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Comprehensive Annual Financial Report - 2016-2017Sol- spool �: -- � � - � � - _ ��•JF.� �- rrr ■ ■■ i WL tar■■osses googol ■■rr CITY OF CLERMONT WONT CLER Choice of Champions FLORIDA Comprehensive Annual Financial Report For Fiscal Year Ended September 30, 2017 October 24, 2016 marked the grand opening of the new police department headquarters for the City of Clermont. The new $8.2 million facility, which is funded from proceeds of the local option 1 -cent sales surtax, is 30,624 square feet and is located at 3600 South Highway 27, adjacent to the Clermont Arts & Recreation Center. The new headquarters has four holding cells, a new evidence room, and a two-way mirror for police lineups and interrogations. Another advanced feature is the hydraulic lift. It has the ability to hoist up to a 10,000 Ib. vehicle that is part of a crime investigation, so they can be processed on site rather than at a towing facility. The new headquarters is also home to a mobile crisis unit and an on-site clinician to assist individuals with mental health issues. CITY OF CLERMONT FLORIDA Comprehensive Annual Financial Report For The Year Ended September 30, 2017 CLEF (ONT Enow. Choice of Champions' Prepared by: Finance Department ie City of Clermont, Florida Comprehensive Annual Financial Report For the Fiscal Year Ended September 30, 2017 TABLE OF CONTENTS INTRODUCTORY SECTION Letterof Transmittal..................................................................................................................... 3 GFOA Certificate of Achievement for Excellence in Financial Reporting .................................... 8 OrganizationChart....................................................................................................................... 9 List of Elected and Appointed Officials...................................................................................... 10 FINANCIAL SECTION Independent Auditor's Report.................................................................................................... 13 Management's Discussion and Analysis................................................................................... 17 Basic Financial Statements: Government -wide Financial Statements: Statement of Net Position................................................................................................. 31 Statement of Activities...................................................................................................... 32 Fund Financial Statements: Balance Sheet — Governmental Funds............................................................................ 33 Statement of Revenues, Expenditures, and Changes in Fund Balance — Governmental Funds................................................................................................... 34 Reconciliation of the Statement of Revenues, Expenditures, and Changes in Fund Balances of Governmental Funds to the Statement of Activities ........................ 35 Statement of Revenues, Expenditures, and Changes in Fund Balance — Budget and Actual — General Fund............................................................................. 36 Statement of Revenues, Expenditures, and Changes in Fund Balance — Budget and Actual — Infrastructure Special Revenue Fund ........................................ 38 Statement of Revenues, Expenditures, and Changes in Fund Balance — Budget and Actual — Community Redevelopment Special Revenue Fund ................. 39 Statement of Net Position — Proprietary Funds................................................................ 40 Statement of Revenues, Expenses, and Changes in Fund Net Position — ProprietaryFunds........................................................................................................ 43 Statement of Cash Flows — Proprietary Funds................................................................. 44 Statement of Fiduciary Net Position — Fiduciary Funds ................................................... 46 Statement of Changes in Fiduciary Net Position — Fiduciary Funds ................................ 47 Notes to the Financial Statements....................................................................................... 51 Required Supplementary Information: Schedule of Funding Progress — Retiree Continuation Insurance Plan ................................ 95 Schedule of Employer Contributions — Retiree Continuation Insurance Plan ....................... 95 Schedule of Changes in Net Pension Liability and Related Ratios — General Employees... 96 Schedule of Changes in Net Pension Liability and Related Ratios — Police ......................... 97 Schedule of Changes in Net Pension Liability and Related Ratios — Fire ............................ 98 Schedule of Contributions and Investment Returns — General Employees .......................... 99 Schedule of Contributions and Investment Returns — Police .............................................. 100 Schedule of Contributions and Investment Returns — Fire .................................................. 101 Combining and Individual Fund Statements and Schedules: Major Governmental Funds: Schedule of Revenues, Expenditures, and Changes in Fund Balance — Budget and Actual — Capital Projects Fund.................................................................... 106 Nonmajor Governmental Funds: Combining Balance Sheet— Other Governmental Funds ................................................... 108 Combining Statement of Revenues, Expenditures, and Changes in Fund Balance — 124 Other Governmental Funds............................................................................................ 110 Schedule of Revenues, Expenditures, and Changes in Fund Balance — 130 Budget and Actual — Recreation Impact Fee Special Revenue Fund ............................ 112 Schedule of Revenues, Expenditures, and Changes in Fund Balance — Budget and Actual — Police Impact Fee Special Revenue Fund .................................... 113 Schedule of Revenues, Expenditures, and Changes in Fund Balance — 135 Budget and Actual — Fire Impact Fee Special Revenue Fund ....................................... 114 Schedule of Revenues, Expenditures, and Changes in Fund Balance — 137 Budget and Actual — Building Services Special Revenue Fund ..................................... 115 Schedule of Revenues, Expenditures, and Changes in Fund Balance — Budget and Actual — Fire Inspection Special Revenue Fund ......................................... 116 Schedule of Revenues, Expenditures, and Changes in Fund Balance — 140 Budget and Actual — Debt Service Fund........................................................................ 117 Fiduciary Funds: Combining Statement of Fiduciary Net Position — Fiduciary Funds .................................... 119 Combining Statement of Changes in Fiduciary Net Position — Fiduciary Funds ................. 120 STATISTICAL SECTION Financial Trends: NetPosition by Component.................................................................................................. 124 Changesin Net Position....................................................................................................... 126 Fund Balance — Governmental Funds................................................................................. 130 Changes in Fund Balances — Governmental Funds............................................................ 132 Revenue Capacity: Governmental Activities Tax Revenues by Source.............................................................. 134 Assessed Value and Estimated Actual Value of Taxable Property ...................................... 135 Property Tax Rates — Direct and Overlapping Governments ............................................... 136 Principal Property Taxpayers............................................................................................... 137 Property Tax Levies and Collections.................................................................................... 138 Debt Capacity: Ratios of Outstanding Debt by Type.................................................................................... 139 Direct and Overlapping Governmental Activities Debt ......................................................... 140 Pledged -Revenue Coverage................................................................................................ 141 Demographic and Economic Information: Demographic and Economic Statistics................................................................................. 146 PrincipalEmployers.............................................................................................................. 147 Principal Water Customers................................................................................................... 148 Principal Sewer Customers.................................................................................................. 149 Operating Information: Full-time Equivalent City Government Employees by Function ........................................... 150 Operating Indicators by Function......................................................................................... 152 Capital Asset Statistics by Function..................................................................................... 154 OTHER REPORTS Independent Auditor's Report on Internal Control Over Financial Reporting and on Compliance and Other Matters Based on an Audit of Financial Statements Performed in Accordance with Government Auditing Standards ........................................ 159 ManagementLetter.................................................................................................................. 161 Communication with those Charged with Governance............................................................ 163 Independent Auditor's Report on Compliance with the Requirements of Section 218.415, Florida Statutes.................................................................................................... 167 INTRODUCTORY SECTION ie CLERWO �NT Choice of Champions April 26, 2018 Honorable Mayor Gail Ash, Council Members and Citizens of the City of Clermont, Florida DARREN S. GRAY CITY MANAGER 352-241-7358 dgray@clermontfl.org Dear Mayor Ash, Council Members and the 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, 2017. State law requires that every general-purpose local government publish within nine 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, 2017. 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 exceed anticipated benefits, the City of Clermont's comprehensive framework of internal controls have 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, 2017, 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 unmodified opinion that the City of Clermont's financial statements for the fiscal year ended September 30, 2017, 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 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 685 W. Montrose Street Clermont, FL 34711 www.ClermontFL.gov 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 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 16.78 square miles and population of approximately 35,807. The City is located in south Lake County, approximately 22 miles west of the City of Orlando and about 25 miles northwest of Walt Disney World. Clermont, known as "Choice of Champions°", 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 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, 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 for 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 and final amended budget -to - actual comparisons are provided in this report for each individual governmental fund. 685 W. Montrose Street Clermont, FL 34711 www.ClermontFL.gov 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. Clermont's economic factors for FY 2017 indicate a continued growth in the local economy that started in FY 2014. Since FY 2014, Clermont's population has increased by 4,062 residents or 12.80°/x. Per Capita Personal Income levels have increased $4,505 or 17.51%. The City's unemployment rate has decreased from 5.6% to 3.1%, which continues to be below the county, state and national averages. Educational institutions in Clermont, such as Lake -Sumter State College, St. Leo University and University of Central Florida, assist in supplying a skilled labor force. The most significant change from the continued growth has been the increase in taxable property values of $538,273,000 or 30.24%. Primarily due to this increase in property values, Clermont's property tax-millage rate of 4.2061 continues to be among the lowest of other comparable cities in the Central Florida region. 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. 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. 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. The City adopts a Five -Year Capital Plan as part of the annual budget process. The Capital Plan is a multi-year prioritized schedule that identifies future capital outlay by year it is intended to be purchased or commenced; the amount to be spent per year; and the funding source. Relevant Financial Policies The City regularly reviews revenues and expenditures throughout the fiscal year. Quarterly Budget Reports are prepared and presented to the City Council. The reports show budget -to -actual for the city's top 10 revenues, total fund revenues, total fund expenditures, departmental expenditures and various department performance indicators. Through this process, 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. 685 W. Montrose Street Clermont, FL 34711 www.ClermontFL.gov Major Initiatives The completion of several capital projects included in the award-winning Master Plan continues to be the major emphasis of the City. The Master Plan offers an exciting view of the future of Clermont and how to protect the very charms that have drawn hundreds of thousands to this internationally -recognized city that is one of the nation's top places to live and also a training ground for the world's elite athletes. The following capital projects are included in the Master Plan and are expected to be completed within the next three years: • The Victory Pointe stormwater project incorporates a unique wetland filter marsh system that will channel highly filtered, clean water into Lake Minneola. In addition, there is a park that includes boardwalks, trails, a new event area, pavilion and a beach. The project is under contract for approximately $9.9 million and is scheduled for completion in the summer of 2018. • The Boat Ramp relocation project involves the relocation of the existing boat ramp to the southern bank of Lake Minneola, adjacent to East Avenue. This location will shift motorized watercraft away from the many events and activities near the existing location. This project will include improvements to East Avenue, as well as rerouting portions of the South Lake Trail to improve safety. The project is anticipated to cost approximately $1.5 million. The Downtown Waterfront District area includes Montrose Street, Minneola Street and Osceola Street between 7th and 8th Street. The proposed improvements will consist of streetscapes, landscaping, bathrooms, lighting, upgrades for event lighting and music, banners and beautification. A focal point will be created at City Hall Park to anchor downtown visitors, creating a destination and meeting point in the heart of downtown Clermont. In addition, a refurbished park at the 8th Street pier will be the demarcation and celebration of the halfway point of the Coast -to -Coast Trail. The project is currently under design and anticipated to cost approximately $11 million. • The Clermont Legacy Loop Trail Spur and smaller connectivity projects will encourage trail users to travel through downtown from the heavily utilized South Lake Trail. The path of the Loop is proposed to run along Minneola Avenue from 7th Street to West of Victory Pointe. The first leg of the loop is between 7th and 8th Street on the North side of Minneola. The project is anticipated to cost approximately $1.3 million. • The Public Wi-Fi Network project involves the construction of a public Wi-Fi network to allow for safer and more accurate navigation of the Coast to Coast Trail. The project is anticipated to cost approximately $750,000. • The Public Works Facility Relocation project involves the expansion and relocation of the existing antiquated facility. The new facility is proposed to be relocated to the Hancock Road corridor, an area that will allow for a larger, more centralized Public Works Facility. Closing on the land for the new facility is expected in the Summer of 2018, with a design of the new facility to begin immediately after. The project is anticipated to cost approximately $9 million. The above noted projects are being funded primarily from several grants and a loan. It is noted that no General Fund reserves are being used to fund the construction of these projects. 685 W. Montrose Street Clermont, FL 34711 www.ClermontFL.gov 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, 2016. This was the 29th 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. A Certificate of Achievement is valid for a period of one year only. We believe that our current comprehensive annual financial report continues to meet the Certificate of Achievement Program's requirements and we are submitting it to the GFOA to determine its eligibility for another certificate. The preparation of this report would not have been possible without the efficient and dedicated services of the staff in the City Manager's office and Finance Department. We would like to express our appreciation to all members of these departments who assisted and contributed to the preparation of this report. Credit also must be given to the Mayor and the City Council for their support in maintaining the highest standards of professionalism in the management of the City of Clermont's finances. Respectfully submitted, Darren S. Gray City Manager Jos ph Van 44e Finance Di ctor 685 W. Montrose Street Clermont, FL 34711 www.ClermontFL.gov 11J Government Finance Officers Association Certificate of Achievement for Excellence in Financial Reporting Presented to City of Clermont Florida For its Comprehensive Annual Financial Report for the Fiscal Year Ended September 30, 2016 Executive Director/CEO 8 City Attorney Citizens of Clermont City Council City Man City Clerk welopment Services conomic ✓elopment Environmental maServices finance mittees Public Information Officer Human Recourses nformation _echnology Parks and Recreation ice ublic Works Fire llllllllllllllllllllllllMPurchasing Diane Travis Mayor Pro -Tem Keith Mullins Council Member City of Clermont, Florida List of Elected and Appointed Officials For the Fiscal Year Ended September 30, 2017 Elected Officials Gail L. Ash Mayor Appointed Officials Darren S. Gray City Manager Dan Mantzaris City Attorney Tracy Ackroyd Howe City Clerk James Kinzler Capital Planning, Grants and Projects Director Vacant Development Services Director Shannon J. Schmidt Economic Development Director Dennis Westrick Environmental Services Director Joseph Van Zile Finance Director `r Ray Goodgame Council Member Timothy Bates Council Member Carle Bishop Fire Chief Susan Dauderis Human Resources Director Don Dennis Information Technology Director Scott Davidoff Parks and Recreation Director Charles Broadway Police Chief Stoney Brunson Public Works Director Freddy Suarez Purchasing Director FINANCIAL SECTION ie `A MCDIRMIT /// DAVIS CERTIFIED PUBLIC ACCOUNTANTS AND ADVISORS INDEPENDENT AUDITOR'S REPORT Honorable Mayor and City Council City of Clermont, Florida Report on the Financial Statements We have audited the accompanying financial statements of the governmental activities, the business -type activities, each major fund, and the aggregate remaining fund information of the City of Clermont, Florida, as of and for the year ended September 30, 2017, and the related notes to the financial statements, which collectively comprise the City's basic financial statements as listed in the table of contents. Management's Responsibility for the Financial Statements City of Clermont's management is responsible for the preparation and fair presentation of these financial statements in accordance with accounting principles generally accepted in the United States of America; this includes the design, implementation, and maintenance of internal control relevant to the preparation and fair presentation of financial statements that are free from material misstatement, whether due to fraud or error. Auditor's Responsibility Our responsibility is to express opinions on these financial statements based on our audit. We conducted our audit in accordance with auditing standards generally accepted in the United States of America and the standards applicable to financial audits contained in Government Auditing Standards, issued by the Comptroller General of the United States. Those standards require that we plan and perform the audit to obtain reasonable assurance about whether the financial statements are free from material misstatement. An audit involves performing procedures to obtain audit evidence about the amounts and disclosures in the financial statements. The procedures selected depend on the auditor's judgment, including the assessment of the risks of material misstatement of the financial statements, whether due to fraud or error. In making those risk assessments, the auditor considers internal control relevant to the entity's preparation and fair presentation of the financial statements in order to design audit procedures that are appropriate in the circumstances, but not for the purpose of expressing an opinion on the effectiveness of the entity's internal control. Accordingly, we express no such opinion. An audit also includes evaluating the appropriateness of accounting policies used and the reasonableness of significant accounting estimates made by management, as well as evaluating the overall presentation of the financial statements. We believe that the audit evidence we have obtained is sufficient and appropriate to provide a basis for our audit opinions. Opinions In our opinion, the financial statements referred to above present fairly, in all material respects, the respective financial position of the governmental activities, the business -type activities, each major fund, and the aggregate remaining fund information of City of Clermont, as of September 30, 2017, and the respective changes in financial position and, where applicable, cash flows thereof and the respective budgetary comparison for the General Fund, Infrastructure Special Revenue Fund, and Community Redevelopment Special Revenue Fund for the year then ended in accordance with accounting principles generally accepted in the United States of America. MCDIRMIT AVIS & COMPANY, LLC 934 NORTH MAGNOLIA AVENUE, SUITE 100 ORLANDO, FLORIDA 32803 TELEPHONE: 407-843-5406 FAX: 407-649-9339 EMAIL: INFO@MCDIRMITDAVIS.COM MEMBERS: PRIVATE COMPANIES PRACTICE SECTION AMERICAN INSTITUTE OF CERTIFIED PUBLIC ACCOUNTANTS FLORIDA INSTITUTE OF CERTIFIED PUBLIC ACCOUNTANTS 13 Other Matters Required Supplementary Information Accounting principles generally accepted in the United States of America require that the Management's Discussion and Analysis and the pension and other postemployment benefits disclosures on page 17 through 28 and 95 through 101 be presented to supplement the basic financial statements. Such information, although not a part of the basic financial statements, is required by the Governmental Accounting Standards Board who considers it to be an essential part of financial reporting for placing the basic financial statements in an appropriate operational, economic, or historical context. We have applied certain limited procedures to the required supplementary information in accordance with auditing standards generally accepted in the United States of America, which consisted of inquiries of management about the methods of preparing the information and comparing the information for consistency with management's responses to our inquiries, the basic financial statements, and other knowledge we obtained during our audit of the basic financial statements. We do not express an opinion or provide any assurance on the information because the limited procedures do not provide us with sufficient evidence to express an opinion or provide any assurance. Other Information Our audit was conducted for the purpose of forming opinions on the financial statements that collectively comprise City of Clermont's basic financial statements. The introductory section, combining and individual fund financial statements and schedules, and statistical section, are presented for purposes of additional analysis and are not a required part of the financial statements. The combining and individual nonmajor fund financial statements and schedules are the responsibility of management and were derived from and related directly to the underlying accounting and other records used to prepare the basic financial statements. Such information has been subjected to the auditing procedures applied in the audit of the basic financial statements and certain additional procedures, including comparing and reconciling such information directly to the underlying accounting and other records used to prepare the basic financial statements or to the basic financial statements themselves, and other additional procedures in accordance with auditing standards generally accepted in the United States of America. In our opinion, the information is fairly stated, in all material respects, in relation to the basic financial statements as a whole. Other Reporting Required by Government Auditing Standards In accordance with Government Auditing Standards, we have also issued a report dated April 26, 2018 on our consideration of City of Clermont's internal control over financial reporting and on our tests of its compliance with certain provisions of laws, regulations, contracts, and grant agreements and other matters. The purpose of that report is to describe the scope of our testing of internal control over financial reporting and compliance and the results of that testing, and not to provide an opinion on internal control over financial reporting or on compliance. That report is an integral part of an audit performed in accordance with Government Auditing Standards in considering City of Clermont's internal control over financial reporting and compliance. -1 &V7zit lam & 6&MJP UVA LLC Orlando, FL April 26, 2018 14 MANAGEMENT'S DISCUSSION AND ANALYSIS 15 ie im 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, 2017. 