported as net assets. Over time, increases or decreases in net assets may serve as a useful indicator of whether the financial position of the City is improving or deteriorating. The Statement of Activities presents information showing how the City’s net assets changed during the most recent fiscal year. All changes in net assets 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). Both of the government-wide financial statements distinguish functions of the City of Clermont that are principally supported by taxes and intergovernmental revenues (governmental activities) from other functions that are intended to recover all or a significant portion of their costs through user fees and charges (business-type activities). The governmental activities of the City of Clermont include general government, public safety, physical environment, transportation, economic environment, human services, and culture and recreation. The business-type activities of the City of Clermont include water, sewer, sanitation, and stormwater utilities. 3 The government-wide financial statements include only the City of Clermont itself (known as the primary government) and one blended component unit (The City of Clermont Community Redevelopment Trust Fund). 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 City of Clermont, like other state and local governments, uses fund accounting to ensure and demonstrate compliance with finance-related legal requirements. All of the funds of the City of Clermont can be divided into three categories: governmental funds, proprietary funds and fiduciary funds. 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 City’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. The City of Clermont maintains ten individual governmental funds. Information is presented separately in the governmental fund balance sheet and in the governmental fund statement of revenues, expenditures, and changes in fund balances for the General Fund and the Community Redevelopment Fund, both of which are considered to be major funds. Data from the other eight governmental funds are combined into a single, aggregated presentation. Individual fund data for each of these non-major governmental funds is provided in the form of combining statements elsewhere in this report. The City of Clermont adopts an annual appropriated budget for all of its governmental funds. Budgetary comparison statements have been provided for the General Fund (pages 18-19) and the Community Redevelopment Fund (page 21) to demonstrate compliance with budgets. Other nonmajor funds comparisons can be found beginning on page 64. The basic governmental fund financial statements can be found on pages 15 - 21 of this report. Proprietary funds. The City of Clermont maintains two types of proprietary funds: enterprise and internal service, which can be found on pages 22-27 of this report. Enterprise funds are used to report the same functions presented as business-type activities in the government-wide financial statements. The City of Clermont uses enterprise funds to account for water, sewer, sanitation and stormwater utilities. Internal service funds are an accounting tool used to accumulate and allocate costs internally among various functions. The City utilizes an internal service fund for its health insurance. Because services accounted for in the internal service fund predominately benefit governmental rather than business-type functions, it has been included within the governmental activities in the government-wide financial statements. Proprietary funds provide the same type of information as the government-wide financial statements, only in more detail. The proprietary fund financial statements provide separate information for water, sewer and sanitation which are all considered to be major funds. Data for the Stormwater Fund is also included since it is the only nonmajor fund. 4 Fiduciary funds. Fiduciary funds are used to account for resources held for the benefit of parties outside the government. Fiduciary funds are not reflected in the government-wide financial statements because the resources of those funds are not available to support the City of Clermont’s own programs. The accounting used for fiduciary funds is much like that used for the proprietary funds. The basic fiduciary fund financial statements can be found on pages 28 - 29 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 31 - 56 of this report. Other information. The combining statements referred to earlier in connection with other governmental and proprietary funds are presented immediately following the notes to the financial statements. Combining and individual fund statements and schedules can be found on pages 60 - 70 of this report. Government-Wide Financial Analysis The following is a summary of the City’s net assets for governmental and business-type activities for the current year as compared to the prior year. For more detail see the Statement of Net Assets on page 13. 2008-092007-082008-092007-082008-092007-08 Assets: Current and other assets22,052,573$ 23,365,386$ 30,475,440$ 35,551,637$ 52,528,013$ 58,917,023$ Capital assets 38,470,822 38,254,015 70,782,742 63,171,994 109,253,564 101,426,009 Total assets 60,523,395 61,619,401 101,258,182 98,723,631 161,781,577 160,343,032 Liabilities: Long-term liabilities outstandin5,120,893 11,319,769 16,465,109 16,872,313 21,586,002 28,192,082 Other liabilities 1,330,442 1,932,670 1,721,289 3,280,416 3,051,731 5,213,086 Total liabilities 6,451,335 13,252,439 18,186,398 20,152,729 24,637,733 33,405,168 Net assets: Invested in capital assets, Net of related debt 33,937,745 27,462,150 54,834,359 46,568,955 88,772,104 74,031,105 Restricted 6,525,848 8,958,624 10,436,763 13,898,851 16,962,611 22,857,475 Unrestricted 13,608,467 11,946,188 17,800,662 18,103,096 31,409,129 30,049,284 Total net assets 54,072,060$ 48,366,962$ 83,071,784$ 78,570,902$ 137,143,844$ 126,937,864$ CITY OF CLERMONT’S Net Assets Governmental ActivitiesBusiness-type Activities Total The City’s total net assets at September 30, 2009 were $137,143,844. Of the City’s total net assets $88,772,104 (65%) reflects its investment in capital assets (e.g., land, buildings, improvements, infrastructure and equipment) less any related debt used to acquire those assets that is still outstanding. The City uses these capital assets to provide services to citizens; consequently, these assets are not available for future spending. Although the City of Clermont’s investment in its capital assets is reported net of related debt, it should be noted that the resources needed to repay this debt must be provided from other sources, since the capital assets themselves cannot be used to liquidate these liabilities. An additional portion of the City’s total net assets, $16,962,611 (12%) represents resources that are subject to external restrictions on how they may be used. The remaining balance of the City’s total net assets, $31,409,129 (23%) is unrestricted. These assets may be used at the City’s discretion in meeting its ongoing obligations to citizens and creditors. 5 The City’s net assets increased by $10,205,980 during the current fiscal year. Major components of this increase are discussed in the Governmental and Business-Type Activities sections to follow. Restricted reserves represent the accumulation of impact fee funds for upcoming and ongoing capital projects. Unrestricted reserves represent increases in investment cash in governmental funds. The following is a summary of the City’s governmental and business-type activities for fiscal year 2008-09, including revenues and expenses, with a comparison to the prior year. For more detail see the Statement of Activities on page 14. 2008-092007-082008-092007-082008-092007-08 Revenues: Program revenues - Charges for services3,156,087$ 3,318,136$ 12,925,275$ 13,356,193$ 16,081,362$ 16,674,329$ Operating grants and contributions 921,314 1,047,030 - 700,000 921,314 1,747,030 Capital grants and contributions 3,306,855 7,329,269 2,137,323 1,479,537 5,444,178 8,808,806 General revenues -- - Property Taxes 7,600,966 7,749,126 - - 7,600,966 7,749,126 Franchise Fees 2,151,258 1,912,399 - - 2,151,258 1,912,399 Utility Taxes 2,151,318 1,990,457 - - 2,151,318 1,990,457 Intergovernmental 4,458,162 4,776,028 - - 4,458,162 4,776,028 Investment income and miscellaneous 1,049,971 901,255 1,005,498 1,852,522 2,055,469 2,753,777 Total revenues 24,795,931 29,023,700 16,068,096 17,388,252 40,864,027 46,411,952 Expenses: General government 4,747,256 4,204,200 - - 4,747,256 4,204,200 Public safety 10,775,546 10,329,913 - - 10,775,546 10,329,913 Physical environment 364,023 513,364 - - 364,023 513,364 Transportation 1,163,615 1,544,426 - - 1,163,615 1,544,426 Economic environment 101,567 47,687 - - 101,567 47,687 Human services - 106,890 - - - 106,890 Culture and recreation2,081,715 2,060,547 - - 2,081,715 2,060,547 Interest on long-term debt325,682 459,883 - - 325,682 459,883 Water - - 3,989,838 3,737,133 3,989,838 3,737,133 Sewer - - 4,488,829 4,520,756 4,488,829 4,520,756 Sanitation - - 2,085,708 2,122,675 2,085,708 2,122,675 Stormwater - - 534,268 549,873 534,268 549,873 Total expenses 19,559,404 19,266,910 11,098,643 10,930,437 30,658,047 30,197,347 Increase (Decrease) in Net Assets Before Transfers 5,236,527 9,756,790 4,969,453 6,457,815 10,205,980 16,214,605 Transfers 468,571 496,438 (468,571) (496,438) - - Increase in Net Assets 5,705,098 10,253,228 4,500,882 5,961,377 10,205,980 16,214,605 Net Assets – Beginning48,366,962 38,113,734 78,570,902 72,609,525 126,937,864 110,723,259 Net Assets – Ending 54,072,060$ 48,366,962$ 83,071,784$ 78,570,902$ 137,143,844$ 126,937,864$ Governmental Activities CITY OF CLERMONT’S Changes in Net Assets Business-type Activities Total 6 Governmental activities - Governmental activities increased the City of Clermont’s net assets by $5,705,098. The primary reason for this change was the receipt of a State grant in the amount of $3,199,226 which was used to pay off the Inland Groves Note. The following graph is a comparison of program revenues and program expenses for all governmental activities. This chart is intended to give the reader an idea of the degree to which governmental activities are self-supporting. The following pie chart illustrates the composition of governmental activities revenue and its percent in relation to total governmental activities revenues. $0 $2,000,000 $4,000,000 $6,000,000 $8,000,000 $10,000,000 $12,000,000 General governmentPublic safetyTransportation/Public works Culture and recreationPhysical environment and other Interest on long‐term debt $4,747,256 $10,775,546 $1,163,615 $2,081,715 $465,590 $325,682 $1,854,073 $1,896,602 $335,614 $3,297,967 $0 $0 Expenses and Program Revenues -Governmental Activities Expenses Program revenues Intergovernmental, 18% Charges for services, 13% Operating grants and contributions, 4% Investment income & miscellaneous , 4% Other taxes, 17% Capital grants and contributions, 13% Property taxes, 31% Revenues by Source -Governmental Activities Intergovernmental Charges for services Operating grants and contributions Investment income & miscellaneous Other taxes Capital grants and contributions Property taxes 7 Business-type activities - Business-type activities increased the City of Clermont’s net assets by $4,500,882. Much of this change was due to capital contributions totaling $2,137,323. These contributions are water and sewer impact fees paid by developers. The fees were adopted by the City to require new development to pay its proportionate share of the capital costs necessary to accommodate new development impacts on the City’s water and sewer system. The City is using this revenue for large capital projects that are currently under construction such as the Greater Hills Water Treatment Plant, the West Side Force Main, the Equilization Wastewater Basin and Lift Station Improvements. The following graph is a comparison of program revenues and program expenses for all business- type activities. This chart is intended to give the reader an idea of the degree to which business- type activities are self-supporting. The following pie chart illustrates the composition of business-type activities revenue and its percent in relation to total business-type activities revenues. $0 $1,000,000 $2,000,000 $3,000,000 $4,000,000 $5,000,000 $6,000,000 $7,000,000 $8,000,000 Water SewerSanitationStormwater $3,989,838 $4,488,829 $2,085,708 $534,268 $5,496,851 $6,204,602 $2,560,428 $800,717 Expenses and Program Revenues -Business Type Activities Expenses Program Revenue Investment income & miscellaneous , 6.3% Charges for Services, 80.4% Capital Grants and Contributions, 13.3% Revenues by Source -Business Activities Investment income & miscellaneous Charges for Services Capital Grants and Contributions 8 Financial Analysis of the City’s Funds As noted earlier, the City of Clermont uses fund accounting to ensure and demonstrate compliance with finance-related requirements. Governmental Funds. The focus of the City’s governmental funds is to provide information on near-term inflows, outflows, and balances of spendable resources. Such information is useful in assessing the City of Clermont’s financing requirements. In particular, unreserved 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, 2009, the City of Clermont’s governmental funds reported combined ending fund balances of $20,759,197 a decrease of $743,639 in comparison with the prior year. Of the governmental funds combined ending fund balances, $18,278,423 (88%) represents unreserved fund balance, which is available for spending at the City’s discretion. The remainder of fund balance is reserved to indicate that it is not available for spending because it has already been committed for debt service, inventories and prepaid expenses, or it is being held in a non- expendable trust fund. The General Fund is the chief operating fund of the City of Clermont. As of September 30, 2009, the fund balance in the General Fund was $11,074,367 an increase of $1,293,581 in comparison with the prior year. This increase is due to current revenues exceeding current expenditures. Of the total fund balance in the General Fund, $10,860,489 (98%) was unreserved fund balance. As a measure of the General Fund’s liquidity, it may be useful to compare both unreserved fund balance and total fund balance to total fund expenditures. Unreserved fund balance represents 48% of total General Fund expenditures, while total fund balance represents 49% of that same amount. The Community Redevelopment Special Revenue Fund is considered a major fund in order for our external auditors to express an opinion on this fund as required by Florida Statutes chapter 163.387(8). This fund was created in 1997 as a dependent taxing district. The incremental annual increase in tax over the base years is used to fund projects. As of September 30, 2009, the fund balance was $1,180,696 an increase of $273,350 over the prior year. This increase is due to unanticipated delays in the streetscape improvements project. The remainder of the change ($2,310,570) to the governmental fund balance was from the non- major governmental funds. The Infrastructure Fund and Capital Projects Fund balances decreased by $1,563,000 and $1,225,145, respectively. Recreation, Police and Fire Impact Fee fund balances combined increased a total of $340,547. The fund balances in the remaining non-major funds increased a total of $59,663. Proprietary Funds. Proprietary funds are used to account for operations (a) that are financed and operated in a manner similar to private business enterprises where the intent of the governing body is that the costs (expenses, including depreciation) of providing goods or services to the general public on a continuing basis be financed or recovered primarily through user charges; or (b) where the governing body has decided that periodic determination of revenues earned, expenses incurred, and/or net income is appropriate for capital maintenance, public policy, management control, accountability, or other purposes. The City’s major proprietary funds are water, sewer and sanitation. The Water Fund accounts for the provision of potable water service to City and non-City residents. All activities necessary to the provision of these services are accounted for in this fund, including, but not limited to administration, plant and line maintenance. As of September 30, 2009, the City of Clermont’s Water Fund reported total net assets of $27,759,881, an 9 increase of $585,157 (2%) in comparison with the prior year. This increase is partially due to servicing an expanded customer base. The residential customer base has increased from 16,969 customers in September 2008 to 17,375 as of September 2009. Approximately 24% of the increase in net assets was operating income. The remainder was from impact fee collections that are accumulating for large capital projects that will expand the current water system. The Sewer Fund accounts for the provision of sewer services to City and non-City residents. All activities necessary to the provision of these services are accounted for in this fund, including, but not limited to administration, plant and line maintenance. As of September 30, 2009, the City of Clermont’s Sewer Fund reported total net assets of $47,230,489, an increase of $3,193,803 in comparison with the prior year. This increase is primarily due to impact fee collections. Much of the money collected for impact fees is accumulating for large capital projects that will expand the current sewer system. The remainder of the increase is due to servicing an expanded customer base. The residential customer base has increased from 11,913 customers in September 2008 to 12,154 in September 2009. The Sanitation Fund accounts for the provision of garbage and trash collection, recycling, and composting services to City residents. All activities necessary to the provision of these services are accounted for in this fund. As of September 30, 2009, the City of Clermont’s Sanitation Fund reported total net assets of $3,422,601, an increase of $479,734 in comparison with the prior year. This was primarily due to operating income. General Fund Budgetary Highlights During the year there was a $6,256,072 increase in appropriations between the original and final amended budget. Following are the main components of the increase: • $5,782,778 to pay off the debt service for recreation land purchased in a prior year. • $59,641 for equipment for the new Fire Station #3. • $50,000 carryforward from FY 2008 for the columbarium project at the Cemetery. • $30,000 carryforward from FY 2008 for the downtown street signage project. • $29,275 for a security system and cameras at City Hall. • $24,700 for additional improvements at the Historic Village Train Depot. • $30,200 for final payment of costs associated with the Legends Way project. • $17,900 for the installation of a fountain and lighting at Center Lake. Actual revenues were $860,818 more than budgeted revenue and actual expenditures were $1,224,619 less than budgeted expenditures. Capital Assets The following is a summary of the City of Clermont’s capital assets, net of depreciation for governmental and business-type activities for the current year with a comparison to the prior year. Additional information on the City of Clermont’s capital assets can be found in Note 6 on pages 46 - 47 of this report. 