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 3 through 7 of this report. Financial Highlights • The City of Clermont's assets and deferred outflows of resources exceeded its liabilities and deferred inflows at September 30, 2017 by $176,775,344 (net position). Of this amount, $56,784,546 (unrestricted net position) may be used to meet the City's ongoing obligations to citizens and creditors. • The City's total net position increased by $6,968,660 (or 4.10%) during fiscal year 2017 primarily due to an increase in capital assets. • At September 30, 2017, the City of Clermont's governmental funds reported combined ending fund balances of $38,172,886 an increase of $22,022,165 from the previous fiscal year. Of this amount $7,137,156 (unassigned fund balance) is available for spending at the government's discretion. • The General Fund, the City's primary operating fund, reported an unassigned fund balance of $7,137,156, which represents 27.4% 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 Position and a Statement of Activities. These statements appear on pages 31 and 32 of the report. The Statement of Net Position presents information on all of the City's assets and liabilities and deferred inflows/outflows of resources, with the difference reported as net position. Over time, increases or decreases in net position may serve as a useful indicator of whether the financial position of the City is improving or deteriorating. The Statement of Activities presents information showing how the City's net position changed during the most recent fiscal year. All changes in net position are reported as soon as the underlying event giving rise to the change occurs, regardless of the timing of related cash flows. Thus, revenues and expenses are reported in this statement for some items that will only result in cash flows in future fiscal periods (e.g., uncollected taxes and earned but unused vacation leave). 17 MANAGEMENT'S DISCUSSION AND ANALYSIS (CONTINUED) 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, and culture and recreation. The business -type activities of the City of Clermont include water, sewer, sanitation, and stormwater utilities. 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 eleven 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, Capital Projects Fund, Infrastructure Fund, and Community Redevelopment Fund, all of which are considered to be major funds. Data from the other seven governmental funds are combined into a single, aggregated presentation. Individual fund data for each of these nonmajor 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 36 - 37), the Infrastructure Fund (page 38) and the Community Redevelopment Fund (page 39) to demonstrate compliance with budgets. Other major and nonmajor funds comparisons can be found beginning on page 106. The basic governmental fund financial statements can be found on pages 33 - 39 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 40 - 45 of this report. 18 MANAGEMENT'S DISCUSSION AND ANALYSIS (CONTINUED) 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, sanitation, and stormwater which are all considered to be major funds. 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 46 - 47 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 51 - 92 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 106 - 120 of this report. Government -Wide Financial Analysis The following is a summary of the City's net position for governmental and business -type activities for the current year as compared to the prior year. For more detail see the Statement of Net Position on page 31. 19 MANAGEMENT'S DISCUSSION AND ANALYSIS (CONTINUED) Net Position Net investment in capital assets Governmental Activities Business -type Activities Total 60,149,593 95,048,691 2016-17 2015-16 2016-17 2015-16 2016-17 2015-16 Assets: 20,360,649 Unrestricted 30,117,403 11,181,718 26,667,143 26,050,291 Current and other assets $ 41,606,498 $ 20,484,583 $ 53,242,346 $ 44,627,429 $ 94,848,844 $ 65,112,012 Capital assets 66,020,164 63,573,462 76,698,502 72,745,502 142,718,666 136,318,964 Total assets 107,626,662 84,058,045 129,940,848 117,372,931 237,567,510 201,430,976 Deferred Outflows of Resources: Deferred outflow of pension earnings 6,817,441 6,321,091 - - 6,817,441 6,321,091 Deferred chargeof refunding - - 445,842 479,490 445,842 479,490 Total deferred outflows of resources 6,817,441 6,321,091 445,842 479,490 7,263,283 6,800,581 Liabilities: Long-term liabilities outstanding 39,746,802 16,522,663 20,642,756 14,816,899 60,389,558 31,339,562 Other liabilities 2,763,303 3,343,964 2,818,537 2,877,047 5,581,840 6,221,011 Total liabilities 42,510,105 19,866,627 23,461,293 17,693,946 65,971,398 37,560,573 Deferred Inflow of Resources: Deferred inflow of pension earnings 2,084,051 864,300 - - 2,084,051 864,300 Net investment in capital assets 31,917,984 52,064,433 63,130,707 60,149,593 95,048,691 112,214,026 Restricted 7,814,560 6,402,058 17,127,547 13,958,591 24,942,107 20,360,649 Unrestricted 30,117,403 11,181,718 26,667,143 26,050,291 56,784,546 37,232,009 Total net position $ 69,849,947 $ 69,648,209 $ 106,925,397 $ 100,158,475 $ 176,775,344 $ 169,806,684 The City's total net position at September 30, 2017 was $176,775,344. Of the City's total net position $95,048,691 (53.8%) 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 position, $24,942,107 (14%) represents resources that are subject to external restrictions on how they may be used. The remaining balance of the City's total net position, $56,784,546 (32.2%) is unrestricted. These assets may be used at the City's discretion in meeting its ongoing obligations to citizens and creditors. The City's net position increased by $6,968,660 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. The following is a summary of the City's governmental and business -type activities for fiscal year 2016-17, including revenues and expenses, with a comparison to the prior year. For more detail see the Statement of Activities on page 32. 20 MANAGEMENT'S DISCUSSION AND ANALYSIS (CONTINUED) Revenues: Program revenues - Charges for services Operating grants and contributions Captial grants and contributions General revenues - Property Taxes Business Taxes Franchise Fees Utility Taxes Intergovernmental Investment income and miscellaneous Gain on sale of capital assets Total revenues Expenses: General government Public safety Physical emArommnet Transportation Economic environment Culture and recreation Interest on long-term debt Water Sewer Sanitation Stormwater Total expenses Increase (Decrease) in Net Position Before Transfers Special item - loss on sale of capital asset Transfers Increase in Net Position Net Position - Beginning, as restated Net Position - Ending Changes in Net Position Governmental Activities Business-tvne Activities Total 2016-17 2015-16 2016-17 2015.16 2016-17 2015-16 $ 6,688,146 $ 6,040,220 $ 17,115, 766 16, 284, 789 $ 23, 803, 912 $ 22, 325, 009 1,456,593 1,822,036 - 24,250 1,456,593 1,846,286 309,225 162,556 6,906,054 4,026,329 7,215,279 4,188,885 9,747,683 8,998,107 - - 9,747,683 8,998,107 132,541 140,411 132,541 140,411 2,619,192 2,711,911 2,619,192 2,711,911 3,328,087 3,405,642 3,328,087 3,405,642 7,256,705 6,923,296 7,256,705 6,923,296 682,919 520,957 255,250 260,247 938,169 781,204 86,211 121,794 24,411 119,718 110,622 241,512 32,307,302 30,846,930 24,301,481 20,715,333 56,608,783 51,562,263 4,239,914 4,157,006 - - 4,239,914 4,157,006 20,296,917 17,380,524 20,296,917 17,380,524 805,255 788,197 805,255 788,197 2,009,325 2,184,939 2,009,325 2,184,939 1,196,693 208,668 1,196,693 208,668 4,490,710 5,459,828 4,490,710 5,459,828 434,473 355,314 434,473 355,314 5,198,731 4,719,165 5,198,731 4,719,165 6,909,806 6,866,337 6,909,806 6,866,337 2,868,709 2,924,660 2,868,709 2,924,660 1,189,590 1,142,260 1,189,590 1,142,260 33,473,287 30,534,476 16,166,836 15,652,422 49,640,123 46,186,898 (1,165,985) 312,454 8,134,645 5,062,911 6,968,660 5,375,365 1,367,723 568,487 (1,367,723) (568,487) - - 201,738 880,941 6,766,922 4,494,424 6,968,660 5,375,365 69,648,209 68,767,268 100,158,475 95,664,051 169,806,684 164,431,319 $ 69,849,947 $ 69,648,209 1 $ 106,925,397 $ 100,158,475 $ 176,775,344 $ 169,806,684 Governmental activities - Governmental activities increased the City of Clermont's net position by $201,738. This change is primarily due to the implementation of a reoccurring operating transfer from the Sewer Fund to the General Fund based on sewer service fees. 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. 21 MANAGEMENT'S DISCUSSION AND ANALYSIS (CONTINUED) $25,000,000 $20,000,000 $15,000,000 $10,000,000 $5,000,000 $0 Expenses and Program Revenues - Governmental Activities Generalgovernment Pubhc Safety TransPortation/public wo'rkse & recreation Physical environment and otht on long-terrn debt er The following pie chart illustrates the composition of governmental activities revenue and its percent in relation to total governmental activities revenues. Revenues by Source - Governmental Activities ■ Intergovernmental ■ Charges for services Operating grants and contributions ■ Investment income and miscellaneous ■ Other taxes Capital grants and contributions Property taxes Property taxes, 3 Capital grants and contributions, 1.0% Other taxes, 18.8% Invests — -U miscellaneous, 2.4% Operating grants and contributions, 4.5% Intergovernmental, 22.5% !s for services, 20.7% Business -type activities - Business -type activities increased the City of Clermont's net position by $6,766,922. This change is primarily due to grants totaling $2,643,259 and capital contributions of $4,262,795. Several grants were received for use in the construction of the Victory Pointe master Plan project. 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 capital costs associated with the 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 Wastewater Treatment Facility Expansion. 22 MANAGEMENT'S DISCUSSION AND ANALYSIS (CONTINUED) 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. $10,000,000 $9,000,000 $8,000,000 $7,000,000 $6,000,000 $5,000,000 $4,000,000 $3,000,000 $2,000,000 $1,000,000 $0 Expenses and Program Revenues - Business Type Activities Water Sewer Sanitation Stormwater The following pie chart illustrates the composition of business -type activities revenue and its percent in relation to total business -type activities revenues. Revenues by Source - Business Activities ■ Investment income and miscellaneous ■ Charges for Services ❑ Capital Grants and Contributions Charges for Services, 70.4% Capital Grants and ontributions, 28.4% 23 Investment income and miscellaneous, 1.2% MANAGEMENT'S DISCUSSION AND ANALYSIS (CONTINUED) 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, unassigned fund balance may serve as a useful measure of a government's net resources available for spending at the end of the fiscal year. As of September 30, 2017, the City of Clermont's governmental funds reported combined ending fund balances of $38,172,886 an increase of $22,022,165 in comparison with the prior year. This increase is primarily due to the unspent proceeds from the $30,000,000 Master Plan Capital Projects Revenue Note issued in June 2017. Of the governmental funds combined ending fund balances, $7,137,156 (18.7%) represents unassigned fund balance, which is available for spending at the City's discretion. An additional $22,624,368 (assigned fund balance) has been set aside for planned master plan project expenditures. Restricted fund balances totaling over $6.1 million include funds required for debt service, as well as funds collected for specific purposes such as impact fees and community redevelopment. The remainder of fund balance is nonspendable ($2,260,551) to indicate that it is not available for spending because it has already been committed for 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, 2017, the fund balance in the General Fund was $7,983,935 a decrease of $709,535 in comparison with the prior year due to current expenditures exceeding current revenues. The change in fund balance was less than the anticipated amount of the original budget by $709,535 and $1.2 million higher than the revised budget. Revenues exceeded budget by $198,040, primarily due to an increase in utility services tax revenue. Departmental expenditures also came in less than anticipated reducing the amount of reserves used. Of the total fund balance in the General Fund, $7,137,156 (89.4%) is unassigned fund balance. As a measure of the General Fund's liquidity, it may be useful to compare both unassigned fund balance and total fund balance to total fund expenditures. Unassigned fund balance represents 27.4% of total General Fund expenditures, while total fund balance represents 30.1 % of that same amount. The City has a Capital Projects Fund that is considered a major fund under criteria set forth by GASB Statement No. 34. This fund is used to account for the acquisition of capital assets or construction of major capital projects not being financed by proprietary funds. Funds have been accumulated so projects can be completed on a pay-as-you-go basis. The fund balance in this fund increased by $21,410,349 in fiscal year 2017, primarily due to unspent proceeds from the Master Plan Capital Projects Revenue Note. The City has an Infrastructure Fund that is considered a major fund under criteria set forth by GASB Statement No. 34. 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. The fund balance in this fund decreased by $688,890 in fiscal year 2017 primarily due to significant renovations at Hancock Park and Palatlakaha Park and the purchase of a heavy rescue fire truck. 24 MANAGEMENT'S DISCUSSION AND ANALYSIS (CONTINUED) 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 and modified in 2015. The incremental annual increase in tax over the base years is used to fund projects. The fund balance in this fund decreased by $41,139 in fiscal year 2017 primarily due to the construction of a Downtown Restroom Facility. The remainder of the change of $2,051,380 to the governmental fund balance was from the non - major governmental funds. Recreation, Police and Fire Impact Fee fund balances combined increased a total of $1,638,557 in fiscal year 2017 primarily due to an increase in impact fee revenues and fewer impact fee qualified capital projects under construction. The Building Services fund balance increased $228,798 due to the increase in licenses and permits. The fund balances in the remaining nonmajor funds increased a total of $184,025. 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, sanitation and stormwater. The Water Fund accounts for the provision of potable water and reclaimed irrigation 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, 2017, the City of Clermont's Water Fund reported total net position of $39,988,458, an increase of $2,969,665 in comparison with the prior year. This increase in net position was due to revenues exceeding expenses as well as an increase in capital contributions. 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, 2017, the City of Clermont's Sewer Fund reported total net position of $55,170,997, an increase of $2,084,546 in comparison with the prior year. This increase in net position was primarily due to an increase in capital contributions. 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, 2017, the City of Clermont's Sanitation Fund reported total net position of $5,366,204, an increase of $233,991 in comparison with the prior year. This increase in net position is primarily due to revenues exceeding expenses. The Stormwater Fund accounts for the management of the City's stormwater drainage system. All activities necessary to the provision of these services are accounted for in this fund. As of September 30, 2017, the City of Clermont's Stormwater Fund reported total net position of $6,509,761, an increase of $1,591,680 in comparison with the prior year. The increase in net position is primarily due to an increase in grants pertaining to the Victory Pointe Master Plan Project. 25 MANAGEMENT'S DISCUSSION AND ANALYSIS (CONTINUED) General Fund Budgetary Highlights During the year, there was a $2,369,278 increase in appropriations between the original and final amended budget. Following are the significant components of the increase: • $626,739 for additional police and fire pension contributions due to a change in state law requirements regarding mortality tables. • $307,216 for six (6) new firefighters. • $226,660 for a transfer to the Fire Inspection Fund to cover an operating deficit in this fund. • $207,559 for the purchase of future recreation land partially funded by a state grant. • $189,971 for the increased contract cost associated with cleaning city buildings. • $174,166 for the increased cost for the city to manage the daily operations of the Clermont City Center building. General Fund revenue increases totaling $445,427 were primarily due to several recreation and public safety grants received during the year. Considering the above noted increases in General Fund budgeted appropriations, actual expenditures were less than budgeted by $903,268. In addition, actual revenues exceeded the budget by $311,048. 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 68 - 69 of this report. La n d Buildings Infrastructure Machinery and Equipment Intangibles Construction in Progress Total Capital Assets (net of depreciation) Governmental Activities Business -type Activities Total 2016-17 2015-16 2016-17 2015-16 2016-17 2015-16 $ 24,773,111 $ 24,528,229 $ 1,084,037 $ 1,074,887 $ 25,857,148 $ 25,603,116 21,709,644 14,444,055 260,643 - 21,970,287 14,444,055 11, 897, 837 10, 447, 850 65, 380,116 62, 633, 546 77, 277, 953 73, 081, 396 5,937,986 5,222,651 3,610,140 3,347,868 9,548,126 8,570,519 156,072 193,180 165,284 1,545,514 8,737,497 6,198, 282 174,073 321,356 367,253 5,515,128 7,743,796 14, 252, 625 $ 66,020,164 $ 63,573,462 $ 76,698,502 $ 72,745,502 $ 142,718,666 $ 136,318,964 26 MANAGEMENT'S DISCUSSION AND ANALYSIS (CONTINUED) The City of Clermont's investment in capital assets for its governmental and business -type activities as of September 30, 2017, amounts to $142,718,666 (net of accumulated depreciation). This investment in capital assets includes land, buildings, improvements/infrastructure, machinery and equipment and intangibles. The total change in the City's investment in capital assets for the current fiscal year was $6,399,702. Following are the significant capital asset events that occurred during the current fiscal year: • Purchase of future recreation land in the amount of $207,659. • Completion of the Police Department Headquarters - total project cost of $8,218,591 was moved from Construction in Progress to Buildings. • Completion of the Downtown Restroom Facility - $237,097 was added and prior years Construction in Progress in the amount of $23,404 was moved to Buildings for a total project cost of $260,501. • Completion of Palatlakaha Park and Hancock Park improvements - total improvements cost of $1,147,307 was included in infrastructure. • Completion of the Eighth Street Gateway improvements - $503,428 was added and prior years Construction in Progress in the amount of $42,570 was moved to Infrastructure for a total project cost of $546,178. • Completion of the Water System Loop project - $639,500 was added and prior years Construction in Progress in the amount of $3,503,454 was moved to Infrastructure for a total project cost of $4,142,954. • Completion of the Community Development Block Grant (CDBG) and Drew/East Streets Stormwater Improvement projects- $597,388 was added and prior years Construction in Progress in the amount of $541,410 was moved to Infrastructure for a total project cost of $1,138,796. • Purchase of fifteen police vehicles for a total of $533,143. • Purchase of a heavy rescue fire truck for $753,852. • Purchase of a sewer crane truck for $133,901. • Purchase of three sanitation vehicles for a total of $345,808. • Construction in Progress includes construction of Victory Pointe, Public Works Complex, City Limit Signage, Legacy Loop Trail Spur, Boat Ramp Relocation, Downtown Waterfront Revitalization, Kehlor Building replacement, Promenade, Montrose Street Improvements, Compass/Wayfinding, Warehouse Expansion, NE Water System Loop, John's Lake Road Reuse, Lower Floridan Wells, Asset Management System Software and the East Wastewater Plant Expansion. 27 MANAGEMENT'S DISCUSSION AND ANALYSIS (CONTINUED) 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 70 - 73 of this report. Outstanding Debt Governmental Activities Business -type Activities Total 2016-17 2015-16 2016-17 2015-16 2016-17 2015-16 Revenue bonds payable $ - $ - $ 12,365,000 $ 13,035,000 $ 12,365,000 $ 13,035,000 Notes payable 34,102,180 11,509,029 6,329,441 - 40,431,621 11,509,029 Total $ 34,102,180 $ 11,509,029 $ 18,694,441 $ 13,035,000 $ 52,796,621 $ 24,544,029 As of September 30, 2017, total outstanding debt was $52,796,621, an increase of $28,252,592 over the previous year. Total debt increased due to the issuance of a $30,000,000 Master Plan Capital Projects Revenue Note in June 2017. The note is for 15 years with a fixed interest rate of 2.63% and will provide a significant portion of the funding for master plan projects noted in the Letter of Transmittal. Next Year's Budgets and Rates The fiscal year 2018 budget was approved with no use of reserves to balance the General Fund budget and no change to the property tax millage rate. Property values continued to increase in fiscal year 2018 in the amount of 10.76%. Pursuant to a utility rate study performed by a private consulting firm, the Clermont City Council adopted a resolution in December 2017 that provided for an increase to stormwater rates in January 2018. The resolution also provides for inflation based increases to the water, sewer, stormwater and sanitation rates every October 1, starting on October 1, 2018 based on the Florida Public Service Commission Annual Deflator Index. The rate increases are necessary, primarily to provide funding for future planned capital projects. 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 Finance Director, City of Clermont, P.O. Box 120219, Clermont, Florida 34712. 28 BASIC FINANCIAL STATEMENTS 29 ie 30 CITY OF CLERMONT, FLORIDA STATEMENT OF NET POSITION September 30, 2017 Deferred Outflows of Resources: Deferred outflow of pension earnings Deferred charge on refunding Total deferred outflows of resources Liabilities: Accounts payable and accrued expenses Due to other governmental agencies Unearned revenue Noncurrent liabilities: Due within one year Due in more than one year Total liabilities Deferred Inflows of Resources: Deferred inflow of pension earnings Net Position: Net investment in capital assets Restricted for: Capital Improvements Community redevelopment Public safety Culture and recreation Infrastructure Debt service Building services Perpetual care: Nonexpendable U n restricted Total net position 6,817,441 - Primary Government - 445,842 Governmental Business -type 445,842 7,263,283 Activities Activities Total Assets: 2,818,537 5,517,445 7,935 Cash and cash equivalents $ 6,857,581 $ 6,969,457 $ 13,827,038 Investments 19,580,773 21,123,145 40,703,918 Receivables, net 960,991 1,353,165 2,314,156 Inventories 24,180 403,065 427,245 Due from other governments 862,204 1,605,023 2,467,227 Internal balances (747,513) 747,513 - Prepaid costs 655,570 116,126 771,696 Restricted assets: - 302,385 1,403,395 Cash and cash equivalents - 1,591,721 1,591,721 Investments 12,834,383 19,258,023 32,092,406 Interest receivable 41,195 75,108 116,303 Net pension asset 537,134 - 537,134 Capital assets not being depreciated 26,318,625 7,282,319 33,600,944 Capital assets being depreciated, net of 106,925,397 $ 176,775,344 accumulated depreciation 39,701,539 69,416,183 109,117,722 Total assets 107,626,662 129,940,848 237,567,510 Deferred Outflows of Resources: Deferred outflow of pension earnings Deferred charge on refunding Total deferred outflows of resources Liabilities: Accounts payable and accrued expenses Due to other governmental agencies Unearned revenue Noncurrent liabilities: Due within one year Due in more than one year Total liabilities Deferred Inflows of Resources: Deferred inflow of pension earnings Net Position: Net investment in capital assets Restricted for: Capital Improvements Community redevelopment Public safety Culture and recreation Infrastructure Debt service Building services Perpetual care: Nonexpendable U n restricted Total net position 6,817,441 - 6,817,441 - 445,842 445,842 6,817,441 445,842 7,263,283 2,698,908 2,818,537 5,517,445 7,935 - 7,935 56,460 - 56,460 1,102,060 731,551 1,833,611 38,644,742 19,911,205 58,555,947 42,510,105 23,461,293 65,971,398 2,084,051 - 2,084,051 31,917,984 63,130,707 95,048,691 - 17,127,547 17,127,547 302,385 - 302,385 1,403,395 - 1,403,395 2,049,160 - 2,049,160 1,143,236 - 1,143,236 1,077,299 - 1,077,299 613,806 - 613,806 1,225,279 - 1,225,279 30,117,403 26,667,143 56,784,546 $ 69,849,947 $ 106,925,397 $ 176,775,344 The accompanying Notes to Financial Statements are an integral part of this statement. 31 CITY OF CLERMONT, FLORIDA STATEMENT OF ACTIVITIES Year Ended September 30, 2017 The accompanying Notes to Financial Statements are an integral part of this statement. 32 Net (Expense) Revenue and Changes in Net Position Program Revenue Primary Government Operating Grants Capital Grants Charges for and and Governmental Business -type Functions/Programs: Expenses Services Contributions Contributions Activities Activities Total Governmental Activities: General government $ 4,239,914 $ 3,179,987 $ - $ - $ (1,059,927) $ - $ (1,059,927) Public safety 20,296,917 1,505,540 931,542 - (17,859,835) - (17,859,835) Physical environment 805,255 - 4,602 - (800,653) - (800,653) Transportation/public works 2,009,325 - 519,923 - (1,489,402) - (1,489,402) Economic environment 1,196,693 - 526 - (1,196,167) - (1,196,167) Culture and recreation 4,490,710 2,002,619 - 309,225 (2,178,866) - (2,178,866) Interest on long-term debt 434,473 - - - (434,473) - (434,473) Total governmental activities 33,473,287 6,688,146 1,456,593 309,225 (25,019,323) - (25,019,323) Business -type Activities Water 5,198,731 6,516,000 - 2,131,029 - 3,448,298 3,448,298 Sewer 6,909,806 6,507,015 - 3,017,003 - 2,614,212 2,614,212 Sanitation 2,868,709 3,088,480 - - - 219,771 219,771 Stormwater 1,189,590 1,004,271 - 1,758,022 - 1,572,703 1,572,703 Total business -type activities 16,166,836 17,115,766 - 6,906,054 - 7,854,984 7,854,984 Total primary government $ 49,640,123 $ 23,803,912 $ 1,456,593 $ 7,215,279 (25,019,323) 7,854,984 (17,164,339) General Revenues: Property taxes 9,747,683 - 9,747,683 Business taxes 132,541 - 132,541 Franchise fees 2,619,192 - 2,619,192 Utility taxes 3,328,087 - 3,328,087 Intergovernmental - unrestricted 7,256,705 - 7,256,705 Unrestricted investment earnings 197,323 255,250 452,573 Miscellaneous 485,596 - 485,596 Gain on Sale of Capital Assets 86,211 24,411 110,622 Transfers 1,367,723 (1,367,723) - Total general revenues and transfers 25,221,061 (1,088,062) 24,132,999 Change in net position 201,738 6,766,922 6,968,660 Net Position - beginning 69,648,209 100,158,475 169,806,684 Net Position - ending $ 69,849,947 $ 106,925,397 $ 176,775,344 The accompanying Notes to Financial Statements are an integral part of this statement. 32 CITY OF CLERMONT, FLORIDA BALANCE SHEET GOVERNMENTAL FUNDS September 30, 2017 Liabilities: Accounts payable $ 718,015 $ 333,206 $ 368,792 $ 1,594 $ Community Other Total - 7,935 Capital Infrastructure Redevelopment Governmental Governmental 5,000 General Projects Special Revenue Special Revenue Funds Funds Assets: 33,018 3,029,575 Deferred Inflows of Resources: Unavailable revenue - liens, forfeitures and Cash and cash equivalents $ 703,189 $ 5,044,451 $ 165,776 $ 40,805 $ 895,736 $ 6,849,957 Investments 7,486,733 5,061,377 692,438 260,454 5,217,691 18,718,693 Receivables, net 972,341 14,224 1,457 548 11,720 1,000,290 Inventories, at cost 24,180 - - - - 24,180 Due from other governments 648,943 6,140,119 213,261 - - 862,204 Advances to other funds 355,522 - - 1,676 12,393 369,591 Prepaid costs 198,399 15,000 439,096 496 2,579 655,570 Restricted Investments - 12,834,383 - - - 12,834,383 Total assets $ 10,389,307 $ 22,969,435 $ 1,512,028 $ 303,979 $ 6,140,119 $ 41,314,868 Liabilities: Accounts payable $ 718,015 $ 333,206 $ 368,792 $ 1,594 $ 33,018 $ 1,454,625 Payable to other governments 7,935 - - - - 7,935 Due to other funds 727,127 727,127 Deposits 5,000 5,000 Accrued liabilities 778,428 778,428 Unearned revenue 56,460 - - - - 56,460 Total liabilities 2,292,965 333,206 368,792 1,594 33,018 3,029,575 Deferred Inflows of Resources: Unavailable revenue - liens, forfeitures and rents 112,407 - - - - 112,407 Total deferred inflows of resources 112,407 - - - - 112,407 Fund Balances: Nonspendable 578,101 15,000 439,096 496 1,227,858 2,260,551 Restricted 265,539 - 704,140 301,889 4,879,243 6,150,811 Assigned 3,139 22,621,229 - - - 22,624,368 Unassigned 7,137,156 - - - - 7,137,156 Total fund balances 7,983,935 22,636,229 1,143,236 302,385 6,107,101 38,172,886 Total liabilities, deferred inflows of resources, and fund balances $ 10,389,307 $ 22,969,435 $ 1,512,028 $ 303,979 $ 6,140,119 Amounts reported for governmental activities in the Statement of Net Position are different because: Capital assets used in governmental activities are not financial resources and are not reported in the funds. 66,020,164 Accrued interest payable is not due in the current period and therefore is not reported in the funds. (239,295) Other long-term assets are not available to pay for current period expenditures and, therefore are deferred in the funds. 112,407 Deferred inflows and outflows of resources related to pension earnings are not recognized in governmental funds, however, they are recorded in net position under full accrual accounting. 4,733,390 Net pension assets are not current financial resources and therefore are not reported in the funds 525,898 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 Position. 260,063 Long-term liabilities are not due and payable in the current period and therefore are not reported in the funds. (39,735,566) Net Position of Governmental Activities in the Statement of Net Position $ 69,849,947 The accompanying Notes to Financial Statements are an integral part of this statement. 33 CITY OF CLERMONT, FLORIDA STATEMENT OF REVENUES, EXPENDITURES AND CHANGES IN FUND BALANCE: GOVERNMENTAL FUNDS Year Ended September 30, 2017 Expenditures: 1,291,156 23,781,690 Community Other Total Current: Transfers out Infrastructure Redevelopment Governmental Governmental General government General Capital Projects Special Revenue Special Revenue Funds Funds Revenues: 15,318,442 325,924 1,148,450 1,695,397 18,488,213 Taxes $ 12,994,594 $ $ $ 213,717 $ $ 13,208,311 Franchise fees 2,619,192 (154,695) - 24,524,492 2,619,192 Licenses and permits 283,952 (688,890) - 1,310,436 1,594,388 Intergovernmental revenues 5,937,873 3,115,549 1,179,569 - 9,053,422 Charges for services 1,544,430 - 22,636,229 $ 201,919 1,746,349 Fines and forfeitures 357,949 - - 357,949 Impact fees/special assessments - - 2,341,197 2,341,197 Investment earnings 86,575 67,403 5,516 2,427 29,482 191,403 Miscellaneous 995,810 - - - 126,451 1,122,261 Total revenues 24,820,375 67,403 3,121,065 216,144 4,009,485 32,234,472 Expenditures: 1,291,156 23,781,690 1,651,886 Current: Transfers out (890,259) - (823,025) (154,695) General government 3,854,879 459 54,711 441 3,910,490 Public safety 15,318,442 325,924 1,148,450 1,695,397 18,488,213 Physical environment 738,247 - 130,645 - 868,892 Transportation 1,213,156 (154,695) 473,555 24,524,492 1,686,711 Economic environment 221,759 (688,890) - 102,588 324,347 Culture and recreation 4,664,475 1,225,880 1,179,569 - 152,439 5,996,483 Debt Service: FundBalances- ending $ 7,983,935 $ 22,636,229 $ 1,143,236 $ 302,385 Principal retirement - - 1,077,408 1,077,408 Interest and fiscal charges 6,060 - 265,834 271,894 Capital Outlay: Public safety - 17,570 - 17,570 Physical environment 8,767 8,767 Economic environment - 2,086,024 - - 2,086,024 Total expenditures 26,017,018 2,438,744 2,986,930 102,588 3,191,519 34,736,799 Excess (Deficiency) of Revenues Over Expenditures (1,196,643) (2,371,341) 134,135 113,556 817,966 (2,502,327) Other Financing Sources (Uses): Transfers in 1,291,156 23,781,690 1,651,886 26,724,732 Transfers out (890,259) - (823,025) (154,695) (24,089,031) (25,957,010) Revenue notes issued - 23,670,559 23,670,559 Sale of general capital assets 86,211 - 86,211 Total other financing sources (uses) 487,108 23,781,690 (823,025) (154,695) 1,233,414 24,524,492 Net Change in Fund Balances (709,535) 21,410,349 (688,890) (41,139) 2,051,380 22,022,165 Fund Balances - beginning 8,693,470 1,225,880 1,832,126 343,524 4,055,721 16,150,721 FundBalances- ending $ 7,983,935 $ 22,636,229 $ 1,143,236 $ 302,385 $ 6,107,101 $ 38,172,886 The accompanying Notes to Financial Statements are an integral part of this statement. 34 CITY OF CLERMONT, FLORIDA RECONCILIATION OF THE STATEMENT OF REVENUES, EXPENDITURES, AND CHANGES IN FUND BALANCES OF GOVERNMENTAL FUNDS TO THE STATEMENT OF ACTIVITIES Year Ended September 30, 2017 Net Change in Fund Balances - total governmental funds: $ 22,022,165 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. 2,446,702 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. (25,451) Revenue reported in the funds must be eliminated from the statement of activities since revenue was recognized in a prior year. 6,150 Cash pension contributions reported in the funds were more than the calculated pension expense on the statement of activities, and therefore increased net position (1,103,487) Governmental funds report note proceeds as current financial resources. In contrast, the Statement of Activities treats such issuance of debt as a liability. Governmental funds report repayment of note 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. (22,593,151) 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. (782,331) Internal service funds are used by management to charge the costs of certain activities, such as health insurance, to individual funds. The net revenue (expense) of certain internal service funds is reported with governmental activities. 231,141 Change in Net Position of Governmental Activities $ 201,738 The accompanying Notes to Financial Statements are an integral part of this statement. 35 CITY OF CLERMONT, FLORIDA GENERAL FUND STATEMENT OF REVENUES, EXPENDITURES AND CHANGES IN FUND BALANCE-_ BUDGET ALANCE- BUDGET AND ACTUAL Revenues: Taxes Franchise fees Licenses and permits Intergovernmental revenues Charges for services Fines and forfeitures Investment earnings Miscellaneous Total revenues Expenditures: Current: General government: City council City clerk City manager Finance Legal services Planning & zoning Information technology Human resources Purchasing Other general government Public safety: Law enforcement Fire control Physical environment Transportation Economic environment Culture and recreation Culture and recreation Events Arts and rec center Interest and fiscal charges Total expenditures Year Ended September 30, 2017 Budgeted Amounts Original Final $ 12,754,847 $ 12,754,847 2,653,400 2,653,400 427,320 427,320 5,490,962 5,881,456 1,558,920 1,558,920 340,135 340,135 62,993 62,994 930,890 943,263 24,219,467 24,622,335 26,190 26,190 293,172 292,857 471,447 461,673 807,875 805,824 97,600 106,156 646,901 657,654 740,486 731,897 451,016 442,249 259,337 257,627 188,472 307,602 3,982,496 4,089,729 7,886,990 8,043,453 6 600 RA1 7 4'10 RVI Actual Variance with Amounts, Final Budget - Budgetary Positive Basis (Negative) 105,028 1,128 $ 12,994,594 $ 239,747 2,619,192 (34,208) 283,952 (143,368) 5,937,873 56,417 1,544,430 (14,490) 357,949 17,814 86,575 23,581 995,810 52,547 24,820,375 198,040 24,498 1,692 272,372 20,485 417,822 43,851 778,536 27,288 105,028 1,128 643,040 14,614 687,475 44,422 408,016 34,233 220,331 37,296 297,761 9,841 3,854,879 234,850 7,897,321 146,132 7 491 191 A S19 14,487,681 15,474,086 15,318,442 155,644 78'1 R'IA 7AS 89n 1,289,767 1,269,746 7IR 947 57 5TI 1,213,156 56,590 265,642 223,790 221,759 2,031 2,321,881 2,772,126 2,616,630 155,496 428,537 623,460 582,652 40,808 1,631,879 1,672,063 1,465,193 206,870 4,382,297 5,067,649 4,664,475 403,174 6,060 (6,060) 25,191,722 26,920,820 26,017,018 903,802 The accompanying Notes to Financial Statements are an integral part of this statement. 36 CITY OF CLERMONT, FLORIDA GENERAL FUND STATEMENT OF REVENUES, EXPENDITURES AND CHANGES IN FUND BALANCE-_ BUDGET ALANCE- BUDGET AND ACTUAL (CONTINUED) Year Ended September 30, 2017 Actual Amounts, Budgetary Budgeted Amounts Basis Original Final Excess (Deficiency) of Revenues Over Expenditures (972,255) (2,298,485) (1,196,643) Other Financing Sources (Uses): Transfers In 1,206,800 1,249,359 1,291,156 Transfers Out (249,545) (889,725) (890,259) Sale of General Capital Assets 15,000 15,000 86,211 Total other financing sources (uses) 972,255 374,634 487,108 Net Change in Fund Balance - (1,923,851) (709,535) Fund Balance - beginning Fund Balance -ending Variance with Final Budget - Positive (Negative) 1,101,842 41,797 (534) 71,211 1,214,316 8,693,470 8,693,470 8,693,470 - $ 8,693,470 $ 6,769,619 $ 7,983,935 $ 1,214,316 The accompanying Notes to Financial Statements are an integral part of this statement. 37 CITY OF CLERMONT, FLORIDA INFRASTRUCTURE SPECIAL REVENUE FUND STATEMENT OF REVENUES, EXPENDITURES AND CHANGES IN FUND BALANCE - BUDGET AND ACTUAL Year Ended September 30, 2017 The accompanying Notes to Financial Statements are an integral part of this statement. 38 Variance with Final Budget - Positive Budgeted Amounts Actual Amounts (Negative) Original Final Revenues: Intergovernmental revenues $ 3,106,000 $ 3,106,000 $ 3,115,549 $ 9,549 Investment earnings 12,564 12,564 5,516 (7,048) Total revenues 3,118,564 3,118,564 3,121,065 2,501 Expenditures: Current: General government 242,000 242,144 54,711 187,433 Public safety: Police 420,670 420,670 394,598 26,072 Fire control 425,000 753,852 753,852 - 845,670 1,174,522 1,148,450 26,072 Physical Environment 157,000 157,000 130,645 26,355 Transportation: Roads & streets 419,000 632,709 473,555 159,154 Culture and recreation: Recreation programs 1,065,665 1,252,530 1,162,036 90,494 Arts and rec center 39,000 39,000 17,533 21,467 1,104,665 1,291,530 1,179,569 111,961 Total expenditures 2,768,335 3,497,905 2,986,930 510,975 Excess (Deficiency) of Revenues Over Expenditures 350,229 (379,341) 134,135 513,476 Other Financing Uses: Transfers out (666,842) (1,444,658) (823,025) 621,633 Total other financing uses (666,842) (1,444,658) (823,025) 621,633 Net Change in Fund Balances (316,613) (1,823,999) (688,890) 1,135,109 Fund Balances - beginning 1,832,126 1,832,126 1,832,126 - Fund Balances - ending $ 1,515,513 $ 8,127 $ 1,143,236 $ 1,135,109 The accompanying Notes to Financial Statements are an integral part of this statement. 38 CITY OF CLERMONT, FLORIDA COMMUNITY REDEVELOPMENT SPECIAL REVENUE FUND STATEMENT OF REVENUES, EXPENDITURES AND CHANGES IN FUND BALANCE - BUDGET AND ACTUAL Revenues: Taxes Investment earnings Total revenues Expenditures: Economic environment: Economic development Total expenditures Excess (Deficiency) of Revenues Over Expenditures Other Financing Uses: Transfers out Total other financing uses Net Change in Fund Balances Fund Balances - beginning Fund Balances - ending Year Ended September 30, 2017 Variance with Final Budget - Positive Budgeted Amounts Actual Amounts (Negative) Original Final $ 222,872 $ 213,717 $ 213,717 $ - 2,929 2,929 2,427 (502) 225,801 216,646 216,144 (502) 256,396 181,441 102,588 78,853 256,396 181,441 102,588 78,853 (30,595) 35,205 113,556 78,351 (126,094) (258,997) (154,695) 104,302 (126,094) (258,997) (154,695) 104,302 (156,689) (223,792) (41,139) 182,653 343,524 343,524 343,524 $ 186,835 $ 119,732 $ 302,385 $ 182,653 The accompanying Notes to Financial Statements are an integral part of this statement. 39 Assets: Current assets: Cash and cash equivalents Investments Restricted cash and cash equivalents Accounts receivable, net Due from other governments Inventories Prepaid expenses Total current assets Noncurrent assets: Restricted investments Advances to other funds Interest receivable Capital assets: Land, buildings and equipment Construction in progress Less accumulated depreciation Total capital assets (net of accumulated depreciation) Total noncurrent assets Total assets CITY OF CLERMONT, FLORIDA STATEMENT OF NET POSITION PROPRIETARY FUNDS September 30, 2017 Business -type Activities -Enterprise Funds Water Sewer Sanitation Stormwater Total Governmental Activities - Internal Service Fund $ 1,991,090 $ 4,163,413 $ 814,902 $ 52 $ 6,969,457 $ 7,624 10,344,922 7,797,818 2,528,487 451,918 21,123,145 862,080 831,531 710,246 11,764 38,180 1,591,721 - 426,029 567,031 272,918 87,187 1,353,165 82 204,735 - - 1,400,288 1,605,023 - 365,531 34,099 - 3,435 403,065 - 53,453 44,190 9,766 8,717 116,126 - 14,217,291 13,316,797 3,637,837 1,989,777 33,161,702 869,786 2,919,800 11,658,036 1,491,646 3,188,541 19,258,023 - 668,254 40,139 752,814 14,732 1,475,939 - 27,907 40,931 5,319 951 75,108 1,814 39,217,616 64,654,421 4,177,093 7,503,589 115,552,719 - 2,214,388 563,820 1,494 3,418,580 6,198,282 - (12,739,975) (26,438,206) (2,690,120) (3,184,198) (45,052,499) - 28,692,029 38,780,035 1,488,467 7,737,971 76,698,502 - 32,307,990 50,519,141 3,738,246 10,942,195 97,507,572 1,814 46,525,281 63,835,938 7,376,083 12,931,972 130,669,274 871,600 Deferred Outflows of Resources: Deferred charge on refunding 156,602 289,240 - - 445,842 Total deferred outflows of resources 156,602 289,240 - - 445,842 The accompanying Notes to Financial Statements are an integral part of this statement 40 Liabilities: Current liabilities: Accounts payable Salaries payable Accrued interest payable Due to other funds Compensated absences Customer deposits payable Revenue bonds payable -current Total current liabilities Noncurrent liabilities: Compensated absences Other post employment benefits Notes payable Revenue bonds payable Total noncurrent liabilities Total liabilities Net Position: Net investment in capital assets Restricted for capital improvements Unrestricted Total net position 930,529 245,119 62,121 761,630 1,999,399 221,560 56,103 54,648 50,323 16,410 177,484 - 59,289 105,402 10,582 34,363 209,636 - - - - 618,403 618,403 500,000 17,766 16,268 5,623 1,894 41,551 - 432,018 - - - 432,018 - 248,400 441,600 - - 690,000 - 1,744,105 863,037 128,649 1,432,700 4,168,491 721,560 159,892 146,415 50,604 17,044 373,955 - 572,906 448,688 340,326 133,326 1,495,246 - - - 1,490,300 4,839,141 6,329,441 - 4,216,522 7,496,041 - - 11,712,563 - 4,949,320 8,091,144 1,881,230 4,989,511 19,911,205 - 6,693,425 8,954,181 2,009,879 6,422,211 24,079,696 721,560 24,383,709 31,131,634 1,489,813 6,125,551 3,422,410 13,705,137 - - 12,182,339 10,334,226 3,876,391 384,210 $ 39,988,458 $ 55,170,997 $ 5,366,204 $ 6,509,761 The assets and liabilities of certain internal service funds are not included in the fund financial statement, but are included in the Business Activities of the Statement of Net Position. Total Net Position per Government -Wide Financial Statements 63,130,707 - 17,127,547 - 26,777,166 150,040 107,035,420 $ 150,040 (110,023) $ 106,925,397 The accompanying Notes to Financial Statements are an integral part of this statement 41 ie 42 CITY OF CLERMONT, FLORIDA STATEMENT OF REVENUES, EXPENSES AND CHANGES IN FUND NET POSITION PROPRIETARY FUNDS Year Ended September 30, 2017 Operating Revenues: Charges for services Miscellaneous Total operating revenues Operating Expenses: Personnel services Utilities Dump fees Administrative services Repairs and maintenance Depreciation and amortization Professional services Insurance claims and expenses Other supplies and expenses Total operating expenses Operating income (loss) Nonoperating Revenues (Expenses): Investment income Grant Revenue Interest expense Gain (loss) on disposal of capital assets Total nonoperating revenue (expenses) Income (loss) before contributions and transfers Capital contributions Transfers in Transfers out Change in net position Total Net Position - Beginning Total Net Position - Ending Business -type Activities -Enterprise Fund Governmental Activities. Internal Service Fund $ 6,234,209 $ 6,498,573 $ 3,087,701 $ 1,002,859 $ 16,823,342 $ 4,187,577 281,791 8,442 779 1,412 292,424 67,511 6,516,000 6,507,015 3,088,480 1,004,271 17,115,766 4,255,088 1,624,114 1,539,848 1,181,447 494,944 4,840,353 - 495,651 828,383 1,750 1,123 1,326,907 - - 156,750 468,771 16,560 642,081 - 344,938 362,772 297,336 59,669 1,064,715 - 599,752 340,135 108,017 49,758 1,097,662 - 1,227,052 2,620,663 432,928 421,604 4,702,247 - 160,311 137,453 14,713 8,086 320,563 46,051 116,928 143,247 18,938 23,197 302,310 4,696,777 399,533 411,270 303,366 56,372 1,170,541 - 4,968,279 6,540,521 2,827,266 1,131,313 15,467,379 4,742,828 1,547,721 (33,506) 261,214 (127,042) 1,648,387 (487,740) 90,895 113,084 33,931 17,340 255,250 5,920 (190,555) (339,582) (13,300) (43,060) (586,497) 15,393 7,239 1,779 24,411 - (84,267) (219,259) 22,410 (25,720) (306,836) 5,920 1,463,454 (252,765) 283,624 (152,762) 1,341,551 (481,820) 2,131,029 3,017,003 - 1,758,022 6,906,054 - 4,990 12,048 17,304 34,342 600,001 (629,808) (691,740) (49,633) (30,884) (1,402,065) - 2,969,665 2,084,546 233,991 1,591,680 6,879,882 118,181 37,018,793 53,086,451 5,132,213 4,918,081 31,859 $ 39,988,458 $ 55,170,997 $ 5,366,204 $ 6,509,761 $ 150,040 Change in Net Position, per above 6,879,882 Internal service funds are used by management to charge the costs of certain activities to individual funds. The net revenue (expense) of certain internal service funds is reported with Business Activities. (112,960) Change in Business -Type Activities in Net Position per Government -Wide Financial Statements $ 6,766,922 The accompanying Notes to Financial Statements are an integral part of this statement. 43 Cash Flows from Operating Activities: Receipts from customers Receipts from internal services provided Payments to suppliers Payments to employees Net cash provided (used) by operating activities Cash Flows from Non -Capital Financing Activities: Due from other funds Due to other funds Transfers in Transfers out Net cash provided (used) by non -capital financing activities Cash Flows from Capital and Related Financing Activities: Acquisition of capital assets Sale of capital assets Interest paid on long-term debt Proceeds from note payable Principal paid on debt Capital Grants Fees and assessments received Net cash provided (used) by capital and related financing activities CITY OF CLERMONT, FLORIDA STATEMENT OF CASH FLOWS PROPRIETARY FUNDS Year Ended September 30, 2017 Governmental Activities - Business -Type Activities -Enterprise Funds Internal Service Water Sewer Sanitation Stormwater Total Fund $ 6,521,154 $ 6,472,858 $ 3,073,942 $ 1,000,252 $ 17,068,206 $ - - - - - - 4,255,719 (2,866,738) (2,307,064) (1,294,563) 349,440 (6,118,925) (4,666,787) (1,547,658) (1,452,318) (1,129,690) (499,394) (4,629,060) - (241,200) (428,800) 2,106,758 2,713,476 649,689 850,298 6,320,221 (411,068) (618,403) - 110,000 - (508,403) - - - 618,403 618,403 4,990 12,048 - 17,304 34,342 (629,808) (691,740) (49,633) (30,884) (1,402,065) 600,001 (1,243,221) (679,692) 60,367 604,823 (1,257,723) 600,001 (3,032,280) (1,223,098) (471,250) (3,678,619) (8,405,247) 15,393 7,239 1,779 - 24,411 (182,169) (323,856) (2,718) (8,697) (517,440) - - 1,490,300 4,839,141 6,329,441 (241,200) (428,800) (670,000) 839,433 - - 660,149 1,499,582 1,245,792 2,767,003 - - 4,012,795 (1,355,031) 798,488 1,018,111 1,811,974 2,273,542 The accompanying Notes to Financial Statements are an integral part of these statements. 44 Cash Flows from Investing Activities: Sale (Purchase) of investments Investment income Net cash provided by investing activities Net Increase (Decrease) in Cash and Cash Equivalents Cash and Cash Equivalents - beginning Cash and Cash Equivalents - end Classified As: Cash and cash equivalents Restricted cash and cash equivalents Total Reconciliation of Operating Income (Loss) to Net Cash Provided By Operating Activities Operating income (loss) Adjustments Not Affecting Cash: Depreciation and amortization Change in Assets and Liabilities: Decrease (Increase) in accts receivable Increase in customer deposits Decrease in prepaid costs Decrease (Increase) in inventory Increase (Decrease) in accounts payable Increase in accrued liabilities Total adjustments Net Cash Provided (Used) by Operating Activities Noncash Investing, Capital, and Financing Activities: Increase (Decrease) in Fair Value of Investments Contributed capital assets (3,861,203) (6,956,398) (2,505,059) (3,638,952) (16,961,612) (862,080) 147,786 175,311 24,387 14,882 362,366 5,920 (3,713,417) (6,781,087) (2,480,672) (3,624,070) (16,599,246) (856,160) (4,204,911) (3,948,815) (752,505) (356,975) (9,263,206) (667,227) 7,027,532 8,822,474 1,579,171 395,207 17,824,384 676,665 $ 2,822,621 $ 4,873,659 $ 826,666 $ 38,232 $ 8,561,178 $ 9,438 $ 1,991,090 $ 4,163,413 $ 814,902 $ 52 $ 6,969,457 831,531 710,246 11,764 38,180 1,591,721 $ 2,822,621 $ 4,873,659 $ 826,666 $ 38,232 $ 8,561,178 $ 7,624 $ 7,624 $ 1,547,721 $ (33,506) $ 261,214 $ (127,042) $ 1,648,387 $ (487,740) 1,227,052 2,620,663 432,928 421,604 4,702,247 - 9,586 (34,157) (14,538) (4,019) (43,128) 631 (4,432) - - - (4,432) - (10,268) (6,918) (514) (912) (18,612) - (37,790) (1,941) - (1,439) (41,170) - (701,567) 81,805 (81,158) 566,556 (134,364) 76,041 76,456 87,530 51,757 (4,450) 211,293 - 559,037 2,746,982 388,475 977,340 4,671,834 76,672 $ 2,106,758 $ 2,713,476 $ 649,689 $ 850,298 $ 6,320,221 $ (411,068) $ (68,437) $ (65,445) $ 7,553 $ 1,507 $ (124,822) $ - $ - $ 250,000 $ - $ - $ 250,000 $ - The accompanying Notes to Financial Statements are an integral part of these statements. 45 CITY OF CLERMONT, FLORIDA STATEMENT OF FIDUCIARY NET POSITION FIDUCIARY FUNDS September 30, 2017 Total Employee Pension Funds Assets: Cash and cash equivalents $ 130,694 Investments: U.S. Government & other debt securities 12,677,264 Equities 28,483,729 Total investments 41,160,993 Total assets 41,291,687 Liabilities: Refunds payable and other 12,314 Total liabilities 12,314 Net Position Restricted for Pensions $ 41,279,373 The accompanying Notes to Financial Statements are an integral part of this statement. 46 CITY OF CLERMONT, FLORIDA STATEMENT OF CHANGES IN FIDUCIARY NET POSITION FIDUCIARY FUNDS Year Ended September 30, 2017 Deductions: Benefits/distributions 1,725,711 Administrative 144,506 Total deductions 1,870,217 Change in Net Position 6,032,041 Net Position - beginning 35,247,332 Net Position - ending $ 41,279,373 The accompanying Notes to Financial Statements are an integral part of this statement 47 Total Employee Pension Funds Additions: Contributions: Employer $ 2,320,644 Plan members 355,116 State 457,055 Total contributions 3,132,815 Investment earnings: Net decrease in fair value of investments 4,769,443 Total net investment earnings 4,769,443 Total additions 7,902,258 Deductions: Benefits/distributions 1,725,711 Administrative 144,506 Total deductions 1,870,217 Change in Net Position 6,032,041 Net Position - beginning 35,247,332 Net Position - ending $ 41,279,373 The accompanying Notes to Financial Statements are an integral part of this statement 47 ie 48 NOTES TO FINANCIAL STATEMENTS 49 ie 50 CITY OF CLERMONT, FLORIDA NOTES TO FINANCIAL STATEMENTS September 30, 2017 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. The CRA is governed by a board of seven - the five members of the Clermont City Council and two individuals appointed by the City Council. On December 8, 2015, Ordinance No. 2015-77 passed and modification of the Community Redevelopment Plan was approved. 51 CITY OF CLERMONT, FLORIDA NOTES TO FINANCIAL STATEMENTS (CONTINUED) September 30, 2017 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 position and the statement of activities) 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. 52 CITY OF CLERMONT, FLORIDA NOTES TO FINANCIAL STATEMENTS (CONTINUED) September 30, 2017 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: Manor 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. Capital Projects Fund accounts for financial resources segregated for the acquisition or construction of major capital facilities. Infrastructure Special Revenue Fund accounts 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. 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. Nonmanor Governmental Fund Types Special Revenue Funds account for the proceeds of specific revenue sources that are legally restricted or committed to expenditures for specified purposes other than debt service or capital projects. The Debt Service Fund was established to account for the accumulation of resources and payment of bond principal and interest from governmental resources. Cemetery Perpetual Care accounts for activities of the City relative to cemetery maintenance at specified locations. Fund resources are restricted. Only earnings on invested resources may be used to support these activities. 53 CITY OF CLERMONT, FLORIDA NOTES TO FINANCIAL STATEMENTS (CONTINUED) September 30, 2017 Note 1 - Summary of Significant Accounting Policies (Continued): C. Measurement Focus, Basis of Accounting, and Financial Statement Presentation (Continued): Manor 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. 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. 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. Nonmaior Proprietary Funds 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. 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. 54 CITY OF CLERMONT, FLORIDA NOTES TO FINANCIAL STATEMENTS (CONTINUED) September 30, 2017 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, Deferred Outflows/Inflows and Net Position/Fund Balance: 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 and are categorized within the fair value hierarchy established in accordance with GASB Statement No. 72, Fair Value Measurement and Application. The City's investments consist of investments authorized per their investment policy adopted in accordance with Section 218.415, Florida Statutes. 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 noncurrent portion of interfund loans). All other outstanding balances between funds are reported as "due to/from other funds." 55 CITY OF CLERMONT, FLORIDA NOTES TO FINANCIAL STATEMENTS (CONTINUED) September 30, 2017 Note 1 - Summary of Significant Accounting Policies (Continued): D. Assets, Liabilities, Deferred Outflows/Inflows and Net Position/Fund Balance (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 non -spendable fund balance 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 uncollectibles. 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. These are recorded as expenditures when consumed rather than when purchased. 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 accounts and their use is limited by applicable bond covenants. Assets so designated are identified as restricted assets on the balance sheet. 56 CITY OF CLERMONT, FLORIDA NOTES TO FINANCIAL STATEMENTS (CONTINUED) September 30, 2017 Note 1 - Summary of Significant Accounting Policies (Continued): D. Assets, Liabilities, Deferred Outflows/Inflows and Net Position/Fund Balance (Continued): 5. Capital Assets Capital assets, which include property, plant, equipment, intangible and infrastructure assets (e.g., roads, bridges, sidewalks, and similar items), are reported in the applicable governmental or business -type activities columns in the government -wide financial statements. Capital assets are defined by the 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 acquisition 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. 