10 2008-092007-082008-092007-082008-092007-08 Land 21,776,552$ 21,652,809$ 1,457,973$ 1,464,129$ 23,234,525$ 23,116,938$ Buildings 6,025,822 5,823,494 228 304 6,026,050 5,823,798 Infrastructure 4,801,673 5,505,263 53,856,205 32,790,570 58,657,878 38,295,833 Machinery and Equipment2,708,533 3,341,216 1,819,305 2,136,040 4,527,838 5,477,256 Intangibles 410,925 430,668 28,722 24,524 439,647 455,192 Construction in progress 2,747,317 1,500,565 13,620,309 26,756,427 16,367,626 28,256,992 Total 38,470,822$ 38,254,015$ 70,782,742$ 63,171,994$ 109,253,564$ 101,426,009$ CITY OF CLERMONT’S Capital Assets (net of depreciation) Governmental ActivitiesBusiness-type Activities Total The City of Clermont’s investment in capital assets for its governmental and business-type activities as of September 30, 2009, amounts to $109,253,564 (net of accumulated depreciation). This investment in capital assets includes land, buildings, improvements/infrastructure, machinery and equipment and intangibles. The total increase in the City’s investment in capital assets for the current fiscal year was $7,827,556 (8%). Major capital asset events during the current fiscal year included the following: • Completion of the East Water Reclamation Facility – $1,036,629 was added and prior years Construction in Progress in the amount of $18,352,297 was moved to Infrastructure/Improvements for a total project cost of $19,388,926. • Completion of the Terrace Grove Water and Sewer Systems for $583,686. • Completion of the East Side Refueling Station for $109,200. • Completion of the Lift Station Telemetry System – $219,478 was added and prior years Construction in Progress in the amount of $710,862 was moved for a total project cost of $930,340. • Water System Improvements totaling $571,710. • Construction in progress includes construction of the Greater Hills Water Treatment Plant, the West Side Force Main, the Equilization Wastewater Basin, Lift Station Improvements, Fire Station #3 construction and Historic Village Improvements. Debt Administration The following is a summary of the City’s long-term debt for governmental and business-type activity for the current year with a comparison to the prior year. Additional information on long- term debt can be found in Note 7 on pages 47 - 50 of this report. 2008-092007-082008-092007-082008-092007-08 Revenue bonds payable4,495,000$ 4,935,000$ 16,655,000$ 17,065,000$ 21,150,000$ 22,000,000$ Notes payable 38,077 5,856,865 - - 38,077 5,856,865 Total 4,533,077$ 10,791,865$ 16,655,000$ 17,065,000$ 21,188,077$ 27,856,865$ CITY OF CLERMONT’S Outstanding Debt Governmental ActivitiesBusiness-type Activities Total 11 At the end of the current fiscal year, the City of Clermont had total debt outstanding of $21,188,077. This debt includes revenue bonds payable and notes payable. During fiscal year 2008-2009, the City paid off a note issued during fiscal year 2007-2008 for the purchase of recreation land. This note was originally scheduled to be paid off in fiscal year 2010-2011 but with the help of state grant funding and City reserves, the City was able to pay off the note early. Economic Factors and Next Year’s Budgets and Rates • The annual unemployment rate for Lake County in 2009 was 12.3%, which is an increase of 5.2% over 2008. It is higher than both the state’s average of 11.2% and the national average of 9.8%. • The taxable value of commercial and residential property decreased 3.0% from fiscal year 2007-08 to fiscal year 2008-09 due to declining home values. • Population increased 3.1% from 23,476 in 2008 to 24,199 in 2009. As of September 30, 2009, the General Fund unreserved fund balance was $10,860,489. The City appropriated $431,721 of this amount for spending in the 2009-10 fiscal year budget. The same property tax rate is included for the General Fund for the 2009-10 fiscal year budget. However, property tax revenue is projected to be nearly $673,629 lower in fiscal year 2009- 2010 due to declining home values and foreclosures. No utility rate adjustments were proposed for the 2009-10 fiscal year with the exception of the sewer rate structure. The sewer rates increased 2.6% on October 1, 2009 pursuant to a required adjustment in accordance with the Florida Public Service Commission Annual Deflator Index previously adopted by the Clermont City Council. Requests for Information This financial report is designed to provide a general overview of the City of Clermont’s finances for all those with an interest in the government’s finances. Questions concerning any of the information should be addressed to the office of the Administrative Services Director, City of Clermont, P.O. Box 120219, Clermont, Florida 34712. 12 BASIC FINANCIAL STATEMENTS CITY OF CLERMONT, FLORIDA STATEMENT OF NET ASSETS September 30, 2009 Primary Government Governmental Activities Business-type Activities Total Assets: Cash and cash equivalents 4,644,086$ 8,867,696$ 13,511,782$ Investments 16,012,422 8,369,405 24,381,827 Receivables, net 248,005 1,501,039 1,749,044 Inventories 28,072 153,883 181,955 Due from other governments 260,644 319 260,963 Internal balances 84,151 (84,151) - Prepaid costs 204,851 121,481 326,332 Restricted assets: Cash and cash equivalents - 1,133,795 1,133,795 Investments - 10,059,294 10,059,294 Interest receivable 570,342 69,457 639,799 Bond issuance costs 0 283,222 283,222 Capital assets not being depreciated 24,523,86915,078,282 39,602,151 Capital assets being depreciated, net of accumulated depreciation 13,946,953 55,704,460 69,651,413 Total assets 60,523,395 101,258,182 161,781,577 Liabilities: Accounts payable and accrued expenses 1,330,4421,721,2893,051,731 Noncurrent liabilities: Due within one year 551,859 453,351 1,005,210 Due in more than one year 4,569,034 16,011,758 20,580,792 Total liabilities 6,451,335 18,186,398 24,637,733 Net Assets: Invested in capital assets, net of related debt 33,937,745 54,834,359 88,772,104 Restricted for: Capital improvements 4,258,952 10,436,763 14,695,715 Community redevelopment 1,180,696 - 1,180,696 Debt service 365,590 - 365,590 Perpetual care: Nonexpendable 720,610 - 720,610 Unrestricted 13,608,467 17,800,662 31,409,129 Total net assets 54,072,060$ 83,071,784$ 137,143,844$ The accompanying Notes to Financial Statements are an integral part of this statement. 13 CI T Y O F C L E R M O N T , F L O R I D A ST A T E M E N T O F A C T I V I T I E S Fu n c t i o n s / P r o g r a m s : Ex p e n s e s Ch a r g e s f o r Se r v i c e s Op e r a t i n g G r a n t s an d C o n t r i b u t i o n s Ca p i t a l G r a n t s an d Co n t r i b u t i o n s Go v e r n m e n t a l Ac t i v i t i e s Bu s i n e s s - t y p e ActivitiesTotal Go v e r n m e n t a l A c t i v i t i e s : Ge n e r a l g o v e r n m e n t 4, 7 4 7 , 2 5 6 $ 1, 8 5 4 , 0 7 3 $ - $ - $ (2 , 8 9 3 , 1 8 3 ) $ - $ (2,893,183)$ P u b l i c s a f e t y 10 , 7 7 5 , 5 4 6 1 , 2 0 3 , 2 7 3 6 3 2 , 4 6 3 6 0 , 8 6 6 ( 8 , 8 7 8 , 9 4 4 ) - ( 8 , 8 7 8 , 9 4 4 ) Ph y s i c a l e n v i r o n m e n t 36 4 , 0 2 3 - - - (3 6 4 , 0 2 3 ) - (364,023) Tr a n s p o r t a t i o n / p u b l i c w o r k s 1, 1 6 3 , 6 1 5 - 28 8 , 8 5 1 46 , 7 6 3 (8 2 8 , 0 0 1 ) - (828,001) Ec o n o m i c e n v i r o n m e n t 10 1 , 5 6 7 - - - (1 0 1 , 5 6 7 ) - (101,567) Cu l t u r e a n d r e c r e a t i o n 2, 0 8 1 , 7 1 5 98 , 7 4 1 - 3 , 1 9 9 , 2 2 6 1, 2 1 6 , 2 5 2 - 1,216,252 In t e r e s t o n l o n g - t e r m d e b t 32 5 , 6 8 2 - - - (3 2 5 , 6 8 2 ) - (325,682) To t a l g o v e r n m e n t a l a c t i v i t i e s 19 , 5 5 9 , 4 0 4 3, 1 5 6 , 0 8 7 92 1 , 3 1 4 3, 3 0 6 , 8 5 5 (1 2 , 1 7 5 , 1 4 8 ) - (12,175,148) Bu s i n e s s - t y p e a c t i v i t i e s Wa t e r 3, 9 8 9 , 8 3 8 4 , 9 0 8 , 9 1 1 - 5 8 7 , 9 4 0 - 1 , 5 0 7 , 0 1 3 1 , 5 0 7 , 0 1 3 Se w e r 4, 4 8 8 , 8 2 9 4 , 6 5 5 , 2 1 9 - 1 , 5 4 9 , 3 8 3 - 1 , 7 1 5 , 7 7 3 1 , 7 1 5 , 7 7 3 Sa n i t a t i o n 2, 0 8 5 , 7 0 8 2, 5 6 0 , 4 2 8 - - - 4 7 4 , 7 2 0 474,720 St o r m w a t e r 53 4 , 2 6 8 8 0 0 , 7 1 7 - - - 2 6 6 , 4 4 9 2 6 6 , 4 4 9 To t a l b u s i n e s s - t y p e a c t i v i t i e s 11 , 0 9 8 , 6 4 3 12 , 9 2 5 , 2 7 5 - 2 , 1 3 7 , 3 2 3 - 3 , 9 6 3 , 9 5 5 3,963,955 To t a l p r i m a r y g o v e r n m e n t 30 , 6 5 8 , 0 4 7 $ 16 , 0 8 1 , 3 6 2 $ 92 1 , 3 1 4 $ 5, 4 4 4 , 1 7 8 $ (1 2 , 1 7 5 , 1 4 8 ) 3,963,955 (8,211,193) Ge n e r a l r e v e n u e s : Pr o p e r t y t a x e s 7, 6 0 0 , 9 6 6 - 7,600,966 F r a n c h i s e f e e s a n d u t i l i t y t a x e s 4, 30 2 , 5 7 6 - 4,302,576 In t e r g o v e r n m e n t a l - u n r e s t r i c t e d 4, 4 5 8 , 1 6 2 - 4,458,162 Un r e s t r i c t e d i n v e s t m e n t e a r n i n g s 84 7 , 8 6 1 1,005,498 1,853,359 Mi s c e l l a n e o u s 20 2 , 1 1 0 - 202,110 Tr a n s f e r s 46 8 , 5 7 1 (468,571) - To t a l g e n e r a l r e v e n u e s a n d t r a n s f e r s 17 , 8 8 0 , 2 4 6 536,927 18,417,173 Ch a n g e i n n e t a s s e t s 5, 7 0 5 , 0 9 8 4,500,882 10,205,980 Ne t a s s e t s - b e g i n n i n g 48 , 3 6 6 , 9 6 2 78,570,902 126,937,864 Ne t a s s e t s - e n d i n g 54 , 0 7 2 , 0 6 0 $ 83,071,784 $ 137,143,844$ Y e a r E n d e d S e p t e m b e r 3 0 , 2 0 0 9 Pr o g r a m R e v e n u e C h a n g e s i n N e t A s s e t s Pr i m a r y G o v e r n m e n t Ne t ( E x p e n s e ) R e v e n u e a n d Th e a c c o m p a n y i n g N o t e s t o F i n a n c i a l S t a t e m e n t s a r e a n i n t e g r a l p a r t o f t h i s s t a t e m e n t . 14 General Community Redevelopment Special Revenue Other Governmental Funds Total Governmental Funds Assets: Cash and cash equivalents 973,460$ 1,180,696$ 2,459,281$ 4,613,437$ Investments 10,012,422 - 6,000,000 16,012,422 Receivables, net 679,279 - 139,068 818,347 Inventories, at cost 28,072 - - 28,072 Due from other governments 138,153 - 122,491 260,644 Prepaid costs 185,806 - 19,045 204,851 Total assets 12,017,192$ 1,180,696$ 8,739,885$ 21,937,773$ Liabilities and Fund Balances: Liabilities: Accounts payable 525,296$ -$ 233,456$ 758,752$ Deferred revenue 76,681 - - 76,681 Accrued liabilities 340,848 - 2,295 343,143 Total liabilities 942,825 - 235,751 1,178,576 Fund balances: Reserved for: Inventories and prepaid costs 213,878 - - 213,878 Community redevelopment - 1,180,696 - 1,180,696 Debt service - - 365,590 365,590 Perpetual care - - 720,610 720,610 Unreserved, reported in: General fund 10,860,489 - - 10,860,489 Special revenue funds - - 4,146,904 4,146,904 Capital projects funds - - 3,271,030 3,271,030 Total fund balances 11,074,367 1,180,696 8,504,134 20,759,197 Total liabilities and fund balances 12,017,192$ 1,180,696$ 8,739,885$ 38,470,822 (62,833) 76,681 (50,914) (5,120,893) 54,072,060$ The assets and liabilities of certain internal service funds are not included in the fund financial statement, but are included in the governmental activities of the Statement of Net Assets. Long-term liabilities are not due and payable in the current period and therefore are not reported in the funds. Net Assets of Governmental Activities in the Statement of Net Assets CITY OF CLERMONT, FLORIDA BALANCE SHEET GOVERNMENTAL FUNDS September 30, 2009 Amounts reported for governmental activities in the Statement of Net Assets are different because: Other long-term assets are not available to pay for current period expenditures and, therefore are not reported in the funds Capital assets used in governmental activities are not financial resources and, therefore, are not reported in the funds. Accrued interest payable is not due in the current period and therefore is not reported in the funds. The accompanying Notes to Financial Statements are an integral part of this statement. 15 General Community Redevelopment Special Revenue Other Governmental Funds Total Governmental Funds Revenues: Taxes 11,594,781$ 308,761$ -$ 11,903,542$ Licenses and permits 226,455 - 447,420 673,875 Intergovernmental revenues 6,901,042 - 1,764,949 8,665,991 Charges for services 987,297 - 116,183 1,103,480 Fines and forfeitures 177,708 - - 177,708 Impact fees/special assessments - - 902,905 902,905 Investment earnings 573,331 2,611 271,800 847,742 Miscellaneous 347,559 - 96,329 443,888 Total revenues 20,808,173 311,372 3,599,586 24,719,131 Expenditures: Current: General government 3,144,934 - 509,382 3,654,316 Public safety 10,159,096 - 116,102 10,275,198 Physical environment 489,660 - - 489,660 Transportation 1,129,371 - - 1,129,371 Economic environment 63,545 38,022 - 101,567 Culture and recreation 1,705,640 - 187,158 1,892,798 Debt Service: Principal retirement 5,782,778 - 476,010 6,258,788 Interest and fiscal charges - - 374,684 374,684 Capital outlay: Public safety - - 1,608,254 1,608,254 Culture and recreation - - 130,116 130,116 Total expenditures 22,475,024 38,022 3,401,706 25,914,752 Excess (Deficiency) of Revenues Over Expenditures (1,666,851) 273,350 197,880 (1,195,621) Other Financing Sources (Uses): Transfers in 3,037,163 - 3,647,115 6,684,278 Transfers out (76,731) - (6,155,565) (6,232,296) Net other financing sources (uses)2,960,432 - (2,508,450) 451,982 Net Change in Fund Balances 1,293,581 273,350 (2,310,570) (743,639) Fund Balances - Beginning 9,780,786 907,346 10,814,704 21,502,836 Fund Balances - Ending 11,074,367$ 1,180,696$ 8,504,134$ 20,759,197$ CITY OF CLERMONT, FLORIDA STATEMENT OF REVENUES, EXPENDITURES AND CHANGES IN FUND BALANCES GOVERNMENTAL FUNDS Year Ended September 30, 2009 The accompanying Notes to Financial Statements are an integral part of this statement. 16 CITY OF CLERMONT, FLORIDA Net change in fund balances - total governmental funds:(743,639)$ Amounts reported for Governmental Activities in the Statement of Activities are different because: Governmental funds report outlays for capital assets as expenditures because such outlays use current financial resources. In contrast, the Statement of Activities reports only a portion of the outlay as expense. The outlay is allocated over the assets' estimated useful lives as depreciation expense for the period. This is the amount by which capital outlays $2,272,960 exceeded depreciation $1,834,856 in the current period. The net effect of sales of capital assets is to decrease net assets.(237,886) Governmental funds do not present revenues that are not available to pay current obligations. In contrast, such revenues are reported in the Statement of Activities when earned. 76,681 Governmental funds report bond proceeds as current financial resources. In contrast, the Statement of Activities treats such issuance of debt as a liability. Governmental funds report repayment of bond principal as an expenditure, In contrast, the Statement of Activities treats such repayments as a reduction in long-term liabilities. This is the amount by which repayments exceeded proceeds. 6,258,788 Some expenses reported in the statement of activities do not require the use of current financial resources and these are not reported as expenditures in governmental funds: (10,910) Contributions of capital assets from proprietary funds 16,589 Internal service funds are used by management to charge the costs of certain activities, such as fleet maintenance and information technology, to individual funds. The net revenue (expense) of certain internal service funds is reported with governmental activities.(92,629) Change in net assets of governmental activities 5,705,098$ 438,104 RECONCILIATION OF THE STATEMENT OF REVENUES, EXPENDITURES, AND CHANGES IN FUND BALANCES OF GOVERNMENTAL FUNDS TO THE STATEMENT OF ACTIVITIES Year Ended September 30, 2009 The accompanying Notes to Financial Statements are an integral part of this statement. 17 STATEMENT OF REVENUES, EXPENDITURES AND CHANGES IN FUND BALANCE - BUDGET AND ACTUAL Budgeted Amounts Actual Amounts, Budgetary Basis Variance with Final Budget - Positive (Negative) Original Final Revenues: Taxes 10,807,098$ 10,807,098$ 11,594,781$ 787,683$ Licenses and permits 257,500 257,500 226,455 (31,045) Intergovernmental revenues 3,586,331 6,785,557 6,530,685 (254,872) Charges for services 984,708 984,708 987,297 2,589 Fines and forfeitures 201,400 201,400 177,708 (23,692) Investment earnings 225,000 225,000 573,331 348,331 Miscellaneous 315,735 315,735 347,559 31,824 Total revenues 16,377,772 19,576,998 20,437,816 860,818 Expenditures: Current: General government: City council 26,748 26,748 25,945 803 City clerk 225,760 228,456 212,535 15,921 City manager 465,873 468,041 451,761 16,280 Administrative services 1,115,086 1,137,550 1,099,588 37,962 Legal services 113,000 117,985 117,984 1 Planning & zoning 686,989 699,349 684,709 14,640 Engineering 360,472 363,062 353,951 9,111 Other general government 126,250 205,225 198,461 6,764 3,120,178 3,246,416 3,144,934 101,482 Public Safety: Law enforcement 5,590,662 5,670,057 5,330,092 339,965 Fire control 4,439,243 4,533,490 4,458,647 74,843 10,029,905 10,203,547 9,788,739 414,808 Physical environment / Transportation 1,846,7461,921,5461,619,031302,515 Economic environment / Human Services 49,440 64,395 63,545 850 Culture and recreation 2,026,945 2,110,604 1,705,640 404,964 Debt Service: Principal - 5,782,778 5,782,778 - Interest and other charges - - - - Total expenditures 17,073,214 23,329,286 22,104,667 1,224,619 GENERAL FUND Year Ended September 30, 2009 CITY OF CLERMONT, FLORIDA The accompanying Notes to Financial Statements are an integral part of this statement. 18 STATEMENT OF REVENUES, EXPENDITURES AND CHANGES IN FUND BALANCE - BUDGET AND ACTUAL (CONTINUED) Budgeted Amounts Actual Amounts, Budgetary Basis Variance with Final Budget - Positive (Negative) Original Final Over Expenditures (695,442) (3,752,288) (1,666,851) 2,085,437 Other Financing Sources (Uses): Transfers in 463,000 3,046,552 3,037,163 (9,389) Transfers out (76,213) (76,213) (76,731) (518) Total other financing sources (uses)386,787 2,970,339 2,960,432 (9,907) Net Change in Fund Balance (308,655) (781,949) 1,293,581 2,075,530 Fund Balance - Beginning 9,780,786 9,780,786 9,780,786 - Fund Balance - Ending 9,472,131$ 8,998,837$ 11,074,367$ 2,075,530$ Excess (Deficiency) of Revenues CITY OF CLERMONT, FLORIDA GENERAL FUND Year Ended September 30, 2009 The accompanying Notes to Financial Statements are an integral part of this statement. 19 20 STATEMENT OF REVENUES, EXPENDITURES AND CHANGES IN FUND BALANCE - BUDGET AND ACTUAL Budgeted Amounts Actual Amounts Variance with Final Budget - Positive (Negative) OriginalFinal Revenues: Taxes304,976$ 304,976$ 308,761$ 3,785$ Investment earnings 15,000 15,000 2,611 (12,389) Total revenues 319,976 319,976 311,372 (8,604) Expenditures: Economic environment: Economic development 900,175 900,175 38,022 862,153 Total expenditures 900,175 900,175 38,022 862,153 Excess (Deficiency) of Revenues Over Expenditures (580,199) (580,199) 273,350 853,549 Net Change in Fund Balances (580,199) (580,199) 273,350 853,549 Fund Balances - Beginning 907,346 907,346 907,346 - Fund Balances - Ending 327,147$ 327,147$ 1,180,696$ 853,549$ CITY OF CLERMONT, FLORIDA COMMUNITY REDEVELOPMENT SPECIAL REVENUE FUND Year Ended September 30, 2009 The accompanying Notes to Financial Statements are an integral part of this statement. 21 Governmental Activities- Wa t e r S e w e r S a n i t a t i o n S t o r m w a t e r T o t a l Internal Service Fund As s e t s : Cu r r e n t a s s e t s : Ca s h a n d c a s h e q u i v a l e n t s 4, 5 4 4 , 8 8 9 $ 39 5 , 5 3 4 $ 2, 0 6 1 , 8 9 1 $ 1, 8 6 5 , 3 8 2 $ 8, 8 6 7 , 6 9 6 $ 30,649$ In v e s t m e n t s 8, 3 6 9 , 4 0 5 - - - 8 , 3 6 9 , 4 0 5 - Re s t r i c t e d c a s h a n d c a s h e q u i v a l e n t s 60 4 , 2 4 9 52 9 , 5 4 6 - - 1 , 1 3 3 , 7 9 5 - Ac c o u n t s r e c e i v a b l e , n e t 38 5 , 8 1 3 81 2 , 3 2 2 22 7 , 4 6 4 75 , 4 4 0 1, 5 0 1 , 0 3 9 - Re c e i v a b l e s f r o m o t h e r g o v e r n m e n t s - - 31 9 - 319 - In v e n t o r i e s 15 3 , 8 8 3 - - - 1 5 3 , 8 8 3 - Pr e p a i d e x p e n s e s 38 , 9 9 3 54 , 7 7 4 22 , 4 6 2 5, 2 5 2 12 1 , 4 8 1 - To t a l c u r r e n t a s s e t s 14 , 0 9 7 , 2 3 2 1, 7 9 2 , 1 7 6 2, 3 1 2 , 1 3 6 1, 9 4 6 , 0 7 4 20 , 1 4 7 , 6 1 8 30,649 No n - c u r r e n t a s s e t s : R e s t r i c t e d i n v e s t m e n t s - 1 0 , 0 5 9 , 2 9 4 - - 1 0 , 0 5 9 , 2 9 4 - I n t e r e s t r e c e i v a b l e 26 , 4 9 2 42 , 9 6 5 - - 69 , 4 5 7 - B o n d i s s u a n c e c o s t s 10 1 , 9 6 0 18 1 , 2 6 2 - - 2 8 3 , 2 2 2 - Ca p i t a l a s s e t s : La n d , b u i l d i n g s a n d e q u i p m e n t 18 , 2 5 1 , 1 4 3 49 , 1 1 5 , 4 6 7 2, 2 6 4 , 0 3 1 3, 0 3 2 , 4 2 7 72 , 6 6 3 , 0 6 8 - Co n s t r u c t i o n i n p r o g r e s s 8, 4 0 5 , 5 0 7 4, 8 0 3 , 4 3 0 - 41 1 , 3 7 2 13 , 6 2 0 , 3 0 9 - Le s s a c c u m u l a t e d d e p r e c i a t i o n (5 , 6 9 2 , 2 9 3 ) (8 , 3 0 0 , 4 5 7 ) (9 8 7 , 1 6 6 ) (5 2 0 , 7 1 9 ) (1 5 , 5 0 0 , 6 3 5 ) - Tot a l c a p i t a l a s s e t s ( n e t o f ac c u m u l a t e d d e p r e c i a t i o n ) 20 , 9 6 4 , 3 5 7 45 , 6 1 8 , 4 4 0 1, 2 7 6 , 8 6 5 2, 9 2 3 , 0 8 0 70 , 7 8 2 , 7 4 2 - To t a l n o n - c u r r e n t a s s e t s 21 , 0 9 2 , 8 0 9 55 , 9 0 1 , 9 6 1 1, 2 7 6 , 8 6 5 2, 9 2 3 , 0 8 0 81 , 1 9 4 , 7 1 5 - To t a l a s s e t s 35 , 1 9 0 , 0 4 1 57 , 6 9 4 , 1 3 7 3, 5 8 9 , 0 0 1 4, 8 6 9 , 1 5 4 10 1 , 3 4 2 , 3 3 3 30,649 CI T Y O F C L E R M O N T , F L O R I D A ST A T E M E N T O F N E T A S S E T S PR O P R I E T A R Y F U N D S Se p t e m b e r 3 0 , 2 0 0 9 Bu s i n e s s - t y p e A c t i v i t i e s - E n t e r p r i s e F u n d s Th e a c c o m p a n y i n g N o t e s t o F i n a n c i a l S t a t e m e n t s a r e a n i n t e g r a l p a r t o f t h i s s t a t e m e n t . 