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 Assets 3-15 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, net pension obligations, and net other postemployment benefit obligations are generally liquidated by the general fund. 57 CITY OF CLERMONT, FLORIDA NOTES TO FINANCIAL STATEMENTS (CONTINUED) September 30, 2017 Note 1 - Summary of Significant Accounting Policies (Continued): D. Assets, Liabilities, Deferred Outflows/Inflows and Net Position/Fund Balance (Continued): 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 position. Bond premiums and discounts 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. In the fund financial statements, governmental fund types recognize bond premiums and discounts 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. 8. Deferred Outflows/Inflows of Resources In addition to assets, the statement of financial position will sometimes report a separate section for deferred outflows of resources. This separate financial statement element, deferred outflows of resources, represents a consumption of net position that applies to a future period(s) and so will not be recognized as an outflow of resources (expense/expenditure) until then. The City has two items that qualify for reporting in this category. The deferred charge on refunding and deferred outflows of pension earnings reported in the government -wide statement of net position and the statement of net position - proprietary funds. A deferred charge on refunding results from the difference in the carrying value of refunded debt and its reacquisition price. This amount is deferred and amortized over the shorter of the life of the refunded or refunding debt. In addition to liabilities, the statement of financial position will sometimes report a separate section for deferred inflows of resources. This separate financial statement element, deferred inflows of resources, represents an acquisition of net position that applies to a future period(s) and so will not be recognized as an inflow of resources (revenue) until that time. The City has only one type of item, which arises only under a modified accrual basis of accounting that qualifies for reporting in this category. Accordingly, the item, unavailable revenue, is reported only in the governmental funds balance sheet. The governmental funds report unavailable revenues from several sources: liens, forfeitures and rental income. These amounts are deferred and recognized as an inflow of sources in the period that the amounts become available. The City also has deferred inflows of pension earnings reported in the government -wide statement of net position. 58 CITY OF CLERMONT, FLORIDA NOTES TO FINANCIAL STATEMENTS (CONTINUED) September 30, 2017 Note 1 - Summary of Significant Accounting Policies (Continued): D. Assets, Liabilities, Deferred Outflows/Inflows and Net Position/Fund Balance (Continued): 9. Net Position Flow Assumptions Sometimes the City will fund outlays for a particular purpose from both restricted (e.g., restricted bond or grant proceeds) and unrestricted resources. In order to calculate the amounts to report as restricted net position and unrestricted net position in the government -wide and proprietary fund financial statements, a flow assumption must be made about the order in which the resources are considered to be applied. It is the City's policy to consider restricted net position to have been depleted before unrestricted net position is applied. 10. Fund Balance Flow Assumptions Sometimes the City will fund outlays for a particular purpose from both restricted and unrestricted resources (the total of committed, assigned, and unassigned fund balance). In order to calculate the amounts to report as restricted, committed, assigned, and unassigned fund balance in the governmental fund financial statements a flow assumption must be made about the order in which the resources are considered to be applied. It is the government's policy to consider restricted fund balance to have been depleted before using any of the components of unrestricted fund balance. Further, when the components of unrestricted fund balance can be used for the same purpose, committed fund balance is depleted first, followed by assigned fund balance. Unassigned fund balance is applied last. 11. Fund Balance Policies Fund balance of governmental funds is reported in various categories based on the nature of any limitations requiring the use of resources for specific purposes. The City itself can establish limitations on the use of resources through either a commitment (committed fund balance) or an assignment (assigned fund balance). The committed fund balance classification includes amounts that can be used only for the specific purposes determined by a formal action of the City's highest level of decision-making authority. The Council is the highest level of decision- making authority for the City that can, by adoption of a resolution prior to the end of the fiscal year, commit fund balance. Once adopted, the limitation imposed by the resolution remains in place until a similar action is taken (the adoption of another resolution) to remove or revise the limitation. Amounts in the assigned fund balance classification are intended to be used by the City for specific purposes but do not meet criteria to be classified as committed. The Council has maintained authority to assign fund balance. 59 CITY OF CLERMONT, FLORIDA NOTES TO FINANCIAL STATEMENTS (CONTINUED) September 30, 2017 Note 1 - Summary of Significant Accounting Policies (Continued): D. Assets, Liabilities, Deferred Outflows/Inflows and Net Position/Fund Balance (Continued): 11. Fund Balance Policies - (Continued) The Council may also assign fund balance as it does when appropriating fund balance to cover a gap between estimated revenue and appropriations in the subsequent year's appropriated budget. Unlike commitments, assignments generally only exist temporarily. In other words, an additional action does not normally have to be taken for the removal of an assignment. Conversely, as discussed above, an additional action is essential to either remove or revise a commitment. 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 position 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 $2,446,702 difference are as follows: Capital Outlay $ 5,673,583 Depreciation Expense (3,226,881) Net adjustment to increase net changes in fund balances - total governmental funds to arrive at changes in net position of governmental activities $ 2,446,702 60 CITY OF CLERMONT, FLORIDA NOTES TO FINANCIAL STATEMENTS (CONTINUED) September 30, 2017 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 "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 position." The details of this $(22,593,151) difference are as follows: Debt Issued or Incurred $ (23,670,559) Principal Repayment 1,077,408 Net adjustment to decrease net changes in fund balances - total governmental funds to arrive at changes in net position of governmental activities $ (22,593,151) 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 $ (182,003) Other Post Employment Benefits (437,749) Accrued Interest Payable (162,579) Net Adjustment to Decrease Net Changes in Fund Balances - total governmental funds to arrive at changes in net position of .governmental activities $ (782,331) 61 CITY OF CLERMONT, FLORIDA NOTES TO FINANCIAL STATEMENTS (CONTINUED) September 30, 2017 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. (8) Appropriations lapse at the close of the fiscal year to the extent they have not been expended. Encumbrance accounting is employed in governmental funds. Encumbrances (e.g., purchase orders and contracts) outstanding at year end are reported as assigned fund balances and do not constitute expenditures or liabilities because the commitments will be re -appropriated and honored during the subsequent year. (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, budgetary comparisons are not presented since they are not required 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. 62 CITY OF CLERMONT, FLORIDA NOTES TO FINANCIAL STATEMENTS (CONTINUED) September 30, 2017 Note 3 - Stewardship, Compliance, and Accountability (Continued): A. 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. B. Expenditures in Excess of Appropriations - Expenditures exceeded appropriations in various departments of the General Fund, Capital Projects Fund, Recreation Impact Fee Special Revenue Fund, Fire Inspection Special Revenue Fund, and Debt Service Fund. Theses excess expenditures were funded by greater than anticipated revenues and available fund balance. Note 4 - Cash and Investments: Deposits At year-end, the carrying amount of the City's deposits was $15,418,759 and the bank balance was $16,066,242. 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. (e) Federal agencies and instrumentalities. 63 CITY OF CLERMONT, FLORIDA NOTES TO FINANCIAL STATEMENTS (CONTINUED) September 30, 2017 Note 4 - Cash and Investments (Continued): Investments (Continued) (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 as provided by the Florida Municipal Pension Fund. Investments made by the City of Clermont at September 30, 2017 are summarized below. Defined benefit pension plan investments, other than $28,483,729 in mutual funds, investing in equity securities, are included below. In accordance with GASB 31, investments are reported at fair value. Weighted Average Investment Type Fair Value Credit Rating Maturity Federal Agency Bond $ 11,213,318 AA+ 1.96 years Federal Agency Colataralized Mortgage Obligation 313,892 AA+ 2.84 years US Treasury Notes 8,590,234 TSY 1.31 years Supra -National Agency Bond/Note 3,341,135 AAA 2.20 years Corporate Note 14,884,097 AAA/AA 1.30 years Asset Backed Security 3,928,623 AAA/NR 3.46 years Commercial Paper 1,882,817 A-1 118 days Municipal Bond 309,628 AA 216 days FEITF 28,332,580 N/A N/A Pension Fixed Income Securities 12,677,264 AAf/S4 6.10 years $ 85,473,588 Credit Risk: The City's investment policy limits credit risk by restricting authorized investments to those described above. 64 CITY OF CLERMONT, FLORIDA NOTES TO FINANCIAL STATEMENTS (CONTINUED) September 30, 2017 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, 2017, 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, 2017, 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. Fair Value The City categorizes its fair value measurements within the fair value hierarchy established by generally accepted accounting principles. The fair value is the price that would be received to sell an asset, or paid to transfer a liability, in an orderly transaction between market participants at the measurement date. The hierarchy is based on the valuation inputs used to measure the fair value of the asset. The City uses a market approach in measuring fair value that uses prices and other relevant information generated by market transactions involving identical or similar assets liabilities, or groups of assets and liabilities. 65 CITY OF CLERMONT, FLORIDA NOTES TO FINANCIAL STATEMENTS (CONTINUED) September 30, 2017 Note 4 - Cash and Investments (Continued): Investments (Continued) Assets or liabilities are classified into one of three levels. Level 1 is the most reliable and is based on quoted price for identical assets, or liabilities, in an active market. Level 2 uses significant other observable inputs when obtaining quoted prices for identical or similar assets, or liabilities, in markets that are not active. Level 3 is the least reliable, and uses significant unobservable inputs that uses the best information available under the circumstances, which includes the City's own data in measuring unobservable inputs. The City has the following recurring fair value measurements as of September 30, 2017 Quoted Prices in Active Markets for Investments Valued by Fair Value Level Identical Assets (Level 1) Federal Agency Bond Federal Agency Colataralized Mortgage Obligation US Treasury Notes Supra -National Agency Bond/Note Corporate Note Asset Backed Security Commercial Paper Municipal Bond Pension Fixed Income Securities Pension Equity Securities $ 11,213,319 $ - 313,892 8,590,234 3,341,135 14, 884, 097 3,928,623 1,882,817 309,628 12,677,264 28,483,729 $ 85,624,738 66 8,590,234 $ 8,590,234 Significant Other Observable Inputs (Level 2) $ 11,213,319 313,892 3,341,135 14,884,097 3,928,623 1,882,817 309,628 12,677,264 28,483,729 $ 77,034,504 CITY OF CLERMONT, FLORIDA NOTES TO FINANCIAL STATEMENTS (CONTINUED) September 30, 2017 Note 5 - Receivables: Receivables as of year end for the City's individual major funds and nonmajor funds, including the applicable allowances for uncollectible accounts, are as follows: $ 4,913,858 $ 231,320 $ 754,630 $ (3,546,271) $ 2,353,537 67 Less Allowance for Uncollectible Accounts Taxes Other Accounts Total General Fund $ 3,365,658 $ 231,320 $ 690,481 $ (3,315,118) $ 972,341 Capital Projects Fund - - 14,224 14,224 Infrastructure Special Revenue Fund 1,457 1,457 Community Redevelopment Fund - 548 548 Water Fund 428,774 35,203 (37,948) 426,029 Sewer Fund 700,241 - (133,210) 567,031 Sanitation Fund 318,900 549 (46,531) 272,918 Stormwater Fund 100,285 366 (13,464) 87,187 Nonmajor Governmental Funds - 11,720 11,720 Internal Service Fund 82 82 $ 4,913,858 $ 231,320 $ 754,630 $ (3,546,271) $ 2,353,537 67 CITY OF CLERMONT, FLORIDA NOTES TO FINANCIAL STATEMENTS (CONTINUED) September 30, 2017 Note 6 - Capital Assets: Capital asset activity for the year ended September 30, 2017 was as follows: Governmental Activities: Capital Assets, not being depreciated: Land Construction in progress Total capital assets, not being depreciated Capital Assets, being depreciated: Buildings Improvements/infrastructure Machinery and equipment Intangibles Total capital assets being depreciated Less Accumulated Depreciation for Beginning Ending Balance Increases Decreases Balance $ 24,528,229 $ 244,882 $ - $ 24,773,111 8,737,497 1,964,429 (9,156,412) 1,545,514 33,265,726 2,209,311 (9,156,412) 26,318,625 - (10,044,287) Improvements/infrastructure (10,801,587) 23,274,062 8,479,869 - 31,753,931 21,249,437 2,120,313 (410,062) 22,959,688 13,212,446 2,126,573 (727,459) 14,611,560 986,151 31,273 - 1,017,424 58,722,096 12,758,028 (1,137,521) 70,342,603 Buildings (8,830,007) (1,214,280) - (10,044,287) Improvements/infrastructure (10,801,587) (670,326) 410,062 (11,061,851) Machinery and equipment (7,989,795) (1,411,238) 727,459 (8,673,574) Intangibles (792,971) (68,381) - (861,352) Total accumulated depreciation (28,414,360) (3,364,225) 1,137,521 (30,641,064) Total capital assets being depreciated, net 30,307,736 9,393,803 - 39,701,539 Governmental activities capital assets, net $ 63,573,462 $ 11,603,114 $ (9,156,412) $ 66,020,164 Increases in accumulated depreciation for governmental activities includes accumulated depreciation on assets transferred from business -type activities, therefore total increases in accumulated depreciation is not the same as depreciation expense. This difference is $137,344. 68 CITY OF CLERMONT, FLORIDA NOTES TO FINANCIAL STATEMENTS (CONTINUED) Note 6 - Capital Assets (Continued): Business -type Activities: Capital Assets, not being depreciated: Land Construction in progress Total capital assets, not being depreciated Capital Assets, being depreciated: Buildings Improvements/infrastructure Machinery and equipment Intangibles Total capital assets being depreciated Less Accumulated Depreciation for: Buildings Improvements/infrastructure Machinery and equipment Intangibles Total accumulated depreciation Total capital assets being depreciated, net Business -type activities capital assets, net September 30, 2017 Beginning n�1�--- Ending Increases Decreases Balance $ 1,074,887 $ 9,150 $ - $ 1,084,037 5,515,128 6,571,360 (5,888,206) 6,198,282 249,220 (4,860,044) (131,408) (18,769) - (150,177) 6,590,015 6,580,510 (5,888,206) 7,282,319 66,155,487 3,260,696 - 69,416,183 $ 35,962 271,975 307,937 98,687,535 6,687,565 - 105,375,100 7,725,981 993,423 (249,220) 8,470,184 305,481 9,980 315,461 106,754,959 7,962,943 (249,220) 114,468,682 (35,962) (11,332) (47,294) (36,053,989) (3,940,995) - (39,994,984) (4,378,113) (731,151) 249,220 (4,860,044) (131,408) (18,769) - (150,177) (40,599,472) (4,702,247) 249,220 (45,052,499) Culture and recreation 66,155,487 3,260,696 - 69,416,183 $ 72,745,502 $ 9,841,206 $ (5,888,206) $ 76,698,502 Depreciation expense was charged to functions/programs as follows: Governmental Activities: General government $ 568,252 Public safety 1,596,760 Physical environment/transportation 278,411 Economic environment 708 Culture and recreation 782,750 Total Depreciation Expense - governmental activities $ 3,226,881 Business -type Activities Water $ 1,227,052 Sewer 2,620,663 Sanitation 432,928 Stormwater 421,604 Total Depreciation Expense - business -type activities $ 4,702,247 69 CITY OF CLERMONT, FLORIDA NOTES TO FINANCIAL STATEMENTS (CONTINUED) September 30, 2017 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 business -type activities. The 2009 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 $16,339,951. For the fiscal year, principal and interest paid on this series was $1,174,123 and total pledged revenue was $5,526,754. The original amount of revenue bonds issued in prior years is described below. Revenue bonds outstanding at year end are as follows: Business -Type Activities Water and Sewer Revenue Refunding Bonds, Series 2009 Balance Interest Rates Original September 30, and Dates Maturity Amount 2017 3.0-4.6% 12/1/2010 to (6/1 & 12/1) 12/1/2030 $ 16,640,000 $ 12,365,000 Annual debt service requirements to maturity for revenue bonds are as follows: Notes Payable Year Ending September 30, 2018 2019 2020 2021 2022 2023-2027 2028-2031 Business - Type Activities Principal Interest $ 690,000 $ 483,723 710,000 460,948 735,000 435,660 760,000 409,498 790,000 381,385 4,430, 000 1,410, 353 4,250,000 393,386 Total $ 12,365,000 $ 3,974,953 The Public Improvement Refunding Revenue Note, Series 2012, are secured by public services taxes, communications service tax and half cent sales tax revenue. Total principal and interest remaining to be paid on this series is $287,700. For the fiscal year, principal and interest paid on this series was $598,035 and total pledged revenue was $6,395,582. 70 CITY OF CLERMONT, FLORIDA NOTES TO FINANCIAL STATEMENTS (CONTINUED) September 30, 2017 Note 7 - Long -Term Debt (Continued): Notes Payable (Continued) The City issued Public Improvement Refunding Revenue Note, Series 2016 in the amount of $5,331,196 with interest of 2.03% to refund the Public Improvement Revenue Note, Series 2013. This note is secured by public services taxes and communications service tax. Total principal and interest remaining to be paid on this series is $5,770,654. For the fiscal year, principal and interest paid on this series was $360,635 and total pledged revenue was $4,450,345. The City issued Infrastructure Sales Surtax Revenue Note, Series 2016 in the amount of $5,300,000 with interest of 2.12% to finance the costs of the acquisition and construction of a new municipal police station. This note is secured by the infrastructure sales surtax. Total principal and interest remaining to be paid on this series is $5,911,884. For the fiscal year, principal and interest paid on this series was $340,630 and total pledged revenue was $3,115,549. The City issued Master Plan Capital Projects Revenue Note, Series 2017 in the amount of $30,000,000 with interest of 2.63% to fund master plan projects, Victory Pointe, Boat Ramp Relocation, Downtown Waterfront District Revitalization, Legacy Loop Trail Spur, Public Wi- Fi Network, Public Works Complex, and City Limits Entryway Signs. This note is secured by a covenant to budget and appropriate. Total principal and interest remaining to be paid on this series is $37,048,334. For the fiscal year, no principal or interest was paid on this series. 71 CITY OF CLERMONT, FLORIDA NOTES TO FINANCIAL STATEMENTS (CONTINUED) September 30, 2017 Note 7 - Long -Term Debt (Continued): Notes Payable (Continued) Revenue notes outstanding at year end are as follows: Governmental Activities Public Improvement Refunding Revenue Note, Series 2012 Public Improvement Refunding Revenue Note, Series 2016 Infrastructure Sales Surtax Revenue Note, Series 2016 Master Plan Capital Projects Revenue Note, Series 2017 Business -Type Activities Interest Rates and Dates Maturity 1.09% 12/1/2013 2,014,398 to (6/1 & 12/1) 12/1/2017 2.03% 12/1/2016 (6/1 & 12/1) to 11,644,868 12/1/2028 2.12% 12/1/2016 (6/1 & 12/1) to 12/1/2030 2.63% 12/1/2018 (6/1 & 12/1) to 12/1/2032 Balance Original September 30, Amount 2017 $ 2,612,000 $ 286,141 $ 5,331,196 5,076,196 $ 5,300,000 5,069,284 $ 23,670,559 23,670,559 34,102,180 Master Plan Capital Projects 2.63% 12/1/2018 Revenue Note, Series 2017 (6/1 & 12/1) to 12/1/2032 $ 6,329,441 $ 6,329,441 Annual debt service requirements to maturity for revenue notes are as follows: Year Ending September 30, 2018 2019 2020 2021 2022 2023-2027 2028-2032 2033 Governmental Activities Principal Interest $ 978,791 $ 803,484 2,014,398 801,514 2,063,756 752,032 2,114,207 701,323 2,164,966 649,369 11,644,868 2,421,545 11,240,173 945,884 1,881,021 24,735 Business -Type Activities Principal Interest $ - $ 158,141 349,596 161,867 358,879 152,550 368,373 142,987 377,868 133,174 2,044,410 509,390 2,327,336 222,342 502,979 6,614 Total $ 34,102,180 $ 7,099,886 $ 6,329,441 $1,487,065 72 CITY OF CLERMONT, FLORIDA NOTES TO FINANCIAL STATEMENTS (CONTINUED) September 30, 2017 Note 7 - Long -Term Debt (Continued): Changes in Long -Term Liabilities Long-term liability activity for the year ended September 30, 2017 was as follows: Governmental Activities Public improvement revenue notes Infrastructure revenue notes Capital Projects revenue notes Other post employment benefits Net pension liability Compensated absences Governmental activity long-term liabilities Business -type Activities Bonds payable - Revenue bonds Premium Total bonds payable Capital Projects revenue notes Other post employment benefits Compensated absences Business -type activity long-term liabilities Beginning Ending Due Within Balance Additions Deductions Balance One Year $ 6,209,029 $ $ (846,692) $ 5,362,337 $ 663,982 5,300,000 (230,716) 5,069,284 314,809 - 23,670,559 23,670,559 - 3,962,945 437,749 4,400,694 - 11,236 11,236 - 1,050,689 287,072 (105,069) 1,232,692 123,269 $ 16,522,663 $ 24,406,616 $ (1,182,477) $ 39,746,802 $ 1,102,060 $ 13,035,000 $ $ (670,000) $ 12,365,000 $ 690,000 40,399 (2,836) 37,563 - 13,075,399 (672,836) 12,402,563 690,000 - 6,329,441 6,329,441 - 1,363,307 131,939 1,495,246 - 378,193 75,133 (37,820) 415,506 41,551 $ 14,816,899 $ 6,536,513 $ (710,656) $ 20,642,756 $ 731,551 Note 8 - Interfund Receivables, Payables and Transfers: Interfund transfers for the year ended September 30, 2017 consisted of the following: Transfers Out: General Fund Capital Projects Fund Water Fund Transfers In Sewer Stormwater Fund Fund Internal Service Fund Nonmajor Govt Total General Fund $ $ - $ $ $ $ 413,521 $ 476,738 $ 890,259 Infrastructure Fund 778 822,247 823,025 Community Redevelopment 153,294 1,401 154,695 Water Fund 594,091 6,260 8,652 20,805 629,808 Sewer Fund 645,475 4,990 - 8,652 32,623 691,740 Sanitation Fund - - 4,368 - 45,265 49,633 Stormwater Fund 1,420 29,464 30,884 Nonmajor Governmental 51,590 23,627,618 - - - 56,922 352,901 24,089,031 $1,291,156 $ 23,781,690 $4,990 $12,048 $ 17,304 $ 600,001 $1,651,886 $27,359,075 73 CITY OF CLERMONT, FLORIDA NOTES TO FINANCIAL STATEMENTS (CONTINUED) September 30, 2017 Note 8 - Interfund Receivables, Payables and Transfers (Continued): The most significant transfer involved the transfer of the 2017 Master Plan Capital Projects Revenue Note proceeds from the Debt Service Fund to the Capital Projects Fund to fund the Master Plan Projects. The majority of the other transfers were to fund other capital projects and debt service payments. Transfers from the Water Fund and Sewer Fund to the General Fund were based on a percentage of water and sewer sales. The transfers from various funds to the Internal Service Fund were lump sum transfers of city contributions to the Group Medical Self Insurance Fund. The composition of interfund advances as of September 30, 2017 is as follows: Receivable Fund Payable Fund Amount General Fund Internal Service Fund $ 355,522 Community Redevelopment Internal Service Fund 1,676 Other Governmental Internal Service Fund 12,393 Water Fund Internal Service Fund 49,851 Sewer Fund Internal Service Fund 40,139 Sanitation Fund Internal Service Fund 25,687 Stormwater Fund Internal Service Fund 14,732 Water Fund Stormwater Fund 618,403 Sanitation Fund General Fund 727,127 $ 1,845,530 The balance due to the Sanitation fund from the General Fund is a result of an interfund loan for the purchase of a fire truck to be repaid over ten years. 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 and benefits of the defined contribution plan are administered by the Florida League of Cities. With recent adoption by the Florida Legislation of Chapter 2015-39, Laws of Florida, a separate Defined Contribution component of the Police and Fire Retirement Plans was established on October 1, 2015 and will provide special benefits in the form of a supplemental retirement, termination, death and disability benefits to be funded solely and entirely by premium tax monies. The Share Plan benefits are additional to the benefits currently provided by the defined benefit component currently provided. Funds will be allocated to eligible members on each valuation date based on an individual's total years of credited service to the sum of all individuals to whom allocations are being made. 74 CITY OF CLERMONT, FLORIDA NOTES TO FINANCIAL STATEMENTS (CONTINUED) September 30, 2017 Note 9 - Retirement Plans (Continued): 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. A. General Employees Contributions - The City's actuarially determined contribution rate per the October 1, 2016 actuarial valuations is $8,767 for general employees. Administrative costs are deducted from the net position of the plan. Summary of Significant Accounting Policies Plan Description - The general employees defined benefit pension plan is for general employees hired prior to September 30, 1985. Plan Administration - The General Employees' Pension is administered by a Board of Trustees. Plan Membership - At September 30, 2017 plan membership consisted of the following: Inactive Plan Members or Beneficiaries Currently Receiving Benefits 7 Inactive Plan Members Entitled to but Not Yet Receiving Benefits - Active Plan Members - 7 75 CITY OF CLERMONT, FLORIDA NOTES TO FINANCIAL STATEMENTS (CONTINUED) September 30, 2017 Note 9 - Retirement Plans (Continued): A. General Employees (Continued) - Net Pension Liability of the City - The City's net pension liability was measured as of September 30, 2017, and the total pension liability used to calculate the net pension liability was determined by an actuarial valuation as of that date. The components of the net pension liability (asset) of the sponsor on September 30, 2017 were as follows: Total Pension Liability $ 359,861 Plan Fiduciary Net Position (348,625) Sponsor's Net Pension Liability (Asset) $ 11,236 Plan Fiduciary Net Position as a Percentage of Total Pension Liability (Asset) 96.88% Actuarial Assumptions - The total pension liability was determined by an actuarial valuation as of October 1, 2016, updated September 30, 2017 using the following actuarial assumptions: Inflation 2.92% Salary Increases 0.00% Investment Rate of Return 7.00% Mortality rates were based on the sex -distinct rates set forth in the RP -2000 Combined Mortality Table with full generational improvements in mortality using Scale BB. The long-term expected rate of return on pension plan investments was determined using a building-block method in which best -estimate ranges of expected future real rates of return (expected returns, net of pension plan investment expenses and inflation) are developed for each major asset class. These ranges are combined to produce the long term expected rate of return by weighting the expected future real rates of return by the target asset allocation percentage and by adding expected inflation. 76 CITY OF CLERMONT, FLORIDA NOTES TO FINANCIAL STATEMENTS (CONTINUED) September 30, 2017 Note 9 - Retirement Plans (Continued): A. General Employees (Continued) - Best estimates of arithmetic real rates of return for each major asset class included in the pension plan's target asset allocation as of September 30, 2017 are summarized in the following table: Asset Class Core Bonds Multi -sector U.S. Large Cap Equity U.S. Small Cap Equity Non -U.S. Equity Total Target Allocation 16% 24% 39% 11% 10% 100% Long Term Expected Real Rate of Return 0.58% 1.08% 6.08% 6.83% 6.83% Discount rate - The discount rate used to measure the total pension liability was 7%. The projection of cash flows used to determine the discount rate assumed that plan member contributions will be made at the current contribution rate and that sponsor contributions will be made at rates equal to the difference between the actuarially determined contribution rates and the member rate. Based on those assumptions, the pension plan's fiduciary net position was projected to be available to make all projected future benefit payments of current plan members. Therefore, the long-term expected rate of return on pension plan investments was applied to all periods of projected benefit payments to determine the total pension liability. 77 CITY OF CLERMONT, FLORIDA NOTES TO FINANCIAL STATEMENTS (CONTINUED) September 30, 2017 Note 9 - Retirement Plans (Continued): A. General Employees (Continued) - Changes in Net Pension Liability Balance at September 30, 2016 Changes Due to: Service Cost Expected interest growth Unexpected investment income Demographic experience Employer contributions Benefit payments and refunds Administrative expenses Assumption changes Balance at September 30, 2017 Increase (Decrease Total Pension Plan Fiduciary Net Pension Liability Net Position Liability (a) (b) (a) - (b) $ 349,050 $ 358,184 $ (9,134) 22,569 23,214 (645) - 21,255 (21,255) 17,118 - 17,118 - 8,767 (8,767) (57,338) (57,338) - - (5,457) 5,457 28,462 - 28,462 $ 359,861 $ 348,625 $ 11,236 Sensitivity of the Net Pension Liability to changes in the Discount Rate Current 1% Decrease Discount Rate 1% Increase 6.00% 7.00% 8.00% General Pension Plan Net Pension Liability $ 30,518 $ 11,236 $ (6,217) Deferred outflows and inflows of resources For the year ended September 30, 2017 the City will recognize a pension expense of $108,698. On September 30, 2017 the City reported deferred outflows of resources and deferred inflows of resources related to pensions from the following sources: Differences Between Expected and Actual Experience Changes of Assumptions Net Difference Between Projected and actual Earnings on Pension Plan Investments 78 Deferred Deferred Outflows of Inflows of Resources Resources 14,379 20,550 $ 14,379 $ 20,550 CITY OF CLERMONT, FLORIDA NOTES TO FINANCIAL STATEMENTS (CONTINUED) September 30, 2017 Note 9 - Retirement Plans (Continued): A. General Employees (Continued) - Amounts reported as deferred outflows of resources and deferred inflows of resources related to pensions will be recognized in pension expense as follows: Year ended September 30: 2018 2019 2020 2021 2022 Thereafter B. Police Officers' Retirement - The police officers' defined benefi benefit pension plans as defined covers all sworn police officers. immediately upon employment wi years of service. 1,231 2,019 (5,170) (4,251) t pension plan is a local law, single employer, defined under Florida Statutes, Chapters 175 and 185, which Employees are eligible to participate in the plan wit the City, and they are vested in the plan after ten The plan is administered by a board of Trustees. Contributions - The City's actuarially determined contribution rate per the October 1, 2014 actuarial valuation. Employees must contribute 3% of pensionable earnings. Administrative costs are deducted from the net position of the plan. Contributions from the State received under Florida State Statutes 175 and 185 amounted to $278,846 in 2017 and were recorded as revenue and expenditures in the general fund. Benefits Provided - The plan provides retirement, disability, and pre -retirement death benefits. Normal retirement is defined as 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. Early retirement is defined as attainment of age 50 and 10 years of service; however, the early retirement benefit is reduced by 3% for each year before the normal retirement date. Employees are 50% vested after five years of service, increasing at the rate of 10% per year, up to 100% vesting after 10 years of service. Disability benefits are the larger of the basic pension formula or 42% of average earnings for service connected disabilities. For non -service connected disabilities, benefits are the larger of the basic pension formula or 25% of average earnings, and require 10 years of service. Disability pension is offset as necessary to preclude the total of the participant's worker's compensation, disability pension, and other City -financed disability or salary continuation benefit (excluding social security benefits) from exceeding average earnings. Pre -retirement death benefits for vested members are the vested portion of the basic pension formula, reduced for payment prior to normal retirement age (payable for 10 years certain to the beneficiary of a vested participant). For non -vested participants, the benefit is the return of accumulated employee contributions. 79 CITY OF CLERMONT, FLORIDA NOTES TO FINANCIAL STATEMENTS (CONTINUED) September 30, 2017 Note 9 - Retirement Plans (Continued): B. Police Officers' Retirement (Continued) - Plan Membership - At September 30, 2017 plan membership consisted of the following: Inactive Plan Members or Beneficiaries Currently Receiving Benefits 18 Inactive Plan Members Entitled to but Not Yet Receiving Benefits 14 Active Plan Members 65 97 Net Pension Liability of the City - The City's net pension liability was measured as of September 30, 2017, and the total pension liability used to calculate the net pension liability was determined by an actuarial valuation as of that date. The components of the net pension liability (asset) of the sponsor on September 30, 2017 were as follows: Total Pension Liability $ 16,017,302 Plan Fiduciary Net Position (16,190,483) Sponsor's Net Pension Liability (Asset) $ (173,181) Plan Fiduciary Net Position as a Percentage of Total Pension Liability (Asset) 101.08% does not include Share Plan balances or excess chapter 175/185 contributions Actuarial Assumptions - The total pension liability was determined by an actuarial valuation as of October 1, 2016, updated September 30, 2017 using the following actuarial assumptions: Inflation 2.92% Salary Increases 5.50% Investment Rate of Return 7.00% Mortality rates were based on the sex -distinct rates set forth in the RP -2000 Blue Collar Mortality Table, with full generational improvements in mortality using Scale BB. The long-term expected rate of return on pension plan investments was determined using a building-block method in which best -estimate ranges of expected future real rates of return (expected returns, net of pension plan investment expenses and inflation) are developed for each major asset class. These ranges are combined to produce the long term expected rate of return by weighting the expected future real rates of return by the target asset allocation percentage and by adding expected inflation. 80 CITY OF CLERMONT, FLORIDA NOTES TO FINANCIAL STATEMENTS (CONTINUED) September 30, 2017 Note 9 - Retirement Plans (Continued): B. Police Officers' Retirement (Continued) - Best estimates of arithmetic real rates of return for each major asset class included in the pension plan's target asset allocation as of September 30, 2017 are summarized in the following table: Long Term Expected Asset Class Target Allocation Real Rate of Return 16% Core Bonds Multi -sector U.S. Large Cap Equity U.S. Small Cap Equity Non -U.S. Equity Total 24% 39% 11% 10% 100% 0.58% 1.08% 6.08% 6.83% 6.83% Discount rate - The discount rate used to measure the total pension liability was 7%. The projection of cash flows used to determine the discount rate assumed that plan member contributions will be made at the current contribution rate and that sponsor contributions will be made at rates equal to the difference between the actuarially determined contribution rates and the member rate. Based on those assumptions, the pension plan's fiduciary net position was projected to be available to make all projected future benefit payments of current plan members. Therefore, the long-term expected rate of return on pension plan investments was applied to all periods of projected benefit payments to determine the total pension liability. Changes in Net Pension Liability Balance at September 30, 2016 Changes Due to: Service Cost Expected interest growth Unexpected investment income Demographic experience Employer contributions Employee contributions Benefit payments and refunds Administrative expenses Assumption changes Balance at September 30, 2017 Increase (Decrease) Total Pension Plan Fiduciary Net Pension Liability Net Position Liability (a) (b) (a) - (b) $ 14, 313, 579 $ 14, 357, 868 $ (44, 289) 941,659 - 941,659 1,048,938 1,002,450 46,488 - 905,737 (905,737) 30,469 - 30,469 - 756,302 (756,302) - 116,332 (116, 332) (898,561) (898,561) - - (49,645) 49,645 581,218 - 581,218 $ 16, 017, 302 $ 16,190,483 $ (173,181) 81 CITY OF CLERMONT, FLORIDA NOTES TO FINANCIAL STATEMENTS (CONTINUED) September 30, 2017 Note 9 - Retirement Plans (Continued): B. Police Officers' Retirement (Continued) - Sensitivity of the Net Pension Liability to changes in the Discount Rate Police Pension Net Pension Liability Deferred outflows and inflows of resources Current 1 % Decrease Discount Rate 6.00% 7.00% 1% Increase 8.00% $ 2,174,152 $ (173,181) $ (2,089,500) For the year ended September 30, 2017 the City will recognize a pension expense of $1,355,597. On September 30, 2017 the City reported deferred outflows of resources and deferred inflows of resources related to pensions from the following sources: Deferred Deferred Outflows of Inflows of Resources Resources Differences between expected and actual experience $ 26,047 Changes of assumptions 2,902,609 Net difference between projected and actual earnings on pension plan investments 469,073 $ 127,091 145,426 845,523 $ 3,397,729 $ 1,118, 040 Amounts reported as deferred outflows of resources and deferred inflows of resources related to pensions will be recognized in pension expense as follows: Year ended September 30: 2018 2019 2020 2021 2022 Thereafter $ 434,137 434,136 199,600 239,909 421,058 550,849 Deferred Retirement Option Program (DROP) - DROP is available to participants who have attained their normal retirement age and individuals may participate in the DROP for up to 60 months; DROP accounts are credited with interest at the rate of 6.50% per annum. The Police DROP balance as of September 30, 2017 is $3,119. 82 CITY OF CLERMONT, FLORIDA NOTES TO FINANCIAL STATEMENTS (CONTINUED) September 30, 2017 Note 9 - Retirement Plans (Continued): C. Firefighters' Retirement - The firefighters' defined benefit pension plan is a local law, single employer, defined benefit pension plans as defined under Florida Statutes, Chapters 175 and 185, which covers all full time and volunteer firefighters employed by the City. 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 plan is administered by a board of Trustees. Contributions - The City's actuarially determined contribution rate per the October 1, 2016 actuarial valuation. Employees must contribute 4% of pensionable earnings. Administrative costs are deducted from the net position of the plan. Contributions from the State received under Florida State Statutes 175 and 185 amounted to $178,209 in 2017 and were recorded as revenue and expenditures in the general fund. Benefits Provided - The plan provides retirement, disability, and pre -retirement death benefits. Normal retirement is defined as 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. Volunteer firefighters earn a minimum benefit of $5 for each year of service. Early retirement is defined as attainment of age 50 and 10 years of service; however, the early retirement benefit is reduced by 3% for each year before the normal retirement date. Employees are 50% vested after five years of service, increasing at the rate of 10% per year, up to 100% vesting after 10 years of service. Disability benefits are the larger of the basic pension formula or 42% of average earnings for service connected disabilities. For non -service connected disabilities, benefits are the larger of the basic pension formula or 25% of average earnings, and require 10 years of service. Disability pension is offset as necessary to preclude the total of the participant's worker's compensation, disability pension, and other City -financed disability or salary continuation benefit (excluding social security benefits) from exceeding average earnings. Pre -retirement death benefits for vested members are the vested portion of the basic pension formula, reduced for payment prior to normal retirement age (payable for 10 years certain to the beneficiary of a vested participant). For non -vested participants, the benefit is the return of accumulated employee contributions. Plan Membership - At September 30, 2017 plan membership consisted of the following: Inactive Plan Members or Beneficiaries Currently Receiving Benefits 1 Inactive Plan Members Entitled to but Not Yet Receiving Benefits 60 Active Plan Members 57 118 83 CITY OF CLERMONT, FLORIDA NOTES TO FINANCIAL STATEMENTS (CONTINUED) September 30, 2017 Note 9 - Retirement Plans (Continued): C. Firefighters' Retirement (Continued) - Net Pension Liability of the City - The City's net pension liability was measured as of September 30, 2017, and the total pension liability used to calculate the net pension liability was determined by an actuarial valuation as of that date. The components of the net pension liability (asset) of the sponsor on September 30, 2017 were as follows: Total Pension Liability $ 13,283,379 Plan Fiduciary Net Position (13,647,332) Sponsor's Net Pension Liability (Asset) $ (363,953) Plan Fiduciary Net Position as a Percentage of Total Pension Liability (Asset) 102.74% does not include Share Plan balances or excess chapter 175/185 contributions Actuarial Assumptions - The total pension liability was determined by an actuarial valuation as of October 1, 2016, updated September 30, 2017 using the following actuarial assumptions: Inflation Salary Increases Investment Rate of Return 2.92% 5.50% 7.00% Mortality rates were based on the sex -distinct rates set forth in the RP -2000 Combined Mortality Table, with full generational improvements in mortality using Scale BB. The long-term expected rate of return on pension plan investments was determined using a building-block method in which best -estimate ranges of expected future real rates of return (expected returns, net of pension plan investment expenses and inflation) are developed for each major asset class. These ranges are combined to produce the long term expected rate of return by weighting the expected future real rates of return by the target asset allocation percentage and by adding expected inflation. 84 CITY OF CLERMONT, FLORIDA NOTES TO FINANCIAL STATEMENTS (CONTINUED) September 30, 2017 Note 9 - Retirement Plans (Continued): C. Firefighters' Retirement (Continued) - Best estimates of arithmetic real rates of return for each major asset class included in the pension plan's target asset allocation as of September 30, 2017 are summarized in the following table: Long Term Expected Asset Class Target Allocation Real Rate of Return 16% Core bonds Multi -sector U.S. Large Cap Equity U.S. Small Cap Equity Non -U.S. Equity Total 24% 39% 11% 10% 100% 0.58% 1.08% 6.08% 6.83% 6.83% Discount rate - The discount rate used to measure the total pension liability was 7%. The projection of cash flows used to determine the discount rate assumed that plan member contributions will be made at the current contribution rate and that sponsor contributions will be made at rates equal to the difference between the actuarially determined contribution rates and the member rate. Based on those assumptions, the pension plan's fiduciary net position was projected to be available to make all projected future benefit payments of current plan members. Therefore, the long-term expected rate of return on pension plan investments was applied to all periods of projected benefit payments to determine the total pension liability. Changes in Net Pension Liability Balance at September 30, 2016 Changes Due to: Service Cost Expected interest growth Unexpected investment income Demographic experience Employer contributions Employee contributions Benefit payments and refunds Administrative expenses Assumption changes Balance at September 30, 2017 Increase (Decrease) Total Pension Plan Fiduciary Net Pension Liability Net Position Liability (a) (b) (a) - (b) $ 10,212,874 $ 11,065,435 $ (852,561) 1,025,516 - 1,025,516 782,003 808,376 (26,373) - 791,311 (791,311) 633,143 - 633,143 - 797,699 (797,699) - 238,785 (238,785) (4,513) (4,513) - - (49,761) 49,761 634,356 - 634,356 $ 13,283,379 $ 13,647,332 $ (363,953) 85 CITY OF CLERMONT, FLORIDA NOTES TO FINANCIAL STATEMENTS (CONTINUED) September 30, 2017 Note 9 - Retirement Plans (Continued): C. Firefighters' Retirement (Continued) - Sensitivity of the Net Pension Liability to changes in the Discount Rate Current 1% Decrease Discount Rate 6.00% 7.00% 1% Increase 8.00% Fire Pension Net Pension Liability $ 1,613,680 $ (363,953) $ (2,231,105) Deferred outflows and inflows of resources For the year ended September 30, 2017 the City will recognize a pension expense of $1,025,516. On September 30, 2017 the City reported deferred outflows of resources and deferred inflows of resources related to pensions from the following sources: pension plan investments 340,873 735,053 $ 3,405,333 $ 945,461 Amounts reported as deferred outflows of resources and deferred inflows of resources related to pensions will be recognized in pension expense as follows: Year ended September 30: 2018 2019 2020 2021 2022 Thereafter $ 391,841 391,842 221,404 255,405 413,668 785,712 Deferred Retirement Option Program (DROP) - DROP is available to participants who have attained their normal retirement age and individuals may participate in the DROP for up to 60 months; DROP accounts are credited with interest at the rate of 6.50% per annum. The Fire DROP balance as of September 30, 2017 is $0. 86 Deferred Deferred Outflows of Inflows of Resources Resources Differences between expected and actual experience $ 544,468 $ 210,408 Changes of assumptions 2,519,992 - Net difference between projected and actual earnings on pension plan investments 340,873 735,053 $ 3,405,333 $ 945,461 Amounts reported as deferred outflows of resources and deferred inflows of resources related to pensions will be recognized in pension expense as follows: Year ended September 30: 2018 2019 2020 2021 2022 Thereafter $ 391,841 391,842 221,404 255,405 413,668 785,712 Deferred Retirement Option Program (DROP) - DROP is available to participants who have attained their normal retirement age and individuals may participate in the DROP for up to 60 months; DROP accounts are credited with interest at the rate of 6.50% per annum. The Fire DROP balance as of September 30, 2017 is $0. 86 CITY OF CLERMONT, FLORIDA NOTES TO FINANCIAL STATEMENTS (CONTINUED) September 30, 2017 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 2017 was $7,162,789; the City's total payroll for City employees was $16,164,432. 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 2017 was $556,144. Note 10 - Other Post Employment Benefits: In accordance with Florida Statutes Section 112.0801, the City makes continued group health and dental insurance through the city's current provider available to retirees and eligible dependents provided certain service requirements and normal age retirement requirements have been met. This plan is a single employer plan. The City is self insured with respect to these benefits and provides an explicit subsidy for coverage to retirees and their spouses based on the coverage selected. The City has eleven retirees currently receiving benefits. The City has chosen pay-as-you-go funding, but is recording the liability in the government wide financial statements. This plan does not issue stand-alone financial statements. The most recent actuarial report for the City's Retiree Continuation Insurance Plan was prepared as of October 1, 2016. The annual required contribution and Net OPEB Obligation for the fiscal year ended September 30, 2017 is as follows: Annual Required Contribution $ 937,386 Interest on Net OPEB Obligation 213,050 Adjustment to Annual Required Contribution (469,746) Annual OPEB Cost 680,690 Employer Contributions (111,002) Increase in Net OPEB Obligation 569,688 Net OPEB Obligation (beginning of year) 5,326,252 Net OPEB Obligation (end of year) $ 5,895,940 87 CITY OF CLERMONT, FLORIDA NOTES TO FINANCIAL STATEMENTS (CONTINUED) September 30, 2017 Note 10 - Other Post Employment Benefits (Continued): Three Year Trend Information - Fiscal Actuarial Percentage Year Annual of Cost Net OPEB Ending OPEB Cost Contributed Obligation 9/30/2015 $ 740,704 9.0% $ 4,691,725 9/30/2016 709,255 10.5% 5,326,252 9/30/2017 680,690 16.3% 5,895,940 Funded Status and Funding Progress - OPEB The funded status of the plan as of October 1, 2016, the most recent actuarial valuation date, is as follows: Summary of Actuarial Methods & Assumptions: Actuarial valuations of an ongoing plan involve estimates of the value of reported amounts and assumptions about the probability of occurrence of events far into the future. Examples include assumptions about future employment, mortality, and the healthcare cost trend. Amounts determined regarding the funded status of the plan and the annual required contributions of the employer are subject to continual revision as actual results are compared with past expectations and new estimates are made about the future. The schedule of funding progress, presented as required supplementary information 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 actuarial accrued liabilities for benefits. Projections of benefits for financial reporting purposes are based on the substantive plan (the plan as understood by the employer and the plan members) and include the types of benefits provided at the time of each valuation and the historical pattern of sharing of benefit costs between the employer and plan members to that point. The actuarial methods and assumptions used include techniques that are designed to reduce the effects of short-term volatility in actuarial accrued liabilities and the actuarial value of assets, consistent with the long-term perspective of the calculations. 88 Actuarial Accrued URAL as a Actuarial Liability Percentage Value of (AAL) - Entry Unfunded Funded Covered of Covered Assets Age AAL (UAAL) Ratio Payroll Payroll (a) (b) (b - a) (a / b) (c) ((b - a) / c) $ - $ 5,896,032 $ 5,896,032 0.0% $ 14,415,224 40.90% Summary of Actuarial Methods & Assumptions: Actuarial valuations of an ongoing plan involve estimates of the value of reported amounts and assumptions about the probability of occurrence of events far into the future. Examples include assumptions about future employment, mortality, and the healthcare cost trend. Amounts determined regarding the funded status of the plan and the annual required contributions of the employer are subject to continual revision as actual results are compared with past expectations and new estimates are made about the future. The schedule of funding progress, presented as required supplementary information 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 actuarial accrued liabilities for benefits. Projections of benefits for financial reporting purposes are based on the substantive plan (the plan as understood by the employer and the plan members) and include the types of benefits provided at the time of each valuation and the historical pattern of sharing of benefit costs between the employer and plan members to that point. The actuarial methods and assumptions used include techniques that are designed to reduce the effects of short-term volatility in actuarial accrued liabilities and the actuarial value of assets, consistent with the long-term perspective of the calculations. 88 CITY OF CLERMONT, FLORIDA NOTES TO FINANCIAL STATEMENTS (CONTINUE September 30, 2017 Note 10 - Other Post Employment Benefits (Continued): Summary of Actuarial Methods & Assumptions (Continued) Actuarial Cost Method - The projected unit credit cost method. Amortization Method - level dollar open over 15 years. Benefits Not Included - None. Discount Rate - 4.00%. Inflation rate - 3% Health Care Costs Trend Rates -It was assumed that health care costs would increase in accordance with the trend rates in the following table: Medical Year Pre 65 Post 65 Dental 9/30/2017 10.00% 10.00% 10.00% 9/30/2018 9.00% 9.00% 5.00% 9/30/2019 8.00% 8.00% 4.00% 9/30/2020 7.00% 7.00% 3.00% 9/30/2021 6.00% 6.00% 2.00% 9/30/2022 5.00% 5.00% 1.00% Mortality - RP -2000 Combined Healthy Participant Table Projected 10 years using Projection Scale AA. Participation - It was assumed that 40% of future retirees eligible for coverage will elect the benefit. It was assumed that future retirees will elect coverage under the OAP Plan. Marital Status - 60% of future retirees will be married, with male spouses assumed to be three years older than female spouses. For current retirees, male spouses assumed to be three years older than female spouses. 89 CITY OF CLERMONT, FLORIDA NOTES TO FINANCIAL STATEMENTS (CONTINUED) September 30, 2017 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 $150,000 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 $3,800,000. 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. 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 $221,560 represents claims processed through October 2017 which were applicable to the current fiscal year and any additional claims are deemed immaterial. Changes to the current claims liability are as follows: Claims Liabilities, beginning of year Incurred Claims Payments on Claims Claims Liabilities, end of year Note 12 - Commitments and Contingencies: 2017 2016 $ 145,519 $ 90,143 4,696,777 5,288,699 (4,620,736) (5,233,323) $ 221,560 $ 145,519 Litigation - The City is engaged in various liability claims incidental to the conduct of its general government operations at September 30, 2017. 