22 Li a b i l i t i e s : Cu r r e n t l i a b i l i t i e s : Ac c o u n t s p a y a b l e 10 9 , 2 3 2 63 7 , 5 3 3 11 7 , 6 0 0 10 2 , 2 1 7 96 6 , 5 8 2 165,714 Sa l a r i e s p a y a b l e 65 , 9 5 3 52 , 9 6 7 27 , 0 2 1 11 , 3 2 2 15 7 , 2 6 3 - Ac c r u e d i n t e r e s t p a y a b l e 10 4 , 8 4 7 18 6 , 3 9 5 - - 2 9 1 , 2 4 2 - Co m p e n s a t e d a b s e n c e s 12 , 3 1 8 7, 5 9 0 2, 1 7 8 1, 2 6 5 23 , 3 5 1 - Ot h e r a c c r u e d e x p e n s e s 30 6 , 2 0 2 - - - 3 0 6 , 2 0 2 - Re v e n u e b o n d s p a y a b l e - c u r r e n t 15 4 , 8 0 0 27 5 , 2 0 0 - - 4 3 0 , 0 0 0 - To t a l c u r r e n t l i a b i l i t i e s 75 3 , 3 5 2 1, 1 5 9 , 6 8 5 14 6 , 7 9 9 11 4 , 8 0 4 2, 1 7 4 , 6 4 0 165,714 No n - c u r r e n t l i a b i l i t i e s : Co m p e n s a t e d a b s e n c e s 11 0 , 8 5 9 68 , 3 0 7 19 , 6 0 1 11 , 3 8 6 21 0 , 1 5 3 - Re v e n u e b o n d s p a y a b l e 6, 5 6 5 , 9 4 9 9, 2 3 5 , 6 5 6 - - 1 5 , 8 0 1 , 6 0 5 - To t a l n o n - c u r r e n t l i a b il i t i e s 6, 67 6 , 8 0 8 9, 3 0 3 , 9 6 3 19 , 6 0 1 11 , 3 8 6 16 , 0 1 1 , 7 5 8 - To t a l l i a b i l i t i e s 7, 43 0 , 1 6 0 10 , 4 6 3 , 6 4 8 16 6 , 4 0 0 12 6 , 1 9 0 18 , 1 8 6 , 3 9 8 165,714 Ne t A s s e t s : In v e s t e d i n c a p i t a l a s s e t s , n e t o f r e l a t e d d e b t 1 4 , 3 4 5 , 5 6 8 36 , 2 8 8 , 8 4 6 1, 2 7 6 , 8 6 5 2, 9 2 3 , 0 8 0 54 , 8 3 4 , 3 5 9 - Re s t r i c t e d f o r c a p i t a l i m p r o v e m e n t s 42 0 , 0 3 3 10 , 0 1 6 , 7 3 0 - - 1 0 , 4 3 6 , 7 6 3 - Un r e s t r i c t e d 12 , 9 9 4 , 2 8 0 92 4 , 9 1 3 2, 1 4 5 , 7 3 6 1, 81 9 , 88 4 17 , 8 8 4 , 8 1 3 (135,065) To t a l n e t a s s e t s 27 , 7 5 9 , 8 8 1 $ 47 , 2 3 0 , 4 8 9 $ 3, 4 2 2 , 6 0 1 $ 4, 7 4 2 , 9 6 4 $ 83 , 1 5 5 , 9 3 5 (135,065)$ (8 4 , 1 5 1 ) To t a l n e t a s s e t s p e r G o v e r n m e n t - W i d e f i n a n c i a l s t a t e m e n t s 83 , 0 7 1 , 7 8 4 $ Th e a s s e t s a n d l i a b il i t i e s o f c e r t a i n i n t e r n a l s e r v i c e f un d s a r e n o t i n c l u d e d i n t h e f u n d f i n a n c i a l st a t e m e n t , b u t a r e i n c l u d e d i n t h e B u s i n e s s A c t i v i t i e s o f t h e S t a t e m e n t o f N e t A s s e t s . Th e a c c o m p a n y i n g N o t e s t o F i n a n c i a l S t a t e m e n t s a r e a n i n t e g r a l p a r t o f t h i s s t a t e m e n t . 23 24 CI T Y O F C L E R M O N T , F L O R I D A ST A T E M E N T O F R E V E N U E S , E X P E N S E S A N D C H A N G E S I N F U N D N E T A S S E T S PR O P R I E T A R Y F U N D S Governmental Activities- Wa t e r Se w e r Sa n i t a t i o n S t o r m w a t e r To t a l Internal Service Fund Op e r a t i n g R e v e n u e s : Ch a r g e s f o r s e r v i c e s 4, 6 0 9 , 7 4 0 $ 4, 6 5 5 , 2 1 9 $ 2, 5 4 7 , 4 7 9 $ 80 0 , 7 1 7 $ 12,613,155 $ 2,667,305$ Mi s c e l l a n e o u s 29 9 , 1 7 1 - 12 , 9 4 9 - 312,120 171,567 To t a l o p e r a t i n g r e v e n u e s 4, 9 0 8 , 9 1 1 4, 6 5 5 , 2 1 9 2, 5 6 0 , 4 2 8 80 0 , 7 1 7 12,925,275 2,838,872 Op e r a t i n g E x p e n s e s : Pe r s o n a l s e r v i c e s 1, 5 4 7 , 3 3 2 1, 3 4 2 , 1 2 8 76 3 , 9 1 9 33 2 , 4 0 7 3,985,786 - Ut i l i t i e s 51 2 , 7 0 4 65 4 , 5 3 2 52 - 1,167,288 - Du m p f e e s - 14 1 , 0 5 6 54 3 , 9 7 0 13 , 2 7 0 698,296 - Ad m i n i s t r a t i v e s e r v i c e s 35 8 , 4 2 5 31 7 , 6 3 2 11 7 , 1 2 4 28 , 9 2 7 822,108 - Re p a i r s a n d m a i n t e n a n c e 33 0 , 5 0 8 21 5 , 7 9 6 11 5 , 8 0 4 30 , 7 0 4 692,812 - De p r e c i a t i o n a n d a m o r t i z a t i o n 44 2 , 1 2 4 56 2 , 6 8 7 23 5 , 5 9 8 88 , 5 0 2 1,328,911 - Pr o f e s s i o n a l s e r v i c e s 13 5 , 6 6 9 31 6 , 3 2 2 5, 0 1 6 54 7 457,554 - In s u r a n c e c l a i m s a n d e x p e n s e s 91 , 2 3 4 18 0 , 3 4 9 39 , 3 5 4 5, 1 0 0 316,037 2,966,146 Ot h e r s u p p l i e s a n d e x p e n s e s 22 1 , 6 0 8 14 6 , 1 9 2 19 3 , 3 0 5 31 , 9 5 5 593,060 - To t a l o p e r a t i n g e x p e n s e s 3, 6 3 9 , 6 0 4 3, 8 7 6 , 6 9 4 2, 0 1 4 , 1 4 2 53 1 , 4 1 2 10,061,852 2,966,146 Op e r a t i n g i n c o m e ( l o s s ) 1, 2 6 9 , 3 0 7 77 8 , 5 2 5 54 6 , 2 8 6 26 9 , 3 0 5 2,863,423 (127,274) No n - O p e r a t i n g R e v e n u e s ( E x p e n s e s ) : In v e s t m e n t i n c o m e 14 0 , 7 5 3 85 7 , 0 6 6 3, 6 9 6 3, 9 8 3 1,005,498 119 In t e r e s t e x p e n s e (3 3 4 , 0 5 2 ) (5 9 6 , 6 5 5 ) - - (930,707) - Ga i n ( l o s s ) o n d i s p o s a l o f c a p i t a l a s s e t s (5 9 ) (6 , 6 0 2 ) (6 4 , 8 9 7 ) - (71,558) - To t a l n o n - o p e r a t i n g r e v e n u e ( e x p e n s e s ) (1 9 3 , 3 5 8 ) 25 3 , 8 0 9 (6 1 , 2 0 1 ) 3, 9 8 3 3,233 119 In c o m e ( l o s s ) b e f o r e c o n t r i b u t i o n s a n d t r a n s f e r s 1, 0 7 5 , 9 4 9 1, 0 3 2 , 3 3 4 48 5 , 0 8 5 27 3 , 2 8 8 2,866,656 (127,155) Ca p i t a l c o n t r i b u t i o n s 58 7 , 9 4 0 1, 5 4 9 , 3 8 3 - - 2,137,323 - Tr a n s f e r s i n 15 , 2 0 1 63 5 , 3 3 4 - 4, 9 2 3 655,458 - Tr a n s f e r s o u t (1 , 0 9 3 , 9 3 3 ) (2 3 , 2 4 8 ) (5 , 3 5 1 ) (1 , 4 9 7 ) (1,124,029) - Ch a n g e i n n e t a s s e t s 58 5 , 1 5 7 3, 1 9 3 , 8 0 3 47 9 , 7 3 4 27 6 , 7 1 4 4,535,408 (127,155) To t a l N e t A s s e t s - B e g i n n i n g 27 , 1 7 4 , 7 2 4 44 , 0 3 6 , 6 8 6 2, 9 4 2 , 8 6 7 4, 4 6 6 , 2 5 0 (7,910) To t a l N e t A s s e t s - E n d i n g 27 , 7 5 9 , 8 8 1 $ 47 , 2 3 0 , 4 8 9 $ 3, 4 2 2 , 6 0 1 $ 4, 7 4 2 , 9 6 4 $ (135,065)$ (34,526) Ch a n g e i n B u s i n e s s - T y p e A c t i v i t i e s i n N e t A s s e t s p e r G o v e r n m e n t - W i d e F i n a n c i a l S t a t e m e n t s 4,500,882 $ Bu s i n e s s - t y p e A c t i v i t i e s - E n t e r p r i s e F u n d s Ye a r E n d e d S e p t e m b e r 3 0 , 2 0 0 9 In t e r n a l s e r v i c e f u n d s a r e u s e d b y m a n a g e m e n t t o c h a r g e t h e c o s t s o f c e r t a i n a c t i v i t i e s t o i n d i v i d u a l f u n d s . T h e n e t r e v e n u e (e x p e n s e ) o f c e r t a i n i n t e r n a l s e r v i c e f u n d s i s r e p o r t e d w i t h B u s i n e s s A c t i v i t i e s . Th e a c c o m p a n y i n g N o t e s t o F i n a n c i a l S t a t e m e n t s a r e a n i n t e g r a l p a r t o f t h i s s t a t e m e n t . 25 Governmental Activities-Internal Service Wa t e r Se w e r Sa n i t a t i o n S t o r m w a t e r T o t a l Fund Ca s h F l o w s f r o m O p e r a t i n g A c t i v i t i e s : R e c e i p t s f r o m c u s t o m e r s 4, 9 1 3 , 1 4 3 $ 4, 2 3 1 , 3 2 1 $ 2, 5 6 1 , 3 1 1 $ 92 4 , 1 4 3 $ 12 , 6 2 9 , 9 1 8 $ -$ R e c e i p t s f r o m i n t e r n a l s e r v i c e s p r o v i d e d - - - - - 2,838,872 P a y m e n t s t o s u p p l i e r s (2 , 2 1 9 , 6 5 6 ) (3 , 2 6 3 , 9 9 1 ) (9 5 0 , 2 6 4 ) (1 2 , 5 8 6 ) (6 , 4 4 6 , 4 9 7 ) (3,214,938) P a y m e n t s t o e m p l o y e e s (1 , 5 5 2 , 0 6 5 ) (1 , 3 5 0 , 1 3 4 ) (7 8 1 , 9 9 5 ) (3 2 9 , 0 9 9 ) (4 , 0 1 3 , 2 9 3 ) - N e t c a s h p r o v i d e d ( u s e d ) b y o p e r a t i n g a c t i v i t i e s 1, 1 4 1 , 4 2 2 (3 8 2 , 8 0 4 ) 82 9 , 0 5 2 58 2 , 4 5 8 2, 1 7 0 , 1 2 8 (376,066) Ca s h F l o w s f r o m N o n - C a p i t a l F i n a n c i n g A c t i v i t i e s : D e c r e a s e i n d u e f r o m o t h e r f u n d s 7, 5 9 9 , 6 1 6 - - 1 , 0 0 0 , 0 0 0 8, 5 9 9 , 6 1 6 - I n c r e a s e d u e t o o t h e r f u n d s - ( 8 , 5 9 9 , 6 1 6 ) - - ( 8 , 5 9 9 , 6 1 6 ) - D e c r e a s e i n d u e f r o m o t h e r g o v e r n m e n t s - - 2, 0 7 7 - 2,077 - G r a n t r e v e n u e s - - - - - - T r a n s f e r s i n - 63 0 , 6 5 7 - - 6 3 0 , 6 5 7 - T r a n s f e r s o u t (1 , 0 5 1 , 9 8 3 ) - - - ( 1 , 0 5 1 , 9 8 3 ) - N e t c a s h p r o v i d e d ( u s e d ) b y n o n - c a p i t a l f i n a n c i n g a c t i v i t i e s 6, 5 4 7 , 6 3 3 (7 , 9 6 8 , 9 5 9 ) 2, 0 7 7 1, 0 0 0 , 0 0 0 (4 1 9 , 2 4 9 ) - Ca s h F l o w s f r o m C a p i t a l a n d R e l a t e d F i n a n c i n g A c t i v i t i e s : A c q u i s i t i o n o f c a p i t a l a s s e t s (2 , 5 2 6 , 8 3 8 ) (6 , 1 4 4 , 4 0 1 ) - ( 3 8 7 , 2 2 3 ) (9 , 0 5 8 , 4 6 2 ) - I n t e r e s t p a i d o n l o n g - t e r m d e b t (3 1 8 , 6 2 9 ) (5 6 6 , 4 5 2 ) - - ( 8 8 5 , 0 8 1 ) - P r i n c i p a l p a i d o n d e b t (1 4 7 , 6 0 0 ) (2 6 2 , 4 0 0 ) (4 1 0 , 0 0 0 ) - F e e s a n d a s s e s s m e n t s r e c e i v e d 58 7 , 9 4 0 1, 5 4 9 , 3 8 3 - - 2 , 1 3 7 , 3 2 3 - N e t c a s h p r o v i d e d ( u s e d ) b y c a p i t a l a n d r e l a t e d f i n a n c i n g a c t i v i t i e s (2 , 4 0 5 , 1 2 7 ) (5 , 4 2 3 , 8 7 0 ) - (3 8 7 , 2 2 3 ) (8 , 2 1 6 , 2 2 0 ) - Bu s i n e s s - T y p e A c t i v i t i e s - E n t e r p r i s e F u n d s CI T Y O F C L E R M O N T , F L O R I D A ST A T E M E N T O F C A S H F L O W S PR O P R I E T A R Y F U N D S Ye a r E n d e d S e p t e m b e r 3 0 , 2 0 0 9 Th e a c c o m p a n y i n g N o t e s t o F i n a n c i a l S t a t e m e n t s a r e a n i n t e g r a l p a r t o f t h i s s t a t e m e n t . 26 Ca s h F l o w s f r o m I n v e s t i n g A c t i v i t i e s : S a l e ( P u r c h a s e ) o f i n v e s t m e n t s (1 , 2 8 0 , 7 3 4 ) 13 , 2 2 0 , 2 9 3 - - 1 1 , 9 3 9 , 5 5 9 - I n v e s t m e n t i n c o m e 15 7 , 6 8 0 95 6 , 1 2 8 3, 6 9 6 3, 9 8 3 1, 1 2 1 , 4 8 7 119 N e t c a s h p r o v i d e d b y i n v e s t i n g a c t i v i t i e s (1 , 1 2 3 , 0 5 4 ) 14 , 1 7 6 , 4 2 1 3, 6 9 6 3, 9 8 3 13 , 0 6 1 , 0 4 6 119 Ne t I n c r e a s e ( D e c r e a s e ) i n C a s h a n d C a s h E q u i v a l e n t s 4, 1 6 0 , 8 7 4 40 0 , 7 8 8 83 4 , 8 2 5 1, 1 9 9 , 2 1 8 6, 5 9 5 , 7 0 5 (375,947) Ca s h a n d C a s h E q u i v a l e n t s - B e g i n n i n g 98 8 , 2 6 4 52 4 , 2 9 2 1, 2 2 7 , 0 6 6 66 6 , 1 6 4 3, 4 0 5 , 7 8 6 406,596 Ca s h a n d C a s h E q u i v a l e n t s - E n d 5, 1 4 9 , 1 3 8 $ 92 5 , 0 8 0 $ 2, 0 6 1 , 8 9 1 $ 1, 8 6 5 , 3 8 2 $ 10 , 0 0 1 , 4 9 1 $ 30,649 Cl a s s i f i e d A s : C a s h a n d c a s h e q u i v a l e n t s 4, 5 4 4 , 8 8 9 39 5 , 5 3 4 2, 0 6 1 , 8 9 1 1 , 8 6 5 , 3 8 2 8 , 8 6 7 , 6 9 6 $ 30,649 R e s t r i c t e d c a s h a n d c a s h e q u i v a l e n t s 60 4 , 2 4 9 52 9 , 5 4 6 - - 1 , 1 3 3 , 7 9 5 - T o t a l 5, 1 4 9 , 1 3 8 $ 92 5 , 0 8 0 $ 2, 0 6 1 , 8 9 1 $ 1, 8 6 5 , 3 8 2 $ 10 , 0 0 1 , 4 9 1 $ 30,649$ Re c o n c i l i a t i o n o f O p e r a t i n g I n c o m e ( L o s s ) t o N e t C a s h P r o v i d e d B y O p e r a t i n g A c t i v i t i e s O p e r a t i n g i n c o m e ( l o s s ) 1, 2 6 9 , 3 0 7 77 8 , 5 2 5 54 6 , 2 8 6 26 9 , 3 0 5 2 , 8 6 3 , 4 2 3 $ (127,274) Ad j u s t m e n t s N o t A f f e c t i n g C a s h : D e p r e c i a t i o n a n d a m o r t i z a t i o n 44 2 , 1 2 4 56 2 , 6 8 7 23 5 , 5 9 8 88 , 5 0 2 1 , 3 2 8 , 9 1 1 - Ch a n g e i n A s s e t s a n d L i a b i l i t i e s : D e c r e a s e ( I n c r e a s e ) i n a c c t s r e c e i v a b l e 65 2 (4 2 3 , 8 9 8 ) 88 3 12 3 , 4 2 6 (2 9 8 , 9 3 7 ) - D e c r e a s e ( I n c r e a s e ) i n c u s t o m e r d e p o s i t s 3, 5 8 0 - - - 3,580 - D e c r e a s e ( I n c r e a s e ) i n p r e p a i d c o s t s (1 1 , 9 7 8 ) (1 2 , 9 2 1 ) (3 , 3 5 8 ) (8 1 1 ) (29,068) - D e c r e a s e ( I n c r e a s e ) i n i n v e n t o r y (1 0 5 , 6 2 4 ) - - - ( 1 0 5 , 6 2 4 ) - I n c r e a s e ( d e c r e a s e ) i n a c c o u n t s p a y a b l e (4 5 1 , 9 0 6 ) (1 , 2 7 9 , 1 9 1 ) 67 , 7 1 9 98 , 7 2 8 (1 , 5 6 4 , 6 5 0 ) (248,792) I n c r e a s e ( d e c r e a s e ) i n a c c r u e d l i a b i l i t i e s (4 , 7 3 3 ) (8 , 0 0 6 ) (1 8 , 0 7 6 ) 3, 3 0 8 (27,507) - T o t a l a d j u s t m e n t s (1 2 7 , 8 8 5 ) (1 , 1 6 1 , 3 2 9 ) 28 2 , 7 6 6 31 3 , 1 5 3 (6 9 3 , 2 9 5 ) (248,792) Ne t C a s h P r o v i d e d ( U s e d ) b y O p e r a t i n g A c t i v i t i e s 1, 1 4 1 , 4 2 2 $ (3 8 2 , 8 0 4 ) $ 82 9 , 0 5 2 $ 58 2 , 4 5 8 $ 2, 1 7 0 , 1 2 8 $ (376,066)$ No n c a s h i n v e s t i n g , c a p i t a l , a n d f i n a n c i n g a c t i v i t i e s : De c r e a s e i n f a i r v a l u e o f i n v e s t m e n t s (1 5 , 3 1 0 ) $ (1 9 , 5 3 1 ) $ - $ - $ ( 3 4 , 8 4 1 ) $ -$ Tr a n s f e r o f c a p i t a l a s s e t s 3, 9 0 7 (1 8 , 5 7 1 ) (5 , 3 5 1 ) 3, 4 2 6 (16,589) - Th e a c c o m p a n y i n g N o t e s t o F i n a n c i a l S t a t e m e n t s a r e a n i n t e g r a l p a r t o f t h e s e s t a t e m e n t s . 27 CITY OF CLERMONT, FLORIDA STATEMENT OF FIDUCIARY NET ASSETS FIDUCIARY FUNDS September 30, 2009 Total Employee Pension Funds Assets: Cash and cash equivalents $ 67,001 Investments: U.S. Government & other debt securities 3,972,215 Equities 9,040,904 Total investments 13,013,119 Total assets 13,080,120 Liabilities: Accounts payable - Total liabilities - Net Assets Held in Trust for Pension Benefits 13,080,120$ The accompanying Notes to Financial Statements are an integral part of this statement. 28 CITY OF CLERMONT, FLORIDA STATEMENT OF CHANGES IN FIDUCIARY NET ASSETS FIDUCIARY FUNDS For the Year Ended September 30, 2009 Total Employee Pension Funds Additions: Contributions: Employer 1,217,823$ Plan members 99,681 State 370,357 Total contributions 1,687,861 Investment earnings: Net increase in fair value of investments 291,003 Total net investment earnings 291,003 Total additions 1,978,864 Deductions: Benefits/distributions 455,205 Administrative 39,320 Total deductions 494,525 Change in Net Assets 1,484,339 Net Assets - Beginning 11,595,781 Net Assets - End 13,080,120$ The accompanying Notes to Financial Statements are an integral part of this statement. 29 30 NOTES TO FINANCIAL STATEMENTS CITY OF CLERMONT, FLORIDA NOTES TO FINANCIAL STATEMENTS September 30, 2009 Note 1 - Summary of Significant Accounting Policies: A. Reporting Entity The City of Clermont, Florida (the City) is a political subdivision of the State of Florida located in Lake County. The City of Clermont was incorporated under State law in December 1916 and operates under the council-manager form of government under its charter adopted pursuant to H.B. 2223, Ch.67-1217 Special Acts, of the State of Florida. The legislative branch of the City is composed of a Mayor and four (4) members elected Council. The City Council is responsible for the establishment and adoption of policy. The execution of such policy is the responsibility of the Council appointed City Manager. In evaluating how to define the government, for financial reporting purposes, the City 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 it. 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 City has one blended component unit as follows: The City of Clermont Community Redevelopment Fund The City of Clermont created the Downtown Redevelopment Agency 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 City Council, being the duly elected governmental body for the designated area, passed Resolution 97-950, which established the City of Clermont as the Redevelopment Agency for the purpose of carrying out the community redevelopment programs and plans within the area. Through Ordinance 359-M the City established the Community Redevelopment Trust Fund to account for all transactions generated by this special revenue fund. The City of Clermont Community Redevelopment Fund is presented as a blended component unit, since the City Council is the governing board. 31 CITY OF CLERMONT, FLORIDA NOTES TO FINANCIAL STATEMENTS - Continued September 30, 2009 Note 1 - Summary of Significant Accounting Policies (Continued): B. Government-Wide and Fund Financial Statements The government-wide financial statements (i.e., the statement of net assets and the statement of changes in net assets) report information on all of the nonfiduciary activities of the City. 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. Separate financial statements are provided for governmental funds, proprietary funds, and fiduciary funds, even though the latter are excluded from the government-wide financial statements. Major individual governmental funds and major individual enterprise funds are reported as separate columns in the fund financial statements. C. 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, as are the proprietary fund and fiduciary fund financial statements. 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. 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. 32 CITY OF CLERMONT, FLORIDA NOTES TO FINANCIAL STATEMENTS - Continued September 30, 2009 Note 1 - Summary of Significant Accounting Policies (Continued): C. Measurement Focus, Basis of Accounting, and Financial Statement Presentation (Continued) 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 City. The government reports the following funds: Major Governmental Funds The General Fund is the government’s primary operating fund. It accounts for all financial resources of the general government, except those required to be accounted for in another fund. The Community Redevelopment Fund 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. Non-Major Governmental Fund Types Special Revenue Funds account for specific revenue sources that are restricted by law or administrative action to expenditures for specific purposes. Debt Service Fund is used to account for the accumulation of resources for the payment of principal and interest on certain long-term debt. Capital Projects Fund account for financial resources segregated for the acquisition or construction of major capital facilities. Major Proprietary Funds Water Fund is used to account for the operations of the City’s water system, which is financed in a manner similar to private business enterprises, where the costs, including depreciation, of providing services to the general public on an ongoing basis are financed primarily through user charges. 33 CITY OF CLERMONT, FLORIDA NOTES TO FINANCIAL STATEMENTS - Continued September 30, 2009 Note 1 - Summary of Significant Accounting Policies (Continued): C. Measurement Focus, Basis of Accounting, and Financial Statement Presentation (Continued) Major Proprietary Funds (Continued) Sewer Fund is used to account for the operations of the City’s sewer system, which is financed in a manner similar to private business enterprises, where the costs, including depreciation, of providing services to the general public on an ongoing basis are financed primarily through user charges. Sanitation Fund is used to account for the fiscal activities of the City’s refuse collection and disposal operation. Non-Major Proprietary Funds Stormwater Fund (Enterprise Fund) is used to account for the fiscal activities of the City’s stormwater drainage operation, as well as the funding and payment of related debt. Internal Service Fund is used to account for the costs of group insurance which are charged to other departments on a cost reimbursement basis. Fiduciary Funds Pension Trust Funds account for activities of police officers, firefighters and general employees retirement plans which accumulate resources for pension benefit payments to qualified employees. Private-sector standards of accounting and financial reporting issued prior to December 1, 1989, generally are followed in both the government-wide and proprietary fund financial statements to the extent that those standards do not conflict with or contradict guidance of the Governmental Accounting Standards Board. Governments also have the option of following subsequent private-sector guidance for their business-type activities and enterprise funds, subject to this same limitation. The government has elected not to follow subsequent private-sector guidance. As a general rule the effect of interfund activity has been eliminated from the government- wide financial statements. Exceptions to this general rule are other charges between the City’s water and sewer function and various other functions of the government. Elimination of these charges would distort the direct costs and program revenues reported for the various functions concerned. 