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. 90 CITY OF CLERMONT, FLORIDA NOTES TO FINANCIAL STATEMENTS (CONTINUED) September 30, 2017 Note 13 - Fund Balances: The City classifies the components of fund balance based on the classifications described below: Nonsoendable Nonspendable funds include fund balance amounts that are (a) not in spendable form or (b) legally or contractually required to be maintained intact. Spendable Fund Balance Restricted - includes fund balance amounts that can be spent only for specific purposes stipulated by (a) external resource providers such as creditors (by debt covenants), grantors, contributors, or laws and regulations of other governments; or (b) imposed by law through constitutional provisions or enabling legislation. Committed - includes fund balance amounts that can be used only for the specific purposes determined by formal action of the City Council, the City's highest level of decision making authority, with formal action occurring prior to the fiscal year end. Commitments may be changed or lifted only by the City Council taking the same formal action (Resolution) that imposed the constraint originally. Assigned - includes spendable fund balance amounts that are intended to be used for specific purposes that are neither considered restricted or committed. The City Council is authorized to assign amounts for a specific purpose. Unassigned - includes residual positive fund balance within the General Fund which has not been classified within the other above mentioned categories. Unassigned fund balance may also include negative balances for any governmental fund if expenditures exceed amounts restricted, committed, or assigned for those specific purposes. The City considers restricted amounts to be spent first when both restricted and unrestricted fund balance is available unless there are legal documents/contracts that prohibit doing this, such as in grant agreements requiring dollar for dollar spending. Additionally, the City would first use committed, then assigned, and lastly unassigned amounts of unrestricted fund balance when expenditures are made. 91 CITY OF CLERMONT, FLORIDA NOTES TO FINANCIAL STATEMENTS (CONTINUED) September 30, 2017 Note 13 - Fund Balances (Continued): At September 30, 2017, the City's governmental fund balances were as follows: 92 Community Infrastructure Redevelopment Other General Capital Special Revenue Special Revenue Governmental Fund Projects Fund Fund Funds Total Fund Balances Nonspendable Inventory/prepaids $ 222,579 $ 15,000 $ 439,096 $ 496 $ 2,579 $ 679,750 Advances 355,522 - - 355,522 Cemetery 1,225,279 1,225,279 Spendable Restricted for: Police 265,539 511,430 776,969 Fire - 629,360 629,360 Building Services 612,069 612,069 Culture and recreation - 2,049,160 2,049,160 Community redevelopment - 301,889 - 301,889 Infrastructure 704,140 - - 704,140 Debt service - - 1,077,224 1,077,224 Assigned for: Capital projects - 22,621,229 - 22,621,229 Police donations 3,139 - 3,139 Unassigned 7,137,156 _ _ _ - 7,137,156 $ 7,983,935 $ 22,636,229 $ 1,143,236 $ 302,385 $ 6,107,101 $ 38,172,886 92 REQUIRED SUPPLEMENTAL INFORMATION 93 ie 94 CITY OF CLERMONT, FLORIDA REQUIRED SUPPLEMENTARY INFORMATION September 30, 2016 Schedule of Funding Progress - Retiree Continuation Insurance Plan Schedule of Funding Progress Initial valuation date Schedule of Employer Contributions - Retiree Continuation Insurance Plan Annual Required Fiscal Year Endina Contribution (ARC 9/30/2012 $ 691,000 9/30/2013 1,112, 968 9/30/2014 UAAL as a 9/30/2015 Actuarial Accrued 9/30/2016 927,336 9/30/2017 % of Actuarial Actuarial Value Liability (AAL) Unfunded AAL Funded 11.8% Covered Valuation of Assets Entry Age (URAL) Ratio Covered Payroll Payroll Date (a) (b) (b -a) (a/b) ( c) (b -a) / c 5/1/2009 * $ - $ 2,413,000 $ 2,413,000 0.0% $ 10,764,000 22.4% 4/1/2011 - 2,909,000 2,909,000 0.0% 10,342,000 28.1% 4/1/2013 - 5,563,664 5,563,664 0.0% 10,854,391 51.0% 4/1/2015 - 4,835,731 4,835,731 0.0% 14,667,088 33.0% 10/1/2016 - 5,896,032 5,896,032 0.0% 14,415,224 40.9% Initial valuation date Schedule of Employer Contributions - Retiree Continuation Insurance Plan Annual Required Fiscal Year Endina Contribution (ARC 9/30/2012 $ 691,000 9/30/2013 1,112, 968 9/30/2014 1,112, 968 9/30/2015 927,336 9/30/2016 927,336 9/30/2017 937,386 95 Percentage of ARC Net OPEB Contributed Obligation 7.0% $ 2,215,000 10.0% 3,120,055 6.5% 4,015,158 6.9% 4,691,725 8.1% 5,326,252 11.8% 5,895,940 CITY OF CLERMONT, FLORIDA REQUIRED SUPPLEMENTARY INFORMATION SCHEDULE OF CHANGES IN NET PENSION LIABILITY AND RELATED RATIOS GENERAL EMPLOYEES Last 10 Fiscal Years* Total Pension Liability Service Cost Interest Changes in Excess State Money Differences Between Expected and Actual Experience Changes of Assumptions Benefit Payments, including refunds of employee contributions Net Change in Total Pension Liability Total Pension Liability -beginning Total Pension Liability -ending (a) Plan Fiduciary Net Position Contributions -employer Contributions -state Contributions -employee Net Investment Income Benefit Payments, including refunds of employee contributions Administrative Expense Other Net Change in Plan Fiduciary Net Position Plan Fiduciary Net Position - beginning Plan Fiduciary Net Position - ending (b) Net Pension Liability - ending (a)- (b) Plan Fiduciary Net Position as a Percentage of Total Pension Liability Covered -employee Payroll Net Pension Liability as a Percentage of Covered Employee Payroll * only four years of data available 9/30/2017 9/30/2016 9/30/2015 9/30/2014 96 22,569 22,224 29,060 28,229 17,118 12,118 40,676 28,462 31,161 (10,549) (57,338) (61,435) (63,484) (56,412) 10,811 4,068 (4,297) (28,183) 349,050 344,982 349,279 377,462 $ 359,861 $ 349,050 $ 344,982 $ 349,279 8,767 - - - 44,469 29,829 2,613 40,560 (57,338) (61,435) (63,484) (66,212) (5,457) (1,757) (6,508) (3,136) (67,379) (28,788) (9,559) (33,363) 358,184 391,547 458,926 487,714 $ 348,625 $ 358,184 $ 391,547 $ 458,926 $ 11,236 $ (9,134) $ (46,565) $ (109,647) 96.88% 102.62% 113.50% 131.39% N/A N/A N/A N/A 96 CITY OF CLERMONT, FLORIDA REQUIRED SUPPLEMENTARY INFORMATION SCHEDULE OF CHANGES IN NET PENSION LIABILITY AND RELATED RATIOS POLICE Last 10 Fiscal Years* Total Pension Liability Service Cost Interest Changes in Excess State Money Differences Between Expected and Actual Experience Changes of Assumptions Benefit Payments, including refunds of employee contributions Net Change in Total Pension Liability Total Pension Liability -beginning Total Pension Liability -ending (a) Plan Fiduciary Net Position Contributions -employer Contributions -state Contributions -employee Net Investment Income Benefit Payments, including refunds of employee contributions Administrative Expense Other Net Change in Plan Fiduciary Net Position Plan Fiduciary Net Position - beginning Plan Fiduciary Net Position - ending (b) Net Pension Liability - ending (a) - (b) Plan Fiduciary Net Position as a Percentage of Total Pension Liability Covered -employee Payroll Net Pension Liability as a Percentage of Covered Employee Payroll only four years of data available $ 941,659 $ 836,661 $ 560,680 $ 524,531 1,048,938 749,652 860,884 723,246 30,469 (211,987) (162,697) 581,218 3,155,202 (898,561) (342,697) (298,559) (532,943) 1,703,723 4,186,831 960,308 714,834 14,313,579 10,126,748 9,166,440 8,451,606 $ 16, 017, 302 $ 14, 313, 579 $ 10,126, 748 $ 9,166,440 756,302 632,411 281,722 411,953 - - 240,486 217,653 116,332 108,806 99,188 95,733 1,908,187 1,115,432 (14,779) 1,043,670 (898,561) (342,697) (298,559) (334,599) (49,645) (30,651) (54,494) (31,851) 14, 357, 868 12, 874, 567 12, 621, 003 11, 218, 444 $ 16,190, 483 $ 14, 357, 868 $ 12, 874, 567 $ 12, 621, 003 $ (173,181) $ (44,289) $ (2,747,819) $ (3,454,563) 101.08% 100.31% 127.13% 137.69% $ 3,366,613 $ 3,366,613 $ 3,108,552 $ 2,424,191 -5.14% 97 -1.32% -88.40% -142.50% CITY OF CLERMONT, FLORIDA REQUIRED SUPPLEMENTARY INFORMATION SCHEDULE OF CHANGES IN NET PENSION LIABILITY AND RELATED RATIOS FIRE Last 10 Fiscal Years* Total Pension Liability Service Cost Interest Changes in Excess State Money Differences Between Expected and Actual Experience Changes of Assumptions Benefit Payments, including refunds of employee contributions Net Change in Total Pension Liability Total Pension Liability -beginning Total Pension Liability -ending (a) Plan Fiduciary Net Position Contributions -employer Contributions -state Contributions -employee Net Investment Income Benefit Payments, including refunds of employee contributions Administrative Expense Other Net Change in Plan Fiduciary Net Position Plan Fiduciary Net Position - beginning Plan Fiduciary Net Position - ending (b) Net Pension Liability - ending (a) - (b) Plan Fiduciary Net Position as a Percentage of Total Pension Liability Covered -employee Payroll Net Pension Liability as a Percentage of Covered Employee Payroll * only four years of data available $ 1,025,516 $ 784,710 $ 524,325 $ 596,543 782,004 515,458 553,753 530,089 633,143 (208,729) (67,286) - 634,356 2,505,255 - - (4,513) (1,324) (945) (81,466) 3,070,506 3,595,370 1,009,847 1,045,166 10,212,873 6,617,503 5,607,656 4,562,490 $ 13,283,379 $ 10,212,873 $ 6,617,503 $ 5,607,656 797,699 491,818 646,065 438,902 - - 181,292 175,931 238,785 279,064 141,632 86,520 1,599,687 858,136 (32,699) 704,467 (4,513) (1,324) (945) (756) (49,761) (28,346) (40,885) (24,109) 11,065,435 9,466,087 8,571,627 7,190,672 $ 13,647,332 $ 11,065,435 $ 9,466,087 $ 8,571,627 $ (363,953) $ (852,562) $ (2,848,584) $ (2,963,971) 102.74% 108.35% 143.05% 152.86% $ 3,602,745 $ 2,798,049 $ 2,798,049 $ 2,798,049 -10.10% 98 -30.47% -101.81% -105.93% CITY OF CLERMONT, FLORIDA REQUIRED SUPPLEMENTARY INFORMATION SCHEDULE OF CONTRIBUTIONS AND INVESTMENT RETURNS GENERAL EMPLOYEES Last 10 Fiscal Years* 9/30/2017 9/30/2016 9/30/2015 9/30/2014 Actuarially Determined Contribution $ 8,767 $ - $ - $ Contributions in Relation to the Actuarially Determined Contribution 8,767 - - Contribution Deficiency (Excess) $ - $ Covered Employee Payroll - - - Contributions as a Percentage of Covered employee Payroll N/A N/A N/A N/A Notes to Schedule Valuation Date 10/1/2016 Actuarially determined contribution rates are calculated as of October 1, two years prior to the end of the fiscal year in which contributions are reported. Methods and assumptions used to determine contribution rates: Actuarial Cost Method Aggregate Amortization Method Level Percentage of Pay, open Remaining Amortization Period 30 years Asset Valuation Method Market Value Inflation 2.92% Salary Increases N/A Interest Rate 7% per year, compounded annually, net of investment expenses Schedule of Investment Returns 9/30/2017 9/30/2016 9/30/2015 9/30/2014 Annual money -weighted rate of return, net of investment expenses 4.08% 4.08% 5.48% 8.55% only four years of data available 99 CITY OF CLERMONT, FLORIDA REQUIRED SUPPLEMENTARY INFORMATION SCHEDULE OF CONTRIBUTIONS AND INVESTMENT RETURNS POLICE Last 10 Fiscal Years* Schedule of Investment Returns Annual money -weighted rate of return, net of investment expenses only four years of data available 913012017 4.08% 913012016 100 4.08% 913012015 5.48% 913012014 8.55% 9/30/2017 9/3012016 9/30/2015 9/3012014 Actuarially Determined Contribution $ 875,593 $ 640,139 $ 583,559 $ 629,606 Contributions in Relation to the Actuarially Determined Contribution 756,302 632,411 522,208 670,126 Contribution Deficiency (Excess) $ 119,291 $ 7,728 $ 61,351 $ (40,520) Covered Employee Payroll 3,366,613 3,366,613 3,108,552 3,108,552 Contributions as a Percentage of Covered Employee Payroll 22.46% 18.78% 16.80% 21.56% Notes to Schedule Valuation Date 10/1/2016 Actuarially determined contribution rates are calculated as of October 1, two years prior to the end of the fiscal year in which contributions are reported. Methods and assumptions used to determine contribution rates: Actuarial Cost Method Aggregate Amortization Method Level Percentage of Pay, open Remaining Amortization Period 30 Years Asset Valuation Method Market Value Salary Increases 5.50% per annum Interest Rate 7% per annum (2.92% per annum is attributable to long-term inflation); this rate was used to discount all future benefit payments Retirement 20% of eligible participants are assumed to retire at each of ages 52 through 54 and 100% of eligible participants are assumed to retire at normal retirement age Other Decrements Assumed employment termination is based on age and ranges from 5.00% at age 20 to 0.00% at age 50 Assumed disability is based on age and ranges from 0.03% at age 20 to 0.18% at age 50; 75% of disabilities are assumed to be service -connected Mortality Sex -distinct rates set forth in the RP -2000 Blue Collar Mortality Table, with full generational improvements in mortality using Scale BB Non -investment Expenses Liabilities have been loaded by 1.50% to account for non -investment expenses Future Contributions Contributions from the employer and employees are assumed to be made as legally required. Schedule of Investment Returns Annual money -weighted rate of return, net of investment expenses only four years of data available 913012017 4.08% 913012016 100 4.08% 913012015 5.48% 913012014 8.55% CITY OF CLERMONT, FLORIDA REQUIRED SUPPLEMENTARY INFORMATION SCHEDULE OF CONTRIBUTIONS AND INVESTMENT RETURNS FIRE Last 10 Fiscal Years* * only four years of data available 101 9/30/2017 9/30/2016 9/30/2015 9/30/2014 Actuarially Determined Contribution $ 1,113,095 $ 647,476 $ 603,000 $ 614,833 Contributions in Relation to the Actuarially Determined Contribution 797,699 491,818 827,357 668,800 Contribution Deficiency (Excess) $ 315,396 $ 155,658 $ (224,357) $ (53,967) Covered Employee Payroll 3,602,745 2,798,049 2,798,049 2,798,049 Contributions as a Percentage of Covered Employee Payroll 22.14% 17.58% 29.57% 23.90% Notes to Schedule Valuation Date 10/1/2016 Actuarially determined contribution rates are calculated as of October 1, two years prior to the end of the fiscal year in which contributions are reported Methods and assumptions used to determine contribution rates: Actuarial Cost Method Aggregate Amortization Method Level Percentage of Pay, Open Remaining Amortization Period 30 Years Asset Valuation Method Market Value Salary Increases 5.50% per annum Interest Rate 7% per annum (2.92% per annum is attributable to long-term inflation); this rate was used to discount all future benefit payments Retirement 20% of eligible participants are assumed to retire at each of ages 52 through 54 and 100% of eligible participants are assumed to retire at normal retirement age Other Decrements Assumed employment termination is based on age and ranges from 4.30% at age 20 to 0.00% at age 50 Assumed disability is based on age and ranges from 0.03% at age 20 to 0.18% at age 50; 75% of disabilities are assumed to be service -connected Mortality Sex -distinct rates set forth in the RP -2000 Blue Collar Mortality Table, with full generational improvements in mortality using Scale BB Non -investment Expenses Liabilities have been loaded by 1.75% to account for non -investment expenses Future Contributions Contributions from the employer and employees are assumed to be made as legally required. Schedule of Investment Returns 9/30/2017 9/3012016 9/3012015 9/30/2014 Annual money -weighted rate of return, net of investment expenses 4.08% 4.08% 5.48% 8.55% * only four years of data available 101 ie 102 COMBINING AND INDIVIDUAL FUND STATEMENTS AND SCHEDULES 103 ie 104 Major Governmental Funds CAPITAL PROJECTS FUNDS Capital projects funds are used to account for financial resources that are restricted, committed, or assigned to expenditures for capital outlays, including the acquisition or construction of capital facilities and other capital assets. Capital Projects Fund — to account for the acquisition of capital assets or construction of major capital projects not being financed by proprietary funds. 105 CITY OF CLERMONT, FLORIDA CAPITAL PROJECTS FUND SCHEDULE OF REVENUES, EXPENDITURES AND CHANGES IN FUND BALANCE - BUDGET AND ACTUAL Year Ended September 30, 2017 Revenues: Investment earnings Total revenues Expenditures: Current: General government Public safety: Police Fire Control Economic environment Capital Outlay: Public safety: Police Fire Control Physical environment Economic environment Total expenditures Excess (Deficiency) of Revenues Over Expenditures Other Financing Sources: Transfers in Total other financing sources Net Change in Fund Balance Fund Balances - beginning Fund Balances - ending Variance with Final Budget - Positive Budgeted Amounts Actual Amounts (Negative) Original Final $ - $ - $ 67,403 $ 67,403 67,403 67,403 - 460 459 1 - 200,476 325,924 (125,448) - 13,354 - 13,354 - 28,705 - 28,705 - 374,586 16,792 357,794 - 137,502 778 136,724 - 1,425,000 8,767 1,416,233 1,630,194 2,491,229 2,086,024 405,205 1,630,194 4,671,312 2,438,744 2,232,568 (1,630,194) (4,671,312) (2,371,341) 2,299,971 676,094 24,892,933 23,781,690 (1,111,243) 676,094 24,892,933 23,781,690 (1,111,243) (954,100) 20,221,621 21,410,349 1,188,728 1,225,880 1,225,880 1,225,880 - $ 271,780 $ 21,447,501 $ 22,636,229 $ 1,188,728 106 Nonmajor Governmental Funds SPECIAL REVENUE FUNDS Special revenue funds are used to account for specific revenue sources that are restricted, committed, or assigned to expenditures for particular purposes. Recreation Impact Fees Fund — to account for recreation impact fees collected from new developments constructed in the City. Police Impact Fees Fund — to account for police impact fees collected from new developments constructed in the City. Fire Impact Fees Fund — to account for fire impact fees collected from new developments constructed in the City. Building Services Fund — to account for the operations of the City's building permits and inspection services. Fire Inspection Fund — to account for the operations of the City's fire prevention and inspection services. DEBT SERVICE FUNDS Debt service funds are used to account for financial resources that are restricted, committed, or assigned to expenditures for principal and interest. Debt Service Fund — to account for the accumulation of resources and payment of bond principal and interest from governmental resources. PERMANENTFUND The permanent fund is used to report resources that are legally restricted to the extent that only earnings, not principal, may be used for purposes that support the government's programs. Cemetery Perpetual Care Fund — 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. 107 CITY OF CLERMONT, FLORIDA COMBINING BALANCE SHEET OTHER GOVERNMENTAL FUNDS September 30, 2017 108 Special Revenue Recreation Police Impact Fire Impact Building Fire Impact Fees Fees Fees Services Inspection Assets: Cash and cash equivalents $ 272,672 $ 60,185 $ 94,562 $ 67,457 $ 188 Investments 1,772,913 450,337 530,794 565,133 - Other receivables 3,730 947 1,117 1,189 743 Due from other governments - - - - - Advance to other funds - - - 8,661 3,732 Prepaid costs - - - 1,737 842 Total assets $ 2,049,315 $ 511,469 $ 626,473 $ 644,177 $ 5,505 Liabilities and Fund Balances: Liabilities: Accounts payable $ 155 $ 39 $ 47 $ 30,371 $ 1,729 Total liabilities 155 39 47 30,371 1,729 Fund balances: Nonspendable - - - 1,737 842 Restricted 2,049,160 511,430 626,426 612,069 2,934 Total fund balances 2,049,160 511,430 626,426 613,806 3,776 Total liabilities and fund balances $ 2,049,315 $ 511,469 $ 626,473 $ 644,177 $ 5,505 108 109 Permanent Fund - Total Nonmajor Cemetery Governmental Total Debt Service Perpetual Care Funds $ 495,064 $ 224,073 $ 176,599 $ 895,736 3,319,177 851,435 1,047,079 5,217,691 7,726 1,791 2,203 11,720 12,393 - - 12,393 2,579 - - 2,579 $ 3,836,939 $ 1,077,299 $ 1,225,881 $ 6,140,119 $ 32,341 $ 75 $ 602 $ 33,018 32,341 75 602 33,018 2,579 - 1,225,279 1,227,858 3,802,019 1,077,224 - 4,879,243 3,804,598 1,077,224 1,225,279 6,107,101 $ 3,836,939 $ 1,077,299 $ 1,225,881 $ 6,140,119 109 CITY OF CLERMONT, FLORIDA COMBINING STATEMENT OF REVENUES, EXPENDITURES AND CHANGES IN FUND BALANCES OTHER GOVERNMENTAL FUNDS Revenues: Licenses and permits Charges for services Impact fees/special assessments Investment earnings Miscellaneous Total revenues Expenditures: Current: Public safety Public safety Culture and recreation Debt Service: Principal Interest and fiscal charges Total expenditures Excess (Deficiency) of Revenues Over Expenditures Other Financing Uses: Transfers in Transfers out Revenue notes issued Total other financing uses Net Change in Fund Balances Fund Balances - beginning Fund Balances - ending Year Ended September 30, 2017 - 150,391 75,304 1,123,160 346,542 152,439 - - - - 1,408,369 (304,470) 234,840 390,808 261,580 (215,312) 226,660 (36,650) (54,340) (32,782) (24,140) 1,103,899 198,190 Special Revenue 228,798 (12,792) 945,261 313,240 289,958 Recreation Police Impact Fire Impact Building $ 626,426 Impact Fees Fees Fees Services Fire Inspection $ - $ - $ - $ 1,310,436 $ - - - - 71,503 130,416 1,495,242 382,728 463,227 - - 9,450 2,503 2,885 2,611 744 56,116 - - 190 70 1,560,808 385,231 466,112 1,384,740 131,230 - 150,391 75,304 1,123,160 346,542 152,439 - - - - 1,408,369 (304,470) 234,840 390,808 261,580 (215,312) 226,660 (36,650) (54,340) (32,782) (24,140) 1,103,899 198,190 336,468 228,798 (12,792) 945,261 313,240 289,958 385,008 16,568 $ 2,049,160 $ 511,430 $ 626,426 $ 613,806 $ 3,776 110 Total Debt Service Permanent Fund - Cemetery Perpetual Care Total Nonmajor Governmental Funds $ 1,310,436 $ - $ - $ 1,310,436 201,919 - - 201,919 2,341,197 - - 2,341,197 18,193 3,587 7,702 29,482 56,376 - 70,075 126,451 3,928,121 3,587 77,777 4,009,485 - 179 262 441 1,695,397 - - 1,695,397 152,439 - - 152,439 - 1,077,408 - 1,077,408 - 265,834 - 265,834 1,847,836 1,343,421 262 3,191,519 2,080,285 (1,339,834) 77,515 817,966 226,660 1,425,226 - 1,651,886 (452,382) (23,627,618) (9,031) (24,089,031) - 23,670,559 - 23,670,559 (225,722) 1,468,167 (9,031) 1,233,414 1,854,563 128,333 68,484 2,051,380 1,950,035 948,891 1,156,795 4,055,721 $ 3,804,598 $ 1,077,224 $ 1,225,279 $ 6,107,101 CITY OF CLERMONT, FLORIDA RECREATION IMPACT FEE SPECIAL REVENUE FUND SCHEDULE OF REVENUES, EXPENDITURES AND CHANGES IN FUND BALANCE - BUDGET AND ACTUAL Revenues: Impact fees/special assessments Investment earnings Miscellaneous Total revenues Expenditures: Current: Culture and recreation Total expenditures Excess (Deficiency) of Revenues Over Expenditures Other Financing Uses Transfers out Total other financing uses Net Change in Fund Balances Fund Balances - beginning Fund Balances - ending Year Ended September 30, 2017 Variance with Final Budget - Positive Budgeted Amounts Actual Amounts (Negative) Original Final $ 815,000 $ 815,000 $ 1,495,242 $ 680,242 2,958 2,958 9,450 6,492 - - 56,116 56,116 817,958 817,958 1,560,808 742,850 205,688 205,688 152,439 53,249 205,688 205,688 152,439 53,249 612,270 612,270 1,408,369 796,099 (780,115) (303,831) (304,470) (639) (780,115) (303,831) (304,470) (639) (167,845) 308,439 1,103,899 795,460 945,261 945,261 945,261 - $ 777,416 $ 1,253,700 $ 2,049,160 $ 795,460 `sm CITY OF CLERMONT, FLORIDA POLICE IMPACT FEE SPECIAL REVENUE FUND SCHEDULE OF REVENUES, EXPENDITURES AND CHANGES IN FUND BALANCE - BUDGET AND ACTUAL Year Ended September 30, 2017 Revenues: Impact fees/special assessments Investment earnings Total revenues Expenditures: Current: Public Safety: Law enforcement Total expenditures Excess (Deficiency) of Revenues Over Expenditures Other Financing Sources (Uses) Transfers out Total other financing sources (uses) Net Change in Fund Balances Fund Balances - beginning Fund Balances - ending 167,292 167,292 150,391 16,901 167,292 167,292 150,391 16,901 79,787 79,787 234,840 121,251 (36,610) (237,086) (36,650) 200,436 (36,610) (237,086) (36,650) 200,436 43,177 (157,299) 198,190 355,489 313,240 313,240 313,240 - $ 356,417 $ 155,941 $ 511,430 $ 355,489 113 Variance with Final Budget - Positive Budgeted Amounts Actual Amounts (Negative) Original Final $ 238,000 $ 238,000 $ 382,728 $ 144,728 9,079 9,079 2,503 (6,576) 247,079 247,079 385,231 138,152 167,292 167,292 150,391 16,901 167,292 167,292 150,391 16,901 79,787 79,787 234,840 121,251 (36,610) (237,086) (36,650) 200,436 (36,610) (237,086) (36,650) 200,436 43,177 (157,299) 198,190 355,489 313,240 313,240 313,240 - $ 356,417 $ 155,941 $ 511,430 $ 355,489 113 CITY OF CLERMONT, FLORIDA FIRE IMPACT FEE SPECIAL REVENUE FUND SCHEDULE OF REVENUES, EXPENDITURES AND CHANGES IN FUND BALANCE - BUDGET AND ACTUAL Revenues: Impact fees/special assessments Investment earnings Total revenues Expenditures: Current: Public safety: Fire control Total expenditures Excess (Deficiency) of Revenues Over Expenditures Other Financing Uses: Transfers out Total other financing sources Net Change in Fund Balances Fund Balances - beginning Fund Balances - ending Year Ended September 30, 2017 Variance with Final Budget - Positive Budgeted Amounts Actual Amounts (Negative) Original Final $ 288,000 $ 288,000 $ 463,227 $ 175,227 2,958 2,958 2,885 (73) 290,958 290,958 466,112 175,154 190,000 225,000 75,304 149,696 190,000 225,000 75,304 149,696 100,958 65,958 390,808 324,850 (54,433) (54,433) (54,340) (54,433) (54,433) (54,340) 93 93 46,525 11,525 336,468 324,943 289,958 289,958 289,958 - $ 336,483 $ 301,483 $ 626,426 $ 324,943 CITY OF CLERMONT, FLORIDA BUILDING SERVICES SPECIAL REVENUE FUND SCHEDULE OF REVENUES, EXPENDITURES AND CHANGES IN FUND BALANCE - BUDGET AND ACTUAL Year Ended September 30, 2017 Expenditures: Current: Public safety Total expenditures Excess (Deficiency) of Revenues Over Expenditures Other Financing Uses: Transfers out Total other financing sources Net Change in Fund Balances Fund Balances - beginning Fund Balances - ending 1,142,920 1,153,412 1,123,160 30,252 1,142,920 1,153,412 1,123,160 30,252 (10,492) 261,580 272,072 (32,782) (32,782) (32,782) (32,782) (43,274) 228,798 272,072 385,008 385,008 385,008 - $ 385,008 $ 341,734 $ 613,806 $ 272,072 115 Variance with Final Budget - Positive Budgeted Amounts Actual Amounts (Negative) Original Final Revenues: Licenses and permits $ 1,106,000 $ 1,106,000 $ 1,310,436 $ 204,436 Charges for services 36,500 36,500 71,503 35,003 Investment earnings 420 420 2,611 2,191 Miscellaneous - - 190 190 Total revenues 1,142,920 1,142,920 1,384,740 241,820 Expenditures: Current: Public safety Total expenditures Excess (Deficiency) of Revenues Over Expenditures Other Financing Uses: Transfers out Total other financing sources Net Change in Fund Balances Fund Balances - beginning Fund Balances - ending 1,142,920 1,153,412 1,123,160 30,252 1,142,920 1,153,412 1,123,160 30,252 (10,492) 261,580 272,072 (32,782) (32,782) (32,782) (32,782) (43,274) 228,798 272,072 385,008 385,008 385,008 - $ 385,008 $ 341,734 $ 613,806 $ 272,072 115 CITY OF CLERMONT, FLORIDA FIRE INSPECTION SPECIAL REVENUE FUND SCHEDULE OF REVENUES, EXPENDITURES AND CHANGES IN FUND BALANCE - BUDGET AND ACTUAL Year Ended September 30, 2017 Revenues: Charges for services Investment earnings Miscellaneous Total revenues Expenditures: Current: Public safety Total expenditures Excess (Deficiency) of Revenues Over Expenditures Other Financing Sources: Transfers in Transfers out Total other financing sources Net Change in Fund Balances Fund Balances - beginning Fund Balances - ending Variance with Final Budget - Positive Budgeted Amounts Actual Amounts (Negative) Original Final $ 343,600 $ 343,600 $ 130,416 $ (213,184) - - 744 744 70 70 343,600 343,600 131,230 (212,370) 343,600 346,439 346,542 (103) 343,600 346,439 346,542 (103) (2,839) (215,312) (212,473) 226,660 226,660 - (24,140) (24,140) 202,520 202,520 199,681 (12,792) (212,473) 16,568 16,568 16,568 - $ 16,568 $ 216,249 $ 3,776 $ (212,473) 116 CITY OF CLERMONT, FLORIDA DEBT SERVICE FUND SCHEDULE OF REVENUES, EXPENDITURES AND CHANGES IN FUND BALANCE - BUDGET AND ACTUAL Revenues: Investment earnings Total revenues Expenditures: Current: General government Debt Service: Principal Interest and fiscal charges Total expenditures Excess (Deficiency) of Revenues Over Expenditures Other Financing Sources: Transfers in Transfers out Revenue notes issued Total other financing sources Net Change in Fund Balances Fund Balances - beginning Fund Balances - ending Year Ended September 30, 2017 Variance with Final Budget - Positive Budgeted Amounts Actual Amounts (Negative) Original Final $ 5,213 $ 2,000 $ 3,587 $ 1,587 5,213 2,000 3,587 1,587 179 (179) 1,077,408 1,077,408 1,077,408 - 222,444 449,686 265,834 183,852 1,299,852 1,527,094 1,343,421 183,673 (1,294,639) (1,525,094) (1,339,834) 185,260 1,237,545 1,424,276 1,425,226 950 - (23,627,619) (23,627,618) 1 - 23,666,830 23,670,559 3,729 1,237,545 1,463,487 1,468,167 4,680 (57,094) (61,607) 128,333 189,940 948,891 948,891 948,891 - $ 891,797 $ 887,284 $ 1,077,224 $ 189,940 Ifin Fiduciary Funds Agency funds are used to account for short-term custodial collections on resources on behalf of another individual, entity, or government. PENSION TRUST FUNDS General Employees' Pension Trust Fund — 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 — 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 — 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. 118 CITY OF CLERMONT, FLORIDA COMBINING STATEMENT OF FIDUCIARY NET POSITION FIDUCIARY FUNDS September 30, 2017 Assets: Cash and cash equivalents Investments: U.S. Government & other debt securities Equities Total Investments Total assets Liabilities: Refunds payable and other Total liabilities Net Position Restricted for Pensions General Employees $ 348,625 $ 8,618,328 $ 17,712,889 $ 14,599,531 $ 41,279,373 119 Police Officers Firefighters Total Defined Defined Pension Pension Employee Benefit Contribution Trust Trust Pension Funds $ 1,395 $ - $ 70,876 $ 58,423 $ 130,694 135,267 - 6,874,997 5,667,000 12,677,264 211,963 8,618,328 10,773,192 8,880,246 28,483,729 347,230 8,618,328 17,648,189 14,547,246 41,160,993 348,625 8,618,328 17,719,065 14,605,669 41,291,687 - - 6,176 6,138 12,314 - - 6,176 6,138 12,314 $ 348,625 $ 8,618,328 $ 17,712,889 $ 14,599,531 $ 41,279,373 119 CITY OF CLERMONT, FLORIDA COMBINING STATEMENT OF CHANGES IN FIDUCIARY NET POSITION FIDUCIARY FUNDS Year Ended September 30, 2017 General Employees 120 Police Officers Firefighters Total Defined Defined Pension Pension Employee Benefit Contribution Trust Trust Pension Additions: Contributions: Employer $ 8,767 $ 746,994 $ 630,637 $ 934,246 $ 2,320,644 Plan members - - 116,332 238,784 355,116 State - - 278,846 178,209 457,055 Total contributions 8,767 746,994 1,025,815 1,351,239 3,132,815 Investment earnings: Net increase (decrease) in fair value of investments 44,469 1,021,026 2,057,617 1,646,331 4,769,443 Total net investment earnings 44,469 1,021,026 2,057,617 1,646,331 4,769,443 Total additions 53,236 1,768,020 3,083,432 2,997,570 7,902,258 Deductions: Benefits/distributions 57,338 938,391 725,469 4,513 1,725,711 Administrative expenses 5,457 37,196 51,692 50,161 144,506 Total deductions 62,795 975,587 777,161 54,674 1,870,217 Change in Net Position (9,559) 792,433 2,306,271 2,942,896 6,032,041 Net Position Restricted for Pensions Beginning of Year 358,184 7,825,895 15,406,618 11,656,635 35,247,332 End of Year $ 348,625 $ 8,618,328 $ 17,712,889 $ 14,599,531 $ 41,279,373 120 STATISTICAL SECTION `FIAT ie 122 City of Clermont, Florida 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 financial health. Contents Page Financial Trends 124 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 134 These schedules contain information to help the reader assess the government's most significant local revenue source, the property tax. Debt Capacity 139 These schedules present information to help the reader assess the affordability of the government's current level of outstanding debt and the government's ability to issue additional debt in the future. Note: There are no limitations placed upon the amount of debt the City of Clermont may issue either by the City Charter or the City's Code of Ordinances or by Florida Statutes. Note: The City of Clermont has no general obligation bonds outstanding. Demographic and Economic Information 146 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 150 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 are derived from the comprehensive annual reports for the relevant year. 123 City of Clermont, Florida Net Position by Component Last Ten Fiscal Years (accrual basis of accounting) (amounts expressed in thousands) Fiscal Year Business -type activities Net investment in capital assets 2008 2009 2010 2011 Governmental activities 13,899 10,437 17,293 9,241 Net investment in capital assets $ 27,462 $ 33,938 $ 33,817 $ 34,894 Restricted 8,959 6,526 6,693 7,381 Unrestricted 11,946 13,608 13,988 12,465 Total governmental activities net position $ 48,367 $ 54,072 $ 54,498 $ 54,740 Business -type activities Net investment in capital assets 46,569 54,834 55,540 56,430 Restricted 13,899 10,437 17,293 9,241 Unrestricted 18,103 17,801 11,407 19,376 Total business -type activities net position $ 78,571 $ 83,072 $ 84,240 $ 85,047 Primary government Net investment in capital assets 74,031 88,772 89,357 91,324 Restricted 22,858 16,963 23,986 16,622 Unrestricted 30,049 31,409 25,395 31,841 Total primary government net position $ 126,938 $ 137,144 $ 138,738 $ 139,787 `PzI Fiscal Year 2012 2013 2014 2015 2016 2017 $ 36,612 $ 39,950 $ 44,116 $ 47,718 $ 52,064 $ 31,918 8,876 9,490 9,918 9,400 6,402 7,815 9,701 7,723 5,719 11,649 11,182 30,117 $ 55,189 $ 57,163 $ 59,753 $ 68,767 $ 69,648 $ 69,850 57,241 57,863 56,680 56,586 60,150 63,131 9,477 9,536 10,217 12,135 13,959 17,127 20,436 24,191 27,054 26,943 26,050 26,667 $ 87,154 $ 91,590 $ 93,951 $ 95,664 $ 100,159 $ 106,925 93,853 97,813 100,796 104,304 112,214 95,049 18,353 19,026 20,135 21,535 20,361 24,942 30,137 31,914 32,773 38,592 37,232 56,784 $ 142,343 $ 148,753 $ 153,704 $ 164,431 $ 169,807 $ 176,775 125 City of Clermont, Florida Changes in Net Position Last Ten Fiscal Years (accrual basis of accounting) (amounts expressed in thousands) Expenses Governmental Activities: General government Public safety Physical environment Transportation/public works Economic environment Human services Culture and recreation Interest on long-term debt Total governmental activities expenses Business -type Activities: Water Sewer Sanitation Stormwater Total business -type activities expenses Total primary government expenses Program Revenues Governmental Activities: Charges for services: General government Public safety Transportation/public works Culture and recreation Operating grants and contributions Capital grants and contributions Total governmental activities program revenues Business -type Activities: Charges for services: Water Sewer Sanitation Stormwater Operating grants and contributions Capital grants and contributions Total business -type activities program revenues Total primary government program revenues $ 1,582 Fiscal Year $ 1,857 2008 2009 2010 2011 $ 4,204 $ 4,747 $ 4,287 $ 3,643 10,330 10,775 12,459 12,531 514 364 319 279 1,544 1,164 1,768 1,661 48 101 50 102 107 - - - 2,061 2,082 2,055 1,822 459 326 175 156 19,267 19,559 21,113 20,194 855 700 - - 3,737 3,990 4,316 4,461 4,521 4,489 5,927 6,022 2,123 2,086 2,169 2,364 549 534 848 955 10,930 11,099 13,260 13,802 G '2n 1 a7 G '2n r,r,R G '2d '27'2 G qq oar, $ 1,582 $ 1,854 $ 1,857 $ 1,695 975 1,203 665 355 761 99 872 539 1,047 921 1,162 1,237 7,330 3,307 134 129 11,695 7,384 4,690 3,955 5,654 4,909 4,817 5,377 4,422 4,655 4,852 5,065 2,515 2,560 2,613 2,688 766 801 829 855 700 - - - 1,480 2,137 1,544 999 15,537 15,062 14,655 14,984 4' 97 019 4' ii nor, 4Z 1a 1A r, 4z 152 ala 126 Fiscal Year 2012 2013 2014 2015 2016 2017 $ 4,211 $ 3,258 $ 3,407 $ 3,848 $ 4,157 $ 4,240 12,168 12,685 14,117 14,326 17,381 20,297 248 303 350 453 788 805 1,719 1,725 2,202 2,094 2,185 2,009 116 200 363 567 209 1,197 1,045 1,928 3,096 4,018 5,460 4,491 4,052 4,154 4,589 4,823 4,719 5,199 5,752 6,106 6,437 6,571 6,866 6,909 2,567 2,465 2,472 3,133 2,925 2,869 939 897 1,016 1,080 1,142 1,190 13,310 13,622 14,514 15,607 15,652 16,167 $ 32,954 $ 33,808 $ 38,285 $ 41,106 $ 46,187 $ 49,640 $ 1,649 $ 2,117 $ 2,429 $ 2,356 $ 2,914 $ 3,180 450 1,040 1,366 1,684 1,574 1,506 604 1,262 956 1,317 1,552 2,003 1,191 896 939 1,598 1,822 1,456 27 112 1,718 498 163 309 3,921 5,427 7,408 7,453 8,025 8,454 5,099 5,215 5,362 5,726 6,162 6,516 5,154 5,357 5,585 5,809 6,183 6,507 2,721 2,775 2,869 2,917 2,984 3,089 855 862 881 905 955 1,004 - - - 276 24 - 1,752 3,430 2,417 3,219 4,026 6,906 127 City of Clermont, Florida Changes in Net Position Last Ten Fiscal Years (accrual basis of accounting) (amounts expressed in thousands) Net (Expense)/Revenue Governmental activities Business -type activities Total primary government net expense General Revenues and Other Changes in Net Position Governmental Activities: Taxes: Property taxes Business taxes Franchise taxes Utility taxes Intergovernmental -unrestricted Unrestricted investment earnings Gain (loss) on sale of capital assets Miscellaneous Transfers in/out Special item Total governmental activities Business -type Activities: Unrestricted investment earnings Gain (loss) on sale of capital assets Miscellaneous Transfers in/out Total business -type activities Total primary government Change in Net Position Governmental activities Business -type activities Total primary government Fiscal Year 2008 2009 2010 2011 $ (7,572) $ (12,175) $ (16,422) $ (16,240) 4,605 3,964 1,395 1,182 $ (2,967) $ (8,211) $ (15,027) $ (15,058) $ 7,749 $ 7,601 $ 6,844 $ 5,966 1,911 2,151 2,373 2,285 1,992 2,152 2,558 2,568 4,776 4,458 4,503 4,664 703 848 379 148 198 202 146 330 496 469 443 520 17,825 17,881 17,246 16,481 1,853 1,005 360 145 (496) (469) (443) (520) 1,357 536 (83) (375) $ 19,182 $ 18,417 $ 17,163 $ 16,106 $ 10,253 $ 5,706 $ 824 $ 241 5,961 4,500 1,312 807 $ 16,214 $ 10,206 $ 2,136 $ 1,048 *Business taxes previously reported as General Government Charges for Services 128 Fiscal Year 2012 2013 2014 2015 2016 2017 $ (15,721) $ (14,759) $ (16,363) $ (18,045) $ (22,510) $ (25,019) 2,271 4,018 2,600 3,245 4,683 7,855 $ (13,450) $ (10,741) $ (13,763) $ (14,800) $ (17,827) $ (17,164) $ 5,535 $ 5,350 $ 6,533 $ 7,193 $ 8,998 $ 9,748 113 111 126 130 140 133 2,189 2,123 2,379 2,502 2,712 2,619 2,430 2,490 2,887 2,953 3,406 3,328 5,063 5,802 6,110 6,645 6,923 7,257 245 114 104 135 134 197 122 86 143 265 374 420 387 486 453 479 439 557 568 1,367 16,171 16,734 18,952 20,535 23,390 25,221 289 149 198 272 260 255 - 18 2 (1,248) 120 24 (453) (479) (439) (557) (568) (1,367) (164) (312) (239) (1,533) (188) (1,088) $ 16,007 $ 16,422 $ 18,713 $ 19,002 $ 23,202 $ 24,133 $ 450 $ 1,975 $ 2,589 $ 2,490 $ 880 $ 202 2,107 3,706 2,361 1,712 4,495 6,767 $ 2,557 $ 5,681 $ 4,950 $ 4,202 $ 5,375 $ 6,969 129 City of Clermont, Florida Fund Balances of Governmental Funds Last Ten Fiscal Years (modified accrual basis of accounting) (amounts expressed in thousands) Fiscal Year 2008 2009 2010 2011 General Fund Reserved $ 209 $ 214 $ 246 $ - Unreserved 9,572 10,860 11,358 - Nonspendable - - - 335 Restricted - - - 175 Assigned - - - 912 Unassigned - - - 10,048 Total general fund $ 9,781 $ 11,074 $ 11,604 $ 11,470 All other governmental funds Reserved $ 1,912 $ 2,267 $ 2,758 $ - Unreserved, reported in: Special revenue funds 5,314 4,147 4,839 - Capital projects fund 4,496 3,271 2,978 - Nonspendable - - - 848 Restricted - - - 6,359 Assigned - - - 2,854 Unassigned - - - (1) Total all other governmental funds $ 11,722 $ 9,685 $ 10,575 $ 10,060 Note: Information for fiscal years 2007 to 2010 have not been restated for Governmental Accounting Standards Board (GASB) Statement No. 54 classifications. 130 Fiscal Year 2012 2013 2014 2015 2016 2017 131 195 189 53 1,300 548 578 224 257 312 247 259 266 1,039 765 1,202 304 - 3 9,744 8,878 7,669 7,014 7,886 7,137 $ 11,202 $ 10,089 $ 9,236 $ 8,865 $ 8,693 $ 7,984 890 939 1,064 1,466 1,922 1,683 7,763 8,295 8,604 7,659 4,310 5,885 668 - - - 1,226 22,621 131 City of Clermont, Florida Changes in Fund Balances of Governmental Funds Last Ten Fiscal Years (modified accrual basis of accounting) (amounts expressed in thousands) Fiscal Year 2008 2009 2010 2011 2012 Revenues Taxes $ 11,652 $ 11,903 $ 11,775 $ 10,819 $ 8,079 Franchise fees 2,188 Licenses and permits 835 674 678 528 455 Intergovernmental 11,977 8,666 5,733 6,059 6,310 Charges for services 643 1,103 1,036 1,013 1,011 Fines and forfeitures 321 178 189 186 215 Impact fees/special assessments 1,209 903 1,131 582 679 Investment Earnings 687 848 379 148 244 Miscellaneous 1,683 444 522 612 474 Total revenues 29,007 24,719 21,443 19,947 19,655 Expenditures Current: General government 3,640 3,654 4,081 3,272 3,080 Public safety 10,999 10,275 11,212 11,625 11,352 Physical environment 497 490 309 275 247 Transportation 2,976 1,129 1,620 1,472 1,340 Economic environment 48 102 50 102 641 Human services 105 - - - - Culture and recreation 10,024 1,893 1,878 1,792 1,769 Capital outlay 1,909 1,738 643 1,923 2,073 Debt service: Principal 8,176 6,259 493 470 490 Interest 465 375 181 162 143 Total expenditures 38,839 25,915 20,467 21,093 21,135 Excess (deficiency) of revenues over expenditures (9,832) (1,196) 976 (1,146) (1,480) Other financing sources (uses) Transfers in 6,468 6,684 2,088 3,274 1,118 Transfers out (5,971) (6,232) (1,645) (2,776) (644) Refunding and new bonds issued 8,250 - - - - Sale of capital assets - - - - - Total other financing sources (uses) 8,747 452 443 498 474 Net change in fund balances $ (1,085) $ (744) $ 1,419 $ (648) $ (1,006) Debt service as a percentage of noncapital expenditures 34.2% 28.9% Note: Franchise Fees previously reported as Taxes. ""Note: Increase in % due to refunding of 2002 bonds. Without the refunding the % would be 3.4% -Note: Increase in % due to refunding of 2013 bonds. Without the refunding the % would be 4.9% 132 3.6% 3.4% 3.5% Fiscal Year 2013 2014 2015 2016 2017 $ 7,951 $ 9,546 $ 10,275 $ 12,544 $ 13,208 2,123 2,379 2,502 2,712 2,619 884 941 788 1,298 1,594 6,729 8,796 8,772 8,790 9,054 1,085 1,212 1,312 1,652 1,746 172 589 757 703 358 1,909 1,401 1,858 1,702 2,341 108 99 131 131 192 622 915 1,047 1,007 1,122 21,583 25,878 27,442 30,539 32,234 3,148 3,776 3,600 4,070 3,911 12,579 13,571 14,844 17,520 18,488 307 423 744 777 869 1,263 1,635 1,635 1,878 1,687 722 365 564 482 324 2,014 2,948 3,725 5,038 5,996 2,638 9,381 2,695 8,514 2,112 3,080 571 884 6,280 1,077 (4,290) (6,969) (1,447) (14,362) (2,502) 3,091 9,337 3,857 11,897 26,725 (2,612) (8,788) (3,323) (11,329) (25,957) 2,612 6,000 - 10,631 23,670 - - - 1,321 86 3,091 6,549 534 12,520 24,524 $ (1,199) $ (420) $ (913) $ (1,842) $ 22,022 14.9% "" 3.5% 4.5% 20.2% """ 4.6% 133 City of Clermont, Florida Governmental Activities Tax Revenues by Source Last Ten Fiscal Years (accrual basis of accounting) (amounts expressed in thousands) Fiscal Property Utility Business Franchise Tax Year Tax Tax Tax Fees Total 2008 7,749 1,992 289 1,911 11,652 2009 7,601 2,152 1,100 2,151 11,904 2010 6,844 2,558 296 2,373 11,775 2011 5,966 2,568 1,567 2,285 10,819 2012 5,535 2,430 113 2,189 10,267 2013 5,350 2,490 111 2,123 10,074 2014 6,533 2,887 126 2,379 11,925 2015 7,013 2,953 130 2,502 12,598 2016 8,795 3,406 140 2,712 15,053 2017 9,538 3,328 133 2,619 15,618 Taxes Included in Unrestricted Intergovernmental Revenues Fiscal Sales State Revenue Local Option Year Tax Sharing Gas Tax 2008 1,139 356 300 2009 1,033 302 289 2010 1,053 299 322 2011 1,100 328 306 2012 1,296 383 296 2013 1,419 535 280 2014 1,567 635 290 2015 1,820 749 378 2016 1,848 819 482 2017 1,945 911 520 * Business Tax Receipts previously reported under Licenses 134 Total 1,795 1,624 1,674 1,734 1,975 2,234 2,492 2,947 3,149 3,376 City of Clermont, Florida Assessed Value and Estimated Actual Value of Taxable Property Last Ten Fiscal Years (amounts expressed in thousands) Fiscal Total Estimated Assessed Year Direct Actual Less: Ended Real* Personal Tax Exempt Sep 30 Property Property Property 2008 2,975,139 186,835 676,371 2009 3,022,925 195,808 792,997 2010 2,592,111 211,950 599,821 2011 2,297,568 211,950 599,871 2012 2,171,815 209,726 598,187 2013 2,124,017 206,870 605,114 2014 2,185,702 205,140 611,063 2015 2,336,882 207,024 630,762 2016 2,574,360 215,752 652,769 2017 2,791,963 215,772 689,683 Source: Lake County Property Appraisers Office * Information on breakdown of residential and commercial property is not available. 135 Total Estimated Assessed Total Taxable Direct Actual Value as a Assessed Tax Taxable Percentage of Value Rate Value Actual Value 2,485,603 3.142 3,161,974 78.61% 2,425,736 3.142 3,218,733 75.36% 2,204,240 3.142 2,804,061 78.61% 1,909,647 3.142 2,509,518 76.10% 1,783,354 3.142 2,381,541 74.88% 1,725,773 3.142 2,330,887 74.04% 1,779,779 3.142 2,390,842 74.44% 1,913,144 3.729 2,543,906 75.20% 2,137,343 4.206 2,790,112 76.60% 2,318,052 4.206 3,007,735 77.07% Source: Lake County Property Appraisers Office * Information on breakdown of residential and commercial property is not available. 135 City of Clermont, Florida Property Tax Rates Direct and Overlapping' Governments Last Ten Fiscal YearS2 (per $1,000 of assessed value) Source: Lake County Property Appraisers Office 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. 136 Direct Rate Overlapping Rates City of Lake South Lake St. Johns Total Clermont Lake County County Lake County River Water Direct & Fiscal Operating Operating Voted Ambulance School Hospital Water Management Overlapping Year Millage Millage Debt Service MSTU District District Authority District Rates 2008 3.1420 4.7410 0.2000 0.4651 7.6980 0.8666 0.2130 0.4158 17.7415 2009 3.1420 4.6511 0.1101 0.4651 7.5170 0.8666 0.2130 0.4158 17.3807 2010 3.1420 4.6511 0.1101 0.4651 7.5320 0.8666 0.2130 0.4158 17.3957 2011 3.1420 4.7309 0.1101 0.3853 7.5230 0.8666 0.2405 0.4158 17.4142 2012 3.1420 4.7309 0.1101 0.3853 7.3940 0.8000 0.2405 0.3313 17.1341 2013 3.1420 4.7309 0.1900 0.3853 7.3200 0.8000 0.2554 0.3313 17.1549 2014 3.7290 4.7309 0.1900 0.3853 7.1700 0.7900 0.2554 0.3283 17.5789 2015 3.7290 5.3856 0.1600 0.4629 7.2460 0.7633 0.2554 0.3164 18.3186 2016 4.2061 5.3051 0.1600 0.4629 7.1970 0.7633 0.2554 0.3023 18.6521 2017 4.2061 5.1180 0.1524 0.4629 6.8750 0.7332 0.2554 0.2885 18.0915 Source: Lake County Property Appraisers Office 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. 136 Taxpayer Vista at Lost Lake TIC I LLC South Lake Hospital, Inc. John P. Adams & Ann D. Adams Family LP Centennial Citrus Tower LLC US 27 -Clermont LLC Westdale Sundance LTD IP9 MF Clermont LLC Weingarten 1-4 Clermont Landing Plaza Collina (Orlando) ASLI VI LLLP Taylor Morrison of Florida Inc Fountains at Clermont LLC Lennar Homes Inc. Citrus Tower Development Sundance Clermont LLC Village at East Lake Lowe's Wal-Mart Stores Lost Lake Reserve LC TOTAL Source: Lake County Property Appraiser City of Clermont, Florida Principal Property Taxpayers Current Year and Nine Years Ago (amounts expressed in thousands) 2017 Taxable Percentage of Assessed Total Taxable Value Rank 59,386 1 33,875 2 33,081 3 27,903 4 25,983 5 21,570 6 19,340 7 18,087 8 14,179 9 12,888 10 $266,292 137 Percentage of Total Taxable Assessed Value 2.56% 1.46% 1.43% 1.20% 1.12% 0.93% 0.83% 0.78% 0.61% 0.56% 11.49% 2008 21,400 Percentage of Taxable Total Taxable Assessed Assessed Value Rank Value 21,059 3 0.85% 34,051 1 1.37% 21,400 2 0.86% 18,206 4 0.73% 17,822 5 0.72% 16,349 6 0.66% 12,780 7 0.51% 12,699 8 0.51% 12,511 9 0.50% 11,616 10 0.47% 7.18% City of Clermont, Florida Property Tax Levies and Collections Last Ten Fiscal Years (amounts expressed in thousands) Fiscal Percentage of Levy Collected within the 95.3% Year Total Tax Fiscal Year of the Levy Collections in Ended Levy for 5,330 Percentage Subsequent September Fiscal Year Amount of Levy Years 2008 7,810 7,425 95.1% 15 2009 7,622 7,243 95.0% 22 2010 6,814 6,536 95.9% 5 2011 6,001 5,698 95.0% 15 2012 5,603 5,325 95.0% 5 2013 5,422 5,153 95.0% 8 2014 6,635 6,325 95.3% 9 2015 7,133 6,793 95.2% 6 2016 8,990 8,570 95.3% 4 2017 9,750 9,299 95.4% 9 Total Collections to Date Amount Percentage of Levy 7,440 95.3% 7,265 95.3% 6,541 96.0% 5,713 95.2% 5,330 95.1% 5,161 95.2% 6,334 95.5% 6,799 95.3% 8,574 95.4% 9,308 95.5% Note: Property taxes become due and payable on November 1 st 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. 138 City of Clermont, Florida Ratios of Outstanding Debt by Type Last Ten Fiscal Years (amounts expressed in thousands, except per capita amount) Fiscal Governmental Activities Year Ended Revenue Notes Sept Bonds Payable 2008 4,935 5,857 2009 4,495 38 2010 4,040 - 2011 3,570 - 2012 3,080 - 2013 - 2,612 2014 - 8,041 2015 - 7,157 2016 - 11,509 2017 - 34,102 Business -Type Activities Total Percentage Revenue Notes Outstanding of Personal Bonds Payable Debt Income' Per Capita' 16,603 - 27,395 3.94% 1,167 16,232 - 20,765 2.89% 858 16,016 - 20,056 2.76% 698 15,512 - 19,082 2.55% 650 14,963 - 18,043 2.30% 605 14,979 - 17,591 2.19% 582 14,361 - 22,402 2.74% 706 13,728 - 20,885 2.45% 646 13,075 - 24,584 2.40% 709 12,403 6,329 52,834 4.87% 1,476 Note: Details regarding the city's outstanding debt can be found in the notes to the financial statements. ' See the Schedule of Demographic and Economic Statistics on page 146 for personal income and population data. 139 City of Clermont, Florida Direct and Overlapping Governmental Activities Debt September 30, 2017 (amounts expressed in thousands, except population and per capita amount) Government Unit: Lake County Lake County School District Subtotal, overlapping debt Estimated Amount Debt Percentage Applicable to Outstanding Applicable (1) City of Clermont $ 100,866 13.47% 226,669 12.03% City of Clermont, direct debt 34,102 100.00% Total direct and overlapping debt Sources: Lake County 2017 CAFR, Lake County School Board 2017 CAFR, and Lake County Property Appraiser's Office (1� The percentage of overlapping debt applicable is estimated using taxable assessed property values. Applicable percentages were estimated by determining the portion of Lake County's taxable assessed value that is within the City of Clermont's boundaries and dividing it by Lake County's total taxable assessed value. Notes: Overlapping governments are those that coincide, at least in part, with geographic boundaries of the city. This schedule estimates the portion of the outstanding debt of those overlapping governments that is borne by the property taxpayers of the City of Clermont. This process recognizes that, when considering the government's ability to issue and repay long-term debt, the entire debt burden borne by the property taxpayers should be taken into account. However, this does not imply that every taxpayer is a resident, and therefore responsible for repaying the debt, of each overlapping government. The City of Clermont has no legal debt margin. 140 $ 13,587 27,268 40,855 34,102 $ 74,957 City of Clermont, Florida Pledged -Revenue Coverage Last Ten Fiscal Years Public Improvement Revenue Refunding Note, Series 2012 Total Revenue Available for Public Communications Debt Service Fiscal Service Service Half -Cent Year Taxes Tax Sales Tax 2008 1,992,018 1,279,653 1,139,315 2009 2,151,318 1,257,344 1,033,141 2010 2,558,281 1,266,696 1,053,073 2011 2,568,141 1,233,789 1,100,125 2012 2,430,440 1,257,217 1,295,687 2013 2,490,461 1,349,929 1,418,710 2014 2,887,161 1,216,076 1,567,249 2015 2,952,785 1,161,566 1,819,909 2016 3,405,642 1,138,032 1,848,294 2017 3,328,087 1,122,258 1,945,237 Total Revenue Available for Debt Service Debt Service Principal Interest Coverage 4,410,986 425,000 209,606 6.95 4,441,803 440,000 195,106 6.99 4,878,050 455,000 179,159 7.69 4,902,055 470,000 161,806 7.76 4,983,344 490,000 143,350 7.87 5,259,100 3,080,000 66,550 1.67 5,670,486 570,599 25,361 9.51 5,934,260 577,959 19,101 9.94 6,391,968 585,609 12,760 10.68 6,395,582 591,692 6,345 10.69 Note: Details regarding the city's outstanding debt can be found in the notes to the financial statements. * Public Improvement Revenue Note, Series 2002 was refunded in 2012, this includes the payoff of the original bonds. 141 City of Clermont, Florida Pledged -Revenue Coverage Last Ten Fiscal Years Public Improvement Revenue Refunding Note, Series 2016 Debt Service Public Communications Total Revenue Fiscal Service Service Available for Year Taxes Tax Debt Service 2008 - - - 2009 - - - 2010 - - - 2011 - - - 2012 - - - 2013 - - - 2014 2,887,161 1,216,076 4,103,237 2015 2,952,785 1,161,566 4,114,351 2016 3,405,642 1,138,032 4,543,674 2017 3,328,087 1,122,258 4,450,345 Debt Service Principal Interest Coverage - - N/A - - N/A - - N/A - - N/A - - N/A - - N/A - 82,350 49.83 305,772 178,337 8.50 5,694,228 195,148 0.77 255,000 105,635 12.34 Note: Details regarding the city's outstanding debt can be found in the notes to the financial statements. Public Improvement Revenue Note, Series 2013 was refunded in 2016, this includes the payoff of the original bonds. `EW City of Clermont, Florida Pledged -Revenue Coverage Last Ten Fiscal Years Infrastructure Sales Surtax Revenue Note, Series 2016 Note: Details regarding the city's outstanding debt can be found in the notes to the financial statements. 143 Infrastructure Fiscal Sales Debt Service Year Surtax Principal Interest Coverage 2008 - - - N/A 2009 - - - N/A 2010 - - - N/A 2011 - - - N/A 2012 - - - N/A 2013 - - - N/A 2014 - - - N/A 2015 - - - N/A 2016 2,964,966 - 27,466 107.95 2017 3,115,549 230,716 109,914 9.15 Note: Details regarding the city's outstanding debt can be found in the notes to the financial statements. 143 City of Clermont, Florida Pledged -Revenue Coverage Last Ten Fiscal Years Master Plan Capital Projects Revenue Note, Series 2017 Infrastructure Recreation Fiscal Sales Impact Year Surtax Fees Stormwater Sales R e 2008 - - 2009 - - 2010 - - 2011 - - 2012 - - 2013 - - 2014 - - 2015 - - 2016 2017 3,115,549 1,495,242 Debt Service venue Principal 1,002,859 - Interest Coverage - N/A - N/A - N/A - N/A - N/A - N/A - N/A - N/A N/A - N/A Note: Details regarding the city's outstanding debt can be found in the notes to the financial statements. No debt service was required to be paid in FY 2017 144 City of Clermont, Florida Pledged -Revenue Coverage Last Ten Fiscal Years Water and Sewer Revenue and Refunding Bonds 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. 3Includes interest paid on the 2000 and 2009 Refunding Bonds 145 Water and Water and Sewer Sewer Net Revenue Fiscal Operating Operating Available for Debt Service Year Revenues' Expenses2 Debt Service Principal Interest Coverage 2008 10,075,706 7,192,314 2,883,392 390,000 892,688 2.25 2009 10,561,949 6,511,487 4,050,462 410,000 883,206 3.13 2010 10,001,836 6,999,096 3,002,740 430,000 744,892 3 2.56 2011 10,561,295 7,080,592 3,480,703 535,000 660,640 2.91 2012 10,496,535 6,377,695 4,118,840 580,000 643,307 3.37 2013 10,687,908 6,677,774 4,010,134 595,000 604,811 3.34 2014 11,108,744 7,090,566 4,018,178 615,000 586,461 3.34 2015 11,767,901 7,419,231 4,348,670 630,000 567,636 3.63 2016 12,578,644 7,272,716 5,305,928 650,000 548,236 4.43 2017 13,226,994 7,661,085 5,565,909 670,000 504,122 4.74 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. 