34 CITY OF CLERMONT, FLORIDA NOTES TO FINANCIAL STATEMENTS - Continued September 30, 2009 Note 1 - Summary of Significant Accounting Policies (Continued): C. Measurement Focus, Basis of Accounting, and Financial Statement Presentation (Continued) 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. Proprietary funds distinguish operating revenues and expenses from nonoperating 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. The principal operating revenues of the City’s water, sewer, sanitation and stormwater utility funds are charges to customers for sales and services. The City also recognizes as operating revenue the meter fees intended to recover the cost of connecting new customers to the system. Operating expenses for enterprise 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 nonoperating revenues and expenses. 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. D. Assets, Liabilities, and Net Assets or Equity 1. 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 City are reported at fair value. The City’s investments consist of investments authorized per their investment policy adopted in accordance with Section 218.415, Florida Statutes. The City has implemented Government Accounting Standards Board (GASB) Statement No. 40, Deposit and Investment Risk Disclosures. 2. Receivables and Payables Activity between funds that are representative of lending/borrowing arrangements outstanding at the end of the fiscal year are referred to as either “due to/from other funds” (i.e., the current portion of interfund loans) or “advances to/from other funds” (i.e., the non-current portion of interfund loans). All other outstanding balances between funds are reported as “due to/from other funds.” 35 CITY OF CLERMONT, FLORIDA NOTES TO FINANCIAL STATEMENTS - Continued September 30, 2009 Note 1 - Summary of Significant Accounting Policies (Continued): D. Assets, Liabilities, and Net Assets or Equity - (Continued) 2. Receivables and Payables - (Continued) Any residual balances outstanding between the governmental activities and business-type activities are reported in the government-wide financial statements as “internal balances”. Advances between funds, as reported in the fund financial statements, are offset by a fund balance reserve account in applicable governmental funds to indicate that they are not available for appropriation and are not expendable available financial resources. All receivables are shown net of an allowance for uncollectables. The County bills and collects property taxes and remits them to the City. City property tax revenues are recognized when levied to the extent that they result in current receivables. All property is reassessed according to its fair value on the lien date, or January 1 of each year. Taxes are levied on October 1 of each year. Discounts are allowed for early payment at the rate of 4% in the month of November, 3% in the month of December, 2% in the month of January, and 1% in the month of February. The taxes paid in March are without discount. All unpaid taxes become delinquent on April 1 following the year in which they are assessed. On or around May 31 following the tax year, certificates are sold for all delinquent taxes on real property. 3. 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. 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. 4. Restricted Assets Certain proceeds of the City’s enterprise fund revenue bonds, as well as certain resources set aside for their repayment, are classified as restricted assets on the balance sheet because they are maintained in separate bank accounts and their use is limited by applicable bond covenants. Assets so designated are identified as restricted assets on the balance sheet. 36 CITY OF CLERMONT, FLORIDA NOTES TO FINANCIAL STATEMENTS - Continued September 30, 2009 Note 1 - Summary of Significant Accounting Policies (Continued): D. Assets, Liabilities, and Net Assets or Equity - (Continued) 5. Capital Assets Capital assets, which include property, plant, equipment, 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 City 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 estimated fair market value at the date of donation. 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. Major outlays for capital assets and improvements are capitalized as projects are constructed. Interest incurred during the construction phase of capital assets of business-type activities is included as part of the capitalized value of the assets constructed. In accordance with GASB Statement 51, beginning balance of capital assets has been reclassified to include intangible assets which had been acquired prior to October 1, 2008. This reclassification had no effect on the beginning balance of total capital assets since intangible assets had been previously recorded and included with equipment and machinery. Capital assets of the City are depreciated using the straight line method over the following estimated useful lives: Assets Years Buildings 10-50 Improvements 15-50 Infrastructure 30-50 Equipment & machinery 3-15 Intangible assets3-15 37 CITY OF CLERMONT, FLORIDA NOTES TO FINANCIAL STATEMENTS - Continued September 30, 2009 Note 1 - Summary of Significant Accounting Policies (Continued): D. Assets, Liabilities, and Net Assets or Equity - (Continued) 6. Compensated Absences It is the City’s policy to permit employees to accumulate earned but unused vacation and sick pay benefits. All vacation pay is accrued when incurred in the government-wide and proprietary financial statements. A portion of sick pay is accrued for employees with at least ten (10) years of service. A liability for these amounts is reported in governmental funds only if they have matured, for example, as a result of employee resignations and retirements. For governmental activities, compensated absences are generally liquidated by the general fund. 7. Long-Term Obligations In the government-wide financial statements, and proprietary fund types in the fund financial statements, long-term debt and other long-term obligations are reported as liabilities in the applicable governmental activities, business-type activities, or proprietary fund type statement of net assets. Bond premiums and discounts, as well as issuance costs, are deferred and amortized over the life of the bonds using the effective interest method. Bonds payable are reported net of the applicable bond premium or discount. Bond issuance costs are reported as deferred charges and amortized over the term of the related debt. In the fund financial statements, governmental fund types recognize bond premiums and discounts, as well as bond issuance costs, during the current period. The face amount of debt issued is reported as other financing sources. Premiums received on debt issuances are reported as other financing sources while discounts on debt issuances are reported as other financing uses. Issuance costs, whether or not withheld from the actual debt proceeds received, are reported as debt service expenditures. 8. Fund Equity In the fund financial statements, governmental funds report reservations of fund balance for amounts that are not available for appropriation or are legally restricted by outside parties for use for a specific purpose. Designations of fund balance represent tentative management plans that are subject to change. 38 CITY OF CLERMONT, FLORIDA NOTES TO FINANCIAL STATEMENTS - Continued September 30, 2009 Note 2 - Reconciliation of Government-Wide and Fund Financial Statements: A. Explanation of Certain Differences Between the Governmental Fund Statement of Revenues, Expenditures, and Changes in Fund Balances and the Government-Wide Statement of Activities The governmental fund statement of revenues, expenditures, and changes in fund balances includes a reconciliation between net changes in fund balances - total governmental funds and changes in net assets of governmental activities as reported in the government-wide statement of activities. One element of that reconciliation explains that “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.” The details of this $438,104 difference are as follows: Capital outlay 2,272,960 Depreciation expense(1,834,856) Net adjustment to increase net changes in fund balances - total governmental funds to arrive at changes in net assets of governmental activities 438,104$ Another element of that reconciliation states that “the issuance of long-term debt (e.g., bonds, leases) provides current financial resources to governmental funds, while the repayment of the principal of long-term debt consumes the current financial resources of governmental funds. Neither transaction, however, has any effect on net assets.” The details of this $6,258,788 difference are as follows: Debt issued or incurred: Principal repayment6,258,788$ Net adjustment to increase net changes in fund balances - total governmental funds to arrive at changes in net assets of governmental activities 6,258,788$ 39 CITY OF CLERMONT, FLORIDA NOTES TO FINANCIAL STATEMENTS - Continued September 30, 2009 Note 2 - Reconciliation of Government-Wide and Fund Financial Statements (Continued): A. Explanation of Certain Differences Between the Governmental Fund Statement of Revenues, Expenditures, and Changes in Fund Balances and the Government-Wide Statement of Activities (Continued) Another element of that reconciliation states that “Some expenses reported in the statement of activities do not require the use of current financial resources and therefore are not reported as expenditures in governmental funds.” The details of this difference are as follows: Compensated absences 59,912$ Accrued interest payable (49,002) Net adjustment to decrease net changes in fund balances - total governmental funds to arrive at changes in net assets of governmental activities 10,910$ Note 3 - Stewardship, Compliance, and Accountability: A. Budgetary Information - The City follows these procedures in establishing the budgetary data reflected in the financial statements: (1) 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. (2) Budget workshops are scheduled as needed. (3) The general summary of the budget and notice of public hearing is published in the local newspaper. (4) Public hearings are conducted to obtain taxpayer comments. (5) Prior to October 1, the budgets are legally enacted through passage of a resolution. (6) 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. (7) The level of classification detail at which expenditures may not legally exceed appropriations is the department level. 40 CITY OF CLERMONT, FLORIDA NOTES TO FINANCIAL STATEMENTS - Continued September 30, 2009 Note 3 - Stewardship, Compliance, and Accountability (Continued): A. Budgetary Information - (Continued) (8) Appropriations lapse at the close of the fiscal year to the extent they have not been expended. Encumbrance accounting is not used by the City. (9) Budgets are adopted for the general fund, special revenue funds, debt service funds and the capital projects 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, these data are not presented under generally accepted accounting principles. (10) 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. B. Excess of Expenditures over Appropriations - For the year ended September 30, 2009, expenditure exceeded appropriations in the Recreation Impact Fees Special Revenue Fund, Fire Impact Fees Special Revenue Fund, and Infrastructure Special Revenue Fund. These over expenditures were funded by greater than anticipated revenues and by available fund balance. C. Appropriations in Excess of Funds Available - Appropriations for the Recreation Impact Fee Special Revenue Fund were in excess of anticipated revenue and prior years’ fund balance. D. Deficit Net Assets - The Internal Service Fund has a deficit net asset balance of $135,065 at September 30, 2009. E. Budgetary Basis of Accounting - The city includes a portion of the prior year’s fund balances represented by unappropriated liquid assets remaining in the fund as budgeted revenue in the succeeding year. The results of operations on a GAAP basis do not recognize the fund balance allocation as revenue as it represents prior periods’ excess of revenues over expenditures. The City does not budget for capital outlay expenditures and other financing sources related to the acquisition of assets through notes payable. Also, the City does not budget for the state pension contributions that must be recorded as intergovernmental revenue and public safety expenditures in the General Fund GAAP financial statements. 41 CITY OF CLERMONT, FLORIDA NOTES TO FINANCIAL STATEMENTS - Continued September 30, 2009 Note 3 - Stewardship, Compliance, and Accountability (Continued): E. Budgetary Basis of Accounting - (Continued) For the fiscal year ended September 30, 2009 the following adjustments are necessary to convert General Fund revenues and expenditures on the GAAP basis to the budgetary basis: Revenues Expenditures General Fund: GAAP Basis20,808,173$ 22,475,024$ Nonbudgeted state pension amounts (370,357) (370,357) Budgetary basis 20,437,816$ 22,104,667$ Note 4 - Cash and Investments: Deposits At year-end, the carrying amount of the City's deposits was $14,645,577 and the bank balance was $15,258,779. Fiduciary fund cash held by the pension fund is not in the City’s bank. 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. The City’s investment policies are governed by state statute and city ordinance. Authorized investments are: (a) The Local Government Surplus Funds Trust (SBA). (b) SEC registered money market funds. (c) Interest-bearing time deposits or savings accounts in qualified public depositories. (d) Direct obligations of the U.S. Treasury. 42 CITY OF CLERMONT, FLORIDA NOTES TO FINANCIAL STATEMENTS - Continued September 30, 2009 Note 4 - Cash and Investments (Continued): Investments - (Continued) (e) Federal agencies and instrumentalities. (f) 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. (g) Repurchase Agreements. (h) Other investments authorized by ordinance. The assets of the City’s police and firefighters pension funds, as well as the general employees defined benefit pension fund, are invested in the pooled investment fund for the Florida Municipal Pension Trust Fund (FMPTF). Investments held in this fund consist of corporate bonds and stocks and cash equivalents. The fund is stated at fair value, and investment earnings are allocated to participants in the fund based on their equity in this pooled investment account is stated at fair value as provided by the Florida Municipal Pension Fund. Investments made by the City of Clermont at September 30, 2009 are summarized below. Defined benefit pension plan investments, other than $9,040,904 in mutual funds investing in equity securities, are included below. In accordance with GASB 31, investments are reported at fair value. Investment Type Fair ValueCredit Rating Weighted Average Maturity Certificates of Deposit15,000,000$ Unrated 43 days Federal Agency Bond10,651,203 AAA648 days US Treasury Bond 4,003,180 TSY 648 days US Treasury Bill 2,265,630 TSY 648 days Government supported corporate debt 2,521,108 AAA 648 days Pension fixed income securities 3,972,215 AA/V4 4.81 years 38,413,336$ Credit Risk: The City’s investment policy limits credit risk by restricting authorized investments to those described above. 43 CITY OF CLERMONT, FLORIDA NOTES TO FINANCIAL STATEMENTS - Continued September 30, 2009 Note 4 - Cash and Investments (Continued): Investments - (Continued) Custodial Credit Risk: In the case of deposits, this is the risk that in the event of a bank failure, the City’s deposits may not be returned to it. The City’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, 2009, all of the city’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, 2009, 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 City’s investment policy requires diversification, but does not specify limits on types of investments. Interest Rate Risk: The City’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 City 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. 44 CITY OF CLERMONT, FLORIDA NOTES TO FINANCIAL STATEMENTS - Continued September 30, 2009 Note 5 - Receivables: Receivables as of year end for the City’s individual major funds and non-major funds, including the applicable allowances for uncollectible accounts, are as follows: Nonmajor Nonmajor General Water Sewer Sanitation EnterpriseGovernmental Fund Fund Fund Fund Fund Funds Total Receivables: Accounts 851$ 340,603$ 433,502$ 244,644$ 81,194$ -$ 1,100,794$ Taxes 41,605 - - - - - 41,605 Other 637,149 67,120 407,237 - - 139,068 1,250,574 Less allowance for uncollectible accounts (326) (21,910) (28,417) (17,180) (5,754) - (73,587) 679,279$ 385,813$ 812,322$ 227,464$ 75,440$ 139,068$ 2,319,386$ 45 CITY OF CLERMONT, FLORIDA NOTES TO FINANCIAL STATEMENTS - Continued September 30, 2009 Note 6 - Capital Assets: Capital asset activity for the year ended September 30, 2009 was as follows: Beginning BalanceIncreasesDecreasesEnding Balance Governmental Activities: Capital assets, not being depreciated: Land 21,652,809$ 265,460$ (141,717)$ 21,776,552$ Construction in progress 1,500,5651,719,203 (472,451) 2,747,317 Total capital assets, not being depreciated 23,153,374 1,984,663 (614,168) 24,523,869 Capital assets, being depreciated: Buildings 9,925,313 556,724 (30,975) 10,451,062 Improvements/infrastructure 13,184,458 64,561 (1,617,975) 11,631,044 Machinery and equipment 8,639,505 441,480 (1,037,996) 8,042,989 Intangibles 443,546 68,642 - 512,188 Total capital assets being depreciated 32,192,822 1,131,407 (2,686,946) 30,637,283 Less accumulated depreciation for: Buildings (4,101,819) (356,031) 32,610 (4,425,240) Improvements/infrastructure (7,679,195) (483,622) 1,333,446 (6,829,371) Machinery and equipment (5,298,289) (993,851) 957,684 (5,334,456) Intangibles (12,878) (88,385) - (101,263) Total accumulated depreication (17,092,181) (1,921,889) 2,323,740 (16,690,330) Total capital assets being depreciated, net 15,100,641 (790,482) (363,206) 13,946,953 Governmental activities capital assets, net 38,254,015$ 1,194,181$ (977,374)$ 38,470,822$ Business-type activities: Capital assets, not being depreciated: Land 1,464,129$ -$ (6,156)$ 1,457,973$ Construction in progress 26,756,4277,424,652 (20,560,770) 13,620,309 Total capital assets, not being depreciated 28,220,556 7,424,652 (20,566,926) 15,078,282 Capital assets, being depreciated: Buildings 41,324 - (4,146) 37,178 Improvements/infrastructure 45,380,57622,003,596 (186,148) 67,198,024 Machinery and equipment 4,514,770 150,576 (832,230) 3,833,116 Intangibles 127,027 9,750 - 136,777 Total capital assets being depreciated 50,063,697 22,163,922 (1,022,524) 71,205,095 Less accumulated depreciation for: Buildings (41,020) (76) 4,146 (36,950) Improvements/infrastructure (12,590,006) (937,592) 185,779 (13,341,819) Machinery and equipment (2,378,730) (385,691) 750,610 (2,013,811) Intangibles (102,503) (5,552) - (108,055) Total accumulated depreication (15,112,259) (1,328,911) 940,535 (15,500,635) Total capital assets being depreciated, net 34,951,438 20,835,011 (81,989) 55,704,460 Business-type activities capital assets, net 63,171,994$ 28,259,663$ (20,648,915)$ 70,782,742$ 46 CITY OF CLERMONT, FLORIDA NOTES TO FINANCIAL STATEMENTS - Continued September 30, 2009 Note 6 - Capital Assets (Continued): Depreciation expense was charged to functions/programs as follows: General government 880,305$ Public safety 780,362 Physical environment/transportation 28,728 Culture and recreation 145,461 Total depreciation expense - governmental activities 1,834,856$ Water 442,124 Sewer 562,687 Sanitation 235,598 Stormwater 88,502 Total depreciation expense - business-type activities 1,328,911$ Governmental activities: Business-type activities For the governmental activities, total depreciation expense does not equal increases to accumulated depreciation due to asset transfers from enterprise funds to governmental activities. The city has restated the beginning balance for capital assets to include intangible assets in accordance with GASB 51. Total net assets were not affected as a result of this restatement. All intangible assets had previously been included as a part of Machinery and Equipment totals. Note 7 - Long-Term Debt: Bonds Payable The City issues bonds to provide funds for the acquisition and construction of major capital assets. Bonds have been issued for both governmental and business-type activities. The 2002 Public Improvement Revenue Bonds are secured by Public Service Tax, Communication Service Tax and Half Cent Sales Tax revenue. The total principal and interest remaining to be paid on this series is $5,465,029. For the fiscal year, principal and interest paid on this series was $635,106 and total pledged revenue was $4,136,638. The 2000 Water and Sewer Revenue and Refunding Bonds are secured by net revenue of the water and sewer system. The total principal and interest remaining to be paid on this series is $28,644,738. For the fiscal year, principal and interest paid on this series was $1,293,206 and total pledged revenue was $4,050,462. 