3Includes interest paid on the 2000 and 2009 Refunding Bonds 145 City of Clermont, Florida Demographic and Economic Statistics Last Ten Fiscal Years Education Level in Per Capita Personal Income Median Formal (amounts Fiscal Incomez expressed in Year Population' thousands) 2007 22,882 $ 500,338 2008 23,476 696,040 2009 24,199 717,597 2010 28,742 727,000 2011 29,358 748,482 2012 29,827 784,361 2013 30,201 802,803 2014 31,745 816,926 2015 32,348 854,020 2016 34,667 1,023,959 2017 35,807 1,085,991 Education Level in Per Capita Years of Personal Median Formal School Unemploy- Incomez Agee Schooling2 Enrollment3 ment Rate $ 21,866 36.8 13.6 5,915 3.8% 29,649 39.6 13.2 5,436 7.1% 29,654 39.7 13.2 4,900 12.3% 25,294 36.8 13.6 5,024 9.8% 25,495 40.9 13.6 5,116 9.3% 26,297 46.8 13.6 5,158 7.0% 26,582 41.5 13.8 5,153 5.8% 25,734 41.9 13.7 5,198 5.6% 26,401 42.1 13.7 5,172 4.8% 29,537 42.1 13.3 5,314 4.4% 30,329 41.6 13.3 5,183 3.1% Sources: ' 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 was only available on a countywide basis through 2009. 146 City of Clermont, Florida Principal Employers Current Year and Nine Years Ago Source: Florida Department of Economic Opportunity, Labor Market Statistics Center 147 2017 2008 Number Percentage of Number Percentage of of Total City of Total City Employer Employees Rank Employment Employees Rank Employment Total City Employment 16,290 13,104 Publix Supermarkets 1,652 10.14% 777 3 5.93% South Lake Hospital, Inc. 1,512 9.28% 1,000 2 7.63% Lake County School System 1,074 6.59% 503 4 3.84% Walmart 410 2.52% 1,930 1 14.73% City of Clermont 351 2.15% 276 8 2.11% Lowe's 340 2.09% Lake County Correctional Ins 334 2.05% Target Corporation 300 1.84% 309 5 2.36% Home Depot 180 1.10% Clermont Health & Rehab 170 1.04% Ford of Clermont 300 6 2.29% Winn Dixie 291 7 2.22% Progressive Plumbing Inc. 220 9 1.68% Westminster Care of Clermont 175 10 1.34% TOTAL 6,323 38.82% 5,781 44.12% Source: Florida Department of Economic Opportunity, Labor Market Statistics Center 147 Employer Kings Ridge South Lake Hospital Taylor Morrison of Florida Living Well Lodges Clermont City of Clermont Vistas at Lost Lake Westminster Comm Care Service Centennial Citrus Tower Standard Pacific Homes Westdale Sundance Heritage Hills of Clermont Lennar Homes Lake County Schools KB Homes Inc. Sundance Clermont LLC Osprey Ridge Apartments Emerald Lakes of Clermont TOTAL City of Clermont, Florida Principal Water Customers Current Year and Nine Years Ago 2017 2008 Usage 2 Percentage of Usage 19,303 Percentage of (thousands 5 Total City (thousands 9,808 Total City of gallons) Rank Metered Flow' of gallons) Rank Metered Flow 138,781 1 5.06% 38,149 2 1.39% 28,177 1 1.09% 27,942 3 1.02% 25,556 4 0.93% 23,922 5 0.87% 14,642 6 0.57% 22,364 6 0.82% 16,043 7 0.58% 8,628 9 0.33% 14,461 8 0.53% 13,401 9 0.49% 13,260 10 0.48% .7.7.7, V / 7 12.17% 26,272 2 20,999 3 19,303 4 15,731 5 9,995 7 9,808 8 7,727 10 161,282 ' The City of Clermont had a total metered water flow of approximately 2,743,657,000 gallons for the 12 -month period ending September 30, 2017 148 1.01% 0.81% 0.75% 0.61% 0.39% 0.38% 0.30% 6.23% Employer South Lake Hospital Living Well Lodges Clermont LLC Vista at Lost Lake Westminster Comm Care Service Centennial Citrus Tower LLC Westdale Sundance LTD IP9 Clermont LLC Osprey Ridge Apartments Eastridge High School Oakridge Apartments Lake County Schools Blue Water Express Car Wash Gardens at Citrus Tower Heritage Hills City of Clermont Lennar Homes Inc. Kings Ridge TOTAL City of Clermont, Florida Principal Sewer Customers Current Year and Nine Years Ago 2017 2008 Usage 2 Percentage of Usage Percentage of (thousands 9,977 Total City (thousands Total City of gallons) Rank Metered Flow' of gallons) Rank Metered Flow 35,485 1 3.51% 24,789 1 2.826% 25,556 2 2.53% 22,364 3 2.21% 15,294 4 1.51% 10,078 6 1.15% 14,461 5 1.43% 13,260 6 1.31% 11,252 7 1.11% 10,153 8 1.00% 10,731 5 1.22% 8,954 9 0.88% 8,375 10 0.83% 165,154 16.329% 19,205 2 16,342 3 11,599 4 9,977 7 9,758 8 7,607 9 1,970 10 122,056 The City of Clermont had a total metered water flow for wastewater billing purposes of approximately 1,011,827,000 gallons for the 12 -month period ending September 30, 2017 149 2.19% 1.86% 1.32% 1.14% 1.11% 0.87% 0.22% 13.92% City of Clermont, Florida Full-time Equivalent City Government Employees by Function Last Ten Fiscal Years Function General Government Public Safety: Police Sworn personnel Non sworn personnel Fire Firefighters Other personnel Building Services Physical Environment Transportation Human Services Culture & Recreation Water Sewer Stormwater Sanitation Total Source: City of Clermont Finance Department. Full-time Equivalent Employees as of September 30 2008 2009 2010 2011 30.50 31.00 28.00 27.00 53.00 53.00 57.00 57.00 17.00 17.00 16.00 5.00 49.00 47.85 48.00 48.00 2.00 2.00 2.00 2.00 0.00 1.65 1.40 1.40 10.00 10.00 4.50 4.00 15.60 15.60 15.35 13.50 2.00 0.00 0.00 0.00 26.60 25.60 26.10 22.00 29.40 29.40 29.15 29.15 26.30 26.30 26.05 25.85 8.80 8.80 9.15 9.40 16.80 16.80 16.30 16.70 2b(.UU Zbb.UU 150 279.00 261.00 Full-time Equivalent Employees as of September 30 2012 2013 2014 2015 2016 2017 25.85 26.66 31.56 36.00 36.00 38.70 57.00 57.00 61.00 61.00 66.00 70.00 5.00 6.00 6.00 6.00 6.00 6.00 47.80 47.80 56.80 56.80 59.80 66.50 2.00 2.00 5.20 4.20 4.20 6.50 0.60 0.60 6.00 6.00 7.00 11.30 4.00 4.95 4.70 7.45 8.70 10.70 14.80 14.65 12.95 12.85 12.60 14.60 0.00 0.00 0.00 0.00 0.00 0.00 21.20 21.10 27.25 33.35 35.35 39.35 29.45 29.66 30.61 29.35 29.65 29.15 24.50 23.78 23.88 24.15 26.45 26.95 7.95 6.72 6.87 6.65 7.75 10.25 151 City of Clermont, Florida Operating Indicators by Function Last Ten Fiscal Years 152 Fiscal Year Function 2008 2009 2010 2011 General Government Municipal boundary (square miles) 14.42 14.43 14.76 14.90 Business Tax Receipts issued 2,263 1,771 1,833 1,843 A/P Checks issued 6,440 6,042 5,722 4,875 Commercial construction (units) 42 19 10 3 Commercial construction (value in thousands) 18,859 13,223 8,357 18,020 Residential construction (units) 301 204 305 151 Residential construction (value in thousands) 56,578 56,092 53,202 23,558 Public Safety: Police Auto accidents 1,272 972 955 1,121 Physical arrests 842 949 854 699 911 calls received 6,046 6,828 5,230 5,587 Evidence processed (pieces) 1,300 1,652 1,349 1,297 Parking violations 145 107 137 378 Traffic violations 5,103 4,553 4,981 6,312 Fire Volunteer firefighters 8 10 6 6 Fire inspections completed 880 979 2,121 896 Emergency calls answered 3,177 3,155 3,112 3,822 Non -emergency calls answered 234 434 352 805 Water Residential accounts 16,959 17,375 17,884 18,240 Commercial accounts 1,156 1,201 1,206 1,210 Annual water usage (thousands of gallons) 2,589,664 2,312,962 2,054,236 2,275,936 Sewer Residential accounts 11,913 12,154 12,508 12,722 Commercial accounts 1,120 1,158 1,158 1,167 Sources: Various government departments. Decrease in accounts due to software conversion combining multi -metered services 152 25,882 53,055 62,117 55,178 103,423 87,873 1,259 1,402 Fiscal Year 1,573 1,909 2012 2013 2014 2015 2016 2017 14.95 14.95 15.18 16.65 16.78 16.78 2,237 2,483 1,955 1,701 1,584 1,838 2,336 2,288 3,529 2,747 3,276 3,651 8 20 15 16 20 14 15,203 34,268 17,288 8,625 42,241 13,302 173 327 572 323 740 433 25,882 53,055 62,117 55,178 103,423 87,873 1,259 1,402 1,357 1,573 1,909 1,909 644 886 631 652 589 593 5,911 6,352 6,643 7,618 6,397 6,809 1,413 2,930 2,384 989 674 1,165 201 252 379 144 181 385 5,389 7,225 4,623 6,879 7,421 6,713 6 - - - - - 662 1,240 3,766 3,813 4,468 2,586 3,320 3,414 4,127 4,202 6,001 6,828 934 447 987 523 806 925 18,619 19,399 19,670 13,242 • 13,561 14,339 1,207 1,232 1,234 1,211 1,220 1,235 2,391,485 2,392,022 2,406,183 2,521,397 2,572,852 2,743,657 12,936 13,407 13,718 13,578 13,860 14,619 1,166 1,194 1,055 1,074 1,091 1,106 153 City of Clermont, Florida Capital Asset Statistics by Function Last Ten Fiscal Years Sources: Various government departments Does not include private systems 154 Fiscal Year Function 2008 2009 2010 2011 General Government Public Safety: Police Police stations 1 1 1 1 Patrol units 45 45 45 46 Fire Fire department facilities 3 3 4 4 Staffed fire stations 3 3 3 3 Fire hydrants 2,140 2,140 2,012 2,016 Fire apparatus 9 9 8 7 Staffed fire apparatus 5 5 5 5 ALS non -transport units 3 4 4 4 Transportation Streets paved (miles) 126.16 131.72 133.20 133.20 Streetlights 1,331 1,331 1,352 1,352 Culture & Recreation Number of parks 22 22 22 23 Parks acreage 349.5 349.5 349.5 349.5 Scenic linear trail (miles) 5.7 5.7 5.7 5.7 Tennis courts 9 9 9 9 Piers 4 4 4 4 Boat ramp 1 1 1 1 Water Miles of water mains 115.98 122.83 124.11 197.40 Sewer Miles of sanitary sewers 59.40 65.18 66.19 132.02 Miles of storm sewers 20.88 24.61 26.32 89.80 Sources: Various government departments Does not include private systems 154 155 Fiscal Year 2012 2013 2014 2015 2016 2017 1 1 1 1 1 1 46 55 57 79 95 98 4 4 4 3 4 5 3 3 3 3 4 4 2,048 2,120 2,146 2,200 2,646 2,646 8 8 8 12 6 7 5 5 5 3 6 6 4 4 4 3 1 6 133.20 173.91 191.52 202.38 210.00 210.60 3,103 3,103 3,127 3,158 3,160 1,309 23 23 23 23 23 24 349.5 349.5 349.5 378.0 443.9 443.9 5.7 5.7 5.7 5.7 7.5 7.5 9 9 9 9 9 9 4 5 5 10 11 11 1 1 1 1 1 1 242.36 243.14 222.75 230.28 229.44 297.00 156.81 160.42 161.25 167.60 168.57 220.00 105.38 109.05 133.70 48.22 47.63 47.56 155 ie 156 OTHER REPORTS 157 ie 158 MCDIRMIT /// DAVIS CERTIFIED PUBLIC ACCOUNTANTS AND ADVISORS INDEPENDENT AUDITOR'S REPORT ON INTERNAL CONTROL OVER FINANCIAL REPORTING AND ON COMPLIANCE AND OTHER MATTERS BASED ON AN AUDIT OF FINANCIAL STATEMENTS PERFORMED IN ACCORDANCE WITH GOVERNMENT AUDITING STANDARDS Honorable Mayor and City Council City of Clermont, Florida We have audited, in accordance with auditing standards generally accepted in the United states of America and the standards applicable to financial audits contained in Government Auditing Standards issued by the Comptroller General of the United States, the financial statements of the governmental activities, business -type activities, each major fund, and the aggregate remaining fund information of the City of Clermont, Florida, as of and for the year ended September 30, 2017, and the related notes to the financial statements, which collectively comprise the City's basic financial statements and have issued our report thereon dated April 26, 2018. Internal Control Over Financial Reporting In planning and performing our audit of the financial statements, we considered the City of Clermont, Florida's internal control over financial reporting (internal control) to determine the audit procedures that are appropriate in the circumstances for the purpose of expressing our opinions on the financial statements, but not for the purpose of expressing an opinion on the effectiveness of City of Clermont's internal control. Accordingly, we do not express an opinion on the effectiveness of the City's internal control over financial reporting. A deficiency in internal control exists when the design or operation of a control does not allow management or employees, in the normal course of performing their assigned functions, to prevent, or detect and correct misstatements on a timely basis. A material weakness is a deficiency, or a combination of deficiencies, in internal control, such that there is a reasonable possibility that a material misstatement of the entity's financial statements will not be prevented, or detected and corrected on a timely basis. A significant deficiency is a deficiency, or a combination of deficiencies, in internal control that is less severe than a material weakness, yet important enough to merit attention by those charged with governance. Our consideration of internal control over financial reporting was for the limited purpose described in the first paragraph of this section and was not designed to identify all deficiencies in internal control over financial reporting that might be material weaknesses or significant deficiencies. Given these limitations, during our audit we did not identify any deficiencies in internal control over financial reporting that we consider to be material weaknesses. However, material weaknesses may exist that have not been identified. MCDIRMIT DAVIS & COMPANY, LLC 934 NORTH MAGNOLIA AVENUE, SUITE 100 ORLANDO, FLORIDA 32803 TELEPHONE: 407-843-5406 FAX: 407-649-9339 EMAIL: INFO@MCDIRMITDAVIS.COM MEMBERS: PRIVATE COM PAN I ES PRACTICE SECTION AMERICAN INSTITUTE OF CERTIFIED PUBLIC ACCOUNTANTS FLORIDA INSTITUTE OF CERTIFIED PUBLIC ACCOUNTANTS 159 Compliance and Other Matters As part of obtaining reasonable assurance about whether City of Clermont's financial statements are free from material misstatement, we performed tests of its compliance with certain provisions of laws, regulations, contracts and grant agreements, noncompliance with which could have a direct and material effect on the determination of financial statement amounts. However, providing an opinion on compliance with those provisions was not an objective of our audit and, accordingly, we do not express such an opinion. The result of our tests disclosed no instances of noncompliance, or other matters that are required to be reported under Government Auditing Standards. Purpose of this Report The purpose of this report is solely to describe the scope of our testing of internal control and compliance and the results of that testing, and not to provide an opinion on the effectiveness of the entity's internal control or on compliance. This report is an integral part of an audit performed in accordance with Government Auditing Standards in considering the entity's internal control and compliance. Accordingly, this communication is not suitable for any other purpose. �l�,G�i�►nit l�Lcrid � d&MIO U LLC Orlando, FL April 26, 2018 160 MCDIRMIT /// DAVIS CERTIFIED PUBLIC ACCOUNTANTS AND ADVISORS MANAGEMENT LETTER Honorable Mayor and City Council City of Clermont, Florida Report on the Financial Statements We have audited the financial statements of the City of Clermont, Florida, as of and for the fiscal year ended September 30, 2017, and have issued our report thereon dated April 26, 2018. Auditor's Responsibility We conducted our audit in accordance with auditing standards generally accepted in the United States of America; the standards applicable to financial audits contained in Government Auditing Standards, issued by the Comptroller General of the United States; and Chapter 10.550, Rules of the Florida Auditor General. Other Reporting Requirements We have issued our Independent Auditor's Report on Internal Control over Financial Reporting and on Compliance and Other Matters Based on an Audit of the Financial Statements Performed in Accordance with Government Auditing Standards; and Independent Auditor's Report on an examination conducted in accordance with ACIPA Professional Standards, AT -C Section 315, regarding compliance requirements in accordance with Chapter 10.550, Rules of the Auditor General. Disclosures in those reports and schedule, which are dated April 26, 2018, should be considered in conjunction with this management letter. Prior Audit Findings Section 10.554(1)(i.)1., Rules of the Auditor General, require that we determine whether or not corrective actions have been taken to address findings and recommendations made in the preceding annual financial audit report. There were no recommendations in the preceding audit report. Official Title and Legal Authority Section 10.554(1)(i)4., Rules of the Auditor General, requires that the name or official title and legal authority for the primary government and each component unit of the reporting entity be disclosed in this management letter, unless disclosed in the notes to the financial statements. This information has been disclosed in the notes to the financial statements. MCDIRMIT DAVIS & COMPANY, LLC 934 NORTH MAGNOLIA AVENUE, SUITE 100 ORLANDO, FLORIDA 32803 TELEPHONE: 407-843-5406 FAX: 407-649-9339 EMAIL: INFO@MCDIRMITDAVIS.COM MEMBERS: PRIVATE COM PAN I ES PRACTICE SECTION AMERICAN INSTITUTE OF CERTIFIED PUBLIC ACCOUNTANTS FLORIDA INSTITUTE OF CERTIFIED PUBLIC ACCOUNTANTS 161 Financial Condition and Management Section 10.554(1)(i)5.a. and 10.556(7), Rules of the Auditor General, require us apply appropriate procedures and communicate the results of our determination as to whether or not the City of Clermont, Florida 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. Pursuant to Sections 10.554(1)(i)5.c. and 10.556(8), Rules of the Auditor General, we applied financial condition assessment procedures for the City. It is management's responsibility to monitor the City of Clermont, Florida's financial condition, and our financial condition assessment was based in part on representations made by management and the review of financial information provided by same. Section 10.554(1)(i)2., Rules of the Auditor General, requires that we communicate any recommendations to improve financial management. In connection with our audit, we did not have any such recommendations. Annual Financial Report Section 10.554(1)(i)5.b. and 10.556(7), Rules of the Auditor General, require us to apply appropriate procedures and report the results of our determination as to whether the annual financial report for the City of Clermont, Florida for the fiscal year ended September 30, 2017, 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, 2017. In connection with our audit, we determined that these two reports were in agreement. Additional Matters Section 10.554(1)(i)3., Rules of the Auditor General, requires us to communicate noncompliance with provisions of contracts or grant agreements, or abuse, that have occurred, or are likely to have occurred, that have an effect on the financial statements that is less than material but which warrants the attention of those charged with governance. In connection with our audit, we did not have any such findings. Purpose of This Letter Our management letter is intended solely for the information and use of the Legislative Auditing Committee, members of the Florida Senate and the Florida House of Representatives, the Florida Auditor General, Federal and other granting agencies, the council, and applicable management, and is not intended to be and should not be used by anyone other than these specified parties. �i�,�li�►nit Ll � 6&m�oaru LLC, Orlando, Florida April 26, 2018 162 MCDIRMIT /// DAVIS CERTIFIED PUBLIC ACCOUNTANTS AND ADVISORS Honorable Mayor and City Council City of Clermont, Florida We have audited the financial statements of City of Clermont as of and for the year ended September 30, 2017, and have issued our report thereon dated April 26, 2018. Professional standards require that we advise you of the following matters relating to our audit. Our Responsibility in Relation to the Financial Statement Audit As communicated in our engagement letter dated June 13, 2017, our responsibility, as described by professional standards, is to form and express an opinion(s) about whether the financial statements that have been prepared by management with your oversight are presented fairly, in all material respects, in conformity with accounting principles generally accepted in the United States of America. Our audit of the financial statements does not relieve you or management of your respective responsibilities. Our responsibility, as prescribed by professional standards, is to plan and perform our audit to obtain reasonable, rather than absolute, assurance about whether the financial statements are free of material misstatement. An audit of financial statements includes consideration of internal control over financial reporting as a basis for designing audit procedures that are appropriate in the circumstances, but not for the purpose of expressing an opinion on the effectiveness of the entity's internal control over financial reporting. Accordingly, as part of our audit, we considered the internal control of City of Clermont solely for the purpose of determining our audit procedures and not to provide any assurance concerning such internal control. We are also responsible for communicating significant matters related to the audit that are, in our professional judgment, relevant to your responsibilities in overseeing the financial reporting process. However, we are not required to design procedures for the purpose of identifying other matters to communicate to you. Planned Scope and Timing of the Audit We conducted our audit consistent with the planned scope and timing we previously communicated to you. Compliance with All Ethics Requirements Regarding Independence The engagement team, others in our firm, as appropriate, and our firm have complied with all relevant ethical requirements regarding independence. MCDIRMIT AVIS & COMPANY, LLC 934 NORTH MAGNOLIA AVENUE, SUITE 100 ORLANDO, FLORIDA 32803 TELEPHONE: 407-843-5406 FAX: 407-649-9339 EMAIL: INFO@MCDIRMITDAVIS.COM MEMBERS: PRIVATE COM PAN I ES PRACTICE SECTION AMERICAN INSTITUTE OF CERTIFIED PUBLIC ACCOUNTANTS FLORIDA INSTITUTE OF CERTIFIED PUBLIC ACCOUNTANTS 163 Qualitative Aspects of the Entity's Significant Accounting Practices Significant Accounting Policies Management has the responsibility to select and use appropriate accounting policies. A summary of the significant accounting policies adopted by City of Clermont is included in Note 1 to the financial statements. There have been no initial selections of accounting policies and no changes in significant accounting policies or their application during 2017. No matters have come to our attention that would require us, under professional standards, to inform you about (1) the methods used to account for significant unusual transactions and (2) the effect of significant accounting policies in controversial or emerging areas for which there is a lack of authoritative guidance or consensus. Significant Accounting Estimates Accounting estimates are an integral part of the financial statements prepared by management and are based on management's current judgments. Those judgments are normally based on knowledge and experience about past and current events and assumptions about future events. Certain accounting estimates are particularly sensitive because of their significance to the financial statements and because of the possibility that future events affecting them may differ markedly from management's current judgments. The most sensitive accounting estimates affecting the financial statements are: Management's estimate for the allowance for doubtful accounts is based on historical loss levels, and an analysis of the individual accounts. We evaluated the key factors and assumptions used to develop the allowance in determining that it is reasonable in relation to the financial statements taken as a whole. Management's estimation for the allowance for depreciation is based on the estimated useful lives of the capital assets. We evaluated the reasonableness of the useful lives as well as the depreciation methods in determining that it is reasonable in relation to the financial statements taken as a whole. Financial Statement Disclosures Certain financial statement disclosures involve significant judgment and are particularly sensitive because of their significance to financial statement users. The most sensitive disclosures affecting City of Clermont, Florida's financial statements relate to revenue recognition as described in Note 1. Significant Difficulties Encountered During the Audit We encountered no significant difficulties in dealing with management relating to the performance of the audit. 164 Uncorrected and Corrected Misstatements For purposes of this communication, professional standards require us to accumulate all known and likely misstatements identified during the audit, other than those that we believe are trivial, and communicate them to the appropriate level of management. Management has corrected all such misstatements. In addition, none of the misstatements detected as a result of audit procedures and corrected by management were material, either individually or in the aggregate, to the financial statements taken as a whole. Disagreements with Management For purposes of this letter, professional standards define a disagreement with management as a matter, whether or not resolved to our satisfaction, concerning a financial accounting, reporting, or auditing matter, which could be significant to City of Clermont, Florida's financial statements or the auditor's report. No such disagreements arose during the course of the audit. Representations Requested from Management We have requested certain written representations from management, which are included in the management representation letter dated April 26, 2018. Management's Consultations with Other Accountants In some cases, management may decide to consult with other accountants about auditing and accounting matters. Management informed us that, and to our knowledge, there were no consultations with other accountants regarding auditing and accounting matters. Other Significant Matters, Findings, or Issues In the normal course of our professional association with City of Clermont, Florida , we generally discuss a variety of matters, including the application of accounting principles and auditing standards, operating and regulatory conditions affecting the entity, and operational plans and strategies that may affect the risks of material misstatement. None of the matters discussed resulted in a condition to our retention as City of Clermont, Florida's auditors. This report is intended solely for the 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. Very truly yours, -1&&V7zitLl� Ggrn�oa�u04 LLC Orlando, Florida April 26, 2018 165 ie 166 MCDIRMIT /// DAVIS CERTIFIED PUBLIC ACCOUNTANTS AND ADVISORS INDEPENDENT AUDITOR'S REPORT ON COMPLIANCE WITH THE REQUIREMENTS OF SECTION 218.415, FLORIDA STATUTES The Honorable Mayor and City Council City of Clermont, Florida We have examined City of Clermont, Florida's (the City) compliance with the requirements of Section 218.415, Florida Statutes, during the year ended September 30, 2017. Management is responsible for the City's compliance with those requirements. Our responsibility is to express an opinion on the City's compliance based on our examination. Our examination was conducted in accordance with attestation standards established by the American Institute of Certified Public Accountants and the standards applicable to attestation engagements contained in Government Auditing Standards issued by the Comptroller General of the United States and, accordingly, included examining, on a test basis, evidence about the City's compliance with those requirements and performing such other procedures as we considered necessary in the circumstances. We believe that our examination provides a reasonable basis for our opinion. Our examination does not provide a legal determination on the City's compliance with specified requirements. In our opinion, City of Clermont, Florida complied, in all material respects, with the aforementioned requirements for the year ended September 30, 2017. Ivaiunit L1wH4 b 6&mparu� LLC Orlando, Florida April 26, 2018 MCDIRMIT DAVIS & COMPANY, LLC 934 N. MAGNOLIA AVENUE, SUITE 100 ORLANDO, FLORIDA 32803 TELEPHONE: 407-843-5406 FAX: 407-649-9339 EMAIL: INFO@MCDIRMITDAVIS.COM MEMBERS: PRIVATE COMPANIES PRACTICE SECTION AMERICAN INSTITUTE OF CERTIFIED PUBLIC ACCOUNTANTS FLORIDA INSTITUTE OF CERTIFIED PUBLIC 167 ie 168