47 CITY OF CLERMONT, FLORIDA NOTES TO FINANCIAL STATEMENTS - Continued September 30, 2009 Note 7 - Long-Term Debt (Continued): Bonds Payable - (Continued) The original amount of revenue bonds issued in prior years is described below. Revenue bonds outstanding at year end are as follows: Governmental Activities Interest Rates and Dates Maturity Original Amount Balance September 30, 2009 Public Improvement 1.75 - 4.6%12/1/2003 Revenue Bonds,to Series 2002 (6/1 & 12/1)12/1/2017 6,965,000$ 4,495,000$ Business-Type Activities Water and Sewer Revenue 4.4 - 5.25%12/1/2004 and Refunding Bonds,to Series 2000 (6/1 & 12/1)12/1/2030 17,935,000$ 16,655,000$ Annual debt service requirements to maturity for revenue bonds are as follows: Year ending September 30,Principal Interest Principal Interest 2010 455,000$ 187,406$ 430,000$ 873,725$ 2011 470,000 170,913 450,000 853,838 2012 490,000 152,700 470,000 832,688 2013 510,000 133,100 490,000 810,363 2014 530,000 112,700 515,000 786,475 2015-2019 2,040,000 213,210 3,000,000 3,512,513 2020-2024 - - 3,870,000 2,639,642 2025-2029 - - 5,025,000 1,484,844 2030-2031 - - 2,405,000 195,650 Total 4,495,000$ 970,029$ 16,655,000$ 11,989,738$ Governmental Activities Business - Type Activities 48 CITY OF CLERMONT, FLORIDA NOTES TO FINANCIAL STATEMENTS - Continued September 30, 2009 Note 7 - Long-Term Debt (Continued): Notes Payable The City has one note payable for governmental activities. During 2009, the City paid in full the Inland Groves Note. Notes payable outstanding at year end is as follows: Balance Governmental Activities Original Amount September 30, 2009 Capital Improvement Notes, Series 1999 due to SunTrust Bank in ten annual installments of $40,264 (including interest) beginning December 2000. The notes bear an interest rate of 5.742%. The loan was obtained to purchase a fire truck.300,000$ 38,077$ Inland Groves North Note, due to individual in quarterly interest only payments of $57.828 (4%). Final principal payment due on July 14, 2011.6,000,000 - Total 6,300,000$ 38,077$ Annual requirements to amortize outstanding notes payable for governmental activities as of September 30, 2009 are as follows: Year ending September 30,Principal Interest 2010 38,077$ 1,093$ Total 38,077$ 1,093$ Governmental Activities 49 CITY OF CLERMONT, FLORIDA NOTES TO FINANCIAL STATEMENTS - Continued September 30, 2009 Note 7 - Long-Term Debt (Continued): Changes in Long-Term Liabilities Long-term liability activity for the year ended September 30, 2009 was as follows: Beginning Balance AdditionsDeductions Ending Balance Due Within One Year Governmental activities Bonds payable- Revenue Bonds 4,935,000$ -$ (440,000)$ 4,495,000$ 455,000$ Notes payable- Revenue note, Series 1999 74,087 - (36,010) 38,077 38,077 Inland Groves North 5,782,778 (5,782,778) - - Total notes payable5,856,865 - (5,818,788) 38,077 38,077 Compensated Absences 527,904 59,912 - 587,816 58,782 Governmental activity long- term liabilities 11,319,769$ 59,912$ (6,258,788)$ 5,120,893$ 551,859$ Business-type activities Bonds payable- Revenue Bonds 17,065,000$ -$ (410,000)$ 16,655,000$ 430,000$ Less deferred amount: Issuance discount (461,961) -38,566 (423,395) - Total bonds payable16,603,039 - (371,434) 16,231,605 430,000 Compensated Absences 269,274 (35,770) 233,504 23,351 Business-type activity long- term liabilities 16,872,313$ -$ (407,204)$ 16,465,109$ 453,351$ 50 CITY OF CLERMONT, FLORIDA NOTES TO FINANCIAL STATEMENTS - Continued September 30, 2009 Note 8 - Interfund Receivables, Payables and Transfers: Interfund transfers for the year ended September 30, 2009 consisted of the following: GeneralWaterSewerStormwaterNonmajor Governmental Capital Assets Transfers Out:FundFundFundFundGovernmental(not a fund)Total General Fund -$ -$ -$ -$ 76,731$ -$ $ 76,731 Nonmajor governmental2,585,181 3,570,384 6,155,565 Water fund 451,982 633,409 8,542 1,093,933 Sewer fund 15,201 8,047 23,248 Sanitation fund 428 4,923 -- 5,351 Stormwater fund 1,497 1,497 3,037,163$ 15,201$ 635,334$ 4,923$ 3,647,115$ 16,589$ 7,356,325$ Transfer In Most of the transfers above are to cover debt service payments for the 2002 Public Improvement Revenue Bonds and for the payoff of the Inland Groves Note, and also to cover costs of various capital projects. The transfer out of the Water Fund is to cover non- operating expenditures. Transfers in the fund statements do not balance due to the transfer of capital assets out of the enterprise funds into the governmental capital assets in the amount of $16,589. Note 9 - Retirement Plans: The City maintains three separate single-employer, defined benefit plans for general employees, sworn police officers and firefighters, as well as a defined contribution plan for general employees. The investment and administrative agent for the defined benefit plans is the Florida Municipal Pension Trust Fund, an agent of the multiple-employer Public Employee Retirement System. The assets of the defined contribution plan are administered by Met Life. Defined Benefit Pension Plans - Each plan is independently governed by separate boards of trustees. Assets may not be transferred between plans, or used for any purpose other than to benefit each plan’s participants as defined in their authorizing ordinances. Each board contracts with the Florida Municipal Pension Trust Fund (FMPTF), a private, not-for-profit corporation established by the Florida League of Cities (FLC) for FLC members who wish to use its services. The FMPTF acts as a common investment and administrative agent for its members, contracting with a bank custodian, investment manager and actuary to provide a commingled investment fund and plan valuation services. These plans are included as part of the City’s reporting entity in Pension Trust Funds. The Clermont City Council adopted and may amend plan provisions by resolution. Stand-alone audited financial statements of the FMPTF are maintained on file at the FLC offices in Tallahassee, Florida, and are available upon request to the Pension Services Division. 51 CITY OF CLERMONT, FLORIDA NOTES TO FINANCIAL STATEMENTS - Continued September 30, 2009 Note 9 - Retirement Plans (Continued): Summary of Significant Accounting Policies Basis of Accounting - The Plans’ financial statements are prepared using the accrual basis of accounting. Plan member contributions are recognized in the period in which the contributions are due. Employer contributions to each Plan are recognized when due and the employer has made a formal commitment to provide the contributions. Benefits and refunds are recognized when due and payable in accordance with the terms of each plan. Method Used to Value Investments - Investments are reported at fair value. Short-term investments are reported at cost, which approximates fair value. Securities traded on a national or international exchange are valued at the last reported sales price at current exchange rates. Investments that do not have an established market are reported at estimated fair value. There are no investments that exceed 5% of the plan net assets. Publicly available financial reports for each plan, that include detailed actuarial data, can be obtained from the City’s Administrative Services Department. Plan Descriptions and Contribution Information - Membership of each of the defined benefit pension plans consisted of the following at October 1, 2007, the date of the latest actuarial valuation: General EmployeesPolice Officers Firefighters Retirees and beneficiaries currently receiving benefits 12 6 1 Terminated plan members entitled to, but not yet receiving, benefits - 20 54 Active plan members - 49 43 Total 12 75 98 Plan Descriptions- The general employees defined benefit pension plan is for general employees hired prior to September 30, 1985. The police officers’ and firefighters’ defined benefit pension plans are both local law, single employer, defined benefit pension plans as defined under Florida Statutes, Chapters 175 and 185, which covers all sworn police officers and firefighters. Employees are eligible to participate in the plan immediately upon employment with the City, and they are vested in the plan after ten years of service. The normal retirement date for firefighters is the attainment of age 55 and 10 years of service, or earlier attainment of age 52 and 25 years of service. The normal retirement date for police officers is the attainment of age 55 and 10 years of service, or 20 years of service, regardless of age. The normal retirement benefit is the number of years of credited service prior to October 1, 2002 multiplied by 2.25%, and the number of years of credited service after October 1, 2002 multiplied by 3%, and multiplied by the average final monthly compensation. 52 CITY OF CLERMONT, FLORIDA NOTES TO FINANCIAL STATEMENTS - Continued September 30, 2009 Note 9 - Retirement Plans (Continued): Early retirement is available after age 50 and 10 years of service; however, the early retirement benefit is reduced by 2% for each year before the normal retirement date. Contributions - The City’s actuarially determined contribution rate per the October 1, 2007 actuarial valuations is 0% for general employees, 22.99% for police officers and 19.66% for firefighters. Police officers make a minimum mandatory contribution of 3% and firefighters make a minimum mandatory contribution of 1%, in order to take advantage of the insurance premium tax rebate provided for in the statutes. Administrative costs are deducted from the net assets of the plan. Annual Pension Cost and Net Pension Obligation - The City’s annual pension cost and net pension obligation for the current year were as follows: General Police Employees Officers Firefighters Annual Required Contribution (ARC) $ - $ 570,869 $ 420,790 Adjustment to ARC - - - Annual Pension Cost $ - $ 570,869 $ 420,790 The City has always contributed the ARC and thus has never been required to report a net pension obligation. Below is the required three-year trend information on annual pension cost. Three-Year Trend Information Annual Fiscal Year Ending Pension Cost (APC) Percentage of APC Contributed General Employees 9/30/09 $ - 100% 9/30/08 - 100 9/30/07 19,697 100 Police Officers 9/30/09 $ 570,869 100% 9/30/08 541,697 100 9/30/07 376,518 100 Firefighters 9/30/09 $ 420,790 100% 9/30/08 410,350 100 9/30/07 199,989 100 53 CITY OF CLERMONT, FLORIDA NOTES TO FINANCIAL STATEMENTS - Continued September 30, 2009 Note 9 - Retirement Plans (Continued): Funded Status and Funding Progress – Pension Plans The funded status of each plan as of October 1, 2007, the most recent actuarial valuation date, is as follows: Actuarial Value of Assets (a) Actuarial Acrued Liability (AAL) - Entry Age (b) Unfunded AAL (UAAL) (b - a) Funded Ratio (a / b) Covered Payroll (c) UAAL as a Percentage of Covered Payroll ((b - a) / c) General Employees822,401$ 822,401$ -$ 100.0%-$ N/A Police Officers 4,905,071 4,905,071 - 100.0%2,356,375 0.0% Fifefighters 1,972,299 1,972,299 - 100.0%2,031,236 0.0% The schedules of funding progress, presented as required supplementary information (RSI) following the notes to the financial statements, present multiyear trend information about whether the actuarial values of plan assets are increasing or decreasing over time relative to the AALs for benefits. The City uses the aggregate actuarial cost method to value its pension plans, which does not identify or separately amortize unfunded actuarial liabilities. Information about the plan’s funded status and funding progress has been prepared using the entry age actuarial cost method for that purpose, and the information presented is intended to serve as a surrogate for the funded status and funding progress of the plan. Additional information as of the latest actuarial valuation follows: General Employees Police Officers Firefighters Valuation date 10/1/2007 10/1/2007 10/1/2007 Actuarial Cost Method Aggregate CostAggregate CostAggregate Cost Amortization Method N/A N/A N/A Remaining Amortization Period N/A N/A N/A Asset Valuation Method Market Value Market ValueMarket Value Actuarial Assumptions: Investment rate of return 7.5%7.5%7.5% Projected salary increases (including inflation of 3.5%)0.0%5.5%5.5% 54 CITY OF CLERMONT, FLORIDA NOTES TO FINANCIAL STATEMENTS - Continued September 30, 2009 Note 9 - Retirement Plans (Continued): General Employee Defined Contribution Pension Plan - The defined Contribution Pension Plan for General Employees of the City of Clermont was established October 1, 1985, as defined in Chapter 16, Article IV, of the Clermont Code, and is available to all permanent general employees of the City, once they have completed one year of employment. Employees are fully vested in the plan after ten years of service. In a defined contribution plan, benefits depend solely on amounts contributed to the plan, plus investment earnings. Contributions for, and interest forfeited by, employees who terminate employment before five years of service are used to reduce the City’s current period contributions. Covered payroll for this Plan for fiscal year 2009 was $5,954,160; the City’s total payroll for City employees was $11,300,373. The City contributes annually to the pension account of each active participant an amount equal to ten percent (10%) of the employee’s annual compensation. No contribution is required by employees. The City of Clermont City Council adopted and may amend plan provision by resolution. The actual contribution made by the City for fiscal year 2009 was $409,966. Note 10 - Post-Retirement Benefits: Retired employees have the option of continuing the same type of health and dental insurance coverage available to them while they were employed with the City. The cost of the premiums is shared by the City and the retirees. Note 11 - Risk Management: During fiscal year 1990, the City established an internal service fund to account for its uninsured risk of loss for employee medical and dental coverage. Under this program, the fund provides coverage for the first $50,000 per year in medical, dental, or prescription claims for each covered employee. The City purchases commercial insurance for claims in excess of coverage provided by the fund with a total aggregate stop-loss of $2,000,000. There has been no reduction in insurance coverage from that carried in the prior year. Claims provided have not exceeded insurance coverage in any of the past three fiscal years. 55 CITY OF CLERMONT, FLORIDA NOTES TO FINANCIAL STATEMENTS - Continued September 30, 2009 Note 11 - Risk Management (Continued): The general, water, sewer, sanitation and stormwater funds participate in the program and make payments to the internal service fund based on the number of employees budgeted in each fund. The claims liability of $165,714 represents claims processed through November 2009 which were applicable to the current fiscal year and any additional claims are deemed immaterial. Changes to the current claims liability are as follows: 2009 2008 Claims liabilities, beginning of year 414,506$ 272,165$ Incurred Claims 2,838,872 2,138,680 Payments on Claims (3,087,664) (1,996,339) Claims liabilities, end of year 165,714$ 414,506$ Note 12 - Commitments and Contingencies: Litigation - The City is engaged in various liability claims incidental to the conduct of its general government operations at September 30, 2009. 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 City. Risk Management - The City 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 City carries commercial insurance. The City 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 13 - Subsequent Events: The city refunded the 2000 Water and Sewer Revenue and Refunding Bonds in December 2009. The Water and Sewer Revenue Refunding Bonds, Series 2009, has a variable interest rate with principal and interest payments due through maturity date of December 1, 2030. 56 REQUIRED SUPPLEMENTAL INFORMATION CITY OF CLERMONT, FLORIDA REQUIRED SUPPLEMENTARY INFORMATION September 30, 2009 Schedules of Funding Progress - Pension Plans Actuarial Valuation Date Actuarial Value of Assets (a) Actuarial Acrued Liability (AAL) - Entry Age (b) Unfunded AAL (UAAL) (b - a) Funded Ratio (a / b) Covered Payroll (c) General Employees 10/1/2002852,955 852,955 - 100.0%- 10/1/2003863,029 863,029 - 100.0%- 10/1/2004863,278 863,278 - 100.0%- 10/1/2005816,972 816,972 - 100.0%- 10/1/2006794,277 794,277 - 100.0%- 10/1/2007822,401 822,401 - 100.0%- Police Officers 10/1/20012,392,277 2,392,277 - 100.0%714,709 10/1/20023,268,335 2,368,335 - 100.0%1,042,972 10/1/20032,762,688 2,762,688 - 100.0%1,279,696 10/1/20043,032,203 3,032,203 - 100.0%1,424,568 10/1/20053,571,295 3,571,295 - 100.0%1,534,254 10/1/20074,905,071 4,905,071 - 100.0%2,356,375 Fire Fighters 10/1/2002861,722 861,722 - 100.0%512,906 10/1/2003814,097 814,097 - 100.0%597,364 10/1/2004974,966 974,966 - 100.0%901,980 10/1/20051,256,347 1,256,347 - 100.0%1,047,097 10/1/2006 1,345,093 1,345,093 - 100.0%1,257,860 10/1/20071,972,299 1,972,299 - 100.0%2,031,230 57 CITY OF CLERMONT, FLORIDA REQUIRED SUPPLEMENTARY INFORMATION September 30, 2009 Schedules of Employer Contributions - Pension Plans Year Ended 9/30 Annual Required Contribution Percentage Contributed Annual Required Contribution Percentage Contributed Annual Required Contribution Percentage Contributed 20045,454$ 100%249,332$ 100%103,481$ 100% 2005 7,897 100%277,060 100%160,454 100% 200619,697 100%291,677 100%189,164 100% 200719,697 100%376,518 100%199,989 100% 2008 - 100%541,697 100%410,350 100% 2009 - 100%570,869 100%420,790 100% General Employees Police Officers Firefighters Employer Contributions 58 COMBINING AND INDIVIDUAL FUND STATEMENTS AND SCHEDULES OTHER GOVERNMENTAL FUNDS Special Revenue Funds Recreation Impact Fees Fund This fund was established to account for recreation impact fees collected from new developments constructed in the City. Police Impact Fees Fund This fund was established to account for police impact fees collected from new developments constructed in the City. Fire Impact Fees Fund This fund was established to account for fire impact fees collected from new developments constructed in the City. Building Services Fund This fund was established to account for the operations of the City’s building and other permits department. Infrastructure Fund This fund was established to account for the proceeds of the Local Government Infrastructure Surtax. The proceeds and interest accrued thereto, by law are only to be used to finance, plan and construct infrastructure. Debt Service Fund Debt Service Fund This fund was established to account for the accumulation of resources and payment of bond principal and interest from governmental resources. Capital Projects Fund Capital Projects Fund This fund was established to account for the acquisition of capital assets or construction of major capital projects not being financed by proprietary funds. Permanent Fund Cemetery Perpetual Care Fund This fund is used to account for monies provided by people buying lots in the City cemetery. The principal must be kept separate and apart from all other funds, but the interest may be transferred to the General Fund to defray the cost of cemetery operation and maintenance. 59 Special Revenue Recreation Impact Fees Police Impact Fees Fire Impact Fees Building Services Infrastructure Special Revenue Assets: Cash and cash equivalents259,557$ 118,746$ 154,311$ 97,952$ 353,842$ Investments 500,000 2,000,000 - - 500,000 Other receivables 11,589 46,356 - - 11,589 Due from other governments - - - - 122,491 Prepaid expenses - - - 19,045 - Total assets 771,146$ 2,165,102$ 154,311$ 116,997$ 987,922$ Liabilities and Fund Balances: Liabilities: Accounts payable -$ 2,110$ 13,877$ 30,292$ -$ Accrued Liabilities - - - 2,295 - Total liabilities - 2,110 13,877 32,587 - Fund balances: Reserved for: Dbti CITY OF CLERMONT, FLORIDA COMBINING BALANCE SHEET OTHER GOVERNMENTAL FUNDS September 30, 2009 Debt service - - - - - Perpetual care - - - - - Unreserved 771,146 2,162,992 140,434 84,410 987,922 Total fund balances 771,146 2,162,992 140,434 84,410 987,922 Total liabilities and fund balances 771,146$ 2,165,102$ 154,311$ 116,997$ 987,922$ 60 Special Revenue TotalDebt ServiceCapital Projects Permanent Fund - Cemetery Perpetual Care Total Nonmajor Governmental Funds 984,408$ 365,590$ 388,673$ 720,610$ 2,459,281$ 3,000,000 - 3,000,000 - 6,000,000 69,534 - 69,534 - 139,068 122,491 - - - 122,491 19,045 - - - 19,045 4,195,478$ 365,590$ 3,458,207$ 720,610$ 8,739,885$ 46,279$ -$ 187,177$ -$ 233,456$ 2,295 - - - 2,295 48,574 - 187,177 - 235,751 365590 365590- 365,590 - - 365,590 - - - 720,610 720,610 4,146,904 - 3,271,030 - 7,417,934 4,146,904 365,590 3,271,030 720,610 8,504,134 4,195,478$ 365,590$ 3,458,207$ 720,610$ 8,739,885$ 61 Special Revenue Recreation Impact Fees Police Impact Fees Fire Impact Fees Building Services Revenues: Licenses and permits-$ -$ -$ 447,420$ Intergovernmental - - - - Charges for services - - - 116,183 Impact fees/special assessments 553,151 208,161 141,593 - Investment earnings 13,406 50,973 643 270 Miscellaneous - - - - Total revenues 566,557 259,134 142,236 563,873 Expenditures: Current: General government - - - 508,864 Public safety - 116,102 - - Culture and recreation 183,244 - - - Debt Service Principal - - 36,010 - Interest and other charges 175,860 - 3,268 - Capital Outlay: Public safety - - - - Culture and recreation - - - - Total expenditures 359,104 116,102 39,278 508,864 Excess (Deficiency) of Revenues Over Expenditures 207,453 143,032 102,958 55,009 Other Financing Sources (Uses): Transfers in - - - - Transfers out (10,588) - (102,308) - Total other financing sources (uses)(10,588) - (102,308) - Net Change in Fund Balances 196,865 143,032 650 55,009 Fund Balances - Beginning 574,281 2,019,960 139,784 29,401 Fund Balances - Ending 771,146$ 2,162,992$ 140,434$ 84,410$ CITY OF CLERMONT, FLORIDA COMBINING STATEMENT OF REVENUES, EXPENDITURES AND CHANGES IN FUND BALANCES OTHER GOVERNMENTAL FUNDS Year Ended September 30, 2009 62 Infrastructure Special Revenue TotalDebt ServiceCapital Projects Permanent Fund - Cemetery Perpetual Care Total Nonmajor Governmental Funds -$ 447,420$ -$ -$ -$ 447,420$ 1,764,949 1,764,949 - - - 1,764,949 - 116,183 - - - 116,183 - 902,905 - - - 902,905 130,057 195,349 785 74,072 1,594 271,800 - - - 18,929 77,400 96,329 1,895,006 3,426,806 785 93,001 78,994 3,599,586 518 509,382 - - - 509,382 - 116,102 - - - 116,102 - 183,244 - 3,914 - 187,158 - 36,010 440,000 - - 476,010 - 179,128 195,556 - - 374,684 - - - 1,608,254 - 1,608,254 - - - 130,116 - 130,116 518 1,023,866 635,556 1,742,284 - 3,401,706 1,894,488 2,402,940 (634,771) (1,649,283) 78,994 197,880 - - 639,425 3,007,690 - 3,647,115 (3,457,488) (3,570,384) - (2,583,552) (1,629) (6,155,565) (3,457,488) (3,570,384) 639,425 424,138 (1,629) (2,508,450) (1,563,000) (1,167,444) 4,654 (1,225,145) 77,365 (2,310,570) 2,550,922 5,314,348 360,936 4,496,175 643,245 10,814,704 987,922$ 4,146,904$ 365,590$ 3,271,030$ 720,610$ 8,504,134$ Special Revenue 63 CITY OF CLERMONT, FLORIDA SCHEDULE OF REVENUES, EXPENDITURES AND CHANGES IN FUND BALANCE - BUDGET AND ACTUAL Budgeted Amounts Actual Amounts Variance with Final Budget - Positive (Negative) Original Final Revenues: Impact fees/special assessments 560,000$ 560,000$ 553,151$ (6,849)$ Investment earnings 15,000 15,000 13,406 (1,594) Total revenues 575,000 575,000 566,557 (8,443) Expenditures: Current: Culture and recreation 15,000 177,415183,244 (5,829) Debt Service: Interest and other charges 231,308 231,308 175,860 55,448 Total expenditures 246,308 408,723 359,104 49,619 Excess (Deficiency) of Revenues Over Expenditures 328,692 166,277 207,453 41,176 Other Financing Sources (Uses) Transfers out (750,000) (750,000) (10,588) 739,412 Total other financing sources (uses)(750,000) (750,000) (10,588) 739,412 Net Change in Fund Balances (421,308) (583,723) 196,865 780,588 Fund Balances - Beginning 574,281 574,281 574,281 - Fund Balances - Ending 152,973$ (9,442)$ 771,146$ 780,588$ RECREATION IMPACT FEE SPECIAL REVENUE FUND Year Ended September 30, 2009 64 SCHEDULE OF REVENUES, EXPENDITURES AND CHANGES IN FUND BALANCE - BUDGET AND ACTUAL Budgeted Amounts Actual Amounts Variance with Final Budget - Positive (Negative) Original Final Revenues: Impact fees/special assessments 216,900$ 216,900$ 208,161$ (8,739)$ Investment earnings 35,000 35,000 50,973 15,973 Total revenues 251,900 251,900 259,134 7,234 Expenditures: Current: Public Safety: Law enforcement 747,435 849,972 116,102 733,870 Total expenditures 747,435 849,972 116,102 733,870 Excess (Deficiency) of Revenues Over Expenditures (495,535) (598,072) 143,032 741,104 Net Change in Fund Balances (495,535) (598,072) 143,032 741,104 Fund Balances - Beginning 2,019,960 2,019,960 2,019,960 - Fund Balances - Ending 1,524,425$ 1,421,888$ 2,162,992$ 741,104$ POLICE IMPACT FEE SPECIAL REVENUE FUND CITY OF CLERMONT, FLORIDA Year Ended September 30, 2009 65 SCHEDULE OF REVENUES, EXPENDITURES AND CHANGES IN FUND BALANCE - BUDGET AND ACTUAL Budgeted Amounts Actual Amounts Variance with Final Budget - Positive (Negative) Original Final Revenues: Impact fees/special assessments 150,000$ 150,000$ 141,593$ (8,407)$ Investment earnings 2,100 2,100 643 (1,457) Total revenues 152,100 152,100 142,236 (9,864) Expenditures: Current: Public safety: Fire control 55,500 2,770 - 2,770 Debt Service: Principal retirement 36,009 36,009 36,010 (1) Interest and fiscal charges 3,220 3,220 3,268 (48) Total expenditures 94,729 41,999 39,278 2,721 Excess (Deficiency) of Revenues Over Expenditures 57,371 110,101 102,958 (7,143) Other Financing Sources (Uses): Transfers out (101,617) (101,617) (102,308) (691) Total other financing sources (uses)(101,617) (101,617) (102,308) (691) Net Change in Fund Balances (44,246) 8,484 650 (7,834) Fund Balances - Beginning 139,784 139,784 139,784 - Fund Balances - Ending 95,538$ 148,268$ 140,434$ (7,834)$ CITY OF CLERMONT, FLORIDA FIRE IMPACT FEE SPECIAL REVENUE FUND Year Ended September 30, 2009 66 SCHEDULE OF REVENUES, EXPENDITURES AND CHANGES IN FUND BALANCE - BUDGET AND ACTUAL Budgeted Amounts Actual Amounts Variance with Final Budget - Positive (Negative) Original Final Revenues: Licenses and permits 500,000$ 500,000$ 447,420$ (52,580)$ Charges for services 70,000 70,000 116,183 46,183 Investment earnings - - 270 270 Total revenues 570,000 570,000 563,873 (6,127) Expenditures: Current: General government 570,000 570,000 508,864 61,136 Total expenditures 570,000 570,000 508,864 61,136 Excess (Deficiency) of Revenues Over Expenditures - - 55,009 55,009 Net Change in Fund Balances - - 55,009 55,009 Fund Balances - Beginning 29,401 29,401 29,401 - Fund Balances - Ending 29,401$ 29,401$ 84,410$ 55,009$ CITY OF CLERMONT, FLORIDA BUILDING SERVICES SPECIAL REVENUE FUND Year Ended September 30, 2009 67 SCHEDULE OF REVENUES, EXPENDITURES AND CHANGES IN FUND BALANCE - BUDGET AND ACTUAL Budgeted Amounts Actual Amounts Variance with Final Budget - Positive (Negative) Original Final Revenues: Intergovernmental revenues 1,800,000$ 1,800,000$ 1,764,949$ (35,051)$ Investment earnings 29,000 29,000 130,057 101,057 Total revenues 1,829,000 1,829,000 1,895,006 66,006 Expenditures: Current: General government - - 518 (518) Transportation: Roads & streets 30,000 30,000 - 30,000 Total expenditures 30,000 30,000 518 29,482 Excess (Deficiency) of Revenues Over Expenditures 1,799,000 1,799,000 1,894,488 95,488 Other Financing Sources (Uses): Transfers out (3,797,277) (4,049,812) (3,457,488) 592,324 Total other financing sources (uses)(3,797,277) (4,049,812) (3,457,488) 592,324 Net Change in Fund Balances (1,998,277) (2,250,812) (1,563,000) 687,812 Fund Balances - Beginning 2,550,992 2,550,992 2,550,992 - Fund Balances - Ending 552,715$ 300,180$ 987,992$ 687,812$ CITY OF CLERMONT, FLORIDA INFRASTRUCTURE SPECIAL REVENUE FUND Year Ended September 30, 2009 68 CITY OF CLERMONT, FLORIDA SCHEDULE OF REVENUES, EXPENDITURES AND CHANGES IN FUND BALANCE - BUDGET AND ACTUAL Budgeted Amounts Actual Amounts Variance with Final Budget - Positive (Negative) OriginalFinal Revenues: Investment earnings9,400$ 9,400$ 785$ (8,615)$ Total revenues9,400 9,400 785 (8,615) Expenditures: Debt Service: Principal 440,000 440,000 440,000 - Interest and fiscal charges 195,557 195,557 195,556 1 Total expenditures 635,557 635,557 635,556 1 Excess (Deficiency) of Revenues Over Expenditures (626,157) (626,157) (634,771) (8,614) Other Financing Sources (Uses): Transfers in 635,107 635,107 639,425 4,318 Total other financing sources (uses)635,107 635,107 639,425 4,318 Net Change in Fund Balances 8,950 8,950 4,654 (4,296) Fund Balances - Beginning 360,936 360,936 360,936 - Fund Balances - Ending 369,886$ 369,886$ 365,590$ (4,296)$ DEBT SERVICE FUND Year Ended September 30, 2009 69 CITY OF CLERMONT, FLORIDA SCHEDULE OF REVENUES, EXPENDTURES AND CHANGES IN FUND BALANCE - BUDGET AND ACTUAL Budgeted Amounts Actual Amounts Variance with Final Budget - Positive (Negative) OriginalFinal Revenues: Intergovernmental revenues 200,000$ 200,000$ -$ (200,000)$ Investment earnings 7,200 7,200 74,072 66,872 Miscellaneous 96,830 96,830 18,929 (77,901) Total revenues 304,030 304,030 93,001 (211,029) Expenditures: Current: Culture and recreation - - 3,914 (3,914) Capital outlay: Public safety 2,000,000 2,000,000 1,608,254 391,746 Culture and recreation 1,336,830 1,589,365 130,116 1,459,249 Total expenditures 3,336,830 3,589,365 1,742,284 1,847,081 Excess (Deficiency) of Revenues Over Expenditures (3,032,800) (3,285,335) (1,649,283) 1,636,052 Other Financing Sources (Uses): Transfers in 4,090,000 4,342,535 3,007,690 (1,334,845) Transfers out - (2,583,552) (2,583,552) - Total other financing sources (uses)4,090,000 1,758,983 424,138 (1,334,845) Net Change in Fund Balances 1,057,200 (1,526,352) (1,225,145) 301,207 Fund Balances - Beginning 4,496,175 4,496,175 4,496,175 - Fund Balances - Ending 5,553,375$ 2,969,823$ 3,271,030$ 301,207$ CAPITAL PROJECTS FUND Year Ended September 30, 2009 70 FIDUCIARY FUNDS Pension Trust Funds General Employees’ Pension Trust Fund This fund is used to account for the accumulation of resources to be used for retirement annuity payments at the appropriate amounts and times in the future. Resources are contributed at rates in accordance with an actuarial study, whereas, a fixed percentage of employees salaries is used in determining the annual contribution to the defined contribution plan. Police Officers’ Pension Trust Fund This fund is used to account for the accumulation of resources to be used for the retirement annuities of all police officers. The state contributes an amount determined by an actuarial study. Firefighters’ Pension Trust Fund This fund is used to account for the accumulation of resources to be used for the retirement annuities of all firefighters. The state contributes money based upon the number of firefighters and the City contributes an amount determined by an actuarial study. 71 CITY OF CLERMONT, FLORIDA COMBINING STATEMENT OF FIDUCIARY NET ASSETS FIDUCIARY FUNDS September 30, 2009 Police OfficersFirefightersTotal Defined Defined PensionPensionEmployee BenefitContributionTrustTrustPension Funds Assets: Cash and cash equivalents4,014$ $ - 40,854$ 22,133$ $ 67,001 Investments: U.S. Government & other debt securities237,952 - 2,422,0861,312,177 3,972,215 Equities 331,413 3,508,516 3,373,4121,827,563 9,040,904 Total Investments 569,365 3,508,516 5,795,498 3,139,740 13,013,119 Total assets 573,379 3,508,516 5,836,352 3,161,873 13,080,120 Liabilities: Accounts payable - - - - - Total liabilities - - - - - Net Assets Held in Trust for Pension Benefits 573,379$ 3,508,516$ 5,836,352$ 3,161,873$ 13,080,120$ General Employees 72 CITY OF CLERMONT, FLORIDA COMBINING STATEMENT OF CHANGES IN FIDUCIARY NET ASSETS FIDUCIARY FUNDS For the Year Ended September 30, 2009 Police OfficersFirefightersTotal DefinedDefinedPensionPensionEmployee BenefitContributionTrustTrustPension Funds Additions: Contributions: Employer -$ 409,966$ 449,224$ 358,633$ 1,217,823$ Plan members - - 73,819 25,862 99,681 State - - 215,007 155,350 370,357 Total contributions - 409,966 738,050 539,845 1,687,861 Investment earnings: Net increase in fair value of investments3,091 50,570 139,767 97,575 291,003 Total net investment earnings 3,091 50,570 139,767 97,575 291,003 Total additions 3,091 460,536 877,817 637,420 1,978,864 Deductions: Benefits/distributions 73,988 217,366 161,068 2,783 455,205 Administrative expenses 2,129 15,155 12,413 9,623 39,320 Total deductions 76,117 232,521 173,481 12,406 494,525 Change in Net Assets (73,026) 228,015 704,336 625,014 1,484,339 Net Assets Held in Trust for Pension Benefits: Beginning of Year 646,405 3,280,501 5,132,016 2,536,859 11,595,781 End of Year 573,379$ 3,508,516$ 5,836,352$ 3,161,873$ 13,080,120$ General Employees 73 74 S T A T I S T I C A L S E C T I O N Statistical Section This part of the City of Clermont’s comprehensive annual financial report presents detailed information as a context for understanding what the information in the financial statements, note disclosures, and required supplementary information says about the government’s overall health. Contents Page Financial Trends 76 These schedules contain trend information to help the reader understand how the government’s financial performance and well-being have changed over time. Revenue Capacity 84 These schedules contain information to help the reader assess the government’s most significant local revenue source, the property tax. Debt Capacity 89 These schedules present information to help the reader assess the affordability of the government’s current levels of outstanding debt and the government’s ability to issue additional debt in the future. There are no limitations placed upon the amount of debt the City of Clermont may issue by either the City Charter or the City’s Code of Ordinances or by Florida Statutes. The City of Clermont has no general obligation bonds outstanding. Demographic and Economic Information 94 These schedules offer demographic and economic indicators to help the reader understand the environment within which the government’s financial activities take place. Operating Information 98 These schedules contain service and infrastructure data to help the reader understand how the information in the government’s financial report relates to the services the government provides and the activities it performs. Sources: Unless otherwise noted, the information in these schedules is derived from the comprehensive annual reports for the relevant year. 75 200020012002 2003 Governmental activities Invested in capital assets, net of related debt**** Restricted **** Unrestricted **** Total governmental activities net assets **** Business-type activities Invested in capital assets, net of related debt**** Restricted **** Unrestricted **** Total business-type activities net assets **** Primary government Invested in capital assets, net of related debt**** Restricted **** Unrestricted **** Total primary government net assets **** * Data not available prior to the implementation of GASB Statement 34. Fiscal Year City of Clermont, Florida Net Assets by Component Last Ten Fiscal Years (accrual basis of accounting) (amounts expressed in thousands) 76 2004 2005 2006 2007 2008 2009 10,959$ 12,118$ 15,777$ 15,825$ 27,462$ 33,938$ 3,121 4,800 5,935 7,830 8,959 6,526 5,619 8,125 8,693 14,459 11,946 13,608 19,699$ 25,043$ 30,405$ 38,114$ 48,367$ 54,072$ 12,054$ 12,082$ 15,864$ 24,837$ 46,569$ 54,834$ 22,601 27,573 33,732 36,931 13,899 10,437 9,903 13,414 13,447 10,841 18,103 17,801 44,558$ 53,069$ 63,043$ 72,609$ 78,571$ 83,072$ 23,013$ 24,200$ 31,641$ 40,662$ 74,031$ 88,772$ 25,722 32,373 39,667 44,761 22,858 16,963 15,522 21,539 22,140 25,300 30,049 31,409 64,257$ 78,112$ 93,448$ 110,723$ 126,938$ 137,144$ Fiscal Year 77 Expenses 200420052006200720082009 Governmental activities: General government 2,337$ 2,617$ 3,232$ 3,297$ 4,204$ 4,747$ Public safety 4,6885,7737,1098,78310,33010,775 Physical environment 421278382470514364 Transportation/public works 1,0561,1721,3221,2551,5441,164 Economic environment 32 13181 52 48101 Human services 132149 77130107 0 Culture and recreation 1,7421,8161,8512,4412,0612,082 Interest on long-term debt 350255285226459326 Total governmental activities expenses10,75812,07314,43916,65419,26719,559 Business-type activities: Water 2,7073,0153,4272,9873,7373,990 Sewer 3,4233,5724,0243,8964,5214,489 Sanitation 1,6171,8171,7311,8162,1232,086 Stormwater 266287316427549534 Total business-type activities expenses 8,0138,6919,4989,12610,93011,099 Total primary government expenses 18,771$ 20,764$ 23,937$ 25,780$ 30,197$ 30,658$ Program Revenues Governmental activities: Charges for services: General government 963$ 1,042$ 1,037$ 1,116$ 1,582$ 1,854$ Public safety 8079121,1581,105975 1,203 Transportation/public works 250 36 - - - - Culture and recreation 1,0094631,566882761 99 Operating grants and contributions 5915125239231,047 921 Capital grants and contributions - 1,6441052,5187,330 3,307 Total governmental activities program revenues 3,6204,6094,3896,54411,6957,384 Business-type activities: Charges for services: Water 4,342$ 4,320$ 4,839$ 5,502$ 5,654$ 4,909$ Sewer 2,8323,2953,7844,2424,422 4,655 Sanitation 1,8112,0882,2362,4022,515 2,560 Stormwater 571627689729766 801 Operating grants and contributions 105138 11 38700 - Capital grants and contributions 7,0956,2876,4083,6761,480 2,137 Total business-type activities program revenues 16,75616,75517,96716,58915,53715,062 Total primary government program revenues20,376$ 21,364$ 22,356$ 23,133$ 27,232$ 22,446$ * Data not available prior to the implementation of GASB Statement 34 in 2004. Fiscal Year City of Clermont, Florida Changes in Net Assets Last Six* Fiscal Years (accrual basis of accounting) (amounts expressed in thousands) 78 City of Clermont, Florida Changes in Net Assets Last Six* Fiscal Years (accrual basis of accounting) (amounts expressed in thousands) 200420052006200720082009 Net (expense)/revenue Governmental activities (7,138)$ (7,464)$ (10,050)$ (10,110)$ (7,572)$ (12,175)$ Business-type activities 8,7438,0648,4697,4634,6053,964 Total primary government net expense 1,605$ 600$ (1,581)$ (2,647)$ (2,967)$ (8,211)$ General Revenues and Other Changes in Net Assets Governmental activities: Taxes Property taxes 3,371$ 4,417$ 5,665$ 7,452$ 7,749$ 7,601$ Franchise fees 1,1281,3571,7141,8081,9112,151 Utility taxes 1,3821,5521,7821,8811,9922,152 Unrestricted intergovernmental revenues3,2793,9234,9534,9524,7764,458 Unrestricted investment earnings and miscellaneous revenues 1861,1818351,2169011,050 Transfers 385377464509496469 Total governmental activities 9,73112,80715,41317,81817,82517,881 Business-type activities: Investment earnings 390$ 825$ 1,968$ 2,612$ 1,853$ 1,005$ Transfers (385)(377)(464)(509)(496) (469) Total business-type activities 54481,5042,1031,357536 Total primary government 9,736$ 13,255$ 16,917$ 19,921$ 19,182$ 18,417$ Change in Net Assets Governmental activities 2,593$ 5,343$ 5,363$ 7,708$ 10,253$ 5,705$ Business-type activities 8,7488,5129,9739,5665,9614,501 Total primary government 11,341$ 13,855$ 15,336$ 17,274$ 16,214$ 10,206$ * Data not available prior to the implementation of GASB Statement 34 in 2004. Fiscal Year 79 2000200120022003 General fund Reserved 54$ 97$ 162$ 167$ Unreserved 1,4072,1202,5593,110 Total general fund 1,461$ 2,217$ 2,721$ 3,277$ All other governmental funds Reserved 409$ 430$ 512$ 760$ Unreserved, reported in: Special revenue funds 1,291 7931,0032,318 Capital projects fund 1,088 6694,423 106 Total all other governmental funds 2,788$ 1,892$ 5,938$ 3,184$ Fiscal Year City of Clermont, Florida Fund Balances of Governmental Funds Last Ten Fiscal Years (modified accrual basis of accounting) (amounts expressed in thousands) 80 2004 2005 2006 2007 2008 2009 168$ 198$ 233$ 307$ 209$ 214$ 4,207 5,758 4,857 9,128 9,572 10,860 4,375$ 5,956$ 5,090$ 9,435$ 9,781$ 11,074$ 894$ 1,083$ 1,189$ 1,539$ 1,912$ 2,267$ 3,410 5,028 7,767 10,771 5,314 4,147 - 926 780 843 4,496 3,271 4,304$ 7,037$ 9,736$ 13,153$ 11,722$ 9,685$ Fiscal Year 81 2000200120022003 Revenues Taxes 3,939$ 4,931$ 5,752$ 6,794$ Licenses and permits 189 211 253 277 Intergovernmental revenue 960 9301,4081,152 Charges for services 60 37 367 378 Fines and forfeitures 174 146 112 114 Impact fees/special assessments 996 9451,3141,424 Investment income 151 243 141 145 Miscellaneous 261 212 177 219 Total revenues 6,7307,6559,52410,503 Expenditures General government 808$ 874$ 1,117$ 1,338$ Public Safety 1,8682,2473,1183,606 Physical environment 134 197 42 35 Transportation 404 454 622 806 Economic environment 24 27 44 39 Human services 25 20 58 89 Culture and recreation 8761,0111,1621,316 Capital outlay 2,4172,8823,2055,351 Debt service Principal 200 257 396 236 Interest 54 99 92 257 Other charges - 1 211 - Total expenditures 6,8108,06910,06713,073 Excess of revenues over (under) expenditures (80)$ (414)$ (543)$ (2,570)$ Other financing sources (uses) Transfers in 1,328$ 551$ 1,468$ 1,182$ Transfers out (1,037)(302)(1,378)(863) Debt issuance 2,390 - 6,965 27 Sale of capital assets - - - - Payments to refunded bond escrow agent - - (2,000)- Total other financing sources (uses)2,681 2495,055 346 Net change in fund balances 2,601$ (165)$ 4,512$ (2,224)$ Debt service as a percentage of noncapital expenditures 5.8%6.9%10.2%6.4% Fiscal Year City of Clermont, Florida Changes in Fund Balances of Governmental Funds Last Ten Fiscal Years (modified accrual basis of accounting) (amounts expressed in thousands) 82 200420052006200720082009 6,791$ 8,391$ 10,327$ 11,141$ 11,652$ 11,903$ 467 484 456 491 835 674 2,7585,2164,2118,34011,9778,666 381 389 407 462 6431,103 125 164 226 175 321 178 1,5921,1522,4441,7171,209 903 107 267 7381,101 687 848 541 310 505 3911,683 444 12,76216,37319,31423,81829,00724,719 1,432$ 2,053$ 2,694$ 3,079$ 3,640$ 3,654$ 4,2745,2856,4529,14110,99910,275 278 318 343 461 497 490 1,055 917 9671,1892,9761,129 32 33 38 48 48 102 122 139 75 129 105 - 1,0091,0251,2591,55610,0241,893 2,7522,48410,235 941,9091,738 507 855 868 4498,1766,259 268 258 244 440 465 375 - - - - - - 11,72913,36723,17516,58638,83925,915 1,033$ 3,006$ (3,861)$ 7,232$ (9,832)$ (1,196)$ 1,217$ 1,081$ 1,676$ 1,265$ 6,468$ 6,684$ (832)(704)(1,212)(756)(5,971)(6,232) 800 - 5,250 - 8,250 - - 931 - - - - - - - - - - 1,1851,3085,714 5098,747 452 2,218$ 4,314$ 1,853$ 7,741$ (1,085)$ (744)$ 8.6%10.2%9.3%7.1%23.4%28.3% Fiscal Year 83 Fiscal PropertyFranchise Utility Year Tax Fees Tax Total 2000 1,205 654 1,248 3,107 2001 1,594 806 1,552 3,952 2002 2,038 806 1,855 4,699 2003 2,592 922 1,981 5,495 2004 3,305 1,128 2,292 6,725 2005 4,321 1,357 2,617 8,295 2006 5,488 1,714 2,948 10,150 2007 7,155 1,808 3,138 12,101 2008 7,749 1,911 1,992 11,652 2009 7,601 2,151 2,152 11,904 Fiscal SalesState RevenueLocal Option Year Tax Sharing Gas Tax Total 2000 381 169 206 756 2001 416 187 213 816 2002 464 192 226 882 2003 541 207 243 991 2004 781 242 268 1,291 2005 930 328 275 1,533 2006 1,157 368 286 1,811 2007 1,210 388 325 1,923 2008 1,139 356 300 1,795 2009 1,033 302 289 1,624 Taxes Included in Unrestricted Intergovernmental Revenues City of Clermont, Florida Governmental Activities Tax Revenues by Source (amounts expressed in thousands) Last Ten Fiscal Years (accrual basis of accounting) 84 Fiscal TotalEstimatedAssessed Year Less:Total TaxableDirectActualValue as a EndedReal*PersonalTax ExemptAssessedTaxTaxablePercentage of Sep 30PropertyPropertyReal PropertyValueRateValueActual Value 2000384,83660,92288,777356,9813.479 445,75880.08% 2001491,70164,111105,297450,5153.729 555,81281.06% 2002626,84072,610128,222571,2283.729 699,45081.67% 2003793,58392,764166,209720,1383.729 886,34781.25% 20041,041,341112,546238,373915,5143.7291,153,88779.34% 20051,363,931133,687299,1621,198,4563.7291,497,61880.02% 20061,771,503153,086382,8851,541,7043.7291,924,58980.11% 20072,466,549171,470620,7502,017,2693.1422,638,01976.47% 20082,975,139186,835676,3712,485,6033.1423,161,97478.61% 20093,022,925195,808792,9972,425,7363.1423,218,73375.36% Source: Lake County Property Appraisers Office * Information on breakdown of residential and commercial property is not available. City of Clermont, Florida Assessed Value and Estimated Actual Value of Taxable Property Last Ten Fiscal Years (amounts expressed in thousands) 85 Direct Rate City of LakeSouthLakeSt. JohnsTotal Clermont CountyLakeCountyRiver WaterDirect & FiscalOperatingOperatingVotedAmbulanceSchoolHospitalWaterManagementOverlapping YearMillageMillageDebt ServiceMSTUDistrictDistrictAuthorityDistrictRates 20003.47904.73300.00000.31608.74201.00000.50000.482019.2520 20013.72905.11700.00000.55008.49501.00000.50000.472019.8630 20023.72905.11700.00000.52898.20201.00000.50000.462019.5389 20033.72905.91700.00000.52898.39501.00000.48190.462020.5138 20043.72905.91700.00000.52898.44001.00000.40800.462020.4849 20053.72905.81700.00000.52897.99001.00000.38310.462019.9100 20063.72905.79700.00000.52897.98101.00000.33700.462019.8349 20073.14204.74100.20000.46517.69800.86660.21300.415817.7415 20083.14204.65110.11010.46517.51700.86660.21300.415817.3807 20093.14204.65110.11010.46517.53200.86660.21300.415817.3957 Source: Lake County Property Appraisers Office 1 Overlapping rates are those of local and county governments that apply to property owners within the City of Clermont. 2 Taxes levied for the fiscal year are based on the prior year taxable value. Lake County Overlapping Rates City of Clermont, Florida Property Tax Rates Direct and Overlapping1 Governments Last Ten Fiscal Years 2 (per $1,000 of assessed value) 86 Percentage of Percentage of Taxable Total TaxableTaxable Total Taxable Assessed AssessedAssessed Assessed Taxpayer ValueRankValueValueRankValue John P. Adams & Ann D. 32,621$ 11.34% Adams Family LP Fountains at Clermont LLC21,37720.88% South Lake Hospital, Inc.17,19230.71% Sundance Clermont LLC16,32940.67% Citrus Tower Development15,53550.64% Lennar Homes, Inc.15,63960.64%6,161$ 41.73% Village at East Lake 12,83970.53% Wal-Mart Stores East LP12,46980.51% Lowe's Home Centers Inc.11,98690.49% Target Corporation 11,082100.46% Levitt Homes, Inc.10,06912.82% CPF Property Investments, Inc.8,55622.40% Lucas Clermont Ltd Partnership 8,10832.27% Lennar Land Partners 5,86451.64% Hurtak, Family Partnership Ltd.5,32961.49% Mercator Properties, Inc.4,46671.25% Health Care Reit, Inc.4,19581.18% Lakeworth MHP, LTD 4,04191.13% Lost Lake Reserve LC 2,968100.83% TOTAL 167,069$ 6.89%59,757$ 16.74% Source: Lake County Property Appraiser 2009 2000 City of Clermont, Florida Principal Property Taxpayers Current Year and Ten Years Ago (amounts expressed in thousands) 87 Fiscal YearTotal Tax Collections in EndedLevy for PercentageSubsequent Percentage SeptemberFiscal YearAmountof LevyYearsAmountof Levy 2000 1,2421,20196.7%4 1,20597.0% 2001 1,6801,60795.7%14 1,62196.5% 2002 2,1302,05496.4%10 2,06496.9% 2003 2,6852,58696.3%9 2,59596.6% 2004 3,4143,29396.5%10 3,30396.8% 2005 4,4694,31096.4%5 4,31596.6% 2006 5,7495,54496.4%- 5,54496.4% 2007 7,5187,15595.2%17 7,17295.4% 2008 7,8107,42595.1%15 7,44095.3% 2009 7,6227,24395.0%22 7,26595.3% Note: Property taxes become due and payable on November 1st of each year. A four (4) percent discount is allowed if the taxes are paid in November, with the discount declining by one (1) percent each month thereafter. Accordingly, taxes collected will never be 100 percent of the tax levy. Fiscal Year of the Levy City of Clermont, Florida Property Tax Levies and Collections Last Ten Fiscal Years (amounts expressed in thousands) Total Collections to Date Collected within the 88 Business-Type Fiscal Activities Year Water & SewerTotalPercentage EndedRevenueNotesLine ofRefundingPrimaryof Personal SeptBondsPayableCreditRevenue BondsGovernmentIncome1 Per Capita1 20005657442,000 10,780$14,0896.87%1,490 20013556302,000 17,935$20,920*1,979 20026,965459- 17,935$25,359*1,849 20036,965381- 17,935$25,281*1,643 20046,5751,064- 17,935$25,574*1,449 20056,180605- 17,835$24,620*1,230 20065,7755,392- 17,685$28,8525.66%1,312 20075,3605,358- 17,455$28,1735.63%1,231 20084,9355,857- 17,065$27,8574.00%1,187 20094,49538- 16,655$21,1882.95%876 Note: Details regarding the city's outstanding debt can be found in the notes to the financial statements. 1 See the Schedule of Demographic and Economic Statistics on page 85 for personal income and population data. * Information is not available. Governmental Activities City of Clermont, Florida Ratios of Outstanding Debt by Type Last Ten Fiscal Years (amounts expressed in thousands, except per capita amount) 89 Percentage Amount Total Applicable toApplicable to OutstandingCity of ClermontCity of Clermont Direct: City of Clermont 4,533$ 100%4,533$ Overlapping: Lake County 31,090 11%3,420 Total direct and overlapping debt payable from ad valorem taxes 35,623$ 7,953$ Estimated Population 24,199 Total direct and overlapping debt per capita 328.65$ Note: The City of Clermont has no legal debt margin. Sources: Lake County Clerk Finance Office Lake County Property Appraiser's Office (amounts expressed in thousands, except population and per capita amount) City of Clermont, Florida Direct and Overlapping Governmental Activities Debt September 30, 2009 90 PublicCommunications Total Revenue FiscalServiceServiceHalf-CentAvailable for YearTaxesTaxSales TaxDebt ServicePrincipalInterestCoverage 20001,247,966 - 380,6461,628,612 - - - 20011,551,762 - 416,0361,967,798 - - - 20021,054,652800,177464,2902,319,119 -1 254,1889.12 20031,172,270808,813540,7172,521,800390,000250,7753.94 20041,381,779910,725780,8633,073,367395,000243,1664.82 20051,552,0001,063,454929,7403,545,194405,000233,6535.55 20061,781,6261,163,9711,156,6944,102,291415,000222,3726.44 20071,559,8241,253,4251,209,7484,022,997415,000228,3386.25 20081,688,4211,279,6531,139,3154,107,389425,000209,6066.47 20091,846,1531,257,3441,033,1414,136,638440,000195,1066.51 Note: Details regarding the city's outstanding debt can be found in the notes to the financial statements. 1 No principal payments were scheduled in this the period in which the debt was issued. Public Improvement Revenue Bonds, Series 2002 Debt Service City of Clermont, Florida Pledged-Revenue Coverage Last Ten Fiscal Years 91 StateTotal Revenue FiscalInfrastructureAvailable for Year Tax Debt ServicePrincipalInterestCoverage 2000 598,313 598,313200,000 53,310 2.36 2001 708,636 708,636210,000 39,510 2.84 2002 752,740 752,740225,000 24,915 3.01 2003 996,162 996,162130,000 9,165 7.16 2004 1,233,5981,233,598 - 1 - 1 - 1 2005 1,538,4981,538,498 - 1 - 1 - 1 2006 1,934,4551,934,455 - 1 - 1 - 1 2007 1,920,4861,920,486 - 1 - 1 - 1 2008 1,900,6401,900,640 - 1 - 1 - 1 2009 1,764,9491,764,949 - 1 - 1 - 1 Note: Details regarding the city's outstanding debt can be found in the notes to the financial statements. 1 All outstanding revenue bonds were paid in full as of June 1, 2003. Debt Service Last Ten Fiscal Years Sales Tax Revenue Bonds, Series 1989 City of Clermont, Florida Pledged-Revenue Coverage 92 Water andWater and SewerSewerNet Revenue FiscalOperatingOperatingAvailable for YearRevenues1 Expenses2 Debt ServicePrincipalInterestCoverage 20003,619,7672,122,9381,496,829180,000530,0692.11 20014,326,6382,236,1462,090,492 -3 543,7413.84 20025,124,7782,952,5562,172,222 -3 932,1282.33 20035,901,9073,461,2162,440,691 -3 932,1282.62 20047,261,2394,339,9592,921,280 -3 932,1283.13 20057,841,8304,773,6393,068,191100,000929,9282.98 20069,421,8345,456,6893,965,145150,000924,3533.69 200712,875,1708,820,9324,054,238230,000915,8023.54 200810,075,7067,192,3142,883,392390,000892,6882.25 200910,561,9496,511,4874,050,462410,000883,2063.13 Note: Details regarding the city's outstanding debt can be found in the notes to the financial statements. 1 Operating revenue is computed per bond resolution requirements. Investment earnings are included. 2 Operating expense is computed per bond resolution requirements. Depreciation expense is not included. 3 On November 21, 2000, the City defeased its 1972 and 1988 bond issues and paid off a 1996 Bond Anticipation note that was due December 1, 2000. Principal payments were not due until December 1, 2004. Water and Sewer Revenue and Refunding Bonds Debt Service City of Clermont, Florida Pledged-Revenue Coverage Last Ten Fiscal Years 93 Personal Education Income Level in (amountsPer Capita Years of Fiscal expressed inPersonalMedianFormalSchoolUnemploy- YearPopulation1 thousands)Income2 Age2 Schooling2 Enrollment3 ment Rate4 20009,455204,93721,67537.613.23,8413.6% 200110,571****4,5003.9% 200213,718****4,6165.8% 200315,391****4,6305.4% 200417,654****5,2194.6% 200520,017****5,1654.0% 200621,986509,98723,19635.913.55,3753.3% 200722,882500,33821,86636.813.65,4113.8% 200823,476696,04029,64939.613.24,2087.1% 200924,199717,59729,65439.713.24,96812.3% Sources:1 College of Business Administration, University of Florida - Bureau of Economic and Business Research 2 Metro Orlando Economic Development Commission 3 Lake County School Board 4 U.S. Department of Labor, Bureau of Labor Statistics Note: Unemployment rate information is available on a countywide basis only. * Information is not available. City of Clermont, Florida Demographic and Economic Statistics Last Ten Fiscal Years 94 Percentage of Percentage of Total City Total City Employer EmployeesRankEmployment1 EmployeesRankEmployment Walmart 1,914110.82% Publix Supermarkets 77324.37%876 * Department of Corrections 42032.37% Target Corporation 31241.76% Lake County School System 30151.70%3202 * Lowe's 30061.70% Ford of Clermont 30071.70%737 * Winn Dixie 29081.64%* Darden Restaurants Inc.28891.63% McDonald's 268101.51% South Lake Hospital, Inc.4541 * Westminister Care of Clermont 1503 * City of Clermont 1274 * CBS Builders Supply Inc.1025 * Exceletech, Inc.648 * Kmart 539 * Bill Seidel's Chevrolet & Oldsmobile 4310 * TOTAL 5,166 29.19%1,473 * Source: Florida Agency for Workforce Innovation, Labor Market Statistics Center 1 There are an estimated 17,695 employees working at approximately 1,771 business establishments within the City of Clermont as of 9/30/2009. * Information is not available. 2009 2000 City of Clermont, Florida Principal Employers Current Year and Nine Years Ago 95 Usage Percentage ofUsage Percentage of (thousands Total City(thousands Total City Employer of gallons)RankMetered Flow1 of gallons)RankMetered Flow Lake County Schools 32,24011.39%* * * South Lake Hospital 24,02221.04%* * * City of Clermont 19,78330.86%* * * Gardens at Citrus Tower 13,27440.57%* * * Westminster Comm Care Service12,09450.52%* * * Sundance Clermont Apartments10,63660.46%* * * Osprey Ridge Apartments LTD9,67670.42%* * * The Vista at Lost Lake 9,07580.39%* * * Village at East Lake Apartments8,08190.35%* * * Emerald Lakes of Clermont 6,950100.30%* * * TOTAL 145,831 6.30%* * 1 The City of Clermont had a total metered water flow of approximately 2,312,962,000 gallons for the 12-month period ending September 30, 2009 * Information is not available. 2009 2000 City of Clermont, Florida Principal Water Customers Current Year and Nine Years Ago 96 Usage Percentage ofUsage Percentage of (thousands Total City(thousands Total City Employer of gallons)RankMetered Flow1 of gallons)RankMetered Flow Lake County Schools 23,88511.71%* * * South Lake Hospital 21,59621.55%* * * Westminster Comm Care Service11,30330.81%* * * The Vista at Lost Lake 9,07540.65%* * * Village at East Lake 8,08150.58%* * * Emerald Lakes of Clermont 6,95060.50%* * * Blue Water Express Car Wash 6,44670.46%* * * Empirian Property Management5,07280.36%* * * Clermont Dialysis LLC 3,42890.25%* * * Walmart 3,281100.23%* * * TOTAL 99,117 7.10%* * 1 The City of Clermont had a total metered water flow for wastewater billing purposes of approximately 1,396,371,000 gallons for the 12-month period ending September 30, 2009 * Information is not available. 2009 2000 City of Clermont, Florida Principal Sewer Customers Current Year and Nine Years Ago 97 Function 2000 2001 2002 2003 General Government 19.5017.5017.0023.00 Public Safety: Police Sworn personnel 25.0027.0029.0031.00 Non sworn personnel 10.0010.0010.0011.00 Fire Firefighters 5.0011.0012.0013.00 Other personnel 1.00 1.00 1.00 1.00 Physical Environment 4.00 5.00 - 0.50 Transportation 7.87 8.2111.3513.16 Human Services 0.50 0.50 1.00 1.75 Culture & Recreation 17.5019.5020.7523.50 Water 12.5914.1218.7220.32 Sewer 13.0914.8219.0219.22 Stormwater 2.29 2.49 2.20 4.49 Sanitation 8.66 8.86 8.96 9.06 Total 127.00140.00151.00171.00 Source: City of Clermont Administrative Services Department. City of Clermont, Florida Full-time Equivalent City Government Employees by Function Last Ten Fiscal Years Full-time Equivalent Employees as of September 30, 98 2004 2005 2006 2007 2008 2009 22.5025.5027.5030.5030.5031.00 34.0038.0045.0051.0053.0053.00 12.0016.0016.0016.0017.0017.00 19.0022.0038.0045.0049.0047.85 1.00 1.00 2.00 2.00 2.00 2.00 7.50 7.5010.0010.0010.0011.65 13.2513.2513.7015.2015.6015.60 2.25 2.25 2.00 2.00 2.00 0.00 19.4519.4522.2026.2026.6025.60 22.9023.4025.4026.9029.4029.40 25.8025.3026.3027.8026.3026.30 4.65 4.65 7.20 8.70 8.80 8.80 8.70 8.70 8.7014.7016.8016.80 193.00207.00244.00276.00287.00285.00 Full-time Equivalent Employees as of September 30, 99 Function 2000 2001 2002 2003 General Government Municipal boundary (square miles)11.2611.2911.1811.88 Business Tax Receipts issued * 1,2021,2901,468 A/P Checks issued 3,7574,4814,8084,940 Commercial construction (units)11 17 39 22 Commercial construction (value in thousands)22,39617,26452,34318,758 Residential construction (units)711 884 829 959 Residential construction (value in thousands)58,83082,04077,470124,837 Public Safety: Police Auto accidents 392 374 390 489 Physical arrests 397 462 465 449 911 calls received * * * * Evidence processed (pieces)229 3111,1231,075 Parking violations * 8 36 48 Traffic violations 4,5623,4893,6232,713 Fire Volunteer firefighters 34 34 34 34 Fire inspections completed 266 279 494 441 Emergency calls answered 8311,5562,2712,506 Non-emergency calls answered 54 65 77 86 Human Services Animals captured**231 488 521 364 Water Residential customers 5,9927,3038,46110,529 Commercial customers 531 579 644 723 Annual water usage (thousands of gallons)1,394,3591,365,1961,299,7011,338,818 Sewer Residential customers 3,9285,0016,2437,650 Commercial customers 458 511 581 673 Sources: Various government departments. * Data not available. ** Program was discontinued in FY 07-08 Fiscal Year City of Clermont, Florida Operating Indicators by Function Last Ten Fiscal Years 100 2004 2005 2006 2007 2008 2009 11.9712.4514.1314.3714.4214.43 1,5511,7951,9852,1412,2631,771 4,9675,4155,6646,0236,4406,042 24 23 38 24 42 19 14,2727,11517,53424,43318,85913,223 1,155 673 635 324 301 204 158,458103,672186,189136,47756,57856,092 541 671 6251,1921,272 972 414 500 707 933 842 949 5,5806,2627,0086,3176,0466,828 1,0541,1271,6101,5851,3001,652 87 71 161 140 145 107 2,3942,8555,2595,1645,1034,553 34 27 27 9 8 10 483 457 625 414 880 979 3,0933,3213,1323,0483,1773,155 143 143 189 198 234 434 562 445 495 652 0 0 12,75114,28415,73316,39416,95917,375 817 921 9931,0691,1561,201 1,655,2031,788,3372,121,5882,654,3522,589,6642,312,962 9,21710,17611,12511,55411,91312,154 767 883 9551,0311,1201,158 Fiscal Year 101 Function 2000 20012002 2003 General Government Public Safety: Police Police stations 1 1 1 1 Patrol units 25 27 29 31 Fire Fire stations 1 3 3 3 Staffed fire stations 1 2 2 2 Fire hydrants 657 840940 1,064 Fire apparatus 6 7 6 7 Staffed fire apparatus 1 2 2 2 ALS non-transport units 0 1 1 2 Transportation Streets paved (miles)52.00 77.0088.74 92.90 Streetlights 825 8751,056 1,056 Culture & Recreation Number of parks 22 22 22 22 Parks acreage 101.5 101.5101.5 101.5 Scenic linear trail (miles)** 3.5 3.5 3.5 Tennis courts 4 6 6 6 Fishing piers ** 4 4 4 Boat ramp 1 1 1 1 Libraries 1 1 1 1 Water Miles of water mains **88.74 88.74 Miles of sanitary sewers *34.0039.05 39.05 Miles of storm sewers *8.509.11 9.11 Sources: Various government departments. * Data not available. ** Asset was not in service. Fiscal Year City of Clermont, Florida Capital Asset Statistics by Function Last Ten Fiscal Years 102 2004 2005 2006 2007 2008 2009 111111 34 38 45 45 45 45 333333 222333 1,200 1,431 1,630 1,896 2,140 2,140 789999 234555 333334 97.00101.39109.94122.93126.16131.72 1,106 1,131 1,231 1,256 1,331 1,331 22 22 22 22 22 22 101.5 101.5 230.5 230.5 230.5 230.5 3.5 5.7 5.7 5.7 5.7 5.7 888888 444444 111111 111111 92.94 97.23104.52115.02115.98122.83 41.15 44.26 49.51 56.98 59.40 65.18 9.53 10.27 11.13 18.07 20.88 24.61 Fiscal Year 103 104 O T H E R R E P O R T 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 City Council City of Clermont, Florida We have audited the financial statements of City of Clermont, Florida, as of and for the year ended September 30, 2009, and have issued our report thereon dated April 16, 2010. 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. Internal Control Over Financial Reporting In planning and performing our audit, we considered the City’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 City’s internal control over financial reporting. Accordingly, we do not express an opinion on the effectiveness of the City’s internal control over financial reporting. A control deficiency exists when the design or operation of a control does not allow management of employees, in the normal course of performing their assigned functions, to prevent or detect misstatements on a timely basis. A significant deficiency is a control deficiency, or combination of control deficiencies, that adversely affects the City’s ability to initiate, authorize, record, process, or report financial data reliably in accordance with generally accepted accounting principles such that there is more than a remote likelihood that a misstatement of the City’s financial statements that is more than inconsequential will not be prevented or detected by the City’s internal control. A material weakness is a significant deficiency, or combination of significant deficiencies, that results in more than a remote likelihood that a material misstatement of the financial statements will not be prevented or detected by the City’s internal control. Our consideration of internal control over financial reporting was for the limited purpose described in the first paragraph of this section and would not necessarily identify all deficiencies in internal control that might be significant deficiencies and accordingly would not necessarily disclose all significant deficiencies that are also considered to be material weaknesses. We did not identify any deficiencies in internal control over financial reporting that we consider to be material weaknesses, as defined above. 105 Compliance and Other Matters As part of obtaining reasonable assurance about whether the City’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 City of Clermont, Florida, in a separate letter dated April 16, 2010. The City’s response to our findings identified in our audit is included in this report. We did not audit the City’s response, and accordingly, we express no opinion on it. This report is intended solely for the information and use of management, the City Council 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. April 16, 2010 106 107 REPORT ON COMPLIANCE WITH REQUIREMENTS APPLICABLE TO THE STATE PROJECT AND INTERNAL CONTROL OVER COMPLIANCE Honorable Mayor and City Council City of Clermont, Florida Compliance We have audited the compliance of the City of Clermont, Florida with the types of compliance requirements described in the Executive Office of the Governor's State Projects Compliance Supplement, that are applicable to the state project for the year ended September 30, 2009. The City of Clermont, Florida’s major state project is 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 the state project is the responsibility of the City of Clermont, Florida’s management. Our responsibility is to express an opinion on the City of Clermont, Florida’s compliance based on our audit. We conducted our audit of compliance in accordance with auditing standards generally accepted in the United States of America; the standards applicable to financial audits contained in Government Auditing Standards, issued by the Comptroller General of the United States; and Chapter 10.550, Rules of the Auditor General. Those standards and Chapter 10.550, Rules of the Auditor General 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 state project occurred. An audit includes examining, on a test basis, evidence about the City of Clermont, Florida’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 on the City of Clermont, Florida’s compliance with those requirements. In our opinion, the City of Clermont, Florida, complied, in all material respects, with the requirements referred to above that are applicable to its major state project for the year ended September 30, 2009. Internal Control Over Compliance The management of the City of Clermont, Florida is responsible for establishing and maintaining effective internal control over compliance with requirements of laws, regulations, contracts and grants applicable to state projects. 108 In planning and performing our audit, we considered the City of Clermont, Florida’s internal control over compliance with requirements that could have a direct and material effect on a major federal program or state project in order to determine our auditing procedures for the purpose of expressing our opinion on compliance, 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 City of Clermont, Florida’s internal control over compliance. A control deficiency in an entity’s 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 noncompliance with a type of compliance requirement of a federal program on a timely basis. A significant deficiency is a control deficiency, or a combination of control deficiencies, that adversely affects the entity’s ability to administer a federal program such that there is more than a remote likelihood that noncompliance with a type of compliance requirement of a federal program that is more than inconsequential will not be prevented or detected by the entity’s internal control. A material weakness is a significant deficiency, or combination of significant deficiencies, that results in more than a remote likelihood that material noncompliance with a type of compliance requirement of a federal program will not be prevented or detected by the entity’s internal control. Our consideration of internal control over compliance was for the limited purpose described in the first paragraph of this section and would not necessarily identify all deficiencies in internal control that might be significant deficiencies or material weaknesses. We did not identify any deficiencies in internal control over compliance that we consider to be a material weaknesses, as defined above. This report is intended solely for the information and use of management of the City, the Auditor General of the State of Florida and state awarding agencies and is not intended to be and should not be used by anyone other than these specified parties. April 16, 2010 109 CITY OF CLERMONT, FLORIDA SCHEDULE OF EXPENDITURES OF STATE FINANCIAL ASSISTANCE Year Ended September 30, 2009 Grant Reimbursable Grantor/Program Title CFSA No. Number Expenditures State Financial Assistance Florida Department of Community Affairs Florida Communities Trust Grant 52.002 08-070-FF8 $3,199,226 Total State Financial Assistance $3,199,226 See accompanying Notes to Schedule of Expenditures of State Financial Assistance. 110 CITY OF CLERMONT, FLORIDA NOTES TO SCHEDULE OF EXPENDITURES OF STATE FINANCIAL ASSISTANCE Year Ended September 30, 2009 Note 1 - Basis of Presentation The accompanying schedule of expenditures of state financial assistance includes the state grant activity of the City of Clermont, Florida and is presented on the accrual basis of accounting. This information in the schedule is presented in accordance with the requirements of Section 215.97, Florida Statutes. Therefore, some accounts presented in this schedule may differ from amounts presented in, or used in the preparation of, the basic financial statements. 111 CITY OF CLERMONT, FLORIDA SCHEDULE OF FINDINGS AND QUESTIONED COSTS - STATE PROJECTS Year Ended September 30, 2009 A. Summary of Auditor’s Results 1. The auditor's report expresses an unqualified opinion on the financial statements of the City of Clermont, Florida. 2. No significant deficiencies relating to the audit of the financial statements are reported in the 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. 3. No instance of noncompliance material to the financial statements of the City of Clermont, Florida were disclosed during the audit. 4. No significant deficiencies relating to the audit of the major state project are reported in the Report on Compliance with Requirements Applicable to the State Project and on Internal Control Over Compliance. 5. The auditor’s report on compliance for the state project for the City of Clermont, Florida, expresses an unqualified opinion. 6. The project tested as major projects included in the following: State Project State CSFA No. Florida Department of Community Affairs- Florida Communities Trust Grant 52.002 7. The threshold for distinguishing Type A and Type B programs/projects was $300,000 for major state projects. B. Findings - Financial Statements Audit None C. Findings and Questioned Costs – Major Federal Award Programs and State Projects None 112 MANAGEMENT LETTER Honorable Mayor and City Council City of Clermont, Florida We have audited the financial statements of the City of Clermont, Florida, as of and for the fiscal year ended September 30, 2009, and have issued our report thereon dated April 16, 2010. We conducted our audit in accordance with United States generally accepted auditing standards and the standards applicable to financial audits contained in Government Auditing Standards, issued by the Comptroller General of the United States. We have issued our Report on Internal Control over Financial Reporting and on Compliance and Other Matters, Report on Compliance with Requirements Applicable to State Project and Internal Control Over Compliance and Schedule of Findings and Questioned Costs. Disclosures in those reports, which are dated April 16, 2010, 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, and unless otherwise required to be reported in the report on compliance and internal controls, this letter is required to include the following information. • Section 10.554(1)(i)1., Rules of the Auditor General, requires that we determine whether or not corrective actions have been taken to address significant findings and recommendations made in the preceding annual financial audit report. The recommendations made in the preceding annual financial audit report have been corrected, as detailed in the accompanying pages. • Section 10.554(1)(i)2., Rules of the Auditor General, requires our audit to include a review of the provisions of Section 218.415, Florida Statutes, regarding the investment of public funds. In connection with our audit, we determined that the City of Clermont, Florida complied with Section 218.415, Florida Statutes. • Section 10.554(1)(i)3., Rules of the Auditor General, requires that we address in the management letter any findings and recommendations to improve financial management, accounting procedures, and internal controls. In connection with our audit, we have one current year comment as discussed in the accompanying page. • Section 10.554(1)(i)4., Rules of the Auditor General, requires that we address 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. In connection with our audit, we did not have any such findings. 113 • Section 10.554(1)(i)5., Rules of the Auditor General, requires based on professional judgment, the reporting of the following matters that are inconsequential to the financial statements, considering both quantitative and qualitative factors: (1) violations of laws, rules, regulations, and contractual provisions or abuse that have occurred, or were likely to have occurred, and would have an immaterial effect on the financial statements; (2) improper expenditures or illegal acts that would have an immaterial effect on the financial statements; and (3) control deficiencies that are not significant deficiencies, including, but not limited to; (a) improper or inadequate accounting procedures (e.g., the omission of required disclosures from the financial statements); (b) failures to properly record financial transactions; and (c) other inaccuracies, shortages, defalcations, and instances of fraud discovered by, or that come to the attention of, the auditor. In connection with our audit, we did not have any such findings. • Section 10.554(1)(i)6., 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. • Section 10.554(1)(i)7.a., Rules of the Auditor General, requires a statement be included as to whether or not the local governmental entity has met one or more of the conditions described in Section 218.503(1), Florida Statutes, and identification of the specific condition(s) met. In connection with our audit, we determined that the City of Clermont, Florida did not meet any of the conditions described in Section 218.503(1), Florida Statutes. • Section 10.554(1)(i)7.b., Rules of the Auditor General, requires that we determine whether the annual financial report for the City of Clermont, Florida for the fiscal year ended September 30, 2009 filed with the Florida Department of Financial Services pursuant to Section 218.32(1)(a), Florida Statutes, is in agreement with the annual financial audit report for the fiscal year ended September 30, 2009. We determined that these two reports are in agreement. • Sections 10.554(1)(i)7.c. and 10.556(7), Rules of the Auditor General, require that we apply financial condition assessment procedures. In connection with our audit, we applied financial condition assessment procedures. It is management’s responsibility to monitor the entity’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 management letter is intended solely for the information of the City of Clermont, Florida and management, and the Florida Auditor General, and is not intended to be and should not be used by anyone other than these specified parties. April 16, 2010 114 CITY OF CLERMONT, FLORIDA COMMENTS AND RECOMMENDATIONS STATUS OF PRIOR YEAR COMMENTS Year Ended September 30, 2009 1. Utility Billing Cash Receipts During our audit we noted that utility billing clerks can change the cash received amount in the utility billing software until the batch is closed. We also noted that receipts given to customers are handwritten receipts, and not computer generated receipts. Recommendation We recommend that a supervisor document approval of any revisions to cash received once it is posted, and receipts should be generated from the system to be able to accurately track the correct amount the customer paid. Corrective Action Receipt validating machines have been added to each cashier’s workstation to enable printing of computer generated receipts. Procedures have also been put in place to ensure supervisory approval of any revisions to cash received. 2. Cash Receipt Posting During our audit, we noted that cashiers are not closing batches daily and not posting receipts to customer accounts at the time of payment. Recommendation We recommend that the City implement written procedures which include daily closing of batches and balancing of cash drawers to help identify any cash over/short issues on a timely basis. Written procedures should also require immediate posting of cash receipts. Corrective Action Procedures have been implemented to ensure immediate posting of payments received and daily batch closing and reconciliation. 3. Capital Asset Inventory During our audit we noted that the City is not performing an annual inventory of capital assets. Recommendation We recommend that the City tag all tangible assets, and that the asset listing provide sufficient detail to properly identify assets and perform annual inventories to verify assets are still in use, and reported in the proper department. We were informed by the Finance Department that they have purchased a capital asset program and will begin using it in 2009. 115 CITY OF CLERMONT, FLORIDA COMMENTS AND RECOMMENDATIONS STATUS OF PRIOR YEAR COMMENTS - Continued Year Ended September 30, 2009 3. Capital Asset Inventory - Continued Corrective Action During 2009, the City installed new capital asset software and did a complete inventory of capital assets. 4. Community Redevelopment Fund At September 30, 2008, the fund balance in the Community Redevelopment Fund has a fund balance of $907,346. The fund balance has increased during 2007 and 2008 because of delays in the streetscape project. Our interpretation of Florida Statute 163.387(7) is that if a redevelopment project is not completed within 3 years that money remaining in the Community Redevelopment Fund may have to be returned to each taxing authority. Recommendation We recommend that the City start spending some of the funds in the Community Redevelopment Fund in 2009 and also obtain a legal interpretation of the Florida Statute mentioned above. Corrective Action During 2009, the City obtained a legal interpretation that stated as long as funds are budgeted to a project, they would not have to be returned, even if not spent. 116 CITY OF CLERMONT, FLORIDA COMMENTS AND RECOMMENDATIONS CURRENT YEAR COMMENTS Year Ended September 30, 2009 1. Budget Amendments In the City of Clermont, expenditures may not legally exceed appropriations at the department level. During 2009, there are some special revenue funds where this occurred. Also, in the Recreation Impact Fee Special Revenue Fund, appropriations were in excess of anticipated revenue and prior years fund balance for 2009. Recommendation We recommend that the City amend the budget as allowed by Florida Statutes within 60 days of year end. 2. Deficit Net Assets The Internal Service fund has a deficit fund balance at September 30, 2009. Recommendation We recommend that management evaluate the amount charged to each fund for insurance, and increase the allocation to fully cover the cost of claims paid. 117 118 119 120